Presentation to the Portfolio Committee on Labour
10th June 2009
S.S. MKHONTOCompensation Commissioner
LEGISLATIVE MANDATE
- The Compensation Fund is a public entity of the
Department of Labour
- It is responsible to administer the Compensation for
Occupational Injuries and Diseases Act (COIDA)
No. 130/1993 as amended by the COIDA 61/1997
The Fund provides compensation for disablement
caused by occupational injuries or diseases sustained or
contracted by workers, or for death resulting from such
injuries or diseases
The Fund is financed from levies paid by employers
The revenue consists mainly of annual assessments paid
by registered employers on a basis of a percentage or
fixed rate of the annual earnings of their workers
BACKGROUND
MINISTER OF LABOUR
COMPENSATION BOARD
DIRECTOR-GENERAL : LABOUR
COMPENSATION COMMISSIONER
AUDIT COMMITTEE
BOARD SUB-COMMITTEES
REPORTING FRAMEWORK
VISION
To provide compensation for
occupational injuries, diseases
and rehabilitation of workers, and
deliver continuous value to all
stakeholders
MISSION
To develop and implement solutions to
provide quality and accessible services
according to standards as set in
consultation with our stakeholders, whilst
maintaining the Fund’s liquidity
STRATEGIC OBJECTIVES
To provide an efficient social safety net
Ensure the financial viability of the Fund
Effective cash and investments management
Effect management reforms and restructuring of the Fund
Enhance quality and access to COIDA services and information
Ensure effective data and information management
ORGANISATIONAL CHALLENGES • Inadequate capacity, which result in delays in processing claims
• Lack of electronic submission resulting in large amounts of paper in the organisation
• Outdated and inefficient business processes
• Capacity of the IT service provider and capability to respond to the organisation’s needs
• Non-existence of the IES case management system for COIDA unreported cases
• Poor enforcement of COIDA
• Non submission and delays in reporting of accidents and submission of information\documents, particularly banking details
AUDITOR-GENERAL FINDINGS
1. Revenue Generation and Collection
• Material incorrect assessments• Material incorrect debtors
2. Claims Incurred
• A backlog in the scanning of documents • Unavailability of supporting documents
3. Unexplained Charge arising from the Treasury Function
• Breakdown in internal controls with regard to bank reconciliations
• Completeness and accuracy of investment income
Disclaimer 2007/8
HIGHLIGHTS (2008/9)
327 647 compensation benefits paid, total value of R630 million
815 045 medical benefits paid, total value of R1.5 billion
R4.4 billion collected from assessments - 15% increase compared to
2007/08.
Assets growth from R18.3 billion in 2007/08 to R21.4 billion 2008/09
(17%)
70% senior executive management posts filled
Business process re-engineering and benchmarking completed
Policies finalised and implemented
Electronic payments implemented
Appointment of Board members finalised and orientation conducted
Workshop held with stakeholders on Early Return to Work programme
LOWLIGHTS 2008/9
Policy on Early Return to Work not finalised
Claims turn-around time still remains a challenge
Slow progress in the implementation of the integrated
claims and revenue management system
Lack of progress towards decentralisation of services
PERFORMANCE PROGRESS COMPENSATION :Payments made directly to employees
YEAR NO OF PAYMENTS AMOUNT PAID
2006 331 672 R 655m
2007 335 345 R 652m
2008 327 647 R 630m
NU
MB
ER
PA
IDN
UM
BE
R P
AID
COMPENSATION BENEFITS
331672
335345
327647
322000
324000
326000
328000
330000
332000
334000
336000
20072006 2008
NU
MB
ER
PA
ID
COMPENSATION PAYMENTS
COMPENSATION BENEFITS
331672
335345
327647
322000
324000
326000
328000
330000
332000
334000
336000
20072006 2008
NU
MB
ER
PA
ID
YearNumber of payments Value
2006 / 07 886 511 R 1,430bn
2007 / 08 777 320 R 1,294bn
2008 / 09 815 045 R 1,544bn
MEDICAL PAYMENTS Payments made directly to medical service providers
Value of claims paid
1.15
1.20
1.25
1.30
1.35
1.40
1.45
1.50
1.55
2006-2007 2007-2008 2008-2009
Financial year
R b
illio
n
MEDICAL PAYMENTS contd.
MEDICAL PAYMENTS contd.
Payment according to service provided
Pathology
5%
Orthopaedics
6%
Physiotherapy
7%
Diagnostic
Radiology
18%
Private
Hospitals
21%
General
Practitioners
27%
Other
specialists
16%
FINANCIAL INFORMATION
2007/082007/08
R’000 R’000
2008/09 2008/09 R’000R’000
Contributions Contributions revenuerevenue
3,268,589 4,462,953
Investment Investment incomeincome
1,349,815 2,076,685
Other incomeOther income 15,669 21,228
Benefits paidBenefits paid 1,298,420 2,894,473
AdminAdmin 401,429 447,247
Surplus/deficitSurplus/deficit -714,415 1,287,285
InvestmentsInvestments 16,655,425 19,959,023
Investment income (Rm)
2007/81,349,815
2008/9 2,076,685
0
500000
1000000
1500000
2000000
2500000
1 2
Other income (Rm)
2007/815,669
2008/9 21,228
0
5000
10000
15000
20000
25000
1 2
Benefits paid (Rm)
2007/8 1,298,420
2008/9 2,894,473
0
500000
1000000
1500000
2000000
2500000
3000000
3500000
1 2
Contributions Revenue (Rm)
2007/8 3,268,589
2008/9 4,462,953
0500000
100000015000002000000250000030000003500000400000045000005000000
1 2
FINANCIAL INFORMATION
Surplus \ Deficit (Rm)
2007/8-714,415
2008/9 1,287,285
-1000000
-500000
0
500000
1000000
1500000
1 2
Administration (Rm)
2008/9447,247
2007/8401,429
370000
380000
390000
400000
410000
420000
430000
440000
450000
460000
1 2
Investments (Rm)
2007/8 16,655,425
2008/9 19,959,023
15000000
16000000
17000000
18000000
19000000
20000000
21000000
1 2
FINANCIAL INFORMATION
PRIORITIES 2009/10
Providing an Effective social safety net
Continuous review and updating of COIDA policies and
regulations Annual review of tariffs, benefits and premiums Improve claims/patient turn-around time Continuous review of business processes
Effective Management of Finances and Assets of the Fund
Ensure budgetary control and monitoring Develop computerised systems for cash and asset management To align procurement and acquisition systems in terms of Supply
Chain Management regulations To develop and implement a new integrated financial
management system To enhance revenue collection mechanisms To strengthen financial management capacity 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 CRM Strategy To ensure integrated service delivery Strengthening partnerships with private and public health
service provider institutions Implement of Quality Management Systems
PRIORITIES 2009/10 contd.
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)
Ensure effective communication and stakeholder management
Implementation 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
PRIORITIES 2009/10 contd.
