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COMPENSATION FUND

COMPENSATION FUND. PRESENTATION TO PORTFOLIO COMMITTEE ON LABOUR 1 NOVEMBER 2005. AGENDA. Overview of Annual Report Report of the Auditor-General for the 2004/05 financial year Qualifications Matters of Emphasis Progress report on the challenges in the Fund. ANNUAL REPORT 2004/05.

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COMPENSATION FUND

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  1. COMPENSATION FUND PRESENTATION TO PORTFOLIO COMMITTEE ON LABOUR 1 NOVEMBER 2005

  2. AGENDA • Overview of Annual Report • Report of the Auditor-General for the 2004/05 financial year • Qualifications • Matters of Emphasis • Progress report on the challenges in the Fund

  3. ANNUAL REPORT2004/05 • Structure and reporting lines • Compensation Commissioner • Executive Manager: Claims • Chief Financial Officer • Executive Manager: ICT • Legislation • The Compensation for Occupational Injuries and Diseases Act, (Act 130 of 1993 amended by Act 61 of 1997)

  4. ANNUAL REPORT2004/05 • Staff • Staff at the Compensation Fund - 672 plus 230 contract workers • Main tasks of the Fund • Registration of employers • Collection of return of earnings • Assessments and collection of moneys • Registration, processing and payment of claims • Payment for medical treatment • Administration of pension account • Investment of Excess funds

  5. ANNUAL REPORT2004/05 ACCOMPLISHMENTS • Development and implementation of new policies • Completed policies • Work Aggravated Asthma • Upper Airway Disorders • Protecting vulnerable workers • 4,8% annual inflationary increase to all pensioners • An additional 2% to pensioners injured before 1 April 1991

  6. ANNUAL REPORT2004/05 • Processing of claims - April 2004-April 2005 • Compensation to beneficiaries – R604 million • Cost of medical aid – R1,029 billion • Pensions paid – R314 million • Total claims expenditure – R1,95 billion • Regional medical panels • First Regional Medical Panel was set up in the Western Cape

  7. ANNUAL REPORT 2004/05 • Informing the public • Communication unit was established • COIDA advertisements were run through SABC and radio talks • Challenges • Improve service delivery • Business process re-engineering • Decentralisation of claims system to Provinces • Finalisation of policies under discussion • Development of a strategy to stakeholders

  8. ANNUAL REPORT2004/05 • Code of ethics • The Fund is committed to the highest standard of integrity, behaviour and ethics in line with the Public Service Staff Code in dealing with all it’s stakeholders and Government Authorities. • The Management and staff are expected to conduct ethical practises as set out in statutory regulations.

  9. AUDIT REPORT • Qualifications: • Accuracy of contribution income • Valuation of assessment debtors • Matters of emphasis: • Material adjustments • General computer controls • Non compliance with treasury regulations • Processing of claims

  10. ACCUARACY OF CONTRIBUTION INCOME • System problem – staff were allowed to override 30% warning signal for increased earnings • System amendment requested for overriding, only to be approved by supervisors • Office instruction issued to sensitize staff • Monthly exception reports are followed up by management • Current estimation policy under revision

  11. Valuation of assessment debtors • Consequence of over-assessments raised • Clean-up of debtors book • Additional outsourcing to ITC • Restructuring of the debt collection section • Additional contract workers appointed

  12. MATERIAL ADJUSTMENTS • All adjustments have been effected in agreement between management and the Auditor-General • No further actions required

  13. GENERAL COMPUTER CONTROLS • The Department’s IT partner, Siemens Business Services, has appointed a resource to manage this • A plan with defined timeframes has been done for completion of these issues • IT policies have been drafted – input by the relevant stakeholders is awaited • The drafting of a Disaster Recovery Plan has been outsourced to SITA • An IT security forum is in the process of being established

  14. NON-COMPLIANCE WITH TREASURY REGULATIONS • Investment strategy and policy approved by accounting authority • PIC mandate and agreement finalized • Investment committee appointed – first meeting in November 2005 • Investment will be monitored as from November 2005 in terms of the PIC mandate

  15. PROGRESS REPORT ON CHALLENGES IN THE FUND DISCUSSION POINTS • Background • Claims Processing - turn-around times and back-logs to be reduced • Office automation and electronic processing • Workflow re-engineering and integration of processes • Capacity building across disciplines

  16. BACKGROUND • Acting Commissioner appointed in February 2005 • Vision, mission and strategy was developed and approved by the Compensation Board • Business plan framework has been put in place to implement the strategy • Process was started to quantify the extent of problems and to focus resources strategically

  17. CLAIMS PROCESSING, TURN-AROUND TIME AND BACKLOG • Identification of claims status and extent of backlogs • Independent “millennium” team to deal with backlogs from 2000 and before • Two dedicated teams for backlogs between 2001 and 2003

  18. CLAIMS PROCESSING, TURN-AROUND TIME AND BACKLOG • The year by year number of claims received since 2000:

  19. CLAIMS PROCESSING, TURN-AROUND TIME AND BACKLOG

  20. CLAIMS PROCESSING, TURN-AROUND TIME AND BACKLOG

  21. CLAIMS PROCESSING, TURN-AROUND TIME AND BACKLOG

  22. Office automation and electronic processing • Claims automated process from 22/8/2005 • Currently only the basic requirements are met • Benefits: • Cultural change – more transparent and objective claims information and data • Improved processing and compliance issues • Improved Management Information Reports • Investigating “off-the-shelf” system for Medical Section

  23. Workflow re-engineering and integration of processes • Dedicated adjudication section established • Adjudicated claims have increased from 8 000 to 20 000 per month • Re-engineering of workflow • Awards and compensation payments have increased 43% • New scanning and indexing system to be tested during November 2005 • Pilot to test “off-the-shelf” system for Medical and Compensation sections

  24. Workflow re-engineering and integration of processes • Pilot projects will cover the following: • Paper document management system (mail, scanning and indexing) • Electronic document management system • Process of assessing employers • Process of handling claims • Development of electronically generated Management and Information reports • Evaluation of existing policies and procedures

  25. Capacity building across disciplines • Project managers with specific skills appointed/to be appointed in the following disciplines: • Business Process Co-ordinating Office – two business and IT process analysts • Medical officer • Legal officer • Human Resources officer • Organisational Development Officer • Financial expert

  26. Call centre and telephone system upgrading • Telephone access was very poor • Analysis carried out to identify problem areas • MINI CALL CENTRE to be introduced commencing January 2006 –constant evaluation • Improve internal phone system

  27. Litigation against the CF • Two major cases this year • Third case now instituted by LRC • Progress • Third party agent - finalized and working with them weekly • Class action- implementing agreement • New case still assessing policy implications

  28. Thank you for the time and opportunity to present the Compensation Fund to members of the Portfolio committee

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