Presentation to the Portfolio Committee on Social Development

1. Presentation to the Portfolio Committee on Social Development 30 March 2011

2. Purpose; Strategic overview: Mandate; Vision; Mission; Strategic objective; and Values. Reform Agenda; 2010/11-2013/14 MTEF Plan; Recommendation Outline of the presentation

3. To speak briefly to the Agency’s Performance Environment with special reference to its challenges; To indicate projects that will be embarked upon to improve Service Delivery; and To provide the Portfolio Committee on Social Development,a broad overview of the strategic plan 2010/11-2013/14. Purpose

4. Background • Over the first five years of its establishment the Agency had to strike a balance between putting an effort in establishing itself while ensuring the provision of quality service; • The Agency has maintained consistent provision of monthly income support to a significant number of South Africans while instituting measures to reduce the turnaround times for the processing of applications; • The Agency increased its reach to over 10 million beneficiaries, while the turn around time was reduced from six months to nine days (and 1 day in some areas); and • Agency also increase reach to rural communities through mobile units.

5. Mandate The mandate of the SASSA is to ensure the provision of comprehensive social security services against vulnerability and poverty within the constitutional and legislative framework. Vision A comprehensive social security service that assists people to be self-sufficient and supporting those in need. Mission To manage quality social security services, effectively and efficiently to eligible and potential beneficiaries effectively and efficiently. Strategic Overview

6. To build a high performance institution which manifests itself by compliance to good governance principles and striving towards operational excellence through continued service delivery improvements to the beneficiaries. Strategic Objective

7. Social cohesion Transparency Equity Integrity Confidentiality Customer Care- centered Approach Values

8. Situational Analysis SIGNIFICANT GROWTH AND IMPACT ON SERVICE DELIVERY • Over 8 million South Africans receive over 15 million social grants benefits depicted as follows: • 10 million are child benefits; • 2.5m are older persons; and • 1.3m are people with disabilities. • The number of grant benefits increased from 13m in 2008/09 to over 15m in 2010/1; and • The average number of transactions that the Agency deals with per annum is 4,680,675 excluding payments.

9. Situational Analysis cont.… AGSA’s FINDINGS Significant growth in number had a negative impact on administration resulting in a qualified audit opinion. The following were the reasons for the qualification: • There were more than 545 508 missing files; • There were 159 302 items of loose correspondence which still has to be placed on the files and captured on the Management Information System; • There were 209 302 files which are missing the critical documents; • There were 62 153 files which need to be transferred between regions; and • There were more than 2 million files that should be destroyed. • The nature of the Agency’s business renders it vulnerable to fraud and corruption.

10. Situational Analysis cont.… SHARING OF OFFICES WITH DSD Some regions are still sharing offices with DSD and this has implications for: • Suitable office space - staff is generally speaking, crammed in offices with negative impact on job satisfaction and quality of service delivery; • Equal sharing of running costs even though the Agency’s use of services is lesser than that of DSD; and • Investment in ICT infrastructure is affected by the uncertainty over tenure agreements.

11. Situational Analysis cont.… PAY POINT CONDITIONS • A large number of the pay points where the beneficiaries receive their cash payments do not meet the norms and standards with regard to providing humane basic facilities; • In some cases beneficiaries are exposed to security and health risks; • Most rural pay points require urgent infrastructural attention; and • Exploitation of beneficiaries by merchants and money lenders.

12. Situational Analysis cont.… THE STRATEGIC PLAN 2011/12 - 2013/14 SEEKS TO ADDRESS THE FOLLOWING KEY CHALLENGES: • Improvement in the grant administration and management system; • Automation of the grant application process; • Reduction of fraud and corruption; and • Improvement in financial management.

13. Strategic Projects Given these key challenges the Agency has identified the following as key projects to improve service delivery: • Automation and modernisation of Grant Management and Administration; • New Payment Model; • Implementation of Integrity Model (Fraud Prevention); • Implementation of Service Delivery Model ; and • Business Process Re-engineering.

14. The Reform Agenda is underpinned by the following three key priorities: Customer care - Centred Benefits Administration and Management System; Improved Organisational Capacity; and Increased access to Social Security Services. Agency’s Reform Agenda

15. Priority 1:Customer care - Centred Benefits Administration and Management System Some of the key projects identified under this priority area are: • Continued implementation of policies on social assistance; • Implementation of the Service delivery Model; • A Payment System; • Automated Core Business System; and • Improvement of pay point conditions.

16. Service Delivery Model In response to service delivery challenges the Agency has developed a Service Delivery Model designed to achieve the following: • enable the Agency to deliver improved, standardised and coordinated services, by multi-skilled staff, to its customers; • provide a baseline of operational standards on which the Agency could improve continuously, while adapting to an ever-changing environment; • provide an opportunity, as well as solutions, to achieve the strategic objectives aimed at exceeding stakeholder expectations; • ensure a more customer-focused organisation; and • bridge the gap between the current reality and the envisaged end-state.

17. Priority 2: Improved Organisational Capacity Some of the key projects identified under this priority area are: • Optimisation of the Agency’s business processes; • Implementing the integrity model; • Finalising a BPR intervention; and • Ensuring the integrity of the Agency’s Systems.

18. Priority 3: Increased Access to Social Security Services In line with government’s key priority of rural development,the Agency has to ensure that its services are also easily accessible to its rural population. The key project under this priority is Integrated Community Registration Outreach Programme (ICROP).

19. Risk Identification The following risks were taken into consideration in the Strategic Planning exercise: • Increased pressure on financial resources because of increased demand for social assistance; • Ineffective monitoring and evaluation; • Inappropriate organisational culture; • Poor strategic planning; • Inappropriate organisational design; • Lack of appropriate systems; and • Fraud and corruption.

20. The Agency’s strategic intent

21. The Agency’s strategic intent cont…

22. The Agency’s strategic intent cont… 22

23. The Agency’s strategic intent cont… 23

24. The Agency’s strategic intent cont… 24

25. 2011/12 – 2013/14 MTEF PLANBRANCH: GRANTS ADMINISTRATION 25

26. 2011/12 – 2013/14 MTEF PLAN cont…BRANCH: GRANTS ADMINISTRATION … 26

27. 2011/12 – 2013/14 MTEF PLAN cont…BRANCH: GRANTS ADMINISTRATION … 27

28. 2011/12 – 2013/14 MTEF PLAN cont…BRANCH: GRANTS ADMINISTRATION … 28

29. 2011/12 – 2013/14 MTEF PLAN cont…BRANCH: GRANTS ADMINISTRATION … 29

30. 2011/12 – 2013/14 MTEF PLAN cont…BRANCH: GRANTS ADMINISTRATION … 30

31. 2011/12 – 2013/14 MTEF PLAN cont…BRANCH: GRANTS ADMINISTRATION . 31

32. 2011/12 – 2013/14 MTEF PLAN cont…BRANCH: INTERNAL AUDIT AND RISK MANAGEMENT 32

33. 2011/12 – 2013/14 MTEF PLAN cont… BRANCH: INTERNAL AUDIT AND RISK MANAGEMENT… 33

34. 2011/12 – 2013/14 MTEF PLAN cont… BRANCH: FINANCE 34

35. 2011/12 – 2013/14 MTEF PLAN cont… BRANCH: FINANCE… 35

36. 2011/12 – 2013/14 MTEF PLAN cont… BRANCH: ICT 36

37. 2011/12 – 2013/14 MTEF PLAN cont… BRANCH: CORPORATE SERVICES 37

38. 2011/12 – 2013/14 MTEF PLAN cont… BRANCH: CORPORATE SERVICES...

39. 2011/12 – 2013/14 MTEF PLAN cont…BRANCH: STRATEGY AND BUSINESS DEVELOPMENT 39

40. 2011/12 – 2013/14 MTEF PLAN cont…BRANCH: STRATEGY AND BUSINESS DEVELOPMENT… 40

41. 2011 MTEF Strategic Financial Plan

42. Agency’s ENE aligned financial plan

43. Agency’s ENE aligned financial plan • SASSA’s budgetary constraints manifested in the accumulated budget deficit of R884 million • The budgeted surplus as shown in the table is aimed at reducing this accumulated deficit over the MTEF period • Coupled with reducing the deficit SASSA have to deal with the expanding scope of work that necessitates implementation of new projects which requires funding • The Agency’s spending over the MTEF period will have a particular focus on improving the grant application process, and implementing a new social grants payment model that will contribute towards savings in the administration budget • Baseline prioritisation was done to sufficiently fund new critical projects and align the budget with planned outputs. • Funds have been redeployed from the cash payment contractors’ fees which will see expenditure on this item declining

44. Cost containment measures • Considering the accumulated deficit and the fact that SASA has to ensure efficient and smooth service delivery to our beneficiaries, a turnaround strategy was initiated • Part of the strategy included the introduction of austerity measures which are targeted at expenditure that could be curbed without any serious repercussions or disruption of service delivery • To this end we have seen a positive decline in expenditure on items such as travel, catering etc. The allocation of budgets to these items even took into account these cost containment measures as a guiding principle and thus ensured that the budget on these items is kept to the minimum • These cost containment measures will continue as part of the strategy to achieve financial stability. We do, however, acknowledge that these cost containment measures might not be sustainable in the long run and might affect service delivery and will call for serious trade-offs when deciding on projects and the budget allocations going forward • Focus will be a combination of service delivery and on achieving and maintaining financial stability • The following slide provides an overview of the funded priorities

45. Budgeted Key Priorities

46. Budgeted key priorities/cost drivers • Cash Payment Contractors’ fees • reduced disbursement transaction fees negotiated with CPC’s results in a decrease costs for 2011/12 • the implementation of the new payment tender results in projections of further reductions for the years 2012/12 • Automation of the Grant Business • Improving the grant application process, tackling fraud and improving the application process turn-around time • Payment tender and model • The allocation for 2011/12 for planning and logistics related to the tender and in 2013/14 for planning and roll-out of model • Grant Administration • Address AG concerns in the area of grants administration and record keeping. • Caters for projects such as: • reviews support • registry management • transportation of the files

47. Budgeted key priorities/cost drivers • ICT infrastructure deployment in new offices and existing offices where required • Skills Audit and result implementation • Project will be initialized and implemented in 2011/12 • Business Process Re-Engineering • Project will be initialized in 2011/12 with full implementation in 2012/13 • Compensation of Employees • Critical, additional and current posts have been funded to ensure the acquiring of sufficient and correctly skilled human capital for improved and more efficient service delivery • Results of Business Process Engineering will be borne as part of CoE in 2013/14

48. It is recommended: That the Portfolio Committee notes the presentation; and Support the Agency in implementing the Strategic Plan Recommendations

49. THE END