1. Report on the Guardians Fund and the Masters Office
Portfolio Committee on Justice and Constitutional Development
8 September 2010
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2. Introduction and background
Audit Outcomes
Introduction and background
The Guardian’s Fund (GF) is a statutory trust established in terms of Chapter V of the Administration of Estates Act, 1965 (Act 66 of 1965).
The purpose of the GF is to protect and manage monies of persons deemed to be legally incapable or lacking the capacity to manage their own affairs as well as undetermined, unknown or absent heirs and untraceable persons.
The GF has representation in Six Masters Offices namely Pretoria, Cape Town, Pietermaritzburg, Grahamstown, Bloemfontein and Kimberley
Some of the functions are inter alia to
- process inheritance applications and make payments to persons entitled thereto
- invest monies held with the PIC
- Interest calculation in respect of money's received on behalf of beneficiaries
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3. The Financial Management Response
Audit Outcomes
The Financial Management Response
The governance obligations of the Department demanded that a robust response be evolved to address the issues plaguing the Fund.
The Department mobilized resources and expertise and instituted a Project to turn-around and implement various financial and accounting initiatives to redress the decline of the financial environment and ensure better accounting for the Fund.
From September 2006 a multi skilled project team was directed at addressing:
- Procedural challenges (staff doing things incorrectly);
- Non-compliance with key legislation and prescripts;
- Errors and accounting backlogs;
- Addressing all processing backlogs; and
- Facilitating the completion of a computer system roll-out.
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4. Audit Outcomes
Audited Outcomes
The Guardians Fund audit report has been consistently Qualified
or Disclaimed from 1993 through to 2006/7 Financial year.
Since then ….
2009/10 Unqualified Audit report NAQ (No Audit Qualification)
2008/09 Unqualified Audit report NAQ (No Audit Qualification)
2007/08 Unqualified Audit report NAQ (No Audit Qualification)
2006/07 Qualified Audit report (Uncertainty around opening balances)
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5. Accounting Challenges
Audit Outcomes
Accounting Challenges
Accounting challenges facing the Guardian's Fund can be ascribed
to the issues listed below:
Staff Capacity constraints
Skills Shortage
Inadequate/antiquated accounting systems
Evolving financial accounting standards (GAAP)
Explosive Growth in Fund Size
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6. Surpluses over the years
2006/07 – R65,1 million
2007/08 – R107,4 million
2008/09 – R48,2 million
2009/10 – R119,1 million
These surpluses fluctuate as return on investment fluctuate.
The beneficiaries are however shielded from the fluctuation
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7. Public Investment Corporation
Investments:
Public Investment Corporation
In terms of Section 87 of the Administration of Estates Act, No.66 of 1965) beneficiary amounts received in the Guardians Funds should be invested
with the PIC. All monies except for those required for immediate disbursements are invested with the PIC.
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8. Volumes and values of Receipts:
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9. Transaction volumes and Receipts
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10. Volumes and values of payments :
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11. Growth in beneficiary receipts and payments
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12. GUARDIAN’S FUND ACHIEVEMENTS
Return on investment of 8.5%;
Growth of Fund 15% or R770million
Improved Controls and Turnaround times
MOVIT – online verification of fingerprints in collaboration with Dept of Home Affairs
Unqualified Audit reports
5 of the 6 Guardians Funds have complete verified beneficiary detail
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13. Service Delivery
The Fund is growing on average at 15% I terms of net-asset base
The transactions doubled from due to the age of majority being reduced from 21 to 18 years
In The Fund paid out R754m, which is money in the hands of vulnerable people enabling them to participate in the economy
Services to the beneficiaries are rendered at no cost to them
Interest rate is higher than most low risk investments
The beneficiaries are cushioned from market fluctuations due to the conservative investment strategy that we adopted few years ago i.e we invest at 8.5 return and we pay at 7.5% to beneficiaries. The 1% difference between 8.5 and 7.5 goes to reserves till the end of the financial year where after paid over to the National Revenue Fund.
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14. DECEASED ESTATES, CURATORSHIPS, TRUSTS & INSOLVENCIES 2008 – 2009 Comparisons
OFFICE
DECEASED
CURATOR
TRUSTS
INSOLVENCIES
2008
2009
Johannesburg
28037
34506
120 94
4729
4206
1558
3172
Pretoria
26628
27305
N/A
199
5137
4529
5208
9168
Cape Town
17696
17933
461
279
5135
3976
836
1357
Bloemfontein
16704
17427 64 36
1610
1422
216
316
Durban
20488
19611 12 28 1
203
235
Pietermaritzburg
15144
14156 67 55
1596
1386 97
255
Port Elizabeth
7271
9172 35
575 51
Bisho
3906
3125 8 3
Mthatha
5699
6871 11 29 6
Polokwane
10594
10864
186
106
Mafikeng
4731
6860 25 17 98
123
109
178
Thohoyando
2221
2460 38
Kimberley
3489
4603 2
422
413 26
Grahamstown
5244
5894
972 50 69
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15. Deceased estates registered from 1 January 2010 – 7 September 2010
OFFICE
TOTAL
Bloemfontein
11451
Grahamstown
3137
Johannesburg
22031
Mafikeng
10544
Kimberley
2512
Polokwane
7056
Port Elizabeth
7461
Pretoria
15646
Thohoyando
1865
Cape Town
12251
Bisho
1655
Mthatha
5582
Pietermaritzburg
9566
Durban
14415
125172
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16. DECEASED ESTATES, CURATORSHIPS, TRUSTS & INSOLVENCIES 2008 – 2009 Comparisons
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17. COMPARISON: DECEASED ESTATES AVERAGE INVENTORY VALUE / NUMBER OF CASES for the period January to December 2009
ESTATES BETWEEN
AVERAGE RAND VALUE
CASES %
,000
23,684.54
137,339
80%
125, ,000
325,722.04
19,049
11%
625, ,125,000
841,637.92
7,479 4%
1,125, ,625,000
1,344,584.10
2,983 2%
1,625, ,125,000
1,847,317.66
1,579 1%
2,125, ,125,000
2,566,200.65
1,510
3,125, ,125,000
3,555,795.07
716
0.04%
4,125,001- 5,125,000
4,600,954.28
384
0.02%
TOTAL
171,039
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18. Link of Performance to current strategy
Guardian Fund
Previous target for payment from the Fund was 60 days now it is 40 days
1st quarter we met this target in 4 of the 6 Masters offices and we project to meet for the rest of the year.
Deceased Estates
The target is 4 months finalisation of estates less than R We are on target and project to be on target for the rest of the year
estates are finalised within 12 months and we are on target
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19. PRESIDENTIAL HOTLINE COMPLAINTS
2010
TOTAL
JAN
FEB
MRCH
APR
MAY
JUNE
JULY
AUG
COMPLAINTS 26 7 3 2 1 40
ENQUIRIES 46 5 54 72 12 4 94
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20. PRESIDENTIAL HOTLINE COMPLAINTS
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21. CHALLENGES Physical Structure Organizational Structure Communication
Location of our Offices
Proper Accommodation
Cost of accommodation
Relocation impact on service delivery
Organizational Structure
Vacant senior posts; Chief Master, Chief Director,
Right Sized establishments
Communication
Establishment of the Office of the Chief Master
Building Capacity
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22. Masters Environment 1. Focus on our Core Business 2. Reform
Support the vulnerable!
Compliance vs. People focus
Shared Services
Guardian’s Fund
2. Reform
Legislation – Curatorships, Estates & Rescues
Policies – focus on the vulnerable
Procedures & Directives
Unsound Human Resources Practices
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23. Masters Environment .3 Stakeholder Management
Legal and Accounting Profession
Legal Aid South Africa
Banks & Trust Companies
Social Welfare entities
Improved NGO and CBO co-operation
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24. Highlights The increase in the number of people served daily
Co-operation agreement with LASA
ICMS roll out & implementation at 402 Magistrates Courts (Service Points)
Online verification of fingerprints implemented in 2 offices
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25. Payments from the Guardians Fund in Pietermaritzburg period March to August 2010
MONTH VALUE NUMBER
MARCH R
APRIL R
MAY R
JUNE R
JULY R 20,078,
AUGUST R
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26. Average of New Matters Registered in 2010 per day
January                       714
February                      832
March                          
April                            
May                            
June                           
July                             
August
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27. MONETARY VALUE OF BUSSINESS IN THE MASTERS
The following table depicts the totals for the first two months of 2010
R 4,96 billion passed through the Masters during January and February 2010
This averages out to R124Million a day; or
R15, 5 Million an hour!
At the bottom-end of the financial range a people had a R542Million while at the top end only 68 people had an amount of R311Million.
24,041.00
22553
542,196,673.00
329,872.00
3099
1,022,273,328.00
836,765.00
1140
953,912,100.00
1,353,944.00
495
670,202,280.00
1,863,806.00
240
447,313,440.00
2,520,169.00
237
597,280,053.00
3,564,383.00
117
417,032,811.00
4,585,314.00 68
311,801,352.00
4,962,012,037.00 40
124,050,300.93 8
15,506,287.62
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