Presented on behalf of the MEC for the Limpopo Department of Health and Social Development the Honorable MR. SC Sekoati by the Acting HOD Dr. M Nkdimeng on 17th January 2006

capital expenditure of the department with an average of 53% of the funds used being provided from the conditional grants and 47 % from Equitable Share.

The equitable share has provided only 20% of the funds for buildings with 80% being sourced from the conditional grants.

The Hospital Revitalization grant together with the Provincial Infrastructure Grant has provided the bulk of the capital used for facilities upgrades, maintenance and provision of new clinics.

This trend is continued with over the MTEF.

The conditional grants has shown a steady increase over the past four years to grow by 68% or R242.7 million between 2001/02 and 2004/05, excluding the grant for Primary Schools Nutrition Programme that has been transferred to Education as from April 2004 onwards.

The allocation again showed a sharp increase from the R407 million in 2005/06 to R614.7 million for the current financial year.

This is mainly due to the increase for HIV & AIDS (R48m) as well as Hospital Revitalization (R106m) with all other grants also growing.

A roll over of R34.345 million was also received in the current year to make a total of R 649 million available.

The MTEF sees a total of R564 million for 2006/07 and R616 million for 2007/08 being available to the department.

The Hospital Revitalization that reduces to R142m from the current R213 m. These additional funds were allocated due to the departments ability to utilize the grant in the past.

An amount of R 10 m has been surrendered for the current year.

A full transfer was received for the budgeted amount available for the period 2001/03 to 2003/04.

In the 2004/05 year the department did not receive R15.372 million of the R407.4 million allocated by receiving only R392.7 million or 96.2% from National Health via the Provincial Treasury.

The transfers were stopped when expenditure for the third quarter was not according to the expected level.

This resulted in the department surrendering an amount of R 15.372 million less than the actual under expenditure at year end, as these funds were not received and could thus not be paid back.

The Provincial Treasury did roll over the funds to 2005/06

The department did spend an average of 88.6% of the available budget on conditional grants over the past four financial years

This includes the MTEF allocation as per DORA as well as Adjustment Estimates and Roll-overs

The expenditure of the total available budget for the period was as follows:

01/02 = 78.1 % 02/03 = 95.5%

03/04 = 86.8% and 04/05 = 91.6%

The expenditure achieved demonstrates the departments ability to utilise the conditional grants despite the challenges of :

- procurement issues regarding items on tender,

- normalization of expenditure that is captured on the equitable share - development and implementation of approved Business plans

- limiting conditions imposed on the use of the funds

The department has managed to increase the expenditure per quarter as follows:

- 6.27% = R40.67m in the first quarter

- 22.1% = R 106.391m in the second quarter

- 43.5 % = R 241 860 in the third quarter

The inability of the department to secure Tenders for the purchase of Medical Equipment has resulted in limited expenditure to date on the following grants:

. Hospital Management and Quality Improvement at 37.26%,

. National Tertiary Services at 28.76%

· The tenders for Medical Equipment was finalised in November and expenditure is expected to substantially increase in the last quarter as the business plans include the assets required.

Equipment has been ordered and deliveries are awaited

The business plans for HIV & AIDS was adjusted in an attempt to ensure that service delivery is speeded up, the revised plans were forwarded to National Health in November 2005.

Some R20 million was transferred to NGO's during October 2005, after proper screening the NGO's ability to deliver on the part of the Comprehensive HIV&AIDS programme that they are expected to deliver service on.

Personnel Expenditure is not expected to increase as health professional posts catered for are not being filled as anticipated = under spending of R 11 m or 8.2 %.

Expenditure increased from 7.7 % in Sept. to 45.3 % in Dec 2005

The expenditure should be increased once a system to account for medicines and tests used on HIV&AIDS related treatments in the hospitals is agreed upon.

Identifying the medicines used for the treatment of Aids Patients remains to be a challenge as all medicines are procured at a central point on the equitable share and have to be journalised to capture the expenditure under the Conditional Grant.

The following funds have already been committed I and other orders will be placed following the adjustment of the plan-

- R3.5 m for nutritional supplements at 8 ARV sites

- R5 m for nutritional supplements centrally - Feb 06

- R3.2 m for equipment

- R13 m for VCT training and HBC kits

- It is estimated 21.5 % of the NHLS costs are HIV&AIDS related

- Purchase of containers for office space of R 3.4 m via the Do Education Tender is being finalised

- R3 to purchase an available building for Resource Training Centre as per the Comprehensive Plan

The participation on the National Tender RT 289 has not been available to the department.

R 2 m for food supplements committed in November, purchased via quotations.

R 1.5 m for equipment already delivered, invoices awaited.

An additional R 2 m for equipment has been ordered.

Future participation on RT 289 is being negotiated to streamline procurement.

Vitamin A supplements (tablets) is being procured via the Pharmacy Depot to comply to contract requirements including the Bar Coding, to the value of R 700 000 to year end.

The use of multi vitamins was also slowed down due to contract

requirements, R 1.5 m yet to be procured.

Skills development for food service management personnel to take place in February 2006 for R 2 m and the programme will continue into the next financial year.

Backlog of R 600 000 in Greenery projects in Bohlabela district due to un-availability of the system.

R 3 m yet to be spent by year end on all Greenery projects.

HPTD Grant

Expenditure on the HPTD Grant has been above the average and no

problems is foreseen in spending the funds on service delivery in this regard, as equipment tenders are now in place.

The training of management is ongoing but availability of management for training over extended periods are restrictive.

Personnel costs are below norm due to vacant posts.

The purchase of equipment R 2.8 m has not taken place-

- Computers

- Filling systems - Delay in the implementation of the Information and Records Management tender

- lack of equipment tender for medical equipment that was only finalized in December

Purchase of equipment has been delayed due to the unavailability of a

tender that is now being finalised, has resulted in low expenditure patterns but an amount of R 32 m has since been committed.

It is envisaged that the full budget for Equipment of R 46 m will be utilised

Personnel costs for Specialists employed on the equitable share has been identified to be funded from this grant for the first three years of their employment and the Grant does carry these costs.

Expenditure - Cholera I Malaria

The full amount of R 2.718 m received as a roll over will be spent during the year on

- Pesticides for Malaria control

- Vehicles for Vector control have been ordered

- In response to the recent instances of reported Malaria cases R1.26m has been committed against the grant.

The department surrendered Ri 0 m to National Health with a request to increase the allocation for the 2006/07 year with the same amount due to the projects being completed in the following financial year.

This grant is fully committed but expenditure is dependant on the progress made by contractors.

The capacity of emerging contractors together with the availability of building materials especially Building Bricks has been a constraint that impacts on the timeous completion of the current contracts Upgrading of the filing system at Revitalised Hospitals to the value of R 4.6 m has been ordered.

The department Is responsible for the planning of the hospital revitalisation projects while Dept of Public Works takes control of the project implementation

It often occurs that contractors are late to take over sites due to delays beyond the control of the Dept of Health