Inter-Ministerial Committee briefing on SASSA and SAPO impasse, with Ministers present

Public Accounts

08 November 2017
Chairperson: Mr T Godi (APC) and Ms R Capa (ANC)
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Meeting Summary

The Inter-Ministerial Committee (IMC) on Social Development briefed the Joint Meeting of the Standing Committee on Public Accounts (SCOPA) and the Portfolio Committee on Social Development. The briefing related to the request by the Committee for a National Treasury review of the SASSA/SAPO procurement process, as well as to attend to the related dispute of facts. The review, upon conclusion, was reported to the IMC and the IMC, taking into account recommendations by National Treasury then briefed the Committee.  Minister Jeff Radebe confirmed that he was now the Chairperson of the IMC on Comprehensive Social Security and this was decided by the President on 6 November 2017.

According to Minister Radebe, the IMC noted the intervention of the parliamentary committees and noted the public anxiety that has arisen due to the delay in the finalisation of the appointment of an entity to pay social grants, after the expiry of the current service provider contract at the end of March 2018.

At its meeting, the IMC considered the report of Treasury on the review process on the engagement between SASSA and SAPO. The IMC has taken a decision to fast track the introduction of an integrated payment system which will be provided by government through a partnership between SASSA and SAPO. The intervention included partnerships between SASSA, SAPO, Home Affairs, State Security Agency (SSA), and the establishment of a dedicated team to review and strengthen the project plan by next week Friday. The project plan will outline the detailed plan for execution, resource requirements, critical milestones and communication strategy. This will also include the commitment to draw in additional capacity from other organs of state as may be required. The roles and responsibilities of each party to the partnership will be detailed in the implementation protocol.

The IMC reaffirmed its commitment to implement the Constitutional Court order through the deployment of all necessary resources to achieve the implementation of the new system by end of March 2018. The IMC also reassured all South Africans, and in particular social grant beneficiaries, that no card will expire on 31 December 2017. There was a dedicated team chaired by the Director-General of the Department of Planning, Monitoring and Evaluation (DPME) that will drive this programme to its finality.

Although the vast majority of Members welcomed the intervention by the IMC, the IMC statement was followed by a heated debate on a letter from National Treasury addressed to the Acting CEO of SASSA. This letter was circulated to Members before the meeting. The conclusions in this letter stated that SASSA should not have approved the disqualification of SAPO; that the specification developed by SASSA was biased; that the Council for Scientific and Industrial Research (CSIR) report was not used for its intended purpose; and that SASSA took more than 60 days to evaluate and adjudicate one proposal.

Members were of the opinion that these statements by National Treasury should be interrogated in the meeting and that the Minister of Social Development and relevant officials should answer to these allegations that SASSA and the Department had created this crisis.

The Co-Chairpersons cautioned that this letter was not addressed to the Committee, it was unofficially circulated and it was not a report to the Committee. This led to some Committee Members protesting vehemently that this was stifling and suppressing oversight. Some also questioned the functionality of the IMC and asked where the IMC was when all the shortcomings played out and how come the Committee did not even know who was chairing the IMC.

On the IMC statement, Members wanted to know when the Committee will start to get details on the costs, because this hybrid model was supposed to be intergovernmental and now private entities will be involved. There was a question whether the costs might exceed what CPS charged, whether the banks will be able to prevent illegal deductions and how the IMC envisaged the partnership between SASSA and SAPO.

Other questions by Members included how strong the involvement of the Banking Association of South Africa (BASA) was, what role SSA will be playing in this process and who distributed the letter. Members wanted a commitment that the Committee will engage on who the National Treasury findings once the IMC processes are in place.

Meeting report

Chairperson Godi welcomed everyone and commented that delegates from National Treasury, the South African Reserve Bank (SARB), the Hawks, the South African Social Security Agency (SASSA) and the South African Post Office (SAPO) are all represented in the meeting. Last week the Committee agreed that National Treasury was going to do a review of the SASSA/SAPO procurement process, as well as to attend to the related dispute of facts. The review was to be concluded this past Monday and reported to the Inter-Ministerial Committee (IMC) on Social Development the following day. Today, the IMC, through its representatives, will report what was resolved the previous day. The Committee understood the decisions by the IMC to be binding to the parties involved. The IMC was now being led by Minister Jeff Radebe, Minister in the Presidency.

Statement by the IMC on Comprehensive Social Security

Minister Radebe confirmed that he was now the Chairperson of the IMC on Comprehensive Social Security and this was decided by the President on 6 November 2017. Other members of the IMC present at the meeting are the Minister of Telecommunications and Postal Services, Dr Siyabonga Cwele, Minister of Social Development, Ms Bathabile Dlamini, the State Security Minister, Mr Bongani Bongo, Deputy Minister of Communications, Ms Tandi Mahambehlala, and the Deputy Minister of Finance, Mr Sfiso Buthelezi. 

Minister Radebe confirmed that the IMC met the day before to look at all the issues that pertained to what SCOPA has been dealing with. The IMC has crafted a statement that described the plan of action that would be embarked on and it also described the major decisions taken at the meeting.

The statement read as follows:

The IMC on Comprehensive Social Security met at its ordinary meeting on Tuesday, 7 November 2017, to consider progress on the implementation of the Constitutional Court order relating to the payment of social grants. As per the recommendations of its previous IMC meeting held on 13 September 2017, considered the reports from SASSA, SAPO and National Treasury on its engagement with the two entities on the same issue.

The IMC met against the backdrop of ongoing engagement between SASSA and SAPO, and received briefings on the recent meetings between the Joint Committees of SCOPA and the Portfolio Committee on Social development. The IMC noted the intervention of the parliamentary committees and noted the public anxiety that has arisen due to the delay in the finalisation of the appointment of an entity to pay social grants, after the expiry of the current service provider contract at the end of March 2018.

At its meeting, the IMC considered the report of National Treasury on the review process on the engagement between SASSA and SAPO. National Treasury confirmed the hybrid model for the payment of grants.

The IMC is of the view that government will move with the necessary speed to resolve all outstanding issues related to this matter. The IMC has thus taken a decision to fast track the introduction of an integrated payment system which will be provided by government through a partnership between SASSA and SAPO. The approach will focus on the consolidation of the respective strengths of each entity and possible additional capacity from other parties.

The intervention included partnerships between SASSA, SAPO, Home Affairs, State Security Agency (SSA), and the establishment of a dedicated team to review and strengthen the project plan by next week Friday. The project plan will outline the detailed plan for execution, resource requirements, critical milestones and communication strategy. This will also include the commitment to draw in additional capacity from other organs of state as may be required. The roles and responsibilities of each party to the partnership will be detailed in the implementation protocol.

The mandated dedicated team will be to ensure finalisation of the cooperation agreements between SASSA and SAPO, the governance and contracting framework, risk assessment and mitigation, and monitoring and evaluation. The dedicated team will report weekly to the IMC and will commit resources needed for execution of the project.

The IMC reaffirmed its commitment to implement the Constitutional Court order through the deployment of all necessary resources to achieve the implementation of the new system by end of March 2018. The IMC also reassured all South Africans, and in particular social grant beneficiaries, that no card will expire on 31 December 2017.

Minister Radebe confirmed that these were the decisions taken and all agreements by the parties involved in this endeavour will be in place by next Friday.  There was a dedicated team chaired by the Director-General of the Department of Planning, Monitoring and Evaluation (DPME) that will drive this programme to its finality.

Discussion

Co-Chairperson Godi said it was a pointed statement in terms of timeframes, milestones, an identifiable team, resources and weekly reporting. He asked that if all agreements will be signed by Friday, 17 November, if Parliament can then be furnished with those details by 22 November.  He thanked SASSA, SAPO, and especially National Treasury, and commended the IMC’s leadership.

Mr T Brauteseth (DA) welcomed the IMC’s statement and said it was a victory for oversight. He referred to a report before him where under its conclusion it stated that SASSA should not have approved the disqualification of SAPO; that the specification developed by SASSA was biased; that the Council for Scientific and Industrial Research (CSIR) report was not used for its intended purpose and that SASSA took more than 60 days to evaluate and adjudicate one proposal. SASSA had created this crisis and the Minister and the Acting CEO needed to reflect on the error of their ways. He asked when the Committee will start to get details on the costs, because this hybrid model was supposed to be intergovernmental and now private entities will be involved. He wanted to know about the possibility that the costs might exceed what CPS charged and whether the banks will be able to prevent illegal deductions. He asked when the Committee will get these details.

Mr C Ross (DA) also commended the statement by the IMC. He said SCOPA cannot be held in the dark about who the Chairperson of the IMC was and that it was extremely disappointing. It was very important that there was mutual respect in a partnership and he expressed hope that there was mutual trust between SASSA and SAPO. He asked the IMC how this partnership was envisaged and when the Committee will be getting details on how this partnership will be structured. In terms of additional capacity, he asked how strong the involvement of the Banking Association of South Africa (BASA) was, if the dedicated team will be based in DPME and when feedback on the team will be given to the Committee.

Ms L Wilson (DA) also referred to the conclusions in the report and said these were very clear on the manipulation by SASSA.

Co-Chairperson Godi said the ‘report’ was not presented. Minister Radebe read a statement and he thought engagement needed to be on the issues raised in the statement.

Ms Wilson said the report was handed to Members as part of the meeting and it was important to know why this process was manipulated and what action will be taken against those responsible for the manipulation.

Co-Chairperson Capa apologised for arriving late and said she had been in an accident. She appealed to Members to adhere to the mandate of this meeting and said all other oversight aspects of both the Portfolio Committee on Social development and SCOPA will be dealt with in its particular oversight arrangements. She also asked officials involved in this process to report to the Committee first instead of making statements in the media, because it undermined the functionality and process of an internal arrangement.

Co-Chairperson Godi said the IMC statement should have been circulated and not the document in question.

Mr Brauteseth raised a point of order and said it seemed the oversight function was being stifled. Members had been given the National Treasury report and should be able to comment on the report.

Co-Chairperson Capa interrupted him and said he had not been given the floor.

Ms Wilson said she was glad that there was light at the end of the tunnel, but the fact still remained that Members had to go through extremes to get here and had to go through monumental extremes to get the IMC involved to deal with this process appropriately. This problem would have been resolved a long time ago if the conclusions raised in the document had not taken place. She said she will not be stifled and needed to know who manipulated the system and what will be done to hold those responsible for the manipulation to account.

Co-Chairperson Godi said the document Members are referring to as a ‘report’ was a letter to the Acting CEO of SASSA and it was not addressed to Parliament.

Mr E Kekana (ANC) welcomed the intervention by the IMC and said it had been a decision by Members to request the IMC to intervene. It would be incorrect of Members to raise other issues. In the last meeting it was evident that parties have deadlocked and it was decided that the only deadlock breaking mechanism would be to refer this to the IMC. Tempers are high among Members now, because there were media statements made by the SASSA spokesperson that undermined the whole process. He asked that the spokespersons of both SASSA and SAPO refrain from making statements and the only statements should come from the IMC.

Ms N Mente (EFF) said Members received the National Treasury report before the IMC statement. Members cannot be suppressed to not talk about the report, because the Committee mandated Treasury, giving them specific instructions to investigate, re-evaluate and report.

Co-Chairperson Godi reiterated that what Members had in front of them was not a report for the Committee, but rather a letter addressed to the Acting CEO of SASSA.

Co-Chairperson Capa said the Committee looked at the number of days left and requested the intervention to get the grants to beneficiaries on time. It was not to identify ‘mischief makers’. She appealed to Members to move forward.

Ms Mente said she specifically asked at the last meeting where the Hawks was, because Members wanted to know who was engineering the delay. The Committee will not be doing ‘suppressed oversight’. She referred to the IMC statement that read ‘IMC noted the intervention of the parliamentary committees and noted the public anxiety that has arisen due to the delay in the finalisation of the appointment of an entity to pay social grants’. She said the National Treasury report stated who caused this delay and the Hawks must investigate who this person was that delayed the process. The IMC has intervened, but the Committee needed to know who the problem in the Department was and that person must account to law enforcement, because it was a crime. She referred to the IMC statement that read that the “The IMC is of the view that government will move with the necessary speed to resolve all outstanding issues related to this matter.” She asked for clarification if the IMC was disregarding the hybrid model altogether. She asked if the four services SASSA required from SAPO would be carried out by SAPO or if SAPO will be carrying out only the one approved service.

Mr M Hlengwa (IFP) said he was a “doubting Thomas”, because the Committee has been down this road before with timelines and commitments presented to the Committee. The IMC was dealing with people who lacked the political discipline to adhere to their own commitments. This process was initiated by Members and it would only be fair if Treasury briefed the Committee on the outcomes of the review. This country spent almost R500 000 on the CSIR report which was supposed to be an upfront assessment of what was possible and not possible. At some point the National Treasury report needed to be addressed and he stated he was glad the Hawks was present, because the Committee was dealing with a criminal element that was deliberately designed to derail the process. It cannot be that now that the IMC has spoken it was to be “Amen”.  This would not have gone to the Constitutional Court had people done what they were supposed to do. The Committee was dealing with a collapse of contract management and crooks from CPS that was taking money from the elderly. It was an injustice to accountability that the IMC had to be roped in, because there was a collapse at both SASSA and the Department of Social Development (DSD). The IMC ran the risk of being delayed by these people and it was the job of the Committee to alert the IMC that they will be dealing with dishonest people. Today’s meeting was based on the National Treasury report given to the IMC and it was making a mockery of oversight if the report was not addressed.

Ms C Madhlopa (ANC) appreciated the IMC report. In the last meeting both Ministers indicated that they are committed to the process. Treasury was asked to fast track the review process to be completed by Monday, to then brief the IMC on Tuesday and today the IMC would come to brief the Committee on the process. It was important for the Committee to allow the process to continue and to allow both the IMC and DSD to finalise what they committed to finalise. The Committee can engage on Tuesday once detailed reports have been submitted.

Ms C Dudley (ACDP) also welcomed the IMC statement and said while it was important to interact with the National Treasury report, Members should be conscious of the short period time that was left and this process needed to be fast tracked. The people sitting in this meeting are the people that should be fast tracking the process.

Ms N Sonti (EFF) said there was something not quite clear between SASSA and SAPO. The Committee wanted to know who was delaying the process because what it wanted most was that 1 April 2018 had to be a success. It was worrying, because time was running out, the delays are leading up to a crisis and the Committee was tired of strategies

Ms T Chiloane (ANC) thanked the IMC for the statement. As much as the Committee agreed that the IMC should be here today, she was still of the view that Treasury should guide this. She acknowledged that it was a letter addressed to the SASSA Acting CEO, but it needed engagement in terms of the details in the letter. She asked if the statement from the IMC took precedence over this report and if the Committee will still interrogate the report.

Co-Chairperson Godi said the National Treasury report was supposed to go the IMC to inform the decisions that they will take. The statement by the IMC was arrived at by taking into account the report by National Treasury. There are no issues from the report that are separate from the statement, because the statement was informed by the report. What Members had in front of them was not the report, it was a letter addressed to the Acting CEO. The National Treasury report went to the IMC on Tuesday and it informed the statement given today.

Ms Chiloane said she understood, but SCOPA dealt with procurement and public funds.

Chairperson Godi said he will address some of the issues raised by Members, but he first wanted Members to address matters relating to the IMC statement.

Mr M Booi (ANC) said what the IMC presented today was what the Committee wanted to achieve. The details that been raised by Members were and had always been the job of SCOPA and the Committee has never deviated from its mandate. Only after the IMC has given its progress report on the 21st, the Committee can start to look at the issues raised by National Treasury. It was in the interest of South Africa and accountability that the Committee prevailed. SCOPA has never micromanaged departments or undermined government structures.

Ms N Khunou (ANC) said the anxiety in this meeting was caused by the fact that the IMC has been meeting and there had been no progress previously. The minutes of the last meeting will show that the Committee said Treasury should go and look at the reports from CSIR and both entities and they will be reporting back to the Committee today. At that point the Committee understood that the Chairperson of the IMC was the President and assumed that it would then be difficult to get the President to come to the Committee and report. She suggested giving National Treasury five minutes to address this issue.

Co-Chairperson Godi said when the IMC report on the 21st and even beyond, the Committee could still go back to investigate what happened. For today, the focus should be on the report by the IMC. It was a matter of sequencing and strategic planning and once the commitment and agreements are in place, the Committee will have the luxury to look at what had happened. If there was not anything Members wanted to raise on the IMC report, then the meeting should be adjourned.

Mr Brauteseth said he wanted a commitment from Co-Chairperson Godi that SCOPA will be calling National Treasury to make the letter a report to the Committee. He wanted to make it clear to all SASSA officials that what they had been saying up to now had been misleading and dishonest and the Committee will be taking action against them. Lying to and misleading Parliament was an offense. 

Co-Chairperson Capa said the review related to the fact that the SASSA CEO had closed the issue of SAPO after correspondence and National Treasury was to review that process. She supported any other process as long as it did not delay what the Committee had set to achieve.

Mr Ross said the Committee should support the IMC in terms of its endeavour to find a solution. It was still an interim solution and perhaps that will play out into a permanent solution once common ground was found with SAPO. He addressed Mr Booi and said the Members did not want to micro manage, but SCOPA was obligated to do that in terms of the Constitutional Court order.

Ms Wilson asked what role SSA will be playing in this process.

Ms H Malgas (ANC) asked who distributed the letter.

Mr Kekana said the Joint Committee agreed, in its very last meeting, that there was a deadlock. A decision was then taken that National Treasury must review the issues and refer it to the IMC for the IMC to come and report to the Committee. The IMC’s mandate to unlock the deadlock and to ensure compliance with the Constitutional Court order was very clear. That did not absolve the mandate of SCOPA, because if there was wrongdoing, it needed to be investigated. Engagement can only happen after the 21st, because the Committee would be preempting a report it did not have.

Ms Mente said she did not have a problem with what the IMC had to do. Even the IMC acknowledged a deliberate delay and it was an important issue to determine who caused the delay. Someone tried to ensure that SAPO was not going to get anything.

Mr Hlengwa was told about this before and nothing happened then. If the Committee did not raise these issues to conscientise the IMC, Members are not doing the process any favours. The Committee has been lied to and did not even know who was chairing the IMC until this meeting. The Committee cannot in good faith accept that the IMC has been functional in a satisfactory manner. The Committee should be able to enrich the work of the IMC and failure to do so will come back to haunt the Committee. The Committee has requested minutes from the “so-called workshop” and minutes from the technical committees and the Committee had asked where the IMC was when all the shortcomings played themselves out. There had been no responses. He said it was not fair that there was now an expectation that Members had to accept the IMC intervention in good faith while the IMC had contributed to this kind of collapse.

Co-Chairperson Godi said he wanted to give Minister Radebe a chance to respond, because Members were talking among themselves and the IMC was wondering why they are here. He also said it was his responsibility to look at the processes strategically so that the Committee did not get sidetracked by other issues, legitimate as they might be.

Minister Radebe thanked the Members for their positive attitudes and said it would give the IMC encouragement as it worked toward this goal to have social grants paid on 1 April 2018. It was very clear that the IMC was driven by the Constitutional Court order and everybody was working around the clock. By next week Friday all the cooperation agreements, especially between SASSA and SAPO will be signed. SSA was part of the IMC and had an interest in this matter, particular on matters of cyber security.  On costs, the Ministers said all details will be made evident once the cooperation agreements by all departments involved had been signed. On illegal deductions, Minister Radebe said the Constitutional Court had been very clear that it should not be allowed. It has been brought to the attention of the IMC that there was apparently one case in KwaZulu-Natal where a court took a decision contrary to this understanding. The matter was being appealed and the IMC was seeking legal advice as to whether it could be taken directly to the Constitutional Court. National Treasury was part of the IMC and reported to the IMC. They presented a report the previous day and the IMC had accepted some of their proposals and the IMC took the Treasury assessment into account. On additional capacity, the Minister said it would also be dependent on the cooperation agreements. He assured Mr Hlengwa the IMC will change him from a “doubting Thomas” to a believer and he also mentioned that he did not know who circulated the letter, but it was definitely not authorised by the IMC. He emphasised that no cards will expire after 31 December 2017. The IMC will reflect on the comments by the Committee to incorporate into the project plan and the Director-General of DPME will be coordinating the technical committee. The IMC will be reporting from time to time to the appropriate parliamentary committees.

Mr Brauteseth said he needed clarity on his question. The plan was to have agreements in place by next week Friday and that will involve using commercial entities.  He asked how a procurement process will be happening by next Friday.

The Minister replied and said the main drivers will be government, particularly SASSA and SAPO. Depending on the then updated project plan, other parties will be considered.

Co-Chairperson Godi said everybody wanted results and in the interest of South Africans, Members cannot afford to play on the anxieties of the most vulnerable. As leaders, Members should always be solution-orientated. The Committee will be writing a letter to invite the IMC for the 21st. At this point the Committee was no longer interested in listening to officials and wanted to hear from the IMC as the political leadership. He requested the cooperation agreements to be sent Members before the 21st and he thanked the IMC for being responsive to the call of Parliament.

The meeting was adjourned. 

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