1. Presentation to the Select Committee on Social Services
Annual Report 2011/12
Presentation to the Select Committee on Social Services

2. Presentation Outline Purpose
Programme Performance Information - Achievements against 2011/12 Strategic Priorities;
Budget and Expenditure for 2011/12; and
Summary of Audit Outcomes

3. Purpose of the Presentation
The purpose of this presentation is to present to the Select Committee on Social Services
the 2011/12 Annual Report for the Agency;

4. SASSA Strategic Priorities
SASSA’s key priorities areas for the year under review were:
Customer Care -centered Benefits Administration and Management System;
Systems Integrity
Increased access to social security services

5. Key Areas of Focus
Given these key challenges, the Agency has identified the following as key priority projects:
Service Delivery Improvement
Automation of Grant Management and Administration
Improvement of the Payment Method
Implementation of Current Payment Reforms including Re- registration of all beneficiaries and children
Development of New Payment System
Improved Audit Report – Towards Clean Audit

6. Key highlights
The period under review was characterised by various positive developments that informed the strategic and operational direction of the Agency to a large extent.
The appointment of the Chief Executive Officer (CEO) brought about stability in the top leadership of Agency.
SASSA remains one the major delivery network for government with more 2500 service delivery points; including 335 local offices; 902 Service points; and pay-points

7. Key highlights (cont…)
At the end of the financial year, approximately 10.3m recipients were benefiting from the social assistance programme and the number of benefits stood at ;
approximately 1.2m social grants were processed
A new service provider was appointed in January to pay social grants on behalf of the Agency for the next five years. SASSA embarked on preparatory process to facilitate migration of beneficiaries from old contractors to new payment providers.

8. PERFORMANCE INFORMATION
Achievements against the 2011/12 Agency’s priorities

9. PRIORITY 1 Customer Care-centred Benefits and Administration and Management System

10. Implementation of the Social Assistance programme
Target
Achievements
projected number of grants in payment
social assistance benefits are in payment
are children’s grants;
are older person’s grants;
are people with disabilities grants;
753 are war veteran grants; and
are grant-in aid recipients
Overall the number of social grants benefits in payment was at the end of financial year
Grants increased by which represents overall growth of 4.4% from previous financial year.
Processed approximately 1.2 million new applications and more than grants were lapsed
It is important to note that there has been 25.5% growth in the number of Acts in payment over the past 5 years.

11. Number of grant benefits and percentage growth over a five year period by grant type
2006/07
2007/08
2008/09
2009/10
2010/11
2011/12
Old Age Grant
War Veteran Grant
2 340
1 924
1 500
1 216
958
753
Disability Grant
Grant-in-Aid
31 918
37 343
46 069
53 237
58 413
66 493
Foster Child Grant
Care Dependency Grant
98 631
Child Support Grant
Total
Annual growth
3.4%
5.2%
7.5%
6.2%
4.42%

12. Implementation of the Social Assistance programme
Impact of CSG Extension to children (16 – 17 years)
The target was to reach due to CSG extension.
99% achievement – The number of grants in payments for children aged between 16 and 17 years is
Social Relief of Distress
Target was to disburse 95% of allocated funds in accordance with approved guidelines.
There was over-expenditure of 2%. Total expenditure on social relief was R189m out of the allocated R185m.
The money was spent largely on families experiencing undue hardships, individuals awaiting grants; and assisting families where the breadwinner died

13. Implementation of the Social Assistance programme
Internal Reconsideration Mechanism (IRM): Target was to develop and implement IR mechanisms
Developed the IRM guidelines
Received IRM requests and requests were adjudicated within 90 days (this figure represents 52% of the received cases)
Disability management: The focus with regard to disability management was on improving disability assessment processes and ensuring quality assurance of medical assessments.
Improvements in assessment quality led to the purging of ineligible beneficiaries during medical reviews and a general decline in inclusion errors.
There was a net decrease of in the number of disability-related grants.

14. Service Delivery improvements
Objective: streamlining business processes for optimal value for money; ensuring a shift in manual processes; and improving services rendered
Improvement of the application process:
89% of all new applications were processed within 21 days
Approximately 1.2m new applications were processed
1.06 were processed within 21 days
Standardisation of Business Processes
Grant application forms have been reviewed and reduced, to eliminate the obtaining of information which does not add value to the processes.

15. Service Delivery improvements
Standardisation of Business Processes: The objective is to ensure that every SASSA customer experiences the same business processes, regardless of where he or she chooses to apply or transact with SASSA. The major focus during this period was the standardisation of business processes at local offices.
Uniformity of services at the local office level.
Business processes have been mapped and front line staff were trained on the improved processes, which seek to eliminate duplication in functions, while at the same time ensuring quality,
All provinces standardised on a 4 step process, while Eastern Cape and Free State (which already have a partially automated management system in place) have standardised on a 3 step process.
Introduced the quality assurance function in the grants value chain at local offices level.

16. Service Delivery improvements
Standardisation of Business Processes: The objective is to ensure that every SASSA customer experiences the same business processes, regardless of where he or she chooses to apply or transact with SASSA.
Improvements in local offices infrastructure
75 local offices were upgraded to suit the new standardised application process.
Improvements in this regard included changing the office layout, installation of ICT infrastructure, branding and provision of adequate sitting space for applicants and beneficiaries.

17. Effective and Efficient Payment System
Objective: Improving the payment system; enhance payment services to beneficiaries and address the current payment challenges.
Target
Achievements
Improvement of pay-point infrastructure
300 Pay-points improved
The main aim of the project is to improve pay points nationally.
The agency achieved its target and improved 366 pay points.
The total expenditure as at 31 March 2012 was 13,820, (89% of the budgeted amount).
Some of the improvements implemented included repairs to and/or upgrading of existing shelters, the erection of shelters (tents), the purchase and/or upgrading of ablution facilities, the provision of chairs, the construction of access ramps and the erection of fencing

18. Effective and Efficient Payment System
Objective: Improving the payment system; enhance payment services to beneficiaries and address the current payment challenges.
Target
Achievements
R50 million recovered from dormant accounts
At least R34.8 m was recovered from dormant accounts. (achieved only 69% recovery achieved due to legislative impediments)
Management of services provided by payment contractors
Old payment contracts were terminated at the end of financial year.

19. Effective and Efficient Payment System
Objective: Improving the payment system; enhance payment services to beneficiaries and address the current payment challenges.
A new service provider was contracted in January 2012 to implement the new payment solution; The contract formally commenced in April 2012.
Agency had to undertake preparatory work prior to commencement of the contract which included:
System conversions and trials
Preliminary re-registration of beneficiaries who were previously paid by other contractors
Card swaps
In March 2012, the first phase of the new payment solution was implemented for new grant applicants in all nine regions

20. Effective Management of Beneficiaries
Notification for reviews and life certification. The following targets were set:
reviews
life certification
were notified of administrative decisions and reviewed
beneficiaries were life certified
grants were lapsed
Beneficiary Records Management: This involves the updating beneficiary records both backlogs and new exceptions
32% of beneficiary records with backlogs updated.
beneficiary records with exceptions resolved. This included incorrect ID (7 279); incorrect addresses ( ); incorrect banking details (1 511); undeclared means (7947)

21. Improved System Integrity
PRIORITY 2
Improved System Integrity

22. Human Capital Management
Total number of posts of SASSA establishment is
Only 9137 of these posts are funded
Total Number of employees as at March 2012: 8437
Filling of funded posts: Target was to fill posts
A total of posts were filled:
1 384 targeted
105 Additional posts filled for special projects (EPWP, MIS, grants review, debt management)
Employee wellness programme
In an attempt to control absenteeism due to ill health, the Agency ensured that wellness education was promoted through its Employee Wellness Programme;
2 487 employees participated in health-screening exercises to evaluate their health status

23. Human Capital Management
Skills Audit
Time and motion studies resulted in:
the development of staffing norms for all standardised operations in local offices;
The development of a capacity model, which included the job profiling of positions in line with standardised processes; and
A skills audit in the Western Cape, which would identify skills gaps and the implementation of the necessary training interventions.
The Skills Audit for the Finance Branch was not achieved due to reprioratisation in the organisation

24. Internal Audit and Risk Management
The main priority for the Agency was the implementation of an integrity model to ensure a culture of commitment, professionalism and discipline; and to reduce fraud and corruption and ensure good governance
Developed and implemented the Integrity policy
Developed the Ethics Programme.
An Integrated Fraud Prevention Strategy has been developed, which will enhance the efficiency and effectiveness of fraud prevention, detection, investigation and resolution within the Agency;
A total of fraud cases were referred to law enforcement agencies, including the Special Investigating Unit (SIU) for further investigation and prosecution;
1 048 internal fraud investigations were conducted by the Agency’s fraud and compliance staff and beneficiaries were verified for eligibility and existence throughout the Agency;
A total of persons were brought before the courts in the year under review. Of this number, were convicted; and
5 414 people signed acknowledgements of debt valued at R43.7m for the repayment of fraudulent grants.

25. Legal Services
The objective is to provide efficient and effective legal services to the Agency.
Through the implementation of the legal services frameworks, the Agency was able to:
Decrease the number of in particular social grant related litigation cases per annum from 15 224 in 2008/09 to 249 in 2011/12; and this figure represents a % reduction in litigations over a period of four years.
Prepare contracts, which incorporated terms that are favourable to the Agency; and
Conduct four major training sessions on the Promotion of Administrative Justice Act (PAJA) for targeted employees of the Agency in collaboration with the Department of Justice and Constitutional Development in order to promote awareness of the right of the public to be given reasons for an administrative decision that affects their rights.

26. Increased access to Social Security
PRIORITY 3
Increased access to Social Security

27. Community Outreach Programmes
Objective: Improve accessibility of SASSA programmes and maintain a good relationship with customers.
Target
44 rural wards having access to social assistance through ICROP
The target of 44 rural wards was surpassed as 495 rural wards were reached through ICROP
beneficiaries in the rural wards were reached and serviced through the ICROP. The target of 65 500 beneficiaries for the period under review was exceeded.
Customer relationship Management
99% of enquiries were attended to. ( out of enquiries were attended to)
88% of the complaints were resolved within 5 days ( of complaints received)

28. BUDGET AND EXPENDITURE FOR 2011/12
Financial Performance
BUDGET AND EXPENDITURE FOR 2011/12

29. SASSA 2011/12 Audited Financial Outcome

30. Economic Classification Spending against budget
Note: Cash Handling fees are reflected separate from Goods & Services

31. The Agency’s revenue and expenditure
Total expenditure for the period under review amounted to R5,2 billion (86% of the allocated budget)
The Agency had a saving of about R881 million;
The bulk of expenditure on the Administration Budget (about 30%) went to the payment of contractors contracted to disburse grants to beneficiaries;
This is followed by expenditure on personnel, while the remaining balance covers other operational expenses and projects;

32. Reasons for Variances on Expenditure
Compensation of Employees
A saving on personnel expenditure is mainly attributable to delays in the filling of critical and replacement posts which was only concluded during the last quarter of the 2011/12 financial year.
Goods & services
A significant part of the financial year’s surplus is attributed to the saving on cash handling fees (R270,927 million)
This was due to the lower tariffs charged by the contractors after renegotiation of the contracts This resulted in SASSA paying less cash handling fees, thus achieving efficiencies on the cost of disbursing grants.
The spending on a number of other strategic projects including improvements of local offices and pay-points was also delayed due to the delayed commencement of most of these projects

33. Reasons for Variances on Expenditure
Transfers & Subsidies
A significant amount of transfers and subsidies is allocated to skills levy as per Skills Development Act. The Agency apportioned 1% of the total compensation of employees budget to skills levy.
Due to delays in the filling of posts, the allocated budget for skills development levy was partially spent.
Payment for Capital Assets
SASSA overspent on Capital expenditure, particularly ICT equipment:
procurement of computers and printers for the newly appointed employees.
part of the budget was utilised on ICT infrastructure development ( Cabling of offices)

34. Auditor-General Report and Comments

35. Audit Outcomes Both SASSA + DSD received an unqualified audit opinion
AGSA’s opinion
The financial statements present fairly, in all material respects, the financial position of the Agency as at 31 March 2012 in accordance with SA Standards of GRAP and the requirements of the PFMA and the South African Social Security Agency Act, 2004 (Act No.9 of 2004).
Significant Uncertainty
Significant uncertainty regarding the Payment Tender and according to the AG, the outcome of this lawsuit may determine whether there was any non compliance in the procurement process.

36. Recommendations
It is recommended that the Select Committee on Social Services note SASSA’s Annual Report for 2011/12.

37. Thank You