1. Health Systems Governance in the Eastern Cape Province: An analysis of Audit Findings Thokozile Mtsolongo Researcher Public Service Accountability Monitor (PSAM) Rhodes University

2. o The Eastern Cape healthcare system has been faced with key challenges over many years which have resulted in unmet priorities and poor health outcomes o While improving health systems governance has been recognised as a critical element for strengthening health systems, there exist chronic governance failures in the Eastern Cape Department of Health (ECDoH) that have compromised this o This paper seeks to explore how governance failures within the ECDoH have been persistently revealed in Auditor General and internal audit reports of the ECDoH and what impact these failures are said to have had on the overall health outcomes in the EC Problem Statement

3. Definition of Health Systems Governance o The WHO defines health system governance as a national function entailing that ‘ensuring strategic frameworks exist and are combined with effective oversight, coalition-building, the provision of appropriate regulations and incentives, attention to system design and accountability

4. Health Systems Governance o Governance in health systems is about developing and putting in place effective rules in the institutional arena for policies, programs, and activities related to fulfilling public health functions so as to achieve health sector objectives o It is equally important to ensure that health systems function optimally so services can be delivered; and health professionals be accountable to the public; government o Priorities cannot be met if institutions do not function and scarce resources are wasted which may result in bribes, corruption, mis- procurement which undermine health care delivery

5. Health Care Production Function o Health care provision depends on efficiently combining financial resources, human resources, and supplies, and delivering services in a timely fashion distributed spatially throughout a country. o That is : Health outcomes =(L, K, G) where: o L encompasses management, medical personnel etc o K infrastructure, equipment and financing etc o G is governance and institutional quality etc

6. Definition of Auditing o For the purpose of this paper, we define auditing as a systematic and independent examination of books, accounts, statutory records, documents and performance of the organisation to ascertain how far the financial disclosures present a true and fair view of that concern. o Audit opinions used for this paper are primarily drawn from the Auditor General Reports of the Eastern Cape Department of Health, Internal Audit Committee Reports of the Eastern Cape Department of Health and literature

7. Self-introspection: Internal Audit Findings of ECDOH Audit YearInternal Audit Concerns Raised over the years 2005Areas of improvement noted but generally systems of internal control not entirely adequate and effective for year under review; 2006Some areas of improvement noted, but system of internal control not entirely effective for year under review 2007Lack of capacity within internal audit unit 2008- 2009Internal controls found to be ineffective by internal and external audit for year under review; internal audit capacity improved for year under review 2010Controls found to be ineffective by both internal and external audit for year under review; internal audit capacity improved for year under review 2011Internal audit reported that internal controls partially adequate and in certain instances in effective for year under review; internal audit unit operating with less than 50% of approved capacity; low levels of responses to internal audit recommendations by management 2012Capacity constraints still remain with internal control unit; internal controls found to be partially inadequate in certain instances and ineffective during year under review 2013Internal audit unit under capacitated; Internal audit work reported that controls partially adequate and effective during year under review 2014

8. Summary of Internal Audit Findings o Assessment of internal audit findings have showed the following trends over the years: – That although effort has been made to achieve general improvements of internal controls, certain challenges still persisted such as: Internal controls that are partially adequate and effective; Less than 50% operating capacity of internal audit unit; Management slow to implementing recommendations made by audit unit

9. External Audit Findings (Auditor-General South Africa) Audit YearRecurrent Themes from External Audit Outcomes over the yearsExternal Audit Finding 2005Control deficiencies within internal control environment of ECDoH; weak and ineffective management to supportDisclaimer of Opinion 2006Weak or no mechanisms in place to ensure prompt resolution of findings from audits and other reviews evidenced by inadequate and sometimes inappropriate or incomplete management comments received on exception reports issued during the year and repetition of concerns raised over the years Adverse Opinion 2007Inefficiencies in the systems of internal control environmentAdverse Opinion 2008-- 2009An environment that is conducive to good accountability and services delivery through positive attitude, integrity, competence and ethical behaviour has not been established within the Department; leadership is not taking the audit committee seriously as evidenced by: requests for management information not being submitted – meetings are not being attended by all relevant officials – recommendations made are not being implemented Disclaimer of Opinion 2010ECDoH not established environment and culture conducive to good accountability and service delivery through positive attitude, integrity, competence and ethical behaviour made worse by fact that top management positions within department have not been filled and many changes n top management in year under review Qualified Opinion 2011No adequate steps taken to address and correct fruitless and wasteful expenditure identified in prior years’ auditsQualified Opinion 2012ECDoH did not have adequate systems in place to identify and disclose all irregular expenditure incurred during year under review as required by section 40 (3)(b)(i) of the PFMA; no effective accountability at all levels and no consequences for poor performance Qualified Opinion 2013Significant deficiencies in internal controls regarding performance management were identified in the current and previous years that resulted in material misstatements in the reliability of performance information; slow responses to audit message and effective leadership remains a challenge – lack of effective oversight by senior leadership to ensure accountability and adequate consequences for poor performance and transgressions resulting in repeat financial, performance information and compliance findings raised during audit Qualified Opinion 2014Significant internal control deficiencies; slow response to audit messageQualified Opinion

10. Emerging Trends from Audit Outcomes o Analysis of audit outcomes revealed as trends in health governance to emerge from the last 10 years include: Challenges found in leadership structures and functions of the ECDoH; Persistence of weak organisational culture to strengthen performance management; ‘Trickle down effect’ of weak and many times ineffective and inadequate system of governance to the lower levels of health care delivery/district levels; Opportunities to improve on challenges that have resulted in poor audit outcomes have been sparingly taken up by management structures of ECDOH; Weak internal control systems of the ECDOH have not been adequately addressed ; Audit outcomes should have acted as a mirror through which the ECDOH must have sought to improve and strengthen mandate over time in order to set in place firm paths of its development

11. Conclusion o The audits show that the health systems governance in the ECDoH is characterised by: Weak oversight mechanisms; Weak leadership, inclusive of political leadership; Limited management capacity; Limited human resources; Lack of commitment and political will to resolve standing challenges o The consequence of the above is poor health care services and outcomes in the EC province o Both national and provincial institutions must take accountability for the continuation of these challenges: (i.e National Department of Health, Parliament, EC OTP, Eastern Cape Provincial Legislature, EC Treasury, ECDoH etc)