NATIONAL ASSEMBLY
FOR WRITTEN REPLY
QUESTION NO. 2175
DATE OF PUBLICATION IN INTERNAL QUESTION PAPER: 06 NOVEMBER 2009
(INTERNAL QUESTION PAPER NO. 27)
Mr M Waters (DA) to ask the Minister of Health:
(1) Whether, at the end of the 2008-09 financial year, any provincial
departments had been owing service providers money for a period longer
than 30 days for (a) blood, (b) food, (c) rates, (d) water, (e)
electricity and (f) other specified services; if so, (i) what was the
amount in each case, (ii) for what services was the amounts owed,
(iii) what were the reasons for nonpayment in each case and (iv) when
were the outstanding amounts paid;
(2) whether any findings were made on provinces that transgressed the
Public Finance Management Act, Act 1 of 1999; if so, (a) on which
provinces, (b) what provisions were transgressed and (c) what steps
have been implemented to prevent the situation from recurring?
NW2879E
REPLY:
The following information has been obtained from out Provincial Departments
of Health:
EASTERN CAPE
(1) At the end of the 2008-2009 financial year, the Eastern Cape
Department of Health owed service providers for a period longer than
30 days as detailed below:
| | | | | | | |
|INSTITUTION |MUNICIPALITY|NHLS |SANBS |FOOD |OTHER |TOTAL |
| | | | | | |R 000 |
|Head Office |R971 |R11 462| | |R165 310|R177 743|
|EL Hospital Complex |R8 225 | |R329 |R670 |R2 635 |R11 859 |
|OR Tambo District |R17 |R13 517|R1 187|R1 170|R12 721 |R28 612 |
|UKhahlamba District |R1 078 |R2 091 |R178 |R690 |R18 000 |R22 037 |
|Amathole District |R2 054 |R5 696 |R1 612|R2 250|R34 000 |R45 612 |
|Cacadu District |R482 |R1 405 |R183 |R804 |R12 000 |R14 874 |
|Chris Hani District |R431 |R3 450 |R512 |R425 |R20 000 |R24 818 |
|Emergency Medical |R19 | | | |R1 590 |R1 609 |
|PE Provincial |R505 |R2 286 | |R459 |R4 000 |R7 250 |
|Hospital | | | | | | |
|Livingstone Hospital | |R7 686 |R1 439|R569 |R8 000 |R17 694 |
|Dora Nginza Hospital |R618 |R6 667 |R1 336|R340 |R3 000 |R11 961 |
|Uitenhage Hospital |R330 |R1 800 |R490 |R300 |R1 633 |R4 553 |
|Nelson Mandela Metro |R65 |R736 | | |R679 |R1 480 |
|PE Pharmaceutical | | | | |R4 587 |R4 587 |
|Alfred Nzo District |R694 |R234 |R424 |R330 |R2 670 |R4 352 |
|Mthatha Hospital | |R2 200 |R3 572|R530 |R3 353 |R9 655 |
|Complex | | | | | | |
| | | | | | |R388 696|
(2) Yes
a) The Eastern Cape
b) Non-compliance with procurement procedures.
c) The steps taken range from formal warnings given to those
implicated, recovery of monies lost from persons implicated, and
suspension without pay.
FREE STATE
FSPC
(1) Payments Outstanding on 27 March 2009
|DESCRIPTION | AMOUNT (Râ) |
|Food supply patients and night staff | R 950,000.00 |
|Coal | R 50,000.00 |
|Medical waste removal | R 31,238.82 |
|Garden Services February | R 36,990.00 |
|Pest Control February | R 16,625.00 |
|Lab tests January and February | R 45,000.00 |
|Photocopy charges | R 10,000.00 |
|Hire of photocopy machines | R 10,695.00 |
|Hire of photocopy machines | R 1,400.00 |
|Hire of photocopy machines | R 1,100.00 |
|Hire of photocopy machines | R 1,000.00 |
|Accommodation | R 70,000.00 |
|Â | R 1,224,048.82 |
|Possible Rejected/Bounced Payments | R 4,376,128.90 |
|Payments in progress | R |
| |- |
|Goods received not yet sent for payment | R 458,869.04 |
|TOTAL | R 6,059,046.76 |
Reasons for late payment.
⢠The first group of items were outstanding because as they were
viewed as contract items. However arrangements were made with
some companies because of the cash flow to continue rendering
services with an arrangement of late payment from the
Department.
⢠According to Supply Chain Management, payment orders were
generated but because of the department not having funds the
payments were held back, these were processed soon afterwards.
BONGANI
|Services |Amount |
|Blood Services |1,150,721,27 |
|Food Services | 252,250,01 |
|Other â Laboratory |1,398,565,56 |
|Other â Medical Waste Removal | 76,340,79 |
|Other â Cleaning Service | 686,050,45 |
|Other â Oxygen | 66,950,42 |
|Other |1,435,222,13 |
|Total |5,066,100,63 |
Reasons for non payments:
Payments not effected within 30 days â due to shortage of funds.
Outstanding invoices were paid within the first three (3) months of
the new financial year.
PELONOMI
| | |AMOUNT |
|Implants | |2,406,421.23 |
|NHLS | |9,296,898.52 |
|NHLS advance payment Sundry Payment | |11,365,526.82 |
|09/10 | | |
|Patient Food | |3,193,193.06 |
|Netcare 911 | |97,448.86 |
|Meditech Jul-Dec | |702,580.86 |
|Meditech Jan-Mar | |351,290.43 |
|Orion Feb 2009 | |3,759.95 |
|AST Oct-Dec 2007 | |74 086.47 |
|AST Jan-Mar | |86 221.60 |
|Siemens | |277,200.00 |
|Philips | |256,542.00 |
|Agfa Healthcare | |20,520.00 |
|TOTAL | |27,971,381.73 |
(iii) Reasons for non payments:
Goods and Services budget allocated to institution was not
sufficient to ensure in time payment of suppliers.
There were also invoices not paid that was received from
suppliers and after investigation into the none payment, paid
late. Proper SCM procedures were not followed. A circular was
send out and individual discussions was done to officials that
delayed the payment process to prevent this from happening
again.
iv) All outstanding invoices were paid within the first three (3)
months of the financial year, without suspending normal
activities or core functions of the Department.
BOITUMELO
At the end of the 2008/ 9 financial year service providers for blood,
food, rates and other specified services were owed money for longer
than 30 days. It should be noted that the Department of Health pays
rates, water and electricity through the Department of Public Works.
The amounts are as follows:
|DESCRIPTION |AMOUNT |
|Medical Equipment |1,409.494.82 |
|Uniforms |53,467.87 |
|Equipment Repairs |390,629.60 |
|Other repairs |243,357,13 |
|NHLS |448,694.80 |
|Medical Consumables |449,523.70 |
|Provisions |154,238.60 |
|Stationary |2,425.80 |
|Security |71,006.69 |
|TOTAL |3,222,839.01 |
GAUTENG
(1) Attached kindly find summary of accruals as disclosed in the
financial statement for the 2008-2009 financial yea as at the 31 March
2009 for your information
(2) None
LIMPOPO
(1) The table below reflects the situation in this regard.
ACCRUALS FOR 2008 & 2009 FINANCIAL YEAR
CONSOLIDATED REPORT ON ACCRUALS: 2008 & 2009
| | | | | |
|Â |GOODS AND SERVICES |
|Rates,Water And Electricity |4,294,978.99 |
|Eskom Electricity |162,753.17 |
|Blood Services |620,890.60 |
|Food Surplus |5,508,825.47 |
|Other - Laboratory |10,042,247.37 |
|Other- Medical Waste Removal |391,763.89 |
|Other- Medicines And Drugs |15,416,015.68 |
|Other- 0xygen |5,320,425.21 |
|Other -Interdepartmental |792,420.36 |
|Other |87,527,965.14 |
|TOTAL |130,078,285.88 |
(iii) Reasons for non payments:
⢠The Department experienced a shortfall in its monthly
cashflow, especially the last month of the financial year.
⢠Provincial Treasury had mistakenly included departmental
surrenders (R90, 952, 000), as part of cash outflow of the
Department. Cashflow was, accordingly, reduced by that
amount.
⢠Had this not happened, the Department could have paid 70%
of the total outstanding invoices before 31 March 2009.
v) All outstanding invoices were paid within the first three (3)
months of the financial year, without suspending normal
activities or core functions of the Department.
(2) The table below reflects the situation in this regard
|Transgression of the PFMA |Steps implemented to prevent future |
| |occurrence |
|Irregular expenditure: |Financial delegations have been compiled, |
|Contravening of delegation |and will be concluded by no later than |
|of authority. |December 31st, 2009; |
| |These are issued per level of authority, |
| |to all programme and cost centre managers.|
|Irregular expenditure: |Control measures have been implemented to |
|Contravening of supply chain|ensure that irregular expenditure is |
|management process. |identified, and reported as such, to the |
| |accounting officer. |
|Unauthorised expenditure: |The provisions of the Public Finance |
|Payments made not in line |Management Act and Treasury Regulation |
|with the Division of Revenue|will be applied, in order to facilitate |
|Act (DoRa). |the process of holding managers |
| |accountable for their activities; |
| |All payments to laboratory services are |
| |been pre-audited, in order to ensure that |
| |they are in line with the DoRA. |
| |Delays may be inevitable, due to the |
| |volumes involved, as all payments must be |
| |verified per cost centre first, prior to |
| |the release of the funds; |
| |Processes of expediting the payment |
| |process, especially w.r.t. to NHLS, are |
| |being discussed with the relevant service |
| |providers. |
|Unauthorised expenditure: |The Department will ensure that |
|understating of expenditure |unauthorized expenditure is disclosed as |
| |such, in the appropriation statements; |
| |We are currently in liaison with |
| |Provincial Treasury, in order to ensure |
| |compliance with the disclosure |
| |requirements of all unauthorised |
| |expenditure; |
| |The Department is also using the guide |
| |template, for the annual financial |
| |statements, in order to ensure familiarity|
| |with all the disclosure requirements, |
| |including the disclosure of unauthorised |
| |expenditure; |
| |Pre-approval of expenditure control |
| |measures have been put in place, in order |
| |to ensure that all expenditure is in line |
| |with the provision of the Division of |
| |Revenue Act, in this way, severely |
| |limiting the potential for the incurrence |
| |of irregular expenditure. |
NORTH WEST
(1) The former North West Department of Health (now called Health &
Social Development) ended the 2008/09 financial year with accruals of
R186,526m in addition to over spending on its budget by R56,994m.
⢠Of the total accruals, R185.722m related to goods and services,
the remaining R0.804m related to employeesâ benefits that could
not be paid due to lack of budget;
⢠R84.833m was under 30 days (45.7%) and R100.889 (54.3%) was over
30 days;
⢠R18.929 was owed on capital projects of which R17.879m (94.5%)
was within 30 days;
⢠The National Health Laboratory Services (NHLS) was owed R45.411m
of which R25.869m (56.9%) was over 30 days;
⢠The South African National Blood Service (SANBS) was owed
R9.556m of which R3.594m (37.6%) was over 30 days.
The main reason for the accruals was lack of budget. The Department
ran out of budget in the last quarter of the 2008/09 financial year.
This budget deficit equates to about 2% of the equitable share
allocation. All provincial health departments should receive 26% of
the provincial allocation. To date the North West Health department
only receives about 24%. This finding was confirmed by the Ministerial
investigation by the Integrated Support Team (IST) in their report of
May 2009 which stated âThe provincial Treasury should allocate an
amount to the NWDOH, which is in line with the equitable share
indicated by the National Treasury in the national budgetâ. If the
correct allocation was given to the department there would not have
been any accruals.
(2) The North West Department of Health transgressed in the following
areas:
⢠Payments not effected within 30 days (owing to lack of budget)
⢠Tariff/fee structure and interest exemption granted by the
Provincial Treasury were not disclosed in the annual report (the
tariff fee structure is a long document that would not fit
neatly in the annual report. Reference to this was made in the
Accounting Officerâs report)
⢠Payments in excess of R2000.00 were effected by manual cheque
and not electronically without Provincial Treasury approval
(these payments were made to micro businesses which did not have
bank accounts to avoid delays and unnecessary hardships)
(c) Disciplinary measures were taken with those officials who did
not pay within the 30 days. This followed standard disciplinary
progressive and corrective process of ensuring that the
officials had the necessary skills and resources, thereafter,
initiating disciplinary procedures.
WESTERN CAPE
(1) The following table reflects the situation in this regard
| |Goods |Blood |Good and |Municipal |Total |
| |and | |Services |Other | |
| |Services| |provision | | |
|Amount |R4,322,6|R472,301.|R3,296,438.73 |R68,157,656.|R76,249,000.0|
| |03 |70 | |57 |0 |
(ii) Payments are made within 30 days after resolution of any reason
why the account could not be paid within 30 days of the invoice
date.
(ii) Reasons for non-payment included:
- Some invoices were partial payments.
- There we disputes on the delivered goods e.g. quality as
per the tender and other matters.
- The amounts do not correspond with what was delivered e.g.
calculation per box instead per item. Some suppliers
submitted their invoices late.
- Many legitimate reasons exist why invoices are not paid
within 30 days upon receipt as per NTR 8.2.3. e.g errors on
invoices.
(2) (a) None for the Health Provincial Government Western Cape
(b) None
(c) Not applicable
END.