Social grants under threat with the department nearly broke

Social justice organisations fear that the poor could be worse off as the department of social development enters the danger zone of technical insolvency, and will likely to be unable to deliver services.

One worried organisation, the Pietermaritzburg Economic Justice and Dignity group, says that should the department be unable to meet its constitutional obligations – such as the payment of social grants – it would create mayhem and massive hardship for the poor.

The poor depend on social grants for food and other basic services, the body points out.

The precarious state of affairs at the department was revealed recently to the portfolio committee on social development by the office of the auditor-general (AG).

The AG said the situation may cause the department to be unable to pay its suppliers and, ultimately, cause a breakdown in service delivery.

The AG said the department’s current liabilities exceeded its current assets, a situation that could render it unable to deliver services.

Its fruitless and wasteful expenditure increased to R78 million with an amount of R2 billion in accumulated irregular expenditure.

This has to be recovered or written off.

Most of the fruitless, wasteful and irregular expending was by the South African Social Security Agency (Sassa), which is entrusted with paying 17 million state social grants to more than 10 million beneficiaries.

Social justice groups are sounding an urgent alarm, with the possibility of social grant payments being affected, saying the situation must be addressed timeously.

Pietermaritzburg Economic Justice and Dignity programme coordinator Mervyn Abrahams said although he had not seen the AG report, his organisation was worried about the situation.

“A significant proportion of South Africans totally depend on social grants. Therefore, if they are not paid out, it would make it impossible for the poor to survive.

“It will also impact on our economy because the poor spend those grants in our stores,” Abrahams said.

South African National Civic Organisation (Sanco) spokesperson Donovan Williams said it expected government to address the problems.

“As Sanco, we want to assist the government to ensure that social grants and social assistance do not suffer,” Williams said.

Usually, financially strapped government departments receive a bailout from National Treasury. Alternatively, the department could be placed under administration, or a budget adjustment made, or additional funds availed in the medium-term budget to be tabled in parliament by Finance Minister Tito Mboweni on October 30.

The committee heard that fruitless and wasteful expenditure increased from R2 million in 2017/18 to R78 million in 2018/19.

This was attributed to service delivery failures, rental damages and late cancellations.

The largest part of the R78 million could be attributed to Sassa paying contractor invoices for services that were never delivered. – ericn@citizen.co.za

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