Concourt extends CPS’s contract for one year

The Constitutional Court in its judgment in the SA Social Security Agency (Sassa) saga this morning ruled that Cash Paymaster Services (CPS) should continue to pay grants for 12 months from April 1 to ensure that 17 million vulnerable beneficiaries continue to get their payments.

Justice Johan Froneman was scathing in his criticism of Sassa and Social Development Minister Bathabile Dlamini for creating an unnecessary crisis that has caused a contract declared invalid in 2013 to be continued.

He listed a number of conditions, including major oversight of how the contract would run for the next year.

CPS has faced criticism for illegally making deductions from beneficiary accounts, so the court wants the company to be audited and provide detailed financial statements. It was ordered by the court not to continue with any such illegal activities.

Dlamini was also asked to give reasons in an affidavit before the end of March for why she should not be held personally liable for the legal costs of this case since she had failed in her primary role as a minister, leading to this unnecessary legal action.

On Wednesday the court heard an urgent application by the Black Sash Trust, a human rights advocacy group representing social grants beneficiaries, which wants the court to resume its supervisory role over the payment of grants.

Sassa’s CPS contract, despite being declared illegal, stayed in place because the court in 2014 suspended its order to avoid any disruptions in the payment of grants to millions of citizens dependent on government’s social assistance.

The court had asked the grants agency to go to tender for a new contractor. However, after citing so-called “market failures”, in November 2015 Sassa told the court it would take over the payment of grants through an in-house payment system when CPS’s contract expires at the end of the month.

In Wednesday’s court proceedings, the superior court was particularly scathing of the conduct of Dlamini and Sassa officials, suggesting “absolute incompetence” over the failure to secure a new contractor to pay grants as the deadline looms for the expiry of CPS’s contract without any plan in place on how 17 million grants will be dispensed come April 1.

A task team of Cabinet ministers also rejected a proposal to extend Sassa’s contract with CPS without the Concourt giving its approval for the extension of the contract without following open tender processes.

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