Health and Safety

The Compensation Fund (CF), a public entity of the Department of Labour (DoL) has managed to raise R4-billon in revenue in the period ending 31 March 2012. Though revenue raised was R1-billion short of its set target of R5-billion, the Fund remained upbeat of its future as a number of projects were underway to improve operational efficiencies.


Addressing the Compensation Fund board meeting held at the Fund’s head office in Pretoria this week, newly-appointed chief financial officer Brian Leshnick said the target was not achieved due to the implementation of a new financial system using a new information technology system, problems posed by delays in assessing returns thus causing a domino effect.


Leshnick cited the other reason caused by internal issues relating to technology which caused delays in obtaining of returns and assessing them.


The CF has recently announced it has launched a web-based registration of employers. Through this electronic platform called Return of Earnings (ROE) for employer assessments the Fund is aching to increase revenue collection.


“The potential of RoE is enormous. Last week in just four days we managed to collect R46-million. This new system of collection shows there is a big demand for it. The quick turnaround time present huge value to the Fund, and we hope business will appreciate such a quick turn-around of their invoice,” Leshnick said, another project was a pilot to scan and create immediate invoice and the pilot has so far proved a success.


“From an overall expenditure perspective the expectation is that, as we pick up on the backlogs and assessments we will see a rise in revenue. There is also the secondary issue of employers who have not submitted returns. We also has got another project underway, where we are working with SARS tapping into their database and expect to yield results”, Leshnick said.


He said there are internal issues that keep on creeping in the system from time to time, however these could be addressed in a piece meal fashion. We do not have a magic button to press. We have a number of different initiatives to address to make major changes,” he said.


Although no substantive financial report was tabled at the board meeting, a special meeting is to be scheduled to table a detailed report. The board through its chairman Mongezi Mngqibisa committed itself to submission of detailed financial report as part of proper governance.


The Compensation Fund is also in a process of a major reorganisation including amendment of the Compensation for Occupational Injuries and Diseases Act. This reorganisation relates to the decentralisation of the CF’s activities into the provinces instead of centralising everything at the Pretoria head office.


The Fund and one union Nehawu have signed what is termed Migration Framework and the process was now awaiting the signatures of Popcru and Public Service Association.


Meanwhile, tabling the CF’s Audit & Risk Committee report to the meeting, board member Fani Xaba cautioned that: “there are still many fires to be extinguished”. Xaba said the Compensation Fund was still exposed to unforeseen risks.


The report he tabled before the board highlighted on audit of performance information, fixed assets, auxiliary services, information technology general controls review and, legal services. The focus was to look on the adequacy and effectiveness of controls relating to these processes, ensuring that management’s control strategies are consistent with the activities and objectives.


“Our internal audit review found that the majority of internal controls within the mentioned business processes seem to be inadequate and ineffective, resulting in critical and serious risk exposure,” Xaba warned.


The board also acknowledged that although the backlog has been reduced in the mailroom, it has been its ‘Achilles heel’. 


Issued by: Department of Labour: 25 May 2012


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