DSD & SASSA Annual Plan; National Health Laboratory Services Bill: briefing; with Ministers

NCOP Health and Social Services

12 June 2018
Chairperson: Ms L Dlamini (ANC; Mpumalanga)
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Meeting Summary

The Minister of Social Development, Ms Susan Shabangu, the Department of Social Development, and the South African Social Security Agency briefed the Committee on their Annual Performance plans and Budgets.

Minister Shabangu said the Department of Social Development is facing some serious challenges but she remains optimistic about the future. They are still in a war with Cash Paymaster Services on the issue of the payment of grants but plans are in place to ensure that the Post Office becomes the new payer of grants. They will be going on a breakaway to decide how best to deal with the issues plaguing the Department.

The Department has lessened its annual targets to prioritise what it needs to do to ensure it gets back on track. It is planning to submit a Draft Social Assistance Amendment Bill, Draft policy on the universalisation of the Child Support Grant, as well as other Drafts and White papers to Cabinet for approval.

The Department is facing a number of budget constraints due to budget cuts. There has been a baseline cut of more than R630 million; a decrease in allocations for grants of R 500 million, R30 million for the National Development Agency and Social Relief Distress of R270 million. These reductions have mostly been out of the hands of the Department due to a decrease in its goods and services budget.

The South African Social Security Agency set itself number of targets despite the challenges they face. For this financial year the Agency is targeting 1.6 million new applicants. The Agency is also looking to improve its data centres, achieve an unqualified audit and flush out corruption.  They are looking to fully utilise the Post Office as payers to beneficiaries come October 2018.

Aside from the major challenges at the Department of Social Development and the South African Social Security Agency, Members of the Committee had a number of other concerns. Members wanted to know about the Social Work Scholarships and what they are doing to facilitate Social Work graduates; about the cash handling fees; and the new pay points once the Agency is free of Cash Paymaster Services.

The Minister of Health, Dr Aaron Motsoaledi, presented to the Committee on the National Health Services Amendment Bill.  He informed the Committee of the various challenges that the National Health Laboratory Services face and why the amendments in the Bill were necessary. The Bill seeks to allow National Health Laboratory Services to get its budget directly from National Treasury and change the legislation so that the Minister can intervene more easily instead of having to go through the Minister of Finance, Finance Members of Executive Council as well as Health Members of Executive Council with respect to budgetary considerations. The National Health Laboratory Service is to send a representative to each Province to brief the province on the details of the Amendment Bill.

A Committee Member expressed concern that the Amendment Bill will strip Provinces of some of the powers.

Meeting report

Opening Remarks
The Chairperson welcomed members of the Committee and Delegates from the Department of Social Development (DSD) and the South African Social Security Agency (SASSA). The Minister would be joining the Committee later on. She said it was worrying that the DSD had not been keeping in contact and providing information to the Committee on the issue of the SASSA payments and the court case against Cash Payment Services (CPS).

Department of Social Development (DSD) Annual Performance Plan 2018/2019 (See Document)
Mr Kenny Maluleke, Director for Entity and Oversight Management Unit, briefed the Committee on the DSD’s Annual Performance Plan (APP).

Number of Targets per Programme
The total number of targets for the 2018/19 year is 62 which is down from 93 last year.  The Department has begun to prioritise what needs to be done and also taking into account the current Medium Term Strategic Framework (MTSF) is coming to an end the Department needs to ensure that MTSF targets are achieved.

Programme 1: Administration
For the strategic objective which is to provide strategic support and corporate services by 2019, the targets are the implementation of key elements of the Sector Human Resources Plan (SHRC) and to facilitate DSD participation in 8 international engagements.

On the strategic object integrated planning and performance management, the DSD wants to establish National Integrated Social Information System (NISIS) development governance framework and enhance existing data sources. The Minister of Social Development has a responsibility in terms of section 63 subsection 2 of the Public Finance Management Act (PFMA) to exercise oversight over the SA Social Security Agency (SASSA) and the National Development Agency (NDA) therefore there is a target to ensure that there is an annual assessment of compliance of entities to the entity governance and oversight framework that the DSD has developed. There is also a target to conduct an evaluation on project Mikondzo.

Programme 2: Social Assistance
The first strategic objective is to extend the provision of social assistance to eligible individuals by 2019. For the current financial year, the Old Age grant is targeted at 3 513 372, Child Support grant 12 402 241, War Veterans 107, Disability grant 1 049811, Care Dependency grant 154 353, Foster care grant 397 888 and Grant-in-aid 215 880. The number of Social Relief of Distress (SRD) applications awarded the DSD is targeting 252 833.

Programme 3: Social Security Policy & Administration
The strategic objective is an effective and efficient social security system that protects poor and vulnerable people against income poverty. The DSD wants to submit a draft Social Assistance Amendment Bill to Cabinet for approval and also a Draft policy on the universalisation of the Child Support Grant (CSG).  The DSD also wants to draft Regulation on Social Assistance Amendment Act Promulgated. The next targets are to submit policy mandatory cover for retirement, disability and survivor benefits to Cabinet for approval and to submit policy on voluntary inclusion of informal sector workers to Cabinet for approval.

Programme 4: Welfare services Policy Development & Implementation Support
The Strategic Objective is to strengthen social welfare service delivery through legislative and policy reforms. The DSD wants to submit the White Paper on Social Welfare to Cabinet for approval. There is a target to develop an implementation plan for the Demand and Supply model for Social Service Practitioners (SSPs).  The DSD wants to monitor implementation of Recruitment and Retention Strategy for SSPs. The next target is to submit the Social Service Practitioners Bill to Forum of South African Directors-General (FOSAD).  The last target is to conduct an older persons Parliament and Active Ageing Programme.

The Strategic Objective is to strengthen child protection services and improve the quality of Early Childhood Development (ECD) services. The DSD wants to monitor the implementation of the National Integrated Implementation Plan on ECD Policy. The DSD also wants to ensure that there is approval of the 2019-2022 National Plan of Action for children in South Africa.  The DSD will be monitoring the implementation of the Children’s Act. The DSD wants to submit the Child Care and Protection Policy to Cabinet for approval and develop uniform implementation guidelines for provinces. The DSD wants to capacitate 9 provinces to implement guidelines and strategies for: adoption, foster care and Child and Youth Care Centres (CYCCs). The DSD will also develop the inter-sectoral protocol and also build capacity of the nine Provinces to implement Active Teenage Parenting Programme

The DSD will conduct capacity building in the nine provinces to implement the reviewed Policy Framework on Accreditation of Diversion Services. They will also conduct awareness campaigns in the nine provinces on multi-disciplinary Integrated Social Crime Prevention Strategy. The DSD will submit a Bill on Victim Support Service to FOSAD and submit the reviewed South African Integrated Programme of Action (PoA) that addresses Gender Based Violence (GBV) to Cabinet for approval.  The Department will submit the Anti-Substance Abuse Policy to FOASD and submit draft National Drug Master Plan (NDMP) to Cabinet.

The DSD is targeting the development of draft integrated Action Plan to respond to the social and structural drivers of HIV, TB and STIs.

The DSD wants to submit draft Policy on Social Development Protection, Community and Human Development (SPCHD) cluster. And the National Strategic Framework on Disability Rights awareness campaigns submitted for Cabinet Approval. The DSD is targeting one compliance report on implementation of the White Paper on the Rights of Persons with Disabilities (WPRPD); and one periodic report on the UN Convention on the Rights of Persons with Disabilities (UNCRPD) to be submitted to Cabinet for approval. The other target is to develop Disability Rights Information Portal Phase 1 (Mobile app).

Programme 5: Social Policy & Integrated Service Delivery
The Strategic Objective is to facilitate management and coordination of cross-cutting functions for DSD and Social Cluster. The annual target is to develop EPWP Social Sector Phase 4 Plan.

The next Strategic Objective is to promote and support the implementation of the Population policy. Here the DSD wants to produce nine reports on the implementation of the White Paper on Population Policy and the International Conference on Population and Development (ICPD) PoA. The DSD also wants to finalise Draft Policy Paper on demographic youth dividend.

The third Strategic Objective under this programme is to create an enabling environment for NPOs to deliver effective services. Here the DSD will be facilitating the implementation of the DSD Sector Funding Policy and also the implementation of the DSD-NPO Partnership Model. The DSD will submit the NPO Bill to Cabinet.

The next Strategic Objective is to facilitate and coordinate community development efforts to build vibrant and sustainable communities. The DSD wants to facilitate the implementation of the Community Development Practice Policy as well as the implementation of guidelines. The DSD is targeting the facilitation of Operation Phakisa delivery lab on social transfers’ contribution to Local Economic Development. The DSD continues to implement the Mikondzo programme. The DSD is targeting the facilitation of the implementation of Social Development Youth Policy as well as the implementation the Social Development Youth Strategy.  They will have 1 000 youth attending national youth camp. The DSD will submit Policy Framework on the management of Community-Based Workers for Approval.

The final Strategic Objective is to contribute to poverty eradication and elimination of hunger through support to community driven programmes and the provision of food and nutrition service. The DSD is targeting 1 000 cooperatives linked to economic opportunities. The DSD will also develop a Developmental Model for CNDCs and assess the implementation of the integrated Food and Nutrition Security Plan. 415 000 Vulnerable individuals will be targeted to access food through CNDCs.


Budget Allocations 2018/2019 (See Document)
Clifford Appel, CFO for the DSD, presented the Budget.  

Summary – 2018 MTEF
With regard to allocations over the MTEF the baseline increased by R 345 512 000, but there is a reduction of R630 619 000. The reductions that stand out are the R500 000 000 in grants, over the MTEF there was a R30 000 000 reduction in the NDA’s budget, Social Relief of Distress R270 000 000, the reductions in the Mikondzo project and the Departmental outreach reductions. Mr Appel said that the DSD had no influence in these things and in fact they had the total goods and services budget reduced, and they had to intervene in that regard and therefore the further reduction in the Social Relief of Distress in order to NDS’s operational budget again in place.

The Chairperson welcomed the Minister of Social Development, Ms Susan Shabangu.

The Chairperson asked for clarification around the CDA and why it does not have its own APP.

The Acting Director-General, Ms Nelisiwe Vilakazi, said the CDA was a statutory body as outlined in the Prevention of and Treatment of Substance Abuse legislation; they do not have budgets allocated specifically for them therefore they do not have specific APPs drawn for themselves. What they do have is a business plan that guides their activities for the year in terms of their coordination, which is mainly a coordination structure rather than an implementation structure.

The Chairperson allowed the Minister to make some inputs and give remarks.

Minister’s input and remarks
Minister Shabangu apologised for missing the Committee meeting the previous week. She would not be able to attend next week’s meeting also but had pleaded with the Deputy Minister to attend. They would deal with any questions after the presentation was done.

The Chairperson said on the issue of ECDs it is not clear to the Committee who is responsible for the building of ECDs. She asked what had been happening on the appointment of Social Workers. The Department’s APP is more inward looking, yet they are supposed to provide services to the people. Who is supposed to conduct programmes for drug and substance abuse programmes? The Department also in its APP should be playing a role in the fight against violence against women and children.  She also expressed concern over the issues at SASSA and the lack of information the Committee has received from SASSA.

The Minister said she had noted the issues that the Chairperson has raised; issues that the Minister is also concerned about. They would go on a breakaway to look at how they can reposition themselves as a Department. When she took over she faced three structures from 2015, 2016 and 2017. These impact on their ability to deliver. They need to look at how they can stabilise themselves.  They are in a space where they are coming from a place where they did not have an approved structure but where they had people employed, to a structure now that is not well balanced. DSD has 44% core and 56% support and in terms of government there needs to be more core than support. This also impacts on the budget. The Minister extended an invitation to the Chairs to participate in the breakaway and facilitate in the Department in their issues.

The issue of the ECDs cannot be resolved on their own; they have to work with the Department of Basic Education.  SASSA is currently dealing with court issues and they have to submit two reports every month to court.  They are in the process of moving to the Post Office as a service provider. The Department has set itself a target that come 1 October 2018 grant recipients must no longer receive their money through CPS. The Minister highlighted that CPS is fighting against the Department ant is causing them a lot of difficulties; the fight with CPS was a war. Pay points need to be within 5 km of each other. Where they do not meet this requirement, the Department is in the process of saying they will talk to the transport industry to take recipients to the nearest pay points.

SASSA Annual Performance Plan & Budget (See Document)
Ms Raphaahle Ramokgopa, Executive Manager: Strategy and Business Development, said SASSA’s vision is to be a leader in the delivery of social security services. Their mission is to administer social security services to eligible children, older persons and people with disabilities.

Introduction and context
The SASSA 2018/2019 APP is informed by a number of significant developments impacting on the Agency performance. Key among those are: an agreement with the South African Post Office (SAPO) to facilitate payment of social grants, the Constitutional Court judgement of 23 March 2018 in the SASSA application to utilise current payment service provider for six months period (1 April – 30 September 2018), review of the cash payment method including the migration of cash beneficiaries to electronic channels and an internal review and re-prioritisation of some projects.

SASSA 2014-2019 MTSF Priorities
The primary focus of SASSA in the medium term is: reducing income poverty by providing social assistance to eligible individuals, improving service delivery, improving organisational efficiency, and institutionalising social grants payment system within SASSA. 

Programme 1: Administration
The first objective is to uphold good governance. One of the major things SASSA is working on is to ensure that all fraud, theft and corruption cases are investigated within the prescribed timeframe. Their target is to ensure that at least 70% of reported cased in a financial year are investigated.  SASSA also wants to ensure that their Risk Registers are maintained and regularly updated. They plan on conducting 30 internal audit reviews on high risk areas such as supply chain, payment environment and areas that have to do with grant payments themselves.  SASSA has worked towards achieving an unqualified audit outcome.

The next strategic objective is to provide efficient human capital management. Here SASSA wants to review the organisational structure to incorporate new payment administration functions. SASSA also wants to review the HR Plan and capacity model to ensure that whatever they do it is aligned to the new organisational structure.  They also have to ensure that 95% of all funded posts are filled at all times. The other important target us the finalisation of labour relations cases within prescribed timeframes.

The third strategic objective is to ensure beneficiary records are safely kept and managed. SASSA is concluding the Co-sourcing of records management centre for the Eastern Cape. They are working on automating their registries so that in future they can reduce the paper they are working on.

In the long term they want to look at the infrastructure plan. SASSA has more than 2 000 across the country so they need a proper infrastructure plan. They are also looking at SAPO and what their partnership will mean for their infrastructure plan.

On ICT they are seeking to reduce fraud. Their area of focus is the issue of biometric identity access management system. SASSA wants to ensure that it is implemented for the Social Grants Payment and Administration system (SOCPEN). They have already started to roll out for beneficiaries nationally.

In terms of operations they also want to improve their network connectivity upgraded at 116 offices.

In terms of data SASSA is developing a data governance framework. They will also be finalising the business intelligence solution implemented for grant payments.

The last strategic objective for this programme is to improve financial management.  SASSA wants to ensure that the social assistance payment accounts are reconciled.  They want to ensure that their suppliers are paid within 30 days and they recover social assistance debts and/or submitted for a write off. SASSA is targeting the finalisation of financial misconduct within 90 days for both current and backlog cases.

Programme 2: Benefits Administration and Support
SASSA’s plan is to ensure that new social grant applications are processed. Their target for this financial year is 1.6 million new applicants. In terms of the improved grant application process SASSA is looking at reducing the application turnaround time from 15 days to 10 days. 85% of their applications are processed within one day but they allow themselves the 10 days to allow for disability grants and those that they process in the service points.

They plan on increasing the number of grants in payment from 17.4 million to 17.7 million by the end of the 2018/19 financial year at an estimated cost of R163 billion. SASSA is targeting an increase in the number of grants issue in receipt to children aged 0 to 1 years old to 560 000 recipients.

On the SRD applications they are targeting 252 833 at a cost of R410 million. Of the money allocated to SRD they are targeting 30% (R123 million) award through cooperatives.

SASSA is targeting a reduction in inclusion and exclusion errors.  They are targeting foster care grant reviews in collaboration with DSD at 130 976 foster care grant reviews.

They are targeting 309 wards having access to social assistance through the Integrated Community Registration Outreach Programme (ICROP), as well as communicating the benefits of receiving social grants through electronic channels to beneficiaries using print and electronic media.

SASSA’s plan is to make sure that they phase out CPS by 30 September 2018 in line with the Constitutional court’s mandate. Also, they want to ensure that SAPO is phased in before the 1 September 2018.

In terms of regulation 26A, which allows for deductions for funeral policies, which was done previously by CPS on behalf of SASSA, they have fully taken the responsibility away from CPS. They have more than 763 000 reductions that they are managing now. SASSA is now managing the collection of mandates and facilitation of payments, exceptions management, and maintaining databases of beneficiaries but they are not doing insurers.

SASSA’s target is to reduce cash pay points by 20%. They may exceed this target due to multiple pay points being within a 5 km radius of each other.

SASSA 2018/19 Financial Plan (See Document)
Mr Tsakeriwa Chauke, CFO, SASSA, took the Committee through the financial plan. SASSA has received R8. 2 billion for the 2018/19 financial year, this is 11% up from the previous financial year.


Salient features of the SASSA budget
Included in the R8.2 billion is R515 million which is cash in the bank. The transfers received from the DSD is R7. 7 billion but they also had cash in the bank. 45% of the allocations of the transfer payments go towards compensation of employees.

Funding from the retained cash surplus
The R96 million for the scanning solution is so they can reduce the amount of paper that is required but they can keep the paper for audit purposes. The ICROP is R114 million which is to be able to interface with beneficiaries.  SASSA has already bought the ERP Servers and the remaining balance is R 461 000 which they need to pay this year.

Ms L Zwane (ANC; KwaZulu-Natal) said the DSD’s programme on drug and substance abuse is very important. The Chairperson said she is unsure that the allocation for this programme is enough to combat drug and substance abuse.

Ms Zwane asked if beneficiaries still had the option to use CPS or if they are confined to use SAPO.
She asked why 95% of funded posts and not 100%?
Ms Zwane asked SASSA which route the allocation to the coops is made through; and who is getting paid the cash handling fees.    

Ms T Mampuru (ANC; Limpopo) asked how it is determined which children qualify for foster care grants; and how it is checked that grants go to the right people.

Ms D Ngwenya (EFF; Gauteng) expressed concern over the social work scholarships. They have received outcries from social work graduates who are very disgruntled that they are not being utilised.

Ms Ngwenya asked how many of the social workers who are graduates from the scholarships programme are employed; if CPS leaving means that the amount paid for cash handling fees will decrease; and if the card swaps apply to all beneficiaries including those using private banks.

Ms T Mpambo-Sibhukwana (DA; Western Cape) asked for an update on the progress of the strike at SASSA.

Mr M Khawula (IFP; Kwazulu-Natal) asked the Minister to look at incidents of violence and abuse against those living with albinism.

Mr Khawula said there have been reports about tender splitting in December 2017. What has the DSD done about that?

She asked if there are going to be any trial runs with the SAPO to see any potential problems; and how much debt SASSA is chasing given that it has allocated R 5 million to debt collection.

The Chairperson said the questions needed to stop due to time constraints. The Committee would write to the Minister, the DSD and SASSA to have their questions addressed via written response.

The Chairperson thanked the Minister, the DSD and SASSA for their presentations and their time.

Presentation on the National Health Laboratory Service Amendment Bill
The Minister of Health, Dr Aaron Motsoaledi, summarised why they need this bill. The Minister said prior to 1994 a lot of hospitals had their own laboratories. The National Health Laboratory Services (NHLS) was set up to facilitate smaller hospitals which did not have their own laboratories or had very poor laboratories. The NHLS may be found in hospitals but they do not belong to the hospital. The NHLS has its own board and its own CEO.

There are a number of problems with the NHLS. The first problem is that while it is a Government service it is run like a business. The NHLS was not given a budget by the state. Their budget was given to the DG of Health who then distributed it to Provinces as a conditional grant. Hospitals in Provinces send samples to NHLS to be tested and then the NHLS would send the Bill back to the Province. The Province would take the invoices from the Hospitals and pay NHLS. This is the money the NHLS would use to run their operations.

The second problem is that since the NHLS is run on a business model it has had to compete like any other business. The NHLS could not compete with private laboratories with regards to pricing. Hospitals are forced to use the NHLS due to Legislation. When the Minister questions why the NHLS was charging more, it was because the NHLS was providing training unlike private laboratories.

When Provinces are in financial trouble they do not pay the NHLS because the NHLS falls under the National Minister.  During the Ebola crises the DG sent the conditional grants directly to the National Institute for Communicable Diseases (NICD). The Auditor-General deemed this money to be irregular expenditure.

Since the NHLS was run like a business there were times when they needed to increase their prices such as to account for inflation. In terms of the existing Act, for the NHLS to increase their prices they have to write to the Minister of Health. The Minister of Health has to then write to the Minister of Finance to get concurrency. The Minister of Health also has to write to all MECs for Health and all MECs for finance and the Minister of Health cannot give the go ahead to the NHLS until all of these officials have responded and agreed.

There were 22 members in the NHLS. Nine of the board members were representing Provinces. The Constitution of the Board could not take place until the MECs present a name. Many of them would delay this.

The Amendment bill seeks to lessen the number of Board members from 22 to 11 and there would be no more need for Provincial representation.  The Bill also seeks to allow the NHLS to get its budget directly from National Treasury. The Bill allows the Minister of Health and the Minister of Finance to sit together and decide how NHLS services are to be priced. The Bill seeks to allow the Minister to set up a review committee to assess the performance of a Board to allow the Minister to dismiss a Board member.

A Member of the Committee asked if the Bill needs any additional allocation of funds for it to be effective.

Minister Motsoaledi said they do not need any extra money.

Mr Khawula expressed concern that the new Bill would be stripping the Provinces of certain of their powers. Since representation from Provinces is going to be reduced what is there to compensate for that?

The Minister said that the NHLS is a National service given to the Nation and it falls under a National Minister. The Provinces not paying the NHLS is a real problem that the Minister has grappled with for a long time.

The Minister departed the meeting.

The Chairperson said they still have to go to the Provinces with the Bill. The Chairperson requested that the NHLS send a representative with members of the Committee to various Provinces to brief them on the Bill clause by clause.

The Meeting was adjourned.


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