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As part of the Budget Review and Recommendations Report (BRRR) programme, the Portfolio Committee on Health this week received briefings from various stakeholders regarding the audit outcomes, budget, spending patterns and annual reports of health entities. Three of these entities included the Auditor-General of South Africa (AGSA), the Financial and Fiscal Commission (FFC) and the Medical Research Council (MRC).

Irregular and wasteful expenditure was the highlight of the report from the AGSA, which speaks to national and provincial departments’ audit outcomes. Improper contract management, vacancies of key positions and a heavy reliance on consultants were highlighted as some of the key reasons behind the audit regression of provincial health departments. The Committee heard that provincial departments often run the risk of making payments on contracts which have already expired.

The AGSA has a number of programmes in place; one of these is the value analysis project which runs as part of its statutory audits and which seeks to advise departments in getting the best value for money in their projects. Service delivery was raised as one of the key challenges faced by the health service sector, and while the Committee is of the opinion that performance percentages do not relate to spending percentages, it enquired how challenges such as these could be addressed. Key recommendations from the AGSA to the Committee in addressing audit challenges include requesting management to provide feedback on implementation and progress of action plans to improve audit outcomes during quarterly reports; and to provide quarterly feedback on the status of key controls, especially around completeness of accruals and commitments.

Officials from the Financial and Fiscal Commission (FFC) highlighted the fact that South Africa inherited a fragmented healthcare system with a large number of financing, distributional and geographical inequalities. While the government continues its commitment to improving healthcare outcomes, the healthcare sector in South Africa continues to face a number of challenges which relate to poor organisational designs and performance management systems.

The health sector also faces infrastructural challenges which are characterised by inconsistent spending performances of the health facility revitalisation grant. Poor operational and expenditure management in public healthcare funding was raised as a concern, especially since healthcare is believed to be underfunded. While the FFC is of the opinion that a large portion of health spending is consumed by personnel, the Committee highlighted the importance of proper compensation for medical professionals.

A worrying trend noted by the FFC is the emergence of medical claims relating to negligence and malpractice and recommendations from the FFC would be to address these challenges, and to reorganise the composition of conditional grants in accordance with provincial specific needs in order to improve on service delivery in the health sector.

In presenting their 2016/17 annual report, the Medical Research Council (MRC) highlighted the maintenance of its unqualified audit (without findings) of the past five years as one of its key achievements. Officials reported that the MRC has been highly focused on capacity development relating to gender and race in reaching its equity targets; and the significant increase in educational investments for Masters and PhD students of which African females are the major beneficiaries.

In terms of its financial targets, the MRC has been able to increase its revenue by 10.4% and the current budget is in surplus of R32m. The MRC further presented its transformational plan which includes, among other things, the optimisation of posts and improving its competitive intramural funding programme.

The Acting Chairperson, Mr Amos Mahlalela, highlighted the importance of raising budgetary constraints and reviews to the Committee, which is to make recommendations on these as part of its Budget Review and Recommendations Report (BRRR). While the MRC was commended for its great achievements, officials from all three entities were encouraged to improve on their respective roles in improving healthcare and service delivery in the health sector.

By Felicia Lombard
6 October 2017