Gauteng Provincial Treasury appoints an Administrator to assist in Gauteng Department of Health turnaround strategy
30 May 2013
The Gauteng Provincial Treasury (GPT) has appointed PricewaterhouseCoopers (PwC) as the Administrator who will work with the provincial government to re-engineer business processes in the Department of Health (DoH).
This development is in line with the decision taken by the Executive Council to invoke Section 18 of the Public Finance Management Act which authorises Treasury to take appropriate steps to address "persistent material" challenges experienced by any department.
"This intervention does not mean that the Department of Health is under administration. We are strengthening the financial management capacity of the department so that it could continue to provide quality health services to the public," Finance MEC Mandla Nkomfe said during the presentation of GPT's 2013/2014 Budget Vote at the Legislature today.
In the short term, the Administrator will work with the intervention team - that is currently in place and comprises of financial management, supply chain management and medical professionals from Treasury and Health - to stabilise the health system. This entails addressing all historical issues mainly in relation to three focus areas: payment of suppliers, revenue management and personnel administration.
"The long term deliverables of the Administrator includes the establishment of staffing norms for each health institution to inform the process of filling vacancies, building of systems and procedures that are in line with the procurement framework in the public sector and ensure alignment of human resource development plan with the strategic direction of the department," Nkomfe explained.
"Furthermore, the Administrator will establish and develop proper systems for effective and efficient health service delivery in the province, introduce an appropriate system that support hospital management and put in place change management processes for strategic leadership in the department," he added.
"A detail work plan containing a reporting framework with measurable targets and tight timeframes has been developed. We believe that a two-year period is enough to complete this work. This is because our focus is on the provision of efficient and effective public health services to the people of Gauteng. That is why Health must be turned around urgently to fulfil this mandate," Nkomfe said.
The appointment of an Administrator is part of measures that are currently being implemented by the provincial government to turn around DoH. Amongst other things, the provincial government appropriated additional funds to address accruals that are a burden to the departmental budget. Also Treasury has deployed additional capacity to assist the department in procurement and financial management functions.
It is the considered view of the provincial government that these and other measures are beginning to yield encouraging results. One case in point is that DoH has moved from adverse audit opinion to unqualified, a positive trend in accounting terms which indicates an improvement in the financial position of the organisation. Also the department did not experience over expenditure in the previous financial year.
Therefore the Administrator will join the provincial team and work with it to address current challenges faced by Health and build the necessary capacity for the department to become sustainable and improve service delivery going forward.
Treasury worked within the applicable procurement framework and followed a strict criterion to find a company with the required skill set and relevant experience to undertake this comprehensive task of being an Administrator in one of the strategic departments of the provincial government.
Statement issued by Gauteng Finance, May 30 2013
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