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Treasury: Sassa biased in specifications for grant payments bid

In a letter to interim Sassa chief executive Pearl Bengu, Treasury says that Sapo should not have been disqualified on three areas of the contract.

FILE: Sassa CEO Pearl Bhengu (left), Telecommunications and Postal Services Minister Siyabonga Cwele and Social Development Minister Bathabile Dlamini at a media briefing. Picture: EWN

CAPE TOWN - Treasury has delivered a damning assessment of the South African Social Security Agency’s (Sassa) handling of the takeover the grant payment system.

It’s found that the agency was biased in drawing up the specifications of the bid proposal that has excluded the South African Post Office (Sapo) from parts of the contract.

In a letter to the interim chief executive Pearl Bengu, Treasury says that Sapo should not have been disqualified on three areas of the contract.

Rather, the parties should have explored ways to close the capacity gap, or it should have sought the intervention of the interministerial committee.

Last week, the Standing Committee on Public Accounts (Scopa) and the Social Development committee requested Treasury to intervene in the stalemate between the two state entities, but still, no agreement has been reached.

The interministerial committee led by Minister in the Presidency Jeff Radebe has given the parties until 17 November to come up with a plan that will include Sapo.

Treasury says that Tuesday’s joint meeting between itself, Sapo, Sassa and the South African Reserve Bank noted that Sapo won’t be able to start paying grants on its own by 1 April 2018.

Sassa will also not be able to finalise all their processes to ensure grants are paid by that date.

Treasury Director-General Dondo Mogajane is recommending a meeting on Friday with the Banking Association of South Africa and the Payment Association of South Africa, to reach an interim solution for a hybrid payment model.

He is suggesting that Sassa makes an arrangement with a clearing and settlement bank to use the national payment system infrastructure to distribute social grant payments.

In its reviews of the process, Treasury noted that Sassa did not use a due diligence report compiled by the CSIR for its intended purpose.

Sassa has used the document to base its assessment that Sapo can’t do all the work required, including produce the required number of bank cards.

But Treasury says there’s no evidence to suggest that recommendations by the CSIR on card production were even discussed between the parties.

“The penalisation or allocation of less points to Sapo without considering the recommendations of the CSIR, is not justifiable,” says the letter.

Treasury further points out that Sassa took more than 60 days to evaluate and adjudicate just one proposal.