Department of Social Development briefing on 2023/24 Fourth Quarter Performance

Meeting report

Department of Social Development (DSD) Presentation on 2023/24 Fourth Quarter Performance

Mr Thabani Buthelezi, acting Deputy Director-General (DDG): Strategy and Organisational Transformation, DSD, said that the Department had achieved 43 out of 59 performance targets in the fourth quarter of 2023/24, which represented a slight improvement over the third quarter. He gave a high-level overview of the unmet targets (slides 5-10), followed by a more detailed breakdown of what had been achieved per programme (slides 11-41):

Programme 1: Administration

Programme 2: Social Assistance

Programme 3: Social Security Policy and Administration

Programme 4: Welfare Services Policy Development and Implementation Support

Programme 5: Social Policy and Integrated Service Delivery

The presentation included a summary of non-profit organisation (NPO) registrations, received and processed reports, and expenditure per programme and per economic classification. The Department had spent R259.3bn (99%) of its R260.9bn budget.

(see presentation document for further details)

Discussion

The Chairperson was concerned with the lack of monitoring and evaluation of the high level of targets not met by DSD, as well as the Department's core mandate. She observed that DSD’s Electronic Monitoring and Evaluation (M&E) system had been listed as an unmet target. She hoped that the Electronic M&E system was replacing an already existing one. She did not want to hear that there was no M&E system in place at the moment. She said that her line of questioning was informed by her previous reading regarding the amount of money DSD received from Treasury and that the bulk of DSD’s budget went towards subsidies and transfers. She said that she did not believe that the budget was not enough for DSD to do its work, but it could not be ascertained if DSD had any M&E systems in place.

She observed that the Department could not avoid mentioning the work of its entities in the presentation and asked whether the heads of entities could come to meetings such as this to answer questions aimed at individual entities. She raised this point because she was sure some Committee Members would ask questions about the entities.

Mr T Munyai (ANC) agreed that the entities should be represented at meetings as a matter of standard procedure. He drew attention to the fact that from December 2023 to 8 February 2024, there was no core functionality of government. He was excited that all social grant beneficiaries would be paid. DSD had not compromised on the payment of social grants by the South African Social Security Authority (SASSA), meaning that DSD had fulfilled their mandate to these beneficiaries.

He referred to the Chairperson’s comments relating to M&E. He said that it was important for the Committee to know how much money would be given to NPOs, and which NPOs were receiving money. That could only be known through an audit analysis. The audit could be done using DSD’s system, which was presented to the Committee. He said that he was very excited that DSD was making use of information management technology systems, alongside the key areas that were clarified in Programme 2. He asked about DSD’s turnaround strategy for reducing the registration period for NPOs from three months, as it showed commitment to improving its performance.

He said that the Department had given him a clear picture of the transitional period with respect to the fourth quarter performance. DSD’s presentation was clear and concise for him as a new member. The presentation covered all the issues relating to social crime prevention, substance abuse, capacity building, and DSD's overall capacity. The Department had done its work and he understood all aspects of the presentation. The picture of the different entities was the only aspect he still had questions about.

He was excited about the Department’s plans to deal with the issues of social crime prevention, and substance abuse, as well as the issues of community policing and community mobilisation. The Department’s National Community Development Policy was one of the key developments that he was most happy about, as communities were a large stakeholder in the Department’s work, and the Department could not carry out its work without support from communities.

He proposed that the Committee and DSD should have another meeting in consideration of the Portfolio Committee as it would be moving to another quarter and addressing specific issues. He stated that if DSD was to improve the delivery of the SASSA grants, it needed to have a system in place. DSD would not be able to deliver on its mandate without technology systems. He was excited about DSD’s clear and focused intervention concerning persons with disabilities and the Office of the Rights of the Child in the context of the multilateral and international conventions that were in place.

He was excited about DSD's overall performance, which did not compromise on delivering social grants to its beneficiaries, as that was one of the issues he was concerned about. He was worried, however, about the amount of money that was returned to National Treasury, as he viewed it as a crime when institutions returned money to Treasury. Citizens were still “swimming in the valley of despair of poverty, unemployment, underdevelopment and hunger” while there was still money available in DSD’s budget. He was not complaining about the austerity measures in place, nor was he telling DSD to do a fiscal dump or engage in malicious compliance, but it should spend its money against the budget plan in place. In the future, if the Committee does not see any improvement in DSD's spending, it would be forced to request a supply chain management plan. He emphasised that the Committee would not tolerate DSD returning funds to the National Treasury while citizens urgently needed its services.

Mr K Ramalia (ANC) said that he shared the sentiments of Mr Munyai and that DSD must sustain their good work. He appreciated the increase in NPO registrations with the DSD. He asked for clarity on DSD’s M&E system as, in the past, there were NPOs that abused funds. He sought clarity on the financial figures that were involved with the overall performance outcomes and how they would impact social grant beneficiaries. He asked why DSD had reported underspending as savings as it was related to critical areas. He referred to an amount of R591.6m for the Social Relief of Distress (SRD) grant, as well as the R781m for the Child Support Grant (CSG). It was understandable from a financial viewpoint, but he sought clarity from an administrative perspective. Why was so much money reported as a saving? The country had citizens who were dying and everyone was well aware of the county’s increasing poverty levels. This meant more South Africans should benefit from the money that DSD saved.

Ms P Marais (EFF) was disappointed about DSD’s unmet targets, especially about the treatment of drug abuse disorders. Drug use led to mental disabilities and this would become a bigger issue for SASSA in the future. DSD’s presentation did not mention any prevention strategies to stop this rising issue. There were sections that described prevention programmes that were currently in place, but everything was just on paper. She referred to her visit to Botshabelo Rehabilitation Treatment Centre which was a state-of-the-art rehabilitation centre. She said the centre had workshop facilities, hairdressing facilities, catering facilities, a gym and individual counselling. It had everything, except for residents in the past three months, which was the worst part of her visit. Additionally, the stated reason that the Centre was closed was that it had an issue with electricity, but there had been electricity during her visit. She said more than forty security guards were present, but no residents to secure. When she talked with the Centre's manager, the manager told her that the staff was currently working in Bloemfontein. She said that problems arose when DSD came to Parliament, everything was put on paper, but meanwhile there was no work done on the ground.

She shared Mr Ramaila’s concern about declaring unspent funds as savings. She said that she had sent the names of individuals who had been struggling for months to access their social security grants because SASSA was depositing the funds into incorrect accounts to SASSA. She said it was. She questioned how there was R1.7bn in savings as she had a problem with that amount. She referred to the White Paper on the Comprehensive Social Grant, which stated that it was removing the R350 social assistance grant and developing an unemployment grant for 18 to 59-year-olds. She questioned the feasibility of this programme given that DSD was already struggling to administer the R350 SDR grant. The 2022/23 underspending of R6.133bn was unacceptable when people were dying of hunger in the country. She drew attention to an apparent discrepancy of R2.26bn in the Department’s calculations. She acknowledged that DSD was meeting some of its targets, but it must remember that it was one of the departments that assisted the poorest of the poor, some of whom would not receive assistance because of the Department’s under-expenditure.

The Chairperson asked Ms Marais to provide her with the page number of the slides in the presentation where the figures she had referred to were discussed.

Ms Marais said that the figures were on page 17. She reported on her previous visit to the SASSA offices when she was informed that an employee suspended in September 2019 was still being compensated by the Department, even though he had been to jail. She said that the employee had been found guilty in court but because of the delay in disciplinary action taken against this employee and three other employees, they were still being paid. The employee's disciplinary hearing started in 2019, but it has not yet been concluded until now. She added that ten individuals had been dismissed from September to December 2023 but reinstated in August 2024 because the disciplinary process was not completed within the appropriate timeframe. These individuals were now back at work because DSD failed to introduce disciplinary procedures that employees should go through. Why did the Department still compensate employees charged with wrongdoings and misdeeds? She had a problem with DSD's response to such employees.

She then referred to the goods and services aspect of DSD’s presentation. DSD stated that it had spent 97% of that budget, but at the same time, it was complaining about not having enough money to buy what was needed. DSD showed no sense of urgency in how they were investing in assisting social assistance beneficiaries. All departments came with fancy presentations but when Committee Members did oversight on the ground, they saw quite the opposite. For instance, one could see the DSD’s integration of the new online registration system and its pilot projects in the presentation, but on the ground, people were still standing in long queues in the hot sun outside SASSA offices to register for their grants. When was DSD going to attend to this issue?

She said that persons living with disabilities were also struggling. In Bloemfontein, for example, only two schools accommodated the needs of disabled children. There was a disabled child who was walking on her knees as she had no wheelchair. Additionally, the child could not attend school because she did not qualify to enrol in the school, according to the child’s mother, so the child stayed at home with both parents. She said she had arranged for the child to receive the CSG, as she only received a disability grant from DSD. How many disabled children were at home and could not attend school as there were no schools in the community for them to enrol in? How was the Department going to fix this issue? DSD needed to have these individuals present to tell them what exactly they required and what was happening in their communities. This was because some people were confined to their homes, while others were on street corners to beg for money. She said that the Old Age Grant was not enough and some people living with disabilities also resorted to begging to supplement their grants.

Ms M Makgato (ANC) said that she was happy that the presentation had included evidence, as presentations did not matter when there was no evidence brought forward to substantiate claims made. She referred to page 19 in the presentation, which discussed the social security policy and administration, and she highlighted three issues from the presentation. She asked DSD for clarity on these issues, she additionally asked DSD to explain more about social security and administration programmes. She proposed that unspent money be issued to the youth rather than be returned to Treasury.

Ms N Tafeni (EFF) asked DSD if they had an anti-gang programme in Cape Town. She noted that grandparents who chose to be foster parents for their relatives were struggling financially as their old age grant was not enough to support them and their foster children. She said that DSD did not offer any financial assistance to these grandparents. She said that children living with disabilities were not receiving proper assistance from DSD as some of them were confined to their houses because there were not enough schools that catered to their needs. She said that the food and nutrition security plan did not seem to have a noticeable impact on communities. DSD should ask local officials to obtain information about persons living with disabilities, as some of these people did not receive their grants. Some were living in homes with conditions that could not accommodate their basic needs as persons with disabilities. She asked DSD to go to these communities and see the conditions for themselves.

She asked DSD about poverty alleviation, as there were now more individuals living in poverty as well as the rising unemployment levels which resulted in more people needing assistance from DSD. The EFF was collecting information and complaints from citizens through social media, and it received calls daily. It was evident that people were suffering all over the country, every day.

She took issue with DSD not having their own offices and instead renting offices from landlords, especially in the Eastern Cape, where landlords were being harassed by unscrupulous people who extorted protection fees from them. This could result in DSD offices being closed. A landlord in Basho, for instance, was leasing his building to DSD and was suffering from this kind of extortion. She proposed that DSD buy their own their own offices, as they spent a large amount of money on rent.

Ms A Abrahams (DA) would have appreciated if the Chief Executive Officer (CEO) of SASSA had been present at the meeting as her question was addressed to them. She hoped that DSD would be able to answer her question. She wanted to know why there had been a slow take-up of the CSG as well as the R350 top-up grant in the previous quarter. She also noted that it was difficult to know what was going on with these two grants as they were not separate line items. Her second question was about the Inspectorate for Social Assistance. There had been challenges for several years. What were the challenges that DSD was facing and was there anything the Committee could do to assist? Was the SRD grant a rolling budgetary item, and at what stage would National Treasury interfere and decide to cut the grant off, if more serious issues arose?

She asked about the compensation of employees. The presentation indicated that DSD was implementing a new strategy during the 4th quarter. This was a topical issue across all departments as they had suffered from budget cuts and essential services were impacted. She wanted to know how far DSD was with implementing this strategy in their budget.

Mr T Mjadu (MK) said he was interested in hearing about some of the challenges that DSD faced. The Committee wanted to assist them, but that could only happen once DSD told them of their challenges. He said South African citizens complained about receiving grants, especially the elderly. He noted that the date of issue for old age grants had changed from the first to the fifth of the month. He said that it was the reason why the elderly tend to say things were better under Zuma’s government. He said that the elderly usually hired a taxi to town when going to collect their grants, which they were not happy about. He said most elderly people borrowed money from loan sharks to pay for these taxis. He said the Department should open collection points in rural areas to assist the elderly. He asked DSD about the irregular payment of the R350 grant. Some people would receive the grant one month and then not receive another payment until three months or so later.

He asked the Department why all members of the executive were working in an ‘acting’ capacity, and why it had so many casual staff members. He asked DSD why it was sending money back to the National Treasury. This was a clear sign that DSD did not know what to do with the money or did not need it. He said that he had recently done oversight in Durban at the eThekwini Hospital for disabled persons. He said that he wanted to know what DSD was doing for persons living with disabilities, as his site visit had left him emotional because of the living conditions he had witnessed. People did not have proper food and they were living off spoilt food from a nearby Shoprite and other places that they were able to source food from. In this context, it made no sense that DSD was returning money to Treasury. Even though DSD's presentation was good, it was only on paper as there were people on the ground who were not receiving any assistance from DSD.

Ms Marais proposed that DSD collaborate with the Department of Health and the Department of Home Affairs to help mothers register their newborns for the CSG. This could happen at a local community hall where Post Bank and SASSA as well as other stakeholders, come together. It would ease the stress placed on mothers and infants travelling with newborns to various offices.

The Chairperson said that she hoped that DSD would be able to provide the Committee with appropriate responses, but added that if the Department was unable to provide answers, it could provide them in writing.

Responses

Mr Fhumulani Peter Netshipale, acting Director-General (DG), DSD, invited members of the DSD executive to respond to questions. He was aware that there were some questions that only DSD entities like SASSA could answer and that in the past SASSA would attend such meetings along with the Department because such a large component of its budget went to SASSA.

Ms Brenda Sibeko, DDG: Comprehensive Social Security (CSS), DSD, said that when the Department requested funding from National Treasury it worked on the basis of estimations of how many people would qualify for grants. It looked at various factors, such as the appropriation date, the fertility rate, the expected growth in birth rate, the economic performance of the country, and the number of persons living with disabilities in the country. The projections that DSD made could never be 100% accurate. This sometimes led to a mismatch between the amount requested from Treasury and the amount spent. The R1.3bn in under-expenditure in the current financial year looked like a big figure but it was not really that big. The reason for under-expenditure was that the Department always overestimated the money required from Treasury.

She said that another issue was that people did not always register for grants on time. The DSD was concerned about the poor access to grants for children under two years old. Research suggested that this was a critical time for intervention. Cultural factors played a role in the lack of registration, as in some African cultures, a child was not allowed to leave the house before they had turned three months old. This affected SASSA's reach in communities. DSD was doing work to increase the take-up of the CSG.

She explained that the Inspectorate for Social Assistance had been legislated in 2020, but before this, SASSA had been doing work behind the scenes. SASSA’s large budget put it at risk of fraud and cyber-crime. Although SASSA had a fraud management unit, the Department wanted to gradually take over this function. This would be done through the Inspectorate, to mitigate issues of corruption, misuse of funds and fraud. The Department wanted to make the Inspectorate an independent entity and was aiming to gradually redirect SASSA’s R75m budget for the fraud management unit to the Inspectorate.

She said that DSD’s current budget was too small, especially since the government had implemented an adjustment of the cost of living of all staff two years ago. DSD did not receive a budget for this and had had to absorb the cost, which meant that DSD had had no budget to appoint new staff. She said that the interdepartmental budget was not enough to hire new people because of the cost of living adjustment.

She said it was difficult to imagine how DSD could provide basic income support when it struggled to implement the R370 SRD grant. A significant challenge was that it was a short-term intervention, and Treasury could only allocate a budget for one year. It would be unwise for DSD to invest in long-term mechanisms to carry out something that was termed a short-term intervention. She said the state's decision to extend this grant came at a time when DSD had already been allocated a budget for the financial year by Treasury. Regulations needed to be in place for the grant to be extended and that took a minimum of three months. The Minister of Finance had to agree to the regulations put forth by DSD, and this became a huge challenge for DSD in stabilising the condition of the grant. Another challenge was that DSD needed to ensure that all their payouts reached the intended beneficiaries, because there were occasions were there was a mismatch between beneficiaries’ identity documents and their bank account numbers. Another cause of irregular payments was that only people who earned R624 per month or less qualified for the grant, and SASSA needed to do income investigations, which then led to the non-payment of grants.

She said that DSD did allocate funds to assist grandparents and relatives who acted as foster parents. This was because the Department was trying to prevent the separation of families. The issue was that there was slow uptake as the programme was still new. DSD was doing its best to promote and publicise the programme.

Ms Siza Magangoe, acting DDG: Welfare Services, DSD, said that the anti-substance abuse policy that DSD had come up with was the first of its kind. It would address all the challenges of substance abuse. DSD had consulted and co-signed with multiple departments and the public on the policy. The biggest aspect of the policy was that it focused on legal rather than illegal drugs. Alcohol was the biggest substance abuse problem facing the country. It had taken DSD more than ninety days of consultations and input from various sectors and the public had been received, as it was an integrated policy. The policy had been approved by Cabinet in September and was returned to DSD for consultation with different clusters within the Department. It could not be taken to Parliament as it was too late, and DSD had had to wait for the seventh administration to start.

She said that DSD was not aware of the problems that Ms Marais had described at the Botshabelo Rehabilitation Treatment Centre. She would investigate and return with an appropriate response. She said that the country's anti-gang strategy was not led by DSD but by the South African Police Services (SAPS), and the State Security Agency (SSA). DSD was only asked to investigate issues and provide recommendations. When it came to gangsterism, DSD was focusing on Child and Youth Care Centres (CYCCs). There were currently 29 CYCCs in the country and five in the Western Cape. All CYCC workers were well-trained in gangsterism prevention. The Department of Basic Education (DBE) had also requested assistance from DSD in violence-ridden schools, but this was only done at the school’s discretion.

Ms Lumka Olifant, acting DDG: Corporate Services, DSD, said that the Department understood the need to appoint full-time executives. She was happy to report that the advertisement for a new Chief Financial Officer (CFO) was made public and would close on 6 September 2024. The DDG for welfare services vacancy had also been advertised. The Department was well on its way to creating a well-functioning structure within the new administration. She reported that by the end of September, the Department would have rolled out its electronic NPO system. This system would provide DSD with comprehensive information about registered NPOs. This information could even be cross-referenced with information in the Department of Home Affairs database and others. She noted that she was new to the executive and it was important to appreciate the systems that were already in place and what they could do. Most of the Department’s systems were working efficiently. The procedure applied when a minor was placed under arrest was one example. She invited Committee Members to get a first-hand experience of how the system worked.

Mr Fanie Esterhuizen, CFO, DSD, said DSD was the biggest service department in the country, and one of its biggest challenges was that it was allocated a budget on an annual basis by the National Treasury, which imposed a high level of control on the Department. He referred to slide 47, in which expenditure by economic classification was discussed. He said that DSD had no flexibility regarding the budget for compensation of employees allocated by Treasury. It had some level of control when it came to goods and services. Transfers and subsidies for social grants needed to be approved by Parliament and it decided what was done with the money if there was a saving. It was Parliament that approved DSD's budget at the beginning of the year. There is not much that DSD can do when encountering issues as it was a struggle to move money around.

He confirmed that, regarding under-expenditure, DSD worked on the basis of estimations and at times, their estimations might be off. He said that the R7.7bn transfer to agencies went straight to the agencies such as SASSA, which had autonomy on how they used the money. They could either spend it all to not spend the full portion received. When there were under-expenditure on NPOs, money could also be shifted elsewhere. He said that DSD was being micromanaged by Treasury and they worked on an allotted budget and that was why their savings were at times re-purposed by the government.

He said that SASSA itself would have to account for the suspended employees who were still being paid, and the issue of re-employed staff that Ms Marais had raised. He said R15-20m was earmarked for the Inspectorate's operational budget and the Department was in consultation with the Treasury on this. He said that DSD had no casual staff members, although he could not speak for the provinces, as the national Department was not divided into regions. Provincial departments of social development accounted to provincial treasuries. He explained that SASSA’s R62bn was only for grants, and the R7.5bn was used for administration. DSD transferred the full allocation to SASSA and did a reconciliation at the end of the financial year.

Mr Netshipale said that DSD registered NPOs at a centralised national level, but it had had delays due to some NPOs not submitting all the relevant documents in time. According to legislation, the registration process should not take more than two months and that was the mandate that DSD adhered to. He believed the new electronic system would provide more information, and be faster. DSD had developed a policy to provide provinces with guidance on how to fund NPOs. However, in some cases, provinces delay transfers in violation of national policy guidance.

He said that, regarding nutrition and food security, DSD provided grants to qualifying individuals below the age of 18 and above the age of 60. DSD also provided food security to people between the ages of 18 and 59 but also tried to develop them so that they could have upward mobility. This was a challenge. For example, 30,000 people in Gauteng and the Eastern Cape had been capacitated by DSD as small farmers. However, they faced challenges selling their produce for profit.

He said that DSD's main challenge was dealing with the repercussions of budget cuts, as they impacted who it could afford to employ. In some places, this meant that vacancies appeared that could not be refilled. The implementation of concurrent functions such as anti-gangsterism initiatives was another challenge as it was up to provinces to implement them. 

He confirmed that DSD worked on estimates and projections such as fertility rate estimates, which at times were not 100% accurate. DSD should make it a point to investigate this matter. He said that DSD was working to stabilise the Department within all areas together with the Portfolio Committee. He was eager to conduct a study on whether the Department was getting value from the money given to NPOs.

Conclusion

The Chairperson thanked the Department for its responses. She was pleased that it had taken on board the Committee’s suggestion that SASSA management should be present at future meetings with the Department.

The meeting was adjourned.