presented by the director-general : npt nhleko 1
TRANSCRIPT
PRESENTED BY THE DIRECTOR-GENERAL : NPT NHLEKO
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• A distressed organisation
• Audit findings
• Interventions
• The need for a Turnaround Strategy
• Progress
• Conclusion
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People
Service
Leadership
Systems
Finances
Process
MANUAL
NOT FULLY FUNCTIONAL GOOD
POSITIONPOOR – MANY COMPLAINTS
AG : “TONE NOT SET AT THE TOP”
DISSATISFIED
DYSFUNCTIONAL
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Source : CF Employee Satisfaction Survey 2012
** ALMOST HALF THE EMPLOYEES AT CF ARE DISSATISFIED – THIS DOES NOT MAKE FOR AN EFFECTIVE OR PRODUCTIVE WORKFORCE
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Revenue Management and Debtors
ClaimsBank
ReconciliationsYear
2008 / 9
2009 / 10
2010 / 11
2011 / 12
DISCLAIMER
DISCLAIMER
QUALIFICATION
QUALIFICATION
DISCLAIMER
DISCLAIMER
QUALIFICATION
QUALIFICATION
DISCLAIMER
DISCLAIMER
CLEARED
CLEARED
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Material misstatements in the financial statements were identified
Management did not provide effective leadership …to ensure that staff properly understands the code of conduct implemented and adheres to it
The Fund lacks finance leadership with adequate management, financial and accounting skills and competencies.
Management did not implement controls including clearing of a number of suspense accounts for the Funds business processes.
Management has not implemented a process to monitor compliance with rules and regulations resulting in numerous non compliance matters reported
The Fund risk management assessments were not adequate to ensure that risks…were adequately identified and a risk strategy monitored
LIKELIHOOD OF A DISCLAIMER FOR THE FUND FOR 2012/13LIKELIHOOD OF A DISCLAIMER FOR THE FUND FOR 2012/13 9
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Leadershipcapacitation
NewOrganisational
structure
SAP systemsimplementation
Employeeculturesurvey
Processmapping
Consultantsfor different
areasSTILL DYSFUNCTIONAL
Newbranding
All these interventions focussed on one area only –
silo approach 11
• numerous negative media exposure both on radio shows (eg. Talk Radio 702) and television (eg. Fokus on SABC1)
• increasing complaints to the Public Protector
• demands from different associations and groups to discuss and complain about services from the Fund (eg. SACCI, SASOM)
• various litigations and demands as a result of poor service delivery
• non payment of claims and increasing backlog of unprocessed claims
• backlogs in the issuing of Letters of Good Standing
N ON O
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RMASystems
Pilot
- This is a systems approach to addressing
organisational challenges
- A requirement for this approach is that the organisation
must be mature and stable eg. SARS
- If successful, it will address the claims systems problems
- However, it will not address the people issues, process challenges,
organisational problems, change management etc.
- This is again a silo approach to addressing organisational problems
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Lessons learnt from previous systems implementation :
- Reliance that system will fix all problems
- Over reliance on service provider
- No internal technical skills
- No proficient project management component
- Super users provided training to all users
- Change management was lacking
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Scenario 1 – “Limping along”
Continue in the current manner oblivious of the outcry
for improvement and efficient services. Doing what you
can do under the circumstances.
Scenario 2 – “Is this the best?”
Some efficiencies and optimisation is visible, but there
is much more to do. Addressing issues in a silo
manner that might improve one area, but will not
address others. Also not being aware that the
improvement in one area could compromise other
areas eg. implementing a system, but the people to
use it are so dissatisfied with the organisation, they
jeopardise progress.
Scenario 3 – “You can’t do it, let
someone else try”
No improvements have been noted, several failed
attempts. Allow someone else with different ideas and
views to try and turn this around and optimise the way
things are done.
Scenario 4 – “Catch the Gautrain”
A total organisational turnaround has occurred.
Services have improved and are accessible through
various channels for all citizens, at their convenience.
All key business elements are functioning well together
ie. people, processes, systems, finances etc.
ON TRACK, ON TIME, FAST AND EFFICIENT
THE NEED FOR AN ORGANISATIONAL TURNAROUND STRATEGY- Drop the silo based approach to addressing the CF problems
- Adopt a holistic approach to the dysfunctional organisation
- Understand that certain elements impact on each other eg. people and processes. Addressing one element will not automatically fix the others.
- Address the fundamental problems
- Understand the underlying problems (forensic) and address these and not the symptoms
- Requires both internal and external skills and expertise
- Will ensure that all resources are utilised optimally going forward
- Is a long term process, but also ensures long term sustainability and efficiency
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CFTURNAROUND
Organisational Strategy
Organisational structure
People, values and culture
Business Processes and Policies
Business Operating Model
Performance management and
FrameworkFraud and risk Management
Skills assessment and planning
Revenue and Debt management
IT Strategy
Leadership
Change Management
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PROJECT TEAMProject team setup and involved in :
-drafting a remedial plan
-developing strategies and interventions to improve operations
-drafting and review of specifications of the forensic audit and turnaround strategy
- drafting a governance document for setup, functioning and management of
a programme office
NEXT STEPS
- Implement programme office – July 2013
MEDICAL BACKLOG PROJECT
-To address medical invoice processing backlog
-Timeframe : January – June 2013
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Claim Invoices
Processed
528 193
Claim LinesProcessed
1 441 175
Invoices Approved for
payments
410 757
Benefits paid
R538 million
Value of invoices rejected
R124,2million
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CLAIMS REJECTED - REASONS
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CLAIMS REGISTRATION BACKLOG PROJECT
-To address backlog of claims to be registered
-Additional resources used in the project team
-Focussed attention by project manager and supervisor and regular reporting
-Current claims system utilised to address the backlog
January 2013
Starting balance of
claims unregistered
240 092
May 2013
Registration Backlog
addressed
*** While the registration backlog has been addressed, the backlog shifts
to the next link in the process chain – which highlights the need for a
holistic approach to addressing the Fund’s problems
IT SYSTEMS
- Electronic portal has been developed for employers and medical service
providers to register and submit claims.
NEXT STEPS
- Review, configuration and alignment of system – June 2013
- Testing of system – June 2013
- Sign-off and implementation – July 2013
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FORENSIC AUDIT AND TURNAROUND STRATEGY TENDERS
-Tenders published in Government Gazette and media
-Briefing sessions held with bidders
-Questions and Answers on tenders responded
-Evaluation of bids completed by independent evaluators for transparency and
integrity purposes
NEXT STEPS
- Appoint service provider – June 2013
- Formalise programme office – June 2013
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STAKEHOLDER ENGAGEMENTS
Briefing sessions with external stakeholders held including medical service
providers and business associations
Engagements with oversight structures held including Public Protector and
Auditor-General
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Service
People
Process
Systems
Finances
Leadership
Turnaround will ensure that all key business elements are addressed and come together towards a transformed Compensation Fund 28
Where all the pieces fit together.
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