1. Presentation of 2007/08 Annual Report to the Portfolio Committee on Social Development

2. 2 Outline of the presentation The presentation covers the following:  Part One: General Information;  Part Two: Achievements against 2007-2010 Strategic Plan Priorities;  Part Three: Grants Statistics;  Part Four: Budget and Expenditure for 2007/08;  Part Five: Auditor-General Report and Comments; and  Part Six: Challenges and Concluding Remarks on 2007/08 financial year.

3. 3 PART ONE General Information

4. 4 Legislative Mandate SASSA derives its mandate from the following Acts:  The Constitution of the RSA, 1996 (Act No.108 of 1996) as Amended – “everyone has the right to have access to : Social Security, including, if they are unable to support themselves and their dependants, appropriate social assistance”  Social Assistance Act, 2004 (Act No.1 of 2004)- “provide for the administration of social assistance and payment of social grants.”  SASSA Act,2004 (Act 9 of 2004)- one of the object of the act says the Agency will “act, eventually, as the sole agent that will ensure the efficient and effective management, administration and payment of social assistance.”

5. 5 SASSA’s Mandate To ensure the provision of a comprehensive social security service against vulnerability and poverty within the constitutional and legislative framework.

6. 6 Vision “To provide world-class social security services”

7. 7 Key Strategic Objectives  Ensure a High Performance Institution;  Service Delivery Improvement;  Improvement of Operational Excellence; and  Good Governance.

8. 8 PART TWO Achievements against 2007-2010 Strategic Plan Priorities

9. 9 Achievements against 2007/8 MTEF Priorities Key achievements recorded during the 2007/8 financial year are outlined in terms of the six (6) MTEF priorities that were as follows:  Improving Service Delivery Quality;  Improving organizational capacity;  Improving Financial Management Capacity;  Improvement of payment services;  Enhancing Social Grants Process Integrity; and  Minimizing Fraud.

10. 10 1. Improving Service Delivery Quality  Norms and standards are being implemented: Standardised application process and forms implemented in all regions; Improvements of various pay points; One day turn around times achieved in selected regions; and Accessibility increased through ICROP.  Customer Care Charter developed and translated into all official languages;  Standardised assessment guidelines for Disability grants developed and implemented in all regions;  Conceptual monitoring and evaluation framework developed and implemented;  Statistical monthly reports on grants produced and published in the SASSA’s website;

11. 11 1. Improving Service Delivery Quality Cont…  40 mobile units deployed in all regions;  Social Relief of Distress processes developed and implemented in all regions;  Partnerships were entered into with the following organisations to strengthen collaboration in different research areas: World Bank; UNICEF; SVB of Netherlands; City of New York (USA); Old Mutual; and United Nations Development Programme.

12. 12 1. Improving Service Delivery Quality Cont…  Communication strategy implemented;  Marketing and promotional material translated into all official languages;  Developed and rolled-out of new corporate identity for SASSA;  The review and implementation of an integrated marketing strategy for the Agency; and  The submission of the 2008/09 MTEF to the Department of Social Development on time, timely submission of the Estimate of National Expenditure, In-Year Monitoring reports.

13. 13 2. Improving Organizational Capacity:  543 posts filled which increased the staff complement by 8% (from 6985 to 7528);  Corporate governance structures such as EXCO, MANCO, Audit Committee, BID Committee and Financial Misconduct Board in place;  ICT related policies and IT systems developed and implemented;  Business and application architecture frameworks (Business Plan) for the grant administration system developed;  Knowledge Management strategy developed and implemented;

14. 14 2. Improving Organizational Capacity cont..  Partnerships entered into with World Bank, UNICEF, SVB, City of New York (USA) and UNDP to strengthen the collaboration in different research areas;  Two rapid assessment evaluation projects were conducted, namely: Quantitative analysis of the impact of the CSG; and Review of the CSG- uses, implementation and obstacles.  Micro and macro simulation models developed for budget planning for social security benefits;  Corporate governance framework developed and implemented;  Code of conduct and ethics developed;  Five (5) Audit Committee meetings held;

15. 15 2. Improving Organizational Capacity cont..  Database normalisation framework developed for 1 st phase of SOCPEN enhancement;  95% availability of business systems achieved;  Various strategies in support of the broader Human Resource Strategy for the Agency were developed and implemented;  20 Human Capital Management policies developed and implemented;  National Bargaining Forum’s (SNBF) Constitution adopted by SASSA and organised labour;

16. 16 2. Improving Organizational Capacity cont..  A customised Performance Management and Development System for SASSA developed;  Auxiliary Support Services Strategy developed and implemented ;  12 Auxiliary Support Services policies developed and implemented; and  Litigation and Contract Management Frameworks developed and implemented.

17. 17 3. Improving Financial Management Capacity  Financial Misconduct Board established and operational;  Deadlines for weekly, monthly, quarterly submissions on financial matters met;  Completed seven (7) ERP modules;  Deadlines for the MTEF and adjustment budget complied with; and  Key financial policies, procedure manuals and delegations developed and implemented.

18. 18 4. Improvement of payment services  The monitoring tool for checking compliance against norms and standards regarding the conditions of pay points was developed and rolled-out in eight (8) regions; and  Five (5) new pay points constructed in the Eastern Cape region.

19. 19 5. Enhancing Social Grants Process Integrity  MIS (workflow/tracking module) implemented in Eastern Cape and Free State regions;  Improved Grants Application Process (IGAP) is being piloted in Free State region;  The verification process strengthened through the implementation of IGAP in two regions, namely; Eastern Cape and Free State; and  A service provider appointed to analyse data to detect errors and irregularities in data through interfaces with other systems.

20. 20 6. Minimizing Fraud  Over 1000 fraud hotline cases have been profiled and investigated;  4204 fraud cases investigated by SIU with 3625 convictions;  9391 Public servants signed acknowledgement of debts totaling R50,8 million;  118 655 terminations from the grants system recommended;  Fraud prevention and compliance plan is being implemented;  Draft Risk Management Strategy developed;  Strategic and operational risk register compiled;

21. 21 6. Minimizing Fraud cont..  Code of Conduct and Ethics was developed;  Fraud prevention strategy for the Agency developed and implemented;  Whistle-blowing policy being implemented;  Pre-employment screening of all new employees – particularly those in high risk positions;  Security and integrity vetting of all senior managers and targeted in high risk areas; and  SOCPEN database interfaced with PERSAL and GEPF.

22. 22 Part Three: Grants Statistics

23. 23  The total number of grant recipients increased by 403 255 (3.4%) in the 12 month period between March 2007 and March 2008; and SASSA’s Key Achievements for 2007/08

24. 24 Growth trends by grant type between March 2007 and March 2008 Grant typeMar-07Mar-08 Number Increased Number Decreased Disabled 1 422 8081 408 456--14 352 Grant-in-aid 31 918373435 425- Old age 2 195 0182 229 55034 532- War Veteran 2 3401924--416 Care Dependency 98 631102 2923 661- Child Support 7 863 8418 189 975326 134- Foster Care 400 50345419953 696- Total 11 983 141 12 386 396423 44814 768

25. 25 Growth trends by grant type between March 2007 and March 2008  This table shows the distribution of grant recipients by grant type between March 2007 and March 2008;  The total number of grant recipients increased by 403 255 in the 12- month period between March 2007 and March 2008; and  The number of recipients of the disability grant declined by 14 352 and that of the war veteran grant by 416.

26. 26 PART FOUR Budget and Expenditure for 2007/08

27. 27 Budget per economic classification 2007/082006/07 Expenditure Economic ClassificationAdjustedFinalActual as % of final Budget FinalActual Budget ExpenditureVariance Budgetexpenditure R'000 % Current payments Compensation of employees1 120 930 1 079 72341 20796.3881 007710 684 Goods and services3 288 608 3 360 993-72 385102.23 009 7482 944 881 Transfers and subsidies------- Provinces and municipalities106 115-9108.5321490 Departmental agencies and accounts ----- Non-profit institutions-----7- Households616 1 157-541187.8365936 Payments for capital assets------- Buildings and other fixed structures ----100 Machinery and equipment104 035 107 847-3 812103.7174 77457 120 Software and other intangible assets 2 919 1 0381 88135.626 0494 962 Total4 517 214 4 550 873-33 659100.74 192 3713 819 173

28. 28 Expenditure narratives/analysis  Compensation of Employees: Budget was R1 120 930 billion; Expenditure amounted to 1 079 billion (which is 96.3%); Key management positions were filled at both Head Office and Regions however the Agency is still faced with a challenge of filling lower position particularly areas where service delivery is happening such as pay points, truck drivers, support service etc.  Goods and Services: Budget was R3 288 608 billion; Expenditure amounted to R3 360 billion (which is 102.2 %); Over spending on this line item is due to: - significant growth in terms of the beneficiaries eligible for social assistance grants. - price increase due to third party payment contractors arising from Service Level Agreement.  Payments for capital assets : Budget machinery and equipment was R104 035 million; Expenditure amounted to R107 847 million (which is 103.7 %); The over-expenditure is mainly attributed to the procurement of 40 mobile trucks to enhance service delivery and ensure that beneficiaries do not walk long distance to access the services which the Agency is rendering.

29. 29 PART FIVE Auditor-General’s Report and Comments

30. 30 Report of the Auditor-General Basis for unqualified opinion:  The financial statements and its financial performance and cash flows have been prepared, in all material respects, in accordance with the basis of accounting as set out in accounting policy note 1 and in the manner required by the PFMA; and  No significant findings have been identified as a result of the audit conducted on the performance information.

31. 31 PART SIX Challenges and Concluding Remarks on 2007/08 financial year

32. 32 Challenges  Recruitment and retention of ICT staff ;  Inadequate funding of critical ICT projects and Lack of appropriate infrastructure;  Delays in finalisation of Regulations to the Social Assistance Act;  Increasing accessibility of services: rural and semi-rural;  Finalisation of the National Contact centre;  Service Delivery Model not in place;  Finalisation of litigation cases; and  Timeous detection and prevention of fraud and error in the grants administration process.

33. 33 Concluding Remarks  SASSA has recorded significant progress during the year under review in all 9 regions as evident in the Auditor-General’s audit findings; and  There are still a number of challenges that need to be addressed regarding systems, processes and realistic resourcing of the plans.

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