The National Department of Health (NDOH) and the Department of Rural Development and Land Reform (DRDLR) presented their first quarter 2015 expenditure and performance reports to the Committee. The NDOH reported that it had recorded an expenditure of R8.70 billion or 23.9% of the annual allocation in this quarter. Outstanding invoices for office accommodation for the 2014/15 financial year were processed during the first quarter of 2015/16. The renewal of the IT related licences was due in the fourth quarter of the year, and maintenance payments for equipment were due for payment in November 2015. Electronic boards, digital recording equipment and other capital assets were ordered, but not yet received and paid for. In the National Health Insurance projects, there were delays in spending due to delays in procurement plans in many pilot districts, capacity constraints in some pilot districts, and some districts showed low levels of financial delegations and delays by suppliers in delivering key equipment. The tender for the printing and publication of the essential medicines list would be paid in the second quarter of the year. The national TB meeting was postponed from May until September 2015. Work not yet finalised included the regulatory impact assessment on the Control of Marketing of Alcohol Beverages Bill, development of clinical guidelines on management of co-morbidity, psychiatric and substance abuse, certain named projects, and poor quality braille printing for TB pamphlets that had led to delays.
Members were concerned with under expenditure on the NHI grants and hospital revitalisation grants, and delays in procurement of medicines. They warned that patterns of under-expenditure could lead to cutting of budget for capital assets in the following year, and wanted to know how the underspending, particularly on the Hospital Revitalisation grants, and the NHI grant, would be addressed. Members questioned the progress of the 112 call centre, said that poor quality printing should not have been allowed to happen, wondered why some months showed poor cash flow and asked why invoices were paid late. They questioned how some targets were described as “partially achieved”. One Member was critical of the underspending patterns noting how they were linked to service delivery challenged, and suggested that since this Department had been in continuous existence since 1994, it should not be showing such challenges. Members asked why the same issues appeared year after year, citing the regulation of African traditional medicine which had appeared on the agenda for many years, but wanted to know more about cervical cancer treatments and testing, and which provinces were charging others for testing. They asked why there was such high turnover in specialists dealing with mine disease, and were very concerned about poor training of emergency medical service personnel. Questions were also asked about the connectivity challenges and what was being done to address them, and asked how the Committee could assist the NDOH, particularly on provincial powers and functions that were causing problems. They were pleased to see the HIV infection rate decline, but wanted reports on what would be done to address poor performance of some Heads of Department in the provinces, the number of practitioners in NHI pilot districts, how challenges in procurement of medicines were to be addressed and how blockages were to be addressed, also asking for timeframes on reaching targets and programmes. Many questions were to be answered in writing, due to shortage of time.
The DRDLR admitted that its performance in this quarter had been “dismal” as it had spent only 6.9% as against the projected 25%. Most of the spending took place in land acquisition, followed by recapitalisation and development and planning. The delays in spending were due to the reprioritisation of the 2015/16 budget and reviewing of projects to align with the Agri-parks programme. Some remedial action would be taken to address material variances in spending. Members were very concerned and pointed out that the Department had been consistently under-spending, proffering the same excuses, for many years. They were also concerned with the high vacancy rates, the fact that bursaries were not being taken up, and time taken to fill posts. They asked for the reasons for the delay in implementation of rural development projects, where the projects were, what the nature of the projects was, whether the delays were now being addressed, and to what extent they had affected the cost and the beneficiaries.
Department of Health 2015/16 first quarter performance report.
Ms Malebona Matsoso, Director General, National Department of Health, tabled the first quarter 2015/16 performance report for the Department of Health (DOH) and summarised some of the main points. She said the outstanding invoices for office accommodation for the 2014/15 financial year were processed during the first quarter of 2015/16. The renewal of the IT related licences was due in the fourth quarter of the year. The maintenance of Civitas security equipment amounting to R4 million was scheduled to take place during November 2015. Electronic boards, digital recording equipment and other capital assets were ordered but not yet received and paid. National Health Insurance (NHI) was spending, although under-performance was due to delays in procurement plans in many pilot districts, and capacity constraints continued to plague some of the pilot districts, and some districts have low levels of financial delegations and delays by appointed suppliers to deliver key equipment.
The tender for the printing and publication of the essential medicines list would be paid in the second quarter of the year. The national TB meeting was postponed from May until September 2015, as the provinces were developing district improvements plans to implement to 90/ 90/ 90 targets for HIV and TB. The project on regulatory impact assessment on the Control of Marketing Alcohol Beverages Bill was not finalised yet. The development of clinical guidelines on management of co-morbidity, psychiatric and substance abuse was taking longer than expected. Liquid chromatology systems, nitrogen analyser and LIMS server were not yet delivered. The printing of the tuberculosis pamphlets in braille had been delayed because of the poor quality of the format and layout.
The Department of Health recorded an expenditure of R8.70 billion or 23.9% of the allocation in this quarter.
Dr W James (DA) said if the current pattern of under expenditure continued on capital assets, it would have consequences next year from National Treasury, under the cost cutting measures. He asked how underspending was going to be addressed.
Mr H Volmink (DA) asked if there was any progress on the 112 call centre. He asked how underspending on the health revitalisation grant, because of procurement processes, will be addressed.
Mr M Figg (DA) said targets could be either achieved or not achieved, and he thought that “partially achieved” was not possible. He was concerned with under expenditure on the NHI grants and Hospital Revitalization Grant and the reasons for underspending, saying that these were the same year after year. The poor quality of braille material should not have happened in the first place. He asked why some months had no cash flow. He asked for the total number of invoices that were paid late.
Ms S Nkomo (IFP) was concerned that underspending patterns were consistent with service delivery challenges. The NDOH started in 1994 and yet this presentation seemed to suggest that the Department had only become a new department after elections. The NDOH seemed to “recycle” the same things for several years. For example, comments on the regulation of African traditional medicine had been on the agenda since 1994. She asked why so many doctors who examined chests of ex mine workers were leaving this job within a few months. She was ashamed to note that Emergency Medical Services (EMS) personnel were not properly trained, despite the fact that they were the first point for patients. She urged that the Committee must be given input, in writing on the EMS and their training. She was concerned that so many young people suffered from TB, and the non-immunisation of girls against cervical cancer. She wanted to hear if there had been any virements between programmes and whether savings were made in the first quarter.
Ms M Dunjwa (ANC) was happy that the regulations of African traditional medicine were being completed. She asked which provinces were charging other provinces for testing. She asked about the progress made with the Department of Telecommunications and Postal Services (DTPS) to address connectivity challenges in primary health care centres. She asked for time frames as to when EMS service regulations would be finalised to improve their training, as people were dying as a result of road accidents. She noted that the allocation of powers and functions between NDOH and provincial departments made it difficult to arrange matters and suggested that the NDOH must raise the issues officially with the Committee, to try to find ways to assist the NDOH.
Mr A Shaik-Emam (NFP) congratulated NDOH for reducing the HIV percentage rate. He asked what NDOH was planning to do in respect of MECs and Heads of Department (HODs) who underperformed in provinces. He asked if there were enough general practitioners in NHI pilot districts. He asked what would be done to address challenges in procurement of medicines. He asked what the Committee could do to assist the NDOH on challenges in provinces.
Dr O Maesela (ANC) asked how partiality was arrived at on annual targets. The challenges on NHI grants and hospital revitalisation grants were not new and the Committee needed to know if the NDOH was hamstrung seeing that it had failed to find solutions to those challenges. NDOH must unblock blockages to make grants spending effective. There was no indication of action plans to address partially achieved and non-achieved targets.
Ms R Nyalungu (ANC) asked the amount that was projected to be spent on HIV in the first quarter.
Co-Chairperson Mr N Qcwabaza (ANC) said there were variations between the National Treasury reports and those of the NDOH on expenditure and underspending. He too asked about the progress in addressing connectivity challenges.
Ms Matsoso replied that the dashboard for reporting was provided by Department of Performance Monitoring and Evaluation (DPME) including the comments on targets partially achieved. Members could invite DPME to explain the position if there were problems with the language of reporting. It would be irresponsible to report on quarterly targets only but excluding progress made towards reaching the annual targets. The NDOH had previously only regulated Western practitioners, but the World Health Organisation guidelines demanded that it now should be regulating practitioners, practices and processes. There were only 40 practitioners who examined lungs in the country. It was difficult to get specialist practitioners in this area as they were a scarce resource. EMS practitioners were young people trained by the private sector and registered with the Health Professions Council of South Africa. The regulations were aimed at stopping the EMS staff who were not being given proper training, and those that were in the public service would have their skills upgraded. NHI pilot projects had tested three models of contracting general practitioners and the Department would now look at the best one. However, it could not scale up a model without a policy paper. She did not think there was a need to continue with NHI grants, but said that rather what was needed was to have a policy paper and just implement it.
Mr Gcqwabasa said the remaining questions would be responded in writing, in view of shortage of time.
Department of Rural Development and Land Reform first quarter 2015/16 performance report.
Ms Sadiki Rendani, Chief Financial Officer, Department of Rural Development and Land Reform said that unfortunately this Department (DRDLR) had performed “dismally”, which was evidenced by only less than 25% of targets being met. By 30 June 2015, spending was at only R105.9 million, representing 6.9% of projected expenditure. Spending consisted mainly of land acquisition,a followed by recapitalisation and development and planning. The delays in spending had been mainly due to the reprioritisation of the 2015/16 budget and reviewing of projects within the branch Land Redistribution and Development, in order to align it with the Agri-parks programme. The remedial action taken to address material variances in spending as seen against the budget was to ensure implementation of the projects, as a matter of priority.
Mr Shaik-Emam said DRDLR had been underspending for the past five years. It had been having serious problems with vacancies. People were not even taking up its bursaries. The Department must contract conveyancers to deal with transfers.
Mr A McLaughlin (DA) did not understand why it was said that the 1998 land claims were still to be researched at the present time. The DRDLR had problems meeting all its targets and seemed to blame the Department of Public Works for all of its challenges. He asked whether it was also involved in deeds transfers of RDP houses. He pointed out that the conveyancing issues must be solved together with the Department of Human Settlements. He asked why it was taking DRDLR so long to fill vacant positions. It was also wasting money on interest payments. The underspending was really unacceptable, and the reasons for underspending were still the same as those presented in the previous year.
Mr Figg said the DRDLR was underspending now, and would presumably claim to have made savings at the end of the year. There was a difference between the main appropriation and the available budget. He asked why R370 00 was paid for damaged rental cars. He also pointed out that the tracking of invoices was something that should have been finalised many years ago.
Ms Nyalungu asked for the number of students on bursaries. She asked the reasons for the delay of the implementation of rural development projects, where were they, what was the nature of the projects and whether these delays were now solved. She also wanted to know to what extent they had an effect on cost and on intended beneficiaries.
Co-Chairperson Qcwabaza said the figures presented here did not tally with National Treasury figures on programmes. He asked if there was no internal capacity to process claims. There was consistent decline on quarterly expenditure in the Department. He was not sure if the proposed steps would address the challenges. The DRDLR had been showing a downward trend on spending over the years. He asked for more details on the cost escalation that resulted from delayed projects. He was not happy with the spending pattern in the Department, saying that its inability to perform properly directly affected issues such as food security, emerging farmers and allocation of land. The Department, if it continued along this trend, would be underspending R3 billion by year end.
Mr Eugene Southgate, Deputy Director General, DRDLR, replied that the DRDLR had a problem with vacancies, as there had been a moratorium on filling vacancies. Even more so, however, once this was lifted, the DRDLR found that this was a slow process, as it was working in a highly regularised environment that needed verification and validation of qualifications. It had now migrated to online applications as it sometimes would have received over 2000 applications for eight positions. It cannot appoint conveyancers, as it was responsible for running the Deeds Office, and if it attempted to favour some over others, there would be a conflict of interest. The DRDLR outsourced research on every land claim that had been lodged by 1998. Since 1 July 2015, it had received over 80 000 land claims, some of which dated back to 1652 and they all needed to be researched. It had appointed a Valuer-General to deal with agricultural land issues as there were few valuers dealing with agricultural land. There were also some people who had lived on farms all their lives, and wanted the Department now to help them to acquire their own piece of land. The Department of Human Settlements had started engaging it on RDP houses, however, it must be pointed out that many RDP houses were built on unsurveyed land.
Ms Rendani Sadiki, Chief Financial Officer, DRDLR, noted that the Department could not budget for interest, according to the law. It also could not budget for land to be allocated, as it did not know how much land would be transferred by year end. The changing of banking details in government was a very long process, and was not simply about having a statement stamped from a bank; this was purposely done as a way of combating fraud. She would report back on the number of students on bursaries. She agreed that delays in implementation of projects had a negative effect on recipients; for example not building a bridge on a road means the road remained unusable. She would also verify those figures that did not agree with National Treasury statements, although she pointed out that some of the issues were out of the control of the CFO's office. She was well aware of the effect of late payment on small businesses, and said that the DRDLR tried to see that every service provider must be paid on time, whether small or large.
The meeting was adjourned.