Submission of the Compensation Fund Annual · PDF fileI have the honour of submitting the...
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Submission of the Compensation Fund Annual Report Minister of Labour I have the honour of submitting the Annual Report of the Compensation Fund for the period 1 April 2011 to 31 March 2012. ______________________ N.T. P. Nhleko Director-General: Department of Labour Minister M. Oliphant,MP Minister of Labour N.T.P. Nhleko Director-General Department of Labour
Transcript of Submission of the Compensation Fund Annual · PDF fileI have the honour of submitting the...
Submission of the Compensation Fund Annual Report
Minister of Labour
I have the honour of submitting the Annual Report of the Compensation Fund for the period 1 April 2011 to 31 March 2012.
______________________N.T. P. NhlekoDirector-General: Department of Labour
Minister M. Oliphant,MPMinister of Labour
N.T.P. NhlekoDirector-GeneralDepartment of Labour
AGAPPBASBCEABUMSCCMACCCFCRMCSCFOCOOCIOCOIDADDDDGDDGDEXCOMDoLDPSADWCPECEEAESESSAEPWPEXCOFEMAFSGCISHOHPCSAHRMICDICMICTIESILOINDSKZNLMIS&PLPLP & IRLRA
List of Acronyms
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Auditor-GeneralAnnual Performance PlanBasic Accounting SystemBasic Conditions of Employment ActBusiness Unit Managers (Provincial Deputy Directors)Commission for Conciliation, Mediation and ArbitrationCompensation CommissionerCompensation FundCustomer Relationship ManagementCorporate ServicesChief Financial OfficerChief Operations Officer Chief Information Officer Compensation for Occupational Injuries and DiseasesDirectorDeputy DirectorDirector GeneralDeputy Director GeneralDepartmental Executive Committee Department of LabourDepartment of Public Services and AdministrationDecent Work Country ProgrammeEastern CapeEmployment Equity ActEmployment ServicesEmployment Services for South AfricaExtended Public Works ProgrammeExecutive CommitteeFederal Employers Mutual AssuranceFree StateGovernment Communication and Information ServicesHead Office Health Professions Council of South AfricaHuman Resource Management Integrated Client DatabaseIntegrated Claims ManagementInformation and Communication TechnologyInspection and Enforcement ServicesInternational Labour Organisation Integrated National Disability StrategyKwaZulu-NatalLabour Market Information and StatisticsLimpopoLabour Policy and Industrial RelationsLabour Relations Act
KRAMBDCM&EMISSMOUMPUMTSFMTEFNCNEDLACNTOHSPDPDPPESPFMAPMOPPPPTSDPWDQMSRAFRMARMEROESAPSCMSDIPSEFSMSSOESPSTEFISWOTTCOIDTTDUIFWCWSP
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Key Result AreaMedical Billing Document ControlMonitoring and EvaluationMinimum Information Security SystemMemorandum of UnderstandingMpumalangaMedium Term Strategic FrameworkMedium Term Expenditure FrameworkNorthern CapeNational Economic Development and Labour CouncilNational TreasuryOccupational Health and SafetyPermanent DisablementPersonal Development Plan Public Employment ServicesPublic Finance Management ActProject Management OfficePublic Private PartnershipPost Traumatic Stress DisorderPeople with disabilitiesQuality Management SystemRoad Accident FundRand Mutual AssuranceResearch Monitoring and Evaluation Return of EarningsSystem Application ProgrammesSupply Chain ManagementService Delivery Improvement PlanSheltered Employment Factories Senior Management ServicesState Owned EnterprisesStrategic PlanShort Term Financial IndexStrengths,Weaknesses, Opportunities and ThreatsTechnical Committee on Occupational Injuries and DiseasesTotal Temporary DisablementUnemployment Insurance FundWestern CapeWork Place Skills Plan
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2.
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
2.10
2.11
2.12
2.13
3.
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
3.10
General InformationOrganisational Structure
CF Board members
Legislative mandate and other mandates
Commissioner’s Overview
GovernanceIntroduction
Compensation Board
Mandate of the Board
Board Composition
Board Induction
Delegation of Authority
Board Committees
Finance and Investment Committee
Assessments and Benefits Committee
Technical Committee for Occupational Injuries and Diseases
Strategic and Operational Committee
Audit Committee
Governance of Risk
Information on Predetermined ObjectivesOverall Performance
Budgeted Funds
Aim of budgeted funds
Summary of Programmes
Key strategic objectives achievements
Overview of the service delivery environment for 2011/12
Overview of the organisational environment for 2011/12
Key policy developments and legislative changes
CF Revenue, Expenditure, and other specific topics
Overall Programme Performance
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Table of Contents
4.
4.1
4.2
4.3
4.6
4.7
4.8
4.9
4.10
4.11
5.
5.1
5.2
5.3
5.4
5.5
5.6
5.7
5.8
5.9
5.10
5.11
5.12
5.13
6.
6.1
6.2
Annual Financial StatementsReport of the Audit Committee
Report of the Accounting Officer(s)
Report of the Auditor-General
Statement of Financial Position
Statement of Financial Performance
Statement of changes in Net Assets
Cash Flow Statement
Statement of Accounting Policies
Notes to the Annual Financial Statements
Human Resource ManagementService Delivery
Expenditure
Employment and Vacancies
Job Evaluation
Employment Changes
Employment Equity
Performance Rewards
Foreign Workers
Leave Utilisation
HIV and AIDS & Health Promotion Programme
Labour Relations
Skills Development
Injury on Duty
Information and CommunicationTechnology and Call CentreInformation and Communication Technology
Call Centre
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Vision, Mission and Values
Vision
To be an employer of choice and an internationally reputable provider of Compensation for Occupational Injuries and Diseases, rehabilitation and reintegration services.
Mission
To utilise\leverage automated solutions to provide efficient, quality, client-centric and accessible Compensation Fund services.
To ensure effective rehabilitation and re-integration services, through reputable (proven) programmes.To ensure financial viability through efficient collections and prudent investments.To promote job creation initiatives through social responsible investments.To develop and retain a competent and content workforce.
Values
We treat employees with care, dignity and respectWe respect and promote:
- Client centred services - Accountability - Integrity and ethical behaviour Learning and development
We live the Batho Pele PrinciplesWe live the principles of the Department's Service CharterWe inculcate these values through our performance management system
Chapter I. General Information
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MINISTER OF LABOUR
COMPENSATIONBOARD
BOARDSUB-COMMITTEES
AUDITCOMMITTEE
COMPENSATION COMMISSIONER
DIRECTOR-GENERALLABOUR
The following represents the reporting framework of the Compensation Fund:
Reporting Framework
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D: Internal AuditMs Tshidi Ikaneng
ChiefInformationOfficerMrVkash Sirkisson
ActingProgrammeManagerMr Simon Nkhabelane
D: CompensationMr Basimane Dingaan
D: Medical ServivesMs Kefilwe Tselane
D: Medical PaymentsMr A.K Pillay
D: Human ResourceManagementMrs Thembi Moleko
Acting Chief Director:HRMMrs Thembi Moleko
D: OrganisationalEffectivenessMr Simon Nkhabelane
Chief FinancialOfficerMs Thembeka Puzi
D. IncomeMs Ella Ntshabele
D: Financial ReportingMr Pitsi Moloto
D: Financial ControlMs Pumla Mjoli
D: Supply ChainManagement - Mr Leon Van der Westhuizen
DD: OrganisationalPerfomance andEvaluationMr MadodanaTuntulwana
DD: Risk ManagementMr TwanaMakhubela
DD:CommunicationsMs DikentshoSeabo
Snr Legal AdminOfficer:Mr Orphan Letsoko
Snr Legal AdminOfficer:Ms NontembekoMathe-Ndlazi
Snr Legal AdminOfficer:Mr AndileSolwandle
CompensationCommissionerMr Shadrack Mkhonto
Organisational Stucture
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Mr.W. Shisana (HPCSA)
Mr. M. Mngqibisa(NationalTreasury)
Mr.T. Lamati(Department of Labour OHS)
Mr. M. Majola(BUSA)
Mr. N.Weltman(BUSA)
Ms.TT. Pugh(FEMA)
Ms. B. Modise(NACTU)
CF Board Members
Mr. P. Magane(CEPPWAWU)
Ms. J. Bodibe(COSATU)
Dr. L. Dzingwa(Department of Health)
Mr. F. Xaba* (BUSA)
Mr. S. Motloung (FEDUSA)
Mr. S.Tsiane(NUMSA)
Mr. J. Singh(RMA)
Mr. G. McIntosh*(FEMA)
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* Alternate member
The mandate of the Compensation Fund is derived from Section 27 (1)(c) of the Constitution of the Republic of South Africa. In terms of this act, all South Africans have a right to social security.TheCompensation Fund is then mandated to provide social security to all injured and diseased employees.
The Compensation Fund is a public entity of the Department of Labour. The Fund administers the Compensation for Occupational Injuries and Diseases Act no. 130/1993 as amended by the COIDA 61/1997.The main objective of the Act is to provide compensation for disablement caused by occupational injuries or diseases sustained or contracted by employees, or for death resulting from such injuries or diseases, and provide for matters connected therewith.
The Fund generates its revenue from levies paid by employers, which consists mainly of annual assessments paid by registered employers on a basis of a percentage or fixed rate of the annual earnings of their employees. The COID Act, however, makes provision for a minimum assessment to ensure that the assessment is not less than the administration costs incurred.
Constitutional mandate
The operations of the Compensation Fund are also affected by the following legislation: Public Finance Management Act, of 1999 as amended Occupational Health and Safety Act, 1993 NEDLAC Act, 1994 Labour Relations Act, 1995, as amended Basic Conditions of Employment Act, 1997, as amended Employment Equity Act, 1998 Skills Development Act,1998 as amended Unemployment Insurance Act, 2001 as amended Unemployment Insurance Contributions Act, 2002
Legislative mandate
Legislative and other mandates
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Introduction
It is of great honour to present the Compensation Fund Annual Report for the financial year 2011/12 in terms of the Public Finance Management Act, 1999. The report highlights the progress made in achieving the strategic and operational goals of the Fund, as well as giving a view of the way forward in improving servicedelivery. The programmes and achievements reflected in this Annual Report illustrate the critical role playedby the Compensation Fund in strengthening social protection and providing social safety net to South Africans.
The milestones in this Annual Report also illustrate the role played by the Compensation Fund in shaping our identity as a social security institution, which is founded on the noble principles of equality to social safetyand human dignity for all.
Highlights of the year
In 2011/12 financial year, the Fund paid R205,150 compensation claims amounting to R549, 000, 702 and medical claims amounting to R1, 882,372, 383. In an effort to improve service delivery and addressthe capacity challenges experienced by the Fund, the revised Compensation Fund organisational structurewas approved by the Minister of Labour in consultation with the Minister of Public Service and Administration in August 2011. Preparations are being made to implement the structure with effect from1 October 2012.The decentralisation of COIDA services will be fully rolled out to two provinces in the following year and to the other provinces at a later stage.
A Change Management and Employee Engagement Strategy, as well as a Communication Plan that describes“how and when” various stakeholders within the Fund will be kept informed about the services of the Fund and priority projects implemented during the year. Change management activities conducted as partof the strategy included communication of change through internal initiatives such as, directorate meetings,messages through posters and e-mails, and Commissioner's staff meetings.
The Fund participated in the IDTT discussions for social security reforms and contributed positively towardsthe finalisation of the Government Consolidated Paper on Social Security Reforms, which was submitted to Cabinet in March 2012.The Fund has made considerable progress with regard to Strengthening Civil Society Fund, through funding and monitoring of civil society projects. As an effort to strengthen policy advocacy, the Compensation Fund through the DOL Strengthening Civil Society Fund has identified and funded six non–profit organisations through which the COIDA and Occupational Health and Safety Policy is advocatedby, amongst other things, developing curricula and training shop stewards in the various industries.
The social responsible investments created by the Fund will in future focus on creating more jobs and contribute towards alleviating unemployment. The Fund will need to ensure that social investments and work opportunities comply with the principles of equal and universal access.
Commissioner’s Overview
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In the year under review, the Fund was actively involved in implementing information technology initiatives,which were aimed at automating processes and improving services.The focus has been on the integrated claims management and financial systems for the Fund which went live in October 2011. A phase II projecthas been initiated and several additional enhancements are being pursued through to improve these systems.Part of these enhancements include, among others, changes relating to the ROE website and the electronicreporting of accidents.
The Fund embarked on a process of upgrading its call centre with the aim of improving access and its image.The IVR Customer Satisfaction Option and the Walk-in Centre Self-service Kiosk were implemented.
The presentation of this Annual Report coincides with ongoing efforts to stabilise and capacitate the Fund to discharge its social security responsibilities and to be an employer of choice.These efforts relate to, in particular, change management in terms of introducing a new performance culture and organisational ethics.At the end of the year under review the vacancy rate was 3.3 %.The Fund will continue to ensure that the filling of vacant positions is prioritised in order to maintain its vacancy rate.
During this financial year the Fund implemented the Communication Strategy, stakeholders were informedthrough print and electronic media about the services of the Fund and the direction which the Fund is taking.The Compensation Commissioner, alongside the Board, ensured that the CF's plans to improve servicedelivery through decentralisation were shared with the stakeholders. Part of the efforts made were to conduct radio interviews in different languages and discussing the promotion of CF's services.
Challenges for the year
The 2011/12 financial year presented many challenges that prevented the Fund from fulfilling its legislativemandate optimally. These challenges fall into two categories, internal challenges and those that are external or limited to the influence of the Fund. The external challenges, which had an impact on the Fund's ability to render services effectively, related to the submission of incomplete information and/or documentation byemployers and delays in the submission of banking details by beneficiaries.
With regards to the implementation of the new SAP system, there have been challenges in stabilising and enhancing the system and finalising the process of data migration.The stabilisation of the SAP system has negatively affected the turnaround time in the processing of compensation claims and payments thereof.
Fraudulent activities are still negatively affecting the assets of the Fund. Efforts are being made to improvesecurity, internal controls and risk management processes.
Financial viability
Alexander Forbes Financial Actuaries performed the actuarial valuation of the Fund based on the AuditedManagement Accounts of the Compensation Fund as at 31 March 2012.
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Summary of Actuarial Report
The Fund should hold an outstanding claims reserve of R4.9 billion as at 31 March 2012 (R5.2 billion: 31 March 2011).The liability accounting for what will be paid to pensioners for the current yearshould be R12.9 billion (R10.4 billion: 31 March 2011).
The Fund showed a surplus of R2.0 billion in the 2011/12 financial year (R3.6 billion: 2010/11).
The Fund has an accumulated surplus of R14.2 billion as at 31 March 2012 (R12.1 billion: 2010/11).
The Fund was therefore in a sound financial position at 31 March 2012.
Year ahead
The Fund will be focussing on fundamental policy changes that will change the way we conduct business.One of the initiatives will be to amend the Compensation for Occupational Injuries and Diseases Act, whichwill incorporate a chapter on rehabilitation and reintegration of injured workers.The amendment of COIDAwill create a policy environment for rehabilitation, re-integration, and return-to-work for injured and diseasedworkers. Underlying this policy will be the Early Return to Work that will ensure that the injured workerreceives a holistic treatment and regains their dignity. The draft amendment of COIDA including issues ofrehabilitation and reintegration will be tabled at NEDLAC for consultation with stakeholders.
In the new financial year the Fund will launch the electronic submission of Return Of Earnings on-line,which will enable employers to file their assessments on-line and thus improving revenue collection.
Through its social responsible investments, the Fund will contribute towards reducing youth unemployment,poverty, and inequality through targeted job creation projects and facilitation of access to employmentopportunities. The Fund will, in collaboration with Sheltered Employment Factories, facilitate access to employment opportunities through targeted job creation projects over a period of three years.The Fund will be implementing the new organisational structure and COIDA services will be rolled out in full to twoprovinces namely Gauteng and Western Cape. In the implementation of the organisational structure, theFund will be prioritising people with disabilities to support the right to dignity and economic independence.This effort will improve service delivery while keeping on a radar, job creation initiatives.
Based on the recommendations of the Customer Satisfaction Survey, the Fund will be implementing a Change Management Programme to deal with the human aspect of change taking place within the Fund.This will be prioritised together with the development and implementation of the Employee WellnessStrategy.
The management of Compensation Fund will be putting efforts to improve financial information and the development of an effective system of internal controls. The Fund will also be focussing on contract management to make sure that value for money is derived for all services provided.
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Appreciation
I would like to extend my gratitude to the honourable Minister of Labour Ms Oliphant for the unwaveringsupport she has given to the Fund and the Director-General Mr. Nkosinathi Nhleko for guidance and understanding.
I would like to thank the Compensation Board and the Executive Committee of the Fund for their unwavering support and commitment. I also want to thank all staff members of the Compensation Fund fortheir commitment and their valuable contribution, often in difficult times.
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 challenges it faced in the year under review. The Fund will strive to achieve more in the next financial year.
Your support will always be highly appreciated.
Shadrack MkhontoCompensation Commissioner
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2.1 Introduction
The principle of good corporate governance espoused in King III guides the operations of the Compensation Board.The Board believes that it complies with the King Code of Corporate GovernancePractice and Conduct.
The Compensation Board has continued to advise the Minister of Labour on strategic and operational challenges facing Fund, working together with the Compensation Fund Management in an endeavour to effectively and efficiently achieve the objective of the Fund.
2.2 Compensation Board
The Compensation Board is a statutory body of the Compensation Fund that advises the Minister of Labour on policy matters, annual benefit increases, appointment of assessors and amendments to the Compensation for Occupational Injuries and Diseases Act (COIDA). Representatives are from organised business, organised labour, government, mutual assurance companies related to the Fund and medical experts.All members represent the interests of the Fund on corporate governance and their respectiveconstituencies on matters of service delivery.
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:
I. Matters of policy arising out of or in connection with the application of COIDA.
II. The nature and extent of the benefits that shall be payable to employees or dependents of employees, including the adjustment of existing benefits.
III.The amendment of the COID Act.
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 the Compensation Fund Senior Managers bring in profound functional experience and an understanding of the business of the Fund.
Chapter 2. Governance
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Table 1: Compensation Fund Board Members
Name Organisation PrincipalMember
AlternativeMember
AppointmentDate
Mr. B. Singh
Ms.T.T. Pugh
Prof. M.S. Mokgokong
Dr. R.B. Crouch
Mr. N.Weltman
Mr. M. Majola
Dr. L. Ndelu
Dr. L.S. Dzingwa
Mr.T. Lamati
Mr. M. Mngqibisa
Mr. S.Tsiane
Mr. P. Magane
Ms. J. Bodibe
Mr. S. Motloung
Ms. B. Modise
Dr.T. Kaipa- Balfour
Mr. E. Lefhugu
Mr. G. McIntosh
Mr.W. Shisana
Mr. F. Xaba
Mr. S. Deva
RMA
FEMA
HPCSA
HPCSA
BUSA
BUSA
Dep. of Health
Dep. of Health
Dep. of Health OHS
National Treasury (GPAA)
COSATU
COSATU
COSATU
FEDUSA
NACTU
BUSA
RMA
FEMA
HPCSA Principal
BUSA
BUSA
18/18/08
18/18/08
Resigned
Resigned
18/18/08
18/18/08
Resigned
01/09/11
01/04/09
18/18/08
18/18/08
18/18/08
18/18/08
18/18/08
18/18/08
18/18/08
18/18/08
18/18/08
18/18/08
18/18/08
18/18/08
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
V
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2.5 Board Induction
The Compensation Board induction takes place when new members are appointed, in order to familiarise them with the Fund's strategy, operation, risk management procedures, governance frameworks and the
thmember's responsibilities.An induction workshop was last conducted on the 10 November 2010, and the following members attended the programme.
Table 2: Schedule of attendance of the Induction Workshop
Names & Surnames 10 Nov 2010
1. Dr. R. Crouch
2. Mr. S. Motloung
3. Ms. L. Ndelu
4. Mr. G. McIntosh
5. Mr. P. Magane
6. Mr. J. Singh
7. Mr. S. Mngqibisa
8. Ms.T. Pugh
9. Prof. M. Mokgokong
10. Mr. M. Majola
11. Mr. N.Weltman
12. Dr.T. Kaipa- Balfour
13.Mr. F. Xaba
14.Mr. S. Deva
15. Mr. S.Tsiane
16. Mr. L. Lamati
17. Ms. J. Bodibe
18. Ms. B. Modise
19. Mr.W. Shisana
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2.6 Delegation of Authority
According to the Compensation for Occupational Injuries and Diseases Act (COIDA), the Director-Generalmay designate any official in the Public Service to chair meetings of the Compensation Fund Board.
stThe Director-General appointed Mr. M. Mgqibisa as the Board Chairperson on the 1 September 2010.The Board is also reviewing certain section of COID Act for amendments, in order to improve governance.The Board Secretariat is currently co-ordinated from the Planning, Monitoring and Evaluation unit.
The following is the schedule of attendance of Board meetings by all Board members.
Table 3: Schedule of attendance of Board Meetings
= PresentAP = ApologyA = Absent* = Chairperson
Names & Surnames 25 / 05 / 2011 07 / 09 / 2011 28 / 09 / 2011 23 / 11 / 2011 15 / 02 / 2012
1. Mr. M. Mngqibisa*(Chairperson)
2. Mr. J. Singh
3. Ms T. Pugh
4. Ms. J. Bodibe
5. Ms. B. Modise
6. Mr. S.Tsiane
7. Dr. L. Ndelu
8. Mr. L. Dzingwa
AP AP
AP
AP
AP
AP
Resigned _ _ _
A A A
Mr Matshidze(ALT)
Mr Matshidze(ALT)
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Names & Surnames
9. Mr. N.Weltman
10. Dr.T. Kaipa-Balfour
11. Mr. G. McIntosh
12. Mr. P. Magane
13. Dr. Crouch
14. Mr.W. Shisana
15. Mr. F. Xaba
16. Mr.T. Lamati
25 / 05 / 2011 07 / 09 / 2011 28 / 09 / 2011 23 / 11 / 2011 15 / 02 / 2012
AP A
AP
AP
_ _ _
A A
2.7 Board Committees
Consistent with King III and best practices, the Board has established technical sub-committees to assist in advising the Board in order to efficiently and effectively achieve its objectives. Each sub-committee has a mandate outlining authority delegated to it by the Board. The mandate of each sub-committee sets out the purpose, composition, terms of reference and reporting responsibilities.
The Board has established the following sub-committees:
Finance and Investment Committee (FIC)Assessment and Benefits Committee (ABC)Technical Committee on Occupational Injuries and Diseases (TCOID)
Strategic and Operational Committee (STRATOP)
2.8 Finance Investment Committee (FIC)
Composition
The Committee will be represented as follows:
2.8.1 The Board must appoint members of the Committee, who shall be non-executive directors of the Board
17. Mr. S. Motloung
A
A AP
AP
APA
Resigned _
AP
A AAP
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2.8.2 The Committee shall comprise of at least Three (3) members representing the Board2.8.3 Representative(s) from Finance have standing invitation; other Departments/ Executive Managers may be invited as and when required2.8.4 Board Secretariat will oversee the proceedings of all meetings2.8.5 The Committee may invite any other personnel, party, experts with Financial/Investment experience to the meeting when deemed necessary2.8.6 The Board nominates alternative members to stand in the committee,2.8.7 Members of Committee must have knowledge and experience with regard to FAIS Act and other Finance/Investment related practices 2.8.8 Committee members are nominated to serve on the Committee for the period/term that is consistent or equal to Board members2.8.9 Members may serve more than one (1) term, provided it is confirmed by the Board
Mandate
The core mandates of the Committee emanate from: COIDA Regulations issued in terms of COIDA FAIS- Financial Advisory and Intermediary Services Act, 2002 (Act 37 of 2002) PFMA and its Regulations, and Other applicable legislation, directives Financial/Accounting Standards and best practices
Duties and responsibilities of the FIC
Subject to the powers and duties of the Board and the requirements of the Act, the FIC will perform the following duties:
Depositors Fund
Review and recommend to the Board, investment policy and strategy in respect of depositors fund Oversee the implementation of investment decisions Monitor performance of investments on a quarterly basis Report the activities of the FIC to the board on issues relating to investment of depositors fund
Finance
Review and recommend to the Board, Finance policies and strategy in respect of the FundThe FIC will report to the Board about the Annual Financial Statements (Financial position) of the Fund
(without taking away Audit Committee mandate)The FIC, in conjunction with business units/Directorates , reports to the Board about status of audit opinion
and other related mattersThe FIC will present to the Board, the monthly management and financial statements/information
15
Table 4: Schedule of attendance of Investment Committee
= PresentAP = ApologyA = Absent* = Chairperson
Names & Surnames 05 / 08 / 2011 24 / 10 / 2011 25 / 01 / 2012 12 / 12 / 2011 15 / 03 / 2012
1. Mr. S.Tsiane*
2. Mr. F. Xaba
3. Mr. M. Mngqibisa
4. Ms. J. Bodibe
AP
AP
A A A A
A
2.9 Assessments and Benefits Committee
Composition
The Committee will be composed of the following representatives:
2.9.1 All representatives (7 members) of various constituencies as represented on the Board.2.9.2 All Executive Managers/Directors representing all Departments within the Fund have standing/permanent invitation to attend committee meetings. Director may bring their supporting managers/representative as and when they considered necessary.2.9.3 The Committee may invite any other personnel, party to the meeting when deemed necessary.2.9.4 The Board will nominate alternative members to stand in the Committee.2.9.5 Committee will nominate a coordinator who will serve as chairperson during meetings.2.9.6 Committee members are nominated to serve the period of three (3) years, in line with main Board term.2.9.7 Members may serve more than one (1) term, provided it is confirmed by the Board.2.9.8 The Board Secretariat will provide secretariat services to the Committee.
Mandate
The core mandates of the committee emanate from COIDA and are found in the following sections of the Act:
Sections 47-64: Determination and calculation of benefits and or compensation Sections 80-89: Obligations and Assessment of employers Regulations issued in terms of COIDA PFMA and its Regulations, and Other applicable legislation and directives
AP
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Functions and responsibilities of the ABC
The Assessments and Benefits Committee will review, investigate, monitor, report and recommend to the Board on matters related to:
Policies on assessments and benefits and compensation payable. Obligations, registration and assessment of employers (sections 80-89). Raising of provisional assessments. Determination and revision of assessments and standard rates. Benefits and compensation payable (Sections 47-64) in terms of the Act. Medical fees payable in terms section 76 of the Act. Information contained in the quarterly reports.
Any other matters relating benefits payable as well as assessments of employers.The Committee, through chairperson, will report to the Board on its functions and also make
recommendations regarding the mandate, including reports on Scheduled Benefits in November and section 76 benefits payable in February.
Table 5: Schedule of attendance of the Assessments & Benefits Committee
= PresentAP = ApologyA = Absent* = Chairperson
Names & Surnames
1. Ms. J. Bodibe*
2. Mr. G. Mcintosh
3. Ms. B. Modise
4. Mr. S. Motloung
5. Ms.T. Pugh
6. Mr. F. Xaba
7. Mr. N.Weltman
17 / 08 / 2011 04 / 10 / 2011 09 / 11 / 2011 13 / 12 / 2011 23 / 01 / 2012
A
A A
8. Mr. P. Stoop AP
A A
AP
A
A
A
A
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2.10 Technical Committee For Occupational Injuries And Diseases
Composition
The composition of the Committee will consist of:
2.10.1 The Chairperson of the Committee is the member of the Board (nominated by the Board or the Committee).2.10.2 All Executive Managers/Directors representing all Departments within the Fund have standing/permanent invitation to attend committee meetings. Executive Manager may bring their supporting managers/representative as and when they considered necessary.2.10.3 The Committee may nominate the meeting chairperson in the absence of the Chairperson2.10.4 One official nominated by the Department of Health.2.10.5 One official nominated by the Department Mineral Resources.2.10.6 Five persons representing organized labour.2.10.7 Five persons representing organized business.2.10.8 Members are nominated for a period of three (3) years, which is in line with term of Board members 2.10.9 Members can serve more than one term provided it is confirmed by the Board and the Compensation Commissioner.2.10.10 The Committee can identify and invite technical experts to assist the Committee with a specific issue that is related to their areas of expertise.2.10.11 The Committee may consult with any person or group who may have an interest in the matter(s) under investigation.2.10.12 The Board Secretariat will provide secretariat functions to the Committee.
Mandate
The core mandate of the committee emanates from COIDA and other legislativeframework may include:
Occupational Health and Safety Act Regulations issued in terms of COIDA Health Act PFMA and its Regulations
Functions and responsibilities of the TCOID Committee
The Technical Committee for Occupational Injuries and Diseases will review, investigate, monitor, report and make recommendations to the Board on matters related to policy formulation, such as:
The policy on assessment and diagnosis of occupational injuries and diseases;The policy on evaluation of impairment from occupational diseases and injuries;The policy on certification of disability from occupational diseases and injuries; and review of existing
guidelines and schedules and make necessary recommendations to the Board; Investigate the management of Occupational Injuries and Diseases and their impact on compensation;
All the above matters must be investigated and reported, taking full cognizance of the corroboration with ODMWA and COIDA;
18
The committee may request for access to any documents or records of the ODMWA institutions that may assist it in the execution of its mandate;
The committee, through the Chairperson, will report to the Board on its activities; On matters where there is more than one expert view or opinion, the drafting of a final report will collate the various views with their supporting evidence with a view to facilitating discussions at the Board level;
All final reports will be circulated to the committee prior to submission to the Board; and A schedule of all reports submitted to the Board will be kept. To assist with document management, all
reports will be referenced and the submission dates will be documented.
Table 6: Schedule of attendance of Technical Committee on Occupational Injuries and Deseases (TCOID)
= PresentAP = ApologyA = Absent* = Chairperson
Names & Surnames
1. Mr. S. Motloung*
2. Ms. J. Bodibe
3. Mr. W. Dilotsotlhe
4. Mr. C. Mbekeni
5. Mr. A. Letshele
6. Ms. J. Mahlangu
7. Dr. D. Mokoboto
8. . Dr. D. Kritzinger
11 / 04 / 2011 19 / 07 / 2011 17 / 01 / 201202 / 11 / 2011
A
A
9. Mr. L. Dzingwa
AP
AP A
A
A
A
24 / 01 / 2012
AP AP
A A
AP
AAA
A
A
19
2.11 Strategic and Operational Committee
Composition
The Committee shall be composed of the following representatives:
2.11.1 At least 5 representatives of the constituencies as represented on the Board.2.11.2 All EXCO members, representing all Directorates within the Fund have standing/permanent invitation to attend committee meetings.2.11.3 The Committee may invite any other personnel, party to the meeting when deemed necessary.2.11.4 The Board shall nominate alternative members to stand in the Committee.2.11.5 The committee shall nominate a coordinator who shall serve as chairperson during meetings.2.11.6 Committee members are nominated to serve the period of three (3) years, which is in line with the main Board term.2.11.7 Members may serve more than one (1) term, provided it is confirmed by the Board.2.11.8 The Board Secretariat shall provide secretariat services to the Committee.
Mandate
The core mandates of the committee emanate from: COIDA Regulations issued in terms of COIDA PFMA and its Regulations, and Other applicable legislation and directives
Functions and responsibilities of the Strategic and Operational Committee
The Strategic and Operational Committee shall review, investigate, monitor, report and makerecommendations to the Board, including the following functions:
Oversee the implementation and progress of the Fund strategy Incorporates best practices/service delivery activities of the Fund as per COIDA Protect the reputation and image of the Fund Review and monitor internal and external communication and marketing strategies Identify, analyse and reporting on reliability and credibility of statistical information Evaluate and analyse the performance of the Fund Incorporates best practices to brand and market the activities of COIDA Provide contribution on management structure and governance imperatives of the Fund Implementation of resolutions and directives Implementation of “Batho Pele” Principles
Any other matters as assigned by the Board from time to time
20
Table 7: Schedule of attendance of Strategic and Operational Committee
= PresentAP = ApologyA = Absent* = Chairperson
Names & Surnames
1. Mr. M. Majola*
2. Ms. B. Modise
3. Mr. S. Motloung
4. Mr. S.Tsiane
5. Mr. G. Mclontosh
6. Mr. P. Magane
7. Ms. J. Bodibe
8. Mr. J. Singh
20 / 04 / 2011 16 / 08 / 2011 02 / 02 / 201202 / 11 / 2011
9. Mr. F. Xaba
A
A
A
A
AP
A
A
AP
A
AP
AP
2.12 Audit Committee
The Audit Committee was established in terms of the PFMA and Treasury Regulations to assist the ExecutiveAuthority in fulfilling its oversight responsibility in terms of these statutes.The duties of the committee arebroadly defined in Section 51(1) (a) (ii) of the PFMA and Treasury Regulations issued in March 2005.
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2.12.1 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. Members will be appointed for a four-year term of office.
The Director-General has to concur with any termination of the services of a person serving on the Audit Committee.
A quorum for any meeting will be fifty percent plus one member.
2.12.2The 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 aboveAct 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.
2.12.3 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.
2.12.4 Audit Committee Members and Attendance of Meetings
The Chairman of the Board, Compensation Commissioner, Chief Financial Officer, Chief Audit Executive,External Audit and Executive Management attend meetings by invitation.
During the year under review, the following meetings were held:
22
Table 8: Schedule of attendance of Audit Committee meetings
= PresentAP = ApologyA = Absent* = Chairperson
Names & Surnames
1. Mr. K Buthelezi*
2. Mr. G Nzalo
3. Mr. S Makhubu
4. Mr. F Xaba
06/0
4/2
011
23/0
5/2
011
27/0
5/2
011
30/0
5/2
011
14/0
6/2
011
30/0
6/2
011
26/0
7/2
011
09/0
9/2
011
03/1
0/2
011
06/1
2/2
011
19/1
2/2
011
14/0
3/2
012
AP
2.13 Governance of Risk
2.13.1 Fraud Prevention Plan
As required by section 29.1.1 of the Treasury Regulations, issued in terms of public Finance Management Act,No.1 of 1999, the Compensation Fund prepared a Fraud Prevention Plan to effectively manage the fraud risks 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 addressesthese 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.
Table 9: Statistical Investigation Cases
TotalNumberof Cases
208
EstimatedAmount
InvestigationCompleted Actual Loss
Referred toSAPS
Amount refto SAPS
R 71,766,067 137 R 26,072,606 45 R 22,137,042
23
One official was dismissed for fraud during the year under review and a criminal case was opened with the SAPS for investigation.
Graph 1: Statistics of cases per section completed
Prior year cases reported to SAPS and Health Care Providers
Health Care Providers
3 cases of fraud are on trial, 2 convictions and 4 under investigation
Ex official
6 ex-officials are on trial and 4 under investigation
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Graph 2: Statistical Fraud and Risk Awareness conducted
2.13.2 Enterprise Risk Management
Risk assessment was performed and updating of the risk registers by various risk owners. Risk Committee is chaired by an independent member and monitors the implementation of the risk control matrix, to ensurethe effectiveness of risk management.Risk champions were appointed and trained so that they can assist the risk owners on the implementation of the risk control measures.
2.13.3 Security Risk Management
Integrated Security System was implemented at both Compensation and Benstra Buildings as the measuresto improve the security risk.Executive Management have submitted their vetting forms to State Security Agency for vetting, two alreadycleared and the rest are still waiting for the results.
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