Automated indigent management system supports indigent registers across the district

The design, development and implementation of an automated indigent management system now ensures registers of all municipalities in the district are accurate, credible, and aligned to policy writes Zama Soji, Key Expert for the Vuthela Public Finance Management Component.

Free basic municipal services are those provided at no charge by the government to poor households. Including water and electricity, these services are provided by municipalities and include a minimum amount of electricity, water and sanitation that is sufficient to cater for the basic needs of a poor household. 

The relief free basic services are only available to indigent households who qualify and meet the criteria as determined by municipal council on an annual basis. Municipalities subject all applications to means tests to determine whether households meet the criteria set by the municipality to qualify for indigent status. Municipalities are therefore expected to develop and maintain a credible register of poor households in their area of jurisdiction.

While municipalities are required to maintain a register of such households, the accuracy is still questionable. On an annual basis, municipalities experience difficulties when being audited by the office of the Auditor-General, where households benefit from free basic services, while they do not qualify.

Vuthela initiative

In supporting municipalities, the Vuthela iLembe LED Support Programme has implemented a project to design and develop an Automated Indigent Management System (AIMS) that will improve the indigent management status quo in the whole district and automate management of indigent registers; this is an upgrade from excel-based indigent registers. This has been done to ensure that registers of all municipalities in the district are accurate, credible and aligned to each municipality’s Indigent Management Policy and Indigent Management Framework.

Vuthela appointed Revenue and Utility Management Solutions (Pty) Ltd (RUMAS) to assist with the implementation of this project which was completed in less than six months.

The project included the design, development and implementation of an AIMS to support indigent registers across the district.

The study area consisted of the iLembe District Municipality and the Local Municipalities of KwaDukuza, Mandeni, Ndwedwe, and Maphumulo.

The iLembe District Municipality is the designated Water Services Authority in its area of jurisdiction and therefore responsible for water and sanitation services. It provides bulk and reticulation water services (water and sanitation) to most of the residents within the district.

The KwaDukuza and Mandeni Local Municipalities are authorised and licensed providers of electricity, while Ndwedwe and Maphumulo Local Municipalities are Eskom-licensed areas. Eskom also services some of the areas in Mandeni.

As part of the deliverables almost 26 000 indigent records have been assessed and vetted against external data sources.

Project Execution

The main objective was to upgrade from the manual excel-based indigent register, to an automated system thereby resulting in:

  • Accurate, and complete indigent
  • Transparent approval processes of indigent
  • Accurate reporting on indigent communities in each
  • Secured indigent management systems and
  • A centralised repository for indigent management information in the

As an added outcome it is envisaged that the process will promote collaboration and sharing of resources within the district.

The following services were delivered as part of the appointment:

  • Assessment of the project environment and tabling an inception report outlining status quo and project programme.
  • Strengthening of the institutional framework of the municipalities – conducted workshops and individual meetings to assess structures as well as detailed assessment of the indigent policies of each municipality.
  • Establishment of uniform processes across the district.
  • Design, development and implementation of a district-wide indigent management software solution.
  • Assessment of indigent data as well as vetting of data against external data sources.
  • Training of users and municipal officials through one-on-one, workshop training as well as assistance during indigent campaigns.
  • Maintenance and support of users of the system for all municipalities.

The project was executed in five distinct phases.

A major component of the strengthening of institutional framework phase was the review of the consolidated/standardised Indigent Policy. The policies were compared on 31 critical areas. It was found that it was not feasible to fully tightly align/consolidate all policies and therefore, the indigent management system was deployed at each site and aligned with each municipality’s policy. An indigent management system was developed to consolidate data from all five municipalities.

Key findings

  • The municipalities are unique in terms of their circumstances.
  • Grant start dates are mostly aligned (1 July) except for iLembe District Municipality whose grant start date is as soon as the application has been approved.
  • An important issue on which policies are silent is that commercial activity should not be conducted on-site.
  • All policies do not specify that a service provider to the municipality cannot apply for indigency.
  • Some policies do not specify that an employee of the municipality cannot apply for indigency – RUMAS suggests that the policy be reviewed to address this matter.
  • The validity period largely differs between municipalities – from three months to 24 months. It remains the prerogative of the municipality, however it does increase the administrative burden to re-assess indigents at short intervals.
  • Most of the applicants can apply throughout the year but approvals are ratified only once a year and the grant start date is only effective as from 1 July. RUMAS suggests that this be reviewed as applicants may wait as long as 11 months before grants are provided.

In terms of the data verification process, the table below provides an overview of the status of records on 17 July 2023 and at which stages they are in each municipality.

Status

KwaDukuza

iLembe

Mandeni

Ndwedwe

Maphumulo

Totals

Approved

8 082

1 247

1 345

527

6 624

17 825

Cancelled

26

0

0

0

1

27

Declined

2 353

0

0

0

0

2 353

Deregistered

1 231

0

0

0

0

1 231

Expired

623

0

0

0

0

623

In-Process

2 951

807

44

0

2

3 804

Grand Total

15 266

2 056

1 389

527

6 627

25 865

Indigent module and system functionality

An overview of the functionality provided by the indigent management solution includes:

  • IndiReg is an automated online indigent management system for both urban and rural consumer bases.
  • The business solution has a robust Structured Query Language (SQL) database.
  • The system is a secure, independent, encrypted database accessible via the internet and various platforms i.e. desktop (via fixed line), cell phone, 3G.
  • The system enforces the relevant indigent policies.
  • The system has a configurable business process catering for all steps from the registration of indigent households through subsequent steps until the household has been approved/declined for receiving subsidy grants.
  • The solution makes provision for both online capturing and via handheld devices as well as manual capturing of data from job cards if the network/system is down.
  • Supporting documents can be scanned/uploaded when capturing on a desktop.
  • When capturing an indigent application on a mobile device, photos are automatically linked to the application.
  • The system keeps track of the status of each applicant from their first application through different cycles of indigency.
  • The appeal process functionality ensures that all applicants are treated equally and in accordance with legislation.
  • The solution has configurable templates for field inspection/verification job cards, acknowledgment letters, and approval/decline letters.
  • When configured, the system automatically sends instructions for field verification/inspections to handheld devices and receives data and photos taken in real-time.
  • The software has strict security measures in place linking people to roles and then to certain rights such as reports and tasks in the software.
  • The system caters for automated vetting against external data sources.
  • Real-time reports can be exported into other formats i.e., PDF, MS Excel, MS Word, CSV.

Recommendations

The following recommendations are offered:

Develop Application Programming Interface (APIs) for data interfaces between the Indigent MIS and financial systems

The current data exchange is via files on a secured SFTP site (Secure File Transfer Protocol is a network protocol for securely accessing, transferring and managing large files and sensitive data) with access to authorised individuals to import the data.

It is recommended that APIs be developed as this is more secure and does not need constant human intervention.

Review of Indigent Policies

It is suggested that each municipality reviews their policy in detail, taking due cognisance of recommendations provided.

Closer collaboration between the district and local municipalities regarding campaigns

The indigent register could benefit greatly from more collaboration between the District Municipality and the Local Municipalities.

Ensure that ID numbers of accountholders are always captured

During the execution of the assignment, it was discovered that the ID number field of an account holder was not mandatory in one of the financial systems. While there might be valid operational reasons, it is strongly recommended to always capture the ID numbers as it will affect the entire system. The external verification processes are also largely dependent on the correct ID numbers. Furthermore, without ID numbers in the financial system, information between the AIMS and the financial system cannot be correlated.

Consider shorter period between the indigent application and approval dates

As mentioned, except for the iLembe District Municipality, all grant start dates are on 1 July of each year. The implication of this is that an applicant (who is already needy) might have to wait 11 months (when applying in August) before receiving the much-needed grant, despite the fact that his/her debt might be written off at time of approval (which could be several months later). This is aggravated by the fact that credit control measures are not stopped on those who do apply for free basic services grants. RUMAS believes that this might demotivate applicants to apply.

Consider automated verification every 12 months instead of re-application

The KwaDukuza Council approved, in their latest Indigent Policy, clauses to the effect that indigents will be reviewed on an annual basis – either through physical audit or verification against external data sources. Should the requirements not be met, the subsidy for that consumer will be terminated with immediate effect. However, if requirements are still met, the grants will continue.

Continued maintenance and support beyond 30 June 2024

The maintenance and support services under the Vuthela contract span until the end of June 2024. Measures should be put in place to ensure support to the municipalities beyond this date.

Benefits to municipalities of implementing an Automated Indigent Register

The successful use of the system by municipalities will lead to a paperless application process, since this will be done using a sophisticated application called IndiReg, which is web-based and can be downloaded from the App store. Applicants will be verified using external platforms and only those who qualify as approved by the municipality will start to benefit. The system further consolidates all indigent beneficiaries’ information on a centralised repository to be able to generate a district-wide or a consolidated indigent register, which can be viewed per municipality and per ward. This will assist municipalities to budget accurately and also be in a position to prioritise local economic development projects that will respond to poor household needs and reduce the level of poverty and unemployment in the particular area.

Interview with Kesvin Govender, CEO of RUMAS

Spark spoke to Francois Stander of RUMAS service provider.

What were the project’s key successes?

The following are the key project successes achieved:

  • Closer collaboration between the district and local municipalities.
  • Creation of a proper indigent database instead of MS Excel spreadsheets.
  • Establishment of a credible district-wide indigent register.
  • Transparent approval processes of indigent applications.
  • Accurate reporting on indigent communities in each municipality.

An added outcome is that the process will promote collaboration and sharing of resources within the district.

What were the main challenges and obtstacles that had to be overcome?

The main challenges are outlined below:

  • Approval processes of indigent (especially timing thereof) is done differently in different municipalities – aligning the indigent management process to other processes within the municipality will take some time.
  • Finding the balance of attention/involvement of top management between indigent management and other managerial tasks – since the senior management seems to be overloaded with other tasks.
  • Institutional challenges – senior personnel acting in quite a number of positions as well as the fact that the positions are rotated tends to deflect attention and focus to the most pressing issues at that time.
  • Each municipality has its unique circumstances and challenges – therefore policies had to be carefully studied and the system had to be implemented at all municipalities.

What are the key learnings for the futrue application of such projects? 

The following key aspects, amongst others, are offered, based on the lessons learnt on the Vuthela project:

  • Balancing project initial objectives (set at procurement stage) with the status revealed during the inception analysis will always remain a factor to be reckoned with.
  • Although collaboration between the district and local municipalities could go a long way, it is preferable to have permanent joint structures at different levels to manage indigents across the municipalities.
  • A uniform approach should be followed in vetting data against external databases and this should all be aligned to national guidelines.

What are the benefits for indigent households?

In general, the following key benefits are the focus of indigent programmes:

  • Ensuring that the poor households have access to free basic services.
  • Transparent and uniform indigent processes across the district.
  • Fair vetting processes applied across the district.
  • Streamlined processes decrease waiting time on feedback on indigent applications and therefore benefits could be received quicker.

What are the benefits for municipalities?

The system benefits the municipalities in the following ways:

  • Minimises indigent registration fraud.
  • Maintains a database and cross-models it to external sources.
  • The system interfaces with a municipality’s financial system to determine whether or not an applicant has previously been registered in the system.
  • Reduces manual capturing of information by field workers.
  • Decreases waiting time on feedback on indigent applications.
  • Automates indigent approval processes, reducing unnecessary administration and leaving more time to support indigent households.
  • Effective management of indigent grant programmes.

How does this system contribute to addressing poverty?

The system functionality will contribute in the following ways:

  • Improved access to free basic services – the system is designed to ensure that the indigent households receive the necessary support and services they require.
  • Proper communication (the system has a built-in SMS message sub-module) ensures that all eligible households are aware of and can access the benefits.
  • Streamlined and automated processes decrease waiting time before approval of applications and therefore free basic services benefits could be received quicker.
  • The system records qualifications and experience of household members which could assist in identifying resources for future projects, thereby addressing poverty in another way.
  • Beneficiaries/new applications on the indigent register are authenticated in line with the current indigent policies – erroneous indigents will be identified and removed from the municipality’s existing indigent register thereby leaving funds for the really needy.

What is the overall relevance of the project for other municipalities?

Indigent management is required by law and therefore not discretionary. In addition, the following important aspects serve as further motivation:

  • National reporting will be aligned and uniform.
  • District-wide indigent management uniformity.
  • The district is a water services provider whereas the local municipalities provide the rest of the services, except in some cases with Eskom providing electricity. Cost savings are realised i.e. due to no need to do vetting of data of an applicant on his/her application at the different utility service providers. In addition, cost savings will be realised on administrative tasks and other verification activities.
  • Ensuring no duplicate indigent applications in a district.