Gauteng health department places moratorium on new projects to stabilise finances
The Gauteng department of health has placed a moratorium on all new construction projects in the 2018-19 financial year so as to stabilise its finances.
The announcement was made by Gauteng health MEC Gwen Ramokgopa in a portfolio committee meeting in the provincial legislature on Tuesday. Ramokgopa presented the third quarterly report for the 2017-18 financial year to the committee, explaining all operational issues facing the department.
As at end of the third quarter‚ the overall expenditure was R32.35bn or 77.1% of the total adjusted appropriation for 2017-18 financial year. This expenditure is above the set target of 75% and is mainly due to payment of accruals of about R4bn through the current year’s budget.
At the current rate‚ the department is projected to incur between R6.5bn and R7bn in accruals by the end of the current financial year. This is almost the same as the previous financial year.
Ramokgopa explained the department’s dire financial situation. "On an annual basis‚ the accruals have been building up by about R2bn to R2.5bn. [In the 2014-15 financial year]‚ the accruals were about R1.9bn. [In the financial year of] 2015-16, about R4bn‚ [in] 2016-17 they were about R6.9bn. The funding has not caught up with the population increase.
"In 1999‚ the population was 7.5-million‚ now the population is 15-million in Gauteng. This does not include those patients not accounted for by Stats SA. Indeed‚ the department is grossly under-funded for the services it delivers‚" she said, adding that just last year the patient head count stood at 22-million people.
A special team of experts has been established to deal with the department’s finances. "The executive sub-committee on health finances is mandated to assist the provincial government to understand what the underlining factors for the department [incurring] such high accruals over a period of time are. Why has this been [cyclical], because even in my previous life as deputy minister of health‚ we did intervene in 2012 and insisted that the Gauteng provincial government should bail out the Gauteng department of health‚ and they did? But we can see the building up of accruals again‚" Ramokgopa said, noting this "is a direct risk to the health system. The health system is really under severe pressure".
She said the department had looked at how it could maximise the current infrastructure it has by improving its health facilities to at least meet set minimum standards. "That work has been done; we are now in a phase of developing detailed plans. Once we have detailed plans we will go to the market and get teams to focus on infrastructure [upliftment] and not piecemeal projects happening in our facilities.
"For now‚ to be able to contain costs‚ we will have to go to the public and explain the circumstances we are in. If we do not contain the costs or don’t get additional finances‚ the recovery of the health system is at risk. We have decided to postpone new infrastructure projects to be able to accommodate the financial pressures that are there."