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Title: PRESENTATION%20TO%20PORTFOLIO%20COMMITTEE%20ON%20SOCIAL%20DEVELOPMENT


1
PRESENTATION TO PORTFOLIO COMMITTEE ON SOCIAL
DEVELOPMENT 01 MARCH 2011

2
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
  • Short and long-term measures to deal with
    challenges

3
Outline of the presentation
  • The presentation covers the following
  • Part 1 Overview
  • Part 2 Performance Information
  • Achievements against 2009/10 Strategic Priorities
  • Service Delivery Challenges
  • Part 3 Financial Management
  • Budget and Expenditure for 2009/10
  • Financial and administration challenges
  • Part 4 Audit Outcomes
  • Action Plan to address Audit Challenges

4
Mandate
  • 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.

5
Vision
  • A comprehensive social
  • security services that assists people in being
    self sufficient and supporting those in need

Mission
To manage quality social security services to
eligible and potential beneficiaries, effectively
and efficiently.
6
Theme
  • Paying the right social grant,
  • to the right person, at the right
  • time and place. NJALO!

7
Mandate
  • 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.

8

Overview
9
Background
  • The year under review 2009/10 was characterized
    by the following
  • SASSA was grappling with huge deficit for the
    previous year of about R839m and overdraft of
    approximately R410m as at 31 March 2009.
  • The Agency had to maintain a balance between
    improving service delivery and reducing the
    budget deficit
  • SASSA also had to migrate from a modified cash to
    accrual basis of accounting, while changing from
    legacy systems(BAS, Persal and Logis) to an
    Enterprise Resource Planning (Oracle) system

10
Background cont .
  • There has been an increase in the demand for
    services which has been exacerbated by the
    following
  • Significant growth in the number of social
    assistance benefits from 3.2 million in 1998 to
    14 million in 2010
  • Marginal growth in number of employees dealing
    directly with grants administration vs. the
    significant growth in demand for services.
  • SASSAs social assistance system has remained
    largely manual.
  • Investment in systems infrastructure has not
    materialised due to budgetary constraints.

11
Highlights 2009/2010
  • We have increased the number of social grants by
    7.5 from about 13m in 2008/09 to just above 14m
    in 2009/10
  • 10 million are child benefits
  • 2.5m are older persons and
  • 1.26m are people with disabilities.
  • The average number of transactions that SASSA
    dealt with during this financial year increased
    from about 3.7m in 2008/09 to approximately 4,6m
    in 2009/10, excluding payments.
  • The deficit for the year reduced by half compared
    to last year and we reduced irregular expenditure
    from about R69m in the previous financial year to
    just below R2.6 m

12
Grant Uptake for Financial Years 2007/08 to
2009/10
Grant type 2007/08 2008/09 2009/10 Difference Growth Rate
Disability Grant 1,408,456 1,286,893 1,264,477 -121,573 -1.7
Old Age 2,229,550 2,390,543 2,546,657 160,993 6.5
War veterans 1,924 1,500 -284 -424 -18.9
Care Dependency 102,292 107,065 110,731 3,666 3.4
Child Support 8,189,975 8,765,354 9.570,287 804,933 9.2
Foster Child 454,199 474,759 510,760 36,001 7.6
TOTAL 12,386,396 13,026,104 14,057,365 1,031,261 7.5
Grant in Aid 37,343 46,069 53,237 7,168 15.6
  • In 2009/10, there was an increase of 1,031,261 in
    grants uptake which represents a growth rate of
    7.5
  • There is a decrease in the uptake of disability
    and war veterans grants
  • The decrease in DG is due to intensive review
    process which led to 90 reduction in temporary
    disability-grant backlogs

13
Strategic Prioritiesfor 2009/10
  • Priorities for the year under review
  • Customer Care-centred Benefits Administration and
    Management System
  • Improved Organisational Capacity and
  • Comprehensive and Integrated Social Security
    Administration and Management Services.

14

Achievements Against 2009/10 Strategic
Priorities
15
PRIORITY 1
  • Customer Care-centred Benefits Administration and
    Management System

16
Policy and Legislation on Social Assistance
implemented
  • Achieved an increase of 1,031,261 in grants
    uptake which represents a growth rate of 7.5
  • There was a decrease in total disability and war
    veterans grants by about 121,000 and 424
    respectively
  • The decrease on disability grants is largely due
    to intensive review and lapsing of temporary
    disability grants

17
Implementation of Policy and Legislation on
Social Assistance
  • Age Equalisation
  • The target was to reach 129 662 men aged 61 and
    62 by 31 March 2010.
  • In total 100,358 males in this age group 61 and
    62 are in receipt of older persons grants, which
    represents 77.4 of the target.
  • Partial achievement of this target could be due
    to a number of reasons including lack of IDs,
    inadequate marketing of new reforms,
    accessibility of our offices
  • Gradual Expansion of CSG
  • The target was to extend the CSG to about 970,369
    above the age of 14 years.
  • A total of 673 553 children over the age of 14
    are in receipt of CSG, which represents 69.4 of
    the target.
  • Non-achievement of this target was due to the
    fact that effective date of implementation was
    planned to be April 2009 but the actual
    implementation date was finally 1 October 2009.

18
Automated Core Business Systems
  • The target was to develop and implement the
    following systems
  • Improved Grant Application Process (IGAP),
    Management Information System (MIS) and ERP
  • IGAP
  • The target for implementing IGAP in five regions
    proved to be unrealistic due to insufficient
    budget allocation.
  • Implementation of full IGAP is still limited to
    one region in Free State
  • Conducted readiness assessments in all regions.
  • MIS
  • Implemented the MIS registry module in all
    regions which improved decision-making and
    accountability
  • MIS Interface with other government institutions
    was not achieved due to failure to reach
    corporate agreement with key Departments.
  • ERP
  • ERP system was fully implemented, however
    i-modules could not be rolled out to regions due
    to the magnitude and complexity of the work to be
    done.

19
Beneficiary Maintenance
  • Target to increase percentage of beneficiaries
    notified of administrative actions and to improve
    systems for administration and management of
    reviews
  • 97.9 of the targeted beneficiaries were notified
    of administrative actions prior to lapsing of
    grants
  • The development of computerized data quality
    management systems was not achieved due to lack
    of funds to acquire external expertise.
  • Implementation of internal review mechanism
    could not be implemented due to delays in
    approval of legislation.

20
Comprehensive Payment Management System
  • The Comprehensive Payment Management Framework
    was developed and approved but not fully
    implemented due to litigation challenges.
  • Consequently, the Agency is revising its approach
    to improve payment system in South Africa.
  • In addition, the Agency implemented a strategy to
    promote electronic payments as alternatives to
    cash payments, where infrastructure exists. The
    project led to
  • 23.4 reduction in cash payments from 6.3 million
    to 4,8 million
  • ACB payments almost doubled from 1.9m in April
    2009 to 3.8m in March 2010

21
Implementation of Disability Management Model
  • Six targeted regions implemented the prioritized
    elements of the Disability Management Model which
    include the gate keeping, medical assessment and
    medical form modules and this resulted in
    substantial savings for the agency
  • 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.

22
Customer Relationships Management Strategy
  • Planned to develop and implement the prioritised
    elements of the Customer Relationship Management
    and the Integrated Community Registration
    Outreach Programme (ICROP)
  • Customer Relationship Management although the
    strategy was not approved, some critical service
    delivery initiatives were implemented in some
    local offices to improve customer experience.
    These include
  • Enquiry management, queue management, customer
    care charter, booking system and capacity
    building on batho pele principles
  • Development of ICROP Strategy not achieved,
    however
  • Services were taken closer to potential
    beneficiaries, especially to those in the deep
    rural areas using mobile units
  • All regions together with other critical
    government departments have implemented community
    outreach programmes through participation in the
    Premiers Outreach Programme

23
Service Delivery Model
  • Developed the draft service delivery model, to be
    finalised in 2010/2011.

24
PRIORITY 2 Improved Organisational Capacity
25
Improved Organisational Capacity
  • Under this priority, the objective was to enhance
    the Agencys efficiency and improved access to
    its services.
  • Development and approval of most internal control
    policies was achieved, however, there is still
    more work to be done in implementing some of
    these policies.
  • Improved access to SASSA services
  • Most local offices and pay points are accessible
    to beneficiaries although there are still
    challenges.
  • Invested in infrastructure improvement at various
    pay points across country
  • Continued with efforts to market SASSAs services
    .

26
Improved Organisational Capacity
  • Approval of the Corporate compliance and
    integrity Policy was delayed due to consultations
    with staff
  • Implemented benefits verification elements of the
    integrity model
  • 1,994 grant beneficiaries were verified for
    eligibility and existence.
  • 7,440 grant investigations conducted
  • 3,454 people taken to court for grant fraud
  • 314 inspections conducted
  • Implemented Corporate Compliance Model six
    regions
  • 91 inspections were conducted in six regions

27
Improved Organisational Capacity
  • Litigation
  • Implemented the litigation strategy resulting in
  • Reduced number of litigation cases from about 15
    212 in 2008/09 to approximately 2 735 cases
  • Reduced litigation costs from about R40m to R20m
  • Financial management
  • Migrated from cash to Accrual basis of accounting
  • Reviewed and Implemented financial controls,
    policies and procedures in line with GRAP
    standards

28
Human Resources Management.
  • A zero tolerance approach to misconduct has been
    adopted leading to 191 cases finalized and
    varying sanctions imposed
  • 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 AIDS

29
Fraud Management
  • Implemented Fraud Management Strategy which
    resulted in a saving of R180, 9 million
  • 3,454 fraud cases were investigated representing
    115 achievement
  • Over 32 687 fraudulent grants were removed from
    the system in the financial year
  • 223 inspections and 1,260 grant verification
    completed
  • 3 797 social grant fraud cases were brought
    before the courts and 3,491 were finalised with
    3,345 convictions and
  • 8,383 persons signed acknowledgement of debt
    (total value R51.2m)
  • Developed and implemented an annual Internal
    Audit Coverage Plan, which clearly articulates
    the areas of focus for the financial year

30
National Statistics (June 2005 to March 2010)
31
Annual Statistics (April 2009 to March 2010)
Statistics description NW MP GT LP KZN WC FS EC NC Total
AODs collected 525 542 1,097 427 2,878 1,402 413 480 319 8,383
Value AODs 3,514, 457 6,307, 639 6,165, 491 3,662, 394 1,423, 7631 9,498, 563 1,748, 907 4,144, 011 1,930, 902 15,209, 995
PVFS AODs 11,195,800 26,604,670 34,136,100 8,443, 500 54,131,400 31,861,800 10,581,600 12,535,200 8,110, 800 197,600, 870
Prosecutions 354 339 525 333 927 468 249 420 182 3,797
Finalised 287 352 419 286 877 469 249 383 169 3,491
Convictions 285 337 419 280 853 412 230 375 154 3,345
Disciplinary handed over 220 415 200 0 825 196 160 290 55 2,361
Disciplinary prepared 316 415 211 1 1,125 196 165 290 70 2,791
Actual savings 745, 200 1,187, 030 1,464, 870 699, 890 4,378, 740 2,104, 270 672, 750 715, 530 457, 700 12,425, 980
32
Annual Public Servants Stats
Statistics description NW MP GT LP KZN WC FS EC NC Total
Number of prosecutions 251 37 289 254 386 197 232 203 147 1,996
Number of convictions 191 17 263 219 339 168 215 178 130 1,720
AODs signed 365 429 796 244 2,083 289 358 285 194 5,043
Value of AODs 1,952,186 1,232,116 4,169,881 2,521,502 6,192,311 2,391,531 1,399,816 1,920,648 985, 331 22,765.323
33
SERVICE DELIVERY CHALLENGES
34
Grants administration challenges
  • The following are some of the service delivery
    challenges the Agency has been experiencing
  • Service Points
  • 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.

35
Grants administration challenges
  • Record Management
  • 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
  • Reviews
  • 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.

36
Grants administration challenges
  • FRAUD MANAGEMENT
  • 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.

37
Social Assistance TransfersBudget and
Expenditure 2009/10
38
Comments on Grants, SRD and Adjustment Estimates
2009/10
  • 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).

38
39
Expenditure 2009/10 (Social Assistance and SRD)
GRANT TYPE ADJUSTED BUDGET ALLOCATION R millions EXPENDITURE R millions SAVINGS ()/ DEFICIT (-) R millions
Old Age 30,141,044 29,925,939 215,104
War Veterans 22,626 16,754 5,871
Disability 17,074,558 16,613,249 461,308
Foster Care 4,491,348 4,434,441 56,906
Care Dependency 1,509,904 1,434,143 75,761
Child Support Grant 27,008,825 26,669,761 339,064
SUBTOTAL 80,248,306 79,094,287 1,154,019
Relief of Distress 184,412 165,458 18,954
TOTAL 80,432,718 79,259,748 1,172,970
39
40
Adjustment Estimates 2009/10 (Social Assistance
and SRD)
GRANT TYPE ORIGINAL BUDGETALLOCATION (R millions) ADJUSTED BUDGET ALLOCATION (R millions)
Old Age 30,141,044 30,141,044
War Veterans 22,626 22,626
Disability 17,074,558 17,074,558
Foster Care 4,491,348 4,491,348
Care Dependency 1,509,904 1,509904
Child Support Grant 27,008,826 27,008,826
SUBTOTAL (-R80m) 80,248,306 80,248,306
Relief of Distress (R52m) 132,000 184,412
TOTAL 80,380,306 80,432,718
40
41
Budget Allocation 2009/10 (SRD with in-year
shifts)
Grant Type ORIGINAL BUDGET ALLOCATION 2009/10 Rands SHIFTING 1 Rands SHIFTING 2 Rands ADJUSTED ORIGINAL BUDGET FOR 2009/10 Rands
Eastern Cape 24,671,812 2,901,066  27,572,878
Free State 9,205,237   9,205,237
Gauteng 15,925,434 31,506,224 5,000,000 52,431,658
KwaZulu Natal 29,595,836  8,593,221   38,18,792
Limpopo 16,825,836  6,654,301 -5,000,000 18,390,137
Mpumalanga 8,719,831 2,847,188 11,567,019
Northern Cape 6,488,077 6,488.077
North West 10,686,124   10,686,124
Western Cape 9,882,078     9,882,078
Total 132,000,000 52,412,000 - 184,412,000
41
42
AG findings And Progress Report
  • Transfers to households budget
  • (Social Grants)

43
Background
  • The Agency together with DSD got a qualified
    audit opinion for the 2009/2010 financial year
    due to scope limitation on the transfers to
    households budget.
  • The Agency in consultation with DSD, Treasury and
    AGs office developed a three year action plan to
    rectify all the discrepancies identified during
    the 2009/2010 Social Grants Audit.
  • Of the R545million Budget Bid submitted to
    National Treasury on the automation of grants
    application, approval and filing (or record
    management) the Agency was allocated R535million.

44
Audit Findings
  • Exceptions noted during the 2009/10 FY covered
    the following
  • Scope Limitation related to the following
  • Missing Files - 545 076
  • Missing Critical Documents - 159 302
  • Non Performance of Grants Reviews
  • Lack of Accountability on the Social Relief of
    Distress
  • Poor Management of Grant Debtors

45
Progress achieved against set targets
Areas of concern Target for 2010/2011 Progress 2010/2011 Comments on Progress achieved
Missing Files 165 403 128 328 78 completed 100 completion in 4 regions - LP, MP, NW WC
Missing critical documents 209 302 189 106 90 completed 100 completion in 8 regions
Transfer of files across regions 62 153 47 190 76 completed 100 completion in 5 regions FS, GP, LP, NC WC
Progress on Reviews and Life Certificates 1 933 828 966 437 50 completed 4 regions fully completed
Progress on File Destruction 3 069 642 649 955 21 completed, mainly in EC Regions sorting the files and full destruction will follow
46
Comments on progress achieved
  • All the exceptions noted during the audit are
    receiving the necessary attention.
  • However, a significant amount thereof has been
    resolved.
  • All outstanding matters will be resolved by 15
    March 2011.

47
SASSA AdministrationBudget and Expenditure
2009/10
48
2008/09 2010/11 Budget vs. Expenditure
48
49
2009/10 Preliminary Expenditure Report per
Economic Classification
50
2008/09 2010/11 SASSA Administration Budget
Expenditure
  • 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
  • Austerity Measures
  • Promotion of electronic payment channels (banks)
    for social assistance grants beneficiaries
  • Reduction in disbursement fees per beneficiary
    charged by CPCs

50
51
2008/09 2010/11 SASSA Administration Budget
Expenditure
  • Key cost drivers were handling fees (CPCs),
    shared services and litigations.
  • For the year under review 44 was spent on CPCs,
    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.

51
52
Auditor-General Report Comments and Progress on
SASSA Administration budget
53
AUDIT 2009/10
  • AG FINDINGS
  • 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
  • Financial Administration
  • 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

53
54
LATE SUBMISSION
  • The South African Social Security Agency only
    submitted its financial statements for auditing
    on 10 August 2010 and not on 31 May 2010, as
    required by the PFMA.
  • The reason for the late submission was
  • The extension of 3 years granted by National
    Treasury proved to be insufficient to ensure
    readiness for the implementation of GRAP
    accounting and reconstruction of all prior year
    comparative figures
  • During the year under review the Agency changed
    from modified cash to Accrual accounting together
    with implementing the new Oracle ERP system which
    resulted in reconciliations not performed as some
    modules were implemented late.

55
SHORT TERM INTERVENTION
  • The Agency have developed and implemented an
    action plan against the audit findings of the
    AGSA with monthly progress reports to DSD, the AG
    and the Minister
  • 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 staff

56
SHORT TERM INTERVENTION (cont.)
  • EXCO approved a skills audit for the whole
    Finance Branch in particular the Supply Chain
    Management environment
  • 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.

57
LONG TERM INTERVENTION
  • Completion of the restructuring of the Finance
    Branch in line with the rest of the Agency
  • 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.

58
PROGRESS AGAINST ACTION PLAN
  • ACCOUNTS PAYABLE
  • 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
  • CASH MANAGEMENT
  • 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
  • ACCOUNTS RECEIVABLE
  • 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 completed

59
PROGRESS AGAINST ACTION PLAN
  • PAYROLL
  • 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.

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PROGRESS AGAINST ACTION PLAN
  • Asset management
  • R11 million Asset clearing account 9/11
    misstatement
  • Journal has been reversed and re-allocated
  • Asset register is being updated
  • Mass Additions (MA) for Apr to Dec 2010 has been
    posted (GL to FA)
  • Mass additions were only run for invoices that
    were paid and needs to be addressed
  • R13 million Accumulated Funds misstatement
  • The discrepancy remains under investigation
  • Disposal of assets accounting treatment
  • A circular was issued on the treatment regarding
    disposal of assets, with such assets identified
    and being updated on the asset register.
  • Lease evaluation and quantification
  • A register is maintained for all leases
  • Contracts are being updated with correct
    calculations and classifications
  • Transfer of Limpopo properties being addressed
  • Oracle system cost misstatement
  • The cost for the development of ORACLE was
    identified and the asset register has been
    updated with the latest development cost of R25
    million.

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PROGRESS AGAINST ACTION PLAN
  • INVENTORY MANAGEMENT
  • 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
  • GRANT DEBTORS
  • 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 SASSAs 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 challenges

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PROGRESS AGAINST ACTION PLAN
  • CRITICAL POSTS
  • There is a process of urgently appointing 202
    finance staff
  • 4 finance head office specialists,
  • 18 regional consolidation specialists,
  • 137 grants debtors clerks and
  • 43 cashiers
  • 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

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Plan to address SASSA challenges
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Action Plan
  • SASSA has developed a detailed plan to address
    all Agencys challenges ranging from financial,
    administrative and service delivery point view.
  • The implementation of this proposal will be
    divided into short-medium and long term
    interventions.
  •  

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Financial turnaround
  • The financial measures includes
  • Cash stabilisation
  • Implementation of Austerity Measures,
  • Reduction in the cost of handling fees (costs for
    payment of grants) and
  • Recouping funds from dormant accounts
  • Restructuring of Finance function
  • Sourcing outside assistance to address immediate
    challenges

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Service Delivery turnaround
  •  The Agency developed integrated service delivery
    improvement plans, informed by a recently revised
    Service Delivery Model, to address challenges
    which include among others
  • Introduction of queue management,
  • Introduction of booking systems ,
  • establishing satellite and mobile services to
    ensure that services are expanded
  • Opening of over crowded service points on
    Saturdays
  • Introduction of rapid response teams to deal with
    backlogs in areas where service delivery
    pressures are experienced
  • Establishment of stakeholder forums and regular
    engagement with beneficiaries.

67
Administrative Challenges Turnaround
  •  Strengthening of SASSAs Administrative Systems
    is also being addressed through short and long
    term interventions in order to reduce challenges
    with the filing system, lack of reviews and
    completion of life certificates, and Lack of
    accountability in the implementation of social
    relief of distress.
  • The long term objective is to fully automate the
    business process by integrating all registries
    and rolling out automated application process.
  • This automation will reduce risk of human error,
    risk of physical damage as documents will be
    scanned and filed electronically and reduce
    transportation time to move files from one region
    to the other.

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Short - term Plan
  • Emergency Management
  • Filling critical posts including those at
    Management Level as well as CEO post
  • Advertisement of Payment Contracts and
    appointment of payment providers
  •  Appointment of service provider to prepare for
    the next audit
  • Short term Plan
  • Addressing administrative challenges that
    resulted in disclaimer and qualification audit
    opinion
  • Implementing quick wins in terms of improving
    access to SASSA services improved communication
    with beneficiaries
  •  

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Medium to Longer-term turnaround strategy
  • The medium to long term strategy will entail
    implementing
  • A new Social Assistance payment solution that
    will ensure that SASSA pays grants cost
    effectively and efficiently in a dignified manner
    and under safe conditions.
  • Full Automation of key business processes
    including employing biometric technology to
    facilitate access to our systems to ensure
    security and accountability.
  • Undertaking reviews over the MTEF period and
    effective record management.
  • Re-organisation and restructuring strategy -
    SASSA will undertake a skills audit, a detailed
    analysis of staff requirements and the vetting
    process of all SASSA staff. Restructuring,
    Restaffing, Re-skilling will be undertaken.

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Conclusion
  • Overall SASSA has, despite the disclaimer on
    finances, performed fairly well during the year
    under review
  • SASSA has identified challenges affecting the
    institution and it is working tirelessly to
    remedy the situation and
  • In this effort SASSA is banking on support from
    all critical stakeholders, including Hon Members
    of the PC, as it grapples with these many
    challenges.

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  • THANK YOU
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