1. Presentation to the Select committee On labour & Public enterprises
Shadrack Mkhonto
Compensation Commissioner
23 May 2012

2. Structure of the presentation
Overview of the Compensation Fund
Organisational Overview and Performance
Financial Performance
Auditor-General Report
Key Priorities

3. Measurable Objective
“To pay compensation for death or disablement caused by occupational injuries and diseases sustained or contracted by employees within 90 days of receipt of full documentation”

4. CF Strategic Objectives
Provide an efficient social safety net.
Providing professional, efficient and client orientated human resource.
Strengthen corporate governance.
Integration of the Fund with the comprehensive social security reforms.
Promote policy advocacy.
Improve financial viability.
Improve corporate support and services.
Enhance quality and access to COIDA services and information.

5. ORGANISATIONAL OVERVIEW AND PERFORMANCE5

6. KEY CHALLENGES Delays and/or non-reporting of accidents by employers
Information Technology systems
Human capacity constraints.
Records management system.

7. HIGHLIGHTS : 2010/11
The Fund has fully capacitated the top management component
The vacancy rate on the Fund’s establishment has been maintained at 5.5%.
The Fund has developed an integrated comprehensive policy framework for rehabilitation, reintegration and return to work of Compensation Fund beneficiaries. The process has been through a wide consultation with all relevant stakeholders.
This also called for the amendment of COIDA, of which certain sections to be considered for amendments have already been identified. The Fund with other role players is currently busy with drafting those amendments.
Improvement in settlement of objections, 82% of objections have been finalised within the prescribed 3 months period, and the backlog has been cleared

8. HIGHLIGHTS : 2010/11
Through the decentralisation project, a total number of 33,845 compensation claims and 245,966 medical claims have been processed to the value of R418,597,984
Three educational campaigns to inform clients about the Fund, were conducted in Limpopo, Mpumalanga and Eastern Cape, this resulted in claims being registered and processed on the spot
Through educational campaigns, print and electronic media, we were able to reach out to millions of our stakeholders
Increased compensation benefits approved eg. the monthly compensation pension increased by 4.6% plus 90% purchasing power of the low pension earners.
Corporate governance – the Compensation Board and its sub-committees, including the audit committee are functioning effectively

9. HIGHLIGHTS : 2010/11 RISK MANAGEMENT
Development of a formal Risk Management Strategy was adopted to ensure effective, efficient and transparent risk processes that focus on strategic and operational risks
Completion of a Fraud Prevention Plan to effectively manage the fraud risk to which the Fund is exposed – this has resulted in positive results (160 cases of fraud and other related to unethical activities were investigated and 13 officials were dismissed).
Organisational wide risk awareness was conducted as a pro-active measure.
Established a Toll-Free Crime Line, ( ) for staff and stakeholders to report unethical behaviour, crime and irregularities confidentially

10. OPERATIONS COMPENSATION CLAIMS
The remaining 33% are claims where the medical condition of the employee has not stabilised and will only be assessed in the next financial year..

11. COMPENSATION CLAIMS R801 724 702 R771 801 533 329 091 Payments

12. YEAR ON YEAR COMPARISON
COMPENSATION CLAIMS
YEAR ON YEAR COMPARISON
BREAKDOWN OF PAYMENTS

13. YEAR ON YEAR COMPARISON
MEDICAL CLAIMS
YEAR ON YEAR COMPARISON
In 2010/2011 financial year, of the 868,284 invoices paid, 495,051 invoices were paid within 30 days.
This translates into a 71% turn-around in medical payments in comparison to the 60% of previous year.

14. MEDICAL CLAIMS

15. FINANCIAL MANAGEMENT Financial Year 2010/11 2009/10 Variance
Contribution received
5,271,589
4,856,964 9%
Other Revenue
87,981
296,539
70%
Investment Income
2,177,780
1,964,076
11%
Benefits paid
(2,205,311)
(2,993,977)
26%
Admin Expenses
(889,112)
(1,382,417)
36%
Actuarial Adjustment
(799,571)
(431,233)
85%
Surplus
3,643,356
2,309,952
58%

16. FINANCIAL MANAGEMENT End of 2010/11 Financial Year 2010/11 2009/10
Variance
Variance %
R’000
Property, plant and equipment
76,817
79,577 3%
Investments Property
3,498 -
100%
Investments
26,517,483
23,355,091
14%
Receivables
1,503,777
631,615
138%
Cash and cash equivalents
75,865
580,779
87%
Accumulated funds and reserves
12,136,554
8,493,186
43%
Provision for outstanding claims
4,893,000
5,246,000 5%
Capitalised value for pensions
10,414,872
9,868,000 6%
Payables
643,014
1,039,876
38%
Total Assets
28,177,440
24,674,062

17. 3 YEAR FINANCIAL PERFORMANCE

18. HUMAN RESOURCES
STAFF ESTABLISHMENT
STAFF TURNOVER

19. HUMAN RESOURCES
EMPLOYMENT EQUITY

20. OVERVIEW OF AUDIT FINDINGS
/ / /11
Revenue contributions and assessment debtors
Qualification
Disclaimer
Bank (reconciliations/ suspense accounts /balances)
Disclaimer
Qualification Cleared
Claims incurred
Disclaimer
Qualification
Accounts payable
Disclaimer
Qualification Cleared
Property, plant and equipment
Disclaimer
Qualification Cleared
IFRS 7
Disclaimer
Qualification Cleared

21. KEY PRIORITIES 2010/11
Implementation of the approved organisational structure.
Decentralisation of COIDA services.
Implementation of the integrated claims and financial management systems.
Intensify the development and approval of the Rehabilitation, Reintegration and Return to Work Policy Framework.
Amendment of COID Act
Continue with COIDA educational campaigns to provide guidance on the Fund’s services
Improve revenue collection

22. Thank you