PHSA spending under examination

VICTORIA, BC – The province of British Columbia is investigating irregularities in spending and management that have been reported at the Provincial Health Services Authority (PHSA). The issue includes procurement of problematic respirators, along with spending on renovations and catering.

According to a CBC report, the most costly mistake by the PHSA was the purchase of unusable face masks in the early days of the COVID-19 pandemic. The health authority confirmed that its president and CEO, Benoit Morin (pictured), who had just transferred from Quebec, sought a supplier in his home province of Quebec “early in the pandemic.”

Of $11.5 million paid to the supplier, almost $7 million worth of masks brought in from China were deemed “problematic” and unusable in the health sector.

Sources said many were KN95 masks (Chinese standard) instead of N95 (North American standard) and failed fit tests, while other masks were deemed to be counterfeit.

The PHSA admits it eventually wrote off $6.7 million of the cost at the end of March but said nothing of potential additional losses carried into this fiscal year.

By comparison, the federal government admitted it had purchased unusable face masks through a Montreal supplier back in May. It publicly vowed it would not pay for the shipments.

Adrian Dix, Minister of Health, has issued the following statement: “On Monday, Nov. 30, 2020, specific concerns about decisions and spending at the PHSA were raised through the media. In response to the concerns, I directed the deputy minister of health to assess the PHSA’s decisions and conduct relating to specific concerns, and to provide recommendations on actions, changes to policies or other such changes that could be taken. “The concerns to be assessed were that:

• the PHSA undertook unnecessary, unbudgeted renovations to the 14th floor of PHSA headquarters at 1333 West Broadway, Vancouver;
• the PHSA made inappropriate human resource decisions relating to hiring, appointments, continuity planning, severance and salary continuance;
• the PHSA authorized excessive catering expenses for PHSA executives and staff from mid-March 2020 to mid-June 2020; and
• concerns relating to the procurement of problematic respirators and appropriateness of follow-up with the vendor.

“On Thursday, Dec. 3, 2020, I received and accepted recommendations made by the deputy minister. These include:

• limitations on the PHSA’s authority to spend internal capital without the deputy minister’s approval;
• a review and refresh of policies relating to internal capital planning, to be completed by the Ministry of Health;
• limitations on the PHSA’s authority to make senior executive changes without the deputy minister’s approval;
• a review of business meeting expense policies for the PHSA and each regional health authority to ensure expense policies are reasonable from a taxpayer’s perspective; and
• the hiring of an independent third-party advisor to provide a report to the deputy minister of health that will fully clarify and review concerns about the appropriateness of the PHSA’s handling of a problematic purchase of personal protective equipment and other related concerns, to help restore public confidence in the PHSA and its leadership.

“I have made it clear that it is critical that the public has confidence in the PHSA and the management of B.C.’s health system in general.”

Regarding the purchase of problematic personal protective equipment, the government has directed the deputy minister of health to hire an independent third-party advisor to provide a report to the deputy minister no later than Jan. 15, 2021, that:

• fully clarifies the PHSA CEO’s role in all aspects of the transaction with Luminarie, a healthcare product distribution company;
• reviews concerns raised about the appropriateness of the decisions made to dismiss members of the PHSA’s executive team and chief internal auditor; and
• provides other information, advice or recommendations, as appropriate, that will help restore public confidence in the PHSA and its leadership.

John Bethel, national healthcare leader, Ernst & Young, is recommended as the advisor based on his leadership in healthcare practice nationally and his experience with healthcare transformation in B.C.