News24

E Cape stops OSD payments

2010-02-03 22:14

Bisho - The Eastern Cape health department said it is R1.8bn in the red, and had suspended all outstanding occupation specific dispensation payments until the start of the new financial year in April.

It has also put a hold on all payments to creditors, and has announced plans for a major overhaul of its tendering system.

"The reason why we cannot effect payment now is that we are currently facing a deficit of about R1.8bn," spokesperson Sizwe Kupelo said on Wednesday.

However he emphasised that existing salaries would be paid out as normal.

Nurses most affected

He said the outstanding OSD payments affected mainly nurses. Most doctors, pharmacists and emergency services personnel had already received their OSD packages.

"The department regrets the fact that it has not been fully able to implement the OSD, which was intended to bring smiles to the faces of our employees."

"We apologise for the problems that have arisen, and we also acknowledge and accept responsibility for the fact that we did not earlier communicate this important message about the delay in payments."

"We assure staff that the department is committed to paying the OSD money as soon as it is available."

Those who had not yet got their OSD payouts would within the next three weeks get a detailed statement of what was due to them.

Kupelo said the department's newly-appointed superintendent general, Dr Siva Pillay, had applied for an overdraft in terms of section 139 of the Public Finance Management Act.

Payments caused deficit


The department was also seeking an outstanding amount of more than R212m from the national treasury which was earmarked as "unfunded mandate" cash to cover unplanned-for OSD expenses.

He said among the reasons for the department's massive deficit were the pressures of OSD payments, and payments to staff relating to backlogs.

He said the department urged its employees to continue to treat patients "with compassion and care", and to continue to deliver a quality service.

Kupelo said as part of a general cleanup of its finances, the department would disband its existing bid evaluation committees and come up with an alternative, transparent, procurement system.

Until then, all delegations and mandates for spending in the department had been withdrawn.

It was hoped the new system would be in place by April 1.

He said some suppliers had been grossly overcharging the department, billing R25 for a plastic ballpoint pen, or R100 for a bag of potatoes.

Kupelo also said the province's suspended head of emergency services, Shanks Maharaj, had resigned. He was suspended last year over the alleged abuse of an air ambulance. Kupelo said Maharaj had not yet faced a disciplinary hearing.