THE COMPENSATION FUND 04 -05 February 2020 - PowerPoint Presentation

1. THE COMPENSATION FUND04 -05 February 2020OVERVIEW OF THE OPERATIONS OF THE FUNDPORTFOLIO COMMITTEE ON LABOUR

2. MANDATEThe Compensation Fund is established in terms of section 15 of the Compensation for Occupational Injuries and Diseases Act as amended. 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.

3. ILO CONVENTION RatifiedC019 - Equality of Treatment (Accident Compensation) Convention, 1925 (No. 19)C042 - Workmen's Compensation (Occupational Diseases) Convention (Revised), 1934 (No. 42)Not RatifiedC017 - Workmen's Compensation (Accidents) Convention, 1925 (No. 17)C018 - Workmen's Compensation (Occupational Diseases) Convention, 1925 (No. 18)C012 - Workmen's Compensation (Agriculture) Convention, 1921 (No. 12)R022 - Workmen's Compensation (Minimum Scale) Recommendation, 1925 (No. 22)C121 - Employment Injury Benefits Convention, 1964 [Schedule I amended in 1980] (No. 121)

4. VISION & MISSION To be a world class provider of sustainable compensation for occupational injuries and diseases, rehabilitation and reintegration servicesMission Provide efficient, quality, client centric and accessible COID serviceSustain financial viabilityEnsure an organisation which takes care of the needs of its staff for effective service deliveryVision

5. STRATEGIC PLAN2020/02/125Quality Medical CareClient Centered CarePeople PerformanceStrategic PrioritiesTo provide faster, reliable and accessible COID Services by 2020To provide an effective and efficient client oriented support servicesFlagship ProjectsIntegrated Online Platform for Employer Registration and compliance managementOnline Claims Management SystemHospital Care Management ProgramDisability Care ManagementIntegration of data from e-claims. ICM and umehluko systems or better Review of medical services function in the Fund Chronic Medication DispensingImproved capacity through Human Resource Development Increase in the asset base of the Fund through investmentsContribute to employment creation through investments and training programmes

6. FUNCTIONAL STRUCTUREGOVERNANCECompensation and Pension Benefits Medical BenefitsDisability Care & RehabilitationCOMPLIANCECORPORATE SUPPORTExecutive Authority – Minister o Employment and LabourAccounting Authority – Director GeneralAdvisory Board – Appointed from social partners through NEDLACCHANGES TO THE POLICY AND LEGISLATIVE ENVIRONMENTCOIDA AMENDMENT BILLREGULATIONS ON EMPLOYER ASSESSMENTGovernance Structure

7. FUNCTIONAL RESTRUCTURINGCOIDA SERVICESClaims RegistrationPensionsAccident Insurance Payouts (TTD and PDs)Employer RegistrationReturn of Earnings and AssessmentsCompliance and AuditsMEDICAL BENEFITSMedical Services (Procedure Authorisations, specialised claims processing etc)Medical Claims Processing and paymentsManaged Care ServicesREHABILITATION SERVICESVocational Rehabilitation programmesClinical Rehabilitation programmesSocial Rehabilitation programmesFUNCTIONAL STRUCTURE

8. BENEFITS PACKAGE

9. FUNDINGFunded from levies paid by employersEmployer classified according to 23 classes and further sub divided into 102 subclasses with each having its own assessment rate

10. INVESTMENT GROWTH10The Compensation Fund’s investment portfolios grew by 36% between March 2015 and March 2019 as a result of positive investment returns and net contributions arising from surplus cash invested with the Public Investment Corporation.

11. FINANCIAL ANALYSIS11There has been steady in revenue and expenditure over the years.In 2018 and 2019, 80% of admin expenditure comprised of debt impairment.

12. AUDIT OUTCOMES12Over the past five years the Fund has received a Disclaimer Audit Outcome.The qualification paragraphs lie in 3 main areas: a) Revenue and receivablesThis is due to the Funds inability to validate nature of business and the number of employees in each company assessed.The Fund’s inability to collect effectively has also contributed to this.Poor System ConfigurationSkills Gapb) Claims ManagementDue to inability to validate claims and injuries of workers and medical claims.Poor system configuration- Skills Gapc) Investments- Introduction of SRI’s has made it difficult to account for them in consolidated financial statements.

13. ORGANOGRAM

14. ORGANISATIONAL PERFORMANCE14

15. ACHIEVEMENTSAction Plan was developed in 2015 as the first phase of the Turnaround Strategy of the Fund. The following as achieved in the Action Plan:Restructuring of the Compensation Fund resulting in much needed critical skillsStability in the operations of the Fund Eradication of Backlogs in claimsHalting the deterioration of audit matters 94 % compensation claims adjudicated within 40 days of receipt93% % medical claims finalised within days 60 days of receiptSecond Action Plan has been developed to improve on the stability that was achieved by the first action plan which includes dealing with the control deficiencies

16. CHALLENGESFinancial ManagementSystemic deficiences in the control environment resulting in successive audit disclaimersService DeliveryInefficient ICT systems resulting in poor customer service and bottlenecks in service deliveryDecentralisation of services has not reached the desired level of stability to improve service deliveryPeople ManagementSkills gaps identified during the skills audit which includes financial management and Clinical skills

17. MUTUAL ASSURANCEIn terms of section 30 of COIDA the Minister issues Licence to two mutual association to provide COIDA services. Inherited from old Workmen’s Compensation Act of 1941They report to the Compensation Commissioner on their operations in terms of the LicencesFederated Mutual Assurance (FEMA) operates in the construction sectorRand Mutual Assurance (RMA) operates in the Mining and Iron and Steel sectors

18. Thank You…18Compensation Commissioner