ATC200716: Report of the Portfolio Committee on Social Development on the Revised Budget Vote 19, Revised Annual Performance Plans of the Department of Social Development and its Entities for 2020/21 Dated 15 July 2020

Social Development

REPORT OF THE PORTFOLIO COMMITTEE ON SOCIAL DEVELOPMENT ON THE REVISED BUDGET VOTE 19, REVISED ANNUAL PERFORMANCE PLANS OF THE DEPARTMENT OF SOCIAL DEVELOPMENT AND ITS ENTITIES FOR 2020/21 DATED 15 July

 

The Portfolio Committee on Social Development together with the Select Committee on Health and Social Services, having considered and deliberated on the revised Budget Vote, revised Annual Performance Plans of the Department of Social Development (DSD), the South African Social Security Agency (SASSA)and the National Development Agency (NDA) on 08July 2020, wish to report as follows:

 

1.Background

 

On March 15, 2020, President Cyril Ramaphosa declared the coronavirus (COVID-19) a national disaster in terms of the Disaster Management Act (No. 57 of 2002) and implemented a number of measures and protocols aimed at prevention and mitigation of the spread of the disease.

 

On April 15, 2020, the President announced a R500 billion (equivalent to $26bn) stimulus package to deal with the devastating economic impact of COVID-19. The President indicated that funding would be sourced through the Adjustment Budget, the Unemployment Insurance Fund (UIF) and loans from multilateral institutions such as the World Bank and the International Monetary Fund (IMF).

 

On April 30, 2020, the National Treasury published a report titled “Economic Measures for COVID-19”, detailing the R500 billion response, as well as identifying the funding sources for the package. Part of the funding sources for this package is a R130 billion-baseline reprioritisation in the 2020/21 financial year. Table 1 below depicts a breakdown of the announced economic measures.

 

 

 

 

 

 

 

Table 1: COVID-19 fiscal response package

Responses	Rand Amount
Credit Guarantee Scheme	R 200 Billion
SME and Informal Business Support Job Creation	R 100 Billion
Measures for Income Support (further tax deferrals, SDL holiday and ETI extension	R 70 Billion
Support to vulnerable households for 6 months	R 50 Billion
Wage Protection (UIF)	R 40 Billion
Health & other frontline services	R 20 Billion
Support to Municipalities	R 20 Billion
Total	R 500 Billion

 

On 24 June 2020, the Minister of Finance delivered the Supplementary Budget with the primary objective to make more funding available for the response to the COVID-19 pandemic. The Money Bills Amendment Procedure and Related Matters Amendment Act (No.13 of 2018) states in Section 12(1) that the Minister may table “a national adjustments budget as envisioned in Section 30 of the Public Finance Management Act (No.1 of 1999). The Supplementary Budget seeks to fast-track processes to provide resources to frontline services, Provincial and Local Government, businesses and household, with a focus on the most vulnerable South Africans.

 

2.Implications of Covid-19 on the mandate of DSD and its entities

 

The COVID-19 pandemic required the South African Government to urgently implement measures to respond to the negative economic and social impact on the lives of citizens. The Department of Social Development as part of the social cluster of Government had to develop measures to address the social impact of the pandemic – i.e. increased levels of poverty (food insecurities), increase in Gender-based violence and Femicide (GBVF) cases, as a result of the lockdown and sheltering for homeless people. The other impact that the Department needed to respond to, even though it is economical in nature, related to loss of income particularly in the informal economy. Relief of hunger and social distress, access to healthcare, income, water and sanitation have become the key priorities of Government during this time.

 

Box 2 below indicates the levels of impact the pandemic has had on the work of the Department.

Box 2: Department Response to COVID-19

Scaling up programmes   The Department had to urgently formulate measures to scale up its programmes and services on food security, GBVF services, and the sheltering of homeless people towards the end of the 2019/20 financial year. The Department had to make available an emergency budget, despite some provincial budgets for 2019/2020 financial year having been already depleted. This has occurred during a period when sector Strategic and Annual Performance Plans (APPs), as well as the Budget for 2020/2021 financial year were yet to be approved by Parliament.   Human resources   The Department had to urgently mobilize its human resources, particularly Social Workers who were already over stretched. Further, the Department needed to secure additional funding to employ about 1 809 Social Workers on a temporary basis (for 3 months). Going forward it may be useful for the Department to consistently update and assess its database of trained Social Workers, and auxiliary workers.   The National Development Agency (NDA) and the SACSSP made human and financial resources available. An amount of R1.8 million was allocated by the NDA to partnerwith 52 Civil Society Organisations (CSOs) who provided 10 volunteers each, amounting to 520 volunteers.   The SACSSP through HWSETA partnership, mobilized R16 million for training of social service professionals (SSPs) on psycho social support interventions, disaster management, trauma counselling. The SSPs would include unemployed graduates.   Accessibility   While the South African Social Security Agency (SASSA) made significant strides in automating its processes, these were mainly targeted at automating business systems, i.e. application processes, electronic filing and reporting. The lockdown regulations required that SASSA and the Department urgently develop electronic application forms, which applicants can access from their mobile devices or internet. SASSA had already set this as its target for 2020/2021 financial year. However, these systems are introduced in a country with communities that have limited access to the internet.   Economic implications To curb the deepening loss of income, which resulted in, increased poverty and food insecurity, particularly for people in the informal economy, President Ramaphosa in April 22, 2020 announced for the provision of a six (6) month Social Relief of Distress (SRD) Grant. A total budget of R50 billion was made available for this. This provided for an increase of R300 in the Child Support Grant (CSG) for the month of May, R250 increase to other grants for a period of 6 months, and a R500 grant to Caregivers of children receiving the CSG. It also provided for an additional SRD grant of R350 a month for 6 months for the unemployed who do not receive any other form of grant or Unemployment Insurance Fund (UIF). This announcement required the Department and SASSA to develop systems and guidelines needed to implement these grants within days.

 

3.Revised budget on the overall allocations to the social development sector

 

Table 2 below indicates that only the Department of Social Development was affected by the National Treasury decision to raise an additional budget for COVID-19 related spending priorities. It should be noted that SASSA and the NDA depend on transfers from the DSD. Other Government departments saw their budget baseline reduced and programmes re-prioritised.

 

Table 2: revised budgets of the Social Development sector 2020/21

	2020/21 Main budget     Rand’ 000	Downward revisions			Reallocations
		Suspension of funds (COVID-19 purposes)	Virements from (COVID-19 purposes)	Virements from (other)	Allocated to (COVID-19 purposes)	Virements to (COVID-19 purposes)	Virements to (other)	2020/21 Total net change proposed	2020/21 Total allocation proposed
Programmes
Social Development	197 718 275	-15 481 902	-56 000	–	40 955 784	56 000	–	25 473 882	223 192 157
SASSA	7 718 421	–	–	–	–	–	–		7 718 421
NDA	230 942	–	–	–	–	–	–	–	230 952

 

 

Department of Social Development:  As can be seen on Table 2 above, there is a R15.48 billion reduction from the baseline budget from R197.72 billion to R182.24 billion. A total of R56 million was shifted as virements. However, the Department received an additional R25.5 billion from the National Treasury Supplementary Budget to fund COVID-19 spending priorities. This amount was supplemented by the R15.48 billion that was reduced from the baseline to make the total of R40 955 billion additional budget allocated for Covid19 purposes.The annual budget of the Department was, therefore, adjusted upwards to R223.19 billion for the 2020/21 financial year. The Budget for DSD shows a real increase of 8.13% when the inflation rate of 4.6% is factored.

 

South African Social Security Agency: National Treasury only approved a total of R25.5 billion towards transfers to the social assistance programme, which is administered by the Department of Social Development. SASSA did not receive any additional funding for administrative costs to implement the aforementioned Covid-19 responses. These costs had to be funded from re-prioritized funds from other economic classifications. A total of R296 183 million was reprioritized within SASSA. Compensation of employees accounted for the largest amount of R200 million, followed by Communications (R32 602 million), Medical Assessments (R28 637 million) and Travel (R16 373 million). The budget of SASSA remained unchanged at R7.7 billion.

 

National Development Agency: Being a Schedule 3A entity, as defined by the PFMA, the running of the NDA is driven principally by government grants. Therefore, the NDA is dependent on the DSD for additional funding to deal with the impact of Covid-19. The NDA did not receive any additional funding from the DSD during the supplementary budget allocations. Therefore, the budget of NDA remains the same as the budget presented in February 2020. It however, reprioritised an amount of R203 942 million from its allocated budget to fund Covid 19 spending priorities. The budget of the NDA is made up of a transfer from DSD to the value of R224.4 million (97%), interests of R2.3 million (0.1%), and R4.0 million (1.7%) from other income.

 

Economic classification expenditures of the department

Adjustments were effected to the following economic classification categories:

• Transfers and subsidies were adjusted with R40.955 billion, made up of R15. 48 from baseline reduction of R197.72 billion (April 2020) and R25.5 billion from National Treasury, (June 2020). This additional allocation is directed towards households in order to top-up for social grants for a specific period, as well as a special COVID-19 social relief of distress grant of R350.

 

• A virement to the value of R33 million was made towards compensation of employees (COE). The budget of the COE increases from R537.86 million to R570.86 million. This is to fund the hiring of 1 809 social workers to provide psychosocial services to affected people during the pandemic. The social workers will be paid a stipend of R6 000 per month for a period of three months.

 

The economic classification of expenditure of the Department of Social Development is shown in Figure 1 below:

Figure 1: Department Expenditure in terms of economic classifications. 

 

4.Department of Social Development adjusted budget allocation and annual performance targets

 

Table 3: revised annual targets of the social development sector 2020/21

Department/entity	Original targets (April 2020)	Revised/Deleted targets	Targets added	Revised targets (June 2020)
DSD	62	- 10	7	59
SASSA	34	13	8	42
NDA	19	-	-	19

 

As can be seen on Table 3 above, the Department had initially planned to achieve 62 targets but due to changes brought by the pandemic, it reduced them to 59. This means that the Department removed 10 targets from the initial planned targets at the beginning of the year.

 

Some of the key targets adjustments made per programmes of the Department include the following:

 

• Programme 1: Administration: The budget for this programme was adjusted with R10 million for COVID-19 related purposes. The budget therefore increased from R426.66 million (April 2020) to R436.66 million (June 2020).

 

Two Covid-19 related targets were added to this programme. The Department plans to develop an Electronic M&E System for the Social Sector to collect real time data that feeds into a dashboard that tracks, monitors and reports on the services during COVID-19 period and beyond. It also plans to design to conduct Three Rapid assessment studies on the implementation and utilisation of the R350 COVID-19 SRD Grant, the impact of COVID-19 lockdown on child well-being in South Africa, and social sector’s response to Food Relief Mechanisms during COVID-19.

 

Programme 2: Social Assistance:This programme was initially allocated a budget of R187.84 billion. With the revised Budget allocation, this programme received an additional R40.89 billion for the payment of the Social Relief of Distress Grant (SRD Grant). The Department through SASSA realised a saving of R15.42 billion for the month of April due to early payment of Social Grants, which was three (3) days before end of March 2020 (within the 2019/2020 financial year). With the additional R40.89 billion and R15.42 billion reductions due to savings, the net effect is an additional allocation of R25.47 million, increasing Programme 2’s budget allocation from R187.84 billion to R213.31.

The original target was to pay social grants for eligible individuals to the value of R175.1 billion. However, due to Covid-19 the amount of payment was increased to R200.6 billion. The increase is in line with Top Ups on Social Grants and the R350 Covid-19 grant. A total of R40 billion was added to augment the social grants budget.

 

Programme 3:Social Security Policy and Administration:The budget for this programme was not significantly affected by the adjustments, as it is solely responsible for policy formulation for the Social Security Development. The programme experienced a virement of R5.5 million. Therefore, the budget slightly decreased from R7.832 billion to R7.826 billion.

Eight (8) targets were originally set for this programme.As of June 2020, the targets were revised to seven (7).  Two targets were deleted and one (1) targets was added. The added target is to draft policy proposal to revise the Basic Income Grant (BIG) for unemployed people aged 18-59 years old.

 

Programme 4:Welfare Services Policy Development and Implementation    Support: The programme originally received a budget allocation of R1.25 billion for this financial year. With the adjustments effected, the allocation was revised downward with an amount of R64.5 million, which was re-allocated for Covid 19 purposes. This amount was originally allocated for the infrastructure component of the ECD Grant. The planned infrastructure upgrades were postponed for a year. This amount was therefore re-purposed to buy basic health and hygiene supplies for ECD centres.  

 

A budget of R33 million to employ the 1 809 social workers was shifted from compensation of employees. With these budget adjustments, the programme allocation slightly increases to R1.26 billion.

The net effect on the budget was an additional R5.5 billion (i.e. a suspension (reduction) of R64.5 million, which is reallocated for C-19, a virement (another reduction) of R27.5 million and another virement (addition for C-19) of 33 million)

 

This programme has a total of 25 targets (originally 26) as of June 2020. Three targets were deleted and two were added. The added targets involve facilitation of the re-opening of ECD Programme and developing a database of ECD Programmes.

 

Programme 5:Social Policy and Integrated Service Delivery:With the adjustment effected, the budget of this programme decreases by R10 million (i.e. a virements from the programme for COVID-19 purposes) from the baseline budget of R367.17 million to R357.17 million.

This programme had 20 original targets which were revised to 18, with four (4) deleted and two (2) added. The new targets are to conduct youth sexual and reproductive health and rights online advocacy campaign and to produce a research report on youth perception survey on Socio-economic, health, and gender on impact of COVID19 pandemic. 

The below table shows the targets deleted per programme:

Table 4: Deleted targets per programme

Programmes	Targets deleted
Programme 1	Monitoring and Evaluation Framework implemented was deletedand replaced with a Develop an Electronic M&E System for the Social Sector.
Programme 2	No targets deleted
Programme 3	2 Social Assistance Audits conducted, 20 Anti-fraud training sessions.
Programme 4	Second AU Report on the Rights and Welfare of the Child, ECD HR strategy for 0-4-year age cohort developed, 100 master trainers trained on Parenting Programme.
Programme 5	18 Districts capacitated on the National Food and Security Plan, Evaluation of the Youth Camp Framework, 2800 Youth participating in Youth Camps, 40% of NPOs registered within three months participate in education and awareness programmes deleted.

 

5.South African Social Security Agency (SASSA) adjusted budget allocation and annual performance targets

 

5.1 Implications of the covid-19 pandemic on the mandate of SASSA

The mandate for South African Social Security Agency (SASSA) is to ensure the provision of comprehensive social security services against vulnerability and poverty within the constitutional and legislative framework.As per this mandate, SASSA is primarily responsible for implementing the Medium Term Strategic Framework’s (2020 – 2025) Priority 3: Consolidating the Social Wage through Reliable and Quality Basic Services. It also contributes towards the achievement of the following government’s medium term outcomes:

• Reduced levels of poverty, inequality, vulnerability and social ills
• Empowered, resilient individuals, families and sustainable communities
• Functional, efficient and integrated sector

 

As an administrator of the payment of social assistance grants, SASSA had to implement the announcements made by President Cyril Ramaphosa in April for the introduction of additional R250 to the social grants (older persons grant, foster care grant, disability grant and care dependency grant), a once off R300 top up to the Child Support Grant per child for the month of May and a R500 payment to caregivers from June - October 2020. It also had to implement the announcement for a new Social Relief of Distress Grant of R350 to be paid to the unemployed people who are not benefitting from any other government provisions.

SASSA also administers the payment of the Social Relief of Distress (SRD) in the form of either food parcels or cash vouchers toprovide temporary relief to families experiencing undue hardship due disasters, fires or death of provider. The Agency had to significantly scale up the roll out of food parcels to respond to the high demand of food due to the impact of the nationwide lockdown which resulted in some workers losing their employment.

These changes necessitated for SASSA to draw up a revised budget and amend the originally tabled 2020/2021 Annual Performance Plan.

 

5.2 Overall adjusted budget

National Treasury only approved a total of R25.5 billion towards transfers to the social assistance programme which is administered by the Department of Social Development. It did not receive any additional funding for administrative costs to implementing the aforementioned Covid 19 responses. These costs had to be funded from re-prioritized funds from other economic classifications. A total of R296 183 million was reprioritized. Compensation of employees accounted for the largest amount of R200 million, followed by Communications (R32 602 million), Medical Assessments (R28 637 million) and Travel (R16 373 million).

The budget of SASSA remained unchanged at R7 718 billion.

 

5.3 Analysis of the revised annual targets of each programme

SASSA functions according to two programmes, namely, Programme 1: Administration and Programme 2: Benefits Administration and Support.A total of ten (13) out of 21 revised annual targets have been proposed to be amended and eight (8) new targets were added. Most of the proposed amendments are to reduce the percentage achievement of the targets

Programme 1: Administration

This programme provides leadership, management and support services, which constitute as sub-programmes of it. They are Executive Management, Corporate Services, Financial Management, Information and Communication Technology and Strategy and Business Development.

 

The proposed amendments mainly affected annual quarter targets whose implementation would have started from the first quarter of the financial year. This quarter coincided with the implementation of level 4 and 5 of the national lockdown. The lockdown disrupted operations and restricted movement of people, which would have been required to achieve these targets. A total of 10 targets were revised under this programme.Some of the revised targets included the below targets:

• Paying 95% instead of 100% of suppliers within 30 days,

• Reduce backlog of financial misconduct cases by 75% instead of 95%,
• Reduce current cases of financial misconduct by 50% instead of 70%,
• Conclude labour relation cases by 30% instead of 60%, and
• Conduct 15 instead of 20 internal audit reviews in high risk areas.

Programme 2: Benefits Administration and Support

This programme provides grant administration service and ensures that operations within SASSA are integrated. It manages the full function of grant administration from application to approval, as well as beneficiary maintenance.

 

This programme is responsible for the implementation of the core business of SASSA, that of administering the payment of social grants. It is the programme that was affected by the changes in the amounts of social grants and introduction of the SRD Grant. Accordingly, this programme has eight (8) new targets added.  They are as follows:

• Payment of COVID-19 social grants top-upfor May to October 2020 implemented for the following grant types: R300 for Child Support Grant per child, R500 per caregiver and R250 for Old Age Grant, War Veteran Grant, Dependency Grant, Foster Care Grant, Care Dependency Grant,
• Payment of COVID-19 special relief grant (R350) to all eligible applicants/beneficiaries for the period May – October 2020,
• Administrative measures undertaken to ensure all care dependency grantswhich were due to lapse between February and October 2020 remain in payment until end of October 2020,
• Administrative measures undertaken to ensure all temporary disability grants which were due to lapse between February and June 2020 remain in payment until end of October 2020,
• Electronic processing of Regulation 26A mandates (funeral deductions) implemented,
• Implementation of multiple channels for application of social relief of distress (SRD).   These include USSD, WhatsApp, Website and email,
• Introduce electronic/online application channels for social grants, and
• Development of a central database for poor households - that can be utilized by other government institutions.

Apart from the above mentioned targets, two targets originally set for this programme were removed and one was increased. SASSA removed targets to process 15% of social grant reviews as per the review policy (administrative and permanent disability reviews) and to enroll new beneficiaries biometrically. In response to the high demand of food, SASSA increased its first quarter target of awarding 50 901to 104 124 SRD applications. The annual target of awarding 250 983 SRD applications at a cost of R407 million remained unchanged.

 

6.National Development Agency adjusted budget allocation and annual performance targets

 

The Agency’s original budget of R230 942 million remained the same. However, a total of R39 million was reprioritised from the three (3) programmesto fund Covid 19 related responses, as follows:

 

• Volunteer Support Programme – R32 million
• Digitisation of CSO Development Initiatives – R2 million
• Protective Personal Equipment (PPE) and Covid 19 responses for NDA staff and offices – R5 million

The number of targets (19) were not changed. However, two (2) targets were revised under programme 2: Civil Society Organisations Development.  The adjustments include:

 

• Targets for work opportunities created has been increased due to the implementation of the Volunteer Support Programme.
• Capacity Building Programme along with other NDA programmes will be digitised and targets have been adjusted accordingly.

 

 

 

7.Committees observations

 

7.1 Budget related observations

• The joint committees noted with concern that National Treasury did not allocate additional funds for critical social welfare programmes, such Early Childhood Development Programme, Family Preservation Programmes and psychosocial support or GBVFprogrammes and anti-substance abuse programmes. Most concerning was the fact that funds had to be shifted from the budget initially allocatedfor ECD infrastructure upgrades to purchase Covid-19 essential supplies for ECD centres.

 

• The joint committees also noted with concern that SASSA did not receive additional budget for administrative costs even though it had to implement additional payments to social grants and develop new information technology platforms to implement SRD Grant. There is also a shortfall in the budget that was allocated for SRD payments because of the high demand for the grant. 

 

• The joint committees further noted that there is need for the national and provincial departments to account to Parliament on their expenditure on the funds allocated for GBVF programmes.
  1. Performance related observations
• The joint committees have repeatedly implored the Department and its entities that theyneed to regain the trust of the South African public and improve their image through efficiency in delivering their services to the public.

 

• The joint committees reiterated theirconcern over the challenges that continue to be experienced in the processing of the Social Relief of Distress Grant applications. These include the high backlog of applications, delays in responses to applications and payments to those approved, high number of declined applications, confusion created by SASSA’s responses to applicants and overcrowding at SASSA offices. A lot of people, especially in the rural areas do not have electronic devices to apply for the grant. They rely on in-person applications at SASSA offices which run at limited staff complement.

 

• The joint committees noted with concern that the department’s Annual Performance Plan did not include targets on the employment of additional 1 809 social workers.

 

• The committees also noted with concern that the target to train and capacitate 500 social workers was revised to 180 social workers when there is a high need of social work services. It wanted to know what plan the department has put in place to ensure that all social workers are capacitated. 

 

• The committees were further concerned over the department vacancies at critical posts when government is preparing for budget adjustments in October 2020 through the Medium Term Budget Policy Statement (MTBPS). The department’s APP did not include targets on the filling of vacant posts.

 

8.Recommendations

 

Having considered the revised annual performance plans and budgets of the Department and entities, the committees made the following recommendations:

 

• SRD Grant Backlogs: The Minister should ensure that SASSA clears the backlog of outstanding Covid-19 SRD payments.

 

• SRD grant review mechanism: The Minister should ensure that SASSA and the Department strengthen their follow up and review processes.

 

• Food parcels: The Minister should ensure that the Department and SASSA speed up process to move from food parcels to cash vouchers.

 

 

• SRD Grant funding: The Minister should ensure that the Department in collaboration with SASSA urgently initiate a process of engaging with National Treasury and the Presidency with regard to additional funding to cover the shortfall.

 

• Post-lockdown: The Minister should ensure that the Department develops concrete strategies on how it will continue to assist people after the interim three months’ assistance has lapsed, especially in rural communities.

 

• Human resources: The Minister should ensure that the Department finds mechanisms of retaining the temporary hired Social Workers, and recruiting more Social Workers.

 

• The scourge of violence: The Minister should ensure that the Department inits annual performance and strategic plans clearly set out targets aimed at addressing GBVF and, violence and murder of children. The targets should be in line with the provisions of the National Strategic Plan on Gender Based Violence and Femicide. The Department should engage with the Presidency and National Treasury on how more funding can be allocated to address GBVF and violence and murder of children, substance abuse and family preservation programmes.

 

• ECD support: The Minister should ensure that theDepartment provides the necessary support to ECD centres and ensure that they comply to COVID-19 safety regulations.

 

• Governance and accountability: The Minister should ensure that there is strengthened governance and accountability within the Department and with its entities.

 

• Filling of vacant posts: The Minister should ensure that the social development sector fills all the critical vacant posts.

 

• Monitoring of funds: The Minister should ensure that the Department establishes a system to monitor the use of funds that have been allocated for programmes related to poverty alleviation, homelessness, drug abuse and violence related to women and children. 

 

Report to be considered.