The Portfolio Committee of Health was briefed by the Auditor-General of South Africa (AGSA) on the audit outcomes of the Department of Health (DOH) and its entities; and provincial departments of health. The Financial and Fiscal Commission (FFC) also briefed the Committee on the budgets, spending patterns and recommendations to the health portfolio. In addition, the South African Medical Research Council (SAMRC) briefed the Committee on their 2016/17 Annual Report.
According to the AGSA, the audit outcomes of the portfolio showed stagnation. The Council for Medical Schemes (CMS) and the South African Medical Research Council (SAMRC) obtained clean audits while DOH and the Office of Health Standards Compliance (OHSC) received unqualified audit opinions. The Commission for Conciliation, Mediation and Arbitration (CCMA) audit was outstanding because the office did not submit financial statements. The Department received an unqualified audit opinion due to accruals.
Overall key control of the portfolio was not good. AGSA also assessed the senior management, accounting officers, executive authorities and audit committee. Overall, 99% of the budget was spent with only 55% achievement in objectives. The Portfolio Committee should follow up on the reasons for the non achievement of about 45% of the targets. It was discovered that there was no value for money in 10 out of 24 projects examined. Financial health improved over a three year period. Indicators showed an improvement in financial health in the current year where R6.1 million irregular expenditure was incurred. Reasons for irregular expenditure at the National Health Laboratory Service (NHLS) are because of payments made on an expired contract and competitive bidding processes were not followed. DOH and OHSC made progress in improving the process of financial reporting.
With the exception of the Western Cape, all provinces had challenges with compliance, because most had challenges submitting financial statements that complied with the accounting framework. Also, inability to detect and prevent irregular and fruitless expenditure contributed to their shortcomings. Although irregular expenditure had slightly reduced, the greatest contributors of irregular expenditure are KZN, Free State and the Northern Cape. AGSA made an assessment and found that there were slow responses by political leadership, vacant key position and lack of consequence management. It was recommended that leadership and senior management should take responsibilities for poor performance and vacancies should be filled with qualified people and consequences for irregular expenditure should be managed.
Members wanted to know why North West was regressing and lamented that the same problems had been identified. They wanted clarification whether irregular expenditure incurred was due to planning or an intention to defraud. The Committee asked why the AGSA’s guidelines and procedures had not been implemented at the provincial level.
According to the FFC, South Africa inherited a fragmented healthcare system and government has committed to improving health outcomes through the NDP and Medium Term Strategic Framework (MTSF). The norms for district and specialised hospitals had been developed but not yet approved. The recommendation for 2015/16 for provincial departments of health to align funding levels for primary health care (PHC) with the applicable delivery norms and standards. The response by government for this was that the alignment will be achieved through National Health Insurance (NHI) and PHC re-engineering.
The HFRG that is intended for health infrastructure had been diverted to construction of hospitals. Other problems are slow progress in filing posts and lack of operational budget for newly built facilities. Medical claims, especially in Gauteng are a major liability on the health budget and this is a growing challenge that should be curtailed. Legislative reforms and government structure cannot be established until NHI blueprints had been completed. The pace of improvement in health outcomes as shown by two key indicators of maternal mortality and infant mortality rate was slow considering the expenditure. Public health care accounts for 12% of the consolidated national budget. There is evidence of poor operational and expenditure management and a large portion of the health spending is consumed by personnel. The overall spending of conditional grants spending is over 98% and the NHI fund is highly fragmented.
The Committee wanted to know how health departments could balance having qualified health professional with saving cost without compromising quality. They asked why the number of health professionals was declining, and if the administrative staff was separated from the healthcare professionals in the number of staff shortages reported.
SAMRC is one of the few entities with a clean audit. The entity listed its financial and human resource achievements and stated there had been a growth in the number of National Research Fund (NRF) rated researchers in SAMRC. SAMRC had been funding Masters and PhD students, but is concentrating on more PhD students and post doctorate students. The number of black people that received the fund had also increased in the last year. There are collaborative work with Sudan, Senegal, China, Rwanda, Canada, India and Sweden.
Members commended SAMRC on its performance, but wanted in-depth details on their transformation agenda and how research was helping ordinary South Africans and impacted the cost of cancer treatments.
Ms M Dunjwa (ANC) was sick and Mr A Mahlalela (ANC) was elected Acting Chairperson.
The Chairperson said the meeting with Auditor General, South Africa (AGSA) and Fiscal and Financial Commission (FFC) was an important aspect of a procedure that goes before presentations of Annual Reports by the entities and the Department of Health (DOH). Apologies were received from Mr W Mapange (ANC), Ms P Kopane (ANC), Mr Sheik Emam (NFP) and Dr S Thembekwayo (EFF).
Briefing by the Auditor-General South Africa (AGSA)
Mr Andries Sekgetho, Business Analyst, AGSA, said a number of goals were determined by the decision to focus on areas which are relevant to impact and has an effect on the Sustainable Development Goals (SDG) and the National Development Plan (NDP). In response to accountability which was the theme of the current year for AGSA, focus must be on planning, implementing the controls, monitoring, consequence management, outcomes and better audit reports. A clean audit does not amount to service delivery but proper accountability following specified processes will result in service delivery. He emphasised the need for good financial statements and the need to report on performance. The AGSA looks at three areas: financial statements, performance information and feedback concerning compliance with key financial legislations.
He said the AGSA does not have the mandate to question the failure of an entity in achieving its set targets in terms of performance. It is the function of its oversight body such as the Committee to question such performances. AGSA also provides the sector audit, which is a follow up to service delivery in the health sector. The sector audit report is issued bi-annually as recommended by the Committee, which implies that the sector report will not be provided for the year under review. To have a clean audit, all the three areas must be covered; also, a disclaimed opinion is the worst opinion, where there is no supporting evidence for the financial statements. The bulk of government entities fall under the unqualified audit which implies a need for some adjustment in the report.
Ms Herashma Ameeka Manager, AGSA, said the audit outcomes of the portfolio showed stagnation. The Council for Medical Schemes (CMS) and the South African Medical Research Council (SAMRC) obtained clean audits while DOH and the Office of Health Standards Compliance (OHSC) received unqualified audit opinions. The Commission for Conciliation, Mediation and Arbitration (CCMA) audit was outstanding because the office did not submit financial statements. The Department received an unqualified audit opiniondue to accruals and commitments.
Mr Sekgetho said many entities maintained unqualified audit opinions for four years and it does not reflect that AGSA recommendations were implemented.
Ms Ameeka said key controls, leadership and financial performance management and governance were rated. Overall key control of the portfolio was not good. AGSA also assessed the senior management, accounting officers, executive authorities and audit committee. Overall, 99% of the budget was spent with only 55% achievement in objectives. The Portfolio Committee should follow up on the reasons for the non achievement of about 45% of the targets. It was discovered that there was no value for money in 10 out of 24 projects examined. Financial health improved over a three year period. Indicators showed an improvement in financial health in the current year where R6.1 million irregular expenditure was incurred. Reasons for irregular expenditure at the National Health Laboratory Service (NHLS) are because of payments made on an expired contract and competitive bidding processes were not followed. DOH and and OHSC made progress in improving the process of financial reporting.
Mr Sekgetho proposed that the Committee ask questions on why some indicators were not achieved, on the status of the key controls, what was being done to prevent future occurrences, and what had been done to transgressors in the case of irregular expenditure. The portfolio also faces a large amount of claims and the Committee must enquire on the status of the claims and progress made.
Ms Sithembile Ngubane, Manager, AGSA, said there was an overall improvement in audit outcomes, mostly from Free State Province. With the exception of the Western Cape, all provinces had challenges with compliance, because most had challenges submitting financial statements that complied with the accounting framework. Also, inability to detect and prevent irregular and fruitless expenditure contributed to their shortcomings.
Mr Sekgetho said 50% of the 10 departments still have problems producing credible and accurate financial statements. Provinces still have problems complying with key legislations especially in the area of reporting on performance information. He said though there is progress but the progress is too slow.
Ms Ngubane said although irregular expenditure had slightly reduced, the greatest contributors of irregular expenditure are KZN, Free State and the Northern Cape. AGSA made an assessment and found that there were slow responses by political leadership, vacant key position and lack of consequence management. It was recommended that leadership and senior management should take responsibilities for poor performance and vacancies should be filled with qualified people and consequences for irregular expenditure should be managed.
Mr Sekgetho said the portfolio constitutes more than just financials; it was also responsible for service delivery. For a quality health care service four elements were identified: infrastructure, management and pharmaceuticals, use of maintenance of medical equipment and information technology. The audit was done on the four elements.
Ms Maryke Schneigans, Senior Manager, AGSA, said 40 clinics were visited and 35 of them had pharmaceuticals out of stock on the day that the AGSA visited. This was found to be due to poor supply management and poor stock management. There had been a lot of improvement in the 9 medical depots and the distribution of pharmaceuticals to the patients had improved over the last three years. Due to inadequate stock management, medicines were found to be stored in inappropriate places and expired stocks were found in some of the medical depots. On the use and maintenance of medical equipment, she said some medical equipment were not used due to infrastructure deficiencies, hospitals lacking staff that has the ability to use the equipment and delay in repairing medical equipment.
Mr Corrie Pretorious, Senior Manager, AGSA, said, under infrastructure, AGSA looked at project, project management, commissioning and use of infrastructure. He noted that about 8 out of every 10 people in South Africa rely on government hospitals. DOH spent an excess of R5 billion of the health facility revitalisation grant (HFRG). Projects which were financed with the HFRG were selected from the 9 provinces and 45 clinics were visited among those which received the HFRG. One of the challenges in infrastructure is bad workmanship from suppliers which was noted in all provinces except two. There were delays in commissioning clinics and hospitals. The new standard for infrastructure procurement and delivery management was often not fully implemented. Findings showed lack of capacity, reliance on consultants and lack of consequence management as the sources of problems in the portfolio.
Mr Sekgetho said monopoly and discretion without accountability promote corruption and corruption impacts negatively on service deliver. By ensuring high level of accountability AGSA can ensure that corruption is reduced.
Mr Mpontso Chauke, Manager, AGSA, said there was a follow up on facilities in rural and urban areas. The outlook was on network infrastructure and patient billing systems. Findings showed outdated infrastructure, system downtime, inadequate setup tariff codes and lack of system validation codes.
The Chairperson thanked the delegates and said the information was to empower the Committee when engaging with the entities. Ms L James (DA) welcomed the presentation; she said the information will empower the Committee on delivering its duty especially in service delivery. She thanked the AGSA for a clear and understandable presentation.
Mr T Nkonzo (ANC) thanked noted that the North West was regressing and he asked what the issues were. He asked what the problem of NHLS was and how the AGSA felt when it gets negative reports about the Department. He also wanted to know what message the AGSA was passing to the Committee and DOH through the report.
Dr P Maesela (ANC) said there had been a repetition of the processes and identification of the same problems. If practitioners are capacitated they would be able to deliver on their mandate. It does not help the Committee to say there was irregular expenditure and he asked for clarification on what is meant by irregular expenditure, i.e. if it was due to planning or an intention to defraud.
Mr R Hugo (DA) said various provincial departments are in shambles. KZN was a mess as revealed by the oncology issue. He asked the reason for the increase in irregular expenditure and fruitless expenditure. Why was the AGSA’s guidelines and procedures not implemented at the provincial level? The AGSA found that the Department did not have internal controls for records and reliable reporting. He said AGSA should explain the value for money report more clearly.
The Chairperson said AGSA may not be able to answer some of the questions that were being raised by the Members. It was questions which DOH would able to answer. He asked if DOH have told the AGSA why they failed to pay service providers within the stipulated 30 days. He asked if the AGSA can understand why the issues had persisted, i.e. if it was it due to ignorance, a deliberate act or wrong interpretation of the law. Sometimes the stories told by the Department or entity are convincing and he would like to know the root of the problem. There had been a recurring problem of disparity between financial performance and service delivery and he asked what can be done about it. There are accruals that date back to January and December and this implies that payment for services had not been made within the 30 days as stipulated and secondly payment of these debts would reduce funds available. KZN said it was underfunded by R9.1 billion. He asked the AGSA to give its own view of what the problem of value for money is. He asked if lack of value for money was because of the low quality or unrealistic high costs of products. He asked if the targets removed by government from the APP would be able to solve the problem of value for money. He noted that departments budget for infrastructure but do not take responsibility for infrastructure delivery. Departments often blamed the Department of Public Works (DPW) for delays in infrastructure delivery.
Mr Sekgotho responded and said the regression in the North West started from the previous year. Some of the reasons for negative performances are linked to lack of systems and processes for proper record keeping, daily and monthly controls, financial and performance reports. Lack of proper contract management sometimes makes entities pay for expired projects all of which increased irregular and fruitless expenditure. There is a lack of supporting evidence because there are nobody doing the job, and sometimes no one is ensuring that the policies are observed and implemented. The AGSA is trying to eliminate the re-occurring issues by reporting the issues to the Committee and the Ministers so that the issues are addressed. He said value for money will be achieved when the quality and cost is worth the money expended on the product. The Public finance management Act (PFMA) is clear about consequence management but there is slow implementation. The law has provisions for deviation from the norm but it must be applied for with proper motivation. The budgeting and planning process must be reconsidered to ensure that the budgeted amount can help to deliver the stipulated objectives. The AGSA audits project to see that value are achieved from projects which is equal to the money spent and this can be an early warning sign for avoiding over expenditure on any project. Infrastructure is key to delivering quality health services and therefore the responsibility for oversight and to ensure that DPW delivers on infrastructure project still lies with the DOH.
Mr Pretorius aid some of this is related to the infrastructure delivery challenges in South Africa. He said most of the work was done by DPW as the implementing agent. After 2008 the DOH made funds available to get infrastructure support staff at provincial level and this had been fruitful. DOH employs DPW to work for it and must ensure that quality work is delivered. Infrastructure is very important to service delivery.
Briefing by Financial and Fiscal Commission (FFC)
Mr Daniel Plaatjies, Chairperson, FFC, said the FFC had provided many recommendations to Parliament in the past years and it is not the function of FFC to ensure that the recommendations are implemented. The key sectoral issues and challenges in healthcare are management of personnel, stewardship and performance management, infrastructure challenges, private health sector and national health insurance.
The primary mandate of FFC is to make recommendations. South Africa inherited a fragmented healthcare system and government has committed to improving health outcomes through the NDP and Medium Term Strategic Framework (MTSF). The norms for district and specialiased hospitals had been developed but not yet approved. The recommendation for 2015/16 for provincial departments of health to align funding levels for primary health care (PHC) with the applicable delivery norms and standards. The response by government for this was that the alignment will be achieved through National Health Insurance (NHI) and PHC re-engineering.
Mr Eddie Rakabe, Researcher, FFC, said South Africa has a total of 4 200 health facilities serving about 13 700 people on the average day and about and about 90% of the population can access a health facility within a 5 km radius. Spending of the provinces on personnel was within the national average and there was a decline in the number of healthcare professionals, especially in the rural areas which was partly caused by the bottleneck in appointing healthcare professionals. Provinces are reluctant to delegate human resource functions to the health facilities. There is continuous poor stewardship and government showing interest in taking over the functions of the provincial government. The HFRG that is intended for health infrastructure had been diverted to construction of hospitals. Other problems are slow progress in filing posts and lack of operational budget for newly built facilities. Medical claims, especially in Gauteng are a major liability on the health budget and this is a growing challenge that should be curtailed. Legislative reforms and government structure cannot be established until NHI blueprints had been completed. He emphasised that for an improved health sector, there is a need to start with what is already working with the sector and the implementation of the NHI.
Ms Sasha Peters, Researcher, FFC, said the South African health outcomes was increasing but not at the rate consistent with capacity level of the economy. The pace of improvement in health outcomes as shown by two key indicators of maternal mortality and infant mortality rate was slow considering the expenditure. Public health care accounts for 12% of the consolidated national budget. There is evidence of poor operational and expenditure management and a large portion of the health spending is consumed by personnel. The overall spending of conditional grants spending is over 98% and the NHI fund is highly fragmented.
Mr Plaatjies advised the Committee to invite FFC at a later time, to help in addressing some of the concurrent issues of the health sector and a range of other matters.
Ms C Ndaba asked how health departments could balance having qualified health professional with saving cost without compromising quality. She asked if the 12% spent by public health is a proportion of the funds allotted to the health sector or a proportion of national expenditure.
Mr Nkonzo observed that the report said the Health Inquisitional Grant showed good spending but requires a review. He asked on what area of performance was the review needed.
Dr Maesela asked why the number of health professionals was declining, and if the administrative staff was separated from the healthcare professionals in the number of staff shortages reported. He asked how competence can be achieved by the sector on infrastructure knowing that infrastructure is the competence of DPW. The achievement of targets was very low and achievement of some indicators showed only about a quarter of the targets achieved. He also asked if the performance were budgeted for and what happened to the rest of the funds when most of the indicators were not achieved. He asked if poor performance meant that the oversight body, i.e. the Committee was not efficient.
The Chairperson asked what the perception on underfunding was. He asked if FFC thinks that the health sector is sufficiently funded. There had not been any department that had reported a sufficient budget, and most of the time, there are huge accruals. What is the average percentage from the GDP point of view that should be allocated to the health sector? He said allocation to provinces defers from one province to another and he asked what the average should be. The system used to fund NHLS is one of the challenges faced by the entity. NHLS is funded through the provinces, but is not often a priority of the province. He said he does not know if FFC was informed of the Bill proposed to address the challenge. It was said that the personnel expenditure was within the national average and then also said it was too high. He asked if there is any concrete proposal for the new financial year which can be presented by the Committee during the budget review.
Mr Plaatjies said he indicated that there is a need to have a proper discussion not in relation to what will happen over the next two weeks. FFC is ready to come back to the Committee and the solution to ratios on the apportioning of provincial funds was already on the way. He said delivering health service in the urban area is not the same as the rural area. FFC had recommended that there should be a costing of how much is needed to deliver health. FFC will hopefully return to Parliament on what the equitable share allocation should be. The equitable share allocation is not directly linked to number of people but cost of healthcare delivery. There is a need for the sector to think about how to retain health professionals in practice. Many departments would like to take away the responsibility for infrastructural development from DPW. The 12% mentioned is the percentage of the consolidated National budget allocated to health. There is no recommendation for the next financial year.
Mr Rakabe said there are no separation between the clinical staff and the administrative staff and he promised to do this in future. Infrastructure planning and administration which should happen with the health sector are not efficiently done and that was not a function of DPW. There had been a shift of resources from infrastructure to other health challenges like HIV/AIDS and TB. The Committee must redirect departments such that funds are spent on the purposes for which they are allocated.
Briefing by the South African Medical Research Council (SAMRC)
The Chairperson said the Committee had not had time to observe the content of the report and any concern that was not raised during the meeting would be forwarded to SAMRC in writing.
Professor Mike Sathekge, Chairperson, SAMRC board, said SAMRC is one of the few entities with a clean audit and that SAMRC had just received its fifth consecutive clean audit. The number of innovation and technology projects funded by SAMRC to develop new diagnostic devices, vaccines and therapeutics moved from 34 in the 2014/15 financial year to 34. The number of published indexed high impact factor journals moved from 20 to 602. There is a strong input into capacity building especially for females and disadvantaged groups as previously recommended by the Committee.
Mr Nick Buick, CFO, SAMRC, said the most of the indicators are on the positive. He explained all the indicators that were considered for the clean audit rating by the AGSA. On financial report, he said there was a 10.4% (R849 million to R937 million) increase in revenue. Investment Income also increased by 36% (R25 million to R35 million). The baseline grant from government increased by 5.4% - slightly below inflation. There was a 32 million budget surplus for the year because SAMRC got more funds than anticipated from international funders; the excess was channeled into collaborative research. SAMRC was able to exceed the R1 billion cash receipt, actual cash of R1.04 billion. The operating cash generated was R118 million and investing cash flow of R28 million.
Mr Brinton Spies, Executive Director: Human Resources, SAMRC, said SAMRC had predominantly employed black and colored people and SAMRC is one of the few entities where females outnumber males. He said although there is an increase in the number of white people in senior management, these white people were promoted and not newly employed. Between 1997 and 2017, the number of black people within the organisation had increased from 25% to 50%.
Adv. Nkosinathi Bhuka, National Manager: Legal Services, SAMRC, said, on the review of the SAMRC Act, it was intended to update the SAMRC Act so as to align it with current legislation and also to position SAMRC to grow the funding base and compete with its international counterpart.
Prof. Glenda Gray, President, SAMRC, said SAMRC is proud to achieve a fifth clean audit and SAMRC will continue to grow and cement partnerships. Although SAMRC is dominated by females, senior management is still dominated by men and to change this trend SAMRC has created opportunities for people to grow to becoming senior leaders in the entity. SAMRC has created competitive career boosting programmes to develop next career scientist in middle management. There had been a growth in the number of National Research Fund (NRF) rated researchers in SAMRC. SAMRC had been funding Masters and PhD students, but is concentrating on more PhD students and post doctorate students. The number of black people that received the fund had also increased in the last year. There are collaborative work with Sudan, Senegal, China, Rwanda, Canada, India and Sweden. The SAMRC had invested into the reducing the South African burden of diseases. She said the way funds are allotted to each disease shows that SAMRC is strategic in its funding approach The groundbreaking innovations achieved by SAMRC are the discovery of a new gene that can be used to prevent cardiac death, antiviral therapy, Tuberculosis Bioinformatics Initiative, POX-Protein public private partnership and the production and characterisation of CAP 256 VRC26 monoclonal in plants. There is a lot of clinical collaboration through the clinical research sites in the country. There was about R17 million investments in mental health. Strategies are developed to increase communication with the public because there is a need for SAMRC to learn how to communicate with the public. The use of social media had been employed for this purpose.
Dr Arban Pillay, Deputy Director-General, DOH, said there are no serious concerns on the Annual Report and questions are on the funding required from government and external donors and how to manage it in terms of the research that needs to be delivered.
The Chairperson said entities and departments do not always include their budget constraints, challenges and recommendations during their presentation of the Budget Review and Recommendation Report (BRRR). He reminded the entities to raise their budgetary concerns in the BRRR presentation so that the Committee can present them to Treasury in its report.
Ms Ndaba said SAMRC should be commended for a good job in receiving a clean audit report for five consecutive years. She also congratulated them for exceeding their targets and wanted to know the secret of their performance. She asked if it was the passion to work or because lower targets were set initially. She asked the SAMRC to tell the Committee the demographics of the beneficiaries of SAMRC bursaries. She asked when the result of the huge investment on cancer will become beneficial such that cancer treatment can become less expensive. She asked for clarification on the overpayment or payment prior to approval of DOH. She also wanted to know what the reasons for the termination of the former Vice President’s contract and how much it cost SAMRC.
Dr Maesela congratulated SAMRC on the innovation and asked if the research helped to combat the health challenges in the country or if they are for academic purposes only. He asked how these researches affect South African citizens. He said it is a season of changing legislation and asked if SAMRC had considered the implication of the National Public Health Institutes of South Africa (NAPHISA) Bill. He said men should also be allowed and SAMRC should not be gender biased. He advised that their research should be user friendly and not academically bias.
The Chairperson congratulated SAMRC on their performance. The performance of SAMRC was encouraging. He said SAMRC should be consistent in using ‘Black’ or ‘African’ in identifying a group of people because it did not have the same meaning. He asked why there is a decrease in the employment of colored people. The code should not be miss-interpreted as it would affect the transformation agenda. He asked why there are contractual workers and what the legal implications are. He also asked if it is possible to get the demographics of the number of sponsored students. SAMRC should specify the extent to which the journals produced impact service delivery. He asked if there was research done to reduce the cost of treatment for cancer and some other non-communicable diseases. He asked how SAMRC incurred the reported irregular expenditure. Despite the clean audit, SAMRC should work hard to eliminate irregular expenditure because there are chances that the irregular expenditure will grow over time if not checked.
Prof Mike Sathekge said that more than half of the bursaries that are going to previously disadvantaged populations. A total of 156 people received the bursaries; one-third of the recipients were White and two-thirds were Black African. The majority of Black African recipients were female. Mr Sathekge said they were also partnering with institutions such as Walter Sisulu University, the University of Fort Hare, the University of Limpopo and other previously disadvantaged institutions.
He explained that when the former Vice President resigned, SAMRC did not incur additional expenditure because the resigned employee only received a three-month payout, which is the normal course of action.
Prof Gray explained that SAMRC is indeed, overachieving despite having a lower budget than similar institutions. SAMRC outperforms those institutions when measured along the same benchmarks. When its reports are peer-reviewed by the Indian, Brazilian, and Chinese research councils, it is clear that SAMRC is doing more with a smaller budget. SAMRC encourages their scientists to publish in high-impact, peer-reviewed journals, because clinical practices are implemented based on evidence in those journals. This is worthwhile because when scientists are published it helps SAMRC’s status.
Prof Gray moved on to why funding the SAMRC’s drug discovery programmes is so important. The drug discovery programmes are helping to make some drugs more affordable; for example, recently, it discovered two malaria compounds. These discoveries allowed the SAMRC to offer more affordable treatment than what is sold by pharmaceutical companies, if these two compounds are active. Another example is the metabolite which can impact diabetes, which one of its teams found in Rooibos tea. If the metabolite works, SAMRC will own it and be able to distribute it at an affordable price. She stressed that local drugs and screenings are a priority, because they are more affordable. In a third example, the SAMRC funds research about drugs for cancer patients that also have the potential to drive prices down.
Prof Gray confirmed Mr Sathekge’s statement that the SAMRC did not lose money but simply fulfilled the three-month resignation period when the former Vice President resigned. She acknowledged that future impacts of the SAMRC’s “blue sky” work (where results are ten or 15 years away) is clear, and focused on how the SAMRC is helping South Africans today. At present, Ambi-Flow is a four decade old developed program that is seeing benefits today. Additionally, Kangaroo Mother Care is a programme that provides affordable care for premature births; it was implemented after the SAMRC found that teaching a mother about the importance of skin-to-skin contact can save a baby’s life. Prof Gray emphasised that the SAMRC works with communities to find local solutions; they are not only focusing on “blue sky” research. Prof Gray said that SAMRC also tries to focus on the social determinacy of disease, looking at substance abuse and other issues that affect mental health. This research is not always published in high-impact journals, but solutions based on it are implemented at a grassroots level.
Prof Gray addressed the SAMRC’s relationship with NAPHISA explaining that SAMRC works closely with the DOH. SAMRC is committed to NAPHISA, and believe it needs to exist. SAMRC is mindful of scarce skills and wants to work synergistically with NAPHISA, not competitively. It has reviewed its Act and NAPHISA’s Act with the Department. The SAMRC believes that it can work with the Department to determine its relationship with NAPHISA and ensure that they are neither wasting money nor accidentally “stealing each other’s resources” through duplicated work.
Prof Gray explained that while “the feminisation of medical science” is a real phenomenon, a growing concern for the SAMRC is that women often fall out of medical science mid-career, so there are fewer women in the senior leadership. She said that the SAMRC needs to be able to mentor women, understand the multiple roles they have in life (i.e., as caretakers, not only as scientists) and be flexible in order to retain them.
If SAMRC had more funds, it would double its capacity development. She said that she would like to see R100 million invested in capacity development for PhDs, post-docs, and other mid-career scientists – and even junior scientists – in order to help them become senior scientists. She desires increased support of HDIs and capacity development because the SAMRC has seen that just a little bit of funding helps those projects flourish, and they can do much more with plenty of funding. For example, the SAMRC’s extramural unit at the University of Fort Hare was just nominated into the Academy of Science.
Prof Gray explained that science is contractual, which is why the SAMRC experiences contractual issues. It can only employ scientists for the term of a research project, because there may not be work for them after the project is over; that is why the SAMRC cannot hire scientists permanently. The hope is that those scientists will later become independent and bring in their own research and grants. Right now, the SAMRC has an “indefinite contract” programme that lasts for the duration of the research, usually three to five years.
Mr Spies addressed the decrease in the number of Coloured people who have been appointed. In the past, the SAMRC’s Head Office was based in the Western Cape, which is predominantly Coloured. Therefore, the SAMRC shifted from focusing on regional to national demographics. This has occurred through a legal process of natural attrition; not by simply firing people. When an employee leaves, HR works to provide opportunities for other groups to come in.
Mr Buick explained that post-retirement medical aid and pension funds are called “Legacy Liabilities”. The money for older staff members’ subsidised, post-retirement medical aid contributions was invested with an insurance company, so that it would fund the liabilities when those staff members retired. However, medical inflation has been very high, and now the liability exceeds the asset. That liability has been brought into SAMRC’s accounting and makes up R7.1 million out of the R12 million liability. All staff members who were entitled to that benefit have now retired, so this liability has peaked and will begin to reduce when those people pass away.
Mr Buick said that the SAMRC’s pension fund is split into two funds: the defined contribution fund and the defined benefit fund. In the defined contribution fund, members take the investment risk. In the defined benefit fund, SAMRC takes the investment risk. The liabilities exceed the asset in the defined benefit fund by R4.8 million because salary increases exceeded inflation. SAMRC has brought those liabilities onto the balance sheet as well; so those liabilities plus the legacy liabilities make up the full R12 million liability. SAMRC is in conversation with its employees who are defined benefit members in an effort to ensure that this liability does not increase further.
Mr Buick said that the SAMRC should have asked DOH for approval before moving board member payment to the next band (as expressed in the National Treasury’s 2015/2016 circular on board member payment entitlements). They now potentially owe R113 000 to DOH. If the Department does not grant the SAMRC permission to move the board members to the next payment band, those funds will be recovered from the board members; however, SAMRC has been assured that it will receive permission for the move.
Dr Mongezi Mdhluli, Chief Research Operations Officer, SAMRC, said that the irregular expenditures dated back to an audit finding from 2014/2015 about tenders captured. The SAMRC used a section of the Preferential Procurement Policy Framework Act about objective criteria and combined points for price of service functionality to appoint a service provider. The Auditor-General said it was incorrect to apply that objective criterion, and deemed the cost of the appointed service provider an irregular expenditure. From 2016 to 2017, SAMRC’s irregular expenditure then decreased from R1.4 million to R284 000. The contract with the service provider in question will end in this financial year and SAMRC has already put the contract out for tender and is now complying with regulations.
Prof. Rachel Jewkes, Executive Director: Research Strategy, SAMRC, detailed the work that SAMRC does in rural areas and informal settlements and discussed the experiences of health workers and regular citizens in those areas. She echoed Prof Gray, saying that Ambi-Flow and Kangaroo Care are extremely important programmes. Additionally, SAMRC has been funding a project to strengthen maternal and child healthcare systems in Limpopo in coordination with Sweden. It is also translating peer review journal articles into practical guidelines, paying attention to research work on strengthening health systems and developing health workers. It is developing knowledge on public health and developing communication materials to spread that knowledge. The Environmental Health Group is focusing on lead toxicity. Two key areas they have been focusing on are lead in paint and in people who handle firearms (such as police officers and the military), which has resulted in significant policy work. The Environmental Health Group has also focused on health and high temperatures; this affects people living in basic RDP housing with no insulation, people working or accessing services in public health facilities, farm workers and construction workers, especially in KZN, where it is more humid, which makes it more difficult for the body to cope with heat. Lastly, the SAMRC has been measuring gender-based violence (GBV) to look at the trends and figure out why GBV is so prevalent in South Africa. It has a big prevention-orientated research programme that is working specifically in Diepsloot and in the informal settlements around eThekwini Municipality. The GBV work is focused there because people who live in informal settlements are, statistically, more than twice as likely to experience rape, partner violence, and other violence as in other areas. The GBV group is also working in schools in Tshwane on programmes that have been successful when implemented by NGOs, which are experienced in violence reduction.
Dr Zilungile Kwitshana, Board Member, SAMRC, explained that South Africa in particular has neglected to collect sufficient data about tropical infections, such as worm infections. It has always been assumed that tropical infections are not an issue in South Africa. Now, the SAMRC is able to provide data to the World Health Organisation (WHO) on worm infections among school children in South Africa, proving that worms are actually highly prevalent. It funded the first and only national survey about worm infections among school children in South Africa. The results prompted the Department of Education to providing de-worming treatment in quintiles 1-3 schools. Through SAMRC funding, the Parasitology Group is studying whether the stunting observed in recent demographic surveys in children in disadvantaged communities is linked to the highly prevalent parasitic infections.
Dr Maesela asked whether schistosomiasis (also known as bilharzia, caused by parasitic worms) is still a problem, because it has been one for a long time. He also acknowledged the link between stunting and child malnutrition, asking if the SAMRC could fund researchers to create a formula that addresses child malnutrition, due to the high rates of child mortality due to malnutrition. In Uganda, they came up with a formula to ensure that children were nourished sufficiently. Can the SAMRC come up with something like that which will save lives immediately?
Prof Gray agreed with Dr Maesela’s concern about stunting and malnutrition. The data on stunting and worms surprised the researchers. The SAMRC should re-introduce measures to address stunting with a formula for babies to get the nutrients that they need.
Dr Kwitshane replied saying that the prevalence of schistosomiasis is more prevalent among children in Mpumalanga, KZN and the Transkei. The prevalence is as high as 60% of schoolchildren in some places, especially where there is high water contact. There are biologically plausible suggestions that having schistosomiasis increases HIV vulnerability; while the treatment kills the parasites, their eggs can remain in the system for up to 25 years and inflame the genital tracts. This may make it easier for affected people to contract HIV and STIs when they become sexually active later in life. There are similar findings for adults – up to 40% of adults in informal settlements or rural areas, where sanitation and water supply is a challenge, have been infected by schistosomiasis. There are also attempts to link de-worming to school nutrition so that they are not merely feeding the worms when a child eats.
The Chairperson thanked the SAMRC delegates and asked them to finalise their report after next week. He also asked them to obtain the information about budget constraints and other questions asked by Members by then. SAMRC needs more funding to focus on innovation. Additionally, he would like the Committee on Health to invite SAMRC back to specifically discuss the challenges of violence reduction, since violence has become such a big challenge - what happened in Philippi recently and even on the political stage in Parliament.
The Chairperson said that the Committee must attend a meeting with CMS the following day. The Committee has been invited by the Pan African Parliament to a high-level parliamentary meeting on achieving health targets and leaving no-one behind on Thursday and Friday of this week. Five members from the ANC and the EFF have been approved by the Chairperson to attend. If anybody else is available and would like to attend from the DA, they should say so tomorrow morning. The Committee will only meet again this week on Wednesday.
The meeting was adjourned.
- National and Provincial Health Departments: Auditor-General + FCC input, Medical Research Council Annual Report 2
- National and Provincial Health Departments: Auditor-General + FCC input, Medical Research Council Annual Report 1
- National and Provincial Health Departments: Auditor-General + FCC input, Medical Research Council Annual Report 3
- National and Provincial Health Departments: Auditor-General + FCC input, Medical Research Council Annual Report 4
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