SASSA progress report; Committee Legacy Report; Committee Report on petition

Social Development

13 March 2019
Chairperson: Ms R Capa (ANC)
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Meeting Summary

The South African Social Security Agency (SASSA) gave a progress report on the migration process successes and challenges, measures to combat corruption, and the way forward. Members were informed that SASSA is now in a post-transition phase and their main focus is to stabilise the new environment. This includes a re-modelling of the South African Post Office (SAPO) and establishing governance structures. The behaviour of beneficiaries has been consistent in the new system. Most beneficiaries are being paid through the new system but some are using the Easy Pay account or banking institutions of their own choice. SASSA will ensure that an access point, not necessarily a cash pay point, will be available within a 5km radius so that beneficiaries can receive their money.

Servicing cash pay points is expensive so where pay points are no longer being used, they will be removed. The rolling out of biometrics will start again and this will ensure the security and integrity of the system. SAPO has faced a challenge of capacity in the Integrated Grants Payment System where the volume is too high and they will report back to SASSA on this with full details by the end of March 2019. On fraud and corruption activities, several arrests have already been made and more arrests will happen soon. Both SAPO and SASSA employees have been found to be complicit in fraudulent activities. The main areas where this takes place is through card issuing and illegal card-swopping by beneficiaries. A joint practice note will be implemented in SASSA and SAPO to combat corruption. The online verification system will also help to verify the identity of the person receiving the card.

Members asked what is being done to ensure there are no ghost beneficiaries; about educating beneficiaries about the new system, long queues, providing chairs for the elderly and improving the payment environment, preventing fraudulent activities in the future and the pricing arrangement between SAPO and SASSA. The Committee was assured that there has never been a month where beneficiaries did not receive grants and no queries have arisen on the contract between SAPO and SASSA. They were also assured that the rolling out of biometrics will strengthen the integrity and security of the system as well as build confidence in it.

The Committee Report on the petition sponsored by Mr Waters on behalf of East Rand residents was adopted. The Committee also adopted its Legacy Report.

Meeting report

SASSA Transition & Payment of Social Grants: progress report
Mr Abraham Mahlangu, Acting Chief Executive Officer: SASSA, said the deadline set by the Constitutional Court has been met and they have migrated all beneficiaries who were previously serviced by Cash Paymaster Services (CPS). They are now in the post-transition phase. In this phase, there is a focus on the stabilisation of the new environment. This includes capacitation of functional mapping and looking at resources on both the SASSA side and the South African Post Office (SAPO) side. SASSA is working hard with SAPO and they finalised and signed the Master Services Agreement and the Service Level Agreement. The focus now is to establish governance structures and re-model SAPO. SAPO was never meant to service these kinds of beneficiaries so a re-modelling of post offices has to be worked on. On fraudulent and corruption activities, several arrests have already been made in various provinces and imminent arrests should be effected soon. Action has also been taken to internally manage fraudulent incidents. SASSA has been working closely with law enforcement agencies on this.

Ms Dianne Dunkerley, Executive Manager for Grants Administration: SASSA, said they have completed migration of all cash paid beneficiaries and the contract with CPS has ended. The last payments were done in September 2018. To get beneficiaries with the old card out of the system, a campaign was needed to tell people to swop their card. An assessment was done on those who had not yet card-swopped and an account was pre-opened for them to access money immediately. Some people have come in to collect their new cards, activated them and received money. Some people have not done this and the reasons could be that they are no longer in the country, or due to fraudulent activities or they are not registered. The largest numbers of people who still need to collect the new card are in Limpopo and Free State. At the end of March 2019, payments will be suspended for those who have not yet come in. Most beneficiaries are being paid through the new system, other people go through the Easy Pay account and some are paid through banking institutions of their own choice.

Ms Dunkerley said beneficiary behaviour has changed and this has been tracked closely. By far, most people are using ATMs to access money, the next highest is through merchants and then there are a small number of people who collect over the counter at SAPO or at cash pay points. There has been consistent behaviour since the new card was introduced. SASSA has been working with local communities and the beneficiary population to see who is having difficulty to access money at pay points. Where there is no one to service, pay points have to be removed. All cash pay points are being reviewed now. SASSA will ensure that an access point will be available within a 5km radius. Those who go to ATMs are faced with very long queues. Beneficiaries must know that they can access their money at any time of the month and this will reduce the long queues.

Ms Dunkerley said they have resolved differences with organised labour and the biometric enrollment of applicants and beneficiaries will start again. This will make the system more secure and build confidence in it. There is ongoing reporting of real-time management to see where the challenges are. There is a challenge in the capacity of SAPO’s Integrated Grants Payment System (IGPS). There have been rejected transactions as a result of it not being able to cope with the high volume. Meetings have been held with SAPO and they will report back to SASSA with full details by the end of March. Cash pay points are still fairly rudimentary as the work is done manually. There is a long-term engagement with SAPO to ensure there are chairs to sit on while beneficiaries wait in queues. The agreements signed with SAPO will be implemented over a period of time and then reviewed to see if it is working. They are currently revising the Service Level Agreement. There is a move away from a project-based approach towards an operational approach by establishing governance structures.

Ms Dunkerley said the challenges around fraud and corruption were found mostly in card issuing and illegal card swopping. Post office employees were involved as well as SASSA employees. Investigations have to happen before beneficiaries can be fully reimbursed. There were a number of arrests made in Gauteng and Kwa-Zulu Natal and there are pending arrests too. The investigations are at a delicate stage right now. There are a number of disputed withdrawals where a beneficiary claims they did not withdraw their money. There are also fraudulent accounts opening at SAPO where the card is issued to an unknown person. There have been incidents of records being changed on the SASSA system. Within SAPO and SASSA, internal control measures are being looked at. A joint practice note will be implemented in both SAPO and SASSA. The online verification process will also be implemented to verify the identity of the person who is receiving the card. SASSA is working with law enforcement and government bodies to address fraud.

Ms S Tsoleli (ANC) asked on a scale of 1 to 10, has there been 100% migration – where 1 is very bad and 10 is excellent. Is the migration where it is supposed to be? There is a concern about educating beneficiaries. Must they collect their money on the first or last day of the month? There was a method where beneficiaries would collect money on different dates in order to minimise long queues, is this system continuing? Beneficiaries must know so they don’t all go to collect money on the same day. Do these fraud incidents happen at cash pay points? When the presentation deals with the challenges, it would have been better to set thee out individually and explain how each one being addressed. Can this be sent to the Committee in writing? In the news, there has been a company involved in fraudulent activities and corruption. The news says that Microsoft has terminated a contract with them. SASSA relies on this same company for biometrics. Is this not risky? Are there plans in place to deal with this?

Mr Mahlangu replied that on a scale of 1 to 10, they are sitting at 9 at the moment. On the new SASSA-SAPO collaboration, there has never been a month where grants were not paid and no queries have been raised on the contract between themselves and SAPO. On the staggering of payments, money is available across all channels and this impacts long queues. Fraud does not only happen at cash pay points. On setting out challenges and remedial action, this will be tabulated and sent to the Committee. The company which has been in the news has had their licence withdrawn. There has been no withdrawal of the product, which is Microsoft. This situation is under control and there is no risk of shutdown.

Ms Dunkerley said they have standardised the payment date. From January of this year, the payment date is the first day of every month and where it falls on a public holiday or weekend, the day before the first day is when grant money becomes available. The payment schedule has been shared with National Treasury and approved by them. The only exception is December where teams finish up the payments by 15 December so that the festive season can be enjoyed. On staggering of payments, SASSA is having ongoing discussions with industry role players to see whether staggering is the way to go.

Mr Jabulani Makondo, Acting Chief Information Officer: SASSA, said the company in the news is one of the few companies authorised to sell Microsoft licences. This is what has been withdrawn and it does not affect SASSA at all. There will be a meeting with the executive of this company to inform SASSA officials of the implications of what is happening and the impact it may have on SASSA.

Ms Tsoleli said there was a complaint received about an incident of a deceased person receiving grant money from SASSA. The problem may lie with the Department of Home Affairs (DHA).

The Chairperson replied that it is a problem with the DHA but asked if SASSA could approach Home Affairs and provide members with more details on it.

Ms B Masango (DA) said people who receive money over the counter at SAPO is 4%. What does it mean to have a new partnership agreement with SAPO when it is only 4%? On the working environment, what is happening at SASSA offices? The queues are very long. On biometrics, are fraudulent activities the reason the system was stopped? When the contract existed with CPS, SASSA was paying them a fee of R16.44. How much is SASSA paying SAPO? How is SASSA dealing with the new problems in the post-transition phase?

Mr Mahlangu replied they will deal with the reported incident of the deceased person. On the new set of problems, after a transition or major change, there will always be new management issues. The new problems relate to understanding the new system, how quickly people are able to adapt to the change and how well our messaging is targeting the people. On 4% receiving money over the counter at post offices, the contract is massive and includes not only access to grants but the payment of the entire grant value chain. There are a number of elements. The choices people make to receive their grant come down to a matter of advertising and structures that are convenient and accessible. The administration is doing fine under the new collaborative effort. On the working environment, they are in the process of filling the current vacancies.

Ms Dunkerley replied there are different ways in which fraud manifests itself. This includes card-swopping at ATMs. SASSA is bringing biometrics in to strengthen the security and integrity of the system.

Mr Mahlangu added that it is a complex fraud arrangement. A care-giver might have stolen a card from a beneficiary and withdrawn the money. There are other situations where beneficiaries are dishonest. This is why proper affidavits must be completed to inform SASSA that they did not receive the money.

The Chairperson said most elderly people live with relatives who are drug addicts. A grandson will take the money and use it for drugs. She spoke in isiXhosa.

Mr Tsakeriwa Chauke, Chief Financial Officer: SASSA, said the current pricing arrangement with SAPO is segmented. There are three broad categories of fees payable to SAPO. After money is deposited into an account or card, the charge is dependent on the behaviour of a beneficiary. Firstly, if they access money through a cash pay point, this transaction attracts R51.77. Secondly, a beneficiary who accesses benefits over the counter at SAPO outlets attracts a fee of R23.49. Thirdly, where beneficiaries go to an ATM or merchant, this transaction attracts R13.00. These fees are subject to review. SASSA first wanted to see how beneficiaries behaved.

Ms N Sonti (EFF) spoke in isiXhosa and the Chairperson replied to her in isiXhosa.

Ms Sonti replied in isiXhosa.

The Chairperson answered in isiXhosa.

Ms T Khanyile (DA) thanked Ms Dunkerley for providing assistance when it comes to challenges on the ground. How do you ensure there are no ghost beneficiaries? Can you give a time frame of when biometric enrollment will be implemented? What measures have been put in place to avoid fraudulent activities taking place in the future? Can you provide a figure of how much was actually lost due to fraudulent activities? There was a case of a mentally challenged beneficiary whose sister was her guardian. Her sister collected the grant money but failed to give it to her for food and basic necessities. She was also gang raped when she went to beg for food. For three months, she has still been living under these same conditions. In cases like this, what is the Department of Social Development (DSD) doing? What are the interventions? Are there chairs being provided in the long queues? Most beneficiaries are elderly and require this.

The Chairperson said the meeting is dealing with the payments. The social part of it remains an issue with the DSD. SASSA has one duty, the duty to pay the right beneficiaries. The other questions must be directed to the Department.

Mr Mahlangu replied the rolling out of biometrics is a fully signed-off project. The project plan can be sent to the Committee which indicates how the project is going to be implemented.

Ms Dunkerley said ghost beneficiaries have been an issue for quite some time now. On a daily basis, SASSA goes in and checks all the transactions done on the system to confirm there is a file behind the transaction. The necessary certified copies must be in the files. Where there is anything that cannot be verified, the grant is put in a suspended status while further investigations are done. This is a measure to mitigate against ghost beneficiaries. The roll out of biometrics cannot happen overnight. It has been discussed with organised labour to see the impact it will have on SASSA staff.

The Chairperson referred to the new SASSA cards that have not been claimed which shows those owners do not exist and are ghost beneficiaries. The process of migration and changing the system has helped to identify the fraudulent processes of the beneficiaries themselves.

Ms Khanyile asked how much has actually been lost due to fraudulent activities.

Mr Mahlangu replied loss will happen in two ways. There are cases where people have confessed they did withdraw money but they still want to claim from SASSA. SASSA staff are battling with the validity of complaints. There can be reconciling of cases which are genuine but there are other cases reported as a loss but when investigated further the affidavits contain confessions.

Ms V Mogotsi (ANC) said the migration process is unfolding. Where are the panel of experts? Are they assisting in checking the risks that have been flagged? Does SASSA get a report from the panel?

A SASSA official replied that the panel of experts assisted SASSA in submitting the final report to the Constitutional Court. The panel of experts has finished its work now.

The Chairperson asked if SASSA is out of the Constitutional Court order now.

A SASSA official replied that a response is needed from the Court. SASSA continues to update the Court and they are advancing beyond what was stipulated in the court order.

Ms C Madlopha (ANC) said there is a issue of ghost beneficiaries. What other means has SASSA used to trace the beneficiaries? Can copies of the list of these beneficiaries be given to the Committee? Members are going out on constituency week and copies of these lists will assist Members to trace them. The officials were commended on their report and it shows that the poorest people are being serviced.

The Chairperson agreed and said the report was clear and articulate. Elderly people suffer the most from corruption. We must all join hands to fight corruption and implement plans to mitigate this.

Ms Sonti spoke in isiXhosa.

The Chairperson translated Ms Sonti’s concern for officials to answer. The concern is that elderly women are taken from previous pay points and transported in old bakkies to another pay point. By the time they arrive, they are too late to pay the funeral parlours. They are also responsible for paying their own transport fees.

Ms Dunkerley said the whole issue of pay points is being reconsidered. There are a significant number of pay points where the service is being provided but no one shows up. Particularly in the Eastern Cape, a number of pay points follow a paid route but people use their own transport to get to a point. SASSA has tried to explain through community leaders which points are available. There is currently a re-looking at pay points to make sure beneficiaries can access money within a 5km radius, either through a post office or pay point. Communication with community leaders needs to be strengthened.

The Chairperson said she has seen the Acting CEO has been in King William’s Town and Kwa-Zulu Natal to engage with traditional leaders on where pay points should be. Traditional authorities will be better facilitated now that Parliament has passed a Bill to regulate them. The SASSA report was commended and officials were asked to make closing remarks.

Mr Mahlangu thanked the Committee for their guidance in understanding the issues on the ground. Going forward, the collaboration with SAPO and SASSA will grow.

The Chairperson noted a Bill was approved yesterday to ensure SAPO is a state bank. The posting side and the banking side will be separate from one another.

Committee Report on petition sponsored by Mr Waters
The Chairperson asked members to look at paragraph 1. Is everyone happy with the time-frame?

All members agreed.

The Chairperson referred to paragraph 2 and said the Committee decided a meeting would be established. An engagement took place between the Committee and Mr Waters. The DSD was notified and a meeting was organised. These actions must be included in the report.

All members agreed.

The Chairperson said the affected province is Gauteng. The DSD was informed and a meeting was facilitated with the Head of the Department to agree on policy direction and implementation. DSD stated there were insufficient resources to fund Non-Profit Organisations (NPOs). The Committee told them to review the funding policy of all NPOs. During this review process, the Committee recommended a bigger meeting should be facilitated because it is an issue across the entire country. To understand the challenges better, a meeting with the representatives of all NPOs in the country is needed. Mr Waters was comfortable with the way the Committee managed the petition and said he would go back to his constituency and explain to the community. He would explain to them that there is a gross underfunding but that this is widespread throughout the entire country. The Committee is taking steps to ensure DSD finishes the policy review and takes into account the funding of NPOs.

Ms Masango asked about the timing of the report.

The Chairperson replied that a response to the petition was not sent to the Speaker at the time. Now the Committee has to report to the Speaker to inform her that a petition was received and steps were taken but there was a failure to send it to her – due to misadministration.

Ms Abrahams said the heading of the report states a petition was submitted by civil pensioners.

Ms Masango added that the body of the report does not talk about civil pensioners.

The Chairperson replied that the petition concerns the underfunding of child welfare.

The Committee Secretary said the heading is misleading. It was taken from a previous petition. The heading must be changed because it was brought on behalf of children’s organisations. All Members agreed.

The Chairperson said the report will be submitted as a response to the Speaker. Mr Waters understands the dilemma of funding. Other NPOs must be reached out to so that they do not make similar petitions. This petition must be used and a solution found from it. Can we adopt the report with the corrections?

The Committee agreed.

Committee Legacy Report
The Content Advisor of the Committee explained the format of the report is two-fold. The first part contains the narrative and content of the work done. The key issues which the Committee identified in their oversight visits were food security, funding of NPOs, gender-based violence, child protection, absorption of social workers and SASSA. DSD still needs to provide a report by 15 March so there is one section missing in the report. The second part contains Bills which have been adopted, oversight visits and meetings held. While the first part of the report is the narrative, the second part is the activities.

The Chairperson asked Members to comment on the report.

Ms Masango said the report covers all areas. The executive summary provided by the Content Advisor outlines it well. She suggested it be included in the report.

The Chairperson agreed that it will be added. She asked if the report can be adopted.

The Committee agreed.

The Chairperson requested a brief Committee meeting before the plenary the following week. This was agreed to and the meeting was adjourned.

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