Corruption in the Eastern Cape

Corruption in the Eastern Cape

Photo courtesy of the Treatment Action Campaign Archive

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168 clinics and 17 hospitals lack piped water

42 health facilities have no proper electricity and operate via generators

68% of hospitals lack essential medical equipment

16% of facilities have no telephones and are accessible by road only in good weather

Overall staff vacancy rates stand at 46% (mostly clinical posts) requiring an additional R9 billion to fill

Source: Bateman, C. ‘Will our public healthcare sector fail the NHI?’ South African Medical Journal, Vol 102, No 11 817-817, (2012).

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I make the mistake of asking Dr. Siva Pillay to give me “just a few examples” of corruption that he’s uncovered as Superintendent-General (SG) of the Eastern Cape Department of Health. After 30 minutes of back-to-back examples, I interrupt him to ask another question, but Dr. Pillay stops me. “We’ve only covered about 10% of cases,” he points out.

Known for his crackdown on rampant, widespread graft within the department, since his appointment in 2010 Pillay has led a series of investigations into low- and high-level corruption. This scrutiny has exposed what he calls an “endemic” problem. No part of the department is untouched. Corruption has even taken root in clinics, along the supply chain, within the tender process, and in human resource management.

The stories are numerous, and often mind-boggling. They range from the department’s Chief Financial Officer awarding millions of rand in contracts to the businesses of family members, to departmental employees fraudulently receiving government grants. These practices further wrack an already fragile, if not terminally ill, health system.

When Pillay took up his role as SG, the Eastern Cape Department of Health was wholly bankrupt. The situation had become so dire that the Provincial Treasury subsequently took over management of the department. Among the Treasury’s first steps was a hiring freeze on all health posts within the province, much to the chagrin of clinics and hospitals that are desperate to fill essential jobs. One need only google “Eastern Cape health” to learn from the list of alarming results that the province is in a shambles.

Dr. Siva Pillay. Photo courtesy of Gallo Images.

Audit milestone

Pillay has bravely attempted to turn this around. Under his stewardship, the department cleared an audit for the first time in a decade. In his first year as SG, the department was considered the most improved in the Eastern Cape. Health indicators have improved; the TB conversion rate* is up, and the rate of under-five child mortality is down. “I think we can be proud of what we’ve done,” he says.

But his biggest claim to fame is tackling corruption. Pillay has focused extensively on shady practices amongst tender suppliers, explaining that the province’s poorly managed supplier database is an invitation to unchecked abuse. “The whole supplier database is corrupt… more than 3,000 people … are registered more than once, there are people that have got multiple companies,” he says.

An internal investigation placed irregularities in the supplier database under the microscope. It found thousands of instances in which different suppliers listed the same bank account, phone number, physical address, and/or postal address. Single suppliers were seen to have multiple bank accounts. Different suppliers sported the same vendor code. All of these discoveries point to a handful of dubious individuals profiting from a multitude of supposedly separate companies that are in fact owned by the same group of people.

* TB conversion rate: The rate at which a series of sputum samples from patients with TB are found to be negative for TB bacteria after the patients have begun treatment.

Double dipping

Duplicate payments to single companies were also uncovered, and the financial toll of this particular practice is dizzying in itself. For transactions over R15,000 alone, this single investigation found R34,109,375.56 in duplicate payments.

Sometimes ghost payments surfaced; the investigation showed that nearly R700,000 in payments were made without naming a specific beneficiary. And Pillay explains that this is likely to be just the icing on the cake, given that accurate records are incredibly difficult to track down. “The supplier database is with Treasury, and in some cases, the physical files were all tampered with when I came in,” he says. “This had been happening for years. When I came here there was no document system. Anyone could make changes.”

Tender fraud

Pillay considers tender fraud to be the “most expensive” form of corruption. Tender fraud manifests itself in a variety of ways. In some cases supposedly “multiple” suppliers owned by the same individual(s) bid against each other, flouting the requirement for real competition. Or, perhaps most egregiously, those writing the tender specifications also benefit, either directly or indirectly, from the tender award. Sometimes both of these fraudulent practices occur in relation to a single tender.

Investigations have found such scams practised throughout the department, including by Pillay’s former Chief Financial Officer, Phumla Vazi. An internal investigation found that under Vazi’s tenure, 120 companies owned by members of her family—namely her sister, daughter, and husband—were awarded R6,898,345.76 from 2003-2010. This was not just a case of oversight; in some cases, Vazi physically signed off on the contracts awarded to family members. “If you look at some of what she was signing off on, she knew it was from her daughter,” says Pillay. “If you got three quotes from a stranger you wouldn’t know that all three quotes were from the same person, but for your daughter, you know that the three companies are from her.”

Corrupt officials are now setting their sights on juicier targets. Rather than fraudulently applying for contracts of around R10,000, Pillay says that corruption is instead taking place primarily with contracts of R30,000 or more. Companies regularly exploit the system of black economic empowerment (BEE) by claiming to have previously disadvantaged people within their management in order to secure more tender points. “That to me is not empowerment in any way, that is corruption,” he comments. Low-level dishonesty is also widespread. An internal investigation found that 10,221 employees of the department’s 47,000 were illegally receiving government grants. “That’s a quarter of my department,” says Pillay. “It’s a joke.”

Pillay says that swindling is perpetuated because it has, over the years, become the norm, rather than the exception. “There’s a culture that is existing where people do not care… If a guy doesn’t think he’s doing something wrong, then how can you deal with it? Now if you don’t do it, you’re considered foolish…everyone’s sharing in it, so who’s going to talk about it?”

Pillay points out that the Eastern Cape is not an exception, and corruption is found across the country. “It’s everywhere! In other provinces it’s the same. I went into another province…and when I looked at the things there it was the exact same, it’s just that no one’s bothered to check it.

“I don’t think that the country understands what we are going through,” he observes. “We need to explain to people that this is the situation that we have to deal with.”

Death threats

Pillay claims that his efforts to unearth such practices have resulted in death threats and a vindictive investigation brought against him by former MEC Bevan Goqwana. The investigation came with a price tag of R3 million but yielded nothing of interest. Pillay’s contract expires in January 2013, and he is convinced that it will not be extended. He does not seem especially concerned. “I’m a doctor, so I can go back to medicine, to entrepreneurship, to development, I can do many things,” he says.

Pillay hopes that his efforts to sniff out, and punish, corruption, will frustrate future attempts. “We put up a multi-agency working group [on corruption]; we put in a document management system; we conducted audits; we did qualifications of people in the [supplier] database,” he says. “There are a lot of things that we put in place that make it difficult for corruption to continue in the future… You’ve got to keep doing this. You have to have monitoring and tools.”

Still, Pillay does not want to get his hopes up that this legacy will continue, even if his position does not. “I don’t want to speculate about anything as to what’s going to happen in the future. No-one can look into a crystal ball….You’ve got a sphere of influence of what you can change, [and] what you can’t change you can’t change. You have to rely on the Lord for the rest of that.”

Due to a shortage of staff, patients have to endure a long waiting period before being treated at Madwaleni Hospital. Photo by Thembinkosi Dwayisa, courtesy of Times Media.

One doctor for 120,000 people

Madwaleni Hospital is a 180-bed hospital in the rural Eastern Cape, about 100km from Mthatha. It serves a community of 120,000 mostly poor people. As recently as 2009, articles were written about the remarkable successes achieved at the hospital.

In less than three years things have fallen apart drastically. At the time of writing, Madwaleni has only one doctor left. According to the hospital’s organogram, it is supposed to have 14. A moratorium on appointing new critical staff in the Eastern Cape public health system has made it almost impossible to fill these vacant posts.

The Legal Resources Centre (LRC), acting for TAC and SECTION27, has engaged with the Department of Health and Treasury in relation to the crisis. At the time of writing, the problems have not been resolved and it is likely the LRC may have to take the matter to court. In correspondence the Provincial Treasury blames the Provincial Department of Health and vice versa. However, as a result of pressure there now seems to be moves to expedite the appointment of additional doctors. TAC and SECTION27 will continue to monitor the situation.

Some details in this article were sourced from the Health-e News service (www.health-e.org.za)
 
By Mara Kardas-Nelson