Compensation Fund Strategic Plan CF Strategic Plan Presentation to the Portfolio Committee on Labour 29 March 2011 CF Strategic Plan Presentation to the Portfolio Committee on Labour 29 March 2011 Overall Accountability Compensation Commissioner: Mr. S.S. Mkhonto Overall Accountability Compensation Commissioner: Mr. S.S. Mkhonto

Compensation Fund Strategic Plan Legislative Mandate  The Compensation Fund is a Public Entity of the Department of Labour  It is responsible to administer the Compensation for Occupational Injuries and Diseases Act (COIDA) No. 130/1993 as amended by the COIDA 61/1997

Compensation Fund Strategic Plan Measurable Objective  To pay compensation for death or disablement caused by occupational injuries and diseases sustained or contracted by employees within 90 days of receipt of full documentation

Compensation Fund Strategic Plan Reporting Framework MINISTER OF LABOUR COMPENSATION BOARD DIRECTORGENERAL: LABOUR COMPENSATION COMMISSIONER AUDIT COMMITTEE BOARD SUBCOMMITTEES

Compensation Fund Strategic Plan CF Strategic Goals  Providing an efficient social safety net.  Providing professional, efficient and client orientated human resource.  Strengthening corporate governance.  Integration of the Fund with the comprehensive social security reforms.  Promote policy advocacy.  Improve financial viability.  Improve corporate support and services.  Enhance quality and access to COIDA services and information.

Compensation Fund Strategic Plan /11 Strategic Achievements  The Fund processed and paid compensation benefits in 2010/11 amounting to R606,310,161, as compared to amounting to R580,475,988 during 2009/10.  The Fund also paid medical accounts amounting to R409,111,173, in 2010/11 as compared to amounting to R232,933,375 in 2009/10.  Of the above medical accounts, were paid via the new bulk loading system at an amount of R4,630,  Minister approved 7% increase in medical tariffs, and 4.6% increase in compensation benefits plus 90% purchasing power catch up.

Compensation Fund Strategic Plan /11 Strategic Achievements  Draft policy on rehabilitation, reintegration and return to work has been developed.  Implementation of the CF Turnaround Strategy.  Business processes mapped and reengineered.  Organisational structure redesigned in a process of approval.  Service delivery model, change management, competency and migration frameworks developed.  Decentralised claims processing to 5 Provincial offices.  Integrated Claims Management (ICM) and Finance Management systems developed and in a process of being deployed.  All senior management positions have been filled and the Fund’s current vacancy rate is at 4.78%.  Collected R431million of debt relating to prior years.

Compensation Fund Strategic Plan /11 Strategic Achievements  Total investment increased by R3.9 billion, from R22,660,354 in 2009/10 to R26,563,700 in 2010/11.  Audit qualifications cleared in the following areas:  Bank reconciliation and suspense account.  Accounts payable.  Fixed assets.  Certain COIDA sections to be considered for amendment identified.  From a target of 45%, 211 of 273 (77%) Section 91 objections were finalised within 3 months in 2010/11, as compared to finalising 117 of 327 (35.7%) in 2009/10.

Compensation Fund Strategic Plan /11 Strategic Achievements  Participated and contributed to the Interdepartmental Task Team (IDTT) and contributed to social security reform proposals.  Communication strategy developed and intensive COIDA educational campaigns are being conducted in Limpopo, Mpumalanga and Eastern Cape.  Risk management strategy developed and implemented. In partnership with specialist organisations, the Fund made significant achievements in dealing with fraud and corruption.

Compensation Fund Strategic Plan CF STRATEGIC PLAN

Compensation Fund Strategic Plan Providing an efficient social safety net Responsible SubProgramme KEY OUTPUTDeliverables for 2011/12 Performance Indicators CompensationIncrease number of compensation claims finalised:  % of new compensation claims finalised. Contribute to social security reforms:  Provide inputs to the Interdepartmental Task Team (IDTT). Prevent occupational injuries by strengthening civil society:  Fund and monitor number of projects per province.  70% finalised within 2 months of registration.  Provide inputs within time frames specified by the IDTT.  9 projects funded and monitored.

Compensation Fund Strategic Plan Providing an efficient social safety net Responsible SubProgramme KEY OUTPUTDeliverables for 2011/12 Performance Indicators Medical ServicesImprove claims turnaround time:  % of new medical claims finalised. Development and implementation of rehabilitation, reintegration and return to work policy framework:  Approved policy framework.  70% finalised within 2 months of receiving invoice.  Policy proposal submitted to Cabinet.

Compensation Fund Strategic Plan Providing professional, efficient & client orientated HR Responsible SubProgramme KEY OUTPUTDeliverables for 2011/12 Performance Indicators Human Resource Management Achieve a conducive working environment:  Employee wellness strategy developed and implemented. Implement recruitment and retention strategy:  % vacancy rate maintained. Develop and implement work skills development plan (WSP):  % of identified training needs addressed.  Employee wellness strategy developed and implemented.  10% vacancy rate maintained.  80% needs addressed.  100 Interns by Q4.

Compensation Fund Strategic Plan Providing professional, efficient & client orientated HR Responsible SubProgramme KEY OUTPUTDeliverables for 2011/12 Performance Indicators Human Resource Management Strengthen HR capacity and monitor human performance:  % compliance with Performance Management Policy. Promote sound labour relations:  Grievance & Disciplinary cases addressed within days of receipt. Promote equity in the work place:  Implement employment equity plan.  95% compliance.  30 days for grievances.  60 days for disciplinary cases.  Employment equity targets achieved.

Compensation Fund Strategic Plan Strengthening corporate governance Responsible SubProgramme KEY OUTPUTDeliverables for 2011/12 Performance Indicators Risk ManagementImplement Risk Management strategy:  All cases received investigated within months of receipt.  Number of risk prevention and detection campaigns conducted. Full implementation of Minimum Security System (MISS):  Implementation of appraisal reports.  All cases investigated within 6 months.  4 campaigns conducted.  Full compliance with MISS.

Compensation Fund Strategic Plan Integration of the Fund with comprehensive social security reforms Responsible SubProgramme KEY OUTPUTDeliverables for 2011/12 Performance Indicators Legal ServicesAmendment of COID Act: COIDA Amendment Bill. Improve turnaround time in dispute settlement:  % of Section 91 objections finalised within 3 months.  COIDA amendment bill submitted to cabinet by quarter 4.  50% finalised within 3 months.

Compensation Fund Strategic Plan Promote policy advocacy Responsible SubProgramme KEY OUTPUTDeliverables for 2011/12 Performance Indicators CommunicationImplementation of communication / marketing strategy:  Number of educational campaigns conducted. Production of annual report and related publications:  Annual report and related publication produced.  3 Campaigns rollout by Quarter 4.  Publish and table the annual report by Quarter 2.

Compensation Fund Strategic Plan Improve financial viability Responsible SubProgramme KEY OUTPUTDeliverables for 2011/12 Performance Indicators FinanceIncrease assessment revenue:  % increase as compared to the previous year. Increase the number of registered employers:  % increase as compared to the previous year. Debt collection:  % increase of debt collected.  4% increase as compared to the previous year.  5% increase as compared to the previous year.  5% increase as compared to the previous year.

Compensation Fund Strategic Plan Improve financial viability Responsible SubProgramme KEY OUTPUTDeliverables for 2011/12 Performance Indicators FinanceMaintain the Fund as a going concern:  Financial ratio maintained. Maximise investment returns:  Receive above the (STEFI) average benchmark returns (12.20%). Ensure effective asset management:  Maintenance of the fixed asset management register.  Greater than 2:1 financial ratio achieved.  Receive above the (STEFI) benchmark returns.  100% Maintenance of the fixed asset management register.

Compensation Fund Strategic Plan Improve financial viability Responsible SubProgramme KEY OUTPUTDeliverables for 2011/12 Performance Indicators FinanceDevelop and implement a facilities management programme:  Facilities management programme reports. Develop and implement demand and acquisition management plan:  Demand and acquisition program reports.  Full implementation of facilities management programme.  Demand and acquisition plan developed and implemented.

Compensation Fund Strategic Plan Improve corporate support and services Responsible SubProgramme KEY OUTPUTDeliverables for 2011/12 Performance Indicators Information and Communication Technology Deliver information and communication technology solutions:  Deployment of the Integration Claims Management (ICM) system. Deliver information and communication technology solutions:  Deployment of the Financial Management system.  Deployment of the Integration Claims Management (ICM) system.  Deployment of the Financial Management system.

Compensation Fund Strategic Plan Enhance quality and access to COIDA services and information Responsible SubProgramme KEY OUTPUTDeliverables for 2011/12 Performance Indicators Organisational Effectiveness Organisational transformation:  Approved decentralised organisational structure. Develop and implement quality management system:  Quality management system developed.  Implement the decentralised structure to all provinces by quarter 4.  Initiate and implement QMS process.

Compensation Fund Strategic Plan Enhance quality and access to COIDA services and information Responsible SubProgramme KEY OUTPUTDeliverables for 2011/12 Performance Indicators Organisational Effectiveness Continuous review and improvement of business processes:  Number of process change requests approved according to agreed upon time and effort. Improved level of client satisfacition:  % increase in client satisfaction level achieved.  Number of process change requests approved according to agreed upon time and effort.  60% client satisfaction level achieved.

Compensation Fund Strategic Plan Enhance quality and access to COIDA services and information Responsible SubProgramme KEY OUTPUTDeliverables for 2011/12 Performance Indicators Programme Management Office Coordinate all priority projects currently running under the Compensation Fund:  Implementation of all CF priority projects within committed project plan / schedule with measurable targets and budget.  Quarterly reports on progress.

Compensation Fund Strategic Plan Strengthening corporate governance Responsible SubProgramme KEY OUTPUTDeliverables for 2011/12 Performance Indicators Internal AuditTo control and coordinate all audit activities of the relevant internal audit department to meet strategic objectives of the department:  Approved policies and procedures / methodology for Internal Audit.  Manage the execution of the annual coverage plan and prepare monthly status quo management reports on the activities of the section.  Implement policies and procedures/methodology for the Internal Audit.  Prepare monthly status quo management reports on the activities of the section.

Compensation Fund Strategic Plan Strengthening corporate governance Responsible SubProgramme KEY OUTPUTDeliverables for 2011/12 Performance Indicators Internal Audit To control and coordinate all audit activities of the relevant internal audit department to meet strategic objectives of the department:  Submission of quarterly report to the Audit Committee.  Approved Audit Committee reports.

Compensation Fund Strategic Plan /12 Strategic Priorities  Implementation of the approved organisational structure.  Implementation of the ICM and the FM systems.  Intensify the development and approval of the Rehabilitation, Reintegration and Return to Work Policy Framework.

Compensation Fund Strategic Plan /12 Strategic Priorities  Amendment of COID Act.  Continue with COIDA educational campaigns to provide guidance on the Fund’s services.  Improve revenue collection.  Job creation, internship, learnership and invest in socially responsible investments.

Compensation Fund Strategic Plan Investments at the PIC  Compensation fund invest the funds through the Asset manager Public Investment Corporation.  The Fund received 8.98% return on investment from April 2010 to December  The Fund bought investments from the following companies or organisation as at 31 December 2010

Compensation Fund Strategic Plan Investments at the PIC (Continued)

Compensation Fund Strategic Plan Expenditure2009/10R’ /11R’000 Compensation of Employees 108,428114,399 Claims 1,665,5481,927,964 Administrative Expenses 190,933279,652 Total Expenditure 1,964,9092,322,015 Summary of financial performance

Compensation Fund Strategic Plan Revenue2009/10R’ /11R’000 4,054,7864,052,470 Investment Income 1,235,2952,200,233 Total Revenue 5,290,0816,252,703 Net Surplus 3,325,1723,930,688 Summary of financial performance

Compensation Fund Strategic Plan Budget Summary for Revenue Current Budget 2010/11 Approved Budget 2011/12 Forecast 2012/13Forecast 2013/14Forecast 2014/15 Assessments3,452,069,1023,637,572,8513,819,451,4934,010,424,0684,210,945,272 Interest and Penalties420,977,125249,682,206262,166,316275,274,632289,038,364 Investment Income1,985,461,5361,756,751,2351,844,588,7961,936,818,2362,033,659,148 Other Income21,400,00097,900,338102,795,355107,935,123111,694,855 Total Revenue 5,879,907,763 5,242,542,2186,029,001,960 6,330, ,646,337,639

Compensation Fund Strategic Plan Budget Summary for Expenditure Budget Current Budget 2010/11 Approved Budget 2011/12Forecast 2012/13Forecast 2013/14Forecast 2014/15 Compensation of employees323,969,025494,503,077527,645,7774,010,424,068583,391,860 Claims2,709,284,0553,808,722,2624,056,289,2094,279,385,1154,493,354,371 Administrative Expenses580,664,802474,428,401413,940,006422,114,956443,514,259 Total Goods and Service3,289,948,8574,283,150,6634,470,229,2154,701,500,0724,936,868,630 Capital Expenditure24,353,83825,349,13630,538,8751,500,0001,000,000 Surplus2,241,636,043938,903,7541,001,588,0941,071,840,6931,125,077,148

Compensation Fund Strategic Plan Thank you