Grant payment insourcing: SASSA progress report, with Minister

Social Development

30 November 2016
Chairperson: Ms R Capa (ANC)
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Meeting Summary

SASSA and the Minister of Social Development briefed the Committee on its progress in insourcing its grant payment system by 1 April 2017. The Constitutional Court gave a judgement that requires the Agency to report on seven deliverables. Deadlines for key deliverables have not been met. The Minister also pointed out that the contract of the past CEO came to an end and this has been part of the reasons for the delay. The agency is still doing final alignment and harmonising with key stakeholders, finalisation of budget and Annual Performance Plan review for this programme, gearing up ICT and its supply chain management support to meet imminent procurement, human resource and organisational development considerations and specifications. SASSA assured the Committee that come 1 April 2017 the grant will be paid. SASSA through the Minister asked that the Committee does not push it to reveal its contingency plans in public as this might jeopardise the work it has done already. What matters is that by 1 April 2017, the grant will be paid.

Members all expressed dissatisfaction with the briefing. SASSA failed to confirm its state of readiness in implementing the grant payment. SASSA had only presented options and not the progress made by it. Members said that the parliamentary committee meeting is an open meeting and SASSA had to give the Committee the information it required from it. The Chairperson requested that SASSA prepare a document that speaks clearly to the plan, timelines and challenges.

Meeting report

The Minister of Social Development, Bathabile Dlamini and Mr Zane Dangor, the new Department of Social Development (DSD) Director General and Mr Thokozani Magwaza, the new CEO of the South African Social Security Agency (SASSA) were present.

Ms E Wilson (DA) asked why the Department did not send the presentation document two days or at least 24 hours before the meeting so that Members could go through it. She asked the Chairperson to give Members some time to go through the document.

Ms S Tsoleli (ANC) asked why the document has ‘Confidential’ written on it when it is a presentation meant for everyone to see. If the meeting was for the Members of the Parliament only, it would have been declared so. She also said that its late distribution is unacceptable. The late submission of the document will make the Committee not able to perform its oversight properly. The briefing is an important one.

Mr S Mabilo (ANC) told the Department to always submit its documents on time.

Ms H Malgas (ANC) noted it is the first time the Department is giving out its briefing document very late.

The Chairperson said she wants to clarify the perception out there that there is no political will to come forward with a progress report. It is therefore good to know that the report will be presented today. All issues will be attended to and if the Committee runs out of time and some questions are still outstanding, then another meeting can be called. The fact that Members did not receive the documentation in time added to the perception in the public domain.

Grant payment insourcing: SASSA progress report
Mr Zane Dangor, DSD Director General, apologised for the late submission of the document to the Committee. He highlighted some salient points in the presentation. DSD has the responsibility to administer, pay and manage social assistance. It is a constitutional mandate. SASSA is the custodian of the ‘big money’. Paying of grant is neither discretionary nor strategic but a constitutional duty that SASSA has.

Mr Thokozani Magwaza, SASSA CEO, said that SASSA knows that it has been the concern of many citizens and Committee members about the state of readiness of SASSA. Through the presentation, SASSA will show the Committee that it is ready for the takeover on 1 April 2017. SASSA is aware that the payment of grant to beneficiaries is a constitutional obligation. The current contract which SASSA had with its service provider Cash Paymaster Services (CPS) was declared invalid by the court and a new tender ordered. The CPS contract would be coming to its natural end on 31 March 2017. SASSA was instructed by court to report to it on a quarterly basis on the progress it has done to achieve a new tender and contract.

Ms Raphaahle Ramokgopa, SASSA Executive Manager: Strategy, explained that according to the Constitutional Court requirements, it assumed a supervisory role over SASSA and requested that SASSA submit progress reports to it. The first report submitted was about the initiation of a fresh payment tender. The 2nd report dealt with progress towards the implementation of the tender. The 3rd report dealt with the outcome of the tender process in which SASSA was unable to award. The 4th report dealt with the implementation process of the institutionalisation of the payment system within SASSA. On 25 November 2015 the Constitutional Court gave a final court order discharging its supervisory role over SASSA.

Hence SASSA has constantly submitted feedback to the court about its progress to implement the new tender. In September 2014, SASSA only received bids from three companies. Most of the companies that submitted a bid withdrew at the last minute; those that submitted were not responsive as they did not pass the administrative evaluation criteria. SASSA went back to court to indicate it had tried to pursue the appointment of a new company, the difficulty in making an award and the reasons for that. The court was satisfied. Two months following that, SASSA went back to court to talk to the processes in place for the institutionalisation of grant payments. SASSA made some commitments on the steps to be followed. It was these commitments that caused the court to give the discharge order to SASSA. The final order by the court means that SASSA is no longer required to submit progress reports to the court.

In terms of its commitments to the court, SASSA realised that there are areas where it is not meeting the deadlines. In establishing that some deadlines were not met, it went for legal consultation to know what to do since the court had discharged its supervisory role. With the feedback received from legal counsel and other people, SASSA will go back to explain to the court what had happened, the work in progress and the mechanism in place for implementation.

The first commitment was that the institutionalisation will be a phase-in approach. The second was that for SASSA to achieve success, it will build capacity such as staffing and development of ICT systems.
The third commitment is that the payment system or data will be centralised and brought into SASSA. The fourth is consultation with key stakeholders. This was borne out of the fact that the task at hand is a responsibility that requires commitment from other critical key stakeholders, some of whom SASSA does not have legislative oversight over. For example, SASSA does not have a banking licence and to get it there should be permission from and partnership with the relevant institutions. SASSA needs commitment from Postbank and National Treasury. Treasury has been very strict in terms of increasing money or compensation funds. The fifth commitment was the specificity of the seven deliverables which are:
1 Integration of systems
2 Biometric verification and authentication
3 Payment processing by establishing a control account within the institution of SASSA
4 Payment reconciliation
5 Payment infrastructure
6 Cash distribution and safety - SASSA is looking at what is feasible or not
7 Card issuance and special accounts.

Ms Mvulane Zodwa, SASSA Project Lead, said that the document submitted to court by SASSA has a sentence that reads, ‘all these would be dependent on the consultation’. As SASSA consulted with major stakeholders, the stakeholders looked into the seven deliverables and these were rearranged. The stakeholders also stated that for SASSA to take over next year and implement the payment model, SASSA needs to look at:
• New payment infrastructure programme in totality
• Data service integration programme
• Identity and access management programme
• Fraud, risk and cyber assurance programme
• Web enabled platform programme
• Biometric enrolment programme
• Integrated customer care and support programme
• New improved process programme
• Alternative pay point programme
• Supply chain management readiness programme

Ms Mvulane said the 3rd and 6th points broke down the 2nd point which is in the court document.

In reply to Ms Wilson asking if SASSA changed the seven court deliverables after the meeting with the stakeholders, Ms Mvulane said that it was beefed up and not changed. The stakeholders advised that ‘biometric verification and authentication’ should be broken down into two programmes. When SASSA wrote to the court it was just one but in brackets it had the two. The Chairperson added that what SASSA is saying is that it went to people that matter to ask how the programme should be implemented.

Ms Mvulane said that because SASSA is implementing a payment model, there is a necessity for a ‘fraud, risk and cyber assurance programme’. This deliverable was not part of the initial programme SASSA wanted to do. These points dictate how SASSA will implement the payment model. The key deliverables have been increased from 7 to 10 as shown above.

The deadline in the court document for the data integration was SASSA will be ready between March and June 2016. SASSA will be piloting on the web based system. The full roll out implementation was to be done in August. These deadlines have not been met by SASSA. SASSA is getting the technical expertise as well as from the stakeholders. The stakeholders advised SASSA to start first with the biometrics for ID for the staff and system users, because this will be a platform. The system user biometric will also form a basis for SASSA to interact with the Department of Home Affairs in terms of biometric authentication. The terms of reference for the user ID biometric system will be in the tender bulletin or in the market by 9 December 2016.

Ms Wilson asked if she meant that the 2nd deliverable has not been delivered.

Ms Malgas said that the presentation will not be concluded if questions were asked in between. The interjection may make those listening lose the thread of the presentation. She suggested that members should write their questions down as the presentation goes on. Mr Mabilo agreed with Ms Malgas.

Ms Mvulane said that the biometric has two deadlines. There is the system user for which the procurement process is already in progress. The system will be ready for utilisation by March 2017. For the biometric for beneficiaries, the date has changed to October 2017, while in the document it was October 2016. The reason for the change is that in terms of the biometric for the beneficiaries, currently SASSA is taking biometric from a 3 month old baby to 14-year-old level. The reason is that Home Affairs does not have the biometric for the category of 3 months to14 years. When SASSA applied for birth certificate for babies, they do not take the biometric. For SASSA to do the one-to-many search at the time of the application for an infant, SASSA must do its own biometric one-to-many check. The reason is so a child is not recycled and used to apply from one province to another. SASSA needs to have the biometric it has taken to house them in its own system. Currently this has been done but was housed in the system of the service provider. SASSA is in the process of getting the system back in house. SASSA does not have enough servers to be able to carry this but this is work in progress. As part of SASSA’s ICT revamping, it has looked at increasing storage. The biometric for the beneficiaries will be delayed a bit because of this.

The other reason why it was delayed relates to the time when SASSA interacted with Home Affairs. The Department of Home Affairs is linked with the banks in the form of the web system where only one finger can be used or a thumb to authenticate. In the case of SASSA, it takes 10 biometrics for each beneficiary. What this means is that when someone comes to SASSA to make an application, SASSA will take the ID or any finger to authenticate with Home Affairs to confirm that it belongs to the person. To be able to check that the person has not been to SASSA before, SASSA has to do the one-to-many search. The number of applications being worked on a daily basis causes traffic in the Home Affairs system. The Department of Home Affairs has indicated that it has its own programme and will not be able to do the one-to-many search during the course of the application process. This means that the one-to-many search has to be done overnight because of the volume that will be sent to Home Affairs. There has to be intensification of the ICT system between SASSA and the Home Affairs. This is the reason why the biometric authentication and verification has been delayed but this is work in progress.

Payment reconciliation and processing has to do with the control account as well as the type of account that SASSA wants to give to the beneficiaries. SASSA has started discussions with the Reserve Bank. In the last workshop of SASSA and the Reserve Bank, the later invited the Banking Association South Africa (BASA) and the Payments Association of South Africa (PASA). SASSA has indicated to the Reserve Bank what it meant by payment reconciliation. SASSA wants a real-time reconciliation where it is able to have a view of when a customer or beneficiary phones SASSA, it will indicate when and where an ATM card has been used. Currently the Reserve Bank is not processing real time reconciliation, they will only be able to do low time reconciliation. This means that SASSA can only get overnight reconciliation. It also means that SASSA will not be able to have a view at what happened during that day but only the next day. SASSA is not outside the timeline set for this deliverable. There is also a request for an information document which will be sent to the public.

The card distribution and security is linked to the payment itself. The Request for Information (RFI) that will be out in the market before the festive season also includes the cash distribution and security thereof. In the document, SASSA indicated that it will go to market for this since SASSA would not want to do it alone.

The contracting of merchants is a work in progress. SASSA has done the analysis of all the merchants that are currently being utilised by the current service provider. It has also looked into other merchants that will be introduced and work with SASSA or the new service provider. SASSA is looking into small shops, mom and pop supermarkets that are not chain stores to be merchants in the rural areas. The reason is to minimise the experience of the beneficiary in rural areas waiting for money trucks.

On card issuance and the special account, it is written that SASSA will be having consultation in this regard. The consultation has started with the Reserve Bank with BASA and PASA. SASSA has also started discussion with Treasury. SASSA is exploring the option of SASSA issuing cards while having the back up of banks. These were the discussions with the major stakeholders.

Payment model
Ms Mvulane said the payment model to be used is underpinned by the objectives flowing from the National Development Plan (NDP). The first is the revitalisation of rural and semi-rural economic activity during grant payment. Here SASSA is looking into merchants, and including small shops and supermarkets that are individually owned and not part of a bigger conglomerate. In terms of the empowerment of SMMEs, how does SASSA ensure that money paid in any village grows the SMME enterprises of the area and create jobs.

In terms of focused spending of social assistance, currently when beneficiaries get their money, how they use it is their concern. However, focus should not be lost of the fact that the social assistance is based on the Constitution which is underpinned by human right and this money was solely given to alleviate poverty, to ensure that people do not fall through the cracks. SASSA is still negotiating with major stakeholders like PASA and Reserve Bank on whether the card or account that will be used should or should not transact in places where it is not suitable such as the bottle store. There is a need to have the discussion about ensuring that taxpayers’ money is focused on what it is meant for.

Internally for SASSA, it has to ensure that it improves its own compliance in efficient and effective in administering the grant application process and the payment thereof, risk management, security and fraud hence biometric utilisation is a must. SASSA will also look to ensure a customer experience which is cohesive, with broader payment options available to beneficiaries. Also, SASSA should have full ownership of both the payment and beneficiary data.

Process undergone currently
SASSA has appointed work streams. The work streams have registered progress. Before the work streams started, a due diligence report was done looking into grant administration, beneficiary management and the payment services. The document has already been received by SASSA. The due diligence report indicates that beneficiary management is very poor because the toll free number on the current card is that of the bank. So when the beneficiary is having issues with their grant payment, they cannot phone SASSA directly but rather phone the current service provider. There is nothing wrong with that but SASSA would not be in a position to monitor the response and to know whether the problem has been solved or not.

On the payment services, it has been outsourced lock, stock, and barrel in the sense that even the reconciliation is done by the service provider once a month. The work streams suggested developmental phases and also gave SASSA a payment option selection. The developmental phases should have a phase in and phase out process.

There is a procurement road map to ensure that all these processes are in place. Supply chain management readiness indicates that if SASSA uses shops in rural areas and it gives point of sale (POS) devices, the merchants must sign a memorandum of understanding for SASSA to view the POS devices especially when not working.

Review of Options for SASSA account management
There are two options. The first is an open architecture or open loop. This involves operating in the national payment system that is provided for by the Reserve Bank. The second option looks into a combination of both an open and closed loop system. Both options specify the need for SASSA account requirements which SASSA has done an expression of interest for. SASSA is also in discussion with the Reserve Bank, PASA and BASA on a specialised account which has limited facilities. Currently in the market there are products such as the student account, but they do not cover the aspect needed for the special account. The special account being proposed will allow no deductions of any sort. The open loop is a system operating in the national payment system, the accounts are fully accessible and allow direct reconciliation. Biometrics is a key factor in both options. In the current payment, the Reserve Bank has given permission to SASSA to utilise biometrics for older people and disabled persons. Discussions are on the way as to whether this can be extended to all beneficiaries. The reason for the need for biometrics is for fraud and risk management. Option 1 requires a new SASSA card that operates in both a closed and open system. It must be an integrated system flexible enough to operate in both and allow cash disbursement for beneficiaries in remote areas. Generally, for both options SASSA needs to develop an internal ICT system, recruit relevant capacity and use a phase in and phase out approach.

SASSA has tried to separate each and every aspect that is linked to payment so that it would not be lumped into one.

Card body, production and distribution: The stages of the card production should be separated if possible. SASSA also wants to have a number of service providers to do the card production. SASSA is looking towards government-to-government which is where the staff IDs are being produced. However, it is work in progress. SASSA also wanted to have multi services such that when one service provider is not servicing effectively, then ties can be cut and yet card production will continue. This does not mean that one service provider cannot bid for it but SASSA wants to ensure that its service level agreement (SLA) is water tight.

Option 1 pros and cons
This will involve new banking partners. Having new partners, entails the ability to negotiate pricing, new bank accounts, cash distribution and pay point management will be separated from electronic payment.

It also ensures that beneficiaries with existing bank accounts are allowed to exercise their choice. There is a rider in this benefit. If SASSA has relationship with four to five banks and a beneficiary has an account with another bank, SASSA is not barring the beneficiary from using the account but such an account must talk to the policy and regulations of SASSA. This is to have special viewing into the account.

The challenges for this option are the loss of economic development opportunities and the flexibility to launch alternative pay points. There is the possibility of a higher cost being passed onto the beneficiary. Other challenges are the reduced risk and fraud mitigation controls and reporting again which SASSA cannot do. Strategic insourcing might be difficult especially with the banks because having a special view right of what is happening in an account might be denied by the banks. There is also limited control for channelling the use of the card.

Option 2 pros and cons
The provision of a new SASSA card that will be linked to a corporate account, new cash distribution and payment management (operation of the card in both open and close loop system). There is no separation of electronic or cash payment. There will also be a card bureau and SASSA will be in charge with the backup of the bank. There is the possibility of negotiating optimal pricing for the card, the card stock will be managed and controlled by SASSA. There will also be new acquiring of infrastructure in-house as time goes on.

There is a RFI that will lead to a request for proposals which will also lead to having a new service provider. The new service provider has to be given ample time to set up and issue their own cards. For this, a transition period is required.

Work in progress
- SASSA is still doing final alignment and harmonising with key stakeholders
- Finalisation of budget and APP review for this programme
- Gearing up ICT and SCM support to meet imminent procurement
- Strategic stakeholder communication underway
- Human resource and organisational development (OD) considerations
- Specification and procurement readiness.

Mr Dangor said that come 2017 all grant payments will be made irrespective of which option is chosen.

Ms B Abrahams (ANC) asked how will the SASSA client know or be informed about the process? What method will be used besides radio and newspaper for communication? What informed the new change and what will be the impact on service provisions? There is an assumption that the new insourcing of social grant payments by SASSA will mean legislative changes. What mechanism is in place to ensure that these legislation changes are in line? What mechanisms are in place to prevent corruption by SASSA officials? What is the timeframe for the issuing of cards? How long will it take for a person to get the card? Will the card be an annual card or a life card? If a card is lost or misplaced, will it be replaced and how soon? How will SASSA manage the use of the card in small shops in the rural area when people usually buy alcohol with it? Did SASSA conduct a pilot to identify challenges that may be encountered in future? Will the CPS staff be used for the transfer of skills and what is the time frame for that period? How long will SASSA operate in remote areas? Does SASSA have adequate and necessary infrastructure to start operating in this areas? What mechanisms are in place for security with regards to transporting money to the rural areas? How is the security of the data? How will SASSA avoid any other deduction taking place on this card? What other methods can be used with regards to biometrics when thumbs are not used? What security is there for people that withdraw money from the additional merchants and would there not be an additional fee? Clarity is needed on liaison between the bank and SASSA when a beneficiary has a problem withdrawing money.

Mr Mabilo asked if SASSA has asked the current service provider about the challenges they encountered when they were paying out social grants. If so, what lessons have been drawn? How will SASSA deal with the challenges when it takes over the payment system?

Ms C Dudley (ACDP) asked about the kind of infrastructure and capacity SASSA has to prevent corruption throughout the provinces and rural areas.

Ms B Masango (DA) expressed concern over the absence of information on the actual progress SASSA has made in terms of implementation. Nothing was said about the deliverables being accomplished. If the supervisory role was discharged on the basis of the list of deliverables with timelines being submitted to the court, what does that say about the court discharging its supervisory role? Who does the data belong to now? What informed the timelines for the deliverables? Why was the Post Office not included in any of the options? The Post Office has a footprint throughout the country.

Ms Sonti asked her question in vernacular.

The Chairperson translated for Ms Sonti: What is the effectiveness of the system in the event that there is no infrastructure in rural areas? How will they protect and ensure that there is no risk, particularly the common mistakes that occur when a person cannot obtain the grant? Has SASSA learnt anything to prevent its future occurrence?

Ms Wilson said that in her understanding, when there is a discharge of the supervisory role of the Constitutional Court, that role is only viable and valid for as long as SASSA is meeting the Constitutional Court judgement’s seven deliverables. Once there is no delivering, then the role will go back to the court. A confirmation is needed. Who is the supervisor now? Was the court informed when the deliverables were changed? Have the deliverables been extended especially once the deadline for a deliverable has passed? Was the Constitutional Court informed about it and what was the decision?

There is a court case on biometrics, why is SASSA redoing the system with Home Affairs? Does this not amount to duplication of the system? If Home Affairs can only do it at night, when will it be done?
Bank cards are generally done by banks because they have an ingrained UPHA system in the card. It is surprising to hear that SASSA is considering using a government printer to print the card. In the strategic intermediation, SASSA will be moving from one service provider who has done everything to a chain of service providers doing different things to manage the system on behalf of SASSA. This is alarming, with the allegations of corruption in SASSA, this will leave the country very vulnerable.

Mr Dangor replied that the fact that some of the timelines have not been met means that SASSA has to go back to the Constitutional Court to discuss the options. The Constitutional Court is the supervisor.

SASSA will be guided by the new regulations introduced by the Minister in whatever it does. SASSA is asking for a special account which will be guided by the regulations. Initial discussions with the Reserve Bank indicate that the special account can be accommodated and regulated by the regulations. The regulations are designed to prevent immoral and illegal deductions.

Mr Magwaza replied that the ongoing process is to verify information sitting on the data. SASSA collected biometrics for children from 3 months to14 years which is information Home Affairs does not have. Home Affairs is getting the information from SASSA. Home Affairs has the birth certificates but not the biometrics.

The ID cards from Home Affairs are not different from the bank cards so Government can do it if SASSA wants to go that route. However, the banks may be issuing the cards. The banks do not create the cards themselves, neither do they put the chips in them, they outsource that.

The Chairperson asked who the custodian of the biometrics is.

Mr Magwaza said that Home Affairs is the ultimate custodian of all the information of all the citizens and people coming into the country.

Ms Ramokgopa confirmed that not all the deliverables have been achieved. She explained that the data belongs to SASSA and not the systems. All the information gathered for this project belongs to SASSA.
SASSA has learnt some lessons directly before interacting with the service provider. They are:
- Balancing regulatory requirements with aspirations of achieving a human rights-based mechanism;
- Deductions;
- Challenges of storage, security intelligence and route intelligence if cash is to be distributed. Financial security in terms of transportation does not belong to SASSA.

Mr Abraham Mahlangu, SASSA Chief Information Officer, said that SASSA is undergoing an extensive infrastructure review taking into account the volumes of processing that must be done during insourcing. SASSA is buying a number of servers for storage purposes. On the point of sale system, it will be part of the procurement road map and supply chain activities. An infrastructural upgrade programme is under way.

On legislation, Mr Magwaza replied that SASSA has had engagements with the Reserve Bank hence the need for special account for SASSA beneficiaries. The regulations introduced by the Minister will be embedded in the card whether the card is done by the bank or Government Printing Works (GPW). The regulations says no deductions, and no loans.

Ms Mvulane explained the reason for the disintermediation emanated from the need to separate. There are processes that are being insourced, others are being outsourced, and some are co-sourced. SASSA did not want to lump them together. There is also the need to have a direct link with the service providers and merchants. The relationship will be either solid or a dotted line. SASSA need to have relationship where SASSA beneficiaries are being serviced.

With regards to card issuance, SASSA has its own commissioners of oath. SASSA has looked into the regulations, and have discussed these with PASA and BASA.

The involvement of mom-and-pop shops as merchants will depend on the strength of the service provider. The service provider will be put through a rigorous test. For issuing of devices like POS and mini ATMs within the shops themselves, SASSA wants to classify all the shops and look into their strength. Whoever is the service provider in terms of either a bank will be able to recommend that the shops have been classified and put through a rigorous test. SASSA also wants to know the experience of the transaction that is happening at the shops. In terms of the directives by the Department of Social Development, shops will be considered. SASSA is looking to negotiate with some of the merchants so that when beneficiaries transact using their cards, they can have loyalty points. The loyalty points should also push the beneficiaries towards getting the basic commodities. This is work in progress; the cash distribution would not start immediately but rather a pilot will be conducted using a POS.

Ms Mvulane noted the lessons learnt from the current service provider were:
- How to choose a merchant.
- How cash will be disbursed by the merchants if needed.
- SASSA needs a bank to back it up for any of the options.

She said the banks are linked with Home Affairs via the web based system. Banks can only authenticate once with Home Affairs then they save the biometrics on their own system. SASSA will be linking to Home Affairs in two ways: For the national population register where SASSA will be doing the one-to-many search and in terms of authenticating to confirm the holder of an ID, Home Affairs can take up this volume of work. The volume that they would not be able to take up real-time is the checking and collaborating on the biometrics that have been taken by SASSA. This will be done overnight.

Ms Mvulane responded to Ms Sonti in the vernacular.

Ms Mvulane explained the options include Postbank but Postbank is classified as a bank because it does the duties of a bank. The Post Office is classified as an agent. The bank is classified differently when it comes to procurement matters.

There are deliverables that have not been meeting the set timelines. When SASSA set the timelines, it was looking at SASSA as an agency which going to be ready at the given timelines. However, when it started getting advice from other stakeholders and the reports from the work streams, it then occurred to SASSA that it had been overly ambitious about some of the timelines. Hence SASSA took the advice and broke down the deliverables and start working on things that matter.

Minister Bathabile Dlamini suggested that the Portfolio Committee invite National Treasury, the Reserve Bank, the Post Office and Postbank so that it can have a clear understanding of what is going on in terms of the Post Office and Postbank. The Post Office has a large footprint and it was accordingly the wish of SASSA to work with the Post Office. However, there are challenges that SASSA cannot talk about.

The Minister spoke about community involvement, especially the community shops, in the whole process. SASSA has looked at other countries and benchmarked this. It has seen how communities use the grant to ensure that money circulates within communities. SASSA wants to follow a proper prescript so that it can have confidence in the people. If SASSA has doubt in the community and there is lack of accountability, then the grant would not be used to develop the people. this is a project with a process and should be treated that way. Members of the Committee are also enjoined to go and see practically what is happening on ground.

The Minister said SASSA will ensure that the people get their money on the 1 April 2017. However, the Committee should not push SASSA to say who is going to be paying the money. It looks as if there are other interests besides the interest of the human rights of the grant recipient to get the grant. SASSA has agreed to go back to the court and give a report on how far it has gone and the challenges it is facing in the process. It has also looked at government regulations and what they say about pressing emergencies and issues that affect finances and communities directly. SASSA will develop contingency plans around that.

Ms Tsoleli pointed out that who is going to pay the grant is a critical question that people would like to know. On 31 March 2017 when the contract expires, people would like to know who is going to pay the grant to the recipients. The entity needs to answer that question. Some of the responses given by SASSA are satisfactory whilst others are not. The second critical question is whether SASSA is ready to pay and take on the function come the 1 April 2017. Is SASSA anticipating extending the contract with the current service provider? If it does, what are the implications?

Mr Mabilo said that the response by SASSA that it was overly ambitious in setting its timelines is not acceptable. This is an insult to the Committee. SASSA is faced with an enormous task and cannot afford to be wishy washy. SASSA has to be strategic and plan thoroughly. Failure to plan is planning to fail.

He said SASSA mentioned that the pilot period is 2017. What happens during the transition? The year is already coming to an end and effectively SASSA would have one month before the contract of the current service provider expires. For SASSA to say that “the work is in progress” is broadly phrased, open-ended, not specific and there is no timeline. SASSA should give the Committee concrete facts.

Mr Mabilo asked what SASSA meant by one option is limiting the risk? This is not an option but a mitigation.

He added that the Post Office has 4000 outlets in the country and its footprint is good.

Ms Abrahams asked how well has the community been informed and what method is used.

Ms Wilson said that the main aim of the meeting agenda has not been met. Five deadlines have been missed and SASSA has not gone back to the Constitutional Court to explain why. This is unacceptable and is contempt of court. This is a Constitutional Court judgement and not a game. The presentation is clear that SASSA is not ready to take over grant payments on its own, come 1 April 2017. Can SASSA confirm to the Committee that CPS will be continuing the service delivery until SASSA is ready? This is the only option that is left.

Ms Wilson said that it is good to have a banking partner. Was the advice that SASSA was overly ambitious in setting its timelines given by the advisory committee appointed by the Minister? Is the advisory committee still in place or are they work streams leaders now? Does the fact that SASSA has biometrics which Home Affairs does not have and vice versa jeopardise grant recipients?

Ms Wilson commented that South Africans have constitutional rights with regards to what they do with their money. Once the money is paid, it is the money of the grant recipient. How will SASSA constitutionally tell people what to do with their money?

Ms Masango asked if having too many service level agreements will not cost SASSA a lot of money. She agreed that the aim of the meeting has not been met. SASSA should confirm to the Committee that there is no plan. There is no document that speaks to the institutionalisation of grant payments – only a wish list with options. The plan document would have helped with the technicalities so that the Committee can meet up with SASSA. Can the Committee get a plan of how SASSA can take over grant payments by 1 April 2017?

Ms Malgas asked about the cost attached to the process because money is being given out. Was money delegated from Treasury for the different work streams? SASSA should speak more on the phase in and phase out process.

The Chairperson asked whether SASSA has discussed with Treasury about funds for this project and what was its reply. What is the meaning of “take over” with regards to the grant payment?

The Minister replied that when SASSA started with the process, the term of the past CEO came to an end and this contributed to the delays. SASSA has outlined its options to the Committee but it is as if SASSA has been called upon to give a full account of its contingency plans. This has implications and it is going to put some at an advantage and put the work being done by SASSA at risk. SASSA does not want to risk its work.

The Minister said the main question that grant recipients will want to know is if they will be paid on 1 April. SASSA is not deciding on how the grant money is going to be used. Social workers are supposed to sit with each family of a grant recipient and draw up a budget so that the grant money is used correctly. The shops will not decide for the beneficiaries what they should buy. The decision is for taxpayers’ money to be used properly because the money has to contribute towards human development.

The Minister noted that the Post Office has 4000 outlets but it has closed 221 outlets. SASSA wants to avoid the issue of the Post Office being on strike and grant recipients not having their money.

The Minister said the court gave SASSA seven areas of importance. SASSA has redefined the areas and timelines and needs to report to the court about it. It is not in contempt of court.

Ms Tsoleli said that the Committee is a constitutional structure, a Portfolio Committee of the Parliament of the Republic of South Africa. To say that when the Committee requests information, it puts the work of the department at risk is unacceptable. Unless the information is highly classified. The information requested from the department is not classified. The Committee wants to exercise its oversight freely. The Committee will sit over the budget that will be used for the process and so it is its responsibility to ask question whether it will sit well with the people asked or not. The Committee asked for a progress report on how far the Agency has gone with the implementation of the grant payment system but the presentation is far from what the Committee asked for. The Committee wants SASSA to come forth and alleviate the fears in the public. SASSA is not helping the Committee. Is SASSA really ready to take over? Members of the Committee need to be able to tell their constituents that they will receive their grants and answer their questions.

Mr Dangor said that whatever option that SASSA utilises, the grant must be paid on 1 April. If a contract is invalid it cannot be extended. Asking SASSA to go into the details of the process in a public place with many players is very uncomfortable. SASSA is working very closely with National Treasury and the Reserve Bank and they have given resources to SASSA. SASSA is committed to paying the grant on 1 April. The Minister passed regulations to stop illegal or immoral deductions from people’s grants.

The Chairperson said it is not the role of the Committee to say who should be appointed or not as a service provider. What the Committee should be dealing with is who has been appointed and why.

The Committee asked SASSA to produce a progress report and the state of readiness. It is not a matter of delivering a complete product. The Committee cannot endorse the delays mentioned by SASSA. Why did SASSA not continually inform the Committee about the challenges?

SASSA must prepare a document that is clear and shows the plan in response to whatever the court has instructed, and submit this to the Committee. The plan must clearly state the timelines and the challenges.

The meeting was adjourned.

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