ATC210511: Budget Vote Report of the Portfolio Committee on Health, dated 11 May 2021

Health

The Budget Vote Report of the Portfolio Committee on Health, dated 11 May 2021

 

Contents

 

1.   INTRODUCTION. 2

1.1.      Purpose of the report 2

1.2.      Process. 2

1.3.      Report of the Financial and Fiscal Commission. 2

1.4.      Report of the Auditor General of South Africa. 3

2.   CONSIDERATION OF THE ANNUAL PERFORMANCE AND BUDGET OF THE DEPARTMENT OF HEALTH (2021/22) 4

2.1. Introduction. 4

2.2. Policy Priorities for 2021/22. 5

2.2.1.      State of the Nation Address (SONA) 5

2.2.2.      The National Development Plan (Vision-2030) 6

2.2.3.      Department of Health Five Year Strategic Goals (2020/21 – 2024/25) 6

2.2.4.      Department of Health Planned Policy Initiatives. 7

2.3. Annual Performance Plan Key Indicators. 7

2.4. Budget Analysis (2021/22) 10

2.4.1.      Consolidated Health Budget 2021/22. 10

2.4.2.      National Department of Health Budget 2021/22. 10

2.5. Committee Observations. 15

3. CONSIDERATION OF THE ANNUAL PERFORMANCE PLANS AND BUDGET OF ENTITIES (2021/22) 16

3.1.      COMPENSATION COMMISSIONER FOR OCCUPATIONAL DISEASES (CCOD) 16

3.2.      SOUTH AFRICAN MEDICAL RESEARCH COUNCIL (SAMRC) 21

3.3.      COUNCIL FOR MEDICAL SCHEMES (CMS) 26

3.4.      SOUTH AFRICAN HEALTH PRODUCTS REGULATORY AUTHORITY (SAHPRA) 33

3.5.      NATIONAL HEALTH LABORATORY SERVICE (NHLS) 38

3.6.      OFFICE OF HEALTH STANDARDS COMPLIANCE (OHSC) 45

4. COMMITTEE RECOMMENDATIONS. 49

5. CONCLUSION. 51

 

 

Report of the Portfolio Committee on Health on Budget Vote 18: Health, Annual Performance Plan of the Department of Health, and its entities, Dated, 11May 2021

 

The Portfolio Committee on Health (the Committee), having considered Budget Vote 18: Health, together with the 2021/22Annual Performance Plans (APP) of the Department of Health(the Department), theCompensation Commissioner for Occupational Diseases (CCOD), South African Medical Research Council (SAMRC), Council for Medical Schemes (CMS), South African Health Products Regulatory Authority (SAHPRA), National Health Laboratory Services (NHLS) and the Office of Health Standards Compliance (OHSC),reports as follows:

 

1. INTRODUCTION

 

Section 5(2) of the Constitution of South Africa (No. 108 of 1996) and section 27(4) of the Public Finance Management Act (No.1 of 1999) sets out the role of Parliamentary committees in overseeing the performance of government departments and entities. Furthermore, the Money Bills Amendment Procedure and Related Matters Act (Act No. 9 of 2009), provides for for the National Assembly, through its committees to assess the budget votes of departments and its entities with their respective strategic and annual performance plans.

 

1.1.         Purpose of the report

 

This report summarisesa presentation received from the Department and its entitiesfocusing on the2021/22Annual Performance Plan and Budget as well asallocationsover themedium-term expenditure framework (MTEF) period. The Committee further received analysis from the Financial and Fiscal Commission (FFC) and the Auditor-General South Africa (AGSA). The report details the deliberations, observations and recommendations made by the Committee relating to Vote18. 

 

1.2.         Process

 

On 4 to 7 May 2021, the Portfolio Committee on Health engaged the Departmentand itsentities on their Annual Performance Plans and budgetsfor 2021/22.

 

1.3.         Report of the Financial and Fiscal Commission

 

The Financial and Fiscal Commission (FFC) noted that according to the Special Appropriation Bill (2021) an amount of R1.250 billion was appropriated to the vote of Health in order to procure Covid-19 vaccines and implement a related Covid-19 vaccine research project.  This is in terms of section 16 (1) of the PFMA.

 

The FFC further noted that the departmental budget for the 2020/21 financial year was R58,1 billion in the revised estimate. R2.5 billion in 2021/22 main budget.  The 2020/21 revised estimate showed an over-expenditure in transfers and subsidies for the Covid-19 vaccine roll-out at 5.5% of the total departmental budget.  Goods and services also overspent by 1.5% of the total budget. Approximately R2.5 million was added in the Department’s 2020/21 adjusted appropriation relative to the baseline.  Among the total adjustments, R2.9 billion was allocated for transfers and subsidies.  Most of this transfer includes the R2.4 billion to the Covid-19 component of the HIV, TB, Malaria and community outreach grant.

 

1.4.         Report of the Auditor General of South Africa

 

The Auditor General performed a review of Programme 2,5 and 6 of the strategic plan 2020/21 to 2024/25 and made the following findings:

 

• Misalignment of principles outlined in the Revised Framework for strategic plans and annual performance plans as well as unclear and unambiguous baselines for some of the outcome indicators. The indicator impacted relates to the number of provinces compliant with Emergency Medical Services Regulations.
• Differences were noted between the outcome indicators in the strategic plan and indicator titles in the technical descriptions in the strategic plan. The indicators impacted relate to contingent liability of current medico-legal cases; percentage of people requiring preventative chemotherapy for schistosomiasis reduced; and the National Health Research Strategy implemented.
• Differences were also noted between the source of date described in the technical descriptions of the strategic plan and those described in the APP. The indicator impacted relates to the number of public nursing colleges accredited and registered to offer quality basic and specialist nursing programmes.
• The target linked to the indicator (percentage of blood alcohol tests completed with normative period of 90 days) is not measurable because the denominator was not specified in the calculation method.

 

The Auditor General presented its First and Second Special Report on the financial management of Government’s Covid-19 initiatives. The AG undertook a comprehensive, multifaceted and risk-based audit of the key initiatives introduced by government and the management of the multibillion rand in funds made available for Covid-19. The audit focused on four focus areas across the sector as follows:

 

• Purchase and distribution of PPE;
• Purchase, distribution and maintenance of ventilation and additional healthcare workers;
• Community screening and testing; and
• Capacitation of hospital beds through erection of field hospitals.

 

Some of the Auditor General’s findings were as follows:

 

• PPE procurement process: Contracts awarded to businesses that do not have a history of providing PPE. Competitive processes were not followed, resulting in contracts being awarded to specific suppliers without necessary motivation or approval.
• PPE quality, price and delivery:PPE were procured at prices that were higher than market-related rates. Some suppliers delivered PPE that did not meet the required specifications or was not what had been contracted to deliver or they under-delivered or delivered late.
• PPE storage and distribution: Ineffective stock management processes, inadequate storage facilities and poor storage practices.
• Field hospitals: Certain provinces that had made plans to upgrade existing facilities from start did not follow competitive procurement processes. Contracts were not always concluded and approved as required. Resulting in poor distribution of PPE to some provinces and PPE loss.

 

2.     CONSIDERATION OF THE ANNUAL PERFORMANCE AND BUDGET OF THE DEPARTMENT OF HEALTH (2021/22)

 

2.1.         Introduction

 

The National Department of Health (hereinafter the Department) aims to provide leadership and coordination of health services to promote the health of all people in South Africa through an accessible, caring and high-quality health system, based on the primary health care (PHC) approach.

 

Over the medium term the Department’s  main focus will be on responding to the COVID-19 pandemic including the various stages of the vaccine rollout strategy. The Department will also continue its focus on the following:

 

• The phased implementation of the National Health Insurance;
• Prevention and treatment of communicable and non-communicable diseases (NCDs); and
• Investing in health infrastructure and supporting tertiary health care services.

 

2.2.         Policy Priorities for 2021/22

 

2.2.1.     State of the Nation Address (SONA)

 

The February 2021 SONA highlighted the following main health-related issues:

 

• Defeating the coronavirus pandemic and the rollout of the vaccination programme was the key issue in this year’s SONA. The President highlighted the comprehensive response to overcome the coronavirus.  By restricting movement and activity via the lockdown, preparing health facilities, and implementing basic health protocols, government prevented potentially greater devastation by the pandemic.
• The President also highlighted the need to intensify prevention efforts and strengthening the health system. A massive vaccination programme will be rolled out with millions of vaccines having been procured and being delivered. The President applauded the scientists who lead research that discovered the Astra Zeneca vaccine which was procured was ineffective against a new variant (known as 501Y.V2) that is dominant in South Africa.
• Emphasising that a science-driven approach will continue to be used, the President emphasised the important role SAHPRA plays in relation to all medication imported into the country.
• The President further emphasised the importance of collaboration between all sectors of society including business, labour, the health industry and medical schemes in implementing the mass vaccination drive.
• Implementation of the National Anti-Corruption Strategy. The Special Investigating Unit (SIU) was authorised to investigate COVID-19 related procurement by all state bodies. The SIU released a report in February detailing alleged personal protection equipment (PPE) corruption. Over R13.3 billion worth of tenders were investigated, in respect of 189 State institutions and entities, with allegation still being received.
• Roll out broadband to hospitals and other government facilities. This will be important to modernise particularly administration and filing systems and in preparation for the National Health Insurance which will require all users/patients to be registered on the Health Patient Registration System (HPRS).

 

2.2.2.     The National Development Plan (Vision-2030)

 

The National Development Plan (NDP) identifies demographics, burden of disease, health systems and the social and environmental determinants of health as the key areas for intervention required to improve the health system in the country. Nine goals for health have been identified in the NDP, viz.:

 

• Average male and female life expectancy at birth increased to 70 years;
• Tuberculosis (TB) prevention and cure progressively improved;                                                                                                                                                                                                                                                                                                                       
• Maternal, infant and child mortality reduced;
• Significantly reduced prevalence of non-communicable chronic diseases;
• Injury, accidents and violence reduced by 50 % from 2010 levels;
• Health system reforms completed;
• Primary health care teams deployed to provide care to families and communities;
• Universal health coverage achieved; and
• Health posts filled with skilled, committed and competent individuals.

 

2.2.3.     Department of Health Five Year Strategic Goals (2020/21 – 2024/25)

 

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

 

Strategic Goal 1: Increase life expectancy, improve health and prevent disease – Improve health outcomes by responding to the quadruple burden of disease in South Africa; and address the social determinants of health through inter-sectoral collaboration.

 

Strategic Goal 2: Achieve universal health coverage by implementing NHI Policy – Progressively achieve universal health coverage through NHI.

 

Strategic Goal 3: Quality improvement in the provision of care– Improve quality and safety of care; provide leadership and enhance governance in the health sector for improved quality of care; improve community engagement and reorientate the system towards PHC through community based health programmes to promote health; improve equity training and enhance management of Human Resources for Health (HRH); improve the availability of medical products and equipment; and ensure robust and effective health information systems to automate business processes and improve evidence based decision making.

 

Strategic Goal 4: Build health infrastructure for effective service delivery – Execute the infrastructure plan to ensure adequate, appropriately distributed and well maintained health facilities.

 

2.2.4.     Department of Health Planned Policy Initiatives

 

The key policy priorities of the Department include the following

 

• COVID-19 response plan: The Department’s COVID-19 response plan aims to halt the spread of the virus in South Africa. A major focus of the plan is on vaccination rollout. The Department aims to vaccinate at least 40 million people by the end of the 2021/22 financial year.
• Facilitate the implementation of the National Health Insurance (NHI) service. The introduction of universal health coverage, also known as NHI, is a key priority for the Department. The first phase of a 5-year preparatory work plan to improve health systems performance and improve service delivery has been implemented. The Department is aiming to implement NHI by 2026. This will be guided by the Presidential Health Compact, a collaborative effort of multiple stakeholders who came together to contribute to improving the health sector.
• Increased Life Expectancy. The Department aims to increase life expectancy to at least 66.6 years and to 70 years by 2030.

 

2.3.         Annual Performance Plan Key Indicators

 

Some of the key indicators in the Department of Health’s 2021/22 APP include:

 

Programme 1: Administration

 

• The Department aims for an unqualified audit opinion for 2021/22 and for six Provincial departments to achieve improvements in audit outcomes with no significant matters.
• A Medico-legal claim case management system will be used in seven provinces to manage new medico legal claims.
• 100 health promotion messages will be broadcast on social media in order to reduce premature mortality due to non-communicable diseases to 26% ( a10% reduction).

 

Programme 2: National Health Insurance

 

• The Portfolio Committee and NCOP public hearings on the NHI Bill in Parliament attended.
• Medical aid beneficiaries registered on HPRS - aproject plan in partnership with the Council for Medical Schemes (CMS) developed.
• Service benefits framework for PHC completed.
• 4.5 million patients registered to receive medicines through the centralised chronic medicine dispensing and distribution (CCMDD).
• 3830 health facilities reporting stock availability at national surveillance centre.

 

Programme 3: Communicable and Non-Communicable Diseases

 

• A new indicator was developed: 16.6 million people vaccinated against COVID-19 in 2021/22; with 25 million in 2022/23, and 40 million in 2023/24.
• 98 Hospitals obtain 75% or more on the food service quality assessments.
• 1600 PHC facilities with youth zones.
• National Strategic Plan (NSP) for NCDs developed and published.
• NSP for tobacco control approved and partially implemented.
• 75 State patients admitted into designated psychiatric hospitals.
• 500 medical officers and professional nurses trained to improve their skills in clinical management of mental disorders (in units listed to conducted 72-hour assessment and psychiatric units attached to general hospitals.
• Maternity care guidelines approved.
• Neonatal care guidelines approved.
• The output “100 health promotion messages marketed through social media” now falls under Administration. The Department should explain why that is the case.
• The indicator relating to malaria are absent.

 

 

 

 

Programme 4: Primary Health Care

 

• 100 PHC Facilities and 80 Hospitals implementing the National Quality Improvement Programme (previously 350 PHC facilities and 50 hospitals)
• 2200 PHC facilities qualify as Ideal Clinics.
• Policy and implementation guidelines on Traditional Medicine approved and implementation commenced.
• 18 Ports of entry compliant with international health regulations (IHR).
• Monitoring system for measuring effectiveness of clinic committees tested in 200 clinics.
• 250000 clients lost to follow up for treatment traced by community health workers (CHWs). (Please note in the previous APP it was 600,000 though now the APP says “250,000” under 2020/21)
• 1250 Primary Health Care (PHC) facilities with Ward Based Outreach teams.
• 11 metropolitan and district municipalities assessed for adherence to environmental norms and standards (Please note in the previous APP it was 16 though now the APP says “Not applicable” under 2020/21).
• Nine provinces assessed for compliance with Emergency Medical Services (EMS) Regulations.

 

Programme 5: Hospital Systems

 

• 40 PHC facilities and 24 hospitals are to be constructed or revitalised. (Previous APP the target was 54 PHC facilities).
• 21 hospitals are to be constructed or revitalised. (Previous APP the target was 24 hospitals).
• 120 public health facilities to be maintained, repaired and /or refurbished. Previous APP the target was 150 public health facilities).

 

Programme 6: Health Systems Governance and Human Resources

 

• Community service policy published
• 90% eligible students allocated to a health facility for community service.
• 500 COVID-19 vaccination sites registered on the Electronic Vaccination Data System (EVDS)
• Revised National Health Research priorities produced.
• Alpha version of networked TB/HIV Plus Information System developed.

 

2.4.         Budget Analysis (2021/22)

 

2.4.1.     Consolidated Health Budget 2021/22

 

The public health budget spans across the national department, its entities and the provincial departments of health. The consolidated budget for 2021/22 totals R248.8 billion, up from R229.7 billion in the previous financial year. The breakdown of the 2020/21 budget, by functional and economical classification is outlined below.

 

• A significant segment of the consolidated health expenditure, 60.6 %, down from 63.2% in the previous year, is dedicated to Compensation of Employees (COE), which totals R150.7 billion, up from R145.1 billion.
• Consolidated health expenditure on Goods and Services totals R80.1 billion, up from R67.1 billion, which constitutes 32.2% of overall health expenditure.
• Consolidated health expenditure also makes provision for R12.2 billion (4.9%) allocated to Capital spending and transfers, and R5.8 billion (down from 6.1 billion in the previous year) for Current transfers and subsidies (2.7%).
• There is no allocation for Interest Payments.

 

In terms of the consolidated budget, District Health Services receives R105.5 billion (42.4%), the largest proportion of the consolidated health budget. This is followed by Other Health Services R51.4 billion (20.7%) which is now the second largest item. Central Hospital Services receives R44.1 billion (17.7%), and Provincial Hospital Services receives R38.1 billion (15.3%). Facilities Management and Maintenance Receives R9.7 billion (3.9%).

 

2.4.2.    

Table 1: NDoH Budget Summary

Department of Health Budget 2021/22

 

2.4.2.1. Programme overview

 

The Department receives R62.5 billion for 2021/22, up from the R58.1 billion in 2020/21. This represents an increase of 7.7% in nominal terms (3.4% in real terms). The two largest programmes, namely Programme 3: Communicable and Non-Communicable Diseases (R32.6 billion) and Programme 5: Hospital Systems (R21.3 billion), jointly constitute 86.3% of the total budget allocation to the Department. Programme 4: Primary Health Care Services, declines by 20% and receives the smallest allocation (R222.3 million), which is less than half a per cent (0.4%) of the Department’s budget.

 

2.4.2.2. Economic classification

 

In terms of economic classification, the bulk of the Department’s budget (R54.1 billion or 92.4%) consists of transfers and subsidies. This figure includes R49.3 billion to provinces and municipalities, R193.4 million to Non-Profit Organisations (NPOs), and R1.8 billion to departmental agencies and accounts.

 

• Current payments constitute a total value of R7.3 billion, which represents 11.7% of the total budget allocation. R845.3 million, down from R928.3 million (11.6% of the current payments budget) is allocated to Compensation of employees.
• However, most of the current expenditure (R6.5 billion) is allocated to Goods and Services, constituting approximately 88.4% of the total current payments.
• The lion’s share of expenditure goes to Inventory: Medicine R4.4 billion. 
• Expenditure items that also receive a large share of the Goods and Services budget are Contractors at R797.9 million; Consultants: Business and advisory services at R256.4 million; Agency and support/outsourced services at R133.6 million; Operating leases at R151.0 million.
• Travel and subsistence at R153.6 million is higher than operating leases R151 million.
• Capital assets is allocated R1.2 billion. Buildings and other fixed structures are allocated R935.7 million, and Machinery and Equipment is allocated R243.6 million

 

2.4.2.3. Spending priorities for 2021 MTEF

 

Over the medium term, the Department will focus on responding to the COVID-19 pandemic, including the vaccine rollout strategy. It will also continue to focus on the phased implementation of NHI, prevention and treatment of communicable and non-communicable diseases, supporting tertiary health care services and investing in Public Health Infrastructure.

 

• Responding to the COVID-19 pandemic is ongoing and a matter of extreme priority. In 2020/21, the Special Adjustments Budget allocated approximately R20 billion to the health sector for COVID-19 interventions. The Department’s focus over the medium term will be on managing the COVID-19 pandemic by preventing the spread of the disease by non-pharmaceutical means, and providing vaccines to eligible persons in a phased vaccine rollout strategy. To fund the rollout, R9 billion has been added to the Department’s baseline- R6 billion in 2021/22 and R3 billion in 2022/23:
  • R6.5 billion ring-fenced in the Communicable and Non-Communicable Diseases programme for vaccine procurement and distribution nationally.
  • R2.4 billion allocated to the COVID-19 component of the HIV, TB, Malaria and community outreach grant, which is transferred to provinces to fund the service delivery costs of administering the vaccines.
  • R100 million is allocated to the South African Medical Research Council (SAMRC) for COVID-19 research.
  • R1.25 billion was also allocated in 2020/21 for vaccines and vaccine research as per emergency provisions of the PFMA.
  • If needed, the allocations for vaccines can be augmented by both government’s contingency reserve and with revenue from vaccines sold to the private sector for medical scheme members.
  • A further R8 billion is allocated to the provincial equitable share through National Treasury in 2021/22 to enable provincial health departments to continue their prevention, testing, and treatment interventions including managing a possible third wave of COVID-19 infections.
• Phased implementation of the NHI will continue. The National Health Insurance Fund will be the established as the public entity – a key priority in the Department’s plans to implement NHI. R121.3 million over the MTEF is allocated to the NHI programme to strengthen the Department’s NHI unit which will be transferred to the entity when it is created. Over the MTEF, the National Health Insurance Indirect Grant is allocated R7.5 billion. R986.3 million is allocated to the personal services component which contracts health care services. R2 billion is allocated to the non- personal services component which funds projects that strengthen the health system in preparation for the rollout of NHI, and R4 billion is allocated to the health facility revitalisation component to fund infrastructure projects.
• The HIV, TB, malaria and community outreach grant is allocated R82.6 billion over the medium term in the HIV, AIDS STIs sub-programme in Programme 3: Communicable and Non-Communicable Diseases. The grant has 8 components. The largest component is the HIV and AIDS component which is allocated R69.3 billion over the MTEF period. This funds the antiretroviral treatment programme which aims to reach 6.7 million people by 2023/24, as well as HIV prevention services. The grants community outreach services component is allocated R7.7 billion over the MTEF to ensure better resourcing and management of the community health worker programme.
• Investing in health infrastructure: TheHealth Facility Revitalisation Grant is allocated R20.6 billion over the medium term to be transferred to provincial health departments through the Health Facilities Infrastructure Management sub-programme in Programme 5: Hospital Systems programme. An additional R129.4 million is allocated to the grant for the construction of the Tygerberg and Klipfontein Hospitals in the Western Cape. Health Facilities Infrastructure Management sub-programme also contains the health facility revitalisation component of the NHI indirect grant, which is allocated R4.4 billion over the MTEF.
• The National Tertiary Services Grant is allocated R13.7 billion in 2021/22, R14 billion in 2022/23 and R14 billion in 2023/24 in the Hospital Systems programme. The grant compensates provinces for providing tertiary services to patients from elsewhere. 

 

2.4.2.4. Reasons for Deviations

 

The baseline budget has been decreased across all the economic classifications due to economic pressures as a result of the COVID-19 pandemic. This is outlined below:

 

• Compensation of employees (COE): The COE ceiling was reduced with 12%, resulting in reductions across all the programmes.
• Goods & services: R4.35 billion was allocated for the procurement of COVID-19 vaccines.
• The allocation for indirect NHI grants under Programmes 2 and 5 has been materially decreased. Additional funds have been allocated under Programme 1 to fund the related expenditure due to the relocation of the Department to another building.
• Transfers & subsidies: The allocations for conditional grants and transfers to non-profit institutions were reduced with 3% and 13% respectively, across all the applicable programmes. SANAC received a once-off increase of R10 million, while allocations for the other Departmental Agencies have been decreased.
• Purchase of capital assets: The NHI Indirect grant for the construction and refurbishment of health facilities under Programme 5, have been reduced with R107 million.The allocation for the procurement of machinery & equipment of the indirect NHI grants under Programmes 2 and 5 has been decreased. The capital allocations of all the units across all the programmes has been increased once-off to make provision for procurement of computer equipment and/or furniture due possible damage because of the relocation to another building.

 

2.4.2.5. Conditional Grants

 

Tables 3 and 4 below, provide a breakdown of the Conditional Grants Direct and Indirect allocations.

 

Direct Conditional Grants to Provinces	R million
Schedule 4, Part A
National Tertiary Services Grant	13 708.8
Schedule 5, Part A
HIV, TB, Malaria and Community Outreach Grant	27 585.5
Health Facility Revitalisation Grant	6 445.2
Human Resources and Training Grant	4 054.4
National Health Insurance	268.7
Total	52 061.6

Table 3: Conditional Grants Direct Allocations 2021/22

 

In terms of direct grants, the Department administers R52.1 billion in 2020/21. The largest grant is the HIV, TB, Malaria and Community Outreach Grant, which receives R27.6 billion, followed by the National Tertiary Services Grant (NTSG) with R13.7 billion, and the Health Facility Revitalisation Grant with R6.5 billion.

 

For 2021/22 there is an overall reduction on direct grants of 3.4% or R1,8 billion growing over MTEF period. The major reduction is under NTSG (R1 billion) and HIV component (R1.6 billion). This is of concern as it will have serious negative impact on service delivery: this will require:

• Rationalisation of services,
• Maintenance of current services: for instance, it will be difficult to initiate new patients on ART programme.
• All the current initiatives to modernise the tertiary services and establishment of new services will have to be postponed.
• Cross-border referrals will continue which will have a direct effect on patients.

 

Conditional Grants Indirect Allocations	R million
Schedule 6, Part A
National Health Insurance Indirect Grant	2 117
Total	2 117

Table 4: Conditional Grants Indirect Allocations 2021/22

 

With regard to the indirect grants, the National Health Insurance Indirect Grant is allocated R2.1 billion.

 

For 2021/22 the overall reduction in indirect grants is 16.3%. This is without the new allocation for COVID-19 vaccines, which means that the 21% increase is due to new COVID – 19 funding for vaccines. The major reduction is under Infrastructure indirect grant with 19.6%,  followed by non-personal services with 15.6%. The reduction will have a negative impact on nationally managed programmes especially infrastructure projects. Some planned projects will need to be postponed due to limited funding. The current infrastructure backlog will continue to grow. The department is in the process of establishing oncology services in underserved provinces, however, this process will be delayed due to budget cuts.

 

2.5.         Committee Observations

 

• The Committee expressed concernrelating to the massive budget cuts in the health sector and were concerned that the department and provinces will not be able to deliver on their mandate which will ultimately affect service delivery.
• The Committee further noted with concern that vital programmes are underfundedsuch as the HIV and TB programme which might result in regression in the control and prevention of these conditions.
• The Committee noted with concern the infrastructure backlogswithin the department and wanted to know how these will be eradicated.
• The Committee was concerned that awareness campaigns aimed at addressing stigma surroundingHIV/AIDS were inadequate.
• The Committee noted with concern that the department was planning to vaccinate 40 million people by the end of 2021 and noted that the R10 billion allocation may not be sufficient.  Furthermore, communication should be strengthened in terms of the targets.
• The Committee expressed concern about the substantial medico-legal costs within the sector.
• The Committee expressed concern that some primary health facilities maynot to be ready for the vaccination roll-out as they do not have proper systems in place such as storage, security and inadequate infrastructure.
• The Committee flagged the AG’s findings on the department and proposed a special meeting to consider and deliberate on these findings.
• The Committee noted with concern that the department was not doing sufficient awareness for people to registeror educating them on how to register for vaccination.
• The Committee was concerned that the department comes up with plans but challenges at healthcare facilities remains, such as staff shortages, equipment shortages, inadequate infrastructure and wanted to know when will they see concrete plans to eradicate these challenges. 
• On primary health care services, the Committee raised its concern regarding the permanent employment of Community Health Workers.
• The Committee commended the department on the Ideal Clinics initiative and that these are appreciated in rural areas.

 

 

3. CONSIDERATION OF THE ANNUAL PERFORMANCE PLANS AND BUDGET OF ENTITIES (2021/22)

 

3.1.COMPENSATION COMMISSIONER FOR OCCUPATIONAL DISEASES (CCOD)

 

1. Introduction

 

The Occupational Diseases in Mines and Works Act 1973, (No. 78 of 1973) (ODMWA) establishes the Compensation Commissioner for Occupational Diseases in Mines and Works (CCOD). As a legislated entity of the National Department of Health (NDOH), CCOD receives its share of voted funds from National Treasury through NDOH.  Vision and mission of CCOD are articulated hereunder:

 

1. Achievements made over time

 

In its APP for 2021/22, CCOD reports of its significant achievements i.e. the completion of the auditing of its annual and financial reports for 2015/16, 2016/17 and 2017/18 by the Auditor-General of South Africa (AGSA). It further stated that the 2018/19 annual report is being audited, while the 2019/20 and 2020/21 reports would be submitted to AGSA in this financial year (2021/22). This is a noticeable milestone given the long period of unaccountability and failure to produce audited annual and financials as required by the law.  It is therefore expected that by 2022/23 the entity will be up to date with its obligation of tabling audited annual and financial statement.

 

1. Overview of CCOD’s governance

 

The CCOD is the only entity that the Departments of Employment and Labour as well as that of Mineral Resources and Energy recognises its functions closely. To this end, the policy mandates for occupational health and compensation services are divided between these departments including NDOH. Furthermore, provides specific actions that rise to the management of the entity. For example, the Act prescribes for the:

 

• Appointment of the Compensation Commissioner by the Minister of Health;
• Establishment of a fund called the Mines and Works Compensation Fund;
• Establishment of the Medical Bureau for Occupational Diseases (MBOD) to oversee the provision of Benefit Medical Examinations and certifications of claims; and
• Controlling and administering the Mines and Works Compensation Fund by CCOD.

 

1. Key priorities for CCOD in 2021/22

 

Over the period 2020/21 to 2024/25, CCOD plans to achieve the following priorities:

 

• Expand the electronic claims management system;
• Extend its database to cover current workers in controlled mines and works;
• Work closely with stakeholders and social partners to resolve many of the legacy challenges facing the CCOD;
• Ensure the effective and efficient management of the CCOD through collection of levies, certifications and payment of claims; and
• Submit to the Director-General of Health on amendments to the Occupational Diseases in Mines and Works Act, No. 78 of 1973.

 

1. Deficiencies at the CCOD

 

CCOD has flagged its legislation as outdated; hence, there are processes to have it amended. It is also observed that of all entities in the NDOH, CCOD is the only one that has its strategic function within the NDOH. The following are some of the discrepancies that require rectification:

 

• The Department carries the administration costs i.e. personnel, operational and infrastructure costs for CCOD;
• Does not have specialised personnel within its structure;
• Receives support of specialised personnel from Minerals Council South Africa;
• Currently, the Risk Committee which determines mines and works is not functioning optimally; and
• Has limitation of medical, finance and information technology personnel as well as maintenance of the database with approximately 1.1 million claimant files.

 

1. Performance Indicators and Planned Targets 2021/22

 

In order to execute its mandate, CCOD uses its five programmes, namely; Administration, Compensation of Pensioners, and Compensation of Ex-miners as well as Compensation of Tuberculosis and Eastern Cape Project for this purpose. In meeting its overall objective, careful consideration is made on performance indicators and targets, and aligned with programmes. Table 5 below highlights some of the performance indicators and targets for the current fiscal year - 2021/22):

 

 

 

 

 

 

Table 5: Performance indicators and targets 2021/22

Outcome	Output Indicator	Estimated Performance for 2020/21 (Targets)
Submission of amendments to ODMWA to the Director-General of the National Department of Health	Submission of amendments to ODMWA to the Director-General of the National Department of Health	Submission of amendments to ODMWA to the Director-General of the National Department of   No distinction between outcome, indicator and target – clarity to be sought
Ensure the effective and efficient management of the CCOD	Report on updates of database of claims at the CCOD in terms of claims, payments, certifications and data exchange updates and/or additions	Master database updated for payments made, new claims and new certifications for the month before the 7th of the next month. External data exchange updates and/or additions to the master once a quarter database
	Report on the number of certifications finalised on the Mineworkers Compensation System per year	12 000   A decrease from 12 400 in 2020/21
	Report on the number of claims finalised by the CCOD (other than pensioners)	7 700   An increase from 3 923 in 2020/21
	Percentage of controlled mines and works liable for payment of levies per the financial system paying levies to the CCOD	80% of controlled mines and works paying levies to the CCOD   Projected to be the same throughout MTEF period
	Report on the number of controlled mines and works inspected	77% Projected to be the same throughout MTEF period

 

 

1. Proposed Budget for 2021/22

 

National Treasury provides allocation to CCOD through the Department of Health. Table 6 presents the allocation according to the programmes for 2021/22 fiscal year.

 

Table 6: Budget for 2021/22 as per programmes

Programme	Budget				Nominal Rand change	Real Rand change	Nominal% change	Real % change
R million	2020/21	2021/22	2022/23	2023/24	2020/21-2021/22		2020/21-2021/22
Administration	8 910	9 391	8 748,0	9 142	481	102.5	5.40%	1.15%
Compensation of Pensioners	4 272	4 507	4 674,0	4 884	235	53.3	5.50%	1.25%
Compensation of ex-miners	175 750	185 241	216 000	225 720	- 171 076	- 171 264.4	-97.34%	-97.45%
Compensation of Tuberculosis	42 572	44 871	26 000	27 170	- 37 688	- 37 884.9	-88.53%	-88.99%
Eastern Cape Project	8	0,0	0,0	0,0	225 712	216 613.9	0,0	0,0
TOTAL	231 512	244 010	255 422	266 916	12 498	2 662.7	5.40%	1.15%

 

With respect to table 6, some programmes show real decrease in allocation such as Programmes 3 and 4, which is a deficit of 97.45% and 88.99% respectively. In monetary terms programme 3 receives a shortage of R171 264, while programme 4 gets deficit of R37 884. The grand total for the entity shows a slight increase from R231 512 to R244 010, which resembles marginal increase of R12 498.

 

1. Committee Observations

 

• The Committee noted with concern through the report of the FFC, the substantial decrease in the number of workers in controlled mines and works paid for loss for earnings per year, from 4 498 in 2019/20 to 1 045 workers in 2020/21, and to remain at 1 045 workers per year over the medium-term.
• The Committee raised concern regarding the lack of consideration for compensation of other health issues that are associated with the industry other that lung diseases (such as diabetes, strokes, loss of hearing, maternal deaths etc.) and reflected on the possibility of expanding the role of the CCOD in terms of other occupational diseases among mineworkers.
• The Committee raised its concern regarding the collection of levies from controlled mines and expressed the need to implement punitive measures against non-compliant mines that were not paying levies.
• The Committee implored the CCOD on its plans to enhance the Compensation Claims Management System, as to the timelines and how exactly the enhanced system would change the claims process.
• The Committee said there were concerns raised by ex-mineworkers regarding theprotracted delays in payments.
• The Committee urged the CCOD to continue to address the backlog of financial statements.
• The Committee expressed concern regarding the Risk Committee that is not functioning optimally. The CCOD indicated that Risk Committee remains an impeding problem that would be changed as part of the amendments, specifically the governance structure. 
• The Committee expressed the need for the CCOD to decentralise its services in order to improve access.
• The Committee expressed concern about the long-term Covid-19 implications on mineworkers, specifically the impact on the respiratory system.
• The Committee raised its concern on the shortage of finance inspectors within the CCOD, and its impact on service delivery.

 

 

3.2.SOUTH AFRICAN MEDICAL RESEARCH COUNCIL (SAMRC)

 

 

1. Introduction

 

The South African Medical Research Council (SAMRC) is one of the entities of the  Department of Health and exists under the amended SAMRC Act, (No. 58 of 1991). It is legislated as a Schedule 3A Public Entity according to the Public Finance Management Act, (Act 1 of 1999) and reports to the NDOHas such, it receives its core funding from the National Treasury through NDOH as per its mandated to conduct research, development, innovation and technology transfer.

 

1. Situational analysis

 

South Africa is confronted with a considerable challenge of inequality between the rich and the poor as well as uneven distribution of health care resources between the private and public sector. In responding to this, a legislative process is underway i.e. the National Health Insurance (NHI), which is aimed at achieving the universal health coverage and halting inequalities in the health care sector. Another formidable challenge that has been experienced for almost a decade now in South Africa is a quadruple burden of disease, which comprise the following:

 

• Violence and injuries;
• Maternal and infant mortality;
• Human Immunodeficiency Virus (HIV) and Tuberculosis (TB);
• Obesity, diabetes, hypertension and cardiovascular diseases.

 

1. SAMRC’s Strategic Goals – 2020/21 -2024/24

 

The period of 2021/22 marks the second year of the implementation of SAMRC Strategic Plan, which ends on 31 March 2025. Its strategic plan is in-sync with the National Development Plan (NDP) (vision 2030), Sustainable Development Goals (SDGs) and the strategic objectives of the Department. In pursuit of meeting its outcome, SAMRC implements the annual performance plan (APP) as a means towards the achievement of the following strategic goals, namely:

 

• Lead the generation of new knowledge;
• Administer health research effectively and efficiently;
• Translate new knowledge into policies and practices to improve health;
• Support, through funding and other mechanisms, technology development and implementation, and innovations in health and technology delivery to improve health;
• Build human capacity for the long-term sustainability of the South African health research.

 

 

 

1. SWOT Analysis

 

Similar to the previous financial year (2020/21), SAMRC provides a swot analysis that gives more weight on weaknesses and threats. For example, the threats column depicts some of the following realities - a diminishing funding for research, data security and scientific misconduct. With respect to weaknesses, the entity recognises the following as serious concerns namely, research translation, lack of diversity in senior management, inefficient succession planning and transformation at senior levels as well as lack of knowledge sharing. As argued in the past, the entity is a national pride given its services and accolades, it is therefore imperative for it as a research institution to translate its research for the public it serves. Failure in this front contradicts its core objective. In addition, it has to expedite and conclude its transformation agenda by having the national demographics at senior and executive levels.

 

1. Human resource management and transformation

 

During the consideration of the entity’s annual report for 2019/20. The Portfolio Committee on Health was not impressed with the status of senior management not reflecting the national demographics. In the 2021/22 APP, the entity promises to continue to pursue transformation.in order to change the demographics of the organisation, particularly at the Senior and Executive levels. However, there are no specifics on how this will be effected.

 

1. SAMRC-NIH Collaboration

 

SAMRC continues to manage its collaboration with the National Institutes of Health of the United States through a Memorandum of Understanding (MOU). The MOU was entered into in 2013 for building long-term collaborations in biomedical and behavioural health science between the two countries. In meeting the joint initiative, the SAMRC has secured R135 million over the medium term expenditure framework (MTEF). The breakdown is as follows:

 

• 2019/2020 R45 million
• 2020/2021 R45 million
• 2021/2022 R45 million

 

This joint-partnership has yielded more advantages for both countries. With 2021/22, being the final year of this joint-partnership, clarity must be sought on the possibility for the extension.

 

1. Performance Indicators and Planned Targets 2021/22

 

SAMRC has four (4) programmes, namely Administration, Core Research, Innovation and Technology as well as Capacity Development. Accordingly, it uses the aforementioned programmes to achieve its object. As per practise in government, the annual performance plans are used as an instrument to implement the strategic goals. Similarly, SAMRC uses annual performance plan to assess its progress with research projects conducted through intra and extra-mural research units and centres. Hereunder is a cohort of performance indicators and estimated performance targets for the current fiscal year 2021/22:

 

Table 7: Performance targets 2021/22

Outcome	Output Indicator	Estimated Performance for 2021/22 (Targets)
To ensure good governance, effective administration, a clean audit opinion and compliance with government regulations	A clean audit opinion on the SAMRC from the Auditor-General	Clean Audit
To promote the organisation’s administrative efficiency to maximise the funds available for research.	Percentage of the government allocated SAMRC budget spent on administration	20%   Has been the same since 2018/19 and is projected to be throughout the MTEF period
To produce and promote scientific excellence and the reputation of South African health research	Number of accepted and published journal articles, book chapters and books by SAMRC affiliated and funded authors	750   Shows a decrease from 800 in 2020/21 and is projected to decrease over the MTEF period to 60
To provide leadership in the generation of new knowledge in health	Number of accepted and published journal articles where the first and/or last author is affiliated to the SAMRC	450   A decrease from 500 in 2020/21 and a further decrease by end of MTEF period to 255
To support the development of new or improved innovations aimed at improving health and targeting priority health areas	Number of new innovation and technology projects funded by the SAMRC aimed at developing, testing and/or implementing new or improved health solutions	4 Same as in 2021/22 and projected to be so over the MTEF Period
	Number of ongoing innovation and technology projects funded by the SAMRC aimed at developing, testing and/or implementing new or improved health solutions	30   Same as in 2020/21 and projected to be same throughout the MTEF Period
To enhance the long-term sustainability of health research in South Africa by providing funding for the next generation of health researchers	Number of awards (scholarships, fellowships and grants) by the SAMRC for MSc, PhD, Post doctorates and Early Career Scientists	130   Marginal increase from 110 in 2020/21. It is projected to increase slightly to 150 in 2023/24 and decrease to 130 in 2024/25
To facilitate the translation of SAMRC research findings into public understanding, policy and practice	Number of conferences, seminars and continuing development points workshops supported by the SAMRC	10   Same as in 2020/21 and projected to be the same throughout the MTEF Period

 

 

1. Proposed Budget for 2021/22

 

As alluded, the National Treasury provides allocation to SAMRC through the Department. In order to meet its mandate, the entity raises a significant share of funding from donors and strategic partnerships through MoUs to supplement the allocation from the National Treasury. Table 8 below depicts the full allocation for 2021/22 fiscal year for the entity.

 

Table 8: Budget for 2021/22 as per programmes

Programme	Budget				Nominal Rand change	Real Rand change	Nominal % change	Real % change
R million	2020/21	2021/22	2022/23	2023/24	2020/21-2021/22		2020/21-2021/22
Programme 1:Administration	208 535	210 373	224 028	0,0	1 838	- 6 641	0,88%	-3,18%
Programme 2: Core Research	684 254	652 410	661 923	0,0	- 31 844	- 58 140	-4,65%	-8,50%
Programme 3: Innovation and Technology	274 697	289 496	287 498	0,0	14 799	3 130	5,39%	1,14%
Programme 4: Capacity Development	81 730	88 817	88 946	0,0	7 087	3 507	8,67%	4,29%
Programme 5: Research Translation	2 300	2 300	2 300	0,0	0,0	-  92	0,00%	-4,03%
TOTAL	1 251 516	1 243 396	1 264 695	0,0	- 8 120	- 58 237	-0,65%	-4,65%

 

In respect to table 8, the difference is obvious on the total allocation for 2021/22 when compared with 2020/21. In real terms, the deficit for the present financial year is R58.2 million, which equates to a negative (minus) 4.65 percentage change. Given this decline, the entity may be unable to execute its intended programmes. Programme 2 (Core Research) is viewed as the expression of the entity’s mandate; however, the considerable decline in this programme is alarming. In real terms, the decrease for this programme is R58.1 million. It is concerning and will likely hamper the planned projects.

 

In 2019/20, SAMRC listed 15 Infrastructure Projects that were to be undertaken worth in excess of at least R2 billion. During this financial year 2021/22, it seeks to undertake and complete 8 infrastructure projects in excess of a billion rand. Similar to previous year, the source-budget for these infrastructural projects is not stated.

 

1. Committee Observations

 

• The Committee expressed its concern in respect to the distribution of bursaries, as only 68% bursary holders were African and reflected on the need to move towards 90% black people being funded by the SAMRC.
• On Covid-19 surveillance, the Committee sought an indication on whether there was evidence of local transmission of the variant(B.1.617)found in India and whether recommendations were made to the Minister to strengthen surveillance measures or introduce mandatory quarantine for travellers.
• On vaccination, the Committee sought clarity on the inclusion of healthcare workers in rural areas as well as traditional healers in the vaccination programme.

• The Committee was concerned that transformation was slow at the entity,in changing the demographics of the organisation, particularly at Senior and Executive levels.

• The Committee noted with concern that the budget for infrastructure projects was not stated.
• The Committee was concerned that hospitals seemed to be ready for the vaccination roll-out, however primary health facilities in particular were not ready, as they are faced with infrastructure, storage and security challenges. The Committee wanted to know what was going to be done to address these shortcomings.
• The Committee sought clarity on what kind of research is being conducted to gain new knowledge to influence policy.
• The effects of vaping were questioned by the Committee and whether the entity has done any research work on this topic.

 

 

3.3.COUNCIL FOR MEDICAL SCHEMES (CMS)

 

 

1. Introduction

 

The Council for Medical Schemes (CMS), as the national medical schemes regulatory authority, is a public entity responsible for regulating the medical schemes industry to protect the interests of members and beneficiaries, “controlling and co-ordinating the functioning of medical schemes, collecting and disseminating information about private health care, and advising the Minister of Health on any matter concerning medical schemes.

 

CMS Annual Performance Plan indicates that as at 31 March 2021, the Council regulates 76 medical schemes, 19 administrators (including self-administered schemes), 41 managed care organisations and 2 231 broker organisations and 7 872 individual brokers.

 

CMS regulate these entities utilising the Medical Schemes Act (No. 131 of 1998) and Regulations to ensure that all the 8.9 million scheme beneficiaries’ interests are protected.  This means that the CMS should ensure that all the regulated entities are at all times compliant with the Act and its provisions.

 

In the previous financial years, the health sector has seen the release of the Medical Schemes Amendment and National Health Insurance Bills, as well as the Health Market Inquiry final report. The process of finalising and implementing these three policy initiatives will provide a basis for all the key initiatives that the Council will focus on within the next five years.

 

In its 2020 – 2025 Strategic Plan, the CMS adopted a new vision that seeks to promote affordable and accessible health cover towards universal health coverage (UHC). The new vision signalled a new determined approach by the CMS to support the national policy initiatives that are driven by the Department. Specifically, the vision of the CMS is “to be an agile and transformative Regulator in order to promote affordable and accessible healthcare cover towards universal health coverage.” Its Mission is to regulate the medical schemes industry in a fair and transparent manner, by:

 

• protecting the public and informing them about their rights, obligations and other matters, in respect of medical schemes;
• ensuring that complaints raised by members of the public are handled appropriately and speedily;
• ensuring that all entities conducting the business of medical schemes, and other regulated entities, comply with the Medical Schemes Act;
• ensuring the improved management and governance of medical schemes;
• advising the Minister of Health of appropriate regulatory and policy interventions that will assist in attaining national health policy objectives; and
• Ensuring collaboration with other stakeholders in executing its regulatory mandate

 

1. Internal environment analysis

 

The CMS identified a number of threats, weaknesses, opportunities and strengths in its APP.

 

Strengths:

• Experienced, skilled personnel
• Success in legal challenges
• Clean audits
• Single source of information for industry performance

Weaknesses:

• Litigations
• Confidential information leaks
• Data and information security
• Succession planning continuity

Opportunities:

• Coding standards and regulation
• Optimise on COVID-19
• CMS fit for purpose
• Mid-year budget review

Threats:

• COFI Bill
• Succession plan
• Training and development
• Change management
• Leadership and mandate change

 

Regarding its internal environment, the CMS reports a “fairly stable environment, despite there being an increased staff turn-over during the past year, as a result of non-renewal of contracts and employees moving to “greener pastures,” as well as identifying the need to restructure the organisation. Furthermore, a number of senior officials are facing allegations of unethical and corrupt behaviour. Of the seven officials, which were suspended with full pay, one has resigned. No detail is provided regarding the allegations of corruption and unethical behaviour, and the CMS merely notes that “the investigations have been completed and the appropriate disciplinary measures implemented.” The

 

The CMS further notes that there were a number of disciplinary matters in the organisation with most of these matters finalised at the Commission for Conciliation, Mediation and Arbitration (CCMA), though no details are provided regarding the nature of the disciplinary matters and number thereof.  The Human Resource sub-programme will embark on a number of projects to improve morale, productivity and staff retention. The CMS reports being under-staffed, as it currently comprises of 132 staff members including temporary and contract staff, with interns and temporary staff performing some of the core regulatory functions. Sixteen additional posts have been identified during the Business Process Mapping exercise. The CMS is currently embarking on appointing a service provider to conduct a Broad Based Black Economic Empowerment (BBBEE) Compliance verification for the organisation. It has also hosted a workshop to address the CMS role regarding economic transformation in as far as private healthcare sector, as well as CMS BBBEE Compliance.

 

1. Performance Indicators and Planned Targets 2021/22

 

The table below highlights some of the annual and quarterly performance indicators for the CMS.

 

 

Table 9: Strategic Objectives and Performance Indicators for 2020/21

PROGRAMME	STRATEGIC OBJECTIVE	PLANNED TARGET 2020/21
ADMINISTRATION	Ensure that reported performance information is in accordance with the Framework for Strategic and Annual Performance Plans	Ensure that overall performance of the entity is maintained above 80%
		Produce an Annual Performance Information report that is reliable, accurate and complete by 31 July each year.
	Ensure effective financial management and alignment of budget allocation with strategic priorities	Obtain an unqualified opinion issued by the Auditor General of South Africa
		Produce a budget that is approved by Council by 31 January each year
	An effective, efficient and transparent system of risk management is maintained in order to mitigate the risks exposure of the CMS	4 Strategic risk register reports submitted to the Council for monitoring,
	An established ICT Infrastructure that ensures information is available, accessible and protected	Achieve 99% in network and server uptime
		Ensure 5% of IT security incidents
	Provide software applications that serve both internal as well as external stakeholders, that improve business operations and performance	Achieve 99% in uptime of all installed application systems where network access exists
	Effectively provide information management services and organise and management organisational knowledge with a view to enhance knowledge sharing	Ensure that 95% of physical requests for information are responded to within 30 days
	Build competencies and retain skilled employees	Minimise staff turnover to less than 15% per annum
		Average turnaround time of 120 working days to fill a vacancy
		Achievement of employment equity targets (BBBEE)
		Develop talent management Policy Framework
	Maximise performance to improve organisational efficiency and maintain high performance culture	100% of employee performance agreements are signed no later than 31 May each year
		100% of employee performance assessments are concluded bi annually
	Legal advisory and support service for effective regulation of the industry and operations of the office	210 written and verbal legal opinions provided to internal and external stakeholders, attended to within 14 days,
	Defending decisions of the Council and the Registrar	100% of court and tribunal appearance in legal matters received and action initiated by the Unit within 14 days
	Corporate governance, Secretariat & Board administration Support and Legal Services for effective governance by the Accounting Authority	Develop an Annual Council Work Plan for Council and its committees by 31 March
		Develop and Review Council and Committees Governance Charters
STRATEGY OFFICE	Formulate prescribed minimum benefits (PMB) definitions to ensure members are adequately protected	10 PMB definitions published, per year
	Develop primary health care package to incorporate into the PMBs	Develop primary health care package to incorporate into the PMBs
	Provide clinical opinions with a view to resolve complaints and enquiries	90% of category 1 clinical opinions provided within 30 working days of receipt from Complaints Adjudication Unit
		98% of clinical enquiries received via e-mail or telephone and responded to within 7 days
	Conduct research to inform national health policy interventions	5 Research projects and support projects published in support of national health policy
ACCREDITATION	Percentage of broker and broker organisation applications accredited within 30 working days on receipt of complete information	80%
	Percentage of managed care organisation applications analysis completed within three months of receipt of complete information	100%
	Percentage of administrators and self-administered schemes’ applications analysis completed within three months of receipt of complete information	100%
RESEARCH AND MONITORING	Conduct research to inform appropriate policy interventions	12 Research projects finalised, per year
	Monitoring trends to improve regulatory policy and practice	1 Non-financial report submitted for inclusion in the annual report
STAKEHOLDER RELATIONS	To create awareness and provide training in order to enhance the visibility and reputation of CMS	Ensure 55% stakeholder awareness of CMS resulting from survey
		35 Stakeholder education and training sessions to enhance skills and in-depth understanding of governance and compliance, among stakeholders
COMPLIANCE AND INVESTIGATION	Inspect regulated entities for routine monitoring of compliance with the prescribed legislation	15 Routine inspections undertaken if applicable
	Strengthen and monitor governance systems medical schemes and other regulated entities	100% of Governance interventions implemented
BENEFITS MANAGEMENT	Ensure that rules of the schemes are simplified, standardised, fair and compliant with the Medical Schemes Act (1998)	80% Interim rule amendments are processed within 14 days of receipt of all information
		90% of annual rule amendments are processed before 31 December each year
FINANCIAL SUPERVISION	Monitor and promote financial soundness of medical schemes	100% of business plans processed in respect of Regulation 29
		100% Recommendations on action plans for schemes with rapidly reducing solvency (but above statutory minimum) for 100% of schemes identified
		100% of auditor applications authorised
		3 Quarterly financial return reports published, (except quarter four)
		1 Financial section prepared for the annual report
COMPLAINTS ADJUDICATION	Resolve complaints with the aim of protecting beneficiaries of medical schemes	70% of category 4 complaints adjudicated within 120 working days and in accordance with complaints procedure
		100% of Rulings published on the CMS website within 14 days of issuing the ruling

 

 

 

1. Proposed Budget for 2021/22

 

Table 10, below provides an overview of the CMS’s budget for 2021/22:

 

 

Table 10: CMS Budget 2021/22

 

CMS is set to spend R186.6 million in 2021/22, up by 4.2% in nominal terms and 0 percent in real terms from 2020/21 when it spent R179.1 million. 

 

In terms of allocation per programme, programme 1: Administration receives the biggest allocation of R104.1 million in 2021/22.  This is a 1.9% nominal decrease, and 5.8% real decrease from 2020/21.

 

The allocation for the Office of the CEO and Registrar decreases by 51.3% nominally from R15.0 million in 2020/21 to R7.7 million 2021/22. In addition, the new sub-programme called Council Secretariat is introduced in this financial year. It would appear that this has been removed from the Office of the CEO and Registrar programme item.

 

Programme 4: Research and Monitoring receives the largest nominal percentage increase of 48.2% increasing from R6.5 million in 2020/21 to R9.6 million in 2021/22. Programme 5: Stakeholder Relations increases nominally by 35.9%, increasing from R9.2 million in 2020/21 to R12.5 million in 2021/22. Programme 6: Compliance and Investigation increases by 27.5% nominally from R11.1 million in 2020/21 to R14.1 million in 2021/22.

 

The key cost drivers per economic classification are as follows: 60.9% (R113.1 million) of CMS operating budget (R185.6 million) is allocated for Compensation of Employees (COE) and 39.1% (R72.5 million) is allocated for goods and services. In terms of spending under goods and services, the main cost drivers are lease payments (R14.1 million), legal fees (R13.1 million), consultants (R13.0) million), property payments (R4.9 million),and spending on computer services at (R4.8 million).

 

1. Committee Observations

 

• The Committee was concerned that the entity has vacant positions and wanted to know the plans in place to fill these vacancies.
• The Committee noted with concern that medical schemesmembers always run out of funds,although they continue tomake their monthly contributions of large sums of money.
• The Committee noted with concern that medical schemes rejectsPre-Exposure Prophylaxis (PrEP) claims as well as claims submitted by sex workers and wanted to know what the provisions are in terms of accessing PrEP.
• The Committee sought clarity on the seven senior management officials who faced corruption allegations and how much money was involved and whether the entity has recovered any of the money.
• The Committee sought clarity on the total cost of the SIU investigations.

 

 

3.4.    SOUTH AFRICAN HEALTH PRODUCTS REGULATORY AUTHORITY (SAHPRA)

 

1. Introduction

 

The South African Health Products Regulatory Authority (SAHPRA) was established in terms of the Medicines and Related Substance Act (Act No. 101 of 1965) (as amended by Act No. 72 of 2008, together with Act No. 14 of 2015). This was in order to regulate and control of registration, licensing, manufacturing, import and all other aspects pertaining to active pharmaceutical ingredients, medical devices, and for conducting clinical trials in a manner compatible with the national medicines policy.

 

SAHPRA is a Schedule 3A public entity operating as a separate juristic entity, independent of the Department. It replaced South Africa’s previous medicine regulatory authority, the Medicines Control Council (MCC), with the objective of creating an effective regulator that is responsive and publicly accountable and able to make timeous regulatory decisions. One of the critical priorities of SAHPRA, since its launch, has been the clearance of approving new medicines and clinical trials backlogs.

 

The Authority inherited many historical challenges that plagued the MCC, including slow regulatory decision times, and an extensive backlog of pending regulatory applications. SAHPRA Annual Performance Plan (APP) 2021/22 outlines a range of outcomes and indicators aimed at overcoming these historical challenges as well as positioning SAHPRA in a way to serve the proposed National Health Insurance (NHI) effectively.

 

As in 2020/21, South Africa is still in the grips of the COVID-19 pandemic, which will no doubt impact on SAHPRA’s plans. Indeed, SAHPRA’s role has been thrust into the limelight as it has the authority to approve (or not) vaccines, tests and treatment for the deadly virus. This paper will provide an overview of the budget and planned performance targets for 2021/22. Therefore, SAHPRA should brief the Committee on the impact of COVID-19 on its budget and the planned targets for the 2021/22 period. SAHPRA’s Vision is to be an “agile and responsive African health products regulator that is globally recognised as an enabler of access to safe, effective and quality health products in South Africa.” Its Mission is to “promote access to health products and protect human and animal health in South Africa through making science-based regulatory decisions.” SAHPRA’s impact statement is that: All health products in South Africa meet world-class safety, quality, efficacy and performance standards. To achieve its impact, SAHPRA identified the following seven (7) outcomes:

 

1. Effective financial management;
2. Financial sustainability achieved through revenue generated and enhanced operational efficiencies;
3. The needs and expectations of all SAHPRA stakeholders continuously met;
4. A positive and enabling working culture created;
5. Attract and retain superior talent;
6. Strengthened Information and Communication Technology and digitization; and
7. High levels of organisational operational efficiency and effectiveness in the regulatory function maintained.

 

SAHPRA reports having revised its Strategic Plan 2020/21 – 2024/25. The focus for the 5-year period is on achieving stabilisation and momentum out of the transition phase towards greater autonomy, effective governance and operational efficiency. The number of outcomes have been reduced from nine (9) to seven (7), to ensure that the focus is on core business. The 5-year targets linked to the outcomes have been revised to support SAHPRA’s approach towards the incremental reduction of the time taken to finalise its regulatory activities such as the approval time taken to register new medicines.

 

1. Performance Indicators and Planned Targets 2021/22

 

Programme 1: Administration

 

This programme is responsible for providing leadership and administrative support in order for to deliver on its mandate and comply with all relevant legislative requirements. This programme has about 14 set targets for the year under review, up from eight (8) targets set in 2019/20 financial year.

 

This programme has four sub-programmes that include:

 

1. Financial and Supply Chain Management;
2. Governance and Compliance;
3. Information Technology and Communication (ICT); and
4. Human Resource Management.  

 

Targets in this programme include, amongst others:

• Attaining an unqualified audit.
• About R162 million total revenue generated from fees.
• Fifty percent (50%) of change management interventions implemented.
• Sixty percent (60%) of budgeted positions filled.
• Thirty percent (30%) of the Workplace Skills Plan implemented.

 

Programme 2: Authorisation Management

 

This programme serves as a project office responsible for providing specialised administration support necessary for core functional programmes to enable the entity to deliver on its roles in specific reference to processing licences and permits. The programme has a total number of six targets for 2021/22 financial year. The key targets for the programme include:

 

• Ninety-five percent (95%) of medicine registration backlog cleared.
• Ninety-five percent (95%) of variation applications backlog cleared.
• Eighty percent (80%) of New Chemical Entities finalised within 590 working days.
• Sixty percent (60%) of generic medicines finalised within 250 working days.
• WHO maturity level 3 obtained.

 

Programme 3: Inspectorate and Regulatory Compliance

 

The programme is responsible for ensuring public access to safe and quality health products through conducting inspections and regulatory compliance. The focus of this programme includes assessment of site compliance, with good regulatory and vigilance practices, including facilitating Good Manufacturing Practice (GMP), Good Wholesaling Practice (GWP), Good Distribution Practice (GDP), Good Clinical Practice (GCP) and Good Laboratory Practice (GLP) compliance.

 

The programme has only three (3) targets for 2021/22 financial year. The key targets for the programme include:

 

• Sixty percent (60%) of new GMP and GWP related licences finalised within 125 working days.
• Seventy percent (70%) of permits finalised within 20 working days.
• Seventy percent (70%) of health product quality complaints reports produced within 30 working days.

 

 

 

 

 

Programme 4: Medicines Evaluation and Registration

 

The programme is responsible for conducting evaluation of safety, quality and therapeutic efficacy of medicines and register them for use as per delegated authority in terms of relevant legislation.

 

The programme has four targets (down from five in the previous financial year) that it plans to achieve during the year under review. Some of these targets include:

 

• Eighty-five percent (85%) applications for the sale of unregistered Category A (human) medicines finalised within 24 working hours.
• Eighty percent (80%) rate of human clinical trial applications finalised within 90 working days (down from 120 working days).
• Seventy percent (70%) reports on health product safety signals issued within 40 working days (previously 20 working days) after receipt.
• Four (4) safety awareness webinars held.

 

Programme 5: Medical Devices and Radiation Control

 

This programme is responsible for developing and maintaining regulations and guidelines pertaining to the regulatory oversight of medical devices, ionising and non-ionising radiation emitting devices and radioactive nuclides.

 

The programme has five (up from three) targets for 2021/22. During the year under review, the Authority plans to achieve:

 

• Seventy percent (70%) medical device establishment licence applications finalised within 90 days.
• Guidelines to support the medical device registration regulations approved by the Executive Authority.
• Seventy percent (70%) licence applications for listed-electronic products finalised within 30 working days.
• Seventy percent (70%) of new application licenses for radionuclide authorities issued within 30 working days.
• Board approved Co-Regulation Model with the National Nuclear Regulator.

 

 

 

1. Proposed Budget 2021/22

 

Table 11 below provides an overview of the budget per programme in SAHPRA for the period under discussion.

 

Table 11: SAHPRA Budget 2021/20

 

 

SAHPRA is set to spend R357.6 million in 2021/22, down 7.8% in nominal terms and 11.5%t in real terms from the 2020/21 financial year when it spent R387.8 million. This will likely put the entity under strain as it deals with the demands of the COVID-19 pandemic, as well as implement innovations and advances in improving its processes with technology in order to meet its goals of improved average registration times of products as well as reducing the substantial backlog it carries.

 

The largest reduction in budget allocation in terms of percentage is in programme 5: Devices and radiation, which declines from R53.9 million in 2020/21 to R39.7 million in 2021/22, a reduction of R14.2 million. This represents a 26.4 percent nominal and 29.4 percent real decrease year on year.

 

Administration (Programme 1) remains the largest programme in terms of allocation and also declines significantly, from R137.9 million in 2020/21 to R116.5 million in 2021/22, a reduction of R21.5 million or 15.6 percent in nominal terms (19 percent reduction in real terms).

 

Programme 3: Inspectorate and regulatory compliance budget is also reduced, declining from R38.5 million in 2020/21 to R35.8 million in 2021/22. This represents a nominal reduction of 7% (10.7% real reduction).

 

The two remaining programmes both receive modest increases. Programme 2: Authorisation Management increases from R69.1 million in 2020/21 to R72.5 million in 2021/22, a 5% nominal increase, which is only 0.7 percent in real terms.

 

Programme 4: Medicine evaluation and registration receives a R4.7 million increase from R88.2 million in 2020/21 to R92.7 million in 2021/22. This is a 5.4 percent nominal and 1.1% real increase year on year.

 

In terms of budget allocation on specific line-items according to economic classification, the biggest cost drivers of the Authority’s total budget include COE with an allocation of R185.2 million (consumes 52% of the total budget) down from R215.7 million in the 2020/21 financial year. This is of concern, as SAHPRA is dependent on highly skilled employees to perform its functions. The committee should enquire about the plans the entity has in place to mitigate this reduced budget, whilst trying to improve the morale of staff, which it has as a priority. Goods and Services with an allocation R172.4 million, consumes 48% of the total budget for the year under review. It receives a small nominal increase of R382 000.

 

1. Committee Observations

 

• The Committee noted with concern the applications backlog and wanted to know how the entity was going to address it considering its human resources shortages.
• The Committee was concerned about funding constraints the entity faces, which impacts on its ability to deliver on its mandate.
• The Committee sought clarity on how many eligible medical cannabis permits have been granted and how many were from black farmers.
• The Committee sought clarity on the SIU outcomes which was instituted by the President in 2019.
• The Committee noted with concern about the findings highlighted by the Auditor General and wanted to know what the entity was going to do to address those findings.

 

 

3.5.    NATIONAL HEALTH LABORATORY SERVICE (NHLS)

 

1. Introduction

 

The National Health Laboratory Service (NHLS) is a national public entity formed according to the National Health Laboratory Service Act No. 37 of 2000 to provide cost-effective and efficient health laboratory services, support health research and to provide training for health science education. The NHLS is the largest provider of diagnostic pathology services countrywide through its 268 laboratories, which service more than 80 percent of the South African population. The NHLS plays a pivotal role in providing testing for COVID-19 in the public sector.

 

 

 

1. Legislative and other mandates

 

The legislation that makes provision for NHLS’s planning, monitoring of performance, reporting and evaluation are the following:

 

• The NHLS Amendment Act, No. 5 of 2019;
• Public Finance Management Act, No. 1 of 1999 as amended (PFMA);
• The National Health Act, No. 61 of 2003; and
• Constitution and Bill of Rights.

 

1. Organisational environment

 

Laboratory Services

 

The NHLS laboratories are predominantly based in public hospitals, in all nine provinces. In terms of the service, turnaround time (TAT) of tests is one of the most prominent indicators of laboratory service performance and quality service is often used as a key performance indicator. The NHLS has in the past years shown to have achieved good TAT during the analytical phase, however, clinicians and patients have not experienced the impact of the reported in-lab TAT. The NHLS aims to continue to improve its systems to ensure that the total turnaround times are improved to ultimately add value to the care of the patients.

 

COVID-19 Pandemic

 

The COVID-19 pandemic impacted negatively on the priority programmes, as evidenced by the decrease in the number of tests performed for many of the priority programme tests when compared to the same period in the previous financial year. This was due to patients not accessing health facilities during the lockdown period. Despite the challenges posed by the pandemic, the NHLS continued to implement the processes of enhancing the provision of rapid, reliable and efficient service delivery at low cost.

 

Accreditation

 

The NHLS has implemented a concerted drive to ensure that all facilities are accredited for the implementation of the National Health Insurance (NHI). The NHLS has made remarkable progress in theSouth African National Accreditation System (SANAS) accreditation of laboratories. A total of fifty (50) laboratories were SANAS accredited, between 2018 and 2020. The NHLS will continue to uphold high-quality service in the laboratories that are not yet SANAS accredited by continuously performing quality compliance audits and enrolling all its laboratories in the Proficiency Testing Schemes.

 

Research and Innovation

 

The NHLS has developed a strategic innovation plan aimed at creating an enabling step that will allow the organisation to improve efficiencies. The plan is designed to enhance innovative ideas that will result in cost-saving as well as novel mechanisms of delivery of laboratory services, improving the competitiveness of the NHLS.

 

Teaching and Training

 

The NHLS is the sole provider of training of pathologist registrars. It also trains intern medical scientists, intern medical technologists and student medical technicians in the country. To date, the pass rate of registrars, who are trained to be pathologists, has been a huge challenge within the NHLS.

 

Governance

 

The Board, in playing its oversight role on good governance has implemented a fraud prevention and response plan. The Board received a tip-off on several alleged misconduct issues and conducted investigations and reported these irregularities to the Auditor-General’s office. The Committee should follow up with the entity regarding these investigations.

 

SWOT Analysis

 

The NHLS conducted a SWOT analysis to help it understand the current situation and environment for which to plan and execute its mandate. The following shows the Strengths, Weaknesses, Opportunities and Threats for the entity:

 

Strengths:

• Strong academic base
• Internationally renowned intellectual capital
• Exclusive national integrated data warehouse
• National pathology laboratory footprints
• African leader in laboratory medicine
• Experts in dealing with outbreaks

Weaknesses:

• Lack of succession planning and development across various levels
• High failure rate of registrars
• Inadequate ICT infrastructure capacity
• Lack of ownership of value chain from collection of samples to return of results
• Lack of consequence management
• Limited performance monitoring system

Opportunities:

• Multi sectorial partnerships to enhance sharing of intellectual capacity
• Other source of income which can diverse the revenue stream
• Implementation of the National Health Insurance
• Remote oversight of laboratories by pathologists
• Strengthening integrated IT systems
• Opening of new medical schools will expand the teaching platform

Threats:

• International reduction in grant allocation
• Private sector competition especially in anatomical pathology
• Medical inflation in relation to goods and services
• Lack of investment in IT infrastructure
• The progressive erosion of the training platform
• COVID-19 pandemic and its impact on services and financial sustainability
• The impact of COVID-19 on employees

 

1. Performance Indicators and Planned Targets2021/22

 

The table below provides selected strategic objectives and the planned targets for the various programmes for 2021/22 financial year.

Table 12: Programme Performance Indicators and Targets for 2021/22

PROGRAMME	PERFORMANCE INDICATOR	PLANNED TARGET 2021/22
LABORATORY SERVICE	Develop and implement a service delivery model	Delivery model developed
	Develop and implement the specimen tracking system	Specimen tracking system developed
	Percentage       TB microscopy tests performed within specified turnaround time (40 hours)	92%
	Percentage       TB      GeneXpert       tests performed within specified turnaround time (40 hours)	92%
	Percentage      HIV       CD4      tests performed within 40hours	93%
	Percentage      HIV       Viral      Load          tests performed within 96hours	80%
	Percentage HIV PCR tests performed within 96 hours	80%
	Percentage Cervical Smear screenings performed within 5 weeks	90%
	Percentage laboratory tests (FBC) performed within 8 hours	93%
	Percentage laboratory tests (U&E) performed within 8 hours	93%
	Develop and implement Point of Care testing (POCT) plan	Point of Care testing plan developed
	Implement digital pathology	Develop an implementation plan
ACADEMIC AFFAIRS, RESEARCH AND QUALITY ASSURANCE	Percentage of laboratories achieving compliance during annual quality compliance audits	92%
	Percentage of laboratories achieving proficiency      testing  scheme performance standards of80%.	90%
	Number of National Central laboratories that are  SANAS accredited	52
	Number of Provincial Tertiary laboratories that are SANAS accredited	15
	Number of Regional laboratories that are SANAS accredited	28
	Number of District laboratories that are SANAS accredited	28
	Number of ISO 9001 certified departments	4
	Develop and implement the pathologists national coverage plan	20% implementation of the national coverage plan
	Number of articles published in peer- reviewedjournals	640
	Number of pathology registrars admitted and trained in the NHLS	30
	Number of intern medical scientists admitted and trained in the NHLS	50
SURVEILLANCE OF COMMUNICABLE DISEASES	Percentage of identified prioritized diseases under surveillance	90%
	Percentage of outbreaks responded to within 24 hours after notification	100%
	Percentage of NICD laboratories that are SANAS accredited	100%
	Annual report of population-based cancer surveillance	1
	Number of NICD laboratories with WHO reference status	7
	Number of articles published in the peer reviewed journals.	150
	Number of field epidemiologists qualified	7
OCCUPATIONAL AND ENVIRONMENTAL HEALTH AND SAFETY	Percentage of occupational and environmental health laboratory tests conducted within specified turnaround time	90%
	Number of occupational, environmental health and safety assessments completed	15
	Number of occupational health surveillance reports produced	4
	Percentage of NIOH laboratories that are SANAS accredited	100%
ADMINISTRATION	Ratio of current assets to current liabilities	2:1
	Cash flow coverage ratio (operating cash in-flow/ total debts)	2:1
	Number of Creditor days	30 days
	Number of Debtors days	115 days
	Percentage        turnaround       time                        for awarding tenders within 90days	90%
	Develop and implement a revenue and costing strategy	Implement 30% of the revenue and costing strategy
	Unqualified audit opinion of the Auditor General	Unqualified
	Percentage of allegations reported through the NHLS tipoff platform that are investigated within 180 days	90%

 

1. Proposed Budget for 2021/22

 

The NHLS’ comprehensive budget is composed of two components namely the annual government allocation and income from providing laboratory tests to patients predominantly from public hospitals. Table 13 below depicts the statement of financial performance highlighting major categories and projected allocation for 2021/22.

 

Table 13:Statement of financial performance

	2020/21	2021/22
	R’000	R’000
Revenue
Test Revenue	9 660 881	9 833 542
Government Allocation/Transfers	687 878	640 057
Other Revenue	627 238	377 238
Interest Received	166 820	175 161
Total Revenue	11 142 818	11 026 000
Expenses
Compensation of employees	(4 497 606)	(4 834 569)
Goods and services	(6 938 654)	(6 080 641)
Total expenses	11 436 260	10 915 210
Surplus/(Deficit)	-293 442	110 789

 

 

In reference to Table 13, the NHLS projects a total expenditure of R11.1 billion in 2021/222, which comprises of Compensation of employees (R4.8 billion) and Good and Services (R6.1 billion). Total Revenue is projected to increase marginally from R11 billion in 2020/21 to R11.4 billion over the medium-term. Other Revenue is expected to decrease by approximately 40 percent from R627.2 million in 2020/21 to R377.2 million in 2021/22. Transfers are set to decrease at an average annual rate of 12.3% from R687.9 million in 2020/21 to R577.6 million in 2023/24. The NHLS highlights that the decrease in transfers received will impact negatively on activities of the National Institute of Communicable Diseases (NICD) and the National Institute for Occupational Health (NIOH).

 

 

 

1. Committee Observations

 

• The Committee noted that TB tests have gone down and is concerned that this might result in aspike in TB cases.
• The Committee noted with concern the findings of the AG and wanted to know how will the entity address these findings.
• The Committee expressed concern that there are some NHLS laboratories that are not adequatelyequipped and were not properly functioning.
• The Committee wanted to know what the entity has done to tighten its systems to curb corruption,noting that there are employees who were dismissed due to corrupt activities.
• The Committee wanted an update on the integration of the forensic chemistry laboratories with the NHLS and wanted to know whether there have been any discussions with the unions in this regard.
• The Committee noted with concern the budget cuts within the NICD and wanted to know if it will be able to meet the demand considering that the country is in the middle of a pandemic.
• The Committee noted with concern the high failure rate of registrars and wanted to know what the challenges were in this regard.

 

 

3.6.    OFFICE OF HEALTH STANDARDS COMPLIANCE (OHSC)

 

 

1. Introduction

 

The Office of the Health Standard Compliance (henceforth, OHSC) is established in terms of the National Health Amendment Act, No. 12 of 2013 and is listed as a Schedule 3A Public Entity in terms of the Public Finance Management Act (PFMA). It functions under the accounting authority of the Board and the Chief Executive Officer (CEO). According to the Act, OHSC is responsible for protecting and promoting the health and safety of users of health services by:

 

• Monitoring and enforcing compliance by health establishments with norms and standards prescribed by the Minister in relation to the national health system; and
• Ensuring consideration, investigation and disposal of complaints relating to non-compliance with prescribed norms and standards in a procedurally fair, economical and expeditious manner.

 

1. OHSC governance

 

As stated earlier, the Act prescribes for OHSC to be governed by the Board. In strengthening the governance of the entity, the Board has structured itself into four committees that provide oversight over the running of the entity. The Board committees are:

• Audit, Risk and Finance Committee;
• Certification and Enforcement Committee; 
• Human Resource and Remuneration Committee; and
• EXCO-Board Chair and Chairs of the other sub-committees.

 

Moreover, in this financial year (2021/22), the Board has decided to split the Audit Risk and Finance Committee according to its Charter and Terms of Reference into two committees, namely:

 

• Audit and Risk
• Finance and ICT

 

The aforementioned governance structure is significant in managing the entity’s assets and advising the Accounting Authority on matters pertaining to OHSC status and direction.

1. Situational analysis

 

The entity has a conducted a reflective analysis within and outside of its operation to determine its strengths and challenges. In this regard, it employed three assessment methods namely PESTLE, SWOT and Stakeholder analysis. The outcome of these exercises were that there are diverse challenges for management, Board and the health sector which require attention including budget increase for the entity to be able to fulfil its mandate. The following are some of the concerns coming out of the entity’s annual performance plan (APP) which paint an impression that it may struggle to meet its targets given the amount of challenges it faces.

 

Key Risks

 

• Fraud and corruption;
• High backlog of complaints;
• Litigation against the OHSC; 
• Potential failure of ICT infrastructure;
• Inadequate funding for OHSC operations;
• Insufficient human resource capacity and skills-mix;
• Inconsistency in assessing compliance by Inspectors;
• Absence of Business Continuity Plans (BCP) & Disaster Recovery Plans;
• Delays in administrative decision-making process which may lead to litigations;
• Limited number of norms and standards for different types of health establishments;
• Poor submission rate for Annual Returns and Early Warning System (EWS) Reports;
• Limited understanding and clarity on independence and mandate of OHSC by key stakeholders.

 

1. Performance Indicators and Planned Targets 2021/22

 

The Office has five (5) programmes, namely Administration, Compliance Inspectorate, Complaints Management and Office of the Ombud, Health Standards Design, Analysis and Support as well as Certification and Enforcement. In executing its remit, the entity apportions activities to achieve its strategic outcomes and overall objective of ensuring that the provision of safe and quality healthcare services are experienced by the health users. The table below discusses a set of selected indicators and targets in comparison with the previous financial year.

 

Table 14: Performance Targets 2021/22

Outcome	Output Indicator	Estimated Performance for 2021/22 (TARGETS)
A fully functional OHSC	Percentage of ICT availability for core OHSC services	95%   Projected to be the same throughout the MTEF period
	Number of community stakeholder engagements to raise public awareness on the role and powers of the OHSC and Health Ombud	12 Projected to be the same throughout the MTEF period
	Unqualified Audit Opinion achieved by the OHSC	Unqualified audit
Compliance with norms and standards is effectively monitored	Percentage of public (health establishments) HEs inspected for compliance with the norms and standards	8% (299 of 3 741)   Decreases from 10% (382 of 3816) in 2020/21 and projected to further decrease to 6% (224 of 3 741) in 2023/24
	Percentage of private health establishments inspected for compliance with the norms and standards	6% (24 of 393)   Target remains the same as in 2020/21 and isprojected to be throughout MTEF period
Improved quality of health care services rendered to the users in the Health Establishments	Percentage of complaints resolved within 6 months through investigation	10%   Target has increased with 50% from 5% in 2020/21
	Percentage of complaints resolved within 12 months through investigation	5%   It is a new target and is projected to be increased to 10% in 2023/24
	Percentage of complaints resolved 18 months through investigation	5%   It is a marginal increase from 2% in 2020/21
Facilitate achievement of compliance with the norms and standards regulations for different categories of health establishments	Number of recommendations for improvement in the healthcare sector made to relevant authorities	3   Target remains the same as in 2020/21 and is projected to be so throughout the MTEF period
	Number of guidance workshops conducted to facilitate implementation of the norms and standards regulations	24   Target remains the same as in 2020/21 and is projected to be so throughout the MTEF period
Compliance with norms and standards increased	Number of health establishment compliance status reports published every six months	2   Target remains the same as in 2020/21 and is projected to be so throughout the MTEF period

 

 

As observed in the previous years, most targets are largely static with marginal increase in some. Another striking observation is that the National Health Insurance Bill is before Parliament and it attributes functions to OHSC but the number of activities/performance indicators do not correlate with what the Bill envisages. Various reports including the NDOH itself acknowledge the challenges that the public health sector faces. In this regard, it is argued that OHSC given its mandate in the health sector has to have increased targets in order to improve the outlook and the quality of public health care service.

 

1. Proposed Budget for 2021/22

 

Table 15 provides the proposed allocation by the National Treasury to the entity through the National Department of Health (NDOH). The allocation is split according to programmes as discussed above.

 

Table 15: Budget for 2021/22 as per programmes

Programme	Budget				Nominal Rand change	Real Rand change	Nominal % change	Real % change
R million	2020/21	2021/22	2022/23	2023/24	2020/21-2021/22		2020/21-2021/22
Administration	55 685 664	58 983 712	61 371 588	56 505 267	3 298 048	920 585	5.92%	1.65%
Compliance Inspectorate	48 086 600	53 988 829	55 253 818	57 001 509	5 902 229	3 726 095	12.27%	7.75%
Complaints Management and Office of the Ombud	19 797 768	20 388 822	21 733 705	21 564 179	591 054	- 230 760	2.99%	-1.17%
Health Standards Design, Analysis and Support	12 743 929	13 395 909	14 223 332	13 519 931,0	651 980	112 029	5.12%	0.88%
Certification and Enforcement	2 660 511	2 692 353	2 855 347	2 822 357	31 842	- 76 678	1.20%	-2.88%
TOTAL	138 974 472	149 449 625	155 437 790	151 413 243	10 475 153	4 451 271	7.54%	3.20%

 

 

As reflected in table 15, the overall proposed allocation for the entity is R149.4 million for 2021/22, which shows a nominal increase of R10.4 million from R138.9 million in 2020/21. This means that the real change percentage is 3.20%. However, there is a decrease in real terms on two programmes, namely; Complaints Management and Office of the Ombud with -R-230 760.3 and Certification and Enforcement with minus R76 thousand.  The decrease on programme 3 is considerable and may have a greater implication to the entire entity given the magnitude of complaints that the public channel to the entity including the Office of the Ombud. There is a need for the entity to explain the plans put in place to ensure that its planned programmes would not be affected with the decrease on these two programmes.

 

1. Committee Observations

 

• The Committee noted with concern that the office has only monitored 8% of the norms and standards.
• The Committee was concerned about staff shortages at the entity especially inspectors as this affects the entity’s ability to deliver on its mandate.
• The Committee noted with concern that the entity was unable to go back to check progress if its recommendations have been implemented at facilities that they have visited.
• The Committee questioned the visibility of the entities in rural areas.

 

4. COMMITTEE RECOMMENDATIONS

 

The Portfolio Committee recommends that the Minister of Health should consider the following:

 

1. Department of Health

 

• The Department should engage the National Treasury in order to address the massive budget cuts, including grant reductions, effected in the health sector.
• The Department should put forward tangible targets with clear timelines for the Covid-19 vaccination programme and these should be communicated to the public.
• The Department should embark on community engagements and educate communities on the importance of vaccination.
• The Department should ensure that it addresses all the findings by the Auditor General and report to the Committee on progress.
• The Department should ensure that entities are properly funded to deliver on their mandate.
• The Department should furnish the Committee with an action plan aimed at addressing infrastructure backlogs.
• The Committee should strengthen programmes aimed at raising awareness on HIV/AIDS stigma.
• The Department should progressively ensure that primary health facilities are ready for the vaccination programme in terms of storage facilities, security and adequate infrastructure.
• The Department should present to the Committee an action plan aimed to address the challenges that plague healthcare facilities.
• The Department should ensure the timeous placement of interns.

 

 

1. Entities

 

• All entities should address the findings by the AG and report to the Committee on progress made. The action plans should be shared with the Committee.
• All entities should ensure that they have proper systems in place to root out corruption, fraud and maladministration.

 

CCOD

• The CCOD should furnish the Committee with a detailed report on the improved Compensation Claims Management System.
• The CCOD should improve on the timelines in the payment of ex-mineworkers.
• The CCOD should collaborate with research institutions to evaluate the long-term implications of Covid-19 on mineworkers. The findings should be presented to the Committee.
• The CCOD should bolster the capacity of finance inspectors in order to improve on levy collection.

SAMRC

• The SAMRC should come up with tangible plans to address transformation at the entity.
• The SAMRC should ensure the inclusion of healthcare workers in rural areas and traditional healers in the vaccination programme.

CMS

• The CMS should ensure that all critical posts are filled timeously.
• The CMS should place moreemphasis on public education on medical schemes benefits and access to certaintreatments (for instance,PrEP).

 

SAHPRA

• SAHPRA should furnish the Committee with a report on how it is addressing the current backlog and other legacy issues.

NHLS

• The NHLS should ensure that all laboratories are adequately equipped and functional.
• The NHLS should look into the budget cuts within the NICD in order to ensure that the institute delivers on its mandate, in view of the pandemic.

OHSC

• The OHSC should ensure that vacant posts are filled, particularly posts for inspectors.
• The entity should continue to strengthen its visibility in rural areas.

 

 

5. CONCLUSION

 

Having considered the annual performance plans and the budget of the Department of Health and its entities, the Committee will engage the Minister of Finance to discuss the Committee’s concerns relating to the budget cuts.

 

Unless otherwise indicated, the Department of Health should respond to the Committee recommendations in three months from the day the report is adopted by the House.

 

 

Report to be considered.