Supreme Audit concerned with ventilators purchase from arms dealer

On Tuesday evening, the Sejm Health Committee is to examine budget spending report by the Supreme Audit Office (NIK), relating to health issues.

One of the elements of this report pertains to ventilators purchased by the Health Ministry from an arms dealer. E&K company, which was supposed to deliver 1,241 devices, delivered only 200 and past the agreed date.

In a document, seen by tvn24.pl, the NIK stated there had been "irregularities in public procurements, lack of proper protection of payments made by the Health Ministry to buy ventilators".

"Due to irregularities detected during audit, the Supreme Audit Office, asks for creating and implementing procedures for Health Ministry spending (...) in case of mass occurrences dangerous to health and life of citizens, which would prevent reckless spending of public money" - we read in the document.

In April 2020, the Health Ministry, with the then chief Łukasz Szumowski and his deputy Janusz Cieszyński, signed a contract for a delivery of ventilators with the E&K company, represented by a former arms dealer.

The NIK says in its analysis the health minister received on April 14 four offers of ventilators delivery from the company.

"In the offers, the contractor did not propose any protection of the payments" - the NIK stressed and added that the deputy minister "approved the order, accepting payment in advance".

"On that same day, bank transfers were made totaling 35,108,0 thousand euro (161,272,7 thousand zlotys), although according to the contract, the payment was supposed to be made on the date specified in the VAT invoice".

In the analysis, the NIK also stresses that the ministry paid for the ventilators, even though, instead of VAT invoice, the E&K firm issued a document referred to as "invoice oryginal", which "did not contain information regarding the VAT rate and amount, and therefore did not meet invoice requirements". Duty to include this information is specified in the law on VAT.

The NIK confirmed concerns raised by Civic Platform MPs Michał Szczerba and Dariusz Joński, who had found out during a parliamentary control that the E&K company did not issue normal invoices for the ventilators, but "pro forma" ones". In April, the MPs asked the NIK to look into the issue.

"The Undersecretary of State in the Health Ministry explained he decided to leave out security measures, bearing in mind that the time the E&K would need to be granted additional protection, could have significantly delayed the delivery of the equipment. Epidemic situation and experience of previous weeks suggested that decisions regarding purchase of ventilators should be made immediately, as the offers were expiring very fast" - the report reads.

Undersecretary of state who answered the auditors' questions (NIK did not specify whether it was Cieszyński), reassured the the former arms dealer's company had been on the list of firms recommended by the Intelligence Agency.

"The offer was positively verified by the Central Anti-Corruption Bureau, while the bidder was on the list of recommended suppliers, provided to state-owned companies by the Intelligence Agency" - the document by the NIK reads.

Janusz Cieszyński, current minister responsible for digitalisation, sent us a text message saying: "The ministry's standpoint, confirmed from the very beginning by accounting and legal service, is that an implementation agreement signed on April 14 was the basis for transferring funds. It's not true that I resigned from securing the payment - standard protection was not available at the time, and so we decided to follow procedure established together with the CBA, based on which the contractor received a positive recommendation".

MP Michał Szczerba told tvn24.pl that the services "deliberately open the doors for the arms dealer, to government and state-owned company contracts".

"The NIK confirmed all concerns raised after parliamentary control. The auditors confirmed lack of State Treasury interest protection and reckless spending. This should end in a political death for the politician, rather than in promotion (a few weeks ago Cieszyński returned to the cabinet, he is responsible for digitalisation)" - said Civic Platform lawmaker.

In his view, "this transaction shouldn't have even taken place", because of the violation of contract provisions, according to which "payments are made based on VAT invoices, which have not been issued".

According to Dariusz Joński, "the NIK report looks like an indictment against minister Cieszyński, who signed the ventilators purchase contract with the arms dealer".

"The report clearly explains how the arms dealer siphoned off money from the Health Ministry. NIK auditors have 'dotted the i's'. Now, it's high time for the prosecutor's move" - he added.

Last week, Szczerba said that "the arms dealer still owes the Ministry of Health 50 million zlotys".