Social Development Minister Bathabile Dlamini and the South African Social Security Agency (Sassa) have accepted responsibility for failing to put systems in place to ensure the agency would be ready to take over payment distribution to 17-million social grant beneficiaries from April 1.
This was revealed in Sassa's follow up report to the Constitutional Court, which was filed on Thursday and received by the court on Friday.
Sassa, Social Development and Cash Paymaster Services came to an agreement over a payment plan on Friday.
The agreement was reached after three days of "intense" negotiation between all three parties, department spokesperson Lumka Oliphant said on Friday night.
Further details about the nature of the agreement would be revealed by Social Development Minister Bathabile Dlamini in due course, Oliphant said.
"The minister and Sassa accept responsibility for Sassa's inability to deliver the system deliverables set out in the progress report," the papers read.
The report serves to update the court on what both Sassa and the Department of Social Development have done since they filed their first progress report to the court on November 5, 2015, when they assured the court that they would take over the payment of social grants by March 2017.
In its latest report Sassa told the court that at the time, its officials believed that the plan disclosed to the court was ambitious but that they could implement it.
"The minister and Sassa have since been advised that the plan was overly optimistic, unrealistic and underpinned by insufficient research," the report reads.
Budget constraints, no skilled staff
The agency had received this advice from its technical advisors between August and October 2016, it said.
Both Sassa and Dlamini accepted responsibility for the delays in identifying and redressing the deficiencies in their plan.
The agency said it was not ready to move forward due to budget constraints, insufficient internal capacity and a lack of skilled personnel to implement the plan in the time frame it had contemplated.
Until it was ready to move ahead with the plan, Sassa was advised by the technical advisors in September 2016 to extend its contract with Cash Paymaster Services (CPS) for at least another two to three years, while Sassa transitioned into its new role.
"The minister and Sassa have evaluated each of the options and the associated risks and have concluded that an interim arrangement with CPS is the option with the least risk to ensure the uninterrupted payment of social grants after 31 March 2017, at least at this point," the report reads.
Following the advice, Sassa said it took steps to apply to the Constitutional Court to authorise it to engage CPS about providing services to the agency from April 1, 2017, to March 31, 2018.
Formal discussions delayed
The agency also wanted the court to resume its supervisory jurisdiction over the matter by receiving a further report by no later than 1 October 2017.
However, Dlamini decided against this, the report states. She had been advised that the court could not authorise an extension on any interim agreement with CPS as this would be a new contract.
"The difference of opinions and delays in resolving different views have in turn delayed forging and implementing a clear path since October 2016 when Sassa received legal advice about the above," the report further reads.
This was part of the reason why formal negotiations with CPS were delayed, it says.
"Until recently, there have been only informal discussions between Sassa and CPS, and CPS had advised that it is willing to assist Sassa."
According to the report, negotiations officially began on Wednesday, March 1.
No common ground
Another reason for the delay was the decision by Treasury not to approve Sassa's request last month to deviate from the normal competitive bidding process.
"The letter requested Treasury's support for an extension of the existing contract with CPS to enable a negotiation to appoint CPS for a period of 12 to 18 months after 1 April 2017.
"Treasury did not accept Sassa's explanation for its position, and expressed concern about the perpetuation of unlawfulness and constitutionality in the face of the Constitutional Court's decisions," the report said.
National Treasury told Sassa it would not support the extension of the CPS contract unless the Constitutional Court further extended the suspension of its invalidity beyond March 31, 2017.
"It is also advised that Sassa should have requested a deviation to advertise a new tender for a short period in December 2016 or early January 2017 to avoid a self-created emergency," the report reads.
In recent weeks, Dlamini and Finance Minister Pravin Gordhan have had a number of discussions about the matter, but have not found common ground, the report says.
"The ministers have different views about how to proceed."
However, according to the report, Dlamini is taking into account Gordhan's views and the fact that it may be appropriate for Treasury's view to be an alternative route should it not be possible to reach an interim arrangement with CPS on reasonable terms and for a sufficiently limited period.
Dlamini intended to continue to work co-operatively with Gordhan and Treasury to ensure that the payment of social grants is uninterrupted and legalised as soon as possible, the report reads. -- News24Suggest a correction