SASSA and Minister on Constitutional Court order & Pretoria High Court ruling

Meeting report

The Chairperson welcomed everyone. An apology was received from the Deputy Minister. In response to a query why the Minister is not present since an apology was read out only from the Deputy Minister, she said that the Minister will be available for the meeting since no apology has been received from her.

Ms H Malgas (ANC), Committee Whip, added that the Minister will be available for today’s meeting. The Deputy Minister is ill.

In response to a question on how the meeting will proceed, the Chairperson said that the Constitutional Court order is influencing the Annual Performance Plan (APP). It is therefore better to deal with issues arising from the court order to realign the APP to it. It is not formalised whether the court order has a separate budget other than what is contained in the APP.

Members agreed to the process.

The Chairperson said that when the Minister arrives, the presentation will be paused to allow the Minister to answer some questions. Since the Minister will be present, there will be no need to have meeting on Friday 12 May. All the matters will be addressed in today’s meeting.

Ms E Wilson (DA) raised concerns about the cancellation of the Friday meeting. During the last meeting, members were told that questions on the DSD APP will be addressed by the Minister on Friday. Members are prepared for the SASSA meeting today and not for questions on the DSD APP.

Constitutional Court order: briefing by South African Social Security Agency (SASSA)
Ms Nelisiwe Vilakazi, Acting Director-General: Department of Social Development (DSD), said the SASSA CEO will proceed with the presentation.

Mr Thokozani Magwaza, SASSA CEO, noted that SASSA has passed through 1 April, especially considering the anxiety that bedevilled the grant payment. SASSA managed to avert the catastrophe that would have hit the country. The presentation is to inform the Committee on what has been done and what needs to be done. He then handed over to the project leader to continue with the presentation.

Ms Zodwa Mvulane, SASSA Payment Transition Project Manager, said that Constitutional Court has reinstated its supervisory role. The Court has directed that SASSA and Cash Paymaster Services (CPS) are under constitutional obligation to ensure payment of social grants from 1 April 2017. The current contract with CPS was extended for a period of 12 months and the declaration of invalidity of this contract was suspended for the 12 months.

On the task of procurement, SASSA submitted an amended request for deviation to National Treasury on 17 March 2017. National Treasury supported the deviation process in line with the Constitutional Court ruling on 17 March 2017. A letter of contract extension was sent to CPS to formally notify them that SASSA will be continuing with the existing contract.

The current contract and service level agreement are in place. SASSA drafted a proposal for the Addendum to the current contract and this was negotiated with CPS from the 20 March and signed on 31 March 2017 by the CEOs of both parties.

DSD /SASSA submitted the cash request to National Treasury. National Treasury confirmed that SASSA will receive R11 175 538 000 on 29 March. CPS submitted the cash requirements to SASSA in terms of clause 9.1.3 of the current SLA. Cash was transferred to CPS on 29 March in line with current agreement.

DSD/SASSA worked with GCIS to develop a government wide communication plan. Communication was intensified in the days leading to 1 April.

For the April payment cycle, a total of 10 596 104 beneficiaries were scheduled to be paid. The payment file was opened at 13:00 on Friday 31 March. By midnight on 31 March, a total of 477 162 beneficiaries had withdrawn their social grants. An amount of R4 691 382 738 was paid out.

The main challenges to the April payment were:
- An increased number of beneficiaries were seen on 1 April but payment went smoothly.
- Security challenges with robberies at merchants and ATMs. These are criminal acts and are being dealt with by the relevant law enforcement agencies.

Ms Mvulane explained the rest of the court orders, saying Court Order 7 to 9 dealt with the filing of reports.
The Minister and SASSA must file reports on affidavit with the court every three months, commencing on the date of the order. The first report is due on 17 June 2017. The affidavit will be compiled by SASSA with concurrence/confirmation of the Minister. The report will cover the following:
- Detailed plan to ensure the payment of social grants after the expiry of the 12-month contract
- Steps taken until that date, and what is outstanding
- Future steps to ensure payment of social grants after the expiry of the 12-month period.

Court Order 10 deals with safeguards for beneficiaries’ personal data. The court ordered that a beneficiary’s personal data obtained for the payment process remains private and may not be used for any purpose other than payment. SASSA has enforced this order through the contract addendum. SASSA will monitor compliance thereof and report to Constitutional Court on a quarterly basis.

Court Order 11 and 12 relates to appointment of independent experts. Within 14 days of the court order SASSA had to submit names of independent legal practitioners and technical experts to the court. These names were procured through an internal process and submitted to court by 6 April 2017. Other parties also nominated and submitted names of professional independent experts. The Court outcome on this is still awaited.

The Auditor-General together with the individuals and/or institutions appointed by the court shall:
- Evaluate the implementation of payment of social assistance over the 12-month period
- Evaluate steps taken or planned by SASSA for any competitive bidding process for a new contractor
- Evaluate steps taken by SASSA to bring the payment function in house
- File reports to the Court every three months (or shorter period) setting out steps taken to evaluate, results of evaluations and any recommendations.
 

SASSA has written a letter to Auditor General and National Treasury to formally communicate the order.

Elements of 2018 payment plan
The revised SASSA 2018 plan will include:
- Insourcing of certain services
- Implementation of Regulation 26A
- SASSA social grants holding account
- Elements of registration and enrolment
- Government to Government collaboration
- SAPO (SASSA engaged SAPO on those services that SAPO can provide – distribution of cash through SAPO outlets)
- Other departments involved: Department of Home Affairs;  State Information Technology Agency (SITA) and South African Reserve Bank (SARB).

Ms Mvulane said that the full plan and costing will be unpacked in the next week.
 
Discussion
Ms S Tsoleli (ANC) welcomed the presentation, saying it is a step in the right direction. Will SASSA start collecting a new set of data for recipients or is the court order based on data that is in existence? How secure is the data? What are the plans in place to ensure that the data will not be accessed by people who are not supposed to access it? Once the data is protected by the Department no illegal deduction will take place. It is unfortunate that the Pretoria High Court judgement of 9 May did not take into consideration the poor people who are facing these deductions taken from the little money they are getting from the government. Poor people need to be protected.

The presentation lacks timeframes. Twelve months is not a long time and it is already half-way gone. SASSA must ensure that their next presentation has timeframes for oversight purposes. Clarity is needed on the statement ‘full costing will be unpacked in the next week’. Is this an error? The statement should be put correctly.

The costed phase in and phase out plan should be presented to the Court. The Committee needs to know how much it will cost.

The Chairperson noted that the Committee has agreed that SASSA should be a standing weekly item on the agenda. However, SASSA will answer more clearly to that.

Ms L van der Merwe (IFP) shared the sentiment of Mr Magwaza that the country’s anxiety as to grant payment has been relieved. A new anxiety however sets in on whether SASSA will be able to meet the new deadline set by the Court. Time is ticking. This is to avoid extending the illegal contract again.

Ms van der Merwe referred to the affidavit of the former DSD Director General about the work streams. The work streams have cost SASSA R40 million, have they delivered any result?

The Chairperson asked Ms van der Merwe to pause questions on work streams; it will be dealt with later in the meeting.

Ms van der Merwe asked if SASSA is considering working with all banks or only SAPO. What is the outcome of the discussion with Post Office? Will the Post Office be ready to take over the payment of grants within the stipulated time? Clarity is needed on the statement made by the Minister that the court order was unfortunate. She agreed that timeframes should be included in the presentation.

Ms B Abrahams (ANC) welcomed the presentation. SASSA kept its promise of paying grants on 1 April. Is SASSA busy with capacity building within the Agency? Will Grindrod Bank still be issuing cards?

Ms P Mogotsi (ANC) also welcomed the presentation. She thanked SASSA and Minister for averting the alleged national disaster. It shows that the issue of social security is being taken care of especially by the ANC government. Will there be multi-disciplinary team?

Has SASSA chosen SAPO to do the pay out? What are the risks involved and what plans are there to ensure that the payment is implemented with regards to SAPO? If there is a plan, it should be submitted to the Committee. On issues of cooperatives and the local economy, if SAPO has been appointed will it tender or will the cooperatives be given the business. What education will be given to the cooperatives?

Ms E Wilson (DA) said that one of the orders of the court is that CPS and Net 1 should be subject to an audit by an independent financial organisation and this submitted to National Treasury. What is the progress on that?

The submission of the business case on the new model to Treasury, clarity is needed on this. The reason the Department ended up in court is because there was no transparency as to what is going on at SASSA.
Were the leaders of the work streams or anyone contracted to SASSA put forward as independent experts? Who are they? What is the rationale behind the decision to submit their names to court?

Ms Mogotsi pointed out that it must be noted that SASSA is still redesigning itself since the court order. It is working on a new organisational design.

Ms van der Merwe said that committee members should not pre-empt the answer of the Department.

Ms Tsoleli said that from the questions Members are asking, there is already an element of mistrust.

Ms Malgas welcomed the presentation and congratulated SASSA for the payment on 1 April despite the hype from media. There were no problems in the grant payment. She noted that deductions are continuing. Grants are not salaries but a poverty relief mechanism for the people. There is indeed a concern raised at the Pretoria High Court ruling on 9 May. Did the Constitutional Court pronounce yet on the names of the independent practitioners given to it?

Ms B Masango (DA) thanked the Chairperson for an opportunity to ask questions. The Committee has consistently asked SASSA to present its plan for institutionalisation of grant payments. There is still no plan. Can this plan be given to the Committee so that it can respond to the public when asked about it? Will the opinion of Treasury on the work streams be given to the Committee? Will the Committee be given the addendum also?

The Chairperson said that the work streams issues will be presented fully to the Committee.

Ms K Jooste (DA) asked questions on the personal information of grant beneficiaries. How will the information be secured? What will happen to the information already out there? What is the communication strategy by the Department to beneficiaries concerning deductions? Is the Department willing to take responsibility for illegal deductions? What will the grant beneficiaries do now?

Response
The Minister of Social Development, Bathabile Dlamini, pointed out that the Deputy Minister is not part of the Cabinet. It is worthy to note that there is expertise that is not present in SASSA; hence the need for people that have the expertise. For example, there is no expertise on biometrics, banking, costing, modelling, payment, and cyber risk assessment. The fact that payment has not taken place by SASSA itself shows that lack of staff/officials to do that work. The balance of staff right now does not represent what is expected from SASSA. Most people are at entry level, then the managers, 40% of people are in finance.

Considering the budget, SASSA has estimated that it will not take 12 months to bring the whole payment transition program into its totality. Even though the current company doing the payment will be phased out, it will be a five-year process. The estimation done by SASSA shows it will cost R6 billion for the process to be actualised. South Africans should look at the entire process as an investment because once SASSA starts paying it will not be paying that amount of money. The SASSA officials will expand on this.

The Court has not pronounced on who is to be appointed amongst the practitioners. The most worrying aspect of this whole thing is that while waiting for the Court, newspapers are raising issues that are aimed to influence the entire process. One of the Judges said, ‘we read what is in the newspaper’. This means that they are influenced by what is in the newspaper. What this also means is that whatever decision will be reached will be influenced by public opinion. Public opinion that is not tested is sometimes used as part of argument, because it was said so by a judge.

DSD is not the first Department to miss deadlines for targets set. It is understandable that this issue brought so much attention because it involves payment of grants to vulnerable people in the country. SASSA must be given the benefit of doubt whenever issues are raised. Hearsay should not be used to judge officials’ performance.

The Minister said she is disappointed by the Pretoria High Court judgement. The Department has been to the National Credit Regulator and lost the case. The Department has learnt its lesson not to take things for granted. The argument of the judgement will be read carefully.

The Department will work with everyone as long they meet the requirements of the department.
Young people will be trained in entrepreneurial skills. The Department will also work with cooperatives and Post Bank. The Department will look at what the Post Office has in terms of resources so that they won’t be given work they won’t be able to deliver. Other bodies are CSIR, Home Affairs, and SITA.

The names of grant beneficiaries are with SITA. The Department is one of the few departments working with SITA and it is understandable why other departments are no longer working with SITA. The Department will meet SITA because there is information that cannot be approved through Home Affairs. The Department is not starting from scratch but will engage with other department that store information.

The judgement is clear about migration of data and biometrics from CPS and SASSA is assisting with that.

The Chairperson said that members should ask question directly to the Minister. There is a link between the court order and the Annual Performance Plan.

Ms van der Merwe asked if CPS will still be in operation after next year since the transition process will be a five-year process.

Ms van der Merwe said a clause in the original contract signed between CPS and SASSA allows CPS to share the information of beneficiaries. Someone should be held accountable for this. Someone looked at the agreement and allowed it to be signed. The Pretoria High Court has ruled that the status quo should continue and the poor will suffer for this. What is the plan of the Department on illegal deductions?

The Chairperson said that the court instructions will be obeyed. The presentation does not deal with non-compliance. On the issue of deductions, the Committee will sit with legal advisors to see if there is anything wrong with the law. If so, it is the duty of the Committee to instruct the Department to make amendments.

Ms Tsoleli said that time is of essence.

Ms Wilson said that the limited time is allowing some questions to go unanswered. It is therefore good for the Friday meetings to still take place.

Ms Tsoleli said that if questions are not answered, there are processes to follow such as writing to the Department or Minister. Due to time constraints, Members should follow that processes.

Mr Magwaza replied that no work stream person was nominated as one of the independent practitioners. On the audit ordered by Constitutional Court, this must be done after the end of the contract. CPS will give SASSA the financials through the independent practitioners appointed. This will happen at the end of the contract.

The Chairperson said that interpretation of court orders was done in Bloemfontein. It is important to be clear and not confused.

Mr Magwaza said that the Department is looking at the Pretoria High Court judgement and will take it up on appeal.

Ms Busisiwe Mahlobogoana, General Manager: Legal Services at SASSA, said that there is no clause in the contract that stated what Ms van der Merwe was saying. She can bring it before SASSA and the Committee to be checked. The data collected is the property of SASSA.

Mr Magwaza replied that the current contract with CPS is for 12 months. After 12 months, CPS will be phased out. He explained that the SASSA will be having a workshop with SAPO next week where it will be ascertaining with what SAPO will help SASSA. Come 2018 there will be no CPS. An organisation or an in house body will be put in place but there will be no CPS. On open architecture, there may be special accounts. If there is special account, it will circumvent illegal deductions. It will also help the SASSA to determine what will happen to the account.

The Chairperson said that the Committee will support the Department in its appeal plan. The haves cannot use tricks to rob the have-nots. The Committee is dissatisfied with the Pretoria High Court judgement.

SASSA Annual Performance Plan (APP) presentation
Mr Magwaza said that most of the activities that will be done by SASSA are unfunded. The APP was tabled before the Constitutional Court order. How will this affect the budget vote if the APP is re-tabled? The APP as it is now does not consider the present issues.

The Chairperson said that Constitutional Court put its demand on top of what was already planned. Should the Committee listen to the APP and then wait for its amendment?

Ms van der Merwe thanked Mr Magwaza for telling the Committee that the present APP is outdated. It will be futile to review an outdated document. There is still time before the budget debate, SASSA should be allowed to amend the document.

Ms Tsoleli said it is a difficult issue; legal advisers should be available to advice the Committee. This will affect the audit report of SASSA. The Committee cannot proceed with an outdated document that would then affect the audit report of SASSA.

The Chairperson said that the legal advisors had been called four times to attend the meeting. The Committee Secretary will look for them.

Ms Tsoleli said that the document came from the Speaker as such it should also go the same process for withdrawal.

Ms Mogotsi said it is difficult to present the APP after the court order.

Ms Wilson said that the Committee needs legal advice on this.

Ms Malgas asked for adjournment of the meeting for 10 minutes until the legal advisors come.

The Chairperson said that members should ask their questions directly to the Minister while waiting for the legal advisers.

Ms van der Merwe asked her questions on work streams.

The Chairperson said that what she has heard is that the work streams appeared not to have been approved by the Auditor-General. Relevant communication has been sent to the CEO, and Minister. They are in the best position to answer the question.

Ms van der Merwe asked about the current position of the work streams. R40 million has been spent on something that was not approved by Treasury. The main reason there is still CPS is because the work streams created a parallel structure. The work streams reported to the Minister leaving key SASSA management outside of the process. The work streams were driving the process leaving the former Director General outside. Are the work streams still operational, is value for the money realised?

Minister Dlamini said that the Department has not discussed the response from the Treasury on the work streams. It would be very important for everyone to read the SASSA Act, which sets out the relationship between SASSA and the Minister. The Department has tried to explain the reason for the work streams.

In one Standing Committee on Public Accounts (SCOPA) meeting, someone from Treasury said the work streams were confirmed while another said they were not confirmed. Before the former SASSA CEO, Ms Virginia Petersen left, a lot of work was done with the work streams and the SASSA officials.

The Chairperson said that it is practice for the Department to report back to it on any matter.

Ms Wilson asked why the work streams were reporting to the Minister. Are the work streams now reporting to SASSA CEO?

Minister Dlamini stated that everyone should read the SASSA Act. She cannot discuss peoples’ affidavits or what is being said by the media or the resignation of the Director General. The former DG was supposed to raise matters with his colleagues, and not after resigning.

Ms Malgas asked that everyone to read the SASSA Act. There are a lot of irregularities with SASSA; hence the need for legal advice.

The Chairperson said that the meeting will be adjourned to allow the legal advisors to engage with the APP document properly and give proper advice to the Committee.

Meeting adjourned.