Durban – The KwaZulu-Natal Department of Health continues to be a problem child for the provincial and national governments after its precarious financial spending habits were laid bare in an internal report.
It has since emerged that the department, which is politically headed by MEC Nomagugu Simelane, the ANC’s provincial deputy chairperson, is also buckling under the pressure of medical claims brought against staff for medical negligence.
The claims currently amount to R29 billion.
In an internal document seen by IOL titled “Financial Performance Report as at 31 October 2022” and which was presented to senior officials during a meeting last Friday, it was said that the department was spending above the stipulated treasury norms.
NEWS: A report shows that the KZN Department of Health is overspending its allocated budget & is also buckling under the pressure of medical claims (R29 billion) for medical negligence. To cut costs, it appears to be mothballing projects and not paying service providers. @IOL
To cut costs, the department appears to be mothballing some critical projects and not paying for some services rendered.
“This economic classification is under pressure due to budget cuts.
“The estimated shortfall to sustain the current level of services and inflationary adjustment is R1.303bn.
“Please note that no provision was made for the payment of laboratory services, medicine, medical supplies, and property payments in the last three months of the financial year.
“This was to reduce the projected overspending as per PT instruction to remain within the allocated budget.
“With regard to transfers and subsidies: Households is expected to be over-spent by R251.241 million by year-end.
“Higher than budgeted medico-legal claims is the primary cause of this.
“This over-spend is mitigated by savings under the Cuban doctor training programme, resulting from the reduction of number of students training in this programme.
“Buildings and other fixed structures is at 38.8%, far below target and projects a saving of R416.657m.
“Savings are as a result of non performing capital projects such as Northdale re-water proofing (terminated); Nkonjeni Neonatal Wards (terminated).
“There are also delays in the procurement of flood damage recovery projects due to pre-audit results.”
The report, whose author is not specified, is very candid that the department is facing crippling financial challenges.
“The department is faced with budget pressures amounting to R1.689bn (IYM) as at 31 October 2022, overall expenditure is at 59.8% of the Main Appropriation, which is 1.5% over the guideline due to the following:
“Compensation of employees: due to the unbudgeted non-pensionable allowance and the underfunded current warm bodies, including statutory obligation posts, 1.5% pay progression will put added pressure on equitable share allocation, and insufficient budget to absorb contracted Covid-19 staff,” reads the overview of the report.
According to the report, for administration purposes, the department has overspent by millions.
“Administration is at 61.8%, significantly higher than the norm and projected to over-spend by R68.269m. The over-spending is mainly attributed to:
“The central payment of all legal services costs incurred under this programme, while the budget is still decentralised to all programmes. This will be addressed during the adjustment estimates period.
“Communication-related expenditure is under pressure due to the need to issue more data cards and cellphone contracts in order to support the remote work environment as a result of the Covid-19 pandemic, with most meetings still being held virtually.
“Claims against the state are under-budgeted, the projected overspend is related to a claim against the state on gloves procured out of contract in 2020/21.”
The biggest overspender in the department is the district health services and, according to the report, that is because of an increase in fuel and workers’ compensation.
“District Health Services spending is at 59.3% of the budget and projects an over-spend of R1,103bn due to the following pressures:
“Budget cuts which affect funding of current warm bodies and unfunded carry-through cost of the non-pensionable allowance for levels 1 to 12.
“Increase in fleet services due to higher-than-expected fuel price increases.
“Inventory: Chemical, fuel, oil gas, wood and coal are also higher than expected due to fuel price increases, added cost of diesel for generators.”
Despite overspending the National Tertiary Services Grant, the report shows that the department failed to procure an MRI scan timeously for King Edward VIII Hospital in Durban.
“National Tertiary Services Grant: This grant is at 62.88% spent, which is 5% above the guideline.
“This is mainly as a result of accruals for goods and services items like medicine and medicine supplies due to challenges faced with BAS at the end of 2021/22 financial year.
“High costs of goods and services particularly implants; HD consumables and suturing materials.
“There is a delay in the procurement of MRI scan at King Edward VIII Hospital. However, this is at adjudication stage,” the report said.
The department did not comment when it was asked about the report and when the MRI scan would be procured.
sihle.mavuso@inl.co.za
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