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Financial crisis rocks Blue Cross

  • Fails to account for M6 million annual budget 
  • Assets exposed to misappropriation
  • Beset with irregular accounting practices


Lesotho’s only national rehabilitation centre for drug and alcohol addicts, Blue Cross, has shut its doors amid indications that the institution is in financial crisis owing to a stand-off with its parent, the Ministry of Health.

The Blue Cross Thaba-Bosiu Centre was solely funded by the government through the Ministry of Health.

The MNN Centre for Investigative Journalism has learnt recently that Blue Cross, commonly known for producing a popular rehabilitation play “Bokhoba ba Tai” aired on Radio Lesotho, closed shop in September last year, sending home over thirty rehabilitants who were still undergoing treatment under close supervision of doctors and counsellors.

MNNCIJ was made to understand the centre closed shop following serious fiscal constraints, which led to rehabilitants not having adequate access to sufficient food and medicine, including other related resources.

MNNCIJ even found that the Ministry of Health, which provides budget for operations at Blue Cross, was not warned about the centre’s closure by its management.

Over 30 patients were sent home packing just a month into their three-month rehabilitation programme, despite having each paid M650 admission for the treatment.

The procedure at Blue Cross was that, prior to completion of the rehabilitation processes for each patient, the centre concocts the client, his or her community and close family members to support the patient at the time of going back home to avoid re-addiction.

The centre’s 23 employees, that include counsellors, accountant and administrators, were suspended with immediate effect from October 2018. 

In one of the suspension letters dated October 15 and signed by the Blue Cross Director Thabo Mokhutšoane, the staff was told to immediately go home on suspension without pay and that they will be informed forthwith when the board has made progress into the centre’s problems.

Titled “Temporary Layoff for Thaba-Bosiu Centre Staff”, the letter seen by MNNCIJ partly reads; “The above matter refers, kindly note that board of Blue Cross Centre resolved in their meeting of October 12, 2018, that due to the prevailing circumstances, there will be staff layoff until we have completed our discussions with the Ministry of Health regarding the development of the contract”.

Privy sources told MNNCIJ the Blue Cross’ board of directors had refused, in several meetings, to account for over M6 million budget allocated by the ministry.

Mokhutšoane, they said, had failed to justify to the employees why the centre was said to be broke.

“As if failure to account for the wasn’t enough, Mr Mokhutšoane literally expelled the ministry’s representative from the meeting with claims that the centre no longer needed Ministry of Health in the governing body’s meetings. He (Mokhutšoane) alleged independence of the centre saying, the government should not pose performance contracts to the secretariat,” said one of the sources.

Another one said: “The Ministry of Health is the sole donor of Blue Cross Thaba-Bosiu Centre. For over the years, Ministry of Health has always had a representative in the centre’s board of directors for accountability and transparency purposes but things turned around this year (2018) when sometime in July the ministry’s representative was kicked out of the meeting”.

This, the source said, had rose eyebrows and triggered suspicion that the centre’s monies must have been misused.

“Speculation is rife that Mr Mokhutšoane made a salary structure review where he would earn M40 000 monthly, and on top of the massive salary he still wanted other perks like medical aid, housing allowance and many other benefits exclusively for himself.”

Contacted, Mokhutšoane declined to comment saying; “it is premature for me to comment on media about the centre’s issues. I promise to give further details about the centre to the media giving your media preference once the information is ready for public consumption”.

MNNCIJ is possession of a copy of a latest internal audit report of the Blue Cross compiled by the New Dawn Chartered Accountants and dated July 2018.

The report reveals that the centre has been operating without rehabilitation terms and conditions contract.

According to the report, failure to come up with a set of rules and guidelines exposes the centre to be liable to injury of clients while at the centre’s premises and death.

The report further notes that; “terms and conditions are set of rules and guidelines that the user (Thaba-Bosiu Centre clients) agree to in order to get accepted at the centre. It is the best practice that organisations protect themselves from such liabilities by use of terms and conditions. There is a risk that the centre will be vicariously liable for the actions and/ or omissions of its clients”.

The report goes further to uncover that Thaba-Bosiu Centre has been operating for many years without sustainability projects.

According to the report, it is best practice that non-profit making organisations embark on income generating projects to reduce the pressure on donors and secure sustainability of organisational activities.

The audit report also reveals that there are serious inconsistencies in the accounts payable amounts exposing the centre to misstated financial statements. All the buildings of Thaba-Bosiu Centre have not been insured, the report showed.

“There is also failure to maintain proper fixed assets register exposing the centre’s assets to be misappropriated,” it notes.

The ministry’s principal secretary, Advocate Mole Kumalo confirmed the centre had become a serious problem to the ministry.

He said there had not been transparency on how the allocated budget by Ministry of Health to the centre has been used.

Kumalo said the ministry was not notified by the centre’s management about the closure. He, however, said discussions were being held to find way forward for the centre to reassume operations.

“People should be aware that Ministry of Health as the sole donor of Thaba-Bosiu Centre did not shut down the centre. The ministry was not even aware of the centre’s closure but at least there are serious talks between the centre and the ministry about way forward and how the centre’s problems can be solved,” Kumalo said.

He said it is a pity that management of the centre did not prioritise clients’ need to rehabilitation and only focused on refusal to sign performance contracts proposed by the ministry.

“Ministry of Health realised that there was a serious need for the centre to account of the budget allocated to run the facility and came up with performance contract as a control mechanism. Ministry of Health suggested elevating memorandum of understanding between the ministry and the centre to a contract because the centre claimed that the MOU was just a gentlemen’s agreement”, Kumalo said, adding but the centre had refused.

He said the centre’s management refused to account for money allocated but at the same time want public sympathy with claims that patients have gone home because of serious financial constraints.

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