PARLIAMENT, February 15 (ANA) – Parliament’s portfolio committee on social development has cancelled another meeting on resolving the crisis in the welfare grant payment system which sees government with no firm plan for paying beneficiaries from April 1.
A notice sent out on Monday night to MPs to cancel the meeting scheduled for Wednesday morning appeared to seek to lay the blame at the door of National Treasury, saying it would not go ahead as the ministry had indicated it could not attend.
However, the letter sent to the committee by Finance Minister Pravin Gordhan to tender National Treasury’s apology made plain that the payment of grants was not the responsibility of his department.
“Payments of social grants does not fall within the mandate of the National Treasury,” Gordhan said.
“This is the statutory responsibility of my colleague, Minister Bathabile Dlamini. Therefore the South African Social Security Agency (Sassa), the Department of Social Development (DSD) and the relevant Executive Authority have the responsibility to account to the committee on this matter.
He added that National Treasury would nonetheless advise and support the department and Sassa to ensure that the payment of grants was managed within “the correct legal and financial framework”.
Insiders and the opposition said the meeting should have gone ahead as Gordhan was correct in noting that the finance ministry’s role in resolving the problem was purely an advisory one, and said pay responsibility lay with the department and Sassa.
“For us it would have been of no consequence that Treasury could not be there, the meeting should have gone ahead because at the end of the day, the responsibility is that of the department and Sassa,” said Democratic Alliance spokeswoman Bridget Masango.
“But the minister and Sassa have been unable to do anything for the past three years,” she added.
The two entities were due to file an application to the Constitutional Court on Wednesday morning to suspend the invalidity of its current contract with Cash Paymaster Services (CPS) to distribute grants.
However, there initially appeared to have been a change of heart, followed later by indications that Sassa would go ahead with the application in the afternoon.
Sassa indicated that it would take this route at a briefing to the portfolio committee two weeks ago where Raphaahle Ramokgopa, the agency’s executive manager for strategy and businesss development, conceded that it had failed at resolving the impasse on grant payments.
Ramokgopa told MPs that Sassa had considered six options – option one being that the CPS contract be extended. However National Treasury deems this to be potential irregular expenditure since the Constitutional Court ruled in 2013 that the contract was illegal and invalid.
The other options included procuring the services of banks or the South African Post Office. But banks had indicated they needed at least six months to prepare for paying out grants, meaning grant beneficiaries would not get paid on April 1.
The option of using the post office was also ruled out since they did not have branches in deep rural areas.
The DA has asked President Jacob Zuma to issue a proclamation giving Gordhan the lead role in the contractual negotiations with CPS and the appointment of a new service provider, terming Dlamini’s handling of the matter “negligent”.
It also took aim at her in January when a meeting of the portfolio committee was cancelled because she was due to attend an ANC National Executive Committee lekgotla.
Dlamini’s spokeswoman Lumka Oliphant could not immediately be reached for comment on the meeting or the Constitutional Court application.
National Treasury has favoured awarding the tender to pay grants to a new service provider to distribute grants to cash beneficiaries, while beneficiaries with bank accounts would have the money deposited into their accounts.
But Ramokgopa is on record as saying this option could cause “panic among beneficiaries” and that it would take a new service provider time to set up the infrastructure for cash payments, meaning they would miss the April 1 deadline when the contract with CPS ends.
Sassa therefore indicated it would approach the Constitutional Court to “suspend the invalidity” of the CPS contract.
However, Ramokgopa acknowledged that if Sassa and the department got the go ahead from the court, “any expenditure incurred would be irregular” and essentially illegal. She said they would therefore approach the chief procurement officer for permission to deviate from normal supply-chain management processes.
In addition, they would appoint a negotiating team to approach CPS to discuss the extension of their contract for one year, but with “favourable conditions”.
CPS is a subsidiary of American company Net1, which has been accused of being responsible for illegal deductions from the grants of beneficiaries.
– African News Agency (ANA)
