Budget process and sector analysis: Committee Section briefings; Department of Social Development, SASSA & NDA on their 2014 Strategic Plans, with Deputy Minister present

Social Development

02 July 2014
Chairperson: Ms R Capa (ANC)
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Meeting Summary

The Committee Section briefed the Committee on the budget vote process, and gave an analysis of the social development sector, and the documents presented by the Department of Social Development (DSD or the Department) on its strategic plans and budget. Some significant points were highlighted from the documentation on which it was suggested that Members needed to call for further details or explanations. These included whether the figure of 11 million children who would be assisted under the social assistance programme would include the 2.35 million children whom UNICEF found were not currently being assisted, whether the DSD was able, currently, to deal with programmes it had inherited from the former Department of Women, Children and People with Disability, what arrangements there were with other departments on Older Persons programmes and the Golden Games initiatives, and lack of visibility of the National Development Agency (NDA) in rural areas.

The Department of Social Development, with input from the Deputy Minister, outlined the Strategic Plans for 2014 of the DSD and entities. Social protection was a cross-cutting matter that not only addressed social issues but also dealt with an array of issues related to the well-being of citizens, and so DSD played an important coordinating role, and intended to set basic social guarantees that extended beyond the provision of grants. The 1997 White Paper on Social Welfare was being reviewed. DSD would be overhauling the way in which social services were delivered, particularly focusing on quality by social service workers, proper understanding and delivery on roles by all stakeholders from the public and civil society sectors, with sufficient funding. The development of children was a key focus area, but retirement provisions were also being revised. Community development interventions would be strengthened, particularly food and nutrition. Improved data collection and monitoring would be achieved through the National Social Protection Information System (NSPIS). Describing some of the programmes, the DSD noted that it was expected that 16.6 million people would get social assistance by March 2017. The Old Age Grant would be revised to apply universally. The appeals process on grants would be improved. Larger amounts of funding would be made available to South African Social Services Agency (SASSA) to enhance administration on grant payments.  The White Paper on Social Welfare was to be reviewed, and more efforts were underway, including funding and regulation, to increase social worker numbers. Community development would be promoted through Community Works Programmes and NPO registrations.

The budget was R117.8 billion and was expected to increase to R146.1 billion by the 2015/16 financial year, with cash transfers in the form of social assistance constituting the biggest driver of growth. The budget was under considerable strain because of the additional mandates that the Department had assumed. The DSD and SASSA had too little to cover all running costs. Although questions had been raised about the effectiveness of the loveLife programmes, it had received R5.1 million, substance abuse would be tackled through conditional grants, and R41 million was allocated for food security and nutrition programmes under NPOs. More detail would be provided on Early Childhood Development (ECD) at a later briefing.

Members asked what was being done to retain social workers,

To monitor NGOs, the selection criteria for Green Door programme participants, and whether skills had been imparted through NGOs and cooperatives. Several Members felt that loveLife was not visible or effective enough and suggested that allocations should rather be re-directed to the SA National Council on Alcoholism and Drug Dependence, which was doing significant and visible work in communities. They asked if the DSD had financial capacity to take over work from the former Department of Women, Children and People with Disability, asked if sustainable funding models for NGOs could not be established sooner than the target date of 2017, and when the National Disability Rights Policy would be finalised, as well as any plans, pending the amendment of the Adoption Act, to try to reduce the red tape in adoptions. Members also questioned if the fraud management system was fully functional, whether SASSA was providing value for money, why consultancies had increased, and why skills were not retained in the ECD sector.

The South African Social Security Agency (SASSA) outlined the achievements and challenges since 2011, and said that 30.8% of the South African population, which represented 15.9 million people, were currently receiving grants. Some of the growth trends which provided further detail on take-up rates were negative, but this was largely due to the re-registration process. The strategic aims of the programmes included improving the take-up rate of those eligible for child support grants, particularly in the 17 and 18-year old categories. It had been found that, contrary to popular belief, only 50% of young mothers were claiming the Child Support Grant, and SASSA aimed to improve the take-up rate and to deal with backlogs on Foster Care Grants. It aimed to improve service delivery and community outreach. One of the major initiatives to establish a credible National Payment Database was continuing. People had been asked to re-register, payments were checked to ensure that they were made to real individuals, and savings of over R1 billion had been achieved by cleaning up the system.   It was to introduce biometric verification for 21 million grant recipients. The payment tender would be awarded in this year. An organisational overview was under way, to find the ideal staff component, but one worrying factor was that the Debtors Book was to be handed over to SASSA. The budget was decreasing in real terms, because of inflation, by R10 million until 2016, although the verification exercise had resulted in savings that would be spent on the automation project. 54% of the budget was allocated to Head Office and 46% between the other regions.  SASSA said its risks included the payment tender, the fact that Disaster Management interventions were tending to last longer because o the scale of disasters, deductions, and continuing fraud, although SASSA was dealing with it and had suspended 58 officials recently.

Members wondered why some of the targets for tackling poverty were low, wondered if there was enough consultation with communities on projects and ECD centres, asked for more details on food security programmes and wondered if privately-run ECD facilities were getting funds from the DSD. They urged better monitoring and evaluation, and for DSD to ensure stricter coordination.  

Meeting report

Parliamentary Budget Process: Committee Section briefing
Ms Lindiwe Ntsabo, Committee Secretary, provided a brief summary of the roles and responsibilities of herself and the rest of the Committee’s Support Staff. 

She then explained the process by which the Strategic Plan  of the Department of Social Development (DSD or the Department) was tabled and how its corresponding budget was proposed, debated and subsequently approved. It was explained that because of the timing of the national elections held in the current year, Parliament was under significant time constraints to pass the budgets in order that departments get their allocations from National Treasury, and so not all the normal processes for public engagement would be able to take place.

Ms Yolisa Nogenga, Committee Content Advisor, briefed the Committee on the legislation that informed the budget, the role players within the budget approval process, as well as the details related to the budget cycle itself (see attached presentation for full details).

Social Development Sector Analysis and analysis of Department’s priority areas and budgets: Committee Researcher’s briefing
Ms Siyavuya Koyana, Committee Researcher, briefed the Committee on the key priorities of the Department of Social Development for the current year. She also provided an overall analysis of the budget and noted some crucial challenges that that she believed were important to highlight, which the Committee should discuss with the Department.

In summary, she stated that the DSD’s key strategic priorities were to:
- Provide food for all
- Combat substance abuse
- Promote Early Childhood Development (ECD)
- Expand child and youth care services

Speaking to the budget, she noted that the Department’s budget had increased from R118.5 billion in the last year, to R128.7 billion in the current year. This represented an 8.7% nominal increase and a 2.3% real increase in allocated funds.

The total amount of R128.7 billion represented 21.9% of the National Budget. The significance of this amount further emphasised the importance of the Department’s mandate. 99% of this amount was allocated to transfers and subsidies, while only 0.5% was assigned to current payments. The figure of
R120.9 billion, the most signification portion of the proposed spending, was intended to be used for social assistance administered by the South African Social Security Agency (SASSA).

Moving to the challenges, Ms Koyana noted that the DSD planned to reach just over 11 million children through the social assistance programme in the current year. Research conducted by the United Nations Children’s Fund (UNICEF), SASSA and the Department of Social Development (DSD) had found that 2.35 million children were currently excluded from the system. She said that an important question was whether the Department’s target included those children identified in the UNICEF report as being excluded. If not, then the Department should be asked how it intended to deal with this issue and what the budgetary implications of proposed interventions would be.

Some of the functions of the former Department of Women, Children and Peoples with Disabilities (DWCPD) had now been transferred to the DSD. Considering that the restructuring would only be reflected in October, after the mid-term budget review had been concluded, she said the question was how the DSD planned to deal with this change and what challenges it anticipated as a result of this departmental integration

The Older Persons sub-programme costs were largely driven by the Golden Games, an initiative in which older people participated in various sport to promote active ageing. Ms Koyana explained that while the Department intended to reduce spending in this sub-programme, through a cost sharing arrangement between provincial departments and the national Department of Sports and Recreation, the DSD also needed to provide some clarity on the details of the arrangement.

One of the challenges being faced by the National Development Agency (NDA) included its lack of visibility in rural parts of the country. She indicated that the NDA needed to come up with a plan to make its services more visible, particularly in impoverished communities.

The first goal of the Millennium Development Goals (MDGs) was to alleviate poverty, which was particularly relevant to the Department’s mandate. Ms Koyana noted that, to ensure that this goal was met by the 2015 MDG due date, the Department needed to monitor and intensify its fight against poverty.

Ms L van der Merwe (IFP) noted that adoptions of children had been halved since the 2010 Children’s Act, which had brought about changes to adoption policy, had been enacted. She asked whether the previous Committee had dealt with amending this legislation, or if the current Committee must address the issues.

Ms Koyana explained that the previous Committee did not deal with the issue and that the adoption policy changes arising from the change in legislation would be dealt with by the current Committee.

Ms S Tsoleli (ANC) requested Ms Koyana to be more specific on the details concerning challenges identified in the Department’s Strategic Plan, in future presentations. She said that whilst it was noted that the NDA was not visible in rural areas, she wanted to know what areas specifically.  

Ms V Mogotsi (ANC) reiterated this request. She also asked whether the goal to alleviate poverty proposed by the MDGs was attainable.

Ms H Maxon (EFF) asked whether the Committee would be able to conclude the budget review in time, considering that the review process that usually began in March had begun only in July in the current year.

Ms H Malgas (ANC) asked if the Department had tabled the Strategic Plans related to the DWCPD projects that it was taking over. She noted that while the NDA had listed how many projects it had funded, and their beneficiaries, in its Strategic Plan, it was important for the Department also to provide a list detailing the names of the projects and where they were placed. This information would allow the Committee to assist the Department to review projects and ensure that funds that had been allocated were properly utilised.

Ms van der Merwe noted that under the Welfare and Services Development and Implementation Support Programme, there was a marked decline in funds being allocated to some sub-programmes going forward. She wanted to understand the reason for the decline in funding these programmes.

Ms Tsoleli appealed to Members to recognise that some of the questions they were asking would have to be directed to the Department rather than the Committee Section staff.

Ms Malgas agreed with that.

The Chairperson expressed concern over the ever-increasing number of employees within government agencies like SASSA. She asked what would happen to them, should government decided to reclaim functions performed by agencies like SASSA, and whether they would be able to be re-absorbed into the labour market.

Ms Koyana explained that she would provide more specific details on issues she identified from Departmental reports in the future She noted that the DSD would have to brief Members on how its Strategic Plan covered the DWCPD functions absorbed by it. She said that, based on the previous year’s findings, the MDG poverty alleviation goal was attainable, but that it was up to the Committee to hold the Department accountable for any gains made and any challenges encountered.

Department of Social Development: 2014 Strategic Plan and budget briefing
The Chairperson noted that apologies were received from the Minister, Ms Bathabile Dlamini, who was out of the country. Both the Acting Chief Financial Officer of the Department, Mr Johnny Modiba, and the Acting Deputy Director General, Ms Veliswa Baduza, had also tendered apologies as they were not well. She noted that some of the Members would have to leave this meeting early, to attend to other Portfolio Committee meetings.

Ms Hendrietta Bogopane-Zulu, Deputy Minister of Social Development, led the delegation which included Mr Coceko Pakade (Director General, DSD), Mr Rodgers Hlatshwayo (Chief Director: Strategic Planning, Department of Social Development), Mr Clifford Appel (Acting Chief Financial Officer, DSD), Ms Virginia Peterson (Chief Executive Officer, South African Social Security Agency), Ms Lorraine Thovhakale (Acting Chief Financial Officer, SASSA), Ms Vuyelwa Nhlapo (Chief Executive Officer, National Development Agency), and Phumlani Zwane (Chief Financial Officer, National Development Agency)

Mr Coceko Pakade, Director General, DSD, briefed the Committee on a few key issues which had played a role in informing aspects of the Department’s Medium Term Strategic Plan (MTSF).

The Minister of Social Development had been tasked with leading Outcome 13, which dealt specifically with the issue of Social Protection. Social protection was a cross-cutting matter that not only addressed social issues but also dealt with an array of issues that adversely affected the well-being of citizens. The Department’s focus on this Outcome would enable Government to coordinate its mechanisms across all levels of Government, so as to provide an integrated approach in addressing social protection issues.

Government had begun its work in setting a “social protection floor”. He emphasised that while government was providing basic services such as water, electricity and a minimum social wage in the form of grants, there was still a great deal of work to be done. The key issue was that by setting basic social guarantees that extended beyond the provision of grants, the government would be able to coordinate its work more effectively, so as to address all issues concerned with the provision of social protection. 

The Department was reviewing some of the policy positions that were taken in the 1997 White Paper for Social Welfare. The aim of this revision was to align some of the elements of the Paper with current day realities.

Mr Pakade noted that the DSD’s key priorities included an entire overhaul of the manner in which social services were delivered would be overhauled. The quality of work provided by social service workers, such as social workers and youth care workers, would not only be improved, but the number of social service workers in the system would be increased.

The Department would be assessing the service delivery model and would ensure that the model itself was appropriate and that all role players in the system, from the government, to the private sector and the Non-Profit Organisation (NPO) sector, not only understood their mandate but were fulfilling it. A funding model that complemented this service delivery model and addressed the issue of presently-underfunded NPOs would also be created. The National Treasury was working with the Department in this regard.

There would be an emphasis on the importance of investing in the development of children so as to not only improve future education outcomes but to create future leaders.

In the area of deepening social assistance and extending the scope for social security, the DSD would be focussing on increasing retirement provisions so that all people, regardless of their level of income, would be able to retire in harmony.

DSD further aimed to strengthen community development interventions. Whilst new models dealing with community development were currently being debated, the Department would be focusing on implementing food and nutrition security strategies. The Department planned to roll out “Food for All” programmes in all provinces in the current year. The target was to establish food and nutrition development centres, as well as community food depots, in every province. The Department would be working with key stakeholders, including the Food Bank to achieve this goal.

The Department had been struggling to plan and implement programmes because of a lack of baseline information. A new strategy to implement a National Social Protection Information System (NSPIS), aimed at strengthening coordination, integration, planning, monitoring and evaluation services for all current systems was also under way. This system would not only locate vulnerable citizens, but also detail the interventions, social and others, that were being received by these citizens.

Mr Pakade briefed the Committee on the Department’s Key Projects for the year.  These, in summary, included:
- legislative reforms
- promoting anti-substance abuse
- promoting women empowerment and reducing gender-based violence
- improving the quality of work provided by social service professionals
- creating opportunities for the youth.
- providing youth and childcare services through the Isibindi Project.
- initiating systems that ensured that the voices of the disabled would be heard.

Mr Pakade then moved to describe the activities of some of the programmes as set out in the MTSF.

Programme 2: Social Assistance
The main objective of this programme was to extend the provision of social assistance to approximately 16.6 million people by March 2017. Growth was expected in the Child Support Grant (CSG), Old Age Grant and the Disability Grant, in that order. The expenditure trend supported this grant growth.

Programme 3: Social Security Policy and Administration
The objective of this programme was to achieve effective and efficient social security systems that protected the poor and vulnerable in society. The main focus was to establish norms and standards for the work that was being done in delivering grants.

The Department was considering the introduction of new benefits, such as making the Old Age Grant apply universally.

Other key focus areas included the provision of uniform and coherent information on social expenditure. The DSD was aiming to provide effective, efficient and accessible social assistance. While the Department aspired to have 100% of the appeals on grants adjudicated upon within 90 days, it had only managed, to date, to have 48% of appeals to adjudication stage. The target for the 2014/2015 year was 60% adjudications within 90 days. The Department planned to introduce information systems that would enable it to reach this target.

Mr Pakade noted that most of the funds would be transferred to SASSA to support the administration of grant payments.

Programme 4: Welfare Services Policy Development and Implementation Support
The objective of this programme was to strengthen Social Welfare Service Delivery, through legislative and policy reforms. The Department aimed to review the White Paper on Social Welfare, and this would set the new agenda for welfare for the next five years.

The Department was committed to building its capacity and 1 100 scholarships had been awarded in the current financial year. The Department was also planning to increase the number of scholarships to 1 300 in 2015/16, and again to 1 654 in 2016/17. It planned to professionalise and regulate social service practitioners through development of a Regulatory Framework by March 2019.

The financial trends on this programme showed that the Department was planning to pay particular attention to its youth initiatives. Transfers would be made to support capacity building in the form of scholarships provided to prospective social services workers. loveLife would also receive financial support from the Department.

Programme5: Social Policy and Integrated Service Delivery
The objective of Programme 5 was to increase job opportunities and skills through the coordination of the Social Cluster Public Employment (SCPE) and to promote community development.

The Department aimed to contribute to job creation by creating 42 500 jobs in the SCPE by the end of the 2014/15 year.

It aimed to promote community development by extending its participation in the Community Works Programme (CWP).

Another key focus of the Department involved the creation of Non-profit Organisation (NPO) registration, which would improve the monitoring of NGOs.

DSD Financial Outlook
Mr Rodgers Hlatshwayo, Chief Director, DSD, briefed the Committee on the Department’s Financial Outlook

He noted that the 2013/14 budget was R117.8 billion and was expected to increase to R146.1 billion by the 2015/16 financial year, with cash transfers in the form of social assistance constituting the biggest driver of growth. The budget was under considerable strain because of the additional mandates that the Department had assumed, due to new legislative requirements, and additional deployment made by government. It was also clear that R120.9 billion, which represented the most significant part of the budget, was allocated to the Department’s biggest programme, the Social Assistance Programme. Goods and Services, and this, excluding compensation to employees and transfers, amounted to R320 million in the current financial year. It was emphasised that this amount was not nearly enough cover the Department’s other running costs.

Giving the details of the transfers and subsidies, Mr Hlatshwayo noted that SASSA was allocated R6.4 billion for administrative compensation. If compensation of employees related to fraud detection was considered, this amount grew to R6.6 billion. The Department also planned to spend R264 million on social worker bursaries.

He noted that despite questions being raised about loveLife’s effectiveness, the programme was allocated R5.1 million in the current year. The Department, consistent with its strategic plan objective to tackle substance abuse, planned to spend money on various initiatives such as conditional grants and the establishment of treatment centres in provinces, like the Northern Cape, which did not have a significant number of rehabilitation centres. In terms of its commitment to providing food security and nutrition, the Department allocated R41 million to NPOs.

The Chairperson thanked the Department and suggested, in view of the shortage of time, that the Department should make its presentation to the Committee Members about Early Childhood Development (ECD) at a later stage.

Ms B Abrahams (ANC) asked what the Department was doing to retain social workers, noting that many of them were still leaving the public sector. She then addressed the issue of NGOs who, every year, received grants from the Department, and yet very little monitoring of their work was being conducted.

Ms Abrahams wanted more detail on how drop-in-centres had been established, what criteria were used in the selection of participants in the Green Door programme, and whether those who were chosen were screened, and, if so, by whom. She emphasised that many of those who were chosen were not appropriate for the programme. She also enquired about the success rate of the initiative, whether the programme could be said to be working and whether there was a need to start looking for a new programme.

Ms Abrahams asked what happened to the skills development programmes that were handed to NGOs, whether those citizens going through these programmes were later employed, and where they were at present.

Ms Abrahams similarly wanted figures in respect of the cooperatives, how many had been trained, and how many were on the Department’s database. She enquired how many of the cooperatives were currently active and, if they were not active, asked how the Department planned to assist them.

Ms Abrahams noted that some NGOs were also tasked with skills development, and she asked how many of these were successful. She made the point that many of these were “fly by night” organisations that failed to provide services as intended.

Ms Abrahams questioned why loveLife was being allocated a budget line, while South African National Council on Alcoholism and Drug Dependence (SANCA) was not. In terms of budget allocations, Ms Abrahams wanted to understand why the Department was treating these organisations differently, especially considering the significant work that SANCA was doing in communities.

Ms van der Merwe (IFP) asked how the new structure of the Department would work, considering the integration of the DWCPD into the Department. She wondered if the DSD had the financial capacity to absorb programmes 3 and 4. She noted that the Department would have to wait for the proclamation on the two departments to determine whether or not the staff of the DWCPD could be absorbed.

Ms van der Merwe was pleased to hear that the Department was looking at establishing a sustainable funding model for NGOs. However, she was concerned that this would only be done in 2017. She asked for clarity whether this process could be expedited, as NGOs had struggled to access the right kind of finding since 1994.

Ms van der Merwe asked if there was a timeframe for the finalisation of the National Disability Rights Policy. It was important that the government ratify international conventions and implement policies n disability locally. Considering that there were many disabled children who were unable to access education, she wanted to know how the DSD was planning to address this issue.

Ms van der Merwe noted that adoption figures had halved over the last few years. Whilst she acknowledged t that the Department aimed to amend the Adoption Act, she still wanted to know what plans were in place in the interim with regard to the reducing red tape.

Ms van der Merwe asked if the National Council against Gender-Based Violence would fall under DSD.

Ms Tsoleli also asked the Department to clarify why budget allocations had been made to loveLife and not for SANCA, pointing out that the latter was more prominent in communities, and asked in how many areas loveLife was functional.

Ms Tsoleli asked why budgetary allocations for substance abuse prevention initiatives were made for only four provinces and why, for instance, there was no grant for Gauteng.

Ms Tsoleli noted the relationship that the Department had with the Department of Higher Education and Training (DHET) in the facilitation of scholarships. However, if funds for social worker scholarships were being facilitated by the DHET, then she questioned whether this should not rather be described as student loans, rather than scholarships.

Mr S Mabilo (ANC) noted that there had been a decline in ineligible beneficiaries for social assistance grants, and wondered if some legitimate beneficiaries were also excluded. This decline had created a surplus or a saving in funds and he wanted to know what would happen to the money not used.

Mr Mabilo asked if the DSD’s fraud management system was fully functional and what kind of impact it had.

Mr Mabilo asked whether the DSD believed that it was getting value for money from the services provided by SASSA.

Mr Mabilo noted that the Department had increased its use of consultants, and wanted to know if there were any programmes to develop in-house skills.

Mr Mabilo said that there was no infrastructure for Community-based ECD initiatives and wanted to know if DSD had plans in this regard. He commented that the skills retention rate in ECD was very low, with workers tending to exit the system as soon as they had qualified. He asked whether the Department was doing anything to retain these workers, and whether there were interventions to try to increase their stipends.

Mr Mabilo also noted that these was a shortage of social workers in the system and asked the Department whether there were targets set to deal with these challenges.

Ms C Dudley (ACDP) noted that many NGOs were not being registered properly. She asked the Department whether it was performing oversight activities, in terms of determining whether or not funds that were given to NGOs were used as they were intended.

Ms Hendrietta Bogopane-Zulu, Deputy Minister of Social Development, She indicated that cooperatives were not the core function of the Department, but were funded by the NDA.

Ms Bogopane-Zulu  gave a brief overview of the history of loveLife. The programme was established 10 years ago, when it first received funding from international organisations. At present, loveLife was being funded by the South African government departments, including DSD. The challenges faced by loveLife were noted and the Department was in the process of conducting an evaluation on its effectiveness.

Ms Bogopane-Zulu asserted that 2017 target set for the establishment of a sustainable funding model for NGOs was a reasonable amount of time, for Department to complete this process.

The Deputy Minister noted that the Disability Policy was not only going to Parliament. The Department would be requesting open public input on the policy proposals soon.

Ms Bogopane-Zulu acknowledged that there were a lot of administrative challenges associated with the adoption process, but emphasised that delays were being dealt with. The amendment of the policy, which also addressed some issues associated with the backlog, was expected to be finalised soon.

She said that the Department had identified four provinces to build substance abuse treatment centres, on the basis that these provinces did not have a significant number of rehabilitation centres already. The Western Cape had the highest number of treatment centres, and Gauteng had the second highest number.

Answering questions on social workers, Ms Bogopane-Zulu said that funding provided through the DHET was considered as a student loan in the first year. After three years of study had been successfully completed, the loan was converted into a scholarship. This was done to encourage social workers to complete their studies. To address the issue of social workers numbers, the Department had set a target of one social worker per ward. The Department planned to set remuneration in such a way that social workers in the public sector would be paid the same as those outside of the system. The Department hoped that this would address the issue of retention.

Ms Bogopane-Zulu asserted that the cost associated with the use of consultants was on the rise because of the Department’s rising needs.

Ms Bogopane-Zulu further clarified the Department’s ECD initiatives, and explained that 10 000 initiatives were being brought into compliance, particularly through the adequate training of ECD practitioners, while 20 000 ECDs were still being audited.

The Chairperson also stressed that the issue of the effectiveness or otherwise of the loveLife programme must be addressed. loveLife was not accessible to many communities, yet the Department was still allocating funds to it. The Chairperson suggested that the Department needed to reduce allocations made to this programme in favour of other programmes which were currently underfunded, like SANCA.

The Deputy Minister noted the concerns about the loveLife programmes and reassured the Committee that a review was under way. She welcomed further engagement from the Committee on the matter.

The Chairperson, supported by Ms Maxon, called upon the DSD to take radical steps in addressing issues of inequality.

The Chairperson said that more information was needed on the development of ECD initiatives and programmes.

Ms H Malgas (ANC) asked for clarity in terms of the decline in the Older Persons expenditure, and asked if there were agreements on funding or programmes with the Departments of Health, or Department of Sports and Recreation.

Ms Bogopane-Zulu thanked the Committee for its input and described the level and quality of debate as very encouraging. She agreed that transformation and radical change within the system was not only necessary, but could be achieved if the Department committed itself to doing things differently. She assured the Committee again that the review of loveLife was already under way and mentioned that all the questions raised in regard to ECDs would be addressed by Ms Connie Nxumalo, Deputy Director General heading the programme, when she was invited to address the Committee separately on these issues.

South African Social Security Agency (SASSA) briefing
Ms Virginia Petersen, Chief Executive Officer, SASSA, briefed the Committee on SASSA’s achievements and challenges in the last three financial years. She said that the achievements in the 2011/12 financial year had included:
- the award of the payment tender.
- the improvement of local offices.
- capacity building of staff members, particularly those who processed grant applications at local offices.
- an aggressive drive in the Expanded Public Works Programme (EPWP).
- standardisation and uniformity achieved in the application process, which resulted in the number of stages to the application process being reduced from five to four.

The challenge in this year were to achieve an unqualified audit.

Ms Petersen then outlined the achievements in the 2012/13 financial year as being:
- the re-registration of 20.7 million citizens, 16 million of which represented actual recipients, while the remainder represented people who collected grants for those who were unable to do so themselves.
- the migration to a new payment system.
- the establishment of fraud management systems.
- the creation of a “mock-up” for SASSA uniforms, with the aim of helping citizens to identify SASSA employees.

Once again, the main challenge related to the audit.

The achievements in the 2013/14 financial year included:
- follow up on the re-registration data, which involved checking whether all grants were being paid to real people. This integrity checking process resulted in a significant number of Child Social Grant (CSG) cancellations, resulting in a saving of R2 billion.
- the appointment of the Ministerial Advisory Committee on SASSA’s payment model. This Advisory Committee was currently concluding its initial report and recommendations on how SASSA should roll out payments in the future.
- improvement of local offices.
- linking of grant beneficiaries to cooperatives. The aim of this initiative was to determine whether parents who were receiving CSGs could work in the cooperative space, so as to get additional income. The school uniform programme established by a cooperative was being migrated to the NDA, while SASSA remained as the provider of the beneficiary data.
- conducting 400 Integrated Community Registration Outreach Programmes (ICROPs)
- the decision to enrol biometric systems for staff, as a further barrier to fraud, was made. The tender for the implementation of this system was expected in the current year.

The main challenge again related to getting an unqualified audit.

Ms Petersen noted that 30.8% of the South African population, which represented 15.9 million people, were currently receiving grants. Some of the growth trends which provided further detail on take-up rates were negative, but this was largely due to the re-registration process.

Ms Petersen then briefed the Committee on SASSA’s Medium Strategic Plan, outlining the objectives of the programmes.

Income support to eligible beneficiaries
The objective of this Programme was to provide social assistance to eligible beneficiaries and to reduce exclusion and inclusion errors in the programme.

In research conducted in collaboration with the University of South Africa (UNISA), SASSA discovered that the take up rate in the 0 to 1 and 16 to 18 year categories was slow. Some parents believed that because their children were not attending school, they were not eligible to receive social assistance. SASSA aimed to educate citizens on their children’s constitutional rights to receive grants, whether or not they were in school.

Implementation of Social Assistance Programme
The objective was to provide social assistance to eligible beneficiaries, to improve the management of Social Relief of Distress initiatives, and to reduce inclusion and exclusion errors.

SASSA aimed to increase the number of grants from 15 million to just over 16 million in the 2014/2015 financial year.

In terms of the inclusion and exclusion areas in the under one-year old category it was discovered that just under 50% of all new borns were being registered for the CSG. Ms Petersen argued that this statistic raised questions on the perception that young women were having children simply to receive the CSG. She explained that if this was indeed the case, then the take-up rate would be much higher.

Another challenge being experienced by SASSA was the backlog on of the reviews of Foster Care Grants (FCG), particularly because of court orders that had lapsed.

To address the inclusion and exclusion challenges faced by children in the payment system, SASSA aimed to focus on increasing CSG take up rates. The goal was to increase rates to over 70%, not just in the deep rural areas, but also in informal areas within Gauteng and the Western Cape, where it was discovered that those eligible in the 17 to 18 year age category were not receiving CSGs.

Service Delivery Improvement
The objective of this programme was to improve the services rendered to beneficiaries.

SASSA aimed to perform 420 Integrated Community Registration Outreach Programmes (ICROP) visits in the current year.

The Agency also intended to improve turn-around times on applications, with the aim of reducing them from 21 days to 10 days, by 2016.

259 of the 335 premises occupied by SASSA were leased premises. Aggressive investments to improve premises would not be made where premises were not owned by government. Therefore, as leases became due, the Agency would look for alternative premises where infrastructure could help to improve management processes.

The objective was to establish a credible National Payment Database through the re-registration programme. Another objective was to enable a biometric systems. Many citizens, especially older persons, had complained that the system was too confusing or onerous, and needed to be made simpler.

SASSA also intended to develop an in-house system for the management of beneficiaries, in collaboration with the Department of Home Affairs (DHA).

Future Payment System
The objective was for SASSA to implement its full mandate of administering, managing and paying social grants.

It was also mentioned that SASSA was planning to introduce a system of smart cards, based on biometric verification to 21 million grant recipients. To facilitate this process, more staff members would have to be employed. SASSA aimed to provide bursaries to university students, to attract the correct skills base for this work.

As the move towards full implementation had not been completed, SASSA still expected to award the tender for payments, valued at between R8 and R10 billion.

An organisational overview, which involved assessing whether additional employees were needed to conduct the full scope of work that the Agency planned to do, was going to be conducted. Ms Petersen explained that the Agency had been warned by National Treasury to keep staff numbers down and would therefore keep such considerations in mind in the process of the organisational overview.

SASSA would be taking over the Grant Debtors Book from the Special Investigating Unit (SIU). The function of collecting money from debtors was a worrying factor for the Agency as it was not part of its core business.

Ms Petersen then briefed the Committee on the budget related to SASSA’s Strategic Plan.
For the 2014 financial year she outlined that the strategic and spending focus of SASSA was on the administration and payment of social grants. The baseline budget was increasing at a rate below the projections shown for the Consumer Price Index (CPI) of 5,4% and so the budget, in real terms would decline by an amount of R10 million in 2014/15 and 2015/16 respectively. However, following the success of the financial turnaround strategy, there was (although as yet unaudited) net accumulated surplus for 2013/14 of R1.089 billion. SASSA  intended to spend this strategically, on flagship once-off projects, such as the automation system.

The majority of the budget (39%) was on compensation of employees, followed by the cash handling fees (30%), while the balance catered for operational expenses such as office accommodation, cleaning, security, travel, and communication. It was indicated that 54% of the budget was located at Head Office while 46% was shared among the nine regions. The majority of the 54% of head office’s share included the cash handling fees which meant that the share for Head Office was bigger. The internal allocation process was guided by the principle of affording first priority to key cost drivers and striving for an achievement of balance between competing needs. The award of a cash disbursement contract to a single contractor had resulted in positive spin-offs as the cost of business in this area managed to decline. However, efforts to address service delivery challenges at local offices and service points necessitated the acquisition of requisite human capacity, leading to an increase in compensation of employees.

Ms Petersen then moved on to describe some of the risks. The presentation had already outlined that there were challenges around the payment tender and there were already strategies to resolve this problem. There was also a decline in resources, in terms of spending power relative to inflation. The Department emphasised that it was expected that as the system moved to one in which the Agency made payments itself, transaction costs would decline, which would relieve pressure on resources. However, this could not be expected in the first year because that year was one in which capital expenditure was also to be made. The SASSA faced problems with potential Disaster Management assistance, such as the need to give support for longer in communities such as Lwandle. Traditionally, the Department only provided food support and vouchers for about three days but because of the recent severity of disasters the system had to be maintained for much longer. This of course had implications on the budget. The Department was also concerned about deductions – which were an unintended consequence of the current system – and said that not much time had been spent addressing this issue (Note: it was dealt with more extensively in the discussion). 7 700 fraud cases had been received in previous year, showing clearly that fraud was still rampant, as more than 100 syndicates and 186 officials involved. In respect of these cases, 58 officials were suspended to date.

Ms Tsoleli indicated that she was concerned that SASSA seemed to have low targets on tackling the issue of poverty in South Africa, especially in rural areas. She suggested that the Department needed to have multiple strategies to deal with the issue of marginalisation.

Ms Tsoleli suggested that the DSD and SASSA should consult community members when planning to undertake community projects and starting ECDs. She also wanted details on food security programmes in schools and impoverished communities and suggested that these programmes needed to be integrated with agriculture or food gardens in order to be sustainable. She was also concerned that the Department would only support 67 ECDs.

Ms Maxon suggested that the Department needed to curb fruitless and wasteful expenditure as this was impacting on the poor. She was pleased that the DSD and entities had managed to curb corruption and fraud cases, following the introduction of the re-registration system, especially the efforts to check whether grants were being paid to real people, which, she was very pleased to note, had resulted in savings of almost R2 billion.

Ms Abrahams mentioned that she was not pleased by the outcomes of Monitoring and Evaluation (ME) and urged the Department to improve these outcomes to ensure effective programmes.

The Chairperson indicated that it was the duty of the DSD to monitor and evaluate programmes of the entities. She also mentioned that the Department needed to ensure that there was coordination between all social sector programmes, as it was the lead department mandated to alleviate poverty and marginalisation. She said the presentation of the Department did not mention whether in all provinces there would entities that were under municipal or departmental entities. 

Ms Vuyelwa Nhlapo, Chief Executive Officer, National Development Agency, stated that the targets mentioned in the presentation were based on the funds that were made available for the Department and its entities and it was not desirable to set targets that would demand resources beyond the funds available.

The DSD was focusing on building capacity within the management of ECDs, so that the centre would be managed effectively and be able to meet government’s expectations. Food gardens, particularly within the ECDs, were supported, as they helped to address the need for good nutrition and alleviate hunger. She noted that the DSD mandate recognised the need to work with civil society organisations and many ECDs were funded by the Department but were being run, and were registered as being under the direct control of civil society organisations. Members of the community were involved in these ECDs and they were recognised as “belonging” to the community.

The Chairperson asked the Department to respond on the procedure for funding privately-owned ECDs.

Ms Nhlapho responded that the Department was only funding ECDs that were registered under Non Profit Organisations (NPO).

Ms Tsoleli indicated that it was unfair that the Department was not funding privately-owned ECDs as they performed the same function as those registered under NPOs. She added that some provinces were dominated by privately-owned ECDs and the Department needed to deal with this dilemma.

Ms Connie Nxumalo, Deputy Director General, DSD, responded that the Department did not want to risk funding programmes that were non-existent. She said the Department was clear on the requirements that were needed in order for ECD centres to be awarded funding, and the DSD would also focus on oversight visits, to ensure that the centres were dealing with issues and children from within the community.

Ms Bogopane-Zulu added that the Department did not want to focus on ECDs that were intended to make a profit, but those that were intended to develop the community and build capacity. She said that part of the responsibility of NDA was to assist struggling NPOs with compliance issues, and its interventions would ensure that they were sustainable. She indicated that the Department was focusing on ensuring that ECD centres in rural areas were financed, as this was where most of the resources were required, but part of the reason why many of these centres in rural areas were regarded as non-compliant was sometimes lack of information on how to properly use the funds.

Another Departmental representative responded that the Department was already working on a path to receive a clean audit and admitted that this required hard work and implementing legislation that would effectively curb fruitless and wasteful expenditure. She urged the Members to allow the Department enough time to deal with major challenges and emphasised that the Department’s delegation was working extremely hard to deal with the issue of poverty, malnutrition and vulnerability as identified in National Development Plan (NDP) and State of the Nation Address (SONA). 

The Chairperson thanked the Department for its presentation and indicated that indeed there was a lot that had been achieved in terms of fighting poverty, malnutrition and marginalisation in South Africa, as proven by the number of people who were able to access social grants. Members were now more familiar with the kind of programmes, and areas that required further consideration would be dealt with later.

The meeting was adjourned.

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