With the mammoth task of distributing R10-billion a month in social grants to some 17-million poor and vulnerable South Africans, the South African Social Security Agency (SASSA) dedicated only one paragraph to the vital programme in its 2015/16 Annual Report. And while SASSA has no prior experience in distributing grants, Dr Wiseman Magasela, SASSA’s Acting Director General of Research and Policy Development, has assured Parliament's committee on social development that SASSA “would not let South Africans down”. Not everyone is convinced though, but on November 11 SASSA will have to prove it is ready to roll in less than six months. By MARIANNE THAMM.
Behind the long queues that snake outside SASSA pay points when monthly grants are disbursed to the country’s most vulnerable citizens is what appears to be a relatively straightforward procedure. The grants, paid to over 17-million South Africans, are one of the country’s democratic-era real successes and have served as a buffer, albeit an increasingly flimsy one, between complete penury and destitution.
It is vital then that the process works.
Each month Treasury deposits about R10-billion into an interest-bearing Nedbank Trust account. Since 2012 government has outsourced the payment of social grants and so, about three days after Treasury has transferred the money, Cash Paymaster Services (CPS), a subsidiary of Net1 which is listed on the Johannesburg and Nasdaq stock exchanges, goes about distributing these vital grants. The beneficiary accounts are held at Grindrod investment bank which offers “bespoke” financial services.
Grindrod says it pays “20.9-million grants to 9.77-million distinct cardholders amounting to R9.5-billion per month in close association with Cash Paymaster Services (CPS) who provide the card technology and manage the card programme on behalf of the government of South Africa.”
Grindrod notes that the new grant disbursement system “has resulted in the biggest banking-the-unbanked exercise in the history of South Africa, the biggest single enrolment project undertaken by MasterCard internationally, and the first MasterCard UEPS biometric-enabled debit card in World.”
And while CPS won the five-year tender in 2012, this was challenged, leading to a 2014 Constitutional Court ruling that it was invalid as it had been irregularly awarded. But the court ruled that CPS should, in the interim, continue to administer the system, and that the tender should be reissued by October 2015.
By the time October 2015 swung round SASSA said that it had not awarded a new tender as bids had been “non-responsive in mandatory administrative functionality”. However, opposition parties have claimed the SASSA explanation for extending the CPS tender was a “pretext” and a breach of the Constitutional Court ruling. Be that as it may, CPS will continue to benefit from the tender which will now expire in 2017, when SASSA plans to take over distribution of the grants itself.
The grant-issuing process has been mired in controversy for years. With such large sums of money involved, the fraudulent and the corrupt are bound to seek advantage, and they have. In fact, in the 2015/16 financial year SASSA recorded massive irregular expenditure of around R1-billion (some of it carried over from previous years).
In the overview provided in SASSA’s 2016/16 annual report presented to Parliament’s Social Development committee which sat on October 13, Acting CEO, Raphaahle Ramokgopa, dealt with what must be the biggest challenge facing SASSA and which potentially affects the lives of 17-million people, in one verbose paragraph.
“SASSA has continued in its quest to take responsibility for the full function, as contained in the Social Assistance Act of 2004, namely the administration, management and payment of social assistance. This is planned for implementation in four phases. Phase 0: was the advisory committee investigation that (took) place against the backdrop of the Cash Paymaster Services that ends in March 2017. Phase 1 will be led by the Work stream Leaders appointed with the concurrence of the Minister [Bathabile Dlamini] to guide the successful implementation of the recommendations of the Advisory Committee for the smooth transition of SASSA towards effectively and efficiently incorporating its payment role to the current in-house functions. Phase 2 and 3 entailing the transition and full roll-out respectively will be implemented during the period April 2017 to March 2019,” she writes.
All very well and fine, said DA MP Bridget Masango, but what about the detail, the nuts and bolts, even a PowerPoint of the “work streams” maybe and what these had accomplished with only six months to go?
Where was the plan for the project and could the portfolio committee have access to it, Masango continued. Was SASSA ready to take over the process and how many of the seven deliverables provided by the Constitutional Court had been implemented (some of which were meant to have been implemented this year)?
DA Shadow Deputy Minister of Social Development Lindy Wilson took it a step further and peppered SASSA representatives with further detailed questions.
Had nine-and-a-half-million cards been printed to replace those that would expire in May 2017? Was SASSA ready or would it be entering into another contract with Net 1 or another company? Had National Treasury received a budget or costing? Who was on the advisory committee and were they paid and if so how much? Who was on the work stream? Who were the work stream leaders, were they internal or external employees? Were they paid and how much?
There had been no reflection on any of these crucial questions in the budget report, Wilson added, and that this was “indicative that SASSA was nowhere ready to take over from 1 April 2017”.
Dr Wiseman Magasela, SASSA’s Acting Director General of Research and Policy Development, said that the constitutional requirement “of continuously reporting progress is up to date”. It was not, however, reflected anywhere in the annual report.
Magasela said the “matter” would be dealt with in detail at the next meeting on November 11 and SASSA was “confident that it will not let South Africans down even though it has not handled social grant payments before”.
Meanwhile, Minister Dlamini, who is President of the ANC Women’s League and a close ally of President Zuma’s, has suggested the appointment of Sizwe Shezi, a trustee of two of President Jacob Zuma’s trusts – The Friends of Jacob Zuma and The Jacob Zuma RDP Children’s Trust – to a SASSA panel that will “report directly to me”.
In a letter dated July 7, 2015 to former SASSA CEO Virginia Petersen (who left SASSA under a cloud when her contract expired) Minister Dlamini explains, “I have decided that in order to roll out implementation process diligently we need to retain the collective knowledge and institutional memory of the key members of the [advisory] committee. Given their knowledge and expertise these members will lead the work streams and work jointly with you and the SASSA executive management team so as to ensure that the various work streams are adequately resourced to execute their respective mandates in a speedy manner without any disruption, and to minimise delays in the implementation of the third recommendations.”
Minister Dlamini added that while the panel would account to her directly during the implementation, “I request that SASSA appoints hosts, provides resources and compensates the panel on behalf of the department, subject to the applicable laws.”
She continued that she envisaged that the implementation of the SASSA in-house payment system would take place over a three-year period [from 2015 when the letter was written] and “as such the aforesaid individuals must be appointed for the duration of that period. This process must be actioned with immediate effect so as to enable the panel to immediately assume the task at hand.”
According to City Press, Shezi’s company, The Man Investments, landed a stake in a R1.7-billion deal to buy a 22.95% stake in oil company Total SA. Shezi’s shareholding in the deal doubled shortly before it was signed. His company received shares worth around R122.4-million through a “generous loan” from the Public Investment Corporation. UDM leader Bantu Holomisa flagged the deal with the Public Protector’s office in January.
Minister Dlamini also appointed Patrick Monyeki, a former Home Affairs chief director of ICT and currently director of an ICT company that has, according to the DA, “courted controversy in relation to two government IT contacts”.
Monyeki allegedly played a role in a decision to award a contract for the distribution of SASSA grants to CPS and has also been implicated in an R378-million irregular tender award to the Department of Correctional Services.
Questions to the department with regard to SASSA’s readiness as well as the appointment of Shezi and Monyeki to the panel by the minister had not been answered at the time of writing.
The November 11 committee meeting where SASSA is due to unpack exactly what it has accomplished to date and just how ready it is to deliver to 17-million of the country’s poor and vulnerable will either affirm or disprove the DA’s assertion that SASSA is hopelessly unprepared for the task when the deadline arrives. Time will tell and waits for no man or woman. DM
Photo: The current SASSA card (Hipo.co.za)
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