Presentation to Standing Committee on Appropriation on 1 st Quarter Expenditure for 2014/15 FY

1. Presentation to Standing Committee on Appropriation on 1st Quarter Expenditure for 2014/15 FY 10 September 2014 1

2. Table of Content • Departmental expenditure • Conditional Grants expenditure • Plans for improving expenditure performance in Infrastructure Programmes • Plans for improving expenditure performance in the National Health Insurance pilot programme • Report on implementation of cost containment measures

3. Departmental Expenditure for 1st Quarter Expenditure for 2014/15 FY

4. Departmental Summary Expenditure

5. Departmental Summary Expenditure • All Programmes Compensation of Employees are showing a degree of pressure mainly due to the implementation of the grading of Assistant and Deputy Directors.This matter has been raised with National Treasury and will most likely be addressed during the Adjustment Budget

6. Programme 1: Administration

7. Programme 1: Administration • Invoices for property payments (water, electricity, and rent) for the last quarter of 2013/14 were processed during 2014/15 after it was received from Public Works. 7

8. Programme 2: National Health Insurance, Health Planning and System Enablement 8

9. Programme 2: Reasons for Variances • The budget for compensation of employees is exceeded due to the appointment of a Health Attaché in Cuba • Slow spending on the indirect National Health Insurance grant. To this end a service provider was appointed in July 2014 to assist with the recruitment of GPs and test the Purchaser Provider split • WHO membership fees will be processed during third quarter of the financial year. • The SA Demographic Health Survey has started and still awaiting invoices from StatsSA and MRC 9

10. Programme 3: HIV and AIDS, Tuberculosis, Maternal and Child Health 10

11. Programme 3: HIV and AIDS, Tuberculosis, Maternal and Child Health • The vaccinations for the Human Papilloma Virus is scheduled for September - October 2014 and February – March 2015. For this reason no expenditure is reflecting yet on the budget of R200 million. • The printing of the general TB pamphlets in Braille was delayed at the Government Printing Works. 11

12. Programme 4: Primary Health Care Services: 12

13. Programme 4: Primary Health Care Services: • The transfers to the NGO’s are scheduled for the third quarter of the financial year. • Invoices are awaited from the GCIS for the No Tobacco Campaign. • Expenditure on Environmental Health Services is expected to increase with the transfer of Port Health Services to the National Department 13

14. Programme 5: Hospital, Tertiary Services and Human Resource Development 14

15. Programme 5: Hospital, Tertiary Services and Human Resource Development • Payments amounting to R11,5 million or 1.1% of the budget of R807 million for the indirect grant for Health Facilities Infrastructure were processed. Invoices are awaited from the DBSA in this regard. Indications are DBSA will claim R83 million for work done to date. • The Forensic Chemistry Laboratories advertised in the first quarter several tenders for the procurement of specialized laboratory equipment. Expenditure is expected during the 2nd and 3rd quarter 15

16. Programme 6: Health Regulation and Compliance Management 16

17. Programme 6: Health Regulation and Compliance Management • The transfer payment to the Compensation Fund is scheduled to be paid in the latter half of the year. • No invoices were received from the Auditor-General to be paid yet. • The Board for the Office of Health Standards Compliance was established on 4 June 2014. The recruitment of staff as well as the expected lease of a building should increase expenditure. The office will function independent and occupy premises outside of the NDOH. This is expected to be finalised in October 2014. 17

18. Conditional Grants Expenditure for 1st Quarter Expenditure for 2014/15 FY

19. Conditional Grants • Overall provincial CG spending was 21.2% or R6.4 billion against total budget of R30.1 billion • Major contributors to under spending are: • Comprehensive HIV/AIDS Grant- spent 20.2% • Health Facility Revitalization Grant – spent17.0% • National Health Insurance – spent 12.6% • Health Professions and Training Grant at 24.4% and National Tertiary Services Grant at 23.9% spent within the acceptable norm 19

20. Summary Expenditure Per Grant 20

21. Summary Expenditure Per Province 21

22. Eastern Cape Expenditure 22

23. Eastern Cape Variance Explanations 23

24. Free State Expenditure 24

25. Free State Variance Explanations 25

26. Gauteng Expenditure 26

27. Gauteng Variance Explanations 27

28. KwaZulu Natal Expenditure 28

29. Kwazulu-Natal Variance Explanations 29

30. Limpopo Expenditure 30

31. Limpopo Variance Explanations (1) 31

32. Limpopo Variance Explanations (2) 32

33. Mpumalanga Expenditure 33

34. Mpumalanga Variance Explanations 34

35. Northern Cape Expenditure 35

36. Northern Cape Variance Explanations 36

37. North West Expenditure 37

38. North West Variance Explanations 38

39. Western Cape Expenditure 39

40. Western Cape Variance Explanations (1) 40

41. Western Cape Variance Explanations (2) 41

42. Schedule 6 (Indirect Grants) • . 42

43. HFRG Indirect- Variance Explanations • Delay by the Implementing Agent in awarding the contracts on time resulting in the projects starting later than anticipated. Interventions by the NDOH have resumed and the matter was taken up with the National Health Council • Industrial strike action by the staff members, particularly in the Eastern Cape and Northern Cape Provinces 43

44. HPV – Variance Explanations • Only two doses are planned for the 2014/15 financial year. The first dose will take place during October month (2nd quarter). The expenditure will therefore reflect during 2nd and 3rd quarter reporting • Orders are in the process of being issued for vaccines worth R47m ,transportation and medical supplies • Anticipate to spend entire budget allocation by end financial year 44

45. NHI Indirect – Variance Explanations • Under spending caused by challenges in attracting GPs • Appointment of a Service Provider was finalised in July 2014 to assist with the recruitment and to test the Purchaser Provider split 45

46. Plans for improving expenditure performance in Infrastructure Programmes

47. Infrastructure • Situation analysis done on the Health Infrastructure service delivery in 2010, introduction of IUSS and achievement on improvising of infrastructure expenditure • Expenditure in the first quarter of 2014-15 F/Y and magnitude of the task ahead and focus area of infrastructure maintenance. • Capacitation Program at national and provincial levels for alignment with Infrastructure Delivery Management System (IDMS) • State of Readiness of provinces in relation to implementation of IDMS capacitation program • Restructuring of the Infrastructure Unit of the NDoH and establishment of Infrastructure Program Office. 47

48. Infrastructure Delivery Management System [IDMS] • The IDMS has been developed through the Infrastructure Delivery Improvement Programme. • It is the Government Management System for planning, budgeting, procurement, delivery, maintenance, operations, monitoring and evaluation of infrastructure. • It comprises a set of interrelating or interacting service delivery processes which transform inputs into outputs. • IDMS focuses on infrastructure planning, decision making points through the gateway system, construction procurement, portfolio management, project management, maintenance and operations.

50. IDMS Capacitating Strategy • National Treasury and National Department of Health have embarked upon implementation of the “Capacitation Framework for the Infrastructure Development Management System” in all nine Provincial Health Departments as well as in the NDoH. • All Nine Provincial EXCOs agreed on how the IDMS will be implemented in their respective provinces with clarity on the roles of Health Departments and the roles of Public Works Departments. It also clarified the Governance Principles and Service Delivery Principles applicable for Infrastructure Delivery in each Province.