SA Social Security Agency Progress: briefing

Meeting report

SOCIAL DEVELOPMENT PORTFOLIO COMMITTEE
22 June 2005
SA SOCIAL SECURITY AGENCY PROGRESS: BRIEFING

Chairperson: Ms T Tshivhase (ANC)

Documents handed out:
SASSA Progress Report
Parliament Research Document
Committee Draft Programme
Thematic Areas: Poverty and Underdevelopment

SUMMARY
The South African Social Security Agency (SASSA) briefed Members on the intentions and reasons behind the envisaged social agency and its various challenges. Recent developments were outlined and the implementation process elucidated. An update was provided on the fraud investigation. Members raised questions about the status of current provincial structures, proposed reporting systems, the maintenance of capacity within the Department, possible methods of payment, security vetting of potential employees, progress with the fraud investigation, and their monitoring methodology.

MINUTES

Social Security Agency briefing
Mr Makiwane (Chief Executive Officer) provided background information on the agency establishment. It had been created to address weaknesses in the social grant system such as fragmentation of institutions, inefficiencies, high transaction costs, and fraud and corruption. The establishment process was comprised of the initial setup stage, transition and full operation. The Department would create awareness of the new agency among beneficiaries.

The Agency aimed to reduce financial pressure on provincial governments, eradicate fraud and remove provincial divisions. The agency’s regional structure and service delivery plan were explained. An executive team would be appointed and performance agreements signed. Members should pursue the finalisation of regulations to contribute to the entrenchment of the agency. An Inspectorate would monitor its activities and facilitate improved service delivery. The number of current beneficiaries had increased dramatically from 2 million in 1997 to 9.7 million to date. Disability grants were under review and a new definition of disability would be produced.

Information management would be enhanced to promote integrity and remove fraud. Approximately R60 million of unclaimed benefits were sitting in bank accounts in the Eastern Cape and a strategy would be devised to return the money to government. No indemnity would be granted to current civil servants implicated in the social grant fraud scam. Amendments to the Social Assistance Act would be finalised and regulations would be drawn up governing the legislation. The Act formed an important component of government's social programme and the agency would strive to alleviate the plight of the poor in a well-managed and effective manner.

Discussion
Ms I Direko (ANC) asked whether provincial structures and third party arrangements would continue or whether new structures would be set up to deliver the services. Certain service providers had contracts with provincial governments that had to be honoured.

Adv M Masutha (ANC) stated that key reporting procedures had to be identified and established in order to ensure proper compliance with legislative stipulations. Social assistance programmes contained high risk and monitoring was imperative to maintain integrity. Further detail was required on the establishment plan including the composition of the management team at the middle-management level. The transfer of staff and other resources from the provincial structures to the new agency offices would result in weakened capacity at the provincial level.

He asked how sufficient levels of capacity within provincial government components could be ensured. The Department would have to monitor the agency and hold it accountable. Accountability should be enforced from day one and standards maintained. The responsibility for service delivery would have to be clearly assigned and spending patterns monitored. The provincial governments would continue to be involved for some time in delivery and co-ordination had to be attained.

Ms H Weber (DA) asked whether social grant payments would be made into Postnet accounts where beneficiaries could only access funds after three months.

Mr M Waters (DA) asked whether a vetting process was in place to check staff transferred from provincial structures to the agency. The agency database should be compared on a regular basis with Home Affairs to prevent anomalies such as continued payment into deceased accounts. He asked how often this exercise was conducted. Clarity was sought on the numbers of municipal workers and elected public officials included within the total number of fraudulent public servants.

Mr Makiwane responded that the agency intended to address fragmentation of participating institutions and create alignment in delivery to achieve economies of scale. Different transaction costs within provinces had to be ameliorated. A critical area remained contact points between officials and recipients, and weaknesses would be addressed through an enhanced service delivery model. Trained social workers would be placed at contact points. One national administrative system would be imposed with upgraded Information Technology and sound management. The timeframe from initial application through to final payment would be reduced. The service delivery plan and business model would be soon presented to Members.

Administration and payment processes would be refined over time and certain existing contractual arrangements would be continued. Outsourced facilities could be arranged if required. A new payment mechanism, such as Postnet, would have to be presented to Parliament for approval and would have to be acceptable to the beneficiaries. The Minister of Social Development had held discussions with private sector banks last week around new payment methods. Bank leaders had made a commitment to research a new product aligned to social assistance.

Members’ comments on Department capacity would be directed to the Director-General. The Inspectorate would have to be capable to ensure implementation and correct reporting mechanisms. A Memorandum of Understanding was in place in accordance with the Social Assistance Act governing the role of the Minister, provincial MECs and other stakeholders. The agency had presented the memorandum to the provinces and corporate governance issues had been stressed. A monitoring plan would identify anomalies at the local level and promote financial management and service delivery. The agency would forward reports to the Department on a monthly basis. Security vetting was in place to screen potential agency employees and honesty and competency would be prime requirements. A skills audit would be conducted to identify training needs and promote development within the agency. A comparison of information databases was currently conducted monthly but some discrepancies remained and money could be lost. The intention was to reduce the inefficiencies and prevent fraud and financial wastage. The Special Investigating Unit would complete the fraud investigation within the Department in the near future. The agency would not support a scenario where beneficiaries had to wait three months to access funds from a Postnet account.

Ms C Dudley (ACDP) sought clarity on the numbers of civil servants implicated in the fraud investigation that would not be prosecuted due to a minimum salary threshhold.

Mr Makiwane declared that a means test of R1 400 per month was applied to present and former government employees. Those earning below that could legally qualify for a grant. Not all of the 160 000 staff under investigation were fraudulent, and a thorough investigation would be conducted. About 41 000 civil servants earning more than the thresh-hold that had been identified for prosecution.

Ms L Petersen (Department Parliamentary Officer) stated that the Social Services Select Committee had decided last week to reconsider the means test. A briefing and debate would occur in August. She recommended that both committees attend the planned briefing to acquire information and discuss solutions to address variable interpretations. Members would be informed of developments.

Members then discussed the Committee programme for the third term including scheduled provincial visits, public hearings for the Older Persons Bill and a Departmental briefing on the Children's Bill planned for 16 September 2005. A further briefing on the SASSA by the Department would be arranged.

Mr Jawardien (Parliamentary Researcher) presented a background report on the upcoming Freedom Charter celebrations to be held in Kliptown. The intentions of the Charter were explained and key focus points identified. The empowerment of people was paramount including employment creation and social security. The skills mismatch in society had to be addressed through skills development. Challenges to social advancement were outlined and political economy issues within South Africa discussed. Economic growth that created employment and reduced poverty had to be pursued. The education system should generate the necessary skills and contribute to Black Economic Empowerment and entrepreneurial activity. A cycle of dependency should not be the outcome of intervention. Infrastructure should be developed to attract vital foreign investment. Service delivery within all three spheres of government had to be improved and available resources be spent in a managed way.

The meeting was adjourned.