1. Presentation to the Select Committee on Social Services 21 November 2017
2016/17 ANNUAL REPORT

2. Presentation Outline Purpose Overview
Programmes Performance Information - Achievements against 2016/17 Annual Performance Plan;
Budget and Expenditure;
Summary of Audit Outcomes;
Recommendations. 2

3. Purpose
To present to the Select Committee on Social Services SASSA’s 2016/17 Annual Report; focusing on:
Performance Information;
Budget and Expenditure;
Audit outcomes; and
Recommendations.

4. Overview 4

5. Overview
SASSA is a Schedule 3A Public Entity established in April 2006 in terms of an Act of Parliament (SASSA Act, 2004)
The objective of SASSA is to
act, as the sole agent that will ensure the efficient and effective management, administration and payment of social assistance; and
eventually serve as an institution to manage broader social security benefits
The social assistance programme and the operations of SASSA are fully funded by government. 5

6. Overview Vision “A leader in the delivery of social security services”
Mission
To administer social security services to eligible children, older persons and people with disabilities.
SASSA’s Slogan
Paying the right social grant, to the right person,
at the right time and place. NJALO! 6

7. SASSA’s Strategic Outcome Oriented Goal
NDP OUTCOME RELEVANT TO SASSA
Outcome 13: An inclusive and responsive social protection system
SUB- OUTCOME (SO)
SO4: Deepening social assistance and extending the scope for social security.
SASSA STRATEGIC OUTCOME ORIENTED GOAL
Expand access to social assistance and creating a platform for future payment of social security benefits.
SASSA GOAL STATEMENT
To render social assistance to eligible beneficiaries 7

8. SASSA 2014-2019 MTSF Priorities
The primary focus of SASSA in the medium term is:
Reducing income poverty by providing social assistance to eligible individuals;
Improving service delivery;
Improving organisational efficiency;
Automation of business systems;
Institutionalising social grants payment system within SASSA.

9. Programmes Programme 1: Administration
Sub-programme 1.1: Executive Management
Sub-programme 1.2: Corporate Services
Sub-programme 1.3: Information and Communication Technology
Sub-programme 1.4: Financial Management
Programme 2: Benefits Administration and Support
Sub-programme 2.1: Benefits Administration
Sub-programme 2.2: Payment Administration 9

10. SASSA 2016/17 Strategic Objectives
To improve the effectiveness and efficiency of the administration of the social assistance programme;
To provide human capital management, facilities and auxiliary services;
Effective information and communication technology;
Effective financial management; and
To uphold good governance.

11. Programmes Performance11

12. Performance Rating System
For the purpose of this report, the following rating system has been employed:
Achieved
Target has been fully achieved
Partially Achieved
Performance between 50% and 99%
Some work has been done but target not fully realized
Not Achieved
Performance is below 50%
Very little/no work done, certainly target has missed time frames.

13. OVERALL 2016/17 PERFORMANCE
The 2016/17 Annual Performance Plan had 42 planned targets;
Of the total planned targets, 19 (45%) were fully realized/achieved;
13 targets (31%) were partially achieved recording between 50% and 98% performance; and
10 targets (24%) recorded below 50% performance
Total expenditure – 106% (appropriation + cash surplus) 13

14. Programme 1: Administration14

15. PROGRAMME PURPOSE
To provide leadership, management and support services towards realization of the Agency’s mandate.
This programme provides an enabling environment for an effective & efficient administration and payment of social assistance.

16. SUMMARY OF PROGRAMME 1 PERFORMANCE
The programme had 24 targets planned for the financial year;
Of the total planned targets, 13 (54%) were fully realized/achieved;
Five targets (21%) were partially achieved recording 50% and 98% performance; and
Six targets (25%) recorded below 50% performance

17. Improved Organizational Efficiency
Sub-programme 1.1: Executive Management
Annual Target
Actual achievement
Rating
Reason for under achievement
20 internal audit reviews conducted on high-risk areas
23 internal audit reviews conducted on high-risk areas. This represents 115% performance.
Not applicable
72 fraud, theft
and corruption
awareness
programmes
conducted across
the 9 regions
72 fraud, theft and corruption awareness programmes were conducted across the regions. This represents 100% performance.

18. Improved Organizational Efficiency
Sub-programme 1.1: Executive Management
Annual Target
Actual achievement
Rating
Reason for under achievement
70% of reported
fraud, theft and
corruption cases
investigated within
90 days of receipt
65% (262 of 405) of reported fraud, theft and corruption cases investigated within 90 days of receipt.
Under achievement is attributed to syndicate cases that are complex and consumed more time than anticipated.
100% of fraud,
theft and corruption
cases investigated
(backlog)
81% (933 out of 1 147) of fraud,
theft and corruption cases investigated

19. Fraud, theft and corruption cases per Location
No. of cases received
No. of cases investigated
Percentage EC 50 36 72 FS 26 3 12 GP 70 53 76
KZN
103 80 78 LP 20 13 65 MP 38 17 45 NC 8 NW 11 42 WC 63 46 73 HO 1 -
TOTAL
405
262

20. Improved Organizational Efficiency
Sub-programme 1.1: Executive Management
Annual Target
Actual achievement
Rating
Reason for under achievement
100% of legal
opinions were
finalized within 10
working days
98% (233 of 239) of Legal opinions were finalized within 10 days.
Further research was required in some of the requested opinions thus failure to finalize within 10 days.
100% of contracts drafted within 10 working days of written instruction with supporting Documents
100% (1 009 out of 1 009) of contracts were drafted within 10 working days of written instruction with supporting documents.
Not applicable

21. Improved Organizational Efficiency
Sub-programme 1.2: Corporate Services
Annual Target
Actual achievement
Rating
Reason for under achievement
HR Plan reviewed
HR plan was reviewed to accommodate the outcome of the capacity model on enrollment function within the grant process.
Not applicable
Capacity model
reviewed
Capacity model reviewed. The model looked at the enrolment function as it currently done including card issuance, maintenance as well as biometrics. Capacity requirements to perform enrolment function is estimated at 640 staff.
95% of funded
posts filled
96 % of funded posts were filled. In addition, there were 805 contract workers, totaling number of employees to at the end of March 2017.

22. Improved Organizational Efficiency
Sub-programme 1.2: Corporate Services
Annual Target
Actual achievement
Rating
Reason for under achievement
Co-sourcing for
5 regions concluded
Co-Sourcing of registries (beneficiary record management centres) for 5 regions (NW, WC, GP, KZN and FS) concluded. This includes conclusion of a contract, relocation of personnel and migration of beneficiary files.
Not applicable
367 local of offices
audited for
functionality
367 local offices were audited for functionality.
150 open pay
points converted to fixed structures
176 open pay points were converted to fixed structures. This represents 117% performance.
96 steel structures; and
80 migrated to community structures.

23. Improved Organizational Efficiency: Reason for under achievement
Sub-programme 1.3: ICT
Annual Target
Actual achievement
Rating
Reason for under achievement
Biometric access
to systems for staff
and beneficiaries
acquired,
configured and
piloted
Terms of Reference were revised to accommodate inputs from subject matter experts.
The Request for Proposal (RFP) had been advertised by end of March 2017.
The project was included in the overall New Insourcing Payment Model as part of the SASSA Transition Programme to ensure streamlining and integration of solution implementation. As such, project timelines were affected
100% of users
migrated from
Novell System to
Microsoft Platform
100% (9715) of users migrated from Novell to Microsoft Platform
Not applicable

24. Improved Organizational Efficiency: Reason for under achievement
Sub-programme 1.3: ICT
Annual Target
Actual achievement
Rating
Reason for under achievement
Network
connectivity
infrastructure
upgraded (Head
Office, Regional
Offices and
Registries)
Mpumalanga registry and Eastern Cape regional office were upgraded.
Prolonged industrial action on the side of the service provider (Telkom) delayed the project implementation, however Telkom and SASSA have reached an agreement and the project will be finalized in 2017/18 financial year.
Back scanning solution
implemented in 9
regional registries
The back scanning solution was implemented in 4 regions (NW, LP, WC & NC). At the end of March 2017, work had commenced in GP, KZN and MP.
The sites and office accommodation were not timely ready for the establishment of the Scanning Bureaus in compliance with specifications.

25. Improved Organizational Efficiency: Reason for under achievement
Sub-programme 1.3: ICT
Annual Target
Actual achievement
Rating
Reason for under achievement
On-going scanning
piloted in 9 local offices
The solution was built and tested in two local offices in the Western Cape region
The sites and office accommodation were not ready for the ongoing scanning operations in line with the specifications.
Electronic queue management solution procured and piloted
Not achieved
The projects were included in the overall New Insourcing Payment Model as part of the SASSA Transition Programme to ensure streamlining and integration of solution implementation. As such, project timelines were affected
Web-interface solution
procured and implemented

26. Improved Organizational Efficiency: Reason for under achievement
Sub-programme 1.3: ICT
Annual Target
Actual achievement
Rating
Reason for under achievement
Enterprise Business Intelligence solution implemented for grants data
The Grants Administration reporting solution was developed and implemented.
Not applicable
HCM and Financial Management support systems automation Business Case and implementation plan developed
HCM and Financial Management support systems automation Business Case and implementation plan was developed

27. Improved Organizational Efficiency
Sub-programme 1.4: Financial Management
Annual Target
Actual achievement
Rating
Reason for under achievement
Unqualified audit outcome for 2015/16 achieved
SASSA received an unqualified audit outcome for the 2015/16 financial year
None
100% of eligible suppliers paid within 30 days
96% of (4 603 of 4 781) eligible suppliers were paid within 30 days.
Disputed invoices and delays by suppliers to provide required information.
Changes on suppliers without submitting the new banking details to SASSA or Central Supplier Database (CSD) update.

28. Improved Organizational Efficiency
Sub-programme 1.4: Financial Management
Annual Target
Actual achievement
Rating
Reason for under achievement
5% of social assistance debts recovered and/or written off
(Debt book =R814 359 863.19
Value of 5% target =R40 717 993.16)
2% of social assistance debts recovered to the value of R
Write offs for two financial years 2015/16 and 2016/17 (R155 million) were submitted to National Treasury through the Department of Social Development for consideration and approval. The outcome is still outstanding.
Default rate due to poverty level affecting debtors, making it difficult for them to repay as per agreements made with SASSA.

29. Benefits Administration and Support
Programme 2:
Benefits Administration and Support

30. Programme PURPOSE
The programme provides effective administration and implementation of the social assistance programme.
The programme is responsible for the core business of the South African Social Security Agency.

31. SUMMARY OF PROGRAMME 2 PERFORMANCE
The programme had 18 targets planned for the financial year;
Of the total planned targets, six (33%) were fully realized/achieved;
Eight targets (45%) were partially achieved recording between 50% and 98% performance; and
Four targets (22%) recorded below 50% performance

32. Implementation of the Social Assistance Programme
Annual Target
Actual achievement
Rating
Reason for under achievement
new social grant applications processed
new social grant applications were processed.
This represents 147%
Not applicable
Increase the number of grants in payment from to
social assistance benefits were in payment at end of March 2017.
This represents 98%
Attrition, lapsing of temporary awarded grants, age qualification, applicants not meeting the qualifying criteria contributed to non- achievement of this target.

33. New social grants applications processed per Province
Number of new social grant applications processed EC FS GP
KZN LP MP NC
82 814 NW WC
Total 2 

34. Social grants in payment including Grant-in-Aid per Province
Grants in payment including Gran-in-Aid EC 2  FS GP 2 
KZN 3  LP 2  MP 1  NC NW 1  WC 1 
Total
17 

35. Social Grants Growth - by grant type
2006/07
2007/08
2008/09
2009/10
2010/11
2011/12
2012/13
2013/14
2014/15
2015/16
2016/17
Old Age
2,195,018
2,229,550
2,390,543
2,546,657
2,678,554
2,750,857
2,873,197
2,969,933
3,086,851
3,194,087
3,302,202
War Veteran
2,340
1,924
1,500
1,216
958
753
587
429
326
245
176
Disability
1,422,808
1,408,456
1,286,883
1,264,477
1,200,898
1,198,131
1,164,192
1,120,419
1,112,663
1,085,541
1,067,176
Grant in Aid
31,918
37,343
46,069
53,237
58,413
66,493
73,719
83,059
113,087
137,806
164,349
Care Dependency
98,631
102,292
107,065
110,731
112,185
114,993
120,268
120,632
126,777
131,040
144,952
Foster Child
400,503
454,199
474,759
510,760
512,874
536,747
532,159
512,055
499,774
470,015
440,295
Child Support
7,863,841
8,189,975
8,765,354
9,570,287
10,371,950
10,927,731
11,341,988
11,125,946
11,703,165
11,972,900
12,081,375
Total
12,015,059
12,423,739
13,072,173
14,057,365
14,935,832
15,595,705
16,106,110
15,932,473
16,642,643
16,991,634
17,200,525
Annual Growth
3.40%
5.20%
7.50%
6.20%
4.42%
3.27%
-1.08%
4.46%
2.1%
1.23%

36. Implementation of the Social Assistance Programme
Annual Target
Actual achievement
Rating
Reason for under achievement
Social relief of distress (SRD) applications awarded
SRD applications were awarded. This represents 115% performance.
The SRD awards were issued in different forms as follows:
food parcels – ;
school uniform – ;
cash awards – ;
voucher – ;
other –
The total expenditure for the 2016/17 financial year is - R587 million
Not applicable

37. SRD applications awarded per ProvinceEC
83 027 FS
30 943 GP
65 276
KZN
78 857 LP
90 043 MP
38 088 NC
20 132 NW
32 872 WC
22 512
Total

38. Implementation of the Social Assistance Programme
Annual Target
Actual achievement
Rating
Reason for under achievement
55% of children aged 0 – 1 in receipt of CSGs
41% ( out of 1  ) of children aged 0-1 years were in receipt of new social grants at the end of March 2017.
The net result of efforts is reported, which takes into account attrition, children moving into the next statistical age bracket and means test exclusions as contributing factors to non-achievement of set target.
Fragmented government systems between SASSA, Department of Health and Home Affairs also impacts on ability to target effectively

39. Children aged 0-1 in receipt of social grants per Province
No. of children per region
No. of children 0-1 in receipt of social grants % EC
74 350 42 FS
56 178
26 400 47 GP
70 841 29
KZN 40 LP
88 306 59 MP
97 734
46 128 NC
23 888
12 855 54 NW
76 229
34 004 45 WC
33 692
Total 41

40. Implementation of the Social Assistance Programme
Annual Target
Actual achievement
Rating
Reason for under achievement
95% of new social grant applications
processed within 10 days
90%( of
) of new social grant applications were processed within 10 days.
Non-achievement is attributed to manual applications taken at ICROPs & Mikondzo and applications taken off-line.
This challenge will be addressed through the continued roll out of connectivity (both infrastructure and mobile), even at service points, which is an ongoing programme.
Foster
Child Grant reviews
processed
Foster Child Grant reviews were Processed. This represents 101% performance.
Not applicable

41. Foster Child Grant reviews per Province
Foster Child Grants reviewed per Province EC
51 111 FS
12 710 GP
19 355
KZN
36 856 LP
9 816 MP
6 368 NC
4 268 NW
12 040 WC
12 086
Total

42. Implementation of the Social Assistance Programme
Annual Target
Actual achievement
Rating
Reason for under achievement
80% of identified
social grant exceptions identified and
resolved (Grants on alternative ID
number (7777),
grants paid after date of death, large amounts generated for payment, means
changed after
voucher generation)
35% ( of ) of Social Grants exceptions were identified and resolved.
Slow response by beneficiaries affecting grants on alternative ID numbers and payment after death.
Majority of the 7777 cases are refugees which will remain in payment on alternative numbers for the duration of the grant receipt, as they do not qualify for RSA identify numbers. This category of exceptions will be further refined to exclude the refugees.
The process to resolve grants which were paid after the date of death is lengthy, as the actual person who withdrew the money has to be traced, before the debt can be raised and recovery processes instituted.

43. Service Delivery Improvement
Annual Target
Actual achievement
Rating
Reason for under achievement
520 identified wards having access to social
assistance through
ICROP
631 had access to social assistance through ICROP. This represents 121% performance.
Not applicable
36 Mikondzo service delivery interventions
Conducted
31 Mikondzo service delivery interventions were conducted. This represents 86% performance.
Mikondzo interventions were limited by resource availability
600 public and beneficiary education
Awareness programmes
828 public and beneficiary education awareness programmes were conducted. This represents 138% performance.

44. Identified Wards having access to social assistance through ICROP per Province
No. of identified wards having access to social assistance through ICROP EC 65 FS 87 GP 71
KZN
114 LP 67 MP 54 NC 50 NW 39 WC 84
Total
631

45. Payment Administration
Annual Target
Actual achievement
Rating
Reason for under achievement
System for managing
Regulation 26A
mandates developed and implemented
15% (1 035 of 7 090) of regulation 26A mandates processed manually.
Pending the development of the system for managing Reg. 26A, new mandates were captured manually by regions.
In order to address this in the new financial year, negotiations will be undertaken with service providers to manage these under the payroll deductions contract, with SASSA taking control.

46. Payment Administration
Annual Target
Actual achievement
Rating
Reason for under achievement
Regulation
26A backlog
mandates processed
Regulation 26A backlog mandates processed.
This represents 60% performance.
Despite measures implemented to communicate with beneficiaries on this matter, there has been a slow and or non-response by beneficiaries. For the new financial year, a new SASSA controlled management model is being developed and will be implemented, to line up with the phase out of the current payment service provider’s contract.

47. Payment Administration
Annual Target
Actual achievement
Rating
Reason for under achievement
60% disputed
deductions from social grant payments
Resolved.
36% (5 343 of ) disputed deductions from social grant payments were resolved.
Reliance on an external party makes it difficult to resolve all reported disputes within the set time frames.
Management of disputes is included in the transition plan, with SASSA taking control, increasing direct responsibility, and developing a payment system which does not allow for any deductions from social grants.

48. Payment Administration
Annual Target
Actual achievement
Rating
Reason for under achievement
Transitional payment
insourcing plan
developed (through work streams) and implemented
focusing on card issuance, payment
distribution, banking options and life status confirmation.
Draft transitional payment insourcing plan was developed and consultation with stakeholders conducted.
Request for Information for procurement of the Banking Tender and Biometric User Access Management issued and responses received in February 2017.
Payment contract with current service provider extended by 12 months.
SASSA could not develop a new insourced social assistance payment system due to the complexity of the task, lack of technical infrastructure requirements and insufficient financial resources.

49. Payment Administration
Annual Target
Actual achievement
Rating
Reason for under achievement
Payment vendors
(Merchants) suitability
assessments
conducted
Merchants suitability assessments were conducted and a list of suitable vendors compiled.
A total of merchants were assessed, of the total were found suitable (have either biometric or pin enabled machine or have both) and 167 not suitable (have neither of the two).
Not applicable

50. Payment Administration
Annual Target
Actual achievement
Rating
Reason for under achievement
Matching fingerprints
of both adults and children clean up:
4 818 Matching fingerprints of both adults and children cleaned up.
This represents 16% performance.
Challenges with tracing beneficiaries contributed to under-achievement.
This project will be carried into the new financial year with a full comparison of the biometric database done, the phasing-in of a new card will be used to resolve the outstanding cases.

51. Payment Administration
Annual Target
Actual achievement
Rating
Reason for under achievement
New beneficiaries biometrically enrolled onto new SASSA system
Not achieved
Decision taken to locate biometrics project within the broader Transition plan which affected project time lines.
Data of current
beneficiaries migrated to new SASSA enrolment system.
Biometric data for existing beneficiaries is collected monthly from the current service provider for storage purposes. The data will be migrated into the SASSA biometric system once procurement process has been finalized.
Data migration dependent on biometric system yet to be procured as part of internalized payment model.
Biometric System to be aligned and procured in line with the preferred solution option in 2017/18.

52. 2016/17 Annual Expenditure Report

53. Expenditure based on Economic Classification
Capex is accounted for in note 7: Property, Plant and Equipment under additions. SASSA’s budget is cash-based while the AFS are on accrual basis of accounting.

54. Expenditure on key items within goods and services
Expenditure on the item Other Opex includes: Venues and facilities R29,531,592.72, Catering
R18,357,181.14, Event promoters R142,614,653.99,Rental of tents & equipment R56,859, i.r.o ICROP & Mikondzo projects.

55. Commentary on 2016/17 expenditure
Compensation of employees
The item underspent by 4% due to funded posts that were not filled during the year or posts that were vacated during the year. In particular, these include, among others Managerial positions such as;
Executive Manager: Corporate Services, Chief Operations Officer,
Regional Executive Managers for the Limpopo and Northern Cape regions,
General Managers Finance in Limpopo, Eastern Cape and Western Cape regions, General Manager Security Head Office, and
Senior Managers Financial Accounting, Facility Management and Demand Management all at Head Office etc. 55

56. Commentary on 2016/17 expenditure
Goods and Services
The Agency continued to realise cost-efficiencies on the disbursement of grant monies due to spin-offs from the capped rate of R16.44 for cash handling fees paid to the contracted service provider hence a R73 million savings for the year under review.
Other Administrative Expenses
Since SASSA obtained approval to retain the cash surplus as at end March 2016 certain projects were funded from this retained cash surplus and continued to be implemented in the period under review.
These include projects such as Mikondzo, ICROP, Scanning Solution, Work streams for the transition project and change management programme etc.
The effect of funding projects from the retained cash is a movement on the cash and cash equivalents on the statement of financial position for the reporting period.
The main items on which overspending occurred under administrative expenses due to projects funded from the surplus are advertising, venues and facilities, consultants and contractors. 56

57. Auditor-General Report and Comments

58. Audit outcome for the 2016/17 financial year
Annual Financial Statements (AFS)
Financial statements were presented fairly in all respects with no material misstatements except for areas mentioned below.
However, a qualified audit opinion was received from the AGSA:
Predetermined objectives
Programme 2: Benefits Administration and Support was selected for the 2016/17 audit.
Material finding was raised against one indicator (percentage of disputed deductions from social grant payments resolved), as such SASSA received a qualified audit opinion on performance information.

59. Basis for qualification – Predetermined Objectives
Percentage of disputed deductions from social grant payment resolved. The reported achievement for the target ‘percentage of disputed deductions from social grant payment resolved’ was misstated as the evidence provided supported 33% of disputes resolved based on the audit, and not 36% of disputes resolved as reported. 59

60. Challenges with reporting on the Qualified Indicator
SASSA is not directly responsible for the resolution of disputes, but acts as a conduit to resolve those reported to SASSA;
Multiple channels of reporting disputes – telephonically to call centre; in person at local offices or pay points; directly to CPS at pay points, or through their toll free line;
Technical indicator covers this limitation – SASSA can only report on disputes reported to SASSA, not all disputes;
Resolution depends on each specific circumstance – not all require refunds.

61. Basis for qualification - AFS
Irregular Expenditure
The basis of the qualification is the disclosure note number 31: Irregular Expenditure - The major areas were around compliance to local content requirements, Construction Industry development Board (CIDB) Act and its provisions.

62. Control Measures put in place to avoid similar finding in future - Irregular Expenditure
All transactions processed to date are being reviewed and validated to ensure the irregular expenditure register is complete, correct and accurate. The pre-audit process is undertaken to ensure there are no irregular transactions that are incurred henceforth;
SASSA has implemented SCM compliance checklist aimed to ensure all transactions are verified before they can be processed (validation of SCM compliance during evaluation process);
SCM officials were trained on Local contents and CIDB prescripts and processes to avoid a repeat of issues which led to a qualification;
Strengthening the implementation of consequence management.

63. Control Measures put in place to avoid similar finding in future- Predetermined Objectives
SASSA has informed all local offices to register every dispute on the customer care system;
Only disputes registered on the customer care system will be reported on;
Standard Operating Procedure (SOP) for this indicator are being developed clearly indicating the cited limitations. SOP will be circulated to all local offices for seamless implementation on completion and approval.
Reconciliation of monthly disputes registered on customer care system to ensure complete information is available.

64. Recommendations
It is recommended that the Select Committee on Social Services notes
SASSA 2016/17 Annual Performance Report;
SASSA financial statements for 2016/17; and
The audit outcome.

65. Thank you