Categories: South Africa

Sassa must explain more than R1bn in irregular expenditure

Sassa appears before Parliament today to explain irregular expenditure R1.4 billion, EWN has reported.

Disputed security contracts are at the centre of the latest evidence of growing irregular expenditure at Sassa over the past three financial years. The Auditor-General said Sassa did not take effective steps to prevent the irregular expenditure.

The amount includes millions spent by former social development minister Bathabile Dlamini on the appointment of so-called workstreams, which Treasury found to have been illegal.

The standing committee on public accounts (Scopa) will be probing fruitless and wasteful expenditure during the 2016/17 financial year. MPs are also expected to probe what steps Sassa is taking to ensure its tender for cash payments is above board after Treasury already advised that the first phase should be reviewed before an award is made.

While Dlamini, who presided over 2017’s Sassa social grants crisis, has been replaced by Susan Shabangu, Dlamini’s successor has already made some unpopular decisions only three months into the job.

Last month, Moneyweb‘s Ray Mahlaka reported that the suspension of the tender process by the South African Social Security Agency (Sassa) to find a new service provider that would be responsible for cash payments to 2.5 million elderly and disabled beneficiaries had raised fears of a sequel to the social grants crisis.

Sassa has five months to phase out and replace Cash Paymaster Services (CPS), whose contract to administer cash payments was extended in March for another six months by the Constitutional Court.

Although Net1’s subsidiary CPS is responsible for paying a portion of social grant beneficiaries (only 2.5 million out of the 10.7 million), the court was yet again forced to extend its invalid contract as Sassa failed to find another service provider. The remaining eight million beneficiaries access their social grants through Post Office outlets, bank ATMs or retail points.

The delays in replacing CPS are haunting Sassa again, which might place the livelihoods of grant beneficiaries in jeopardy.