Presentation to the Select
Committee on Social Services
Annual Report 2012/13
1
Purpose of the Presentation
• The purpose of this presentation is to present to the
Parliament’s Select Committee on Social Services:
– The 2012/13 Annual Report for SASSA; and
– to reflect on some key administrative challenges
facing SASSA.
2
Presentation Outline
• Overview;
• Programme Performance Information Achievements against 2012/13 Strategic Priorities;
• Budget and Expenditure for 2012/13;
• Summary of Audit Outcomes; and
• Challenges
3
Overview
Mandate
• SASSA is a Schedule 3A Public Entity that was established in
April 2006 to transform social security in South Africa.
• SASSA derives its mandate from the following Acts:
– The Constitution of the RSA, 1996 (Act No.108 of 1996);
– Social Assistance Act, 2004 (Act No.13 of 2004);
– South African Social Security Agency Act, 2004 (Act No.9
of 2004);
Vision
• “A leader in the delivery of social security services”
Mission
To administer quality customer-centric social security services to
eligible and potential beneficiaries.
SASSA’s Slogan
Paying the right social grant, to the right person,
at the right time and place. NJALO!
Key priorities for 2012/13
• To deliver quality social security services focusing on
the following:
– Excellent customer care;
– The automation of systems;
– Improving organisational capacity; and
– Promoting good governance.
7
Strategic Objectives
• Strategic Objectives for SASSA for the reporting period
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 SASSA is optimally capacitated for
optimal service delivery.
8
Agency Service Delivery Network
Head Office (1)
Regions
KZN
NW
EC
WC
GP
MP
LIMP
NC
FS
National
Regional Offices
1
1
1
1
1
1
1
1
1
9
District Offices
4
4
7
5
5
4
5
5
5
44
Local Offices
75
26
62
16
38
33
45
26
14
335
Service Points
4
23
217
242
40
81
73
112
110
902
2781
734
3020
297
123
296
2120
363
203
9937
Pay-points
9
Background
• During the period under review SASSA continued on its path of
improving the lives of the poor and vulnerable.
• At the end of the financial year, a total of 16 106 110 grants were in
payment
• The re-registration project is the flagship and largest project that
SASSA embarked on with a massive communication strategy during
this financial year
• A decision was taken to slow down on some of the planned targets in
SASSA such as the reviews and to concentrate the available
resources on re-registration, and as a result SASSA achieved 69% of
its annual targets
• Implementation of the new payment tender.
10
PERFORMANCE INFORMATION
Performance against the 2012/13 Priorities
11
Implementation of the Social
Assistance Programme
Objective
• Improve the reach to qualifying/eligible social assistance
beneficiaries
Planned
Activities
• Target is to reach at least 1.2m new beneficiaries; and
• Increase the number of grants in payment from 15 595 705 to 16
069 007
Achieved
• 1 280 818 new applications were processed
• 16 106 110 social assistance benefits are in payment
 11 994 415 are children’s grants;
 2 873 197 are older person’s grants;
 1 164 192 are people with disabilities grants;
 587 are war veteran grants; and
 73 719 are grant-in aid recipients
• More than 863 689 grants were lapsed due to death, voluntary
cancellations, re-registration and reviews.
Social Grants Trends
Number of grant benefits and percentage growth over a five year period by grant
type
Grant
type/Period
Old Age
2007/08
2008/09
2009/10
2010/11
2011/12
2012/13
2 229 550
2 390 543
2 546 657
2 678 554
2 750 857
2 873 197
1 924
1 500
1 216
958
753
587
1 408 456
1 286 883
1 264 477
1 200 898
1 198 131
1 164 192
Grant in Aid
37 343
46 069
53 237
58 413
66 493
73 719
Foster Child
454 199
474 759
510 760
512 874
536 747
532 159
Care
Dependency
Child Support
102 292
107 065
110 731
112 185
114 993
120 268
8 189 975
8 765 354
9 570 287 10 371 950 10 927 731
11 341 988
12 423 739
13 072 173
14 057 365 14 935 832 15 595 705
16 106 110
War Veteran
Disability
Total
Annual Growth
5.20%
7.50%
6.20%
4.42%
3.27%
13
Number of grant benefits by grant type and region
as at 31 March 2013
Region/
Grant
type
EC
FS
GP
KZN
LIM
MPU
NW
NC
WC
Total
OAG
WVG DG
GIA
FCG
CDG
CSG
Total
509 612
76
185 541
9 545
18 429 117 231
1 843 684
2 684 118
172 103
8
86 310
1 199
5 864
41 317
637 075
943 876
424 892
147
123 247
1 655
15 783
58 722
1 581 756
2 206 202
590 959
86
311 402
29 190
36 012 135 442
2 746 888
3 849 979
395 264
47
89 155
11 321
11 913
58 953
1 588 489
2 155 142
227 239
27
80 824
2 883
8 652
35 359
1 051 626
1 406 610
217 274
19
85 867
4 092
8 339
42 215
751 195
1 109 001
74 919
17
50 012
4 214
4 485
14 342
277 835
425 824
260 935
160
151 834
9 620
10 791
28 578
863 440
1 325 358
2 873 197
587
1 164 192
73 719 120 268 532 159 11 341 988 16 106 110
Social Grants Trends analysis
• Overall, grant benefits uptake increased by 3.27% between 2011/12 and
2012/2013.
• There was an increase in all but three grant types, i,.e., War Veteran
Grants , Disability Grants and Foster Child Grants due to attrition rates and
effective reviews.
• At 4.45%, Old Age Grant has shown a more than normal growth rate of
2% year-on-year. This is due to the increase in the threshold criteria for
the means test, which resulted in many beneficiaries coming into the
system.
• The number of Disability Grants decreased due to improved management
of temporary disability and more stringent screening and assessment of
permanent disability
• Grant-in-Aid has increased due to improved awareness campaigns
16
Improvements in the Grants
Application process
Standardisation of business processes at all local offices and
service points.
• Improvement in the turnaround times to process social grants
applications: The target for the processing of new social grant
applications was to have 90% processed within 21 days.
– 91% (1.167m) of all new applications were processed within 21 days.
• The year under review focus was on full implementation of the
standardised 4-step process for social grant applications
– Full standardisation has been implemented in all local offices, except in
three offices, which are still undergoing renovations as part of the Local
Office Improvement Project.
17
Local Office & Service Points
Improvements
Objective Improve the conditions under which we serve the beneficiaries and to
ensure that all customers experiences the same business processes.
Planned
Target
Physical infrastructure improvement and standardisation. The target is
to have 72 local offices and 400 pay-points upgraded to suit the new
standardised application process
Achieved
• A total of ninety-five (95) local offices were improved, which is
twenty three (23) more than the annual target. This brings the
number of upgraded offices to 259 since the 2011.
• In the period under review, 692 pay points were upgraded at a cost
of R18 776 416. SASSA surpassed its target by 292.
• The improvements implemented included procurement of shelters
such as tents, ablution facilities, upgrading and/or repairs of existing
structures, provision of chairs as well as construction of facilities for
the disabled and frail, such as ramps and toilets.
Improvements in the Payment
process
Re-registration
• The re-registration project is the largest data integrity and
beneficiary authentication project ever to be embarked upon.
• The overall objective was to re-register 22 million beneficiaries,
recipients and procurators.
• The project entailed the mass collection of data of existing and
new beneficiaries, children receiving grants and procurators.
Information collected include 10 fingerprints, voice biometrics
and documentation to allow for FICA registration
• A total of 18.9 million people were successfully re-registered
onto the new system by end of financial year. The number has
since increased to 20.7m.
19
Improvements in the Payment
process
Re-registration
• This resulted in
– Life certification of all beneficiaries, children and procurators
– By end of financial year, SASSA has received requests for
voluntary cancellation of over 150 000 social grants, leading
to a saving of R150 million per annum. The number has
since increased to 299 837
– In the implementation of the project on re-registration 8000
jobs were created for unemployed youth. 3 000 of whom
were placed in permanent positions
20
Improvements in the Payment
process
• New payment contract with CPS commenced on the 01 April
2012
• The payment of social grants took place from the first day of the
contract with minimal interruptions.
• A SASSA biometric payment card has been issued to more
than 10 million social grants recipients.
• Currently SASSA is paying approximately 16 million social
grant benefits monthly to approximately 9.5 million recipients on
the 1st of every month.
21
Improvements in the Payment
process
• Beneficiaries now have the option to use the SASSA card to
access their grants using several payment gateways.
Channels
Average usage of payment channels per
month
Pay points
26%
Retail POS
36%
ATM
38%
22
Benefits of the Current
Payment System
• Introduction of the current payment system has broad positive benefits to both
SASSA and beneficiaries, and to a large extent the South African Economy.
– Improvement in the Beneficiary Experience
• the current payment system has absorbed the previously unbanked
beneficiaries and incorporated them into the banking community.
• beneficiaries have also used the increased payment channels to access their
social grants within 7 calendar days of the month.
– Cost Saving: significantly reduced the costs for transacting (From average
of R30 to R16.44 per transaction)
– Improved Data Management : SASSA, through this system, for the first
time has automated intelligence on all payment activities.
– Fraud Management: The biometric system allows for monthly
authentication of recipients of grants thus ensuring that the right person is
receiving the grants.
23
Integrated Community Regisration
Outreach Programme (ICROP)
• ICROP was established to improve access to and equity in services to
beneficiaries in rural and semi-rural areas;
• The success of ICROP can be attributed to partnerships with key
stakeholders, such as government departments, non-governmental
organisations, faith-based organisations, traditional leaders and ward
councillors;
• ICROP targeted 40 poverty wards for the provision of social assistance.
The target was met and surpassed as 390 poverty wards benefitted
through special ICROP requests; and
• A total of 61 110 beneficiaries in 430 wards had access to social
assistance through ICROP. The target of 60 000 beneficiaries for the
period under review was therefore exceeded.
24
Automation
• SASSA seeks to achieve a fully automated system through a
fully secured, integrated and automated end-to-end system in
order to improve the administration of the social assistance
programme by 2016.
• In line with this, SASSA established a baseline of SASSA’s
as-is environment and developed an ICT vision for the future
that supports the strategic objectives of SASSA through the
Enterprise Architecture project.
• The strategic architecture, known as the Digital Beneficiary
Services Platform (DBSP), was developed.
Fraud Management
• SASSA continued to implement its zero tolerance approach to
fraud and corruption.
• The target was to investigate 50% of fraud cases identified.
– 78% percent of fraud cases were investigated (i.e., 4 000 out
of 5 134)
– 98% of suspicious grants were verified for validity (i.e., 26 774
out of 29 780 suspicious social grants were verified for validity)
• The focus of SASSA has shifted from beneficiaries to its own staff
members who collude with beneficiaries and other organs of
State, including crime syndicates to defraud the system.
26
Fraud Management cont…
• Efforts to clamp down on corruption in specific regions, resulted:
– arrests and convictions
• 10 current Agency officials;
• 3 former Agency officials; and
• 15 agents/touts.
– Suspensions, dismissals and resignations of SASSA official
• 52 of SASSA’s officials were suspended from duty;
• 25 dismissed; and
• 7 resigned prior to the completion of their disciplinary cases.
27
Fraud Management cont…
• The monetary value related to cases finalised amount to
R59.4 million.
• Other successes include the arrest of 50 individuals in the
Mahlabathini area within the Ulundi District, who were found
to be in possession of 127 unregistered SASSA cards, 3 CPS
registration machines and R47 000 in cash. Five of these
suspects remain in custody.
• Money lending also became a focus of the multidisciplinary
Agency approach. Successful operations include a total of 29
individuals arrested and 1 008 Agency cards and R 82 156.00
cash confiscated.
28
Implementation of the Legal
Services Model
• The legal risks that SASSA is exposed to in its day-to-day
operations – have been mitigated to a great extent.
• The total number of litigation cases decreased from 249 in
2011/12 to 89 in 2012/13.
• The total amount of litigation costs (liability) as at the 2012/13
financial year is R10 683 420.74.
• This amount includes the amount for the costs incurred in
respect of the matters which were dealt with in the previous
financial years; however, the bills for the costs were only
submitted during the current financial year.
29
Implementation of the Legal
Services Model
2011/12
2012/2013
Office
Head Office (HO)
Eastern Cape (EC)
Free State (FS)
Gauteng (GP)
KwaZulu-Natal (KZN)
Limpopo (LP)
Mpumalanga (MP)
Northern Cape (NC)
North West (NW)
Western Cape (WC)
TOTAL
No of Cases
11
125
1
73
3
1
3
5
27
Cost (R)
3 341 699.34
1 200 000.00
80 474.44
0.00
488 426.42
32 927.52
659 869.87
61 000.00
226 381.36
543 433.96
249
6 634 212.91
No of Cases
2
68
1
2
7
0
1
1
5
2
Cost (R)
3 198 927.59
3 658 225.00
0.00
61 560.00
1 450 272.87
29 509.92
53 869.52
111 093.35
2 079 084.11
40 878.38
89 10 683 420.74
30
Organisational Capacity
• One of SASSA’s priorities for the year under review was to improve its
organisational capacity, particularly at service delivery.
– To this end, a total of 931 positions were filled to augment the capacity,
especially in the core business.
– This increased the staff complement to 8 496 permanent staff members
and 530 contract staff.
• To ensure the welfare of its workforce, SASSA continued to implement
various programmes as part of its Employee Wellness Programme.
– 59 Wellness Champions were trained to ensure effective implementation
of the Programme
– Psychological support was provided to employees, including those
affected and infected by human immunodeficiency virus (HIV) and
acquired immune deficiency syndrome (AIDS).
31
Budget and Expenditure for 2012/13 (Financials)
Overview of the budget
• The spending and strategic focus of the South African Social Security Agency
remains the administration and payment of social grants
• A significant achievement was achieved in turning around SASSA’s financial
position whereby an accumulated overdraft of R839.4 million was dealt with.
Cost containment measures played a key part of the intervention.
• The majority of the budget (34%) was on compensation of employees and the
cash handling fees. These two items accounts for 34 % and 32% of the budget
respectively. The balance caters for other essential operational expenses such
as office accommodation, cleaning, security, travel, communication, etc.
• The 2012/13 budget was adjusted (reduced) from R6,200,270 billion to
R6,119,770 billion by an amount of R80,500 million during the adjustment
budget process
33
Overview of the budget cont.
2010/11
2011/12
R'000
Baseline Allocation
Adjustment (savings)
Total
Y/Y growth
2012/13
R'000
5 631 387
5 631 387
-
R'000
6 143 657
-
6 200 270
-80 500
6 143 657
6 119 770
9%
0%
34
2012/13 Audited financial outcome
Economic Classification
Budget Amount Expenditure Surplus/Defict Spent
R'000
R'000
R'000
%
Compensation of employees
2 082 597
2 068 437
14 160 99%
Goods and services of which:
3 797 892
3 554 650
243 242 94%
Payment Contractor Fees
1 947 078
1 935 842
11 236 99%
Other Goods & Services
1 850 814
1 618 809
232 005 87%
Transfers and subsidies
22 630
19 268
3 362 85%
Capital expenditure
216 651
65 737
150 914 30%
Total
6 119 770
5 777 307
342 463 94%
35
Commentary on spending
trends
• Compensation of employees
• Some of the vacant funded posts remained unfilled at the regions and
head office while some where in the process of being filled at financial
year-end, contributing to an under spending on this item.
• Goods and Services
• The expenditure trend on this item is influenced by the following key items:
– Communication: Expenditure reached 101% of the budget allocation
due to the communication drive related to the mass beneficiary reregistration project. The project had a significant impact on the budget.
– Computer Services: Spending reached 76%. The under spending is
due to the delayed Biometrics system project and the less than
anticipated expenditure on Grants Business Automation project.
36
Commentary on spending
trends
– Cash Handling Fees: The majority of the overall saving was realised on this
item as a result of the reduced tariff on cash handling fees and reduced
transactions in the disbursement of grant monies as a result of the new
payment contract.
– Lease payments: Expenditure reached 108%, however the are regions that
realised a saving due to the buildings that were budgeted for and were not
occupied by financial year-end due to the lengthy DPW process.
– Property payments: Spending reached 100% and is in line with the projected
spending for the period.
– CAPEX – Funds (R140m) were shifted to this item for the purpose of
purchasing motor vehicles. However due to issues with the contract the
purchase delayed until financial year-end leading to under spending on the
item.
37
Auditor-General Report and Comments
Auditor General Report and
Comments
• AGSA’s opinion – Unqualified Audit.
• The AG found that:
– SASSA’s financial statements present fairly the financial
position of SASSA as at 31 March 2013
– SASSA’s financial performance and cash flows for the
year were in accordance with SA Standards of GRAP and
the requirements of the PFMA and the South African
Social Security Agency Act, 2004
39
Auditor General Report and
Comments
• Emphasis of matter: Pending Litigation Case
– SASSA was involved in a litigation with ALLPAY regarding the
awarding of the Social Grant Payment Tender to Cash Paymaster
Services.
– Subsequent to the Supreme Court of Appeal delivering judgement in
the ALLPAY//SASSA and CPS matter in favour of SASSA, ALLPAY
has filed an application for leave to appeal at the Constitutional Court
• Latest update: The Constitutional Court declared the award
of the tender to CPS constitutionally invalid; however it
suspended the declaration of invalidity pending determination
of a just and equitable remedy (hearing will on the 11
February 2014).
40
CHALLENGES
Challenges
• Payment Tender pending court case
• Complaints regarding on-going deductions on the
SASSA Card
• In the implementation of fraud Management strategy,
SASSA was had to close-out some offices due to the
number of officials that were implicated in fraudulent
activities
42
Recommendations
• It is recommended that the Select Committee on
Social Services note and support
– SASSA 2012/13 Annual Performance Report
– SASSA financial statements for 2012/13 ; and
– Challenges that SASSA is facing
43
Thank you
44