Public health lab’s finances improve

The National Health Laboratory Service has improved its revenue collection from provinces and made substantial progress in tackling debts, two key developments that have helped stabilise its finances after auditors questioned its ability to continue as a going concern in 2017.

The National Health Laboratory Service (NHLS) has improved its revenue collection from provinces and made substantial progress in tackling historic debts, two key developments that have helped stabilise its finances after auditors questioned its ability to continue as a going concern in 2017.

Auditors SizweNtsalubaGobodo highlighted irregular expenditure of more than R1bn in 2016-17 and cast doubt on its ability to continue as a going concern because it reported a R1.879bn deficit for the year.

The NHLS is a vital part of the public health service as it provides all the tests used for diagnosing and monitoring diseases. It also provides a training platform for pathologists and technicians, and offers some highly specialised tests not offered by private sector providers.

“The picture is not rosy, but with the current levels of payments and pending agreements [on historic debt] the NHLS is in a better financial position than it was last year,” board chairman Eric Buch said on Monday.

The improvement in payments to the NHLS had enabled it to reduce its debt to its creditors and deal with the listeriosis outbreak, he said.

Buch said the NHLS had collected R5.8bn in revenue for between April 2017 and the end of January, a significant improvement on the R4.6bn collected during the corresponding period the year before, and had reached an in-principle agreement with Gauteng to settle historic debt of R1.29bn.

Gauteng was paying its current bills on time and had begun paying back its historic debt, which it was expected to settle in full by the end of the 2018-19 financial year, said acting CEO Kamy Chetty.

“The Gauteng departments of finance and health have verbally committed to paying the province’s historic debt according to the settlement amount that has been agreed upon [and we are] awaiting written confirmation of the debt settlement agreement from the province.

“A similar debt settlement proposal is currently being discussed between the KwaZuluNatal health department and the NHLS,” she said.

KwaZulu-Natal’s historic debt is estimated at R2.26bn.

The Western Cape, Limpopo and Mpumalanga had settled all their outstanding historic debts, Chetty said.

The NHLS began hearings last week for CEO Joyce Mogale and chief financial officer Sikhumbuzo Zulu, who were suspended in February 2017 following a probe after the National Education, Health and Allied Workers Union alleged corruption and maladministration.