ATC201203: Portfolio Committee on Social Development Budget Review and Recommendation Report (BRRR), 2019/2020, Dated 03 December 2020

Social Development

PORTFOLIO COMMITTEE ON SOCIAL DEVELOPMENT BUDGET REVIEW AND RECOMMENDATION REPORT (BRRR), 2019/2020, DATED 03 December 2020

INTRODUCTION

The Portfolio Committee on Social Development considered the financial and non-financial performance of the Department of Social Development, South African Social Security Agency (hereafter SASSA or the Agency), and the National Development Agency (hereafter the NDA or Agency) on 25 November 2020. It also received briefings from the Auditor-General of South Africa and the Financial and Fiscal Commission on 18 November 2020. The Committee reports as follows:

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, that is driven by the ideal of realising a better quality of life for all people of South Africa. It is also required to facilitate public participation, monitoring and oversight over the legislative processes relating to social development and also to confer 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.

The Committee 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 (2019 – 2024), 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 (MTSF). The Committee also conducts oversight over the department’s performance in implementing the priorities of the State of the Nation Address (SONA). It should however, be noted that this report reports on the performance of the social development portfolio for the previous (2014 – 2019) MTSF priorities.

National Development Plan (NDP)

These are the priorities of the NDP that the Committee focuses on:

establishment of a social floor which outlines an acceptable or decent standard of living,
bringing the informal sector into the mandatory contributory scheme,
expanding social welfare system,
reviewing funding to not-for-profit organisations,
training more welfare professionals and community workers,
expanding public employment programmes,
promoting opportunities for youth employment.
use of social audits to enhance accountability in the welfare system, and
the integration of all databases of people who receive different forms of social security services.

Medium Term Expenditure Framework (MTEF) Priorities

The Department’s) outcomes are aligned to the priorities of the 2014-2019 Medium Term Strategy Framework (MTSF). It contributed to the following priorities:

Reforming the social welfare sector and services to deliver better results
Improve the provision of Early Childhood Development. All children should enjoy services and benefits aimed at facilitating access to nutrition, health care, education, social care and safety
Deepening social assistance and extending the scope for social security
Strengthening integrated community development interventions and improving household food and nutrition, and
Establish social protection systems to strengthen coordination, integration, planning, monitoring and evaluation of services.

PURPOSE OF THE BRRR

As part of exercising its oversight work, the Committee considered the 2019/2020 annual reports of the department and its entities. This BRRR reports on the financial and non-financial performance of the department and its entities.

In terms of Section 5 of the Money Bills Amendment Procedures and Related Matters Act, No. of 2009, the National Assembly (NA) through its committees must annually assess the performance of each national department. Portfolio Committees must thus annually submit Budget Reviews and Recommendation Reports (BRRRs) for tabling in the NA in order for Parliament to compile a report for the Medium Term Budget Policy Statement.

The Money Bills Amendment Procedure and Related Matters Act therefore make it obligatory for Parliament to assess the department’s budgetary needs and shortfalls vis-à-vis the department’s operational efficiency and performance.

Most importantly, the budget review process enables the Committee to amend the budget allocation of the department through the recommendations it makes. Its recommendations are considered during the consideration of the Medium Term Budget Policy Statement (MTBPS).

The budget review process also enables the Committee to make recommendations to the Minister of Social Development on issues pertaining to service delivery. This therefore means that the analysis contained in the BRRR is both backward and forward looking.

Methodology

The BRRR culminated from a very intense and thorough analysis and interaction with the Department of Social Development, the South African Social Security Agency (SASSA) and the National Development Agency (NDA). These included briefings from the department and its entities on their quarterly reports and briefings on their annual reports. The Committee also received a briefing from the Office of the Auditor-General on the audit outcomes of the department and its entities financial and non-financial performance for the year under review (2019/2020). It also received a briefing from the Financial and Fiscal Commission on the expenditure patterns on key programmes of the department and its entities.

COMMITTEE OVERSIGHT

The Committee identified specific focus areas that needed stringent oversight. It identified Covid 19 interventions, action plans on 2018/2019 Auditor – General findings and foster care system as it had a court judgement and deadlines.

3.1 Covid 19 Interventions

The Covid 19 pandemic needed the South African government to urgently implement measures to fight against its economic and social impact on the lives of South Africans. The Department of Social Development as part of the social cluster of government had to develop measures to address the social impact of the pandemic – increased levels of poverty (food insecurities), increase in gender based violence (GBV) cases as a result of lockdown and sheltering for homeless people. The other impact that the department needed to respond to, even though it is economical in nature, related to loss of income particularly in the informal economy. Relief of hunger and social distress, access to healthcare, income, water and sanitation became the key priorities of government.

As part of conducting their oversight function the Portfolio Committee on Social Development and the Select Committee on Health and Social Services received briefings on 23 April, 29 May and 25 June from the Department of Social Development, the South African Social Security Agency (SASSA) and the National Development Agency (NDA) on programmes they implemented to combat the impact of Covid 19 pandemic. The Portfolio Committee thereafter continued receiving weekly updates.

The briefings revealed the following challenges, successes and policy gaps:

Challenges

Scaling up programmes: The department had to urgently formulate measures to scale up its programmes and services on food security, GBV services, sheltering of homeless people at the tail end of the financial year. The department had to make available an emergency budget even though in some provinces budgets for 2019/2020 financial year were already depleted. This occurred during a period when sector strategic and annual performance plans, as well as the budget for 2020/2021 financial year were yet to be approved by Parliament.

Human resources: The department had to urgently mobilize its human resources, particularly Social Workers who were already over stretched due to their shortage. Further, the department needed to secure additional funding to employ 1809 social workers on a temporary basis (for 3 months). Going forward it may be useful for the department to consistently update and assess its database of trained Social Workers, and Auxiliary Workers.

Accessibility: Even though SASSA had made significant strides in automating its processes, these were mainly targeted at automating business systems – application processes, electronic filing and reporting. The lockdown regulations required SASSA and the department to urgently develop electronic application forms which applicants can access from their mobile devices or internet. SASSA had already set this as its target for 2020/2021 financial year. However, these systems were introduced in a country with communities that have limited access to the internet.

Economic implications: To curb the deepening loss of income which resulted to increased poverty and food insecurity, particularly to those in the informal economy, President Ramaphosa in April 22, 2020, announced for the provision of a six (6) months top up amounts to existing social grants as well as payment of a new Social Relief of Distress Grant (SRD Grant). A total budget of R50 billion was made available for this. This provided for an increase of R300 in the Child Support Grant (CSG) for the month of May, R250 increase to other grants for 6 months and R500 grant to caregivers of children receiving the CSG for 6 months. It also provided for an additional Social Relief of Distress (SRD) grant of R350 a month for 6 months for the unemployed who do not receive any other form of grant or Unemployment Insurance Fund (UIF). This announcement required the department and SASSA to develop systems and guidelines needed to implement these grants within days.

Access to food: The demand for food outweighed the supply and resources the department had. South Africa has 14 million people with no access to food. Out of this number, the department had only reached 5.2 million people, leaving a gap of 8.8 million people. With the impact of Covid 19 pandemic, Statistics South Africa predicted that 50% of the country’s population is at risk of being food insecure.

Payment of SRD Grant: Processing of applications and payments of this continue to be problematic. These include contradictory applications outcomes reflected on the online applications system and an sms notifications applicants received, high number of declined/rejected applications due to discrepancies in the databases (either SARS, UIF or NSFAS) used by SASSA to verify income status of applicants, the use of means test based on applicants’ bank records, personal details not matching identification numbers and delays in the provision of bank details by applicants. The Auditor-General also found that verification systems used by SASSA were not effective as a result people who were not supposed to receive the grant received it.

Non-payment of NPOs: DSD offices, both nationally and provincially had to close as per the requirements of the national lockdown, particularly, level 5 and 4. This disrupted administrative processes of approving payments of NPOs by provinces, mainly during the first quarter of the 2020/2021 financial year. To address this, the national department issued a Circular to all the provinces with proposed measures of continuing funding to NPOs despite the suspension of some programmes due to Covid 19 pandemic. The proposed measures included extension of Service Level Agreements for 6 months (end of September 2020).

Provinces then developed their provincial circulars and most NPOs were paid during the second quarter. There were however delays in the Eastern Cape and North West provinces. Delays in the Eastern Cape provinces were due to the withdrawal of services in protest action by social work managers responsible for the coordination, verification of the transfer administrative documents and signing of service level agreements.

Closure of DSD facilities: Also, due to the national lockdown, DSD facilities had to be closed or visitations were restricted. These included ECD centres, old age homes, Child and Youth Care Centres, Drop-in-centres, facilities for persons with disabilities and Community Nutrition and Development Centres (CNDCs). The impact of the closure of these facilities included suspension of nutrition programmes, loss of income for the ECD practitioners, as 99% of ECD operators reported that parents stopped paying fees resulting to 83% not paying full salaries, absence of stimulation programmes for children and lack of contact with families leading to loneliness.

Increase in GBV cases: During the national lockdown levels 5 and 4 the country experienced an increase in gender based violence. This was over and above the already high levels of gender based violence and femicide the country had experienced prior to the national lockdown. This increased the demand for the department’s psychosocial support services through the Gender Based Violence Command Centre and shelters. There was also a need to expand recruitment of social workers. Additional 1809 social workers were employed by provinces, initially for a period of three months. The employment period was later extended to a year.

Successes

Despite the aforementioned challenges, the department and its entities managed to mobilize their financial and human resources, and scaled up the implementation of the SRD in the form of food parcels and provision of cooked meals, and psychosocial services through the GBV Command Centre and other means.

The implementation of SRD augmented the department’s existing nutrition and food security programme, which is implemented through Provincial Food Distribution Centres (PFDCs) and Community Nutrition Development Centres (CNDCs).

Psychosocial support and provision of cooked meals as well as substance abuse treatment were extended to homeless people accommodated in shelters. Even though there were reports of inadequate accommodation and personal protective equipment for the homeless at the Strandfontein shelter in Cape Town.

The strength of the department can be placed on its new approach of it working closely with its entities, including the South African Council of Social Service Professionals (SACSSP), in a portfolio manner.

There was also a strong co-ordination between the national department and provincial departments through Provincial Joint Operation Centres (PROVJOCs), Local Joint Operation Centres (LOCALJOCs) and War Room. This is important to be maintained as provinces and districts are the implementers of programmes.

SASSA continued to provide social assistance grants despite its offices being closed during level 5 lockdown. To meet the high demand, it made changes in its payment cycle. April payments were made three days before the end of the month. For the month of May going forward payment files were split into two:

The first payment file will be for older persons and persons with disabilities, together with the child grants linked to those beneficiaries,
The second payment file will be for all the remaining unlinked children’s grants (care dependency, child support and foster care).

In responding to the announcement of the President, within days SASSA adjusted its electronic application system to enable it to pay additional amounts to the social grants. It also developed a new system to administer the payment of the SRD grant. Payments to all these grants were scheduled to take place between May 2020 – October 2020. By end of July 2020, a total of 13 712 210 payments were made with a total amount of R 4,799,273,500. In October 2020, President Ramaphosa extended the grant for a period of 3 months (up to end January 2021). Additional R6.8 billion was allocated through the Medium Term Budget Policy Statement (MTBPS) to the Department of Social Development for this course.

The National Development Agency (NDA) and the SACSSP made human and financial resources available. An amount of R1.8 million was allocated by the NDA, to partner with 52 Civil Society Organisations (CSOs) who provided 10 volunteers each, amounting to 520 volunteers.

The SACSSP through HWSETA partnership, mobilized R16 million for training of social service professionals (SSPs) on psycho social support interventions, disaster management, trauma counselling. The SSPs would include unemployed graduates.

Also the department had already functioning system of food distribution processes through Provincial Food Distribution Centres (PFDCs) and Community Nutrition Development Centres (CNDCs). It transferred funds to the PFDCs to procure food supplies which these centres distributed to the CNDCs. The CNDCs in turn distributed food parcels to the households, which was a new method. CNDCs also provided cooked meals, which they were already doing.
The department managed to source R20 million from its National Disaster Fund and R23 million from the Solidarity Fund for the distribution of 523 490 food parcels in May 2020, reaching 2 093 960 million. By the end of June 2020, the department had distributed 627 649 food parcels reaching 3 138 245 million people. In October 2020, through the MTBPS, additional R1 billion was allocated for food relief to vulnerable households.

The department also partnered with the Department of Women, Youth and Persons with Disability to distribute menstrual health and hygiene packs to school going girls who were on Quintile 1 - 3 schools but now were at home due to the lockdown. The packs were also distributed to GBV and Victims of Crime Centres and to facilities for persons with disabilities.

Improved partnerships with civil society and other spheres of government was also another main area of success.

Even though during the initial stages of the food distribution there was a challenge of lack of coordination, the national department as well as provincial departments managed to have improved partnerships with civil society and other spheres of government. This was highlighted as the main area of success by the provincial departments.

The challenge of uncoordinated food distribution resulted in the national department and some provincial departments developing electronic databases of food distributed and households reached.

Policy gaps

SRD: The SRD in the form of food parcels, vouchers and cash was already a programme of SASSA but its demand was significantly low compared to the one brought about by Covid-19 pandemic. The pandemic required an urgent response, in a short time, to cover a very high demand nationwide for access to food. The department also had to scale up its food and nutrition programme. It therefore changed its model of using Community Nutrition and Development Centres (CNDCs) from that of serving cooked meals to distributing food parcels to households. This also, required SASSA to review its policy on SRD to provide not only food parcels but vouchers and explore feasibility to pay cash, for example via e-wallet. This is critical as the effects of the pandemic will have long term socio-economic impact on the lives of the poor and vulnerable population. The department also had to make use of service providers (NGOs) to provide food to homeless shelters.

Monitoring and accountability: The challenges of corruption and fraud, political interference, inefficiency, procurement and appointment of service in the distribution of food parcels pointed to a lack of an effective monitoring and evaluation (M&E) plan and supervisory plan. It became critical for the department and its entities to continue strengthening this area to ensure efficiency, effectiveness and accountability.

Coordination: Absence of policy or measures to co-ordinate and monitor the work of stakeholders proved to be another area that required strengthening. A number of organizations, NGOs and corporate organisations, mobilized their resources and financial donations and provided food parcels. This is primarily the domain of the department and so it has a responsibility to ensure that a proper policy or measures are put in place in collaboration with the Department of Cooperative Governance and Traditional Affairs (COGTA), which issues permits. It is also important for the department to have an updated database of NGOs, clearly define how it collaborates with the various stakeholders.

Nutrition for school-going children: There was a lack of clear policy guidelines on the department’s role with regard to access to food of school going children who benefitted from the National School Nutrition Programme (NSNP). This also applied to children who received meals at Early Childhood Development (ECD) centres and drop-in centres. This requires the department to work closely with the Departments of Basic Education, Health and Agriculture, Forestry and Fisheries, to develop policy guidelines to address child health and food nutrition.

Shelter for the homeless: There was also no policy provision in place to outline the role of the department with regard to sheltering of homeless people. This therefore calls for the department and COGTA to work together to develop policy guidelines to clarify roles of relevant departments with regard to site identification, infrastructure, norms and standards and provision of services.

Sustainability: The questions that still needed to be answered are:
- What happens after lockdown and when Covid-19 has become manageable?
- Can the Covid 19 interventions be sustained post lockdown period?
- Are current social protection and social security systems adequate and sustainable in the medium and long-term? To what extent do these initiatives contribute to poverty alleviation?
- What are the financial/budgetary implications of this pandemic for the department?

3.2 Auditor - General Findings for 2018/2019

The department received a qualified audit opinion for 2018/19 financial year which reflected a regression from an unqualified audit opinion with findings on compliance received in 2017/18 financial year. The qualification was obtained due to inaccurate reporting on transfers and subsidies relating to social assistance grants administered by the South African Social Security Agency (SASSA). The department has ten social assistance accounts. SASSA has full access to transact within the department’s regional social assistance accounts. On a monthly basis SASSA requests money from the department based on their expected number of beneficiaries to be paid. The department then transfers the money from the national account into regional account which is held by the South African Reserve Bank. The funds are thereafter transferred to SASSA, which pays it via BankServ to the South African Post Office (SAPO) and to the banks. This expenditure, in terms of the applicable accounting framework, is reported in the financial records of the department. The Auditor-General then found that there was no sufficient and appropriate audit evidence to confirm the amounts reported.

SASSA’s outcome improved from a qualified opinion to an unqualified opinion with findings on compliance. SASSA incurred an irregular expenditure of R67 million due to payments made on unapproved lease contract extensions and deviations of contract. The AG found that no appropriate steps were taken to prevent irregular expenditure. He also found that steps were no taken to prevent fruitless and wasteful expenditure of R77.8 million which occurred due to payment on services that were not utilized or rendered. He further found that leadership did not implement effective controls to ensure accurate financial reporting. It also did not exercise adequate oversight responsibility over compliance with legislation. The AG also found that SASSA took long to conclude investigations on transgressions that resulted in fruitless and wasteful expenditure and irregular expenditure.

The NDA’s outcome remained unchanged with an unqualified audit opinion. The AG found that effective and appropriate steps were not implemented to prevent irregular expenditure amounting to R18 million – mostly caused by non-compliance with SCM processes. Proper and complete records were not kept as evidence to support investigations into irregular, fruitless and wasteful expenditure. The AGSA was unable to obtain sufficient evidence of disciplinary steps taken against the relevant officials.

Committee Observations and Resolutions

The Committee noted with concern the lack of the department and its entities to put effective mechanisms to respond to the AG’s findings.It also noted with concern that the root causes of the findings showed weaknesses in the management inability to respond to audit findings. It strongly felt that the issues raised by the AG were basic requirements of management.

It recommended that the department and its entities should develop action plans to respond to the AG’s audit findings and present them to the Committee. The action plans should also address issues of consequence management to the affected personnel. The implementation of the action plans should be reported to the Committee on quarterly basis.

The action plans were presented to the Committee on 06 November 2019 (SASSA and the NDA) and on 13 November 2019 (DSD). The Committee recommended that the action plans should contain time frames to execute these action planned. Progress reports on the implementation of the action plans were again presented to the Committee on 13 May 2020.

The Committee welcomed interventions taken by the department and its entities to address findings of the Auditor-General but felt that more still needed to be done to ensure that they do not happen again. It recommended that the department should address all the audit findings of the previous year within the following financial year. There should not a be carry over to the outer years.

It was however dissatisfied with how SASSA had been handling the issue of irregular expenditure as the amounts had been accumulating every year. It instructed the Agency to address this matter. The Committee also reiterated its concern over the slow progress in finalizing cases under investigation and lack of consequence management.

The Committee noted that SASSA investigated and finalized 282 cases of financial misconduct. It however noted that SASSA gave a similar report last year (2019). It was concerned that the reported number of actions taken against officials did not tally with the total number of 282. It wanted to know what was happening with the officials whose cases were pending the finalization of the investigation.

The Committee expressed a concern regarding the NDA’s report with regard to cases of irregular expenditure. It instructed the NDA to have proper reporting on the nature of the cases of irregular expenditure and how consequence management had been handled to ensure accountability to those implicated of wrongdoing. The Committee’s concern was that it seemed that investigations were not properly conducted, they were just forwarded to South African Police Service (SAPS) instead.

The Committee resolved that the department and its entities should develop actions plans. They reported on them quarterly to the Committee. The Committee welcomed interventions taken by the department and its entities to address findings of the Auditor-General but felt that more still needed to be done to ensure that they do not happen again. It however raised a concern that the department reported on some AG findings as “work in progress” and did not provide specific dates on when they will be finalized.

3.3 Foster Care System

The Centre for Child Law litigated the Department of Social Development over the high backlog of lapsed foster care orders. The matter was heard and ruled upon by the North Gauteng High Court (NGHCO) in 2014. The court ruled that the department should develop a comprehensive legal solution. This required the department to amend the Social Assistance Amendment Act and the Children’s Act. The department was also ordered to extend lapsed court orders administratively. Unfortunately, these deliverables and deadlines set by the court were no met by the department in 2017 and in 2019.

During 2019, the Committee received regular (quarterly) progress reports from the national department and at times from the provincial departments on progress made to reduce the backlog. The progress reports also reported on progress made by the department to amend the aforementioned legislation. When it became apparent that the department would not meet the end of November 2019 deadline, the Committee advised it to urgently apply for another extension. In its application, the department should clearly outline progress made. On 27 November 2019, the court yet again extended its deadline to 26 November 2020. Yet again, the Committee conducted its quarterly oversight over the progress made. It emphasized the urgency of the department to table the amended Bills, mentioned above, in Parliament as these would provide a much needed legal solution.

The department tabled in Parliament the Social Amendment Bill and it was referred to the Portfolio Committee on Social Development on 30 November 2019. The Committee finalized the Bill in March 2020 and referred it to the Select Committee on Health and Social Services in June 2020. The Select Committee finalized it in October 2020 and it was subsequently referred to the President for assent.

The Children’s Amendment Bill was referred to the Portfolio Committee on Social Development on 31 August 2020. Due to the short period of time remaining before the end of the court’s deadline in November 2020, the Committee sought legal advice on how it should proceed with processing the Bill. It was advised that it must process the Bill in its entirety. The department should urgently submit an application for extension to the High Court. In the interim the Committee received a briefing on the Bill from the department. It also called for public submissions on the Bill with a deadline of 27 November 2020. It will proceed with other legislative processes in February 2021.

ANALYSIS OF FINANCIAL EXPENDITURE AND TARGETS ACHIEVED PER QUARTER, 2019/2020

Table 1: Budget expenditure per quarter

Programme

Adjusted

Budget allocation

Expenditure per quarter

Percentage

Quarter 1 April – June 2019

Quarter 2

July – Sep 2019

Quarter 3

Oct - Dec 2019

Quarter 4 Jan – March 2020

% Spent

1: Administration

R408 374

R83 447

R95 469

R90 890

R151 582

99.88%

2. Social Assistance

R175 155 593

R43 071 497

R43 495 130

R44 132 690

R59 341 525

108.50%

3.Social Security Policy and Administration

R7 659 416

R1 216 626

R2 516 248

R1 959 669

R1 941 747

99.67%

4. Welfare Services Policy Development and Implementation support

R1 071 807

R180 108

R195 334

R226 022

R377 727

91.36%

5. Social Policy and Integrated Service Delivery

R413 282

R189 140

R33 665

R149 277

R34 045

98.27%

Total

R184 721 972

R44 740 818

R46 335 846

R46 558 547

R61 846 626

107.99%

Quarter 1 (April - June) of 2019: The overall, departmental expenditure for this quarter amounted to R44.740 billion (24.2%), which was consistent with the outcome of the previous year’s 1st quarter (24.4%). In terms of Economic Classifications, the largest expenditure (R51 million) was towards Compensation of Employees and R28 million towards Goods. The department had planned to achieve 37 targets for this quarter but managed to achieve 24 (64%).

Quarter 2 (July – Sept) of 2019: The overall departmental expenditure by the end of the 2nd quarter amounted to R R46 558 billion (25.1%) of its overall allocation. The department had planned to achieve 44 targets but it achieved 25. The department reported that it achieved 62% targets (compared to 64% in the 1st quarter). Most targets (10) were not achieved in Programme 5.

Quarter 3 (Oct – Dec) of 2019: The overall budget expenditure for this quarter totalled to R46 558 billion (25.2%). The department achieved 60% of the 48 targets planned targets during this quarter.

Quarter 4 (Jan – March) of 2020: The department spent a total of R61 846 626 in this quarter. It had planned to achieve 45 targets but only achieved 27. Some of the targets reported on were carried over from the third quarter, particularly on Programme 4. Some targets were not reported on. This did not give an accurate reflection of the department’s performance.

Committee Observations

The main observation of the Committee was that the reporting format of the department was not based on results based model. It therefore lacked aspects of result based reporting, which include a clear linkage of the problem the targets or inputs were planned to address, output and desired outcome and impact. These aspects are critical for the Committee to conduct effective oversight. It recommended that future planning and reporting of the department and its entities should incorporate this approach.

The Committee was continually concerned throughout the reporting periods about the financial and service delivery implications of targets not achieved in all the quarters. It was also concerned on how the non-achievement of targets, particularly at the end of quarter 4, would impact the planning for the following year’s Annual Performance Plan (APP).

The Committee also noted with concern the continuous underspending in all programmes throughout the quarters. This was especially the case in Programme 3.

The Committee also observed that the department under performed under Programme 1, which is a critical programme of the department. The management and administration of the entire department resides under this programme. Critical targets that constitute the core mandate of the Programme were not achieved.

The Committee noted with concern that all quarterly reports did not report reflect on any interventions that the department had made against Gender Based Violence and Femicide. It recommended that the department’s Annual Performance Plans should include targets to implement the National Strategic Plan on Gender Based Violence and Feminicide.

The Committee noted with concern that it appears when it comes to services for people with disabilities was just a matter of ticking a box. No significant progress was made on reaching targets relating to the rights of people with disabilities. It wanted to know how many people with disabilities were employed by the department. It also wanted to know which departments were not cooperating in employing people with disabilities. The Committee called to the department to revive programmes for people with disabilities that were abandoned.

OVERVIEW OF FINANCIAL AND NON-FINANCIAL PERFORMANCE OF THE DEPARTMENT FOR 2019/2020 FINANCIAL YEAR

The core mandate of the Department of Social Development (DSD) originates from the Constitution of the Republic of South Africa, 1996, as well as the White Paper on Welfare (1998) and other applicable legislation. Section 27(1) (c) of the Constitution provides for the right of access to appropriate social assistance to those unable to support themselves and their dependants. Section 28(1) sets out the rights of children with regard to among others, appropriate care, basic nutrition, shelter, healthcare and social services. Furthermore, Schedule 4 of the Constitution identifies welfare services, population development and disaster management as functional areas of concurrent national and provincial legislative competence.

The department executes its mandate and performance in line with guided the National Development Plan (NDP), Medium Term Strategic Framework (MTSF), State of Nation Address (SONA) and sector plans.

National Development Plan

The NDP commits to achieving a defined social protection floor. This is a set of basic social security guarantees, which secure protection aimed at preventing or alleviating poverty, vulnerability and social exclusion. This means that households that have not achieved the basic standard of living are assisted, and this approach highlights the state’s obligation to provide social assistance to those in need. In line with the NDP commitment, the social grant system continues to be a major anti-poverty programme of Government, providing income support to millions of poor households.

The department’s 2019/20 annual report alludes to the NDP vision for 2030, which states that the provision of comprehensive social security, including income support and a safety-net for the poor, remains a cornerstone in the fight against poverty and inequality, especially among children and older persons.

The NDP further advocates that social welfare services be expanded, funding for non-profit organisations (NPOs) reviewed, and more education and training expanded for social service practitioners. It also highlights gaps and strategies that government must pursue to effectively build a human capital foundation for the country through Early Childhood Development (ECD) programme. The department continues providing Early Childhood Development (ECD) services in line with the National Development Plan Vision 2030 that calls for universal access to ECD services by all children in the country. It also implements the Children’s Act, which regulates the delivery of ECD services, and the National Integrated ECD Policy, which emphasizes access of ECD services by all children. Over 800 000 children, including children with disabilities, accessed ECD services through centre and non-centre based programmes.

The department continues to lead the coordination of the Expanded Public Works Programme (EPWP) for the Social Sector, which comprises of the Departments of Health, Education, Social Development, Community Safety and Sports, Arts and Culture. The Social Sector EPWP Phase 4 Business Plan has been developed and approved by the Cabinet Committee. The agreed target for the Social Sector for the next five years is creation of 875 754 work opportunities. This will form the key coordination focus for the Sector for the next five years.

Medium Term Strategic Framework

The department remained committed and focused in its effort to strengthen social welfare service delivery through legislative reforms; to expand and accelerate social welfare service delivery to the poor, vulnerable and special focus groups; to develop a comprehensive social protection plan and deepen social assistance; and to expand access to social security.

It also continued to expand access to social security through monthly transfer funds to the South African Social Security Agency (SASSA) for the provision of social grants to eligible beneficiaries. In this regard, over R190. 291 billion was transferred to SASSA. There was a substantial growth in access to social grants, with an increase of beneficiaries from 17.8 million in 2018/19 to 18.2 million in 2019/20.

State of the Nation Address (SONA), February and June 2019

The 2019 SONAs outlined the following policy objectives that have a bearing on social development sector:

Social Security: The DSD has honoured the Constitutional Court’s directive for phasing out the services of Cash Paymaster Services (CPS) for managing grant payments on behalf of the department. To date, the majority of grant beneficiaries have been successfully migrated to the South African Post Office (SAPO), and the previous grant cards replaced by different ones.

Early Childhood Development (ECD): It was announced that a certain aspect of the ECD would migrate from the Department of Social Development to Department of Basic Education (DBE). In addition, Government will proceed with the process towards two years of compulsory ECD for all children before they enter Grade 1. Following the pronouncement by the President the Department of Social Development worked with the Department of Basic Education to conceptualise and plan on this migration process. The DSD reports that it will continue to work together with the DBE until the migration process is completed.

Job Creation: The President reiterated the need to accelerate inclusive economic growth and create jobs. In the period under review, the department awarded 925 social work scholarships to students to continue with their studies. Additionally, 512 social work graduates were absorbed into employment in the following sectors; social development, nongovernmental organisation (NGO) and civil society organisations. Furthermore, the DSD as reported above continues to lead the coordination of the Expanded Public Works Programme (EPWP) for the Social Sector, which comprises of the departments of Health, Education, Social Development, Community Safety and Sports, Arts and Culture.

Gender-Based Violence: Violence against women and children has reached epidemic proportions. During the period under review, the department implemented the Emergency Response Action Plan by The Presidency on Gender Based Violence Femicide (GBVF). In this regard, 200 social workers were appointed to focus on GBV cases across all provinces. Furthermore, a National Strategic Plan (NSP) on GBVF was approved by Cabinet to give direction and consolidation of all GBV interventions across all sectors in the fight against GBV.

5.1 Financial Performance

Table 2: Budget allocation and expenditure for 2019/2020

Programme		2019/20
Programme		Final Appropriation	Actual Expenditure	Expenditure as % of final appropriation	Final appropriation 2018/19	Actual expenditure 2018/19
1	Administration	421 874	421 388	99.9%	391 746	361 367
2	Social Assistance	175 155 593	190 289 380	108.6%	162 860 723	162 709 840
3	Social Security & Administration	7 659 416	7 634 289	99.7%	7 877 021	7 840561
4	Welfare Service Policy Development & Implementation Support	1 071 807	979 201	91.4%	1 300 440	1 277 837
5	Social Policy & Integrated Service Delivery	413 282	406 123	98.3%	392 303	390 312
	TOTAL	184 721 972	199 730 381	108.1%	172 822 233	175 579 918

The department was allocated a total budget of R184.7 billion for the 2019/20 financial year (compared to R172.8 billion in the previous year). Its allocation included R175.155 billion (as compared to R171.9 billion in 2018/19 financial year) for transfers and subsidies; mainly to households for social grants. Additionally, another R7.5 billion was transferred to South African Social Security Agency (SASSA) for the Administration of Social Grants. In total it spent R199. 7 billion (108%), which was over expenditure. Over expenditure was due to earlier than anticipated payments of social grants at the end of March 2020 as a response to Covid 19 pandemic.

Virements

Virement is the process of moving money from one financial account or part of a budget (a plan for how the money will be spent) to a different one. At the close of the 2019/20 financial year, the department made the following virements:

Programme 3: Social Security Policy and Administration – an amount totalling R29.5 million was shifted from Programme 3 to Programme 1: Administration to the value of R13.5 million and Programme 4: Welfare Services Policy Development and Implementation Support to the value of R16 million to cover increased spending on programmes during the 2019/20 financial year.

The shifted funds were utilised as follows:

Programme 1: Administration – an amount of R13.5 million was shifted from Programme 3 to Programme 1 to fund the increased expenditure in Ministry and Corporate Services. Increased spending was also incurred in Information Technology (IT) infrastructure and software related to the seeding of the State Information Technology Agency (SITA) contracts for the Turnkey solution project in the 2019/20 financial year.
Programme 4: Welfare Services Policy Development and Implementation Support – an amount of R16 million was shifted from Programme 3 to Programme 4 to fund increased spending programmes during the 2019/20 financial year related to the appointment of the social workers for the GBV programme.

In term of economic classification expenditures:

Goods and Services – an amount of R1.650 million was approved to be shifted from Goods and Services to Transfers and Subsidies for an increase towards the contribution of “Foreign Government and International Organizations” (R50 000), Non Profit Organizations and payments of retirement benefits for “Households” (R1 million).An amount of R13.6 million was approved by National Treasury to be shifted from Goods and Services to Transfer payment to “German Development Bank (Kfw) as a new transfer payment.

The shifted funds were utilised as follows:

Transfers and Subsidies amounted to R14.6 million.

Approval granted by National Treasury after the 2019 Adjusted Estimates for a new transfer payment to the amount of R1 million towards the South African Council for Social Service Professionals (SACSSP);
An amount of R50 000 was approved as an increase towards the ISSA membership due to foreign exchange rate movement;
An amount of R13.6 million was approved by National Treasury to be shifted from Goods and Services to Transfer payment to “German Development Bank (KfW) as a new transfer payment.

Non-Profits Organisation amounted to R29.118 million

An amount of R29.118 million was approved by National Treasury to be shifted from Households to Non-Profit Organisations as part of the reclassification of “Food Relief Programme” funding towards providing food to the sector.

5.2 Non-financial performance

Figure 1 below provides trends in target performance of the DSD over the 2014 – 2019 MTSF. For 2019/20, the DSD only managed to achieve 49% of its planned targets. This is a regression compared to the 73% achievement rate of the 2018/19 financial year. The target achievement rate of the DSD has been gradually decreasing over the years, from 81% in 2016/17 to 49% in 2019/20.

The department reduced its targets from 92 in 2018/19 to 46 targets in 2019/20 financial year. The targets were reduced with the hope that this might address the challenge of it not achieving some targets.

Figure 1: target achievement trends of DSD over the MTSF (20114 – 2019)

5.3 Performance by Programme

Programme 1: Administration

The objective of this programme is to provide leadership, management and support service to the department and the social development sector.

Table 3: Programme 1: Administration

Total targets set Annual Performance Plan (APP)	4
Total targets reflecting in the Annual Report	4
Targets achieved in Annual Report	2
Targets not achieved	2
Performance success rate	50%
Total budget spent	R361.3 million (92.2%)

Under this sub-programme, the department did not achieve its target of integrating five internal silo systems into the Case Management System. Only two systems were integrated, namely: Accreditation of Diversion Services (ADS) and Child Youth Care Application (CYCA) SmartGov were upgraded and implemented, invoice and the e-leave modules were developed. The reasons cited for this was that the developer assigned to do the above task resigned and the department could not fill the post.

The department had also set a target to conduct an evaluation of social sector infrastructure on Early Childhood Development (ECD) and Substance Abuse Treatment Centres. This target was not achieved. The scope of the work was increased and as a result, the evaluation timeframes had to be amended and re-costed.

The department’s governance and oversight framework for the assessment of compliance of entities and associated entities was not implemented to cover all entities. Assessment was only done at SASSA but not all aspects of the Framework were implemented.

Programme 2: Social Assistance

The objective of this programme is to provide social assistance to eligible beneficiaries in terms of the Social Assistance Act 13 of 2004, and its regulations.

Table 4: Programme 2: Social Assistance

Total targets set Annual Performance Plan (APP)	1
Total targets reflecting in the Annual Report	1
Targets achieved in Annual Report	1
Targets not achieved	0
Performance success rate	100%
Total budget spent	R190.2 billion (108.6%)

The Social Assistance programme transferred R190.2 billion to SASSA during 2019/20 financial year. Expenditure for this programme was 108.6%, as opposed to 99.9% in previous year (2018/19). The reason given for this over expenditure was because of COVID-19 interventions. SASSA announced that the 1 April 2020 social grants payable would be done on 30 March 2020.

SASSA is responsible for the administration of social assistance grants. In the year under review, social grants beneficiaries increased from 17.8 million in 2018/19 to “more than 18 million” in 2019/20. Out of more than 18 million beneficiaries receiving social grants, 12.7 million are children benefiting from the Child Support Grant (CSG), 3.6 million are older persons and 1.0 million Disability Grant.

Programme 3: Social Security Policy and Administration

This programme is responsible for the provision of social security policy development, administrative justice of social grants, and the reduction of incorrect benefits payments.

Table 5: Programme 3: Social Security Policy and Administration

Total targets set Annual Performance Plan (APP)	4
Total targets reflecting on the Annual Report	4
Targets achieved in Annual Report	2
Targets not reported on in Annual Report	0
Performance success rate	50% (as per Annual Report targets)
Total budget spent	R7.6 million (99.7%)

In the APP the department had set to achieve 4 targets at the end of the financial year. However, out of the four (4) planned targets, the DSD achieved 50% (2 of 4). The 50% target rate achievement should be viewed within the context of DSD having spent 99.7% of its allocated budget.

The department did not achieve a critical target to submit the policy on voluntary inclusion of social workers in social security forum to South African Director Generals (FOSAD). Also, targets to finalise policies on mandatory cover for retirement, disability and survivor benefits and voluntary inclusion of informal sector workers in social security were not achieved. This was due to additional technical work that needed to be done and extended consultations at NEDLAC.

Chapter 11 of the NDP addresses social protection measures that should seek to promote active participation in the economy, income support programmes and in other services aimed at sustaining and improving the quality of life of the vulnerable people. Social protection is therefore broader than social security as it includes non-statutory or private social security measures as well as statutory social security measures in the form of social assistance, social welfare services, social insurance and active labour market policies.

The non-achievement of the policies mentioned above delays the achievement of this NDP priority. The vision of the NDP with regard to social development is that by 2030 South Africa should have a comprehensive system of social protection that includes social security grants, mandatory retirement service, risk benefits such as unemployment, death and disability benefits and voluntary retirement savings. The absence of having a public fund has been identified as a notable gap in the social security system that provides pensions and life insurance in South Africa. Even though 2.7 million formal sector workers principally low-income earners are excluded from such arrangements.

Programme 4: Welfare Services Policy Development and Implementation

The aim of this programme is to create an enabling environment for the delivery of equitable developmental welfare services through the formulation of policies, norms and standards and best practices and the provision of support to the implementation agencies.

Table 6: Programme 3: Social Security Policy and Administration

Total targets set Annual Performance Plan (APP)	20
Total targets reflecting on the Annual Report	20
Targets achieved in Annual Report	9
Targets not reported on in Annual Report	0
Performance success rate	45%
Total budget spent	R979.2 million (91.4%)

DSD had set to achieve 20 targets for 2019/20 under this programme and achieved 9 targets. It however spent 91.4% of the allocated budget under the programme. This is a regression in term of expenditure rate under this programme, from 98.2% expenditure in the previous financial year (2018/19).

The department capacitated nine (9) provinces on the implementation of Guidelines for Community based prevention and early intervention services to vulnerable children. However, no specific information was provided in terms specific services. It also capacitated 8 provinces on the National Plan of Action for Children. The Northern Cape session, which was scheduled for March 2020 was postponed because of the Covid-19 outbreak that led to the national lockdown.

A comparative analysis report on current ECD delivery models was compiled as planned. However, it is not clear why was this specific target planned for this financial year as DSD did not give any background information about this target also there is no proof of impact this had on communities served. It is therefore not easy to see if the target is really addressing the challenge that communities face.

The National Drug Master Plan (NDMP) 2019 – 2024 was submitted and approved by cabinet in October 2019. This plan enables the coordination of departments and local authorities in line with the Prevention and Treatment for Substance Abuse Act, No. 70 of 2008. Its purpose is to ensure that the country has a uniform response to substance abuse.

The department did not achieve the target to review the White Paper on Families because few service providers that were available were not registered on the Children's Services Directory (CSD). The root of many social ills comes from a family level and looking at the nature of DSD services it requires the department to have a clear understanding of families. Strengthening families, especially those that are at risk should be the priority of DSD.

DSD has to ensure that the dignity and rights of all persons with disabilities is preserved and met, through the provision of relevant socio-economic programmes and services that ensure their inclusion. However, a target of disability inclusion embedded in Government-wide Institutional Arrangements was not achieved. The reasons stated for this by DSD was that there was no capacity. Additionally, the Annual Progress Report on Implementation of the White Paper on the Rights of Persons with Disabilities (WPRPD) was not developed. Also, the target to present the White Paper on Social Development to Cabinet in March 2020 was not achieved due to cancellation of the Cabinet sitting as a result of the national disaster management lockdown.

Programme 5: Social Policy and Integrated Service Delivery

The programme’s responsibility is to support community development and promote evidence-based policy making in the Department and the Social Development Sector.

Table 7: Programme 3: Social Security Policy and Administration

Total targets set Annual Performance Plan (APP)	16
Total targets reflecting on the Annual Report	16
Targets achieved in Annual Report	10
Targets not reported on in Annual Report	0
Performance success rate	62.5%
Total budget spent	R406.1 million (98.3%)

As per the 2019/20 annual performance plan of the DSD, this programme identified 16 targets to achieve at the end of the financial year. The department only managed to achieve 10 targets (62.5%). The programme spent R406.1 million (98.3%) of the allocated budget, as opposed R390.312 million (99.5%) in the previous financial year.

Through this Programme, the department achieved its target of conducting capacity-building workshops on the Developmental Model for Community Nutrition Development Centres (CNDCs) in all provinces. It also facilitated the development of Community Mobilisation and Empowerment Framework.

It however, did not achieve to submit the Non-Profit Organisation (NPO) Amendment Bill to Cabinet as envisaged for the year under review. This was due to due to delays in issuing and approval of the DPME SEIAS Certification. It also only completed 97.7% instead of 100% (32 299 out of 33 065) NPO applications for registration within two months of receipt. The Department reported that this was due to incorrect targeting as it is impractical to process all received applications. Also, only 44.3% instead of 100% (26 178 out of 59 118) NPO compliance reports were processed within two months of receipt due drastic increase in submission of NPOs annual reports as a result of the “Know Your NPO Status” campaign. The non-profit organisation (NPO) Amendment Bill was not submitted to Cabinet as envisaged during the year under review.

Report of the Auditor-General (AG)

The department achieved consecutive qualified audit opinions between 2016/17 to 2018/19. For 2019/2020 financial year, the department received an unqualified opinion with no findings.

6.1 Reliability of information

The AG did not identify any material findings on the usefulness and reliability of the reported performance information for programme 4 (welfare services policy development and implementation support).

6.2 Compliance with Legislation

No material findings were identified on compliance with the specific matters in key legislation set out in the general notice issued in terms of the Public Audit Act, 2004 (Act No. 25 of 2004) (PAA).

6.3 Unauthorised, fruitless and wasteful expenditure

During this financial year, 2019/20, the department identified irregular expenditure to the value of R2.5 million compared to R7.6 million in 2018/19. The reason for this was (the same as the last and other previous financial years) non-compliance to the Public Financial Management Act, 1999 (Act No. 1 of 1999) and National Treasury Practice Notes: SCM processes were not followed. The department indicated that there was an unforeseen and unavoidable need for additional goods or services during departmental activities.

It also incurredR15 million unauthorised expenditure. This was due to early payment of social grants for April, which was done end of March 2020 as a response to Covid 19 pandemic. This implied that the expenditure was to be recorded correctly in the Annual Financial Statements for the 2019/20 financial year. National Treasury would regularise this expenditure correctly in 2020/2021 financial year.

Fruitless and wasteful expenditure amounted to R903 million (compared to R713 million in the previous financial year). Increase in the current year relates to incomplete delivery of Assets ordered and damage to hired cars.

6.4 Human Resources

The following table gives a breakdown of Employment Equity under Human Resources as at 31 March 2020, in terms of race, gender and persons with disabilities:

Table 8: Employee breakdown by race and gender

Race	Male	Female
African	284	627
Coloured	5	20
Indian	8	9
White	13	31
Total	310	687

Table 8 highlights the number of DSD employees by race and gender in 2019/20 financial year. DSD had a total of 310 male and 687 female employees. A total of 284 were African males and 627 African females, only 5 Coloured males and 20 Coloured females, 8 Indian males and 9 Indian females, 13 were White males and 31 White females.

Table 9: Employees with Disabilities

Race	Male	Female
African	6	8
Coloured	0	0
Indian	1	1
White	2	0
Total	9	9

The above table indicate that there were only 9 employees with disabilities during the year under review (2019/20). Out of that 6 were African males, 8 African females, 1 Indian male and female and only 2 White males.

Financial and Fiscal Commission (FFC)

The FFC particularly highlighted that over the past three financial years there had been consistent low budgeting and expenditure for Social Crime Prevention and Victim Empowerment sub-programme and People with Disabilities sub-programme. This was a worrying trend at a time when the country is faced with the scourge of gender based violence and femicide and high rate of substance and drug abuse.

It advised the Committee to consider budget allocated, expenditure trends, achievement of targets and assess if there was value for money – in terms of improving outputs and outcomes with regard to the impact on people on the ground.

OVERVIEW OF FINANCIAL AND NON-FINANCIAL PERFORMANCE OF THE SOUTH AFRICAN SOCIAL SECURITY AGENCY (SASSA) FOR 2019/2010 FINANCIAL YEAR

The mandate for the South African Social Security Agency (SASSA) is to ensure the provision of comprehensive social security services against vulnerability and poverty within the constitutional and legislative framework. As per this mandate, SASSA is primarily responsible for implementing the Medium Term Strategic Framework’s (2014 – 2019). The priority areas for SASSA for 2014 – 2019 are as follows:

Reduce income poverty by providing social assistance to eligible individuals;
Improving service delivery;
Improving internal efficiency; and
Institutionalising social grants payment system within SASSA.

Furthermore, SASSA has a critical role to play in implementing the annual priorities identified in the State of the Nation Addresses (SONA). For the year under review (2019/20), SONA identified priorities that have implications on the social development sector. These were identified on page 20 of this report.

SASSA also has a role to play in the implementation of the National Development Plan (NDP) priorities for the social sector. It implements the following priorities:

Eliminating income poverty by reducing the proportion of households with a monthly income below R419 per person (in 2009 prices) from 39 percent to zero. To achieve this goal, the Plan identified these milestones:

Ensure household food and nutrition security.
- Entrench a social security system covering all working people, with social protection for the poor and other groups in need, such as children and people with disabilities.

Realise a developmental, capable and ethical state that treats citizens with dignity.

Creating a comprehensive social protection system that includes social security grants, mandatory retirement savings, risk benefits (such as unemployment, death and disability benefits) and voluntary retirement savings. Measures to achieve this goal were identified as follows:

Expand public employment, with a focus on youth and women.
The retirement savings and risk benefit gap should be closed through reforms, including mandatory contributions, with consideration given to subsidizing these contributions for low-income or periodic workers.
Developing a capable and developmental state.

The analysis of SASSA’s annual performance will also reflect on how NDP priorities, MTSF outcomes and SONA priorities were responded to or implemented.

8.1 Financial Performance

Table 10 shows that the overall budget of SASSA for the period under review was R7 561 772 billion, which was a decline from R7 762 878 billion in 2018/19 financial year. The decline was due to reductions mounting to R573 957 million. This marked an 8% reduction. The budget was further reduced by R60 million to make funds available for the DSD operated Gender Based Violence Command Centre.

Table 10: Budget allocation and expenditure per programme

Programme	2019/20 Budget Allocation R’000	2019/20 Actual Spent R’000	Percentage %
Programme 1: Administration	3 010 397	2 710 181	90%
Programme 2: Benefits Admin Support	4 551 376	4 843 360	106%
Total	7 561 772	7 553 541	100%

The actual expenditure for the year under review was R7 553 541 billion, which was an over expenditure. In 2018/2019, SASSA had under spent by R1 300 827 million.

8.2 Non-financial performance

Table 11 shows that in total, for the year under review, SASSA had set to achieve 35 targets compared to 40 targets in 2018/2019. It managed to achieve 26 targets (29 in the previous year), meaning 9 targets (11 in the previous year) targets were not achieved. A total of 4 targets were not met in Programme 1: Administration and a total of 4 targets in Programme 2: Benefits Administration and Administration and Support.

The performance of the Agency based on the achievement of targets demonstrates an improvement over the past two financial years – 64% in 2017/2018 and 72% in 2018/2019 financial year. As shown in the table below, for the year under review, the Agency achieved 74% of its planned targets.

Table 11: Achievement of targets

Planned Targets	Achieved Targets	Targets not Achieved
35	26	9
Percentage	74.3%	25.7%

8.3 Performance Information by Programme

The Agency functions through two main programmes, namely, Programme 1: Administration and Programme 2: Benefits Administration and Support. Analysis of the Agency’s performance will be aligned to the achievement of the priorities of the MTSF mentioned earlier as well as the 2019 State of the Nation Address priorities. These are also aligned to the National Development Plan priorities.

8.3.1 Programme 1: Administration

The purpose of this programme is to provide leadership, management and support services to SASSA.

Under this programme, SASSA had planned to achieve 22 targets and it managed to achieve 18 targets (82%). This programme mainly contributes to government’s priority, as demonstrated below:

Improving internal efficiency.

SASSA has over the years embarked on a process of automating its business processes so as to render an efficient social grant administration process. Key to achieving this goal, for the year under review, SASSA had set targets to upgrade network connectivity infrastructure from 1MB to 2MB for offices, pilot an electronic queue management in 1 office, automate grants payment records, implement scanning solution in 45 local offices, complete requirements analysis for grants E-forms and pilot in 4 regions biometrically identity Access Management System for SOCPEN. All these targets were achieved with the exception of the target to upgrade network connectivity.

Equally important in ensuring function and efficient payment of social grants, SASSA had set a target to establish an interface with South African Post Office (SAPO), BankservAfrica and DSD. This target was achieved. This was a critical target as there had been serious administrative and payment challenges at SAPO. The Committee had on a number of occasions expressed its concern over the lack of stakeholder management between SASSA and SAPO. It particularly emphasised the importance of stringent oversight by SASSA over its Service Level Agreement with SAPO.

SASSA also achieved the target to have its Ten Year Building Infrastructure Plan approved. It was developed to address shortages of suitable facilities and upgrade and repairs of existing facilities.

8.3.2 Programme 2: Benefits Administration and Administration and Support

The purpose of this programme is provide a grant administration service and ensures that operations within SASSA are integrated. It also ensures implementation of the full value chain of grants administration.

For the year under review SASSA had set to achieve 13 targets under this programme. It managed to achieve 8 targets (62%). This Programme contributes towards achievement of the following government priorities (encompassing SONA and NDP priorities):

Reduce income poverty by providing social assistance to eligible individuals.

Social Assistance Programme is government’s main poverty reduction programme. Under this programme, SASSA had planned to reach 1.6 million new social grants applicants. This target was over achieved by 125 761, making a total of 1 725 761 applications processed. This increased the number of social grants beneficiaries to 18 290 592 from 17 811 745 in 2018/2019. Child Support Grant and Old Age Grant account for the highest number of beneficiaries, 12 787 448 and 3 676 791 respectively. The significant rise in unemployment rate (30.8%) in the country has resulted in increase in levels of poverty, inequality and vulnerability. Youth and women are the most affected population growth.

According to Statistics South Africa Quarterly Labour Force Survey in Quarter 3 of 2020/2021 financial year, the unemployment rate among 15 – 24 years old and 25 – 34 years old was 61.3% and 37.8% respectively. These are the main age cohorts of caregivers of children receiving Child Support Grant. The Survey also showed that Black African women are the most vulnerable with an unemployment rate above 36.4%. Old Age Grant has also been found to have significant contribution towards income security of many households, particularly those with economically active but not employed age groups. A study by Ralston et al published in the International Journal of Environmental Research and Public Health points to evidence that Old Age Grant has protective effects for all other members of households. Women are more likely to pool their pension income with household members and their pensions also has a greater effect on other household members’ health and wellbeing. Other studies have also shown that Old Age Grant and Child Support Grant contribute towards reduction of child deprivation and increase in school attendance.

The Social Relief of Distress (SRD) is another poverty reduction programme implemented by SASSA. It is a temporary provision of assistance intended for persons in dire material need that they are unable to meet their families’ most basic needs. It can be provided in a form of food parcels or vouchers. For the year under review, SASSA had set a target to award 252 833 SRD interventions to individuals and households under distress at a cost of R410 million. It managed to award 344 482 SRD applications. It over achieved this target by 91 649 due to high demand as a result of socioeconomic conditions of the country.

SASSA also over achieved its target of processing 560 000 applications for children aged 0-1 by processing 745 010. These are the children who were identified as had been excluded from the social assistance programme due to lack of identity documentations, among other reasons.

As indicated above the social assistance programme has had a significant impact towards well-being of beneficiaries and by extension communities. In addition, through the SRD programme, SASSA contributes towards the achievement of the aforementioned government priority. It awards SRD in rand value to cooperatives and to Small, Medium and Micro Enterprises (SMMEs). For the year under review, it had set a target to award R123 million (30%) but only managed to award R78 181 528 (19%) of R402 346 000 of total SRD rand value.

Improving service delivery

SASSA set 4 targets under this programme that contributes towards achievement of this priority. It set targets to process 95% of new social grant applications within 10 days. It achieved it by processing 99%, with 86.30% processed within 1 day. It also achieved its target of processing 100% of received foster care court orders within 10 days. It also achieved its target to manage the service provider (SAPO) tasked with payment of social grants by monitoring the implementation of the Service Level Agreement. It however, failed to achieve 100% monitoring of active cash pay points. It managed to monitor 99.8% (1 625 of 1 629).

9. Report of the Auditor-General (AG)

Similarly, to 2018/2019 audit opinion, SASSA received an unqualified opinion with findings on compliance.

9.1. Summary and Analysis of Annual Financial Statements

9.1.1 Irregular Expenditure

For the year under review, SASSA incurred an irregular expenditure of R102 409 million. This was over and above the historical irregular expenditure of R1 128 billion. Irregular expenditure for 2019/2020 included the following:

R14 million expenditure incurred as a result of procurement without competitive bidding,
R5 million expenditure incurred as result of contravention of various procurement processes,
R84 million expenditure incurred due to unapproved contract extensions.

The AG found that effective and appropriate steps were not taken to prevent irregular expenditure. Also, no investigations were conducted on this irregular expenditure.

9.1.2 Fruitless and Wasteful Expenditure

SASSA incurred R197 000 fruitless and wasteful expenditure due to late cancellations or no shows for travel and accommodation. It also overpaid an amount of R4 093 million due to procurement related non-compliance where a service provider who was not the highest scoring bidder was appointed. This amount, was therefore, the difference between this bidder and the highest scoring bidder.

9.1.3 Supply Chain Management

The AG found that some of the process of emergency goods and services procured through quotations in response to the National State of Disaster were above the prices negotiated by the National Treasury. Also, some of the specifications of emergency goods and services procured through quotations in response to the National State of Disaster were not in accordance with the specifications determined by the national Department of Health as required by paragraph 3.76(i) of National Treasury Instruction No.8 of 2019/20. Furthermore, some goods and services with a transaction value above R500 000 were procured without inviting competitive bids and deviations were approved by the accounting officer despite it being practical to invite competitive bids. This was contrary to National Treasury regulations 16A6.1 and 16A6.4.

In addition, some contracts were extended or modified with the approval of a properly delegated official, contrary to section 56 of the Public Finance Management Act (PFMA). Lastly, some of the goods and services for social relief of distress relating to food parcels distribution to be procured on behalf of the Department of Social Development with a transaction value above and below R500 000 were awarded without inviting competitive bids and deviations were approved by the accounting authority despite it being practical to invite competitive bids.

9.1.4 Consequence Management

The AG could not find sufficient appropriate evidence that disciplinary actions were taken against officials who deliberately or negligently ignore their duties and contravene legislation. Also, those who had incurred irregular expenditure as required by section 51(1)(e)(iii) of the PFMA. This can be seen as acceptable and tolerated.

9.5 Human Resources

As the end of the financial year, SASSA had a vacancy rate 56.3%. Out of 10 598 vacant posts, it filled 8 242 posts (96%), made up of 8 011 permanent workers and 231 contract workers. This figure also includes 176 (2.1%) employees with disabilities.

Financial and Fiscal Commission

Analysis of the social assistance programme

Analysis by FFC on the social assistance programme revealed that the programme accounts for 94.8% of the Department of Social Development’s budget. The Old Age Grant and the Grant-in-aid showed an upward trend from 2017/2018 financial year, 9.9%, 10% and 9.1% in 2019/2020. It also showed that there was an over expenditure of 8.6% in 2019/2020, mainly due to increase in social grants payments. Over expenditure mainly occurred in Old Age Grant and Child Support Grant payments, 8.5% and 8.8% respectively. It expressed overspending and underspending in the programme as a matter of concern as it indicates inefficiencies.

OVERVIEW OF FINANCIAL AND NON-FINANCIAL PERFORMANCE OF THE NATIONAL DEVELOPMENT AGENCY (NDA) 2019/2020 FINANCIAL YEAR

The National Development Agency (NDA) is mandated to contribute towards the eradication of poverty through supporting civil society organisations (CSOs) by funding them to implement development projects in poor communities, as well as strengthening their institutional capacity.

The National Development Plan (NDP), the Medium-Term Strategic Framework (MTSF), Sector Plans and the United Nations Sustainable Development Goals (SDGs), and the 2019 State of the Nation Address (SONA) guide the NDA’s functions. The contribution of the NDA on the above strategic frameworks is discussed below:

National Development Plan

The NDA, as a public entity, reporting to the Department of Social Development, has aligned its strategy to respond mainly to chapter 11 of the NDP on social protection. The NDP vision 2030 has a long-term perspective to eliminate poverty and reduce inequality by 2030. According to the plan, South Africa can realise the goal of eliminating poverty and reduction of inequality by drawing on the energies of its people, growing an inclusive economy, building capabilities, enhancing the capacity of the state, and promoting leadership and partnerships throughout society. This, however, requires a new approach, moving away from a passive citizenry of receiving services from the State, to one that systematically includes the socially and economically excluded, where people are active champions of their own development, and where Government can work effectively to develop people’s capabilities to lead the lives they desire.

During the strategic planning framework period, the social development sector adopted the Mikondzo approach as its vehicle of responding appropriately to poor community service delivery needs. The NDA’s revised strategy is aligned to the NDP/Vision 2030. The alignment is informed by the NDA mandate of contributing towards the eradication of poverty in poor communities. The mandate directly contributes to the main goal of the NDP of reducing poverty, inequalities and unemployment.

Medium Term Strategic Framework

In the attainment of the 2030 goals, the MTSF identifies the priorities to be undertaken during the 5-year implementation plan (2014-2019). The NDA has adopted MTSF that focuses on civil society organisations in the most deprived and prioritised districts in South Africa, and its main contribution is building capacity at these organisations. The strategy is based on the NDA integrating its work with the social development sector, municipalities, and other public and private agencies that work with communities and civil society organisations.

Over the year, the NDA continued to empower this sector through various development interventions. These interventions ensured that many organisations in this sector remain sustainable and continue to serve in communities where the need for its services remain high. Capacity building and grant funding, amongst the interventions that the NDA renders, ensured that the CSOs are institutionally and economically empowered to govern themselves effectively and contribute towards the economic upliftment of the communities they serve.

In fulfilling the mandate of mobilising resources and acting as a conduit for disbursement of the same funds to CSOs in the pursuance of their developmental aspirations, the NDA raised R55.7 million worth of financial and non-financial resources in the 2019-20 financial year. These resources have benefitted CSOs in strengthening their ability to manage their CSOs better and to comply with legislative authorities.

Sustainable Development Goals

During this strategic period, Government became a signatory on the United Nations (UN) Sustainable Development Goals (SDGs). The 2030 Agenda acknowledges that eradicating poverty in all its forms and dimensions, including extreme poverty, is the greatest global challenge and an indispensable requirement for sustainable development. The first Sustainable Development Goal aims to “End poverty in all its forms everywhere”. Its seven associated targets aim, among others, to eradicate extreme poverty for all people everywhere, reduce at least by half the proportion of men, women and children of all ages living in poverty, implement nationally appropriate social protection systems and measures for all, and by 2030 achieve substantial coverage of the poor and the vulnerable.

The NDA priorities are aligned to the strategic objectives on the SDGs, especially in the area of grant funding for struggling CSOs to enable them to implement poverty relief programmes for the vulnerable and those who are not so fortunate in South African societies. Fighting poverty requires concerted efforts from both public and private sector organisations. The NDA recognises that CSOs are the life-blood of South African communities and their services are critical in the social development sector efforts to address the needs of poor communities and vulnerable people.

For the year under review, the NDA has furthermore grant-funded 153 CSOs, enabling them to implement poverty relief programmes targeting the vulnerable and poor in our society.

State of the Nation Address 2019

The 2019 SONA made mention of two critical strategic objectives that have a direct bearing on the NDA. The SONA 2019 reaffirmed government’s commitment to job creation, end the gender-based violence and femicide (GBVF), and focus on improving Early Childhood Development (ECD). The NDA, as an entity of the Department of Social Development (DSD), has repositioned its strategy to contribute directly to the above-mentioned strategic objectives.

For the year under review, the NDA conducted an evaluation study, which focused on food security, capacity building, income generation projects, ECD projects, grant funding processes and resource mobilization strategies of the NDA. The evaluation study revealed that income generation projects funding model must prioritise creation of jobs for community members to respond to high unemployment and local job creation opportunities. Most projects funded for income generation have not succeeded in creating sustainable jobs for the youth. Very few members of the youth participate in these projects despite their need in many areas of development.

The scourge of GBVF, which has since reached pandemic proportions, and continues to ravage families and communities across our country. In line with its mandate of supporting and building the capacity of CSOs, the NDA entered into a partnership with the DSD and the Interim Steering Committee on GBVF to implement the Victim Empowerment Programme (VEP) in response to Gender-Based Violence and Femicide.

The NDA grant-funding focuses on assisting CSOs with seed funding that enables them to provide services to communities. The funding specifically targets CSOs that do not meet funding requirements of most funding institutions. The NDA aims to unlock their potential for more funding and increase their sustainability. Because of the funding, children within the ECD Centres were able to access ECD services, which meet the norms and standards of the sector. This in turn will increase children development prospects and provides an opportunity for caregivers to be involved in economic activities.

11.1 Financial Performance

As Table 12 below illustrates, the NDA secured a final appropriation amounting to R253.1 million for 2019/20. Expenditure amounted to R245.5 million, resulting in under-expenditure of R7.6 million. Programme 2 (the CSO Development Programme) accounted for 57.4 per cent of the total under-expenditure incurred by the NDA. The under-expenditure incurred under programme 2 remains relatively high in comparison with the other programmes even though it decreased from R9.6 million in 2018/19 to R4.3 million in 2019/20.

Programme 3 (the Research and Development Programme) underspending marginally decreased from R2.2 million in 2018/19 to R2.1 million in 2019/20 whereas there is a significant decrease in underspending for Programe 1 (the Governance and Administration) from R9 million in 2018/19 to R1.2 million in 2019/20.

The under-expenditure incurred by the NDA is a concern especially in Programme 2, which is critical in the fulfilment of the NDA primary mandate. This programme contributes directly to the NDP aspiration of eliminating poverty and reduce inequality by 2030. Therefore, it is imperative for the NDA to utilise the available resources optimally.

Table 12: Budget allocation and expenditure per programme

Programme R’000	2019/20			2018/19
Programme R’000	Final appropriation	Final Appropriation	Final Appropriation	Final Appropriation	Actual expenditure	Over/under expenditure
Governance and Administration	114 990	110 715	110 715	110 715	113 799	1 191
CSO Development	128 120	126 434	126 434	126 434	123 740	4 380
Research and Development	10 030	10 324	10 324	10 324	7 987	2 052
TOTAL	253 140	247 473	247 473	247 473	245 526	623

11.1.1 Financial Report for year ended 31 March 2020

NDA’s assets exceed its liabilities by R17.8 million, representing a healthy financial state. The NDA’s current assets were valued at R53.9 million, with liabilities totaling to R45.3 million for the year under review. These liabilities comprise of payables from exchange transactions, payables from non-exchange transactions, provisions, short- term employee benefits, accrual for committed projects, and unutilized third party funds (deferred liabilities).

Figure 2 below illustrates the proportion of the NDA budget spent on specific line items according to economic classification:

Figure 2: Trends in expenditure per line items according to economic classification, (R’ million)

The compensation of employees accounted for more than half of the NDA total expenditure at R135.4 million (51.9%), goods and services at R69.1 million (40.1%), whereas transfers and services accounted for only R11 million (7.2%) in 2019/20. Over the medium term, the compensation of employees will account for 62.3% of the NDA total expenditure, goods and services (31.7%) and transfers and subsidies (6%).

11.2 Non-Financial Performance

Table 13 below illustrates the NDA’s target performance for the 2019/20 financial year in comparison with budget spent for the same period.

Table 13: Achievement of targets

	2019/20
Programme	Targets	Fully Achieved	Not fully achieved	% of targets achieved 2019/20	% of budget spent 2019/20
Governance and Administration	4	0	4	0%	98.96%
CSO Development	7	6	1	85,75%	96.58%
Research and Development	4	3	1	75%	79.63%
Total	14	9	6	64%	96,99%

As Table 13 above indicates, during the 2019/20 financial year, the NDA achieved only nine (9) of the 14 planned targets (which is 64%). The NDA’s target performance should be viewed in the context of it having spent 96.99% of its allocated budget. There should be an alignment between the budget spent and targets achieved.

Figure 3 below illustrates trends in target achievement of the Agency between 2017 and 2020:

Figure 3: trends in target performance of the National Development Agency for the past three financial years:

Figure 3 above depicts that:

The NDA’s annual performance targets have been reduced to 14 in 2019/20 from 34 in 2017/18.
There has been an improvement in target performance rate from 59% (10 of 17 targets) in 2018/19 to 64% (9 of 14 targets) in 2019/20.
Both the 2019/20 and 2018/19 shows a regression compared to the 91.17% (31 of 34) achievement rate achieved in 2017/18 financial year.

The above analysis included the target of achieving an unqualified audit opinion without findings, which the Agency did not count it as a target. Hence, this analysis has 14 targets whereas the Agency has 13.

Report of Auditor-General

The NDA received an unqualified audit opinion with significant material findings for the 2019/20 financial year. This means that the NDA financial statements present fairly, in all material respects, the financial position of the NDA as at 31 March 2020.

Reliability of information

The AG evaluated the usefulness and reliability of performance information in Programme 2 (the CSO Development). This was to determine whether the reported performance information was properly presented and whether performance was consistent with the approved performance planning documents.

In various indicators, the AG was unable to obtain sufficient appropriate audit evidence for the reported achievements of four of the seven material indicators relating to programme in question. The AG reports that it was unable to confirm the reported achievements by alternative means. Consequently, the AG could not determine whether any adjustments were required to the reported achievements in the annual performance report for the indicators listed hereunder.

Table 14: indicators that the AG was unable to obtain sufficient audit evidence

Indicator description	Reported achievement
KPI 05 – Number of CSOs assisted to formalise their structures	1 008
KPI 06 - Number of CSOs capacitated to comply with registration legislation	5 011
KPI 07 - Number of CSOs capacitated in civil society organisational management per year	5 263
KPI 10 - Number of CSOs referred to suitable resource opportunities per year	2 272

The AG reports that the information presented in the performance information in the annual report of the NDA should be considered in the context of the material findings on the usefulness and reliability of the reported performance information in paragraph 17 of the AG report on page 59 of the NDA annual report.

Compliance with Legislation

The material findings on compliance with specific matters in key legislation are as follows:

Expenditure management

Effective and appropriate steps were not taken to prevent irregular expenditure of R39.21 million as disclosed in note 27 to the annual financial statements, as required by section 51(1)(b)(ii) of the Public Finance Management Act (PFMA). The majority of the irregular expenditure is due non-compliance with supply chain management (SCM) legislation.

Strategic planning and performance management

Quarterly reports were not submitted to the executive authority as required by treasury regulation 30.2.1.

Procurement and contract management

Some goods and services with a transaction value above R500 000 were procured without inviting competitive bids, as required by treasury regulations 16A6.1. This non-compliance was identified in the procurement processes for training programmes.

Consequence management

The AG was unable to obtain sufficient appropriate audit evidence that disciplinary steps were taken against officials who had incurred irregular expenditure and fruitless and wasteful expenditure, as required by section 51(1)(e)(iii) of the PFMA. This was because proper and complete records were not maintained as evidence to support the investigations into irregular expenditure.

Internal control

The AG report pointed out that leadership did not implement effective monitoring controls to ensure reliable performance reporting, nor did they exercise adequate oversight over compliance with applicable legislation. It stated that the management did not prepare regular, accurate and complete performance reports that are supported and evidenced by reliable information. Furthermore, the management did not review and monitor compliance with legislation.

Human Resources

The NDA has five divisions that implement both the primary and secondary mandates. These are Development Management and Research, Finance, Office of the Chief Operation Officer (COO), Office of the Chief Executive Officer (CEO), and Corporate Services Support. As at 31 March 2020, the NDA employed 186 employees out of the 219 funded posts, which include employees on fixed term contracts, within its total workforce. This represent a vacancy rate of 15% The NDA reported that the vacancy rate is high this financial year due to the reprioritisation and employee exits wherein recruitment is still underway.

As at 31 March 2020, the NDA reports that 15 employees left the organisation, the majority of which were due to the expiry of the fixed term contracts.

With regard to labour relation matters, two progressive disciplinary matters were finalised and were due to non-compliance with NDA policies and procedures, and/or insubordination.

In terms of equity target and employment equity status, females at 65%, of whom 95% are Africans, mostly represent the NDA’s employment profile. Although females dominate the organisation’s employment statistics, there is still a need to increase women representation at senior management level to achieve the employment equity targets at that level.

Financial and Fiscal Commission (FFC)

The FFC highlighted that there has been consistent low budget growth and spending on the CSO Development Programme. This is a core programme. Administration Programme continues to account for the highest growth even though it is not a core programme. It found that spending on Research and Development Programme increased by 24.4% whilst spending on CSO Development Programme declined by 3% between 2016/2017 to 2019/2020. During the same period spending on Administration Programme remained stagnant at 0%. The administration programme will account for 48.8% of the NDA total expenditure, CSO development (46.8%) and research and development (4.4%) between 2019/20 and 2022/23. The Administration Programme rather than the CSO Development Programme will become more important, in expenditure terms, for NDA over the MTEF period. This is a worrying trend. The FFC also found that the Agency’s income generation projects funding model has not yet succeeded in creating sustainable jobs for the youth.

Also, the Agency spends more on compensation on employees compared to goods and services. The FFC was of the view that NDA’s compensation of employees budget is growing in importance to almost two third (2/3) of the NDA total expenditure, potentially crowding out other spending items. The significant reduction in the public wage bill could also affect the NDA disproportionately.

There was also consistent underspending across programmes and this again is a matter of concern as it points to inefficiencies. FFC found that underspending in the CSO Development programme remains relatively high in comparison with the other programmes even though it decreased from R9.6 million in 2018/19 to R4.3 million in 2019/20. The Research and Development programme underspending marginally decreased from R2.2 million in 2018/19 to R2.1 million in 2019/20. There was a significant decrease in underspending in the Governance and Administration programme from R9 million in 2018/19 to R1.2 million in 2019/20.

Gender Based Violence

The department reported that in the 2019/20 financial year, R93 million was reprioritised (R60 million from SASSA) and R33 million (DSD Operational) to fund the GBV project as announced by the President, to focus on specific interventions related to GBV. This amount was allocated to Goods and Services under the sub-programme: Social Crime and Victim Empowerment in the 2019 Adjusted Estimates of National Expenditure. However, the amount could not be used by 31 March 2020 due to non-approval by National Treasury and could not be requested as roll-over funds due to all savings being ring-fenced for COVID-19.

COMMITTEE OBSERVATIONS

Department of Social Development

The Committee noted and welcomed improved audit findings of the department, which improved from qualified in 2018/2019 to unqualified with no findings in 2019/2020.

The Committee also welcomed the reduction of wasteful and fruitless expenditure from R79 million to R6 million. It was however concerned over the minimal reduction of irregular expenditure from R224 million to only R147 million, which was mainly incurred by the entities, despite interventions implemented.

The Committee however noted with concern that steps reported by the department to reduce irregular expenditure as well as wasteful and fruitless expenditure were the same as those reported on in the 2018/2019 financial year.

The Committee also welcomed improvements in the reporting format which followed an evidence based model. It however, advised the department that the report should clearly articulate challenges or problems the department is trying to address, activities or outputs, outcomes and impact. This will enable the Committee to conduct well informed oversight.

Notwithstanding the aforementioned improvements, the Committee reiterated its concern over weaknesses in the department’s oversight over its entities. Despite it receiving a clean audit outcome, entities continued to receive unqualified opinion with findings on non-compliance to legislation.

The Department acknowledged that it has not done enough in this area but has since moved the Entity Oversight unit to the office to the Director General. It also sourced the services of a service provider to provide technical expertise on how the entity oversight framework can be strengthened. It also instituted a DG/CEOs interface forum. The Minister also launched a forum with CEO which meets on a quarterly basis. It has also developed an entity oversight framework that not only includes SASSA and the NDA but also the Central Drug Authority (CDA) and the South African Council for Social Services Professions Council (SACSSPC).

The Committee expressed a concern over the vacant post of the Director – General. The post has been vacant for a number of years. It wanted to know how far was the recruitment process.

The Committee reiterated its concern over the fact that the department only has 9 people with disabilities employed. This falls far short of the government’s target of 6%.

The Committee expressed a concern over the lack of implementation of the 2018 Cabinet Resolution on the employment of social workers by relevant government departments.

The Committee welcomed the launch of the 16 Days of Activism against women and the five days of mourning led by the South African government. However, indicated that interventions to fight the abuse of women, children and vulnerable citizens should happen 365 days a year.

The Committee expressed a serious concern that out of 231 000 registered NPOs in the country, about 70 000 of them were found to be non-compliant to the Nonprofit Organisations Act (No 71 of 1997). This is worrying because these NPOs are funded by the department.

The department explained that the Act mandates it to register and keep database of NPOs. There were currently 233 000 NPOs that were on the database. The database can be accessed from the department’s website. It had found that a lot of NPOs were not complying with the requirements of the Act of submitting annual reports and audited financial statements required for their annual registration. It then launched a Know Your Status campaign and compliance increased to 71% in 2019/2020. From 1 April 2021 the department will deregister all NPOs not complying.

The Committee was concerned over the 51% targets not achieved by the department. It found this to be unacceptable and hoped that the department had made progress to achieve them. The non-achievement of targets was also reflected in the quarterly performance reports presented to the Committee. The Committee had also noted with concern the continuous underspending in all programmes throughout the quarters. This was especially the case in Programme 3. It also observed that the department under performed under Programme 1, which is a critical programme of the department. The management and administration of the entire department resides under this programme. Critical targets that constitute the core mandate of the Programme were not achieved.

The Committee further expressed a concern over the declining budget of substance abuse sub-programme from 2018/2019 and over the medium term period. In 2018/2019 there was R86. 1 million budget cut and over the medium term period it will decline by 40.2% between 2018/2019 – 2021/2022. This is a worrying trend when the country is faced with the scourge of drug and substance abuse which evidence has shown that it is a major cause of gender based violence and femicide, road accidents and other social ills.

The Committee notes the interventions made by the social development portfolio to respond to the Covid 19 pandemic. It however, calls for the social development portfolio to consider addressing questions pertaining to their sustainability raised on 12 of this report.

The Committee corrected the department’s report that the target to submit the Children’s Amendment to Parliament for consideration was not achieved due to delays in Parliamentary processes. It was actually the Committee that instructed the department, based on a legal advice it received, to make sure that all procedural requirements were followed and expedite the Bill’s submission to Parliament.

National Development Agency

The Committee expressed a concern that compensation of employees accounts for the biggest budget allocation compared to service delivery programme – CSO Development programme.

The Committee was generally concerned about the AG’s findings on the performance of the NDA, which showed no improvement and regression in certain areas, such as provision of assurance by senior management and internal audit unit. It also regressed on ensuring consequence management to the employees involved financial misconduct. There was also regression on management (accounting officers/authorities and senior management) not ensuring that actions plans are in place and monitored to improve internal controls and prevent recurrences of reporting findings.

The NDA reported that it had since revised its human resources policies and with these policies in place it had started a process of recouping monies incurred as fruitless and wasteful expenditure from implicated officials.

The Committee expressed a concern over the use of consultants when the social development portfolio has high number of vacancies.

South African Social Security Agency

The Committee expressed a serious concern that SASSA ignored National Treasury regulations and warnings with regard to emergency procurement of for Covid 19.

It also expressed a serious concerned that the AG yet again found that management did not respond with the required urgency to its messages about addressing risks and improving internal controls. Also that officials who deliberately or negligently ignored their duties and contravene legislation were not held accountable. There was still a risk of instability due to prolonged vacancies in key positions. These were the same findings the AG made in 2018/2019 financial year. This was despite SASSA reporting to the Committee on actions it had taken to address these findings. This demonstrates serious disregard of AG’s findings.

The Committee was concerned that SASSA reported that it under spent by 90% under compensation of employees due to vacant funded posts not filled as a result of a moratorium on filling of posts to allow for the business review process. Critical senior management posts remain vacant - Executive Manager: Corporate Services, Chief Operations Officer, and Regional Executive Managers in Limpopo, Mpumalanga, Northern Cape, Free State, KwaZulu-Natal and Western Cape. The vacancies remain a perpetual problem even though the moratorium was lifted.

The Committee was further concerned that all the regional offices had vacancies in the Disability Management Unit. This is despite the government’s goal that departments should employ 6% of people with disabilities.

The Committee reiterated its concern over long queues and lack of adherence to Covid 19 protocols at SASSA offices. This puts the lives of SASSA officials and beneficiaries at risk.

The Committee wanted to know progress made by SASSA in its investigations of government employees who illegally accessed the Social Relief of Distress Grant.

The Committee expressed a serious concern over R197 000 wasteful and fruitless expenditure which was incurred as a result of late cancellations or no shows for travel and accommodation. It wanted to know what was done to recoup this money.

RECOMMENDATIONS

Department of Social Development

The Minister should ensure that within the 2021/2022 financial year, the department finalises the entity oversight framework and ensure that it institutionalised across the social development portfolio.
The Minister should ensure that within the 2021/2022 financial year, the department fills the vacant post of the Director-General.
The Minister should ensure that the department engages with the office of the Deputy President as a Leader of Government Business to make sure that the 2018 Cabinet Resolution on the employment of social workers is implemented.
The Minister should ensure that the department within the 2021/2022 financial year irregular expenditure is significantly reduced across the social development portfolio.
The Minister should also ensure that the department within the 2021/2022 financial year improves on its non-financial performance (achievement of targets), especially in critical programmes, such as Programme 1, 4 and 5.
The Minister should also ensure that the department during this medium term employs more people with disabilities and reach the government’s target of 6%.
The Minister should also ensure that the department and its entities should continue on their quarterly reporting to the Committee on their actions plans to address AG’s findings. The plans should clearly demonstrate how they will address the AG’s findings and make sure that their root causes do not happen again. There should be a portfolio approach (department and its entities) on how the AG’s findings are addressed.

National Development Agency

The Minister should ensure that the NDA reports on the reasons for the target not achieved. The report should also follow an evidence based approach.
The Minister should also ensure that the NDA puts in place preventative and detective controls as early warning signs of non-compliance and poor performance. NDA Management and internal audit unit should also put in place a system that will record performance information throughout the year. The CEO should exercise oversight to make sure that all performance information is available.

South African Social Security Agency

The Minister should ensure that SASSA within 2021/2022 financial year puts in place actions to recoup wasteful and irregular expenditure incurred due to late cancellations and no shows for travel and accommodation.

The Minister should ensure that SASSA within the 2021/2022 financial year fills all critical vacant posts in regional offices including those in the Disability Management Units. SASSA should also within the medium term reach the government’s target of employing 6% people with disabilities.

Report to be considered

Documents

No related documents

ATC201203: Portfolio Committee on Social Development Budget Review and Recommendation Report (BRRR), 2019/2020, Dated 03 December 2020

Social Development

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