Cash Paymaster Services taken to court

Corruption Watch has taken the South African Social Security Agency (Sassa) and Cash Paymaster Services (CPS) to court to set aside a decision to pay CPS R317 million and force CPS to pay back the money.

Corruption Watch (CW) argued in the High Court in Pretoria that Sassa’s decision in 2012 to amend its contract with CPS about the cost of re-registering social grant beneficiaries, and Sassa CEO Virginia Peterson’s 2014 decision to pay CPS an additional R317 million, had been unlawful.

The amendment resulted in the cost of re-registration rising from the initially agreed all-inclusive cost of R16.44 per beneficiary to R23.20 per re-registration.

It asked the court to set aside both decisions and to order CPS to repay the sum to Sassa with interest.

Sassa initially vigorously defended its position, but withdrew its opposition early last year.

Sassa in 2012 enlisted CPS to distribute social welfare grants on its behalf, but the Constitutional Court in November 2013 set aside the award of the tender as unlawful.

CW’s advocate, Steven Budlender, argued that the variation agreement required authorisation from Sassa’s bid adjudication committee, which was not obtained, and then approved in 2014 after the services had already been rendered, made it unlawful.

CPS maintained there was nothing sinister about the variation as its initial price was based on re-registering over nine million adult beneficiaries, but did not make provision for re-registration of some 12 million children.

Budlender argued that Sassa had entered into the varied contract without any transparency. He said Sassa had initially paid 80% of the amount pending an audit, but paid the full amount after CPS “threw its toys out of the cot” and demanded full payment immediately.

Counsel for CPS Alfred Cockrell argued the second audit report was full of factual errors. He said Sassa was still determining if there was overpayment and would claim it back if there was.

Judge Moroa Tsoke reserved judgment.

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