Department of Health: hearing

Public Accounts (SCOPA)

06 November 2002
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Meeting Summary

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Meeting report

PUBLIC ACCOUNTS STANDING COMMITTEE
6 November 2002
DEPARTMENT OF HEALTH: HEARING

Chairperson: Mr VG Smith

Relevant documents:
Department of Health Annual Report 2001/2002 (document is awaited; please email
info@pmg.org.za)

SUMMARY
SCOPA convened a hearing on the financial statements for 2001/2 of the Department of Health. Members focused on four areas, namely, conditional grants, donor funding, voucher qualifications and financial management. They were concerned about lack of insufficient human resource capacity. The Director-General tried to explain that the Department was not solving problems in piece meal but rather holistically in trying to target the problem rather than the symptoms.

MINUTES
The Department of Health was represented by the Director General: Dr Ayanda Ntsaluba.

Conditional Grants
Ms Hlangwana (ANC) asked if the Department had mechanisms in place to improve the delivery of conditional grants.

Dr Ntsaluba, the Director-General, explained that the programme of conditional grants was still developing and evolving. He acknowledged that there were limitations and problems such as insufficient human resource capacity. He assured the Committee that the Department was working to solve such problems. He also mentioned that the Department had informed the National Treasury of their need for more funds to employ more people. He hoped the meeting with SCOPA would give him an idea of what the Committee expected from the Department. The Auditor-General agreed with the Director-General that the programme was developing and progressing.

Ms Hlangwana then asked if the Department had experienced undue administrative burdens. Dr Ntsaluba said they had.

Ms Hlangwana asked if the Department engaged with provincial reports.

Dr Ntsaluba explained that although it was necessary to engage with all provincial reports the Department could not get a holistic picture mainly because some reports arrived after the due date and other are never submitted for that financial year.

Ms Hlangwana asked the names of the problematic provinces.

Dr Ntsaluba listed Eastern Cape, Limpopo and Mpumalanga.

The Chairperson asked whether the Department could assure the Committee that the problems of the three provinces would cease. Dr Ntsaluba assured the Committee that the problem would soon cease.

Ms Hlangwana asked if the Department had ways of following-up late reports and those that were not submitted.

Dr Ntsaluba explained that there was no specific mechanism for that. However, he added that through the visits to provinces, they have witnessed some problems that might be causing the delays and have provided some training to provinces. The Department also encouraged inter-provincial meetings at national level to discuss common problems.

Ms Hlangwana hoped that the following annual report would not reflect similar problems. She expressed her dislike of recurrent problems. She asked if the Director-General was satisfied so far with the controls and mechanisms for conditional grant delivery.

Dr Ntsaluba replied that he was happy to the extent that there was progress and that resources were being utilised appropriately.

Ms Hlangwana asked if there were any communication channels between the Department, the National Treasury and the provincial Departments of health.

Dr Ntsaluba said that there were frequent forums which allowed the Department and the National Treasury to meet at national level. The Auditor-General agreed that the National Treasury held constant meetings with the Department. Dr Ntsaluba added that structures have been set up for communication between the Department's programme managers and the provincial ones.

Ms Hlangwana asked if these structures of communication had any impact. Dr Ntsaluba agreed and he added that some of the agreements that had been reached were in the process of implementation.

Donor Funding
Ms Dudley (ACDP) asked if the Department had any measures to deal with capacity problems.

Dr Ntsaluba explained that the Department had some personnel employed to deal with the problems in the AIDS programme and the Nutrition Unit. They still faced budgetary constraints to extend the solution to other programs.

Ms Dudley asked whether the Department had plans to deal with the increasing vacancy rate. The Chair asked how many vacant financial administration posts there were.

Dr Ntsaluba explained that the problem was not recruitment but staff retention. What was needed was a plan to retain staff. The Department had no definite number of vacant posts for financial administrators.

Financial Management and Control
Mr Kannemeyer (ANC) asked when the last assessment was done.

Dr Ntsaluba said it was in February 2002 and that the reports list the dates and units of assessments

Mr Kannemeyer asked if it would better to fill the eleven posts in the internal audit unit.

Dr Ntsaluba agreed that there was a need for more auditing staff.

Mr Kannemeyer asked what level of seniority these vacant posts were. The Department responded that the information was available but not with him. The Chairperson asked him to avail it in ten days time. They agreed to do so.

Mr Kannemeyer asked the chair of the audit committee to explain the problems experienced by the audit unit. The chair replied that there was a lack of sufficient human resources and hence small capacity.

Mr Kannemeyer asked if the chair of the internal audit unit had considered operation plans for this year. The response was negative.

The Auditor-General agreed with the problems facing the Department. He added that one way to find a solution was to measure the deviations of actual progress from stated goals and try to find out what caused the gap.

Mr Kannemeyer asked what caused the problems with tenders and procurements. The reply was that the question should be referred to the Tender Board.

Qualification Vouchers
Mr Mofokeng (ANC) asked why the Department issued R20 million to the South African National Aids Trust before the trust deed was approved. The Director-General replied that they exaggerated the imminence of the Aids Trust but that the intentions were in good faith.

Mr Mofokeng asked who was responsible for the misjudgment. Dr Ntsaluba said no one could be singled out but that it was sheer misjudgment with good intentions.

Donor Funding
Ms Mothoagae (ANC) asked why the Department overspent R22 770 000 of donor funds. The Director-General explained that the Department was trying to spend faster to avoid underspending. The European Union approved the spending and the money was spent before receiving the donation; the donation was received later.

Ms Mothoagae asked if there were control mechanisms to co-ordinate donor funding.

The Director-General replied that the Department was trying to strengthen co-ordination with donors. There was a standing committee that coordinated the programmes and donor funding.

Ms Mothoagae then asked if the managers were trained. The reply was that they were trained.

Ms Mothoagae asked why interest accruing on donor funds was not passed on to the Department.

Dr Ntsaluba said that money did not automatically come to the Department and that they would have no idea of that interest.

Ms Mothoagae posed the same question to the National Treasury. A representative from the Treasury tried to explain that the procedures were not that simple. Ms Mothoagae was not convinced but she did not pursue the matter.

The following questions were asked and the Director-General undertook to reply in writing.
Ms Malubisi (ANC) a Member of the Health Portfolio Committee asked how the Department was planning to deal with unauthorized and wasteful expenditure.

Mr Kannemeyer could not reconcile increasing administration costs when there was an increasing vacancy rate. He also asked why under "Professional and Special Services" the category of "other" was worth R134 141m. He reckoned it was too much money and that the category should be unpacked.

The meeting was adjourned.

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