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End of health smart card?

Audra Mahlong
By Audra Mahlong, senior journalist
Johannesburg, 27 Oct 2009

Major IT projects may take a back seat as the Department of Health reprioritises its spending, following a damning report by the auditor-general.

The R609 million smart card project will remain on hold indefinitely, pending a review of all department projects and major contracts. Spokesman for the department Mandla Sidu says the MEC will determine if the project is “in line with the mandate of the department” and funding will only be directed once it is prioritised.

“The project has been put on hold due to the reprioritisation programme. The review process will determine if all projects - including the smart card project - are in line with the mandate of the department,” says Sidu.

The Gauteng health department put the project on hold since health MEC Qedani Mahlangu took office in May this year. Last year, the health department awarded the tender for the project to a KOPM Logistics-led consortium, at a cost of R609 million. The consortium included empowerment companies iNathi and Ideco, along with Sagem SA.

The aim of the project is for patients to be issued with health cards that store their medical records on an embedded smart chip. The cards were expected to improve the accuracy of patient records, speed up check-in times, and streamline the process of transferring patient information from hospitals to doctors and pharmacies.

Sidu explains the department is deciding which projects are core and which are non-core, and looking at budget allocations for all projects. The mandate of the department is to provide healthcare and projects, which don't help fulfil the mandate, will be changed from core to non-core, he adds. The pilot has also been put on hold, pending a decision by the MEC.

Billions wasted

The smart card project was piloted in January 2008 and was scheduled to end in March of the same year. The system was supposed to have been fully implemented in April 2008 and has been delayed several times.

In August, following the delays and questions by the Democratic Alliance on the progress and cost of the project, Mahlangu said resources would be diverted from non-core to essential services.

She said more funding and support would be given to improving staffing levels, procurement of basic and essential equipment, improving working conditions for staff, reduction of waiting times and drug supply.

Mahlangu introduced a review programme and accelerated it following the auditor-general's report on the 2008/9 financial year. The audit found unauthorised expenditure of more than R1 billion; irregular expenditure of R1.9 million, which was incurred due to the procurement process not being followed appropriately; and fruitless and wasteful expenditure of R2.2 million incurred for defective work.

The auditor-general noted in its report that the department has not been following the Public Finance Management Act and instructions issued by the National Treasury. It also found 13 contracts, to the value of R38 865 750, had been awarded without following competitive bidding process. The department also could not quantify its computer software as required in the financial statements.

“We have accepted the findings and have developed a plan to correct the deficiencies identified by the auditor-general. Every directorate in the department has been instructed to develop business plans to avoid the recurrence of unauthorised, irregular, fruitless and wasteful expenditure,” says the department.

Sidu says “negotiations are ongoing” with the KOPM Logistics-led consortium on the project.

Related story:
Indefinite wait for health smart cards

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