PRESENTATION ON THE ACTION PLAN OF THE COMPENSATION FUND

PRESENTATION ON THE ACTION PLAN OF THE COMPENSATION FUND PRESENTATION PREPARED FOR THE PORTFOLIO COMMITTEE ON LABOUR 30.06– 01.07 2016

CONTENTS • BACKGROUND • OBJECTIVES OF THE ACTION PLAN • PILLARS OF THE ACTION PLAN • SUMMARY PROGRESS • PROGRESS REPORT ON ACTION PLAN • HIGHLIGHTS OF ACTIVITIES • PROGRESS ON CLAIMS PROCESSING

BACKGROUND • The Compensation Fund (the Fund) has been receiving negative spotlight from media and other key stakeholders due to its service delivery record. • In order to restore its reputation and improve the service delivery record, the Fund has developed an Action Plan which will serve as a blue print for the service delivery improvement initiatives • Action Plan was developed by management of the Fund in June 2015 and implementation started on 01 July 2015 • The Action Plan was submitted to the Standing Committee on Public Accounts as resolved during the appearance of the Fund at the committee in June 2015 • The Action Plan is not a replacement for the current Strategic Plan and Annual Performance Plan of the Fund but will enhance the pursuit of the objectives as outlined in these documents.

OBJECTIVES OF THE ACTION PLAN The main objectives of the Action Plan are to put in place basics that will assist in : • Improving the service delivery performance in the Fund • Increasing the efficiency of the Fund‘s overall administration, financial management and operations • Restoring the reputation of the Fund

PILLARS OF THE ACTION PLAN

Summary Progress

PROGRESS – Financial Administration Financial Administration

PROGRESS – Customer Focus and Service Delivery Improvement Customer Focus and Service Delivery Improvement

PROGRESS – Internal Business Process /Administration Internal Business Processes

PROGRESS – Internal Business Process/Administration Internal Business Processes/Administration

PROGRESS – People Management People Management

HIGHLIGHTS OF ACTIVITIES ACTION PLAN – COMPENSATION FUND TURNAROUND (cont…) • Internal controls improved with the introduction of 20 new policies to address a number of areas that have been the cause of non compliance to the PFMA and its Regulations • All infrastructure solutions that were recommended by an independent assessor for the effective implementation of uMehluko were implemented by end of December 2015 and payments have since improved. • A total of R211 million has been credited back to employer accounts in discount that have been due since 2012 . • A system enhancement process to correct the interest and penalties since 2011 has been completed and the users are signing off. Configuration/development commenced in March 2016 and is due for completion in September 2016.

HIGHLIGHTS OF ACTIVITIES Jun‘16 Jul‘16 Aug‘16 Sep‘16 Apr‘16 May‘16 Nov‘15 Dec‘15 Jan‘16 Feb‘16 Mar‘16 Oct‘15 Enhancements on the system to cater for refunds Enhancements (key-offs and batch processing) of debt management system Enhance the Finance system for calculation of interest and penalty Correction of allowance for impairment on corrected debt System enhancement to process contribution per line item instead of a batch and apply key-off Implement algorithm checks for the Fund’s deposits System enhancement to integrate uMehluko and SAP FI Legend: Stabilise Reporting Platform Project went Live Successfully Project is in progress, no issues found Project behind schedule Project is progressing well no issues Project behind schedule

HIGHLIGHTS OF ACTIVITIES ACTION PLAN – COMPENSATION FUND TURNAROUND (cont…) • Revised Assessment Model for the Fund has been submitted for Socio Economic Impact Study and consultations at NEDLAC will commence in September 2016 • Capacity in the Financial Management Unit has been increased with the appointment of key personnel in Financial Reporting, Revenue Management and Internal Control • There are on-going interactions with key Medical Service Providers and industry bodies that represent our clients to address concerns and bottlenecks. This has yielded positiv results in the operations of the Fund • There are various enhancements of the uMehluko system that have assisted with the faster processing of claims and more enhancements are planned and on-going

HIGHLIGHTS OF ACTIVITIES ACTION PLAN – COMPENSATION FUND TURNAROUND (cont…) • The development of a programme for the dispensing of chronic medication to COIDA clients has been completed and will be implemented from September 2016. COIDA patients will have chronic medication delivered at home and in some cases within close proximity of their residential areas. • A Panel to deal with Post Traumatic Stress Disorder claims has been appointed and has already commenced with the work on backlog claims • The Fund has absorbed the 90 interns appointed during 2015 as part of the measures to improve the rate at which the benefits are processed and paid. This has resulted in the elimination of backlogs on uMehluko. The team is now working claims received prior to 2014.

HIGHLIGHTS OF ACTIVITIES ACTION PLAN – COMPENSATION FUND TURNAROUND (cont…) • A new functional structure which focuses the business of the Compensation Fund into three functional units (Compensation Benefits, Registrations & Pensions, Medical Services as well as Orthotic, Prosthetic and Rehabilitation Services) has been developed is undergoing approval processes before implementation. • The Skills Audit and Change Management Projects have been completed and the Fund is in the process of implementing the recommendations • Human Resources intervention to deal with the unintended consequences of the decentralisation process have been implemented to improve the organisational climate and improve work ethic

PROGRESS ON CLAIMS PROCESSING • The Fund has started to make a significant progress with regards to the processing of claims

PROGRESS ON CLAIMS PROCESSING

Thank You… 24

PRESENTATION ON THE ACTION PLAN OF THE COMPENSATION FUND

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