Shadrack Mkhonto Compensation Commissioner 23 May 2012

1. Presentation to the Select committee On labour & Public enterprises Shadrack Mkhonto Compensation Commissioner 23 May 2012

2. Structure of the presentation • Overview of the Compensation Fund • Organisational Overview and Performance • Financial Performance • Auditor-General Report • Key Priorities

3. “To pay compensation for death or disablement caused by occupational injuries and diseases sustained or contracted by employees within 90 days of receipt of full documentation” Measurable Objective

4. Provide an efficient social safety net. Providing professional, efficient and client orientated human resource. Strengthen corporate governance. Integration of the Fund with the comprehensive social security reforms. Promote policy advocacy. Improve financial viability. Improve corporate support and services. Enhance quality and access to COIDA services and information. CF Strategic Objectives

5. ORGANISATIONAL OVERVIEW AND PERFORMANCE 5

6. Delays and/or non-reporting of accidents by employers Information Technology systems Human capacity constraints. Records management system. KEY CHALLENGES

7. HIGHLIGHTS : 2010/11 • The Fund has fully capacitated the top management component • The vacancy rate on the Fund’s establishment has been maintained at 5.5%. • The Fund has developed an integrated comprehensive policy framework for rehabilitation, reintegration and return to work of Compensation Fund beneficiaries. The process has been through a wide consultation with all relevant stakeholders. • This also called for the amendment of COIDA, of which certain sections to be considered for amendments have already been identified. The Fund with other role players is currently busy with drafting those amendments. • Improvement in settlement of objections, 82% of objections have been finalised within the prescribed 3 months period, and the backlog has been cleared

8. HIGHLIGHTS : 2010/11 • Through the decentralisation project, a total number of 33,845 compensation claims and 245,966 medical claims have been processed to the value of R418,597,984 • Three educational campaigns to inform clients about the Fund, were conducted in Limpopo, Mpumalanga and Eastern Cape, this resulted in claims being registered and processed on the spot • Through educational campaigns, print and electronic media, we were able to reach out to millions of our stakeholders • Increased compensation benefits approved eg. the monthly compensation pension increased by 4.6% plus 90% purchasing power of the low pension earners. • Corporate governance – the Compensation Board and its sub-committees, including the audit committee are functioning effectively

9. HIGHLIGHTS : 2010/11 • RISK MANAGEMENT • Development of a formal Risk Management Strategy was adopted to ensure effective, efficient and transparent risk processes that focus on strategic and operational risks • Completion of a Fraud Prevention Plan to effectively manage the fraud risk to which the Fund is exposed – this has resulted in positive results (160 cases of fraud and other related to unethical activities were investigated and 13 officials were dismissed). • Organisational wide risk awareness was conducted as a pro-active measure. • Established a Toll-Free Crime Line, (0800-20-49-74) for staff and stakeholders to report unethical behaviour, crime and irregularities confidentially

10. OPERATIONS COMPENSATION CLAIMS The remaining 33% are claims where the medical condition of the employee has not stabilised and will only be assessed in the next financial year..

11. COMPENSATION CLAIMS R801 724 702 329 091 Payments R771 801 533 340 159 Payments

12. COMPENSATION CLAIMS YEAR ON YEAR COMPARISON BREAKDOWN OF PAYMENTS

13. MEDICAL CLAIMS YEAR ON YEAR COMPARISON In 2010/2011 financial year, of the 868,284 invoices paid, 495,051 invoices were paid within 30 days. This translates into a 71% turn-around in medical payments in comparison to the 60% of previous year.

14. MEDICAL CLAIMS

15. FINANCIAL MANAGEMENT

16. FINANCIAL MANAGEMENT

17. 3 YEAR FINANCIAL PERFORMANCE

18. HUMAN RESOURCES STAFF ESTABLISHMENT STAFF TURNOVER

19. HUMAN RESOURCES EMPLOYMENT EQUITY

20. OVERVIEW OF AUDIT FINDINGS 2005-2007 2008/9 2009/10 2010/11 Qualification Disclaimer Disclaimer Revenue contributions and assessment debtors Qualification Qualification Cleared Disclaimer Disclaimer Bank (reconciliations/ suspense accounts /balances) Qualification Disclaimer Disclaimer Claims incurred Qualification Cleared Disclaimer Accounts payable Qualification Cleared Property, plant and equipment Disclaimer Qualification Cleared Disclaimer Disclaimer IFRS 7

21. KEY PRIORITIES 2010/11 • Implementation of the approved organisational structure. • Decentralisation of COIDA services. • Implementation of the integrated claims and financial management systems. • Intensify the development and approval of the Rehabilitation, Reintegration and Return to Work Policy Framework. • Amendment of COID Act • Continue with COIDA educational campaigns to provide guidance on the Fund’s services • Improve revenue collection

22. Thank you