Table 4 Participants responses on the rational usage of funds

Comments

Some participants rarely exceeded their budget whereas others exceeded their budget often. Inconsistencies existed between participants responses in terms of accruals, some participants stated that over-expenditure would be deducted from the upcoming year’s budget. Other participants responded that they do not have accruals and senior management will assist in providing additional funds to make up for any over-expenditure

Importance of reviewing the demand plan against the actual demand

During the interviews, a demand plan was mentioned. Participants alluded to each facility having to submit a demand plan at the beginning of the financial year to the budget office. However, they indicated that provinces were yet to review these plans against actual demand. Reviewing and monitoring this data could be beneficial to ensure good stock management; prevent over-expenditure, stock-outs and wastage

“Exceeding the budget is not allowed. When you do this, there are legal processes that must go to a committee in parliament for approval. If they don't approve it, then it's taken from your next year's budget. But if it is condoned and there is a sound reason, treasury may look for funding to cover for that. But if it is not condoned then it will be taken from the next financial year.”

“What we had not done at the provincial level is to review the budget or the demand plan against actual demand… This will have a negative impact on their budget and also on availability because we end up procuring more money than we had estimated for. Somewhere along the way you need to cut down or need to start rationing the quantity that you procured. So if you as an institution, have additional money then you can request there is a virement shift towards non-performing programmes.”

“The implications are that it erodes to the subsequent year’s budget. So it means you pay the previous year’s unpaid account with your new budget. We call them accruals—if expenditures or deficits are acquired over a period of time.”

“The demand planning going forward is a critical function that the provinces are embarking on, there has been capacity building by the National Department of health, through NGO (Non-governmental organization) funded consultants. Just to make sure our demand activities are strong and robust because they inform the budget.”

Some participants stated that they rarely exceeded the budget, but in a case they foresee they do:

“The HOD (head of department) actually managed to cap that, we are actually seeing things get better. The budget that we got allocated is able to push us further. Whenever we ran out of the budget they would top it up, with a little amount.”

Rational Use of Medicines

Non-adherence to the STG and EML will have similar effects on the supplier and the facility. A participant discussed the budget impact in terms of non-adherence to the STG and EML

Several participants shared their challenges with the budget for oncology treatment. The Oncology budget is from the equitable share and purchasing of the necessary items could consume a majority of the budget:

“There is a huge challenge with oncology medication. Over the last 6 months, expenditure was overwhelming. The conditional grant is good enough for ARVs but we struggle in other areas such as oncology treatment and the unavailability of oncology items. Oncology money comes from the equitable share. I believe cancer is dominant, and we don't get treatment because the focus is still on other programmes.”

“Prescribing outside the standard treatment guideline messes up the usage. The usage is now not going to be aligned to the demand plan that was given to the supplier. The supplier will have a problem because either their product will not be used as much as it should be or it is consumed more…”

Reasoning

These inconsistencies could be due to inefficient allocations to the provinces; management prioritizing the pharmaceutical budget by making efforts to find additional funds when required; managers on the periphery informing senior management early enough to avoid a crisis and provinces managing their services according to their budget

Poor alignment of the demand plan against the actual demand as well as non-adherence to the STG/EML will have negative effects on suppliers and facilities. It may prevent suppliers from making future bids and ultimately affect availability. The pharmaceutical contracts play a vital role as they are enablers to purchasing medicines. When this process is not well managed it leads to buying off-contract, which could be costly and affect medicine availability. When contracting, the suppliers of medication are provided with an indication of the demand plan, which is informed by the STG/EML. Non-adherence to the guidelines will result in misalignment of usage and demand leading to surplus stock or stock-outs, which could have negative impacts on patients