HomeLocal NewsGovt owes Psmas US$186m

Govt owes Psmas US$186m

GOVERNMENT owes struggling health insurer Premier Service Medical Aid Society (Psmas) US$186 million in employer’s contribution and remittances whilst the private sector owes the society US$22 million, it has emerged.

Hazel Ndebele

The revelations come as it emerged Psmas fired its suspended managing director Henry Mandishona for, among other things, flouting corporate governance regulations resulting in financial loss to the institution, and unilaterally altering his contract of employment.

On Monday, Psmas subsidiary Premier Service Medical Investments (PSMI) doctors, radiologists and nurses went on strike demanding their outstanding salaries for five months.

A senior Psmas employee told the Zimbabwe Independent yesterday government was partly responsible for Psmas’ mounting problems, although corruption has also played a big role in throwing the company into turmoil. Civil servants constitute the majority of the over 800 000 members of Zimbabwe’ s biggest health insurer, which has branches across the country and the region. Government is supposed to pay 80% of the contribution of each of its employees, while the worker foots the remaining 20% which is deducted from the salary for remittance to the medical aid society.

Documents seen by the Independent show that as of the end of 2014 government owed Psmas US$95 million in employer contributions, but the debt as of October 2015 had ballooned to US$186 million.

Contacted for comment, Psmas chairman Jeremiah Bvirindi said members had been accessing medication for free because their employers were not remitting funds despite making deducting from salaries.

“The key culprit among our debtors is government which is failing to remit deductions,” he said.

“We are now being forced to implement a clause in our constitution which states that those who do not pay will not have access to medication.

“Employees will be forced to demand their money which is deducted from the employer so that they pay cash upfront to access medication.”

Bvirindi said it was time Psmas is treated as a business entity so that turnaround efforts do not go down the drain
Meanwhile, Psmas officials said Mandishona was also fired for advancing loans amounting to US$35 000 to new employees, some of which had not commenced work.

He also reportedly made unsanctioned donations, forged minutes, increased his salary, and paid himself and a colleague US$5 600 as an overnight allowance for a business trip to South Africa.

Changes which Mandishona reportedly made to his contract prejudiced Psmas of US$6 350 per month backdated to the date of his appointment. He was employed on May 4 this year.

He was also accused of changing his motor vehicle entitlement, introducing the benefit of a cook and amending the clause relating to bonus, gross incompetency or inefficiency in the performance of his duties amongst other issues.

In a hearing convened last week by the medical institution, Mandishona was found guilty on most of the charges, and consequently fired with effect from September 24, 2015. He received a letter of dismissal on Wednesday this week.

Mandishona took over the running of Psmas from former Psmas chief executive officer Cuthbert Dube, who was reportedly earning about half a million dollars in salary and perks from the group. Psmas executives received US$86,9 million in salaries, bonuses and allowances between 2009 and 2013 at a time the company owed creditors US$119 million and was struggling to pay its workers, according to an audit report conducted between October 2014 and February 2015. Dube, his driver, two secretaries, and 11 executives shared US$22 888 281,28 outside the payroll. The executives also shared US$24 million in allowances and US$7 million in bonuses through the payroll.

The Psmas board yesterday met and endorsed Mandishona’s dismissal. He has been informed of the decision.
Mandishona was not reachable for comment.

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