2.   The Budgetary Review and Recommendations Report of the Portfolio Committee on Health, dated 24 October 2018

The Portfolio Committee on Health (the Committee), having assessed the performance of the Department of Health (the Department) and its Entities, against its mandate and allocated resources, reports as follows:


The Money Bills Procedures and Related Matters Amendment Act (Act 9 of 2009) sets out the process that allows Parliament to make recommendations to the Minister of Finance to amend the budget of a national department. The Portfolio Committee compiles a Budgetary Review and Recommendation Report (BRRR) that evaluates the effective, efficient and economic use of allocated resources and make recommendations. These are with reference to the following:

  • Medium-term estimates of expenditure, its strategic priorities and measurable objectives;
  • Prevailing strategic plans;
  • Expenditure reports relating to the department published by National Treasury in terms of Section 32 of the Public Finance Management Act (PFMA) (No.1 of 1999);
  • Financial statements and annual reports of the departments;
  • Reports of the committee on Public Accounts relating to the department; and
  • Any other information requested by or presented to a House or Parliament.

In assessing the performance of the Department of Health and its Entities for the financial year 2017/18, the Committee reviewed and analysed the following reports and/or documents:

  • 2017 Estimates of National Expenditure;
  • Strategic Plan of the Department of Health (2015/16 – 2019/20);
  • Annual Performance Plan of the Department of Health (2017/18);
  • Annual Report of the Department of Health (2017/18);
  • Annual Report of the South African Medical Research Council (2017/18);
  • Annual Report of the National Health Laboratory Services (2017/18);
  • Annual Report of the Office of Health Standards Compliance (2017/18);
  • Annual Report of the Office of the Health Ombud (2017/18);
  • Annual Report of the Council for Medical Schemes (2017/18);
  • Annual Progress Report of the Compensation Commissioner for Occupational Diseases (2017/18);
  • Annual Progress Report of the South African Health Products Regulatory Authority (2018);
  • Report of the Auditor General South Africa (2017/18); and
  • Report of the Financial and Fiscal Commission (2017/18).


2.1.Strategic Priorities of Government

  1. National Development Plan

The National Development Plan (NDP) forms an integral part of policy plans within all government departments, including the Department of Health, charting a path to prosperity and improving the lives of all South Africans within various sectors. The NDP articulates nine health-related goals that broadly endorse a health system that raises life expectancy, reduces infant mortality and the occurrence of HIV and AIDS, and significantly lowers the burden of disease. The plan highlights demographics and disease burden, health systems and the social and environmental determinants of health as being key areas in the country’s health system that need to be addressed. This would require cross-sectorial cooperation amongst the various government departments. 

2.1.2.State of the Nation Address 2017

The 2017 State of the Nation Address (SONA) highlighted the following main health-related issues:

  • The deaths of 94 psychiatric patients who were moved from care at the Life Esidimeni Hospital in Gauteng was acknowledged as being deeply distressing and SONA 2017 extended condolences to the relevant families. The instruction was given to the Minister of Health to fully and speedily implement the Health Ombud’s recommendations without reservation. Recognition was given to the call for a review of the National Health Act (No. 61of 2003) and the Mental Health Act (No.17 of 2002) in order that certain powers and functions may revert to the National Minister of Health. SONA 2017 committed Government to providing support to the affected families.
  • The NHI continues to be Government’s flagship project aimed at moving towards Universal Health Coverage. Started in 2012, the NHI will be implemented over 14 years in three phases.

2.2.Strategic Priorities of the Department of Health     

In addition to the NDP (vision 2030), the health sector is also guided by the health sector Ten Point Plan, and the United Nations (UN) Sustainable Development Goals (SDGs). The Department’s five-year strategic goals are to:

  • Prevent disease and reduce its burden and promote health.
  • Make progress towards universal health coverage through the development of NHI scheme, and improve the readiness of the health facilities for its implementation.
  • Re-engineer primary healthcare by: increasing the number of ward-based outreach teams, contracting general practitioners, and district specialist teams; and expanding school health services.
  • Improve health facility planning by implementing norms and standards.
  • Improve financial management by improving capacity, contract management, revenue collection and supply chain management reforms.
  • Develop an efficient health management information system for improved decision-making.
  • Improve the quality of care by setting and monitoring national norms and standards, improving system for user feedback, increasing safety in health care, and by improving clinical governance. and
  • Improve human resources for health by ensuring adequate training and accountability measures.

In 2016/17 the Committee recommended that the Department of Health engages National Treasury to establish measures for increased funding to ensure that all chronic patients receive medicines through the Centralised Chronic Medicine Dispensing and Distribution (CCMDD) programme. The National Treasury engaged the Department of Health, of which National Treasury committed to increase funding for the programme from R100 million to R200 million during the 2017/18 adjustment budget. Over the 2018 MTEF, part of the additional funding for the National Health Insurance will be used to further augment the funding for CCMDD.

The Committee recommended that the Department of Health engages National Treasury to establish measures for funding to ensure a fully functional Traditional Practitioners Council. According to National Treasury, in 2017 the Department of Health requested R7.1 million to fund the operations of the Council. However, due to the constrained fiscal outlook, the scope to provide for additional funding has been limited.


With regards to the new funding model for the NHLS, both the National Treasury and Technical Committee of the National Health Council recommended that simulations of the new proposed funding model (a shift from fee-for-service) be conducted to assess its practical implications. Simulations are being conducted parallel to the fee-for-service model, with both invoices being shared with provinces. During the 2018 MTEF budget process, the NHLS indicated that the simulations have shown savings in the first quarter of 2017/18, however there was a lack of details on the methodology used to calculate the savings and detail on what the model actually entails. National Treasury recommended that a full scale simulation (for a full financial year) be conducted to assess the true implications of the model and presented to provinces.


The Committee recommended that the Department of Health engage National Treasury and provincial Treasuries in resolving the disputes on historical debt to the NHLS. National Treasury, through the Technical Committee on Finance and the national and provincial MTEC budget meetings reinforced a view that current invoices are settled given the financial position of the NHLS. KwaZulu-Natal provincial department has increased its operational budget to the NHLS from the 2017/18 financial year. Gauteng provincial department’s operational budget to the NHLS will increase from 2018/19. KwaZulu-Natal has reached a debt settlement agreement on historic debt with the NHLS, however needs to pay the agreed amounts. Gauteng needs to enter into a similar agreement.




  1. Department and Entities


The Department and three of its entities (Office of Health Standards Compliance, South African Medical Research Council and Council for Medical Schemes) received unqualified audit opinions with findings. AG indicated that two entities (CMS and SAMRC) have regressed receiving unqualified audit opinions with findings, from clean audits in the past two years. The regression of the CMS was due to inadequate review of the annual financial statements by senior management prior to submission for audit as well as non-compliance with laws and regulations as well as ineffective and appropriate steps not taken to prevent irregular expenditure for the procurement of consultants. SAMRC regressed due to non-compliance with laws and regulations; goods were procured from suppliers that do not meet the local content requirement. The OHSC showed an improvement, receiving an unqualified audit opinion with no material findings.


The AG indicated that financial statement preparation remains a concern as material adjustments were effected to Annual Financial Statements submitted for audit by the NDoH, NHLS and CMS. The NHLS received a qualified audit opinion, due to a number of compliance findings particularly on procurement processes. The CCOD is making progress, has submitted financial statements for the 2014/15 financial year, audit is currently in progress.


The AG evaluated the usefulness and reliability of the reported information for Programme 2 and Programme 5. The AG found material issues in relation to the reliability of performance information on selected performance indicators under Programme 5. Furthermore, the AG highlighted that Programme 5 spent 99.58% of its budget and achieved 31% (9 of 29 targets).  


Irregular expenditure incurred by entities decreased from R967 million to R693 million this financial year. The main contributors to irregular expenditure was the NHLS, incurring R597.8 million, followed by the Department (R73 million), CMS (R17.6 million), OHSC (R2.9 million), and SAMRC (R1.65 million). 81% of the irregular expenditure is estimated to be due to non-compliance.


The AG recommends that the Committee requests management to provide feedback on the implementation and progress and of the action plans to address poor audit outcomes during quarterly reporting. The Committee should request management to provide quarterly feedback on status of key controls, project management and key projects. Furthermore, the Committee should request a list of action taken against transgressors on a quarterly basis for all irregular expenditure incurred.


In addition, the AG also audited Information Technology (IT) of the Department of Health and presented numerous findings. These included inadequate IT security management controls; inadequately designed backup policy; service level agreements with service providers not formalized; and IT Governance Framework adopted that does not address key aspects.






  1. Provincial departments


The AG reported that the audit outcomes of the portfolio show stagnation in the 2017/18. Eastern Cape, Free State, Gauteng and Western Cape retains its unqualified audit outcomes. the audit of North West provincial department has not been concluded due to protests that occurred in the province. The AG noted material findings on usefulness and reliability of data, due to inadequate information systems for the collection of data; inadequate implementation of policies and procedures; manual control processes; and poor filing systems.


Irregular expenditure has reduced, from R6.5 billion in 2016/17 to R5.6 billion in 2017/18. The main contributors to irregular expenditure were KwaZulu-Natal (R1.8 billion) and Gauteng (R1.7 billion). Unauthorised expenditure increased from R237 million in 2016/17 to R275 million in 2017/18.




The FFC reported that the health budget remains under pressure notwithstanding the 13.6% average budget allocation. Gauteng and KZN have the highest provincial health budgets, R42 million and R40 million respectively.


In terms of economic classification, Compensation of Employees (COE) spending constitute 67.9% of total current payments in 2017/18 declining from 68.6% in 2015/16. Limpopo (75%), Eastern Cape (71%) and Free State (70%) have higher than average COE expenditure. Health COE budget spending is likely to experience additional pressure arising from minimum wage agreement to Community Health Workers and absorption of the current cohort of doctor interns from the Cuban medical programme. Non-negotiable budget line items show the highest budget growth. Payments for capital assets are low and not in line with NHI goals. The FFC stated that control of COE expenditure should be accompanied by efforts to balance the distribution of health care professionals within and across provinces. The FFC highlighted that control of COE expenditure should remain a key oversight focus area in the foreseeable future.


The FFC noted that accruals and medico-legal claims remain the greatest risk to provincial fiscal health, amounting to R14 billion and R56 billion respectively, in 2016/17. Medico-legal claims are increasing exponentially in the Eastern Cape. The FFC is of the view that while accruals are a justifiable result of budget pressures, they are mainly caused by poor financial governance.


Regarding health conditional grants spending and performance, the Comprehensive HIV/AIDS Grant was allocated R15.3 billion in 2017/18 and achieved 100% spending performance. The Health Revitalisation Grant achieved 97% spending from the allocated R5.4 billion in 2017/18. The FFC noted concerns raised by the AG regarding the availability of reliable data to verify deliverables associated with this grant. the Health Professions Training Grant is earmarked for review in 2018. The National Tertiary Services Grant performance is often affected adversely by the lack of medical specialist, equipment and reduction of services at facility level. The FFC raised concern around the continuous underspending of NHI grant given the imminent introduction of the NHI Fund as well as the constant iteration of the grant which creates implementation uncertainties.


The FFC recommends that National and provincial treasuries develop a framework for determining major financial strain with clear measurable financial and non-financial factors that that can be monitored, reported and used to prompt automatic fiscal adjustments. The National Treasury and the Department of Health should allocate part of the 2018/19 MTEF health infrastructure allocations to gradually set-off expenditure accruals which have arisen from unavoidable demands for which allocated budgets were depleted.  National Treasury should ensure that the framework for health infrastructure conditional grants accommodate flexibility during periods of protracted fiscal constraint so that provinces can be allowed to re-orientate their package of available capital allocations towards maintenance. NDoH needs to improve performance planning and monitoring tool. Spending on NHI Grant needs to focus on activities that form the core of the health system for NHI delivery. Encroaching on conditional grants by new unrelated priorities must be minimised. Parliament should focus its oversight efforts on under-achieved targets where there has not been 100% expenditure against the budget.







This section provides an overview and assessment of reported financial performance of the Department for 2017/18.



For 2017/18, the Department received a budget of R42.7 billion, of which it spent R42.4 billion, which is 99.5% of the available budget, down from 99.7% in the previous financial year. The Department underspent a total amount of R220.9 million (0.5% under-expenditure) up from R101.2 million (0.3% under expenditure), in the previous year. This interrupts a positive trend of reducing under-expenditure.


Table 1: Appropriation Statement 2017/18





Final Appropriation

Actual Expenditure

Over/under expenditure

Final appropriation

Actual expenditure

Over/under expenditure



500 541

478 160

22 381

448 820

442 877

5 943


NHI Health planning and system enablement

924 954

841 540

83 414

690 593

679 170

11 423


HIV and AIDS, TB and Maternal, Child and women’s health

18 295 310

18 279 941

15 369

16 006 567

15 965 182

41 385


Primary Health Care Services

263 343

253 771

9 572

238 055

225 731

12 324


Hospitals, Tertiary Services and Workforce Development

20 914 800

20 828 771

86 029

19 496 416

19 468 716

27 700


Health Regulation and Compliance

1 746 609

1 742 508

4 102

1 716 965

1 714 510

2 455



42 645 557

42 424 690

220 867

38 597 416

38 496 186

101 230


In terms of Economic Classification, underspending under Compensation of Employees is attributed to restructuring during the financial year. Most of the underspending is under Goods and Services, largely due to the delay in receiving invoices for the renewal of a software licence from the supplier, procurement of minor assets for medicine stock systems that took longer than expected and the Diagnosis Related Grouping (DRG) project that was not implemented. Not all Non-profit Organisations (NPOs) applied for funding from the HIV and AIDS cluster. R28.4 million under Programme 2 was incorrectly classified as a transfer payment instead of Goods and Services.


Underspending on purchase of Capital Assets is due to delays in infrastructure projects as a result of technical complexity and contractual issues with some contractors appointed. Capital equipment and hardware for the Medicines Stock System were delayed by SITA.


During the financial year, a total of R61.1 million (previous financial year R176.1 million) was approved for virements. This includes, amongst others, R22.1 million within Cost of Employees, and R29.1 million within Goods and Services between programmes.


Rollover of R19.8 million was allocated during the Adjustments Budget for the comprehensive HIV, AIDS, and TB conditional grant to support malaria outbreaks in Limpopo and Mpumalanga.


There was no unauthorised expenditure reported, as in the previous two financial years. However,

fruitless and wasteful expenditure continues its upward trend. From zero in 2015/16, to R402 000 in 2016/17, fruitless and wasteful expenditure increases to R1.1 million in the financial year under review. This is largely constituted by penalties and interest due to a late payment to SARS. The Department is also investigating fruitless and wasteful expenditure from no-shows and penalties from motor vehicle licences which were renewed late. The AG, reported that the Department had R73.4 million of irregular expenditure, a sharp increase from R1.4 million in the previous financial year.


Exemptions and deviations received from the National Treasury amounted to R30.1 million, including R27.6 million for supply and delivery of Oncology Equipment at Addington Hospital.


  1. Programme Performance


This section provides an analysis of the expenditure performance of the Department. The analysis focuses particularly on spending of the allocated budget in each of the six main programmes.


·Programme 1: Administration – This programme was allocated R500.5 million and spent R478.2 million (95.5%, down from 98.7% in the previous year) with an under-expenditure of R22.4 million (4.5%).


·Programme 2: National Health Insurance, Health Planning and Systems Enablement –  This programme was allocated R925 million (up from R690.6 million in the previous year) with an actual expenditure of R841.5 million (90.9%). This shows an under-expenditure of R83.4 million or 9.1 %.


·Programme 3: HIV and AIDS, Tuberculosis, Maternal and Child Health – This programme was allocated R18.295 billion (up from R16.006 billion) and spent R18.279 billion, which is a 99.9% expenditure rate. Under-expenditure amounted to R15.4 million. 98.5% of this programme’s budget was allocated to the HIV and AIDS sub-programme. The HIV and AIDS sub-programme received R18.014 billion and spent 99.94%. There is 9.5% under-expenditure in the Women’s Maternal and Reproductive Health sub-programme, which has a relatively small budget of R15.7 million, and only R14.2 million (90.5%) of the final appropriation spent yet this is one of Government’s priority areas.


·Programme 4: Primary Health Care Services – The budget allocation for this programme increased from R238.1 million in 2016/17 to R 263.3 million in 2017/18. This programme’s budget allocation is even smaller than Programme 1: Administration’s budget.   The programme shows expenditure of R253.8 million, with under-expenditure of R9.6 million (3.6%). 


·Programme 5: Hospitals, Tertiary Health Services and Human Resource Development – This programme has spent nearly 100% (R20.829 billion) of its R20.915 billion allocated funds. This is in keeping with the previous financial year spending pattern.  The largest portion of the funds for this programme goes to the Tertiary Health Care Planning and Policy sub-programme (R11.680 billion, 55.8%), followed by the Health Facilities Infrastructure Management sub-programme (R6.424 billion, 30.7%) and the Human Resources for Health sub-programme (R2.658 billion, 12.7%). The remaining sub-programmes make up less than one per cent of the programme’s budget.


·Programme 6: Health Regulation and Compliance Management – This programme has spent 99.8 % of its appropriated funds, amounting to R1.743 billion which is up from R1.715 billion (99.9%) expenditure in the previous financial year.


  1. Conditional Grants


Total spend on conditional grants was at 98.6% or R37.3 billion against a total adjusted budget of R37.8 billion resulting in under spending of 1.4% or R516 million; compared to 99.0% or R33.9 billion spent in the previous financial year.


Major contributors to the underspending is the Health Facility Revitalisation Grant, spending 94.1%. The Health Professions Training, National Tertiary Services and Comprehensive HIV/AIDS and TB Grants spent 98.1%, 99.6% and 99.6% respectively. Rollover was requested for unspent funds linked to committed projects.




Table 2, below, provides an overview of the number of targets achieved and not fully achieved. It also indicates the percentage of budget spent. Overall, the Department’s performance is marginally better in terms of percentage with 73 out of 114 targets or 64% achieved, compared to the previous year when 81 of 145 targets (or 56%) was achieved. 





Table 2: Programme Performance Overview


Number of targets


Not fully achieved

Percentage  Achieved

Percentage Achieved

in previous year

Budget Spent

  1. Administration







  1. Health planning and system enablement







  1. HIV and AIDS, TB and Maternal and Child Health







  1. Primary Health Care Services







  1. Hospitals, Tertiary Services and Workforce Development







  1. Health Regulation and Compliance















  1. Programme Performance


This section provides an analysis of the performance of the Department under each of its six main programmes. The analysis focuses particularly on the overarching targets and achievements under each programme and highlights some of the challenges that prevented the Department from achieving these target.


·Programme 1: Administration – Four (4) out of seven targets (57% down from 75%) are reported achieved in the financial year under review. It should be noted that the Department’s targets increased from six (6) in 2012/13 to eleven (11) in 2015/16 declining again in 2017/18 to seven (7). Whilst the Department met its target of achieving an unqualified audit opinion, only four (4) provinces also achieved this (target 5 provinces). This year, the Eastern Cape, Free State, Gauteng and Western Cape Department of Health again achieved unqualified audits. The North West Province audit is outstanding due, in large part, to protest action in the province. The vacancy rate at the Department is at 12.5% (target 10%).


·Programme 2: National Health Insurance, Health Planning and Systems Enablement – Only 21 of the 27 targets (78%) were achieved. The Final White Paper on NHI was finalised and gazetted as a policy document, however the NHI Bill was gazetted for public comment. The Centralised Chronic Medicine Dispensing and Distribution System has 1.5 million patients, an increase from 1.1 million in 2016/17. The discussion paper on revenue retention models at central hospitals was presented to the Health sector’s 10 x 10 with Treasury. The Amendment Bill of the Traditional Health Practitioners (THP) Act was drafted. The NHI Phase 1 evaluation was conducted. The South African Demographic and Health Survey 2016 key indicator report was published.


·Programme 3: HIV and AIDS, Tuberculosis, Maternal and Child Health – The Department fully achieved only 15 out of 21 targets (last year 25 out of 48 targets (52%), and the previous year 37 out of 57 targets or 65%). This means that the Department spent 99.7% of its allocated budget under this programme and only achieved approximately 71% of its targets. The number of targets in this programme has been reduced significantly over the past few years. Nearly a third of the planned targets were not fully achieved.  


·Programme 4: Primary Health Care (PHC) Services –  In terms of performance, twenty (20) out of 25 targets or 80% (last year 18 of the 23 targets or 78%) were fully achieved. 


The Department reports 3 437 clinic committees were audited (though it is unclear how many were functional or effective).  1 507 PHC facilities in the 52 districts qualify as Ideal Clinics (target was 1000). 3 323 functional Ward based Primary Health Care Outreach Teams (WBPHCOTs) were achieved (target was 2000).


With regard to Malaria, the Department again did not reach its target. Malaria cases increased from 0.4 malaria cases per 1000 population at risk last year to 2.1 malaria cases per 1000 population at risk this year (target was 0.2 malaria cases per 1000) as there were upsurges in malaria in Limpopo and Mpumalanga, as well as an increase in cross-border malaria cases.


The Framework for National Health Commission was approved. For NCDs, the Department conducted orientation on the National guide for healthy meal provision in the workplace orientation for 87 government departments (target was 27). The testing of salt content in foods was conducted on 13 regulated food categories. Three (3) media campaigns creating awareness of risk factors that contribute to NCDs were run. Fourteen (14) District Mental Health teams were established (target was 10).


·Programme 5: Hospitals, Tertiary Health Services and Human Resource Development – The number of targets for this programme has been increased from 28 to 29. Only nine (9) of the 29 targets (31%) were achieved (last year 7 of the 28 targets or 25% were achieved). This is despite having spent nearly the entire budget for the programme. As described above, the AG reported material findings on the reliability of performance information in this programme and this must be borne in mind when analysing the information provided. For example, for the indicator on percentage of backlog eliminated for blood alcohol tests, the AG determined an audited value of 116%, whilst the Department reported 78%. In addition, the AG determined an audited value of 23% for percentage backlog eliminated for toxicology tests, whilst the Department reported 27.7%.


Again, four of the five performance indicators related to improving quality of health infrastructure were not met, yet nearly 100% of the budget was spent. Only 107 facilities (54.3%, target was 197 facilities) were maintained, repaired and/or refurbished in NHI Districts. Only 79 facilities were maintained, repaired and/or refurbished outside NHI Districts (24.6%, target was 321). Only one hospital was constructed or revitalised (12.5%, target was 8).

In terms of improving management of health facilities through the Health Leadership and Management Academy, again neither of the two new performance indicators were achieved. Only 19 hospital managers and 28 managers responsible for PHC accessed the coaching and mentoring programme (target was 80 Hospital managers and 800 PHC facility managers) as there were insufficient resources. There was also very slow uptake by managers using the knowledge hub information system.


Regulations for Emergency Care Centres were not published for public comment.


None of the indicators for developing and implementing health workforce staffing norms and standards were met. Human Resources for Health (HRH) norms for district and specialised hospitals were not presented at TechNHC nor approved yet.


Biannual monitoring reports were produced to monitor facilities that render services for the management of sexual and related offences.


·Programme 6: Health Regulation and Compliance Management – The number of targets under this programme has decreased from 18 in 2015/16 to 8 in 2016/17, to only 5 in 2017/18 of which four (4) targets or 80% were achieved. The first Board of the South African Health Products Regulatory Authority (SAHPRA) was appointed by the Minister for a three-year term of office, and the acting Chief Executive Officer (CEO) was appointed by the Board. Governance reports of 4 health entities and 6 statutory health professional councils were produced.




  1. Office of Health Standards Compliance

The Office of Health of Standards Compliance (OHSC) is established in terms of Section 77 of the National Health Act (NHA), to promote and protect the health and safety of the users of health services. It is listed as a Schedule 3A Public Entity in terms of the PFMA, and is governed by the Board and the Chief Executive Officer (CEO). The OHSC is assigned specific function namely, to:


  • Advise the Minister on matters relating to norms and standards for the national health system and the review of such norms and standards, or any other matter referred to it by the Minister;
  • Inspect and certify compliance by HEs with prescribed norms and standards, or where appropriate and necessary, withdraw such certification;
  • Investigate complaints about the national health system;
  • Monitor indicators of risk as an early-warning system about serious breaches of norms and standards and report any breaches to the Minister without delay;
  • Identify areas and make recommendations for intervention by a national or provincial department of health or municipal health department, where necessary, to ensure compliance with prescribed norms and standards;
  • Recommend quality assurance and management systems for the national health system to the Minister for approval; and
  • Keep records of all OHSC activities.


Performance Information


OHSC has four programmes namely; Programme 1 – Administration; Programme 2 – Compliance Inspectorate, Certification and Enforcement; Programme 3 – Complaints Management and Ombud; and Programme 4 – Health Standards Design, Analysis and Support.


Programme 1: Administration –  The purpose of this programme is to provide the leadership and administrative support necessary for the OHSC to deliver on its mandate and comply with all relevant legislative requirements.


Programme 1 achieved five (5) of six (6) targets. The reason for the non-achievement of the one target is attributed to the promulgation of norms and standards in Quarter 4 of the reporting period. The allocation for this programme was R50.1 million and the expenditure was R49.6 million. The under-expenditure was slightly over R422 thousand.


Programme 2: Compliance Inspectorate, Certification and Enforcement – The purpose of this programme is to manage the inspection of health establishments in order to assess compliance with national health system’s norms and standards as prescribed by the Minister, certify health establishments as compliant or non-compliant with prescribed norms and standards and take enforcement action against non-compliant health establishments.


The number of achieved targets was two (2) with the other two (2) partialy achieved. During the reporting period, this programme inspected 923 public sector health establishments. This represents just over 24% of public sector health establishments in the country and exceeded the target of 18%. With respect to certification and enforcement, draft procedures were developed but not implemented.  Programme 2 had a budget allocation of R49.1 million. It spent slightly over R48.5 million with the under-expenditure of R512 thousand.


Programme 3: Complaints Management and Ombud – The purpose of this programme is to consider, investigate and dispose of complaints relating to the non-compliance with prescribed norms and standards in a procedurally fair, economical and expeditious manner.


Three (3) of four (4) targets were achieved. The failure to one of the targets is attributed to the shortage of human resources as per increased complaints from 730 in 2016/17 to 1122 in 2017/18. as well as delayed responses from health establishments to OHSC requests for information on complaints. During the reporting period, the budget allocation for this programme was  R14.7 million. By the end of the reporting period, the programme spent over R16.2 million resulting in over-expenditure of R1.4 million.


Programme 4: Health Standards Design, Analysis and Support – The purpose of this programme is to provide high-level technical, analytical and educational support to the work of the OHSC in relation to research of norms and standards; guidance on compliance with norms and standards, analysis of data collected and the establishment of communication networks with other stakeholders.


Programme 4 achieved four (4) of its five (5) targets. One of the key reported challenges among the programme is shortage of human resources. In this programme, the shortage of staff is manifested by inability to perform some of its functions related to data analysis, standards development as well as guidance and support. During the reporting period, this programme had an allocation of slightly over R11.7 million. The programme spent only R6.9 million of its allocation. This resulted in considerable under-expenditure of over R4.7 million.


The entity generated a revenue of R136 million compared to R101.7 million in 2016/17. The entity reported a surplus of slightly above R24.4 million, which is an improvement compared to the previous financial year, wherein it had R16.1 million surplus. Notably, the increase is mostly driven by compensation of employees, which increased from R55 million in 2016/17 to and R74 million in 2017/18.


The OHSC obtained an Unqualified Audit Opinion.


  1. Office of the Health Ombud

During the reporting period (2017/18), Office of the Health Ombud (OHO) operated without capacity and budget, which made its mandate difficult to almost impossible. This is due to ambiguity of the National Health Act, which does not specify the allocation of resources to the OHO. The non-allocation of capacity and budget has created pressure on both OHO and Office of the Health Standard Compliance as the two entities share office space and human resources.


To date, the National Department of Health (NDoH) and Public Service and Administration (DPSA) have approved the macro organisational structure, which is in line with international benchmarks and practice. The approved structure/organogram requires urgent allocation for the entity to effectively fulfil its mandate. The proposed number of staff complement for this structure is 25-30. The organogram consists of the following components:


  • Office of the Health Ombud: The purpose is to oversee investigations and disposal of complaints relating to non-compliance within health system. To further provide leadership, strategy and capacity in a much needed area and in accordance with best international benchmarks;
  • Office of the Deputy Health Ombud: The purpose is to manage the provision of assistance to the health Ombudsperson in investigating non-compliance with any national health system matters:
  • Legal Services (and Parliamentary Affairs): The purpose is to manage the provision of reliable and professional legal services to the OHO;
  • Complaints Management: The purpose is to manage the receipt of complaints about the alleged acts, omissions, maladministration and systematic problems relating to health;
  • Investigations Management: The purpose is to manage and monitor the investigations and report on recommendations made by the Ombud;
  • Monitoring, Advocacy and Citizens Engagement: The purpose is to managed advocacy citizen engagement and provide monitoring and evaluation services; and
  • Corporate Services: The purpose is to manage the provision of corporate management services.


Performance Information


Key Achievements


In pursuit of implementing its mandate, the OHO achieved various successes. The following are reported in the 2017/18 financial year:


  • Signed Memorandum of Understanding (MoU) with the Public Service Commission;
  • Signed another MoU with Public Protector South Africa;
  • Won court applications challenging Life Esidimeni Report;
  • Have its Life Esidimeni’s recommendations being implemented and reported to periodically;
  • Influenced the discontinuation of the Gauteng Marathon Project; and
  • Influence the close down of unlicensed NGOs and patients being sent back to safe health establishments.


Key Concerns


The following are some of the key constraints that are reported during 2017/18:


  • The Office has no appropriated budget in order to fulfil its mandate as per the approved structure;
  • Attachment and reliance on the OHSC in meeting international best practice;
  •  The Office has no mandate and realistic performance indicators distinct from OHSC; and
  • Continues to receive complex complaints that relate to legislation such as the National Health Act and the Constitution with inadequate human capital.


  1. National Health Laboratory Services

The NHLS is managed according to the provisions of the National Health Laboratory Service Act, 2000 (Act No. 37 of 2000); the NHLS Rules which were gazetted in July 2007; and the PFMA. It is a Schedule 3A Public Entity, governed by the Board and the Chief Executive Officer (CEO)


Performance Information


NHLS has five programmes namely; Programme 1 – Administration; Programme 2 – Surveillance of Communicable Diseases; Programme 3 – Occupational Health and Safety; Programme 4 – Academic Affairs, Research and Quality Assurance; and Programme 5 – Laboratory services.


Programme 1: Administration – This programme plays a significant role in the delivery of the NHLS services through the provision of a range of support services comprising of organisational development, human resources, labour relations, information technology, property management, security services, legal, communication and an integrated planning function.


Programme 1 achieved only 10 targets, and failed to achieve 11 other sets of targets. This programme was allocated just over R890 million and only spent R212 million. The under-expenditure was over R677.4 million.


Programme 2: Surveillance of Communicable Diseases – The National Institute for Communicable Diseases (NICD) is a national public health institute for South Africa, which provides reference microbiology, virology, epidemiology, surveillance and public health research to support Government’s response to communicable disease threats.


Programme 2 achieved five (5) of its six (6) targets. Target not achieved related to the appoinment  of field epidemiologists (target was 88%, only achieved 11%). Programme 2 had a budget allocation of R367 million for the reporting period, which is an increase from R 347.2 million allocation for 2016/17. This programme spent R309.4 million of its allocation resulting in under-expenditure of over R57 000.


Programme 3: Occupational Health and Safety – The National Institute for Occupational Health (NIOH) is a National Public Health Institute that provides occupational and environmental health and safety services across all sectors of the economy in order to improve and promote workers’ health and safety.


Programme 3 achieved three (3) of its four (4) targets. The one target not achieved relates to the auditing of NLS laboratories (target was 14, only 137 laboratories were audited).  The allocation to this programme was R129.3 million but the expenditure was R93.4 million with an underspending of R35.8 million.


Programme 4: Academic Affairs, research and Quality Assurance – The main purpose of this programme is to strengthen the Academic Affairs, Teaching and Research mandate of the NHLS in addition to maintaining and providing quality assured and accredited laboratory medicine. It does this by among others ensuring that research is conducted to contribute to service delivery improvement and quality.


Programme 4 has achieved seven (7) of the eight (8) targets for the reporting period. Target not achieved is in relation to ensuring that 58% of provincial tertiary laboratories has pathologists on site (achieved 47%).


Programme 5: Laboratory Service – This is the core programme of the entity whose objective is to provide cost-effective and efficient health laboratory services to all public sector healthcare providers, any other government institution within or outside the Republic that may require any such services and any private healthcare provider that requests such services. This programme is also mandated to provide any private health care with its laboratory services as when requested at the cost. Programme 5 achieved 13 of 18 planned targets during this reporting period. This programme had an allocation of slightly over R6 billion. The expenditure is shown as slightly over R5.9 billion. The underspent reflects R151 000.


The entity generated a revenue of R7.9 billion compared to R7 billion in 2016/17. Also notable is the operating expenses which have considerably gone down to (748 158) compared to (3 560 289) in 2016/17. Also import is that in 2016/17 year their financial, the performance showed a deficit, while in this reporting period, it shows a surplus of R1.3 billion.  It appears that this was done by reducing operating expenses significantly by about 79% from previous year.


Independent auditors SNG Grant Thornton gave NHLS a Qualified Audit Opinion.


  1. South African Health Products Regulatory Authority (Progress Report)

The South African Health Products Regulatory Authority (SAHPRA) was established in terms of the Medicines and Related Substances Act (Act 101 of 1965), as amended, to replace the Medicines Control Council (MCC).  The SAHPRA Board was appointed on 2 October 2017. SAHPRA became operational on the 1st of February 2018.


Performance Information


SAHPRA has five programmes namely; Programme 1 – Administration; Programme 2 – Authorisation Management; Programme 3 – Inspectorate and Regulatory Compliance; Programme 4 – Medicines Evaluation and Registration; and Programme 5 – Medical Devices, Diagnostics and Radiation Control


Programme 1: Administration – Revenue collected by SAHPRA for services rendered to the pharmaceutical and medical industry for 2017/18 amounted to R74.9 million. Revenue generated for the 10 months (1 April 2017 to 31 January 2018) while the Authority was known as MCC amounted to R63.5 million. The revenue will be accounted for and reported in the NDoH AFS and transferred to the National Revenue Fund. HR and Payroll system has been procured and will be used once staff is transferred from the NDoH to SAHPRA. Interviews for the CFO position have been concluded. 


Programme 2: Authorisation Management –  A critical task is the clearance of the inherited medical products backlog, which comprises of 16 000 applications; 8 300 new registrations and 7 200 variations. The backlog dates back to 1992 with a plan to clear the backlog within 2 years. The backlog clearance strategy involves: reducing the number of applications that require evaluation; segment and prioritise remaining applications; and design and implement new models for evaluation.


Programme 3: Inspectorate and Regulatory Compliance – Review of work completed in this programme is split between licensing and regulatory compliance. During the period under review, a large number of complaints were received by the regulatory compliance unit.


Programme 4: Medicines Evaluation and Registration – Key achievements include the appointment of the expert evaluators and advisory committees; evaluation of medicines required for HIV, TB and cancer, together with New Chemical Entities and biological medicines are being prioritized.


Programme 5: Medical Devices, Diagnostics and Radiation Control – Licensing of medical device establishments is underway while concurrently developing a framework for the registration of medical devices. The work is split among three offices in Cape Town, Durban and Pretoria. Key posts that are not on the post establishment have been identified as critical and a strategy to fill these posts was developed.


  1. South African Medical Research Council


The SAMRC purports that it has nine (9) strategic objectives that are linked with its budget and key instruments such as SDGs, NDP, 2030 and NDoH. The execution of its annual performance plan is through relevant research projects conducted through intra-and extra-mural research units, centres and offices comprising of funding of self-initiated projects and request for applications (RFAs) including capacity development initiatives.


Performance Information


Table 3, below, highlights the performance of the SAMRC during the 2017/18 reporting period.


Table 3: Programme Performance Overview







To ensure good governance, effective administration and compliance with government regulations


Compliance with legislative prescripts reflected in the final audit report relating to the processes and systems of the SAMRC



Unqualified Audit with findings  - The target of obtaining a Clean Audit was not achieved.

Percentage (%) of the 2017/18 SAMRC total budget spent on salaries and operations of all corporate administrative functions


Set target 20%, achieved 19%. The target was not achieved.



To produce and disseminate new scientific findings and knowledge on health

Number of published journal articles, book chapters and books by SAMRC researchers within intramural, extramural research units and collaborating centres at the SAMRC (Malaria, TB, HIV and Cancer), Self-Initiated Research, SHIP and Flagship projects.


Set target 700, achieved 865. The target achieved.

Number of journal articles published by SAMRC grant-holders with acknowledgement of SAMRC support during the reporting period


Set target 185, achieved 197. The target achieved. 

To promote scientific excellence and the reputation of South African health research

Number of published indexed high impact factor journal articles with a SAMRC affiliated author


Set target 650, achieved 765. Target exceeded.


To provide leadership in the generation of new knowledge in health

Number of journal articles where the first and/or last author is affiliated to the SAMRC during the reporting period  

Set target 450, achieved 490.  Target overwhelmingly achieved.

To facilitate the translation of the SAMRC research findings into health policies and practices

Number of new policies and guidelines that reference SAMRC research during the reporting period


Set target 6, achieved 9. Target achieved.

To provide funding for the conduct of health research

Number (new and renewals) of research grants awarded by the SAMRC during the reported period

Set target 168, achieved 168. Target achieved.

To provide funding for health research innovation and technology development

Number of innovation and technology projects funded by the SAMRC to develop new diagnostics, devices, vaccines and therapeutics during the reported period


Set target 40, achieved 92. Target overwhelmingly exceeded.

To enhance the long-term sustainability of health research in South Africa by providing funding for the next generation of health researchers

Number of SAMRC bursaries/scholarships/ fellowships provided for postgraduate study at masters, doctoral and postdoctoral levels during the reported period 


Set target 98, achieved 155. Target exceeded.



Key Successes


During the reporting period (2017/18), the SAMRC reached many milestones, which put the entity at highest level in research field in and out of the country. The following are some of the successes:


  • The increased allocation to Research and Innovation during the 2017/18 reporting period amounting to R198.2 million for Grant Innovation Product Development (GIPD) projects including SHIP, Newton and Strategic Projects;
  • Generating and awarding R25 million for Self-Initiated Research Grants during the reporting period;
  • The finalisation of Career Progression and Advancement Model for scientists leading to rigorous review process being conducted by specialist panel and 62 people advancing to new responsibilities;
  • The implementation of 2016/17 performance bonuses as well as successful salary negotiations being concluded within the approved budget;
  • It has successfully managed to leverage funding from other sources, which has contributed to total revenue exceeding R1 billion for the first time; and
  • It has a recognition agreement with the organised labour namely NEHAWU. The relationship with the Union is described as sound and co-operative.
  • Some of the projects of the SAMRC during this period under review are as follows:
  • Drug Discovery
  • Vaccine Discovery
  • Precision Medicine
  • Medical Devices
  • Big Data
  • Innovation Technologies
  • Strategic Health Innovation Partnerships (SHIP)
  • Population Health


Economic viability for the entity remains strong as allocation of R624 829 for 2018/19 has been approved by government through the MTEF process. Together with accumulated reserves of R289 755 and the anticipated increases in grant income, the entity will continue to operate as a going concern.


As in the previous year, the entity’s operating expenses exceeded its revenue, resulting in a deficit of R88 million this reporting period. In the previous year it had a deficit of 2.6 million. The key driver for this deficit is strong increase in operating expenses. For instance, the rising employee costs and general expenses increased above inflation (15.4%), and employee cost (18.2%), which pushed up the entity’s operating expenses. This resulted in deficit of R46.4 million with respect to performance for 2017/18.


Importantly, the statement of financial position shows that the overall entity’s healthy account.  Therefore, the Accumulated Surplus for 2017/18 is R289.7 million.


The SAMRC obtained an Unqualified Audit Opinion with findings. The AG raised concerns regarding planned targets being set conservatively due to over achievement; material misstatements in the annual performance report submitted for auditing for strategic goals 2, 3 and 4; procurement and contract management as appropriate and sufficient audit evidence could not be obtained; and poor compliance by management on preferential procurement regulations 8 (2) and 8(5) for procurement of some items from the designated sectors.


  1. Council for Medical Schemes

In terms of performance, CMS achieved 31 of the 39 indicators (79.5%) set. Some of the performance achievements during 2017/18 include:


  • Obtaining an unqualified report by the Auditor General – though this is a decline as the entity had a clean audit in the previous year;
  • Information and Communications Technology (ICT) systems up-time were maintained at over 99%;
  • 98% of clinical reviewed within 30 days of receipt from Complaints Adjudication
  • There was an increase in Prescribed Minimum Benefit (PMB) definitions published;
  • Increased research outputs to address industry challenges and contribute to policy development; and
  • Increased stakeholder interactions, training and empowerment, including enhanced publicity initiatives.


Table 4: Programme Performance Overview







Obtain an unqualified opinion issued by the AG

Unqualified opinion with findings

Obtain an unqualified opinion on performance information issued by the AG


Number of strategic risk register reports submitted to Council for monitoring per year

4 – Achieved

Ensure that 80% of physical requests for information are responded to within 30 days

97.5% Achieved. Target exceeded as most information readily available on databases subscribed to.

Minimise staff turnover to less than 10% per annum

7.1% Staff turnover Achieved

Average turnaround time of 120 working days to fill vacancies

Not achieved – one post took longer than 120 days to fill.

100% of employee performance agreements are signed

Not achieved – 86% signed, 14% not signed due to operational matters.

100% of employee performance assessments concluded

100% achieved

Number (190) of written and verbal legal opinions provided to internal and external stakeholders, per year-

267 >100% achieved due to unpredictable nature of this objective the projected number was exceeded

100% of legal matters are handled

100% achieved


Number of benefit definitions published per year.

10 - 100% achieved.


90% of clinical opinions reviewed within 30 days of receipt

Achieved - 98% was achieved, exceeding target by 8%

95% of clinical enquiries received via e-mail or telephone reviewed within 7 days

99% was achieved, exceeding target by 4%


15 MCOs applications

15 applications were accredited

8 applications by administrators and self-administered schemes accredited

Not achieved – only 6 applications were processed


7 research projects

Achieved - 9 research projects, two additional research project requests were received

A non-financial report submitted for inclusion in the annual report



20 stakeholder training and awareness sessions conducted

Achieved - 59 sessions were conducted, exceeding set target by 39

Submit CMS annual report to the Executive Authority by 31 August 2016


75% positive or neutral feedback received on CMS reputation through media monitoring tool

Achieved - 93% was achieved, exceeding target by 18%


100% governance interventions are implemented

100% achieved

All non-compliance cases against regulated entities are undertaken

100% achieved



80% interim rule amendments are processed within 14 days of receipt

Achieved - 96.3%

All annual rule amendments are processed before 31 December each year

Achieved - 100% amendments were processed



Recommendations in respect of Regulation 29 for 100% of business plans received

100% achieved

Recommendations on action plans for schemes with rapidly reducing solvency for 100% of schemes identified


Three (3) quarterly financial return reports published


Financial sections prepared for the annual report



79% of complaints adjudicated within 120 working days

68% - Not achieved, due to resignation and maternity leave by 2 staff members.


CMS received a government grant to the amount of R5.9 million in 2018. During this reporting period, the CMS had a total revenue of R160.6 million derived from revenue from exchanges and non-exchanges of goods and services, such as Accreditation fees, levies, registration and sundry income. The operating expenses for the reporting period amounted to R39.2 million, which is significantly higher compared to the total of R22.4 million incurred in the previous financial year. Considering all income received, the entity experienced an operating deficit of R4.6 million compared to a R854 000 operating surplus in the previous financial year. Irregular expenditure amounted to R28.4 million.


The CMS obtained an Unqualified Audit Opinion.  The AG did not identify any material findings on the usefulness and reliability of the performance information for 4 of the 5 selected programmes (Programmes 2, 6, 7 and 8). For Programme 3 however, the AG found the information to be unreliable. As well as highlighted that CMS incurred irregular expenditure (R17.6 million) because it did not follow procurement process for the appointment of consultants.


  1. Compensation Commissioner for Occupational Diseases (Progress Report)

The CCOD’s statutory functions include:

  • Administering the Mines and Works Compensation Fund to compensate ex-miners disabled by occupational lung disease;
  • Determining and recovering levies from controlled mines and works;
  • Awarding benefits to miners and ex-miners suffering from occupational lung related diseases; and
  • Investing levies collected and interest earned from investments.


Highlights for 2017/18


The CCOD lists the following highlights for the year under review:

  • Continued support of mining companies and social partners;
  • Approval of Actuarial Valuation Report (as at 31 March 2017);
  • 2016 report used to adjust levies and benefits as from 1 April 2018;
  • Audit of Annual Reports and Financial Statements by Auditor-General of South Africa on 2012/13 and 2013/14 Financial Years (Revenue qualification); and
  • Brokered agreement on class-action settlement (still needs court approval).


Concerning CCOD’s business process it highlights the following:

 1 081 certifications per month ~ 1 679 previously (+8.1% on target – 12 972 / 12 000)

  • 860 payments per month ~ 437 previously (+72% - 10 324 /   6000)
  • Fixed & mobile One Stop Service Centres – 1 054 medical assessments conducted per month
  • Extended the electronic access of the database of ex-mineworkers to the One Stop Service Centres
  • 73% of controlled mines and works paying levies (+67% inspections – 100/60)


Performance Information


The CCOD appears to have performed well, achieving 12 out of the 15 (80%) objectives reported on.

  • Of concern is that under percentage of new claims from 1 April 2017 paid within 3 months, this objective was not achieved as the tools to measure the indicator were still being developed. This indicates poor planning, as the measure/tool should be in place when the indicator is developed.
  • 8.43% of unpaid claims during the financial year- target of 5% not achieved.
  • 73% of controlled mines and works paying levies – target of 70% achieved and exceeded. (Though perhaps the indicator should be set at or closer to 100%).
  • Achieved actuarial valuation report as at 31 March 2017 completed.
  • 2012/13 and 2013/14 Annual Reports and financial statements submitted to the Auditor General of South Africa (hereinafter referred to the AG).
  • 12 644 Benefit medical examinations conducted – not achieved target of 16 000.
  • Claims paid 10 324 (172%), achieved target of 6 000.
  • TB Treatment claims (loss of earnings) target – 850, achieved 6 772 (+697%).


The CCODs financial statements have not been audited, however CCOD spending of voted funds is as follows:

  • Cost of Employees (COEs) is above the budgeted amount having spent R33.3 million versus a budgeted allocation of R27.1 million. This indicates a spending of 123% on COE. The COE is of concern as it indicates that other functions are being underspent to make up for it.
  • Goods and services is below the targeted level at only 67%- R9.3 million spent of a budget of R18.9 million.
  • Transfers are at 101% (R41 000 overspending)
  • Capital expenditure is at 94% having spent R2.535 million of the R2.710 million budget.
  • In total, the CCOD had 5% underspending: R58.5 million spent of a budget of R61.7million.




  1. Department of Health
  • The Committee noted the stagnation in audit outcomes of the Department and provinces. The Department and four provincial departments (Eastern Cape, Gauteng, Free State and Western Cape) retained unqualified audit opinions with findings.
  • The Committee noted with concern that the Department continuously spends almost its entire budget (99.5%), however underperforms (achieved 64%, 73 of 114 targets).
  • The Committee noted with concern material issues in relation to the reliability of performance information relating to Programme 5 (Hospitals, Tertiary Services and Workforce Development). Furthermore, this programme underperformed, only achieved 31% (9 of 29 targets) and yet spent 99.58% of its budget. 
  • The Committee expressed concern regarding the underperformance on infrastructure and the lack of correlation between the budget and annual plans.
  • Concern was raised in relation to the accuracy of data on Ideal Clinics, the Committee was of the view that there was a disjuncture between the report of the Department on Ideal Clinics against that of the Office of Health Standards Compliance.
  • The Committee raised major concern regarding high levels of accruals incurred by provincial departments. Accruals amounts to R15 billion.
  • The Committee was concerned that irregular, wasteful and fruitless expenditure by provincial departments continue to increase. Irregular expenditure amounted to R5.6 billion.
  • The Committee expressed concern regarding the high expenditure on Compensation of Employees (COE) in provincial departments. Limpopo, Eastern Cape and Free State have higher than average COE expenditure. 
  • The Committee expressed concern regarding the severe shortages of medical specialists, particularly in rural public hospitals.
  • The Committee expressed concern around the functionality of Clinic Committees in provinces.
  • Provision of Emergency Medical Services in provinces, particularly long response time, remains a challenge.
  • The Committee expressed concern regarding inadequate IT systems of the Department.
  • The Committee indicated the need to review the organisational structure of the CCOD to enhance its functionality and lessen its reliance on mining companies.
  • The Committee expressed concern around numerous cases of medical negligence in public hospitals, which in turn leads to a sharp increase in medico-legal claims against provincial departments.
  • The Committee raised concern regarding delayed placement of foreign-trained medical students for either internship or community service.
  • The Committee raised concern regarding the fragmentation in the training of medical students in foreign countries.
  • The Committee raised numerous issues regarding the Cuban medical programme, such as the students’ behavioural issues; lack of standardisation of the programme across provinces; and placement of students in South African universities.
  • AG’s Recommendations
  • The Committee noted the need to ensure the control of COE expenditure as a key oversight focus area.




  1. OHSC
  • The Committee observed that the OHSC received an unqualified audit opinion with no findings, however incurred irregular expenditure amounting to R2.9 million which it will apply to National Treasury for condonement.
  • The Committee noted with concern that Programme 3: Complaints Management and Ombud, is experiencing a high vacancy rate of 52% in the Complaints Centre and Assessment and 50% in the Investigation Unit due to unfunded posts; which has a direct impact on timelines for complaints and investigations.
  • The Committee observed that the long awaited norms and standards were promulgated and are coming into effect in February 2019.
  • The Committee enquired about the time frame for the appointment of the Board Chairperson.
  • In relation to the delays in moving to new office space, the OHSC indicated that it planned to move to a new building in December 2018.
  • With regard to the enforcement actions against persistently non-compliant health establishments, the OHSC indicated that it has not started to enforce the policy because the regulations are coming into effect in 2019. 


  1. OHO
  • The Committee noted with concern the capacity and financial constraints the Office of the Health Ombud is operating under.
  • The Committee noted the need to review the legislative framework establishing the office so that it becomes an independent regulatory body with its budget appropriated accordingly.
  • The Committee emphasized the need to educate communities on the mandate of the Office of the Ombud. 
  • The Committee observed that the Office has no appropriated budget to fulfil its mandate as per approved structure.
  • The Committee observed that the attachment and reliance of the Office on the OHSC presents constraints in its operations. 




  1. NHLS
  • The Committee observed that irregular expenditure has been reduced from R1 billion in the previous financial year to R598 million in this current financial year.
  • The Committee was concerned about the long standing disciplinary cases of senior managers that remains unresolved.
  • The Committee noted that of the four vacant senior management positions, the Head of Internal Audit post has been advertised.
  • With regards to the disputes on historical debt to the NHLS, the Committee noted that NHLS has reached settlement agreements and payment arrangements with KZN and Gauteng.
  • The Committee noted with concern the slow transformation at senior management level at the NHLS. 


  • The Committee noted with concern that the operations of SAHPRA are affected by the lack of a fit for purpose building to operate from.
  • The Committee noted that the transfer of staff (Section 197) has not been finalised.
  • In relation to the medical products backlog of 16 000 applications dating back to 1992, the Committee noted that SAHPRA has developed a backlog elimination strategy which is based on three pillars: reducing the number of applications that require evaluation; segmentation and prioritising remaining applications; and designing and implementing new models for evaluation. The goal is to clear the backlog within two years.


  1. SAMRC
  • The Committee noted with concern that the SAMRC has regressed from clean audit outcomes for the past two financial years to unqualified audit with findings in 2017/18.
  • The Committee noted that the SAMRC has incurred irregular expenditure due to SCM regulations not being followed.
  • The Committee was concerned that the SAMRC has budgeted for deficit, which is against the PFMA.
  • The Committee was concerned about the stagnation in transformation at senior management level.
  • The Committee was concerned about the lack of visible activities of the SAMRC on the ground.
  • The Committee raised concern regarding the non-correlation between the SAMRC and Statistics South Africa’s data on the leading cause of death.
  • The Committee expressed concern about the lack of collaborations with Cuba, on research agenda that will benefit the country.


  1. CMS
  • The Committee noted with concern that the CMS has regressed from clean audit outcomes for the past two financial years to unqualified audit with findings in 2017/18.
  • The Committee noted that the AG identified the irregular expenditure incurred by CMS, as a result of the entity not following procurement processes for the appointment of consultants.
  • The Committee raised concern regarding the AG’s findings on SCM processes not being followed by the CMS.
  • The Committee also noted that the AG highlighted material adjustment, due to inadequate control and record keeping, leading to inconsistencies in the APP and Annual Report.
  • The Committee was concerned that the Registrar position remains vacant and there was no indication of when the position will be filled.
  • The Committee reflected on concerns around the affordability of medical schemes and the role of CMS in regulating the industry.


  1. CCOD
  • The Committee noted with concern the lack of progress in the amendment of the compensation legislation due to the lack of legal support to drive the process.
  • The Committee noted with serious concern the slow pace of amalgamation between the relevant Departments, namely Health, Labour and Mineral Resources in ensuring harmonisation the compensation legislation.


  1. Recommendations


  1. Department
  • Institute measures to address the root causes identified by the Auditor General in order to obtain a clean audit.
  • Provide a detailed plan to the Committee demonstrating how it assists provinces (Northern Cape, Limpopo, North West, Mpumalanga and KwaZulu-Natal) to move from qualified to unqualified audit outcomes. The detailed plan should be provided to the Committee on a quarterly basis.
  • Present to the Committee a turnaround plan to address the recurring issue related to quality and reliability of data as reported by the Auditor General for the past several years.
  • Address the underperformance in some programme and ensure alignment of programmes to budget.
  • Ensure the alignment and integration of data on Ideal Clinics based on the norms and standards of the OHSC.
  • The Department, National Treasury and Provincial Treasuries should allocate a certain amount to offset the growing expenditure on accruals.
  • Provide systems to assist provincial departments to develop internal controls and instruments to monitor and eliminate irregular, wasteful and fruitless expenditure in reducing inefficiencies.
  • The Department should provide the Committee with a quarterly report on consequence management arising from non-compliance with PFMA regulations.
  • Assist provincial health departments to improve capacity for planning and managing to reduce pressures on COE budget whilst ensuring a balance in the filling of clinical and non-clinical positions.
  • Provide the Committee with a quarterly report on consequence management particularly on irregular, wasteful and fruitless expenditure.
  • Increase funding for academic training to increase the pool of medical specialists, professional nurses and allied professionals.
  • Ensure that Clinic Committees and Hospital Boards are monitored and provided with training on their role and responsibility to render them effective in provinces.
  • The Committee recommends that the department should assist provinces to strengthen EMS in terms of increasing ambulance fleet, personnel and building the existing capacity.
  • Ensure greater investment in IT through intense training of personnel and infrastructure.
  • Ensure the review the organisational structure of the CCOD to enhance its functionality.
  • Improve on patient care experience, appropriate professional staffing in medical facilities and proper record keeping in order to address the increase in medico-legal claims.
  • Engage provincial departments sending students to foreign countries for medical training ensure that they are appropriately supported when they complete their studies. 
  • Centralise the training of medical students in foreign countries for improved management and control.


  1. OHSC
  • Address capacity issues of Programme 3: Complaints Management and Ombud in order to improve on timelines for complaints ad investigations.
  • Accelerate the appointment of the Board Chairperson before the end of the financial year.


  1. OHO
  • Review the legislative framework establishing the Office with a view of detaching from the OHSC in line with international best practice so as to ensure its autonomy and it begins to discharge its mandate as a regulatory institution.    
  • The Department and National Treasury should provide adequate funding to the Office in line with the recently approved structure for better reporting and functionality.  
  • Improve on public awareness in order to curb its abuse on medical litigations. 
  • The Committee further recommends that as a matter of urgency, the Office of the Health Ombuds should be detached from the OHSC.



  1. NHLS
  • Develop internal controls to monitor and eliminate irregular expenditure and ensure that supply chain management policies are complied with in order to reduce inefficiencies.
  • Resolve the long standing disciplinary cases of senior managers and provide the Committee with a progress report.
  • Ensure that key positions are filled as matter of urgency.
  • Ensure improved transformation at senior management level, through improved career pathing and recruitment.


  • Ensure that a suitable building is secured in order to improve the functionality of the entity.
  • Finalize the transfer of staff.
  • Ensure the implementation of the backlog elimination strategy and provide the Committee with a progress report quarterly.


  1. SAMRC
  • Develop an action plan to address findings of the AG resulting in the regression in audit outcomes.
  • Develop internal controls to monitor and eliminate irregular expenditure.
  • Monitor compliance to supply chain management and procurement policies in order to circumvent audit findings on procurement processes.
  • Address budget issues relating to the deficit as reported by the entity.
  • Accelerate on the transformation agenda at senior management at the SAMRC.
  • Ensure improved visibility and awareness on the ground.
  • Engage Statistics South Africa to address the inconsistences pertaining to data on the leading cause of death.
  • Identify areas of collaboration with other countries such as Cuba.




  1. CMS
  • Develop an action plan to address findings of the AG resulting in the regression in audit outcomes. Provide the Committee with a progress report on a quarterly basis.  
  • Ensure adequate capacity of the SCM unit in order to ensure compliance to SCM and procurement policies.
  • Ensure improved quality control of the APPs and Annual Reports and record keeping.
  • Expedite the appointment of the Registrar which remains vacant for several years.
  • Provide the Committee with a detailed plan in ensuring that medical schemes are affordable as per the CMS’s vision.


  1. CCOD
  • Continue to improve on the submission of annual reports and financial statements to the AG and furnish the Committee a report on audit findings and action plan.
  • The Department should engage National Treasury to provide adequate mechanisms including human resources for the CCOD to meet its mandate.


The Committee welcomes the promulgation of the new norms and standards that will come into effect in February 2019.



The Department and Entities to provide progress report on all of these recommendations on a quarterly basis.



Report to be considered.



Ms ML Dunjwa                                                                                 Date:

Chairperson: PC on Health