There have been renewed calls to place the Eastern Cape health department under administration after a damning report from the auditor-general on the department’s 2022/2023 finances.
The department once again earned a qualified audit, with the AG finding “material misstatements” in its financial statements due to “significant internal control deficiencies”.
This means the AG’s office believes the department has not accounted properly for its allocated budget, nor has it adequately reported on its stated goals.
The report for the 2022/2023 financial year, presented to the health portfolio committee this week, found the department had clocked up unauthorised expenditure of R194m, irregular expenditure of R6.5m and fruitful and wasteful expenditure of R42.5m over the year.
The accumulated unauthorised expenditure now stood at a whopping R2.7bn.
The AG’s report was scathing about the department’s inability to prove bang for its significant budgetary buck, saying 60% of its material indicators were unreliable.
This meant it could not show measurable progress towards meeting its core service delivery mandate of saving lives through its health services.
It also hindered oversight of the department’s activities.
In two essential service delivery programmes the AG’s office tested, it found the health department’s performance badly wanting.
It had achieved only 56% of its targets in district health services, while spending 100% of its budget.
This included achieving just 25% of its stated outcome of making 100% of clinics meet “ideal clinic status”.
This had directly affected its delivery of good healthcare provision, the AG found.
Similarly, in the provincial hospital services programme, the department met just 42% of its targets, while spending 102% of its budget.
In both the programmes it had failed dismally to reduce neonatal and maternal deaths in its facilities or to reduce severe acute malnutrition in children younger than five.
The report was also scathing about the department’s compliance framework, saying that too often it had awarded contracts based on wrong evaluation and adjudication criteria, procurement had not met minimum legal requirements, and construction contracts had been awarded to firms that did not qualify.
The AG said its significant unauthorised expenditure had followed its usual pattern of paying unbudgeted-for medical negligence claims, meaning it ran out of money to pay for goods and services.
This would then have to be paid out of the next year’s budget — meaning the department again ran short.
The AG said this cast significant doubt on the department’s long-term financial stability.
DA health spokesperson Jane Cowley said the provincial health department was in crisis and there was no political will to fix it.
She again called on health minister Joe Phaahla to place the department under administration until the minimum standards for health service delivery could be met.
Health department spokesperson Sizwe Kupelo dismissed the DA’s call for the department to be placed under administration, saying it was informed by “lazy thinking and denial of the external factors affecting the department”.
He said the “biggest elephant” standing in the way of the department achieving a clean audit was the medico-legal claims it faced.
This was being addressed by strengthening its legal capacity, and the SIU and provincial treasury assisting in bringing to book unscrupulous lawyers who might have benefited from fraudulent claims.
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