1. Presentation to the Select Committee on Social Services Annual Report 2014/15

2. Purpose of the Presentation To present to the Select Committee on Social Services the SASSA 2014/15 Annual Report; focusing on: –Performance Information; –Budget and Expenditure 2014/15; and –Audit outcomes. 2

3. Presentation Outline Overview Programme Performance Information - Achievements against 2014/15 Strategic Priorities Budget and Expenditure for 2014/15 Summary of Audit Outcomes; and Challenges 3

4. Overview 4

5. VISION “A leader in the delivery of social security services” MISSION To administer social security services to eligible children, older persons and people with disabilities. SASSA’s Slogan Paying the right social grant, to the right person, at the right time and place. NJALO! 5

6. STRATEGIC OUTCOME ORIENTED GOAL OF SASSA STRATEGIC OUTCOME ORIENTED GOAL Expand access to social assistance and creating a platform for future payment of social security benefits. GOAL STATEMENT To render social assistance to eligible beneficiaries 6

7. Key priorities for 2014/15 - 2018/19 The primary focus of SASSA in the 2014/15 – 2018/19 MTSF period is: –Reducing income poverty by providing social assistance to eligible individuals –Improving service delivery –Improving internal efficiency –Institutionalising social grants payment system within SASSA 7

8. Strategic Objectives SASSA’s Strategic Objectives for the period under review were: –to ensure that eligible beneficiaries receive benefits due to them; –to improve the quality of service delivery to our customers; –to achieve a fully integrated and automated social assistance service; and –to ensure that the Agency is optimally capacitated for optimal service delivery. 8

9. Performance against the 2014/15 Priorities PERFORMANCE INFORMATION 9

10. Implementation of the Social Assistance Programme ObjectiveTo provide social assistance to qualifying/eligible beneficiaries Planned Targets Target is to reach at least 1.1m new beneficiaries p.a AchievedTotal annual progress achieved : The total number of applications processed from April 2014 to March 2015 was 1 379 253 (125% of the annual target); 1 373 768 (99.6%) were processed within 21 days 1 302 745 (94.5%) were approved; 70 557 (5.1%) were rejected; and 5 951 (0.4%) were outstanding. 10

11. Applications processed per Region 11 RegionTotal processedApprovedRejectedOutstandingTotal EC 201 928 193 288 8 640 5 973 207 901 FS 65 291 61 636 3 655 7 372 72 663 GP 227 734 215 584 12 150 6 360 234 094 KZN 314 619 294 234 20 385 4 604 319 223 LP 183 307 176 900 6 407 7 785 191 092 MP 109 647 104 214 5 433 8 706 118 353 NC 41 575 38 729 2 846 2 007 43 582 NW 101 696 94 173 7 523 6 052 107 748 WC 134 505 123 987 10 518 10 189 144 694 Total 1 380 302 1 302 745 77 557 59 048 1 439 350 Total number of social grants applications by region for 2014/15 financial year

12. Implementation of Social Assistance Programme 12 ObjectiveTo provide social assistance to qualifying/eligible beneficiaries. Planned Target To increase the number of grants in payment from 15 932 473 to 16 052 000 by the end of 2014/15. Achieved16 642 643 social assistance benefits were in payment as at end of financial year 12 329 716 are children’s grants; 3 200 264 are older person’s grants (OAG, WVG, GIA); 1 112 663 disability grants; There was a 4.46% increase in the growth of social grants Lapsed Grants: A total of 1 299 499 social grants lapsed between April 2014 to March 2015.

13. Social Assistance Benefits by Regions Number of grant benefits by grant type and region as at 31 March 2015 13 RegionOAGWVGDGGIACDGFCGCSGTotal % of total EC528 29147182 47916 39119 165115 8491 856 2502 718 47216.30% FS182 314575 5262 0956 38537 985656 464960 7745.80% GP482 16889106 0152 98916 17053 4111 657 0612 317 90313.90% KZN631 71338284 57439 33336 471118 5052 775 4813 886 11523.40% LP430 3682193 42821 22813 26657 6941 699 4942 315 49913.90% MP226 6251478 4875 1549 57234 2601 034 9421 389 0548.30% NW233 5471185 5177 2178 94037 984797 2891 170 5057.00% NC79 080950 7876 5874 78714 513290 497446 2602.70% WC292 74592155 85012 09312 02129 573935 6871 438 0618.60% Total3 086 8513261 112 663113 087126 777499 77411 703 16516 642 643100% % total18.55%0.00%6.69%0.68%0.76%3.00%70.32%100%

14. Implementation of the Social Assistance Programme ObjectiveProvide Social Relief of Distress to families experiencing hardship and thus require immediate interventions. Planned Targets 160 000 SRD applications will be processed per annum over the next three years. Achieved353 678 SRD applications were awarded against the annual target of 160 000, which represents 121% over achievement. Cash – 11 231 Food parcels – 186 067 Vouchers – 146 225 Other – 10 155 Total Expenditure stands at R461million. Additional budget was allocated to this programme due to increased demand emanating from disasters, increase in numbers of children with malnutrition and others forms of distress 14

15. SRD PER REGION 15 Region Benefit Type Total CashFood ParcelsVoucherOther EC 1 86481 402872 135 85 488 FS 85110 2526 326861 18 290 GP 50922 17744 863871 68 420 KZN 5163 04635 285206 39 053 LP 2012 93910 33222 23 313 MP 31914 88317 3183 263 35 783 NC 3216 55812 9472 387 31 924 NW 2 87910 45215 497126 28 954 WC 4 24114 3583 570284 22 453 Total 11 231186 067146 22510 155353 678 Total Number of Social Relief of Distress disbursed in 2014/15 financial year

16. Implementation of the Social Assistance Programme Objective Reduction of inclusion and exclusion errors in the social assistance programme Planned Activities To reach 70% of the children age between 0-1 who are eligible for CSG. AchievedTotal number of childrens’ grants (0-1) in payment was 597 459. This represents 51% of the children in this age category. There was an increase of 138 632 from the 2013/14 financial year as a result of the ICROP programme. The breakdown of children’s grants in payment for 0-1 are: CSG 596,920; CDG 324; FCG 215. 16

17. Service Delivery Improvement ObjectiveImproving conditions under which beneficiaries are served Annual Targets Reduce the turnaround time for processing grants to an average of 21 days AchievedTurnaround time for processing of grants applications is on average 21 days. 99.68% (1 373 768 out 1 379 350) applications were processed within 21 days. A significant number of this applications were processed within 1 day. 0.32% of the applications were processed after 21 days (mainly disability grants). 17

18. Improvement of Service Delivery ObjectiveTaking service delivery to the people Planned Target ICROP/ Mikondzo: Target was to conduct 420 outreach programmes inclusive of Mikondzo Achieved714 outreach programmes inclusive of Mikondzo were conducted and services were provided. This represents a 70% over achievement against the annual target as SASSA was targeting exclusion per UNICEF Report. 18

19. Improvement of Service Delivery – ICROP Programmes per Region 19 RegionNumber of outreach programmes implemented EC63 FS75 GP37 KZN97 LIMP63 MPU40 NC158 NW31 WC150 TOTAL714

20. Payment System ObjectiveImprovement in the Payment of Social Grants Planned Targets Implementation of the Payment Tender AchievedThe payment tender was processed in line with the Constitutional Court ruling. There were further court challenges during the implementation process, which led to an amendment of the revised RFP and extension of the bid deadline. 20

21. Payment System ObjectiveImprovement in the Payment of Social Grants Planned Targets Planning for SASSA is to take total responsibility for the payment of social grants in 2017/18. AchievedMinisterial Advisory Committee report recommended the insourcing of the payment system in SASSA. Feasibility report on the technology solutions required for insourcing has been completed. Situation analysis of the payment process focusing on broader SASSA CPS arrangement and the extent to which it fits in the SA payments sector. Workstreams have been proposed to facilitate implementation of the recommendations by the Advisory Committee. 21

22. Improved Administration: Automation Planned Targets Improvement of ICT Infrastructure Achieved98% of local offices are equipped with computers, printers and network connectivity to speed up processing of social grants. A strategic Architecture and ICT 5 year road map was developed. The road-map provides an integrated secure end-to-end solution, enable automation of business services and provide optimal on-going support to the organisation. The SOCPEN system was continuously enhanced to improve the effectiveness and efficiency of the administration of social assistance. A Business Intelligence solution was procured to enhance the management of information and reporting within SASSA. During the period under review SASSA has initiated the process for the automation of its records management. 22

23. Improved Fraud management Planned Targets 60% of reported fraud and corruption cases investigated AchievedOut of 1 328 reported fraud and corruption cases received, 950 were investigated which represents 72% achievement against the annual target of 60%. The focal areas were grant administration, information and communication technology and supply chain management. A total of 266 officials were suspended and 53 dismissed as at 31 March 2015. 23

24. Fraud and corruption Cases by Region including HO 24 OfficeTotal reported fraud cases FinalisedSuspensionsFraud and corruption related Dismissals Eastern Cape141119662 Free State10271144 Gauteng304250194 KwaZulu Natal358141637 Limpopo8279113 Mpumalanga85732312 North West3322154 Northern Cape19151311 Western Cape198178366 Head Office6260 Total 132895026653

25. Improved Fraud management (cont…) Planned Targets 60% of reported fraud and corruption cases investigated AchievedLaw enforcement agencies referrals and arrests 11 cases were referred to Law Enforcement Agencies and 5 officials were convicted 94 money-lending cases were reported, implicating 64 suspects who were in possession of 350 SASSA cards and R586 486 in cash. 16 private persons including three CPS officials with 280 SASSA cards were apprehended. A speed-point machine and a laptop (linked to 2 separate robbery incidents at the SASSA offices in KZN) were recovered. 13 private persons turned state witness. Convictions 2 CPS officials were sentenced to 15 years each, 1 out fined R8 000 (R2 000 paid and R6 000 suspended for 5 years), while 1 CPS official is still on trial. 3 SASSA officials were arrested and dismissed, their case is still under investigation for having created 55 ghost beneficiaries, amounting to R752 460.00. 25

26. Implementation of the Legal Services Model A total of 143 litigation cases handled. These include grant related litigation, labour disputes, contractual claims, motor vehicle accidents and procurement related matters 26 OFFICE2013/20142014/2015Total Difference NumberR ValueNumberR ValueNumberR Value SASSA: HO1 3 398 096.09 10 1 356 480.139 -2 041 615.96 Eastern Cape43 2 485 513.42 57 2 171 138.2414 -314 375.18 Free State1 18 582.39 0 31 208.15 12 625.76 Gauteng1 22 7 439.41 1 273 536.790 46 097.38 KwaZulu-Natal121 381 155.0672224 834.7660-1 156320.3 Limpopo1 22 430.00 0 0.00 -22 430.00 Mpumalanga0 0.00 2 2 Northern Cape0 0.00 0 0 North West2 20 517.57 0 397 451.11-2 376 933.54 Western Cape1 131 850.31 1 315 374.240 183 523.93 Total62 7 685 584.25 143 4 770 023.42 81 -2 915560.83

27. Improved Human Resources Management ObjectiveEffective Human Resource Management Planned TargetsReduction of funded vacant posts AchievedA total of 10 742 posts were filled as at the end of the period under review. 1 953 Appointments 315 new appointments 471 contract appointments 1 055 EPWP workers and 112 interns were appointed  Of these appointments 356 were internal promotions 1.1% (117 out of a target of 215) people with disabilities are employed within the agency 27

28. Human Resource Management SASSA further experienced the following challenges affecting key positions during the period under review: The Regional Executive Manager of the Northern Cape region retired in March 2015. The Regional Executive Manager of Limpopo was transferred to the Gauteng region in April 2014. This was necessary to ensure the stability of the Gauteng region as it is one of SASSA’s biggest regions. At the end of the financial year, the Agency was in the process of filling the following key positions: The CFO, CIO, and REM (LP and NC) As at 01 April 2015 the agency had 650 vacant funded posts with an estimated salary bill of R 213 million. 28

29. Improved Human Resources Management ObjectiveEffective Human Resource Management Planned Targets100 % labour relations cases initiated within prescribed times AchievedA total of 445 labour relations cases were initiated within prescribed times Outcomes: 195 verbal warning 100 written warning 90 final written warning 60 Dismissals 29

30. Improved Financial Management ObjectiveEffective Financial Management Planned Targets 100% of suppliers paid within 30 days 50% Reduction in irregular expenditure Achieved82 % (5 137 out of 6 216) suppliers were paid within 30 days 42% reduction in irregular expenditure 30

31. Improved Financial Management ObjectiveEffective Financial Management Planned Targets 10% of social assistance debts recovered Achieved12.65% (R32.5m out of R257m) of social assistance debt recovered and/or written off. R26m write off R5.7m debt recovery 11% (R272 756) of ex-staff debt was recovered out of a target of 50% (R1.1 m). 31

32. 2014/15 AUDITED FINANCIAL OUTCOMES FINANCIAL INFORMATION 32

33. 33

34. Expenditure per economic classification 34

35. 35

36. Notes to the level of spending Compensation of employees –A number of vacant funded posts were not filled at financial year-end that resulted in 4% underspending that included time delayed savings in filling of posts. –These include senior management posts such as the posts of Chief Financial Officer, Chief Information Officer, Regional Executive Manager: Limpopo and NC etc. –Some of the posts were at various stages of the recruitment process. As at 01 April 2015 the agency had 650 vacant funded posts with an estimated salary bill of R 213 million. Goods and services: The under spending was mainly on: –Communication due to the telephone management system efficiencies –Cash handling fees due to the reduced cost of disbursing grant monies –Leases due to offices that were in the process of being occupied –Travel and subsistence due to spin-offs from cost containment measures

37. 37

38. Expenditure per programme 38

39. 39 Over expenditure mainly due to procurement of fleet and the Local Office Improvement & Pay Point Development projects that were funded from approved retained cash surplus.

40. Auditor-General Report and Comments

41. Auditor General Report and Comments AGSA’s opinion – Unqualified Audit. The AG found that: –SASSA’s financial statements present fairly the financial position of the Agency as at 31 March 2015 except for few adjusted misstatements – SASSA’s financial performance and cash flows for the year were in accordance with SA Standards of GRAP, PFMA and SASSA Act requirements Predetermined objectives –Reliability of information: The has been significant improvement on the report on predetermined objectives concerning the usefulness and reliability of the information. 41

42. Other audit matters Misstatements in terms of operating leases commitments disclosed Shortcomings identified with the reimbursement of costs (R316 million) incurred towards Cash Paymaster Services in respect of additional resources procured for the re-registration project. Poor turnaround time to finalize financial or possible financial misconduct cases 42

43. CHALLENGES

44. Challenges Mitigation Unauthorised DeductionsShort term: Beneficiary Support Plan & Dispute Resolution Mechanism Long Term: New Tender prohibits any form of deduction other than Regulation 26 (A) Impact of Load Shedding on connectivity of Systems All SASSA offices have been instructed to purchase generators SRD – high demand resulting in high budget pressures Short term reduced the value of the SRD; utilising savings from other low spending grants Long term Motivated for additional allocation Ongoing court challenge – Payment Tender The process will be finalised by the 15 October 2015 44

45. Recommendations It is recommended that the Select Committee on Social Services note and support –SASSA 2014/15 Annual Performance Report; –SASSA financial statements for 2014/15; and –Challenges and the mitigation strategies that the Agency is implementing. 45

46. 46 Thank you 46