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DEPARTMENT OF HEALTH
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DEPARTMENT OF HEALTH

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  1. DEPARTMENT OF HEALTH GAUTENG HEALTH TURNAROUND STRATEGY: TOWARDS EFFECTIVE SERVICE DELIVERY, STRENGTHENING PRIMARY HEALTHCARE AND A CLEAN AUDIT IN 2014. BRIEFING TO THE PORTFOLIO COMMITTEE ON HEALTH 05 SEPTEMBER 2012

  2. OUTLlNE • Background • Current Context • Identifying Key Challenges • Objectives • Gauteng Health Turnaround Strategy in Detail • Summary • Way Forward • Recommendations

  3. MANAGEMENT SUMMARY The challenges and plans described in this presentation reflect the inputs of GPG, the MoA with National Government, and the contribution of the Department of Health’s employees and stakeholders in the Turnaround Strategy Workshop. • The department is facing a serious situation, particularly regarding financial management. • A lot of progress has been made recently • However, we now need a systematic approach to sustain and build on this progress • This Turnaround Strategy sets out the interventions required to achieve this with concrete activities and timelines. • Indications are that it will take a number of years to completely turn the Department around • The on-going support of the Gauteng Provincial Government in this process is acknowledged. • The Executive Authority through the Accounting Officer takes responsibility for the successful implementation of this turnaround strategy.

  4. Gauteng POA Analysis 2011/2012: Health RECENT CONTEXT • Achieved: 61% Good progress: 29% • Some progress: 10% No progress / No report: 0%

  5. IDENTIFYING THE KEY CHALLENGES The Auditor General (AG)’s findings and the Premier’s Budget Council (PBC) helped to identify the key challenges facing the Department: The Auditor General’s audit opinions 2009-11 focussed on financial management and information: • Tangible assets (Qualified 10/11) • Revenue and receivables (Qualified 10/11) • Employee benefits (Qualified 10/11) • Information deficiency (Disclaimer - predetermined objectives 10/11) • Evidence for major variances (Disclaimer - predetermined objectives 10/11) The Premier’s Budget Council Oct 2011 highlighted: • Delegation to hospital CEOs - especially the four central hospitals - to improve efficiency in infrastructure maintenance • Procurement and management concerns at the MSD • The management and outcomes of the EMS • Medico-legal and litigation issues; and corruption • The provincialisation process • Human Resources issues , including rationalisation and controls on overtime.

  6. The negative cycle that stops us reaching our objectives

  7. THE KEY CHALLENGES TACKLED IN THIS STRATEGY Through the Auditor General (AG)’s findings and the Premier’s Budget Council (PBC) we have identified eight key problem areas: • Finance and financial management • Human resources • District health services for Primary health care • Hospital management • Medico-legal services and litigation • Health info management and health info systems (HIS) • Communication and social mobilisation • Health infrastructure development We then held a 2-day workshop on 1 and 2 March in order to draw on the experience and expertise of colleagues and stakeholders from throughout the health system to understand these problem areas in more detail.

  8. THE OBJECTIVES OF THE TURNAROUND STRATEGY • As well as responding to the obligations of the MoA and implementing the decisions of the PBC and the Provincial Finance Lekgotla, the interventions outlined in this turnaround strategy should lead to: • More effective utilization of available resources by the department; • The clearing of debt and accruals; • Delivery within allocated budgets; • Improvement of health outcomes; • Entrenchment of the desired organizational culture and enhanced internal discipline throughout the organization; and • Improved public and partner confidence

  9. The positive cycle we need

  10. WORK THAT IS ALREADY UNDERWAY (1 of 4) • There is already work underway to begin to address some of these challenges on a number of fronts. The turnaround plan incorporates this work and builds on it. • The National-Provincial MoAhighlighted the need for work on: • Gauteng Provincial Government: adhering to the PFMA; recovering all debts owed to the Department within FY12/13 and developing a sustainable reimbursement mechanism. • National Government: supporting efficient administration of central hospitals; Health Information Systems (HIS); strengthening PHC services; National Treasury assistance in supply chain • Provincial Extended Finance Lekgotla – November 2011. • Top-slicing of the Gauteng Provincial Budget; reallocation of surrendered spending to Health; quick-win infrastructure projects fast tracked; • GDF to develop a process to tackle accruals; allocation of infrastructure budget only to projects that are ready

  11. WORK THAT IS ALREADY UNDERWAY (2 of 4) • 5% top slice health personnel budget 2012/13 • GDF and Health to collaborate the ensure that the central hospitals are functional • 3% top slice (hair –cut) in provincial Equitable Share budget to finance, and set aside the Provincial Revenue Fund for paying accruals • GDF and Health to manage debt and collect about R800 million owed • GDF and Health to formulate an action plan for clearing accruals • Engage service providers with regards to their payments and negotiating uninterrupted supply of goods and services • Stringent conditions to be put in place to ensure that no further accruals are incurred after the intervention • Clearing of accruals will be managed with Treasury. There is already work underway to begin to address some of these challenges on a number of fronts. The turnaround plan incorporates this work and builds on it (continued)

  12. WORK THAT IS ALREADY UNDERWAY (3 of 4) • Accruals have been reduced as follows: • Accruals as at 31 March 2012: R3.6 billion • Accruals as at 10 April 2012: R1.8 billion • Accruals as at 13 June 2012: R374 million • Accruals as at 28 June 2012: R21 million • Medical Supplies Depot • R 874m paid in April 2012 • The total paid from 1 April to 28 June 2012: R4.2 billion • The above includes current year and prior year invoices. • About R190M waiting to be cleared before declaration There is already work underway to begin to address some of these challenges on a number of fronts. The turnaround plan incorporates this work and builds on it (continued)

  13. WORK THAT IS ALREADY UNDERWAY (4 of 4) There is already work underway to begin to address some of these challenges on a number of fronts. The turnaround plan incorporates this work and builds on it (continued) • KPMG have been engaged to undertake a diagnostic project which will: • Support the Department in developing a detailed understanding of the root causes of the Department’s challenges; • Support the move from short-tem crisis management to longer-term development and provide a solid base for improvement, including skills transfer; and • Support the implementation of the Turnaround Strategy

  14. THE TURNAROUND STRATEGY IN MORE DETAIL 14

  15. 1. Finance and Financial Management 15

  16. Finance and Financial Management Note PowerPoint 2007 has a problem with indentation in text tables and text boxes. Once text has been deleted from the cell the formatting of the bullets is also removed. To fix this you will need to use the format painter to copy the formats of each level (line by line) from the panel below:

  17. Finance and Financial Management Note PowerPoint 2007 has a problem with indentation in text tables and text boxes. Once text has been deleted from the cell the formatting of the bullets is also removed. To fix this you will need to use the format painter to copy the formats of each level (line by line) from the panel below:

  18. Finance and Financial Management

  19. Overview of cost containment plan • An analysis was conducted and it identified the following Top 14 cost drivers of the budget over the MTEF period. • The top 14 cost drivers of the department account for R6.5b of the R6.8b goods and services budget for FY 2012/13

  20. Budget 2012/13: Top 14 cost drivers

  21. Finance and Financial Management

  22. Expenditure analysis • The department has spent R7.156 billion as at 30 June 2012. • This amount is 29% of the overall original budget (R24.5b). • The reason for the over expenditure is the payment of accruals carried over from the previous financial years.

  23. Comparison of expenditure as at June 2011 and June 2012 (2)

  24. Finance and Financial Management

  25. Finance and Financial Management

  26. Finance and Financial Management

  27. Finance and Financial Management

  28. Finance and Financial Management

  29. 2. Human Resources 29

  30. Human Resources

  31. Human Resources

  32. Human Resources

  33. Human Resources

  34. 3. District Health Services For Primary Health Care 34

  35. District Health Services

  36. District Health Services

  37. District Health Services

  38. District Health Services

  39. 4. Hospital Management 39

  40. Hospital Management

  41. Hospital Management

  42. 5. Medico-legal services and litigation 42

  43. Medico-legal services and litigation

  44. Medico-legal services and litigation

  45. 6. Health Information Management and Health Information Systems 45

  46. Health Information Management and Systems

  47. Health Information Management and Systems

  48. Health Information Management and Systems

  49. 7. Communication and Social Mobilisation 49

  50. Communication and Social Mobilisation