Presentation of 2006/7 Annual Report to the Portfolio Committee on Social Development

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Presentation of 2006/7 Annual Report to the
Portfolio Committee on Social Development 21
November 2007
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Outline of the Presentation

• The presentation covers the following
• Part 1
• 2006/07 Overview of Strategic and Operational
  Dynamics of SASSA
• Part 2
• Progress Against 2006/07 Strategic Priorities
• Part 3
• Budget and Expenditure for 2006/07 (Financials)
• Part 4
• Auditor-General Report and Comments
• Part 5
• Concluding Remarks on 2006/07

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2006/07 Strategic and Operational Matters

• Part 1

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2006/07 Background and Context

• 2005/06 Social Grants Administration and Payment
  Services was managed by provincial Departments of
  Social Development
• Funding mechanism during period were two (2)
  conditional grants transferred via the national
  Department of Social Development to provincial
  Departments
• 2006/07 Social Grants Administration funds
  transferred to the SASSA for its overall
  management in relation to service delivery and
  management requirements
• 2006/07 Social Grants Payment still with
  provinces to ensure payments and transfers to
  service providers (Cash Payment Contractors)

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2006/07 Background and Context

• Implications of the institutional funding and
  management arrangements
• Only the social assistance administration was
  transferred to SASSA by the end of March 2006,
  which included
• All personnel working within the grants
  administration system, that is, from application
  to payment services were migrated to SASSA
• All systems and mechanisms related to the social
  grants administration systems migrated and
  transferred to the SASSA

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2006/07 Background and Context

• Implications of the institutional funding and
  management arrangements
• Exclude Corporate Services which comprise legal
  services human capital management financial
  administration and management information
  communication technology and other corporate
  communications
• No corporate support services capacity provided
  within the SASSA both at national and regions
  (Head and Regional Offices)
• SASSA given its management, financial and
  administrative responsibilities on the social
  assistance programme had to request provincial
  and national departments to
• Provide strategic and operational wholly
  corporate services support
• Quantify the nature and extent of corporate
  services that must be provided against the social
  assistance administration and payment services
• Cost these services to the SASSA against a
  Service Level Agreement between the national and
  provincial Departments of Social Development and
  the SASSA

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2006/07 Background and Context

• Implications of the institutional funding and
  management arrangements
• Service Level Agreement signed between Minister
  and Members of the Executive Councils (political
  level) and the Heads of Departments and the Chief
  Executive Officer of the SASSA (technical and
  administrative level)
• The level of corporate services provided by
  provinces entirely dependent on the availability
  of resource capacities within the provincial
  departments, that is, staffing systems and
  procedures

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2006/07 Background and Context

• Complex operational environment as a result of
• Establishment and Operationalisation
• Standardization of systems processes and
  procedures on finances, corporate services and
  grants administration
• Establishment of offices
• Recruitment of personnel and
• High expectations of beneficiaries.

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Legislation Mandate of SASSA

• The Legislative Mandate of SASSA is derived from
  SOCIAL ASSISTANCE ACT, 2004 and the SOUTH AFRICAN
  SOCIAL SECURITY AGENCY ACT, 2004
• To provide for the administration of social
  assistance and payment of social grants through
  the effective management administration and
  payment of social assistance

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SASSA Strategic Intent

• To ensure the provision of a comprehensive social
  security
• service against vulnerability and poverty within
  the
• constitutional and legislative framework

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• Key Strategic Objectives
• Ensure a High Performance Institution
• Service Delivery Improvement
• Improvement of Operational Excellence and
• Good Governance.

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Progress Against 2006/07 Strategic Priorities

• Part 2

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Summary of Key Achievements for 2006/07

• The Agency had during the year under review
  achieved the following
• 80 of resource effort was spent on
  establishment, operationalisation and integration
  of the social assistance administration and
  payment services
• Functional separation from DSD at district and
  local levels commenced
• Head office and nine regional offices
  established and
• Transferred more than 6 246 grant administration
  staff from the National and the nine Provincial
  Departments of Social Development to SASSA
• Shareholders Compact signed between the Minister
  and the CEO.

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Summary of Key Achievements for 2006/07 Cont

• To increase access in rural areas, plan to
  purchase 40 mobile units finalised
• The review of the Service Delivery Model was
  started with the view to standardise the delivery
  of services across regions
• Standardised the social assistance administration
  and payment services
• Criminal proceedings have been instituted against
  2 300 of the 12 000 public servants believed to
  have unlawfully accessed social grants
• SASSA terminated payment to 12 000 public
  servants.

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Summary of Key Achievements for 2006/07 Cont

• Key finance and HCM (Human Capital Management)
  policies were developed
• Initial finance and HCM delegations of authority
  approved and implemented.

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Summary of Service Delivery Achievements for
2006/07

• The following tables indicate
• Growth trends in number of beneficiaries
• per grant type and
• Growth trends in number of beneficiaries per
• region.

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NUMBER OF BENEFICIARIES PER GRANT TYPE NUMBER OF BENEFICIARIES PER GRANT TYPE NUMBER OF BENEFICIARIES PER GRANT TYPE NUMBER OF BENEFICIARIES PER GRANT TYPE NUMBER OF BENEFICIARIES PER GRANT TYPE
GRANT TYPE 1 April 2005 - 31 MARCH 2006 1 April 2006 - 31 MARCH 2007 Increase in Number of Beneficiaries Annual Growth Rate
Care Dependancy 90 112 98 631 8 519 9.45
Child Support 7 075 266 7 863 841 788 575 11.15
Foster Care 317 434 400 503 83 069 26.17
Grant in Aid 26 960 31 918 4 958 18.39
Old Age 2 146 344 2 195 018 48 674 2.27
Total Disability 1 315 143 1 422 808 107 665 8.19
Permanent Disability 1 104 318 1 142 440 38 122 3.45
Temporary Disability 210 825 280 368 69 543 32.99
War Veteran 2 817 2 340 - 477 -16.93
Total 10 974 076 12 015 059 1 040 983 9.49
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TOTAL NUMBER OF BENEFICIARIES PER GRANT TYPE

• Total number of beneficiaries have increased by 1
  040 983 from 1 April 2006 to 1 April 2007
• This represents an annual growth rate of 9.49
• Contributing to the growth rate of 9.49 is
• CSG grew by 788 578
• DG grew by 107 665
• FCG grew by 83 069

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NUMBER OF BENEFICIARIES PER REGION NUMBER OF BENEFICIARIES PER REGION NUMBER OF BENEFICIARIES PER REGION NUMBER OF BENEFICIARIES PER REGION NUMBER OF BENEFICIARIES PER REGION
PROVINCE 1 April 2005 - 31 MARCH 2006 1 April 2006 - 31 MARCH 2007 Increase in number of Beneficiaries Average Annual Growth Rate
Eastern Cape 2 104 830 2 249 327 144 497 6.87
Free State 680 292 724 371 44 079 6.48
Gauteng 1 317 076 1 407 003 89 927 6.83
KZN 2 516 847 2 942 380 425 533 16.91
Limpopo 1 643 449 1 754 453 111 004 6.75
Mpumalanga 834 813 902 120 67 307 8.06
North West 904 771 1 003 256 98 485 10.89
Northern Cape 218 020 234 594 16 574 7.60
Western Cape 753 978 797 555 43 577 5.78
Total 10 974 076 12 015 059 1 040 983 9.49
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Total number of beneficiaries per regions

• Greatest increase in no. of beneficiaries-KZN at
  425 533. Represents 16.91 growth rate
• Eastern Cape-second largest increase-144 497
  beneficiaries. Represents a growth rate of 6.87
• North West, however, represents the second
  largest increase in percentage terms at 10.89
• The Northern Cape represents the smallest
  increase in number of beneficiaries-16574 and
• Western Cape represents the lowest growth in
  percentage terms at 5.78

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Achievements for the programme Customer Services

• Function
• To provide a coordinated and integrated grant
  administration and
• payment service.
• Achievements
• Implementation of Improved Grants Administration
  Process (IGAP) in Eastern Cape, Mpumalanga,
  Western Cape and KwaZulu-Natal regions
• Implementation of IGAP integrated with MIS in
  Free State and Eastern Cape
• Customer Charter was developed and
  implemented-Informs beneficiaries of their rights
  and quality of service
• Access to services improved in some rural areas
  through outreach programmes and
• Grant Application Forms standardised throughout
  the Agency.

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Achievements for the programmeInternal Audit
Risk Management

• Function
• To provide internal auditing services and to
  ensure compliance with policy and
• prescripts.
• Achievements
• A Risk and Fraud Strategy was developed and
  implemented
• 2 300 public servants prosecuted for grant fraud
• 257 files handed over to provincial departments
  for disciplinary action
• 1 150 acknowledgments of debt signed to the tune
  of
• R6 132 382 and
• About R5 million recovered thus far.

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Achievements for the programme Corporate
Services

• Function
• To provide corporate support services.
• Achievements
• Transferred more than 6 246 grant administration
  staff from the National and the nine Provincial
  Departments of Social Development to SASSA
• Most senior managers positions filled
• Implemented HR policies and procedure manuals
• Skills Audit conducted at Head Office and
  regions
• 300 staff recruited and appointed, to capacitate
  support functions.

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Achievements for the programmeCommunication and
Marketing

• Function
• To provide strategic communication and marketing
  services to SASSA.
• Achievements
• Developed and implemented a Communication
  Strategy
• All Parliamentary questions replied to timeously
• Participated in Government Izimbizo
• Produced and distributed promotional materials
• SASSA newsletters were produced and distributed
  at head office and regions.

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Achievements cont

• Public education of SASSAs services through
  adverts and interviews via electronic and print
  media
• SASSA media launch hosted on 30 March 2007
• National Call Centre tender finalised and
• Marketing material uniformly branded.

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Achievements for the programmeFinance

• Function
• To provide financial management services by
  ensuring integrated budget planning,
• expenditure monitoring and revenue management.
• Achievements
• Single Budget established through the integration
  consolidation of provincial budgets
• A Bid Committee established and functional
• Basic Accounting System implemented in SASSA
• Implementation of PERSAL in all regions and

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Achievements for the programme ICT

• Function
• To provide information and communication
  technology services.
• Achievements
• Transversal ICT Systems including SOCPEN, BAS,
  LOGIS, PERSAL and Home Based Electronic Document
  Management systems implemented
• ICT infrastructure established at Head Office and
  in all 9 regional offices, including some
  districts and
• The first phase of the MIS project completed with
  100 of all beneficiary files processed.

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Achievements for the programme Strategy
Business Development

• Function
• To develop innovative strategies and mechanisms
  to improve service delivery.
• Achievements
• Overall responsible for the complex and daunting
  separation and integration of provincial social
  grants administration into SASSA Regional,
  District and Local Office Levels through
• Design of separation, ring-fencing and
  integration policy, processes, systems and tools
• Responsible for finalising and tabling of SASSAs
  second Strategic Plan 2007/8 2009/10 and
• Facilitated the accounts configuration and funds
  flow between Agency and DSD.

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Achievements Cont

• Facilitated the national review of the service
  delivery macro-value chain comprising
• applications management
• approval management
• payments management
• beneficiary maintenance and
• stakeholder management.

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Budget and Expenditure for 2006/07 (Financials)

• Part 3

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Expenditure for 2006/07 in terms of Economic
Classification
FUND ALLOCATED BUDGET AUDITED YTD
  2006/07. 2006/07. EXPENDITURE
  R'000 R'000 AS A
Compensation of Employees 880,707 710,683 81
Contractor Payments 2,015,056 2,245,250 111
Other Goods Services 994,993 699,435 70
Transfers Subsidies 100,693 101,537 101
Payment for Capital Assets 200,923 62,276 31
Revenue Transfers 4,192,372 3,819,181 91
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Explanation on Expenditure for 2006/7

• Compensation of Employees
• Budget was R881 million
• Expenditure amounted to approximately R711
  million (which is 81)
• Under spending is attributed to slow recruitment
  process which the Agency experienced throughout
  the financial year and
• As at 31/03/2007 less than 70 of the critical
  positions were filled
• Contract Payments
• Budget allocation was R2.0 billion
• Expenditure amounted to R2,2 billion (which is
  111)
• This is resulted in an over-expenditure of R200
  million
• The number of beneficiaries increased by 10,7
  during 2006/07 and
• This is close to 100,000 beneficiaries per month.

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Explanation on Expenditure for 2006/7

• Goods and Services
• Budget was R995 million
• Expenditure was at R699 million a spending level
  of 70
• The under spending was due to
• Invoices received after financial year end
• Invoices that were received but remained unpaid
  by the end of the 2006/07 financial year and
• This contributed to projected expenditure
  accruals and commitments amounting to R278
  million which has not yet been paid.

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Explanation on Expenditure for 2006/7 cont..

• Transfers and Subsidies
• Budget was R101 million and
• Expenditure is R102 million , which represents
  101.
• Payment for Capital Assets
• Budget was R201 million
• Expenditure is R62 million, which represents 31
  
• Provision was made for acquisition of furniture
  and ICT equipments for staff and
• Due to the slow recruitment process the budget
  was not fully utilised.

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Auditor-General Report and Comments

• Part 4

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Report of the Auditor-General

• Basis for qualified opinion
• Scope limitation on the audit and
• Fraud investigation.
• Emphasis of matters
• Basis of accounting (departures and deviations).
• Other matters
• Identified weaknesses in internal controls
• Material non-compliance with applicable
  legislation
• Material corrections on the financial statements.

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Report of the Auditor-General

• Addressing the Auditor-General Concerns through
  the establishment and implementation of a
  financial management plan

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Challenges

• Completion of the roll-out of SASSA
  infrastructure, recruitment of personnel and
  finalisation of all policies and procedures
• Rooting out fraud and corruption
• Increasing accessibility of services rural and
  semi-rural
• Creating an enabling environment for current and
  potential beneficiaries and
• Reducing the number of grant application appeals.

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Concluding Remarks on 2006/07 Financial Year

• Part 5

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Concluding Remarks

• SASSA is an emerging organisation
  (administration), which comprises 9 different
  provincial grants administration and the grants
  administration in national department
• There are still a number of complex challenges
  that need to be addressed regarding systems,
  processes and resourcing and
• With dedication and commitment SASSA will
  definitely become a world class organisation.

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Thank You!