Health ministry faces legal action over debt

HARARE - The Health and Child Care ministry is facing legal action over $70 million it owes to creditors, ramping up pressure on the indebted ministry whose finances are coming under intense scrutiny.

Auditor-General Mildred Chiri urged government to rescue the stuttering ministry but the measure was in danger of sputtering out and dying because of a critical funding shortfall.

Chiri said in her audit report, tabled in the National Assembly on Wednesday, that Treasury instruction 1204 stipulates that all claims against government should be dealt with promptly and that vouchers should be completed and paid without delay to prevent arrear claims being made long after the service has been rendered.

“Contrary to this provision, the ministry had outstanding amounts to suppliers totalling $70 112 498.

Some outstanding amounts date back to the 2012 financial year,” the damning report said, adding the debt had ballooned from $46 million in 2015.

“The ministry could end up incurring litigation costs if suppliers take legal action. The supply chain may also be disturbed. The ministry should make an effort to pay suppliers promptly as stated in regulations.”

The Health and Child Care ministry said the failure to pay suppliers on time had been caused by the Finance ministry’s inability to meet their financial obligations towards line ministries.

“Whilst the observation and recommendation are welcome, it should be noted that this problem has been worsened by the current economic conditions whereby the ministry of Finance is not able to meet their obligations to fund line ministries,” the ministry said in its response.

“Even though our hospitals have access to the Health Services Fund, this is still not sufficient to cover basic hospital operations.”

In the 2001 Abuja Declaration, government pledged to allocate at least 15 percent of its annual budget to improve the health sector.

But this year, the cash-strapped government earmarked just over 6 percent of its budget for that purpose.

Chiri noted possible revenue loss caused by the ministry’s failure to collect money from debtors.

“For the fourth year in succession, the debtors figure has continued to accumulate standing at $23 634 749 (2014: $20 174 649) (2013: $15 068 702) translating to 99 percent of the total assets of the (Health Services) Fund.

“This was due to failure to institute debtor follow-up measure, to take recovery action. I am concerned that the recovery rate of amounts due from debtors has continued to decrease, adversely affecting liquidity position of the fund,” she said.

“Continuous failure to recover amounts outstanding in the debtors account leads to loss of revenue.

“The liquidity position of the Fund would continue to be negatively affected and service delivery will be compromised.”

The ministry said it had implemented various measures to recover the debt but the policy that prohibits them from turning away people who cannot pay for medical services has resulted in further accumulation of debtors.

“The measures include, among others, the use of debt collectors, requesting patients to pay deposits upfront on admission and regular follow ups on medical aid societies as well as government entities such as the national army, Zimbabwe Republic Police, Prisons and Social Welfare to settle their outstanding debts.

“Recovery from medical aid societies has been showing signs of improvement while government entities continue to be financially constrained due to the economic challenges facing the country.”

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