COMPENSATION FUND STRATEGIC PLAN 2014/ /19 AND 2015/16 APP PRESENTATION PORTFOLIO COMMITTEE: LABOUR 1.OVERVIEW AND OBJECTIVES OF THE FUND 2.DIRECTOR-GENERALS OVERVIEW 2.1INTERVENTIONS 2.2PROGRESS TO DATE 3.STRATEGIC PLAN SUMMARY OF THE COMPENSATION FUND STRATEGIC PLAN 2015 COMPENSATION FUND PROGRAMMES 6.SERVICE DELIVERY OUTCOMES 7.STRATEGIC OBJECTIVES AND OBJECTIVE STATEMENTS PER PROGRAMME 8.ANNUAL PERFORMANCE PLAN 2015/16 9.PERFORMANCE INDICATORS AND QUARTERLY TARGETS 10.FINANCIAL ALLOCATION FOR THE APP 11.WAY FORWARD TABLE OF CONTENTS 2 Chief Directorate Communication | OVERVIEW AND OBJECTIVES OF THE FUND The Compensation Fund is a public entity of the Department of Labour. The Fund administers the Compensation for Occupational Injuries and Diseases Act no. 130/1993 as amended by the COIDA 61/1997. 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 such injuries or diseases, and provide for matters connected therewith. 3 DIRECTOR-GENERALS OVERVIEW The Compensation Fund has been experiencing challenges namely: Financial Management -Disclaimer of audit opinion for a number of years now and the increase in the number of issues identified by the AG that were not resolved by management is an indicative of the weak internal controls. Information Technology -Teething challenges with the processing and payment of claims on the Umehluko systems. For example, there is no integration between claims processing and adjudication on the one hand and payments on the other. Human Capital Management -Mismatch between the strategic needs of the Fund and the available skills, especially in the core business and finance. Whilst a number of middle and senior management appointments have been made, the impact has not yet been felt. 4 DIRECTOR-GENERALS OVERVIEW (CONT) Customer Relationship Management -The Fund is currently not responsive to enquiries from the clients. This has in some instances led to unhappy clients escalating their issues to the offices of the CC, DG, DM and Minister. In other cases clients have sought relief in court. This has largely been attributed to inadequate information flow between the implementers and client relations officers. Cumbersome Assessment Structure -The current assessment model and classification is outdated, open to abuse and manipulation and being highly complicated (too many classes). As a result, the AG always had issues with the completeness, validity of rates and the risk of collusion between employers and staff. Incidents of Fraud and Corruption -As a result of ambiguous assessment structure, there have been incidents of fraud and corruption involving staff and employers. In addition, there have also been incidents of fraudulent claims between staff and some medical practitioners. 5 INTERVENTIONS Initiated Project on Skills Audit Initiated a Smart Form project to reduce the use of paper applications Intensified Training of Users on the Umehluko System Developed a draft Policy on Employer Classification and Rating Model The Minister appointed a Task Team to assist the Fund to address audit previous audit findings and prepare for upcoming financial year end Developed and approved an Anti-Corruption and Fraud Strategy. In terms of the strategy all staff members will be expected to declare their financial interest Appointed close to 100 Interns to assist in addressing backlog in the claims management environment The Fund is currently assessing the possibility of reconfiguring organisational arrangements to ensure that the structure is able to respond appropriately to the constitutional mandate of the Fund 6 PROGRESS TO DATE A service provider to conduct Skills Audit was appointed at the end of March SCM is in the process of finalising the Service Level Agreement. Measures to Address Backlog: Since appointment these interns processed invoices. The Team has also set a benchmark target of 250 invoices per user per day. This backlog will be finalised by end of June A Cabinet Memorandum seeking to obtain approval for the implementation of the Policy on Employer Classification and Rating Model has been prepared and is en-route to Cabinet. Consultations to make the declaration of financial interest for employees below the SMS level, a Department wide initiative are underway. In the interim, the necessary form and guidelines for completion have been designed. A draft concept document on the reconfiguration of the organisational arrangements will be finalised by end of April STRATEGIC PLAN 2014/15 2018/19 8 SUMMARY OF THE COMPENSATION FUND STRATEGIC PLAN The Compensation Fund (CF) Strategic Plan is a five year plan which takes into cognisance the Vision 2030 as espoused in the National Development Plan (NDP) and the Medium Term Strategic Framework (MTSF) 2014 The MTSF finds expression through the 14 priorities and actions (commonly referred to as outcomes) identified for implementation in the next five years.Two of the outcomes were the basis for the development of the Compensation Fund of the Strategic Plan: Outcome 4: Decent employment through inclusive growth. Outcome 12: An efficient, effective and development-oriented public service. 9 SUMMARY OF THE COMPENSATION FUND STRATEGIC PLAN 2015 2019 (Cont.) Based on the two outcomes discussed above, the Compensation Fund has developed four key strategic outcome oriented goals, namely: Improve payment of benefits to the beneficiaries of the Fund. Improve the collection of revenue from employers. Participate in government initiatives of creating and sustaining decent employment. Effective administration of the Funds operations. Based on the Strategic Plan, the Compensation Fund developed the 2015/16 Annual Performance Plan (APP). The APP focuses on the measures which will implemented in order to reach the five year objectives of the Strategic Plan. The APP includes indicators, annual and quarterly targets. 10 COMPENSATION FUND PROGRAMMES 1.Corporate Management And Executive Support 2.Financial Management 3. Operations Management 4. Corporate Services 11 12 SERVICE DELIVERY OUTCOMES Government Service Delivery Outcomes DOL Strategic Objectives CF Strategic OutcomesCF Strategic Objectives Outcome 4: Decent employment through inclusive growth Strategic Objective 3: Protecting vulnerable workers Participate in government initiatives of creating and sustaining decent employment Promote policy advocacy Integration of CF with the comprehensive social security reforms Strategic Objective 5: Strengthening social protection Improve payment of benefits to the beneficiaries of the Fund Providing an efficient social safety net Improve collection of revenue from employers Improve financial viability Outcome 12: An efficient, effective and development oriented public service Strategic Objective 8: Strengthening the institutional capacity of the Department Effective administration of the Funds operations Provide professional, efficient and client orientated human resources Strengthening corporate support and services Improve corporate support and services Enhance quality and access to COIDA services and information STRATEGIC OBJECTIVES AND OBJECTIVE STATEMENTS PER PROGRAMME CORPORATE MANAGEMENT AND EXECUTIVE SUPPORT Strategic objectiveObjective statement Strengthening corporate governanceIA: Ensure full compliance with standards set by the Institute of Internal Audit-SA by implementing Quality Assurance Improvement Programmes thereby enhancing the impact on the improvement of governance. RM: Strengthening Risk Management capabilities. FINANCIAL MANAGMENT Strategic objectiveObjective statement Maintain Financial viabilityProvide efficient and effective financial management support services to all our stakeholders whilst achieving an improved audit outcome. 13 STRATEGIC OBJECTIVES AND OBJECTIVE STATEMENTS PER PROGRAMME OPERATIONS MANAGEMENT Strategic objectiveObjective statement Providing an efficient social safety netTo provide quality compensation benefits to employees and dependents for occupational injuries and diseases within prescribed time frames CORPORATE SERVICES Strategic objectiveObjective statement Provide professional, efficient and client orientated human resource Provide human resource support to line functions 14 ANNUAL PERFORMANCE PLAN 2015/ CORPORATE MANAGEMENT AND EXECUTIVE SUPPORTS PERFORMANCE INDICATORS AND QUARTERLY TARGETS FOR 2015 /16 FINANCIAL YEAR Item Strategic Goals / Outputs Key Performance Indicators Reportin g Period Annual Target 2015/16 Quarterly Targets 1st2nd3rd4 th 1.1 Developing and executing a risk based 3 year rolling and annual internal audit plan with 100% coverage annually Implementation of a 3 year risk based and annual audit plan as approved by Audit Committee with 100% completion by 31 March Annually Roll-out (Develop) risk based annual audit plan for approval by Audit Committee on or before 31 st March N/A N/A N/A Develop risk based annual audit plan (roll- out), for approval by Audit Committee on or before 31 st March Quarterly100% completion of the annual audit plan by 31 March 25% Completion of the annual audit plan 25% Completion of the annual audit plan Reporting quarterly to Audit Committee Quarterly4 Quarterly reports to Audit Committee 1 Quarterly audit report presented to Audit Committee 16 CORPORATE MANAGEMENT AND EXECUTIVE SUPPORTS PERFORMANCE INDICATORS AND QUARTERLY TARGETS FOR 2015 /16 FINANCIAL YEAR Item Strategic Goals / Outputs Key Performance Indicators Reporting Period Annual Target 2015/16 Quarterly Targets 1st2nd3rd4 th 1.2a Establish an organisational wide Risk Management in line with the Public Sector Risk Management Framework and the National Treasury Financial Management Maturity Capability Model by 2018/19 Percentage of achievement of the annually targets set out in the Risk Management Annual Operational Plan to roll out the Risk Management across the organisation as approved by the Risk Management Committee. QuarterlyTo have achieved level 3 maturity in line with the National Treasury Financial Maturity Capability Model Reviewed Enterprise risk management policy and methodology Developed crisis management plan Developed Health and Safety Policy Compiled monitoring report of strategic risks treatment. Conduct Business Continuity Management risk assessment Compiled 10 risk profiles Compiled a report of operational risks treatment plans Developed Business Continuity Management Strategy. Compiled 6 risk profiles 17 CORPORATE MANAGEMENT AND EXECUTIVE SUPPORTS PERFORMANCE INDICATORS AND QUARTERLY TARGETS FOR 2015 /16 FINANCIAL YEAR Item Strategic Goals / Outputs Key Performanc e Indicators Reporting Period Annual Target 2015/16 Quarterly Targets 1st2nd3rd4 th 1.2b Establish an organisational wide Risk Management in line with the Public Sector Risk Management Framework and the National Treasury Financial Management Maturity Capability Model by 2018/19 Number of bi-monthly reports presented to the Risk Management Committee in the financial year Quarterly6 reports presented to the Risk Management Committee. 1 Risk Management report presented to the Risk Management Committee. 2 Risk Management reports presented to the Risk Management Committee. 1 Risk Management report presented to the Risk Management Committee. 2 Risk Management reports presented to the Risk Management Committee. 18 FINANCIAL MANAGEMENTS PERFORMANCE INDICATORS AND QUARTERLY TARGETS FOR 2015 /16 FINANCIAL YEAR Item Strategic Goals / Outputs Key Performance Indicators Reporting Period Annual Target 2015/16 Quarterly Targets 1st2nd3rd4 th 2.1 Improve Employer Contributions 8% (i.e. R632 million) increase in employer contributions from R7.9 billion to R8.5 billion by 31 March Quarterly5% i.e. R395 million increase to R8.295 billion. 2,5% (i.e. 197,5 million increase to R8,220 billion) 3,5% (i.e. R276,5 million increase to R8,221 billion) 4,25% (i.e. R335,75 million increase to R8,235 billion) 5% (i.e. R395 million increase to R8,295 billion) 2.2 Growth in Investments 18.51% Increase in the value of investments by 31 March Quarterly12.22% (i.e. R5.01 billion) increase in the value of Investment from R41 billion to R46.01 billion by 31 March Increase the value of the investments by 6.11% of the total investments as at 01 April 2015 Increase the value of the investments by 3.06% of the total investments as at 01 April 2015 Increase the value of the investments by 1.53% of the total investments as at 01 April 2015 Increase the value of the investments by 1.54% of the total investments as at 01 April FINANCIAL MANAGEMENTS PERFORMANCE INDICATORS AND QUARTERLY TARGETS FOR 2015 /16 FINANCIAL YEAR Item Strategic Goals / Outputs Key Performance Indicators Reporting Period Annual Target 2015/16 Quarterly Targets 1st2nd3rd4 th 2.3Review Assessment Model. Implementation of the approved Assessment Model by 2019 QuarterlyRoll out the new Assessment Model in all CF operations by 31 March 2017 Consultation with employers and CF employees Assessment model fully developed 80% of Income employees trained on new industry classification Allocate all employers to new industry classification Roll out of new assessment model 2.4Improve Audit Opinion 100% (i.e. 93) of matters affecting the AGSA audit report for the 2013/14 audit cycle cleared by 31 March Quarterly25.26% (24) of matters affecting the AGSA audit report for the 2013/14 audit cycle cleared by 31 March Implement 6 of the matters affecting the AGSA audit report. 20 OPERATIONS MANAGEMENT S PERFORMANCE INDICATORS AND QUARTERLY TARGETS FOR 2015 /16 FINANCIAL YEAR Item Strategic Goals / Outputs Key Performance Indicators Reporting Period Annual Target 2015/16 Quarterly Targets 1st2nd3rd4 th 3.1 To increase the number of registered claims by 2019 % increase in the registration of claims received in comparison to the previous financial year Quarterly 10% increase in the number of registered claims received in comparison to the previous financial year 2% 4%2% % increase in the number of adjudicated claims in comparison to the previous financial year Quarterly 10 % increase in the number of adjudicated claims in comparison to the previous financial year 2% 4%2% 3.2To increase the number of approved medical invoices for payment by 2019 % increase in the number of approved medical invoices for payment in comparison to the previous financial year Quarterly30% increase in the number of approved medical invoices in comparison to the previous financial year 6 % 8% 21 OPERATIONS MANAGEMENT S PERFORMANCE INDICATORS AND QUARTERLY TARGETS FOR 2015 /16 FINANCIAL YEAR Item Strategic Goals / Outputs Key Performance Indicators Reporting Period Annual Target 2015/16 Quarterly Targets 1st2nd3rd4 th 3.3To increase the number of approved compensation benefits for payment by 2019 % increase in the number of compensation benefits approved for payment from the previous financial year Quarterly10% increase in the number of compensation benefits approved for payment in comparison to the previous financial year 2% 4%2% 22 OPERATIONS MANAGEMENT S PERFORMANCE INDICATORS AND QUARTERLY TARGETS FOR 2015 /16 FINANCIAL YEAR Item Strategic Goals / Outputs Key Performance Indicators Reporting Period Annual Target 2015/16 Quarterly Targets 1st2nd3rd4 th 3.4 Improved rate of processing compensation benefits and medical claims by 2019 % of registered compensation claims adjudicated within 60 working days Quarterly 85% of registered compensation claims adjudicated with 60 working days % of medical claims finalised within 60 working days of receiving invoice Quarterly85% of medical claims finalised within 60 working days of receiving invoice 23 OPERATIONS MANAGEMENT S PERFORMANCE INDICATORS AND QUARTERLY TARGETS FOR 2015 /16 FINANCIAL YEAR Item Strategic Goals / Outputs Key Performance Indicators Reporting Period Annual Target 2015/16 Quarterly Targets 1st2nd3rd4 th 3.5To increase compensation benefits to be paid to injured employees/dis eased and dependents annually Reviewed Compensation benefits for annual adjustments QuarterlyAnnual review of compensation benefits for adjustments Preliminary Report from actuaries Final report tabled for discussions with stakeholders Approval of the increased benefits by the board Submission of final proposal to the Minister. Publishing approved final gazette on increased benefits 24 CORPORATE SERVICES PERFORMANCE INDICATORS AND QUARTERLY TARGETS FOR 2015 /16 FINANCIAL YEAR Item Strategic Goals / Outputs Key Performance Indicators Reporting Period Annual Target 2015/16 Quarterly Targets 1st2nd3rd4 th 4.1Achieve a vacancy rate of below 10% by 2019 % of vacancies at CF Head Office Quarterly9.5%10% 9,5% 25 Compensation Fund main cost drivers in 2015/16: Approved Allocation: R Approved Allocation Breakdown: 26 CompensationR % Goods & ServicesR % Capital PaymentsR % FINANCIAL ALLOCATION FOR THE 2015/16 APP WAY FORWARD It is recommended that the Portfolio Committee notes the Strategic Plan and the Annual Performance Plan 2015/2016 of the Compensation Fund. Thank You Compensation Fund |