The Government Employees Medical Scheme (GEMS) appraised the Committee on the scheme’s response to the findings of the section 59 interim report and the remedies which the scheme planned to implement. The Department of Public Service and Administration (DPSA) briefed the Committee on the successes and challenges regarding the implementation of the Government Employees Housing Scheme (GEHS) and its savings.
GEMS presented several findings from its report, and showed clear responses to the interim findings and progress updates. It reaffirmed its commitment to transformation and non-discrimination. The matter related to the inquiry into allegations of unfair racial discrimination and procedural unfairness by medical schemes.
The DPSA gave details of both the successes and challenges in its implementation of the GEHS. The introduction of the Individual-Linked Savings Facility (ILSF) has created a culture of savings by Public Servants. A number of employees utilise this facility to save towards homeownership. As at 31 March 2022, a total of R14 billion (R14 879 522 719.16) was saved in the ILSF by approximately 208 047 employees.
The Committee showed concern about the lack of diversity in the GEMS’s board, especially in regard to people with disabilities. Members asked questions about the Scheme's plans to tackle fraud, wastage and abuse. Systems and processes were being looked into by the GEMS to tackle the impression of racial bias.
Members were concerned over money being forfeited by GEHS members. They questioned why the GEHS was not able to verify Individual-Linked Savings Facility withdrawals and about the fact that there were members who were still receiving the old housing allowance amount, and not the new one. The GEHS, on the other hand, pointed out that there were public service policies that led to employees forfeiting their benefits under circumstances such as being found guilty of fraud and corruption. The scheme's current institutional form was preventing a lot of issues being addressed.
The Chairperson opened the meeting by providing the background on why the Committee had to meet. He said the Committee had had a joint meeting with the Portfolio Committee on Health to discuss the section 59 report, and were all astonished by the findings of the scheme, as it was found that the Government Employees Medical Scheme (GEMS) and other medical aid schemes had racially profiled black practitioners, leading to the practitioners not enjoying the same benefits as practitioners of other races when they claimed for health care services rendered. There were allegations of fraud, wastage and abuse in the medical scheme’s system. The GEMS was going to respond to this.
The Department of Public Service and Administration (DPSA) would then present on the successes and challenges of the implementation of the Government Employees Housing Scheme (GEHS).
Dr Chana Pilane-Majake, Deputy Minister, DPSA, said the challenges that the GEHS was facing was pulling out of its agreement with SA Home Loans. SA Home Loans continued to operate like a financial institution and was not in a position to allow for affordable and accessible housing to government employees. She highlighted that the GEMS was running at its maximum potential, and had a surplus in previous financial year.
Presentation by Government Employee Medical Scheme: response and progress on addressing section 159 interim report
Dr Stan Moloabi, Principal Executive Officer, GEMS, greeted the Committee, and introduced Mr Mpfariseni Phophi, Deputy Chairperson of the GEMS Board.
The GEMS’s threefold response to the allegations included:
1. Intensive healthcare provider engagements.
2. Investigating fraud, waste and abuse policy through looking at processes and practices and anything in the database that had to do with fraud, waste and abuse.
3. Starting an engagement process with stakeholders; engaging the Ministry of the DPSA to update them on what they were doing; engaging various health provider associations; and adopting an open door policy that was ongoing with the various advocacy groups.
Dr Moloabi said that the GEMS was committed to transformation, and its commitment was backed by the objective numbers in slide six of the presentation. Being transformative meant that GEMS aimed to forward the country’s constitutional aims of transformation, was committed to bringing about much-needed positive socioeconomic transformation, and encouraging increased participation of black people.
The main complaints prior to the section 59 report were about:
- The aggressive, impersonal, and threatening nature of communication regarding the allegations.
- The blanket approach described as a one size fits all, that lacks nuance.
- The lack of clinical understanding by the medical schemes which resulted in the schemes not being able to determine the appropriateness of care.
- The Medical schemes requesting confidential patient information to be disclosed.
The respective responses to the above complaints were:
- Service providers were no longer subject to “investigation”. All correspondence made it clear that their claims were being reviewed.
- Letting go of a blanket approach, and each case being considered on its merits for a tailored approach.
- Engaging with in-house specialised medical practitioners during investigations and sourcing external opinions from societies and provider groups.
- GEMS requesting claims information to verify services rendered. Detailed confidential patient notes were not required.
Notable findings of the report were:
The detection systems employed by Discovery, GEMS and Medscheme all use algorithms to flag providers as so-called ‘outliers’. Dr Moloabi noted that while there was bias in the outcome of the algorithms, there was nonetheless no evidence that the bias was intentional. GEMS’s response in this regard had been to look into the system. The Allegation Assessment Standard Operating Procedure (SOP) was amended to this effect. They found that there was no input that had anything to do with race. They had strengthened the level of expertise for those who had to do analysis at the human level to ensure that the outcome of the investigations was informed by expertise.
All administrators request confidential patient information from providers, but the justification for the request varies between administrators. GEMS’s response in this regard was to request beneficiary information to verify services rendered. Detailed confidential patient notes were no longer required. They had referred this to the Health Professional Council of South Africa (HPCSA). Training sessions were conducted on the Protection of Personal Information Act (POPIA) for employees involved in the management and administrators.
A comment from the report was that the complaints of racial discrimination must be taken seriously by the schemes and administrators. GEMS’s response to this had been to regard the complaints in a serious light. An open door policy was followed in respect of engaging with healthcare providers.
In conclusion, Dr Moloabi stated that the GEMS supported economic transformation, and this included prevention, detection and responding effectively to corruption and fraud. In responding to the Section 59 Inquiry Interim Report, the GEMS acknowledged that it existed in a country and society where inequality prevailed. He reassured the Committee that the GEMS was committed to playing a role in addressing systemic inequality though leveraging stakeholder relationships, and was interested in training new providers and improving communication.
They did not know when the final report would be released, but they awaited it and would respond accordingly to it once it was out.
Presentation by Department of Public Service and Administration: on the success and challenges regarding the implementation of the Government Employees Housing Scheme and its savings
Deputy Minister Pilane-Majake invited Ms Yoliswa Makhasi, Director-General: DPSA, to present the GEHS report. Ms Makhasi introduced Mr Dumisani Nkwamba, Chief Director: Micro-benefits, who would be presenting the presentation. She highlighted that the work that was being done on the GEHS was affected by the discussions and the resolutions of the Public Sector Summit that had been held between labour and government in March of 2022. One of the decisions there was the need for a new institutional form to drive the work of the GEHS, and there was a need for new GEHS packages that were friendly and affordable to employees. This was being engaged with National Treasury, the Government Employees Pension Fund (GEPF), and the Department of Human Settlements (DHS). The Department had received a period of a year to deliver on these objectives. There were changes that would be happening, and the DPSA was working around that and rolling out the system around that. She handed over to Mr Nkwamba to take the Committee through the briefing.
The three areas that Mr Nkwamba spoke on were the GEHS savings, the successes and the challenges.
Notable points on the savings:
1. The introduction of the Individual-Linked Savings Facility (ILSF) had created a culture of savings by public servants. A number of employees utilised this facility to save towards homeownership.
2. A total of R14.8 billion had been saved in the ILSF by approximately 208 047 employees as at 31 March 2022.
3. An amount in excess of R300 million was being deposited by public service employees into the ILSF monthly.
4. R700 million had been forfeited by employees due to non-compliance with the Public Service Co-ordinating Bargaining Council (PSCBC) Resolution 7 of 2015. The forfeiture was due to employees being dismissed or resigning.
5. The GEHS had appointed a service provider to conduct research during this financial year on the possible effective use of ILSF savings and forfeited funds to the benefit of employees. Mr Nkwamba added that whatever the outcome of the research was, the outcome would be governed by processes in relation to the Public Finance Management Act (PFMA). National Treasury had the financial say over the matter.
Notable successes included:
1. Many government employees were aware of the GEHS services through information and outreach sessions held country-wide with national and provincial government departments, as well as certain entities.
2. There were challenges, but it was worth noting that between 2015 and 2022 the provision of housing access to government employees had improved.
3. The housing allowance amount had increased from R900 to R1500.
4. The number of employees eligible for housing allowances, but not receiving the allowance, had dropped from 305 193 to 204 270. To address the decrease, the GEHS team had embarked on a campaign to speak to the departments where there was a high number of employees who were eligible but were not receiving the allowance, to ensure that the anomaly was corrected.
5. The number of employees still receiving old housing allowances had dropped from 44 530 to 6 457.
6. The number of employees receiving housing allowances as home owners had increased from 352 103 to 743 895.
7. The GEPF/Public Investment Corporation (PIC)/DPSA and SA Home Loans partnership assisted approximately 24 817 government employees with home loans to the tune of R16.5 billion. This was more than the R5 billion facility loan offered by the PIC.
8. The GEHS had embarked on a process to identify government employees who forfeited their savings not through a fault of their own, but due to human resources (HR) processes failing them. A total of 3 262 names were submitted by national and provincial departments, and a process was under way to seek approval to pay out these employees.
He referred to the memorandum of understanding that was entered into by the Department and the National Housing Finance Corporation with regard to the subsidy that was offered generally to citizens in the country, but said the memorandum extended the subsidy programme to government employees. He indicated that employees earning between R3 500 and R22 000 per month were eligible for the Finance-Linked Individual Subsidy Programme (FLISP) subsidy.
Mr Nkwanda provided details of the noteworthy challenges.
The GEHS was now a directorate comprised of two directorates -- the Housing Scheme Administration and Customer Services, as well as Stakeholder Management. This in-house model posed a challenge in that the DPSA was not better positioned in delivering certain services that would require registration with existing statutory compliance, like the Financial Sector Conduct Authority (FSCA), inadequate existing systems, and technology know-how and capability in certain cases, like mortgage origination.
There was a high level of indebtedness of employees which impeded their access to home-ownership. GEHS was looking at opportunities to address the challenge. The GEHS had partnered with National Treasury to deal with this challenge.
The most difficult challenge was the current funding model, with SA Home Loans not being able to resolve the issue of high interest rates. This inability to lower interest rates defeated the GEHS’s purpose of assisting government employees to access affordable homes with better interest rates. The GEHS had not been able to deal with this matter. There had been an undertaking to engage the Public Service Coordinating Bargaining Council (PSCBC) working committee, the GEPF and the PIC to create a new funding model that would ensure that the GEHS could properly deliver on its mandate.
Poor implementation of the Standard Operating Procedures (SOPs) on the administration of enrolment applications and housing allowance applications by HR practitioners at both national and provincial departments posed a challenge. Circulars had been issued to government departments in this regard.
The GEHS was unable to verify ILSF savings withdrawals due to capacity constraints, as they were submitted directly to National Treasury. GEHS had been engaging National Treasury to monitor and assess this area.
Mr Nkwanda referred to the GEHS’s way forward, saying the consultative committee at the PSCBC was playing a crucial role in addressing the current challenges. The current organisational form of operating as a unit of DPSA was being attended to at the highest level of the Department. The process of developing a roadmap that would set out a clear path for the GEHS to include transitional measures leading to the termination of the service level agreement with SA Home Loans was under way.
Deputy Minister Pilane-Majake commented that the presentations made today were the two reports that the Department was putting before the Committee. She also clarified that the idea of appointing a service provider for IFLS, as per the GEHS report, was a new idea that had not been finalised, as well as the idea of bringing in the presidential infrastructure programme on housing.
Ms M Ntuli (ANC) asked the GEMS what it was that was initially lacking that had led to the inequality. Was it perhaps because the health providers did not have the same background? If so, were there any platforms for them to have uniform courses or training? She asked whether GEMS had a yardstick to assist them in checking whether the status of equal treatment was running smoothly, given the complaints. Could GEMS tell the Committee the specific parts of the complaints that had been improved upon, and could they attest that they were indeed working?
She asked GEHS what would happen to the application of a member who applied for the scheme, had been contributing to the scheme and perished while the person was in the process of applying, but their application was not through. How could someone forfeit something that they had been contributing towards? Could the GEHS elaborate on their view on forfeiture? What solution did GEHS see for the forfeiture? Was there a strategy to overcome the backlog in housing allowances? Why were there still people receiving the old allowances, whereas new allowances had been approved?
Ms M Kibi (ANC) said that given the GEMS’s findings in their investigation that there were claims that were made for services that were not rendered, she asked whether there were health practitioners who colluded with the patients that they claimed on behalf of? What was the turnaround time for processing claims for health care providers? What was the current payment backlog of healthcare claims? Could this be categorised in terms of race? Did the GEMS investigate and reprimand the officials who were found to be behind the racial profiling after the release of the section 59 report? What had been improved to change the status quo, given the allegations that schemes and administrators were unfairly discriminated against in the implementation of section 59 of the Act?
She asked GEHS for details of the R700 million forfeited by employees due to non-compliance with PSCBC resolution 7 of 2015. Why was it savings, and also forfeited to the state? Could service providers conduct research on the possible use of ILSF savings to the benefit of employees? Would the government and the Department honour the recommendations by a service provider to conduct research during this financial year on the possible effective use of the ILSF and forfeited funds to the benefit of employees? Why were there still employees receiving old housing allowances? Could this not be reviewed and rectified?
Ms C Motsepe (EFF) asked whether the GEMS board had disabled persons as members. She highlighted the fact that there was a tendency by local pharmacies to reduce tablets in the boxes. When people made the discovery of the reduced tablets at home, the pharmacies would always say that it was a mistake. She asked for this to be investigated. She saw this as fraudulent behaviour. It had been reported that GEMS used to have a million members -- what problems had led people to leave the medical scheme? She asked the GEHS why members forfeited the money that they had been saving, was due to them, and that they were expecting. Did people who passed on while they had money saved with the scheme forfeit their savings? What consequences were there for human resources staff that did not do their work properly and this negligence resulted in employees losing their money?
Ms S Maneli (ANC) noted the transformation of the GEMS’s board and acknowledged the gender balance in the board’s composition. She asked the GEMS for clarity why disability was not covered. How did the GEHS plan to resolve their inability to verify withdrawals on ILSF, as they were submitted directly to National Treasury? How did the Department plan to fix its situation, seeing that it currently did not comply with the financial sector conduct authority's regulations regarding mortgage organisation? Would the GEHS not be encroachment on the banking sector’s area of operation if it registered to comply with the financial sector conduct authority?
Dr M Gondwe (DA) asked the GEMS which of the interim findings that were contained in the interim report did not merit action. She was of the view that all findings found in an investigative report merited some form of action. Would the engagements between the scheme and health providers, as a result of GEMS’s open door policy, come to an end or would they be a continuous thing? It was important that there be continuous engagement between the GEMS and service providers to ensure that there was no misunderstanding on how the scheme operated. The first complaint in slide ten of the GEMS’s presentation referred to complaints against aggressive, impersonal and threatening natures of communication. The scheme had responded to that by no longer subjecting claims to investigation, and the correspondence just states that: “The claim was under review.” Why was the response not called an “investigation,” but was treated like an investigation? It was important to use terminology correctly so that it reflected how the process was going to be treated.
She asked GEHS how it planned to consider each case on its merits, as per its response to the allegation that it used a blanket approach to employees forfeiting money. How was it able to use the tailored approach? Was human intervention involved in this approach?
She asked the DPSA what they constituted as“forfeiture.” She raised concern over the fact that the resolution penalised the employees and made them lose their hard-earned earnings and savings. She welcomed the fact that research would be conducted on the effective use of the forfeited funds. She was comforted by the fact that employees who forfeited their money due to human resources processes had been identified and a process was being looked into to pay them out. How soon would they be paid out? How had they been identified?
Ms T Mgweba (ANC) apologised for not being able to follow the meeting properly as she had network issues. She asked GEMS whether all stakeholders had been consulted when developing the response plan for the section 59 report. If so, how would it minimise the abuse of section 59 of the Act? What had been done to strengthen systems to prevent GEMS members and health providers from colluding to commit wastage, fraud and abuse?
She asked the GEHS how they planned to resolve their inability to verify ILSF withdrawals, given the fact that they were submitted directly to National Treasury.
Response by the GEMS
Dr Moloabi responded on whether GEMS could tell what was initially lacking that lead to inequality, and replied that they had wanted to look at the interim report objectively and not be defensive. They could pick up on their shortfalls, but were looking at improving on them. He explained that all claims were treated the same when GEMS received them, as the claims came labelled as practice numbers and they could not tell who the claim was from. There was no intention to treat claims unequally.
On whether there were any platforms for healthcare providers to have uniform courses or training, he replied that training could have influenced it. GEMS trained doctors with practice management when they became private practitioners. Claiming from medical schemes was not taught at medical school. However, once a doctor was part of the GEMS’s provider network, they became part of the provider relationship unit where GEMS constantly meets with doctors and talks to them about issues relating to claiming.
On whether the GEMS had a yardstick to track the status of fair treatment, he reassured the Committee that that the GEMS treated all healthcare providers equally. It was their constitutional duty. It did happen that in the processes and systems that the GEMS had used to identify the outliers that the majority of people being investigated happened to be black. The report showed bias in the outcome, but it did not show proof of intent to racially discriminate against anyone. One needed to understand the interim report in the context that there was no intention to racially discriminate against anyone, despite there being bias in the outcome.
On whether the GEMS could tell the Committee whether there were specific parts of the complaints that had been improved upon, and they could attest that they were indeed working, he replied that the presentation had addressed this. GEMS looked at the policies, processes and standard operating procedures and compared them with the interim findings to look at areas that they could improve upon. It was a general approach of overall improvement.
On whether there were situations where the GEMS saw that there was a definite racial bias, he indicated that the GEMS processes did not identify race. The processing of claims was dependent on practice numbers. The important thing for them was to address the issues brought up by the report.
On the turnaround time for the payment of healthcare professionals, he replied that more than 95% of claims were paid within 30 days. The other 5% were usually claims that had queries, where matters needed to be clarified. The Act required claims to be paid within 30 days.
On whether the GEMS reprimanded officials who were found to be racially biased against black healthcare professionals, he said that no official had been found to be racially biased. He explained again that racial bias was found in the outcome of the processes used by the GEMS, but there was no intention to be racially biased. As a result, there was no specific official that needed to reprimanded.
On whether the board had persons with disabilities, he explained how the board was chosen. The board of trustees had 12 individuals, six whom were appointed by the Minister of Public Service and Administration and were chosen based on the scheme rules and the provisions of the Medical Schemes Act 131 of 1998, which require the elected members to have certain specified skills. The other six were elected by the members of the scheme in an election processes. He hoped that explaining how the board was chosen would answer the question on how it was constituted.
Regarding the allegations that tablets were reduced in local pharmacies, he said that the situation was a bit difficult and that the GEMS tried its best to ensure that they responded to fraud and wastage through educating their members. Investigations could happen only when there was evidence. There needed to be collaboration between members and the scheme so that the scheme could assist and engage with the pharmacies. The scheme being a third party payer unfortunately made room for fraud, wastage and abuse to take place, as they relied on claims and could not see what the members actually received.
On GEMS no longer having more than a million members, and what had happened to the members who had left, he assured the Committee that GEMS had not lost members. It had over 770 000 principal members. They were the scheme that continued to grow despite facing economic pressure. The scheme had over two million beneficiaries. GEMS had even gained members during the COVID-19 period, even though other schemes were losing members.
On why there were findings that merited action and those that did not, he replied that the investigation at hand was an inquisitive investigation that had led to an interim report. They had been given a chance to respond to the interim findings as they awaited the final report. They did not know whether the panel that investigated this would change their findings once they heard the GEMS’s response. What they meant by “some findings merit response” was that some questions had been addressed in the report, but the findings may change and would be responded to accordingly.
On GEMS’ open door policy and whether the engagements resulting from that policy would continue or end, he replied that they already had a provider relations unit prior to the section 59 report. They were engaged with healthcare providers all the time. They met with advocacy groups regularly. However, there were groups who had complaints, and those complaints had to be addressed. The open door policy was an extra-effort, on top of the work that they were already doing, aimed at addressing the complaints that had been made.
On terminology and not using the word “investigation,” he explained that the idea of using different terminology was to use terminology that did not insinuate that a person had done a certain thing and that it did not potentially taint the person who was under investigation. It sounded better when the term “investigations” was not used. The outcome based on evidence would be directed by law and policy at the end of the day.
On the blanket approach, he replied that the revised approach was saying that they were investigating the fact that GEMS was not saying that healthcare professionals in general defrauded the medical schemes -- that was not the case. The overwhelming majority of healthcare professionals were submitting honest claims. There was a small percentage of those who defrauded.
On whether all stakeholders were consulted when developing the response plan for the section 59 report, he replied that they had consulted and taken counsel from the ministry and the Deputy Minister. GEMS was a product of the PSCBC, and they consulted extensively at the Bargaining Council. There was a GEMS PSCBC working committee that always addressed the issues and the work it did. It reported regularly at this forum.
On what had been done to stop fraud, wastage and abuse from recurring, he replied that the systems that did the algorithms and the claims trends analysis had been looked at. Senior GEMS officers had been allocated to analyse what came out of these systems. There was a slide in the presentation that alluded to that. They had looked at the policies and processes. They had revised their SOPs in consideration with what had been said in the report.
Deputy Minister Pilane-Majake gave the platform to the GEHS to respond to questions. Before handing the platform over, she added that the Department had actually considered all the concerns being expressed. The Department would continue to monitor discriminatory practices. The practices within the scheme, the procurement, claims, and representation in the leadership, would be continuously monitored. More vetting would be done with appointments in order to nip future corrupt practices in the bud. When talking about the outcome of bias in the report, understanding it in the light that the outcomes showed bias with hidden intent to discriminate, would help the Department to actively work on the problem. It would be sad to see black people experiencing oppression under their guard, considering how hard black medical practitioners had to fight to thrive in the industry. Statistics would help the Department understand the implications of these issues and their role in improving the lives of South Africans.
When it came to bargaining for medical practitioners, one must consider that they were not actually represented at the PSCBC, which was why one often found that issues that directly affected them were left unaddressed. The Department had heard the Committee’s sentiments -- it was in the Department’s interest to ensure that the scheme operated in a manner that was representative of its members and beneficiaries.
On GEHS funds being forfeited, she said that they needed to look at it from the perspective of the Public Service Regulations. There were public service policies that led to employers forfeiting their benefits under circumstances such as being found guilty of fraud and corruption. These measures were used as a deterrent to limit corruption in the public service.
Ms Kelly Mkhonto, Director: Intergovernmental Relations, DPSA, noted that most Members had asked questions about the forfeited funds and the payment of old allowances. On the forfeited funds, this was governed by a resolution that was assigned by both government and labour. Labour agreed on some of the conditions that were put into the PSCBC resolution 7 of 2015. One of these resolutions was that the employees would forfeit their funds if they quit or were fired. The sole purpose of introducing the ILSF was to encourage government employees to purchase houses and to introduce a culture of saving. A number of government employees were able to access their savings and buy houses since the facility was introduced.
On the issue of some employees receiving the old housing allowance, she replied that employees had been encouraged to register when this was introduced in 2015 -- the housing allowance was not an automatic benefit, it had to be applied for. When HR practitioners were on board, employees were encouraged to fill in the forms and enrol on the GEHS system. It was found that the HR practitioners did not educate the employees properly, nor did they help them fill in the forms properly. It was often the case that those who were receiving R900 continued getting it, but did not sign an application when the resolution was signed in 2015, and had ended up losing on the savings. They were losing out on the R1 500 increase. Lack of awareness, lack of education on the scheme, and lethargy could also be factors in people not wanting to continue with the benefit. Those who joined the public service after 2015 received the full R1 500 and could access it when they were ready to buy houses. The Department was on a road show to educate employees from different departments in different provinces, as this had been identified as a problem.
On what happened to the savings of GEHS members who passed on, she replied that circulars had been issued and departments had responded. Required documents that included identified beneficiaries had been submitted to HR, and the department was trying to rectify the anomaly of not enrolling employees. It was not due to the fault of employees -- they were just not educated about the process, and they could not be penalised by not having access to their savings. The savings belonged to them and were rightfully theirs. Only employees who had been dismissed or had resigned from the public service forfeited their funds.
On the GEHS not being able to verify ILSF withdrawals, she replied that the Department would be able to attend to a number of areas they were unable to address once the GEHS’s institutional form had been finalised. They were unable to address the issue of mortgage origination.
On whether the GEHS would not be encroaching on the banking sector’s area of operation if it registered to comply with the financial sector conduct authority, she replied that one would be able to do mortgage origination and counsel those who were in debt if one was in good standing and qualified for the registration. These issues would be properly addresses once the GEHS’s institutional form had been finalised.
Mr Nkwamba took over to answer some questions.
On the service provider conducting research regarding the effective usage of forfeited funds, he responded that there would be an internal departmental process to deal with that, and the Committee would be updated on the process once it was concluded.
On how soon payment would be effected for those who exited the scheme, he indicated that the Director-General had already signed off the processes for such payments to be effected. The scheme was just waiting for National Treasury to finalise the processes on their side in order for payments to be effected.
Ms Mkhonto addressed the question of compliance with the Financial Sector Conduct Authority (FSCA), she highlighted that the current work of the GEHS was done within the Department. There was a chief directorate in the DPSA doing the work. The home loan issues were managed via the Department’s contract with SA Home Loans which had been signed years ago. The Department was not required to meet any FSCA requirements at this stage of its operations because of the level of engagement. However, there were talks of the GEHS being a standalone entity. This was being worked on with Treasury and other related parties. The standalone entity would introduce various home loan packages. Labour had indicated that it wanted government to be responsible for this work, and that the work should not be outsourced to financial sector institutions. Outsourcing added a cost to the loan and they became unaffordable to employees. Once the Department reached the formation stages of the entity, they would deal with how such an entity related to the financial conduct issues, and what responsibilities the entity would take. The Department was not in non-compliance with anything at this point. However, there must be compliance with certain financial conduct authorities in future once the GEHS moved into an entity.
She directed the question of resolving GEHS’s inability to verify withdrawals to Mr Nkwamba.
Mr Nkwamba said that Ms Mkhonto had addressed this matter. The discussion concluded.
The Department’s delegates were excused from the meeting.
Report of the Portfolio Committee on Public Service and Administration on the Oversight Visit to the Gauteng Province from 19-22 April 2022
The Committee turned its the report on the oversight visit to the Gauteng province from 19 to 22 April, dated 25 May. Mr Julius Ngoepe, Content Adviser, took the Committee through the report.
He said that the main purpose of the oversight visit had been to oversee the Gauteng Province in terms of numerous areas, such as service delivery improvement plans (SDIPs), Thusong Service Centres, disciplinary cases, and 30 days’ payment to service providers. Service delivery was at the centre of all the identified issues.
Notable observations and key findings of the report included the following:
- All the Heads of Departments (HODs) participated during the first day meeting to discuss the 30-day payment of invoices, disciplinary cases, SDIPs, Thusong Service Centres and service inspection reports by the Provincial Public Service Commission.
- The Committee had emphasised the importance of the Office of the Premier in strengthening coherent planning, coordination and monitoring performance of the provincial departments in delivering services to citizens.
- Provincial departments were not meeting time frames in finalising disciplinary cases, and these were costing government billions of rands whilst employees were suspended with full pay.
- There was a need to reduce red tape in approving submissions related to the disciplinary cases. The Department of Health and the Department of Infrastructure and Property Development had the highest backlog of invoices paid after 30 days. Regression of both departments had contributed to the substantial provincial decline of 28% in performance. Both departments owed R3 billion on unpaid invoices.
- There was a lack of consequence management for non-compliance with the 30 days’ payment. The province had to urgently attend to duplicate payments, payment delays and inaccurate accruals of the identified departments.
- Failure to pay service providers on time impacted negatively on service delivery. The Committee applauded the province for establishing war-rooms to deal with outstanding invoices to service providers.
- The Committee took note of a progressive submission rate and compliance with SDIPs, but it was concerned about non-compliance by the Department of Health and the Department of Roads and Transport.
- The Committee noted that some departments were not prioritising the SDIPs as part of the business process to enhance service delivery.
- There were some inconsistencies in developing credible, effective reporting and realistic SDIPs and their submission by the DPSA. This happened as a result of lack of monitoring of the SDIPs by the DPSA.
- The Committee noted with dissatisfaction that some Thusong Service Centres around the Province had been changed to service shared centres under the municipalities due to inadequate funding.
- Of all 14 Thusong Service Centres in Gauteng province, only two had centre managers. Funding and lack of connectivity were the main major impediments towards the success of the noble idea of Thusong Service Centres as a delivery model.
- Aging infrastructure, which was not well maintained, in the public healthcare centres needed urgent attention by the National and Provincial Health Departments across the province, particularly at Alexander healthcare clinic in order to avoid future disasters.
- Shortage of staff in healthcare clinic impacted on the quality of the healthcare services in the province. This was due to the limited budget, with some hospitals operating at 50% capacity.
Notable recommendations included the following:
- The DPSA should consistently monitor and assess effective implementation of approved SDIPs to be in line with departmental annual performance plans. The DPSA should intensify its efforts to address identified bottlenecks on the SDIPs and ensure resources were allocated to this activity.
- The Department of Health should frequently monitor service delivery improvements and develop improvement plans.
- The DPSA, the Department of Cooperative Governance and Traditional Affairs and the Government Communication Information System (GCIS) should conclude a long standing matter of repositioning the Thusong Service Centres in order to bring this issue to finality and ensure services closer to the people.
- The provincial Department of Health and the Department of Infrastructure and Property Development should, through the war rooms, work towards reducing the highest backlog of invoices paid after 30 days.
- The Office of the Premier should ensure all the SDIPs submitted to the DPSA were integrated or linked to the strategic planning process of the departments.
- The Gauteng government should reconsider re-establishing Kempton Park Regional Hospital to ease pressure on Tembisa Tertiary Hospital.
Mr Ngoepe concluded the report and the Chairperson asked the Members to share their views on it.
Ms Kibi was of the view that the report captured everything done by the Committee. She noted that going out to do the oversight had been a good call. Doing oversight encouraged service delivery. Often what was found in written reports did not reflect what was happening on the ground.
Ms V Malomane (ANC) expressed support for the report. It was a true reflection of what had happened during their oversight visit. It was important to assess that what was happening on the ground was reflective of what was stated in the report.
Ms Mgweba agreed with Ms Malomane, and supported the report being tabled before Parliament.
The report was endorsed and adopted by the Committee.
The meeting was adjourned.
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