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South Africa: Gauteng Health Makes Progress in Paying Suppliers
Source: wwwsanews.gov.za
Source Date: Monday, December 12, 2016
Focus: Electronic and Mobile Government, ICT for MDGs, Knowledge Management in Government, Internet Governance
Country: South Africa
Created: Dec 12, 2016

“In order to address the budget pressures, the department has implemented measures to assist with the processing of payments within 30 days. These includes the implementation of the cost containment measures caused by accruals, litigations, increased number of patients and areas where, we pay more than the benchmark in the industry such as gas, diesel and building costs,” said the department.
The department has also established a budget committee which is responsible for reprioritisation of the budget where funds will be redirected from non-core items and areas where there is under spending to areas where pressures are being experienced.
Meanwhile, the department has managed to resolve the basis for the 2014/15 revenue qualification which related to the Auditor General (AG) not being able to obtain sufficient appropriate evidence for accrued departmental revenue amounting to R2 547 110 000 and its impairment amounting to R1 404 162 000. 
“The department through the assistance of the South African Institute of Chartered Accountants (SAICA) was able to ensure credibility of revenue disclosure and provide evidence to support the amount of revenue disclosed,” the department said. 
The department has further intensified efforts to collect revenue with revenue from patient fees increasing by R24.9 million during the current financial year compared to the same period in the last financial year.
There is an overall increase of R13.3 million in revenue collection as compared to same period during the 2015/16 financial year.
Irregular Expenditure 
In line with the updated guideline on irregular expenditure, the department has established an irregular expenditure committee to assess all reported cases of irregular expenditure related to consignment stock and to assess the merits of each case and to recommend relevant corrective action for each case.
The committee is currently assessing previous year irregular expenditure but will prioritise the irregular expenditure relating to the 2016/2017 financial year. The department is further in the process finalising the consignment stock contracting that will also ensure that Irregular Expenditure does not occur.
Accruals 
The department has implemented mechanisms to reduce accruals by curtailing expenditure which they can do without but ensure that patient care previous year accruals do not affect current year budget as payments are only made during the current year. This leads to the budget of institutions being reduced by the amount of accruals paid which in turn leads to budget pressures.
National Health Laboratory Service (NHLS) 
The department said it is looking forward to the payment of monies owed by NHLS to the value of R1.5 billion excluding interest. Amounts that were overcharged previously could have been used to pay invoices of service providers over the past financial years. 
Medical Supply Depot (MSD)
During the 2015/2016 financial year the MSD awarded the distribution of medicine contract to a new service provider through a competitive bidding process.  
MSD has further implemented a register to track compliance in terms of tax clearance certificates and is engaging suppliers to ensure compliance. MSD has in the past few years managed to reduce irregular expenditure from more than R106 million to R31 million. 

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