When the new financial year starts next week, the Eastern Cape Department of Health will have R4.8-billion in unpaid bills for crucial medical supplies, fleet services, phone bills, medicine, medical gas and municipal services for the province’s ambulances and hospital services.

The Department’s landline phone bill alone is R36.5-million. Leaving this bill unpaid has caused an outage at all the province’s emergency medical services call centres (for state ambulances). Telkom blocked the landlines to these call centres. The department initially described the problem as “a technical difficulty”.

Officials had to scramble to set up a new system to tide them over until 1 April, when they could pay the bill.

Read more in Daily Maverick: EC Health Department scrambles to set up new emergency numbers after not paying the phone bill

The amount owing to suppliers represents 15% of the total allocation of R30.1-billion allocated to the Health Department by the Eastern Cape Treasury in this year’s budget. Most of the money allocated in the budget goes to covering salaries in the department.

The Department’s spokesperson, MK Ndamase, said they had decided that no official would be held responsible for unpaid bills, given the department’s precarious financial situation.

Ndamase said the department had covered patient food, diesel, and medicine bills.

The accruals have doubled since a mid-year report, seen by Daily Maverick and confirmed as accurate, reflected that the Department at the time was also owing millions to Life Esidimeni for frail care delivered to severely disabled children (R94.4-million), the Department of Transport for government fleet services for its ambulances (R241-million), R39-million to the public-private partnership in the province.

The accruals were estimated at around R2.7-billion then, which has now doubled to R4.8-billion.

Ndamase confirmed this figure but added that department officials must still reconcile it to get a final figure.

Shortfalls

At the time of the mid-term report, the Department owed about R86-million rands to medicine and chemotherapy providers and R25-million to Afrox for medical gas. The Department also owed R32-million to various travel agencies.

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“Various attempts were made to pay critical suppliers with limited resources. These included medicine, diesel, and patient food. Unfortunately, the money was not enough to cover all suppliers. Negotiations were also held with Telkom representatives,” Ndamase said.

“The department has determined that no employee should be punished because the department does not have money to pay suppliers.”

In September 2023, the Minister of Health, Dr Joe Phaahla, visited the Eastern Cape for “an opportunity to be briefed on challenges facing the provincial health department and discuss possible interventions”.

The only thing that happened after this, however, was that Dr Rolene Wagner, the highly respected head of the department, was moved to the Office of the Premier and replaced with an acting head of the department. Wagner’s removal was part of a huge shake-up by Premier Oscar Mabuyane, who also moved several other heads of department to his office. Up to now, no answers could be obtained from the Office of the Premier on the work of this team.

At the time, Wagner said the department had managed to reduce the rate of increase in accruals and payables from 16% (in 2021/2022) to 2% in the 2022/2023 financial year.

Ndamase said that until the department can settle the Telkom bill, the EMS teams will use a push-to-talk system that operates in the Vodacom network.

“This system is working,” he said. However, the system was only introduced after some communities struggled through the prior long weekend because nobody had informed them what numbers to call. The notice of new numbers for call centres only went out on Tuesday (26 March).

In his budget speech earlier this month, the provincial MEC for Finance, Mlungisi Mvoko, described the turnaround plan at the department as “a work in progress”.

“I must highlight that the provincial government continues to roll out its health turnaround plan to promote financial sustainability within Health. The plan is a work in progress and is targeting to reduce medico-legal payouts, introduce health services optimisation, digitalisation of health services through e-health and strengthening of primary health and community health programmes,” Mvoko said during his budget speech this year.

Despite their growing collection of unpaid bills, the Department also failed to spend several crucial conditional grants. In answer to a parliamentary question Phaahla, said on 1 March that the Eastern Cape Department of Health had failed to spend R62-million due to delays in the payment of medico-legal settlements (these were not the result of the department’s actions, though) but also rolled over R24.8-million in unspent grants that fall under the National Tertiary Services Conditional Grant and R6.1-million that was unspent in the district health programme. These rollovers were approved. He added that the department did not spend R30.5-million in “voted funds” (funds allocated in the budget).

The Auditor General also late last year once again flagged the department in November last year for “material misstatements” in its financial statements due to “significant internal control deficiencies”.

Holiday weekend concerns

The Democratic Alliance’s Jane Cowley said she was doubtful that the Department’s emergency plans for the Easter weekend would work as she has been receiving many calls from people who are struggling to get hold of ambulances.

“I am not sure how effective the push-to-talk system is — this would need to be independently assessed.

“With regard to outstanding payments why did the department not ring-fence funds from non-critical programmes such as health infrastructure or health education to settle accounts which impact directly on the functionality of the health department and directly affect the lives of citizens?

“Poor human and financial resource management are to blame for this debacle. For example, there are thirty or more staff members who still sit at Orsmond TB hospital daily and earn full salaries while there have been no patients there since October 2022 –  an accumulated amount in excess of R100-million so far — because the situation has been completely mismanaged.

“Infrastructure notoriously has overruns and underspends by hundreds of millions annually, but there are no consequences. Even the Auditor General’s damning report last year highlights maladministration, mismanagement and lack of consequence management as three of the several reasons why the department is in severe fiscal distress and may no longer be considered a going concern.

“Employees should not be punished — agreed — senior management and leadership, however, should be held to account. However, there is simply no political will to do so. So the patients and those dependent on this broken and corrupt government will continue to suffer,” she added. DM