Since the Acting Commissioner was appointed in February 2005, it became apparent that at the same time as maintaining day to day operations it was necessary to conduct extensive investigations for the purpose of discovery.

The results of this have shown that a number of interventions are required to deal with existing shortfalls as well as to make the necessary long term interventions, a number of which have already been initiated.

The categories of work in which extensive investigations have taken place and activities identified from an operational perspective, are:

1. Claims processing; turnaround times and backlogs to be reduced. Actions taken:

1.1 Identification of more exact status of claims and extent of backlogs

1.2 Establishment of independent "Millennium" team to deal with backlogs from the year 2000 and before.

1.3 Establishment of two dedicated teams to deal with backlogs between the year 2001 and 2003.

2. Office automation and electronic processing systems to be upgraded to eliminate manual paper based processing and to provide objective management information.

Actions taken:

2.1 Decision taken to bring the whole organization (excluding Medical section) onto automated electronic system by 22 August 2005. This has resulted in extensive system overhauls and modifications by Siemens in accordance with PPP requirements to bring the electronic system to a point where it can just meet the basic needs of the Organisation. It has taken 3 months to reach this target with ongoing structured interactions between Business and Information Technology. Further interventions are being planned in accordance with Compensation Fund requirements and Department of Labour strategy.

2.2 Investigations have taken place to locate a more suitable computerized "off-the-shelf system for the Medical Section from a number of other service providers. These have yielded positive results which are currently being evaluated.

3. Workflow Re-engineering and integration of processes to reduce the number of hand-overs of work and to promote accountability required.

Actions taken:

3.1 Dedicated Adjudication section
established in May 2005 to deal with the backlog in assessing Fund's acceptance and therefore liability for claims in accordance with statutory requirements.

This has shown excellent results. Of the approximately 20 000 new claims per month being received, close to 8 000 claims per month were being adjudicated until May. After the establishment of the dedicated section, between 20 000 to 30 000 claims per month are being adjudicated, therefore keeping abreast of current claims as well as working into the backlog.

3.2 Re-engineering of workflow to pay Compensation claims more effectively. The Compensation section started using newly generated management information in September in order to focus on specific target areas to increase their capacity to pay compensation. This has resulted in increased payouts, eg. in August 2974 compensation awards were made and paid out, and in September this rose to 5247 awards and payments, a 43% increase in one month

3.3 A Pilot Project to test a new Scanning and Indexing system for the Organisation in a simulated environment is to be started in November. This will have implications for the receipt and control of mail and documents, the registration of new claims, as well as for processing in all sections.

3.4 A further Pilot will be introduced to test an "off-the-shelf" computerized system to pay medical and compensation claims. Negotiations are underway to reach agreement on the terms and implications.

4. Capacity building across a number of disciplines.

Actions taken:

As a result of investigations and subsequent discovery, a number of areas were identified where additional capacity is required to assist the sections in planning or redefining its current and future modus operandi. A number of Project Managers or individuals with specific skills have been interviewed with the intention of appointing them on fixed contracts with clear mandates. Some are already in place. The disciplines include

5. Re-engineering of Financial systems to meet requirements of Auditor General and to apply strict controls in line with the relevant legislation.


In February 2005, an Acting Commissioner was appointed pending the suspension and investigation of the existing Compensation Commissioner, in order to give effect to the requirements stipulated by the Compensation for Occupational Injuries and Diseases Act, no 130 of 1993.

As no specific vision, mission, or strategy existed in relation to the Compensation Fund as an entity of the Department of Labour, the Acting Commissioner facilitated a number of strategy planning sessions with the members of the Fund's Programme Management Committee. The strategy was subsequently presented to the Compensation Board on 17th August 2005, and after further refinements, was adopted.

A Business Plan Framework has been put into place to give effect to the strategy. However, it is not merely aimed at providing the service to its clients that is required in terms of COIDA, it is also premised on the fact that the Fund needs to redress a number of problems identified in previous reports commissioned by the Department of Labour during 2003, but which were not acted upon for a number of reasons. The delays in acting on recommendations have exacerbated the problem to the extent that serious backlogs in processing claims have developed. In addition, the interface between the electronic systems, claims processing and financial systems were not adequate, resulting in the qualification by the Auditor General of the Audit Report for the Financial year 2004 to 2005.

Although the reports identify problem areas and make a number of recommendations, they date back to 2003; two years prior to the Acting Commissioner being appointed. It was therefore decided that a process of investigation into specific areas was required to try to quantify the extent of the problems and to focus resources strategically.

The Business Plan Framework is developed and centred around a number of projects or initiatives designed to address the various shortcomings and requirements identified in the audit report commissioned by the Department of Labour in 2003, as well as the previous reports of the Auditor General


2.1 Backlog in claims processing - Quantifying and addressing this.

Historically, statistics have been produced partially through manual counts and partially through information generated by the computerized systems. It was decided that it was necessary to quantify the possible "backlog" as well as get a broad overview of the number and profile of claims received on a daily basis as well as the amount of time and resources required to deal with them.

A process was initiated through the formation of a Business Process Coordinating office to collate, synchronise and analyse the information available. This has yielded information which has given rise to a number of interventions aimed at handling new claims more effectively as well as deal with backlogs.

It is possible to generate information statistically from 1997, but the focus has been primarily to deal with claims between the year 2000 and the present, and then to work backwards from 2000 to deal with additional backlogs. The year by year number of claims received by the Fund since 2000 is as follows


Accepted Claims

Not Accepted Claims






























[PMG Note : Claims Received by Year not Included]

Note: The number of claims for 2005 appear to be less than previous years because they have only been calculated to end September, and exclude the last 3 months of 2005.

The following two tables show the average value of payments of medical payments per day, followed by the average value of payments of compensation per day. They are interesting from the perspective that they provide a baseline from which to evaluate existing and future business processes in terms of actual or perceived efficiencies, in relation to the number of claims.

[PMG Note :Graphs for Medical payments per day in Rands not Included]

[PMG Note : Graphs for Compensated payments per day in Rands not included]

The statistics which follow reflect statistics based on "claims". These could consist of the payment of any number of medical accounts or compensation payments or pension payments etc, depending on the nature and degree of injury sustained. It is not possible at this stage to accurately quantify how many "transactions" are logged against each claim, as the information technology system does not accommodate this. However, this will be available for new claims once a new system is introduced.

It is important to note that if a case is re-opened because it relates to an injury sustained even many years ago, it is logged against the initial claim, rather than being given a new claim reference number. For this reason it is also difficult to measure "backlogs" in the true sense of work which is the responsibility of the Fund to process and this has not been done.

One approach taken in terms of "measuring the backlog" is to look at claims which have been adjudicated and "accepted" in terms of liability by the Fund, and those which have not. Reports show that overall, there are 21% of

claims which have not been accepted or repudiated by the Fund between the year 2000 and September 2005. Unaccepted claims are as high as 49% for this year only, but in many instances, insufficient documentation or paperwork exists to enable the Fund to accept or repudiate these claims, and the onus is on the employer or employee to provide the information.

[PMG Note : Graphs for Percentage Accepted to Not Accepted Claims 2000to Sept 2006 not included]

[PMG Note : Graph for Not Accepted to Not Accepted Claims with a WCL2 and WCL4 not included]

However, further analysis shows that there are a number of cases where the basic documentation has been provided (WCL2 and WCL4) and these are now being passed on to the sections concerned to focus on as a matter of priority, instead of processing work in more random order of "arrival". The graph below illustrates the incidents of this.

2.2 Adjudication Team

A separate adjudication team has been established in order to focus more specifically on the process required to determine if an accident complies with the criteria outlined in the Act and establishing the liability or otherwise of the Fund to cover medical expenses and compensate the claimant. The objective was to promote speedier access by claimants to the benefits they are entitled to.

A two-pronged approach was adopted and has shown dramatic improvements to the Adjudication statistics. Before the introduction of the Adjudication team, approximately 8 000 claims per month were accepted. After the introduction of the new adjudication team and system, the figures increased to over 25 000 for July and approximately 19 000 for August.

(The numbers dropped in the last week of August because of problems with the electronic processing systems). September was a record month, when 37 000 claims were adjudicated, and 25 000 claims accepted.

Simultaneously, the percentage of claims which were accepted by the Fund in relation to the numbers worked on has risen from approximately 30% to the current 76%. (This is because fewer claims with incomplete information are forwarded to the adjudication team.)

As the Fund receives approximately 1200 new claims per day, the adjudication team needs to process 25 000 claims per month to keep abreast of new work. Anything over and above 25 000 claims will assist in reducing the backlog.

2.3 "Millennium" Backlog team

A team of 16 contract workers have been established in a separate facility to process and finalise backlog claims in which the accident was reported during the year 2000 or before.

Since 15th August they are responsible for processing, making payments and finalizing 9115 outstanding compensation claims dating to the year 2000. Once the team has completed processing outstanding claims from the year 2000, it will start on investigating outstanding claims from 1999 and before.

Additional teams have been identified to work on outstanding compensation claims during the years 2001-2002 and 2003-2004. Decisions will be made on whether to increase the capacity of the Millennium Backlog team to handle all of this work or not.

2.4n Office Automation and MIS (Management Information and Statistics)

Having established the pitfalls of operating partially manually as well as partially electronically, an initiative was taken to start the process of aligning the IT system to the defined business requirements, focussing specifically on the date for implementation of 22nd August, when it was intended that most of the Fund adopt the automated processing of claims. It was also obvious that comprehensive information covering all aspects of the business would only be available when the existing electronic processing systems (FYI, FDI, eClaims and AxsONE) are stabilized and synchronized.

The initiative to make the necessary changes was not implemented as successfully as we would have liked under the auspices of Siemens Business Systems by 22 August, despite the fact that they were consulted in advance over the delivery deadline. However, the Fund can report that as of end October 2005, Siemens Business Systems have worked on a more cooperative basis with the Business, and we are slowly reaching the point where stabilisation to the stage of "Ground Zero" is being reached.

Additional benefits derived by moving to automation are:

One example of essential management information which is not able to be evaluated relates to the initial set-up of the system, where all information is currently linked to a "claim" rather than a "transaction". One claim can consist of one transaction, eg. one visit to a general physician, or it could consist of many transactions, eg. blood tests, X-rays, doctor and specialist visits, hospitalization, compensation for being away from work for a period of time, etc.

Investigations into alternative off-the-shelf computerised systems with minimum customisation are taking place. These will be weighed up against the prospect of "re-writing" the existing systems or customising alternative systems which may be utilised by the Department of Labour as a whole.

2.5 Re-engineering of workflows and processes

The Pilot Projects referred to will cover the following spectrum: