Department of Labour implements AXS-One solution

An analysis of 280,000 payrolls per month representing 6-8 million records and rising to 25 million during 2001; approximately 10 million transactions per month currently; a database that will contain information on some 15-20 million individuals; and an income of about R1.5 billion per annum. These are just a few of the statistics surrounding the Unemployment Insurance application running within the department of Labour in Pretoria using AXSPoint(tm) Solutions.

The Government`s Unemployment Insurance Fund to which both employees and employers contribute, is not just about providing benefits for unemployed individuals. It is also concerned with the payments of maternity benefits, illness benefits, adoption benefits and survivors benefits to relevant beneficiaries in South Africa.

Every employer in the country has to deduct 0.1% of the employee`s salary and match this contribution from the organisation itself, i.e. the employer also pays in 0.1%, for input to the Unemployment Insurance Fund. Due to legislation changes, these payments will be debited from all workers regardless of their wage or salary levels, thus escalating this figure to about 25 million records per month.

The employer submits a file to AXSPoint Fusion software, with a pre-determined layout that has been accepted by both the Department and the Payroll Author`s Group, with the employee`s contribution. Each employee has a record in the AXSPoint software, so that each contribution can be tracked. This allows the system, to identify when an employee leaves one company, starts another, and any period in between when he/she has not worked, that could turn into a claim. AXSPoint Fusion software then feeds Accounts Receivable with the total amount of all employees for each employer, raises an invoice for the employer, that is then e-mailed back to him. (This process is called the employer declaration). As all the history is stored, the UI can now access the information and create trend information by Industry and by Sector.

When the employer pays the invoice, the record is picked up from the bank statements, which are also in AXSPoint Fusion software, an automatic bank reconciliation is initiated, and all records are fed back into the financial systems, that in turn updates the General Ledger.

An Accounts Payable process is initiated with the employee making a claim against the UIF that is handled by an automated process using AXSPoint rules. The claimant`s ID number is validated against the Home Affairs data base and a whole set of rules and conditions are applied to the claim, including a credit calculation to see if he is entitled to any benefits. The credit calculation is done in workflow using the employee master record held in AXSPoint software. If the claim is valid, it is paid out after 28 days. An employee is able to return after "each set" of 28 days (maximum 3 times) to collect his benefit and prove that he is still unemployed. Thereafter the claimant must work and contribute for a further 13 consecutive weeks before he is able to claim unemployment benefits again. These transactions are entered against his individual master file in AXSPoint Central software, with his full history being able to be reviewed for future claims on an on-line basis.

"The completion of this project in some six months, excluding the rollout to the Regions, is a remarkable achievement," commented Shakes Mkonto, Unemployment Insurance Commissioner. " The team from AXS-One and African Legend Technologies have worked very well together with our own staff to enable us to implement this new systems that will enable us to become significantly more efficient, and potentially allowing us to reap some 30-40% cost savings within the department. It will also eliminate fraudulent claims, for instance, from individuals who are working but drawing from the fund simultaneously and from ghost claims, i.e. from non-extant individuals."

The previous system at UIF was characterised by many shortcomings that have been addressed by this new system. Examples of the new business benefits include:

• The identification of each individual within the labour market. Currently individuals are only identified when a claim is made.

• The ability to better project liability claims against the fund, and thus increases visibility on such things as the financial viability of the Fund.

• The authentication declaration from employers, that was previously not possible. Under-declaration by employers was common place.

• The speed of processing a claim, which can now be accomplished significantly faster than before

• The creation of relevant creditors provisions, not previously possible

• The ability to create " virtual UIF" offices for payment purposes, and

• The ability to minimise "fraudulent" claims, since the new system declaration identifies "reasons" for changes re individuals.

Consequently, from a business economic trend analysis viewpoint, the UI will be able to determine contributions and correspondingly track claims by industry sector and make valuable analyses in declining areas. Additionally, it will enable economic revenue/claims analyses to highlight needs and growth on a South African macro economic basis, together with an associated full regional history. Thus, employment history will be able to be analysed by category for the UI in order to indicate growth trends within different employment categories.

"The software from AXS-One has proved itself easy to implement, and has created a new base systems platform upon which we are able to build and incorporate enhancements as additional system requirement are identified. We look forward to the next phase, the rollout to the regions using the AXS-Desk product, which should be underway in the next few weeks," continued Mkhonto.