SASSA social grant fraud allegations; DSD BRRR; with Ministry
Meeting Summary
Budgetary Review and Recommendations Report (BRRR)
The Portfolio Committee convened urgently to be briefed by Mr Joel Cedras and Mr Veer Gosai, University of Stellenbosch students, on their findings on alleged weaknesses in SASSA’s social grants payment system and fraud in the application process of the Social Relief of Distress (SRD) grant. The Minister and Deputy Minister of Social Development were present.
Mr Cedras and Mr Gosai presented their study, detailing the reasons for their research, the methodology used, the legal framework, and their findings.
Committee members appreciated the presentation and wanted action to address these allegations as the Committee had raised similar concerns as representatives of the public. They also asked about SASSA’s response when the students tried to discuss their findings with SASSA.
The Minister thanked the students for highlighting significant flaws in the SASSA system. She proposed that SASSA refrain from presenting. Instead she requested 30 days to investigate the allegations and report back to the Committee, a proposal that the Chairperson accepted after deliberation.
The Committee considered and adopted its Social Development Budgetary Review and Recommendations Report (BRRR).
Meeting report
The Chairperson welcomed Minister Nokuzola Tolashe and Deputy Minister Ganief Hendricks. The meeting was set to feature a presentation by Mr Joel Cedras and Mr Veer Gosai, followed by a Q&A session. Thereafter, the South African Social Security Agency (SASSA) would respond to the findings.
The Chairperson emphasised the urgency of the meeting due to media article about Mr Cedras and Mr Gosai alleging weaknesses and fraud within the Social Relief of Distress (SRD) grant system. She noted concerns raised by the Auditor-General on the Committee's oversight capabilities, stressing the need to utilise constitutional mechanisms to meet these standards. The Committee invited the university students, as authors of the GroundUp article, to present their findings, with SASSA expected to respond.
Minister’s opening remarks
Minister of Social Development Nokuzola Tolashe greeted the Committee, SASSA officials, and students Mr Cedras and Mr Gosai, expressing gratitude for their contributions and acknowledging their bravery. She discussed the importance of the social grant system, which supports 28 million beneficiaries, and stressed the need for vigilance against technological threats. The Minister, Deputy Minister and SASSA take allegations of fraud seriously and are committed to protecting personal data. While the allegations raised by the students are concerning, they are still unverified, and she has instructed SASSA to investigate the matter thoroughly. The Minister looks forward to further discussions after implementing these necessary measures.
The Chairperson thanked the Minister and invited Mr Cedras and Mr Gosai to present, requesting that the presentation be accessible, considering that some Committee members may lack technical expertise on the subject matter.
Mr T Munyai (ANC) suggested that the presentation be delivered using technical terminology. There are Committee members who have the expertise to assist in comprehending the subject matter, which requires their thoughtful consideration.
The Chairperson dismissed Mr Munyai's suggestion for a technical presentation, emphasising the need for simplicity. While some members, like Mr Munyai, are IT specialists, the presentation should be accessible to all. If Mr Munyai wanted a technical discussion with the students, it could be arranged separately for a later time when questions could be addressed using technical language.
Findings on the SASSA SRD system
Mr Joel Cedras and Mr Veer Gosai, first-year ICT students at Stellenbosch University, said that their study was prompted by issues with their own Social Relief of Distress (SRD) grant applications, which were rejected because their identification numbers were already in use. The presentation covered their research methodology, including interviews with fellow students to assess the scope of the problem. They demonstrated how they generated numerous identification numbers using algorithms, detailing the legal framework and presenting their findings and recommendations for SASSA.
Discussion
Ms M Makgato (ANC) welcomed the students’ presentation, emphasising the seriousness of the allegations they raised against SASSA, which carry significant financial and security implications. The Committee lacked a thorough understanding of the students' conclusions, referencing Mr Munyai's request for a technical presentation. She felt disappointed that the Committee did not receive a more detailed technical report from the students.
Mr Munyai noted the ANC's stance against fraud and corruption while welcoming the students' presentation. He emphasized the importance of a technical report, citing the need for robust oversight and a deep understanding of national security issues related to government systems. He noted it was critical to adhere to the Protection of Personal Information Act (POPIA) and stated that the Committee's role is to seek the truth, not defend SASSA or the Minister. He urged that investigations begin urgently, with a report presented to the Portfolio Committee within 30 days. Additionally, he suggested the students present their findings to the Department of Social Development (DSD) for further technical input, understanding their concerns about potential legal implications.
Ms P Marais (EFF) thanked the students for their presentation and highlighted challenges the public experienced with the grant system. During election campaigns, some political parties sign up citizens for SRD grants, taking advantage of those without phones. Ms Marais emphasised the corruption within SASSA, mentioning that many people struggle to access their funds. She suggested a connection between SASSA and NSFAS for students transitioning to higher education and acknowledged the need for solutions. She reiterated the importance of investigating fraud and corruption within the department.
Ms A Abrahams (DA) thanked the Chairperson for prioritising this meeting on an issue impacting the country’s vulnerable youth. She acknowledged the work of Mr Cedras and Mr Gosai, commending their research report on SRD grant ineligibility and fraud, which highlights ongoing concerns. She challenged the Minister’s claim that the system does not exclude eligible applicants, noting how fraudsters exploit high youth unemployment. She raised questions on SASSA’s response timeline, potential banking sector involvement, and survey findings on youth understanding of the SRD grant’s purpose.
Rev N Gcwabaza (MK) thanked the presenters, stressing SASSA’s critical role in distributing grants and protecting its system from fraud. He urged SASSA to investigate if the notifications issue affects only specific cases or is widespread. He noted the difficulty in balancing system security with accessibility for beneficiaries and suggested involving banks and the Financial Intelligence Centre (FIC) in addressing fraudulent accounts. He requested the Minister to conduct a thorough investigation and report on these concerns.
Ms D James (Action SA) commended the students’ courage in exposing the issue. She recalled similar whistleblower reports from July 2023, expressing frustration that blocked grant applications, reportedly due to duplicate applications, had been flagged by beneficiaries without SASSA’s resolution. Ms James questioned why these concerns hadn’t been addressed sooner, suggesting that corruption within SASSA might be delaying action. She urged immediate attention, noting that millions relying on the grant are suffering, and emphasised the urgency of tackling fraud and restoring accessibility.
Mr K Ramaila (ANC) thanked the students for alerting them to potential corruption. He acknowledged the need to improve system security while maintaining accessibility, especially considering the current allegations, which require thorough investigation and authentication. He proposed a 30-day period for the Department to report back. He supported technical discussions with the students to help DSD understand the issues. Evidence was important and he advocated for a transparent, fair investigation to determine the validity of the allegations and establish accountability.
Ms N Tafeni (EFF) spoke in her vernacular. She then asked for clarity on slide 8, questioning if nearly all individuals born in February 2005 had applied for the SRD grant, as indicated by the unusually high application rate for that birth month. She also raised concern over slide 10, inquiring if grant recipients were using both personal IDs and bank details. Which channels had been used to report the fraud allegations in the SASSA system and what was the attitude of SASSA officials in their response?
Responses
Mr Gosai emphasized that their presentation aimed to clarify their SRD grant findings in simple terms for public understanding, rather than the technical specifications. No hacking had occurred as they legally used publicly available ID numbers and entered them into the SASSA system to obtain responses. He replied that the POPI Act applies only to companies, not individuals.
Mr Gosai supported further investigation and the integration of information across departments, like NSFAS and SARS, to improve SASSA's detection of ineligible recipients. Mr Gosai provided an example where the SASSA system should have flagged his account as it was exceeding R600 in his bank account, he is a registered taxpayer, and had received a pay check in that month.
Mr Gosai said that they completely support facial verification. We understand that SASSA has told the public that facial verification is in place. However, Mr Cedras did contact SASSA requesting the SMS facial verification link, so he can resolve the issue. However, he was not successful in receiving this link, as the SASSA official explained that the facial verification system has not been put in place. Perhaps it is fair to assume that officials, particularly, call centre operators, have not been trained on the topic yet and it is in fact in place.
Mr Cedras detailed their attempts to address SRD grant identity theft by contacting the SASSA hotline on several occasions. An initial call on 2 October 2024 led to an unfulfilled promise of a verification SMS within 24 hours. Additional calls to regional SASSA offices on 11 October were unsuccessful, as no contacts were reachable. The final call on 17 October confirmed that the application remains unmarked as fraudulent, and there is no SMS verification link available despite claims. Mr Cedras confirmed that banks have shown interest but chose not to disclose specific names.
Mr Gosai highlighted that many Stellenbosch students lacked awareness of SASSA and the SRD grant of R370 for unemployed individuals in extreme situations. When comparing it to the American COVID grant, they noted that even those familiar with grants were surprised by their eligibility and never considered applying for assistance on a personal level.
Mr Cedras addressed if the SRD grant issues stem from human or system problems, suggesting it could be systemic but acknowledged the potential for human error. Recommended security measures, like rate limiting, would not impede legitimate applications but would help prevent abuse. He clarified that their generation of identification numbers utilized public information available on government websites and did not involve hacking or illegal activities. He affirmed the legality of their methods.
Mr Gosai was concerned about grant theft, sharing his own experience of having his grant stolen shortly after turning 18 in July 2023. He emphasized the lack of mechanisms for vulnerable individuals to dispute grant-related issues, noting that the phone number associated with the grants often belonged to fraudsters. He highlighted the futility of contacting SASSA for resolution, as the only recourse is to call, which proves ineffective.
Mr Cedras expressed a willingness to engage directly with SASSA on their technical findings. He raised concerns about the 91% application rate which appeared illegitimate. His survey findings support the claim that most respondents did not create their applications. SASSA's media statements seemed to confirm their findings, with Mr Gosai available to provide further details from the SABC interview.
Mr Gosai noted their privilege in interviewing a SASSA representative, emphasizing that the meeting was motivated by concern rather than glamour. He expressed frustration with the SASSA hotline, describing it as inadequately equipped to handle the volume of fraudulent cases they encountered.
Follow-up questions
Mr Munyai expressed concern to the Minister and Deputy Minister on the allegations from students about the ineffectiveness of the SASSA hotline, labelling it embarrassing for the portfolio and the Minister. He called for SASSA to conduct vulnerability assessments and penetration tests on their IT systems. A formal investigation report needed to be presented within 30 days. Munyai urged the Minister to engage top experts in cybersecurity and data protection, stressing the importance of ensuring the integrity of the grants that South Africans rely on for survival.
Ms Abrahams asked if the students had received an invitation to present their findings to SASSA, DSD or the Minister’s office. She referenced a pay check exceeding R600 in Mr Gosai’s bank account questioning if this account was also used by fraudsters. She asked if this raised suspicions of fraudulent activity, given that the same bank account was involved.
Ms Makgato stressed the importance of a comprehensive investigation into the allegations. If confirmed, the findings should be welcomed and the Department held accountable. She indicated that the meeting was coming to a close as SASSA could not provide comments at that time
The Chairperson asked Ms Makgato to explain what was meant by this.
Ms Makgato responded that the students have spoken but it is not necessary for the Department to speak yet. However, this decision is at the Chairperson’s discretion.
The Chairperson emphasised the need for quick questions as the Department was scheduled to present as well. It was important to allow DSD to respond to the students' allegations, stating that it is crucial for the Committee to fully understand the situation. The allegations should not go unanswered as that would be illogical.
Mr Ramaila inquired if the students had filed a case and requested the case number. If not, he asked why a case had not been made.
Rev Gcwabaza spoke to the importance of the recommendations, expressing hope they would not lead to court action. Biometric verification recommendations had been previously raised with SASSA. He delicately reminded the students that their suggestions should not be viewed as their intellectual property if implemented, as similar proposals have been made before.
Ms Marais pointed out that comments about court cases and legal matters were unnecessary. One should focus instead on the challenges faced by the two students. Their experience revealed systemic flaws. She mentioned a recent opportunity for collaboration with SASSA and Eskom to improve data capture. Emphasising a need for open dialogue and innovation, she encouraged listening to the SASSA challenges rather than resorting to legal action. The students' intentions were to identify issues, not provoke conflict.
Responses
Mr Gosai agreed on the need for internal audits and vulnerability assessments before deploying systems to the public. He expressed frustration over the lack of response from SASSA after reaching out to SASSA Executive Manager for Grant Administration, Mr Van Vrede, who directed him to the IT department, but he received no follow-up.
On his grant application, he clarified that while he uses one bank account. Fraudsters could open additional accounts in his name, complicating detection unless he directly inquires at banks.
Mr Cedras stated that they have not initiated a court case because they are unsure against whom to file fraud charges—whether against SASSA or the individuals who stole their identities whom they do not know. They are currently seeking legal advice on this.
Mr Gosai expanded, noting that the identity of the fraudsters remains unknown because the phone numbers used in the fraudulent applications do not belong to them. He referenced the RICA Act and highlighted widespread RICA fraud, suggesting that the grant fraud could involve using the identity of deceased individuals or those unaware that their identity was being used. He welcomed proposals for a biometric system that could save millions. He emphasized the urgency of addressing these issues as vulnerable households rely on the R370 grant for survival.
The Chairperson thanked the students for their responses. The Minister, DSD and SASSA would have the opportunity to present in response to the students' presentation.
Minister Tolashe. thanked the Committee for recognising the ongoing challenges as previous attempts to address them were often ignored by SASSA officials. The Minister expressed gratitude to the students for sharing their personal experiences and again emphasised their constitutional right to the grants. The Minister stressed the urgency of thorough investigations, proposing a 30-day timeline for a meaningful report and effective solutions to address financial leakages. The Minister requested that SASSA not present, as their information does not address the broader context. The Minister also offered to meet with the students to discuss their concerns confidentially.
The Chairperson thanked the Minister and requested five minutes to discuss the Minister's appeal, emphasising that this short discussion would assist in making a decision that reflects the Committee members' views adequately. This discussion would impact the meeting's agenda and she called for a brief adjournment.
Mr Munyai emphasised the importance of allowing the department time to investigate allegations thoroughly and respond meaningfully. He stated that giving the department this opportunity is the only logical course of action.
Ms Abrahams argued that it would be illogical to deny SASSA the chance to provide feedback, as the Committee had already invited them to do so. She noted the importance of broadcasting this meeting to the public, especially since there are SASSA officials present from Johannesburg using taxpayers' money. While she acknowledged the need for an investigation, she insisted that it should not be conducted by SASSA or DSD but rather escalated to the SIU or a commission of inquiry. She strongly advocated for hearing SASSA's presentation.
[Brief adjournment]
The Chairperson apologised for the inconvenience of the adjournment and noted that presentations were expected from both Mr Cedras and Mr Gosai, as well as from SASSA. The students had presented. However, requests had been made for an investigation first without SASSA's input today. Acknowledging the concerns raised, the Chairperson emphasised the need for the Minister, Deputy Minister and DSD to thoroughly investigate the allegations and report back to the Committee within 30 days, underlining the Committee's duty to exercise oversight.
Ms Marais acknowledged the need for the Minister and the Department to investigate but expressed frustration over past inaction despite ongoing concerns raised by the Committee. The students’ efforts have highlighted persistent problems, stating that as public representatives they expect tangible results. It seems the Department believes it is doing us a favour, while they are all committed to ensuring aid reaches those in need. She urged the Department to take the 30 days seriously and return with substantive findings.
Mr Munyai expressed gratitude to the Chairperson for acknowledging the Minister's viewpoint. While these are serious allegations, he emphasised the importance of the DSD investigation outcome and respected the Chairperson's decision to pursue further inquiries. He thanked the Chairperson for leadership in addressing this.
The Chairperson acknowledged Members’ concerns and emphasised the importance of making the right decisions. While not dismissing the presentation and discussions, the Chairperson agreed to grant the Minister and Department 30 days to investigate and report back to the Committee on the allegations raised by Mr Cedras and Mr Gosai as well as past concerns raised by the Committee. The Chairperson expressed gratitude to Mr Cedras, Mr Gosai, Minister, Deputy Minister, DSD and the Portfolio Committee for their contributions.
Budgetary Review and Recommendations Report (BRRR)
The Chairperson acknowledged that Members had already reviewed the 70-page report and so requested a focus on the recommendations section, as these would determine support for the report’s adoption.
The Committee Content Advisor explained that recommendations had been tailored based on the Committee’s observations about the Department of Social Development (DSD), the South African Social Security Agency (SASSA), and National Development Agency (NDA).
The Content Advisor presented the Committee’s recommendations.
Department of Social Development recommendations
The recommendations included addressing the Audit Committee, Independent Inspectorate for Social Assistance, gender-based violence, social assistance programme and effective entity oversight.
Mr Munyai said that he had sent his recommendations via email and requested that these be considered in the review process.
The Chairperson asked Mr Munyai to summarise his recommendations for the Committee's benefit, as some members may not have read his email. She asked him to ensure these recommendations align with insights from the BRRR engagement.
Mr Munyai agreed and highlighted the need for issue-centered reporting, beyond simply audit performance outcomes, to focus on root causes relating to budget allocation, expenditure targets, and the impact on beneficiaries. He proposed recommending in the BRRR report that SASSA submit an audit action plan within 14 days. He suggested enhancing the Committee’s oversight over the department and advocated for an integrated call centre for DSD, SASSA and NDA. He also urged finalisation on Basic Income Grant (BIG) policy and a 14-day turnaround strategy from the NDA.
Ms Abrahams supported the urgency of all recommendations but requested that “with urgency” be added to the section on the Gender-Based Violence (GBV) command centre, as it has been closed for some time despite GBV being a significant issue. On the Social Assistance Programme, she suggested that training should extend to SASSA staff, not just social workers. She shared an example of a woman seeking a child support grant in person but being told to apply online, even though SASSA’s systems had been reported offline.
The Content Advisor acknowledged Mr Munyai's recommendations, noting that the email had not yet been received but would be followed up. These recommendations are directed to the Minister after adoption by the National Assembly. Mr Munyai’s input will be documented in the Committee minutes. The Basic Income Grant (BIG) recommendation would be included in the BRRR report. On the NDA turnaround strategy recommendation, the advisor noted it does not require inclusion in the report.
Mr Munyai spoke to the importance of critical skills raised in previous meetings, saying that these should be reflected in the BRRR recommendations. He acknowledged the advisor's explanations and points.
Ms Abrahams said that under the Independent Inspectorate for Social Assistance understands the auditor general recommendation of the appointment of the Executive Director and which further speaks on the commitment of funding between SASSA and the DSD, since the Social Assistance Act 13 of 2004 speaks 85 persons when SASSA only has 12 persons. Ms Abrahams asked will this be efficient as there will be this appointed head just managing 12 people in fulfilling their functions. On funding, can we not include in the recommendation apart from the appointment of the Executive Director, that the Inspectorate is adequately and appropriately funded. The BRRR makes mention of consequence management but do we have it in our report as a recommendation.
Ms Abrahams discussed the Independent Inspectorate for Social Assistance noting the Auditor General's recommendation to appoint an Executive Director for it and SASSA and the DSD making a commitment to its funding. She raised concerns about the Inspectorate's efficiency as the Social Assistance Act calls for 85 staff, yet SASSA currently employs only 12. She suggested the recommendation include that provision should be made for adequate funding of the Inspectorate. She inquired if consequence management is reflected in the BRRR as a recommendation.
The Chairperson requested input from the Committee to confirm if they agree with the recommendations discussed.
Mr Munyai expressed agreement. He reiterated concerns about the audit action plan and the Basic Income Grant (BIG), emphasising these fall under the Minister’s responsibilities. He raised concern about the content advisor’s comment that it is not within the Committee’s scope to propose turnaround strategies directly.
The Chairperson clarified that the recommendations are directed to the Minister, indicating that the turnaround strategy does not need to be included in the report, as it is within the Committee's authority to invite the NDA to present directly to them, without needing the Minister's involvement.
South African Social Security Agency (SASSA) recommendations
The Chairperson said the recommendation on social grant payment controls is very important for oversight of SASSA. The SASSA Act objectives are to manage, administer and pay grants. She recalled arguing with SASSA on television as according to the Constitution, SASSA’s obligation ends when the money is in the recipient’s pocket and not in the bank. SASSA says it paid the money into the bank account but if people check their account and find that their account is blocked for whatever reason, SASSA has not been absolved of its responsibility. Otherwise we would not need SASSA; we would just need someone to send money to bank accounts. We would not need a whole entity to do this if that responsibility is so narrow.
The Chairperson emphasised the importance of oversight for SASSA, highlighting that the objectives of the SASSA Act include the management, administration, and payment of grants. She criticised the narrow view of SASSA's responsibilities, arguing that simply transferring funds to bank accounts is insufficient. If SASSA's duty ended once money was deposited, there would be no need for the agency, as anyone can simply put money into bank accounts. Recipients’ access to their funds is a crucial part of SASSA's obligations.
Ms Marais supported the Chairperson's remarks, recalling instances from the previous month when individuals were unable to access their grants, with SASSA claiming it was not its responsibility. She emphasised that it remains SASSA's duty to ensure that funds are distributed properly.
Ms Abrahams inquired about the possibility of enhancing communication on grants, suggesting that staff should be better equipped to provide accurate advice to the public on the various types of grants available.
Mr Munyai recalled the Cash Paymaster Services (CPS) era and emphasised the importance of engaging with the Special Investigating Unit (SIU) and other relevant agencies. This matter should not be overlooked.
The Committee content advisor acknowledged the point about Cash Paymaster Services (CPS) being terminated and migrating grant payments to the South African Post Office was included in the BRRR. She asked the Chairperson for guidance on how to incorporate the comment about SIU effectively.
The Chairperson noted that the recommendation would be handled internally, as the Committee has the authority to invite them for discussion.
Mr Munyai expressed his disagreement, stating that past administrations have shown that internal handling of such issues is insufficient. He emphasized the need for the Minister and the Executive to address the matter directly.
The Chairperson said that it is the responsibility of this Portfolio Committee to initiate contact with the SIU and other relevant entities on the issues raised.
Ms James suggested including a recommendation that SASSA implement identity verification measures, as the Shoprite Money Market accounts do not adhere to FICA regulations. She pointed out that it is possible for a single individual to hold numerous accounts such as over 50 with Shoprite Money Market and the FNB Zero Account, which could lead to fraudulent activities.
The Chairperson indicated that since the Shoprite Money Market accounts had not previously been raised in Committee discussions, it cannot be included as a recommendation in the BRRR. However, it can be addressed as a separate issue.
National Development Agency (NDA) recommendations
The recommendations included filling critical vacancies and monitoring and evaluation.
Ms Abrahams expressed concern about the Auditor General findings as the NDA allocates 60% of its budget to employee salaries and 20% to CEO funds, which detracts from its core mandate of community service work. She highlighted the need for a more balanced approach to resource allocation.
The Chairperson acknowledged the concerns on budget allocations but emphasised the urgent need to fill positions within the NDA.
Rev Gcwabaza noted the NDA shortcomings in its failure to fulfil its mandate effectively. He stressed the need for a comprehensive strategy to ensure that individuals transition out of the grant system into sustainable livelihoods. He urged the Minister to implement a solid plan that addresses this, ensuring that both SASSA and the NDA work towards supporting people in achieving financial independence and reducing dependency on grants.
The Chairperson agreed and referenced Mr Munyai's recommendation for a turnaround strategy from the NDA.
Mr Ramaila suggested that the term "decentralised" be removed which would then read as "provincial monitoring tools."
The Chairperson expressed no objection to the removal of "decentralised."
The amended BRRR was adopted by the Committee.
The Chairperson said that the BRRR would be published in the ATC and sent to the House.
Meeting adjourned.
Documents
Present
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Masango, Ms B
Chairperson
DA
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Abrahams, Ms ALA
DA
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Gcwabasa, Rev NB
MK
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Hendricks, Mr MGE
Al Jama-ah
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James, Ms DE
Action SA
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Makgato, Ms MP
ANC
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Marais, Ms P
EFF
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Munyai, Mr TB
ANC
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Ramaila, Mr KS
ANC
-
Tafeni, Ms N
EFF
-
Tolashe, Ms N G
ANC
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