Gauteng Health owes R7bn and cuts all capital spending

14 February 2018

The Gauteng Health Department has only R229 million in cash to pay for goods and services until the end of the financial year on 31 March, but the total amount owing to companies is expected to be between R6.5 and R7 billion.

This dire financial situation was revealed yesterday by Gauteng Health MEC Gwen Ramokgopa at a meeting of the Legislature’s Health Committee where she presented a report on the Third Quarter performance of her Department from October to December 2017.

Only 27% of suppliers are being paid within the required 30 days, and there are “ongoing discussions with Provincial Treasury to address the shortfall in funding taking into account the increased burden of disease.”

The only good financial news is that R365 million was collected in the quarter, which was above the target of R338 million because North West Province has starting paying for health services and there was improvised collection of revenue from the Road Accident Fund, Correctional Services and self-paying patients.

One result of the funding crisis is that the cervical cancer screening rate was only 45% instead of the 60% target because radio advertisements were cut.

The qualifications of newly-appointed non-clinical staff cannot be verified as the SA Qualifications Authority (SAQA) has suspended services because of non-payment.

Other disruptions can be expected as more and more unpaid companies stop services.

I am greatly concerned that there is a 30% underspending on infrastructure in this financial year and there will be a freeze on all new building projects in the 2018/19 financial year.

According to the Department “no project (will) be taken from planning to construction phase during the next year” and the Health Facilities Conditional Grant will be shifted into maintenance, refurbishment and upgrade of existing facilities.

This means that urgently needed projects like extra wards at the Edenvale hospital and new hospitals in Kempton Park, Daveyton and Soshanguve will be further delayed.

A financial bail-out is the short-term solution to the Department’s budget woes, but this must be accompanied by good management with strict controls and the cutting of all wasteful spending otherwise the budget problems will continue.

Issued by Jack Bloom, DA Gauteng Shadow Health MEC, 14 February 2018