PRESENTATION TO PORTFOLIO COMMITTEE ON SOCIAL DEVELOPMENT Quarterly Financial & Performance Reports 03 June 2015

Presentation Outline Background Performance Report – Q3 Financial Report – Q3 Challenges Recommendations

Purpose The purpose of the presentation is to: Brief the Portfolio Committee on SASSA third quarter performance and financial report

BACKGROUND

VISION MISSION SASSA’s Slogan “A leader in the delivery of social security services” MISSION To administer quality customer-centric social security services to eligible and potential beneficiaries. SASSA’s Slogan Paying the right social grant, to the right person, at the right time and place. NJALO!

STRATEGIC OUTCOME ORIENTED GOAL OF SASSA Expand access to social assistance and creating a platform for future payment of social security benefits. GOAL STATEMENT To render social assistance to eligible beneficiaries

Key priorities for 2014/15 - 2018/19 The primary focus of SASSA will be on: Reducing income poverty by providing social assistance to eligible individuals Improving service delivery Improving internal efficiency Institutionalising social grants payment system within SASSA

Programme Performance Report October- December 2014

Implementation of the Social Assistance Programme Objective To provide social assistance to qualifying/eligible beneficiaries Planned Targets (annual) Target is to reach at least 1.1m new beneficiaries p.a Achieved A total of 363 979 new applications were processed in Q2. This brings a total number of applications processed from April to September to 730 729 (66% of the annual target). A total of 323 007 new applications were processed in Q3. The total number of applications processed from April to December 2014 was 1 045 010 (95% of the annual target); 949 936 (90%) were approved; 56 143 (5%) were rejected; and 47 657 (5%) were outstanding.

National Applications: April to December 2014

Implementation of Social Assistance Programme Objective To provide social assistance to qualifying/eligible beneficiaries. Planned Annual Target To increase the number of grants in payment from 15 932 473 to 16 052 000 by the end of 2014/15. Achieved 16,443,196 social grants were in payment at the end of the third quarter. This represents an increase of 37,343 social grants or 0.2% from the preceding quarter. The annual target has been exceeded by 391 196.(Due to higher take up of Grant In Aid and Care Dependency Grants). Grant-in-Aid had the highest percentage increase of 9%, followed by the Care Dependency Grant at 1.4%. Lapsed Grants: A total of 1 081233 social grants were lapsed between April to December 2014 of which 402 132 were lapsed in Q3.

Table of the Take Up of Social Grants Per Grant Type Beginning of October End of October End of November End of December Difference/ Change Growth in percentage CDG 124,225 124,955 125,317 126,010 1,785 1.4% CSG 11,480,576 11,572,790 11,570,249 11,574,493 93,917 0.8% FCG 553,223 556,074 559,202 455,946 (97,277) -17.6% DG 1,124,770 1,131,479 1,137,351 1,127,867 3,097 0.3% GIA 96,433 99,378 102,916 105,087 8,654 9.0% OAG 3,026,260 3,036,714 3,046,893 3,053,440 27,180 0.9% WVG 366 362 357 353 (13) -3.6% Total 16,405,853 16,521,752 16,542,285 16,443,196 37,343 0.2%

Growth of Social Grants Per Region (cont…) Province Beginning of October End of October End of November End of December Difference/ Change Growth in percentage EC 2,690,278 2,707,680 2,706,391 2,684,342 (5,936) -0.2% FS 953,116 957,612 959,247 949,208 (3,908) -0.4% GP 2,267,347 2,286,531 2,293,680 2,283,324 15,977 0.7% KZN 3,853,324 3,880,497 3,882,731 3,855,957 2,633 0.1% LP 2,282,300 2,297,629 2,298,497 2,285,365 3,065 MP 1,367,147 1,376,012 1,377,060 1,372,678 5,531 0.4% NW 1,154,256 1,160,887 1,163,141 1,155,074 818 NC 438,522 441,632 442,731 439,540 1,018 0.2% WC 1,399,563 1,413,272 1,418,807 1,417,708 18,145 1.3% Total 16,405,853 16,521,752 16,542,285 16,443,196 37,343

Number and Percentage of Social Grants per Region and Grant Type (cont…) OAG WVG DG GIA CDG FCG CSG Total % of total EC 524,974 53 182,711 15,541 19,139 101,799 1,840,125 2,684,342 16.3% FS 180,603 6 76,882 1,944 6,356 33,722 649,695 949,208 5.8% GP 472,814 89 110,187 2,748 16,017 50,541 1,630,928 2,283,324 13.9% KZN 626,525 44 291,552 36,595 36,385 112,946 2,751,910 3,855,957 23.5% LP 427,456 23 93,580 18,757 13,116 50,195 1,682,238 2,285,365 MP 223,657 16 79,205 4,766 9,434 32,054 1,023,546 1,372,678 8.3% NW 230,839 12 86,168 6,833 8,941 33,912 788,369 1,155,074 7.0% NC 78,432 10 50,482 6,354 4,775 12,837 286,650 439,540 2.7% WC 288,140 100 157,100 11,549 11,847 27,940 921,032 1,417,708 8.6% 3,053,440 353 1,127,867 105,087 126,010 455,946 11,574,493 16,443,196 100.0% % total 18.57% 0.00% 6.86% 0.64% 0.77% 2.77% 70.39% 100.00%

Implementation of the Social Assistance Programme Objective Reduction of inclusion and exclusion errors in the social assistance programme Planned Activities To reach 70% of the children age between 0-1 who are eligible fro CSG. Achieved Total number of children (0-1) in payment was 519,839. This represents 44.1% of the children in this age category. The numbers increased by 3709 or 0.7% from the previous quarter. The breakdown of children’s grants in payment for 0-1 are: CSG 519,257; CDG 336; FCG 246.

Implementation of the Social Assistance Programme Objective Improve the management of Social Relief of Distress by ensuring qualifying beneficiaries are not disadvantaged. Planned Targets (annual) 160 000 SRD applications will be processed per annum over the next three year Achieved 60,077 applications processed Cash – Q3: 1 391; Q2: 1 631; Q1: 5 753 Food parcels – Q3:35 446; Q2:58 974; Q1:62 310 Vouchers – Q3: 21 126; Q2:32 154; Q1:73 339 Other – Q3: 2 114; Q2: 1 213 Total Expenditure R93,004,152 for the 3rd quarter.

Service Delivery Improvement Objective Improving conditions under which beneficiaries are served Annual Targets Progressively reducing the turnaround time for processing grants to an average of 10 days by 2016 Upgrading of local offices and acquisition of new offices in areas of high need. Achieved Turnaround time for processing of grants applications is on average 21 days. 97.04% of applications were processed within 21 days,0.81% increase from the previous quarter. 0.26% of the applications were processed after 21 days(mainly disability grants) 5 local offices and 10 pay points were improved in the 3rs quarter.

Service Delivery Improvement Objective Improving conditions under which beneficiaries are served Target 420 ICROP/ Mikondzo interventions Achieved ICROP interventions were held in 247 wards in Q3. Region Wards:Q3 Wards:Q2 Wards:Q1 E.C. 54 39 15 F.S. 13 18 G.P 16 21 6 KZN 47 247 25 LIMP 23 33 4 MPU 17 8 N.C. 52 106 31 N.W. 11 14 9 W.C. 30 92 TOTAL 593 170

Future Payment System Objective Improvement in the Payment of Social Grants Planned Targets (annual) Implementation of the Payment Tender Plans for SASSA is to take total responsibility for the payment of social grants in 2017/19. Achieved Tender Process: As directed by the ConCourt, SASSA extended bid deadline in order to amend tender documents. Future: TOR for appointment of project management company to oversee the workstreams were circulated for comments. Peer Review: International experts working in similar environment were invited to assess the which elements of the current system form basis for SASSA’s future plans. Northern Ireland Social Security Agency visited and the experts from the NISG had to postpone their visit to end of fourth Quarter Biometric Standards project is in progress

Improved Administration: Automation Objective Establishing a credible National payment database through re-registration programme. Planned Targets (annual) Improvement of ICT Infrastructure Biometric Authentication of users Cleaning of re-registration data Achieved Connectivity to business systems in all SASSA Local offices has improved. Project between the CSIR and SASSA on Biometrics has commenced. Preliminary findings data integrity was presented by CSIR.

Improved Administration: HCM Objective Effective and efficient administration (Human Resource) Achieved Identified critical posts filled in Q3: The total number of posts budgeted for at various levels is 10,375. As at end September 2014 there was a total of 9,699 personnel in the system. (93.5% of funded posts filled) New appointments: 47(17 permanent and 30 contract) Terminations: 234 (Contract 138, permanent 96 and transfers 8). 2 HCM policy were reviewed (Leave and Performance Management) 1 labour relations case was reported and is in the process of investigation

Improved Governance Objective To promote good governance and accountability Planned Targets (annual) Reduction of audit findings - Unqualified Audit Reduction of Fraud, theft and corruption Reduction in litigations Achieved Fraud Management: From 1 October to 31 December 2014, a total of 235 cases were received, and 588 investigated of which 353 were from Q2. IA: 9 Internal audit reviews were done on high risk areas Legal: 238 letters of demand were received and responded to

Fraud Management: 2014/15 The target for the financial year 2014/15 remains 60% of identified fraud and corruption cases to be investigated. The regions’ investigation average for Q3 is 250%, representing an overachievement of 100%. From 1 October to 31 December 2014, a total of 235 cases were received, and 588 investigated of which 353 were from Q2.

Fraud Management: 2014/15 Region Quarter One (1 Apr to 30 Jun 2014) Quarter Two (1 Jul to 30 Sept 2014) Quarter Three (1 Oct to 31 Dec 2014) Nr Rec Nr inv % Head Office 5 22 440% 1 100% - Gauteng 50 111 222% 100 113 113% 72 73 101% North West 6 7 117% 3 43% 10 143% Free State 20 37 185% 102 276% 88 400% Northern Cape 9 180% 27 450% 4 Western Cape 46 128 284% 52 202 388% 33 136 412% Eastern Cape 25 28% 43 64 149% 28 35 125% KwaZulu Natal 49 57% 178 173 97% 41 199 485% Mpumalanga 31 76 245% 19 68% 14 16 114% Limpopo 24 153 637% 32 71 193% Total 261 578 221% 484 775 160% 235 588 250%

Litigation Q3: 2014/15 Total of 7 litigation matters were dealt with during the third quarter. Types of cases: 2 - Social Grants (reconsideration and suspension) 2 – PAIA 1 – GEPF (release of pension fund) 1 – MVA 1 – SCM (review and set aside of RFP) Distribution: The cases were mainly from the following offices – HO 2 (1 PAIA; 1 SCM); EC 1 (1 social grant), KZN 1 (1 social grant); MP 3 (1 MVA, 1 PAIA, 1 GEPF). The total amount of litigation costs as at the end of the third quarter is R 216 144.46 and is inclusive of the matters that were dealt with in the previous financial years, commencing from 2011.

Litigation OFFICE FIRST QUARTER SECOND QUARTER THIRD QUARTER HO   2 (Labour disputes) 5 Cases 2 Labour; 1 Contractual; 1 Delictual claim; and 1 IEC matter) 2 (1 PAIA and 1 SCM) EC 27 (26 Grant related and 1 PAIA) 13 (5 alleged wrongful suspensions; 2 labour; 6 social grants) 1 (Social Grant) FS GP KZN 12 (11 Grant related and 1 MVA ) 47 (46 Grant related; 1 labour) LP MP 3 (1 PAIA; 1 MVA; 1 GEPF) NC NW WC 1 (Labour) Total 41 66 7

Summary of Performance of the Third Quarter compared to Second Quarter SASSA had a total number of 26 APP targets planned for the second quarter. 62 % of the quarterly targets were fully achieved and 3% were partially achieved.

Financial Performance Report

Expenditure per economic classification

Expenditure per key cost driver

Notes to the level of spending Compensation of employees: Some of the vacant funded posts were not yet filled during the period under review thus the under spending on this item. The total number of posts budgeted for at various levels is 10,375. As at end September 2014 there was a total of 9,699 personnel in the system. Goods and services -The significant underspending on: -Communication due to the telephone management system - Cash handling due to the reduced cost of disbursing grant monies - Leases due to offices that were in the process of being occupied - Travel and subsistence due to spin-offs from cost containment measures

Risks and Challenges Payment Tender - delays due to ongoing court challenges Decreasing financial resources Fraud, theft and corruption Disasters – pressure on the SRD Unintended consequences of the payment process - deductions

Recommendations It is recommended that the Portfolio Committee note and support SASSA’s the quarterly financial and programme performance reports for the period of October to December 2014

Thank you