1. Follow-up Presentation to the S. S. Mkhonto Compensation Commissioner 25 May 2010

2. Clearing of suspense accounts The suspense account is reconciled every month to identify the items that need to be cleared. R87 million was in the suspense account. This amount (R87 million) has been cleared by March 2010. The reasons for this were : 1) due to beneficiary payments made in March 2008 but only reflected in the bank statement of April 2008. The proper accounting treatment of this transaction at year end should have been classified as outstanding payments instead of suspense account. 2) Deposits into the Fund’s bank account, with no reference numbers from employers. The bank has since assisted the Fund to trace and allocate these unknown deposits to the relevant employers. 2

3. Total CF Staff Establishment FILLING OF VACANCIES WITHIN THE FUND 3 Total No Approved posts Total FilledTotal No. Vacancies Vacancy rate as at 31/3/2009 70758412317.3% Total No Approved posts Total FilledTotal No. Vacancies Vacancy rate as at 31/3/2010 709 645 653 64 56 9.0% 7.8%(24/5/10)

4. Status on current 64 Vacancies 9 New appointments approved wef 01/04/2010. 24 Interviews held awaiting NIA results. 28 Posts already advertised, interviews scheduled for May. 3 Vacancies still to be advertised. FILLING OF VACANCIES WITHIN THE FUND 4

5. Previous Status as at 31 March 2010 Current Status as at 24 May 2010 9 New Appointments approved wef 1/4/10 8 New Appoint approved wef 1/5/10 24 Interviews held awaiting NIA results16 Interviews awaiting SAQA And NIA results 28 Posts already advertised, interviews scheduled for May 2 posts interviews – 20/5/10 5 posts interviews-31/5/10 4 posts interviews- 2/6/10 7 posts interviews- 3/6/10 8 posts interviews-4/6/10 2 posts to be readvertised 3 Vacancies still to be advertised3 Vacancies confirmed to be advertised by HQ on 30/5/10

6. Month 2009 April92633 1 91 2009 May.91 0 1 92 2009 Jun92010 12 94 2009 Jul.94241 11 97 2009 Aug.97952 2198 2009 Sept.988 2 1 3 191 2009 Oct.91124 11 85 2009 Nov8551 11 86 2009 Dec.86 8 24 92 2010 Jan92201112 3 74 2010 Feb.74 0 1 75 2010 Mar.75145111 2 67 TOTAL 76321136 MonthVacanciesNew Appt. Promot e ResignDismissDeathTrans. Out Trans. In VSRetirementTotal vac. Month end

7. HRM Vacancy statistics

8. CLAIM STATISTICS AT 31 MARCH 2010 8 FINANCIAL YEAR CLAIMS REGISTERED CLAIMS ACCEPTED CLAIMS REPUDIATED CLAIMS PAID 2007/8213 241180 9961545159 576 2008/9209 830180 7561439155 524 2009/10203 711139 302620107 293

9. Claims information The table indicates the total number of claims registered during the past financial years, 2007, 2008 and 2009 It also indicates how many claims have been accepted, repudiated to date and how many have awards paid to date- Some claims from previous years have been re-opened and additional benefits paid during this financial year. The difference between registered claims and accepted + repudiated are claims which have not been accepted due to outstanding information Most not accepted claims are where the employee was off duty for 3 days and less, no first medical reports submitted or employee received first aid treatment and did not see a medical doctor. No compensation benefits are payable for such claims

10. Claims information cont… Claims for 2007 financial year still not accepted by 31 March 2010 were 24 565 Claims for 2008 financial year still not accepted by 31 March were 31 490 Claims for 2009 financial year still not accepted by 31 March 2010 were 71 070

11. Compensation benefits processed in the 2009 financial year All compensation benefits paid-TTD, PD plus monthly pensions. Within these claims, are those that had not furnished required documents in the previous years and have only submitted during this financial year after our review process and follow up. The slides indicate that there has been an increase on payments as compared to the previous financial years. This is attributed to the new policy on minimum earnings for TTD and the continuous review of previous claims.

12. PaymentNo. of paymentsAmount Additional compensation2825 994.00 Burial expenses3372 422 986.58 Constant attendance allowance62466 271 628.00 Lump sum to widows4003 886 038.07 Partial dependancy15164 230.09 PD lump sum payment (30%)1017 050 193.27 PD pension payment (<30%)432985 458 303.70 PD pension (>30%)86818191 372 912.65 Pension198059343 574 258.68 TTD43475130 540 529.61 Widow & child pension240234 458.93 TOTAL340159771 801 533.58 Breakdown of compensation benefits processed payments

13. A claim is registered with an employers report of accident/disease The treating doctor submits the first medical report as evidence of personal injury as required by the act. The fund determines liability for the claim on the basis of the employer’s report and the doctor’s medical report Where liability is accepted, the employer pays salary for the off duty days-maximum of 3 months where after the fund takes over- the fund reimburse the employer for the three months payments While the employee is still off sick, the employer/employee submits progress medical reports indicating prognosis-enables continuous payment of salary by the fund. Once the condition has stabilized, the treating doctor submits a final medical report for the fund to assesses permanent disablement. The act requires the assessment of PD to be done only when the condition is stable. Claims with serious conditions can take up to two years to stabilize hence delayed settlement of such claims. COIDA PROCESS

14. Unaudited – March 2010 (R000) March 2009 (R000) Contributions revenue4 321 8984 513 720 Investment income1 687 1962 073 004 Other income-21 228 Compensation claims647 122150 133 Medical claims1 441 3371 540 340 Increase in the provision for outstanding claims -1 239 000 TOTAL BENEFITS PAID2 088 4592 929 473 Admin783 045433 565 Year end provisions-2 073 796 Surplus \ Deficit3 137 5901 171 118

15. The actuarial valuations for the year 2009/10 is in the process of being finalised by the actuaries. The valuation will only be available after the finalisation of the audit ie. August 2010 as actuaries only utilize audited financial statements.

16. As at the 31 March 2010 the following figures were available for Compensation benefits paid on the financial system Compensation benefits paid Compensation claims**647,122 Medical claims1,441,337 ** Compensation Claims Paid to employees598,944 Paid to employers48,179

17. Variance between processed and actual paid The difference of(R124 m) between the total actual paid benefits by the Finance Directorate (647m) and the total processed by the Claims Directorate (R771m) is caused by the delays in submission of banking details by beneficiaries. This problem is being addressed through a special campaign-see slide 18

18. The current unclaimed monies is R28.4 million A notice was published in the Government Gazette volume 529 No 32346 of 3 July 2009, to request all beneficiaries of unclaimed monies to claim their dues. During the month of March the Fund ran a month –long radio and newspaper advertisement to request the beneficiaries of the unclaimed monies to come forward and provide the Fund their banking details Since the advert went out 1 500 beneficiaries came forward and provided the Fund with the banking details and all have since been paid. UNCLAIMED MONIES 18

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20. DEPARTMENTS CONTRACTUAL OBLIGATIONS TO SIEMENS (High Level) to provide optimised and documented business processes for automation to ensure user and management participation in systems automation to transfer to Siemens, DoL ICT employees prior to contract commencement to ensure timely payment of the unitary fee to inform Siemens 12 months prior to expiry whether the contract will be renewed to compensate for delays or defaults caused by the Department transfer of legacy assets to Siemens to ensure a change management governance process are in place to ensure a secure working environment to manage third party service providers eg. SITA

21. OPERATIONAL CHALLENGES FROM SYSTEMS Employment Services system o slow response o problems with saving of documents o unstable RESOLUTION : this system has been re-developed and optimised with no major issues reported Compensation Fund systems o disparate and legacy systems o scanning challenges RESOLUTION : Development of an integrated claims management system to commence. Scanning environment has been upgraded. Other General challenges o bandwidth at labour centres (contributes to slow response) 109 centres bandwidth have been upgraded in the last 9 months by SITA

22. RAND MUTUAL SYSTEM The Fund conducted a Proof of Concept and then planned to pilot the system A budget of R2 million was approved for this process Total costs to Rand Mutual are R524 427.10 These costs relate to user training, systems setup, resources etc.

23. COMPENSATION FUND CLAIMS SYSTEM DECISION An audit was conducted on the Rand Mutual project which resulted in a negative finding The decision was taken to implement the Siemens solution due to the following : - will be developed based on CF’s business requirements and processes and will be customized for CF - will be a fully integrated system, including the financial module, with additional components eg. Customer Relationship Module - will be aligned to the DoL systems architecture and function across the organisation seamlessly including integration with components of other DoL systems eg. Integrated Client Database - development of the solution and infrastructure is included within the PPP - support and maintenance is from one service provider

24. High-Level Project Schedule – CF claims system ActivityJuneJulyAugSepOct.NovDecJan 2011 Feb 2011 March 2011 Requirements Workshop Solution Integration Design Blueprint adaptation by all parties Blueprint Sign-Off Realization Final Preparation Training of 100 CF users GO LIVE Roll-Out and Cut-over Data interrogation, cleansing & preparation Data Migration Project close out 15/06/10 30/07/10 30/11/10 31/03/11

25. Year endedUnitary feeAdditional services Total 31-Mar-03 40,833,333 - 31-Mar-04 125,463,046 36,806,561 162,269,607 31-Mar-05 136,962,744 22,646,145 159,608,889 31-Mar-06 160,210,820 14,130,604 174,341,424 31-Mar-07 158,421,099 21,988,865 180,409,964 31-Mar-08 194,901,365 11,386,879 206,288,244 31-Mar-09 202,499,896 9,694,687 212,194,583 31-Mar-10 219,218,864 12,248,944 231,467,808 TOTALS 1 238 511 167128 902 6851 367 413 852 PPP PAYMENTS PER ANNUM

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