The University Hospital of the West Indies (UHWI) has been flagged by the Auditor General for the alleged misuse of its tax exemption status to facilitate importing goods on behalf of private companies, contributing to losses of over $20 million.

The AG’s report was tabled in the Lower House yesterday.

The audit and accompanying report forms part of a series being conducted by the AG, titled “Ensuring Value for Money in Public Health Procurement,” which includes the conduct of performance audits at some hospitals.

The primary goal of these audits is to assess the economy, efficiency and effectiveness of public health procurement processes in ensuring that maximum value is received from the limited resources available.

In its report on the UHWI, the AG noted that the hospital inappropriately utilized its tax exempt status to import goods for private companies, resulting in losses totaling $23.1 million.

It said customs records showed that items, such as office furniture, laundry and medical equipment were declared as hospital imports, but inventory records confirmed these were not acquired by the hospital and were instead obtained by private entities.

This misrepresentation breached the Customs Act, resulting in over $20 million in unpaid import duties.

The law prohibits false declarations on customs documents, with violations subject to fines or prosecution.

The AG cited as an example the UHWI using its tax exempt status to import laundry equipment, valued at approximately $28 million for Private Company 1, causing a revenue loss of $6.6 million with UHWI paying the remaining import duties and charges of $1.9 million bringing the total loss to $8.5 million.

Similarly, the hospital facilitated the import of office furniture and medical equipment valued at $40.6 million for Private Company 2, as well as cups and dishes, worth $1.41 million for Private Company 3, resulting in revenue losses of $10.7 million.

Subsequently, UHWI purchased the cups and dishes from Private Company 3 for a price of $6.9 million.

Additionally, UHWI enabled the import of 40 waste bins for Private Company 4, valued at $6.6 million, saving the company $3 million in customs duties.

UHWI then purchased the bins for $11 million and covered the remaining import duties and charges of over $980,000.

In its initial management response in August 2025, UHWI confirmed that it had ceased facilitating imports for private entities using its tax exempt status.

The AG said UHWI acknowledged that this practice violated public trust and procurement law.

In October 2025, UHWI reiterated its acceptance of the findings, pending further investigations and stated it was seeking the most suitable measures to prevent a recurrence of such activities.

Meanwhile, the Health Ministry has established an institutional review committee to review gaps in the management and operations of the University Hospital of the West Indies.

This is in response to a report from the Auditor General which was tabled in Parliament yesterday.

The Auditor General highlighted several issues, to include the misuse of tax exemption status, procurement breaches, split contracts and lack of proper planning.

In a statement, the Health Ministry acknowledged the importance of sound corporate governance accountability systems to ensure transparency and efficiency in the public health sector.

The ministry further acknowledged the fundamental principles of transparency, value for money, competition and integrity which underpin the government public procurement system.

It said the UHWI is a key institution in the public health sector, being one of the three Type A hospitals and which is a final referral hospital offering highly specialized services, not only to Jamaicans but Caribbean nationals.

Additionally, the UHWI is the main training institution for medical doctors and other health professionals.

Minister of Health, Dr. Christopher Tufton has taken immediate steps to address the governance and accountability gaps highlighted by the audit report through the appointment of an institutional review committee.

The six-member committee is chaired by past president of the Private Sector Organization of Jamaica (PSOJ), Howard Mitchell.

The committee has been tasked with reviewing and identifying gaps and/or weaknesses in the hospital’s corporate governance and management structures, its financial, public procurement and administrative management systems, as well as its corporate risk management systems.

Another task is to provide recommendations on possible changes or adjustments that might be necessary to mitigate, manage or eliminate the risks associated with the findings of the audit and strengthen governance and accountability.

The committee should also provide recommendations on mechanisms to implement the Auditor General’s recommendations.

The committee is to present a report to the minister within four months with its recommendation for the institutional strengthening of the UHWI.

The ministry assured that it remains committed to the principles of good corporate governance, public procurement, and the efficient and prudent stewardship of public resources.

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