NATIONAL DEPARTMENT OF HEALTH

1. NATIONAL DEPARTMENT OF HEALTH Presentation to the Standing Committee on Appropriations 4th Quarter Expenditure Report for the 2009/10 Financial Year 13 August 2010

2. 2009/10 Expenditure Outcome. • The final appropriation for the National Department of Health for the year 2009/10 was R18,4 billion. • Of the R18,4 billion appropriated, an amount of R16,7 billion was a provision for Conditional Grants. This is 91% of the total allocation for Vote 15. • Actual total expenditure amounted to R17,9 billion. • The under expenditure amounted to R457 million, which is 2% of the total appropriated funds.

3. Budget versus Expenditure Per Economic Classification.

4. Programmes Budget VS Expenditure.

5. Summarized Reasons for Under Expenditure. • The under spending of R4,7m (2%) in Programme 1 (Administration), was due to the delays experienced in the relocation to the newly upgraded Civitas Building resultant from incomplete processes between the contractors and the Public Works Department. Although the funds are committed, the payments could not be made during the year. • Programme 2( Strategic Health Programmes) under spent by R24m (0.46%) due to the delayed delivery of a portion of the H1N1 and Polio vaccines procured out of the country.

6. Summarized Reasons for Under Expenditure. • Programme 3 ( Health Planning & Monitoring) under spent by R11m (3%) due to the initial slow spending for the new cluster of Office of Standards Compliance. Capital funds also showed an under spending due to the delays related to the Civitas building for IT acquisitions. • Programme 4 ( Health Human Resource Management and Development) under spent by R7,3m (0.4%) due to the late payment of the costs related to the audit of the Nursing Colleges project. The project was completed. Payment had to be done in the 2010/11 financial year.

7. Summarized Reasons for Under Expenditure. • Programme 5 under spent by R402m (4%) attributed to withheld funds from the Hospital Revitalization conditional grant funds for some provinces ( Free State R66m, KZN R160m and MP R154m). • Mpumalanga: • Rollover funds of R153,5 million were approved by the National Treasury. • The conditions were that an audit must be conducted (to show that the province will be able to spend the rolled over funds by end of the financial year). • The R153.5 million was withheld by NDOH due to the above mentioned.

8. Summarized Reasons for Under Expenditure. Revitalization withheld funds continued: • Free State • There were challenges with payments that were expected to be made from the suspense account, as a result that delayed the whole process of payments to contractors. • There was a delay in advertisement of tenders due to cost containment measures which were put in place provincially. • KZN • In terms of Organizational Development expenditure, there is under-performance due to non approval of critical posts. • An award for the Hlabisa hospital has been delayed as a result of IDT not following the correct tender procurement procedures. • Rietvlei hospital access road project tender was delayed because of consultations that had to be made with the provincial Department of Transport.

9. Summarized Reasons for Under Expenditure. • Programme 5 : Health Services. • There was also delays in the finalization of the Primary Health Care audit tender and the District Health Information system project. • The late commitment of funds for the 2010 EMS capital equipment for the readiness at provincial level, for the information management system ( equitable share was utilized for 2010 EMS during April 2010). • The under expenditure in Programme 6 amounting to R5,2m (6%) was attributed to outstanding accounts to be claimed from the Department of International Relations and the delay in establishing the new South African Health Products Regulatory Authority body.