The National Health Laboratory Service’s (NHLS’s) head of procurement and its facility manager have resigned, but the state lab service is still taking legal action against them following allegations of corruption and fraud. Business Day reports that Graham Motsepe, the head of procurement, and Mthunzi Mthimkhulu, the facility manager, resigned on the eve of their disciplinary hearings.
The entity, which is struggling with R5.7bn in debt owed to it by provincial health departments, has been rocked by allegations of widespread graft and maladministration that have resulted in the suspensions of CEO Joyce Mogale, chief financial officer Sikhumbuzo Zulu and senior managers, including the head of its auditing unit. The NHLS also owes creditors R900m.
According to the report, acting CEO Shabir Madhi revealed that although the procurement head and facility manager had resigned before disciplinary hearings, the NHLS would pursue criminal cases against them.
The National Health, Education and Allied Workers Union (Nehawu), whose members went on a five-day strike that ended this week, has repeatedly bemoaned the crumbling governance at the NHLS, underscored by maladministration and widespread corruption.
The union has given the NHLS board an ultimatum to speed up disciplinary cases against the senior managers implicated in wrongdoing.
Nehawu also said the NHLS’s operating model was the cause of its woes and left it vulnerable to corruption. The union called for its reincorporation into the public service.
It warned that, if provinces did not pay up soon, the NHLS would run out of money before the end of 2017.
The report says Madhi conceded that legal wrangling had delayed disciplinary proceedings against the CEO and chief financial officer, which were supposed to have been wrapped up in two months following their suspensions in February. "We are hoping to have the proceedings done in August," Madhi said.
The NHLS is also grappling with debt the report says, with Gauteng alone owing more than R700m. The NHLS had been in talks with provincial health departments for about five years because a large part of their debt accumulated before 2013, Madhi said.
Gauteng’s monthly bills at the NHLS averaged R154m, but it had been making payments of about R100m a month.
The Gauteng MEC for health said in May that the province was facing a R10bn funding shortfall because of accruals and did not have enough funds to carry out its mandate.
"We run with a very small buffer and don’t have enough … operating (capital) if debtors don’t pay," Madhi said.
The report says talks are under way on resolving the NHLS’s cash crunch. One proposal is that either the Treasury or the Department of Health pays a lump sum. A review of how it offers services to provinces is also proposed.
Nehawu spokesperson Khaya Xaba said the NHLS must be brought back to the public service, so it could be funded from the fiscus. "The current funding model makes it amenable to corruption and looting." Xaba cited as an example the fact that 17 NHLS cars had been sold to friends by the facility manager and the procurement head, who had purchased vehicles without following the correct procurement procedures. "Some of these vehicles are collecting dust while the institution continues to plead poverty and is unable to meet workers’ demands," Xaba said.
[link url="https://www.businesslive.co.za/bd/national/2017-08-04-accused-managers-quit-lab-service/"]Business Day report[/link]