ATC200618: Report of the Portfolio Committee on Employment and Labour on the Second Quarterly Report Regarding the Performance of the Department of Employment and Labour and its Entities in Meeting Strategic Objectives for 2019/20, Dated 10 June 2020
Employment and Labour
Report of the Portfolio Committee on EMPLOYMENT AND Labour on the SECOND Quarterly Report regarding the Performance of the Department of EMPLOYMENT AND Labour and its entities in meeting Strategic Objectives for 2019/20, dateD 10 JUNE 2020
The Portfolio Committee on Employment and Labour, having considered the Second Quarterly Report (July to September 2019) on the performance of the Department of Employment and Labour (DEL) and its entities in meeting strategic objectives for 2019/20, reports as follows:
- Introduction
The Portfolio Committee on Employment and Labour considered the Second Quarterly Report on the performance of the Department of Employment and Labour and its entities in meeting strategic objectives for 2019/20 as presented in the meeting held on 26 February, 4 and 11 March 2020.
This report gives an overview of the presentations made by the Department of Employment and Labour (Department) and its entities, focusing mainly on its achievements, output in respect of the performance indicators and targets set for 2019/20 and the financial performance. The report also provides the Committee’s key deliberations and recommendations relating to the performance of the Department and its entities.
- Performance per Strategic Objective
The Department reported on its performance per strategic objective as follows:
Table 1: DEL Performance per Strategic Objective in Q2 of 2019/20
|
STRATEGIC OBJECTIVES |
Planned Indicators |
Indicators with Q2 Targets |
Achieved |
Overall Achievement |
|
|
1 |
Strengthen occupational safety protection |
This strategic objective is covered under indicators that are applicable to protecting vulnerable workers |
|||
|
2 |
Promote equity in the labour market |
1 |
0 |
0 |
- |
|
3 |
Protecting vulnerable workers |
5 |
4 |
4 |
100% |
|
4 |
Strengthening multilateral and bilateral relations |
1 |
0 |
0 |
- |
|
5 |
Contribute to employment creation |
4 |
4 |
4 |
100% |
|
6 |
Promoting sound labour relations |
3 |
3 |
2 |
67% |
|
7 |
Monitoring the impact of legislation |
2 |
1 |
0 |
0% |
|
8 |
Strengthening the institutional capacity of the Department |
3 |
3 |
3 |
100% |
|
OVERALL PERFORMANCE |
19 |
15 |
13 |
87% |
|
Source: Presentation to the Portfolio Committee on Employment and Labour dated 26 February 2020
The overall performance of the Department improved from 83% in Q1 to 87% in Q2 of 2019/20 financial year. The Department’s performance on strategic objective 3 (Protecting vulnerable workers) improved from 50% in Q1 to 100% in Q2 of 2019/20. Performance on strategic objective 6 (Promoting sound labour relations) improved from 66% in Q1 to 67% in Q2 of 2019/20. Strategic objective 7 (Monitoring the impact of legislation) performance went down from 100% in Q1 to 0% in Q2 of 2019/20.
- Performance per Programme
The overall performance per programme was reported as follows:
Table 2: DEL Performance per Programme in Q2 of 2019/20
|
BRANCH |
Annual Planned Indicators |
Indicators with Q2 Targets |
Achieved |
Overall Achievement % |
|
|
1 |
Administration |
3 |
3 |
3 |
100% |
|
2 |
Inspections and Enforcement Services |
4 |
4 |
4 |
100% |
|
3 |
Public Employment Services |
4 |
4 |
4 |
100% |
|
4 |
Labour Policy and Industrial Relations |
8 |
4 |
2 |
50% |
|
OVERALL PERFORMANCE |
19 |
15 |
13 |
87% |
|
Source: Presentation to the Portfolio Committee on Employment and Labour dated 26 February 2020
The Inspection and Enforcement Services programme improved from 50% in Q1 to 100% in Q2 of 2019/20 financial year. Labour Policy and Industrial Relations programme went down from 86% in Q1 of 2019/20 to 50% in Q2 of 2019/20. Programme 1 (Administration) and 3 (Public Employment Services) performance remained at 100% in Q1 and Q2.
The overall performance of 87% is the highest in the previous five quarters’ performance.
- Programme performance in Q2 of 2019/20
4.1. Administration
The purpose of the Administration programme is to provide strategic leadership, management and support services to the Department.
The Administration programme comprise the following sub-programmes: Ministry; Office of the Director-General; Office of the Chief Operations Officer; Corporate Services; and Office of the Chief Financial Officer. Corporate Services includes: Human Resource Management, Internal Audit, Risk management, Security Services, Communication, Legal Services and Office of the Chief Information Officer.
The Department reported three cases of irregular expenditure, which amounted to R53 319,81 in Q2 of 2019/20, which is an increase from R22 008.45 reported in Q1 of 2019/20. A total of 53 cases of fruitless and wasteful expenditure were reported, amounting to R602 416,79, which is an increase from R360 547.06 reported in Q1. There were no cases of unauthorized expenditure reported.
A total of 185 cases were reported in Q2 of 2019/20 financial year. Of the 185 cases, 48 or 26% were reported in North West province. Northern Cape province reported three cases, which was the least number of misconduct cases reported in a province. KwaZulu-Natal reported 17 cases of misconduct related to Compensation Fund claims. Of the 185 misconduct cases reported, 56 or 30% were for dereliction of duty followed by 49 or 26% for damage of State/ rental vehicle. A total of 73 or 39% of misconduct cases reported were committed by employees on salary level six. A total of 106 or 57% of reported cases were finalized and 79 cases are still pending.
4.2. Inspection and Enforcement Services (IES)
The purpose of the IES programme is to realise decent work by regulating non-employment conditions through inspections and enforcement, to achieve compliance with all labour market policies.
The programme consists of the following sub-programmes: Management and Support Services; Occupational Health and Safety; Registration: IES; Compliance, Monitoring and Enforcement Services; Training of Staff: IES; and Statutory and Advocacy Services.
The programme inspected 112 661 employers to determine compliance with employment law against a target of 110 346, which is 2% more than the target. Of those inspected 101 190 or 88% were found to be compliant. Despite the over-achievement, Gauteng, Mpumalanga and Northern Cape were not able to achieve their targets due to:
- Inspector vacancies and inadequate supply of fleet vehicles in Gauteng (Pretoria) Labour Centre and Provincial Office;
- Limited capacity for statutory services in Mpumalanga province; and
- Few inspectors generally lagging behind in their targets.
In order to address the shortfall, the Department has:
- Expedited the filling of inspector vacancies;
- Conducted blitz inspections;
- Deployed additional inspectors to deal with backlogs;
- Deployed resources to deal with cases referred for prosecution; and
- Authorized some inspectors to use personal cars where there are shortages of fleet vehicles.
Of the 112 661 employers inspected 11 471 or 10% were non-compliant. Of the non-compliant employers, 11 447 or 99.8% against a target of 85% were served with notices within 14 calendar days of the inspection. The Gauteng province conducted 23 368 inspections, which is the highest number of inspections conducted. However, the province did not meet the target of conducting 23 760 inspections. The second highest number of inspections were conducted in KZN, which inspected 23 078 employers against a target of 22 458. The Northern Cape province conducted the least number of inspections, which was 4 137 against a target of 4 938. Mpumalanga province inspected 8 353 employers against a target of 8 544, thus missing the target.
Of the 11 447 employers served with notices to comply, 3 443 or 30% failed to comply with served notices and 76% or 1 246 of 1 638 were referred for prosecution. Gauteng and KZN had the highest number of employers served with notices within 14 calendar days, at 2 102 and 2 507 respectively. KZN referred 348 employers for prosecution, which is the highest number of referrals followed by Gauteng at 200 referrals.
Of the 169 incidents reported, 163 or 96% were finalized. Gauteng reported 46 incidents followed by KZN, which reported 28 incidents. The Northern Cape, North West and Western Cape did not finalise all the incidents.
- Public Employment Services (PES)
The purpose of this programme is to provide assistance to companies and workers to adjust to changing labour market conditions and to regulate private employment agencies.
This programme comprise the following sub-programmes: Management and Support Services; Employer Services; Work-Seeker Services; and Designated Groups Special Services. The programme has oversight over the following entities: Supported Employment Enterprises; Productivity South Africa; Unemployment Insurance Fund; and Compensation Fund.
- PES performance per Strategic Objective
PES programme reported its performance as follows:
Table 3: Performance per Strategic Goal 1: Contribute to decent employment creation
|
PROGRAMME PERFORMANCE INDICATOR |
Q2 Target |
Actual Performance |
Variance |
|
|
1. |
No of work-seekers registered on Employment Services of South Africa (ESSA) database per year |
175 000 |
252 803 |
77 803 |
|
2. |
No. of employment opportunities registered on ESSA per year |
43 200 |
87 089 |
43 889 |
|
3. |
No. of registered work-seekers provided with employment counselling per year |
109 200 |
145 858 |
36 658 |
|
4. |
No. of registered employment opportunities filled by registered work-seekers per year. |
21 600 |
33 827 |
12 227 |
Source: Information received from presentation to PC on Employment and Labour dated 26 February 2020
Table 3 reflects that the programme registered 252 803 work-seekers on ESSA against a target of 175 000, resulting to a positive variance of 77 803. The highest number of work-seekers registered were in Gauteng and KZN at 61 858 and 38 981 respectively. The Western Cape province registered the third highest number of work-seekers at 33 994.
The PES programme registered 87 089 employment opportunities on ESSA against a target of 43 200, resulting in a variance of 43 889. Gauteng and Limpopo provinces registered 13 837 and 12 335 employment opportunities respectively. The Eastern Cape province registered the third highest number of employment opportunities at 11 010.
Table 3 reflects that 145 858 work-seekers were provided with employment counselling against a target of 109 200, resulting to a variance of 36 658. Gauteng province provided 28 144 work-seekers with employment counselling against a target of 22 531. It was followed by KZN, which provided 20 297 work-seekers with employment counselling against a target of 13 869.
A total of 33 827 registered employment opportunities were filled by registered work-seekers in Q2 of 2019/20 against a target of 21 600, resulting in a variance of 12 227. Gauteng and Limpopo province filled the highest number of registered employment opportunities with registered work-seekers at 6 686 and 5 611 respectively.
4.4. Labour Policy and Industrial Relations (LP & IR)
The purpose of this programme is to facilitate the establishment of an equitable and sound labour relations environment and the promotion of South Africa’s interests in international labour matters through research, analysis and evaluating labour policy, and providing statistical data on the labour market, including providing support to institutions that promote social dialogue.
This programme consists of the following sub-programmes and entities: Management and Support Services; Strengthen Civil Society; Collective Bargaining; Employment Equity; Employment Standards; Commission for Conciliation, Mediation and Arbitration (CCMA); Research, Policy and Planning; Labour market Information and Statistics; International Labour Matters; and National Economic Development and Labour Council (NEDLAC).
LP & IR programme received seven collective agreements and four were extended within 90 calendar days, translating to a performance of 57.1% against a target of 100%. Three or 42.9% of collective agreements were extended longer than 90 calendar days. The backlog has subsequently been dealt with.
This programme received 31 applications for registration and 28 were refused within 90 calendar days of receipt. Three of the applications were approved within 90 calendar days of receipt. This translates to an overall achievement of 100%.
The programme achieved the target of moderating workplace conflict by measuring the impact of the Labour Relations Amendments. Consultations were conducted with 18 employer organisations and 15 trade unions and they have amended their constitutions as per directive.
LP & IR programme did not manage to identify service providers to deliver on the RME agenda by 30 September 2019. Terms of reference for internally conducted research were presented to the DD forum by 12 July 2019.
5. Financial Report
5.1. Expenditure information per programme in Q2 of 2019/20
Table 4: DEL Expenditure Information per programme in Q2
|
BRANCH |
Projection Jul - Sept 2019/20 |
Expenditure Jul - Sept |
Variance |
Spent |
|
|
R’000 |
R’000 |
R’000 |
% |
||
|
1. |
Administration |
256 747 |
221 431 |
35 316 |
86.2% |
|
2. |
Inspection and Enforcement Services |
146 096 |
141 800 |
4 296 |
97.1% |
|
3. |
Public Employment Services |
164 749 |
140 180 |
24 569 |
85.1% |
|
4. |
Labour Policy and Industrial Relations |
288 313 |
275 236 |
13 077 |
95.5% |
|
Total |
855 905 |
778 647 |
77 258 |
90.9% |
|
Source: Presentation to the PC: Employment and Labour dated February 2020
The Department spent R778.6 million or 90.9% of the projected R855.9 million by the end of Q2 of 2019/20, resulting to a variance of R77.2 million.
Programme 4, which received the highest programme allocation, spent R275.2 million or 95.5% of the projected R288.3 million in Q2, resulting to a variance of R13.0 million. A total of R244.7 million or 88.9% of the programme expenditure went to Transfers and Subsidies. This was 99.5% of the projected R245.8 to be spent on Transfers and Subsidies in Q2.
Programme 1 received the second highest allocation and spent R221.4 million or 86.2% of the projected R256.7 million by the end of Q2, resulting to an under-expenditure of R35.3 million. A larger portion of this programme expenditure went to Compensation of Employees and Goods and Services, which spent R103.5 million and R100.2 million respectively.
Programme 3 spent R140.1 million or 85.1% of the projected R164.7 million, translating to an under-expenditure of R24.5 million. The larger share of this programme budget went to Compensation of Employees and Transfers and Subsidies. A total of R70.2 million was spent on Compensation of Employees in Q2 followed by R56.9 million spent on Transfers and Subsidies.
Programme 2 spent R141.8 or 97.1% of the projected R146.0 million, resulting to a variance of R4.2 million. The larger portion of this programme budget went to Compensation of Employees at R115.0 million or 81.1% of the R141.8 million spent in Q2 of 2019/20 financial year.
Table 5: Expenditure Information by Economic Classification in Q2
|
ECONOMIC CLASSIFICATION |
Projection Jul – Sept 2019/20 |
Expenditure Jul – Sept 2019/20 |
Variance |
Spent |
|
|
R’000 |
R’000 |
R’000 |
% |
|
Current Payments |
528 208 |
457 065 |
71 143 |
86.5% |
|
Compensation of Employees |
332 348 |
313 441 |
18 907 |
94.3% |
|
Goods and Services |
195 860 |
143 624 |
52 236 |
73.3% |
|
Transfers and Subsidies |
317 408 |
304 640 |
12 768 |
96.0% |
|
Payments for Capital Assets |
19 789 |
16 889 |
2 900 |
85.3% |
|
Payment for Financial Assets |
- |
53 |
-53 |
-100%* |
|
Total |
865 405 |
778 647 |
86 758 |
89.9% |
Source: Presentation to the PC: Employment and Labour dated 26 February 2020
A total of R457.0 million or 86.5% of the R528.2 projected for current payments was spent in Q2, resulting to a variance of R71.1 million. The bigger share of R313.4 million or 94.3% of the projected R332.3 was spent on Compensation of Employees, resulting to a variance of R18.9 million. A total of R143.6 million or 73.3% of the R195.8 projected Goods and Services expenditure was spent by the end of Q2, translating to a variance of R52.2 million.
A total of R304.6 million or 96.0% of the projected R317.4 million was spent on Transfers and Subsidies by the end of Q2, resulting to a variance of R12.7 million.
A total of R16.8 million or 85.3% of the projected R19.7 million was spent on Payment for Capital assets resulting to a variance of R2.9 million.
6. Q2 PERFORMANCE OF ENTITIES OF THE DEPARTMENT OF LABOUR (2019/20)
The entities that report to the Department of Labour are:
- Compensation Fund (CF)
- Commission for Conciliation Mediation and Arbitration (CCMA)
- National Economic Development and Labour Council (NEDLAC)
- Unemployment Insurance Fund (UIF)
- Productivity South Africa (PSA)
6.1. The Compensation Fund (CF)
Constitutional Mandate
The mandate of the CF is derived from section 27(1)(c) of the Constitution. In terms of this section, “Everyone has the right to have access to social security, including, if they are unable to support themselves and their dependents; and appropriate social assistance.” The CF is mandated to provide social security to all injured and diseased employees.
Legislative Mandate
CF is a Schedule 3A Public Entity of DEL. CF administers the Occupational Injuries and Diseases Act (COIDA). The main objective of the Act is to provide compensation for disablement caused by occupational injuries or diseases sustained or contracted by employees, or for death resulting from injuries or diseases.
6.1.1. CF Performance per Strategic Objective in Q2 of 2019/20
CF reported on its Strategic Objectives as follows:
Table 6: Q2 Performance per Strategic Objective
|
STRATEGIC OBJECTIVE |
Annual Planned Indicators |
Indicators with targets reporting in Q2 |
Achieved |
Overall achievement % |
|
|
1. |
Provide an effective and efficient client oriented support services |
3 |
1 |
0 |
0% |
|
2. |
Provide faster, reliable and accessible COID services by 2020 |
6 |
5 |
3 |
60% |
|
Overall Performance |
9 |
6 |
3 |
50% |
|
Source: Presentation to the PC: Employment and Labour dated 26 February 2020
Table 6 above reflects that CF achieved an overall performance of 50% in Q2 of 2019/20 financial year. This is an improvement from the 33% achieved in Q1 of 2019/20. However, it is a decline in performance compared to 86% achieved in Q2 of 2018/19 financial year.
Strategic objective 1 had one indicator with a target reporting in Q2, which was not achieved. Strategic objective 2 had five indicators reporting in Q2 and three were achieved, translating to an overall achievement of 60% for this strategic objective. There were six indicators in total with targets reporting in Q2 and three were achieved, translating to an overall performance of 50%.
6.1.2. CF Performance per Programme in Q2 of 2019/20
CF reported its performance per programme as follows:
Table 7: CF Performance per Programme in Q2
|
PROGRAMME |
Annual Planned Indicators |
Indicators with targets reporting in Q2 |
Achieved |
Overall Achievement % |
|
|
1. |
Administration |
3 |
1 |
0 |
0% |
|
2. |
Compensation for Occupational Injuries and Diseases Services Operations |
3 |
2 |
1 |
50% |
|
3. |
Medical Services |
2 |
2 |
1 |
50% |
|
4. |
Orthotic and Rehabilitation |
1 |
1 |
1 |
100% |
|
Overall Performance |
9 |
6 |
3 |
50% |
|
Source: Presentation to the PC: Employment and Labour dated 26 February 2020
Table 7 above reflects performance of the CF per programme in Q2 of 2019/20. CF overall performance was 50%. Both programme 2 and 3 had two indicators each with targets reporting in Q2 and both achieved one translating to overall achievement of 50 % for both programmes. Programme 4 had one indicator with target reporting in Q2 of 2019/20, which was achieved translating to an overall achievement of 100%. Programme one had one indicator with target reporting in Q2, which was not achieved translating to an overall achievement of 0%.
Performance targets that were not achieved are the following:
- 45% implementation of the approved annual risk-based audit plan in Q2. CF managed to implement 42% of the approved annual risk-based audit plan in Q2. The reason for not achieving the target was that the risk maturity assessment report was not completed. Engagements with all stakeholders are in progress to finalise the report.
- Pay 100% of approved benefits within 5 working days in Q2. 89% of approved benefits were paid within 5 working days in Q2. The reason for not achieving the target was reported to be items being stuck in the staging area during the uMehluko era. This would be due to the claims failing validation checks on ICD to enable their integration into SAP finance system for payment. This problem is reported to have been rectified in COMPEASY as there will not be a staging area. The claims are processed and paid in the same system.
- Finalise 85% of medical invoices within 40 working days of receipt in Q2. 72% of medical invoices were finalized within 40 working days of receipt in Q2. The reason for the variance was reported to be due to movement of autopay functional due to AG and Audit Committee concerns. To remedy the situation, the entity has provided training and additional officials to process claims, re-allocated resources from programme 2 to programme 3 and reviewed provincial organizational structure to augment lacking capacity.
Performance targets that were achieved are the following:
- 94% of claims were adjudicated within 30 working days of receipt in Q2 against a target of 90%.
- 95% of pre-authorisation requests were responded to within 10working days against a target of 85%.
- 97% of compliant requests for assistive devices were responded to within 15 working days of receipt against a target of 85%.
6.1.3. Provincial Breakdown of Actual Performance
6.1.3.1. Claims adjudicated within 30 working days of receipt
CF target was to adjudicate 90% of claims within 30 working days of receipt. Table 8 below is the report on actual performance.
Table 8: Compensation claims adjudicated in Q2
|
PROVINCE |
Total claims registered |
Total claims adjudicated |
% of total claims adjudicated |
Claims adjudicated within 30 working days |
% of total claims adjudicated within 30 working days |
|
EC |
6344 |
6006 |
95% |
5752 |
91% |
|
FS |
1443 |
1401 |
97% |
1359 |
94% |
|
GP |
20615 |
19539 |
95% |
18787 |
91% |
|
KZN |
10465 |
10213 |
98% |
9835 |
94% |
|
LP |
7413 |
7140 |
96% |
7044 |
95% |
|
MP |
6566 |
6415 |
98% |
6251 |
95% |
|
NW |
4320 |
4124 |
95% |
4049 |
94% |
|
NC |
774 |
746 |
96% |
725 |
94% |
|
WC |
24517 |
24008 |
98% |
23380 |
95% |
|
Total |
82457 |
79592 |
97% |
77182 |
94% |
Source: Presentation to the PC: Employment and Labour dated 26 February 2020
CF adjudicated 79592 or 94% of 82457 registered compensation claims within 30 working days against a target of 90%. All the provinces exceeded the target of 90%.
6.1.3.2. Medical invoices finalized within 40 working days
The entity had a target of finalizing 85% of medical invoices within 40 working days. Table 9 below reflects actual performance on this target.
Table 9: Medical invoices finalized in Q2
|
PROVINCE |
Total invoices received |
Total invoices finalised |
% of total finalised |
Finalised within 40 working days |
% of total finalized within 60 working days |
|
EC |
20942 |
15813 |
76% |
14071 |
67% |
|
FS |
26197 |
20420 |
78% |
15036 |
57% |
|
GP |
242926 |
205000 |
84% |
182049 |
75% |
|
KZN |
39019 |
33936 |
87% |
23950 |
61% |
|
LP |
25888 |
24091 |
93% |
22972 |
89% |
|
MP |
36158 |
30492 |
84% |
23429 |
65% |
|
NW |
28589 |
27291 |
95% |
26831 |
94% |
|
NC |
4093 |
2887 |
71% |
2202 |
54% |
|
WC |
42381 |
30489 |
72% |
26162 |
62% |
|
Auto-pay |
842 |
788 |
94% |
661 |
79% |
|
Total |
467035 |
391207 |
84% |
337363 |
72% |
Source: Presentation to the PC: Employment and Labour dated 26 February 2020
The entity finalized 391207 or 72% of the 467035 received medical invoices within 40 working days of receipt against a target of 85%. The only two provinces that exceeded the target are Limpopo and North West provinces at 89% and 94% respectively.
6.1.3.3. Pre-authorisations responded to within 10 working days on previously finalized cases
The Fund had a target of responding to 85% of pre-authorisations within 10 working days on previously finalized cases. Table 10 below reflects actual performance on this target.
Table 10: Pre-authorisations responded to within 10 working days
|
PROVINCE |
Total Received |
Pre-authorisations responded to within 10 working days |
% Pre-authorisations responded to within 10 working days |
|
EC |
109 |
101 |
93% |
|
FS |
91 |
91 |
100% |
|
GP |
394 |
366 |
93% |
|
KZN |
207 |
206 |
100% |
|
LP |
70 |
70 |
100% |
|
MP |
115 |
112 |
97% |
|
NC |
24 |
24 |
100% |
|
NW |
40 |
36 |
90% |
|
WC |
179 |
169 |
94% |
|
Total |
1229 |
1175 |
96% |
Source: Presentation to the PC: Employment and Labour dated 26 February 2020
The Fund responded to 1175 or 96% of 1229 received pre-authorisations within 10 working days on previously finalized cases. All provinces exceeded the target of 85% response to pre-authorisations within 10 working days.
6.1.3.4. Compliant assistive devices requests responded to within 15 working days
CF’s target was to respond to 85% of compliant assistive devices request within 15 working days of receipt. Table 11 below reflects actual performance on this target.
Table 11: Compliant assistive devices request responded to within 15 working days
|
PROVINCE |
Requests Received |
Actual Performance |
Percentage Achievement |
|
EC |
70 |
61 |
87% |
|
FS |
35 |
35 |
100% |
|
GP |
168 |
164 |
98% |
|
KZN |
118 |
116 |
98% |
|
LP |
67 |
65 |
97% |
|
MP |
75 |
74 |
99% |
|
NC |
23 |
22 |
96% |
|
NW |
31 |
31 |
100% |
|
WC |
71 |
71 |
100% |
|
Total |
658 |
639 |
97% |
Source: Presentation to the PC: Employment and Labour dated 26 February 2020
The Fund responded to 639 or 97% of the 658 compliant requests for assistive devices within 15 working days of receipt. All the provinces exceeded the set target of responding to 85% of compliant requests for assistive devices.
6.1.4. CF Financial Performance in Q2 of 2019/20
CF reported financial performance as follows:
Table 12: CF Expenditure per Programme in Q2 of 2019/20
|
PROGRAMME |
Approved Budget |
Expenditure in Q2 |
Available Budget |
Overall Expenditure |
|
|
R’000 |
R’000 |
R’000 |
% |
||
|
1. |
Administration |
3 092 141 |
864 083 |
2 228 058 |
28% |
|
2. |
COID Services operations |
992 720 |
254 709 |
738 011 |
26% |
|
3. |
Medical Services |
3 036 432 |
1 337 065 |
1 699 367 |
44% |
|
4. |
Orthotic and Medical Rehabilitation |
64 975 |
45 476 |
19 499 |
70% |
|
Total |
7 186 268 |
2 501 333 |
4 684 935 |
35% |
|
Source: Presentation to the PC: Employment and Labour dated 26 February 2020
The approved budget for CF amounted to R7.2 billion and R2.5 billion or 35% was spent by the end of Q2 of 2019/20 financial year. The available budget by the end of Q2 was R4.7 billion.
Programme 1 received the largest share of the CF budget and spent R864.0 million or 28% of the allocated R3.0 billion, resulting to a variance of R2.2 billion by the end of Q2 of 2019/20. The entity reported that the Annual Performance Plan targets planned for Q2 were not achieved by the Administration programme.
Programme 2 spent R254.7 million or 26% of the allocated R992.7 million resulting to an under expenditure of R738.0 million. This programme achieved 50% of the Annual Performance Plan targets planned for Q2 of 2019/20 financial year.
Programme 3 spent R1.3 billion or 44% of the allocated R3.0 billion resulting in R1.6 billion unspent in Q2 of 2019/20. Medical Services programme achieved 50% of Annual Performance Plan targets planned for Q2 of 2019/20.
Programme 4 spent R45.4 million or 70% of the allocated R64.9 million resulting to R19.4 million remaining unspent in Q2 of 2019/20 financial year. This programme achieved all of the Annual Performance Plan targets for Q2 of 2019/20.
- The Unemployment Insurance Fund
Constitutional Mandate
The mandate of UIF is derived from section 27(1)(c) of the Constitution. UIF provides social security to its contributors in line with section 27(1)(c) which states that “everyone has the right to social security”.
Legislative Mandate
The mandate of UIF is stated in the Unemployment Insurance Act (Act 63 of 2001) as amended. The UIF was established in terms of section 4(1) of the UIA. The Act empowers the UIF to register all employers and employees in South Africa and pay those who qualify for unemployment insurance benefits.
The Unemployment Contributions Act (Act 4 of 2002) empowers the SARS Commissioner and the UI Commissioner to collect monthly contributions from both employers and employees. Section 9 of the UCA empowers the UI Commissioner to collect contributions from all those employers who are not required to register as employers in terms of the fourth schedule of the Income Tax Act (Act 58 of 1962) and who are not liable for the payment of the skills development levy in terms of the Skills Development Act (Act 9 of 1999). These contributions are used to pay benefits and other expenditure reasonably incurred relating to the application of the Act.
Policy Mandate
UIF is expected to make a contribution to the following service delivery outcomes:
- Creation of decent employment through inclusive economic growth;
- An efficient, effective and development-oriented public service and an empowered and inclusive citizenship; and
- An inclusive and responsive social security system.
- UIF Performance per Strategic Objective in Q2 of 2019/20
UIF reported on its performance per strategic objective as follows:
Table 13: UIF Performance per Strategic Objective in Q2
|
STRATEGIC OBJECTIVE |
Planned Indicators |
Achieved |
Overall Achievement % |
|
|
1. |
Ensure financial sustainability |
3 |
3 |
100% |
|
2. |
Strengthen institutional capacity of the Fund |
1 |
1 |
100% |
|
3. |
Provide easy to use services through multiple access points |
1 |
0 |
0 |
|
4. |
Improve service delivery |
6 |
6 |
100% |
|
5. |
Collaborate with stakeholders to improve compliance with UIF acts |
2 |
2 |
100% |
|
6. |
Enhance employability of UIF beneficiaries, enable entrepreneurship and preserve jobs |
2 |
0 |
0% |
|
OVERALL PERFORMANCE |
15 |
12 |
80% |
|
Source: Presentation to the PC: Employment and Labour dated 4 March 2020
The overall performance of the UIF improved from 73% in Q1 to 80% in Q2 of 2019/20 financial year. The contributor to the improved performance was 100% achievement on strategic objectives 1, 2, 4, and 5. The entity’s performance was at 0% on strategic objectives 3 and 6. The indicator for strategic objective 3 was to implement the integrated claims management system (ICMS). This was not achieved and the reason provided is that the submission was not presented to BAC and the entity is still waiting for quotation for handover from the service provider.
The first indicator for strategic objective 6 was to provide 40000 UIF beneficiaries with learning opportunities. The entity managed to provide 35341 beneficiaries with learning opportunities. The entity reported that implementation of phase 2 will bring in new beneficiaries. The second indicator was to process 90% of Training Lay-off Schemes (TLS) on receipt of recommendation ruling by Single Adjudication Committee (SAC) for approval by the delegated authority within 15 working days. Of the 15 TLS received 13 or 87% were processed within 15 working days.
- UIF Performance per Programme in Q2 of 2019/20
UIF reported on its performance per programme as follows:
Table 14:UIF Performance per programme in Q2
|
PROGRAMME |
Planned Targets |
Achieved |
Overall Achievement % |
|
|
1. |
Administration |
5 |
4 |
80% |
|
2. |
Business Operations |
8 |
8 |
100% |
|
3. |
Labour Activation Programmes |
2 |
0 |
0% |
|
Overall Performance |
15 |
12 |
80% |
|
Source: Presentation to the PC: Employment and Labour dated 4 March 2020
The Administration programme had five planned targets and managed to achieve four, translating to an overall achievement of 80%. The Business Operations programme achieved all eight planned targets, translating to 100% achievement. UIF did not achieve two targets planned for programme 3 translating to 0% achievement.
- UIF performance by province in Q2
The entity reported its performance per province in Q2 of 2019/20 financial year as follows:
6.2.3.1 Unemployment benefits
Table 15: % of valid claims (Unemployment benefit) with complete information approved or rejected within specified time frames. Target: 90% within 15 working days
|
Province |
Received |
Processed |
Processed within TAT |
Rejected |
Refused |
2019/20 Q2 |
2018/19 Q2 |
|
Eastern Cape |
61 355 |
35 096 |
33 750 |
479 |
26 259 |
96% |
93% |
|
Free State |
30 072 |
22 549 |
22 049 |
711 |
7 523 |
98% |
97% |
|
Gauteng |
150 046 |
113 644 |
111 698 |
3 340 |
36 402 |
98% |
96% |
|
Head Office |
32 284 |
9 197 |
8 191 |
693 |
23 087 |
89% |
88% |
|
KwaZulu Natal |
148 021 |
77 344 |
75 183 |
6 396 |
70 677 |
97% |
95% |
|
Limpopo |
53 892 |
37 686 |
29 403 |
947 |
16 206 |
78% |
95% |
|
Mpumalanga |
68 974 |
32 811 |
30 822 |
2 762 |
36 163 |
94% |
89% |
|
North West |
33 067 |
21 475 |
19 589 |
568 |
11 592 |
91% |
94% |
|
Northern Cape |
23 489 |
12 354 |
11 649 |
828 |
11 135 |
94% |
95% |
|
Western Cape |
111 043 |
76 593 |
69 979 |
1 824 |
34 450 |
91% |
93% |
|
Grand Total |
712 243 |
438 749 |
412 322 |
18 548 |
273 494 |
94% |
94% |
Source: Presentation to the PC on Employment and Labour dated 4 March 2020
UIF received a total of 712 243 unemployment benefit claims in Q2. Of the 438 749 valid claims with complete information processed, 412 322 were processed with 15 working days. This translates to 94% overall performance against a target of 90%, which is consistent with 2018/18 Q2 performance. Head Office received 32 284 unemployment claims benefits and processed 9 197. Of the 9 197 claims processed, 8 191 were processed with 15 working days, translating to a performance of 89%, which is less than a 90% target. However, this performance is an improvement from the 88% achieved in Q2 of 2918/19. Limpopo province received 53 892 unemployment benefits claims and processed 37 686. Of the 37 686 processed claims, 29 403 were processed within 15 working days, translating to an achievement of 78% against a target of 90%. This reflects a decline in performance from the 95% achieved in Q2 of 2018/19.
6.2.3.2. In-service, Maternity, Illness and Adoption benefits
Table 16: % of valid claims (in-service benefits, maternity, illness and adoption benefits) with complete information approved or rejected within specified time frames. Target: 90% within 10 working days
|
Province |
Received |
Processed |
Processed within TAT |
Rejected |
Refused |
2019/20 Q2 |
2018/19 Q2 |
|
Eastern Cape |
7 834 |
4 588 |
4 407 |
185 |
3 246 |
96% |
94% |
|
Free State |
3 653 |
2 585 |
2 520 |
129 |
1 068 |
97% |
97% |
|
Gauteng |
28 570 |
21 500 |
21 143 |
1 124 |
7 070 |
98% |
95% |
|
Head Office |
8 567 |
3 984 |
2 891 |
240 |
4 583 |
73% |
71% |
|
KwaZulu Natal |
21 092 |
12 295 |
11 674 |
1 209 |
8 797 |
95% |
91% |
|
Limpopo |
6 759 |
4 787 |
4 071 |
356 |
1 972 |
85% |
96% |
|
Mpumalanga |
6 748 |
3 603 |
3 308 |
484 |
3 145 |
92% |
86% |
|
North West |
4 824 |
3 231 |
2 927 |
215 |
1 593 |
91% |
95% |
|
Northern Cape |
2 643 |
1 466 |
1 409 |
279 |
1 177 |
96% |
97% |
|
Western Cape |
20 840 |
14 444 |
12 844 |
957 |
6 396 |
89% |
90% |
|
Grand Total |
111 530 |
72 483 |
67 194 |
5 178 |
39 047 |
93% |
92% |
Source: Presentation to the PC on Employment and Labour dated 4 March 2020
The entity received a total of 111 530 in-services, maternity, illness and adoption benefits claims in Q2 of 2019/20 financial year. Of the 72 483 valid claims processed, 67 194 or 93% were processed within 10 working days against a target of 90%. This is an improvement from the 92% processed within 10 working days in Q2 of 2018/19. Gauteng, Limpopo and Western Cape did not meet the target as they achieved 73%, 85% and 89% respectively.
6.2.3.3. Deceased benefits
Table 17: % of valid claims (Deceased benefit) with complete information approved or rejected within specified time frames. Target 90% within 20 working days
|
Province |
Received |
Processed |
Processed within TAT |
Rejected |
Refused |
2019/20 Q2 |
2018/19 Q2 |
|
Eastern Cape |
1 439 |
979 |
952 |
0 |
460 |
97% |
90% |
|
Free State |
908 |
643 |
612 |
0 |
265 |
95% |
100% |
|
Gauteng |
2 265 |
1 745 |
1 697 |
0 |
520 |
97% |
92% |
|
KwaZulu-Natal |
3 323 |
1 730 |
1 687 |
0 |
1 593 |
98% |
95% |
|
Limpopo |
758 |
602 |
503 |
0 |
156 |
84% |
92% |
|
Mpumalanga |
754 |
603 |
555 |
0 |
151 |
92% |
91% |
|
North West |
808 |
525 |
494 |
0 |
283 |
94% |
94% |
|
Western Cape |
1 563 |
1 089 |
1 056 |
0 |
474 |
97% |
91% |
|
Grand Total |
12 236 |
8 168 |
7 793 |
0 |
4 068 |
95% |
93% |
Source: Presentation to the PC on Employment and Labour dated 4 March 2020
The Fund received a total of 12 236 deceased benefits claims and processed 8 168 in Q2 of 2019/20. Of the 8 168 processed, 7 793 or 95% were processed within 20 working days against a target of 90%. This is an improvement from the 93% deceased benefits claims processed within 20 working days in Q2 of 2018/19 financial year. Limpopo was the only province that did not meet the target of processing 90% of deceased claims benefit within 20 working days. It processed 503 of the 603 deceased claims within 20 working days, translating to an overall achievement of 84% in Q2 of 2019/20. This reflects a decline in performance from the 92% achieved in Q2 of 2018/19.
- UIF Expenditure per Programme in Q2 of 2019/20
Table 18: UIF expenditure per programme in Q2
|
PROGRAMME |
Budget |
Actual |
Variance |
Expenditure |
|
|
R’000 |
R’000 |
R’000 |
% |
||
|
1. |
Administration |
1 387 643 |
518 757 |
868 885 |
37% |
|
2. |
Business Operation |
5 945 097 |
8 699 868 |
-2 754 779 |
146% |
|
3. |
LAP |
622 550 |
265 515 |
357 035 |
43% |
|
TOTAL |
7 955 290 |
9 484 140 |
-1 528 850 |
119% |
|
Source: Presentation to the PC on Employment and Labour dated 4 March 2020
Table 18 reflects that UIF budget was R7.9 billion and it spent R9.4 billion or 119%, which is an over-expenditure by R1.5 billion. The overall expenditure was caused by overspending in programme 2, which was allocated R5.9 billion and spent R8.6 billion or 146% resulting in over-expenditure of R2.7 billion. The over-expenditure was reported to be as a result of overspending in benefit payments due to implementation of the Amendment Act. The entity reported that benefit payments budget will be revised as per the latest actuarial valuations to cover amendments.
Programme 1 spent R518.7 million or 37% of the R1.3 billion budget resulting to underspending of R868.8 million. The Fund reported that underspending was on compensation of employees due to the vacant posts not filled. The Fund reported that it is in the process of creating the LAP structures in the provincial offices. It also reported that a number of ICT projects, both hardware and software are on contracting stages. There was low spending on management and investment fees, which was reported to be due to the new mandate that was estimated higher because the Initial Commitment Capital Fees of new instruments were substantially higher than subsequent management fees.
Programme 3 spent R265.5 million or 43% of the R622.5 million resulting to underspending amounting to R357.0 million. Underspending resulted from the implementation of certain measures to improve governance, compliance and accountability in relation to the delivery of LAP programmes. The remaining 57% is reported to be committed to 56 funding partners with whom the UIF/ DEL have concluded funding agreements. The implementation of these 56 funding agreements will be closely managed by the UIF in line with the stipulated timelines.
- UIF Expenditure per Economic Classification in Q2 of 2019/20
UIF reported on its expenditure by Economic Classification as follows:
Table 19: UIF expenditure by Economic Classification in Q2
|
ECONOMIC CLASSIFICATION |
Budget |
Actual |
Variance |
Expenditure |
|
|
R’000 |
R’000 |
R’000 |
% |
|
Compensation of Employees |
749 857 |
668 391 |
81 467 |
89% |
|
Goods and Services |
1 010 509 |
525 960 |
484 549 |
52% |
|
CAPEX |
439 102 |
82 936 |
356 166 |
19% |
|
Transfers |
5 755 821 |
8 206 854 |
2 451 032 |
142% |
|
TOTAL |
7 955 290 |
9 484 140 |
-1 528 850 |
119% |
Source: Presentation to the PC on Employment and Labour dated 4 March 2020
The Fund spent R8.2 billion or 142% of the R5.7 billion Transfers budget resulting to overspending amounting to R2.4 billion. A total of R668.3 million or 89% of the R749.8 million Compensation of Employees budget was spent by the end of Q2, resulting to underspending amounting to R81.4 million. The entity spent R525.9 million or 52% of R1.0 billion Goods and Services budget resulting to underspending amounting to R484.5 million. Underspending was reported to be as a result of cost containing measures. Of the R439.1 million CAPEX budget, R82.9 million or 19% was spent resulting in underspending amounting to R356.1 million.
- Audit findings
Thirteen cases of irregular expenditure amounting to R107.2 million were confirmed. Ten of these cases are under investigation and the irregular expenditure amounts to R12.4 million. The Fund reported that there was no progress on the status of transactions for the month ending September 2019.
The Fund has introduced the following corrective measures to reduce irregular expenditure:
- To include contract management on the performance agreement for all Directors within UIF;
- Implementation of SAP system-automated purchase orders with notifications when the spending has exceeded the contract amount;
- Each to perform reconciliation for all their contracts. SCM to keep contract matrix which is monitored by Executive Committee;
- All deviations and extensions to be tabled at the Bid Adjudication Committee, prior to extending the contract;
- Weekly report to the office of the Commissioner which include Fruitless’ Wasteful and Irregular Expenditure together with the Contract Register and Procurement plan;
- The Fund has introduced the Probity Office within the Office of the Commissioner to coordinate irregular expenditure process and monitor the implementation of the consequences management;
- The Office of the Commissioner performs an analysis on the Irregular, Fruitless and Wasteful Expenditure report and provide gap analysis where necessary;
- The progress on the Irregular, Fruitless and Wasteful Expenditure transactions is submitted to the Director-General periodically and presented to all relevant governance structures such as the Audit Committee; and
- The Fund is in the process of appointing external investigators to fast track the completion of the irregular expenditure cases.
There are five cases of Fruitless and Wasteful expenditure amounting to R79.8 million that are under investigation
6.3. Commission for Conciliation Mediation and Arbitration (CCMA)
Constitutional Mandate
CCMA aims to promote social justice and economic development in the world of work, and to be the best dispute management and dispute resolution organization. The entity derives its mandate from section 23 of the Constitution that deals with labour relations.
Legislative Mandate
CCMA legislative mandate is drawn from the purpose of the Labour Relations Act (LRA), which is to advance economic development, social justice, labour peace and the democratization of the workplace. Section 115(1) of the LRA identifies the mandatory functions of the CCMA as follows:
- Conciliate workplace disputes.
- Arbitrate certain categories of disputes that remain unresolved after conciliation.
- Establish picketing rules in respect of protected strikes and lock-outs.
- Facilitate the establishment of workplace forums and statutory councils.
- Compile and publish information and statistics.
- Consider accreditation and subsidy of Bargaining Councils and Private Agencies.
- Administer the Essential Services Committee (ESC), including the Director of the CCMA functioning as the Accounting Officer for the ESC.
6.3.1. CCMA Performance per Strategic Objective in Q2 of 2019/20
CCMA reported its performance per strategic objectives as follows:
Table 20: CCMA Performance per Strategic Objective in Q2
|
STRATEGIC OBJECTIVE |
Planned Annual Targets |
Planned Targets reporting in Q2 |
Achieved |
Overall Achievement |
|
|
1. |
Enhancing the Labour Market to advance stability and growth |
2 |
2 |
1 |
50% |
|
2. |
Advance good practices at work and transforming workplace relations |
0 |
0 |
0 |
- |
|
3. |
Building knowledge and skills |
1 |
1 |
1 |
100% |
|
4. |
Optimising the organisation |
5 |
5 |
3 |
60% |
|
Overall Performance |
8 |
8 |
5 |
63% |
|
Source: Presentation to the PC: Employment and Labour dated 4 March 2020
Table 20 reflects an overall achievement of the CCMA at 63% by the end of Q2 of 2019/20, which is a decline from 95% achieved in Q2 of 2018/19 financial year. It is also a decline in performance when compared to 71% achieved in Q1 of 2019/20 financial year.
CCMA performance in Strategic Objective 1 deteriorated from 100% in Q1 to 50% in Q2 of 2019/20 financial year. There was improvement in performance in Strategic Objective 4 from 50% in Q1 to 60% in Q2 of 2019/20 financial year. Performance on Strategic Objective 3 was consistent at 100% in Q1 and Q2 of 2019/20.
The reasons for under-performing were reported as follows:
- Seven capacity building interventions on effective negotiations skills were delivered against the target of nine. Non-achievement on this target was reported to be due to the cancellations by parties with short notice. Management reported that it has put in interventions in place to ensure that this target is reached by the end of the financial year.
- The Commission conciliated 98.3% (65 871 of 67 033) of cases at first event within 30 days of the date of receipt of the referral (excluding agreed extensions) against a target of 100%. The entity reported that it had implemented measures to improve internal controls at regional level in order to mitigate the risk of re-occurrence.
- The Commission sent 99.6% (10 866 of 10 912) of arbitration awards rendered to parties within 14 days of conclusion of the arbitration proceedings (excluding extensions granted and heads of arguments filed) against the target of 100%. Measures to improve internal controls have been implemented at Regional level to mitigate the risk of re-occurrence.
6.3.2. CCMA Dashboard in Q2 of 2019/20
The entity reported on its progress during the period under review as follows:
- A total of 58 037 cases were referred to the CCMA in Q2 of 2019/20 financial year, compared to 48 664 cases in Q2 of 2018/19 financial year.
- On average it took CCMA 23 days to conciliate disputes compared to the legislated target of 30 days.
- On average it took the entity 54 days to arbitrate disputes against a target of 60 days.
- The entity settled 36 or 78% of the 46 public interest matters (section 150) during the period under review.
- CCMA settlement rate was 77% in the period under review.
- The entity conducted 514 outreach services during the period under review.
- A total of 23 262 people were capacitated to better understand the law and their rights through the outreach activities conducted.
- Of the 22 558 jobs at stake, 9 559 or 42% were saved compared to employees facing retrenchments (cases referred to the CCMA)
- CCMA held the following events during the period under review:
- 2019 CCMA and Councils Labour Dialogue on 4-5 September 2019 at the Lakes Hotel and Conference Centre, Benoni, Gauteng Province.
- 3rd Annual CCMA shop-stewards and union officials conference on 12-13 September 2019 at Gallagher Convention Centre, Midrand, Gauteng.
- The entity received 133 complaints in Q2 of 2019/20 compared to 100 complaints received in Q2 of 2018/19 financial year. Of the 133 cases received, 130 were investigated and responded to and three are pending investigations.
6.3.3. CCMA Financial Performance in Q2 of 2019/20
Table 21: CCMA Expenditure per Programme in Q2 of 2019/20
|
PROGRAMME |
Budget |
Actual Spending |
Variance |
Expenditure as at 31/09/2019 |
|
|
R’000 |
R’000 |
R’000 |
% |
||
|
1. |
Administration |
278 496 |
263 611 |
14 885 |
95% |
|
2. |
Institution Development |
21 700 |
13 265 |
8 435 |
61% |
|
3. |
Corporate Governance |
5 293 |
3 129 |
2 165 |
59% |
|
4. |
Social Services |
218 772 |
235 001 |
(16 228) |
107% |
|
Total |
524 262 |
515 005 |
9 257 |
98% |
|
Source: Adapted from the Presentation to the PC on Employment and Labour dated 4 March 2020
CCMA spent R515.0 million or 98% of the R524.2 budget allocated for Q2 of 2019/20 financial year, resulting to a variance of R9.2 million. Programme 1 received the highest allocation of R278.4 million and spent R263.6 or 95%, resulting to a variance of R14.8 million. The variance was reported to have resulted from:
- Utilisation of court litigation costs;
- Balloting and automation of predictive tool;
- Provision for audit fees;
- Timing difference as a result of Oracle Audit Vault contract not yet signed;
- Disaster recovery solution, helpdesk solution and business reengineering contracts not yet awarded; and
- Delay in procurement of furniture.
Social Services programme received the second highest allocation of R218.7 million and spent R235.0 million, which was an overspending by R16.2 million or 7% of the programme budget. The overspending was reported to have resulted from utilization of part time commissioners which is 3% higher than the projected efficiency of 60%, as well as the increase in variable case disbursement costs such as venue and travelling costs in response to case load.
Corporate Governance spent R5.3 million or 73% of R7.3 million budget allocation, resulting to a variance of R1.9 or 27% of the allocation. The variance was reported to have resulted from training course fees and material development costs that were planned to conduct the training interventions.
Programme 2 spent R13.2 million or 61% of the allocated R21.7 million resulting to a variance of R8.4 million. The variance was reported to have resulted from training and bursary costs that were planned for but not utilized as anticipated due to lower number of applicants for bursaries.
The Corporate Governance programme spent R3.1 million or 59% of the allocated R5.2 million, resulting to underspending of R2.1 million. The variance was reported to have resulted from the timing difference in filling of vacancies as well as under expenditure on board fees and training for the Board Committees.
Table 22 CCMA Expenditure by Economic Classification in Q2 of 2019/20
|
ECONOMIC CLASSIFICATION |
Budget |
Actual Spending |
Variance |
Expenditure as.at Q2 |
|
R’000 |
R’000 |
R’000 |
% |
|
|
Compensation of Employees |
284 988 |
274 690 |
10 298 |
96% |
|
Goods and Services |
231 514 |
236 941 |
(5 427) |
102% |
|
Transfer Payments |
2 760 |
2 271 |
489 |
82% |
|
Total Operational Expenditure |
519 262 |
513 902 |
5 360 |
99% |
|
Capital Expenditure |
5 000 |
1 102 |
3 898 |
22% |
|
Total Expenditure |
524 262 |
515 004 |
9 258 |
98% |
Source: Adapted from the Presentation to the PC on Employment and Labour dated 4 March 2020
The total operational expenditure of CCMA amounted to R513.9 million or 99% of the allocated R519.2 million in Q2 of 2019/20 financial year. The largest portion of the allocation of R284.9 million went to Compensation of employees, of which R274.6 million or 96% was spent as at end of September 2019. The variance of R10.2 million was reported to unfilled vacancies.
Goods and Services received the second largest allocation of R231.5 million and R236.9 million or 102% was spent by the end of Q2 of 2019/20. The over expenditure of R5.4 million or 2% of item budget was reported to have resulted from utilization of part-time commissioners which is 3% higher than the projected efficiency of 60%, as well as the increase in variable case disbursement cost such as venue and travelling costs in response to case load. The other contributing factor is the depreciation not budgeted for. Only CAPEX was considered during the planning phase.
Transfer payments spent R2.2 million or 82% of the budgeted R2.7 million in Q2 of 2019/20 financial year, resulting to a variance of R489 000. This variance was reported to be as a result of less inflow of Bargaining Council claims submitted that relates to awards rendered and settlement agreements.
A total of R1.1 million or 22% of the budgeted R5.0 million was spent on capital expenditure, resulting to a variance of R3.8 million. The variance was reported to have resulted from the timing difference in procurement of furniture and ICT projects planned.
6.4. National Economic Development and Labour Council (NEDLAC)
NEDLAC was established through the NEDLAC Act no 35 of 1994. It operates under the terms of the NEDLAC Constitution. NEDLAC mandate is derived from the following: NEDLAC Act; Labour Relations Act, NEDLAC Constitution; and NEDLAC protocols.
NEDLAC objectives in terms of the NEDLAC Act are as follows:
- Strive to promote the goals of economic growth, participation in economic decision-making and social equity;
- Seek to reach consensus and conclude agreements on matters pertaining to social and economic policy;
- Consider all proposed labour legislation relating to labour market policy before they are introduced in Parliament;
- Consider all significant changes to social and economic policy before it is implemented or introduced in Parliament; and
- Encourage and promote the formulation of coordinated policy on social and economic matters.
6.4.1. NEDLAC Performance per programme
NEDLAC reported its performance per programme as follows:
Table 23: NEDLAC Performance per programme in Q2 of 2019/20
|
PROGRAMME |
Total No. of Quarterly Planned Indicators |
Achieved |
Not Achieved |
Overall Achievement % |
|
|
1. |
Administration |
7 |
6 |
1 |
86% |
|
2. |
Core-Operations |
7 |
7 |
1 |
100% |
|
3. |
Constituency Capacity Building |
3 |
3 |
0 |
100% |
|
Overall Performance |
17 |
16 |
2 |
94% |
|
Source: Presentation to the PC on Employment and Labour dated 11 March 2020
Table 23 reflects that NEDLAC achieved 16 or 94% of the 17 planned indicators for Q2 of 2019/20 financial year. Programme 2 and 3 achieved all planned indicators, translating to the overall achievement of 100% on both programmes.
Programme 1 achieved 6 of the 7 planned objectives, translating to an overall achievement of 86% in Q2 of 2019/20 financial year. Achieved objectives include convening a successful Annual Summit in September 2019, completion and submission of the Annual Report for 2018/19 and achievement of an unqualified audit opinion. The organizational workflow assessment could not be concluded by Human Resource in Q2 due to budgetary constraints. Completion of this target has been deferred to Q4 of 2019/20 financial year.
- NEDLAC Financial Performance in Q2 of 2019/20
- NEDLAC budgeted income for 2019/20
Table 24: Budgeted Income for 2019/20 Financial Year
|
Description of Income |
Amount |
|
|
1. |
Grant from Department of Employment and Labour |
R20 371 000 |
|
2. |
Interest Received |
R673 000 |
|
3. |
Sundry Income |
R116 000 |
|
Total Income |
R21 160 000 |
|
Source: Presentation to the PC on Employment and Labour dated 11 March 2020
The total income of NEDLAC in 2019/20 financial year amounted to R21.1 million. The largest portion of revenue was the R20.3 million grant from the Department of Employment and Labour. The second highest revenue came from interest earned on invested transfer from the Department of Employment and Labour.
- NEDLAC expenditure per programme in Q2 of 2019/20
Table 25: NEDLAC expenditure per programme in Q2 of 2019/20
|
ECONOMIC CLASSIFICATION |
Q1 Budget |
Q2 Budget |
|
|
R’000 |
R’000 |
|
Administration |
6 159 |
14 415 |
|
Core-Operations |
997 |
3 228 |
|
Capacity Building |
461 |
920 |
|
TOTAL |
7 617 |
18 563 |
Source: Presentation to the PC on Employment and Labour dated 11 March 2020
Nedlac spent R18.5 million in Q2 of 2019/20. Salaries and wages were reported to account for 46% or R8.4 million of expenditure. Job summit related expenditure amounted to R983 128. The entity reported that the implementation of employee benefits scheme accounts for a large portion of this under-expenditure. The implementation target date was the 1st January 2020.
- Productivity South Africa
Productivity SA (PSA) was established in terms of section 31 of the Employment Services Act, No. 4 of 2014 as a juristic person and Schedule 3A Public Entity in terms of the PFMA, No.1 of 1999 as amended. The mandate of PSA is to promote employment growth and productivity thereby contributing to South Africa’s socio-economic development and competitiveness.
Productivity SA has three regional offices in Johannesburg/ Midrand, which is the head office and also servicing Gauteng, North West and Limpopo; eThekwini/ Durban servicing KZN, Eastern Cape and Mpumalanga; and Cape Town servicing Western Cape, Northern Cape and Free State.
6.5.1. Productivity SA Performance per Programme in Q2 of 2019/20
Productivity SA reported its performance per programme as follows:
Table 26: Productivity SA Performance per Programme in Q2 of 2019/20
|
PROGRAMME |
Annual Planned Indicators |
Indicators with Targets Reporting in Q2 |
Achieved |
Overall Achievement % |
|
|
1. |
Corporate Services |
1 |
1 |
1 |
100% |
|
2. |
Human Resource Management |
1 |
n/a |
n/a |
n/a |
|
3. |
Marketing and Communication |
1 |
1 |
0 |
0% |
|
4. |
Productivity Organisational Solutions |
2 |
2 |
2 |
100% |
|
5. |
Value Chain Competitiveness |
2 |
n/a |
n/a |
n/a |
|
6. |
Turnaround Solutions |
- |
- |
- |
- |
|
Overall Performance |
7 |
4 |
3 |
75% |
|
Source: Presentation to the PC on Employment and Labour dated 11 March 2020
Productivity SA achieved 3 of 4 planned indicators for Q2 of 2019/20, resulting to an overall performance of 75%. This is an improvement from 60% achieved in Q1 of 2019/20 financial year and 37% achieved in Q2 of 2018/19 financial year. Programme 1 and 4 achieved all planned indicators, translating to an overall achievement of 100% each. Programme 4 improved from 50% of performance in Q1 of 2019/20 financial year. Marketing and Communication programme had one indicator reporting in Q2, which was not achieved translating to an overall achievement of 0%.
- Productivity SA Performance per Strategic Objective in Q2 of 2019/20
Productivity SA reported its performance per strategic objective as follows:
Table 27: Productivity SA Performance per Strategic Objective in Q2 of 2019/20
|
STRATEGIC OBJECTIVE |
Annual Planned Indicators |
Indicators with Targets Reporting in Q2 |
Achieved |
Overall Achievement % |
|
|
1. |
Strengthen the institutional capacity of PSA to deliver on its mandate and be financially sustainable |
2 |
1 |
1 |
100% |
|
2. |
To support government programmes aimed at sustainable employment and income growth |
1 |
1 |
1 |
100% |
|
3. |
To support enterprises facing economic distress and initiatives aimed at preventing job losses |
- |
- |
- |
- |
|
4. |
Generation and dissemination of productivity related research and statistics |
2 |
n/a |
n/a |
n/a |
|
5. |
To promote a culture of productivity and competitiveness in the workplace and community life |
2 |
2 |
1 |
50% |
|
Overall Performance |
7 |
4 |
3 |
75% |
|
Source: Presentation to the PC on Employment and Labour dated 11 March 2020
Productivity SA had an overall achievement of 100% in strategic objectives 1 and 2. It achieved one of the two performance indicators with targets reporting in Q2, translating to an overall achievement of 50%.
- Productivity SA Financial Performance in Q2 of 2019/20
Productivity SA reported its financial performance as follows:
Table 28: Productivity SA Financial Performance in Q2 of 2019/20
|
REVENUE STREAMS |
Actual |
Budget |
Deviation |
|
R’000 |
R’000 |
R’000 |
|
|
Money appropriated by Parliament (DoL) |
14 073 |
13 652 |
421 |
|
Grants (UIF) |
- |
5 000 |
(5 000) |
|
Grants (DTI) |
4 918 |
2 482 |
2 437 |
|
Graduate Income |
10 540 |
- |
10 540 |
|
Other Income |
2 477 |
7 040 |
(4 563) |
|
TOTAL INCOME |
32 008 |
28 173 |
3 835 |
|
|
|
|
|
|
EXPENSES BY ECONOMIC CLASSIFICATION |
|||
|
Employee Costs |
15 897 |
20 051 |
4 154 |
|
Goods and Services |
5 876 |
8 122 |
2 246 |
|
Graduate Expenses |
10 540 |
- |
(10 540) |
|
TOTAL EXPENSES |
32 313 |
28 173 |
(4 14) |
|
NET RESULTS |
(305) |
0 |
(305) |
Source: Presentation to the PC on Employment and Labour dated 11 March 2020
The total revenue of Productivity SA amounted to R32.0 million, comprising R14.0 million appropriated by Parliament (DoL), R10.5 million Graduate Income and R4.9 million grant from Department of Trade and Industry. A total of R2.4 million was recorded as other income.
Total expenditure amounted to R32.3 million and R15.8 million or almost half of expenditure was on Compensation of Employees. A total of R5.8 million was spent on Goods and Services.
- Committee Observations
The Committee made the following observations:
Department of Employment and Labour
7.1. The irregular expenditure incurred by the Department increased from R22 008.45 in Q1 to R53 319.81 in Q2 of 2019/20.
7.2. Fruitless and wasteful expenditure incurred by the Department increased from 360 547.06 in Q1 to R602 416.79 in Q2 of 2019/20 financial year.
7.3. Some inspectors have been authorized to use personal cars where there are shortages in fleet vehicles.
7.4. IES programme performance in Gauteng, Mpumalanga and Northern Cape was 75%, 50% and 50% respectively.
Compensation Fund
- The service providers have not been paid for a period of about six months resulting in some companies having to retrench staff.
- Comp-Easy is not functioning the way it should be.
- CF performance declined from 94% in Q1 to 72% in Q2 of 2019/20 financial year.
Unemployment Insurance Fund
- The IT systems of the Fund are off-line most of the time and the service providers are regularly changed.
- The Fund incurred irregular expenditure amounting to about R107million and ten cases amounting to about R12 million are under investigation.
- The entity incurred Fruitless and wasteful expenditure amounting to about R79 million.
Commission for Conciliation Mediation and Arbitration (CCMA)
- CCMA performance declined from 71% in Q1 to 63% in Q2 of 2019/20. When compared to Q2 of 2018/19 financial year, it declined from 95% to 63%.
- The entity has seen more than an anticipated increase in the number of referrals since the introduction of the National Minimum Wage Act.
- CCMA presentation on non-financial performance per strategic objectives reflects annual target and annual achievements and does not clearly reflect Q2 target and achievements.
- The Commission did not present its non-financial performance results per programme.
- In its presentation on financial performance the entity did not state actual expenditure as a percentage of the budget allocation.
National Economic Development and Labour Council (NEDLAC)
- NEDLAC presentation does not have a table that reflects Q2 budget allocation per programme, Q2 expenditure per programme, variance and Q2 expenditure as a percentage of budget allocation.
- Ongoing engagement at NEDLAC on impact of energy crisis on employment levels.
- Slow progress in review of the NEDLAC Act, NEDLAC Constitution and NEDLAC protocols.
Productivity South Africa
- Productivity SA did not report on financial performance per programme.
- Productivity SA self-generated income does not comprise a significant portion of its revenue.
- The issue of single source funding should be concluded by April 2020.
8. Committee Recommendations
The Committee recommends that the Minister ensures that:
Department of Employment and Labour
8.1. IES programme performance in Gauteng, Mpumalanga and Northern Cape is closely monitored with a review of timeous intervention to address poor performance.
Compensation Fund
8.2. The risk maturity assessment report is finalized and implemented without delay.
8.3. The Fund present the turn-around strategy to the Committee on ICT and how it intends to address backlogs.
Unemployment Insurance Fund
8.4. Issues raised by the Auditor general are urgently addressed.
Commission for Conciliation, Mediation and Arbitration
8.5. Resources are made available to the CCMA to ensure that it is capacitated to deal with increased work-load as a result of the introduction of the National Minimum Wage.
8.6. CCMA aligns its reporting format on finances to that of the Department.
National Economic Development and Labour Council
8.7. Nedlac aligns its format of presentation of financial information with that of the Department.
Productivity SA
8.8. The entity develops a strategy to increase the self-generated portion of revenue.
8.9. The entity aligns its financial report format to that of the Department.
Report to be considered.
Documents
No related documents