Minister on Department of Social Development & SASSA 2013/14 Annual Reports; AGSA on their audit outcomes

Meeting report

Auditor-General South Africa briefing on DSD audit outcomes for 2013/14
Mr Theunis Eloff, AGSA Senior Manager,  noted that the Department of Social Development and the four funds under the Department - Disaster Relief Fund (DRF); Social Relief Fund (SRF); Refugee Relief Fund (RRF) and State President Fund (SPF) - sustained their unqualified audit opinion and did not have material findings on non-compliance. SASSA and NDA retained their unqualified audit opinion however continued to have findings on material non-compliance with legislation. He provided a history of the audit opinions dating back to 2009/10. Significant emphasis of matters for the NDA and the Funds were noted.

Any challenges in key focus areas (such as predetermined objectives, supply chain management (SCM), human resources, information technology controls, material misstatements) were noted as well as the department’s financial health and drivers of internal controls. Steady progress has been made with regard to the implementation progress of the Minister's previous key commitments. The commitments made are either in progress or have been implemented and two new commitments have been made for the 2013-14 year.

Discussion
Ms K de Kock (DA) asked about the reason for deviation in supply chain management, and whether the deviation meant more expenditure or less expenditure.

Mr Eloff answered that It is a question of non-compliance, not deviation. The AG has identified material non-compliance with regard to DSD, SASSA and National Development Agency (NDA). There are findings on supply chain management but they are not material. He noted the reasons for this such as SASSA not getting approval in time for venues, and the appointment of the risk consultant and forensic auditor.

Ms V Mogatsi said non-compliance amounts to corruption. It was a disappointing audit report.

Mr Eloff said that If non-compliance is identified it then gets investigated. So it cannot be called corruption until this process takes place. On the question of the health of DSD, it has received an unqualified audit. To be clean the report must be unqualified, the predetermined objectives must be without findings, and non-compliance must be without findings. DSD is clean but its entities, SASSA and NDA are not clean. This is serious. SASSA has a three year rolling plan for its internal audit, but the head of this department has not yet been appointed.

Ms H Malgas (ANC) asked why there was no signature on the audit reports. It is only identified as “Auditor General”.

Mr Lourens van Vuuren, AGSA Business Executive, said that it has been for some time already that individuals no longer sign the audit report.

Ms Malgas asked whether the AG received DSD’s annual report as a whole or only the financial statements.

Mr van Vuuren replied that the AG does peruse the whole report but does not give an opinion on the whole report. It is however checked for anything irregular. The final proofs are checked by the AG.

Ms Malgas asked whether a performance audit for DSD was done.

Mr van Vuuren replied that a transversal performance audit was done, on a selective basis.

The Chairperson thanked the AGSA delegation.

DSD Annual Performance Report 2013/14 presentation
The delegation was headed by the Minister, Ms Bathabile Dlamini. Mr Thabani Buthelezi, DSD Head: Monitoring and Evaluation, referred to the strategic priorities and outcomes. Of note was the increase in performance for 2013/14, but this increase was already evident since 2011. The Social Development Sector delivers its services in an environment marked by high levels of poverty, unemployment  and inequality. Challenges include office accommodation and policy development.

The Social Assistance Programme is the single most important driver in the decline in poverty. Studies carried out by the Department and other institutions have uncovered various positive developmental impacts of the child support social grant in promoting nutritional, educational and health outcomes, including a significant contribution to the attainment of Millennium Development Goal: eradication of extreme poverty and hunger. The Project Mikondzo is a service delivery improvement intervention focusing on 1300 wards poorest wards in 23 priority district municipalities in the country.  The project was implemented successfully in all provinces and immediate interventions were provided in some of the areas visited. A comprehensive service delivery improvement plan is being developed. The Call centre on Gender Based Violence was launched for victims of gender based violence which operates a 24-hour toll free line staffed by 42 social workers and 7 social work veterans. DSD works with other departments, namely Basic Education, Labour, Justice, Health and Rural Development and non-government partners in executing its mandate. Therefore, it meeting some of its targets, it is dependent on successful collaboration with those partners.

Mr Buthelezi referred to the work of each DSD programme.  These were: Programme 1 – Stakeholder Management, Monitoring And Evaluation, Strategy Development and Business, Legal Services, and Communications; Programme 2 – Comprehensive Social Security; Programme 3 – Social Security Policy Administration; Programme 4 – Welfare Services; and Programme 5 – Social Policy and Integrated Service Delivery. He enumerated the targets set for each programme, and compared it with the actual performance (see document).

Finally, he looked at the country’s achievements in regard to international obligations such as with the African Union (AU), Southern African Development Community (SADC), and the United Nations (UN) Commission on the Status of Women.

The Chairperson said the provinces were challenged in different ways and the focus of the presentation was accordingly matched to priority areas, such as women in business.

Mr Clifford Appel, DSD Chief Financial Officer, spoke on the financial status of each programme. With the exception of programme 3, the programmes were underspent. He outlined the reasons for the underspending. In total, out of an appropriation of R118 billion, the budget was 99% spent. Travelling costs were responsible for the highest expenditure. Costs for consultants were R45 million. Other items with high expenditure were mentioned.

Discussion
The Chairperson thanked the Minister and her team for a good, articulate presentation.

Ms de Kock thanked the Minister for her presence and the presentation. She referred to page 92 of the Annual Report and asked why there is a low compliance rate for Non-Profit Organisations (NPOs) in submitting their annual reports. She wanted clarity on whether DSD transfers funds on condition that the annual reports of the NPOs it partners with, are submitted and are satisfactory.

The Minister replied that NPOs deliver almost 8% of all welfare work. She said there were always many NPOs requiring training but new ones were still awaiting training. NDA would be responsible for running capacity building programmes. The plan was to have roadshows across the country, and one of the aims was to follow correct procedure infilling in forms. The idea was not to exclude these from the system but rather to empower the NPOs and in so doing enable them to effectively deliver programmes.

Ms Conny Nxumalo, DDG: Welfare Services, said NPOs receive their funds in tranches. That means that only a successful report would be followed by the next tranche. This is a contractual obligation.

Ms de Kock asked a follow up question with regard to the transfer of funds to NPOs. She wanted to know the difference between the NPO not complying, and timing of the release of the funds. She referred to page 105 of the annual report which listed the transfer payments to these organisations.

Mr Appel replied that where reports were not received, the next tranche of funds would not be released to that NPO.

Ms E Wilson (DA) asked about the vacancy rates, saying that if vacancies have been budgeted for according to an organogram, why is there not a saving at the end of the year if a number of vacancies have not been filled.

Mr Ceceko Pakade, Director-General: DSD, said that the vacancy rate as at September 2014 was 8%. Out of a total of 783 posts, 715 were filled. There were various reasons for vacancies but the main reason was natural attrition. DSD has become an employer of choice and the fact that employees staying in their posts for longer is an indication of that. He agreed that there was a cost, and an unexpected cost, and therefore DSD will continue to monitor the vacancy rate. Wherever there is a saving, those funds would be moved to another budget line item. But he said the amount was not significant.

The Minister said that in the case of social workers, they do not stay long in DSD’s employment. They look out for other and better opportunities. To overcome this, a greater effort has been made to pay social workers a competitive salary. In other words, their services must be properly remunerated.

Ms B Abrahams(ANC) thanked the Minister for the presentation. She asked about the availability of social media in rural areas.

The Minister replied that she acknowledges that there is a lack of social media in rural areas. DSD however, makes use of media such as the radio, in particular Cape Talk, which is available in rural areas in the Western Cape. DSD also makes use of the Government Communication and Information System (GCIS) stations.

Ms Abrahams asked about the success rate in the youth mobilisation programmes.

The Minister replied that DSD was introducing a new element to its programmes, which focuses not only on substance abuse, but also teenage pregnancy and school dropouts. The youth were being accessed through youth camps. The most important skill to cultivate is self-confidence, and confidence in the programmes and people addressing their issues.

Ms Abrahams asked about the Expanded Public Works Programme (EPWP) job opportunities and asked if these were sustainable.

The Minister replied that the jobs are sustainable because these are permanent jobs, for example, skilling people in home based community care, youth and child care work, and early childhood development. She said that this delegation would report back to the Committee on how DSD responded to this challenge.

Ms Abrahams asked who would be responsible for the cost, in terms of wasteful expenditure, due to officials not arriving at hotels.

A member of the DSD delegation said every incident was examined carefully, and only thereafter would it be condoned, if necessary. The reason for “no show” was where one day of work was required instead of two. This means it would be too late to cancel the second day’s accommodation as it would already have been charged. However, where there was negligence, the cost is recovered from such official.

Ms Abrahams said that the cost of damage to cars involved in accidents should be borne by the relevant official. She askedif there is anything in the pipeline for a register for abuse of older persons.

Ms Nxumalo replied that a register is in place since 2014. So far, 137 names are on the register but there was only one conviction.

Ms Abrahams referred to page 121 of the Annual Report and asked what was the purpose of being selective about  the recommendations made by the Committee.

The Chairperson commented that DSD had well trained social workers able to deal with management and interact with communities and their challenges, and seen in this light, has the Minister been able to identify how effective they are, that is, are there any changes in social behaviour. Communities have raised their concern about social workers not being user friendly with their clients. Is the training directed towards this concern. She particularly wants to note the problems and challenges of poor people in the rural areas, who have succumbed to alcohol abuse, and children not attending school. Are social workers skilled and equipped to deal with these environments?

The Minister replied that social workers are overwhelmed by the challenges they face. She said there would be an intense perusal of norms and standards. To this end there is a forthcoming conference which will take place in November 2014. Social workers will be able to report on relevant issues and challenges in this regard. Furthermore, DSD is in consultation with other countries which have similar communities, for example, Howard University in the United States. The university focussed squarely on black Americans, which have communities and similar problems to those in our own society. She also said that there is a plan to have a social worker for each ward in municipalities, to have a well-trained supervisor, and a structure to communicate effectively from wards- to districts- to provinces. This is in addition to social workers employed directly by municipalities. Another measure to overcome the challenges of social work, was to call back retired and veteran social workers to assist.

Ms V Mogotsi (ANC) praised the work of DSD. She asked a question on human capital and the vacancies in SASSA.

The Chairperson said that an opportunity would be given later for questions to SASSA. But she does encourage all members to have their say and all their inputs would be noted.

Mr S Mabilo (ANC) said that the IT problem is of critical concern, and wanted to know what would be done about it.

Mr Mabilo said that capacity building exercises for officials should not be optional. Non-attendance must be addressed.

Ms Malgas congratulated the Minister and DSD on receiving an award for the call centre. She would like the Minister to be more specific about it.

Minister Dlamini thanked Members for their congratulations. She said the reason the approach of DSD was changed was because in 2010/11 the October month celebrations took place. This was a forum showcasing the work of DSD in child development. Child-headed households, foster care and other issues were raised. This was the backbone of their work. Other issues included severe poverty in certain towns, particularly so in mining towns. The struggle to get birth certificates in some areas was another. This was how a programme aimed at addressing these issues came about. Part of this programme was to increase the number of offices. Even though the programme is responding positively, the programme is still being improved. The question was asked what would a woman in a rural area do if she was in distress or needed welfare help. That is how the call centre was established. If the problem was too difficult it would then be escalated to a retired social worker. An innovative part of the programme was the ability to see where the calls were coming from, in case women could not give their location.

Dealing with under-performance would be through the performance bonus. It would be withheld unless extraordinary work was done.

Food security for vulnerable groups is the responsibility of DSD. Such a group is the seasonal workers in de Doorns, where there is high rate of malnutrition. Workers have work for only six months of the year. There are areas where DSD is supplying uniforms by means of cooperatives formed by communities.

DSD has been shortlisted for another prestigious award by Africacom. Community participation was impressive and was the reason for the visit by the World Bank. The World Bank and countries such as China and India had also visited DSD’s programmes.

The Chairperson thanked the Minister for the professional way that the delegation coped with the interactions with Members.

South African Social Security Agency (SASSA) Annual Report 2013/14 presentation
The presentation was done by Ms Virginia Petersen, Chief Executive Officer (CEO). She its key priorities. SASSA had aimed to reach at least 1.2 million new beneficiaries, and exceeded it expectations by reaching 1.3 million beneficiaries. A national call centre was established and 465 000 enquiries were received. A target was set to upgrade 119 offices and pay points. Of these 116 were upgraded. SASSA intends becoming a paymaster and is setting up an in-house payment system. The First Annual SASSA Anti-Corruption Conference was held in November 2013. During the year under review the staffing analysis yielded a figure of 867 critical posts that needed to be filled. Of these 804 were filled. Expanded Public Works Programme employees were also recruited.

Mr Tsakeriwa Chauke, Acting CFO, presented SASSA's financial information. On the overall expenditure, the budget was 98% spent. He presented budget and expenditure figures per programme. On compensation of employees, the late filling of posts accounted for the 7% under-expenditure. New motor vehicles were purchased. The AG gave SASSA an unqualified report.

There were three challenges facing SASSA, these were that the current Payment Tender was declared invalid; there were complaints about deductions on the SASSA card; and the number of officials implicated in fraudulent activities.

Discussion
Ms E Wilson (DA) said that SASSA had an unqualified audit but there are facts that are most alarming. In the briefing by the Office of the Auditor-General, it mentioned there were 14 key areas for the drivers of internal control. SASSA created concern in 11 out of the 14 areas. Some of these areas relates to leadership. She said that there is a management crisis in SASSA.

Ms Wilson said that 220 staff were brought to book and she finds this a staggering number. She said she had evidence that illegal deductions for airtime and electricity were being made from the SASSA card in an area of Limpopo Province, and wanted to know when the corruption would stop.

The Minister replied that the AG gave SASSA a clean audit – that is the most important thing. It is an entity which was taken “voetstoots”. In other words, with its problems and staff. There is a lot of training for staff, and those who are not trainable will not be sent off, but they will be put to work. The issue of corruption is not only in SASSA. Communities also contribute to corruption. They are squandering their own money. The most robbed grant recipients are older persons.

The Chairperson said on the matter of illegal deductions, legal action should be taken. The Minister acknowledges the problem.

Mr Mabilo asked for attention to the matter of the DA councillor who was enjoying a social grant.

Ms Dianne Dunkerley, Executive Manager: SASSA, said the councillor had appeared in the Bellville Magistrate’s court a number of times as well as the matter being postponed a number of times. SASSA is awaiting the outcome.

The Chairperson said that DSD was an important factor in the lives of people who have little resources, but there must be a team effort and a campaign in fighting corruption.

Ms Abrahams wanted to know about the vacancy rate, and why people with disabilities were not acknowledged in the Annual Report.

Ms Maxon asked about the social relief grant. There are people living in perceived “rich” municipalities, she said, who are poor. She asked how the social relief grant would assist these people. She said that AGSA 2009-20013 audit opinion graph gave only a yellow not a green rating for SASSA’s annual report. She asked if the CEO could address this.

Ms Petersen answered that the financial management of its supply chain had 13 areas in the red, but it had now moved to yellow over the years. SASSA is constantly busy building and strengthening its systems. It is a lot of work. She said SASSA will continue to do a lot better.

The Chairperson said that recommendations from members will be noted by SASSA so that improvements could be effected.

Ms Dunkerley said that social relief is provided where recipients have been registered on the system, and the grant is approved, but has not yet been received. This can be done for a period of up to three months. However, the recipient will be assessed on a month to month basis to qualify for the relief.

The Chairperson asked whether social relief is a food parcel.

Ms Dunkerley explained it is a programme, allowed for by legislation. The social relief can be in the form of food parcels, or vouchers, or cash, or in kind (for example school uniforms). Where there is a disaster such as a fire, relief can be provided and SASSA in that situation will provide meals and blankets, and other forms of relief.

The Chairperson said that although Ms Maxon had not heard of it before, it has always been there, it was just that it may have been known as a food parcel. Ms Dunkerley has shown that it is more than that.

Mr Frank Earl, DDG: Grant Payment Systems, said that the call centre is being operated from Pretoria. There are 45 call centre agents. A second call centre is specifically for card payment-related enquiries. There is no cost to the caller as it is toll free.

The Minister said disaster relief was also given to cities such as Johannesburg and Cape Town, through the municipalities.

Mr Pakade asked Ms Wilson if should could share the information she had on illegal deductions made from old age pension recipients so that SASSA could investigate it.

Ms Wilson said she had photographs which she would provide to SASSA.

The Chairperson said there is still the 27 October for another presentation when members would have an opportunity for more questions.

Ms de Kock asked if the 8 point plan dealing with the deductions could be sent to the Committee and it could be seen how SASSA is dealing with it.

The Chairperson said SASSA would be given timeframes to get back to the Committee on all the issues raised today.

Mr Mabilo said that where SASSA did not achieve 100% good work, it must achieve 100% in the next year.

He said that there must be a clear plan and commitment from SASSA to recover the non-recovered debt from staff. He said that although the AG highlighted a few matters of concern, the audit is unqualified.

The Chairperson said the discussions had come to an end. She thanked the members from all parties for their participation. She also thanked the Secretariat for their work.