R500m irregular and wasteful spending by Gauteng Health Department

5 September 2016

The Gauteng Health Department has been criticized by the Auditor General for R500 million in irregular and fruitless and wasteful expenditure, as well as poor controls and failure to follow procedures in a number of key areas.

This is revealed in the A-G's report on the department for the year ended 31 March which was tabled last week in the Gauteng Legislature.

While the A-G gave an unqualified report to the department, he criticized several aspects including the following:

- R493 million irregular expenditure

- R7.4 million fruitless and wasteful expenditure

- R1.2 billion payables which exceeded the payment term of 30 days

The A-G found that there was not sufficient audit evidence that goods and services with a value below R500 000 were procured with the required price quotations, and treasury regulations requiring competitive bids for goods and services over R500 000 were not adhered to.

There was also poor revenue management as "effective and appropriate steps were not taken to collect all money due", and interest was not charged on patient debts as required by treasury.

Furthermore: "the accounting officer did not exercise adequate oversight responsibility to ensure complete and accurate performance reporting. This resulted in material findings on the annual performance report and non-compliance with key laws and regulations."

I am concerned that legal claims against the department have grown by R3.8 billion in the last year to an astounding total potential liability of R16.5 billion - R13.45 billion of this is for medico-legal claims, R1.6 billion is for civil claims, and R1.5 billion for premature termination of contracts.

Whilst there has been some improvement in the department, the A-G's findings show that there is still a long way to go to achieve good management and effective use of funds.

Issued by Jack Bloom, DA Gauteng Shadow MEC for Health, 5 September 2016