Department of Health Annual Report 2021/22

Meeting report

Opening remarks

Dr Keith Cloete, Head of Department, Western Cape Department of Health, said this was the fourth year that the Department had received a clean audit. Each year brought an improvement in performance. The relationship between the Department and the Auditor-General (AG) had been deepened and responses to findings were taken very seriously. He paid tribute to all the healthcare workers who worked tirelessly during the Covid-19 pandemic. More than 200 were lost due to the pandemic.

Dr Nomafrench Mbombo, Western Cape Minister of Health, said the audit committee had a new chairperson. She said the Department worked hard at not exploiting the public purse. The report reflected two years of the pandemic, and the team had worked as hard as it could under those circumstances. Irregular expenditure was being monitored, as requested by the AG. 

Annual Report 2021/22

The annual report said there had been service delivery challenges. With the onset of the COVID-19 pandemic in early March 2020, the country was placed under a national state of disaster, which continued until April 2022 and included various lockdown levels. By the end of March 2022, the country and the province had experienced four waves of COVID-19, each driven by a different SARS-CoV-2 variant, with the third and fourth waves occurring during the 2021/22 year. While the third wave, driven by the Delta variant, was quite severe, the fourth wave, driven by the Omicron variant, was not as bad, and only level 1 lockdown restrictions were applied. This was ascribed to a combination of COVID-19 vaccinations and prior infections, building up a degree of protection in the population against severe disease and death. By the end of March 2022, the province had experienced approximately 665 000 COVID-19 cases and almost 22 000 deaths.

COVID-19 took a major toll on staff, with a high level of infections frequently resulting in severe illness and, sadly, some deaths. Absenteeism was high due to the need to isolate and quarantine, which increased the strain on the already exhausted staff who needed to take over the activities of their ill colleagues. Absenteeism levels, however, decreased when the isolation period was reduced to seven days and the need for quarantining was removed in January 2022. Staff attrition was high at the temporary COVID-19 vaccination sites, because contracts were only for short periods, as long-term contracts could not be provided within the approved funding envelope. This led to a need for continuous recruitment and selection processes to ensure the vaccination sites were adequately capacitated. Subsequently, COVID-19 vaccination has been incorporated into the basic services provided at health facilities.

Utilities cost-saving

The report outlined various strategies for reducing water and electricity costs:

• There would be continuous monitoring of utilities consumption, identification of problem areas and utility-saving interventions. 

• There would be a focus on completing the installation of smart meters and stabilising monitoring systems for facilities.

 • There would be continuous engagement with municipalities to ensure correct billing. 

• Facility managers would be assisted in reducing consumption of municipal water by identifying opportunities for recycling water, increasing use of groundwater and eliminating water leaks. 

• Sub-metering would enable closer monitoring of electricity and water consumption and enable billing of other users, for example in leased areas,

• There would be interventions to change behaviour in using electricity and water.

• Smart metering data would be used to conduct energy efficiency audits of facilities and feasibility studies of energy management opportunities.

Discussion

Members discussed Part C of the annual report.

Mr D America (DA) congratulated the Department on its overall achievements. Referring to page 133, he asked for more details on the special and ad hoc investigations. 

Mr M Xego (EFF) referred to page 126. With limited staff, what were the Department’s interventions to address high medico-legal risks?

Ms N Nkondlo (ANC) referred to strategic risks. How big were the risks and what measures had the Department put in place to address them. Regarding the built environment, what were the Department’s responses to issues involving loadshedding and water restrictions at healthcare facilities? Regarding the reference on page 128 to minimising conflicts of interest, how strong were the departmental control measures?

Ms R Windvogel (ANC) referred to page 130. How did the compliance controls fail to pick up irregular expenditure? Regarding page 138, could the Committee get quarterly reports from the Provincial Treasury on B-BBEE compliance and ownership details of service providers?

Mr America asked if Ms Windvogel’s request for information on service providers should not be dealt with as a resolution by the Committee.

Mr Xego said the issue was whether there was compliance with B-BBEEE and whether proof could be provided.

Responses

Dr Cloete responded to questions about risks. Staff burnout and medico-legal risks were identified as high risks. A risk committee conducted rigorous monitoring of all the risks and the effectiveness of steps taken to mitigate them. Extreme risks involved further oversight and reporting.

Staff burnout was taken very seriously and there was an employee wellness centre. In addition to a provincial government tender for the provision of health services to all departments, there was a second one catering for the higher needs of the health department. There was also a vibrant in-house team to support staff and their mental health. The early signs of burnout were identified and addressed immediately. There was also a staff satisfaction survey.

A medico-legal unit in the Department advised on cases and how to address them. External entities had praised the performance of the unit.

Regarding fragmentation of services in Cape Town, the residual risk was moderate due to collaboration on facilities with the City of Cape Town. Work was being done on aligning the facilities of the city and the province.

The health facilities had an array of interventions to mitigate risks involving loadshedding and water supplies. For example, the Groote Schuur, Tygerberg and Red Cross hospitals had had agreements for the past four years with the City of Cape Town that they would be spared from loadshedding up until level 6. At the lower end, rural clinics were supplied with solar panels and inverters. Bigger facilities had generators. Negotiations with Eskom had resulted in loadshedding exemptions for the following hospitals: Somerset, Mitchells Plain, Mowbray Maternity, Victoria, Karl Bremmer, Westbury and George. Exemption for Khayelitsha Hospital was under discussion with Eskom. The goal was to exempt many more hospitals.

All water-saving targets had been met. The systems put in place for effective usage included boreholes, water meters and reverse osmosis.  

Mr Simon Kaye,  Chief Financial Officer, Western Cape Department of Health, responded to the question about ad hoc investigations. These involved referrals from the Public Service Commission and complaints made directly to Dr Cloete’s office. There was a unit that handled investigations, but what would need to be investigated was unpredictable.

In the built environment, external factors created difficulties, such as the cost of maintenance at facilities, contractors for specialist work and the cost of infrastructure, amongst several others. Things needed to be prioritised in the built environment.

Regarding conflicts of interest, several agencies did background checks on staff for the AG. The AG then alerted the Department and action was taken against these individuals.

Regarding irregular expenditure, detection controls were working and warning signs were picked up. 

B-BBBEE information was required to be reported to the B-BBBEE Commission. Details on individual providers would be found at the provincial and national treasuries. 

Ms Nkondlo asked if the Department had a current B-BBBEE certificate showing compliance. What would be the stance on managing compensation of employees (COE)? How was balance obtained between the fiscal aspect and the service delivery aspect?

Mr Xego asked whether litigation was the cause of additional costs in the Department. What were the risks that the risk committee dealt with?

On the COE issue, Dr Cloete said it was a global phenomenon that resources did not match escalating needs. The resources given to the Department were utilised optimally for the best outcomes. Staff too, had to be protected to obtain optimal performance from them. COE limitations were taken seriously, and the wellbeing of staff was taken very seriously, too. The balance between the two was central.

Risk management was the responsibility of the senior management team. Risks were identified by the risk committee and brought to the attention of senior management. The system for dealing with medico-legal risks was the most advanced in the country. There was inhouse capacity, legal services capacity and state attorney capacity. The costs did not fall completely on the Department. 

Dr Saadiq Kariem, Deputy Director-General: Health Services Delivery, said the Department had complied with the B-BBBEE requirements. The template and letter would be supplied to the Members.

The Minister said that she had been to Khayelitsha to address the mental wellbeing of staff. COVID-19 has impacted their wellbeing immensely. Another crucial factor was staff being assaulted and disrespected. Load shedding affected staff in their homes as well. The Department was very transparent with its staff about its budget. The wage bill might present challenges and is undetermined at the moment.

Further Discussion

Members discussed Part E of the report.

Mr A van Der Westhuizen (DA) referred to the report on health facilities management on page 222. There was underspending of 12 percent. Page 224 showed underspending of R6 million on the health facility revitalisation grant. Was this a provincial grant or a national grant? To what extent could there be an improvement in health facilities post-COVID? Was the underspent money lost? Was there existing software for inventory? Would the Department’s system link with that of the AG when it came to inventory?

Mr America referred to the high audit cost of R22,5 million. Was this the cumulative total for one year? He asked for an update on contingent liabilities. Regarding the medical bursaries on page 245, could there be more information on prescribed debt? Regarding the internal audit report review, could there be an update on the IT security environment?

Mr Xego referred to a report on page 240 on aid assistance not received. Can there be an explanation for this? Regarding irregular expenditure of R42,9 million mentioned on page 256, what was the outcome of this?

Ms Windvogel referred to page 221. How much of the Department's budget was taken from the provincial reserve to respond to the pandemic during the year under review and how much was spent? Regarding page 222, why was the postgraduate programme not accredited and what was the update on relief staff and how many would be appointed?

The Chairperson referred to the AG’s report on page 2 on under expenditure. Could there be more information on this? Regarding clinic infrastructure, why were some clinics not built? Was there any separate audit of personal protective equipment (PPE) procurement? Could there be more information on the irregular expenditure shown on page 296?

Responses

Dr Cloete responded to Mr van der Westhuizen. The question that the Department was focussing on was “will things improve post-COVID?” The team was focussing on two risks that had been identified as high, the main one being ICT. The Department was working on its IT strategy with the provincial government’s Centre for e-Innovation (CeI) and the State Information Technology Agency (SITA). Significant risks had been mitigated by safeguarding resources.

In response to Mr Xego, he said the aid assistance was a technical issue and involved government money.

Regarding expenditure, Mr Kaye said that during the COVID-19 pandemic, some clinical services were prioritised, and others were postponed to a later date. Maintenance of health facilities had to be pushed back, and the priority was to create vaccination centres. This accounted for the under-expenditure on infrastructure. The money saved on infrastructure could be used later by the Department. 

The remainder of R80 million that was not used in the budget for programme one was surrendered. There was around R156 million in conditional grants, and this would serve as a buffer if there were any pressures during the current year. Underspending was not bad if it resulted from saving.

The high audit costs were because the different waves of COVID created uncertainty within the Department and pushed it further into debt. The AG was asked to do two PPE and sector audits. The 2020 audit was delayed and pushed to 2021, which delayed the work for the 2022 year.

The aid assistance involved a government-to-government aid agreement. The money from the US had to go to National Treasury, then the Provincial Treasury and then to the Department. There were various processes.

Regarding the irregular expenditure of R42 million, internal controls and consequence management systems needed to be enhanced. Not all irregular expenditure led to a refund to the state; the disciplinary hearings determined what action would be taken. There was a requirement to assess whether value for money was achieved.

Ms Bernadette Arries, Chief Director: People Management, said that the workforce needed different categories of staff. The Western Cape College of Nursing and the EMS College were now accredited as higher education institutions. Relief staff had been appointed and, due to the time delay, this would continue until the next year.

Mr Kaye said on bursaries that a rigorous process was followed. There had been a database clean-up on those who could not pay back their bursaries and their debt was cleared.

On contingencies and medico-legal risks, he said there were three elements, contingencies, provision and payables. A contingency was a possible settlement and there were fewer now than before. Provision for settlements had gone from R351 million in 2020 to R426 million in 2021. In 2022, the provision amount was R454 million. There were 65 cases in the previous year and 64 in the current year.

Ms Nkondlo referred to a steep increase in transport provided. She asked whether this would have involved one individual contract or multiple providers. What were the requirements for the tender? She asked for more details on irregular expenditure and fruitless and wasteful expenditure. Could the prior year's error for fruitless expenditure be explained further?

Regarding the provision of transport, Dr Cloete said there was a movement from R73 million in the previous financial year to R32 million during the current financial year due to the red dot system for transporting staff to their homes by taxis being stopped. The R32 million was to contract EMS providers across the province. He said some of the medicine providers were not registered on irregular expenditure. There was only R12 000 of fruitless expenditure. A case involving R4.6 million was still under investigation.

Mr Kaye said penalties were incurred on certain construction projects. One of the requirements was a completeness inspection. The matter of irregular expenditure was still under investigation and had not been finalised as being irregular costs. Regarding the prior irregular expenditure, there was a team that investigated, and this was put on record and addressed.

Mr van Der Westhuizen referred to the travel expenditure reports. To what extent could the Department continue the trend of limiting travel?

Ms M Maseko (DA) asked if using the EMS system was more cost effective than using the red dot system. Given the COVID environment, how did the Department deal with injury on duty and staff contracting the virus?

Dr Cloete responded on the transport expenditure. The main expenditure was for transporting staff. The red dot and EMS were two different systems. The EMS was for transporting sick patients, while the red dot system was for transporting staff home. Virtual meetings and hybrid working hours would be maintained. This will also decrease transport expenditure.

Ms Arries said that there had been tight engagements with the Department of Labour in the period under review. There were backlogs that led to practitioners not being paid and this had been addressed.

The Minister said that during the COVID period, the red dot system was used for transporting patients and performed exceptionally well. 

The Department thanked the Committee for its engagement.

The meeting was adjourned.