The Eastern Cape Department of Health, which owes suppliers R4.8bn, is in an increasingly fragile financial position – with critics saying there is no political will to remedy the situation.
The unpaid bills are for vial supplies, fleet services, phone bills, medicine, medical gas and municipal services for the province’s ambulances and hospital services – the landline bill alone is R36.5m.
The outstanding amounts represent 15% of the total allocation of R30.1bn allocated to the Health Department by the Eastern Cape Treasury in this year’s budget. Daily Maverick reports that most of the allocated money goes towards covering salaries.
The accruals have doubled since a mid-year report, which at that stage showed it also owed millions to Life Esidimeni for frail care delivered to severely disabled children (R94.4m), the Department of Transport for government fleet services for its ambulances (R241m), and R39m to the public-private partnership in the province.
The accruals were estimated at around R2.7bn then, and have now doubled.
Shortfalls
At the time of the mid-term report, the department owed about R86m to medicine and chemotherapy providers, and R25m to Afrox. Another R32m is owed to various travel agencies.
“Various attempts were made to pay critical suppliers with limited resources. These included medicine, diesel and patient food. Unfortunately, the money was not enough to cover all suppliers. Negotiations were also held with Telkom representatives,” said department spokesperson MK Ndamase.
In September 2023, Health Minister Dr Joe Phaahla visited the Eastern Cape for “an opportunity to be briefed on challenges facing the provincial Health Department and discuss possible interventions”.
All that happened after this, however, was that Dr Rolene Wagner, the highly respected head of the department, was moved to the Office of the Premier and replaced with an acting head.
At the time, Wagner said the department had managed to reduce the rate of increase in accruals and payables from 16% (in 2021/2022) to 2% in the 2022/2023 financial year.
In his budget speech earlier this month, provincial MEC for Finance, Mlungisi Mvoko, described the department’s turnaround plan as “a work in progress”.
Growing collection of bills
In answer to a parliamentary question earlier this month, Phaahla said the Eastern Cape Health Department failed to spend R62m due to delays in medico-legal settlements (these were not the result of the department’s actions, though) but also rolled more than R24.8 in unspent grants falling under the National Tertiary Services Conditional Grant and R6.1m that was unspent in the district health programme.
He added that the department did not spend R30.5m in “voted funds” (funds allocated in the budget).
Non-critical funds
The DA’s Jane Cowley questioned why the department did not use funds from non-critical programmes – like health infrastructure or health education – to settle accounts that directly affected not just the functionality of the Health Department but people’s lives.
She blamed poor human and financial resource management, and cited the 30 staff at Orsmond TB Hospital earning full salaries despite no patients being there since October 2022.
“The accumulated amount in excess of R100m so far is because the situation has been completely mismanaged.”
She said senior management and leadership should be held to account. “However, there is simply no political will to do so. So the patients and those dependent on this broken and corrupt government will continue to suffer.”
See more from MedicalBrief archives:
MTN cuts services to Eastern Cape Health, Afrox threatens to suspend
Patients suffer as Eastern Cape ambulance crisis remains unresolved
Top health experts rally behind ousted Eastern Cape Health boss