The reports deal with health and social development as separate entities as they existed at the time. You will know that the departments were merged after the elections into the new integrated Department of Health and Social Development.
The erstwhile Department of Social Development has received an unqualified opinion, while the Department of Health received a disclaimer of opinion which is a bad reflection on the department.
We have accepted the findings of both reports and have developed a plan to correct the deficiencies identified by the Auditor-General. Of particular concern are the audit findings relating to the Department of Health which was found to have incurred:
* Unauthorised expenditure of more than R1 billion
* Irregular expenditure of R1,9 million which was incurred due to procurement process not followed appropriately
* Fruitless and wasteful expenditure of R2,2 million incurred for defective work on the construction of facilities by the former department of public works roads and transport
* Under spending of R68 million on the HIV and Aids conditional grant and R35 million of the hospital revitalisation programme.
The under expenditure on hospital revitalisation programme was caused by the cancellation of the contract to build Zola Hospital, the late finalisation of procurement of equipment for Chris Hani Baragwanath and Mamelodi hospitals.
Shortage of staff and slow submission of invoice was responsible for the under-expenditure on HIV and AIDS. More staff will be employed at district level to speed up the payment of invoices.
Every directorate in the department has been instructed to develop business plans to avoid the recurrence of unauthorised, irregular, fruitless and wasteful expenditure.
We are also reviewing policies and procedures currently in place. In this regard we are restructuring the supply chain management unit to strengthen compliance with tender procedures. The performance management of every manager and supervisor will henceforth include an assessment of adherence to supply chain regulations.
Governance structures are being strengthened at all institutions and demand planning linking their requirement with budgets is being enforced.
Policies relating to reporting on financial and non-financial matters are being developed and will be enforced.
The department is also in the process of establishing a contract management unit which will oversee monitoring and compliance supply chain regulations. Supply chain management will ensure that strategic plans of directorates are complete, accurate and that they are linked with budget.
The AG’s report further identified overpayments relating to the implementation of the occupation specific dispensation for nurses, weakness in the awarding of contracts, the management of assets and adherence to procurement protocols.
According to the AGs report the employees of the department, including those employed in hospitals and clinics, could not be ascertained. This is because Persal was not updated resulting in employees whose contracts had expired still reflect in the list of employees.
The department is going to conduct an audit of all its employees to verify the R7,1 billion paid in compensation of staff. This process will involve payment of staff by cheques where they will provide their identity number and evidence of employment. All files of employees are going to be updated.
Significant backlogs were also identified relating to the capturing of leave. Institutions have indicated that Gauteng Shared Services Centre (GSSC) often sent them leave forms of employees who are not in their institution.
We find this situation completely unacceptable and we are putting measures in place to ensure that those who are responsible for this sad state of affairs are held accountable.
We have instituted a forensic investigation to determine whether there was any impropriety and collusion between employees of the department and suppliers. We call on those who may have information that may be of assistance to the investigators to come forward.
The department will not hesitate to take disciplinary action including criminal action should anyone be found to have acted improperly and in contravention of regulations and statutes such as the Public Finance Management Act.
Issued by: Department of Health and Social Development, Gauteng Provincial Government
8 October 2009
