Component: Support Services

Financial & Supply Chain Management

Date : 16 September 2015Presenter: MC Skenjana

Ideal Clinic Realisation

“YOUR ATTITUDE DETERMINES YOUR

ALTITUDE”

Component: Support Services Sub-Component: Finance and SCM

Elements: 120: The facility manager is involved in determining the budget of the facility. 121: The facility manager has financial delegations 122: The budget and actual expenditure of the facility is available. 123: The facility has access to an automated supply chain system for general supplies 124: Delivery of supplies are consistently in line with terms and conditions of the relevant contract (including turn around-times

Introduction

Alignment of planning process with budget process development of operational plans costing of operational plans/determination of budget.

Build financial management capacity of FM Standardise the templates for operational plans and budget submission.

Allocation of facility budget to be done at district level using developed costing/allocation model. Model will include amongst others, population, burden of disease, equity and efficiency indicators.

NDoH to review facility budget allocation based on the approved model (ABC)

Element: 120

There are two options that may be adopted, namely:

Option 1: Cost centres for each facility create a cost centre for each facility

process starts in January, where requests are submitted to provincial treasuries by provinces for implementation from 01 April of each year.

Process will be initiated by NDoH on behalf of all provinces.

Linking of Personnel can only be done once the cost centres are created and will only be effective 01 April

Element: 122

budget capturing, fund shifting and requesting of reports done at facility level.

policy on shifting of funds that FM approval to be obtained before fund shifting is processed.

sub-district and district to play an oversight role.

Facility Managers will be able to monitor expenditure, prioritise and make informed decisions.

this is a quick win as it can be implemented before the beginning of the next financial year

Element: 122

Management of cost centres can be a challenging exercise and requires the following:

connectivity however creation not dependant on connectivity – does not deter us from creating Cost Centres

strong IT support at sub-district level

training on cost centre management (initially NDoH and monitoring and further training responsibility of sub-district, district and province)

capital equipment (computers)

human requirements (finance clerk)

Element: 122 cont.

Option 2: Desktop exercise at sub-district level one cost centre for all clinics at sub-district level – budget for all clinics is consolidated into one budget.

CHCs currently have separate cost centres though not in all provinces.

separation and management of budget done on microsoft excel

spreadsheet is updated for every transaction and allocation is done for each facility

reports can be produced per facility manually

Element: 122 cont.

Challenges misallocation of transactions

effectively do not have control over their budget.

difficulty in obtaining reports

poor communication of financial performance between facility and sub-district

Clinic committees unable to do comprehensive governance and oversight due to unavailability of financial reports.

Element: 122 cont.

Delegations are given based on capacity and level and also go with accountability.

Inconsistently applied across provinces (petty cash)

A proposed delegation for facility managers;Clinic Manager is R 30 000 CHCs Manager is R 50 000 Sub-district Manager R 500 000 (established) District Manager is R 2 000 000

This is based on the fact that clinics have less activities and functions compared to hospitals and considering the proposed SCM system.

Element: 121

Facility Manager may not have delegations to enter into a contract shift funds from Non Negotiables (approval from district CFO should be sought) except other items.

A comprehensive policy on delegations will be developed covering financial, SCM and human resources

This will be part of provincial delegations.

Element: 121 cont.

Design operational plan template

Create cost centres

Persal linkages

Develop allocation model

Policy on shifting of funds

Training on Cost Centre

Element: All

Need analysis for Facility CFOs

Facilities with BAS

Delegations

Supply Chain Management

Current development of Pharmaceutical automated SC

Element: 123

SVS

SVS

SVS

RxPMPUSupplier

Cross Dock

Direct

Depot

Control Tower Clinic

• Rolled out in Limpopo, KZN, Eastern Cape and CoJ

• Only collecting SoH, not yet active for goods received (this will give us consumption)

• SVS and Rx integration at 80% completed

• SOP’s at 80% completed

• Rx calculations and processes 100% developed

• Supplier Interface 90% developed

• SOP’s at 90% developed

• SOP’s 90% developed

• To commence 0%

Implement SVS in all clinics and develop additional functionality of SVS (namely order receiving)

Integrate SVS data into Rx Solution to automate order calculation and generation – and automate sign off authority

Agree on products to load onto SVS (contract versus non contracted items)

Address sustainability and support for Rx – access source code

Develop cross dock model and processes and trial – direct from manufacturer OR direct from wholesaler/”retailer”

Element: 123

Challenges Dependent on partners for implementation of processes and systems – sustainability

SVS business model needs to be defined (Vodacom has financed it to date through their Foundation)

Facility compliance to reporting of stock on hand

Authorization and delegations of authority need to be reviewed and tools developed to support the expediting of approvals

Element: 123 cont. The facility have access to an automated supply chain system for general supplies:

Spend analysis needs to be carried out

A categorization exercise needs to take place to identify which products we move to contract and which do we procure direct

Decide on procurement model based on financial and non financial benefits (Contract with manufacturer wholesaler/ retailer)

Contract terms need to be defined and measurements implemented

Element: 124The facility have access to an automated supply chain system for general supplies:The facility have access to an automated supply chain system for

general supplies:

Spend analysis needs to be carried out

Develop catalogue specifications (pricing, specifications and coding)

Supplier scorecard to be developed and published monthly

Element: 124The facility have access to an automated supply chain system for general supplies:The facility have access to an automated supply chain system for

general supplies:

Challenges

Codification standard for all items

Adherence to contract procurement by facilities

Monitoring systems to review contract/off contract spend at facility/PHC level

Element: 124 cont.

Roll out of SVS

Trial “informed push” model

Develop cross dock model

Identify items for contracts

Develop SOP’s for push model

Agree on delegations

Element: All

Observation As a sector we need to eliminate wastage and inefficiencies in number of areas amongst others:

Overstocking Expired stock Stock not needed

So much money lost on the above as most budget goes to pharmaceuticals and other consumables.

Conclusion