SASSA & NDA 2022/23 Annual Performance Plan; with Minister

Meeting report

Opening Remarks
The Chairperson welcomed the Minister and said she would immediately hand over to the Minister to give her input on the Department's capabilities.

Minister Lindiwe Zulu said that she had made her remarks in the 26 April meeting. She was joining to listen to the presentation and informed the Chairperson that she was also in another committee meeting thus would be coming in and out of the meeting.

National Development Agency (NDA) Annual Performance Plan 2022/23
Mr Bongani Magongo, NDA Acting CEO, said over the years the NDA focus has been on poverty eradication but the model used has not been effective or delivered because it has focused on funding small projects that have not had a significant impact, even though, as we all know, we are facing alarmingly high levels of poverty and unemployment. It had viewed the current financial year as a bridging gap that would allow NDA to go forward in the future.

Mr Magongo spoke about the Strategic Partnership model - diversifying and increasing NDA financial sources as it currently relies on the National Treasury allocation through the Department of Social Development whereas the aim is to mobilize funding from all sources including the private sector, foreign governments, development agencies and all government departments. The NDA turnaround strategy has mapped out what it needs to do to mobilize resources from all these sources. To attract funding, they must redesign the funding model and focus on big impactful, community based economic activities and improve the lives of the people in those communities. This will foster and ensure investments that go to those communities are kept revolving within those communities. The Public-Private Partnership (PPP) strategy would be in line with the company's business model. That turnaround approach is nearing completion. NDA will focus on which PPP strategy is most aligned with the business model. It will focus on one significant job creation project with the goal of achieving long-term growth, particularly in underprivileged neighborhoods, and expand its resource mobilization strategy. This will necessitate restructuring its company operations and redesigning the programme to focus on job opportunities and business activities in poor communities. Both will have an impact on poverty reduction.

NDA must aid in coordinating activities for the development that will happen in the District Development Model piloting one district per province. NDA is responsible for coordinating all development at that level. Finally, NDA must modernize its systems in implementing the requirements and turnaround strategy, as well as improving a better branding and communications strategy.

The NDA focus on increasing funding, job creation and skills development is for the current financial year, focusing on youth economic and employment activities through the Presidential Employment Stimulus Package. NDA has been allocated R30 million and this will enable creating 2000 jobs and having a mix of job creation, skills development and business entrepreneurs at community level.

They have packaged their grant funding to package their cooperate funding and finding cooperatives that can build their business capabilities in their cooperatives and creating jobs and within cooperatives and foster a collaborative relationship with different types of cooperatives so that they can capture the market. Lastly, it has 9 pilot sites that have been created within the Distracts that have been identified by Department as pilots for District Development Model where it runs all the programs and test what the best way is to ensure that it creates jobs. It is shifting the research program to focus on identifying and debating gaps that are created by the development policy. The aim is to look at the bottlenecks in implementing policy and propose ways in which it can improve the ability of turning around policies into main table, defined and strategic projects which will reduce unemployment and ultimately reducing the impact of poverty an increasing economic activity for the poor community.

Mr Ben Morule, NDA: Senior Manager: Office of the CEO, said that what is being presented today is a slightly amended Strategic Plan and a completely new Annual Performance Plan (APP). What has remained the same is the Impact Statement "to reduce levels of poverty in South Africa"; the Vision "Championing development for a society free from poverty" and the Mission "A premier development agency that coordinates and integrates development initiatives to break the cycle of poverty in the country". These will be impacted by the turnaround strategy once it has been signed off and there are a few suggestions on what that should be going forward.

There has been a lot of mileage and achievements in a number of key strategies and focus areas. The first one is to look at the facilitation of the NDA Amendment Act which process has already begun where inputs are being received internationally. The NDA has contributed about what are the key bottlenecks in the Act that ought to change.

South African Social Security Agency (SASSA) 2022/23 Annual Performance Plan
Ms Raphaahle Ramokgopa, SASSA Executive Manager: Strategy & Business Development, noted that a number of factors influence the framework in which SASSA functions, including high levels of poverty, unemployment, and calamities that our people encounter throughout the year. The July 2021 KZN and Gauteng riots and the natural disasters continuing to strike different parts of the country were noted and SASSA services mitigate the damage and ensure inhabitants have access to basic necessities.

• Existing social grant recipients which involved 18.5 million awards as of 31 December 2021 will continue to be supported;

• Facilitate the enrollment and payment of new entrants – 1.2 million grants have been approved. The expected total number of beneficiaries would rise from 18.5 million in December 2021 to 18.9 million in March 2023. Implementation of the extended CSG (Top-Up for Orphans) includes the payment of 191 200 applicants

Government has indicated that no additional resources are available for the MTEF Budget in 2022/23. As a result, no requests for baseline increases should be submitted by departments or entities. This means that any additional funding for a programme will have to come from cuts to other programmes or reprioritization, either within the department's budget or from the budgets of other departments.

- 100% of COVID-19 special grant (R350) applications have been processed.
- Measuring SASSA's Disaster Response within 48 hours, 95% of reported disasters were responded to.
- 95% of new grant applications received in person are processed within five days.
- 70% of online applications were handled in less than 10 days (measured from the time all online conditions were met).

Discussion
Ms Maleka (ANC, Mpumalanga) said that in the previous year the NDA had noted a concern about high irregular and wasteful expenditure. The NDA's focus continues with its KPI aiming to reduce non-compliance, irregular, fruitless and wasteful expenditure by 80% in 2022/23 and ultimately eliminating it in 2024/25. What does NDA do to ensure there is no irregular and wasteful expenditure in the current financial year?

She asked about NDA raising R35 million for civil society organisations (CSOs) by the end of the financial year and to provide more information on how it is going to do this.

Ms S Luthuli (EFF, KZN) asked how the NDA is planning to achieve the targets set for Program 2 with the huge budget cuts. NDA had noted one of its risks was non-cooperation by stakeholders; how is it planning to reduce this risk?

She understands that SASSA has increased its relief grant for KZN flood victims from R700 to R1000 for people who lost all their belongings. What measures are in place to oversee the spending of this budget and ensure that the funds are not stolen?

Ms N Ndongeni (ANC Eastern Cape) raised the increased grants for the KZN flood victims. She asked if the Eastern Cape and the North West have been included because there are flood victims there as well. One of SASSA's outcomes is to have an effective and efficient social grant payment service, how will SASSA manage this in the event of load-shedding with its IT automation?

There are no planned infrastructure projects for 2022/23 due to budget constraints but SASSA plans to ask Treasury for additional funding. Do the budget cuts affect SASSA's targets for social assistance?

Ms Ndongeni asked SASSA to explain the application process for the R350 grant since April 2022. Are applicants supposed to apply each month or is it a once-off application?

She asked the NDA to give the provinces and municipalities where they will start the pilot projects for the purpose of Committee oversight as well as the criteria used to choose these provinces and municipalities.

Ms Ndongeni said that the budget cuts are a huge concern and asked if the NDA will reach its targets in the indicated timeframes. The irregular expenditure has been constantly raised over the years and the Auditor General had warned the NDA and the Department of Social Development
(DSD). She asked what consequence management plan the NDA has in place to correct this. She asked if the aim of reducing irregular expenditure by 80% is realistic and what specific measure they put in place to achieve these targets.

Ms Ndongeni was concerned about the online SASSA application form, saying that community members have raised questions about the form requiring the applicant to give their parents/spouse details and identity number. This was a concern because we live in a society where many people are either orphans or come out of the foster care system and do not have these details. The online system does not want to accept the application without these details. She understood the need for these details for important tax and authentication purposes. However, are there measure in place to help people who do not have these details?

Ms D Christians (DA, Northern Cape) stated that they are the National Council of Provinces and deal with provincial problems. She raised a concern to SASSA about the Northern Cape which she has tried to raise both provincially and nationally. It has been over a year but she has not received a response to the problem of the placement of Barkly West SASSA office in the Northern Cape. This office is in a place where the majority of people are middle and upper class and do not need the grant. The people that need to access this office live very far and have to walk through dangerous areas to reach this office. There has been a request that this office be moved back to town where it previously was and was moved without justified reasons. She asked for help on this matter from National SASSA.

Ms S Lehihi (EFF, North West) asked when will SASSA establish a centralised digital system that communicates with the Department of Labour to automatically remove a beneficiary that no longer fulfils the unemployment criterion. How true is it that SASSA had called for resubmission of applications for the R350 unemployment relief fund? Many people did not receive their April payment even though they had applied and no communication was received from SASSA [ 37:30- 37:55 spoken in her vernacular language].

NDA response
Mr Magongo, NDA Acting CEO, responded about the R175 million irregular expenditure which dated back from 2014/15 onwards. The Agency had made a clear plan to comply with the National Treasury irregular expenditure framework to start dealing with removing this irregular expenditure. When the NDA made a request for condonation, it was not approved by Treasury. The reasons were two-fold: some of the irregular expenditure requested for condonation by Treasury was the responsibility of the NDA Board to condone; and secondly, additional information was required by Treasury about consequence management.

In December it got a response from Treasury clarifying the items that prevented the NDA from being granted condonation. In January, the NDA put together the required documents for the condonation of R98.2 million. It was submitted in February and it was granted in March 2022. Currently out of the R175 million, it had condonation for R98 million. That condonation is about irregular expenditure that happened between 2014 and 2019. Most of this dealt with contracts for offices for its national and nine provincial offices which were procured without following the correct bidding process.

This was because its supply chain management was under resourced and there was not a distinct separation of functions and duties in that unit. In previous years the procurement was done at different units which ended up in these procurements not following the correct supply chain process and contraventions. Most of the people responsible for this non-compliance had left the NDA. The senior supply chain manager was the only person that was dismissed. Currently it has appointed a loss control committee as it was one of the requirements. It is sitting with an average of 11 irregular contracts and a determination test is taking place to provide information about staff members that have caused the irregularities and the exact amount of the contract. This test will make a binding recommendation on the consequences that need to be followed. Where there is a loss, it will be recovered from those individuals. In the case of suspected criminality, it needs to be reported to the nearest police station that will make provision of a case number.

Once this process has been approved, it can be implemented and will outline the consequence management procedures for the staff that are still with the NDA. Where loss has been suffered, a process to recover this money has been set up. There is a process of recovering loss from the people who have left the NDA where debt collectors and state lawyers will be involved. The set targets are achievable and in the past two years there has been a huge decline in irregular and fruitless and wasteful expenditure. NDA feels comfortable that if it applies this process that it will be able to prevent and remove this. It has increased the Supply Chain Management (SCM) staff who have attended several programmes and it is comfortable that it has a well functioning supply chain unit

On the mobilisation of funds to meet its targets and the budget cut, the NDA has been getting budget cuts since 2009 and some point the cut was over 40%. It is still recovering from that and it has been a very difficult process to increase and reach its normal funding base. The NDA Act in place requires the NDA to fund its programme from funding that comes from all government departments and the private sector. Over the years it had not built capacity in this area but they have built a unit this year lead by Mr Brokwe who set up that function.

The NDA Act states that the NDA allocation that comes from Treasury through DSD is for administration and good governance of the institution. It says that all funding for CSOs must come from contingent funds that come from the different stakeholders he had mentioned previously.

The turnaround strategy is forcing the NDA to raise R1 billion funding for CSOs to reach an impactful level. It is possible to raise this money from all these sources and there is no reason why this cannot happen when the NDA has the building capacities 1. To focus on huge projects; 2. Build impactful projects; 3. Create jobs; 4. Projects that produce quality products that can be put in the market and that adhere to levels of competitiveness. All these pipelines are being built within the turnaround strategy. If it is able to implement all its strategies then the NDA has the potential to be the premier development agency and is likely to produce over a million jobs a year. The NDA needs to reconfigure. It is confident in its model and the turnaround strategy that it will present to this Committee on the type of NDA that will be operating in the future.

The set targets for 2022/23 are achievable including the 80% reduction of irregular expenditure as well as raising funds. At the start of 2022/23, the NDA had an excess of R45 million thus it is possible to raise the funding targets.

NDA Chief Operations Officer, Ms Susan Khumalo, replied that the pilot projects will be exercised in all nine provinces but that it will be targeting the District Municipalities where the President launched the DDM which is not launched in all nine provinces. They have conducted a needs analysis design in which the have developed the poverty and non-development indicators in those districts. The plan is to conduct community profiling, through the volunteering programme, where the targeted communities gather new data on the needs of the communities and engage with relevant stakeholders within these communities. Therefore the interventions will be directed at these needs.

Mr Bongani replied about the stakeholders. In the Eastern Cape they put together six to seven companies which are supporting its focus on job creation and economic activities and opening up markets for the products that will be produced. These products include agriculture, brick-laying, garment making and skills that can provide people in those communities with a sustainable income. They have already started committing to fund projects within the Eastern Cape.

He said that Mr Brokwe is going to KZN and Limpopo. Raising R35 million will not be an issue. The NDA has never had contact with the private sector to present them with sustainable projects that they can invest in for increasing employment in poor communities. They have been lacking the platform they can use to build the ability of youth and women and ensuring that there is sustainable jobs and businesses that can produce quality products that are required by the community and business including exports. In this way it can maximise the approach and he is sure that there are latent skills in communities which can assist in reducing the unemployment related to the economic hardship experienced globally. Mr Brokwe is ensuring that there is engagement with all these stakeholders

SASSA response
SASSA CEO, Ms Busisiwe Memela-Khambula, responded about how SASSA will achieve its objectives with the budget cut. The biggest challenge is being able to address all the issues related to the R350 grant. It did not get an operational budget for administering the R350 grant in this round. It still has the money from the previous year. Not having received funding this round, SASSA will have to take it from cost of employees unless Treasury comes back and gives it an allocation. SASSA will do its best.

The increased social relief of distress grant has been allocated to all flood victims and not only those in KZN. They still have funding. However when funds run out it will not be able to do this. They are still okay and have allocated R85 million to KZN. They are still ok on tracking because there are other people who are providing support. SASSA is providing support where it is not being given.

The impact of loadshedding has not been tracked but it knows that as it improves and uses more automated processes then this would have been impactful in terms of efficiency.

The social assistance budget has not been impacted except for the SRD R350 grant where they have a limit of R40 billion. That is all they can provide. They are unsure of the impact on some of the processes. SASSA needs to improve the process of identifying people who should not be in the system because they are not in dire need for the R350 social relief. The beneficiary applies for the R350 once. However, it is important to state that in April 2022, all the beneficiaries needed to reapply because of the change in the regulations. These are the applications that will be processed using the new application process. Going forward they will need to indicate every three months if they still need the grant or not. This process is done to ensure that it does not pay people whose circumstances have changed and thus do not need the R350 anymore.

Ms Busisiwe Memela-Khambula said that if applicants do not have information of the parent or spouse, they can skip this and they are able to proceed with the application. She will ask the grant team to clarify this.

SASSA is aware of the Barkly West office concern. The previous building in town was not conducive and did not comply with the necessary requirements. It was too small to accommodate its needs and that is why they moved to the new location. This was the only suitable building they could choose from as there was no public facility in the township. This was not a permanent arrangement. As soon as they are able to find a suitable building closer to the township, the office will move there.

Mr Brenton van Vrede, DSD Acting DDG: Comprehensive Social Security, added about the SASSA application form requirements. The purpose of the ID numbers on the application was to get a better sense of the household profile and that it does ask more information such as education, previous employment, and the number of household members. These are all voluntary fields, and the applicant can proceed without this information. What may cause a problem is that the ID number is required in a numerical form and they may be putting in text but that can easily be fixed by the applicants. SASSA has received over 8 million applications in the past week without these details.

When given an opportunity for closing remarks, Minister Zulu said she has nothing to say for now.

The Chairperson thanked all participants and said if there were follow-up questions then Members should send them in writing.

Meeting adjourned.