Continuing weak financial control in provincial Health Departments – and lack of improvement in audits – has been slammed by the Treasury, with a warning that this poses significant fiscal risks, reports Business Day.
Five of nine Health Departments received qualified audits for the 2025/26 financial year, three received unqualified audits with findings, and only the Western Cape achieved a clean audit, with the the accumulation of accruals peaking at almost R25bn in 2024/25.
While the Treasury helped reduce this to R20.5bn in 2025/26 with additional allocations to the provincial equitable share, the remaining accruals indicate continued pressure within provincial health budgets, it said, noting that provinces collectively owed the National Health Laboratory Service R10.7bn.
In the Medium-Term Budget Policy Statement tabled last week, it added that despite contingent liabilities for medico-legal claims having declined from a peak of about R110bn in 2019/20 to R50.6bn in 2025/26, the figure continued to pose a “significant risk” to provincial health baselines.
This money continues to drain resources that could be used to deliver health services, said Treasury, noting that the government was considering reforms to how it managed and settled claims.
The suggestion from the South African Law Reform Commission is that lump-sum payouts for medical negligence are scrapped and replaced with a structured “pay as you go” settlement system instead. It has also proposed new laws to allow state to seek redress either through the courts or through a new administrative system overseen by the national health department.
The Treasury said improved management of commuted overtime would also help free up money to hire more doctors. “Efficiencies must also be identified in other areas … such as rural allowances, medical intern remuneration and remunerative work outside the public service,” it added.
Health Minister Aaron Motsoaledi previously announced a review of the remunerative work outside the public service (RWOPS) policy, conducted by a ministerial advisory committee that is expected to complete its work by April 2027.
See more from MedicalBrief archives:
NHLS flounders as Health Departments owe R11bn
MPs flags Health Department’s stalled audit progress
New laws proposed for radical overhaul of medico-legal payouts