{"id":4792,"date":"2017-03-17T00:00:00","date_gmt":"2017-03-17T00:00:00","guid":{"rendered":"https:\/\/amabhungane.org\/amabhungane\/stories\/social-grants-payment-crisis-everything-you-need-to-know-but-were-afraid-to-ask\/"},"modified":"2024-09-23T11:25:33","modified_gmt":"2024-09-23T11:25:33","slug":"social-grants-payment-crisis-everything-you-need-to-know-but-were-afraid-to-ask","status":"publish","type":"post","link":"https:\/\/further.co.za\/amabwp\/social-grants-payment-crisis-everything-you-need-to-know-but-were-afraid-to-ask\/","title":{"rendered":"Social grants payment crisis \u2013 everything you need to know but were afraid to ask"},"content":{"rendered":"<p><em>If you have been living on the Moon for the past few weeks or if you feel overwhelmed by the numerous reports on the social grants crisis, read this to understand how we got to this point where millions of grant recipients are wondering whether they will receive a grant payment on April 1.<\/em><\/p>\n<h5>Why hasn\u2019t Sassa got its act together?<\/h5>\n<p>The very short answer: greed and power struggles.<\/p>\n<p>The short answer: Minister Bathabile Dlamini wants to build a nuclear power station \u2013 a Rolls-Royce solution \u2013 while government struggles to keep simple home fires burning. Why? <em>Because tenders.<\/em><\/p>\n<h5>The long answer, part 1: The unattainable tender<\/h5>\n<p>When the Constitutional Court ruled the Cash Paymaster Services (CPS) contract invalid, it ordered the South African Social Security Agency (Sassa), in April 2014, to run a new tender.<\/p>\n<p>Sassa did so, but now tells the court there were no \u201ccompliant\u201d bids.<\/p>\n<p>Bathabile Dlamini\u2019s henchwoman Zodwa Mvulane told MPs that Sassa could not have foreseen that they would receive no valid bids, suggesting this part of the delay was not their fault.<\/p>\n<p>Actually, it <em>was<\/em> foreseeable.<\/p>\n<p>CPS agreed to perform the payout service at a price of R16.44 per payment for a five year contract in 2012.<\/p>\n<p>For the 2015 tender, Sassa set a ceiling price of R14.50 \u2013 an 11.8% decrease \u2013 despite three years of inflation.<\/p>\n<p>Sassa has never officially explained this \u2013 and Corruption Watch has suggested the tender was engineered to fail.<\/p>\n<p>Significantly, neither of the first-round heavyweights, CPS and Allpay, opted to bid.<\/p>\n<p>Only three bids were received. One of the key requirements of the tender was that the contractor use biometric verification of beneficiaries, and this eliminated two of the bidders (not for the first time, as we shall see).<\/p>\n<p>The third, Standard Bank, submitted a bid above the ceiling price and was also excluded.<\/p>\n<p>In October 2015, Sassa informed the court that it had opted to go it alone and take over the payment function by the time CPS\u2019s contract came to an end on March 31, 2017.<\/p>\n<p>So, even if they had previously been relying on the tender to go through, they had 17 months. But Sassa still didn\u2019t get it together.<\/p>\n<ul>\n<li><strong>AmaBhungane has been raising a red flag over the social grants tender for years. <a href=\"http:\/\/amabhungane.co.za\/article\/2016-12-14-over-10-million-south-africans-rely-on-social-grants\" target=\"_blank\" rel=\"noopener\">Read our investigations on Sassa<\/a>.<\/strong><\/li>\n<\/ul>\n<p><strong>The long answer, part 2: Work streams.<\/strong> (Or some people cash in, selling Dlamini a plan for \u201cRadical Economic Transformation\u201d, which will take, oh, maybe another five years.)<\/p>\n<p>The minister has told the court and everyone else that she only really became aware in October 2016 that Sassa would not be able to implement a take-over from CPS by the end of March 2017.<\/p>\n<p>That seems unlikely.<\/p>\n<p>Sassa has recently admitted to the court that its officials knew in April 2016 that they would not achieve the deadline.<\/p>\n<p>We now know that in May 2016, CPS addressed correspondence to Sassa expressing its concern over the short time period remaining for a phase-in\/phase out strategy, and proposing alternative solutions to Sassa.<\/p>\n<p>We also know now that in May 2016, officials from Sassa consulted with legal council about the commitments made to the Constitutional Court and advised their lawyers that Sassa would not be ready by March 31, 2017 \u2013 and indeed would probably require a further two years.<\/p>\n<p>The advice from Nazeer Cassim SC was clear: \u201cThe court will have to be informed of the change in status pertaining to project deliverables as well as the possibility of CPS\u2019 tenure being extended.\u201d<\/p>\n<p>This advice was ignored.<\/p>\n<h5>Parallel structure<\/h5>\n<p>Instead, the minister moved her so-called \u201cwork streams\u201d into position.<br \/>\nOne of the reasons it is hard to believe Dlamini didn\u2019t know what was going on at Sassa is that she is a veteran of the department and has put in place powerful structures that account directly to her.<\/p>\n<p>She became Deputy Minister of Social Development in May 2009 and has been serving as minister since November 2010.<\/p>\n<p>From the start, she was a target of the peculiar Gallic charm of Serge Belamant, the executive chairperson of CPS parent company Net1.<\/p>\n<p>In her October 2010 declaration to Parliament, Dlamini noted that one \u201cMr S Bettlement\u201d gave her earrings worth R3,800 for her birthday, apparently in September 2009.<\/p>\n<p>In 2013 Dlamini set up a hand-picked ministerial advisory committee to chart the future of the grants payment system. Key among its members were Patrick Monyeki, Tim Sukazi and Tangkiso Parkies.<\/p>\n<p>Mark those names.<\/p>\n<p>The committee submitted its report in December 2014, recommending that Sassa should build its own in-house payment system.<\/p>\n<p>That report is part of the problem.<\/p>\n<p>It is fulsome in its praise for the CPS solution, commenting on its cutting-edge reach, complexity and efficiency. Then it proposes an in-house solution that makes the CPS system look like child\u2019s play.<\/p>\n<h5>Dlamini\u2019s \u201cRolls Royce\u201d<\/h5>\n<p>A new solution, said the committee, should not only provide beneficiaries with social grant payments, but link into dozens of other government programmes.<\/p>\n<p>It should replace the current \u201cSOCPEN\u201d (the legacy system that captures social pension applications) with a new, integrated system.<\/p>\n<p>It should acquire Sassa-owned ATMs and Point of Sale (\u201cPOS\u201d) devices to be housed in local and community merchant stores and suitable government agencies, which would grant Sassa the \u201cpower\u201d to dictate pricing as well as negotiate discounts from merchant chains and local stores.<\/p>\n<p>It should integrate the payment system with various databases such as government pension funds, workers\u2019 compensation, the Road Accident Fund, the Unemployment Insurance Fund and the department of home affairs.<\/p>\n<p>Sassa should produce its own specialised bank card which would include biometric verification for every transaction and be able to \u201cenforce spending at specific merchants\u201d; \u201cmanage\/restrict debit orders\u201d and \u201cprovide protected and unprotected spending\u201d, such as barring spending on alcohol.<\/p>\n<p>It is little wonder that the department has failed to make rapid progress on this bloated wish list.<\/p>\n<h5>Work streams<\/h5>\n<p>The report also slyly suggests that the minister extend the mandate of the advisory committee to include \u201cfacilitating\u201d implementation of its own recommendations.<\/p>\n<p>In July 2015, the minister wrote to then Sassa chief executive Virginia Petersen with an instruction to retain key members of the committee to head up \u201cwork streams\u201d to implement the recommendations.<br \/>\n\u201cAlthough this panel will account directly to me \u2026 I request Sassa \u2026 compensates the panel on behalf of the department,\u201d Dlamini wrote.<\/p>\n<p>That didn\u2019t officially happen for a year, probably because Sassa struggled to find a way to do what the minister wanted, legally, but was blocked by national Treasury.<\/p>\n<p>In the end, three members of the erstwhile committee survived to head up work streams, beginning in August 2016, but were employed without following any bidding process.<br \/>\nParkies, a former official with the KwaZulu-Natal department of economic development, led the \u201cLocal Economic Development\u201d stream.<\/p>\n<p>Sukazi, an attorney specialising in representing soccer players, led the team for \u201cLegislative and Policy Requirements\u201d, while Monyeki, an IT veteran, was responsible for \u201cInformation Management, Business Systems and Banking Services\u201d.<\/p>\n<p>According to figures mentioned in the parliamentary public accounts committee, Parkies has received just under R5-million, Sukazi or his legal firm have already been paid R7-million, and Monyeki and his company RangeWave Consulting have been paid R35-million.<\/p>\n<h5>Pat Monyeki and friends<\/h5>\n<p>Monyeki\u2019s portfolio is the one that goes to the heart of Sassa\u2019s plan to deliver grants, so he bears greater scrutiny. The results are not reassuring.<br \/>\nMonyeki\u2019s name has previously surfaced in relation to allegations around the Sassa contract awarded to CPS in 2012.<\/p>\n<p>In March 2013, <a href=\"http:\/\/amabhungane.co.za\/article\/2013-03-22-tape-implicates-zuma-lawyer-in-farcical-tender\" target=\"_blank\" rel=\"noopener\">amaBhungane published details<\/a> of a recording in which a Sassa official, John Tsalamandris, made allegations to the effect that the bid had been skewed in CPS\u2019s favour by the 11th hour introduction of a mandatory technical requirement which resulted in CPS\u2019s only serious rival, Allpay, being excluded.<\/p>\n<p>The new mandatory requirement was for biometric verification for each monthly grant payout \u2013 regardless of whether the recipient opted simply to receive payment into an ordinary bank account.<\/p>\n<p>CPS offered a voice verification system, which Allpay could not match. Subsequent to the tender award to CPS, the voice system proved unpopular and unworkable \u2013 and was quietly dropped.<\/p>\n<p>Monyeki had been contracted to serve as the IT technical adviser to the bid evaluation committee.<\/p>\n<p>Monyeki, Tsalamandris alleged, was \u201cthe key because he was used to justify why we\u2019re blocking technical\u201d.<br \/>\nHe also revealed that presidential lawyer Michael Hulley, who Sassa contracted as \u201coverall strategic adviser\u201d for the bid process \u2013 at a price of R21,000 a day \u2013 had curiously not invoiced a cent for his services and was never paid.<\/p>\n<p>Tsalamandris also claimed that Monyeki was \u201cbest friends\u201d with the bid adjudication committee chairperson, one Tom Moyane, now commissioner of the South African Revenue Service.<\/p>\n<p>Tsalamandris, who at one stage claimed to fear for his life, later distanced himself under oath from any suggestion that there were serious irregularities in the process of evaluating the tender.<\/p>\n<p>Monyeki also emerged as a shareholder in Sasstec, the security and IT group that includes Integritron Integrated Solutions and SA Fence &amp; Gate, both companies involved in tender controversies with the prisons service.<\/p>\n<p>Finally, amaBhungane reported last year that one of Monyeki\u2019s companies was one link in a suspicious chain of payments flagged by the Financial Intelligence Centre, a portion of which ended up being paid into the bank account of senior SARS official Jonas Makwakwa.<\/p>\n<p>Curiously, Moyane appears not to have done anything about this troubling report until amaBhungane\u2019s exposure of the payments prompted him to suspend Makwakwa and institute an inquiry, which is still ongoing.<\/p>\n<h5>Back to the future<\/h5>\n<p>Both Monyeki and Hulley have emerged again as key players in the unfolding crisis of grant payments and the CPS contract.<\/p>\n<p>Hulley was part of at least two meetings with Dlamini and Sassa officials in December 2016, during which the CPS contract was discussed. His role and mandate was questioned by officials \u2013 and remains unclear.<\/p>\n<p>The <em>Sunday Times r<\/em>eported that Dlamini told officials at a February 20 crisis meeting of the Sassa executive that they should stop questioning Hulley\u2019s role as there was nothing wrong with him as he was President Jacob Zuma\u2019s legal adviser.<\/p>\n<p>Meanwhile, Monyeki\u2019s work stream appears to have been central to Dlamini\u2019s response to the realisation that Sassa would not be ready to take over grant payments.<\/p>\n<p>In her submission to the Constitutional Court she said she had been advised by the \u201ctechnical advisers\u201d working under Monyeki in about October 2016 that the Sassa takeover plan presented to the court in October 2015 was \u201coverly optimistic, unrealistic and underpinned by insufficient research\u201d.<\/p>\n<p>It should be recalled that the Sassa plan was in large measure driven by the ambitious goals set by the ministerial advisory committee, of which Monyeki was a prominent member.<\/p>\n<h5>Power struggle<\/h5>\n<p>The response to the looming deadline of April 1, 2017 appears to have pitted Dlamini and her work streams against some officials, including social development director-general Zane Dangor and Sassa chief executive Thokozani Magwaza.<\/p>\n<p>Central to the disputes were the officials\u2019 attempts, first, to seek to re-engage the Constitutional Court to oversee the process and, second, to find ways of replacing CPS as soon as possible, even if that meant abandoning Sassa\u2019s ambitions to run the whole show itself.<\/p>\n<p>The struggle had its clearest expression in the argy-bargy around the approach to the Constitutional Court.<\/p>\n<p>It will be recalled that in May 2016, senior counsel Cassim advised Sassa to come clean with the court as soon as possible. That advice was repeated in an October memorandum from Wim Trengove SC. But Hulley\u2019s advice, it seems, was to avoid a return to court supervision and rather to present the court with a fait accompli, once a new deal with CPS had been signed.<\/p>\n<p>Sassa CEO Magwaza, by Dlamini\u2019s own account, defied her wishes by filing an application to the court to authorise Sassa to engage CPS to continue to pay grants for just one year \u2013 until March 2018.<\/p>\n<p>In his affidavit, which he filed on February 28, just ahead of going on sick leave, Magwaza foreshadowed a solution not favoured by Dlamini\u2019s work streams \u2013 one involving an open system where existing banks and the SA Post Office (SAPO) are key players.<\/p>\n<p>He noted: \u201cAt the termination of this period, Sassa will be in a position to have phased in the services of the institutions participating in the National Payment System to serve as the rallying point where beneficiaries will be paid.<br \/>\n\u201cSassa has already commenced the process to issue a tender for the services of a cash service provider in areas where banks and the SAPO do not have the facility to make payment.\u201d<\/p>\n<h5>Dlamini\u2019s rearguard action<\/h5>\n<p>This approach was clearly not to the minister\u2019s liking.<br \/>\nDlamini attempted to have the application withdrawn \u2013 and when the court refused, she filed her own report which emphasised that because Sassa \u201chad been discharged from this court\u2019s supervisory jurisdiction, it is no longer obliged to report to this court\u201d.<\/p>\n<p>She told the judges that her \u201ctechnical advisers\u201d believed it would be necessary to continue to use the services of CPS, at least on a transitional basis, over an extended period of time \u2013 two to three years. Elsewhere, she noted that \u201cthe minister appreciates that it may in fact take longer, possibly five years, to implement Sassa\u2019s policy objectives\u201d.<\/p>\n<p>In the meantime, she said, the intention was that new service providers would be appointed on a competitive basis.<br \/>\nAttached to her report was a copy of a Request for Information (RFI) issued by Sassa in December 2016, which appears to be based on the work streams\u2019 \u201cfull-service\u201d wish list, though Dlamini conceded that a final tender Request For Proposal (RFP) may require Sassa to adjust the requirements \u201cto accommodate any appropriate solutions\u201d proposed by Treasury.<\/p>\n<p>CPS has of course filed a response to the RFI \u2013 and might have been in pole position for the RFP had the plan to avoid Constitutional Court supervision succeeded.<br \/>\nNow, of course, all bets are off.<\/p>\n<h5>A history<\/h5>\n<p>Serge Belamant likes to boast that his technology is world-class and that no other company could deliver grants as safely and efficiently as CPS.<\/p>\n<p>That may be. He has also been at pains to paint himself as the innocent party.<\/p>\n<p>In his submission to the court this week he declared: \u201cCPS supports the re-instatement of the oversight role of this Court. CPS welcomes transparency and accountability in all matters concerned&#8230; [CPS] is anxious to avoid becoming embroiled in further protracted and costly legal battles as a result of irregularities that are entirely of Sassa\u2019s making. Regardless of its innocence, CPS\u2019s reputation is inevitably compromised when it is required to conduct business under contracts that have been declared invalid.\u201d<\/p>\n<p>But the company has a history that casts a shadow on these protestations.<\/p>\n<p>Way back in 2004 the <em>Mail &amp; Guardian<\/em> reported claims that tender criteria for a provincial grant payout contract were \u201cmanipulated\u201d by the late introduction of \u201ctrack record\u201d as a requirement.<\/p>\n<h5>CPS edged out its rival.<\/h5>\n<p>The story also revealed that the CPS empowerment partner had been funding the provincial ANC through a \u201ccharitable\u201d trust.<\/p>\n<p>Claims that ANC politicians also got a cut were the subject of a prolonged investigation by the Scorpions but never tested in court.<\/p>\n<p>Belamant was quoted as saying he had no knowledge of party funding flowing from the contract.<\/p>\n<p>But over the years Belamant continued to accumulate politically connected empowerment partners \u2013 and controversy.<\/p>\n<p>At one point Imvume Resources, the company established by late ANC fundraiser Sandy Majali and best known for its central role in the Oilgate scandal, was described as Net1\u2019s \u201cnational black economic empowerment partner\u201d.<\/p>\n<p>Then came amaBhungane\u2019s report in which advocate Norman Arendse alleged that in 2008 he was offered an \u201copen chequebook\u201d bribe by an individual claiming to represent CPS.<\/p>\n<p>Arendse chaired the adjudication committee for the first national tender under Sassa, which was cancelled in November that year on the committee\u2019s advice.<\/p>\n<p>Belamant denied all knowledge of the alleged bribe attempt.<\/p>\n<p>CPS won the re-issued tender in 2012, in part based on empowerment claims which amaBhungane has shown to be spurious.<\/p>\n<p>CPS used a thinly veiled black front to win \u2013 but then dumped these partners and signed on Brian Mosehla, a businessman who regularly consorts with Lunga Ncwana, a close friend of Minister Dlamini.<\/p>\n<h5>A last word<\/h5>\n<p>Perhaps the last word should go to Tsalamandris.<\/p>\n<p>In doing so we sound a cautionary note, highlighting CPS and Sassa\u2019s denials, Tsalamandris\u2019s recantation and the Constitutional Court\u2019s decision ultimately not to admit the tape recording of his conversation as evidence.<\/p>\n<p>On the other hand, note that Tsalamandris was the secretary to the aborted bid process in 2008 and to the bid won by CPS in 2012.<\/p>\n<p>He was speaking candidly and in confidence. Indeed, his words now echo ominously.<br \/>\nHe said: \u201cYou know I\u2019ve been involved in both bid committees. The first one we didn\u2019t award because of the minister. This time [it was awarded] especially because of the minister. It doesn\u2019t matter who gets it. But it was just so blatantly dirty.\u201d<\/p>\n<p><a href=\"http:\/\/www.amabhungane.co.za\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/amabhungane.org\/wp-content\/uploads\/2018\/03\/250x106.jpg\" width=\"250\" height=\"106\" align=\"left\" \/><\/a><em><br \/>\nThe amaBhungane Centre for Investigative Journalism produced this story. Like it? Be<a href=\"https:\/\/www.givengain.com\/cc\/amab\" target=\"_blank\" rel=\"noopener\">an amaB supporter<\/a> and help us domore. Know more? Send us <\/em><em><a href=\"http:\/\/amabhungane.co.za\/page\/tip-offs\" target=\"_blank\" rel=\"noopener\">a tip-off.<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>From the very short to the short to the plain and simple answer for why Sassa has not got its act together on the social grants crisis.<\/p>\n","protected":false},"author":3,"featured_media":22358,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[2],"tags":[],"class_list":["post-4792","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stories"],"acf":[],"_links":{"self":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts\/4792","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/comments?post=4792"}],"version-history":[{"count":1,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts\/4792\/revisions"}],"predecessor-version":[{"id":30665,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts\/4792\/revisions\/30665"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/media\/22358"}],"wp:attachment":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/media?parent=4792"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/categories?post=4792"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/tags?post=4792"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}