DRAFT ANALYSIS OF 2005/06 ALLOCATIONS TO BUDGET VOTE 18: SOCIAL DEVELOPMENT

1. Strategic overview and key policy developments

The Department of Social Development must be regarded as one of the lead departments in Government's efforts to reduce poverty and improve social cohesion. It is also a key department in attempts to mitigate the impact of HIV and AIDS on families and communities. In line with this, the Department's aim is "to ensure the provision of comprehensive social protection services against vulnerability and poverty within the constitutional and legislative framework, and create an enabling environment for sustainable development".

The Department is responsible for policy and oversight in the critical areas of social assistance and social welfare services. Over the last three years, there has been a large expansion of the social assistance system, with beneficiary numbers increasing from 3,8 million in April 2001 to 9,2 million in January 2005.

In addition, there has been significant progress in improving the administrative and institutional framework of the social assistance system and in developing legislation for and oversight of social welfare services. The departmental mandate has also widened in recent years, with growing responsibility for a broad set of initiatives to improve the livelihoods of South Africans through co-ordinating home-based care for people with HIV and Aids, food relief programmes, a focus on programmes for particularly vulnerable groups, and oversight of the National Development Agency.

Over the next three years, the department will focus on setting up the South African Social Security Agency (SASSA), and overseeing the transfer of grant administration responsibilities from provinces. The centralisation of responsibility for social grant administration sees a large shift of funding from the provincial equitable share to conditional grant funding via the Department of Social Development in 2005/06. Other aspects of setting up the SASSA early in 2005 are appointing the agency's executive, finalising human resources planning, and developing service delivery models for social assistance.

An area of concern for the Department has been the rapid growth in Social assistance grant transfers, and questions are being asked regarding the sustainability of such growth. Grant expenditure has grown from around 2 per cent of GDP in 2000/01 to more than 3 per cent of GDP in 2004/05. They are expected to reach 3,4 per cent of GDP in 2005/06. The child support grant reached 5,5 million children in January 2005, while 1,3 million people receive a disability grant, and more than 2 million women above 60 and men above 65 receiving the old age grant.

In the context of this rapid expansion, ensuring the integrity of the grant system is a major priority (and especially applying rules for eligibility consistently and effectively). The department is addressing this through institutional restructuring, implementing norms and standards for grant administration, and a sharper focus on fraud prevention. Operation Isidima, launched in late 2004, is a short-term measure to improve the efficiency, effectiveness and impact of the department's service delivery, and centres on improving business processes and conditions at pay points. Although the budget for social assistance is reflected as part of the national department's allocation, the administration of grants will remain with provinces in 2005/06 while the capacity for administration is centralised and built. As an interim measure, before funds are channelled to the agency for grant payments, grant payments and administration are funded through conditional grants via the Department of Social Development to the provinces. Monitoring of the conditional grants to provinces will be done in terms of the Division of Revenue Act (2005).

With regard to developmental welfare services, the Department will oversee the completion of the legislative framework to protect and support children, disabled persons, older persons and women. To further protect children, a national child protection register was introduced in seven provinces. The register creates a databank of information about children who have suffered from some form of abuse and neglect. The register is set to be completed in 2005 as well as the implementation of a national policy framework for the prevention and management of child abuse, neglect and exploitation.

Priorities over the next three years include finalising the social welfare service delivery model, developing and costing baseline norms and standards for welfare services, and supporting service delivery through provincial departments and the non-profit sector. The department will also be fast-tracking the expansion of its home community based care to children and households infected and affected by HIV and Aids, and expanding its partnership with the love Life Groundbreakers programme to reach more rural and farming communities and households.

2. Expenditure estimates for the Department of Social Development, 2005/06

The total allocation to the national Department of Social Development for the 2005/06 financial year is R56 549 127 000 (R56.5 billion). The bulk of the increase over the previous allocation is made up of the R52 billion that will be transferred to provinces for the payment of social grants. The baseline allocation therefore amounts to R437.9 million, with transfers and subsidies

amounting to R56.1 billion.

3. Programme analysis

3.1 Social security policy and planning - R15.271 million

The programme Social security policy and planning is responsible for the formulation and implementation of policies on social security and social assistance. An amount of approximately R15.271 million has been allocated to this programme, compared to R12.954 million in the previous financial year. This represents an nominal increase of 17%. The subprogrammes in this area can be summarised as follows:

• Children and Family Benefits develops and monitors the implementation of social security policy for children and families.

• Disability and Retirement Benefits develops and monitors the implementation of social security policy for the elderly.

• Finance and Economics develops strategies for financing social assistance programmes in line with macroeconomic goals and development objectives.
• Contribution funds contributions to international social security organisations.

The Department indicates that the largest cost drivers in these programmes relate to the need to develop policy around the sustainability of social assistance, to build capacity for the implementation of the legal framework for social assistance, as well as the increasing need to assist provinces with the implementation of the social assistance programme. Among key outputs for the coming financial year, the Department intends to:

• complete policy proposals on social relief of distress by June 2005
• undertake a policy review with regard to the gender difference in eligibility for the old age grant by March 2006
• complete policy with regard to disability benefits and implement the assessment tool for the disability grant by March 2006

When compared to the output targets set in the 2004/05 Estimates of National Expenditure (ENE), a number of key targets have not been met, and the deadlines for many of these have been shifted to the end of the next financial year. This suggests that the Department sets itself unrealistic goals with regard to policy development, or that it is not able to meet its own targets because of a lack of capacity in the Department. This also raises the issue of whether any of the research projects and policy writing exercises are currently outsourced, and if so, what the impact of this on the development of capacity in the Department is.

Issues to consider:

Why has the development of social relief of distress policy not been completed? What is the current situation in provinces with regard to this form of social assistance?

The Department indicates that a study on child-headed households in the context of social assistance has been completed. What are the key outcomes this study, and how is this impacting on policy priorities over the medium term?

The Department registers payment to the International Social Assistance Agency to the amount of R498 000. What does membership of this organisation entail?

3.2 Grant systems and service delivery assurance - R145.973 million

The programme's core activities include the development of service delivery norms and standards for grant administration, and managing the reform of social assistance grants administration. Grants systems and service delivery assurance is also responsible for facilitating the establishment of the SASSA and maintaining appropriate IT systems for the administration of grants.

The subprogrammes in this area are the following:

• Grant Administration and Disbursement Management develops and implements service delivery norms and standards for grants administration.
• Grant Information and Payment Services procures and maintains appropriate technology and IT systems to support service delivery.
• Service Delivery Networks develops and co-ordinates a service delivery network and infrastructure for access to social grants.
• Disaster Relief co-ordinates and facilitates the disbursement of disaster and social relief funds.
• Monitoring and Evaluation monitors and evaluates the policy implementation and processes and procedures of the social assistance system.
• Research, Compliance and Support initiates and implements research projects to provide an evidence base for social assistance policies, and develops and monitors a strategy for fraud prevention and compliance with regulations.

The ENE notes that a national fraud hotline and a fraud register has been installed, and that the Department has developed a geographical information system of all pay points that provides online access to all relevant information. In addition, extensive training focusing on fraud prevention was offered to officials.

Among the key priorities for the coming financial year, the Department notes that it intends appointing the provider of an IT system to replace the Socpen system by December 2005. The upgrading and eventual replacement of this system has been ongoing for a number of years. In addition, over the next financial year, a further 100 pay points will be upgraded to the extent that they meet national norms and standards. The ENE also indicates that the Department intends appointing a service provider for the "design and implementation of a national grants payment model by December 2005. This does not make it clear whether "implementation" means that the Department envisages outsourcing the payment of grants. This issue must be discussed in detail, as it relates closely to the functions of the SASSA. The Social Assistance Act (Act No. 9 of 2004) provides that the Agency will "act, eventually, as the sole agent that will ensure the efficient and effective management, administration and payment of social assistance". The Department should therefore, when providing the Committee with detail on the establishment and functioning of the Agency, reflect on exactly what functions are envisaged for the Agency over the medium term, and how these functions relate to the amount allocated for the establishment of the Agency.

Further key outputs envisaged for the financial year is the completion of guidelines and manuals on the new social assistance legislation, extending the child support grant to all eligible children up to 13 by March 2006, and a reduction in the application-approval cycle to 11 days by 2006/07.

• The lack of interface between the social assistance database and other government databases has in the past been pointed out as a significant source of social grant fraud. Has any work been done concerning the links between databases such as the birth and death register held by the Department of Home Affairs, the PERSAL system (register of current government employees) or the Government Employee Pension Fund?

• Does the Department have reliable data on the number of ineligible recipients 'social assistance in the past year? What amount of money has been spent grants to such beneficiaries, and what percentage of this loss, if any, has been recouped?

• R102 million out of this programmes budget is earmarked for the payment of consultants and contractors. What exactly are consultants expected to do in terms of this programme? Has a policy decision been taken with regard to the outsourcing of work in the Department, and is it more cost-effective to achieve the programme targets in this manner?

• To what extent, generally, are provinces able to comply with norms and standards set for the administration of grants? Are there provinces with specific difficulties in this regard?

• What hat have been the main challenges with regard to negotiations with organised labour in respect of the transfer of staff from the provincial departments responsible for social development to the SASSA? Does the Department envisage that the transfer will take place without major difficulties?

3.3 Social Assistance- R55.517 billion

The allocation to the programme Social Assistance amounts to R55.517 billion, of which R55.4 billion will be transferred to provinces in the form of conditional grants for the payment of social assistance. The allocation is expected to grow to R65 billion in 2007/08 when the full responsibility for the administration and payment of grants is transferred to the national department. The ENE notes that the administration cost attached to social grants averages 6.3% of grant payments over the medium term. This would mean that the cost of grant payments amounts to approximately R3.465 billion per annum.

Key strategic objectives for the medium term include the establishment of the South African Social Security Agency, for which an allocation of R110 million is made for the current financial year. In addition, the Department has set the following targets in terms of beneficiary numbers by March 2006:

• old age grant - 2.1 million
• war veteran's war veteran's grant - 2 856
• disability grant - 1,5 million
• foster care grant - 307 000
• care dependency grant-98 143
• child support grant - 7 million

These targets must be interrogated, as the Department should be able to explain on what basis these target beneficiary numbers were arrived at. This is especially important in view of the fact that the President, in the State of the Nation Address, noted that the growth in certain social grant beneficiary numbers was unsustainable, and that Government believed that the growth was linked to fraudulent applications. However, civil society organisations have also noted that the disability grant benefits to persons living with HIV and AIDS are difficult to access, and often people access it only when they have full-blown AIDS, which makes the grant less effective than it may have been. Another matter that comes into play is the steady increase in HIV infections, despite government efforts to contain new infections through a range of interventions. The issue that must be interrogated is whether the Department of Social Development has an accurate picture of the nature of disabilities cited on applications in the different provinces, and to what extent the rapid growth in disability grant applications is in any way related to the prevalence of HIV in South Africa.

Issues to consider:

• What exactly does the Department mean by "Agency operating fully by April 2006" when referring to the establishment of the SASSA?

• In terms of the South African Social Security Agency Act, the Agency will eventually become the sole agent for the management, administration and payment of grants. How will these functions be phased in over the medium term?

• What systems is the Department putting in place to detect fraud in relation to grant applications and payments?

• Has the Department been able to eliminate incidences of fraud that relate to .employees claiming social assistance benefits, instead of the legitimate beneficiaries?

• Has an assessment been done with regard to whether the companies currently contracted to pay grants delivers a satisfactory service both in terms f cost-effectiveness and treatment of beneficiaries? What action has the Department taken in cases where there has been clear breach of service level agreements

3.4 Welfare services transformation - R20.518 million

The programme Welfare services transformation facilitates the transformation of welfare services to deliver effective and appropriate developmental social welfare services. Because the national department does not deliver any social services itself, the department has a policy-making role. The allocation increases from R17.921 million in the previous financial year to R20.518 million for 2005/06, which represents a nominal increase of 14%.

There are five subprogrammes in Welfare Services Transformation:

• Service Standards co-ordinates policies, programmes and norms and standards for social welfare service delivery by both government and the non-government sector.
• Prevention and Rehabilitation of Substance Abuse develops and monitors policies and norms and standards for substance abuse.
• Care and Services to Older Persons develops and monitors policies and norms and standards for welfare services to older people.
• Services to People with Disabilities develops and monitors policies and norms and standards for welfare services to people with disabilities.
• Contributions funds contributions to international federations and organisations.

In the past year, the Department completed draft norms and standards for welfare services, which are currently being considered by provincial departments. The welfare services funding policy has also been completed, and is being considered by both provinces and civil society organisations. For the coming financial year, the Department envisages facilitating the establishment of a new Social Services Professions Council, as well as a strategy for the retention of social services personnel. The Minister of Finance has also indicated that additional funds are being allocated to provinces to improve the remuneration of social workers.

In relation to substance abuse, the Department notes that it wants to have a new legislative framework in place by December 2007. This suggests that the current Prevention and Treatment of Drug Dependency Act (Act No. 20 of 1992) is not effective in addressing the issue of substance abuse. This raises the issue of whether the 1999 Drug Master Plan is currently being implemented, and whether the Department has been able to measure the effectiveness of the strategy. It also raises questions about the functioning of the Central Drug Authority (CDA). Interestingly enough, the ENE does not reflect the amount of money allocated to the CDA, and therefore also does not reflect on the work of this agency.

When compared to the ENE for 2004, it appears that some of the targets set with regard to the prevention of substance abuse have been discarded completely. The Department had envisaged, for example, that a Drug Master Plan would have been developed by April 2004, and that a treatment model for youth addicts was to have been evaluated by December 2004. The Department has also not, in the past year, reported on its strategy to reduce alcohol and drug abuse among young people, which is crucial in light of the reported increase in the use of drugs such as tik-tik.

With regard to care and services to older persons, many of the strategic targets set for the past financial year appear to have been collapsed into a new target of completing a new legislative framework by December 2007. Similarly, no mention is made of whether the target of developing policy in relation to services to persons with disabilities by September 2004 has been met.

• What is the current status of the 1999 Drug Master Plan?

• Has the Central Drug Authority been carrying out its mandate appropriately?

• Has a treatment model for youth addicts been completed? If so, does the Department intend implementing such a treatment model over the medium term?

• Has any assessment been done by the national department in relation to the impact of the ke Moja drug awareness strategy? What are the main challenges in this regard?

• Has a South African action plan for older persons in line with the Madrid Plan of Action been developed?

• Has the Department reached its target with regard to training on older persons?

• Have any recommendations of the Ministerial Committee of Inquiry into Elder Abuse been implemented? If so, what is the preliminary assessment of the implementation of these recommendations?

• 'What is the status of the policy on financial awards to service organisations (financing policy)?

• What role will the national department play in ensuring better conditions of Service for social service professionals over the medium term?

3.5 Children, Families and Youth Development-R17.991 million

This programme facilitates developmental social welfare service delivery to vulnerable individuals, households and children. The allocation to the programme amounts to R17.991 million, a nominal increase of 7%. The subprogrammes are as follows:

• Care and Protection Services develops, monitors and facilitates the implementation of policies, legislation and programmes to protect empower and support children.

• Families and Victim Empowerment develops, monitors and facilitates the implementation of policies, legislation and programmes to empower victims of crime and violence and their families.

• Social Crime Prevention and Youth Development develops, monitors and facilitates the implementation of policies, legislation and programmes to protect, empower and support.

• Contributions funds payments to a number of international organisations and congresses, including International Social Services involved in research and the promotion of social welfare

• The costing of the Children's Bill has not proceeded as envisaged in the 2004 ENE. What is the agreement with the service provider in terms of a target date for the completion of the costing process?

• What is the current policy with regard to foster care - are children still placed in foster care with the primary objective of this being a temporary measure, or is foster care viewed as a more permanent solution for taking care of orphaned and abandoned children?

• What amount has the Department budgeted for the costing of the Children's Bill, and what amount for the costing of the Older Persons' Bill?
• How widely has the National Protocol on Management of Child Abuse and Neglect been implemented? What has been the role national department in the implementation of the protocol?

• What is the nature of the information collected on the national child protection register? How does the Department envisage linking this register with the register being proposed by the Children's Bill as well as the Sexual Offences Bill?

• How does the Department ensure that child abuse information held in the register in a particular province is protected in terms of national standards regarding the best interest of the child, the right to privacy and the need to protect the identity of children and abusers whose names might appear in the register?

• Has the Central Authority on Intercountry Adoptions been established? What have been the main challenges in this regard?

• What does the Department's victim empowerment policy entail?

• Has the target of training 50% of probation officers by March 2005 been met? Is the national Department satisfied that the provinces are in compliance with regard to the provisions of the Probation Services Act insofar as assessment of children in trouble with the law is concerned?

• Are the targets with regard to the establishment of 3 additional secure care facilities being met? Which sites have been identified for the establishment of these facilities? What is the capital expenditure attached to the establishment of each secure care centre, and who will be responsible for financing the building of the centres?

• Is the Department satisfied that provinces are able to exercise their mandate in relation to children and youth in trouble with the law?

• What are the core elements of the youth development strategy? When will (his strategy be implemented in the provinces? What role does the national Department envisage for itself in the implementation of this strategy?

• The establishment of early childhood development centres will form part of he Department of Social Development's contribution to the Expanded Public Works Programme. Is there a policy framework for the establishment of these services? What is the level of capacity in the provinces to monitor the standard of programmes offered at such centres across the country?

• In the absence of a policy on orphans, what role does the Department play in .ensuring that orphaned children have access to basic government services?

3.6 Development Implementation Support - R535.840 million

The programme is responsible for providing support to sustainable income-generating projects, developing policy and strategies to enhance social cohesion and creating an enabling environment for non-profit organisations

• The Department was to have developed a draft anti-poverty by October 2004. Has this strategy been developed, and if so, what is its current status?

• Has a comprehensive assessment been done with regard to those anti-poverty projects previously funded by the Department? What are the key outcomes of the assessment?

• December 2005 has been set as the new target date for the completion of a community development strategy instead of the strategy being implemented March 2005. What is the cause of this delay?

• Is there congruence between the proposed national standards for the remuneration of community development workers and the budgets available provinces for such remuneration?

• What strategy is the Department following to ensure the development of community-based organisations in rural and previously disadvantaged areas?

• The Department reports that more than 420 000 food parcels have been distributed to needy families over the past year. However, all the provinces have reported difficulties with regard to the distribution of food parcels, with some spending only between 1% and 5% of the budgets allocated for this purpose. Is the figure of 420 000 food parcels correct?

• What has been the nature of the delays in distributing food, and what impact does the delay in awarding tenders for the distribution of food parcels have on the amounts budgeted for last year? Will any of the funds allocated be rolled ver into the new financial year?

• To what extent has the department ensured that beneficiaries of food emergency aid have been linked with other developmental programmes?

• To what extent has the Department of Agriculture taken up its role in the second phase of the food emergency scheme?

The budget allocated to this programme increases significantly from R78.890 n in 2004/05 to R185.572 million in 2005/06. The programme is responsible for co-ordinating access to social development services to persons infected with affected by HIV and AIDS. In addition, the programme is responsible for mating stakeholder activities aimed at realising the rights of children, youth (omen affected by HIV and AIDS. It is in the area of community-based care programmes that the largest increase is allocated (R145 million), of which the portion (R1 38 million) flows to provinces in the form of conditional grants.

• Has a database of orphans and vulnerable children been established as envisaged? How does this database compare with the database of children in families in receipt of some form of government aid or social services?

• What are the implications of the statistics reflected by the database for social assistance planning as well as the placement of children by way of foster care or adoptions?

• How many of the 500 drop-in centres for children affected by HIV and AIDS envisaged for the period 2004 to 2007 have been established?

• The Department should receive quarterly evaluation reports in relation to the home-and community-based care programme. Are these reports being submitted? What are the main challenges emerging from reports? What support is the national department providing to provinces to ensure that national standards for home-based care are met?

• What percentage of the cost associated with the home-based care programme is dedicated to the remuneration of volunteers? Are all provinces able to comply with the remuneration standards set nationally?

• What is the relationship between the national department and the child care forums established in different communities?