The independent panel report on the social grants matter headed by the office of the Auditor General, says the South African Social Security Agency‘s (Sassa‘s) plan to migrate cash beneficiaries away from Cash Paymaster Services (CPS) is not yet clear.
The panel – set up by order of the Constitutional Court last year, following the initial extension of the CPS contract – filed its most recent report to the court two weeks ago.
In it, it acknowledged Social Development Minister Susan Shabangu‘s decision to suspend the tender process to find a replacement for CPS to deliver 2.8 million cash grants. This amounts to just under 30% of the entire scheme.
Shabangu cited challenges in the bid specifications as the reason for her decision. She argued that was the same reason the initial CPS contract was taken to court in the first place and annulled.
“The panel met with Shabangu to understand her decision to suspend the tender… and found her reasons to be motivated, rational and appropriate,” the panel‘s report read.
However, thereafter the plans seemed a little less convincing.
Both the minister and Sassa were considering various options for the distribution of social grants to beneficiaries, who ordinarily received their social grants at cash paypoints.
It includes a cash payment migration strategy which envisages the transfer of most cash beneficiaries to the South African Post Office (SAPO), resulting in the reduction of cash beneficiaries to approximately 800 000.
“Sassa‘s plans in this regard are not clear. This is a concern for the panel, as detailed plans are necessary to ensure that there is a sustainable and effective plan in respect of these cash beneficiaries before September 2018.
“The panel raised this concern with Sassa and requested a detailed plan on how to implement this strategy and report such plan to the court and the panel.”
Sassa has until September 30 this year to find an alternative plan for those remaining beneficiaries who require cash, and to end the relationship with CPS.
SAPO to take on 1.9 million cash beneficiaries?
According to the panel, Sassa intends to migrate one million beneficiaries who will be paid by SAPO merchants or agents, and 890 000 beneficiaries who will be paid at over-the-counter services at the Post Office.
“The migration strategy envisages an increase in the scope of SAPO‘s services.
“As a result, new services agreements and/or addenda to the service agreement must be concluded without any undue delay to ensure effective payments of social grants to qualifying beneficiaries.”
This would allow Sassa to hold SAPO accountable in this area as well.
“The panel welcomes these developments but is concerned that detailed arrangements for the remaining cash paypoints seem to be vague at this stage.”
In the absence of specific arrangements, due to be filed later this month, the panel recommended that those 800 000 beneficiaries requiring cash by the end of the perceived plan, not be neglected by Sassa.
Tender cancelled, technical committee set up
Meanwhile, Shabangu has cancelled the tender process to find a replacement for CPS altogether, court papers showed last week.
Instead, she has set up a “technical committee” to explore and recommend alternatives to the cash payment of social grants.
The five members on the technical committee include former minister Dipuo Peters, former department directors general Vusi Madonsela and Selwyn Jehoma, former Post Bank managing director Totsie Memela, and Sipho Shezi, former special adviser to the former minister of social development, Bathabile Dlamini.
“An update on the technical committee will be included in my report that is due at the end of May 2018,” Shabangu concluded in her court papers.
“I am mindful of the 30 September 2018 deadline and I have every intention to ensure compliance thereof.
“I further remain committed to ensuring that Sassa realises its objective to ensure the uninterrupted payment of social grants to beneficiaries.”
Meanwhile, CPS itself has lobbied the Constitutional Court to intervene in its negotiations with National Treasury regarding the remainder of its contract with Sassa.
CPS claimed in court papers last week that it was yet to be paid by Sassa since the contract was extended from April 1.