1. STANDING COMMITTEE ON APPROPRIATIONS Fourth Quarter Report – 2011/12 Financial year 29 February 20161Standing Committee on Appropriations

2. CONTENT Summary of “Fourth Quarter Expenditure” Explanations of Increased Spending Actions taken to improve management of expenditure Social Assistance Grants Successes and Challenges Closure 29 February 2016Standing Committee on Appropriations 2

3. 2011/12 FINANCIAL YEAR 29 February 20163 Fourth Quarter Expenditure January to March 2012 Standing Committee on Appropriations

4. 29 February 2016Standing Committee on Appropriations 4 SUMMARY – FOURTH QUARTER SOCIAL DEVELOPMENT R’000 Spent 23.9% of the Budget in the last quarter of the fin year

5. 29 February 2016Standing Committee on Appropriations 5 MONTHLY SUMMARY – FOURTH QUARTER SOCIAL DEVELOPMENT R’000 Average spending percentage of 23.9% per quarter against the allocation Average spending percentage of 23.9% per quarter against the allocation

6. 29 February 2016Standing Committee on Appropriations 6 QUARTERLY EXPENDITURE PER PROGRAMME Spending progress Programme Final Voted 2011/12 Expenditure Apr – Jun 2011 Jul – Sept 2011 Oct – Dec 2011 Jan – Mar 2012 Total% SpentDeviation R’ 000 P1 :ADMINISTRATION 244,60042,14050,18563,75787,894243,97699.74% 624 P2: SOCIAL ASSISTANCE 97,103,21323,622,38423,734,34224,354,81824,261,44395,972,98798.84% 1,130,226 P3:SOCIAL SECURITY POLICY AND ADMINISTRATION 6,237,0491,596,8531,527,3681,512,7361,591,3386,228,29599.86% 8,754 P4:WELFARE SERVICES POLICY DEVELOPMENT AND IMPLEMENTATION SUPPORT 451,75226,034271,96061,07190,001449,06699.41% 2,686 P5:SOCIAL POLICY AND INTEGRATED SERVICE DELIVERY 247,27314,056137,61124,60468,587244,85899.02% 2,415 TOTAL 104,283,88725,301,46725,721,46626,016,98626,099,263103,139,18298.90% 1,144,705

7. 29 February 2016Standing Committee on Appropriations 7 QUARTERLY EXPENDITURE PER ECONOMIC CLASSIFICATION Economic Classification Final Voted 2011/12 Expenditure Apr – Jun 2011 Jul – Sept 2011 Oct – Dec 2011 Jan – Mar 2012 Total% SpentDeviation R’ 000 R'000 Compensation of Employees 276,65765,18669,11970,16569,097273,56798.88% 3,090 Goods and Services 257,74231,22439,96963,565114,772249,53096.81% 8,212 Interest and rent on land 158124 -24 Transfers and Subsidies 103,730,92825,204,62625,610,97225,879,82525,892,533102,587,93298.90% 1,142,996 Payments of Capital Assets 18,5604311,4063,43112,64317,91196.50% 649 Payments for Financial assets 10,21810218 -10,218 TOTAL 104,283,88725,301,46725,721,46626,016,98626,099,263103,139,18298.90% 1,144,705

8. Explanation of Increased Spending in the last Quarter 29 February 2016Standing Committee on Appropriations 8 Goods and ServicesR’000 Delays in the verification of invoices received from the Department of Justice and Constitutional Development (DOJ & CD) for Litigation costs on behalf of the Department of Social Development (DSD). R15 000 Delays in settling of disputed invoices received from the Dept of Public Works for Office Accommodation. (Paid in the last quarter which was 50% of annual allocation) R12 000 ECD ConferenceR 8 000 Substance Abuse Community Mobilization ProgrammeR 6 000 Software licenses for Novell and Microsoft due to increases in the establishment R 4 000 Older Persons Project – Identifying gaps in Older Persons CentresR 2 400 Training Manuals and Booklets for Norms and Standard ProjectR 1 400 Upgrades to “Server Virtualization” project for NISISR 1 000

9. Explanation of Increased Spending in the last Quarter Payment of Capital Assets –Delays were experienced in procurement processes for the followings projects: Upgrading of Computer equipment and software for the Department. (R2.4 million) Upgrading of Board Rooms which include furniture and office renovations. (R1.8 million) Finalization of the IJS project on the procurement of computer equipment and rolled-out to provincial offices. (R4 million) 29 February 2016Standing Committee on Appropriations 9

10. Payment for Financial Assets – R 10.2 million –This relates to the irrecoverable Social Assistance Debtors that were written-off. 29 February 2016Standing Committee on Appropriations 10 Explanation of Increased Spending in the last Quarter

11. Actions taken to improve management of expenditure Streamlined the Procurement processes i.e –Procurement and Spending Plans in place; –Functioning of Procurement committees improved; –Development of Procurement and payment monitoring system; Monthly reporting on Expenditure against plans by Programme Managers at Management meetings; Regular inter-departmental meetings to resolve disputes and outstanding matters; Oversight visits to NGO’s receiving transfers. 29 February 2016Standing Committee on Appropriations 11

12. 29 February 2016Standing Committee on Appropriations 12 SOCIAL ASSISTANCE GRANTS R’000 The increase from 2 nd to 3 rd quarter relate to expenditure on Disability Grants as a result back-pay due to the “Backlog applications” processed as well as improved application approval rate.

13. 29 February 2016Standing Committee on Appropriations 13 SOCIAL ASSISTANCE GRANTS GRANT TYPE Final Voted Expenditure Apr – Jun 2011 Jul – Sept 2011 Oct – Dec 2011 Jan – Mar 2012 Total% SpentDeviation R’ 000 OLD AGE 37,270,196 9,231,3399,230,5439,308,5809,359,351 37,129,81299.62% 140,384 WAR VETERANS 12,2623,2993,0382,8332,678 11,848 96.62% 414 DISABILITY 17,706,0484,388,8144,364,5134,355,9574,265,737 17,375,021 98.13% 331,027 FOSTER CARE 5,249,7511,222,1731,268,4361,326,9051,193,401 5,010,915 95.45% 238,836 CARE DEPENDENCY 1,757,107431,308432,944436,035436,143 1,736,431 98.82% 20,676 CHILD SUPPORT 34,702,1998,276,5538,328,1178,816,1438,898,824 34,319,63698.90% 382,563 GRANT-IN-AID 217,72547,31349,44453,18954,081 204,02693.71% 13,699 SOCIAL RELIEF 187,92521,58657,30755,17751,228 185,29898.60% 2,627 TOTAL 97,103,21323,622,38423,734,34224,354,81824,261,44395,972,98798.84% 1,130,226

14. Under spending – R1,130 billion –Expenditure is driven by beneficiaries numbers, application process and grant values, which is linked to economic factors, policy changes, payment model efficiency and CPI inflation rates; –Savings on the total budget of R97 billion relate to “unpaid” grants as well as expenditure lower than projected when setting budget requirements specifically on Foster Care, Disability, Care Dependency and Child Support Grants; –Of the R1.1 billion under-spending, an amount of R730 million constitutes unpaid grants; –The savings equated to 1,2 % (of which 0.8% relate to unpaid grants) down from 2,1% in 2010/11 financial year. 29 February 2016Standing Committee on Appropriations 14 SOCIAL ASSISTANCE GRANTS

15. Successes The Department and its Agencies managed to achieve Un-Qualified Audits for the 2011/12 financial year; The Department continued to maintain an overall spending of more than 98% for the year under review; Specific achievement related to Social Grants: –Grant coverage and take-up rates of around 80% for older persons and 70% for child grants; –Increase in efficiency of grant application process; –Lower turn around times and back-pay resulting in decreased expenditure; –Increase in identification of fraudulent grants; –Steady and consistent migration of beneficiaries onto banking payment platform 29 February 2016Standing Committee on Appropriations 15

16. Challenges Continued budget pressures: –Increasing demand for services versus declining resources; –Shortage of Social Workers results in inability to provide statutory services as required by specific legislation eg. Children’s Act, Older Persons Act, etc. Disability grant steady decline is as a result of: Implementation of disability assessment tool Low number of disability grant applicants assessed as unfit Lack of required documentation from doctors Capability of assessment centres to process assessments Untraceable and notified beneficiaries that fail to come for medical assessments Care dependency grant numbers and expenditure were affected by: A low number of children assessed as care dependent A significant number of children lapsed due to death and age limit of 18 years Growth and lapsing trends creates challenges in setting budget requirements resulting in under-expenditure against budget 29 February 2016Standing Committee on Appropriations 16

17. Challenges Foster care grant numbers and expenditure were affected by: Inadequate capacity in terms of social workers to assess new applications Time consuming court processes in terms of finalizing approvals Court ruling in terms of administrative extension for existing foster care grants resulting in lapsed beneficiaries coming back into payment and an increase in expenditure accordingly Child Support Grant numbers and expenditure were affected by: Lower uptake in grants in the age groups 0-6 irrespective of targeted outreach programs Declining population in age groups 9-13, not yet simulated in the projections model 29 February 2016Standing Committee on Appropriations 17

18. THANK YOU 29 February 2016Standing Committee on Appropriations 18