Intergovernmental Fiscal Review of Departments of Social Development and Health: hearings

NCOP Finance

18 October 2005
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Meeting Summary

A summary of this committee meeting is not yet available.

Meeting report


18 October 2005

Mr T Ralane [Free State] (ANC)

Relevant Documents
National Treasury: Provincial Budgets/Expenditure 2001/02–2007/8: Social Development
National Treasury: Provincial Budgets/Expenditure Review 2001/02–2007/8: Health
National Treasury Report on Provincial Budgets/Expenditure Review 2001/02 – 2007/8

National Department of Social Development Provincial Budgets/Expenditure 2001/02–2007/8
Chapter 4 – Social Development
Eastern Cape Department of Social Development Budget and Expenditure Review
Western Cape Department of Social Services & Poverty Alleviation Budget and Expenditure: PowerPoint presentation
Western Cape Department of Social Services & Poverty Alleviation Budget and Expenditure
Free state Department of Social Development Budget and Expenditure Review.
Northern Cape Department of Social Services and Population Development Budget and Expenditure Review
Kwazulu-Natal Department of Social Development Budget and Expenditure Review.
Limpopo Department of Health and Social Development Budget and Expenditure Review
Mpumalanga Department of Social Development Budget and Expenditure Review.
North West Department of Social Development presentation

National Department of Health on Provincial Budgets/Expenditure 2001/02–2007/8

Eastern Cape Department of Health on Budget and Expenditure Review
Northwest Department of Health on Provincial Budget and Expenditure Review
Free state Department of Health on Budget and Expenditure Review
Northern Cape Department of Health on Budget and Expenditure Review
Mpumalanga Department of Health Budget and Expenditure Review
Kwazulu-Natal Department of Health Budget and Expenditure Review

[Please email for the unavailable documents]


The Committee conducted hearings on the Intergovernmental Fiscal Review of Social Development and Health across South Africa’s nine provinces.

During the discussion on Social Development, Members commented on:
- whether the information given was current
- whether projected under spending was endorsed by the Provincial Treasuries
- whether Temporary Disability Grants were issued in a uniform way
- the Provincial Care Dependency Grant Expenditure
- incomplete data in provincial submissions
- whether provincial departments submitted reports to their Provincial Treasuries and
- why some allocations from the National Department of Social Development were only made
in June.

During the discussion on Health, Members commented on:
- the distortions in planning and distribution as a result of unreliable data
- the fact that the Eastern Cape was the highest spending province on infrastructure
- the reporting from the Eastern Cape that did not match what was happening on the ground
- why there were fluctuations in expenditure on health care support and
-the need for soft borders, in that Provinces must work together in the national interest.



Presentation by National Treasury on Social Development
Dr. M. Blecher conducted the presentation (document attached), which outlined the trends in Social Development Spending, Social Assistance Spending and Beneficiary Trends, the Social grants expenditure by type of grant and province, the performance in previous years within the Social Development Sector, the Provincial social welfare and development services expenditure, and the Provincial social development expenditure budgets for 2001-2008. He also highlighted key issues around the role of the Provinces that concerned the management of public funds within the new environment of an increase in the beneficiary numbers and public spending.

Presentation by Department of Social Development
Mr. C. Pakade, Chief Financial Officer, conducted the presentation (document attached), which gave an overview of Provincial Expenditure, Social Development Services and the Social Assistance Program, which encompassed the Old Age-, Disability-, Foster Care-, and Child Support Grant. He covered the measures to sustain social grants expenditure, the pressures on future provincial expenditure and highlighted future policy initiatives in addition to conditional grants expenditure for the Medium Term Expenditure Framework (MTEF) allocations for 2001/2-2007/8 that included HIV & AIDS and the Integrated Social Development Grant (ISDG), which was previously known as the Food Emergency Grant.

Presentation by Eastern Cape Department of Social Development
Eastern Cape Social Development MEC, Ms Xasa (ANC), conducted the presentation (document attached), which discussed the strategic responsibilities of Social Development and gave an overview of 2001/2-07/08 and the budget allocations for the same period. She discussed the 2005/6 First Quarter Expenditure trends, and the challenges the Eastern Cape faced.


The Chairperson asked that the Eastern Cape MEC for Social Development Ms Xasa (ANC) confirm the figures she had tabled. She did this, and the Chairperson then stated that they would be dealing with the reasons for the Eastern Cape Social Development Department’s under-spending in November. The Chairperson said that one other matter they would have to deal with is whether the information was current.

Mr. Z S Kolweni (ANC) [North West] asked whether the projected under-spending had been endorsed by the EC Treasury. He also stated that in this Committee they were not well informed about Temporary Disability Grants, and that he would like to get more information on that, as well as if this was done in a uniform way. Since the grant was temporary what happened thereafter?

The Chairperson referred to the Treasury Report that concerned the Provincial Care Dependency Grant Expenditure 2001/2, and stated that the EC did not have any figures there in terms of allocations. In 2002/3 they got about R94 million and yet the same year they got about 5 957 beneficiaries. He asked what the state of affairs was; whether they did not submit a report to their Provincial Treasury during that year in terms of the allocation they were supposed to have because it was not reflected? On Social Services and Arbitration he pointed out that in 2002/3, R480 million in expenditure was listed, and that in 2003/4 it was R399 million. What was the reason for the decline?

Mr D Botha (ANC) [Limpopo] called the Committee’s attention to program 4 in the Eastern Cape’s presentation and asked why funds were received in June only. Were business plans not submitted on time or was the problem with the National Allocation? He asked why the province was faced with cost pressure on Goods and Services in respect of Fleet Costs, while transfers to NGO’s reflected a projected overspending. How could there be overspending, because there must be a service contract with NGOs to see that the value for money was obtained? He queried how could there be a projected overspending, as they could only transfer money to NGOs for what was in the contract physically.

The MEC responded that the information for 2005/6 ended on June 30, and thus they did not present up to September. She said that she did not know whether she would respond correctly if she said that the Eastern Cape Treasury endorsed the information under projected under-spending. She continued that in terms of the projected under-spending for that current financial year, the monitoring report for each month went to Treasury, and that at the end of the financial year, the situation was going to change. She chose as an example the Integrated Social Development Grant, and said that the process towards the rolling out of the Program came late from the National Department, which caused them to start the process late. She stated that in terms of the Foster Care Grant, the respective departments were now working together, and that they were looking at a changing situation, because it was difficult for such children to get into the program, and that reflected an under-spending because of the bad flow. She answered that in terms of the transfers to NGOs, the department was dealing with the challenge.

The Chairperson said that they would then have to inspect their records and submit answers in writing within two days’ time. He added that 2001-2005 had not been evaluated on value for money and he questioned the numbers of beneficiaries. The Chairperson stated that it would be useful for the Eastern Cape Department of Social Development to interact with their Treasury, so that the Committee could determine whether they were making a difference to the lives of the people. He continued that it would be useful to have a long-range view from where they had started to the way forward. The Chairperson then told them to look at the trends from 2001-2005, as he wanted to have a look at the broader trends as it appeared in the report.

Mr Robertson (ANC) [Eastern Cape] requested a list of the NGOs; money allocated to them and how far those projects were.

The Chairperson said that it would be useful to start from 2001, to see the sustainability within those NGOs. He stated that some of the NGOs had been doing good work within some communities, and that it would be useful to see a current list. He questioned whether some NGOs existed, or whether they had existed two or three years ago.

Ms Robinson (DA), referred to the number of social workers. She said that the Eastern Cape had 510 social workers that were just a little less than Gauteng. She was concerned with the skewed distribution, as there was 189 social workers on level 7, 293 on level nine and 28 on level eleven, and in comparison with other provinces there were so many managers and not more people who were actually doing the work on the ground. She wanted the Eastern Cape Social Development Department to explain the skewed distribution as she wondered whether that was one of the problems they had with delivery.

The MEC agreed that the distribution of social workers was skewed and added that they still had a shortage of social workers. She added that they had indicated a shift from social welfare to social development, and thus experienced a growth of responsibilities contrasted against the availability of required skills, as people were needed to manage offices at those lower levels in different areas. She stated that the focus was on development and the strengthening of welfare services, and that they now employed one hundred more social workers at a very low level.

Presentation by Western Cape Department of Social Services and Poverty Alleviation
Western Cape MEC for Social Services and Poverty Alleviation Koleka Mqulwana (ANC), delivered an overview (document attached), in which she said that the budget for the current financial year was driven and influenced by priorities ranging from transformation, community regeneration, protecting the most vulnerable, early childhood development, the fight against drug and substance abuse, to strengthening, and intensifying social capital and build families.

Western Cape Department CFO J. Smith and the Director of Social Security, Mr H J de Grass, conducted the presentation (document attached), which discussed the departmental growth between 2001/02 and 2004/05, the unspent funds for 2004/05, the factors which influenced growth in the aforementioned periods and the distribution of the budget. They talked about the average growth in beneficiary numbers of Grants per financial year, and discoursed on each Grant. They also delivered a progress report on the implementation of the SA Social Security Agency (SASSA) in the Western Cape, and discussed Social Service delivery, the factors that limited its growth, its results, and its challenges. They talked about the cost pressures, the number of social workers, development and support services which included HIV/AIDS, Poverty Reduction, Food Relief, and gave an update on personnel spending and numbers.


Mr D Botha (ANC)[Limpopo] directed their attention to Food Relief and queried the tender not approved during 2004/05, the size of the rollover of funds that totalled R16.2 million to 2005/06, as well as the approval of four service providers for September. He also asked for clarification on the influence of the Mashishi court case.

Mr M O Robertson (ANC)[Eastern Cape] asked for a more comprehensive report on the increased funding to the NGO sector for salary increases of social workers.

The Chairperson asked why the employee numbers had gone down during 2002/03, and queried the later jumps in numbers in 2003/04 as well as 2004/05. He also asked for an explanation for the decrease in 2001/02 of one employee in Social Security.

Mr J. Smith answered that in terms of the R16.2 million rollover on the food emergency relief, the major portion of the business plan indicated that they needed to go on a tender process for the food parcels. He stated that they utilized some of the administrative funding for the business plan and that that was the small portion of money used in terms of that process. There was also some funding for soup kitchens etc. that they could provide to programs. That was the smaller portion of the whole, and the major portion could then roll over to the next financial year.

Director of Social Security, Mr H J de Grass answered that the Legal Resources Centre had brought a court action against the National Department as well as all nine provinces and indicated that they could not proceed with the cancellation of grants because the first letter of award that went out to the beneficiary to inform them about the grant did not contain all the correct information. It did not state that the beneficiary had the right to appeal within 90 days, so those grants that they cancelled for a specific period, then had to be put back onto the system and new letters had to be issued to those beneficiaries that stated that they had the right to appeal. He added that they had to keep those cases on the system for that three-month period or until the appeal process had been completed for those beneficiaries that appealed. He continued that they could not cancel any cases until they had completed the process and that led to the increases in beneficiaries. It would only be when they had completed the Mashishi court cases that they would be able to state that their processes were clean.

Mr H J de Grass said that in terms of the assessment tools, the National Department had contracted the Human Sciences Research Council (HSRC) to develop an assessment tool. He added that it was not in place and that they had identified with the National Department four provinces where the assessment tool would be piloted. They would meet in November in the Western Cape to pilot it in the George region, but it had not been implemented throughout the province, so different provinces were operating with different assessment tools. He admitted they were still vulnerable to litigation in terms of the different assessment tools that were in use in the provinces, and that they were working with the National Department to fast track the pilot so that they could reach uniformity in the provinces as soon as possible.

Mr H J de Grass said that with increased funding to NGOs for salary increases of social workers, traditionally it was the norm to fund social workers in the private sector a maximum of 75% of the status quo average and due to the Social Security Budget they were unable to do so as State salary scales had increased. The effect was that as of the previous year they were funding between 55-63% of the State salary scale and as part of the National Strategy for social workers they decided to transfer that benefit to the social workers working in the NGO sector. That had led to the increase in transfer payments in the NGO sector.

Mr De Grass explained that the personnel numbers for Social Security that decreased from 16 to 15 was due to a moratorium and they could not appoint any new personnel in the provinces. They then went through a period where they did an assessment in the province, and saw that the shortage of personnel had a negative effect on the quality of the work they rendered. Then they decided to appoint more people to ensure that their quality control was in place.

Mr J. Smith said that the major jump in personnel numbers between 2003/04 and 2004/05 was due to the appointment of contract workers to assist with the process of grants specifically in terms of quality to ensure shorter waiting periods. Further they had to accommodate the support side to deal with files, the register etc. as they had experienced an increase of grants.

Presentation by Free State Department of Social Development
The Free State MEC for Social Development delivered a presentation (document attached) and said that there was a need for more social workers in the province. They also looked at making services accessible to poor people, and that they had come up with the idea for mobile busses that would provide services to rural communities. The MEC said that some NGOs that provided additional services duplicated what the Provincial Department was already providing, and that they were looking at a structure that would compliment each other. In this, they would focus specifically on rolling services out to rural areas, as well as make the NGOs accountable for their work to the Province. They would also do better monitoring that would enable them to better account for the funds that went to the NGO and a better system to monitor HIV centres as well as better communication processes that dealt with this. The reason for under expenditure in the Social Disability Grants was because of an anti-corruption drive last year and early in the current year.

The Free State HOD for Social Development confirmed that the figures given were accurate after queried about this by the Chairperson. The Chairperson said that in 2001/02, the Free State Department for Social Development had 1520 personnel, and in 2002/03 they had 1 477. What was the reason for that? He also stated that the average national growth in beneficiaries was 27%. Why was the Free State above that?

The Free State HOD for Social Development said that the drop in personnel was due to resignations due to low salaries and working conditions. The MEC said that the growth in beneficiaries was because of the Social Model that changed the criteria that now included social background, unemployment, and that more people could now get the Disability Grant due to improved assessments.

The Chairperson said that he would allow them to go back home to investigate this matter, as they were obviously not in control.

The Free State HOD for Social Development said that there was a lot of poverty in the rural areas in the Free State, and that they were looking at an integrated way to deal with that.

The Chairperson said that one of the issues they had not looked at yet was migration from people outside the system. The Free State had the highest numbers with the second highest being Limpopo. He instructed that they must concern themselves with factual information and not dwell on theoretical issues. He added that everyone knew that there was poverty, but that he wanted focus on the factual issues that caused the problems.

The Free State MEC for Social Development stated that the assessment panels that they used to assess the beneficiaries were the main reasons.

The Chairperson asked Dr Mark Blecher from National Treasury to shed further light. Dr Blecher replied that the assessment tool was used in three or four provinces, and that the research which National Treasury had access to indicated that the rise in numbers of beneficiaries was caused by the new assessment panel. He therefore concurred with the MEC.

The Chairperson said that everyone had to make sure that they had current information, and had to make sure that this was also reliable information. He added that the Free State bordered Lesotho, and that there were issues of migration. He said that people from Lesotho, who migrated to the Free State, and who were in dire need of social assistance but could not receive any due to a lack of documentation was an issue to be looked at. He said that he knew that a model that dealt with that problem existed, but that attention should be paid to the growing numbers of the poor.

Presentation by the Northern Cape Department of Social Development
MEC Mr Goeiman delivered a presentation (document attached) that looked over the previous three years at the expenditures and outcomes, and the challenges over the next three years. He said that there was a rise in beneficiaries, which resulted in the growth in expenditure. He also discussed the challenges of Social Assistance Grants and that of the Social Welfare Services. He added that they had experienced a high turnover of social workers due to poor salary scales, but that they now had a social worker retention plan in place. He gave a summary of the provincial payments Economic Classification from 2002/03-2004/05 and the achievement within the same time-period. He also presented actual and projected expenditure, and policy matters for 2005/06.

The Chairperson queried the large consistent annual growth in old age persons as a trend across all provinces in 2001/02-2005/06 in light of the HIV/AIDS pandemic, and asked Mr Goeiman about this trend in the Northern Cape.

Mr Goeiman said that they had not really done an analysis on that issue, but that growing old was a natural process and that one had to look at the statistics at how many people were likely to get old on a yearly basis as a trend. He added that he did not note an unusual trend in view of earlier years and that it seemed to be consistent with natural attrition. On the issue of the HIV/AIDS pandemic, Mr Goeiman added that the pandemic had its major impact on the16-45 year old age group; those above fifty had not been as badly affected.

The Chairperson said that an analysis had to be done as the rise in the numbers of old persons was dramatic and that they had to check whether they had the correct numbers.

Mr Goeiman said that one reason might be migration. People from the Northern Cape would live and work in the Western Cape and Gauteng during their productive years, but would return during their elder years to the Northern Cape and would draw their pensions there.

Ms P Makai (Kwazulu-Natal) said that one of the things that they picked up in her province was the cross border situation when people were coming into the country from places like Mozambique, but when they were analysing the Health Budget they realized that it cost Kwazulu-Natal R180 million per year just to service the people who came over to access clinics. She said that it taxed the clinics, the schools, a whole range of services and that they were paying a lot of money to support people from other countries.

The Chairperson asked the MEC from the Northern Cape whether he confirmed the figures shown as a true reflection of his report. Mr Goeiman replied that they were as they had found no conflict in their financial analysis. Mr Goeiman added that statistics showed that the average age in the Northern Cape had risen from 54 to 58 which implied that there had been an improvement in the quality of life of people in the province and that that could be the indicator for the rise in the numbers of older people.

The Chairperson asked the MEC from Limpopo whether they confirmed the figures shown in the report as a true reflection of their report and they replied that they did.

Presentation by the Limpopo Department of Social Development
The Limpopo MEC confirmed that they were growing above average and that they had commissioned a study to look into the reason for these trends which indicated that there were a serious inflow of people from Botswana, Mozambique and Zimbabwe and people just like herself from Swaziland.

The Chairperson said this matter again related to the reliability of numbers, as they surely must be able to verify beneficiarie?. He continued that it could not be a free for all situation with the Department throwing money around. He said that clearly something must be done to have clear facts. He asked whether the MEC had any pressing matter that she wanted to share.

The Limpopo MEC said that their Social Development budget, as an equitable share of the Provincial Budget, since 2001/02 had risen from 18% to 25% in 2004/05 and that they were now more able to take care of poor people because of that.

Presentation by the Mpumalanga Department of Social Development
The Chairperson asked the HOD of Social Development in Mpumalanga whether they confirmed the figures shown in the report as a true reflection of their report and they replied that they did. The Chairperson said that they had no report on their personnel numbers, and yet, they had spent R49 million in 2001/02, then R59 million and then R64 million. The Chairperson added that in 2004/05 they had about 510 personnel and asked them to explain that phenomenon. He further pointed out that in 2001, 2003/04 there were no personnel indicated and then this jumped to 166 and 180 and asked for an explanation. He also queried their growth of 29,4%.

The HOD of the Social Development Department of Mpumalanga said that it was clear that there was an omission in terms of the submission of the statistics by his predecessors, and that from 2004/05 he had submitted the figures. He stated that as far as the growth was concerned that they had problems with cross border flow from Mozambique and Swaziland as well as the setting up of the disability panels. He added that a further analysis of growth would necessitate a study of previous years.

The Chairperson said that everything seemed to be in order with the figures from the Northwest Department of Social Development according to National Treasury, and asked the HOD from Northwest to confirm the figures, which he did.

The Chairperson said that Gauteng had not sent their MEC and HOD as they were busy with their portfolio committee, and that he had invited an observer from them to see what went on in the current meeting so that they could learn, as their picture looked terrible too. He said that they did not have figures and that he would specially call the Gauteng MEC so that he could deal with the Gauteng matters.

The Chairperson then went on to say that Kwazulu-Natal was a province that must be handled seriously in terms of the kinds of challenges that they experienced, and he asked them to speak in terms of the problems discussed with the other provinces.

Presentation by the Kwazulu-Natal Department of Social Development
The Director-General of Kwazulu-Natal Social Development said that there was a clear picture that indicated the problems experienced on the Social Assistance front, and that they were pinning their hopes on the establishment of the SA Social Security Agency (SASSA), which would give them an opportunity to have a specialized institution to deal with matters of administration and management of the Social Grant system. He added that the establishment of the Agency would bring about uniform measures to eliminate some of the inconsistencies with regard to provinces in that particular function. He also said that the ghosts in the system were real human beings - public servants - and that from the studies that they had done, it was quite a sizable number of public servants that was involved in this. He said that that was not the end of the process, as there were still a number of databases that they did not have access to as yet, and that the moment they gained that access, it would reveal other trends. He added that they obviously needed a strategy to ensure the progressive realization of social-economic rights to ensure that they balanced those with available resources.

They had to retain social workers who in fact did the work of rendering social development services, and they needed to strengthen their relationships with social society organizations that rendered those services on their behalf. He said that overall the picture on the Social Assistance front was not as bleak as in the past. As the Free State correctly pointed out, there was a great possibility for savings rather than under spending, because those were in fact efficiency gains that they were seeing through the efforts and measures that they were putting in place to rid the Social Security system of fraud and corruption.

The Chairperson said that the Department had supplied a round figure of 688 home-based care centres for the province as a whole. Personally, he wanted to see a local breakdown of the impact of that on the communities.

The Chairperson said that National Departments had to be firmer and that the Provinces should not be given so much discretion in the context of National norms and standards. He added that if they dealt with those things equitably they would be able to show if they were winning the war of making a better life for everybody else. He said that surely norms and standards should be equal across all provinces so that one province would not be better than another to the extent that they would then experience migration across borders. Provinces were always arguing that conditions for Conditional Grants were very strict. The equitable share was unconditional. Some people wanted to review Conditional Grants but he would urge National Departments not to relent on this. Finally, the Chairperson added that the National Social Development Department was the only department that complied with the Division of Revenue Act in terms of supplying quarterly reports on the Conditional Grant.


The Chairperson opened the discussion on health by saying that this public hearing was on provincial budgets and expenditure for the period 2001/02-2007/8 and that National Treasury would lay the foundation for the discussion in terms of highlighting some of the trends. Thereafter the Director-General from the National Department of Health would give them the broader picture. He added that one of the things that he would like the provinces to do was to confirm the figures as they appeared in the Treasury report where they were correct and dispute the incorrect ones.

Presentation by National Treasury on Health
Dr. M. Blecher conducted the presentation (document attached), in which he outlined the spending trends and service layout trends as best as they were available to Treasury. He discussed Sectoral Funding and International Comparisons. He also talked about spending across the provinces on health services 2001/02 to 2007/08, service outputs and under spending in the health sector on Conditional Grants and capital, as well as poor information systems. He also talked about HIV/AIDS expenditure, the widespread rollout of ECT programs, the Hospital Revitalization project, and he gave an analysis of personnel funding issues, and trends in some of the scarce health professions.

Presentation by National Department of Health
The Director-General of the National Department of Health, Mr T Mseleku, conducted the presentation (document attached), in which he indicated that the Health Budget had grown, but that it should be put in context with medical inflation, which he said was about a percentage point higher than the Consumer Price Index. He discussed the South African Population Growth (+/- 2% p.a.), membership of medical aid funds, the expansion of Public Health Services into new areas, and the challenges concerning the shortages of health personnel. He also discussed water and sanitation, emergency medical services, under spending, the quality of service in hospitals, data for analysis and issues of causes of deaths.

The Chairperson guided the provinces to the National Treasury Report and said that he wanted the Eastern Cape and Northwest Province to reflect on the Primary Health Care outputs and unit costs. Why was there a decline from 2001/02 to 2002/03, and he also queried the Free State’s rise in costs per visit. He pointed out that in the Eastern Cape there had been a decline from 29 000 to 28 000 field posts, in the Free State there was also a decline from 14 463 to 14459. The Northwest had also experienced a decline, as well as Mpumalanga and Limpopo. Why was that? The Free State seemed to be the only province moving forward in 2002/03 on salaries, but there was a very high bracket in salaries and he asked the reason for that.

The MEC, Dr MB Goqwana said that they needed some assistance as far as water and sanitation were concerned especially in rural areas, and it would be some time before they reached their targets because of the road infrastructure in those areas. Some of those things were beyond them when they dealt with revitalization as they had to deal with other departments where the tendering was done and that they would get into serious problems.

The Chairperson said that that was a matter of serious concern, as the previous year the Eastern Cape Treasury gave a glamorous report on infrastructure spending which the Select Finance Committee had disputed. He said that the Eastern Cape did not talk about the detail of the infrastructure, though they did speak about the issues of the roads. He added that the Eastern Cape was the highest spending province on infrastructure, while, surprisingly all the other provinces were under spending, and that he saw that this matter was raised again. He said that the MEC was merely confirming the issues that the Committee had raised, and that they would call on the Eastern Cape Provincial Treasury to appear before the Committee, because the glamorous reporting from the Provincial Treasury did not match what was happening on the ground. He said that they had been to the Eastern Cape twice and had observed that for himself. He added that the Eastern Cape was in dire need of proper assistance.

Presentation by Eastern Cape Department of Health
The HOD conducted the presentation (document attached) that highlighted provincial expenditure and budget trends, in which he outlined the challenges, Conditional Grants and the Eastern Cape’s Allocation under the Equitable Share. On the state of facilities, the HOD said that persons might have visited clinics and not received the service that they were looking for and that that might have caused the decline from 2002/02 to 2002/03, but that they need to do more research into the decline and that they had experienced a rise in visitations since, which was above the national average. He mentioned staff shortages and staff retention especially in the rural areas, HIV/AIDS, and value for money.

The Chairperson said that he wanted the HOD to discuss the mortality rate, the consistent annual rise in number of old age persons, factors for migration, and he urged the importance of reliable figures. The HOD replied that they would have to research the matter. The province had to tighten its belt because money earmarked for health was used for infrastructure to build more clinics. He also said that issues like health officials using business class and not economy class when flying had been addressed and that that situation had been rectified. There was a budget impact that led to an inability to pay service providers, especially the smaller suppliers.

Mr D Botha (ANC) [Limpopo] asked why there was fluctuation in expenditure on health care support.

The HOD answered that the fluctuation was due to their administrative capacity to deliver support services. Certain institutions were not on fee for service and that to centralise the payment they had shifted some money out of the program for District Health Services and put it under program seven, which was the Core health care support to centralize costs.

Mr Blecher from National Treasury said that one area that needed attention was the information systems for hospitals. There were many gaps and many hospitals in the Eastern Cape showed zero patients. It was very difficult to get a consistent set of trends on Eastern Cape hospitals and the Eastern Cape needed to get their information systems in order.

The Eastern Cape MEC said that they had implemented a strategy to get information on hospitals, the first phase of it was finished and they were planning to roll it out to more hospitals. However, there was a shortage of skilled IT personnel to maintain information systems.

The Chairperson said that they wanted to see more interaction between provincial MECs and HODs, insofar as tradeoffs on emergency cross-border treatment were concerned. The MEC for the Eastern Cape said that measures for emergencies were in place but that the problem became more pronounced at ground level. There was a toll free number for people to call if hospital staff denied access in cross-border cases.

Presentation by Northwest Department of Health
The MEC gave the presentation (document attached) for Northwest and talked about the population increase for their province, the increase in the Health Budget, the decline of the growth rate of the Northwest Health Department Service, the emergency medical services, the number of people uninsured, health infrastructure, migration across their borders to use their medical facilities from Botswana, HIV/AIDS, and the challenges with under funding. The HOD gave an overview of Provincial Expenditure, Human Resource issues, non-personnel capital expenditure, underperformance on Conditional Grants, and changes in management structure.

The Chairperson asked why their number of doctors in 2005 had declined from 487 to 440.

The HOD answered that one of the explanations could be the cutthroat nature of the industry, in that some province gained at the expense of others, and movement from rural to urban areas.

The MEC of Northwest stated that they had a growing partnership between them and Universities, and gave examples as Wits and Medunsa. She also stated that they were working hard at the rural Health Strategy with the sisters of Medunsa, and that they were improving basic physical working conditions.

Dr M Blecher National Treasury said that Northwest initially struggled with their implementation of the new program structure and that the numbers were definitely improving, but there were still problems in their classifications. He wanted them to pay close attention to their classification, as most of the problems were in their economic classification structure. The numbers on district hospitals were very difficult to interpret, as over a seven-year period, district hospitals had only increased from R526 million to R647 million. It was quite difficult to understand why it would go up to R558 million in 2002, then drop to R511 million in 2003, rise to R625 million in 2004 and then drop to R 577 million in 2005. Those were probably classification mistakes.

The MEC accepted that there was a struggle with the classification, but that they would have to go back, note it, and deal with it.

The Chairperson said that they must not just note it; they must rectify it and then report back to himself and Dr Blecher in the next three days.

The MEC for the Free State Department of Health confirmed the statistics in the National Treasury Report and the HOD answered the question on the rise of costs per visit in the Free State that was posed earlier by the Chairperson. He said that the rise of costs per visit was due to a decision taken in 2001 to fund primary health care, with money taken away from the central hospitals. It was at a time when health care had to be strengthened at a lower level. On the rise of personnel, in April 2001 when the number of personnel was more than 15 000 they were still carrying supernumerary personnel who did not have the correct skills the Department needed, and they were then placed appropriately and their numbers reduced to 14 463. The next increase was due to the need to fill critical posts and the takeover of primary healthcare personnel in clinics from the municipalities by the Department. The average salaries were slightly higher and they had developed a recruitment and retention strategy especially for filling posts for rural areas, which was done with higher remuneration.

Presentation by Free State Department of Health
The HOD gave the presentation (document attached) and talked about growth, the allocation of Conditional Grants, the challenge to balance personnel, the backlog for essential equipment, and consumables.

Dr Blecher referred to the Free State’s fluctuations in numbers and that they needed to pay attention to that in the upcoming budget cycle. He pointed out that clinics expenditure in 2001 was R46 million, for 2002 it was R126 million, for 2003 it was R212 million, and R136 million was budgeted for 2005/06, and that that was extremely difficult for anyone outside the province to understand that.

He said that the numbers for Regional hospitals had gone down from R664 million to R621 million, and in the economic classification they would see that for the previous year they had spent R1.6 billion on personnel and compensation of employees. In the current year they had budgeted R1.9 billion, which was a R300 million increase, and that at the same time they had decreased the budget for goods and services. In 2003/04 they showed expenditure of R781 million, and in the main budget of 2004/05 they budgeted R795 million. He continued that in the appropriations budget they budgeted R642 million which was R150 million less than the budget of their main budget, and that they then showed an expenditure of R885 million which was R250 million more than what they showed in their adjustments budget. Dr M Blecher then said that what they had budgeted in 2005/06 was R30 million less than what they had shown in their preliminary outcomes budget of 2004/05. He told the Chairperson that those numbers did not make sense and that the Free State did not classify their numbers correctly.

The Chairperson told the Free State Department of Health to go back to their records, and then to report back to himself and Dr Blecher in three days.

The MEC from Northern Cape said that they wanted to make services more accessible to people in their province, but that they faced challenges due to factors like the vastness of the province.

The Chairperson asked what had happened to the three doctors the Northern Cape lost in 2004/05. They had 258 doctors and the numbers then went down to 255 doctors.

The HOD said that the loss of doctors was in the main due to misconduct cases and that the province was non-apologetic about the fact that if there were serious misconduct cases, irrespective of what category of staff was involved, that they would be dealt with accordingly. He added that some of them were transferred to other provinces.

Presentation by Northern Cape Department of Health
The HOD gave the presentation (document attached), and discussed the equitable budget, growth, the conditional grants, key delivery challenges, distribution of the budget, revenue increase, improving quality of service delivery, improving management of hospitals, the 2004/045 budget outcome, under spending, infrastructure, and talked about Growth, Conditional Grants, the challenges facing the province, personnel and medical inflation.

Mr M O Robertson (ANC)[Eastern Cape) asked for clarity on the Northern Cape Half budget, and queried the Hospital Revitalization Budget, in which was indicated that they got two hospitals for 2004/05, nothing for 2005/06, one for 2006/07 and three for 2007/08. He also wanted to know why there was no hospital listed for 2005/06.

The HOD for Northern Cape responded that the hospitals indicated for 2006/07-2007/8 were projected completion dates, and that only hospitals that had been approved had been listed.

Presentation by Limpopo Department of Health
The MEC for Limpopo gave the presentation (document attached), and discussed the equitable budget, human resources, patient transport, cross-border flow, rare diseases outbreaks around Messinna and the rare resources they had to spend to contain that outbreak, primary health care, staff recruitment and retention and problems with accommodation around hospitals.

Presentation by Mpumalanga Department of Health
Mpumalanga’s MEC gave the presentation (document attached), and discussed the equitable budget, growth, challenges, distribution of the budget, revenue increase, service delivery, under spending, infrastructure, and talked about Growth, personnel.

Presentation by Kwazulu-Natal Department of Health
The MEC for Kwazulu-Natal gave the presentation (document attached) and spoke about conditional grants, staff workload increases and compensation, no real increase in the allocation to the Department, the decrease in doctor numbers was attributed to the Cuban Doctors who went back to Cuba and were not replaced, radiologists that were lost to Saudi Arabia, and HIV/AIDS.

The Director-General of the National Department of Health, Mr T Mseleku, said that the situation was a reflection on past systems, and that there still were issues of corruption to be looked at. He added that it was very difficult to standardize all the provinces due to individual provincial practices, and that all sorts of dynamics came into play in that regard. He stated that there was the issue of whether the government was getting value for its money with issuing of grants and whether there was increased accessibility, as well as the quality of care. He said that it was a matter of reality, that in working with a limited available budget, that South Africa might have to choose whether it wanted to expand the numbers of those who had access, or whether it wanted to maintain quality, and therefore, it ultimately was a matter of national policy.

The meeting was adjourned.


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