Loading in 2 Seconds...
Loading in 2 Seconds...
PRESENTATION TO PORTFOLIO COMMITTEE ON SOCIAL DEVELOPMENT 01 MARCH 2011. Purpose of the Presentation. The purpose of this presentation is to present to the Portfolio Committee the 2009/10 Annual Report for SASSA Financial and service delivery challenges
Customer Care-centred Benefits Administration and Management System
Gradual Expansion of CSG
Decreased temporary disability grant application significantly by implementing the three months waiting period before reapplication;
In order to minimise fraud with the processing of disability grants, the Agency introduced Medical assessment forms with serial numbers.Implementation of Disability Management Model
Challenges have been identified around the management of poor performance and consequently Individual Poor Performance Management Guidelines were developed to capacitate supervisors;
In Order to maintain healthy lifestyle and to encourage a wellness culture the following initiatives were implemented:
Voluntary Testing and Counselling where 700 (10%) of the total staff complement participated;
Financial Management programmes were implemented to address budgeting and debt management skills for individual employees;
Health Screening programmes conducted to detect and treat diseases which include blood pressure, cholesterol, sugar screening, HIV and AIDSHuman Resources Management.
Overcrowding at service points due to
Sleepovers and early arrivals at service points;
Long waiting periods in waiting rooms
Repeat visits by clients; and
Lack of adequate office accommodation
Payment Services :
Poor conditions of some of our paypoints
A large number of the pay points do not provide humane basic facilities;
Most rural pay points require urgent infrastructural attention; and
there are still reported cases of exploitation of beneficiaries by merchants and money lenders.Grants administration challenges
The physical infrastructure of some of our registries do not meet the requirements of the OHSA
There is a lack of adequate filing space, resulting in multiple registries which also carries a cost implication
Missing files and other critical documentation
We have significant backlogs in reviews and life certificates resulting in over payments to non-eligible beneficiaries
Sending of notification letters is very costly
Management of reviews is time-bound which results in staff focusing on the reviews instead of new applications
The dependency on the DSD and the DoJ results in either continuing to paying a grant without a mandate or suspending payment leaving vulnerable children without support.Grants administration challenges
The nature of SASSA business lends it to be vulnerable to a high risk of fraud and corruption.
The lack of interdepartmental collaboration, collusion of staff and lack of online interfaces has resulted in an environment where fraud flourishes; and
Given the perceived inability of SASSA to successfully deal with the fraud challenges have resulted in a loss of credibility.Grants administration challenges
Social Assistance expenditure for 2009/10 amounted to R79,259 billion.
Social Assistance and SRD expenditure highlighted a saving of R1 billion.
There were no budget adjustments for 2009, as a result of savings of R1 billion in the 2009/10 financial year, driven largely by the lack of adequate administration budget and lack of reaching additional beneficiary targets given legislative changes
Actual SRD expenditure amounted to R165 million
The rollover request for R52 million to fund previous year SRD commitments was approved (in full).
Transfers to households budget
The Administration budget for SASSA has grown a total of 12% from R4,6 to R5,2 billion between 2008/09 and 2009/10
The total expenditure against budget has decreased from 18% over budget in 2008/09 to 10% over budget in 2009/10.
The Budget vs Expenditure table depicts that over both the financial years the Agency have been overspending on its allocated budget.
The Agency halved the overspending from R839 million reported during the 2008/09 financial year to R490 million due to turnaround strategy interventions which came as a result of Cash Stabilization measures including:
Promotion of electronic payment channels (banks) for social assistance grants beneficiaries
Reduction in disbursement fees per beneficiary charged by CPC’s
Key cost drivers were handling fees (CPC’s), shared services and litigations.
For the year under review 44% was spent on CPC’s, 26% on personnel and 25% on Other Operating expenses
The major spending within other operating expenditure includes:
Leases at R229 million - 15% of total other expenditure
Security at R105 million - 7% of total other expenditure
Cleaning at R34 million - 2% of total other expenditure
Travel and Subsistence at R77 million - 5% of total other expenditure
Communication at R103 million - 7% of total other expenditure
The Agency is projecting a surplus of approximately R426 million in the 2010/11 financial year due to Cash Stabilization initiatives presented in previous slide
The surplus will reduce the accumulative deficit.
The performance related rewards for senior management service members as reflected in the annual report represent their service bonus and not performance incentives.
The Auditor General issued a Disclaimer Opinion as they were unable to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion
Audit Findings included:
Late Submission of Financial Statements
Inadequate systems and record keeping
Material misstatement on sub-ledger accounts resulting in incorrect expenditure, assets and liability reporting on the AFS
Incorrect or non-application of the basis of accounting, GRAP standard
Incorrect or no provision for significant liabilities, in particular legal fees
The Agency have appointed an accounting firm to assist with financial management for a period of one year;
The Agency has reviewed and amended policies and procedures and established structures to monitor the implementation there-of
Specific focused training on both the system and accrual basis of accounting principles have been and are continued to be provided to staffSHORT TERM INTERVENTION
The Agency has identified a need for new posts to be filled and some of the posts are already advertised in order to recruit employees with accrual accounting skills in specific areas of the Finance Branch such as, cash and banking, inventory, assets and financial reporting;
The Agency is busy implementing in-house Change Management initiatives for the Agency as a whole.SHORT TERM INTERVENTION (cont.)
Professionalization of the Finance Branch (registration with professional bodies such as IPFA, SAIPA, SAICA etc.);
Based on the outcome of the skills audit recommendation we intend to continue with reskilling our current employees whiles at the same time we re-deploy , create environment for job-rotation
Ensure that we provide bursaries for under graduates qualifications working together with various auditing firms and professional bodies such as (IPFA,SAICA, SAIPA etc.)
Develop and implement a retention and succession strategy.LONG TERM INTERVENTION
R139 million accrual misstatement
Most of the amounts has been correctly reallocated with R4,2 million remaining unresolved
Accounts payable is soft closed from April to November 2010, with creditors control reconciliations between sub ledger and general ledger completed up to November
Creditor statements remain a matter to be addressed
R35 million opening balance misstatement
The opening balance R35m reallocation of voided payment journal is completed and posted.
Bank reconciliations is completed from April to November and in progress for December and January
R45 million debtors misstatement
AR loans module not implemented
Due to the project in progress to fix prior year data as well as to take on debtors excluded previously, monthly reconciliations on movements have not been completedPROGRESS AGAINST ACTION PLAN
Non Reconciled Payroll Control Account
Reconciliation on payroll control account from April to October is completed with November and December in progress.
Reconciliation of 3rd party is completed up to November 2010 with December in progress.
Note that there are still difference being investigated.
3rd Party payments remain a challenge which needs to be addressed on a more strategic and system orientated level
BUSINESS SUPPORT CENTRE
Non closure of month-ends
Month-ends must be closed in a specific sequence and is dependent on this sequence to ensure a comprehensive “hard” closure
Currently periods have only been soft closed, except for Inventory that is hard closed.
The soft closing is due to the fact that there are duplicate cost manager transactions, reconciliations still needs to be completed and AR Loans data integrity process needs to be finalized.PROGRESS AGAINST ACTION PLAN
R9 million receiving misstatement
Duplicate transactions in cost management have been identified and have now since been resolved.
The only remaining challenge is to complete reconciliations
The UNALLOCATED RECEIPTS account relates to receipts received as debtors’ repayments
The account is used to post monies received or deposits made by debtors to the SASSA’s FNB accounts, wherein a debtor cannot be identified as a result of insufficient reference details.
There is a slow progress on matching receipts to debtors and clearing of the Unallocated receipts account due to several challengesPROGRESS AGAINST ACTION PLAN
There is a process of urgently appointing 202 finance staff:
4 finance head office specialists,
18 regional consolidation specialists,
137 grants debtors’ clerks and
This will address:
AG compliance issues,
Compensate for skills deficiencies,
Bridge skills gap brought on by migration to accrual accounting
Facilitate the creation of a dedicated Revenue and Debt Management Unit
Eliminate the reliance on Grant Administration staff who lack the financial background in collecting and transacting monies due to the Agency
Short term Plan