South African Social Security Agency Annual Report 2010/11

NCOP Health and Social Services

21 November 2011
Chairperson: Ms R Rasmeni (North West, ANC)
Share this page:

Meeting Summary

The South African Social Security Agency presented its Annual Report 2010/11. The Agency described its three priorities as the customer care-centred benefits administration and management system, improved systems integrity, and increased access to social security services.

The Agency noted an increase in the demand for its services, particularly child support grants. The province with the most amount of grants was KwaZulu-Natal while the Northern Cape had the least amount of grants.

The Agency had addressed improved systems integrity. The Agency saw a decrease in the amount of grievances reported from its customers. Rates of fraud had also decreased.

On the third priority of increased access to social security services, the Agency discussed the Integrated Community Outreach Programme, which had allowed more communities to have access to social grants. The Agency also noted weaknesses in leadership within the Agency, which needed to be addressed.

Commenting on the budget, the Agency noted that it had implemented austerity measures to cut unnecessary spending. There was also a programme to recover the grant monies from those that were ineligible for the grant.

The Agency touched on its future challenges. These included designing the most appropriate structure for the Agency, improving service delivery, and improving on cost efficiencies. Additional challenges included the implementation of the austerity measures and the moratorium on the filling of posts.

The Committee was receptive to the presentation and praised its improvement from the previous year. Its main concern pertained to the lack of clarity about each type of grant. The Agency should try to make it more clear how to apply for each grant and what each grant entailed.

The Agency agreed that one of its key challenges for the future would be to bolster consultation and communication within the community.


Members said that people did not know what types of grants to apply for. The Agency should better organize and explain the levels of grants. The other problem was relating to payments. At the bank, one had to come on a particular day to get money. This should be reformed. Members asked if foreigners applied for grants, asked for clarification on the memoranda of understanding with some of the provincial departments, what the Agency's plans for pay points in underdeveloped areas were, why the child grant process was slow, and about the security of the workers in the field offices.


Meeting report

The Chairperson acknowledged apologies on behalf of the Minister and Deputy Minister of Social Development.

Presentation on the Annual Report from the South African Social Security Agency
Ms Virginia Petersen Chief Executive Officer, South African Social Security Agency (SASSA), presented  achievements against 2010/11 strategic priorities, budget and expenditure for 2010/11 and challenges.

Since the agency’s establishment there had been a steady increase in the demand for services and subsequent increase in the workload of its staff. The increase in demand for services had been exacerbated because of two main reasons. The first was the marginal growth in number of employees dealing directly with grants administration versus the significant growth in demand for services. Beneficiary to staff ratio had consistently increased. The second reason was the Agency’s social assistance system which had remained largely manual and lacked integration. Significant growth in the number of benefits from 10.9 million in 2006 to 14.9 million in March 2011 had had a negative impact on the quality of service delivery.

SASSA’s priorities were under review. These priorities were: the customer care-centred benefits administration and management system, improved systems integrity, and increased access to social security services.

Ms Petersen noted the achievements in the first priority - customer care-centred benefits and administration and management system. Of the 14.9 million social assistance benefits given in 2011, 2.7 million were old age grants, 958 war veteran grants, 1.2 million disability grants, 58 000 grants-in aid, 512 000 foster child grants, 112 000 care dependency grants, and 10.4 million child support grants. The number of child support grant benefits was 10 371 950 in March 2011 as compared to 7 075 266 in March 2006. Old age grants increased steadily over the years, whilst the disability grants had been decreasing since the 2008/09 financial year as a result of reviews. War veteran grants had also steadily decreased over the years because of attrition rates. The number of grant benefits and percentage growth over a five-year period by grant type grew by 6.2% in 2010/11.

Ms Petersen noted the number of grant benefits that each province had received. KwaZulu-Natal received the largest number of grant benefits with 3 710 581, followed by the Eastern Cape with 2 585 593, then Limpopo with 2 162 624. These provinces were the key drivers for the social security system. The Northern Cape received the least amount of grant benefits with 387 320, mainly because of its low population.

Ms Petersen spoke about the Agency’s Payment System. Grant payments were still largely cash-based. Significant progress was made on migration of beneficiaries from cash payment to Automated Clearing Bureaus (ACBs). In the year under review, a total of 47.33% of payments were made through ACBs or banks, translating into a 16.08% percent increase. The cost of administering social assistance grants through cash payment contractors was reduced to R30.53 to R33.52 [per transaction] resulting in a saving of almost 9%. The Agency aimed to review the current system and develop a new payment strategy.

Ms Petersen commented on the Improved Grant Application Process (IGAP) intended to reduce turnaround time for social grant applications and implemented in one of the districts in Free State. The Agency had achieved on average a turnaround time of nine days, which was an improvement from the previous 21 days for processing of new social grant applications. This was made possible by the implementation of a three step model comprising of immediate capturing and verification of applications on-site, followed by the issuing of a letter on the outcome to the applicant before leaving the Agency offices. KwaZulu-Natal and Gauteng regions recorded the highest number of social grants applications processed within 30 days whilst the Northern Cape recorded the lowest number of applications processed within the same period.

The Disability Management Model was developed to standardize the medical assessment process in all the regions. The Agency managed to undertake 112 363 medical review assessments against a target of 298 752. All doctors contracted to the Agency were trained and accredited by the Agency to conduct disability medical assessments. In addition, the Agency implemented the standardized medical assessments forms in all regions, excluding the Eastern Cape as the serialised medical forms were not in sync with the work-flow medical form issuance system. The Agency continued to monitor and evaluate the effectiveness of the prioritised elements of the disability management model. The Agency had also entered into Memoranda of Understandings (MOUs) with some of the provincial health departments for assistance in conducting disability assessments.

Ms Petersen transitioned to speak about priority two: improved systems integrity. Change management (organizational cultural reform) initiatives were undertaken to improve skills, competencies and professional conduct. The ethics audit conducted within the Agency revealed a significant decrease in the number of grievances relating to job descriptions and performance management including staff development. The Agency had made progress in inculcating the understanding between performance expectation and actual performance. In addition, the ethics training was also provided to 3 165 staff members across the regions. The training served to communicate the vision, mission, and expected conduct as well as the responsibility of staff members to report incidents of breach of the Code of Conduct and Ethics.

Ms Petersen talked about the implementation of the integrity model. The Agency responded pro-actively to fraud and corruption by implementing the integrity model. The integrity model introduced a paradigm shift, from focusing on detection and investigations to validation of the eligibility of beneficiaries for social grants including life verification and to confirm the existence of the beneficiaries. A total of 132 603 beneficiaries were verified for eligibility and existence, with a total of 7 133 found to be fraudulent. The Agency, through the Special Investigating Unit (SIU), continued with investigating and prosecuting persons found to have defrauded the system. A total of 2 828 persons were brought before the courts in the year under review bringing the total convictions to 17 477 since the inception of the project in June 2005.

The Agency had through the implementation of the legal services model drafted and vetted 101 contracts and service level agreements in accordance with processes contained in the framework for contract management. The Agency had managed to reduce the number of litigation matters from 2 744 to 1 944 during the 2010/11 financial year. The reduction in liability costs on litigation matters in the reporting period translated into a 71.8% decrease. There was a drop in the total number of litigation cases per annum from 61 498 to 1 944, a reduction of 59 544 litigation cases over the four years (2006/07-2010/11). This represented a 96.8% reduction in litigation cases. KwaZulu-Natal had the highest number of litigation cases with 53 004 followed by the Eastern Cape with 18 915 over the five year period.

Ms Petersen moved to discuss priority three: increased access to social security. The goal of the Integrated Community Outreach Programme (ICROP) was to increase access and ensure equity to social assistance services especially in rural and semi-rural areas. A total number of 675 outreach programmes were conducted in 121 municipalities across the country during the period under review. 72,425 new beneficiaries registered through ICROP. The implementation of ICROP had not only increased the accessibility of social grants but also had led to a significant increase in Social Relief of Distress Award (SRD) assistance to poor households. An estimated 3 766 households that experienced undue hardships were issued with temporary relief measures in the form of vouchers, food parcels and assistance with other material needs. The success of ICROP could be attributed to effective partnership with the Departments of Social Development, Home Affairs, Health and the South African Police Service (SAPS) for integrated service delivery. Regions such as the North West also established eleven satellite offices in an effort to improve access to the Agency’s services.

Ms Petersen talked about human capital reforms, and focused specifically on leadership. For 2009/10 there was a reported weaknesses in leadership within the Agency, which contributed to a disclaimer audit option. Subsequently, the Agency focused on providing targeted skills development initiatives to enhance the leadership skills in different employee categories. This entailed the implementation of various leadership programmes that included the following: emerging management development programme, advanced management development programme, and the executive leadership development programme. Human capital reforms also focused on skills development. A staffing analysis of the posts within the Grants Administration Value Chain had been conducted. This represented 70% of the total employee capacity within the entire Agency. The staffing analysis identified service delivery requirements and capacity gaps.

Ms Petersen commented on the key policy developments and legislative changes. On 16 September 2010 the Social Assistance Amendment Act 2010 (Act No. 5 of 2010) came into effect. This was to enable applicants and beneficiaries who disagreed with the decision of the Agency to request it to reconsider its decision. An amendment to the Regulations of the Social Assistance Act 2004 was published in the Government Gazette dated 15 March 2011, applicable retrospectively from 01 December 2010. This amendment dealt with the eligibility of Social Relief of distress to a person who had been affected by a disaster as defined in the Fund-raising Act 1978 (Act No. 107 of 1978) or the Disaster Management Act 2002 (Act No. 57 of 2002). Another interesting development in the year under review was the recognition of the Agency’s Bargaining Forum as per Resolution 1 of 2006.

Ms Petersen spoke about the budget and expenditure for 2010/2011. The Agency’s total revenue for the period under review which was mainly transfers from the Department of Social Development (DSD) including its own revenue, amounted to R5.6 billion while total expenditure amounted to R 5.2 billion or 91% of the budget. This left a total budget savings of R462.7 million. The bulk of the administration budget was allocated to cash contractors’ fees and this was where the majority of the saving was derived. In this regard, the Agency during the period under review realized a reduction on the expenditure related to the payment of cash payment contractors’ fees. This was as a result of negotiations between the Agency and the contractors on fees paid to them for the disbursement of grants to beneficiaries. At the beginning of the period under review, the Agency had an accumulated budget deficit of R884 million. This resulted from the budgetary constraints experienced by the Agency since the 2007/08 financial year. In an effort to deal effectively with budget constraints, the Agency had to put in place measures that ensured efficient spending such as scaling down on unnecessary expenditure.

Ms Petersen further elaborated on the revenue and expenditure strategy. There was an implementation of austerity measures across the agency. Although the cost containment measures were implemented, the positive impact and gains that would have been derived from implementing the measures was negatively impacted upon by budget adjustments or funds shifts to items which were targeted to derive savings or incur less expenditure such as communication, travel and subsistence. Travel and subsistence expenses were incurred mainly due to extensive travel arising from audit activities. Austerity measured played a major role in and underpinned the approach to the allocation process. The Agency encouraged the migration of beneficiaries to banks with a view to reduce exorbitant disbursement fees charged by Cash Payment Contractors. The Agency initiated the process of accelerating efficiencies in its operations in particular with the disbursement of social grants by encouraging beneficiaries to shift to other cost saving payment methods. In the year under review, a total of 47.33% of payments were made through ACBs or banks whereas during 2009 31.25% were paid through the ABCs or banks. This translated into a 16.08% increase. This number was envisaged to increase as beneficiaries, especially those residing in urban areas, were becoming more aware of the better option on transacting through the banks. The banking infrastructure in rural areas was also improving and expanding.

Ms Petersen noted that there was also a recovery of grants monies paid into dormant beneficiary accounts. The aim of this pillar was to recover grant monies from beneficiaries who were found ineligible to receive the grant. The Agency collaborated with law enforcement agencies in ensuring that authority was granted to recover these monies. An amount of R 106 896.52 was recovered from dormant beneficiaries’ accounts. First National Bank and Postbank were still to provide data on the recoveries. A total of 2 000 deceased beneficiaries with dormant accounts were identified as being overpaid and a process had been initiated to recover these overpayments.

Ms Petersen presented the Auditor-General's report and comments. The Auditor-General had reported that the financial statements presented fairly, in all material respects, the financial position of the South African Social Security Agency as at 31 March 2011, and its financial performance and cash flows for the year then ended in accordance with South African Standards of Generally Recognised Accounting Practice (GRAP) and the requirements of the Public Finance Management Act o 1999 (Act No. 1 of 1999) and the South African Social Security Agency Act 2004 (Act No. 9 of 2004). As disclosed in note 35 to the financial statements, the Agency had restated various financial statement items due to a correction of prior period errors. As disclosed in note 20 to the financial statements material impairment of debtors  were incurred as a result of a write off of irrecoverable departmental debtors. The prior year impairment was done as part of the restatement of corresponding figures as per the paragraph above.

Ms Petersen next presented the challenges that SASSA faced. These included designing the most appropriate structure for the Agency, improving service delivery, and improving on cost efficiencies. Additional challenges included the implementation of the austerity measures and the moratorium on the filling of posts.

Ms Petersen recommended that the Committee note the presentation of the Agency’s Annual Report for 2010/2011.

Discussion
Ms M Makgate (North West, ANC) stated that it was clear that things were becoming better. There should have been more clarification on the types of grants. People didn’t know what types of grants to apply for. SASSA should better organize and explain the levels of grants. The other problem was relating to payments. At the bank, one had to come on a particular day to get money. This should be reformed.

Ms D Rantho (Eastern Cape, ANC) congratulated SASSA on its achievements. There were fewer complaints within the community. The community had started to have engagement with SASSA. There were reports from people within her constituency that they sometimes had to go to SASSA offices which were often too far away and expensive to go to. There were also governmental employees with disabled children who applied for grants and received them. These people were teachers. Did SASSA receive the paybacks from those people, or was there no record of these actions? Did foreigners apply for grants? If not, what did these people do? Many of these people could not find jobs because of their status. Furthermore, on the issue of people found to be fraudulent, when these people were brought before the court, were these people just the ones working within the department, or also community member?

Mr M de Villiers (Western Cape, DA) asked for the names of the doctors serving the people in the rural areas. He asked for clarification on the MOUs with some of the provincial departments. The audit and check of payments did not talk about all municipalities. There was concern over the vacancy rate that was around 60%. There were a number of critical posts that were not filled.

The Chairperson spoke about pay points in underdeveloped areas. What were the plans for this? The child grant process was slow - why was this process slow?

Ms Petersen first said that there was a difference between grants and aid. Care dependency was in respect of a child with a disability.

Mr Bandile Maqetuka, Executive Manger: Grants Administration, SASSA, stated that if a child was mentally or physically disabled and certified by a doctor, he or she could qualify for aid.

Ms Petersen talked about contractors. In April, there would be a new policy where SASSA could tell where the contractors came from.

Ms Petersen noted that there was a list of all the pay points on file.

Mr Maqetuka stated that there was not proper consultation with the communities. People should be informed when services were available.

Ms Petersen emphasised that it was difficult because there was poverty growth in other communities. Consultation and conversation were the most important to connecting with communities. SASSA needed to streamline because there was poverty growing in other areas. People should not think that SASSA was closing the office, but know that they were just moving to another area.

Ms Rantho asked about the security of the workers in the field offices.

Ms Petersen stated that usually if a worker was deployed, SASSA would try not to make the distance between the offices at which he or she was working at too great. SASSA would be extending its services across a greater area, so this would require workers to travel more.

Ms Petersen said that the Special Investigating Unit (SIU) had been the account holder for monies and debt collection. SASSA was currently reviewing this. SASSA paid the SIU R3 million per month. SASSA should ask itself what it was going to do. SASSA should transfer skills so that it could do its own debt collection.

Ms Thandi Sebanyoni, Executive Manager, SASSA, responded to Ms Rantho’s previous question and stated that teachers had been taken to the courts regarding care dependency grants. There was a threshold and anybody who did not meet that threshold did not get the grand.

Ms Sebanyoni stated that both public servants and private beneficiaries were brought before the court.

Mr Maqetuka stated that foreign people could apply for grants. Refugees qualified. For child support, it was easier to get money as a permanent resident. However there were some grants for which foreigners were not eligible.

Ms Petersen stated that together with the DSD, the Agency had met with the National Credit Regulator. They were working in Gauteng. The departments needed to focus on the lone shark at the pay point. What happened at these points must be examined. Security needed to be strengthened.

Ms Petersen addressed the question about critical posts. Beginning on 01 December, SASSA would fill 1 100 posts. Pay points would also be developed. 300 pay points were not enough.

Ms Petersen talked about orphans and foster care. Orphans were put on a child support grant instead of going to foster care. Applications must go through the children’s court. Here an audit was given, and then it became SASSA’s responsibility. SASSA had worked on improving foster care.

Mr Villiers asked if SASSA must register with some kind of financial organization to collect debt.

Ms Rantho asked if SASSA could create programmes and go to the communities to educate people about grant and social security issues.

Ms Makgate stated that care dependency was a problem in her constituency and asked when a child was considered an adult?

Ms Petersen stated that when a person turns 19 the person was no longer a child. In 99% of cases, the child would become a disability adult.

Ms Petersen said that pamphlets had been created to explain the grant process, but that this should be simplified. SASSA should work to increase communication with the community.

Ms Petersen stated that SASSA did not need to be registered with the Financial Services Board.

The Chairperson thanked SASSA and the meeting was adjourned.



Present

  • We don't have attendance info for this committee meeting

Download as PDF

You can download this page as a PDF using your browser's print functionality. Click on the "Print" button below and select the "PDF" option under destinations/printers.

See detailed instructions for your browser here.

Share this page: