The lack of consequence management in the National Department of Health for its complete lack of movement on its audit outcome for more than 10 years has been slammed by Parliament’s Portfolio Committee on Health, which is now demanding urgent governance and financial management improvements, reports The Citizen.
Also in trouble is the National Health Laboratory Service (NHLS), which was unable to even submit an audit, and with an irate Health Minister now appointing a special task team to investigate.
The committee questioned the department on its 2025/26 annual report as part of Parliament’s Budgetary Review and Recommendations Report process, with committee chairperson Faith Muthambi addressing Health Minister Aaron Motsoaledi directly.
“There has been no movement on your audit outcome for a decade – and the concerning lack of consequence management has repeatedly been highlighted by the Auditor-General,” she said.
The committee also pointed to 32 material irregularities identified across the health sector: the report showed that R187m in irregular expenditure remained unresolved, with R179m under investigation.
A separate R106m connectivity contract was referred to National Treasury and the Hawks.
The department achieved 33 of its 47 targets, a rate of only 70.2%, yet somehow managed to spend almost its entire budget.
Muthambi had earlier said the committee would look beyond spending alone.
“We will determine whether public resources have been utilised effectively, whether value for money has been achieved, and whether governance, accountability, and performance are translating into tangible improvements in health outcomes and the quality of services provided to the public.”
Members raised medicine stock-outs, long waits for specialist care, and poorly maintained hospitals; the department blamed manufacturing disruptions, regulatory compliance actions, and congestion at the Port of Durban.
Muthambi said patients bore the cost.
“Our people depend on these health sector services. They trust the system and use public healthcare services, and it is our responsibility to ensure that they receive the services they need,” she added.
Motsoaledi admitted the NHLS, which failed to submit its 2025/26 annual report to Parliament on time, was in trouble, and that the problem was “one of governance.”
He has since appointed a three-person team to tackle the crisis.
Business Day reports that after years of relative stability, financial management of the facility appears to have sharply deteriorated, prompting the Minister’s intervention. It is also grappling with mounting debt owed by provincial Health Departments and has come under fire for outsourcing tests to the private sector.
It slid from an unqualified audit in 2022/23 to a qualified audit the next year, and received a disclaimer in 2024/25. This year it completely missed the statutory deadline for submitting its annual financial statements for 2025/26 to the office of the auditor-general and has yet to finalise its annual report.
A disclaimer is the worst possible audit outcome as it means the office of the AG has declared its records to be in such disarray that it cannot form an opinion.
“The NHLS has very serious governance problems, which need our attention urgently,” the Minister told the Portfolio Committee on Health, adding that he had appointed former NHLS board chair Eric Buch, compensation commissioner Barry Kistnasamy, and the Health Department’s deputy DG health regulation and compliance, Anban Pillay, to help right the troubled ship.
Buch’s term as chair ended in October 2024, while Kistnasamy is credited with turning around the Compensation Commission for Occupational Diseases, which was in complete disarray when he stepped in in 2013.
Last week the portfolio committee resolved not to consider a presentation from the NHLS on its annual report because its financial statements had yet to be audited.
“These are symptoms of a delinquent board that cannot perform its functions,” Muthambi said.
The committee added that the NHLS was unwilling to act on its recommendations and advice and proposed a formal inquiry into the board.
“I think there is more that requires closer scrutiny, and we will set aside a day for this purpose,” Muthambi said.
NHLS spokesperson Mzi Gcukumana said the organisation expected to complete its 2025/26 annual report by November. “The regression reflects longstanding weaknesses in internal controls. Corrective measures are under implementation, but some require sustained, multi-year institutional reform,” he said.
The audit findings related mainly to weaknesses in financial and supply change management and did not call into question the scientific accuracy of laboratory tests, he said.
The Treasury recently told parliament provincial debt to the NHLS stood at R10.6bn in June, a significant increase on the R7.8bn owed by provinces at the end of 2023/24.
The largest debt balances were Gauteng (R3.5bn), KwaZulu-Natal (R1.2bn) and Eastern Cape (R1bn).
Gcukumana said the provincial debts posed a serious threat to the financial sustainability of the NHLS and its long-term ability to deliver services.
See more from MedicalBrief archives:
NHLS flounders as Health Departments owe R11bn
Complex vaccine process earns Health Department qualified audit