Compensation Fund turning the corner — Mafata
Compensation Fund commissioner Vuyo Mafata says he is confident that the fund is turning the corner, but this did not prevent the auditor-general issuing another disclaimer on its 2016-17 financial statements because there was insufficient audit evidence on which to base an audit opinion. The fund, which compensates workers who are injured or made ill at work, has been plagued by inefficiency, backlogs and unpaid claims for many years.
Compensation Fund commissioner Vuyo Mafata is confident that the fund is turning the corner, but this did not prevent the auditor-general from issuing yet another disclaimer on the fund’s 2016-17 financial statements because there was insufficient audit evidence on which to base an audit opinion. The fund, which compensates workers who are injured or made sick at work, has been plagued by inefficiencies, backlogs and unpaid claims going back many years.
Among the deficiencies noted in the financial accounts were that insufficient records were kept of revenue, and that internal controls over records of benefits paid were inadequate. Material losses amounting to R2.4bn were incurred as a result of a write-off of irrecoverable debtors, and irregular expenditure amounted to R762.4m.
“Management did not maintain proper accounting records and adequate controls over assessment of revenue and debtors,” the auditor-general’s report noted. “This resulted in revenue being incorrectly recorded and payments received from debtors not being posted in the correct period for the current and prior years.”
Despite the findings, Mafata said the fund was “turning the corner and service delivery has improved immensely”.
The backlog of outstanding claims, which has been a huge source of frustration for claimants, had been reduced and the turnaround time for the processing and payment of medical invoices had improved.
“During the year under review, the fund adjudicated 145,922 out of 155,472 claims received. Of this, 130,800 claims were adjudicated within 60 days of receipt.
“The fund also processed and paid 686,385 out of 747,525 medical claims, of which 612,960 were finalised within 60 days. We also finalised 21,055 out of 28,754 compensation benefits,” Mafata said.
The fund aimed to improve financial administration, customer service and service delivery, internal administrative processes and human resource management, he said.
The fund collected R9.3bn from employers (a 20% increase on the previous year) and paid out R4.3bn in benefits representing a year-on-year increase of 15%. It generated a surplus of R6.6bn compared with the R1.6bn deficit in the previous year. It has an investment fund of R55.5bn, up from R51.4bn in the previous year, and net assets of R27.2bn, a 32% increase from the previous year.