2005/6 Audit Reports: Department of Health & National Laboratory Services. Status of South African National Aids Trust: interrog
Public Accounts (SCOPA)
16 February 2007
Meeting Summary
A summary of this committee meeting is not yet available.
Meeting report
STANDING COMMITTEE ON PUBLIC ACCOUNTS
16 February 2007
INTERROGATION OF 2005/6 AUDIT REPORTS: DEPARTMENT OF HEALTH &THE NATIONAL
LABORATORY SERVICES. STATUS OF SOUTH AFRICAN NATIONAL AIDS TRUST
Chairperson: Mr TN Godi (PAC)
Documents handed out:
None
Audio Recording
of the Meeting
SUMMARY
The Auditor General’s report for the Department of
Health raised a number of issues on compliance with the Division of Revenue Act
that were interrogated by the Committee. These included late submissions of
reports, money transferred before approval of business plans and reports not
being submitted. The committee was concerned whether there was adequate
monitoring of funds and adequate monitoring in the provinces. It questioned the
improvements planned for compliance and whether there would be improvements to
the internal audits, as well as plans to combat corruption. The Provincial
Departments of Health were asked to deal with the reasons why they were unable
to submit their business plans on time, and secondly with their apparent
inability to submit the periodical reports on time.
The National Health Laboratory Service had improved, but members of the
Committee queried the vacancy rates and staff complement, including that at top
management. Training efforts were noted.
The increase in the temporary staff was attributed to the staff who had not yet
graduated. The evaluation of the inventory numbers was questioned, as was the
recurring problem of properties still requiring to be transferred. The
accounting controls on grants had been reported as a problem for a number of
years but a model was being sought. The materials framework and the prevention
plans were also debated. The register of members’ interests was also discussed.
The relationship with the vaccine producers, and the status of the subsidiary
companies was explained. The question of bad debts and board salaries were also
discussed.
The Director General gave a report on the current position of the South African
National Aids Trust, which had inadvertently become dormant through the lack of
operation of the South African National Aids Council. It was clear that its
role was ambiguous, and there had to be resolution on the status. Whilst there
had been expenditure that had subsequently turned out to have had no effect,
this was a risk of the contracts.
MINUTES
Department of Health (DOH): Interrogation of 2005/6 Audit Report
Mr EW Trent (DA) asked for comment on the fact that there seemed to be
inadequate observance of the Division of Revenue Act (DORA) requirements in
respect of monthly reports and monitoring.
Mr Thami Mseleku, Director General, Department of Health replied that as DORA
had developed matters had changed and he noted that the 2004/5 and 2005/6
requirements had differed. He said that briefly most of the issues were
developmental.
Mr Trent asked whether the Director General was accepting responsibility for
the prevalent non-compliance and why there seemed to be inadequate monitoring
of whether the funds were used for the intended purposes.
Mr Mseleku replied in the affirmative. He accepted that DOH had not complied
with DORA requirements of getting monthly reports from the provinces.
Monitoring was regarded as a broad term, and the National office considered
that it had done sufficient by requesting the provinces to comply with DORA.
For example if they requested a business plan from the provinces, which was
then filed by the provincial accounting officer and was in accordance with the
conditions and prescriptions of DORA, there was no need to distrust the report.
It would of course be more difficult to verify that the amount used for a
stated purpose was indeed used for that particular purpose, as this required
capacity and the legal means to audit each report.
Mr Trent said that the problem was that the reports and the business plans were
not being submitted in the first place. He asked the Drector General why money
and grants were being transferred to departments without any approval of the
business plans.
Mr Mseleku accepted that indeed it was National Department’s responsibility to
approve of business plans before any transfers occurred and the fact that there
were grants transferred before approval was not in compliance with DORA
requirements. However the difficulty faced was that the DOH essentially worked
with people. This human element meant that if a province had started a project
such as HIV/AIDS treatment it was difficult to stop it when business plans were
not submitted in time. For DOH it was more a question that the patients
received the treatment than the issue of plans and figures. However, DOH was
aware of the fact that it was contravening the DORA specifications.
The Chairperson asked the Director General to supply the names of the provinces
that were prevalently using this apparent blackmail that they could not stop
treatment and therefore must get money. These provinces should address the
questions themselves.
Mr Mseleku replied that he was aware of some, but he could not specifically
recall them now. The Auditor General (AG) had the information.
Mr Trent noted that that whilst SCOPA was aware of the argument that people
were dying he was rather concerned that the situation had been going on for a
while. He then asked what DOH intended to do to rectify the situation.
Mr Mseleku replied that the particular question centered on the 2004/05
HIV/AIDS grant, which had been around for two years. He added that there had
been improvements on the performances of provinces in relation to this
particular grant. However, the difficulty lay with the lack of capacity at both
national and provincial levels to be able to put together business plans on
time, and it also included other administrative matters such as budgets. DOH
was, however, thinking of ways to improve the business plans and one of the
ways was the suggestion that provinces take more responsibility and
accountability.
Mr Trent asked what DOH was doing to ensure that reports were submitted on
time, as opposed to the dismal performance of 2006, since these reports helped
in monitoring and ensuring that the money was being used according to the
prescriptions of the Act. Moreover, he asked what percentage of the health
budget and the equitable share were conditional grants.
Mr Mseleku replied that the conditional grants on average were 20% of the whole
Health budget. With regard to ensuring that provinces met the time frames DOH
has put steps in place. Firstly, it would request the provinces themselves to
comply with the DORA framework. Moreover, DOH dealt with the issue on various
levels of intergovernmental forums, such as the CFOs’ Meetings, that met about
six times a year. During the meetings this issue would be discussed in detail.
In addition, the national health committee, consisting of the heads of
department and Mr Mseleku, discussed the very issue of compliance. The system
was improving.
Mr Trent asked why there were infrequent visits to the provinces. He noted that
this might be the reason why the systems being put in place were not working.
Mr Mseleku replied that he believed the substance of compliance had more to do
with the nature of interactions he had with the provinces rather than the exact
number of flights taken to visit the provinces. For example he would meet the
respective provinces on various other platforms, such as the CFOs’ meetings,
about 10 terms a year. At this meeting their discussion would certainly be far
more in depth than any that could take place during the physical four visits
that he was required to undertake on site. In addition, if the province was
facing a particular problem and it invited him he would visit the province in
order to work it out. He pointed out that the systems were dynamic.
Mr Trent asked whether DOH was monitoring the expenditure of the R4.7 billion
allocated to tertiary education adequately.
Mr Mseleku replied that DOH had intergovernmental systems put in place to
monitor the grant. However; they monitored it more as a Schedule 4 than a
Schedule 5 grant. This grant would be transferred to the provinces and they
sent in periodic reports. Nevertheless, DOH was monitoring the grant closely
and was even looking at reviewing it with National Treasury (NT).
Mr Trent asked whether he was satisfied that there was compliance
Mr Mseleku replied that some provinces
had complied.
Mr Trent asked whose responsibility it was to monitor the grant, whether this
was the responsibility of the provinces, which would then report to him, or if
there was direct monitoring.
Mr Mseleku replied that the grant was not monitored directly. Despite this he
would guarantee that this was the proper procedure. If the method was not
sufficient then approval would not have been given by NT Schedule 4. Moreover,
the provinces themselves had systems of monitoring such as the Public Finance
Management Act (PFMA) and they had structures that allowed for the accounting
officers to account for the grant.
Mr Trent asked whether the committee was going to witness an improvement in the
current year in terms of compliance.
Mr Mseleku replied that definitely there would be significant improvements.
However, there still were developmental problems.
The Auditor General commented that whilst he noted what was said by the
Director General, the AG tended to give more weight to the DORA specifications
that were in writing. Hence, he informed the Director General if there was a
change in the system there should be amendments to the procedure because the AG
would not be able to back up any measures if these were not in the Act
Mr Trent remarked that the DOH should not have business plans that they did not
later adhere to as this caused problems, as had just been noted by the AG.
Mr Trent asked whether all the 1 547posts were funded.
Mr Mseleku replied that some of the posts were not funded.
Mr Trent said that in this case the posts vacancy rate would presumably not
give an accurate picture.
Mr Mseleku replied in the affirmative.
Mr Trent asked for the number of posts that were not funded.
Mr Mseleku replied that currently about 20% of them were not funded.
Mr Trent asked whether the current vacancy rate was as bad as last year’s
considering that there were some posts that were not funded
Mr Mseleku replied that the situation had improved but DOH noted that in the
current market environment it was difficult to acquire the skills.
Mr Trent asked to what extent the vacancy rate was affecting the monitoring of
DORA.
Mr Mseleku replied that certainly vacancy did affect the monitoring and the
performance because with more people DOH would be able to perform better.
Mr Trent asked whether DOH was going to fill the remaining vacancies.
Mr Mseleku replied that he was confident and would do his best to fill them.
Whether he would succeed was a different matter, since some skills, such as
pharmacists, were difficult to find.
Mr TJ Bonhomme (ANC) asked the reasons why the internal audit was ineffective
and the impact of this.
Mr Mseleku replied that one of the reasons was that there was a high turnover
of the interns DOH had hired, who would leave for more lucrative job offers.
This had an impact on the performance as DOH were constantly on the look out
for the required skills, and even if they managed to acquire them for a while
people would not stay long enough for skills transfer so capacity building was
stalled. The audit had requested an orgarnogram to discuss the way forward on
building capacity.
Mr Bonhome asked whether the audit committee was operational as required for
the year 2005/06.
Mr Mseleku replied that the previous audit committee was a problem and as a
result it was dissolved. Consequently DOH had made new appointments. The new
committee first met in November 2006. Their second meeting was two days ago and
it looked like a more promising committee.
Mr Bonhomme asked whether DOH could assure the Committee that there would be
active compliance with the PFMA.
Mr Mseleku replied that the audit committee was operative and functional and it
did not appear as if it would have the same problems as the previous one.
Mr Bonhomme asked what kind of mechanisms DOH had in place to combat
corruption.
Mr Mseleku replied that despite the fact that the Auditor General commented
that the internal audit could not be relied on, and that they could not
finalize the work because of the delay experienced, the Committee was very
strong in some of the strategic areas identified, which included fraud. Since
DOH did a number of money transfers it had an increased financial risk and the
major risk lay in the area of negative control. DOH was doubling their efforts
of vetting the personnel, and would in addition improve and implement the fraud
line. It was confident of the audit unit,which had drawn clear lines pertaining
to fraud.
Mr Bonhomme asked what steps DOH had taken, in conjunction with the accounting
officers, to ensure that the departments produced the performance information
as required.
Mr Mseleku replied that this was an area that would take time to improve but
DOH was managing to make progress. It was moreover working to build capacity
that would help improve the situation. However DOH would like to have more
discussions on this area and had visited provinces to help them.
The Chairperson remarked that his assumption was that compliance was a
necessary element of producing the required output
Mr Mseleku replied that this was the ideal but that compliance sometimes could
be an obstacle to output. That was why there was need to have a balance between
the two.
Mr Bonhomme asked whether DOH would be
able to submit all the performance information for 2006/07.
Mr Mseleku replied that to the extent DOH had been able to improve, and thus
would be able to submit the information for this year. Although the previous
year’s information could be used, it was not 100% accurate as there was still
need to improve the verification process. He assured the Committee that he was
working on the matter and was confident that DOH was going to improve on the
reliability of the data.
Mr Bonhomme asked whether DOH could assure Parliament that it would monitor
compliance of the Environment Act.
Mr Mseleku replied that this question presupposed that they had responsibility
across the board. However, DOH’s understanding was that it was more an internal
issue. Moreover the issue was still very ambiguous and they needed to go back
to the Act to figure out their exact responsibility.
Mr Bonhomme asked whether DOH was confident that there would be compliance to
the 2006/07 financial issues.
Mr Mseleku replied in the affirmative
Mr Terence Nombembe, Auditor General, remarked that there was a need for a
clear management plan that was going to be carried out.
The Chairperson commented that the problem lay with the different
interpretations of the Act, which had led to the ambiguous situation where the
Health Department was not aware of its position.
Mr Mseleku agreed that it was true since DOH was not sure as to what was their
role.
Mr Bonhomme asked whether DOH had a committee for environment coordination, and
if they did, whether they reported their plans.
Mr Mseleku replied that DOH did not have an environmental coordinating
committee with a focus on environmental health. There was an environmental
health committee in the Department of Environmental Affairs and DOH reported to
it.
Mr Trent asked why the new concept of supply chain management, which was
established two years ago, was still not fully operational and whether this
problem was being fixed
Mr Mseleku replied that this was a new area that had just been introduced and
DOH was working on improving on it by increasing its in-house capacity
Mr Trent remarked that DOH was taking a long time to do so, considering that it
formed part of the legislation, and asked whether DOH thought its policies to
be adequate.
Mr Mseleku replied that in his view their policies were adequate.
Mr PA Gerber (ANC) asked the Director General when in July he had signed the
report.
Mr Mseleku replied that it was around the same time as the Auditor General had
signed. This was probably around 31 July, and he did not know why the date was
omitted.
Mr Gerber suggested that the Moratorium Act be extended to doctors who worked
in remote or inaccessible areas where no others would be prepared to work. This
would basically mean that such doctors who had just finished university and
were doing their housemanships would be exempted from repaying a year’s fees or
repayments.
Mr Gerber asked why in there had been under expenditure on filling vacancies of
about 36.96 % and also why there was a difference between the 2004/5 and 2005/6
advertising allocations, being R7.4 million as opposed to R9.6 million.
Mr Mseleku replied that the 36% would refer to the totality of programmes of
human resources. But within the specific area the percentage should be less. As
regards the difference in the amounts he would have to give this answer in
writing as he was not aware of the reasons immediately.
Mr Gerber asked whether the high vacancy rate was not due to the fact that DOH
spent little money on advertising its jobs, as was apparent from the figures.
Mr Msekelu replied that this was not necessarily the case and the vacancies
were attributable not to lower expenditure but rather to the unavailability of
the skills in the market.
Mr Gerber remarked that the Department’s vacancy rate of 37% of senior
management was totally unacceptable. Moreover, the CFO appointment was not yet
equated to the higher level of responsibility of a DDG appointment, and he
asked whether DOH was working to correct this.
Mr Mseleku replied that DOH was rectifying this.
Mr Gerber asked the DG how much the DOH was spending on diseases that were
caused by cigarettes.
Mr Mseleku replied that though he did not have the figure, he could assure the
committee that it was a huge amount of money. Those working on the amendments
to the tobacco control legislation were directly dealing with the matter and
were spending about 30-40% of the health budget.
Mr Gerber asked when DOH would put health warnings on wine labels, as they had
promised months ago, considering that it was spending considerable amount of
money on wine health related problems.
Mr Mseleku replied that DOH was in the process of finalising the matter and he
reassured the Committee that something would be proposed in the first half of
the year.
Mr Gerber asked why consultancy work for one day had cost around R11 000.
Mr Mseleku replied that this quotation was the cheapest of three quotations
received for the work.
Mr Gerber asked about the other Biovac shareholders, since the Department held
40%, and what the Institute meant when it referred to competitive prices.
Mr Gerrit Muller, Chief Financial Officer, DOH replied that the other
shareholders of Biovan Institute stitute were the Biovac consortium that
constituted of the Biovac Holdings, the Cuban government and a Trust for
disabled people. The competitive prices were derived from a certain process to
be followed, would be fixed and declared by the World Health Organisation
(WHO). This would then form the basis of the guidelines for the subsequent
years and would keep them at competitive prices.
Interaction with the Provincial Departments
The Chairperson thanked the various provincial representatives for coming
in on such short notice. His said that the Committee was primarily concerned
with the reasons why the provincial departments were unable to submit their
business plans on time, and secondy with their apparent inability to submit the
periodical reports on time as required by DORA
Mr R Chapman, Acting Head of Department (HOD), Free State Health
Department replied that the Free State was among the provinces that had
received money before the business plans were approved. There had been a delay
caused by a difference of opinion on the business plan with the National DOH.
National DOH had wanted to give Free State less money than was allocated, but
Free State had called for the full amount. This difference of opinion was
informed by the different calculations that occurred. However, this had been
rectified this year and the business plan was on target. Free State had
ultimately received the full amount.
Ms S Ngcobe, HOD, Gauteng Health Department replied that his Department were
affected by capacity issues which had then not been properly addressed in
relation to the monitoring and evaluation. It now had a strategic unit that was
not split, and a director responsible for monitoring and evaluation. It was
busy making appointments. It had also appointed a corporate service manager at
the chief director level, who would assist in monitoring and evaluation. It had
also reviewed the system and had come up with an integrated system that would
complement the medicomp system and assist to monitor and review the structure.
The other issue was in relation to the uptake which impacted monitoring and it
wanted to ensure that service delivery was not compromised
The chairperson asked whether the uptake problem was not an indicator of poor
planning.
Ms Ngcobe replied that although poor planning was part of the problem the major
reason was capacity. Skills such as pharmacists were so scarce that the
Department had to look at other partnerships and create a relationship between
doctors and pharmacists. Other issues that compounded the problem were
unsatisfactory pay. She noted that the Department should not delay service
delivery just because they lacked capacity.
Mr J Jooste, Chief Director: Financial Management, Western Cape Health
Department replied that as far the HIV/AIDS conditional grant was concerned the
business plan was in order. THe HIV grant had caused a few problems in two
hospitals but these problems had been resolved.
The Chairperson asked KwaZulu-Natal Department of Health why its business plans
were not aligned to measurable objectives and why its objectives were not
always met.
Dr B Nyembezi, Head of Department , KwaZulu Natal Department of Health replied
that it recognised that the problem was the inadequacy of the structure at the
head office of the Department, and so it had reviewed the structure at the head
office so as to strengthen it. Without a strong center, there could not be
proper direction, and the strengthening would also make it easier to monitor
and evaluate. In addition it had appointed a new Chief Director and did not
anticipate the problems recurring.
Ms M Thuntsi, Acting HOD, Northern Cape Health Department replied that she had
noted the concerns and had listened closely despite the fact she had been only
two weeks in her post.
The Chairperson remarked it was apparent that there was instability at the top
structures, and this might be part of the problem that was affecting the ground
level. Northern Cape had made a substantial number of mistakes.
Ms Thuntsi remarked that she was going to report all the issues that had been
raised to the MEC, and the Chairperson asked her to report back on what other
measures she would take besides the report to the MEC.
Ms J Dlamini, HOD, Limpopo Health Department replied that everything was in
order except for their HIV plan that had not been met because the Department
had anticipated the rollout to be faster than it actually was. Limpopo had been
able to increase the accredited sites.
Dr E Moloko, HOD, Mpumalanga Health Department replied that its grant was not
properly monitored. However, there had been meetings now to monitor and
evaluate the grant and appointments were being made.
Mr M Febson, CFO, Eastern Cape Health Department replied that this Department
had one major challenge, which was a court case based on the contracts awarded
in respect of two hospitals. The problems had caused delays in construction.
The challenges to the contracts had finally been withdrawn as they were
baseless. The Department was very confident that by the end of the financial
year it would have utilized the budget allocation.
The Chairperson asked why there seemed to be problems with submitting reports
on time.
Mr Chapman replied that Free State was one of the provinces that was trying to
comply, but had to inform the Committee that the system was difficult and very
complex. Moreover, the objectives were too ambitious and the whole system had
to be reviewed.
The Chairperson remarked that if the Free State, being one of the provinces
that actually complied, was complaining that the system was complicated this
was probably the same complaint every other province had. As a result he
suggested that it was not necessary for all provinces to respond to the
question.
The Chairperson and Mr Trent asked the Director General whether there were
improvements in the reporting.
Mr Mseleku replied that the trends showed that there was an improvement in the
reporting and this would show in the audit.
The Chairperson remarked that maybe there should be changes in the reporting
style which currently appeared too complex.
Mr Mseleku replied that this would have to be done for the next financial year
so as not to produce a disjuncture.
National Health Laboratory Service(NHLS): Interrogation of Audit Report for
2005/6
The Chairperson indicated that the Committee had generally been satisfied
with the report, except for issues such as conflict of interest. He noted that
the NHLS report had improved considerably
The Chairperson asked what was the vacancy rate and the staff complement. He
also remarked that NHLS were having problems with attracting and developing and
retaining staff.
Mr John Robertson, CEO, NHLS replied that in November 2006 there were about 4
000 NHLS staff but with the integration of KwaZulu-Natal there were now around
5000. He added that when it came to the challenge of vacancies the NHLS did not
work on specific posts. They rather looked to the programmes that were being
implemented, so that as the programmes were rolled out staff were added.
Moreover NHLS were also trying to improve on efficiency to compensate for the
shortage of staff. For example it was around 10 to15% short on the number of
pathologists needed, and around 20 to 25% short on the number of technologists.
The Chairperson asked about the staff complement and structure of the top
management.
Mr Robertson replied that NHLS did not have personnel or skills problems at the
top and next level of management. The regional structure was that there were
four provinces with a regional manager in charge of each province. They also
had Surveillance Services, National Institute of Occupational Health and the
National Institute of Communicable Diseases. These positions were filled. There
was a business structure with about 45 people, in which 24 were line managers.
KwaZulu-Natal was in the process of defining the positions, and the
remuneration was at the point of finalisation with the board.
Mr Gerber asked how NHLS were going to deal with the issue that their business
was growing rapidly, at 20%, but their staffing was not increasing at a
complementary rate. He asked if they had adequate capacity..
Mr Robertson replied that the pathologists were under the control of the NHLS
and with a joint effort with medical school there was more training of pathologists.
Since the inception of the 4 to 5 year programme they graduated about 34
students. This was a dramatic increase from the previous years. However, as far
as technologists went there was a dual function between the Department of
Education and the NHLS. In this field there were insufficient graduates and
people interested in registering in medical technology. Insofar as access to
professions was concerned there was a high failure rate of students and that
was the root cause of the shortage. NHLS had tried to work with the
universities of technology to try to establish an examination that acted as an
exit point that would be acceptable to the Health Professions Council to ensure
that students did not go through the process twice.
The Chairperson asked why there was an increase in the temporary staff.
Mr Robertson replied that middle management had just been relocated to the
contracts staff. The temporary staff has not been distorted but was only a
redefinition of the position. The temporary staff stayed with the department
for four years, and upon graduation either they were employed by the NHLS or
they went into private practice.
The Chairperson asked whether the question of the evaluation of inventories had
been satisfactorily resolved.
Mr Robertson replied that at the end of March 2005 NHLS did not have an
inventory number which rolled over to 2006, but at the end of 2006 it had a
full inventory of the whole organisation. This was no longer an issue.
The Chairperson asked about the question of title deeds for land and building,
as it appeared from the last four audits that there had been no developments.
Mr Robertson replied that he fully anticipated the issue to crop up again in
2007 but it would more likely disappear in 2008. The properties involved were
properties in Port Elizabeth, Bloemfontein and Johannesburg which were in the
various stages of transfer. This transfer was tied up in the three entities of
Departments of Land, Public Works and the NHLC.
The Chairperson noted that the accounting control on grants had been a
challenge to NHLS for the past three years
Mr Robertson replied that NHLS would probably carry this matter also into 2007,
but NHLS was currently working with the auditors to try to find a model, and
that would be shown in the report. The
grants generally were not funded by the NHLS and the potential grant holders
would send out numerous applications to NGOs, governments and other
institutions for grants, and often they did not know the status of the
applications. However, once the grants were received by the NHLS they were
properly disbursed and managed.
The Chairperson noted that for three years running the AG had reported that the
materials framework should have been included in the strategic plan.
Mr Robertson replied that in the earlier periods NHLS put in authority levels
throughout the organisation, and this had seemed to be effective enough.
However, NHLS had finalised a full materials framework at the beginning of this
year and this would be approved by 8 March.
The Chairperson asked why the prevention plans had not been implemented for
three years running.
Mr Robertson responded by saying that some issues were caused by inadequate
capacity, including the lack of a company secretary. However, one had been appointed
last year. He added that the prevention plan was part of the risk management
plan and the prevention plan had been held back so that more detail could be
included. This was approved last year.
The Chairperson asked if NHLS had adequate capacity to carry out and monitor
the full prevention plan.
Mr Robertson said that NHLS had passed some of the mark downs and the final
mark downs would be in the middle of this year. It would include exposure,
publicity and the rollout of the staff.
The Chairperson asked how it was possible that NHLS had an audit committee that
met six times in the year, but for the third year running there was no complete
register of members’ interests.
Ms Baloyi, NHLS replied that to a great extent the finalization of the members’
interests register had been a result of the capacity problem that resulted from
no company secretary. However, because of the recent appointment NHLS was
resolving the issue. It used to use a declaration form. This issue was being
prioritized.
The Chairperson asked if she was saying that there were disputes over the
declaration form.
Ms Baloyi replied that the situation was not exactly a dispute. Some members,
having different views, would argue from different perspectives, which led to a
delay in resolution of the issue. It would be resolved.
The Chairperson asked how much work was completed during the
disagreements.
Ms Baloyi replied that the register was important, and did not believe it
should have necessarily been pushed through because it was not core priority
Mr Trent asked if NHLS had a contract now.
Ms Baloyi replied in the affirmative.
Mr Trent suggested that they find about 20 people to sign it.
Ms Baloyi replied that she was not expecting this to be an issue.
The Chairperson asked how NHLS would characterise its relationship with the
South African vaccine producers.
Mr Robertson replied that the vaccine producers was a wholly owned subsidiary
in the NHLS. The historical background was that the vaccine producing portion
was moved to Biovac but the anti venom portion was left with the NHLS.
The Chairperson asked how NHLS characterised the money it gave to its
subsidiary. He asked if the funds were loans or grant, and, if they were loans
how would NHLS get them back.
Mr Robertson replied that these were loans that were treated like grants.
Mr Trent asked whether a public entity could own a private limited entity.
Mr Robertson and the National Treasury replied that they would give written
opinions on this issue.
Mr Gerber asked why the bad debts had doubled and if NHLS could provide details
of the services outsourced.
Mr Robertson replied that bad debts were a peculiar problem with an
organisation like NHLS that did not deal directly with the patients but came
via another entity. In terms of the public sector it did not have bad debts at
all. In terms of patients that were private initially or who converted to
private, or foreign patients the province and NHLS would each collect their own
funds.
Mr Trent asked for elaboration of the board salaries.
Mr Robertson replied that only the board members that were not employed by the
government were remunerated and this was based on the number of board meetings
and committees they attended.
The South African National Aids Trust (SANAT): Current position
Ms LM Mashiane (ANC) asked whether it would not be wise to transfer trust
funds to a less dormant entity.
Mr Mseleku replied that this matter was one that was still under discussion. He
however, promised to combat the dormancy of the trust. The major reason for the
dormancy was the South African National Aids Trust (SANAC). If this was not an
operational body then inadvertently the SAAT became dormant. It was a matter of
public knowledge that SANAC was an entity under review and the review was only
being finalized now.
Secondly, since the activities of SANAC were related to the review and the
development of the national strategic plan a lot of the funding was being used
to finalize the programme, such as facilitating sector summits for young
people. At this stage they were a number of these related activities. It would
not be possible to transfer to SANAC because the trust had been established to
assist SANAC. The matter was still under investigation and discussion by the
trustees.
The other problem was that the role of SANAC was ambiguous as it was not clear
whether it was a forum for programme implementation or it was a forum for
sharing ideas. However, this had been reviewed and it was concluded that it
could not be given certain authority as it would have to deal with serious
bureaucracy and plans. This was nevertheless a still-contested terrain and
there would have to be resolution on the status of SANAC before moving on. He
said the trust was not properly constituted. It composed of the Deputy
President, two Ministers and himself as Direcgtor General, with the deputy
minister accountable to him, which did not sit well with co-operative
governance.
Ms Mashiane remarked that their expenditure had been wasteful.
Mr Mseleku replied that the decisions taken that led to SANAC and the trust
occupying space were properly taken. Unfortunately, when the contract was
signed then it was binding and had to run its course. In the process it led to
some wastefulness of the funds. The decision, which was supposed to be useful,
ended up being wasteful and this was unfortunate.
Ms Mashiane asked about the relationship between the trust and global funds.
Mr Mseleku replied that the trust was an independent trust and had nothing to
do with the global fund.
The meeting was adjourned.
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