NATIONAL DEPARTMENT OF HEALTH Select Committee on Finance PUBLIC HEARINGS ON THE DIVISION OF REVENUE BILL Tuesday, 24 February 2009 11/28/2018

NATIONAL DEPARTMENT OF HEALTH DIVISION OF REVENUE ACT (DORA). Department manages 5 conditional grants plus one new Disaster Response grant ( Cholera- Limpopo) Health Grants are part of the health system since its inception in 1998 Health conditional grants account for = +/- 95% of total NDoH budget. 11/28/2018

NATIONAL DEPARTMENT OF HEALTH The six (6) Conditional grant allocations are for: HIV and AIDS } Forensic Pathology Services} Schedule 5 Hospital Revitalization } National Tertiary Services } Health Professions Training & } Schedule 4 Development } New – Health Disaster Response (Cholera) 11/28/2018

NATIONAL DEPARTMENT OF HEALTH Comprehensive HIV and AIDS Conditional Grant. Purpose of the grant: Enables health sector to develop a specific response to HIV & AIDS Supports prevention programmes, voluntary counseling & testing, PMTCT, post prophylaxis and home-based care 11/28/2018

NATIONAL DEPARTMENT OF HEALTH Comprehensive HIV & AIDS Plan. Allocation criteria: Antenatal HIV prevalence Estimated share of AIDS cases Populations pos-demarcation. NB. Additional funding from Treasury is shared equitably (according to Treasury). 11/28/2018

COMPREHENSIVE HIV AND AIDS PLAN: ALLOCATIONS.   2008/09 Additional Allocation Roll overs TOTAL 2009/10 2010/11 2011/12 Provinces Purpose R'000 Eastern Cape To enable the health sector to develop an effective response to HIV and AIDS; and to support the implementation of the National Operational Plan for Comprehensive HIV and AIDS treatment and care. 300 522 - 401 727 497 599 533 965 Free State 189 630 235 792 326 658 350 365 Gauteng 541 119 108 512 649 631 760 878 866 452 932 511 KwaZulu-Natal 629 694 127 519 757 213 880 659 1 013 082 1 090 268 Limpopo 234 410 291 474 403 280 432 554 Mpumalanga 151 849 25 570 177 419 200 226 261 545 281 080 Northern Cape 91 444 113 703 157 150 168 559 North West 205 288 38 399 243 687 281 813 337 158 362 666 Western Cape 241 467 309 913 448 834 480 994 2 585 423 300 000 2 885 423 3 476 186 4 311 757 4 632 962 11/28/2018

Implications for under funding: COMPREHENSIVE HIV AND AIDS PLAN : BIDS and IMPLICATIONS OF UNDER FUNDING. Comprehensive inputs received and submitted for the 08/09 bid was R938m and actual received : R300m. Inputs submitted for the 09/10 bid: R1.4b and actual received is R200m. Inputs submitted for 10/11 and 11/12 were R2.1b and R1.7b respectively and actual received is R325m and R407m respectively. Implications for under funding: Cannot roll out ARV programme as intended. Have to prioritize treatment over prevention which is not ethically correct. Drugs become a major cost driver for patients already in the system as treatment cannot be stopped. 11/28/2018

COMPREHENSIVE HIV AND AIDS PLAN – CURRENT INTERVENTIONS. Constant contact with donor agencies to assist with funding gaps such as PEPFAR; EU and DIFID. Redirecting funding from other programmes such as Home Base Care to ARV. Non core functions such as training are funded by donors. Constant contact with provincial programme coordinators to also identify possible savings from their equitable share to be shifted to ARV. Redirecting funding from capital to recurrent to provide for ARV and therefore business plans will also be amended to be aligned with the shifting of funds. 11/28/2018

COMPREHENSIVE HIV AND AIDS PLAN: 3RD QRT EXPENDITURE 08/09. The overall actual expenditure as at December’08 was standing at 71.6% against the target of 75.0%. Six Provinces below the target of 75% as at the end of December were: FS 72.2%, GP 70.6%, KZN 65.6%, MP 65.1%, NC 73.5% and NW 53.8%. 11/28/2018

NATIONAL DEPARTMENT OF HEALTH The Forensic Pathology Services Grant only received inflationary increases. This grant is due to finish in 2010/11. 11/28/2018

NATIONAL DEPARTMENT OF HEALTH Forensic Pathology Services Grant. Purpose of the grant: Assists with the transfer of medico-legal mortuaries from SAPS to the health sector To provide a comprehensive forensic pathology services for the criminal justice system 11/28/2018

NATIONAL DEPARTMENT OF HEALTH Forensic Pathology Services Allocation criteria In accordance with the National project Plan as modified for demarcation and inflation 11/28/2018

FORENSIC PATHOLOGY SERVICES   2008/09 Additional Allocation Roll overs TOTAL 2009/10 2010/11 2011/12 Provinces Purpose R'000 Eastern Cape To continue the development and provisions of a comprehensive Forensic Pathology Service following the shift of this function to the health sector from the South African Polio Service (SAPS) in all provinces. 58 129 32 195 90 324 61 214 69 345 73 506 Free State 31 198 15 500 46 698 32 855 37 218 39 451 Gauteng 77 472 2 500 79 972 81 584 92 421 97 966 KwaZulu-Natal 127 757 - 134 538 152 406 161 550 Limpopo 33 457 14 861 48 318 35 233 39 913 42 308 Mpumalanga 42 003 24 299 66 302 44 233 50 107 53 114 Northern Cape 19 169 10 207 29 376 20 187 22 868 24 240 North West 22 158 7 759 29 917 23 334 26 433 28 019 Western Cape 55 535 30 482 86 017 58 484 66 251 70 226 466 878 137 803 604 681 491 662 556 962 590 380 11/28/2018

FORENSIC PATHOLOGY SERVICES : 3rd QRT EXPENDITURE 08/09. Low expenditure of 70.6% is recorded against the target of 75.0%. Improvement has been effected on this grants but provinces such as FS 61.0%, LP 65.0%, MP 67.4%, NC 40.8%, NW 63.4% and WC 58.9% are still experiencing challenges. 11/28/2018

FORENSIC PATHOLOGY SERVICES: INTERVENTIONS. Funds have been withheld for December as well as the roll over for the Northern Cape province due to underperformance. The blockages are related to the implementing agency. The matter has referred to the court. MP & KZN has resolved the limitations and are now on track. Expenditure has picked up for MP and KZN and are requesting additional funding as they are projecting over expenditure. These will be dealt with during the 09/10 Adjustment Budget process. Continuous support for development of business plan. 11/28/2018

NATIONAL DEPARTMENT OF HEALTH Hospital Revitalization Grant Purpose of the grant: Plays a key role in transforming and modernizing infrastructure and equipment in hospitals. Funds upgrading and replacement of hospital infrastructure - focuses mainly on projects where entire hospital is upgraded. Also supports management development initiatives including personnel, procurement delegations and financial management capacity. 11/28/2018

NATIONAL DEPARTMENT OF HEALTH Hospital Revitalization. Allocation criteria: Based on projected cash flow figures for approved projects over MTEF period. Expenditure on health technology and hospital management and quality improvement also taken into consideration. Project based allocation approach is aligned with equity based approach over long term. 11/28/2018

HOSPITAL REVITALIZATION: ALLOCATIONS.   2008/09 Additional Allocation Roll overs TOTAL 2009/10 2010/11 2011/12 Provinces Purpose R'000 Eastern Cape To provide funding to enable provinces to plan, manage, modernise, rationalise and transform the infrastructure, health technology, monitoring and evaluation of hospitals; and to transform hospital management and improve quality of care in line with national policy objectives. 282 288 - 238 611 360 661 386 048 Free State 202 753 247 885 378 427 421 883 Gauteng 718 312 755 190 798 609 805 967 KwaZulu-Natal 285 666 44 738 330 404 449 558 500 815 551 698 Limpopo 248 540 3 489 252 029 206 930 323 425 375 672 Mpumalanga 244 322 53 975 298 297 304 441 331 657 360 557 Northern Cape 246 364 71 116 317 480 340 197 420 218 410 892 North West 254 030 254 644 326 303 374 074 Western Cape 400 388 3 556 403 944 388 845 440 554 485 501 2 882 663 176 874 3 059 537 3 186 303 3 880 667 4 172 292 11/28/2018

HOSPITAL REVITALIZATION: BIDS AND IMPLICATIONS Initial allocations for approved project plans had to be reduced/cut due to budget pressures experienced by National Treasury. Budget cuts had to be effected as follows: - WC for 09/10 : R19m. - LP for 10/11 : R21m and - MP for 11/12 : R22m. 11/28/2018

HOSPITAL REVITALIZATION: IMPLICATIONS FOR UNDER FUNDING: Budget cuts reduced the targets planned for the hospital revitalization grant project. Revision of the departmental Strategic Plan was necessary. Focus changes to be on current ongoing projects and no further future planning. Possible short fall of funding from 10/11 onwards on the affected provinces unless additional funding is received from National Treasury. 11/28/2018

HOSPITAL REVITALIZATION 3rd QRT EXPENDITURE. Low expenditure has been recorded under this grant with provinces spending 68.6% against the target of 75.0%. EC 59.2%, FS 71.0%, KZN 37.9%, is due to the delay in the awarding of a tender for the Hlabisa, Rietvlei and Lower Umfolosi Hospital. Limpopo 49.1%, is mainly due to the delay in the awarding of the tender by the Department of Public Works. 11/28/2018

HOSPITAL REVITALIZATION 3rd QRT EXPENDITURE. Under-expenditure in MP 28.3%, is enhanced by the lack of capacity in critical areas. NC at 56.7%, is experienced due to unpaid invoices which will be processed in January. NW at 68.0% and WC at 44.5% are due to the Peer Review Process which further delayed projects as a result tenders were only awarded two months later than the scheduled period. 11/28/2018

HOSPITAL REVITALIZATION - INTERVENTIONS. Transfer payments for November and December were withheld due to poor spending for LP; MP and WC. Rollover funds were approved late in the financial year and it has become a financial challenge for affected provinces to fully spend the total allocated budget by the end of the financial year. However, commitments are being made to secure the unspent funds. LP province is working on a turn around strategy to improve their under spending. Strengthen monitoring and fast tract implementation for on onsite projects. 11/28/2018

NATIONAL DEPARTMENT OF HEALTH National Tertiary Services Grant. Purpose of the grant : Aims to provide strategic funding to enable provinces to plan, modernize and transform the service. Operation in 27 hospitals across 9 provinces (mostly in Western Cape and Gauteng) Western Cape and Gauteng receive 61.9% of allocation in 2007/08 as these provinces provide the highest proportion of tertiary services 11/28/2018

NATIONAL DEPARTMENT OF HEALTH National Tertiary Services Grant. Allocation criteria: Cost of designated tertiary services as determined by the costing and the review of the NTSG. 11/28/2018

NATIONAL TERTIARY SERVICES   2008/09 Additional Allocation Roll overs TOTAL 2009/10 2010/11 2011/12 Provinces Purpose R'000 Eastern Cape To compensate provinces for the supra-provincial nature of tertiary services provision and spill over effect; and to provide strategic funding to enable provinces to plan, modernise, rationalise and transform the tertiary hospital services delivery platform in line with national policy objectives including improving access and equity. 468 088 4 454 472 542 509 429 557 137 588 135 Free State 545 350 5 189 550 539 642 835 659 469 695 631 Gauteng 2 186 619 20 805 2 207 424 2 328 301 2 561 154 2 703 835 KwaZulu-Natal 903 297 8 595 911 892 983 948 1 102 585 1 164 255 Limpopo 150 168 1 429 642 152 239 176 872 257 314 272 409 Mpumalanga 66 621 634 67 255 81 410 91 879 97 025 Northern Cape 152 120 1 447 153 567 173 242 225 948 238 964 North West 117 317 1 116 118 433 134 416 179 280 189 648 Western Cape 1 486 054 14 139 1 500 193 1 583 991 1 763 234 1 848 976 6 075 634 57 808 6 134 084 6 614 442 7 398 000 7 798 878 11/28/2018

NATIONAL TERTIARY SERVICES Final allocations from the Bid inputs submitted for this grant resulted in the following funding gap per financial year: 08/09 : R2,2b. 09/10 : R2,6b. 10/11 : R3,6b. Implications for under funding: The provinces now have to use their provincial equitable share to fund the gap. Funding of the PHC get reduced from provincial share. Under developed provinces do not achieve the goal of equity and capacity building. - The aim of reliving pressure on the costs related to tertiary services from bigger provinces is not achieved. 11/28/2018

NATIONAL TERTIARY SERVICES 3rd QRT EXPENDITURE. Year to date expenditure is almost on target at 73.8% except for : EC at 71.9% LP at 67.4% MP at 62.3% NC 39.4% and NW at 61.1%. NB.Provinces have indicated that they will spend their full allocations by the end of the financial year. 11/28/2018

NATIONAL DEPARTMENT OF HEALTH The Health Professions Training and Development Grant only received normal inflationary increases. No bids were submitted for this grant. 11/28/2018

NATIONAL DEPARTMENT OF HEALTH Health Professions Training and Development Grant. Purpose of the grant The grant funds the costs associated with the training of health professionals. The development and recruitment of medical specialists. It also enables the shifting of teaching activities from central to regional and district hospitals. 11/28/2018

NATIONAL DEPARTMENT OF HEALTH Health Professions Training & Development. Allocation criteria: Target allocation criteria is being reviewed as a process of grant reform. Based on a historical approach derived from medical students distribution. 11/28/2018

HEALTH PROFESSIONS TRAINING & DEVELOPMENT   2008/09 Additional Allocation Roll overs TOTAL 2009/10 2010/11 2011/12 Provinces Purpose R'000 Eastern Cape Support provinces to fund costs associated with training of health professionals; development and recruitments of medical specialists in under-served provinces; and support and strengthen undergraduate and post graduate teaching and training processes in health facilities. 140 641 151 362 160 444 170 071 Free State 102 000 110 755 117 400 124 444 Gauteng 610 828 614 812 651 701 690 803 KwaZulu-Natal 212 092 222 425 235 771 249 917 Limpopo 79 834 3 062 82 896 88 759 94 085 99 730 Mpumalanga 59 935 71 839 76 149 80 718 Northern Cape 45 278 58 304 61 802 65 510 North West 68 977 78 608 83 324 88 323 Western Cape 356 414 362 935 384 711 407 794 1 675 999 - 1 679 061 1 759 799 1 865 387 1 977 310 11/28/2018

HEALTH PROFESSIONS TRAINING & DEVELOPMENT 3rd QTR EXPENDITURE. Year to date expenditure is low at 71.0% against the target of 75.0%. Under expenditure is realised in the EC at 67.8%, KZN at 58.3%, LP at 67.7%, MP at 50.4%, NC at 39.3.1% and NW at 70.0%. 11/28/2018

NATIONAL DEPARTMENT OF HEALTH Health Disaster Response ( Cholera) New Grant Purpose of the grant: To control the Cholera outbreak and reduce the morbidity and mortality due to the communicable diseases. 11/28/2018

HEALTH DISASTER RESPONSE (CHOLERA) NEW GRANT   2008/09 Additional Allocation Roll overs TOTAL 2009/10 2010/11 2011/12 Provinces Purpose R'000 Eastern Cape to control the cholera outbreak and reduce the morbidity and mortality due to the communicable diseases. Free State Gauteng KwaZulu-Natal Limpopo 50 000 10 000 Mpumalanga Northern Cape North West Western Cape - 11/28/2018

NATIONAL DEPARTMENT OF HEALTH: CONDITIONAL GRANTS 11/28/2018

Summary Year to date Expenditure (as at 31 Jan’09) The target for end of January 2009 expenditure ( 10 months) is 83.3% The overall expenditure for all conditional grants amounts to 82%. The variance between budget and expenditure is only 1.3%. Prior year overall expenditure as per audited financial statements was 96.1%. 11/28/2018

NATIONAL DEPARTMENT OF HEALTH: CONDITIONAL GRANTS 11/28/2018

Conditional Grants Monitoring and interventions. Monthly reports received from provinces in line with the In-year-monitoring (IYM) system developed by Treasury. Significant improvement in meeting deadlines. Monthly IYM reports forwarded to NT by NDOH - on time. Quarterly Performance reports submitted. Challenges still exist with meeting deadlines. The matter is being addressed. Withholding of funds for non compliance with DORA or under expenditure. ( Forensic Pathology Serv.& Revitalization grants). Regular visits to provinces for support and monitoring. Access to donor funding for funding gaps. 11/28/2018

Conditional Grants Monitoring and interventions. Concerns raised by the Auditor General in previous audits have been addressed. Recent discussions with the Auditor general officials indicate that there is vast improvement in the monitoring and management of the grants. Stricter monitoring is being implemented, hence withholding of funds. The Department is also establishing a new Financial Provincial Support unit to strengthen monitoring and support role to the provincial departments of health. 11/28/2018

CONCLUSION. The Department accepts the National Treasury’s FFC formula and the criteria used for the Provincial Equitable Share (PES). However, in some grants the formula does not address the intended purpose ( disease burden and demographics). The legal implications of national and provincial levels of accountability impacts on NDOH’s ability to intervene. Provinces have the legal right to develop their own models of health services which sometimes is not in line with the National strategy. 11/28/2018