Is SASSA eating the poor?

1 December 2016

On 23 November 2016, Parliament’s Standing Committee on Public Accounts (SCOPA) in the National Assembly called the Minister of Social Development, the Auditor-General and members of the Hawks, together with the South African Social Security Agency (SASSA), to a hearing on the weighty matter of irregular, fruitless and wasteful expenditure.

A close reading of the minutes of the Committee attest to an Agency befuddled and fiddling while millions of South Africans are drawn deeper into poverty. The patience of the Portfolio Committee was severely tested by playing sleuth in the absence of comprehensive responses and the total absence of institutional accountability, this despite the Committee having provided SASSA with a list of key questions prior to the hearing.

Rudimentary questions by Committee members were mostly evaded by blaming predecessors who were no longer with the Agency and who had left under a cloud. This led to Committee members asking the current SASSA CEO and CFO in exasperation “if they were asleep on the job” and, later in the proceedings, if they had “dropped the ball”. This is a severe indictment on the key office bearers of an Agency with a mandate “to ensure the provision of comprehensive social security services against vulnerability and poverty within the constitutional and legislative framework”. 

The extract below from SASSA’s latest Annual Report outlines a value statement that is at odds with its practice. It states that SASSA, as a Section 3A public entity in terms of the Public Finance Management Act (PFMA), subscribes to those values that promote democracy, redress, social cohesion and a culture of respect for human rights, underpinned by the following values: transparency, equity, integrity, confidentiality and a consumer-centric approach.     

The contradictions, controversies and corruption that have dogged SASSA are well documented and judging from the 24 November 2016 SCOPA meeting, these continue unabated. Key amongst this was the two-year long court battle between AllPay (losing bidder to Cash Paymaster Services for distribution of social grants) and SASSA. The Constitutional Court’s decision to set aside the R10 billion contract and force SASSA’s hand will hopefully be a valuable lesson to ensure state tenders are conducted in a procedurally fair and transparent manner. This judgment compels SASSA to implement a new tender process for the payment of social grants which, according to sources, may include an in-house payment plan to almost 17 million people per month.

For a country with low growth prospects in the foreseeable future, high underemployment and unemployment rates, an education system held ransom by a teacher union and an over-subscribed health care system, a spend of 3% of GDP on social assistance, or a rand value of almost R128 billion in the 2015/16 financial year, is a staggering figure. Net beneficiaries of the social grant system were at last count standing at 16 991 634 people, and traverse the following categories of grants:

1. Care Dependency Grant

2. Child Support Grant

3. Disability Grant

4. Foster Care Grant

5. Grants-in-aid

6. Grants for Older Persons

7. Social Relief of Distress

8. War Veteran’s Grant

9. Running Empty

For an organisation vested with the mammoth task of addressing the needs of the poorest and most desperate amongst us, the colossal figures that are attributed to irregular expenditure and overspend - amounting to almost a billion rand for 2015/16 - are wholly inexcusable. While some amounts tabled at the SCOPA meeting relate to operational requirements, the Committee took issue with poor processes followed, tender irregularities and heavy reliance on external consultants - internal capacity notwithstanding.

Figures tabled for clarification at the SCOPA meeting included reference to the R315 million payment to Cash Paymaster Services contract; R414 million for physical security; R233 million for the lease of offices with ANC member John Block’s company Trifecta/Delta Office Leases; R75 million for use of SAB&T (consultants to provide audit services) and R20 million in other irregular expenditure. Additionally, the Committee demanded answers for a loss of R4.4 million (damaged vehicles); R1.2 million (Mikondzo event - planned event for the Minister who failed to show up as she was “deployed’’ by the President - scant details provided on the nature of the deployment) and R3.5 million (no details provided). Included in the misspent, overspent and irregular funds noted above is an amount of R4.5 million for the security of the Minister of Social Services who went to Brazil to visit drug mules imprisoned there. Why a social security agency was billed for provision of security and not the South African Police Services or the Ministry of Intelligence is yet to be addressed.    

Corruption, fraud, delinquency, procedural obfuscation, existence of criminal syndicates working hand in glove with SASSA employees and unaccounted for losses, were all raised in the Committee meeting. Responses from SASSA’s CEO and CFO were hopelessly inadequate, other than a vague reference to providing better responses in a week.

In sum, losses incurred, all out of the public purse, attest to a state of deep crisis and the problems with SASSA’s lack of accountability mirror that of many other state institutions, where the corrosive effects of corruption and mismanagement continue to whittle away at the national heart. A national heart that rejoiced at the dawn of democracy in expectation of a country that would be better for all its citizens and where the narrative and values of the Constitution would prevail, and not that of state capture and corruption.

By Zohra Dawood, Director: Centre for Unity in Diversity, 1 December 2016