Fixed capital of the hospitals increased according to the purpose during COVID-19


The State Audit Office carried out an audit to ascertain whether the Ministry of Health used the funding of 14.9 million euros allocated to increase the capacity of the largest hospitals in the country following the purpose. The audit has revealed that one has invested in the fixed capital of the Eastern Hospital, the Stradiņš Hospital, and the Children’s Hospital in 2020 as planned. Within the framework of the funding allocated to them, the hospitals have purchased medical equipment for the care of COVID-19 infected patients with minor deviations from the plan. During audits in all three university hospitals, the State Audit Office concluded that the process of purchasing medical equipment was transparent and the decision-making was traceable.

There are 7.6 million euros invested in the fixed capital of the Riga Eastern Clinical University Hospital (Eastern Hospital), 3.7 million euros in the Pauls Stradiņš Clinical University Hospital (Stradiņš Hospital), and 3.6 million euros in the Children’s Clinical University Hospital (Children’s Hospital) out of the allocated funding.

The Ministry of Health took two different approaches to invest in the fixed capital of the hospitals. In the opinion of the auditors and the Ministry of Health as well, the approach of the Eastern Hospital was more appropriate when the allocated funds were invested in the fixed capital of this hospital by compensating the hospital’s actual expenses for the purchase of medical equipment. In this case, as part of the funding granted by the Ministry of Health, the fixed capital of the Eastern Hospital was increased by 788.297 EUR in April only after the medical equipment had been purchased and the exact amount of the costs was known.

In its turn, the Ministry of Health invested the funding allocated in May 2020 for the purchase of medical equipment for COVID-19 infected patients in the fixed capital of the Eastern Hospital, the Stradiņš Hospital, and the Children’s Hospital before the procurement of medical equipment, without knowing the exact costs. The Ministry of Health explained the approach by stating that hospitals needed resources immediately during the emergency and had the professional competence to carry out such procurements. The hospitals made the lists of medical equipment in cooperation with the Ministry of Health, while the Cabinet of Ministers decided to increase the fixed capital of the university hospitals by 14.1 million euros.

While assessing the use of financial resources invested in the fixed capital, the auditors ascertained that the hospitals purchased the medical equipment included in the approved list with insignificant deviations (0.7%) in 2020. Namely, out of the planned 114 medical devices, they have not bought only four for the total amount of 103,517 euros. At the same time, savings of 1.9 million euros have occurred, which the hospitals will use to purchase other medical devices and equipment not originally listed but needed in the event of a COVID-19 outbreak.

The auditors consider that the decentralised approach to the purchase of equipment left decisions to the hospitals, with no one taking responsibility for them at the national level. It has not promoted the economical use of the funding from the state budget. For example, the Eastern Hospital has purchased 13 central patient monitoring stations by paying 9,980 euros without VAT for each station, while the Stradiņš Hospital has purchased three stations by paying 12,000 euros without VAT for each station because they were delivered to the Stradins Hospital in a shorter time and less quantity, so the costs of installation and configuration per unit were higher.

According to the auditors, a centralised agreement on the range, specification, and technical requirements of the medical equipment needed to increase hospitals’ capacity and provide healthcare services to COVID-19 infected patients would both allow more accurate quantification of the funding required to purchase the medical equipment and minimise concerns and discussions about the need of the purchased equipment for the provision of healthcare to COVID-19 patients in particular.