Department of Health 2019/20 Quarter 1 - 4 performance

Meeting report

Opening remarks

The Chairperson said the Minister was unable to attend as he was attending a Cabinet Lekgotla, and he was not aware if the Director-General would be able to attend for the same reason as the Minister.

There were apologies for Dr K Jacobs (ANC), Mr M Sokatsha (ANC) and Ms E Wilson (DA), a member of whose family had passed away. The Chairperson gave his condolences and asked those present to observe a minute of silence for Ms Wilson’s bereavement.

Dr Gail Andrews, Chief Operations Officer, Department of Health (DoH), said she had some connectivity challenges. She was accompanied by her colleagues and some Chief Directors (CDs) and Deputy Directors-General (DDGs) who were invited as well to gain experience in engaging with the Committee. She wanted all the DDGs to introduce themselves.

The Chairperson welcomed the invitation of the DDGs to the meeting, and asked for introductions.

Dr Andrews asked the DDGs to introduce themselves and their CDs.

Dr Anban Pillay, DDG: NHI, DoH, introduced himself and said that he did not have CDs with him.

Ms Aneliswa Cele, Acting DDG: Primary Health Care and Hospital Systems, DoH, was joined by Mr Christie Engelbrecht, CD: Infrastructure, DoH.

Ms Valerie Rennie, Head: Corporate Services, DoH; Mr Ian Van Der Merwe, CFO, DoH; Dr Aquina Thulare, Technical Specialist for Health Economics and NHI, DoH, introduced themselves as well.

Dr Andrews said she was with Ms Thulile Zondi, CD: Health Research and Monitoring and Evaluation, DoH; Mr Victor Khanyile CD: Human Resources (HR), and Ms Mihloti Mushwana, CD: Governance and Public Entities.

DoH Presentation

The Department presented on its quarter one to four performance.

Programme one: Administration

Dr Andrews said that the target for an unqualified audit opinion was achieved, and where targets were not met she would point out deviations. The target for improvement in audit outcomes was not met, as only two provincial departments improved. The target for the implementation of the Medical Legal Claim Management System was not achieved, and only implemented in three of the nine provinces. This was due to delays in capturing claims and data cleaning in some provinces.

Programme two: National Health Insurance

The target for the proclamation of the NHI Act was not achieved due to delayed parliamentary processes because of the Covid-19 pandemic. The process was on-going.

The target for the training of district health teams was achieved, but the focus was not on training district health teams to implement the NHI because the National Health Council (NHC) had decided that the focus had to be on building the capacity of the executive authorities, senior managers and some of the officials selected to accompany them. The focus was on study tours to Thailand and the United Kingdom, therefore there was targeted training but not of district teams as envisioned.

The elimination of stock-outs of essential medicine target had been successful. The Early Warning System target had been achieved and was implemented in partnership with users of the services. The targets for the implementation of e-dispensing and e-prescription systems were achieved, and the electronic medicine catalogue was implemented as planned.

The target to increase the number of patients enrolled in the Centralised Chronic Medication Dispensing and Distributing (CCMDD) programme was exceeded. Dr Andrews said that the programme as very popular with patients, which was positive.

The target for the creation and implementation of a system for an NHI beneficiary registry was not achieved, as there were major challenges with the procurement of hardware required for the implementation, with extensive delays in Mpumalanga where implementation was delayed by nine months.

The target for the number of individuals from the population registered on the NHI Patient Beneficiary Registry was achieved as a result of imported beneficiary information from the South African Social Security Agency (SASSA) database.

Programme three: Communicable and Non-Communicable Diseases

The target aimed at finding new tuberculosis (TB) cases, and the target had been achieved. However, the target for male circumcision was not met due to the contract termination of the President’s Emergency Plan for AIDS Relief (PEPFAR) partner, the University Research Company (UFC), which caused a decrease in numbers. The target for increasing screening of individuals was exceeded, which was commendable.

For the target to reduce the under five years old mortality rate, the end goal of having the survey report published was not achieved due to delays in field work and data collection. This resulted in only having a draft report presented to high level management. The Department was working on interventions.

The target for malaria elimination was achieved, and the focus remained on the three main provinces.

For the strategic objective to expand access to mental health services through the strategic purchasing of services from private healthcare providers, the target for the number of patients with mental health problems consulted by contracted psychiatrists or psychologists was not achieved. Dr Andrews said that this was due to the contract with the service provider being cancelled, so there was zero performance. The money set aside was used for improving mental health services in the Eastern Cape and KwaZulu-Natal (KZN) for both care treatment and rehab services. The target for 250 forensic mental health observations conducted was not achieved due to the termination of the contract with a service provider. The target for district mental health teams established was not achieved, as the provinces cited scarcity of financial resources a challenge.

The target for the number of clients traced by Community Health Workers (CHW) was not met, as the data reflected only Human Immunodeficiency Virus (HIV) and TB clients, but there was no data for patients with other diseases. As these lists were not generated, the CHW were not able to trace clients. Dr Andrews said that this area of work had to be strengthened, given the country’s non-communicable diseases burden.

Programme four: Primary Health Care

The target for reviewing the functions of the National Health Act to better define the functions of the District Health Management Office (DHMO) was not achieved, as it was very closely linked to the implementation of the NHI Bill. The National Health Amendment Bill could not be drafted to incorporate the functions of the DHMO because it was envisioned that it would be better if this was done with the amendment of the NHI Bill once it had been enacted.

The target for training primary health care (PHC) committees was not achieved due to it being the first year that training had started, and the Department had under-budgeted for the function.

Dr Andrews said that the Department did well in improving access to people with disabilities in facilities, but fell short of the target by 4% due to operational reasons, as some clinics were closed due to infrastructure challenges or Covid-19.

The target for the submission of the Traditional Health Practitioners Bill to Parliament was not achieved as there were challenges during the consultation processes which led to the Department seeking legal opinion, and the Bill being sent to the State Legal Adviser.The target for the review of environmental health legislation was not achieved as the process was delayed due to the team focusing on Covid-19 in quarter four.

Programme five: Hospital Systems

Dr Andrews said that there were a few challenges for this programme, one of which was that the Hospital Director position was vacant.

The target for the number of regional and tertiary hospitals assessed, using the Ideal Hospital Framework, was not achieved as some provincial DoHs did not have this indicator in their annual performance plans (APPs) which made it difficult for them to implement it during the year.

The target for clinics constructed or revitalised was not met, as 19 projects were not completed due to challenges with the service providers which led to delays, as well as delays in medical equipment procurement.

The target for 45 facilities maintained, repaired and/or refurbished was not achieved as six projects failed to reach the practical completion stage as projected due to the performance of contractors. Some of the projects were at 98%, but were affected by the lock-down. The target for hospital revitalisation was not achieved for a similar reason.

Programme six: Health System Governance and Human Resources

Dr Andrews said that the indicators for the programme would be a mix, as it covered a number of areas.

The target for the legal framework to establish the National Public Health Institutes of South Africa (NAPHISA) was not achieved. The NAPHISA Bill lapsed in 2019, so the target was not achieved but the Bill had been revived. The target for the publishing of the National Health Resources Health Strategy was not achieved due to the focus shifting to Covid-19.

The target for the number of facilities with revised organograms was not achieved or finalized, as all provincial departments were struggling to follow up the Department of Public Service and Administration (DPSA) process of determining structures.

Dr Andrews said that target to review the policy for community services was planned, as there were challenges in the absorption of community health service graduates. The Department had planned to review the policy, but struggled to finance the review. It was a hot and sensitive topic, as it was seen as a form of employment and was a statutory obligation, so a rigorous review would be required, but Covid-19 had caused funds to be diverted.

The target for all ten nursing colleges to commence with the 2020 academic year was not achieved, as there were challenges with the Council of Higher Education (CHE) accrediting some of the colleges.

The target for the Nursing Strategy 2020 -2025 being approved was not achieved, as efforts were refocused on planning for Covid-19.

Summary

Dr Andrews said that in summary she had outlined the targets not achieved. The report had been audited by the Auditor-General (AG), but was still being finalised. 32 out of 71 targets (45%) were achieved. Most of the challenges were with hospitals and programme six, which was heavily impacted by the labour impasse, as many who participated in strike were part of human resources (HR) and the on-going challenge of the Civitas Building. Plans to overcome areas of weakness had been outlined. A new lease agreement had been signed, and the new building would be ready in March 2020. The DoH could then return to full productivity and enhance its performance, with fewer challenges arising because of a lack of administrative support.

It had been a challenging financial quarter with a demoralised senior management due to a lack of support staff and Covid-19. She would not go through all strategies to overcome areas of underperformance as they had been outlined in the presentation.

2019/20 Financial Performance

Mr Ian van der Merwe, CFO, DoH, said that at the end of financial year, the Department had spent 99.18% of its R51.1 billion budget, which represented R422.2 million in under-spending. The reasons for deviations were outlined. They were caused by reasons such as vacant positions, the impact of Covid-19, under-spending, delayed implementation of projects and matters related to the Civitas Building.

Referring to direct grants, he said the total conditional grant (CG) expenditure as at 31 March was at 98.7%, or R45.7 billion, against the total adjusted budget of R46.3 billion, compared to 97.9%, or R40.8 billion, spent during the same period last year, which was a slight under-spending which was within the acceptable norm. However, major contributors to under-spending were the Health Facilities Revitalisation Grant (HFRG), which spent 96.9% of the budget due to delays in project implementation, and the NHI spending of 90.5% due to delays in the implementation of the business plans.  The Human Resource Capacitation Grant (HRCG) spent 101.2%, which was above the norm due to the Western Cape over-spending and awaiting finalisation of year end procedures.

The Department would receive the final audited numbers at the end of October, but not much deviation was expected.

Referring to indirect grants, Mr Van der Merwe said the total CG expenditure as at 31 March was at 89.5%, or R1.4 billion, against the total adjusted budget of R1.5 billion, which was below the acceptable norm. The major contributors to under-spending were:

• The personal services component – the model was not implemented during the year due to the lack of capacity for the reimbursement of the health practitioners;
• The non-personal services component (CCMDD) – delays in submission of invoices by service providers and Information systems; and
• Ideal Clinic – expiry of the contract for equipment. Although deviation was obtained later in quarter four, the supplier could not deliver within the financial year.

Mr Van der Merwe went through the figures for each of the grants.

He said that roll over requests had been put through to provincial and national treasuries. The Department had not received any roll over approvals from National Treasury, nor had it received any funds for unforeseen and unavoidable expenditure. At the adjustment stage, more information about roll-overs in the provinces would be provided.

Based on the information received about the current fiscal position, there was a possibility of cuts at the national level of about R3.5 to R8.7 billion over the medium term expenditure framework (MTEF) period, which represented 6% to12%. If the same cuts were realised on the provincial equitable share, the sector was looking at cuts of R107 billion over the next three financial years. The Department was engaging with Treasury on scenarios and what the impact of this would be. It would potentially take the Department back to the budget levels in 2015/16. He asked the Committee to support the Department as to how the cuts could be mitigated.

Discussion

Mr P van Staden (FF+) referred to the under-spending of R389.2 million for the adjusted budget appropriation of R51 billion for this financial year, and asked the Department to comment, as last year it had under-spent by R1 billion and in 2018/19, R86 million was under-spent at hospitals. Had these problems been resolved, and how had this been achieved?

He asked what posts were not filled during the year, the reason for this, for what period of time and the number of posts in question.

In Programme One, under expenditure on goods and services, it appeared that the Department was being billed for buildings not owned by it. What did this amount to?

He wanted to know why the Civitas Building was declared unsafe, and whether employees had been working from home during that period.

On the service provider for mental health contracts being cancelled, he cautioned the Department in light of the tragedy at Life Esidimeni, which had been due to cancelled contracts. The Department had to be careful that such a tragedy was not repeated, so attention had to be given to the matter. He requested more clarity on the contracts, and whether patients’ lives were in danger.

He asked why under-expenditure was mainly under goods and services for Programme Four.

What would the DoH do to solve the repeated challenges it had with medical equipment and delays in procurement? The matter should have received attention a long time ago.

On nursing colleges not being fully accredited, he said the problem had also been on the table of the Committee last year, as the regulations were not set out by Ministers of Health and Higher Education for nursing colleges to be accredited. A year later the matter was not resolved, as four nursing colleges were still outstanding and not fully accredited. At the meeting last year, the then Director General had assured the Committee the matter would be dealt with. The matter had to be addressed.

Ms S Gwarube (DA) said Dr Andrews had mentioned that 45% of the targets set were achieved. She had gone into great detail to determine if some of the failures to meet targets were linked directly to the Department’s Covid-19 response, but some were not. Some of the reasons were tardiness, such as the mental health issue with cancelled contracts, and the CHW programme that did not take off because the CHWs did not have the required lists. Some of the issues were not due to the pandemic and the Department redirecting resources in response to the pandemic, but were due to sheer tardiness. She failed to understand why this was the case. If it was merely a case of redirecting resources in response to the pandemic it would be understandable, but based on the reasons given some of the challenges were completely preventable, but were allowed to happen. She said 45% was a dismal result, even when considering the pandemic, as a lot of the issues were not linked to it. She asked for enlightenment on the matter.

She said budget cuts were unavoidable, and wanted to know where the cuts would be as the Department was on a shoestring budget already to fund programmes and the equitable shares. Which programmes would be cut? What were the efficiency mechanisms that would be in place in order to still deliver services, despite budget cuts? This had not been presented, and she was worried this meant that it was not being thought about and planned for.

Mr A Shaik Emam (NFP) asked why the National Department of Health (NDoH) was opposing the NHI scheme, where services were provided at a low cost. It would appear that there were objections, and he could not understand why.

He said the Department did a fantastic job in spending money, but when it came to the performance, the outcomes were dismal. What was the Department doing to correct this issue so that there was a balance between expenditure and performance, such as meeting targets?

A few years ago, under the previous Minister of Health, it was agreed that all healthcare workers in the country would be made permanent employees, with full benefits. It had been established that there were staff that had worked for up to 40 years and retired without benefits. What was the latest update in this regard? He was aware that the Eastern Cape was one of the first provinces to start the process, and asked for confirmation that it had started in KwaZulu-Natal as well.

What was the Department doing to recruit more general practitioners (GPs) for the NHI, and why was the Department not using the services of the clinical associates on whom it had spent millions of Rands in training?

He said the payment of invoices within 30 days was a serious problem. In some places there was overspending and in others there was under-spending, and he was not sure if the Department believed if it was good financial practice to “take from Peter to pay Paul.” He asked the Department to comment on this.

South Africa had been caught off guard by Covid-19, especially when it came to co-morbidities. It had been discussed widely that South Africa had to move to a preventative system. What was the Department doing to ensure a move away from a curative system to a preventative system? Healthy lifestyles had to be promoted.

What was the Department doing to turn around the blood alcohol testing situation, where the timeframe for it was an issue?

Treasury had said that the DoH must not employ any more staff. What was the impact of this?

The Department had explained that many contracts had been standing due to the poor performance of contractors. What had been the impact and cost of this?

How much money was spent in the health sector on importing goods rather than using locally produced goods? If it did not use locally produced goods, what was it doing to ensure that locally produced goods were used?

Dr P Dyanti (ANC) needed clarity on how 99.2% of the budget had been used but only 45% of targets were achieved. What was the difference, and why was there a discrepancy? She was concerned that there were more targets not achieved than achieved. She was worried about the mental health rehabilitation teams not being spread across the provinces. How much money had been diverted due to Covid-19? Was there an explanation for the situation at the forensic laboratories? She was aware that the Eastern Cape was sending specimens to KZN and Pretoria. Had anything been done to remedy the situation?

She was concerned that the provinces were not improving their audit outcomes. What remedial steps were being taken to assist the provinces?

Mr T Munyai (ANC) said the issue of training and accrediting of institutions was a matter that had appeared before the Committee before. The Covid-19 pandemic had disrupted operations and brought complications to the healthcare system. The report was welcomed, and he said it was better than last year’s report as it was informative without hiding details. Covid-19 had been the dominator in everything that had been done, and the DoH must not be micromanaged on its operations. However, the Committee had to carry out its executive role which was oversight and holding it accountable.

The Minister of Health was not responsible for cutting the budget, and therefore it was the Finance Minister who had to be addressed over concerns about budget cuts.

Referring to the NHI, he said the DoH had brought the Bill before the Committee, and he could not understand why it had to be argued that the DoH was opposing the NHI, which it had prepared itself. Mr Shaik Emam could perhaps provide evidence that the Department did not support the NHI, and if he did, then it could be discussed. The NHI had been highly contested, both politically and financially. If there was a wage bill reduction, the Minister of Health was not to blame, and it had to be directed towards Treasury. Perhaps the basis for it was the International Monetary Fund (IMF) loan conditions, in which case it was not determined by the Minister.

The Committee had to consider the approval of the report, because the health team worked very hard and had prepared and informed it well. The report was transparent, unlike the previous one, and what could not be implemented would be mainly due to Covid-19. The Committee should not act as if Covid-19 had not happened. The report had to be adopted despite some weak areas that had to be improved. There could be progress with the Department’s response to its weaknesses, as the country had moved to alert level one. He moved the adoption of the report, even though the Chairperson had not asked.

Ms A Gela (ANC) referred to the NHI, and asked why the key positions were not filled in quarter four, and what the plan to fill these posts was.

She said the country had dealt with the unexpected Covid-19 pandemic which had caused disruptions, and the good work the Department had done was appreciated as it was in the front line to save lives. The Department’s just had to address the matter of delays in payments and all the other issues so that this did not reflect badly on it. She seconded adopting the report as it was.

The Chairperson thanked the DoH for the report. Despite the under-performance, he commended and encouraged the DoH to continue its good work on malaria control. It was an important duty of South Africa as it was a Southern African Development Community (SADC) programme, and South Africa had to set an example.

He was the third member to record his unhappiness on mental health services in the Department. The history of Life Esidimeni meant that Members and the Department had to be alert when it came to mental health services. The Committee could support the Department in asking for more funding for health services, but the Department always under-budgeted for mental health and therefore had these challenges. Why was there under-performance on mental health services? There had to be improvement on the matter going forward.

The Department had done well on the CCMDD programme -- it was doing so well that patients had received medication during Covid-19 at the nearest available locations, such as supermarkets. This was never anticipated, and during the pandemic there had been nothing that had disadvantaged chronic medication patients to a great extent. This had to be commended.

The programme for the control of non-communicable diseases (NCDs) was not strong, despite it being in the APP. He required an answer from the CFO on the matter, even if it was not today. He said that there were South Africans on treatment for hypertension at the quite young age of 45, which was much earlier than the rest of the world. The costs for treatment of NCDs such as hypertension and diabetes from the age of 45 were high. Why was this not seen as a potential area to prevent these diseases and save money, and use it elsewhere like other countries were doing?

The programmes on NCD prevention were not strong, and 10% of people were suffering from hypertension due to their genetic make-up, and the remainder was because people were not able to exercise and have a good diet. People requiring less treatment for NCDs could save funds that could be utilised elsewhere in the healthcare system. There had to be plans to do this, as it was in the annual performance plan but was not seen on the ground. There had to be a decrease in the number of persons placed on treatment for hypertension and diabetes.

DoH’s response

Dr Andrews said that she wanted to highlight a few points as there were themes that were recurrent, especially those related to money spent and the targeted achievements.

There was a labour impasse which Ms Rennie would comment on when she spoke about Civitas. More than 200 people who were part of the labour impasse, but still earned salaries despite not being productive and helping the Department to reach its targets. This remained an ongoing dispute, and the matter had not been finalised yet.

On the nursing college matter, she said that all 10 colleges were designated by the Minister of Higher Education, but four colleges had been delayed due to competency issues in finalising their new curricula. The colleges had submitted in time to the SA Nursing Council (SANC) and the Council for Higher Education (CHE), but the CHE had delayed approving the curriculum. The colleges were designated to deliver the new programmes, however. Dr Nonhlanhla Makhanya, Chief Nursing Officer, DoH, could expand on the matter. She was in an acting position for programme three, and the questions about NCDs could be addressed by her.

On mental health and rehabilitation teams, she said perhaps Ms Dyanti had misunderstood, as the targets for rehabilitation teams had been met.

The Chairperson asked for clarity on the SANC.

Dr Andrews responded that the SANC was the regulator for all nursing curricula, to ensure alignment with competency frameworks of the professional statutory council. However, because of the new Higher Education Act, the criteria set by the CHE, which was another regulator, still had to be met. This had caused the delay in the programmes being offered at the four colleges, but all colleges were designated.

Dr Makhanya and her team would comment on the issues related to mental health, NCDs, strengthening prevention of NCDs, the CHW programme and why there was underperformance in screening. Dr Pillay would respond to questions related to the NHI. Ms Rennie would respond to matters related to the Department of Public Works (DPW) and Civitas, and the CFO could respond to finance-related questions.

Dr Pillay responded on the question about the low cost benefit option asked by Mr Shaik Emam, and said that in its current form it was not a medical scheme in the true sense, and that it was regulated by the Council for Medical Schemes (CMS). It was not a product that was managed by the national department, but it fell under the classification of a medical scheme and therefore was regulated by the CMS. The CMS had been engaging with low cost benefit option products that had been managed. A low cost benefit option was effectively selling a product that was like an insurance policy, but it needed to provide appropriate protection so that people did not find out at the end of the day it did not provide the cover needed. There were products that would provide cover for the diagnosis of HIV but would not pay for its treatment, and the state would have to pay.  He said that Dr Thulare was more familiar on these matters as she sat on the CMS, and he asked that she respond as well.

On contracting related to mental health and oncology, he said the Department wanted to contract health professionals so that it could develop the NHI contracting work and at the same time solve some of the problems that the public health system faced. At the time when the Department was designing this, there had been challenges regarding mental health and there were backlogs in the assessments of people. In the case of oncology, there were similar challenges. The idea was to create a contracting mechanism where private practitioners would be brought in to deliver services within public facilities and learn how the NHI would work. This was the thinking behind the approach.

The intention for the initial contracts was that there would be a consortium of people to deliver the service, and it ended up that universities had been proposed as an option. There was a closed tender process for universities interested in providing services. Universities would effectively contract health professionals, and these health professionals would deliver services in public facilities and the universities would reimburse the health professionals.

The plans in the APP from when the Department had started the process had been designed at the beginning of the financial year, but the funding for this came through much later and the procurement process effectively started after the APP. The consequence of this was that there were a number of delays in bidders responding and then asking for extensions. At the end of the process there was a winning bidder, but the problem with this -- in addition to it being universities – was that there were objections raised by the Minister at the time that this was labour broking, because the Department was not contracting these health professionals directly but doing so via universities. This was seen as a problem. Secondly, the provincial colleagues were of the view that money should not go to health professionals via this consortium -- they would rather have the funds transferred to them and manage it themselves.

Given all these tensions and debates, the project did not take off and consequently this was already in the Department’s APP with the intention of these funds being used for contracting as described.  All the problems prevented this from happening, because in order for the DoH to contract and deliver a service there had to be provincial concurrency, and the provincial colleagues would prefer to receive the funds directly and manage it themselves. These were the reasons for the contracting issues. The idea was to understand how contracting could be used for the NHI and how contracting could be used to deal with a backlogs in the public sector, which in this case was oncology and mental health.

Dr Thulare said the target market for the low cost benefit option was low income earners and people from poor households. It was a product that promised unfeasible options, such as unlimited GP consultations, but it was usually capped at three to four consultations per year. As Dr Pillay had indicated, it did not cover critical interventions such as treatments, but only diagnostic testing. The options did not provide for admission into facilities, and used the state as a provider without negotiating with the state to be a designated service provider.

The low cost benefit options also had high broker fees, and it undermined the situation, as administration costs amounted to most of the costs. The low cost benefit options failed to provide financial risk protection to those who had been sold these options. The CMS had allowed a consultative process, to provide fairness, to be held and it hoped that those who protested had participated in the discussions. From the CMS vantage point, the option was selling “pies in the sky” for low income and poor households.

On contracting, she said the model designed for capitation was not an implementable model, as it was not a performance-based reimbursement, where what the practitioner had done was considered and then reimbursement was based on outcomes related to those interventions. The principle of the NHI was health outcomes, and not just numbers of patients seen. There had to be a situation where the model took this into account and the performance of providers and health outcomes were considered.

Dr Andrews said that he question from Ms Gela on the vacant positions had not been answered.

Dr Pillay said that the NHI posts could be filled only with the concurrency of the Department of Public Service and Administration (DPSA), and the Bill being finalised by the Committee. The Department wanted to make sure that the posts filled were in alignment with the overall structure, and this was why it had to wait so that it knew how to structure resources.

Dr Makhanya said she would respond on issues related to mental health issues and NCDs. The first area had been addressed by Dr Pillay, as it was issues related to contracting service providers that affected mental health and oncology.

The pandemic had highlighted the gaps in integrated services. On why the Department was not moving from curative to preventative practices for all NCDs, she said the DoH was cognisant of the NCDs and the impact of Covid-19 across programmes. It had worked on developing plans on modification in the context of Covid, and these plans had been confirmed internally specifically on NCDs, where areas that had to be strengthened had been identified and plans had been developed particularly on public communication. Information messages had to be integrated across Covid-19 and communicable and non-communicable diseases, because this information was required by communities. Interventions had been determined for gap areas.

As the Chairperson had indicated, there was a need for early detection and it was considering strengthening its own surveillance system to detect NCDs such as hypertension and diabetes, which did not become symptomatic at an early age. It would prioritise screening for NCDs and ensure that it was integrated into the broader screening that took place at a community level. Each of the interventions was aimed at strengthening community interventions to ensure that services were integrated, particularly at the preventative level, and promoted focusing on screening and contact tracing across all programmes. The commendation on the malaria programme was welcomed.

She said Dr Andrews had covered the key areas on nursing colleges, and it was being celebrated that all government colleges had been established in all the provinces and for the military health services as legitimate providers of nursing qualifications that were in the post-school system.  The reason why the four colleges had not started the programmes this year was because they had not submitted before the cutoff date set by the CHE. The submissions had been made in November and were almost completed. She assured Members that plans were in place in terms of the old curriculum outputs of 500 of students per programme per province for the next four years, while ensuring the phasing in and out of the old and new qualifications.  

Ms Rennie said she would respond to why vacancies were unfilled and the Civitas matter. Dr Pillay had responded to questions on vacant posts, especially the NHI posts. There were earmarked funds during the year under review of about R21 million that had been set aside for filing critical NHI posts which had not been filled as Dr Pillay had said. This was dependent on the conclusion of the Bill, but the Department was in the process of restructuring.

The overall reason why the Department had not filled vacancies was because it had been restructuring over a period of two years. Based on the annual report of 2018/19, there was a vacancy rate of 13.3%, and this was the financial year in which restructuring began to align the current structure with the NHI Bill. The restructuring had been incomplete, which affected the vacancy rates for 2018/19 and 2019/20.

The reason for vacancies over and above restructuring in 2019/20 was that the funded posts that could have been filled during the year were affected by the continuous withdrawal of services of critical staff in HR, which was supposed to process recruitment. Recruitment processes were not finalised, or did not go beyond certain stages for posts, due to the Department’s staffing issues. This was in addition to about 57 posts being vacated through terminations and retirement.  Owing to budget cuts, repriortisation had to be done in the financial year, and the initial plan to fill posts at the beginning of the year in April had to be changed due to the factors mentioned.

As mentioned, there had been 57 terminations that could not be replaced. There were 25 senior management service (SMS) posts that had been planned to be filled in the year under review, which was about 18% of the Department’s vacancy rate, but could not filled. Some posts had already been advertised, but had to be placed on hold. The most affected area was HR, which had huge vacancies in the cluster and in environmental health. The Department was not worried about administration posts, as it was in a restructuring mode and shortfalls in these posts would be realised in the new building, as it might present different needs. The finance area was also affected, as posts could not be filled and there were other technical and medical posts that could not be filled. The DoH was now at the stage of finalising restructuring and would be engaging with the DPSA, and the structure would be finalised by the end of the calendar year.

She hoped the CFO could assist on question on the buildings it was paying for but not occupying.  On the Civitas Building, she said that the journey between the Department and the DPW had been too long, until it had given up on the DPW assisting it with the building. The maintenance programme was not coming to any conclusion, and dates for completion kept being postponed were not happening. It therefore had decided to move to another building and hopefully it could have its own building in the next seven to ten years if the economy allowed. For now, it was going to lease from the DPW, and a building for it had been identified. The Department was in the process of planning for the relocation, and the official date to occupy the building was 1 March 2021. However, the landlord needed a period of three months for tenant’s installation, and this was when the building would be ready for occupation. The Department would have a phased approach of moving into the building and hoped to move in before 1 March. It had been in this impasse for more than two years, hence its unfortunate under-performance.

The Civitas Building had not been declared unsafe in writing per se, but there had been flooding from the water reservoir on the roof on 7 September and the flooding had affected all the lifts and all the staff had been vacated. Since then the building had been not accessible, but contractors were in the building working. Everything had been completed by the end of September, and the lifts were declared safe.

Currently the DPW was failing dismally to assist with maintenance of the historic challenges of heating, ventilation and air conditioning (HVAC), and this was why accessibility challenges remained. The Department hoped the nightmare would end when it moved to the new building in 2021.

Mr Van der Merwe responded on under-expenditure, and said that the Department had continuously improved its expenditure rate over the years. He would not say that all the Department’s problems had been solved, but it did have a very rigorous reprioritisation process which it did on a quarterly basis. It had been able to reprioritise funding and had quite a strong CFO Forum, where expenditure on conditional grants was evaluated and if there was a need to reprioritise within conditional grants, it was able to do it. He could not say all the problems were resolved, but it was constantly reviewing its expenditure rates.

On Programme One under-expenditure, there was a significant challenge with the DPW and at the end of the financial year, the Department had not paid the quarter four lease due to the issues with the building. There was a dispute where the DPW did not pay its own implementing agents through the Development Bank of South Africa (DBSA), and there was a notion that the DoH had to pay, but it could not as there was no contractual agreement for it to pay. This was the reason for under-expenditure on goods and services in Programme One.

On leases the Department was paying, he said that currently all the leases applicable to the NDOH had been cleaned up, but it had picked up some leases it was paying for the National Health Laboratory Services (NHLS) in the previous financial year, which had been corrected.

Due to the DPW not having a proper immovable assets register, the DPW had negotiated with Treasury that departments pay a negotiated amount, but the DoH had refuted the amount as it would result in irregular expenditure by the Department on buildings that were not its. He was comfortable that the list of leases had been cleaned up and what was being paid for belonged to the NDOH.

On medical equipment, he said that this had always been an issue, even when dealing with non-negotiables and items of expenditure. Unfortunately, the Department had to wait for projects to be completed before the finalisation of equipment purchases to avoid buying equipment that could not be commissioned. He agreed that it was a challenge that had to be addressed.

On budget cuts, he said that there was a strong team consisting of a number of CFOs, members from National Treasury and available economists from the provinces. It had put up a national discussion paper on these cuts to the National Treasury.

From a CFO perspective -- and not a policy decision at the moment -- the cuts would come from direct conditional grants. This would mean grants like the HIV grant and indirect conditional grants had to be reconfigured. Some mechanisms had been put in place to control the potential over-expenditure for infrastructure. It had taken the Department a while to gain momentum on the infrastructure grant, but the current position meant that a way of curbing the expenditure had to be found, as well as reviewing its business plans.

The compensation of employees would also be cut. Treasury had for the last two financial years raised the issue of compensation ceilings and stated exactly what the ceiling was, and the Department had to fit into it. On a national basis, this meant that R54 million would be lost on compensation, and in the outer year R68 million would be lost.

There would also be cuts to entities. The Department had entities that received grants from it, such as the Research Council, the CMS and the NHLS. Non-governmental organisations (NGOs) and non-profit organisations (NPOs) were fairly protected at the moment, but would also be affected and their business plans would have to be reviewed.

In general, when the impact of the cuts was analysed, it meant closing of clinics and might mean a reduction of staffing. The entire service platform would have to be renewed given the scenario, but it was still negotiating this with Treasury, and there was still considerable engagement ahead as nothing had been set in stone. When the projection was done, it could potentially be a cut of R107 billion over MTEF period, but it would be determined when the Minister of Finance gave the allocations.

On payment within 30 days, he said it was an issue, but it was not too bad considering the Civitas issues it had. There had been a spike in the number of invoices that were not paid, but it was being tracked on a monthly basis. He did not have the impact at the provincial level on hand, but he could get it.

On the issue of over-spending and under-spending in certain areas, he said that the Human Resources Capacitation Grant (HRCG) was the only overspent grant, and the Western Cape had overspent. Unfortunately, according to the Public Finance Management Act (PFMA) and the Division of Revenue Act (DoRA), expenditure could be shown against the grant only up to the budgeted amount, and anything above the budgeted amount would have to be made good from the provincial equitable shares. The Department made sure that there was no unauthorised expenditure within its vote. He would do some work to determine the amount spent on imported goods versus local goods, as he did not have the information on hand. 

On the difference between the 45% target achievement and 99% expenditure, he said that most of the Department’s expenditure involved the transfer of conditional grants and NGOs, and this was why the expenditure was higher in relation to the performance indicators. It would also be better to consider voted funds against performance percentages.

On funds redirected towards Covid-19, he said that R604 million had been redirected within the HIV grant to a Covid-19 component. It had agreed with Treasury that the Covid-19 component would remain within the bigger HIV grant, but would be earmarked for Covid-19. Close to R400 million had also been reprioritised from the infrastructure grant but had again stayed within the grant, and was earmarked for Covid-19. From voted funds, roughly a R100 million had been reprioritised. The R1 billion was not new funds, but reprioritisations. The new funds it received had been directed towards personal protective equipment (PPE), testing services and the Cuban Brigade. The new funds were included as part of the Covid-19 Fund under the HIV grant. This had been pushed for so that there was some flexibility within the grant if there was a need.

On NCDs prevention, he would do research on the matter and would have a discussion with the Chairperson to get the brief, as he believed it was something that could be worked on. A strong team had been developed with its provincial counterparts, in-house economists and programme managers who could consider the matter.

Chairperson’s closing remarks

The Chairperson said the presentation had been fruitful. Ms Gela and Mr Munyai had suggested that the report be accepted as part of the programme despite the challenges, but it would be looked into when the Committee considered the budget review process which was approaching in the next few weeks.

The Committee was grateful to the Department for being honest and candid. There were certain areas of under-performance where the Department was not held back by Covid-19, but by matters in its own processes. The Committee was aware why some targets were not met, but were unhappy that some targets which were easy to achieve had not been achieved, as Ms Gwarube had indicated. Overall the Department was doing well, and had to continue pulling up its socks in challenging areas. Where needed, the Committee could be asked for assistance.

There would not be a second round of questions, but Members could send parliamentary questions or ask them again at the next meeting with the Department.

The meeting was adjourned.