The Anti-Corruption Commission (ACC) has launched an investigation into Addu Equatorial Hospital (AEH) following revelations that the institution procured items for MVR 1.7 million that were valued at just MVR 34,000.
The issue surfaced in connection with a tender for laboratory consumables required for the hospital and its affiliated health centres for the year 2025.
According to procurement details highlighted in the hospital's audit reports for 2022, 2023, and 2024, a company submitted a bid of MVR 1,765,800 (MVR 1.7 million) to supply 40,000 micropipette tips. This amounts to a unit price of MVR 44.14 per tip.
In stark contrast, the hospital’s previous average purchase price for the same item was 31 laari (MVR 0.31). Furthermore, a price check with the State Trading Organisation (STO) revealed that the item is sold for just MVR 1.
The audit noted that the procurement process failed to comply with the State Financial Regulations.
Under these regulations, bid evaluations must verify whether proposed prices are reasonable and reflect fair market value. The hospital’s own information sheets also mandate that a technical team ensure all items are offered at competitive rates. However, this crucial step was bypassed during the process.
Additionally, the procurement attracted only a single bidder, who failed to submit any documentation of prior experience. Despite this, the hospital proceeded with the award rather than re-tendering the project. The audit report highlighted that the cost of these pipette tips alone accounted for 64 percent of the total procurement value.
Although the hospital’s Bid Committee had stipulated that each item must be evaluated and awarded individually, neither the evaluation team nor the committee took action when prices significantly higher than market rates were proposed.
As the ACC investigation is ongoing, the Audit Office has advised the hospital to withhold payment on the supplier's invoice. The office warned that releasing the funds could obstruct the investigation and result in a substantial financial loss to the state.
The findings further indicate broader negligence at Addu Equatorial Hospital regarding the efficient management of public funds. The audit underscored a recurring pattern of the hospital procuring goods at inflated prices far exceeding market rates.
