A Hetq review of the financial audits of Yerevan’s municipal Nork-Marash Medical Center, better known as the Nork Cardiology Hospital, has revealed several management irregularities costing taxpayers millions of drams.

Hetq also reviewed the findings of a study of the hospital conducted by the Armenian government’s State Supervision Service.

Key findings:

A surgical device was purchased for 66 million drams (US$162,000) but never used.

Due to financial mismanagement, 30 million drams was not paid to the hospital’s budget.

Violating the Law on Procurement, the hospital placed orders by telephone.  

The hospital is operating at a loss.

The hospital faces two criminal cases.

66 million drams for unused surgical equipment

In March 2020, the Nork-Marash Medical Center (NMMC) announced an open tender for a specialized surgical system. Two weeks later, the NMMC signed a contract with tender winner Med Capital LLC to purchase a piece of equipment produced by Ackermann Instrumente GmbH designed for general laparoscopic, chest and heart surgery.

To date, the equipment hasn’t been used.

The Yerevan Municipality told Hetq that the equipment was to be used with the intervention of foreign surgeons, but due to the Covid-19 epidemic the surgeons cancelled their travel plans to Armenia.

The question thus arises why the hospital purchased the equipment when the coronavirus had already reached Armenia? In addition, other countries had already issued international travel restrictions in March 2020.

Another “puzzling” fact in this story is Med Capital owner Lilit Kocharyan immediately transferred all her shares to the company director after the 66 million contract was signed.

Criminal Cases

The hospital faces charges that its staffers abused their administrative authority for their personal gain or for that of others. (Criminal Code, Article 215).

The first case was initiated by Megiel LLC, which charged the hospital of violating state procurement procedures.

The second case, involving the same charges, is based on the results of a study reviewing the hospital procurement procedure for 2015-2019 conducted during the tenure of Yerevan Mayor Hayk Marutyan.

Top photo: Nork-Marash Medical Center Director Mikayel Adamyan