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

2. 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.

3. 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.

4. 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

5. Conditional Grant MTEF Allocations

6. Health Conditional Grants

7. 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.

8. 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.

9. 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
Free State
153,646
189,630
222,648
Gauteng
399,604
541,119
715,850
Kwa-Zulu Natal
466,922
629,694
828,174
Limpopo
189,930
234,410
275,226
Mpumalanga
121,190
151,849
187,928
Northern Cape
74,091
91,444
107,365
North West
156,429
205,288
264,922
Western Cape
150,559
241,467
293,176
Total
1,945,575
2,585,423
3,276,186
6,011,758
7,432,962
8,764,609

10. Provincial Distribution of HIV AIDS Conditional Grant

11. Provincial Distribution of HIV AIDS Conditional Grant

12. 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.

13. 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.

14. 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.

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

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

17. 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

18. Provincial Distribution of Forensic Grant

19. Provincial Distribution of Forensic Grant

20. 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..

21. 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).

22. 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.

23. 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.

24. 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

25. Provincial Distribution of Revitalisation Grant

26. Provincial Distribution of Revitalisation Grant

27. 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.

28. 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.

29. 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.

30. 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.

31. 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

32. Provincial Distribution of NTSG Grant

33. Provisional Distribution of NTSG Grant

34. 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.

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

36. 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.

37. 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.

38. 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.

39. 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

40. Provincial Distribution of HPTD Grant

41. Provincial Distribution of HPTD Grant

42. 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.

43. 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.

44. 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.

45. 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.

46. 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.

47. 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.