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Health

ANNUAL REPORT 2016/17

National Health Laboratory Service

Annual Report

2016/17

National Health Laboratory Service2

Table of Content

Part A: General Information ......................................................................................................................................3

General Information ...................................................................................................................................................................................................................................................4Abbreviations and Acronyms ................................................................................................................................................................................................................................5Foreword by the Chairperson ................................................................................................................................................................................................................................9Acting Chief Executive Officer’s Overview ....................................................................................................................................................................................................12Board Members ..............................................................................................................................................................................................................................................................15Statement of Responsibility and Confirmation of Accuracy for the Annual Report ...........................................................................................................18Strategic Overview .......................................................................................................................................................................................................................................................19Legislative and Other Mandates ..........................................................................................................................................................................................................................21Organisational Structure ...........................................................................................................................................................................................................................................23

Part B: Performance Information ............................................................................................................................24

Auditor’s Report: Predetermined Objectives ................................................................................................................................................................................................25Situational Analysis ......................................................................................................................................................................................................................................................26Performance Information by Programme ......................................................................................................................................................................................................28Business Unit Performance ......................................................................................................................................................................................................................................43Performance Information by Province .............................................................................................................................................................................................................90Performance Information by Subsidiary .........................................................................................................................................................................................................150Performance Information by Institute ..............................................................................................................................................................................................................151

Part C: Governance ......................................................................................................................................................156

Introduction ......................................................................................................................................................................................................................................................................157Portfolio Committees ..................................................................................................................................................................................................................................................157Executive Authority ......................................................................................................................................................................................................................................................157The Accounting Authority/Board ........................................................................................................................................................................................................................158Risk Management .........................................................................................................................................................................................................................................................170Internal Audit ...................................................................................................................................................................................................................................................................170Compliance with Laws and Regulations ........................................................................................................................................................................................................171Fraud and Corruption .................................................................................................................................................................................................................................................171Minimising Conflict of Interest ............................................................................................................................................................................................................................171Code of Conduct ...........................................................................................................................................................................................................................................................172Health Safety and Environmental Issues ........................................................................................................................................................................................................172Social Responsibility ....................................................................................................................................................................................................................................................172Report of the Audit and Risk Committee ......................................................................................................................................................................................................173

Part D: Human Resources ..........................................................................................................................................175

Introduction ......................................................................................................................................................................................................................................................................176Human Resources Oversight Statistics ............................................................................................................................................................................................................177

Part E: Financial Information ....................................................................................................................................181

Chief Financial Officer’s report .............................................................................................................................................................................................................................182Summary of Group salient information .........................................................................................................................................................................................................184

General InformationPART A


General Information Registered name of the public entity National Health Laboratory Service

Legal form Schedule 3A public entity

Practice number PR5200296

Registered office address 1 Modderfontein Road

Rietfontein

Sandringham

Johannesburg, 2000

Postal address Private Bag X8

Johannesburg

2131

Contact telephone number 011 386 6000

Email address [email protected]

Website address http://www.nhls.ac.za

Company Secretary: Adv. Mpho M Mphelo

External auditors SizweNtsalubaGobodo Inc

Chartered Accountants (SA) (SNG)

Bankers First National Bank Limited, Rand Merchant Bank Limited,

Investec Limited and Nedbank Limited

Annual Report 2016/17 5

Abbreviations and Acronyms

AAR Academic Affairs and Research

AARQA Academic Affairs, Research and Quality Assurance

ACGT AIDS Clinical Trials Group

AIDS Acquired Immune Deficiency Syndrome

AMP Antibody-Mediated Prevention

AMR Antimicrobial Resistance

app Application

ART Antiretroviral Therapy

ARV Antiretroviral

ASLM African Society for Laboratory Medicine

ASOT Antistreptolysin O Titer

AU African Union

BhCG Beta-Human Chorionic Gonadotropin

BHSc Bachelor of Health Science

BLUC Blood and Laboratory User Committee

CCCP Cervical Cancer Control Policy

CCMA Commission for Conciliation Mediation and Arbitration

CCMT Comprehensive Care, Management and Treatment (of HIV and AIDS)

CDC Centers for Disease Control and Prevention

CDW Corporate Data Warehouse

CHC Community Healthcare

CM Cryptococcal Meningitis

CMA Cytogenomic Microarray Analysis

CMJAH Charlotte Maxeke Johannesburg Academic Hospital

CMSA College of Medicine of South Africa

CMV Cytomegalovirus

CNV Copy Number Variation

CPD Continuing Professional Development

CPUT Cape Peninsula University of Technology

CrAg Cryptococcal Antigen

CSF Cerebrospinal Fluid

CTB Centre for Tuberculosis

CU Comprehensive University

CUT Central University of Technology

DBS Dried Blood Spot

DCS Department of Correctional Services

DGM Dr George Mukhari

DHA Department of Home Affairs

DMP Diagnostic Media Products

DNA PCR Deoxyribose Nucleic Acid Polymerase Chain Reaction

DoH Department of Health

DR-TB Drug-Resistant TB

DST Drug Susceptibility Testing

DUT Durban University of Technology

DVS Dried Virus Spot

EBS E-Business Suite

EBV Epstein Barr Virus

ECM Enterprise Content Management

EDTA Ethylenediaminetetraacetic Acid

EE Employment Equity

EFI European Federation of Immunology

EGK Electronic gate-keeping


EID Early Infant Diagnosis

ELISA Enzyme-Linked Immunosorbent Assay

EQA External Quality Assurance/Assessment

EXCO Executive Committee

FA Flow Assay

FBC Full Blood Count

FFP Fit for Purpose

FIND Foundation for Innovative New Diagnostics

FLQ Fluoroquinolones

FNA Fine Needle Aspiration

FSASP Federation of South African Societies of Pathology

GDSP Global Data Services Platform

GFAP Glial Fibrillary Acidic Protein

GIS Geographic Information System

GPC Green Point Complex

GRAP Generally Recognised Accounting Practice

GSH Groote Schuur Hospital

GXP GeneXpert

HAST HIV/AIDS and Sexually Transmitted Diseases and TB

HBV Hepatitis B Virus

HCT HIV Counselling and Testing

HCW Healthcare Worker

HEV Hepatitis E Virus

HGSIL High Grade Squamous Intraepithelial Lesion

HID Human Identification

HIS Health Information System

HIV Human Immunodeficiency Virus

HIV CCMT HIV Comprehensive Care, Management and Treatment

HIV VL HIV Viral Load

HL7 Health Level 7

HLA Human Leukocyte Antigen

HOD Head of Department

HPCSA Health Professions Council of South Africa

HPV Human Papillomavirus

HTA Health Technology Assessment

IALCH Inkosi Albert Luthuli Central Hospital

IAPC Institutional Academic Pathology Committees

ICC International Conventional Centre

IgG Immunoglobulin G

IgM Immunoglobulin M

ILDAC Integrated Laboratory Data Analysis for Care

ILO International Labour Organization

INH Isoniazid

IP Intellectual Property

IPC Infection Prevention and Control

IQC Internal Quality Control

ISO International Standards Organization

IT Information Technology

ITGC IT Governance Committee

KEH King Edward VIII Hospital

KM Knowledge Management

KPI Key Performance Indicator

LAM Lipoarabinomannan

LFA Lateral Flow Assay


LFT Liver Function Test

LIS Laboratory Information System

LPA Line Probe Assay

LPA Lipoprotein(a)

MCDS Minimum Clinical Data Set

MDO Missed Diagnostic Opportunity

MDR-TB Multidrug-Resistant-TB

MSF Médecins Sans Frontiers

MTB Mycobacterium tuberculosis

MUT Mangosuthu University of Technology

NAPC National Academic and Pathology Committee

NAPHISA National Public Health Institute of South Africa

NEPAD New Partnership for Africa’s Development

NGO Non-Governmental Organisation

NHI National Health Insurance

NHLS National Health Laboratory Service

NHRC National Health Research Committee

NICD National Institute of Communicable Diseases

NIOH National Institute for Occupational Health

NMAL Nelson Mandela Academic Laboratories

NMMU Nelson Mandela Metropolitan University

NPP National Priority Programmes

OEHS Occupational and Environmental Health and Safety

OHASIS Occupational Health and Safety Information System

OHS Occupational Health and Safety

OHSS Occupational Health and Safety Systems

ORU Outbreak Response Unit

OSH Occupational Health and Safety

PAHWP Pan African Harmonisation Working Party

PathRed Pathology Research and Development (Congress)

PCR Polymerase Chain Reaction

PDP Personal Development Plans

PEPFAR President’s Emergency Plan for AIDS Relief (US)

PFMA Public Finance Management Act

PHC Primary Healthcare

PID Primary Immune Deficiency

PIVOTAL Professional, Vocational, Technical and Academic Learning

PLG PanLeucogate

PMC Peri-Mining Community

PMMH Prince Mshiyeni Memorial Hospital

PMO Project Management Office

PMTCT Prevention of Mother-to-Child Transmission

POC Point-of-Care

PPP Public Private Partnership

PSA Prostate Specific Antigen

PTS Proficiency Testing Scheme

QA Quality Assurance

QC Quality Control

QCA Quality Compliance Audit

QMS Quality Management Systems

R&D Research and Development

R&R Remuneration and Reward

RACL Relational Algebraic Capacitated Location

RDT Rapid Diagnostic Test/Testing


RHRC Remuneration and Human Resources Committee

RIF Rifampicin

RM Records Management

RPR Rapid Plasma Reagin

SADC Southern African Development Community

SAFETP South Africa Field Epidemiology Training Programme

SAIOH Southern African Institute for Occupational Hygiene

SANAS South African National Accreditation System

SANDF South African National Defence Force

SASOHN South African Society of Occupational Health Nursing Practitioners

SASOM South African Society of Occupational Medicine

SAVP South African Vaccine Producers

SAVQA South African Viral Quality Assessment

SCOPA Standing Committee on Public Accounts

SDG Sustainable Development Goal

SHE Safety Health and Environment

SIA Strip Interpretation Analysis

SL Second Line

SLA Service Level Agreement

SLID Second-Line Injectable Drugs

SLIPTA Stepwise Laboratory Quality Improvement Process towards Accreditation

SLMTA Strengthening Laboratory Management towards Accreditation

SMU Sefako Makgatho Health Sciences University

SOP Standard Operating Procedure

STI Sexually Transmitted Infection

TAT Turnaround Time

TB Tuberculosis

TBH Tygerberg Hospital

TUT Tshwane University of Technology

U&E Urea and Electrolytes

UAL Universitas Academic Laboratory

UCT University of Cape Town

UFS University of the Free State

UKZN University of KwaZulu-Natal

UL University of Limpopo

UJ University of Johannesburg

UN United Nations

UNAIDS United Nations Programme on HIV and AIDS

UNION International Union of Tuberculosis and Lund Disease

UNIV Universitas Hospital

UoT University of Technology

UP University of Pretoria

UPS Uninterrupted Power Supply

US University of Stellenbosch

UTT Universal Test and Treat

UWC University of the Western Cape

VL Viral Load

VMV Vision, Mission and Values

VUT Vaal University of Technology

WHO World Health Organization

Wits University of the Witwatersrand

WRHI Wits Reproductive Health Institute

WSP Workplace Skills Plan

WSU Walter Sisulu University


Foreword by the Chairperson

INTRODUCTION

The laboratory and pathology services that the NHLS provides makes it integral to the South African public healthcare system and its performance. Efficiency and effectiveness of both clinical and public health functions including surveillance, diagnosis, prevention, treatment, research, teaching, training and health promotion are all influenced by reliable laboratory services. Laboratories provide confirmatory diagnosis, information for improved care of patients, essential public health information and disease surveillance. The NHLS continues to provide these services at a much lower rate than what a similar basket of tests would cost in the private sector, in spite of also carrying higher costs of providing services to remote areas and deploying funds for academic and research service, which private laboratories do not have to incur. The NHLS makes laboratory services affordable for all South Africans.

In fact, without an effective laboratory service patient diagnosis and care is often compromised, expensive drug treatments are squandered, diagnoses are missed and information about public health is inaccurate. It is also impossible to measure the true effectiveness of interventions and to conduct accurate disease surveillance. Effective performance of these roles was the cornerstone of the NHLS in 2016/17.

During this past financial year, the Board has continued to diligently fulfil its governance, strategy and oversight roles. The Board is supported by its sub-committees on Audit and Risk, Information Technology Governance, Finance, National Academic Pathology, Remuneration and Human Resources and Research. There has been a focus on human resources and finance and systems and processes. This diligence led, for example, to the Board identifying and acting on matters ahead of them being identified in the audit.

The ongoing development of the NHLS is underpinned by the NHLS Act and by its core values:

Care: Caring about the environment and society

Unity of Purpose: All working together towards a common goal

Service Excellence: Valuing good work ethics and striving towards service excellence for customers

Transformation: Looking forward to the future and growing together

Innovation: Pioneering relevant research solutions and training

Integrity: Working with integrity and responsibility

The overall aim of the NHLS is to be an affordable, efficient and accessible world-class laboratory service.

OVERVIEW

The NHLS has five overall programmes: administration; surveillance of communicable diseases; occupational health and safety; academic affairs, research and quality; and laboratory services. To achieve the latter, the NHLS has a national footprint of laboratory services.

While the NHLS achieved most of its performance indicators, the Board is cognisant that there is still much to do for the NHLS to reach the performance levels it aspires to and to ensure its sustainability. Our programmes during the year under review included:

Administration – A number of measures were taken to improve administration and most of the administration performance indicators were met. However, the Board identified significant challenges in procurement systems and information technology and in payments by some

Chairperson Prof. Eric Buch


provinces, and has sought measures to address these. The Board also addressed the legacy of below inflation increases in staff remuneration. Stability in NHLS financing is dependent on provinces paying in full for their consumption. Underpayments by some provinces have put pressure on the NHLS, including on our ability to reduce our debt to our creditors and our ability to fund new equipment and IT infrastructure and systems..

Surveillance of communicable disease – The National Institute for Communicable Diseases (NICD) continues to provide exceptional surveillance and disease outbreak services. The re-engineered surveillance system is proving to be robust. The NICD’s 100% response to reported disease outbreaks within 24 hours of notification is critical to informing how the national, provincial and local government respond to outbreaks with a view to containing them. Importantly, all NICD laboratories are SANAS accredited, providing the assurance of quality.

Occupational health and safety – The National Institute for Occupational Health (NIOH) celebrated its 60th anniversary this year. It remains at the forefront of occupational health and safety in the country – providing unique and specialised services in the field and continuing to undertake unique research.

Academic affairs, research and quality assurance (AARQA) – The NHLS is not only a laboratory service. Its other mandates are education and research. The NHLS provides the academic platform for the training of medical and other health science students and for specialist training of pathologists and medical technicians and technologists. Of concern is the low pass rate of medical registrars, for which measures have been put in place to redress. Research output remains high and relevant. Improvements in grant management would advance research output.

This programme is also responsible for quality assurance in the laboratories. While internal quality assurance is ongoing the Board requires more focus on increasing the number of laboratories which are fully SANAS accredited.

Laboratory services – Laboratory services are the core of the NHLS, through which most services are provided and most revenue generated. There are 268 NHLS laboratories in the country which performed 91 313 356 tests of varying complexity and cost. The national footprint of the NHLS makes laboratory and pathology services accessible to all South Africans, reaching the most distant rural hospitals and clinics. The improvements in laboratory turnaround times are especially pleasing. We look forward to increasing the number of laboratories with state-of-the-art facilities.

STRATEGIC RELATIONSHIPS

The NHLS is a Section 3A Public Entity. It is therefore incumbent on the NHLS and the Board to forge meaningful and sustainable relations and partnerships with all the key players in the public healthcare sector. The Board values the role that the Parliamentary Portfolio Committee on Health has played in its oversight role and guidance.

The Board expresses its deep appreciation to the Minister and the Director-General of Health for their commitment to enabling the NHLS to fulfil its mandate and for their ongoing support, wisdom and attention to the NHLS. They have been ably supported by the Deputy-Director General of Health Regulation and Compliance, and his team. The Board has also been engaging and strengthening NHLS relations with the Provincial Departments of Health and we appreciate the attention that MECs and Heads of Department have given to the NHLS.

We continue our valuable, mutually beneficial partnership with universities as we strive to jointly fulfil our academic and research responsibilities and ensure that the service learning platform provided in our laboratories and pathology services are of the standard required for training future generations of health professionals and provide the platform for our cutting edge research focussed on priority diseases in South Africa and Africa.

The NHLS also engages positively with national industry bodies and associations and appreciates the role the trade unions have played in bringing concerns to our attention. Their contribution to the NHLS cannot be underestimated and will be vital to the Board as we seek to enhance our value proposition.

The NHLS is well positioned internationally and in Africa. The African Society for Laboratory Medicine (ASLM), the United States Centre for Disease Control (CDC) and many others continue to be our key stakeholders, from whom we gain and with whom we share knowledge and best practice. The NHLS will continue to engage with international structures not only with the aim of improving laboratory medicine practice in our country, but on the continent as a whole, for the advancement of Africa’s public healthcare systems.


CHALLENGES AND THE YEAR AHEAD

The NHLS is an extraordinary national asset that needs to be protected and nurtured and geared for a central role in the National Health Insurance programme. The Board has played its part in advancing and positioning the NHLS and working to ensure its sustainability, efficiency and quality.

The foundation for this is financial stability. While the NHLS has asked for (and received) low tariff increases over the past years, it is positioned to be financially secure if provinces pay in full for the services they procure and if inroads are made into historic debt. The Board trusts that ongoing engagements with the provinces will facilitate payments, without which the NHLS’ status as a going concern could be threatened. Cash flow will be enabled by the replacement of the fee-for-service model with a modified capitated reimbursement model. Tariff structures must be updated to more accurately reflect costs as some tests are being undercharged and others overcharged.

The NHLS Board will continue to drive good governance and fiscal management and seek efficiency gains to continually provide better value for money. This will require the NHLS to review its service platform to identify points of duplication and seek possibilities of merging sections of laboratories where the workload is too low for efficiency, while ensuring that we do not compromise services to remote areas. The year ahead will see a focus on increased operational efficiencies, improved turnaround times and improved customer relations.

The NHLS is privileged to be served by staff of the calibre it employs and the low turnover rate suggests that our staff are committed to the organisation. However, this cannot be taken for granted and was the basis for the Board addressing historical anomalies in remuneration in the NHLS, albeit that challenges were faced in implementation. Staff also need to be rewarded for their expertise and performance and the Board will be putting systems in place to ensure that this happens.

The Board has been concerned by the weak implementation of procurement policies including: contracts, especially those above R10 million being signed without Board approval, poor asset management, IT infrastructure essential to our systems, too few laboratories being externally accredited and the high failure rate in pathologist examinations. The Board is guiding the way forward to address these and other challenges as it expresses its commitment to ensuring the efficient and principled running of the NHLS. Step by step, obstacles to achieving this are being removed, and new and better practices are being embedded into the organisation.

The Board’s responsiveness to allegations and our vigilance in governance have led to the unearthing of some alleged irregularities and inefficiencies in the NHLS. These are being addressed in accordance with the prescripts of the Public Finance Management Act.

ACKNOWLEDGEMENTS

I would like to thank the Minister of Health, Dr Aaron Motsoaledi and the National Department of Health, for their commitment to the NHLS, to the MECs and Heads of Provincial Departments of Health for the fruitful relationships fostered during the year under review.

My heartfelt thanks to my predecessor as Chairperson of the Board, Professor Barry Schoub. He led the NHLS for most of the year under review. I thank my fellow Board members who have shown deep commitment to and passion for their roles on the Board and to its sub-committees and to the Governance Committee for the additional responsibilities they have taken on. It has been a privilege to Chair a Board with such commitment.

At the heart of any organisation are its staff. My sincere gratitude goes to all NHLS employees who put the organisation and its role in service to our country and community first and who continually strive for excellence and efficiency.

It is our duty to provide value for what is effectively public money that is being entrusted to the National Health Laboratory Service and for its Board to ensure the governance, oversight and strategy to accomplish this.

Prof. Eric Buch

Chairperson of the NHLS Board


Acting Chief Executive Officer’s Overview

GENERAL FINANCIAL REVIEW OF THE NHLS

As an agency of the Department of Health, the NHLS is mandated to provide efficient and quality assured laboratory services to almost 85% of the population that are dependent on the public health service. This mandate will become all the more important as the country strives toward the implementation of a National Health Insurance model. During the 2016/17 financial year, the NHLS has been successful in bringing about some stability to the financial status of the organisation, albeit still challenged by the outstanding debts owed to it.

During 2016/17, the NHLS observed an increase in service provision and laboratory test consumption, partly due to the Department of Health initiative for enhancing the screening of South Africans for HIV infection and tuberculosis. This resulted in an increase in billing for laboratory tests from R6.4 billion in 2015/16 to R7.0 billion in the 2016/17 financial year. Average test revenue per capita increased from 5.2% to 7% in the 2016/17 financial year. Ninety-five percent of consumption of NHLS services is incurred by the provincial Departments of Health. The NHLS, however, only received 82% of the billed amounts from the provinces, resulting in it operating under cash-flow constraints. This resulted in further suspension of capital investment, including in the field of Information Technology, which has required urgent attention for the past few years.

Furthermore, production costs at the NHLS increased from R4.8 billion to R5.8 billion, driven by factors such as direct labour cost (including salary adjustments over and above annual salary increases), unfavourable exchange rate fluctuations and growth in procurement of material. This represented a production cost increase of 21% year-on-year, compared to an increase of 14% in the previous financial year. Labour constituted 46% of the total expenses in 2016/17 compared to 37% in the previous financial year. The overall personnel costs exceeded the 2016/17 budget by 8.2%, largely driven by the negotiated addition of a 13th cheque for the A-C band staff, and compounded by the phasing in of further salary adjustments across the organisation. Material expenditure, as a percentage of revenue, remained constant at 36%. Although operational costs decreased overall by 39%, this too occurred within the context of limited capital infrastructure renewal, resulting in prolonging the already existing and much-needed investment in capital revitalisation.

Although there has been an improvement in receipt of payment for the majority of the provincial departments of Health, collection of current and accrued debt by some provincial departments of Health, continues to hamper the efficient functioning of the NHLS. As of 31 March 2017, the debt payable by provincial departments of Health amounted to R6.15 billion, including R4.7 billion that is older than 90 days. There are ongoing negotiations between the NHLS and the provinces that have accrued most of this debt, to settle these arrear amounts and enable the NHLS to continue contributing to the provision of quality laboratory services to the public health sector.

IMPROVING OPERATIONAL EFFICIENCIES

In the human resources management environment, the NHLS ensured that all leadership and critical positions were filled as speedily as possible, in both the support and laboratory situations. The turnaround time for filling positions was reduced to 59 days, against an annual target of 90 days. The NHLS prides itself in having a stable workforce that is committed to staying with and working for the organisation. This is evidenced by a turnover ratio of only 0.3% at the end of March 2017, against the set target of 10%. Furthermore, the vacancy rate stood at 5%, against a target of 18%. Going forward, the NHLS is in the process of implementing a new performance management system, to motivate high flyers and reward them at an appropriate level, while also addressing the issue of poor performance.

Acting CEO Prof. Shabir Madhi


The management of the NHLS recognises that ICT is a strategic vehicle that enables and supports the business as it strives to meet its strategic objectives. The ICT function plays a critical role, not only in enabling the business to operate, but also in improving customer service, through innovation and modernisation of the ICT infrastructure. During the period under review, the NHLS Management focused on implementing a number of initiatives to address challenges in the following three key areas:

• Unstable ICT infrastructure

• Shortage of ICT skills

• Inadequate ICT governance (processes and controls).

The ICT environment of the NHLS remains under pressure due to chronic under-investment in this critical component, required for the optimal functioning of the organisation. This has had ramifications on other key functions of the organisation, including Supply Chain Management (SCM).

The procurement of goods and services is an integral part of the overall success of the NHLS. The leadership of the organisation has to ensure that the procurement of goods and services is within the framework of the Public Finance Management Act (PFMA) and all related pieces of legislation. It is also the responsibility of management to ensure that these goods and services are procured from the right providers, at the right price, and as speedily as possible, without compromising quality. During the year under review, a number of structural shortcomings in the control of the awarding of tenders and SCM were identified. Some of these were in part due to the vigilance of NHLS employees in reporting suspected irregularities. These have been diligently followed up by the Board and the NHLS has now embarked on a rigorous programme to revamp and reposition its SCM Unit, which plays a strategic role within the organisation. The key objectives of this initiative will be to ensure adherence to all SCM processes and systems, and more importantly, to allocate properly skilled people and resources to this critical unit. The NHLS aims to have fully re-engineered this Unit and its operations by the end of the 2017/18 financial year.

Despite the financial stress faced by the NHLS during 2016/17, it has refurbished old laboratories and buildings, some of which were at various stages of decay. This improved the morale and working conditions of employees, as well as enhanced health and safety. This project will continue until all outstanding and identified laboratories have been refurbished.

IMPROVEMENT IN TURNAROUND TIMES

Total test volumes for the year under review amounted to 91 313 356. Turnaround times for various tests performed continued to show an improvement. On average, all tests were performed within the defined time frames, as indicated for some of the key tests in the table below:

Performance Indicator Full-Year Actual Annual Target Status

Percentage TB microscopy tests performed within 48 hours 95.72% 90% Achieved

Percentage TB GXP tests performed within 48 hours 96.68% 90% Achieved

Percentage CD4 tests performed within 48 hours 94.44% 85% Achieved

Percentage viral load tests performed within 96 hours 87.3% 65% Achieved

Percentage HIV PCR tests performed within 96 hours 81.90% 70% Achieved

Percentage cervical smear tests performed within 5 weeks 96.87% 50% Achieved

Percentage laboratory (FBC, U&E and LFT) tests performed within timeframes defined

85.83% 80% Achieved

The above were achieved because of the NHLS’ continued focus on improving efficiencies in its laboratories, as well as raising the bar on customer service.

CUSTOMER SATISFACTION SURVEY

During the year, the NHLS conducted an External Customer Satisfaction survey to measure how its various customers perceived the quality of NHLS services. Overall, the feedback received was positive, although there are a number of areas that need to be worked on in order to meet the needs and expectations of customers, most importantly communication, training and skills development. In general, customers were pleased with the NHLS service culture, process efficiency, handling and resolution of queries and the quality of testing services. In the coming year NHLS Management will be working on addressing the issues that customers are not satisfied with, as well as on strengthening those areas where the NHLS is doing well.


REGISTRAR PASS RATE

One critical area that the NHLS will be seeking to improve in the medium to long term is the pass rate of registrars. In the 2016/17 financial year, the pass rate stood at 36%, against a set target of 55%. Clearly, this situation needs to be addressed as a matter of urgency. Although the NHLS will be putting in more effort to improve this pass rate, it cannot do this alone and is very much dependent on its partnering academic institutions to assist. This includes ensuring greater exposure for under-graduate medical students to the pathology disciplines in their under-graduate years, failing which pathology as a career pathway will remain under-recognised and the current shortage of pathologists in South Africa will be further aggravated.

STAKEHOLDER RELATIONS

Continued engagement with customers and various stakeholders is critical to the success of the business. During the reporting period, various layers of management interacted with their stakeholders in their areas of control – mostly to reach mutual understanding on areas of common interest and possible co-operation. At corporate level, the leadership continued to engage with stakeholders on issues pertinent to the business of the NHLS. These included engagement with the National and Provincial Departments of Health, CDC (US), donor organisations, Universities, the Parliamentary Portfolio Committee on Health, and other industry bodies and associations.

PLANS FOR THE FUTURE

Operating and maintaining a financially viable and stable organisation is a top priority for the leadership of the NHLS. Management will continue to work closely with all customers to ensure timeous payment for services rendered, so that the organisation can meet its liabilities and commitments. At the same time, the organisation will continue to ensure that all monies received are utilised for fulfilling its mandate, and will do everything possible to manage its operational costs very carefully through a robust cost-containment plan.

ACKNOWLEDGEMENTS

In conclusion, I would like to thank the Board of the NHLS for its continued support towards building a strong and stable organisation.

I would also like to thank all NHLS staff members for their contribution to what has been a year of hard work, challenges and some achievements which are worthy of celebrating. We have seen some real and practical changes to the service delivery environment, but a lot still needs to be done to enable us to take the organisation to where we want it to be. I congratulate all our people, who, despite the pressures exerted on them during the period under review, have continued to maintain a dedicated and professional approach to their responsibilities, in the interest of developing a spirit of renewal and revitalisation.

The strategic direction of the NHLS continues to evolve, our efficiency and effectiveness continue to grow, and our professional relationship with our customers is moving to a more mature level. We have an important role to play in the country’s public healthcare system, and I believe that the NHLS is well placed to play its part.

Prof. Shabir Madhi

Acting CEO NHLS (effective 23 February 2017)


Board Members

Prof. Eric Buch Chairperson from January 2017

Ms Ntombi Mapukata

Ms Nelisiwe Mkhize

Dr Sibongile Zungu Vice-Chairperson

Mr Stanley Harvey

Mr Michael Shingange

Prof. Mary Ross

Prof. Barry D Schoub Chairperson until December 2016


Prof. Haroon Saloojee

Dr Gerhard Goosen

Mr Michael Manning

Mr Lunga Ntshinga

Prof. Willem Sturm

Mr Andre Venter

Dr Timothy Johan Tucker

Mr Ben Durham


Dr Balekile Mzangwa

Prof. Larry Obi

Ms Sphiwe Mayinga

Dr Zwelibanzi Mavuso

Dr Patrick Moonasar

Prof. Shabir Madhi


Statement of Responsibility and Confirmation of Accuracy for the Annual ReportTo the best of our knowledge and belief, we confirm the following:

• All information and amounts disclosed in the Annual Report are consistent with the Annual Financial Statements audited by SizweNtsalubaGobodo Inc.

• The Annual Report is complete, accurate and free from any omissions.

• The Annual Report has been prepared in accordance with the Annual Report Guidelines as issued by the National Treasury.

• The Annual Financial Statements (Part E) have been prepared in accordance with the Standards of Generally Recognised Accounting Practice (GRAP) applicable to the NHLS.

• The Accounting Authority is responsible for the preparation of the Annual Financial Statements and for the judgments made in this information.

• The Accounting Authority is responsible for establishing, and implementing a system of internal control, designed to provide reasonable assurance as to the integrity and reliability of the performance information, the human resources information and the Annual Financial Statements.

• The external auditors are engaged to express an independent opinion on the Annual Financial Statements.

In our opinion, the Annual Report fairly reflects the operations, the performance information, the human resources information and the financial affairs of the NHLS for the financial year ended 31 March 2017.

Yours faithfully

Prof. Shabir Madhi Prof. Eric Buch

Acting Chief Executive Officer Chairperson of the Board

31 July


Overview

ABOUT THE NHLS

The National Health Laboratory Service (NHLS) is a national public entity, established in terms of the National Health Laboratory Service Act, No. 37 of 2000, to provide quality, affordable and sustainable health laboratory and related public health services. It has approximately 288 laboratories across the nine provinces of South Africa, excluding depots, and serves approximately 80% of the South African population.

The NHLS is the main provider of clinical support services to the national, provincial and local departments of Health through its countrywide network of quality assured diagnostic laboratories. It also provides surveillance support for communicable diseases, occupational health and cancer.

The NHLS is managed according to the provisions of the National Health Laboratory Services Act; the NHLS Rules, gazetted in July 2007; and the Public Finance Management Act (PFMA), No. 1 of 1999. It is a state owned organisation governed by a Board and a Chief Executive Officer. It has a clear organisational structure consisting of a Head Office in Sandringham, Johannesburg, six regions (Mpumalanga and Limpopo; KwaZulu-Natal; Eastern Cape; Western and Northern Cape; Free State and North West; and Gauteng) and three institutes (National Institute for Communicable Diseases (NICD); National Institute for Occupational Health (NIOH); and National Cancer Registry). Each region is headed by a Business Area Manager who reports directly to a Chief Operations Officer. The creation of six regions is designed to ensure that the NHLS plans, agrees budgets and monitors laboratory services jointly with provincial health partners, with the intention that laboratory services are seen and accepted as part of the public health delivery system.

The NHLS delivers services throughout the public sector from academic, provincial tertiary, regional and district hospitals to primary healthcare facilities. The level of complexity and sophistication of services increases from the peripheral laboratories to the central urban laboratories (with specialised surveillance infrastructure existing at specific sites).

South African Vaccine Procedures (SAVP) is a wholly owned subsidiary of the National Health Laboratory Service and provides the following services:

• The manufacture of biologicals, namely polyvalent, Echis, Boomslang, spider, and scorpion antivenom

• Safety testing for pharmaceutical companies

• Research on routine products authorised via the animal ethics committee involving animals

• Preparation of horse and sheep serum

• Preparation and sampling of horse blood.

VISION

“Africa’s centre of excellence for innovative laboratory medicine”

MISSION

To provide quality, affordable and sustainable health laboratory medicine, provide training for health science education and undertake innovative and relevant research.


VALUES

The National Health Laboratory Service (NHLS) has identified the following values as the principles that will govern behaviour of all employees within the organisation:

Value Description

1. Care Caring about the environment and society: This involves consideration of our impact on the environment and local communities, acting with concern and sensitivity. The National Health Laboratory Services (NHLS) is committed to behave ethically and contribute to the economic development of the workforce, community and society at large. It’s about giving back to society and the environment as well as capacity building for a sustainable future.

2. Unity of Purpose All Working together towards a common goal: All employees should be united by a common vision and support each other in contributing to a beneficial and safe working environment.

Teamwork and cohesion are key and collaboration should include pooling resources and communicating about each other’s roles. Teamwork and cohesion are key and collaboration should include pooling resources and communicating about each other’s roles. Foster trust and honesty in interactions with colleagues and behave professionally. Value all contributions, treat everyone consistently and fairly and capitalize on diverse viewpoints.

Address and resolve conflicts effectively. Listen to others to fully understand and give clear, concise information when communicating expectations and accountabilities and providing feedback during coaching. Making NHLS goals a priority, using NHLS resources wisely and effectively and taking responsibility for your work.

3. Service Excellence Valuing good work ethics and striving towards service excellence for customers: This represents being committed to working with customers and building good relationships with them by understanding their needs, responding quickly and providing appropriate solutions.

We treat them with respect at all times; we are helpful, courteous, accessible, responsible and knowledgeable in our interactions. We understand that we have internal and external customers who we provide services and information to. This information should be presented in a clear and concise form, where the message is adapted to the audience.

4. Transformation Looking forward to the future and growing together: This encompasses investing in professional growth of staff by sharing knowledge and experience, peer networking, education through training and seeking opportunities to develop. It covers creative problem solving, informed risk-taking, learning from our mistakes and experiences and behaving professionally. We should adapt to change timeously and positively, address setbacks and ambiguity and adapt our thinking/approach as the situation changes. Ideas should be shared and implemented effectively. Leaders should develop innovative approaches and drive continuous improvement as well as effective and smooth change initiatives.

5. Innovation Pioneering relevant research solutions and training: Identifying needs to broad challenges present in local society. Creating space for research to be done and backing fresh ideas by bringing them to the market. Pursuing cost-effective solutions in research and training. Monitoring the impact of solutions on the challenges faced. Supporting the application of new ways of doing things at senior management level in the organisation. Encouraging pioneer personalities to operate outside the research box. Rewarding and publicising boundary-breaking initiatives. Giving credit to those to whom it is due.

6. Integrity Working with integrity and responsibility: Setting and achieving goals, consistently delivering business results while complying with standards and meeting deadlines. Displaying commitment to organisational success; proactively identifying ways to contribute and taking initiative to address problems/opportunities. Building efficiencies in the best use of public resources.


Legislative and Other MandatesThe legislative mandate of the NHLS is derived from the Constitution, the National Health Act, No. 61 of 2003, the NHLS Act, No. 37 of 2000, and several pieces of legislation, regulations and policies passed by Parliament.

CONSTITUTIONAL MANDATE

The Constitution of the Republic of South Africa Act, No. 108 of 1996, places obligations on the state to progressively realise socio-economic rights, including access to healthcare.

Section 27 of the Constitution states as follows concerning healthcare, food, water, and social security:

(A) Everyone has the right to have access to –

• healthcare services, including reproductive healthcare;

• sufficient food and water; and

• social security, including, if they are unable to support themselves and their dependents, appropriate social assistance.

(B) The state must take reasonable legislative and other measures, within its available resources, to achieve the progressive realisation of each of these rights; and

(C) No one may be refused emergency medical treatment.

THE NATIONAL HEALTH ACT, NO. 61 OF 2003

This Act provides a framework for a structured uniform health system within South Africa, taking into account the obligations imposed by the Constitution and other laws on the national, provincial and local governments with regard to health services.

The objects of the National Health Act (NHA) are to:

• Unite the various elements of the national health system in a common goal to actively promote and improve the national health system in South Africa;

• Provide for a system of co-operative governance and management of health services, within national guidelines, norms and standards, in which each province, municipality and health district must address questions of health policy and delivery of quality healthcare services;

• Establish a health system based on decentralised management, principles of equity, efficiency, sound governance, internationally recognised standards of research and a spirit of enquiry and advocacy which encourage participation;

• Promote a spirit of co-operation and shared responsibility among public and private health professionals and providers and other relevant sectors within the context of national, provincial and district health plans;

• Create the foundations of the healthcare system that must be understood alongside other laws and policies that relate to health.

THE NATIONAL HEALTH LABORATORY SERVICE ACT, NO. 37 OF 2000

The Act mandates the NHLS to provide cost-effective and efficient health laboratory services to all public sector healthcare providers; any other government institution inside and outside of South Africa that may require such services; and any private healthcare provider that requests such services. The Act also mandates the NHLS to support health research and provide training for health science education.

ADDITIONAL GOVERNANCE CONTEXTS

The NHLS is required to comply, inter alia, with the following:

• General rules made in terms of section 27 of the National Health Laboratory Service Act

• Companies Act, No. 71 of 2008

• Protocol on Good Corporate Governance in the Public Sector

• Public Finance Management Act, No. 1 of 1999 (as amended)

• Treasury Regulations issued in terms of the PFMA, 1999


• Preferential Procurement Framework Act, No. 5 of 2000

• Relevant legislation applicable to the Health Sector

• Annual Report Guide for Schedule 3A and 3C Public Entities

• King III Code on Good Corporate Governance.

OTHER POLICY INITIATIVES

The NHLS is committed, as articulated in its Strategic Plan 2015/16–2019/20, to support the following:

• The National Health Insurance (NHI), which will cover a defined basket of pathology services that are aligned with the package of services required per level of care. The pathology service will be delivered at the public healthcare level as well as at higher levels of care as defined by the NHLS Act and in line with the National Health Act. The latter requires the setting, monitoring and enforcing of quality control standards applicable to pathology services, to ensure patient safety.

• The following are functions in the National Public Health Institute for South Africa (NAPHISA)

» Communicable disease

» National Cancer Registry

» Occupational Health

» Non-communicable disease

» Injury and violence prevention.

The various departments are still to be determined but the NICD, NCR, NIOH will naturally be incorporated.


Organisational Structure

Manager: Legal Support

Senior Manager: Communication,

Marketing and PR

Company Secretary

Head: Risk Management Internal

Audit

Minister of Health

NHLS BoardAudit and Risk

Committee

Chief Executive Officer

Senior Manager: Monitoring

and Evaluation

Chief Financial Officer

Director NICD

Executive Manager: HR

Director NIOH

Executive Manager: Operations

Executive Manager: NPP

Executive Manager: AARQA

Manager SAVP

Chief Information Officer


Performance InformationPART B


Auditor’s Report: Predetermined ObjectivesThe independent auditor performed the necessary audit procedures on performance information to provide reasonable assurance in the form of an audit conclusion. The audit conclusion on the performance against predetermined objectives is included in the report to management, with material findings being reported under the Predetermined Objectives heading in the Report on other Legal and Regulatory Requirements section of the Auditor’s Report on pages 188 to 194.


Situational Analysis

SERVICE DELIVERY ENVIRONMENT

The NHLS continued to provide quality service to its stakeholders. The NHLS strives to make its services accessible to all communities by being present in all hospitals and collecting samples from all primary healthcare facilities on a daily basis.

The NHLS successfully completed the rollout of its new Laboratory Information System (LIS) in all laboratories across the country, which resulted in seamless and integrated management of laboratory data. The NHLS’ Corporate Data Warehouse (CDW) enabled the development of the first National CD4/Viral Load Monitoring Dashboard, an online tool that monitors CD4 count and viral load in HIV positive patients, which was launched in November 2016.

The NHLS’s IT infrastructure, which has been a challenge for some time, was prioritised during the reporting period, and the aim is to build a strong IT foundation based on robust and agile infrastructure with core laboratory and enterprise capabilities and innovative solutions that help build state-of-the-art laboratory services in the country.

The South African Vaccine Producers (SAVP), a wholly-owned subsidiary of the NHLS, has continued to supply strategic products, with excellent results. Excellent feedback was received from as far as Spain and Thailand, including a report from Kenya stating that “the anti-venom has saved lives in these serious snakebite areas”.

ORGANISATIONAL ENVIRONMENT

Burden of Disease

South Africa experiences a quadruple burden of disease comprising communicable diseases, non-communicable diseases and occupational health and injuries. The NHLS is the main provider of clinical support services to the national and provincial Departments of Health through its country-wide network of quality assured diagnostic laboratories. It also provides surveillance support for communicable diseases and cancer, as well as occupational and environmental health services, thereby assisting in addressing the burden of disease.

The NHLS supports government’s plans for addressing the challenges of HIV/AIDS and TB in an integrated manner. Hence, the NHLS has been and will remain an important partner in the successful implementation of the HIV/AIDS Counselling and Testing (HCT) Campaign, the Prevention of Mother-to-Child Transmission (PMTCT), and the Comprehensive Care, Management and Treatment (CCMT) Programmes through the National Priority Programme (NPP) Unit. The announcement by the Minister of Health, Dr Aaron Motsoaledi, during his budget speech on 10th of May 2016 that the country would implement the World Health Organization (WHO) evidence-based guidelines on Universal Test and Treat (UTT) by 1 September 2016; is expected to have an impact on the demand of service by the Department of Health at various levels.

The NHLS is a custodian of a wealth of valuable health data that could inform policy and guidelines through collaborative engagement and our diagnostic and monitoring services are critical in contributing to the reduction of disease progression, improving quality of care, quality of life and to ultimately reduce premature deaths.

Accessibility to Pathologist Services

Pathologists play a vital role in health laboratory services. There is a clear need to improve access to pathologists’ support outside of the major academic centres. Placement of clinical and mono-specialist pathologists at provincial, tertiary and regional laboratories is desirable. Any clinician working in the public sector should, at the least, have telephonic access to a pathologist/pathology registrar in the relevant discipline for clinically-related queries. Using a combination of on- and off-site pathologists, a pathologist ‘hotline’ for relevant queries should be established and formally staffed with duty rosters communicated to clinicians. Furthermore, pathologists should participate in the District Clinical Support Teams (DCSTs) as envisaged under the NHI, which are incorporated in the clinical platform, thereby complementing patient care, and contributing to patient outcomes by adding value in clinical decision-making.

Accessibility to Testing Services

The current model involves an extended laboratory “footprint” with numerous services provided close to the periphery. The NHLS will be guided by the directives, policies and guidelines of the National Department of Health. Accessibility to services can be extended through electronic access to test results. Doctors and nurses rely on the NHLS to inform decisions about patient diagnoses and treatment.


A technology-driven results system is far more superior in terms of time, cost and efficiency than courier-delivered paper results, and includes web-accessible results and results transmitted by SMS printers and mobile cellular devices.

Point-of-Care Testing (POCT) could revolutionise laboratory and diagnostic services for patients and health providers and improve access. Rapid technological advances have ensured that this type of testing performed near or on site, has become a reality and is the fastest growing segment of the diagnostic industry. Aspects of quality assurance and control, instrument monitoring, as well as download of results into the LIS as part of patient pathology records and public health surveillance are currently receiving attention through pilot studies conducted by the NHLS.

National Health Insurance (NHI)

Government has tabled the NHI in a bid to expand accessible healthcare to all South Africans and to provide universal coverage of health services, while controlling costs. The NHLS, together with the Department of Health are working on means to reduce laboratory diagnostic test costs through rational laboratory usage or electronic gatekeeping projects. The NHLS is optimising its strategic position as a partner to the Department of Health through collaboration at various levels, from health facilities, district, region, provincial tertiary and national central institutions to the National Department of Health.

The public pathology services in South Africa constitute less than 3% of the total health spend in the public sector, yet the benefit of pathology to health is established in both developed and developing countries, from training of undergraduate and postgraduate health professionals to clinical consultation, surveillance, infection control and prevention, diagnosis and monitoring of disease. Data from developed countries show that pathology services are important in 70–80% of critical medical decisions.

Health promotion, strongly emphasised in the NHI policy, requires a thorough understanding of the epidemiology of disease in South Africa. National laboratory surveillance is crucial to providing detailed information on the national and local level to inform policy and drive appropriate interventions. The NHLS has significant surveillance capacity, with a data powerhouse supported by a seamless LIS. In this regard, the NHLS is a national asset.

Management Information Systems

The power of this database has already been demonstrated with the national mapping of multi-drug and extensive drug resistant tuberculosis. A national LIS is required to allow retrieval of patient results as patients are referred or migrate between districts. The establishment of a business intelligence unit dealing with patient data will improve decision-making and healthcare provision. Furthermore, such a system will allow the development of consistent gatekeeping to prevent requests of unnecessary testing and reduce wasteful expenditure.

Affordability

The pathology services provided by the NHLS are more affordable than that of the private sector. Despite being cheaper, the NHLS also covers the cost of additional responsibilities, such as teaching, training, surveillance, outbreak control, scientific research, etc. For example, on the comprehensive care management treatment tests, the NHLS is on average 27% lower than the private sector.

The entity is also in the process of implementing a new funding model (Modified Capitation Funding Model), which will include the following programmes:

• Minimum Clinical Data Set (MCDS): The project serves to improve the completeness of information, relating to the patient and specimen, as received on the NHLS request form. The billing of provinces is intricately linked to the request form, which is the source document that provides a link to the clinician. The accuracy and completeness of the patient and clinician demographics is vital to improved efficiency and billing.

• Electronic Gatekeeping (EGK): EGK in a pathology laboratory is the process whereby access to laboratory testing is controlled by using rules that are programmed into the LIS. These rules will either allow or disallow laboratory test to be done. Currently a set of EGK rules (formulated by a Hospital Medical Committee) are embedded in the LIS to promote rational use of laboratory services and save costs by avoiding unnecessary testing (e.g. repetitions) without compromising patient care, while encouraging good clinical practice.

These projects will further enhance the affordability of the service.


Delivery on the Academic Mandate

Research has been mandated as a function of the NHLS by the NHLS Act, No. 37 of 2000. A balance needs to be established between the research interests of the NHLS, the National Research Priorities (NRPs) of the country, individual researchers and external funders. Clear alignment between the research and service delivery agendas should be the goal.

NHLS is mandated to support and undertake the training of pathologists and health science students and therefore has joint appointment arrangements with all universities with medical schools and some with dental schools, as well as a formal relationship with a number of comprehensive universities and universities of technology. Clinical pathology, the generalist discipline in the field, needs greater focus, as the requirement for clinical pathologists to be placed at regional laboratories increases to improve accessibility to pathology consultancy services.

Resource Constraints

Given its strategic alignment with government programmes, the NHLS must ensure that it has sufficient capacity, whether human, technology or Infrastructure, to adequately respond to the increasing burden of disease outbreak, despite the resource-constrained environment faced. This will require innovation, creativity, flexibility, agility, foresight, prioritisation of tests and services.

KEY POLICY DEVELOPMENTS AND LEGISLATIVE CHANGES

During the reporting period, there were no policy developments or legislative changes that impacted on the operations of the NHLS.

Performance Information by Programme

Introduction

Performance information enables the organisation to track how well it is progressing in meeting its planned strategic goals and strategic objectives. It is key to effective management, including planning, budgeting, implementation, monitoring and reporting. It also facilitates accountability and enables stakeholders and interested parties to track progress and identify the scope of improvement plans and better understand the issues involved (Framework for Managing Performance Information: National Treasury).

The report below does not sufficiently indicate progress made year-on-year because performance indicators have changed over the years. These changes were introduced by successive new leaders in an effort to make the performance indicators specific, measurable, achievable, realistic and time-related (SMART).

Programme 1: Administration

Programme Purpose

The administration programme plays a crucial role in the delivery of NHLS services through the provision of a range of support services, such as organisational development, Human Resources and labour relations, information technology, property management, security services, legal services, communication and integrated planning. The NHLS relies heavily on the effective management of financial resources and procurement processes as administered within the financial department. Generating sufficient revenue remains a critical focus area for NHLS to ensure financial viability and sustainability. The programme comprises four sub-programmes, as set out below.

Sub-Programme – Financial Management

The purpose of this sub programme is to manage the finances of the NHLS.

Strategic Objective 1.1: To improve the liquidity position of the NHLS

Objective Statement: Improve the cash flow position of the NHLS by improving the cash flow coverage ratio from 2.2 to 2.6 by 2020 and thereby ensure that there is liquid capital to implement key plans and priorities. Increase the current ratio rating from 2.4 to 2.6 by 2020 to optimise the margin of current assets over current liabilities.


Programme 1: Administration

1.1 Sub-Programme: Financial Management

Performance Indicator2013/14 Actual

2014/15 Actual

2015/16 Actual

2016/17 Planned Target

2016/17 Actual

Reason for Deviation from Planned Target

1.1.1 Current ratio (current assets/current liabilities)

New New New 2.9 times 2.7 Not achieved

1.1.2 Cash flow coverage ratio (operating cash in-flows/total debt)

New New New 2.7 times 2 Not achieved

1.1.3 Turnover (including other income): R’bn

5 208 5 600 New 6.8bn 7.1bn Achieved

1.1.4 Percentage of materials to sales

29.9% 31.5% New 38% 39% Achieved

1.1.5 Number of creditor days 113 125 New 115 68 Achieved

1.1.6 Number of debtor days 227 335 New 160 164 This is due to delayed payments from the provinces, especially Gauteng and KZN

Sub-Programme – Governance and Compliance

The purpose of this sub-programme is to provide support services and ensure compliance with relevant legislation.

Strategic Objective 1.2: To maintain the unqualified audit opinion of the NHLS until 2020

Objective Statement: Provide support services and ensure compliance with relevant legislation. Uphold audit outcome by ensuring continuous management practices through compliance with standard operating procedures and systems within the NHLS.

1.2 Sub-Programme: Governance and Compliance


2014/15 Actual

2015/16 Actual


2016/17 Actual

Reasons for Deviation from Planned Target

1.2.1 Audit opinion of the Auditor-General

New New Unqualified audit report

Unqualified audit report

Qualified See detailed Auditor’s Report

1.2.2 Expenditure as a percentage of turnover

New New New 96% 94% Improved efficiencies

Sub-Programme – Information Communication and Technology

The purpose of this sub-programme is to develop and implement an integrated ICT governance framework by focusing on the business continuity plan and supporting the needs and requirements of end users by 2020.

Strategic Objective 1.3: To ensure that 100% of registered users have access to the Trak Web View system by 2020

Objective Statement: Develop and implement an integrated ICT governance framework by focusing on the business continuity plan and supporting the needs and requirements of the end-users by 2020 – utilise ICT mechanisms for improved communication, marketing and branding purposes.

Strategic Objective 1.4: To increase the systems availability to 99.5% by 2020

Objective Statement: Improve and enhance systems and networks to improve and maintain uptime and accessibility of the system.


1.3 Sub-Programme: Information Communication and Technology


2014/15 Actual

2015/16 Actual


2016/17 Actual


1.3.1 Percentage of registered users utilising the system (Trak Web View)

New New New 75% 30% The NHLS will put strategies in place to encourage end-users to access the results on the web.

1.4.1 Percentage network uptime New New New 99% 99% Achieved

1.4.2 Percentage uptime of the Laboratory Information System (LIS)

New New New 99% 95% Not Achieved. This is due aging IT infrastructure.

1.4.3 Percentage uptime of Oracle

New New New 99% 99% Achieved

1.4.4 Percentage uptime of Thusano system

New New New 99% 82% Thusano crashed during the course of the year and was down for some time, this affected the average uptime.

1.4.5 Percentage calls logged resolved within prescribed timeframes

New New New 95% 83% Sometimes some jobs take longer than anticipated as a result the average turnaround time was negatively affected.

Sub-Programme – Human Resource Management

The purpose of this sub-programme is to provide effective services through efficient processes and adequate human resources.

Strategic Objective 1.5: To ensure adequate and skilled human resources by 2020

Objective Statement: Provide effective services through efficient processes and adequate human resources and improve the motivation and performance levels of all employees.

1.4 Sub-Programme: Human Resources


2014/15 Actual

2015/16 Actual


2016/17 Actual


1.5.1 Staff turnover ratio 8% 9% New 10% 5.0% Implementation of reward and remuneration system

1.5.2 Average turnaround time to fill a vacancy (in days)

New New New 90 days 62.2 days Improved efficiencies

1.5.3 Percentage of employment equity achieved

94% 82% New 83% 89% Achieved

1.5.4 Percentage of contracted employees performance review concluded bi-annually

New New New 90% 63% Management of the system needs to be improved so that tracking of the agreements can be monitored easily

1.5.5 Percentage of employees trained as per the WSP


1.5.6 Vacancy Rate New 18% 5% Posts were filled much faster, dropping the vacancy rate to 5%

Contribution to Strategic Outcome Orientated Goals

Strategic Objective Strategic Outcome Orientated Objective

To improve the liquidity position of the NHLS Sound governance and sound financial management

To maintain the unqualified audit opinion of the NHLS until 2020

To ensure that 100% of the registered users have access to the Trak Web View system by 2020

Performance driven processes and systems

To increase the systems availability to 99.5% by 2018

To ensure that the workforce of NHLS is capacitated and motivated Adequate and competent human capital


Changes to Planned Targets

There were no changes to planned targets for Programme 1 in 2016/17.

Linking Performance to Budget

Programme 1Budget 2016/17R’000

2016/17 Actual Expenditure

Over/Under Expenditure

Budget 2015/16



Administration 1 122 251 667 103 455 148 804 575 1 202 615 -398 040

Reasons for Deviations from the Budget

• Underspent in 2016/17 due to cash flow constraint (Infrastructure enhancement)

• Provision and bad debts

Programme 2: Surveillance of Communicable Diseases

Programme Purpose

The National Institute for Communicable Diseases (NICD) is a national public health institute for South Africa, which in collaboration with the NHLS, provides reference microbiology, virology, epidemiology, surveillance and public health research to support government’s response to communicable disease threats.

Strategic Objective 2.1: To uphold communicable disease surveillance level at 90% by 2020 and beyond

Objective Statement: Maintain a comprehensive communicable disease surveillance programme for leading infectious diseases associated with morbidity/mortality.

Strategic Objective 2.2: To maintain response levels at 100% for outbreaks responded to within 24 hours after notification

Objective Statement: Maintain capacity and resources to be able to respond to outbreaks of diseases within prescribed timeframes and requirements.

Strategic Objective 2.3: To ensure all NICD laboratories remain SANAS accredited

Objective Statement: Maintain standards and processes within laboratories to retain SANAS accreditation for all laboratories.

2.1 Sub-Programme: Surveillance of Communicable Disease


2014/15 Actual

2015/16 Actual


2016/17 Actual


2.1.1 Percentage of identified prioritised diseases under surveillance


2.1.2 Number of peer reviewed journals published annually

New New New 120 128 Achieved

2.1.3 Number of NICD communiqués published on website

New New 4 4 4 Achieved

2.2.1 Percentage of outbreaks responded to within 24 hours after notification


2.2.2 Percentage of provinces with appointed epidemiologists (1 per province)

New New 44% 80% 36% Some of the epidemiologists were appointed outside the period under review. There are however seven epidemiologists in seven of the nine provinces, resulting in a 67% coverage.

2.2.3 Number of field epidemiologists qualified


2.3.1 Percentage of SANAS accredited NICD laboratories





To uphold communicable disease surveillance level at 90% by 2020 and beyond

Accessible Pathology Service Footprint

To maintain response levels at 100% for outbreaks responded to within 24 hours after notification




Programme 2Budget 2016/17R’000



Budget 2015/16



Surveillance and Communicable Diseases 347 274 295 742 51 532 266 884 271 672 -4 789

Reasons for Deviation from Budget

• Underspent on direct labour in 2016/17 and 2015/16.

Programme 3: Occupational Health and Safety

Programme Purpose

The National Institute for Occupational Health is a National Public Health Institute, which provides occupational health and safety services across all sectors of the economy to improve and promote worker’s health and safety. The Institute achieves this by 1. Providing occupational medicine, hygiene and laboratory services, 2. Conducting research and 3. Providing teaching and training in occupational health and safety. Included under the governance of the National Institute for Occupational Health is the National Biobank. There are five sub-programmes in this programme.

Sub-Programme – Occupational Health and Safety

The purpose of this sub-programme is to provide quality and accredited laboratory services for all occupational health related matters.

Strategic Objective 3.1: To increase the percentage of specialised laboratories accredited from 75% to 100% by 2020

Objective Statement: Provide quality and accredited laboratory services for all occupational health related matters.

Strategic Objective 3.2: To conduct 95% of all occupational health laboratory services within turnaround times by 2020

Objective Statement: Improve efficiencies in conducting occupational health laboratory tests within predefined turn-around times.

Strategic Objective 3.3: To increase the number of occupational hygiene assessments conducted from 17 annually to 175 by 2020

Objective Statement: Prevent occupational disease and injury and promote occupational health and safety through increased number of assessments conducted.


3.1 Sub-Programme: Occupational Health and Safety


2014/15 Actual

2015/16 Actual

2016/17 planned

2016/17 Actual


3.1.1 Percentage of NHLS laboratories utilising OHASIS


3.1.2 Percentage of four specialised laboratories accredited with a relevant and recognised accreditation body

New New 88% 75% 75% Achieved

3.2.1 Percentage of occupational health laboratory tests conducted within pre-defined turnaround time


3.3.1 Number of occupational hygiene assessments conducted


3.3.2 Percentage of occupational health and safety queries answered

New New New 100% 98% Not achieved

3.3.3 Number of projects conducted with an external partner

New New 8 12 9 Many of the sections that had promised to contribute to this indicator lost senior staff members who were responsible for the projects, hence the target could not be met.

Sub-Programme – Technical Support for Occupational Health and Safety

The purpose of this sub-programme is to provide occupational medical services to the NHLS and to be the occupational medical practitioner for the NHLS.

Strategic Objective 3.4: To improve occupational health by increasing OHS assessments conducted to 1 500 (cumulatively) by 2020

Objective Statement: Provide occupational medical services to the NHLS and to be the Occupational Medicine Practitioner for the NHLS.

Strategic Objective 3.5: To perform 100% of all autopsy examinations within required timeframes by 2020

Objective Statement: Maintain existing efficiencies in performing autopsy examinations within determined timeframes.

Strategic Objective 3.6: To annually produce and update the OHS technical guidelines by 30 March 2020

Objective Statement: Develop, review and promote the implementation of an evidence-based healthcare package of occupational health and safety.

3.4 Sub-Programme: Technical Support for Health and Occupational Safety


2014/15 Actual

2015/16 Actual


2016/17 Actual


3.4.1 Number of Occupational Health and Safety assessments done for the NHLS


3.4.2 Number of queries handled (including advisory services) for the NHLS



3.4 Sub-Programme: Technical Support for Health and Occupational Safety


2014/15 Actual

2015/16 Actual


2016/17 Actual


3.5.1 Percentage of autopsy examinations completed and reported on


3.6.1 Number of OHS technical guidelines produced and disseminated

New New 1 1 0 It has been completed but procedurally still needs to be endorsed by the legal team and the unions. This process may take time depending on the stakeholders’ availability.

Sub-Programme – Occupational Health and Safety Research

The purpose of this sub-programme is to promote, conduct research and submit reports and publications pertaining to Occupational Health in South Africa.

Strategic Objective 3.7: To increase research outputs and reports to 135 by 2020 to improve the surveillance of exposure to disease, and improve management and prevention of occupational disease and injury

Objective Statement: Promote, conduct research and submit reports and publications pertaining to occupational health in South Africa.

Strategic Objective 3.8: To increase the number of organisations which have implemented OHASIS to 3 by 2020

Objective Statement: Advance the implementation of the OHASIS within the public service and state-owned enterprises by 2020.

3.7 Sub-Programme: Occupational Health and Safety Research


2014/15 Actual

2015/16 Actual


2016/17 Actual


3.7.1 Number of published scientific articles including peer reviewed publications and reports


3.7.2 Number of surveillance reports produced and disseminated


3.8.1 Number of government departments or state-owned enterprises which have implemented OHASIS


Sub-Programme – Training and Development for Occupational Health and Safety

The purpose of this sub-programme is to promote capacity building and strengthen Human Resources on Occupational Health and Safety by contributing to the teaching and training of doctors, nurses, scientists, hygienists and occupational health practitioners by 2020.

Strategic Objective 3.9: To maintain and increase OHS professionals trained on an annual basis

Objective Statement: Promote capacity building and strengthen human resources on occupational health and safety by contributing to the teaching and training of doctors, nurses, scientists, hygienists and occupational health practitioners by 2020.


3.9 Sub-Programme: Training and Development for Occupational Health and Safety


2014/15 Actual

2015/16 Actual


2016/17 Actual


3.9.1 Number of occupational medicine registrars under training


3.9.2 Number of medical scientist/experiential learners under training


3.9.3 Number of medical doctors trained in Diploma in Occupational Health programmes by the NIOH


3.9.4 Number of public health medicine registrars who received training at the NIOH


3.9.5 Number of pathology registrars rotating at NIOH per annum


3.9.6 Number of post-graduate students under supervision


Sub-Programme – National Biobank

The purposes of this sub-programme is to store and secure Bio materials and associated data to enable research through specimen storage with its associated data by using short, medium and long term storage of bio material and associated data for research purposes.

Strategic Objective 3.10: To improve turnaround times to respond to specimen requests from five to three days by 2020 by using short, medium and long-term storage of biomaterial and associated data for research purposes

Objective Statement: Store and secure biomaterials and associated data to enable research through specimen storage with its associated data by using short, medium and long-term storage of biomaterial and associated data for research purposes.

Strategic Objective 3.11: To increase international relationships with Biobank societies from two to three for sharing of information and keeping up with international Biobank best practices by 2020

Objective Statement: Establish international relationships with Biobank societies for sharing of information and keeping up with international Biobank best practices.

3.10 Sub-Programme: National Biobank


2014/15 Actual

2015/16 Actual


2016/17 Actual


3.10.1 Average turnaround time (in days) to respond to specimen requests

New New New 4 0 This is long-term storage of specimens in the biobank . During the reporting period, there were no specimen requests. In addition the ethical oversight is still being finalised

3.11.1 Maintaining Membership with International Biobank Societies

New New New 2 0 Both memberships were paid and certificates subsequently sent




To increase the percentage of specialised laboratories accredited from 75% to 100% by 2020

State-of-the-art laboratories

To conduct 95% of all occupational health laboratory services within turnaround times by 2020

To increase the number of occupational hygiene assessments conducted from 17 annually to 175 (cumulative) by 2020

To prevent occupational disease and injury and promote occupational health and safety through increased number of assessments conducted

To perform 100% of all autopsy examinations within required timeframes by 2020

Accessible to pathology service footprint

To increase research outputs and reports to 135 by 2020 to improve the surveillance of exposure to disease, and improve management and prevention of occupational disease and injury

Academic excellence

To improve turnaround times to respond to specimen requests from 5 to 3 days by 2020 by using short-, medium- and long-term storage of biomaterial and associated data for research purposes

International Best Practice Laboratory Medicine

To increase international relationships with Biobank societies for sharing of information and keeping up with international Biobank best practices from 2 to 3 by 2020

Improved stakeholder relations




Programme 3Budget 2016/17 R’000

2016/17 Actual Expenditure R’000


Budget 2015/16 R’000

2015/16 Actual Expenditure R’000


Occupational Health 107 866 93 117 14 749 109 451 90 106 19 345

Reasons for Deviations from the Budget

• Underspent on direct labour in 2016/17 and 2015/16.

Programme 4: Academic Affairs, Research and Quality Assurance

Programme Purpose

The main purpose of this programme is to strengthen the mandate of the NHLS of maintaining and providing quality assured and accredited laboratory medicine. One of the focus areas within this programme is to ensure that research is conducted to contribute to service delivery improvement and quality. The aim is to oversee and collaborate with various training institutions that contribute to the development of qualified and skilled people operating within the scientific field of pathology services. The programme comprises three sub-programmes.

Sub-Programme – Quality Assurance

The purpose of this sub-programme is to improve Total Quality Management systems, processes, equipment and resources within laboratories to increase accreditation of laboratories.

Strategic Objective 4.1: To increase levels of quality tests performed within the laboratories by ensuring laboratories are well equipped, resourced and maintained by 2020 and beyond

Objective Statement: Improve Total Quality Management systems, processes, equipment and resources within laboratories to increase accreditation of laboratories.


4.1 Sub-Programme: Quality Assurance


2014/15 Actual

2015/16 Actual


2016/17 Actual


4.1.1 Percentage of laboratories accredited (National Central)

88% 90% New 90% 90% Achieved

4.1.2 Percentage of laboratories accredited (Provincial Tertiary)

New New New 70% 47% Not achieved due to staff constraints

4.1.3 Percentage of laboratories accredited (Regional)

28% 55% 39% 40% 11%

4.1.4 Percentage of laboratories achieving Proficiency Testing Scheme (PTS) performance standards of 80%

New New New 80% 87% Improved efficiencies

Sub-Programme – Academic Affairs

The purpose of this sub-programme is to promote capacity building of health professionals to strengthen a business case for sustained development for the NHLS through the development of pathologists, medical scientists and medical technologists

Strategic Objective 4.2: To increase the pool of available pathology health professionals by 2020

Objective Statement: Promote capacity building of health professionals to strengthen a business case for sustained development for the NHLS through the development of pathologists, medical scientists and medical technologists.

4.2 Sub-Programme: Academic Affairs


2014/15 Actual

2015/16 Actual


2016/17 Actual


4.2.1 Registrar pass rate 75% 55% New 55% 29.0% This continues to be a challenge, however, the NHLS has put strategies in place to improve the pass rate.

4.2.2 Medical Technologist pass rate

New New New 55% 44.0%

4.2.3 Medical Technician pass rate

New New New 60% 45.0%

Sub-Programme – Research

The purpose of this sub-programme is to increase the knowledge base on diseases and influence the decision taken to diagnose, treat and care for these diseases through research outputs and articles published.

Strategic Objective 4.3: To increase research outputs that translate into diagnostic practice to 3 by 2020

Strategic Objective 4.4: To increase the number of peer reviewed articles published to 700 by 2020

Objective Statement: Increase the knowledge base on diseases and influence the decisions taken to diagnose, treat and care for these diseases through research outputs and articles published.


4.3 Sub-Programme: Research


2014/15 Actual

2015/16 Actual


2016/17 Actual


4.3.1 Research reports submitted to influence policy

4 4 New 4 4 Achieved

4.3.2 R-value of grants attracted for health system strengthening (Rm)

New New New R200 mil R276.6 mil Achieved

4.4.1 Percentage of personnel with library access and usage, electronic access coverage


4.4.2 Number of research outputs translated into diagnostic practice

9 12 New 10 5 Not Achieved

4.4.3 Number of peer-reviewed articles published




To increase levels of quality tests performed within the laboratories by ensuring laboratories are well equipped, resourced and maintained by 2020 and beyond

Academic excellence

To increase the pool of available pathology health professionals by 2020

To increase research outputs that translate into diagnostic practice to 3 by 2020

To increase the number of peer reviewed articles published to 700 by 2020




Programme 4Budget 2016/17



Budget 2015/16



Academic Affairs, Research and Quality Assurance - 219 241 -219 241 - 190 990 -190 990

Programme 5: Laboratory Service

Programme Purpose

This programme represents the core business of the NHLS, as mandated the NHLS Act, to provide cost-effective and efficient health laboratory services to all public sector health care providers; any other government institution within or outside the Republic that may require such services; and any private health care provider that requests such services. The Act also mandates the NHLS to support health research; and provide training for health science education.

It is anticipated that the NHLS should provide a comprehensive, accessible, quality and timeous pathology service, resulting in improved patient care. The programme comprises five sub-programmes.

Sub-Programme – Increase accessibility to NHLS services

The purpose of this sub-programme is to increase access to the NHLS laboratory services with the main aim of servicing all health care facilities as part of government health care services

Strategic Objective 5.1: To increase the accessibility of pathology services to all health facilities by 2020

Objective Statement: Access to the NHLS laboratories should be increased with the main aim of servicing all health care facilities as part of government health care services.


5.1 Sub-Programme: Increase accessibility to NHLS services


2014/15 Actual

2015/16 Actual


2016/17 Actual


5.1.1 Percentage of Regional, Provincial Tertiary and National Central Hospitals with on-site NHLS services


5.1.2 Percentage of district hospitals provided with NHLS services on site (numbers as gazetted in 2015/16)


5.1.3 Percentage of primary health care facilities provided with daily NHLS specimen collection services


Sub-Programme – Operational Efficiency

The purpose of this sub-programme is to decrease the overall turnaround times of all tests within every laboratory across South Africa and improve levels of quality of tests performed in the laboratories

Strategic Objective 5.2: To improve the total turnaround time for tests performed by 2020

Objective Statement: Decrease the overall turnaround times of all tests within every laboratory across South Africa.

Strategic Objective 5.3: To increase quality compliance of tests to 80% by 2020

Objective Statement: Improve levels of quality of tests performed in the laboratories.


2014/15 Actual

2015/16 Actual


2016/17 Actual


5.2.1 Percentage TB Microscopy tests performed within 48 hours

New New New 90% 95.72% Achieved

5.2.2 Percentage TB GXP tests performed within 48 hours


5.2.3 Percentage CD4 tests performed within 48 hours


5.2.4 Percentage Viral Load tests performed within 96 hours

86% 81% 64% 65% 87.30% Achieved

5.2.5 Percentage HIV PCR tests performed within 96 hours

70% 82% 73% 70% 81.90% Achieved

5.2.6 Percentage Cervical Smear tests performed within 5 weeks


5.2.7 Percentage laboratory (FBC, U&E, LFT) tests performed within timeframes defined


Sub-Programme – Quality of Service

The purpose of this sub-programme is to improve levels of quality of tests performed in the laboratories by ensuring that laboratories comply with quality standards set and attain accreditation status.

Strategic Objective 5.4: To increase the percentage of SANAS accredited regional laboratories to 60% by 2020

Objective Statement: Improve levels of quality of tests performed in the laboratories by ensuring that laboratories comply with quality standards set, and attain accreditation status.


5.4 Sub-Programme: Quality of Service


2014/15 Actual

2015/16 Actual


2016/17 Actual


5.4.1 Percentage compliance achieved by laboratories during annual quality compliance audits


5.4.2 Percentage of National Central laboratories that are SANAS Accredited

88% 91% New 90% 90.0% Achieved

5.4.3 Percentage of Provincial Tertiary laboratories that are SANAS Accredited

New New New 70% 47.0% Not achieved due to staff constraints

5.4.4 Percentage of Regional laboratories with SANAS Accreditation status

28% 55% 49% 45% 11.0% Not achieved due to staff constraints

Sub-Programme – State of Art Laboratories

The purpose of this sub-programme is to increase the number of adequately resourced laboratories by ensuring that all laboratories are equipped with advanced technology and equipment as well as having sufficient space and infrastructure available to perform functions.

Strategic Objective 5.5: To increase the percentage of adequately resourced laboratories to at least 90% by 2020

Strategic Objective 5.6: To ensure that 90% of capital budgets are spent to improve quality of laboratories in South Africa

Objective Statement: Increase the numbers of adequately resourced laboratories by ensuring all laboratories are equipped with advanced technology and equipment as well as having sufficient space and infrastructure available to perform functions.

5.5 Sub-Programme: State-of-the-art Laboratories


2014/15 Actual

2015/16 Actual


2016/17 Actual


5.5.1 Percentage of laboratories complying with minimum legal requirements(OSHACT) as per NHLS annual safety audits


5.5.2 Percentage of automated tests in the top 100 tests by volume list

New New New 90% 78.0% Not achieved due to a delay in the automation of ABO testing and the fact that other tests in the top 100 list cannot be automated.

5.5.3 Percentage of Provincial tertiary laboratories with pre-analytical automation

New New New 25% 6.0% Not achieved due to a delay in the procurement of automated pre-analytical analysers.

5.6.1 Percentage of capital budget spent


Sub-Programme – Productivity and Efficiency

The purpose of this sub-programme is to provide highly efficient and productive laboratory service by adopting best practices and technologies.

Strategic Objective 5.7: To ensure high levels of customer satisfaction results measured annually

Objective Statement: Provide highly efficient and productive laboratory service by adopting best practises and technologies


5.6 Sub-Programme: Productivity and Efficiency


2014/15 Actual

2015/16 Actual


2016/17 Actual


5.7.1 Customer satisfaction index 78% New 69% 75% 72.0% Area of improvement is training, skills development and communication.

5.7.2 Percentage of acceptable direct material/revenue ratio

29.9% 31.5% New 38% 39.0% Achieved

5.7.3 Percentage of pre-analytical staff meeting the productivity targets (80 registrations per 8 hour shift)

New New New 70% 43.0% Some of the clerks do other duties as well which are not related to data capturing, e.g. answering telephones, filing, scanning etc. this affected the average productivity rate.



To increase the accessibility of pathology services to all health facilities by 2020 Accessible Pathology Service Footprint

To increase quality compliance of tests to 80% by 2020

To increase the percentage of SANAS accredited regional laboratories to 60% by 2020

To improve the total turnaround time for tests performed by 2020 Performance Driven Processes and Systems

To increase the percentage of adequately resourced laboratories to at least 90% by 2020 International Best Practice Laboratory Medicine

To ensure that 90% of capital budgets are spent to improve quality of laboratories in South Africa

To ensure high levels of customer satisfaction results measured annually Improved Stakeholder Relations







Budget 2015/16



Laboratory Services 5 232 459 5 675 692 -443 233 4 966 203 4 930 749 35 454

Reason for Deviation from the Budget

Overspent on direct labour and direct material in 2016/17.


Linkage to Budget for all Programmes



Over/Under Expenditure Comments

Budget 2015/16


Over/Under Expenditure Comments

R’000 R’000 R’000 R’000 R’000 R’000

Administration

1,122,251 667,103 455,148

Underspent due cashflow constraint (Infrastructure enhancement) 804,575 1,202,615 (398,040 )

Provission and Bad debts

Surveillance and Communicable Diseases 347,274 295,742 51,532

Underspent on direct labour 266,884 271,672 (4,789)

Underspent on direct labour

Occupational Health

107,866 93,117 14,749

Underspent due to vacancies budgeted for were not filed and Operating expenses 109,451 90,106 19,345

Underspent due to vacancies budgeted for were not filed and Operating expenses

Academic Affairs. Research and Quality Assurance - 219,241 (219,241) - 190,990 (190,990)

Laboratory Services

5,232,459 5,675,692 (443,233)

Overspent on direct labout and direct material 4,966,203 4,930,749 35,454

6,809,850 6,950,895 (141,045) 6,147,112 6,686,132 (539,021)

CAPITAL INVESTMENT

2015/16 2016/17

Budget ActualOver/Under Expenditure Budget Actual


R’000 R’000 R’000 R’000 R’000 R’000

Capital Expenses 450,000 267,787 182,213 250,000 268,123 (18,123)

Total 450,000 267,787 182,213 250,000 268,123 (18,123)

Investment in capital expenditure overspend due to the roll out of computers and replacement of Innovant IT equpiments

REVENUE COLLECTION

Source of revenue

2015/16 2016/17

Estimate

Actual Amount Collected

Under Collection Estimate

Actual Amount Collected

Under Collection

R’000 R’000 R’000 R’000 R’000 R’000

Total test revenue 5,763,268 4,570,070 1,193,198 6,379,635 5,344,283 1,035,352

Of the total revenue of R6.3 billion for 2016/17, an amount of R5.3 billion was collected relating to the current year’s debt. This related to an overall recovery rate of 83% compared to 79% in the prior financial year.

There was a shortfall of R1.0 billion in collections for the 2016/17 financial year, mainly due to cash constraints from provinces. The main contributor to this shortfall was the Gauteng DoH, which short-paid the NHLS R836 million for 2016/17. R1.2 billion was collected from the provinces within the first quarter of the 2017/18 financial year, which related to 2016/17. Meetings were held with the provinces to follow up outstanding payments.

The NHLS is constantly engaging with the provinces to follow up on outstanding debts.

Annual Report 2016/17 43Annual Report 2016/17 43

Business Unit Performance

INFORMATION TECHNOLOGY

The Information Technology (IT) Department supports and services the NHLS business departments across the country on a 24 hour a day, seven day a week basis.

The IT landscape is constantly changing and the focus during the year was to ensure that NHLS IT infrastructure meets both the demands of the business and those required in terms of good IT governance and practice.

An IT modernisation project was undertaken to revamp underlying infrastructure in the light of the NHLS’ IT Digitisation Strategy. This is in line with the objective of simplifying, standardising and rationalising the NHLS’ IT infrastructure.

Laboratory Information Systems

The Laboratory Information Systems (LIS) Unit implements, maintains and provides support for the IT systems used in the laboratories.

The implementation of the TrakCare Lab LIS was completed with the installation of TrakCare Lab at the National Institute for Communicable Diseases (NICD) and the National Institute for Occupational Health (NIOH).

An updated version of the viewer for electronic results on TrakCare Lab, WebView, was installed. The updated WebView uses responsive design techniques so that the pages adapt to the size of the device from which they are being accessed. This allows for the easy viewing of results on a wide range of devices from desktop personal computers to tablets and mobile phones.

The use of WebView continues to increase, with average searches per month exceeding 2 million in 2016/17.

The implementation of patient demographic and result interfaces has continued. A new interface between the TrakCare Lab system and the Meditech system at the Inkosi Albert Luthuli Central Hospital was installed. The TrakCare Lab-Meditech interface at Universitas and Pelonomi hospitals was updated to allow order entries to be done by the hospital. An interface to the City of Johannesburg’s electronic health record was also implemented. Further HL7 interfaces were implemented at Livingstone Hospital and at Anglo American’s Witbank Highveld Hospital.

Enterprise Resource Planning

E-Business Suite (EBS) includes Financials, Supply Chain, Human Resource Management, Customer Relationship Management and Project Accounting. These products support a myriad of business processes, among them being Procure-to-Pay and Order-to-Cash cycles within the NHLS.

The NHLS Procurement Department is required to adhere to National Treasury instructions regarding travel policies. Electronic requisitions will now be captured on Oracle iProcurement while Oracle Purchasing will send purchase orders directly to the supplier. Electronic requisitions for travel, and Blanket Agreement, will therefore allow users to add prices as per quote received from the supplier. Configuration was completed in time. Further, the NHLS Grants Management function was enhanced by the automation of some of the manual business processes within the NHLS Grants Management Department.

Corporate Data Warehouse

The Corporate Data Warehouse (CDW) merges result data from the legacy LIS with that of the current LIS to provide an integrated platform with more than a decade of national pathology information that can benefit research, epidemiology and operational requirements.

Chief Information Officer

Tintswalo Shilowa


Further advances in include:

• Ongoing development and enhancement of dashboards for the monitoring and evaluation of the TB and the HIV Comprehensive Care, Management and Treatment (HIV CCMT) Programmes were made available online to stakeholders

• The alert reports distributed to provinces to assist with Linkage to Care for drug resistant TB patients and infants diagnosed with HIV have been strengthened.

• Extensive reporting has been developed in support of Antimicrobial Resistance (AMR) surveillance and the CDW is represented on the National Ministerial Advisory Committee on AMR.

Information and Knowledge Management

This department is responsible for the development, entrenchment and management of sustainable Knowledge Management (KM) and Records Management (RM) frameworks, and facilitates development, implementation and management of Enterprise Content Management (ECM) solutions.

Key initiatives include:

• ECM CS Integration with TrakCare – The integration of the ECM Content Server with TrakCare was successfully implemented. Scanned Laboratory Request Forms are accessible via the TrakCare interface, which assists laboratory staff to compare results with request forms in one interface.

• Rollout of Asynchronous Scanning Solution – The ECM Scanning Solution has been implemented in 198 laboratories, allowing laboratory request forms to be scanned into the ECM repository. Benefits of the scanning solution are that laboratory request forms are easily accessible from anywhere with permission controls in place. This offers a better auditing experience as forms are easily retrievable from TrakCare Lab or the ECM Scanning Solution.

IT Project Management Office

The NHLS established the IT Project Management Office (PMO) to create efficiencies and effectiveness in delivering IT Projects. The initial aim of establishing the PMO is to centrally run and co-ordinate all IT projects in line with best practice. The ultimate goal is to later transition the IT PMO into an Enterprise Project Management Office, which will deal with enterprise-wide programmes and projects. Currently, the PMO tracks the status, progress, costs and resources committed to numerous projects each year. The current approach brings only a limited measure of project management to projects. Because of these limitations, the PMO has been capacitated through the appointment of the Head of Department; two Project Managers; and two Project Administrators. The PMO is assessing the current state and will be implementing a Project Management Framework that will ensure that the NHLS runs the PMO in line with best practice.

IT Governance

The NHLS has established an IT governance function to ensure the effective and efficient use of IT in enabling the NHLS to achieve its goals. To date, IT governance has been involved in reviewing all IT policies, contract and licence support alignment, IT risk management and the co-ordination of action items from audits and performance reporting, amongst other matters. IT governance works in alignment with the Risk Management Office on risks and audits. The process of developing a long-term IT Strategy and Enterprise Architecture has been initiated.


COMMUNICATION, MARKETING AND PUBLIC RELATIONS

Communications Department

Communication is an important and strategic function in any organisation, hence seamlessness between stakeholders is very important. The Communications Department has therefore made every effort to ensure that the flow of information between the organisation’s internal and external stakeholders in the 2016/17 financial year has been as continuous as possible. This has been achieved through an array of services such as public and media relations, editorial, photography, graphic design and website management.

In addition, the department provides NHLS employees with timely, accurate, and clear information about policies, programmes, services and initiatives. Through these offerings, the department has achieved the following in the reporting period.

Annual Report

The 2015/16 NHLS Annual Report was co-ordinated and produced by the department as per schedule, by engaging with organisational departments in order to meet and comply with National Treasury Guidelines and delivery deadlines.

Health

Annual Report 2015/16

Figure C&M1: The 2015/16 Annual report

Launch of the New Vision, Mission and Values (VMVs)

A decision was reached by NHLS Executive Management to revise the Vision, Mission and Values (VMVs) of the organisation, to bring them in line with the organisation’s strategic plan for the 2015–2020 period. The department undertook a launch of the VMVs, in an effort to educate NHLS employees on the importance of upholding organisational values. The VMVs were unveiled in Sandringham on 29 August 2016. The department was instrumental in designing banners, posters, folders and bookmarks, which were distributed to the entire organisation for awareness purposes. Further information was also published on the NHLS website, and in the organisational internal newsletter, LabRap.


Senior Manager Tebogo Seate


Figure C&M2: Launch of the NHLS vision, mission and values at Sandringham

Conferences

The Communications Department is responsible for enhancing the reputation of the organisation and increasing its brand visibility. This is done, among others, through participation at relevant industry conferences and exhibitions. During the period under review, the NHLS participated in the following conferences and exhibitions:

21st International AIDS Conference

The department exhibited at the 21st International AIDS Conference, which is a premier meeting where leaders and the scientific community meet to collectively advance the treatment and prevention of HIV/AIDS. The AIDS Conference was held at Durban’s International Conventional Centre (ICC) from 18–21 July 2016, and created an environment for the organisation to exhibit its services and engage with stakeholders. At the conference, numerous queries, comments, suggestions as well as concerns were noted and submitted to the organisation’s leadership for follow-up.

Figure C&M3: NHLS staff manning the stand during the International AIDS Conference with Nelisiwe Mkhize, NHLS Board member, in the middle


African Society for Laboratory Medicine (ASLM) Congress

The 2016 African Society for Laboratory Medicine Congress, which was hosted from 5–8 December 2016 at Cape Town’s ICC, provided the opportunity for the department to highlight the good work carried out by the organisation. The congress served as a platform for the international laboratory medicine community to share best practices, acquire knowledge and debate innovative approaches for combatting global health threats.

External Customer Satisfaction Survey

The 2016/17 External Customer Satisfaction Survey was conducted by an independent research company. The results received showed an overall improvement in customer satisfaction levels amongst key stakeholders of the NHLS. The organisation achieved an overall score of 72%, compared to 69% in the previous financial year. It is encouraging to note that participation from external stakeholders also improved quite significantly. As service delivery is at the heart of the NHLS Strategic Plan, the department will be working with various departments in the organisation to ensure that all areas of improvement identified in the survey are sufficiently addressed in the coming financial year.

Media Relations and Editorial Services

The department continued to play an important role in facilitating NHLS presence in the media to highlight some of its work, either through media interviews, media releases or placement of advertorials in selected publications.

During the period under review, the following activities were co-ordinated by the department:

• Profiling of the organisation in Leadership Magazine as well as the Pan African Parliament publication

• Profiling of the NHLS and its employees in Science Career, a leading science career magazine targeting Grade 10 to 12 learners, in order to stimulate their interest in pursuing various careers as cytologists, microbiologists, biomedical technologists, medical scientists and medical technicians

• SABC interview on Talk SA with Prof. Himla Soodyall, in May 2016, on her paper entitled “The Lemba origins revisited: Tracing the ancestry of Y chromosomes in South African and Zimbabwean Lemba”

• Profiling of the NHLS in the African Business Network online publication

• Interview on Motsweding FM on the role of the NHLS in the public healthcare system

• Interview on the SABC’s Interface programme, about paternity testing

• Interview on Ubuntu FM on the launch of the CD4 monitoring dashboard

• Interview with Prof. Himla Soodyall on SABC regarding Mapungubwe and DNA Ancestry.

In addition to the above, the department collaborated with Umhlobo Wenene FM’s Career Guidance programme to educate listeners about haematology and cytology.

Photographic Services

The photographic function performed by the department helps to retain organisational memory by capturing and storing all organisational images. In the review period, the unit captured 2 091 images, including those submitted by the NHLS regions.

Graphic Design Services

The department continued to offer graphic design services and layout of many conceptual artworks including organisational corporate identity maintenance and branding, designing of marketing brochures and newsletters, mailer artwork pieces, exhibition stands, and display posters for conferences for various divisions, including the National Institute for Communicable Diseases and the National Institute for Occupational Health.

The service was also responsible for the formatting and layout of strategic documents for the organisation and satisfied the needs of internal stakeholders.

Web Management Services

The purpose of this function is to keep internal and external stakeholders informed of activities in the organisation by updating, uploading and communicating organisational information on the intranet, internet and on all communication channels.

During the year under review, usage of the NHLS internet and intranet was as follows:


Table CMP1: Internet usage

Year Unique Visitors Number of Visitors Pages Hits

2015/16 251 656 439 410 1 700 808 17 212 686

2016/17 526 483 909 917 6 000 501 36 191 282

Difference 274 827 470 507 4 299 693 18 978 596

Percentage 52.2 51.7 71.7 52.4

Table CMP2: Intranet usageYear Unique Visitors Number of Visitors Pages Hits

2015/16 76 482 1291 449 126 839 505 286 339 654

2016/17 86 560 1442 228 177 517 175 386 959 820

Difference 10 078 150 779 50 677 670 100 620 166

Percentage 11.6 10.45 28.6 26

Conclusion

A new Communications Strategy was developed, aimed at revitalising and repositioning the function of communication within the organisation, as well as ensuring that all communication activities are executed in a co-ordinated and orderly fashion. The strategy is further aimed at re-inventing the function so that it becomes a strategic business partner within the NHLS. The focus in the coming financial year will therefore be on:

• Implementing best practices on communication, reputation management and brand positioning

• Improving relations with all stakeholders

• Revamping and improving existing communication platforms

• Increasing NHLS visibility in the media

• Providing ongoing support to the leadership of the organisation to improve internal communication and employee engagement.


ACADEMIC AFFAIRS, RESEARCH AND QUALITY ASSURANCE

Academic Affairs and Research

Academic Affairs, Research and Quality Assurance (AARQA) incorporates the Academic Affairs and Research (AAR) and the Quality Assurance departments. It is accountable for the teaching, training and research mandate of the NHLS and oversees the quality assurance support and management programmes for the organisation. AARQA strives to ensure consistent adherence to accreditation and compliance measures across all the laboratories through the benchmarking of quality assurance standards for the NHLS. The in-house Health Technology Assessment (HTA) programme focuses on the pre-evaluation of new in vitro Diagnostic Devices in order to facilitate the effective and reliable introduction of technology advancement in the service platform and provide an opportunity for competitive and open selection of innovative approaches to diagnostic technology.

AARQA has continuously supported these activities in conjunction with its academic partners to contribute towards the NHLS mission and to promote excellence in the delivery of high-quality pathology services. A formal relationship between AARQA and the ten South African Medical Universities is endorsed through an “Umbrella Agreement” signed by all the institutions. Discussions to finalise the bilateral agreements with each of the institutions continue, with final agreement having been reached between the NHLS and the following medical universities: Walter Sisulu University and the University of the Free State. The relationship with the six Universities of Technology (UoT) and two comprehensive universities (CUs) continues through their faculties of Health and Biomedical Sciences.

In December 2016 the NHLS was included as a Schedule 1 Institution in terms of the Intellectual Property Rights from Publicly Financed Research and Development Act, No. 51 of 2008. This strengthens the position of the NHLS and the role it plays in research within the country. AARQA also completed and implemented an Intellectual Property (IP) Policy that provides guidance on the ownership of, and procedures for, the disclosure, protection and commercialisation of any form of IP generated through research supported by the NHLS.

Core Professionals in Training

The number of registrars and medical scientist interns on the training platform during the 2016/17 financial year decreased slightly by 1%, from 269 to 250. There were 220 registrars and 30 medical scientist interns (Figure A1). The NHLS has Health Professions Council of South Africa (HPCSA) accredited positions through its academic laboratories and the National Institute for Communicable Diseases (NICD) to train more than 150 interns, and only ~19% of these positions are occupied. It is planned that 50 interns will be placed in the 2017/18 financial period. Qualifying registrars and medical scientist interns contribute towards strengthening the skilled pathology laboratory workforce and improved coverage.


Acting Executive Manager

Dr Sergio Carmona


Registrars Intern Scientist

300

250

200

150

100

50

02012/13 2013/14 2014/15 2015/16 2016/17

234 242

225

242227

27201829 30

Figure A1: Number of registrars and intern scientists on NHLS platforms: 2012/13–2016/17

In total, 39 registrars wrote the examination through the College of Medicine of South Africa (CMSA) in September 2016 and 14 (36%) passed. The majority (50%) of those who passed the written examination were in the field of anatomical pathology (7), followed by medical microbiology (4) haematology (2), and clinical pathology (1) (Figure A2a). During the March 2017 CMSA examinations 42 registrars wrote and 15 passed, and the pass rate remains at 36% (Figure A2b). Figure A2c shows the distribution of registrars who passed CMSA written examinations by discipline in the 2016/2017 Financial year (September 2016 & March 2017 combined). The total pass rate for registrars for the 2016/17 period has improved. Nineteen registrars qualified as pathologists and have subsequently registered with the HPCSA (Figure A3). This is less than the number of newly qualified pathologists in the previous financial year.

Anatomical Pathology


Anatomical Pathology Chemical Pathology

Chemical Pathology

Clinical Pathology

Clinical Pathology

Clinical Pathology

Heamatology

Heamatology

Heamatology

Medical Microbiology


Microbiology

7.50%

1.7%

2.14%

4.29%

1(7%)

2(13%)

2(13%)

3(20%)

7(47%)

8 (28%)

2 (7%)

3 (10%)5 (17%)

11 (38%)

Figure A2a: Distribution of registrars who passed CMSA written examinations by discipline in September 2016

Figure A2b: Distribution of registrars who passed CMSA written examinations by discipline in March 2017

Figure A2c: Distribution of registrars who passed CMSA written examinations by discipline in 2016/2017 Financial year (September 2016 & March 2017 combined)


Qualified Pathologists Medical scientist

60

50

40

30

20

10

02012/13 2013/14 2014/15 2015/16 2016/17

40

19

48

27

19

10111114

5

Figure A3: Newly qualified pathologists and medical scientists registered with the HPCSA trained on the NHLS platform, 2012/13–2016/17

A total of 755 core pathology workers and trainees are on NHLS platforms, including the NICD and NIOH, with 578 placed in NHLS service platforms (excluding NIOH and NICD). The majority are White (242) followed by African (199), Indian (109), Coloured (26) and Chinese (2). Figure A4 shows distribution by race and profession, with the majority of the core staff category being white and the majority of the trainees being black. This will improve the transformation strategy, as trainees qualify and are placed on the platform.

Medical Scientist PathologistMedical Scientist Intern Registrar

120

100

80

60

40

20

0African Chinese Coloured Indian White

27

53

1 16

1

9 10

22

2

51

34

64

2

105

71

101

18

Figure A4: Number of pathologists, medical scientists and trainees in the NHLS platform (excluding NICD and NIOH) by race

Academic Support and Development

The NHLS continues its support for academic and development activities in close collaboration with its academic partners (Table A1). An umbrella agreement has been signed with all ten Medical Universities, and consultations on the umbrella agreements continue. Review of the umbrella agreement with the six UoTs and two CUs continues, in order to capture new and emerging developments in the higher education sector relating to the medical technologists/medical laboratory scientist professions and the changed management structure of the NHLS. Consultative meetings will be carried out with each UoT and CU to formalise bilateral agreements as soon as the umbrella agreement has been endorsed and signed by all. Quarterly National Academic Pathology Committee meetings are held with representatives from all these institutions to gather input on pathology developments and academic strategic initiatives.


Table A1: Universities in collaboration with the NHLS

University University of Technology (UoT)

Sefako Makgatho Health Sciences University (SMU) Cape Peninsula University of Technology (CPUT)

University of Cape Town (UCT) Central University of Technology (CUT)

University of KwaZulu-Natal (UKZN) Durban University of Technology (DUT)

University of Limpopo (UL) Mangosuthu University of Technology (MUT)

University of Pretoria (UP) Tshwane University of Technology (TUT)

University of Stellenbosch (US) Vaal University of Technology (VUT)

University of the Free State (UFS) Comprehensive University (CU)

University of the Western Cape (UWC) Nelson Mandela Metropolitan University (NMMU)

University of the Witwatersrand (Wits) University of Johannesburg (UJ)

Walter Sisulu University (WSU)

The research, teaching and training activities are supported through collaboration with academic partners. Funding for scientific travel and events continues to be restricted due to internal financial constraints. However, the NHLS encourages and supports these activities with the majority supported through grants and time allocation for attendance.

Driving the Research Agenda

The NHLS, in collaboration with its academic partners, published 618 journal articles in the 2016/17 financial year. More than a third of the articles were published in collaboration with UCT (201: 34%) followed by Wits University (156: 25%) and UP (97: 17%), Figure A5. Figure A6 indicates the total number of publications per discipline. The majority of publications were contributed by the departments of Medical Microbiology (136: 22%), followed by Haematology (114: 18.4%).

9.2%

7.1%

9.1%

SMU

SU

UCT

UFS

UKZN

UWC

UP

Wits

WSU

74.12%

201.33%

46.7%

97.16%

19.3%

156.25%

Figure A5: Number of peer reviewed journal articles by institution 2016/17


Number per Discipline Percentage per Discipline

160

140

120

100

80

60

40

20

0Anatomical Pathology

Chemical Pathology

Haematology Human Genetics

Immunology Medical Virology


66

10.7 13.118.4

12.3 10.4

22.013.1

81

114

7664

136

81

Figure A6: Number of peer reviewed journal articles by discipline 2016/17

PathRed Congress

The NHLS-organised Pathology Research and Development (PathRed) Congress 2017 will be held from 23 to 24 June 2017. The Congress is designed to actively develop, strengthen and support young and emerging researchers (including pathologists, medical scientists and technologists) by incorporating programmes that will promote collaboration, learning and skills development. Now organised in partnership with the Federation of South African Societies of Pathology (FSASP), the congress aims to reach out to the broader pathology community to promote clinical and diagnostic pathology excellence. The PathRed 2017 Congress will include targeted skills training and development workshops for young, emerging and junior researchers to enhance their skills on advanced technologies, scientific knowledge and initiatives in laboratory medicine. Currently South Africa faces an ever-increasing shortage of skilled pathology researchers. This Congress highlights the importance of investment in skills development programmes to address skills shortfalls and add much needed capacity to the economy. Confirmed Key Speakers include two renowned South African A-rated researchers and leaders, Prof. Shabir Madhi, Executive Director of the NICD and acting CEO of the NHLS; and Prof. Glenda Gray, Director of the South African Medical Research Council.

Grant Programme Management

The programme management section of AAR strives to improve the grant management process by consistently reviewing and interpreting grantor regulations, promoting adherence, advising principal investigators accordingly and facilitating timely processing of contracts, cost centre opening, submissions of project progress and financial reporting. The NHLS continues to attract grant funds to support research initiatives and strengthen the laboratory diagnostic platform.

During the 2016/17 financial period, R275.2 million was attracted and contractual agreements were completed with the grantors. Table A2 indicates the total grants attracted per grantor. Most of the grant funding managed by the NHLS Grants Office was from international sponsors. CDC remains the main grantor, followed by the Department of Health: Global funds.


Table A2: Total Grant Funding attracted in 2016/17

International 158 568 093

Centers for Disease Control and Prevention (CDC) 156 552 060

Epicentre Healthy Business 478 022

German Federal Ministry of Health 269 514

Makerere University College of Health Sciences 530 847

World Health Organization 737 650

South Africa 116 635 549

Department of Health: Global Fund 98 800 262

National Research Foundation 6 359 563

NHLS Research Trust 7 964 777

Poliomyelitis Research Foundation 1 275 000

South African Medical Research Council 2 235 946

Grand Total 275 203 641

Quality Assurance

The Quality Assurance (QA) Department is responsible for the following portfolios at the NHLS:

• Accreditation of laboratories

• Certification of support service departments

• Document control

• Health technology assessment (Evaluation of new in vitro Diagnostic Devices)

• Monitoring and compliance of laboratories

• Proficiency testing schemes (External quality assurance)

• Quality assurance related projects.

During 2016/17, the NHLS Executive Committee (EXCO) and other top management members showed support and commitment to the QA Department. Three significant events during the period were:

• Approval of seven new QA positions to complement available staff and increase the support offered to business (laboratories) and support services departments both at head office and throughout the country – Five of these positions were filled during the financial year and the remaining two were re-advertised more than once

• The first Quality Assurance Management Review meeting, which was held in October 2016 to address the accreditation of laboratories and certification of support departments – Two International Standards Organization (ISO) standards namely, 9001 and 15189 were reviewed at the meeting, which was attended by the NHLS (EXCO), Area Managers and Quality Assurance Managers

• Two laboratories (Kroonstad and Northdale) were recognised by the CEO for achieving 5 Stars during the World Health Organization (WHO) Stepwise Laboratory Quality Improvement Towards Accreditation (SLIPTA) audits during the Business Units meeting held in November 2016.

Figure A7: Northdale Laboratory (from left to right) Praneel Budhu – Northdale Laboratory Manager, Patience Dabula – National Manager: Quality Assurance, Joyce Mogale – NHLS CEO, Sibulele Bandezi – KZN Area Manager and Brian Naidoo – UMgungundlovu and UThukela Business Manager


Figure A8: Kroonstad Laboratory (from left to right) Jone Mofokeng – Free State and North West Area Manager, Frik Craukamp – retired Kroonstad Laboratory Manager, Noma Bosman – Free State Business Manager, Joyce Mogale – NHLS CEO and Patience Dabula – National Manager: Quality Assurance

Accreditation and Certification

Accreditation of Medical Laboratories

The number of medical laboratories accredited by the South African National Accreditation Systems (SANAS) against ISO 15189:2012 increased during the reporting period (see Figure A9). Four new facilities were accredited and another three submitted applications to SANAS but had not been assessed by the end of March 2016. The accredited laboratories are one national central laboratory in KwaZulu-Natal, two provincial tertiary laboratories in North West and Northern Cape and one regional laboratory in Mpumalanga. One national central laboratory in the Free State was suspended in June 2016. The accreditation target for 2016/17 was only achieved by the national central laboratories, with the other tiers performing below target.

The percentage of accredited laboratories per tier at the end of March 2016 was as follows:

• 94% (49/52) of national central laboratories

• 47% (8/17) of provincial tertiary laboratories

• 17% (7/42) of regional laboratories.

Figure A9 shows the percentage of accredited laboratories per laboratory tier in 2016/17 and 2015/16 compared to the target set for the 2016/17 financial year.

FY 16 Accredited Laboratories FY 17 Accredited Laboratories FY 17 Accredited Target

100

80

60

40

20

0National Central Laboratories Provincial Tertiary Laboratories Regional Laboratories

93 93 90

35

47

70

40

1614

Figure A9: Percentage of NHLS laboratories accredited per laboratory tier


ISO 9001 Quality Management System in Support of Service Departments

During the review period, the department trained 143 Support Service Department staff members (45 in 2015/16) on ISO 9001:2015 through the NHLS Skills Department. The training varied from introduction to internal audits. Little progress was made in addressing the non-conformities identified during the gap assessments conducted in the previous financial year. Human Resources remains the only department that has divisions where gap assessments had not been done by the end of March 2017.

In total, 56 QA meetings (36 in 2015/16) were held in both corporate and area offices with executives, managers, departmental QA representatives and other staff members, to address quality management topics relating to ISO 9001:2015 requirements. These included introduction/overview meetings with support service managers and staff, as well as planning/follow-up meetings with QA representatives and department managers. All the departments were part of the National Management Review Meeting.

The QA Manager for Support Services was appointed in February 2017. An ISO 9001:2015 quality manual was drafted and three standardised procedures were written.

Proficiency Testing Schemes

During 2016/17, the number of ISO 17043 accredited Proficiency Testing Schemes (PTSs) increased by one scheme (C Reactive Protein) from 17 in the previous financial year to 18 during the SANAS Reassessment in May 2016.

Centers for Disease Control and Prevention (CDC) Atlanta transferred seven more sites for Human Immunodeficiency Virus (HIV) Early Infant Diagnosis (EID) PTS to the NHLS. This increased the total HIV EID PTS participants to 83 sites in 11 countries compared to 76 in the same number of countries in the previous financial year. Further piloting of cryptococcal antigen PTS continued, with favourable results. This scheme is now offered at 71 sites.

A costing model was finalised and used to develop pricing for non-NHLS participants. Despite the high increase in price compared to previous years, the number of participants and countries enrolled increased.

PTS Enrolments

The number of countries enrolled on the NHLS PTS increased from 22 to 24 when compared to the previous financial year. The number of enrolments by NHLS laboratories, the South African private sector and laboratories in other countries increased by 16% from 3 418 in 2015/16 to 3 978 in 2016/17. Table A3 lists non-South African countries participating in the schemes in alphabetical order.

Table A3: Countries with laboratories enrolled in NHLS PT Schemes: 2016/17

No. B – G No. I – N No. N – Z

1. Botswana 9. Ivory Coast 17. Nigeria

2. Cameroon 10. Kenya 18. Rwanda

3. Democratic Republic of Congo 11. Lesotho 19. Swaziland

4. Eritrea 12. Malawi 20. Tanzania

5. Ethiopia 13. Mauritius 21. Uganda

6. Gabon 14. Mozambique 22. United States of America

7. Ghana 15. Namibia 23. Zambia

8. Guinea 16. Niger 24. Zimbabwe

Performance of NHLS Laboratories on PTS

Performance on NHLS PTSs was excellent, due to improved laboratory practice and management, with 97% of the laboratories performing above 80% (17% more than the annual target of 80%). The national average performance of laboratories increased to 90% during 2016/17 compared to 84% during 2015/16. Figure A10 shows the average performance of laboratories for the six areas as well as the national average for 2016/17 compared to the same areas in 2015/16.


National Score

Western and Northern Cape

KwaZulu-Natal

Limpopo and Mpumalanga

Gauteng

Free State and North West

Eastern Cape

0 20 40 60 12010080

9084

9079

9167

9290

8997

9086

8986

2016/17 2015/16

Figure A10: Average results of NHLS laboratories in the NHLS PTS (shown as a percentage)

QA Monitoring and Compliance

Two internal audit tools were used during the review period. The Quality Compliance Audit (QCA) tool was used in 218 laboratories that are not yet accredited. Accredited laboratories were audited using the SANAS tool.

The overall performances of laboratories audited using the QCA tool showed an increase from 82% in the previous financial year to 87% in 2016/17 (see Figure A11). In total, 83% of the laboratories achieved at least an 80% score compared to 71% in the previous financial year.

QCA % Score100

90

80

70

60

50

40

30

20

10

02007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17

62 64

77 7984 84

88

7782

87

Figure A11: Quality Compliance Audit results from 2007/08 to 2016/17

Health Technology Assessment (HTA)

The HTA unit of the NHLS complies with various ISO standards to select suppliers of equipment yielding critical results. The unit works closely with the Department of Health HTA unit, suppliers of in vitro devices in the NHLS and other international bodies to evaluate the performance of devices before they are eligible for procurement. During the reporting period, 64 projects were processed in the units, covering all disciplines.

A good working relationship now exists with suppliers since major challenges have been resolved. Quarterly meetings with the Executive of the Diagnostic Association have consequently been modified to include other common interests such as regulations and supply chain management.


QA Research or Grant Projects

Project title: Strengthening Laboratory Management Towards Accreditation (SLMTA) in South Africa

Investigator: Patience Dabula

Project period: October 2012 to date

Reporting period: April 2016 to March 2017

Funded by: President’s Emergency Plan for AIDS Relief (US) (PEPFAR), Centres for Disease Control (CDC) South Africa

Progress during the reporting period:

• 18 Laboratories were enrolled in Cohort 3 of the SLMTA programme. Baseline audits for the 18 laboratories and all laboratories that were in cohort 1 and 2 and not yet accredited were conducted during the review period.

• The African Society for Laboratory Medicine (ASLM) audited seven selected laboratories using the WHO-SLIPTA audit checklist

» Audits were conducted in June 2016

» Auditors were from Nigeria, South Africa (NHLS trainees) Tanzania, and Zimbabwe

» Figures A13 and A14 show the results of the NHLS laboratories that were audited by the ASLM in both percentages and star ratings. The baseline and exit audits were internal audits conducted by NHLS trained SLIPTA auditors while the third results are from the ASLM auditors.

Baseline Exit ASLM

100

90

80

70

60

50

40

30

20

10

0Kroonstad Kalafong Tembisa R K Khan Pelenomi Leratong Edenvale

7580

95

71

86

74 74

85

68

75

8588

7681

89

64

8277

62

77

94

Figure A12: SLIPTA results for seven laboratories audited by ASLM given as percentages


Baseline Exit ASLM

6

5

4

3

2

1

0Kroonstad Kalafong Tembisa R K Khan Pelenomi Leratong Edenvale

2 2 2 2 2

3 3 3 3 3 3

1 1

5

4 4 4 4 4 4 4

Figure A13: SLIPTA results for seven laboratories audited by ASLM given in star ratings

• Through the NHLS, South Africa is the first country to achieve multiple 5-Star ratings among the 18 countries audited by the ASLM. Nigeria was the first country to obtain a 5-Star rating but to date has only one laboratory.

» Figure A14 shows the 18 countries audited by ASLM as at September 2016, namely Angola, Botswana, Burundi, Cameroon, Ethiopia, Ghana, Lesotho, Malawi, Mozambique, Namibia, Nigeria, Rwanda, Tanzania, Uganda, South Africa, Swaziland, Zambia and Zimbabwe.

» Over the past three years, 14 NHLS staff members have been certified by the ASLM as external auditors and have audited in nine of the above countries on behalf of the ASLM.


18 Counties Visited197 Labs Audited South African Data

80

70

60

50

40

30

20

10

0

8

7

6

5

4

3

2

1

0Zero Stars

Zero Stars

One Star

One Star

Two Stars

Two Stars

Three Stars

Three Stars

Four Stars

Four Stars

Five Stars

Five Stars

43

18

48

71

14

30 0

6 6

7

2

Figure A14: Results of 197 laboratories in 18 countries audited by ASLM by September 2016

(Source: ASLM)

The first laboratory to obtain 5 Stars in South Africa was Northdale in July 2014 and the second was Kroonstad in June 2016.

Figure A15: delegates from Kroonstad Laboratory led by Mr Frik Craukamp (retired) with the NHLS CEO, Free State QA Coordinator and Kroonstad SLMTA Trainer during the closing meeting

Project title: Implementation of Proficiency Testing in South African Voluntary Counselling and Testing Sites

Investigator: Prof. Adrian Puren

Co-investigator: Patience Dabula

Project period: January 2014 to date

Reporting period: April 2016 – March 2017

Funded by: PEPFAR and CDC South Africa, with ASLM as an implementing partner


Activities during the period:

• Two staff members were appointed to the Regional Rapid Testing Quality Improvement Initiative project

• In total, 1 567 sites enrolled for Rapid HIV PTS in eight of the nine provinces in the country – the Northern Cape is the only province that has not yet enrolled

• Two PTS surveys were sent out, with results showing an improvement from 62% in the first survey to 77% in the second survey.

OTHER QA ACTIVITIES

Pan African Harmonisation Working Party (PAHWP)

Membership of the PAHWP remains 18 African countries namely: Burkina Faso, Burundi, Ethiopia, Ghana, Kenya, Malawi, Mozambique, Nigeria, Rwanda, Senegal, Sierra Leone, South Africa, Uganda, United Republic of Tanzania, Togo, Zambia, Zanzibar and Zimbabwe.

The transfer of the PAHWP website for hosting by the NHLS was completed in July 2016.

During the year, the committee continued to communicate by conference call, and finalised a draft PAHWP Constitution and Concept Note. The PAHWP was represented at the African Medicines Regulatory meeting in Senegal in May 2016, where a relationship was established between PAHWP and the African Union’s (AU) New Partnership for Africa’s Development (NEPAD). The PAHWP was represented at a WHO meeting in Geneva during October 2016, where funding was obtained for a regulatory meeting to be held in Cape Town. The London School of Hygiene and Tropical Medicine hosted this regulatory forum on behalf of the PAHWP in December 2016 during ASLM 2017. PAHWP was represented at the WHO pre-qualification team regulatory meeting, held at the same venue, to update industry, regulators and countries on the latest requirements for submissions. At the end of the meeting, the Concept Note and Draft Constitution were discussed, and agreement was reached to submit a funding application letter to AU NEPAD. In Dec 2016, the funding application letter was written and forwarded to the AU NEPAD Technical body and the committee awaits feedback.

Scientific Meetings

Table A4 reflects the seven presentations made at scientific meetings during the review period – a decrease compared to 14 in the previous financial year.

Table A4: Presentations by QA head office staff at scientific meetings

No. Meeting Name, Venue Month Title of Presentation PresenterType of Presentation

1. African Health Economics and Policy Association (AfHEA), Rabat Morocco

September 2016 NHLS HTA Programme Sarvashni Moodliar

Oral

2. 21st International AIDS Conference

July 2016 The impact of the NHLS CD4 PTS/EQA in resource limited settings – the last 13 years

Hazel Aggett Oral

3. ASLM 2016, Cape Town December 2016 Are Point-of-Care Testing sites producing reliable CD4 results? Findings from the NHLS CD4 Proficiency Testing Scheme/External Quality Assessment

Hazel Aggett Poster

4. ASLM 2016, Cape Town December 2016 The South African NHLS Proficiency Testing Scheme

Mahlatse Maleka Oral

5. ASLM 2016, Cape Town December 2016 Implementation of HIV for POCT sites in South Africa

Mahlatse Maleka Poster

6. ASLM 2016, Cape Town December 2016 Implementation and update of WHO/SLIPTA audit programme in the National Health Laboratory Service in South Africa

Patience Dabula Oral

7. ASLM 2016, Cape Town December 2016 Implementation of ISO 9001 in the NHLS Support Service departments [Human Resources, Finance, AARQA, Communication, Information Technology]: supporting laboratories with compliance to the Quality Management System

Stephina Makena Poster

NATIONAL PRIORITY PROGRAMMES

Overview

The National Priority Programmes (NPP) was established in 2010 to address the Department of Health’s (DoH) need to provide increased access to patient testing in order to enhance treatment and care programmes with a focus on certain priority areas in public healthcare, including HIV and associated opportunistic infections (such as tuberculosis), and Cryptococcal disease.

The NPP has been responsible for the implementation of several national laboratory programmes such as Early Infant Diagnosis (EID) of HIV; CD4 testing; HIV viral load (HIV VL) testing; pulmonary and extra-pulmonary tuberculosis (TB) diagnosis by molecular testing; HIV drug-resistance testing; and reflexing cryptococcal antigen testing following CD4 determination. Many lessons have been learnt, skill sets developed, and much experience has been gained during the implementation of these programmes. Implementation was extended to the specific diagnostic needs of vulnerable populations in South Africa such as the mining and peri-mining communities (PMC), and offenders in the Department of Correctional Services (DCS).

The NPP comprises a multidisciplinary technical and clinical team with members representing both the NHLS and the Wits Health Consortium. The multidisciplinary team allows for a complete systems approach in supporting the implementation process through research and development of diagnostic platforms; determining diagnostic needs; conducting site assessments; offering technical assistance during and subsequent to implementation; overseeing quality assurance aspects; providing ongoing technical and clinical training; ongoing monitoring and evaluation to ensure programme maturation; and research activities to support programme improvements such as connectivity strategies and innovations.

Implementation science is further expanded to guide surveillance for programmatic purposes; highlight disease transmission hot spots; improve linkage-to-care needs; identify service delivery gaps; and integrate management at all levels of a tiered laboratory structure.

Programme implementation and development would not be possible without public-private partnerships as has been demonstrated in research work done with suppliers of diagnostic platforms and engineering groups for application, software, and SMS Printer development. The team continues to work closely with international and national stakeholders, and funders such as the Global Fund; Centers for Disease Control and Prevention (CDC): USAID through the NGO, Right to Care; Bill and Melinda Gates Foundation; the Grand Challenges Canada; the World Health Organization (WHO); London School of Hygiene and Tropical Medicine; and UNITAID, to name a few.

Activities of the respective programmes conducted for the period 1 April 2016 to 31 March 2017 (2016/17) are detailed in this section.

National CD4 Programme

Staff

Prof. Debbie K Glencross: Director – CD4 National Priority Programme

Dr Lindi Coetzee: National CD4 Co-ordinator

Naseem Cassim: Health Economics and Data Analyst

Sherry Drury: Senior Trainer (Retired February 2017)

Sithembile Mojalefa: Trainer

Glodean Mokone: Trainer

Director Prof. Wendy Stevens

Operations Manager Dr M Pedro da Silva



Overview

CD4 testing continues as an integral component of the Comprehensive Care, Management and Treatment of HIV and AIDS (CCMT) programme in South Africa to assess the immune status of newly diagnosed HIV patients not yet on therapy or those initiating therapy for the first time. During 2016, ~3.4 million CD4 tests were performed across the organisation with a ~10% reduction in test volumes expected for the 2017/18 financial year. This reduction in testing volumes is anticipated considering the World Health Organization (WHO) 2016 HIV for Antiretroviral Therapy (ART) Guidelines, adopted locally by the DoH and the South African HIV Clinicians Society, which recommend a universal test and treat (UTT) approach where CD4 counts are no longer necessary to define patient eligibility for ART.

The welcomed UTT approach however, does not mean that there is no longer a need for CD4 counting, largely due to the local burden of HIV disease1 and reported high proportion of HIV-positive patients in South Africa who are severely immuno-compromised at time of presentation. CD4 counts thus remain an important laboratory determinant of patient immune suppression and a means to identify patients at risk for opportunistic co-infections and/or stratify long-term risk and fast-track ART for patients with CD4 counts <350cells/µl. In this context, cryptococcal meningitis (CM) is a common opportunistic infection in HIV patients, frequently associated with high mortality that can be prevented by early detection and presumptive fluconazole treatment. In this regard, reflexed cryptococcal antigen (CrAg) testing in patients whose routinely submitted CD4 samples are shown to have counts less than 100 cells/µl, has been shown to be a cost effective strategy to identify patients at risk2. With the support of the National Institute of Communicable Diseases (NICD) and the DoH, the CD4 Programme rolled out the national cryptococcal disease screening service to all NHLS CD4 laboratories by October 2016.

The CD4 unit continues to support 49 testing facilities across South Africa through training, site visits, on-site audits and preparation for SANAS accreditation for both CD4 and reflexed CrAg testing. The unit further provides for the ongoing updating of national Standard Operating Procedures (SOPs) related to all aspects of CD4 testing and monitors laboratory performance on the NHLS External Quality Assessment (EQA) programme and supplier-provided external quality assurance programme, i.e. the Beckman Coulter IQAP. Test volumes and turnaround times (TATs) are routinely monitored to focus on operational interventions and developing systems to strengthen the national laboratory network, including assessing laboratory capacity to ensure continued quality of testing with appropriately placed equipment that matches service needs and volumes of tests performed. The unit also continues its programme to evaluate new and emerging CD4 and related technologies and platforms, to support the current integrated tiered service delivery model into national CD4 and related testing services that can be performed in CD4 laboratories.

Operations

CD4 tested volumes for 2016/17 were 3.382 million, with KwaZulu-Natal processing 1.08 million samples (32% of annual volumes), followed by Gauteng with 744 000 samples (22%). CD4 volumes vary monthly between 280 000 and 305 000, and overall 109 000 less tests were performed in comparison to 2015/16 (3.2% decline) – Refer Figure NPP1 for details.

1 Coetzee LM, Cassim N and Glencross DK. Analysis of HIV disease burden by calculating the percentage of patients with CD4 counts <100 cells/µl across 52 districts reveals hot spots for intensified commitment to programmatic support. SAMJ June 2017, in press.

2 Larson BA, Rockers PC, Bonawitz R, Sriruttan C, Glencross DK, Cassim N, Coetzee LM, Greene GS, Chiller TM, Vallabhaneni S, Long L, Van Rensburg C, Govender NP. Screening HIV-Infected Patients with Low CD4 Counts for Cryptococcal Antigenemia prior to Initiation of Antiretroviral Therapy: Cost Effectiveness of Alternative Screening Strategies in South Africa. PLOS ONE |DOIi:10.1371/journal.pone.0115420. eCollection 2016 (11(7):1-23).


(a) CD4 Annual Tests Monthly400 000

300 000

200 000

100 000

0April 2016

May 2016

June 2016

July 2016

August 2016

September 2016

October 2016

January 2016

November 2016

February 2016

December 2016

March 2016

279 245 297 679305 543

276 506293 088

318 011294 577

278 280

202 347

256 751273 519

306 520

1 084 859

528 826

287 750

(b) CD4 Regional1 200 000

100 0000

800 000

600 000

400 000

200 000

0Eastern Cape Free State and

North WestGauteng Limpopo and

MpumalungaKwaZulu-Natal Western Cape and

Northern Cape

365 178 357 316

758 137

Figure NPP1: Annual CD4 volumes per month (a) and volume contributions per region (b) in 2016/17

Three MPL/CellMek platform training workshops were conducted between April 2016 and March 2017, with 24 staff members representing NHLS laboratories from Limpopo/Mpumalanga, Gauteng, Free State/North West, Eastern Cape and Western Cape. In addition, on-site training for a further 11 staff members was conducted at Ngwelezane, Polokwane and Welkom laboratories on the MPL/CellMek cytometer. Four site visits for the purpose of audits were performed at Tshepong, Tambo Memorial, Dr George Mukhari (DGM) and Rustenburg laboratories, with pre-SANAS audits conducted at Tshwane Academic and Tshepong. Twenty-three CD4 laboratory personnel from the Eastern Cape attended a PLG CD4 Testing and Quality Assurance presentation in October 2016.

During 2016/17, the new Beckman Coulter Aquios cytometer was introduced to replace the ageing XL MCL technology at lower throughput CD4 laboratories. Cytometers were initially commissioned at two pilot laboratories, Witbank and Vryheid, with the aim of developing a national SOP, and providing for TrakCare laboratory information system (LIS) interface development. Subsequently, cytometers were commissioned at a further 15 laboratories between January and June 2016, with 68 staff members trained on site and deemed competent to perform CD4 testing on the Aquios. Fit for purpose (FFP) testing was completed after each installation prior to commencing with patient testing, and once acceptable agreement between the Aquios instrument and the MPL/Cellmek system had been confirmed. Extended monitoring confirmed both instrument and operator consistency. Aquios is an automated “load and go” instrument, designed to be fully operational with minimal operator input. All 17 laboratories have maintained an in-laboratory TAT of <24 hours since implementation. The “load and go” capability of the Aquios has also contributed to a median decrease in the mean in-lab TAT from 13 to 10 hours (January to November 2016).


Figure NPP2: Aquios system training for NHLS laboratory staff

Reflexed Cryptococcal Antigen Screening

Following the successful implementation of the US CDC and NICD-funded CrAg screening pilot programme, a national NHLS-based reflexed testing programme was introduced across CD4 testing laboratories, in a staggered fashion by NHLS business region, between June and September 2016. Standardised methodology such as the Lateral Flow Assay (LFA) (IMMY, US), procured through a national tender, enabled ease of implementation with absorption and full integration into existing CD4 workflow, without the need to incur additional staffing costs. TrakCare LIS was used to automatically reflex the CrAg test in laboratories and enable worklist generation to facilitate identifying samples for CrAg testing in CD4 laboratories. Onsite training for 49 staff members was conducted at each facility and 225 operators were deemed competent prior to commencement of patient testing.

CrAg Annual Volumes CrAg Positivity Rates

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Figure NPP3: CrAg volumes for 2016/17 per NHLS region (Left). CrAg positivity rates for the same period, per region

From June 2016 (national implementation) to March 2017, 228 055 CrAg samples were processed across the NHLS, with Gauteng performing 63 538 samples (27% of national volumes), KwaZulu-Natal 45 402 (19%) and Limpopo/Mpumalanga 41 285 (18%). The lowest recorded numbers were reported for the Western and Northern Cape (9%). Positivity rates ranged from 4.57 (Western and Northern Cape) to 6.94% (KwaZulu-Natal) for this period. The current month-to-month percentage of CD4 <100 cells/µl reflexing to CrAg testing has stabilised at 98.5% since October 2017, with an average 10% of tested CD4 samples having counts <100 cells/µl.


Outputs

The unit continued its evaluation and validation of new and existing CD4 technologies in terms of laboratory and in-field studies. These included the Partec MiniPOC/CyFlow Partec CyFlow Counter instrument study (February 2017) on behalf of Sysmex for the WHO validation, as well as the Becton Dickinson FACSPPresto CD4 point-of-care (POC) instrument. Validation studies on the CrAg LFA and automated CrAg EIA systems were completed in 2016.

The unit has continued the development of the flow cytometry assay for CrAg testing to get CD4 and CrAg testing onto the sample testing platform, with built in quality control measures and direct reporting through connectivity with the LIS.

The unit participated in developing connectivity/interfacing solutions for the FACSPresto and Beckman Coulter Aquios. Development of the Becton Dickinson connectivity solution for their POC CD4 instrument continued through 2016, with a prototype tested in January 2017. Field testing is scheduled later in 2017 at a POC hub laboratory where essential HIV tests are provided as per the Integrated Tiered Service Delivery Model introduced in 2015/16.

The unit is involved in implementation science for the routine implementation of new assays, platforms, or systems. The implementation of reflexed cryptococcal antigen screening in CD4 tests across South Africa was a major focus in gaining an understanding of unit test costs, clinical cost effectiveness, pilot site evaluation, and strategies for best practice implementation.

National HIV Viral Load Programme

Staff

Dr Sergio Carmona: Pathologist in Charge

Somayya Sarang: Programme Manager

Overview

There are 16 HIV VL laboratories located throughout South Africa. These are managed by the respective laboratory managers and supported by business and area managers who are directly responsible for ensuring continuous service delivery. The role of the NPP is to ensure ongoing support, integrate, and monitor the HIV VL Programme at national level. This is achieved through site evaluation, equipment commissioning, equipment verification, accreditation support, monthly supplier meetings, monthly indicator reports, Abbott mview monitoring of laboratory performance in real time, Roche Axeda for remote connectivity when laboratories experience downtime, and the ART dashboard providing reports for internal and external stakeholders relating to test volumes and test ranges at national, provincial and district levels. On 1 September 2016, the DoH adopted the UTT strategy in line with the WHO’s guidelines, allowing all people living with HIV access to treatment, regardless of their CD4 count. In view of the guideline change and alignment with 90-90-90 targets (90% of individuals tested, 90% on treatment, and 90% virologically suppressed) it is estimated that 4 910 419 patients will be placed on ART by the 2018/19 financial year, with 6 043 407 HIV VL tests required.

Operations

The rollout of the Roche Cobas 6800 and 8800 systems, as part of the upscaling of the HIV VL Programme, was successfully completed in December 2016. The process was challenging and required substantial renovations to be undertaken within strict timelines. Eight laboratories were equipped with these systems. A combination of Cobas 6800/8800, Cobas Ampliprep Cobas Taqman (CAPCTM) and Abbott m2000 systems, equate to 41 systems that now cater for the increased HIV VL testing capacity.

Table NPP1: Instrument placements at the 16 HIV VL laboratories

Instrument Laboratory

Cobas 6800/8800 Charlotte Maxeke Johannesburg Academic (CMJAH), Inkosi Albert Luthuli Central Hospital (IALCH), Ngwelezane, Rob Ferreira, Mankweng, Port Elizabeth, Mthatha

CAPCTM Madadeni, Frere, Tshepong, Groote Schuur, Tygerberg

Abbott m2000so, m2000rt Addington, Universitas, DGM

On-site training for new staff members as well as refresher training sessions are conducted by the suppliers. Two successful Abbott super-user training workshops were conducted from 21 to 22 April 2016 and 26 to 27 October 2016. The first super-user training workshop for Roche Cobas 6800/8800 users was held at the Roche Training Centre in Midrand from the 6 to 10 February 2017. Delegates from CMJAH, IALCH, Edendale, Ngwelezane, Mankweng, Rob Ferreira (Nelspruit), Mthatha and Port Elizabeth attended. It was an intensive but fun-filled weeklong workshop, which equipped delegates to successfully operate and troubleshoot the high throughput analysers.


Figure NPP4: Delegates, the Roche training team, and the HIV VL Programme Manager attending the first HIV-1 VL Cobas 6800/8800 super-user training workshop in Midrand, Gauteng

In total, 4 494 819 HIV VL tests were performed in the 2016/17, with 88.23% of these tested within 96 hours. This exceeds the NHLS Annual Performance Plan HIV VL target of 65% within 96 hours.

Monitoring and Evaluation

All HIV viral load testing laboratories are enrolled with the QCMD EQA Programme. The EQA activities are co-ordinated by the NHLS Quality Assurance (QA) Department.

The Roche Dashboard for the Cobas 6800/8800 systems is currently in development and is expected to be available in Quarter 3 of 2017.

National HIV Genotyping Programme

Staff

Dr Kim Steegen: Chair – NHLS HIV Drug Resistance Committee, Senior Medical Scientist

Operations

Four of the five NHLS laboratories allocated to perform HIV drug resistance testing are operational. These laboratories include CMJAH, Tygerberg (TBH), IALCH and Universitas Hospital (UNIV). The fifth laboratory, DGM, is yet to complete assay validations before commencing HIV drug resistance testing. Between the four laboratories, a total of 3 575 samples was processed for HIV drug resistance testing in 2016/17, with CMJAH and TBH bearing the bulk of the volumes (Figure NPP5).

CMJAH IALH TYG UNIV

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Figure NPP5: HIV drug resistance testing volumes across the four testing facilities for the 2016/17 FY


The average accepted TAT for HIV drug resistance testing is 21 days. This target is not met consistently and requires improvement. Often the increase in TAT is related to high specimen volumes or, at the opposite extreme, small specimen volumes leading to specimen batching to maintain cost-efficiency (Figure NPP6).

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Figure NPP6: HIV drug resistance testing TAT (hours) across the four testing facilities in 2016/17


An HIV drug resistance dashboard is being developed.

National Early Infant Diagnosis Programme

Staff

Dr Sergio Carmona: Pathologist in Charge

Somayya Sarang: Programme Manager

Tsakani Mhlongo: Project Manager – Training

Nthabiseng Mhlongo: Clinical Trainer

Overview

The EID Programme aims to assist in the delivery of quality HIV diagnostic services for infants and children, in collaboration with the DoH, and other partners. This is accomplished through training, the provision of technical assistance, support visits, monitoring, and advocacy.

The Prevention of Mother-to-Child Transmission (PMTCT) guidelines were amended in 2015, requiring that a Polymerase Chain Reaction (PCR) test be done at birth for all babies born to HIV positive mothers. With this change in policy, training on EID at hospitals and maternity units around the country was deemed a priority.

The training activities include correct collection of dried blood spot (DBS) specimens, interpretation of PCR results, the significance of performing HIV rapid tests in babies, and guidance on the initiation of prophylaxis for the babies. Through these activities, it is ensured that all identified HIV-infected babies will have access to care.

Operations

Training activities have led to an increase in HIV PCR test uptake of ~14% in 2016/17 when compared to the previous fiscal period. The number of HIV PCR tests performed in 2016/17 was 524 829, of which 50.07% were tested in KwaZulu-Natal and Gauteng provinces alone. According to the NHLS Annual Performance Plan targets, 70% of HIV PCR should be tested within 96 hours. The target was exceeded, with 81.9% of HIV PCR tests being completed within the required period.


Table NPP2: Early infant diagnosis training conducted in 2016/17

Year Month HCWs Trained Province

2016 April 108 Gauteng

May 127 Gauteng, Free State

June 169 Gauteng, Mpumalanga

July 200 Limpopo, Gauteng, Free State

August 211 Free State, Limpopo, Gauteng

September 314 Gauteng, Free State, Eastern Cape

October 303 Eastern Cape, Gauteng, Free State

November 160 Gauteng, Free State, KwaZulu-Natal

2017 January 35 North West

February 42 Free State

March 674 Limpopo, Mpumalanga, KwaZulu-Natal, Gauteng

Total 2 343


The Corporate Data Warehouse (CDW) distributes monthly statistics on the top 50 facilities with the most missed diagnostic opportunities (MDO). These samples have been rejected for clinical, clerical or administrative reasons. The NPP team uses the statistics to identify the facilities that are not performing well in terms of DBS collection and communicates its findings to the provincial PMTCT co-ordinators. A strategy is then developed to improve the quality of specimen collection in problematic facilities. Through these activities, there has been a significant reduction in MDO nationally, and in 2016/17 a further decrease of 1.9% was recorded.

Outputs

The NPP team assisted Gauteng Province in developing the facility-based PCR register, which captures data elements and improves PCR result reporting.

The EID team forms part of the PMTCT working group and contributes to the national PMTCT guidelines.

National GeneXpert MTB/RIF Programme

Staff

Puleng Marokane: Programme Manager

Sylvia Ntsimane: Clinical Trainer

Mbuti Radebe: Technical Trainer

Overview

The NPP is responsible for the implementation and continued programmatic monitoring of the GeneXpert MTB/RIF Programme, for the diagnosis of pulmonary and extra-pulmonary TB disease. This test was implemented in 2011, in conjunction with the DoH, to improve TB healthcare services due to its increased sensitivity for TB detection and reduced testing time. The technology identifies the causative agent of TB, Mycobacterium tuberculosis, and its susceptibility to rifampicin (RIF), a drug used in TB treatment.

The programme oversees 326 GeneXpert instruments of varying capacity (GX4 platforms: 127, GX16 platforms: 190, GX48 platforms: one, and GX80 platforms: eight) distributed across 207 laboratories in South Africa. To date 10 566 489 tests have been performed, with 1 095 229 of these proving positive for TB, and 71 632 with detectable rifampicin resistance.

In 2014, testing was extended to vulnerable populations by the addition of seven on-site laboratories at the DCS and six mobile laboratories to support the PMC.


Figure NPP7: GeneXpert placements across nine provinces in South Africa (green circles)

Operations

From April 2016 to March 2017, 2 395 384 GeneXpert MTB/RIF tests were performed nationally by NHLS laboratories. The average national TB positivity rate among those tested was 9.13%. Rifampicin resistance detection rates have remained at an average ~6%. The number of unsuccessful tests remained below 2%, with corrective actions implemented where necessary. Ninety-five percent of national GeneXpert MTB/RIF tests were performed within 48 hours, exceeding the NHLS Annual Performance Plan target of 90% within this time.

Table NPP3: National GeneXpert MTB/RIF cumulative positivity results since programme inception

Year MTB Detected MTB not Detected Test Unsuccessful Total % MTB Detected

2011 30 073 158 197 2 915 191 185 15.73

2012 93 248 544 109 16 903 654 260 14.25

2013 201 681 1 478 260 51 773 1 731 714 11.65

2014 249 014 2 060 754 62 038 2 371 806 10.50

2015 245 916 2 343 403 57 217 2 646 536 9.29

2016 223 285 2 141 927 48 523 2 413 735 9.25

2017 52 007 494 665 10 581 557 253 9.33

Total 1 095 224 9 221 315 249 950 10 566 489 10.37

Table NPP4: National GeneXpert MTB/RIF rifampicin cumulative results since programme inception

Year Inconclusive Resistant Sensitive No RIF Result Total % RIF Resistant

2011 273 2 021 25 729 2 050 30 073 6.72

2012 1 288 7 809 83 321 830 93 248 8.37

2013 5 122 13 451 182 015 1 093 201 681 6.67

2014 6 068 16 312 226 254 380 249 014 6.55

2015 3 288 15 043 227 358 227 245 916 6.12

2016 2 390 13 815 206 939 141 223 285 6.19

2017 544 3 181 48 256 26 52 007 6.12

Total 18 973 71 632 999 872 4 747 1 095 224 6.54

The NPP team is responsible for monitoring GeneXpert testing nationally and provides training on quality procedures to healthcare workers (HCWs) such as appropriate sputum collection procedures, amongst other topics. This is an ongoing process to support DoH training in relation to the GeneXpert diagnostic and clinical algorithm.


In total, 214 laboratory staff and 1 495 HCWs were trained in 2016/17. Training activities included advanced GeneXpert workshops, which were conducted in collaboration with the supplier, Cepheid. These workshops produced 73 GeneXpert super-users across all nine provinces. In addition to training, visits to sites with poor performance were carried out and troubleshooting support provided.

Table NPP5: Laboratory staff trained on the GeneXpert system in 2016/17

Province Basic-Users Super-Users

Eastern Cape 21 17

Free state 10 2

Gauteng 50 19

KwaZulu-Natal 17 14

Limpopo 8 7

Mpumalanga 6 5

Northern Cape 0 1

North West 0 2

Western Cape 29 6

Total 141 73

Table NPP6: HCWs trained on GeneXpert-related topics in 2016/17

Year Month HCWs Trained Province

2016

April 24 Gauteng

May 304 Mpumalanga, Limpopo

June 207 Mpumalanga, Limpopo

July 84 Mpumalanga, Limpopo

August 154 KwaZulu-Natal, Mpumalanga, Gauteng

September 84 Mpumalanga

October 220 Gauteng, Mpumalanga

November 204 Mpumalanga, North West, KwaZulu-Natal

2017February 57 Gauteng, KZN

March 157 Northern Cape, KwaZulu-Natal, Gauteng

Total 1 495


All GeneXpert laboratories are monitored monthly for test volumes, instrument utilisation, in-laboratory TAT, TB positivity, RIF resistance and error rates via data extraction from the CDW. Summary reports on laboratory performance are compiled and distributed monthly to the area and business managers to assist with continuous monitoring of the programme.

Quality assurance: To monitor ongoing quality of the testing service, all NHLS GeneXpert MTB/RIF testing laboratories are enrolled in an EQA programme for GeneXpert using dried culture spots. Three dried culture spot panels (Phase 1 to 3), each containing four samples, are distributed to all GeneXpert sites and the results of submissions analysed online. The EQA Programme has reported an improved site submission rate from phase 1 to 3 for the 2016 cycle. A consolidated national report is prepared at the end of each phase and sent to the NHLS QA Department.

Connectivity: In 2016, NPP and Cepheid initiated the rollout of a real-time monitoring dashboard, C360, to enhance productivity and performance. The dashboard provides a detailed overview of national, provincial and laboratory performance by identifying geographical trends, system issues and user training needs. Installation of C360 software has been completed successfully in >70% of GeneXpert sites.


Figure NPP8: Benefits of the Cepheid C360 connectivity software

Outputs

A GeneXpert MTB/RIF Information Booklet was developed for HCWs to assist in improving TB diagnosis.

The NPP GeneXpert Programme organised a successful “Lessons Learnt” half-day seminar at the 2016 African Society for Laboratory Medicine (ASLM) Conference. The aim was to share experiences regarding the national implementation of the GeneXpert MTB/RIF Programme in South Africa.

Additional Items

Training

• The GeneXpert NPP staff took part in national and provincial TB and HIV campaigns

• Monitoring of GeneXpert specimen rejection rates was initiated, leading to targeted clinical training interventions

• Ongoing training remains a practical tool to guarantee improvement in specimen collection and labelling.

Technical and Maintenance

• Retro back covers were installed on all white skinned GX4 platforms to improve temperature related failures

• Optics cleaning maintenance was introduced for all GeneXpert platforms to reduce modular dust accumulation

• High voltage Uninterrupted Power Supply (UPS) systems were procured to ensure that GeneXpert power is maintained for at least 2 hours during power outages

• The following UPS systems were installed according to instrument capacity: 6 Kva for the GeneXpert Infinity platforms, 2 kVa for the GX16 platforms, and 1 kVa UPS for the GX4 platforms.

Software updates

In 2016, Cepheid released version 4.7b of the GeneXpert™DX Software. Software 4.7b was deployed throughout the programme in preparation for the upcoming rollout of the more sensitive GeneXpert MTB/RIF Ultra assay.

National Correctional Services TB and HIV Programme

Staff

Dr Leigh Berrie: Head – Grants and Special Programmes

Andani Phaswana: Programme Manager


Yomvula Skhosana: Clinical Trainer

S Nomatshaka, I Diale, T Mofokeng, L Mosasa, S Mona, S Sikazwe, T-L Mathews: Technicians

Overview

Previously, the Right to Care Global Fund Grant focused on 12 selected correctional centres and ensured that seven on-site GeneXpert MTB/RIF laboratories were set up. The seven centres with NHLS laboratories are Barberton, Kgosi Mampuru, Mondeor, Groenpunt, Westville, St. Albans and Pollsmoor prisons.

The DCS TB and HIV Programme received additional funding from the Global Fund to ensure that inmates are screened and tested for TB, HIV and sexually transmitted infections (STIs) in all the correctional centres in the country. The CDC President’s Emergency Plan for AIDS Relief (US) (PEPFAR), through the Aurum Institute, provided additional funding, ensuring HCWs at the DCS centres are trained on the GeneXpert MTB/RIF diagnostic testing algorithms, SOPs relating to specimen collection, infection prevention and control (IPC), and internal quality control for POC HIV testing. Funds were also secured for adequate monitoring and evaluation and to enrol all DCS centres in the internal quality control (IQC)/EQA proficiency HIV testing schemes.

Operations

DCS TB Programme

In total, 63 121 GeneXpert MTB/RIF tests were performed in 2016/17 (with 81.1% of tests conducted in four provinces: Western Cape, Eastern Cape, Gauteng, and KwaZulu-Natal); 3 109 tests were positive for TB (4.9%); and 145 (4.7%) detected rifampicin resistance. Rates of rifampicin resistance were highest in the Western Cape (32%) followed by Eastern Cape (20%), KwaZulu-Natal (19.3%), Gauteng (11.7%), and 17.2% in the remaining five provinces.

DCS HIV Programme

The number of CD4 tests performed in 2016/17 was 35 118, of which 1 530 (4.3%) had CD4 counts <100 cells/µl. Of the 17 199 HIV VL tests performed for the same period, 6 135 (35.7%) registered >1 000 copies/ml with three provinces (Gauteng, KwaZulu-Natal, and Mpumalanga) contributing 62.6% of these.

Training Activities

IPC training was given to 243 DCS officials in 116 (48.9%) centres across the 48 management areas. Training on appropriate specimen collection and handling was delivered at 223 (92.1%) of DCS centres. All 48 management areas were visited at least once (35% of areas visited at least twice) and meetings were held on matters related to service delivery.

Figure NPP9: Nomvula Skhosana (front row, far right) at a training session at Modderbee Correctional Facility Centre, Gauteng


Training for HIV IQC was provided to 62 DCS centres (25.6%) with quality controls now being run weekly. This will significantly increase result reliability. It is intended that all 242 DCS centres will be performing internal quality controls by March 2018.

With respect to GeneXpert diagnostic testing algorithm training, 138 DCS centres (57%) were targeted. The training leads to improved specimen collection with reductions in specimen rejections and thus increases in TB detection.


Test data from the DCS TB and HIV Programme, rates of specimen rejections, and SMS Printer functionality are monitored by programme staff.

All 242 DCS centres have been enrolled on the NHLS EQA scheme and will participate from the first quarter of 2017/18.

Courier routes for specimen collection at the DCS centres were re-aligned to improve testing TAT.

Mine and Peri-Mining Communities TB and HIV Programme

Staff

Abel Makuraj: Programme Manager

P Marule, F Kwinda, L Mamafa, T Motlogeloa, A Jonas, M Muntswu: Mobile Drivers

J Phasha, M Booysen, O Mampe, M Kgotle, M Marumule, M Nkhobo: Mobile Technicians

Overview

Through financial support from the Global Fund, the NHLS, together with the Aurum Institute, was appointed by the DoH to provide services aimed at improving TB and HIV/AIDS management for vulnerable peri-mining communities, estimated at around 600 000 people in six mining districts. The six districts with a high proportion of mines are Lejweleputswa, Dr Kenneth Kaunda and Bojanala districts in the North West; West Rand in Gauteng; and Waterberg and Sekhukhune in Limpopo. The NPP has provided six GeneXpert-mobile units within these communities since January 2015 to undertake GeneXpert MTB/RIF testing for TB diagnosis. The mobile units consist of vans equipped as mini-laboratories, with refrigeration facilities, water supply, and generators supplying electricity for the analysers. There are four GXP4 platform analysers per mobile laboratory, each with a testing capacity of 16 GeneXpert MTB/RIF tests every two hours. The mobile laboratories are supported by an LIS that provides patient results on site. Six drivers and six technologists have been employed through the Global Fund Grant to conduct the required testing.

Operations

The mobile units support the staff of the Aurum Institute during TB campaigns and undertake door-to-door visits to the informal settlements. Visits include taxi ranks, and mines. Further, provincial and district heath campaigns are supported by the mobile units, and on-site testing services are provided.

This PMC programme tested 21 356 GXP specimens in 2016/17, of which 232 (1.08%) specimens tested positive for TB, with 16 (6.9%) identifying rifampicin resistance. For the new fiscal year, the Aurum Institute has changed its TB strategy to contact tracing and this will likely increase TB detection rates.

Figure NPP10: PMC Carletonville GeneXpert mobile laboratory conducting testing at Randgate Clinic, 13 September 2016


Regular site visits and meetings are conducted with the mobile team members, parent laboratory managers, district DoH, and Aurum Institute teams for monitoring purposes in terms of meeting the set targets as stipulated by the grant funders. Quarterly meetings between the district health partners and DoH are intended to foster better relations and optimise resources. At these meetings, TB transmission hot spots are identified and action plans developed to improve the TB campaigns.

National and Provincial HIV Counselling and Testing/Tuberculosis Campaigns and Events

Overview

The NPP takes part in various HIV counselling and testing/TB campaigns throughout the year, including activities around World TB Day, World AIDS Day, and others. The GeneXpert mobile laboratories are deployed at the events and provide on-site TB diagnostic services.

Campaigns Supported

Figure NPP11: PMC Jane Furse Mobile Unit at Heritage Day celebrations at Babubatse Primary School, 22nd September 2016

Figure NPP12: PMC Mobile team active at the DOH/Rustenburg Rotary Club TB Outreach Programme, 13 October 2016

Figure NPP13: NUM National Mineworker’s TB Campaign, James Motlatsi Stadium, 22 October 2016


Figure NPP14: Welkom Provincial World AIDS Day event, 1 December 2016

Figure NPP15: National Department of Transport Health Campaign, Bosman Station in Pretoria, 8 December 2016

Figure NPP16: National World TB Day event, Clive Solomon Stadium, Bloemfontein, 31 March 2017

Figure NPP17: NHLS and Aurum Institute partners at the National World TB Day event, Hoffman Square, Bloemfontein, 31 March 2017


Other Events Attended

• 3 to 8 December 2016 – Meeting of the African Society for Laboratory Medicine (ASLM), Cape Town

• 10 February 2017 – National Department of Transport Campaign, Bosman Station in Pretoria

• 24 March 2017 – Gauteng World TB Day event, Saul Tsotetsi Stadium, Carletonville

• 14 to 18 March 2017 – Department of Transport TB Campaign, Bosman Station in Pretoria.

mHealth Programme

Staff

Lynsey Isherwood: Programme Manager

Floyd Olsen: Special Projects Manager

Portia Madumo: POC Co-ordinator – Rapid Testing

Overview

The mHealth programme was established in March 2014, with the primary aim of extending NPP services to HIV and TB health services in South Africa, using mobile technology. The unit began with the development of simple android notification applications (apps), and has now been extended to include automated readers and mobile POC technologies.

Laboratory Result Notification and Linkage-to-Care Applications: Treat-TB Notify Application

This is an android mHealth app, developed to send real-time notifications to pre-authenticated end-users (HCWs, TB co-ordinators and tracing/injection teams) of newly diagnosed drug-resistant TB (DR-TB) patients. Currently, the app is only accessible to the Ekurhuleni district of Gauteng and six TB Co-ordinators are receiving these notifications via their personal mobile devices. The Gauteng DoH has requested a provincial rollout. Therefore, an additional 50 TB Co-ordinators have been trained, in preparation for the rollout. Through separate funding, Version 2 of Treat-TB app has been developed by TLC Engineering. This updated version incorporates newly diagnosed drug-sensitive TB patients. One hundred android phones have been purchased to support the rollout. The procured android mobile will be ‘locked’ through an APN connection, which will allow for remote device management and monitoring. Exception reporting tools have been designed to notify programme managers of patients not linked into care within three days of diagnosis.

Laboratory Result Notification and Linkage-to-Care Applications: miLINC Application

A prospective observational cohort research of persons with symptoms of TB presenting to primary healthcare clinics in peri-urban KwaZulu-Natal, was conducted between June and November 2015. Enrolment was undertaken by clinic staff into the mobile interface Linkage to Care miLINC app. A specimen bar code was placed on the sputum specimen bottle and was scanned directly into miLINC, creating an immediate direct patient-specimen match. The sputum specimen followed the standard laboratory submission processes and the results were transmitted from the NHLS to miLINC. TB results were available immediately on miLINC for the clinic nurse, while linkage officers were simultaneously notified of rifampicin resistant patients for tracing and linkage. Three clinics enrolled 4 939 patients. Among 1 065 patients without results, the majority (56.5%) resulted from rejection at laboratory level. All rejected specimens resulted in an immediate notification for repeat testing. TB was identified in 292/2 880 (9.9%) patients and rifampicin resistant TB in 38/292 (13%). Of the DR-TB patients, 33/38 (87%) were traced. Patients with DR-TB were linked to care and appropriate anti-TB treatment was initiated within ~ 2 days 23 hours. The combined impact of rapid diagnosis and enrolment with miLINC resulted in linkage and initiation of DR-TB treatment in <3 days from diagnosis. The DoH evaluated the miLINC programme through an independent company ‘Cyber Pro Consulting’, commencing on 25 July 2016. The evaluation ended in December 2016 and the decision was taken to discontinue the project.

Laboratory Result Notification and Linkage-to-Care Applications: SmartLTC Application

This was a multi-site randomised controlled study “Do smartphones increase linkage to and retention in care in newly diagnosed HIV-positive patients in Johannesburg?” The Principal Investigator was Prof. WDF Venter, Wits Reproductive Health Institute (WRHI), funded by The World Bank. The app was designed by the NPP, in conjunction with the WRHI. The primary aim was to educate newly diagnosed HIV patients on the CD4 and HIV VL results, thereby empowering them to take charge of their own health. Recruitment status – target was 1 000 patients with no mobile phone, and 1 000 patients with access to android mobile devices. The study ended in September 2016 and was replaced by a new programme, “Phila SMS”. This is part of a decanting project at one of the City of Johannesburg’s healthcare facilities (decanting of patients to community sites for HIV treatment – aiming to decongest clinics). Phase 1 was launched on 26 September 2016 and involves only the SMS platform. Phase 2 will see the launch of an app version during the first quarter of 2017.


Automated Rapid Diagnostic Testing (RDT) Devices: Fio Deki Readers

“Feasibility and performance of an automated rapid test reader for improving HIV Counselling and Testing services in South Africa” (Ethics Approval No: M150160). The Deki is an automated portable reader with touchscreen technology that provides data capture, quality control checks, workflow prompting and automated result analysis for any standard, commercially available lateral flow test strip. The Deki Reader is used to capture an image of a processed RDT (after exposure to a clinical specimen), analyse the captured image, and provide a qualitative determination of the presence or absence of a visual marker that results from the reaction between the RDT reagents and the clinical specimen. The Deki Reader is an alternate to performing visual interpretation of the RDT result.

Figure NPP18: An illustration of the Fio Deki Reader and placement of the RDT

The NPP conducted a laboratory evaluation of the Deki Reader (ethics approval #M150160) to determine the concordance between automated result interpretations by the Deki versus the visual result interpretation of various commercially available HIV rapid tests. Overall, the Deki reader had a 99.5% concordance (for 774 individual RDTs measured) with visual result interpretation. A clinical evaluation will be conducted to determine the performance and feasibility of the Deki reader within the South African healthcare setting. The evaluation data was presented to the DoH on 21 January 2017 and approval for the clinical evaluation was given. The clinical evaluation protocol has been developed together with Right to Care (ethics approval #M150160). Twenty Deki readers will be available for this phase of the study (15 in use and five spare). Five Deki readers will be placed at the healthcare service of the Right to Care offices, Helen Joseph Hospital, and 10 readers will be placed with community teams working within sub-districts A and B of the Johannesburg Health District. The evaluation is divided into two phases: 1. Phase A - Evaluation of the Deki reader robustness, operability, data capture and connectivity capabilities (2 months), and 2. Phase B - Determine the performance (concordance) between visual interpretation by a HCW and the automated Deki interpretation of residual HIV rapid tests used in HCT (4 months).

Automated Rapid Diagnostic Testing (RDT) Devices: MobiHealth

“Laboratory performance evaluation of an android powered blood testing innovation: MobiHealth” (Ethics Approval No. M150160). MobiHealth is an Android (mobile phone), blood diagnostic platform that can be used for patient self-testing or diagnostic testing at the site of patient care. MobiHealth tests for 51 different diagnostic parameters using disposable test strips, requiring 25-40µl blood. Test results are provided in 5–90 seconds and these results can be automatically transmitted to a cloud-based server to ensure data management. The validation study is due to commence in May 2017.

Figure NPP19 (Left): An illustration of the MobiHealth glucose and cholesterol analytes. (Right): An illustration of the MobiHealth patient management and test result data


Strengthening of Pre- and Post-Analytics for HIV VL Testing, using Mobile Technology: miLABS

“Strengthening and Improving Access to HIV VL Testing in South Africa. (Grant number: 5U2GGH001631-02)”. Through this grant, the use of a mobile ICT (mHealth) solution to assist in service delivery in HIV VL testing will be developed. The mobile workflow automation solution will comprise a monitoring system that will track HIV VL testing activities through a mobile app installed on a mobile device operated by the HCW. The proposed solution will provide a standard and integrated mechanism with which services can be effectively recorded, analysed, improved and reported to the relevant stakeholders (e.g. government health departments, management, and funding parties). HCWs at health facilities and drivers will be equipped with smart phones, pre-loaded with the app, which is customised to match the required HIV VL testing workflow. Data will be zero-rated to ensure that access to the app is possible at all time. Features will include 1. Automated order entry pilot in 27 PEPFAR Districts, 2. Cold chain management (sample integrity) for both plasma and DBS for HV VL monitoring, 3. TAT and traceability monitoring of HIV VL specimens, and 4. Technical training for all stakeholders who will use the app.

SMS Printers

Between November 2013 and December 2015, bi-directional laboratory SMS Printers were rolled out in a phased approach in all provinces, excluding KwaZulu-Natal. Bi-directional laboratory SMS Printer technology has improved the rapid delivery of HIV and TB diagnostic data of patients throughout South Africa, providing HCWs with patient results immediately they have been authorised by the testing laboratory. Training of HCWs was aligned to the phased rollout.

The NHLS bi-directional SMS Printer has the ability to send results from the LIS to the printer placed at Primary and Community Healthcare clinics (“Push”). This occurs for CD4, reflexed cryptococcal antigen, HIV VL, infant HIV PCR, TB microscopy, and GeneXpert MTB/RIF results. The printer can also retrieve patient results (“Pull”) from the LIS database by scanning the barcode on the specimen requisition form at the healthcare clinic. Automated “heartbeat messages” allow for daily monitoring of SMS Printers, ensuring their functionality.

To date, bi-directional laboratory SMS Printers have been installed in 2 096 healthcare facilities and 242 DCS centres. The TAT from specimen collection to result delivery has reduced substantially. Weekly reports are generated, listing facilities where SMS Printers are not functioning. In addition, a real-time monitoring website has been developed and implemented. Connectivity within remote areas across South Africa continues to challenge the system, aggravated by staff rotation within facilities and inappropriate device handling of critical components of the printers. On average, 870 000 results are queried.

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Figure NPP20: Coverage by SMS Printers of ART initiating healthcare facilities by province

A number of challenges have been experienced with the utilisation of SMS Printers, and the NHLS is working on improving the following: 1. Implementing a move from SMS to Global Data Services Platform (GDSP) accompanied by national roaming to improve network connectivity, 2. Scanners, power supplies and external antennas will be modified and internalised in updated models to limit component removal, and 3. The potential for “pushing” additional laboratory tests.

During the financial period, 348 healthcare facilities were visited and support services provided, and 576 HCWs trained (at 471 facilities) on all aspects of SMS Printer operation.


Information and Data Management

Staff

Dr M Pedro da Silva: NPP Operations Manager

Oriel Mahlatsi: Data analyst

Silence Ndlovu: Database administrator

Overview

For programmatic monitoring and evaluation purposes, the NPP generates a vast array of monthly and quarterly reports for distribution to partners, funders, national and provincial DoH/s, and co-ordinators. These reports are prepared as Excel-based spreadsheets, providing multiple user-friendly views of specimen and facility-level laboratory data. The data is extracted via the CDW. Data variables include test volumes, positivity rates, laboratory workflow analyses, TAT, instrument percentage utilisation rates, exception reporting such as tests with CD4 values <100 cells/µl, HIV VL >1 000 copies/ml, and test data disaggregated by sex and/or age.

Ethics approval was obtained in December 2016 (Clearance M160978) from the Wits Human Research Ethics Committee for the analysis of LIS data, by the NPP, for programmatic monitoring and evaluation purposes under the established Integrated Laboratory Data Analysis for Care (ILDAC) programme. Programmatic data requests are directed to the Operations Manager who ensures the data request complies with the conditions of the ethics approval, prior to data release, under the ILDAC programme.

Grants and Special Programmes

Staff

Dr Leigh Berrie: Head - Grants and Special Programmes

Lucky Ngwenya: Grants Financial Manager

Asiashu Bongwe: Point-of-Care Co-ordinator – HIV Viral Load

Portia Madumo: Point-of-Care Co-ordinator – Rapid Testing

Global Fund to Fight AIDS, Tuberculosis and Malaria (Year 1)

The NHLS has been awarded a total of R98 800 262 for both HIV and TB activities for the entire grant period. NHLS interventions fall into the following categories: 1. Provision of GeneXpert MTB/RIF testing either on site or at the nearest referral laboratory for improved case detection in PMC, 2. Provision of GeneXpert MTB/RIF testing either on site or at the nearest referral laboratory for improved case detection in the DCS, 3. GeneXpert MTB/RIF diagnosis in informal settlements, 4. Provision of GeneXpert training for both clinical and laboratory staff, 5. Provision of IPC training for the DCS, 6. Expansion of HIV VL testing services to address gaps in service delivery, and 7. Improving quality of HIV rapid testing in the field.

Provision of Xpert MTB/RIF Testing for Improved Case Detection in PMC

Interventions in this programme are to assist the DoH in improving TB/HIV case findings by working closely with the Aurum Institute, another sub-recipient and the clinical partner, to screen and test for TB with the GeneXpert in the PMC. In the previous round of the Global Fund Grant, the DoH identified six districts for the PMC roll-out; Lejweleputswa in the Free State, Dr Kenneth Kaunda and Bojanala districts in the North West, Waterberg and Sekhukhune in Limpopo and West Rand in Gauteng Province. These six districts are provided with GeneXpert MTB/RIF-equipped mobile laboratories. The mobile laboratories are run with two employees, a driver/clerk and a technician and are linked to the closest NHLS laboratory, which supports the mobiles for reagents, consumables, and overflow of GeneXpert specimens.

Provision of Xpert MTB/RIF Testing for Improved Case Detection in the DCS

The NHLS, as a pathology group servicing the state sector in South Africa, is responsible for testing the inmate population in the DCS for TB, using the GeneXpert MTB/RIF test. In 2016/17, 63 121 specimens were tested. The success of this programme can be attributed to the intensive visits to all the DCS management areas by the NHLS staff, where all issues pertaining to a comprehensive care package are discussed and mentoring is done, ensuring that DCS clinical staff members follow the national testing guidelines and algorithms.

Provision of GeneXpert Training for both Clinical and Laboratory Staff

The NHLS implemented the Xpert MTB/RIF test as the initial TB diagnostic test for individuals suspected of having MDR-TB or HIV/TB from


March 2011. Training of personnel is an ongoing process to support the DoH on the clinical algorithm as well as to train laboratory staff on the most efficient operation of the analysers, whilst ensuring result quality. In the review period, 1 709 HCWs and laboratory technical staff were trained.

IPC Training for the DCS

Prof. Adriano Dusé and his IPC team at the University of the Witwatersrand (Wits), together with the NPP, have developed an IPC Training Course with Trainer and Trainee manuals. Training is currently being rolled out to all DCS regions and will re-commence in May 2017. Follow-up assessments will be done for the regions that have been trained from April 2017.

Expansion of HIV VL Testing Services to Address Gaps in Service Delivery

The NHLS provides HIV VL testing services across 16 high-throughput, centralised laboratory sites but gaps remain in service coverage. A pilot project is being undertaken to close identified service-related delivery gaps through decentralisation of HIV VL testing services in South Africa. A tiered, hybrid model has been developed, consisting of centralised laboratory-based and decentralised testing, to facilitate improved access to HIV VL testing services, reduce HIV VL testing TATs, and decrease the testing burden at centralised sites. This model identified 13 district-level laboratories across six provinces for placement of additional HIV VL testing services. As the NHLS has extensive technical and operational expertise regarding the GeneXpert platform (Cepheid), this assay was selected and placed, utilising the Xpert HIV-1 VL assay.

Improving Quality of HIV Rapid Testing in the Field

Rapid diagnostic tests (RDTs) or dip-sticks are performed in large numbers in both rural and urban settings but have little or no innate quality control and thus are difficult to monitor at a central level. In South Africa, there are over 4 000 facilities which offer HIV Counselling and Testing (HCT) services to the public sector using RDTs. Innovative solutions using wireless technologies such as reader/smartphone applications are a potential strategy to ensure quality assurance through automated test result interpretation and data capture for real-time quality monitoring. One option, which is commercially available and has already shown promise in malaria testing, is the Deki Reader (Fio Corporation, Toronto, Canada), discussed earlier.

AURUM/CDC Grant (Year 3)

The focus of the grant is on “Comprehensive HIV and TB Prevention, Care and Treatment Services and Systems Strengthening in Facilities of South Africa’s DCS”. The key deliverables for the NHLS are to support and train DCS facility staff on laboratory procedures, including stock control of collection materials; specimen handling, including recording and storage of samples; IPC; and procedures for containment and disposal of hazardous waste. In addition, the NHLS is required to support and train facility management to 1. Address bottlenecks in processing specimens and results, 2. Improve laboratory service utilisation, and 3. Address billing procedures. The NHLS is required to provide QA for point-of-care testing and to standardise SOPs for collection of laboratory specimens according to guidelines and in line with current DoH algorithms. Further, the NHLS is to monitor the performance of the SMS Printers at DCS centres.

Training

Clinical Training on GeneXpert technology, GeneXpert TB clinical algorithm, laboratory procedures, QA for POC testing and SOPs has been undertaken for the DCS. In the Gauteng, Limpopo, KwaZulu-Natal, Free State and Northern Cape Management Areas, 100% training coverage has been achieved on the revised GeneXpert algorithm and drug-resistant TB reflex testing to support the rollout of the shortened multidrug-resistant-TB (MDR-TB) regimen. In the Free State, Northern and Western Cape Management Areas, 100% coverage on IPC practices training has been achieved. Remarkable improvement in specimen collection has been noted with minimal error rate following training.

IQC Rollout

To date, 53 of the targeted 121 DCS centres have received IQC material for quality assurance of HIV rapid testing. In addition, 237 functional centres have been successfully enrolled on the NHLS EQA proficiency scheme for HIV rapid tests.

GeneXpert and CD4 Data Collection and Reporting

Of the active DCS centres, 100% have accurate laboratory data collection and reporting for GeneXpert MTB/RIF, CD4, and HIV VL results.

SMS Printers

All the centres in the DCS have received SMS Printers. SMS Printer functionality is monitored remotely.

NHLS CDC CoAg: HIV Viral Load Project (Year 1)

This project is aimed at strengthening the pre- and post-analytical phases at facility level (Laboratory-Clinic interface) to ensure the timely


return of quality laboratory results, with a focus on the use of innovative technologies for the strengthening and improvement of pre- and post-analytical processes for HIV VL monitoring in the 27 PEPFAR-supported districts in South Africa. The ultimate goal is to strengthen and improve access to HIV VL monitoring.

NPP activities under this project include the procurement of three pre-analytical systems for the Roche Cobas 6800/8000 for Mankweng, Nelspruit and Charlotte Maxeke; as well as the development of mHealth solutions for specimen tracking, cold chain monitoring, and results delivery.

Research and Development Group

Staff

Professor Lesley Scott: Senior Research and Development Scientist and Group Head

Anura David: Research and Development Scientist

Lara Noble: Research and Development Scientist

Matilda Nduna: Registered Nurse

Violet Molepo: Auxiliary Nurse

Dr Natasha Gous: Point-of-Care Manager for the NPP (Resigned November 2016)

Overview

The NPP Research and Development (R&D) group comprises a multidisciplinary team, specialising in applied research and implementation of new laboratory diagnostics for HIV and TB, including quality management systems of high to low throughput testing platforms. The group’s outputs under the leadership of Professor Lesley Scott contribute to improved services within the NHLS, knowledge transfer to the NPP, policy development for the DoH, and global quality management for several diagnostic tests.

Contributing to Africa’s Innovation through Science: Verification and External Quality Assurance Programmes

Xpert MTB/RIF EQA Programme

The R&D team continues to supply the dried culture spot technology programme (developed by the group) for verification and EQA of GeneXpert MTB/RIF platform. In 2016, the programme supplied EQA material to 207 NHLS sites (326 instruments) and 75 international sites (90 instruments). The programme is now managed by SmartSpot Quality Pty (Ltd), a Wits Enterprise spin-off company. In 2017, an automated dried culture spot preparation instrument was evaluated and the 2017 verification and EQA panels were prepared using this instrument.

MTB Combo EQA Programme

The MTB Combo EQA, comprising the GenoType® MTBDRplus (HAIN diagnostics, Behren, Germany) EQA and the Strip Interpretation Analysis (SIA) programmes, was piloted in 2016 (11 sites, 15 instruments over three phases) to provide additional educational support to sites performing the MTBDRplus assay. The automated upload platform was tested in the final quarter of 2016 to simplify result capture and reporting, and is currently being finalised. The 2017 programme will be prepared in April 2017.

HIV Viral Load Programmes

The R&D team supplies the South African Viral Quality Assessment (SAVQA) panel for instrument verification and evaluation. In 2016, 46 SAVQA panels were prepared (Twenty-three for NHLS/research and the equivalent for EQUIP). The SAVQA panel is currently being adapted to a dried virus spot (DVS) programme to enable sites in remote areas to obtain quality assessment panels, without the requirement of refrigeration or complicated shipping. The verification panels will be piloted in the NHLS Point-of-Care Xpert HIV-1 VL trial sites in mid-2017.

Contributing to National Health TB Policy: Aiming for Improvements in Sensitivity of TB Molecular Diagnostics

Several new technologies are being evaluated in the R&D group:

The multicentre (10 site, 8 country) study to evaluate the new Xpert MTB/RIF Ultra sputum test for TB, in collaboration with the Foundation for Innovative New Diagnostics (FIND) and WHO, was completed in Quarter 4 of 2016. The overall data analysis reports non-inferiority of


the Xpert MTB/RIF Ultra to the current in-use Xpert MTB/RIF TB test used in the SA National TB programme. A 17% increased sensitivity in MTB diagnosis among smear-negative cases was noted. The R&D team presented the South African data to the NHLS Microbiology Expert Review Committee, and an implementation plan is being developed. The final report can be accessed at http://apps.who.int/iris/bitstream/10665/254792/1/WHO-HTM-TB-2017.04-eng.pdf

The Abbott (Abbott Molecular, Des Plains, IL, USA) RT MTB and RT MTB RIF/INH assays, designed for the Abbott m2000 platform, were evaluated against the Xpert MTB/RIF, on a cohort of presumptive TB infected individuals. In total, 206 complete results were analysed. The results are promising, especially since the RT MTB assay includes a reflex test to determine RIF and Isoniazid (INH) susceptibility. A manuscript was submitted to the Journal of Clinical Microbiology in March 2017 as an evaluation of the technology performance in HIV-TB co-infected individuals and reviewer queries are being addressed.

The Hain FluoroType® MTB and FluoroType® MTBDR are two new assays being developed for use on the GenoXtract® 96 and Fluorocycler instruments from Hain as a potential automated option over the current MTBDRplus assay. Dried culture spots were tested on the system with 100% concordance with Xpert MTB/RIF. Biosafety data has recently been made available and further R&D is planned prior to testing on patient specimens.

The investigation (NIH R21, EXIT-RIF) into whether new diagnostics impact on improved patient care is complete and has been published. The study assesses whether rapid diagnosis of rifampicin resistance by GeneXpert testing leads to improved TB treatment outcomes, determines phenotypic and genotypic drug resistance profiles in patients diagnosed with Xpert-RIF resistance, and documents management decisions and patient actions in the 12 months following diagnosis of Xpert-RIF resistance.

A second NIH R21 study is under way in the Eastern Cape to evaluate laboratory and clinic indicators for TB transmission and control. Permission to evaluate the DHIS data has been received from the DoH.

A new grant (Wendy Stevens, Principal Investigator; Lesley Scott, Project Leader) has been awarded through the Newton/MRC funder, to investigate “Technology supported systems for rapid impact on TB control”, and commenced in March 2016. The first grant report feedback has been completed. Ethics and relevant approvals for both projects are under way and the first connectivity solution C360 (Cepheid) has been evaluated in collaboration with the NPP GeneXpert programme staff.

Lesley Scott collaborated with the HIV Network Co-ordinating TB Diagnostic Laboratory Working Division of the National Institute of Allergy and Infectious Diseases, to survey the TB infection control practices in low- and middle-income countries.

In collaboration with biomedical engineers at the Thayer School of Engineering in Dartmouth, R&D is under way to determine the likelihood of identifying M.tuberculosis from sputum, using volatile acids collected through air sampling and fatty acid profiling. This study is in the preliminary phases, but shows promising results.

Contributing to National Health TB Policy: Information Technology’s Superpower and its Place in Global Disease Control

This year the team further expanded its knowledge base in Information Technology (IT) applications for developing concepts in disease control using molecular indicators from the Xpert MTB/RIF programme. The team realised the importance of the molecular characteristics, such as cycle threshold, of each GeneXpert TB test performed, and formed the hypothesis that the cycle threshold could be used as an indicator of mycobacterial disease burden and be used to monitor trends in RIF resistance in relation to space and time. The >400 000 MTB positive GeneXpert results are being analysed using various statistical and geographic information system (GIS) models across districts to present and evaluate disease trends over time and across geographically variable regions. Several multidisciplinary collaborations have evolved through the need to better understand and evaluate the findings. These collaborations include epidemiology groups at University of North Carolina , Health Economists at Right to Care and the Wits School of Public Health. Included in this is the evaluation of the Remote Xpert, which is a dashboard-driven laboratory monitoring tool, to assist the NPP on GeneXpert instrument and site performance. Several projects are ongoing and funded through mechanisms such as CDC, the NIH and recently the South African Medical Research Council, with funds received from the UK Medical Research Council Newton Grant. Results of these interventions are shared with the NPP and DoH.

In addition to evaluating new TB diagnostics, the R&D group, together with the NPP, is evaluating the connectivity software from Cepheid. The C360 remote access software allows real time analysis of the quality of all Xpert MTB/RIF tests performed in the field. The R&D team is currently developing an evaluation grid of audit indicators to monitor test/instrument/user performance quality.

Embracing Future HIV Testing Needs with New Molecular Technologies

The R&D group is involved in performing evaluations of various new high throughput and POC platforms for HIV VL testing, with a focus on the integration of TB-HIV care:


The performance of the Aptima HIV-1 Dx assay on the Panther system (Hologics Inc, Bedford, MA, USA) as an alternative assay for high throughput laboratories, using both EDTA-plasma and DBS, was evaluated. These results were presented at the ASLM Conference in 2016 and a manuscript is being prepared for publication.

The Cepheid Xpert HIV-1 viral load (Xpert VL; Cepheid Sunnyvale, CA, USA) for GeneXpert was evaluated in a high-burden HIV setting (Johannesburg, South Africa), using EDTA-plasma, with a sub-study on EDTA-whole blood, DBS, and EQA material. This evaluation has been published and a tiered HIV VL testing model has been developed for the extension of HIV VL testing services, to address gaps in service delivery. The use of “off-label” specimens for VL testing, using the Xpert HIV-1 VL to expand VL testing further, is currently being evaluated. A clinical trial is scheduled to begin in Quarter 1 of 2017/18, to determine the potential of the Xpert HIV for HIV VL testing using different blood collection tubes, whole-blood finger stick specimens (for true point-of-care testing), DVS and low volume EDTA-plasma. Preliminary results will be presented at the Interest Meeting 2017, in Malawi.

An abstract showcasing the VERIS HIV-1 (Beckman-Coulter) SAVQA pre-qualification results will be presented at the Interest Meeting 2017, in Malawi, and a clinical trial is being discussed.

Additional Activities

Implementation of the Shortened MDR-TB Treatment Regimen and Line Probe Assay to Detect Second-Line Resistance

On 12 May 2016, the WHO announced recommendations for a shortened MDR-TB treatment regimen. With the shortened regimen, MDR-TB treatment can be completed in 9–12 months compared to the conventional regimen of 18–24 months. In addition, the WHO endorsed the MTBDRsl line probe assay (LPAsl) as the rapid initial test to be performed on patients with confirmed rifampicin resistant-TB, in place of second-line drug susceptibility testing (DST) to detect resistance to fluoroquinolones (FLQ) and second-line injectable drugs (SLID). The shortened regimen is expected not only to improve patient outcomes due to greater treatment adherence, but also to reduce the number of patients lost to follow-up. LPAsl detects resistance to the FLQ based on the gyrA/gyrB genes and the SLID based on the rrs/eis promoter gene. As the WHO recommendations for LPAsl apply to both direct testing of sputum specimens (irrespective of smear status) and indirect testing on positive TB cultures, exclusion of resistance to second-line drugs will be made significantly earlier than by current DST. This allows for further improvements to patient outcomes.

The implementation of the shortened MDR-TB regimen, and the laboratory reflex testing to support this, has been rolled out nationally. To assist with training at the MDR-TB initiation sites and the laboratories registering specimens to support the laboratory reflex testing, flyers have been developed as guides and reminders of the tests to request (treatment initiation sites) and the tests to load on the LIS. Training activities are being conducted as a joint venture between the Centre for Tuberculosis (CTB, NICD) and the NPP. Training activities began in the fourth quarter of the financial year covering the following provinces and training sites: North West (one facility and 10 HCWs), Northern Cape (three facilities and 50 HCWs), KwaZulu-Natal (four facilities and 78 HCWs), Limpopo (10 facilities and 36 HCWs), and Gauteng Province (55 facilities and 396 HCWs). In terms of the DCS, 34 centres were visited and 144 staff members trained. The training activities target the laboratory staff (specimen registration and selection of the DR-TB reflex superset), and the hospitals/clinics/treatment initiation sites/TB-focal points (requesting the correct test on the request form).

Figure NPP21: Flyer to guide correct requests for reflex test at MDR-TB treatment initiation sites

Figure NPP22: Flyer to guide correct loading of the reflex test superset on the LIS by the registering laboratory

Urine Lipoarabinomannan Urine Assay Pilot Project

The urine lipoarabinomannan test (LF-LAM), marketed as a point-of-care test, is a lateral flow assay designed for tests on urine samples collected from patients suspected of having tuberculosis disease. The lipoarabinomannan (LAM) antigen detected by the assay is a


component of the mycobacterial cell wall and is released from metabolically active or degenerating bacterial cells. The LAM antigen is present in persons with active tuberculosis disease. Detection of LAM in urine is indicative of disseminated TB with renal involvement in patients living with HIV and advanced immunodeficiency.

The WHO 2015 policy recommendations regarding use of the test are as follows: 1. The assay may be used to assist in the diagnosis of TB in HIV positive in- and out-patients with signs and symptoms of TB (pulmonary and/or extrapulmonary) who have a CD4 cell count ≤100 cells/μl, or HIV positive patients who are seriously ill regardless of CD4 count or with unknown CD4 count; and 2. The assay should not be used as a screening test for TB.

Although LF-LAM is designed for POC testing, there are concerns regarding the QA aspects of POC testing. The pilot was proposed to guide a final decision on whether LF-LAM should be offered as true POC or as a laboratory-based test. The pilot will be conducted in two arms/phases – In the first, the LF-LAM will be offered as a laboratory-based test at four selected sites. In the second phase, the LF-LAM will be a clinician-based POC test with testing done at focal points such as the emergency department, medical casualty, and internal medicine departments. Both arms/phases will be compared in terms of the objectives: 1. Utilisation in terms of appropriateness of testing – Inpatient versus outpatient and capturing CD4 and HIV VL parameters, other assessments of illness severity like respiratory rate, temperature, and heart rate, 2. Time to result (measured for the laboratory component), 3. Time to treatment initiation as determined by the proportion commencing treatment, 4. Test reproducibility – Residual urine specimens from both the laboratory and POC arms will be retested for quality purposes at a centralised point, 5. Determine the utility and role of LF-LAM by testing residual urine specimens with the GeneXpert MTB/RIF and Xpert Ultra platforms (This will be highly beneficial as urine is currently a specimen-type not endorsed by WHO for Xpert testing), and 6. Test the yield of the LF-LAM in terms of positivity. Training of pilot sites and testing commencement is expected by the second quarter of 2017/18.

Meeting of the African Society for Laboratory Medicine 2016, Cape Town 2016

Prof. Wendy Stevens was appointed conference co-chair and was tasked with organisation of the conference. Dr Da Silva served as lead rapporteur for the Global Health Security Track. Significant contributions were made by NPP staff to workshops, seminars, oral sessions, session convening/chairing, and poster presentations. Details of oral and poster presentations are provided below.

Congress Presentations

• Berrie L. Laboratory management ensuring efficiency, quality testing, and timely return of results. In: CDC/ASLM Workshop – Scaling up HIV VL testing and uptake of results through improving efficiencies of systems, Windhoek, Namibia, 13-16 September 2016.

• Berrie L. National Xpert MTB/RIF roll out – The South African experience. In: Meeting of the African Society for Laboratory Medicine (ASLM), Cape Town, South Africa, December 2016.

• Berrie L. Improving access to viral load testing through coverage, linkage, and directed/targeted programme interventions. In: Meeting of the African Society for Laboratory Medicine (ASLM), Cape Town, South Africa, December 2016.

• Berrie L. 90-90-90: Lessons learnt and solutions for HIV viral load scale-up. In: Meeting of the African Society for Laboratory Medicine (ASLM), Cape Town, South Africa, December 2016.

• Berrie L, Sarang S, Stevens W. Lessons learnt from national HIV viral load implementation and scale-up in South Africa. In: Meeting of the African Society of Laboratory Medicine (ASLM), Cape Town, South Africa, December 2016.

• Bor J, Brennan A, Fox MP, Maskew M, Stevens W, Carmona S, et al. District prevalence of unsuppressed HIV in South African women: Monitoring programme performance and progress towards 90-90-90. In: 21st International AIDS Conference, Durban, South Africa, 2016.

• Bor J, Nattey C, Maughan-Brown B, MacLeod W, Maskew M, Carmona S, et al. Rising CD4 counts at clinical presentation: Evidence from a novel national database in South Africa. In: 21st International AIDS Conference, Durban, South Africa, 2016.

• Carmona S, Wedderburn C, MacLeod W, Hsaio M, Jani I, Kroon M, et al. Field performance of point-of-care HIV testing for early infant diagnosis: Pooled analysis from six countries from the EID Consortium. In: 21st International AIDS Conference, Durban, South Africa, 2016.

• Cassim N, Coetzee LM, Glencross DK. HIV treatment guideline changes: Implications for predicting network restructuring needs and distribution of CD4 testing platforms to laboratories across South Africa. In: African Society for Laboratory Medicine (ASLM), Cape Town, South Africa, December 2016.

• Cassim N, Coetzee LM, Glencross DK. Review of CD4 data as a proxy for establishing disease burden for municipalities identified as national development nodes. In: African Society for Laboratory Medicine (ASLM), Cape Town, South Africa, December 2016.

• Cassim N, Coetzee LM, Glencross DK. HIV treatment guideline changes: Implications for predicting future national CD4 testing costs for South Africa. In: African Society for Laboratory Medicine (ASLM), Cape Town, South Africa, December 2016.

• Cassim N, Coetzee LM, Glencross DK. Retrospective analysis of aggregate laboratory CD4 data to assess changes in immunological status of HIV+ patients accessing HIV testing and care. In: Southern African HIV Clinicians Society Conference, Johannesburg, April 2016.


• Cassim N, Lekalakala R, Coetzee L, Asmall S, Glencross DK. The Ideal Clinic Initiative and the need for mHealth solutions. In: African Society for Laboratory Medicine (ASLM), Cape Town, South Africa, December 2016.

• Chakezha T, De Gita G, Ballah NJ, Puren A, Takuva S, Carmona S, et al. Determinants of CD4 immune recovery among individuals on antiretroviral therapy in South Africa: A national analysis. In: 21st International AIDS Conference, Durban, South Africa, 2016.

• Coetzee LM, Glencross DK. Site verification of the Aquios flow cytometer as replacement platform for outmoded XL-cytometer across a national testing network. In: African Society for Laboratory Medicine (ASLM), Cape Town, South Africa, December 2016.

• Coetzee LM, Drury S, Glencross DK. Comparison of the new fully automated volumetric Aquios flow cytometer PanLeucogate (PLG) platform for CD4 T-lymphocyte enumeration to existing predicate PLG technology in South Africa. In: African Society for Laboratory Medicine (ASLM), Cape Town, South Africa, December 2016.

• Coetzee LM, Cassim N, Glencross DK. District and sub-district analyses of CD4 counts <100cells/μl identify areas with higher rate of late presentation for ART initiation and risk for opportunistic infections. In: African Society for Laboratory Medicine (ASLM), Cape Town, South Africa, December 2016.

• Coetzee LM, Drury S, Glencross DK. Comparison of the new fully automated volumetric Aquios flow cytometer PanLeucogate (PLG) platform for CD4-T lymphocyte enumeration to existing predicate PLG technology in South Africa. In: Wits Research Day and Postgraduate EXPO, Johannesburg, South Africa, September 2016.

• Coetzee LM, Moodley K, Glencross DK. Comparative results of a novel flow cytometric assay (FA) for early detection of cryptococcal antigen (CrAg) against LFA and EIA in HIV-infected patients with a CD4 count <100 cells/µl. In: WITS Research Day and Postgraduate EXPO, Johannesburg, South Africa, September 2016.

• Coetzee LM, Moodley K, Glencross DK. Comparative results of a novel flow cytometric assay (FA) for early detection of Cryptococcal antigen (CrAg) against LFA and EIA in HIV-infected patients with a CD4 count <100 cells/µl. In: African Society for Laboratory Medicine (ASLM), Cape Town, South Africa, December 2016.

• Da Silva MP. Molecular TB diagnostics – Clinical interpretation and lessons learnt from the field. Improving post-analytical quality. ACTG-sponsored workshop: Quality needs for Molecular TB/HIV and HPV diagnostic assays applied in Clinical Laboratories. In: Meeting of the African Society of Laboratory Medicine, ASLM, Cape Town, South Africa, December 2016.

• David A. Experience from quality monitoring options for molecular TB diagnostics (verification and EQA). ACTG-sponsored workshop: Quality needs for molecular TB/HIV and HPV diagnostic assays applied in clinical laboratories. In: Meeting of the African Society of Laboratory Medicine, Cape Town, South Africa, December 2016.

• Farley JE, Seiguer S, Naicker M, McKenzie-White J, Chiasson G, Elmi M, Stevens W, Stewart-Isherwood l. Rapid diagnosis, linkage and treatment initiation of patients with drug-resistant tuberculosis in South Africa: The miLINC Solution to improve access to care. In: 21st International AIDS Conference, Durban, South Africa, July 2016.

• Fox MP, Bor J, MacLeod W, Maskew M, Brennan A, Stevens W, et al. Is retention on ART underestimated due to patient transfers? Estimating system-wide retention using a national labs database in South Africa. In: 21st International AIDS Conference, Durban, South Africa, 2016.

• Fraser-Hurt N, MacLeod W, Bor J, Shubber Z, Carmona S, Pillay Y, et al. Fast-tracking of the HIV response: Do the metros lead the way to reaching 90-90-90 in South Africa? In: 21st International AIDS Conference, Durban, South Africa, 2016.

• Glencross DK, Moodley K, Coetzee LM. Introducing the new fully automated volumetric Aquios flow cytometer PanLeucoGate (PLG) platform for CD4-lymphocyte enumeration in South Africa: Establishing instrument precision and accuracy. 21st International AIDS Conference, Durban, South Africa, July 2016.

• Gous N, Bethlehem L, Subramunian C, Coetzee J, Stevens W, Scott LE. New Options for HIV viral load testing: The Panther Aptima HIV-1 Quant Dx assay (Hologics, Inc). In: African Society for Laboratory Medicine, Cape Town, South Africa, December 2016.

• MacLeod W, Bor J, Fraser N, Shubber Z, Sanne I, Stevens W, et al. Measuring viral load suppression in South Africa using a novel, national database. In: Conference on Retroviruses and opportunistic infections, Boston, Massachusetts, USA, 2016.

• MacLeod W, Fraser N, Bor J, Shubber Z, Carmona S, Pillay Y, et al. Analysis of age- and sex-specific HIV care cascades in South Africa suggests unequal progress towards UNAIDS 90-90-90 treatment targets. In: 21st International AIDS Conference, Durban, South Africa, 2016.

• Mahlatsi O, Ndlovu S, Morokane P, Berrie L, da Silva MP, Cassim N. Analysis of Xpert MTB/RIF positivity for defined age ranges and gender between 2014 and 2015. In: African Society for Laboratory Medicine (ASLM), Cape Town, South Africa, December 2016.

• Marokane P, Ntsimane S, Magida V, Scott LE, Berrie L. Improving the quality of a large-scale Xpert MTB/RIF programme in South Africa. In: African Society for Laboratory Medicine (ASLM), Cape Town, South Africa, December 2016.

• Marokane P, Ndlovu S, Mahlatsi O, Ntsimane S, Da Silva P, Berrie L. Analysis of Xpert MTB/RIF rejection rates using laboratory data 2011-2015, South Africa. In: African Society of Laboratory Medicine (ASLM), Cape Town, South Africa, December 2016.

• Maskew M, Bor J, Hendrickson CJ, MacLeod W, Bärnighausen T, Pillay D, et al. Imputing clinical records from routine laboratory data: Date of ART initiation. In: Conference on Retroviruses and Opportunistic Infections, Boston, Massachusetts, USA, 2016.


• Maskew M, Bor J, MacLeod W, Carmona S, Sherman G, Fox MP. The youth treatment bulge in South Africa: Increasing numbers, inferior outcomes among adolescents on ART. In: 21st International AIDS Conference, Durban, South Africa, 2016.

• Maskew M, Hendrickson CJ, MacLeod W, Sanne I, Carmona S, Stevens W, et al. Utilising laboratory data to impute ART start dates and monitor cohort treatment outcomes. In: 21st International AIDS Conference, Durban, South Africa, 2016.

• Phaswana A, Skhosana N, Berrie L, Stevens W. Setting up of GeneXpert laboratories in Correctional Centres in South Africa – The route travelled and lessons learnt. In: Meeting of the African Society of Laboratory Medicine (ASLM), Cape Town, South Africa, December 2016.

• Phaswana A, Skhosana N, Berrie L, Stevens W. Setting up of GeneXpert laboratories in Correctional Centres in South Africa – The route travelled and lessons learnt. In: National Department of Correctional Services Conference, Gauteng, South Africa, March 2017.

• Phaswana A, Skhosana N, Berrie L, Stevens W. Health systems strengthening: Offering TB and HIV tests to the inmates in correctional facilities in South Africa. In: Free State, Northern Cape, and KwaZulu-Natal Regional DCS Conference, Drakensberg, March 2017.

• Sarang S, Berrie L, Stevens W. Reducing the error rates in HIV viral load testing and does training on a national level provide any positive outcomes? In: Meeting of the African Society of Laboratory Medicine (ASLM), Cape Town, South Africa, December 2016.

• Scott LE. 2016. Xpert MTB/RIF Research and development experience from South Africa. In: Academic Conference of Anti-Tuberculosis, Zhuhai City of Guangzhou Province, China, April 2016.

• Scott LE. 2016. How to measure TB programme success using Cepheid C360. In: Satellite symposium, International Union of Tuberculosis and Lund Disease (UNION) Conference, Liverpool, UK, October 2016.

• Scott LE. 2016. GeneXpert connectivity, experience with a laboratory information system and remote dashboard Cepheid C360, Workshop sponsored by the SA National Priority Programme: Lessons learnt from a large-scale implementation of the Xpert MTB/RIF TB programme in South Africa. In: African Society for Laboratory Medicine, Cape Town, South Africa, December 2016.

• Scott LE, Barnard M. OMNIgene: TB diagnostic companion performance. In: Future Directions and Progress of the AIDS Clinical Trials Group (ACTG) Network Laboratory Centre session, ACTG Annual Meeting, Washington, USA, June 2016.

• Scott LE, da Silva P, Berrie L, Nicol M, Whitelaw A, Candy S, Stevens W. The spectrum of use of the Xpert MTB/RIF test in the South African National GeneXpert Programme. In: African Society for Laboratory Medicine, Cape Town, South Africa, December 2016.

• Scott LE, David A, Stevens W. Update on line probe assay external quality assessment. In: Future Directions and Progress of the ACTG Network Laboratory Centre session, ACTG Annual Meeting, Washington, USA, June 2016.

• Scott LE, Wallis C. Abbott Real Time MTB and INH/RIF assay: Prospective HIB/TB cohort evaluation in Johannesburg, South Africa. In: Future Directions and Progress of the ACTG Network Laboratory Centre session, ACTG Annual Meeting, Washington, USA, June 2016.

• Shearer K, Dowdy D, Scott LE, Berrie L, MacLeod W, Fox M, Golub J, Stevens W. 2016. Has the threshold of case-detection with Xpert MTB/RIF been reached in South Africa? In: African Society for Laboratory Medicine, Cape Town, South Africa, December 2016.

• Sawry S, Moultrie H, Wadula J, Scott L, Rie AV. 2016. Poor yield of Xpert MTB/RIF on routine pulmonary samples from HIV-infected children. In: 8th International Workshop on HIV Paediatrics, Durban, South Africa, July 2016.

• Steegen K, Shoul E, Berhanu R, Evans D, Hans L, Papathanasopoulos MA, et al. Protease inhibitor resistance in patients failing 2nd-line ART in two academic hospitals in Johannesburg, South Africa. In: South African HIV Clinicians Society 3rd Biennial Conference, Johannesburg, South Africa, 2016.

• Stewart-Isherwood L, Madumo P, Olsen F, Berrie L, Stevens W. Laboratory-driven linkage-to-care: outcomes from the Treat-TB mHealth solution for MDR-TB patient care in South Africa. In: African Society for Laboratory Medicine (ASLM), Cape Town, South Africa, December 2016.

• Stewart-Isherwood L. Translating laboratory informatics in patient care: mHealth and Implementation science. In: African Society for Laboratory Medicine (ASLM), Cape Town, South Africa, December 2016.

Journal Publications

• Boender TS, Kityo CM, Boerma RS, Hamers RL, Ondoa P, Wellington M, et al. Accumulation of HIV-1 drug resistance after continued virological failure on first-line ART in adults and children in sub-Saharan Africa. J Antimicrob Chemother. 2016; 71: 2918-2927.

• Carmona S, Peter T, Berrie L. HIV viral load scale-up: Multiple interventions to meet the HIV treatment cascade. Curr Opin HIV AIDS. 2017; 12: 157-164.

• Cassim N, Coetzee L, Glencross D. Piloting a national laboratory electronic programme status reporting system in Ekurhuleni Health District, South Africa. SAMJ. 2016; 106(4): 374-7.

• Cassim N, Coetzee LM and Glencross DK. Programmatic implications of implementing the relational algebraic capacitated location (RACL) algorithm outcomes on the allocation of laboratory sites, test volumes, platform distribution and space requirements. African Journal of Laboratory Medicine. 2017; 6(1), a545, https://doi.org/10.4102/ajlm.v6i1.545.


• Cassim N, Coetzee LM and Glencross DK. Evaluating costs of laboratory-based, reflex cryptococcal antigenaemia screening for HIV patients using the Lateral Flow Assay (LFA) at a busy CD4 laboratory in South Africa. PLOS ONE. DOI:10.1371/journal.pone.0171675 eCollection, 2017.

• Cassim N, Coetzee LM, Schnippel K, Glencross DK. Compliance to HIV treatment monitoring guidelines can reduce laboratory costs. Southern African Journal of HIV Medicine. 2016; 17(1): 1-5.

• Chikaonda T, Ketseoglou I, Nguluwe N, Krysiak R, Thengolose I, Nyakwawa F, Rosenberg NE, Stanley C, Mpunga J, Hoffman IF, Papathanasopoulos MA, Hosseinipour M, Scott L, Stevens W. Molecular characterisation of rifampicin-resistant Mycobacterium tuberculosis strains from Malawi. African Journal of Laboratory Medicine. 2017; 6(2): a463. https://doi.org/10.4102/ajlm.v6i2.463.

• Chikaonda T, Nguluwe N, Barnett B, Gokhale RH, Krysiak R, Thengolose I, Rosenberg NE, Stanley C, Mpunga J, Hoffman IF, Hosseinipour M, Scott L, Stevens W. Performance of Xpert® MTB/RIF among tuberculosis outpatients in Lilongwe, Malawi. Afr J Lab Med. 2016; 6(2): a464. https://doi.org/10.4102/ajlm. v6i2.464.

• Clouse K, Vermund SH, Maskew M, Lurie MN, MacLeod W, Malete G, et al. Mobility and clinic switching among postpartum women considered lost to HIV care in South Africa. J Acquir Immune Defic Syndr. 2017; 74: 383-389.

• Coetzee L, Cassim N, Glencross D. Implementation of a new ‘community’ laboratory CD4 service in a rural health district in South Africa extends laboratory services and substantially improves local reporting turnaround time. SAMJ. 2016; 106(1): 82-7.

• Coetzee LM, Moodley K, Glencross DK. Performance Evaluation of the Becton Dickinson FACSPresto Near-Patient CD4 instrument in a laboratory and typical field clinic setting in South Africa. PLOS ONE. 2016; 11(5): e0156266. PubMed PMID: 27224025. Pubmed Central PMCID: 4880207.

• Cunnama L, Sinanovic E, Ramma L, Foster N, Berrie L, Stevens W, Molapo S, Marokane P, McCarthy K, Churchyard G, Vassall A. Using top-down and bottom-up costing approaches in LMICs: The case for using both to assess the incremental costs of new technologies at scale. Health Economics. 2016; DOI: 10.1002/hec.3295.

• Daneau G, Gous N, Scott L, Potgieter J, Kestens L, Stevens W. Human Immunodeficiency Virus (HIV)-infected patients accept finger stick blood collection for point-of-care CD4 testing. PLOS ONE. 2016; 11:e0161891.

• Diallo K, Kim AA, Lecher S, Ellenberger D, Beard RS, Dale H, et al. Early diagnosis of HIV infection in infants - One Caribbean and six sub-Saharan African countries, 2011-2015. MMWR Morb Mortal Wkly Rep. 2016; 65: 1285-1290.

• Fox MP, Berhanu R, Steegen K, Firnhaber C, Ive P, Spencer D, et al. Intensive adherence counselling for HIV-infected individuals failing second-line antiretroviral therapy in Johannesburg, South Africa. Trop Med Int Health. 2016; 21: 1131-1137.

• Godfrey C, Andersen J, Mngqibisa R, Scott LE, Conradie F. Tuberculosis control. Lancet. 2016; 387: 1157-1158.

• Godfrey C, Tauscher G, Hunsberger S, Austin M, Scott L, Schouten JT, Luetkemeyer AF, Benson C, Coombs R, Swindells S. A survey of tuberculosis infection control practices at the NIH/NIAID/DAIDS-supported clinical trial sites in low and middle income countries. BMC Infect Dis. 2016; 16:269.

• Gous N, Scott L, Berrie L, Stevens W. Options to expand HIV viral load testing in South Africa: Evaluation of the GeneXpert(R) HIV-1 viral load assay. PLOS ONE. 2016; 11(12):e0168244.

• Gous NM, Berrie L, Dabula P, Stevens W. South Africa’s experience with provision of quality HIV diagnostic services. African Journal of Laboratory Medicine. 2016; 5(2).

• Jacobson KR, Barnard M, Kleinman MB, Streicher EM, Ragan EJ, White LF, Shapira O, Dolby T, Simpson J, Scott L, Stevens W, van Helden PD, Van Rie A, Warren RM. Implications of failure to routinely diagnose resistance to second-line drugs in patients with rifampicin-resistant tuberculosis on Xpert MTB/RIF: A multisite observational study. Clin Infect Dis. 2017; doi:10.1093/cid/cix128.

• Larson BA, Rockers PC, Bonawitz R, Sriruttan R, Glencross DK, Cassim N, et al. Screening HIV-infected patients with low CD4 counts for cryptococcal antigenemia prior to initiation of antiretroviral therapy: Cost effectiveness of alternative screening strategies in South Africa. PLOS ONE. 2016; 11(7): 24.

• Lebina L, Fuller N, Osoba T, Scott L, Motlhaoleng K, Rakgokong M, Abraham P, Variava E, Martinson NA. The use of Xpert MTB/Rif for active case finding among TB contacts in North West Province, South Africa. Tuberc Res Treat. 2016:4282313.

• Lecher S, Williams J, Fonjungo PN, Kim AA, Ellenberger D, Zhang G, et al. Progress with scale-up of HIV viral load monitoring - Seven sub-Saharan African countries, January 2015-June 2016. MMWR Morb Mortal Wkly Rep. 2016; 65: 1332-1335.

• Papasavvas E, Surrey LF, Glencross DK, Azzoni L, Joseph J, Omar T, Feldman MD, Williamson AL, Siminya M, Swarts A, Yin X, Liu Q, Firnhaber C, Montaner LJ. High-risk oncogenic HPV genotype infection associates with increased immune activation and T cell exhaustion in ART-suppressed HIV-1-infected women. Oncoimmunology. 2016 Jan 19; 5(5): e1128612. doi: 10.1080/2162402X.2015.1128612. eCollection 2016 May.

• Scott L, da Silva P, Boehme CC, Stevens W, Gilpin CM. Diagnosis of opportunistic infections: HIV co-infections - tuberculosis. Curr Opin HIV AIDS. 2017; 12: 129-138.


• Smith H, Smith J, Glencross DK, Cassim N, Coetzee L, Carmona S, Stevens WS. A relational-algebraic algorithm for location of HIV/AIDS in South Africa. Intl. Trans. in Op. Res. 00 2017; 1–18 DOI: 10.1111/itor.12366.

• Steegen K, Bronze M, Papathanasopoulos MA, Van Zyl G, Goedhals D, Van Vuuren C, et al. Prevalence of antiretroviral drug resistance in patients who are not responding to protease inhibitor-based treatment: Results from the first national survey in South Africa. J Infect Dis. 2016; 214: 1826-1830.

• Steegen K, Bronze M, Papathanasopoulos MA, van Zyl G, Goedhals D, Variava E, et al. HIV-1 antiretroviral drug resistance patterns in patients failing NNRTI-based treatment: Results from a national survey in South Africa. J Antimicrob Chemother. 2017; 72: 210-219.

• Steegen K, Carmona S, Bronze M, Papathanasopoulos MA, van Zyl G, Goedhals D, et al. Moderate levels of pre-treatment HIV-1 antiretroviral drug resistance detected in the first South African national survey. PLOS ONE. 2016; 11: e0166305.

• Stevens WS, Scott LE, Noble LD, Gous NM, Keertan D. Impact of the GeneXpert MTB/RIF technology on tuberculosis control. Microbiol Spectrum. 2017; 5(1): TBTB2-0040-2016. DOI: 10.1128/microbiolspec.TBTB2-0040-2016.

• Templer SP, Seiverth B, Baum P, Stevens W, Seguin-Devaux C, Carmona S. Improved sensitivity of a dual-target HIV-1 qualitative test for plasma and dried blood spots. J Clin Microbiol. 2016; 54: 1877-1882.

• Wake RM, Glencross DK, Sriruttan C, Harrison TS, Govender NP. Cryptococcal antigen screening in HIV-infected adults: Let’s get straight to the point. AIDS. 2016 Jan 28; 30(3): 339-42. PubMed PMID: 26558733.

Contributions to Policy

• Glencross D, Coetzee L, Cassim N, Sriruttan C and Govender N. DoH Cryptococcal antigen policy and national wide-scale implementation of screening services for all CD4 samples with counts < 100 cells/µl (official start date 01/10/2016).

• Stevens W, Gous N, Scott L, Berrie L, Cassim N, Glencross DK, Carmona S and the NHLS working group. Point-of-care policy document draft. Content development as well as document review (2015/16).

• Cassim N. DoH, Ideal clinic development (ongoing).

• Haeri Mazanderani A, Technau K-G, Hsiao N-y, Maritz J, Carmona S, Sherman GG. Recommendations for the management of indeterminate HIV PCR results within South Africa’s early infant diagnosis programme (2016).

• South African National Strategic Plan 2017–2022 on HIV, sexually transmitted infections, and tuberculosis (launched 31 March 2017).

Awards

• Professor Glencross received an Honourable Mention for Lifetime Achievement awarded by the ASLM (December 2016)

• Professor Glencross received a Wits Faculty of Health Sciences Award for Dedication and Achievement in Research (August 2016)

• Professor Glencross was honoured with an Excellence Award by the International Lyceum for Greek Women (January 2017).

Performance Information by Province

GAUTENG

Introduction

Gauteng is defined by two of the nation’s largest cities, Pretoria, the administrative capital of South Africa, and Johannesburg, the provincial capital. While it is the country’s smallest province, it has the largest population, and by far the highest population density.

The NHLS Gauteng Region provides services to a network of academic, provincial tertiary, regional and district hospitals and primary healthcare facilities. These are distributed across five districts within the province.

Table G1: Laboratories per district

Tshwane EkurhuleniCity of Johannesburg Sedibeng West Rand

Tshwane Academic Division

Tembisa Provincial Tertiary

Charlotte Maxeke Academic

Sebokeng Regional Leratong Regional

Dr George Mukhari Academic

Tambo Memorial Regional

Chris Hani Baragwanath Academic

Kopanong District Dr Yusuf Dadoo District

Kalafong Provincial Tertiary

Pholosong Regional

Helen Joseph Provincial Tertiary

Carletonville District

Mamelodi Regional

Far East Rand Regional

Edenvale Regional

Jubilee District Thelle Mogoerane Regional

South Rand District

Odi District Bertha Gxowa District

Braamfontein Complex

The region is divided into six business units, with a footprint across all five health districts in the province, as outlined above. It is also a referral site for some of the other provinces, Southern African Development Community (SADC) countries and other African states.

Diagnostic Services and New Developments

Gauteng performed 24 821 020 tests, representing an increase of 18% compared with the previous financial year.

The region has laboratories on site in four Central hospitals, three provincial tertiary, eight regional, and seven district hospitals across the province. In addition, three depots are located in different districts. These all work closely in support of the Department of Health’s (DoH) National Priority Programmes (NPP), covering tuberculosis, cervical screening and HIV and AIDS. The data below demonstrates the volumes dealt with by the NHLS Gauteng laboratories in 2016/17.

Table G2: National Priority Programmes volumes

Test 2015/16 2016/17 Difference % Increase Comment

Viral load 835 821 1 240 003 404 182 48% Increase

HIV PCR (EID) 116 473 273 353 156 880 100% Increase

CD4 706 807 762 760 55 953 8% Increase

GeneXpert 354 104 386 496 32 392 9% Increase

Lateral Flow: Cryptococcal Antigen

- 463 538 - - New Test

Area Manager Bahule Motlonye



Table G3: Cervical Screening Volumes

Tests 2015/16 2016/17 Difference % Increase Comment

Gynaecological 197 355 307 756 110 401 56% Increase

Non-Gynaecological 37 919 37 222 -697 -2% Decrease

Fine Needle Aspiration (FNA) 16 816 16 152 -664 -4% Decrease

General Tests (All Inclusive) 21 114 012 24 821 020 3 707 008 18% Increase

New Tests

Charlotte Maxeke introduced the following tests: Salivary cortisol, respiratory syncytial viral testing and bacterial identification through 16S rRNA sequencing.

Service Delivery and Coverage

Services were delivered by a total staff complement of 2 021, which includes training staff, pathologists, scientists, medical technologists, medical technicians and other support functions.

Clinic-Laboratory specimen collection was maintained at 100% coverage, and the optimisation of routes allowed for increased frequency of collection, especially from Community Health Centres.

Improved interaction between the NHLS and the Gauteng Health facilities (Healthcare Workers) enhanced working relationships to address challenges identified.

Collaboration with DoH partners took place in March 2017 to strengthen the Clinical Laboratory interface. Collaboration with partners and other departments has ensured that the negative impact of various policies on health outcomes is understood and mitigated, and promotes policies that result in positive health outcomes.

Turnaround Time (TAT)

The region continued to strive to attain the Key Performance Indicator (KPI) targets set for 2016/17. Strategies were developed during the period, resulting in the attainment of all targets by the end of the financial year. Regional TAT performance is demonstrated in Table G4.

Table G4: Turnaround time for Gauteng Region

Data Source CDW Annual Target 2016/17 Actual Performance 2016/17

Percentage TB microscopy tests performed within 48 hours 90% 97%

Percentage TB GeneXpert tests performed within 48 hours 90% 98%

Percentage CD4 tests performed within 48 hours 90% 97%

Percentage viral load tests performed within 96 hours 60% 96%

Percentage HIV PCR tests performed within 96 hours 70% 94%

Percentage cervical smear tests performed within 5 weeks 65% 91%

Percentage laboratory tests (FBC, U&E and LFT) performed within 8 hours 80% 78%

It is befitting to indicate the business unit’s contribution to this performance on TAT, as outlined in Table 5. Each business unit has its own dynamics, which are mitigated differently.

Table G5: Turnaround time per business unit

Business UnitTB Microscopy GeneXpert CD4 tests Viral Load HIV PCR Cervical

(FBC, U&E and LFT)

Target 90% within 48 hours

90% within 48 hours

90% within 48 hours

60% within 96 hours

70% within 96 hours

65% within 5 weeks

80% within 8 hours

Chris Hani Baragwanath 94% 99% 99% n/a 99% n/a 70%

Johannesburg, Sedibeng and West Rand

99% 98% n/a n/a n/a 98% 93%

Dr George Mukhari Academic 97% 97% 97% 97% n/a 77% 94%

Charlotte Maxeke Academic 96% 98% 96% 95% 95% n/a 56%

Tshwane Academic Division 99% 99% 95% n/a 87% 99% 68%

Ekurhuleni Tshwane 98% 99% 98% n/a n/a n/a 85%

Regional Average 97% 98% 97% 96% 94% 91% 78%


Notable Achievements

Accreditation

The following laboratories maintained their ISO 15189 accreditation in all divisions: Charlotte Maxeke Academic, Dr George Mukhari Academic, Chris Hani Baragwanath, Tshwane Academic Division (Steve Biko) and Braamfontein Complex (TB Laboratory, Immunology and Cytology).

Accreditation continues to be focus area for the region, striving to increase the number of accredited laboratories at provincial tertiary and regional levels.

Laboratory Upgrades

Charlotte Maxeke Academic upgraded to a new Roche platform, which is a fully automated system with a track system, and high throughput to improve TAT, efficiencies and productivity.

Figure G1: Medical Technologists at Charlotte Maxeke Academic Laboratory, using the new automated platform

Figure G2: Left to Right: N Hlwati, N Dlulane, J van Schalkwyk, D Lioma, H Ngema and P Ntuli

The Dr George Mukhari Microbiology Laboratory was renovated in 2016, to replace work benches, cabinets and the ceiling.

Helen Joseph and Sebokeng Laboratories were refurbished.

Technical Skills and Staffing

The total head count as at March 2017 was 2 021, of which 323 are training staff (registrars, intern medical technologists and medical technicians). The reporting period was encouraging for the region in terms of attracting and retaining staff. The only challenge remaining is in the histopathology discipline. A number of options have been pursued, as a result of which a number of intern medical technologists among the new intake have been encouraged to do histopathology. Histopathology will be the focus for the coming 2–3 years, as failure to capacitate this unit will compromise the service in the future.

Table G6: Staffing breakdown

Business Unit Vacancies Training Head Count Total Head Count

Chris Hani Baragwanath Academic 13 29 232

Johannesburg, Sedibeng and West Rand 10 45 369

Dr George Mukhari Academic 10 73 224

Charlotte Maxeke Academic 12 109 452

Tshwane Academic Division 8 75 278

Ekurhuleni Tshwane 6 22 224

Finance Unit 3 0 47

Human Resource (Learning Academy) 0 0 183

Management 0 0 12

Total 62 353 2 021


Table G7: Staff category breakdown

Business Unit PathologistsMedical Technologists

Medical Technicians Lab Clerks Other* Total

Chris Hani Baragwanath Academic 9 50 17 50 106 232

Joburg, Sedibeng & West Rand 6 88 41 95 139 369

Dr George Mukhari Academic 15 63 24 25 97 224

Charlotte Maxeke Academic 42 78 33 56 243 452

Tshwane Academic Division 16 70 27 40 125 278

Ekurhuleni Tshwane 2 63 23 71 65 224

Total 90 412 165 337 775 1779

*Other denotes business managers, laboratory managers, quality assurance co-ordinators, phlebotomists, phlebotomy technicians, store clerks and assistants and laboratory assistants

Skills Development

Gauteng NHLS continues to develop and up-skill employees in different areas as an intervention strategy. A total of 1 031 employees undertook various skills development courses in the reporting period. Because compliance with legislation is important, and employees need to understand, adhere to policy and maintain compliance, the following legislative (Occupational Health and Safety Act) courses were attended by 130 employees: First Aid, Fire Warden, Dangerous Goods Transportation and Health and Safety.

To improve quality management systems and efficiencies, leadership skills and customer centric approaches, laboratory managers received training in customer service, the foundation of laboratory leadership and management, quality management system (ISO 15189) and inventory management.

Stakeholder Relations

The region has a very good relationship with its stakeholders, including its DoH partners. These relationships are strengthened through several committees and meetings that take place regularly:

• Provincial stakeholder meetings regarding the Service Level Agreement (SLA) and Quarterly Review meetings

• Monthly participation in Medical Advisory Committee meetings

• National Institute of Communicable Diseases (NICD) – helping with the identification of complicated organisms that need further testing

• Infection Prevention and Control, Therapeutic Committee and Medical Advisory Committee meetings, where pathologists/registrars play a significant role

• Quarterly TB meetings with the DoH, and bimonthly visits to clinics

• Institutional Academic Pathology Committees (IAPC) meetings with the Deans of the universities (University of the Witwatersrand (Wits), University of Pretoria (UP), Sefako Makgatho Health Sciences University (SMU).

NHLS Gauteng supports all the initiatives of the Gauteng DoH and participated in the following activities as part of NHLS visibility:

• Hospital open days

• World AIDS Commemoration Day – a national event that was held in Daveyton on 1 December 2016

• TB World day – participated in the planning activities.

Conclusion

NHLS Gauteng will continue to offer a patient-orientated service and align with Gauteng DoH programmes. Although financial challenges restrain service delivery, the majority of staff is dedicated to providing the extra effort required to meet the mandate. New avenues will be pursued to add new test repertoires to existing profiles as well as new technology to reduce costs further while increasing efficiencies.


EASTERN CAPE

Introduction

The Eastern Cape Region supports the National and Provincial Departments of Health in the delivery of quality, accessible and affordable health services through a network of 38 laboratories and seven depots situated across the eight Health Districts of the province. The scope of testing in each laboratory is in line with the package of services required per level of care.

The region consists of five business units, adequately resourced with competent staff and state-of-the-art equipment, to ensure delivery of a quality service. The region has centralised specialised testing at the only academic laboratory, Nelson Mandela Academic, and two tertiary laboratories, East London and Livingstone.

Laboratories offer a 24-hour service to the central, tertiary and regional hospitals, and a call out system for district laboratories to improve service delivery.

Table EC1: Laboratories per district

Table EC2: Depots per district

OR Tambo Amathole Alfred Nzo

Isilimela Tafalofefe Greenville

Qumbu Health Centre Maluti

Nessie Knight

Bambisana

Diagnostics Services

The total number of tests performed increased by 2% year-on-year from 8 640 316 in 2015/16 to 8 816 893 in the year under review. The increase in workload can be attributed to an 11% increase in viral load tests and a 16% increase in HIV PCR, due to the introduction of policy guidelines on the use of viral load and Early Infant Diagnosis (EID) tests for the initiation and monitoring of Antiretroviral Therapy (ART). GeneXpert tests decreased markedly by 13%.

Area Manager Tabita Makula


Nelson Mandela Metropolitan

Sarah Baartman

Buffalo City Metropolitan Amathole Chris Hani OR Tambo

Alfred Nzo Joe Gqabi

Port Elizabeth Provincial Tertiary

Graaff Reinet East London (Frere) Tertiary

Butterworth Queenstown Regional

Nelson Mandela Academic

Matatiele Empilisweni

Livingstone Somerset East

Cecilia Makiwane Regional

Madwaleni Glen Grey St Elizabeth Regional

Mt Ayliff Aliwal North

Dora Nginza Humansdorp Bisho Willowvale Hewu Holy Cross St Patricks Mt FletcherUitenhage Grahamstown SS Gida Cradock Zitulele Madzikane

KaZulu

Port Alfred Victoria Cofimvaba Canzibe All Saints St Barnabas Cala Dr Malizo

Mpehle Memorial

4 Labs 5 Labs 3 Labs 5 Labs 7 Labs 7 Labs 4 Labs 3 Labs


Table EC3: National Priority Programme test percentage differences 2015/16 vs 2016/17

Test 2015/16 2016/17 % Difference

Viral load 397 533 445 966 11%

CD4 367 738 366 328 -0.40%

HIV PCR 53 611 63 569 16%

GeneXpert 511 176 453 064 -13%

Cervical Smears 99 418 97 696 -2%

New Tests

To improve service delivery and patient outcomes, the laboratories introduced new tests. Some of the tests had previously been referred to either Gauteng or the Western Cape, which greatly affected TAT.

Table EC4: New tests introduced in 2016/17

Business Unit Laboratory New Test

Nelson Mandela Academic Laboratory Chemistry Lithium, Folate, Vitamin B12, RF and ASOT

Anatomical Pathology Special stains for CD4, CD8, CD15, CD30, GFAP and Myoglobin

Microbiology ‘E’ TEST – Fluconazole antibiotic on Candida albicans, Candida species and Cryptococcus neoformans isolated from blood cultures

Ibhayi TB Laboratory HAIN MTBDRs v2.0 assay

Livingstone Urine Osmolality

Border Cecilia Makiwane HIV ELISA; TSH; T4 and Quant β-HCG

Southern Transkei Cofimvaba Calcium; Magnesium and Phosphate

St Barnabas Blood Morphology

The World Health Organization (WHO) recommended that Cryptococcal antigen (CrAg) should be used to screen HIV-infected persons with CD4 counts of less than 100 cells/µl. In support of the DoH’s goal to reduce mortality of patients due to cryptococcal meningitis, the region successfully introduced CrAg as a reflex test for CD4 counts of less than 100 cells/µl, in all the CD4 testing laboratories.

Service Delivery

In response to customer demands and the changing environment, the Northern Transkei Business Unit extended the NHLS footprint by opening three depots to enhance accessibility of services.

Access coverage remained 100% for clinic-to-clinic and hospitals with no laboratories on site, in line with the NHLS Strategy. Couriers collect more than once from the community health centres and gateways offering a 24-hour service in the metropolitan municipalities.

The Health Level 7 (HL7) interface between Livingstone Laboratory and Livingstone Hospital went live in August 2016. This has significantly improved the accuracy of patients’ registrations on the laboratory information system (LIS) and reduced unnecessary repeat testing for Livingstone Hospital. TAT in the laboratory has improved due to reduced time spent on registration of patient demographics.

Turnaround Time

A great improvement was noted on TAT in the year under review compared to the previous year. Even though the volumes for some priority tests increased due to changes in the National Guidelines for Management of Tuberculosis (TB) and HIV, the region achieved and exceeded all the targets set.


Table EC5: TAT

Business Unit

TB Microscopy within 48 Hours

GXP within 48 Hours

CD4 within 48 Hours

Viral Load within 96 Hours

HIV PCR within 96 Hours

Cervical Smear within 5 Weeks

FBC; U&E and LFT within 8 Hours

Target 90% 90% 90% 45% 67% 43% 80%

NMAL 98.0% 93.2% 90.3% 85.7% 89.9% 88.2% 91.0%

Ibhayi 82.2% 84.2% 96.8% 92.4% 80.2% 100.0% 91.6%

Border 93.8% 99.4% 94.7% 75.9% N/A 99.9% 91.0%

Northern Transkei

95.3% 97.0% 90% N/A N/A N/A 88.3%

Southern Transkei

97.8% 98.6% 90.6% N/A N/A N/A 90.8%

Region 93.4% 94.57% 92.5% 84.7% 85% 95.4% 90.5%

Customer Education

The increase in customer education and related interactions has played a pivotal role in advancing the NHLS as a brand and increasing visibility to customers:

• The Laboratory Manager at Dora Nginza was involved in the orientation of the internship doctors in January 2016.

• Port Elizabeth Provincial hosted a CPD accredited phlebotomy workshop in partnership with BD Trainers. A total of 51 healthcare workers and staff from the South African National Defence Force (SANDF) attended.

• The Border Business Unit trained 36 healthcare workers on specimen collection and phlebotomy techniques in the Buffalo City Municipality.

• In November 2016, the Northern Transkei Business Unit conducted training at OR Tambo, Qaukeni sub-district on TB specimen collection, handling and shipping, and minimising specimen rejections. More than 30 healthcare workers attended the training.


To mitigate the shortage of pathologists in the region, Nelson Mandela Academic Laboratories (NMAL), together with Walter Sisulu University (WSU), achieved Health Professions Council of South Africa (HPCSA) accreditation for MMed in Anatomical Pathology and Chemical Pathology. Two registrars were subsequently appointed from 1 February 2017, one in each department.

HPCSA accreditation for the training of medical technologists and technicians at NMAL, in microbiology; histology; chemical pathology and clinical pathology was also achieved.

The region continued to strive for the accreditation of its laboratories, with a major focus on central, tertiary and regional laboratories. The Cytology Department at NMAL/WSU was the only department not accredited. It is worth noting that following the initial accreditation of Cytology in November 2016, the business unit achieved 100% accreditation (all departments accredited).

Port Elizabeth Provincial, Livingstone and Dora Nginza laboratories successfully maintained their South African National Accreditation System (SANAS) accreditation status. Accreditation of the Virology and Serology laboratories was postponed to the new financial year due to the relocation of the Virology Laboratory from Dora Nginza to Port Elizabeth Serology.

East London Tertiary Laboratory maintained its accreditation status after a SANAS assessment of five departments; however, histology could not be assessed due to the unavailability of a pathologist. The department is nevertheless ready for accreditation, and will be assessed as soon as a pathologist has been successfully recruited.

Diagnostic Media Products (DMP) in Port Elizabeth once again received ISO 9001:2015 certification, with no non-conformances reported.

Three regional laboratories (Queenstown, Cecilia Makiwane, and St Elizabeth), were enrolled in the Stepwise Laboratory Quality Improvement Process towards Accreditation (SLIPTA) Programme, in preparation for SANAS accreditation in the new financial year:

• Queenstown achieved 3 stars in its first assessment

• Cecilia Makiwane achieved 2 stars in its second assessment

• St Elizabeth achieved 2 stars in its initial assessment.


The district laboratories that are not SANAS accredited were subjected to quality compliance audits to assess compliance with ISO 15189. All the laboratories performed well and as a result the region achieved 92% on average.

New Laboratories and Laboratory Upgrades

To ensure that the organisational strategic goal for state-of-the-art laboratories is achieved, the region installed high throughput viral load testing analysers at its Nelson Mandela Academic Laboratory and Port Elizabeth Virology Laboratory, and upgraded laboratories.

The region prides itself in these high throughput viral load testing sites as they contribute significantly to the use of viral load and EID testing for the initiation and monitoring of ART.

The Virology Laboratory was relocated from Dora Nginza to Port Elizabeth Provincial Laboratory in an attempt to centralise the specialised tests at the tertiary laboratories and improve the workflow of specimens. Major renovations were done to upgrade both the Virology and Serology laboratories at Port Elizabeth Provincial.

It must be noted that the region has one of the most highly automated microbiology laboratories in the country in Port Elizabeth. The laboratory received a PREVI-ISOLA instrument in February 2016, in addition to a VITEK Mass Spectrometer, which was installed in 2015/16. The resultant reduction in manual intervention has improved TAT significantly.

Madwaleni Laboratory in the Amathole District was upgraded in the year under review and is now a state-of-the-art laboratory. The commissioning was honoured by DoH representatives from the district.

Figure EC 1: The commissioning of Madwaleni Laboratory – Area Manager and Business Manager Ms Bukiwe Makaba cutting the ribbon, with acting CEO of Madwaleni Hospital, Mr Mawande Mtalana

St Patricks Laboratory was allocated space in the newly constructed hospital building and the laboratory was relocated from a park home in November 2016.


The total headcount increased from 660 in the previous year to 701 in the year under review.

Although the region experienced challenges in attracting pathologists in all disciplines, two pathologists were successfully recruited, a chemical pathologist and an anatomical pathologist at Nelson Mandela Academic Laboratory and Port Elizabeth Provincial Tertiary, respectively.

All laboratories were adequately staffed, especially after the implementation of the reward and remuneration policy. This has proven to be the best strategy to attract and retain scarce skills as well as to boost the morale of existing employees.


To support the laboratories in quality improvement, the region appointed Quality Assurance Co-ordinators in three business units that had never had this category of staff.

Training

NMAL appointed two registrars in Anatomical Pathology and Chemical Pathology in February 2017.

A nurse from Nelson Mandela Academic was trained on Fine Needle Aspiration in order to improve the adequacy rate and also received Prothrombin Index training to provide comprehensive support to the Haemophilia Clinic at Nelson Mandela Academic Hospital.

Intake for medical technologist and medical technician students in training was higher than any previous year. The Region attracted students for all categories in the three HPCSA-accredited training facilities, namely Nelson Mandela Academic; East London; and Port Elizabeth laboratories.

Table EC6: Student intake

Category DisciplineNelson Mandela Academic Laboratory

Port Elizabeth Provincial Tertiary

East London Laboratory Region

Medical Technologist Clinical Pathology 9 8 8 25

Haematology 1 1

Chemical Pathology 1 1

Microbiology 1 1 2

Histology 2 2 4

Cytology 1 1

Medical Technician Clinical Pathology 5 1 2 8

Chemical Pathology 1 1

Microbiology 1 2 3

Total 18 15 13 46

Skills Development

Skills development remained a priority for the region in order to build a skilled workforce. In total 545 employees were trained in the year under review.

Table EC7: Skills development training

Type of Training Number of Attendees

Legislative 103

Business Continuity 130

Management 70

Quality 29

Technical 22

Other 191

Total 545

In an attempt to increase the skilled workforce, the region assisted six medical technicians from three different business units to register for the National Diploma in Biomedical Technology. Three technicians attend part-time lectures at Mangosuthu University of Technology and three at Tshwane University of Technology.

To improve recruitment of medical technologists, the region has tied the bursaries to recruitment, with the aim of attracting the bursary holders to the needy areas when they are qualified.


Table EC8: External bursaries offered per district

Health District Year of Study Number of Students

Alfred Nzo Third 1

First 1

Chris Hani Second 1

First 1

OR Tambo Third 4

First 1

Amathole Third 1

Second 3

Buffalo City Third 2

Second 1

First 1

Nelson Mandela Bay Third 7

Sarah Baartman Third 1

Total 25


The business units attended District Management as well as Blood and Laboratory User’s Committee (BLUC) meetings to improve communication and relations.

Meetings aimed at strengthening academic relations and interfacing diagnostic services, research and academic training, such as Pathology Management Committee and IAPC were held as scheduled throughout the 2016/17 financial year.

In collaboration with the Dean of the Faculty of Health Sciences, the Area Manager of the Eastern Cape and the AARQA Executive held a major stakeholder initiative referred to as the “Pathology Indaba” in Mthatha. The purpose of the indaba was to deliberate on how to deliver on the academic mandate, hence achieving academic excellence jointly as Walter Sisulu University and Nelson Mandela Academic Laboratory.

Figure EC2: Pathology Indaba – From left to right are Tabita Makula (Area Manager, Eastern Cape); Dr Johan van Heerden (Executive Manager, AARQA); Dr Wezile Chitha (Dean of Health Sciences, WSU); and Prince Mdlalose (Business Manager, NMAL)


To increase NHLS visibility and improve stakeholder relations, the region participated in World TB and World AIDS day provincial events.

The region participated in the World AIDS day provincial event on 1 December 2016, held in Joe Gqabi District in the Elundini Sub-district.

To discuss service challenges and improvement strategies, scheduled quarterly bilateral meetings were held between the DoH and the NHLS.

The region also participated in a Science and Technology career guidance and awareness programme held by Umhlobo Wenene FM. The aim was to introduce biomedical technology as a profession and assist the youth to make informed career choices.

The Northern Transkei Business Unit and Nelson Mandela Academic Laboratory visited a number of schools in the OR Tambo and Alfred Nzo districts to assist in career guidance. Southern Transkei participated in a career guidance programme organised by Amathole Health district.

Conclusion

The region prioritised service delivery in the year under review and through team effort and allegiance, clients received a quality, reliable service.

WESTERN CAPE

Introduction

The Western Cape has two national central laboratories and one tertiary laboratory that link to and have a co-operative agreement with the Universities of Cape Town, Western Cape and Stellenbosch. The region includes 40 laboratories in three business units, which are spread across six health districts within the province. The business units provide diagnostic laboratory services to the DoH and the City of Cape Town, which includes two national central hospitals; one tertiary hospital (Red Cross War Memorial Children’s Hospital), five regional hospitals, 33 district hospitals and 274 primary healthcare facilities, including nine community healthcare centres. Coverage is also extended to the Department of Correctional Services, Department of Home Affairs, SANDF and private laboratories in the Western Cape. Pathology services are provided not only to the Western Cape, but also to Northern Cape and Eastern Cape.

The total staff complement is 933 staff members. The laboratories are well resourced with state-of-the-art equipment and dedicated and highly competent staff to deliver quality and patient-focused service.

Western Cape Business Units

Western Cape Business Units consist of the following laboratories:

• Groote Schuur Hospital (GSH)

• Tygerberg Hospital (TBH)

• Green Point Complex (GPC).

Table WC1: Western Cape laboratories

National Central Academic Laboratories Tertiary Laboratories Regional Laboratories District Laboratories

GSH Chemical Pathology

RXH Chemical pathology

GPC Chemical Pathology

Vredendal

GSH Haematology RXH Haematology GPC Haematology West Coast District

GSH Microbiology RXH Anatomical Pathology

GPC TB Lab Karl Bremer

GSH Virology GPC Media Lab Mitchell’s Plain

GSH Cytology GPC-Satellite Emergency Lab

Helderberg

GSH Anatomical Pathology

George Mossel Bay

GSH Immunology Paarl Oudtshoorn

GSH Tissue Immunology Worcester Knysna

GSH Genetics Beaufort West

TBH Chemical Pathology Khayelitsha

TBH Haematology Hermanus

TBH Microbiology Pollsmoor

TBH Virology

TBH Immunology

TBH Cytology

TBH Anatomical Pathology

TBH Genetics

17 Laboratories 3 Laboratories 8 Laboratories 12 Laboratories

As part of the NPP, GeneXpert (GXP) and Auramine smears as well as viral load (VL), CD4 and HIV Polymerase Chain Reaction (PCR) are performed at several laboratory sites in the Western Cape.

Area Manager Nasima Mohamed



Table WC2: 14 Laboratories perform GXP analysis

Laboratory District

Paarl Cape Winelands

Worcester Cape Winelands

Green Point City Metro

GSH City Metro

Tygerberg City Metro

Karl Bremer City Metro

Khayelitsha City Metro

Mitchells Plain City Metro

Pollsmoor City Metro

George Eden

Oudtshoorn Eden

Knysna Eden

Beaufort West Karoo

Vredendal West Coast

GXP sites use a total of 15 GX4 analysers, 13 GX16 analysers and one Infinity analyser (Green Point Laboratory). More than 250 000 GXP tests were performed in the period 1 April 2016 to 31 March 2017.

Two laboratories (Table WC 3) use Roche Cobas/Ampliprep analysers to process HIV and VL testing. These sites processed a total of 290 000 VL tests over the reporting period.

Table WC3: HIV and VL testing sites

Lab District

Groote Schuur Cape Metro

Tygerberg Cape Metro

Table WC4: CD4 analysis laboratory sites

Lab Name District

George Eden

Green Point Cape Metro

Groote Schuur Cape Metro

Tygerberg Cape Metro

George Laboratory has now been running the new Aquios analyser for more than 12 months, with very few breakdowns and hence TATs have improved.


The Western Cape achieved a 2.3% increase year-on-year from 10 530 722 tests performed in 2015/16 to 10 777 164 tests in the year under review. Anatomical pathology volumes increased by 12% with the province assisting the Eastern Cape and Northern Cape.

The focus in 2016/17 was on improving the quality of specialised services. In November 2016 the NPP launched the VL and CD4 Monitoring Dashboard. This will allow users access to various data sets with regard to VL and CD4.

A new pilot project will see GX4 analysers installed in three laboratories (Beaufort West, George and Vredendal) to perform VL as point-of-care.

Cryptococcus antigen reflex testing was introduced at the CD4 laboratories. The reflex is based on all CD4 values of < 100 for those HIV positive patients who are susceptible to developing meningitis.

A new way of capturing “Club ART” patients is currently being piloted in some of the metro laboratories. This assists the clerks to sort the results before filing them and adds considerably to the efficiency of filing.

The Hain second line (SL) lipoprotein(a) (LPA) was introduced in January 2017 after the WHO sanctioned the use of the second line PCR/LPA directly on clinical samples, irrespective of smear status. An excellent TAT, within 5 days, for SL results can now be offered, especially on clinical samples where the GXP was positive and rifampicin resistant. The GXP test allows for testing of gastric washings in children as well as cerebrospinal fluids (CSFs), fine needle aspiration (FNA) and purulent fluids in adults. This is in line with provincial guidelines.


The Human Genetics Laboratory at the Groote Schuur Academic NHLS Business Unit comprises a molecular and cytogenetics component and is the only SANAS (ISO 15198:2012) accredited genetics laboratory within the NHLS and the second largest NHLS genetic service in the country.

The diagnostic genetics service at GSH has been expanding since 2010, with the introduction of new tests to improve the quality of results; keep up with international trends and standards; as well as respond to demands by referring clinicians. The rapid growth of genomic technologies, the improvement in detection rate of disease-causing variants and the drop in price of these technologies, together with the close relationship with the University of Cape Town’s Division of Human Genetics, places the NHLS Western Cape in an excellent position to develop as a national Centre of Excellence for Genetic and Genomic Diagnostics.

An important area of development in the diagnostic human genetics laboratory pertains to the use of genome-wide technologies e.g. cytogenomic microarray analysis (CMA) for copy number variation (CNV) detection and whole exome sequencing for specific mutation identification. Internationally, the use of CMA leads to a detection of pathogenic CNVs in 15–25% of cases of intellectual disability/developmental delay compared to only 1–5% of these patients showing gross chromosome abnormalities with the technologies currently used in our laboratories. In keeping with international standards and in an effort to improve the quality of service in response to the needs of our clients, we now therefore offer our clients genomic testing with CMA.

The NHLS has entered into a contract with the Department of Home Affairs (DHA), as the sole service provider of DNA-based paternity testing of all late registrations of birth and foreign parent/s. The genetics laboratory procured an ABI genetic analyser 3500, which is used for both sequencing and fragment analysis applications using capillary electrophoresis. In line with the directive from the DHA, Human Identification (HID) testing will be performed. The GSH Laboratory will assist the other NHLS laboratories with the paternity testing workload from the DHA.

The Groote Schuur Tissue Immunology Laboratory is the only European Federation of Immunology (EFI) accredited laboratory in Africa. This enables the laboratory to provide the donor/recipient human leukocyte antigen (HLA) matching screening for bone marrow transplant patients to the international community. The laboratory assists the Sunflower Fund South African Bone Marrow Registry donor drives by providing the phlebotomy service.

The Tygerberg Microbiology Laboratory expanded its test repertoire to include Legionella antigen testing on urines (February 2017). The Western Province Blood Transfusion Service made use of the laboratory, requesting blood tests for possible bacteriological cause for transfusion reactions (August 2016).

The Tygerberg Virology Laboratory is the only unit performing routine cell culture, virus isolation and Coxsackie Virus neutralisation assays. It remains one of only a few NHLS laboratories performing HIV drug resistance testing for routine diagnostic purposes. A number of new assays was accredited in 2016 including Epstein Barr Virus (EBV) viral load; Hepatitis B Virus (HBV) PCR, viral load and genotyping; Hepatitis E Virus (HEV) PCR as well as Immunoglobulin G (IgG) and Immunoglobulin M (IgM) antibody testing; and qualitative PCR assays for parvovirus B19, a panel of 16 respiratory viruses, and polyomaviruses JC and BK.

The Tygerberg Laboratory initiated the phased implementation of a new Roche automated analyser track and pre-analytical automation system from July 2016. This significant change to the laboratory has brought in state-of-the-art technology to enable the consolidation of testing platforms, improve use of resources, improve workflow and enhance efficiency in the unit.

Figure WC1: The new Somerset Hospital Emergency (STAT) Laboratory was opened in April 2017


Figure WC2: Opening of the Somerset Hospital STAT laboratory, Ms Faith Koopa (Lab Manager - NHLS GPC Chem Path), Nicolene van der Westhuizen (Support Services - DoH), Nanette Spencer (Acting NHLS Area Manager - WNC), Dr Donna Stokes (CEO - Somerset Hospital), Mr Francois Barton (Business Manager - NHLS GPC and Regional Laboratories) and Dr Jacques Hendricks (Medical Manager - Somerset Hospital)


Health facilities in the Western Cape have 100% coverage of specimen collections with a large number of facilities having more than one collection per day. Expansion of weekend courier services to some districts was implemented to improve service delivery and TAT.

The TB/HIV co-ordinator, laboratory manager and the pathologists continue to be involved in regular training and teaching programmes for healthcare workers. Western Cape pathologists play a pivotal role in pathology coverage within the NHLS. Quarterly lectures are presented four times a year to the nurses at the Nurses Training College. Lectures relate to diagnosing TB (presented by a laboratory manager) and drug resistant TB (presented by a pathologist).

The division of Anatomical Pathology GSH and TBH continue to provide support to the Port Elizabeth and East London laboratories respectively, due to a shortage of pathologists in the Eastern Cape. GSH Anatomical and Chemical Pathology departments also provide support to the Northern Cape. The TBH Immunology Department continues to provide a consultancy service for Primary Immune Deficiency (PID) throughout South Africa and Africa.

The addition of two GXP4 machines in June 2016 expanded the capacity of the TBH Microbiology Laboratory for additional GeneXpert MTB/RIF testing and vastly improved TAT.

The TBH Microbiology Laboratory provided key testing to Tygerberg Hospital during the Carbapenem-resistant Enterobacteriaceae outbreak in Tygerberg during July 2016 and suspected C.diphtheria outbreak in December 2016.

A special Occupational Health and Safety service is provided to the SANDF for the testing of water and food samples for Parliament. Additional service is provided to 2 Military Hospital when they are short-staffed due to deployments.

Phlebotomy services are provided in support of the Area Military Health (substructure of the SANDF), which monitors Occupational Health and Safety for the military.

Pathologists, registrars and Heads of Department (HODs) participate in various clinical meetings and forums contributing to and guiding patient management. Pathologists as well as a number of senior technologists and managers serve on among others the Medical Technologist Scientific Advisory committees; National Education Committee; and the NHLS Expert committees. There is also participation in setting and moderation of Board examinations.

Turnaround Times (TATs) 2016/17

Table WC5: Average TATs for priority programme tests by Western Cape Laboratories

Priority Test Volume % within TAT

Percentage of GeneXpert tests with TAT within 24 hours 250 648 97%

Percentage of TB microscopy tests with TAT within 40 hours 160 221 96%

Percentage of CD4 tests with TAT within 40 hours 222 270 97%

Percentage of viral load tests with TAT within 96 hours 298 150 82%

Percentage of HIV PCR tests with TAT within 96 hours 38 083 93%

Percentage of Cervical Smears tests with TAT within 5 weeks 137 696 97%


It should be noted that lengthy breakdown periods on the VL analysers have affected TAT. Since analyser breakdowns are now more carefully monitored, new workflows at TBH Virology Laboratory improved their TAT in the final quarter of the reporting period. A decrease in CD4 volumes compared to 2015/16 has been noted, with a concomitant increase in VL testing.


On a monthly basis, a TB pathologist from the Green Point TB Laboratory attends the TB Forum at TBH. The forum is a monthly meeting of all the stakeholders in the TB environment, from the DoH and the City of Cape Town to Non-Governmental Organisations (NGOs). Presentations are given and cases are presented with the laboratory answering queries from attendees.

DoH sub-district meetings are attended monthly. These provide the opportunity to interact with health facility management and staff.

World Aids Day was supported at various sites with the DoH.

Support was provided to the Phelophepe Train when it moved through the Worcester area on its way to George. Consumables requested were supplied and laboratory results were made easily accessible.

TB in prisons remains a high priority. Continuum of care meetings were attended with the Department of Correctional Services in various management areas to listen to some of their challenges regarding laboratory work.

The NHLS Western Cape fully supported the African Society for Laboratory Medicine when it held its conference at the CTICC during December 2016.

Western Cape laboratories participated in the hospital intern doctor’s orientation for 2017 and laboratory support services managers participated in training hosted by Becton Dickenson for hospital and clinic nursing staff.

The TBH Laboratory support staff visited some of the children’s wards at Tygerberg on Monday, 17 July, as a 67 Minutes event for Nelson Mandela Day. This event was very successful in that the children really enjoyed the visit and were so excited to receive their packages (consisting of a colouring booklet, balloon, packet of chips and a few sweets).

Notable Achievements including Accreditation

In total, 25 laboratories (specific disciplines) in the Western Cape maintained SANAS ISO 15189:2012 accreditation status. These specific discipline laboratories are based at the George Laboratory, Green Point Complex (GPC), GSH and TBH laboratories. GPC Haematology and Chemical Pathology Laboratory also maintained its College of American Pathologists accreditation. The DMP Laboratory at Green Point maintained its SABS ISO 9001:2008 certification for a consecutive year without any non-conformances raised. This laboratory will in future be assessed on the ISO 9001:2015 standard.

All divisions achieved an average of 89–100% for external proficiency testing schemes.

International Pathology Day was celebrated on 16 November 2016. The GSH RXH/UCT Unit took this opportunity to showcase the pathology laboratories’ work on E floor of the Groote Schuur Hospital. The event (themed “What happens to your blood sample?”) attracted extensive public interest.

Figure WC3: International Pathology Day event


The Cytology staff had an exhibition table at the Mitchell’s Plain Day Hospital Breast Clinic during the “Pink drive” on 30 August 2016.


The appointment of an expert in flow cytometry at Tygerberg has enabled the Cape Peninsula University of Technology (CPUT) to offer training to Bachelor of Health Science (BHSc) students in Immunology, which is a first for the discipline.

Training

Training programmes were held during the financial year and were well attended. Journal clubs and Continuing Professional Development (CPD) talks continued in the various divisions. The laboratory training programme includes BHSc and diploma technologist students, technicians, intern scientists and registrars.

Figure WC6: Courses attended by Western Cape Laboratory technologists

Course Attendees Output

Advanced GeneXpert Training Medical Technicians and Medical Technologists

Understanding the GeneXpert in order to train other staff members

Finance for Non-Financial Managers

Leadership & Management

Performance Management Systems

Laboratory Managers Improved management skills

Internal Quality Management Systems (QMS)

Advanced Quality Control (QC) Workshop

Internal Audit

Overview of QMS

Medical Technicians, Medical Technologists and Laboratory Managers

Improved approach to QC in the laboratories

Health Technology Assessment (HTA) and ISO 15189:2012 training

Medical Technicians, Medical Technologists and Laboratory Managers

Preparation for changes to SANAS auditing standards and training of internal auditors

Excel 1-3 and Power Point All levels of staff Increased skills in preparing spreadsheets and presentations

Lean Management

Business Ethics

Diversity Management

HR training

Laboratory Managers and Supervisors

Improved workflow in laboratories and reduced bottlenecks to improve service delivery

Typing skills Laboratory Clerks Improved accuracy and speed of data capturing in order to reduce errors in sample registration

Dangerous goods, Fire Warden and First Aid All levels of staff Legislated courses for staff with those responsibilities

EP15 for validation and verification of instruments and tests

Medical Technologists and Laboratory Managers

Improved the quality of the overall test system to ensure a quality result

New Laboratories and Upgrading of Facilities

The University of Stellenbosch undertook the upgrading of the NHLS Virology Division, housed on the 8th floor of its Faculty of Health Sciences, as part of its “Catch-up Maintenance” programme, to bring the building in line with safety regulations and improve the facilities. This included the complete replacement of electrical and communication systems, network points and telephone and fire protection systems. Refurbishment of passage floors, and the provision of dedicated rooms for fridges and freezers with extraction units for CO2 gas and air-conditioners were included in the project.

The TBH Laboratory underwent extensive upgrades during 2016. Improvements included renovation of the receiving office to create additional space and improve workflow; replacement of flooring to improve safety; and painting to create a more acceptable working environment.

The Core Laboratory at Tygerberg was upgraded to incorporate the new Roche automated analyser, track and pre-analytical automation (MPA). Further upgrades included the air-conditioning system and one combined walk-in fridge and freezer.

Numerous rooms and facilities on the 10th floor Anatomical Pathology were improved for the benefit of both academic and service areas.

Conclusion

The Western Cape NHLS continues to provide a high quality diagnostic service to stakeholders in the Western Cape. Western Cape Laboratories have improved their services to clients and 25 laboratories continued to maintain SANAS accreditation. Work will continue towards the NHLS Strategy of accrediting all laboratories in the region.


NORTHERN CAPE

Introduction

The Northern Cape is the largest and most sparsely populated province in South Africa. It has a surface area of 372 889 km² with a population of approximately 1 185 600 (2015) and comprises five districts, Frances Baard, John Taolo Gaetsewe, ZF Mgcawu, Pixley ka Seme (NHI site) and Namaqua. There is one NHLS laboratory in each district.

In line with the NHLS Strategy, an effort is being made to increase accessibility to services by increasing the number of laboratories in the business unit. This will be achieved by having a laboratory in each district hospital. The initial focus is on Kuruman and Hartswater (Connie Vorster) hospitals. The total staff complement in the business unit at the end of March 2017 was 83.

The business unit continues to support and align services with the mandate of the DoH, and is committed to contributing to government’s vision of “A long and healthy life for all South Africans”. All laboratories perform TB microscopy and GeneXpert tests. There are three CD4 testing sites, namely Kimberley, Upington and De Aar laboratories. Specialised tests are referred to Universitas, Tygerberg, Green Point and Charlotte Maxeke Johannesburg Academic hospitals.

Table NC1: NHLS laboratories per district

District Laboratory After-hour service

Frances Baard Kimberley Night shift

John Taolo Gaetsewe Tshwaragano On call

ZF Mgcawu Upington Night shift/On call weekends

Pixley ka Seme De Aar On call

Namaqua Springbok On call

Diagnostic Services, Test Volumes and New Developments

The Northern Cape achieved a 4.0% year-on-year increase from 1 642 978 tests performed in 2014/15 to 1 708 054 tests in 2015/16 and 1 779 966 tests in 2016/17. CD4 volumes increased 1.6% and 9.2% for GeneXpert tests. This increase is attributed to the implementation of and adherence to the TB/ART guidelines and training provided by NPP. Four mines, namely Beeshoek, Black Rock, AfriSam and Khumani are currently serviced and Kolomela and Petra Finsch mines are in the process of being registered.

Priority Programmes

CD4 test volumes increased by 1.6% from 63 603 in 2014/15 to 65 002 in 2015/16 and 66 016 in 2016/17. However a decrease in volumes was noted from October 2016 due to the removal of CD4 count as an eligibility criterion for ARV treatment from 1 September, as announced by the Minister of Health on 10 May 2016.

TB microscopy analysis decreased by 24% from 47 898 in 2014/15 to 43 403 in 2015/16 and 34 948 in 2016/17. The decrease is attributable to implementation and training on the GeneXpert algorithm conducted by the NPP Department as well training on minimum clinical data sets (MCDS).

GeneXpert analysis decreased by 5.8% from 71 238 in 2014/15 to 78 461 in 2015/16 and 74 188 in 2016/17. The decrease is attributable to continuous training and support provided by the NPP Department on GeneXpert algorithm implementation; cost containment measures on laboratory testing implemented by the DoH; and a decrease in TB infection, as announced by the Minister.

Table NC2: New laboratory tests introduced in 2016/17

Laboratory New Tests

Kimberley Automated D-Dimer Innovance

FSH, Progesterone, LH, Oestrogen, Ferritin, Amikacin, Vitamin B12, Folate, Testosterone, CA15-5, CA15-3, CA19-9 validation in progress.

Area Manager Nasima Mohamed



Cryptococcal antigen reflex testing for CD4 counts <100 was implemented in September 2016 at the CD4 testing sites, namely Kimberley, De Aar and Upington.

Upington, De Aar, Springbok and Tshwaragano laboratories were identified as pilot sites for viral load testing. They were assessed for availability of resources and infrastructure. The GX4 analysers for the purpose were installed at Upington, Springbok; Tshwaragano and De Aar.

Service Delivery

Daily collection from healthcare facilities is maintained at 100% by Hartmann Emergency Care. In total, 240 facilities are serviced. Additional new bidirectional SMS Printers were installed in the Namaqua District facilities to improve turnaround times of priority programmes.

Figure NC1: Bidirectional SMS printer

The pathologists continue to provide advisory support to clinicians, train staff and improve service delivery. Advisory services are provided for microbiology, chemistry and haematology by Universitas and Groote Schuur hospitals. They are also involved in the Continuing Professional Development (CPD) programme and advise on technical issues. This has a positive impact on the business unit as the clinicians also consult as and when needed, resulting in improved morphology and histology turnaround times.

Table NC3: Daily clinic coverage per laboratory/district

District Laboratory Number of Clinics 2016/17 Daily Collection

Frances Baard Kimberley 64 100%

Pixley Ka Seme De Aar 39 100%

ZF Mgcawu Upington 47 100%

John Taolo Gaetsewe Tshwaragano 65 100%

Namaqua Springbok 26 100%

Turnaround Times

The business unit continued to perform well in both diagnostic and priority programme TATs.

Table NC4: Priority Programmes Turnaround Times

Test2014/15 % within TAT

2015/16 % within TAT

2016/17 % within TAT Target (%)

TB microscopy (40 hours) 99 97 96 90

CD4 (40 hours) 98 98 99 85

GeneXpert MTB/RIF (24 hours) 97 98 98 90

FBC N/A N/A 95 80

U&E N/A N/A 88 80

LFT N/A N/A 82 80

Average 98 98 93 84


Client Interaction Management

The presence of the Client Liaison Officer has improved stakeholder relationships in the business unit, resulting in a reduction in the number of complaints received. This has been achieved by spending more time in the districts and the laboratories, assisting with service improvement issues and training. District meetings were also attended to ensure that issues are addressed at district level. Visits were undertaken to 161 facilities, and 854 healthcare workers were trained on MCDS, WebView access, stock control, Pap smears, PCR, GeneXpert, blood collection and SMS Printers.

Fig NC2: Blood collection, SMS printer and GXP training in Francis Baard district

The business unit has collaborated with the Northern Cape DoH in extending laboratory services to the mines. The service to the four mines previously mentioned commenced in November 2014 and monthly partnership meetings are held with these parties. Courier services are also provided for the mines.

Stakeholder relationships have significantly improved through regular district and provincial meetings, resulting in turn in improved services.

The business unit was actively involved in the provincial World TB Day commemoration, which was held at Upington and in World AIDS Day, which was held at Masilo Maria Leu Community Hall, in Deben, Khatu.

Figure NC3: From left to right: World TB Day in Uppington, Pinky Moipolai, Motsamai Mofekeng, Busisiwe Ngubeni

In an effort to address skills shortages in the province, an initiative to recruit learners from the two districts, Namaqua (Springbok) and John Taolo Gaetsewe districts high schools, was pursued, in collaboration with a learning academy. The first learner has been awarded a bursary and has commenced her studies at Central University of Technology.


Figure NC4 : High school learners recruitment drive at John Taolo Gaetsewe district in Tshwaragano

Technical Skills and Training

Over the years, considerable effort has been put into ensuring that training takes place at all levels. A total of 854 healthcare workers and 214 staff have received training. The following courses were provided.

Table NC5: Courses provided

Course Attendees

New NCE, CA.PA procedure and Risk management All internal auditors, laboratory managers and supervisors

Trackare refresher LSS staff, technologists, technicians

Fire Fighting training Fire wardens and deputies

First Aid Level 1 training First aider and deputies

Customer Service LSS staff, technologists, CLO, technicians

Finance for Non-finance Management Managers and supervisors

Conflict Management All staff

Presentation Skills Managers and supervisors

Stress Management Managers, supervisors, IT, CLO

Time Management Managers and supervisors

Laboratory Management in Practice Laboratory managers

Ethics workshop All staff

Morphology Technicians and technologists

Technical staff acquisition and retention remains a challenge. Posts are advertised and either no response is received, or applicants are unsuited to the positions.

To ensure that staff members are kept abreast of new developments in the pathology sector, four staff members attended the ASLM Congress in Cape Town.

Training of Students

Kimberley Laboratory is the only training laboratory in the business unit. Of the two student technologists who wrote the examinations in September 2016, only one passed and has been appointed to Kimberley Laboratory. Two wrote their board exams in March 2017 and one passed. Seven student medical technologists were appointed in February 2017.

The students are continuously assessed, and gaps and challenging areas are identified and actioned timeously. These students also attend the refresher courses offered by the Training Department. Retention of students in the rural/outlying areas remains a challenge.


Accreditation

Kimberley Laboratory had a successful pre-SANAS audit in August 2016 after which a full SANAS audit was conducted from 22–23 February 2017 and the laboratory was recommended for SANAS accreditation. This was a great achievement for the Northern Cape as this is the only tertiary laboratory in the province.

The appointment of a Quality Assurance Co-ordinator in September 2016 has had a positive impact. The Co-ordinator has provided support to all the laboratories in the business unit and played an important role in the accreditation process.

Figure NC5: Kimberley laboratory team

De Aar Laboratory has been identified as the National Health Insurance (NHI) pilot site. It is being prepared for accreditation and in the review period achieved 95.7% in its quality compliance audit and 99.1% in its safety audit. The Quality Assurance Department is working closely with all the laboratories to ensure that they perform at an accredited laboratory level. The Northern Cape achieved an overall outcome of 88% for compliance audits and 97% for safety audits.


The new hospital has been completed at De Aar, with the proposed occupation date being May 2017. Kimberley Laboratory has been recommended for pre-analytical automation and the tender process is underway. This will improve workflow tremendously. Renovations are also in the pipeline.

Conclusion

Generally, the business unit’s performance has improved. Great improvement was noted in the compliance and safety audits. Tshwaragano Laboratory continues to perform well despite regular power outages due to insufficient electricity at Batlhlaros Village. Attracting staff to the province, especially the rural areas remains a challenge. However, as a team the staff members are committed to making the best with what is available to improve patient care and service delivery in the province. We are positive that the new high school learner retention strategy will address this challenge.


KWAZULU-NATAL

Introduction

The KwaZulu-Natal (KZN) Region of the National Health Laboratory Service (NHLS) is one of six NHLS regions that supports the KZN DoH; other government departments, including but not limited to the Department of Agriculture Forestry and Fishery (DAFF), Department of Correctional Service (DCS); Non-Governmental Organisations; and Non-Profit Organisations (NPOs).

The region supports all eleven health districts, with 100% access coverage to laboratories at National Central Hospitals, Regional Hospital, District hospitals and Primary Health Clinics (PHC) through a daily specimen collection courier service, which is outsourced by NHLS. The region prides itself in having 100% provincial pathologist coverage through the availability of Laboratory Medicine Specialists (Pathologists) in all Clinical Pathology disciplines, either telephonically to give advice to clinicians throughout the province or through physical interactions where required and possible.

One of the key successes for the region was the alignment of the six Business Units with the DoH district boundaries and the renaming of all business units to reflect the name of the district the business unit is servicing. The aim was to ensure that the NHLS in the region is aligned with DoH nomenclature in order to be more responsive to their needs; improve efficiency; and improve communication, reporting and accountability. This prevents the confusion experienced previously, where business units cut across different health districts. Previously eThekwini District, for example, was service by three different NHLS business units i.e. Academic Complex Business Unit, eThekwini North Business Unit and eThekwini South Business Unit. This arrangement made effective communication and reporting difficult and almost impossible to hold NHLS managers accountable. The region consist of 65 laboratories of which two are at community healthcare centres (CHCs); and nine TB Microscopy Sites, of which eight are in CHCs, and one is at a Specialised TB Hospital. This means that the region has a more decentralised service than any other region within the NHLS.

Service Delivery

The introduction of Cryptococcal Antigen (CrAg) reflex testing (Cd4 count below 100) was initiated in October 2016 for early detection and treatment of Cryptococcal meningitis before it is symptomatic, to reduce morbidity and death due to meningitis infection.

Table K1: Cases tested in the region

Total CD4 Count Tested

Number of CD4 Count Below 100 (tested for CrAg)

CD4 Count % Positive

Crptococcal Antigen (CrAg) Positive

CrAg Positivity Rate

459 378 36 327 8% 2 774 10%

The region focuses on customer centricity, improved quality of service and improving efficiencies to provide cost-effective services, as mandated by the NHSL Act. The region envisages achieving these goals by leveraging existing and new technology. This includes implementing pre-analytics automation, for which requisitions and approval have already been obtained, for implementation at the higher throughput laboratories, such as Addington and Prince Mshiyeni Memorial Hospital (PMMH). In January 2017, a project plan was drawn up for the automation of the microbiology space, of which PMMH has been identified as the pilot site. The project plan is currently being refined for implementation in 2018/19.

KZN is moving with unprecedented speed towards SANAS accreditation of its laboratories. IALCH-Microbiology achieved SANAS accreditation in the review period; and IALCH-Cytology, Greys Hospital, Edendale and PMMH passed pre-SANAS audits and are confident of achieving SANAS Accreditation in the first quarter of 2017/18.

The Academic Complex Business Unit

The unit provides specialised and routine diagnostic pathology services to the two National Central Hospitals, which are IALCH and King Edward VIII Hospital (KEH), and their clinics and serves also as a referral for all laboratories for specialised tests for the KwaZulu-Natal Province as a whole. The

Area Manager Sibulele Bandezi



Academic Complex laboratories play a pivotal role in the training of registrars, in collaboration with University of KwaZulu-Natal (UKZN), as the only training platform for training of Laboratory Medicine Specialists (Pathologists) in various disciplines, and the training of medical scientists and medical technologists collaborating with Universities of Technology (UoTs).

Academic Complex laboratories also collaborate with other government and non-governmental organisations and perform testing on request for research units such as UKZN Laboratory Medicine and Medical Sciences; the Medical Research Council; KwaZulu-Natal Research Institute for Tuberculosis and HIV; and the private sector. Pathologists provide coverage to the province through various clinico-pathological consultative services, which are offered to clinicians and NHLS laboratories.


During the 2016/17 financial year, 4 819 375 tests were performed and billed, reflecting an 11.6% increase over the previous financial year. This increase was mainly due to an aligned response to changes in the guidelines for the Comprehensive Care, Management and Treatment of HIV and AIDS (CCMT) Programme, which affected all the diagnostic laboratories, despite renewed efforts at manual and clinical gatekeeping. Continued interventions and strategies to reduce rejections resulted in an average rejection rate for the period of 2.3% (test set) and 5.1% (episodes).

In the face of cost containment and efficiency measures, the introduction of new tests and technology was limited and efforts were focused primarily on ensuring sustainability as a business unit and eliciting maximum productivity from the existing skilled staff. An average of 32% of total revenue was spent on the procurement of direct materials up until the end of the financial year, which was within the 34% budgeted ratio. Labour comprised 47% of revenue and exceeded the 46% budget target due to organisation-wide salary adjustments made by the Reward and Remuneration Project, which aim was to improve lagging salary scales within the organisation. The Academic Complex exceeded its expenditure budget by 7.8%, mainly as a result of external testing expenses to the value of R24,422,039 (112% variance from budget) for the outsourcing of histopathology, cytogenetics, certain haematology molecular and some specialised chemical pathology tests due to national skills shortages of health professionals in certain fields.

Income from the Training, Teaching and Research Grant was received to the value of R30 617 058 which does not fully cover the training, teaching and research mandate of the NHLS, however the business unit managed to post a net surplus of R15 143 381 at year-end.

The Virology Laboratory introduced the cytomegalovirus (CMV) viral load test in February 2017 and an average of 182 samples were tested monthly. Cryptococcal Antigen (CrAg) reflex testing was implemented at KEH Haematology for CD4 levels <100. The CrAg positivity rate was 10%. New chemical pathology and haematology analysers were installed at KEH over a period of six months in 2016. Coagulation analysers in the IALCH Haematology Laboratory were replaced and upgraded in August 2016 by the Impilo Consortium, as part of the KZN DoH Private Public Partnership (PPP) arrangement with Impilo Consortium.

Aging analysers in the IALCH Haematology Laboratory could not be repaired successfully nor replaced due to the Impilo Consortium’s budgetary restrictions and the testing of Vitamin B12 and Folate was ultimately transferred to the IALCH Chemical Pathology Laboratory in March 2017 to be performed on another platform. However, whilst the validation was under way, extended downtimes at the only other site in KwaZulu-Natal necessitated the referral of 1 807 Vitamin B12 and 1 742 Folate samples to a private laboratory, in order to maintain service delivery. The laboratory, which continued to be plagued by a shortage of highly specialised skill sets, increased its outsourcing of Cytogenetics and molecular testing to private laboratories in 2016/17. The Anatomical Pathology Department was able to reduce its outsourcing from 50% to 32% by the end of the financial year because of the placement of newly qualified pathologists in February and March 2017. In total, 23 597 histopathology specimens i.e. 10% of the total workload, were outsourced privately during 2016/17.


The IALCH laboratories perform specialised referral tests. Shifts were optimised to ensure that service delivery continued in the 24-hour and priority programme laboratories, despite a critical staffing shortage in certain laboratories. However, this could not be implemented for HIV DNA PCR testing due to the specialised nature of the testing and a shortage of medical technologists qualified in the discipline. This had a negative impact on the turnaround times for this test (63.94%). Overtime was approved for laboratories with inadequate staffing to ensure optimal staffing during shifts; however, a full shift system could not be implemented since all vacant positions had not yet been filled. A workforce model and an adequate operational budget are critical to determine the optimal staffing needs and it is anticipated that these will be in place by 2017/18.

Clinics were visited on a quarterly basis and issues were addressed regularly. Specimen tracking has been discontinued at the three clinics covered by KEH (Cato Manor, SACTWU and Chesterville clinics) as the functionality has been disabled due to procurement issues with the contract. SMS Printers have been functional and operational in all clinics during 2016/17.

The academic pathologists ensure consultative service delivery coverage to the laboratories in the province, and perform regular visits to specific sites in the area. Regional expert groups advise on and provide assistance on service delivery platforms in the region.


Turnaround Times

The TAT for CD4 testing was 95.9% and was within the expected target. For viral load testing, the TAT was met (96.5%), however for HIV PCR the target was not met (63.9%) due to a critical shortage of medical technologists in the Department of Virology. Instrument downtime also played a role. Targets were met for TB microscopy TAT (97.8% at IALCH and 98.4% at KEH). GeneXpert testing TAT was 89.6% at IALCH for extrapulmonary TB and 99.6% at KEH for pulmonary TB. The average cervical screening turnaround time for Pap smears was 99.7%. Targets for FBC, U&E and LFT were also met at both hospitals; IALCH 99.8%; 99.6%; 92.5% respectively and KEH 99.7%; 98.3%; 91.2% respectively.

For the laboratories performing tests for the National Priority Programmes, the average TAT was as follows:

Table K2: TAT targets and performance 2016/17

Apr

il 20

16

May

June

July

Aug

ust

Sept

embe

r

Oct

ober

Nov

embe

r

Dec

embe

r

Janu

ary

2017

Febr

uary

Mar

ch

Ave

IALCH

HIV PCR 52.79% 86.05% 75.69% 95.48% 76.70% 76.99% 80.65% 93.43% 66.35% 17.97% 44.20% 6.80% 64.43%

VL 98.72% 98.66% 97.93% 99.55% 97.48% 98.69% 94.91% 99.63% 92.22% 97.88% 90.30% 89.50% 96.29%

LFT 85.53% 85.04% 85.20% 85.28% 96.14% 97.54% 98.02% 97.76% 98.18% 98.27% 97.49% 93.43%

U&E 99.94% 99.84% 99.56% 99.73% 99.59% 99.80% 99.86% 99.63% 99.80% 99.76% 99.10% 99.69%

CervSm 97.81% 99.01% 99.85% 100.00% 99.99% 99.98% 99.97% 99.99% 99.99% 99.62% 99.85% 99.75% 99.65%

FBC 99.88% 99.82% 99.93% 99.82% 99.89% 99.74% 99.83% 99.74% 99.87% 99.83% 99.88% 99.84%

Gxp 79.46% 92.48% 89.93% 82.85% 90.98% 92.28% 87.99% 91.15% 84.97% 95.50% 92.49% 90.90% 89.25%

TBM 91.12% 99.08% 97.15% 99.84% 99.86% 99.25% 99.59% 99.13% 98.36% 96.52% 98.34% 96.60% 97.90%

KEH

CD4 98.92% 99.20% 98.97% 92.94% 97.88% 98.96% 98.18% 99.01% 97.33% 99.03% 99.05% 71.04% 95.88%

LFT 85.13% 85.45% 85.12% 85.29% 97.91% 99.39% 97.45% 91.66% 94.15% 93.89% 96.20% 91.97%

U+E 99.64% 99.88% 99.59% 99.59% 99.73% 99.59% 98.76% 96.38% 95.12% 94.69% 97.23% 98.20%

FBC 99.87% 99.87% 99.85% 99.90% 99.84% 99.94% 99.74% 99.92% 99.69% 99.55% 99.33% 99.77%

GXP 100.00% 99.77% 99.77% 99.68% 99.54% 99.80% 99.90% 100.00% 100.00% 99.77% 99.46% 99.89% 99.80%

TBM 98.10% 96.06% 98.47% 98.22% 99.44% 96.56% 95.38% 99.75% 99.07% 100.00% 99.72% 99.74% 98.29%

Figure K1 depicts the changes in Priority Programme workload from 2015/16 to 2016/17.

2017 2016

250 000

200 000

150 000

100 000

50 000

0CD4 VL TBMHIV PCR GXP CX

19 390 18 226

199 785

172 637

154 919

134 812

33 49332 541

16 247 15 333

109 534

127 915

Figure K1: Priority Programme performance – Comparison of test volumes


The KEH Haematology Laboratory performed 19 390 CD4 tests during the year for the CCMT Programme, a 6% increase over the previous year. As a result of guideline changes 199 785 viral load and 154 919 HIV DNA PCR tests done, demonstrating a 15.7% and 15.1% increase respectively. In total, 127 915 cervical Pap tests were screened by the Cytology Unit, which equated to a 16.8% increase over the previous year. For both the KEH and IALCH TB laboratories, TB microscopy was performed on 32 541 samples, reflecting a 2.8% decrease. At the IALCH and KEH TB Culture laboratories, 108 945 specimens were cultured for TB during the financial year, reflecting a 38% decrease since the previous financial year. Molecular TB Line probe assays at IALCH TB Laboratory numbered 18 066, demonstrating a 1.7% decrease during this period. A 6% increase in volumes to 16 247 was noted in GeneXpert testing for both pulmonary and extrapulmonary sites at KEH and IALCH TB laboratories. HIV drug resistance tests numbering 587 were performed during 2016/17, demonstrating a 127.5% increase over the previous year.

Notable Achievements including Accreditation

Two laboratories at IALCH, namely Chemical Pathology and Microbiology, attained SANAS accreditation for the first time. Further, the Virology and all KEH laboratories at the Academic Complex were successful in the SANAS surveillance audits during 2016. The three other IALCH laboratories are involved in various stages of preparation for the accreditation process and were severely impacted by discipline-specific skills shortages, failure to fill vacancies, and continued staff attrition. The Cytopathology Unit passed the pre-SANAS audit in February 2017 was subsequently recommended for a full SANAS audit in 2017. Anatomical Pathology (Histopathology) and IALCH Haematology are earmarked for accreditation by the end of 2017/18. All laboratories are now aligned with the standards set out in ISO 15189:2012.

IALCH Chemical Pathology and Virology laboratories participated in an internal audit by the NHLS and KEH Chemical Pathology and Virology underwent an External audit. Both the NHLS laboratories at IALCH and KEH hospitals attained 100% in the National Core Standards audits during the year, carried out by the National Office of Health Standards Compliance.

All laboratories in the business unit underwent Health and Safety audits and Risk Assessments and the average audit score for the business unit was 95%.

Good external quality assurance/assessment (EQA) performance continued. For the 75% Proficiency Testing Scheme (PTS) EQA, the business unit attained an average of 96% and for the 90% PTS EQA, an average score of 93% was achieved.


Preparation for the IALCH Pathology Laboratory Floor Repair Project in 2017 is under way. The DoH has received approval of the budget from Treasury to commence with roof and floor structural repairs and reinforcements for the building in 2017/18. The Coagulation Section in IALCH Haematology underwent structural repairs to accommodate new analysers placed by the Impilo Consortium. Infrastructural challenges still exist at KEH laboratories. Floor repairs were budgeted for and are now pending. The matter of the KEH non-functional lift has been escalated to the DoH and may be addressed in F2017/18, pending budget approval.


The Academic Complex has five academic departments that span nine laboratories at both hospitals. The staff members of the unit are mandated to teach and train, perform research and ensure service delivery requirements are met. During the period, the unit was challenged by attrition and the inability to recruit suitably qualified and experienced candidates in specific job categories. Despite this, there was a net increase of five employees by the end of the period.

The HOD position for Haematology remained vacant despite being advertised several times. The Haematology Laboratory Manager post was filled in May 2016. The QA Co-ordinator and HOD Chemical Pathology posts were filled in November and December 2016, respectively. Currently, the business unit has four HODs and one acting HOD, nine laboratory managers, two laboratory supervisors, 27 pathologists, three medical officers, 110 medical technologists, 69 medical technicians and seven medical scientists among its 390 employees. The professional staff members are involved in continuous professional development programmes.

Table K3: Academic staff

HR Job CategoryChemical Pathology Haematology Microbiology Virology


HOD 1 - 1 1 1

Pathologist 4 4 11 4 4

Medical Officers - 2 - - 1

Registrars 4 5 9 4 7

Med Scientist - - 1 - -

Med Scientist Intern 1 1 - - -

Total: 66 10 12 22 9 13


Table K4: Technical staff

HR Job Category Chem

ical

Pa

thol

ogy

Cyto

logy

Hae

mat

olog

y

Mic

robi

olog

y

Viro

logy

Ana

tom

ical

Pa

thol

ogy

Chem

ical

Pa

thol

ogy

Hae

mat

olog

y

Mic

robi

olog

y

Lab

Supp

ort

Lab Assistants 1 1 - - 4 - - - - 2

Lab Supervisors 1 1 - 1 - 1 - - - -

Med Scientists 1 - 1 1 1 1 - - - -

Med Technicians 10 6 9 20 1 4 4 5 10 -

Med Technologists 14 23 14 14 12 9 7 9 8 -

Total: 196 27 31 24 36 18 15 11 14 18 2

Skills Development and Training

The business unit is HPCSA-accredited for the training of registrars, medical technologists, medical technicians and intern medical scientists, with the exception of Haematology, whose training status for registrars was withdrawn in 2016. The unit is currently training 78 students (29 pathology registrars, two intern medical scientists, 33 student medical technologists and four student technicians. Six postgraduates are registered as PhD students and three academic staff members already hold PhD degrees.

The Haematology Department’s accreditation for registrar training status was withdrawn in 2016 because of the lack of a permanent HOD and training programme. Five haematology registrars who are currently on the training platform are being trained by Wits. Six registrars participated in the Histopathology FCPath College of Medicine of South Africa (CMSA) Part II examinations during the financial year. One registrar wrote and passed Part I Anatomical Pathology; two anatomical pathology registrars were retained as newly qualified pathologists; one supernumerary registrar returned to Malawi after qualifying; and four registrars are currently completing their MMED dissertations in anatomical pathology. In chemical pathology, one registrar participated in and passed Part I CMSA examinations and two registrars passed Part I (a 100% pass rate).

There was a 100% pass rate for medical technicians in cytology and virology and a 78% pass rate for medical technologists in clinical pathology in the March 2016 examinations.

Training was provided to senior management on the Quality Manual v11 Performance Management System, Risk Management, and Enterprise Content Management (ECM) Scanning, amongst others. Laboratory staff attended various training courses in line with the Workplace Skills Plan (WSP) 2016/17. Within the business unit, training was conducted by the Quality Assurance Co-ordinator and other designated employees.


Several meetings and workshops formed part of continual stakeholder engagement. Client relations meetings and training sessions with the Primary Healthcare (PHC) and Community Healthcare (CHC) clinics that drain to KEH were held. WebView access for the clinics and hospitals was enabled for new doctors and clinic sisters to view results. Training was conducted on the new barcoded request forms and ECM project, which was implemented during the year. Currently there are challenges with the ECM scanning licences at KEH.

Numerous DoH-NHLS meetings at IALCH and KEH were held to discuss cost efficiencies, the top 10 expensive tests, rejection rate monitoring, clinical gatekeeping, electronic gatekeeping, specimen taking practices and Laboratory Information System-Hospital Information System challenges, etc. Additional meetings were convened with the NHLS to discuss the Global Green Healthy Hospital Initiative, IALCH Pathology Laboratory Floor Repair Project, the Soarian-Trak and MediTech-Trak challenges, the crisis in clinical haematology and haematopathology, specialised reflex testing, the mortuary services, and various other issues.

An intern orientation workshop was held at King Edward Hospital on 4 January 2017 to orientate incoming medical interns on good laboratory practice and protocols. The medical interns were also given web access to enable the viewing of laboratory results via the internet. On a quarterly basis, the NHLS laboratories were invited to participate in the induction workshops for new employees at King Edward VIII Hospital. KEH Intern Committee meetings with medical interns and supervisors were attended and customer complaints were addressed to ensure optimal access to laboratory results at KEH. The monthly KEH Extended Management and Quality Assurance Committee meetings were attended by the business manager and laboratory managers. The business manager attended several meetings with medical management to foster good client relations, attend to operational efficiency matters, optimise clinical gatekeeping and minimise costs. Peer review audits were also conducted to ensure compliance with NHI standards.


At IALH the Maternal and Child Health Domain, Perioperative and Surgical Domain, and Medical Domain meetings were attended by the business manager and designated laboratory managers/HODs, where relevant. Test statistics were provided to the clinical HODs to assist them with electronic and clinical gatekeeping, rejections, contamination, TAT, pre-ordering, future orders and to enforce compliance with the MCDS.

Meetings between the NHLS and AME Afrika focussed on the optimisation of the newly introduced MediTech Health Information System (HIS) and its interface with TrakCare LAB. The placing of future orders was deactivated on the new HIS to prevent the erroneous reporting of prolonged TATs. Initially there were several challenges during the migration such as missing orders, duplication, unscheduled downtimes, etc. and these have been sequentially resolved over the course of the year.

Meetings between the NHLS and Impilo Consortium focussed on day-to-day operational issues, which involved ensuring compliance with the regulations of the Department of Labour, municipality and the Private Public Partnership (PPP) regarding equipment placement cycle, infrastructural changes, security, waste disposal and health and safety amongst others. To this end, the NHLS also met with relevant subcontractors with respect to various operational/infrastructural changes.

The UKZN School of Laboratory Medicine and Medical Sciences Board meetings were attended by HODs, Acting HODs, the Business Manager and other jointly appointed staff. College of Health Sciences meetings with the NHLS academic staff were held and chaired by the Deputy Vice-Chancellor and the Dean and Head of School of the college. Discussions revolved around motivating academics to pursue postgraduate studies, in particular, PhD degrees, key performance areas, the undergraduate curriculum, postgraduate support, the visual learning project and the ROBOT system, etc.

Institutional Academic Pathology Committees (IAPC) meetings were held to address operational and academic matters not resolved at Pathology Management Committee (PMC) level, as per the Umbrella Agreement and to finalise the local Bilateral Agreement between UKZN and NHLS KZN Academic Complex. The Dean/Head of School and the School’s Operational Manager also attended the PMC meeting (on invitation) to ensure that academic challenges are highlighted and resolved and that teaching, training and research platforms are optimised for delivery.

Academic Performance

The academic business unit produced 52 publications during the year, a 15% increase over the previous year. There were also 23 conference presentations during the year.

Departmental Academic Reports tabling teaching, training and research outputs were submitted by each Academic Head to the Academic Affairs, Research and QA (AARQA) Department. These are included in this NHLS Annual Report under the AARQA section.

Conclusion

Overall, the business unit demonstrated excellent performance against set targets with marked improvements noted since the previous year in the areas of academic output, service delivery and financial sustainability, despite continued challenges on the training and service platforms. The business unit demonstrated a surplus compared to past years’ deficits. Lessons learned during the year will add value to operational activities and performance in the year ahead.

uMgungundlovu- uThukela Business Unit

Introduction

The Mgungundlovu-Thukela Business Unit supports two health districts i.e. uMgundundlovu district and uThukela district, via seven laboratories and three TB microscopy centres. The business unit caters for the diagnostic needs of 10 hospitals one provincial tertiary hospital (Greys), two regional hospitals (Edendale and Ladysmith), seven district hospitals, 123 clinics and four prisons, and deals with referrals from another nine peripheral hospitals in the western part of KwaZulu-Natal for anatomical pathology testing and other specialised testing.

Diagnostic Services

Diagnostic services are pivotal to the success of the DoH’s initiatives to improve the general health of the population. These initiatives are dynamic and include complex and specialised clinical interventions, hence the need to respond from a diagnostic laboratory perspective, with 24-hour and call out laboratories, to enable optimum patient care.

Mgungundlovu-Thukela performed 4 389 008 billed tests during the year under review, compared with 4 232 858 in the previous period, an increase of 156 150 tests (3.6%). Sales increased by 1.5 % year-on-year while staffing reduced by 7.7%. The increase in sales was mainly driven by increased numbers in the priority programmes and changes in the guidelines. The rationalisation of certain tests did not affect the diagnostic services.


Continuous training of pre-analytical staff, both internally and externally, ensured a more effective and efficient diagnostic service in the period under review.

Service Delivery

PHC coverage

There was 100% PHC coverage for the 123 facilities via 27 outsourced and two NHLS vehicles. Routes were optimised and reviewed to ensure effectiveness and cost efficiencies. Shift systems were introduced where possible to counter the financial environment and were aligned to peak workflow of specimens into laboratories.

Turnaround times

New automation contributed to viral load TAT being met and to countering increasing demand. The replacement of human resources during the year under review was a major challenge with increasing work volumes.

Table K5: TAT performance

Test Performance Target Comment

GXP 97% 90% within 48 hours Target achieved

TB 96% 90% within 48 hours Target achieved

CD4 90% 90% within 48 hours Target achieved

Viral load 67% 65% within 96 hours Target achieved

Cervical Smears 99% 50% within 13 days Target achieved

FBC 89% 80% within 8 hours Target achieved

U&E 86% 80% within 8 hours Target achieved

LFT 80% 80% within 8 hours Target achieved

Client interaction

Client relationships were strengthened via regular scheduled meetings between the District Manager, Provincial Co-ordinator and implementing partners and the formation of task teams in collaboration with the DoH. Laboratory managers attended scheduled DHC meetings, clinic visits and hospital management meetings. Feedback was obtained and incorporated in continuous improvement plans.

Customer Satisfaction Index

The annual Customer Satisfaction Index was performed and a 3.5% improvement was noted resulting from intervention actions after the previous Index. An increased responsiveness by customers year-on-year was also noted, with an overall response rate of 90%. All laboratories achieved response rates above the 70% target.

Responses 2016 Responses 2017

120%

100%

80%

60%

40%

20%

0%Estcourt Emmaus Ladysmith Greys Edendale Northdale Appelbosch Average

100

50

100

73

85

74

84

98

72

100 9890

67

95

79

90

Figure K2: Customer Satisfaction Index response rates per laboratory


90%

80%

70%

60%

50%

40%

30%

20%

10%

0%Satisfied Dissatisfied N/A No Response

85

13

1 1

Figure K3: Overall customer satisfaction rate

Satisfaction Rate 2016 Satisfaction Rate 2017

100

90

80

70

60

50

40

30

20

10

0EstcourtEmmaus LadysmithGreysEdendale NorthdaleAppelbosch Average

66

57

8985

66

85

92 92 93 95

71

85

94 95

8285

Figure K4: Year-on-year satisfaction by laboratory


• Edendale and Greys achieved pre-SANAS recommendations

• Northdale Laboratory maintained SANAS accreditation

• Edendale Laboratory achieved 94% in the African Society for Laboratory Medicine (ASLM) external audits – second highest in South Africa

• An intern orientation programme for new doctors was established within the GEN complex (Greys, Edendale and Northdale Laboratories)

• The business unit was complemented in the year under review by five different clients

• Three CEO awards were received for excellent performance.


Figure K5: CEO Award for Excellent Performance

Laboratory Upgrades

Northdale and Edendale laboratories were upgraded in line with the NHLS Strategic Plan.

Technical Skills

Training programmes were developed to improve technical skills as a continuous improvement project. This was supported by in-house training and competency workshops. Outreach support and training by a business unit pathologist had a further positive impact.

Accreditation

As per the accreditation plan, Northdale Laboratory maintained SANAS accreditation status during 2016/17. Edendale Laboratory underwent a SLIPTA external audit, achieving 94% in February. An internal pre-SANAS audit was undertaken in November, and the laboratory was recommended for a full external SANAS audit. Greys Laboratory also had a successful pre-SANAS audit resulting in recommendation for an external SANAS audit. Ladysmith Laboratory is on the SLIPTA Programme as part of the preparation for a pre-SANAS audit. The lack of human resources appointments affected the pace of progression for accreditation during the 4th Quarter of the year. Project plans have been drawn up and implemented to ensure that the target of achieving SANAS accreditation for Greys and Edendale is realised. The business unit averaged 92% during the safety audits performed in the reporting period.

Training

Ongoing training in all facets of laboratory medicine was a focus area in the year under review. Training programmes were implemented for internal and external customers and were well attended. The impact of the training is now visible in most laboratories. The primary training and competency drive focused on pre- analytic activities to ensure that an effective and efficient service was offered. Northdale Laboratory is a certified HPCSA training laboratory.

Information Technology

Challenges were experienced with connectivity and downtimes, mainly in two laboratories (Appelsbosch and Emmaus). This created major service delivery interruptions and affected TAT. Duel broadband connectivity was installed at Edendale and Greys laboratories to mitigate the risk of LIS downtime. New computers were received which assisted with improved work efficiencies, however delays in the replacement/upgrading of all computers is of concern. Business was also affected by poor response times from the Information Technology (IT) Department and this lack of effective and timeous support from IT is a serious concern, both regionally and nationally.


Ethekwini Business Unit

Introduction

The re-alignment of business units within the KZN Region to the KZN DoH’s District Health boundaries, makes it impossible to do year-on-year comparisons between the 2016/17 and 2015/16 performance. During 2015/16, eThekwini Health District was split into eThekwini North and eThekwini South, which included parts of iLembe, uGu and uThungulu health districts. Currently the eThekwini Business Unit shares the same boundaries as eThekwini Health District. This alignment with the health district makes it easy to report statistics and information for eThekwini District, which is the largest district by population.

The throughput for the business unit is more than 7 million tests per year, making it making it the largest in the region by test volumes and laboratory coverage. It has 10 laboratories i.e. four regional, seven district, one Public Health Laboratory and three microscopy sites. Therefore, it has the highest number of regional hospitals and by implication has specialised testing in support of regional hospital services level of care.


The unit continues to provide efficient services to the majority of the population of over 3 million in the eThekwini Health District. In total, 7 407 million billed tests were recorded with a revenue of R452 million.

The Public Health Laboratory (PHL), based at Prince Street Durban, plays a pivotal role in the testing of imported meat from other countries to South Africa. It performs testing on water for human consumption and does food poisoning testing. The PHL is therefore a strategic asset from a public health perspective for the KZN Province and the country as a whole.

Service Delivery

Turnaround Times (TATs)

The business unit is proud to report that target TATs for National Priority Tests were all achieved, with an average of 99% for CD4, 99% for GeneXpert, 96% for TB smears, and 76% for viral load testing. The TATs for routine tests indicate an average of 97% for Urea & Electrolytes, 81% for Liver Function tests and 87% for Full Blood Count tests.


Constant interaction with clients strengthened relationships between partners, including the DoH; Department of Agriculture, Forestry and Fisheries; SANDF; Correctional Services Centres; municipalities; and Department of Health partners. This interaction happens at all levels, e.g. Laboratory managers attending hospital management meetings, PHC meetings and clinic visits; and the Business Manager attending hospital meetings, district health meetings, and district visits etc.

HPCSA Training

Mahatma Gandhi Laboratory was accredited for the training of medical technologists; however, RK Khan lost its training status. The business unit has two training laboratories, with the capacity to train medical technologists, medical technicians and phlebotomy technicians.

SANAS Accreditation

Three accredited laboratories (Addington, Mahatma Gandhi and Public Health) maintained their accreditation status during the SANAS surveillance process. RK Khan Laboratory also achieved WHO SLIPTA 4-Star accreditation.

Staffing and Technical Skills

The total number of employees at the end of the financial year was 312, with two critical positions vacant, namely Business Manager and Addington Laboratory Supervisor.

In line with the WSP and Personal Development Plans (PDP), employees continue to attend capacity-building courses, including ISO 15189 training, provided by internal and external service providers

Facility Upgrades

Renovations were done at Wentworth Laboratory, Pinetown Laboratory training room, the TB Department at RK Khan, and Receiving Department at King DinuZulu.


Conclusion

The business unit continues to strive for excellence in the region and in the NHLS as a whole and will, in the year ahead, endeavour to ensure that all regional laboratories are SANAS accredited and that PHL is accredited to the ISO 17025 standard to ensure a high quality service and boost stakeholder confidence. The business unit’s next step is a focus on improving efficiency and quality of service by leveraging technology such as pre-analytics automation for the regional laboratories and microbiology automation as test case for a public laboratory setting.

Maju-Mzinyathi Business Unit

Introduction

This inland business unit consists of six laboratories and one microscopy centre. The unit supports two districts, namely Amajuba and uMzinyathi. There is an NHLS laboratory at each general hospital within the districts. NHLS laboratories also support three community health centres in Dannhauser, Pomeroy and St Chads. There are two regional laboratories and four district laboratories. The regional laboratories provide a 24-hour service, while district laboratories provide call-out services to ensure uninterrupted client service. The business unit serves a predominantly rural population.

Diagnostic Services

The business unit continues to provide diagnostic and monitoring services to clients, and performed 1 782 381 tests during the financial year, an increase of 2.9% year-on-year. The TB workload increased by 28.5% due to the introduction of the 90-90-90 DoH Strategy, an increase from 19 368 to 24 880 tests. GeneXpert tests decreased in number by 12.4% from 73 021 to 64 979, also associated with the revised ART guidelines. In total 81 997 CD4 tests were done showing a decrease of 4.2% year-on-year. The analysis of viral load samples at Madadeni Laboratory increased by 96% from 100 646 to 197 223. This is attributable to the fact that during the previous reporting period, Madadeni Laboratory underwent renovations. The laboratory was automated with a Vitek system to identify and ascertain the susceptibility of microorganisms, which improved turnaround time and quality of service by reducing manual testing. The acquisition of an automated blood culture analyser during the reporting period also improved the quality of microbiology testing at Madadeni Laboratory.

Service Delivery

Continuous process and quality improvements were initiated in 2016/17. A shift system was introduced, aligned with the flow of samples from the clinics to laboratories, and the collection of samples from 24-hour clinics was introduced to improve turnaround times. Strengthening the tracking of specimens also improved turnaround times.

The challenge of accommodating staff in rural areas remains. A solution lies in accommodating staff within hospital premises and this will be pursued with hospital management. The current reporting period was characterised by periods of downtime on TrakCare, thus negatively affecting TAT. Rationalising of CD4 at Madadeni and Church of Scotland Hospital laboratories improved TAT and reduced the need for staff recruitment within the business unit. TAT targets were met for the following tests: TB microscopy at 98%, GeneXpert at 98%, CD4 at 97% and viral load at 85%.

The Majuba Mzinyathi Business Unit is participating in the Proficiency Testing Scheme (PTS) to improve quality in laboratory processes. On the PTS, 75% and 90% levels, the business unit achieved 91% and 91% respectively.


Achievements of note include:

• The successful achievement of all turnaround targets

• Successful Proficiency Testing Scheme results

• The placement of the Aquios CL for CD4 testing at the Church of Scotland Laboratory

• The placement of the blood culture analyser at Madadeni to improve quality of blood culture processing.


The headcount at 31 March 2017 was 89, an increase of 10.1% compared to 80 in March 2016.

The support outreach pathologists from IALCH laboratory contributed positively to the operations of the Microbiology Department at Madadeni Laboratory. This has also resulted in improved communication between the clinicians and staff members.


Training

A number of training initiatives was achieved in this reporting period. In total, 109 courses were conducted and 26 staff members trained. The courses included introduction to QMS, travel booking, TrakCare super user, i-procurement, risk assessment, customer and internal audit. The business unit is training medical technologist and medical technician students at Madadeni. Two medical technician students passed their examinations – a 100% success rate. One Medical Technologist has written his examination and is awaiting his result.

Accreditation

Preparation for accreditation is on track and the activities were given to the staff members for preparation. Two laboratories in the business unit are participating in the SLIPTA programme. Madadeni Laboratory obtained 3 stars, which is a marginal improvement from the 2 stars obtained in the previous cycle and Dundee posted no improvement on the SLIPTA project. Other Laboratories that are not on the SLIPTA project are using FMQ0001 to monitor accreditation progress.


A number of IT challenges were experienced in the period, with laboratories being severely affected. Dundee Laboratory experienced downtime and TrakCare was very slow in the Dundee and Madadeni laboratories. The implementation of Web View, however, has increased accessibility of results for doctors. There was also some positive improvement on the retrieving of results from TrakCare compared to the previous year.


Stakeholder relations are vital to improve the image of NHLS and identify gaps that should be addressed. Laboratory managers attend extended management meeting at the facility level. The Business Manager attended district management meetings and hospital management meetings to interact with hospital management and improve service delivery. Laboratory managers and the Business Manager support campaigns initiated by the DoH and other departments such as Correctional Services. Clinic visits were conducted and gaps identified, following which, action plans were introduced to address the gaps.

Harry Gwala - Ugu Business Unit

Introduction

Harry Gwala-Ugu is a new business unit resulting from the alignment of all business units within the KZN province with the KZN DoH District Health boundaries. It encompasses two health districts, namely Harry Gwala (formerly Sisonke) and uGu District Health. The business unit supports one regional hospital (Port Shepstone) and seven district hospitals. It therefore has eight laboratories and two TB Microscopy sites (one based at a Community Health Centre and one located at a specialised TB hospital. It is mainly deep rural with three laboratories in peri-urban settings.


The total test revenue for the financial year was R84 637 million, which is 15% below the budget of R99 553 million. It is important to highlight that it is impossible to do a year-on-year comparison because of the new configuration of the business unit.

Service Delivery

PHC Coverage

The focus has been on improving transport logistics to the clinics, turnaround times for all tests including clinical pathology, and the quality of the service. The business unit maintained 100% coverage of clinic-to-laboratory specimen collection. To ensure that 100% specimen coverage is maintained, an extension to the existing route was made to cater for a clinic previously covered by the DoH.

Turnaround Times

All the target TATs for tests were achieved, including routine tests like U&E, LFT and FBC which wre not previously monitored. TB Auramine achieved 96.82%, TB GXP (98.66%) and CD4 (93.76%). This has been attained through the introduction of different shift systems in all the laboratories.


Constant interaction with clients has strengthened relationships with partners and the DoH. This interaction happens at all levels i.e. Laboratory managers attend Hospital management meetings, PHC meetings and clinic visits; the Business Manager attends hospital and district health meetings and makes district visits. The Business Manager attends events that are planned by the DoH e.g. World Aids and TB Day. The business unit arranged blood collection training for clients, which has resulted in a decrease in the specimen rejection rate.


Technical Skills, Staffing, Training and Accreditation

Technical Skills

Peripheral blood smear testing skills training was offered to the relevant employees in order to develop skills and improve the quality of tests. A noticeable improvement has been seen in the laboratories.

Staffing

Recruitment and retention of technical staff has been a challenge, especially at St Apollinaris Laboratory, resulting in high overtime hours. The matter of “out of scope” medical technologists will be addressed through skills development and natural attrition in the next financial year.

Training

The business unit has no laboratory with the capacity to train medical technologists and medical technicians, but plans to develop the capacity are at an advanced stage. Training status will be achieved in the next financial year.

Quality Assurance and Accreditation

The business unit achieved 86% in the Quality Compliance Audit and 97% in the Health and Safety Audit. Accreditation was not achieved in identified laboratories but preparations for Port Shepstone and Scottburgh are at an advanced stage.


The Laboratory Information System has improved TAT in the business unit following the upgrade of bandwidth, especially at Rietvlei Laboratory. A backup network has also been installed at Port Shepstone laboratory. The ECM project was completed in the latter part of the financial year and all laboratories are storing forms through scanning. The business unit is awaiting delivery of laptops for laboratory managers, which will assist with service delivery.

Mkhanya-Zulu Business Unit

Introduction

The Mkhanya-Zulu Business Unit is composed of two health districts, namely Mkhanyakude and Zululand, which were re-aligned with the DoH health districts in 2016/17. It is situated in the deep rural part of northern KwaZulu-Natal. The alignment enabled the business unit to support and service five district hospitals in uMkhanyakude and six district hospital situated in the Zululand district.

Table K6: Laboratories per district

Zululand District UMkhanyakude District

Laboratories Laboratories

Vryheid Hlabisa

Itshelejuba Bethesda

Dumbe Mosvold

Ceza Manguzi

Nkonjeni Mseleni

Benedictine


The total test revenue for the business unit was R111 422 million which is 9% below budget and a decrease of R11 990 million when compared to the R123 412 million of the last financial year. This is due to improved gatekeeping by DoH facilities.

CD4 volumes decreased from 182 537 to 163 629 due to adherence to a revised ARV guideline that promoted the viral load monitoring test instead of the CD4 count. TB Auramines decreased from 57 923 to 44 335 due to the use of GXP tests for TB diagnosis in all the laboratories. Again, it is not easy to make comparisons with the previous reporting period due to the new business unit configuration.

New Developments

The acquisition of 57 new computers made a noticeable difference in IT performance. Requisitions were submitted for 10 laptops for the laboratory managers and delivery is awaited. This will benefit the laboratories during LIS down times and will enable laboratory managers to remotely authorise results using 3G, even when they are away from the laboratories.



The focus has been on improving transport logistics to the clinics, turnaround times for all tests and the quality of service. The business unit has maintained 100% clinic-to-laboratory specimen collection coverage.

Turnaround Times

The business unit achieved the target TATs for Auramines: 97%, TB GXP: 98% and CD4 96%. These were achieved through the introduction of different shift systems in all the laboratories. TAT targets for U&E, LFT and FBC were not met due to network downtimes and challenges with result verification. Measures have been put in place to mitigate this and are yielding positive results, as the TAT targets for Quarter 3 and Quarter 4 were achieved. The improvement of NHLS IT performance is very critical, failing which, all other efforts that were put in place may fail.


Quality Assurance and Accreditation: The business unit achieved 91.4% compared to 85% in the last financial year in the Quality Compliance Audit and 96% compared to 94% in the last financial year in the Health and Safety Audits. No laboratory achieved accreditation with Hlabisa and Vryheid earmarked for accreditation in the 2017/18 financial year.


The infrastructure upgrade for laboratories affected by drought, to install galvanised water tanks, is still outstanding due to slow response from the DoH in providing authorisation for the NHLS to erect the tanks. The planned upgrades in Bethesda and Ceza could not be executed due insufficient funds. The project to acquire two new park homes for Mseleni and Nkonjeni could also not be completed in total due to insufficient funds for Mseleni. Nkonjeni is awaiting delivery of the park home.


Technical skills

Peripheral blood smear and supplier training for instruments in use was offered to the relevant employees in order to develop employee skills and improve the quality of tests. A noticeable improvement has been seen in the laboratories.

Other training, related to health and safety, was offered to ensure compliance, and quality management system training was offered to the relevant staff to improve quality in the laboratory.

Staffing

Recruitment of technical staff improved, especially at Hlabisa Laboratory, which had trouble in recruitment and retention of suitably qualified technical staff. All laboratories within the business unit are now well staffed in terms of technical staff members.

Training

The Business unit has two training laboratories, with a capacity to train medical technicians and phlebotomy technician students. Three medical technicians, recruited in the previous financial year, passed their medical technician examinations.


Constant interaction with clients has strengthened relationships with partners, namely the DoH, SANDF and the Correctional Centres. This interaction happens at all levels i.e. Laboratory managers attend hospital management meetings, PHC meetings and clinic visits; the Business Manager attends hospital, district health meetings and district visits. In addition, the Business Manager attends events that are planned by the DoH e.g. World Aids and TB day. The business unit arranged blood collection training for clients in the review period, which resulted in a decrease in the specimen rejection rate.

Lembe-Thungulu Business Unit

Introduction

The KwaZulu-Natal Region realigned itself with the DoH district health facilities in order to ensure effective and efficient service delivery in the region. This realignment led to a name change for some business units. Lembe-Thungulu Business Unit is one of them. The business unit has one provincial tertiary, two regional and nine district laboratories and one microscopy site. National Priority Programmes are supported at all levels of care in each district, either on site, or off site with the assurance of the same TAT that is within target.


SANAS accreditation has been the focus in this financial year. Ngwelezane (a provincial laboratory) and Stanger (a regional laboratory) went through the pre-SANAS programme as well as the SLIPTA/SLMTA programme. Ngwelezane Laboratory achieved 4 Stars and Stanger achieved 3 Stars.

Business Unit Laboratories

Table K7: Laboratories and level of care

Laboratory Name Level of care

Ngwelezane Provincial Tertiary

Stanger Regional

Empangeni Regional

Montebello District

UMphumulo District

Untunjambili District

Catherine Booth District

Eshowe District

St Mary’s District

Mbongolwane District

Nkandla District

Sundumbili microscopy site CHC


All laboratories provide testing for routine clinical pathology tests. There are two CD4 testing sites, one HIV VL testing site that provides an overnight service for all hospitals in ILembe and UThungulu District and nine TB sites, which do TB microscopy and TB GXP testing.

The total number of routine tests and NPP tests performed in the period was 3 149 289 of which 91% of the test results were made available to clients within the expected TAT for each category.

Two new viral load Roche analysers were commissioned at Ngwelezane and have assisted the laboratory to maintain its TAT at above 90%, with less staff members than in previous years. The impact of the 90-90-90 strategy was particularly noticed in the last quarter through an increase in all NPP tests.


Accessibility and improved service delivery are achieved through the provision of daily specimen collections and deliveries of results (100% coverage); the use of SMS Printers at PHC level; and the use of WebView at clinic and hospital levels. In order to streamline service delivery, the business unit has maximised routes, by doubling collections in clinics with high workloads. The DoH is reviving the specimen-tracking project that seeks to increase visibility to clinics and improve specimen loss.

In an endeavour to ensure quality, e.g. reduced rejection rate and improved TAT, ILembe-UThungulu has collaborated with MSF and Broad Reach (NGOs) and suppliers. The support given by these NGOs and suppliers seeks to address phlebotomy technical challenges and adherence to SOPs related to specimen collection. The average TAT achieved for NPP tests was 95.6% and 91% for routine tests.

Constant interaction with clients has strengthened the relationship with the KwaZulu-Natal DoH. This interaction happens at all levels. Laboratory Managers attend hospital management meetings and the Business Manager attends hospital and district health meetings. A remarkable impact has been made with the pathology service coverage that is provided to provincial tertiary hospitals, regional hospitals as well as district hospitals.

Turnaround Times

Despite challenges experienced from month to month, ranging from TrakCare network downtime due to cable theft, and instrument downtime, ILembe-UThungulu Business Unit managed to achieve the following turnaround times:


Table K8: Turnaround times

Test TAT Comment

TB microscopy 97% Target was achieved

TB-GXP 97% Target was achieved

CD4 count 96% Target was achieved

HIV VL 92.8% Target was achieved

U&E 93.5% Target was achieved

FBC 93.5 Target was achieved

LFT 86% Target was achieved

The TAT for LFTs was not achieved due to instrument downtime at St Mary’s Laboratory and the closure of Catherine Booth Hospital, which meant that this test had to be referred to another laboratory.


Pre-SANAS audits were conducted at Ngwelezane and Stanger. Three departments at Ngwelezane and two departments at Stanger were recommended, and these are due for full SANAS audits in 2017/18.

SLIPTA audits were conducted at Ngwelezane, which achieved 4 Stars and at Stanger, which achieved 3 Stars. The business unit achieved 94% in the Health and Safety Audit. All laboratories have scored above 80% in proficiency testing with the overall annual performance result for the business unit being 94.5%.

Two students passed their examinations with distinction.


Minor renovations were done at Ngwelezane and this has improved the image of the laboratory. Untunjambili Laboratory moved to new Park Home premises, which are closer to the hospital. These premises were provided by the hospital at no cost to the NHLS; however, the NHLS has equipped the laboratory with furniture, electricity and a network etc.


The Training Department constantly provides training support to enhance the skills and knowledge of the current work force.

The total head count at the end of 2016/17 was 149 comprising technical and non-technical staff with the vacancy rate at nine. Due to financial constraints towards year-end, it was difficult to recruit technical staff to replace those who had exited the organisation.

Training

The focus in 2016/17 was to ensure quality service. As such, a number of technical and non-technical staff members underwent QMS training. Training interventions were conducted at regional level and in-house with the assistance of suppliers, to ensure staff competence. In total, 47 staff members undertook training in various courses.

The business unit has two HPCSA accredited training laboratories for medical technicians. The pass rate for the period was 75%, with two distinctions.


Constant interaction with clients has strengthened the relationship with the KwaZulu-Natal DoH. This interaction happens at all levels. Laboratory managers attend hospital management meetings and the Business Manager attends hospital and district health meetings. A remarkable impact has been made on the pathology service coverage that is provided to provincial tertiary, regional, and district hospitals.

Conclusion

Overall performance for the business unit has been generally acceptable, with remarkable and constant performance in achieving set TAT targets for NPP tests and PTS schemes.


KwaZulu-Natal Cytology Laboratories

Introduction

Cervical cancer is the one of the most common causes of cancer deaths in South African women, yet it is a preventable disease. South Africa has a National Cervical Cancer Control Policy (CCCP), with one of the management objectives outlined in this policy being to reduce the incidence of cervical cancer using secondary prevention methods i.e. by offering Pap smear screening tests, and detecting and treating patients with pre-cancerous abnormalities.

The National Guidelines for a Cervical Screening Programme was launched by the DoH in 2000. This programme allows for all asymptomatic women of 30 years and older to have three free Pap smears in their lifetime (at 10 year intervals between every adequate Pap smear that is negative). The aim of the programme is to achieve an outreach where 70% of women within this target population are screened. In April 2011, the DoH launched its HIV Counselling and Testing (HCT) Programme, which requires that all females who are diagnosed as HIV positive and have a CD4 count less than or equal to 250/uL should have a Pap smear taken. The HCT Programme takes into consideration the need to screen more frequently in patients that are HIV positive, since the rate of progression of an abnormality from a low-grade lesion to cancer is quicker in HIV positive women than in HIV negative women with a low-grade lesion. In September 2016, the HCT Programme was replaced by the Universal Test and Treat (UTT) Strategy, which indicates that in women who test positive for HIV, regardless of the CD4 count, a Pap smear must be taken and the patient must receive antiretroviral treatment (ART).

It must be noted that these national programmes do not include the Pap smears taken from all symptomatic ladies, which is another target group indicated in the CCCP and contributes significantly to the coverage and uptake of this important testing platform.

In the Kwazulu-Natal region, there are two NHLS Cytology laboratories. One is situated at Greys Hospital and services the Midlands region and parts of Inland and Northern Natal, and the other is situated at Inkosi Albert Luthuli Central Hospital (IALCH) and services the North and South coast regions and parts of the Inland and Northern Natal.

Diagnostic Services

The cytopathology discipline is divided into three test categories:

• Gynaecological Testing

• Non-Gynaecological Testing/General Cytology

• Fine Needle Aspiration Cytology (FNA) Testing.

Cytology Workload Volumes

Table K9: Total number of slides tested

Category 2015/16 2016/17 Actual Variance % variance Comment

Gynaecological 195 300 202 237 6 937 4% Increase

Non-Gynaecological 23 714 26 996 3 282 14% Increase

FNA 26 893 25 309 -1 584 -6% Decrease

Total 245 907 254 542 8 635 4% Increase

In 2016/17, the province tested 202 237 gynaecological slides, the highest uptake experienced nationally. The province also experienced an increased uptake for non-gynaecological testing. This equates to a positive variance of 4% for gynaecological testing and a 14% increase for non-gynaecological testing year-on-year, whilst with FNA testing there was a decrease/negative variance noted.

The total number of slides tested in cytology overall showed a positive increase of 4%.

Service Delivery

Table K10: Gynaecological testing turnaround time (TAT)

Period Target Actual % Comment

2015/16 70% within 13 days 55.36% Target not achieved

2016/17 50% within 5 weeks 99.79% Target achieved

KwaZulu-Natal achieved the Balanced Scorecard TAT for cervical (Pap) smear testing, with 99.79% achieved within 5 weeks. Greys Cytology achieved 99.93% and IALCH Cytology 99.65%


Table K11: Pap smear adequacy rate

Period Target Actual % Comment

2015/16 80% 56.1% Not achieved

2016/17 80% 60% Not achieved, but an improvement of approximately 4% achieved

The Pap smear adequacy rate improved from a baseline of 56.1% in 2015/16 to 60% in 2016/17, an improvement of almost 4%. KwaZulu-Natal is above the national average of 57% and currently is the third best performing province when it comes to Pap smear adequacy rate.

Table K12: Pre-Cancerous pick up rate on gynaecological cytology testing

Fiscal Actual % Comment

2015/16 9 545 4.91%

2016/17 11 699 5.81%

Variance 2 154 0.90% Increased pick up rate

Cervical cancer can be prevented with early detection of abnormalities of the cervix and treatment thereof. The treatment is most effective and the prognosis is better when the abnormality is detected and treated at a pre-cancerous stage (High Grade Squamous Intraepithelial Lesion – HGSIL) as opposed to when it is at a cancerous stage. With the significant improvement in the Pap smear adequacy rate, the pre-cancerous pick up rate also increased by 0.9%.

Table K13: Cancer pick up rate on gynaecological cytology testing

Period Actual % Comment

2015/16 464 0.24%

2016/17 572 0.28%

Variance 108 0.04% Increased pick up rate

The cancer pick up rate on gynaecological cytology for 2016/17 was 0.28%, an increase of 0.04% when compared to 2015/16.

Table K14: Cytology unsatisfactory rate

Period Actual % Comment

2015/16 6 246 3.21%

2016/17 5 767 2.87%

Variance 479 0.34% Decreased unsatisfactory rate

The Pap smear unsatisfactory rate for 2016/17 was 2.87%, representing a 0.34% decrease when compared to 2015/16.

Table K15: Cytology rejection rate

Fiscal % Comment

2015/16 1.86%

2016/17 1.40%

Variance 0.46% Decreased rejection rate

The cytology rejection rate for 2016/17 was 1.4%, representing a 0.46% decrease from 2015/16. The major reason for rejection is the mismatch of information between the specimen and the cytology request form. This reason is addressed in the quality training and raised in quality meetings with the DoH.



Month Total Training Sessions Conducted Total Number of Meetings Attended

Apr-16 One training session – King Cetshwayo One DoH provincial meeting

Four training sessions – eThekwini

May-16 Three training sessions – Ugu One DoH meeting - Umzinyathi District

Jun-16 Three training sessions – eThekwini Three DoH provincial meetings

Three training sessions – uMzinyathi

One training session – King Cetshwayo

Jul-16 Three training sessions – Ilembe One DoH provincial meeting

One training session – Zululand

One training session – eThekwini

One training session – uMzinyathi

Aug-16 Three training sessions – uThukela One DoH provincial meeting

Two training sessions – uMgungundlovu

Two training sessions – Zululand

Sep-16 Three training sessions – Zululand One DoH provincial meeting

Two training sessions – uMgungundlovu

One training sessions – Ugu

Oct-16 One training session – eThekwini None

Nov-16 One training session – eThekwini None

One training session – Amajuba

Jan-17 None Five DoH meetings

Feb-17 One training session – uMkhanyakude One DoH provincial meeting

One training session – Zululand

One training session – Ilembe

One training session – uMzinyathi

One training session – DUT

Mar-17 Five training sessions – Zululand

Total 47 DoH training sessions conducted 14 DoH meetings

Ongoing quarterly meetings and ad hoc meetings were held with the DoH (provincial managers and various district managers/co-ordinators). In these meetings, Pap smear screening performance according to the quality indicators stipulated in the CCCP are discussed. Assistance in the form of quality training by the NHLS is ongoing to improve the quality of Pap smear screening in the province. Ad hoc meetings were also held with NGOs like Match and Beyond Zero. The NHLS also collaborated with the NGOs in conducting quality training sessions. It must be highlighted that the improvement in the quality of service delivery can be attributed directly to the strengthening of relationships between the NHLS and the various stakeholders. The improvement has also contributed significantly to a financial saving for the DoH.


• The province received and completely tested the highest Pap smear uptake/coverage nationally i.e. 202 237 Pap smear slides tested

• The Pap smear adequacy rate improved by almost 4% from 56.1% to 60%, 3% above the national Pap smear average, due to focused training by the Regional Cytology Co-ordinator

• The Pap smear rejection rate decreased by 0.46% from 1.86% to 1.4%

• The Pap smear unsatisfactory rate decreased by 0.34% from 3.21% to 2.87%

• The province achieved the BSC TAT for gynaecological testing – 99.79% within 5 weeks

• Both Greys and IALCH Cytology laboratories passed pre-SANAS assessments.


Area Manager Jone Mofokeng

FREE STATE AND NORTH WEST

Introduction

The Free State and North West Region delivers laboratory services at various levels, from primary health clinics to tertiary level care to all districts within the two provinces. The region operates a wide specimen pickup and results delivery service to a large number of primary healthcare clinics in all the districts, thus assisting the Provincial DoH in providing health services to all communities.

The diagnostic pathology services rendered for the region range from basic clinical pathology tests to highly specialised tests. These include chemical pathology, haematology, microbiology, virology, anatomical pathology (histopathology and cytopathology), genetics, and tissue typing.

The region has three business units, namely Free State, Universitas Academic and North West. As at 31 March 2017, the region had 613 staff members. Performance per province is outlined below.

North West Province

The North West Business Unit is responsible for providing laboratory services to all the provincial districts through its 14 laboratories and depots. Tshepong and Rustenburg are provincial tertiary laboratories linked to the Wits and Sefako Makgatho Academic centres respectively. As a result, the two laboratories are the main referral centres in the business unit and the province, providing tests that are more complex. The distribution of the laboratories per district is indicated in Table F1.

Table F1: Laboratories per district

North West Province

Bojanala Dr Kenneth Kaunda Ngaka Modiri Molema Ruth S Mompati

Rustenburg Tshepong Mafikeng/Bophelong Joe Morolong

Moses Kotane Potchefstroom Lehurutshe Taung

Brits Wolmaransstad (depot) Gelukspan Ganyesa (depot)

Swartruggens Thusong (depot)

Total 4 3 4 3


As indicated, Tshepong and Rustenburg are the referral laboratories in the province, with Tshepong being the main centre. In addition to routine testing, Tshepong does LPA, TB Culture, CD4 and viral load testing. However, due to proximity and by association, the laboratories in Bojanala district refer their specialised tests to Sefako Makgatho Academic Unit.

The North West Business Unit undertook 3 759 980 tests in 11 laboratories in 2016/17. This reflects an increase of 4.4% year-on-year. In total, 928 033 tests were referred for specialised testing. Two percent of manual tests were automated within the Business Unit in the reporting period in an effort to improve turnaround time. Volume changes are indicated in Table F2, in line with testing protocol changes.

Table F2: Comparison of NPP volumes between 2015/16 and 2016/17

TestVolumes 2015/16

Volumes 2016/17 % Difference

CD4 170 955 167 133 -2%

HIV viral load 111 226 131 810 19%

TB GeneXpert 165 348 147 463 -11%

Service Delivery

The North West NHLS laboratories provide services to 19 hospitals, 331 clinics, 3 SANDF Area Health Military Units and 15 Correctional Centres. Four of the laboratories, Tshepong, Mafikeng, Potchefstroom and Rustenburg, operate a 24-hour service, and the remainder provide call-out services. All the routes to the facilities for transportation of specimens, delivery of consumables and hardcopy results are 100% covered by NHLS outsourced courier services. TATs were achieved and exceeded as indicated in Table F3.



Table F3: TAT performance for NPP tests 2016/2017

Test Target Actual

CD4 (within 48 hours) 90% 95%

HIV PCR (within 96 hours) 70% 87%

HIV Viral load (within 96 hours) 65% 90%

Cervical smear (within 5 weeks) 50% 76%

GeneXpert (within 48 hours) 90% 98%

TB Microscopy (within 48 hours) 90% 97%

U&E (within 8 hours) 80% 92%

LFT (within 8 hours) 80% 86%

FBC (within 8 hours) 80% 93%


Tshepong Laboratory was recommended for SANAS accreditation and this was confirmed in August 2016.


Gelukspan Laboratory was renovated in a move by the NHLS towards state-of-the-art laboratories. Renovations addressed a number of challenges including health and safety matters to making the facilities appealing, user-friendly and ergonomically safe.


The North West business unit had 205 staff members as at the end of March 2017. A Quality Assurance Co-ordinator was appointed to support all laboratories in maintaining excellent total quality assurance and work towards attaining SANAS accreditation. The staff categories are indicated in Table F4.

Table F4: Staff Complement

Job Category Number of Staff

Medical Technologists 36

Medical Technicians 48

Pathologists 0

Laboratory Managers and Supervisors 18

Laboratory Clerks 63

Other 40

Total 205

Three laboratories in the North West are accredited by the HPCSA for the training of medical technologists and technicians, namely Mafikeng, Tshepong and Rustenburg. Students who qualified were all absorbed into permanent positions in the various North West laboratories and other business units. In January 2017, nine new technologist interns were placed, three in each training laboratory.

Training

Training was conducted in line with the WSP and attendance is indicated in Table F5.

Table F5: WSP Training 2016/17

Training InterventionNumber of Employees Training Intervention

Number of Employees

Bacteriology Workshop (Gauteng South) 4 Inventory Management 19

Customer Service Training 14 ISO 15189 Systems and Internal Audit ISO 15189 1

Diversity in the Workplace 2 Laboratory Systems and Internal Audit Course ISO 15189:2012

1

Effective Communication 1 Minutes-Taking Skills 2

Ethics 8 PLG/CD4 Training 3

Ethics in the Workplace 9 SDF and Skills Planning 10

Excel Level 1 2

Total: 76



The SLA between the NHLS and the North West provincial DoH is in place and current. However, it is expected to be reviewed on an annual basis and updated accordingly, should it be necessary. The prescribed meetings were held during the period between the two parties, as was a scheduled meeting between the CEO of the NHLS and the HOD of the provincial DoH in October 2016 in line with stakeholder engagement.

The NHLS was well represented at health commemoration ceremonies such as World AIDS Day and TB World Day and fully participated in relevant health campaigns, including Cervical Cancer campaigns during the month of September.

The region operates the Mobile Laboratories attached to Rustenburg and Potchefstroom laboratories. These are used largely to reach the peri-mining communities for on the spot testing for TB, and during HIV/AIDS, Sexually Transmitted Diseases and TB (HAST) campaigns.

Free State Province

Free State Province is serviced by two NHLS Business Units, namely Universitas Academic Unit and the Free State Business Unit. Universitas services the academic hospital, including the national district hospital, while the Free State BU services the Pelonomi provincial tertiary hospital and the rest of the hospitals in the province. Both laboratories are associated with the University of Free State Medical School. Pelonomi and Universitas laboratories are the main referral centres, with the latter providing full pathology services, including paternity testing. The distribution of the laboratories per district is indicated in the Table F6.

Table F6: FS Laboratories per district

Free State Province

Fezile Dabi Lejweleputswa Motheo Thabo Mofutsanyane

Sasolburg Welkom (Bongani) Universitas Bethlehem

Kroonstad National District Manapo

Pelonomi

Botshabelo

Total 2 1 4 2


Universitas, as the tertiary laboratory in the province, does almost all the specialised tests except for CD4 testing which is done at Pelonomi Laboratory. However, CD4 testing is also done at the Welkom and Manapo regional laboratories. The total provincial statistics are in line with the 90-90-90 Policy and are as indicated in Table F7.

Table F7: Comparison of NPP volumes between 2015/16 and 2016/2017

Test Volumes 2015/16 Volumes 2016/17 % Difference

Cytology 81 807 86 571 6%

CD4 190 106 182 877 -4%

HIV DNA PCR 36 915 42 795 16%

HIV viral load 268 291 328 380 22%

TB GeneXpert 129 175 109 932 -15%

Service Delivery

The Free State Business Unit has seven laboratories that provide services to 225 primary health care facilities and 10 community health centres. These laboratories also service 15 district hospitals and 18 Correctional Services centres. Universitas Laboratory services and is responsible for the national district hospital as well as 3-Military hospital. Outsourced transport services are responsible for the collection of specimens and the delivery of results and consumables. The routes are covered 100% and collection is undertaken daily on weekdays. TATs were achieved and exceeded as indicated in Table F8.


Table F8: Percentage TAT performance for NPP tests 2016/2017

Test Target Actual

CD4 (within 48 hours) 90% 93%

HIV PCR (within 96 hours) 70% 75%

HIV Viral load (within 96 hours) 65% 77%

Cervical smear (within 5 weeks) 50% 98%

GeneXpert (within 48 hours) 90% 99%

TB Microscopy (within 48 hours) 90% 96%

U&E (within 8 hours) 80% 96%

LFT (within 8 hours) 80% 94%

FBC (within 8 hours) 80% 91%


Kroonstad Laboratory received a 5-Star rating by SLIPTA and is one of only two laboratories in the country with this rating. Welkom and Pelonomi laboratories achieved 4-Star ratings. The three laboratories are ready to apply for SANAS accreditation. Universitas maintained its SANAS accreditation during the annual assessment for all but one department, Genetics. The department applied for voluntary suspension due to severe staff shortages. Both the Universitas and Pelonomi laboratories achieved a 100% pass rate for their intern medical technologists in this reporting period.


The planning and procurement process was initiated to upgrade the TB laboratory at Universitas and completion of the project is expected in the next financial year. Histopathology received a state-of-the-art automated histology block marking system during the last quarter of the financial year.


The Free State Province had 325 staff members as at the end of March 2017. Two Quality Assurance Co-ordinators were appointed to support all laboratories in maintaining excellent total quality assurance and work towards maintaining and attaining SANAS accreditation. The staff complement is indicated in Table F9.

Table F9: Free State Staff Complement

Job Category

Number of Staff

Free State BU Universitas BU

Medical Technologists 50 53

Medical Technicians 17 13

Pathologists and HODs 0 15

Laboratory Managers and Supervisors 11 12

Laboratory Clerks 41 19

Other 29 65

Total 148 177

Universitas, Pelonomi, Welkom and Kroonstad laboratories are accredited by the HPCSA for the training of medical technicians and technologists. Universitas is also accredited for the training of pathologists (registrars) and scientists.

Training

Training was conducted in line with the WSP and attendance is indicated in Table F10.


Table F10: Free State WSP training 2016/17

Training InterventionNumber of Employees Training Intervention

Number of Employees

Au480 Training 1 HIV Drug Resistance Workshop 2

Bacteriology Workshop (Gauteng South) 3 Inventory Management 3

Biosafety and Biosecurity Training 5 ISO 9001 1

Customer Service Training 14 PLG/CD4 Training 1

Diversity in the Workplace 18 SDF Course 1

Effective Communication 13 First Aid 10

Emotional Intelligence 20 Health and Safety Representative 16

Ethics 1 Fire Warden 10

Ethics in the Workplace 18 Finance for Non-Financial Managers 15

Excel Level 1 12

Total: 164


The NHLS was well represented and supported health commemoration ceremonies such as World AIDS Day and TB World Day and fully participated in relevant health campaigns, including Cervical Cancer campaigns during the month of September.

The province operates the Mobile Laboratory attached to Welkom Laboratory. This is used mainly to reach the peri-mining communities for on the spot testing of TB, and during HAST campaigns.

The relationship with the University of the Free State is governed by an Umbrella Agreement and mandatory meetings and engagements such as the IAPC took place during the reporting period.

An SLA between the NHLS and the Free State DoH is in place and current. The recently amended SLA was signed by the NHLS CEO, Ms Joyce Mogale, and the Free State DoH HOD, Dr David Motau in October 2016. The prescribed meetings were held during this period between the two parties. The relationship with the Free State DoH, the BU’s major stakeholder, remained strong and positive, with BLUC meetings assisting in the management of the laboratory-clinician interface.

Figure F1: Signing of the Free State SLA by Dr D Motau and Ms J Mogale


LIMPOPO

Introduction

The NHLS in Limpopo provides laboratory services across all five districts in all general hospitals. The service is provided on a 24-hour/seven days a week basis. This is achieved using multiple shifts, a call-out system, and 24-hour availability of the laboratory. Table L1 represents the Limpopo health districts and laboratories attached to each general hospital in the district. This model of service provision aims to bring the service closer to the patient.

Table L1: NHLS laboratories in each of the five districts

NHLS Business Unit Laboratory Name Health District

Capricorn Business Unit Botlokwa Capricorn

Helen Franz Capricorn

Lebowakgomo Capricorn

Mankweng Capricorn

Polokwane Capricorn

Seshego Capricorn

WF Knobel Capricorn

Zebediela Capricorn

Sekhukhune-Waterberg Business Unit

Dilokong Sekhukhune

Mecklenburg Sekhukhune

Jane Furse Sekhukhune

St Ritas Sekhukhune

Matlala Sekhukhune

Groblersdal Sekhukhune

Philadelphia Sekhukhune

Bela Bela (Warmbaths) Waterberg

Nylstroom Waterberg

Potgietersrus Waterberg

Mokopane Waterberg

George Masebe Waterberg

Witpoort Waterberg

Ellisras Waterberg

Thabazimbi Waterberg

Vhembe – Mopani Business Unit

Tshilidzini Vhembe

Elim Vhembe

Donald Fraser Vhembe

Malamulele Vhembe

Siloam Vhembe

Louis Trichardt Vhembe

Musina Vhembe

Letaba Mopani

Giyani Mopani

Namakgale Mopani

Tzaneen Mopani

Kgapane Mopani

CN Phatudi Mopani

Sekororo Mopani

The NHLS in Limpopo underwent restructuring to ensure that it becomes more responsive to the needs of clients, and maintains a close and positive relationship with all stakeholders. To this end, the number of business units was increased from two to three to reduce the span of control for business managers. Furthermore, the NHLS had to respond to the development of the University of Limpopo’s (UL) new Medical School by ensuring that the Polokwane Laboratory is gearing up to become an Academic Laboratory. The restructuring of the business units through the creation of the third unit, as well as the creation of the HOD and pathologist positions were some of the immediate steps taken to migrate towards academic status in support of the UL Medical School.

Area Manager Jacob Lebudi



The total staff complement increased from 262 in 2015/16 to 268 in 2016/17. Sixty percent of these are technical staff.


In total, the number of tests performed increased by 8 % from 6 756 863 tests in 2015/16 to 7 297 412 tests in 2016/17. These tests were performed in the network of 37 NHLS laboratories in the province, of which 30 are in the 30 district hospitals, five are regional laboratories and two are provincial tertiary laboratories in the same category as level of care hospitals.

Continued support was given to the National Priority Programmes, with test volumes achieved as reflected in Table L2.

Table L2: NPP test volumes

Test Type Volumes 2015/16 Volumes 2016/17 % Difference

CD4 249 785 238 462 -4.7%

HIV viral load 245 810 356 874 45%

Cervical cancer screening 77 151 91 576 18.6%

TB GeneXpert 226 701 228 335 -0.7%

Viral load tests show an increase of 45% when compared to 2015/16. This increase was expected due to a change in the national guidelines for HIV management and for the same reason CD4 count tests declined in the period.

The following new developments were achieved as part of service delivery improvement initiatives:

Mankweng Laboratory

A new analyser was installed in the Chemical Pathology Laboratory, resulting in improved service delivery to deal with the increasing and changing demands of clients. Notably, internal quality control and total turnaround time for the Chemical Pathology tests improved. The laboratory was able to increase the scope of tests offered to match the level of service provided by the hospital as a tertiary level service. The new tests offered through this analyser are:

• Hepatitis studies

• HIV Enzyme-Linked Immunosorbent Assay (ELISA)

• Iron profiles

• Thyroid function tests

• Beta-Human Chorionic Gonadotropin (BhCG)

Furthermore, the laboratory was successful in validating the Rapid Plasma Reagin (RPR) test, which is a labour intensive manual test that often results in the need for employees to work extended hours. Automation of this test will reduce overtime and improve the quality and TAT of the results.

Figure L1: New Cobas 6000 in the Mankweng Laboratory


Polokwane Laboratory

In this Provincial Tertiary Laboratory, service delivery in haematology was improved through the installation of a second haematology analyser. This enabled the provision of uninterrupted service and better TATs to the hospital and 97 clinics that refer to the laboratory. Furthermore, the laboratory introduced Factor VIII and Factor IX testing, which brought much-needed service improvement to haemophilia patients in the clinic though improved TAT of results.

Figure L2: Polokwane Laboratory’s haematology analyser

Figure L3: Analyser testing for haemophilia

Letaba Laboratory

At this regional laboratory, a new chemistry analyser was installed, resulting in the following improvements:

• Improved efficiencies

• Improved TAT

• The ability to introduction new tests e.g. RPR, Prostate Specific Antigen test (PSA), lipids studies and calcium, magnesium and phosphate.

Tshilidzini Laboratory

At Tshilidzini Regional Laboratory, a complete refresh of analysers was done to replace aged equipment that often failed, leading to customer complaints. New equipment included a new chemistry analyser; Cobas Integra and Cobas c411 for immunology; as well as a Beckman Coulter Aquios for CD4 testing. This ensured that TAT and the quality of associated tests improved leading to improved client satisfaction.


Figure L4: Cobas c411 at Tshilidzini

Cryptococcal Antigen Reflex Test

In response to the NPP protocol on the management of HIV patients with CD4 counts of less than 100 cells/µl, Tshilidzini, Polokwane, Letaba, and Mokopane laboratories were prepared and trained to perform the cryptococcal antigen reflex test.


As reported above, all general hospitals in Limpopo Province have an NHLS laboratory on-site that provides a 24-hour laboratory service. The primary healthcare facilities are covered through a daily specimen collection network that moves from clinic to laboratory and from laboratory to laboratory for specimen referral, according to the upward referral model. This courier service extends beyond the Limpopo Province to ensure that specimens referred to laboratories in the national central hospitals are transported on time. The courier service also caters for emergency specimen deliveries to the NICD and other specialist laboratories in the event of outbreaks or the suspicion of highly infectious diseases.

Table L3: Clinics per district where daily specimen collection service is provided

District Number of clinics serviced daily

Vhembe 128

Mopani 107

Capricorn 97

Sekhukhune 102

Waterberg 83

Total clinics 517

Over 17 668 kilometres are travelled per day which equates to just over 4 million kilometres travelled for specimen collection in about 27 routes in the province per year.

Turnaround Times

All Business Units met all TAT targets for all tests except the CD4 count in the Capricorn Business Unit. The unit was affected by constant analyser breakdowns, which were ultimately resolved through persistent interaction with the supplier of the analyser. It should be noted that the total number of tests done in the Capricorn Business Unit is the highest in the province. Over 100 clinics and 21 hospitals refer their CD4 tests to this business unit.


Table L4: TATs per business unit

Business Unit Test Group Test Method Test CountVolume within Target TAT % Within TAT

Limpopo Capricorn

ARVCD4 129 796 100 395 77.35%

VL 356 874 290 721 81.46%

CHEMLFT 395 598 344 590 87.11%

U&E 478 444 440 940 92.16%

CYTO Cervical smear 91 576 91 157 99.54%

HAEM FBC 148 835 137 262 92.22%

TBGeneXpert 77 034 69 428 90.13%

Microscopy 19 374 17 604 90.86%

Limpopo Sekhukhune - Waterberg

ARV CD4 22 698 21 463 94.56%

CHEMLFT 457 643 413 099 90.27%

U&E 523 629 497 868 95.08%

HAEM FBC 168 904 162 927 96.46%

TBGeneXpert 67 514 64 728 95.87%

Microscopy 17 692 16 679 94.27%

Limpopo Vhembe - Mopani

ARV CD4 85 968 76 268 88.72%

CHEMLFT 471 222 406 717 86.31%

U&E 663 923 614 535 92.56%

HAEM FBC 219 550 202 486 92.23%

TBGeneXpert 83 787 80 475 96.05%

Microscopy 15 849 15 424 97.32%

Table L5: Target TATs

Test Method Target %

CD4 85%

VL 65%

LFT 80%

U&E 80%

Cervical smear 50%

FBC 80%

GeneXpert 90%

Microscopy 90%


Accreditation

South African National Accreditation System (SANAS)

Mankweng Provincial Tertiary Laboratory maintained full accreditation status. All tests offered in the laboratory are fully SANAS accredited.

Stepwise Laboratory Quality Improvement Process towards Accreditation (SLIPTA)

Cohort 3 SLIPTA audits were conducted in the laboratories using the WHO checklist 2015 version with the aim of ensuring continuous improvement of the QMS.

Table L6: Results of the SLIPTA follow-up audits

Laboratory Previous Star rating Audit period Score Percentage Star rating

Polokwane 2 in 2015 19-21 July 2016 208 76% 3

Letaba 3 in 2014 26-28 July 2016 237 86% 4

Lebowakgomo 3 in 2014 1-3 November 2016 226 82% 3

Tshilidzini 2 in 2015 15-16 November 2016 219 80% 3

Strengthening Laboratory Management Towards Accreditation (SLMTA)

SLMTA is a mentoring programme aimed at improving laboratory staff QMS skills to prepare effectively for SANAS accreditation. The programme consists of a series of three workshops and laboratory visits by the mentors after every workshop. The programme runs for


a period of 18 months. The following laboratories are enrolled in the SLMTA Programme which began in October 2016: Polokwane with four participants and Letaba with six participants.

Other Achievements

• The appointment of Dr Lekalakala as Head of the Microbiology Department in Polokwane – this laboratory is the only laboratory performing microbiology tests (such as TB Culture, 1st line TB drug susceptibility tests, LPA etc.) in the province, and is the referral site for all other laboratories

• The appointment of the Provincial Cytology Co-ordinator who applies specialist technical expertise to ensure implementation of policy on the cervical screening programme, and ensures that NHLS and DoH programme-specific milestones and performance matrices are met

• Marked improvement in viral load test TAT through the installation of a high throughput analyser in early 2016 – TAT improved from 32% of tests results within 96 hours to 81% of total test results within 96 hours

• No incidents of occupational disease (Tuberculosis) were reported in the financial year

• Health and safety compliance with NHLS policies and procedures improved, which may be attributed to commitment by the Area Manager, business unit managers and laboratory managers towards compliance with OHS legislations as well as the active support and guidance provided by the regional Occupational Health and Safety Team

• The NHLS Laboratory Manager at Donald Fraser Hospital was awarded a certificate for Innovation for the Public Service for his contribution to the hospital Health and Safety Committee.


Upgrades were undertaken in the following laboratories:

• Tzaneen Laboratory – General maintenance to ensure compliance with Occupational Health and Safety requirements and improve working conditions in the laboratory

• Mecklenburg Laboratory – Expansion of the laboratory workspace to improve workflow and working conditions and revamp of resting and ablution facilities to improve staff morale

• Giyani Laboratory – Upgrade to create a call room to enable staff to respond quicker to after-hour service calls

• Malamulele Laboratory – Upgrade to create a call room to enable staff to respond quicker to after-hour service calls and installation of blinds to ensure optimal working environment in the laboratory

• Kgapane Laboratory – Repair to structural cracks in the building and repainting of the entire laboratory.


Subsequent to the creation and filling of 10 laboratory supervisor posts, a combined induction session was organised. This led to improved teamwork, uniformity and a clear understanding of their roles, not only as technical staff, but also as supervisors in their respective laboratories.

Skills gaps were then identified and the required courses for the supervisors were added to the WSP. Thus far, they have attended the emotional intelligence course, which is essential in their roles in managing interpersonal matters. The ultimate goal is to have fully equipped, competent and motivated staff in the region with the first targeted group being the supervisors/managers.

To ensure that there is proper oversight and segregation of duties in the asset stores, well as to ensure compliance with internal policy prescripts, a position for a procurement officer was created and filled. The asset store in Polokwane now operates within policy guidelines.

A Cytology Co-ordinator was appointed to ensure the implementation of policy on the cervical screening programme and oversee appropriate co-ordination between the NHLS and the DoH in this regard.

Table L7: Technical/core staff – 31 March 2017

Job Title Number

Laboratory Manager 19

Laboratory Supervisor 14

Medical Technologist 38

Medical Technician 89

HOD – Microbiology 1

Pathologist 1

Total 162



In line with the Regional WSP, a number of skills courses were implemented and attended by a total of 247 staff members.

Many of these courses were in response to the skills gap identified during performance management as well as improving quality, service delivery and compliance with legislation.

Table L8: courses were offered and attended

Intervention Course Description

Peripheral Blood Morphology Effective and accurate analysis and interpretation of blood smears

QMS The course covers all aspects of the QMS and provides an overview of the individual elements that constitute a QMS

Parasitology This course provides practical laboratory training in the diagnosis of common stool and urine parasites

Basic Fire Training OSH Act Identification and prevention of fire hazards and the effective use of firefighting equipment

First Aid OSH Act Assessment of an emergency medical situation and providing basic life support and basic first aid in order to stabilise patients prior to transfer to emergency services

Telephone Etiquette Telephone communication skills for internal and external customers

Customer Service Skills to enhance service delivery by understanding customer needs

Emotional Intelligence Self-awareness skills and enhancement of inter- and extra-personal relationships

Foundations of Laboratory Leadership and Management

The course offers basic laboratory management tools

Lean Laboratory Management The course offers skills to achieve maximum and optimal outputs with minimal inputs

Ethics The course offers professional ethics, conduct and case studies

Other skills development interventions, which were geared at improving the technical skills of employees, were held across the province, including:

• Training on the lateral flow assay for testing of cryptococcal antigen in laboratories performing CD4 testing

• Enterprise content management for electronic filing of laboratory request forms, attended by laboratory managers

• Advanced TB GeneXpert, attended by medical technologists and technicians

• Measurement of uncertainty, to comply with ISO 15189, attended by laboratory managers and medical technologists

• Phlebotomy training to improve the quality of specimens collected and reduce the rate of rejection, attended by phlebotomists

• Training on newly installed analysers e.g. Cobas Integra, Cobas 6000 and Cobas c411

• Refresher course on DXc/DXi, CS200i and Advia 120 at the Polokwane Laboratory.

Continuing Professional Development

The Regional Office of the Learning Academy is an HPCSA Accredited Service Provider for CPD. Polokwane Laboratory and the Quality Department applied for an activity number and offered activities that earned participants continuing educational units that allowed them to be compliant with legislation.


A variety of stakeholder engagement initiatives were undertaken with a view to understanding and responding to customer needs, information sharing and relationship strengthening.

Quarterly district SLA Review meetings were held. In attendance were the senior clinical managers of hospitals, finance managers as well as the provincial laboratory co-ordinator. The meetings include:

• A report by the NHLS on services delivered during the period under review

• A report by the department on the perceived quality, efficiency, effectiveness and economy of the laboratory service delivery

• A review of the timeliness of payments made by the department to the NHLS, qualification for any discounts or levying of penalties (as the case may be) in terms of the PFMA where applicable and the details mutually agreed.


The Area Manager attended the National World Aids Day Commemoration that was held in Lephalale as well as the provincial TB Day commemoration, held in Vhembe district.

The NHLS pathologist in the province engaged in a number of stakeholder engagements (Table L9).

Table L9: Stakeholder engagements at local facilities

Hospital Audience/Clients Objective/Topic

Letaba Hospital Doctors and nurses Neonatal Quarterly Review Meeting

George Masebe Hospital Local CPD accredited Doctors and nurses and laboratory personnel

TB diagnosis and management

Mankweng Doctors and nurses Antimicrobial resistance in the unit

Warmbaths Hospital Local CPD accredited Doctors and nurses and laboratory personnel

Approach to management and control of typhoid fever outbreak

Provincial outbreak response team Outbreak response team – all district Epidemic preparedness and response training workshop

Voortrekker Hospital Clinicians Malaria overview

Mankweng Hospital Internal medicine Clinical cases – Morphology

Province Provincial committee Pharmacy and therapeutic committee monthly meetings

Province Clinicians Electronic gate-keeping (EGK) Clinician Consultation Workshop on rational laboratory usage and the proposed rules for electronic gatekeeping

Training of Stakeholders

Mopani District facilities were trained in the proper collection of dried blood spots for HIV PCR Testing.

Training on correct usage of blood collection materials was conducted in collaboration with blood collection materials supplier.

Training on collection of Pap smears and the use of the cytology consumables was done to improve the quality of smears. In addition, reports and statistics on the cervical cancer programme were shared with programme managers on monthly basis. All five districts in the province were trained.

Engagement with the University of Limpopo

• Monthly school management meeting – UL

• Lecturing to Medical students – UL

• Co-ordinating micro component of the module – Essentials of diseases – UL

• MBChB curriculum review for HPCSA submission.

Engagement with Non-Governmental Organisations

A meeting was held with the Anova Health Clinical Advisor on the prevention of mother-to-child transmission (PMTCT) to discuss the causes of rejections of HIV DNA PCR in the Mopani and Vhembe districts. The meeting resolved to re-train healthcare workers on the proper process and techniques of sample collection for Dried Blood Spot (DBS) tests for HIV in babies younger than 18 months.

Right to Care (Cervical Cancer Programme) held a pilot engagement on cervical brushes in an effort to improve collection of transformation zone cells on Pap smears.

The NHLS was invited to give induction and orientation on the collection material and filling in of forms to healthcare workers associated with the Phelophepa Train (Transnet), in Polokwane.

Conclusion

The NHLS in Limpopo maintained good performance throughout the reporting period. The turnaround times for most measured tests and NPP tests were achieved. Exceptions were noted and strategies implemented to address shortcomings. Engagement with, and training of stakeholders at different levels and forums was achieved to improve customer relations and service delivery. Employees attended skills courses to maintain high standards of performance in the execution of their duties and improve the quality of results.


MPUMALANGA

Introduction

The NHLS in Mpumalanga provides a laboratory service to all general and specialised hospitals in all three districts of the province. The laboratory service is provided on a 24-hour/seven-day a week basis. This is achieved through a combination of different shifts and a call-out system with 24-hour continuous availability of the laboratory. The service is provided through 21 NHLS laboratories spread throughout the province. This model of service provision aims to bring the service, as far as possible, closer to the patient.

Plans are under way to establish depots in all hospitals without an NHLS laboratory on site. This will ensure accountability in the handling of laboratory test requests and the results associated with the requests.

The NHLS strategy to enable accessibility of services to its clients led to the splitting of the province into two business units. The Gert Sibande-Nkangala Business Unit offers laboratory services to about 10 general hospitals, including two sites that are currently operating as depots, 161 primary/community healthcare facilities and three Correctional Services sites within the Gert Sibande and Nkangala Health Districts.

The Ehlanzeni Business Unit offers a service through nine NHLS laboratories spread throughout five sub-districts, namely Mbombela, Nkomazi, Umjindi, Bushbuckridge and Thaba Chweu. The nine laboratories are made up of one provincial tertiary laboratory, two regional laboratories and six district laboratories. All hospitals in the Ehlanzeni Business Unit have laboratories, with the exception of two district hospitals, Matibidi and Sabie. Two laboratories, Rob Ferreira and Themba, render a 24-hour service; one laboratory, Lydenburg, operates an 8-hour service; and the remaining six laboratories operate an 8-hour service together with a call-out service.

There are plans for Matibidi Hospital to have a depot in 2017/18 and provide a blood gas analyser for Sabie Hospital.

Table M1: NHLS laboratories in the province per each of the three health districts

NHLS Business Unit Laboratory Name Health District

Ehlanzeni Rob Ferreira Ehlanzeni

Themba Ehlanzeni

Mapulaneng Ehlanzeni

Matikwana Ehlanzeni

Tintswalo Ehlanzeni

Shongwe Ehlanzeni

Tonga Ehlanzeni

Lydenburg Ehlanzeni

Gert Sibande- Nkangala Witbank Nkangala

Delmas Nkangala

Middleburg Nkangala

Kwa Mhlanga Nkangala

Mmametlhake Nkangala

Piet Retief Gert Sibande

Evander Gert Sibande

Ermelo Gert Sibande

Standerton Gert Sibande

Embhuleni Gert Sibande

Bethal Gert Sibande

Volksrust Gert Sibande

Area Manager Jacob Lebudi




The total number of tests performed by the NHLS in Mpumalanga increased by approximately 5%, from 5 672 623 tests in 2015/16 to 5 956 254. Continued support was given to the NPP, with test volumes for the programmes as reflected in Table M2.

Table M2: Test volumes per test type

Test Type Volume 2015/16 Volume 2016/17 % Difference

CD4 308 229 298 755 - 3%

HIV viral load 349 044 405 446 16.%

Cervical cancer screening 74 090 68 096 - 8%

TB GeneXpert 131 612 114 333 13%

Viral load testing shows an increase of 16% when compared to 2015/16, while the CD4 count tests declined. These changes were expected due to the change in the national guidelines for HIV management.

As part of a new development, all Rapid Plasma Reagin (RPR) test requests from clinics will be referred to Rob Ferreira Laboratory as of 1 March 2017, since the automated Roche Syphilis test has been validated there. This will reduce the number of manual tests done in the business unit, as well as the manual labour and ultimately the cost of overtime hours. Ermelo Laboratory is validating the automated RPR test with the aim of rationalising the test in the new financial year for Gert Sibande-Nkangala Business Unit.

The cryptococcal antigen (CrAg) test, as a reflex test for CD4 results below 100 cells per cubic millimetre, has been introduced in all laboratories performing CD4 counts on site. These laboratories are, Rob Ferreira, Tintswalo, Shongwe, Ermelo and Witbank. The detection of CrAg will help in the early diagnosis of cryptococcal infections in HIV-infected patients who are on ARV treatment, and prevent deaths from cryptococcal infections.

A new, fully automated haematology analyser was installed at Rob Ferreira Laboratory, to replace the old analyser that was unable to cope with the volumes required. This resulted in better service delivery to the hospital and Primary Health Care facilities referring to this laboratory, especially the antenatal clinic services. The minimum sample volume is 200ul, which caters very well for most of the paediatric samples received from the hospital and the clinics around.

Figure M1: Beckman Coulter LH750 haematology analyser at Rob Ferreira

All medium laboratories providing CD4 count testing services were equipped with new analysers to replace the old and often problematic ones. The following laboratories received new analysers, namely Shongwe, Witbank and Tintswalo.


Figure M2: The new Beckman Coulter Aquios CD4 Analyser at Shongwe Laboratory


The NHLS Mpumalanga ensured accessibility to pathology services by maintaining 100% daily coverage of primary/community healthcare facilities through its specimen collection service. Some small district hospitals without on-site NHLS services are covered through specimen collection twice daily. Matibidi Hospital has been identified as a site for a depot and equipment and human resources have been budgeted for and approved. Volksrust and Bethal are the two sites that are currently operating as depots within the two hospitals. Both sites have been identified for potential migration from depot to fully functional laboratories in order to perform routine testing in the new financial period. The appropriate equipment and human resources have been budgeted for and approved. This will increase the NHLS footprint in the Gert Sibande-Nkangala Business Unit and improve service delivery and turnaround times, which will result to improved patient care.

A sophisticated logistics model is maintained to ensure clinic-to-laboratory specimen collection, laboratory-to-laboratory specimen referral, and out of province specimen referral each weekday. This includes emergency courier services as and when needed to respond to events such as disease outbreaks or highly infectious disease incidents, which require testing at the National Laboratories of the NHLS.

Through this courier network, NHLS Mpumalanga courier service travels over 2.5 million kilometres per year.

Table M3: Number of clinics per district where daily specimen collection is provided

District Number of Clinics Serviced Daily

Ehlanzeni 121

Gert Sibande 76

Nkangala 88

Total Clinics 285

Turnaround TimesTable M4: Test turnaround times for the tests done in each business unit

Business Unit Test Group Test Method Target Test CountVolume within Target TAT % Within TAT

EhlanzeniARV

CD4 85% 158 765 147 158 92.6%

VL 65% 405 446 388 830 95.9%

ChemLFT 80% 496 652 397 568 80.0%

U&E 80% 519 434 454 423 87.4%

Haem FBC 80% 172 155 150 490 87.4%

TBGeneXpert 90% 50 433 49 304 97.7%

Microscopy 90% 26 656 26 054 97.7%

Gert Sibande- Nkangala ARV CD4 85% 131 990 123 579 93.6%

ChemLFT 80% 576 148 442 336 76.7%

U&E 80% 554 542 460 768 83.0%

Haem FBC 80% 175 729 149 602 85.1%

TBGeneXpert 90% 63 900 60 892 95.2%

Microscopy 90% 28 037 26 067 92.9%


It is noted from Table M4 that all business units met all TAT targets for all tests except LFT in Gert Sibande- Nkangala Business Unit. The main cause of this was staff shortages, which led to some shifts not being fully catered for in terms of the technologists needed to issue final results. This matter is receiving attention and interventions like off-site review have already been implemented. The recruitment of qualified technologists in this business unit is ongoing.


Accreditation

South African National Accreditation System (SANAS)

Witbank Laboratory in the Gert Sibande-Nkangala Business Unit maintained its SANAS accreditation. Ermelo, also in the Gert Sibande-Nkangala Business Unit, was recognised for SANAS Accreditation in October 2016. This laboratory was in SLIPTA Cohort 1, which aided its SANAS achievement. All the tests performed in the laboratory were accredited, including TB Culture, TB PCR and GeneXpert. This makes Ermelo Laboratory the third regional laboratory in the NHLS to attain full scope SANAS accreditation.

Stepwise Laboratory Quality Improvement Process towards Accreditation (SLIPTA)

Rob Ferreira Laboratory participated in a Cohort 3 SLIPTA audit. This was conducted using the WHO checklist 2015 version, with the aim of ensuring continuous improvement of QMS. This was a follow- up audit.

Table M5: Outcome of the Rob Ferreira Laboratory audit

Previous Star Rating Current Audit Period Score Percentage Star rating

2 in 2015 16–18 August 2016 213 77% 3 in 2016

This improvement in laboratory performance augurs well for future SANAS Accreditation.

Strengthening Laboratory Management towards Accreditation (SLMTA)

SLMTA is a mentoring programme to improve laboratory staff skills on the Quality Management System, thus enabling effective preparation towards SANAS accreditation. The programme consists of a series of three workshops and laboratory visits by the mentors after every workshop. The programme runs for a period of 18 months. Rob Ferreira Laboratory was enrolled in the SLMTA Programme, which began in October 2016 with four participants.

Rob Ferreira Laboratory underwent a pre-SANAS audit from 7–8 March 2017. The results of the audit suggest that the laboratory is almost ready for its SANAS audit.

Other Achievements

• The appointment of the Provincial Cytology Co-ordinator who applies specialist technical expertise to ensure implementation of policy on the cervical screening programme and ensure that the NHLS and DoH programme-specific milestones and performance matrices are met

• Marked improvement in viral load TAT, through the introduction of a high throughput analyser in early 2016 – TAT improved from 32% of test results within 96 hours to 95.5% of total test results within 96 hours

• No incidents of occupational disease (Tuberculosis) were reported in the financial year

• Health and safety compliance with NHLS policies and procedures improved, which may be attributed to commitment by the Area Manager, business unit managers and laboratory managers towards compliance with OHS legislation, as well as the active support and guidance provided by the regional Occupational Health and Safety team.


Most of the Laboratories in Mpumalanga meet the required safety standards, thus not many upgrades were done in the reporting year.

Delmas Laboratory

A prefabricated extension was provided to improve laboratory space and workflow, create a better environment for testing patient samples, and improve working conditions for employees.


Figure M3: Delmas pre-fabricated laboratory

Themba Laboratory

The laboratory was renovated to improve accessibility for clients. Wall cabinets were provided for storage and internal painting was completed.


The total staff complement for the NHLS Mpumalanga Province was 186 as at 31 March 2017. This reflects a 3% drop in numbers when compared to the same period in 2015/16 (192 staff members).

Table M6: Core staff makes up 46% of the staff complement

Job Title Number

Laboratory Manager 17

Laboratory Supervisor 5

Medical Technologist 24

Medical Technician 40

Pathologist 0

Total 86

Three positions are vacant in the Gert Sibande-Nkangala Business Unit, and have proved difficult to fill.

Ehlanzeni Business Unit managed to fill the vacant supervisor post at Lydenburg Laboratory, which had been vacant for a long time. Thus all laboratories have managers to fulfil leadership roles and improve customer, financial, business process, and people and knowledge management interfaces.

An induction session was organised for all laboratory managers and supervisors appointed in the year. This led to improved teamwork, uniformity and a clear understanding of roles, not only as technical staff but as supervisors in their respective laboratories.

Subsequently, skills gaps were identified and the required courses were included in the WSP. Thus far, they have attended the emotional intelligence course, which is essential in their roles in managing interpersonal matters. The ultimate goal is to have fully equipped, competent and motivated staff in the region.


In line with the Regional WSP, a number of skills courses were presented with 145 staff members attending.

Many of these courses were offered in response to the skills gaps identified during performance management evaluations and others were geared towards improving quality, service delivery and compliance with legislation.

Table M7: Courses attended by staff members


Peripheral Blood Morphology Effective and accurate analysis and interpretation of blood smears

QMS The course covers all aspects of QMS and provides an overview of the individual elements that constitute a QMS

Parasitology This course provides practical laboratory training in the diagnosis of common stool and urine parasites

Basic Fire Training OSH Act Identification and prevention of fire hazards and the effective use of firefighting equipment



First Aid OSH Act Assessment of an emergency medical situation and provision of basic Life support and basic first aid in order to stabilise patients prior to transfer to emergency services

Telephone Etiquette Telephone communication skills for internal and external customers

Customer Service Skills to enhance service delivery by understanding customer needs

Emotional Intelligence Self-awareness skills and enhancement of inter- and extra-personal relationships

Foundations of Laboratory Leadership and Management

The course offers basic laboratory management tools

Lean Laboratory Management The course offers skills to achieve maximum and optimal outputs with minimal inputs

Ethics The course offers professional ethics, conduct and case studies

Other skills development interventions, geared to improving the technical skills of employees, were held across the province. These included:

• Training on the lateral flow assay for testing of cryptococcal antigen in laboratories performing CD4 testing

• Enterprise content management for electronic filing of laboratory request forms – attended by laboratory managers

• Training on newly installed analysers e.g. Beckman Coulter Aquios and the Beckman Coulter LH500

• Thistle EQA interpretation

• SMS Printer management training to ensure uninterrupted delivery of priority programmed results.


Stakeholder relations in Mpumalanga are continuously managed through engagements at different levels and through different programmes.

SLA review meetings were held on a quarterly basis, where the following were addressed:

• Services delivered during the period under review

• Perceived quality, efficiency, effectiveness and economy of laboratory service delivery

• Timeliness of payments made by the department to the NHLS

• Cost of utilities arising from municipality services

• Other management and administrative matters as deemed necessary.

In addition, engagements were held with the following stakeholders:

Mpumalanga Department of Health

• Healthcare workers were trained on how to operate and troubleshoot SMS Printers to ensure uninterrupted service delivery and the improvement of TATs for NPP tests

• Training on the collection of Pap smears and the use of the cytology consumables was done to improve the quality of smears, and reports and statistics on the cervical cancer programme are shared with programme managers on monthly basis

• Thusano training for CEOs and clinical managers continues to be rolled out in the Ehlanzeni Business Unit so that the costs in hospitals can be managed

• A provincial EGK consultation workshop for clinicians was held at Themba Hospital to sensitise clinicians to rational laboratory usage

• Participation in provincial and district World TB Day as well as World AIDS day.

Non-Governmental Organisations

Right to Care – on service delivery issues in partnership with the Mpumalanga Department of Health.

Conclusion

During the reporting period, the NHLS in Mpumalanga was able to fulfil its mandate in ensuring that quality service is timeously delivered to its clients. This was achieved through dedicated and competent employees, the acquisition of instrument platforms that are advanced in technology, an efficiently running courier service, and regular communication with the clients in order to address their needs.


Performance Information by Subsidiary

SOUTH AFRICAN VACCINE PRODUCERS (SAVP)

Director – Megan Saffer

The South African Vaccine Producers (SAVP) proudly continues to provide the country with products of national significance. The total number of antivenom units sold during the financial year was 13 795, an increase of 4.5% since the previous year. Scorpion antivenom sales showed a marked increase to 2 215 units, an increase of 80% since the previous year.

The demand for antivenom is cyclical and is dependent on seasonal and environmental conditions. The breakdown of sales is 28% to the Department of Health, 44% to the South African private market and the balance to export.

There has been uncertainty for the Médecins Sans Frontiers (MSF) regarding antivenom availability, due to the cessation of the production of Fav Afrique antivenom by Sanofi. The SAVP has reassured MSF that it can continue to assist and satisfy their requirements.

In addition to supplying antivenom for human envenomation, the SAVP also supplies to the veterinary market. In the financial year, lifesaving antivenom was given to two anti-poaching dogs, one of which was bitten by a Puff Adder and the other by a Boomslang. Both dogs recovered fully following antivenom treatment. These dogs, both Belgian Malinois, undergo extensive training over several years. Each trained dog, once ready for field duty, has an approximate value of R50 000.00.

In addition, the life of a Jack Russel, which was bitten by a Boomslang on two separate occasions, was saved twice in the same month.

Stables SAVP

Bags of horse blood totalling 1 321 x 500 ml, were supplied by the SAVP, of which 40% was for use by the National Health Laboratory Service (NHLS) laboratories, and the balance for use by private laboratories for diagnostic purposes. A total of 189 x 500 ml bags of sheep blood was also supplied, of which 7 % was supplied to the NHLS laboratories and the balance to private laboratories.

Small Animals

The SAVP continues to supply various universities with animals; including the University of the Witwatersrand (Wits), the University of KwaZulu-Natal, Sefako Makgatho Health Sciences University, University of the Free State, University of Johannesburg, University of Cape Town, University of Pretoria, North West University, Nelson Mandela Metropolitan University and Walter Sisulu University.

The SAVP also supplies large quantities of guinea pigs to both the National Control Laboratories in Bloemfontein, for safety testing of drugs being imported into South Africa, as well as to the University of Pretoria’s Retrasol, which provides tuberculosis research in Witbank.

In the 2016/17 financial year, the SAVP continued to export animals twice a month to Namibia.

Animal Ethics Committee

No animal ethics issues were discussed by the NHLS’ Animal Ethics Committee in the reporting period.

Director Megan Saffer



Performance Information by Institute

NATIONAL INSTITUTE FOR COMMUNICABLE DISEASES

In this age of precision medicine, the availability of robust data is pivotal to making informed decisions to inform public health policy. The National Institute for Communicable Diseases (NICD) has served, and continues to serve as a publicly-trusted source of data on communicable diseases, both during outbreak threats and as part of its routine surveillance of priority infectious diseases, which affect South Africans. In 2016/17, the NICD further expanded on its mandate of setting up a robust surveillance system on public-health priority diseases, following on from a mandate by the Department of Health (DoH) on re-engineering the South African Notifiable Medical Conditions notification system. This system, whose transition from an outdated paper-based system to a state-of-art electronic system was piloted during 2016, will be launched in July 2017 across South Africa. This re-engineered system will provide the backbone with which to monitor and timeously respond to infectious disease outbreaks, as well as serve as a barometer in tracking the progress being made in the prevention of morbidity and mortality associated with notifiable illnesses.

The burden and threat of infectious diseases and progress made in reducing the impact of these diseases in South Africa, were continuously highlighted by ongoing laboratory-based and active field surveillance, undertaken by the NICD during 2016/17. Included among these was the support given by the NICD Outbreak Response Unit, augmented by the Centre for Respiratory and Meningitis Diseases, in assisting the Kwazulu-Natal DoH to investigate and control an outbreak of diphtheria. The NICD was also at the forefront in using Whole Genome Sequencing, to show that an increase in numbers of Salmonella enterica serotype Typhi, identified in Gauteng Province in 2016, was related to a contemporaneous outbreak of typhoid fever in Zimbabwe. This emphasises the need for communicable disease surveillance in South Africa to be linked to similar surveillance in neighbouring countries.

The inter-relationship of South Africa with its neighbours is well characterised by the finding that the majority of malaria cases in South Africa are imported from neighbouring countries. However, in 2016/17 South Africa also noted an increase in local transmission and acquisition of malaria, possibly due to abnormally high rainfall patterns in Mpumalanga. This poses a setback in terms of South Africa’s target to eliminate malaria in the near future. The NICD remains engaged with the DoH on surveillance and control of the malaria vector, including testing of new compounds to address the challenge of insecticide resistance in malaria vector mosquitoes, which is critical in terms of disease epidemiology and vector control.

On the antimicrobial resistance (AMR) front, which is increasingly being recognised as a global threat to public health, drug resistance was highlighted at the United Nations General Assembly as a global priority. To address the threat, the NICD established a national surveillance data dashboard to identify and support efforts at combatting morbidity and mortality resulting from AMR bacterial disease. In acknowledgement of its expertise, the NICD became a Collaborating Centre for AMR for the WHO-AFRO region in 2016.

In terms of antibiotic resistance, the Centre for Tuberculosis (CTB) at the NICD released results of the largest ever study on the prevalence of tuberculosis (TB) drug resistance, globally. This study identified the emergence of rifampicin mono-resistant TB, which has occurred primarily among new cases, resulting in an almost doubling of the prevalence of rifampicin resistant TB from 1·8 % (95%CI: 1·3%-2·3%) in 2001/02 to 3·4% (95%CI: 2·5%-4·3%) in the latest survey of 2014. Additionally, high levels of resistance to second line agents among multidrug-resistant-TB (MDR-TB) cases were identified. These findings supported two key policy shifts, implemented by the National TB Programme. The first was the rollout of reflex second-line drug susceptibility testing, using the WHO-endorsed line probe assay for detection of rifampicin-resistant TB cases for early initiation of treatment, and the second was the introduction of a shortened treatment regimen for MDR-TB patients. To better assist the DoH in dealing with this most important public health threat in South Africa, the NICD launched an online TB Surveillance Dashboard that is now accessible at www.nicd.ac.za. This was accompanied by a surveillance report on microbiologically confirmed pulmonary TB (mPTB) for the period 2004 to


Executive Director Prof. Shabir A Madhi


2015, which shows consistent annual declines in mPTB since 2009. The report has also identified geospatial hotspots to sub-district level and highlights considerable heterogeneity in prevalence, requiring a targeted response.

In addition to supporting the DoH in its TB control programme, the NICD’s Centre for HIV and Sexually Transmitted Infections (STIs), is a partner to the DoH 2017–2021 National Strategic Plan for HIV, STIs and TB. The report on the sentinel surveillance of sexually transmitted infection syndrome aetiologies and human papillomavirus (HPV) genotypes among patients attending public health facilities in South Africa (2015–2016), provided important aetiological data for STI management, as well as baseline HPV genotype prevalence data for monitoring the effects of HPV vaccine implementation. These data have been used to inform policy formulation in STI syndromic management guidelines (Standard Treatment Guidelines and Essential Medicines List for both primary and adult hospital levels of care).

For monitoring HIV infections in the paediatric setting, the paediatric HIV viral load and CD4 dashboard and paediatric HIV VL and CD4 results for action reports were launched in November 2016. The DoH and its partners are now able to monitor the HIV programme nationally to improve patient outcomes. The antiretroviral (ARV) treatment programme in South Africa is the largest worldwide, with 3.2 million persons on treatment. Monitoring for drug resistance to inform treatment policy is an important activity for the CTB, which has established a clinic-based surveillance system for HIV drug-resistance among persons initiating antiretroviral therapy (ART) in five provinces that showed 13% resistance to ARTs used in first-line regimens. The drug resistance level amongst participants with prior antiretroviral (ARV) exposure was 38%. Effective and continued monitoring of drug resistance is thus crucial.

The CTB remains involved in two key HIV prevention studies viz., the HVTN 702, the first HIV vaccine efficacy trial in seven years, and the HVTN 703 or antibody-mediated prevention (AMP) study; providing much of the specialised laboratory immunology services required for these studies. Also on the HIV front, the NICD led reflex screening and testing for Cryptococcus jirovecii in immunocompromised HIV-infected people; and is currently leading an evaluation of the effectiveness of this national intervention on patient outcomes. Globally, Cryptococcus infection was estimated to be responsible for 15% of AIDS-related mortality (95% CI 10% to 19%).

During 2016/17, the NICD Outbreak Response Unit (ORU), in close collaboration with the DoH and other stakeholders, constituting a multi-sectoral national outbreak response team, continued to function as a source of technical expertise for outbreak detection, investigation and response activities. This included responding to 1 211 outbreak verification calls, 97% of which were responded to within 24 hours.

The public was kept informed of such outbreaks and other communicable disease threats through 12 editions of the NICD Communicable Diseases Communiqué, which circulates to a wide audience including general practitioners, specialists, infectious disease and travel medicine societies, and national and provincial public health personnel.

Over the course of 2016/17, the ORU finalised the development and implementation of an infrastructural, policy and management framework for the Public Health Emergency Operations Centre, in fulfilment of a memorandum of agreement signed with the DoH in 2015. This will serve as a vital resource in the event of a major communicable disease outbreak occurring in South Africa.

The continual growth of the NICD and its support to the DoH and the South African public at large is very much dependent on training of adequately qualified epidemiologists. The NICD is now the single largest employer of epidemiologists in the country, and continues its training of epidemiologists through its South Africa Field Epidemiology Training Programme (SAFETP), which celebrated its 10th anniversary in 2016. Initially established in collaboration with the DoH and the Centres for Disease Control and Prevention (CDC) of the United States of America, the programme is now fully funded by the NICD. SAFETP has trained more than 80 health professionals since its inception, 88% of whom remain employed in the public service in South Africa. The team continues to work with the DoH in establishing epidemiology as a professional discipline in the Human Resource for Health Strategy, and is defining the epidemiology core competencies required for existing staff at the DoH.

During the review period, the National Cancer Registry was moved to the newly established Centre for Cancer at the NICD as South Africa moves toward the establishment of a National Public Health Institute of South Africa (NAPHISA). This will expand the surveillance platform from communicable to non-communicable diseases, as well as occupational health and injury prevention. The Centre for Cancer now provides the most updated information on the incidence of cancers in South Africa, benchmarked against global reporting standards. This data has been used to develop the South African National Cancer Control Plan, which includes breast and cervical cancer policies.

In conclusion, the NICD continues to entrench itself as a pivotal component in the effort to promote the health and well-being of South Africans. This is done through robust surveillance of current and imminent communicable disease threats to the country. As has been the case in the past, this would not have been achievable without the remarkable dedication of the staff of the NICD and the unwavering support of the DoH.

With the imminent establishment of NAPHISA, which is currently undergoing Cabinet and Parliamentary approval, providing robust communicable disease and non-communicable disease surveillance in South Africa will lay the foundation for the practice of precision medicine and in the process inform health policy for the benefit of all South Africans.


NATIONAL INSTITUTE FOR OCCUPATIONAL HEALTH (NIOH)

The National Institute for Occupational Health (NIOH) celebrated its 60th anniversary during the reporting period. We had the opportunity to reflect on the history of the NIOH, but more importantly, we can look confidently ahead to a future of decent work, reduced absenteeism and more sustainable, more equal and more productive workplaces. In the current challenging global economic and financial climate the world of work faces major challenges and the NIOH itself is not spared these challenges. This changing world of work with more technological innovations provides golden opportunities for sustainable preventive practices in occupational and environmental health and safety (OEHS) as well as the greater preservation of workers’ health. The Institute has profiled ways in which the heavy burden of OEHS diseases presenting to health services, including those of the national and provincial Departments of Health, can be reduced effectively through better compliance and a mind-set change towards prevention.

As a follow-up to the inclusive occupational health and safety (OHS) concept paper of 2015, the NIOH and the broader OEHS community contributed to the all-important business case discussions for the establishment of the National Public Health Institute of South Africa (NAPHISA). The concept paper reviewed international best practice about the nature of occupational health and safety systems (OHSS). Due consideration was given to the role of the NIOH, since, in the poorly resourced area of OEHS, the multi-disciplinary Institute constitutes a core component. An important role is the support for government departments for the development of effective OEHS systems.

The NIOH continued to facilitate contributions from the broader OEHS fraternity for the inclusion of OEHS in the ongoing National Health Insurance (NHI) consultative process, which is expected to last for several financial years to come. In our review of OEHS systems, we identified an important gap specifically regarding gender concerns in the world of work. To find appropriate solutions, the NIOH continued to work on the findings of the participatory gender audit supported by national and international gender experts and the very active NIOH Gender Committee. With support from government departments, trade unions, employer organisations and international agencies, we celebrated the first anniversary of the launch of the NIOH’s Gender@Work Programme on 8 March 2017. Achievements towards greater gender equity during the past year were celebrated with the National Health Laboratory Services (NHLS) and the broader world of work and we are deeply appreciative of their support and encouragement. The observed progress on gender concerns and the collaborative interventions undertaken auger well for greater unity of purpose to help overcome gender inequalities at work.

Components of OEHS services to prevent occupational diseases and injuries are often underdeveloped or at times totally lacking in South African workplaces. Consequently, the need for OEHS services, especially the specialised services of the NIOH, is considerable in most industrial sectors, as well as in the informal economy. The NIOH and its partners in government and in the private sector undertook a very wide range of activities to address OEHS needs in different sectors of our economy. These activities covered OEHS policy advice, teaching and training, technical support to at least 16 government departments, trade unions and employers; research and different aspects of OEHS surveillance; teaching and training; information services as well as the provision of specialised laboratory services. The NIOH further strengthened the understanding of workplace ethics for OEHS professionals and is in the process of developing an application that will facilitate access to information on ethics and work.

We have significantly increased our engagement with informal economy workers and as a World Health Organization (WHO) Collaborating Centre (CC), the NIOH currently leads the WHO initiative on better OHS for vulnerable workers. The engagement with governments, trade unions, employer organisations and the informal economy was strengthened mainly through collective teaching and training programmes and targeted service delivery. A significant development in the reporting period was the initiative by the Department of Health in collaboration with the WHO to develop an HIV and TB policy for health workers. This is a most significant undertaking by the National Department of Health (NDoH) and we will continue to support this process to finalisation and implementation.


Dr Sophia Kisting


The NIOH supports the Sustainable Development Goals (SDGs) adopted by the United Nations in September 2015. The SDGs include decent work, health, gender equity, youth employment, sustainable economies and sustainable environments. All of these are of great importance for healthier, productive, sustainable workplaces and the protection of the health of workers. The SDGs are intended to promote human rights, engender greater equity and peaceful and inclusive societies, create decent and sustainable jobs, and address the enormous environmental challenges of our time, including climate change. According to the WHO, environmental pollution (secondary to industrial and other workplace activities) contributes enormously to the burden of non-communicable diseases in many countries, including our own. This should further encourage all workplace stakeholders to greater compliance with OEHS legislation through effective and efficient preventive interventions at workplaces.

Research

The NIOH aims to continue to generate new knowledge through the rigour of good scientific research on key OEHS issues, especially those facing South Africa and the rest of the African continent. Collectively, the research projects of each division described in this Annual Report are testimony to the many OEHS issues requiring new knowledge, but also to the growing scope of the institute’s research efforts and the strategic and greater engagement of younger researchers. It is notable that the research focus of the NIOH has broadened to include aspects of environmental health, gender concerns and reproductive health, problems related to climate change, as well as important policy concerns. The scientific publications listed in the NIOH Annual Report demonstrate a focus on many of the priority OEHS issues facing our country. Among the topics covered were asbestos in brake dust, in schools and in homes; preventing tuberculosis in individuals with silicosis; tuberculosis prevention in healthcare workers; noise-induced hearing loss and hearing conservation; occupations and lung cancer; water quality in hospitals; health effects in populations living around gold mine tailings; pesticides; and nanoparticles and health.

Specialised and Other Services

The NIOH continues to provide discipline-specific information services to many industrial sectors and government departments. Its laboratory services include asbestos identification and counting; diagnostic lung pathology; analytical chemistry (e.g. for biological monitoring specimens); the identification of components of dusts (respirable crystalline silica in particular); microbial air sampling; allergy diagnostics; nanoparticles and in vitro risk assessments. Discipline-specific services include occupational medicine, occupational hygiene, occupational toxicology, immunology and microbiology, and occupational epidemiology. Information services are a core service of many national institutes of health around the world, due partly to scarcity of sources of information elsewhere, as is the case in South Africa. The extent and diversity of information services offered by the NIOH, many of them with limited availability elsewhere in the country, are obvious from this report. The unique national occupational health library continues to provide support and information well beyond the borders of South Africa.

The Biobank housed within the NIOH has grown significantly in the year under review, and is successfully housing thousands of specimens from different government departments. The HIV and TB Programme of the NIOH continue to make important contributions to both scientific research and service delivery, especially in the mining and health sectors, in close collaboration with the WHO and the International Labour Organization (ILO). The support for health workers has been most welcome as is the roll-out of training in different countries in Southern Africa on the WHO/ILO Health WISE Programme. The Marketing and Communications Section has done particularly well in profiling the history of the Institute and in strengthening engagement with OEHS programmes nationally and internationally. The Finance and General Services Section has made us all proud by maintaining the historical nature of the old building and making it a special home to the NIOH. The strategic and careful upgrading of the building has continued, and it has become a pleasure to work in this nearly hundred-year-old building.

The Safety Health and Environment (SHE) and Information Technology (IT) Programmes made significant strides on the pioneering Occupational Health and Safety Information System (OHASIS). This user-friendly information system supports compliance with OEHS legislation, enables online training and provides information for research analysis. The OHASIS has gone from strength to strength and is increasingly being rolled out to centres beyond the NHLS and NIOH as well as in neighbouring countries. This bodes extremely well for the much needed strengthening of OEHS information systems for research and evidence-informed workplace interventions. We are inspired by the roll-out in Namibia, the Gauteng Health Department and the current initiatives in Mpumalanga and the Western Cape Departments of Health.

Looking to 2017 and beyond, the NIOH will continue to help reduce the decent work deficit in our country, support ongoing efforts to reduce workplace inequality and strengthen the protection of human rights. Given our heavy burden of disease, it is incumbent upon the Institute to help nurture a culture of greater prevention of OEHS diseases and injuries. Health challenges, such as hypertension, diabetes, TB and stress, which are very often exacerbated by poor conditions of work, will also be addressed. Important areas that will require more attention relate to OEHS gender concerns, and OEHS for migrant workers, subcontracted workers, young workers and workers with disabilities. We have constituted a Green Committee and look to greater emphasis on greener workplaces and green jobs. NIOH staff members and the City of Johannesburg made concerted efforts on a voluntary basis throughout the year to provide subcontracted workers in the fields of security, cleaning and gardening services with training in skills ranging from fire fighting and first aid competency, to basic computer training. However, more strategic efforts are needed to reach more workers in precarious work.


The greatly talented NIOH Choir has gone from strength to strength over the last year and has provided the most beautiful renditions of national, regional and international songs at our major public events. We are proud of the contribution of each and every member of the choir and trust that they will continue to grow and include more and more OEHS songs from across the globe in their repertoire.

Retirements

Mr Kevin Renton (Occupational Hygiene Department)

Mr Kevin Renton retired in September 2016. Kevin began his career at the CSIR in 1977 after completing a BSc Honours in Biochemistry at Natal University (now the University of KwaZulu-Natal) and later a part-time Master’s degree at the University of the Witwatersrand (Wits). He moved to the South African Institute for Medical Research (SAIMR) in 1980 working as a medical technician doing fertility research in the endocrine laboratory. In 1986, he joined the NIOH (then known as the NCOH) in the Analytical Section. He moved to the Occupational Hygiene Section and won a scholarship to study occupational hygiene at the University of Michigan. In 2000, he returned with new skills to contribute to the protection of workers’ health. Kevin was selected to be the Southern African Institute of Occupational Hygiene’s Hygienist of the Year in 2015. He presented at 19 health-related conferences, and was first author of seven and a co-author of 12 publications in peer-reviewed national and international journals. Kevin continues to assist the NIOH Occupational Hygiene Section, especially in its work for the Department of Correctional Services (DCS), and he teaches in the Wits School of Public Health in an honorary position.

Mrs Rosina Soko (Pathology Department)

Mrs Rosina Soko joined the NIOH in 1980 and was a conscientious, diligent and hard-working employee in the Pathology Department. Despite having no formal qualification, Rosina performed all the functions of a laboratory technician, delivering more than what was required of her at a high standard and with an admirable work ethic.

Obituary: Dr Danuta Kielkowski

Dr Danuta Kielkowski (PhD), who retired in December 2014 after 30 years of dedicated service at the NIOH, died on 3 July 2016. Danuta provided invaluable expertise, first to the Epidemiology Section at the NIOH and thereafter as Deputy Director of the National Cancer Registry. Danuta’s work on death certification and occupational disease surveillance, as well as her asbestos and reproductive health research, are just some of the highlights of her long and productive career. She made an invaluable contribution to the growth and strengthening of occupational epidemiology in South Africa, in the Africa region and beyond. She published widely on occupational health in peer-reviewed journals and her scientific rigour contributed immensely to new knowledge in public health in South Africa and beyond. She also wrote technical reports which had a direct impact on public health policy. She supervised, nurtured and enthused numerous young epidemiologists, and was widely respected for the collegial and inclusive manner in which she shared her skills. Above all, Danuta exemplified the beautiful spirit of national and international collaboration to address major health concerns through collective research. Rest in peace, Danuta: you will always be fondly remembered and you are dearly missed.

Acknowledgements and Appreciation

We wish to acknowledge the significant contribution of so many to the ongoing success of the OEHS interventions of the NIOH. We wish to acknowledge the significant and strategic support from the NHLS and from our government departments, in particular the departments of Health, Labour, Mineral Resources, Science and Technology, Environmental Affairs, Defence, Agriculture and Correctional Services. Special appreciation goes to the National Institute for Communicable Diseases (NICD) for the strategic leadership role in the NAPHISA process. We wish to acknowledge all the employer organisations and the growing number of trade unions, which continue to challenge us for an on-going positive impact on workplaces and better worker health.

Our appreciation goes to the many professional OEHS organisations including the South African Society of Occupational Medicine (SASOM), South African Society of Occupational Health Nursing Practitioners (SASOHN) and Southern African Institute for Occupational Hygiene (SAIOH), as well as international organisations, including the WHO, ILO, UN Women and UNAIDS, for their collegial support and great collaboration. We are particularly appreciative of the collaborative support from our sister OEHS institutes in Africa and across the globe.

We owe a particular gratitude to current and former staff of the NIOH, both academic and non-academic, for making and maintaining the Institute as an internationally recognised, accessible centre of excellence in OEHS research, teaching and training, and service delivery.

Conclusion

We invite the actors of the world of work and the broader South African public to join us on our journey of building on our collective strength to utilise the potential of all workplaces for better OEHS, for decent jobs and happier workplaces, and for the protection of human rights, greater productivity, and ultimately for sustainable economies.


GovernancePART C


IntroductionCorporate governance is concerned with the structures, systems, processes and practices in place for decision-making, accountability, control and behaviour within an organisation, beginning at the top level of the organisation. Corporate governance sets the tone for behaviour down to the lowest levels.

The NHLS confirms that its structures, systems, processes and practices are reviewed on a regular basis to ensure compliance with legal obligations; use of funds in an economical, efficient and effective manner; and sustained performance of the services offered. Processes and practices are characterised by reporting on economic, environmental and social responsibilities. Such reporting is underpinned by the principles of openness, integrity and accountability, representing an inclusive approach that recognises the importance of all stakeholders with respect to the viability and sustainability of the NHLS.

Portfolio CommitteesThe NHLS is accountable to parliament through Parliamentary Portfolio Committee on Health. The NHLS appeared before the Parliamentary Portfolio Committee on Health on 12 April 2016, presenting the Annual Performance Plan 2017/18 and on 12 October 2016 presenting the Audited Annual Financial Statements and Annual Report for the financial year ended 31 March 2016.

The Parliamentary Portfolio Committee on Health continues to conduct oversight visits to the NHLS facilities to determine efficiencies and service delivery to the South African citizens.

Executive AuthorityThe Minister of Health is the Executive Authority of the NHLS, as defined by the Public Finance Management Act, No 1 of 1999. He is responsible for the appointment of Board members in line with Section 7 of the NHLS Act, No. 37 of 2000.


Adv. Mpho M Mphelo


The Accounting Authority/Board

INTRODUCTION

The NHLS Board of Directors is the Accounting Authority of the NHLS in terms of the NHLS Act and the Public Finance Management Act (PFMA).

The Board is committed to business integrity, transparency and professionalism in all its activities. As part of this commitment, it supports the highest standards of corporate governance and the ongoing development of best practice.

The Board meets on a quarterly basis and is responsible for providing strategic direction and leadership, ensuring good corporate governance and ethics, determining policy, agreeing on performance criteria and delegating the detailed planning and implementation of policy to its Executive Committee (EXCO).

The Board considers submissions and recommendations made by management and makes independent decisions based on their fiduciary responsibilities and the strategic direction of the service.

ROLE OF THE BOARD

Management’s compliance with policy and achievements against objectives is evaluated and monitored. A structured approach is followed for delegation, reporting and accountability, which includes reliance on various Board committees. The chairperson guides and monitors the input and contribution of Board members.

The Board has unlimited access to professional advice on matters concerning the affairs of the NHLS, at the NHLS’ expense.

The Board evaluates its own effectiveness on an annual basis and formulates plans to mitigate any shortcomings identified in the evaluation process.

BOARD CHARTER

The mandate of the NHLS Board is set out in the NHLS Act and has been encapsulated in the NHLS Board Charter. The mandate of the Board as set out in the Board Charter is aligned with the requirements stipulated by the Protocol on Governance in Public Entities. In addition, an approved Code of Corporate Practice and Conduct, including terms of reference, provides guidance to the Board members in discharging their duties and responsibilities.

COMPOSITION OF THE BOARD

In line with the stipulations of the NHLS Act, No. 37 of 2000, the Board comprises 22 members including the Chief Executive Officer, Chairperson and Vice-Chairperson. Twenty-one members (the vast majority) are non-executive members and one member is an executive.

The members of the Board were appointed by the Minister of Health in accordance with Section 7 of the NHLS Act. In terms of Section 9 of the NHLS Act, the Minister has appointed a Chairperson and a Vice-Chairperson.

The Chairperson is a non-executive and independent director (as recommended by good corporate governance practices) and is a standing member of all committees of the Board.


Board Members

The members of the Board during the year and to the date of this report are as follows:

Name Representing Directorship Date Appointed Date RetiredChairmanship/ Position

Prof. Barry Schoub Minister of Health Non-executive Board Member and Chairperson of the Board

1 May 2015 1 January 2017 Board until 1 January 2017

Council on Higher Education

Non-executive Board Member

Re-appointed 20 April 2017

Prof. Eric Buch Council on Higher Education


30 April 2015 (re-appointed)

National Academic Pathology Committee (NAPC)

Minister of Health Non-executive Board Member and Chairperson of the Board

Appointed Chairperson of the Board with effect from 1 January 2017

Board and GSEC

Prof. Gregory Hussey Minister of Health Non-executive Board Member and Vice-Chairperson of the Board

1 September 2015 1 January 2017 Remuneration and Human Resources Committee with effect from 6 July 2016

Dr Sibongile Zungu Minister of Health Vice-Chairperson 20 April 2017

Dr Thokozani Mhlongo Mpumalanga Province


02 January 2015 (re-appointed)

6 July 2016 Remuneration and Human Resources Committee

Mr Ben Durham Department of Science and Technology


01 November 2014

Dr Tim Tucker Public Nominee: Research



Research Committee (sub-committee of NAPC)

Appointed Chairperson of the NAPC with effect from 24 January 2017

Mr Michael Manning Western Cape Province


30 April 2015 (re-appointed)

Information Technology Governance Committee

Mr Andre Venter National Department of Health



Finance Committee

Dr Patrick Moonasar National Department of Health


01 February 2015

Mr Lunga Ntshinga Public Nominee: Finance



Audit and Risk Committee

Mr Thamsanqa Stander Free State Province Non-executive Board Member

01 February 2015 18 November 2016 Governance, Social and Ethics Committee

Mr Stanley Harvey Northern Cape Province


01 February 2015

Dr Balekile E Mzangwa Free State Province Non-executive Board Member

18 November 2016

Dr Zwelibanzi Abie Mavuso SALGA Non-executive Board Member

21 December 2016

Prof. Mary Ross Minister of Health Non-executive Board Member

27 August 2015 Research Committee

24 January 2017

Prof. Willem Sturm Minister of Health Non-executive Board Member

27 August 2015


Name Representing Directorship Date Appointed Date RetiredChairmanship/ Position

Ms Nelisiwe Mkhize Minister of Health Non-executive Board Member

1 September 2015 Remuneration of Human Resources Committee with effect from 24 January 2017

Dr Gerhard Goosen Minister of Health Non-executive Board Member

1 November 2015

Mr Michael Shingange Organised Labour Non-executive Board Member

1 February 2015

Ms Sphiwe Mayinga Public Nominee: Legal


20 April 2017

Prof. Obi Chikwelu Lawrence

Council of Higher Education


20 April 2017

Ms Ntombikayise Mapukata

Eastern Cape Province


01 February 2015

Prof. Haroon Saloojee Minister of Health Non-executive Board Member

27 August 2015

Ms Joyce Mogale CEO – NHLS Executive Member 01 September 2015

Chief Executive Officer – EXCO

Prof. Shabir Madhi Acting CEO – NHLS Executive Member 24 February 2017 Acting CEO – EXCO

Board Member Qualifications and External Directorships

The NHLS Board members have the relevant skills, knowledge and experience to bring judgement to bear on the business of the NHLS. In situations where Board members may lack experience, detailed induction and formal mentoring and support programmes are implemented.

Board members are requested to declare direct and individual business interest that they might have in any matter which is relevant to the NHLS. The Company Secretary keeps a register of members’ declaration of interest and directorship.

The Chairperson, together with the Board, has carefully considered the directorships that members hold in other companies. The relative size and complexity of the companies in question have been taken into account. The Board members are satisfied that they have the ability and capacity to discharge their duties.

The qualifications and external directorships of NHLS Board members are disclosed in the table below:

Name Qualifications and External Directorships

Prof. Barry Schoub Qualifications OMS, MBBCh, MMed (Micro), MD, DSc, FRCPath, FFPath, MAASAf

Directorships Vice-Chairman: Poliomyelitis Research Foundation

Prof. Eric Buch Qualifications MBBCH, MSc (Med), FFCH(cm)(SA), DTM&H,DOH

Directorships None

Prof. Gregory Hussey Qualifications MBChB, MMED, DTM & MSc CTM FFCH

Directorships UCT Lung Institute, CosH Private Academic Hospital, Isisombululo Community, Improvement Programme, Hussey Family Trust, University of Cape Town

Dr Sibongile Zungu Qualifications MBChB, BAdmin, Strategic Transformation Programme, Postgraduate Certificate in Occupational Health, Improving Quality in the Health Sector, Entrepreneurial Management of Health Services, Public Sector Reform, Postgraduate Studies in Applied Population Studies Training and Research, Making Decentralisation Work, Human Resources for Health.

Directorships Inkosi of the Madlebe Traditional Authority



Dr Thokozani Mhlongo Qualifications BCur, BSc, MBChB

Directorships Njomani Projects cc

Mr Andre Venter Qualifications NDip: Government Finance (RVQ13), Cert: Financial Management in Public Sector, Postgrad Dip: Public Health Management

Directorships None

Dr Patrick Moonsar Qualifications PHD (Public Health) Directorships None

Dr Tim Tucker Qualifications MBChB, PHD, Dip FCPath(SA)Viro, Wits Dip (Business Strategy)

Directorships SEAD Consulting, NHLS Research Trust, SA HIV Clinicians’ Society, Tucker Family Trust

Mr Michael Manning Qualifications BCom, BCom Hons, PG Dip (Accounting) SAICA, CA(SA)

Directorships Trustee Isele Trust, Independent Audit Committee Member of Mine Health and Safety Council

Mr Lunga Ntshinga Qualifications B Com, PG Dip (Business Management), Certificate in Debt Counselling, Internal Audit Quality Assessment Course

Directorships Hlumisa Consulting, Agnul Investments

Ms Ntobikayise Mapukata Qualifications MDP, Dip (Labour Law) BTech, Dip (Human Resource Management) ND MED Tech

Directorships Kaobry Trading Enterprise (Pty) Ltd, Agnul Investments

Prof. Mary Ross Qualifications BSc (Hons), MBChB, Dip (Datametrics), Dip Health Admin, DTM & H, DPH, DOH, FCPHM, FOM (UK),FPH (UK), FFTM (RCP&S GLASGOW), FACTM (Australia)

Directorships None

Prof. Willem Sturm Qualifications MD, PhD

Directorships None

Mr Thamsanqa Stander Qualifications ND Med Tech, ELDP

Directorships Kasi 2 Kasi Trading & General Trading; Kasi Consciousness Revolution

Mr Stanley Harvey Qualifications ND Med Tech

Directorships None

Mr Ben Durham Qualifications MSc, BSc (Hons), BSc, currently pursuing PHD in Technology and Innovation Management

Directorships None

Mr Michael Shingange Qualifications Cert Negotiating Skills, Dip Trade Union Movement, Cert Governance

Directorships 1st Deputy President NEHAWU



Ms Nelisiwe Mkhize Qualifications MBA, PG Dip (Business Management), BSc ND Med Tech Directorships None

Prof. Haroon Saloojee Qualifications MBBCH, FCPaed (SA), MSc

Directorships Soul City Institute, Starfish Greathearts

Dr Gehardus Goosen Qualifications MBChB, Dip Obst (SA)

Directorships ALENTI 25 (Not for Profit)

Ms Joyce Mogale Qualifications MBA, PG Dip (Public Health Management), BSc (Hons), ND Med Tech, HND Med Tech

Directorships Klein Karoo Akademie, Ububele Capital, Ruby Stone Boutique Hotel, Marubini Holding, Metso Mining & Construction (SA), Ninator Thyssen Krupp Industrial Solutions (SA), Cynimart Investments, JL Properties, Limpopo Gambling Board, Tirisano Trust, Ububele Trust, Umvuso Trust, Kamatsu Trust, TETMC Trust, Westvaal Trust

Dr Zwelibanzi Abie Mavuso Qualifications Dental Therapy, MBBCH, MBA

Directorships None

Dr Balekile E Mzangwa Qualifications MBChB

Directorships None

Ms Sphiwe Mayinga Qualifications BProc, LLB, LLM, MAP, SLDP, Advanced Banking Law, Corporate Governance, Compliance Management

Directorships Tiyisela Construction, UNISA SBL (Member of Risk and Audit Committee and Chairperson of Remuneration and Human Resources Committee)

Prof. Obi Chikwelu Lawrence Qualifications BSc (Hons), MSc, PHD

Directorships None

Changes in Board Membership

Upon the expiration of a Board member’s term of office, the member may be eligible for re-appointment for a further term of office, providing that no member may be appointed for more than two consecutive terms to serve on the same committee. The table below indicates the changes to Board membership that took place during the year under review:

Name Constituency/Representing Date of Appointment/ *Re-appointment

Date of Resignation/*Retirement

Prof. Barry Schoub Minister of Health 1 May 2015 Reappointed 20 April 2017

1 January 2017

Prof. Gregory Hussey Minister of Health 1 September 2015 1 January 2017

Dr Thokozani Mhlongo Mpumalanga Province 2 January 2015 6 July 2016

Mr Thamsanqa Stander Free State Province 1 February 2015 18 November 2016

The NHLS Board is governed by the NHLS Act, No. 37 of 2000 and the NHLS Rules made in terms of the Act supra. The Board complies with the PFMA. In addition, the NHLS Board subscribes to the terms of King III.

In the period under review, the Board complied with its Terms of Reference (ToR) as detailed in the NHLS Rules. In addition, the Board has provided strategic direction to the organisation as required by King III.

Minutes of meetings were made and entered in the minute book as a true and accurate representation of what transpired at the meetings.


Majority of the members of the Board attended the meetings for the year. Board resolutions were captured in the board resolution file.

Board Meeting Attendance

During 2016/17, the Board convened 15 times (including special meetings). The NHLS Board is required to hold at least four meetings per year. Only members of the Board voted at these meetings and all decisions were arrived at by consensus. In each of the meetings, a quorum for the meeting was met. In each meeting, members were given the opportunity to declare any personal conflict of interest in order to be recused from the deliberation of the matter in which a member was involved.

The table below and accompanying legend illustrates meeting attendance of Board members for the financial year:

Name

Meeting Dates

17 M

ay 2

016

30 Ju

ne 2

016

05 Ju

ly 2

016

27 Ju

ly 2

016

24 A

ugus

t 201

6

25 A

ugus

t 201

6

28 S

epte

mbe

r 201

6

06 O

ctob

er 2

016

02 N

ovem

ber 2

016

29 N

ovem

ber 2

016

30 N

ovem

ber 2

016

24 Ja

nuar

y 20

17

13 F

ebru

ary

2017

22 F

ebru

ary

2017

23 F

ebru

ary

2017

Tota

l Mee

ting

Att

enda

nce

Prof. Barry Schoub A % % % % 10

Prof. Gregory Hussey A A A % % % % 7

Dr Thokozani Mhlongo % % % % % % % % % % % % 3

Mr Andre Venter A 14

Dr Patrick Moonasar A A A A A 10

Mr Lunga Ntshinga A A 13

Dr Tim Tucker A A 13

Prof. Eric Buch * A A A A A 10

Mr Michael Manning A 14

Ms Ntombikayise Mapukata

A 14

Mr Thamsanqa Stander % % % % % % 9

Mr Stanley Harvey 15

Mr Ben Durham A A A A 11

Mr Michael Shingange A A A A A A A 8

Ms Nelisiwe Mkhize A A * 13

Prof. Mary Ross A A * 13

Prof. Willem Sturm A A 13

Prof. Haroon Saloojee A A A A A A A A A A 5

Ms Joyce Mogale A 14

Dr Gerhard Goosen C A A A 10

Dr Balekile Mzangwa C C C C C C C C A A 4

Dr Zwelibanzi Mavuso C C C C C C C C A A 4

Legend:

= Present * = Appointed as Chairperson of the Board 01 January 2017

A = Apology B = Absent

C= Not a member % = Retired/ Resigned

% = Retired/Resigned % = Retired/Resigned

COMMITTEES OF THE BOARD

The Board as the Accounting Authority takes full ownership of the overall decision-making across the NHLS to ensure it retains proper direction and control.

Without abdicating its own responsibilities, the Board has delegated certain powers to the CEO and to management but has reserved certain powers exclusively for the Board, as set out in the Board Charter. To help it meet its responsibilities, the Board has delegated certain functions to the following committees:


• Audit and Risk Committee

• Remuneration and Human Resources Committee

• Information Technology Governance Committee

• Governance, Social and Ethics Committee (ad hoc Committee)

• Finance Committee

• National Academic and Pathology Committee

• Research Committee

• Executive Committee.

The various committees of the Board each have formal terms of reference, embodied in a charter that further defines the mandates, roles and responsibilities of each committee. The charters are reviewed and updated on an annual basis where required.

Audit and Risk Committee

In keeping with Treasury Regulation 27 of the PFMA, the Board has appointed an Audit and Risk Committee to assist in the discharge of its duties by reviewing and reporting on the governance responsibilities of the Board and the NHLS. The terms of reference of the Audit and Risk Committee, its duties and functions, its composition and its modus operandi have been approved by the Board. Refer to page 173 for scheduled meetings and attendance.

Remuneration and Human Resources Committee

In terms of the NHLS Act, the Remuneration and Human Resources Committee (RHRC) serves to assist the Board with the performance of its functions and exercising of its powers. The committee reports on employment equity, employee turnover, skills development and labour relations.

As part of the continued professional development programme, the Board periodically invites corporate governance experts, as recommended by the Institute of Directors from time to time, to present topical matters and latest developments in corporate governance practices.

The RHRC met on seven occasions during the financial year.

Name

Meeting Dates

21 A

pril

2016

9 M

ay 2

016

14 Ju

ne 2

016

05 S

epte

mbe

r 201

6

20 O

ctob

er 2

016

17 N

ovem

ber 2

016

02 M

arch

201

7

Tota

l Mee

ting

Att

enda

nce

Dr Thokozani Mhlongo % % % % 3

Mr Andre Venter A 6

Prof. Eric Buch A A A % 3

Ms Nelisiwe Mkhize * * 7

Mr Michael Shingange A A A A A A A 0

Mr Thamsanqa Stander % 6

Ms Ntombikayise Mapukata 7

Ms Joyce Mogale A 6

Mr Michael Manning**** C C C C C 2

Dr Gerhard Goosen ** C C C ** 4

Mr Lunga Ntshinga**** C C C C C 2

Prof. Gregory Hussey *** C C C *** % 3

Legend:

= Present * = Appointed as Chairperson 24 January 2017

A = Apology ** = Appointed 25 August 2016

B = Absent *** = Appointed 1 July 2016

C = Not a member % = Retired/Resigned **** = Attended by invitation


IT Governance Committee

The IT Governance Committee (ITGC) was established in terms of Section 12 of the NHLS Rules. The committee ensures that IT is a regular item on the Board agenda and that it is addressed in a structured manner. In addition, the committee ensures that the Board has the information it needs to make informed decisions that are essential to achieve the ultimate objectives of IT governance.

These objectives are:

• The alignment of IT and the business

• The delivery of value by IT to the business

• The sourcing and use of IT resources

• The management of IT-related risks

• The tracking, monitoring and measurement of IT performance.

The committee offers expert insight into and timely advice and direction on topics such as:

• The relevance of the latest developments in IT from a business perspective

• The alignment of IT with the business direction

• The formulation and achievement of strategic IT objectives

• The availability of suitable IT resources, skills and infrastructure to meet the strategic objectives

• Optimisation of IT costs

• The role and the value delivery of external IT sourcing

• Risk, return and competitive aspects of IT investments

• Progress on major IT projects

• The contribution of IT to the business (i.e. delivering the promised business value)

• Exposure to IT risks, including compliance risks

• Containment of risks of critical systems.

The ITGC met six times in 2016/17. The Chairperson of the ITGC is appointed by the Board from eligible Board members. The committee comprises a minimum of three non-executive Board members. The Chairperson of the NHLS Board, Chief Financial Officer and the IT Executive have a standing invitation to attend all ITGC meetings.

Name

Meeting Dates

13 M

ay 2

016

20 Ju

ly 2

016

09 S

epte

mbe

r 201

6

24 N

ovem

ber 2

016

14 M

arch

201

7

28 M

arch

201

7

Tota

l Mee

ting

Att

enda

nce

Mr Michael Manning 6

Ms Joyce Mogale A A A A 2

Mr Stanley Harvey 6

Dr Tim Tucker A A A C C 1

Prof. Willem Sturm A A A 3

Dr Patrick Moonsar A A A A 2

Ms Ntombikayise Mapukata C C C C * 2

Legend:

= Present * = Appointed 24 January 2017

A = Apology % = Retired/Resigned

B = Absent C = Not a member


Governance and Social Ethics Committee

This committee was established to assist the Board with the oversight of corporate governance and social and ethical matters, and to ensure that the organisation is and remains a committed, socially responsible corporate citizen. The commitment to sustainable development involves ensuring that the organisation conducts business in a manner that meets existing needs without knowingly compromising the ability of future generations to meet their needs. The committee’s primary role is to supplement, support, advise and provide guidance on the effectiveness or otherwise of management’s efforts in respect of governance, social and ethics and sustainable development-related matters which, inter alia, include:

• Safety

• Health and wellness, including occupational hygiene

• Environmental management

• Climate change

• Ethics management

• Corporate social investment

• Mine community development

• Stakeholder engagement

• The protection of company assets.

The Committee undertakes the following:

• Reviews and approves the policy, strategy and structure to manage governance, social and ethics issues in the organisation

• Oversees the monitoring, assessment and measurement of the NHLS’s activities relating to social and economic development, including its standing in terms of the goals and purposes of:

» The ten principles set out in the United Nations Global Compact Principles

» The OECD recommendations regarding corruption

» The Employment Equity Act, No. 55 of 1998

» The Broad-Based Black Economic Empowerment Act, No.53 of 2003

• Oversees the monitoring, assessment and measurement of the NHLS’s activities relating to good corporate citizenship, including its promotion of equality, prevention of unfair discrimination, addressing of corruption, contribution to development of the communities in which its activities are predominantly conducted or within which its services are predominantly marketed, and record of sponsorship, donations and charitable giving

• Oversees the monitoring, assessment and measurement of the NHLS’s activities relating to the environment, health and public safety, including the impact of its activities and services

• Oversees the monitoring, assessment and measurement of the organisation’s stakeholder relationships, including its advertising, public relations and compliance with consumer protection laws, to ensure that it adheres to its values

• Oversees the monitoring of the NHLS’s labour and employment, including its standing in terms of the International Labour Organization Protocol on Decent Work and Working Conditions, its employment relationships, and its contribution toward the educational development of its employees

• Reviews the adequacy and effectiveness of the organisation’s engagement and interaction with its stakeholders

• Considers substantive national and international regulatory developments, as well as practice in the fields of social and ethics management

• Reviews and approves the policy and strategy pertaining to the organisation’s programme of corporate social investment

• Determines clearly articulated ethical standards (Code of Ethics) and ensures that the NHLS takes measures to achieve adherence to these in all aspects of its business, thus achieving a sustainable, ethical corporate culture

• Monitors that management develops and implements programmes, guidelines and practices congruent with its social and ethics policies

• Reviews the material risks and liabilities relating to the provisions of the Code of Ethics, and ensures that such risks are managed as part of the Risk Management Programme

• Obtains external assurance of the NHLS’s ethics performance on an annual basis, and facilitates the inclusion of an assurance statement related thereto in the Annual Report

• Ensures that management has allocated adequate resources to comply with social and ethics policies, codes of best practice and regulatory requirements.


The Committee met 11 times in the review period.

Name

Meeting Dates

14 A

pril

2016

11 M

ay 2

016

09 Ju

ne 2

016

24 Ju

ne 2

016

22 A

ugus

t 201

6

13 O

ctob

er 2

016

30 Ja

nuar

y 20

17

09 F

ebru

ary

2017

21 F

ebru

ary

2017

01 M

arch

201

7

15 M

arch

201

7

Tota

l Mee

ting

Att

enda

nce

Mr Thamsanqa Stander % % % % % 6Prof. Barry Schoub % % % % % 6Dr Thokozani Mhlongo A % % % % % % % 3Mr Andre Venter 11Dr Tim Tucker A A A A 7Prof. Eric Buch 11Mr Lunga Ntshinga A A 9Mr Michael Manning 11Prof. Gregory Hussey * C C C C *A % % % % % 2Prof. Mary Ross C C C C C C A 4Ms Nelisiwe Mkhize C C C C C C 5

Legend:= Present * = Appointed July 2016 A = Apology % = Retired/ResignedB = Absent C = Not a member

Finance Committee

The Finance Committee (FINCO) assists the Board in fulfilling its oversight responsibilities on an ongoing basis for matters relating to the financial practices and condition of the NHLS, by:

• Reviewing its financial policies and procedures

• Keeping informed of the NHLS’ financial conditions, requirements for funds, and access to liquidity

• Considering and advising the Board concerning the sources and uses of funds.

In terms of good corporate governance practice, FINCO met on seven separate occasions during the financial year.

Name

Meeting Dates

07 A

pril

2016

10 M

ay 2

016

23 Ju

ne 2

016

20 S

epte

mbe

r 201

6

20 O

ctob

er 2

016

01 N

ovem

ber 2

016

17 N

ovem

ber 2

016

01 F

ebru

ary

2016

30 M

arch

201

7

Tota

l Mee

ting

Att

enda

nce

Mr Andre Venter 7Mr Michael Manning 7Mr Michael Shingange A A A A A A A 2Mr Thamisanqa Stander % % 4Dr Thokozani Mhlongo % % % % % % 3Ms Ntombikayise Mapukata C C C C C C C 3Mr Lunga Ntshinga 7Ms Joyce Mogale A 6Dr Gerhard Goosen* C C C 5Prof. Gregory Hussey** C C C C C C C 2

Legend:= Present * = Appointed 24 January 2017 A = Apology % = Retired/ResignedB = Absent C = Not a member ** = Attended by invitation


National Academic and Pathology Committee

The National Academic and Pathology Committee (NAPC) met on five occasions during the financial year.

Name

Meeting Dates

15 Ju

ly 2

016

11 A

ugus

t 201

6

09 N

ovem

ber 2

016

08 F

ebru

ary

2017

09 F

ebru

ary

2017

Tota

l Mee

ting

Att

enda

nce

Prof. Eric Buch 5

Ms Joyce Mogale A 4

Dr Tim Tucker * 5

Ms Ntombikayise Mapukata C C 3

Mr Ben Durham 5

Mr Thami Stander % % 3

Ms Nelisiwe Mkhize A A * 3

Prof. Mary Ross A 4

Prof. Willem Sturm 5

Prof. Gregory Hussey A A A % % 0

Legend:

= Present A = Apology

% = Retired/Resigned B = Absent

C = Not a member

The functions of the committee are to facilitate education by formulating policy with regard to:

• The conducting of basic research in association or partnership with any tertiary educational institution

• Co-operation with persons and institutions undertaking basic research in the Republic, and in other countries, by the exchange of scientific knowledge and the provision of access to the resources and specimens available to the NHLS

• Participation in joint research operations with government departments, universities, universities of technology, colleges, museums, scientific institutions and other persons

• Co-operation with educational authorities and scientific or technical societies or industrial institutions representing employers and employees, respectively, for the promotion of the instruction and training of pathologists, technologists, technicians, scientists, researchers, technical experts and other supporting personnel in universities, universities of technology, and colleges

• Any other matter as may be referred to the committee from time to time by the Board.

As some of its duties, the committee monitors and manages the agreements entered into between the NHLS and each tertiary education institution, including:

• The development of policies and guidelines to determine the numbers of registrars for each discipline and the distribution of the registrar posts between the laboratories associated with each university health science faculty

• The development of policies and guidelines to determine the numbers of technologist training posts for each discipline and the distribution of the posts between the laboratories identified for this purpose

• Proposing guidelines relating to part-time, honorary and guest appointments of employees of the NHLS by tertiary education institutions

• Monitoring the guidelines for consultant appointments of personnel of tertiary education institutions in the NHLS as determined by the agreement between the NHLS and the universities

• Ensuring that the process of continuing professional development programmes provided by tertiary education institutions in the NHLS is used by NHLS employees to comply with Career Programme Development requirements

• Reviewing and managing arrangements for research being undertaken by tertiary education institutions in the laboratories of the NHLS

• Advising EXCO on matters relating to indemnity for employees of the NHLS or a tertiary education institution working between the facilities of both partners


• Advising EXCO on matters relating to discipline of personnel of the NHLS or a tertiary education institution working between the facilities of both partners

• Advising EXCO on financial matters, such as subsidies, bursaries and payment for academic-related services

• Monitoring, and evaluating and managing service level agreements and performance measures

• Advising, monitoring and evaluating the resolution of disputes if they should arise

• Ensuring the integrity of the process of managing partnerships

• Ensuring that professional ethics are adhered to

• Ensuring that the NHLS complies with the requirements of the Health Professionals Council in respect of registration requirements, ethics and conduct.

Research and Innovation Committee

The committee has been established as a vehicle for ensuring that the NHLS Research mandate receives attention at Board level. Members of the Research and Innovation Committee may be called on from time to time to interact with external stakeholders and funding agencies.

The role of the Research and Innovation Committee is to advise the NHLS Board and the NAPC on research policies, strategies, initiatives and innovation that promote the research interests of the organisation and that nurture and enable high quality research.

The objectives of the Research and Innovation Committee are aligned with those stipulated in the South African Health Research Policy of 2001, the National Department of Health 10-Point Plan and the National Health Research Committee (NHRC). This committee meets at least three times a year and in the period under review met three times.

Name

Meeting Dates

10 A

ugus

t 201

6

09 N

ovem

ber 2

016

07 F

ebru

ary

2017

Tota

l Mee

ting

Att

enda

nce

Dr Tim Tucker 3

Prof. Eric Buch A % 1

Ms Joyce Mogale A A 1

Mr Ben Durham 3

Prof. Mary Ross** A * 2

Prof. Willem Sturm A 2

Dr Patrick Moonsar C C A 0

Prof. Haroon Saloojee C C * 1

Legend:

= Present * = Appointed 24 January 2017



** = Appointed Chairperson 24 January 2017

The Executive Management Committee

In terms of the NHLS Act, the Accounting Authority has appointed an Executive Management Committee (EXCO), which consists of:

• The Chief Executive Officer, who acts as Chairperson

• Regional Executive Managers

• Executive Managers from Support Services.

The EXCO is responsible for the management of the NHLS in accordance with the policy of the NHLS and assists with performance of the Accounting Authority’s functions and the exercise of its powers.

In terms of good corporate governance practices, the EXCO met on a monthly basis during the financial year.


REMUNERATION OF BOARD MEMBERS

The NHLS has a Board Manual which outlines the privileges and remuneration of Board members. The National Treasury guidelines and circular on remuneration of “Non-official members, commissions, committees of inquiry and audit committees” are reviewed annually. Employees of National, provincial and local government or institutions, agencies and entities of government serving on boards, commissions or committees of inquiry or audit committees are not entitled to additional remuneration.

The following members received emoluments during the financial year under review:

2016–2017Members’ fees Other fees* Total

R’000 R’000 R’000

B Schoub 200 4 204M Shingange 68 4 72T Stander 208 13 221Tim Tucker 147 3 150E Buch (Chairperson) 179 2 181T Mhlongo 48 64 112N Mapukata 164 31 195G Hussey 126 3 129L Ntshinga 205 49 254M Ross 121 4 125S Harvey 133 2 135N Mkhize - 23 23G Goosen - 1 1A Sturm 153 12 165

1,752 215 1,967

Risk ManagementThe NHLS Board, through its Audit and Risk Committee is responsible for overall oversight of enterprise-wide risk management practices and processes. The responsibility for risk management implementation resides with management at all levels. A dedicated Risk Officer co-ordinates the implementation of the NHLS’ risk management philosophy and strategy as approved by the Board. The approach followed by the NHLS is to ensure that all significant risks are identified and managed. Enterprise-wide risk management is therefore embedded in the daily activities of operations and focuses on identifying, assessing, managing and monitoring all risks.

Because the risks identified are often inter-linked, and cannot be managed in silos, they have been defined in three broad risk categories, namely strategic risks, operational/divisional risks and emerging risks.

During the review period, risk assessment workshops were conducted and the risk register was updated to incorporate new risks and identify mechanisms to ameliorate them.

The Board continues to discharge its responsibility through its Audit and Risk Committee and ensures that Risk Management is a standing item for discussion at each scheduled Board meeting.

Internal AuditThe NHLS has a co-sourced internal audit function that reviews NHLS operations. The Audit and Risk Committee approves the internal audit charter, the three-year rolling strategic audit plan, the one-year operational audit plan and the budget for the internal audit. To ensure that it maintains its independence the function reports administratively to the NHLS CEO and functionally to the Chairperson of the Audit and Risk Committee. Comprehensive reports on all internal audit findings are presented to management regularly and to the Audit and Risk Committee quarterly.


Compliance with Laws and RegulationsThe nature of NHLS’s business requires the assessment and integration of legal, regulatory and public policy requirements into the strategic and operational processes of the organisation, to meet its contractual, moral and corporate citizenship obligations. The observation of laws that govern the organisation and its activities forms the foundation for good corporate governance and demonstrates stewardship and responsibility to all stakeholders.

During the year under review a regulatory compliance universe was compiled, which assists the organisation in tracking compliance with laws and regulations applicable to the NHLS’ business environment. No material non-compliances were identified, however, at the date of this report, the ownership of land and buildings had not been transferred into the name of the NHLS as required by the NHLS Act. The Accounting Authority has taken all appropriate measures to ensure the transfer process is effected by the Department of Public Works.

In respect of the vacancies at Board level, only the Minister of Health can appoint members. Two vacant positions are in the process of being filled, namely SALGA and the Council of Higher Education. There are vacancies on the Board for which the Executive Authority is in the process of considering appointments.

Fraud and CorruptionA Fraud Prevention and Response Plan is in place to enhance integrity and reduce the risk of fraud, as well as assist staff in making decisions in the reporting of fraud, corruption and other criminal offences affecting NHLS. It is designed to protect public money and property; and protect the integrity, security and reputation of NHLS; while maintaining a high level of services to the community, consistent with the NHLS’ code of conduct.

The NHLS uses the Fraud Hotline (Tip-Offs Anonymous) which is externally managed by an independent service provider. The NHLS protects the rights of whistle blowers to prevent victimisation by fellow employees or managers in contravention of the Protected Disclosures Act, No. 26 of 2000.

During the period under review, a fraud risk assessment workshop was conducted and a fraud risk register compiled to assist the entity in raising awareness of fraud and ethics in the workplace and enable employees to identify incidents of possible misconduct and report allegations effectively.

A consolidated record of allegations of fraud is maintained, together with the actions taken and their resolution. These are reported to the Board through the Audit and Risk Committee.

Minimising Conflict of Interest The NHLS Board has adopted a code of business conduct and ethics for its members. The code is intended to focus the Board and each member on areas of ethical risk, provide guidance to directors to help them recognise and deal with ethical issues, provide mechanisms to report unethical conduct, and help foster a culture of honesty and accountability.

The code requires all Board members to avoid conflict of interest, and encourages members to disclose promptly any situation that involves, or may reasonably be expected to involve, a conflict of interest.

Some of the more common conflicts from which Board members must refrain include:

a) Relationship of organisation with third parties. “Directors may not engage in any conduct or activities that are inconsistent with the organisation’s best interest or that disrupt or impair the organisation’s relationship with any person or entity with which the organisation has or proposes to enter into a business or contractual relationship”.

b) Compensation from other sources. “Directors may not accept compensation (in any form) for services performed for the organisation from any source other than the organisation”.

c) Gifts. “Directors and members of their families may not accept gifts from persons or entities who deal with the organisation in those cases where any such gift is being made in order to influence the director’s action as a member of the Board, or where acceptance of the gifts could create the appearance of a conflict of interest. Any acceptance of a single gift to the value of more than R500 or various gifts the accumulative value of which exceeds R1000 in any financial year must be declared with the Company Secretary and recorded in the gifts declaration register”.


All members are requested to declare their interest in any matter included in the agenda before every meeting commences. Should any member declare any interest, he/she will be recused from the meeting when the matter is discussed.

Code of ConductThe NHLS has a Code of Conduct which refers to the philosophical study of values and the rules that all employees, executives and non-executives members of the Board live by. The NHLS is committed to a policy of fair dealing and integrity in the conduct of its business. This commitment is actively endorsed by the NHLS Board and executives, and is based on a fundamental belief that business should be conducted honestly, fairly and legally. All employees are expected to share its commitment to high moral, ethical and legal standards.

Health Safety and Environmental Issues While the Governance, Ethics and Social Committee provides guidance on health, safety and the environment, the NHLS has systems and processes in place that deal specifically with these issues. Health and safety issues are reported extensively in the National Institute for Occupational Health (NIOH) Annual Review 2016/17, published concurrently with this Annual Report.

Social Responsibility

NHLS BLOOD DRIVE

Stakeholder relations and corporate social investment are one of the fundamental objectives of the NHLS. As part of the NHLS’ objectives of establishing partnership and of striving to be a good corporate citizen, it has partnered with the South African National Blood Services (SANBS) in hosting a blood drive every eight weeks. This is one of the Social Investment activities that the NHLS is involved in impacting on the lives of South Africans.

For the year under review, the NHLS hosted six blood drives, and manage to collect 313 units of blood from 267 people. The volumes collected will definitely experience an experiential growth in the next few years as more people become educated about the importance of donating blood in saving lives.

CELEBRATING MANDELA DAY

Nelson Mandela International Day has been inspiring people across the country - and the world - to take action and effect some change, even if only for 67 minutes on 18 July each year. In honour of our late president, individuals and companies alike make the most of this day to demonstrate their commitment to social change, with some going over and above what they usually do for the community.

During the year under review, various divisions within the NHLS also took part in this august initiative to make a difference in people’s lives. These activities ranged from serving tea and scones by the Haematology Department at Chris Hani Baragwanath Academic Hospital (CHBAH), to assisting nurses at a Paediatric Ward with cleaning and tiding by staff from the Chemistry Department of the same hospital laboratory.

TAKE A GIRL-CHILD TO WORK

Take a Girl-Child to Work is an important initiative aimed at exposing female learners to the work environment, as well as stimulating their interest in various careers offered by various companies at an early age. During the year under review, the NHLS in collaboration with Cell C hosted a very successful “Take the Girl-Child to Work” day at its Sandringham campus with 20 school girls in grades 10-11 from Waverley Girls’ High School. The learners had an opportunity to interact with various NHLS management and professionals to get an overview of the laboratory medicine environment, as well as to learn about the various career opportunities that exist within the organisation.


Report of the Audit and Risk Committee We are pleased to present our report for the financial year ended 31 March 2017.

AUDIT AND RISK COMMITTEE MEMBERS AND ATTENDANCE

The Audit and Risk Committee (hereafter referred to as the Committee) consists of the members listed hereunder and is required to meet four times per annum as per its approved terms of reference. During 2016/17, four meetings were scheduled and held. The Committee confirms that it has discharged its responsibilities in terms of the National Health Laboratory Service (hereafter referred to as NHLS) Audit and Risk Committee Charter.

The composition of the Committee is aligned with Section 77(a) of the PFMA and Treasury Regulation 27.1.

Name

Meeting Dates

26 M

ay 2

016

31 A

ugus

t 201

6

23 N

ovem

ber2

016

15 F

ebru

ary

2017

Tota

l Mee

ting

Att

enda

nce

Mr Lunga Ntshinga 4

Dr Balekile Mzangwa C C C A 0

Mr Andre Venter 4

Mr Goolam Manack A A 2

Mr Stanley Harvey 4

Prof. Gregory Hussey A A A % 0

Prof. Haroon Saloojee A A A 1

Mr Michael Shingane A C C C 0

Mr Michael Manning C C C 1

Ms Nelisiwe Mkhize A C C C 0

Mr Thamsanqa Stander C C C 1

Ms Joyce Mogale 4

Legend:

= Present * = Appointed



There was one retirement or resignation from the Committee during the year under review.

AUDIT AND RISK COMMITTEE RESPONSIBILITY

The Committee reports that appropriate formal terms of reference have been adopted in its charter, in line with the requirements of section 55(1)(a) of the PFMA and Treasury Regulation 27.1. The Committee further reports that it has conducted its affairs in compliance with this charter.

THE EFFECTIVENESS OF INTERNAL CONTROL

The Committee has reviewed various reports prepared by the internal and external auditors, on adequacy and effectiveness of internal control systems as well as on the Group Annual Financial Statements. The Committee is satisfied that internal control systems and governance practices have been put in place.

The Committee is satisfied with the content and quality of monthly and quarterly reports prepared and issued by the Accounting Authority of the economic entity during the year under review. The responsibility for risk management resides with management at all levels. Risk management is embedded throughout the organisation, from members of the Board to all employees. The approach followed by NHLS is to ensure that significant risks are identified and managed.


The NHLS has a dedicated Risk Officer to co-ordinate the implementation of its risk management philosophy and strategy as approved by the Board. The Board continues to discharge this responsibility through its Audit and Risk Committee and ensures that risk management is a standing item for discussion at each scheduled Board meeting.

EVALUATION OF GROUP ANNUAL FINANCIAL STATEMENTS

The Committee has:

• Reviewed the audited Group Annual Financial Statements with SizweNtsalubaGobodo (SNG) and the Board

• Reviewed SNG’s management report and management’s response thereto

• Reviewed changes in accounting policies and practices

• Reviewed the entity’s compliance with legal and regulatory provisions

• Reviewed significant adjustments resulting from the audit.

The Committee concurs with and accepts the external auditors’ report on the Group Annual Financial Statements, and is of the opinion that the audited Group Annual Financial Statements should be accepted.

COMPETENCY OF THE FINANCE DEPARTMENT

In compliance with governance principle 3.6 of the King 3 Code of governance principles, the Audit and Risk Committee is satisfied that there is sufficient expertise, resources and experience within the NHLS finance function.

INTERNAL AUDIT

The Committee is satisfied that there is an internal audit function in the organisation and that it has addressed the risks pertinent to the economic entity and its audits. The Committee has reviewed internal audit reports and ensured that reported items are addressed effectively. The Committee is considering enhancing internal audit capacity and leadership.

CONCLUSION

The Committee agrees that the adoption of the going concern premise is appropriate in preparing the Group Annual Financial Statements for the 2016/17 period. The Committee has therefore recommended the adoption of the Group Annual Financial Statements by the NHLS Accounting Authority at their meeting held on 27 July 2017.

Lunga Ntshinga

Chairperson: Audit and Risk Committee


Human ResourcesPART D


IntroductionThe 2016/17 financial year was to be the year marked with optimism and hope for improvement in the working climate at the National Health Laboratory Service (NHLS), with all employees being more engaged, involved and participating in programmes that affect their lives and the way they work. The year began with the signing of a collective agreement with Organised Labour, expressing the organisation’s commitment to honouring and delivering on all outstanding matters. Key amongst these was Phase One (Part 2) of the Remuneration and Reward (R&R) Project, which led to the development of new pay scales and salary adjustments for all employees towards the 50% mark of their then earning against the minimum of the new pay scale; as well as the standardisation of all similar jobs across the organisation through a job evaluation process. Phase One (Part 2) was successfully implemented in April 2016.

The remaining part of the R&R Project is Phase Two, which is the implementation of the Performance-Proficiency Matrix for the four key health professional roles i.e. Pathologist, Medical Scientist, Medical Technologist and Medical Technician. The intent of Phase Two is to differentiate reward as the level of performance increases, in so doing encouraging employees to acquire and demonstrate high levels of competencies. This equates to rewarding the competency demonstrated within the role. This will enable the organisation to promote employees subject to demonstrable performance at the aspirant level of work. This approach will also mitigate the promotion of employees or the allowing of employees to progress with the hope of success when they are not ready for the position. Rather, promotion will become an appreciation of delivery at the next level of work.

In addition to the above, through stakeholder engagement, the Human Resource Department updated, consulted and approved critical policies, namely recruitment and selection; performance management; performance pay progression; remuneration and reward; and employment equity and diversity. These are deemed a priority if the NHLS is to be placed on a positive trajectory towards being an efficient, high performing organisation. Furthermore, the Board approved the implementation of the newly developed workforce model, which will provide NHLS leadership with a tool for better workforce planning scenarios and identification of areas of inefficiency.

The commitment towards learning, training and development of staff and communities continued, with 100 scholarships being provided to students studying towards diplomas and degrees in Biomedical Science, and 194 bursaries awarded to NHLS staff members in various NHLS careers.

The total permanent employee complement stabilised at 6 692, with a total annual remuneration bill of approximately R2.6 billion, inclusive of fixed-term contracts of greater than 18 months and registrars. The staff, organisational and team commitment is proudly solid with a turnover rate of about 5.2% relative to last year’s 5.6% (of which 3.6% were voluntary resignations and the remainder mandatory). This 5.2% equates to 348 employees over a total workforce of 6 692, which is inclusive of fixed-term contracts of 18 months and registrars. These numbers depict a healthy turnover rate, which allows the organisation to renew itself. The single concern about this turnover rate, however, is its composition, since 44.5% of it comprises Pathologists (22), Scientist (14), Technologists (88), Technicians (11), Laboratory Supervisors (7) and Managers (13) – all of whom are core to the organisation’s operations.

The year under review recorded progress towards the NHLS’ 2020 Strategy, more so focusing on goal number seven, which is to strengthen the organisation’s position through adequate, competent and motivated human capital. Overall progress made was as follows:

• The approval of the updated performance management policy, which integrates performance moderation and 360° Leadership Assessment as core components to enable consistency and living whilst demonstrating the NHLS values. All leadership across the regions received training in this regard to ensure shared understanding.

HR Executive Dr Mojaki Mosia



• The development of the Performance-Proficiency Matrix for each of the four key health roles. The process went through multiple stakeholder consultations i.e. task teams consisting of discipline experts and role players, Executive Committee, Remuneration and Human Resources Committee and the Board. The project is at the costing stage and is awaiting final financial approval by the Finance Committee.

• As previously reported the Integrated Talent Management Policy was developed and approved. The next step in this regard is the operationalisation of the policy and the determination of the NHLS’ Talent Strength; as well as the development of strategies to close identified gaps. In this regard, the NHLS’ equity profile will be prioritised in key roles where under-representation has been identified. All these plans will be integrated into the Employment Equity Plan for the next five years, which is effective from April 2017.

• To ensure the successful facilitation of the NHLS’ Strategy and implementation thereof by leadership, the reconfiguration and realignment of the NHLS structure and the re-profiling of its roles is critical. The Board approved the updated organisational structure and gave effect to a more integrated matrix structure, in which human resources, finance and quality improvement functions within the region report directly to the Area Manager. This will ensure that all matters are resolved at their point of origin, as well as provide a “one stop service” within the region, with functional expertise provided through “dotted line” reporting.

• The NHLS’ relationship with various stakeholders continues to improve, with the Bargaining and Labour Relations Forum having no matters of dispute referred to the Commission for Conciliation Mediation and Arbitration (CCMA) in the reporting period. The creation of two full-time Shop Steward positions has been beneficial in facilitating deeper and more meaningful engagements on matters of mutual interest before they become disputes. Moving forward, Organised Labour will continue to be an integral part of the NHLS’ processes, with full participation status in the interviewing, performance moderation, performance-proficiency assessment and insourcing task team processes.

In conclusion, the year ahead will be characterised by how well we operationalise all approved policies, as well as activate focus groups to unpack the employee climate-engagement survey findings. In addition, the process of obtaining and giving feedback on the 360° Leadership Assessment pilot for the senior leadership-management cohort will be crucial. The biggest challenge for the year ahead will be the proposed insourcing of the security, cleaning and gardening services in respect of affordability and sustainability, relative to the overall budget of the NHLS.

Human Resources Oversight StatisticsTable HR1: Personnel cost

Total Expenditure for the Entity (R)

Personnel Expenditure (R)

Personnel Expenditure as a % of Total Expenditure (%)

Number of Employees

Average Personnel Cost per Employee (R)

Total Remuneration Cost 6 958 079 000.00 2 656 509 121.84 37% 7443 328 594.81

Table HR1 reveals that 37% of total expenditure is attributable to personnel cost. In the period under review, the year ended with an inclusive staff complement of 7 443 (i.e. all personnel types inclusive of students, sessional workers and post retirement). Table HR2 reflects the cost by occupational category.

Table HR2: Personnel cost by salary band

Salary Band

Personnel Expenditure (R)

% of Personnel Expenditure to Total Personnel Cost (%)

Number of Employees

Average Personnel Cost Per Employee (R)

Top Management 14 835 720.00 0.09 7 2 119 388.61

Senior Management 92 729 993.25 5.6 60 1 252 460.03

Professional qualified 1 135 254 116 49.6 611 469 430.44

Skilled 533 129 966.83 17.3 2 989 327 455.95

Semi-skilled 624 665 286.78 25.08 2 634 175 754.07

Unskilled 40 739 635.73 1.60 315 107 775.92

Training (Students/Learners) 229 990 123.34 0.8 827 239 694.78

Total 2 656 509 121.84 100 7 743 29 631 772.15

Table HR 2 also reveals that the greatest cost lies in three categories, namely professional, skilled and semi-skilled, which consist of positions at grade B, C and D.


Performance rewards by salary band

No bonuses were paid in the 2016/17 financial period.

Table HR3: Training costs

Training Type

Personnel Expenditure R’000

Training Expenditure R’000

Training Expenditure as a % of Personnel Cost (%)

Number of Employees Trained

Average Training Cost per Employee (R)

Non-PIVOTAL* programmes (short courses, workshops, seminars, congresses and continuous professional development interventions)

3 229 424 13 708 0.42% 4 783 2 865

PIVOTAL programmes for non-employees (higher education qualifications)

3 750 100 37 500

PIVOTAL programmes for non-employees participating in learnerships, on-the-job training and workplace experience

31 643 31 643 538 58 816

* PIVOTAL = Professional, Vocational, Technical and Academic learning programmes that result in occupational qualifications or part qualifications on the National Qualifications Framework.

The NHLS continues to fulfil its role in promoting and prioritising skills development through the analysis of its employees’ skills needs by implementing the Workplace Skills Plan. Multiple learning programmes were offered through short learning programmes, in-service conferences and congresses, as well as continuing professional development programmes to enable the organisation to comply with legislation, improve quality of services, ensure business continuity and assist in the mitigation of risks.

In the past year, the NHLS achieved 91% of the planned training target, as compared to the legislated target of 60%, which reflected an amount of 4 783 learners who had attended technical and non-technical short learning programmes, workshops, seminars, on-the-job training and seminars in 2016/17.

In addition to regular training for learnership and professional registrations, 100 scholarships were awarded to needy students across the country studying towards the National Diploma in Biomedical Technology and the Bachelor of Health Science, and bursaries were given to NHLS staff wishing to pursue career development by way of formal qualifications.

Table HR4: Employment and vacancies

Occupational Level2015/16 No. of Employees

2015/16 Approved Posts

2016/17 No. of Employees

2016/17 Vacancies % of Vacancies

Top Management 7 9 7 2 28

Senior Management 57 96 56 40 71.4

Professional qualified 536 890 580 310 53.4

Skilled 2 691 3 106 2 910 196 6.7

Semi-skilled 2 498 2948 2 594 354 13.6

Unskilled 315 364 314 50 15.9

Registrars 237 264 231 33 14.2

Total 6 341 7 677 6 692 985 14.7%

Table HR4 reveals a vacancy rate of 14% relative to approved positions, however the number of active vacancies was far less. Though more vacancies exists, only few critical positions were advertised due to the financial challenges experienced by the NHLS. Accordingly, in this reporting period, mainly core positions were advertised. In total, 351 positions were successfully filled, inclusive of registrars.

From Table HR5, the overall turnover, less the “End of contract” category, reveals that the turnover level has stabilised at less than the 10% ratio, with voluntary resignations being 241 employees. Specific concern is the fact that the organisation loses people that are experienced. Their replacements are less experienced particularly the pathologists and technologists – since these appointees were from the cohort that had recently completed training.


Table HR5: Employment changes

Occupational Level

Employment at Beginning of Period Appointments Terminations

Employment at End of the Period

Top Management 7 1 1 7

Senior Management 57 0 3 56

Professional qualified 536 31 46 580

Skilled 2 691 103 165 2 910

Semi-skilled 2 498 105 92 2 594

Unskilled 315 25 10 314

Registrars 237 58 31 231

Total 6 341 323 348 6 692

The terminations in Table HR5 reflect only loss of permanent employees (this excludes fixed term contractors less than 18 months, sessional, post retirees and students). Students, other than registrars whose contracts are over 18 months, are excluded from the 323 appointments and 348 employees terminations reported.

Table HR6: Reasons for leaving

Reason Number % of Total Staff Leaving

Death 18 0.27

Resignation 241 3.60

Dismissal 15 0.22

Discharged 2 0.03

Retirement 58 0.87

Ill health 12 0.18

Expiry of contracts 280 4.1

Contract not valid 2 0.03

Total 628 9.3%

Table HR6 reveals voluntary resignations at 3.6%, which constitutes over 40% of the total staff turnover when the category “Expiry of Contracts” is excluded. The second highest staff turnover category was “Retirements” at 0.87%.

Table HR7: Labour relations – Misconduct and disciplinary action

Nature of Disciplinary Action Number

Written warning 28

Final written warning 33

Dismissal 15

Not guilty 4

Resignation 3

Demotion 1

Total 84

The NHLS dealt with 84 material disciplinary cases in the 2016/17 year resulting in 15 dismissals and 61 final and written warnings being issued. Overall, formal cases were at 1.2%, excluding various verbal warnings.


Table HR8 (a): Equity target and employment equity (EE) status – Male

Level

Male

African Coloured Indian White

Current Target Current Target Current Target Current Target

Top Management 3 3 0 1 1 1 0 0

Senior Management 7 12 1 1 3 3 10 10

Professionally qualified 67 110 18 29 35 33 63 63

Skilled level 646 738 70 103 65 65 65 90

Semi-skilled 727 741 70 93 43 45 12 19

Unskilled 169 179 7 11 1 2 1 1

Total 1 619 1 783 166 238 148 149 151 183

Table HR8 (b): Equity target and employment equity status – Female

Level

Female

African Coloured Indian White

Current Target Current Target Current Target Current Target

Top Management 2 3 0 0 0 0 1 0

Senior Management 8 10 1 2 8 6 17 17

Professionally qualified 159 158 21 25 66 66 141 138

Skilled level 1 364 1 332 169 165 181 178 319 317

Semi-skilled 1 411 1 407 191 194 64 66 76 83

Unskilled 128 179 7 11 1 2 0 1

Total 3 072 3 089 389 397 320 318 554 556

Tables HR9 (a) and (b) indicate the EE profile of NHLS as at 31 March 2017. The targets reflected in the table were generated through the analysis of the workforce profile in alignment with the economically active population demographics, as provided by the Department of Labour annually. The workforce profile indicates an under-representation of African males and females, and Coloured males and females at the senior management, professionally qualified and skilled occupational levels. The gaps in the under-represented groups have informed the target-setting process, based on approved, budgeted vacancies and vacancies that will be created by employees retiring in the next year.

Table HR8 (c) Equity target and employment equity status

Level

Staff with Disabilities

Male Female

Current Target Current Target

Top Management 0 0 0 0

Senior Management 0 0 0 0

Professionally qualified 0 3 0 3

Skilled level 3 5 18 5

Semi-skilled 5 4 5 4

Unskilled 0 2 1 2

Total 8 14 24 14

The targets for People with Disabilities are not highly ambitious because an environmental audit is required to establish the areas that are currently disability friendly so that progress can be made in those areas while the NHLS prepares to increase the level of disability-friendly spaces across its campuses.


Financial InformationPART E

National Health Laboratory ServiceAudited Group Annual Financial Statements for the year ended 31 March 2017

Chief Financial Officer’s report

OVERVIEW: STATEMENT OF FINANCIAL PERFORMANCE

A summary of the financial performance for the 2016/17 fiscal year is as follows:

• The NHLS generated a deficit amounting to R1.9 billion compared to a surplus of R273 million surplus in the previous financial year.

• Revenue grew from R6.4m to R7.1 billion. Revenue from provincial budgets amounted to 90% of the total revenue generated.

• Production costs, including direct labour and material, grew from R4.8 billion to R5.8 billion. This equated to a 21% increase (2015/16: 14% increase) mainly due to increases in labour, test volumes, price increases as well as fluctuations in the exchange rate. Labour constituted 43% of the total revenue compared to 37% in the previous financial year. Average test revenue per capita increased by 5.2% (2015/16: 7% increase).

• Operational costs increased by 91%. This increase in support costs is largely due to an increase in the provision for doubtful debt.

OVERVIEW: STATEMENT OF FINANCIAL PERFORMANCE

A summary of the financial position for the 2016/17 financial year is as follows:

• Assets decreased from R3.9 billion to R2.9 billion, which translates to a 44% decrease, mainly due to a 46% decrease in accounts receivable. The closing bank balance stood at R391 million compared to R739 million in the previous financial year.

• The current liability increases were mainly driven by the increases in leave provision and the trade payables balance. The leave provision had an overall increase of 32% to R186 million, and trade payables increased by 12% to R973 million.

The organisation struggled to stabilise the delivery of operations during the reporting period. The implementation of the NHLS Strategic Plan is being hampered by poor cash flows. Should the provincial DoHs continue to pay the NHLS, the organisation will improve the diagnostic laboratory model, continue to deliver on its mandate and further improve its financial performance.

CASH FLOW

During the reporting period, the NHLS received R7.2 billion from customers. Of the R7.2 billion, R3.2 billion was used for personnel costs and R3.9 billion for goods and services. Compared to the prior financial year, payments from customers amounted to R6.6 billion, while R2.5 billion was used for personnel costs and R3.9 billion for goods and services.

BUDGET VARIANCE ANALYSIS

The total revenue is 5.5% over budget, with a Rand value of R392 million due to a 4.8% increase in demand for diagnostic laboratory services in 2016/17. The positive variance is mainly attributable to the increase in priority tests as per alignment of the NDoH’s protocols.

Personnel costs are over budget by 6.5% due to the introduction of the 13th cheque for the A–C band staff in 2016/17. Material expenditure remains constant at 44% (2016: 44%) as a percentage of revenue.

Acting CFO Mr Ben Wikner




GOING CONCERN

Given its significance in the public as well as private health sectors and its ability to deliver affordable pathology health services to the South African public, the NDoH has neither the intention nor the need to liquidate or curtail materially the scale of the NHLS.

Management has considered a wide range of factors in determining whether the organisation is a going concern. These factors include its current and expected performance as a Schedule 3A public entity, its restructuring plans and the likelihood of future government funding.

Despite continued difficulty in receiving regular payments from all provinces for debt owed for services rendered by the NHLS, it is anticipated that settlement of disputes will be resolved. Therefore, the Group Annual Financial Statements has been prepared on the basis of accounting policies applicable to a going concern. In line with the applicable accounting standard, the basis presumes funds will be available to finance future operations, and that the realisation of assets and liabilities, contingent obligations and commitments will occur in the ordinary course of business. This specifically assumes that the debt owed by all the provinces will be settled.

Outstanding debt owed by provinces

Collection of money from the provincial DoHs has been a problem for many years. As at 31 March 2017, DoH debt payable amounted to R6.2 billion. The majority of the debt is owed by KZN and Gauteng, which amounts to R4.6 billion and is older than 90 days. The outstanding debt owed by KZN and Gauteng constitutes R5.5 billion or 87% of trade receivables. There are ongoing negotiations with the KZN and Gauteng DoHs regarding the settlement of overdue amounts owed to the NHLS.

CAPITAL ADEQUACY OF THE NHLS

The NHLS, as an operating entity, requires ongoing capital to meet the financing requirements to purchase equipment in line with both technological advances and replacement of assets which have reached the end of their useful life. In addition, the trend for state healthcare institutions to delay payment of invoices for services rendered to them beyond reasonable periods of time requires an ongoing increase in working capital commitments.

Capital adequacy R'million

Cash funds available at 31 March 2017 390

Less:

Grant funds 56

Net cash surplus available at 31 March 2017 334

Less:

Purchase of new and replacement equipment 430

Capital commitments 136

Trade and other payables 973

Total cash requirements 1 536

Shortfall (1 205)

The NHLS will be able to meet its capital obligations required to operate in 2017/18, provided that its customers settle their debts timeously. Failure to do so will severely hamper its ability to operate effectively.

MAINTENANCE OF FINANCIAL CONTROL SYSTEMS

The Board is ultimately responsible for the system of internal financial control within the NHLS and place considerable importance on maintaining a strong control environment.

SUBSEQUENT EVENTS

Refer to Note 40 of the Annual Financial Statements for subsequent events. The Board and Management are not aware of any other matter or circumstance arising since the end of the financial year, not otherwise dealt with in this report, that would affect its operations or the results thereof significantly.

STATED CAPITAL

There were no changes in the authorised or issued share capital of the economic entity during the year under review.



BORROWING LIMITATIONS

In terms of the NHLS rules, the Board may exercise all the powers of the economic entity to borrow money, in accordance with the Public Finance Management Act (PFMA), as they consider appropriate. During the current financial year, the entity did not borrow funds to finance its operations.

Ben WiknerActing Chief Financial Officer

Summary of Group salient information

Financial Performance (R’000)

12 Months 12 Months 12 Months 12 Months 12 Months

2013 2014 2015 2016 Restated 2017

Revenue 4,530,697 5,208,377 5,706,961 6,442,194 7,094,905

Other revenue 436,383 428,326 266,490 523,553 422,985

Total revenue 4,967,080 5,636,703 5,973,451 6,965,747 7,517,890

Gross margin/(loss) 1,460,231 1,244,684 1,475,998 1,602,546 1,262,153

Operating Surplus/(deficit) (105,900) (217,260) 15,179 272,946 (1,879,192)

Net surplus/(deficit) (64,082) (152,199) 179,747 272,762 (1,880,210)

Cash position (R'000)

Net Cash generated from operations 262,297 (157,987) 374,197 136,152 (76,788)

Net Increase/(decrease) in cash 85,982 (316,762) 303,214 87,809 (346,999)

Cash on hand available for NHLS operations 544,008 278,958 588,171 570,756 333,624

Cash on hand available for grants held in trust 120,706 69,354 62,995 168,219 58,352

Total reported cash-on-hand 664,714 347,952 651,166 738,975 391,976

Subsidies from government (R'000)

Government funding of National Institutes 85,495 104,885 125,280 678,926 715,270

Teaching and research (R'000)

Teaching income generated from universities 48,545 17,491 57,299 106,526 18,461

Investments in capex activities (R'000)

Capital expenditure 177,411 186,042 47,641 155,593 213,119

Capex spend as % of turnover 4% 3% 1% 2% 3%

Liquidity ratio analysis

Current ratio 4.2:1 2.4:1 2.6:1 2.4:1 1.1:1

Acid test ratio 4.1:1 2.3:1 2.5:1 2.4:1 1.1:1

Other ratio analysis

Growth in revenue % 18% 13% 6% 17% 8%

Revenue increased by 12% on average over the five-year period. This resulted in a R2.58 billion increase since 2013, which is mainly due to the increase in consumption and technology changes in production.

The total net deficit generated over the last five-year period amounted to R1.02 billion which hinders the NHLS in ensuring continued operational sustainability and the necessary invest in capital expenditure and maintenance. Despite the large provisions raised for doubtful debt, liquidity ratios are continuously being maintained at a ratio of current liabilities being fully recoverable by current assets.



These audited Group Annual Financial Statements were prepared by:

Tendai Mapenda

CA (SA)

IndexStatement of Responsibility and Approval of the Financial Statements ....................................................................................................................................186

Independent Auditor’s Report to Parliament on the National Health Laboratory Service ............................................................................................188

Statement of Financial Position ............................................................................................................................................................................................................................195

Statement of Financial Performance .................................................................................................................................................................................................................196

Statement of Changes in Net Assets .................................................................................................................................................................................................................197

Statement of Cash Flows ..........................................................................................................................................................................................................................................198

Statement of Comparison of Budget and Actual Amounts ...............................................................................................................................................................199

Accounting Policies ....................................................................................................................................................................................................................................................201

Notes to the Audited Group Annual Financial Statements.................................................................................................................................................................218

Detailed Statement of Financial Performance ............................................................................................................................................................................................246



Statement of Responsibility and Approval of the Financial StatementsThe Accounting Authority is required by the Public Finance Management Act (No. 1 of 1999) (as amended by Act No. 29 of 1999)(PFMA), to maintain adequate accounting records and is responsible for the content and integrity of the audited Group Annual Financial Statements and related financial information included in this report. It is the responsibility of the Accounting Authority to ensure that the audited Group Annual Financial Statements fairly present the state of affairs of the entity as at the end of the financial year and the results of its operations and cash flows for the period then ended. The external auditors are engaged to express an independent opinion on the audited Group Annual Financial Statements and were given unrestricted access to all financial records and related data.

The audited Group Annual Financial Statements have been prepared in accordance with the Standards of Generally Recognised Accounting Practice (GRAP) including any interpretations, guidelines and directives issued by the Accounting Standards Board and International Financial Reporting Standards (IFRS) where statements of GRAP are not yet effective. The Group Annual Financial Statements have been prepared using the accrual basis of accounting.

The audited Group Annual Financial Statements are based upon appropriate accounting policies consistently applied and supported by reasonable and prudent judgements and estimates.

The Board members acknowledge that they are ultimately responsible for the system of internal financial control established by the economic entity and place considerable importance on maintaining a strong control environment. To enable the members to meet these responsibilities, the Accounting Authority sets standards for internal control aimed at reducing the risk of error or lost in a cost effective manner. The standards include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk. These controls are monitored throughout the economic entity and all employees are required to maintain the highest ethical standards in ensuring the economic entity’s business is conducted in a manner that, in all reasonable circumstances, is above reproach. The focus of risk management in the economic entity is on identifying, assessing, managing and monitoring all known forms of risk across the economic entity. While operating risk cannot be fully eliminated, the economic entity endeavours to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined procedures and constraints.

The Board is of the opinion, based on the information and explanations given by management and by the entity’s internal and external auditors, that the system of internal control provides reasonable assurance that the financial records may be relied on for the preparation of the audited Group Annual Financial Statements. However, any system of internal financial control can provide only reasonable, and not absolute, assurance against material misstatement or error.

The Board has committed to business integrity, transparency and professionalism in all its activities. As part of this commitment, the Accounting Authority supports the highest standards of corporate governance and the ongoing development of best practice.

The Board has reviewed the economic entity’s cash flow forecast for the year to 31 March 2018 and, in the light of this review and the current financial position, they are satisfied that the economic entity has access to adequate resources to continue in operational existence for the foreseeable future subject to the timeous settlement of debt by all public sector healthcare providers.

The entity is wholly dependent on all public healthcare providers for continued funding of operations. The audited Group Annual Financial Statements are prepared on the basis that the entity is a going concern and that the National Department of Health has neither the intention nor the need to liquidate or curtail materially the scale of the entity.



APPROVAL OF GROUP ANNUAL FINANCIAL STATEMENTS

Although the Accounting Authority are primarily responsible for the financial affairs of the entity, they are supported by the economic entity’s external auditors. The external auditors are responsible for independently reviewing and reporting on the economic entity’s audited Group Annual Financial Statements. The audited Group Annual Financial Statements have been examined by the economic entity’s external auditors and their report is presented on pages 188 to 194.

The audited Group Annual Financial Statements set out on pages 195 to 245, which have been prepared on the going concern basis, were approved by the Accounting Authority in terms of Section 51(1)(f ) of the PFMA on 31 July 2017 and were signed on its behalf by:

Prof. Eric Buch Prof. Shabir Madhi

Chairperson: Accounting Authority Acting Chief Executive Officer



Independent Auditor’s Report to Parliament on the National Health Laboratory Service

REPORT ON THE AUDIT OF THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS

Qualified Opinion

1. We have audited the consolidated and separate Financial Statements of the National Health Laboratory Service (the Group) set out on pages 195 to 245, which comprise the consolidated and separate statement of financial position as at 31 March 2017, and the consolidated and separate Statement of Financial Performance , Statement of Changes in Net Assets, Statement of Cash Flows and the Statement of Comparison of Budget Information with Actual Information for the year then ended, as well as the notes to the consolidated and separate Financial Statements, including a summary of significant accounting policies.

2. In our opinion, except for the possible effects of the matters described in the basis for qualified opinion section of our report, the consolidated and separate Financial Statements present fairly, in all material respects, the consolidated and separate financial position of the Group as at 31 March 2017, and the Group’s financial performance and cash flows for the year then ended in accordance with South African Standards of Generally Recognised Accounting Practice (GRAP) - and the requirements of the Public Finance Management Act of South Africa, 1999 (Act No. 1 of 1999) (PFMA).

Basis for Qualified Opinion

Irregular Expenditure

3. Section 55(2) (b) (i) of the PFMA requires the entity to disclose in the consolidated and separate Financial Statements particulars of all irregular expenditure that had occurred during the financial year. The entity did not have an adequate system for identifying and recognising all irregular expenditure and there were no satisfactory alternative procedures that we could perform to obtain reasonable assurance that all irregular expenditure had been properly recorded in note 36 to the consolidated and separate Financial Statements. Consequently, we were unable to determine whether any adjustment was necessary to the irregular expenditure stated at R1, 019 billion (2016: R29 million) in the consolidated and separate Financial Statements.

4. We conducted our audit in accordance with the International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the consolidated and separate Financial Statements section of our report.

5. We are independent of the National Health Laboratory Service in accordance with the Independent Regulatory Board for Auditors’ Code of professional conduct for registered auditors (IRBA code) and other independence requirements applicable to performing audits of the Financial Statements in South Africa. We have fulfilled our other ethical responsibilities in accordance with the IRBA code and in accordance with other ethical requirements applicable to performing audits in South Africa. The IRBA code is consistent with the International Ethics Standards Board for Accountants’ Code of ethics for professional accountants (parts A and B).

6. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

Material Uncertainty Related to Going Concern

7. We draw attention to Note 39 in the Financial Statements, which indicates that the National Health Laboratory Service incurred a deficit for the year of R1, 879 billion during the year ended 31 March 2017 and, as of that date the National Health Laboratory Service total liabilities exceeded its total assets by R19, 214 million. As stated in note 39, these events or conditions, indicate that a material uncertainty exists that may cast significant doubt on the National Health Laboratory Service ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Emphasis of Matter

8. We draw attention to the matter below. Our opinion is not modified in respect of this matter.

Restatement of Corresponding Figures

9. As disclosed in note 35 to the separate and consolidated Financial Statements, the corresponding figures for 31 March 2016 have been restated to correct an error as a result of incorrectly classifying buildings as heritage assets.



Other Matter

10. We draw attention to the matter below. Our opinion is not modified in respect of this matter.

11. The supplementary information set out on pages 246 to 247 does not form part of the Financial Statements and is presented as additional information. I have not audited these schedules and, accordingly, we do not express an opinion thereon.

Responsibilities of Accounting Authority

12. The Board of Directors, which constitutes the Accounting Authority is responsible for the preparation and fair presentation of the consolidated and separate Financial Statements in accordance with applicable financial reporting framework and the requirements of the South African Standards of Generally Recognised Accounting Practice (GRAP) – and the requirements of the Public Finance Management Act of South Africa, 1999 (Act No. 1 of 1999) (PFMA) and for such internal control as the Accounting Authority determines is necessary to enable the preparation of consolidated and separate Financial Statements that are free from material misstatement, whether due to fraud or error.

13. In preparing the consolidated and separate Financial Statements, the Accounting Authority is responsible for assessing the National Health Laboratory Service’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting, unless the Accounting Authority either intends to liquidate the National Health Laboratory Service or to cease operations, or has no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Consolidated and Separate Financial Statements

14. Our objectives are to obtain reasonable assurance about whether the consolidated and separate Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated and separate Financial Statements.

15. We also:

• Identify and assess the risks of material misstatement of the consolidated and separate Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the public entity’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Accounting Authority.

• Conclude on the appropriateness of the Accounting Authority’s use of the going concern basis of accounting in the preparation of the Financial Statements. We also conclude, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on National Health Laboratory Service and its subsidiary’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the Financial Statements about the material uncertainty or, if such disclosures are inadequate, to modify the opinion on the Financial Statements. Our conclusions are based on the information available to us at the date of the auditor’s report. However, future events or conditions may cause a public entity to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the Financial Statements, including the disclosures, and whether the Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

• Communicate with the Accounting Authority regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

• Confirm to the Accounting Authority that we have complied with relevant ethical requirements regarding independence, and communicate all relationships and other matters that may reasonably be thought to have a bearing on our independence, and where applicable, related safeguards.



Report on other and regulatory requirements

16. In accordance with our responsibilities in terms of sections 44(2) and 44(3) of the Auditing Profession Act, we report that we have identified reportable irregularities in terms of the Auditing Profession Act. We have reported such matters to the Independent Regulatory Board for Auditors. The matter pertaining to the reportable irregularities have been described in note 40 to the Financial Statements.

REPORT ON THE AUDIT OF THE ANNUAL PERFORMANCE REPORT

Introduction and Scope

17. In accordance with the Public Audit Act of South Africa, 2004 (Act No. 25 of 2004) (PAA) and the general notice issued in terms thereof we have a responsibility to report material findings on the reported performance information against predetermined objectives for selected programmes presented in the Annual Performance Report. We performed procedures to identify findings but not to gather evidence to express assurance.

18. Our procedures address the reported performance information, which must be based on the approved performance planning documents of the department. We have not evaluated the completeness and appropriateness of the performance indicators included in the planning documents. Our procedures also did not extend to any disclosures or assertions relating to planned performance strategies and information in respect of future periods that may be included as part of the reported performance information. Accordingly, our findings do not extend to these matters.

19. We evaluated the usefulness and reliability of the reported performance information in accordance with the criteria developed from the performance management and reporting framework, as defined in the general notice, for the following selected programmes presented in the Annual Performance Report of the National Health Laboratory Services for the year ended 31 March 2017:

Programme Pages in the annual performance report

Programme 4 – Academic Affairs, Research and Quality Assurance 36–38

Programme 5 – Laboratory Services 38–42

20. We performed procedures to determine whether the reported performance information was properly presented and whether performance was consistent with the approved performance planning documents. We performed further procedures to determine whether the indicators and related targets were measurable and relevant, and assessed the reliability of the reported performance information to determine whether it was valid, accurate and complete.

21. The material findings in respect of the usefulness and reliability of the selected programmes are as follows:

Programme 4: Academic Affairs, Research and Quality Assurance

Sub-programme: Academic Affairs

Indicator: Registrar pass rate

22. The reported achievement for registrar pass rate was misstated as the evidence provided indicated 25% and not 29% as reported.

23. Furthermore, the source information and method of calculation for the achievement of the planned indicator was not clearly defined, as required by the FMPPI.

Indicator: Medical Technologists pass rate



Indicator: Medical Technicians





Sub-programme: Research

Indicator: Research outputs submitted to influence policy

28. The source information and method of calculation for the achievement of the planned indicator was not clearly defined, as required by the FMPPI.

29. Furthermore, the systems and processes to enable reliable reporting of actual service delivery against the indicator were not adequately designed. There are no processes in place to ensure completeness of the amount reported in the APR as required by the FMPPI.

Indicator: Research translated into diagnostic practice

30. The systems and processes to enable reliable reporting of actual service delivery against the indicator were not adequately designed. There are no processes in place to ensure completeness of the amount reported in the APR as required by the FMPPI.

Indicator: % of personnel with library access and usage, electronic access coverage

31. We were unable to obtain sufficient appropriate audit evidence for the reported achievement of this target. This was due to a lack of technical indicator descriptions and proper performance management systems and processes and formal standard operating procedures that predetermined how the achievement would be measured, monitored and reported, as required by the Framework for managing programme performance information. We were unable to confirm that the reported achievement of this indicator was reliable by alternative means. Consequently, we were unable to determine whether any adjustments was required to the reported achievement of 70%.

Sub-programme: Quality Assurance

Indicator: % of laboratories accredited (National Central)


Indicator: % of laboratories accredited (Provincial Tertiary)


Indicator: % of laboratories accredited (Regional)


35. Furthermore, the reported achievement for % of laboratories accredited (Regional) was misstated as the evidence provided indicated 19% and not 11% as reported.

Programme 5: Laboratory Services

Sub-programme: Quality Service

Indicator: % of laboratories accredited (National Central)


Indicator: % of laboratories accredited (Provincial Tertiary)


Indicator: % of laboratories accredited (Regional)




39. Furthermore, the reported achievement for % of laboratories accredited (Regional) was misstated as the evidence provided indicated 19% and not 11% as reported.

Sub-programme: State of the art laboratories

Indicator: % of laboratories complying with minimum legal requirements (OSHACT)


Indicator: % of capital budget spent


Sub-programme: Productivity and Efficiency

Indicator: % of Pre-Analytical staff meeting the productivity targets (80 registration per 8 hour shift)


43. Furthermore, we were unable to obtain sufficient appropriate audit evidence for the reported achievement of this target. This was due to a lack of technical indicator descriptions and proper performance management systems and processes and formal standard operating procedures that predetermined how the achievement would be measured, monitored and reported, as required by the Framework for managing programme performance information. We were unable to confirm that the reported achievement of this indicator was reliable by alternative means. Consequently, we were unable to determine whether any adjustments were required to the reported achievement of 43%.

Indicator: % of provincial tertiary laboratories with pre-analytical automation


45. Furthermore, the reported achievement for % of provincial tertiary laboratories with pre-analytical automation was misstated as the evidence provided indicated 0% and not 6% as reported.

Other Matters

46. We draw attention to the matters below. Our opinions are not modified in respect of these matters.

Achievement of Planned Targets

47. Refer to the Annual Performance Report on pages 26 to 155; for information on the achievement of planned targets for the year and explanations provided for the under/over achievement of a significant number of targets. This information should be considered in the context of the material findings on the usefulness and reliability of the reported performance information in paragraph(s) 22 to 45 of this report.

REPORT ON THE AUDIT OF COMPLIANCE WITH LEGISLATION

Introduction and scope

48. In accordance with the PAA and the general notice issued in terms thereof we have a responsibility to report material findings on the compliance of the public entity with specific matters in key legislation. We performed procedures to identify findings but not to gather evidence to express assurance.

49. The material findings in respect of the compliance criteria for the applicable subject matters are as follows:



Annual Financial Statements

50. The Financial Statements submitted for auditing were not prepared in accordance with the prescribed financial reporting framework and supported by full and proper records as required by section 55(1) (a) and (b) of the Public Finance Management Act.

51. Material misstatements of non-current assets, current assets, current liabilities, other income, expenditure and disclosure items identified by the auditors in the submitted Financial Statements were subsequently corrected and the supporting records were provided subsequently.

Expenditure Management

52. Effective steps were not taken to prevent irregular expenditure amounting to R 1 019 billion as disclosed in note 36 to the Annual Financial Statements, as required by section 51(1)(b)(ii) of the PFMA. The full extent of the irregular expenditure could not be quantified as indicated in the basis for qualification paragraph.

Procurement and Contract Management

53. Goods and services of a transaction value above R500 000 were procured without inviting competitive bids, as required by Treasury Regulations 16A6.1. but by deviation process under catalogue suppliers. Deviations were approved by the Accounting Officer even though it was not impractical to invite competitive bids, in contravention of Treasury Regulation 16A6.4.

54. Sufficient appropriate audit evidence could not be obtained that catalogue suppliers utilised had submitted a declaration on whether they are employed by the state or connected to any person employed by the state, which is prescribed in order to comply with Treasury Regulation 16A8.3.

55. Sufficient appropriate audit evidence could not be obtained that catalogue suppliers tax matters have been declared by the South African Revenue Service to be in order as required by Treasury Regulations 16A9.1 (d) and the Preferential Procurement Regulations.

Other Information

56. The National Health Laboratory Service Accounting Authority is responsible for the other information. The other information comprises the information included in the Annual Report which includes the report of Accounting Authority, the report of the Audit and Risk Committee. The other information does not include the consolidated and separate Financial Statements, the auditor’s report thereon and those selected programmes presented in the Annual Performance Report that have been specifically reported on in the auditor’s report.

57. Our opinion the Financial Statements and findings on the reported performance information and compliance with legislation do not cover the other information and we do not express an audit opinion or any form of assurance conclusion thereon.

58. In connection with our audit, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated and separate Financial Statements and the selected programmes presented in the Annual Performance Report, or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, on the other information obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact.

Internal Control Deficiencies

59. We considered internal controls relevant to our audit of the consolidated and separate Financial Statements, reported performance information and compliance with legislation, however our objective was not to express any form of assurance thereon. The matters reported below are limited to the significant internal control deficiencies that resulted in the basis for qualified opinion, the findings on the Annual Performance Report and the findings on compliance with legislation included in this report.

Leadership

60. The public entity did not develop and implement proper performance planning and management practices to provide for the development of performance indicators and targets that follow the SMART principles as set out in the FMPPI.



Financial and Performance Management

61. The entity did not implement controls over the monthly processing and reconciling of transactions that led to the Financial Statements to be corrected. Material misstatements of non-current asset, current assets, current liabilities, other expenditure, income and disclosure items identified by the auditors in the submitted Financial Statements were subsequently corrected and the supporting records were provided subsequently resulting the Financial Statements receiving a modified audit opinion.

62. The entity did not prepare regular, accurate and complete financial and performance reports that are supported and evidenced by reliable information as the entity did not have an adequate system for identifying and recognising all irregular expenditure.

Other Reports

63. We draw attention to the following engagements conducted by various parties that have or could potentially have an impact on the matters reported on the National Health Laboratory Service financials performance and compliance related matters. The reports noted do not form part of our opinion on the Financial Statements or our findings on the reported performance information or compliance with legislation.

Investigations

64. An independent consultant investigated allegations of mismanagement and allegations of irregularities in the procurement and human resources environment as referred to in note 36 (C) to the consolidated and separate Financial Statements.

Agreed-upon Procedure Engagements

65. Five agreed-upon procedure engagements were performed solely to confirm that the donor funds have been utilised according to donor funding conditions.

SizweNtsalubaGobodo Inc.

Registered auditor

Per L Govender

Chartered Accountant CA (SA)

Director

Registered Auditor

31 July 2017

20 Morris East street, Woodmead



Statement of Financial Positionas at 31 March 2017

Economic entity Controlling entity

20172016

Restated* 20172016

Restated*Notes R’000 R’000 R’000 R’000

ASSETSCurrent AssetsInventories 2 116,843 104,218 112,557 100,306

Trade and other receivables 3 1,719,404 3,153,797 1,716,677 3,151,664

Receivables from non-exchange transactions 4 - 1,127 - 1,127

Cash and cash equivalents 5 391,976 738,975 389,919 736,393

2,228,223 3,998,117 2,219,153 3,989,490

Non-current AssetsProperty, plant and equipment 6 541,940 387,982 540,014 385,725

Intangible assets 8 109,840 113,537 109,840 113,537

651,780 501,519 649,854 499,262Total Assets 2,880,003 4,499,636 2,869,007 4,488,752

LIABILITIESCurrent LiabilitiesOther financial liabilities 9 45,747 41,991 45,747 41,991

Current tax payable 475 - - -

Finance lease obligation 10 13,310 - 13,310 -

Trade and other payables 11 973,326 872,176 971,963 870,940

Employee benefit obligation 12 23,556 21,003 23,556 21,003

Deferred income 13 12,252 4,137 12,252 4,137

Provisions 14 713,946 688,063 713,946 688,063

1,782,612 1,627,370 1,780,774 1,626,134

Non-current LiabilitiesOther financial liabilities 9 40,083 68,896 40,083 68,896

Finance lease obligation 10 68,241 - 68,241 -

Employee benefit obligation 12 999,123 933,220 999,123 933,220

1,107,447 1,002,116 1,107,447 1,002,116Total Liabilities 2,890,059 2,629,486 2,888,221 2,628,250Net Assets (10,056) 1,870,150 (19,214) 1,860,502Stated capital 15 332 332 332 332

Accumulated (deficit)/surplus (10,388) 1,869,818 (19,546) 1,860,170

Total Net Assets (10,056) 1,870,150 (19,214) 1,860,502

* See Note 35



Statement of Financial Performancefor the year ended 31 March 2017


20172016

Restated* 20172016


Revenue 18 7,094,905 6,442,194 7,072,370 6,422,137Cost of sales 19 (5,832,752) (4,839,648) (5,813,624) (4,824,775)Gross Surplus 1,262,153 1,602,546 1,258,746 1,597,362Other income 20 269,119 330,297 269,117 330,291Operating expenses (3,540,566) (1,853,153) (3,537,466) (1,847,753)Operating (Deficit)/Surplus 21 (2,009,294) 79,690 (2,009,603) 79,900Investment revenue 24 153,866 193,256 153,649 193,172Finance costs 25 (23,764) (184) (23,764) (147)(Deficit)/Surplus Before Taxation (1,879,192) 272,762 (1,879,718) 272,925Taxation 37 (1,018) - - -(Deficit)/Surplus for the Year (1,880,210) 272,762 (1,879,718) 272,925

* See Note 35



Statement of Changes in Net Assetsfor the year ended 31 March 2017

Stated capital

Accumulated (deficit)/surplus

Total net assets

R’000 R’000 R’000

ECONOMIC ENTITYOpening balance as previously reported 332 1,643,154 1,643,486AdjustmentsPrior year adjustments - (46,098) (46,098)Balance at 1 April 2015 as restated* 332 1,597,056 1,597,388Surplus for the year - 272,762 272,762Total changes - 272,762 272,762Balance at 01 April 2016 332 1,869,822 1,870,154Deficit for the year - (1,880,210) (1,880,210)Total changes - (1,880,210) (1,880,210)Balance at 31 March 2017 332 (10,388) (10,056)Note(s) 15

CONTROLLING ENTITYOpening balance as previously reported 332 1,633,278 1,633,610AdjustmentsPrior year adjustments - (46,033) (46,033)Balance at 1 April 2015 as restated* 332 1,587,245 1,587,577Surplus of the year - 272,925 272,925Total changes - 272,925 272,925Balance at 01 April 2016 332 1,860,172 1,860,504Deficit for the year - (1,879,718) (1,879,718)Total changes - (1,879,718) (1,879,718)Balance at 31 March 2017 332 (19,546) (19,214)Note(s) 15

* See Note 35



Statement of Cash Flowsfor the year ended 31 March 2017


20172016

Restated* 20172016


CASH FLOWS FROM OPERATING ACTIVITIESReceiptsSale of goods and services 6,379,636 5,736,077 6,357,101 5,716,077Grants 715,270 678,926 715,270 678,926Interest income 153,866 193,256 153,649 193,172

7,248,772 6,608,259 7,226,020 6,588,175

PaymentsEmployee costs (3,242,742) (2,531,903) (3,228,471) (2,499,145)Suppliers (4,082,245) (3,940,360) (4,073,921) (3,953,393)Finance costs (30) (184) (30) (147)Taxes on surpluses (543) - - -

(7,325,560) (6,472,447) (7,302,422) (6,452,685)Net Cash Flows from Operating Activities 27 (76,788) 135,812 (76,402) 135,490

CASH FLOWS FROM INVESTING ACTIVITIESPurchase of property, plant and equipment (177,551) (44,457) (177,412) (44,276)Proceeds from sale of property, plant and equipment - (186) - (186)Purchase of intangible assets 8 (35,568) (110,887) (35,568) (110,887)Proceeds from sale of other intangible assets 8 - 277 - 277Net Cash Flows from Investing Activities (213,119) (155,253) (212,980) (155,072)

CASH FLOWS FROM FINANCING ACTIVITIESProceeds from other financial liabilities - 107,250 - 107,250Repayment of other financial liabilities (55,741) - (55,741) -Finance lease payments (1,351) - (1,351) -Net Cash Flows from Financing Activities (57,092) 107,250 (57,092) 107,250

Net Increase/(Decrease) in Cash and Cash Equivalents (346,999) 87,809 (346,474) 87,668Cash and cash equivalents at the beginning of the year 738,975 651,166 736,393 648,725Cash and Cash Equivalents at the End of theYear 5 391,976 738,975 389,919 736,393

* See Note 35



Statement of Comparison of Budget and Actual Amountsfor the year ended 31 March 2017

Approved budget Adjustments Final budget

Actual amounts on comparable

basis

Difference between final

budget and actual

ReferenceBudget on Accrual Basis R’000 R’000 R’000 R’000 R’000

CONTROLLING ENTITY

Statement of Financial PerformanceRevenueRevenue from Exchange Transactions

Rendering of services 6,273,096 - 6,273,096 6,356,448 83,352 1Miscellaneous sales 6,816 - 6,816 652 (6,164)Fair value adjustments: Notional interest - - - 60,560 60,560Royalties received 80 - 80 253 173Discount received 1,200 - 1,200 1,378 178Recoveries 500 - 500 10,662 10,162Teaching income 56,260 - 56,260 18,461 (37,799) 2Sundry income (579) - (579) 17,808 18,387Grants income recognised - - - 149,376 149,376Interest received 42,602 - 42,602 153,649 111,047Total Revenue from Exchange Transactions 6,379,975 - 6,379,975 6,769,247 389,272

Revenue from non-exchange TransactionsTransfer Revenue

Government grants and subsidies 712,206 - 712,206 715,270 3,064Total revenue 7,092,181 - 7,092,181 7,484,517 392,336

Expenditure

Personnel (3,030,870) - (3,030,870) (3,228,470) (197,600) 3Depreciation and amortisation (83,659) - (83,659) (141,740) (58,081) 4Finance costs - - - (23,764) (23,764)Lease rentals on operating lease (58,503) - (58,503) (58,337) 166Debt impairment (40,564) - (40,564) (2,513,731) (2,473,167) 5Repairs and maintenance (320,210) - (320,210) (99,312) 220,898Sale of goods/inventory (874) - (874) (306) 568General expenses (3,304,012) - (3,304,012) (3,294,870) 9,142 6Total Expenditure (6,838,692) - (6,838,692) (9,360,530) (2,521,838) Operating (Deficit)/Surplus 253,489 - 253,489 (1,876,013) (2,129,502)Loss on disposal of assets and liabilities (218) - (218) (14,324) (14,106)Gain on foreign exchange - - - 10,619 10,619

(218) - (218) (3,705) (3,487)(Deficit)/Surplus for the year 253,271 - 253,271 (1,879,718) (2,132,989)Actual Amount on Comparable Basis as Presented in the Budget and Actual Comparative Statement 253,271 - 253,271 (1,879,718) (2,132,989)



VARIANCE ANALYSIS

1. The total revenue increased by 11% year-on-year from R6.4bn to R7.1bn. Upward volumes are driving the increase in turnover.

2. Teaching income variances have arisen due to a reversal of prior year overprovision of R27million. This was necessitated because of the use of an Educational Services Fee formula which uses actual data received from universities at the end of their academic year to calculate the amount of revenue generated for teaching services.

3. Personnel costs incurred during the 2016/17 financial year increased due to the 13th cheque of R116 million that became payable for the first time in December 2016. There was an overall increase in salaries of 26% which is mainly explained by the number of employees to support the increase in business.

4. Depreciation increase is mainly explained by an increased acquisition by laboratories following years of restricted capital expenditure.

5. The increase in debt provisions is mainly due to additional impairment of KZN provinsional debt.

6. General expenses relate to direct materials and other overheads whose increase is in line with increase in revenue as most of these are driven by test revenue volumes.



Accounting Policies

1. PRESENTATION OF THE ECONOMIC ENTITY FINANCIAL STATEMENTS

The Group Annual Financial Statements have been prepared in accordance with the effective Standards of Generally Recognised Accounting Practice (GRAP), as issued by the Accounting Standards Board (ASB). In the absence of a Standard of GRAP dealing with a particular transaction or event, the pronouncements of the following standard setters are used, in descending order, to develop an appropriate accounting policy:

a) International Public Sector Accounting Standards Board (IPSASB);

b) International Accounting Standards Board (IASB), including the Framework for the Preparation and Presentation of Financial Statements; or

c) Financial Reporting Standards Council (FRSC).

The Group Annual Financial Statements have been prepared using the accrual basis of accounting.

These Group Annual Financial Statements are presented in South African Rand, which is the economic entity’s functional currency. All financial information has been restated to the nearest thousand, except when otherwise stated.

A summary of the significant accounting policies, which have been consistently applied, are disclosed below.

1.1 Standards and Interpretations Effective and Adopted in the Current Year

The entity has adopted the following standards and interpretations that are effective for the current financial year and that are relevant to its operations:

GRAP 17 (as amended 2015): Property, Plant and Equipment

Based on the feedback received as part of the post-implementation review, the ASB agreed to reconsider certain principles in GRAP 16 and GRAP 17. In particular, it agreed to:

• Review the principles and explanations related to the distinction between investment property and property, plant and equipment;

• Consider whether an indicator-based assessment of the useful lives of assets could be introduced;

• Clarify the wording related to the use of external valuers;

• Introduce more specific presentation and disclosure requirements for capital work-in-progress;

• Review the encouraged disclosures and assess whether any should be made mandatory or deleted; and

• Require separate presentation of expenditure incurred on repairs and maintenance in the Financial Statements.

Amendments identified as part of the post-implementation review affected the following areas:

• Indicator-based assessment of the useful lives of assets;

• Use of external valuers;

• Encouraged disclosures;

• Capital work-in-progress; and

• Expenditure incurred on repairs and maintenance.

The effective date of the standard is for years beginning on or after 1 April 2016. The entity has adopted the standard for the first time in the 2017 Annual Financial Statements. The impact of the standard is not material.

1.2 Standards and Interpretations Issued, but not yet Effective

The entity has not applied the following standards and interpretations, which have been published and are mandatory for accounting periods beginning on or after 1 April 2017 or later. The list below does not include those standards that have no impact on the operations of the NHLS:



GRAP 20: Related Parties

The objective of this standard is to ensure that a reporting entity’s Annual Financial Statements contain the disclosures necessary to draw attention to the possibility that its financial position and surplus or deficit may have been affected by the existence of related parties and by transactions and outstanding balances with such parties.

An entity that prepares and presents financial statements under the accrual basis of accounting (in this standard referred to as the reporting entity) shall apply this standard in:

a) Identifying related party relationships and transactions;

b) Identifying outstanding balances, including commitments, between an entity and its related parties;

c) Identifying the circumstances in which disclosure of the items in (a) and (b) is required; and

d) Determining the disclosures to be made about those items.

This standard requires disclosure of related party relationships, transactions and outstanding balances, including commitments, in the consolidated and separate financial statements of the reporting entity in accordance with the Standard of GRAP on Consolidated and Separate Financial Statements. This standard also applies to individual Annual Financial Statements.

Disclosure of related party transactions, outstanding balances, including commitments, and relationships with related parties may affect users’ assessments of the financial position and performance of the reporting entity and its ability to deliver agreed services, including assessments of the risks and opportunities facing the entity. This disclosure also ensures that the reporting entity is transparent about its dealings with related parties.

The standard states that a related party is a person or an entity with the ability to control or jointly control the other party, or exercise significant influence over the other party, or vice versa, or an entity that is subject to common control, or joint control. As a minimum, the following are regarded as related parties of the reporting entity:

e) A person or a close member of that person’s family is related to the reporting entity if that person:

» Has control or joint control over the reporting entity;

» Has significant influence over the reporting entity;

» Is a member of the management of the entity or its controlling entity.

f ) An entity is related to the reporting entity if any of the following conditions apply:

» The entity is a member of the same economic entity (which means that each controlling entity, controlled entity and fellow controlled entity is related to the others);

» One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of an economic entity of which the other entity is a member);

» Both entities are joint ventures of the same third party;

» One entity is a joint venture of a third entity and the other entity is an associate of the third entity;

» The entity is a post-employment benefit plan for the benefit of employees of either the entity or an entity related to the entity. If the reporting entity is itself such a plan, the sponsoring employers are related to the entity;

» The entity is controlled or jointly controlled by a person identified in (a); and

» A person identified in (e) has significant influence over that entity or is a member of the management of that entity (or its controlling entity); and

g) The standard furthermore states that a related party transaction is a transfer of resources, services or obligations between the reporting entity and a related party, regardless of whether a price is charged.

The standard elaborates on the definitions and identification of:

h) A close member of the family of a person;

i) Management;

j) Related parties;

k) Remuneration; and

l) Significant influence.



The standard sets out the requirements, inter alia, for the disclosure of:

m) Control;

n) Related party transactions; and

o) Remuneration of management.

The effective date of the standard has not yet been set by the Minister of Finance. The entity expects to adopt the standard for the first time when the Minister sets the effective date. It is unlikely that the standard will have a material impact on the entity’s Annual Financial Statements.

GRAP 26 (as amended 2015): Impairment of Cash-generating Assets

The ASB agreed to include a research project on its work programme to review GRAP 21 and GRAP 26 to assess whether the principles in these standards could be simplified and streamlined. As part of its research project, the ASB considered the following aspects, which led to the proposed amendments included in its exposure draft:

• Simplifying the approach to impairment to make it clearer when an asset is cash generating or non-cash-generating;

• Assessing the feasibility of one measurement approach for non-cash-generating assets; and

• Assessing the feasibility of combining the two standards.

The changes to the Standard of GRAP on Impairment of Cash-generating Assets are outlined below:

General Definitions:

The definitions of cash-generating assets and cash-generating unit have been amended to be consistent with the amendments made to clarify the objective of cash-generating assets and non-cash-generating assets below.

Cash Generating Assets and Non-cash-generating Assets:

Additional commentary has been added to clarify the objective of cash-generating assets and non-cash-generating assets.

Disclosures:

The requirement to disclose the criteria developed to distinguish cash-generating assets from non-cash-generating assets has been amended to be consistent with the amendments made to clarify the objectives of non-cash-generating assets and cash-generating assets.

The effective date of the standard is for years beginning on or after 1 April 2017. The entity expects to adopt the standard for the first time in the 2018 Annual Financial Statements. It is unlikely that the standard will have a material impact on the entity’s Annual Financial Statements.

GRAP 21 (as amended 2015): Impairment of Non-cash-generating Assets

The ASB agreed to include a research project on its work programme to review GRAP 21 and GRAP 26 to assess whether the principles in these standards could be simplified and streamlined. As part of its research project, the ASB considered the following aspects which led to the proposed amendments included in this Exposure Draft:

• Simplifying the approach to impairment to make it clearer when an asset is cash generating or non-cash-generating;

• Assessing the feasibility of one measurement approach for non-cash-generating assets; and

• Assessing the feasibility of combining the two standards.

The changes to the Standard of GRAP on Impairment of Non-Cash-Generating Assets are outlined below:

General Definitions:

The definition of cash-generating assets has been amended to be consistent with the amendments made to clarify the objective of cash-generating assets and non-cash-generating assets.



Cash Generating Assets and Non-cash-generating Assets:

Additional commentary has been added to clarify the objective of cash-generating assets and non-cash-generating assets.

Identifying an Asset that may be Impaired:

Additional commentary has been added to clarify that physical damage triggers impairment of an asset when it results in a permanent or a significant decline in the potential of an asset.

Reversing an Impairment Loss:

An indicator has been added that the restoration of an asset’s service potential following physical damage to the asset could indicate a reversal in an impairment loss.

Additional commentary has been added to clarify that restoration of an asset’s service potential as a result of physical damage as an indication that an impairment loss recognised in prior periods may no longer exist or may have decreased.

Disclosures:

The requirement to disclose the criteria developed to distinguish non-cash-generating assets from cash-generating assets has been amended to be consistent with the amendments made to clarify the objective of non-cash-generating assets and cash-generating assets.

The effective date of the standard is for years beginning on or after 1 April 2017. The entity expects to adopt the standard for the first time in the 2018 Annual Financial Statements. It is unlikely that the standard will have a material impact on the entity’s Annual Financial Statements.

GRAP 18: Segment Reporting

Segments are identified by the way in which information is reported to Management, both for purposes of assessing performance and for making decisions about how future resources will be allocated to the various activities undertaken by the entity. The major classifications of activities identified in budget documentation will usually reflect the segments for which an entity reports information to Management.

Segment information is either presented based on service or geographical segments. Service segments relate to a distinguishable component of an entity that provides specific outputs or achieves particular operating objectives that are in line with the entity’s overall mission. Geographical segments relate to specific outputs generated, or particular objectives achieved, by an entity within a particular region.

This standard has been approved by the ASB but its effective date has not yet been determined by the Minister of Finance. The effective date indicated is a provisional date and could change depending on the decision of the Minister.

Directive 2 – Transitional provisions for public entities, municipal entities and constitutional institutions states that no comparative segment information need to be presented on initial adoption of this standard.

Directive 3 – Transitional provisions for high capacity municipalities states that no comparative segment information needs to be presented on initial adoption of the standard. Where items have not been recognised as a result of transitional provisions under the Standard of GRAP on Property, Plant and Equipment, recognition requirements of this standard would not apply to such items until the transitional provision in that standard expires.

Directive 4 – Transitional provisions for medium and low capacity municipalities states that no comparative segment information need to be presented on initial adoption of the standard. Where items have not been recognised as a result of transitional provisions under the Standard of GRAP on Property, Plant and Equipment and the Standard of GRAP on Agriculture, the recognition requirements of the standard would not apply to such items until the transitional provision in that standard expires.

The effective date of the standard is not yet set by the Minister of Finance. The entity expects to adopt the standard for the first time when the Minister sets the effective date. It is unlikely that the standard will have a material impact on the entity’s Annual Financial Statements.



1.3 Consolidation

Basis of Consolidation

The consolidated audited Group Annual Financial Statements are the audited Group Annual Financial Statements of the economic entity presented as those of a single entity.

The consolidated Group Annual Financial Statements incorporate the Annual Financial Statements of the National Health Laboratory Service (NHLS) as the controlling entity and those of the controlled entity, the South African Vaccine Producers (Pty) Ltd (SAVP).

The reporting date of the NHLS is the same as its controlled entity, SAVP.

Control exists when the controlling entity has the power to govern the financial and operating policies of another entity to obtain benefits from its activities.

The results of the controlled entity are included in the consolidated audited Group Annual Financial Statements from the effective date of acquisition or date when control commences to the effective date of disposal or date when control ceases.

All intra-entity transactions, balances, revenue and expenses are eliminated in full on consolidation.

1.4 Significant Judgments and Sources of Estimation Uncertainty

In preparing the audited Group Annual Financial Statements, management is required to make estimates and assumptions that affect the amounts represented in the audited Group Annual Financial Statements and related disclosures. Use of available information and the application of judgment is inherent in the formation of estimates. Actual results in the future could differ from these estimates, which may be material to the audited Group Annual Financial Statements. Significant judgments include:

Trade and Other Receivables

The economic entity assesses its trade receivables for impairment at the end of each reporting period. Detailed disclosure appears in note 3 to the Statement of Financial Position.

Allowance for Doubtful Debts

Impairment losses on trade and other receivables are recognised in surplus and deficit when there is objective evidence that it is impaired. The impairment is measured as the difference between the debtors carrying amount and the present value of estimated future cash flows discounted at the effective interest rate, computed at initial recognition. Detailed disclosure appears in note 3 to the Statement of Financial Position.

Allowance for Slow Moving, Damaged and Obsolete Stock

An allowance to write stock down to the lower of cost or net realisable value is made. The write-down is included in the inventory note 2 to the Statement of Financial Position.

Impairment Testing

The recoverable amounts of cash-generating units and individual assets have been determined based on the higher of value-in-use calculations and fair values less costs to sell. These calculations require the use of estimates and assumptions. It is reasonably possible that these assumption may change, which may impact our estimations and may require a material adjustment to the carrying value of tangible assets.

The economic entity reviews and tests the carrying value of assets when events or changes in circumstances suggest that the carrying amount may not be recoverable. Assets are grouped at the lowest level for which identifiable cash flows are largely independent of cash flows of other assets and liabilities. If there are indications that impairment may have occurred, estimates are prepared of expected future cash flows for each group of assets. Expected future cash flows used to determine the value in use of tangible assets are inherently uncertain and could materially change over time. They are significantly affected by a number of factors, including production estimates, together with economic factors such as exchange rates, inflation rates and interest rates.



Provisions

Provisions were raised and management determined an estimate based on the information available. Additional disclosure of these estimates of provisions are included in note 14 on provisions.

Useful Lives of Property, Plant and Equipment

The economic entity’s Management determines the estimated useful lives and related depreciation charges for property, plant and equipment. This estimate is based on industry norms. Management will increase the depreciation charge where useful lives are less than previously estimated.

Post-retirement Benefits

The present value of the post-retirement obligation depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost (income) include the discount rate. Any changes in these assumptions will impact on the carrying amount of post-retirement obligations.

The economic entity determines the appropriate discount rate at the end of each year. This is the interest rate that should be used to determine the present value of estimated future cash outflows expected to be required to settle the pension obligations. In determining the appropriate discount rate, the economic entity considers the interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating the terms of the related pension liability.

Other key assumptions for pension obligations are based on current market conditions. Additional information is disclosed in note 12.

1.5 Biological Assets

The economic entity recognises a biological asset when, and only when:

• The economic entity controls the asset as a result of past events;

• It is probable that future economic benefits or service potential associated with the asset will flow to the economic entity; and

• The fair value or cost of the asset can be measured reliably.

Biological assets are measured at their fair value less costs to sell. The fair value of livestock is determined based on market prices of livestock of similar age, breed, and genetic merit.

A gain or loss arising on initial recognition of biological assets at fair value less costs to sell and from a change in fair value less costs to sell of a biological assets is included in surplus or deficit for the period in which it arises.

Where market-determined prices or values are not available, the present value of the expected net cash inflows from the asset, discounted at a current market-determined pre-tax rate, where applicable, is used to determine fair value.

Where fair value cannot be measured reliably, biological assets are measured at cost less any accumulated depreciation and any accumulated impairment losses.

Depreciation is provided on biological assets where fair value cannot be determined, to write down the cost, less residual value, by equal installments over their useful lives as follows:

Item Useful lifeSheep 5 yearsHorses 15 years

1.6 Property, Plant and Equipment

Property, plant and equipment are tangible, non-current assets (including infrastructure assets) that are held for use in the production or supply of goods or services, rental to others, or for administrative purposes, and are expected to be used during more than one period.

The cost of an item of property, plant and equipment is recognised as an asset when:

• It is probable that future economic benefits or service potential associated with the item will flow to the economic entity; and

• The cost of the item can be measured reliably.



Property, plant and equipment is initially measured at cost. The cost of an item of property, plant and equipment is the purchase price and other costs attributable to bring the asset to the location and condition necessary for it to be capable of operating in the manner intended by Management. Trade discounts and rebates are deducted in arriving at the cost.

Where an asset is acquired through a non-exchange transaction, its cost is its fair value as at date of acquisition. Where an item of property, plant and equipment is acquired in exchange for a non-monetary asset or monetary assets, or a combination of monetary and non-monetary assets, the asset acquired is initially measured at fair value (the cost). If the acquired item’s fair value was not determinable, its deemed cost is the carrying amount of the asset(s) given up.

When significant components of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to, replace part of, or service it. If a replacement cost is recognised in the carrying amount of an item of property, plant and equipment, the carrying amount of the replaced part is derecognised.

The initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located is also included in the cost of property, plant and equipment, where the entity is obligated to incur such expenditure, and where the obligation arises as a result of acquiring the asset or using it for purposes other than the production of inventories.

Recognition of costs in the carrying amount of an item of property, plant and equipment ceases when the item is in the location and condition necessary for it to be capable of operating in the manner intended by Management.

Major inspection costs, which are a condition of continuing use of an item of property, plant and equipment and which meet the recognition criteria above, are included as a replacement in the cost of the item of property, plant and equipment. Any remaining inspection costs from the previous inspection are derecognised.

Property, plant and equipment is carried at cost less accumulated depreciation and any impairment losses.

Property, plant and equipment are depreciated on the straight-line basis over their expected useful lives to their estimated residual value.

The useful lives of items of property, plant and equipment have been assessed as follows:

Item Depreciation method Average useful lifeBuildings Straight-line 5 – 50 yearsMobile units Straight-line 6 – 10 yearsPlant and machinery Straight-line 5 yearsFurniture and fixtures Straight-line 10 – 20 yearsMotor vehicles Straight-line 5 yearsOffice equipment Straight-line 3 – 10 yearsComputer equipment Straight-line 3 – 5 yearsLaboratory equipment Straight-line 4 – 10 years

The depreciable amount of an asset is allocated on a systematic basis over its useful life.

Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately.

The depreciation method used reflects the pattern in which the asset’s future economic benefits or service potential are expected to be consumed by the economic entity. The depreciation method applied to an asset is reviewed at least at each reporting date and, if there has been a significant change in the expected pattern of consumption of the future economic benefits or service potential embodied in the asset, the method is changed to reflect the changed pattern. Such a change is accounted for as a change in an accounting estimate.

The economic entity assesses at each reporting date whether there is any indication that the economic entity’s expectations about the residual value and useful life of an asset have changed since the preceding reporting date. If any such indication exists, the economic entity revises the expected useful life and/or residual value accordingly. The change is accounted for as a change in an accounting estimate.

The depreciation charge for each period is recognised in surplus or deficit, unless it is included in the carrying amount of another asset.



Items of property, plant and equipment are derecognised when the asset is disposed of or when there are no further economic benefits or service potential expected from the use of the asset.

The gain or loss arising from the derecognition of an item of property, plant and equipment is included in surplus or deficit when the item is derecognised. The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item.

Assets which the economic entity holds for rentals to others and subsequently routinely sell as part of the ordinary course of activities, are transferred to inventories when the rentals end and the assets are available-for-sale. Proceeds from sales of these assets are recognised as revenue. All cash flows on these assets are included in cash flows from operating activities in the Statement of Cash Flows.

1.7 Intangible Assets

An intangible asset is identifiable if it either:

• Is separable, i.e. is capable of being separated or divided from an entity and sold, transferred, licensed, rented or exchanged, either individually or together with a related contract, identifiable assets or liability, regardless of whether the entity intends to do so; or

• Arises from binding arrangements (including rights from contracts), regardless of whether those rights are transferable or separable from the economic entity or from other rights and obligations.

A binding arrangement describes an arrangement that confers similar rights and obligations on the parties to it as if it were in the form of a contract.

An intangible asset is recognised when:

• It is probable that the expected future economic benefits or service potential that are attributable to the asset will flow to the economic entity; and

• The cost or fair value of the asset can be measured reliably.

The economic entity assesses the probability of expected future economic benefits or service potential using reasonable and supportable assumptions that represent Management’s best estimate of the set of economic conditions that will exist over the useful life of the asset.

Where an intangible asset is acquired through a non-exchange transaction, its initial cost at the date of acquisition is measured at its fair value as at that date.

Expenditure on research (or on the research phase of an internal project) is recognised as an expense when it is incurred.

An intangible asset arising from development (or from the development phase of an internal project) is recognised when:

• It is technically feasible to complete the asset so that it will be available for use or sale;

• There is an intention to complete and use or sell it;

• There is an ability to use or sell it;

• It will generate probable future economic benefits or service potential;

• There are available technical, financial and other resources to complete the development and to use or sell the asset; or

• The expenditure attributable to the asset during its development can be measured reliably.

Intangible assets are carried at cost less any accumulated amortisation and any impairment losses.

An intangible asset is regarded as having an indefinite useful life when, based on all relevant factors, there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows or service potential. Amortisation is not provided for these intangible assets, but they are tested for impairment annually and whenever there is an indication that the asset may be impaired. For all other intangible assets amortisation is provided on a straight-line basis over their useful life.



The amortisation period and amortisation method for intangible assets are reviewed at each reporting date. Reassessing the useful life of an intangible asset with a finite useful life after it was classified as indefinite is an indicator that the asset may be impaired. As a result the asset is tested for impairment and the remaining carrying amount is amortised over its useful life.

Internally generated brands, mastheads, publishing titles, customer lists and items similar in substance are not recognised as intangible assets.

Amortisation is provided to write down the intangible assets on a straight-line basis to their residual values as follows:

Item Useful lifePatents, trademarks and other rights 20 yearsComputer software, internally generated 5 – 10 years

Intangible assets are derecognised:

• On disposal; or

• When no future economic benefits or service potential are expected from its use or disposal.

The gain or loss arising from the derecognition of an intangible assets is included in surplus or deficit when the asset is derecognised (unless the Standard of GRAP on Leases requires otherwise on a sale and leaseback).

1.8 Investments

Controlling Entity Audited Group Annual Financial Statements

In the entity’s separate audited Group Annual Financial Statements, investments are carried at cost less any accumulated impairment.

The entity applies the same accounting for each category of investment. The entity recognises a dividend or similar distribution in surplus or deficit in its separate audited Group Annual Financial Statements when its right to receive the dividend or similar distribution is established.

Investments in a controlled entity that are accounted for in accordance with the accounting policy on financial instruments in the consolidated audited Group Annual Financial Statements, are accounted for in the same way in the controlling entity’s separate audited Group Annual Financial Statements.

1.9 Financial Instruments

Classification

Classification depends on the purpose for which the financial instruments were obtained/incurred and takes place at initial recognition. Classification is re-assessed on an annual basis, except for derivatives and financial assets designated as at fair value through surplus or deficit, which shall not be classified out of the fair value through surplus or deficit category.

Initial Recognition and Measurement

Financial instruments are initially recognised when the economic entity becomes a party to the contractual provisions of the instruments.

The economic entity classifies financial instruments, or their component parts, on initial recognition as a financial asset or financial liability in accordance with the substance of the contractual arrangement.

For financial instruments which are not at fair value through surplus or deficit, transaction costs are included in the initial measurement of the instrument.

Subsequent Measurement

Financial liabilities at amortised cost are subsequently measured at amortised cost, using the effective interest method.

Impairment of Financial Assets

At each end of the reporting period, the economic entity assesses all financial assets, other than those at fair value through surplus or deficit, to determine whether there is objective evidence that a financial asset or group of financial assets has been impaired.



For amounts due to the economic entity, significant financial difficulties of the debtor, or the probability that the debtor will enter bankruptcy and the default of payments are all considered indicators of impairment.

Impairment losses are recognised in surplus or deficit. Impairment losses are reversed when an increase in the financial asset’s recoverable amount can be related objectively to an event occurring after the impairment was recognised, subject to the restriction that the carrying amount of the financial asset at the date that the impairment is reversed shall not exceed what the carrying amount would have been had the impairment not been recognised.

Where financial assets are impaired through use of an allowance account, the amount of the loss is recognised in surplus or deficit within operating expenses. When such assets are written off, the write-off is made against the relevant allowance account. Subsequent recoveries of amounts previously written off are credited against operating expenses.

Loans to/(from) to Economic Entities

These include a loan to and from the controlling entity and controlled entity , that are recognised initially at fair value plus direct transaction cost. Loans from the economic entity are classified as financial liabilities measured at amortised cost. Loans from economic entities are classified as financial liabilities measured at amortised cost.

Receivables from Exchange Transactions

Trade receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for debt for estimated irrecoverable amounts are recognised in surplus or deficit when there is objective evidence that the asset is impaired. Significant financial difficulties of the debtor, the probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 30 days overdue) are considered indicators that the trade receivable is impaired. The allowance recognised is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.

The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the deficit is recognised in surplus or deficit within operating expenses. When a trade receivable is uncollectible, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against operating expenses in surplus or deficit.

Payables from Exchange Transactions

Trade payables are initially measured at fair value, and are subsequently measured at amortised cost using the effective interest rate method.

Cash and Cash Equivalents

Cash and cash equivalents comprise cash on-hand and demand deposits, and other short-term, highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These are initially measured at fair value and subsequently recognised at amortised cost.

1.10 Leases

A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership.

Finance Leases – Lessee

Finance leases are recognised as assets and liabilities in the Statement of Financial Position at amounts equal to the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding liability to the lessor is included in the Statement of Financial Position as a finance lease obligation.

The discount rate used in calculating the present value of the minimum lease payments is the entity’s incremental borrowing rate.

Minimum lease payments are apportioned between the finance charge and reduction of the outstanding liability. The finance charge is allocated to each period during the lease term to produce a constant periodic rate on the remaining balance of the liability.

Operating Leases – Lessee

Operating lease payments are recognised as an expense on a straight-line basis over the lease term. The difference between the amounts recognised as an expense and the contractual payments are recognised as an operating lease asset or liability. Any contingent rents are expensed in the period in which they are incurred.



1.11 Inventories

Inventories are initially measured at cost, except where they are acquired through a non-exchange transaction, then their costs are their fair value as at the date of acquisition. Subsequently, inventories are measured at the lower of cost and net realisable value.

Inventories are measured at the lower of cost and current replacement cost where they are held for:

• Distribution at no charge or for a nominal charge; or

• Consumption in the production process of goods to be distributed at no charge or for a nominal charge.

Net realisable value is the estimated selling price in the ordinary course of operations, less the estimated costs of completion and the estimated costs necessary to make the sale, exchange or distribution.

Current replacement cost is the cost the economic entity incurs to acquire the asset on the reporting date.

The cost of inventories comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

The cost of inventories of items that are not ordinarily interchangeable and goods or services produced and segregated for specific projects is assigned using specific identification of the individual costs.

The cost of inventories is assigned using the weighted average cost formula. The same cost formula is used for all inventories having a similar nature and use to the economic entity.

When inventories are consumed, the carrying amounts of those inventories are recognised as an expense in the period in which the related revenue is recognised. If there is no related revenue, the expenses are recognised when the goods are distributed, or related services are rendered. The amount of any write-down of inventories to net realisable value or current replacement cost and all losses of inventories are recognised as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories arising from an increase in net realisable value or current replacement cost, are recognised as a reduction in the amount of inventories recognised as an expense in the period in which the reversal occurs.

1.12 Impairment of Cash-generating Assets

Cash-generating assets are assets managed with the objective of generating a commercial return. An asset generates a commercial return when it is deployed in a manner consistent with that adopted by a profit-orientated entity.

Impairment is a loss in the future economic benefits or service potential of an asset, over and above the systematic recognition of the loss of the asset’s future economic benefits or service potential through depreciation (amortisation).

Carrying amount is the amount at which an asset is recognised in the Statement of Financial Position after deducting any accumulated depreciation and accumulated impairment losses thereon.

A cash-generating unit is the smallest identifiable group of assets managed with the objective of generating a commercial return that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets or groups of assets.

Fair value less costs to sell is the amount obtainable from the sale of an asset in an arm’s length transaction between knowledgeable, willing parties, less the costs of disposal.

Recoverable amount of an asset or a cash-generating unit is the higher its fair value less costs to sell and its value in use.

1.13 Impairment of Non-cash-generating Assets

Cash-generating assets are assets managed with the objective of generating a commercial return. An asset generates a commercial return when it is deployed in a manner consistent with that adopted by a profit-orientated entity. Non-cash-generating assets are assets other than cash-generating assets.



Impairment is a loss in the future economic benefits or service potential of an asset, over and above the systematic recognition of the loss of the asset’s future economic benefits or service potential through depreciation (amortisation).

Carrying amount is the amount at which an asset is recognised in the Statement of Financial Position after deducting any accumulated depreciation and accumulated impairment losses thereon.

Costs of disposal are incremental costs directly attributable to the disposal of an asset, excluding finance costs and income tax expense.

Depreciation/(Amortisation) is the systematic allocation of the depreciable amount of an asset over its useful life.

Fair value less costs to sell is the amount obtainable from the sale of an asset in an arm’s length transaction between knowledgeable, willing parties, less the costs of disposal.

Recoverable service amount is the higher of a non-cash-generating asset’s fair value less costs to sell and its value in use.

Useful life is either:

(a) The period of time over which an asset is expected to be used by the economic entity; or

(b) The number of production or similar units expected to be obtained from the asset by the economic entity.

Identification

When the carrying amount of a non-cash-generating asset exceeds its recoverable service amount, it is impaired.

The economic entity assesses at each reporting date whether there is any indication that a non-cash-generating asset may be impaired. If any such indication exists, the economic entity estimates the recoverable service amount of the asset.

Irrespective of whether there is any indication of impairment, the entity also test a non-cash-generating intangible asset with an indefinite useful life or a non-cash-generating intangible asset not yet available for use for impairment annually by comparing its carrying amount with its recoverable service amount. This impairment test is performed at the same time every year. If an intangible asset was initially recognised during the current reporting period, that intangible asset was tested for impairment before the end of the current reporting period.

Value in Use

Value in use of non-cash-generating assets is the present value of the non-cash-generating asset’s remaining service potential.

Recognition and Measurement

If the recoverable service amount of a non-cash-generating asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable service amount. This reduction is an impairment loss.

An impairment loss is recognised immediately in surplus or deficit, and any impairment loss of a revalued non-cash-generating asset is treated as a revaluation decrease. When the amount estimated for an impairment loss is greater than the carrying amount of the non-cash-generating asset to which it relates, the economic entity recognises a liability only to the extent that is a requirement in the Standards of GRAP.

After the recognition of an impairment loss, the depreciation (amortisation) charge for the non-cash-generating asset is adjusted in future periods to allocate the non-cash-generating asset’s revised carrying amount, less its residual value (if any), on a systematic basis over its remaining useful life.

1.14 Stated Capital

An equity instrument is any contract that evidences a residual interest in the assets of an economic entity after deducting all of its liabilities.

Ordinary shares are classified as equity. Stated capital is carried at par value.



1.15 Employee Benefits

Short-term Employee Benefits

The cost of short-term employee benefits (those payable within 12 months after the service is rendered, such as paid vacation leave, sick leave, bonuses, and non-monetary benefits such as medical care) are recognised in the period in which the service is rendered and are not discounted.

The expected cost of compensated absences is recognised as an expense as the employees render services that increase their entitlement or, in the case of non-accumulating absences, when the absence occurs.

The expected cost of surplus sharing and bonus payments is recognised as an expense when there is a legal or constructive obligation to make such payments as a result of past performance.

Recognition and Measurement

When an employee has rendered a service to an entity during an accounting period, the entity shall recognise the undiscounted amount of short-term employee benefits expected to be paid in exchange for that service:

• As a liability (accrued expense) after deducting any amount already paid. If the amount already paid exceeds the undiscounted amount of the benefits, an entity shall recognise that excess as an asset (prepaid expense) to the extent that the prepayment will lead to, for example, a reduction in future payments or a cash refund; and

• As an expense, unless another standard requires or permits the inclusion of the benefits in the cost of an asset.

Defined Contribution Plans

Payments to defined contribution retirement benefit plans are charged as an expense as they fall due.

Payments made to industry-managed (or state plans) retirement benefit schemes are dealt with as defined contribution plans where the entity’s obligation under the schemes is equivalent to those arising in a defined contribution retirement benefit plan.

Defined Benefit Plans

For defined benefit plans the cost of providing the benefits is determined using the projected credit method.

Actuarial valuations are conducted on an annual basis by independent actuaries separately for each plan.

Consideration is given to any event that could impact the funds up to end of the reporting period where the interim valuation is performed at an earlier date.

Past service costs are recognised immediately to the extent that the benefits are already vested, and are otherwise amortised on a straight-line basis over the average period until the amended benefits become vested.

Gains or losses on the curtailment or settlement of a defined benefit plan is recognised when the entity is demonstrably committed to curtailment or settlement.

When it is virtually certain that another party will reimburse some or all of the expenditure required to settle a defined benefit obligation, the right to reimbursement is recognised as a separate asset. The asset is measured at fair value. In all other respects, the asset is treated in the same way as plan assets. In surplus or deficit, the expense relating to a defined benefit plan is presented as the net of the amount recognised for a reimbursement.

The amount recognised in the Statement of Financial Position represents the present value of the defined benefit obligation as adjusted for unrecognised actuarial gains and losses and unrecognised past service costs.

Any asset is limited to unrecognised actuarial losses and past service costs, plus the present value of available refunds and reduction in future contributions to the plan.



Other Post-retirement Obligations

The economic entity provides post-retirement healthcare benefits to some retirees. The entitlement to post-retirement healthcare benefits is based on the employee remaining in service up to retirement age and the completion of a minimum service period. The expected costs of these benefits are accrued over the period of employment. Independent qualified actuaries carry out valuations of these obligations.

1.16 Provisions and Contingencies

Provisions are recognised when:

• The economic entity has a present obligation as a result of a past event;

• It is probable that an outflow of resources embodying economic benefits or service potential will be required to settle the obligation; and

• A reliable estimate can be made of the obligation.

The amount of a provision is the best estimate of the expenditure expected to be required to settle the present obligation at the reporting date.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. Provisions are reversed if it is no longer probable that an outflow of resources embodying economic benefits or service potential will be required to settle the obligation.

A provision is used only for expenditures for which the provision was originally recognised. Provisions are not recognised for future operating deficits. If an entity has a contract that is onerous, the present obligation (net of recoveries) under the contract is recognised and measured as a provision.

Contingent assets and contingent liabilities are not recognised. Contingencies are disclosed in note 29.

1.17 Commitments

Items are classified as commitments when an entity has committed itself to future transactions that will normally result in the outflow of cash.

Disclosures are required in respect of unrecognised contractual commitments.

Commitments for which disclosure is necessary to achieve a fair presentation should be disclosed in a note to the financial statements, if both the following criteria are met:

• Contracts should be non-cancelable or only cancelable at significant cost (for example, contracts for computer or building maintenance services); and

• Contracts should relate to something other than the routine, steady, stated business of the entity – therefore salary commitments relating to employment contracts or social security benefit commitments are excluded.

1.18 Revenue from Exchange Transactions

Revenue is the gross inflow of economic benefits or service potential during the reporting period when those inflows result in an increase in net assets, other than increases relating to contributions from owners.

An exchange transaction is one in which the entity receives assets or services, or has liabilities extinguished, and directly gives approximately equal value (primarily in the form of goods, services or use of assets) to the other party in exchange.

Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.

Measurement

Revenue is measured at the fair value of the consideration received or receivable, net of trade discounts.



Sale of Goods

Revenue from the sale of goods is recognised when all the following conditions have been satisfied:

• The economic entity has transferred to the purchaser the significant risks and rewards of ownership of the goods;

• The economic entity retains neither continuing managerial involvement to the degree usually associated with ownership, nor effective control over the goods sold;

• The amount of revenue can be measured reliably;

• It is probable that the economic benefits or service potential associated with the transaction will flow to the economic entity; and

• The costs incurred or to be incurred in respect of the transaction can be measured reliably.

Rendering of Services

When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with the transaction is recognised by reference to the stage of completion of the transaction at the reporting date. The outcome of a transaction can be estimated reliably when all the following conditions are satisfied:

• The amount of revenue can be measured reliably;

• It is probable that the economic benefits or service potential associated with the transaction will flow to the economic entity;

• The stage of completion of the transaction at the reporting date can be measured reliably; and

• The costs incurred for the transaction and the costs to complete the transaction can be measured reliably.

When services are performed by an indeterminate number of acts over a specified timeframe, revenue is recognised on a straight-line basis over the specified timeframe, unless there is evidence that some other method better represents the stage of completion. When a specific act is much more significant than any other acts, the recognition of revenue is postponed until the significant act is executed.

When the outcome of the transaction involving the rendering of services cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.

Service revenue is recognised by reference to the stage of completion of the transaction at the reporting date. Stage of completion is determined by the proportion that costs incurred to date bear to the total estimated costs of the transaction.

Interest and Royalties

Revenue arising from the use by others of entity assets yielding interest and royalties is recognised when:

• It is probable that the economic benefits or service potential associated with the transaction will flow to the entity, and

• The amount of the revenue can be measured reliably.

Interest is recognised in surplus or deficit using the effective interest rate method.

Interest income is accrued on a time-proportion basis, taking in to account the principal outstanding and the effective interest rate over the period to maturity. Interest is received for designated, specific research purposes from contracts, grants and donations. In all cases such income is recognised in the Statement of Financial Performance in the financial period in which the company becomes entitled to the use of such funds.

Royalties are recognised as they are earned in accordance with the substance of the relevant agreements.

Service fees included in the price of the product are recognised as revenue over the period during which the service is performed.

1.19 Revenue from Non-exchange Transactions

Revenue comprises gross inflows of economic benefits or service potential received and receivable by an entity, which represents an increase in net assets, other than increases relating to contributions from owners.

Conditions on transferred assets are stipulations that specify that the future economic benefits or service potential embodied in the asset is required to be consumed by the recipient as specified, or future economic benefits or service potential must be returned to the transferor.



Control of an asset arises when the entity can use or otherwise benefit from the asset in pursuit of its objectives and can exclude or otherwise regulate the access of others to that benefit.

Exchange transactions are transactions in which one entity receives assets or services, or has liabilities extinguished, and directly gives approximately equal value (primarily in the form of cash, goods, services, or use of assets) to another entity in exchange.

Non-exchange transactions are transactions that are not exchange transactions. In a non-exchange transaction, an entity either receives value from another entity without directly giving approximately equal value in exchange, or gives value to another entity without directly receiving approximately equal value in exchange.

Restrictions on transferred assets are stipulations that limit or direct the purposes for which a transferred asset may be used, but do not specify that future economic benefits or service potential is required to be returned to the transferor if not deployed as specified.

Stipulations on transferred assets are terms in laws or regulations, or a binding arrangement, imposed upon the use of a transferred asset by entities external to the reporting entity.

Transfers are inflows of future economic benefits or service potential from non-exchange transactions, other than taxes.

Recognition

An inflow of resources from a non-exchange transaction recognised as an asset is recognised as revenue, except to the extent that a liability is also recognised in respect of the same inflow.

As the entity satisfies a present obligation recognised as a liability in respect of an inflow of resources from a non-exchange transaction recognised as an asset, it reduces the carrying amount of the liability recognised and recognises an amount of revenue equal to that reduction.

Measurement

Revenue from a non-exchange transaction is measured at the amount of the increase in net assets recognised by the entity.

When, as a result of a non-exchange transaction, the entity recognises an asset, it also recognises revenue equivalent to the amount of the asset measured at its fair value as at the date of acquisition, unless it is also required to recognise a liability. Where a liability is required to be recognised, it will be measured as the best estimate of the amount required to settle the obligation at the reporting date, and the amount of the increase in net assets, if any, recognised as revenue. When a liability is subsequently reduced, because a taxable event occurs or a condition is satisfied, the amount of the reduction in the liability is recognised as revenue.

1.20 Investment Income

Investment income is accrued on a time-proportion basis, taking into account the principal outstanding and the effective interest rate over the period to maturity. Interest is also received for designated, specific research purposes from contracts, grants and donations. In all cases such income is recognised in the Statement of Financial Performance in the financial period in which the company becomes entitled to the use of such funds.

1.21 Irregular Expenditure

Irregular expenditure is recognised as expenditure in the Statement of Financial Performance. If the expenditure is not condoned by the relevant authority, it is treated as an asset until it is recovered or written off as irrecoverable.

1.22 Conditional Grants and Receipts

Revenue received from conditional grants, donations and funding are recognised as revenue to the extent that the entity has complied with any of the criteria, conditions or obligations embodied in the agreement. Should the criteria, conditions or obligations have not been met, a liability is recognised to that extant.



1.23 Budget Information

General purpose financial reporting by the economic entity shall provide information on whether resources were obtained and used in accordance with the legally adopted budget.

The approved budget is prepared on an accrual basis and presented by functional classification linked to performance outcome objectives.

The approved budget covers the fiscal period from 1 April 2016 to 31 March 2017. The budget for the economic entity includes all the approved budgets of the entities under its control.

The unaudited Group Annual Financial Statements and the budget are prepared on the same basis of accounting, therefore a comparison with the budgeted amounts for the reporting period have been included in the Statement of Comparison of Budget and Actual Amounts.

The Statement of Comparative and Actual Information has been included in the audited Group Annual Financial Statements as the recommended disclosure when the audited Group Annual Financial Statements and the budget are prepared on the same basis of accounting, as determined by the National Treasury.

1.24 Sundry Income

Teaching Income

Teaching income is recognised on the accrual basis. This policy decision is attributable to the uncertainty associated with the flow of economic benefits arising from teaching-related transactions to the entity. The management decision taken complies with the requirements of the statement on revenue recognition.

Miscellaneous Sales

Miscellaneous sales are generated when the NHLS recovers funds for rental lease agreements and other charges which need to be recovered from the use of its own facilities, such as those used by Contract Laboratory Services.

1.25 Related Parties

Parties are considered to be related if one party has the ability to control the other party, or to exercise significant influence over the other party in making financial and operating decisions, or if the related party entity and another entity are subject to common control. Related parties include:

a) Entities that directly, or indirectly through one or more intermediaries, control, or are controlled by the reporting entity;

b) Key management personnel, and close members of the family of key management personnel.

A related party transaction is a transfer of resources, services or obligations between a reporting entity and a related party, regardless of whether a price is charged. Related party transactions exclude transactions with any other entity that is a related party solely because of its economic dependence on the reporting entity.

Related party transactions and outstanding balances or commitments owing between the reporting entity and related parties are disclosed in note 30 to the Financial Statements. Remuneration of key Management Personnel is disclosed in note 34.



Notes to the Audited Group Annual Financial Statementsfor the year ended 31 March 2017

2. INVENTORIES


2017 2016 2017 2016R’000 R’000 R’000 R’000

Raw materials, components 71 238 - -Work in progress 3,092 3,199 - -Finished goods 1,127 479 - -Consumable stores 112,553 112,184 112,557 112,188

116,843 116,100 112,557 112,188Inventories (write-downs) - (11,882) - (11,882)

116,843 104,218 112,557 100,306

Inventory write-downs comprised provisions for obsolete stock aged three months and older. During the current year, the assessment of inventory for impairment did not result in any write-downs.

3. TRADE AND OTHER RECEIVABLES


2017 2016 2017 2016R’000 R’000 R’000 R’000

Trade debtors 6,280,497 5,436,883 6,277,770 5,434,750Pre-payments 898 2,623 898 2,623Other receivables 42,487 106,800 42,487 106,800Less: Provisions for impairment (4,682,645) (2,474,735) (4,682,645) (2,474,735)Teaching services 78,167 82,226 78,167 82,226

1,719,404 3,153,797 1,716,677 3,151,664

Fair Value of Receivables from Exchange Transactions

The Accounting Authority considers that the carrying amount of trade and other receivables approximates to their fair value.

The NHLS raises a doubtful debt provisions on private debtors (Medical Aid debtors and individual patients who are covered by Medical Aid).

Trade receivables from Exchange Transactions Past Due but not Impaired

Trade and other receivables for the economic entity which are past due but not impaired as at 31 March 2017, are R1.544 million (2016: R422 million).

The ageing of amounts past due but not impaired is as follows:


2017 2016 2017 2016R’000 R’000 R’000 R’000

One month past due 619,134 170,856 619,134 170,856Two months past due 503,325 133,517 503,325 133,517Three months past due 421,389 117,666 421,389 117,666

1,543,848 422,039 1,543,848 422,039



Outstanding Debt from KwaZulu-Natal Department of Health

Following the audit from the Office of the Accountant General an amount of R2.8bn relating to pathology services rendered to KZN DoH was queried for the period from 01 March 2010 to 31 March 2014. R1.8bn has been confirmed as payable by the Office of the Accountant General . Discussions regarding payment arrangements are currently underway.

Reconciliation of Provision for Impairment of Trade and Other Receivables


2017 2016 2017 2016R’000 R’000 R’000 R’000

Opening balance 2,474,735 2,697,325 2,474,735 2,697,325Provision for doubtful debt 2,370,014 397,369 2,370,014 397,369Amounts written off as uncollectible (307,201) (771,339) (307,201) (771,339)Provision for debtors interest 145,166 151,311 145,166 151,311Provision for credit notes (69) 69 (69) 69

4,682,645 2,474,735 4,682,645 2,474,735

The creation and release of provision for impaired receivables have been included in operating expenses. Amounts charged to the allowance account are generally written off when there is no expectation of recovering additional cash.

4. RECEIVABLES FROM NON-EXCHANGE TRANSACTIONS


2017 2016 2017 2016R’000 R’000 R’000 R’000

Government grants and subsidies - 1,127 - 1,127

5. CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of:


2017 2016 2017 2016R’000 R’000 R’000 R’000

Cash on hand 446 28 431 28Bank balances 32,239 14,198 32,107 13,878Short-term deposits 359,291 724,749 357,381 722,487

391,976 738,975 389,919 736,393

Cash and cash equivalents held by the NHLS that are not available for use by the NHLS 58,352 168,219 56,310 165,637

Credit Quality of Cash at Bank and Short-term Deposits, Excluding Cash on Hand

The interest earned on cash at bank and short-term deposits was on average 6.69% (2016: 5.65%) per annum and these deposits had an average maturity of 30 days.



6. PROPERTY, PLANT AND EQUIPMENT

Economic Entity

2017 2016

Cost/Valuation

Accumulated depreciation

and accumulated impairment

Carrying value Cost



Carrying value

R’000 R’000 R’000 R’000 R’000 R’000

Land 3,208 - 3,208 3,208 - 3,208Leasehold improvements 109,649 (45,403) 64,246 128,508 (54,541) 73,967Plant and machinery 5,737 (5,636) 101 5,686 (5,671) 15Furniture and fixtures 11,755 (7,987) 3,768 15,083 (12,464) 2,619Motor vehicles 93,473 (14,181) 79,292 14,553 (13,292) 1,261Office equipment 34,738 (26,724) 8,014 32,631 (26,106) 6,525Computer equipment 322,403 (198,950) 123,453 252,993 (184,811) 68,182Owned buildings 192,525 (74,559) 117,966 179,349 (55,615) 123,734Laboratory equipment 639,721 (512,284) 127,437 578,502 (487,517) 90,985Mobile units 32,943 (22,592) 10,351 32,943 (20,464) 12,479Buildings – Air systems 18,240 (14,136) 4,104 18,551 (13,544) 5,007Total 1,464,392 (922,452) 541,940 1,262,007 (874,025) 387,982

Controlling Entity

2017 2016

Cost/Valuation



Carrying value Cost



Carrying value

R’000 R’000 R’000 R’000 R’000 R’000

Land 3,208 - 3,208 3,208 - 3,208Leasehold improvements 109,649 (45,403) 64,246 128,508 (54,541) 73,967Plant and machinery 5,737 (5,636) 101 5,686 (5,671) 15Furniture and fixtures 11,633 (7,878) 3,755 14,929 (12,344) 2,585Motor vehicles 93,473 (14,181) 79,292 14,553 (13,292) 1,261Office equipment 34,689 (26,687) 8,002 32,589 (26,064) 6,525Computer equipment 322,108 (198,762) 123,346 252,579 (184,505) 68,074Owned buildings 192,089 (74,450) 117,639 178,922 (55,528) 123,394Laboratory equipment 635,832 (509,853) 125,979 574,610 (485,387) 89,223Mobile units 32,943 (22,592) 10,351 32,943 (20,464) 12,479Buildings – Air systems 18,176 (14,081) 4,095 18,487 (13,493) 4,994Total 1,459,537 (919,523) 540,014 1,257,014 (871,289) 385,725



Reconciliation of Property, Plant and Equipment – Economic Entity – 2017

Opening balance Additions Adjustments Disposals Transfers Reclass Depreciation Total

R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000

Land 3,208 - - - - - - 3,208Leasehold improvements 73,967 - (631) (99) - (3,597) (5,394) 64,246Plant and machinery 15 137 - (1) - (21) (29) 101Furniture and fixtures 2,619 995 - (421) - (239) 814 3,768Motor vehicles 1,261 78,966 - - - (38) (897) 79,292Office equipment 6,525 4,072 3 (79) - (214) (2,293) 8,014Computer equipment 68,182 110,745 - (920) - (1,536) (53,018) 123,453Owned buildings 123,734 985 (3,031) (75) - 1,637 (5,284) 117,966Laboratory equipment 90,985 67,369 (45) (907) - 1,546 (31,511) 127,437Mobile units 12,479 - - - - - (2,128) 10,351Buildings – Air systems 5,007 - (329) (114) - 998 (1,458) 4,104Total 387,982 263,269 (4,033) (2,616) - (1,464) (101,198) 541,940

Reconciliation of Property, Plant and Equipment – Economic Entity – 2016

Opening balance Additions Adjustments Disposals Transfers Reclass Depreciation Total

R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000

Land 3,208 - - - - - - 3,208Leasehold improvements 82,596 - - (1,599) - (657) (6,373) 73,967Plant and machinery 415 - - - - - (400) 15Furniture and fixtures 2,976 159 - (16) - 478 (978) 2,619Motor vehicles 69 1,224 - - - 43 (75) 1,261Office equipment 4,458 2,492 - (199) - 2,792 (3,018) 6,525Computer equipment 100,327 22,633 - (302) - 10 (54,486) 68,182Owned buildings 130,988 - - - - 54 (7,308) 123,734Capital work in progress 61 - - - (61) - - -Laboratory equipment 113,036 17,949 - (1,772) 61 (2,828) (35,461) 90,985Mobile units 14,872 - - (241) - - (2,152) 12,479Buildings – Air systems 7,050 - - (122) - 110 (2,031) 5,007Total 460,056 44,457 - (4,251) - 2 (112,282) 387,982

Reconciliation of Property, Plant and Equipment – Controlling Entity – 2017

Opening balance Additions Adjustments Disposals Reclass Depreciation Total

R’000 R’000 R’000 R’000 R’000 R’000 R’000

Land 3,208 - - - - - 3,208Leasehold improvements 73,967 - (631) (99) (3,597) (5,394) 64,246Plant and machinery 15 137 - (1) (21) (29) 101Furniture and fixtures 2,586 995 - (421) (239) 834 3,755Motor vehicles 1,261 78,966 - - (38) (897) 79,292Office equipment 6,525 4,065 4 (80) (219) (2,293) 8,002Computer equipment 68,074 110,700 - (919) (1,536) (52,973) 123,346Owned buildings 123,394 975 (3,031) (74) 1,637 (5,262) 117,639Laboratory equipment 89,223 67,360 (45) (906) 1,551 (31,204) 125,979Mobile units 12,479 - - - - (2,128) 10,351Buildings – Air systems 4,994 - (329) (114) 998 (1,454) 4,095Total 385,726 263,198 (4,032) (2,614) (1,464) (100,800) 540,014



Reconciliation of Property, Plant and Equipment – Controlling Entity – 2016

Opening balance Additions Adjustments Disposals Reclass Depreciation Total

R’000 R’000 R’000 R’000 R’000 R’000 R’000

Land 3,208 - - - - - 3,208Leased buildings 82,596 - - (1,599) (657) (6,373) 73,967Plant and machinery 415 - - - - (400) 15Furniture and fixtures 2,921 159 - (16) 478 (957) 2,585Motor vehicles 69 1,224 - - 43 (75) 1,261Office equipment 4,456 2,492 - (199) 2,792 (3,016) 6,525Computer equipment 100,222 22,597 - (302) 10 (54,453) 68,074Owned buildings 130,626 - - - 54 (7,286) 123,394Laboratory equipment 111,169 17,804 - (1,772) (2,828) (35,150) 89,223Mobile units 14,872 - - (241) - (2,152) 12,479Buildings – Air systems 7,031 - - (122) 110 (2,025) 4,994Total 457,585 44,276 - (4,251) 2 (111,887) 385,725

Assets Subject to finance Lease (Net Carrying Amount)


2017 2016 2017 2016R’000 R’000 R’000 R’000

Motor vehicles 78,079 - 78,079 -Laboratory equipment 3,218 - 3,218 -

81,297 - 81,297 -

Other Information


2017 2016 2017 2016R’000 R’000 R’000 R’000

Property, Plant and Equipment Fully Depreciated and Still in Use (Gross Carrying Amount)Leasehold improvements 16,189 19,445 16,189 19,445Owned buildings 14 337 14 337Mobile units 8,117 8,117 8,117 8,117Buildings – Air systems 8,629 7,724 8,589 7,698Computer equipment 96,656 77,689 96,555 77,433Computer software 47,235 8,242 47,235 8,242Furniture and fixtures 6,608 9,397 6,601 9,372Laboratory equipment 369,304 357,548 368,152 356,621Office equipment 21,377 18,472 21,343 18,430Motor vehicles 13,157 13,163 13,156 13,163Plant and machinery 5,605 5,508 5,605 5,508

592,891 525,642 591,556 524,366

26 069 (2016: 52 638) assets have been fully depreciated and are recorded at a carrying amount of RNil. Due to severe cash constraints experienced by the NHLS, old equipment across a number of fixed asset categories have been retained and are currently in full use. The NHLS has a policy to replace assets at specified intervals. However, due to cash flow problems, and due to budget cuts, the NHLS was not able to replace the assets.



Biological Assets

As at 31 March 2017, the economic entity owns 58 horses and 90 sheep. The horses are used for the production of antivenom.

Sheep blood is used for the testing of antivenom. The horses and sheep meet the definition of an asset and they have been classified as property, plant and equipment in terms of GRAP 17. However, they were recorded in the books at R1 each, as book value could not be reliably determined. The cost or fair value could not be reliably measured due to the following reasons:

• Cost: Horses and sheep have no cost as they are donated;

• Fair value: The horses do not have an active market because once injected with the venom they cannot be sold to third parties;

• Most recent market prices are not readily available for assets of a similar nature. Furthermore, there is no sector benchmarks as SAVP is the only company that uses the assets to produce vaccines. Present values of future cashflows could not be reliably calculated.

7. NON-COMPLIANCE WITH SECTION 28(5) OF THE NHLS ACT

Thr NHLS Act (No. 37 of 2000) Section 28, Subsection 5 “Assets and Liabilities” Paragraph 2 states that the registrar of deeds must register the immovable property and make such entries or endorsements in any relevant register, title deeds or other document.

The following property is reflected in the entity’s asset register but has not yet been transferred into the name of the NHLS.

The process of transfer of the properties into the name of the NHLS is unfolding.

• Erf 1955 (a portion of erf 1056) Green Point, Cape Town; negotiations are ongoing between the NHLS and the Western Cape Government to relocate the NHLS from Green Point to a purpose built laboratory in Oude Molen which will be owned by the NHLS.

8. INTANGIBLE ASSETS

Economic Entity

2017 2016

Cost



Carrying value Cost



Carrying value

R’000 R’000 R’000 R’000 R’000 R’000

Patents 60 (27) 33 60 (24) 36Computer software 173,844 (88,917) 84,927 135,635 (22,134) 113,501Intangible assets under development 24,880 - 24,880 - - -Total 198,784 (88,944) 109,840 135,695 (22,158) 113,537

Controlling Entity

2017 2016

Cost



Carrying value Cost



Carrying value

R’000 R’000 R’000 R’000 R’000 R’000

Patents 60 (27) 33 60 (24) 36Computer software 173,844 (88,917) 84,927 135,635 (22,134) 113,501Intangible assets under development 24,880 - 24,880 - - -Total 198,784 (88,944) 109,840 135,695 (22,158) 113,537



Reconciliation of Intangible Assets – Economic Entity – 2017

Opening balance Additions Disposals Reclass Amortisation Total

R’000 R’000 R’000 R’000 R’000 R’000

Computer software 113,501 10,688 - 1,465 (40,727) 84,927Intangible assets under development - 24,880 - - - 24,880Patents 36 - - - (3) 33Total 113,537 35,568 - 1,465 (40,730) 109,840

Reconciliation of Intangible Assets – Economic Entity – 2016


R’000 R’000 R’000 R’000 R’000 R’000

Computer software 15,700 110,887 (277) - (12,809) 113,501Patents 39 - - - (3) 36Total 15,739 110,887 (277) - (12,812) 113,537

Reconciliation of Intangible Assets – Controlling Entity – 2017


R’000 R’000 R’000 R’000 R’000 R’000

Computer software 113,501 10,688 - 1,465 (40,727) 84,927Intangible assets under development - 24,880 - - - 24,880Patents 36 - - - (3) 33Total 113,537 35,568 - 1,465 (40,730) 109,840

Reconciliation of Intangible Assets – Controlling Entity – 2016


R’000 R’000 R’000 R’000 R’000 R’000

Computer software 15,700 110,887 (277) - (12,809) 113,501Patents 39 - - - (3) 36Total 15,739 110,887 (277) - (12,812) 113,537

9. OTHER FINANCIAL LIABILITIES


2017 2016 2017 2016R’000 R’000 R’000 R’000

At Amortised Cost

Other financial liabilities [1] 64,651 110,887 64,651 110,887Onerous contract [2] 21,179 - 21,179 -

85,830 110,887 85,830 110,887

Current Liabilities

At amortised cost 45,747 41,991 45,747 41,991Total Other Financial Liabilities 85,830 110,887 85,830 110,887

Non-current Liabilities

At amortised cost 40,083 68,896 40,083 68,896



[1] Other financial liabilities comprise amounts owed to suppliers for the acquisition of laboratory equipment, IT equipment and IT software. The liabilities are interest-free and are payable within the next 24 months.

[2] Onerous contract relates to the amount committed by the economic entity on certain lease contracts over and above the fair value of the assets obtained therefrom.

10. FINANCE LEASE OBLIGATION


2017 2016 2017 2016R’000 R’000 R’000 R’000

Minimum Lease Payments Due

- within one year 21,245 - 21,245 -- in second to fifth year inclusive 83,627 - 83,627 -

104,872 - 104,872 -less: future finance charges (23,321) - (23,321) -Present Value of Minimum Lease Payments 81,551 - 81,551 -

Present Value of Minimum Lease Payments Due

- within one year 13,310 - 13,310 -- in second to fifth year inclusive 68,241 - 68,241 -

81,551 - 81,551 -

Non-current liabilities 68,241 - 68,241 -Current liabilities 13,310 - 13,310 -

81,551 - 81,551 -

It is the economic entity’s policy to lease certain motor vehicles under finance leases.

The average lease term is five years and the average effective borrowing rate was 10.50% (2016: -%).

Interest rates are fixed at the contract date. All leases have fixed repayments and no arrangements have been entered into for contingent rent.

The economic entity’s obligations under finance leases are secured by the lessor’s charge over the leased assets with a carrying value of R78.079 million (2016: RNil). Refer to note 6.

11. TRADE AND OTHER PAYABLES


2017 2016 2017 2016R’000 R’000 R’000 R’000

Trade payables 655,060 530,262 654,856 530,068Accrued expenses 204,372 231,378 203,433 230,516Other payables 113,894 110,536 113,674 110,356

973,326 872,176 971,963 870,940

The Accounting Authority considers that the carrying amount of trade and other payables approximates their fair value. Trade payables are non-interest bearing and are normally settled on 30-day payment terms. Payments amounting to R467.1 million (2016: R331.0 million) were not made within the NHLS’ terms and conditions agreed with its suppliers.



12. EMPLOYEE BENEFIT OBLIGATIONS

The amounts recognised in the Statement of Financial Position are as follows:


2017 2016 2017 2016R’000 R’000 R’000 R’000

Carrying Value

Present value of the defined benefit obligation – Wholly unfunded (1,022,679) (954,223) (1,022,679) (954,223)

Non-current liabilities (999,123) (933,220) (999,123) (933,220)Current liabilities (23,556) (21,003) (23,556) (21,003)

(1,022,679) (954,223) (1,022,679) (954,223)

NHLS provides post-employment healthcare benefits. Members who joined NHLS before 1 January 2003, and KZN members who joined NHLS before 1 October 2006 are eligible for a subsidy of medical scheme contributions in retirement.

Changes in the present value of the defined benefit obligation are as follows:


2017 2016 2017 2016R’000 R’000 R’000 R’000

Opening balance 954,223 876,457 954,223 876,457Interest cost 106,546 76,066 106,546 76,066Service cost 27,475 21,844 27,475 21,844Benefits paid (22,095) (23,219) (22,095) (23,219)Acturial (gain)/loss (43,470) 3,075 (43,470) 3,075

1,022,679 954,223 1,022,679 954,223

Calculation of Actuarial Gains and Losses


2017 2016 2017 2016R’000 R’000 R’000 R’000

Change in real discount rate 16,972 37,267 16,972 37,267(Higher)/Lower than expected healthcare cost inflation including changes in members in members’ benefit options 6,040 7,703 6,040 7,703Unexpected changes in memberships 20,458 131,942 20,458 131,942Change in subsidy policy (past service cost) - (179,987) - (179,987)

43,470 (3,075) 43,470 (3,075)

Key Economic Assumptions Used

For practical reasons, these assumptions are determined before the valuation date. The economic assumptions used in this valuation are based on the market information as at end February 2017. The economic assumptions have been set in relation to the duration of the liability as at 31 March 2016. At that date, the duration of the liability was 20.4 years and thus a duration of 20 years was used to set economic assumptions. Assumptions used at the reporting date:




2017 2016 2017 2016

Discount rates used 10.90 % 11.30 % 10.90 % 11.30 %CPI inflation rate 8.30 % 8.80 % 8.30 % 8.80 %Salary inflation 9.80 % 10.30 % 9.80 % 10.30 %Expected increase in healthcare costs 10.30 % 10.80 % 10.30 % 10.80 %

Rate of Discount

The discount rate of 10.90% per annum is primarily determined by reference to current market yields on government bonds.

Consumer Price Index Inflation

While not used explicitly in the valuation, the actuaries have assumed the underlying future rate of consumer price index inflation (CPI inflation) to be 8.30% per annum. This assumption has been based on the relationship between the nominal bond curve and the real bond yield.

Income at Retirement

Income at retirement is relevant to the extent that the contribution tables are based on income. The actuaries have assumed that an individual member’s income would increase by 9.80% per annum, based on the underlying assumption that individual remuneration increase including merit and promotional increases would exceed CPI inflation by an average of 1.5% per annum over the long-term. The actuarial assumption is that income at retirement would be 65% of final salary.

Healthcare Cost Inflation

The current contribution tables of the medical schemes would continue to apply in the future, with allowances of inflationary increases of 10.30% per annum. In consultation with the NHLS, assumptions made by the actuaries state that healthcare cost inflation exceeds CPI inflation by an average of 2.00% per annum over the long-term.

Sensitivity Analysis

Assumed healthcare cost trends rates have a significant effect on the amounts recognised in surplus or deficit. A one percentage point change in assumed healthcare cost trends rates would have the following effects:


2017 2017 2016 2016One

percentage point

increase

One percentage

point decrease

One percentage

point increase

One percentage

point decrease

Effect on the aggregate of the service cost and interest cost 20,80% -16,40% 21,40% -16,70%Effect on defined benefit obligation 19,40% -15,31% 19,90% -15,71%

Amounts for the current and previous four years are as follows:

2017 2016 2015 2014 2013R’000 R’000 R’000 R’000 R’000

Defined benefit obligation 1,022,679 954,223 876,457 737,155 643,441



13. DEFERRED INCOME

Non-reimbursive grant funds are recognised only once expenditure relating to the grant has been incurred.

Unspent conditional grants and receipts comprises


2017 2016 2017 2016R’000 R’000 R’000 R’000

Unspent Conditional Grants and Receipts

Research grants 12,252 4,137 12,252 4,137

Movement During the Year

Balance at the beginning of the year 4,137 52,264 4,137 52,264Additions during the year 28,301 133,708 28,301 133,708Income recognition during the year (20,186) (181,835) (20,186) (181,835)Closing Balance 12,252 4,137 12,252 4,137

14. PROVISIONS

Reconciliation of Provisions – Economic Entity – 2017

Opening balance Additions

Utilised during

the year

Reversed during

the year TotalR’000 R’000 R’000 R’000 R’000

Student bursary provision 3,975 6,059 (3,975) - 6,059Leave pay provision 140,654 62,027 (14,058) (2,834) 185,789Salaries provision 150,481 21,314 (18,632) (36,966) 116,197Bonus provision 5,196 121,907 (126,559) - 544DoH utility charges provision 387,757 59,169 (41,569) - 405,357

688,063 270,476 (204,793) (39,800) 713,946

Reconciliation of Provisions – Economic Entity – 2016


Utilised during

the year

Reversed during


Student bursary provision - 3,975 - - 3,975Leave pay provision 126,596 104,253 (90,195) - 140,654Salaries provision 94,140 56,341 - - 150,481Bonus provision 5,563 - - (367) 5,196DoH utility charges provision 241,270 164,397 - (17,910) 387,757

467,569 328,966 (90,195) (18,277) 688,063



Reconciliation of Provisions – Controlling Entity – 2017


Utilised during

the year

Reversed during


Student bursary provision 3,975 6,059 (3,975) - 6,059Leave pay provision 140,654 62,027 (14,058) (2,834) 185,789Salaries provision 150,481 21,314 (18,632) (36,966) 116,197Bonus provision 5,196 121,907 (126,559) - 544DoH utility charges provision 387,757 59,169 (41,569) - 405,357

688,063 270,476 (204,793) (39,800) 713,946

Reconciliation of Provisions – Controlling Entity – 2016


Utilised during

the year

Reversed during


Student bursary provision - 3,975 - - 3,975Leave pay provision 126,596 104,253 (90,195) - 140,654Salaries provision 94,140 56,341 - - 150,481Bonus provision 5,563 - - (367) 5,196DoH utility charges provision 241,270 164,397 - (17,910) 387,757

467,569 328,966 (90,195) (18,277) 688,063

The leave pay provision relates to vesting leave pay to which employees may become entitled upon leaving the employment of the economic entity. The provision arises as employees render a service that increases their entitlement to future compensated leave and is calculated based on an employee’s total cost of employment. The provision is utilised when employees become entitled to and are paid for the accumulated leave pay or utilise compensated leave due to them.

The DoH utility charges provision relates to utilities and maintenance fees owing to the DoH for various provincial hospital facilities around the country. Significant adjustments to the provision pertain to changes in the rate charged per square meter as well as the reversal of the utilities provision relating to the Eastern Cape.

The bonus provision is made up of the following:

• Certain employees in bands D and above who are on the cost-to-company package and elect to structure part of their package as a 13th cheque. The provision is utilised when employees become entitled to and are paid for their services to the entity. The bonus payable is determined by applying a specific formula based on the employees’ total cost-to-company; and

• A 13th cheque for employees in bands A to C which is payable in December each year.

15. STATED CAPITAL


2017 2016 2017 2016R’000 R’000 R’000 R’000

Issued332 000 Ordinary shares at par value of R1 each 332 332 332 332

The economic entity’s sole shareholder is the South African Government. There have been no shares issued since the incorporation of NHLS.



16. INVESTMENTS

Controlling entity

2017 2016R’000 R’000

South African Vaccine Producers (Pty) LtdPercentage holding 100 % 100 %Carrying amount 10 10Impairment (10) (10)

- -

17. LOAN TO SUBSIDIARY


2017 2016 2017 2016R’000 R’000 R’000 R’000

Controlled Entity

South African Vaccine Producers (Pty) Ltd - - 35,314 36,764- - 35,314 36,764

Impairment of loans to controlled entity - - (35,314) (36,764)- - - -

The Controlling Entity has subordinated it’s rights to claim payments of debts of R35.314 million (2016: R36.764 million) owed to it the by South African Vaccine Producers (Pty) Ltd until the assets of the subsidiary, fairly valued, exceed its liabilities. The report of the Accounting Authority contains further details of the subsidiary.

Loan to SAVP Impaired

As at 31 March 2017, loans to economic entities of R35 million (2016: R 37 million) were impaired and provided for.

The ageing of these loans is as follows:


2017 2016 2017 2016R’000 R’000 R’000 R’000

Over 12 months - - 35,314 36,764- - 35,314 36,764



18. REVENUE


2017 2016 2017 2016R’000 R’000 R’000 R’000

Sale of goods 22,535 20,057 - -Rendering of services 6,356,448 5,734,631 6,356,448 5,734,631Miscellaneous other revenue 652 8,580 652 8,580Government grants and subsidies 715,270 678,926 715,270 678,926

7,094,905 6,442,194 7,072,370 6,422,137

The amount included in revenue arising from exchanges of goods or services are as follows:Sale of goods 22,535 20,057 - -Rendering of services 6,356,448 5,734,631 6,356,448 5,734,631Miscellaneous other revenue * 652 8,580 652 8,580

6,379,635 5,763,268 6,357,100 5,743,211*Miscellaneous other revenue constitutes other income from other activities of the NHLS.The amount included in revenue arising from non-exchange transactions is as follows:Government grants and subsidies 715,270 678,926 715,270 678,926

The government grant and subsidy represents the transfer from the Department of Health.

19. COST OF SALES


2017 2016 2017 2016R’000 R’000 R’000 R’000

Direct material expenses 2,816,930 2,536,985 2,812,000 2,532,236Employee costs 2,896,852 2,264,846 2,882,991 2,255,072Depreciation and amortisation costs 118,970 37,817 118,633 37,467

5,832,752 4,839,648 5,813,624 4,824,775

20. OTHER INCOME


2017 2016 2017 2016R’000 R’000 R’000 R’000

Debt impairment recovered 2,209 2,790 2,209 2,790Discount received 1,380 664 1,378 658Fair value adjustments: Notional interest 60,560 22,608 60,560 22,608Grant income recognised 149,376 181,835 149,376 181,835Internal recoveries 8,453 4,438 8,453 4,438Exchange gains 10,619 - 10,619 -Royalties received 253 363 253 363Sundry income 17,808 11,073 17,808 11,073Teaching income 18,461 106,526 18,461 106,526

269,119 330,297 269,117 330,291



21. OPERATING (DEFICIT)/SURPLUS

Operating (deficit)/surplus for the year is stated after accounting for the following:


2017 2016 2017 2016R’000 R’000 R’000 R’000

Operating Lease ChargesPremises- Contractual amounts 3,298 3,798 3,298 3,798Motor vehicles- Contractual amounts 391 1,555 391 1,555Equipment- Contractual amounts 62,339 67,288 62,207 67,159

66,028 72,641 65,896 72,512

Deficit on sale of property, plant and equipment (14,326) (4,437) (14,324) (4,437)Amortisation on intangible assets 2,188 12,735 2,188 12,735Depreciation on property, plant and equipment 139,950 112,334 139,552 111,939Employee costs 3,242,741 2,565,987 3,228,470 2,556,127

22. EMPLOYEE RELATED COSTS


2017 2016 2017 2016R’000 R’000 R’000 R’000

Basic 2,279,931 1,870,582 2,270,165 1,863,168Bonus 122,186 14,536 121,469 14,487Medical aid – Company contributions 170,597 137,839 169,748 137,157UIF 11,985 10,871 11,918 10,811WCA 9,890 9,737 9,838 9,685SDL 21,799 12,955 21,682 12,870Leave pay provision charge 59,192 25,719 58,255 25,615Training 225 303 53 123Other allowances 162,654 144,108 162,654 144,108External bursaries 7,133 7,427 7,133 7,416Other short-term costs 97,226 71,556 96,610 71,079Defined contribution plans 296,348 257,000 295,416 256,291Long-term benefits – Incentive scheme 3,575 3,354 3,529 3,317

3,242,741 2,565,987 3,228,470 2,556,127

23. DEBT IMPAIRMENT


2017 2016 2017 2016R’000 R’000 R’000 R’000

Contributions to debt impairment provision 2,492,575 (47,201) 2,491,125 (51,295)Debt impairment written off 22,606 771,339 22,606 771,339

2,515,181 724,138 2,513,731 720,044



Contributions to debt impairment provision consist of provision for doubtful debt, provision for the loss in the subsidiary company, SAVP and fair value adjustments. Debt written off consists of stale medical aid claims due to late billing as well as write-offs due to data-capturing errors, debt that is uneconomical to pursue, death of patients, uncontactable patients and debt which falls over the prescribed period. A doubtful debt provision was utilised to cover the write-off of debt of R22 606 (2016: 771 339). Further details are contained in note 3.

24. INVESTMENT REVENUE


2017 2016 2017 2016R’000 R’000 R’000 R’000

Interest Revenue

Bank 62,182 51,018 61,965 50,934Interest received – Debtors 91,684 142,238 91,684 142,238

153,866 193,256 153,649 193,172

25. FINANCE COSTS


2017 2016 2017 2016R’000 R’000 R’000 R’000

Finance leases 612 - 612 -Amortisation of liabilities 11,510 - 11,510 -Other interest paid 11,642 184 11,642 147

23,764 184 23,764 147

Finance costs relate mainly to the amortisation charges of Microsoft and Tech Mahindra liabilities whose payments are deferred over 24 to 36 months.

Other interest relates mainly to notional interest on creditors.

26. AUDITORS’ REMUNERATION


2017 2016 2017 2016R’000 R’000 R’000 R’000

Audit fees – Current year 5,689 5,650 5,389 5,624Audit fees – Prior year under provision 36 407 66 156Fees for other services 214 374 214 374Expenses 688 1,242 688 1,242

6,627 7,673 6,357 7,396

Auditors’ remuneration consists of external and internal audit remuneration. Internal audit services are co-sourced.



27. CASH GENERATED FROM/(USED IN) OPERATIONS


2017 2016 2017 2016R’000 R’000 R’000 R’000

(Deficit)/surplus (1,880,210) 272,762 (1,879,718) 272,925Adjustments for:

Depreciation and amortisation 142,138 125,069 141,740 124,674Loss on sale of assets and liabilities 14,326 4,437 14,324 4,437Gain on foreign exchange (10,619) - (10,619) -Finance costs – Finance leases 612 - 612 -Other finance costs 23,152 184 23,152 147Debt impairment 2,515,181 724,138 2,513,731 720,044Movements in retirement benefit assets and liabilities 68,456 77,766 68,456 77,766Movements in provisions 25,883 220,494 25,883 220,494Movement in tax receivable and payable 475 - - -Prior period adjustments 46,099 - 46,033 (306)Onerous contract costs 21,295 - 21,295 -Notional interest (60,560) - (60,560) -Changes in working capital:

Inventories (12,625) (15,248) (12,251) (15,289)Trade and other receivables 1,434,393 (300,381) 1,434,987 (300,235)Debt impairment (2,515,181) (724,139) (2,513,731) (720,045)Other receivables from non-exchange transactions 1,127 7,816 1,127 7,816Trade and other payables 101,155 (208,959) 101,022 (208,811)Deferred income 8,115 (48,127) 8,115 (48,127)

(76,788) 135,812 (76,402) 135,490

28. COMMITMENTS

Authorised Capital Expenditure


2017 2016 2017 2016R’000 R’000 R’000 R’000

Capital expenditure contracted for after the reporting date but not yet incurred is as follows:Property, plant and equipment 133,171 81,304 133,171 81,304

Not yet contracted for and authorised by the Board

Property, plant and equipment 3,224 23,630 3,224 23,630136,395 104,934 136,395 104,934

This committed expenditure relates to property, plant and equipment and will be financed by available bank facilities, retained surpluses, existing cash resources and funds internally generated.



Operating Leases – as Lessee Expense


2017 2016 2017 2016R’000 R’000 R’000 R’000

Minimum lease payments due

- within one year 7,962 24,151 7,962 24,151- in second to fifth year inclusive 18,138 34,259 18,138 34,259

26,100 58,410 26,100 58,410

Operating lease payments represent rentals payable by the economic entity for certain of its office equipment. Leases are negotiated for an average term of five years and rentals are fixed for an average of three years. No contingent rent is payable.

29. CONTINGENCIES

Contingent Liabilities

The WSU has claimed that the salaries of HODs, Medical Scientists and Technologists are owed by the NHLS for the period 2007–2013. The amount is disputed by the NHLS as the staff for which the claim is being made are not the employees of the NHLS.

The intention of the NHLS is to defend all other cases and the legal opinion is of the view that the NHLS is in a favourable legal position to succeed.

The economic entity is facing litigation from former employees citing unfair termination of employment contracts. The economic entity’s lawyers consider the likelihood of the action against the entity being successful as unlikely.


2017 2016 2017 2016R’000 R’000 R’000 R’000

Claims lodged for damages:

Legal fees on ex-employee cases 2,523 150 2,523 150WSU salaries dispute 15,309 15,309 15,309 15,309Supplier claims 100 - 100 -

17,932 15,459 17,932 15,459

Contingent Assets

An employee and a vendor are alleged to have committed fraud and/or theft against the NHLS for a period of about 13 years from 2002 until June 2013. The NHLS conducted a disciplinary process and the employee was dismissed. The matter was reported to the Commercial Crimes Unit and a civil process has been instituted against the employee and the vendor.


2017 2016 2017 2016R’000 R’000 R’000 R’000

18,290 18,290 18,290 18,290

NHLS is in the process of registering all its foreign donor funded projects for VAT in order to be able to claim VAT input, which is not recoverable from donors. Once registrations have been finalised and the VAT input is determined this will result in the assets being recognised by NHLS.



30. RELATED PARTIES

Relationships Representative of Designation

Non-executive Board MembersEric Buch Appointed Chairperson of the Board on

1 January 2017Minister of Health

Barry Schoub* Chairperson: Resigned on 1 January 2017 Council for Higher Education

Gregory Hussey ** Vice-Chairperson: Resigned on 1 January 2017

Council for Higher Education Minister of Health

Sibongile Zungu* Vice-Chairperson: Appointed on 20 April 2017

Minister of Health

Mary Ross Minister of Health

Nelisiwe Mkhize Minister of Health

Willem Sturm Minister of Health

Haroon Salojee Minister of Health

Andre Venter National Department of Health

Patrick Moonasar National Department of Health

Michael Manning Western Cape

Thokozani Mhlongo** Retired 6 July 2016 Mpumalanga

Stanley Harvey Northern Cape Province

Ntombikayise Mapukata Eastern Cape

Thamsanqa Stander** Retired 18 November 2016 Free State Province

Lunga Ntshinga Public Nomination: Finance

Ben Durham Department of Science and Technology

Michael Shingange Organised Labour

Sphiwe Dorris Mayinga* Appointed on 20 April 2017 Public Nomination: Legal

Balekile E Mzangwa* Appointed on 18 November 2016 Free State Province

Obi Chikwelu Lawrence* Appointed on 20 April 2017 Council for Higher Education

Zwelibanzi Abie Mavuso* Appointed on 21 December 2016 South African Local Government Association

Gerhard Goosen Minister of Health

Tim Tucker Public Nomination: Research

Executive Board MemberJoyce Mogale Chief Executive Officer: NHLS National Health Laboratory Service

Shabir Madhi Acting Chief Executive Officer: NHLS National Health Laboratory Service

* New appointment/re-appointment** Resigned/retired

The NHLS is controlled by the National Department of Health by virtue of the powers conferred to the Minister of Health by the National Health Laboratory Service Act, (No. 37 of 2000).

Sales to related parties’ transactions relates to the provision of pathology, research and teaching services. Purchases from related parties are as a result of goods and services purchased in the ordinary course of business.



Accounts Receivable

Economic entity 2017 Controlling entity 2017 Economic entity 2016 Controlling entity 2016

OwedServices

billed OwedServices

billed OwedServices

billed OwedServices

billedR’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000

By Region

Western Cape 38,167 641,374 38,167 641,374 23,652 605,218 23,652 605,218Eastern Cape 271,349 637,674 271,349 637,674 146,503 584,375 146,503 584,375Northern Cape 36,545 128,253 36,545 128,253 33,208 115,604 33,208 115,604Gauteng 2,327,874 1,724,765 2,327,874 1,724,765 1,806,221 1,576,520 1,806,221 1,576,520North West 96,814 331,725 96,814 331,725 45,901 286,382 45,901 286,382Limpopo 92,755 420,039 92,755 420,039 60,382 362,211 60,382 362,211Mpumalanga 85,613 401,826 85,613 401,826 61,286 351,585 61,286 351,585Free State 64,179 296,948 64,179 296,948 40,307 278,264 40,307 278,264KwaZulu-Natal 3,169,477 1,738,239 3,169,477 1,738,239 3,148,350 1,609,670 3,148,350 1,609,670National 1,416 7,020 1,416 7,020 11,499 32,715 11,499 32,715Total 6,184,189 6,327,863 6,184,189 6,327,863 5,377,309 5,802,544 5,377,309 5,802,544

By Segment

Hospitals 4,927,551 3,361,960 4,927,551 3,361,960 4,283,230 3,183,936 4,283,230 3,183,936Health Clinics 381,068 541,887 381,068 541,887 253,923 456,820 253,923 456,820Correctional Services 8,043 24,397 8,043 24,397 9,005 18,044 9,005 18,044Anti-retroviral programmes 627,632 2,281,143 627,632 2,281,143 501,027 1,940,869 501,027 1,940,869Universities - 6,304 - 6,304 44,250 72,335 44,250 72,335Defence 4,885 27,689 4,885 27,689 3,422 26,517 3,422 26,517Municipalities 234,159 64,449 234,159 64,449 272,352 62,140 272,352 62,140Other public entities 851 20,034 851 20,034 10,100 41,883 10,100 41,883Total 6,184,189 6,327,863 6,184,189 6,327,863 5,377,309 5,802,544 5,377,309 5,802,544

Accounts Payable

Economic entity 2017 Controlling entity 2017 Economic entity 2016 Controlling entity 2016

Owing Purchases Owing Purchases Owing Purchases Owing Purchases

R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000

By Region

Western Cape 2,233 19,781 2,233 19,781 3,937 23,639 3,937 23,639Eastern Cape 253 1,982 253 1,982 118 1,967 118 1,967Gauteng 669 83,606 669 83,606 1,088 50,421 1,088 50,421North West 984 2,304 984 2,304 48 554 48 554Limpopo 4 281 4 281 12 214 12 214Free State 60 11,965 60 11,965 - 858 - 858Mpumalanga - 4 - 4 - 37 - 37KwaZulu-Natal 13 1,445 13 1,445 84 1,124 84 1,124Total 4,216 121,368 4,216 121,368 5,287 78,814 5,287 78,814

By Segment

Universities 3,188 33,341 3,188 33,341 4,238 24,666 4,238 24,666Municipalities 706 49,152 706 49,152 763 22,543 763 22,543National public entities 278 11,835 278 11,835 139 11,350 139 11,350Provincial public entities 24 102 24 102 8 165 8 165Contract laboratory services 20 26,938 20 26,938 139 20,090 139 20,090

4,216 121,368 4,216 121,368 5,287 78,814 5,287 78,814



31. RISK MANAGEMENT

Financial Risk Management

The economic entity’s activities expose it to a variety of financial risks: liquidity risk, interest rate risk and credit risk.

Liquidity Risk

Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount of committed credit facilities. Due to the dynamic nature of the underlying businesses, economic entity treasury maintains flexibility in funding by maintaining availability under committed short-term investments. At year end the investment in short-term deposits amounted to R392 million.

The economic entity’s risk to liquidity is a result of the funds available to cover future commitments. The economic entity manages liquidity risk through an ongoing review of future commitments and credit facilities.

Interest Rate Risk

The economic entity’s interest rate risk arising from short-term investments and finance leases is minimal as a result of the immaterial amounts involved.

Fair Value

At 31 March 2017, the carrying amounts of cash, accounts receivable, accounts payable and accrued expenses approximated their fair values due to the short-term maturities of these assets and liabilities.

The carrying amount of financial assets and financial liabilities approximate their fair values.

Credit Risk

Credit risk is managed on a group basis.

Credit risk consists mainly of cash deposits, cash equivalents and trade debtors. The economic entity only deposits cash with major banks with high quality credit standing and limits exposure to any one counter-party to the exception of government departments.

Concentrations of credit risk with respect to trade receivables are limited due to the majority of receivables being owned by government departments. However, due to the current payment disputes with the KZN and Gauteng Provincial Departments of Health, a total doubtful debt allowance of R2.20 billion has been raised. Trade receivables are interest-bearing and are generally on 30-day payment terms. All interest on overdue debt has been provided for in full due to various communications received from the relevant government departments indicating they will not be in a position to honour the additional interest owed to NHLS.

Financial assets exposed to credit risk at year end were as follows:

Financial Instrument


2017 2016 2017 2016R’000 R’000 R’000 R’000

Trade and other receivables 1,719,404 3,153,797 1,716,677 3,151,664Other receivables from non-exchange transactions - 1,127 - 1,127



32. FINANCIAL ASSETS BY CATEGORY

Economic Entity – 2017

Financial assets at amortised

costR’000

Trade and other receivables 1,719,404Cash and cash equivalents 391,975

2,111,379

The accounting policies for financial instruments have been applied to the line items below:



costR’000

Trade and other receivables 3,153,797Other receivables from non-exchange transactions 1,127Cash and cash equivalents 738,975

3,893,899

Controlling Entity – 2017


costR’000

Trade and other receivables 1,716,677Cash and cash equivalents 389,919

2,106,596



costR’000

Trade and other receivables 3,151,664Other receivables from non-exchange transactions 1,127Cash and cash equivalents 736,393

3,889,184



33. FINANCIAL LIABILITIES BY CATEGORY

The accounting policies for financial instruments have been applied to the line items below:


Financial liabilities at

amortised costR’000

Trade and other payables 973,326Finance lease obligation 81,551Other financial liabilities 85,830

1,140,707




Trade and other payables 872,176Other financial liabilities 110,887

983,063




Trade and other payables 971,963Finance lease obligation 81,551Other financial liabilities 85,830

1,139,344




Trade and other payables 870,940Other financial liabilities 110,887

981,827



34. PRESCRIBED OFFICERS AND BOARD MEMBERS’ EMOLUMENTS

Emoluments were paid to the Board members or any individuals holding a prescribed office position during the year.

Prescribed Officers

2016–2017Salaries

Retirement contribution

Medical contribution

Expense allowance Other Total

R’000 R’000 R’000 R’000 R’000 R’000

S Madhi (Acting Chief Executive Officer) 1,828 - 78 11 169 2,086M Mosia 1,552 127 52 22 154 1,907M Saffer(SAVP Director) 675 55 - 28 112 870J van Heerden 1,591 88 - 33 118 1,830S Kisting 1,769 - - 19 53 1,841S Zulu 1,758 - - 12 120 1,890M Mphelo 1,615 129 - 11 101 1,856T Shilowa 1,407 126 98 54 70 1,755J Mogale 2,092 163 - 31 165 2,451B Wikner (Acting Chief Financial Officer)* 141 12 5 2 45 205

14,428 700 233 223 1,107 16,691

* Note

2015–2016Salaries

Retirement contribution

Medical contribution

Expense allowance Other Total

R’000 R’000 R’000 R’000 R’000 R’000

S Madhi 2,498 - 69 - - 2,567M Saffer (SAVP Director) 536 44 - 2 34 616M Mphelo 1,079 - - - - 1,079S Kisting 1,324 - - 346 23 1,693J Mogale 1,686 50 - 500 12 2,248S Zulu 1,653 - - - - 1,653A Hall 770 66 41 - - 877M Mosia 236 21 8 - - 265J van Heerden 1,825 - - - 19 1,844S Grimmett 962 76 45 12 2 1,097

12,569 257 163 860 90 13,939

Service Contracts

Prescribed officers are subject to written employment agreements. The employment agreements regulate duties, remuneration, allowances, restraints, leave and notice periods of these executives. None of these service contracts exceed five years.



Non-executive Board Members


R’000 R’000 R’000

B Schoub** 200 4 204M Shingange 68 4 72T Stander** 208 13 221Tim Tucker 147 3 150E Buch (Chairperson) 179 2 181T Mhlongo** 48 64 112N Mapukata 164 31 195G Hussey** 126 3 129L Ntshinga 205 49 254M Ross 121 4 125S Harvey 133 2 135N Mkhize - 23 23G Goosen - 1 1A Sturm 153 12 165

1,752 215 1,967


R’000 R’000 R’000

B Schoub (Chairperson) 344 2 346M Shingange 67 6 73T Stander 257 11 268E Buch 208 1 209T Mhlongo - 155 155N Mapukata 164 26 190L Ntshinga 205 48 253M Ross 49 1 50S Harvey 143 1 144N Mkhize 37 9 46T Tucker 217 2 219

1,691 262 1,953

*Other fees relate to travel re-imbursement, out-of-pocket expenses and other company contributions.

**Board member retired/resigned/term expired.

35. PRIOR-YEAR ADJUSTMENTS

During the current year, the economic entity discovered an error in classification of certain of its buildings as heritage assets. These were reclassified to owned buildings following discovery of the error in the current year. Presented below are those items contained in the Statement of Financial Position, Statement of Financial Performance and Cash Flow Statement that have been affected by these prior-year adjustments:

Statement of Financial Position


As previously reported

Correction of error Restated

R’000 R’000 R’000

Heritage assets 170,006 (170,006) -Owned buildings 6,354 117,379 123,733Accumulated surplus (1,922,439) 52,627 (1,876,340)

(1,746,079) - (1,752,607)






R’000 R’000 R’000


(1,466,065) - (1,472,593)




R’000 R’000 R’000


(1,736,774) - (1,743,280)




R’000 R’000 R’000


(1,456,619) - (1,463,125)

Statement of Financial Performance




R’000 R’000 R’000

Expenditure – depreciation 118,539 6,528 125,067




R’000 R’000 R’000





R’000 R’000 R’000








36. IRREGULAR EXPENDITURE


2017 2016 2017 2016R’000 R’000 R’000 R’000

Opening balance 28,890 349,057 28,890 349,057Expired contracts (A) 574,943 - 574,943 -At least three quotes not provided (B) 1,478 - 1,478 -Contract values which do not agree with tendered amount (B) 674 - 674 -Contracts that exceeded delegation of authority (C) 209,697 - 209,697 -Payments to suppliers with no contracts 194,488 135,630 194,488 135,630Tenders that were not advertised on the CIDB website (B) 6,983 - 6,983 -Foreign suppliers without tax clearance certificates (B) 1,110 - 1,110 -Irregular appointment of employees 983 - 983 -Failure by employess to declare interests 73 - 73 -Less: Amounts condoned - (245,628) - (245,628)Less: Tax certificates, supplier declarations obtained - (7,912) - (7,912)Less: Valid contracts provided - (202,257) - (202,257)

1,019,319 28,890 1,019,319 28,890

Analysis of Expenditure Awaiting Condonation per Age Classification


2017 2016 2017 2016R’000 R’000 R’000 R’000

Current year 990,429 28,890 990,429 28,890Prior years 28,890 - 28,890 -

1,019,319 28,890 1,019,319 28,890

In terms of the PFMA/Treasury Regulations, the NHLS is in the process of seeking condonation of irregular expenditure:

(A) In terms of the contracts that have expired, management has embarked on a new tender process to regularise the procurement of goods and services.

(B) NHLS has revised its procurement processes to make sure that irregular expenditure does not recur in future. In the meantime, management is seeking condonation of this expenditure.

Irregular expenditure as disclosed above is due to payments on expired contracts, construction tenders not advertised on the CIDB website, foreign suppliers without tax clearance certificates, inadequate quotations obtained, catalogue suppliers, suppliers without contracts and contracts not approved by the board. The NHLS will investigate the expenditure and follow the PFMA process regarding consequence management.

(C) In terms of those contracts in which the employees exceeded their delegation of authority, the NHLS has engaged a formal process to determine the nature and extent of allegations of financial misconduct.



37. TAXATION

Major Components of the Tax Expense


2017 2016 2017 2016R’000 R’000 R’000 R’000

CurrentLocal income tax – current period 563 - - -Local income tax – recognised in current tax for prior periods 455 - - -

1,018 - - -

Reconciliation of the Tax Expense

Reconciliation between applicable tax rate and average effective tax rate.


2017 2016 2017 2016

Applicable tax rate 28.00 % 28.00 % - % - %Disallowable charges 23.60 % (28.00)% - % - %

51.60 % - % - % - %

38. COMPARATIVE FIGURES

Certain comparative figures have been reclassified.

39. GOING CONCERN

We draw attention to the fact that at 31 March 2017, the entity had accumulated deficits of R19.546 million and that the entity’s total liabilities exceed its assets by R19.214 million.

The economic entity Annual Financial Statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.

40. EVENTS AFTER THE REPORTING DATE

The Board and Management are currently engaging with partners in government to finalise the payments owed by the KZN and Gauteng DoHs. The Board and Management are not aware of any other matter or circumstance arising since the end of the financial year, not otherwise dealt with in this report, that would affect its operations or the results thereof significantly.

In addition, the independent auditors of NHLS raised reportable irregularities (RIs) in terms of Section 45 of the Auditing Profession Act in relation to the above matter. These matters will be resolved pending finalisation of investigations.



Detailed Statement of Financial Performancefor the year ended 31 March 2017


20172016

Restated* 20172016

Restated*Note R’000 R’000 R’000 R’000

REVENUESale of goods 22,535 20,057 - -Rendering of services 6,356,448 5,734,631 6,356,448 5,734,631Miscellaneous other revenue 652 8,580 652 8,580Government grants and subsidies 715,270 678,926 715,270 678,926

7,094,905 6,442,194 7,072,370 6,422,137Cost of Sales 19 (5,832,752) (4,839,648) (5,813,624) (4,824,775)Gross Surplus 1,262,153 1,602,546 1,258,746 1,597,362

OTHER INCOMEDiscount received 1,380 664 1,378 658Fair value adjustments: Notional interest 60,560 22,608 60,560 22,608Grant income recognised 149,376 181,835 149,376 181,835Interest received 24 153,866 193,256 153,649 193,172Profit on exchange differences 10,619 - 10,619 -Recoveries 10,662 7,228 10,662 7,228Royalties received 253 363 253 363Sundry income 17,808 11,073 17,808 11,073Teaching income 18,461 106,526 18,461 106,526

422,985 523,553 422,766 523,463Expenses (3,540,566) (1,853,153) (3,537,466) (1,847,753)Operating (Deficit)/Surplus 21 (1,855,428) 272,946 (1,855,954) 273,072Finance costs 25 (23,764) (184) (23,764) (147)(Deficit)/Surplus Before Taxation (1,879,192) 272,762 (1,879,718) 272,925Taxation 37 1,018 - - -(Deficit)/Surplus for the Year (1,880,210) 272,762 (1,879,718) 272,925

The supplementary information presented does not form part of the Group Annual Financial Statements and is presented as additional information. No audit opinion is expressed on these schedules.




20172016

Restated* 20172016

Restated*Note R’000 R’000 R’000 R’000

Operating Expenses

Accounts payable accruals written off - (1,282) - (1,282)Advertising 1,277 1,930 1,277 1,930Archiving and storage 6,844 5,321 6,844 5,321Assets expensed < R5 000 26 4,181 7,509 4,168 7,493Auditors remuneration 6,627 7,673 6,357 7,396Bank charges 1,278 1,175 1,254 1,149Cleaning 33,735 30,952 33,611 30,823Computer expenses 1,450 9,108 1,450 9,108Conferences and seminars 583 2,321 572 2,288Consulting and professional fees 61,101 40,009 60,976 39,722Consumables 13,008 13,244 12,930 13,183Debt collection 1,109 1,546 1,109 1,546Debt impairment 2,515,181 724,138 2,513,731 720,044Delivery expenses 749 772 749 772Depreciation, amortisation and impairments 23,168 87,250 23,107 87,206Discount allowed 16,455 17,960 16,455 17,960Employee costs 338,852 293,733 338,442 293,623Entertainment 70 3 70 3Fines and penalties - 18 - 18Insurance 985 5,046 985 5,046Lease rentals on operating lease 58,337 65,453 58,337 65,441Legal expenses 4,873 1,917 4,849 1,897Loss on disposal of assets 14,326 4,437 14,324 4,437Medical expenses 9,076 1,046 9,076 1,046Motor vehicle expenses 907 582 907 582Other contract expenses 21,295 - 21,295 -Other expenses 205 7,202 205 7,202Packaging 7,833 5,620 7,765 5,574Petrol and oil 4,971 5,259 4,971 5,259Postage 213 58 213 58Printing and stationery 36,813 34,354 36,721 34,270Project Management expenses 2 2,031 2 2,031Promotions 663 1,098 663 1,098Promotions and sponsorships 200 46 200 46Repairs and maintenance 62,449 58,805 62,296 58,752Research trust 49 156 49 156Security 12,900 8,493 12,900 8,493Software development expenses 25,455 27,889 25,455 27,889Software expenses 67,775 92,148 67,775 92,148Staff welfare 8,780 5,623 8,722 5,570Subscriptions 5,208 4,206 5,181 4,206Telephone and fax 22,003 88,010 21,893 87,955Training expenses 13,819 8,864 13,819 8,864Travel – local 52,671 34,374 52,671 34,374Travel – overseas 751 569 751 569Utilities 82,339 146,487 82,339 146,487

3,540,566 1,853,153 3,537,466 1,847,753

The supplementary information presented does not form part of the Group Annual Financial Statements and is presented as additional information. No audit opinion is expressed on these schedules.


Notes

K-13862-1 [www.kashan.co.za]

healthHealth

RP238/2017

ISBN: 978-0-621-45701-8

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