ATC201019: Report of the Portfolio Committee on Social Development on the Third Quarter Performance and Expenditure Report for 2019/20 of the Department of Social Development (DSD), dated 14 October 2020

Social Development

Report of the Portfolio Committee on Social Development on the Third Quarter Performance and Expenditure Report for 2019/20 of the Department of Social Development (DSD), dated 14 October 2020

 

The Portfolio Committee on Social Development (hereinafter referred to as the Committee) having examined the Third Quarter Performance and Expenditure Report for 2019/20 of the Department of Social Development (hereinafter referred to as Department) on 11 March 2020, reports as follows:

 

1.      Introduction

 

2. Mandate of the Committee

 

The Committee’s mandate as prescribed by the Constitution of South Africa and the Rules of Parliament is to build an oversight process that ensures a quality process of scrutinising and overseeing the department’s action. It is to conduct oversight that is driven by the ideal of realising a better quality of life for all people of South Africa.  The Committee is also required to facilitate public participation, monitoring and oversight over the legislative processes relating to social development. In doing this, it also confers with relevant governmental and civil society organs on social development matters.

 

The Committee also enhances and develops the capacity of its members to exercise effective oversight over the Executive Authority in social development.  It monitors whether the Department of Social Development fulfils its mandate according to priorities. 

 

It also has a mandate to perform the following:

• Considers legislation referred to it;
• Conducts oversight of any organ (s) of the state and constitutional institution(s) falling within its portfolio;
• Facilitates appointment of candidates to entities;
• Considers international agreements; and
• Considers budget of department and entities falling within its portfolio.

 

For the current medium term (2014 – 2019), the Committee’s oversight focuses on the department and its entities performance with regard to the implementation of the priorities set in the National Development Plan and in the Medium Term Strategic Framework.

 

3.     The Department of Social Development

 

3. 1 The Mandate of the Department

 

The department derives its mandate from several pieces of legislation and policies, including the White Paper for Social Welfare (1997) and the Population Policy (1998), which sets out the principles, guidelines, policies and programmes for developmental social welfare in South Africa. The White Paper for Social Welfare has provided the foundation for social welfare in the post-1994 era.

 

The Constitutional mandate of the department is to provide sector-wide national leadership in social development by developing and implementing programmes for the eradication of poverty and social protection and development amongst the poorest of the poor and most vulnerable and marginalized.

3.2 Policy priorities for 2019/20

 

The following are the strategic goals of the Department of Social Development for this relevant period:

 

• Expand Child and Youth Care Services (Isibindi programme).
• Attain Welfare Sector Reform and services to deliver better results.
• Deepen Social Assistance and extend the scope of Social Security.
• Increase access to Early Childhood Development (ECD).
• Strengthen Community Development interventions.
• Combat Substance Abuse and Gender-Based Violence.
• Increase household food & nutrition security (Food for All).
• Protect and promote of the rights of older persons and people with disabilities.
• Establish Social Protection Systems to strengthen coordination, integration, planning, and monitoring and evaluation (M&E) of services.

 

National Development Plan (NDP)

 

The abovementioned priorities are in line with the (NDP) vision 2030, which inter alia promotes social protection and is defined by:

 

• Protective measures to save lives and reduce levels of deprivation;
• Preventative measures which help people avoid falling deeper into poverty and reduce their vulnerability;
• Promotive measures which enhance the capabilities of individual communities and institutions;
• Transformative measures which tackle inequities through changes in policies, laws and budgets; and
• Developmental and generative measures, which increase the poor’s consumption by promoting local economic development.

 

 

 

 

 

 

 

 

The following key strategic themes emerged from the February and June State of the Nation Address (SONA) 2019, which have a bearing on the Department:

 

• Social security – The Department of Social Development has given effect to the Constitutional Court’s directive for phasing out the services of Cash Paymaster Services. At the time, the majority of social grant beneficiaries were successfully migrated from Cash Paymaster to the South African Post Office (SAPO). Concurrently, former social security cards were replaced with new ones.

 

• Early Childhood Development (ECD) – from 2019 the responsibility for ECD centres would migrate from Social Development to Basic Education. In addition, Government will proceed with the process towards two years of compulsory ECD for all children before they enter Grade 1.

 

• Job creation – the President highlighted the need to accelerate inclusive economic growth and create jobs. In June 2019 the President committed Government to ensuring that young people are employed in social economy jobs such as early childhood development and health care.

 

• Gender-based violence – Over the preceding year, Government focussed particular attention on violence and abuse perpetrated against women and children. As such, a Summit on Gender-based Violence and Femicide was convened, which provided a firm basis for a coordinated national response to the crisis. The Summit resulted in a road map to end gender-based violence, improve coordination of planning, and establish a commitment to resourcing and accountability. Work is underway to implement the decisions of the summit, including preparing the National Strategic Plan on Gender-Based Violence. The President further committed Government to, in partnership with civil society, work towards the implementation of decisions taken at the Summit.

 

• Substance abuse – South Africa has extremely high levels of substance abuse, which creates crime and violence against women and children; it deepens poverty and causes great adversity and pain for families.

 

4.   Overall assessment of the financial and non-financial performance information on the predetermined objectives for the third quarter (October - December) of 2019

 

4.1 Financial performance (Budget expenditure)

 

The Department was allocated an annual adjustment appropriation of R184.7 billion in the 2019/20 financial year (compared to R172.8 billion the previous year) and spent R137.6 billion for the first three quarters. For the quarter under review, the department spent R43 558 billion.

 

Of the available budget of R527.4 million for the compensation of employees, the Department spent R386.4 million or (73.3 percent). Spending was on par with the previous year (2018/19), when the Department managed to spend 73.9 percent of available funds by end of December.  However, spending in 2019/20 is about R5.9 million above the projected expenditure due to performance bonuses paid in December 2019.

 

 

 

 

 

 

 

 

 

4.1.1     Performance and expenditure per programme for third quarter of 2019/20

 

Table 1: Social Development 3rd quarter expenditure trends, 2018/19 and 2019/20

Rand (million)	2018/19			2019/20
	Available	Actual spent	% Spent	Available	Actual spent	% Spent
P1. Administration	391.7 million	264.7 million	67.6%	408.4 million	269.8 million	66.1%
P2. Social Assistance	162.9 billion	121.4 billion	74.6%	175.2 billion	130.7 billion	74.6%
P3. Social Security Policy and Administration	7.9 billion	5.8 billion	73.5%	7.7 billion	5.7 billion	74.0%
P4. Welfare Services Policy Development and Implementation Support	1.3 billion	887.8 million	68.3%	1.1 billion	601.5 million	57.0%
P5. Social Policy and Integrated Service Delivery	392.3 million	356.5 million	90.9%	413.3 million	372.1 million	90.0%

 

Programme 3 and 4 receive the bulk of the Department’s budget allocation. Hence they had the highest expenditure compared to other programmes. In the year under review they received R7.7 billion and R1.1 billion respectively. These are the Programmes that drive the key social welfare services through policy formulations and their implementation. For instance, Programme 3 has targets to draft social security policy reforms - policy on mandatory cover for retirement, disability and survivor benefits, policy paper on voluntary inclusion of informal sector workers and discussion paper on linking Child Support Grant beneficiaries with government services. Also, the bulk of this Programme’s budget, R7.6 billion goes towards Social Grants Administration sub-programme.

 

This sub-programme provides for the South African Social Security Agency’s (SASSA) operational costs for administering social grants, managing information systems and reimbursing payment contractors. Programme’s 4 largest budget allocation, R1 billion went to Children sub-programme.

 

Despite of these programmes having the highest expenditure compared to other programmes, they actually underspent when comparing their expenditure against their budget allocation. Programme 4 had the lowest expenditure of only 57%.

 

4.2 Programme Performance

 

4.2.1     Programme 1: Administration

 

The purpose of this programme is to provide leadership, management and support services to the Department and the sector.

 

Expenditure for the Administration programme totalled 66.1 percent, slightly lower than the 67.6 percent the previous year (refer to Table 1 above).  Actual expenditure is R8.2 million   lower than what was projected (R278.0 million) due to the Department taking over sub-contracts for the IT Turn Key Solution project, and will only receive invoices from the providers once certain milestones have been reached.  

 

This Programme had set a total of 4 performance targets for this quarter.  It managed to achieve two (2) targets, which was to submit the 2nd quarter Financial Statements for the 2019/2020 financial year to National Treasury on 31 October 2019.  It also tested the Accreditation Diversion Services (ADS) system was tested in Limpopo province to ensure that DSD has reliable and credible information.

 

The two targets to produce a compliance report to governance and oversight framework by entities as well as to conduct an evaluation social sector infrastructure were not achieved. The department reported it did not produce compliance report due to capacity challenges in the Entity Oversight unit. The unit was subsequently moved to the Office of the Director-General (DG) pending its proper location. With regard to the second target, the department reported that the scope of work to evaluate the social sector infrastructure had to be re-costed. 

 

1. 2: Social Assistance

 

The purpose of the programme is to transfer payments of social assistance grants to beneficiaries who qualify for social assistance in terms of the Social Security Act, 2004 (Act 13 of 2004). It provides only funding related to payments to social assistance grant beneficiaries by the South African Social Security Agency, and does not include salaries to staff.

 

The programme spent R14.6 billion lower than the approved drawings of R145.3 billion at the end of December 2019. This is mainly due to advance transfer of R14.6 billion in December 2019 for the month of January 2020. Since 1 January fell on a public holiday, funds were required in December 2019.  It is anticipated that total spending will be in line with the available budget by the end of the financial year.

 

Only 1 target was planned for this quarter for all grants, which was to transfer 100% (14 596 299) of funds to SASSA monthly. This target was achieved.

 

 

 

4.2.3 Programme 3: Social Security Policy and Administration

 

The purpose of this programme is to provide for social security policy development, administrative justice, administration of social grants and the reduction of incorrect benefits payments.

 

Expenditure by December 2019 was R10.4 million lower than the approved drawings of R5.7 billion. A total of 4 targets had been planned by the Department for this quarter. The following are the targets that were set and achieved:

 

• update the draft policy paper on mandatory cover for retirement, disability and survivor benefits with inputs from NEDLAC social partners.
• Internal consultations on the draft regulations to support the Social Assistance legislation. 

 

• The target to finalise the costing of the policy on linking child support grants to government services on possible options was not achieved.

 

4.2.4 Programme 4: Welfare Services Policy Development and Implementation Support

 

This programme creates an enabling environment for the delivery of equitable developmental welfare services through the formulation of policies, norms and standards, and best practices.

 

Expenditure on this programme declined to 57 percent by the end of the 3rd quarter in 2019/20, compared to 68.3 percent in the previous year. This was mainly due to delays in effecting transfers to non-profit organisations due to late receipt of progress reports, as well as delays in procurement processes for the awarding of tenders for specialist projects. Expenditure for the 3rd quarter was R9.7 million lower than the projected expenditure of R611.2 million.

 

During the 2019 adjusted appropriation, a total of R93 million was allocated for Gender-Based Violence in this programme. This was identified as a priority during 2019 SONA.   Three out of four key strategic themes that have emerged from 2019 SONA are located within this programme. According to the department’s APP 2019/20, a total number of (21) targets was planned this quarter and only nine (9) were achieved, indicating a very low performance. This was also reflected in the budget expenditure report earlier in this report.  

 

The following were some of the targets set for the 3rd quarter on the APP 2019/20 in this programme:

 

Sub-programme: Children’s services

 

• Participate in the Parliamentary process to approve the Children's Amendment Bill was delayed and not implemented as planned. The department reported that it is prioritizing this issue. 
• The target to capacitate four (4) provinces on the implementation of Guidelines for Community based Prevention and Early Intervention services to vulnerable children was over achieved. Capacity building sessions were done in six (6) provinces (North West, Mpumalanga, Gauteng, Free State, Eastern Cape and Limpopo).

 

Sub-programme: Social Crime Prevention and Victim Empowerment

 

• The target to obtain approval to submit to Cabinet the Draft National Drug Master Plan (NDMP) achieved. Cabinet approved the plan.
• The target to appoint a service provider to draft a revised White Paper on Families was not achieved and it will be carried over to the next quarter.
• The target to train department’s officials on the Department’s Anti- Gangsterism Strategy was achieved. Training was conducted in Limpopo.

 

Sub-programme: Rights of Persons with Disabilities

 

• The target to finalise Guidelines for District and Local Disability Inclusion Institutional Arrangements was not achieved.
• The target to have the National Frameworks on Disability Rights Awareness and Self-Representation approved was not achieved.

 

4.2.5 Programme 5: Social Policy and Integrated Service Delivery

 

This programme provides support to community development and promotes evidence-based policy-making in the Department and the social development sector.

 

By the 3rd quarter, expenditure under this programme was R372.1 million or 90.0 percent of available budget. During the previous financial year, was equally high at 90.9 percent.  Expenditure was R32.7 million was higher than the projected expenditure of R339.4 million due to the higher spending mainly due to the earlier than projected transfer of the second tranche of food relief funds. In 2018/19 higher spending was attributed to the payment of performance bonuses during December 2018.

 

Total number of targets set in this programme were 18 as per the APP (2019/20).

 

The following were some of the targets set for the 3rd quarter on the APP 2019/20 in this programme:

 

Sub-programme: Special Projects and Innovation

 

• The target to develop Provincial Business Plans in terms of Coordinate the implementation of the Expanded Public Works Programme (EPWP) Social Sector Phase 4 Plan target was not achieved.

 

Sub-programme: NPO funding coordination

 

• The target to conduct a diagnostic evaluation in one province to assess readiness towards implementation of the DSD Sector Funding Policy was achieved.
• The target to capacitate two provinces to implement DSD-NPO Partnership Model was achieved.

 

Sub-Programme: Poverty Alleviation, Sustainable Livelihoods and Food Security

 

• The target to conduct capacity building on Women Empowerment Framework in three provinces was achieved.
• The target to establish Provincial technical working group on Food and Nutrition security in three provinces was achieved.

 

5.         Committee deliberations and observations

 

• The Committee expressed a concern that the department underperformed under Programme 1, which is a critical programme of the department. The management and administration of the entire department reside under this programme. Critical targets that constitute the core mandate of the Programme were not achieved.

 

6.         Committee Resolutions

 

The Committee resolved that Members of the Committee should forward their questions and/or comments to the department in writing. The department would also forward written responses to the Committee Secretary.

 

Report to be noted