Picture: David Ritchie/ANA Pictures

Johannesburg - The Organisation Undoing Tax Abuse (Outa) wants two irregular South African Social Security Agency (Sassa) contracts on which at least R221 million has been spent to be cancelled and the money reclaimed.

Outa was provided with information on the deals by whistleblowers and has now sent a report on the problems and a call for action to the Department of Social Development, its agency Sassa and Parliament.

“Sassa has become less an organ of state and more a crime syndicate,” says Outa in the report.

“Even amongst South Africa’s notorious maladministered state-owned entities, the scale and brazenness of Sassa’s misconduct casts a shadow all its own.”

According to Outa, Sassa signed the irregular contracts with Azande Consulting CC, an events management business which has also worked with the Presidency.

“Outa strongly recommends that the various bodies who receive this report act to cancel these tenders, reclaim the hundreds of millions spent and hold the individuals responsible accountable for their misconduct,” says Dominique Msibi, Outa’s Portfolio Director for Special Projects, who oversaw the report.

She says the activities indicate that Azande and Sassa officials breached the Constitution, the Companies Act, the Public Finance Management Act and the Preferential Procurement Policy Framework Act.

Both contracts are for three years in all nine provinces.

The affected contracts are:

a) Sassa 42/15/GA: Mikondzo event management services, run through outreach programmes. This was only a request for proposals for accreditation of service providers, but was awarded in July 2016 to Azande and another contractor, in a way which appears to have been designed to circumvent procurement procedures. Costs for this project are not clear.

b) Sassa: 40/15/BT: An “Action Research Project” run as part of Sassa’s integrated community outreach programme (ICORP). Azande was the only one of 23 bidders not disqualified, with scoring which appears problematic. The final price agreed with Azande was R393 million, including VAT, and the contract was signed in July 2016.

Both contracts involved running community surveys.

Both were approved by Sassa’s acting CEO at the time, Raphaahle Ramokgopa.

Sassa is believed to have spent at least R221 million on these contracts so far and the contracts are only a year into the three-year deal.

“Both tenders were granted without following due process and were for services which could have either been performed in house or were entirely unnecessary. Azande was simply not capable of providing the services in terms of the tenders and either failed to provide proof that they had performed the service or falsely misrepresented that they had performed the service,” says Outa’s report.

Msibi sent the report on the contracts and a request for action to:

The Minister of Social Development, Bathabile Dlamini;
The acting Director General of Social Development, Nelisiwe Vilakazi;
The acting CEO of Sassa, Pearl Bhengu;
The Chief Procurement Office at the National Treasury;
The Standing Committee on Public Accounts (Scopa);
The Portfolio Committee on Social Development; and
The Black Sash.