Department of Health Jan-Jun 2016 performance: hearing with the Deputy Minister

Standing Committee on Appropriations

14 September 2016
Chairperson: Ms Y Phosa (ANC)
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Meeting Summary

The Department of Health reported on Q4 2015/16 spending percentages for its programmes: Comprehensive HIV/AIDS grant spending 99.1%, National Health Insurance (NHI) 90.2%, Health Prof Training and Dev Grant (HPTDG) 100%, National Tertiary Services Grant (NTSG) 99.6% and HIV/AIDS 99.9%, Conditional grants (CG) 99.1%, Indirect grants 95.3%, Goods and services 85.93% because condom supply had a contractual difficulty, Transfers 99.95%.

Overall expenditure for Q1 2016/17 was 22.6%, Conditional grant (CG) spending was 22.6%. NHI was 12%, NTSG 22.7%, HPTDG 23.5%, HIV/AIDS 23.3%, Indirect grant spending 18.8%, Health Facility Revitalisation (HFR) 17.3%, General Practitioner (GP) contracting was under pressure and at risk of over expending. 23.17% of the original budget of R38 563 317 000 was spent in Q1.

Almost all Department of Health targets were achieved for 2015/16 and the highlights were:
• Continued health status improvements: Total life expectancy in South Africa increased; Under-five mortality declined; infant mortality rate declined; Neonatal mortality rates remained stable; maternal mortality ratio decreased;
• Publishing of NHI White paper;
• 11 millions clients aged 15-49 were tested for HIV against the annual target of 10 million.

Highlights for Quarter 1 2016/17, DoH did well on indicators for child under 5 years diarrhoea and pneumonia fatality rate; pregnant women visiting health facilities before 20 weeks; antenatal clients initiated on ART; cervical cancer screening coverage, and number of male and female condoms distributed.

Main challenges in 2015/16 were in the areas of medical male circumcision; TB MDR; and quality of care. Interventions in these areas are happening in 2016/17.

A progress report on the NHI Pilot Project was provided: Under NHI Phase I the Health System Strengthening pilots have yielded a range of positive results in the following: District clinical specialist teams (DCSTs); School Health; Central Chronic Medicine Dispensing (CCMD). There are currently 676 health practitioners (350 GPs and 326 pharmacist assistants) on the contract in 11 district municipalities in the pilot.

Members congratulated the Department for the good performance but encouraged it to have a clean audit. They asked how it would manage procurement processes as well as the Provinces. They questioned its capacity for capital projects and if there was consequence management for irregular expenditure. They asked why there was under expenditure in purchase of condoms and the demographical health survey, the reason for a decline in the budget for the health facility revitalisation grant. They said the challenge of implementing agents and shortage of doctors was a concern. They complained they could not follow the money because percentages were used rather than numbers. There was a serious problem with health care in the country and the training of nurses should be revisited. They asked why payment of invoices was delayed in the provinces, if risk management had proofed to be effective, and reasons for lack of improvement in the Management Performance Assessment Tool. They requested a list of problematic Provinces as well as a joint meeting of the National Department and the Provinces.

Meeting report

Opening Remarks
The Chairperson said that the Committee would be briefed by the Department of Health on its expenditure pattern for two quarters to ascertain whether the spending pattern was in line with the voted budget and the Annual Performance Plan. The Committee wished to gain clarity to ensure that the taxpayers’ money was spent with equity, efficiency and effectiveness. The Committee wanted to see concrete proposals for the realisation of long and healthy life for all South Africans. Apologies were received from Minister Aaron Motsoaledi who was in a Cabinet meeting. The Chairperson said the Department's internal auditor and chairperson of the audit committee and head of monitoring and evaluation, had been invited to attend.

Ms Precious Matsoso, Director General, NDoH, replied that the Department had come with them.

Mr A McLaughlin (DA) said the Committee letter to the Department stated that presentation should not exceed 12 slides and the current one was over 120 slides. Too much information makes it impossible to get to the nitty gritty. The Committee required only financial information.

The Chairperson agreed as did Ms E Louw (EFF), saying the Committee should not be bogged down with too much information as this would make comprehension difficult.

Dr C Madlopha (ANC) pointed out that DoH was in line as the main document was only 22 slides. Other documents were for additional information.

Deputy Minister introduction
Deputy Minister Joe Phaahla said the Department tried to comply with the requirement that presentations must not exceed 12 slides. There were two presentations. The actual presentation was 22 slides and it comprised both 4th quarter 2015/16 and 1st quarter 2016/17 reports. The other documents were for purposes beyond the meeting so that Members would have further information on what the Department was involved in. These documents were for future reference. To a large extent the Department had spent 99.1% of its allocated budget in Q4. In areas of under expenditure, it did not mean that the targeted programmes had not been achieved. In the 1st quarter, there would some areas where the budgeted expenditure would appear inadequate because the roll out was not necessarily done quarterly. There were programmes where a certain amount of money was spent at a particular time of the year because the implementation happened at that time. In the area of capital projects, it was also the same scenario.

Department of Health Jan-Jun 2016 performance
Ms Precious Matsoso, Director General, NDoH, noted that the quarterly reports represented two presentations. The additional information was background materials that gave details about the quarterly reports. The Department did not want to present a full report to the other structures and only half a report to the Standing Committee.

Ms Matsoso presented the expenditure patterns. Examples of Q4 2015/16 spending percentages were: Conditional grants (CG) 99.1% (the reason for the underspending of 0.9% was Health Facility Revitalisation Grant (HFRG) spending was 96.4% due to challenges with implementing agents and delays in payment of invoices sent in March) National Health Insurance (NHI) 90.2% (as a result of supply chain management difficulties and late delivery of uniforms and equipment), Health Prof Training and Dev Grant (HPTDG) 100%, National Tertiary Services Grant (NTSG) 99.6% and HIV/AIDS 99.9%, Indirect grants 95.3% (this was due to an HPV component spending of 79.4% as a result of delays in submission of invoices by provinces), Goods and services 85.93% because condom supply had a contractual difficulty, Transfers 99.95% (because progress reports from NGOs were received late March and could not be processed by 31 March 2016.

Examples of Q1 2016/17 spending were: Conditional grant (CG) spending 22.6% (due to HFRG spending 20.4% because of slow progress by contractors). NHI 12%, NTSG 22.7%, HPTDG 23.5%, HIV/AIDS 23.3%, Indirect grant spending 18.8% which was due to HPV component spending of 1.4% (NDoH will assist provinces in reconciling and preparing claims for refund immediately after the campaign). Health Facility Revitalisation (HFR) 17.3%, General Practitioner (GP) contracting was under pressure and at risk of over expending. 23.17% of the original budget of R38 563 317 000 was spent in Q1.

On Q4 indicators, research collated showed that total life expectancy in South Africa had increased from 62.2 years in 2013 to 62.9 in 2014. Infant mortality rate declined from 29 deaths per 1000 live births in 2013 to 28 deaths per 1000 live births in 2014. The maternal mortality ratio decreased from an estimate of 166 deaths per 100,000 live births in 2012 to 155 deaths per 100,000 in 2013 (see document).

Highlights for Quarter 1 2016/17: DoH did well on indicators for child under 5 years diarrhoea and pneumonia fatality rate; pregnant women visiting health facilities before 20 weeks; antenatal clients initiated on ART; cervical cancer screening coverage, and number of male and female condoms distributed.

A progress report on the NHI Pilot Project was provided: Under NHI Phase I the Health System Strengthening pilots have yielded a range of positive results in the following: District clinical specialist teams (DCSTs); School Health; Central Chronic Medicine Dispensing (CCMD). 77 School health mobile clinics were purchased for the 11 NHI districts, a total of 644 892 patients had been enrolled on the chronic medicines supply programme. The Department engaged with GPs in all the NHI pilot districts to address the challenge of poor uptake by GPs and more were being attracted. There were currently 350 GPs and 326 pharmacist assistants on the contract

Dr Madlopha congratulated the Department. It was one that performed well around its audit opinion. The Department had improved from 2010/11 and it had been consistent. As regards the underspending of R31.2 million in programme 1 of 2015/16, National Treasury had said one of the challenges was due to the lease payment of a building towards the end of 2015/16. Treasury had raised a concern about the value of this lease which was R120m. Treasury had said DoH should review the terms of the agreement. The Committee would want the Department to comment on it as there was no reference to it in the presentation.

Ms Matsoso (DG) replied that this was the Department of Public Works leases that applied to the implementing agents. There was a flood in the Department and it took ages for a government department to respond. The lifts were not working. DoH had an MOU with the Department of Public Works and it was said the Department required a resident engineer but it was not done.

The Chairperson said the Department should submit a list of all problems from the implementing agents.

Dr Madlopha said the Department had indicated underspending of 79.4% in HPV was due to delay in submission of invoices by Provinces. The other reason from National Treasury was that it was late initiation of procurement processes for capital equipment by the Department. How would the Department manage general procurement processes and co-ordinate the Provinces?

Mr Ian van der Merwe, CFO: NDoH, replied that the suppliers did not meet the specifications and the Department had to start from scratch.

The DG replied that it was a partnership between Provincial Health Departments (PHD) and Basic Education. The Department did not go to a school until the school governing body had met. As regards procurement, there were two types of delays. The ones on grants happened at a provincial level. In the Northern Cape for instance, there were no dedicated teams. The second was pharmaceuticals. She had written to remind the people concerned even though it was not her responsibility to do that. She could submit copies of those letters to the Committee. The suppliers were not paid therefore they refused to supply the next batch of medicines.

Dr Madlopha said the DG indicated that on indirect grants to the Provinces a lot had not been done by Department. Treasury was concerned that because of capacity around indirect grants, the Department compromised maintenance. Could the Department say if it had capacity for capital projects because Treasury had said the NDoH was found wanting in big capital projects? What was the plan to strengthen capacity?

The DG replied that there had been an audit of facilities that were in bad shape. In Tshilidzini Hospital, no health worker could work there. Tents were used. The health estate was 350bn. You have to invest in maintenance or replace with billions. The problem with building a new facility was there must be money for building and staff. The only facility we can build anew was one in which there were no services going on. The Provinces should have some monitoring capacity. It was important to monitor every single project. The Department should look at projects that were at risk and monitor them.

Dr Madlopha said there had been a consistent audit opinion against the NDoH. The accounting officer was responsible to prevent irregular and wasteful expenditure.

The DG replied that at the time of an outbreak of Ebola in some African countries, the provinces did not pay a single dime out of R300m which was owed to the National Health Laboratory. NHL had said it was going to close down the labs. People could not be tested for HIV/AIDs and TB. Part of the grant money was used to pay the bill because it would have been disastrous if there was an outbreak of Ebola in SA. Letters were written to the Auditor-General, Treasury and Accountant General for notification. Subsequently, there were refunds from the Provinces but it was still classified as irregular. The DG said DoH do it again if it was necessary to protect South Africans from deadly disease.

Dr Madlopha asked if a Department could be unqualified if there was irregular expenditure.

 The CFO replied that it could receive an unqualified audit opion even if there was irregular expenditure. If the department reported it and the Auditor-General tested the disclosure note and, if satisfied, the AG expressed an opinion on that. Many Provinces had difficulties because they did not have an open analysis that the AG could audit effectively.

Dr Madlpha asked if there was a consequence management for the people responsible for irregular expenditure.

The DG replied that there was an official who did not do his work. He was demoted for fruitless and wasteful expenditure. The Department had collected the money.

Ms M Manana (ANC) said, with regards to condoms, the Committee engaged on this with DoH in the last meeting as R75m was underspent in Q4 because of delay in procurement. Why was the Department still having problems with regards to this in Q1 2016/17? Secondly, R15.4m was underspent on the Development of Hospital Reimbursement Mechanism Project. What was worrying was the statement from National Treasury that it was unclear what progress had been made? Could the Committee have a progress report on the underspending of R18.9m in the Demographic Health Survey?

The DG replied that the Demographical Health Survey was under-allocated. DoH went back to National Treasury and was told there would be no increase. DoH had gone out to raise more money.

Ms Manana asked what were the challenges with the implementing agents in HFRG and which implementing agents were involved. The DG had said DoH would elaborate on the HPV Component. The second one was the one having a problem. What was the problem? Under Capital, laboratory equipment was ordered but not delivered before 31 March 2016. What was the reason for that?

The DG replied that DoH had opened a new lab in Durban. The lab in Pretoria was not in a good place. For two years Department of Public Works did not give DoH a place. It was SA Bureau of Standards that gave DoH a place. DoH had to sustain the Cape Town, Durban and Johannesburg labs. Hopefully the move into the Pretoria lab would be in February 2017.

Ms E Louw (EFF) said at some point she thought she was in a different committee and not the Standing Committee on Appropriations. She said she could not follow the money through the presentation as it was speaking through the National Treasury pattern.

The DG replied that that DoH followed the money and also accounted for it. This was what the two reports were doing.

Ms Louw said that R75m underspending on condoms due to intellectual property rights was a concerning factor. What would the Department do because this could occur again? Was disciplinary action taken on this? The Standing Committee followed the money. Where did the money go in this programme?

The DG replied that the condom was not about intellectual property (IP) rights. The amount available was far less because the rand had been devalued. Treasury was approached because the companies involved wanted a readjustment. This would also affect the budgets of the Provinces. Equipment, pharmaceuticals and condoms were mostly affected. Eight companies were involved but only one supplied. The others said they could not supply as they would run at a loss. There was no IP issue related to condoms.

Ms Louw said it appeared there was a new trend - when Treasury did not want to give the numbers it gave percentages. The Committee would want to see the numbers as the percentages did not give a true picture of the amount spent.0.9% could mean billions of rands. HFRG underspending was due to implementing agents and delay in payment of invoices. Were there consequences for these? There was the 30 day rule within which invoices must be paid. Why were there still delays in payment?

The DG replied that NDoH’s report to Treasury on a monthly basis on payment of invoices was zero delays. What was reported here was what had happened in the Provinces. For pharmaceuticals, letters were written and for infrastructure there was dependence on the Project Management Support Unit (PMSU). She noted she could remind her counterparts in the Provinces about the 30 day rule but could not take action again them.

Ms Louw asked what DoH had done about supply chain management difficulties and late delivery of equipment causing NHI underspending. What progress had been made in the underspending of R15.4m (Mechanism Projects) and R18.9m (Demographic Health Survey)? Was there value for money on the R128m that was spent on offices?

Dr M Figg (DA) said there was a serious problem with healthcare in the country. The budget for Health Professional Training and Development Grant was 100% spent but there was a difference of R993 000 between budget and expenditure. It was important that the figures were seen as the difference of 0.4% in the National Tertiary Services Grant (NTSG) was the substantial amount of R46m.

Ms Valerie Rennie, Head of Corporate Services, NDoH, replied that there was a training budget. The underspending was because of the budgeted fund for the adjustment of the senior management staff (SMS) members which was to be effected in April was only done in July. DoH was now finalising the previous financial cycle, therefore the cost implication will be reflected in the second and third quarters.

The challenge of implementing agents and delays in invoice payment were a serious concern. Small businesses were forced to close down and a successful economy was dependent on it. Timely payments should be made.

The DG replied that for infrastructure it was always difficult work because DoH’s core business was to provide health services.

Mr Figg said the NDoH should clarify the R900 000 which was indicated as losses under its summary of economic classification in Q4 2015/16 FY.

The CFO replied that when people booked venues and did not show up it was reported as a loss as well as when assets were stolen. When they were recovered it became miscellaneous revenue.

Dr Figg asked if the payment for transfers were carried to the 1st quarter of the next FY in the case where progress reports from funded NGOs were received in the last week of March 2016.

The CFO replied that PFMA required that the NGOs have internal controls which meant that it had to present financial statement and comply with the service level agreement (SLA). Some of the NGOs did not present reports. That was the reason for the delay in transfers

Dr Figg said what was the reason for the decline in the budget for the Health Facility Revitalisation Grant? If there was overspending in one area, others will suffer.

The CFO replied that the reduction of the initial grant in many cases went to finance because of employees. There was a big pressure on the financials. Deductions done by Treasury was the reason for the reduction.

Dr Figg said DoH should set a target closer to 0. Decline from 41 to 39 per 1000 live births was already too high. Somebody should not die of diarrhoea. What DoH should add to the challenges of long queues and unavailability of doctors, was cleanliness of hospitals. The shortage of doctors was another problem. Money should be channelled to areas that made a difference.

Dr Figg said DoH should be commended for the 368 343 learners that were screened in Q1 of 2016/17. More should be done as this area needed attention.

The DG replied that it was donor money (EU Money). Four of the 77 school health mobile clinics were not used because they could not get drivers.

Dr Figg said what was the reason for the poor uptake of GPs? Why were the GPs not coming?

The DG replied that GPs wanted DoH to send the patients to their rooms and not for the GPs to come to the patients at DoH facilities. There had to be a balance between the two and DoH had to know the cost.

Ms S Shope-Sithole (ANC) thanked the Department as it had given South Africans a few more years to live. Life expectancy has improved as well as the fight against HIV/AIDS and TB. She supported her colleague on the 30 day payment for suppliers as it impacted on the economic growth of the country. If small businesses were not paid in a month, it would run out of business and people would be out of jobs. Since it impacted on the economic growth, it should receive attention from every sphere of government to retain the little gains made against poverty. On the negative attitudes of staff as explained by the DG, she said the working conditions of doctor and nurses especially in Limpopo were poor. South African nurses were in demand in the whole globe. It could not be true that South African doctors performed well overseas and do poorly at home. Going down memory lane, nurses were trained in the work place. It was a new experience as most nurses now came straight from the universities. These nurses must acclimatise to cleaning vomiting patients. DoH must revisit the training of nurses.

The DG replied that the Chief Nursing Officer would come and address the Committee on what she had done in regards to nurses. DoH would start some drills about attitude. She agreed that the some of the working conditions were unbearable.

Mr A McLaughlin (DA) commended DoH for reducing unauthorised and fruitless expenditure to R600 000. R38.6 billion on infrastructure was a massive responsibility on the shoulders of the government. HFRG underspending in Q1 was less than 5%. He said his constituency was disgusting and an absolute indictment on the nation. The facilities were totally inadequate. R206m could have been spent to assist doctors. Why was it not done?

The DG replied that there was a debate on what NDoH did and what the Provinces did. The ndirect grant was new. There was a process that the AG had established. When it was reported to the AG as complete, there must be a completion certificate and then it was ticked. It was an administrative requirement and there must be compliance.

Mr A McLaughlin said DoH should give the Committee an explanation for the delay in payment of invoices.

The CFO replied that the NDoH had developed a system in the last two to three FYs. There was consequence management and the DG wrote letters to the people concerned on a monthly basis.

Mr McLaughlin said only 85% was spent on goods and services. This was fairly low. What was the reason for the contractual difficulty as regards the purchase of condoms? This could mean 100 000 people contracting AIDS. R243 899 was underspent in HFRG. What caused the slow progress by contractors in HFRG underspending? Why were the contractors not paid? Everyone works for money. Was there disciplinary action taken against delays in implementation of business plans? What caused the delays in recruitment processes that affected spending in the National Tertiary Services Grant (NTSG)? There was no information as to why. He would be happier if the explanations could be unpacked.

 The Chairperson said the head of the internal audit unit should comment on the status of internal control over all major DoH projects – the efficiency and effectiveness of overall DoH operations.

Mr Harris Nkanyane, Chief Director: Internal Audit and Risk Management, replied that controls, effectiveness and efficiency were there in DoH and they were working. We see that in two elements. When audit was done and when there were follow ups. There had been a decrease in the number of audit findings that were raised in the following year. The challenge was where there was information from provinces. Since such information was coming from facilities, they had to add up nationally. Management had put in controls to ensure DoH improved nationally. Management has also put mitigations to be able to deal with findings

The Chairperson said what were the aspects of risk management and governance that were functioning effectively and what were those that required attention and needed improving? Comment on the effectiveness of the accuracy of overall budget planning and spending projections. Departments were expected to give cash projections at the beginning of the FY to assist Treasury.

Mr W Huma, Chairperson: Audit Committee, NDoH, replied that risk management was working. DoH had been able to conduct a risk assessment and as a result there was a risk register as well as an operational register. All risks had been managed successfully. It was important to evaluate whether the risk strategies were working. It was working on the overall but must be improved. Many of the challenges faced were occasioned by the Provinces. This was all compounded because we have to follow the money to hold the Provinces accountable. This complicated the situation as the National Department did not give instruction to the provinces. Secondly, as regards coordination of quarterly monitoring and reporting, there were no reports from the Provinces as they were not obliged to give us those reports. This would certainly assist the management in managing those situations. Thirdly, there should be a movement towards integrated reporting to integrate both financial and non financial aspects of reporting. This would help to consistently analyse underspending and overspending and the risks involved in under and over achievement. On budgeting and spending patterns, there were no challenges. There was no unauthorised, fruitless or wasteful expenditure. There were sometimes irregular expenditure which were beyond the control of DoH. The challenges were around the Provinces and would remain for a long time until there was a system of bringing the provinces to account to the Standing Committee. There was experience in the audit committee and Management was held accountable.

The Chairperson said what were the reasons for the lack of improvement in the Management Performance Assessment Tool (MPAT)? What were the challenges in monitoring and evaluation embedded in DoH?

Ms Valerie Rennie, Head of Corporate Services, NDoH, said MPAT was being implemented as a department. The average score on control measures and HR for 2012 was 3. Most of the time there was a drop based on amendment of standards by the Department of Planning Monitoring and Evaluation (DPME).

Dr Gail Andrews, Chief Operations Officer: NDoH, added that in order for Measurement, Monitoring and Evaluation (MME) to get the maximum score of 4 there must be a data that was accurate, reliable and valid. This was a challenge to achieve. DoH was improving the quality of data. Training was given to the Provincial and National Teams. DoH had to keep training. If a Province was not doing well, there was a visit to find out what was wrong. There were government structures that brought information officers, MME officers together and the DoH staff together.

The Chairperson said how effective were the internal audit unit and the audit committee? Was there a fraud prevention strategy in place? Was there an HR development plan? Why were the consultant services managing infrastructure projects not acting on time?

The CFO replied that as regards delays in supply chain, there had been no functioning supply chain unit for quite some time. There was now a CFO, a structure, and DoH was moving forward.

The Chairperson said there should be an elaboration on the Clinic Component spending which was 13.6% compared to the Treasury allocation of 25%. Why was there underspending when money was needed to improve the lives and health of the people.

The DG replied that there was under expenditure in the direct grant. On the indirect grant, the uptake by doctors was very poor. More of them wanted to enrol but there was no money. The NDoH could not pilot forever. It must find out the things that work.

The DG said the allocation budget was R36.253bn.The grants were R32.242bn. If DoH did away with the grants, the only money to be accounted for was R4bn. Administratively it looked good but will it make a difference. Before the audit committee was appointed there was a bit of a mess as there was one audit qualification after the other. Since the appointment of the audit committee, the DDGs now came to account for their work. Mr Huma also chaired the performance unit. Mr Nkanyane was 18 months on the job. He struggled at the beginning but now there were a risk register, minutes and reports. The advice DoH got from him was sound.

Ms Madlopha said DoH had improved a lot. The Committee requests a list of the Provinces that are giving problems especially those that were not paying service providers as well as the hospitals and clinics that were in a terrible situation. There should be a report on that so the Committee could follow the money as that was its primary assignment. Only 8% of the national budget went to the National Department, the rest went to the Provinces.

Mr N Gcwabaza (ANC) said looking at the most recent track record looks promising. The Committee was pleased that even in areas of irregular and fruitless expenditure DoH was taking steps. NDoH had promised a joint meeting with the Provinces. He proposed that in having this kind of joint management, NDoH should specify the areas that needed attending to – areas of financial, non financial as well as re-capitalisation of health care facilities. The Committee should be made aware of the capital projects that were budgeted for in 2016/17 and also 2017/18 as well as the proposed completion dates so that there was a clear plan that was observed at all times. The service providers should be present at this joint meeting. The Committee had said to Treasury that it was worried about departments that were performing poorly especially on capital projects. He said such meeting should take place early in March 2017 because the Budget Speech would have been heard in February as well as have the time to blend the programmes and plan.

Ms Shope-Sithole said the Standing Committee was responsible for allocating the scarce resources of the country. In the proposed meeting, Public Works, the Provinces, National Treasury, MEC and HODs must be there. The President had asked the Committee to do things differently. There was a need to ensure NDoH was enabled to work as it needed the support of the Committee.

Dr Figg said he was not in support of a joint meeting of the National Department and the Provinces. It might end up just being a blame game.

The Chairperson said the other side of the coin was that if these structures were brought to the Committee, they would be aware that the Committee was following up on how their work was done. There were people who worked because they had been instructed.

Ms Madlopha added that no one would be able to shift responsibility because everyone would be present in the same room.

Mr Gcwabaza said when the Committee met with DPME, the Committee had said it would like to meet them with the relevant department. The spirit was that of working together. Parliament through its Committees passed the budget and this included huge transfers to the Provinces. The provincial allocation of 92% was huge and it could not be left unchecked.

Ms Shope- Sithole said the Committee should be aware of the reality that it was responsible for resources to all national departments, provinces and all municipalities. If the need arose to call municipalities, districts and MECs so as to follow the money, the Committee would do so.

The Chairperson said she was concerned when the Director General said she would not hesitate to take grants to build labs again to prevent life threatening diseases like Ebola if similar circumstances re-occurred. There must be consultation so that there were no penalties. Things should be done professionally.

The DG said that at the time she wrote to the Standing Committee on Public Accounts (SCOPA), Auditor-General, this Committee and all the stakeholders.

The Chairperson asked if DoH would adopt the hospital in Tshilidzini and make it its legacy

The DG replied that it had adopted it.

The Chairperson said delays in transfers ended up as under expenditure. What were the mitigation measures? Who delayed in accounting on the transfers?

The DG replied that transfers were to Treasury. The relationship between Provincial Treasury and Provincial Health was a mitigating factor. Where it was smooth, transfers were smooth. Another factor was lack of stability of CFOs and HODs in provincial offices.

The Chairperson said Dr Huma should clarify a contradiction as he had initially said he did not know how accurate the risks were and contradicted it by saying that the audit committee was made up of highly professional people.

Dr Huma replied that when things were done manually, human error could creep in. Despite all efforts, sometimes targets were not achieved.

The Chairperson said in terms of the audit reports for 2011 to 2015, Dr Madlopha had said the NDoH was doing well. With the resources and capacity why had DoH not risen to a clean audit? What was the challenge?

The CFO replied that NDoH should have achieved that except for the under expenditure of 41m. DoH was equally surprised that the AG would state that but NDoH was working towards and looking at achieving that.

The Chairperson said the Committee would like NDoH to have a clean audit opinion.

Deputy Minister Phaala thanked the Committee for the useful comments. There would be a follow up to see that there were improvements. In terms of the responsibility of the political leadership, it did its best on the political side to sit with the MECs to raise concerns. Sometimes there were experiences of shortages of adequate supplies. On a regular basis, there were discussions on the non negotiable such as cleanliness of the hospital and issues of infrastructure. The political heads were encouraged to take responsibility. He hoped to have more provinces achieve an unqualified audit report. The political leadership in NDoH had emphasised to its provincial counterparts the importance of stable leadership as where there was stability, there would be results. If the Committee went ahead with the joint meeting, it was very unlikely to be adversarial. There would be no fracas between the National Department and the Provinces. It would be better than the Parliament.

The Chairperson thanked everyone for the full participation on a critical briefing by DoH. The Committee was pleased with reduced irregular and wasteful expenditure, the innovative measures such as HPV review, the improved life expectancy to 62.9 years, reduced under 5 year child mortality rate. The Committee was also pleased with targets achieved in the two quarters reported on. The Committee felt very strongly about funds not spent as it affected service delivery. It recognised the challenges in working with the Provinces and Department of Public Works. The Committee was most concerned about this. The Committee will take it forward going to the Medium Term Budget Policy Statement in October 2016. Parliament worked hand in hand with audit committee and the input was appreciated. It wanted reports on the challenges with implementing officers, the work of the Chief Nursing Officer as well as NHI Pilot completion report. There was also a demand for a report on the track record of CFOs and HODs. The Committee wanted to see the health sector succeed and wanted to partner with DoH to give quality healthcare to all citizens and above all ensure value for money.

The meeting was adjourned.


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