Business

Ray Mahlaka
4 minute read
22 Nov 2017
12:53 pm

Sassa officials may face sanctions for social grants crisis

Ray Mahlaka

The panel of experts and Auditor-General calls for a National Treasury probe into the conduct of officials. Transgressors might face fines or imprisonment.

Picture: Supplied

Department of Social Development and South African Social Security Agency (Sassa) officials, who have been at the centre of the social grants fiasco that puts the livelihoods of the poor at risk, could face sanctions including fines or imprisonment of up to five years.

As the South African Post Office (Sapo) was given the nod on Tuesday to play a key role in the payment of social grants from April 1 2018, a panel of experts and the Auditor-General has upped the ante on making Sassa officials accountable for their role in the social grant crisis.

The investigation, which would be conducted by the National Treasury, would examine the conduct of officials involved in issuing contracts to service providers relating to the payment of social grants since 2016.

Treasury would also investigate the actions of officials that paved the way for the invalid contract of incumbent social grant distributor Cash Paymaster Services (CPS) to be extended to March 31 2018, by the Constitutional Court.

If the investigation finds there has been “malpractice” or mismanagement, Sassa and Department of Social Development officials may be prosecuted under Section 81, 83 or 86 of the Public Finance Management Act. These sections deal with the financial misconduct of officials in government departments and sanctions imposed for flouting them include fines or imprisonment of up to five years. The Constitutional Court has the power to give the investigation the green light.

The recommendation by the panel of experts is significant as it underscores that the social grants crisis and delays in signing a contract with another service provider to replace CPS might have been engineered and warrants an investigation.

The recommendation for the investigation of officials is contained in a second report by the panel of experts to the Constitutional Court.

The panel of experts – appointed by the court to oversee the process to phase out the CPS contract in the next five months – includes the Auditor-General Kimi Makwetu, Anthony Felet, Gill Marcus, Tim Masela, Heinz Weilert, Angela Bester, Werner Krull, Mavuso Msimang, Doris Tshepe, Mmamolatelo Mathekga and Barend Taute. They are supported by secretariat Marissa Bezuidenhout assisted by Walter Bhengu and Paklo Leung.

The panel has again raised the alarm that SA’s more than 15-million vulnerable social grant recipients might find themselves empty-handed due to Sassa’s self-imposed delays in phasing out CPS’s contract.

The panel has been scathing of Sassa’s conduct, warning that the absence of a comprehensive implementation plan after CPS’ contract expires jeopardises social grant payments.

Social Development Minister Bathabile Dlamini has emerged a key player in engineering the social grants crisis. Dlamini has been accused of trying to muscle out Sapo and pave the way for an external party to be responsible for social grant payments worth more than R130 billion annually.

Dlamini said Sapo could only provide one of the four required social grant payment services – mainly the provision of an integrated payment system. However, a damning letter by Treasury Director-General Dondo Mogojane noted that Sassa’s bid evaluation committee, which assessed Sapo’s tender proposal, should not have disqualified Sapo from the full contract. Mogojane also found that various assessments of Sapo by Sassa’s bid evaluation committee were “unfair” as the state-owned enterprise was not engaged on some of its short-comings.

A tentative social grants deal or an ‘Implementation Protocol’ was reached between Sassa and Sapo, said Jeff Radebe, who also heads the inter-ministerial committee (IMC) on social security. Among the functions Sapo will fulfill in the deal is the payment of grants and production of new Sassa cards but its collaboration with commercial banks has not been ruled out.

The deal is subject to ‘cost-effectiveness’ assessments, and a final agreement is expected to be announced in December.

The panel of experts has found that Sapo cannot distribute social grants in a cost-effective manner especially if has to sub-contract other players for functions it cannot fulfill. It has proposed ‘a cost-saving’ model for the payment of social grants through SA’s banking system as the bulk of social grant beneficiaries already own low-cost banking accounts.

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