The Compensation Fund (CF), a public entity of the Department of Labour has posted a ponderous R13, 5-billion surplus in the period ending 30 September 2011, chief financial officer (CFO) Fezeka Puzi told the Fund’s board meeting in Pretoria today.
Puzi described the financial state of the Fund as, “healthy despite the tough trading conditions amidst the economic decline”. She said although the employer contributions have declined, the Funds reserves (money not committed) were expected to balloon going ahead.
Compensation Fund Commissioner Shadrack Mkhonto told the meeting that despite the healthy financial standing the Fund was still on a push to further improve its operational efficiency as part of an effort to meet its delivery obligations.
Mkhonto said in the coming months focus would be on how to deal with migration to new information technology systems, rolling our a new system that would accelerate the payment to the hospitals and doctors, and tightening the screws on fraud prevention systems. He said CF was currently engaged with South African Revenue Service (SARS) to improve the efficiency of its information technology systems.
In the period ending 30 September 2011, the Fund managed to increase its underlying asset base from more than R28,1 billion to R29,4 billion. The Fund generates its revenue from levies paid by employers, which consists mainly of annual assessments paid by registered employers. The entity’s total investments as at the end of the period under review sit at R27,6-billion.
Puzi said: “these investments are held in money markets instruments; central government, municipality and parastatals bonds that support infrastructure projects. The fund is on the lookout for new investment opportunities and over the next coming months we will be targeting to expose ourself in areas such as socially responsible investments to help cushion the effect of grinding unemployment”.
She said the Fund had also increased its equities exposure by more than 300%. Puzi said these were not performing well at the moment, “but will benefit the Fund in the long term when the economy recovers”.
Meanwhile, the latest financials come on the back of the recent Auditor-General’s remarks that the CF had obtained a qualified audit endorsement.
“The outcome of the financials coming from the audit opinion was that the Compensation Fund received audit qualification on revenue and debtors; this has been a problem for the last 6 or 7 years ago. Management has prepared an action plan to address the Audit qualification issue,” the Board said in a statement.
Chairman of the Compensation Fund board Mongezi Mngqibisa said he was encouraged by the sight of a luminous light at the end of the tunnel, despite the problems faced by the organisation. Mngqibisa said he was looking forward to serving an operationally efficient CF.
During the past few years, the Fund had made considerable strides to reduce the service delivery challenges it experienced and those that affect its clients. Achievements derived to date have seen the Fund working tirelessly to improve by shortening the turnaround time and improving access for beneficiaries as well as improving communication with stakeholders.
Some of the initiatives the Fund has set itself or currently engaged in is to focus on intensifying the enlisting the help of tracing agents to contact injured employees and dependants and obtain outstanding information to finalise claims, decentralise the medical claims functions to provinces, conduct a study on all employees on pension and those who require prosthetic devices, in order to compile a database for the Fund.
The Fund is also to develop a strategy to employ the disabled and injured people. The CF board is to embark on a national road show visiting provincial offices with the intention to familiarise itself with problems at service delivery level and do a need analysis.
The Compensation Fund is a public entity that reports to the Department of Labour. The CF’s main objective is to provide compensation for disability, illness, diseases and death sustained during work.
