Tsakeriwa explains that the agency has received unqualified audit opinions for the past two financial years.
By SASSA CFO Tsakeriwa Chauke
The South African Social Security Agency (SASSA) has often been in the news for the wrong reasons over the past few years, but we have been quietly getting our financial act together.
SASSA is hoping to get another unqualified audit finding from the Auditor General at the end of July but, more than that, we are putting in place practices and policies that could help improve service delivery to millions of South Africans who depend on us for their monthly relief payments.
SASSA has received unqualified audit opinions for the past two financial years. Before that, there had been problems of irregular expenditure over several years.
We have turned around the issues related to irregular expenditure. We put in place measures to prevent incurring more irregular expenditure, we finalised the backlog of cases, and we cleared historic irregular expenditure in our books.
We want to strengthen oversight, which also includes corrective measures against those involved in irregular expenditure, because the best prevention is to hold people accountable.
We know what to do to ensure better financial controls. We need to clear all outstanding cases, take corrective action and make sure that all of those involved are brought to book. We have also asked the Minister (of Social Development) to review the policy on leases, which has given us many problems.
We will also review all its policies, financial and non-financial, to bring them more in line with modern needs. It is important to continuously review our policies, because employees work according to these policies. If the policies are irrelevant, officials will still follow them, and the policies may have gaps, which could affect the credibility of the financial information.
At the end of the last financial year, SASSA had R1.2 billion in irregular expenditure, but most of it is historic, from as long ago as 2014.
The figure of R1.2 billion is made up largely by eight main cases of irregular expenditure which go way back. The irregular expenditure for the year 2020/2021 is about R44 million. It is made up of R5 million, which is the non-compliance with any other prescripts, and then there is R38 million related to leases, the office and accommodation procurement.
Currently, the policy determined by the minister does not allow SASSA to procure office accommodation using its own processes. We rely on the Department of Public Works to procure on our behalf.
Every time we need accommodation, we make a requisition to Public Works. The challenge with this process is that we need to synchronise the new procurement with the expiry of the existing lease. By the time our existing lease expires, the Department of Public Works should have finished with all the procurement process, and we can move into a new building.
That does not always work as one would have expected. In many instances, by the time the department finishes its own processes, you will find that we are left stranded.
Sorting out the problems related to irregular expenditure is a painstakingly slow process. The backlog in irregular expenditure depends on the implementation of corrective measures against those who were found to have incurred the regular expenditure. We have corrected that.
We have nine regional offices, and the only region that is currently not affected by this is Limpopo, which doesn’t have any cases of irregular expenditure.
It is quite an involved process. We had 809 cases when we started the year 2020/2021. We added new cases valued at 5.3 million. Then we had the lease cases, which amounted to R38 million. At the end of the year, we finalised trying 228 cases. The number of cases may not represent the number of officials that could have been engaged.
Discipline is not easy. In terms of the Labour Relations Act, discipline should be a corrective measure and should not be punitive. It could take the form of training, a verbal or written warning, and/or a formal hearing which could lead to suspension or firing.
We sometimes have to take action against companies who misrepresent themselves, leading to irregular expenditure or fruitless and wasteful expenditure. We might have to blacklist companies or cancel the contract.
SASSA has nine regional offices, about 44 district offices, and about 389 local offices. It involves about 8,000 staff doing transactions at different intervals.
Our message has been carried forward to the employees and our training is starting to bear fruit. Our wish is that there must be no irregular expenditure in the organisation, but it takes time.
The biggest problem related to irregular expenditure is the amount of R38 million which relates to the leases, but the rest is only about R5.3 million – which is still a lot, and we cannot celebrate.
One of the outstanding cases revolves around cleaning services that had been procured in the North West province.
This matter is going to court, because the service provider is claiming damages of about R117 million from us, and we are defending that matter.
We are pursuing getting some money back from officials who left the organisation, but who had been responsible for fruitless and wasteful expenditure.
In one case, we awarded the contract to the second highest scoring bidder. Our accounting officer left the organisation so that R75 million was split into two. R71 million of that remained as irregular expenditure, while R4 million was classified as fruitless and wasteful expenditure. That R4 million is being recovered from the former CEO.
We have had instances of the VIP protection services, where we believe that we should not have paid for it as an organisation. We are trying to recover that money from three former employee officials of the government, and one internal official within the Department of Social Development.
I would have loved to have finalised these matters as soon as yesterday, but we have to wait for court procedures to take their course.
A case in point is the Cash Paymaster Services (CPS) judgment, where R316 million should have been paid back to us. The original payments were made back in 2014, but it hasn’t been fully recovered because of some technicalities.
That case went to the High Court, the Supreme Court and as far as the Constitutional Court, who decided that SASSA must receive the money from that company. Today we have not received that because the service provider is currently going through liquidation.
Our main concern is the payment of social grants and here I remain positive, in part because of our partnership with the South African Post Office.
We have mature systems in place to pay social assistance benefits. All the money gets paid into a bank account, whether it is with a commercial bank or one created by the Post Office on behalf of our clients.
The dates are defined, and they are known and are communicated to all the people. There should be no one who does not receive their money on the stipulated day.
We are not there yet, but we are getting better every day. Sorting out our financial systems is key if we want to improve our service delivery to the millions who depend on us.
