NATIONAL DEPARTMENT OF HEALTH

1. NATIONAL DEPARTMENT OF HEALTH PUBLIC HEARINGS ON THE DIVISION OF REVENUE BILL, 2010 Presentation to the Standing Committee on Appropriations Thursday, 25 February 2010

2. NATIONAL DEPARTMENT OF HEALTH DIVISION OF REVENUE ACT(DORA). • Department manages 5 conditional grants plus one new Disaster Response grant (Cholera- Limpopo only in 2009/10 financial year) • Conditional Grants have been part of the health system since its inception in 1998 • Health conditional grants account for = +/- 95% of total NDoH budget.

3. NATIONAL DEPARTMENT OF HEALTH The six (6) conditional grant allocations are for: • HIV and AIDS ( Schedule 5) • Forensic Pathology Services ( Schedule 5) • Hospital Revitalization ( Schedule 5) • National Tertiary Services ( Schedule 4) • Health Professions Training & Dev ( Schedule 4) • New – Health Disaster Response (Cholera)only for 2009/10 financial year • Schedule 4: Allocations to provinces and municipalities to supplement the funding of programmes or functions funded from provincial or municipal budgets. • Schedule 5: Specific purpose allocations to provinces.

4. Conditional Grant MTEF Allocations (R’000).

5. Conditional Grant MTEF Allocations

6. Health Conditional Grants

7. NATIONAL DEPARTMENT OF HEALTH Comprehensive HIV and AIDS Conditional Grant Purpose of the grant: • Enables health sector to develop an effective response to HIV & AIDS. • Supports prevention programmes, VCT, PMTCT, PEP, HCBC, Step Down Care • Subsidizes funding for ARV treatment.

8. NATIONAL DEPARTMENT OF HEALTH Comprehensive HIV & AIDS Conditional Grant Allocation criteria: • Antenatal HIV prevalence. • Estimated share of AIDS cases. • Populations post-demarcation. NB. Additional funding from Treasury is shared equitably.

10. Provincial Distribution of HIV AIDS Conditional Grant

11. Provincial Distribution of HIV AIDS Conditional Grant

12. NATIONAL DEPARTMENT OF HEALTH CHALLENGES – HIV / AIDS. • Inadequate capacity to fully manage the grant: • Key staff eg. Finance, M&E for data management & validation. • Both at national & provincial level. Overall management of the grant: • Compliance issues. • Timely submission of non financial performance reports.

13. Remedial Action. • To fill vacant posts at both National and Provincial level. • Reinforce financial management and monitoring capacity - each province to have additional financial manager. • Improve the information management systems and data collection: - Currently reviewing 10 different systems in place across the provinces( done by MRC). Report expected end of April’10.

14. 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 service for the criminal justice system.

15. NATIONAL DEPARTMENT OF HEALTH Forensic Pathology Services Grant Allocation criteria: • In accordance with the National project Plan, as modified for demarcation and inflation.

16. NATIONAL DEPARTMENT OF HEALTH The Forensic Pathology Services Grant. - Only received inflationary increases. - The lifecycle of the grant terminates in 2010/11.

18. Provincial Distribution of Forensic Grant

19. Provincial Distribution of Forensic Grant

20. NATIONAL DEPARTMENT OF HEALTH C HALLENGES – FORENSIC PATHOLOGY • Transition of government mortuaries from SAPS to DOH is still not completed. • Funding for upgrading and building of new mortuaries not adequate. • The building costs gone high since the projected projects. • Poor contract workmanship – some resulted in court cases and delayed project completion, including identification of new sites..

21. Remedial Action. • Improve the reporting mechanisms and systems. • Co-funding from the equitable share to be considered to close the funding gap. • Buildings to be monitored by the engineers (from the Revitalization grant).

22. NATIONAL DEPARTMENT OF HEALTH Hospital Revitalization Grant Purpose of the grant: • Plays a key role in transforming and modernizing infrastructure, health technology, equipment & M&E 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.

23. NATIONAL DEPARTMENT OF HEALTH Hospital Revitalization. Allocation criteria: • Based on projected cash flow figures for approved projects over MTEF period. • Includes expenditure on infrastructure, health technology, organisational development & quality improvement • Project based allocation approach is aligned with equity based approach over long term.

25. Provincial Distribution of Revitalisation Grant

26. Provincial Distribution of Revitalisation Grant

27. NATIONAL DEPARTMENT OF HEALTH CHALLENGES – REVITALIZATION. • Poor management of contractor by implementing agent. • Poor performance by contractors that lead to poor spending for the grant. • Provincial red types/ spending moratorium that affects payment of the contractors on time.

28. Remedial Action - Revitalization • The Department is moving towards implementation of norms and standards such as uniform designs for buildings ( clinics, community health centers and hospitals). • Currently working on the employment of engineers for each province. The national one is in place already. • We are working with Treasury to improve financial management.

29. 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 services in tertiary hospitals. • 26 hospitals/complexes of hospitals are funded. • Western Cape and Gauteng receive the largest proportion of the grants these provinces provide the highest proportion of tertiary services.

30. 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.

32. Provincial Distribution of NTSG Grant

33. Provisional Distribution of NTSG Grant

34. NATIONAL DEPARTMENT OF HEALTH C HALLENGES – NTSG. • Grant framework based on SLA & not business plan. • Output based on patient utilization only. • Despite inadequate in terms of reporting, grant cannot be withheld (schedule 4). • NTSG-funded personnel are not linked on Persal.

35. Remedial Action • Improving the business plan format to enhance provincial accountability for expenditure linked to the targets.

36. NATIONAL DEPARTMENT OF HEALTH Health Professions Training and Development Grant. Purpose of the grant: • To funds the costs associated with the undergraduate & post graduate teaching & training of health professionals. • Development and recruitment of medical specialists in under-served provinces. • It also enables the shifting of teaching activities from central to regional and district hospitals.

37. NATIONAL DEPARTMENT OF HEALTH Health Professions Training & Development Grant. Allocation criteria: • Specific allocation to previously disadvantaged provinces to develop specialist & teaching capacity. • Target allocation criteria is being reviewed as a process of grant reform. • Based on a historical approach derived from medical students distribution.

38. NATIONAL DEPARTMENT OF HEALTH The Health Professions Training and Development Grant only received normal inflationary increases. • The grant is under review for integration with the Department of Education.

40. Provincial Distribution of HPTD Grant

41. Provincial Distribution of HPTD Grant

42. NATIONAL DEPARTMENT OF HEALTH CHALLENGES – HPTD. • Funding has not increasing due to the current review. • Under spending by some provinces. • Late submission of reports therefore inadequate compliance with DORA.

43. NATIONAL DEPARTMENT OF HEALTH Health Disaster Response Grant (Cholera - Only allocated for 2009/10 FY) Purpose of the grant: • To control the Cholera outbreak and reduce the morbidity and mortality due to the communicable disease. • To reimburse provinces for costs incurred during 2008/09.

44. Conditional Grants Monitoring and interventions. • Monthly reports received from provinces in line with the In-year-monitoring (IYM) system. Significant improvement in submission deadlines. • Monthly IYM reports forwarded to NT by NDOH - on time. • Quarterly Performance reports submitted. Challenges still exist with submission deadlines. The matter is being addressed.

45. Conditional Grants Monitoring and interventions. • Withholding of funds for non compliance with DORA or under expenditure whilst intervention is being put in place. • Regular visits to provinces for support and monitoring. • Access to donor funding for funding gaps.

46. Conditional Grants Monitoring and interventions. • Concerns raised by the Auditor General in previous audits are being addressed. • Recent discussions with the Auditor general officials indicate that there is some improvement in the monitoring and management of the grants specifically the Hospital Revitilization. • Stricter monitoring is being implemented. • The Department is also establishing a new Financial Provincial Support unit to strengthen monitoring and support role to the provincial departments of health. Implementation will be in 2010/11.

47. 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. • The Department is actively working with Treasury to develop a new methodology for resource allocation.