Social Assistance Amendment Bill: summary of submissions; SASSA Quarter 1 - 3 performance

Meeting report

Social Assistance Amendment Bill: summary of public submissions
Ms Yolisa Khanye, Committee Content Advisor, presented a summary of the written submissions received on the Amendment Bill in preparation for the public hearings scheduled for the week of 24 February 2020. In her introduction, she noted the difference between social and child protection. Social protection is defined by the United Nations as ‘all measures providing benefits in cash or in kind to guarantee income security and access to health care’ and child protection refers to ‘the prevention and responding to violence, exploitation and abuse against children’.

Foster care falls under the scope of child protection (according to section 181(1) of the Children’s Act 38 of 2008) and refers to when a child is placed in the care of a person who is not the parent or the guardian of the child. The purpose of foster care is to place the child in a protected, safe, healthy and nurturing environment where positive support is given to the child. Therefore, other social grants are made available for the purpose of social protection.

In the Social Assistance Programme in South Africa, four grant types are available for children: Child Support Grant (CSG), the Care Dependency Grant (CDG), the Foster Care Grant (FCG) and the Disability Grant (DG). The focus of the written submissions is only on the CSG and the FCG.The CSG is a means-tested grant where parents, guardians or caregivers must have an income of below a certain threshold. If it is a single-person household, the threshold is R48 000, and if it is a both-parent household, the threshold is R96 000. The Department highlighted that a CSG is easy to apply for as it is not subject to complex and stringent requirements, unlike the FCG.

While the FCG is not awarded based on a means test, there are several processes that must be followed. Firstly, an assessment of the child’s environment and situation is made by a social worker, who then compiles a comprehensive report which is taken to court to obtain the appropriate court order to be made. This process is important as it allows for a judicial account of the child’s best interest in the situation to ensure that the foster care system provides the safe environment for children as required in its role of providing child protection.

Background to drafting of Social Assistance Amendment Bill
Then Minister of Social Development, Zola Skweyiwa, announced in 2002 that the FCG was to be extended to benefit children orphaned as a result of their parents, guardians or caregivers passing away. This change to the foster care system was made to encourage families to look after orphans with the FCG being an incentive to do so. As a result, a sharp increase in the number of children in the foster care system occurred, and the social welfare system and the judiciary struggled to cope with the increasing demand and procedural aspects that had to be followed. This resulted in delays in the processing and renewal of court orders and as a result they subsequently lapsed due to an overload of children being in the system.

Subsequent litigation between the Centre for Child Law, the Department, and SASSA ensued about this backlog. In 2011, the North Gauteng High Court ruled that the Department must amend the Social Assistance Act 13 of 2004 and the Children’s Act 38 of 2005 to address the challenges faced in the foster care system that hinders its efficiency and ability to fulfil its mandate. The Amendment Bill tabled before the Committee fulfils this order by proposing an additional payment to the CSG as a Top-Up to this prescribed category of children and beneficiaries.

Summary of submissions on Amendment Bill
Clause 4 provides a discretion to the Minister of Social Development to ‘prescribe additional payment linked to a social grant’ and may ‘differentiate on the basis of need between beneficiaries of social grants’. Submissions on this clause were received from the Children’s Institute, Black Sash, Centre for Child Law, Catholic Parliamentary Liaison Office, Children in Distress Network and Ms Nomhle Nkwanyaza. The submissions supported the insertion of clause 4 into the Social Assistance Act, and they argue that if the CSG Top-Up was implemented effectively, it will reduce the administrative burden in the overall foster care system. Time will be freed up for social workers to perform their prevention and child protection services, children can be assigned to homes quickly and the court will be able to issue court orders more expeditiously. The submissions proposed that the CSG Top-Up be made available to orphans who are living with their relatives although not necessarily in need of care and protection. The value of the grant should be enough and not too low. Their recommendation was that the Children’s Act needs to be amended to clarify to social workers and the Children’s Courts that only children who are actually in need of care and protection must be put into the foster care system. Orphans, who are living with relatives and are not in need of immediate care and protection, must be diverted to the CSG Top-Up system as beneficiaries.

The Children’s Institute submitted that if two death certificates are required as proof of death to be able to benefit from the grants, the majority of children in South Africa will be disadvantaged. Approximately 65% of children in South Africa do not have the details of their biological fathers – due to many reasons, such as abandonment, estrangement, broken families and death. The Children’s Institute would like to present the evidence to the Committee on how this issue can be addressed.

The Black Sash proposed that the reference ‘appointed by the Minister’ in the definition of the term ‘Independent Tribunal’ in section 1(b) be deleted. It argued that no substantive law must be created in a statutory definition – this issue is dealt with in Section 18(2)(b) of the Social Assistance Act. Black Sash supported the extension of the definition of ‘person’ in section 1(c) to include ‘the head of the household’. Black Sash raised a concern that the repeal of the internal reconsideration in clause 6 will create an additional burden in the resolution of smaller issues.

Clause 9: Black Sash supported the establishment of an Inspectorate for Social Assistance (ISA) with one recommendation: the skills and expertise of the Inspectorate must include at least one retired member of the judiciary and at least one person with experience and expert knowledge of forensic auditing and risk management.

Black Sash proposed two amendments to the South African Social Security Agency Act 9 of 2004 (SASSA Act) to address ensuring adequate oversight of the social assistance payment system. These amendments include compelling SASSA and the South African Post Office (SAPO) to submit regular performance reports on fraud and corruption activities to ISA; and to compel SASSA/SAPO to ensure that the national social assistance payment system database is not used for any commercial gain.

Ms Nomhle Nkwanyaza proposed that definitions be included for: ‘additional payments’, ‘social grant’, ‘benefit’, ‘culture’, ‘patriarchy’, ‘child-headed household’ and ‘social relief’. She defined ‘additional payments’ as money from SASSA to help the needy, ‘social grants’ as an amount of money received from the government; ‘benefit’ is a certain amount of income to alleviate poverty, and ‘culture’ as material culture and everything else which is the intangible such as language, customs, beliefs and values that are the main referent of the term culture. Ms Nkwanyaza defined ‘patriarchy’ as a social system in which the husband is sovereign, possesses power and exercises control. A ‘child-headed household’ was defined as a child or children looking or taking care of other children at home where there are no parents, or their parents have passed away. ‘Social relief’ was defined as an amount of money from the government helping needy people with funds.

Discussion
The Chairperson noted that while the terms that Ms Nkwanyaza’s highlighted were paramount to the Social Assistance Programme, her definitions missed some crucial elements.

Ms L van der Merwe (IFP) said the presentation was very informative and useful for the work of the Committee in the following week for public hearings on the Amendment Bill. She noted a concern about persons acting on the FCG for its monetary value together with the unknown monetary value of the proposed CSG Top-Up. If the monetary value is too low (using an example of R100), it will not be a feasible solution.

The Chairperson responded that the Committee’s deliberations will come after the public hearings, and that the exact monetary value and its feasibility will be a discussion for then. It will be at that point where the discussion will lead to what the monetary value of the CSG Top-Up should be.

Ms A Motaung (ANC) noted her only concern was if Committee members can submit their recommendations to the Committee Secretary on the Amendment Bill as an efficient way to deal with the public hearings.

The Chairperson agreed that it would be an efficient way. Questions will still be asked during the public hearings but noted again that the time for the MPs to deliberate on the specifics of the monetary values of the CSG and similar aspects will be conducted after the public hearings. He reminded the Committee that its duty of oversight is to ensure that all submissions are given the necessary gravity and are heard by the Committee, while highlighting the importance of public participation in our democracy. The Committee Content Advisor presented a summary of written submissions to aid the Committee in the public hearings scheduled for the following week. The content of the submissions will be available to the MPs to explore and discuss in detail during the hearings and subsequent meetings.

SASSA’s quarterly performance Quarters 1 - 3 of 2019/20
Ms Busisiwe Memela-Khambula, SASSA CEO, gave a brief review of SASSA’s structure and performance from 2014 to 2019. SASSA’s current deployment abilities, including 8 269 staff, 9 regional offices, 46 district offices, 389 local offices, 1 163 service points, 38 mobile trucks, 1 740 contracted pay points, a national call centre and an administrative budget of R7.6bn.The customers of SASSA are predominantly older persons, people with disabilities and children – amounting to 32% of the South African population benefitting from social assistance amounting to R175bn in social transfers every year.

SASSA has two programmes: Programme 1 Administration which consists of Executive Management, Corporate Services, Information and Communication Technology, Financial Management, Internal Audit and Risk Management, and Strategy and Business Development. Programme 2 Administration of Benefits and Support consists of Benefits Administration and Payment Administration.

SASSA's performance for Quarter 1 was 78%, for Quarter 2 was 76% and Quarter 3 was 73%. The consolidated nine months depict a 76% performance that can be attributed to the good performances in the first and second quarter.

There are five targets that fell behind over the period of nine months: Benefits Administration and Support, Finance, Corporate Services, ICT, and Internal Audit and Risk Management.

Benefits Administration and Support was challenged by system related issues in the biometric enrolment of beneficiaries. This has been addressed making the target achievable in the pilot sites. An emphasis was placed on saving costs and looking at where the organisation needs to be within five years. The Integrated Community Registration Outreach Program (ICROP) Impact Assessment’s terms of reference and draft concept has been developed, with plans in the works for appointing an external service provider to utilise internal expertise and save costs.

The Finance facet experienced problems as only 1.04% of 3% of social assistance debts was recovered. An amount of R251m was submitted to the Department to have written off, which has been granted but its implementation depends on the availability of funds. Only 262 of 1 167 cases of financial misconduct were finalised, resulting in a 22% achievement rate. This is dependent on 254 irregular expenditure cases submitted for condonation which amounted to R133m. if approval is granted, the target can still be achieved.

Corporate Services has an 89% achievement rate (84 of 94) for its network connectivity infrastructure upgrade. A scanning solution was implemented in local offices with a 30% achievement rate with 9 of 30 implemented. The project was delayed due to labour matters that have now been resolved, meaning that the target can still be achieved. However, an improvement of networks in all areas is a priority for SASSA.

The Internal Audit and Risk Management facet had reviews conducted in high-risk areas with a 75% achievement rate (12 of 16 concluded). The addition of the Risk Management Committee will provide additional support in identifying operational risks. Operations will be continually reviewed, and audits done.

Detailed performance for Outcome 1: Services to beneficiaries:
Approximately 32% of the population is receiving social grants, with Limpopo being the province with the most social grants per province (44.39%) and Gauteng with the least social grants per province (19.36%). In South Africa, the number of grants paid are: CDG - 154 277; CSG – 12.7m; FCG – 317 206; DG – 1.06m; Grant in Aid –263 701; Old Age –3.6m; War Veterans – 67. The Department highlighted that in the Eastern Cape, KwaZulu-Natal and Northern Cape the number of social grants was quite high and above the 40th percentiles, higher than the national aggregate. This is important to note to ensure that the necessary logistical arrangements are made to ensure equal access to social security in areas of high poverty. The number of war veterans getting grants is decreasing.

Objective 1: Providing social grants to eligible beneficiaries: The planned 2019/20 target was to increase the number of grants in payment at 31 March 2020 at an estimated cost of R175m. By 31 December 2019, 75% of this amount had been achieved.

Objective 2: Providing social relief to persons experiencing temporary crises: The planned target was to award 215 688 Social Relief of Distress (SRD) interventions to individuals and households under distress at a cost of R140m. At 31 December 2019, 322 807 SRD applications were awarded as follow: 1 582 cash payments, 184 321 food parcels; 63 904 school uniforms; 73 000 vouchers and R40.7m in funds committed. 35% of the total SRD rand value was awarded through cooperatives and SMMEs.

Objective 3: Reduction of exclusion errors: The first target was to increase the number of children aged 0 to 1 years in receipt of children’s grants with a target of 560 000. By 31 December 2019 a total of 586 623 applications were processed (51% of the total population of the age group). The target was to reach 560 000 applications by the end of March 2020, making the current achievement already 98%.

The second target was to have 100% of received foster care orders processed within 10 days. The processing of orders will allow FCG beneficiaries to remain on the register and continue to receive their benefits. At 30 June 2019 and September 2019, 100% of the received orders were processed. The total cumulative number of foster care orders processed stands at 82 657.

Detailed performance for Outcome 2: Services to beneficiaries:
This second outcome is to improve service delivery.

Objective 4: Improved grant application process: The first planned target was to reach 1.6m new social grant applicants.The second planned target was to process 95% of grant applications pressed within 10 days. At 30 June 2019, 438 251 applications were processed, representing 95% achievement with 395 819 applications approved and 42 432 declined for various reasons. 99% of these new applications were processed within 10 days. At 30 September 2019, 460 642 applications were processed (92%) with 413 923 applications approved and 46 719 declined for various reasons. 99.22% of these new applications were processed within 10 days. At 31 December 2019, 1 299 417 applications were processed, with1 205 024 applications approved and 130 393 declined for various reasons. 99.16% of these new applications were processed within 10 days. 87% of these applications were processed within 1 working day.

Objective 5: Taking service delivery to the people: The planned target was to integrate community outreach and the registration programme (ICROP) to areas with extensive needs, targeting 354 wards. ICROP has the effect of increasing access to government services associated with the provision of social assistance to the most vulnerable wards. At 30 June 2019, SASSA implemented integrated community outreach in 104 wards. At 30 September 2019, SASSA implemented integrated community outreach in 145 wards. At 31 December 2019, SASSA implemented integrated community outreach in 357wards.

Detailed performance for Outcome 3: Services to beneficiaries:
The third outcome is to institutionalise the social grants payment process. During the January 2020 payment cycle, SASSA paid 18.1m social grants to approximately 11.26m beneficiaries CSG – 12.7m; Old Age – 3.6m; DG – 1.06m). Social grants are paid directly into the beneficiary’s bank accounts held with a total of 24 commercial banks and the SAPO. The majority of the beneficiaries’ bank accounts are with SAPO (8.01m) and are subsidised by SASSA through a special disbursement account agreed to between the various parties.

Objective 6: Insourcing the grant payment function: This target is to take over the management of service providers for the payment of social grants. SAPO services are managed in terms of the signed Service Level Agreement and monitoring reports are regularly compiled. However, challenges affecting the SASSA-SAPO collaboration include fraud, transaction rejections, long queues at outlets without shelters or dignity services, and manual payments resulting in longer payment times. SASSA and SAPO are working together to mitigate these challenges. Risk items were identified as the Integrated Grants Payments System (IGPS) stability, network connectivity, auto reversals of rejected transactions, offline status at branches due to cable theft, POS hardware failures, lack of cash availability at branches, building defects, broken down vehicles, breakdowns and late arrival of cash-in-transit (CIT) vans to cash pay points (CPPs), and armed robberies at SAPO branches and CPPs.

The second planned target was to have 100% of active cash pay points monitored. SASSA and the SAPO contracted to pay 1 740 cash pay points. However, on a monthly basis some pay points get realigned resulting in a reduced number. For this period, 1 621 cash pay points were active and 29 monitored.

Outcome 4: Administration:
The fourth outcome is to improve organisational efficiency by upholding good governance (the prevention of fraud and corruption; improved consequence management) and improved financial management.

Objective 7: Preventing fraud and corruption: The planned 2019/20 target was to investigate reported fraud and corruption cases and to finalise 70% of reported cases. 59% of actual cases were achievedrepresenting 78 out of 132 cases, with 10 cases referred to law enforcement agencies. In addition, SASSA worked with the banks and identified and recalled 5 345 potentially fraudulent grant payments during this period. 62% of the fraudulent cases satisfied the requirements and the payments were realised. For those who have not come back, the three-month rule will apply, and the grant will lapse. During September 2019, a total of 147 of 184 reported cases were finalised (80%) and 19 cases referred to law enforcement agencies during this period. SASSA started implementing measures to reduce fraudulent cases including bank account verification prior to payment date, and the withholding of payments where the bank account details do not correlate with the beneficiary’s details. During December 2019, 94% of reported cases were investigation, and 335 out of 359 cases finalised. 51 cases were referred to law enforcement agencies.

Objective 8: Improved consequence management: One of the planned 2019/20 targets was to have 60% of labour relations matters finalised, with the intention to instil a culture of discipline and accountability. During June 2019, 87 of 221 labour relations cases were finalised (39%). From the finalised cases, the outcomes were: 1 verbal warning, 17 written warnings, 11 final written warnings, 7 dismissals and 5 suspensions without pay. During September 2019, 58 of 77 labour relations cases were finalised (75%). From the finalised cases, the outcomes were: 23 written warnings, 4 final written warnings, 3 dismissals, 8 withdrawn, 1 demoted and 1 suspension without pay. During December 2019, 257 of 422 labour relations cases were finalised (61%). From the finalised cases, the outcomes were: 1 verbal warning, 99 written warnings, 33 final written warnings, 15 dismissals, 15 suspensions without pay, 7 sent for counselling, 2 demoted, 14 withdrawn and 3 rendered not guilty.

Another target was to have 60% of financial misconduct cases finalised within 120 days. During June 2019, 100% of financial misconduct cases were finalised (4 of 4). During September 2019, 93% of cases were finalised (40 of 43) with 24 cases relating to damages and losses and 16 relating to fruitless and wasteful expenditure. During December 2019, 147 of 170 cases were finalised (87%). 137 of these cases related to damages and losses, while 33 related to fruitless and wasteful expenditure.

The last target in this category was to finalise 65% of financial misconduct. During June 2019, only 8% of cases were finalised (94 out of 1 188) with 44 cases relating to damages and losses, 2 to irregular expenditure and 48 relating to fruitless and wasteful expenditure. During September 2019, only 17% of cases were finalised (202 out of 1 167) with 95 cases relating to damages and losses, 2 to irregular expenditure and 105 relating to fruitless and wasteful expenditure.During December 2019, only 22% of cases were finalised (256 out of 1 176) with 119 cases relating to damages and losses, 3 to irregular expenditure and 134 relating to fruitless and wasteful expenditure.

Objective 9: Improved financial management: One of the planned 2019/20 targets was to have 3% of social assistance debts recovered. At December 2019, 1.04% to the value of R8.6m of social assistance debts was recovered. A number of social assistance debtors are economically inactive, making collection impossible. A total of R251m was submitted and approved to be written off. Another target was to have 100% of the eligible suppliers paid within 30 days. This was needed so as to prevent suppliers from experiencing obstacles in providing the services to SASSA and the SAPO that it needs to operate effectively as the distributor of social grants. During June 2019, 1 394 of 1 394 suppliers were paid (100%), which was SASSA’s contribution towards sustaining small businesses which relies on these payments for the successful running of their enterprises. During September, 100% of the eligible suppliers were paid within 30 days (1 765 of 1 765).

Expenditure at the end of Quarter 3 reached 58%, resulting in a 17% underspending when comparing this expenditure to the expected 75% for the nine-month period.

Expenditure in the form of compensation of employees reached 67% at the end of Quarter 3. Expenditure for this period was an average of R267m per month, and the main reason for under-expenditure was that some funded posts were vacant and not yet filled. A moratorium on filling these vacancies was a strategic decision to allow for the forthcoming Business Process Re-engineering which will be undertaken to review processes, structures and systems to determine whether they contribute to the achievement of SASSA’s goals.

Expenditure in the form of goods and services reached 40% at the end of Quarter 2 and increased to 47% by the end of Quarter 3. The expenditure is significantly lower than the expected 75%, resulting in a 28% underspending. Three items contributed to the underspending: cash handling fees, computer services, communication and leases.

The cash handling fees accounted for 48% of the goods and services budget with an allocation of R18.75b. in Quarter 1 expenditure for the SAPO services only represents that for April and May as the SAPO could not submit the necessary supplementary documents to support the invoices. In addition, the payment to the SAPO was still based on old tariffs since the process is the process is still underway to negotiate new tariffs applicable to the 2019/20 financial year.

The computer services contributed to underspending as this item accounts for 11% of the goods and services budget. Expenditure on this item reached 63%, falling short 12% by the end of Quarter 3. This is due to underspending on SITA SOCPEN hosting which is due to the negotiated contract amount being lower than the anticipated budgeted amount.

The communication was the highest contributor to underspending on the item of goods and services. The allocation of telephones has a budget of R6.2m and expenditure of 40% by the end of the second quarter. The expenditure on this item is driven by the extent of the telephone usage which is controlled through the telephone management system which influences the level of spending.

The leases contributed to underspending due to the funded office buildings which are not yet occupied.

Discussion
The Chairperson said that the Committee is curious about how the performance affects the lives of the communities it is dedicated to serve. He noted that the Committee should change their form of presentation, as he is convinced that the Committee will likely not have principal reasons at this point (without the formal public hearings having been conducted yet) to refute any of the written submissions after the evidence and presentation made by SASSA.

Ms van der Merwe thanked the Department for the presentation, as it is helpful to see what they have done, and for the information given. She highlighted the action that was taken against persons who committed financial misconduct and asked why the number of sanctions does not match the number of cases finalised. What should the Committee make of that? The outcomes of cases are on slide 33 of the SASSA presentation. Why are so few of the cases ending up with law enforcement agencies? She noted a concern on the amount of money that is being written off. Is there a strategy on how SASSA is trying to get money back? She highlighted the tension between writing off money that can be used to promote the social security of vulnerable children and to get these children into the social security and foster care systems.

Ms Motaung commented on looking forward to a time where they would be working toward a timely performance. She raised a question on the social grants review. What does this process entail? Is SASSA reviewing every beneficiary? How is this process conducted? Awareness should be raised among the beneficiaries themselves on how SASSA deals with the review and to communicate the review efficiently. She also raised a concern on the number of the dismissals and questioned whether SASSA has a strategy of attempting to rectify the problems before resorting to dismissal and how fraud is dealt with.

Ms T Breedt (FF+) noted the general performance of SASSA is decreasing from 78%. Was there any specific reason for the decrease? How closely are targets aligned to objectives? There are targets that are not necessarily aligned to the outcomes desired. How is SASSA doing regarding its Audit Action Plan, and how can they reduce the number of findings from AGSA or obtain no findings at all? In terms of the review process, there are some beneficiaries who are reviewed, and others not – leaving some quite confused. She asked for clarity on how the process is conducted. On the cash and food SRD parcels – how are the children identified for this?

Mr D Stock (ANC) welcomed the presentation. He asked for clarification on the implementation of the written off funds.What does that mean and what are its immediate consequences? He highlighted the high number of fraud cases that impairs the efficient delivery of social security benefits to those who truly need it.

Ms B Masango (DA) raised the challenge inspired by the quotation of the SASSA-SAPO collaboration. She noted the large numbers of SASSA beneficiaries who receive their payments straight into their bank accounts. She asked about bank charges and if the beneficiaries are paid directly, then what is the role of SAPO in the system?

The SASSA CEO replied that the speed with which the fraud and corruption cases are finalised depends on the complexity of the cases. On the query of the sanctions matching the number of cases, some cases were referred to law enforcement agencies and those outcomes were not included. They did not want suppliers to experience obstacles in providing services to SASSA and SAPO which need to operate effectively as the distributor of social grants.Social grants are paid directly into the beneficiary’s bank accounts held with a total of 24 commercial banks and SAPO. The majority of the beneficiary bank accounts are with SAPO and are subsidised by SASSA through a special disbursement account agreed to between the various parties.

The Chairperson noted Ms Andrews’ request at the start of the meeting to afford her the opportunity to raise three points.

Ms Andrews thanked the Chairperson and took a moment to welcome him back to the Committee. She stated the need to commence with the Committee’s meetings in 2021 well before the time period they started in 2020, i.e. to start the meetings in late January or early February to ensure the Committee has adequate time to address matters. Her last point was that this Committee and the Steering Committee working on Gender-Based Violence and Femicide had not yet met and should do so soon with reference to the climate of violence in society.

The Chairperson noted Ms Andrews’ last two concerns on behalf of the Committee and then adjourned the meeting.