South African Social Security Agency and Department 2007/8 Annual Report & Strategic Plan briefings

SOCIAL DEVELOPMENT PORTFOLIO COMMITTEE
9 March 2007
SOUTH AFRICAN SOCIAL SECURITY AGENCY AND DEPARTMENT 2007/8 ANNUAL REPORT & STRATEGIC PLAN BRIEFINGS

Chairperson: Ms T Tshivhase (ANC)

Documents handed out:
South African Social Security Agency (SASSA) Strategic Plan 2007/8-2009/10
National Treasury document on Retirement Reform
Budget Hearings: Social Security by Department of Social Development

SUMMARY
The South African Social Security Agency presented a brief overview, including its mandate of ensuring the provision of a comprehensive social security service against vulnerability and poverty within the constitutional and legislative framework. It set out its vision, mission and values, the legislation governing it and key objectives and outlined its achievements in its first year in terms of expenditure of its establishment, operational costs and the integration of social assistance administration and payment services. It also addressed issues of grant fraud with regard to public servants, as well as its projected budget for the 2007/8 and 2009/10 financial years.

The Department of Social Development gave a presentation on its progress on social development this included pending legislative policy and regulations, an overview of the comprehensive social security system and retirement policy reform.

Members raised concerns on the transfer of social security services when provincial borders had been moved, why there seemed to be a delay in prosecuting public servants accused of fraud, and how the fraud matters were being dealt with. Questions were also raised about the Unemployment Insurance Fund (UIF), children’s grants, foster care, disability payments, medical schemes and retirement schemes. They asked about the relationship, and the seeming disarray, with the Department of Home Affairs with regard to those eligible for grants. Further questions related to grants that were available to war veterans. The Social Security Agency was asked to provide written details of the debt recovery programme.

MINUTES
South African Social Security Agency (SASSA) Briefing
Mr D Plaatjes, Acting CEO, SASSA presented the progress of the establishment of the agency. During 2006/07 80% of resources was spent on establishing the agency, on operational issues and integration of the social assistance administration and payment. In terms of internal audit and risk management, 15 178 fraudulent public servants had been identified, of which 2 258 had been convicted, and acknowledgments of debt had been signed and money was being recovered.  86 000 indemnity applications had been processed. 71 038 applicants had been granted indemnity while 8 693 had been denied.

In the area of corporate services 6 000 grant administration staff were transferred from the National Department and nine Provincial Departments to SASSA, while 300 staff had been recruited. Most of the executive and senior management positions had been filled. Human resources policies were in place and a skills audit had begun. Information and Communication Technology (ICT), communications and marketing and finance were highlighted. Customer service emphasised a two-day turnaround time of grant access, successfully implemented in the Eastern Cape, with a roll-out to other provinces. In relation to strategy and business development, the head office had been established, regional offices were now set up in seven of the nine provinces, a strategic plan for 2006 to2010 had been drawn and there was regular monitoring of processes.

In terms of service delivery trends, the agency had seen an overall growth in grants of 0.5% per month from April 2006 to January 2007. Old Age grants expenditure had grown by 0.1% per month, Permanent Disability Grants by 0.2%, Temporary Disability by 2.3%, Foster Care by 1.7%, Care Dependency by 0.7% and Child Support by 0.7%.  The 2007/08 to 2009/10 strategic priorities were laid out under a number of programmes relating to the office of the CEO, Internal audit and risk management, corporate services, communications and marketing, finance, information and communication technology and customer services and strategy and business development.

Mr R Poyurs, CFO, SASSA explained the agency’s budget spending and projected budget for the current financial year ending April 2007 and the MTEF period to 2010.

Discussion
Mr T Masutha (ANC) asked why SASSA only had established offices in seven of the nine provinces.

Mr Plaatjes said that head offices were set up in all provinces, but the agency faced the problem of logistics in terms of building space. He indicated that this was a remnant of the past where different departments shared office space. This was being addressed

Mr Masutha asked what SASSA’s responsibility was in relation to contractors, such as paypoint operators.

Ms B Rankin, Executive Manager: Corporate Services SASSA replied that the agency had commenced with a process of looking at relevancy of contracts and was now analysing the financial implications of these contracts. She added that some contracts had already been ceded to SASSA, such as in Limpopo.

Mr Masutha questioned the process of litigation of fraudulent grant claims. He asked what the Agency’s relationship was with the Department of Home Affairs, given the latter’s current state of disarray. He added that many people were using fraudulent identity documents to access social grants.

Mr Plaatjes replied that the Agency was working closely with the Department to prevent fraud and a task team had been set up. Challenges were faced when ID numbers did not match and where the same number had been issued to more than one person,  The agency was tasked with a social responsibility that should not inconvenience people, particularly those who should have access to grants.
 
Mr K Morwamoche (ANC) asked when all vacant posts would be filled in the Agency and what the status was in terms of the Auditor General’s report on underspending.

Mr Plaatjes replied that the Committee had to bear in mind that the agency had not completed its first financial year and most of its expenditure during that time was spent on setting up the agency.

Mr Morwamoche said that many frontline staff, particularly in the deep rural areas, did not have the new documentation on grants and asked why there were different implementation procedures in different provinces. He pointed out that people wanting to access a disability grant had to have a letter from a doctor. While in the Eastern Cape, this was working well, a province like Limpopo did not have enough doctors to meet this need.

Mr Plaatjes replied that the Agency was looking at best practices and the Eastern Cape model was the best for the time being, but was not without its problems. The Agency was in the process of employing doctors to evaluate claims.

Ms X Makasi (ANC) said she was happy with the performance of the agency and hoped the difficulties would be ironed out. In terms of prosecuting fraud, she asked why there was a discrepancy between the number of public servants identified as committing fraud and the small number that had been convicted. She asked what the situation was in regard to officials who had signed acknowledgments of debt, whether they were still employed and what the criteria was for granting indemnity.

Mr Plaatjes replied that 250 cases had been finalised in 17 centres, and the Agency was solving the problem by prioritising cases and making sure the National Prosecuting Authority had the correct paperwork. Indemnity was granted in cases of poor people where the money could not be recovered, but the grant had been removed. He said that the Agency’s overarching responsibility was not to cause additional hardship. The Agency had identified R34 million of public servant fraud. R5 million had been recovered of which R1 million was fully paid back.

Mr J Sibanyoni (ANC) mentioned that there had been a change in provincial boundaries and asked when would social services be taken over by the new province.

Mr Plaatjes replied that the services had been transferred and beneficiaries did have access to information on grants.

The Chairperson asked what the position was on social workers accessing foster grants.

Ms S Koloti, Acting General Manager: Customer Care, SASSA said the agency would investigate and report back to the committee.

Mr Masuthu asked about the Agency’s capacity of monitoring grants, as there were not enough social workers to go door-to-door to establish whether people existed.

Ms L Bosch, General Manager SASSA said that foster monitoring and capacity development was underway.

Mr Morwamoche asked about the over expenditure and savings in various provinces and asked whether consultants were being employed when the agency could train its own staff. The Committee objected to consultants simply becoming overpaid public servants.

Mr Plaatjes said that the Agency was undertaking a review on staffing, followed by a skills audit and implementing training programmes. In relation to the two-day turnaround time of accessing a grant, a lot of training had taken place and in some provinces it had been implemented

Ms Rankin added that the Agency was vetting staff and validating personal information. The Agency was working with the National Intelligence Agency to vet the executive management and this process would move down through other levels.

Mr Poyurs made comments in regard to over and under expenditure. He noted that the budget was lodged with the national agency and, although funds might be earmarked for a particular province funds, they could be shifted around.

Mr L Nzimande asked about grants to war veterans as the grant was restrictive as to the age at which it could be accessed.

Mr Plaatjes said there had been a sharp decrease in people accessing war veteran grants, but that the age issue was a policy discussion and should be referred to the Department.

Mr M Waters (DA) said he had a question relating to when the vetting of rank and file agency staff would take place.

Mr Masutha interjected that Mr Waters had not been present throughout the presentation and therefore should not have the right to ask questions. He remarked that the Committee must be presented with the agency’s debt recovery programme in writing.

The Chairperson concurred with this suggestion.

Department of Social development (DSD) : Briefing on social security
Mr S Jehoma, DDG: Department of Social Development (DSD) presented a paper on the pending regulations and policies, the Department's package of services, including income poverty, service poverty, asset poverty and special needs and social insurance. He set out the government’s three pillar social security framework. The first tier related to social assistance in terms of education, healthcare, potable water and electricity accessibility. Challenges faced included the recognition of a gap in social assistance of vulnerable people between the ages 14 and 60, the need for support to children between 14 to 16 years old and people with chronic conditions. He pointed out that government programmes for water and electricity were on track. Progress on pillar two covered social insurance for retirement provisions, social health insurance, the Road Accident Fund, Unemployment Insurance fund and work-related injuries or diseases. Pillar three covered voluntary contributions for benefits over and above pillars one and two, such as additional retirement annuities. The Department had completed a thorough review of retirement provisions and the findings were set out. The remainder of the slides dealt with social health insurance, road accident fund and other disability funds.

Discussion
The Chairperson commented that all citizens had to facilitate social change to the country and the Department’s programmes seemed to providing the way to do this.

Ms F Batyi (ID) asked for clarity on the pension reform programme, asking whether in the case of a person who contributed and died shortly after retiring, the benefits would go to the dependents.

Mr Jehoma said that dependents would receive the pension as a survivor’s benefit.

Mr Morwamoche asked about UIF monitoring, particularly in those cases where it had been deducted but was never paid to the Department.

Mr Jehoma said that the Department was looking into the lack of compliance.

Mr Morwamoche said that people did not save for their retirement because the country’s tax laws penalised them for this.

Mr Jehoma said that middle and high income earners were normally the individuals that contributed to private retirement funds, for they received tax breaks. This should be seen as a subsidy from the government.

Mr Masutha said there seemed to be a perverse disparity between private and public retirement beneficiaries, and he asked for statistics on this. He questioned why there would be a consolidation of private retirement funds in the advent of a voluntary contribution public fund.

Mr Jehoma responded that social development was charged with meeting the gaps between public and private funds. He said much of the contribution made to private funds was diminished by administrative costs and when the benefit was paid out, the amount was far lower than expected. He said the consolidation could be seen as a forced process as beneficiaries would remove their funds and place it in the public fund as a result of the greater return.

Mr D Mabena (ANC) asked what the monitoring process was over guardians of children who were eligible for the Children’s Grant and what access the children had to legal advice on the use of their grants as this was often an additional financial burden.

Ms Naicker said that with regard to the 0-14 year-old benefits the Department was developing a policy on issues such as determining the poverty line and establishing equity between the Children’s Grant and foster grants. She pointed to an earlier question relating to social workers claiming fostering grants, and she said that the grant was paid to the child and not the guardian. She added that anyone could foster a child and encouraged the members to do so. She said that the Department was working with the Department of Justice to provide legal aid to children.

Mr Nzimande asked how the pension reform would affect those living on military disability grants.

Mr Jehoma said that in terms of social assistance the disability grant would automatically convert to a pension grant when the recipient reached pensionable age.

The Chairperson said the country faced numerous challenges on social development, which it was compelled to meet.

The meeting was adjourned.