1. Eastern Cape Department of Social Development Provincial Budgets and Expenditure Review 2001/02-07/08 18-October-2005

2. Presentation Outline Strategic Responsibilities of Social Development Overview-2001/02-07/08 Budget Allocations-2001/02-07/08 Explanation of Expenditure trends Challenges

3. Strategic Responsibilities Social Development sector is responsible for the provision of:  Social assistance transfers, as income support, to eligible poor and vulnerable individuals, mostly the elderly, people with disabilities and children under the age of 14. Social welfare services to address the causes and impact of HIV and AIDS, drugs and substance abuse, vulnerability during certain phases of the lifecycle (especially childhood and old age) and services to people with disabilities. Community and household programmes which provide food relief, alleviate poverty, community support and development.

4. Overview 2001/02 As early as 2001/02, the delivery process of the department was based on the thrust to shift from “Welfare” approach to social development. The following groups were targeted for service delivery: Children Women Youth People with disabilities and Older persons

5. Overview 2002/03 During 2002/03, the President announced a turnaround plan aimed at enhancing service delivery, uprooting corruption and promoting good governance. The ten year provincial development and growth plan was developed, and gave the department a framework for the acceleration of the movement from traditional welfare to social development. During this year, 300 000 children were in receipt of social grants.

6. Overview 2002/03 Cont.. This huge success can be attributed to an integrated community registration campaign conducted jointly with the departments of Home Affairs, Health, Education, The South African Police Services as well as Housing, Local Government and Traditional Affairs. The department also established the first ever centralized electronic filing system in the country.  Food parcels were also distributed to 36 513 poor household in the most needy communities including child-headed household and families affected by HIV and AIDS through the food emergency scheme.

7. Overview 2003/04 During 2003/04 the department continued its focus towards social development, which had an impact on the competencies required of the work cadre and the budget. The province resolved to improve service delivery through a district development model, with a view to ensuring that what the district will be doing is different from the province In an endevour to improve Social security the President in the State of the Nation address, made a commitment to improve access to child support grant.

8. Overview 2003/04 Cont.. This resulted in the EC province mobilizing communities through IMBIZOs to market and increase the levels of capturing of child support beneficiaries. The province appointed panelists in 24 districts to assist in fast tracking the assessment of disability grant beneficiaries.

9. Overview 2004/05 In 2004/05, the following priorities were identified Transformation of Welfare Services which focuses on New Service Delivery Model and Child Care and Protection. Integrated Social Security with a view to improving Grant administration and fraud management Special development areas which include HIV and AIDS and Victim empowerment programme. Extension of the Child Support Grant to include children between the ages of 7 and 11.

10. Overview 2005/06 In 2005/06, while the department continues with all other programmes from previous years, there is more emphasis on strengthening Social Welfare Services as well as Integrated Poverty Eradication programme through an Integrated Social Development Services Grant, which replaced NFEP.  In the same year, the department started with the anticipation of the excision of Social Security and enthusiasm to establish the new Department of Social Development.

11. Overview 2005/06 Cont.  The service delivery model seeks to promote the development paradigm and seeks to strike a balance between social and economic development, mediate between Welfare and Social Development and champion social development approach.  The departmental priorities are further integral part of PGDP and integrated into social needs cluster priorities in which the department leads some priority areas.

12. 12 Expenditure vs. Budget Allocation 2001/02-07/08

13. 13 EXPENDITURE TRENDS

14. 14 Expenditure Trends  Expenditure trends reflect that Eastern Cape spending has more than doubled over the last three years.  Between 2001/02 and 2004/05, average growth reflects 28,3% which is almost the same as Social Development in the country (28,8%)  Budget allocated for 2005/06 has increased by 13,8% from previous year 2004/05, and between 2004/05 and 2007/08 the average growth in the EC province is 10,9%, while country wide it is on average 11,6%  Growth is expected to slow down because Child Support Grant has been phased out.

15. 15 EXPENDITURE TRENDS Cont..

16. 16 Expenditure Trends- Economic Classification  The highest proportion of expenditure between 2001/02 and 2004/05 goes to Social Security ( average 90,1%)  The concern is on Compensation of Employees which has been declining slightly between 2001/02 and 2004/05, and which reflecting an increase in 2005/06, it is once again declining in the MTEF  The province is also experiencing a challenge in funding of Capital Assets.

17. 17 EXPENDITURE TRENDS Cont..

18. 18 EXPENDITURE TRENDS Cont..

19. 19 EXPENDITURE TRENDS Cont..

20. 20 Expenditure Trends-Conditional Grants  HIV and AIDS Conditional grant reflects 87% average growth in spending between 2001/02 and 2004/05, while from 2004/05 to 2007/08 there is a decline of 51% in average growth (i.e. from 87% to 36%).  With effect from 2005/06, the bulk of Social Development spending is funded through conditional grants in preparation for the excision of SASSA.  Social Security grant for the current financial year is R9,947 billion, and Social Assistance Administration is R650 million, which together make 99% of the total grant allocations.

21. 21 Expenditure Trends-Conditional Grants  Spending growth on Disability grant between 2001/02 and 2004/05 is on average 50% because the province has strengthened monitoring measures for eligibility.  As the province becomes more efficient at eliminating the problem of in eligible people getting grants, spending and beneficiary numbers have declined noticeable.  These improvements assisted in reducing the projected over-spending for 2004/05 financial year which was initially R1,2 billion and as at 31 March 2005, the province only reflected an over-spending of 98 million.

22. 22 Rand Value of Grants per month

23. 23 Expenditure & Beneficiary Numbers

24. 24 Expenditure & Beneficiary Numbers

25. 25 Beneficiary Numbers

26. 26 Expenditure per programme

27. 27 Expenditure per programme

28. 28 Expenditure per programme  Social Welfare Services reflects an average declining growth between 2001/02 and 2004/05, however, between 2004/05 and 2007/08, average growth has picked up by 14,9% (i.e. from 4,6% to 19,5%).  This growth is visible in Administration due to improvement of Social Workers’ salaries as well as in Child and Youth Care and Protection.

29. 29 Expenditure per programme  Social Welfare Services reflects an average declining growth between 2001/02 and 2004/05, however, between 2004/05 and 2007/08, average growth has picked up by 14,9% (i.e. from 4,6% to 19,5%).  This growth is visible in Administration due to improvement of Social Workers’ salaries as well as in Child and Youth Care and Protection.

30. 30 Expenditure per programme  Development and support programmes reflects a significant increase in spending of 194,5% between 2001/02 and 2004/05, while growth has declined drastically between 2004/05 and 2007/08 by 149,7% (i.e. from 194,5% to 44,8%.  The growth is mainly due to HIV and AIDS and Integrated Social Development Services Grant (ISDSG).  The ISDSG focuses on youth development, HIV and AIDS etc.

31. Expenditure Trends  In 2001/02, the department recorded an under- spending of R638 million (12% of the allocated budget)  This was mainly due to Re-registration campaign as well as reviews of Social Security grants  In 2002/03, the department reflected an over- spending of R71 million due to Social Security (In respect of Care of the aged and Care of Disabled R133 million and R344 million respectively)

32. Expenditure Trends Cont.  In the same year, Child and Family Care reflected an under-spending of R363 million.  This was mainly due to non- registration of children and parents had no ID’s especially those from former homelands.  In 2003/04, the department reflected an over- spending of R598 million as a result of under- funding in respect of grants.  The department was never allocated the requested amount during the budget process.

33. Expenditure Trends Cont.  In 2004/05 overall the department overspent by R98 million mainly due to Child Support Grant and Foster Care Grant  Programme 4 (Development and Support Services reflected an under-spending of R84 million in respect of NFEP grant.  There was a delay in the tender process by National DoSD, and rollover request has been made to Provincial Treasury.

34. 34 Conditional Grants 2001/02

35. 35 Conditional Grants 2002/03

36. 36 Conditional Grants 2003/04

37. 37 Conditional Grants 2004/05

38. 38 Conditional Grants 2005/06

39. Conditional Grants Expenditure Trends  In 2001/02 unspent Regulation 11 grant only received from National in March 2002 and was rolled over to 2002/03  In 2002/03 Regulation 11 Back Pay Transfers and Regulation 11 Back Pay Administration under- spent by 46% and 79% respectively  In 2003/04, 34 % of Child Support Grant was not spent.  In 2004/05, Food Security grant reflected an under-spending of 89,5% due to delays in tender processes by NDoSD

40. Conditional Grants Expenditure Trends Cont.  In 2005/06 projected under-spending of R241 million on Social Security Grants is reflected as at September 2005.

41. Priorities for 2006/07-08/09  In view of the changes that are taking place in the department, the Chief Directorate, which comprises of programme 3 and 4 had to review its focus to that of facilitating the development towards fully integrated interdependence of individuals, families, groups, organizations and communities into mainstream society.  The department views itself as agents of a planned social change.

42. Priorities for 2006/07-08/09 Cont..  In order to deliver on its mandate, the following strategic objectives have been developed:  Elimination of absolute hunger and reduction of poverty.  Provision of programs that mitigate against vulnerability to social risks (disablement, abuse, HIV and Aids, ageing etc).  Empowerment and development of communities.

43. Priorities for 2006/07-08/09 Cont..  The principles that drive our service delivery are as follows:  Strength based approach.  People’s centeredness  Sustainable livelihood and  Value for human dignity and capability.

44. Priorities for 2006/07-08/09 Cont.. Transfer payment to NGO’s  There is no harmony on tariffs for childcare and older persons.  The department is already exposed to litigations by funded organizations who claim that they are discriminated, which is an issue covered by the promotion of Administrative Justice Act.  In spite of the fluctuation in the inflation rate the department has been unable to increase the tariffs for older persons since 2000/2001 financial year and in respect of children, tariffs were not increased since 1995/96.

45. Priorities for 2006/07-08/09 Cont..  The services are still concentrated in the urban areas and the rural poor are not accessing social services in the same manner as those who reside in the former Republic.  The department will be implementing a policy on financial awards with effect from 1 April 2006.  The policy is presenting a shift from per capita funding which is mainly focusing on unit cost to programme based funding which embraces delivery according to clear outputs and outcomes.

46. Priorities for 2006/07-08/09 Cont..  This approach presents a shift from business as usual that lacked significant impact to intervention that will facilitate greater impact and sustainability.  The danger of per capita funding is that it limits itself to direct benefits by beneficiaries without necessary focusing on the overall impact of the programme as reflected on the stated outputs.

47. Priorities for 2006/07-08/09 Cont.. Implementation of Child Justice Bill  The Child Justice bill has been costed and is presenting spikes on the budget for Social Crime Prevention.  The department in the Eastern Cape has been contributing to delays in the finalization of Child Justice Bill due to poor state of readiness for the implementation of the bill.  The province is unable to assess every arrested child within 48 hours because of the shortage of personnel.

48. Priorities for 2006/07-08/09 Cont.. Implementation of Child Justice Bill Cont.  Some children are kept in police cells and prison which is also illegal.  The National department provided the province with the conditional grant to implement the home based supervision which is one of the critical diversion programme and sentencing option in Child Justice Bill.  While the hot spots on crime have been identified we are unable to mitigate against the social impact on the youth.

49. Priorities for 2006/07-08/09 Cont... Implementation of Child Justice Bill Cont.  The department is facing litigations on children who have committed crimes and placed in custody of parents and who re-offended thus leading to victims of crime suing the state.

50. Priorities for 2006/07-08/09 Cont.. Operationalisation of Community Development Centers  Over the years the department constructed 6 Community Development centers and 12 multi purpose centers were sourced on partnership with Transnet.  The communities will receive integrated package (range of services) of developmental social service located in their close proximity. These centers will serve as outreach points in which communities will be actively participating in their own development.

51. Priorities for 2006/07-08/09 Cont.. HIV AND AIDS  The department has relied on conditional grant from the National Department for HIV and Aids until provincial Equitable Share allocation was received.  The provincial statistics reflect the incidents of HIV and Aids as 27,7 % in the Province and there has been a noticeable increase on child headed households.

52. Priorities for 2006/07-08/09 Cont.. HIV AND AIDS  With the roll out of ARV the demand will increase for the department to provide services to the infected individuals just like any sick person is not allowed to take medication on an empty stomach.  The departmental focus on HIV and Aids is implementation of Home Community Based Care Programme (HCBC) which targets orphans and vulnerable children, while food supplements are provided to people living with Aids.

53. Priorities for 2006/07-08/09 Cont.. HIV AND AIDS  In order to respond significantly to the pandemic the department requires at least a fully-fledged HCBC per magisterial district.

54. Priorities for 2006/07-08/09 Cont.. Poverty Eradication Programme  The province is second poorest Province with 67 % poverty rate among individuals and 77,7 % poverty rate among children.  The department relies on conditional grant for implementation of Poverty relief programme.  The key strategy to deal with poverty is Community Development strategy, which is driven from this programme.

55. Priorities for 2006/07-08/09 Cont.. Appointment of Social Workers, Probation Officers and Community Liaison Officers  The department benefited from Social Security on appointment of 100 Social Workers on contract to deal with backlogs on foster care and social relief of distress.  Services of 50 Community Liaison Officers is needed to strengthen the implementation of integrated development Services Grant.

56. CHALLENGES  In 2001/02, the department received a qualified audit report due to non-submission of supporting documentation deemed necessary to confirm validity, accuracy and completeness of transactions in ledger and expenditure accounts.  Engaged in a risk assessment process and identified the following key risk areas:  Inadequate Human Resources  Fraud and,  Inadequate Infrastructure.

57. CHALLENGES Cont.  During 2002/03 Social Security files continued to be a challenge.  The department received a qualification due to Ledger accounts and Treasury Balance.  Paying more attention to the participation and empowerment of communities in their own development in order to achieve sustainable development.  Strengthening and resourcing back office support at provincial and district level.

58. CHALLENGES Cont.  During 2002/03 financial year, there was a need to monitor closely CPS and All Pay to whom the department had outsourced payment of grants.  At beginning of 2004/05 financial year, the department was projecting to overspend by R1, 2 billion, however, because of improvements on efficiencies driven by the DoSD with the support from Provincial Treasury, the department managed to turn around the situation hence R98 million overspending.  2005/06 is faced with cost pressure on Goods and Services in respect of Fleet costs, while Transfers to NPOs reflect a projected overspending

59. CHALLENGES  For 2006/07 and MTEF, the remaining 5% (R608 million), after the excision of SASSA will have a negative impact on the mandate and operations of the department.  In order to avert that kind of a scenario, the additional R 585 million will greatly assist the department to deliver on its mandate.  In monetary terms, the overall amount that has been requested by the department without Social Security from Provincial Treasury for the next financial year is R1,2 billion.

60. CHALLENGES CONT.  In the current financial year, the department is sharing some of the administration costs with Social Security, e.g. IT costs, Security costs, and by next year, that kind of assistance will no longer be available.  The challenges faced by the department are such that if demands are not provided with appropriate resources the department may face litigations as some are obligatory in nature  The pressure exerted by these demands to the department poses challenges in which the available resources cannot match the demands for effective service delivery.

61. END