Office of the Health Standards Compliance, Office of the Health Ombuds, NHLS & SAHPRA 2017/18 Annual reports

Meeting report

The Chairperson thanked the Office of the Health Ombuds (OHSC) for honouring the invitation. She noted that the OHSC is an important entity because when it conducts investigations it interacts with the people and is more aware of what is happening. She added that people need to understand that the role of the OHSC is to ensure that services in the sector are delivered. She was encouraged that a public institution, Frere Hospital was recently awarded for being the best. The OHSC was formed to ensure that government and Parliament is empowered to understand and have a true reflection of the state of health. People are interested in receiving services in time and having services rendered. She reminded the OHSC that as it presents to the Committee the people out there are listening. She was not implying that there are no challenges but that the OHSC is to assist the Committee understand where improvements are needed. In health there is no Marxism, people want to be confident that the health sector is going to change lives for the better.

The Chairperson confirmed having received apologies from 6 Members and read their names.

Briefing by the Office of the Health Standards Compliance (OHSC)

Dr Siphiwe Mndaweni, CEO, OHSC, thanked the Chairperson for the words of encouragement. She noted that this year marks 3 years for the OHSC as an independent regulator. She stated that the OHSC will report on the following 4 Programmes: Administration; Compliance Inspectorate; Certification and Enforcement; Complaints Management and Ombud and Health Standards Design, Analysis and Support.

 Programme 1: Administration

She reported that the purpose of the Administration Programme is to provide leadership and administration necessary for the OHSC to deliver on its mandate. The first indicator was to establish a fully functional office suitably staffed. The actual achievement for 2016/17 was 96%, the planned target for 2017/18 was 90% and the actual achievement was 93%. This was because the recruitment process was expedited through the use of a service provider. In respect of compliance inspectors accredited, the target for the period under review was 80 % but the actual achievement was zero. The accreditation did not take place because the training curriculum did not include modules aligned to the regulated norms and standards promulgated in the last quarter of 2017/18. On implementing good governance, the performance indicator was the AGs annual findings. The OSSC met the target by receiving an unqualified audit report. Satisfactory progress was made in implementing the ICT strategy. 8 events were conducted during the year to create public and stakeholder awareness. In order to support the mandate and objectives of the OHSC through memoranda of understandings (MOU), two MOU’s were signed by the health Ombud with the Public Service Commission and Public Protector. Draft MOU’s with the South African Nursing Council and the Council for Medical Schemes are also in place. The OHSC has conducted a risk assessment and conducted an internal audit to ensure it keeps to good corporate governance. The call center has been operational from November 2016 and remains fully functional. An interactive online annual returns system has been developed for submission of annual returns by the health establishments (HE).The Health Ombud Portal was finalised and went live in July 2017. The OHSC also upgraded the look and feel of its website. The OHSC conducted a radio advertisement campaign which was launched through the Government Communication and Information System (GCIS). 7 media releases were issued regarding the deaths of mentally ill patients in Gauteng, Strategic partnerships were formed with the NCOP, Hospital Association of South Africa, Health Professions Council of South Africa and Institute for Health Care Improvement.

Challenges experienced are that not all positions in the organogram are funded. There is also inadequate office space although the OHSC will soon move to its new offices. Moving forward, the OHSC will increase visibility and public awareness of the functions of the organisation. It will focus on rural and impoverished areas. It also plans to engage in community events and road shows by using a variety of platforms such as Public Service Announcements (PSAs), Television advertising campaigns, Billboard campaigns and seminars with stakeholders.

Programme 2: Compliance Inspectorate, Certification and Enforcement

The main purpose of Programme 2 is to manage the inspection of HEs in order to assess compliance with national health systems norms and standards. One of the performance indicators was to inspect regulated public and private health establishments, the planned target was 18%, and actual achievement was 24% .This translated to 923 out of 3816 Health Establishments being inspected against an annual target of 689.The OHSC migrated from the manual inspection tool to an electronic tool which improved the time spent in conducting inspections. On the number of Private HEs to be inspected, the OHSC did not assign a target and there was no actual achievement. Private HEs will start being investigated in 2019/20.On certifying HEs that are compliant with prescribed norms, the planned target was to have certification procedure, the draft certification procedure has been developed. The target will be fully achieved when the Certification Procedure forms part of chapter 5 of procedural regulations. On enforcing action against persistently non-compliant HEs, Draft Procedures for timely enforcement have been developed. After approval the policy will be published in the gazette. On publishing of annual inspection report, the target was achieved; the report was presented in Parliament and the National Health Council and disseminated. 923 routine inspections were conducted in 2017/18; more inspections were done in the clinics. Key achievements under Programme 2 include the completion of peace officer training by 40 inspectors, the migration from manual to electronic tools and the development of Certification and Enforcement Procedures.

Community Service Environmental Health Practitioners (CSEHPs) were allocated a budget of R3.5 million to conduct waste audits. The majority of HEs waste was properly segregated and disposed of in correct containers. The majority of the HEs had service Level Agreements in place. There were however large variations and deficits in the waste management services. Private HEs were not inspected because the norms and standard have not been developed. The inspection tools are being revised to align to the promulgated norms and standards. Early warning systems will play a significant role in enabling the inspections to detect, monitor and pre-empt compliance issues before or as it occurs. The OHSC is also required to recommend a schedule of fines to the Minister.

Programme 3: Complaints Management and Ombud

The purpose of the Programme is to investigate and dispose of complaints. One Indicator was to provide a fully functional call center, which was established during 2016/17 financial year. On Procedures for receiving and Managing Complaints being developed, no performance target was set for 2017/18. The procedures were however developed and received approval in the period under review. On the complaints lodged with the OHSC investigated and responded to within six months, the planned target was 70%.The OHSC fell short by achieving 55 %. This could be attributed to Life Esidimeni tragedy which has triggered a huge number of complaints but because of less staff the OHSC could not finalise the complaints. On the % of investigations finalised within 6 months by the Ombud, the target was high at 70% but the OHSC has since realised that finishing one investigation takes a lot of time and most of the investigations are still in progress. On communication and monitoring recommendations by the Ombud, the procedure for communication and monitoring of Ombud recommendations were put up in 2017/18. The OHSC has however received a detailed plan from Gauteng Province giving details of what the province will do in terms of Life Esidimeni.

Dr Mndaweni took Members through the complaints process and confirmed that the public can utilise the call center, vist the OHSC offices or write emails. The call center staff will categorise complaints received. The high risk ones will be forwarded to investigators in the office. The OHSC continuously updates the complainants. Most of the complaints received in 2017/18 were from Gauteng which had 378 complaints. KZN had 138 complaints, Eastern Cape had 129 Complaints. Limpopo had 35 complaints in 2016/17 but the number increased to 192 in 2017/18. Most of the complaints are around patient rights followed by patient safety and patient care. More complaints were about public hospitals than clinics.

Key achievements under Programme 3 are that the procedures for complaints handling have been developed, the call center is fully functional and that workshops on OHSC legal expectations of managing complaints were conducted in Mpumalanga and Gauteng. The vacancy rates compounded the finalisation of complaints within the expected timeframe. HEs delay in responding to requests for information further delayed the resolution of complaints. Moving forward, the OHSC will review the complaints management processes to ensure it aligns with the norms and standards regulations.

Programme 4: Health standards design, Analysis and support

The purpose of the Programme is to provide high level technical, analytical and educational support to the work of the OHSC. One of the performance indicators was to set up a system for submission of annual returns by health establishment set up. The system for submission was set up and is fully functional following piloting in 2016/17. On the annual returns analyzed within 60 days to determine the profile of Hes, the system is set up and piloting and is set to commence in 2018/19. On the number of norms and standards recommended to the Minister annually, the target set was 1, which was achieved. On providing guidance on compliance with norms for regulated HEs, the planned target was 8 which was achieved. On the target of having a fully functional surveillance system that reports on potential risks to compliance, the system is in development phase. The System will have data feeds which will be linked to the Early Warning System (EWS). The key achievements for the Programme was the development of the early warning system indicators. A major challenge is the inadequate number of staff relating to data analysis, standards development as well as guidance and support. The Programme moving forward will embark on consultative process and will work to have annual returns will analyzed within 60 days to inform the inspection strategy and to monitor HEs performance.

On Human Resources management, of the 121 funded posts,113 posts were filled as at 31 March 2018.The shortage of human resources is a major risk for the OHSC to fulfill its mandate. The limited budget for personnel is a challenge and there is a need to advocate for more funds and resources,

Financial information

Mr Julius Mapathato, CFO, OHSC, reported that 92% of the funding for OHSC comes from fiscus. The OHSC received an in kind donation for the development of the inspection system. 66 % of the budget of OHSC goes towards the Cost of employment(COE).The remaining caters for goods and  services including board members. The OHSC received an unqualified audit outcome and that there was an increase in allocation from Treasury. The expenditure in turn increased due to increase in staff complement and salaries and increase in scope of activities. The main contributors to surplus included the following:

• Recruitment for positions happened throughout the year
• 10 vacant positions at the end of the year.
• Procurement of office space was underway at the end of the year
• In kind donation for the development of the inspection system

Discussion

Ms C Ndaba (ANC) commented that an unqualified audit is a great achievement. She referred to the AGSA report on irregular expenditure which showed an increase, and wanted to know what the OHSC has done concerning the irregular expenditure and whether it applied to Treasury to condone the expenditure. She noted that the OHSC was working with 40 % of its positions filled. She wanted to know how that impacts the day to day activities of the OHSC and what plans it has to address  the need. She referred to the Medium Term Adjustment Budget and asked if OHSC has applied to the DOH for staff funding. She asked if OHSC has prioritised some of the vacancies. She also asked what the time frame is for responding to complaints made.

Ms E Wilson (DA) wanted to know whether the issues raised by the AGSA were being dealt with. She noted that no target being achieved on the  enforcement policy when HEs are not adhering to recommendations is alarming, She further asked why certain HEs are classified as high risk and why those HEs are  not complying

Ms S Kopane (DA) asked when the OHSC expects to move to the new offices. In addition, she asked about the nature of working relationship between the Health Ombud and the OHSC and the possible separation of the Human Resources. On the funded posts, she asked when the 8 posts are likely to be filled. She asked what lessons the OHSC learnt from the delayed promulgation of norms and standards. She further asked about the time frame for the appointment of the Board Chairperson.

Ms Kopane asked what criteria was used in identifying the facilities which underwent routine inspection in 2016/17.On CSEHPs, she asked what the difference  is between the work done by the CSEHPs and those in the municipalities and whether there is a working relationship

Mr P Maesela (ANC) noted that 50 % vacancy rate by any standard is not acceptable. On targets not achieved and failing to have the inspectors accredited he asked whether the OHSC pays inspectors as employees or as trainees since the inspectors are not qualified. He asked why the inspectors were employed in the first place and what was used to gauge them. He asked what the delay was in moving to the new offices. He sought more clarification on the strategic partnerships entered into. On enforcement against non-compliant HEs, he asked how many non-compliant entities have been charged so far. He asked what the money used was spent on since the OHSC never fully achieved the targets set and whether it was getting an unqualified audit because not much work is being done. He also wanted to know why the Call Centre was not fully functional.

Ms Gail Andrews, COO, NDOH, responded on the question of the delay of promulgations of norms and standards. She stated that it was a protracted process because there was need for approval from the technical committee of the National Health Council. Initially there were 84 regulations which were too ambitious; the regulations were watered down to around 28. Not everything needs to be regulated since a CEO can be jailed if the standards of the regulations are not met and that is the reason for considering using norms and standards as soft law.

Dr Mndaweni responded that the call center is fully operational and has never experienced a down time. The Act requires the OHSC to train inspectors to equip them to conduct the inspections and all inspectors have gone through internal training. At the time when the OHSC was to certify the inspectors regulations were promulgated and the OHSC had to realign to the regulated norms. All of the inspectors going out have been trained. On Strategic partnerships, partnerships were formed with the Health Professions Council of South Africa and other regulatory bodies so that the OHSC can cross refer cases. On the 8 funded posts not filled, she answered that the OHSC has a limited number of posts that it can fill each year. The OHSC had seen an increase in the number of cases and needed to increase the staff. With the staff complement it will not be possible to cover all HEs especially with the implementation of NHI. The OHSC has prioritised the filling of certain posts using the surplus funds; it however still needs to more resources. On the relationship between the OHSC and the Health Ombud, the OHSC works very well with the Ombud. There is need for separation, which is a process that is in discussion. The two are still in the same office and share common resources.

Mr Bafana Msibi, Executive Manager, OHSC, added that the OHSC signed an agreement with the SABC to use several radio stations. For SABC TV it was mostly interviews. The OHSC covered plus minus 52 % of the radio listeners. Inspectors are appointed as health operationals who are specialised in different expertise and the OHSC beefs up the training. It adds modules on collection of evidence and legislation.

Mr Msibi clarified that the Waste audit started around January and that it was previously done by the NDOH. The OHSC managed to cover 78 facilities and the sampling was purposive. It covered 2 facilities in Limpopo because the NDOH had audited other facilities in the area. He confirmed that there is a working relationship with municipality practitioners however the waste scope for the OHSC is limited to medical waste in the HEs. On the Enforcement policy, the OHSC has not started to enforce the policy because the regulations are coming into effect in April next year.

An official from the OHSC responded to the question about which facilities are considered as high risk. She clarified that the OHSC has indicators. Certain indicators are to be reported within 24 hours, others within 72 hours, others within 1 month. The information collected include in patient deaths, absconding of patients. Early warning systems are then put in place to prevent re-occurrence and to ensure issues are addressed. Some of the HEs may be investigated, to get to the root cause

Mr Monnatau Moses, Director: Complaints Centre and Assessment, OHSC, added that according to the procedural regulations, the OHSC must provide monthly progress to the complainants. The Regulations also provide that the complaints that are not urgent be resolved within 15 working days. Those that are high risk will proceed for investigation. A matter being investigated should be resolved within 6 months or can be extended for an additional 3 months but should not exceed 2 years.

Mr Mapathato added that in September the OHSC received approval from NT to condone irregular expenditure. On the new office space, the OHSC ran a tender which was concluded but it later turned out that the building was not available. It completed a lease agreement for another building at the end of the financial year and plans are in place to move to the new building in December 2018. The building had to be customized particularly the call centre.

Ms Andrews added that on the appointment of chair of the Board, the NDOH will bring it to attention of the Minister so that matter is expedited.

The Chairperson advised that the OHSC should consider having inspectors that are trained in psychiatry. She added that the sector depends on the OHSC in advising Parliament, government and communities,

Briefing by the Office of the Health Ombud

Professor Malegapuru Makgoba, Ombudsman, Health Ombud, commented that Programme 3 of the OHSC is linked to the Office of the Health Ombud. The aim of the Ombud is to enhance regulatory process within the health system through protecting users of the health system, promoting, protecting and improving quality of providers of health within the system. He was appointed on 1June 2016. In his view, the Ofice was an afterthought because health needed an office for standards and compliance which was the OHSC. The Minister then had to look for someone to deal with complaints and the Health Ombud was established. He was employed by the Minister whereas the OHSC is employed through the board of OHSC.

He pointed out that governance gets affected by the way the legislation is drafted which is a challenge affecting his office. He added that anywhere in the world the Office of Health Ombud is created to be a stand-alone office. He advised that if things are to be done properly there is need to look at the legislative framework.

Prof Makgoba added that he had studied models in other places and that for South Africa, the Office will require 113 members, at present it is only him and his personal assistant. He has been able to do his work because he has had the assistance from the staff members at OHSC. His office does not get appropriation from Parliament and if one wants an independent office, the office needs a budget. On the workload and staffing, he reported that in 2015/16, the staffing ratio was 1:25 now it is 1:75. Complaints have increased because of Life Esidimeni. Health care complaints are complex and require careful screening and investigation. The Ombud gets lots of calls, for any call it receives, it makes 4 other calls to respond to that call. On the number of complaints, Gauteng leads with the highest number. The Health Ombud made 16 recommendations on Life Esidimeni and the recommendations are being followed up very well. He is required to do the investigations expeditiously and economically. The operational and strategic challenges include:

• Increase in volume of complaints
• Resource mobilization
• Meeting complaints timeframes
• Experts panel to manage specialized clinical complaints; and
• Regulation of private health establishments

The priorities for the Health Ombud are as follows:

• to bench mark the office,
• Process innovation and refinement systems and processes
• Concurrence on the designation and secondment of staff by OHSC
• Development of a quality assurance manual to harmonize investigations
• Collaboration with higher education institutions on curriculum development, training and research on healthcare specific investigations
• Engagement with the National Health Council to lobby support on responses to complaint requests.

He added that the United Nations Millennium Development Goals identified 2 critical areas for development: education and health. Education and health are intertwined and form the backbone of society. The Health Ombud's role is to protect reputation of the sector and how the rest of the world perceives SA. If something goes wrong the country’s reputation is in tatters.

Discussion

Mr Maesela pointed out that if the system was to be guarded then somebody had to do it and that the Ombud was in a better position to look at all the problems. He also wanted to know whether the Ombud can deliver taking into account the complaints that may arise from the NHI.

Ms Ndaba stated that the Committee appreciates the constructive criticism and that new members of the Committee will have to look at the legislative framework. She was concerned that some members of the public may end up using the Office as a milking cow and that people need to be educated on the purpose of the Office, She was concerned that there is a syndicate of foreign nationals coming to the country, who do not attend pre-natal clinics and when something happens to them when giving birth will want to seek compensation.

Ms R Adams (ANC) asked how much the Ombud spent on the Life Esidimeni case. She also wanted to know how the benchmark will be done, whether it will be from country to country and what the proposed budget for the Office will be.

Ms Kopane stated that there was a debate in the Committee at the time when the Health Amendment Bill was being discussed and she was one of the members who sat in the Portfolio Committee on Health at the time. Her view then was that the Office of the Ombud must be equivalent to a Chapter 9 institution. The salary must be appropriated from Parliament and reporting done to Parliament. She added that the Health Ombud must be given more powers and that it had been possible for Members not to find themselves in this situation, where the ombudsman is reporting to the Minister. She added that Members still have an opportunity to learn from the mistakes of the past and correct the situation.

Professor Makgoba responded to the question of whether the Ombud can still deliver under the NHI. He said the OHSC will be required to designate norms and to ensure those norms and standards are followed and the Committee should support that process. This will require the Office to deal with all issues of maladministration. The NHI can be a unifying force for the country. He agreed with Ms Ndaba on people seeing the Health Ombud as a money making machine. On bench marking, he responded that it is not necessary to physically visit the countries since things can be researched on the internet. New Zealand is a good country to begin the exercise with. The budget for the office could be around R132 million which is lower than other regulatory bodies. R3 million was used by the lawyers to represent the Health Ombud in the Life Esidimeni case. The budget for the Office is currently R 8 million.

The Chairperson remarked that the Health Ombud has given the Committee a responsibility on the legislative framework. She agreed that there should be no argument on whether the country needs NHI or not - the country needs it. She was invited to a meeting on medico legal claims where it was pointed out that lawyers and health workers are conniving and creating confusion. People need to be empowered to prevent them from being manipulated. She noted that the OHSC report is silent on how health providers feel. She also requested the Health Ombud to respond to the Committee in writing on what the provincial departments are complaining about.

Briefing by the National Health Laboratory Services (NHLS)

The Chairperson remarked that if people are sick and not treated, the economy will not grow and that the NHLS is one of the entities in the health sector meant to ensure social conditions of the people are changed.

Professor Eric Buch, Board Chairperson, NHLS, began by giving a strategic overview of the HNLS. He confirmed that the CEO and CFO remain suspended for exceeding delegated authorities. The head of internal audit was dismissed and the supply chain manager resigned. The NHLS has established a strong mechanism to ensure it is able to perform well. It discovered further problems arising from the tenure of the CEO, some which have spilled over to 2017/18.The NHLS has improved controls across all functions and processes to enable it to carry out its mandate more effectively and efficiently. The NHLS continues to offer high quality affordable services with proven value for money. It continues to deliver value for money. There is a much improved financial report. Financial oversight has been tightened in some areas. Provinces are paying quicker and it has the support of the Minister and DG. The NHLS has a settlement agreement with Gauteng. KZN is now paying in full and have become almost the best payer. It has also improved relations with labour and there has been no strike in the NHLS this year. There is focus on ensuring SANAS accreditation.

Dr Karmani Chetty, Acting CEO, NHLS, gave a summary of key achievements. She stated that the NHLS was in a better financial situation in 2017/18 than the previous financial year. Through extensive negotiations most provinces have substantially reduced the historic debts. A settlement agreement was reached with Gauteng Department of Health (GDOH). GDOH committed to paying the settlement amount over a period of 3 years and paying for its current consumption in full. Three provinces cleared their historical debt: Mpumalanga, Limpopo and Western Cape. Revenue grew from R.7.3 bn to R 8.2 bn. The NHLS had a surplus of R 1.3bn due to the reversal for provision of doubtful debt with Gauteng. Cash flow amounted to R 8 bn compared to 6.7 bn in the previous financial year.

On operational efficiency, the key challenge was in procurement. The electronic contract management system was procured and is being implemented. Electronic gate keeping was successfully implemented in all provinces. On service delivery, 92,468 million total tests were performed overall with more tests achieving turnaround time target. On academic excellence, the number of pathologists in training grew by 8.6% from 220 to 239. The number of intern scientists increased by 74%. 12 additional laboratories were accredited bringing the total to 41.The NHLS through its institute led the largest investigation of the largest ever recorded outbreak of listeriosis. The NCID, in partnership with the national and provincial health departments developed and implemented an integrated Notifiable Medical Conditions Surveillance System (NMCSS) that allows for rapid detection and notification of over 55 medical conditions, including listeriosis

The NIOH currently leads the WHO initiative on better Occupational Health and Standards (OHS) for vulnerable workers. The Biobank housed within the NIOH has grown significantly in the 2017/18 and is successfully housing thousands of specimens from different government departments. The NHLS continues to be the desired choice for employment for professionals in the laboratory medicine field as confirmed by the staff turnover which remained at 6% during the year.

Programme 1\: Admin and Finance: the NHLS achieved targets on cash flow, turn over, materials to revenue, creditor’s days, Debtors days. The IT strategy, IT roadmap and modernization was not achieved. It achieved employment equity and medical technicians’ pass rate of 53%.

Programme 2: Surveillance of communicable disease: the NHLS achieved surveillance of diseases, articles were published, outbreaks were responded to and SANAS accreditation. It however did not achieve the target of appointing Epidemiologists for the provinces.

Programme 3: Occupational Health and Safety: the compliance audit target was not achieved

Programme 4: Academic Affairs, Research & Quality Assurance (AARQA): the NHLS did not meet its target of having pathologists on site in provincial tertiary labs.

Programme 5: Laboratory Services: the following were not achieved:

-TB microscopy TAT

-Gene Expert TAT

-SANAS accreditation of Central Labs

-SANAS accreditation of regional labs

-SANAS accreditation of District Labs

-Pre analytical automation of provincial tertiary labs.

On Human Resources Management, the total number of employees at the end of the financial year was 7615. Personnel expenditure amounted to R3.3 bn.122 bursaries totaling R2.7 million were issued to NHLS employees. The vacancy rate was 8.1%,emphasis was placed on filling critical positions. The NHLS is still the largest training provider for registrars, scientists, technologists, technicians and laboratory assistants.

On financial information, she reported that the production costs including direct labour and material grew by 8% from R 5.8 bn to R6.2 bn. Labour costs constituted 42% of the total revenue compared to 46% in the previous year. Assets increased by 42% from 3.4 bn to 4.9bn.Test volumes increased by 1% while revenue increased by 12%.The total revenue is 6.8% over budget (R560 million) due to an increase in the demand for diagnostic laboratory services and increases in transfer revenue during the financial year

The NHLS received a qualified audit report due to the following factors:

-On Commitments the AGSA could not obtain sufficient audit evidence for commitments disclosure .

-On Irregular expenditure the NHLS was found not to have an adequate system for identifying and recognizing all irregular expenditure.

-On Accruals, the AGSA was unable to determine whether any adjustment relating to accrued expenses stated at R390 M was necessary.

Dr Chetty reported to the Committee that corrective measures have been implemented to deal with all the issues raised by the AGSA.

On Consequent management, the NHLS has instituted civil and criminal cases against senior officials and the outcome will be known at end of disciplinary hearings. A new senior management team has been appointed in supply chain management. Expired tenders are being advertised.

Professor Buch added that as a board the NHLS intentionally sets challenging performance targets. The irregular expenditure was a legacy of what was previously happening in the organisation. The financial year starts in March and nothing could be fixed 1 month after suspending people involved since the irregularities cover the whole year. The NHLS has improved substantially both in its service delivery and financial performance. The NHLS has taken the audit findings seriously and the internal controls have been tightened. There is also acceleration of implementation of certain projects for example IT where the NHLS has moved to a more modern system. Cost containment will remain one of the core focus. Operational efficiency and effectiveness will also be the key drivers for performance.

Discussion

Ms Ndaba asked for specific details of the corrective measures taken to deal with the AGSA findings. She asked whether the NHLS made efforts to provide the AGSA with what it needed especially with regards to the AGs comments that he was unable to determine whether any adjustment relating to commitments stated at R77 million was necessary. She asked whether the NHLS is still paying the senior managers who are on suspension. She asked whether there are other officials that are on suspension. She sought clarification on when the NHLS is intending to finalise the disciplinary cases especially those being done internally. On the provinces, she noted that the NHLS reports that it has sorted issues with Gauteng and KZN, yet this contradicts with the FFC report presented to the Committee and wanted to know which report Members should consider as a true reflection.

Ms Kopane wanted to know whether the NHLS has checked the reasons why it is unable to put epidemiologists in the provinces and whether any interventions have been made. She noted that Programme 4 on academic research and training does not indicate the budget allocation and asked what the ideal budget for the Programme is. On the percentage of district laboratories that are SANAS accredited, she noted that the target was 5% and the actual performance was 3% and that the reason given was that the number and availability of auditors was a challenge. She asked when the NHLS is planning to do the audit. She also asked the NHLS to clarify on the delay in the awarding of tenders which was the reason why automation target was not achieved. On equity target, she noted that the top management was not attracting the disabled and wanted to know what the challenge is.

Mr Maesela noted that the Medical technicians pass rate is 53% and wanted to know what the barriers were leading to such a pass rate. On the targets being achieved, he clarified that something being almost achieved is not an outcome. It is either achieved or it was not achieved. He noted that the NHLS has R1.3 bn in surplus yet it is not settling its accruals and wanted to know why. He asked why there are more missed targets than achieved targets. He asked why the epidemiologists are resigning and why 3 laboratories were closed down. He advised NHLS to consider reducing staff compensation which was at 47 %.

The Chairperson pointed out that in the equity target, the current number of African female in senior management position is 9 and the NHLS has targeted for 14, yet for the same position has targeted 20 white females. She asked why the target is low on African females for senior positions yet for semi-skilled position the number is high with a targeted for 1406 black females and 75 white females. She wanted to how rural areas get their results when there is a challenge of broadband since the NHLS is moving to an automated system. She sought clarification on how much is being paid to employees and to the Board members. She asked whether the NHLS is confident that it has the personnel that will assist it move forward. She added that parliament passed a bill on how to salvage the NHLS so that the NHLS can focus on the core business,

Ms Ndaba wanted to know how far the NHLS is with the transformation process and what is being done regarding the high rate of students failure and exam board which was continuously targeting black students fail. She was concerned with Equity targets set since it undermines African people as being fit for unskilled jobs,

Professor Buch responded that the FFC never approached the NHLS and that the FFC should have interrogated the NHLS on the issues reported on. He added that the NHLS stands by everything it had presented to the Committee. On the CEO and CFO, he said the disciplinary process is going on and he has to be careful what he says publicly. The charges against the CEO concerned procurement irregularities. The NHLS was taken to the CCMA which ruled in favour of it. The NHLS is unhappy with the length of time this process has taken and has employed an independent legal presiding officer. It is a tricky balance between trying to push for progress but it hopes the matter will be completed by the end of year. The head of internal audit and risk was dismissed. The CEO and the CFO are being paid since the law requires NHLS to pay them in full.

Provincial payments are not perfect but there is a strong commitment by MECs to pay the NHLS. Overall the provinces are paying the NHLS better and quicker. The NHLS reached a final settlement agreement with Gauteng, for KZN the agreement reached was for 1 period but not on the other periods. Historically KZN used to pay half the amount, now it is paying the full amount and more. On sums paid to the Board, he responded that the board is made up of 22 members and the total sum paid for the year was R1.97 million. The NHLS is confident of the personnel going forward and it has put out adverts for the COO and CIO. It has also strengthened the supply management team. On transformation, the Board will need to look again at those equity targets set. The board does not control the pass rate, it has however engaged with the universities to see what can be done to improve the performance rates. Academic training is top priority and there is improved pass rate in the March exam. He advised that pass rates have to be nurtured and that the NHLS will send an update from the most recent exam to the Committee.

Dr Chetty responded on the corrective measures taken. She confirmed that the irregular expenditure has been halved from the previous year and the NHLS has instituted an electronic management contract system. It is also regularising expired contracts. It is going through the system to see if there is anything that could have been missed.  On payments from provinces, in the previous year, the NHLS billed R6.8 bn and received 6.4 bn. 23% of what was received went to the previous year’s debts. The epidemiologists are in high demand and the number is now back to 7 since the NHLS has hired more. The NHLS will look at providing continuous training and retaining the epidemiologists. On SANAS accreditation for the districts, SANAS can’t cope up with the number of facilities. On the delay of tenders for pre analytical automation, she responded that some of the tenders had to be cancelled because the documentation was not adequate. The equity targets could be because historically medical scientists being trained were white but the NHLS would like to improve the demographics. It has a stable work force where people rarely leave. She added that the NHLS has been utilising the surplus funds to settle accruals and that is why the creditor days have been decreased.

On the question from the Chairperson of how results are transmitted in the rural areas given challenges in Broadband connection, she responded that results are sent through SMS and people can also calI. She confirmed that personnel expenditure is 47 % of total expenditure. She added that the irregular expenditure was because the NHLS was continuing to procure lab material under expired contracts. She reiterated that NHLS is a national institution and puts labs in places where the people need them.

A NHLS Board Member added that there is a training of a group who previously worked as lab scientists and were being trained as technicians and that the group may have challenges with theory because of lacking a science background which may contribute to the low pass rate.

Mr Michael Sass, Acting CFO, NHLS, responded on the auditors comment on commitments and stated that where there are two or three contracts it is difficult to know which invoice relates to which contract, invoices could not be linked to the contracts. The NHLS has now adopted the electronic management system which will assist. He added that accruals have been paid but it will take long to clear the top two because of queries and volume. Queries are to be sorted out before payment.

Another NHLS Board member added that the 3 labs were closed down because of renovations and were merged with other labs. She added that in the rural areas and in particular the Northern Cape, which is sparsely populated, the NHLS has SMS printers and it has trained its staff to look at the results.

The Chairperson stated that the Committee will assist so that the FFCs report will be provided to the NHLS. The Committee will also follow up with NDOH on the issue of students. She asked whether the NHLS has a process of having assistants move up the ranks and whether it has an outreach programme of going out to learners which can assist in the goal of transformation.

Briefing by South African Health Products Regulatory Authority (SAHPRA)

Ms Portia Nkambule, Acting CEO, SAHPRA, reported that the SAHPRA became operational on 1 Feb 2018 following the first meeting of the Board. It has not completed a full year. It has 5 Programmes and has begun review of Annual Performance Plans.

The purpose of Programme 1: Administration is to provide leadership and administrative support. Under Sub Programme 1: Financial and supply chain management, the expenditure incurred will be accounted for and reported in the AFS of the NDOH. The revenue generated for the 10 months 1 April 2017 to 31 January 2018 while the authority was known as MCC amounted to R63,5 million. The revenue will be accounted for and reported in the NDOH AFS and transferred to the National Revenue fund. The HR and Payroll system has been procured and will be used when staff are transferred from NDOH to SAHPRA. Interviews for the CFO have been concluded. 

The major expenditures to be concluded in the financial year 2018/19 budget include:

• Building/Accommodation tender for new premises of SAHPRA as there have been challenges faced with the industrial action at Civitas Building
• IT infrastructure upgrade
• Additional SQL licences for payroll
• Additional IT equipment to be purchased for critical staff
• Service provider for HR and payroll support
• Service support for Corporate services.

For sub Programme 2: Governance and Compliance, the SAHPRA Board manages its governance set out in the compliance framework and policies of Risk, Audit and Governance. On information Technology and Communication, the ICT Policy and strategy was developed and approved by the Board. The domain sahpra.org.za was secured and the SAHPRA logo was approved by the Board. On HR critical senior posts were advertised; CEO,CFO,COO,Director Human Resources, Director IT and the Board secretary. The transfer of staff is still in process pending finalisation.

SAHPRA has also had collaborative relationships with other medicines regulatory authorities, some of these bodies include-Zazibona, Pharmaceutical Inspections Cooperation scheme, the WHO and African vaccines Regulatory Forum (PICS).Several stakeholder meetings and workshops have also been held.

Professor Shabir Banoo, Board Member, SAHPRA reported on Programme 2: Authorisation Management. He stated that the purpose of the Programme is to provide administration support necessary for SAHPRA to deliver on its mandate. A critical task is the clearance of the inherited medical products backlog. SAHPRA has conducted a full comprehensive audit of the backlog. It comprises 16 000 applications, 8300 new registration and 7 200 variations. The backlog dates back to 1992.Not all of those will require full review.50 percent of the new registrations backlog is older than 5 years old.16 applicants account for 50 % of the new registrations backlog. Generics comprise over 90 % of the new registrations backlog

The clearance strategy involves:

-Reducing the number of applications that require evaluation

-Segment and prioritise remaining applications

-Design and implement new models for evaluation

In addition to new policies, there is new operation model that looks to putting in place streamlined processes, staffing for success and having a dedicated project that will be digitally empowered. It is making progress towards establishing an efficient effective regulator and finding fit for purpose building. SAHPRA has also progressed in the appointment of a new executive team and is nearing finalisation of section 197 transfer of staff .There is also dramatic re-engineering and automation of sec 21 processes. The automation has had an impact on having staff review the applications electronically, in the past the turnaround time was 24 hours, today the approval is approaching real time.

Ms Nkambule reported on Programme 3 and stated that the focus of the Programme includes assessment of site compliance with good regulatory and vigilance practices. Key achievements include inspections of:

• Active pharmaceutical ingredient
• Medicine and medical device manufacturers
• Wholesalers
• Pharmacovigilance
• Clinical trial sites located both locally and internationally
• Inspection and monitoring of compliance with applicable legislations as mandated

On Programme 4: Medicines Evaluation and Registration, the purpose is to evaluate the safety, quality and therapeutic efficacy of medicines and register them for use as per delegated authority in terms of relevant legislation. The key achievements include evaluation of medicines required for HIV, TB and cancer together with new chemical entities (NCE) and biological medicines are being prioritized.

On Programme 5: Medical Devices, Diagnostics and Radiation Control, she reported that licensing of medical device establishments is underway. The work is split among 3 offices in Cape Town, Durban and Pretoria. Key posts that are not on the post establishment have been identified as critical and a strategy to fill those posts was developed.

Ms M Hela, Vice Board Chairperson, SAHPRA, reported that the major risk that could cause delay was the section 197 transfer and that an agreement has been reached with some of the unions on the transfer of workers. Corporate services assistance to capacitate SAHPRA’s procurement units is in process. She added that experts have been appointed to assist with complex applications dealing with radiation control. The industrial action at the Civitas building affected operations but if things go to plan SAHPRA should be able to relocate to the new building by December. She pointed out that a major challenge for SAHPRA is autonomy since it does not have its own bank accounts and is unable to make payments. The bank account is in the process of being transferred from NDOH profile to SAHPRA profile

Discussion

Mr Maesela referred to the recent Constitutional Court which now allows people to use cannabis, yet SAHPRA is supposed to regulate use of the drug. He asked how the powers of SAHPRA will be affected vis a vis the constitutional court ruling. He asked why SAHPRA was not considering acquiring a building since it wants a fit for purpose building.

Ms Kopane stated that she was excited about Programme 5 on oversight over medicine devices especially radiation equipment and asked SAHPRA to follow up on the medical devices especially in the public hospitals.

Ms Ndaba sought clarification on what exactly is happening at Civitas building.

The Chairperson noted that the question on the building will be directed to the NDOH since it is affecting the operations of SAHPRA. On the offices of SAHPRA being in Cape Town, Durban and Pretoria she asked whether it is possible to consider other regions.

Professor Banoo responded on the question of legalising of cannabis, mindful of SAHPRAs mandate. He said that there is some considerations that have to be addressed including the impact on the Drug Trafficking Act. The Court judgement provided for a 24 month period to achieve legalisation and the sooner the engagement begins the better. He noted that the Cannabis Group is beginning to strategise key amendments to be made to Sec 22 of the Medicines Act to accommodate the context of private use. It remains a concern what private use entails, there needs to be further considerations of quantities that people may be in possession of and age limits. He added that SAHPRA has written to the Speaker and it is preparing an advisory on the same which it can provide to the Committee.

Ms Hela added that SAHPRA is taking the deployment of personnel seriously. It has been invited for training Programmes and within the continent it is working with the African regulators body that works with clinical trials to help harmonise requirements. She confirmed that building a fit for purpose building is in the plan but it is considering renting because of the urgency. Three years gives it enough time to plan because at the moment it is not certain about the income stream.

Professor C Househam, Board Member,SAHPRA, added that SAHPRA and the MCC have always been based in Pretoria and that the three offices located in the regions relate to radiation control. He noted that radiation control comes under the Hazardous Substances Act and there is a need to amend the legislation because of the sharing of responsibilities between the nuclear regulator and radiation control. On some of the equipment in the hospitals not being fit for purpose, SAHPRA has contracted expertise on a temporary basis, in particular medical physicists, as it works to builds it capacity.

The Chairperson added that the judge raised key issues in his judgment and Parliament has been given a very strong responsibility .There has always been a view that dagga has serious health consequences but there is a problem of how to ensure the community understands and how to put a safety net for young people who may abuse it, She was happy SAHPRA had written to the Speaker. She thanked SAHPRA for the expertise and confirmed that the Committee would look into the  issue of the Civitas building.

 The meeting was adjourned.