It is my pleasure and privilege to present to you the Annual Report of the Compensation Fund for the financial

year ended 31 March 2010.

Minister MMS Mdladlana, MPMinister of Labour

Jimmy ManyiDirector General

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Contents

Organisational Overview 3

Organisational Structure 6

Chapter One: Accounting Officer’s Report 7

Commissioner’s Overview 12

Chapter Two: Governance 16

The Compensation Board 17

Chapter Three: Operational Reporting 28

Chapter Four: Human Resource Management 43

Chapter Five: Information & Communication Technology 52

Chapter Six: Finance 56

Chapter Seven: Financial Statements 58

Acronyms

DOL : Department of LabourCF : Compensation FundDG : Director GeneralCC : Compensation CommissionerCFO : ChiefFinancialOfficerEM : Executive Manager COIDA : Compensation for Occupational Injuries and Diseases ActICT : Information and Communication TechnologyCRM : Customer Relationship ManagementOHS : Occupational Health and SafetyMISS : Minimum Information Security SystemPFMA : Public Finance Management ActPD : Permanent DisabilityTTD : Temporary Total DisablementRMA : Rand Mutual AssuranceDPSA : Department of Public Service and AdministrationPTSD : Post traumatic Stress DisorderRAF : Road Accident FundPPP : Public Private PartnershipSAP : Systems Applications and ProductsEXCO : Executive CommitteeFYI : For Your InformationCOMSYS : Compensation Management SystemTCOD : Technical Committee of Occupational DiseasesPMO : ProjectManagementOffice

OD : Occupational Diseases

3

Organisational Overview

Legislative Mandate

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 workers, or for death resulting from such injuries or diseases, and provide for matters connected therewith.TheFundisfinancedfromleviespaidbyemployers.TherevenueoftheCompensationFundconsistsmainlyofannualassessmentspaidbyregisteredemployersonthebasisofapercentageorthefixedrateoftheannual earnings of their workers. The Act, however, makes provision for a minimum assessment to ensure that the assessment is not less than the administration costs incurred.

Values

Client-centred services:We act on the understanding that our clients are the sole reason for our existence ▪We actively seek an understanding of our clients’ needs and deliver our services accordingly ▪

Efficiency and effectiveness:Wewillbeaction-orientedandefficientinourwork ▪We ensure that we are effective through achieving goals which we set ourselves ▪

Representivity:We will have a staff complement which is representative of the demographics of the population ▪

Diversity:We encourage and respect diversity ▪

Democratic practices:We subscribe to the principles of democracy and put these into practice in our work ▪

Transparency:We ensure that we are transparent in our dealings within the Department and with our external ▪stakeholders

Accountability:We accept our responsibilities and will be held accountable for our performance ▪

Sound labour relations:We practice sound labour relations within the Department ▪

Ongoing learning and development:We will create an environment which encourages learning and development ▪

4

Core Functions of the Fund

Providinganefficientsocialsafetynet▪▪EffectivemanagementoffinancesandassetsoftheFund▪▪Reform and restructure to enhance competence and performance▪▪Ensure qualitative and effective data and information management▪▪Ensure effective communication and stakeholder management▪▪

Strategic Objectives for 2009-2014

Strategic Goals Strategic Objectives

Providing an effective social safety net

Continuous review and updating of COIDA policies and regulations ▪▪Annualreviewoftariffs,benefitsandpremiums▪▪Improve claims/patient turn-around time ▪▪Continuous review of business processes ▪▪

Effective management of financesandassetsoftheFund

Ensure budgetary control and monitoring ▪▪Develop computerised systems for cash and asset management ▪▪To align procurement and acquisition systems in line with our Supply Chain ▪▪Management regulations Todevelopandimplementanewintegratedfinancialmanagementsystem▪▪To enhance revenue collection mechanisms ▪▪Tostrengthenfinancialmanagementcapacity▪▪Continuously review the performance of investments to ensure alignment ▪▪with the Fund’s investment mandate Roll-out the Risk Management Strategy and plans ▪▪

Reform and restructure to enhance competence and performance

To achieve a conducive working environment with appropriate roles and ▪▪delegations at all levels To rigorously implement a recruitment and retention strategy for key ▪▪personnel To develop and implement the Skills Development Plan and provide ▪▪relevant and targeted training To develop and implement a comprehensive human resources strategy and ▪▪plan To implement and maintain an effective performance management system ▪▪

Enhance quality and access to COIDA services and information

To ensure equity of access of COIDA services ▪▪To develop and implement a comprehensive package of services ▪▪Increase Service Channels through a Customer Relations Management ▪▪(CRM) Strategy To ensure integrated service delivery ▪▪Strengthening partnerships with private and public health service provider ▪▪institutions Implement Quality Management Systems ▪▪

Ensure qualitative and effective data information management

To develop and maintain an integrated and effective management ▪▪information system To develop an effective OHS Information System for accident prevention ▪▪To develop and implement an Actuarial Database ▪▪To develop and manage Minimum Information Security Systems (MISS) ▪▪

5

Strategic Goals Strategic Objectives

Ensure effective communication and stakeholder management

Implement and monitor the communication policy and strategy ▪▪Development of an effective branding, marketing and promotion strategy ▪▪and a uniform corporate image Implementation and Monitoring of a media relations strategy ▪▪Implementation of a public interaction and mobilisation plan incorporating ▪▪Imbizos Implementation of a public awareness, information and education campaign ▪▪

Stakeholder Identification and Expectation

Stakeholder Expectation

Workers Improved service delivery, faster turnaround on the payment of claims. ▪▪Information on the Fund and its services and easier access ▪▪

Employers Improved service delivery, faster turnaround on the payments of claims. ▪▪Easier access to information, online registration, assessment billing and ▪▪payment

Medical Service Providers Improved service delivery, faster turnaround on the payment of claims. ▪▪Easier access to information, online billing and payment and electronic ▪▪submission of information

Mutual Associations Improved service delivery ▪▪UIF Labour centre involvement ▪▪DOL Improved performance from the CF ▪▪CF Board Improved performance from the CF and reporting via the structures ▪▪

established

CF Staff Improved capability to deliver services ▪▪Certainty about the future strategic direction of the Fund ▪▪Continuous communication and feedback on progress and changes, and ▪▪effective management and support during the change process

6

Organisational Structure

Compensation CommissionerMr Shadrack Mkhonto

ChiefFinancialOfficerMs Thembeka Puzi

EM: Income ReportingMs Ella Ntshabele

EM: Financial ReportingMr Pitso Moloto

EM: Financial ControlMs Pumla Mjoli

EM: Support ServicesMr Leon van der Westhuizen

*TheExecutiveManager:InternalAuditpositionwasfilledwitheffectfrom the 16th April 2010

EM: Organisational Effectiveness

Mr Simon Nkhabelane

EM: Human Resource Management

Ms Thembi Moleko

EM: Medical ServicesMr AK Pillay

Acting EM: CompensationMr Chokola Lengolo

EM: Internal Audit Ms Tshidi Ikaneng*

PrincipalLegalAdminOfficerMs Kate Thema

Project ManagerMr Pule Tsatsi

ChiefInformationOfficerMr Vikash Sirkisson

Manager: Organisational Monitoring and EvaluationMr Madodana Tuntulwana

Manager: Risk ManagementMr Twana Makhubela

Manager: CommunicationsMs Dikentsho Seabo

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Chapter One: Accounting Officer’s Report

During the Financial year under review, the Compensation Fund made progress in achieving its objectives, details of which are outlined as follows:

Compensation Claims

In2009/10theFundhaspaidR771millioncompensationbenefitsto340159beneficiaries,ascomparedtoR630million(327647beneficiaries).ThisindicatesanincreaseofR142million(22%)ascomparedtothepreviousyear.

AtotalamountofR1,4billionwaspaidasmedicalbenefitsto781249beneficiaries;ascomparedtoR1,5billionpaidinyear2008/09to815045.Thereisa6%decrease.

Income and Investments

Inspiteoftheunfavourableeconomicclimate,theFundcollectedR4,8billionascomparedtoR4,5billioninthepreviousfinancialyear,anincreaseof6%.

ThetotalvalueofassetsincreasedfromR21,6billiontoR25billion,15%increase.Thisgrowthisasaresultofincreases in revenue collected and the average returns on investment.

Decentralisation of COIDA

To ensure equity of access to COIDA services, the Fund has decentralized its services to four provinces this year, namely, Limpopo, KwaZulu-Natal, Eastern Cape and Free State. This has resulted in improvement in service delivery.

The Fund had an unclaimed monies campaign concluded on both print and electronic media. This was to encourage beneficiaries with outstanding payment to bring their banking details. Since this campaign 2,587beneficiariessubmittedtheirbankingdetailsasat31March2010andanamountofR67millionhasbeenpaid.

Corporate Governance

The Fund is compliant and guided by, inter alia, the provisions of the PFMA, other legislations and Corporate Governance Principles outlined in the King II report. The King III report bring about added compliance requirements thatmoving forward in 2010/11 financial year, the Fundwill embrace and complywith theserequirements.

8

Risk Management

The Risk Unit has a mandate to implement risk management processes, to build a culture of risk management toensurethatallmajorrisksareidentified,managedandreportedonandmonitortheentireriskprofileoftheFund.

Duringthecurrentfinancialyear,ariskmanagementstrategywasdeveloped.AstrategicinRiskAssessmentworkshop was conducted in order to identify strategic risks that the fund is exposed to. A comprehensive operational risk assessment exercise was also conducted. A Risk Committee was also established.

Internal Audit

Internal Audit has completed a number of audits, part of which was follow ups in implementing last years Auditor General’s recommendation.

Areas needing attention were discussed with Management and the Audit Committee. Attention was given to weaknessesidentifiedandtheFundwillcontinuetoaddressthoseweaknesses.

Audit Committee

TheMinisterinconsultationwiththeAccountingOfficerhasappointedmembersoftheAuditCommittee.TheAuditCommitteehasmetmorethanfourtimesthisfinancialyeartoreviewtheworkoftheinternalaudit.

9

Progress in Addressing Previous Years Audit Disclaimer

Previous Year Finding Audit Outcome

1. Revenue contributions and assessment debtor

Various materially incorrect assessments have been recorded by the Fund in the year under review and in previous years. Consequently, I am unable to express an opinion on:

The completeness and accuracy of revenue contributions and valuation of assessment debtors.

1. Moved from disclaimer to qualification

An analysis of backlog, for processing of assessments wasperformed.Theanalysisalsoidentifiedinwhich periods the backlog of assessments related to. A dedicated team was established to address the backlog.

Debtors Age analysis was interrogated, and reconciled.

A project was also launched where some employers were contacted to verify their contact details and outstanding debts.

The Debt Collector was also appointed to follow up on outstanding debtors.

A variance report was developed to monitor capturing errors.

However, due to the magnitude of arrear assessment andthesizeofdebtbook,thisfindingcouldnotberesolved in the short-term. A three year strategic planwasdevelopedtoaddressthisqualification.

2. Bank reconciliation suspense accounts

The completeness, existence and valuation of balancesincludedinthestatementoffinancialposition;andtheoccurrence,completeness,accuracy,cut-offandclassificationoftransactionsrecordedinthestatementoffinancialperformance,cashflowstatementandnotestothefinancialstatements.

Management had not reconciled the bank balances with the general ledger and had not cleared the suspense account.

2. Qualification cleared

The weekly bank reconciliation are being performed in terms of Treasury Regulation 31.1.2j.

Monthly bank reconciliations are also performed.The suspense account was cleared to zero by end of March 2010, which was as a result of outstanding payments and electronic deposits without reference numbers.

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Previous Year Finding Audit Outcome

3. Claims Management

A backlog in the scanning of documentation on to the Fund’s electronic document management system and inadequate management supporting documentation for claims incurred have resulted in the ability of the Fund to retrieve appropriate documentation in support of claims incurred. As a result of he large volume of claims recorded I wasnotabletoperformsufficientalternativeauditprocedurestoconfirmthecompleteness,accuracyand occurrence of claims incurred amounting to R3.1billion(2008:R1.6billion).

3. Moved from Disclaimer- Qualification

There were serious challenges with the Kofax. The Commissioner appointed a task team to look into the solution to the problem.

4. Accounts payable

The Fund did not submit clear creditor reconciliations and/or appropriate detailed listings ofcreditorstotallingR89.6millionatyearendforaudit.

In addition the Fund did not accrue for interest on unclaimedmoniesduetobeneficiaries.ConsequentlyIwasunabletoobtainsufficientaudit evidence as to the completeness, valuation andaccuracyofaccountspayableamountingR89.6million.

4. Qualification Cleared

The Fund is now able to draw the age analysis on the creditors.

Reconciliations were performed on Accounts payable on monthly basis.

Reconciliation between the operations system and financialsystemsweredonemonthly.Differencesbetween the two systems were followed up and cleared.

5. Property, plant and equipment

The Fund revalued its Compensation House property as at 31 March 2009, however the value ofpropertydisclosedinthefinancialstatementsdiffers by R55.9 million from the valuation amount. In addition IAS16: property, plant and equipment requires that if the a category of assets is revalued all needs to be revalued.

The AG was unable to express opinion over the completeness, accuracy and valuation of property, plant and equipment tolling R127 million.

5. Qualification Cleared

The Fund’s two buildings were valuated by an independent valuator.

Fixed Asset register update with the valuated amount.

Reconciliations were done between the general ledger andfixedassetregister.

Progress in Addressing Previous Years Audit Disclaimer (continued)

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Previous Year Finding Audit Outcome

6. IFRS 7 Disclosure not made

The fund did not disclose the following in respect of the AC144.

Theclassificationoffinancialassetsandliabilitiesinto the category for each class, the comparison of the carrying amount and the fair value. There was disclosure for each type of risk arising from eachclassoffinancialassetsandliabilities.Therewas not maximum exposure to the credit risk and other receivables.

6. Qualification Cleared

Theclassificationoffinancialassetsandliabilitiesinto the category for each class, the comparison of the carrying amount and the fair value was done in compliance with AC 114. There was disclosure for eachtypeofriskarisingfromeachclassoffinancialassets and liabilities. The maximum credit risk exposure and other receivables were disclosed.

Conclusion

Sincere appreciation is accorded to the Minister of Labour for his active involvement, encouragement and unwavering support.

I would like to thank the Board who unreservedly contributed to the performance direction of the Fund.

And lastly to the staff and management, thank you for the commitment and unfailing support.

Sam MorotobaActing - Director General

Progress in Addressing Previous Years Audit Disclaimer (continued)

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Commissioner’s Overview

Introduction

I am honoured to present the Compensation Fund 2009/10 Annual Report. The Annual Report is informed by the challenges, progress and way forward with regards to the Compensation Fund’s programme of action and service delivery.

In the year under review, milestones have been achieved in providing a social safety net to our clients. The Turnaround Strategy has been developed and implemented, in order to improve the delivery of compensation services to our clients.

Highlights of the Year

Therehasbeena significantdecrease in theoverall vacancy rateof theFundas compared to thepreviousyear.TheFundhasmanagedtofill70%oftheSeniorExecutiveManagementposts.TheFundwasalsoabletofullycapacitatethetopstructureoftheFinancecomponentbyappointingtheChiefFinancialOfficerandfourExecutiveManagers.ThishasenabledtheFundtosuccessfullyaddressanumberofpreviousauditfindingsandrecommendations.

A Risk Management Team was appointed to address risk and other related challenges within the Fund and there hasbeensignificantachievementsindealingwithfraudandcorruptioninbothaproactiveandreactivemanner.The Fund has developed a Risk Management Strategy which is intended to reduce and prevent crime in the Fund. Several fraud related cases have been investigated and legal processes are unfolding.

To improve service delivery and to bring services nearer to the people, the Fund has piloted and rolled out certain COIDA services to the Eastern Cape, Limpopo, KwaZulu-Natal and Free State. This initiative has improved the claims turnaround time and also brought positive feedback from some of our stakeholders. The organisational restructuring process is also at an advanced stage and will assist in addressing capacity challenges. The Change Management Strategy is being rolled-out throughout the organisation to take care of the human aspects of change and improve organisational culture and performance.

InensuringimprovementofthehealthprofileoftheNation,theFundhasimmensivelyparticipatedinthesocialsecurity reform discussions and contributed in the development of the draft Social Security Reform discussion paper. A number of internal policies were reviewed in the area of Finance, Claims and Medical to enhance efficiencyandeffectiveness.Throughlessonslearned,bestpracticesandengagementwithdifferentstakeholders,the Fund is currently looking at areas where the COID Act can be amended to align it with other legislation.

Despite experiencing several challenges in the processing of claims, there have been improvements in this area.

Atotalof340159compensationbenefitswereprocessedtothevalueofR771million.

Atotalof781249medicalbenefitswereprocessedtothevalueofR1.4billion.

Fromthetotalof200559registeredclaims138765werefinalised,whichconstitutes69.1%.Theremainingclaims are serious cases where the medical condition of the employee has not yet stabilised. Compensation benefitscanonlybeprocessedoncetheemployeehasfullyrecoveredhowever,medicalcostsandlossofsalaryare being paid while the injured employee is still recuperating.

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AtotalamountofR2.1billionwaspaidinbenefits.

OurassetshaveexperiencedaminimalgrowthfromR21.4billionin2008/9toR25billion,agrowthof15%.Thisgrowth has been achieved in spite of all challenges the Fund has endured throughout the year.

Challenges for the Year

Once again, 2009/10 has been a challenging year for the Fund. The current IT systems have negatively affected the turnaround time in the processing of claims and service delivery. New IT systems are being explored in order to address this challenge.

The Fund is still experiencing challenges in the turnaround time on dispute settlement, however the envisaged implementation of the new Case Management System will bring improvement in this area.

The Fund has also experienced shortcomings in the collection of debts, however, the Debt Collection Section has been capacitated with skilled personnel to enhance collection of revenue and to coordinate the registration of employers.

Delay and/or non-reporting of accidents is one of the challenges facing the Fund and through the implementation of our Communication Strategy, employers were informed through print and electronic media, of the importance of reporting accidents.

Fraudulent activities are also negatively affecting the assets of the Fund. Security, internal controls and risk management processes are being improved.

The general capacity constraints within the Fund are being addressed by the current Turnaround Strategy and the organisational restructuring.

Financial Viability

Alexander Forbes Financial Actuaries performed the actuarial valuation of the Fund based on the Audited Management Accounts of the Compensation Fund as at 31 March 2010.

Summary of Actuarial Report

The Fund should hold outstanding claims reserve of R5.2 billion as at 31 March 2010 (R4.3 billion: 31 March 2009). The liability to pensioners for the current year should be R9.9 billion (R9.6 billion: 31 March 2009).

The Fund showed a surplus of R2.3 billion in the 2009/10 financial year▪▪ (R1.2 billion: 2008/09).

The Fund has accumulated surplus of R8.5 billion as at 31 March 2010 ▪▪ (R6.5 billion: 2008/09).

The Fund is therefore in a sound financial position at 31 March 2010. ▪▪

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Year Ahead

TherevisedfiveyearStrategicPlanandthe2010/11AnnualYearPlanhavebeenapproved,andinaprocessofbeing implemented. The implementation of the Turnaround Strategy will be continuing and is envisaged to be finalisedbytheendofthenextfinancialyear.

Appreciation

I would like to extend my gratitude to the honourable Minister of Labour Mr. M Mdladlana for the unwavering support he has given to the Fund, the Director-General Mr. Jimmy Manyi for guidance and understanding.

I would like to thank the Compensation Board and the Executive Committee for their unwavering support and commitment. I also want to thank all staff members of the Compensation Fund for their commitment and their valuable contribution, often in the face of adversity.

I wish to thank all our clients and business partners. We trust that they are experiencing a positive impact we are making to simplify our interface with them and improve their experience with us.

It is through your support that the Compensation Fund has managed to successfully deal with most of the challengesitfacedintheyearunderreview.TheFundwillstrivetoachievemoreinthenextfinancialyear.

Your support will always be highly appreciated.

S.S. MkhontoCompensation Commissioner

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Reporting Framework

The following represents the reporting framework of the Compensation Fund:

Minister of Labour

CompensationBoard

Board Sub-Committees

Director-General:Labour

AuditCommittee

Compensation Commissioner

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Chapter Two: Governance

2.1 Introduction

The Compensation Fund subscribes to the principle of good corporate governance espoused in King II/III, and believes that it complies with the King Code of Corporate Governance Practice and Conduct.

In the period under review, the Compensation Board continued to work effectively as a team in tackling the substantive issues facing the Fund, while maintaining a constructive and collaborative relationship with the Compensation Commissioner.

2.2 Compensation Board

The Compensation Board is a statutory body of the Compensation Fund that advises the Minister of Labour onpolicymatters,annualbenefitincreases,appointmentofassessorsandamendmentstotheCompensationfor Occupational Injuries and Diseases Act (COIDA). Representatives are from organised business, organised labour, government, mutual assurance companies related to the Fund and medical experts. It is expected that all representatives consult with their constituencies on all inputs they provide to the Fund.

2.3 Mandate of the Board

The Compensation Board is established in terms of section 10 of the Compensation for Occupational Injuries and Diseases Act, 1993 (Act No. 130 of 1993) as amended.

The Board’s function is to advise the Minister on the following:

Matters of policy arising out of or in connection with the application of COIDA.I.

Thenatureandextentofthebenefitsthatshallbepayabletoemployeesordependentsofemployees,II. including the adjustment of existing pensions.

The amendment of the COID Act.III.

2.4 Board Composition

The Board members bring with them a wide range of skills, business acumen, independent judgement and experience on various issues, including strategy development, performance and general leadership whilst Compensation Fund Senior Managers bring in profound understanding of the business of the Fund.

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The Compensation Board

Ms TT PughFEMA

Prof. MS MokgokongHPCSA

Mr J SinghRMA

Ms S NhlabatsiBUSA

Dr RB CrouchHPCSA

Mr N WeltmanBUSA

Mr T SzanaDepartment of Labour (OHS)

Ms B ModiseNACTU

Mr M MajolaBUSA

Dr L NdeluDepartment of Health

Mr P MaganeCOSATU

Mr S MotloungFEDUSA

Mr M MngqibisaDepartment of National Treasury

Ms J BobideCOSATU

Mr S TsianeCOSATU

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Table 1: Board Members

Name OrganisationPrincipal

Member

Alternative

Member

Appoint-

ment Date

Mr B Singh RMA √ 18/08/08

Ms TT Pugh FEMA √ 18/08/08

Prof MS Mokgokong HPCSA √ 18/08/08

Dr R B Crouch HPCSA √ 18/08/08

Mr N Weltman BUSA √ 18/08/08

Ms S Nhlabatsi BUSA √ 18/08/08

Mr M Majola BUSA √ 18/08/08

Dr L Ndelu Dept. of Health √ 18/08/08

Mr T Lamati *Dept. of Labour OHS

√ 01/04/09

Mr M MngqibisaDept of National Treasury (GEPF)

√ 18/08/08

Mr S Tsiane COSATU √ 18/08/08

Mr P Magane COSATU √ 18/08/08

Ms J Bodibe COSATU √ 18/08/08

Mr S Motloung FEDUSA √ 18/08/08

Ms B Modise NACTU √ 18/08/08

Mr E Lefhugu RMA √ 18/08/08

Mr G McIntosh FEMA √ 18/08/08

Mr W Shisana HPCSA √ 18/08/08

Brig F Meyer HPCSA √ 18/08/08

Mr F Xaba BUSA √ 18/08/08

Mr S Deva BUSA √ 18/08/08

* - New Appointment

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2.5 Board Induction

Board induction takes place when a new member is appointed in order to familiarise them with the Fund’s operation, risk management procedures, strategy, governing framework and their responsibilities.

2.6 Conflict of Interest

The Secretary of the Board maintains the Declarations of Interest and Related Party Disclosure Registers of the Board. The Board Members are required to declare their interests annually, and Registers are circulated at thefirstBoardmeetinginthebeginningofeachfinancialyear,andasandwhenthereisanamendmenttotheRegisters.Memberswhohaveaconflictofinterestonanymattertobediscussedatthemeetingarerequiredto inform the Chairperson or Secretary before the meeting. Such a member is recused from the meeting when that item is being discussed.

2.7 Delegation of Authority

According to the Compensation for Occupational Injuries and Diseases Act (COIDA), the Director-General maydesignatetheCompensationCommissioneroranyotherofficialinthePublicServicetochairmeetingsofthe Board. The Director-General appointed Mr. S.S. Mkhonto to chair the Compensation Board. However, the position of the Chairperson has been reviewed and the new chairman has been recommended to the Director-General.TheBoardSecretariatiscurrentlyco-ordinatedfromtheMonitoringandEvaluationOffice.

Table 2: Schedule of Attendance of Board Meetings

Name & Surname20

May 2009

19 August

2009

18 November

2009

24 February

2010

Mr S. Mkhonto (Chairperson)1. √ √ √ √

Mr B. Singh2. √ √ √ √

Mr E. Lefhugu3. - - - -

Ms T. Pugh4. √ √ AP AP

Mr G. McIntosh5. √ √ √ -

Prof S. Mokgokong6. √ AP √ AP

Dr R.B. Crouch7. √ AP √ √

Mr W. Shisana8. - - √ √

20

Name & Surname20

May 2009

19 August

2009

18 November

2009

24 February

2010

Brig F. Meyer9. AP A √ √

Mr N. Weltman10. AP √ AP √

Ms S. Nhlabatsi11. AP AP √ AP

Mr M. Majola12. AP √ √ √

Mr F. Xaba13. AP √ √ AP

Mr S. Deva14. AP - AP √

Dr L. Ndelu15. A √ √ A

Mr L. Lamati16. A √√

AP

Mr M. Mgqibisa17. √ √ √ √

Mr S. Tsiane18. √

√ √ AP

Mr P. Magane19. √ √ √ √

Ms J. Bodibe20. √ √ √ √

Mr S. Motloung21. AP√

√ √

Ms B. Modise22. √ √ √ √

▪= Present

AP = Apology

A = Absent

- = Not Applicable (Alternate Member)

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2.8 Board Committees

Consistent with King Il and best practice, the Board has established sub-committees to assist in discharging its responsibilities. Each committee has a mandate outlining authority delegated to it by the Board. The mandate of each committee sets out the purpose, composition, terms of reference and reporting responsibilities.

An ad hoc meeting of the Board may be convened by the Chairperson as and when the need arises.

The Board has established sub-committees on the following:

Technical Committee on Occupational Diseases▪▪Assessment and Rating Committee▪▪BenefitsCommittee▪▪Reporting and Statistic Committee▪▪Communication, Education and Marketing Committee▪▪Strategic Operational Committee▪▪Finance and Investment Committee▪▪Audit and Risk Committee▪▪

The following are key committees to assist the Board in exercising its authority:

Finance and Investment Committee▪▪BenefitsCommittee▪▪Audit Committee▪▪

2.9 Finance and Investment Committee

2.9.1 Composition

The Committee consists of three independent members:

The chairperson is appointed by the Board▪▪TheChiefFinancialOfficerandtwoExecutiveManagersattendmeetingsbyinvitation▪▪Membersareappointedforafour-yeartermofoffice▪▪The Committee meets quarterly▪▪

The Fund has also appointed Alexander Forbes as its investment advisors and actuaries.

Intermsofsection8(2)of theCOIDActtheFund ismandatedto invest itssurplus fundswiththePublicInvestment Corporation (PIC).

2.9.2 Mandate

During the period under review the Finance and Investment Committee considered investments totalling approximately R23 billion.

The mandate of the Investment Committee encompasses, among others, the following key responsibilities:

Overseeing the implementation of the Investment Strategy.▪▪Monitoring performance of the investments on a regular basis.▪▪

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Reporting quarterly to the Compensation Board on issues relating to the investment of funds under ▪▪ management.

Overseeing the criteria and process for the selection of external investment managers.▪▪Reviewing the Risk Management Framework and policies in respect of investment management, including ▪▪

derivatives policy.Present the Annual Financial Statements to the Board.▪▪Reportingquarterlyfinancialmanagementreports.▪▪

Table 3: Schedule of Meeting Attendance

Name 06/05/2009 24/07/2009 30/10/2009 25/01/2010

Mr. S. Tsiane * √ √ √ √

Mr. F. Xaba A √ √ √

Mr. J Mojapelo √ A √ √

* = Chairperson√ = PresentA = Apology

2.10 Audit Committee

The Audit Committee was established in terms of the PFMA and Treasury Regulations to assist the Executive Authority in fulfilling itsoversightresponsibility in termsof thesestatutes.Thedutiesof thecommitteearebroadlydefinedinSection51(1)(a)(ii)ofthePFMAandTreasuryRegulationsissuedinMarch2005.

2.10.1 Composition

Section 77 of the Public Finance Management Act, 1999 (Act No. 1 of 1999) regulates the membership of ▪the Audit Committee.The Audit Committee will comprise of at least four independent members.▪The Chairperson is appointed by the Director-General in consultation with the Executive Authority. At least ▪once during the term of membership will the Audit Committee meet with the Executive Authority or the Minister in charge of the Department of Labour.The Chairperson must not be in the employ of the Department of Labour.▪Memberswillbeappointedforafour-yeartermofoffice.▪The Director-General has to concur with any termination of the services of a person serving on the Audit ▪Committee.Aquorumforanymeetingwillbefiftypercentplusonemember.▪

2.10.2 The Audit Committee Charter

The Audit Committee has adopted formal terms of reference as its Audit Committee Charter that has been approved by the Fund’s Board. The terms of reference do not replace the responsibilities in terms of the above Act and Regulations, but complement and clarify the role of the Audit Committee in terms of their responsibilities. The Committee has conducted its affairs in compliance with this charter and has discharged its responsibilities contained therein. The Charter is available on request from the Compensation Fund.

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2.10.3 Roles and Responsibilities

The Audit Committee’s roles and responsibilities include its statutory duties as required by Public Finance Management Act (PFMA) and Treasury Regulations issued in March 2005.

Primarily the Audit Committee is established to assist the Board in discharging its duties relating to, among others:

The safeguarding of assets,▪▪The operation of adequate systems and controls,▪▪Ensuring the preparation of accurate financial reporting and statements in compliance with all legal▪▪requirements and accounting standards,Effective risk management,▪▪Ensuring good corporate governance,▪▪Ensuring the effectiveness of internal and external audit processes,▪▪Ensuring that the Codes of Governance Principles are maintained.▪▪

2.10.4 Audit Committee Members and Attendance of Meetings

TheChairmanoftheBoard,CompensationCommissioner,ChiefFinancialOfficer,ChiefAuditExecutive,ExternalAudit and Executive Management attend meetings by invitation.

During the year under review, the following meetings were held:

Table 4: Schedule of attendance of Audit Committee Meetings

Name 05/05 14/05 22/05 31/05 22/07 21/08 31/08 10/11 09/12 05/03/10

Mr K. Buthelezi * √ √ √ √ √ √ √ √ √ √

Mr G. Nzalo √ √ √ √ √ √ √ √ √ √

Mr S. Makhubu √ √ √ √ √ √ √ √ √ √

Ms T. Pugh # √ √ - √ √ √ - - - -

Mr F. Xaba - - - - - - - √ √ A

* = Chairperson√ = PresentA = Apology# = Resigned

24

2.11 Governance of Risk

2.11.1 Fraud Prevention Plan

As required by section 29.1.1 of the Treasury Regulations and as prescribed by Public Finance Management Act, No.1 of 1999, the Compensation Fund prepared a Fraud Prevention Plan to effectively manage the fraud risk to which the Fund is exposed. The Audit Committee is ensuring that Fraud Prevention Plan and Strategy is implemented to minimize exposure to criminal acts, particularly fraud. The Risk Management Unit addresses these threats. Its work covers risk assessment, fraud prevention, detection, response and investigation. Where serious fraud, corruption and irregularities are suspected, investigations are conducted to establish facts to enable management to deal appropriately with the matter and prevent recurrence. The 45 cases reported in thepreviousfinancialperiodwereinvestigatedandfinalised.Theallegationswereforinterceptedchequesandclaimsnotyetprocessedforbeneficiaries.

During the year under review, the Compensation Fund appointed a Risk Management Team to address the capacity challenges within the Risk Management Unit. The Unit has uncovered fraud committed by medical service providers in collusion with internal staff members. It has also uncovered areas where internal controls were ignored and compromised with the intention to commit fraud. Due to fraudulent activities, the Fund was prejudiced and as a result more than R25 million was lost. The Risk Management Unit in collaboration with SAPS, is currently conducting an intensive investigation on these matters. This resulted in the suspension of 6 employees pending disciplinary process. The eleven alleged medical service providers have since confessed to the crimes in writtenaffidavitsandwerealsoreportedtoHPCSAforpossibledisciplinaryactionandderegistration.

Duplicate payments to medical service providers were also uncovered. This process will be ongoing in an effort tointensifythefightagainstcrimeandcorruption.

As part of Fraud Prevention Plan, staff members were inducted and made aware of the risk they might be facing during the business operation as well as the consequences of corruption and fraudulent activities.

In implementing the Minimum Information Security System (MISS), the Fund has started with the implementation of the Integrated Access Control System.

2.11.2 Ethical Business Conduct

Compensation Fund commits itself to the highest standard of ethical conduct, underpinning its key value of integrity. It strives at all times to foster trust, dependability and honesty.

TheCompensationFundhasestablishedaToll-FreeCrimeLine,(0800-20-49-74)enablingemployees,suppliersandcustomerstoreportcrimeandirregularitiesconfidentially.

25

2.12 Report of the Audit Committee

Department of Labour – Compensation FundAudit Committee Report for the Year ended 31 March 2010

Report of the Audit CommitteeWearepleasedtopresentourreportforthefinancialyearended31March2010.

Audit Committee Members and Attendance:The Audit Committee consists of the members listed hereunder and should meet at least four times annually, as per the approved terms of reference. During the current year ten (10) meetings were held.

Name

05/0

5/09

14/0

5/09

22/0

5/09

31/0

5/09

22/0

7/09

21/08/09

31/08/09

10/1

1/09

09/1

2/09

05/0

3/10

Mr K. Buthelezi * √ √ √ √ √ √ √ √ √ √

Mr G. Nzalo √ √ √ √ √ √ √ √ √ √

Mr S. Makhubu √ √ √ √ √ √ √ √ √ √

Ms T. Pugh** √ √ A √ √ √ - - - -

Mr F. Xaba - - - - - - - √ √ A

Legend:* = Chairperson** = Ms Pugh resigned and was replaced by Mr Xaba√ = PresentA = Apology

Audit Committee Responsibility

TheAuditCommitteereportsthatithascompliedwithitsresponsibilitiesarisingfromsection38(1)(a)ofthePFMA and Treasury Regulation 3.1.

The Audit Committee further reports that it has adopted appropriate formal terms of reference as its charter, has regulated its affairs in compliance with its charter and has discharged all its responsibilities as contained therein.

Overseeing and informing the Risk Management process

Risk management processes are being implemented through a formal Risk Management Strategy and Framework that was adopted, ensuring effective, efficient and transparent risk processes that focus on strategic- andoperational risks. From this risk process, corrective actions and suggested enhancements to controls and processesareidentifiedinconjunctionwithmanagementandtheinternalauditteam.

26

The effectiveness of internal controls

In line with the PFMA and the King Code on Corporate Governance requirements, Internal Audit provides the Audit Committee and Management with assurance on the appropriateness and effectiveness of internal controls. The systems of internal controls implemented by the Fund within its business processes have been assessed by management as well as the risk- and internal audit functions. The control environment has been assessed as inadequate although partially adequate control structures were also concluded. The control effectiveness was concluded as partially effective. Improvement to the control environment is done on an ongoing basis with emphasis being on embedding adequate risk management practices supported by indequate Information Technology infrastructure.

InternalAuditandthemanagementreportoftheAuditor-Generalindicatedcertaininternalcontroldeficienciesand matters that have not yet been satisfactorily addressed by management as reported in prior years. In some cases, these matters are dependent on the newly envisaged Information Technology solutions for the Fund, whilst other matters have been escalated as top-priority through robust action plans.

Matters for Specific Focus by the Audit Committee (2010/2011):

ItiscrucialimportancethatthefollowingmostsignificantissueswithinthefinancialdomainoftheFundshouldreceiveongoingattentivefocusinordertoeffectqualitativeadministrationandfinancialmanagementwithintheFund:

Fraud Investigations▪▪Use of Consultants▪▪Completeness of Revenue▪▪Account Receivables▪▪Claims▪▪

The Audit Committee has tasked management to develop concrete plans, with clear timelines and deliverables to address all the Audit Findings (i.e. Internal Audit and External Audit).

The quality of management and quarterly reports submitted in terms of the PFMA and the Division of Revenue Act.

There has been good progress on the content and quality of quarterly reports prepared and issued by the AccountingOfficeroftheFundduringtheyearunderreview.Thereishoweverroomforimprovementonthequality of information prepared. It was however noted that the progress on Revenue, Debtors and implementation of a new system for the Fund has been very slow.

Internal Audit

TheAuditCommitteeconsideredtheinternalauditfunctiontobeunder-resourcedfromthe2008/2009financialyear and concluded that internal audit were not operating optimally, given limited resources and budget. In order to address the risks pertinent to the Department in its audit. The Fund implemented a co-sourced internal audit function effective from August 2009.

Forthepasteight(8)monthsinthisfinancialyear,aneffectiveinternalauditfunctionwasoperationalwithintheFund.

Going forward, in-house capacity will be established and strengthened through transitioning from an outsourced to a co-sourced agreement. This will assist in ensuring that the internal audit function has adequate resources.

27

Evaluation of the Annual Financial Statements

The Audit Committee has:

EngagedwithFinanceManagement,theChiefFinancialOfficerandtheCommissionerandhasreviewedthe▪▪PerformanceandFinancialStatements;Reviewed and discussed with theAuditor-General andAccounting Officer the audited annual financial▪▪statementstobeincludedintheannualreport;andReviewed the Auditor-General’s management report and management responses.▪▪

The Committee concurs and accepts the conclusions of the Auditor-General on the Annual Financial Statements andisoftheopinionthattheauditedannualfinancialstatementsbeacceptedandreadtogetherwiththereportof the Auditor-General.

Auditor-General South Africa

The Audit Committee has met with the Auditor-General South Africa to ensure that there are no unresolved issues.

K. Buthelezi – Chairman of the Audit Committee30 July 2010

28

Chapter Three: Operational Reporting

3.1 Registration and Processing of Claims

TheFundregisteredatotalof200559claimsduringthisfinancialyearandatotalof138765oftheseclaimshavebeenfinalised, constituting 69.1%.The remaining 30.9% are claimswhere themedical conditionof theemployeehasnotstabilisedandwillonlybeassessedinthenextfinancialyearwhentheconditionhasstabilised,as provided by the COID Act.

Themajorityofthefinalisedclaimsarewheretheemployeewasoffdutyfor3daysandless,andtheemployeedoesnotqualifyforcompensationbenefits.

Therehasbeenaremarkableincreaseinthenumberofcompensationbenefitsprocessedduringthisfinancialyearascomparedtothepreviousfinancialyears.This improvement isattributedtopolicydevelopmentsonminimum earnings and some enhancements on the existing IT systems.

Thesebenefits include awards for claims registeredduring theprevious years,which could not befinalisedbecausetheirmedicalconditionshadnotstabilisedthen.Duringthisfinancialyear,theFundhasreviewedclaimsregistered from 01 April 2006 to 31 March 2009 to ensure that all claims have been processed, which has also contributedtotheincreaseinthenumberofcompensationbenefits.

3.2 Compensation Benefits

Table 5: Temporary Total Disablement, Permanent Disablement and Pension Payments

Year No of Payments Amount Paid

2006/7 331 672 R655 000 000

2007/8 335 345 R652466698

2008/9 327 647 R630708449

2009/10 340 159 R771801533

Figure 1: Compensation Benefits

29

Table 6: Breakdown of Compensation Benefits Processed Payments

Payment Number of Payments R Amount

Additional Compensation 2 825 994.00

Burial Expenses 337 2 422 986.58

Constant Attendance Allowance 6246 6 271 628.00

Lump Sum to Widows 400 3 886 038.07

Partial Dependency 15 164 230.09

PDLumpSumPayment(30%) 101 7 050 193.27

PDPensionPayment(<30%) 4329 85 458 303.70

PDPension(>30%) 86 818 191 372 912.65

Pension 198 059 343 574 258.68

TTD 43 475 130 540 529.61

Widow and Child Pension 240 234 458.93

Total 340 159 771 801 533.58

3.3 Policy Development

TheCompensationFundhasrevieweditsbenefitsandhasmadesubstantialincreaseinthebenefitstobepaidto injured employees in the form of a lump sum, loss of earnings and monthly pension as a bulwark against the crippling economic recession. Major increases include the following:

The monthly compensation pension increased by 5% plus 85% purchasing power of the low pension▪▪earners.The minimum earnings increased from R2790 to R3055 per month while maximum earnings increased by ▪▪9.5%fromR11163permonthtoR12223permonth.Earningshaveabiginfluenceinthecalculationofbenefits.Theconstantattendanceallowanceforpensionerswhoneedconstantnursingincreasedby9.5%from▪▪

R1166 per month to R1300 per month in addition to the monthly pension.Themaximumpartialdependencylumpsumincreasedby9.5%fromR86930toR95200.▪▪Maximumfuneralbenefitsincreasedby9.5%fromR11155toR12300.▪▪

These increases have been determined on the basis of the actuarial investigations and recommendations of the Compensation Board.

The Archiving Policy and the Merit Rebate Policy were approved and their provisions are being implemented.

3.4 Compliance with COIDA

3.4.1 Monitoring of Exempted Employers and unreported accidents

The new licenses for the two mutual associations, Federated Employers Mutual Assurance and Rand Mutual ▪▪Assuranceapprovedduring2008,wereimplementedduringthisfinancialyear.NewprovisionalsettlementswithadditionalpowersforRandMutualAssuranceapprovedin2008financial▪▪year were implemented.

30

The Fund has determined administrative costs for all government departments and exempted municipalities ▪▪to the value of R14 million.Training on DPSA guidelines on COIDA was conducted to the following government institutions: Department ▪▪ofAgriculture;DepartmentofScienceandTechnology;GautengSharedServices(representingallprovincialdepartments);DepartmentofTradeandIndustry;DepartmentofPublicWorks;andStatisticsSouthAfrica.A total of 2259 cases of unreported accidents were received, investigated and referred to provinces for ▪▪further investigation by Inspection and Enforcement Services. From these cases, 1069 have been registered asclaimsfollowinginvestigationsbyHeadOfficeandtheprovinces.

3.5 Decentralisation

The Compensation Fund has decentralised certain claims functions to four provinces with a view to improving access to COIDA services by our stakeholders namely, injured employees and dependants, employers and healthcare providers. These four provinces are able to register claims, adjudicate claims to determine liability and pay medical accounts submitted by healthcare providers.

The roll out to Limpopo was achieved in July 2009 and from 01 December 2009 to KwaZulu Natal and Free State. The Port Elizabeth (PE) processing site in the Eastern Cape has been running since 2006 while the Eastern CapeProvincialOffice(5thsite)willcommenceinthe2010financialyear.Productionintheseprocessingsitesis as follows:

15730accountsworthR29millionwerepaidinthethreeProvincialOfficescollectivelysinceJuly2010.A▪▪total of 5743 claims were adjudicated to determine liability.ThePEprocessingcentrepaidatotalof122875medicalbills.▪▪14 093 claims were adjudicated since 01 April 2009.▪▪Due to the close proximity to our stakeholders, the average turn around time on registration of claims in ▪▪these processing centres is 3 days, adjudication is 5 days while medical payments is 7 days.

3.6 Contributions to the Social Security Comprehensive Reforms

Since the establishment in 2007 of an Inter-Departmental Task Team (IDTT) on comprehensive social security reforms,theCompensationFundhasbeenparticipatingindiscussionsonthereformsduringthisfinancialyear.

The IDTT is coordinated by National Treasury for consolidating inputs from the member Departments.

The Fund held bi-lateral discussions with the Department of Transport on the new policy proposals by the ▪▪Road Accident Fund (RAF). Inputs from these discussions were consolidated in the Government Paper for social security reforms.Other discussions were also held with the Department of Health regarding the impact of the proposed ▪▪National Health Insurance (NHI) on COIDA. All other COIDA related inputs were consolidated in the Government Draft Paper.▪▪ThefinalversionoftheConsolidatedGovernmentPaperisstillunderdiscussion.▪▪

31

3.7 Prevention of Accidents Through Strengthening Civil Society

As an effort to strengthen policy advocacy, the Compensation Fund through the DOL Strengthening Civil Society Fundhasidentifiedandfundedthreenon–profitorganisations,toadvocateCOIDAandOccupationalHealthandSafety policy by amongst other things developing curricula and training Shop Stewards in the various industries as follows:

The Industrial Health Research Group (IHRG) project in collaboration with the University of Cape Town is ▪currently developing modules for curricula on OHS and COIDA. The project has developed the Foundation Phasemodule,IntermediateandAdvancedmodulesforConstruction;SteelandIronandMunicipalindustries.Thesemoduleswillbemadeavailableforothertraininginstitutionscountrywideduringthe2010financialyear.The Workers' World Media production has run radio talk shows on 39 community radio stations ▪countrywide. The talk shows are on OHS and COIDA. The Priceless Honour project trained over 400 shop stewards on COIDA and OHS in KwaZulu Natal. ▪A total amount of R1,3 million was paid to these projects during this year. ▪

3.8 Organisational Redesign

The aim of the restructuring process is to come up with an appropriate decentralized structure to enable the fund to deliver on its strategic mandate. The organizational re-design process is currently at an advanced stage as the Service Delivery Model, draft organizational structure, business processes, competency framework and newjobprofileshavealreadybeendevelopedfollowinginternalconsultationswithstaffandmanagement.

TheFundisatthestageoffinalizingconsultationwiththerelevantstakeholdersonskillsauditandrefiningtheorganisational structure. Once the consultation process has been completed, the Service Delivery Model and the organizational structure will be submitted to the Minister of Labour for approval and consultation with the Minister of Public Service and Administration. It is envisaged that this process will culminate with a new organizationalstructurewhichwillbeimplementedinthenextfinancialyear.

3.9 Medical Benefits

Forthefinancialyear2009/2010,781249accountswereprocessed,comparedto815045duringthefinancialyear2008/2009.

The value of these paid medical accounts for 2009-2010 was R1.4 billion compared to R1.5 billion paid in 2008/2009.

3.9.1 Medical Services

TheCompensationFundemploysmedicalofficersandprofessionalnurseswhoaretaskedwithadvisingtheCompensation Commissioner on matters pertaining to claims of employees injured or who contracted diseases during the course of their duties, and medical service providers.

Duringthefinancialyear,thefollowingperformancewasnoted:

32

Table 7: Performance

Claim type Total Approved RejectedAdditional

Information Required

Re-openings 2162 1483 152 527

Medical

accounts5692 2433 none 3259

PTSD 621 162 166 293

Occupational

Diseases2642 1111 35 1496

3.9.2 Tariffs for Medical Aid Expenses

The tariffs of fees for medical services are revised on an annual basis after consultation with health care provider associations.

For 2010/2011, the tariff increase approved by the Compensation Board was 13% across the board withadjustments made to the Physiotherapist and the Orthotists.

Table 8: Rehabilitation and Assistive Devices

Claim type Total Approved RejectedAdditional

Information Required

Assistive

devices1759 1552 93 114

3.9.3 Turn-around Time

Inthe2009/2010financialyeartheturnaroundtimeonmedicalpaymentswas60days,ofthese,179240waspaid within 42 days.

Inthe2008/2009financialyear,theturn-aroundtimeonmedicalpaymentswas38daysaveragedon172656claims.

Thistranslatesinto60%turn-aroundtimeinmedicalpayments.However,theimplementationofnewITsystemswill further improve the process.

33

Table 9: Medical Claims

Year Number of Payments Rand Value

2006/07 886511 R1,430,143,788

2007/08 777 320 R1,294,380,035

2008/09 815045 R1,540,340,287

2009/10 781249 R1,451,516,511

The difference of R100 million was approved in March 2010 but paid in April 2010.

3.10 Directorate: Legal Services

The objective of Legal Services is to provide legal support and legal administration to the Compensation Fund to ensure compliance with the provisions of the Compensation for Occupational Injuries and Diseases Act 130 of 1993 (COIDA).

Legal Services is sub-divided into two sections, namely:

Litigation, Contracts and Legal Opinions Section, and ▪Hearings and Third Party Section. ▪

3.10.1 Litigation, Contracts and Legal Opinions

This section is responsible for management of litigation and contracts with intent to avoid unnecessary legal costs against the Compensation Fund.

Legalserviceshasdealtwith78litigationcasesandfinalized37cases. ▪Legal Services drafted 141 contracts, vetted 12 contracts and interpreted 5 contracts. ▪Legal Services has rendered legal advice on 31 contracts. ▪

3.10.2 Third Party and Hearings Section

Third Party

The Third Party Section recovers moneys from the third parties where an employee was involved in a motor vehicle accident whilst on duty in terms of section 36 of the COIDA. If liability for compensation is accepted, the Fund will pay compensation and recover what it has paid from Road Accident Fund (RAF).

341 Claims lodged against RAF amounting to R50 million.▪▪1985thirdpartyclaimsfinalisedandR6,9millionrecovered.▪▪StateAttorney’sOfficeinstructedtocollectpaymentofR3,4millionfromtheRoadAccidentFund.▪▪Further claims are still pending and processed.▪▪

The Third Party Section experienced procedural delays in recovery of third party claims and challenges with electronic link between Compensation Fund and the Road Accident Fund.

34

Hearings

In terms of section 91 of COIDA any person who is affected by the decision of the Director-General relating to a claim for compensation, may lodge an objection against such decision.

Suchobjectionsareadjudicateduponbythetribunalcomposedofthepresidingofficerassistedbytheemployerand employee assessor as well medical assessor appointed by the Director-General in terms of section 6 of COIDA.

The tribunal has the same jurisdiction as the Magistrate Court in the sense that its decisions can only be reviewed and appealed in the High Court.

Section 91 Objections ▪▪841outstandingpreviousyearo 467 received current yearo Totalobjectionsreceived=1308o 575finalisedo 733 outstanding due to:o

Unavailability of expert witnesses and legal representatives of the injured employees.1. Delay in obtaining outstanding medical reports from Doctors and employees.2. Untraceable employees due to change of address and contacts without informing the Fund.3.

In terms of section 56 of COIDA employees are entitled to claim increased compensation in the event where an accident was caused by the negligence of the employer or a person deemed to be a supervisor/manager. Such claims are adjudicated in the similar process as section 91 objections.

Section 56 Applications:▪▪69 received o 28finalisedo 41 outstanding due to:o

Delayed response from employers to applications.1. Delayed response from employees.2.

AtotalofR6826924waspaidtopanelmembers,witnesses,recordingfirmsandothersfortheirparticipation▪▪in the hearing processes.InordertocapacitatetheDirectorate,PresidingOfficers,AssessorsandInterpreterswereappointedand▪▪trained in certain areas.

3.11 Communication

The Sub-directorate Communication serves as a liaison between the Fund and its internal and external stakeholders.

This unit is responsible for a full spectrum of marketing and communication activities.

3.11.1 Unclaimed Monies Campaign

The Unclaimed Monies Awareness Campaign ran from the 1st tothe28th February 2010. The main objective of thiscampaignwastocalluponbeneficiarieswhoseclaimshadbeenfinalisedbutdidnotreceiveanycompensationfrom the Fund. The adverts were run on national, provincial and community newspapers and radio stations.

35

Thirty interviews were conducted with COIDA Assistant Managers on different community radio stations nationally to outline the purpose of the campaign and also to respond to questions from members of the public and affected stakeholders.

Figure 2: Print advertisement for the unclaimed monies

Sincetherunningofthecampaignabout2500beneficiariescameforwardandhavesincebeenpaidtheamountvalued at R67 million.

The Fundwill be taking further initiatives to reach out to the beneficiaries who did not heed the call byconductingtheoutreachprogrammesinallprovinces,whereallbeneficiarieswillbeinvitedandgettheonsiteservices.

3.11.2 Educational Campaigns

Educational campaigns focusing on claims reporting procedures and employees’ rights were conducted through radio talk shows in six provinces and on ten different community radio stations. These radio talk shows are still continuing. Below is the breakdown table for the interviews conducted:

36

Table 10: Interviews conducted

Radio Station Broadcast Time Area

Northern Cape

Radio Riverside 8-9pmThursdays Upington

Western Cape

Radio Zibonele 8–9pmTuesdays Khayelitsha

Radio Atlantis 6–8pmMondays Atlantis

Kwazulu Natal

Maputaland Radio 12.30–1.30Sundays Jozini

Inanda FM 11 -12am Wednesdays Newcastle

Durban Youth Radio 7-8pmWednesdays Durban

Limpopo

Zebediela Community Radio 7-8pm Zebediela

Botlokwa Community Radio 10 -11am Dwarsrivier

North West

Star FM 6 - 7pm Tuesdays Klerksdorp

Qwa-Qwa Community Radio 7.30-8.30pm Phuthaditjhaba

3.11.3 Marketing and Branding

As part of the advocacy programme, the Compensation Fund distributed over 20 000 educational pamphlets in all provincialoffices. This initiative serves as a tool toeducate stakeholders about thedifferent servicesrendered by the Fund. To intensify this initiative other efforts were taken where the Fund participated in different exhibition programmes such as SHERCON, Ministerial Imbizo and the Rand Easter Show. These events gave the Fund the opportunity to interact with different stakeholders and provided information to clients on the spot. Over 6 000 pamphlets were issued to the clients and the public at large during these events.

Onethousandcopiesofthe2008/09AnnualReportwereproducedanddistributedtodifferentstakeholdersof the Fund. A total of one thousand copies of the Compensation Fund Strategic Plan were produced and also distributed to both internal and external stakeholders and also tabled in Parliament.

37

Table 11: Breakdown

ItemNo.

Produced

Distributed to

Parliament

Distributed to

Stakeholders

Cost per Unit

Total cost

Annual Report

1000 500 500 53.43 53 425.00

Strategic Plan

1000 500 500 41.54 41 534.76

Table 12: Organisational Performance

KRA 1: Strengthening the Social Protection of the Compensation Fund

1. Directorate: Claims (Medical and Compensation)

Key Outputs/Outcomes

Measurable Performance

Indicators Actual Progress / Results Achieved

Constraints/Challenges

Corrective ActionTime

QIndicators

1.1 Continuous review and updating of COIDA policies and regulations

Q4 Develop and implement outstanding COIDA policies by 31 March 2010.

AchievedThe Archiving Policy and the Merit Rebate Policy were approved by EXCO in March 2010.

None None

1.2 Annual Review of tariffs,benefitsand premiums

Q4 Determine medical tariffs and COIDA benefitsinconsultation with various stakeholders by 31 March 2010.

AchievedThefinalgazetteoncompensationbenefitswasapproved by the Minister with effect from 01 April 2010.

None None

38

KRA 1: Strengthening the Social Protection of the Compensation Fund

1. Directorate: Claims (Medical and Compensation)

Key Outputs/Outcomes

Measurable Performance

Indicators Actual Progress / Results Achieved

Constraints/Challenges

Corrective ActionTime

QIndicators

1.3 Improve claims/patient turn around time

Q1-4 70%ofnewcompensation claims finalized.

Not achieved-69%completeFinalized 37 962 in Q4.

Finalized138765fortheyear from a total of 200 599 registered claims.

Totalcompensationbenefitsprocessed according to years:

Morebenefitswereprocessed as compared to the previous years due to the implementation of the Policy on Minimum Earnings.

IT delays in developing the enhancements to the system.

Manual workflowprocesses.

The FYI report on finalizedclaimsis not updating efficiently.

The IT enhancement was deployed in March 2010.

Workflowprocesses are being reviewed.

The automated new COMSYS system to be implemented in April 2010.

Q1-4 60%ofmedical claims finalizedwithin 3 months of receiving the invoice.

AchievedAtotalof298740medicalaccounts was received in Quarter 4 and a total of 214 835waspaidintheentirequarter. A total of 179 240 was paid within 42 days.

A total of 1 315 249 medical accounts were received during thisyear.Atotalof781249medical accounts were paid whichconstitutes60%.

2007/2008–777230paymentspaid.2008/2009815045paymentsmade.2009/2010–781249paymentsmade.

Systems not aligned.

Delays in processing of claims.

Project to address alignment and electronic submission has commenced.

Business processes in a process of beingmodified.

Year Number Amount

2007/8 335 343 R652,466,698

2008/9 327 647 R630,708,449

2009/10 340 159 R771,801,533

39

KRA 1: Strengthening the Social Protection of the Compensation Fund

1. Directorate: Claims (Medical and Compensation)

Key Outputs/Outcomes

Measurable Performance

Indicators Actual Progress / Results Achieved

Constraints/Challenges

Corrective ActionTime

QIndicators

1.4 Strengthening partnerships with private and public health service provider institutions

Q4 Roll out of the Provincial Medical Advisory Panels (PMAPs) to all regions by 31 March 2010.

Not achievedOrganised labour, medical experts and the Fund have proposed to meet and assist the Technical Committee on Occupational Diseases (TCOD) on the way forward regarding the work of the PMAPs.

Awaiting the recommen-dations and assistance by the TCOD.

The TCOD is assisting with the roll-out Strategy.

KRA 2: Strengthening the Institutional Capacity of the Compensation Fund

2. Directorate: Finance

Key Outputs/Outcomes

Measurable Performance

Indicators Actual Progress / Results Achieved

Constraints/Challenges

Corrective Action

TimeQ

Indicators

2.1 Develop computerized systems for cash and asset management

Q2 Asset Register in place.

AchievedAssets with zero ▪▪values re-evaluated.Assetverification▪▪conducted.Disposal committee ▪▪appointed.

None None

Q1-4 All relevant monthly reconciliations approved. (AP, AR General ledger accounts).

AchievedMonthly General Ledger reconciliations are performed and signed off by senior management.

None None

40

KRA 2: Strengthening the Institutional Capacity of the Compensation Fund

2. Directorate: Finance

Key Outputs/Outcomes

Measurable Performance

Indicators Actual Progress / Results Achieved

Constraints/Challenges

Corrective Action

TimeQ

Indicators

2.2 Employer returns and assessments

Q1-4 Assessments process within 180daysofreceipt.

Not achievedTotal assessments raised =217398176243(81%)assessments raised within180daysofreceipt.

Staff capacity

Ineffective financialsystem

Creation of additional posts.

Implementation ofnewfinancialsystem

2.3 Increase assessment revenue

Q1-4 7%increaseascompared to previous year.

AchievedTarget=R4.8billion(R4.5billion:2008/9)

None None

2.4 Registration of Employers

Q1-4 5%increaseof registered employers as compared to previous year.

AchievedTotal registered = 400 355(380244:2008/9).Growth=6%.

None None

2.5 Continuously review the performance of investments to ensure alignment with the Fund’s investment mandate

Q1- 4 Above market returns on investment achieved.

AchievedThe Fund has achieved 9.49%forCompensationand8.78%forPensionwhich is above the marketreturnsof8.81%and7.86%respectively.

None None

2.6 Maintain the Fund as a going concern

Q1-4 2:1 Financial ratio maintained.

AchievedThe current ratio of 3:1 was achieved.

None None

2.7 Unqualifiedaudit reports

Q1-4 40%reductioninauditfindings.

Not Achieved60%oftheauditfindingshave been addressed, but the Fund did not achieve anunqualifiedauditopinion.

None None

41

KRA 2: Strengthening the Institutional Capacity of the Compensation Fund

3. Directorate: Project Management

Key Outputs/Outcomes

Measurable Performance

Indicators

Actual Progress / Results Achieved

Constraints/Challenges

Corrective Action

TimeQ

Indicators

3.1 Coordinate all projects currently running under the Compensation Fund:Integrated ▪▪Revenue Generation and Claims Management SystemOrganisational ▪▪RedesignDecentralisation of ▪▪COIDA Services to ProvincesRehabilitation and ▪▪Reintegration

Q1-4 Integrated CF Restructuring Project Plan developed and approved.

AchievedIntegrated Project Plan Approved by DoL Project Steering Committee in April 2009.

None None

3.1 Coordinate all projects currently running under the compensation Fund:Integrated ▪▪Revenue Generation and Claims Management SystemOrganisational ▪▪RedesignDecentralisation of ▪▪COIDA Services to ProvincesRehabilitation and ▪▪Reintegration

Q1-4 Coordinate, Monitor and Report on CF Priority Projects.

Project Steering Committee consisting of Executive Managers was established in July.

Meetings of priority projects coordinated.

The COMSYS and SAP FI systems have been developed, however the date of implementation was extended to address findingsofriskassessment.

Capacity constraints in thePMOoffice.

Credibility of data to be migrated.

Capacitating the PMO office.

Data cleansing and integration project.

42

KRA 2: Strengthening the Institutional Capacity of the Compensation Fund

3. Directorate: Project Management

Key Outputs/Outcomes

Measurable Performance

Indicators

Actual Progress / Results Achieved

Constraints/Challenges

Corrective Action

TimeQ

Indicators

3.1 Coordinate all projects currently running under the compensation Fund:Integrated ▪▪Revenue Generation and Claims Management SystemOrganisational ▪▪RedesignDecentralisation of ▪▪COIDA Services to ProvincesRehabilitation and ▪▪Reintegration

Q1-4 Coordinate, Monitor and Report on CF Priority Projects.

OD Project in progress, significantachievements have been realised (i.e. service delivery model developed, macro organisational structure with the accompanying roleprofilesdeveloped, change management strategy developed and implemented).

Certain COIDA services has been decentralised to 4 Provinces (Limpopo, KZN, FS and EC).

Availability of key stakeholders.

Consultation with key stakeholders.

43

Chapter Four: Human Resource Management

4.1. Human Resource Information

Senior Management Appointments

In its endeavour to address the capacity challenges at senior management level, the Fund has appointed six (6) Executive Managers, after the interim structure was approved by the Minister of Labour.

Table 13: Staff Establishment

Number of

posts

Number of

posts filledVacancy Vacancy Rate %

Number of

posts filled

additional

to the

establishment

709 642 67 9.4 317

TheCompensationFundhasoverthepastyearreduceditsoverallvacancyratefrom17%in2009to9.4%in2010,notwithstandingthedelaysexperiencedintheverificationprocessofappointees.Theverificationprocesscan take up to two months after the interviews.

Most vacancies exist at the entry level as they are created by promotion of personnel to senior posts from timetotime.Therecruitmentandselectionprocesstofillsuchpoststakelessthantwomonths,howevertheverificationprocessisthemajorconstraintasexplainedabove.Thetableshereunderindicatevacanciesatseniormanagement level and lower levels, respectively.

Table 14: Employment and Vacancies by Salary Band

Salary BandNumber of

posts

Number of

posts filled

Number of

posts vacantVacancy Rate %

Senior

management

(Levels 13-16)

13 12 1 7.69

Highly skilled

supervision

(Levels 9-12)

52 37 15 28.8

Highly skilled

production

(Levels6-8)

212 184 28 13.2

Skilled

(Levels 3-5)432 409 23 5.3

Total 709 642 67 9.45

44

Table 15: Staff Turnover Rate

Salary Band

Number of

employees per

band as from

1 April 2010

Appointments

and transfers

into the

department

Terminations

and transfers

out of the

department

Turnover Rate

%

Senior

Management

Service

(Levels 13 above)

12 5 1 8.3%

Highly skilled

supervision

(Levels 9-12)

37 15 4 10.*%

Highly skilled

production

(Levels6-8)

184 9 6 3.3%

Skilled

(Levels 3-5)409 64 19 4.6%

Total 642 93 30 4.7%

Table 16: Reasons for Termination/Transfers

Termination Type Number % of Total

Death 6 0.9

Resignation 11 1.7

Resignation to contract 0 0

Dismissal–misconduct 3 0.4

Retirement 2 0.3

Transfers to other Public Service Departments 2 0.3

Severance Package 5 0.7

Total number of employees who left as a

% of the total staff compliment29 4.7

45

Table 17: Appointments and Promotions

Salary Band Appointments Promotions Contract

Appointments

Senior management (Levels13-16) 2 3 1

Highly skilled supervision (Levels 9-12) 3 17 4

Highly skilled production

(Levels6-8)10 25 10

Skilled

(Levels 3-5)61 0 302

Total 76 45 317

ThetablebelowrepresentstheCompensationFundEEprofileatalllevels.Itisevidentfromtheinformationinthe table above that the designated groups are well represented at all levels. The Fund has not done well in the recruitmentofpersonswithdisabilities,whichisfarbelowthe2%settarget.

Table 18: Employment Equity

Occupational BandMale Female

A C I W A C I W Total

Top Management 1 1

Senior Management SR 13-14 2 1 1 - 6 - - - 10

Professionallyqualifiedandexperienced

specialists and mid-management

SR 9-12

17 2 16 1 1 37

Skilledtechnicalandacademicallyqualified

workers, junior management, supervisors,

foremanandsuperintendentsSR5-8

177 9 2 4 287 35 2 65 580

Semi-skilled and discretionary decision

making

SR 1-4

11 2 13

Total 208 10 3 6 311 35 3 66 642

46

Table 19: Leave Utilisation (1 January 2009 to 31 March 2010)

Salary BandTotal

days

No of

Employees

using sick

leave

% of total

employees

using sick

leave

Average

days per

employee

Skilled

(Levels 3-5)2689 363 51% 7.4

Highly skilled production

(Levels6-8)803 133 18.7% 6

Highly skilled supervision

(Levels 9-12)96 20 2.8% 4.8

Senior management (Levels 13-16) 52 6 0.8% 8.6

Total 3640 522 73.62% 6.9

Table 20: Utilisation of Incapacity Leave: Pillar

Salary Band

Total

days

taken

% days

with

medical

certificate

Number of

employees

using

disability

leave

% of total

employees

using

disability

leave

Average

days per

employee

Skilled

(Levels 3-5)1459 0 44 6.8 33.1

Highly skilled production

(Levels6-8)806 0 26 4.0 31

Highly skilled supervision

(Levels 9-12)12 0 1 0.1 12

Senior management

(Levels 13-16)16 0 1 0.1 16

Total 2293 0 72 11.2 31.8

47

Table 21: Annual Leave

Salary BandsTotal days

taken

No of

Employees

using

annual

leave

% of total

employees

using annual

leave

Average per

employee

Skilled (Levels 3-5) 7034 421 65.5 16.7

Highly skilled production

(Levels6-8) 3150 171 26.6 18.4

Highly skilled supervision

(Levels 9-12)552 31 4.8 17.8

Senior management

(Levels 13-16)121 9 1.4 13.44

Total 10857 632 98.4 17.1

4.2. Employment Relations

Collective agreements are handled on a national basis by the Department of Labour.

Table 22: Disciplinary Hearings

Outcomes of Disciplinary Hearings Number % of Total

Verbal warning 0 0

Written warning 0 0

Final written warning 3 0.4

Suspended with pay 9 1.4

Demotion 1 0.1

Dismissal 3 0.4

Total 16 2.4

Table 23: Grievances Lodged

Grievances Number

Lodged 7

Resolved 6

In progress 1

48

4.3. Human Resource Development

The Human Resource Development Strategy of the Department was approved to ensure that it complies with theSkillsDevelopmentAct,97of1998andSkillsDevelopmentLeviesAct,9of1999.ThemainpurposeoftheStrategy is to develop our human resource capacity to a level that will enable the Fund to perform and carry out its mandate effectively and to empower the Fund’s staff with skills and competencies that will effectively improve service delivery to our clients.

Table 24: Training courses conducted during the year under review to address functional training required by staff

InterventionTotal No.

Gender Race

M F AM AF CM CF WM WF IM IF

Client care 15 4 11 2 7 2 1 3

Compcare 47 19 28 19 24 3 1

Competency Based Recruitment and Interview skills

25 8 17 5 14 1 2 2 1

Comsys 34 15 19 15 15 1 2 1

Fms CF Ar 7 2 5 2 3 1 1

General Ledger 7 5 2 5 2

EHWP 7 1 6 1 5 1

Fraud Fighting Seminar

1 1 1

HRD and PMS Policies

62 23 39 19 37 1 1 2 1 1

Internal Control & Risk Management

1 1

International Financial Reporting Standards

5 2 3 2 3

Labour Law Conference

5 5 5

Legal Writing 2 1 1 1 1

Microsoft Publisher 2 2 2

49

InterventionTotal No.

Gender Race

M F AM AF CM CF WM WF IM IF

NIA Management Course

1 1 1

Orientation Program 80 15 65 13 64 1 1 1

Pre Employment Training

2 0 2 1 1

RMA Training 8 4 4 4 2 1 0 1

Risk Corporate Governance Course

1 1 1

SAP Accounts Payable 12 4 8 4 5 3

SAP Accounts Receivable

21 10 11 7 7 1 2 2 2

SAP Asset Accounts 6 4 2 3 2 1

SAP Budgeting 2 2 2

SAP Navigation 126 53 73 47 52 2 4 4 17

SAP Purchase Requisition

39 12 27 11 23 1 4

SAP SCM 25 10 15 10 8 7

Secretarial Training 4 4 4

Smart Sourcing Conference SCM

6 2 4 2 1 3

Total staff Trained

553

M - MaleF - FemaleAM - African MaleCF - Coloured FemaleWM - White MaleM - Indian MaleIF - Indian Female

50

The following Bursaries were approved and granted by the National Bursary Committee of the Department of Labour:

Table 25: Bursaries

Field of StudyTotal

GrantedGender

Male Female

LLB 3 3

B Tech:Public Management 2 2

B Tech:Quality Management 1 1

B Admin 1 1

B Commerce 3 3

Advance Diploma:Management Accounting 1 1

Total 11 8 3

The following study at state expense were approved and granted by the Compensation Fund Training Committee:

Table 26: Studies at State Expense

Field of StudyTotal

GrantedGender

Male Female

ND:Public Management 2 1 1

ND:Safety Management 2 2

ND:Administration 1 1

ND:Information Technology 1 1

ND:OfficeManagement 2 1 1

ND:Security Risk 1 1

ND:Risk Management 1 1

ND:Business Administration 1 1

ND:HRM 1 1

ND:Public Relations 1 1

Total 13 8 5

51

The following short courses were approved and granted by the Compensation Fund Training Committee:

Table 27: Short Courses

Field of StudyTotal

GrantedGender

Male Female

NationalHigherCertificateAccounting 1 1

Labour Relations Management 3 1 2

Financial Accounting 2 2

CertificateinBusinessCommunication 2 2

Programme in HRM 4 2 2

Programme in Supply Chain 5 1 4

CertificateinOfficeTechnology 1 1

CertificateinBusinessManagement 2 2

Total 20 10 10

52

Chapter Five: Information & Communication Technology

5.1 Introduction

The Compensation Fund views technology as a key enabler to support the strategic objectives of the organisation. The ICT environment is therefore an integral component towards automating and enabling business functionality. Inthisregardinitiativestocontinuewithsystemsenhancements,newsystemsidentificationanddevelopmentare continuing at the Fund.

5.2 ICT Function

The core functions of the ICT component are:

Automation of CF business processes▪▪Manage the telecommunications and client services environment▪▪Manage and improve ICT services to the organisation▪▪Manage outsourced services▪▪

5.3 Public Private Partnership

The Compensation Fund’s information technology requirements are provided through a ten year Public Private Partnership (PPP) for IT related services that the Department of Labour has with Siemens IT Solutions and Services.

5.4 Workplans and Service Level Agreements

ThedevelopmentoftheITworkplansforthe2009/2010financialyearensuredthatallinitiativeswereproperlymanaged and supported the strategic objectives of the Fund. Service Level Agreements were implemented and managed to ensure minimum service levels, performance and availability of systems\resources, and the inclusion of penalties for non-performance.

5.5 System Enhancements and Additional Functionality

Requirements for system enhancements were consolidated and prioritised and change requests for additional functionalityenhancementsweredevelopedandimplemented.Theseincludedclaimsstatusfinalizationfieldsandcapturing by magisterial districts.

Systems accessibility at provincial level was provided in support of the Fund’s strategy to decentralise claims.

53

5.6 Systems Development and Upgrades

The development of the SAP Financial Management System commenced as well as a proof of concept of a claims management system was conducted.

The Fund’s scanning environment was upgraded to accommodate larger volumes and additional hardware is being procured to manage this.

5.7 ICT Governance and Risk Management

Strategic and operational risk assessments were conducted and documented and subsequent follow-ups made to review improvements. These were reported to the CF’s Audit Committee. Point in Time risk assessments were also conducted on the systems development and new systems, to ensure governance, controls, risk management etc. Operational and project risk registers were maintained and risks managed or mitigated.

The Change Control Board functioned effectively during the year, and managed the change control processes. Policy and standards adherence and compliance were also monitored and transgressions addressed.

5.8 ICT Orientation and Systems Training

ICT orientation was conducted to new employees on policies, security, risks, governance, systems usage etc. to create awareness on these. Various training was conducted to users e.g. navigation and modular training on SAP and refresher training is planned prior to go-live.

5.9 Resources

The appointment of a Programme Manager assisted with the co-ordination and management of the ICT projects which included oversight of project documentation, governance and risks.

5.10 Call Centre

5.10.1 Management

New manager was appointed on 1 September 2009 with the mandate to provide strategic direction for customer service delivery model that will ensure improvement and achievement of service level targets. To also reduce the number of dropped calls, upgrade the call centre and walk in technology and training & development of the staff.

54

5.10.2 Training

All agents have been up skilled and multi-skilled to respond to all types of calls and the call waiting time has been reduced by 15 minutes during peak hours, this is due to the call routingconfigurationsdone,agentcallhandlingimprovements and performance monitoring.

A Training plan is in place to ensure that employees are trained continuously in order to improve their knowledge of COIDA.

5.10.3 Technology

A Call Centre tender was advertised for the upgrade of the infrastructure and implementation of multimedia solution. The evaluation process is in progress and envisages appointing the supplier by end of August 2010. The supplier will provide new automatic call distribution, call recording capability, call logging system, walk-in centre managementtool,andheadsets,allofthesewillclosetheidentifiedgapstoimproveservicedelivery.

5.10.4 Future Plans

Increase human resources to meet customer call volumes▪▪Continuousimprovementofoperationalefficienciesbyestablishingmultimediacontactcentresupport▪▪Empowerment of Call Centre Agent roles and responsibilities by March 2011▪▪Improve query handling process▪▪Implement Service delivery channels/options by customer segmentation ▪▪Improved Training and Development (customer service skills, refresher, IDP achievement) Employee Wellbeing ▪▪(enhancement of reward and recognition, culture survey outcomes etc)

Establishment of Query Resolution Portal (search engine)▪▪Implementation of E-learning tool▪▪Improvement of Performance Management & Performance appraisals process▪▪Deployment of CRM tool and integrated business systems▪▪

Figure 3

55

Figure 4

Figure 5

56

Chapter Six: Finance

6.1 Introduction

Theyearended31March2010hasbeenaverychallengingone.Significantprogresswasmadeinimprovingproductivityandefficiencythroughoutthebusiness.Thisisevidencedbytheremedialactionthatwastakenbythe Fund on the audit outcomes of prior years in the following areas:

Bank and Cash▪▪Revenue and Accounts receivables▪▪Claims▪▪Accounts payable▪▪Fixed Assets▪▪IFRS 7 disclosure▪▪

6.2 Financial Performance

Revenue

TheFundgeneratedrevenueofR4.8billion(R4.5billion:2009),mostofwhichisfromassessmentsofregisteredemployersandinterestandpenaltiesfromdefaultingemployers.Therevenueincreasedby6.67%.Theotherincome consists of interest from investments.

Investment Income

TheFundhasreceivedinvestmentincomeofR1.9million(R2.1million:2009)whichhasshownadecreaseof7%due to the unfavourable market in the 2009.

Expenses

Claims incurred for the year amounted to R2.6 billion (R2.9 billion: 2009), which amounts to a decrease of 13%.

Irregular Expenditure

After completion of the audit for the year ended 31 March 2010, the Fund discovered an irregular expenditure totheamountofR6.8million(R3.6million:2009).TheFundisintheprocessofregularisingtheexpenditure.

Financial Position

Assets

Totalassetsgrewby15%fromthepreviousyear. Investmentformed97%oftotalassetsfortheyear.Othermajorassetsareincomeassessmentdebtors,cashanddepositswithfinancialinstitutions.

Liabilities

Current liabilities include provisions for outstanding claims, leave and bonus; as well as trade and otherpayables.