Disqualifying Post Office from disbursing welfare grants unfair, MPs hear

Minister in the Presidency Jeff Radebe has taken over from President Jacob Zuma as chairman of the interministerial committee on comprehensive social security, which is dealing with delay in appointing new service provider. Photo: Chantall Presence / ANA

Minister in the Presidency Jeff Radebe has taken over from President Jacob Zuma as chairman of the interministerial committee on comprehensive social security, which is dealing with delay in appointing new service provider. Photo: Chantall Presence / ANA

Published Nov 8, 2017


Parlaiment - Minister in the Presidency Jeff Radebe on Wednesday assured MPs that they are fast-tracking the process of the SA Post Office (Sapo) taking over the payment of social grants, but a letter from Treasury coming down hard on the South African Social Security Industry (Sassa) says otherwise.

The letter, signed by National Treasury director-general Dondo Mogajane and addressed to Sassa acting chief executive Pearl Bhengu, was circulated among MPs sitting on Parliament's standing committee on public accounts and its portfolio committee on social develoment.

The letter spells out various irregularities by Sassa's bid evaluation committee (BEC) and its bid adjudication committee (BAC) which found that the Sapo only met three of the four requirements needed to take over the payment of grants from private company Cash Paymaster Services (CPS) come April 1 next year.

"The BEC members should not have recommended the disqualification of Sapo in three areas (card-body and distribution, banking services and provision of cash payment services)," was the conclusion reached by Treasury, according to the letter.

"The specification developed by Sassa was biased."

In addition, Treasury's review found that the BEC did not ensure "scoring was fair, consistent and correctly calculated and applied".

Sassa also did not adequately take into account a report by the Council for Scientific and Industrial Research (CSIR) which found the post office met 208 of the 218 requirements needed to pay grants, according to treasury.

"The CSIR report was not used for its intended purpose. Sassa took more than 60 days to evaluate and adjudicate one proposal."

The letter also states that both Sassa and Sapo would not be in a position to take over the payment of grants on April 1, 2018.

A resolution was reached that Sapo, Sassa, the South African Reserve Bank and National Treasury meet this coming Friday with the Banking Association of South Africa and Payment Association of South Africa to look at an interim solution.

Treasury favours a hybrid model - meaning that in addition to the Post Bank paying grants, commercial banks could be roped in.

Radebe told MPs that he was appointed two days ago as the chairman of an interministerial committee (IMC) on social security by President Jacob Zuma, who previously held the position. The IMC, said Radebe, was confident it could speed up the process as per a Constitutional Court ruling in 2013 which found the Sassa contract with CPS unlawful and invalid.

The use of CPS was meant to be phased out this year, but the Constitutional Court reluctantly agreed to approve an extension of the contract as Sassa had failed to bring on board a new service provider.

The IMC met on Tuesday to break the deadlock between Sassa and Sapo.

"The IMC is of the view that government will move with the necessary speed to resolve all outstanding issues related to this matter," Radebe told MPs.

"The IMC has thus taken a decision to fast-track the introduction of an integrated payment system which will be provided by government through a partnership between Sassa and Sapo."

Radebe said a partnership between Sassa, Sapo, Home Affairs and the State Security Agency will be forged. In addition, a dedicated team has been tasked to come up with a strengthened project plan by next week Friday. 

"The project plan will outline the detialed plan for execution, resource requirements, critical milestones and a communication strategy," he said.

"The mandate of the dedicated team will be to ensure the finalisation of the cooperation agreements between Sassa and Sapo, the governance and contracting framework, risk assessment and mitigation, monitoring and evaluation."

While MPs welcomed progress by the IMC, some expressed concern that the National Treasury letter to Bhengu proves that they were lied to by Sassa.

"What they've been saying is misleading. Lying to Parliament and misleading Parliament is an offence," said Tim Brauteseth, an MP for South Africa's biggest opposition party, the Democratic Alliance.

Economic Freedom Fighters MP Ntombovuyo Mente said she won't drop her demands to find out who lied to the committee and who caused the delay which could threaten millions of poor South Africans who receive social grants.

Inkatha Freedom Party MP Mkhuleko Hlengwa was not impressed with Radebe, saying the IMC contributed in the "collapse".

"The IMC was long there and whilst they were there we were being lied to A to Z."

MP for the ruling party, the African National Congress, Ezekiel Kekana, was also in favour of investigating who misled the standing committee.

All parties are expected back in Parliament on November 21 to report back to MPs on progress.

African News Agency

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