Operations of the Unemployment Insurance Fund

Index Transformation of the fund – getting the basics right What has the operation being doing As relates to its mandate of servicing public Current and Future actions

In transforming the Fund an holistic approach was adopted Processes and procedures required to support the stated purpose/ objective Support structures & information systems/ technology Process Vision Culture Infrastructure Organisation Human Resources Stated purpose/ objective of Fund Provide effective social safety net to unemployed workers Structure, roles & organization interfaces People practices, skills & competencies Values, behaviour and attitudes required to enable vision

Business transformation is a continuous process Current state Future state Strategic vision “It is not what the vision is, but what the vision does”. (Peter Senge)

Organisational re-construction 36 months Implement new processes Quick wins :org struct. Improve service delivery We are we? Future State Organisational re-construction 36 months Realising Build processes Instit. capacity Re-engineer Build application Investigation org struct. Meet all commitments to clients Strengthen capacity Implemented law Insolvent-to-solvent Actuarial assessment Integration to SARS Extended coverage Implement law Phase 3 2005-2006 Current State Phase 2 2003-2004 Phase 1 2002-2003

Pillars on which turnaround is based Information Technology Revised Legislation Institutional restructuring Sustainable Fund

Progress with re-structuring Information Technology Creation of business applications to support business, during the last year the fund was engaged in the development of its new business applications, that is expected to significantly improve the control environment. PPP with Siemens In addition to implementing the legislation approved by parliament in 2002, the fund successful extended coverage to all domestic workers in 2003. More than 600 000 domestic employers were registered and more than half a million domestic employees were registered on the funds database. Coverage was also extended to all those employee employed by organs of state that are not defined as officials in terms of the public service regulations. Legislative re-structuring UIA 63 of 2002 Institutional restructuring The Fund continued the process of developing a new blue print for the organisation by negotiating with key stakeholders the mechanics of the new structure. This is intended to transform the organisation to deliver on its mandate of social protection to unemployed workers. UIF world class model

2004/2005 was a challenging year in which the fund continued to lay a firm foundation for future growth. Growth in investments 2002/2003 2001 - 255k deficit 2,620,052 investments R 2003/2004 6,255,000 investments

Benefit Expenditure (R,000) As part of its turnaround the fund was able to contain expenditure in an attempt to return to financial health and create the financial strength needed to bring about lasting change. For three quarters of the new financial year this trend sustained improvement has continued.

Growth in Revenue (R,000) 5.06 R bn Five year revenue growth 4.3 April 2004-Dec 2004 15 months 4.3 2004/2005 4.08 2003/2004 12 months 2002/2003 R bn 2.8 2001 2000 2.7 Five year revenue growth

Registration of domestic Employers 600 000 domestic employers registered. 495 000 details of employees recorded. Overwhelming Public response to campaign The inclusion of Domestic workers was a World first for the Department. Fax Labour Centres Call Centre Internet

Registration of domestic Employers As at: Domestic Employers registered Active Domestic Employers registered Active Distinct Domestic Employees registered 29 February 2004 592 522 529 519 484 959 31 March 2004 596 368 531 404 488 988 30 April 2004 599 278 531 389 489 948 31 May 2004 602 712 533 933 492 712 30 June 2004 605 712 535 748 493 904 31 July 2004 608 365 534 416 495 066 31 August 2004 611 022 534 559 495 076 30 September 2004 613 918 534 666 497 530 29 October 2004 616 583 531 815 498 100 30 November 2004 619 265 532 827 498 659 31 December 2004 31 January 2005 620 699 623 074 529 950 529 216 498 927 498 210

Compliance by domestic Employers Of the 529 216 active employers, an estimated 444 303 (84%) employers have sent in their declarations, whilst 84913 (16%) employers have still not sent in their declarations.

Registration of Commercial Employers As at: Active Commercial Employers registered Active Distinct Commercial Employees registered 31 January 2004 419 753 5 585 711 29 February 2004 421 378 5 670 943 31 March 2004 427 938 5 742 942 30 April 2004 431 762 5 794 696 31 May 2004 437 484 5 866 994 30 June 2004 441 944 5 815 274 31 July 2004 445 367 5 811 961 31 August 2004 449 424 5 828 835 30 September 2004 453 525 5 952 623 29 October 2004 455 851 6 007 694 30 November 2004 458 368 6 047 759 31 December 2004 31 January 2005 457 594 469 491 6 108 150 6 115 116

Compliance by Commercial Employers Registered SARS active 298 984, not declaring 95557 (32%), declaring 203427(68%) Registered UI active 170 507, not declaring 41799 (24.50%), declaring 128708 (75.50%) Of the 469491 active employers, 332135 (71%) have sent in declarations whilst 169 879(29%) have still not sent in their declarations.

Claims Processing for Jan 2005 A total of 52957 claims were received in January 2005, 44048 were finalised. Claims in process of being finalised for the month is therefore 8909.The value of the overpayments raised represents 0.91% of the benefits paid. With reference to processing volumes, 5 centres make up almost 56.43% of the total claims processed; these are KwaZulu Natal with 15.99%, Western Cape with 9.72%, Gauteng South with 11.58%, Germiston with 8.38% and Free State with 6.8%.

Trend of claim payments Month Received Approved Value of overpayments raised Number of payments to beneficiaries Amount paid to beneficiaries Value of payments that were cancelled due to beneficiary failing to report for collection or starting work Dec-03 32 378 39 060 R 2 655 708.78 227 126 R 190 486 298.52 R 7 423 495.55 Jan-04 48 659 37 968 R 3 060 837.40 209 531 R 174 652 473.53 R 8 115 188.27 Feb-04 52 209 41 858 R 3 284 338.15 207 474 R 180 455 347.75 R 7 714 368.29 Mar-04 58 229 45 290 R 2 311 652.08 259 626 R 220 123 586.74 R 8 812 656.46 Apr-04 52 263 36 529 R 2 336 962.27 215 481 R 184 163 202.63 R 8 037 806.03 May-04 63 867 49 536 R 2 697 228.33 224 740 R 196 101 184.95 R 8 424 297.43 Jun-04 60 906 50 046 R 3 150 737.84 233 891 R 206 149 157.37 R 9 350 625.87 Jul-04 62 503 54 172 R 3 699 152.97 241 204 R 215 831 455.83 R 8 892 582.70 Aug-04 55 529 47 247 R 2 399 651.76 267 255 R 233 578 365.07 R 8 944 538.89 Sep-04 54 744 47 267 R 2 259 039.59 216 453 R 193 610 331.68 R 9 110 869.64 Oct-04 59 272 51 862 R 2 393 845.41 229 281 R 204 115 028.14 R 8 368 255.83 Nov-04 55 604 47 679 R 2 319 483.15 276 625 R 246 432 381.63 R 8 628 988.49 Dec-04 41 590 37 194 R 1 768 740.37 237 045 R 209 970 051.10 R 9 294 048.02 Jan-05 52 957 44 048 R 1 770 553.13 218 586 R 192 972 163.25 R 8 949 629.29 Feb-05 58 176 50 006 R 2 149 852.54 210 260 R 194 633 667.10 R 7 862 733.69

Number of payment by benefit type Unemployment Illness Maternity Adoption Dependants Grand Total Received 489122 29390 62554 52 27017 608135 Approved 402835 24053 59252 49 21046 507235 86.03 81.8 94.7 94.2 77.8 AVG 86.9 Number Paid 2196491 152484 183549 236 22382 2 555 142 Amount Paid 1.682 b 113. 5 m 242.1 m 355.9 188 5m 2.227 b

Breakdown of domestic claims processed DOMESTIC CLAIMS as @ December 2004   DOMESTIC CLAIMS PAID as @ January 2005 REGION Number of claims received from domestic workers Amount paid Pretoria 3 295 956042.6 3551 1030935 Johannesburg 2 761 859942.4 2763 860777.6 Durban 3 989 997469.9 4297 1081284 Pietermaritzburg 994 181754.5 1043 192299.2 East London 737 155196.7 781 166213 Port Elizabeth 1 399 337695.9 1546 374977.5 Cape Town 1 371 497879.6 1440 527140.5 Bloemfontein 2 276 405189.5 2534 453974.7 Kimberley 1 132 211506.1 1218 228434.8 George 479 115830.4 497 120143.4 Germiston 2 661 647592 2796 690266 Mpumalanga 3 020 629531.5 3219 675017.9 Limpopo 944 180098.8 1041 199813 North West 602 107910.1 607 109016.3 25 660 6283640 27333 6710293

Processing of domestic claims per region showing movement from December 2004 to January 2005

Domestic Amount paid per region showing movement from December 2004 to January 2005

Turnaround time for claims processing in 2003

Turnaround time for claims processing in 2004

Performance against Key performance Indicator

How have we performed? Adoption Death Illness Maternity Unem ploym ent 0.00855073 4.442599 4.832809 10.2862 80.42983877 Days To apply 2003 58.37 46.17 21 37.02 82.26 2004 32.15 26.10 7.57 11.55 62.05 Days To approve 145.44 117.26 101.32 70.42 36.36 106.10 107.05 87.53 56.15 26.86

Call centre trends Calls Received Calls answered Calls abandoned   Calls Received Calls answered Calls abandoned Service level Abandon rate Average time in queue (seconds) Nov-03 37961 34966 2959 82% 8% 23 Dec-03 25034 23615 1331 85% 5% 16 Jan-04 35524 33795 1709 15 Feb-04 34160 32992 1138 90% 3% 10 Mar-04 36228 33705 1796 Apr-04 25076 23745 1330 14 May-04 31482 30068 1414 86% 4% Jun-04 26902 25126 977 87% 12 Jul-04 27410 25806 1574 6% Aug-04 25964 24959 1005 89% 11 04-Sep 24201 23131 1049 88% 04-Oct 28414 27099 1232 13 04-Nov 29086 28115 938 04-Dec 17023 16563 456 93% 9 05-Jan 28015 26232 1659 18 05-Feb 33318 32228 1006 91% Average 28832 27328 1371 86.47% 4.67% 13.8

UIF CALL CENTRE

Full audit trail of user Labour centre official actions Channels New UIF Business Process Application response Call Centre Employer wishes to Register Declare employees Unemployed worker wishes to claim Access Siyaya Employer/Employee Databases are updated UI 54 Agent Client Correspondence Database Tel E-mail Fax UI 32 / 33 a Notice of Amended details Call in Walk-In Post Self-help WWW Labour centre official Exception reports For risk management Registration of employer, declaration of employees, payment of contributions, Claims Receipt issued From AR INCREASING FOCUS ON SERVICE DELIVERY

High level Siyaya work flow

Adjudication of claim employee on database Application response Channels New UIF Business Process Enters id Number into Siyaya, system Search's for previous claim If the client is found on the Database, a claim can be registered Access Siyaya Pay schedule Client Correspondence Database Siyaya requests clerk to verify tombstone details Once verified, Siyaya applies Business rules Claim approved based on Declaration or rejected If approved Siyaya prints pay dates as per schedule or if rejected refusal notice Labour centre official Walk-In Refusal notice Full audit trail of user actions Exception reports For risk management

Future work Programme April 2006 April 2006 April 2006 April 2006 Grow database Implement CRM Operationalise SIYAYA Improve service delivery Communication and education April 2006 100% of all approved claims are paid within 28 days April 2006 Crm upgraded customer care line April 2006 April 2005 Siyaya operational 80% of registered employers submit their declarations April 2006 100% of benefit claims are paid Electronically utilising Mzansi and Teba bank channels Way forward 2005-2006