Treasury poised to push four provincial health departments into national administration

The National Treasury is expected to write to provincial health MECs in KwaZulu-Natal, the Free State, Gauteng and the Northern Cape in the coming days, asking why their departments should not be placed under national administration.

Failure to satisfy the Treasury with prudent fiscal plans will result in a recommendation to cabinet, expected early next year, to place the provincial health departments under national administration, high-level officials in government have told Business Day.

Two Treasury sources warned that hospitals in these provinces face a high risk of running out of medication due to a chronic failure to pay service providers within 30 days, salary overspending caused by permanently absorbing Covid-19 assistant staff, persistently high doctor and nurse vacancy rates, and budget overruns with neglected infrastructure maintenance.

This apparent gross mismanagement is also detailed in the inability of provincial hospitals to provide healthcare services and is detailed in repeated outcomes by the auditor-general.

The auditor-general of South Africa audits provincial health departments to ensure public money is spent correctly and services are delivered effectively. The auditor-general has, year after year, detailed high levels of irregular expenditure, fruitless and wasteful spending and management instability in most of the country’s provincial health departments.

According to the Treasury’s annual report on late payments of supplier invoices for the 2024/25 financial year, 143,245 invoices to the value of R6.4bn were paid after 30 days by national departments by the end of the financial year.

“This indicated a regression of 32%, or 34,328 invoices, when compared to the number of invoices paid after 30 days by national departments in the 2023/24 financial year,” Public Service Commission (PSC) commissioner Anele Gxoyiya reported.

While public hospitals continue to struggle to provide basic health services, private hospitals are leaping ahead by being on the verge of integrating artificial intelligence to help with patient diagnostics.

Section 100 of the constitution gives the national executive the authority to intervene in a province if it is not fulfilling its constitutional obligations.

This intervention can take the form of issuing a directive to the province or, in more serious cases, temporarily taking over the province’s function to ensure essential national standards are met or to prevent action that would be prejudicial to the rest of the country.

It would not be the first time the National Treasury has placed a provincial health department under administration. Previously it has listed the restoration of trust between labour and government, an attempt to assist the province to upgrade its systems, restore sustainable service delivery and improve financial management as reasons for such interventions.

Situations that can trigger a section 100 intervention include financial mismanagement, cash flow problems that prevent a provincial department from fulfilling its commitments or other forms of constitutional failure, such as a failure to provide basic health care services.

A section 100 process can include a range of steps, including a formal directive to the provincial executive, outlining the failure and the steps required for correction.

The Treasury has traditionally played a key role in advising the national executive and co-ordinating the financial aspects of such interventions, often working with other government departments to ensure financial stability and the proper management of provincial finances.

The national health department refused to comment, referring Business Day’s queries to the Treasury.

Restoring the dignity of patients in the country’s public hospitals is high on the agenda of the government of national unity, after the provision of substandard health care was part of the lived experience of South Africans that led to the ANC losing its majority in the 2024 general elections.