The South African Social Security Agency (SASSA) briefed the Committee on its annual report for 2016/17. The Agency had investigated 65% of the reported fraud, theft, and corruption cases against the planned target of investigating 70%. There was a backlog of 933 cases being investigated. 150 open pay points had been planned to be converted to fixed structures, but 176 open pay points had been converted, representing a performance of 117%. There had been a target of 5% of social assistance debts to be recovered, but only 2% to the value of R12.9 million was recovered. The outcome of the write-offs of R155 million submitted to National Treasury was still outstanding. 2 062 453 new social grant applications were processed, and 35% of the 100 526 social grant exceptions were identified and resolved. 36% of the 14 683 disputed deductions from social grant payments were resolved. The Agency had included management of disputes in the transition plan. The budget was R6.9 billion, and the total expenditure for the year was R7 328 billion.
SASSA had received a qualified audit outcome from the Office of the Auditor General (AGSA). A material finding was raised against the percentage of disputed deductions from social grant payments resolved. SASSA did not have an adequate system for identifying all irregular expenditure resulting from procurement and contract management, and there were no satisfactory alternative procedures that the Auditor General (AG) could perform to obtain reasonable assurance that all irregular expenditure had been properly recorded in the financial statements.
Members expressed concern over the AG’s report, as SASSA had been highlighted in red for having no accuracy in their reporting or transparency. In addition, the Committee expressed its concern over the regression to a qualified audit opinion. Members asked how the Agency could state that their effective leadership was good in their report, when oversight responsibility, effective human resource management and information communication technology (ICT) governance were needing intervention, and policies and procedures and audit actions were of concern. Members asked the Agency what the differences between the Integrated Community Registration Outreach Programme (ICROP) and Project Mikondzo were, as they appeared to have similar functions. A Member stressed her concern over the issue of illegal deductions.
The Chairperson wanted assurance that SASSA functions were separate from the Department of Social Development. She said that if the Department in any way had the ability to influence the Agency to do what was not their core mandate, measures had to be put in to place. The Agency was asked how it dealt with consequence management. A Member also asked about the progress of the finalisation of contracts with the South African Post Office (SAPO), but the Committee decided after some discussion that the agenda for the day was focused only on the annual report, and the SAPO issue was not a part of it.
The Chairperson welcomed Members, the South African Social Security Agency (SASSA) and other departments. This meeting was to listen to the presentation of the annual report of SASSA, which was a part of the Department of Social development (DSD), and was responsible for the provision of the needy.
Apologies had been received from the Minister, Ms Bathabile Dlamini, and Deputy Minister, Ms Hendrietta Bogopane-Zulu.
Ms V Mokgosi (ANC) asked that the Head of the DSD lead the delegation and give an overview of the meeting, and that in future an official apology letter be required when the Director General was unable to attend.
Ms H Malgas (ANC) suggested that the Acting Director General send a letter to inform the Committee who would be leading the delegation when he was unable to attend, in order to hold the person to account.
South African Social Security Agency: 2016-17 Annual Report
Ms Raphaahle Ramokgopa, Executive Manager: Strategy and Business Development, presented the executive strategy. SASSA had two programmes – the administrative programme and the benefit and support programme.
The Agency had investigated 65% of the reported fraud, theft, and corruption cases against the planned target of investigating 70%. There was a backlog of 933 cases being investigated.
SASSA had a total of 9 349 employees, included 805 contract workers. Of the 95 planned target of filling funded posts, 96% had been filled.
Co-sourcing for the regions of North West, the Western Cape, Gauteng, KwaZulu-Natal and the Free State had been concluded. 150 open pay points had been planned to be converted to fixed structures, but 176 open pay points had been converted, representing a performance of 117%.
In the area of information communication technology (ICT), the targets of a biometric access system for staff and beneficiaries had been acquired, configured and piloted. An electronic queue management solution had been procured and piloted, but procuring and implementing a web-interface solution had not been achieved because it was included in the overall new Insourcing Payment Model, which had led to time lines being affected.
SASSA had received a qualified audit outcome from the Office of the Auditor General (AGSA). 96% of the 4 781 eligible suppliers were paid within 30 days. The shortfall was due to disputed invoices, delays by suppliers, and changes in suppliers without submitting new banking details.
There had been a target of 5% of social assistance debts to be recovered, but only 2% to the value of R12.9 million was recovered. The outcome of the write-offs of R155 million submitted to National Treasury was still outstanding.
2 062 453 new social grant applications were processed, and 35% of the 100 526 social grant exceptions were identified and resolved.
15% of the 7 090 regulation 26A mandates – dealing with Circumstances under which deductions may be made directly from social assistance grants -- were processed manually. In order to address this, the Agency would undertake negotiations with service providers to manage these under the payroll deductions contract.
Of the planned target of 60% of disputed deductions from social grant payments, 36% of the 14 683 had been resolved. The Agency had included management of disputes in the transition plan, and SASSA had taken control by increasing direct responsibility and developing a payment system which did not allow for any deductions from social grants.
New beneficiaries biometrically enrolled on to the new SASSA system was not achieved.
- Mr Tsakeriwa Chauke, Chief Financial Officer, presented on the financial performance of the agency
- The budget was R6.9 billion, and the total expenditure for the year was R7 328 billion;
- Compensation of employees (CoE) was under-spent by R109 million;
- Goods and services were overspent by R763 million;
- Transfers were overspent by R1.487 million;
- The Agency had an accumulated surplus of R508 million;
- The total variance was R419 million;
- A positive aspect was that there was no material adjustment in relation to the presentation of the financial statement.
Basis of qualified audit opinion
The first basis was the predetermined objectives under Programme 2 (Benefits Administration and Support). A material finding was raised against the indicator of percentage of disputed deductions from social grant payments resolved.
The second basis was irregular expenditure. SASSA did not have an adequate system for identifying all irregular expenditure resulting from procurement and contract management, and there were no satisfactory alternative procedures that the Auditor General of South Africa (AGSA) could perform to obtain reasonable assurance that all irregular expenditure had been properly recorded in the financial statements.
Control measures put in place to avoid similar findings in the future
- All transactions processed to date were being reviewed and validated to ensure the irregular expenditure register was complete and accurate;
- SASSA had implemented a supply chain management (SCM) compliance checklist to ensure all transactions were verified before they were processed;
- Strengthening the implementation of consequence management;
- Informing local officers to register every dispute on the customer care system;
- Standard operating procedures were being developed and would be circulated to all local offices for implementation on completion and approval;
- Reconciliation of monthly disputes would be registered on the customer care system to ensure completion of information.
Ms E Wilson (DA) said the Auditor General’s (AG’s) report was a sad and serious indictment on what was happening at SASSA. What she found most alarming was the statement from the AG on the analysis of the expenditure on programmes versus performance achievement. SASSA had been highlighted in red for having no accuracy or transparency in their reporting. The statement by the AG was that there had been material misstatements of information which he was required to report back. The statement also mentioned that the accounting authority did not exercise adequate review and oversight to ensure that policies and procedures were updated with new requirements, and that operating procedures for performance reporting had not been rolled out. This was a critical indictment.
Ms Wilson was also concerned about the statement by the AG referring to proper record keeping, monitoring and review processes which were not implemented in a timely manner and were not there to prevent or detect irregular expenditure. This did not give a good reflection on what was occurring at SASSA, particularly on procurement and contract management. She added that this was a public document and could be viewed as corruption. The Committee had been dealing with a lack of transparency and corruption from day one with SASSA.
Ms Wilson read another statement from the Auditor General’s report which related to contracts and quotations being awarded to businesses based on preference points that were not allocated or calculated in accordance with the requirement of the Preferential Procurement Policy Framework Act (PPPFA). She said that this had now become a public document and was embarrassing and it was important for these issues to be addressed.
Ms Wilson referred to the financial statement relating to irregular, fruitless and wasteful expenditure. She asked for clarity on the irregular expenditure of R43 million on work streams, as it was a matter of hot debate. She also asked the Agency to clarify the other matters which had led to an irregular expenditure of R28 437 569.
Ms Wilson ended by asking for clarification on the possible irregular expenditure from the Integrated Community Registration Outreach Programme (ICROP), as the report said SASSA had contracted a provider for the programme, but it had been noted that there were allegations that misleading information may have been provided.
Ms B Masango (DA) referred to the information from the Auditor General and in particular key controls. Part of leadership for DSD and their various entities stated that SASSA was either of concern or needing intervention. She asked how SASSA would state that their effective leadership was marked as good in their report when oversight responsibility, effective HR management and ICT governance were needing intervention, and policies and procedures and audit actions were of concern. It was of concern when issues of leadership were of concern or needing intervention.
Ms Masango asked about the presentation’s reference to the surplus. She said Project Mikondzo and ICROP were not of the agency’s core business. She asked why SASSA was overachieving on the non-core business when the core business was being under-achieved. She had previously asked the DSD and SASSA what the difference between Mikondzo and the Integrated Community Registration Outreach Programme (ICROP) was in content, and the response had been that there was no difference -- it was just scope. She asked for clarity on what that meant. On the targets of SASSA, she said that one of the targets of DSD was to construct 18 centres throughout the country. She argued that SASSA and the DSD were not construction agencies, and now they were in a situation where they had not complied with local content requirements.
Ms B Abrahams (ANC) quoted from the AG’s report on the issue of corruption and accountability. Somewhere along the line, the legislation was not being followed, which was why they did not comply. She also referred to the fraud and consequence management of the AGSA report, and asked the Agency what the consequences of not adhering to legislation were.
Ms Abrahams asked for clarity on the financial statements’ reference to staff bereavement of R145 000. She asked how it was spent, what it was spent for, and if there was not another way of dealing with this.
Referring to fruitless and wasteful expenditure, she was concerned about the big opening balance as each year they were unable to close off. She asked if there was a way SASSA could close off in order to start off with clean books. She also asked why ‘laptops’ fell under irregular expenditure, when they would normally be insured. On hotel ‘no shows,’ she asked if there had been consequence management to cancel this in order for it not to count as irregular expenditure. She told the CFO and CEO that millions were being allocated to train people, and asked how SASSA was dealing with incompetent people, as disciplinary action needed to follow. The Preferential Procurement Policy Framework Act (PPPFA) was not being adhered to, she asked why SASSA was allowing this to happen.
Ms H Malgas (ANC) said SASSA met only 50% of its targets, but comparing this with the funds given out indicated overspending. She asked if this was value for money and what the impact was. It showed that planning had not been done.
She referred to the qualified audit outcome. The AG had spoken of incompleteness of irregular expenditure and said that the recommendations the Agency had been sent in the previous financial year were still coming up in the audit report. The Agency had given the Committee their solutions in their presentation, but the turnaround strategy they had put in place had not worked. She mentioned the failure in relation to the irregular expenditure of R316 million to Cash Paymaster Services (CPS), R75 Million to SAB&T auditors, R24 million to the Construction Industry Development Board (CIDB) and R316 million to Trifecta.
She asked about illegal deductions, and said that the Agency’s communication strategy was not working. In her constituency, the ANC branches had brought her a number of papers with illegal deductions, and they could not work on them as SASSA had stated that there was a form the individuals had to fill in. Illegal deductions were still taking place, and SASSA had to sort out this process. She asked about the overspending of 147% on the grants, as when one applied for a grant it was not taken from the date of application, but the Agency gave out three months’ money. She asked if the 47% overspending affected this year’s budget. Lastly, she asked the Agency how they communicated with their senior citizens.
The Chairperson expressed her concern that SASSA’s functions were separate from the DSD. She referred to the past issue of budget allocations, when DSD had a gap, and stated they would get R600 million from the reserves of SASSA. She asked if the DSD had the ability to influence SASSA to do what was not their core mandate. She said that if this was so, it would have a negative impact on the Agency.
Mr Osborne Masilela, Chief Director: DSD, responded that the funds transferred to the Agency were earmarked funds, and there was no way the DSD could force the accounting officer of SASSA to spend the funds on what was not their core business. The grant money was administered by SASSA, but belonged to the DSD. In the past three financial years, the Agency had agreed that money that went to the DSD as support would form part of the baseline.
The Chairperson said she could not confirm that this was the case, and she encouraged being open in order to aid in managing the programme. She stressed that if there was pressure being put on the Agency, law makers must put a system or policy in place which prevented the influence of the DSD over SASSA funds.
Ms Diane Dunkerley, Head of Grants Administration, SASSA, responded to the reference of ICROP being a non-core programme. It was an integrated outreach programme, and core to SASSA. Not everyone was able to reach SASSA’s offices to get the services, so the programme functioned as a service delivery vehicle which went out to the communities.
Ms Dunkerley said the achievement of 147% against the annual target was the target for new social grant applications processed. They had projected 1.4 million applications, but had dealt with over two million. This overachievement had not negatively impacted on the budget as it balanced out, because grants stopped for applicants who turned 18, or for people who die. There was a misunderstanding around the payment of the new grant applications, as they were processed on the day of application, except for foster child grant applications, which were processed from the date of a court placement, which preceded the application date. The amount of money people got as a first payment would depend on when in the cycle they had applied.
Ms Dunkerley spoke about their communication strategy with senior citizens. They acknowledged that communication had not always been as good as it should be, but they had embarked on an active drive where they go to pay points with loud hailers, and communicate with people in their local offices, as they feel information such as payments would continue to happen and that the SASSA card would not expire in December, was critical.
SASSA did not endorse any financial product, such as loans or prepaid products.
Ms Dunkerley responded to the question around how people registered disputes. She said that if the person who was experiencing challenges with an unknown deduction claimed not to have authorised it, they must complete an affidavit, and it must be referred to a SASSA office where they would register the dispute and follow up on it.
Ms Ramokgopa said SASSA had not yet researched what could have attributed to the spike in the increased number of applications, but thought that ICROP going in to the communities could have contributed to the increase in demand.
Ms Malgas asked if the 47% spilled over into the new financial year.
Ms Dunkerley responded that the 47% had not resulted in over expenditure, and would not spill over into the new financial year, as not all applications were approved and there were applications which were stopped within the system.
Ms Mogotsi asked about ICROP being an issue of service delivery, and Programme 2 on social assistance and in particular foster care. It was a human rights issue involving how those who qualified were not getting it due to the red tape between the Department and its sister department outside. She asked if ICROP dealt with issues of service delivery, what measures they put in place to assist about 500 000 children that were not in the net of foster care grants because they did not have the correct documents, or the family members were unable to take them to court. In addition, she asked what measures the Agency took when once beneficiaries turned 18 they were cut off from grants, yet some children were left alone with the family when their parents passed away.
She asked for clarity on the difference between ICROP and Mikondzo.
Ms Masango asked why SASSA, the DSD and the National Development Agency (NDA) all dealt with ICROP and Mikondzo, instead of just one.
Ms C Dudley (ACDP) asked if the Agency was saying they did not expect the vehicle to be as successful as it was, and that money spent was well spent as it had reached far more beneficiaries than they had anticipated.
Ms Dunkerley clarified that SASSA did not go out into the communities when dealing with ICROP, as they were accompanied by other partners such as the Department of Health, the NDA and the DSD. Applications for grants were needs driven, so factors such as inflation, job retrenchment and high unemployment rates combined to increase the needs.
On the issue on foster grants, Ms Dunkerley said it was difficult for SASSA, as they came in at the end of the process and it was the responsibility of social workers to find children in need of care and legally place them in foster care. The Agency ended up having to do applications for child support grants. SASSA did not want to leave children without anything which was why they assisted children to get some financial assistance.
She responded to Ms Mogotsi’s question about the duplication between ICROP and Mikondzo by explaining that Mikondzo was a ministerial-driven programme which expanded the foot print of the social development family. It was to make all communities aware of services provided by this family. It identified specific areas through research. All departments which worked with these two programmes must work together to try and use government resources more effectively.
Ms Bhengu said that ICROP helped SASSA to reach their targets, as it was easier for them to communicate with their people.
The Chairperson said that there must be a way of explaining the difference between Mikondzo and ICROP in documentation, as it caused confusion.
Ms Bhengu responded on the issue of consequence management. There was a misconduct board which determined if a person had been on the wrong side, or it was a mistake. Once they had decided if they were negligent, the Agency made people pay, or they were dismissed if necessary. She referred to the AG’s comment that they had had to reduce the amounts people paid. Where local content was concerned, they had a workshop and checked the register of the people who attended so that the misconduct board questioned them.
Ms Abrahams asked what the Agency could do to ensure that remedial action was taken, as it was a recurring challenge.
Ms Thandi Sibanyoni, Head of Internal Audit: SASSA, responded to the question on misconduct. The board dealt with all financial cases of misconduct. They either recovered the cost to SASSA or they wrote it off. They wrote it off in instances where someone loses the laptop if their house was burgled, and they report it to the police. If one left a laptop visible in their car which leads to a smash and grab, they were made to pay.
Ms Sibanyoni said they did not deal with insurance, as the state was self-insured. They could insure up to a cost of R250 000 per annum, and it became difficult for SASSA to decide what to insure when they had vehicles and laptops, as they had assets of over R1.6 billion. The only option was to try to recover when there was evidence of negligence. In some instances, when a car was damaged, they subjected people to a driving test and reviewed the cases. They were mindful that some instances cost thousands of rands, and there was an appeal process provided. They may extend the repayment period to allow the person to have some form of survival.
Ms Mogotsi asked for clarity on why SASSA did not have insurance.
Ms Sibanyoni responded that they do not have insurance because the government was self-insured. However, there could be circumstances which caused them to take out insurance. The challenge came with the insurance limit.
Ms Abrahams recommended that SASSA must have a policy that guides them on insurance as part of the consequences. They could not walk around with laptops not insured.
The Chairperson said they must go back to policy development, as people were targeted.
Ms Mogotsi recommended that the SASSA mandate be revisited.
Ms Sibanyoni responded to the question on bereavement expenditure, stating that when an employee died the accounting officer appoints a delegation which goes to the family to understand the logistics around the funeral. They had an in-house memorial service which funds transportation of family members. They also take care of costs relating to employees attending funerals. In cases of the passing of immediate families of employees, they were allowed to give support in terms of attendance, and transportation was given.
Ms Busi Mahlabongani, Head: Legal Services, SASSA, responded to the question on Trifecta. There was a court process and judgment, but SASSA was not part of the proceedings. There would still be phase two when they looked directly into SASSA. In instances where they were able to move off Trifecta buildings, they had done so. New terms were negotiated for cases where they were unable to move out. They had applied to National Treasury to regulate the irregular expenditure.
Regarding the question on deductions, she said there had been a misunderstanding regarding Net1 and other parties taking SASSA to the High Court because of the amendment they had made to regulation 21, stating that the accounts of the beneficiaries should not be debited for anything, but used only for receiving the payments of grants. The court had interpreted it to mean that the amendment did not have the effect of limiting debits on those accounts. The Agency had appealed the judgment, but was not successful. They were now appealing to the Supreme Court and waiting to hear if it would be granted or not. SASSA believed that the court was not understanding that the accounts were not necessarily opened by the beneficiaries themselves. This challenge of deductions was never dealt with by the Constitutional Court, except for the case of Lion of Africa, stating that child-related grants could not be subject to deductions as they were meant to support the children. The Constitutional Court never dealt with this matter, as Lion of Africa settled and agreed with SASSA.
Mr Chauke responded to the question relating to clarification around the work stream. In the financial statement, it was shown as irregular expenditure. This meant that the matter must be reviewed by management in terms of regulations. Once this process was concluded, if someone incurred this expenditure within the Agency, steps would be taken. If there were no officials who deliberately incurred the expenditure, SASSA had documentation and would approach National Treasury for a condonation of expenditure.
Mr Chauke said the possible irregular expenditure relating to ICROP was a contract that had gone out on a competitive bidding process. It was evaluated through the necessary steps and ultimately awarded. However, when the AG evaluated it, they had raised issues in terms of the information contained in the documents. When SASSA engaged with the AG they had reached a deadlock, as neither had sufficient information. They had started investigating this to see if they complied or not. It may or may not come as an irregular expenditure in the year 2017/18, but would come with a note that they had reviewed the process.
Ms Wilson asked when the ICROP contract had been formally approved.
Ms Masango asked about the status of the work streams, as she recalled the contracts were cancelled in June. If the contracts were cancelled in June and the work steams were still functioning, were they operating with the cancelled contract or brand-new contracts, or just operating.
Mr Chauke said the ICROP contract had been awarded in July/August 2016.
Ms Wilson said that the tender had been awarded in August, which had given them seven months till the end of the financial year end to receive a possible irregular expenditure of R115 million, which was the equivalent of R19 million a month. She asked how long this contractor had been paid for them to get R155 million. She asked what the NDIR and DSD were paying to participate in ICROP.
The Chairperson read a statement from the report which stated the Agency was in the process of establishing verification in order to conclude the matter.
Ms Malgas read a statement from page 139 of the report, which stated that SASSA had contracted a service provider for the ICROP programme, and it noted some allegations that a company might have provided misleading information, and the Agency was in the process of establishing the facts. She said that speaking of R19 million would mislead the press.
Ms Mogotsi said that there were financial notes in the annual report order to explain that the matter was still in process. She asked Members to wait for this matter to come back.
Mr Chauke responded to the question on the work stream by confirming that the work had been concluded. If a service provider had done work, they would still have leeway to engage with any work the service provider had done, but not necessarily pay any additional amount.
The Chairperson said the Committee still wanted to entertain the work which was being done and how it had been utilised in order to understand the value for money that had been paid.
Mr Chauke said that the bulk of the irregular expenditure related to that which had been disclosed in the year 2015/16 and had been carried over to the year 2016/17. It included the R358 million of Trifecta and R414 million of physical security relating to the previous year. The matter of security had been taken to National Treasury and they were awaiting feedback. They were also awaiting the amount of R316 million from CPS and Corruption Watch, which was in the hands of the court process. With the SAB&T case, the expenditure was under review in order to evaluate certain things. Once the Agency had undertaken a review process, they would be able to consider the condonation request to National Treasury. National Treasury was waiting for a scope resolution on the transactions before they could conclude on the matter.
Mr Chauke spoke about the qualified regression in the audit opinion. When SASSA presented the irregular expenditure, the AG had had a problem with the completeness of the disclosure. They went to an audit committee sitting, where they agreed to reconfirm this in order to check if projects which were affected by the CIDB were properly disclosed in the register. Mr Chauke had also done a check on accounts relating to local content. The register was resubmitted to the AG on 27 July. When this was done, the AG stated they were given a qualification, as the register seemed to be incomplete. The only problem they had was that the AG could not perform alternative measures to confirm that the register was correct. At this point, there was no way it could have been simplified. In the outcome of the deliberations, they had expected an outcome of material adjustments as an emphasis of matter.
Mr Chauke added that it was difficult for SASSA to provide information on the performance information, as they had tried to look for multiple entries to present it.
Ms Malgas asked for an answer on how 50% of the targets had not been met, but they still overspent.
Mr Chauke responded that there were targets that had a minimal financial impact on the actual overall expenditure, and those that had a material amount. When looking at this relationship, it was important to look at which element carried a lot of money around it. There were contracts which were running that were coming from the previous year and must still be serviced. SASSA was not proud of the performance information, and they had to put in measures to work on it.
Ms N Sonti (EFF) asked a question about the social relief of distress (SRD) awards. She asked what the other awards were. She asked how the Agency could move out from not achieving, as it needed to strive for achievement. The expenditure on goods and services was too much, and it was better if SASSA could decrease these amounts for the next financial year. On the issue of targets of food parcels, there was large expenditure on it, but people in the communities were dying of hunger and there was no food parcel delivery.
Ms Mogotsi said there was a risk in raising only issues of finance. One must also raise human issues, such as almost 500 000 children not getting their foster care grant. They were outside the net, and they needed to be brought back.
Ms K Jooste (DA) asked about the foster care grant reviews and lapsing. How many had lapsed, and what was their financial value? She also asked how may would lapse at the end of the year, as it was a crisis.
She asked about the 41% of babies accessing the child care grants. Was this number declining? It was worrying, because if the children did not have access to food through the grant, the damage that took place the first two years of a child’s life was permanent. The target should be set at 100%, rather than 50%. She was worried about deductions, as more than 70% of grants were child grants. She asked what the average amount of this deduction was.
Ms Dudley asked for clarity on who was best placed to be handling structures such as local content issues and safety regulations. She asked if SASSA had the right skills and expertise for handling this.
Ms Dunkerley responded to Ms Sonti’s question about social relief. She said ‘Other’ included assistance where there had been a disaster, such as humanitarian assistance for people who have been relocated into community halls. Social relief was provided in terms of the Social Assistance Act, and there were specific criteria on which they could help people. They were unable to provide for refugees in terms of this Act.
SheMs Dunkerley said foster care was given according to a court order which stipulated the period in which the child was placed and when it should be reviewed. The majority were given for two years but the Commissioner of Child Welfare was allowed to place a child in foster care until they turned 18. They only reviewed it when the court order was due to expire. Due to the lack of capacity of the DSD and the ability of the Department of Justice in providing court orders, SASSA had been given permission to pay grants even on expiry of the order. They were currently not lapsing grants unless it was at the end of the year in which the child turned 18. The target for children below one year was not 100%, as not every child born qualified for a grant.
Ms Dunkerley referred to the issue of deductions, saying it was important to make a distinction between direct deductions and those that happened in the banking space, which they had no control over. This was a serious problem, which was why they were petitioning the Supreme Court of Appeal.
Mr Chauke said that SASSA had discussed the issue of structures such as local content, and had looked at other options. SASSA had received an acknowledgement from National Treasury to engage the Independent Development Trust (IDT) in respect of certain structures. The outcome would determine the review of who was best placed to deal with that. Due to budget constraints, the Agency was now looking at what the existing mechanisms to work with infrastructure were.
Ms Malgas said when it came to building and specifications there must be norms and standards, and the Committee must consider if they could make recommendations on this.
Ms Masango referred to the AG’s statement on supply chain management, that SASSA and the NDA were having challenges. She asked if SASSA had a head of supply chain management. She asked about the progress of the finalisation of contracts with the South African Post Office (SAPO) that the CEO had presented in a previous meeting, and how a few days later there had been a deadline which was not met. She asked for the official take on this issue.
Ms Wilson referred to the operating deficits, and asked what the R214 million in consulting fees was for. Regarding payable exchange transactions, who was the third party for the payroll? Who was reporting on the fraud cases? Regarding the AG’s comments on the relationship with the Special Investigating Unit (SIU), she asked for urgent clarity on what was happening. The AG’s report stated that SASSA ran at a loss in the previous year, as they had to use their surplus funds. She asked what processes were followed when they started using surplus funds -- what negotiations took place with National Treasury and what were those funds used for?
The Chairperson said that it would be impossible for the presenters to deal with all of these matters, as the report was presented in a certain manner.
Ms Mogotsi said that the agenda for the day was the issue of SASSA’s annual report. SAPO was a different issue which involved court processes that SASSA was dealing with.
The Chairperson said they would not engage in a dialogue, as she had the right to protect the presenters in order for them to be productive. The matter of SAPO involved a special meeting being reported about the filing of an affidavit by the Minister, which was a matter outside the agenda of the day.
Ms Masango disagreed, and stated that the Committee had a standing agenda item on the progress that was being made by SASSA on this matter. She said that they had not met and discussed this item, and she asked for an update on the matter.
The Chairperson stated that they had been receiving weekly reports in order for them to ensure compliance, up to the filing of the report. The report had been filed and they were waiting for an outcome on what had been filed. Once this had been done, the Committee would look for the next step.
Ms Abrahams said that the agenda of the BRRR should be kept.
Mr Chauke said that the process of the surplus needed to be reported to National Treasury, and they had to ask to retain this surplus through a letter. In the year 2015/16, they had not reported a surplus in the financial statement. In the year 2016/17, they had reported a deficit of R302 million. He referred to page 145 of the report, administrative expenses, and said that they had had to overspend because they had retained this surplus.
Ms Wilson asked why Mikondzo and ICROP were not in the budget.
Mr Chauke said that they were in the budget. Funds either come from the baseline or the retained surplus
Mr Chauke said that part of the surplus funding was planned for Mikondzo, as it was provisional fees.
The Chairperson said she felt uncomfortable with the way SASSA were overseeing governance with regard to consultation fees.
Ms Malgas said respect was important. She referred to the differences between the amounts shown on page 12 of the annual report and page 48 of the presentation. As it was a public document, a correction must be made.
Ms Bhengu apologised for this, and said that the amount in the annual report was the correct one.
The Chairperson said that corrections must be made. Members should submit written comments or questions on anything which they might not have addressed.
The meeting was adjourned.
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