REPORTING STRUCTURES FOR SASSA

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REPORTING STRUCTURES FOR SASSA

• PFMA / SASSA ACT / FLOW OF FUNDS

Presenter Brenton Van Vrede Director,
National Treasury 20 June 2010
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OUTLINE OF PRESENTATION

• SASSA ACT
• PFMA
• Oversight mechanisms
• Flow of funds, and issues of dual accountability

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SASSA ACT

• S 3 Objectives
• Ensure effective and efficient management,
  administration and payment of social assistance.
• In future, possibly also other social security
  benefits.
• Render services relating to such payment.
• S 4 Functions
• Administer Social Assistance (ito Social
  Assistance Act)
• Collect, collate and maintain information
  required for payment of grants.
• Establish a fraud mechanism.
• Renders services in accordance with an agreement
  with a relevant authority (for other forms of
  social security)

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SASSA ACT-CONTINUED

• S 11 Reporting
• each financial year submit an annual report which
  includes
• activities
• statement of its income and estimated expenditure
  
• Additional reports such as the Minister may
  require.

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PFMA

• S52
• must submit to the AO for a department designated
  by the executive authority responsible for that
  public entity .. and to the relevant treasury
• A projection of revenue, expenditure and
  borrowings for that financial year in the
  prescribed format and
• A corporate plan in the prescribed format
  covering the affairs of that public entity or
  business enterprise for the following three years
  and if it has subsidiaries, also the affairs of
  the subsidiaries
• S53
• A budget for approval by executive authority.
• S54
• Information and reports required by relevant
  Treasury or Auditor General

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PFMA- CONTINUED

• S55
• Submit financial statement within two months
  after the end of the financial year
• To the auditors of the public entity and
• the relevant treasury and
• Annual report within five months
• To the executive authority (with financial
  statements and Auditors report)
• table in Parliament through the accounting
  officer of a department designated by the
  executive authority.

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ANNUAL REPORT PFMA S55 (2)

• Fairly present
• The state of affairs of the public entity
• Its business
• Its financial results
• Its performance against predetermined objectives
• Its financial position

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OVERSIGHT OVER SASSA

• SASSA reports directly to the Minister of Social
  Development
• Could be problematic for one person to oversee
  (due to nature and size of the entity).
• DSD public entity oversight unit.
• SASSA currently experiencing financial
  difficulties R1.2bn cumulative unfunded deficit
  (cumulative over expenditure).
• An Oversight Inter Ministerial Task team set up
  (DSD NT)
• Implementation of austerity measures
• Social grant payment contracts (R1bn a year more
  than what it should be)
• Personnel (Agency possibly overstaffed)
• Board ???
• NT, increased reporting from quarterly to monthly
  in new format to show accruals

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FLOW OF FUNDS DUAL ACCOUNTABILITY

• Two transfers
• R5.6 billion for administration (i.e.
  operational costs of the entity)
• R90 billion for Social Grants
• Administration transfers voted as transfers to
  Departmental Agencies
• Funds flow to SASSA and spent by SASSA. Recorded
  as Revenue and expenditure audited against
  revenue received.
• Social Grants transfers voted as transfers to
  Households
• These are transferred to SASSA,
• SASSA pays beneficiaries directly into their bank
  accounts, or
• transfers the funds to payment contractors
  (various distribution channels).
• Not recorded as revenue on SASSAs books.
• Not audited as SASSA expenditure.
• Audited as DSD expenditure.
• Dilemma DSD audited on SASSAs performance

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FLOW OF FUNDS- CONTINUED

• Why Transfers to Household
• Ensure that the R90 billion is reflected as a
  transfer to households (its intent) in the
  consolidated National Accounts
• Social Grants in not revenue for SASSA, thus
  cannot be voted as a transfer to departmental
  agencies.
• Holding the CEO of SASSA accountable for the
  functions of the entity should not depend on
  the flow of funds, but on a performance
  agreement linked to SLA
• Possible solution
• Service Level Agreement linked to the CEOs
  contract
• Trust Account?- amend Social Assistance Act to
  allow for the establishment of a Trust Account
  under SASSAs administration.
• Government Component (brings the entity closer to
  the department but may further compound the
  issue)
• Social Security Department