Department of Social Development, SASSA & National Development Fund on their Annual Reports 2015/16, with Deputy Minister

NCOP Health and Social Services

08 November 2016
Chairperson: Ms L Dlamini (ANC; Mpumalanga)
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Meeting Summary

Annual Reports 2015/16 

The Department of Social Development (DSD) presented its annual performance report, and said that although some of its targets had not been achieved, substantial progress had been made. The number of people who benefited from the old age and war veterans grants had increased. However, it had fallen short of its target for the child support disability grants. The disability grant had been declining for the past four years due to the improvement in the SA Social Security Agency (SASSA) grant system assessment process, which ensured that beneficiaries were more rigorously assessed and had resulted in a reduced number of fraudulent claims.

The DSD had successfully reviewed the implementation of the White Paper, a geographic distribution review of the social service workforce had been conducted, and a draft recruitment and retention strategy for social service practitioners had been developed. In addition, an early childhood development (ECD) policy was approved by Cabinet, and a total of 133 365 new children were able to access ECD programmes.

The Department had been allocated a budget of R137.9 billion and had spent R136.4 billion. The social assistance programme made up R129.8 billion of this amount. The under-spending was related to slow spending on foster care and legal services.

SASSA reported that it had been receiving an unqualified audit outcome from the Auditor General (AG) since 2011. It had developed a dispute resolution framework which would provide guidelines and processes that could be used to resolve labour disputes within the Agency and in the Commission for Conciliation, Mediation and Arbitration (CCMA).There had been an irregular expenditure closing balance of R1.1 billion, and fruitless and wasteful expenditure of R10.9 million due to a lack of sufficient review and oversight to ensure compliance to applicable legislation, timely implementation of proper record keeping, and monitoring and review processes not being implemented in a timely manner.

The National Development Agency (NDA) said its strategic objectives for the year were to mobilise R160 million to enable co-operatives to implement development programmes, and to build the capacity of cooperatives through mentoring, training and incubation at 13 000 cooperatives by 2017/2018. It had been able to mobilise R67.3 million for resources from alternative sources in cash and in kind for supporting cooperatives and its programmes. The NDA continued to operate under stringent financial constraints due to financial allocations increasing at 3% year on year, while inflation averaged 6.5%. The Agency had had a deficit of R1.7 million in 2016 compared to a deficit of R12.4 million in 2015. The total expenditure of R256.7 million represented a spending of 90% of its budget. The agency had received an unqualified audit for 2015/2016, with key findings related to non-compliance with supply chain rules and regulations, resulting in irregular expenditure of R18.9 million.

The Committee was happy that the Department of Social Development had made some improvements with regard to its spending and in the process had received a clean audit. However, they were not impressed with SASSA’s irregular expenditure and the numerous legal cases that were still in process. The Committee also asked about the Departments’ under-spending, its current programmes to deal with substance abuse, and the lack of infrastructure at the Early Childhood Development centres. There was also a concern about over-spending in some areas, and under-spending in others. Members suggested urgent action needed to be taken to reduce the number of unemployed social workers.

Meeting report

Department of Social Development (DSD) 2015/2016 Annual Performance Report

Mr Thabani Buthelezi, Chief Director; DSD, said the Department’s strategic priorities for the 2015/2016 financial year had included expanding child and youth care services, deepening social assistance and extending the scope of social security, combating substance abuse and gender-based violence and establishing social protection systems to strengthen co-ordination, integration, planning and monitoring and evaluation of services. Although some of its targets had not been achieved, it was important to note that substantial progress has been made to achieve these targets

Programme one: Administration

The Department had managed to achieve 22 targets, but 21 targets were not achieved. It had targeted to monitor and report on the Forum for South African Directors-General (FOSAD) Social Sector Cluster, facilitate four bilateral agreements, facilitate its participation in six international bodies, and to form partnerships with eight stakeholders in support of the DSD’s initiatives and projects. Its achievements had included convening all ten social protection, community and human development (SPCHD) cluster meetings, and the bilateral agreements were under negotiations with the United States of America, the Democratic Republic of Congo (DRC), Kenya, Benin, Nigeria, Bulgaria and Peru.  Benchmark exchanges had been conducted with Chile, Sweden and Thailand. Also, an agreement had been signed with Lesotho. A number of partnerships were formed with various local and international organisations to support the Department’s programmes, such as the youth programmes, Golden Games and Child Protection Week.

In terms of business development, the DSD had targeted implementing new designs, special norms and standards for the construction of new facilities. It had also targeted developing and piloting a complaints management system within the national department helpdesk. It achieved the construction of 15 new facilities that were in line with the new design, special norms and standards, and a complaints management system had been developed and was currently in operation at the Gender-Based Violence command centre. In terms of legal services, the DSD had aimed to respond to 90% of all applications for appeals, letters of demand and practice directives within three days of receipt, communicate 90% of all outcome letters within three days to the attorneys, and vet 90% of contracts through the management system. The Department had managed to respond to the 1 717 applications for appeals, letters of demand and practice directives that were received. All the contracts, which included 81 service level agreements (SLAs) and 19 memorandums of understanding (MOUs) were vetted through the contract management system.

Programme two: Social Assistance

The Department had targeted to increase its number of beneficiaries for the old age grant to 3 181 959, and extend its war veterans’ grant to 223, the child support grant to 12 042 973 and its disability grant to 1 112 767. It had partially achieved its targets, as a total of 3 194 087 people had benefited from the old age grant and 245 had benefited from the war veterans grant, but it had failed to reach its target for the child support grant (CSG) and the disability grant. The disability grant had been declining for the past four years due to the SA Social Security Agency (SASSA) improving its grant system assessment process. The improved process had ensured that beneficiaries were more rigorously assessed, which had resulted in a reduced number of fraudulent claims.

A total of 131 040 people had benefited from the Care Dependency Grant. The Department had targeted to have a total number of 142 180 by the end of the quarter, but due to the numerous applications and take ups, this grant was lower than the Department had projected because of the gaps in legislation pertaining to the inadequate definition of a child with a disability.

Programme three: Social Security Policy Development

The DSD had targeted to produce four oversight reports on the adherence to the norms and standards for the social assistance programme, adjust the means test for the older persons/ grant, draft a policy proposal on the universalisation of CSG and complete a consultant’s costing of a policy proposal on expansion of the CSG to orphans and vulnerable children. It had conducted all four of the oversight reports -- the oversight had been done in Gauteng, North West, Northern Cape and the Western Cape. A draft proposal had been developed, and would be completed once a study on tax options was done. Consultations and costing for the expansion of the CSG had been done and completed. The final policy had also been approved by Cabinet.

A total of 2 759 appeals were adjudicated, which 82.53% were adjudicated within 90 days of receipt. Collaboration with SASSA had been improved and gaining access to SASSA’s electronic Internal Reconciliation Mechanism Management System had allowed the Department to improve from its planned target of adjudicating at least 65% of the appeals within 90 days of receipt.

Programme four: Welfare Services

In terms of social standards and social service provider management and support, the DSD had targeted to review the implementation of the White Paper, conduct a geographic distribution review on the social service workforce, develop a social work supervision programme and develop a draft recruitment and retention strategy for social service practitioners. It had reviewed the implementation of the White Paper, a geographic distribution on social service workforce was conducted through a desktop review, and a draft recruitment and retention strategy for social service practitioners had been developed.

The Department had awarded 1 860 new scholarships, and the National Active Ageing programme had been successfully implemented by all provinces. An early childhood development (ECD) policy had been approved by Cabinet, a departmental human resources plan for the ECDs was developed, and 133 365 new children had been able to access ECD programmes during the reporting period, resulting in a 10% increase in the overall number of children accessing ECD services.

Three child protection awareness and participation sessions were held. The Child Protection Week was launched in KwaZulu-Natal, and the closing ceremony was held in Gauteng. The National Children’s Parliament was held in October 2015, and Children’s Day was celebrated at the Hlayisani Centre of Hope in Mpumalanga. In addition, nine provincial workshops on child rights’ governance and compliance were held in nine provinces, and an audit on foster care placements was conducted in all nine provinces. In terms of social crime prevention and victim empowerment, a draft review document was developed and provincial consultations took place in all nine provinces between October 2015 and March 2016.

The monitoring and accreditation of service providers and diversion programme was done for 53 service providers in all nine provinces. A draft capacity building programme for teenage parents was developed after consultation had taken place in five provinces. The Gender-based Violence (GBV) command centres attended to 51 440 calls and serviced 8 929 cases between April 2015 and March 2016. This was an improved achievement from the 2 850 calls that were targeted for the year.

Programme five: Social Policy and Integrated Service Delivery

Instead of the one policy that the department wanted to develop and review, it had over-performed and two policy analysis inputs were produced. One was a policy on special housing needs, and the other was a draft policy framework on the integration of refugees into local communities. It had achieved and developed four policy briefs: the reviews of the National Treasury on social grants and their impact entering the national minimum wage debate, the minimum wage as a social development issue and a women’s issue, the social sector’s contribution to radical socio-economic transformation, and the National Health Insurance (NHI), which was a key consideration for social development.

In terms of population policy promotion, 26 bursaries were registered at the Walter Sisulu University and North-West University for undergraduate studies in population and development. Five scholarships for country participants were awarded. Five scholarships were awarded to post-graduate students from Kenya, Zimbabwe, Ghana, Gambia and Uganda. In terms of the registration and monitoring of non-profit organisations (NPOs), 31 183 applications were received and processed, of which 98.5% of the applications were processed within two months of receipt. 107 NPO road shows were held across 93 local municipalities in all nine provinces, and 3 569 NPOs and 509 provincial officials were trained.

The DSD’s performance during the reporting period had remained the same as in the previous reporting period. 67% of the set targets had been achieved in the 2015/2016 financial year, which was similar to the achievements of 2014/2015. In the past four financial years, the Auditor General (AG) had evaluated the report performance against the overall criteria of usefulness and reliability. For four consecutive financial years, no material findings were raised on the usefulness and reliability of the reported performance information by the Department.

Mr Clifford Appel, Chief Financial Officer: DSD, reported that the Department had been allocated a budget of R137.9 billion and had managed to spend R136.4 billion (98.9%). There had been a deviation of R1.484 billion under the social assistance programme, which was related to slow spending on foster care, people with disabilities and war veterans as a result of fewer than anticipated projected beneficiaries. The under-spending in programme three was related to slow spending on legal services for litigation cases reported during the financial year. The under-spending in programme five was related to the non-payment of non-profit organisations due to non-compliance.


South African Social Security Agency (SASSA)

Ms Raphaahle Ramokgopa, Executive Manager: Strategy, SASSA, reported that its strategic goals for the 2014/15 – 2018/19 financial years would focus on improving service delivery, reducing income poverty by providing social assistance to eligible individuals, improving internal efficiency and institutionalising the social grants payment system within SASSA.

Programme one: Administration

SASSA had achieved an unqualified audit outcome from AGSA since 2011. 34 out of 40 of the planned internal audit reviews had been conducted on high risk areas such as the social relief of distress (SRD), disability management, fleet management, performance information and payment tender. 83% of the reported fraud and corruption cases were being investigated, 839 backlog cases had been dealt with, and 15 fraud and corruption cases had been referred to law enforcement agencies. These had involved 337 officials, nine beneficiaries, five doctors and three former officials. Also, 93% of the letters of demand had been responded to within the prescribed time frames, 99.56% of the legal opinions had been drafted within ten days of receipt, and 99.74% of contracts had been drafted within seven days referral and receipt of all the necessary documents.

In terms of the implementation of the legal services model, 75% of staff capacity building workshops had been conducted on high litigation areas, and this was an achievement against the annual target. A dispute resolution framework had been developed and implemented; the dispute resolution framework provided guidelines and processes to be used to resolve disputes. This had enhanced capacity within SASSA on the best approach to handling labour disputes within the Agency and in the Commission for Conciliation, Mediation and Arbitration (CCMA).

In terms of information and communication technology (ICT), the terms of reference for the procurement of the biometric access solution for staff had been developed but could not be approved, as some considerations were made to consolidate biometric staff access with social assistance beneficiaries’ biometric requirements, to avoid duplication. 227 users had been migrated from Novell to the Microsoft platform, but the initial target had been to move 3 500 users. However there had been delays in obtaining approvals to dig trenches for the laying of the fibre infrastructure required for the implementation of the project.

Programme two: Benefits Administration and Support

For providing social assistance to eligible beneficiaries, the Agency had targeted to reach at least 1.3 million new beneficiaries. It had exceeded this target and had reached 1 767 639 new beneficiaries. SASSA it had managed to pay 16 991 634 beneficiaries at the end of the financial year – 12 573 955 were children’s grants, 3 194 087 were older persons’ grants, 31 085 541 were disability grants, 245 were war veterans grants, and 137 806 were grants in aid. Gauteng and the Western Cape had the highest social grant growth rates, with Gauteng showing a 4.69% growth rate and the Western Cape a 3.09% growth rate. A total of 479 238 SRD applications were awarded, representing a 121% over-achievement. Included in these SRD awards were various forms of relief, such as cash, food parcels, vouchers and school uniforms.

During the year, SASSA had targeted to review 125 214 foster child grant backlogs, but it had reviewed only 70 634 (56%). Currently, 180 009 foster child grant reviews were being processed against a new target of 170 869. The turnaround time for processing grants applications had been targeted at 95% within 15 working days. SASSA had achieved 97% of new grant applications being  processed within 15 working days -- 83% had been processed within one working day, and the majority of social grants processed outside the 15 working days were the disability grants.

A biometric enrolment and identification system specification was adopted. The 81 981 clean-up target for the duplication of fingerprints for adults and children was achieved due to a decision that was taken to conduct a full clean-up of the records through a review process. The Agency had failed to achieved the clean-up of 723 415 fingerprints that it had received from the Department of Home Affairs due to the development of specifications which took longer than expected, as they had to be interfaced with the planned biometric access and Home Affairs’ systems.

Financial Information 2015/2016

Ms Ramokgopa reported that SASSA had overspent on capex by 189%, and on goods and services by 106%. Its budget allocation for the 2015/2016 financial year had amounted to R6.642 billion. Over and above this allocation, the agency had accumulated a surplus of R1.366 billion. This retained surplus had been earmarked mainly for the projects geared towards the in-sourcing of payments, and National Treasury had granted approval for R621 million of the retained surplus to be spent in 2015/2016 to fund once-off critical projects. The planned estimated expenditure for the period under review was thus R7.263 billion in 2015/2016, and the actual expenditure had been R6. 904 billion.

The AG had found that the Agency’s financial statements had been presented fairly in all material respects. Its financial position as at 31 March 2016 and its financial performance and cash flow for the 2015/2016 financial year were in accordance with generally recognised accounting practice (GRAP) standards and the requirements of the Public Financial Management Act. There had been irregular expenditure in the closing balance of R1.1 billion, and fruitless and wasteful expenditure of R10.9 million due to a lack of sufficient review and oversight to ensure compliance with applicable legislation, timely implementation of proper record keeping, monitoring and review processes not implemented in a timely manner, and investigations as a result of fraudulent actions that could result in possible irregular and fruitless expenditure.

National Development Agency (NDA)

Mr Abram Hanekom, Board Member: NDA, introduced the Agency’s new Chief Executive Officer, Ms Thamo Mzobe, who had been appointed at the beginning of the year. He thanked the out-going CEO for her hard work during her tenure. He also said that many of the critical vacant positions had been filled and many of the executives who were in acting positions had now been employed permanently.

Ms Mzobe reported that the NDA’s strategic objectives for the year had been to mobilise R160 million to enable co-operatives to implement development programmes, to build the capacity of cooperatives through mentoring, training and incubation, for 13 000 cooperatives by 2017/2018. Their goal was also to undertake four action research and policy publications that informed policy development and good practice by 2017/2018, and to strengthen the internal capacity, systems and processes to improve operational efficiency and effectiveness.

Programme one: Resource Mobilisation for Civil Society Organisations

To mobilise R160 million to development programmes, the Agency had managed to raise R67.3 million for resources from alternative sources, in cash and in kind, to support cooperatives and the NDA’s programmes. A further 150 civil society organisations had been targeted to be funded from grants, and the Agency had exceeded this target by funding 154 organisations. It had also exceeded its target of to fund 1 800 beneficiaries from cooperatives, by ending up funding 3 321 beneficiaries. However, only 896 households had been supported through the Mikondzo programme against the 1 050 target.

Programme two: Capacity Building for Civil Society Organisations (CSOs)

In terms of building capacity, the Agency had targeted to train, mentor and incubate 2 000 CSOs. It had exceeded this goal by 687. It had also surpassed its other targets, such as the number of staff members in CSOs that were trained, mentored and incubated, and the number of CSOs capacitated in the Mikondzo programme.

Programme three: Civil Society Mobilisation and Advocacy

In order to promote active citizenry through consultation, dialogue and sharing of information, the NDA had aimed for ten consultants with social partners in CSOs to participate in national development programmes. However, it had failed to reach its other target and only nine dialogues and information sharing events were held with CSOs.

Programme four: Research and Knowledge Management 

The NDA had failed to achieve its target in terms of undertaking action research and policy publications, but it had achieved its target for the number of policy engagements held with government and the CSO sector. It had also exceeded its target of publishing 14 research publications.

Financial Statements for 2015/2015 Financial year

Mr Solomon Shingange, Acting Chief Financial Officer: NDA, said the NDA continued to operate under stringent financial constraints due to financial allocations increasing at 3% year on year, while the inflation averaged 6.5%. Key organisational expenses such as rentals of offices and employment costs had increased by 9% and 7% respectively in the previous financial year. The NDA had reported a deficit of R1.7 million in 2016, compared to a deficit of R12.4 million in 2015. Its revenue came from three sources of funding; allocations, conditional grants and other income.

The total expenditure of R256.7 million represented a spending of 90% of the total budget. 64% of the budget had been spent on mandate expenses, and the remaining 36% was on administration and support. The Agency continued to implement cost containement measures due to budgetary constraints, and administration expenses were 6% below the previous year, mainly due to savings from unfilled vacant posts and efficiency savings on the overheads. It had current assets of R105 million in 2016, with cash balances making up 99% of the total.

The NDA had received an unqualified audit for the 2015/2016 financial year. The key findings of the audit were related to non-compliance with supply chain rules and regulations, resulting in reported irregular expenditure to the value of R18.9 million in 2016. The Agency had taken corrective action aginst these findings. The non-compliance report was being investigated by an independent official from the Department.  Consequence management was being implemented through a duly appointed financial misconduct committee and systems. Processes and policies were being reviewed to address the weaknesses that had been identified by the AG.


The Chairperson said she had been hoping that all three presentations would be compiled in the same format. She was unhappy that the agencies had not included the targets of some of their programmes, as the targets made it easy for the Committee to determine how far they had come with regards to achievement.

Mr D Stock (ANC, Northern Cape) said he was happy to see an improvement in the correct alignment of targets to their respective programmes or plans. He asked the Department what measures it had put in place to ensure that SASSA did not get an irregular expenditure audit opinion in the next financial year. The National Treasury had allocated R621 million to SASSA for the 2015/2016 financial year, but it had spent only R226 million. He asked what had happened to the R395 million that was not spent, as it had not accounted for the amount.

Mr C Hattingh (DA, North West) asked the Department what corrective action it had taken to ensure that SASSA operated functionally in the next financial year. SASSA also had irregular expenditure of R1 billion rand, although they had explained the reason for the expenditure, but it had not given the Committee details about the on-going internal and external investigations regarding what had led to the irregular expenditure. He asked SASSA when the Committee could expect to receive a report detailing findings of the investigations, and who the people are that were being investigated. In the previous financial year, SASSA had reported that it had 839 cases that were being investigated, yet the Committee had not seen these reports or received information regarding the cases being investigated. He asked the Department whether it had conducted internal or external investigations, and what stage the investigations had reached.

Ms P Samka (ANC, Eastern Cape) said the Department had a tendency to overspend on certain programmes and under-spend on others. She asked what had caused the overspending and which programmes they were under-spending on. The Department had an obligation to ensure that the elderly received their pension from SASSA accordingly, and should there be any fraudulent incidents, SASSA should put in place measures that would deal with the fraud. She asked if the grant receivers under the grant-in-aid had been affected by the budget that was moved from one programme to another.

Ms T Mpambo-Subhukwana (DA, Western Cape) said the irregular expenditure report was worrying because SASSA seemed to have the same problem every financial year. She suggested that the SASSA must include time frames for their legal investigations so that the Committee could receive a full report with all the details of the investigations. She asked the Department if it had any plans to deal with the numerous fraud and robbery incidents against the elderly that were taking place at the SASSA pay-points. She also asked SASSA to indicate the locations where food parcels were given to the public and for how long they gave out food parcels to children.

She was disappointed that the Department had not mentioned any plans to combat crimes such as the rape of children and the type of working relationship they had formed with the South African Police Service and the Department of Home Affairs to deal with the number of bribes that officials were receiving at the border, as many of the officials who worked on the border had admitted that they did take bribes due to their low salaries. She asked that the Department provide the Committee with information on how many black students received scholarships.

Ms Samka added that SASSA had not provided details of how it operated within the provinces, and whether all provinces were managed the same across the border in terms of providing social grants.

The Chairperson congratulated the Department on receiving a clean audit, but she was disappointed that SASSA had not also managed to get a clean audit. She asked what seemed to be the fundamental problems in SASSA -- were they not being taught how to spend their budgets properly? Why had SASSA failed to learn from the Department? Monitoring and evaluation (M&E) plans were very important and SASSA should take the advice of M&E practitioners and planners very seriously. SASSA should not develop programmes that were over and above their capabilities, and the plans that they adopt should be implemented by people with the right skills and qualifications. There were a number of ECD facilities in the Eastern Cape that had bad infrastructure. When the Committee had conducted oversight it had found that many of the ECD facilities had an estimated 250 children, but the Department had given them subsidies for only 70 children. She asked the Department to look into this matter soon before they conducted another oversight on 14 November 2016.

She stressed that there were not enough social workers in the industry. She asked that the Department allocate sufficient budgets so that it could train and hire social workers. She suggested that the budget that was allocated for bursaries could be used for the training and hiring of social workers, because when students graduated they became unemployed because there were not enough work opportunities for them, so the number of unemployed social workers had increased over the years. The Department had also not shown any improvements in dealing with substance abuse, and had to devise other creative ways to raise awareness and attract the youth, because the number of young people who are attending awareness programmes was decreasing.

Ms Henrietta Bogopane-Zulu, Deputy Minister: DSD, said the policy development issues were currently being attended to, so the Department had asked that amendments be made to the Children’s Act. These amendments would make provision for foster care and clarify the classification of children. SASSA was currently trapped in a number of legal cases, and these cases had often made it difficult for normal operations to continue because they required so much of management’s time and commitment. Many of the investigations involving SASSA were being conducted by external bodies, so there were a number of delays in releasing the reports and the progress of these cases. Also, the legal cases that were being handled internally had caused delays in operations. Once these internal and external legal proceedings were clear, SASSA would get a clean audit.

It was not only the responsibility of the DSD to reduce the number of unemployed social workers – other departments, such as the Departments of Education, Police and Health, also employed social workers. Therefore, the DSD should work with these other departments to ensure that social workers were not only awarded bursaries, but that they were also trained and hired. The Department had previously approached the National Treasury to request that the budget allocated for bursaries be channelled to training and employing social workers, but its request had been turned down because bursaries and skills development fell under two different budget allocations.

The illegal deductions of social grants was not done by the Department, but were due to external factors caused by fraud and the robbery of social grants from the elderly. There were a lot of cases of family fraud – these were cases when, for example, the grandchildren of the elderly steal the SASSA card and use it to buy airtime. The Department was in the process of putting a programme together that would assist the elderly with safety measures, and advising them why they should keep their pin numbers safe and a secret.

She reminded the Committee that ECD facilities were provincial initiatives, and therefore they were the responsibility of provincial departments to continually monitor their progress. When ECDs were not monitored the individuals managing them tended to register more children into them than what had initially been planned, which was why some ended up with 250 children yet only 70 were being subsidised. This indicated that this facility was initially meant to have only 70 or fewer children. Also, it should be noted that not all children that were registered under the ECD programme qualified for a subsidy. Most of the children that are registered under the ECD were often voluntarily dropped off by their parents, who were able to afford to pay for the fees.

She concluded by saying that the issue of substance abuse was a tricky one. It was an on-going battle because every month the Department discovered that there was a new drug on the street that was being used. Currently, primary school children were drinking a cough mixture that they mixed with Sprite. There was also a new drug in Gauteng called Black Mamba, and it was being sold at the school tuck shops. Although the DSD had limited resources, it was constantly trying to respond to the appearance of new drugs.

The Chairperson thanked the Department and the agencies for their presentations. She said that if Members wished to ask more questions, they should direct them in writing to the Deputy Minister and the questions that were not answered must be communicated to the Committee.

The meeting was adjourned.

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