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Gauteng Dept of Health secures large adjustment in medium-term provincial budget

16th November 2017

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

     

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The Gauteng Department of Health on Thursday secured the bulk of the adjustments delivered in the Medium-Term Budget Policy Statement and the Adjustment Budget.

The total budget of the provincial government increased from R108-billion to R112-billion, with the Department of Health among the biggest recipients of the additional allocations, obtaining a further R1.7-billion, with R1.23-billion set aside to assist with spending pressures on goods and services.

Another R487-million had been allotted to support ongoing maintenance and the revitalisation of health facilities.

“We have to allocate more money to health,” Gauteng Finance MEC Barbara Creecy told media during a prebudget lock-up briefing at the Legislature on Thursday, assuring, that great pains were being taken to urgently rectify the issues plaguing the provincial health department.

The department’s dismal current financial state is increasingly becoming a major risk to the public purse amid significant pressures that could be attributed, in part, to the department’s management capacity.

Creecy attributed the challenges to “less than ideal” standards and tools of internal management and control, which resulted in R1.9-billion in irregular expenditure and R6.9-billion accruals in the 2016/17 financial year; the misalignment between increases in the burden of disease, population, medical inflation and budget growth; in-migration of cross boundary and foreign patients to the province’s health facilities; and a steep increase in the number of medico legal claims.

To mitigate some of the challenges, an executive council subcommittee was established, with a strategic focus on improving the financial health of the department and the implementation of a turnaround strategy aimed at developing effective human resources management; enabling better health operations management; managing medico-legal risks and litigations; and improving corporate governance.

Since then, the department had settled R416-million in outstanding invoices of less than R5-million each of 1 721 mostly small and medium-sized service providers.

With billions of rands still outstanding to major suppliers, the committee is developing a payment plan for the next five months, prioritising the National Health Laboratory Services and the South African National Blood Services, both of which are responsible for services across the country.

The Gauteng Department of Health cannot be responsible for undermining these national institutions, she said, noting the “very difficult” financial situation the department found itself in.

“To protect the future goods and services budget of the department, so we are able to pay for medicines and fill all critical clinical posts, we must manage down the accruals over the remainder of this term,” she said.

Democratic Alliance shadow minister of health Jack Bloom earlier this week claimed that the Gauteng health department owed some R3.7-billion to 1 576 suppliers who had not been paid for more than 90 days, noting that this was down from the R4.7-billion that was owed as at April 1.

Further, Creecy raised concern over the extent of the medico-legal liabilities, and the threat this posed for the budget for essential health services.

An audit is now under way to establish a “proper record” of all the legal cases, ensure the proper supervision of legal practitioners, and manage down legal costs and liability.

“We remain deeply concerned about the extent of medico-legal liability facing the Department of Health and the threat this poses to the budget for essential health services,” she said.

A portion of the Office of the Premier’s own R21.4-million additional allocation – excluding the addition of R10.1-million for unforeseeable and unavoidable expenditure – has been set aside to intervene in the medico-legal litigation.

The provincial departments of Education, Infrastructure, Roads and Transport and e-Government were also recipients of large additional allocations.

Education received R942.6-million to assist with the preparations for the opening of schools in January, including R138.5-million for electricity bills, R150-million for teachers’ salaries, and R261.5-million to fund spending pressures within the school transport and the school nutrition programmes.

A further R382-million is made available to build schools and classrooms.

Roads and Transport obtained an extra R159.2-million adjustment for in-year budget pressures in goods and services, while Infrastructure Development was allocated R207.1-million and e-Government R100-million.

Edited by Creamer Media Reporter

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