Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698924703241.pdf (South Africa)
Wednesday, 18 October 2023] No 140—2023] FIFTH SESSION, SIXTH PARLIAMENT PARLIAMENT OF THE REPUBLIC OF SOUTH AFRICA _____________________ ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS _____________________ WEDNESDAY, 18 OCTOBER 2023 _____________________ TABLE OF CONTENTS ANNOUNCEMENTS National Assembly 1.
Withdrawal of Bill ........................................................................................................... 2 Referral to Committees of Bills introduced - Correction ................................................ 2 2.

TABLINGS National Assembly and National Council of Provinces 1.

Minister of Public Works and Infrastructure .................................................................. 2 2.
Minister of Justice and Correctional Services ................................................................. 3 COMMITTEE REPORTS National Assembly 1.

2.

Social Development ......................................................................................................... 4 Health ............................................................................................................................. 67 1 ANNOUNCEMENTS National Assembly The Speaker 1.
Withdrawal of Bill (1) The Relocation of Seat of Parliament Bill [B29–2022] (National Assembly – sec 76) has been withdrawn in accordance with Assembly Rule 334.

2.

Referral to Committees of Bills introduced - Correction (1) The following Bill is referred to the Committee on Justice and Correctional Services for consideration and report: (a) Remuneration of Public Office Bearers Amendment Bill [B8–2023] (National Assembly – sec 75).
Note: The Bill was erroneously referred to the Portfolio Committee on Cooperative Governance and Traditional Affairs, for consideration and report.

(See ATC 139 of 17 October 2023) TABLINGS National Assembly and National Council of Provinces 1.

The Minister of Public Works and Infrastructure (a) Report and Financial Statements of the Engineering Council of South Africa (ECSA) for 2022-23, including the Report of the Independent Auditors on the Financial Statements and Performance Information for 2022-23.
(b) Report and Financial Statements of the South African Council for the Architectural Profession (SACAP) for 2022-23, including the Report of the Independent Auditors on the Financial Statements and Performance Information for 2022-23.

(c) Report and Financial Statements of the South African Council for the Project and Construction Management Professions (SACPCMP) for 2022-23, including the Report of the Independent Auditors on the Financial Statements and Performance Information for 2022-23.
(d) Report and Financial Statements of the South African Council for the Quantity Surveying Profession (SACQSP) for 2022-23, including the Report of the 2 Independent Auditors on the Financial Statements and Performance Information for 2022-23.

2.

The Minister of Justice and Correctional Services (a) Draft Amendments to Directives, submitted to Parliament for approval, in terms of section 97(2) of the Child Justice Act, 2008 (Act No.

75 of 2008).

COMMITTEE REPORTS National Assembly 3 1.


PORTFOLIO COMMITTEE ON SOCIAL DEVELOPMENT BUDGET REVIEW AND RECOMMENDATION REPORT (BRRR), 2022/2023, DATED 18 OCTOBER 2023 1.

INTRODUCTION The Portfolio Committee on Social Development considered the financial and non-financial performance of the Department of Social Development, South African Social Security Agency (hereafter SASSA or the Agency), and the audit report of the Auditor-General South Africa (AGSA on 11 October 2023.
It considered the financial and non-financial performance of the National Development Agency (hereafter the NDA or Agency) on 13 October 2023.

The Committee reports as follows: The Committee’s mandate as prescribed by the Constitution of South Africa and the Rules of Parliament is to build an oversight process that ensures a quality process of scrutinising and overseeing the department’s action, that is driven by the ideal of realising a better quality of life for all people of South Africa.
It is also required to facilitate public participation, monitoring and oversight over the legislative processes relating to social development and also to confer with relevant governmental and civil society organs on social development matters.

The Committee also enhances and develops the capacity of its members to exercise effective oversight over the Executive Authority in social development.

It monitors whether the Department of Social Development fulfils its mandate according to priorities.
The Committee also has a mandate to perform the following: • Considers legislation referred to it; • Conducts oversight of any organ (s) of the state and constitutional institution(s) falling within its portfolio; • Facilitates appointment of candidates to entities; • Considers international agreements; and • Considers budget of department and entities falling within its portfolio.
For the current medium term (2019 – 2024), the Committee’s oversight focuses on the department and its entities performance regarding the implementation of the priorities set in the National Development Plan and in the Medium Term Strategic Framework (MTSF).

The Committee also 1 4 2 conducts oversight over the department’s performance in implementing the priorities of the State of the Nation Address (SONA).
National Development Plan (NDP) These are the priorities of the NDP that the Committee focuses on: • establishment of a social floor which outlines an acceptable or decent standard of living, • bringing the informal sector into the mandatory contributory scheme, • expanding social welfare system, • • reviewing funding to not-for-profit organisations, training more welfare professionals and community workers, • expanding public employment programmes, • promoting opportunities for youth employment.
• use of social audits to enhance accountability in the welfare system, and • the integration of all databases of people who receive different forms of social security services.
Medium Term Expenditure Framework (MTEF) Priorities – 2019/2024 • Priority 1: A Capable, Ethical and Developmental State • Priority 2: Economic Transformation and Job Creation • Priority 3: Education, skills, and Health • Priority 4: Consolidating Integration, Human Settlement and Local Government • Priority 5: Spatial Integration, Human Settlement and Local Government • Priority 6: Social Cohesion and Safe Communities • Priority 7: A better Africa and World State of the Nation Address (SONA), February 2022 The following key strategic themes emerged from SONA 2022, which have a bearing on social services sector: 2 5 3 • Ending gender-based violence (GBV): government is intensifying the fight against gender- based violence and femicide through implementation of the National Strategic Plan on gender- based violence and femicide (GBVF) and other measures to promote the empowerment of women.
For an example, February 2022, the President signed into law three new pieces of legislation, which strengthened the criminal justice system, promoting accountability across the state and supporting survivors.

The implementation of this legislation will go a long way to ensuring that cases are successfully prosecuted, that survivors are protected and that there are more effective deterrents in place.
The President noted that the fight against gender-based violence will never be won unless, the society mobilises all formations and all citizens behind a sustained programme of social action.

• Extension of the special covid-19 grant: since the onset of covid-19, the social relief of distress grant has provided support to more than 10 million unemployed people who were most vulnerable to the impact of the pandemic.
As much as it has had a substantial impact, government must recognise that the country faces extreme fiscal constraints.

A fiscal crisis would hurt the poor worst of all through the deterioration of the basic services on which they rely.

In this regard, the President announced that the period for special covid-19 grant would be extended for one further year, to the end of March 2023.

This was because of the proven benefits of the grant during the covid-19 health pandemic period.
• A need to improve payment systems and sustainability of R350 grant: the President assured the country that any future support must pass the test of affordability, and must not come at the expense of basic services or at the risk of unsustainable spending.

During this time, government will engage in broad consultations and detailed technical work to identify the best options to replace this grant.
• Job Creation - Expanding Public and Private Employment: it is the responsibility of the private sector to create jobs and government needs to provide a conducive environment for this to happen.

As government works to grow the economy and create jobs, SONA 2022 assured the nation that government would expand support to poor families to ensure that no person in this country has to endure the pain and indignity of hunger.
The President said that, the Social Employment Fund will create a further 50,000 work opportunities using the capability of organisations beyond government, in areas such as early childhood development, and tackling gender-based violence among others.

In addition to expanding public employment, government is providing support to young people to prepare them for work and link them to opportunities.
SONA 2022 made a comment that the social economy, including 3 6 4 early childhood development, has significant potential not only to create jobs, but also to provide vital services that communities need.

2.

PURPOSE OF THE BRRR As part of exercising its oversight work, the Committee considered the 2022/2023 annual reports of the department and its entities.

This BRRR reports on the financial and non-financial performance of the department and its entities.
In terms of Section 5 of the Money Bills Amendment Procedures and Related Matters Act, No.

of 2009, the National Assembly (NA) through its committees must annually assess the performance of each national department.

Portfolio Committees must thus annually submit Budget Reviews and Recommendation Reports (BRRRs) for tabling in the NA in order for Parliament to compile a report for the Medium Term Budget Policy Statement.
The Money Bills Amendment Procedure and Related Matters Act therefore make it obligatory for Parliament to assess the department’s budgetary needs and shortfalls vis-à-vis the department’s operational efficiency and performance.

Most importantly, the budget review process enables the Committee to amend the budget allocation of the department through the recommendations it makes.

Its recommendations are considered during the consideration of the Medium Term Budget Policy Statement (MTBPS).
The budget review process also enables the Committee to make recommendations to the Minister of Social Development on issues pertaining to service delivery.

This therefore means that the analysis contained in the BRRR is both backward and forward looking.

Methodology The BRRR culminated from a very intense and thorough analysis and interaction with the Department of Social Development, the South African Social Security Agency (SASSA) and the National Development Agency (NDA).
These included briefings from the department and its entities on their quarterly reports and briefings on their annual reports.

The Committee also received a briefing from 4 7 5 the Office of the Auditor-General on the audit outcomes of the department and its entities financial and non-financial performance for the year under review (2022/2023).

3.
3.

COMMITTEE OVERSIGHT 3.1 ANALYSIS OF FINANCIAL EXPENDITURE AND TARGETS ACHIEVED PER QUARTER FOR 2022/2023 FINANCIAL YEAR The Committee received quarterly expenditure and non-financial performance report for the four quarters of the 2022/2023 financial year.

Table 1 and Figure 1 below show the expenditure and performance reports of the Department per quarter.
Table 1: DSD Budget expenditure per quarter Figure 1: DSD performance success rate per quarter 5 8 6 Quarterly financial and non-financial performance (April 2022- March 2023): as shown in Table 1 as at the end of the fourth quarter, the Department had spent R241.7 billion (97.5%) of its allocation.

The Department thus incurred an under-expenditure of R6 billion for the 2022/23 financial year.

The lower-than-expected expenditure was mainly due to the COVID-19 Social Relief of Distress (SRD) grant.
This was due to lower than anticipated uptake of the grant following implementation of stringent income verification measures intended at improving targeting the poorest.

A Second Adjustment Budget was tabled in March 2023 where an additional amount of R3.7 billion was declared a saving on the SRD R350 grant, which resulted to a total amount of R9.7 billion declared as saving on this grant for the 2022/23 financial year.
There was also an observed under expenditure of R1.5 billion in the Old Age Grant (OAG), and R647 million on the Child Support Grant (CSG) also due to lower than anticipated beneficiaries.

In terms of economic classification, R240.4 billion was spent on Transfers and Subsidies line item spent R240.4 billion, i.e., underspending of 2.4%.

Expenditure on Compensation of Employees (CoE) reached R512.9 million, resulting in 1.9% less than what was allocated.
Spending on Goods and Services was R470.6 million, i.e.

5.7% lower than what was budgeted for.

The reasons for under-expenditure will be discussed under the each of the relevant programmes.

6 9 7 Programme 1 exceeded its allocation with 4.9%, whereas programmes 2, 3, 4, and 5 all incurred under expenditure.

As was the case in the previous financial year (2021/22), Programme 4 is the lowest performing in terms of underspending.
There was a slight improvement in spending for Programme 5, from 6.5% in 2021/22, to 0.5% in 2022/23.

Figure 1 illustrates non-financial performance of the Department for the four quarters.

It had set itself a total of 65 annual targets across all five programmes for 2022/23 financial year.

Quarters 1 and 4 had the highest performance, both achieving 80% success rate.

However, some important targets were not achieved.


These included: • Submission of the Government Wide strategy on the employment of Social Service Professionals to Cabinet by the end of the fourth quarter 2022/23 financial year.

• Submission of the Non-for-Profit Amendment Bill, SASSA Amendment Bill and Victim Support Services Bill to Cabinet.

The NPO Amendment Bill was subsequently withdrawn due to promulgation of the General Laws Amendment Act, 2022 which rendered the NPO Bill obsolete.
• Development of the Draft White Paper on Comprehensive Social Security.

• Submission of the draft Prevention of and Treatment for Substance Use Disorders Policy to Cabinet for approval to gazette for public comments.

• Submission of the reviewed Sustainable Livelihood Framework to Cabinet.
COMMITTEE OBSERVATIONS Detailed Committee observations, deliberations and responses from the Department are contained in its reports on Section 32 reports (quarterly reports) on the non-financial and financial performance of the Department for 2022/2023 financial year.

However, it is important to highlight some of the key observations it made that it was seriously concerned about and require urgent department’s action.
They are as follows: • The Committee noted with concern that there has been no progress made in the finalisation of Bills that were to be finalised in the current medium-term period (2019 -2024).

It wanted to know when will the Department finalise these Bills as Parliament has a short period of time before it rises for the general elections.

7 10 8 • The Committee also noted that the Department reported that it met its target of quarterly implementing its Entity Oversight Framework with its entities.
It was however concerned that service delivery challenges, such as overcrowding at SASSA offices, lack of queue management, impact of loadshedding, challenges with South African Post Office and Postbank, continue to plague SASSA.

• It also wanted to know the reason behind the slow uptake of the SRD grant.

The R9.7 billion saved on this grant was worrisome in the country where even though there are very high levels of appeals not finalised, and payments not made even though applications were approved.
• It also noted with concern the high number of NPOs that are non-compliant and wanted to know besides the training given to NPOs, does the Department have a programme that assists NPOs to comply with the NPO Act requirements?

What are the reasons that complying NPOs are not funded?

• It also noted with concern the delay in the establishment of the Inspectorate for Social Assistance.
The President signed the Social Assistance Amendment Bill in December 2020, which legislates the establishment of the Inspectorate.

3.2 OVERSIGHT OVER KEY PRIORITY AREAS The oversight work of the Committee also included conducting oversight on the interventions made by the Department of Social Development (DSD) and the Department of Justice and Constitutional Development (DoJCD) on the protection of children against child targeted violence.
It also conducted oversight on the protection of the rights of people with disabilities by the Department of Women, Youth and People with Disabilities (DWYPD), the Department of Basic Education (DBE) and DSD.

The Committee also conducted oversight on SASSA’s status report of social grants payment.
The following issues emerged from the aforementioned oversight work (detailed presentations and minutes on deliberations can be obtained from the Committee Secretariat): • Child protection: according to the South African Police Service (SAPS) third quarter (2022/2023 FY) crime statistics, there was an increase in serious assault against children (i.e., attempted murder and assault grievous bodily harm) in 2022 compared to 2021, 6 410 and 5 303, respectively.
8 11 9 DSD implements child protection interventions in response to Pillar 4 of the National Strategic Plan on Gender Based Violence and Femicide.

It developed and is implementing an Intersectoral Protocol on the Management of Child Abuse, Neglect and Exploitation.
It is also implementing family preservation programmes, alternative care services, social and behaviour change (SBC) programmes, Rock Leadership Programme for Traditional Leaders, Men Championing Change Programme and Boys Championing Change Programme.

DoJCD is implementing three key GBV legislation that enhance child protection, namely, the Domestic Violence Amendment Act (No.
14 of 2021), Criminal and Related Matters Amendment Act (No.12 of 2021) and the Criminal Law (Sexual Offences) and Related Matters Act (No.32 of 2007).

It also runs specialized children’s courts and sexual offences courts.

Most importantly, it was reported that the Integrated Case Management System (ICMS) does not have data metrics for child victims, and this is a lacuna that is being addressed.
ICMS is a national repository of cases captured from lower courts, mainly to monitor the life cycle of each case and determine the effectiveness of the justice system.

To address this, the Department was finalising a Femicide Watch Dashboard, which is a national repository for GBV – related femicide cases including child femicide cases.

The Committee raised several issues in relation to child protection.
These included, lack of information on where shelters can be accessed, a need for a toll free number that will guide people where they can access requisite services, there is a looming crisis of child trafficking, particularly of new born babies on social media platforms such as Facebook, concern over taxi industry holding schools, ECD centres, scholar transport hostage because they want to take over the transport routes, safety of school children on the streets, status on and financial support of safety parents, tracking of reports of child abuse and neglect filed by ECD principals, educators accused of child abuse but still working and a proposal for a whistle blower hotline for child abusers.
It also raised a concern of departments working in silos and this has exacerbated social ills.

The Committee also raised several issues regarding the visibility of the SBC programmes.

They included lack of knowledge of these programmes in communities, whether they involve both boys and girls?

The reason why NPOs in the Western Cape province were not funded to implement these programmes?
The statistics reported by both departments on child targeted violence painted a different picture to the reported impact of these programmes.

The extent to 9 12 10 which DSD programmes reach families that need these services, how are children in need of protection and safe parents identified?

To what extent are ward committees included in the SBC programmes?

Child protection programmes are implemented but the impact is not felt on the ground as children and women are still not safe.
There is a serious need for education campaigns (roadshows) on these programmes.

The Committee also raised a concern over the low conviction rates on child abuse cases and the high number of these cases withdrawn.

It also raised a serious concern over the high number of cases where perpetrators who are out of bail commit serious violence and murder against children.

It was equally concerned about cases where perpetrators who are released on bail, putting the lives of children at risk.
• Protection of the rights of people with disabilities: the role of DWYPD is to provide oversight, monitoring, coordination, and advocacy guided by the White Paper on the Rights of People with Disabilities (WPRPD), which domesticates the United Nations Convention on the Rights of Persons with Disabilities (UNCRPD) in the entire public service.

DSD working together with other government departments provide services to people with disabilities.
The two departments (DSD and DWYPD) underscored the critical gap created by the absence of the overarching legislation governing services to people with disabilities.

This is an important legislative gap that needs to be urgently addressed by a responsible department.

In the absence of this legislation, DSD drafted a Policy on Social Development Services to Persons with Disabilities, which was at the time of reporting being gazetted for public comments.
It has been developed for implementation, monitoring, evaluation and reporting on the following two strategic objectives namely, persons with disabilities continually receiving disability specific social development services, as well as disability mainstreaming in all Departmental service interventions.
It has been developed to enable the DSD portfolio — consisting of the Department, the South African Social Security Agency (SASSA), the National Development Agency (NDA) and the provincial departments of Social Development — to qualitatively improve the services that the portfolio is implementing together with and for South Africa’s Persons with Disabilities.

10 13 11 DWYPD champions the implementation of the WPRPD.
Also, through the Chief Directorate: Programme Governance and Compliance it focuses on promoting disability rights inclusion and disability responsive budgeting, planning, research, reporting, monitoring and evaluation.

The Sub-Programme: Governance and Compliance (RPD) is the national disability rights coordination mechanism of government and sets the agenda for disability rights in South Africa.
It is responsible for coordinating and compiling national, regional and international reports on treaty and policy obligations.

Particular focus is also given to disability inclusion and monitoring and evaluation on progressive realisation and impact of the implementation of national and international law and policy.

It plays an integral role in disability inclusive research.
DWYPD emphasized that inclusion of disability is highly affected by lack of specific disability legislation to enforce compliance and reporting.

Without disability inclusive planning and implementation, it is challenging to bring about socio-economic transformation of persons with disabilities.

Other challenges faced by the Sub-Programme include lack of compliance with reporting requirements by reporting institutions and lack of enforcement of monitoring and evaluation of disability rights instruments.
This instrument is critical to identify gaps that exist, develop of theories of change, and propose interventions and solutions.

The analysis conducted by DWYPD on the departmental annual performance plans (APP) showed that many departments are still not including disability into their planning, budgeting, auditing, monitoring and evaluation programmes.

This trend has a negative impact on the lives of persons with disabilities.
It also evidence that stakeholder management and departments do not have dedicated Disability Rights focal persons and therefore do not plan, nor budget for disability inclusiveness in programmes of departments.

Most departments do not implement the reasonable accommodation policy of government nor develop department specific reasonable accommodation policies.
DBE implements Goal 26 of the Action Plan to 2019: Towards the Realisation of Schooling 2030, which obligates it to increase the number of schools that effectively implement inclusive education policy and have access to centres that offer specialist services.
Some of the department’s policy obligations are to convert special schools to resource centres to provide professional support neighbouring schools, conduct the screening, identification, assessment 11 14 12 and provide support to all learners who require additional support, mobilise out of school children and youth with disabilities, designate, convert and resource approximately 500 out of 20 000 primary schools to full service schools, establish a district based support teams to provide a coordinated professionals support service and ensure that learning difficulties are not only perceived residing with a learner but also within various parts of the system.
The Department is also then implementing the Policy on Screening, Identification, Assessment and Support (SIAS).

The policy provides for the standardization of the procedures to identify, assess and provide programmes for all learners who require additional support.

The department has also prioritized the improvement of teacher competencies and qualifications in specialized areas, such as Braille, South African Sign Language and Autism.
The Committee emphasized the need for awareness campaigns on Autism as there is a lack of understanding by communities and families.

Many of the children with Autism are not attending school and this is depriving them of their basic rights.

It also raised a serious concern regarding the accessibility of scholar transport as children go for months without it.
It advised the DBE to look into this matter because children with special needs end up attending mainstream schools because schools for children with special needs are not accessible and not available in many towns.

• SASSA’s report of social grants payment: the Committee invited SASSA to account for the reasons that led to non-payment of social grants between October – December 2022.
Minister Zulu, SASSA, and Postbank attributed that to the transition of the social grant payment system from the South African Post Office (SAPO) to Postbank following the cessation of the SASSA/SAPO Master Service Agreement.

The new contractual agreement with Postbank came into effect on 1 October 2022.

With the takeover, Postbank experienced connectivity or network challenges during payment runs, that led to failed transactions at ATM and points of sale (POS) for on some days.
Most of these challenges had since been resolved at the time of reporting.

The problem was further compounded by the decision taken in October 2022 by SAPO to discontinue the use of the IGPS BIO pay system across SAPO outlets which led to Postbank switching over all grants payments to the Postilion switch, to allow beneficiaries to still withdraw at the branches.
This happened when the bank was in process of migration to EMV 12 15 13 compliant switch and unfortunately this had a negative impact on the financial switching processes.

The Committee raised a serious concern over the lack of communication by SASSA and Postbank to both the public (beneficiaries) and to the Committee over the termination of the payment contract with SAPO and subsequent move to Postbank.

This resulted to a lot of disruptions to the payment of grants.
It was quiet embarrassing for Members of Parliament not being able to help beneficiaries who reached out to them for assistance.

It sought assurance that Postbank will not disappoint South Africans just as SAPO did by closing branches and terminating payment contract.

Postbank reported that it re-channelled beneficiaries to other merchants.

It has also migrated all the beneficiaries to a more secure system.
It will also implement a system where beneficiaries will liaise directly with Postbank and not via SAPO.

It has also on boarded IT security experts and has implemented control measures to secure the systems.

The operational challenges at SAPO are the biggest risk for Postbank which is trying to manage.

Work was continuing for Postbank to take over some of the SAPO branches especially those that have more Postbank presence.
• Oversight on the implementation of the Auditor-General’s (AG) audit findings: On 13 September 2023, the Committee received progress reports from the Department and its entities on the implementation of the AG’s audit findings.

The Department reported that it resolved 43 out of 51 audit findings.
The findings that were not resolved mainly related to the weaknesses identified in the administration of the Social Relief of Distress Grant (SRD, R350 grant), reconstruction of the debtor files that were lost in the 2021 fire in KwaZulu-Natal region, the SOCPEN not validating marital status of applicants, possible fraud in the testing of expenditure and non-compliance with IIA Standards 1312.

SASSA reported that it resolved 73 out of 83 audit findings.
Unresolved findings related to consequence management on fruitless and wasteful expenditure, non-submission of relevant documents pertaining to the 2020/2021 financial year to the B-BBEE Commission within 30 days, burned debtor files and inconsistencies in construal penalties.

The NDA reported that it resolved all 13 audit findings.

13 16 14 The deliberations focused on the non-payment of the old age grant and disability grant between 5 and 6 September 2023.
SASSA reported that this was yet again due to the technical glitch in the Postbank payment system that affected ATMs and retailers, resulting in failed withdrawals.

The technical glitch was a result of a system upgrade Postbank introduced to provide a better service.

Members of the Committee expressed their serious concerns about these system challenges that were happening for the second time within a year.
They affected the most vulnerable population of the country, the elderly, and people with disabilities.

It resolved that there should be a joint meeting with the Portfolio Committee on Communication and Digital Technologies wherein SASSA, DSD and the Department of Communication and Digital Technologies will brief the committees on the status of social grants payments by Postbank.

It was also proposed that the South African Banking Association should be invited.
3.3 Key issues that emanated from the Committee oversight work The following key issues will need further oversight by the in-coming committee in the 7th administration: • Oversight into the impact of the Social and Behaviour Change programmes.

• Finalisation of the Femicide Watch Dashboard by the Department of Justice and Constitutional Development as it is a key instrument in the reporting of the GBV related cases in the country.
• Oversight on the implementation of the Intersectoral Protocol on the Management of Child Abuse, Neglect and Exploitation.

• Drafting of the overarching legislation governing services to people with disabilities by the mandated department.

• Mainstreaming of disability by the social development portfolio in its planning, budgeting, auditing, monitoring and evaluation programmes.

• Compliance by the social development portfolio on the reporting requirements on disability.
• Enforcement of monitoring and evaluation of disability rights instruments by the social development portfolio.

4.
4.

AUDITOR – GENERAL SOUTH AFRICA (AGSA) FINDINGS FOR 2022/2023 14 17 15 In general, AGSA found that the audit outcomes for the social development portfolio have improved from the previous year due to the Department of Social Development (DSD) and the National Development Agency (NDA) receiving clean audits, compared to the previous year where they had findings on either performance information or compliance with legislation.
The South African Social Security Agency (SASSA) and the funds audit outcomes remained consistent with those from the previous year with SASSA obtaining an unqualified opinion with findings on compliance with legislation and audit of performance information while the funds obtained clean audits.

Audit findings for the social development portfolio Underspending The department spent 97,5% of the budgeted social assistance (grants).

The total underspending on SRD grants amounted to R4,3 billion.
The main reason for the underspending was due to low uptake of the R350 Social Relief of Distress grant following the lower income threshold and bank verification of applicants’ income.

The benefits administration and support programme administered by SASSA manages the full function of grant administration from application to approval, as well as beneficiary maintenance.
SASSA does not have a process to record and track grant enquiries from the public, as a result they could not accurately report resolved/unresolved cases.

The following deficiencies were further noted relating to the grant payments and administration at SASSAs: • • • • • Payments made to ineligible applicants.

Under-/overpayment of foster care grants.

Inadequate means test conducted.

Some beneficiaries could not be located during physical verifications.
Disability grant fraud The root cause of these deficiencies was inadequate oversight on the grants administration and payments done by SASSA.

AGSA recommended that a detailed assessment and a root cause analysis should be conducted by SASSA and DSD to determine the factors that caused the findings on the grants.

SASSA should implement appropriate actions to resolve the grant controls weaknesses identified.
Internal audit should be used effectively to provide independent assurance on effectiveness of controls.

Material Irregularities (MIs) 15 18 16 Previously reported MIs SASSA made progress in addressing MIs that were previously reported.
The following progress was reported: • Payment of social assistance fees for services not rendered – R74 million (in progress) - The final investigation report was submitted to the accounting authority on 13 April 2023, and it confirmed that disciplinary actions can be taken against officials still employed by the entity.

The accounting authority has started disciplinary steps against implicated officials.

A presiding officer was appointed in July 2023 to chair the disciplinary process.
The disciplinary hearing was held on 20 and 21 September 2023 and the process is not yet finalised.

The liquidation process to recover the overpayment from the service provider is still in progress.

• SRD Grant payments made to ineligible applicants (in progress) – actions were taken to address this material irregularity are still in progress.

The accounting authority is committed to taking reasonable steps to implement recommendations, which should be implemented by 25 October 2023.
• Overpayment of R316 million to the service provider (resolved) - the final investigation report was submitted to the accounting authority on 12 December 2022.

The investigation and legal opinion found that the previous officials cannot be held responsible for the overpayment because the prescription period has lapsed.

The liquidation process to recover the overpayment from the service provider is still in progress.
New MIs at SASSA • Alleged fraudulent social grant payments (resolved) - an investigation was conducted by the entity’s fraud management and compliance unit.

The report identified the two officials that were involved in the processing and approval of the 87 alleged fraudulent transactions amounting to R1 823 758,09 without valid documents and attestation of the beneficiaries.
Subsequently, a criminal case was opened at Qonce police station in terms of Sec 300 of the Criminal Procedure Act: Qonce SAPS CAS 237/04/2021 against these two officials.

Both these employees were dismissed by SASSA for other issues.

One subsequently passed away.

The entity has taken all appropriate steps to resolve the MI as follows: 16 19 17 o The matter was investigated internally and subsequently handed over to SAPS.

o Obtained a legal opinion regarding possible recovery against officials involved.
o The officials had been dismissed for other instances of misconduct.

• Award to incorrect supplier (in progress) - by the date of the auditor’s report, AGSA had not yet completed the process of evaluating the response from the accounting authority.

This material irregularity will be included in next year’s auditor’s report.
AGSA made the following observations from SASSA’s MI process: • The entity withheld/ recovered R144,8 million electronically from alleged overpayments once those identified previously of not being entitled became eligible for the R350 SRD grant.

• MoUs signed with the commercial banks to perform monthly means tests for all the applicants before the SRD grant is paid to beneficiaries to prevent double dipping and payments to ineligible beneficiaries.
• SASSA investigated through the service provider appointed by National Treasury on the matters (R316 million MI and R74 million MI) affecting the previous service provider for the payment of social assistance grants and disciplinary process is currently on-going for one Sassa employee on the R74 million.

New MIs at DSD • Assets acquired at prices higher than market value (in progress) - DSD acquired Assets at prices higher than market value.
This contravened section 45(b) of the Public Finance Management Act (PFMA) and resulted in a financial loss of R1 2 million.

The accounting officer plans to take appropriate steps based on the outcome of this investigation.
AGSA reported that DSD has indicated that a private firm was appointed to investigate the possible fraud and corruption and will be providing full assessment of internal control deficiencies within the supply chain management environment and proposals on controls to be implemented to circumvent similar findings.

AGSA indicated that they will follow up on the investigation and implementation of the planned actions during their next audit.
Financial health 17 20 18 DSD’s accruals that aged longer than 30 days increased from 2021/22 or last year’s 75.3% to 99.7% in the current year (2022/23), due to the payment of the R350 grants after year-end.

Additionally, the year-end balance was in overdraft at DSD.
AGSA indicated that DSD’s cash shortfall will not impact negatively in settling of future obligations as it is due to unauthorised expenditure of over R15 billion emanating from the prior years which has not yet been cleared (awaiting SCOPA approval).

SASSA recorded a debt collection period of 72 days (over the creditor payment period of 30 days) for the financial year while the debtors’ impairment provision as percentage of accounts receivable is 98%.
IT recorded 64 days average payment of creditors because of penalties charged whereby there was still discussions with the service provider, until matter is resolved the amounts not paid are included as part of the creditors.

The NDA ended the year in deficit (expenditure more than revenue).

It incurred a deficit of R23 844 645 in the current year, however, the deficit does not mean that the entity exceeded its budget as the deficit includes non-cash items.
There were also funds from the prior year’s surplus which were retained after approval was sought from the National Treasury to fund expenditure that was disclosed as commitments in the prior year.

Thus, there was no concern noted in this regard.

Procurement and payments DSD had uncompetitive and unfair procurement processes in 2022/23 financial year.

Additionally, Preference point system and criteria were not applied by DSD.
Irregular expenditure The closing balance decreased from R1 090 billion in 2021/2022 to R462 622 billion in 2022/2023 financial year.

Fifty-six percent (56%) of irregular expenditure was condoned.

A substantial portion of old cases of irregular expenditure were finalized through condonations, clearance from irregular expenditure and removal by the accounting authority in line with the requirements of PFMA Compliance and Reporting Framework of 2022-23.
Forty-four percent (44%) of irregular expenditure was not dealt with.

The main contributor to irregular expenditure not dealt with was reported at SASSA at R424 million, being 95% of R444 million irregular expenditure.
The main contributors of R424 million are two big cases involving R281 million Integrated Community Registration Outreach Programme (ICROP) investigation still in progress, including the Public Protector investigation into the matter and the R12 million communication contract in process of requesting condonation from National Treasury.
18 21 19 For the year under review, the social development portfolio in total incurred an irregular expenditure of R39 288 320: DSD An irregular expenditure of R18 239 million was incurred due to non-compliance with supply chain management policies and procedures.

Written quotations were not submitted, price reasonability, overpayment and goods and services were not procured through a competitive bidding process.

Payments made on expired transversal contract.


SASSA SASSA incurred an irregular expenditure of R20 814 047 due to lack of adequate review, monitoring and implementation of supply chain management policies and compliance with relevant legislation.

Most of the irregular expenditure resulted from expired lease contracts still in use.

NDA The Agency incurred an irregular expenditure of R335 273 as a result of contravention of supply chain management legislation.
The procurement process followed to award the bid was not fair and transparent resulting in the procurement process compromising one or more pillars of section 217 of the Constitution.

4.1 Recommendations to the Portfolio Committee AGSA made the following recommendations to the Committee: • • • • It closely monitors the MIs identified to ensure that they are adequately addressed.

It follows up on the progress of the development and implementation of an action plan to prevent re-occurrence.
It oversees the filling of key vacancies at DSD and NDA.

It continues to actively engage with all role players within the accountability ecosystem to ensure that appropriate measures are implemented to resolve the MIs and repeat audit findings.

• It utilises the preventative control guides as developed by the AGSA to assist other oversight functions and to ask relevant questions during their oversight roles.
19 22 20 4.2 Committee observations on AGSA report • Clean audit outcome: The Committee welcomed the clean audit outcome the DSD and the NDA received.

It noted the improvements on audit findings from 2019/2020 to 2022/2023 financial years.

It was however concerned about repeat audit findings, namely, inadequate oversight by DSD over SASSA, slow response of management to address weaknesses, payment of social grants to ineligible beneficiaries, invalid lease contracts.
It wanted to know what actions can be taken to ensure that these repeat findings do not occur again.

It also wanted to know how many times can AGSA make repeat findings before an intervention can be done.

AGSA reported that there has been an improvement in audit findings, especially on newly onboarded social grant beneficiaries.
The audit findings have been on old grant beneficiaries because of the weaknesses that were identified in the processing of their grant payments, such as the means test not conducted properly.

Repeat findings are a concern especially within the grant administration, hence AGSA recommended that DSD and SASSA should conduct a detailed analysis on the root causes of the weakness (findings) by reviewing the existing policies, procedures, and improve controls and their implementation.
• R6 billion savings: The Committee raised a concern about the R6 billion that was returned to the National Treasury when the country has high levels of poverty.

• Effectiveness of AGSA enforcement powers: With the repeat findings, the Committee sought clarity on how effective AGSA enforcement is.

AGSA explained that according to Public Audit Amendment Act (No.

5 of 2018) not all expenditure qualifies as Material Irregular expenditure because there was not financial loss incurred by the institution.
It then identifies such irregular expenditure and communicates it to Accounting Authorities (AAs) concerned for them to act make regular follow-up on the actions taken by AAs.

Hence, it can determine the outcomes of the investigations.

It also makes follow-up on the cases forwarded to SAPS and Commission for Conciliation, Mediation and Arbitration (CCMA) for further investigations and at times it identifies deficiencies and provides advise to AAs accordingly.
• Expenditure vs impact: The Committee wanted to know the possibility of AGSA to conduct audit and reporting on the expenditure and the impact realized.

AGSA indicated that this can be considered for the current financial year (2023/2024) but noted that most of the expenditure of the department is at provincial level.

It will discuss this in its upcoming planning process.
20 23 21 • Change in client reporting framework: The Committee sought clarity on the reasons on the changes in the client reporting framework.

The AGSA explained that this was decision taken by National Treasury.

• Consequence management: The Committee raised a concern that the amount of R1.8 million incurred for fraudulent activity at SASSA office in Eastern Cape will not be recoverable from the implicated official.
This seems to go against consequence management both the Committee and AGSA have been calling for.

It also wanted to know if there was any consequence management imposed to SASSA officials who were implicated in the MI of R74 million and R316 million.

AGSA explained that officials involved in the R316 million were no longer employed by SASSA.

There was only one official who was implicated in the R74 million MI and disciplinary action has been instituted on him/her.
Regarding the R1.8 million fraud, AGSA explained that the matter was handled by SASSA, SAPS and the NPA.

The NPA decided that there was no prospect of recovery because of the time that has lapsed.

Hence AGSA has recommended that investigations should be conducted as soon as cases are reported.

SASSA had also received a legal opinion that would be more costly for it to recover the funds and it (AGSA) was happy with the legal opinion.
• Record keeping for officials implicated in financial misconduct: The Committee raised a concern that officials implicated in financial misconduct evade investigations by resigning and find employment in another organ of state.

It wanted to know who is responsible for keeping a record of these officials.

Is there a legislative provision that can be used to prevent this?
• Database: Out of the five (5) MI identified by AGSA, with regard to SRD grant beneficiaries, which database SASSA used vs to the one used by AGSA.

This is because SASSA had earlier reported that AGSA made a finding on the database not used by SASSA.

AGSA explained that previously it used a different data it obtained a month that SASSA made payments when SASSA had used a data from previous two months.

Even so it did identify ineligible beneficiaries.


With the current audit period it used the data from the same months SASSA made payments.

In overall, with the improved means test in the SRD grant there has been an improvement in the elimination of ineligible beneficiaries.

5.
5.

DEPARTMENT OF SOCIAL DEVELOPMENT 21 24 22 The core mandate of the Department of Social Development (DSD) originates from the Constitution of the Republic of South Africa, 1996, as well as the White Paper on Welfare (1998) and other applicable legislation.

Section 27(1) (c) of the Constitution provides for the right of access to appropriate social assistance to those unable to support themselves and their dependents.
Section 28(1) sets out the rights of children regarding, among others, appropriate care, basic nutrition, shelter, healthcare and social services.

Furthermore, Schedule 4 of the Constitution identifies welfare services, population development and disaster management as functional areas of concurrent national and provincial legislative competence.
The Department executes its mandate and performance in line with guided the National Development Plan (NDP), Medium Term Strategic Framework (MTSF), State of Nation Address (SONA) and sector plans.

The South African social development sector delivers its services in an environment marked by high levels of poverty, unemployment and inequality.
However, the Department continues to lead government efforts to forge partnerships through which vulnerable individuals, groups and communities can become capable and self-reliant participants.

The United Nations (UN) defines self- reliance as the social and economic ability of an individual, a household or a community to meet essential needs (including protection, food, water, shelter, personal safety, health and education) in a sustainable manner and with dignity.
It further states that self-reliance, as a programme approach, refers to developing and strengthening livelihoods of persons of concern, and reducing their vulnerability and long-term reliance on humanitarian/external assistance.

5.1 DSD POLICY PRIORITIES ALIGNMENT WITH OTHER FRAMEWORKS In executing its mandates, government departments and entities are guided the NDP, MTSF, State of the Nation (SONA) and sector plans.
The Department contributes to the following priorities of the MTSF 2019-2024: • Priority 1: A capable, ethical and developmental state underpins; • Priority 2: Education, Skills and Health; • Priority 4: Consolidating the Social Wage through Reliable and Quality Basic Services; • Priority 5: Spatial Integration, Human Settlements and Local Government.
National Development Plan (NDP) 22 25 23 These priorities are in line with the (NDP) vision 2030, which inter alia promotes social protection, defined by: • Protective measures to save lives and reduce levels of deprivation; • Preventative measures which help people to avoid falling deeper into poverty and reduce their vulnerability; • Promotive measures which enhance the capabilities of individuals, communities, and institutions; • Transformative measures which tackle inequities through changes in policies, laws, and budgets; and • Developmental and generative measures, which increase the poor’s consumption, promoting local economic development.
State of the Nation Address, February 2022 The February 2022 SONA outlined the following policy objectives in the area of social development: Policy objectives Explanatory notes Ending gender-based violence (GBV) Government committed to intensifying the fight against gender-based violence and femicide through implementation of the National Strategic Plan on gender- based violence and femicide (GBVF) and other measures to promote the empowerment of women.
Social security A need to improve payment systems and sustainability of Job creation the Social Relief of Distress grant Expanding Public and Private Employment: Social Employment Fund would create a further 50,000 work opportunities using the capability of organisations beyond government, in areas such as early childhood development, and tackling gender-based violence among others.
23 26 24 5.2 OVERVIEW OF THE ANNUAL FINANCIAL AND NON-FINANCIAL PERFORMANCE OF THE DEPARTMENT OF SOCIAL DEVELOPMENT FOR 2022/2023 FINANCIAL YEAR 5.2.1 Financial Performance Table 2: Expenditure per programme, 2022/2023 vs 2021/2022 Programme P1 :Administration P2: Social assistance P3: Social Security Policy And Administration P4: Welfare Services Policy Development And Implementation Support P5: Social Policy And Integrated Service Delivery TOTAL Economic Classification Current Payments Compensation of Employees Goods and Services Transfers and Subsidies Departmental agencies and accounts Foreign governments and international organisations Non-profit institutions Households Payments of Capital Assets Payments of Financial Assets TOTAL Voted Apr – Jun 2022 R’000 July-Sept 2022 R’000 Oct-Dec 2022 R’000 Actual Jan - Mar 2023 R’000 Total Spending R’000 540,485 239,132,592 121,217 52,317,517 142,378 58,400,242 147,302 62,210,854 128,179 539,076 60,108,806 233,037,419 99.74% 97.45% % Spent Available R’ 512,875
-8,727 0 8,247 94.75% 97.67% 69.87% 97.53% 2,308 5,557,915 3,971 538,000 6,133,028 The DSD was allocated an adjustment budget of R247 854 892 billion in 2022/23.
It spent 97.53% (R241 721 864 billion) of its allocated budget.

It incurred an underspending of R6.133 billion from its revised allocated budget.

This is much higher compared to an underspending of R1.86 billion in 2021/2022.

Out of the R6.

133 billion, the Social Relief of Distress Grant (SRD grant) accounts for the saving of R4.

308 billion.

On the same grant, the department overspent by R15 billion in 2019/2020.
This was when the grant was initiated, and the department had no budget to pay the grant it as it at the end of the financial year.

National Treasury authorised the Department to pay it from the overdraft.

This is the expenditure that is yet to be approved by the Standing Committee on Public Accounts.

Virements 24 27 25 Virements is the process of moving money from one financial account or part of a budget (a plan for how the money will be spent) to a different one.
At the close of the 2022/23 financial year, the DSD made the following virements: Programme 1 – Administration: R26.816 million R26.816 million was approved to be shifted from Programme 3 to Programme 1 to fund the increased expenditure related to the personnel costs as a result of misalignment of the budget structure, prior year accrual expenditure as a result of increased expenditure related to the payment of the of the Telkom Toll-Free line as well as centralized payment of the IT refresh in the procurement of laptops for social development employees.
Programme 3 – Social Security Policy and Administration: R26.816 million An amount of R26,816 million was approved to be shifted from Programme 3 to Programme Administration for increased spending programmes during the 2022/23 financial year.

Unauthorised, fruitless and wasteful expenditure Reasons for Irregular Expenditure and Unauthorised Expenditure.

• Non-compliance with the Public Finance Management Act, Act 1 of 1999.

• Supply Chain Management processes were not followed.
Reasons for Fruitless and Wasteful Expenditure • Damages to hired vehicles • Hotel no-show 5.2.2 Overview of target performance Figure 1: Performance rate over three years 25 28 26 For 2022/23, the DSD managed to achieve 85. of its planned targets.

It had set to achieve 67 targets in 2022/23 but managed to achieve 57.

This is a progression compared to the 81% performance rate in 2020/21 and 2021/22.

This is an indication that the department is starting to improve on its performance.
However, there is room for improvement as there is still no corelation between financial spending and DSD target performance.

The Department decreased its targets from 67 targets in 2021/22 to 65 in 2022/23 financial year.

This decision was based on its newly adopted mantra which is to “build cohesive, resilient families and communities by investing in people to reduce poverty and vulnerability and create sustainable livelihoods”.
The DSD has shifted its focus on measuring the impact and the difference it makes to the lives of those it serves to promoting evidence-based planning, research and an impact agenda, which enables it to quantify investments and thereby promote social accountability.

Programme 1: Administration The objective of this programme is to provide leadership, management and support service to the Department and the social development sector.
Table 3: Programme 1: Administration Total targets set in Annual Performance Plan (APP) Total targets in Annual Report 14 14 26 29 27 Targets achieved in Annual Report Targets not achieved Performance success rate Total budget spent Financial expenditure rate 11 6 78.5% R 539.8 million 99.7% The Department spent R539.08 million, which is 99.7% of the final budget of R 540.5 million.

It set itself 14 targets, of which it achieved a total of 11.
In terms of thematic area, targets not achieved relate to drafting the relevant policy frameworks or draft legislation to be tabled to Cabinet.

These are: • Government Wide Strategy on the Employment of Social Service Professionals not submitted to Cabinet was due to external dependencies.

• SASSA Amendment Bill was not submitted to Cabinet, since by the end of the financial year, it still with the Office of the Chief State Law Adviser for preliminary opinion.
• Victim Support Services Bill was not submitted to Cabinet, since by end of financial year it was still in process of being considered by NEDLAC.

• Non-Profit Organisation (NPO) Amendment Bill not tabled at Cabinet.

It was withdrawn due to promulgation of the General Laws Amendment Act, 2022, which rendered the NPO Bill obsolete.

The Department developed Regulations to replace the Bill.
Programme 2: Social Assistance This programme provides social assistance to eligible beneficiaries in terms of the Social Assistance Act 13 of 2004, and its regulations.
Table 4: Programme 2: Social Assistance Total targets set in Annual Performance Plan (APP) Total targets in Annual Report Targets achieved in Annual Report Targets not achieved Performance success rate Total budget spent Financial expenditure rate 1 1 0 1 0% R 233.1 billion 97.5% The Social Assistance programme did not achieve its target to transfer R248 billion to eligible beneficiaries.

Instead, transfers totalled R239 billion.


This deviation was due to an amount of R6 27 30 28 billion that was declared a saving on the SRD R350 grant during the 2022, as reported earlier in the report.

Programme 3: Social Security Policy and Administration This programme is responsible for the provision of social security policy development, administrative justice of social grants, and the reduction of incorrect benefits payments.
Table 5: Programme 3: Social Security Policy and Administration Total targets set Annual Performance Plan (APP) Total targets in Annual Report Targets achieved in Annual Report Targets not achieved Performance success rate Total budget spent Financial expenditure rate 8 8 6 2 75% R7.5 billion 99.8% The 75% target rate achievement should be viewed within the context of DSD having spent 99.8% of its allocated budget.
DSD achieved its target of developing a consultations Report on the draft Policy on Integrating Children’s Grants Beneficiaries with Government Services.

A Consultations report on the draft Policy on Maternal Support for Vulnerable Pregnant Women and Children was developed for 2022/23 financial year.

The draft White Paper on Comprehensive Social Security was not developed.
Further instead of the 70% target for adjudicating of appeals within 90 days of receipt, the Department managed 57.3% of appeals within the required timeframe.

Failure to meet the target is attributed higher volumes due to the amendment to the Social Assistance Act which allows direct access to lodge appeals with the Independent Tribunal, and delays in the finalisation of appointment processes of new members to serve on the Tribunal.
28 31 29 Programme 4: Welfare Services Policy Development and Implementation The aim of this programme is to create an enabling environment for the delivery of equitable developmental welfare services through the formulation of policies, norms and standards and best practices and the provision of support to the implementation agencies.
Table 6: Programme 4: Welfare Services Policy Development and Implementation Total targets set in Annual Performance Plan (APP) Total targets in Annual Report Targets achieved in Annual Report Targets not achieved Performance success rate Total budget spent Financial expenditure rate 24 24 23 1 95.8% R2.95 billion 94.2% A total of 94.2% of the programme allocation was spent.

The Department reported on all 24 targets set in the 2022/23 APP.
Out of a total of 24 stated targets, 23 targets were achieved – resulting in 95.8% success rate.

The target not achieved, was linked to actual performance requiring submission to, or approval from Cabinet.

The Draft Prevention of and Treatment for Substance Use Disorders Policy was not submitted to Cabinet for approval to gazette for public comment.

DSD reported that this will be prioritised in the next financial year.
Achievements under this programme included: • The Revised White Paper on Families to the Technical Working Group for Forum of South African Directors-General (FOSAD) was developed as envisaged.

• Instead of capacitating 20% of the sector workforce on the Childrens Act, the Department capacitated 40% of the workforce.

• The Anti-Gangsterism Strategy was implemented by capacitating nine (9) high-risk districts.
29 32 30 • A total of four (4) provinces were capacitated on the National Drug Master Plan (NDMP), namely, Eastern Cape, Gauteng, North- West and Northern Cape.
The following Departments from Clusters were also capacitated to implement the NDMP namely, Department of Trade, Industry and Competition (DTIC), South African Police Service (SAPS), Department of Co- operative Governance and Traditional Affairs (COGTA), Department of Correctional Services (DCS), Department of Justice and Constitutional Development (DoJ&CD), National Youth Development Agency (NYDA), South African Health Products Regulatory Authority (SAHPRA), Department of Higher Education and Training (DHET) and South African Revenue Service (SARS).
Programme 5: Social Policy and Integrated Service Delivery The programme’s responsibility is to support community development and promote evidence-based policy making in the Department and the Social Development Sector.
Table 7: Programme 5: Social Security Policy and Administration Total targets set in Annual Performance Plan (APP) Total targets in Annual Report Targets achieved in Annual Report Targets not achieved Performance success rate Total budget spent Financial expenditure rate 21 21 20 1 95.2% R360.6 million 99.5% The programme spent R360.6 million (99.5%) of its allocation and managed to achieve 95.2% of its set targets for 2022/23.
The following are some of the targets achieved for this programme: • Submitted the draft National Community Development Policy to Social Protection, Community and Human Development (SPCHD) Cluster for approval as planned for the year under review.

• Processed 95.2% NPO annual reports within 2 months of receipt, against a target of 80%.

• Capacitated stakeholders in all provinces to implement the NPO Mentorship Model.
• Linked 29 297 Social Protection Beneficiaries to Sustainable Livelihoods opportunities.

30 33 31 5.3 Human Resources The department had set a target to reduce the vacancy rate by 6% but it did not meet it, as the filling of the vacant posts required a prioritisation process of identifying critical posts to be filled due to the reduction of the department’s compensation budget.
Based on the available funding DSD prioritised the filling of key leadership positions resulting in the Department having a seventeen percent (17%) vacancy rate on 31 March 2023.

Also, due to the reduction of the compensation of employees budget over the medium term expenditure framework, the department did not comply with the requirement to advertise vacant posts within 6 months and have them filled within 12 months.

6.
6.

THE SOUTH AFRICA SOCAL SECURITY AGENCY (SASSA) The mandate for the South African Social Security Agency (SASSA) is to ensure the provision of comprehensive social security services against vulnerability and poverty within the constitutional and legislative framework.

As per this mandate, SASSA is primarily responsible for implementing the Medium-Term Strategic Framework’s (2019 – 2024) Priority 3: Consolidating the Social Wage through Reliable and Quality Basic Services.
It continues to improve the coverage of the social assistance programme including for eligible refugees.

For the year under review, SASSA increased the coverage of the social assistance programme from 18 677 339 to 18 829 716 as at the end of March 2023.

SASSA also has a role to play in the implementation of the National Development Plan (NDP) priorities for the social sector.
It implements the following priorities: • Creating a comprehensive social protection system to support those most in need, including children, people with disabilities and the elderly.

• Protection of vulnerable groups and citizens against worst effects of poverty by 2030.
• Active participation in the economy and society for those who are unemployed and under- employed through labour market activation measures, employment services, income support programmes and other services to sustain and improve quality of life.
31 34 32 • Improving efficiency in the delivery of services, addressing exclusions by identifying and reaching those who are entitled to the existing benefits of social protection, reducing the administrative bottlenecks that prevent people from accessing benefits.

It also contributes towards the achievement of priority 3: Consolidating the Social Wage through Reliable and Quality Basic Services, of the Medium-Term Strategic Framework – 2019 – 2024.
SASSA also has a critical role to play in implementing the annual priorities identified in the State of the Nation Addresses (SONA), mentioned earlier in the report.

Since the outbreak of the Covid 19 pandemic in 2020, in 2021 SASSA was tasked with administration and payment of the Special Covid 19 Social Relief of Distress Grant (SRD grant) to the unemployed South Africans of working age, 18 – 59 years.
Amidst all the challenges of implementing this grant, by the end of March 2023 approximately more than 8.5 million SRD grant applications were processed compared to 10.2 million beneficiaries in 2021/2022 financial year.

The Department of Social Development reported in its Quarter 4 report presented to the Portfolio Committee on 31 May 2023 that the number of beneficiaries decreased due to the introduction of stringent regulations that excluded a lot of applicants.
This resulted in a R9.7 billion saving, which was returned to National Treasury.

OVERVIEW OF FINANCIAL AND NON-FINANCIAL PERFORMANCE OF THE SOUTH AFRICAN SOCIAL SECURITY AGENCY (SASSA) FOR 2022/2023 FINANCIAL YEAR 6.1.1 Financial Performance SASSA functions through two main programmes, namely, Programme 1: Administration and Programme 2: Benefits Administration & Support.

Table 8 below shows the medium-term estimates and the overall budget cuts.
The medium estimate for 2022/2023 financial year was cut by R817 535 million, which was a 6% decrease from R7 963 901 billion allocated for 2021/2022 financial year.
32 35 33 Table 8: SASSA MTEF Budget estimates 2018 MTEF Allocation Reduction 2019 MTEF Allocation Reduction 2020 MTEF Allocation Reduction 2021 MTEF Allocation % Change on 2020 MTEF baseline -3% -2% % y/y growth 2020/2021 ( R ) 2021/2022 ( R ) 2022/2023 ( R ) 2023/2024 ( R ) 2024/2025 ( R ) 8 646 794 (533 173) 8 124 621 (406 200) 7 718 421 (229 639) 7 488 782 7 910 237 8 316 822 (817 535) 7 499 287 -10% -6% 7 570 261 0% 1% -4% 9 122 051 (500 000) 8 622 051 (512 300) 8 104 751 (140 850) 7 963 901 -2% 6% The table further shows that despite the implementation of the SRD grant, the budget (administration costs) of SASSA has not factored in the administrative costs associated with the implementation of this grant.
It was only in 2021/2022 budget allocation that an additional R500 000 million was allocated for the administration of the grant.

For the 2022/2023 financial year, SASSA had to reprioritise funds within the approved budget allocation to fund the administrative costs of the SRD grant payment.
The Agency reported that the bulk (90%) of the budget expenditure is allocated for the payment of several contracts it entered with third parties for vital operational services such as payment of grants to beneficiaries, information and communication technology services, security services, cleaning and sanitary services, office accommodation, medical assessments, and beneficiary record management.
The remaining 10% of the budget is allocated for other essential operational requirements such as communication, travel and subsistence and capital assets.

6.1.2 Budget expenditure per programme, 2022/2023 The table also shows that in 2022/2023 both programmes underspent by R278 546 compared to R628 945 million in 2021/2022.

The overall budget expenditure for 2022/2023 was R7 137 033 (96%), which was slightly less compared to R7 334 956 in 2021/2022 financial year.
Table 9: Budget expenditure per programme, 2022/2023 2022/23 2020/21 33 36 34 Programme R’000 Final Actual Variance % % Appropriation Expenditure Expenditure Expenditure R’000 Administration 3 003 836 Benefits Administration 4 411 743 R’000 2 871 452 4 265 581 R’000 -132 384 -146 162 96% 90% 96% 99% & Support Total 7 415 579 7 137 033 -278 546 96% 96.% Unlike in 2021/2022 financial year, wherein underspending was mainly attributed to Compensation of Employees (CoE) due to funded vacant positions not filled, in 2022/2023, the Agency spent 100% on this economic classification.
The 4% underspending of the total budget was incurred under Goods and Services.

The Agency reported that the bulk of the underspending was mainly on the budget allocation towards services in relation to the disbursement of social grants, that is cash handling fee.

This was attributed to many beneficiaries choosing to use the National Payment System, which comprises of banks’ auto teller machines (ATM) and merchants’ point of sale.
These are the least costly payment channels compared to cash pay points and over-the counter payment channels.

Underspending was also attributed to cost efficiencies realized from the insourcing of the fraud investigations.

The earmarked budget allocation was not fully utilized.

Underspending also occurred in other items such as medical assessments, fleet and travel and subsistence.
6.2 NON-FINANCIAL PERFORMANCE Figure 3 below shows SASSA’s performance trends between 2021/2022 and 2022/2023 financial years.

In 2022/2023, SASSA had significant performance improvement of 76% compared to 73% in 2021/2022 and 74% in 2020/2021 financial years.
However, it important to note that in 2022/2023, it had set less targets, 34, compared to 40 targets in 2021/2022 and 50 targets in 2020/2021 Figure 3: Performance Trends 34 37 35 60 50 40 30 20 10 0 Performance Plan 202/2021 - 2022/2023 50 37 74% 13 40 29 73% 11 34 26 76% 8 2020/2021 2021/2022 2022/2023 No.of targets planned No.

of targets achieved No.


of targets achieved not achieved % performance 77% 76% 75% 74% 73% 72% 71% 6.2.1 Performance information by programme Programme 1: Administration The purpose of this programme is to provide leadership, management and support services to SASSA.
Table 10 Programme 1 targets and financial performance Total targets in Annual Report Targets achieved in Annual Report Targets not achieved Performance success rate Total budget spent Financial expenditure rate 17 13 4 76.% R2 871 452 billion 96% Under this programme, SASSA had planned to achieve 17 targets and it managed to achieve 13 targets (76%).

The overall expenditure for the programme stood at 96%.
This programme mainly contributes to the following NDP, MTSF targets: • NDP: Improving efficiency in the delivery of services, addressing exclusions by identifying and reaching those who are entitled to the existing benefits of social 35 38 36 protection, reducing the administrative bottlenecks that prevent people from accessing benefits.

• MTSF: Consolidating the social wage through reliable and quality basic services.
The key targets achieved related to the above-mentioned priorities include automation and digitisation of the business processes.

A new web-based front-end for the SOCPEN system was implemented in all regions to enable the processing of the Child Support Grant (CSG), Foster Child Grant (FCG) and Old Age Grant (OAG) applications.

This is an important achievement as it moves the application process from being paper based/manual processes, thus improving service delivery.
It also addresses the challenge of missing files and preservation of beneficiary records.

The 2021 July unrest, wherein SASSA offices together with client files were burnt in KwaZulu-Natal underscores the importance of this initiative.

The implementation of the SRD grant was faced with a challenge of lack of accuracy and timing of the databases used for the assessment for eligibility.
Databases from organisations SASSA relies on, such as Unemployment Insurance Fund (UIF), South African Revenue Service (SARS) and Government Employee Pension Fund (GEPF) were not always received by SASSA on time for the payment cycle and were often found by the auditors to have discrepancies.

To this end, SASSA established a system interface with GEPF, UIF and the Department of Co- operative Government and Traditional Affairs.
The Agency, however, did not achieve the NDP and MTSF related targets which involved developing and implementing an office accommodation improved strategy in 18 offices, two offices per region.

The strategy focuses on improving physical accessibility, branding services and network connectivity.

The strategy was developed and implemented in 13 offices.

The poor performance in Eastern Cape was due to poor performance by a service provider, leading to the termination of the contract.
In Mpumalanga, it was due to delays in the finalisation of tenant installations.

In Northern Cape and North West poor performance was due to delays by landlords in signing Service Level Agreements to grant permission for the renovations.

The Agency also did not achieve the target to have the reviewed business processes approved.
However, these milestones were achieved – operating model roadshows were conducted, draft macro-organisational structure was developed, business process costing was developed and completed, and standard operating procedures were developed.

36 39 37 Other important targets achieved include a 43.75% (R345 million of R789 million) recovery of the social assistance debts, which was submitted to the Department of Social Development and National Treasury for a write off.
Out of the R345 million, a significant R334 million was written off.

The Agency had also planned to finalise 75% financial misconduct cases within 120 days, and it managed to finalise 94.80% (164 of 173).

It, however, did not achieve its target to finalise 95% financial misconduct cases (backlog).

It finalised 84.77% (167 of 197) cases.

This was attributed to delays in the implementation of disciplinary corrective measures due to the complexity of some cases.
The Agency finalised 96.30% (469 of 487) reported cases of fraud and corruption.

The target was to finalise 80% cases.

SASSA reports that the implementation of the improved case management strategy led to the fast-tracking of investigations.

Additionally, 96% (7 543 of 7 875) of vacant positions were filled, marking an over-achievement from the planned 90%.

This was attributed to the improved implementation of the recruitment strategy.
All these targets address the audit findings of the Auditor-General of lack of consequence management for financial misconduct cases and delays in finalisation of investigations.

Another important target achieved related to the implementation of the Integrated Communication and Marketing Programmes to improve customer communication, organizational reputation, and communication on strategic interventions.
A total of 1 792 programmes were implemented which focused on CSG Top-Up; intake of eligible children under the age of 1 year; COVID-19 SRD grant; elimination of open cash pay points; online grant application; online medical assessment bookings; and SRD regulations.

Despite this reported achievement, lack of communication to the public was still observed when system glitches affected the withdrawal of social grants between October – December 2022 and September 2023.
These challenges could be traced to a Ministerial decision that was taken on 29 June 2022 for the South African Post Office (SAPO) to cede all its rights and obligations of the Management Service Agreement it entered into with SASSA to Postbank.

This decision came into effect on 1 October 2022.

Furthermore, there is still general lack of understanding of the Child Support Grant Top Up that has resulted in its slow uptake, as it will be reported under Programme 2 performance report below.
37 40 38 Programme 2: Benefits Administration and Administration and Support The purpose of this programme is to provide a grant administration service and ensures that operations within SASSA are integrated.

It also ensures implementation of the full value chain of grants administration.
Table 11 Programme 2 targets and financial performance Total targets in Annual Report Targets achieved in Annual Report Targets not achieved Performance success rate Total budget spent Financial expenditure rate 17 13 4 76% R4 265 581 billion 90% For the year under review SASSA had set to achieve 17 targets under this programme.

It managed to achieve 13 targets (76%).

It spent 90% of its allocated budget.


This Programme contributes towards achievement of the following government priorities (encompassing SONA and NDP priorities): • Protection of vulnerable groups and citizens against the worst effects of poverty by 2030.
• Improving efficiency in the delivery of services, addressing exclusions by identifying and reaching those who are entitled to the existing benefits of social protection, reducing the administrative bottlenecks that prevent people from accessing benefits.

Many studies have confirmed that social grants contribute significantly towards poverty eradication as a source of income in poor households.
SASSA annual report cites the General Household Survey, 2021, that reported that social grants are the second most important source of income (51.0%) for households after salaries (59.4%) and the main source of income for about one-fifth (24.4%) of households nationally.

A larger percentage of households received grants compared to salaries as a source of income in Free State (60.0%), Eastern Cape (63.7%), Limpopo (65.7%) and Mpumalanga (66.2%).
Grants were most important as a main source of income for households in Eastern Cape (42.0%) and Limpopo (35.2%).

38 41 39 Covid 19 pandemic and deteriorating economic environment have resulted in high levels of unemployment and consequently poverty in the country.

This has resulted in more people meeting the eligibility criteria for receiving social grants.

Hence, SASSA’s target to approve 1 200 000 social grants applications was exceeded to 1 688 045 applications approved.
This increased the number of people receiving social grants to 18 829 716 from 18 677 339 in 2021/2022 financial year.

SASSA also achieved its target of having 65% of eligible children below the age of 1 in receipt of children’s grants.

A total of 509 430 of 776 715 (65.59%) eligible children were receipt of children’s grant.

It also achieved its target of processing 100% of SRD grant applications.

It also processed 100% (13 826 012) SRD grant applications.
SASSA did not achieve its target to process 95% of new grant applications taken through face- to-face interface within 5 days.

It managed to process 89% (1 640 499 of 1 840 623) and this was due to the impact of loadshedding and its impact on network connectivity.

It however, reports that it exceeded its target of processing 70% online applications within 10 days by processing 17 011 of 22 405 (75%) applications.
Despite the increase in the uptake of social grants, mainly driven by SRD grant, CSG and OAG, over the past, from 2018/2019 the number of beneficiaries receiving Foster Child Grant has been decreasing from 386 019 million in 2021/2022 (prior years it was just above 400 000 million) to 274 130 million in 2022/2023 financial year.

This could be attributed to the administrative bottlenecks that excluded eligible children from the foster care system.
The implementation of the Social Assistance Amendment Act (No.

16 of 2020) introduced the CSG- Top Up grant for orphaned children, which aimed to divert these children from the foster care system to receive the Child Support Grant.

However, SASSA did not achieve its target of having 191 200 applications for CSG Top-Up in payment for orphaned children.

It only managed to have a very low 37 416 CSG Top-Up in payment.
It attributes this to Regulations on the Act being promulgated in the first quarter of the financial year and this impacted on the marketing of the grant.

• Active participation in the economy and society for those who are unemployed and under-employed through labour market activation measures, employment services, income support programmes and other services to sustain and improve quality of life.
39 42 40 With the introduction of the Special Covid 19 SRD grant, government aimed to provide income support to the unemployed 18-59 year olds (working age).

SASSA reported that due increasing unemployment the uptake of this grant per month as percentage of individuals increased to 35.7% in 2021.
However, as highlighted earlier in this report, the number of beneficiaries for this grant decreased from 10.2 million in 2021/2022 to more than 8.5 million in 2022/2023 due to stringent regulations that excluded a lot of beneficiaries, at the time when the country is experiencing high poverty levels and increasing unemployment.

6.3 Human resources SASSA had set a target to fill 90% of vacant funded posts and it managed to fill 96% (7 481) posts.
It attributes this to an improved implementation of the recruitment strategy.

In addition, 56 posts were filled through promotions, 30 employees were appointed on contract, 10 are interns, 10 Expanded Public Works Porgramme (EPWP) workers and 11 are runners, bringing the total number of employees, both contract and permanent to 7 542.

The Agency also managed to fund 133 critical posts with the limited Compensation of employees budget.

Critical posts at senior management have remain vacant for years.
These are regional manager positions at five regional offices – Western Cape, Northen Cape, Mpumalanga, Limpopo and Free State and this is attributed to budget constraints.

At the head office, these positions remain vacant – Chief Operations Management, Internal Audit and Risk Management, Corporate Services and Grants Operation.
Human resources the Committee needs to note and consider for its oversight: • Government Pensions Administration Agency (GPAA) does not approve applications for post-retirement medical aid/subsidy.
This is per the directive from the Department of Public Service and Administration that only the staff who were transferred from the Department of Social Development to SASSA in 2006, through the application of Section 197 of the Labour Relations Act of 1995, would be eligible for subsidised postretirement medical aid/benefit.

SASSA employees who joined SASSA on or after the 1 April 2006 do not qualify for subsidised medical aid/benefits when they retire.
The Agency attributes this challenge to the incorrect interpretation of Chapter 3, Section 7 (4) of the SASSA Act (Act 40 43 41 9 of 2004) which states that a “person employed by the Agency becomes a member of the Government Employees Pension Fund” mentioned in section 2 of the Government Employees Pension Law, 1996 (Proclamation No.

21 of 1996), and is entitled to pension and retirement benefits as if that person were in service in a post classified in a division of the public service”.
• The Office of the Auditor General has made an adverse finding against the Agency for non- compliance with the requirements of the Unemployment Insurance Fund which required all employers (including government departments and related entities/institutions to be registered for the Unemployment Insurance Fund (UIF) in terms of Unemployed Insurance Act, 63 of 2001, as amended.
Due to reliance on the PSA in terms of various collective agreements regulating the employees’ conditions of services and related benefits, and the fact that the Agency operates like one of the departments as per the Determination signed between DSD and DPSA in 2006, the Agency could not register as an employer in terms of the UIF Act’s provisions.
The concerning factor is that if it becomes unavoidable for the Agency to be registered as the employer in terms of the UIF Act, there would be huge financial implications and unaffordability to both the Agency and its employees as each would be expected to contribute at least 1% of the total employees’ earnings monthly towards the UIF.

The situation could be worse if the Department of Employment and Labour requires that arrears be payable by those institutions which did not comply.
In addressing both matters, the Agency has engaged the Department of Public Service and Administration (DPSA) to determine if UIF has been implemented throughout the public service/sector.

These matters were reported to the Committee at the workshop it held with the social development portfolio in March 2023.

7.
7.

THE NATIONAL DEVELOPMENT AGENCY (NDA) MANDATE 41 44 42 The National Development Agency (NDA) is mandated to contribute towards the eradication of poverty through supporting civil society organisations (CSOs) by funding them to implement development projects in poor communities, as well as strengthening their institutional capacity.
National Development Plan The NDA, as a public entity, reporting to the Department of Social Development, has aligned its strategy to respond mainly to chapter 11 of the NDP on social protection.

The NDP vision 2030 has a long-term perspective to eliminate poverty, reduce inequality and unemployment by 2030.

The alignment is informed by the NDA mandate of contributing towards the eradication of poverty in poor communities.
Medium Term Strategic Framework (MTSF) In the attainment of the 2030 goals, the MTSF identifies the priorities to be undertaken during the 5-year implementation plan (2019-2024).

The NDA has adopted the outcome of the MTSF 2019-2024 that focuses on civil society organisations in the most deprived and prioritised districts in South Africa, and its main contribution is building capacity at these organisations.

Outcome 4: Social Compact and engagement with key stakeholders.
State of the Nation Address 2022 During 2022/23, in fulfilling the mandate of mobilising resources and acting as a conduit for disbursement of the same funds to CSOs in the pursuance of their developmental aspirations, the NDA has raised R54.5 million worth of financial and non-financial resources in the financial year under review.

These resources have benefitted CSOs in strengthening their ability to manage their CSOs better and to comply with legislative authorities.
The NDA, through the DSD Criminal Asset Recovery Account (CARA) Victim Empowerment Programme, continued to disburse funds to the value of R 70,55 million since programme inception in the 2020-21 to 296 CSOs involved in Gender-Based Violence and Femicide (GBVF) in the nine (9) Provinces in order to continue services in communities.
42 45 43 7.1 OVERVIEW OF FINANCIAL AND NON-FINANCIAL PERFORMANCE OF THE NATIONAL DEVELOPMENT AGENCY (NDA) 2022/2023 FINANCIAL YEAR 7.1.1 Financial performance Table 12: Appropriation statement Programme 2022/23 2021/22 Final Budget Actual Under/ Final Actual Spending Over Budget Spending spending Over/ under spending R’000 Governance and Administration 120 748 113 827 6 921 123 719 106 219 17 500 CSO Development Research and 143 823 135 302 8 521 138 740 116 007 22 733 Development 13 335 9 306 3 919 10 987 7 496 3 491 TOTAL 277 796 258 435 19 361 273 446 229 722 43 724 The NDA secured a final appropriation amounting to R277.8 million for 2022/23.
Expenditure amounted to R258.4 million, resulting in under-expenditure of R19.4 million.

Although overall expenditure for 2022/23 stands at only 93.1%, it is a significant improvement from the 84.1% attained the previous year (2021/22).
In the current financial year, spending for the Governance and Administration programme was 94.3%, (compared to 85.9% in 2021/22), while CSO Development programmes spent 90.9% (as compared to 83.6% in 2021/22) and the Research and Development programme spent 70.4% of its allocation (compared to 68.2% in 2021/22).

The CSO Development programme is critical in the fulfilment of the NDA primary mandate.
This programme contributes directly to the NDP aspiration of eliminating poverty and reducing inequality by 2030.

While its spending increased compared to the previous year, given its critical mandate, actual expenditure of only 90.9% for 2022/23 requires continued closer monitoring.
Table 13: Statement of Financial Position as of 31 March 2023 43 46 44 ASSETS Current Assets Non-current Assets Total Assets LIABILITIES Current Liabilities 2022/23 2021/22 103,224,418 8,733,708 111,958,126 150,248,825 8,356,833 158,605,658 74,837,571 79,118,916 Total Liabilities 74,837,571 Net Assets 37,120,555 Accumulated Surplus 37,120,555 79,545,971 79,118,916 79,545,971 79,486,742 79,059,687 79,486,742 79,059,687 There was a decrease in the entity’s liabilities R74.8 million (compared to R79.1 million previously; R79.5 million restated).
During 2022/23 financial year current assets decreased to R103.2million from R150.3 million, in the previously financial year (2021/22).

The NDA ended the 2022/23 financial year with an accumulated surplus of R37.1 million, compared to R79.4 million (R79.1 million restated) at the end of the previous financial year.
Table 14: Statement of Financial Performance as at 31 March 2023 REVENUE 2022/23 2021/22 Non-exchange revenue Exchange revenue Total revenue EXPENDITURE Mandate expenses Administration expenses 231,393,000 6,664,164 238,057,164 (144,608,377) (117,293,432) 270,803,243 4,775,364 4,307,991 275,578,607 (123,502,439) (106,219,184) (106,178,866) Total expenditure (261,901,809) (229,721,623) 44 47 45 Surplus (Deficit) (23,844,645) 45,856,984 45,429,929 229,681,305 The highlighted figures are the restated figures in the Annual Report (2022/23) and the non-hihglihted are from the previous Annual Report (2021/22).
Revenue remained steady though exchange revenue increased from R4,7 million (R4.3 million restated) in 2021/22 to R6.7 million.

Expenditure increased from R229.7 million to 261.9 million.

The increase in the entity’s expenditure for the financial year relates mainly to spending for training third parties (venue and related expenses, as well as UIF COVID-19 stipends for attendees).

There were no reasons given for this by NDA.

This resulted in the surplus decreasing from R45.9 million to R23.8 million.
7.1.2 Target performance The NDA set itself a total of 12 targets in its APP 2022/23.

It managed to fully achieve 9 targets (75%), while 3 (25%) targets were not achieved.

Below is the NDA’s target performance per programme for the 2022/23 financial year.
Programme 1: Governance and Administration Table 15: Programme 1: Achievement of targets Total targets set on Revised Annual Performance Plan (APP) Total targets reflecting on the Annual Report Targets achieved in Annual Report Targets not achieved Total budget spent 4 4 1 (25% success rate) 3 R 113.8 million The NDA had set out to achieve four (4) targets under this Programme and managed to achieve 1 target or (25%) with an actual expenditure of R 113.8 million during 2022/23 financial year.
The three (3) or 75% performance targets that were not achieved under the programme during the year under review include: 45 48 46 • Targets related to approval and implementation of the ICT strategy and architecture to be aligned to NDA business model.
NDA reported that this non achievement was due to the delay in the finalisation of the turnaround strategy, and that this will be carried over to the current financial year (2023/24) after the finalisation and approval of the turnaround strategy by the Board.

However, the service provider was appointed and could only develop the AS-IS assessment of the current NDA ICT Architecture.

• The other KPI related to approval and implementation of new organisational structure aligned to NDA business model.
• NDA had an amount of R175 million in irregular expenditure which dated back to the 2012/2013 financial year, National Treasury condoned R98.8 million in March 2022.

The NDA indicated in their annual report that this reduced the balance of these irregular expenditure contracts worth R 77.3 million remained in the annual financial statement of the NDA and carried over to the 2022/2023 financial year for processing and conclusion.
NDA did not manage to reduce by 80% the cumulative balance of Irregular, Fruitless and Wasteful (IFW) expenditure reported in prior year annual financial statements.

The annual target was not met due to the lengthy processes of consequence management and investigations required by IFW frameworks to meet the requirements for condonation and removal of IFW expenditure.
NDA reported that a total of R65 235 528.28 which represents 82.8% of the total Irregular, Fruitless and Wasteful expenditure of R 78,752,277.99 is in the process of finalisation towards request for condonation.

The NDA managed to achieve one (1) of the most important targets, which were also reported on in the quarterly reports: • NDA approved the NDA Strategic Partnership Model to be aligned to NDA business model as envisage for 2022/23 financial year.
Programme 2: CSO Development Table 16: Programme 2: Achievement of targets Total targets set on Revised Annual Performance Plan (APP) Total targets reflecting on the Annual Report Targets achieved in Annual Report Targets not achieved 5 5 5 (100% success rate) 0 46 49 47 Total budget spent R135.3 million The programme had a good performance wherein all five (5) targets were achieved or over- achieved in 2022/23.

The targets were achieved with a total budget of R135.3 million.
Some of the important targets achieved include: • During the year under review, the NDA exceeded its target of raising R35 million by R68.5 million which came to a total of R103.6 million to fund CSOs.

• NDA created 3175 work opportunities as a result of CSOs development interventions.

This is 175 more than the 3000-target planned for 2022/23 financial year.

• NDA also overachieved its target to capacitate 2000 CSOs by capacitating 3124 CSOs during the year under review (2022/23).
The reason for this over achievement was that NDA partnered with DSD and Hope World Wide SA in order to capacitate their funded NPOs.

• NDA overachieved its target of 95% funds disbursed by distributing 107% of funds to CSOs for the advancement of community-based socio-economic interventions and transformational projects.

• NDA planned to Pilot review CSO development interventions, this was undertaken in ten (10) districts in nine provinces (target: 9).
Programme 3: Research and Development Management Table 17: Programme 3: Achievement of targets Total targets set on Revised Annual Performance Plan (APP) Total targets reflecting on the Annual Report Targets achieved in Annual Report Targets not achieved Total budget spent 3 3 3 (100% success rate) 0 R9.306 million The Agency achieved all three (3) targets set for this programme in 2022/23 financial year.

The targets were achieved with a total budget of R9.306 million.
• NDA produced three (3) research publications (target: 3) undertaken to provide a basis for development policy.

47 50 48 • NDA conducted three (3) evaluations (target: 3) to inform programme design and implementation as planned.

• In terms of influencing development policy through thought leadership, NDA held five (5) dialogues (target: 5) with external stakeholders to inform development policy.

7.2 HUMAN RESOURCES The NDA has five divisions that implement both the primary and secondary mandates.
These are: • Development Management & Research, • Finance, • Office of the COO, • Office of the CEO, and • Corporate Services Support.

During the year under review 2022/23, NDA reported that the recruitment for the positions of Chief Executive Officer (CEO) and Company Secretary, could not be filled and thus remained vacant by the end of March 2023.
This phenomenon resulted in the acting CEO assuming the accounting authority responsibilities in addition to the accounting officer responsibilities legislatively conferred to him by the PFMA, an unenviable task that required thorough checks and balances to avoid conflating these key responsibilities which naturally feed into each other.
The NDA further reported that Employee Health and Wellness programme implemented a plan focusing on life skills workshops such as Resilience, Basic Counselling for Management, Physical and Mental health matters in an effort to equip employees to cope with the residual effects of the COVID-19 Pandemic.

The programme is in full operation to offer a 24/7, 365 pyscho-social counselling portal to assist employees and their immediate families.
48 51 49 Organisational Performance Challenges One of the key challenges identified by NDA was the cyber-attacks that affected the Great Plains financial system, the Travel business portal as well and the procurement portal.

These cyber-attacks were disruptive to the extent that the Travel Business portal was damaged beyond repair.

The SCM processes and management of travel spend were also affected negatively.
During 2022/23 financial year, NDA reported that there were human resource shortages in some parts of the organisation which resulted in over-stretching the current workforce beyond their primary responsibilities.

Efforts were made to supplement the current workforce with temporary staff to ease the burden of extreme work pressure.
The NDA promised to attend carefully to this anomaly to ensure sufficient allocation of personnel within its budget means, this is planned to be achieved through the implementation of the new organisational structure in the forthcoming financial year.

Table 18: Personnel cost by programme Programme Total spending Staff spend Staff No.
of Average for the entity (R’000) spend as staff cost per staff (R’000) % of total Governance and Administration 117 293 .43 54 109 .92 CSO Development 135 299 .85 75 530.56 Research and Development Management 9 308 .52 6 464.07 TOTAL 261 901 .81 136 100.56 spend 21% 39% 2% 52% 63 106 12 181 member (R’000) 858.82 712.55 538.67 751.94 • Overall spending of the NDA was R261.9 million during 2022/23 financial year.
• Staff spending constituted 52% of the overall NDA budget in 2022/23 as compared to 58% for 2021/22.

• Spending of staff rated cost was R136.1 in 2022/23 as compared to R132.3 million in 2021/22.

• The average cost per employee was highest in the Governance and Administration programme (R858.82).

8.

COMMITTEE OBSERVATIONS ON THE SOCIAL DEVELOMENT PORTFOLIO PERFORMANCE REPORTS 8.1.
Department of Social Development 49 52 50 • Improved audit outcome: The Committee commended the department for obtaining a clean audit, reporting an upward trend in performance, and responding to the issues it raised, such addressing capacity of social workers on adoption policy and increasing the number of social grant beneficiaries.

It however encouraged the department to meet all its targets.

• Sinovuyo programme: The Committee wanted to know how the department measured the impact of this programme.
What models did it use?

It also wanted to know if the department implements this programme with other departments such as the Department of Health.

The department explained that the programme seeks to improve caregiver-teen relationship through active social learning, improving caregiver mental health through social support and improving caregiver-teen communication about risky situations for teens in the community.
The impact of the programme was observed from the testimonies the department received from beneficiaries in Western Cape and in Mpumalanga provinces.

Parents reported that their relationships with their children improved after attending the programme.

They were able to discuss matters such budgeting.

This shows that the programme had positive impact on the lives of people.
• Substance abuse: The Committee wanted to know if the department works with institutions of higher learning to raise awareness against substance abuse as it is very high in these intuitions.

It also wanted to know the number of public treatment centres in the country.

The department reported that it has various partnerships with more 80 institutions of higher learning.

There are 13 public treatment centres across the country.
• Training on adoption policy: The Committee wanted to know the criteria that was used to choose six provinces where social workers were capacitated on the adoption policy.

How many NPOs did it also capacitate on the policy?

The department reported that training on the adoption policy is not only restricted on certain provinces.

It is an ongoing training, and it is reported on an ongoing basis.

Other provinces were reported on previously.


50 53 51 • Consequence management: The Committee raised a concern over the delays in instituting consequence management.

Officials implicated in wrong doings are not charged until they leave the department.

• Foster Child Grant (FCG) vs Child Support Grant (CSG) Top Up: The Committee raised a concern that it seems that more children who are eligible for the FCG are diverted to the CSG Top Up, even though the latter has less rand value.
This is despite SASSA reporting that it did not achieve its target of having 191 200 children in receipt of the CSG Top Up.

Also, the Childrens’ Amendment Act (No.17 of 2022) was only signed into law on 22 December 2022 and came into effect on 05 January 2023.

What impact have these had on the foster care cases linked to the North Gauteng High Court judgement?

What is the rand value of the difference between FCG and CSG Top Up?
The department explained that the implementation of the CSG Top Up should have been linked with the implementation of the Social Assistance Amendment Act (No.

16 of 2020), which only came into effect in May 2022, and the Children’s Amendment Act (No.

17 of 2022).

The Social Assistance Amendment Act introduced the CSG Top Up grant for orphaned children and the Children’s Amendment Act defines vulnerable children who are in need of care and protection who should be in the foster care system.
The aim is to increase the uptake of the CSG Top Up and reduce uptake of FCG, which requires comprehensive administrative and legal processes.

There were children who were in need of care and protection who were not receiving any form of benefit/income.

Thus, the CSG Top Up was not intended to save money.
The department acknowledged that because of the gap in the implementation of the two pieces of legislation there may be some social workers who are not familiar with the provisions of the Children’s Amendment Act.

The uptake of the CSG Top Up grant is still very low to what the department had envisaged.
• Expenditure trends: The Committee noted that in the financial reporting for quarter 1 of 2023/2024 financial year the department had reported on the projected vs actual spending on Compensation and Employees, which showed an increased spending compared to what was projected.

It requested the department to do a similar report for all the quarters.

• Vacancies: The Committee raised a concern over the critical positions that continue to be vacant.
It wanted an update on the media reports that department officials and NEHAWU 51 54 52 members were opposing the appointment of the current Acting Director-General into the position.

The department reported that the posts for the Director- General and the Deputy Director- General (DDG): Welfare Services Policy Development and Implementation Support were advertised, and recommendations were forwarded to the Department of Public Service and Administration (DPSA).
The department does not foresee any challenges that will prevent DPSA from submitting the recommended candidates to Cabinet.

The posts of the Chief Financial Officer and DDG: Strategy and Organisational Transformation were advertised on 17 July 2023 and closed in August 2023.

A memo was submitted to the Minister for the appointment of panel members.

Once the appointment of the panel members has been finalised, the shortlisting and interview processes will commence.
There may have been an interpretation issue between the labour constituency and the department management of the circular that was issued by National Treasury.

However, the management believes that its interpretation is correct.

At the time of advertisement and recruitment for the DG and DDG: Welfare Services were advertised, the department can confirm that all the applicants qualified, hence they were shortlisted, and the panel made recommendations.
• Payment of social grants into accounts of beneficiaries: The Committee noted the statement made by the Acting Director-General in his introductory remarks that the department pays social grants into beneficiaries’ accounts but has no responsibility of what happens thereafter.

It sought clarity on this statement because it is the responsibility of the department and SASSA to ensure that beneficiaries receive their grants.
Coupled to that, it raised a concerned that the department did not achieve its target to adjudicate 70% of appeals within 90 days.

This was worrying because behind every appeal is a source of livelihood to many households.

The department explained it has complete interest in the payment of social grants from when it receives the funds from National Treasury until social grants are paid to beneficiaries.
For instance, it was at the forefront of the recent payment crisis in September 2023 to ensure that the technical challenges were speedily addressed.

It is, however, important to acknowledge the roles and responsibilities as well as accountability provisions that are well specified in legislation and in the North Gauteng High Court ruling.

SASSA has been paying grants without fail into the bank accounts of beneficiaries through PERSAL.

There has never been delays in the payment of grants.
It is deemed the grant is paid once it is in the beneficiary’s bank account.

52 55 53 The Gauteng High Court ruled that neither SASSA nor the DSD have any regulatory powers to pose the restrictions on the electronic transaction.

The failures that happened in September were transactional failures that happened between two banks, Postbank and the bank that owns the point-of-sale device.
• Draft Prevention of and Treatment for Substance Use Disorders Policy: The Committee wanted to know the reason the target to submit this policy to Cabinet was not achieved.

The department explained that the policy is very comprehensive and contains controversial provisions.

It also involves services of other government departments.

It also has substantial financial implications hence it was submitted to National Treasury for advice before it is finalised.
• Updating of DSD website: The Committee reiterated its concern that the department’s website is not updated with new policies.

There are policies that were reported on in the annual report but are not available on the website.

The department reported that a service provide was appointed to update the website.
• Inter-dependencies and effectiveness of the electronic monitoring and evaluation (M&E) system: The Committee wanted to know how the department is addressing the challenge of inter-dependencies that result in some targets not achieved.

It also wanted to know how the M&E electronic system aims to address this.

The department acknowledged that the issue of concurrent functions is one of the challenges that the social development sector faces.
Some provinces set their own priorities and it becomes difficult for the national department to impose its priorities.

This is a negotiated space.

This is, however, addressed in various ministerial forums such DDGs forums and MINMEC wherein priorities are discussed, and sector plans are developed to address agreed performance indicators.
However, the department has been found not to be compliant with this because some of the provinces such as the Western Cape do not report on the agreed indicators, despite various engagements to encourage it to do so.

The electronic M&E system will enable the department to collect reliable data on service delivery and stop relying on reports from provinces which are at times not submitted on time.

53 56 54 The system was piloted, and it was found to be very effective.
Some NPOs in Gauteng are already using it.

All the targets that were not achieved are prioritized for the next financial year.

• High numbers of appeals: The Committee was concerned over the high number of appeals (4 819) that had to be resolved.

It wanted to know what were the common issues that were raised.

The department the number of appeals was very high because of the SRD grant queries.

All appeals for 2022/2023 were completed but not in 90 days as it was the target.
• NPO funding: The Committee noted that small and emerging NPOs that are mainly owned by Black people struggle to get funding compared to bigger NPOs.

The department explained that bigger NPOs receive funding because they have been in existence for many years.

This is because of the low increase in the budget for funding of the NPOs.

It has been between 1% to 2% across provincial departments.

National Treasury has been increasingly cutting departments’ budgets.
8.2 South African Social Security Agency • The Committee commended SASSA for the improved in audit findings.

• Material Irregularities (MI): The Committee noted that the R316 million MI has been resolved and the investigation and legal opinion found that the previous officials cannot be held responsible for the overpayment because the prescription period had lapsed.

It wanted to know if this meant that all the implicated officials had resigned.
Can the people who delayed the investigations be held accountable?

With the R74 million MI, the Committee wanted to know how will SASSA make sure that the same delays in holding those liable accountable does not occur when it suffered so much financial loss.

SASSA explained that the outstanding MI of R74 million will be finalised before the end of 2023/2024 financial year.
However, some of the implicated people left SASSA many years ago but SASSA has a right to recover the money from Cash Paymaster Services (CPS).

• Inadequate oversight on grant administration and payment of grants: The Committee wanted to know what measures has SASSA put in place to identify the root causes of this 54 57 55 audit finding.

This is concerning because grant administration and payment is the legislative mandate of SASSA.
SASSA reported that the 2022/2023 action plan focuses on the determination of root causes.

It focuses on three areas; namely, 1) is the audit query related to the absence of policy, 2) whether there is a business process or Standard Operating Procedures, 3) overriding of the business processes.

SASSA has also embarked on digitising its business processes, which will also address this.
• Lease contracts: The Committee noted and welcomed the intervention SASSA by obtaining an approval of the Immovable Property Strategy from the Minister of Social Development, which addresses the audit query of irregular expenditure due to expired lease contracts.

• Anti -fraud strategy: The Committee wanted to know at what point would SASSA do a complete overhaul of the screening and vetting of all its employees.
This is because it has been alleged that at times it is SASSA officials who are behind the fraudulent activities.

• Consequence management: The Committee raised a concern over the delays in the investigations until those implicated leave SASSA or are deceased.

It wanted to know how long will it take to resolve the outstanding cases of financial misconduct.
SASSA explained that investigations take long to finalise investigation because SASSA has to source external investigators and that has to go through the procurement process.

It appreciated the assistance that NT has provided hence there are only 2 outstanding historical cases.

• R650 million approved retained surplus: The Committee wanted to know what these funds will be used for.

How were the funds approved when other requests to retain surplus funds were declined by National Treasury previously.
SASSA explained that the application for the retained surplus can be made after 31 July of each year, that is in August and September, and the funds must be spent fully before the end of the financial year.
This amount will be spent on sourcing alternative power supply at local offices, local office improvements such as maintenance issues, procurement of furniture at local offices, replenishing some of ICT equipment, purchasing some vehicles especially for the Western Cape regional offices as vehicles have not been replenished for some years, upgrading ICT servers at the Head Office because of remote working, online grant application and for record management.
55 58 56 • CSG Top Up: The Committee wanted to know if SASSA will be able to reach the target number for 2023/2024 financial year, when it only managed to reach 37 000 CSG Top Up beneficiaries out the targeted number of 191 200 in 2022/2023.

It also wanted to know the waiting period for CSG applications.
SASSA explained that the numbers were lower than what was projected because most people prefer to wait for the court processes for foster care applications to finalise before they apply for the CSG Top Up.

It acknowledged that the target of 191 200 was ambitious for one financial year.

For the 2023/2024 financial year it has set a more realistic target.

• Enquiries resolved within 10 days: The Committee wanted to know what the starting point of the 10 days is.
SASSA explained that the starting point it is when the enquiry is received either by email or telephone.

The finding by AGSA was that SASSA was not able to back date the query when, for instance, when there was loadshedding and a system downtime.

This system has since been amended and now allows the dates to be back dated.

To mitigate the challenge of loadshedding, SASSA is also looking at piloting self -service kiosks to be located outside SASSA local offices.
• Database: The Committee wanted to know the database that was used by AGSA when it conducted an audit on the payment of the SRD grant.

Was it the same as the one used by SASSA?

This will provide clarity on the audit findings.

• Funds disbursed to Postbank: The Committee wanted to know the rand value of the amount that was disbursed to Postbank and the rand value of the penalty that was imposed.
SASSA explained that the amount was reported as accrual in the financial statement because it was the amount SASSA owed to Postbank.

In the six months (Oct 2022 – April 2023) that the contract with Postbank has been in existence, SASSA had paid R517 million that makes it around R86 million a month.

8.3 National Development Agency • Clean audit: The Committee commended the NDA for obtaining an unqualified audit with no findings (clean audit).
It noted that AGSA found that the Agency was compliant with various legislation.

It also noted that the NDA achieved its performance goals towards poverty alleviation, job creation, capacity building of CSOs to enable them to operate 56 59 57 sustainable.

It also congratulated the new board for the work it has done since it started its term in January 2023.

It urged the board to particularly focus its oversight over the work of the newly established Loss Control Committee to strengthen it.
• Recurring audit finding: The Committee, however, noted with concern the recurring audit finding on the uncompetitive bidding processes.

The raises a question why this was not resolved?

• Turnaround strategy: The Committee welcomed the approval of the turnaround strategy but asked various clarity seeking questions on its implementation.

It wanted to know if there are timeframes for its implementation.

Does it include the review of the NDA funded organisations?
Will it include reduction of consultation fees?

What can be expected in the current financial year that will make an impactful difference to the work of the NDA and by when?

What institutional reposition of the NDA is contained in the strategy?

The NDA explained that the strategy will be implemented in April 2024.

It has drafted a publicity plan that has mapped out stakeholders it will engage with.
Regarding the review of the NDA funded NPOs, the strategy has defined the targets groups of NPOs which will be community-based co-operatives and enterprises that will create sustainable jobs.

The focus will be more on social grant beneficiaries, indigent beneficiaries, Extended Public Works Programme workers, unemployable youth, and unemployed graduates.

This aims to assist people to exit from the public employment register.
Thus, there will be a strategic shift from CSOs funding to community-based co-operatives that assist individuals affected by poverty.

Community-based co-operatives will be capacitated to effectively address the factors that trap people into poverty.

The strategy is also aligned to the skills development programme of TVET colleges and privately owned institutions for the required skills with the aim of growing local economy.
The approach will be based on District Development Model, that means NDA will work in partnership with other government departments, international organizations, and SITAs.

For instance, the NDA will work with the Department of Human Settlement wherein the NDA can facilitate community-based housing co-operatives.

All these strategic initiatives also speak to the expansion of the NDA blueprint.

Subsequently, the implementation of the strategy will be expressed on the annual targets.
• Vacancies: The Committee wanted to know when will post of the Chief Executive Officer (CEO) be filled.

How many other senior management positions are acting?

The Committee referred to an earlier report that some duties were done by unqualified officials, or they 57 60 58 were performing duties that were outside their line of work.

This is despite, compensation of employees accounting for the highest budget allocation.

How is this going to be addressed?


The NDA reported that the board had started with the recruitment process of the CEO position and two candidates were shortlisted.

However, they later were not available.

The process was restarted.

The turnaround strategy will also include skills audit review with the aim of placing officials in the right positions.

It is only the position of the CEO that is vacant.


At the time of reporting there was an Acting Chief Financial Officer (CFO) because the CFO was on special leave.

• The partnership strategy: The Committee wanted to know if the strategy includes forming partnerships with big business to enable it to expand its blueprint.
The NDA explained that it identified key strategic partnerships such as Departments of Human Settlements, Agriculture, Land Reform and Rural Development, Higher learning SITAs, lottery, the Land Bank and CSOs organizations.

These are expressed in the turnaround strategy.

• Performance bonus: The Committee wanted to know the number of employees who were eligible for bonuses.

It was concerned that the NDA spends a lot of its budget on salaries.
The NDA explained that the budget provision for performance bonus is always made but its payment depends on the approval of the board based on the performance of the Agency.

• Board fees: The Committee wanted to know the reason the financial statements included expenditure on board fees when the board was only appointed in January 2023.

The NDA explained that there was an interim accounting authority assisted by the independent audit committee.
The fees included the remuneration of this committee and the new board when it started its work.

• Capacity building of CSOs: The Committee wanted to know what capacity building of CSOs entails and for how long are NPOs capacitated?

58 61 59 The NDA reported that a capacity building programme was rolled out in all nine provinces.

The programme resulted in a mind shift toward community enterprises and how they can maximise funding opportunities in a particular area of focus.
The NDA also trained NPOs on areas of governance, resource mobilisation, financial management and on conflict resolution.

It developed five modules.

The training was an ongoing process based on the areas of weakness that were identified during the assessment process.

The training is provided by the NDA development practitioners who are deployed in all nine provinces.
• Disbursement of CARA funds: The Committee wanted to know the reasons the NDA was still withholding disbursement of CARA funds when there is dire need for funding by NGOs and high levels of gender-based violence and femicide.

What has been the impact of this fund?

The NDA reported that at the end of the 2022/2023 financial year there was a balance of R5 million, and it will be disbursed before the end of November 2023, as the contract ends in October 2023.
The funds are disbursed in tranches and monitoring is conducted before the other tranches are disbursed.

This was the reason why funds were withheld.

• Volunteer Programme: The Committee wanted to know what this programme entails as it has been allocated with R30 million from the approved retained surplus funds.

What are its timeframes?

The NDA reported that the programme had 22 beneficiaries per CSO and they were paid R1 800 for a period of six months.
The grant funding projects created seasonal job opportunities.

Some of the volunteers from the volunteer programme were absorbed into the CSOs they were attached to.

• Condonation of irregular, fruitless and Wasteful expenditure: The Committee wanted to know when will the application for condonation to National Treasury be finalised?

The NDA explained that the Loss Control Committee started to make a determination of cases amounting to R14 million for condonation.
There were other two high value cases amounting to R50 million that were taken through a determination process.

The NDA was in the process of implementing consequence management.

Then application for condonation will be submitted to National Treasury at the beginning of the fourth quarter of 2023/2024 financial year.

There 59 62 60 were eight cases which were with Human Resources department for the implementation of disciplinary processes and once completed they will also be submitted for condonation.
The NDA has implemented controls and that has resulted in one transgression of R335 000 for the year under review.

• NDA Amendment Bill: The Committee wanted to know when will the bill be finalised and what governance amendments will it make?

The NDA reported that it submitted proposals to the Department of Social Development, and the department was drafting the bill.

The department will brief the board on the amendments so that it can make inputs.
The proposed governance amendments include reduction of the number of board members to seven similarly to other government entities, regulation of the expertise the NDA requires from the board candidates, reduction of the number of government representatives and representatives of the CSOs sector in the board, regulation of the time of the appointment of the board chairperson, which currently done during the first sitting of the board but does not necessarily happen, giving the Minister powers to appoint the board chairperson, regulation of the quorum of the board to be in a percentage not numbers, repealing the section of the Act that deals with the establishment of the management committee because the current Act predates the Public Finance Management Act (PFMA), giving the board powers to establish committees, regulation of provision for the dissolution of the board and interim arrangements, providing for renewal of the CEO five year term, and repealing other provisions that are addressed in the PFMA.
• CSOs funding: The Committee wanted to know the effectiveness of monitoring and evaluation system over the NDA funded projects.

There is a lot of funding that goes to NPOs through the NDA and Programme 5 of DSD.

• Research reports and dialogues: The Committee wanted to know how the findings of the research reports find expression in the work of the NDA.
The NDA explained that the main aim of the research conducted is to influence NDA policies and aligning them to the Medium-Term Strategic Framework priorities on poverty eradication, unemployment, and inequality.

The research outcomes are presented to various stakeholders such as NEDLAC in a form of a debate and dialogues.

The evaluation reports produced also contributed to the drafting of the turnaround strategy.
Evaluation studies also assess the impact of the NDA funded projects on the lives of people.

It was also the evaluation studies that 60 63 61 revealed that the design of the NDA funded projects focused more on short term benefits than long term benefits.

• Budget cut: The Committee also wanted to know the impact has the budget deficit of R23 million had on the performance of the NDA.

The NDA explained that the income statement reflects an accounting deficit.
Every year National Treasury approves to roll over funds from the previous year.

The R23 million deficit is funded from the approved rolled over funds.

• ICT strategy and appointment of the service provider: The Committee also wanted to know the reason strategy commenced before the board was appointed and the turnaround strategy was approved.
The NDA explained that the strategy was necessary to map up the ICT requirements of the organisation in preparation for the implementation of the turnaround strategy.

The mapping project focused on the digitisation and IT support of the NDA business processes, and it will be finalised in the next two months.

The contract of the service provider was for 5 years.

9.
9.

RECOMMENDATIONS Having considered the annual performance reports of the social development portfolio, the Committee made the following recommendations: 9.1 Department of Social Development • The Minister of Social Development should ensure that the department strengthens its oversight over the administration and payment of social grants by ensuring that the Management Service Agreement (MSA) SASSA entered with Postbank is implemented to avoid any future payment crisis.
The technical challenges that resulted in the failure of withdrawals from certain types of social grants should be eliminated as much as possible.

The department should provide and present its Entity Governance and Oversight Framework to the Committee within six months after the adoption of this report by the National Assembly.

• The Minister should also make sure that the department within the 2024/2025 financial year trains all social workers on the provisions of the Social Assistance Amendment (No.
20 of 61 64 62 2020) and the Children’s Amendment Act (No.

17 of 2022) and their Regulations to increase the uptake of the Child Support Grant (CSG) Top Up.

The department had set a target of capacitating 30% of the sector workforce in 2022/2023 and 30% in 2024/2025.

However, it is important that all social workers are trained to prevent further exclusions of vulnerable children either from the Foster Child Grant or CSG Top Up.
• The Minister should also ensure that the department includes a detailed progress report on actions taken to address Material Irregularities (MI) in its quarterly audit action plan which it presents to the Portfolio Committee.

The report should contain a full list of those implicated, status of investigations, consequence management instituted, and recovery of the funds involved.
• Linked to the aforementioned recommendation, the Minister should ensure that the department institutes investigations and consequence management over financial misconduct cases speedily to prevent those implicated from evading accountability by resigning.

• The Minister should also ensure that that the critical vacancies at senior management level are filled within the three months after this report has been adopted by the National Assembly.
The department should report progress made to the Committee at the end of the six months.

This is a recurring recommendation of the Committee and thus needs to be prioritized.

• The Minister should also ensure that the department includes in its quarterly financial reports analysis of projected versus actual spending on all programmes and economic classifications.
9.2 South African Social Security Agency (SASSA) • The Minister should ensure that the department as part of its oversight strategy over the social grant administration and payment ensure that SASSA meets its target of increasing the uptake of the Child Support Grant (CSG) Top-Up.

As reported in its annual report SASSA only managed to have 37 000 CSG Top-Up in payment out of the target of 191 200 for 2022/2023 financial year.
For 2023/2024 financial year it had set a target of having 238 500 applications for the CSG Top Up in payment.

62 65 63 • The Minister should also ensure that SASSA includes a detailed progress report on actions taken to address Material Irregularities (MI) in its quarterly audit action plan which it presents to the Portfolio Committee.

The report should contain a full list of those implicated, status of investigations, consequence management instituted, and recovery of the funds involved.
• Linked to the aforementioned recommendation, the Minister should ensure that SASSA institutes investigations and consequence management over financial misconduct cases speedily to prevent those implicated from evading accountability by resigning.

• The Minister should ensure that SASSA, on its quarterly actions plans it presents to the Portfolio Committee, includes outcomes of the investigation on the root causes of the audit findings.
9.3 National Development Agency (NDA) • The Minister should ensure that the NDA fills the position of the Chief Executive Officer within three months after the adoption of this report by the National Assembly.

The NDA to report progress made to the Committee at the end of the six months.

This is a recurring recommendation and so it needs to be prioritized.
• The Minister should also ensure that the NDA finalizes the process of condonation of irregular, fruitless and wasteful expenditure within the 2024/2025 financial year.

The NDA should report on the progress made in its quarterly audit action plan it presents to the Committee.

Report to be considered.

63 66 2.


The Budgetary Review and Recommendations Report (BRRR) of the Portfolio Committee on Health, on the Performance of the National Department of Health and its entities (2022/23), dated 18 October 2023 Contents 1.

INTRODUCTION ............................................................................................................................ 2 1.1.
Purpose of the report ................................................................................................................... 3 1.2.

Process ......................................................................................................................................... 3 2.

STRATEGIC OVERVIEW ................................................................................................................. 4 2.1.
Policy Priorities for 2022: Alignment to the NDP, MTSF, SONA 2022 and SDGs .......................... 4 2.1.1.

The Department of Health’s Five-Year Strategic Goals ........................................................ 4 2.1.2.

The National Development Plan Vision 2030 ....................................................................... 5 2.1.3.

Ten Year Review of the NDP ................................................................................................. 6 2.1.4.
State of the Nation Address (SONA) – 2022 ......................................................................... 7 2.1.5.

Department’s Planned Policy Initiatives (2022/23) .............................................................. 8 3.

REPORT OF THE FINANCIAL AND FISCAL COMMISSION ................................................................. 8 4.

REPORT OF THE AUDITOR-GENERAL OF SOUTH AFRICA ................................................................ 9 5.
PERFORMANCE OF THE DEPARTMENT OF HEALTH (2022/23) ...................................................... 12 5.1.

Financial Performance ................................................................................................................ 12 5.2.

Non-Financial (Service Delivery) Performance ........................................................................... 14 6.
PERFOMANCE OF ENTITIES (2022/23) .......................................................................................... 23 6.1.

South African Health Products Regulatory Authority (SAHPRA) ................................................ 23 6.2.

Office of the Health Standards Compliance (OHSC) ................................................................... 27 6.3.

Office of the Health Ombud (OHO) ............................................................................................ 32 6.4.
South African Medical Research Council (SAMRC) ..................................................................... 37 6.5.

National Health Laboratory Services (NHLS) .............................................................................. 41 6.6.

Council for Medical Schemes (CMS) ........................................................................................... 47 6.7.

Compensation Commissioner for Occupational Diseases (CCOD) ............................................. 53 7.
COMMITTEE OBSERVATIONS AND FINDINGS ............................................................................... 57 8.

COMMITTEE RECOMMENDATIONS ............................................................................................. 67 9.
CONCLUSION ............................................................................................................................... 71 1 67 The Budgetary Review and Recommendations Report (BRRR) of the Portfolio Committee on Health, on the Performance of the National Department of Health and its entities (2022/23), dated 18 October 2023 The Portfolio Committee on Health (the Committee), having assessed the performance of the National Department of Health (the Department or NDoH) and its entities, against their mandates and allocated resources for the financial year under review (2022/23), reports as follows: 1.
INTRODUCTION The Money Bills Procedures and Related Matters Amendment Act (No.

9 of 2009) sets out the process that allows Parliament to make recommendations to the Minister of Finance to amend the budget of a national Department.
The Portfolio Committees of Parliament compiles Budgetary Review and Recommendation Reports (BRRR) annually that: i) Assess service delivery performance of departments given available resources; ii) Evaluate the effective and efficient use and forward allocation of resources (value for money in services delivered); and iii) May include recommendations to inform effective, efficient and economic use of allocated resources.
The Portfolio Committee on Health assessed the performance of the National Department of Health and its entities (for the 2022/23 financial year) with reference to the following: • The Medium-term estimates of expenditure of the Department, its strategic priorities and measurable objectives; • Prevailing Strategic Plans and Annual Performance Plans of the Department; • Prevailing Strategic Plans and Annual Performance Plans of Entities; • Expenditure reports relating to the Department published by National Treasury in terms of Section 32 of the Public Finance Management Act (PFMA) (No.1 of 1999); • Financial statements and annual reports of the Department; • Financial statements and Annual Reports of the Entities; 2 68 • Reports of the Committee on Public Accounts relating to the Department; and • Any other information requested by or presented to Parliament.
1.1.

Purpose of the report This report summarises presentations received from the Department and its entities focusing on the 2022/23 Annual Reports and financial statements, as well as considering the Financial and Fiscal Commission (FFC) and Auditor-General of South Africa (AGSA)’s analyses of the health sector’s annual reports.
The report details the deliberations, observations and recommendations made by the Committee relating to the Department and entities’ financial and non-financial (service delivery) performance for the 2022/23 financial year.

1.2.
Process In assessing the performance of the Department of Health and its entities for the financial year 2022/23, the Committee reviewed and analysed the following reports and/or documents: • 2022 Estimates of National Expenditure; • Strategic Plan of the Department of Health (2020/21 – 2024/25); • Annual Report of the Department of Health (2022/23); • Annual Report of the South African Health Products Regulatory Authority (2022/23); • Annual Report of the Office of Health Standards Compliance (2022/23); • Annual Report of the Office of the Health Ombud (2022/23); • Annual Report of the South African Medical Research Council (2022/23); • Annual Report of the National Health Laboratory Services (2022/23); • Annual Report of the Council for Medical Schemes (2022/23); • Annual Report of the Compensation Commissioner for Occupational Diseases (2022/23); • Report of the Financial and Fiscal Commission; and • Report of the Auditor-General of South Africa.
3 69 On 10 October 2023, the Committee was briefed by the FFC on its analysis of the annual reports of the health sector and AGSA on the audit outcomes of the sector.

On 11 to 13 October 2023, the Committee engaged the Department and its entities on their 2022/23 Annual Reports and financial statements.

2.

STRATEGIC OVERVIEW 2.1.


Policy Priorities for 2022: Alignment to the NDP, MTSF, SONA 2022 and SDGs The National Department of Health’s 2020/21 – 2024/25 Strategic Plan aims to achieve the priorities highlighted in the MTSF 2019 – 2024.
It is aimed at eliminating avoidable and preventable deaths (survive); promoting wellness and preventing and managing illness (thrive); and transforming Health systems, the patient experience of care, and mitigating social factors determining ill health (thrive), in line with the United Nation’s objectives of the Sustainable Development Goals (SDGs) for health.

2.1.1.
2.1.1.

The Department of Health’s Five-Year Strategic Goals The Department’s response is structured to deliver the MTSF 2019 – 2024 impacts, and the National Development Plan (NDP) Implementation Plan 2019 – 2024 goals as follows: Strategic Goal 1: Increase life expectancy, improve health and prevent disease – Improve health outcomes by responding to the quadruple burden of disease in South Africa; and address the social determinants of health through inter-sectoral collaboration.
Strategic Goal 2: Achieve universal health coverage by implementing NHI Policy – Progressively achieve universal health coverage through NHI.
Strategic Goal 3: Quality improvement in the provision of care – Improve quality and safety of care; provide leadership and enhance governance in the health sector for improved quality of care; improve community engagement and reorientate the system towards Primary Health Care through 4 70 community based health programmes to promote health; improve equity training and enhance management of Human Resources for Health (HRH); improve the availability of medical products and equipment; and ensure robust and effective health information systems to automate business processes and improve evidence based decision making.
Strategic Goal 4: Build health infrastructure for effective service delivery – Execute the infrastructure plan to ensure adequate, appropriately distributed and well-maintained health facilities.

2.1.2.

The National Development Plan Vision 2030 The NDP sets out nine long-term health goals for South Africa.

Five of these goals relate to improving the health and well-being of the population, and the other four deal with aspects of Health systems’ strengthening.
These goals are as follows: 1) Average male and female life expectancy at birth increased to 70 years.

2) Tuberculosis (TB) prevention and cure progressively improved.

3) Maternal, infant and child mortality reduced.

4) Prevalence of Non-Communicable Diseases (NCDs) reduced by 28%.

5) Injury, accidents and violence reduced by 50% from 2010 levels.

6) Health systems reforms completed.

7) Primary Health Care (PHC) teams deployed to provide care to families and communities.
8) Universal Health Coverage (UHC) achieved.

9) Posts filled with skilled, committed and competent individuals.

The NDP 2030 states explicitly that there are no quick fixes for achieving the nine goals outlined above.

The NDP also identifies a set of nine priorities that highlight the key interventions required to achieve a more effective Health system, which will contribute to the achievement of the desired outcomes.
These priorities include: • Addressing the social determinants that affect health and diseases; • Strengthening the Health system; • Improving health information systems; 5 71 • Preventing and reducing the disease burden and promoting health; • Achieving universal healthcare coverage though the implementation of the NHI, • Improving human resources in the Health Sector; • Reviewing management positions and appointments and strengthening accountability mechanisms; and • Improving quality by using evidence and creating meaningful Public-Private Partnerships (PPP).
2.1.3.

Ten Year Review of the NDP The National Planning Commission released a ten-year review of the NDP (2012 – 2022).

Amongst other things, it recommended the following: • The Department of Basic Education and the NDoH should undertake a skills audit to identify the skills gap between the old and new curricula to identify the number of teachers and medical professionals who need to be re-trained, as well as the funding requirements for the training programme.
• Based on the highlighted associated risks, the government needs to strengthen specific health programmes mainly intended to address the burden of disease and identified socioeconomic and health inequalities.

• Government needs to consider governance limitations of the NHI Bill, prior to its enactment.

• The Department should explore interventions to further reduce maternal deaths.
• The Department should increase investment in training and improve management of Community Health Care professionals in South Africa’s public hospitals, as well as of Community Health Workers to improve preventative care in communities.

• The Department should implement the legislative and regulatory interventions recommended by the Strategic Plan for the Prevention and Control of Non-Communicable Diseases.
• The Department must develop a strategy to decrease the proportion of TB patients who are not evaluated.

6 72 • The Department should increase the rate of conversion and construction of Ideal Clinics to enhance primary care services, especially in underserved areas throughout the country.

• The NDoH and the Department of Social Development need to strengthen integration between health and social services.

2.1.4.
2.1.4.

State of the Nation Address (SONA) – 2022 During the February 2022 SONA, the President highlighted the following main health-related issues: • COVID-19 remains a key priority.

Vaccines have proven to be the best available defence against illness and death from COVID-19.

The vaccine rollout has thus far seen 30 million doses of COVID-19 vaccines administered, with nearly 42% of all adults and 60 per cent of everyone over 50 fully vaccinated.
• The country is ready to enter a new phase in managing the pandemic.

The national state of disaster will be lifted once measures under the National Health Act and other legislation to contain the pandemic, are finalised.

• South Africa will work with other African countries and international partners to support the strengthening of the continent’s capacity to respond to pandemics.

Specifically, there will be increased efforts to develop Africa’s ability to manufacture vaccines.
In South Africa two companies – Aspen and Biovac – have contracts to produce COVID-19 vaccines.

Two additional vaccine projects have also been announced.

• Within two years, the country has full local production capability for ventilators, hand sanitisers, medical-grade face masks and gloves and therapeutic drugs and anaesthetic, in place.

South African products have been exported to other African countries, securing them vital supplies and expanding jobs for young South Africans.
• Significant progress is made in preparing for the introduction of NHI.

More than 59 million people are registered on the Health Patient Registration System (HPRS).

By September 2021, more than 56 000 additional health workers were recruited, and more than 46 000 Community Health Workers integrated into the public health system.

7 73 2.1.5.
7 73 2.1.5.

Department’s Planned Policy Initiatives (2022/23) The planned policy priorities of the Department during the period under review included the following: • COVID-19 response plan: The Department’s COVID-19 response plan aimed to mitigate the effects of the virus in South Africa.

Focus was placed on increasing the COVID-19 vaccine population coverage.
However, the Department aimed to introduce a new strategy, by integrating the COVID-19 vaccine into the routine care at Primary Health Care (PHC) facilities, within the Integrated Clinical Services Management model of service delivery.
• Prevent further decline in routine services: Over the past two years due to the pandemic, there has been a decline in routine services and their respective outcomes including, amongst others, case finding detection in tuberculosis (TB), Expanded Programme on Immunisation (EPI) numbers have declined, and a decline in wellness testing including diabetes.

The Department aimed for a renewed focus on improving access to quality health services.
• Facilitate the implementation of the proposed National Health Insurance (NHI): The Department aimed to continue in its trajectory to prepare for the implementation of the proposed NHI.

• Improvement of health system infrastructure: The Department aimed to focus on the refurbishment, upgrading and building of new hospitals, health centres, clinics and new specialised units including oncology which, according to the Department has improved over the recent years due to public-private partnerships (PPPs).
3.

REPORT OF THE FINANCIAL AND FISCAL COMMISSION The Financial and Fiscal Commission (FFC) reported that South Africa’s public health system has improved since 1994, however, the COVID-19 pandemic worsened health outcomes.

The system is strained due to a high disease burden, staff shortages, service backlogs and a growing uninsured population.

8 74 The FFC noted that due to the rising public debt, government is implementing fiscal consolidation measures to reduce spending and manage debt.
As a result, the Health budget is expected to decrease from R64.5 billion in 2022/23 to R60.1 billion in 2023/24.

The decline in funding raises concerns in respect of the quality of public healthcare, considering the existing backlogs exacerbated by COVID-19.

With respect to the fiscal consolidation and its impact on the Health budget, the FFC indicated that debt costs are increasing and crowding expenditure on critical social services such as healthcare.
The FFC assumed that the initial increase in the Heath budget was due to the pandemic, however it has since been decreasing and it will temporarily go into negative growth before improving again.

The FFC raised concern about increased expenditure in settling medico-legal claims which have increased from R265 million in 2012/13 to R2 billion in 2018/19.
Further, noting that medico- legal claims accounted for approximately 1% of health expenditure in 2018/19 to 2020/21, with the highest share being in the Eastern Cape at approximately 3%.

Notably, since 2018/19 contingent liabilities stand at more than 50% of the provincial Health budgets.
On conditional grants, the FFC recommended that greater focus is needed to improve the spending performance against certain conditional grants, in particular the District Health Programme and the NHI: Non-Personal Services grants.

4.

REPORT OF THE AUDITOR-GENERAL OF SOUTH AFRICA 4.1.


Department and entities The Auditor-General of South Africa reported that the audit outcomes of the health portfolio improved mainly due to the NDoH’s improved audit outcomes from qualified opinion to unqualified with findings.

The SAMRC, CCOD and OHSC obtained clean audits during the period under review, while the CMS, SAHPRA and NHLS obtained unqualified audit opinions with findings.
9 75 The AG identified material findings on annual performance reporting and achievement of targets by the NDoH and SAHPRA.

SAHPRA has regressed in this area as there were no material findings identified in the prior years.

The SAMRC, OHSC, CMS and NHLS did not have material findings on annual performance reporting.

The AG indicated that financial statements preparation remains a concern as material adjustments were effected to annual financial statements submitted for audit by the NDoH, SAHPRA and NHLS.
It was indicated that the NHLS had a significant number of financial statement items materially adjusted for after the audit.

On compliance to key legislation, the AG indicated that the NDoH had findings on expenditure management and SAHPRA on revenue management.

The AG commended the health portfolio on having addressed previous findings on procurement and contract management.

Irregular expenditure incurred by the portfolio increased from R4.5 billion in 2021/22 to R5.2 billion in 2022/23.
The main contributors to the irregular expenditure were the NHLS, incurring R4 billion, followed by the NDoH (R359 million) and CMS (R59 million).

4.2.

Provincial Departments The AG reported that the audit outcomes of the sector show improvement due to the NDoH and KwaZulu-Natal clearing the prior year qualification and obtaining unqualified audit outcomes.

The improvement resulted in the sector having only three (3) of the 10 departments receiving a qualification.
Limpopo’s audit outcome had not been finalised by the legislated date of 31 July 2023.

There was no improvement to the audit outcomes for the Eastern Cape, Free State and Northern Cape as they remain qualified for four consecutive years, these provinces remain a major concern.

The AG noted that the overall quality of annual financial statements for Gauteng, Mpumalanga and North West is concerning, as numerous material misstatements were identified that requires correction on an annual basis.
The AG commended the Western Cape and KwaZulu-Natal for producing good quality financial statements.

10 76 Irregular expenditure has decreased from R9.5 billion in 2021/22 to R7 billion in 2022/23.

The main contributors to irregular expenditure were KwaZulu-Natal (R2.5 billion), Gauteng (R2.3 billion), Northern Cape (R1.1 billion) and North West (R776 million).

4.3.
4.3.

Ideal Clinic Realisation and Maintenance (ICRM) programme The AG reported on its audit conducted to determine the status of the implementation of the ICRM programmes in 27 primary health care facilities in the nine provinces.
Some of the findings of the AGSA included the following: o maintenance schedules not implemented; o lack of functional back-up electrical supply and/or pipped potable water; o emergency trollies not restored daily; o o lack of hand hygiene facilities; and inadequate management of medicine and supplies.
The root causes included human resources deficiencies such as the lack of training, guidance and support to some health workers, lack of supervision and leadership and the insufficient or no dedicated funding for the implementation of the ICRM programme.

4.4.

Medico-legal claims The AG reported that the financial situation of the health sector is concerning as significant medico-legal claims is putting the sector under immense pressure, resulting in increased accruals and late payment of suppliers.
The total amount of medico-legal claims as of 31 March 2023, was approximately R67 billion.

The NDoH undertook a process to develop a policy and legal framework to manage medico-legal claims in South on behalf of the provincial departments of health.

The South Africa Law Reform Commission is in the process of finalising the draft discussion paper.

4.5.
4.5.

Infrastructure audit On infrastructure, the AG reported that 69% of the 35 projects audited had findings on delays in the completion of the projects, 37% had findings on cost implications and 40% had findings on 11 77 build quality.

The root causes included the lack of oversight as some of the departments implemented a project for which there was no proper need assessment conducted and feasibility studies and no approval documents.
Certain contractors failed to adhere to timelines due to poor performance resulting in projects being delayed.

Management failed to ensure that contractual agreements were enforced and disciplinary measures in the form penalties were applied against a contactor.

5.

PERFORMANCE OF THE DEPARTMENT OF HEALTH (2022/23) This section provides an overview of the financial and non-financial (service delivery) performance of the Department of Health for the 2022/23 financial year.

5.1.
5.1.

Financial Performance For 2022/23, the Department spent R62.9 billion of the R64.6 billion available budget.

This constitutes expenditure of 97.4%, down from 98.8% expenditure rate in the previous financial year.

The Department underspent its allocated budget by nearly R1.7 billion (or 2.6%) of the final appropriation.

The underspending increased by nearly a billion rand over the previous financial year which recorded R771.3 million underspending.
Table 1: Programme Expenditure 2022/23 Programme R’000 Administration National Health Insurance Communicable & Non- Communicable Diseases Primary Health Care Hospital Systems Health System Governance and Human Resources TOTAL Final Appropriation 2022/23 Actual Expenditure Over/under expenditure Final Appropriation 2021/22 Actual Expenditure Over/under expenditure The primary causes of underspending in the budget are as follows: • Goods and services: Underspending of R1.2 billion, primarily driven by the non- procurement of COVID-19 vaccines (R807.5 million underspent) due to reduced demand for the service.
• Capital assets: Underspending of R479.1 million is attributed to delays in the Limpopo Academic Hospital project, which falls under the Budget Facility for Infrastructure (BFI) program.

The Budget Facility for Infrastructure (BFI) is a reform to the budget process that supports the execution of national priority projects by establishing specialised structures, procedures and criteria for committing fiscal resources to public infrastructure spending.
Measures have been taken in the 2023 Medium-Term Expenditure Framework (MTEF) to adjust cashflow projections and budget allocations to address this issue.

• R203 million of the underspending is related to the National Health Insurance (NHI) Indirect Grant, including both personal and non-personal services components, as well as other earmarked NHI items.

This underspending is primarily due to a lack of staff, resulting in delays in NHI-related projects.
Furthermore, an ongoing legal challenge regarding planned staff appointments within the NHI branch has further complicated the situation.

In terms of economic classification, expenditure on Compensation of Employees (COE) amounts to R760.9 million (93.7%) of the COE budget allocation of R812.5 million.

With regard to COE, the Department notes that the underspending is due to vacant, critical posts that are in the process of being filled.
Goods and Services expenditure amounted to R2.8 billion (71.6%) of the budget allocation of R4.0 billion.

Reasons for under-expenditure include: • Rental payments to Department of Public Works were withheld due to unresolved disputes on invoices.

• Underspending resulted from delayed recruitment of the new NHI staff members.

• The 2022/2023 business plan for the NHI Indirect Grant personal services component detailed targets that were unfeasible within the timeframe and capacity of the NHI Branch.
• Underspending under COVID-19 Vaccination Programme, as there is sufficient vaccine stock on hand.

13 79 Transfer payments: Expenditure of R58.334 billion (100%) was incurred from the budget of R58.366 billion.

Purchase of Capital Assets: An amount of R958.8 million (66.6%) was spent on capital payments from the budget of R965.8 million.

The underspending is simply attributed to the slow start of various infrastructure projects.

The Committee should scrutinize this issue in more detail.
Direct charges against the National Revenue Fund (NRF): no charges against the NRF were incurred.

Virement: Approval was obtained from National Treasury to vire R3.1 million after the Adjustments Budget, across programmes.

No funds were rolled over.

No unauthorised expenditure was incurred during the period under review.

The Department incurred R45 000 fruitless and wasteful expenditure.

5.2.
5.2.

Non-Financial (Service Delivery) Performance The Department’s performance appears to have declined as compared to the previous financial year.

During the financial year under review, the Department achieved 30 out of the 52 set targets or 57.7%.

This is lower than the 23 out of 37 targets (62.2%) reached in 2021/22.
The Department’s performance should be viewed in the context of it having again spent 97.4% of its allocated budget (in the previous four financial years it spent 98.8% (2021/22), 99.1% (2020/21), 99.2% (2019/20), and 98.1% (2018/19).

14 80 Table 2: Programme Performance Overview Programme Number of targets Achieved 2022/23 Not fully achieved 1.

Administration 2.

National Health Insurance 3.

Communicable & Non- Communicable Diseases 4.

Primary Health Care 5.

Hospital Systems 6.


Health System Governance and Human Resources 7 4 21 7 4 9 1 3 10 6 3 7 6 1 11 1 1 2 % Targets Achieved Budget Spent % 2022/23 14.3% 75.0% 47.6% 85.7% 75.0% 88.2% 86,7% 96.7% 99.9% 98.1% 2021/22 % Targets Achieved 2021/22 50.0% 40.0% 66.7% 66.7% 100.0% % Budget Spent % 2021/22 81.2% 81.7% 99.6% 98.4% 99.5% 77.8% 99.5% 57.1% 98.7% Total 52 30 22 57.7% 97.4% 62.2% 98.8% 5.2.1.
Performance per programme This section provides an analysis of the performance of the Department under each of its six main programmes.

The analysis focuses particularly on the overarching targets achievement, budget spending and highlights some of the challenges under each programme.

5.2.1.1.

Programme 1: Administration The programme achieved only one (14.3%) of the seven planned targets for 2022/23.
It should be noted that the number of targets set in the APP for this programme has fluctuated from three (3) in 2019/20, six (6) in 2020/21, four (4) in 2021/22 and seven (7) in 2022/23.
Table 3: Programme 1 Total targets set Targets achieved Targets not fully achieved Success rate Total budget Total budget spent 2022/23 7 1 2 14.3% R732.0 million R645.3 million (88.2%) 2021/22 4 2 2 50.0% R828.7 million R672.7 million (81.2%) 15 81 The notable targets under the programme during the period under review include the following: • The Department achieved its target of health promotion messages with 399 health promotion messages (target: 100 health promotion messages).
• Two targets relate to medico-legal claims- neither the Case Management System nor the policy and legal framework to manage medico-legal claims were fully achieved.

The AG noted that this may be a potential area of fruitless and wasteful expenditure, as money was spent on developing and rolling out a Case Management System, but this is not being utilised fully by the provinces except one.

• The Department achieved its target of achieving an unqualified audit opinion for 2022/23.
This programme was allocated R732.0 million and spent R645.3 million (88.2%) up from 81.2% in the previous financial year.

Under-expenditure totalled R86.7 million.

5.2.1.2.

Programme 2: National Health Insurance (NHI) Out of the four planned targets, the Department achieved three (75%), up from 40% in the previous financial year.

More than 6.1 million patients are enrolled for receiving medicines through the Centralised Chronic Medicine Dispensing and Distribution (CCMDD) System (target: 5.5 million).
Table 4: Programme 2 Total targets set Targets achieved Targets not fully achieved Success rate Total budget Total budget spent 2022/23 4 3 1 75.0% R1.576 billion R1.366 billion (86.7%) 2021/22 5 2 3 40.0% R1.026 billion R838.1 million (81.7%) Spending, whilst still low, increased in the programme compared to the previous financial year in both actual expenditure and in percentage.
R1.4 billion was spent of a budget allocation of R1.6 billion (86.7%), an improvement on the R838.1 million (81.7%) spent in the previous year.

There 16 82 is still significant under-expenditure of R210.1 million.

Three of the four targets (75%) were reached.

The Department again exceeded the number of patients registered for receiving medicines via the CCMDD system, with 6.1 million patients registered against a target of 5.5 million.
A total 3 860 health facilities (target: 3 850) are able to provide data to the National Surveillance Centre.

Eighty- five percent (85%) of the funded NHI organogram posts are filled (target: 70%).

5.2.1.3.

Programme 3: Communicable & Non-Communicable Diseases In Programme 3, the Department fully achieved only eleven (11) out of twenty-one (21) targets or 52.4%.

This is down from its achievement of 6 out of 9 targets or 66.7% in the previous financial year.
The number of targets in this programme has fluctuated significantly over the past few financial years, from 57 in 2015/16, 16 in 2019/20, and 9 in 2021/22.

The Department spent 96.8% of its budget but achieved only 52.4% of its targets fully.
Table 5: Programme 3 Total targets set Targets achieved Targets not fully achieved Success rate Total budget Total budget spent 2022/23 21 11 10 52.4% R26.9 billion R26.1 billion (96.8%) 2021/22 9 6 3 66.7% R35.7 billion R35.6 billion (99.6%) The Department reports that none of the COVID-19 vaccine-related targets were fully achieved.

The reason cited for the underperformance was “Poor demand for vaccination”.
The Department reported that 252 (target: 100) State patients were admitted into psychiatric hospitals.

It attributes this over achievement to the presence of a dedicated manager who visited the hospitals and worked with relevant stakeholders.

None of the three Tuberculosis (TB)-related targets were reached.
• Drug-susceptible TB Treatment Success Rate was at 77.6% (target: 85%); • the death rate for drug susceptible TB was worse than aimed for with 13 708 people dying (target: 12 381); and 17 83 • fewer people started TB treatment 189 790 than the targeted 221 900.

The Department failed to reach the target with regards PHC facilities with youth zones as only 1 845 PHC facilities with youth zones (target: 2 000).
This programme was allocated R26.9 billion, down from R35.7 billion in the previous financial year, and spent R26.1 billion, which is a 96.8% expenditure rate.

Under-expenditure amounted to R874.5 million.

5.2.1.4.

Programme 4: Primary Health Care This Programme consists of District Health Services, Environmental and Port Health services and Emergency Services and Trauma.

In terms of performance, six (6) out of seven (7) targets (85.7%) were fully achieved.
Table 6: Programme 4 Total targets set Targets achieved Targets not fully achieved Success rate Total budget Total budget spent 2022/23 7 6 2 85.7% R5.155 billion R5.149 billion (99.9%) 2021/22 9 6 3 66.7% R255.7 million R251.5 million (98.4%) The Department reached its target of finalising an evaluation report on the review of the District Health System Policy framework for 2014-2019.

The District Health Management Offices (DHMO) Guidelines were tested in 38 Districts (target: 18 districts).
The number of PHC facilities with Ward Based Primary Heath Care Outreach Teams (WBPHCOT) was 2 630 (target: 2 700).

The reason given for this, was that there was a high turnover of Community Health Workers in favour of formalized paid work.

18 84 The number of PHC facilities that qualify as Ideal Clinics increased from 56% in 2021/22 to 59% at the end of the 2022/23 financial year.

This means that 2 053 out of 3 464 facilities achieved ideal clinic status.
Twenty-five (25) ports of entry (target: 25) compliant with international health regulations based on self-assessments.

All nine provinces were assessed for compliance with the Emergency Medical Services (EMS) Regulations.

The budget allocation for this Programme increased twenty-fold from R255.7 million in 2021/22 to R5.2 billion in 2022/23.
This increase is due to the shift of the district health component of the District Health Programmes Grant to this sub-programme from the Programme 3: Communicable and Non‐communicable Diseases.

5.2.1.5.

Programme 5: Hospital Systems This Programme develops national policy on hospital services and responsibilities by level of care; referral guidelines; developing hospital plans; and facilitating improvement plans for hospitals.
The Programme is also responsible for the management of the National Tertiary Services Grant and ensures that the planning of health infrastructure meets the needs of the country.

The two budget sub-programmes in this programme are, Health Facilities Infrastructure Management; and Hospital Management.
Table 7: Programme 5 Total targets set Targets achieved Targets not fully achieved Success rate Total budget Total budget spent 2022/23 4 3 1 75.0% R22.641 billion R22.198 billion (98.1%) 2021/22 3 3 0 100% R21.114 billion R21billion (99.5%) 19 85 All three Health Facilities Infrastructure Management targets (100%) were achieved, similar to the previous financial year when all three targets were achieved.

Nearly the entire budget (99.5%) for the programme was spent.
Targets achieved include: • 41 PHC facilities constructed or revitalised (target: 40); • 25 Hospitals constructed or revitalised (target: 21); and • 157 Public Health Facilities (Clinics, Hospitals, Nursing Colleges, EMS base stations) maintained, repaired and/or refurbished (target: 120).
Target not achieved: Regulations relating to designation/classification of Hospitals were not reviewed and published for comment as the Technical National Health Committee (Tech NHC) instructed further work to be done on the regulations, and that private sector hospitals be included.

This Programme has spent nearly its entire budget (R22.2 billion (98.1%)) of its R22.6 billion allocated funds.

This is in keeping with the previous financial years’ spending pattern.

5.2.1.6.
5.2.1.6.

Programme 6: Health System Governance and Human Resources The aim of this Programme is to develop policies for planning, managing and training of the health sector human resources and the planning, monitoring, evaluation and research sector.

It exercises oversight over all health public entities and statutory Health Professional Councils in South Africa.

It also provides forensic laboratory services.


Table 8: Programme 6 Total targets set Targets achieved Targets not fully achieved Success rate Total Budget Total budget spent 2022/23 9 7 2 77.8% R7.527 billion R7.487 billion (99.5%) 2021/22 7 4 3 57.1% R6.4 billion R6.4 billion (98.7%) Seven of the nine targets (77.8%) were fully achieved.
Those targets achieved include: • Nine (9) Public Nursing Colleges were supported to achieve accreditation for basic and specialist nursing and midwifery programmes; 20 86 • Two (2) Boards appointment recommendations made prior expiry of the term of office (SAMRC and OHSC); • Performance dashboards for national, provincial and district levels were developed; and • Revised Health Research priorities produced.
Targets not achieved include: • 2 046 PHC facilities qualify as ideal Clinics (Target 2 200); • Eight (8) Provinces supported to develop implementation plans for strengthening clinical governance; • Community service policy review not published; and • Alpha version of networked TB/HIV Plus Information System not developed pending an internal review of information systems processes.

This Programme has spent 99.5 % of its appropriated funds, amounting to R7.5 billion.

5.2.2.
5.2.2.

Human Resources The Department reports that it had a total of 1 133 permanent posts filled, out of 1 435 approved posts which represents a vacancy rate of 19.8%.

In the Senior Management Services (SMS) there is an overall vacancy rate of 23.8%.

The highest vacancy rates were experienced at level 14 (38.2%, n= 13), level 15 (20.0%, n=2) and level 13 (19.3%, n= 16).

This means that nearly a quarter of senior management positions are vacant.

5.2.3.
5.2.3.

Findings of the Auditor-General The Department’s audit outcome improved as it received an unqualified audit opinion with findings.

This is an improvement over the previous financial year when it had qualified audit opinion.

The AG found that the financial statements submitted for audit had not been prepared in accordance with the prescribed financial reporting framework and supported by full and proper records.

This is a repeat finding.


Material misstatements were identified by the auditors and were subsequently corrected.

21 87 Reliability of information As it did in previous financial years, the AG again found that: • Leadership did not exercise oversight responsibility regarding financial and performance reporting and compliance as well as related internal controls, which resulted in material misstatements and material findings reported in the audit report.
• Management did not implement proper record keeping in a timely manner to ensure that complete, relevant, and accurate information was available to support financial and performance reporting, resulting in the material findings reported.

• Management did not implement controls over daily and monthly processing and reconciling of transactions to ensure accurate and complete financial reporting.
• Management did not adequately review reported achievement in the Annual Performance Report to ensure that actual achievements are supported by appropriate evidence.

• Management did not adequately review the indicators and targets to ensure that they are clearly defined during planning processes, such that data will be collected consistently.

The AG again raised material findings on the usefulness and reliability of the reported performance information in Programme 2: National Health Insurance.
The AG was unable to find audit evidence that, for example 85% of funded posts were filled (target 70%), saying “it is likely that the target was not achieved.” In Programme 3 Communicable and Non-communicable diseases, the AG could not determine the actual achievement regarding the number of facilities offering HIV Self Screening and concluded that it was materially less than reported and that the achievement was lower than reported.

22 88 6.
22 88 6.

PERFOMANCE OF ENTITIES (2022/23) This section provides an overview of the financial performance of Entities for the 2022/23 financial year.

6.1.

South African Health Products Regulatory Authority (SAHPRA) The Medicines and Related Substances Act, (No.

101 of 1965), (as amended by Act 72 of 2008, together with Act 14 of 2015), provides for the establishment of SAHPRA, a Schedule 3A public entity, of the National Department of Health.

SAHPRA came into existence in February 2018.


SAHPRA is responsible for the regulation of health products intended for human and animal use; the licensing of manufacturers, wholesalers and distributors of medicines and medical devices, radiation emitting devices and radioactive nuclides; and to conduct clinical trials in a manner compatible with the national medicines policy.

6.1.1.
6.1.1.

Service Delivery Environment Some notable developments in terms of the service delivery environment during the reporting period included the following: • The Inspectorate and Regulatory Compliance programme continued to recruit and capacitate the technical levels of the unit, in improving service delivery.

• The Medical Devices unit saw the first renewals of medical device establishments for manufacturers, distributors and wholesalers.
• The ability to attract and retain the best talent especially in the technical filed has become a challenge due to competition for best talent in the health, regulatory and pharmaceutical market.

• The rapid turnaround times for non-COVID-19 clinical trial protocol assessments were maintained.

• The public uptake of the MedSafety App continues to grow and there are plans in place to extend its use and integrate the App into programmatic HIV and TB pharmacovigilance.
• Important discussions were held between SAHPRRA and the NDoH to put in place measures to integrate pharmacovigilance into the public health system, from the point 23 89 of care to SAHPRA.

This integration framework will be in place by end financial year 2023/24.

6.1.2.

Overview of SAHPRA’s Performance During the period under review, SAHPRA achieved 17 out of the 27 planned targets (63%, a decline, as compared to 72% in 2021/22).
The performance achievements during the 2022/23 financial year are highlighted below: Table 9: Highlights of some of SAHPRA’s 2022/23 Performance PROGRAMME PLANNED TARGET 2022/23 1.

LEADERSHIP SUPPORT AND 2.
HEALTH PRODUCTS AUTHORISATION Obtain an unqualified opinion issued by the Auditor-General Total revenue generated from fees (R170 million) Break-even of expenses and revenue 60% of prioritised recommendations from the 2022/23 stakeholder survey implemented 80% of the change management interventions implemented 50% of the workplace skills plan implemented 95% of budgeted positions filled Enterprise Architecture approved by the Board 100% of medicine registration backlog cleared 100% of medicine variation applications backlog cleared 80% of New Chemical Entities finalised within 490 working days 75% of generic medicines finalised within 250 working days Obtain ISO 9001:2015 certification WHO maturity level 3 obtained ACTUAL PERFORMANCE 2022/23 Achieved: Unqualified audit opinion obtained Achieved: R1697 million Achieved: R22.5 million surplus Achieved: 60% Achieved: 80% Not Achieved: 15% Not Achieved: 65% of budgeted positions filled Not Achieved: Enterprise Architecture has not been approved by the Board Achieved: 100% Achieved: 100% Achieved: 100% Not Achieved: 57% Not Achieved: ISO 9001:2015 certification was deprioritised and deferred to 2023/24 financial year Achieved: WHO Maturity level 3 obtained 24 90 PROGRAMME PLANNED TARGET 2022/23 3.
INSPECTORATE AND REGULATORY COMPLIANCE 4.

CLINICAL AND PHARMACEUTICAL EVALUATION 5.
MEDICAL DEVICES AND RADIATION CONTROL 60% of new GMP and GWP related licenses finalised within 125 working days 70% of permits finalised within 20 working days 70% regulatory compliance investigation reports reproduced within 30 working days Finalise 85% of applications for the sale of unregistered Category A (human medicines) within three (3) working days Finalise 80% of human clinical trial applications within 90 working days 70% of reports on health products safety signals issued within 40 working days Four (4) safety awareness webinars held 95% of lot release requests finalised within 30 working days 70% of medical device establishment licence applications finalised within 90 days Develop seven (7) Guidelines to support the medical device registration regulations published Finalise 50% of applications for radionuclide authorities within 30 working days Finalise 70% of licence applications for listed-electronic products within 30 working days Board approved Co-Regulation Model with the National Nuclear Regulator ACTUAL PERFORMANCE 2022/23 Not Achieved: 22% Achieved: 79% Achieved: 72% Achieved: 87% Achieved: 104% Not Achieved: 40% reports issued within 40 working days Achieved: 06 Not Achieved: 81% Achieved: 136% Not Achieved: Guidelines have been placed on hold until the regulations are finalised from NDoH Achieved: 83% Achieved: 169% Not Achieved: Co-Regulation Model submitted to the EXCO for review and approval 6.1.3.
Financial Performance SAHPRA’s total revenue for 2022/23 was estimated at R396.3 million (R368.8 million in 2021/22), with R228.8 million from exchange transactions and R167.5 million from non- exchanged transactions.

During 2022/23, SAHPRA realised a significant year on year increase 25 91 in fee income generated, amounting to R197 million from R169 million in 2021/22.
The increase in revenue generation was mainly due to the impact of the revised Fee Gazette as well as an increase in application reviews finalised.

SAHPRA’s total expenditure was R373.8 million against a budget of R349.4 million.

SAHPRA’s surplus at the end of the financial year totalled R22.5 million, as compared to an adjusted surplus of R22 million in 2021/22.
Table 10: Statement of Financial Performance Current Assets Non-current Assets Total Assets Total Liabilities Net assets Accumulated surplus REVENUE Revenue from exchange transactions Revenue from non-exchange transactions Total revenue EXPENDITURE Total expenditure Surplus for the year 2022/23 R’000 345 424 31 064 376 489 297 958 69 971 69 971 228 821 167 473 396 294 (373 787) 22 507 2021/22 R’000 264 705 29 438 294 144 238 442 47 464 47 464 192 952 175 848 368 800 (346 743) 22 057 By end of March 2023, SAHPRA had a net asset position of R25.4 million (largely due to the accounting surplus).
The current assets (totalled R345.4 million) include cash and cash equivalents of R329.6million.

Liabilities (current and non-current) amounted to R306.5 million (from R246.7 million in 2021/22).

6.1.4.

Report of the Auditor-General o SAHPRA obtained an Unqualified audit opinion with findings.

o The AGSA identified material misstatements in the annual performance report submitted for auditing.
Material findings on the reported performance information were identified 26 92 under Programme 2 – Health Products Authorisation.

o The AGSA identified significant internal control deficiencies that resulted in the material findings.

o On revenue management, the AG reported that effective and appropriate steps were not taken to collect all revenue due.

6.2.

Office of the Health Standards Compliance (OHSC) The National Health Amendment Act (No.
12 of 2013) establishes OHSC as a Schedule 3A Public Entity in terms of the Public Finance Management Act (PFMA).

Section 78 of the same Act provides for the OHSC to promote and protect the health and safety of the users of health services in South Africa.
The OHSC is mandated to, amongst others: • Advise the Minister on matters relating to norms and standards for the national health system and the review of such norms and standards, or any other matter referred to it by the Minister; • Inspect and certify compliance by Health Establishments (HEs) with prescribed norms and standards, or where appropriate and necessary, withdraw such certification; • Investigate complaints about the national health system; • Monitor risk indicators as an early-warning system about serious breaches of norms and standards and report any breaches to the Minister without delay; • Identify areas and make recommendations for intervention by a national or provincial department of health or municipal health department, where necessary, to ensure compliance with prescribed norms and standards; • Recommend quality assurance and management systems for the national health system to the Minister for approval; and • Keep records of all OHSC activities.
6.2.1.

Overview of the OHSC’s Performance The OHSC achieves its mandate through five programmes, namely: Administration; Compliance Inspectorate; Complaints Management and Office of the Health Ombud; Health Standards Design, Analysis and Support; and Certification and Enforcement.

27 93 Overall, the OHSC had 23 output indicator targets for the 2022/23 financial year, 65% (15) were achieved, 26% (6) not achieved and 9% (2) were partially achieved.
Programme 1: Administration The purpose of this programme is to provide the leadership and administrative support necessary for the OHSC to deliver on its mandate and comply with all relevant legislative requirements.

This programme has four sub-programmes, namely, Human Resource Management, Finance and Supply Chain Management, Information and Communication Technology (ICT) as well as Communication and Stakeholder Relations.
Table 12: Performance on Planned Targets – Programme 1 Total number of targets in APP 2022/23 Targets reported in Annual Report 2022/23 Targets fully achieved Partially achieved Targets not achieved Performance success rate Budget Expenditure Financial expenditure rate 2022/23 7 8 6 - 2 75% R64.7 million R76.8 million 118.7% 2021/22 7 7 6 - 1 85.7% R61.4 million R68.8 million 112% Six (75%) of the eight targets for Programme 1 were fully achieved.
The targets relating to the turnaround time for the filling of vacancies and the certification of inspectors after completion of training were not achieved.

This programme had an approved allocation of R64.7 million, overspent by R12 million.

This is a 6% (R3.7 million) increase as compared to the previous financial year.
Programme 2: Compliance Inspectorate The purpose of this programme is to manage the inspection of health establishments in order to assess compliance with the national norms and standards.

This programme is also responsible for conducting routine inspections.

Table 12 below discusses the performance on annual planned targets against those set on the annual performance plan.
28 94 Table 13: Performance on Planned Targets – Programme 2 Total targets in APP 2022/23 Targets reported in Annual Report 2022/23 Targets fully achieved Partially achieved Targets not achieved Performance success rate Budget Expenditure Financial expenditure rate 2022/23 4 5 2 - 3 40% R58.5 million R75.9 million 129.7% 2021/22 5 4 3 - 1 75.0% R54.1 million R49.7 million 91.9% During the period under review, Programme 2 has regressed in its perfomance against set targets, from acheiving 75% in 2021/22 to 40% in 2022/23.
Targets not achieved relates to the inspection of health establishments (both public and private and the publcishing of the complaince status report.

In terms of financial performance, the initially approved budget was R58.5 million, and the total expenditure was R75.9 million.

The programme overspent by R17.4 million.


Programme 3: Complaints Management and Office of the Health Ombud The purpose of this programme is to consider, investigate and dispose of complaints relating to the non-compliance with prescribed norms and standards in a procedurally fair, economical and expeditious manner.

This programme has three sub-programmes: Complaints Call Centre; Complaints Assessment Unit; and Complaints Investigation Unit.
Table 14: Performance on Planned Targets – Programme 3 Total targets in APP 2022/2023 Targets reported in Annual Report 2022/23 Targets fully achieved Targets not achieved Targets partially achieved Performance success rate Budget Expenditure Financial expenditure rate 2022/23 5 5 1 4 - 20.0% R20.9 million R23.5 million 112.4% 2021/22 5 5 1 4 - 20.0% R20.4 million R22.1 million 108.3% 29 95 There was no improvement in performance under Programme 3 during the period under review.
Similar to the previous financial year (2021/22), only one of five targets was fully achieved.

Some of the reasons cited for the under-performance, is the historic backlog cases (135), dating back to 2017.

This was further compounded by staffing constraints.

Other reasons were attributed to the delays and lack of responses from health establishments and complainants for requested information.
The budget for this programme was R20.9 million and the expenditure by end of the reporting period was at R23.5 million.

The programme overspent by R2.6 million.


Programme 4: Health Standards Design, Analysis and Support The purpose of the Health Standards Design, Analysis and Support programme is to provide high- level technical support to the office through research, health systems analysis, development of data collection tools, training in the use of these tools, and analysis and interpretation of the data collected.
The programme also drives the establishment of stakeholder networks for capacity building and the co-creation of information management systems.
Table 15: Performance of Planned Targets – Programme 4 Total targets in APP 2022/23 Targets reported in Annual Report 2022/23 Targets fully achieved Targets partially achieved Targets not achieved Performance success rate Budget Expenditure Financial expenditure rate 2022/23 2 2 2 - - 100% R10.9 million R13.2 million 121% 2021/22 2 2 2 - - 100% R13.4 million R9.8 million 73.1% All the targets in this programme were fully achieved.
In the beginning of the reporting financial year, this programme was allocated R10.9 million, with an expenditure of R13.2 million.

The programme over-spent by R2.2 million, as compared to an under-expenditure of R3.6 million in the 2021/22 financial year.

30 96 Programme 5: Certification and Enforcement The purpose of this programme is to certify compliant health establishments and take enforcement action against non-compliant health establishments.
The programme is required to publish information relating to the certificates of compliance issued and enforcement action taken.

Table 15 shows the performance of this programme.


Table 15: Performance of Planned Targets – Programme 5 Total targets in APP 2022/23 Targets reported in Annual Report 2022/23 Targets fully achieved Targets partially achieved Targets not achieved Performance success rate Budget Expenditure Financial expenditure rate 2022/23 3 3 3 - - 100% R2.49 million R2.50 million 99.9% 2021/22 3 3 2 - 1 66.7% R2.7 million R2.2 million 81.5% Programme 5 had three planned targets, all three were achieved.
The performance success rate for the period under review is 100%.

This is an improvement from the previous financial year’s performance of 66.7%.

The programme had a budget of R2.49 million and its annual expenditure was R2.50 million.

6.2.2.

Financial Performance The OHSC’s revenue is derived from an allocation from National Treasury under the budget vote for the National Department of Health.
During the reporting period (2022/23), the entity was allocated R157.5 million (compared to R157.9 million in 2021/22).

The total revenue generated in 2022/23 increased by 2% compared to the previous financial year.

Due to the lifting of the COVID-19 lockdown restrictions, the OHSC’s expenditure increased from R152.2 million in 2021/22 to R191.7 million in 2022/23, representing an increase of 21%.
The Compliance Inspectorate programme’s expenditure was the highest at 40%, largely as a result of increased travel expenditure as well as the use of additional staff to conduct inspections.

31 97 Table 16: Statement of Financial Performance Total Revenue Operating expenses Total expenditure (Deficit) /Surplus for the Year 2022/23 R’000 160.8 (51.9) (187.2) (26.4) 2021/22 R’000 160.1 (40.8) (149.0) 11.0 The OHSC was approved to retain its surplus amount of R53.6 million.
The surplus was largely used to fund the employment of staff on short-term contracts to supplement existing capacity and funding other operational expenditures.

Table 17 below depicts the financial position comprising assets, non-current assets, current liabilities and non-current liabilities as at the end of the reporting period.
Table 17: Statement of Financial Position Current Assets Non-current Assets Total Assets Current Liabilities Non-Current Liabilities Total Liabilities Net assets 2022/23 R’000 49.2 10.8 60.0 19.6 - 19.6 40.4 2021/22 R’000 65.9 12.2 78.1 12.4 - 12.4 65.8 6.2.3.

Report of the Auditor-General o The OHSC obtained an Unqualified audit opinion with no findings from the AGSA for the financial year under review.

6.3.
6.3.

Office of the Health Ombud (OHO) The Office of the Health Ombud (OHO) is an independent body established in terms of the National Health Amendment Act of 2013.

The OHO is located within the Office of Health Standards Compliance (OHSC) and shares financial allocation and human resources and reports to and is accountable to the Minister of Health.
The OHO was established and specifically mandated to protect and promote users of health services by considering, investigating and disposing of complaints in the national health system relating to non-compliance with prescribed 32 98 norms and standards and contribute towards a development of public service culture characterised by fairness, dedication, commitment, openness, accountability and the promotion of the right to good public administration.

6.3.1.
6.3.1.

History and Pattern of Complaints The number of complaints received by the OHO since its inception is14 232 with the majority (>93%) being resolved.

In terms of risk classification, 13 791 (96.6%) of all complaints received were risk-rated low, 284 (2%) medium risk, 112 (0.79%) high risk and 45 (0.32%) extreme risk.

The provincial analysis pattern shows that Gauteng Province accounts for over 50% of complaints and the Northern Cape accounts for the least complaints.
Over 88% of complaints are lodged through e-mails and 99% are rated as low risk in nature.

Of the complaints lodged, 65% are from the public health sector while 35% are from the private health sector.

6.3.2.

Overview of the OHO’s Performance The Office of the Health Ombud carry out its mandate through the Complaints Management Programme, which comprises four sub-programmes, namely, Human Capital, Complaints Call Centre, Complaints Assessment Unit and the Complaints Investigation Unit.

6.3.2.1.
6.3.2.1.

Complaints Management Programme The Complaints Management Programme comprises three sub-programmes, namely: Complaints Call Centre; Complaints Assessment Unit; and Complaints Investigation Unit.

Sub-programme: Human Capital During the reporting period 2022/23, the Complaints Management Programme operated at 91% (74% in 2021/22) of its funded human resource complement, with 21 of 23 funded posts filled.
Six of the filled posts were funded on a contract basis within the Complaints Call Centre and 33 99 Complaints Assessment Unit.

These additional resources made a significant contribution in ensuring smooth operations and clearing the backlog in cases requiring assessment.
Sub-programme: Complaints Call Centre The purpose of the Complaints Call Centre is to receive complaints from the public regarding breaches of norms and standards by health establishments through calls, walk-in submissions, emails and written letters.

The figure below depicts the analysis of complaints received between 2016/17 and 2022/23 financial years.
Figure 1: Number of Complaints received from 2016/17 to 2022/23 3500 3000 2500 2000 1500 1000 500 0 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 No.

of complaints 730 1122 1904 2083 2429 3317 2647 Case patterns: As shown in figure 1, the number of people utilising the Complaints Call Centre and Assessment Unit has grown steadily over the past six years.
In 2022/23 the Complaints Call Centre saw a decrease in complaints received and registered, that is, 2647 complaints, as compared to 3317 in 2021/22.

Provincial analysis pattern: Between 2016 and 2023, the majority of complaints (8270, 58%) were received from Gauteng, followed by KwaZulu-Natal and Western Cape recording 11% (1565) and 10% (1420) complaints, respectively.
The Office is of the view that the proximity of Gauteng to its offices, coupled with higher literacy rates and confidence of residents in using the reporting systems may be a contributory factors to the higher share of complaint received from this province.

34 100 Method by which complaints were lodged: During the period under review, 81% of complaints were lodged via email.
There were 2662 (18%) complaints lodged telephonically, 41 (0.3%) were postal submissions and 45 (0.3%) were lodged through walk-in submissions.

Fourteen (>1%) complaints were lodged through social media channels.

Risk classification: Of the 2647 complaints received by the Complaints Call Centre, 98% (2590) were rated low-risk complaints.

The Call Centre staff facilitated the resolution of these complaints by contacting the relevant health establishments and mediating to ensure satisfactory outcomes.
All medium, high and extreme-risk cases that involved breaches of promulgated norms and standards were escalated for assessment or investigation.

Status of complaints received: During the reporting period, the majority of complaints lodged (93%) were closed by the Call Centre, of which 93.4% were closed within 25 days, exceeding the annual target of 80%.
Sub-programme: Complaints Assessment Unit The purpose of the Complaints Assessment Unit to assess medium-risk-rated complaints and either propose ways to resolve them or refer them to the Investigation Unit for investigation.

The Complaints Assessment Unit has been under-resourced, it had 12 backlog complaints at the beginning of 2022/23.

The Unit managed to resolve all 12 complaints and closed the financial year with no backlog complaints for the first time since 2018.
The Unit also managed to resolve 57 newly assigned complaints, of which 40 were resolved within 30 days of receiving feedback from the complainant and/or health establishment.

The Complaints Assessment Unit referred 24 cases for investigation, thereby achieving 60.8% against a target of 65%.

Sub-programme: Complaints Investigation Unit The Complaints Investigation Unit is comprised of two sections, namely: Healthcare and Legal.
The OHO notes that the 2022/23 financial year marks the 5th financial year that the unit operated with four vacancies, Director Complaints Investigations; two Investigators and Deputy Director: 35 101 Legal, mainly attributable to funding limitations.

These vacancies are said to contribute to the prolonged turnaround time for complaints resolution.

In 2022/23 reporting period, 29 cases were resolved, as compared to 23 cases in 2021/22.
Of the 29 cases thirteen (13 or 44%) were from Gauteng, in the following disciplines: General (3), Orthopaedic (1), Gynaecology and Obstetrics (3), Theatre (1), Intensive Care Unit (1), Internal Medicine (1), Maternity (2) and Surgery (1).

In terms of the provincial analysis pattern, two (2) complaints were received from the Free State, two (2) from KwaZulu-Natal, two (2) from Mpumalanga, one (1) from Northern Cape and one (1) from the Western Cape.

6.3.3.
6.3.3.

Outstanding Issues Some of the outstanding issues were highlighted as follows: i) OHO Bill and separation of OHO There is a need to finalise the OHO Bill in order to separate it from the OHSC.

The current configuration as defined in the Nation Health Act, defies all best practices internationally, in corporate governance principles and renders the OHO less efficient and creates governance dysfunctionality.
ii) Backlog cases In addressing the backlog cases, staffing shortages, budgets restrictions and the governance of the OHO needs to be prioritised.

The functional relationship between the OHO and the Complaints Unit located in the NDoH needs to be resolved.

iii) Creating a professional career track In the absence of an organogram and a secure budget, it is important to create a career structure for the staff of the Office in order to ensure staff security and ambition.

36 102 6.4.
36 102 6.4.

South African Medical Research Council (SAMRC) The SAMRC is an entity of the NDoH and is legislated to improve the health and quality of life of South Africans through research, development, and technology transfer.

It is also responsible for conducting research on South Africa’s quadruple burden of disease i.e., maternal, new-born and child health, HIV/AIDS and TB, non-communicable diseases, and interpersonal violence.
The SAMRC is a section 3A public entity and is accountable to Parliament for its performance and budget and derives its mandate from the South African Medical Research Council Act (No.

58 of 1991) as amended.

Importantly, it renders its remit by acquiring evidence-based information to inform health policy and practice and improve the quality and health status of South Africans.

6.4.1.
Highlights of achievements A synopsis of the entity’s achievements over the reporting period and post the COVID-19 pandemic: • Raised more than R500 million, together with the National Department of Science and Innovation (DSI), to support more than 50 research projects; • Initiated the Sisonke Heterologous mRNA-1273 boost after prime with Ad26.COV2 in 2022 to examine the real-world effectiveness of a heterologous boost with the Moderna mRNA-1273 vaccine amongst those who received either a single or double dose of the Johnson and Johnson Ad26; • Convened a consortium of development partners known as the South African mRNA Vaccine Consortium (SAMVAC), comprising the University of the Witwatersrand, the University of Cape Town, the African Health Research Institute, the University of Stellenbosch, North-West University, the National Institute for Communicable Diseases, the SAMRC and Afrigen Biologics to develop, among others, a portfolio of (m)RNA vaccine candidates by Africa for Africa; • Partners with the World Health Organization (WHO), Medicines Patent Pool (MPP), Afrigen Biologics (Pty) Limited, the Biologicals and Vaccines Institute of Southern Africa (Biovac), and the Africa Centres for Disease Control and Prevention (Africa CDC) for a 37 103 diversified vaccines manufacturing capability to respond to COVID-19 pandemic and future pandemics; • Established an mRNA Technology Transfer Hub in 2021 for building capacity in low- and middle-income countries to produce mRNA vaccines through a centre of excellence and training; and • Commenced Biomanufacturing Capacity Development Programme with the Chan Soon- Shiong Family Foundation (CSSFF) in the 2022/23 financial year with the first cohort of students.
The programme aims to build a vaccine manufacturing workforce, with a commitment of R100 million over 5 years from the CSSFF and co-funding from the SAMRC.

6.4.2.

Overview of the SAMRC’s Performance Table 18 below mirrors the reported performance against the annual performance plan for 2022/23 financial year.
Table 18: Highlights of some of the SAMRC’s 2022/23 Performance IMPACT STATEMENT Strengthening of corporate governance processes towards an unqualified audit opinion from the Auditor General STRATEGIC PERFORMANCE INDICATOR FOR 2020/21 - 2024/25 A clean audit opinion on the SAMRC the Auditor- General Percentage of the government allocated SAMRC budget spent on administration from FINAL PERFORMANCE TARGET 2022/23 Performance target Clean Audit.
TARGET ACHIEVED Performance target 20% but due to over-performance, a total of 17% of on the administration.

TARGET ACHIEVED allocation was spent Promote the improvement of health and quality of life (prevention of ill health, improvements in public health and treatment) in South Africa through research.

Number of accepted and published articles, journal book chapters and books by SAMRC affiliated and funded authors.

Performance target - 700 TARGET EXCEEDED - 1 455 Articles published.
In 2021/22, the target was 3150 significantly the decreased reporting period.
for Number of accepted and published journal articles by Performance target - 180 38 104 IMPACT STATEMENT an build innovation To community, developing life changing health solutions for South Africa, Africa and beyond form of To provide research support in funding and the supervision next to generation of scientists in the broad field of health the To contribute to building a policy-maker and public health, understanding of and ill-heath, drivers of PERFORMANCE STRATEGIC INDICATOR FOR 2020/21 - 2024/25 SAMRC grant-holders with the acknowledgement SAMRC.
of Number of new innovation and technology projects funded by the SAMRC aimed at developing, testing and/ or implementing new or improved health solutions.

of Number disclosures made by SAMRC and innovation.

innovation the intramural research awards of Number (scholarships, fellowships and grants) by the SAMRC for MSc, PhD, Postdocs and Early Career, Scientists.
Number of awards by the SAMRC to Black South African citizens permanent resident MSc, PhD, Postdocs and Early Career Scientists classified as African.

and Number of awards by the SAMRC to MSc, PhD, Postdocs and Early Career Scientists historically from disadvantaged institutions (HDIs).

of local Number or international policies, reports and guidelines that reference SAMRC research FINAL PERFORMANCE TARGET 2022/23 TARGET EXCEEDED – 445 articles published.
In 2021/22, the target was 825 and was the decreased significantly reporting period.

Performance target – 4 TARGET ACHIEVED for Similar to the previous point, in 2021/22, the target was 70 and was significantly the decreased reporting period.

Performance target – 1.

TARGET ACHIEVED for the decreased SAMRC target significantly from 5 in 2021/22 to 1 in 2022/23.

Performance target – 140 TARGET ACHIEVED with 171 awards being made.
Again, SAMRC decreased the target significantly from 498 in 2021/22 to 140 in 2022/23.

Performance target – 105 TARGET ACHIEVED - 108 awards.

Performance target - 75 TARGET NOT ACHIEVED In 2021/22, this target was not met either.

Performance target 5.


TARGET ACHIEVED 39 105 IMPACT STATEMENT PERFORMANCE STRATEGIC INDICATOR FOR 2020/21 - 2024/25 FINAL PERFORMANCE TARGET 2022/23 practice, interventions and technologies that can prevent strengthen ill health and health and encouraging use of research evidence in policymaker, practitioner and public decision-making.

services Number of conferences, seminars and continuing development points workshops supported by the SAMRC In 2021/22, this target was 27 and was drastically reduced.
Performance target – 10.

TARGET ACHIEVED - 73 conferences and seminars held.

6.4.3.

Financial Performance Table 19 below shows a slightly higher revenue of R1.270 billion in 2022/23 as compared to R1.267 billion in 2021/22.

Other income reflects a sizeable increase, i.e.

R28 million in 2022/23 from R17.6 million in 2021/22.
Importantly, the operating deficit shows R34.3 million during period under review, while the investment income increased from R42.5 million in 2022/23 up from R25.7 million in 2021/22.

By end of March 2023, the surplus increased from R6 million in 2021/22 to R7.5 million.
Table 19: Statement of Financial Performance Revenue Other income Operating expenses Operating (deficit) surplus Investment income Fair value adjustments Finance costs (Deficit) Surplus for the year 2022/23 R’000 1,270,637,434 28,030,495 (1,333,008,032) (34,340,103) 42,545,875 (367,464) (293,179) 7,545,129 2021/22 R’000 1,267,978,551 17,612,723 (1,306,199,153) (20,607,879) 25,729,929 1,103,297 (204,087) 6,021,260 Table 20 presents a healthy financial position for the fiscal year under review.
The total assets leaped from R1 billion the previous financial year to R1.2 billion by end of March 2023.

Conversely, the total liabilities stood at R737.5 million, which is a slight increase from R634.9 million documented in the preceding financial year.

Importantly and notable, the 40 106 accumulated surplus increased by R8 million from R426.7 million in the preceding reporting period to R434.3 million by end of March 2023.
Table 20: Statement of Financial Position Current Assets Non-Current Assets Total Assets Current Liabilities Non-Current Liabilities Total Liabilities Net Assets Accumulated surplus 2022/23 R’000 874,256,095 297,580,787 1,171,836,882 727,196,898 10,324,766 737,521,664 434,315,218 434,315,218 2021/22 R’000 786,821,546 274,852,335 1,061,673,881 624,003,894 10,899,898 634,903,792 426,770,089 426,770,089 6.4.4.

Report of the Auditor-General o The Auditor-General gave the entity a clean audit outcome.
This has become a norm for the SAMRC over the years.

o The AG did not identify any significant deficiencies with respect to internal controls.

o The AG selected Programme 2 and 3 and did not identify any significant deficiencies in internal control.

6.5.

National Health Laboratory Services (NHLS) The NHLS derives its mandate from the National Health Laboratory Service Act (No.

37 of 2000) and operates as a Schedule 3A Public Entity.
The Act provides for the Board to govern the entity together with the Chief Executive Officer (CEO).

The NHLS continues to be the most significant public laboratory in the country with footprints in all nine provinces.

Among others, the NHLS is required to provide quality, affordable and sustainable health laboratory and related public health services to all public healthcare providers, government institutions and any private healthcare provider in need of its service.
It is further authorised to provide training for health science education in partnership with medical faculties at universities and universities of technology.

41 107 6.5.1.
Highlights of achievements The following are some of the highlights of the NHLS that have been reported for the period under review: • Significantly decreased the creditors’ days to 34 days; • Generated a surplus of R3.2 billion for the 2022/23 fiscal year; • Maintained an unqualified audit report for the 2022/23 fiscal year; • Published 664 articles in peer-reviewed journals in the year under review; • Increased its total assets from a restated R7.8 billion to R10.5 billion; • Decreased its current liabilities from a restated R2.2 billion to R1.9 billion; • Recalculated the provision for doubtful debt in line with the new accounting framework (GRAP104); • Collected R11.0 billion from provincial departments compared to R10.8 billion in the previous year (2021/22); • Increased the count of test volumes administered from 106 million in 2021/22 to 110 million in the 2022/23 fiscal year; and • NICD continued to play a pivotal role in ensuring swift interventions regarding communicable disease outbreaks such as cholera, typhoid fever, and measles in South Africa.
6.5.2.

Overview of the NHLS’s Performance The NHLS carry out its mandate through its six programmes, namely, Laboratory Service; Academic Affairs, Research and Quality Assurance; Surveillance of Communicable Diseases; Occupational and Environmental Health and Safety; Forensic Chemistry Laboratories; and Administration.

Programme 1: Laboratory Service The annual report only reports on 10 targets, of which 5 are accounted as having been achieved.
Shortage of water, especially in the Eastern Cape and the increased uptake of cervical cancer screening, are cited as drivers for failure to achieve the planned targets.

As shown in table 21, the 42 108 total expenditure is R8.22 billion, slightly less compared to that of the preceding year.

However, the under-expenditure was R592 million.
Table 26: Performance on Planned Targets – Programme 1 Targets reported in APP 2022/23 Targets reported in Annual Report 2022/23 Targets fully achieved Targets not achieved Performance success rate Expenditure Allocation Expenditure rate 2022/23 20 10 5 5 50% R8.22 billion R8.81 billion 93.3% 2021/22 23 12 8 4 66.6% R9.01 billion R8.96 billion 100.5% Programme 2: Academic Affairs, Research and Quality Assurance Some of the reasons for not achieving the intended outcome was that there were renovations at Diagnostic Media Products at Sandringham which led to the certification process being suspended.
Of the 11 reported targets, seven (7) were achieved while four (4) were not.

Another reason for failing to achieve the target was that the assessment of one of the laboratories was conducted in February 2023.

As shown on the table below, the expenditure stood a R270 million.
Table 27: performance of planned targets – Programme 2 Targets reported in APP 2022/23 Targets reported in Annual Report 2022/23 Targets achieved Targets not achieved Performance success rate Expenditure Allocation Expenditure rate 2022/23 22 11 7 4 2021/22 22 11 11 0 63.6% R270 million R350.23 million 77.1% 100% R383.3 million R343.19 million 111.6% Programme 3: Surveillance of Communicable Diseases This is one of the entity’s Programmes that achieves 100% of its performance targets.
It is reported in this Programme that a significant number of NICD laboratories were SANAS accredited during 43 109 period under review.

This programme was allocated R459.88 million and the expenditure stood at R381.55 million.

The Programme reported an under-expenditure of R78.33 million.
Table 23: Performance on Planned Targets – Programme 3 Targets reported in APP 2022/23 Targets reported in Annual Report 2022/23 Targets achieved Targets not achieved Performance success rate Expenditure Allocation Expenditure rate 2022/23 14 7 7 0 100% R381.55 million R459 88 million 82.9% 2021/22 14 7 7 0 100% R420.16 million R443.24 million 94.7% Programme 4: Occupational and Environmental Health and Safety The overall performance success rate for Programme 4 was 100% of the reported performance targets.
Despite the performance targets being achieved, the entity reports that test volumes dropped due to COVID-19 and they have not picked up since then.
Table 24: Performance on Planned Targets – Programme 4 Targets reported in APP 2022/23 Targets reported in Annual Report 2022/23 Targets achieved Targets not achieved Performance success rate Expenditure Allocation Expenditure rate 2022/23 8 4 4 0 100% R140.23 million R166 million 84.4% 2021/22 8 4 4 0 100% R141.24 million R157.73 million 89.5% Programme 5: Forensic Chemistry Laboratories (FCL) This Programme has been effectively integrated into the NHLS by April 2023, hence it does not include historical data.
Some of the reasons for the significant failures are attributed to deficiencies in infrastructure and equipment breakdowns, which limited the sample processing capacity at laboratories.

Corrective measures include acquiring additional and larger facilities for the laboratories, which have been severely impacted by infrastructure deficiencies.
Another 44 110 intervention relates to additional equipment being acquired to achieve sample processing capacity at laboratories to address the backlog and manage all new specimens that are being received.
Table 25: Performance of Planned Targets – Programme 5 Targets reported in APP 2022/23 Targets reported in the Annual Report 2022/23 Targets achieved Targets not achieved Performance success rate Expenditure Allocation Expenditure rate 2022/23 8 4 1 3 25% R128.37 million R138.40 million 92,7% 2021/22 - - - - - - - The NHLS has reviewed and updated the FCLs organogram to improve oversight.

Total budget allocation was R138.40 million and the total expenditure was R128.37 million.
Compensation of Employees overspent with R-7.6 million.

Programme 6: Administration This Programme has a number of sub-programmes i.e.

Financial Management, Human Resources and Information and Communication Technology.

The reason for the under-expenditure is attributed to non-filled posts.

In 2021/22 reporting period this Programme overspent by R1.77 billion, while in 2022/23 fiscal year, it underspent by R1.47 billion.
Table 26: Performance of Planned Targets – Programme 6 Targets reported in APP 2022/23 Targets reported in the Annual Report 2022/23 Targets achieved Targets not achieved Performance success rate Expenditure Allocation Expenditure rate 2022/23 34 17 11 6 64.7% R334.99 million R1 805.38 billion 81.4% 2021/22 34 17 15 2 88.2% R2 774.46 billion R1 004.67 billion 276,1% 45 111 6.5.3.
Financial Performance Emanating from the restatement of the entity’s financial statement, its total revenue reflects an amount of R11.8 billion in 2022/23 less from R12.2 billion in 2021/22.

A significant surplus before taxation amounts to R3.231 billion, which is a jump from R74.8 million in 2021/22.

Also noted is the change from the deficit of R-117.9 million in 2021/22 to a surplus of R2.846.3 billion in Operating Deficit/Surplus.
Table 27: Statement of Financial Performance – Economic Entity (NHLS + SAVP) REVENUE Cost of Sales Gross surplus Other income OPERATING EXPENSES Operating Deficit/Surplus Interest income Fair value adjustments Interest Expense Surplus before taxation Taxation SURPLUS FOR THE YEAR 2022/23 R’000 11 842 711 (9 152 358) 2 690 353 508 844 (352 868) 2 846 329 384 878 - (118) 3 231 089 2 978 3 234 067 2021/22 R’000 12 237 665 (10 117 395) 2 120 270 400 773 (2 639 024) (117 981) 201 404 1 (8 546) 74 878 1 553 76 431 By end of March 2023, the total assets were R10.5 billion, which reflects a jump from R7.8 billion in the previous fiscal year.
The total liabilities decreased from R3.2 billion in the preceding fiscal year to R2.7 billion in 2022/23.

Table 28: Statement of Financial Position – Economic Entity (NHLS + SAVP) Current Assets Non-current Assets Total Assets Current Liabilities Non-Current Liabilities Total Liabilities Net assets 2022/23 R’000 9 057 267 1 459 932 10 517 199 1 868 143 836 800 2 704 943 7 812 256 2021/22 R’000 6 300 786 1 484 191 7 784 977 2 224 858 982 858 3 207 716 4 577 261 46 112 6.5.4.
Report of Independent Auditors o The NHLS received an Unqualified audit opinion with findings from the independent auditing firm Nexia SAB&T.

o The NHLS incurred irregular expenditure amounting to R705 million for the reporting period.

It also incurred R1.2 billion irregular expenditure in 2021/22 due to the infringement of proper tender processes.

o Effective and appropriate steps were not taken to prevent irregular expenditure.
The majority of the irregular expenditure incurred was due to non-compliance with laws and regulations governing procurement and contract management.

o An amount of R3.9 billion was declared impaired due to irrecoverable debt.

In 2021/22 an amount of R4.7 billion was also impaired due to similar reasons.
o Annual financial statements submitted for auditing were not prepared in accordance with the prescribed financial reporting framework and supported by full and proper records, as required by section 55(1) (a) and (b) of the PFMA.
o Material misstatements of non-current assets, current assets, liabilities, other income, expenditure and disclosure items identified by the auditors in the submitted financial statement, were corrected and the supporting records were provided subsequently, resulting in the financial statements receiving an unqualified audit opinion.

6.6.

Council for Medical Schemes (CMS) The Council for Medical Schemes (CMS) is established in terms of the Medical Schemes Act (MSA) (No.
131 of 1998), as a public entity mandated to regulate the medical schemes industry in South Africa.

The main objective is to protect the interests of members, thereby, promoting fair and equitable access to private health financing.
The CMS’s mission is to regulate the medical schemes industry in a fair and transparent manner by: • Protecting members of the public and informing them about their rights, obligations and other matters related to medical schemes; • Ensuring that complaints raised by members of the public are handled appropriately and speedily; 47 113 • Ensuring compliance with the Medical Schemes Act (No.131 of 1998); • Ensuring improved management and governance of medical schemes; • Advising the Minister of Health on appropriate regulatory and policy interventions; and • Ensuring Collaboration with other stakeholders in executing its regulatory mandate.
6.6.1.

Overview of CMS Performance In terms of performance, CMS achieved 89.2% of all target indicators set.

Select indicators will be described in the table below.

Table 29: Highlights of some of the key CMS Performance Indicators PROGRAMME PLANNED TARGET 2022/23 1.

ADMINISTRATION 2.
STRATEGY, PERFORMANCE AND RISK Obtain an unqualified opinion issued by the AG Ensure that overall performance of the entity is maintained at above 80% Minimise staff turnover to less than 15% per annum Average turnaround time of 120 working days to fill vacancies 95% of employee performance agreements are signed 95% of employee performance assessments concluded biannually Percentage of written and verbal legal opinions provided to internal and external stakeholders, per year- target 90% Percentage of Appeal Committee and Appeals Board Scheduled within 14 days upon receipt of all supporting documents (as per schedule) 30 stakeholder training awareness activities conducted Development and Maintain a Strategic Projects Register.
Scope and develop plans for strategic projects.

Target: 80% (new indicator) ACTUAL PERFORMANCE 2022/23 Unqualified opinion achieved Achieved: 89.2% Achieved: 13.8% Staff turnover.

Achieved: 54 days Achieved: 96% Achieved: 95.2% Achieved: 100% Not Applicable (N/A) as the unit didn’t receive any written request to attend Appeal Committee hearings.
Achieved: 30 Achieved: 1 Achieved: 88.9% 48 114 PROGRAMME PLANNED TARGET 2022/23 Review and Develop a Strategic Plan and Annual Performance Plan for the consideration of the CEO & Registrar as well as Council.

(new indicator) Number of strategic risk register reports submitted to the Council for monitoring.
Target: 4 Percentage of Managed Care Organisations (MCOs) applications processed within 3 months, target: 100% Percentage of applications by administrators and self-administered schemes accredited processed within 3 months, target 100% Percentage of annual rule amendments processed before 31 December of each year.

target: 90% Number of draft inspection reports issued annually.
target: 10 (new indicator) Percentage of commissioned inspections finalised within 12 months from the date the appointment letter was signed.

target: 60% (new indicator) Number of research projects and support projects published in support of the National Health Policy.

target: 17 One non-financial report submitted for inclusion in the Annual Report Number of stakeholder education and training sessions.

target: 50 3.

REGULATION 4.

POLICY, RESEARCH AND MONITORING 5.
MEMBER PROTECTION ACTUAL PERFORMANCE 2022/23 Achieved: 1 Achieved: 4 Achieved: 100% Achieved: 100% Achieved: 97.1% Achieved: 10 Achieved: 100% Achieved: 17 Achieved: 1 Achieved: 66 sessions 49 115 PROGRAMME PLANNED TARGET 2022/23 70% of Category 3 complaints adjudicated within 90 working days and in accordance with complaints standard operating procedures target: 75% 70% of Category 4 complaints adjudicated within 120 working days Submit CMS annual report to the Executive Authority by 31 August Number of routine inspections finalised, target: 15 98% of clinical enquiries received via e- mail or telephone reviewed within 7 days The number of benefit definitions published, target: 10 ACTUAL PERFORMANCE 2022/23 Not Achieved: 70.2% (-4.8%) Reason given for not achieving the target was the complexity of the complaints requiring detailed clinical investigations.
There were also numerous ICT server and document management system challenges- this resulted in prolonged downtimes and even restarting of completed processes.

Achieved: 90% (+20%) Achieved Achieved: 17 Achieved: 100% Achieved: 10 Medical Schemes Industry o In the 2022/23 financial year, there were 71 medical schemes, and 32 administrators, 43 managed care organisations, 2 185 broker organisations, and 7 567 individual healthcare brokers.
o Bear in mind, in the year 2 000 there were 144 schemes, i.e., 97 restricted schemes and 47 open schemes.

o Medical scheme membership: 8.9 million beneficiaries.

Complaints Adjudicated During the reporting period, the CMS received 2 966 new complaints, as well as 514 complaints carried over from the previous financial year, totalling 3 480 complaints.

A total of 3 017 complaints were resolved and 463 were not resolved in 2022/23.

50 116 6.6.2.
50 116 6.6.2.

Financial Performance Table 30 below, provides a summary of the financial position of the CMS.

Total assets increased from R37.2 million to R72.3 million, due to 161% growth in the value of current assets.

This shows significant improvement in financial position of the entity, given past accumulated deficits.

The Total liabilities also increased from R35.0 million in 2021/22 to R41.5 million in 2022/23 (15.7% increase).
By end of March 2023, the entity’s net assets increased from R2.3 million in 2021/22, to having a net asset value of R30.8 million.

Table 30: Summary of Statement of Financial Position Current Assets Non-current Assets Total Assets Current Liabilities Non-Current Liabilities Total Liabilities Net assets (liabilities) 2022/23 R’000 58 343 13 951 72 294 34 707 6 772 41 479 30 815 2021/22 R’000 22 313 14 923 37 236 29 581 5 399 34 980 2 256 Table 31, below provides the Statement of Financial Performance.
Some key points are highlighted including: • The CMS had a surplus of R28.6 million for the year under review compared to a surplus of R24.1 million in the previous financial year.

• CMS received a grant from the National Department of Health to the amount of R6.3 million in 2022/23 up from R6.2 million in 2021/22.

• Administrative expenses increased from R26.2 million in 2021/22 to R27.3 million (3.9% increase) in 2022/23.
Staff costs also increased from R110.1 million in 2021/22 to R122.4 million (10.0% increase) in 2022/23.
51 117 Table 81: Statement of Financial Performance Revenue Gain on disposal of assets Administrative expenses Auditors' remuneration Operating Expenses Staff costs Depreciation and amortisation Bad debt Interest received Finance costs Surplus/(deficit) for the year 2022/23 R’000 195 529 12 (27 253) (2 007) (18 410) (122 432) (2 442) - 5 561 - 28 559 2021/22 R’000 186 772 4 (26 203) (1 961) (23 395) (110 144) (2 913) - 1 978 - 24 137 6.6.3.
Report of the Auditor-General o The CMS maintained an unqualified audit opinion with findings.

The entity has been in this category for several years, mainly due to instances of non-compliance relating to the prevention of irregular expenditure and the material amendments to the annual financial statements.

o The AG did not raise any material findings on the usefulness and reliability of the performance information.
o The AG made findings regarding the following compliance themes: • Expenditure management: The AG again found that effective and appropriate steps had not been taken to prevent irregular expenditure.

Similar non-compliance was also reported in the prior year.

• Consequence management: there was insufficient appropriate audit evidence that disciplinary steps were taken against the officials who had incurred irregular expenditure, as required by the PFMA.
This was because investigations into irregular expenditure were not performed.

• Internal control deficiencies: Management did not perform determination tests to ensure that investigations into irregular expenditure are performed to enable consequence management against officials who had incurred irregular expenditure.

52 118 • The AG raised the issue of the CMS paying council members a daily rate, instead of an hourly rate.
This is in contravention of National Treasury circular on remuneration of council members.

6.7.

Compensation Commissioner for Occupational Diseases (CCOD) The Mines and Works Compensation Fund (the Fund) is established by the Occupational Diseases in Mines and Works Act, (No.

78 of 1973) (ODMWA, thereafter, the Act).

According to the Act, the Minister of Health is required to appoint a Compensation Commissioner for Occupational Diseases (CCOD).
Moreover, the Act mandates CCOD to control and administer the Fund.

Other responsibilities are: • To ensure that there are effective and efficient processes of claims management and compensation of workers and ex-workers in controlled mines and works.

• To collect revenue on behalf of the Fund based on levies per risk shift per commodity.

The Fund/CCOD does not have a Board as it operates as a sub-programme of the National Department of Health, hence it receives its allocation from the NDOH.
In return the NDOH provides oversight.

6.7.1.

Highlights of Achievements The following are highlights of the Fund’s performance during the period under review.

• Commenced with reforms of its legislating Act i.e.
ODMWA; • Ensured sufficient liquidity to meet short-term financial obligations; • Successfully collaborated with provinces and neighbouring countries; • Finalised 6 693 claims in 2022/2023 compared to 6 155 claims in 2021/22; • Maintained a surplus position with an accumulated surplus of R2,402.3 billion; • Achieved the majority of its set targets in the 2022/23 Annual Performance Plan (APP); • Ensured that its current assets stood at R5, 443.7 billion, which exceed current liabilities R881.9 million.
53 119 • Ensured innovations in service delivery to the current and ex-workers in mines and works; • Maintained a comprehensive database with access to the different class action and social protection funds; • Finalised an average of 557 claimants monthly totalling R168,6 million compared to an average of 512 claimants monthly totalling R139,4 million in the 2021/22 fiscal year • Adjudicated 10 212 certifications through Medical Bureau for Occupational Diseases (MBOD) Certification Committees.

6.7.2.
6.7.2.

Overview of the CCOD’s Performance For the period under review, there were nine (9) performance targets, of which six (6) were achieved, which represents 66.6% of success.

The Fund cites that one of the reasons for missing the targets is a significant reduction of claimant application packs received from service providers and one-stop service centres in the first two quarters of the year.
Table 32: Performance on set targets for the 2022/23 fiscal year PLANNED TARGET PERFORMANCE TARGET ACHIEVED ACHIEVED/NOT to Submission of amendments ODMWA to the Director-General of the National Department of Health Ensure the effective and efficient management of the Fund.

New ODMWA bill was noted by the Director- General and the Minister of Health.

A request to process the Bill was sent to the Deputy President from the Minister.
Report on the number of certifications finalised the Mineworkers Compensation System per year.

Report on the number of benefit payments made by the CCOD (other than pension payments).

on Report on the number of claims finalised by the CCOD (other than pensioners).

Of all claims finalised in the period, what percentage were finalised within 90 days of receipt of all completed claim documents.

Report on the submission of Annual Financial Statements of the CCOD to the AGSA.
Report on the number of controlled mines and works inspected.

ACHIEVED NOT ACHIEVED NOT ACHIEVED NOT ACHIEVED ACHIEVED ACHIEVED ACHIEVED 54 120 Report on updates of database of claims at the CCOD in terms of claims, payments, certifications, and data exchange updates.

ACHIEVED 6.7.3.

Financial Performance Reflected in table 33 is the total revenue amounting to R1.129 billion which shows strong growth from R480.5 million in the 2021/22 reporting period.
On expenditure, the finance costs show a slight increase from R262.3 million in 2021/22 to R282.7 million by end of March 2023.

The total expenditure stood at R335.6 million, which shows a marginal variance from the prior reporting period.

Also noted is the increase in the surplus from R150.9 million in 2021/22 to R794 million in the 2022/23 reporting period.
Table 33: Statement of Financial Performance REVENUE Total revenue from exchange transactions TRANSFER REVENUE Total revenue from non-exchange transactions Total revenue EXPENDITURE Finance costs Debt impairment Goods and services in-kind from the National Department of Health General expenses Total expenditure Surplus / (deficit) for the year 2022/23 R’000 2021/22 R’000 1 077 693 023 422 279 179 52 045 590 1 129 738 613 58 309 469 480 588 648 (282 701 048) - (51 686 925) (1 262 889) (335 650 862) 794 087 751 (262 317 026) (5 721 147) (57 843 885) (3 747 420) (329 629 478) 150 959 170 Table 34 below shows the financial position with a specific focus on the Fund’s assets, current liabilities and non-current liabilities by end of March 2023.
55 121 Table 34: Statement of Financial Position Current Assets Non-Current Assets Total Assets Current Liabilities Non-Current Liabilities Total Liabilities Net Assets Accumulated surplus 2022/23 R’000 2021/22 R’000 5 443 724 423 5 154 268 246 - - Current assets show a moderate increase from R5.154 billion in the prior financial year to R5.4430 billion in the 2022/23 fiscal year.
The total liabilities’ decreases from R3.552billion in the prior year to R3 billion in the 2022/23 reporting year, while net assets and accumulated surplus increases from R1.601 billion in the preceding year to R2.402 billion by end of March 2023.

6.7.4.

Report of the Auditor-General o The Fund obtained an unqualified audit with no findings.

o The financial statements present fairly, in all material respects, the financial position of the Fund.
o The financial performance and cash flows for the year are in accordance with the Generally Recognised Accounting Practice (GRAP) and the requirements of the Public Finance Management Act 1 of 1999 (PFMA).

o The Fund was not required to prepare a report on its performance against predetermined objectives, by end of March 2023, it was not a listed public entity in terms of the PFMA.

o The AG did not identify any material non-compliance with the selected legislative requirements.
o Considered internal control relevant to the audit of the financial statements and compliance with applicable legislation.

o Did not identify any significant deficiencies in internal controls.

56 122 7.

COMMITTEE OBSERVATIONS AND FINDINGS Having considered the 2022/23 annual reports of the Department of Health and its entities, the Committee made the following observations with respect to the financial and service delivery performance of the health sector: 7.1.
National Department of Health Overall performance and reporting: - o The Committee welcomed the 2022/23 Annual Reports of the Department and its entities.

o The Committee expressed concern about the regression in the performance of the Department in meeting its set targets, declining from 62.2% in 2021/22 to 57.7% in 2022/23 financial year.

The worst performing programme in this regard is Programme 1 (Administration), which only achieved 14% of its targets.
Expenditure spending of the Department decreased from 98.8% in 2021/22 to 97.4% in 2022/23.

Audit outcomes: - o The Committee congratulated the Department of Health on the improved audit outcomes, by obtaining an unqualified audit opinion from a qualification in the 2021/22 financial year.

o The Committee applauded the SAMRC, CCOD and OHSC on obtaining clean audits.

o The Committee commended the Department and entities for addressing previous findings on procurement and contract management.
o The Committee appreciated the improvement in the health sector audit outcomes, as six provincial health departments obtained unqualified audit outcomes.

o The Committee raised concern regarding the material findings on annual performance reporting and achievement of targets by the Department and SAHPRA.

o The Committee was concerned about the material misstatements on annual financial statements submitted for audit by the Department, SAHPRA and NHLS.
o The Committee noted with concern the stagnation in audit outcomes in three provincial health departments (Eastern Cape, Free State and Northern Cape), as they remain qualified for four consecutive years.

57 123 Financial management: - o The Committee expressed major concern that the Department underspent its allocated budget by nearly R1.7 billion (2.6%) of the final appropriation, in light of the country’s healthcare facilities that are facing challenges.
o The Committee observed with concern that irregular expenditure incurred by the Department and its entities increased from R4.5 billion in 2021/22 to R5.2 billion in 2022/23.

The NHLS was the main contributor, incurring R4 billion.

o The health sector continues to incur a significant amount of irregular expenditure amounting to R7 billion.
o The unauthorized expenditure as flagged by the AG was a concern to the Committee which further indicated that this should result into disciplinary hearings cases and that there must be some level of investigation and consequence.

The Committee further wanted to know what the Department was doing to control the risk.

o Underspending on conditional grants amounting to R2.4 billion remains a concern, with Gauteng underspending by R1.1 billion.
o The Committee noted with concern the underspending on the Health Facility Revitalization grant amounting to R752.2 million, while health facilities are laden with infrastructure challenges.

o The Committee wanted to know what the implications do the 19% expenditure accrual have on the financial capacity of the Department to optimize an appropriation and what the plan is for the Department to address this as some provincial departments have almost 50% accruals.
The Committee sought clarity on how the Department is supporting the provinces in dealing with accruals.

Service delivery and Operations: - o On the TB programme, the Committee noted with concern that none of the TB-related targets were met and wanted to know how the Department was going to address this.

o The Committee noted with concern the poor data capturing of TB and wanted to know the reasons for this.
58 124 o On HIV/AIDS response, the Department was commended for achieving 94-76-92 targets for HIV/AIDS against the 95-95-95 targets.

o The Committee wanted to know the regions in which youth zones have been expanded and what the interaction rate is versus improved impact regarding STIs and HIV infection rates in areas with youth zones.
o The Committee sought clarity on the disparities in blood alcohol tests backlogs between the four Forensic Chemistry Laboratories, Pretoria which has a back log of 7 370 and 50 441 in Johannesburg as compared to zero backlog in Durban and Cape Town.

o The Committee noted with concern the rising statistics of cancer and sought clarity on cancer awareness programmes the Department was embarking on.

The Committee further noted concerns about the long waiting list for oncology treatment.
o The Committee notes the progress made in reducing maternal and infant mortality, however, remains concerned about challenges of maternal and infant mortality especially at public health facilities and injuries that occur during birth, which is also shown by the litigation cases.
o The Committee sought further information on the alleged closure of establishments for abandoned infants – this is a serious concern as there would not be places to drop off these children as they are inclined to be dropped off in unsafe areas/places.

o The Committee requested the Department to clarify its role on the matter relating to underage pregnancies that result from rape and whether these are reported to the police by public health facilities.
o The Committee sought clarity on the funding model for the National Health Insurance, in light of the country’s current economic environment.

o On primary health care facilities that have not reached ideal clinic status, the Committee wanted to know what the focused strategy and plans are to close the gaps as part of preparing for the NHI and to improve the quality of health care services.

o The Committee sought an update on the appointment of operational managers for PHC facilities.
o The National Planning Commission (NPC) flagged that the Department should undertake a skills audit to identify skills gaps and the number of medical professionals who need to 59 125 be retrained, the Committee sought clarity on whether the audit has been conducted and the outcomes thereof.

o The Committee sought clarity on the progress made in strengthening the integration between health and social services as recommended by the NPC.
o The Committee enquired about the county’s capacity to locally produce vaccines, for instance the polio vaccine.

o On the poor uptake of the COVID-19 vaccine, the Committee sought the strategy the Department employs to encourage people to get vaccinated and counter anti-vaccine messages and misinformation.

Furthermore, the Committee wanted to know how many doses are going to be destroyed in the near future.
o The Committee brought to the attention of the Department, the reports on medicine stock- outs at Pelonomi Academic Hospital, due to delays from the medical depot.

The Committee requested the Department to follow this up and address the challenge.

o The Committee expressed concern over the challenges facing the Northern Cape provincial health department, including the non-implementation of its audit plan, and sought clarity on the causal factors and the support that is provided to the province.
o The Committee informed the Department about its oversight visit to the Eastern Cape where it found that the infrastructure is dilapidated and there are severe staff shortages and wanted to know what the Department was doing to assist the province.
o The Committee noted the recent Census report on the population growth and the level of migrants and wanted to know the projected impact on the quality of healthcare provision and the strategies that can enable the Department to negate the impact of cost containment measures and the fiscal declines.
Human resources for health: - o The Committee wanted to know the lessons the Department has learned from Covid-19 experience in relation to human resources optimization of health professionals and how these lessons are informing the functioning of the Department’s health facilities.

o The issue of critical posts not filled on time remains a concern to the Committee.
o The Committee noted with concern that there was no intake of learnerships and interns and wanted to know what the Department was doing to address this.

60 126 Information Technology: - o The Committee noted with concern the delays in the implementation of the National Digital Health Strategy.

o The Committee noted with concern the inadequate IT systems and cyber security strategy.
o The Committee enquired what the extent of digital healthcare provision in South Africa was and how this can alleviate the demand and pressure in the healthcare system.

o The Committee wanted to know what potential Artificial Intelligence has for the healthcare system and the plans the Department has in this regard.

Medico-legal claims: - o The Committee observed that medico-legal claims put the sector under immense pressure, resulting in increased accruals and late payments of suppliers.
o The Committee noted with concern that medico-legal claims have increased to R67 billion.

o The Committee noted the steps the Department has taken in managing medico-legal claims such as the development and implementation of the Case Management System.

The Committee requested further details on findings from the system, particularly from Gauteng, KwaZulu-Natal, Free State, North West and Northern Cape.
o The Committee sought clarity on the measures the Department has taken to expedite the legislative process on medico-legal claims.

Infrastructure: - o On the infrastructure audit conducted by the AG, the Committee noted with concern that infrastructure management at provincial health departments remains a major challenge.

With findings on delays in the completion of projects due to poor performance of contractors, cost implications and poor project quality.
The Committee wanted to know what capability the Department has to project manage and monitor infrastructure development effectively.

61 127 o The Committee further wanted to know the interventions that have been taken on contractors that do not meet the required standards as per their service level agreement and how effective is the contract management by the Department.

7.2.

Entities 7.2.1.

SAHPRA: o The Committee congratulated SAHPRA for obtaining an unqualified audit outcome.
o The Committee was however concerned about issues raised by the AG such as material misstatements with regards to the percentage of medicine backlogs cleared and weaknesses in record keeping and that the management did not ensure appropriate review and monitoring of compliance with revenue and debt management policies which led to an ineffective collection of revenue earned.

The Committee wanted to know what the difficulties were in addressing these issue as raised by the AG.
o The Committee noted with concern the regression in performance from 72% in 2021/22 to 63% in 2022/23.

o The Committee noted with concern the high vacancy rate at the entity and its inability to attract and retain staff.

The Committee wanted to know the implications of the high vacancy rate in the operations of the entity.

o The Committee sought clarity on South Africa’s contribution towards the AMA Treaty.

7.2.2.

OHSC: o The Committee commended the OHSC for obtaining a clean audit outcome.
o The Committee noted with concerned the entity’s performance and noted that 35% of its targets were not achieved.

o The Committee noted with concern the decline in the number of inspections conducted by the entity.

o The severe staff shortages were noted as a concern by the Committee and wanted to know if this was not hampering the entity’s performance.

o The Committee expressed the need to expedite the complaints management process.
o The Committee highlighted that most of the complaints received by the entity are from Gauteng Province and noted that it appeared as if other provinces were not lodging 62 128 their complaints.

The Committee wanted to know the reasons behind the high number of complaints in Gauteng.

o The Committee wanted to know how the entity was going to ensure that all facilities are ready for the implementation of the NHI.
The Committee further sought a list of facilities that have been inspected in the 2022/23 financial year.

o The Committee wanted to know what the financial implications of the labour unrests were and how the entity plans to deal with these in the long-term.

7.2.3.

OHO o The Committee was concerned about office space challenges faced by the Ombud as it hindered its operations.
o The Committee noted with concern that most complaints were from Gauteng Province and wanted to know the reasons for this and what the Ombud can do to ensure that the office is accessible to all South Africans.

o The high vacancy rate at the Ombud was a noted as a concern and the Committee wanted to know to what extent does this affect backlogs in cases and governance issues.

o The Committee wanted to know what the Office of the Ombud can do to drastically reduce medico-legal claims.
o The Committee enquired about the profile of the complaints and the weaknesses they reflect on the healthcare system.

o The Committee wanted to know the overall compliance and progress in the implementation of recommendations of investigations conducted by the Ombud since 2019.

7.2.4.

SAMRC: o The Committee congratulated the SAMRC on maintaining its clean audit outcome.

o The Committee noted with concern the slow pace of transformation in the SAMRC.
The Committee was further bothered by this slow progress as it has been raising the issue of transformation for the past four years.

The Committee indicated that the entity 63 129 has a diversity bias in senior management with more women but slow growth of the historically disadvantaged.

o The Committee wanted to know what work the entity has done to strengthen the country’s capability to respond to future pandemics.
o The Committee noted and welcomed the increase in scholarships for Africans to 77.4%, however raised concern on the decline of Coloured recipients, currently at 9.2% and wanted to know what the ideal distribution is and why there has been a decrease in the number of recipients who are coloured.

o The Committee was concerned that the entity does not have scholarship allocations for the University of Free State and wanted to know why it was not part of the institutional recipients.
o The Committee wanted to know the measures that are required to ensure a preventative healthcare system and research work the entity has conducted to advance a preventative healthcare system.

o The Committee noted with concern the consumption of highly processed food and wanted to know the mechanisms to combat this, as it contributes to the high burden diseases.
o The Committee wanted to know what the outcomes of various partnerships with African countries and whether the SAMRC leadership is of the view that the entity is optimally playing a role in the continent noting the challenges faced by the continent.

o The Committee wanted to know what the projected impact of the possible cost containment measures and the budget decline and whether the entity would be impacted negatively.

7.2.5.
7.2.5.

NHLS: o The Committee commended the NHLS for obtaining an unqualified audit outcome.

o The Committee noted with concern the irregular and fruitless expenditure incurred by the entity as highlighted by the AG.

The Committee further wanted to know what the plans were in addressing the AG’s findings.
o The Committee further noted that some of the key weaknesses of recurring findings from the AG are on the areas of quality financial statements and prevention of irregular, 64 130 unauthorized, fruitless and wasteful expenditure.

The Committee enquired what constraints were affecting management and the Board in resolving this outcome and how these are going to be addressed by the entity.

o The Committee wanted to know what the plans were for the backlogs at the Forensic Chemistry Laboratories.
o The Committee sought details on the plans to improve the NHLS’s footprint in the Northern Cape and Free State and wanted to know what the entity was doing to improve this.

o The Committee noted with concern that the target to develop and implement a POCT Plan was not met in the financial year.

The Committee enquired how are the feasibility and cost benefit assessment strategies being implemented in 2023 -2024 in preparation for the roll-out of the PCOT.
o The Committee wanted to know how effective the proposed corrective measures are towards improving the percentage of TB GeneXpert tests performed within 40 hours and other energy targets affected by the energy crisis.

7.2.6.

CMS: o The Committee commended the CMS for obtaining an unqualified audit outcome, however expressed concern that this has not changed since 2019. o The Committee was concerned about irregular expenditure as highlighted by the AG and the lack of consequence management thereof.
The Committee wanted to know how the entity was going to address this.

o The Committee further wanted to know what the status of the effectiveness of the supply chain management interventions proposed on the annual report regarding the monitoring of compliance with applicable laws and regulations as well as related internal controls.

o The Committee sought an update on the low-cost benefit options for low-income earners who cannot afford medical aids.
o The Committee was concerned that some schemes have refused to pay the Prescribed Minimum Benefits and that members had to pay these from their savings.

The 65 131 Committee wanted to know which schemes were responsible for this and what has been done to address this.

o The Committee sought clarity on the financial implications for the legal opinions.

o The Committee was concerned at the slow pace it takes the entity to resolve cases and wanted to know the oldest backlogs they have.
o The Committee noted the trend in increased complaints received and adjudicated and wanted to know what the issues are and how they are addressed to prevent recurrence and reduce the number of complaints received as part of straightening mechanisms towards protecting beneficiaries.

o The Committee noted with concern the rising costs of medical aids and wanted to know what the entity was doing to curb these increases.
o The Committee wanted to know what the systemic findings of the SIU investigation and the progress with the implementation of recommendations.

o The Committee wanted to know the factors that are impeding the Medical Schemes Amendment Bill and what it responds to.

o The Committee wanted to know if there any internal disciplinary processes taking place against employees, for fraud and poor performance.
o The Committee wanted to know how media engagements improved in the financial year in informing the public about their rights and other matters concerning medical schemes.

o The Committee wanted to know what the timelines were regarding the development of the organisational diagnostic review aimed to thoroughly assess the capabilities and identify potential areas for improvement.
o The Committee noted the R30.8 million surplus by the entity and wanted to know how this will be utilised to strengthen capacity challenges such as human resource capital and ICT developments and improve operations and strengthen internal controls in the current financial year.

7.2.7.

CCOD: o The Committee congratulated the CCOD for obtaining a clean audit outcome.

66 132 o The Committee wanted to know what the timeframes are for the ODMWA amendments to be brought forward.
o The Committee welcomed the progress made on the Compensation Claims Management System.

o The Committee further noted the benefits of outreach activities conducted in the five districts in KZN and wanted to what the plans were to duplicate this in other provinces.
o The Committee enquired on whether there is a Memorandum of Understanding between the CCOD and the Minerals Council with regards to the Council’s staff utilization by the Fund o The Committee noted that the entity inspected 121 mines and wanted to know what observations and recommendations were made to those visited mines.
o The Committee enquired what the status of improving mining work conditions to improve health outcomes of workers and not increase the R1 billion paid by the Tshiamiso Trust to eligible silicosis and TB claimants.

8.

COMMITTEE RECOMMENDATIONS Having made its observations and deliberations, the Committee recommends that the Minister of Health should: 8.1.
National Department of Health Audit outcomes: - o Strengthen oversight regarding financial and performance reporting and compliance, as well as related internal controls in order to move to a clean audit.

Present a turnaround report to the Committee on a quarterly basis.

o Present to the Committee a turnaround plan to ensure improved service delivery performance in relation to financial performance, in ensuring value for money.
o Assist provincial departments to strengthen financial management planning and internal controls to improve and maintain audit outcomes.

67 133 o Provide a detailed plan to the Committee demonstrating how the Department plan to assist Eastern Cape, Free State and Northern Cape to move from qualified audit outcomes.

The detailed plan should be presented to the Committee on a quarterly basis.
Financial Management: - o The Department should develop an agile reprioritization strategy to optimize conditional grant spending for the sector and a pipeline of projects which are ready for implementation.

o Ensure that the Department adopts strategies to ensure improved spending on the Health Facility Revitalization grant, to ensure urgent refurbishment, upgrading and construction of health facilities.
o Provide systems to assist provincial departments to develop internal controls and instruments to monitor and eliminate irregular, fruitless and wasteful expenditure, in reducing inefficiencies.

o Provide the Committee with a quarterly report on consequence management arising from non-compliance to the requirements of the Public Finance Management Act 1 of 1999 (PFMA).

o The Department should improve its preparations and review of annual financial statements.
Service delivery, operations and governance: - o Improve on the Department’s governance and operations in order to realise its developmental and Constitutional obligations.

o Ensure that public health facilities are equipped and resourced to carry out caesarean sections, in reducing maternal and infant mortality, birth injuries as well as litigations.

o Provide a progress report to the Committee on the implementation of the National Mental Health Policy and Strategic Plan.
o Ensure adequate and dedicated funding for the Ideal Clinic Realisation and Maintenance programme in preparation for the NHI.

o Develop a strategy of optimizing the compensation budget to fill posts in the healthcare system as the Department underspent while human resources gap is significant in the health system.

o Ensure the funding of the OHSC and OHO is prioritised in order to bolster their staff complement, including the appointment of inspectors, and to ensure adequate office space.
68 134 o The Department must ensure that the Office of the Health Ombud Bill is finalised.

o On the challenges of transformation at the SAMRC, the Minister should intervene in ensuring that the entity fast-tracks the full implementation of its transformation agenda.

o Provide support to the provincial health departments to ensure improved infrastructure project management and the monitoring of infrastructure development.

o Present to the Committee on cancer awareness projects conducted quarterly.
Information Technology: - o Ensure greater investment and/or establish partnerships to ensure improved ICT systems, cyber security and the full implementation of the National Digital Health Strategy.

Infrastructure: - o Ensure consequence management on infrastructure projects identified as not meeting standards and recoup funds were appropriate and the Department should also assess the quality of infrastructure projects quarterly.

8.2.
8.2.

Entities The entities should develop action plans to address the issues identified by the AG and provide the Committee with a progress report quarterly.

8.2.1.

SAHPRA: o Devise strategies and mechanisms to attract and retain staff.

o Plans to address backlogs should be devised and implemented.

8.2.2.

OHSC: o Develop a digital strategy which increases the reach of the entity.

o The entity must further have an equitable approach to visit provinces.

8.2.3.
8.2.3.

OHO o Undertake research on how to harness digital technology to assist in the processing of reports and other functions.

69 135 o Affiliate with digital libraries and work with Higher Education institutions to increase its access to library services.

8.2.4.

SAMRC: o Scholarship allocation for Coloured recipients should be addressed.
o Develop a relationship with the University of Free State which has an established health faculty, as part of the expansion pool of institutional recipients of SAMRC Research Grant.

o Develop indicators that reflect on the entity’s work in the continent.

o Undertake research on strengthening a preventative healthcare system approach in South Africa under the existing constraints as this will contribute to decreasing the disease burden in the medium to long term.

8.2.5.
8.2.5.

NHLS: o The NHLS should ensure that annual financial statements submitted for audit are properly reviewed to ensure compliance with the applicable accounting framework.

o Put measures in place to prevent irregular expenditure.

o The entity must strengthen its consequence management system.

8.2.6.

CMS: o Ensure that internal control measures are improved to prevent irregular expenditure and consequence management implemented.
o Ensure the strengthening of supply chain management processes for all procurement in line with relevant prescripts, laws and regulations.

o The CMS should provide the Committee with following reports: o Section 59 investigation panel report; o SIU investigation report; and o Progress report on the matters relating to the Conduct of Financial Institutions (COFI) Bill and the Financial Sector Regulation Act (FSRA).

8.2.7.
8.2.7.

CCOD: 70 136 o The entity is encouraged maintain its internal controls relating to financial management and good governance in order to sustain its audit outcomes.

9.

CONCLUSION Unless otherwise indicated, the Department of Health should respond to the Committee recommendations within three months from the day when the report is adopted by the House.

The Department and entities to provide progress reports on all the recommendations on a quarterly basis.

Report to be considered.

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