In this joint virtual meeting of the Portfolio Committee on Social Development and Select Committee on Health and Social Services, Members were briefed on the 2019/20 financial year Annual Reports of the Department of Social Development (DSD), the South African Social Security Agency (SASSA) and the National Development Agency (NDA).
The Minister of Social Development opened the virtual meeting by reminded Members of the launch of the “16 Days of Activism” campaign against violence towards women and children. The 2020 theme was “Women’s Economic Justice for a Non-Violent and Non-Sexist South Africa.” The campaign overlapped with “Disability Awareness Month” and the “National Week of Mourning and Remembrance.”
The DSD, SASSA and NDA had all received unqualified audit opinions. Some of the root causes of shortcomings identified by Auditor-General of South Africa (AGSA) showed that the Department did not respond timeously to issues involving internal controls and risk areas. SASSA and NDA had improved in implementing their internal controls and had an adequate risk management plan. Also, the AGSA had found that SASSA and NDA had failed to design an adequate consequence management process, which meant that there was no effective strategy in place to guard against fruitless and wasteful expenditure. There was no evidence of disciplinary action being implemented against officials who had misconduct cases open. AGSA had also discovered that SASSA had ignored Treasury notes on procuring personal protective equipment (PPE) and had ended up paying more than what was allowed.
The Committee was concerned about a possible regression by SASSA through not adhering to the AGSA findings on how the Department’s entity oversight plans needed to be reviewed.
The Department listed the challenges it had to deal with in its various programmes, and commented that overall, its actual expenditure had been skewed to 108% because of COVID-19. It had been able to achieve an 80% success rate with its performance during the year.
SASSA referred to the improvements that had been made to reflect the change in the social assistance it was providing. It had achieved a 74% performance rate. Some key highlights were that the number of allocated grants had increased, the relationship between SASSA and the South African Post Office (SAPO) was growing, and specific targets had been met while others had been carried over into the new financial year. Overall, SASSA was in good financial health.
The NDA had achieved a 64% performance rate. The presentation focused on their initiatives with civil society organisations (CSOs) which were instrumental in helping them to distribute food parcels. They had been able to meet a few of their targets, but some were halted because of COVID-19.
The Committee found that the Department and its entities had overly used COVID-19 as an excuse for targets not being met. However, it commended it for having ‘green shoots’ in most of its programme areas. There was concern as whether the SASSA and NDA would resolve the challenges in their procurement processes. The moratorium on recruitment had ended, so the Committee was worried that the Department and its entities were not hiring people with disabilities, as they were well below the government’s 6% target
Minister’s opening remarks
Ms Lindiwe Zulu, Minister of Social Development, reminded the Committee of the “16 Days of Activism” campaign against the violence of women and children that had launched. The 2020 theme for the campaign was the ‘Women’s Economic Justice for a non-violent and non-sexist South Africa.’ The campaign coincided with ‘Disability Awareness Month’ and the ‘National Week of Mourning and Remembrance’ that had been launched. The flags at the Union Buildings were lowered on 25 November 2020 to signal the start of the National Week of Mourning and Remembrance.
She emphasised that there were Members of Parliament, the Select Committee and Portfolio Committee, who were aware of the problems that the Department encountered because of gender-based violence (GBV), and appealed to them to assist the DSD and the Department of Women, Youth and Persons with Disabilities. She congratulated the citizens of South Africa for their continued assistance in the fight against GBV. In addition, the DSD and the government recognised that the fight against GBV was dedicated throughout the year, and stressed that the DSD encourages every household to participate in the campaign.
Department of Social Development (DSD): 2019/20 Annual Report
Mr Linton Mchunu, Acting Director-General, DSD, said the Department was presenting the Annual Report for the DSD and its entities for the 2019/20 financial year. It was a continuation of the quarterly reports and provided more information on the 2019/20 financial year. The financial year had concluded during a COVID-19 pandemic, which had increasingly impacted the Department’s targets for the last remaining quarter of the year. Some of the targets were carried over into the new financial year, whereas a few targets remained uncompleted. The Department’s Annual Report concluded the work of the fifth administration. It was transitioning into the sixth administration when compiling the 2019/20 Annual Report, so some of the previous administration’s work had been carried into the sixth administration.
The Department’s challenges included high levels of poverty, unemployment and inequality, GBV, substance abuse and the abuse of children. These were also exacerbated by COVID-19. This had forced the Department to develop measures to benefit the citizens of South Africa. For example, it had implemented a project to increase the supply of food parcels to decrease malnutrition.
The Department had recorded its worst financial year, but improvements had been made since the previous portfolio meeting which had resulted in an 80% success rate. Two reasons for the low performance was low staff morale due to the two-year moratorium placed on posts, and the impact of COVID-19. There were other challenges within the Department and these had since been worked on.
The Department had received a clean audit from the Auditor-General of South Africa (AGSA). The audit outcome was an improvement from the prior year, when it had received a qualified audit outcome. The financial statements had improved from the 2018/19, and no material issues were identified in the 2019/20. For the eighth consecutive financial year (2019/20), it had retained its unqualified audit outcome on performance information. There were material misstatements in the annual report which were subsequently corrected. As a result of these corrections, no material findings were raised on the usefulness and reliability of the reported performance information.
Mr Thabani Buthelezi, Chief Director, DSD, said the Annual Report reflected the work of the fifth administration. The Information Management Systems Technology (IMST), entity oversight, monitoring and evaluation, and finance where the areas where targets were not met. Significant progress was being made now in those areas.
He highlighted the following challenges:
IMST: Efforts to integrate the silo information technology systems as planned were hindered as a result of limited human resources.
Entity Oversight: This had been a recurring challenge for the DSD, and through its portfolio approach this function had been moved to the Director General’s (DG’s) office to bolster its efforts to deal with this challenge. In addition, through the ongoing Government Technical Advisory Centre (GTAC) process for its organisational reform, the entity oversight function was a priority area.
Monitoring and Evaluation: The evaluation of the social sector infrastructure did not commence on time as planned, as the scope of work had to be re-costed. The scope of the work was increased and as a result, the evaluation timeframes had to be amended. The study had now been completed.
Finance: The Department obtained a qualified audit opinion from the AGSA on its 2018/19 audited annual financial statements due to expenditure relating to social assistance grants that was not supported by accurate, sufficient and appropriate evidence.
Social Security: The policies on mandatory cover for retirement, disability and survivor benefits, and the voluntary inclusion of informal sector workers in social security, could not be finalised due to additional technical work and extended consultations at the National Economic and Development Labour Council (NEDLAC). Although the draft regulations to support the implementation of the Social Assistance Bill were completed, they could not be published for public comment, as the legislation was not finalised.
Professional Social Services: The White Paper on Social Development could not be presented in March 2020 due to cancellation of the Cabinet sitting as a result of the COVID-19 outbreak, leading to the national lockdown.
Children’s Services: Only eight provinces were capacitated in the National Plan of Action for Children. The Northern Cape session, which was scheduled for March, was postponed because of the Covid-19 outbreak that led to the national lockdown. The Children’s Amendment Bill could not be submitted to Parliament for consideration due to delays in Parliamentary processes.
Social Crime Prevention: Development of the policy on the provision of counselling, and revision of the White Paper on Families, could not be completed due to delays relating to finding an expert to provide technical support. The area of families was a specialised field, and the few service providers that were available were not registered on National Treasury’s central supplier database (CSD).
HIV and AIDS: The draft integrated action plan to respond to the social and structural drivers of HIV, TB and sexually transmitted infections (STIs) could not be finalised due to extended consultations with social sector departments.
Rights of Persons with Disabilities: Guidelines for the embedding of disability inclusion in government-wide institutional arrangements were not finalised for approval due to a lack of capacity in the unit. The annual progress report on the implementation of the White Paper on the rights of persons with disabilities was not completed due to the poor quality of inputs to the report and misalignment between the information reported, matrix targets and timelines. The policy on services to persons with disabilities and their families was not submitted for approval for public comment due to pending approval by the executive committee (EXCO) and presentation of the policy to the social cluster.
Special Projects: Only five of the nine provincial Expanded Public Works Programme (EPWP) Phase 4 business plans were developed due to delays by provinces to endorse and sign off provincial targets on their five-year business plans.
Non-profit Organisations (NPOs): The NPO Amendment Bill could not be submitted to Cabinet due to delays in the issuing and approval of the Department of Performance Monitoring and Evaluation (DPME) Socio-Economic Impact Assessment System (SEIAS) certification. Only 97.7% NPO applications for registration were completed within two months of receipt due to incorrect targeting, as it was impractical to process all received applications; 44.3% of NPO compliance reports were processed within two months of receipt due to the drastic increase in submission of NPO’s annual reports as a result of the “Know Your NPO Status” campaign.
The objective was to reduce the levels of income poverty and inequality by expanding access to social security through the monthly transfer of funds to SASSA for the provision of social grants to eligible beneficiaries. R190.291 billion was transferred to SASSA between April 2019 and March 2020. The impact of this intervention reduced poverty and contributed to the reduction of income inequality in the country, and empirical evidence showed that the Child Support Grant (CSG) contributed to improved school attendance, educational attainment and access to food. Social grants proved to be the most effective mechanism available to government to cushion millions of the most vulnerable individuals and households from the dire socio-economic impact of COVID-19.
Social Security Policy Development
The Department developed and completed a discussion paper linking CSG beneficiaries with government services. This allowed the DSD to harness the developmental nature of the social security system by empowering beneficiaries with both finance and services. Draft regulations to support the implementation of social assistance legislation were compiled. This reduced the congestion within the foster care system, provided increased support to orphans and improved access to the appeals process.
Professional Social Services
The Department developed a framework for the Social Development Bill. This was consulted in all provinces. This would impact the reposition of the social development sector towards achieving the developmental agenda.
The Department launched capacity building sessions on the implementation of guidelines for community-based prevention and early intervention services to vulnerable children, which were conducted in all provinces. The programme managed to provide these services to 556 301 vulnerable children, and trained 6 773 child and youth care workers.
Early Childhood Development (ECD)
The Department developed and compiled a comparative analysis report on current ECD delivery models. This would assist the government to realise the vision of universal access to quality and affordable ECD services as set out in the national development programme (NDP).
Social Crime Prevention and Victim Empowerment
The Department aimed to build capacity in the DSD’s anti-gangsterism strategy. Personnel had been trained in Limpopo, KwaZulu-Natal, the Northern Cape and Mpumalanga. DSD personnel were now equipped to deal with the threat and risk factors and the general signs of identifying children and youth in gangs, and assessing and profiling the children with signs of involvement in gangsterism. In the second quarter, the Minister of Police had reported that there was a significant reduction in social crime and substance abuse in the trained provinces.
The national drug master plan (NDMP) was approved by Cabinet in October 2019. This allowed the DSD to outline all national concerns in drug control and summarise national policies, priorities and responsibilities for drug control efforts. The NDMP also sets out the contribution and role each stakeholder must play in combating the scourge of substance abuse.
Officials working in public treatment centres, district offices and provincial offices in KZN, Gauteng, Free State, Mpumalanga and Eastern Cape, were trained on all universal treatment curriculum courses. This would improve the quality of treatment services by standardising treatment programmes across all public treatment centres. The Department piloted its framework, which was developed and approved for implementation in the 2020/21 financial year.
HIV and AIDS
The Department conducted 12 psychosocial support services capacity building workshops in all provinces. Three additional workshops were conducted through collaboration and funding from PACT SA. 589 social service professionals (SSPs) were trained in all provinces. This intervention also contributed to the United Nations AIDS (UNAIDS) programme’s 90-90-90 strategy, that encourages 90% of people at risk of HIV to test, of those tested, 90% to be on treatment, and 90% on treatment to be virally suppressed.
Rights of People with Disabilities
The Department developed frameworks on disability rights awareness campaigns, as well as self-representation by persons with disabilities. The two national strategic frameworks on self-representation and public awareness campaigns had been revised and updated. The frameworks were due for consultation by affected sectors. The impact of these frameworks was to continue the promotion and protection of the rights of persons with disabilities.
Population and Development
The national population policy influenced the country’s population trends to remain consistent with the achievement of sustainable human development. The policy ensured the establishment of effective mechanisms for the collection, analysis and interpretation of demographic and related socio-economic data and their use in policy formulation, planning, programming, monitoring and evaluation processes in various sectors.
The Department facilitated the implementation of the DSD sector funding policy and the DSD-NPO partnership model.
Community Development Practice
The Department facilitated the implementation of the community development practice (CDP) policy through capacity building of CDP forums, with members in six provinces. 3 000 community development professionals were trained. Capacitating the CDPs contributes towards the government priority of a capable, ethical and developmental state.
The Department facilitated the implementation of the DSD youth development strategy.
The Department facilitated the development of the community mobilisation and empowerment framework.
The Department was able to provide 876 860 vulnerable individuals with food through DSD feeding programmes. 1 380 people were employed within the programme at the provincial food distribution centres and community nutrition and development centres. R12 million was procured for the programme for emerging food producers. These were 23 small, medium and micro enterprises (SMMEs) and 36 cooperatives involved from all provinces.
Mr Fanie Esterhuizen, Chief Financial Officer, DSD, explained that COVID-19 skewed the Department’s actual expenditure to 108%. For Programme One (Administration), under-spending was due to the over estimation of retirement benefits for employees. For Programme Two (Social Assistance), over-spending was due to COVID-19 and the South African Social Security Agency (SASSA) shifting its social grant date from 1 April 2020 to 30 March 2020. For Programme Three (Social Security and Administration), under-spending was due to legal services costs. For Programme Four (Welfare Services Policy Development and Implementation Support), R92 million was reprioritised towards GBV. Part of the funding was allocated towards funding 200 social workers, and the remainder had funded ‘One-stop Centres.’ R33 million was allocated to funding the social workers, and R60 million towards the establishment of the one-stop centres. For Programme Five (Social Policy and Integrated Service Delivery), there were operational savings made from the Department not participating in events and outreach programmes planned for the year.
SASSA Annual Report 2019/2020
Ms Busisiwe Memela-Khambula, Chief Executive Officer (CEO), SASSA, said there was a R7.7 billion administrative budget and R175 billion reserved for social assistance transfers. SASSA had received an unqualified audit outcome. The performance rate had improved from 64% in 2017/18, to 74% in 2019/20. Targets were not achieved for benefits administration and support. The North West province cash pay points had not been monitored effectively.
Mr S Nkuna, Senior Grants Administrator, SASSA informed the Committee that the implementation of the social assistance programme had slightly increased the number of grants paid out. 18 290 592 people were assisted. The total number of social grants amounted to 32.36% of the total population in South Africa. The social relief of distress (SRD) packages had exceeded the amount targeted. The number of children aged 0 – 1 registered for social grants had increased.
SASSA had been able to complete its social grants review process. This was impacted by clients who did not have postal addresses, and had to be traced manually. The contract between SASSA and the South African Post Office (SAPO) was reviewed continuously to reflect the changes in the country.
70% of reported fraud cases were finalised. There was a strategic risk register maintained. 20 internal audit reviews were conducted on high risk areas. Consequence management had dealt with labour relations and financial misconduct cases.
Interfaces done with BankServAfrica, SAPO and the DSD would assist SASSA to have a platform to exchange and access payment information for reconciliation purposes, and to access beneficiaries’ details, particularly for appeals. SASSA’s network connectivity infrastructure was upgraded in 140 offices and the process for e-forms was completed for grant applications. This would help with disability management.
Mr Tsakeriwa Chauke, CFO, SASSA, informed the Committee that SASSA’s budget used cash accounting and the report on its financial performance was on the accrual basis of accounting. SASSA’s budget was adjusted by R60 million to accommodate the Department’s GBV initiative. In 2018/19 a moratorium was placed on filling staff vacancies. This had been lifted in 2019/20, but all the vacant posts were not filled.
The contractual pricing structure between SASSA and SAPO distinguished the service fees charged per channel used by grant recipients when they withdrew their benefits. The grant recipient may elect to be paid either from the national payment system (NPS) infrastructure -- from the automatic teller machines (ATMs) or merchants -- over the counter at SAPO outlets, or at the cash pay-points. The majority of recipients opted to receive their benefits from the NPS infrastructure, which attracted the lowest fees, while a provision was also made for the other two channels, thus the under-spending on the cash handling fees.
SASSA minimised the use of consultants, and utilised its internal capacity to conduct fraud investigations, which were previously outsourced. SASSA was working on improving its supply chain management (SCM) procurement processes, particularly in response to the national state of disaster. R102 million had been added to irregular expenditure in 2019/20. Most of irregular expenditure was from the previous financial year. Overall, SASSA was in good financial health.
National Development Agency (NDA) Annual Report 2019/2020
Ms Thamo Mzobe, CEO, NDA, reported that the Agency had received an unqualified audit opinion. It had three programmes, and was able to achieve a 64% completion rate.
The NDA implemented the Master Systems Plan (MSP), through the Civil Society Organisation (CSO) database and Integrity Management Service (IMS) system, aimed at automating key programmatic and service delivery-oriented processes and also through various information communication technology (ICT) projects and solutions aimed at improving business efficiencies within the NDA.
The NDA had been able to increase its services to civil society organisations through the implementation of the CSO development model, particularly in the areas of mobilisation, formalisation and capacity-building of CSOs. In fulfilling the mandate of mobilising resources and acting as a conduit for the disbursement of funds to CSOs in the pursuance of their developmental aspirations, the NDA had raised R55.7 million worth of financial support. The NDA had furthermore grant-funded 153 CSOs, enabling them to implement poverty relief programmes targeting the vulnerable and poor in society. These CSOs had ensured that the NDA made inroads into ridding society of the dire effects of poverty, especially in areas where these CSOs operate.
In the fight against the COVID-19 pandemic, the NDA was involved implementation of the volunteer programme through which CSOs assisted communities with the distribution of food parcels, support of the elderly and disabled persons, and the dissemination of COVID-19 information at hot spots, as well as door-to-door within communities.
Mr Ben Morule, Senior Manager: Office of the CEO, NDA, said the NDA had developed a salary key scale, but it had not been approved for implementation. All modules for the integrated ICT system were fully developed, with the exception of the grant funding module. The NDA had achieved an 85% compliance rate for legislative and regulatory requirements.
There were 9 504 CSOs that had participated in the CSO mobilisation programmes in 2019/20; 1 008 were assisted to formalise their structures; 5 011 were trained to comply with legislation for registration; 5 263 were capacitated in civil society organisational management; 153 received grant funding; and 2 272 were referred to sustainable resource opportunities.
The rand value of resources had increased. There were 16 research reports and policy briefs produced; 10 evaluation reports produced; 15 knowledge management publications produced; and five development policy dialogues and consultation sessions held.
Ms Karen Muthen, CFO, NDA, reported that total revenue was R248 million; administration expenses were R113 million; current assets were R53 million; non-current assets were R63 million; and total liabilities R43 million. Third-party donor funds were included in total liabilities. The NDA had surrendered R10.4 million to National Treasury. There was a turnaround strategy in place.
Co-Chairperson Gungubele commended the Department because the audit outcome received was clean, and fruitless and wasteful expenditure had been dramatically reduced from R79 million in the previous year to R6 million in 2019/20. This showed that huge interventions had been made, but he added that unauthorised expenditure -- even if it was only R1 -- remained unacceptable. The reduction in irregular expenditure at both SASSA and the NDA was unsatisfactory. For instance, the contravention of various procurement processes resulted in unapproved contract extensions, and this needed to be improved on by the Department and its entities. The Department also needed to focus on addressing the root causes identified by the Auditor-General (AG), who had found that it did not respond timely to internal controls and risks areas.
SASSA and the NDA had improved significantly in designing internal controls and addressing their respective risk management issues. However, they had failed in implementing adequate consequences for poor performance and transgressions. There were no adequate action plans implemented or monitored by the NDA. SASSA had improved in filling its vacancies.
The performance language of the Annual Report was positive. For example, in the Department’s presentation on social security policy development, he had noticed that there was huge improvement in the performance language. He urged the Department to continue with the improvements into the new financial year. There were still improvements that needed to be made. For instance, as the oversight Committee, they were able to read and critique the report, which meant that there needed to be a section within the report that highlighted the challenges that Department encountered, and a clear outline of the activities planned and completed. He advised the Department to distinguish between what was considered an ‘activity’, an ‘impact’ and an ‘outcome’ in the goals that they had highlighted for each programme presented on.
The Department needed to create a plan of action for monitoring their different entities. It had a strong management team, but its entities were lacking, even though they received an unqualified audit opinion. Entity oversight needed to be managed by skilled people to establish an institutional relationship between the entities and the Department. This would enable the oversight function of the Department to be institutionalised. The fact that it had not been institutionalised was seen in how the entities were operating. He suggested that the Department work on their entity oversight programme.
He was confused by the Department’s presentation on monitoring and evaluation. It was unclear if the Department was focusing on developing their monitoring and evaluation framework, because in the presentation an explanation was provided for the progress made, but there was also information provided on the evaluation of its infrastructure. He asked for a response on this issue.
On the delay in the Children’s Amendment Bill, he denied that the Committee had any part in delaying the parliamentary process. The Committee had fought in Parliament for the Bill to be passed, and had immediately started working on it when it was passed.
The Committee appreciated the lower non-performance rate. He wanted an explanation for why R7 billion was spent on administration, because at face value it seemed excessive. Also, what was the ratio of the administrative budget to the transfers? He wanted clarity on what an acceptable ratio was, and whether a plan had been made to resolve the cash pay-point problems.
Ms A Motaung (ANC) asked the Department about the impact of the processes taken to measure output in promoting and protecting the rights of persons with disabilities and the framework on disability rights awareness, especially if the national disability rights machinery that was meant to be strengthened was suspended.
She wondered what the lack of available disaggregated jobs creation funding data for analysis meant for the assessment of the impact and financial performance of the NDA’s mandate. She also asked the Agency about the impact and performance management implications on the CSO development programme, and if the target for the number of CSOs capacitated and managed per year was not met.
To the NDA and SASSA, she asked what needed to be done to ensure that they both moved out of the persisting challenge of the AGSA flagging their asset management, liability and cash management processes.
In the DSD’s annual report, she had seen that there was a difference in the performance trends of the medium-term strategic framework (MTSF) in comparison to the previous year’s MTSF. She asked why 2019/20 had had the highest percentage of unachieved targets. What impact did this have on the financial performance of the programme concerned?
Referring to the SASSA Annual Report, she asked for a progress update on the Integrated Community Registration Outreach Programme (ICROP) impact assessment conducted.
Ms L Arries (EFF) commented that the DSD annual reports on the performance trends over the MTSF mentioned that 51% of their targets were not achieved in 2019/2020, which meant that it was a weak performance by the Department, and that could not be blamed on COVID-19 because it happened at the end financial year in March. The morale of the staff was low, which was not a good enough excuse for the weak performances in the Department. It actually reflected on poor management that 51% of the targets were not achieved.
On the DSD performance overview, she asked what the reasons for the provinces not providing targeted reports were. Regarding its social crime prevention and victim empowerment for anti-gangsterism strategy, she asked for the reasons that had excluded the Western Cape province, which had the biggest gangsterism problem, from in participating in the training sessions.
Referring to welfare services, she said that when the 200 social workers appointed for GBV were broken down, there would be an estimated 21 people per province, which was nothing when one looked at the GBV pandemic that the country was currently facing. Only R33 million from the R92 million had been spent, and she felt that more could have been spent.
Regarding the R68 million spent on consultants, she asked what changes they had brought about, and what benefits had accrued to the DSD.
On the SASSA performance overview of targets not achieved, she wanted an indication of how many social grant holders needed to be traced manually. How many disciplinary hearings on fraud and corruption were outstanding? On consequence management, how many of the 1 178 cases were finalised? When would the process be completed, and how many cases were outstanding?
The NDA Annual Report indicated that six targets were achieved from the 12 targets related to the dialogue and consultation sessions. It was noticeable that the biggest chunk of the NDA budget went to their employees, and a very limited amount went to service delivery, which was worrisome. She also commented that the spending on overtime by employees was worrisome.
A report needed to be submitted for the fruitless and wasteful expenditure on damaged cars. This issue was really alarming.
Ms L van der Merwe (IFP) said she stood in solidarity with the Minister, and offered to provide assistance where needed. She had noticed that under the leadership of the Minister, changes had been made within the Department. Although 51% of targets not being achieved was not an ideal position for the Department to be in, she was not satisfied with the explanation provided by the Acting DG because it indicated that no changes had been brought to the people that the DSD was meant to assist. She hopes that there was a clear commitment and plan in place to ensure that it did not repeat the same low performance again.
She said she experience the same confusion as co-Chairperson Gungubele on the issue of entity oversight. The Department had provided an assurance in its quarterly presentations that improvements were being made with entity oversight, but SASSA and NDA had been flagged by the AG for shortcomings that prevented the effective management of fruitless and wasteful expenditure, SCM issues and consequence management. She asked what measures had been taken to improve entity oversight to prevent future shortcomings being reported.
Since the moratorium on recruitment had been lifted, she asked what the reasons were for the vacancies being a continuous problem, and could an intervention be implemented to manage the issue?
The AG’s findings had commented on food parcels and how the Department had made no effort to find new suppliers when they had the time find them. She wanted clarity on this issue.
The preventative measures for fruitless and wasteful expenditure and irregular expenditure were the same as in the previous financial years. The DSD was facing the same challenges. She wanted the DSD to provide a clear plan on what would be done differently with the same measures when they had not worked in the past. SASSA and NDA were requested to provide the same detailed plan. She commented that the Department and its entities had a lacklustre approach to addressing the AG’s recommendations.
On the NPOs’ performance overview report, only “44.3% of all NPO compliance reports were processed within two months.” She was concerned that the report created the impression that there were 231 000 registered NPOs in the country, and only 60 000 or 70 000 of them were compliant, which implied that millions of rands were being allocated on non-compliant NPOs. She asked the Department to provide a remedy for this. It had been offered capacity by the NGO advisor to provide a free verification processes, but it had not accepted the NGO advisor’s offer.
A policy on the voluntary inclusion of social workers in the DGs’ social services forum was not submitted as planned during the year under review. What were the reasons for the delay in this regard? She asked whether the Minister had considered engaging with the Deputy President, as the leader of government business, to ensure that the Committee was informed about the 2018 Cabinet resolution on the absorption of social workers.
In 2019, the Committee had spoken to the Department about its statistics on the amount of people with disabilities employed. There were nine employees with disabilities employed. This was quite a disgrace, because it fell short of the government 6% target. She asked the Department to provide a plan to rectify the issue.
She agreed with Ms Arries’s concerns over using consultants. She asked why consultants were being used when the Department had vacancies, and whether there was ‘value for money’ in hiring consultants.
The AG had commented that SASSA had ignored the Treasury notes on the procurement of personal protective equipment (PPE), and had paid more than allowed. SASSA had argued that Treasury kept changing their notes, but it was not possible that the changes made could have had a substantial difference on what the affordable or allowed prices were for PPE. She asked for clarity on this issue.
SASSA had indicated that they had implemented a fraud management strategy. She asked how much money was actually saved or recovered in the last two financial years and how many officials were either fired or prosecuted because of the new fraud management strategy. SASSA had reported that they currently had financial misconduct cases. The AG had found that there was no evidence of disciplinary action being taken against the officials who faced misconduct cases, and had flagged this as an area of concern and regression for SASSA. She asked SASSA to comment on this issue.
Grant applications were processed within 10 days. She asked if this was applicable to the R350 grant, and whether an appraisal could be given on the progress of dealing with the appeals on applications for the R350 grant. This was important, because the public still had concerns regarding the appeal process.
The NDA vacancy rate was high due to employees being re-prioritised. She asked what the current plans were to reduce the vacancy rate in the Agency.
The AGSA had highlighted again that there were officials who did show up for bookings, which resulted in money being wasted on booked hotels, accommodation, car hire and flights. She was confused as to why the problem was persisting. She asked for clarity on whether there were officials who repeatedly did this, if officials were being held accountable for their actions, and if the wasted money had been reclaimed.
Regarding the Criminal Assets Recovery Account (CARA) funding, she asked who was part of the selection panel to decide which NGOs should receive funding or not. This question had been asked in the previous meeting. It had been established that book clubs and rugby clubs were funded, but not established NGOs such as Rape Crisis and the Saartjie Baartman Centre for Women and Children.
Ms A Abrahams (DA) asked whether the Department would be able to courier copies of the annual reports and send the document or discussion paper that had the details of how the child support grant was linked to government services. This document had been requested on numerous occasions.
The issue about including the Western Cape in the anti-gangsterism strategy had been tirelessly asked by Ms Arries. She asked whether a date had been scheduled in 2021 for the Western Cape to join the programme and be trained on anti-gangsterism.
In the Annual Report there were two NPOs – the National Institute for Crime Prevention and Re-integration of Offenders (NICRO) and Khulisa Social Solutions -- that did great work, but a budget had not been provided for them. They focused on crime prevention and divergent programmes. She asked why the two NGOs were not included in the budget.
From 2018/19 to 2019/20, there had been an R80 million budget cut in the substance abuse budget. There was a link between crime, violence and abuse when it came to people abusing substances because of people doing petty crimes to pay for drugs, and showing violent behaviour while on drugs. Also, there were people with mental problems, and some who abused alcohol, which resulted in GBV. She wanted clarity on why there had been such a drastic budget cut. Looking at the MTEF, the growth between 2018 and 2022 was a negative 42%. Because of this, why had the substance abuse budget been cut to R85 million?
She wanted clarity on how the R92 million returned to Treasury had been allocated. For example, was R33 million allocated for GBV and R59 million allocated for One-stop Centres, or R32 million allocated for GBV and R60 million allocated for One-stop Centres? She also wanted to find out if the 200 social workers were contracted from December 2019 to March 2020, and if they were paid, or paid through their provinces, or if they were not employed and the budget allocated had been returned. The decision made by the Department seemed confusing.
She asked if there was a process report available on the appointment of a permanent DG.
Each of the SASSA disability management unit posts in the nine provinces remained unfilled. She wanted clarity on an action plan being implemented to address this issue. The arrival of COVID-19 had increased the safety and security concerns for cash pay-points and the South African Post Office (SAPO), because potential criminals covered their faces with masks, which had resulted in an increase in robberies. The annual report had not addressed this issue. Had SASSA engaged with SAPS or private security, and was there a security plan being developed to protect the money? If the money was not protected, it would have financial implications for SASSA later.
She asked the NDA to provide reasons why its targets had not been met. The NDA and the Department should respond in writing to a question about outstanding legal fees. The amount of R1.2 million was accruing interest. Where were legal fees highlighted in the annual report, and when would the R1.2 million be paid?
The Chairperson reminded Mr Mchunu that Ms Abrahams’s request for the child support grant document had to be resolved.
Ms T Breedt (FF+) commended SASSA for monitoring the cash point situations at SAPO. She had noticed long queues at Nigel over the weekend, and asked if smaller towns with one pay outlet could be given security attention. The plans for boosting morale were welcomed, but what were the plans to ensure an environment where staff members would perform better. She suggested that SASSA should increase its 8 000 employees to help with its current challenges. It did not seem to have the same systems in place for the R350 grant, the normal SASSA grant, the Housing Development Agency (HDA) grant and the banks. She asked for an update on consolidating the systems for the different grants. She also wanted clarity on whether any money and grant money, specifically the R350 grant, that had been stolen, had been recovered.
She commented that the online system looked awesome. She asked if SASSA had a timeline for when the online system would be fully operational for people to use, to shorten the queues at SASSA offices. She also asked if there was timeframe for the bio-metric systems for SASSA clients to update their details. There were a number of plans but few clear deadlines, and without these the same questions would be asked.
She wanted a response on the Department’s monitoring and evaluation, entity oversight and NGO database plans. In particular, she wondered if the Department had completed its NGO database to monitor where the NGOs were, and how they were operating. This clear-cut process was essential to ensure that NGOs did not run away. She asked what the cost of the ICT systems being implemented was, and what the timeframe for them to be completed was.
Ms N Mvana (ANC) asked what type of support was required for the Department to improve in meeting its targets or interventions.
Ms K Bilankulu (ANC) asked the Department to provide information on the foreseeable implications arising from the delays in sourcing technical support for the sheltering services it offered. She asked for clarity on the status of financial and performance management processes affected by the lack of development of programmes, such as the community-based disability inclusive development programmes.
Comparing the status of internal control of the previous financial year, particularly the section on the financial performance management, the NDA seemed to be struggling. She asked what type of intervention was required to prevent a recurrence of this issue.
What measures were in place at the DSD, through the office of the DG, to address challenges related to entity oversight? What results had been yielded through this process? What were the continued and persistent challenges?
In the NDA’s Annual Report on the performance summary, what was the underlying cause of Programme One not achieving any of its targets? Had the targets been carried over into the new financial year, and what were the implications?
In the SASSA Annual Report, the social assistance programme plan had targeted 30% of the total social relief of distress (SRD) rand value awarded through co-operatives and SMMEs, but only 19% had been paid through co-operatives. She asked whether the allocated R53.7 million committed to be paid in March 2020 had been paid.
Mr Mchunu appreciated that comments and inputs provided by the Committee. He had counted that one Member had asked 20 questions. He pointed out that some of the questions were not in the reporting period -- for example, the R350 grant established in May 2020 -- but due to its importance, the Department would respond to the questions related to it.
Mr Buthelezi replied that part of the challenge with the capacity that had remained in the DSD was when the work was planned before the function was shifted to the President. The national disability machinery programme had been moved to the Presidency. He explained that the evaluation of the social sector infrastructure programme had been developed in the past three to five years by the Department, and had looked at the interventions and the infrastructural value of the facilities that it had. The ECD facilities included some of the centres for substance abuse. This allowed for the conditional grant for the ECD to be provided. Because of the social sector infrastructure problem, the Department wanted to conduct an evaluation study on whether the programme was being implemented effectively -- should it make changes as an intervention measure, or had it made changes to its infrastructure? So, when the evaluation was designed and planned, it was limited in scope to the areas that it had focused on for the individual programmes. The resolution was to increase the scope, and this had affected the initial budget. The Department had requested additional funding. Due to this, the study was not completed during the 2019/2020 financial year. The social sector infrastructure programme had been completed during the second quarter.
The Department had experienced delays with the finalisation of its Annual Reports. The final version was scheduled to be available at the end of October – this had been the directive given by the Deputy President, National Treasury and the DPME. The electronic version presented in the meeting was to be printed, but there were issues with the printing because of the layout, artwork and design. The layout and design of the financial statements had contributed to this delay as well. The delay was currently with the AGSA. Other departments were experiencing the same problem. Within a week of this Committee meeting, the Department would have finalised the hard copies and would share them widely with the Committee Members.
Mr Esterhuizen replied to the concerns about the DSD’s fruitless and wasteful expenditure, and irregular and unauthorised expenditure. Fruitless and wasteful expenditure cases were being investigated. Letters had been issued to recover the money. The Department had reported that it had problems with car hire companies such as Avis. With some of the car hire companies, there were no incidents of deliberate negligence from employees. The control committee was investigating the issue and had meetings to decide whether to resolve or escalate the issue.
When COVID-19 occurred, the Department had already paid all the money to SASSA for the 2019/20 beneficiaries. Because of COVID-19, SASSA had requested the payments for 1 April 2020 to be paid in on 30 March 2020. The Department had moved the R50 billion from its budget allocation. National Treasury had granted approval for an overdraft for the 2019/20 financial year to regularise the R50 billion, which would be regularised for the new financial year. The R50 billion had been recorded as an unauthorised expenditure for the prior financial year.
The R92 million was a net effect of the savings achieved. In late October and November, R93 million had been prioritised for GBV. Part of the R93 million was R30 million reserved for the appointment of the 200 social workers. They were appointed at the national level. At that stage, the Department had estimated savings in its personnel budget, so they were carried within the current estimated personnel budget. National Treasury was again asked to shift R33 million from goods and services to the end of the financial year. This was approved. This had resulted in the R1.8 million over-expenditure. Because the allocation had been made from goods and services, the R60 million was a transfer payment to the one-stop centres. This was done in the last quarter of the financial year. COVID-19 had happened, and the Department did not hear anything from the National Treasury until May, which was in the new financial year. The whole R93 million that went back to the revenue fund was not allowed to be requested back into the new financial year, because all funding was being utilised for COVID-19 expenditure. The social workers were currently in all the provinces. The R33 million was the cost estimate for the 200 social workers for the four-month period from 1 December 2019 to 30 March 2020.
Mr Peter Netshipale, DDG: Community Development, DSD, replied that the NPO Act 71 of 1997 mandated the Department to register NPOs and keep a database of all of them. There were currently 233 000 NPOs registered on the database. Members of the public and MPs could access the database at www.dst.gov.za, and click on the ‘NPO’ emblem. The public could request specific information about an NPO. The database was able to provide necessary information such as the names of the board members of an NPO.
Section 18 of the Act stated that ‘all NPOs must register yearly and send an annual report yearly that includes an audited financial statement to the Department.’ This way, the Department could monitor its existence. The Department launched the ‘Know Your NPO Status’ campaign to help non-complying NPOs. In section 21 of the Act, NPOs not complying must be deregistered and be removed from the system. Since the launch of the campaign in October, a lot of NPOs had responded and the Department had achieved a compliance rate of 73%. However, due to COVID-19, the compliance rate had gone down again. From 1 April 2021, all non-compliant NPOs would be deregistered.
Mr Khumbula Ndaba, DDG: Corporate Support Services, DSD, replied that 1 809 additional social workers had been appointed on 1 June 2020 for a three-month period till the end of August. A few provinces had employed 1 025 social workers. When their contracts expired, the Department had consulted National Treasury to extend their contracts until 30 March 2021. This was the second phase of appointments. In the second phase, 47 additional social workers had been employed. The allocation of social workers was a work in process.
Ms Isabella Sekawana, Chief Director: Early Child Development & Partial Care, DSD, said that the anti-gangsterism had strategy started in 2018/19. The Western Cape had been included in the six provinces prioritised for training. In 2019/20, the Department had monitored the progress of the province, which was why it was not included in the annual report.
A DSD official said that there were challenges with the procurement process for the sheltering services. The process had been slow. However, currently the Department had been able to finalise the process and was on track to complete the infrastructure of the shelters in the 2020/21 financial year.
A NDA official replied that the CARA committee panel was integrated, and the NDA would happily share the list with Ms Van der Merwe. The segregation of the database for the CSOs did not impact on the capacity and empowerment of the CSOs. It was an independent process that required an interface of the module that was missing. This had slowed down the implementation of the process. The NDA had access to the manual presentation of the reporting and data in the system.
Ms Muthen said that the NDA had been able to resolve a significant number of its asset management findings. It had reduced the accrual of assets, the use and life calculation, and reconciled its verification outcomes to the general ledger (GL). There were outstanding signings related to assets having issues with barcodes. This happened because there were decentralised sites. The NDA had since appointed an asset management officer and hoped to see an improvement soon. There were no findings for cash management. Petty cash related issues were addressed in the revised finance policy that was going to be presented on Friday to the NDA board.
Total spending on employees was 51% because the NDA did community-based work that was labour intensive. It appointed development practitioners to assist them. 22% was spent on the mandated costs for capacity building, mobilisation and grant finding, and 25% was spent on administrative governance business support costs. Legal fees did not amount to R1.2 million -- the NDA had outstanding legal claims because of supplier disputes. This was disclosed in the financial statements.
Improvements had been made in the status of controls. The quality of financial statements had been reduced. Recording keeping, reconciliation processes, regular reports and assurance provided by internal functions had improved. The NDA had started to recover travel costs related to ‘no shows.’ The travel policy had been revised and would be presented to the board on Friday.
A NDA official replied that the HR strategy had pre-requirements that needed to be met before implementing the salary key scale. Although the target was not reached within the financial year, it was carried over into the new financial year and the salary key system was in progress. The NDA had designed the target to be reached when the training evaluation was done as well. The ICT integrated system had achieved 90% of its target, and the integration of the final module into the system was almost completed.
Mr Mchunu requested that the remainder of the response be provided in writing.
Ms Memela-Khambula said that Mr Esterhuizen had explained how the R50 billion was used. On the issue of the cash pay points, it was important to highlight that the people who went to the cash pay points were those that did not have access to the national payment system. SAPO went to the different cash pay points, and in doing so, they had reduced the number of people. This had allowed SASSA to establish what infrastructure needed to be provided to communities who did not have access to the national payment system. SASSA could not do this alone. The Reserve Bank had called on SASSA to collaborate in helping communities that did not have access to a banking system.
SASSA paid R175 billion in grants. Administration costs were R7.7 billion, and R1.1 billion was spent on staff. The rest of the budget was spent on SASSA’s other services. The administration costs amounted to 3%, which was below the general organisational benchmark of 4%. This meant that SASSA was not over-paying in administration costs. It recognised that it could still find ways to be efficient and effective in delivering services to people.
The challenges in working with SAPO were being resolved. SASSA was discussing with the Minister ways to help resolve these issues. Normally there were 500 000 clients that collected cash at post offices, and the rest of the clients were paid through the national payment system. SASSA paid the R350 grant through the SAPO, which gave the SAPO administrative work. There were four million clients using its services for the R350 grant. Other clients used the national payment system. In future, a plan was needed to pay for SRD grants, considering the voucher that the Minister had issued. The current voucher system was manual, which could not be used during COVID-19.
SASSA did not have any current irregular expenditure issues, as most were historical.
Mr Chauke said that most of the cases of irregular expenditure were finalised when consequence management was implemented. The case had been submitted to National Treasury (NT) for comments, and it had agreed with the decision made. There were currently 283 cases with the NT. SASSA had finalised consequence management for these cases, and was awaiting feedback from NT. The amount to be approved by the NT was R211 million.
36 cases of fruitless and wasteful expenditure had been finalised since 16 November 2020. There were 143 outstanding cases of damages and losses that amounted to R3 million. There was an online register that monitored how each case was finalised. There was a project plan that had been developed to fast track the cases, except those that were in court. SASSA hoped to finalise 75% of the backlog of cases. Regarding the AG’s comments about the turnaround time of cases, there were 495 cases that had not been finalised.
Mr Mchunu commented that it was important to acknowledge that not enough had been done on entity oversight, although there had been some work done. In the last quarter of the 2019/20 financial year, entity oversight had been shifted to the office of the DG to address issues more quickly. The Department had started the process of acquiring external support. This process was being finalised. External support would assist the Department in improving its entity oversight process in assessing the organisation and its entities. He reminded the Committee that the DG/CEO Interface Forum existed to look at operational accountability matters. The Minister had created a forum where she engaged SASSA’s CEO and the NDA’s board members on a quarterly basis. The Department was also working internally to improve its entity oversight framework. The Department was improving its shareholder compacts with its entities – SASSA, NDA, Central Drug Authority and the South African Council for Social Workers Professions. It was focusing on the areas of performance, risk, audit outcomes and fraud risks, particularly in the case of SASSA.
The Minister had lifted the moratorium, and posts had been filled. Since the last report to the Committee, 35 posts had been through the recruitment process, with some advertised and some in interviews. Because of the implication of SASSA not doing the verifications, the Department had requested internal support to help it.
Co-Chairperson Gungubele said that there were ‘green shoots’ in the Department, but there were still issues that needed to be resolved. He stressed that the DSD’s entities needed to do their part as well. The Committee should not be discussing entities again in future meetings. The reason entities hired CEOs with special skills was because the Committee wanted them to be independently, competently, professionally, effectively and efficiently run. Entities were supposed to outdo the Department in competence.
Ms Van der Merwe asked if the questions not answered would be completed in writing by Friday, as stated by Ms Gillion in her introductory remarks. She clarified that Committee Members had asked the questions out of concern.
The meeting was adjourned.
Gillion, Ms M
Gungubele, Mr M
Abrahams, Ms ALA
Arries, Ms LH
Bara, Mr M R
Bilankulu, Ms NK
Breedt, Ms T
Christians, Ms DC
Lehihi, Ms SB
Maluleke, Ms B
Manganye, Ms J
Masango, Ms B
Motaung, Ms A
Mvana, Ms NQ
Nchabeleng, Mr ME
Ndongeni, Ms N
Stock, Mr D
Zulu, Ms LD
van der Merwe, Ms LL
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