Black Sash Media Release
31 May 2017
The Black Sash condemns the scandalous profiteering by Cash Paymaster Services (CPS) during its invalid contract with SASSA for the period 1 April 2012 to 31 March 2017. CPS’ profits, of R1,1 billion before tax, was revealed in an audited statement filed in compliance with a Constitutional Court order made in the AllPay 2 judgment handed down in 2014.
The audited statement of expenses and income, signed off by KPMG, provides very little details of how so much profit was made from an unlawful contract. As per the SASSA contract CPS, a subsidiary of Net1, was paid R10 billion over the contract period of five years. However, only R8.9 billion is listed as income in CPS’ statement and not the full R10 billion. Why is this case? We are concerned that the full amount of income received may not be accounted for.
We note that the CPS KPMG audited statement excludes the revenue from the sale of airtime, electricity, loans and funeral policies sold to grant beneficiaries by CPS' sister companies in the Net1 fold. We believe these profits have been made off the back of the CPS SASSA contract and must also be accounted for.
Grant beneficiaries, the poorest of the poor, continue to be short changed when it comes to recourse and refunds. CPS and Net1 did not refund grant beneficiaries for any unauthorised, fraudulent and unlawful deductions between October 2016 and January 2017. Under the pretext that CPS and Net1 is conducting internal investigations outside of the SASSA dispute recourse system, many grant beneficiaries continue to wait indefinitely for refunds.
We question the effectiveness of the KPMG audit, particularly when the auditors themselves use very careful wording, such as “these are not the CPS statutory financial statements which are prepared in accordance with International Financial Reporting Standards and the Companies Act of South Africa.” This just begs the question: if KPMG did not audit CPS’ statutory financial statements, what did they audit?
It is obscene that CPS enjoys huge profits while social grant beneficiaries receive less and less of their social grant money through unauthorised. fraudulent deductions and unlawful, placing their very survival at risk. South Africa will remain one of the most unequal countries in the world, if companies such as CPS continue to profit at the expense of the poor.
The Black Sash is considering how to get these unlawful profits back into the hands of South Africans where it rightfully belongs.
Statement issued by the Black Sash, 31 May 2017
