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Post office deal to pay grants may put Sassa finances under strain - panel

The panel headed by Auditor-General Kimi Makwetu says enlisting the Post Office to pay grants in cash might not be the most cost efficient for Sassa.

FILE: Old and new Sassa cards. Picture: OfficialSASSA/Twitter.

CAPE TOWN - A court-appointed panel of experts says it's concerned that South Africa Social Security Agency’s (Sassa) arrangement with the Post Office to pay grants could put a strain on the agency's finances.

That's because the actual cost of the takeover by the Post Office remains unknown.

A transition agreement put the price tag at R3.2 billion but the panel appointed by the Constitutional Court to oversee the transition says it's concerned that none of the parties involved has conducted a detailed study of the future costs and expenditure to date.

In its eighth report to the Constitutional Court, the panel headed by Auditor-General Kimi Makwetu says enlisting the Post Office to pay grants in cash might not be the most cost efficient for Sassa.

The Post Office is having to invest significantly in infrastructure to make the payments.

The panel says Sassa could be saving money by using service providers which already have the necessary infrastructure.

But a tender process to invite bids from private companies to pay grants in cash, was cancelled in March over a legal challenge by one of the bidders.

The panel says it’s also concerned that the cost of Sapo making the payments is increasing. But it says it can’t make a proper assessment of the cost implications because the Post Office has ignored its requests to provide it with details on updated projections and capital costs.

The panel says by now Sassa and the Post Office should have drawn up a three-year budget to determine how it compares with controversial payment provider CPS which has to be phased out at the end of September.

(Edited by Winnie Theletsane)