Proper financial management needed for effective health services

By Harold McGluwa, MPL, DA Provincial Chairperson:

The following is an extract from the speech delivered today by the DA’s spokesperson on Health, Hon. Harold McGluwa, during the debate on the department of Health in the Northern Cape Provincial Legislature.

It is undeniably the right of every person to have access to affordable and excellent health care. The Democratic Alliance supports the vision of the department of Health to deliver health service excellence for all. We want to see that the department manage its financial resources to the benefit of all communities in the Province, especially the poorer communities that rely solely on the public sector for health care.

For service delivery to have the desired impact, the department must ensure that its financial management is above reproach.

The Democratic Alliance notes and welcomes the progress made in the financial management of the department, which shows an audit outcome that have slowly begun to improve. We encourage the department to be guided by the Public Finance Management Act and Treasury’s Regulations so that we can continue to see improvement in audit outcomes. It is worrying that the department receiving the second largest allocation; however remains one of the largest contributors to unauthorised, irregular, fruitless and wasteful expenditure in the province. We are not looking for a massive change overnight, but we do need a commitment to consistent improvement.

Financial management must be about more than simply ticking the boxes, but if a target is set, there must be a clear understanding of its consequences. The department’s strategic plan shows that it targets to have only 2% of the budget lost due to fruitless and wasteful expenditure; this is an enormous amount from the total budget.

We cannot afford to lose this amount anywhere in the public sector, let alone in the delivery of health services! The DA also urges the department to be serious about the consequences of non-compliance. If there are instances of non-compliance with the Public Finance Management Act, like the incurring of irregular expenditure, there must be investigaritons and people must be held accountable.

For the next financial year, the Democratic Alliance would like to see that the department plans and implements feasible targets for financial management. Targets must be backed by implementable strategies. We would like to see that the department improves its internal capacity to monitor its financial management, which was highlighted as a concern during the budget presentation.

A plan to improve management of payments, for instance, does exist within the department. Yet total accruals owed by the department stands at R178 million as of 31 January 2015. The department needs to seek the capacity to monitor the implementation of its improvement plan. Accruals have a significant effect on the department’s cash flow, and in turn, on service delivery. A department without the funds to procure the resources cannot deliver an excellent service to anyone.

It is important that the department utilises its available resources in a cost-effective and efficient way. The department emphasised in the budget that it has not received the necessary resources to implement all of its plans. And it is certainly true that some crucial services remain seriously underfunded. Let me use the example of the emergency medical services. While an estimated R50 million is needed to replace the aging fleet, the department only received R30 million for purchasing new emergency medical services vehicles.

But, Honourable Speaker, the department needs to ensure that money last and bring those to book who fails to use resources efficiently.

It’s important to fine-tune the relationship between objectives, responsibilities, and to provide appropriate incentives, to improve efficiency.

Honourable Speaker, we will begin to see excellence in the health service once targets are consistently monitored and financial management is improved.

The DA conducted an oversight visit to Kimberley Hospital in March this year, which was indeed a pleasure and certainly a positive impartation. I want to congratulate Kimberley Hospital on record for their preparedness and provisions for backup electricity supply. This is the difference a good and quality CEO can make.

Honourable Speaker, it is a matter of concern that the implementing agent for the rollout of backup generators remains  the IDT. The department has indicated that it is dissatisfied with the performance of the IDT. The Democratic Alliance urges the department to monitor the rollout of backup generators to ensure that the project deadlines are met within budget and on time.

With that in mind, Honourable Speaker, the Democratic Alliance welcomes the roll-out of standby generators at 16 health care facilities over the next three years at a cost of R28 million. Clinics remain the face of the department for most communities. We cannot close clinic doors if Eskom fails to keep the power on.

Honourable Speaker, I have sincere sympathy for the fact that the MEC inherited the Mental Hospital in its current state, which has become a synonym for postponements and inflated costs. The mental health hospital is now 89 months past its original opening date of December

2007 and is set to cost roughly six times more than the original contract price.

We welcome the political commitment from MEC Mac Jack to get the mental health hospital open as soon as possible.

In the past year, the Democratic Alliance has had a sound relationship with the department. We have engaged positively with the department on a number of issues, including the appointment of a specialist doctor in Sutherland and the provisioning of equipment for health facilities in Calvinia. I trust that the friendly spirit will continue in the year ahead and that the department will remember that we raise our concerns not to be difficult, but to benefit our communities.

The Democratic Alliance supports the budget vote of the department.

I thank you.