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Strategic Plan 2010/11 – 2012/13 Presentation to the Portfolio Committee

for Social Development

9 March 2010

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Outline of the presentation Purpose Introduction Strategic overview

Mandate; Vision; Mission; Strategic objective; and Values.

Service delivery environment; Organisational environment and context; Priorities for the period 2010/11-2012/13; SASSA’s strategic intent Budget Allocation Concluding remarks

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Purpose

• The purpose of the presentation is to:

– Provide the Portfolio Committee with a broad overview of the strategic plan 2010/11 – 2012/13 ;

– Highlight priority areas for the agency

– Reflect on some of the challenges the Agency is facing; and share plan of action to address the risks.

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Introduction

• SASSA is entering its fifth year of existence;

• Agency has achieved good progress in a number of areas: – consolidation of the establishment and

operationalisation of the Agency; – Maintained consistent provision of monthly income

support to a significant number of South Africans

• SASSA will over the next 3 years embark on a reform agenda aimed at modernising the Agency’s business processes

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Mandate• SASSA derives its mandate from the following Acts:

• The Constitution of the RSA, 1996 (Act No.108 of 1996);“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.13 of 2004); – One of the key objects of this Act is to “provide for the

administration of social assistance and payment of social grants.”

• South African Social Security Agency Act, 2004 (Act No.9 of 2004);– One of the key objects of this Act is for SASSA to” act,

eventually, as the sole agent that will ensure the efficient and effective management, administration and payment of social assistance.”

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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.

Strategic Objective

“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”.

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Values

• The values to which SASSA subscribes to are:– Social cohesion;– Transparency;– Equity;– Integrity;– Confidentiality; and– Customer Care Centered approach.

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Review of Past Performance

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Improved Access to Services

• SASSA has, over the past four years, initiated programmes to improve service delivery.

• The initiatives include amongst others: – Measures to reduce the turn around times for

processing of applications, achieved on average a decrease from 21 to 9 days.

– Expanding the reach of social grants services - Over 13 million South Africans (27%) receive social assistance benefits across the country;

– Standardisation of services.

– Services were taken closer to potential beneficiaries, especially to those in the rural areas, through the ICROP

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Grants intake per annum

Table 1: Number of grants (31 January 2006 - 31 January 2010)Description 2006/01/31 2007/01/31 2008/01/31 2009/01/31 2010/01/31

Old Age 2,130,611 2,184,013 2,220,118 2,344,981 2,517,517

Disability 1,309,316 1,418,497 1,415,438 1,343,535 1,288,467

War Veteran 2,889 2,403 1,986 1,610 1,272

Grant-in-Aid 26,228 30,422 36,172 44,353 52,118

Care Dependency 88,776 97,794 101,607 106,126 110,381

Child Support 6,880,558 7,771,592 8,136,049 8,526,845 9,351,988

Foster Care 300,379 381,925 436,996 474,376 510,713

Total 10,738,757 11,886,646 12,348,366 12,841,826 13,832,456Source: SOCPEN

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Organizational Environment and Context

• SASSA’s major focus has been on: – Integration and standardisation of business processes;– Investment in the development and acquisition of

systems and infrastructure to enable it to improve access to social grants;

• Made good progress in relation to improving compliance to legislation, policies as well as to its own internal practices;

• Implemented the Enterprise Resource Planning system – which will facilitate compliance to Accrual basis of accounting

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Organizational Environment and Context

• Made significant mark in the fight against social grant fraud which resulted in a saving of R180, 9 million – Over 32 687 fraudulent grants were removed from the

system in the current financial year only

• Recorded unqualified audit opinion for 2008/09 FY- – Improvement is still necessary particularly in the area of

supply chain management and asset management

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Priorities for the period 2010/11-2012/13

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Priorities for SASSA

• SASSA’s strategy is underpinned by three key priorities, namely

– Customer Care Centred Benefits Administration and Management system;

– Improved systems integrity; and

– Increased access to social security services (Targeting the semi-rural and rural areas).

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Priority 1:Customer care centered benefits administration and management system

Implementation of policies on social assistance;

• Projected number of beneficiaries to increase from 13.6m in 2010 to almost 16m in 2013

• Projected growth is largely due to – Effects of the 2009 Economic recession – Implementation of new policy and legislative reforms

including the extension of the CSG, and Age Equalisation (Men - 60 years old)

• Other Policy implementation focus areas - use of alternative IDs, Disability Management, Deductions on Insurance Policies, Internal Grant Reviews by SASSA

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Priority 1:Customer care centered benefits administration and management system…

• Automated Core Business System– Roll-out IGAP to the whole of Free state– Introduction of biometric solution at application sites– Fraud detection and management systems– Maintenance of the Management Information systems

• Payment Process– Management of the Current Contracts

• Renewal of current cash payment contracts• Management and monitoring of contracted service providers

– Promote electronic forms of payment (target 70% by 2014)• Encouraging people to use alternative forms of payment• convenience to the client, reduced costs and risks of abuse

at pay points

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Priority 1:Customer care centered benefits administration and management system…

• Payment Process (cont…)

• Develop new payment system: The proposed model will:– Facilitate an increased ability for beneficiaries to be paid

anywhere at any time– Rationalise and decrease payment administrative costs;– Provide for sameness in beneficiary experience despite

variety in grant delivery channel;– Enhance Agency’s control and management of

information of the payment services;– increased financial accountability and audit-ability of the

payment process;– reduce fraud, corruption and leakage

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Priority 2: Improved systems integrity

• This priority encapsulates the following key projects:

• Improved Financial management– Compliance to GRAP standards– Reduction in irregular expenditure– Implementation of the Cash Stabilisation strategy

• reduction in the average cost of administering social grants,

• management of dormant accounts and • implementation of austerity measures

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Priority 2: Improved systems integrity• Institutional review

– Business Process Review– Change Management and organisational culture

reforms; – Human Capital Management Reforms.

• Governance Framework – Implementation of

• Risk Management strategy• Integrity policy; • Fraud Reduction strategy• Monitoring, Evaluation and reporting

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Priority 3: Increased access to social security services

• Broaden access to SASSA services – especially in rural areas – Prioritise Community outreach programme (ICROP)– Improve visibility of SASSA

• Linking Social Grants applicants to other economic and developmental opportunity through by strengthening - referral system

• Development of Stakeholder Management strategy• Customer relationship management strategy• Engage research to investigate the cross border flows of

people accessing grants

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The Agency’s Strategic Intent

Government Strategic Priority

The Agency Priorities

The Agency Strategic Imperatives

Output

Building cohesive, caring and sustainable communities.

Customer care-centred Benefits Administration and Management System

Integrated Social Assistance Business System

Policy and legislation on Social Assistance implemented Beneficiary Management Effective and efficient management of Payment

Contracts New Payment System developed Effective and efficient management of Disability Grant Automated Core business System implemented

Improved Systems Integrity

Transformed the Agency’s Culture and enhanced people capabilities

Integrity Model implemented Legal services model implemented Effective and efficient management and development

of human capital Knowledge Management Strategy implemented Integrated Financial Management System

implemented Integrated Risk Management Framework

implemented Buildings Infrastructure Strategy implemented Records Management (Paper-based) System

implemented Integrated Communication and Marketing Strategy

implemented Change Management Strategy implemented Integrated Monitoring and Evaluation Framework

implemented

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The Agency’s Strategic Intent cont..

Improved Systems Integrity

Transformed the Agency’s Culture and enhanced people capabilities

Framework on Strategic Planning, Operational Planning and Reporting implemented

Integrated Research and Development Strategy implemented

Micro Simulations and Macro economic Model implemented

Strategic Partnerships Strategy implemented ICT Business Application Systems availability

maintained and Accessible ERP implemented

Increased Access to Social Security Services

Increased Access to Social Security Services in the rural and semi-rural areas

Customer Relations Management Strategy implemented

ICROP Strategy implemented Stakeholder Management strategy implemented Strategy for linking Social Assistance beneficiaries

developed and implemented

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SASSA Financial Plan

2010/11- 2012/13

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Year on year budget growth comparison (2006/07-2012/13)

Description 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13

Main Appropriation 3,815,406 4,142,747 4,537,815 5,134,404 5,588,972 6,047,700 6,350,085

Growth Rate 9% 10% 13% 9% 8% 5%

Adjusted Budget 4,192,371 4,517,214 4,630,292 5,168,896 5,631,387 6,097,813 6,152,676

Growth Rate 8% 3% 12% 9% 8% 1%

Transfers Received 4,192,371 4,142,747 4,630,292 5,168,896 5,631,387 6,097,813 6,152,676

Revenue 1,269 6,661 10,096 8,207 8,369 8,755 9,157

Total Revenue 4,193,640 4,517,214 4,640,388 5,177,103 5,639,756 6,106,568 6,161,833

P rojected Expenditure 3,819,173 4,550,873 5,030,974 5,578,891 5,565,240 5,703,184 5,820,362

Surplus/ Deficit 374,467 (33,659) (390,586) (401,788) 74,516 403,384 341,471

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Year on year budget growth comparison (2009/10-2012/13

2010 MTEF SASSA Administration budget Rthousand 2009/10 2010/11 2011/12 2012/13

Administration 5,114,404 5,568,972 6,027,700 6,079,085

MIS 20,000 20,000 20,000 20,000

5,134,404 5,588,972 6,047,700 6,099,085

Additional allocation 34,492 42,415 50,113 53,591

Total 5,168,896 5,631,387 6,097,813 6,152,676

% Growth rate 0.67 0.76 0.83 0.88

Baseline

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Overview of Projected Expenditure 2010/11-2012/13

Economic Classification2009/10

Final Budget

2010/11 2011/12 2012/132009/10 -2010/11

2010/11 -201112

2011/12 -2012/13

R'000 R'000 R'000 R'000 % % %

Current payments 5,501,928 5,483,068 5,616,013 5,728,812 0% 2% 2%

Compensation of Employees 1,492,887 1,581,941 1,676,857 1,777,496 6% 6% 6%

Goods & Services 4,009,041 3,901,127 3,939,156 3,951,316 -3% 1% 0%

- Payment Contractor 2,739,790 2,734,594 2,731,668 2,724,616 0% 0% 0%

- Consultants, contractor and special services 125,186 117,697 124,759 132,245 -6% 6% 6%

- Travel & Subsistence 47,155 49,041 51,003 53,043 4% 4% 4%

- Other 1,096,910 999,694 1,031,826 1,041,412 -9% 3% 1%

Transfer Payments 15,052 16,795 17,727 18,613 12% 6% 5%

Capital Assets 61,433 65,424 69,480 72,954 6% 6% 5%

Total 5,578,891 5,565,240 5,703,184 5,820,362 0% 2% 2%

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2010/11 – 2012/13 Projected expenditure and the impact on the Strategic Plan

• The variance between the Agency’s allocations and the projected expenditure is a a result of the projected deficit in the 2009/10 which will funded by savings from the allocations over the MTEF period

• The savings will be realized through the implementation of the Cash Flow Stabilization strategy which entails – the Recouping of funds lying in dormant accounts; – Austerity Measures; and – the Migration of Beneficiaries to cost effective options.

• The major long term turnaround strategy for SASSA will be the implementation of Business process re-engineering

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2010/11 – 2012/13 Projected expenditure and the impact on the Strategic Plan

• The Agency’s projected expenditure for the 2010/11 financial year reflects no growth over the 2009/11 projected expenditure

• This therefore implies that the Agency does not have funds to embark on new projects and contracts but to continue funding existing contracts and projects

• This has significantly impacted on the Strategic Plan as some of the projects and service delivery improvements had to be deferred to the outer years of the MTEF period

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2010/11 – 2012/13 Projected expenditure and the impact on the Strategic Plan

• The 6 percent increase on Compensation of employees only allows for the inflationary adjustment of salaries

• Payment contractors does not provide for any increase over the MTEF period

• The significant portion of the allocations goes towards funding the existing contracts for lease agreements, including shared services security services, cleaning, municipal services, SIU, disability medical assessment fees and reviews, maintenance and repairs of vehicles including running costs for mobile trucks

• The other major portion of the allocations goes towards funding the current ICT contracts mainly with SITA and others

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Challenges

• SASSA has made tremendous strides in meeting its mandate, however, there are still many challenges confronting the Agency. Some of these challenges relate to:

Financial constraints;• Reduction in outreach programme;• Halting infrastructure acquisition; and• Filling of posts

High costs for administering social grants Impact of shared office accommodation Full compliance to government prescripts, policies

and procedures

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Action plan

• Organizational review;

• Beneficiary migration;

• Review of internal policies (regularize austerity measures);

• Strengthen beneficiary maintenance;

• Benefit verification to minimize fraud

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Concluding remarks

• This strategic plan has taken into consideration– Government priorities; – Constitutional obligations;– Available funding; and– Doing more with less.

• However, limited resources do pose a huge risk for effective and efficient service delivery;

• We endeavour to collaborate with other organs of State, to achieve all the planned outputs; and

• Most importantly, SASSA pledges its commitment to work with this Committee to create a better life for the people of South Africa

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End of Presentation