ATC201030:Report of the Portfolio Committee on Employment and Labour on the Third and Fourth Quarterly Reports Regarding the Performance of the Department of Employment and Labour and Its Entities in Meeting Strategic Objectives for 2019/20, Dated 28 October 2020
Employment and Labour
Report of the Portfolio Committee on EMPLOYMENT AND Labour on the THIRD AND FOURTH Quarterly ReportS regarding the Performance of the Department of EMPLOYMENT AND Labour and its entities in meeting Strategic Objectives for 2019/20, dateD 28 OCTOBER 2020
The Portfolio Committee on Employment and Labour, having considered the Third and Fourth Quarterly Report (October to December 2019 and January to March 2020) on the performance of the Department of Employment and Labour (DEL) and its entities in meeting strategic objectives for 2019/20, reports as follows:
- INTRODUCTION
The Portfolio Committee on Employment and Labour considered the Third and Fourth Quarterly Reports on the performance of the Department of Employment and Labour and its entities in meeting strategic objectives for 2019/20 as presented in the meetings held on 19, 26 August and 2 September 2020. Commission for Conciliation, Mediation and Arbitration; Productivity SA; and National Economic Development and Labour Council presented on 19 August 2020. Compensation Fund and Unemployment Insurance Fund presented on 26 August 2020. The Department of Employment and Labour presented on 2 September 2020.
This report provides an overview of the presentations, focusing mainly on achievements, output in respect of performance indicators against targets set for 2019/20 financial year as well as financial performance report. The report also provides the Committee’s observations and recommendations relating to the performance of the Department and its entities.
- DEPARTMENT OF EMPLOYMENT AND LABOUR
The Department of Employment and Labour (DEL) presented its non-financial performance per strategic objectives as well as per programme.
2.1. Non-Financial Performance of the Department per Strategic Objective in Q3
The non-financial performance of the DEL per strategic objectives in Q3 is reflected in the table below.
Table 1: DEL Performance per Strategic Objective in Q3 of 2019/20
|
STRATEGIC OBJECTIVES |
Planned Indicators |
Indicators with Q3 Targets |
Achieved |
Overall Achievement |
|
|
1 |
STRENGTHEN OCCUPATIONAL SAFETY |
This strategic objective is covered under indicators that are applicable to protecting vulnerable workers |
|||
|
2 |
PROMOTE EQUALITY IN THE ABOUR MARKET |
1 |
0 |
0 |
- |
|
3 |
PROTECTING VULNERABLE WORKERS |
5 |
4 |
4 |
100% |
|
4 |
STRENGTHEN MULTILATERAL AND BILATERAL RELATIONS |
1 |
1 |
1 |
100% |
|
5 |
CONTRIBUTE TO EMPLOYMENT CREATION |
4 |
4 |
4 |
100% |
|
6 |
PROMOTING SOUND LABOUR RELATIONS |
3 |
3 |
2 |
67% |
|
7 |
MONITORING THE IMPACT OF LEGISLATION |
2 |
1 |
0 |
0% |
|
8 |
STRENGTHEN THE INSTITUTIONAL CAPACITY OF THE DEPARTMENT |
3 |
3 |
3 |
100% |
|
OVERALL PERFORMANCE |
19 |
16 |
14 |
88% |
|
Source: Presentation to the Portfolio Committee on Employment and Labour dated 2 September 2020
The Department achieved 14 of the 16 indicators reporting in Q3, translating to an overall performance of 88%. It achieved two of the three indicators reporting in Q3 under Strategic Objective 6, translating to an overall achievement of 67%.
The Department did not achieve two indicators reporting in Q3 under Strategic Objective 7, translating to an overall achievement of 0% under this strategic objective. It achieved 100% in all other strategic objectives.
2.2. Non-Financial Performance of the Department per Strategic Objective in Q4
DEL non-financial performance per strategic objectives in Q4 is reflected in the table below.
Table 2: Performance of the Department per Strategic Objective in Q4
|
STRATEGIC OBJECTIVES |
Planned Indicators |
Indicators with Q4 Targets |
Achieved |
Overall Achievement |
|
|
1 |
STRENGTHEN OCCUPATIONAL SAFETY |
This strategic objective is covered under indicators that are applicable to protecting vulnerable workers |
|||
|
2 |
PROMOTE EQUALITY IN THE LABOUR MARKET |
1 |
1 |
1 |
100% |
|
3 |
PROTECTING VULNERABLE WORKERS |
5 |
5 |
4 |
80% |
|
4 |
STRENGTHE MULTILATERAL AND BILATERAL RELATIONS |
1 |
1 |
1 |
100% |
|
5 |
CONTRIBUTE TO EMPLOYMENT CREATION |
4 |
4 |
4 |
100% |
|
6 |
PROMTING SOUND LABOUR RELATIONS |
3 |
3 |
3 |
100% |
|
7 |
MONITORING THE IMPACT OF LEGISLATION |
2 |
2 |
1 |
50% |
|
8 |
STRENGTHEN THE INSTITUTIONAL CAPACITY OF THE DEPARTMENT |
3 |
3 |
3 |
100% |
|
OVERALL PERFORMANCE |
19 |
19 |
17 |
89% |
|
Source: Presentation to the Portfolio Committee on Employment and Labour dated 2 September 2020
The overall performance of the Department improved from 88% in Q3 to 89% in Q4. The Department achieved 17 of the 19 indicators reporting in Q4, translating to an overall performance of 89%.
Four of the five indicators reporting under Strategic Objective 3 were achieved, translating to an overall achievement of 80% under this strategic objective.
Monitoring the impact of legislation objective achieved one of the two indicators in Q3, translating to an overall achievement of 50%. The Department achieved 100% on the other strategic objectives.
2.3. Non-Financial Performance per Programme in Q3
The overall performance per programme in Q3 was reported as follows:
Table 3: DEL Performance per Programme in Q3 of 2019/20
|
BRANCH |
Annual Planned Indicators |
Indicators with Q3 Targets |
Achieved |
Overall Achievement % |
|
|
1 |
ADMINISTRATION |
3 |
3 |
3 |
100% |
|
2 |
IINSPECTION AND ENFORCEMENT SERVICES |
4 |
4 |
4 |
100% |
|
3 |
PUBLIC EMPLOYMENT SERVICES |
4 |
4 |
4 |
100% |
|
4 |
LABOUR RELATIONS AND INDUSTRIAL RELATIONS |
8 |
5 |
3 |
60% |
|
OVERALL PERFORMANCE |
19 |
16 |
14 |
88% |
|
Source: Presentation to the Portfolio Committee on Employment and Labour dated 2 September 2020
The Department achieved 14 of the 16 indicators reporting in Q3, translating to an overall achievement of 88%.
Programme 4 was the only one that did not achieve all its targets. Instead, it achieved three of the five indicators reporting in Q3, translating to an overall achievement of 60% on this programme.
2.4. Non-Financial Performance per Programme in Q4
DEL non-financial performance per programme in Q4 is outlined in the table below.
Table 4: DEL Non-financial performance per programme in Q4
|
BRANCH |
Annual Planned Indicators |
Indicators with Q4 Targets |
Achieved |
Overall Achievement % |
|
|
1 |
ADMINISTRATION |
3 |
3 |
3 |
100% |
|
2 |
IINSPECTION AND ENFORCEMENT SERVICES |
4 |
4 |
4 |
100% |
|
3 |
PUBLIC EMPLOYMENT SERVICES |
4 |
4 |
4 |
100% |
|
4 |
LABOUR RELATIONS AND INDUSTRIAL RELATIONS |
8 |
8 |
6 |
75% |
|
OVERALL PERFORMANCE |
19 |
19 |
14 |
89% |
|
Source: Presentation to the Portfolio Committee on Employment and Labour dated 2 September 2020
The overall performance of the Department improved from 88% in Q3 to 89% in Q4. This was as result of improvement in achievement of Programme 4 from 60% in Q3 to 75% in Q4. The other three programmes maintained overall achievement of 100% in Q4.
2.5. Non-Financial Programme Performance of DEL in Q3 and Q4 of 2019/20
2.5.1. Administration
The purpose of the Administration programme is to provide strategic leadership, management and support services to the Department.
The Administration programme comprise the following sub-programmes: Ministry; Office of the Director-General; Office of the Chief Operations Officer; Corporate Services; and Office of the Chief Financial Officer. Corporate Services includes: Human Resource Management, Internal Audit, Risk management, Security Services, Communication, Legal Services and Office of the Chief Information Officer.
The Department reported an average vacancy rate of 6.4% in Q3 and 12.75% in Q4. The increase in the vacancy rate from Q3 to Q4 was reported to be due to creation of 500 new OHS inspector posts that were approved during Q4.
Irregular expenditure amounted to R460 559 with fruitless and wasteful expenditure totaling R251 098. The majority of this was reported to be due to damages incurred to vehicles as a result of accidents and no-shows at booked accommodations. A total of R718 343 was recovered in debts owed to the State.
In Q4 the Department became aware of fraud potentially amounting to R2.5 million. This was reported to be as a result of payment of fraudulent invoices for EHWP services that were not delivered. A forensic auditor was appointed and an interim report has been received. A criminal case will be opened once the final report is received and where indicated, consequence management will follow.
A total of 372 misconduct cases were opened during the quarters under review. Of these cases, 161 were for non-disclosure of financial interests, 60 for damage to state vehicles and 40 for dereliction of duties.
2.5.2. Inspection and Enforcement Services (IES)
The purpose of the IES programme is to realise decent work by regulating non-employment conditions through inspections and enforcement, to achieve compliance with all labour market policies.
The programme consists of the following sub-programmes: Management and Support Services; Occupational Health and Safety; Registration: IES; Compliance, Monitoring and Enforcement Services; Training of Staff: IES; and Statutory and Advocacy Services.
By Q4 227 990 inspections were carried out by the Inspectorate. Of these inspections, 3 785 were EEA inspections and 166 388 were BCEA/NMW inspections. The four sectors with the highest non-compliance of BCEA are Wholesale and Retail; Community; Manufacturing; and Hospitality. A total of 1 673 employers were referred for prosecution due to non-compliance to the NMW. An amount of R145 161 507 was recovered in underpaid NMW wages and paid over to workers.
2.5.3. Public Employment Services (PES)
The purpose of this programme is to provide assistance to companies and workers to adjust to changing labour market conditions and to regulate private employment agencies.
This programme comprise the following sub-programmes: Management and Support Services; Employer Services; Work-Seeker Services; and Designated Groups Special Services. The programme has oversight over the following entities: Supported Employment Enterprises; Productivity South Africa; Unemployment Insurance Fund; and Compensation Fund.
A total of 456 162 work seekers were registered by PES during the two quarters under review. A total of 466 315 work seekers were prepared for the world of work through employment counselling. A total of 108 521 or 24% were placed in employment/ learning opportunities of which 76 575 or 71% were youth. The placements were as follows: 49% in formal jobs, 28% in projects, 16% in UIF LAP and 7% in learnerships.
SEE did not achieve the target of placing more PWD in employment at the factories. This is the result of the entity not receiving sufficient new contracts that warrant the employment of additional staff. The entity continues to struggle financially as government departments continue to fail to place orders with the entity.
2.5.4. Labour Policy and Industrial Relations (LP & IR)
The purpose of this programme is to facilitate the establishment of an equitable and sound labour relations environment and the promotion of South Africa’s interests in international labour matters through research, analysis and evaluating labour policy, and providing statistical data on the labour market, including providing support to institutions that promote social dialogue.
This programme consists of the following sub-programmes and entities: Management and Support Services; Strengthen Civil Society; Collective Bargaining; Employment Equity; Employment Standards; Commission for Conciliation, Mediation and Arbitration (CCMA); Research, Policy and Planning; Labour market Information and Statistics; International Labour Matters; and National Economic Development and Labour Council (NEDLAC).
This programme experienced challenges in its research unit as well as delays in the research done for the NMW that had to be announced in January 2020. This was caused by the delayed publication of the Quarterly Labour Force Survey that forms the basis for the determination of the NMW.
2.6. Financial Report
2.6.1. DEL Financial Performance per programme in Q3 of 2019/20
DEL reported its financial performance per programme in Q3 as reflected in table 5 below.
Table 5: DEL Expenditure Information per programme in Q3
|
BRANCH |
Q3 BUDGET |
Q3 EXPENDITURE |
VARIANCE |
EXPENDITURE % IN Q3 |
|
|
R’000 |
R’000 |
R’000 |
% |
||
|
1. |
ADMINISTRATION |
237 362 |
201 515 |
35 847 |
85% |
|
2. |
INSPECTION AND ENFORCEMENT SERVICES |
173 043 |
145 060 |
27 983 |
84% |
|
3. |
PUBLIC EMPLOYMENT SERVICES |
161 483 |
160 906 |
577 |
100% |
|
4. |
LABOUR POLICY AND INDUSTRIAL RELATIONS |
340 142 |
322 621 |
17 521 |
95% |
|
TOTAL |
912 030 |
830 103 |
81 927 |
91% |
|
Source: Presentation to the PC: Employment and Labour dated 2 September 2020
The Department spent R830.1 million or 91% of the R912.0 million Q3 budget, resulting to a variance of R81.9 million.
The Labour Policy and Industrial Relations programme received the highest budget allocation of R340.1 million and spent R322.6 million or 95% of the allocation by the end of Q3, resulting to a variance of R17.5 million.
The Administration programme received the second highest allocation of R237.4 million and spent R201.5 or 85% of its budget by the end of Q3, resulting to a variance of R35.8 million.
The Inspection and Enforcement Services spent R145.0 million or 84% of the R173.0 million Q3 budget, resulting to under-expenditure of R27.98 million.
Public Employment Services programme received a budget of R161.5 million in Q3 and spent R160.9 million or almost 100% by the end of the quarter, resulting to a variance of R577 000.
2.6.2. DEL Financial Performance per Programme in Q4
DEL financial performance per programme is reflected in the table below.
Table 6: DEL Expenditure Information per Programme in Q4
|
BRANCH |
Q4 BUDGET |
Q4 EXPENDITURE |
VARIANCE |
EXPENDITURE % IN Q4 |
|
|
R’000 |
R’000 |
R’000 |
% |
||
|
1. |
ADMINISTRATION |
253 593 |
273 251 |
(19 658) |
108% |
|
2. |
INSPECTION AND ENFORCEMENT SERVICES |
187 187 |
147 550 |
39 637 |
79% |
|
3. |
PUBLIC EMPLOYMENT SERVICES |
138 103 |
158 908 |
(20 805) |
115% |
|
4. |
LABOUR POLICY AND INDUSTRIAL RELATIONS |
284 417 |
276 436 |
7 981 |
97% |
|
TOTAL |
863 300 |
856 145 |
7 155 |
99% |
|
Source: Presentation to the PC: Employment and Labour dated 2 September 2020
Of the R863.3 million budget allocated for Q4, R856.1 million or 99% was spent by the end of the quarter, resulting to a variance of R7.2 million.
Programme 4 received the highest programme allocation of R284.4 million and spent R276.4 million or 97% of the budget by the end of Q4, resulting to a variance of R7.98 million.
Programme 1 received the second highest allocation of R253.6 million and it overspent it by R19.7 million or 8%.
Programme 2 received a budget of R187.2 million and spent R147.6 or 79% by the end of Q4, resulting to underspending by R39.6 million.
Programme 3 received a budget of R138.1 million and overspent it by R20.8 million or 15%.
- Commission for Conciliation, Mediation and Arbitration
CCMA reported on its non-financial and financial performance per strategic objectives as well as per programmes
3.1. CCMA Non-Financial Performance per Strategic Objective in Q3
CCMA reported on its Q3 performance per strategic objective as follows:
Table 7: CCMA Non-Financial Performance per Strategic Objectives in Q3 of 2019/20
|
STRATEGIC OBJECTIVES |
PLANNED Q3 TARGETS |
ACTUAL ACHIEVEMENT |
DEVIATION |
OVERALL ACHIEVEMENT |
|
|
1. |
ENHANCING THE LABOUR MARKET TO ADVANCE STABILITY AND GROWTH |
2 |
0 |
2 |
0% |
|
2. |
ADVANCING GOOD PRACTICES AT WORK AND TRANSFORMING WORKPLACE RELATIONS |
0 |
0 |
0 |
- |
|
3. |
BUILDING KNOWLEDGE AND SKILLS |
1 |
1 |
0 |
100% |
|
4. |
OPTIMISING THE ORGANISATION |
4 |
2 |
2 |
50% |
|
OVERALL PERFORMANCE |
7 |
3 |
4 |
43% |
|
Source: Presentation to the PC on Employment and Labour dated 19 August 2020
CCMA delivered seven capacity building interventions on effective negotiation skills covering aspects of the COGP and the Accord to strategically identified users against the target of nine. Non-achievement on this target was attributed to users (NEHAWU and Clinix Health Group Management) requesting a postponement due to early December shut down. These capacity building interventions have been rescheduled for the fourth quarter of the 2019/20 financial year to ensure that the annual target is met.
The entity delivered one capacity building intervention covering aspects of the COGP and the Accord to a Bargaining Council and/or Private Agency against a target of two. Non-achievement on this target was attributed to that the Transnet Bargaining Council session was postponed. This session was rescheduled for delivery in February 2020.
CCMA conciliated 98.9% (108 029 out of 109 253) of all cases at first event within 30 days of the date of receipt of the referral against a target of 100%. Non-achievement on this target was attributed to human error by administrative staff (Case Management Officers) scheduling pre-conciliations outside of the 30 days and sending awards late to parties.
The entity sent to parties 99.7% (17 959 out of 18 009) of arbitration awards rendered within 14 days of the conclusion of the arbitration proceedings (this excludes extensions granted and heads of arguments filed). Non-achievement on this was attributed to human error by administrative staff (Case Management Officers) scheduling pre-conciliations outside of the 30 days and sending awards late to parties.
3.2. CCMA Non-Financial Performance per Strategic Objective in Q4
CCMA reported on its Q4 Performance per Strategic Objective as follows:
Table 8: CCMA Non-Financial Performance per Strategic Objective in Q4 of 2019/20
|
STRATEGIC OBJECTIVE |
PLANNED Q4 TARGET |
ACTUAL ACHIEVEMENT |
DEVIATION |
OVERALL ACHIEVEMENT |
|
|
1. |
ENHANCING THE LABOUR MARKET TO ADVANCE STABILITY AND GROWTH |
5 |
5 |
0 |
100% |
|
2. |
ADVANCING GOOD PRACTICES AT WORK AND TRANSFORMING WORKPLACE RELATIONS |
5 |
4 |
1 |
80% |
|
3. |
BUILDING KNOWLEDGE AND SKILLS |
1 |
1 |
0 |
100% |
|
4. |
OPTIMISING THE ORGANISATION |
8 |
4 |
4 |
50% |
|
OVERALL PERFORMANCE |
19 |
14 |
5 |
74% |
|
Source: Presentation to the PC on Employment and Labour dated 19 August 2020
CCMA did not assess performance on the target of delivering 12 transformation of workplace relations projects to targeted users. The reason was that there was a challenge in obtaining the signed close-out reports from the regions to finalise these projects from all the workplace role players across the twelve regions due to the national Covid19 lockdown.
The entity conciliated 98.75% (145 611 out of 147 455) of all cases at first event within 30 days of the date of receipt of the referral (this excludes agreed extensions) against a target of 100%. Non-achievement on this target was attributed to failure by administrative staff to schedule matters to be heard within 30 days’ time frame and the manner in which the technical indicator was drafted did not take into consideration aspects such as the issuing of certificates.
CCMA sent 99.78% (23 585 out of 23 638) of arbitration awards rendered to parties within 14 days of the conclusion of the arbitration proceedings (this excludes extensions granted and heads of arguments filed) against a target of 100%. Non-achievement of this target was attributed to the failure of Commissioners to render the awards within 10 days after the finalization of matters and administrative errors in not sending out awards within 14 days’ time frame.
The entity did not investigate all of section 71 of the LRA cases within 21 days after the notice was published due to failure to take operational practices into consideration in drafting this target.
CCMA monitored one Essential Service Designation, Minimum Services Agreement, Minimum Service Determinations and/or Maintenance Services Determinations for compliance and observance against a target of two. Non-achievement of this target was attributed to the rising Covid19 pandemic in SA when although attempts were made to conduct a Monitoring and Evaluation Exercise at the University of South Africa, the target could not be achieved.
3.3. CCMA Financial Performance per Strategic Objective in Q3
CCMA reported its financial performance per strategic objective in Q3 as follows:
Table 9: CCMA Financial Performance per Strategic Objective in Q3
|
STRATEGIC OBJECTIVE |
BUDGET |
ACTUAL |
VARIANCE |
ACTUAL |
VARIANCE |
|
|
R’ 000 |
R’000 |
R’000 |
% |
% |
||
|
1. |
ENHANCING THE LABOUR MARKET TO ADVANCE STABILITY AND GROWTH |
9 909 |
8 629 |
1 280 |
87.1% |
12.9% |
|
2. |
ADVANCING GOOD PRACTICES AT WORK AND TRANSFORMING WORKPLACE RELATIONS |
9 996 |
7 600 |
2 396 |
76.0% |
24.0% |
|
3. |
BUILDING KNOWLEDGE AND SKILLS |
19 134 |
16 891 |
2 243 |
88.3% |
11.7% |
|
4. |
OPTIMISING THE ORGANISATION |
754 996 |
768 373 |
(13 377) |
(101.8%) |
(1.8%) |
|
TOTAL |
794 035 |
801 493 |
(7 458) |
100.9% |
0.9% |
|
Source: Presentation to the PC on Employment and Labour dated 19 August 2020
CCMA total expenditure in Q3 was R801.5 million or 100.9% against the budget of R794.0 million, resulting to an over-expenditure of R7.5 million or 0.9%.
CCMA spent R8.6 million or 87.1% of the allocated R9.9 million for Strategic Objective 1. This resulted in under-expenditure of R1.3 million or 12.9% of the budget allocated for this strategic objective. The under-expenditure was reported to be as a result of timing difference in appointment of the ESU manager as well as the case disbursement costs related to the Employment Security activities which are as and when. The other contributing factor result from the factor intervention training and international travel costs that were planned for but were not incurred as anticipated.
The entity spent R7.6 million or 76% of the R9.9 million allocated for Strategic Objective 2, resulting to an under-expenditure of R2.4 million or 24% of the allocated budget. The under-expenditure was reported to have resulted from unfilled vacancies as well as less utilization of part-time commissioners for mediation activities. The other contributing factor is due to savings related to the advocacy of National Minimum Wage that was planned for but not occurred as planned.
CCMA spent R16.9 million or 88.3% of the R19.1 million allocated for Strategic Objective 3, resulting to a variance of R2.2 million or 11.7% of the allocation. The variance was reported to have resulted from training and training materials costs that were planned for but not utilized as anticipated due to less numbers of estimated training interventions conducted. The other contributing factor was reported to be due to the implementation of cost containment measures on items such as catering, travelling and accommodation costs.
The entity spent R768.4 million or 101.8% against the R754.9 million allocated for Strategic Objective 4, resulting to an over-expenditure of R13.4 million or 1.8% of the budget allocation. The variance was reported to have resulted from utilization of private commissioners which was 4% more than the set target efficiency of 60% as well as the travel costs incurred by the commissioners in executing cases at the outlying areas. The other contributing factor is due to underestimated depreciation as a result of new acquisitions of assets.
3.4. CCMA Financial Performance per Programme in Q3
CCMA financial performance per programme in Q3 is outlined below.
Table 10: Financial Performance per Programme in Q3
|
PROGRAMME |
BUDGET |
ACTUALS |
VARIANCE |
ACTUALS |
VARIANCE |
|
|
R’000 |
R’000 |
R’000 |
% |
% |
||
|
1. |
ADMINISTRATION |
287 419 |
281 097 |
6 322 |
97.8% |
2.2% |
|
2. |
INSTITUTION DEVELOPMENT |
25 347 |
21 317 |
4 030 |
84.1% |
15.9% |
|
3. |
CORPORATE GOVERNANCE |
7 152 |
4 518 |
2 634 |
63.2% |
36.8% |
|
4. |
SOCIAL SERVICES |
474 118 |
494 560 |
(20 442) |
(104.3) |
(4.3%) |
|
TOTAL |
794 036 |
801 493 |
(7 458) |
|
|
|
Source: Presentation to the PC on Employment and Labour dated 19 August 2020
The Social Services programme received the highest budget allocation of R474.1 million. This programme overspent its budget by R20.4 million or 4.3% of the programme budget by the end of Q3. The over-expenditure was reported to be a result of using part-time commissioners, which is 3% higher than the projected efficiency of 60%, as well as the increase in variable case disbursement costs such as venue and travelling costs, in response to case load.
The Administration programme received the second highest budget allocation of R287.4 million and it spent R281.1 million or 97.8% by the end of Q3, resulting to under-expenditure of R6.2 million or 2.2% of the programme budget. The under-expenditure was reported to have resulted from the unfilled vacancies as well as the under expenditure relating to procurement of the Library App, delay in service level agreement for the disaster recovery solution, implementation of the costs containment measures related to travelling and utilization of the communication expenses. The other contributing factor was reported to be related to the provision for the audit strategy and fraud risk assessment planned for, which will be utilized in Q4.
The Institute Development programme spent R21.3 million or 84.1 % of the allocated R25.3 million by the end of Q3, resulting to an under-expenditure of R4.0 million or 15.9% of the allocated budget. The variance was reported to have resulted from training and bursary costs that were planned for but not utilized as anticipated due to lower number of applicants for bursaries.
The Corporate Governance programme spent R4.5 million or 63.2% of the allocated R7.2 million by the end of Q3, resulting to under-expenditure of R2.6 million or 36.8% of the allocated budget. The variance was reported to have resulted from under-expenditure on board fees and training for Board Committees.
3.5. CCMA Financial Performance by Economic Classification in Q3
Table 11: CCMA Financial Performance by Economic Classification in Q3
|
ITEM |
BUDGET |
ACTUALS |
VARIANCE |
ACTUALS |
VARIANCE |
|
|
R’000 |
R’000 |
R’000 |
% |
% |
||
|
1. |
COMPENSATION OF EMPLOYEES |
409 124 |
399 282 |
9 842 |
97.6% |
2.4% |
|
2. |
TRANSFER PAYMENTS |
3 834 |
3 386 |
448 |
88.3% |
11.7% |
|
3. |
GOODS AND SERVICES |
381 077 |
398 825 |
(17 748) |
(104.7%) |
(4.7%) |
|
TOTAL EXPENDITURE |
794 035 |
801 493 |
(7 458) |
(100.9%) |
(0.9%) |
|
Source: Presentation to the PC on Employment and Labour dated 19 August 2020
Compensation of Employees received a budget of R409.1 million and spent R399.3 million or 97.6% of the allocation by the end of Q3, resulting in the under-expenditure of R9.8 million or 2.4% of the item budget. The expenditure on this item was in line with the projection. Employee related costs were less than the projected cost by R9.8 million or 2.4% due to vacancies on the approved structure not filled.
Transfer Payments received an allocation of R3.8 million and spent R3.4 million or 88.3% of the allocation by the end of Q3, resulting to an under-expenditure of R448 000 or 11.7% of the budget allocation. The reason for under-expenditure on this item was reported to be that bargaining councils’ subsidies paid during the year were less than budgeted for by R448 000 or 11.7% of the budget due to case load resulting in less claims being submitted from the councils for reimbursement.
Goods and Services received a budget of R381.1 million and spent R398.1 million or 104.7% by the end of Q3, resulting to an over-expenditure of 4.7% of the item budget. The variance was reported to be a result of using part-time commissioners and travel costs related to the commissioners in execution of cases to the outlying areas.
3.6. CCMA Financial Performance per Strategic Objective in Q4
Table: 12 CCMA Financial Performance per Strategic Objective in Q4
|
STRATEGIC OBJECTIVE |
BUDGET |
ACTUALS |
VARIANCE |
ACTUALS |
VARIANCE |
|
|
R’000 |
R’000 |
R’000 |
% |
% |
||
|
1. |
ENHANCING THE LABOUR MARKET TO ADVANCE STABILITY AND GROWTH |
13 190 |
10 821 |
2 369 |
82.0% |
18.0% |
|
2. |
ADVANCING GOOD PRACTICES AT WORK AND TRANSFORMING WORKPLACE RELATIONS |
14 992 |
9 576 |
5 416 |
63.9% |
36.1% |
|
3. |
BUILDING KNOWLEDGE AND SKILLS |
29 640 |
25 436 |
4 204 |
85.8% |
14.2% |
|
4. |
OPTIMISING THE ORGANISATION |
1 003 247 |
1 007 445 |
(4 198) |
(100.4%) |
(0.4%) |
|
TOTAL |
1 061 069 |
1 053 279 |
7 791 |
|
|
|
Source: Presentation to the PC on Employment and Labour dated 19 August 2020
Strategic Objective 4 received R1.003 billion and spent R1.007 billion or 100.4% of the budget by the end of Q4, resulting to an over-expenditure of R4.2 million or 0.4% of the budget allocation. The variance was reported to be a result of utilization of part-time commissioners which was 4% more than the set target efficiency of 60% as well as the travelling costs incurred by the commissioners in executing cases in outlying areas. The other contributing factor was reported to be due to underestimated depreciation as a result of new acquisitions of assets.
Strategic Objective 3 received the second largest allocation of R29.6 million and spent R25.4 million or 85.8% by the end of Q4, resulting to an under-expenditure of R4.2 million or 14.2% of the budget allocation. The variance was reported to result from training and training materials costs that were planned for but not utilized as anticipated due to less numbers of estimated training interventions conducted. The other contributing factor was reported to be due to implementation of cost containment measures on items such as catering, travelling and accommodation costs.
Strategic Objective 2 received the third highest allocation of R14.9 million and spent R9.6 million or 63.9% of the allocation by the end of Q4, resulting to an under-expenditure of R5.4 million or 36.1% of the budget. The variance was reported to have resulted from unfilled vacancies as well as less utilization of part-time commissioners for mediation activities. The other contributing factor was reported to be due to savings related to the Advocacy of National Minimum Wage that was planned for but not incurred as planned.
Strategic Objective 1 received the least allocation of R13.2 million and spent R10.8 million or 82.0% of the budget by the end of Q4, resulting to an under-expenditure of R2.4 million or 18.0% of the allocation. The variance was reported to be a result of timing difference in appointment of the ESU manager as well as the case disbursement costs related to the Employment Security activities which are as and when. The other contributing factor was reported to be a result from the intervention training and international travel costs that were planned for but were not incurred as anticipated.
3.7. CCMA Financial Performance per Programme in Q4
Table 13: CCMA Financial Performance per Programme in Q4
|
PROGRAMME |
BUDGET |
ACTUALS |
VARIANCE |
ACTUALS |
VARIANCE |
|
|
R’000 |
R’000 |
R’000 |
% |
% |
||
|
1. |
ADMINISTRATION |
550 110 |
542 384 |
7 724 |
98.6% |
1.4% |
|
2. |
INSTITUTION DEVELOPMENT |
38 949 |
31 320 |
7 629 |
80.0% |
19.6% |
|
3. |
CORPORATE GOVERNANCE |
9 612 |
5 989 |
3 623 |
62.3% |
37.7% |
|
4. |
SOCIAL SERVICES |
462 399 |
473 584 |
(11 185) |
(102.4%) |
(2.4%) |
|
TOTAL |
1 061 070 |
1 053 279 |
7 791 |
|
|
|
Source: Presentation to the PC on Employment and Labour dated 19 August 2020
The Administration programme received a budget of R550.1 million and spent R542.4 million or 98.6% of the budget by the end of Q4, resulting to an under-expenditure of R7.7 million or 1.4% of the budget allocation. The variance was reported to have resulted from unfilled vacancies a well as under expenditure resulting from goods and services that are on demand basis and the expenditure varying from month to month.
The Social Services programme received the second highest allocation of R462.4 million and spent R473.5 million or 102.4% of the budget, resulting to an over-expenditure of R11.2 million or 2.4% of the budget. The over-expenditure was reported to be a result of utilization of part-time commissioners, which was 4% more than the set target efficiency of 60% as well as the travel costs incurred by the commissioners in executing cases in outlying areas.
The Institution Development programme received the third largest allocation of R38.9 million and spent R31.3 million or 80.0% of the allocation, resulting to an under-expenditure of R7.6 million or 19.6% of the allocation. The variance reportedly resulted from training and training materials costs that were planned for but not utilized as anticipated due to less numbers of estimated training interventions conducted. The other contributing factor was reported to be due to implementation of the cost containment measures on items such as catering, travelling and accommodation costs.
The Corporate Governance programme received the least allocation of R9.6 million and spent R5.9 million or 62.3% of the budget, resulting to an under-expenditure of R3.6 million or 37.7% of the programme allocation. The variance was reported to be a result of under-expenditure on board fees and training for the Board Committees.
3.8. CCMA Financial Performance by Economic Classification in Q4
CCMA financial performance by economic classification is reflected in table 13 below.
Table 13: CCMA Financial Performance by Economic Classification in Q4
|
ITEM |
BUDGET |
ACTUALS |
VARIANCE |
ACTUALS |
VARIANCE |
|
|
R’000 |
R’000 |
R’000 |
% |
% |
||
|
1. |
COMPENSATION OF EMPLOYEES |
557 069 |
546 669 |
10 400 |
98.1% |
1.9% |
|
2. |
TRANSFER PAYMENTS |
5 846 |
5 667 |
179 |
96.9% |
3.1% |
|
3. |
GOODS AND SERVICES |
498 155 |
500 943 |
-2 788 |
-100.6 |
-O.6% |
|
TOTAL EXPENDITURE |
1 061 070 |
1 053 279 |
7 791 |
99.3% |
0.7% |
|
Source: Presentation to the PC on Employment and Labour dated 19 August 2020
The budget allocation for Compensation of Employees amounted to R557.1 million and R546.7 million or 98.1% was spend by the end of Q4, resulting to an under-expenditure of R10.4 million or 1.9% of the item budget allocation. Expenditure on this item was in line with the projections. Employee related costs were less than the projected cost by R10.3 million or 1.9%% due to vacancies on the approved structure not filled at year-end.
Transfer Payments received a budget of R5.8 million and spent R5.7 million or 96.9% of the allocation by the end of Q4, resulting to an under-expenditure of R179 000 or 3.1% of the item budget.
Goods and Services received a budget of R498.2 million and spent R500.9 million or 100.6% of the allocation by the end of Q4, resulting to an over-expenditure of R2.8 million or 0.6% of the item allocation. Goods and Services exceeded the budget by R2.8 million due to the increased caseload. The increased caseload resulted in high utilization of part-time commissioners and other related variable costs such as travel and accommodation to enable the commissioners to hear cases referred to the CCMA.
- Productivity South Africa
Productivity SA reported its non-financial performance for Q3 and Q4 by strategic objectives and per programme. However, it reported its financial performance only by economic classification.
4.1. Productivity SA Non-Financial Performance per Strategic Objective in Q3
Productivity SA non-financial performance per strategic objective is outlined in table 14 below.
Table 14: Productivity SA Q3 Non-Financial Performance per Strategic Objective
|
STRATEGIC OBJECTIVE |
ANNUAL PLANNED INDICATORS |
Q3 PLANNED INDICATORS |
ACHIEVED |
Q3 AGGREGATE PERFORMANCE |
|
|
1. |
STRENGTHEN THE INSTITUTIONAL CAPACITY OF PRODUCTIVITY SA TO DELIVER ON ITS MANADATE AND BE FINANCIALL SUSTAINABLE |
2 |
1 |
1 |
100% |
|
2. |
TO SUPPORT GOVERNMENT PROGRAMMES AIMED AT SUSTAINABLE EMPLOYMENT AND INCOME GROWTH |
1 |
1 |
1 |
100% |
|
3. |
TO SUPPORT ENTERPRISES FACING ECONOMIC DISTRESS AND INITIATIVES AIMED AT PREVENTING JOB LOSSES |
- |
- |
- |
- |
|
4. |
GEERATION AND DISSEMINATION OF PRODUCTIVITY RELATED RESEARCH AND STATISTICS |
2 |
N/A |
N/A |
N/A |
|
5. |
TO PROMOTE A CULTURE OF PRODUCTIVITY AND COMPETITIVENESS IN THE WORKPLACE AND COMMUNITY LIFE |
2 |
2 |
2 |
100% |
|
OVERALL PERFORMANCE |
7 |
4 |
4 |
100% |
|
Source: Presentation to the PC on Employment and Labour dated 19 August 2020
The table above reflects that Productivity SA achieved all four strategic objectives indicators planned for Q3, translating to an overall performance of 100%. The entity had one target reporting in Q3 under Strategic Objective one, which was achieved. Strategic objective five had two targets reporting in Q3 and they were both achieved.
4.2. Productivity SA Non-Financial Performance per Programme in Q3
Productivity SA reported its non-financial performance per programme in Q3 as follows:
Table 15: Productivity SA Non-Financial Performance per Programme in Q3
|
PROGRAMME |
ANNUAL PLANNED INDICATORS |
Q3 PLANNED INDICATORS |
ACHIEVED |
Q3 AGGREGATE PERFORMANCE |
|
|
1. |
ADMINISTRATION (CORPORATE SERVICES) |
1 |
1 |
1 |
100% |
|
2. |
ADMINISTRATION (HRM) |
1 |
N/A |
N/A |
N/A |
|
3 |
ADMNISTRATION (MARKETING AND COMMS) |
1 |
1 |
1 |
100% |
|
4. |
PRODUCTIVITY ORGANISATIONAL SOLUTIONS & WPC |
2 |
2 |
2 |
100% |
|
5. |
TURNAROUND SOLUTIONS |
- |
- |
- |
- |
|
6. |
VALUE CHAIN COMPETITIVENESS |
2 |
N/A |
N/A |
N/A |
|
OVERALL PERFORMANCE |
7 |
4 |
4 |
100% |
|
Source: Presentation to the PC on Employment and Labour dated 19 August 2020
Table 15 above reflects that Productivity SA achieved all four programme performance indicators planned for Q3, translating to an overall performance of 100%.
Programme Performance Indicator for Corporate Services was to pay all SMEs within 30 days of receipt of statement, which was achieved.
Productivity SA hosted four productivity awards and regional milestones workshops against a target of one, thus exceeding the programme performance indicator for Marketing and Communications programme.
Programme 4 capacitated 3261 enterprises to improve productivity and business efficiency against a target of 2785. This programme also trained 142 ETD practitioners and skills development facilitators (SDF) against a target of 40.
4.3. Productivity SA Financial Performance by Economic Classification in Q3
Productivity SA reported its financial performance for Q3 by economic classification, as reflected in table 16 below.
Table 16: Productivity SA Financial Performance by Economic Classification in Q3
|
ECONOMIC CLASSIFICATION |
BUDGET |
ACTUAL |
VARIANCE |
EXPENDITURE |
|
|
R’000 |
R’000 |
R’000 |
% |
||
|
1. |
COMPENSATION OF EMPLOYEES |
60 158 |
48 810 |
11 348 |
81% |
|
2. |
GOODS AND SERVICES |
28 471 |
18 838 |
9 633 |
66% |
|
3. |
STIPENDS-IYUKISE INTERSHIP PROGRAMME |
|
20 330 |
(20 330) |
|
|
TOTAL |
88 629 |
87 978 |
651 |
99% |
|
Source: Presentation to the PC on Employment and Labour dated 19 August 2020
Productivity SA spent R87.9 million or 99% of the total budget of R88.6 million by the end of Q3, resulting to a variance of R650 000or 1% of the allocation.
Compensation of Employees item was allocated R60.2 million or 68% of the total budget of the entity. A total of R48.8 million or 81% of the allocation was spent by the end of Q3, resulting to a variance of R11.3 million or 19% of the allocation.
Goods and Services item received R28.5 million or 32% of the total budget of the entity. A total of R18.8 million or 66% of the item budget was spent by the end of Q3, resulting to a variance of R9.6 million or 34% of the allocation.
4.4. Productivity SA Non-Financial Performance per Strategic Objective in Q4
Productivity SA non-financial performance per strategic objective in Q4 is reflected in table 17 below.
Table 17: Productivity SA Non-Financial Performance per Strategic Objective in Q4
|
STRATEGIC OBJECTIVE |
ANNUAL PLANNED INDICATORS |
Q4 PLANNED INDICATORS |
ACHIEVED |
Q4 AGGREGATE PERFORMANCE |
|
|
1. |
STRENGTHEN THE INSTITUTIONAL CAPACITY OF PRODUCTIVITY SA TO DELIVER ON ITS MANDATE AND BE FINANCIALLY SUSTAINABLE |
2 |
2 |
2 |
100% |
|
2. |
TO SUPPORT GOVRNMENT PROGRAMMES AIMED AT SUSTAINABLE EMPLOYMENT AND INCOME GROWTH |
1 |
1 |
1 |
100% |
|
3. |
TO SUPPORT ENTERPRISES FACING ECONOMIC DISTRESS AND INITIATIVES AIMED AT PREVENTING JOB LOSSES |
- |
- |
- |
- |
|
4. |
GENERATION AND DISSEMINATION OF PRODUCTIVITY RELATED RESEARCH AND STATISTICS |
2 |
2 |
2 |
100% |
|
5. |
TO PROMOTE A CULTURE OF PRODUCTIVITY AND COMPETITIVENESS IN THE WORKPLACE AND COMMUNITY LIFE |
2 |
1 |
1 |
100% |
|
OVERALL PERFORMANCE |
7 |
6 |
6 |
100% |
|
Source: Presentation to the PC on Employment and Labour dated 19 August 2020
The table above reflects that Productivity SA achieved all six indicators planned for Q4, translating to an overall performance of 100%.
4.5. Productivity SA Non-Financial Performance per Programme in Q4
Table 18 below reflects non-financial performance per programme of Productivity SA in Q4.
Table 18: Productivity SA Non-Financial Performance per Programme in Q4
|
PROGRAMME |
ANNUAL PLANNED INDICATORS |
Q4 PLANNED INDICATORS |
ACHIEVED |
Q4 AGREGATE PERFORMANCE |
|
|
1. |
ADMINISTRATION (CORPORATE SERVICES) |
1 |
1 |
1 |
100% |
|
2. |
ADMINISTRATION (HRM) |
1 |
1 |
1 |
100% |
|
3. |
ADMINISTRATION (MARKETING AND COMMS) |
1 |
N/A |
N/A |
N/A |
|
4. |
PRODUCTIVITY ORGANISATIONAL SOLUTIONS & WORKPLACE CHALLENGES |
2 |
2 |
2 |
100% |
|
5. |
TURNAROUND SOLUTIONS |
- |
- |
- |
- |
|
6. |
VALUE CHAIN COMPETITIVENESS |
2 |
2 |
2 |
100% |
|
OVERALL PERFORMANCE |
7 |
6 |
6 |
100% |
|
Source: Presentation to the PC on Employment and Labour dated 19 August 2020
Table 18 above reflects that Productivity SA achieved all six programme performance indicators planned for Q4, translating to an overall performance of 100%. The Corporate Services paid all SMEs within 30 days of receipt of statements. Human Resources Management paid 82% of SMEs within days of receipt of statements against a target of 80%. Productivity Organisational Solutions programme capacitated 3686 enterprises to improve productivity and business efficiency against a target of 3100 enterprises. This programme also trained 64 ETD practitioners and SDFs against a target of 40. Value Chain Competitiveness programme produced and disseminated four research reports and publications on priority sectors. This programme also published three statistical reports on productivity and competitiveness against a target of one report.
4.6. Productivity SA Financial Performance by Economic Classification in Q4
Table 19 below reflects financial performance by economic classification in Q4.
Table 19: Productivity SA Financial Performance by Economic Classification in Q4
|
ECONOMIC CLASSIFICATION |
BUDGET |
ACTUAL |
VARIANCE |
EXPENDITURE |
|
|
R’000 |
R’000 |
R’000 |
% |
||
|
1. |
COMPENSATION OF EMPLOYEES |
63 064 |
62 035 |
1 029 |
98% |
|
2. |
GOODS AND SERVICES |
40 590 |
26 576 |
14 014 |
65% |
|
3. |
STIPEND-ITUKISE INTERNSHIP PROGRAMME |
|
29 228 |
(29 228) |
|
|
TOTAL |
103 654 |
117 839 |
(14 185) |
114% |
|
Source: Presentation to the PC on Employment and Labour dated 19 August 2020
Productivity SA spent R117.8 million against a budget of R103.7 million, which translates to overspending of 14% by the end of Q4.
Compensation of Employees item received R63.1 million or 61% of the total budget of the entity. A total of R62.0 million or 98% of this item budget was spent by the end of Q4 translating to a variance of R1.0 million.
Goods and Services received R40.6 million or 39% of the total budget of the entity. A total of R26.6 million or 65% of this item budget was spent by the end of Q4 translating to a variance of 14.0 million.
- National Economic Development and Labour Council
Nedlac reported on its non-financial performance per strategic objectives as well as per programme in both Q3 and Q4. However, it only reported on financial performance per programme in both quarters.
5.1. Nedlac Non-Financial Performance per Strategic Objectives in Q3
Table 20 below reflects Nedlac non-financial performance per programme in Q3.
Table 20: Nedlac Non-Financial Performance per Strategic Objective in Q3
|
STRATEGIC OBJECTIVES |
INDICATORS REPORTING IN Q3 |
ACHIEVED |
NOT ACHIEVED |
OVERALL ACHIEVEMENT |
|
|
1. |
EFFECTIVE GOVERNANCE AND STRATEGIC LEADERSHIP |
1 |
1 |
0 |
100% |
|
2. |
PROVISION OF EFFICIENT AND RELIABLE BACK OFFICE SUPPORT SERVICES |
1 |
1 |
0 |
100% |
|
3. |
IMPROVED FACILITIES MANAGEMENT |
1 |
1 |
0 |
100% |
|
4. |
STRENGTHENING ORGANISATIONAL CULTURE AND PERFORMANCE |
2 |
2 |
0 |
100% |
|
5. |
EFFECTIVE ENGAGEMENT ON DRAFT POLICY AND LEGISLATION WITHIN THE FRAMEWORK OF THE NEDLAC ACT, CONSTITUTION AND PROTOCOLS |
3 |
2 |
1 |
66% |
|
6. |
CONCLUDE MATTERS UNDER CONSIDERATION WIITHIN THE FRAMEWORK OF THE SECTION 77 PROTOCOL |
1 |
1 |
0 |
100% |
|
7. |
CONCLUDE MATTERS UNDER CONSIDERATION WITHIN THE FRAMEWORK OF THE NEDLAC PROTOCOL |
0 |
0 |
0 |
|
|
8. |
PROMOTE SOCIAL DIALOGUE THROUGH COMMUNICATION, INFORMATION AND CAPPACITY BUILDING |
2 |
2 |
0 |
100% |
|
9. |
COMPLIANCE WITH THE NEDLAC POLICY ON CONSTITUENCY CAPACITY BUILDING , BUDGETING AND EXPENSE |
3 |
3 |
0 |
100% |
|
OVERALL PERFORMANCE |
14 |
13 |
1 |
93% |
|
Source: Presentation to the PC on Employment and Labour dated 19 August 2020
Table 20 above reflects that two of the three indicators reporting in Q3 under strategic objective 5 were achieved, translating to an overall achievement of 66% on this objective. This is the only strategic objective where the entity did not achieve 100%. As a result, Nedlac achieved 13 of the 14 indicators, translating to an overall performance of 93%.
5.2. Nedlac Non-Financial Performance per Programme in Q3
Table 21 below reflects Nedlac non-financial performance per programme in Q3.
Table 21: Nedlac Non-Financial Performance per Programme in Q3
|
PROGRAMME |
INDICATORS REPORTING IN Q3 |
ACHIEVED |
NOT ACHIEVED |
OVERALL ACHIEVEMENT |
|
|
1. |
ADMINISTRATION |
5 |
5 |
0 |
100% |
|
2. |
CORE-OPERATIONS |
7 |
6 |
1 |
86% |
|
3. |
CONSTITUENCY CAPACITY BUILDING FUNDS |
3 |
3 |
0 |
100% |
|
OVERALL PERFORMANCE |
15 |
14 |
1 |
93% |
|
Source: Presentation to the PC on Labour dated 19 August 2020
Table 21 above reflects that Nedlac had 15 planned indicators reporting in Q3 of 2019/20 and 14 were achieved, translating to an overall performance of 93%. One target that was not achieved was the submission of the progress report on the Decent Work Country Programme (DWCP) to MANCO. The reason for missing the target was reported to be that the meeting of 28 November 2019, where the report was to be submitted was replaced by a Special Executive Committee meeting due to the urgency thereof. Nedlac reported that consequence management will be implemented for non-complying staff members.
5.3. Nedlac Non-Financial Performance per Strategic Objective in Q4
Table 22: Nedlac Non-Financial Performance per Strategic Objective in Q4
|
STRATEGIC OBJECTIVES |
INDICATORS REPORTING IN Q4 |
ACHIEVED |
NOT ACHIEVED |
OVERALL ACHIEVEMENT |
|
|
1. |
EFFECTIVE GOVERNANCE AND STRATEGIC LEADERSHIP |
1 |
1 |
0 |
100% |
|
2 |
PROVISION OF EFFECTIVE AND RELIABLE BACK OFFICE SUPPORT SERVICES |
1 |
1 |
0 |
100% |
|
3. |
IMPROVED FACILITIES MANAGEMENT |
0 |
0 |
0 |
N/A |
|
4. |
STRENGTHENING ORGANISATIONAL CULTURE AND PERFORMANCE |
2 |
1 |
1 |
50% |
|
5. |
EFFECTIVE ENGAGEMENT ON DRAFT POLICY AND LEGISLATION WITHIN THE FRAMEWORK OF THE NEDLAC ACT, CONSTITUTION AND PROTOCOLS |
7 |
6 |
1 |
86% |
|
6. |
CONCLUDE MATTERS UNDE CONSIDERATION WITHIN THE FRAMEWORK OF THE NEDLAC PROTOCOLS |
N/A |
Achieved in Q3 |
0 |
N/A |
|
7. |
PROMOTE SOCIAL DIALOGUE THROUGH COMMUNICATION, INFORMATION AND CAPACITY BUILDING |
2 |
2 |
0 |
100% |
|
8. |
COMLPIANCE WITH NEDLAC POLICY ON CONSTITUENCY CAPACITY BUILDING, BUDGETING AND EXPENSE
|
3 |
3 |
0 |
100% |
|
OVERALL PERFORMANCE |
16 |
14 |
2 |
88% |
|
Source: Presentation to the PC on Employment and Labour dated 19 August 2020
Table 22 above reflects that one of the two indicators reporting in Q4 for strategic objective 4 were achieved, translating to an overall achievement of 50% on this objective. Six of the seven performance indicators reporting in Q4 under strategic objective 5 were achieved, translating to an overall achievement of 86% on this objective. The entity achieved 14 of the 16 indicators reporting in Q4, translating to an overall achievement of 88%.
5.4. Nedlac Non-Financial Performance per Programme in Q4
Table 23 below reflects Nedlac non-financial performance per programme in Q4.
Table 23: Nedlac Non-Financial Performance per Programme in Q4
|
PROGRAMME |
INDICATORS REPORTING IN Q4 |
ACHIEVED |
NOT ACHIEVED |
OVERALL ACHIEVEMENT |
|
|
1. |
ADMINISTRATION |
4 |
3 |
1 |
75% |
|
2. |
CORE-OPERATION |
9 |
8 |
1 |
89% |
|
3. |
CONSTITUENCY CAPACITY BUILDING FUNDS |
3 |
3 |
0 |
100% |
|
OVERALL PERFORMANCE |
16 |
14 |
2 |
88% |
|
Source: Presentation to the PC on Employment and Labour dated 19 August 2020
The above table reflects that Nedlac had 16 planned performance indicators reporting in Q4 and achieved 14, translating to an overall performance of 88%.
Two targets that were not achieved were identifying 60% of developmental training courses in line with the organizational workflow assessment attended by staff and finalization of Nedlac Report on draft legislation within 6 months of being tabled at Nedlac.
The achievement of the target on training courses was reported to have depended on having the organizational workflow assessment concluded in Q2. Nedlac had initially planned that the organisational workflow assessment would be conducted by the external service provider. It was then identified that the workflow assessment needed to be aligned to the outcome of the review of Nedlac’s role and founding documents by the Governance Task Team, which had not been concluded by the end of the financial year and is still underway. The process to review the founding documents, organizational workflow assessment and staff training is to be expedited in 2020/21 financial year.
The Nedlac Report on Companies Amendment Bill could not be concluded within 6 months. This target was not achieved as due to coordination challenges encountered internally and subsequent delays during the sign-off stage of the Report.
5.5. Nedlac Financial Overview in Q3 of 2019/20 Financial Year
The table below reflects Nedlac revenue summary in Q3
Table 24: Nedlac Revenue summary in Q3
|
INCOME |
Q3 |
|
TRANSFER (RECOGNISED) |
R30 555 750 |
|
INTEREST RECEIVED |
R1 068 844 |
|
SUNDRY INCOME |
133 672 |
|
CONDITIONAL GRANT (RECOGNISED) |
2 104 670 |
|
TOTAL |
R33 862 936 |
Source: Presentation to the PC on Employment and Labour dated 19 August 2020
Table 24 above reflects that as at the end of Q3 of the 2019/20 financial year, Nedlac had recorded total income of R33 862 936, which was made up as follows:
- Grant received from Department of Employment and Labour of R30 555 750 (R10 185 250 has been received but will be recognized in Q4)
- Interest received from call account of R1 068 844
- Sundry income of R133 672
- Job summit conditional grant recognized of R2 104 670
Budgeted income was R31 149 000.
Table 25 below reflects expenditure summary in Q3
Table 25: Expenditure Summary in Q3
|
PROGRAMME |
Q3 |
|
ADMINISTRATION |
R21 242 000 |
|
CORE OPERATIONS |
R5 451 000 |
|
CAPACITY BUILDING |
R1 377 000 |
|
TOTAL |
R28 070 000 |
Source: Presentation to the PC on Employment and Labour dated 19 August 2020
Nedlac had a surplus of R5.7 million. Contributing to the surplus was the release of Job Summit deferred income and implementation of employee benefits in Q4. The cash balance as at 31 December 2019 was R27.5 million.
5.6. Nedlac Financial Overview in Q4 of 2019/20 Financial Year
Table 26 below reflects Nedlac revenue summary at Q4 of 2019/20 Financial Year
Table 26: Nedlac revenue summary in Q4
|
INCOME |
Q4 |
|
TRANSFER (RECOGNISED) |
R40 741 000 |
|
INTEREST RECEIVED |
R1 430 446 |
|
SUNDRY INCOME |
R165 861 |
|
CONDITIONAL GRANT (RECOGNISED) |
R3 574 947 |
|
TOTAL |
R45 912 254 |
Source: Presentation to the PC on Employment and Labour dated 19 August 2020
As at the end of Q4 of the 2019/20 financial year, Nedlac had recorded total income of R45 912 254, whch was made up of:
- Grant received from DEL of R40 741 000
- Interest received from call account of R1 430 446
- Sundry income of R165 861
- Job summit conditional grant recognized of R3 574 947
Table 27 below reflects Nedlac expenditure in Q4
Table 27: Nedlac Expenditure in Q4
|
EXPENSES |
Q4 |
|
EMPLOYEE RELATED COSTS |
R24 820 000 |
|
DEPRECIATION AND AMORTISATION EXPENSE |
R1 782000 |
|
GENERAL EXPENSES |
R17 344 000 |
|
TOTAL EXPENSES |
R43 946 000 |
Source: Presentation to the PC on Employment and Labour dated 19 August 2020
For Q4, Nedlac had a surplus of R1.9 million. The cash balance as at 31 March 2020 was R16.9 million.
The total employee costs amounted to R24.8 million.
Depreciation and amortization expenses amounted to R1.8 million. Depreciation is higher than budgeted due to the revision of the useful life of the assets.
- COMPENSATION FUND
6.1. Compensation Fund Non-Financial Performance per Strategic Objective in Q3
Table 28 below reflects CF non-financial performance per strategic objective in Q3.
Table 28: CF Non-Financial Performance per Strategic Objective in Q3
|
STRATEGIC OBJECTIVE |
ANNUAL PLANNED INDICATORS |
INDICATORS WITH TARGETS REPORTING IN Q3 |
ACHIEVED |
OVERALL ACHIEVEMENT |
|
|
1. |
PROVIDE AN EFFECTIVE AND EFFICIENT CLIENT ORIENTED SUPPORT SERVICES |
3 |
1 |
1 |
100% |
|
2. |
PROVIDE FASTER, RELIABLE AND ACCESSIBLE COID SERVICES BY 2020 |
6 |
5 |
3 |
60% |
|
OVERALL PERFORMANCE |
9 |
6 |
4 |
67% |
|
Source: Presentation to the PC on Employment and Labour dated 26 August 2020
The table above indicates that the Fund had one indicator reporting in Q3 for strategic objective 1, which was achieved translating to 100% overall achievement.
Strategic objective 2 had five performance indicators reporting in Q3 and three were achieved, translating to an overall achievement of 60%.
Overall, four of the six performance indicators reporting in Q3 were achieved translating to an overall performance of 67%.
6.2. Compensation Fund Non-Financial Performance per Programme in Q3
Table 29 below reflects CF non-financial performance per programme in Q3.
Table 29: CF Non-Financial Performance per Programme in Q3
|
PROGRAMME |
ANNUAL PLANNED INDICATORS |
INDICATORS WITH TARGETS REPORTING IN Q3 |
ACHIEVED |
OVERALL ACHIEVEMENT |
|
|
1. |
ADMINISTRATION |
3 |
1 |
1 |
100% |
|
2. |
COMPENSATION FOR OCCUPATIONAL INJURIES AND DISEASES SERVICES OPERATIONS |
3 |
2 |
1 |
50% |
|
3. |
MEDICAL SERVICES |
2 |
2 |
1 |
50% |
|
4. |
ORTHOTIC AND REHABILITATION |
1 |
1 |
1 |
100% |
|
OVERALL PERFORMANCE |
9 |
6 |
4 |
67% |
|
Source: Presentation to the PC on Employment and Labour dated 26 August 2020
The Compensation Fund had six targets reporting in Q3 and four were achieved, translating to an overall performance of 67%.
The table above reflects that the Administration programme achieved all its targets.
COID Services programme achieved one of the two targets translating to an overall achievement of 50%. The target that was not achieved was to pay all approved benefits within five working days. Instead, a total of R1.9 billion of the approved R2.2 billion was paid within five working days.
Medical Services programme achieved one of the two targets set for Q3, translating to an overall achievement of 50%. The target that was not achieved was to finalise 85% of medical invoices within 40 working days of receipt. Instead, a total of 337 363 or 70% of the received 487 035 medical invoices were finalized within 40 working days of receipt.
6.3. Compensation Fund Financial Performance per Programme in Q3
Table 30 below reflects CF financial performance per programme in Q3.
Table 30: CF Financial Performance per Programme in Q3
|
PROGRAMME |
APPROVED BUDGET |
EXPENDITURE |
VARIANCE |
EXPENDITURE |
|
|
R |
R |
R |
% |
||
|
1. |
ADMNISTRATION |
3 092 141 |
1 066 700 |
2 025 441 |
34% |
|
2. |
COMPENSATION FOR OCCUPATIONAL INJURIES AND DISEASES SERVICES OPERATIONS |
992 720 |
284 737 |
707 938 |
29% |
|
3. |
MEDICAL SERVICES |
3 036 432 |
1 339 217 |
1 697 215 |
44% |
|
4. |
ORTHOTIC AND REHABILITATION |
64 975 |
45 535 |
19 440 |
70% |
|
OVERALL PERFORMANCE |
7 186 267 |
2 736 189 |
4 450 078 |
38% |
|
Source: Presentation to the PC on Employment and Labour dated 26 August 2020
The table above reflects that CF spent a total of R2.7 billion or 38% of the total approved budget of R7.2 billion, resulting to a variance of R4.5 billion.
The Administration programme spent R1.1 billion or 34% of the R3.1 billion programme budget, resulting to an underspending of R2.0 billion or 66% of the allocation. However, this programme achieved 100% of its Annual Performance Plan (APP) targets planned for Q3.
Programme 2 spent R284. 7 million or 29% of the R992. 7 million budget, resulting to underspending R707. 9 million or 71% of the allocation. This programme achieved 50% of APP targets planned for Q3.
Medical Services programme spent R1.3 billion or 44% of the R3.0 billion budget, resulting to underspending of R1.7 billion or 56% of the allocation. This programme achieved 50% of APP targets planned for Q3.
Orthotic and Rehabilitation programme spent R45. 5 million or 70% of the R64. 9 million budget, resulting to underspending of R19. 4 million or 30% of the budget allocation. This programme achieved 100% of APP targets planned for Q3.
A total of R1.5 billion was paid towards benefits between 01 April 2019 and 30 December 2019. Of the total amount paid, 88% was toward Medical Benefits and 12% towards Compensation Benefits. The total amount paid towards benefits increased by 8% from R1.4 billion paid in Q3 of 2018/19 to R1.5 billion paid in Q3 of 2019/20. The net assets of the CF went down by 7% from R38.2 billion in Q3 of 2018/19 to R35.6 billion in Q3 of 2019/20.
6.4. Compensation Fund Non-Financial Performance per Programme in Q4
Table 31 below reflects CF non-financial performance per programme in Q4.
Table 31: CF Non-Financial Performance per Programme in Q4
|
PROGRAMME |
ANNUAL PLANNED INDICATORS |
INDICATORS WITH TARGETS REPORTING IN Q4 |
ACHIEVED |
OVERALL ACHIEVEMENT |
|
|
1. |
ADMINISTRATION |
3 |
3 |
1 |
33% |
|
2. |
COID SERVICES OPERATIONS |
3 |
3 |
|
0% |
|
3. |
MEDICAL SERVICES |
2 |
2 |
1 |
50% |
|
4. |
ORTHOTIC AND REHABILITATION |
1 |
1 |
1 |
100% |
|
OVERALL PERFORMANCE |
9 |
9 |
3 |
33% |
|
Source: Presentation to the PC on Employment and Labour dated 26 August 2020
Compensation Fund had nine targets reporting in Q4 and achieved three, translating to an overall performance of 33%. The Administration programme achieved one of its three targets, translating to an overall achievement of 33%. The Fund did not increase the risk management maturity level to five by 31 March 2020 as planned. Instead, the risk management maturity level was at 2.62 at the end of Q4.
The Fund did not manage to increase the investment returns by 31 March 2020. Instead the investment returns went down by 6.2% at the end of Q4.
COID Services programme paid 80% of approved benefits within five working days against the target of 100%. This programme assessed 52% of active registered employers by 31 March 2020 against the target of 95%. The programme adjudicated 83% of claims within 30 working days of receipt against the target of 90%.
Medical Services programme achieved one out of two targets planned for Q4. This programme finalized 69% of medical invoices within 40 working days of receipt against the target of 85%.
6.5. Compensation Fund Financial Performance per Programme in Q4
Table 32 below reflects CF financial performance per programme in Q4.
Table 32: CF Financial Performance per Programme in Q4
|
PROGRAMME |
BUDGET |
ACTUAL EXPENDITURE |
VARIANCE |
EXPENDITURE |
|
|
R’000 |
R’000 |
R’000 |
% |
||
|
1. |
ADMINISTRATION |
2 997 574 |
1 415 754 |
1 581 289 |
47% |
|
2. |
COID SERVICES |
936 924 |
397 112 |
539 812 |
42% |
|
3. |
MEDICAL BENEFITS |
3 036 191 |
1 343 542 |
1 692 649 |
44% |
|
4. |
ORTHOTIC AND REHABILITATION |
64 745 |
47 689 |
17 056 |
74% |
|
OVERALL PERFORMANCE |
7 035 434 |
3 204 097 |
3 830 806 |
46% |
|
Source: Presentation to the PC on Employment and Labour dated 26 August 2020
Compensation Fund spent R3.2 billion or 46% of the R7.0 billion budget by the end of Q4, resulting to underspending of R3.8 billion.
The Administration programme spent R1.4 billion or 47% of the R2.9 billion budget in Q4, resulting to underspending of R1.6 billion. This programme achieved 33% of the Annual Performance Plan targets.
The 2019/20 revised budget for COID Services programme was R936. 9 million and the programme recorded a final expenditure of R397.1 million, which represent 42% actual expenditure at the end of Q4. The programme achieved 0% of its APP targets.
Medical Benefits programme spent R1.3 billion or 44% of the R3.0 billion budget in Q4, resulting to underspending of R1.7 billion. This programme achieved 50% of its APP targets for Q4.
The 2019/20 revised budget for Orthotic and Rehabilitation Services programme was R64.7 million and the programme recorded a final expenditure of R47.7 million, which represent a 74% actual spending by the end of Q4. This programme achieved 100% of its APP targets.
- UNEMPLOYMENT INSURANCE FUND
7.1. UIF Non-Financial Performance per Strategic Objectives in Q3
Table 33 below reflects UIF non-financial performance per strategic objective in Q3.
Table 33: UIF Non-Financial Performance per Strategic Objective in Q3
|
STRATEGIC OBJECTIVES |
PLANNED INDICATORS |
ACHIEVED |
NOT ACHIEVED |
OVERALL ACHIEVEMENT % |
|
|
1. |
ENSURE FINANCIAL SUSTAINABILITY |
3 |
3 |
0 |
100% |
|
2. |
STRENGTHEN INSTITUTIONAL CAPACITY OF THE FUND |
1 |
1 |
0 |
100% |
|
3. |
PROVIDE EASY USE SERVICES THROUGH MULTIPLE ACCESS POINTS |
1 |
0 |
1 |
0% |
|
4. |
IMPROVE SERVICE DELIVERY |
6 |
6 |
0 |
100% |
|
5. |
COLLABORATE WITH STAKEHOLDERS TO IMPROVE COMPLIANCE WITH UIF ACTS |
2 |
1 |
0 |
50% |
|
6. |
ENHANCE EMPLOYABILITY OF UIF BENEFICIARIES, ENABLE ENTREPRENEURSHIP AND PRESERVE JOBS |
2 |
0 |
2 |
0% |
|
OVERALL PERFORMANCE |
15 |
11 |
4 |
73% |
|
Source: Presentation to the PC on Employment and Labour dated 26 August 2020
Of the 11 UIF performance indicators reporting in Q3, four were achieved, translating to an overall achievement of 73%.
Strategic objective 3 had one indicator reporting in Q3, which was not achieved, translating to an overall achievement of 0%.
Strategic objective 5 had two performance indicators reporting in Q3 and only one was achieved, translating to an overall achievement of 50%.
Strategic objective 6 did not achieve its two performance indicators reporting in Q3, translating to an overall achievement of 0%.
The other three strategic objectives achieved all their performance indicators, translating to 100% achievement for them.
7.2. UIF Non-Financial Performance per Programme in Q3
Table 34 reflects UIF ono-financial performance per programme in Q3.
Table 34: UIF Non-Financial Performance per Programme in Q3
|
PROGRAMME |
PLANNED INDICATORS |
ACHIEVED |
NOT ACHIEVED |
OVERALL ACHIEVEMENT % |
|
|
1. |
ADMINISTRATION |
5 |
4 |
1 |
80% |
|
2. |
BUSINESS OPERATIONS |
8 |
7 |
1 |
88% |
|
3. |
LABOUR ACTIVATION PROGRAMMES |
2 |
0 |
2 |
0% |
|
OVERALL PERFORMANCE |
15 |
11 |
4 |
73% |
|
Source: Presentation to the PC on Employment and Labour dated 26 August 2020
The table above reflects that the Administration programme achieved four of its five performance indicators reporting in Q3, translating to an overall achievement of 80%.
The Business Operations programme had eight performance indicators reporting in Q3 and achieved 7, translating to an overall achievement of 88%.
Labour Activation Programmes did not achieve any of the two performance indicators reporting in Q3, translating to overall achievement of 0%.
7.3. UIF Non-Financial Performance per Strategic Objectives in Q4
Table 35 below reflects UIF non-financial performance per programme in Q4.
Table 35: UIF Non-Financial Performance per Strategic Objective in Q4
|
STRATEGIC OBJECTIVES |
PLANNED INDICATORS |
ACHIEVED |
NOT ACHIEVED |
OVERALL ACHIEVEMENT % |
|
|
1. |
ENSURE FINANCIAL SUSTAINABILITY |
3 |
3 |
0 |
100% |
|
2. |
STRENGTHEN INSTITUTIONAL CAPACITY OF THE FUND |
1 |
1 |
0 |
100% |
|
3. |
PROVIDE EASY TO USE SERVICES THROUGH MULTIPLE ACCESS POINTS |
1 |
0 |
1 |
0% |
|
4. |
IMPROVE SERVICE DELIVERY |
6 |
6 |
0 |
100% |
|
6. |
COLLABORATE WITH STAKEHOLDERS TO IMPROVE COMPLIANCE WITH UIF ACTS |
2 |
1 |
1 |
50% |
|
7. |
ENHANCE EMPLOYABILITY OF UIF BENEFICIARIES, ENABLE ENTREPRENEURSHIP AND PRESERVE JOBS |
2 |
1 |
1 |
50% |
|
OVERALL PERFORMANCE |
15 |
12 |
3 |
80% |
|
Source: Presentation to the PC on Employment and Labour dated 26 August 2020
UIF had 15 performance indicators reporting in Q4 and achieved 12, translating to an overall achievement of 80%.
Strategic objective 3 had one performance indicator reporting in Q4 and it was not achieved, translating to an overall achievement of 0%.
Strategic objective 6 had two indicators reporting in Q4 and one was achieved, translating to an overall achievement of 50%.
Similarly, strategic objective 7 achieved one of its two performance indicators reporting in Q4, translating to an overall achievement of 50%.
The rest of the strategic objectives achieved 100% of performance indicators.
7.4. UIF Non-Financial Performance per Programme in Q4
Table 36 below reflects UIF noon-financial performance per programme in Q4.
Table 36: UIF Non-Financial Performance per Programme in Q4
|
PROGRAMME |
PLANNED INDICATORS |
ACHIEVED |
NOT ACHIEVED |
OVERALL ACHIEVEMENT % |
|
|
1. |
ADMINISTRATION |
5 |
4 |
1 |
80% |
|
2. |
BUSINESS OPERATIONS |
8 |
7 |
1 |
88% |
|
3. |
LABOUR ACTIVATION PROGRAMMES |
2 |
1 |
1 |
50% |
|
OVERALL ACHIEVEMENT |
15 |
12 |
3 |
80% |
|
Source: Presentation to the PC on Employment and Labour dated 26 August 2020
The Administration programme achieved four of the five indicators reporting in Q4, translating to an overall achievement of 80%.
Business Operations programme had eight performance indicators reporting in Q4 and seven were achieved, translating to an achievement of 88%.
Labour Activation Programmes achieved one of the two indicators reporting in Q4, translating to an overall achievement of 50%.
7.5. UIF Financial Performance per Programme in Q3
Table 37 below reflects UIF financial performance per programme in Q3
Table 37: UIF Financial Performance per Programme in Q3 (Cumulative)
|
PROGRAMME |
BUDGET |
ACTUAL |
VARIANCE |
EXPENDITURE |
|
|
R’000 |
R’000 |
R’000 |
% |
||
|
1. |
ADMINISTRATION |
1 277 317 |
1 039 400 |
237 917 |
81% |
|
2. |
BUSINESS OPERATIONS |
12 648 396 |
8 811 463 |
3 836 933 |
70% |
|
3. |
LABOUR ACTIVATION PROGRAMMES |
1 443 810 |
616 542 |
827 268 |
43% |
|
TOTAL |
15 369 523 |
10 467 405 |
4 902 118 |
68% |
|
Source: Presentation to the PC on Employment and Labour dated 26 August 2020
UIF spent R10.5 billion or 68% of the total budget of R15.4 billion by the end of Q3 of 2019/20
financial year.
Business Operations programme received R12.6 billion or 82% of the total budget of the entity. This programme spent a cumulative amount of R8.8 billion or 70% of the allocation by the end of Q3, resulting to underspending of R3.8 billion.
Labour Activation Programmes received the second highest allocation of R1.4 billion or 9% of the entity budget. This programme spent a cumulative R616.5 million or 43% of the programme budget by the end of Q3, resulting to a variance of R827.3 million.
The Administration programme spent R1.0 billion or 81% of the R1.3 programme budget by the end of Q3 of 2019/20 financial year.
7.6. UIF Financial Performance by Economic Classification in Q3
Table 38 below reflects UIF financial performance by economic classification in Q3.
Table 38: UIF Financial Performance by Economic Classification in Q3
|
ECONOMIC CLASSIFICATION |
BUDGET |
ACTUAL |
VARIANCE |
EXPENDITURE |
|
|
R’000 |
R’000 |
R’000 |
% |
||
|
1. |
COMPENSATION OF EMPLOYEES |
1 179 284 |
1 043 606 |
135 679 |
88% |
|
2. |
GOODS AND SERVICES |
1 077 808 |
764 457 |
313 351 |
71% |
|
3. |
CAPEX |
234 944 |
131 449 |
103 495 |
56% |
|
4. |
TRANSFERS |
12 877 487 |
8 527 894 |
4 349 593 |
66% |
|
TOTAL |
15 369 523 |
10 467 405 |
4 902 118 |
68% |
|
Source: Presentation to the PC on Employment and Labour dated 26 August 2020
A total of R12 9 billion or 84% of the total budget was allocated for Transfers item. Of this amount, R8.5 billion or 66% was spent by the end of Q3 of 2019/20.
A cumulative amount of R1.0 billion or 88% of the R1.2 billion was spent on Compensation of Employees by the end of Q3, resulting to underspending of R135.7 million.
Goods and Services item was allocated R1.1 billion and R764.5 million or 71% of the budget was spent, resulting to a variance of R313.4 million.
A total of R131.4 million or 56% of R234.9 was spent of Capex by the end of Q3, resulting to underspending of R103.5 million.
7.7. UIF Financial Performance per Programme in Q4
Table 39 below reflects UIF financial performance per programme in Q4.
Table 39: UIF Financial Performance per Programme in Q4
|
PROGRAMME |
BUDGET |
ACTUAL |
VARIANCE |
EXPENDITURE |
|
|
R’000 |
R’000 |
R’000 |
% |
||
|
1. |
ADMINISTRATION |
2 620 364 |
1 441 707 |
1 178 657 |
55% |
|
2. |
BUSINESS OPERATIONS |
22 302 326 |
10 993 574 |
11 308 752 |
49% |
|
3. |
LABOUR ACTIVATION PROGRAMMES |
1 151 093 |
1 082 693 |
68 400 |
94% |
|
TOTAL |
26 073 783 |
15 130 290 |
10 943 493 |
58% |
|
Source: Presentation to the PC on Employment and Labour dated 26 August 2020
UIF spent a cumulative amount R15.1 billion or 58% of the total budget of R26.1 billion by the end of Q4 of 2019/20, resulting to underspending of R10.9 billion.
The Administration programme spent R1.4 or 55% of the allocated R2.6 billion by the end of Q4 of 2019/20, resulting to underspending of R1.2 billion or 45% of the programme budget. Factors that contributed to underspending were identified as:
- Compensation of employees (Head Office)
- Computer Services IT
- Investment and Management fees.
Business Operations programme spent R10.9 billion or 49% of the allocated R22.3 billion by the end of Q4, resulting to underspending of R11.3 billion or 51% of the programme budget. Underspending was attributed to the following factors:
- Compensation of employees (Overtime)
- SARS Commission
- Benefits payments.
Labour Activation Programmes spent R1.1 billion or 94% of the allocated R1.2 billion resulting to underspending of R68.4 million or 6% of the progamme budget. Underspending on this programme was attributed to delays in implementation of Unemployment Alleviation Schemes.
7.8. UIF Financial Performance by Economic Classification in Q4
Table 40 below reflects UIF financial performance by economic classification in Q4.
Table 40: UIF Financial Performance by Economic Classification in Q4
|
ECONOMIC CLASSIFICATION |
BUDGET |
ACTUAL |
VARIANCE |
EXPENDITURE |
|
|
R’000 |
R’000 |
R’000 |
% |
||
|
1. |
COMPENSATION OF EMPLOYEES |
1 692 543 |
1 455 132 |
237 411 |
86% |
|
2. |
GOODS AND SERVICES |
1 848 020 |
1 507 618 |
340 402 |
82% |
|
3. |
CAPEX |
785 271 |
173 996 |
611 275 |
22% |
|
4. |
TRANSFERS |
21 747 949 |
10 372 228 |
11 375 721 |
48% |
|
TOTAL |
26 073 783 |
15 130 290 |
10 943 493 |
58% |
|
Source: Presentation to the PC on Employment and Labour dated 26 August 2020
This entity spent R1.5 billion or 86% of the R1.7 billion allocated for Compensation of Employees item, resulting to a variance of R237.4 million.
A total of R1.5 billion or 82% of the R1.8 billion budgeted for Goods and Services was spent in Q4, resulting to underspending of R340.4 million.
The Fund spent R173.9 million or 22% of the R785.3 million on Capital Expenditure, resulting to a variance of R611.3 million.
Transfers item received the highest budget of R21.7 billion and managed to spent R10.4 billion or 48% of the allocation, resulting to a variance of R11.9 billion.
- COMMITTEE OBSERVATIONS
Having considered all the presentations made, the Committee made the following observations:
8.1. DEL
- Of the 16 targets planned for Q3, 14 were achieved representing an overall performance of 88%. Of the 19 targets planned for Q4, 17 were achieved representing an an overall performance of 89%. Therefore, DEL registered a slight performance improvement of 1% from Q3 to Q4.
- DEL had an average vacancy rate of 6.4% in Q3 and 12.75% in Q4. The increase in the vacancy rate from Q3 to Q4 was reported to be due to creation of 500 new OHS inspector posts that were approved during Q4.
- Irregular expenditure amounted to R460 559 with fruitless and wasteful expenditure totaling to R251 098. The majority of these was reported to be as a result of vehicle accidents and no-shows at booked accommodations.
- In Q4 DEL became aware of fraud potentially amounting to R2.5 million. A forensic auditor was appointed and an interim report has been received. A criminal case will be opened once the final report is received and where indicated, consequence management will follow.
- The four sectors that were reported to have had highest non-compliance to BCEA are Wholesale and Retail; Community; Manufacturing; and Hospitality. A total of R145 161 507 was recovered in underpaid NMW and paid over to workers.
- Supported Employment Enterprises continue to struggle financially as government departments continue to fail to place orders with the entity.
8.2. CCMA
- The overall performance of the CCMA improved from 43% in Q3 to 74% in Q4.
- Non-achievement of some indicators was attributed to human error by administrative staff (Case Management Officers) and Commissioners.
- The Social Services programme reported over-expenditure in both Q3 and Q4 as a result of using part-time commissioners, which was higher than the projected efficiency of 60%, as well as the travel costs incurred by the commissioners in executing cases in outlying areas.
- Mass retrenchments as a result of Covid-19 lockdown are expected to exacerbate the already high unemployment rate.
- The difference in definitions of an “essential service” as provided in the Labour Relations Act and the Disaster Management Act has resulted in wrong referrals been filed with the CCMA.
8.3. PRODUCTIVITY SA
- Productivity SA achieved an overall performance of 100% in both Q3 and Q4. The entity also exceeded most of its targets in both Q3 and Q4.
- The audit found that the HR policies of the entity are not reviewed on regular intervals. The Board approved five policies and six more policies are in the process of review.
- Strategic objective 3, which is “To support enterprises facing economic distress and initiatives aimed at preventing job losses” remained unfunded in both Q3 and Q4.
8.4. Nedlac
- Draft ICT strategic plan was developed in Q3 to ensure that the ICT environment for Nedlac is responsive to the business needs and supports achievement of the set strategic objectives as outlined in the 2020/21 to 2024/25.
- Establishment of the Nedlac Covid-19 Rapid Response Task team in Q4. The task team and its sub-committees has played a significant role in the development of measures to mitigate against the impact of Coved-19 and lockdown on the lives and livelihoods of South Africans. e.g. Covid-19 TERS.
- The new Chief Financial Officer and Executive Director were appointed in Q4, which has brought much needed stability in the leadership of the institution.
8.5. COMPENSATION FUND
- CF achieved 67% and did not achieve 33% of its targets in Q3 and in Q4 it achieved 33% of its targets and did not achieve 67%.
- CF had spent 38% of its budget by the end of Q3 and achieved 67% of its performance indicators. In Q4 CF spent 46% of its budget and achieved 33% of its performance indicators.
- The entity introduced the new claims management system between August and October 2019, which necessitated migration of data from the old uMahluko to the new Comp-Easy system. This resulted in slowing down of turn-around times. As from October 2019, the Fund was dealing with old invoices and managed to pay more than half a billion rands. A total of R431 million was reportedly paid to service providers between October and December. Of this amount, R130 million was paid to Compsol. A total of R467 million was paid from April 2020 to date of the representation. The increase in the number of payments made was attributed to co-operation between BUSA and CF in data migration.
8.6. UNEMPLOYMENT INSURANCE FUND
- UIF overall performance improved from 73% in Q3 to 80% in Q4.
- The Fund paid 100% of valid invoices within 30 calendar days after receipt by the Fund.
- The Fund managed to maintain the vacancy rate at less than 10% in Q3 and Q4, which resulted to underspending on Compensation of Employees item for Administration and Business Operations programmes.
- The UIF proposed a shift in core focus to creating employment opportunities, training and skills development due to the high unemployment rate in South Africa.
- Pinetown Labour Centre, which services approximately 9000 unemployed persons has been without a manager for the past three years. The clients have to withstand unbearable conditions as a result of congestion in the Centre and employees are not provided with relevant tools of trade to work from home. However, the Committee was informed that the Manager has been appointed with effect from 1 September 2020.
- The UIF processing and paying systems are in need of strengthening.
- COMMITTEE RECOMMENDATIONS
In view of the above Committee observations, the Committee recommends that the Minister ensures that:
9.1. DEL
- Recommendations made by the Auditor-General of South Africa (AGSA) are implemented without delay and where necessary, referrals are made to other law enforcement agents.
- DEL deploys its scarce resources to focus on sectors that constantly report high levels of non-compliance to legislation.
- DEL continues engaging National Treasury on the issue of awarding Supported Employment Enterprises the preferential procurement status.
9.2. CCMA
- Where appropriate, the entity continues using the new systems and methods of dealing with cases such as digital platforms that were implemented as a result of Covid-19 pandemic, even post Covid-19.
- CCMA services are made available where users are, including making use of buildings owned by other government entities.
9.3. PRODUCTIVITY SA
- Co-operation between Productivity SA and CCMA is explored, especially considering the expected surge of large scale retrenchments.
- Productivity SA is properly resourced to execute its crucial mandate as reflected in its strategic objective 3, which is “To support enterprises facing economic distress and initiatives aimed at preventing job losses”.
- Productivity SA explores mechanisms to increase the self-generated portion of its revenue.
9.4. Nedlac
- Social partners at Nedlac move with speed in developing a common agenda for economic recovery plan.
9.5. COMPENSATION FUND
- CF provides technical support to assist users who struggle to use the new Comp-Easy system, so as to alleviate the problem of submission of incomplete claims leaving it unable to finalise payments.
- CF includes Internal Audit Review reports in the quarterly report presentations as assurance that what is presented to the Committee had gone through internal governance structures.
9.6. UNEMPLOYMENT INSURANCE FUND
- UIF investigate the conditions under which employees in Pinetown Centre work, including availability of tools of trade as well as the conditions under which clients access UIF services.
- The UIF’s processing and payment systems could be strengthened through closer cooperation with other government agencies that have access to relevant data.
Report to be considered.
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