The South African Social Security Agency (SASSA) presented its strategic plan and budget to the Committee. At the outset it noted that the global economic crisis came at a time when SASSA was in desperate need of money, and it was affected by the budget cuts. It had to stabilise the cash situation and at the same implement the new policy changes around the extension of the system, improve its services and finalise the age qualification processes. The Strategic Plan prioritised key issues that would be critical in taking its mandate forward. Service delivery would be improved, and measures were introduced to reduce turn around times for processing of applications, sometimes achieving turn around times of one day. SASSA expanded the reach of social grant services and now over 13 million South Africans received assistance benefits across the country; and services were taken closer to potential beneficiaries, especially to those in the rural areas, through and Integrated Community Registration Outreach Programme. SASSA had made significant headway in the fight against social grant fraud, which resulted in a saving of R180,9 million, and over 32 687 fraudulent grants were removed from the system in the current financial year only. It had started a partnership with the Special Investigations Unit, and R56 million was already collected from people who had been defrauding the system. SASSA recorded an unqualified audit opinion for 2008/09, but there were matters of emphasis and improvement was still needed, particularly in the area of supply chain management and asset management. Measures were being put in place to ensure that the issues raised under matters of emphasis were addressed as soon as possible. Improved systems integrity was being introduced, and systems would be aligned, so that when a person applied for a grant, other information would be recorded, such as fingerprinting. Staff were more strictly controlled through biometric access systems and clearer controls, including split of functions and systems that not only recorded details of who had dealt with matters, the time frames and the numbers, but also were able to analyse whether fraud had occurred. Research was needed to investigate the issue of cross border flows of people who were not South African citizens but who were still accessing grants. SASSA would be working with the Department of Home Affairs on this and other issues.
SASSA presented its financial statements. It noted that the surplus recorded in 2006/07 had fallen to a deficit in the next financial year. SASSA had incurred an overdraft of R800 million and had to repay this yearly. It planned to do this through a Cash Stabilisation Plan. Savings of R74 million per year must be achieved, and would be put to paying off the overdraft. This would be achieved by less spending, which was explained in detail. The main challenges were financial constraints that entailed reductions in new programmes, reducing outreach, halting infrastructure acquisition and filling of some posts. The high costs of administering social grants, the fact that SASSA was still sharing office accommodation with Department of Social Development, the need to ensure greater compliance to government prescripts, policies and procedures, and the need to curb fraud were also listed as challenges.
Members were appreciative of the presentation. They asked several questions how SASSA was dealing with matters of fraud and corruption, including what it was doing to ensure repayment of amounts defrauded, whether interest was charged on these amounts, the outcome of disciplinary matters, the numbers of corruption cases prosecuted and the amounts that were involved. Members also asked clarity around the new regulations for Child Support Grants, and noted that SASSA was waiting on the concurrence of the Minister of Finance before being able to bring the regulations into effect. The dates were clarified. Members were concerned about moneylenders who were targeting beneficiaries, and also asked for details on the volunteers at paypoints, and whether they were being paid stipends, or might be taken into employment. They also asked about the mobile trucks, and whether these would be put back into service, the filling of posts with permanent employees, the Social Relief of Distress grants, whether implementation was standardised across provinces, allegations that deductions were made, and the need for information dissemination.
South African Social Security Agency (SASSA) Budget and Strategic Plan
Mr Cocako Pakade, Acting Chief Executive Officer, South African Social Security Agency, SASSA, reminded Members that when SASSA presented its Annual Report last year, it became clear that SASSA had achieved quite a lot within a short space of time. However, it was not without challenges, not least that it found itself in financial difficulties, with the global economic crisis occurring at a time when it was already in desperate need of money, having been affected by the budget cuts. It had to stabilise the cash situation and at the same time improve the service, whilst also implementing the policy changes around the extension of the system, as well as finalising the age qualification process. The Strategic Plan that he would now present prioritised key issues critical in taking its mandate forward.
The main governing pieces of legislation for SASSA were the Constitution of South Africa, 1996,and the Social Assistance Act, 2004 and the Social Security Act, 2004.
SASSA’s vision was to provide comprehensive social security services that assisted people to become self-sufficient, and also to support those in need. Its mission was to manage quality social security services effectively and efficiently for eligible and potential beneficiaries. The key strategic objectives were to build a high performance institution that complied with good governance principles and to strive towards operational excellence, with service delivery improvement to the beneficiaries. SASSA supported values of social cohesion and families. It undertook to render services in a transparent way. It aimed to be equitable in service delivery, and to pursue integrity of its staff, confidentiality, and a customer care centred approach. It would, in the coming year, attempt to adhere closely to these plans, and ensure that staff followed the draft policies developed around its values.
Mr Pakade briefly reviewed past performance. Over the past four years SASSA initiated programmes to improve service delivery, which included measures to reduce turn around times for processing of applications. It achieved, on average, a decrease from 21 to 9 days for most regions, and in certain areas there were turn around times of one day. It expanded the reach of social grant services. Over 13 million South Africans across the country received assistance benefits. and services were taken closer to potential beneficiaries, especially to those in the rural areas, through the Integrated Community Registration Outreach Programme (ICROP).
Grants per annum were granted to 13.8 million people, with 9.3 million getting the Child Support Grant, followed by 2.5 million beneficiaries of Old Age grants.
Mr Pakade outlined that SASSA’s main focus, when it came to improving the quality of service, was on integration and standardisation of business processes; and investment in the development and acquisition of systems and infrastructure to enable it to improve access to social grants. That did not come cheap, and the roll out speed would also be influenced by the ability of funding. An exciting project was the automation of grant application processes, which was piloted in the Free State, with the hope that it be rolled over into other regions soon. He stressed that although the current financial situation did not allow allocation of adequate funds for the whole process now, SASSA would allow progressive rolling out to other districts in the Free State and other regions.
Mr Pakade said that there had been good progress in improving compliance with legislation and policies, including its own internal practices. There were still challenges in terms of compliance, but here SASSA would try to get people to understand the policies and comply with them. The Enterprise Resource Planning System was implemented, which would facilitate compliance to the Accrual basis of Accounting. It was a user-friendly system for entities that were reporting, for instance, according to the accrual accounting basis, as opposed to the current cash accounting that government had adopted. This would assist in publishing results that were meaningful and that took into account all the necessary assets and liabilities of SASSA and gave a picture of the net value of its assets.
SASSA also made a significant mark in the fight against social grant fraud, which resulted in a saving of R180,9 million. Over 32 687 fraudulent grants were removed from the system in the current financial year only. It started a partnership with the Special Investigating Unit (SIU) and R56 million was already collected from people who were defrauding the system.
SASSA recorded an unqualified audit opinion for 2008/09, but improvements were still necessary, particularly in the area of supply chain management and asset management. Measures were being put in place to ensure that the issues raised under matters of emphasis were addressed as soon as possible.
Mr Pakade then moved on to describe the priorities for the period 2010/11 – 2012/13. He said that the Customer Care Centred Benefits Administration and Management System essentially entailed that the focus was on the beneficiary. SASSA would endeavour to ensure that those who were eligible received grants, so the extension of Child Support to eighteen years would be a priority, as well as ensuring that the Old Age Grants were extended to all needy 60 year olds, both men and women. It would also ensure improved efficiencies in all that was done, and would escalate efforts to outreach to all areas that it had not previously managed to reach.
That was linked to improved systems integrity, ensuring roll out of Management Improvement Systems (MIS). The focus would be on the control side, with systems that would run parallel to each other, to ensure that when a person applied for a grant, other control measures were also included. He gave the example that they would simultaneously register the people on biometric systems that would take their fingerprints. More importantly, biometric access systems were in place for staff of SASSA who accessed the system, to ensure that these staff could not easily access sensitive programmes where they could manipulate information or create “ghost beneficiaries” in the system.
With regard to increased access to social security services in semi-rural and rural areas, SASSA was also looking at improving the way in which the people were paid, and promoting a safer method of payment, electronically, that would also ensure that people did not have to travel so far or stand in long queues. There were currently gaps in the payment model, especially when it came to data ownership and data integrity, and there was risk that SASSA’s service providers had the upper hand in terms of managing SASSA’s own business.
Mr Pakade then described the priorities in more depth.
Priority 1 was to achieve a Customer care centred benefits administration and management system. It was projected that the number of beneficiaries would increase from 13.6 million in 2010, to 16 million in 2013. The projected growth was largely due to the effects of the economic recession, the implementation of new policy and legislative reforms including the extension of the CSG and age equalisation. More people were applying for grants, because of those who had lost their jobs, and those who were never able to find work, despite falling into the category of young and economically viable people, and this applied particularly to the CSG.
SASSA was, as mentioned earlier, overhauling the payment system. It was discussing a new model with National Treasury (NT), which it believed would save the country a great deal of money. Last year it had saved more than R300 million, just by looking at the manner in which those contracts were originally designed in the provinces. SASSA still needed to engage the Committee and the community around the benefits of electronic forms of payment which would mean convenience to the client, reduced costs and reduced risks of abuse at pay points. It would also reduce fraud, corruption and leakage.
Priority 2 related to improved systems integrity. SASSA aimed to comply with the Generally Recognised Accounting Principles (GRAP), in terms of the Public Finance Management Act (PFMA). It aimed to reduce irregular expenditure: Policies and procedures in terms of supply chain management were in place, but people needed to understand what those policies meant and how they should be applied. In some instances there were non-compliance issues within the organisation because processes had not been followed, which led to the Auditor-General declaring expenditure to be irregular. He emphasised the difference between fruitless expenditure (something that created no worth) and irregular expenditure (spending for a particular purpose, but without using the correct procedures, which resulted in exposure of SASSA to risk). SASSA was likely to save costs over the medium term by implementation of a cash stabilisation strategy. The second largest portion of the budget went to personnel. In the immediate future, SASSA, in order to cut down on personnel costs, would have to retrench, and in view of the current situation in South Africa that was not an option. Therefore, SASSA was looking rather to create greater efficiencies in the payment system. Electronic payments meant that financial institutions were active participants in the process and assisted in managing the dormant accounts on a regular basis. This would be coupled with austerity measures to curtail expenditure.
SASSA had agreed with the Minister that most of the changes it wanted to implement would constitute re-engineering, and it would look overall at the organisational systems, processes and practices, including structures and staffing, in order to have an organisation that was efficient and that optimised the resources allocated for each function. SASSA was also looking at human capital reforms, to deal with issues of talent management retention strategies. The organisation was looking at implementing risk management strategies, integrity policy, a Fraud Reduction Strategy and monitoring, evaluation and reporting.
Mr Pakade described SASSA’s Priority 3 as increased access to social security services It would continue with ICROP and also ensure improved visibility of SASSA in remote areas. The development of its stakeholder management strategy would enable Church and Traditional leaders, as well as local district offices, to alert SASSA of instances of dire need, so that those currently falling through the cracks could be identified and brought into the system. A Customer Charter was developed, and SASSA would roll this out so that beneficiaries understood it well. There had been reports of monies being deducted before being paid to beneficiaries, and they should be aware of their rights. SASSA would continue with the Fraud Management Strategy, law enforcement agencies must get communities involved, and volunteers at pay points were identifying people who were attempting to target and defraud beneficiaries.
Research was needed to investigate the nature and extent of cross border flows of people accessing grants. There were concerns that people in some of the neighbouring countries, who were not South African citizens, were getting access to grants. SASSA would be working with the Department of Home Affairs (DHA) as to what measures could be put in place. Recent studies had identified the impact of social assistance on communities, how the funds were utilised, how they benefited communities, and a range of economic benefits that were core to communities because of that programme. SASSA would focus on those challenging imperatives.
A task team was formed looking at the issues of transformation of the Agency’s culture and enhanced people capabilities, issues of changed, management, of good government, risk management and others.
SASSA budget and financial plan for 2010 to 2013
Mr Mpho Mofokeng, Chief Financial Officer, SASSA, outlined the Financial Plan and described the financial challenges that SASSA was facing. He stated that in 2006/2007 there had been a surplus of R374 million. However, financial expenditure then increased, with the result that in 2008/09 there was a deficit of R390,5 million, and in 2009/10 a deficit of R401,7 million.
For the next three years, SASSA would need to pay off its overdraft of R800 million. It had instituted a Cash Stabilisation Plan. With effect from this financial year, R74 million would have to be saved from the allocation to pay back the overdraft. This saving would be achieved by spending less. He explained that to begin with, R5.6 billion was received from National Treasury. The largest portion was spent on personnel, being R1.5 billion, with a growth of 6% for the salary increases. There was money to expand the services for the Child Support as well as the Old Age grants, but there were not sufficient administrative resources to ensure implementation of this. However, there was a 0% growth in contractor payments, and no increase was expected from the current figures. This could result in savings under this heading. R74 million would have to be saved, out of the R2.7 billion, through negotiations on new contracts as well as the future payment model. Consultants, contractor and special services were also reduced from R125 million to R117 million. Other austerity measures included savings on telephone calls by staff.
He explained that the variance between the Agency’s allocations and the projected expenditure reflected the projected deficit in the 2009/10 financial year, which would be funded by savings from the allocations over the MTEF period. The projected expenditure for 2010/11 had not increased from the previous year, which implied that it did not have funds to embark on new projects and contracts, but would continue funding existing contracts and projects. That significantly impacted on the Strategic Plan. Some of the projects and service delivery improvements had to be deferred to the outer years of the MTEF period.
A significant portion of the allocations went towards funding the existing contracts for lease agreements, including security services, cleaning, municipal services, the SIU, disability medical assessment fees and reviews, and maintenance and repairs of vehicles, including running costs for the SASSA mobile trucks. A large amount also went on funding the ICT contracts, mainly with the State Information Technology Agency (SITA).
Mr Pakade highlighted some of the challenges. He assured Members that, despite these financial constraints, SASSA would still be working on projects. It was hoping that National Treasury would be supportive and find funding. NT understood the origins of the challenges, and was apparently satisfied with SASSA’s proposals for turnaround.
ICT connectivity and infrastructure posed challenges. Sufficient network coverage was critical. Proposals had also been put to NT in this regard, but Mr Pakade was not hopeful of a positive response, given the increasing demands and the economic recession. SASSA must therefore reprioritise and target those areas where there would be dire consequences if the ICT was not improved.
The major challenges were in regions where SASSA offices’ location might expose staff to operational health and safety issues. At some local offices, there was not sufficient space for beneficiaries to wait while the services were being processed. SASSA was still sharing offices with Department of Social Development in some provinces.
Filling of posts was another challenge. SASSA concentrated on areas where personnel made the most impact, which related to grant reviews, monitoring of healthcare, and direct service provision. Support services, however, could not be ignored.
Whilst it was hoped that the high cost of administering social grants could be lowered, it remained a challenge. If would be looking at alternative methods of payment; review of internal policies (regularising austerity measures); strengthening beneficiary maintenance; and benefit verification to minimise fraud. Non-compliance issues were another challenge. SASSA would take ongoing action against staff who were not behaving in a manner becoming of a public servant.
Mr Pakade concluded that the Strategic Plan had taken into consideration the key government priorities, Constitutional obligations, and attempted to do more with less resources. He said again that limited resources posed a huge risk for effective and efficient service delivery. SASSA endeavoured to collaborate with other organs of State to achieve all the planned outputs. It pledged to work with the Committee to gather more information and to create a better place for the vulnerable people of South Africa.
The Acting Chairperson noted two main issues, around the linkage with the DHA to research people from neighbouring countries accessing grants. She asked that SASSA give a breakdown of the provinces involved in fraudulent matters, as Members could try to assist if there were problems in their constituencies.
Mr Pakade responded that the cross-border flow issues arose in mainly Limpopo and Mpumalanga. He would provide the breakdown of fraud statistics by province, as well as the number of convictions obtained.
Ms H Malgas (ANC) commented that it was very important to praise SASSA and to affirm at least one of the achievements. Because of the ICROP programme beneficiaries would be told within a few hours when they could collect their money.
Mr Pakade noted he comment. He suggested that SASSA be invited to accompany Members on oversight visits to service points.
Mr Gerald Roberts, Regional Manager: Free State, SASSA expanded that Improved Grant Administration Processes (IGRAP) aimed to improve the effectiveness of grants to pay within one day. However, it was necessary to build in controls to prevent fraud. Control measures separated the functions from management information, and monitored every aspect of the grant administration process. Not only would a person be screened and receive a letter to confirm whether documents were obtained, but also the management information would record the productivity levels of the staff, who had dealt with the application, how many applications were dealt with, and the introduction of control measures. This was being run at Thabanchu. The intention was to roll it out to the rest of the Free State and then out to the rest of the country.
The Chairperson asked about the measures put in place to ensure the extension of Child Support grants to children over the age of fifteen years. She noted that there were different dates mentioned; the date of the draft regulation was 1 October, but another document that spoke to 1 December 1994 and referred to making application on 1 January. Apparently the systems had rejected some applications because of these dates. She enquired what was being done to ensure that the systems were aligned.
Mr Vusi Madonsela, Director General, Department of Social Development, clarified that the regional amendment to the regulation that was published indicated a date of 1 October 2004. That was predicated on a decision made by the budgeting committee in government, as to how much was available to extend the system, and how far it could go. The idea was that all children born since 1994 should be covered by the system. Those children who, whilst born in this time, became non-eligible for the grant under the former limits, should remain within the system, and could now apply for the grant to be reinstated under the new system in a few months time.
Mr Madonsela said that there were some challenges around the 1 October date, which had to do with the savings that SASSA would be able to make, coupled with the amount that SIU had managed to get back for repayment into the system. NT had agreed that the qualifying date could be pushed back as far back as 31 December 1993. This allowed those children born “under the democracy” to qualify for grants until they were eighteen and reached the legal age of majority.
The Social Assistance Act required, in all matters relating to money, that the Minister of Social Development must obtain the concurrence of the Minister of Finance before publishing regulations. At this stage the matter was with the Minister of Finance, and it was hoped that he would soon agree, so that the regulations would soon be able to be published and take effect. The confusion had arisen since many people were aware that the cut-off date of 31 December was to be used, but until the Regulations were published, this would not be effective.
Ms Malgas said this matter should be expedited.
Mr Madonsela said he could not promise to put pressure on the Minister of Finance but he would discuss the matter with the Director General of National Treasury, who would be asked to encourage the Minister to give his concurrence.
Mr Pakade also clarified that those applications that were received currently were noted by date; nobody would be penalised if they were considered only at a later stage.
He noted that SASSA did have systems to register new children on to the extended system. However, additional costs were incurred in the form of drawing up strategies, communications campaigns to make people aware of their rights, and outreach programmes, in conjunction with DHA, to register children. This might impact on the budget. When there were projected savings the priority was to direct the savings to service delivery imperatives.
Ms H Lamoela (DA) congratulated SASSA for having implemented what it needed to, and the very special efforts put into rural areas, noting that the project programmes had elevated rural people in her areas. She noted that the areas being serviced by SASSA were widespread.
Ms Lamoela was extremely worried about the serious financial difficulties facing SASSA, especially because beneficiaries were reliant on SASSA, and she asked how the extension of children’s grants up to eighteen and the extension of old age pensions would impact on the budget.
Mr Pakade said he shared and noted these concerns. It was a priority for SASSA to stabilise the situation as soon as possible. Unfortunately SASSA had no choice other than to do a balancing act, to pay back its debts and simultaneously improve on services.
Ms Lamoela noted that Mr Pakade would be providing details of other statistics, in addition to those provided by Mr Roberts. She said that an official had previously told the Committee that there were serious problems around mobile trucks, and only ten were being used while thirty were grounded. She enquired what would be the strategy for these in future.
Mr Pakade responded that SASSA had discussed the matter last year and had decided that, despite its financial difficulties, it would like all trucks that were able to move to be used still for travelling to communities. Even if application forms could not be processed on site, due to connectivity problems, at least they could be collected for transmitting to regional and district offices, and queries could be dealt with in the communities. SASSA was still hoping to set aside money for mobile trucks in the new year, and would try to ensure that trucks presently grounded could be got back on the road. SASSA must register the potential beneficiaries.
Ms Lamoela noted the migration of beneficiaries. She asked what measures were in place to avoid further or future social grant fraud. She asked what would be done with the savings achieved.
Mr Pakade responded that SASSA used the savings for critical priority areas, which would be addressing the challenge of infrastructure, improving security services, funding of critical posts, especially under grant administration. The bulk would be used to pay back the overdraft.
Ms H Makhuba (IFP) also expressed her appreciation of the improvement in the turnaround times, but noted that in some places, beneficiaries were told that they could leave the offices, but not given any indication of when they could return.
Mr Pakade conceded that there were offices where the services were still not at the required level of turnaround, but said SASSA was addressing those challenges.
Ms Makhuba asked for the breakdown of the number of people convicted for fraud per province, asked how many were government employees, and what happened to those who were unemployed and could not pay back the amounts defrauded.
Mr Pakade responded that the number of convictions were as follows: North West-1190, Mpumalanga-1109, Gauteng-1665, Limpopo-820, KZN was the most because it had the largest number of beneficiaries, Western Cape-1599 and Free State-509. The amounts defrauded amounted to over R12 million. The fraud fell into various categories. Some people who were given grants were not eligible for them. Some people were not aware that they were supposed to report when they no longer became eligible for the grant. People who had received the grant wrongly were asked to sign acknowledgments of debt, and repay the amounts. The circumstances of each individual were considered separately. In those cases where there was intentional defrauding of the system, prosecutions would be instituted.
Ms Lamoela asked whether the people were required to pay back with interest.
Mr Pakade clarified that there was a provision in internal regulations that spoke to recovery of overpayments of social benefits, allowing the Minister of Finance to exempt those people from paying interest. Last year SASSA made an application to National Treasury to allow it to exercise that exemption, except in the case of those who had deliberately defrauded the system. SIU had been charging interest to those who were in the latter category. There were instances when it was not desirable to recover fully from people who were under extreme hardship.
Ms Tshwete asked for a breakdown of Public Service and non Public Service fraudsters.
Mr Pakade said he did have a breakdown and would furnish that to the Committee in due course..
Ms M Mafolo (ANC) said it was significant that R56 million had already been collected. She asked if that money had been returned to National Treasury.
Mr Pakade clarified that the monies collected from debtors had to be handed over to the Director General, for handing back to the fiscus, the National Revenue Fund, because that money had been voted out of the fiscus in the previous financial years for social assistance. When it was not paid, whether through administrative error or fraud, it was akin to money in dormant accounts. Effectively it could be regarded as savings made from the administration budget. That was the reason that the money that Ms Lamoela had questioned earlier, the R2.7 million on cash standing contractors, would be able to direct that to other priority areas.
Mr B Tolo (ANC) noted that SASSA staff often seemed to be in acting positions. SASSA needed to have people who were fully accountable.
Mr Pakade explained that some of the positions were currently vacant and there were Acting appointments. SASSA would be filling the posts; but some would be informed by the outcome of the performance assessments. The biggest risk was that of re-engineering the organisation and that would be influenced by the outcome of the process. NT and DSD would be dealing with the filling of positions.
Mr B Tolo asked how far SASSA had progressed on a certain case.
Mr S Yawa, Regional Executive Manager, Eastern Cape, SASSA, said that in the Eastern Cape there were some major issues. Firstly, it had engaged with the Traditional Leaders in respect of people who resided in rural areas, but had made their applications in towns. Work was needed on identifying beneficiaries; for instance, records showed that in one village alone there was an inordinate number, allegedly, of twins in that village, and the indications were that a fraudulent syndicate was operating. SASSA was also trying to create awareness of the effects of fraud, so that people who had become aware of attempts to defraud the system would report it, so that SASSA could do an investigation. Some instances of fraud involved SASSA’s own officials; others involved syndicates from other departments.
Mr Tolo asked if the volunteers at the pay points were getting stipends. Some were at the paypoints as early as 4am.
Mr Pakade explained that there was a history around the issue of volunteers. SASSA had developed a policy on public participation. If the volunteer was a member of a pay point committee, then the services were voluntary, and no stipends were paid. The services were regarded as a social responsibility. People were encouraged to put back in communities at pay points and service points, and it was explained to them that there was no remuneration, but SASSA did acknowledge and appreciate their contributions.
Mr Tolo asked what would happen if a person in dire need applied for a grant, while waiting for the application to be approved.
Mr Pakade said that there were criteria under which a person could qualify for a Social Relief of Distress (SRD) grant, and a subsidy was given immediately, by way of an advance payment for the grant. In instances where the main grant application might not be approved, the person could still qualify for a SRD grant. A budget was also allocated to cater for situations where a person who might qualify had made application in the wrong format or there might be some other reason why the grant could not be approved immediately. Social security was a right but was limited to resources. He asked Ms Tolo to advise him of any particular challenge, so that it could be dealt with.
Ms S Kopane (DA) was concerned about beneficiaries borrowing from money-lenders, who persuaded the beneficiaries to hand over their ID books. She asked what interventions were put in place to overcome the serious challenges around the cases lodged with the South African Police Service (SAPS).
Mr Pakade said efforts had been made to deal with that but there were complexities. People who were targeted by moneylenders were not necessarily willing to report those people. This was because, firstly, they regarded the moneylenders as bridging the gap whereby the people could not borrow from banks or the formal market. Secondly, the people would then fall into a vicious cycle of a debt trap, because more than 50% of their money would go to payment of the debt, and they would borrow again, at exorbitant interest, and fall into another cycle until they had some assistance to pay off all amounts, which usually never happened. SASSA engaged with the Financial Services Board to assist it, and create regulations. The National Credit Regulator had also tried to disallow these practices through the National Credit Act. However, the final solution would be to educate people, so that they never got themselves into that situation from the start, or were properly informed how to get themselves out of it. The National Credit Act clearly indicated that such lending practices were not acceptable, and that recovery of such debts was not enforceable. However, moneylenders would threaten the debtors, and take their IDs and cards, but often the debtors were too afraid to report the matters so that the law enforcement agencies could be involved. SASSA had started engagement with the National Credit Regulator, and law enforcement agencies However, he reiterated that the best solution was to make people aware that they should not borrow from moneylenders.
Ms Kopane noted that the Annual Report had mentioned lack of standardised implementation, and she asked if these grants were implemented differently across the different provinces.
Ms Malgas said that in her constituency, Port Elizabeth, volunteers at pay points had then become permanent staff, and she asked for clarification on the 30% figures.
Mr Pakade clarified the 30% option for staff in the Eastern Cape. This was a matter inherited when SASSA was established in 2006, and staff were transferred from, or migrated voluntarily from DSD to SASSA. There were certain contract arrangements, and in most instances the salary arrangements were regularised. However SASSA and DSD were still trying to find a solution where certain people were transferred, but did not exercise an option that they should have done at the time.
Mr Yawa expanded on this. The 30% was in lieu of salary. The MEC said at the time that, in view of limited resources, 30% of salaries could not be provided. This was done in terms of Public Service regulations. Some contract members therefore went without the 30%, whilst others appointed within DSD did not forfeit the 30%. The DSD had called for a legal opinion on the matter. The first opinion given stated that the Department was not obliged to pay that 30%, as it was falling under the Resolution and was incorporated in the contract. SASSA, DSD and the Department of Labour formed a task team to look into this issue, and decided to seek a second legal opinion. That was still awaited. The Labour Union that represented the staff had a task team at provincial level. If the second opinion held that the Department was indeed obliged to fund that 30% then it would do so.
Ms Mafolo cautioned that SASSA, although receiving an unqualified audit report, did have matters of emphasis, and there was a thin line between the Auditor-General raising matters of emphasis and qualifying the report.
Ms Mafolo said that SASSA had challenges around the hiring of staff, and asked how ready SASSA was to implement the extended child support grants.
Ms Mafolo noted that in the last review of past performance it was mentioned that corrupt officials had been referred for disciplinary hearings. She asked for the outcomes.
Mr Pakade said that the ongoing issues, including the cases before the Commission for Conciliation, Mediation and Arbitration (CCMA) had been resolved. Some appeals were sent through to the Minister.
Ms C Dudley (ACDP) asked about the linking of social grants and economic development opportunities, whether this was actually happening, if there were records of success, and what the challenges were, or whether it was rather simply a matter of SASSA giving access to the Social Development database.
Mr Pakade said those issues were discussed. Initially there had been some misunderstanding, in that it was assumed that if a child did not have a school report, the qualification requirement would not have been met. Now this had been clarified. Government was trying to ensure that it became aware of children who were not getting services such as education, so that it was trying to ensure that a parent or caregiver was sending children to school. How that would be implemented was a matter to be decided between SASSA, DSD and the Department of Basic Education. SASSA had already put systems in place to ensure that all the data was available. It would report to DSD, who would, in turn, send social workers to households where children were not attending school, or had dropped out of the school system, to try to get them into school. SASSA would not, however, withhold grants if the child did not have a school report within six months, or was missing school.
Ms Dudley asked about the research to investigate cross border flows, in particular whether there were time frames, when this was being actioned, and when the Committee would get feedback.
Mr Pakade said SASSA was looking at a strategy that would be developed finally in partnership with other departments. The study itself should be finalised within the next six months.
Ms Kopane said that people had complained about a deduction of R40 from the grants, and people from Nelspruit had complained that they had not been notified about their grants.
Mr Pakade asked Dr Terblanche to deal with the question of fraud. However, he acknowledged that SASSA, when dealing with 13 million people, could definitely expect some complaints. He said that in Limpopo it seemed that deductions were being made from Old Age grants, and SASSA was following up on this. In addition, grants might be suspended because people did not comply with requests in connection with a review.
Dr Terblanche, Regional Executive Manager, Western Cape, SASSA, said that SASSA did not dispute deductions from grants. If the grant was reduced, it could probably be because it had been subject to a review. He would like more information in order to follow up on a specific case.
Mr Tolo warned that SASSA should be watching to make sure that people paying sums to burial societies were not simply given paupers’ funerals when they died.
A Member asked if SASSA’s systems were the same for the whole country, noting that a person who lived in Durban, but had applied in Matatiele, was told to go to Matatiele to collect the grant.
A Member asked that SASSA should have fliers in their offices in every district, giving information to assist communities. Information dissemination was a most important tool.
Ms Lamoela noted that 53% of budget went to payment of contractors, 27% to compensation of employees and only 20% on office accommodation and equipment. She noted that a new contract was negotiated for 2010, and asked what the time frame was for this.
Mr Pakade said the new contract would be concluded before the beginning of the year, and it was almost ready for negotiation.
Ms W Nelson (ANC) asked what kind of checks and balances there were with regard to foster care grants. She noted that she was aware that in one province, a person was receiving seven grants. She also noted that digits in ID books were being changed, to reflect different dates of birth.
Ms Lamoela asked for the contact numbers of Regional Managers, who could be contacted when Members were faced with problems.
The meeting was adjourned.
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