The cash-strapped Eastern Cape health department has wrongfully paid almost R40m to an undisclosed number of former and current employees in the past four years. The payments, flagged by auditor-general (AG) Tsakani Maluleke as part of the material irregularities she identified in the department’s latest audit assessment, were made between March 2021 and this year.
The Eastern Cape Department of Health, now effectively bankrupt, owes a staggering R269 million to municipalities across the province. This was confirmed by Premier Oscar Mabuyane in response to a parliamentary question posed by the Democratic Alliance.
This debt is not a technicality. It places an unbearable financial strain on already cash-strapped municipalities and threatens the delivery of basic services such as water, sanitation and electricity.
The Premier cited redirected budgets towards medico-legal claims as the reason for the Department’s ongoing cash flow crisis. However, this explanation offers little comfort to municipalities that are expected to continue functioning without the funds owed to them.
According to the parliamentary response, as at the end of January this year, the Department owed R48 million to Nelson Mandela Bay, R40 million to Buffalo City and R35 million to King Sabata Dalindyebo. Other significant debts include Alfred Nzo District at R20 million, OR Tambo District at R19 million, Matatiele at R18.8 million and Raymond Mhlaba at R16.8 million.
Dozens of smaller municipalities are also affected, with outstanding amounts ranging from hundreds of thousands to several million rand. Many of these municipalities are already under financial pressure and cannot afford to carry the cost of provincial mismanagement.
The effects of this mismanagement are not theoretical. On 6 May 2025, Sundays River Hospital had its electricity disconnected, allegedly due to an R4.4 million unpaid bill owed by the Department of Health to the Sundays River Valley Local Municipality.
Despite issuing a formal notice and alerting the Department of Health and the Department of Public Works, no action was taken to prevent the disconnection. It was only after the DA escalated the matter, with Shadow MEC for Health Jane Cowley MPL taking urgent action, that the Department finally made a commitment to pay and power was restored.
This incident is a clear warning that poor financial management is endangering lives. The Department’s failure to pay within the legally required 30-day period under the Public Finance Management Act is not just a breach of compliance. It is a moral failure with real-world consequences.
The cash-strapped Eastern Cape health department wrongfully paid nearly R40 million to employees over the past four years, according to a report from the Auditor-General. This financial mismanagement is another symptom of the department’s struggle with cash flow issues and other financial irregularities, including outstanding payments to nurses, security contractors, and municipalities
