Expert to get to the root of Dept of Health’s audit outcomes
An expert from the National Department of Health has been commissioned to determine the root causes for the Department of Health's poor audit outcomes.
POLOKWANE – The Standing Committee on Public Accounts (Scopa) on Tuesday was informed of this decision by the national department in a bid to determine whether the Department of Health was underfunded or whether finances were simply managed poorly.
Two chartered accountants will assist the department with their finances as the department is currently in the process of a system/data clean-up for unbilled transactions dating back to 2007 to ensure proper reporting and credible financial statements.
Read more: Education, Health the audit report culprits
The department at the end of the 2016/17 financial year had a bank overdraft and had not paid its service providers for the fourth quarter of the financial year as it did not have the finances to do so.
Scopa noted with concern that the department had findings for the past three years on accruals in revenue, expenditure management, material misstatements in the preparation of financial statements, contingent liabilities, non-compliance with legislation and regulations. It also failed to achieve an unqualified audit opinion without matters from the Auditor-General’s (AG) office.
Treasury is also assisting the department with their asset management. The Department of Health regressed from an unqualified audit opinion in 2014/15 to a qualified opinion in 2015/16 and 2016/17 due to accrued departmental revenue, asset management and leave management issues.
The department, with around 35 000 personnel in five districts, 40 hospitals and 516 primary health care facilities, decided to attempt to remedy this by procuring an electronic workforce management system to manage leave and other human resource processes.
Employee costs will also be looked into, as will commuted overtime due to non-submission of documentation in support of overtime paid.
The Department of Health is a defendant in a number of medical negligence lawsuits and legal claims since 2014/15 with contingent liabilities amounting to R2,22 billion. Included in the R2,22 billion are unconfirmed balances amounting to R233,78 million. Claims include alternate dispute resolutions, a defence in the High Court, disbursements for potential medico-legal cases and consultations.
The department also incurred an amount of R228,41 million in irregular expenditure when proper tender processes were not followed. An amount of R959,97 million of previous years was still under investigation.
An amount of R111,785 million in irregular expenditure for order splitting, relates to the procurement of patient food through contract extensions for outsourced hospitals and splitting of orders emanating from the Section 100 period and was condoned by National Treasury as per the report from the department submitted to Scopa.
A further R22,58 million in irregular expenditure is the result of the Development Bank of Southern Africa’s alleged incorrect application of the preferential procurement policy framework when arranging departmental bids.
