1. Presentation to the Select Committee on Appropriations Health Conditional Grants Expenditure as at 31 December NATIONAL TREASURY
04 May 2010

2. Health – Provinces as at 31 December 2009
Spending is at R65.5bn or 76% against R86.2bn adjusted budget
Main budget increased by R4.2bn – mainly for ICS and OSD; and G&S
28.4% of total provincial adjusted budgets
Increase of R8.4bn or 14.7% compared to same period of the previous year
MP – 31.5%; NC – 28.2%; EC – 20.4%;
Projected overspending of R5.8bn (mostly on Personnel; G&S) in 6 provinces
Bulk in KZN (R2.3bn) and EC (R1.6bn)
Personnel spending at R36.9bn or 77% (R47.9bn adjusted budget)
Projected overspending of R3.2bn in 6 provinces (KZN – R1.3bn; EC – R1.3bn)
EC – Mainly due to the implementation of HROPT
Goods and services (includes Medicines, etc.) at R21.1bn or 82.9% (R25.5bn adjusted budget)
Projected overspending of R2.8bn in 7 provinces (GP – R1.3bn; KZN – R881.9m)
Projected underspending of R70.6m
Low y-on-y growth rate in LP (-1.1%)
Capital spending at R5.2bn or 59.7%
Projected underspending of R404.6m in 4 provinces (GP – R202.7m)
Low rate of capital spending in GP (45.6%) and FS (46.4%)
NW (90.3%) and KZN (70.5%) reflects the highest rate of capital spending in health
Transfers at R2.3bn or 67.1% against R3.4bn adjusted budgets

3. Health – Provinces as at 31 December 2009

4. Health – Provinces (Over)/Under Expenditure

5. Health – Provinces Prog 2: District Health Services

6. Health – Provinces Prog 4: Provincial Hospital Services

7. Health – Provinces Prog 5: Central Hospital Services

8. Health – Provinces “Compensation of Employees”

9. Health – Provinces “Goods and Services”

10. Health – Provinces “Non-Personnel, Non-Capital”

11. Health – Provinces “Payments for Capital Assets”

12. CG: Comprehensive HIV and Aids

13. CG: Comprehensive HIV and Aids

14. CG: Forensic Pathology Services

15. CG: Forensic Pathology Services

16. CG: Health Disaster Response (Cholera)

17. CG: Health Disaster Response (Cholera)

18. CG: Health Professions Training and Development

19. CG: Health Professions Training and Development

20. CG: Hospital Revitalisation

21. CG: Hospital Revitalisation

22. CG: National Tertiary Services

23. CG: National Tertiary Services

24. CG: 2010 World Cup Health Preparation Strategy

25. CG: 2010 World Cup Health Preparation Strategy

26. Concluding Comments Issues to pay attention to going forward:
Better budgeting for the health sector. “Living within means”, in respect of:
Personnel (e.g. KZN and EC)
Goods and Services (e.g. GP)
Capital spending
Processes for determining salary adjustments (OSD) must involve provinces and be tied to available resources
National department must support and guide provinces in implementing major policy initiatives
Hospital Revitalisation Programme is now the worst spending grant across all of government (as at 31 March 2010 the total projected under-expenditure is over R813m)
Certain provinces show consistently poor financial performance across all grants (e.g. Mpumalanga)
There have been numerous examples of violations of the Division of Revenue Act within the Health sector. The number of violations are higher than any other sector in government and involve both provinces and the national department.
Poor cash management a major down-fall of the sector
SCM issues affecting capital spending need to be addressed by provinces.
Proper planning will improve performance of grants.