Sassa’s time is running out

2017-11-05 06:00

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Agency keeps missing deadlines as it fails to decide who will disburse social welfare grants to millions in SA.

Almost two months ago, a panel of experts warned that the South Africa Social Security Agency (Sassa) would not meet its deadlines because it did not have the skills and experience to successfully transfer the payment of social grants to a new system by April next year.

The panel was convened in June to evaluate the implementation of the payment of social grants, including evaluating the steps envisaged and taken by Sassa to appoint a new contractor to pay the grants.

The panel, which is chaired by Auditor-General Kimi Makwetu and has former South African Reserve Bank governor Gill Marcus as one of its members, also noted that several of the deadlines set out in Sassa’s first report to the court have not been met.

Sassa’s timelines could probably only be achieved by compromising on the quality of work required to realise the project milestones, the panel added.

Things came to a head this week as Sassa and the South African Post Office failed to decide whether the latter was capable of disbursing the grants to millions of South Africans from April 1, which is when the illegal contract with Cash Paymaster Services (CPS) comes to an end.

MPs roped in Treasury to facilitate the resolution of the deadlock between the two state entities. However, when that failed, it was decided that it should review the process leading to the impasse and will report back to a joint meeting of Parliament’s public accounts committee and the social development oversight committee on Tuesday or Wednesday.

But a report submitted to the Constitutional Court by a panel of experts appointed by the court as part of the Black Sash Trust versus the social development minister case raised red flags about Sassa’s willingness and ability to execute a seamless transition to a new system.

“There is virtually no likelihood of Sassa appointing service provider(s) in time to allow the issuance of new Sassa cards and implementation of a new beneficiary enrolment system and cash distribution pay points by April 1 2018,” the report said.

In the report, dated September 12, the experts complain bitterly about Sassa’s repeated failure to provide the panel with timeous access to information such as feasibility studies, business plans and strategy documents, which severely restricted its ability to adequately perform its functions.

Decision to deviate from competitive processes

Sassa’s decision to deviate from competitive processes is also a cause for concern, with the experts saying the request that the SA Post Office be the only entity to submit a bid for the rendering of services for the payment of social grants increased the risk of not ensuring a seamless transition to a new system.

The panel’s technology, logistics, payments and security task group observed that Sassa’s plans lacked technical detail, so it was difficult to determine whether or not what Sassa proposed was technically feasible, and whether the plans could be implemented in time.

On Wednesday, Treasury’s director-general Dondo Mogajane revealed to shocked MPs that the technical teams of Sassa and the Post Office had not met. These, he explained, were the people who understood banking and who understood grants distribution. With less than five months to go before a new service provider must replace CPS, it remains unclear who will be distributing the welfare grants to 17 million beneficiaries.

MPs seem keen to force a marriage between Sassa and the Post Office, but Sassa and its political head, Social Development Minister Bathabile Dlamini, do not seem interested in this.

In fact, Dlamini recently announced that the Post Office was not capable of carrying out the disbursement of grants as its capacity was too limited. Of the four services – provision of an integrated payment system, banking services, card body production and provision of cash payment services – that Sassa required, the Post Office could only provide the integrated payment system,
Dlamini said.

The Post Office disagreed. Its chief executive, Mark Barnes, told MPs it could produce and deliver banking cards, and that, as far as cash payments at pay points go, it could provide coverage that is greater than or equal to anybody else’s.

“We have got 2 500 points of presentation, which no one else has, and whatever your distribution capability is, we can enhance that by that many points of payment,” he told a meeting of parliamentary committees on Tuesday.

Treasury allowed Sassa to deviate from normal procurement processes in July so that the agency could engage the services of the Post Office.

Barnes also made a case to keep this service within the state rather than outsourcing it to the private sector.

“We would argue for creating an asset in the state. The entire value chain between organs of state can be properly monitored and managed jointly with the SA Post Office and Sassa during the build, operate and transfer period, while it will be easy to transfer skills and functionality back to Sassa.”

The Post Office referenced a due diligence report by the Council for Scientific and Industrial Research (CSIR), which, according to Barnes, gave it a 97% pass rate on the readiness to take over grant distribution. Sassa contracted the CSIR in September to undertake an inquiry into the capacity of the Post Office to pay the grants.

The report gives a detailed breakdown of Sassa’s requirements from a service provider, and the Post Office meets all but eight of the more than 200 requirements.

While Sassa wants the bidder to ensure that all payment equipment operates even in places where there is no electricity or communication infrastructure, the Post Office only addressed the communication aspect in its response and said nothing about the power requirements.

Another Post Office shortfall is that it could not produce a minimum of 4.2 million cards a year, promising only 10 000 a day, which totals 3.2 million cards in a year on an average of 26 days a month. The CSIR report states, however, that the Post Office indicated that the numbers provided were as per its current contract.

“Should it get awarded the contract, it would be able to scale up capacity to provide the required number by bringing other manufacturers on board,” the report said.

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Read more on:    sassa  |  sapo  |  bathabile dlamini

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