1. Province of the Eastern Cape Department of Health Select Committee on Finance 4th Quarter Spending on Conditional Grants and CAPEX 11 th May 07

2. CONDITIONAL GRANTS Grant 03/0404/0505/0606/0707/08 R'000 NTSG 195,504 272,036 353,022 374,203 428,912 HPTD 79,873 97,464 127,566 133,944 Comprehensive HIV&AIDS 38,934 98,970 159,005 218,021 233,204 FPS 1,000 - 8,866 91,867 68,135 Hosp Revitalization 90,751 116,354 147,732 105,316 246,750 Prov Infra Grant 150,000 TOTAL 406,062 584,824 796,191 916,973 1,260,945 Percentage growth44.02%36.14%15.16%37.51* * The department received for the first time, a portion of the Provincial Infra Grant

3. INFRASTRUCTURE Infrastructure Budget 03/0404/0505/0606/07 R'000 Equitable Share310.919 273,684 306,547 509,553

4. 2006/07 Conditional Grant Expenditure Adjusted Budget National Transfers Total ExpenditureVariance % Over / Under-spent R'000R’000R'000 % HIV & AIDS232,021 277,964(45,943)(19.80%) Forensic Pathology91,867 39,06452,80357.47% HPTD133,482 136,980(3,498)(2.62%) Hosp Revitalization125,071 133,868(8,797)(7.03%) NTSG374,203 352,27221,9315.86% TOTAL956,644 940,14816,4961.72%

5. Conditional Grants – Budget Vs Expenditure

6. Infrastructure Original Budget Adjustment (roll over) Adjusted Budget Exp as at end of Mar 2007 Over / (Under) Expenditure Equitable Share481,94537,711519,656558,557(38,901) Total Expenditure 481,945 37,711 519,656 558,557 (38,901)

7. 2 : EXPENDITURE ANALYSIS: CONDITIONAL GRANTS HIV & AIDS grant was overspent by 19.80%. Forensic Pathology Grant was under-spent by 57.47% HPTD Grant was over-spent by 2.62% Hospital Revitalization Grant was over-spent by 7.03% National Tertiary Services Grant was under-spent by 5.86%

8. The HIV & AIDS Conditional Grant was over-spent by R45,943 (19.80%) by the end of the financial year. The major reason for the over-expenditure was as follows: –Many employees were employed and linked to the HIV Grant project. The department requested an additional allocation of R50 million from the National Department of Health to augment the Compensation of Employees budget in the grant but only R14 million was received during the Adjustments Estimate. Staff employed in the Hospital ARV and Primary Health Care sites were the major cost drivers which led to the over-expenditure. Others were: Laboratory costs for screening patients to be put on ARV, Laboratory test due to roll-out of PCR Testing for babies born to HIV-positive mothers and CD4 tests for patients that test positive in the VCT programme,

9. The Forensic Pathology Grant was under-spent by R52,803 (57.47%) by the end of March 2007. The reasons for the under- expenditure was the following: The project to re-furbish, re-equip and construct new mortuaries by the department got off late during the year due to technicalities such as problems with the initial specifications, the appointment of a competent project managers etc. The project manager (Coega Development Corporation) was engaged in January 2007 and work on all the projects – the refurbishment and construction of the new mortuaries have begun. In fact contracts have been awarded and new equipment has been ordered which will be delivered when the mortuaries are ready. A roll-over request for the unspent funds has been lodged with the National Department of Health and Provincial Treasury.

10. The Health Professionals Training & Development (HPTD) grant was over-spent by R3,498 (2.62%) due to the following reason: –During the year a number of newly-qualified health professionals were absorbed by the department and placed with some of the Hospital Complexes.

11. The grant was under-spent by R21,931. The reasons are as follows: –Machinery for the Hospital Complexes ordered from overseas such as hand-free adult burns unit and cobalt treatment have not been received and therefore the unspent grant has been committed. Payment will be made when the Hospital Complexes receive the equipment. A roll-over of the unspent portion of the grant has been requested.

12. The Revitalization Grant had an over- expenditure of R8,797. The over- expenditure was due to the fact that the funds allocated was not sufficient for the projects that had been approved in Project Implementation Plan. Hospital equipment was purchased for the institution that had to be commissioned. This was not in the Project Implementation Plan.

13. I Planning for 2007/08 projects were brought forward and carried out in 2006/07. As a result costs that should have been incurred in 2007/08 on the planning were incurred in the last quarter of 2006/07. Medical equipment to the value of R58 million (eg X-rays, Laundry equipment and kitchen equipment for health institutions etc) were purchased in 2006/07 for projects that were to be completed in 2007/08. There were cost escalation on some of the 2006/07 projects due to the heavy rains that had made the ground too wet for the construction to proceed smoothly.

14. ProjectsNumberProjectsNumber New Clinics Built Mud Clinics re-built Clinics Officially Opened Clinics & CHCs To be completed in 07/08 Completed CHCs Equipped Clinics & CHCs New clinics being built 6 8 37 12 1 20 60 Hospitals with new X-Rays, kitchen and laundry equipment Face-lifted Hospitals New hospital opened Hospitals with new facilities 31 30 1 5 Face-lifted Hospitals New hospital opened Hospitals with new facilities ( 30 1 5 Clinics as centres of excellence (WIP) Trauma Units (2010 preparation) (WIP) 50 3

15. A formal Monitoring & Evaluation (M&E) system is currently being developed. M & E practitioners are being recruited to populate the M&E structures at Head Office, Districts and Complexes Monthly reporting on service delivery and programme implementation as well as site visits are done and they complement the M&E system.