NATIONAL%20DEPARTMENT%20OF%20HEALTH

1
NATIONAL DEPARTMENT OF HEALTH

• PRESENTATION TO STANDING COMMITTEE
  APPROPRIATIONS
• 12 AUGUST 2009

2
INTRODUCTION

• The final appropriation for the National
  Department of Health for the year 2008/09 was
  R15,851,169.
• Of the R15,851,169 appropriated, an amount of
  R14,362,786 is a provision for Conditional
  Grants. This is 91 of the total allocation for
  Vote 14.
• Actual total expenditure amounted to R15,464,470
  which is 97.6 of the appropriated amount.
• Under expenditure amounted to R386,699m which is
  2.4 of the total appropriated.
• The Conditional grants under expenditure makes up
  93 of the total under expenditure.

3
NATIONAL DEPARTMENT OF HEALTH EXCLUDING
CONDITIONAL GRANTS.
4
NDOH BUDGET ACTUALS EXCLUDING CONDITIONAL
GRANTS
5
SUMMARISED REASONS FOR THE OVERALL UNDERSPENDING

• The under spending of R3,9m in Programme 1 was
  due to the delays experienced in the relocation
  to the newly upgraded Civitas Building resultant
  from incomplete processes between the contractors
  and the Public Works Department. Although the
  funds are committed, the payments could not be
  made during the year.
• Programme 2 under spent by R38m due to the
  slow progress on the mortuaries to be built as
  well as payment of invoices with the Forensic
  Pathology Services Conditional grant at
  provincial level. Affected province is Northern
  Cape (R10.2m).

6
SUMMARISED REASONS FOR THE OVERALL UNDERSPENDING

• Funds earmarked to NGOs under programme 2 could
  not be released in full before year-end.
• Three NGOs were affected viz Lovelife (21m)
  earmarked for last quarter. A report for the 3rd
  quarter utilization was still awaited. SAAVI (2m)
  earmarked for VAT, the funds were only available
  after the Adjusted budget. The contract expired
  in Jan09, hence transfer not effected and NICDAM
  HIVAIDS governance and leadership project (2m).
• Programme 4 under spent by R10m due to the
  supply chain processes delays in finalizing a
  tender for an audit of Nursing Colleges project.
  Roll-over was requested.

7
SUMMARISED REASONS FOR THE OVERALL UNDERSPENDING

• The under expenditure in Programme 5 amounting to
  R323,904m was attributed to withheld funds from
  the Hospital Revitalization and the Forensic
  Pathology Services conditional grants for some
  provinces due to delays with awarding of tenders
  as well as construction processes of approved
  projects including invoices which could not be
  paid before year end due to cash flow
  limitations. The affected provinces are Western
  Cape (R170,381m) and Mpumalanga (R153,523).
• The remaining unspent funds under programme 5 was
  for the completion of the District Health
  Information systems project.

8
NATIONAL DEPARTMENT OF HEALTH
9
DETAIL REASONS FOR OVER/UNDER SPENDING
(un-audited)

• Comprehensive HIV AIDS
• Gauteng (88.9)
• Incurred expenditure could not be paid in time
  due to cost containment measures implemented on
  Goods Services.
• Mpumalanga (105.2)
• Enrolled more that anticipated patients on ART.
  Overspent on Laboratory and Drugs
• Western Cape (110.3)
• Target for patients on ART over achieved,
  translating to over expenditure.
• Roll overs had to be requested at provincial
  level since National had transferred all
  provincial allocations.

10
NATIONAL DEPARTMENT OF HEALTH
11
DETAIL REASONS FOR OVER/UNDER SPENDING
(un-audited)

• Forensic Pathology Services
• The under expenditure resulted from the delay
  in appointing contractors and acquisition of
  land Department of Public Works for the
  Northern Cape province. National withheld the
  transfer of funds.
• WC and FS requested their roll over from their
  provincial Treasury.
• Roll over has been requested.

12
NATIONAL DEPARTMENT OF HEALTH
13
DETAIL REASONS FOR OVER/UNDER SPENDING
(un-audited)

• Health Professions Training Development
• Five provinces spent their full allocations.
• The provinces which under spent their allocations
  have requested the roll over from their
  provincial treasuries.
• Affected provinces are
• Eastern Cape, Limpopo , Mpumalanga and
• Northern Cape.
• The reasons for under expenditure are attributed
  to capacity (no dedicated/appointed staff).

14
NATIONAL DEPARTMENT OF HEALTH
15
DETAIL REASONS FOR OVER/UNDER SPENDING
(un-audited)

• Hospital Revitalization
• Eastern Cape (77.0)
• Delay in awarding tenders at St Elizabeth and
  Fronteir Hospitals
• Late receipt of equipment invoice delayed payment
  till April 2009
• Free State (83.2)
• Cash flow problem which affected payment of
  invoices.
• Commitments amounted to 99 of grant.

16
DETAIL REASONS FOR OVER/UNDER SPENDING
(un-audited)

• Hospital Revitalization (cont.)
• Mpumalanga (42.1)
• Lack of capacity to manage the grant. The
  province is currently busy with filing vacant
  posts
• Themba hospital delays in appointment of
  contractors
• Ermelo hospital contract terminated due to poor
  performance, resulting in delays of equipment
  procurement which was budgeted at R 17 m
• an amount of R153m was withheld by NDOH due to
• under expenditure.
• Northern Cape (73.2)
• Cash flow problems in processing payments
• Delays in starting of construction at Upington
  and Kimberley Mental Hospitals

17
DETAIL REASONS FOR OVER/UNDER SPENDING
(un-audited)

• Hospital Revitalization (cont.)
• Western Cape (58.1)
• George, Valkenburg and Vredenburg hospitals
  delays due to under funding in 06/07 and 07/08.
  Peer review process delayed Khayelitsha project
  resulting in tenders being awarded 2 months late
• At Paarl hospital, the decanting process was more
  complex than anticipated.
• Mitchells Plain hospital project over projected
  expenditure by R 14m.
• The Province has requested rollover for 09/10.
• An amount of R170m was withheld by NDOH due to
  under expenditure.

18
NATIONAL DEPARTMENT OF HEALTH
19
DETAIL REASONS FOR OVER/UNDER SPENDING (
un-audited)

• National Tertiary Services Grant
• Eastern Cape (82.3)
• Procurement of Oncology Equipment for the MTS.
  Awaiting delivery of the equipment.
• The grant will cover R83.5m. The balance to come
  from equitable share (total tender is for R 94 m)
• Mpumalanga (66.4)
• Delays in procurement of equipment.
• Specialists appointed too late in year.
• Errors in capturing payments , delays in passing
  journals
• Orthopaedic Surgeon sick for 2 months, delays in
  services in hospital and outreach programs

20
NATIONAL DEPARTMENT OF HEALTH
21
CONCLUSION

• The Department takes cognizance that under
  expenditure is not a desirable outcome, however,
  in some instances, controls had to be put in
  place to ensure compliance with legislation such
  as the PFMA and Supply Chain regulations, which
  unfortunately resulted in the under expenditure.
• The funds are however committed and will be spent
  as soon as approved, with the exception of the
  Revitalization grant for Western Cape, which
  might have to be deferred, due to the short time
  left for the current financial year, to spend the
  full roll over.

22
NATIONAL DEPARTMENT OF HEALTH

• The End