22nd November 2019 | Alicestine October
The Auditor-General (AG) this week once again in his audit report on national and provincial departments painted a bleak picture of wastage and brazen negligence in the public sector.
In provincial departments of health that are already hamstrung by budget cuts, such wastage is not only unjustifiable but also obscene in a sector where it is often a matter of life and death for those depending on public health services.
Over the last five years government (national and provincial departments) wasted more than R4 billion in fruitless and wasteful expenditure, meaning South Africans got no value for that money.
It is clear from the audit report that focuses on the 2018/19 financial year, that the new powers of the AG, will still take some time to bear fruit. The amendments to the Public Audit Act was signed into law earlier this year. It enables the office of the AG to enforce recommendations made to departments that mismanage public money. Wasting over R4 billion over a period of five years illustrate how accounting officers in departments have disregarded the AG’s recommendations to the detriment of the public purse.
Researcher at the Public Service Accountability Monitor (PSAM) Zukiswa Kota told Spotlight the AG’s powers (with the phased in approach) will over time allow his office greater latitude to take punitive action or recommend sanctions against defaulting accounting officers. “The more targeted approach to holding accounting officers to account will hopefully result in improvements in performance, more clean audits, better governance of public resources and most importantly – improved delivery of services,” she said.
Kota expressed concern that this is clearly not happening yet. “In fact, we are seeing serious regressions of auditees that ultimately has a direct bearing on already limited resources. In addition to this, with ongoing budget reductions to key departments like health and education infrastructure, departments can ill afford to lose funds as a result of weak financial management and unaccountable expenditure,” she said.
“Budget cuts to departments by the National Treasury on the one hand and continued wasteful spending by some departments on the other is not justifiable. “We look forward to seeing the results of the amendments in due course as South Africa simply cannot afford the current trajectory of regression in key expenditure management and governance areas.”
Wasting over R4 billion is not small change.
A new clinic in Nkanga in the O.R. Tambo-region in the Eastern Cape cost R28 million to build. About 142 similar clinics could have been built with the R4 billion lost to wastage. The Nkanga clinic was opened this week.
If one take an estimate of R1,3 million to train one medical doctor in South Africa, which means government could have funded the training of over 3 000 additional doctors with the R4 billion. An additional 3 000 doctors could have made a significant dent in the shortage of these medical professionals in the public health sector.
Kota also raised concern over the billions lost. “To put this into perspective – this amount equates to nearly double the budget for the entire Eastern Cape Department of Human Settlements for this financial year. It is also four times the allocation for the emergency fund for gender based violence and these are funds that are rarely reclaimed or returned to the public coffers. It is quite literally wasted.”
The audit report also warned that government, especially in a time of austerity, ‘cannot afford to lose money because of poor decision-making, neglect or inefficiencies’. Fruitless and wasteful expenditure increased by 7% from the previous financial year (2017/18). The Free State Department of Health contributed to this 7% increase with wasteful expenditure of R101 million on infrastructure projects.
These projects among others included the upgrading of the Boitumelo Regional Hospital in Kroonstad. The department incurred fruitless and wasteful expenditure of R20 million due to an out of court settlement with the contractor. This meant that the renovations that started in 2011 with a contract value of R138 million was still incomplete by March this year and already 51% over the original contract value.
Claims for negligence against government departments especially police and health is estimated at R100 billion for the 2018/19 financial year. The AG flagged this as an increasing risk. According to the audit report the health departments of Limpopo, Gauteng, KwaZulu-Natal and Mpumalanga as well as the SAPS were responsible for 70% of the R100 billion claims.
The audit report also noted that over a third of the provincial health departments had claims for medical negligence that is more than 10% of each department’s total budget for the 2019/20 financial year. This will mean far less money will be available to spend on other health priorities. The Eastern Cape Department of Health according to a report in Daily Dispatch this week, set up a litigation unit to deal with these medico-legal cases that already cost the department R29 billion.
The AG also painted a picture of how these claims often affect health service delivery. The Mpumalanga Department of Health in the 2018/19 financial year had a budget of R68 million for medical negligence claims. However, the actual claims paid out amounted to R499 million – more than seven times the budgeted amount. The report noted that as a result positions of CEO’s and nurses at some hospitals could not be filled. New ambulances could not be purchased and maintenance of the existing fleet was also affected due to a lack of funds. This all affected how these hospitals could deliver services.
Earlier this year the DA called for the Mpumalanga Department of Health to be put under administration in light of ‘gross financial mismanagement’. The provincial department of health at the time in April however, blamed budget cuts for not being able to fill critical posts.
When MPs this week during question time in Parliament asked Minister of Health Zweli Mkhize about escalating medical negligence claims, he too chose a different scapegoat. Mkhize said most of these cases are fraudulent and a result of ‘collusion’ between staff and lawyers at certain legal firms. He noted 90% of these cases were related to conditions like cerebral palsy and the department will have to find different ways to deal with it than just paying up. “We will also take this up with the law society,” he said. Mkhize said his department is looking into how they will limit these costs and one way is to discuss how the claim amounts can be capped through legislation. He didn’t mention the shortcomings of the administration in the national and provincial departments of health at all.