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Sassa Tells Parliament It Plans New Contract Then Asks Concourt To Give CPS Another Year

Sassa Tells Parliament It Won't Ask Concourt To Extend Illegal Grants Contract -- While Officials File Papers Asking Concourt To Allow An Extra Year

28/02/2017 16:45 SAST | Updated 28/02/2017 17:51 SAST
Gallo Images / Daily Dispatch / Gary Horlor

The Social Security Agency of South Africa (Sassa) told Parliament it didn't have a plan but would probably set up a new contract with Cash Paymaster Services (CPS) to pay grants after March — while quietly filing papers at the Constitutional Court asking to be allowed to hire CPS for another year.

The Concourt had given Sassa about three years to sort out the illegal CPS contract for distributing social grants, but the agency is so unready that it is asking the court for another year's grace.

The social security agency approached the Concourt for an order "authorising Sassa to engage the respondent ('CPS') to provide services for the payment of social grants for the period 1 April 2017 to 30 March 2018", reported the Mail & Guardian, saying the papers were filed on Tuesday afternoon. The newspaper published a copy of the court papers on its website.

Sassa wants the Concourt to allow it to file a report by October on its readiness to take over paying the grants and when it will be able to do this.

Meanwhile the Black Sash has launched its own application against Sassa at the Concourt, the NGO said online on Tuesday.

The Centre for Applied Legal Studies (CALS), which is acting for the Black Sash in the matter, said the application was against the Minister of Social Development and Sassa, asking the court to compel them "to take necessary measures to ensure that the social grants system and its beneficiaries are protected" when the Sassa-CPS contract ends on March 31.

"It is the view of the Black Sash Trust that due to an urgency of Sassa's own making, Sassa has no choice but to negotiate a further uncompetitive contract with CPS. CPS is currently the only entity capable of distributing social grants to over 17 million South Africans," said CALS in a statement posted online.

Also on Tuesday, Sassa project leader Zodwa Mvulane told Parliament's Standing Committee on Public Accounts (Scopa) that the entity would not approach the Concourt for such an order, but would rather tell the Concourt that it would negotiate a new contract with CPS.

News24 reported that former forensic investigator and DA MP Timothy Brauteseth told Mvulane in the Scopa meeting that Sassa was "100 percent to blame" for the crisis, which has left the agency without a plan for how it will pay the an estimated 17.335 million social grants from April 1.

Sassa is in a mess because in 2014, the Concourt found that its existing contract with CPS was illegal due to a faulty tender process, although Sassa was given until March 31 this year to sort out an alternative, which the agency has failed to do. The Department of Social Development, under which Sassa falls, has been at odds with the National Treasury over how to move forward on this.

11,487,417 beneficiaries getting 17,143,635 grants and only 1,616,870 beneficiaries have bank accounts

The Concourt papers include an affidavit by Thokozani Magwaza, who was appointed Sassa CEO in November 2016.

He outlines briefly the steps Sassa took since 2014 to sort out the grants, and the failures of the various tenders.

Although Sassa and the Social Development Department have insisted that grants will continue to be paid, the court papers indicate that Sassa must have known for some time that it was running into difficulty.

Magwaza said there are currently 11,487,417 beneficiaries being paid a total of 17,143,635 grants. Of those beneficiaries, only 1,616,870 have bank accounts so paying through the banks isn't yet an option.

"In short, come 1 April 2017, if an agreement is not procured with CPS to continue rendering the services for a further year, the majority of our poor people will have hardship in receiving payment of social grants," said Magwaza in the papers.

Social Development Minister Bathabile Dlamini and Magwaza were not at the Scopa meeting in Parliament, reported News24.

Social Development has previously promised that grants will continue to be paid, without explaining how.