Department of Health on its 2011/12 Annual Report

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Health

16 October 2012
Chairperson: Dr B Goqwana (ANC)
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Meeting Summary

The Deputy Director General of Strategic Health Programmes gave a briefing on the Department of Health Annual Report 2011/12. He noted the National Health Systems priorities and gave a review of performance in each programme as well as remedial action taken in problem areas. Expenditure per programme and per economic classification were outlined and explanations given for material variances. The matters and recommendations emerging from the unqualified audit were discussed. Provincial performance on the six conditional grants was presented as well as notes about the five entities for which NDoH is responsible.

The unqualified audit opinion was the second unqualified audit opinion in three years. An asset management plan had been developed and implemented. The Committee was told that 9.6 million South Africans accepted HIV testing in 2011/12. Approximately 6.3 million female condoms were distributed, exceeding the target of 6 million. The TB cure rate improved from 71.1% (2009) to 73.1% (2010) against a target of 75%. The TB defaulter rate had decreased from 7% in 2010/11 to 6.8% in 2011/12. However, HIV prevalence amongst antenatal attendees increased from 29.4% in 2009 to 30.2% in 2010. An increase was registered in seven of the nine provinces. The Western Cape Province had the lowest HIV prevalence rate of 18.5%.

The total adjusted appropriation was R25.9 billion and NDoH spent R25.7 billion (99%). Conditional grant expenditure varied between 97 and 101%. The Auditor-General identified nine matters of emphasis which included: employees appointed without following a proper process to verify the claims made in their applications; not all senior managers signed performance agreements; a Human Resource plan was not in place; there was inadequate monitoring of NGO funding; inadequate monitoring of some conditional grant expenditure; and transfer payments for HIV/AIDS were not made in accordance with the approved payment schedule.

In the discussion that followed, Committee members asked questions on the budget under-spend, the status of litigation, accountability and responsibility taken by DoH officials; causes for the high HIV/AIDS prevalence in certain provinces and districts; strategy in place for tackling the issue of circumcision; monitoring of conditional grants and other funds transferred to the provinces; how the national department was assisting provincial departments which had performance challenges, and National Health Insurance (NHI) progress. The Chairperson concluded the DOH was headed in a positive direction but there were still challenges . It was important for the DOH to bear in mind that it was not a department of public health only, so it had to look after private health care. There was inadequate data from the private health sector and the relationship with the private health sector was also not the best. The area of circumcision necessitated the education of the people especially the traditional leaders. It was important for the DOH to step up its game in the training of health professionals. 

Meeting report

Introduction by the Chairperson
The Chairperson congratulated the DOH for receiving an unqualified audit report. The Committee always said that the Minister and the DOH answered the questions about health but the actual work was done in the provinces. The major question was how to coordinate and integrate the work which was being done. The reports presented to the Committee showed that there was contact between the DOH and the provinces but there were still challenges. There were still doctors who complained that they had not been paid and people were still using their own linen in hospitals.

Presentation by the National Department of Health
Dr Yogan Pillay, Deputy Director General: Strategic Health Programmes, said the briefing would respond to the interactions with the provinces as raised by the Chairperson. The briefing focused on key highlights and achievements and problem areas and the strategies for addressing the constraints experienced. The presentation comprised of an outline of the National Health Systems priorities, a review of programme performance across all six budget programmes, the budget and expenditure per programme, the budget and expenditure per economic classification, explanations of material variances, audit outcomes and recommendations, conditional grant expenditure and its six entities.

National Health Systems Priorities
The work of the DOH was guided by the Negotiated Service Delivery Agreement (NSDA) 2010-2014. This required four outputs from the health sector: increasing life expectancy, reducing maternal and child mortality rates, combatting HIV and AIDS and strengthening the effectiveness of the health system. These outputs were directly related to the Health sector’s 10 Point Plan for 2009 – 2014 and to the Millennium Development Goals (MDGs). Mr Pillay showed the alignment of the National Health Systems priorities to the NSDA outputs, the 10 Point Plan and the MDGs.

Review of Programme Performance
Programme 1: Administration: Highlights included DOH obtaining an unqualified audit opinion from the Auditor-General South Africa (AGSA) and this was the second unqualified audit opinion in three years. An asset management plan had been developed and implemented by the DOH to remedy the reason for its qualified audit in 2010/11. Only four out of nine provinces overspent their budgets (Eastern Cape, Gauteng, KwaZulu Natal and the Northern Cape). This was caused by prior year accruals, price increases, inadequate budget controls and the underfunding of the health sector. Human resource capacity and limited resources were some of the challenges faced. Funding was solicited from international development partners to assist provinces.

Programme 2: Health Planning and Systems Enablement: A 20-year database of HIV prevalence amongst antenatal attendees had been established. A National Health Research Summit was convened in July 2011 to identify the strengths, weaknesses, opportunities and threats of health research with a specific focus on the NSDA outputs. A report of the summit had been published in the Lancet Journal in April 2012. The three-tier system for monitoring the provision of antiretroviral therapy which was developed by the University of Cape Town and implemented in the Western Cape was scaled up to the other provinces. Ten pilot sites for National Health Insurance (NHI) were identified and publicly launched and the NHI conditional grant framework was approved by National Treasury. DOH recruited 80 South African students to study medicine in Cuba commencing in October 2011. The DOH developed a roadmap for strengthening the Health Information System (HIS) which was adopted by the HIS Committee of South Africa.

Programme 3: HIV and AIDS, Tuberculosis and Maternal, Child and Women’s Health: 9.6 million South Africans accepted HIV testing in 2011/12. Approximately 6.3 million female condoms were distributed and this exceeded the target of 6 million. A TB cure rate of 73.1% was achieved in 2010 (from 71.1% in 2009) and the TB defaulter rate had decreased from 7% in 2010/11 to 6.8% in 2011/12. A national child immunization coverage rate of 95.2% was achieved against a target of 95% and 100.7% of pregnant women were tested for HIV. A cervical cancer screening coverage rate of 55% was achieved and a measles immunization coverage rate of 85.3% was achieved. A challenge was that HIV prevalence amongst antenatal attendees increased from 29.4% in 2009 to 30.2% in 2010. An increased rate was registered in seven of the nine provinces (excluding North West and KZN). The Western Cape had the lowest HIV prevalence (18.5%) and KZN the highest (39.5%). The five districts that recorded the highest HIV prevalence rate in the country amongst antenatal attendees were Umkhanyakude 41.9%; eThekwini 41.1%; uMgungundlovu 42.3%; iLembe 42.3%; and Ugu 41.1%.

Programme 4: Primary Health Care (PCH) Services: A primary health care utilization rate of 2.5 visits per person was achieved in 2011/12 and a total of 337 ward-based PCH teams were established which exceeded the target of 54 teams. The DOH produced a Strategic Framework for the Prevention of Injury in South Africa which incorporates a plan for response to violence.

The Committee also heard about the performance of Programme 5: Hospitals, Tertiary Services and Workforce Development and Programme 6: Health Regulation and Compliance Management (see document).

Budget and Expenditure
NDoH Chief Financial Officer, Mr F van der Merwe presented the financial aspects of the Annual Report. The 2011/12 budget and expenditure for all six programmes was reported on. The total adjusted appropriation was R25.9 billion and DOH spent R25.7 billion. The variance between the final appropriation and the actual expenditure was R255 million. The percentage expenditure was 99%. The budget and expenditure per economic classification was provided.

Mr Van der Merwe said that the under-spending was caused by the supplier unable to deliver the ordered IT equipment before year end. The slow spending of the NHI funding due to the legislative processes were also reasons for under-spending. In the HIV/AIDS and TB programme, the under-spending was due to the late finalization of the national condom contract awarded by the National Treasury and the failure to appoint a communication consultant for HIV and AIDS.

For the six conditional grants, expenditure ranged between 97% and 101%. For example, the grant allocation for National Tertiary Services was R8 billion and R7.9 billion (99%) was spent. There was over-spending with regards to the Professional Training and Development allocation where 101% was spent and 97% of the Comprehensive HIV and AIDS grant had been spent.

Audit Outcomes
The DOH received an unqualified audit opinion for 2011/12. The matters of emphasis which needed to be attended to included: employees were appointed without following a proper process to verify the claims made in their applications; not all senior managers signed performance agreements; an HR plan was not in place; there was inadequate monitoring of NGO funding; the requirements and responsibilities for some of the conditional grants were not adhered to; and transfer payments for HIV/AIDS were not made in accordance with the approved payment schedule.

In addressing the matters of emphasis, the DOH recommended the need to further improve coordination and communication with the Auditor-General; implement a strategy to address the audit findings and address future audit risks.

The Committee was briefed on the general performance of the Medical Research Council, the National Health Laboratory Services, the Medical Schemes Council, the South African National Aids Council Trust and the Mines and Works Compensation Fund.

Discussion
The Chairperson said that the discussion was going to be limited on what had been done in the past year. However, the Committee was going to make certain recommendations.

Questions
Ms M Segale-Diswai (ANC) said that the figure of R255 million which was under-spent was a lot of money and such under-spending was not acceptable. The reasons for under-spending did not suffice for such an amount. What did the DOH do after the deliberations of meetings with the Portfolio Committee? There were aspects which were being reporting every year so it seemed as if there was nothing done after the discussions. Where was the DOH with the management of primary health care and hospitals? How much were the accruals per province? What was the progress with the NHI? Could the doctors from Cuba be traced and were these doctors still in the country? Why were the numbers for the Cuban doctors in the Western Cape and Free State not presented? Which province was doing best in TB control and which provinces were not doing well? On the distribution, was there a relationship with the private sector so that the actual figures with regards to the usage could be obtained? How was the DOH going to improve PHC as there was nothing in the recommendations which referred to PHC? What was the DOH doing about retired nurses? What did Goods and Services comprise of which was under-spent?

Mr D Kganare (COPE) asked if the DOH had plans in place to address the under-spending. In terms of the Annual Performance Plan, the DOH was assisting all provinces but there were provinces which did not perform as required. Why did some of these provinces still perform poorly when all of them were being assisted? In terms of male circumcision, did the DOH have any plans to involve other health workers? Why did some provinces not reach their targets for immunization? Infrastructure was a serious problem in all the provinces so had the DOH interacted with the provinces as to which had acute infrastructure problems, to try to solve the problem? There were people who paid for their own HIV tests. Did the DOH capture the statistics from both the private and public sectors? Has there been any research as to the reasons for the HIV/AIDS prevalence in KwaZulu Natal? Had the DOH been speaking with other countries besides Cuba with regards to the training of medical students? The under-performers were very good at articulating the reasons and justifications for under-performance to the point where it almost seemed normal for them to continue under-performing. In terms of MTC performance, did the DOH meet with the provinces to identify and address the reasons for poor performance? What was the position of the DOH with regards to the running and functioning of academic hospitals? What measures had been taken to control over-spending in some provinces? Nothing had been said about the legal matters and law suits which the DOH and the provincial departments had. What was the strategy to manage these legal issues? What were the causes of these matters and did people take responsibility for them? Which provinces had been sued the most?

Ms P Kopane (DA) asked for an explanation on the litigation against the National Treasury with regards to the awarding of the tender for the distribution of condoms. Why was there a failure in the appointment of the HIV/AIDS communication consultant? How far was the DOH with the issue of integrating the forensic laboratory into investigations? What had been done about the challenge of the lack of personnel and inadequate infrastructure for the forensic laboratory? Who was held accountable for the HR lapses which were identified by the audit of the AGSA? On the Medical Research Council (MRC), the DOH budgeted about R276 million for 2010/11 but there was a budget decrease in the current year. What caused the decrease? Both in the previous and current year, the DOH had reported that the MRC had a challenge in playing a pivotal role in supporting the national and provincial departments in achieving their performance targets. The same statement was contained in both Annual Reports. Was it just a matter of the DOH copying and pasting the phrase or was there nothing done over the years to address the challenge? The fees for consultants had increased and it was unacceptable. Was there any skills transfer and was there any need to appoint so many consultants? When were the investigations relating to irregular expenditure going to be finalized? The AGSA told the Committee that the root cause of findings in the DOH was the lack of consequences for poor performance. What was the DOH doing about the situation? Why was the DOH not attracting and employing the necessary financial and performance management skills?

The Chairperson said that the report showed that the rate of HIV in the Western Cape was very low yet the rate of TB was very high. What was reason for such a situation?

A member asked if the DOH had any plans to improve the monitoring of hospitals. What was the DOH going to do about the provinces which still had high HIV/AIDS and TB prevalence?

Ms M Dube (ANC) asked if the DOH monitored the spending of the funds it transferred to the provinces. Who was responsible to handle the complaints from most of the local and provincial clinics which were complaining about the lack of medicines for infants? Could the DOH provide the Committee with the list of non-negotiable medicines which were referred to by the Minister of Health? How was the DOH carrying out its role in the integration and coordination of the community based organisations dealing with HIV and AIDS and other health issues?

Ms D Robinson (DA) asked why there was an unsatisfactory performance on post-natal care. What was the DOH doing in that regard? Was the DOH considering the effects of depression in mothers after having babies and relating it to the poor performance in post-natal care? When mention was made about circumcision, was the DOH only looking at adult circumcision and why did the DOH not consider the creation of awareness in mothers about this during antenatal care? Was the challenge of NGO monitoring a new problem or was it ongoing? What was the DOH doing about the audit findings on human resources?

Ms R Motsepe (ANC) asked what was the reason for the DOH not reaching its set target. Why was the Annual National Health Plan not tabled before the National Health Council? What was the main cause for the delay in male condoms? What had been done to rectify the under-spending and preventing it from re-occurring?

The Chairperson said that the underfunding of the DOH was one of the reasons for the irregular expenditure and the unauthorized expenditure. How much did the DOH need for the issue of underfunding to be resolved?

Responses
Dr Pillay replied that the DOH was willing to work harder to get a clean audit in the current financial year. The responses to the questions were clustered in terms of the areas which were concerned.

The Chief Financial Officer, Mr Van der Merwe, said that in the adjustment stage, the DOH did unexpected rollovers. The difficulty was that some of the earmarked funds were not spent as foreseen. On the accruals per province, the DOH was going to do an analysis of the accruals per province. The DOH had realised that some of the provinces did not have a grip on the accrual number. This was the case with Gauteng and the Eastern Cape. The DOH had been able to reduce the accruals from about R60 million to about R24 million. As to the Goods and Services, the biggest expenditure was not the Goods and Services; this included procurements and the infrastructure support unit which was not built by the service provider in time.

On the issue of provinces saying that there was no money for infrastructure, the DOH did not understand why that was being said as some of the provinces had actually under-spent in terms of infrastructure. This was the case with Limpopo. Funding for infrastructure had been secured for the Free State and KZN. The DOH continued to consider the provinces and it even moved funds between provinces. Another problem was that the provinces used the funds for purposes which it was not intended for. The DOH had engaged the provinces which had over spent and a process was being put to monitor the non-negotiables and the In-Year-Monitoring (IYM). On the high consultancy fees, the DOH had looked at the problem and it had made sure that there was a proper skills transfer between the consultants and the staff of the department. Eradicating irregular expenditure was a project which had been taken on by the DOH and although there were reductions, there was still a lot to be done. On the monitoring of funds transferred, the necessary reporting was done although there were still deficiencies where conditional grant managers did not always do as prescribed by the frameworks. The interrogation of reports was also a strategy which had been put in place to ensure proper monitoring of transferred funds. The DOH was on its way to meeting the requirements of the AGSA and the Division of Revenue Act. The DOH had identified about 18 components of non-negotiables and the document in that regard was going to be provided to the Committee.

Dr Pillay said for the conditional grants, the Director General had appointed Deputy Director Generals to be champions of the accountability of the process. The responsibility was no longer in the hands of cluster managers but now with DDGs. This was an additional mechanism to ensure accountability. On support to provinces, the newly appointed Chief Operating Officer was responsible for the support to provinces and was going to present to the Committee at a later stage the kind of support envisaged for provinces.

The Chief Operating Officer, Ms Nobayeni Dladla said that for the evaluation of sub-district managers, at national level, there was a project which was looking at the harmonizing of this and ensuring a uniform structure. The reviewed structure of the DOH was approved in November 2011 by the Minister of Public Service and Administration. This structure was now being cascaded to the provinces. With the staffing norms and standards, the DOH was being assisted by the World Health Organisation and the Department of Public Service and Administration was assisting with the generic structure. Both projects were to be completed by March 2013 for implementation.

On litigation, most of the litigation was from provincial levels because that was where the work was done and mistakes occurred. The DOH was busy with the processing of a draft bill to regularise and standardise the litigation mechanisms at province-level.

The DOH took disciplinary action after reminders to those managers involved and the Minister was always informed of the failure by some senior managers to sign the performance agreements. The matters were also referred to the labour relations department and the standing practice was in compliance with the Public Service Regulations.

On vacancy rates, the DOH was reviewing the structure which was approved in 2010/11. The department was at the level of finalizing the review process. However, the vacant posts could only be filled based on the availability of funds. The provinces had serious challenges in terms of vacancy rates. About 120 000 unfunded posts were abolished in the provinces. The major problem was the availability of funds.

The DOH was working in partnership with various state universities for the enrolling of district managers in Masters in Public Health programmes and other leadership courses. The key thing was to ensure that there was the environment where they could use the knowledge which was acquired in the courses.

Dr Pillay said that in most instances, the doctors from Cuba were not as visible as desired and this was because of their small numbers. The students trained in Cuba returned to the rural areas where they worked initially. The current challenge was that Cuba no longer offered full scholarships. An assessment had been done and the costs for training a student in Cuba were far cheaper than the cost of training one in South Africa. About R500 000 was used to train students in Cuba unlike in South Africa where the cost was approximately R1 million per student for the entire programme.

Attempts had been considered and made to get other countries where the students could be trained. The universities found were mostly on the African continent but these countries were also looking for training destinations. There were universities in Europe and other western countries but the challenge was that these universities were very expensive and unaffordable. There were plans to build a new medical school in the country and this was going to help the country although it was a long term programme.

The Chairperson said that it was important for the DOH to look at the number of doctors who were leaving the country.

On the progress relating to the NHI, Dr Pillay said that the DOH had published a Green Paper and over 140 comments were received. The Green Paper was currently being revised to produce a White Paper. A pilot had also been embarked upon and the 11 districts had produced business plans to access funding to start the first stage of the pilot. The department was in the process of appointing coordinators for the pilots across the country. The DOH had also done facility assessments so that the readiness of hospitals could be measured in terms of preparedness for the NHI.

On the question of availability of medicines, the reasons for the low availability were that the facilities did not order the medicines in time, communication problems existed between the provincial depots and the facilities, defaults in supplier payments, and the challenge of the capacity of the suppliers to do supplies. The DOH had instituted a monitoring system where hospitals were contacted every two weeks to check on the drugs they did not have and why they did not have them. Supplies informed the DOH monthly on the provinces which had not paid. The DOH was also working with civil society organisations in the reporting of the availability of medicines in hospitals.
 
On the MRC, a new president of the MRC had been appointed so that the institution could be turned around. There were challenges of inefficiencies, duplication, poor research outputs, and irrelevant areas of research.

On the essential equipment list, the DOH had an essential equipment list for Primary Health Care (PHC) and this list was used for the health facility audits. On the number of provinces that received feedback from the DOH on their Annual Performance Plans, seven out of nine provinces received the feedback. Only Gauteng and the Western Cape did not receive the feedback from the DOH. All the nine provinces actually did receive verbal feedback but in terms of the written feedback and support, the not-very-well performing provinces were prioritised. On the question of the Annual National Health Plan, the ANHP was produced and tabled before the
National Health Council (NHC) because it was overtaken by the prioritization of the Negotiated Service Delivery Agreement.

The Chairperson said that the briefing from the DOH was good and the engagement was quite informative. It was now up to the members to identify the areas where they could make recommendations. The DOH was headed in a positive direction but there were still challenges which were being faced. It was important for the DOH to bear in mind that it was not a department of public health only, so it had to look after private health care. There was inadequate data from the private health sector and the relationship with the private health sector was also not the best. The area of circumcision necessitated the education of the people especially the traditional leaders. It was important for the DOH to step up its game in the training of health professionals.

The meeting was adjourned.

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