National Development Agency Annual Report & SA Social Security Agency Half-Year Progress Report

Social Development

07 November 2006
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Meeting Summary

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Meeting report

061108pcsocdev(abdullah)

SOCIAL DEVELOPMENT PORTFOLIO COMMITTEE
8 November 2006
NATIONAL DEVELOPMENT AGENCY 2005/6 ANNUAL REPORT & SA SOCIAL SECURITY AGENCY HALF-YEAR PROGRESS REPORT

Chairperson:
Ms T S Tshivhase (ANC)

Documents handed out:
National Development Agency (NDA). Presentation to the Portfolio Committee
National Development Agency (NDA). Annual Report, 2005/6.
National Development Agency (NDA). Profile
National Development Agency (NDA). Strategy
South African Social Security Agency (SASSA). Half-Year Progress Report: Presentation

SUMMARY
The Committee met with the National Development Agency, the South African Social Security Agency, and the Department of Social Development to receive presentations on the former’s 2005/6 Annual Report and the latter’s Half Year Progress Report. Questions raised included the National Development Agency’s efficiency in supporting social development projects, late detection of fraud, how performance bonuses had been awarded without performance contracts, whether legislation relevant to the Agency’s establishment was satisfactory, and why the Agency had not prioritised disability issues. Members were broadly supportive and appreciative of the South African Social Security Agency’s achievements and efforts in its first six months of existence, but expressed concern over security at payment points in rural areas.

MINUTES
National Development Agency (NDA) Presentation
Mr Godfrey Mokate (Chief Executive Officer) emphasised that the NDA’s main focus was the eradication of poverty. According to the Human Sciences Research Council (HSRC) since 1996 there had been little change in the proportion of the population living in poverty – approximately 57% of the population (26 million individuals) in 2001. KwaZulu-Natal had the highest share of the poverty gap (22.5%) and the Eastern Cape the second (18.2%). The NDA faced this problem in common with other government agencies.  This was just the overview of the NDA as an organisation, which had offices in all the nine provinces. Each province was divided geographically.

The focus of the Minister and also the Chairperson of the Board had been that the NDA should have a strategic importance in the context of the country with the aim to halve poverty by 2014 in terms of the Millennium Development Goals. The NDA had also focussed on organisational transformation, building its institutional capacity to deliver on its mandate. Performance reporting was very important for the organisation in terms of its relationship to the public, to the political authority, and to the people that it served.

With regard to the historical legacy, there had been an established negative perception of the NDA, on the part of the political authority, and among the stakeholders, the public, the people served, and among Members of Parliament, the Political Authority and the public and the people that the NDA served. Ministerial intervention in October 2003 and forensic investigation had led to the suspension of the previous Chief Executive Officer. None of the previous Chief Executive Officers (CEOs) had served their full term of office. A new board was appointed on 5 December 2004. When the current CEO, Mr Mokate, was appointed on 1 June 2005, an analysis revealed a previous lack of common strategic direction and leadership, lack of management systems and performance culture, a backlog of unresolved labour relations cases including those of the previous CEO, weak and inadequate systems of monitoring and evaluating contracts and project management, problems in procurement systems and delegation of authority, a huge backlog in payments to funded projects, lack of an updated database of Non-Governmental Organisations (NGOs) and Community-Based Organisations (CBOs) as prescribed in the NDA Act (Act No. 108 of 1998, as amended), weak reporting and document management systems, low levels of appropriate skills and competencies throughout the organisation to achieve its goals, weak administrative systems, non-alignment between organisational structure, people and strategy, weak corporate governance systems and capacity, no clear programme of capacity building for CBOs and NGOs as mandated by the NDA Act, and no updated strategically aligned approved organisational structure. It was important for Parliament to be aware of these issues in discussion of the NDA Act.

Given all these problems, it had been decided to focus on the transformation of the organisation and developing a new, widely canvassed five year strategic plan to give proper direction with an emphasised theme of unlocking potential. The NDA has performed successfully in the year under review as measured against agreed performance targets whilst operating under the difficult circumstances of transformation. One of the NDA’s biggest problems had been lack of strategic direction. There had been a strategy that had been signed by the Minister, but the context of that strategy was that it was just for administrative purposes, but there had never been an overall strategy based on the needs of the stakeholders and public served. It took a lot of time and resources to develop the new strategy. A business process review was important in order to focus on the internal processes: an organisational readiness assessment was a major feature of this review. In order to give the NDA a better sense of direction, from the onset, the NDA asked itself how its performance would be assessed.   Moreover, communications with stakeholders, with the state, with the provinces and with parliamentarians were reviewed.

At the beginning of the financial year, NDA had 84 unpaid project payments totalling about R28 million. NDA focussed on eliminating that backlog because it was vital to restore the confidence of the stakeholders in the organisation. This was also setting the pace for other organisations in the future. In improving corporate governance compliance, the NDA had achieved much in that regard in establishing competencies in internal organisation.  Included in this was the establishment of a very strong internal audit committee. An aligned and integrated human resources strategy was developed. A capacity-building plan had been implemented. Much of the NDA’s work was in serving poor communities, which was a high-risk business, so there was focus on that. Information Technology (IT) was very important in the NDA’s business: the disbursement of funds was IT based. In going forward, the NDA wanted to use technology as a mechanism to reach the individual members of the community served. If NDA were to rely only on the offices that it had in the provinces, it would not have the resources to serve the public without employing more staff, thus IT had become very important. In establishing a framework of governance and processes, NDA had approved 104 projects valued at R68.7 million, to benefit more than 70 000 people directly and 278 000 people indirectly. NDA had disbursed approximately R62 million of grant money for projects.  Significantly, the NDA had achieved over 85% of its targets in terms of the CEO’s performance agreement with the Board. When measured against the original strategy, over 60% of targets had been achieved.

Ms N Antonis, Human Resources (HR) Executive, added that the main reasons why the NDA had not achieved all its targets included insufficient capacity in terms of human resources. When discussing the new strategy, it was realised that its human resources were vital to the NDA’s future. To give an understanding of the progress achieved, it was necessary to examine some of the challenges. In July 2003 the NDA had not had a defined human resources strategy. This meant that things had happened on an ad hoc basis. There had been no clear understanding of the organisation’s direction. There had been inadequate human resources information systems and processes. The NDA at the time and until fairly recently had a qualified audit opinion on poor personnel and payroll administration.  The NDA had never complied with requirements for employment equity, and had not even paid occupational health insurance for its staff. No performance standards were set or applied to employees. Whether they performed well or not made no difference to their remuneration.

Staff structure had been poorly aligned and very few positions had appropriately designed and documented job descriptions. No training and staff development plan had existed. A large number of Commission for Conciliation, Mediation and Arbitration (CCMA) cases were pending. The provident fund had lost an unacceptable percentage of its value.  The strategy that the NDA has adopted has been to build its human capacity. The current situation was that all issues listed above had been addressed with the audit opinion having been successfully removed over the period under review with only a few housekeeping matters being mentioned. Definite progress had been achieved, in particular with regard to the matters that had occasioned adverse audit opinion. The NDA’s organisation and structure had been successfully redesigned. An inventory had been taken of human resource capital, and competency assessments had been performed throughout the organisation. People at the end of the service chain were never going to receive quality service unless performance was driven. Hence a performance management system had been implemented with appropriate standards and criteria, with performance measured against those standards. Now every employee’s performance, from the lowest to that of the CEO, had been directly linked to the strategy. 

Mr Mokate introduced the abstract of financial performance and the report of the Auditor-General.

Mr M Mofokeng, Chief Financial Officer, dealt with financial performance in greater detail and the report of the Auditor-General. The context of the Auditor-General’s adverse findings was fraud, which NDA had detected and taken measures to correct, including dismissal of a junior accounts clerk, who was currently in jail pending a bail application. Forensic auditors had been appointed in 2003 and had produced an interim report.  

Mr Mokate referred to the question addressed in Parliament to the Minister on whether the NDA had paid bonuses to staff, and, given the NDA’s negative press, on what basis had bonuses been paid. The Minister had replied, on the basis of information provided by the NDA, that bonuses had been paid.

A key strategy had been to conduct an internal audit of all the units of the organisation. It was in the normal yearly audit of the organisation that the NDA discovered the anomalies that had led to the NDA’s contacting the Auditor-General to conduct a forensic audit. As a result, it had been discovered that the NDA had been defrauded to the extent of R8.8 million since November 2004. Mr Mokate had received the final report, which confirmed that there had been theft and fraud, on Monday, 6 November 2006.  The report had still to be considered by the Board and by the Minister. NDA had taken action based on the initial information received; the suspect was dismissed and has been charged with fraud and theft. On Friday, 3 November 2006 she was denied bail. NDA was working to recover the money stolen and to implement any other conclusions of the forensic audit report as soon as the Minister and Chairperson of the Board proceeded with implementation.  
 
For the future it was expected that the current strategy would prevent a recurrence. NDA would focus on proper oversight.  Parliament or any interested party would be able to call for an evaluation of NDA’s progress towards achieving its new strategic goals. These goals were clustered under organisational transformation, partnering for development, resource mobilisation for poverty eradication, community empowerment for sustainable development, and communication of credible and relevant researched development information. Furthermore, the NDA had set itself macro indicators. These addressed the high level, externally focused objectives that would be achieved through implementation of the NDA’s strategic goals as defined in the Organisation Scorecard. The macro indicators and associated strategic goals were improved coordination of resource allocation for poverty eradication, partnering for development, resource mobilisation for poverty eradication, improved economic opportunities and social empowerment for communities in NDA targeted localities, community empowerment for sustainable development, improved capacity of targeted Civil Society Organisations (CSOs) in relation to service delivery, increased influence in development policy as it related to poverty eradication, and communication of credible and relevant researched development information. This formed a contract between the state, the government and the NDA.

Discussion

Mr M Waters (DA) asked for clarification about the documents given to the Committee.

Mr Mokate said that the contents of the presentation, and the hard copy version that the Members had been given, was based on the Annual Report.

The Chairperson said that there were people in the meeting who could not read from the screen, and that it was therefore necessary for speakers to read out what was displayed.

Advocate T M Masutha (ANC) requested that a copy of the exact text exhibited on the screen should always be provided to Members to facilitate their deliberations. Not providing such documentation confused Members and thereby frustrated them in the task of oversight with which they had been entrusted. He considered it “a constitutional issue”.

Mr Mokate explained that the item on bonuses had not been included in the hardcopy version of the presentation to avoid making it too long, but he took note of Advocate Masutha’s request. He referred Members to the Annual Report itself.

Ms H Weber (DA) asked on what basis performance bonuses had been paid in 2003, which had not been a very productive year.  She asked further, given that the NDA was very important in job creation and giving people a sense of “self-worth”, if there were any kind of audit as to the NDA’s most successful projects and their outcome, in particular in rural areas with a view to prevent fraud at the point of delivery. It was fortunate that the culprit in the fraud case had been put in jail, but the fraud should have been detected earlier.

Mr Waters asked for a specific date when the Board, the Minister and Parliament would see the forensic audit report. He asked further how the NDA had awarded bonuses without performance contracts, and who had made the decisions, and why the 2004/5 financial year had apparently been omitted from the presentation.  The NDA said that its income for that year had been R172 million.  The NDA had spent R55 million on direct funding of projects, and R3 million on project support. Staff costs had been R33 million, and administration costs had been R31 million. It puzzled Mr Waters that it had cost R64 million to staff and administer projects on which R55 million had been spent in direct funding and seemed to him “a very inefficient way of spending money.” The NDA’s running costs were more than was spent to help poor communities. Furthermore, the NDA’s net surplus had increased from R14 million in 2005 to R48 million in 2006. This represented money that the NDA had been unable to spend, in spite of the huge challenges that South Africa faced. It surprised him that the NDA had not been able to find enough projects to support by utilising these unspent funds. He asked whether there might be better ways of funding such projects and that maybe the NDA “should be scrapped”. Perhaps the Department of Social Development (DSD) itself should administer such projects rather than have a separate bureaucracy and an organisation that was under perpetual restructuring despite its having been established only in the year 2000.

Ms H I Bogopane-Zulu (ANC) appreciated the balance scorecard and empowering the Committee thereby. But, as Mr Waters implied, restructuring could not be continued forever and it was necessary to give the Committee a commitment to dates as to when the process would be completed. Also she asked for comment from the NDA on whether the NDA Act was assisting the NDA in its activities and whether the legislation was satisfactory. “Something was definitely wrong.” The CEO’s emphasis on IT, which entailed “data integrity”, was commendable in facilitating project management. The NDA needed to develop measures to test the validity of data provided by field workers. With reference to the budget, capacity building needed to be addressed in order to relieve poverty. “Elite” projects tended to be given priority, but other worthy projects needed to be given attention by the NDA. More needed to be said about the fraud prevention strategy. The needs of members of the community with disabilities needed to be urgently addressed by the NDA. This included the need for documents in Braille, in large print, or the use of sign language interpreters. Disability and poverty “were married”. No more excuses could be accepted for not addressing this issue. Employment of disabled people should be increased, not least within the NDA itself.

Ms X C Makasi (ANC) asked about the mechanism for awarding bonuses and who specifically benefited from the work of the NDA.

Mr B M Solo (ANC) said it was unfortunate that the NDA had undergone a turbulent period without stable leadership. He wanted to hear more about NDA’s compliance with legislation. He wished to emphasise the matter of capacity building. The NDA’s clients were among “the poorest of the poor”, and had been especially deprived of education beyond the third standard of education.

Ms Bogopane-Zulu further asked the NDA to simplify its application form which was too complicated – “like writing an exam”, if it was serious in its efforts to alleviate poverty. Moreover, its guidelines should be available in languages other than English. Poor people were the most seriously affected by illiteracy and related problems.

Mr Waters asked further about the Auditor-General’s Report on controls over poverty eradication and projects, project write-backs, and write-back of trade creditors. He asked specifically what had happened with regard to those points since the Report had been published.

Ms Bogopane-Zulu asked how the NDA was going to measure and monitor projects before allocating funds.

Mr Mokate responded that he had counted a total of twenty questions. He would first respond to those questions which related to the subject of whether it was necessary to retain the NDA or not, the challenges envisaged with regard to the NDA legislation, and also the forensic audit report. Also he would respond to the question on bonuses and the involvement of the Board in deciding to whom bonuses should be payable. Ms Antonis would respond to questions relating to disability. The questions relating directly to projects, such as sustainability, would be answered by Mr R Mogano, Projects Director.  The questions related to risk would be answered by Ms H Mansour, the Director for Internal Audit. The questions related to finance and to capacity would be answered by Mr Mofokeng. 

Mr Mokate did not want his answer to the question as to whether the NDA was “a basket-case”, as inferred, to be taken as a determination; it should rather be taken as an opinion. It was his “own considered opinion, from his own professional background”, in the light of his study of both developed and developing countries and the institutional mechanisms that existed between state and society in various countries, that South Africa was “a trendsetter” in establishing an agency such as the NDA. It was his view that the NDA was “a good organisation”. Other countries were asking for advice on establishing comparable bodies, even the United Kingdom.  South Africa had the greatest inequalities in the world. Thus an institutional mechanism was needed. Co-ordination between departments and agencies was essential, and NDA had a key role in providing such co-ordination at the point of service delivery. The NDA “operated at the ground level”. On this basis Mr Mokate advocated the continued existence of the NDA. There was an inherent tension and challenges with regard to the composition of the Board of the NDA that needed to be addressed in relation to the NDA Act, but, with the permission of the Chairperson, he preferred to address that matter separately on another occasion. 

The operational costs were indeed high, but he envisaged a reduction of those costs in the future. Much work had been performed in reducing internal costs. The NDA’s new business plan, using IT and developing skills, would lead to reduced operational costs.

Ms Antonis said that Mr Waters’ assumption that NDA had been continually restructuring was incorrect. The February 2006 new structure was based on a review of organisational strategy. Restructuring was now complete, with a staff complement of 87 and vacancies in 11 strategic positions, including provincial managers in each province.  Bonuses paid in May 2003 had been for the 2002/3 financial year and were not performance bonuses. There had been no performance contracts in operation in that year. All employees had been given bonuses that year. No bonuses were paid in 2003/4 or for 2004/5. Bonuses were paid in 2005/6 because performance had to be rewarded in order to inculcate the values of a performance-based culture; they were based on measurable criteria.  Ms Antonis gave details of how the bonuses were awarded. In the current year, individual performance had been measured. In subsequent years, team performance and organisational performance would be measured in addition to individual performance in the determination of bonuses. The Board alone approved bonuses and salary increases. It had to be acknowledged that NDA had not been successful in regard to disability issues. Traditional recruitment mechanisms had not realised satisfactory results in that regard.

Mr Mofokeng r said that it was proposed to split the income statement to represent the amount spent on capacity building. A cost reduction strategy was being developed. A register of projects was being compiled to ensure that all documentation was complete, with the use of scanning technology to create backup images of documentation.

Mr Mogano said that it was important to look at staffing costs in relation to the actual period for which the NDA was committed to a project. Moreover, the staffing costs were directly attributable to the actual staffing of projects and were not essentially a cost additional to funding the projects. The NDA’s process for accessing funding was stringent. The NDA had recently approved projects nationwide to the level of R21 million in support of capacity building. These would be launched on 27 November 2006, and would involve 15 or so organisations around the country. The NDA was sensitive to the issue of income-generating projects: these had much higher prospects of sustainability, though to define it only in financial terms was misleading. It had to be redefined in a wider context. The issue of assets, especially their disposal, was complex.

Ms H Mansour, Chief Audit Executive / Director of Internal Audit, said that a risk manager had been appointed.

Ms Bogopane-Zulu said that she appreciated the responses of Mr Mokate and his reluctance to discuss the challenges with regard to the legislative framework concerning the NDA, but the Committee needed to hear more, because it was the Committee’s responsibility to call for amendments to legislation if required, and said that she needed to meet with the Minister regarding disability issues, since every agency and department produced excuses for not acting. The Department of Social Development should be expected to take a leading role. “Real jobs” should be open to the disabled, not just low-level jobs.

The Chairperson said that all should be concerned with disability.

Mr D Willcox, Company Secretary, NDA, said that the 2003 forensic audit report was about to be deliberated upon by the NDA Board at its 30 November 2006 meeting. The second forensic report had just been completed and handed to Mr Mokate on Monday, 6 November 2006 and would be presented to the Board at the same meeting on 30 November 2006. Thereafter the Board would meet with the Minister to decide when the report should be released to the public. It was anticipated that both reports would be released during the first session of Parliament in 2007.

The Chairperson thanked Mr Mokate and his colleagues for their presentation.

South African Social Security Agency (SASSA) Presentation
Mr F Makiwane, Chief Executive Officer, introduced his colleagues and explained that his presentation was a progress report on the first six months of the South African Social Security Agency (SASSA)’s existence.  The size of the delegation reflected the seriousness with which SASSA viewed the social security programme, which was essentially Government’s biggest poverty alleviation programme.  As the Committee had already been informed, SASSA had not yet produced an annual report, since it had been created in April 2006. SASSA therefore at this time was presenting to the Committee a half-year progress report. The presentation was to be viewed in relation to a progress report that had already been sent to the Committee. It would indicate the priorities that the Agency had set for itself in regard to the establishment and putting into operation of the Agency and measures to improve service delivery. The Agency’s strategic plan and budget would be explained. The Agency had set for itself six strategic priorities. The first was to improve the Agency’s service delivery quality, including, in particular, the turnaround time for processing of applications for grants, the development and implementation of the service delivery model, and basically answering the question of what the Agency should do differently from what the provinces had been doing in terms of grant delivery. Implementing priority norms and standards would also be described. The norms and standards had already been circulated and the Committee was aware of them. Also the number of beneficiaries served by the Agency would be mentioned and how growth in numbers could be projected, along with the dynamics of the growth in beneficiary numbers. The implementation of the Customer Charter would be described. These were the main elements of the presentation.

The next area was organisational capacity. Some staff had been transferred from other departments and agencies on establishment of the Agency. The head office and the regional offices had had to be created. So recruitment of staff had been a key priority of the agency. Implementation of human resource policies had become very important, as had been the establishment of a change management culture in the organisation, and the establishment of a staff-training programme to ensure that they were well capacitated to deliver quality services to beneficiaries.  The next strategic priority dealt with improvement of payment services to beneficiaries.  There were problems related to the infrastructure that the Agency had inherited, especially with regard to the safety and security of service delivery points. Fourthly, grant-processing integrity had to be addressed. The Auditor-General had alluded in this regard to data quality. There was a need also to standardise business processes. There were two issues of core importance: financial matters and prevention of fraud. 

The first key programme issue was the customer management programme. The first issue that had been finalised was the Customer Charter. This embraced such matters as customer or beneficiary expectations of the Agency, aspects of behaviour and interaction between staff of the Agency and customers, and the Agency’s expectations of customers themselves. The Agency hoped that the document would ensure transparency and accountability.

The second issue that had been finalised was the issue of the grant application process, which the Agency had standardised across the country. Several strategies had been implemented to improve the turnaround time. A pilot project had indicated that a turnaround time of three days was a reasonable target.

The third issue was that of unclaimed benefits and cross-boundary transfers. Some policies had been drafted, and more information could be provided to Members if required.

The next issue was the “lost file syndrome”.  The national database of needy learners had been finalised to facilitate beneficiaries’ access to other government services that could be of help to them. The last element was the customer relationship strategy.

Much progress had been made towards improvement of infrastructure. It was hoped that help-desk officials could be provided at all pay points who could assess beneficiaries as to their eligibility for other government services. Mobile offices had been procured to facilitate access to rural areas. These were being piloted in two regions. Next financial year it was hoped to extend these mobile offices to all provinces. Twenty mobile offices would be delivered this month.   A monitoring report programme had been initiated to ensure compliance by third party contractors.

With regard to business integration, eight of nine regional offices, together with some district and local offices, had been moved to offices separate from the Department of Social Development.  The grant administration function had been capacitated with transfer of more than 6 000 staff from provincial offices.  Support function policies, procedures and delegations were being rolled out to regions. Grant administration policies, procedures and delegations had been implemented with clear reporting and accountability.

With regard to business partnerships, costing of policies and grant and beneficiary projections through macroeconomic and micro-simulation modelling techniques had been implemented.  Verification of grant projections had been completed. The Agency had met with various institutions to assess where they could support and assist the Agency in promoting service delivery. 

Among trends in beneficiaries, child support grants were the main cost driver. The total number of beneficiaries was 11.5 million. KwaZulu-Natal had the highest annual growth rate over the review period – 22.3%, with the North West second at 20.5%, Mpumalanga third at 15.4% and the Eastern Cape fourth at 14.7%.

With regard to the management of human capital, recruitment policy and delegations had been finalised by the end of September 2006. 60% of identified critical posts had been filled. An approved organisational structure was currently under review to ensure alignment with the service delivery model. Most contract workers transferred from the Department of Social Development had now been absorbed into the Agency as permanent staff members. Labour relations and collective bargaining forums were being established. Training and development interventions had commenced. 645 employees were studying social security, which was no longer a field of sheltered employment for the incompetent. A skills audit was underway. Human capital management (HCM) policies, training interventions focusing on core functions, were in the development stage. Performance contracts had been signed by 80% of Senior Management Staff (SMS), and by 54% of staff on levels 1-12. The Essential Services Committee had designated SASSA as an essential service; therefore, the law forbade strikes by employees.

In regard to legal services, a draft litigation strategy had been developed. Consultation with relevant stakeholders was currently underway. Ad hoc assistance and structural assistance had been provided to regional offices.

With regard to information and communications technology (ICT), critical business systems (BAS, PERSAL, LOGIS, and SOCPEN) had been put into operation. ICT support services had been provided through a State Information Technology Agency (SITA) business agreement, while tenders were being finalised on the open market.  Loopholes in the SOCPEN system were being closed, as required by the previous audit. The SASSA website, www.sassa.org.za , was now in operation. A SASSA intranet had been established. A Home Bases electronic document management system had been acquired. ICT governance structures and standard policies had been developed.

With regard to the communications, marketing and change management programme, a three-year communication strategy and plan had been developed. An internal communication plan had been developed including a regional alignment process. An interim brand had been finalised and introduced. A corporate identity standardisation process had been concluded. A national switchboard had been established. A call centre establishment project was to be transferred from the Department of Social Development. The Agency had put in place guidelines for handling complaints. The Minister, however, handled appeals.

The Agency had a fully developed finance department. All the necessary compliance measures had been implemented. In the finance and supply chain management programme, all budgets were being transferred from provincial Social Development offices to the Agency. A detailed budgeting template had been created and implemented. 

In the audit and risk management programme, the Agency had appointed a chief internal auditor and professional staff, developed audit and risk management policies, established monitoring and evaluation processes, built partnerships with other data sources and other institutions, appointed a Special Investigating Unit (SIU) for three years to assist with investigations, and had suspended, as of the end of September 2006, 15 982 government employees who had been receiving grants, and received over 43 000 cases for investigation through a fraud hotline with a 24 hours a day number.

In conclusion, the process of establishing SASSA was proceeding well within expectations presented in the strategic plan. SASSA had assumed full responsibility and accountability for the administration and payment of social grants across all nine provinces. The following issues posed challenges and risks for the agency: transfer of contracts and associated budgets from provincial and national Departments of Social Development to the Agency; and the current state of litigation and magnitude of liability in respect of cost orders granted against the Agency.

Discussion
Ms Bogopane-Zulu objected strongly at the beginning of the presentation to the way presenting teams were introduced at meetings, which were confusing, especially to Committee Members and visitors with visual disabilities. She said that identification would be facilitated if speakers announced their identities clearly when they began their contributions to the meeting.  She stressed that members of presenting teams had voices.

Ms Weber supported Ms Bogopane-Zulu’s objection. It was a valid suggestion that it was helpful to be able to associate speakers’ names directly with their voices.

The Chairperson concurred and noted the matter for attention at the next meeting.

Ms Bogopane-Zulu appreciated that the progress report itself had been sent to Members by email, but remarked that Members of Parliament had to pay for their own stationery.

Mr Makiwane said that this was an example of “public-private partnerships” and sharing of resources. 

Mr Waters complimented Mr Makiwane on his presentation and said that he had been very impressed with what he had seen on a visit to SASSA within the previous three months. He asked for clarity on whether it had been 15 982 employees who had been suspended or the same number of grants that had been suspended, and, following a robbery by armed men, had all service points been provided with proper security?
 
Ms Bogopane-Zulu said that SASSA’s website needed to be kept accessible and up to date. However, she had serious concerns about the Agency’s operations in the Eastern Cape, including the attitudes of staff. 

Advocate Masutha was worried about the issue of litigation and hoped that SASSA would not be overwhelmed by a multitude of lawsuits.

Mr Solo said that he shared the sentiments of his colleagues and praised the overall efforts of SASSA. There needed to be co-operation from local government to provide adequate facilities for SASSA operations at the point of service delivery.

Ms C I Ludwabe (ANC) asked if the police could accompany vehicles carrying pension money to improve security, especially in villages, where there were no telephones.

Ms Makasi congratulated SASSA for its co-operation with the Committee, but payment through banks was not an option in the rural areas.

Ms Bogopane-Zulu said that local halls should be rehabilitated to provide a local resource and at the same time they could be used for SASSA to disburse payments.

Mr Makiwane replied that SASSA had a working relationship with the police to protect payment points, though police resources was heavily stretched, especially in rural areas.
Fraudulent Identity Documents (IDs) were referred to the Department of Home Affairs. If Home Affairs passed the ID, then SASSA had no option but to pay the beneficiary. Partnership with other government departments was very important to SASSA. The Agency appreciated the Committee’s observations and suggestions in its efforts to become a world-class organisation. He agreed with Advocate Masutha that SASSA needed to learn from the experiences of other social service institutions in dealing with litigation. The Unemployment Insurance Fund (UIF) also faced litigation issues.

SASSA was reviewing its system of payments through some 6 000 payment points throughout the country and comparing its practices with those of other nations in order to improve security from the viewpoint of the Agency and its beneficiaries. Contracted service providers had to be very strictly managed to prevent abuse of beneficiaries. It was essential that contracted service providers be obligated to pay to the beneficiary the exact amount stipulated by the Agency. To this end, the Deputy Director General of the Department was studying ways and means of better contract management.  The mobile offices, equipped with online computer facilities, had been introduced to expedite processing of the many deserving cases that SASSA had found in the rural areas that had never previously received social grants because of lack of processing facilities. Staff had to be educated to internalise the values of the Batho Pele Change Management Programme; the Agency was addressing this. A skills audit had been undertaken. A proactive strategy had been adopted to respond to the issue of litigation.

Ms Bogopane-Zulu said that the NDA could share its expertise in human resources with the SASSA. Indeed, all agencies whose objective was to alleviate poverty should share their experiences.

Mr Zane Dangor, Chief Operations Officer, DSD (Department of Social Development) added that the Department had the view that its role in relation to the NDA and the SASSA was not just one of oversight, but also to work in partnership with them and to provide strategic support.

The Chairperson thanked Mr Makiwane and colleagues for their presentation and responses.

The meeting was adjourned.



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