AG flags shoddy financial controls in Health Departments October $11,2023$

Most provincial Health Departments are in a dire state, the Auditor$-$General has flagged, with the Eastern Cape, Free State and Northern Cape receiving qualified audits for the fourth year running in $2022/2023,$ and only the Western Cape consistently receiving clean audits for those years.

Provincial Health Departments account for the lion$$s share of the public health budget and were allocated, altogether, R$248$bn in $2022/2023,$ according to the Finance and Fiscal Commission.

The Limpopo Health Department has yet to finalise its audit outcome, while Gauteng, Mpumalanga, North West and KwaZulu$-$Natal received unqualified audits with findings, as did the national Health Department, reports BusinessLIVE.

Auditor$-$general business unit leader Thabelo Musisinyani said the overall quality of provincial Health Departments$$ annual financial statements was worrying as the national Health Department and most provincial Health Departments submitted documents with material mis$-$statements that were resolved during the audit process.

That the Western Cape consistently submitted annual financial statements without such mis$-$statements showed the control environment was sound and that many departments were relying on the audit process to rectify weaknesses in their internal controls, she told Parliament$$s Portfolio Committee on Health.

She added that provincial departments were largely failing to rein in payouts for successful medical negligence claims.

She warned that the sector was not on track to meet the $2019-2024$ medium term strategic framework target of reducing provincial Health Departments$$ contingent liabilities for medico$-$legal claims by $80\%,$ from R$70$bn to under R$18$bn$,$ over the period.

The contingent liabilities for claims for eight provinces totalled R$67$bn in $2022/2023,$ and is expected to be even higher once Limpopo has completed its financial statements.

MPs were unimpressed by the failure of underperforming provincial Health Departments to improve, with committee chair Kenneth Jacobs saying the national Health Department should consider placing the Northern Cape under administration.

Opposition MPs said provincial Health Departments should be called to account to Parliament.

$$We have been talking about these matters for four years, and it gets worse every year. Something needs to be done to resolve these problems urgently,$$ said FF$+$ MP Philip van Staden.

QUESTION FOUR $[10]$

Explain the significance of receiving a "qualified audit" versus a "clean audit" for Provincial Health Departments. How does this impact their financial accountability and management?