1. ANNUAL PERFORMANCE REPORT TO THE PORTFOLIO COMMITTEE OF LABOUR1
UNEMPLOYMENT INSURANCE FUND
ANNUAL PERFORMANCE REPORT
TO THE PORTFOLIO COMMITTEE OF LABOUR
13 September 2017
13 SEPTEMBER 2017

2. FOCUS AREA 2 Financial Performance 2016/2017 1. 2. 3. 4. 5. 6.
Legislative Mandate 2.
Vision, Mission and Values
Financial Performance 2016/2017
Auditor General 3.
Alignment to NDP
Annual Performance Plan 2016/2017 4. 5. 6.

3. 3
LEGISLATIVE MANDATE

4. INTRODUCTION 4
Section 27, To provide adequate social security nets to protect vulnerable workers
THE CONSTITUTIONAL MANDATE OF THE DOL-UIF
Creation of decent employment.
Providing adequate social safety nets to protect vulnerable workers
THE POLICY MANDATE OF THE DOL-UIF

5. UNEMPLOYMENT INSURANCE ACT5
Purpose
To establish UIF to which employers and employees contribute; and from which employees who become unemployed or their beneficiaries, as the case may be , are entitled to benefits and in so doing to alleviate the harmful economic and social effects of unemployment
Application of the Act
The Fund must be used for the,
1. Payment of benefit in terms of this Act
2. Reimbursement of excess contributions to employers
3. Payment of -
i. remuneration & allowances to members of the UI Board and its committees and
ii. any other expenditure reasonably incurred and relating to the application of this ACT

6. UI Contributions Act No 4 of 20026
The purpose of this ACT is to provide for :
1. The payment of contributions for the benefit of the UIF and
2.Procedures for the collection of such contributions
Purpose of Act
This Act must be administered by the Commissioner
The Commissioner may delegate any power or assign any duty which relates to the collection of :
contributions payable to the UI Commissioner in terms of section 9
any information to be submitted by employers in terms of this ACT, UIC
Administration of the ACT
This Act applies to all employers & employees; other than-
1. an employee & his/her employer where such employee is employed by that employer for less than 24 hours a month
2. an employee and his /her employer where the employee receives remuneration under a learnership agreement registered in terms of the Skills Development Act, 1998
3. employers and employees in the National & provincial spheres of government
4. an employee and his or her employer where an employee has entered the RSA for purpose of carrying out a contract of service, apprenticeship or learnership within RSA, if upon termination thereof the employer is required by law to repatriate that person or if that person is so required to leave the Republic
Application of the ACT

7. VISION, MISSION AND VALUES7
VISION, MISSION AND VALUES

8. Vision, Mission and Values8
UIF strives to contributes to the alleviation of poverty in South Africa by providing effective short term unemployment insurance to all workers who qualify for unemployment insurance and other related benefits
VISION
Rendering an effective and accessible service to all stakeholders
Being a sustainable organization with sufficient reserves
Administering the Fund professionally
MISSION
THE GLUE THAT HOLDS US TOGETHER
Transparency
Open to all stakeholders
Mutual respect
To all colleagues & stakeholders
Client-centres services
by Providing excellent & world class service to all
Integrity
Communicate openly and honestly with relationship based on trust
Accountability
Own up to our responsibilities in relations to our behaviours & actions
Team Work
Involve each other, work together, seek ideas and share solutions

9. ALIGNMENT TO NATIONAL DEVELOPMENT9
ALIGNMENT TO NATIONAL DEVELOPMENT
PLAN (NDP)

10. Service Delivery Outcomes & Strategic Goals
1. Outcome 4 : Decent employment through an inclusive
economic growth
2. Outcome 12 : An efficient , effective & development
oriented public service and an empowered
and inclusive citizenship
3. Outcome 13: An inclusive & responsive social protection
system 10
Service Delivery Outcomes & Strategic Goals
NDP Government Outcomes
Priorities of the Fund
Increase contributions collected by at least a rate equal to the prevailing Consumer Price Index
Increase the rate of processing claims in order to pay within the targeted service levels and turnaround times
Contribute in the various schemes designed to
alleviate the harmful effects of unemployment
which includes investing mandated funds in
Social Responsibility Investments
DOL
UIF Strategic Objectives
1. DOL strategic objective 1, Outcome 4
Contribute to decent employment creation
2. DOL strategic objective 5, Outcome 13) Strengthening social protection
3. DOL strategic objective 8, Outcome 12 Strengthening institutional capacity of the Department
Outcome 12
Improve financial
management
2. Outcome 13
Improve service delivery
Outcome 13:
Improve compliance
4. Outcome 4:
Fund poverty alleviation
scheme
Maintain effective systems of internal control as required by the Public Finance Management Act

11. UIF Annual Performance Review11
UIF Annual Performance Review

12. ANNUAL OVERALL ORGANISATIONAL PERFORMANCE PER INDICATOR12
ANNUAL OVERALL ORGANISATIONAL PERFORMANCE PER INDICATOR
STRATEGIC OBJECTIVES
ACTUAL OUTPUT - VALIDATED
Overall Achievement
Planned Indicators
Achieved
Not Achieved
Improve financial management 3 2 1
67%
Improve service delivery
50%
Improve compliance to the unemployment insurance acts 4
Fund poverty alleviation schemes
33%
OVERALL PERFORMANCE 12 6
PERFORMANCE %

13. UNEMPLOYMENT INSURANCE FUND13
UNEMPLOYMENT INSURANCE FUND
PROGRAMME 1: ADMINISTRATION
STRATEGIC OBJECTIVE 1: IMPROVE FINANCIAL MANAGEMENT
KEY PERFORMANCE INDICATORS
ANNUAL TARGETS
PROGRESS
REASON FOR VARIANCE
CORRECTIVE MEASURE
Percentage return on investment.
CPI + 2.5% return on investment by March 2017
Not Achieved:
5.90% (R7 286 919 311/   x100) return on investment was achieved by March 2017.
The South African economy will continue to run a negative output gap and remain in a stagflation bind for the rest of 2016/2017.
The Fund will review its investment strategy in line with the prevailing economic condition guided by actuarial evaluation
Administrative expenditure (excluding capex) as a percentage of revenue.
Administrative expenditure ≤ 15% by March 2017
Achieved:
Administrative expenditure (excluding capex) was 11 % of revenue ( / x100) of administrative expenditure as at March 2017
Percentage of total mandated social responsible investment committed
80% by March (Total investment as at beginning of financial year).
85%
(R 20 935  /24704 553x100) of total mandated social responsible investment committed by March 2017.

14. UNEMPLOYMENT INSURANCE FUND14
PROGRAMME 2: BUSINESS OPERATIONS
STRATEGIC OBJECTIVE 2: IMPROVE SERVICE DELIVERY
KEY PERFORMANCE INDICATORS
ANNUAL TARGETS
PROGRESS
REASON FOR VARIANCE
CORRECTIVE MEASURE
Percentage of valid claims with complete information approved or rejected.
90% of valid claims with complete information approved or rejected within five weeks of application by March 2017
Not Achieved:
Gauteng
Total received =
Total finalised =
=89%.
Received =
Finalised =
= 83%.
North West
Received =
Finalised =
= 94%.
Limpopo
Received =
Finalised =54 124
= 86%.
Mpumalanga
Received =
Finalised =
= 91%.
Free State
Received =
Finalised =
= 82%
Lack of capacity at service points.
Bandwidth/slow network performance.
Regular system downtime.
258 UIF CSO posts have been approved for deployment in the Provinces
The entire Labour Centre model will be reviewed in the new financial year.
Procurement of switches for upgrading the network will be finalized by September 2017.

15. UNEMPLOYMENT INSURANCE FUND15
PROGRAMME 2: BUSINESS OPERATIONS continued
STRATEGIC OBJECTIVE 2: IMPROVE SERVICE DELIVERY
KEY PERFORMANCE INDICATORS
ANNUAL TARGETS
PROGRESS
REASON FOR VARIANCE
CORRECTIVE MEASURE
Kwazulu-Natal
Received =
Finalised =
= 94%.
Eastern Cape
Received = 68127
Finalised = 58386
= 86%.
Western Cape
Received =
Finalised =
= 92%.
Northern Cape
Received =
Finalised=
= 96%.

16. UNEMPLOYMENT INSURANCE FUND16
PROGRAMME 2: BUSINESS OPERATIONS
STRATEGIC OBJECTIVE 2: IMPROVE SERVICE DELIVERY
KEY PERFORMANCE INDICATORS
ANNUAL TARGETS
PROGRESS
REASON FOR VARIANCE
CORRECTIVE MEASURE
Number of claims submitted through U-Filing claims portal.
20 000 claims submitted through U-Filing claims portal by March 2017.
Achieved
claims submitted through U-filing portal

17. UNEMPLOYMENT INSURANCE FUND17
PROGRAMME 2: BUSINESS OPERATIONS
STRATEGIC OBJECTIVE 3:STRATEGIC OBJECTIVE 3: IMPROVE COMPLIANCE TO UNEMPLOYMENT INSURANCE ACTS
KEY PERFORMANCE INDICATORS
ANNUAL TARGETS
PROGRESS
REASON FOR VARIANCE
CORRECTIVE MEASURE
Percentage increase in the number of newly registered employers
by March 2017
Achieved:
Total of new employers were registered
Percentage increase in revenue
7.5% by March 2017
Not Achieved:
March –
R18 256 811 119.38
March –
R17 120 380 688.29
Which yielded a
6.6% instead of 7.5%
increase in contributions revenue received during the reporting period.
UIF received 6.6% revenue against a target of 7.5% due to increase in unemployment.
The target for the 2017/18 financial year is reviewed down to 7.2% based on the actuarial estimates .

18. UNEMPLOYMENT INSURANCE FUND18
PROGRAMME 2: BUSINESS OPERATIONS
STRATEGIC OBJECTIVE 3: IMPROVE COMPLIANCE TO UNEMPLOYMENT INSURANCE ACTS
KEY PERFORMANCE INDICATORS
ANNUAL TARGETS
PROGRESS
REASON FOR VARIANCE
CORRECTIVE MEASURE
Percentage of
Overpayment balance collected (Opening Balance plus new overpayments noted less write offs and cancellations).
20% by March 2017
Not Achieved:
Collected 19.60% of the current balance –
R   mil (rounded off) which comprises of:
Opening Balance: R202 894 783.07
+ New: R109 496  COA
R772 214.64
-Cancellations: R2 677 581.78
- Unco-w/o
R424 239.71
Recoveries:
R 60 757 925.74
This is due to high rate in which new debt is raised, as well as the employment status of debtors who owe the Fund, that is, unemployed persons.
The compliance strategy will be implemented.

19. UNEMPLOYMENT INSURANCE FUND19
UNEMPLOYMENT INSURANCE FUND
PROGRAMME 2: BUSINESS OPERATIONS
STRATEGIC OBJECTIVE 3: IMPROVE COMPLIANCE TO UNEMPLOYMENT INSURANCE ACTS
KEY PERFORMANCE INDICATORS
ANNUAL TARGETS
PROGRESS
REASON FOR VARIANCE
CORRECTIVE MEASURE
Increase in number of employers using U-filing system per year
by March 2017
Achieved:
employers using U-filing

20. UNEMPLOYMENT INSURANCE FUND20
UNEMPLOYMENT INSURANCE FUND
PROGRAMME 3: LABOUR ACTIVATION PROGRAMMES
STRATEGIC OBJECTIVE 4: FUND POVERTY ALLEVIATION SCHEMES
KEY PERFORMANCE INDICATORS
ANNUAL TARGETS
PROGRESS
REASON FOR VARIANCE
CORRECTIVE MEASURE
Percentage of budgeted funds transferred for turnaround solutions implementation by PSA
80% of budgeted funds transferred by 31 March 2017
Not Achieved:
( /
X 100)
25%
Productivity SA picked up possible financial irregularities that could impact the funding agreement with UIF and accounting for funds. To this end PSA requested UIF to assist in investigating the financial irregularities.
The UIF and Productivity SA agreed to ring fence funds under investigation to enable a R24 million transfer which would be used to fund Turn Around Solutions for remainder of year.
Turnaround time to approve or reject Training Lay- Off Scheme application received from SETA.
Within 30 days after receipt of application
5 application received, 2 approved and 3 rejected within 30 days

21. UNEMPLOYMENT INSURANCE FUND21
UNEMPLOYMENT INSURANCE FUND
PROGRAMME 3: LABOUR ACTIVATION PROGRAMMES
STRATEGIC OBJECTIVE 4: FUND POVERTY ALLEVIATION SCHEMES
KEY PERFORMANCE INDICATORS
ANNUAL TARGETS
PROGRESS
REASON FOR VARIANCE
CORRECTIVE MEASURE
Turnaround time to transfer funds to a SETA after the approval of a training Lay-Off scheme application.
Within 30 days after approval of application
Achieved:
Funds were transferred to a SETA 53 days after the approval of a Training Lay-Off scheme application
Funds were not transferred within 30 days after approval of the training Lay Off scheme
The approval process took longer than anticipated. The directorate to develop indicators that are within their control.

22. UNEMPLOYMENT INSURANCE FUND22
UNEMPLOYMENT INSURANCE FUND
STRATEGY TO OVERCOME AREAS OF UNDERPERFORMANCE
No.
Performance indicator
Major variance and reasons
Action taken to resolve the problem 1.
Percentage return on investment.
The South African economy ran a negative output gap and remained in a stagflation for the rest of 2016/2017.
The Fund reviewed the investment target as per the advise from actuarial valuations 2.
Percentage of valid claims with complete information approved or rejected ( as per Funds Operational System per year )
Inadequate capacity at service points.
Bandwidth / slow network performance and regular system downtime
The entire Labour Centre model will be reviewed in the new financial year.
258 CSO posts in the process of being filled.
Procurement of switches for upgrading the network will be finalize by September 2017 3.
Percentage increase in Revenue per year
Actual revenue that is received fluctuates based on the economic factors prevailing at the time including technical recession
The target for the 2017/18 financial year is set down to 7.2% based on the actuarial estimates

23. UNEMPLOYMENT INSURANCE FUND STRATEGY TO OVERCOME AREAS OF UNDERPERFORMANCE23
No.
Performance indicator
Major variance and reasons
Action taken to resolve the problem 4.
Percentage of budgeted funds transferred for turnaround solutions implementation by PSA
Non-compliance with funding agreement by PSA.
Due diligence measures to be agreed upon by PSA and UIF to ensure timeous funding for 2017/18. 5.
Turnaround time to transfer funds to a SETA after the approval of a training Lay-Off scheme application
The approval process took longer due to due diligence processes.
Due diligence measures to be agreed upon by SETA’s and UIF to ensure timeous transfer of funds for 2017/18. 6.
Percentage reduction in overpayment balance ( Opening balance plus new overpayments noted less write offs and cancellations)
Target was underachieved by 0.4% due to increased number of debtors unable to repay debt due to being unemployed.
Implement the compliance strategy to improve compliance by employers

24. UIF Annual Financial Performance24
UIF Annual Financial Performance

25. STATEMENT OF FINANCIAL PERFORMANCE AS AT MARCH 201725
31 March 2016
R’000
31 March
2017
Year on Year Percentage Variance
 COMMENTS
Revenue
(7%)
Revenue is made up of contributions
+90% contributions received is collected by SARS . The increase is due to new employers registered and inflation increased on salaries.
Benefit payments
( )
( )
(10%)
Unemployment benefit = 82%
Illness benefits increased by 3%
Maternity benefits = 11%
Defendant benefit = 4 %
More unemployment benefits were paid in the current year.
Income from Investments
(19%)
Interest and dividends on investment is lesser than the budget. This is due to the current volatile economic climate.
Other income
6 147
7 657
1 510 (25%)
Compromise of rental income from investment properties, recoveries on overpayments written off and proceeds on disposals of assets.
Administration Costs
( )
( )
(12%)
The main cost driver : Commissions SARS and PIC , Computer services, Operating Leases.
Portfolio management fee increase in line with the growth in the portfolio.
Poverty Alleviation Schemes
(80 571)
( )
(81%)
More training interventions for the unemployed were done in the current year.

26. STATEMENT OF FINANCIAL PERFORMANCE AS AT MARCH 201726
31 March 2016
R’000
31 March
2017
Year on Year Percentage Variance
 COMMENTS
Employee costs
( )
( )
(13%)
The increase in compensation of employees is due to the new structure and growth in the Fund.
Fair value adjustments
( )
( )
(-38%)
Unrealized Profit/ Loss.
Net surplus / ( deficit)
(24%)

27. Statement of Financial Position as at March 201727
 March 2016
R’000
March 2017
PERCENTAGE%
 COMMENTS
Property , plant and Equipment
16%
The increase is due to the purchases of computer equipment and computer software.
Current Assets
662%
The increase in current assets is due to an outstanding contribution totalling R1,7 billion from the National Revenue Fund.
Current Liabilities
22%
The increase is due to the increase in benefit payables form R4,2 billion to R5,2 billion. The rate of unemployment has increased.
Total investment portfolio
12%
Total investment portfolio . The Fund has invested its portfolio in different investment instruments through PIC.

28. AG Audit Opinion for 2016/17 Financial Year28
The Fund received a Disclaimer Opinion from AG.
Basis for Disclaimer Opinion “ AG Remarks”
Investments
The value of unlisted investments in the annual financial statements did not agree to amounts in the supporting evidence. Consequently investments were understated by R There was a resultant impact on the surplus for the period and on the accumulated surplus in the financial statements. Additionally, significant investments in subsidiaries and associates were not consolidated and equity accounted respectively in accordance with GRAP 6, Consolidated and separate financial statement and GRAP 7, Investments in associates. I was not able to determine the impact of not consolidating and/or equity accounting on the overall financial statements.
Furthermore, I was unable to obtain sufficient appropriate audit evidence for the balances disclosed for investments due to number of adjustments to the supporting evidence. I was unable to confirm the stated amounts by alternative means. Consequently, I was unable to determine whether any adjustment was necessary to the investments amounts stated at R in the financial statements.

29. Basis for Disclaimer Opinion29
Investment revenue and fair value adjustments
I was unable to obtain sufficient appropriate audit evidence that investment revenue and fair value adjustments for the year under review had been properly accounted for, due to number of adjustments to the supporting evidence. I was unable to confirm investment revenue and fair value adjustments by alternative means. Consequently, I was unable to determine whether any adjustment was necessary to confirm investment revenue and fair value adjustments stated at R and R respectively in the financial statements.

30. Operation Clean Audit 2017/1830
A Management Action plan has been developed and is being implemented.
Meetings were held with PIC to address the audit findings.
Technical opinion on Grap6, 7 and 8 has been sought.

31. 66
Thank You…