MBOMBELA – The Mpumalanga Department of Health has not been following supply chain management (SCM) processes for years. As a result it incurred irregular expenditure of R1,9 billion in the 2014/15 financial year, says the Auditor General (AG) in his general report on provincial audit outcomes.
It amounted to 21 per cent of its total spend for the year. The reason, according to the AG, is that the SCM unit has been without a head for six years, while the position of head of the strategic planning as well as the monitoring and evaluation units had also been vacant for more than two years.
The new 2015/16 financial year started in April last year. In June the department was temporarily placed under administration, but to date it has not been able to appoint people in these positions.
Health spokesman Mr Dumisani Malamule said posts were advertised last year and processes of shortlisting and interviews, together with competency assessments were conducted.
“However, in some of the positions such as the director of SCM, an appointment letter was issued but the candidate refused (in favour of a counter offer). In some of the positions no suitable candidates were found, which forced the department to readvertise the posts.”
Malamule said processes were underway and appointments, including that of a chief director of integrated health planning and a director of monitoring and evaluation “will be made soon”.
The AG found “the extent of non-compliance with SCM legislation… requires urgent attention. All of the irregular expenditure was the result of acts of non-compliance in 2014/15 and 2013/14.”
In 2014/15 R1,914 billion was due to procurement without a competitive bidding or quotation process, R369 million due to non-compliance with procurement process requirements and R20 million due to non-compliance with legislation on contract management.
“In addition the auditee failed to investigate the irregular expenditure identified in the previous year and to also assess transactions not selected for auditing to determine whether further irregular expenditure should be disclosed,” said the AG.
It added that the department’s senior management did not sign performance contracts.
Malamule said as part of the department’s turnaround strategy all senior managers have signed performance agreements for 2015/16. Asset, finance and risk management are included and the HOD conducts performance assessments for each senior manager every six months.
“The department has moved with speed to develop an action plan to resolve all issues (assets, accruals, commitments and irregular expenditure identified by the AG) and governance structures have been appointed to ensure that the action plan is monitored and implemented.”
Health was exempted from the moratorium placed on filling funded vacant posts in the provincial government last year. According to health’s annual reports for 2014/15, vacancies for funded positions stood at 12 033 at the end of last year.
The executive committee temporarily withdrew the permission pending the department paying off its accrued accounts from 2014/15.
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Health says it has managed to decrease its vacancy rate from 38,5 per cent to 3,7 per cent in the 10 months since the beginning of the financial year. The accruals amounted to R357 million, according to the department’s second quarter performance report.
The amount has since been settled, while Malamule says financial misconduct is being investigated.
Ms Jane Sithole, DA MPL and the opposition in the legislature’s spokesman on health, says it is extremely worrying that the AG’s recommendations, which come over years, are not corrected.
“There is no control. You can’t work without monitoring and evaluation. The irregular expenditure must be investigated.
“It is the people who are relying on the services who are suffering. It should be of great concern to the general public.”
