Sassa admits it knew in April 2016 it could not pay grants

2017-03-14 13:30
Sassa head office. (News24)

Sassa head office. (News24)

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Johannesburg - Sassa has admitted knowing as early as April 2016 that it would not meet its own deadline to take over the payments of grants.

However, it maintains that Social Development Minister Bathabile Dlamini only became aware six months later, in October.

This is contained in an affidavit filed to the Constitutional Court late on Monday night, six hours after the court's deadline for the agency and Dlamini to answer its questions.

Last Wednesday, the court issued a list of questions to the SA Social Security Agency (Sassa) and Dlamini.

Sassa project leader Zodwa Mvulane was aware by April 19 2016 that the agency could not pay the grants by end of March 2017, when the invalid contract with Cash Paymaster Services (CPS) ends, then acting Sassa CEO Wiseman Magasela says in an affidavit.


Sassa then sought advice from council on the implications of Sassa's inability to take over the payments.

This contradicts Sassa's earlier submission that officials only started to appreciate much later in 2016, in late August or early September, that they would not be able to take over the system.

Mvulane was entrusted with heading Sassa's "ambitious" project to roll out the payment system itself, after the Constitutional Court ruled in 2014 that the contract with CPS was unlawful and invalid.

In 2015, Sassa submitted a progress report to the court that it would take over the payments to more than 17 million beneficiaries.

Magasela is the deputy director-general in the department of social development. He was acting Sassa CEO between March 8 and 12. Efforts to provide the court with answers were made during his brief tenure.

He acted in the position after current CEO Thokozani Magwaza went on sick leave.

News24 understands Magwaza refused to sign the affidavit submitted on Monday night.

In his affidavit, Magasela suggests the crisis in the project was partly because of the many changes in Sassa's leadership after the court's 2014 ruling.

Leadership changes

Sassa CEO Virginia Petersen's term ended on May 14, 2016. Raphaahle Ramokgopa acted in the position until October 31 that year. Then Magwaza, who was the director-general in the department, was permanently appointed in November.

The court wanted to know why it was not immediately informed of the change of plan.

Magasela says in his affidavit that Sassa accepts responsibility for not informing the court, but it does not assign blame to any particular individual.

He accepts that the court ought to have been informed much earlier that the agency could not meet its deadline.

The department only filed a progress report with the Constitutional Court on March 3, five months after advocate Wim Trengove, SC, advised it to make a full disclosure to the court of its change of plan.

"It (Sassa) is no longer under any formal duty to do so, but in our view its radical departure from the plan placed before the courts by its report of 5 November 2015 requires that Sassa disclose to the Constitutional Court that it proposes to enter into a further agreement with CPS," Trengove wrote in a legal opinion in October.

Sassa admits the only way to ensure no interruption of grant payments is for CPS to continue with its agreement. It will need approval from Dlamini and Treasury.

Sassa's negotiations with CPS earlier this month had to be terminated when an inter-ministerial task team rejected its interim agreement with the company.

On Tuesday morning, Finance Minister Pravin Gordhan told Parliament's standing committee on public accounts that the department was working on the matter.

Sassa submitted to the court that the Public Protector and Auditor General could oversee the terms of an interim contract with CPS and its implementation.

Read more on:    sassa  |  pravin gordhan  |  bathabile dlamini  |  thokozani magwaza  |  social grants

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