Eastern Cape Department of Social Development Conditional Grants

Eastern Cape Department of Social Development Conditional Grants and Capital Expenditure Review 09 -November-2005

Presentation Outline n Brief Outline of Conditional Grants n Data on conditional grants spending trends from 2001/02 to 2005/06 n Brief Assessment of the Department’s monitoring capacity n Conditional Grants Compliance Issues n Details of Capital Spending n Challenges

Brief Outline on Conditional Grants Social Grants Arrears (Regulation 11) q Stemmed from the amendment of the Social Assistance Regulation 11, which was amended to consider the application date as the accrual date for payment of social grants, not the date of approval. n As the amendment was applied retrospectively, and thus all grants approved between 1 st April 1998 and 1 st December 2001, were due for back pay.

Brief Outline on Conditional Grants Child Support Grant n This grant was introduced in April 1998 to replace the State maintenance grant which was phased out over a three year period ending 31 st March 2001. n In its year of inception it targeted children from 0 under 7 years. n It was a grant paid to a parent or care giver for the care of the child in his/her custody until the child turns seven years.

Brief Outline on Conditional Grants Child Support Grant Cont. . n In the subsequent three year period i. e. 2003/04, 2004/05 and 2005/06, it was extended to the ages of under 9, under 11, and under 14 respectively. n In 2003/04, 156 400 children were registered, and in 2004/05 141 665 children were registered.

Brief Outline on Conditional Grants In 2001/02 funds were allocated for the following Conditional Grants: HIV and AIDS n With a specific focus on awareness and advocacy strategies, providing preventative, supportive and home community base care programmes that mitigate the social impact of HIV and AIDS and other opportunistic diseases. n The HCBC programme is further utilised to create work opportunities for the unemployed and underemployed people in the Eastern cape in attempt to implement and fulfill the mandate of Expanded Public Works Programme.

Brief Outline on Conditional Grants Poverty Relief Programme (Grant in Kind) n This programme focuses on building sustainable livelihood, food security, women cooperatives, income generation and asset building programmes. n The Community Development approach is the most appropriate intervention strategy suitable to alleviating poverty in the Eastern Cape, and is seen as a philosophy with specific values and principles that guide development practice.

Brief Outline on Conditional Grants Food Emergency Relief (NFEP) n This is a special programme focusing on vulnerable groups that are unable to access a minimum daily, safe and nutritious food. n It is a short term intervention which addresses the immediate and pressing need of hunger. n This NFEP was later replaced by Integrated Social Development Services Grant, which seeks to enable the provincial departments to support and provide appropriate social welfare services and development interventions in an integrated manner as well as to provide appropriate short term relief to vulnerable individuals and households whoa ere not eligible and not receiving any form of social assistance in terms of Social Assistance Act of 1992.

Brief Outline on Conditional Grants 1. The intention of the grant is to develop and implement both social welfare and development programmes in a manner that allows opportunities for job creation, skills development and income generation on a sustainable basis. 2. The purpose is to strengthen the capacity of vulnerable individuals and households, thereby reducing their dependence on grants, and thus enhance sustainable livelihood.

Brief Outline on Conditional Grants Women Flagship n Programme focusing on empowering rural women to engage in economic development initiatives. Financial Management n Provided for CFO Support to enhance provincial Social Developments through out the country to be able account on Social Grant Budgets and expenditure. 10

Assessment of the Department’s Monitoring Capacity (Social Ass. Grants) Contract Management Center (CMC) n Establishment of a Contract Management Centre (CMC) to monitor payments of social grants by third parties, namely, All Pay, and Cash Pay Master Services (CPS). n Twelve monitors have been employed to ensure that the payment contractors comply to the provisions of the service level agreements. n 144 Helpdesk officials are deployed on a monthly basis to all pay points to perform helpdesk functions.

Assessment of the Department’s Monitoring Capacity (Social Ass. Grants) Management Information System (MIS) n MIS to monitor the workflow and turnaround time for social grants applications n MIS has been rolled out to all Social Development offices in the Eastern Cape. n Electronic registry to monitor and control the movement of all social security files, also to ensure the safe keeping and easy tracking of beneficiaries’ files. n Inspectorate unit is charged with the internal audit function and compliance issues within social security n In Year Monitoring reports (IYM) analysed on a monthly basis.

Assessment of the Department’s Monitoring Capacity (Social Ass. Grants) 1. Monthly conditional grant monitoring template which is supplied to National Department of Social Development (NDo. SD). 2. This template report on all activities performed in each month as required by National Treasury. 3. Disability Assessment Unit monitors and controls the approval of disability grants. 4. The review section controls the expiry of all temporary disability grants on a monthly basis.

Assessment of the Department’s Monitoring Capacity 1. The department has developed an appropriate monitoring tool aligned to logical framework format and tailored to track progress on time, cost, quality, quantity and value for the money funded. 2. Structurally, the department has established the project facilitation unit to track projects, monitor progress, and provide technical support to departmental projects. 3. Monthly reports and quarterly review meetings are held to strengthen the monitoring capacity of the department.

Assessment of the Department’s Monitoring Capacity n All funded projects are expected to submit community profiles, compile Business Plans and enter into service level agreements with the department. n The reporting by project beneficiaries is aligned to the approved Business Plans. n The department complies the requirements of DORA and submit reports monthly, quarterly as well as annual closeout reports.

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Under-spending-Social Ass. Grants n In 2001/02, Social Grants Arrears (Regulation 11) was received at the end of March 2002, as a result there was no expenditure incurred. n The grant was therefore rolled over to 2002/03 financial year n 2002/03 reflects under-spending in respect of Social Grants Arrears, and there were no rollovers approved for the following financial year. n Under-spending was due to 40 499 beneficiaries records being inactive; many of these were deceased beneficiaries.

Under-spending-Social Ass. Grants n For 2003/04 the extension targets in the province were very high (230 000 targeted), and when taking applications in the communities, it was found out that children’s figures were much lower than projected. n The actual intake was 156 400 for the extension. n For 2004/05, 244 608 children were projected for the extension, however, only 141 665 children were registered on SOCPEN; similarly, this was due to a high target

Under-spending-Social Ass. Grants n For the current financial year we are projecting to over-spend with regards to Child Support Extension. n We have projected 360 000 intake and to-date 210 297 children applications have been taken for children between 11 and 14. n However, we do project a slow down as we reach saturation point.

Under / Overspending-HIV and AIDS n In 2002/03, HIV and AIDS reflected an under-spending of R 1, 567 million, however, this was due to shortage of staff as the programme was coordinated by only one person at provincial level. n The department has since strengthened the HIV and AIDS unit and is headed by Deputy Director, assisted by two Assistant Directors n Additional nine AD’s posts have been advertised and placement due to be effected before end Nov. n The under-spending of R 274 000 in 2004/05 was as result of delays in the appointment of Assistant Directors responsible for monitoring and coordination of HIV and AIDS at a provincial level.

Under-spending -NFEP q The under-spending on the NFEP were as a result of delays in the tender processes centralized at National Department of Social Development. q The department however, has strengthened internal control systems through establishment of an electronic database which interfaces with SOCPEN 25

DEPARTMENT OF SOCIAL DEVELOPMENT: INFRASTRUCTURE REPORT 05/06: OCT-05 PROGRESS REPORT SUBMITTED 31 OCTOBER 2005 Current Status 2005/06 Budget 2005/06 Date: Finish Total Estimated Expense Progress Date: Start Expenditure up to end October 2005 Project name Project duration 1 Humansdorp Multi Purpose Centre New Feb -04 Mar 08 426 1, 410 1, 20 0 Contractor approved by TRC Meeting on Thursday, 13 October 2005. Awaiting issue of works order from Social Development Order to be issued 2 Aliwal North C/Development Centre New Apr 04 Mar 07 177 950 900 Contractor approved by DPW Procurement Meeting on Tuesday, 11 October 2005. Awaiting issue of works order from Social Development Order to be issued 3 Peddie Community Development Centre New Apr 02 Mar 07 460 3, 350 3, 20 0 Site handed over to Alexander Construction on 24 September 2005. Contractor on site 4 Umtata Place of Safety New Apr 97 Mar 05 0 60 60 Final account to be approved and project retention period completed Final Account Stage 5 Graaff Reinet Multi Purpose Centre New Oct 04 Mar 07 10 10 400 The project is currently delayed due to no sites available, a suitable site must be located by November 2005 Planning Stage 6 Middledrift Service Office Upg rade Apr 01 Mar 06 0 490 Contractor on project not performing - no work done for 4 weeks. Contractor to be determined and project re-tendered Nov. 2005 Determination of Project 7 Alice Service Office Upg rade Apr 01 Mar 06 66 370 Contractor on project not performing - no work done for 4 weeks. Contractor to be determined and project re-tendered Nov. 2005 Determination of Project 26 John-X Meriman Upg Oct- Mar- 43 115 80 Final account to be approved and project retention Final Account 8

DEPARTMENT OF SOCIAL DEVELOPMENT: INFRASTRUCTURE REPORT 05/06: OCT-05 PROGRESS REPORT SUBMITTED 31 OCTOBER 2005 Status Progress 2005/06 Budget 2005/06 Total Estimated Expense Date: Finish Expenditure up to end October 2005 Project duration Date: Start Project description Project name 9 Seymour District Office Upgrad e Oct-03 Mar 05 0 30 30 Final account to be approved and project retention period completed Final Account Stage 1 0 Air-conditioning Parkhomes & Service Upgrad e Oct-03 Mar 06 289 1, 20 0 Site handed over to contractor in September 2005. Contractor on site Siyalinga/Thembelihle Centre - Fencing Upgrad e Oct-03 Mar 06 222 350 200 Final account to be approved and project retention period completed Final Account Stage Siyalinga/Thembelihle Centre - Phase 2 Upgrad e Apr-04 Mar 07 0 1, 35 0 3, 35 1 Contractor approved by DPW Bid Award Committee awaiting letter of award. Tender report to be approved. Khalethemba Social Development Office Upgrad e Jan-05 Mar 07 328 1, 90 0 Site handed over to Hawkes Construction on 19 October 2005. Contractor on site Dimbaza Service Office Upgrad e Apr-04 Mar 05 25 120 Final account to be approved and project retention period completed Final Account Stage Prefabricated Park Homes - North Maint. Oct-03 Mar 05 58 65 35 Final account approved - final payments issued. Completed Oct-03 Mar 05 1 1 1 2 1 3 1 4 1 5 1 6 Prefabricated Park Homes - South Maint. 27 21 35 35 Final account approved - final payments issued. Completed

DEPARTMENT OF SOCIAL DEVELOPMENT: INFRASTRUCTURE REPORT 05/06: OCT-05 PROGRESS REPORT SUBMITTED 31 OCTOBER 2005 Erika POS Maint. Apr-04 19 Enkuselweni POS Maint. Apr-04 20 Connect Toilets Park Homes Maint. Apr-05 Maintenance and Fencing to Containe rs Maint. Apr-05 Mar 0 6 17 18 21 22 Upgrading of Butterworth TT College Maint. 0 65 65 Final account approved - final payments to be submitted for payment. Completed 0 15 15 Final account to be approved and project retention period completed Final Account Stage 28 601 600 Project stopped - funds to be used for moving Social Development Head office to Bhisho Post Office Building Project stopped 0 300 Quotations submitted - awaiting issue of works orders. Order to be issued 500 Project tendered on 29 September 2005. Tenders close in week 17 - 21 October 2005. Project retendered, no favourable tenders received Tender stage Ongoing 0 800 Mar 0 0 300 23 R 2, 358 million is an amount spent todate and is 15% 6 R 9, 660 million is an amount already committed and. Maris representing 61% Project N/A Apr-05 205 350 is an amount to be committed for relocation 24 R 3, 3 million Management 06 to the Phalo House about 18% Maintenance of Buildings Maint. Apr-05 The two commitments above represent about 82% of the total amount TOTAL Status 2005/06 Budget Apr-04 2005/06 Total Estimated Expense Date: Fin ish Date sart Maint. 2005/06 Expenditure up to end October 2005 Project duration Project description Project name Mar 0 5 Mar 0 6 Qunu Day Care Centre Progress 2, 358 14, 251 15, 716 28

Challenges q With regards to beneficiary numbers, no accurate management information (Statistics) are available as to people living in poverty; this makes projections very difficult q With regards to foster care the department depends mainly on the Department of Justice for the issuance of court orders. q The high turnover rate of social workers is further creating a limitation in the rolling out of our foster care programmes.

Challenges Cont. . q Obtaining the necessary documentation from Home Affairs is still a challenge (ID and Birth Certificates). q To rectify the problem, Home Affairs and other role players have been brought on board as partners in the process. q These role players now go out with the Social Development teams taking applications q The partnership with these role players has also resulted in higher intake in the current financial year.

Challenges Cont. . q In respect of Grant in kind and HIV and Aids initially they were allocated to the province without administration budget. q That presented cost pressures in provincial budgets, and limitations on our capacity to deliver on the grants q In most cases, the conditional grants are received by the provinces at the end of the first quarter, which is a challenge in terms of performance.

Challenges Cont. . 1. Linked to the above, actual transfer of funds was limited to 10% in the first quarter, and yet the amount of work would be warranting 50% of the funds. 2. This delayed delivery and accountability in terms of the Division of Revenue Act (DORA). 3. Conditional Grants are allocated without clear guidelines, which results in audit exceptions by the office of the Auditor General.

Challenges Cont. . q As a corrective measure, the department has developed its provincial specific guidelines namely: q q Business Plan formats Service Level Agreements Formats of quarterly and monthly reports and Pre-numbered forms for beneficiaries

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