MPs grill Social Development over grant payments

“If the same findings are coming through, how effective are these enforcement powers of the Auditor-General?”

By Marecia Damons

12 October 2023

Carol Dlamini and Jeannette Makhanya protest in October 2016 against deductions from social grants. About six years later there are still a number of problems related to the payments of grants. Archive photo: Nomfundo Xolo

The Department of Social Development’s (DSD) acting director-general Linton Mchunu has insisted that it has been paying social grant beneficiaries on time. Any delays, he says, have been at grant collection points.

But last month, a technical error at Postbank — which distributes grants on behalf of SASSA — meant thousands of beneficiaries who use a SASSA/Postbank gold card were unable to access their grants from ATMs and retail stores. This was the third payment problem that we are aware of that has disrupted social grant payments since November.

“What’s important to highlight is that we continue to pay the right grants to the right people at the right time, every single time. People think we have not paid grants … we pay grants. Money is released into the clients’ accounts timeously. The challenges occur when they have to collect the money,” Mchunu told MPs during a parliamentary briefing on Wednesday in which the Auditor-General presented the 2022/23 annual reports of the Department of Social Development (DSD) and SASSA.

Mchunu said that the amount paid for grants increased from R221-billion in 2021/22 to R239-billion in 2022/23.

But MPs on parliament’s portfolio committee on social development criticised the department and SASSA for not taking full responsibility for payment delays.

MP Bridget Masango (DA) said, “My understanding is that DSD and SASSA are the ones who pay the grants. Until the money is in the hands of the beneficiary, the department and SASSA are still responsible for that period.”

SASSA’s CEO Busisiwe Memela-Khambula acknowledged that the agency has had a number of public challenges including continuous loadshedding at branches, “persistent budget cuts” and Postbank’s technical glitches which have all hampered service.

She said the number of social grants paid increased from about 18.7-million in March 2022 to about 18.9-million in March 2023, at a cost of R202-billion. She added that an average of 8.5-million people are being paid the R350 SRD grant monthly which cost the state more than R30-billion in 2022/23.

“Overall, SASSA pays more than 27.3-million beneficiaries monthly. This implication is that about 45% of the population are dependent on these transfers,” said Memela-Khambula.

Irregularities at the department and SASSA

Senior Manager at the Auditor-General Faizel Jogee said they found several “deficiencies” relating to grant payments and administration at SASSA. These include payments made to ineligible applicants; under and overpayment of foster care grants; inadequate means tests conducted; inability to locate beneficiaries for physical verifications; and disability grant fraud incidents.

He said they uncovered that the payment of social assistance fees for services not rendered amounted to R74-million and that an overpayment of R316-million was made to a service provider assisting with the R350 grant applicants. They also found that the department was buying assets for prices higher than its market value.

Jogee said R39-million was irregularly spent in the 2022-23 financial year. The main contributors were SASSA with R20.8-million, DSD with R18.2-million, and National Development Agency with R330,000.

“At SASSA, R144-million was recovered in R350 grants paid to ineligible beneficiaries for the period May 2020 to March 2021,” said Jogee.

MP Liezl van der Merwe (IFP) noted that there was “inadequate oversight by the department on grant administration and payment, and slow response from management in addressing weaknesses and vacancies”. These issues were all raised in the previous audit report.

Van der Merwe asked, “Last year when we met with the auditor-general, it was a big concern that SASSA’s systems were inadequate. So they are still paying beneficiaries who were not eligible for the grant?”

MP Alexandra Abrahams (DA) echoed van der Merwe’s concerns. “It’s frustrating that these matters can’t be resolved. If the same findings are coming through, how effective are these enforcement powers of the Auditor-General?” Abrahams asked.

In response Jogee said that these repeat findings are of concern to the Auditor-General, “particularly in the grant payments area”.

Slow appeals process

Brenda Sibeko, the department’s deputy director-general said another challenge was processing grant appeals last year. She said they only concluded 57% of the appeals last year instead of their target of 70% within 90 days.

Sibeko said amendments to the Social Assistance Act were introduced to allow beneficiaries to appeal directly to the tribunal instead of through SASSA. “The impact of that was that the number of appeals that would have been dealt with by SASSA came directly to DSD. So we struggled to meet the 90-day turnaround time to respond to the appeals.

“It doesn’t mean that the appeals were not dealt with. The only challenge was that only 57% were done within 90 days. The rest were done outside of the 90-day period,” said Sibeko.