Deep in the red

Massive overspending, poor budgetary controls and the chaotic implementation of a new salary structure for nurses have pushed provincial health budgets around the country deep into the red and put Finance Minister Trevor Manuel under intense pressure to ride to the rescue in his budget this Wednesday.

National treasury is mum about the scale of the overspending and any likely departures from its planned allocations for health, which is a key plank in the ANC’s election manifesto. But government officials who have insight into the ”MinMEC” process, during which budgets are thrashed out, say the overspend is well into billions of rands.

It will rise further if the planned Occupation Specific Dispensation for doctors is implemented and backdated — as doctors in the public sector expect — to July 2008.

A draft deal over the proposed new salary structures has been inked, a senior doctor involved in the negotiations said, but there is still considerable uncertainty about how and whether it will be funded.

No-one in government was willing to comment due to the imminent budget announcement and the extreme sensitivity of the issues. The consequences of the cash shortage in the provinces are already dire for HIV/Aids treatment, but are increasingly for other areas of healthcare too.

In the Free State, where the problems have been most serious, the provincial department issued a directive on November 14 that no new patients should be started on antiretroviral (ARV) treatment. Some existing patients have missed doses because of stock shortages, according to testimony collected by the Aids Law Project and the Treatment Action Campaign.

One of the key drugs in ARV treatment, Stavudine, has run out at treatment sites in Mpumalanga, according to doctors. Last week doctors in Durban complained that basic surgical supplies were unavailable at some of KwaZulu-Natal’s biggest hospitals.

The Treatment Care and Support Technical Task Team of the South African National Aids Council sent a communiqué on Tuesday to the council’s programme implementation committee identifying major health risks related to the ARV shortages and calling on the national Department of Health urgently to issue guidelines on dealing with the crisis.

The task team makes it clear that it believes the crisis in the Free State was caused by mismanagement. ”We understand that the budget for the procurement of ARVs has apparently been used up by the provincial authorities to fund other aspects of healthcare provision in the Free State. This apparent reallocation of funding, which seemingly was not ring-fenced for the ARV programme, appears to have arisen out of the desperate need of the province to make up shortfalls in the overall health budget allocation,” the communiqué says.

That view is backed by government officials who say there has been a stunning defiance of basic accounting procedures and the rules of the Public Finance Management Act in several provincial departments. But other officials said they have no evidence that grants earmarked for the HIV programme were spent elsewhere.

”The heads of department and the MECs concerned should be fired,” said another government official who is familiar with the issue.

Free State officials have repeatedly insisted that their problems are the result of inadequate budget allocations, with department head Pax Ramela saying in a November statement that the R189-million allocated by the national treasury for the province’s antiretroviral rollout was R63-million less than the province had budgeted for.

A source familiar with the department’s finances, however, points out that about R2-million of the cash earmarked for the programme remained unspent and the province had to budget on the basis of what it was allocated, not what it had asked for. Departments in trouble apparently include not just the Free State and KwaZulu-Natal, but Mpumalanga, Limpopo, Gauteng and the Eastern Cape. Despite the financial pressures on treasury Manuel will have to make the money available or people will die because of mismanagement.

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Nic Dawes Author
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