DA KZN:  DoH Scopa hearing reveals looming financial storm

Mark Steele, MPL and Francois Rodgers, MPL

DA KZN Spokesperson on Scopa / DA KZN Spokesperson on Finance


The crisis looming within KZN’s Health Department is no longer just one of governance and leadership.


Figures disclosed at yesterday’s Scopa hearing with the DoH reveal a looming budget crisis with the disputed debt with the National Health Laboratory Service (NHLS) having grown to an estimated R1.6 billion.  The Department itself estimates that it is currently facing legal liabilities of potentially R5.9 billion, most of these cases of medical negligence.

Another issue is the public private partnership to supply equipment and management services at Inkosi Albert Luthuli Hospital.  In 2012 the DoH estimated that this would cost R5.8 billion to the end of contract.  This estimate has since ballooned to R6.5 billion from April 2013 to the end of the contract in 2017 as a result the weakening rand value against foreign currencies.

The total Department of Health appropriation for the 2013/14 financial year was R29.2 billion so these figures present collectively a huge challenge to the province’s future budget, especially in a time of falling provincial allocations and budget austerity.

According to the Auditor-General the Supply Chain Management section of the Department is also not properly monitoring compliance with the relevant legislation.  This is borne out by the department having received a qualified audit for, amongst other reasons, its failure to fully disclose irregular expenditure, of which R1.2 billion was reported as having occurred in the 13/14 financial year.   The issue of not fully disclosing irregular expenditure has been around for three of the last four years.  This suggests that far from getting a grip on the problem it is simply going on unchecked.

Another issue is the fact that the Department is in the hands of an acting HOD and acting CFO is a major concern.  The department’s former HOD is now acting, having had her contract extended but not renewed.  Meanwhile, both positions are waiting permanent appointments.

With a financial storm of huge proportions heading for the DoH and it will need more than acting leaders to provide the necessary solutions.

It is common cause between the DA and ANC that KZN doesn’t receive the budget share it requires to provide adequate frontline services.

The DA supports any proposal which will force national treasury to re-assess the way in which it calculates the equitable share formula which determines how much each province gets in the national budget so that KZN gets a fairer share of the total allocation.

Time is running out for the government of KZN to come up with a solution failing which service delivery standards will definitely come under threat.