Follow-up Presentation to the
S. S. MkhontoCompensation Commissioner
25 May 2010
Clearing of suspense accounts
The suspense account is reconciled every month to identify the items that need to be cleared.
R87 million was in the suspense account. This amount (R87 million) has been cleared by March 2010.
The reasons for this were :
1) due to beneficiary payments made in March 2008 but only reflected in the bank statement of April 2008. The proper accounting treatment of this transaction at year end should have been classified as outstanding payments instead of suspense account.
2) Deposits into the Fund’s bank account, with no reference numbers from employers. The bank has since assisted the Fund to trace and allocate these unknown deposits to the
relevant employers.
2
Total CF Staff Establishment
FILLING OF VACANCIES WITHIN THE FUND
3
Total No Approved posts
Total Filled Total No. Vacancies
Vacancy rate as at 31/3/2009
707 584 123 17.3%
Total No Approved posts
Total Filled Total No. Vacancies
Vacancy rate as at 31/3/2010
709
709
645
653
64
56
9.0%
7.8%(24/5/10)
Status on current 64 Vacancies
• 9 New appointments approved wef 01/04/2010.
• 24 Interviews held awaiting NIA results.
• 28 Posts already advertised, interviews scheduled for May.
• 3 Vacancies still to be advertised.
FILLING OF VACANCIES WITHIN THE FUND
4
Previous Status as at 31 March 2010
Current Status as at 24 May 2010
9 New Appointments approved wef 1/4/10
8 New Appoint approved wef 1/5/10
24 Interviews held awaiting NIA results 16 Interviews awaiting SAQA And NIA results
28 Posts already advertised, interviews scheduled for May
2 posts interviews – 20/5/10
5 posts interviews-31/5/10
4 posts interviews- 2/6/10
7 posts interviews- 3/6/10
8 posts interviews-4/6/10
2 posts to be readvertised
3 Vacancies still to be advertised 3 Vacancies confirmed to be advertised by HQ on 30/5/10
Month
2009 April 92 6 3 3 1 91
2009 May. 91 0 1 92
2009 Jun 92 0 1 0 1 2 94
2009 Jul. 94 2 4 1 1 1 97
2009 Aug. 97 9 5 2 2 1 98
2009 Sept. 98 8 2 1 3 1 91
2009 Oct. 91 12 4 1 1 85
2009 Nov 85 5 1 1 1 86
2009 Dec. 86 8 2 4 92
2010 Jan 92 20 1 1 1 2 3 74
2010 Feb. 74 0 1 75
2010 Mar. 75 14 5 1 1 1 2 67
TOTAL 76 32 11 3 6
Month Vacancies New Appt.
Promote
Resign Dismiss Death Trans. Out
Trans. In
VS Retirement Total vac. Month end
HRM Vacancy statistics
Directorate Component Section SR Rank VacancyInterview
Date COMMENTSDate Sent to
SAQA Date Sent to NIA
CF 243000 Risk Management 12 Manager 1 11-Mar-10 Pending SAQA 5-Mar-10NIA Received 30 March 2010
Compensation 242422 C3 & C4 7 P ractitioner 1 29-Mar-10Pending NIA and SAQA result 30-Mar-10 8-Mar-10
Compensation 242421 C1 & C2 7 P ractitioner 1 29-Mar-10Pending NIA and SAQA result 8-Mar-10 8-Mar-10
CF 243000 Risk Management 7 P ractitioner 1 3-Mar-10 Pending SAQA
Support Service 241110 Auxillary Services 3 Operator 1 25-Mar-10pending NIA and SAQA result
Results received filled 1/5/10
Results received filled 1/5/10
Compensation 242310 Exempted Employers 5 Clerk 4 26-Mar-10pending NIA and SAQA result 1-Apr-10 19-Mar-10
Compensation 242413 Claims Index 5 Clerk 2 29 March 2010pending NIA and SAQA result 30-Mar-10 19-Mar-10
Compensation 242414 Claims Enquiries 5 Clerk 1 30 March 2010pending NIA and SAQA result 1-Apr-10 18-Mar-10
Income 241205 Revenue 2 5 Clerk 1 13 April 2010pending NIA and SAQA result 6-Apr-10 6-Apr-10
Income 241206 Revenue 1 5 Clerk 1 13 April 2010pending NIA and SAQA result 6-Apr-10 6-Apr-10
Income 241207 Enquiries 5 Clerk 2 13 April 2010pending NIA and SAQA result 6-Apr-10 6-Apr-10
Finance 241212 Bookeeping 5 Clerk 1 13 April 2010pending NIA and SAQA result 6-Apr-10 6-Apr-10
Medical Medical 5 Clerk 5 9-Apr-10pending NIA and SAQA result 29-Mar-10 24-Mar-10
Compensation 242323Unreported Accidents 5 Clerk 1 26-Mar-10
pending NIA and SAQA result 29-Mar-10 23-Mar-10
Compensation 242425 C6 7 P ractitioner 1 28-Apr-10
pending NIA and SAQA result 29-Apr-10 NIA received
CLAIM STATISTICS AT 31 MARCH 2010
8
FINANCIAL YEAR
CLAIMS REGISTERED
CLAIMS ACCEPTED
CLAIMS REPUDIATED
CLAIMS PAID
2007/8 213 241 180 996 1545 159 576
2008/9 209 830 180 756 1439 155 524
2009/10 203 711 139 302 620 107 293
Claims information The table indicates the total number of claims registered
during the past financial years, 2007, 2008 and 2009
It also indicates how many claims have been accepted, repudiated to date and how many have awards paid to date-Some claims from previous years have been re-opened and additional benefits paid during this financial year.
The difference between registered claims and accepted + repudiated are claims which have not been accepted due to outstanding information
Most not accepted claims are where the employee was off duty for 3 days and less, no first medical reports submitted or employee received first aid treatment and did not see a medical doctor. No compensation benefits are payable for such claims
Claims information cont…
Claims for 2007 financial year still not accepted by 31 March 2010 were 24 565
Claims for 2008 financial year still not accepted by 31 March were 31 490
Claims for 2009 financial year still not accepted by 31 March 2010 were 71 070
Compensation benefits processed in the 2009 financial year
All compensation benefits paid-TTD, PD plus monthly pensions.
Within these claims, are those that had not furnished required documents in the previous years and have only submitted during this financial year after our review process and follow up.
The slides indicate that there has been an increase on payments as compared to the previous financial years. This is attributed to the new policy on minimum earnings for TTD and the continuous review of previous claims.
Payment No. of payments 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 dependancy 15 164 230.09
PD lump sum payment (30%) 101 7 050 193.27
PD pension payment (<30%) 4329 85 458 303.70
PD pension (>30%) 86818 191 372 912.65
Pension 198059 343 574 258.68
TTD 43475 130 540 529.61
Widow & child pension 240 234 458.93
TOTAL 340159 771 801 533.58
Breakdown of compensation benefits processed payments
A claim is registered with an employers report of accident/disease
The treating doctor submits the first medical report as evidence of personal injury as required by the act.
The fund determines liability for the claim on the basis of the employer’s report and the doctor’s medical report
Where liability is accepted, the employer pays salary for the off duty days-maximum of 3 months where after the fund takes over- the fund reimburse the employer for the three months payments
While the employee is still off sick, the employer/employee submits progress medical reports indicating prognosis-enables continuous payment of salary by the fund.
Once the condition has stabilized, the treating doctor submits a final medical report for the fund to assesses permanent disablement.
The act requires the assessment of PD to be done only when the condition is stable. Claims with serious conditions can take up to two years to stabilize hence delayed settlement of such claims.
COIDA PROCESS
Unaudited – March 2010
(R000)
March 2009(R000)
Contributions revenue 4 321 898 4 513 720
Investment income 1 687 196 2 073 004
Other income - 21 228
Compensation claims 647 122 150 133
Medical claims 1 441 337 1 540 340
Increase in the provision for outstanding claims
- 1 239 000
TOTAL BENEFITS PAID 2 088 459 2 929 473
Admin 783 045 433 565
Year end provisions - 2 073 796
Surplus \ Deficit 3 137 590 1 171 118
The actuarial valuations for the year 2009/10 is in the process of being finalised by the actuaries.
The valuation will only be available after the finalisation of the audit ie. August 2010 as actuaries only utilize audited financial statements.
As at the 31 March 2010 the following figures were available for Compensation benefits paid on the financial system
Compensation benefits paid
Compensation claims** 647,122
Medical claims 1,441,337
** Compensation Claims
Paid to employees 598,944
Paid to employers 48,179
Variance between processed and actual paid The difference of(R124 m) between the total actual
paid benefits by the Finance Directorate (647m) and the total processed by the Claims Directorate (R771m) is caused by the delays in submission of banking details by beneficiaries.
This problem is being addressed through a special campaign-see slide 18
• The current unclaimed monies is R28.4 million
• A notice was published in the Government Gazette volume 529 No 32346 of 3 July 2009, to request all beneficiaries of unclaimed monies to claim their dues.
• During the month of March the Fund ran a month –long radio and newspaper advertisement to request the beneficiaries of the unclaimed monies to come forward and provide the Fund their banking details
• Since the advert went out 1 500 beneficiaries came forward and provided the Fund with the banking details and all have since been paid .
UNCLAIMED MONIES
18
19
DEPARTMENTS CONTRACTUAL OBLIGATIONS TO SIEMENS (High Level)
• to provide optimised and documented business processes for automation
• to ensure user and management participation in systems automation
• to transfer to Siemens, DoL ICT employees prior to contract commencement
• to ensure timely payment of the unitary fee
• to inform Siemens 12 months prior to expiry whether the contract will be renewed
• to compensate for delays or defaults caused by the Department
• transfer of legacy assets to Siemens
• to ensure a change management governance process are in place
• to ensure a secure working environment
• to manage third party service providers eg. SITA
OPERATIONAL CHALLENGES FROM SYSTEMS
• Employment Services systemo slow responseo problems with saving of documentso unstable
RESOLUTION : this system has been re-developed and optimised with no major issues reported
• Compensation Fund systemso disparate and legacy systemso scanning challenges
RESOLUTION :Development of an integrated claims management system to commence. Scanning environment has been upgraded.
• Other General challengeso bandwidth at labour centres (contributes to slow response)
109 centres bandwidth have been upgraded in the last 9 months by SITA
RAND MUTUAL SYSTEM
• The Fund conducted a Proof of Concept and then planned to pilot the system
• A budget of R2 million was approved for this process
• Total costs to Rand Mutual are R524 427.10
• These costs relate to user training, systems setup, resources etc.
COMPENSATION FUND CLAIMS SYSTEM DECISION• An audit was conducted on the Rand Mutual project which
resulted in a negative finding
• The decision was taken to implement the Siemens solution due to the following :
- will be developed based on CF’s business requirements and processes and will be customized for CF
- will be a fully integrated system, including the financial module, with additional components eg. Customer Relationship Module
- will be aligned to the DoL systems architecture and function across the organisation seamlessly including integration with components of other DoL systems eg. Integrated Client Database
- development of the solution and infrastructure is included within the PPP
- support and maintenance is from one service provider
High-Level Project Schedule – CF claims system
Activity June July Aug Sep Oct. Nov Dec Jan2011
Feb2011
March2011
Requirements Workshop
Solution Integration Design
Blueprint adaptation by all parties
Blueprint Sign-Off
Realization
Final Preparation
Training of 100 CF users
GO LIVE
Roll-Out and Cut-over
Data interrogation, cleansing & preparation
Data Migration
Project close out
15/06/10
30/07/10
30/11/10
31/03/11
Year ended Unitary fee Additional services
Total
31-Mar-03 40,833,333 - 40,833,333
31-Mar-04 125,463,046 36,806,561 162,269,607
31-Mar-05 136,962,744 22,646,145 159,608,889
31-Mar-06 160,210,820 14,130,604 174,341,424
31-Mar-07 158,421,099 21,988,865 180,409,964
31-Mar-08 194,901,365 11,386,879 206,288,244
31-Mar-09 202,499,896 9,694,687 212,194,583
31-Mar-10 219,218,864 12,248,944 231,467,808
TOTALS 1 238 511 167 128 902 685 1 367 413 852
PPP PAYMENTS PER ANNUM
26