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After R45bn in irregular expenditure over 10 years, KZN...

Maverick Citizen

ANALYSIS

After R45bn in irregular expenditure over 10 years, KZN health department ill prepared for Covid-19 storm

Between 2009/2010 and 2018/2019, the KZN health department incurred irregular expenditure totalling R45.06bn.(Photo: Adobestock)

Lack of consequence management, a history of dodgy tenders, feuding between unions and political leadership, R45bn in irregular expenditure over 10 years, well-documented evidence of fraud, corruption and blatant incompetence, and more than a decade of qualified audit opinions, do not inspire confidence in the KZN health department’s ability to handle the Covid-19 surge.

Ideology and the ability to talk the political talk has, until now, served the KwaZulu-Natal Department of Health MEC, Nomagugu Simelane-Zulu, well.

A dyed in the wool cadre, Simelane-Zulu is fluent in speaking all of the tongues the ANC has on offer, but her management will be tested as KZN battles through its Covid-19 surge, led by a department that has been stripped of credibility and ability due to decades of mismanagement, incompetence and graft.

During the department’s budget vote this year, Simelane-Zulu told the KZN Legislature that “contrary to perceptions that the private sector provides a superior level of care, a disproportionate number of the Covid-19 deaths came from the private sector”.

She said this raised “serious questions about the quality of care rendered, as well as [the private sector’s] preparedness to deal with an epidemic of this magnitude”.

Government infectious disease specialists had to lend “their support and expertise to the private sector” she added.  

But the truth is that most Covid-19 patients in the province have opted for private care if care is needed, and if they can afford it, unwilling to try one of KZN’s state-run hospitals or “flu clinics” – which have been established at hospitals to screen for Covid-19. 

It was at one of these flu clinics that 67-year-old Sibusiso Khumalo died over the weekend, having been admitted with chest pains and difficulty breathing. The clinic was a quasi tent-like structure erected in the parking lot of the Northdale Hospital in Pietermaritzburg, where temperatures plummet in winter. 

As of July 26, 78% of all hospitalised Covid-19 patients in KZN were in private health facilities.

Khumalo’s daughter told News24 that her father’s death was “noted as hypoxia”, but that his Covid-19 test results were still outstanding. 

To her credit, Simelane-Zulu immediately suspended the hospital’s medical and nursing managers. An investigative team from the University of KwaZulu-Natal was asked to probe the incident. Its report is expected today (Friday). 

As of July 26, 78% of all hospitalised Covid-19 patients in KZN were in private health facilities.

In April, the MEC closed two private hospitals for up to six weeks after they reported more than 80 positive Covid-19 cases among staff. But six months into the pandemic, staff infections are as common as they were expected to be, with over 200 at one point recorded at the government-run Inkosi Albert Luthuli Central Hospital (IALCH).

To date, no KZN public sector facility has had to endure nearly the same period of complete shutdown that the private hospitals did, and none has been subjected to the overt animosity from Simelane-Zulu that those private facilities were.

The MEC croons the gospel according to the proposed National Health Insurance (NHI), believes the provincial health department is capable of handling (nay, excelling with) the NHI, and is quite clearly suspicious of any private medical service or help, although she pays lip service to the idea – a necessity in her position, given the chances of investment from those greedy capitalists.  

To date, it remains unclear if she has signed service level agreements (SLAs) with private sector hospital groups should help be needed to manage Covid-19 cases. Netcare’s director for strategy and health policy, Melanie da Costa, told Daily Maverick: “The SLAs are either signed or well advanced in the Western Cape, Gauteng, Limpopo, North West, Eastern Cape and KwaZulu-Natal provinces.” 

Netcare’s cryptic response is matched by the arrogance of the provincial health department, which didn’t answer the same question, or any others submitted by Daily Maverick, including whether an SLA was in place with private pathology laboratories.

The provincial DA says no such agreement exists.

The two state testing facilities – one at Albert Luthuli and another at Addington Hospital – can conduct 2,700 tests per day, according to the DA. The party says the current backlog sits at 9,500 samples.

This has led to delays of up to 14 days for those relying on the state to receive their Covid results. In contrast, the private sector takes anything from 24 hours to a maximum of five days for tests to be conducted and results returned. 

Government patients are reportedly waiting for anything between 10 days and two weeks for their test results.

A glance at the last four days of testing, as found on the department’s Facebook page, shows that on some days, less than 1,000 tests are conducted.

It is difficult to ascertain how many tests the private sector laboratories in KZN undertake, as they are unwilling to share the data, but considering their turnaround time, they should have the capacity to assist the public sector.

Waiting 10 to 14 days for a result makes testing pointless as the patient is either taking up a bed in a Covid-19 facility or is continuing with his or her daily life and possibly infecting others.

Still, Simelane-Zulu remains a giddy cheerleader for her department, defending it at any opportunity.

And unlike her predecessor, who now heads up the national oversight committee on health despite myriad controversies, she has the drive and political ambition necessary to clean house, but it will be a painful, embarrassing cleanup that should – if done correctly – lead to numerous dismissals, and criminal and civil cases being laid.

Covid-19 has been a kind of twisted blessing for KwaZulu-Natal health – a nasty, deadly one, but a blessing nevertheless. It has enabled the department to temporarily shift focus from things like unacceptably high maternal mortality rates at government facilities – currently at 77 per 100,000, down from 100 per 100,000 in 2018/2019.

Too, focus on its medico-legal claims – in excess of R20 billion – can be temporarily eased as it deals with the virus, as can dealing with an estimated 40% understaffing at public facilities.

An honest look at KZN Health over the last decade reveals a sobering image of a department that has been run into the ground via blatantly ineffectual leadership and corruption.

The department is also trying to introduce a paperless patient records system into an arena with a paltry record-keeping capacity.

The decisions taken by the provincial department in the coming days and weeks will have deadly consequences for KwaZulu-Natal’s response to the virus.

And concern remains among insiders that years of mismanagement, corruption and poor consequence management have drained the department of key skills and personnel who may have been able to lead it through this period.

An honest look at KZN Health over the last decade reveals a sobering image of a department that has been run into the ground via blatantly ineffectual leadership and corruption.

Last month, a long-running legal dispute concerning a tender awarded by the department – under suspicious circumstances – finally came to an end.

In March 2015, the over R1-billion five-year contract was awarded to Resultant Finance (Pty) Ltd, making the company the middleman for the leasing of all “medical and nonmedical equipment” to the value of R5,000 or more for the department.

Red flags were raised soon after the award, specifically that it took just seven weeks to complete – from advertisement to award.  

The award was the last contract signed off by then-HOD Dr Sibongile Zungu. Having already served a five-year term, her month-to-month contract was terminated at the end of March 2015.

She was not reappointed on the strength of the 2014 Ndaki Report, a probe called for by the then-premier, Senzo Mchunu, and headed by Professor Fikile Ndaki to investigate allegations of mismanagement, corruption and nepotism about Zungu that were made by Nehawu. The report was never made public.

Later in 2015, the new head of department, Dr Sifiso Mtshali, set about trying to undo the Resultant tender.

A prerequisite to be considered a viable bid is that the bidder needs to be registered with the Financial Services Board (now known as Financial Sector Conduct Authority [FSCA]). Resultant was not, it only registered in November 2019. It is not a stretch to assume that in order for Resultant to have won the contract, there must have been interference in the supply chain management process.

The department used the non-registration issue to terminate the tender, and in July 2020 the Supreme Court of Appeal agreed it was entitled to do so.

But for at least 18 to 24 months, the contract dispute stopped the department from obtaining various pieces of equipment, such as incubators, endoscopy machines, instruments used in oncology and ultrasound, and X-ray machines, and this would have no doubt had a negative effect on patient care.

While Mtshali tried to undo the Resultant contract, he was negotiating another deadly deal. By December 2015, he awarded a contract to a company called KZN Oncology to repair and maintain two Varian RapidArc Linear Accelerators – commonly known as cancer radiotherapy machines – at Durban’s Addington Hospital.

Dhlomo’s refusal to pay Tecmed to repair the machines culminated in waiting times for radiation moving from just two weeks to eight months, and spurred a mass exodus of staff from the state’s oncology unit. It led to at least 499 deaths that might have been prevented.

But instead of being repaired, the machines fell into further disrepair. It turned out the company had no capacity to fix the highly complex equipment.

Eventually, the department had to rely on the Pietermaritzburg High Court to review the R9-million contract with KZN Oncology.

In the department’s own court papers, it said that Mtshali had failed to comply with the constitution and various statutory and regulatory provisions, prior to concluding the agreement with the company.

These machines had been in and out of service since April 2014 when the department stopped paying the then-contractor, Tecmed Africa (Pty) Ltd, the monthly R433,000 maintenance fee.

The then-Health MEC, Dr Sibongiseni Dhlomo, maintained that the contract was awarded fraudulently, albeit under his watch, but he never at any point provided evidence of that fraud.

Dhlomo’s refusal to pay Tecmed to repair the machines culminated in waiting times for radiation moving from just two weeks to eight months, and spurred a mass exodus of staff from the state’s oncology unit.

It led to at least 499 deaths that might have been prevented. Patients would talk of being diagnosed with Stage 1 cancer and by the time they could get a radiation appointment, they would have moved to Stage 4. It was a catastrophe. 

The final insult to those that could have been saved and the families they left behind occurred in June 2018 when Dhlomo reached a R6-million settlement with Tecmed. In return, Tecmed, which is the sole agent for Varian in South Africa, would allow Varian to take over the maintenance contract of the two Varian RapidArc Linear Accelerators at Addington Hospital.

But the devil is in the details – Varian seconded Tecmed engineers to do the work on its behalf. In reality, nothing changed.

Another tender of R27.54-million was flagged in the department’s 2018/19 annual report by the auditor-general.

Agreed on in September 2017 for the supply of radiotherapy equipment, the AG asked that the matter be handed over to the SAPS, claiming the best bid did not win. There were three winning bidders, of which one was a joint venture between Tecmed and the National Health, Education and Allied Workers Union (Nehawu), trading as Workers Health Medical.

It was Nehawu that had Zungu removed. And Nehawu helped push Mtshali out. It was equally vocal about the oncology crisis. The union then became a beneficiary of the same crisis.

And finally, in January this year, a report was released by the public protector that made damning findings against Zungu and some of her colleagues for their roles relating to four mobile health units leased by the department for use between 2012 and 2017 at a grossly inflated price of R61-million. The department ended up receiving only two of the units, which were eventually recalled by the providers after sitting in an EMRS lot. 

Between 2009/2010 and 2018/2019, the department incurred irregular expenditure totalling R45.06-billion. It has repeatedly been called out by the AG for its shoddy asset management, weak procurement controls and dismal record keeping.

To date, adequate “consequence management” – as vaunted lately by every ANC politician in KwaZulu-Natal as if it is a new concept – has yet to materialise in the above and other incidents.  But this is no surprise. Consider that in the department’s 2018/2019 annual report, the AG said the following:

“I was unable to obtain sufficient appropriate audit evidence that disciplinary steps were taken against officials who had incurred irregular expenditure, as required by section 38(1)(h)(iii) of the PFMA. This was due to the department not maintaining proper and complete records as evidence to support the investigations into irregular expenditure.”

This was echoed in a July Standing Committee on Public Accounts (SCOPA) follow-up report in the KwaZulu-Natal Legislature, where it said consequence management against “errant officials in the province leaves much to be desired”.

The auditor-general also said about the health department: “The financial statements submitted for auditing were not prepared in accordance with the prescribed financial reporting framework, as required by section 40(1) (b) of the PFMA.”

Between 2009/2010 and 2018/2019, the department incurred irregular expenditure totalling R45.06-billion. It has repeatedly been called out by the AG for its shoddy asset management, weak procurement controls and dismal record keeping.

In any “normal” company such fiscal and operational negligence, particularly if it contributed to the premature death of others, would have resulted in the most severe sanctions, or at the very least have been career-ending.

Yet, while the Hawks have confirmed an investigation into Zungu, she is now an adviser to national Minister of Health Zweli Mkhize and is also leading the Covid-19 response in the Eastern Cape.

Mtshali resigned in December 2017 and is now a medical consultant.

KZN’s saving grace may well be that the anticipated unmanageable strain on the nation’s public facilities will probably be less than projected, as is being witnessed in other provinces, with bed space still available. However, the strain on healthcare workers remains.  

Dhlomo, the political head of KZN Health from 2009 to 2019, and under whose tenure the department rapidly degenerated, was promoted to the National Assembly as committee chairperson for the health portfolio.

How Dhlomo has avoided any sanction whatsoever, particularly as his tenure encompassed the entire decade of the department’s collapse, qualified opinions, questionable tenders, evidence of interference in tender processes, and the oncology crisis, is not a mystery. As we know, senior cadre deployments are simply not sanctioned, for fear of who may be exposed as being complicit in their alleged actions.

KwaZulu-Natal is speeding into its Covid-19 surge, with the latest figures from the provincial health department showing 87,807 infections, 1,039 virus-related deaths, 33,246 active cases, and 53,444 recoveries.  The majority of the infections are in the eThekwini district – with 41,343 confirmed cases and 544 deaths.

Despite what happens in the coming weeks, Simelane-Zulu and Premier Sihle Zikalala will certainly laud their (read that as the ANC’s) handling of the outbreak as it peaks and eventually dissipates.

KZN’s saving grace may well be that the anticipated unmanageable strain on the nation’s public facilities will probably be less than projected, as is being witnessed in other provinces, with bed space still available. However, the strain on healthcare workers remains.  

On a visit to KZN on Thursday, Mkhize said he anticipated the province’s numbers to peak within the next week or so, with infection rates outstripping those of the Western Cape. Given the population differences between the provinces (The Western Cape population is 6.8 million, as opposed to KZN’s 11.3 million), this is to be expected.  

Nevertheless, in order to build some integrity in the department she leads, and to one day leave that department with a degree of credibility that her predecessors have not, Simelane-Zulu will have to make exceptionally hard decisions and undertake swift, unpopular actions that run contrary to those of her political party. Daily Maverick readers should not hold their breath in this regard. DM

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