[UPDATED] Public Hospital District Spent Thousands on Machines That Didn't Exist
UPDATE: Broward Health just emailed new information containing its explanation for the strange entries I cite below. In short, they say they're the product of a computer glitch. I've copied that explanation on the bottom of this post.
Since 2001, Broward Health has spent nearly a million dollars on ultrasound equipment manufactured by SonoSite, the company where Commissioner Mike Fernandez works as a general manager. This brand loyalty is particularly suspicious considering that in 2001, the district was buying equipment that didn't exist.
Or at least that's how it appears based on a close inspection of this list of Broward Health's SonoSite purchases. In yellow, I've highlighted the hospital system's purchases of the SonoSite Titan and the SonoSite Micromaxx. That was in 2001 -- and as SonoSite's own website attests -- those machines hadn't yet hit the market. The Titan was introduced in 2003, the Micromaxx in 2005.
I contacted the district this afternoon to see if staff could account for this apparent time travel. They're checking it out.
Credit for this bizarre discovery goes to Brian Gill, who runs an ultrasound refurbishing company in Indianapolis and agreed to analyze the documents for us. More curious findings, after the jump.
The document, says Gill, is full of "screaming red flags" -- and not just for the Titan and Micromaxx purchases. Gill pointed out that the district paid $9,350 for one ultrasound probe on January 18, 2001, and bought the exact same probe for $8,250 on the very same day -- a difference of $1,100. "That just doesn't make sense," says Gill.
Nor does it make sense that in some instances, the ultrasound purchases are itemized while in other cases, they're lumped together. The documents show that on January 18, 2001, the district received a quote for a sonogram system for which it paid $46,995. We've highlighted that in purple. Notice the quote's number: L62110A.
Now scroll down to May 17, 2007 -- which is also in purple highlight. Again, a sonogram system for $46,995 with the exact same quote number, L62110A. Why would the hospital be paying the same price for a machine in 2007 that it bought in 2001? And why wouldn't someone have asked for a new quote?
In fact, it appears that, with just a few exceptions, the purchase orders repeated themselves, starting on December 30, 2005 -- a $28,200 purchase I've highlighted in blue. It appears to be the very same purchase as the first item on the list. Both have vendor numbers that correspond with the SonoSite Titan. As you scroll down, starting from that blue December 30, 2005, entry, you'll see every purchase is for the same item and for the same amount as several years before.
"This is not right," says Gill, who has spent the past 11 years dealing with ultrasound equipment. Gill writes an ultrasound industry blog, which you can read here.
The documents show that the tax-assisted district has spent $874,000 with SonoSite since 2001. Fernandez, who is the general manager for SonoSite's sales in Latin America, has maintained in the past that he has no stake in the Washington state-based company's South Florida sales. He began his term as Broward Health commissioner in the fall of 2007.
Fernandez will get a chance to make his case tomorrow morning at the Broward Health board meeting. As you can see on page four of the posted agenda, Fernandez has volunteered to let the Florida Commission on Ethics scrutinize his associations with SonoSite to make sure they're in accordance with state law.
It should be the most action-packed board meeting in years. Commissioner Robert Bernstein has asked his fellow board members to fire CEO Frank Nask. He's also seeking more information about a pay raise that Nask gave to a friend, Deborah Breen.
Here is the explanation that Broward Health's systems coordinator, Alexandra Babenderde provided when asked by fellow staff to account for the very strange items on the report of SonoSite purchases:
After reviewing the report, a few things were pulled into the report which were not pertaining to Sonosite.
Back in 2001, the beginning of Lawson (presumably, software for tracking purchases), we began with the series of PO (purchase order) numbers starting with 10001. Since then the Purchasing Director decided to implement a separate PO series of numbers just for Capital Equipment orders. Due to the change there are a series of numbers which overlap with the Capital PO Numbers.
ie. 23253 and 23253-CAP.
When Crystal reports are run, it will bring in portions of detail from both purchase orders when the overlap occurs. If you look at the report, you will see the above mentioned purchase order twice. Once with the date pulling in PO23253 and one with the date for the actual PO 23253-CAP.
Broward Health attached a revised list of SonoSite purchases that reflects just $475,000 in spending since 2001. I've sent that document to Gill to see whether it resolves the doubts he had with the initial document. I'll update this post when he gets back to us.
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