Official reply: 27/05/2011

NATIONAL ASSEMBLY

QUESTION 152/2011

FOR WRITTEN REPLY

Date of publication on internal question paper: 10 February 2011

Internal question paper no: 1

Mrs S P Kopane (DA) to ask the Minister of Social Development:

(1) (a) What was the total amount of money lost by the SA Social Security Agency (SASSA) as a result of social grant fraud since its establishment, (b) what is the breakdown of this amount on a year by year basis, (c) how many cases of social grant fraud has SASSA been informed of since its establishment, (d) what is the breakdown of this number of cases on a year by year basis and (e) what steps have been taken by SASSA to prevent social grant fraud in the 2011-2012 financial year;

(2) whether any cases of social grant fraud have been brought before the courts; if not, why not; if so, (a) how many and (b) how many resulted in convictions;

(3) whether SASSA has any plans in place to ensure that all such monies are recovered; if not, why not; if so, (a) how (i) does SASSA intend to ensure that the monies are paid back, (ii) much of this money is still due to be paid back to SASSA and (iii) much money has already been paid back to SASSA and (b) what are the further relevant details?                                              NW164E

REPLY:

(1)(a) During the financial years 2005 to 2011 a total amount of R238, 046, 903 was lost as a result of fraud and corruption. The amount relates to acknowledgements of debts (OAD) signed by persons who were found to have defrauded the social grants system since June 2005.

(b) Breakdown of losses on year by year basis:

(It should be noted that the financial year 2010/11 only includes statistics for the months April to December 2010, as the financial year has not closed yet at the posting time of the National Assembly question).

(c) SASSA has procured a total number of 21,817 cases of social grant fraud since its establishment.

(d) Breakdown of reported social grant fraud cases on a year by year basis:

(It should be noted that the financial year 2010/11 only includes statistics for the months April to December 2010, as the financial year has not closed yet at the posting time of the National Assembly question).

(e) SASSA has developed and is implementing a more comprehensive strategy to prevent social grant fraud in the 2011- 2012 financial year. The strategy focuses on improving the integrity of systems, processes and people. The key elements of the strategy include:

• Continuous interrogation of Socpen data to identify suspicious grants;
• life verification of beneficiaries to confirm their eligibility for social grants and their existence;
• a robust review and life certification process;
• taking corrective action where SASSA officials were involved in social grant fraud, and
• SASSA has strengthened its working relationships with its other strategic partners such as the Department of Home Affairs, law enforcement agencies, civil society and traditional leaders. The partnership has been useful in assisting SASSA to effectively identify, combat and prevent further social grant fraud.   

(2) Yes,

(a) A total of 17, 908 cases were brought before the courts between June 2005 and December 2010, and

(b) A total of 15,004 individuals were convicted of social grant fraud.

(3) Yes, plans are in place to ensure that all fraudulently paid monies are recovered.

(a)(i) Every individual found to have defrauded the social grant system is made to sign an acknowledgement of debt (OAD) to repay the fraudulently received grant with interest, at a rate of 15%.  The recovery is done through direct deposit into the SASSA account managed by the Special Investigations Unit (SIU). Once a debtor defaults, a letter of demand is issued and subsequently taken back to court in case a debtor still fails to effect payment. SASSA is, through the Office of the State Attorney, exploring the possibility of obtaining garnishee orders against all perpetrators of grant fraud. This will prevent defaults and guarantee the recovery of the fraudulently paid grants in cases of termination of service by the debtor, and

(ii) An amount of R214, 353, 437, which represents acknowledgements of debts, was still to be paid by 31 December 2010. This amount is being recovered on a monthly basis as per the individual acknowledgement of debt agreement with the respective beneficiaries, and 

(iii) A total of R85, 338, 430 was recovered by 31 December 2010.

(b) Interest on debts relating to fraudulent grants is charged at 15%, and a total of R61, 644, 965 is recoverable on the value of the OAD's as indicated in above.  The SIU pays the money recovered over to the Department of Social Development, who in turn pays over that amount to the National Treasury.  The money is therefore not being paid over to SASSA.

Issued by Parliament, May 30 2011

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