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Compensation Fund (CF) to assess its core business


The Compensation Fund, a public entity of the Department of Labour will be embarking on an intensive exercise to review its functional model to establish the most effective way of rendering its pensions fund, medical aid and insurance functions.


Acting Commissioner Vuyo Mafata said the exercise is expected to be concluded by early 2017. He said the outcome of the assessment exercise would give a proper gauge on the efficacy of the business and enable the organisation to efficiently deploy its resources.


“The key purpose of the assessment is to ascertain the core business of the Fund. The terms of reference of the exercise are being finalised,” Mafata said.


The Compensation Fund manages the Compensation for Occupational Injuries and Diseases Act (Coida) Act (No. 130 of 1993 ) – which provides for compensation for disablement caused by occupational injuries or diseases sustained or contracted by employees in the course of their employment, or for death resulting from such injuries or diseases; and to provide for matters connected therewith.


An upbeat Mafata, the former Chief Financial Officer (CFO) of the Unemployment Insurance Fund (UIF), derives solace from the fact that: “the CF is financially healthy to deliver on its services to clients”.


Mafata said the issues of concern on the financial side relate to matters raised by the office of the Auditor General, that have resulted in negative audit outcomes over the years. He said the Fund was working at full steam to deal with these financial and performance information matters raised by the Auditor General. He said the Fund was also addressing the issue of lack of capacity in its financial management division .


Whilst the process of addressing the service delivery bottlenecks is underway: “we are mindful also that we have an organisation to run, that we do not shy away from our obligation as an organisation to pay claims and invoices on time”. 


The target is to pay clients within 30 days, and the matter is receiving urgent attention at high level.


“We have introduced Umehluko to deal with efficiency issues. We are close to 100% electronic-based claims platform. Although we are still getting reports sent manually. Indeed, there are also teething problems with Umehluko there and there. However, we are dealing with those issues. One of the benefits of Umehluko is that efficiency is improved and the issue of fraud is being eliminated,” Mafata said.


The Umehluko System – is an integrated claims management system that is internet based. The systems allows for clients (employers, medical practitioners) to submit electronically their medical invoices; reduction in the submission of paper forms and medical invoices; saves costs and time; and leads to improved turnaround time for claims processing.


According to Mafata the CF is: “one of the biggest Medical aid of some sort, but has very few medical professionals in its employment”.


“We are looking at bringing between 50-60 medical practitioners including Doctors and nurses on board. We will bring in these people to help deal with faster adjudication and processing of claims,” Mafata said.


Mafata said going forward the four strategic pillars of focus will be on:


  • Financial management challenges


  • Service delivery challenges  - paying claims on time


  • Administrative challenges - to address operational efficiencies; and


  • Human resources - to deal with capacity and skills shortage.


Whilst Mafata is optimistic about the future, he cautions of undue short term expectations and results. He said some tangible results could be immediately seen in the claims area, however in the other areas results are two to three years down the line.


“We have been treating cracks instead of focusing on root causes of the challenges. Now the focus is on the core causes of problems. The CF has deep-rooted problems and this does not require a magic wand,” he argued.


He also announced that Decentralisation – a reorganisation process to devolve the provision of CF’s services/activities from its head office in Pretoria into the provinces – was almost complete.


Mafata said the CF operates in an environment in which it was exposed to fraud, and thus has to always remain vigilant to counter the scourge. 


He said it was unfortunate that some doctors were turning away CF’s clients. He urged medical practitioners to work with the Fund in finding a lasting solution to the challenges that the Compensation Fund faces. It is in the best interest of both the Fund and the medical service providers  that we make the Compensation Fund an efficient and effective organisation. 


Issued by Department of Labour Communication Directorate:

Mokgadi Pela

Acting Chief Director: Communication 

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