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

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.

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.

Conditional Grant MTEF Allocations (R’000). 2007/8 2008/09 2009/10 2010/11 2011/12 2012/13 HIV 1,945,575 2,585,423 3,476,186 6,011,758 7,432,962 8,764,609 NTSG 5,321,206 6,075,634 6,614,442 7,398,000 7,798,878 8,188,822 HPTD 1,596,189 1,675,999 1,759,799 1,865,387 1,977,310 2,076,176 FORENSIC 551,383 466,878 491,662 556,962 590,380 619,899 REVITALISATION 1,906,629 2,882,663 3,186,303 3,880,667 4,172,292 4,380,910 DISASTER(CHOLERA)   50,000

Conditional Grant MTEF Allocations

Health Conditional Grants

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.

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.

Province 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 Comprehensive HIV and Aids Grant Eastern Cape 233,204 300,522 380,897 690 941 859 157 1 013 609 Free State 153,646 189,630 222,648 433 583 528 208 615 594 Gauteng 399,604 541,119 715,850 1 277 683 1 609 901 1 922 644 Kwa-Zulu Natal 466,922 629,694 828,174 1 498 811 1 877 593 2 241 412 Limpopo 189,930 234,410 275,226 514 896 623 404 720 009 Mpumalanga 121,190 151,849 187,928 383 646 484 439 578 384 Northern Cape 74,091 91,444 107,365 182 306 208 307 232 350 North West 156,429 205,288 264,922 475 838 593 638 702 510 Western Cape 150,559 241,467 293,176 554 055 648 314 738 097 Total 1,945,575 2,585,423 3,276,186 6,011,758 7,432,962 8,764,609

Provincial Distribution of HIV AIDS Conditional Grant

Provincial Distribution of HIV AIDS Conditional Grant

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.

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.

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.

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

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

Name of allocation Province 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 Forensic Pathology Services Grant Eastern Cape 68,135 58,129 61,214 69,345 73,506 77,185   Free State 30,422 31,198 32,855 37,218 39,451 41,423 Gauteng 83,749 77,472 81,584 92,421 97,966 102,864 Kwa-Zulu Natal 150,809 127,757 134,538 152,406 161,550 169,627 Limpopo 39,195 33,457 35,233 39,913 42,308 44,423 Mpumalanga 52,628 42,003 44,233 50,107 53,114 55,769 Northern Cape 24,185 19,169 20,187 22,868 24,240 25,452 North West 22,835 22,158 23,334 26,433 28,019 29,419 Western Cape 79,425 55,535 58,484 66,251 70,226 73,737 Total 551,383 466,878 491,662 556,962 590,380 619,899

Provincial Distribution of Forensic Grant

Provincial Distribution of Forensic Grant

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..

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).

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.

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.

Name of allocation Province 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 Hospital Revitalization Grant Eastern Cape 246,750 282,288 238,611 360,660 386,048 406,910   Free State 90,419 202,753 247,886 378,426 421,883 442,745 Gauteng 503,284 718,312 755,190 798,609 805,967 837,259 Kwa-Zulu Natal 268,433 285,666 449,558 500,815 551,698 572,560 Limpopo 148,172 248,540 206,931 323,425 375,672 396,534 Mpumalanga 107,843 244,322 304,441 331,657 360,557 381,419 Northern Cape 172,966 246,364 340,197 420,218 410,892 431,754 North West 176,966 254,030 254,644 326,303 374,074 405,366 Western Cape 191,796 400,388 388,845 440,554 485,501 506,363 Total 1,906,629 2,882,663 3,186,303 3,880,667 4,172,292 4,380,907

Provincial Distribution of Revitalisation Grant

Provincial Distribution of Revitalisation Grant

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.

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.

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.

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.

Name of allocation Province 2007/08 2008/09 2009/10 2010/11 2012/13 National Tertiary Services Grant Eastern Cape 428,912 468,088 509,429 557,137 587,327 617,542 Free State 480,945 545,350 642,835 659,469 695,204 730,413 Gauteng 1,959,399 2,186,619 2,328,301 2,561,154 2,699,936 2,839,027 Kwa-Zulu Natal 789,578 903,297 983,948 1,102,585 1,162,331 1,222,468 Limpopo 79,649 150,168 176,871 257,314 286,029 Mpumalanga 54,995 66,621 81,410 91,879 96,858 101,876 Northern Cape 110,775 152,120 173,241 225,948 250,912 North West 81,409 117,317 134,416 179,280 199,130 Western Cape 1,335,544 1,486,054 1,583,991 1,763,234 1,894,680 1,941,425 Total 5,321,206 6,075,634 6,614,442 7,398,000 7,798,878 8,188,822

Provincial Distribution of NTSG Grant

Provisional Distribution of NTSG Grant

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.

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

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.

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.

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.

Name of allocation Province 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 Health Professions Training and Development Grant Eastern Cape 133,944 140,641 151,362 160,444 170,071 178,730   Free State 97,143 102,000 110,755 117,400 124,444 130,930 Gauteng 581,741 610,828 614,812 651,701 690,803 725,310 Kwa-Zulu Natal 201,992 212,092 222,425 235,771 249,917 261,860 Limpopo 76,032 79,834 88,759 94,085 99,730 103,913 Mpumalanga 57,081 59,935 71,839 76,149 80,718 85,208 Northern Cape 43,122 45,278 58,304 61,802 65,510 68,583 North West 65,692 68,977 78,608 83,324 88,323 93,522 Western Cape 339,442 356,414 362,934 384,711 407,794 428,120 Total 1,596,189 1,675,999 1,759,798 1,865,387 1,977,310 2,076,176

Provincial Distribution of HPTD Grant

Provincial Distribution of HPTD Grant

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.

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.

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.

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.

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.

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.