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Poor financial management has left a deep budget hole, which leads to suppliers not being paid on time and deteriorating health services.
Poor planning, poor financial management, and underfunded personnel budgets are at the core of the Gauteng department of health’s failure to spend a massive R559 million on capital assets in the last financial year, ended March 31, 2018.
And the SA Medical Association (Sama) wants the unspent millions to be diverted to employ more doctors and other health personnel.
Reacting to yesterday’s startling revelation by the DA Gauteng shadow health MEC Jack Bloom of the huge under-spending, Section 27 budget analyst Daniel McLaren said the financial position of the troubled ministry “has been deteriorating over a number of years”.
McLaren also saw the rising demand for healthcare and costs as “growing faster than the healthcare budgets”.
“This toxic combination has led to funds being diverted from goods and services to pay for salaries, leaving many service providers unpaid while capital budgets go unspent and personnel costs take up an ever-greater share of the department’s total budget,” he told The Citizen.
“Underfunding of the personnel budget is only the first step in a vicious cycle. Cuts to provincial budgets and severe expenditure ceilings imposed by the National Treasury to deal with the revenue shortfalls are forcing provincial departments across the country to freeze posts, in many cases across the board.
“This has been the case at the Gauteng department of health since late last year, and is creating a whole new crisis of its own. The capacity of the department to get back on its feet is being weakened by this, and the turnaround strategy of the department is being undermined, while patients are more likely to wait longer and suffer adverse outcomes in hospitals, because of the staff shortages.
“This, in turn, is feeding the rise in medico-legal claims, which now amount to half the department’s annual budget.”
McLaren said the department needed “a turnaround strategy that is supported at the highest levels and carefully implemented, with adequate financing over a number of years, if patient outcomes are to improve”.
“The current short-term post and budget freezing is only hurting patients and the dedicated staff of the department, who remain committed to providing quality healthcare against the odds.”
Despite the status of the department’s budget – part of its fourth quarter report – having been first revealed at a meeting of the Gauteng legislature’s health committee on Friday, officials have kept the matter under wraps before it was made public by Bloom.
According to the report, which covers the January to March 2018 period, only R1.564 billion – 73% – was spent out of a total R2.123 billion budget for capital assets.
Failure to spend the budget took place against the backdrop of “a huge need for new machinery and hospital buildings which are falling apart”, said Bloom, adding that R443 million was underspent for machinery and equipment, and R115 million of the capital budget was “not spent on buildings and other fixed structures”.
Bloom said: “The department’s chronic inability to spend on capital assets continues in this financial year with a freeze on all new building projects.
“This means that urgently needed projects like extra wards at Edenvale and Tembisa hospitals and new hospitals in Kempton Park, Daveyton and Soshanguve will be further delayed. Because of overspending in other areas, the overall underspend for the 2017-18 financial year was R179 million.”
He said challenges facing the ministry highlighted “poor financial management that has a deep budget hole, which leads to suppliers not being paid on time and deteriorating health services”.
Called for comment, the department spokesperson Lesemang Matuka referred The Citizen to the provincial department of finance, with finance MEC Barbara Creecy’s spokesperson John Sukazi maintaining the matter belonged to the health ministry.
Sama chairperson Mzukisi Grootboom said the department was “under a lot of strain” due to a shortage of doctors and other staff.
“We are dealing with a department that has taken a decision not to hire more, once people leave the service. They are even struggling to pay doctors’ salaries and overtime for work done. This is already putting a lot of strain on staff.”
Grootboom said healthcare relied “a lot on human resources, with a need for more warm bodies, but posts are not being filled”.
“When people leave the service, their positions are not being filled, something which puts pressure on the health staff.”
He expressed concern at the department’s quality of financial management. “Historically, the budget hasn’t been based on previous financial year’s performance. Sometimes the budget is bigger or less than the requirements.”
He said he was also concerned about where the funds to compensate families of the Life Esidimeni tragedy would come from.
“The Gauteng premier [David Makhura] has promised families that government will pay, we hope that the money will not be taken from a budget allocated to pay doctors.”