MMed (Paediatrics), Faculty of Health Sciences, University of the Witwatersrand / The aim of regionalisation of neonatal services is to offer a basic level of care to the majority of the obstetric/neonatal population who are at low risk, with smaller numbers of more specialised hospitals offering higher levels of care to the fewer, higher-risk patients. On review of relevant literature there has long been a shortage of neonatal intensive care unit (NICU) beds in the South African public sector. This study was an audit within a referral system in the public sector. The aim was to identify the need for NICU beds, establish whether the need was being met, ascertain which patients required referral and which were accepted, and delineate factors that influenced the outcome of acceptance versus refusal. Subjects and Methods Data collection took place between 30 October and 11 December 2006. Seven health facilities in southern Gauteng were included as study sites. These included 2 primary healthcare clinics, 3 district, 1 regional hospital and the tertiary referral facility, Charlotte Maxeke Johannesburg Academic Hospital (CMJAH). The study included all neonates requiring transfer to a NICU, for any reason, during the study period. Data collection relied upon completion of information sheets by doctors requesting or accepting transfer of ill neonates at each of the hospitals involved. The primary outcome was acceptance or refusal at CMJAH NICU. Secondary outcome was survival or death within the study period. Results Forty-seven external requests for NICU beds were recorded at CMJAH and another 22 requests came for births within CMJAH. Only 13 (28%) of external requests were accepted. All internal requests were accommodated. Most requests came from level 2 (district or regional) hospitals, many outside the designated referral system, mainly for infants with respiratory distress. Infants older than 24 hours of age (OR 0.16; 95% CI 0.04-0.65), those with congenital abnormalities, and those requiring surgery (OR 0.11; CI 0.23-0.57) were significantly more likely to be accepted. Greater numbers of staff on duty at CMJAH also correlated with the probability of acceptance into NICU. Conclusion Relatively few external requests were accepted. CMJAH provides sub-specialist services including paediatric surgery and therefore should accept patients requiring such management. However, there was a high number of patients refused admission for ‘simple’ neonatal respiratory conditions. Level 2 hospitals should be able to manage these. Furthermore, hospitals are not following strict referral protocols. The findings are indicative of the continued shortage of neonatal intensive care beds, poor adherence to referral guidelines, and a general failure of regionalisation within the sector under consideration.