Provincial Health has gone bust

THE Eastern Cape provincial Health Department has gone bust with debts of R1.8 billion, and cannot pay creditors or nursing staff their special payments until the new financial year. Health Department spokesperson Sizwe Kupelo yesterday said the department now had to apply for an overdraft in terms of section 39 of the Public Finance Management Act to continue operating. As part of a dramatic clean-up of its finances it will also disband its existing bid evaluation committees, he added.

The Daily Dispatch has learnt that the shock announcement is a forerunner to further drastic action when heads may roll and resignations are expected. It was also announced that the province’s suspended head of emergency services, Shanks Maharaj, had resigned. He was suspended last year following a Dispatch exposé of the alleged abuse of an air ambulance, used to fly officials to Bloemfontein to watch a Confederations Cup soccer match. Maharaj resigned before facing a disciplinary hearing. Asked whether criminal steps could follow to account for missing funds, Kupelo said: “We will not tolerate maladministration; any person found guilty, no matter who it is, will be dealt with. We take corruption seriously.”

The ANC’s Mlibo Qoboshiyane said they had been aware that over-expenditure on occupation specific dispensation (OSD) payments had caused the budget shortfall; the department would have to approach the national Treasury to ensure services did not collapse. DA health spokesperson Pine Pienaar said t he DA warned in December that the department would run out of funds due to un- mandated payments of some R800 million in backpay to provincial employees and R250m in OSD payments. “This ongoing mismanagement will cripple health services in the province,” he said

United Democratic Movement leader Bantu Holomisa said he had “never heard of a department going bankrupt” and called for all creditors to be paid. Cope’s Nkosifikile Gqomo said MEC Phumulo Masualle and his counterpart at Finance, Mcebisi Jonas, must disclose exactly what had happened. Kupelo said the department planned a major overhaul of its tendering system. On the instructions of Masualle and newly appointed superintendent-general, Dr Siva Pillay, all delegated authorisation of payments had been withdrawn with immediate effect. Existing salaries would be paid out as normal. All pharmaceutical companies had already been paid and there was “enough stock until April”.

Kupelo warned of further labour unrest following the go- slows by nursing staff as a result of disputes over OSD payments. Their union plans to meet with the department on Friday.

Source: Daily Dispatch