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Annual Report 2008/09 Presentation to the Select Committee on Social Services

Annual Report 2008/09 Presentation to the Select Committee on Social Services. The presentation covers the following: Part One: Overview; Part Two: Achievements against 2008/09 Strategic Priorities; Part Three: Budget and Expenditure for 2008/09 (Financials);

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Annual Report 2008/09 Presentation to the Select Committee on Social Services

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  1. Annual Report 2008/09 Presentation to the Select Committeeon Social Services

  2. The presentation covers the following: Part One: Overview; Part Two:Achievements against 2008/09 Strategic Priorities; Part Three: Budget and Expenditure for 2008/09 (Financials); Part Four: Auditor-General Report Outline of the presentation

  3. PART ONE Overview

  4. SASSA derives its mandate from the following Acts: The Constitution of the RSA, 1996 (Act No.108 of 1996); “Everyone has the right to have access to : Social Security, including, if they are unable to support themselves and their dependants, appropriate social assistance” Social Assistance Act, 2004 (Act No.13 of 2004); “Everyone has the right to have access to : Social Security, including, if they are unable to support themselves and their dependants, appropriate social assistance.” South African Social Security Agency Act, 2004 (Act No.9 of 2004); One of the key objects of this Act is for SASSA to” act, eventually, as the sole agent that will ensure the efficient and effective management, administration and payment of social assistance.” Mandate

  5. To ensure the provision of a comprehensive social security service against vulnerability and poverty within the constitutional and legislative framework. SASSA Strategic Intent Vision “To provide world-class social security services”

  6. To administer quality social security services, cost effectively and timeously using appropriate best practices by: Developing and implementing policies, programmes and procedures for an effective and efficient social grants administration system; Promotion and protection of human dignity; and Delivering innovative, cost-effective and efficient services to individuals, their families and community groups via easy multi-access channels using modern technology. Mission

  7. Priorities for the year under review: Continuation of the Institutional Reform and Building of the South African Social Security Agency – District and Local Levels; Legislation and Policy Implementation on Social Assistance Benefit Administration and Payment Service Reforms and Improvements; and Fraud Prevention and Detection. Strategic Priorities

  8. Theme Paying the right social grant, to the right person, at the right time and place. NJALO!

  9. PART TWO Achievements Against 2008/09 Strategic Priorities

  10. PRIORITY 1: INSTITUTIONAL REFORM AND BUILDING OF SASSA

  11. There has been continuous improvement in most local offices and pay points in terms of access and service provision to beneficiaries; Invested in infrastructure improvement at various pay points across country; Enhancing the integrity of the grant process Developed an ICT service delivery infrastructure network to support the grants administration and payment processes Interfaced with other systems to verify eligibility status i.e. DHA, Persal, etc; The first phase (registry module) of the implementation of the MIS was finalized in all the Regions. There is now a central Record Management Centre established for each region Priority 1: Institutional Reform and Building of SASSA

  12. Improving organizational capacity Developed a Code of Conduct and Ethics for SASSA which was provided to all staff members Developed protocol guidelines to foster a culture of professionalism within the context of the Constitution of the Republic of South Africa. The contract and litigation management frameworks were developed to promote uniformity in the management and administration of contracts and litigations; and The frameworks have resulted in: reduction in litigation cases against SASSA from 41 505 in 2006/07 to 453 in 2008/09; and ensured standardization in the management of contracts across SASSA. Priority 1: Institutional Reform and Building of SASSA

  13. PRIORITY 2: LEGISLATION AND POLICY IMPLEMENTATION ON SOCIAL ASSISTANCE

  14. Overall Achievements Over 13 million South Africans receive social assistance benefits 9 million are children; 2.9m are older persons; and 1.28m are people with disabilities The number of people receiving grant increased from 12,3m in 2007/08 which represents a growth of 5.2% Priority 2: Legislation and Policy Implementation on Social Assistance

  15. Grant Uptake for Financial Years 2007/08 and 2008/09 • In 2008/09, there was an increase of 639,708 in grants uptake which represents a growth rate of 5.2% • There is a decrease in the uptake of disability and war veterans grants • The decrease in DG is due to 90% reduction in temporary disability-grant backlogs

  16. Age Equalisation (Reaching 100% of all men aged 63 and 64 by 31 March 2009) Implemented phase 1 of the age-equalization for 63 and 64 year old males from 1 July 2008. In total106,109 males were registered Gradual Expansion of CSG Implemented the extension of the Child Support Grant (CSG) to children up to the age of 15 from 1 January 2009. A total of 30,866 applications were received up until 31 March 2009 New Policy Reforms

  17. Means Test Implemented the changes to the means test allowing more persons access to social assistance with effect from August 2008. Alternative identity documents Implemented Regulation 11(1) allowing persons to apply for social assistance without a identity document. the number of applications with alternative identity documents received at the end of 2008/09 was about 4 000 New Policy Reforms (continued):

  18. Social Relief of Distress (SRD) An initial budget of R124 million was allocated to the Agency for 2008/9 The budget was augmented by R500 million in November 2008, making the total allocation for SRD for the financial year R624m Spending at year end of financial year stood at about R650m (104%) Targets reached Assistance was in the form of food parcels, cash and school uniforms. A total of 765 347 people were recipients of SRD as follows: A total number of 568 909 food parcels / vouchers were issued; A total number of 128 746 school uniforms were issued; Cash payments to 35 679 recipients; and Other recipients 32 013. Social Relief of Distress (SRD)

  19. Priority 3: Benefit Administration And Payment Service Reforms

  20. Improved Application Process Standardised the application and review processes The average turnaround time for the processing of applications in SASSA decreased from 21 to 9 days, with the ultimate target being a single day. Applications in the Piloting of the Improved Grant Application Process (IGAP) in the FS, are being completed within one day. Improved Access to Services Services were taken closer to potential beneficiaries, especially to those in the rural areas, through the Integrated Community Registration Outreach Programme (ICROP) Conducted 500 ICROP outreach programmes in all regions Registered over 133 590 beneficiaries and 80% of those registered were child support grants Implemented the Customer Care Charter which places beneficiaries at the centre of our core activities Priority 3: Benefit Administration and Payment Service Reforms

  21. Improved payment services Developed contract and vendor management strategy; Standardized Service Level Agreements (SLA) for cash payment services; Monitored compliance of payment contractors with SLA; Implemented monitoring tool to monitor services by cash contractors which resulted in regions taking corrective measures in improving the payment of grants. Priority 3: Benefit Administration and Payment Service Reforms

  22. Promoting electronic payment as alternative payment method 70% of beneficiaries are paid through cash and 30% through electronic payment SASSA has embarked on a strategy to promote the use of electronic payment where infrastructure exists The migration of grant beneficiaries to electronic payment is proving to be fairly successful Already 49.78% of new approved applications opted for ACB (banking services) and Post Bank. Priority 3: Benefit Administration and Payment Service Reforms

  23. Disability Management Implemented the Disability Management Model Standardized disability assessment forms implemented in all regions; Trained medical assessors on the new forms; In total 88 300 medical reviews were conducted which is more than the 10% targeted for 2008/09 financial year Achieved 90% reduction in temporary disability-grant backlogs Priority 3: Benefit Administration and Payment Service Reforms

  24. Priority 4: Fraud Prevention and Detection

  25. Minimizing fraud The Fraud Prevention Strategy was revised and approved Regional Fraud Prevention Committees were established to facilitate information and strategy sharing among stakeholders. SASSA brought 3,930 new fraud cases to court and 3,605 of the accused were convicted; 9,911 fraudsters signed acknowledgement of debt valued at R50,2 million; Priority 4: Fraud Prevention and Detection

  26. SIU project targets 2008/09

  27. Management of Fraud and Error In May 2007 60 000 dormant accounts were identified by two banks namely Standard and ABSA; In February 2009 the subpoenas were served on the banks; All the banks complied with the subpoena except for Ithala Bank. 39 000 accounts with unclaimed benefits and 250 000 failed bank accounts where the details of the beneficiary did not match that of the account holder were identified; The SIU did an analysis of the 39 000 beneficiaries and found that 10% were already deceased, some beneficiaries had non identifiable identity documents and some were listed on CIPRO; and All the 39 000 beneficiaries are currently under review and will be reported on in the current financial year. Priority 4: Fraud Prevention and Detection

  28. SIU Project: Comparative figures

  29. Fraud statistics per province from March 2005 to Jan 2010

  30. Table 6 provide details of the management of fraud and corruption in each of the regions from June 2005 to January 2010; The most number of AODs (9875) was signed in KZN; Other regions with a relatively high number of AODs are as follows: Mpumalanga (3985); Gauteng (4014); and Western Cape (4661). Statistics from each region

  31. Statistics per category of people

  32. Developed and implemented an annual Internal Audit Coverage Plan, which clearly articulates the areas of focus for the financial year Conducted 28 internal audit reviews which included audits that focused on SASSA’s core business and support operations. Conducted 25 compliance inspections The Risk Management Committee continued to be functional and effective Developed Risk Management Framework and Risk register Governance and Administration

  33. Part III: Budget and Expenditure for 2008/09

  34. SASSA Administration Budget & Expenditure for 2008/09; 2007/08 36

  35. SASSA Administration Budget & Expenditure for 2008/09 - Comments The Agency spent 109% of its allocated budget for the period under review resulting in R400 million overspending mainly on Goods and Services The overspending is attributable to inadequate Budget on Handling Fees; the agency’s establishment costs; and roll out to district and local offices Major spending items were on Handling Fees, Lease payments for accommodation, security and cleaning services Most of the planned spending on Capital Assets was suspended in view of the financial constraints facing the Agency and in line with the austerity measures implemented across the agency 37 37

  36. In an effort to address the financial challenges facing the Agency, a request for overdraft was submitted to National Treasury, conditional to the implementation of a cash stabilisation strategy National Treasury, in principle, supported the cash stabilisation strategy A joint task team made of NT,DSD and SASSA has been established to oversee the implementation of the strategy SASSA Administration Budget & Expenditure for 2008/09 – Comments Cont...

  37. Total budget allocation administered by SASSA in 2008/09

  38. As a result of estimated savings in the 2008/09 financial year, driven largely by the lack of adequate administration budget at SASSA, the following additional allocations were approved by MINCOMBUD: An additional R500 million allocated to SRD as a result of rising food prices and the recession increasing poverty; R65 million was taken away from Social Assistance and shifted to Social Administration to manage the additional beneficiary numbers as a result of the policy decisions announced in January 2008 Policy Decisions announced in January 2009 to be accommodated within the current allocations: Old Age Equalisation to 63; Extension of the CSG to age 15 as from January 2009, to be accommodated by the savings in the budget; Adjustment Estimates: 2008

  39. Adjustment Estimates: 2008/09 (Social Assistance and SRD)

  40. Budget Allocation: 2008/09 (SRD with in-year shifts)

  41. Adjustments Budget: 2008/09 (SRD with additional shifts)

  42. Expenditure: 2008/09 (Social Assistance and SRD)

  43. Expenditure: 2008/09 (Social Assistance and SRD)

  44. Expenditure: 2008/09 (SRD Actual Expenditure and commitments)

  45. Social Assistance and SRD expenditure highlighted a saving of R445 million. Commitments for SRD amounted to R52 million. A rollover request for SRD amounting to R52 million was requested to be transferred from the social assistance savings. This was fully funded. Rollover Request for SRD: 2009

  46. Social Assistance expenditure for 2008/09 amounted to R70,093 billion. Actual SRD expenditure amounted to R623 million, with commitments amounting to R52 million. Social Assistance and SRD expenditure highlighted a saving of R445 million. The rollover request for R52 million was approved (in full) for SRD, which was funded from the social assistance savings. Total adjusted expenditure for SRD amounted to R675 million for 2008/09 financial year. Comments on Grants and SRD spending

  47. PART FOURAUDITOR GENERAL’S REPORT

  48. SASSA Administration Audit Findings 2009/09

  49. The Agency has received unqualified audit report for two consecutive years However there are three matters of emphasis for the 2008/09 financial year Asset Management Mobile Trucks- Fruitless Expenditure Irregular Expenditure On the grant budget Audit AG raised the following issues Grant debtors SRD procurement and irregular expenditure Action plans for both Admin and Grant budget have been developed and detailed copies are attached Auditor General Report and Comments

  50. The Agency embarked on a nation wide verification of its physical assets. Duplicate assets and dummy bar codes were identified and are in the process of being removed from the asset register. Assets without bar codes were labelled and were taken onto the asset register Incorrect asset description were identified and corrected on the asset register Assets purchased were labeled and taken onto the asset register Intangible assets were identified and taken onto the asset register Redundant , obsolete and missing assets were identified for disposal and write-off. Remedial Actions - Asset Management

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