Appropriation Bill: Department of Social Development briefing, with Minister and Deputy Minister

Standing Committee on Appropriations

18 May 2021
Chairperson: Mr S Buthelezi (ANC)
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Meeting Summary

The Standing Committee on Appropriations convened a virtual meeting to be briefed by the Department of Social Development and representatives from certain of its agencies on the Appropriation and Special Appropriation Bills.

It was presented that the Department has always been historically underfunded. The proposed reduction of R38.6 billion was going to affect service delivery in the form of compensation of employees, goods and services and social assistance grants among other areas.

Currently, there are 761 posts with 57 vacancies and the costs of filling the vacancies is estimated to be R46 million. Of the estimated budget, only R35 million is available leaving a shortfall of R10 million. In the current financial year, the financial support that is given to poor households will decrease. The Department will reduce the value of the normal SRD allocation to R500 so as to reach more families.

The SASSA budget was reduced by R641 million and the reductions are largely a result of the wage bill containment strategy. The Department plans to re-invent the National Development Agency by also re-skilling the staff for the purpose of the proposed turnaround strategy.

The Committee raised concerns about the number of vacant positions in the Department. Members were of the view that the high vacant rate was also contributing to internal deficiencies in the Department.

Members were also concerned about the phasing out of the social workers’ scholarship programme mainly because there are areas within the country that are in need of social workers.

The Committee was interested in knowing about the role that the Department is playing in assisting SMEs, black-owned businesses, women and youth-led businesses, rural and township businesses. Members indicated that these groups were important for financial inclusion and also the economic transformation of the country.

The Minister of Social Development emphasised the importance of collaboration between the Department of Social Development and other departments for poverty alleviation and economic empowerment.

The Minister indicated that the Department was working toward empowering local communities and cooperatives by improving their capacity.


Meeting report

The Chairperson indicated the Committee was dealing with the Appropriation and Special Appropriations Bills. In terms of the process, it is a requirement that one of the departments that was affected by the Bill present on the impact. The Committee sent a letter to the Department of Social Development and it would be responding to the letter in the presentation.

He highlighted that the Department was going to take the Committee through the presentation whereafter the Minister of Social Development would then engage Members.

Department of Social Development submission on the Appropriation Bill and Special Appropriation Bill

Mr Linton Mchunu, Acting Director-General (DG), Department of Social Development (DSD), led the presentation. It was presented that the Department and its entities have been historically underfunded and the budgetary cuts exacerbated this problem. There was a proposed reduction of R38.6 billion, which reduction was going to affect service delivery in the form of compensation of employees, goods and services, and social assistance grants, among other areas.

The Department has 761 posts with 57 vacancies, and the costs of filling the vacancies is estimated to be R46.3 million. Of the estimated budget, only R35.3 million is available, leaving a shortfall of R 10.9 million.

The financial support that is given to poor households will decrease mainly because the budget cuts and inflation rate cannot be provided for in the current financial year. However, social grants remain instrumental in tackling poverty and inequality.

The Department has proposed measures to mitigate the impact, and this includes reducing the value of the normal SRD to R500 so as to reach more families, and also implementing the EPWP programme to assist unemployed South Africans access economic opportunities.

The SASSA budget was reduced by R641 million- the reduction is largely as a result of the wage bill containment strategy.

The Department plans to re-invent the National Development Agency by re-skilling staff for the purpose of the proposed turnaround strategy.

The Chairperson thanked the Department for the presentation and acknowledged the presence of the Minister and the Deputy Minister who had joined the meeting.

He invited the Minister to address the Committee.

Minister of Social Development, Ms Lindiwe Zulu, thanked the Chairperson for the opportunity to speak. She said it was important that the Department listens to the contributions from the Committee and then comment at the end.

[see presentation attached for further details]

The Chairperson opened the floor for discussion.  


Mr O Mathafa (ANC) thanked the Department for a comprehensive presentation. He indicated that the presentation was going to assist the Committee going forward.

He recalled from the presentation that there are 17 senior management positions and forty at lower level that are vacant. He asked for the specific details of the positions that are vacant both at senior management and local staff as that would assist the Committee in assessing the magnitude of the challenges faced by the Department.

He stated that from the presentation, it was coming out that there are some internal control deficiencies in the Department. It was therefore important for the Committee to have an understanding as to which of the vacant positions are related to internal controls. Mr Mathafa said there was a possibility that the vacancies were also contributing to the weaknesses in internal controls and mismanagement that ends up affecting grant beneficiaries and poor households.

He recalled from the presentation that the Department was planning on approaching National Treasury with an amended structure in respect of the budgetary cuts. He said that the Committee wanted to have an understanding of how the Department wants to be supported so that in the event the Department approaches Treasury and the views of Treasury are submitted to the Committee, Members will be in a position to support the Department during the discussions. The Department needed to clarify how the new structure or appropriation of the fiscus were to be considered, as per the challenges and needs of the skills that are currently unavailable as a result of the high vacancy rate.

Mr Mathafa asked for the view of the Department on satisfaction levels in terms of the budget allocated for the implementation of social relief measures such as food parcels aimed at putting poor households against the effects of the pandemic. He asked the following questions, was the budget used sufficiently and economically, particularly when the Department considers the logistics of the distribution of the food parcels? Did the government get value for money from the cost incurred to ensure that those particular interventions were implemented?  Are there any lessons that the Department picked through the period of interventions? What will be done differently to ensure that whatever lessons that were learnt will assist the work of the Department to ensure that the challenges do not reoccur?

He noted that the social work scholarship programme had been phased out in 2017/18 which would mean that government was no longer investing in critical skills like social workers.  Government has long had the view that such skills are vital for the provision of social welfare particularly to those vulnerable households and communities that under normal circumstances, even before the pandemic or after, live under situations of distress. The intervention of social workers has been helping a great deal with such households. He asked the Department to highlight the measures that will be implemented to mitigate the negative impact of the phasing out of scholarships.

He asked if the phasing out of the social work scholarship programme was directly linked to budget constraints or if there was another reason beyond budgetary concerns. He said it would be interesting for the Department to share with the Committee information on what informed the decision to phase out the scholarship.

Ms D Peters (ANC) thanked the Minister, the Deputy Minister and the Department for the presentations. She indicated that the Committee had so much interest in the Department of Social Development primarily because the Department is the custodian of services to the most vulnerable members of society. During most public hearings, the Committee always gets input that is closely related to social development, in particular the challenges that grant beneficiaries face.

She asked if the vacant positions were critical posts.

Ms Peters said the issue of social workers was close to her heart because she is a social worker by profession. She asked if the phasing out of the scholarship programme was linked to the rate of unemployed social workers. Her question was: is the Department saying they are having a challenge in absorbing the scholarship beneficiaries who are currently unemployed?

She highlighted that if one looks at the challenges that communities are facing, the only conclusion to be reached would be that there is need for more social workers in the communities. She recalled a time where there was a discussion between the Department of Basic Education and the Department of Social Development and Health to make sure that at every school, there is a social worker because of the challenges that are faced in society.

She reiterated that the Committee was not saying that social workers are remedies to all the ills of the society, rather, that social workers are sufficiently and adequately trained to handle those particular issues. She suggested that there should be at least one social worker per ward.

Ms Peters asked the Minister and the Department if the social relief of the distressed budget had been spent to the last cent. Her question was, if there is any underspending, how did that arise especially in view of the challenges that people had—and still have—in accessing this particular grant?

She reminded the CEO of SASSA of a lot of people who complained about being disqualified from being beneficiaries of the UIF after investigations were carried out and they were found to not have worked in the last 15 years or so. She asked the following questions, are there any potential beneficiaries of qualifying people who are owed money due to the delays in processing? If there were people approved but not paid out and now the Department has budgetary constraints, what will happen to those people who were approved and are still waiting for their payments? How many of foreign nationals and people who did not qualify have been arrested for defrauding the poorest of the poor?

She emphasised that it was important that the Department follow up on those issues. She stated that there was no justification for a person to apply and get access to a grant that person did not qualify for.

She asked the following question, what are the consequences and management mechanisms that the Department has put in place to deal with those who would have approved or enabled the defrauding to happen?

Ms Peters asked the following questions to the Minister: is the Department of Social Development and its Provincial counterparts capacitated to empower grant beneficiaries to graduate out of being grand recipients? What social development programmes are the Department, its provinces and agencies involved in to guard against intergenerational grant beneficiaries? On the BIG v the SRG, is the Minister of the view that it is time for the South African government to consider implementing the BIG? Taking lessons from the SRG process, will the Department and its implementing agencies be able to implement or roll out the BIG if implemented?

She indicated that SASSA had done well to facilitate and enable the Post Office to pay out the grants and be the service provider for the Department and SASSA. She asked what else had to be done between the Department of Communications and Postal and Telecommunications as well as Department to make sure that the Post Office can be able to deal with the inhumane nature in which services are rendered.  She stated that the long queues, people being returned home, and some people sleeping over at the Post Office, reminds her of images before 1994 where there was a resolve that no one has to be treated in an inhumane way to access a grant from government. She suggested that the Committee should consider inviting the Post Office to present the entitys approach to servicing the most vulnerable.

Ms N Hlonyana (EFF) welcomed the presentation from the Department and asked the Acting DG to inform the Committee on the period he has been acting in the role. She directed the following question to the Minister; when will the position of the DG be filled?  She emphasised that the Department could not continue functioning with a DG who is in acting capacity. It was therefore important for the position to be filled because it brings stability to the Department.

She asked the Department to explain the plan to redesign the Department given budgetary concerns.

She noted that out of the six step programme on the ICT master plan, the Department had only achieved three and the other three had been affected by budget cuts. Digitalisation is very important to the country given where the world is now, due to the COVID-19 pandemic. Ms Hlonyana said she understood that there were budgetary cuts but wanted the Department to tell the Committee how it was going to fully achieve the six step programme so that the digitalisation programme is not affected.

Mr X Qayiso (ANC) stated that it was very important for the Committee to consider the recommendations that had been submitted by the Department. The Department made an outline for the topping up of the establishment for social assistance which highlighted the extent to which poverty and inequality had entrenched itself. He asked the question: where are we getting to when it comes to poverty and inequality?

He indicated that it will not just be an issue of managing numbers but obviously the achievement of MTP and Millennium Development Goals is also key as to which direction is the ship is facing. The primary objective will be to agree with the reduction of poverty and inequality. He emphasised that the Committee had to consider the critical recommendations made by the Department because it provides an indication of the direction that the country has to take in dealing with the issue of inequality and poverty. He stated that measures should be made to ensure thorough transition towards implementation and topping up of the child support grant because it obviously is a constitutional imperative, therefore, the Committee needed to seriously consider implementing the recommendations.

He highlighted that there are 309 offices run by SASSA and according to the report presented, the staff is at level eight instead of at least level 12. Also, there are about 57 vacancies in those offices. He indicated that the Committee was of the view that the upper levels are those that make up the critical vacant positions.

He asked the following questions: how many of these critical level eight employees are there supposed to be, and are they budgeted for too, because it is very important that as soon as we say the office is being run at level eight then it means there are challenges which need a budget.

He reiterated the Committees position that there is a need for a way for all the critical areas that have been mentioned by the Department to be considered fully so that there is sufficient intervention, as these areas are key in dealing with poverty and inequality.

He stated that the issue of work from home goes hand in hand with the digitalisation programme which must be implemented. Once working from home becomes part of the discussion, it means there must be intensification of work on digitalisation and the Department of Telecommunications will then have to be involved to bolster fibre connection. He agreed with the view that at some stage, the Committee has to find ways to engage with the Department of Telecommunications so that there is harmonisation of what is being said in terms of the digitalisation programme and work from home. He said he hoped that there was a budget set aside for the plans that the Department was making.

Mr Xayiso said sometimes when there is a conversation on outsourcing, it means there is a process of restructuring of the workplace that would be taking place. He was hoping that the Department had already made means for proper consultations with stakeholders affected, especially labour, mainly because restructuring of the workplace always causes some strained relations. He emphasised the need for the Department to exercise caution in that regard and moved for the consideration of the Departments recommendations by the Committee.

Ms M Dikgale (ANC) emphasised the issue of vacancies, particularly that higher positions in the Department are currently occupied by people who are in acting capacity. She indicated that she was worried about that because life is usually unfair. In most instances, the person in the acting capacity is not always considered for the position when the vacancy is being filled. It was therefore important for the Department to ensure that those who are acting were fully appointed for the posts.

She highlighted that in her constituency, there are projects of dropping centres that house orphans, child headed and vulnerable children. She asked if the Department could intervene in ensuring that these children receive grants from social development as they are currently not receiving any money. She conceded the issue of underfunding in the Department but emphasised on the need for a solution. She informed the Committee that the Deputy Minister had at some point visited the area and was well aware of the situation.

Ms Dikgale stated that in her constituency, they always receive complaints from grandparents or older parents who are supposed to be receiving the social grant but because their partners were deployed in education or were nurses, they end up not qualifying to receive the social grant. She gave an example of a man who approached the offices and said the following: ‘‘l was self-employed now the relationship is sour, l cannot keep begging my wife for money to buy at least bread or something, so if the government can just have pity on us and assist us.” She asked what could be done to assist the people who are in like circumstances. She proposed that the Department and government should find means to assist even if it means giving them half of what other beneficiaries of the social grants are receiving.

The Chairperson thanked the team from the Department for the presentation. He asked for the Minister to respond to the issue of the filling of the position of the Director General mainly because it was important for service delivery and stability in the Department.

He asked what role the Department and its agencies were playing in helping SMEs, black owned businesses, businesses owned by women and the youth, and rural and township businesses. He said  government has always emphasised that the appropriated budget should be used to try and transform the economy and the Department has an active role in the economic reconstruction and recovery plan as announced by the President. The problems in the country can be avoided in the future if the country goes back to an economy that is growing.

The Chairperson asked the following questions: as a percentage of combined spending, and GDP, how is the Department doing when compared to other countries in terms of the budget that is being allocated? What is the Departments historical underspending and what are the reasons for the underspending in the Department and its agencies? What has been done to try and improve that? What measures are being put in place to mitigate underspending?

He stated that the Department could not continue complaining about budget cuts when the allocated funds are not being fully spent. It becomes difficult for the Committee to argue against budgetary cuts on behalf of the Department and its entities when there is underspending.

He asked for the Departments perspective on the budget that goes to SITA. He said: there is 1% of the budget that goes to SITA, is the Department getting any value from that? Would the Department say the country is getting any value from what is contributed to SITA? He insisted that 1% of the Departments budget was a lot of money.

He asked the Department to elaborate on the international partners. His questions were: what are those institutions, what value is the Department getting from them or perhaps, why is the Department having relationships with them?

The Chairperson referred to a slide on the impact of COVID-19 interventions. He said when the Department presented on the impact of terminating those interventions, the team was obviously making a big assumption that things will not change and everything will remain equal. He reminded them that the interventions were at a time when COVID was kicking in, the lockdowns being imposed and people losing their jobs. However, the situation has changed as the economy is now open and people are going back to their jobs. He asked the following questions; do you think the outcomes are water tight? Has the Department factored in that the situation under COVID is different from what is going on now given that there was the lockdown and a lot of industries were not operating?

He noted that there are a lot of repetitions for similar programmes with other Departments and wanted to know if there are other social grants that can be found in other Departments which would make more sense if put under one roof?

He asked how much was lost through leakages like corruption in the Department in the year 2020/21 and what was the Department doing to ensure that such leakages do not reoccur?

He recalled that other members had raised the issue of consequence management and asked if there had been any people who got arrested. He said the funds that the Department was defrauded of were meant for the most vulnerable members of the society and the country needed to frown upon people help themselves with those monies and ensure that there are consequences for that.

He asked if the Department was to scale SASSA from 0-10, 0 being very horrible and 10 being very efficient, where was the agency in terms of efficiency and quality of services that are being given to the people of South Africa.

He indicated that there were a lot of arguments that had been made about SAPO taking over the distribution of grants and reminded the Committee that the issues ended up in court. He asked for the Departments perspective on whether the country is in a better position now that SAPO is doing the work. He noted that one of the arguments that had been put forward in favour of the Post Office taking over that function was that the Post Office must be sustainable. He asked if that was the case.

The Chairperson reminded the Department that in the presentations, they were not only addressing the Committee but also the rest of the country, hence it was important to give more detail on what the NDA does and its achievements.

He invited the Department to respond to the issues that had been raised.


Minister Zulu requested that the Department and its entities respond to the questions first so that after them, she can get to respond to the questions that were directed to her. She acknowledged the presence of Deputy Minister of Social Development, Ms Hendrietta Bogopane-Zulu, and invited her to speak.

Mr Mchunu thanked the Department for the tailored questions that had been asked. He said the Department appreciated the fact that the Committee was willing to assist on the issue around the topping up of the CSG. He indicated that the CSG was a very important aspect of the work of the Department and as advised by the Committee, the Department was going to looking into the system.

He highlighted that the Department is at 60% in filling the vacant positions. The vacancies that are at senior level are in the recruitment pipeline and some at advanced stages. The Department encountered some challenges with some of the agencies that are often relied on to assist in processing vacancies or posting the vacancies in terms of the processes that have to be followed. As a result, the Department had to go out and look for alternative sources to assist in that regard. He reiterated that the bulk of the vacancies had been filled in and a number of the remaining posts were going to be filled in a few weeks.

Minister Zulu asked the acting Director-General to explain more on the advertisements that have already been made as it was inadequate to just mention that 60% of the vacant posts had been filled. She said the acting DG had to indicate the top posts that have been advertised, including the fact that in the last week, the Department had filled one of the senior posts through cabinet. She emphasised that the acting DG had to be specific in responding so as not to create a situation in which members ask further questions. 

Mr Mchunu said the Department filled the position of the Deputy Director-General: Corporate Services during the week, and the process was on-going for the filling of the post of the Deputy Director-General: Welfare Services and Strategy. The three Chief Director posts were going to be filled in three weeks, as the processes are already at an advanced stage. He said the Chief Director for Procurement resigned a month and a half ago and the process for recruitment for that post was on-going. The Department was also recruiting for the position of the Chief Director for legislation and then the other posts that are at a much lower level. He reiterated that the Department was making efforts to expediently fill in the vacant posts.

He highlighted that the Department has a self-set target in the APP that is aligned to the Presidential Directive to support women-owned businesses. The target is for the Department to support 40% of women-owned businesses through the various processes in the portfolio. In the past 2 quarters, if not the past financial year, the Department managed to support about 50% of women-owned enterprises within the Department particularly related to the procurement of PPE.

He indicated that the Departments business model for community development centres which are across all Provinces are specifically tailored to get cooperatives in those particular municipalities and districts to provide fresh vegetables and other products. The products come from cooperatives for black-owned SMEs in township areas and rural areas across the Republic.

Mr Fanie Esterhuizen, CFO, DSD, said the policy on internal control is outdated and has not yet been updated or reviewed. In the 2019/20 financial year, the Department tried to push these policies and procedural matters to be updated or get approved by the Accounting Officer. Of the 19 policies and procedural matters, only 16 have since been approved and circulated. Also, the Department is holding workshops with external people to assist in informing the teams on consequence management and internal controls. The intention is that the whole Department be vigilant with policies and procedural matters. He stated that the vacant positions in the Department were also contributing to inefficiencies in internal controls but that much of the problem was from the fact that the policies have not yet been updated.

He highlighted that the decision to phase out the scholarship programme was not a result of budgetary cuts. The scholarship programme was a conditional grant that was introduced a few years ago and the social workers who benefitted were appointed to provinces. As a result, the funding went into the Provincial Equitable Share and it was decided by National Treasury that because the Department does not have the capability to absorb all the scholarship beneficiaries the programme should be phased out. The Department was sitting with unabsorbed people who had been put through the system but without employment.

He indicated that the bulk of the R1.8 billion in underspending is for the previous financial year and R1.67 billion relates to the social grants. The Department was not able to process all the R350 grants before the end of March and that had to roll over into the next financial year. That money has since been sent back to the Treasury, and the Department has requested that the funds be rolled over back into the Department so that the backlog is offset.

Mr Esterhuizen stated that the Departments problem is that the automated system and the statistics that exist currently do not point to what the Department wants to have. The Department was therefore driving towards getting statistics and systems up-and-running so that when requests for funding are submitted to National Treasury, there would be proof that the Department is underfunded. He gave an example of a case, in which the Department did a costing a few years back which revealed that services for development were going to cost up to R9.3 billion. Upon request for funds, Treasury said the project was unaffordable and gave the Department about R200 million that goes to provinces. The Department is currently underfunded but once statistics and evidence to support that is gathered, a case will then be made before National Treasury. 

Deputy Minister Bogopane-Zulu asked to be excused as she needed to attend to an emergency and indicated that she wanted to give the Committee further context on the issue of scholarships. She said there are three reasons that led to the phasing out of the scholarship programme. The matter started from the social work indaba that the former minister convened. One of the concerns presented by social workers was for the Department to find a balance between training and employing social workers in the country. In finding that balance, the Department requested from cabinet that 50% of the scholarships be utilised for the absorption of social workers and the other 50% be used for new students. Consequently, the 50% was absorbed and the Department moved to have the scholarships be managed by the NFSAS. The Department had a 50/50 management arrangement with NFSAS. She emphasised that the scholarship programme was not disappearing completely. Rather, it was just getting out of the Department of Social Development and being transferred to where it will be utilised as a scholarship managed by the Department of Higher Education.  The decision was partly an issue of finance and also wanting to absorb social workers.

She indicated that the Department is currently implementing the idea of having ward-based social workers in the provinces. There is a cabinet decision which was made in which the Department brought the memo and requested that all the other departments such as Basic Education, Health, Defence, Police and Correctional Services must employ social workers on an urgent basis. She stated that there was a Committee that was established which was led by the late DDG, and through that Committee the Department is at the stage of finding a way of following the example of other departments which need and employ social workers.

The Deputy Minister informed the Committee that part of the scholarship programme is going to Higher Education Department, so that it can be seen through to the end. All the social workers that are in the scholarship programme will be migrated to other scholarships that the government provides.

Mr Khumbula Ndaba, Acting DDG, DSD, highlighted that there is a vacancy rate of 7% in the Department and this includes the post of the DG, two DDGs and seven Chief Directors, four posts from finance and three from audit. Some of the posts have since been advertised and are currently at various stages.

He noted that there are quite a number of critical skills that are required in the Department and they relate to data analysts, actuaries, data scientists, economists, researchers, policy developers and IT system developers.

He indicated that the Department has entered into a process to reorganise the Department; Treasury and GTECH have been engaged to assist with the restructuring process and a new structure has already been developed. However, budget constraints are impeding the Departments ability to employ or recruit more staff and most of these are supposed to be social workers. According to the calculations that were made, if the Department is to recruit plus/minus 9 000 social workers at salary entry level 7, about R2.3 billion will be required. The budgetary cuts led to the conclusion that the Department has to restructure, and this is something that requires engagement.

Dr Mulaudzi stated that the Department distributed about two million food parcels and managed to reach about 11 million people in terms of access to food parcels. Based on the numbers that the Department managed to reach, it was confident that the funds were used adequately and that there was value for money. The Department managed to provide food whose prices were not inflated, with the required nutritional value. There was a centralised procurement system to ensure that there are no differences in terms of the prices in every province.

He said the Department leant that coordination among all the role players was important. The Department worked in partnerships not only with the national and provincial governments, but also with civil society organisations, faith-based organisations and businesses. The partnerships assisted in reaching out to a large number of beneficiaries across the country.

He indicated that the lessons forced the Department to bring the transformation of conventional strategies to service delivery. After closing down the nutrition centres, new mechanisms had to be found to ensure that beneficiaries could access food parcels. Through partnerships, the Department managed to improve accessibility of services through various government departments and businesses. The Department also managed to tighten security and created coordinated mechanisms which allowed for access in a more coordinated way. These mechanisms assisted in increasing the reach and improved access as indicated by the numbers that were recorded. 

Dr Mlaudzi noted that there was so much that the government was doing to protect the poor and vulnerable such as the provision of social grants but there was need to increase coverage and integration of social protection interventions. That would ensure that there is provision of food to legal foreign nationals and also that the Department takes care of other considerations such as health challenges in terms of adhering to protocols for the beneficiaries. He reiterated the importance of partnership and stated that the Department could not handle food provision alone but needed to work with other partners such as SASSA and other businesses.

He highlighted that the Department also learnt that there is need to strengthen the resilience of every household to ensure that the population is not entirely dependent on the provision of social protection from the government. The Department has added other programmes and is currently working on a document that links beneficiaries of the grant to sustainable livelihood interventions so that even after receiving food, the beneficiaries must be able to sustain themselves going forward.

Dr Mlaudzi indicated that in light of the lessons learnt, there is need to implement change going forward and strengthen the capacities of people in communities to create sustainable livelihoods. The Department is looking into developing a national integrated social protection information system that will streamline targeting, means testing, beneficiary targeting and also to introduce an e-voucher solution to remove food parcels.

Mr Ndaba said the Department had consulted with organised labour on the restructuring of the workplace project. The Department appointed change management champions and consulted various chief directorates as well as programme managers. The consultation processes are still ongoing. He reiterated that if the Department is to populate the structure by employing 9 000 workers who will require plus or minus R2.3 billion, it is a large amount of money which the Department does not have.

He indicated that the Department approached National Treasury on the employment of social workers. The bid that has been put forward is for plus or minus 4 500 social workers and the idea is for the social workers to be distributed to all the nine provinces, specifically at various Districts in order to assist the Department in dealing with a number of social ills.

He highlighted that the Department employs people with disabilities and the employment rate is currently at 1.8%. Before then, the rate was at 2% but there was a decision to move the unit that deals with people with disabilities to the presidency and that reduced the figures to 1.8%. However, the Department continues to manage this through the Employment Equity Forum.

Mr Mchunu stated that the Department received a substantial amount of money mid-term last year for food provision. The Department had used about half of its allocation both in terms of the provinces and National Department by the second quarter. As a result, the Department had to go to National Treasury for additional funding and received about R500 billion. In terms of effectiveness, the Department has been able to reduce hunger and in some cased even malnutrition.

Mr Mchunu indicated that the Department has a hybrid system that is currently being looked at in terms of lessons in which entities are using food parcels as well as food vouchers.

Mr Thabani Buthelezi, Acting DDG, DSD, highlighted that the Department made a recommendation for the strengthening of stakeholder engagement. However, the imminent budget cuts and COVID-19 reawakened the fact that there is need to dig deeper beyond the Departments pockets and also strengthen the capacity to deliver. He indicated that it has been a historical function in the Department for greener coordination and stakeholder management. One of the specific targets in the APP is to have a stakeholder and donor management strategy that should be implemented in the next three years.

He stated that there are different values that come with different partnerships both international and otherwise. For example, the Department is in partnership with the UNDP, UNFP and UNICEF. These are largely not more on monetary value but exchange of expertise in which the Department receives advice. When focus is shifted to the Welfare Services Programme, one will realise that there are those that will be monitored. For example, there is the USAID partnership in which there is an MOU for partnership for five years which has a three year extension on the governments capacity building programme. The partnerships are mainly about strengthening systems so that the government is able to respond better in instances of vulnerability such as HIV/AIDS related matters.

He indicated that the Department is at different levels regarding services and MPO becomes an important partner. The Department does have a partnership model with MPO. The models will vary but focus will be on welfare services which will be in monetary value not just from USAID but also other funders including German banks. He reiterated that the Department has a more structured model for better engagement with stakeholders, in particular the donors.

Ms Thamo Mzobe, CEO: National Development Agency, indicated that the mandate of the NDA is very broad and has two mandates in one. The objectives are is to provide grants to organisations; strengthen their capacity building programmes and organisational structures; research and engaging with communities for policy inputs for development, and conducting studies to inform programmes and policies.

She indicated that in terms of section 4, the NDA is mandated by Parliament and civil society at large to be the conduit of funds that would have come from various departments in the country, international donors and private businesses. However that has not been happening as the NDA has been getting grants from the Department of Social Development only. She reminded the Committee that the NDA is located at National Treasury where all the European Union funds are channelled for the NDA to execute its mandate through the civil society broadly. But since the change, which situated the NDA in the Department of Social Development, it became the sole responsibility of the Department to ensure the sustainability of the NDA through the allocation coming from National Treasury. There is therefore need for an engagement to ensure that if the NDA has to deliver on its broader mandate of granting funds to civil society organisations, then every government department has to contribute to the grants that will be disbursed.

She highlighted that NDA cannot disburse funds without having mobilised civil society and capacitated them in terms of governance and compliance with legislation and policy. That is the key role that NDA has been playing and there are more than a hundred thousand that have gone through the processes in terms of the grant capacity development model. Once capacitated, organisations are then given grants as start-ups for poverty alleviation programmes after which the organisations will then be graduated into small businesses that are led opportunities provided by the state.

Ms Mzobe said the NDA has focused on building the capacity of women in categories such as ECD, food security and manufacturing of school uniforms. The entity has targeted these areas because many women in the rural areas are in the farming space but do not have a link for cracking the mainstream market after harvesting. The social development for food security unit, SASSA has been the main value chain for these women to take their produce to markets and the farmers have been given priority to ensure that the Department procures from them first. Entities such as SRD and SASSA have also been taking produce for their food programmes from these empowered civil society groups.

She stated that NDA is gunning towards having small businesses prioritising women for poverty alleviation. The whole aim for the NDA is to ensure that the ever-escalating database of grant beneficiaries be decreased in that the beneficiaries are weaned off the grid and are able to generate income from the opportunities provided for by the State. In light of the pandemic, National Treasury offered a database for service providers that had been identified, from which the government has to procure. When the NDA had an engagement with the National Treasury, the latter was informed of the seasoned cooperatives that are women and youth led that have been sewing uniforms. The aim was that these cooperatives be prioritised for the production of masks. The NDA then shared the database with various Departments and the Department of Social Development and SASSA have been the mass procurers of masks from the cooperatives. More than hundred million benefited the cooperatives during the COVID-19 pandemic.

She noted that in the past, NDA managed to cater for ECDs that are not infrastructural especially in the rural areas in which mobile ECDs were introduced. This has been due to the fact that there are infrastructural issues and because ECDs are a universal priority for the country and the entity needed to centralise focus for the ECDs.

Ms Mzobe highlighted that most of the food producing cooperatives especially in the rural areas are now linked to markets in the townships. They have also been linked to the Department of Agriculture too so they access more land. The cooperatives had been doing more small scale farming and have now extended. She said the NDA is happy to submit more factual data on the extent of the reach in fighting poverty.

She noted that NDA has done much work on research in terms of the landscape of the civil society. She reminded the Committee that the resources are shrinking for the civil society to survive. Therefore, the key aim is to centralise funding in the secondary civil societies so that they are able to have partners in primary civil societies in alignment with District Development Models. This will ensure that whatever contribution in terms of the NDAs interventions can be evaluated much easier and conveniently aligned to the District Development Model using those secondary civil society organisations.

She highlighted that the question of the ICT masterplan and digitalisation is going to hit the NDA hard, as much of the work is interface and labour intensive. The NDA always wants to evaluate and measure the impact of investments procured by government and also be able to engage at the level of development the shift in fighting against poverty. She said there has been challenges regarding ICT and these relate to the fact that the Department only allocated R200 million. The NDA could have done the ICT masterplan in one year but it was going to be very costly hence the plan had to be spread over a number of years. She appealed on behalf of the rural communities and civil society organisations that they also be highly captured if the digitalisation process is to stall further due to the resources that now have to be squeezed as a result of the pandemic. She emphasised that ICT is core and digitalisation now compelling the entity looks at creative and innovative ways to make sure that the civil society remain key role players in fighting the scourge of poverty. Civil society organisations have played a significant role during the pandemic and if they remain highly funded and capacitated, the objectives of the state through the NDA can be further realised.

Ms Busiswe Memela, CEO: SASSA, highlighted that SASSAs relationship with SAPO dates to about three years ago. SASSA could not come up with any solution to the constraints that were being faced regarding the R350 grant and approached SAPO for help in disbursing the funds. The funds had to be distributed in cash because of the procurement process and SASSA had to find alternative solutions which should already have existed. However, because of the timing, SASSA could not come up with any and ended up approaching SAPO which is the government partner, and SAPO has been disbursing funds to four million people for the past year that the programme has been going on.

She stated that out of the 11.3 million clients, 8 million are currently being serviced by SAPO and the majority necessarily do not get their funds through SAPO but by using the NPS system which has many advantages. Of the 8 million clients, only 500 000 actually go to the counter to get their funds from SAPO and another 200 000 that live in areas where there are no NPS structures to enable them to access their funds. These people end up having to go over the counter to SAPO.

She said joint ministries have put in place structures whereby not only are relationships are strengthened but also the delivery system of programmes that have to be delivered on as a collective. SASSA processes the clients but when it comes to the actual payment, the bulk of the clients are services using banks and this is about 38% of all clients. SASSA disburses funds using a banking system and not necessarily making cash payments and 30% of the beneficiaries get their funding through the banks. It is only those that get cash that have to go to cash points and withdraw through SAPO. She recalled that the Minister had said that in terms of the Constitutions, these people are not clients but beneficiaries.

She indicated that SASSA was not where it wants to be, but had travelled a long journey in trying to improve the system so that the people of South Africa do not have to go under a tree to get money and also ensuring that the people actually have a choice. She acknowledged that there is a whole range of other things that have to be dealt with particularly the issue of fraud in terms of card-replacements at the Post Office. She acknowledged that there is a lot that has been done but promised that SASSA would continue to do more to ensure that the people of South Africa experience dignity as they are serviced.

Ms Dianne Dunkerley, Grant Administration Executive Manager, SASSA, indicated that as at the end of the financial year, SASSA was sitting at about 2.2 million grants that were approved in the previous year but not yet paid. She emphasised that the 2.2 million figure referred to grants and not people mainly because in some instances, some people have more than one outstanding grant.

She noted that there are 1.4 million grants that have been approved on appeal but have not yet been paid. The appeals period comes to an end at the end of January, and the appeals for February, March and April are still being considered. The last date for citizens to lodge appeals for these three months is the 31 May. SASSA needs about R1.9 billion to be able to pay up all the grants that are outstanding and engagements are on-going with National Treasury and Social Development.

She said the Auditor-General identified a number of possible overpayments and SASSA went back to reconcile and consider the cases that had been identified by the AG. She confirmed that there are 31 929 grants that were paid to people who did not qualify and the majorities of these were on databases that were not available to SASSA, particularly when SASSA started working on those grants. The grants include payments made to applicants who were getting money from other COVID programmes that had been put in place by  government including payments to the small-scale farmers, sportsmen and various other categories of citizens who then also applied for the R350 grant. The total amount overpaid to these citizens is R11.1 million and SASSA is busy working with the Finance Department to see how these amounts can be recovered. She emphasised that the majority of these citizens only received one payment of the R350 because the moment the AG identified them, SASSA immediately stopped payments. That was able to limit governments loss considerably which is less than 0.01% of the total budget.

Ms Dunkerley indicated that all the validations for the grant were done electronically and there was not a specific person making the decision for the applications. The validations were done electronically against the information that was provided to the Department from a number of other departments and entities. SASSA relied a lot on that information and it allowed for people who did not qualify to benefit from the grant. However, as will be noted from a number of appeals that were received, the error was on excluding the people who could have otherwise benefit rather than including the people who did not qualify. All in all, the validation processes that were put in place were relatively effective and it is something that SASSA would want to introduce for our grant applications going forward.

Mr Tsakeriwa Chauke, Chief Financial Officer, SASSA, stated that during the state of disaster, SASSA had to revise the COE budget. Also during the adjustment budget, SASSA lost R230 million which meant that the 290 positions which were initially tabled to be filled had to be revised downwards and priority was given to critical positions. During the year 2021, SASSA undertook a project for the year 2021/22 to see how best the COE which is shrinking and affecting most of the local offices can be managed. The project identified 134 posts and most of them are actually at lower levels. He recalled from the presentation that the Department had indicated that the intention is to have many of the local offices led at level 12. However, that is currently not practical and as a result, the Department had to makeshift arrangements for level 8 personnel to run these offices. Where possible, the Department hopes to have people act in those vacant positions to stabilise operations.

He indicated that the Department has already undertaken all the processes of awarding a contract that will at least help in the reengineering process. Once the process is done, the Department will be able to go with a scientific assessment of capacity requirements to National Treasury. There are a number of senior managerial positions that are currently vacant and for the purposes of stability and continuity, the Department had to ask some of the senior manager to oversee certain units. He informed the Committee of three Regional Executive Managers who have been tasked with overseeing other regions for which Executive Managers are yet to be appointed. He reiterated that the strategy was employed to cushion the impacts of the budgetary cuts.

Mr Chauke said that within the contracts that SASSA currently has, the plan is to review them when they expire to see whether the contracts are organisationally fit and also if the entity can reduce some of the scope of the projects. The process will help fund some of the pressing issues within the organisation.

He stated that SASSA is looking to engage with the Treasury on the usage of return surplus. Where there are savings, the Department hopes to ask Treasury for a leeway to use the amount for the purposes of running some of the high impact programmes and projects such as the upgrading of ICT infrastructure in local offices. He said ICT infrastructure in local offices needed to be upgraded because the offices would need enough bandwidth to be able to process transactions and also be able to answer some of the calls without overwhelming the system.

Ms Brenda Khunoane, Chief Director: Social Insurance, DSD, indicated that over the past 20 years, the country has spent about 3.5 % on social grants and other countries at the same level of economic development around the continent are spending a little lower than that on social grants. This is primarily because of the economic performance of these countries. On the other hand, higher income countries are spending around 6% or more on their social security programmes.

She said that comparing South Africa to other countries in terms of interventions on poverty and inequality have to be informed by where South Africa is as a nation compared to other countries in the perspective of how resources in the country are being used to deal with poverty and inequality. [Inaudible] market inefficiencies that result in some people being very poor and others being very rich. Basically the income distribution issues which affect the extent of a countrys economic development trajectory is higher or lower.

She referred to the slide that indicated that South Africa is higher than other countries. Before interventions are made in terms of the government fiscal policy takes place and social grant transfers are made, countries in the extreme left such as Slovakia have their income inequality ratio at about point 4 and through income interventions these countries are able to reduce the rate of inequality to about point 24. Therefore, better income distribution and economic participation by the country as a whole affects the growth trend of the country. She indicated that South Africa is the most unequal country in the world both pre and post interventions by the government. Before interventions, the country starts at .74 which is the highest for all the countries and after interventions through the tax system that is reduced to .62 which means South Africa still stays way above all the other countries in the world.

Ms Khunoane referred to the slide that shows that when compared to other countries, South Africa uses the tax system to reduce the rate of inequality by only 13% whereas other countries are way ahead. She compared South Africa to countries on equal level of development such as Brazil which is at 18% and Latvia and Estonia which are not rich countries but are using their tax system to impact on inequality.

She stated that the countrys performance was an important consideration in dealing with the design for social protection system, particularly in how the country is doing in dealing with poverty and inequality. She said how the government transfers in terms of income support or deal with income distribution becomes an important tool to the governments disposal.

She indicated that the Department was fundamental in dealing with the issues of poverty and inequality in the country and every intervention helps in dealing with poverty, inequality and debt prevention in the country. Poverty is viewed not just from the lenses of income only but from a much broader set of interventions that have to be put together because poverty affects a lot of areas including access to education, healthcare, water and sanitation. Grants become one aspect but remain relevant because income enables the beneficiaries to be able to access other benefits. For instance, if healthcare is made free but facilities are ten kilometers away without the provision of transport it means people cannot access that benefit. So there is need for an interaction to ensure that the benefits are complimentary.

Ms Khunoane highlighted that the Department recommends that the child support grant be extended. There is a case that the Department is currently dealing with, which relates to the serious problem of orphans in the country accessing the foster care grant. Most children are going into the foster grant because of the differences in money given to the child support and that given to the foster care grant. Given the high levels of poverty in the country, many families are unable to support orphans they are taking in and government provides support for such families. However, the child support grant is below the poverty datum line. It is at around R450 which is insufficient to buy proper food for the child for the whole month. Hence, they end up trying to access the foster care grant because the amount there is a bit higher.

She said the problem comes from the fact that the foster care system is supposed to be providing protection to vulnerable children without adequate care, in dangerous situations or being neglected. In order for those children to be put in proper care, there is need for social workers to assess those households in which the children are to be placed, and then go to court to present the case before the Magistrate who then gives an order for foster care. In order to maintain the protection, every two years, there is need for social workers to go and check to see whether the children are still okay and an assessment is done. If it is satisfactory, a foster order is again issued by the Magistrate. This happens every two years because it is supposed to be a foster assessment and not an income support. However, families that would have taken in children after their relatives have died are also trying to get into the system yet the children do not qualify.

She said that the Department is of the view that such cases overburden the whole system. The orphaned children should be taken out of the foster care system and put in an extended child support grant in which the government tops up the amount to support those families.

She said that National Treasury had previously agreed with the proposal and had allocated money for it. What is left is to change the legislation but the legislation was only approved in December of 2020. The Department had an estimated figure of R600 million and that allocation was obviously removed and the allocation of the grant reduced. As a result, the Department no longer has that money to implement this policy which means the ability to comply with the court order that required the Department to address the foster care crisis will be hampered unless an allocation is made.

She noted that engagements with National Treasury are on-going to ensure that the Department manages to implement the policy, be able to reduce the burden on the foster care child system, and also give better support to the children that are being raised by extended family members.

She said that in order to have maximum impact in terms of poverty and inequality in the country, the Department has to make sure that the money that is advanced for the social grant system is used for the intended purpose. The Department has to tackle issues of fraud and maladministration and that has to be done through an institution that does inspection.

She said that the Department is currently incubating the institution and currently, there are ten people and a skeleton plan. Similar to the extension of the child support grant, cash was given to the Department before hand in order to properly activate the Inspectorate and staff it. However, that money is gone now as a result of the reduction in the allocation which means the ability to implement the Inspectorate and ensure that the performance and integrity of SASSA is improved is at risk. She emphasised the importance of having the money for the Inspectorate as it is about improving the capacity of the State to take policy in and ensure that leakages are reduced.

Ms Khunoane said the lessons that had been identified in respect of SASSA had to be extended to the SRG mainly because giving people an income provides the same beneficiaries with an opportunity to access other services that government provides. She said the grant is empowering in that it gives people the right to decide what food to buy and what else to use the money for which will help build the performance of the economy going forward. As such, the grant should continue because it deals with able-bodied South Africans who do not have jobs given the performance of the country in addressing the problem of job creation.

She said that if the country is not able to ensure that everyone has a job, then the government had to ensure that people have access to some income in addition to access to other programmes like skillset development. Some of the projects by the government are long-term intervention to dealing with the issue of poverty and they do not provide short term relief. As a result, the Department proposes that the grant be extended until a lot of the beneficiaries graduate to being employed with jobs that are sustainable.

That is also the basis for the other proposal for a Basic Income Grant. Without income it will become difficult for members of the society to participate in other activities in a democratic society such as voting.

She emphasised that the intervention was not only key but also important to ensure that the countrys social protection system has an impact. The cost of creating one job is much more than the R350 given currently to beneficiaries. She reiterated that the hope was for the country to be able to get to where other countries are in terms of development.

Minister Zulu thanked the Committee for the questions. She said her understanding is that the Department has a responsibility in ensuring that there is improvement generally in the well-being of the people of South Africa but generally focused on the most vulnerable. The presentation and the responses from the Department emphasised the point that the Department is meant to be able to help the people of South Africa reach their fullest potential.

She indicated that the Department needed to do everything to ensure that there is collaboration with other departments such as Health, Education and Transport so as to help the people of South Africa reach their full potential. There is need to consistently engage on the issues of social development because if life is made easier for South Africans by other departments who are supposed to be delivering services, the work of the Department is thus made easier. She agreed with what the Committee had said about the interlinkages of the work of other departments to social development.

The Minister said the task during the Sixth Administration is therefore to ensure that the Department does not work in isolation. The Minister said she is pushing for the Department, SASSA and the NDA to work in a portfolio so that the entities do not work isolated from each other or in silos. Therefore, at the centre of all interventions is to use every opportunity to make sure that in a coordinated manner, the entities are able to deliver services to the people of South Africa.

She said the second most important area is government’s identification of the capacity of the state. She stated that  government has to make sure that the state is capacitated enough to be able to respond to the needs of the people of South Africa. She recalled that most of the questions that had been raised and the responses that had been given all pointed to the issue of the states capacity.

The Minister indicated that she was committed from an Executive point of view to ensure that the posts are filled and is also pushing the Department to make sure that the posts that are vacant are filled as quickly as possible.

She said the Department responded by giving information about timeframes and also the challenges of budget cuts. The Department clearly articulated the impacts of the budget cuts and how those are going to have a negative impact on the work of the Department.

She indicated that there was no need to moan and groan. The country has been and is still going through a terrible phase of COVID-19 and is therefore forced by circumstances to relook what is in the Departments kit. She said the important question to ask was, how can we maximise that?

Minister Zulu said that people had to realise that there are certain things the country will not be able to do in the old way. The Department was never going to get money from somewhere but that was also an opportunity to reinvent. She recalled the question that had been posed to the NDA asking for the entity to explain its work and mandate.

She applauded the Chairperson for asking the question about SMMEs and how the Department can make sure that the people are empowered to be able to take care of themselves. She indicated that she wants to break the notion that when  government is supporting the poor, it is creating a dependency syndrome and that the state just wants to give and give. She said this was to be understood from the perspective that even before the COVID-19 pandemic, the state has been facing challenges regarding economic empowerment particularly for women, the youth and people with disabilities. The Minister reiterated that the country was struggling with these issues and the Department could confirm her commitment towards ensuring that the experience she has as the Minister can help make the situation better.

Minister Zulu said the financial muscle to be used by the Department and its entities has to be the money that is circulating in the communities and that can be done by improving the capacities of the communities by ensuring they run their own cooperatives and spaza shops. She reiterated the importance of collaboration in ensuring that this is achieved.

The Minister said the Department is in a space in which it has to pull back because of the appreciation and understanding of the fact that there is not a person who would prefer to go and get R450 for a child when that person can actually be working somewhere and getting something like R2 000 or R3 000. The majority of the people would rather go to where they can get more money because they are not just looking at the child support grant which is below poverty line as earlier explained. So, with all the challenges currently faced, the Department needs the reset button which has to be realistic considering the situation the country is currently in.

The Minister said this is an opportune time for the Department and its entities to re-engineer themselves. However, the Department cannot be re-engineering or resetting the button forever. The people of South Africa are waiting for the Department to give the necessary services. She hoped that the answers that were given were adequate although she felt that some were not adequate.

She indicated that she had noted some of the questions which were not adequately answered due to time constraints. She promised to sit down with the Department and identify the questions that have to be answered to take the Department forward. She insisted that the Committee was not only constituted for oversight but also because the members have a responsibility to play in that oversight by making a contribution which shapes how the Department works.

The Chairperson thanked the Minister and the DSD portfolio for the engagement. He said the Committee had an interest in the work of the Department because the work impacts on the lives of the people of South Africa. Also, the Department has potential impact if a certain level of optimality is reached.

He indicated that time was the greatest enemy but appreciated the fact that the Department had promised to write to the Committee with further responses. He said there were issues that the Department had to prioritise in the written responses and these relate to the interventions that the Department has put in place to help the businesses that have already been highlighted, such as women-led and rural businesses. These areas are important to the Committee because the cutting and consolidation of budgets has a limit and for the country to move out of the situation that is currently prevailing, interventions had to be made to have many of the South African involved in income generation programmes.

The Chairperson said the question of money circulating within communities so that there can be one or more jobs coming from these companies and businesses owned by the designated groups was important. He indicated that in the long-term, as businesses grow, that would allow SARS to get some form of tax to be used to fund government and departments so they are able to fulfill their historical roles. He requested for the information so that the Committee can further follow up on the issues.

He asked for the graphs that had been presented earlier on South Africas performance to be submitted to the Committee. He thanked the Minister and the Department’s team and moved to agenda item 2.

Committee minutes

The minutes dated 11 May 2021 were considered and adopted.

The Chairperson requested that the Secretary reminds the Members of the meetings that were to be held on 19 May 2021.

The Secretary informed the Committee that there were briefings with the Department of Agriculture, Rural Development and Land Reform, and also the Department of Health.

The Chairperson said the Committee was going to be stricter on time and requested that Members go over the presentations and start crafting responses and interventions before the meeting.

The meeting was adjourned.



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