Department of Social Development Annual Report 2007/08: briefing

Social Development

21 January 2009
Chairperson: Adv T M Masutha (ANC)
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Meeting Summary

The Department of Social Development briefed the Committee on three areas of its Annual Report 2007/08: Institutional Capacity, Comprehensive Social Security and Welfare Services. Issues raised included the need to interrogate the reasons for the failure of the Independent Appeals Tribunal and the Means Test.

Members questioned the use of the terms ‘over spending’ and ‘under spending’. The Department explained how ‘savings’ are often reflected as ‘under spending’. Social relief for persons planning to undertake tertiary studies was discussed with the view to prevent discouragement. The Committee committed itself to drafting a letter to the Department of Education in this regard.

The Committee expressed concern regarding the Means Test and asked for clarity as to how the formula worked and when disqualifications came into effect. The Committee felt that the Means Test was not a user friendly system for customary marriages. It was clarified that a legal union necessitated a duty of support even for multiple spouses. Members discussed extensively the issue of the Old Age Grant and the standard of living as these related to the Means Test.

The Committee was disappointed that provinces were not implementing social relief applications in a uniform manner, but were assured that the regulations to inform applications would be provided by the Department. The Department’s failure to establish an Inspectorate as decided by the Committee in 2008, was major setback for Department and this matter was debated extensively. The high numbers of Appellants in Kwa-Zulu Natal was discussed with a view to remedy the matter.

Questions on the termination of grants were referred to SASSA for discussion on 22 January 2009. The questions regarding Welfare Services were also held over due to time constraints.

Meeting report

DSD Annual Report 2007/08: Overview of Institutional Capacity
Mr Zane Dangor, Chief Operations Officer, Department of Social Development (DSD) presented an overview of the Annual Report with a focus on Human Resource Management and indicated that data for the years 2005 and 2006 were included to show how the issue of vacancies had been managed. They had managed to reduce the vacancy rate to 14%. The Department had implemented the new supply chain management directives as promulgated by the National Treasury. He listed at length the key achievements in their International Obligations component which had increased considerably since 1994 with its focus on development of long-term partnerships with developing countries (see document for details).

Final Audited Expenditure for the 2007/08 Financial Year
Mr Coceko Pakade, Chief Financial Officer, DSD contextualised the issues related to expenditure in the current financial year. The Department had made key interventions and this had resulted in an unqualified Auditor General report. The bulk of the budget was transferred to households and the Child Support Grant was extended. Since the National Department had taken over from provinces, projections had improved significantly, and the Department had almost spent up to the budgeted amount. He outlined the specific reasons for under spending but they were mainly to the Department’s failure to fill vacant posts due to capacity constraints.

He said that the National Development Agency (NDA) had been trying to get more money from the fiscus to expand their services, but had been unsuccessful. The Department was engaging with the NDA to sort out these matters.

Mr Pakade said that the Department was reviewing the legislation regarding the Disaster Relief Fund to consolidate this fund and do away with the Boards involved in this process. There would be assistance to victims of disasters which had not yet been formally declared as such.

Mr Pakade reported on the Auditor General opinion. He explained that the transfer of functions from the provinces to the national Department had resulted in most of the balances not being disclosed because the Department was unable to do so until 2007/08. By the end of 2009 the Department hoped to have reconciled all the debtors as an extension had been obtained from the Auditor General for disclosure in March 2009.

Ms J Semple (DA) asked about the HDI (Historically Disadvantaged Individual) and non HDI items for the Total Procurement for Supply Chain Management, and what the ‘Other’ institutions were, referred to under this item.

Mr Pakade replied that with regard to ‘Other’ institutions, a lot of work was being done by state institutions such as the Human Sciences Research Council and universities where one could not look at ownerships in terms of shareholding.

Mr J Schippers (ANC) asked if the Department had a specific budget and was there overspending.

Mr Pakade replied that there had been no overspending. Where it appeared that there had been overspending, this merely reflected consulting fees, which had been budgeted for but not used.

Ms Semple asked for clarification on the under spending of R1 million on Planned Parenthood Association.

Mr Pakade replied that a process of engagement with the Planned Parenthood Association had been started and a project plan was being developed. In terms of the regulations, certain protocols had to be satisfied and the process had taken longer than anticipated. After it was clear that money was not available, the Department had applied to Treasury for approval and asked for a rollover. This was granted and the Department was allowed to pay this in following year.

Mr K Morwamoche (ANC) asked about the under spending of conditional grants received by provinces and how the Department was going to address disaster recovery without a formal disaster recovery plan.

Mr Dangor replied that the Department no longer had conditional grants, so it was no longer a concern from the Auditor General.

Mr Pakade said that the CEO had informed the Auditor General that the Department was in the process of developing a disaster recovery plan, but this happened at the time of auditing, so it was not signed-off and approved.

Mr Schippers asked how it was possible for the Department to make a savings of R37 million.

Mr Pakade replied that with the amounts reported in each of the Programmes an explanation was normally enclosed for underspending. Sometimes when one looked at savings it did not necessarily mean that the key deliverables were not achieved. There might have been some projects that had not taken off fully yet. Thus, money had been budgeted for but not paid to suppliers in the financial year concerned. Savings usually occurred when there was under spending, when a strategy was changed or efficiency gains were used.

Mr Schippers asked for the number of persons who were due for termination, and why money was allocated to them in the first place.

Mr Pakade requested that South African Social Security Agency (SASSA) given the chance to respond to the question on terminations the following day when they would make their presentation.

Mr Schippers asked for clarity about the link between the Department not being able to complete Performance Appraisals on time and some of the money saved as a result thereof.

Mr Eugene van Vuuren, DSD Chief Director Human Resources, said that to a certain extent a number of Performance Appraisals had not been finalised on time. This impacted not just on potential cash bonuses, but also on pay progressions in terms of awarding higher salary notches.

The Chairperson asked if the money was backdated or lost in the process.

Mr Van Vuuren replied that the money was backdated to the time the official qualified for the relevant performance incentive.

Mr Schippers asked if there was social relief for persons who needed to enroll in tertiary institutions.

The Chairperson noted that there was going to be a presentation on Social Security and this question could be dealt with then.

DSD Annual Report Part B: Comprehensive Social Security

Mr Selwyn Jehoma, Deputy Director-General: Social Security, said that following the Taylor Committee Report, the Government had adopted a Three Pillar approach to social security. These pillars were: Social Assistance, Social Insurance and voluntary contributions for benefits outside of Pillars 1 and 2. He outlined the Social Assistance Function and its impact on Children, Youth and Family Benefits, Old Age and Disability, and Other Social Assistance Policy Developments. He explained how Social Security Transfers and Administration were executed and the four feasibility studies completed regarding Social Insurance.

The Department has been of the view that Social Relief should be executed by provinces.  This would provide the national Department with a chance to review progress on this matter and assess how people who were not covered by the main social assistance grant were coping. Social Assistance was sustainable in that it was not a liability for the Government (see document)

Briefing on the Means Test
Mr Thabo Rakoloti, DSD Chief Director: Social Assistance, briefed the Committee on the workings of the Means Test. The Means Test for Child Support Grants had been increased from R1100 to R2300 per month. The Department had a formula that automatically adjusted as the grant value increased. This formula worked similarly for the Care Dependency Grant, Old Age Grant, Disability Grant and the War Veterans Grant. Hence if for example one was earning R2300 per month or more, one was disqualified from the Grant. During 2008 the Department engaged with National Treasury to universalise Old Age Grants and the approach taken was to ensure that the Means Test threshold was gradually increased to allow for greater access to these Grants.

Mr Morwamoche stated that the Means Test was not user friendly for customary marriages.

The Chairperson noted that persons whose income was taken into account, were those who by law had the duty of support. Hence a spouse could be taken to court if he or she fails to provide support.

Mr Schippers asked how often the Means Test was revised.

The Chairperson said that in theory the actual computation of the amount of the grant was reviewed every year.

Mr Jehoma said that a review was done of the increment and whether it was sufficient to ensure there was no erosion by inflation. He said the Department now had formulas that were self-adjustable so that as the increment changes, the threshold was also adjusted.

The Chairperson asked if any studies have been done around the average standard of living and the actual survival needs of retired persons. He asked further about the debate regarding the complete removal of the Means Test.

Mr Jehoma said that the Department had not looked at what the Grant could or could not buy as it was instead informed by the historical situation. He raised the concern that at the current value, the Old Age Grant was close to the minimum wage and might create a disincentive to work.

The Chairperson asked if the Old Age Grant was not linked to the age where one had finished one’s working life and could no longer work.

Mr Jehoma said that the objective of the Old Age Grant was poverty alleviation for the elderly and this was the most important point for the Department. The Old Age Grant value was relatively high when compared to the average wage income.

Mr Dangor said that the issue of universalisation of social security was a political issue and must be engaged with at a strategic level.

The Chairperson said that it was not for the Department to battle with such policy issues.

The Chairperson asked if there was a dedicated study on the migration of persons to sustainable livelihoods.

Mr Jehoma said that a dedicated programme existed which was part of the Government programme of action to link social assistance to economic activity. The Department provided social assistance by looking at care givers of children through a Work Fair programme and a Welfare to Work programme. For care givers, social security could link them to work but they could not be expected to provide the work. There was a challenge here regarding institutional arrangements, and institutions like that of Labour and Social Assistance working together and possibly merging.

Mr Schippers asked where one could apply for social relief.

Mr Jehoma responded that provinces were interpreting the regulations on where to apply for social relief differently. A special Heads of Department meeting was held last year and there was a Procedure Manual available. Any SASSA employee or social worker should be able to talk on these benefits. Any office of SASSA was there to provide social relief of distress.

Mr Morwamoche said that regarding delegating certain functions to provinces for social relief of distress, provinces where not using the same Circulars when it came to implementation.

Mr Solo (ANC) said that he had found that there was a the lack of efficiency and a bad work ethic displayed by officials in provinces.

Mr Morwamoche indicated that the Department needed to provide the Committee with the regulations.

The Chairperson said the Department should make sure the regulations are available or do so through the Committee Secretary.

DSD Annual Report 2007/08 Part B: Independent Tribunals for Social Assistance Appeals
Mr Armstrong Malope, DSD Director, provided a background to the Appeals process and noted the inherent delays which had resulted in the creation of backlogs which dated back as far as 2004. He presented the Appeals Service Delivery Model and the realisation of the Establishment Progress processes. He explained the composition of Tribunals, the current workflow process and the Way Forward for the phased decentralisation of the system (see document for details)

The Chairperson said that the legislation required and provided for that establishment of an Inspectorate. The Committee was told in 2008 that there was still a bone of contention regarding this matter. If there was a policy shift, then the Committee should have been informed about this. Once Parliament made the law, if there were special circumstances that prevented the law from being implemented the Committee should have been informed. The Chairperson asked Mr Dangor and Mr Jehoma to address this question.

The Chairperson asked to what extent the problem regarding the new Tribunal was being addressed. In 2008 the Committee was given a report that there were thousands of persons who had not been dealt with. He asked if a crisis was being faced and what was the turnaround time, to get into the Tribunal and access to service delivery. The Chairperson asked further what the budgetary implications were regarding litigation.

Ms Semple agreed with the Chairperson.  If more than half the cases were from Kwa-Zulu Natal (KZN), why and what would the effect be on the budget if all the cases were upheld? Had timeframes been set for going forward?

Mr Malope replied that the large numbers of High Court cases in KZN were due to disgruntled appellants who were frustrated with the Department and planned to go to the High Court. The numbers of disgruntled persons were around 3000 and all were scheduled for Tribunal sittings.

The question regarding the high numbers for litigation in KZN was difficult to respond to. This was partly due to the lack of communication regarding information for appellants. There are a number of attorneys who specialise in these matters, and the Department had requested a study regarding KZN. The preliminary findings, in some cases had found that appellants were not even aware that matters have been referred to High Courts. So the investigation into KZN was still ongoing.

The Chairperson asked if there were alternative plans in place for rolling out a more permanent structure.

Mr Malope replied that regarding alternative plans the Director-General was committed to dealing with at least 35% of the cases before the end of the financial year. Since there were adequate resources on the ground, plans were in place. There were plans to go full scale to enlist panel members in all provinces

Mr Morwamoche said the strategic plan was not in line with the budget because the arrangement was not included in the strategic plan, hence where was the Department going to get funding.

Mr Dangor said that regarding the strategic plan, the Tribunal was funded by the oversight budget. There was a sense that the Department had under budgeted and did not estimate ‘the size of the beast’. Treasury was approached but did not approve the budget. Litigation costs were a separate matter.

The Chairperson said that when an application was made for a grant at the SASSA offices, it took an hour to approve it if it was a straightforward case. He asked if there where other matters required for verification and whether the applicant always got a response in writing if the application was successful or not. He asked further if the Department had an efficient communication system

Mr Jehoma responded that the Department should have a better planning system, but when the functions were shifted to SASSA, all persons from Grant Administration were moved and only a small component was left for policy work. It has therefore been extremely difficult to find persons with social security qualifications and the section on Tribunals had to be rebuilt. This situation had been exacerbated because the Minister had made attempts through MINMEC meetings, by asking MECs to hold onto the responsibility for a while longer, however regrettably the provinces were not amenable to this idea as appeals were increasing.

With regard to the Inspectorate, this was not an institution that the Department had envisaged, and Treasury has disowned what they had previously proposed regarding such a structure. Mr Jehoma said that the one benefit achieved was better compliance and that objective had not been lost.

Mr Dangor said that the Department had done a feasibility study and if the plan went ahead another layer of bureaucracy would have been created. This discussion still has to be taken forward with SASSA. A decline in appeals was envisaged by the Department. There was an understanding that appeals were a high risk area. Problems with prioritisation were still being experienced. The question still prevailed on whether the Department had an Inspectorate or just another bureaucracy.

Mr Dangor said that questions about process issues would be explored the following day with SASSA, including medical assessments.

Mr Pakade said that on the issue of funding, it was not correct to assume that the Department had not been given money. Treasury had allocated funding for the establishment of an Appeals Tribunal, but the question was whether the money was sufficient. The National Treasury had based their argument on two things: firstly they were asserting that the Department was seeking funding for an extensive structure that could be decentralised to provinces and regions; and secondly, there was the argument that the Department was dealing with a huge backlog. The Treasury felt that the Department should put more money into addressing the huge backlog and not into creating a new entity.

Regarding litigation costs and the huge risks involved in this area, the Department had incurred costs due to administration inefficiencies, and these funds had been earmarked for SASSA. However SASSA did not get this money. For the Department the only risks were if backlogs were not addressed. There were 52 000 cases that might go the route of appeals with litigation. If appellants were given clear dates and timeframes for adjudication then there would be a reduced likelihood of losing cases. The National Treasury was reluctant to pay for this, and the Department would have to deal with the reality when faced with it.

DSD Annual Report 2007/08 Part C: Programme Performance Welfare Services
Dr Maria Mabetoa, DSD Deputy Director-General: Welfare Services, discussed the areas of Welfare Services Transformation, Substance Abuse, Services to Children, Services to People with Disabilities, Services to Older Persons and Families and Social Crimes (see document for details).

The Chairperson (Mr Morwamoche was chairing as Mr Masutha had to leave) said that the Research Unit should check with the Department of Education on the time frames for allocating bursaries to students so as not to discourage them from studying in the Social Services field. The Committee agreed to draft a letter to this effect to the Department of Education.

The Chairperson sought clarity on old age homes, and asked why the old age home at Matlala Hospital had been closed.

He said that disparities existed between provinces regarding Expenditure and Coverage per Province for Old Age Homes subsidies. He asked why there was no parity for allocations.

The Chairperson asked what the requirements were for becoming a probation officer.

When doing oversight work, the Chairperson found that older persons did not want to go to hospitals as they feared forfeiting their grants. He asked for clarity on this matter.

Ms Semple asked why substance abuse training had been provided to only 7 provinces, and why the Central Drug Authority had not provided an Annual Report.

She asked what had happened to the people in Bushbuckridge after a visit was paid to that area by the Committee when it had taken “Parliament to the People”.

Mr Schippers asked if there was a plan by the Department about the TIK crisis and substance abuse.

He asked if subsidies to persons at old age homes included old age pensions.

Mr Schippers asked if the Early Childhood Development (ECD) sites in the presentation included kindergarten sites, and how many children had to be at these sites to qualify for subsidies.

The Committee agreed to call for responses to these questions at the meeting the following day.

The meeting was adjourned.

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