The South African Social Security Agency (Sassa) received a roasting by parliament’s standing committee on public accounts (Scopa) on Wednesday over R1,1bn in irregular expenditure in 2015/2016.
Hawks head Berning Ntlemeza was in attendance to hear the department’s account and consider possible corruption.
Democratic Alliance MP Timothy Brauteseth, a former forensic investigator, led the grilling of Sassa CEO Thokozani Magwaza and chief financial officer Tsakeriwa Chauke on behalf of the committee.
He asked why an extra R316m was irregularly spent in a contract with private firm Cash Paymaster Services (CPS), a subsidiary of JSE-listed Net1 UEPS Technologies, to re-register grant beneficiaries.
He also wanted to know why simple procedures, such as documentation, were not followed, and what happened to the accounting officers in charge at the time — former CEO Virginia Petersen and operations manager Frank Earl.
Chauke said the issue had been an emergency, as the R10bn contract with CPS did not include re-registering children or procurators.
“The process was not followed because the accounting authority had to make an urgent decision to take on the additional beneficiaries. That decision needed to be processed by the department,” he replied.
The number of people needing to be re-registered had risen from 9m to 15m, and the extra R316m was needed, Chauke said.
Brauteseth called him out, though, saying it was clear in the signed contract that children and procurators were always meant to be involved.
“How on earth did you drop the ball on this? It’s there [in the documents] to include children.
“What you’re telling this committee, is that in 2014 you signed an agreement with CPS to register everyone, including children, and you thought that 9m was enough?”
Chauke maintained the department did the right thing in that case, and that the children were eventually re-registered.
Brauteseth said the R316m should be declared “fruitless and wasteful expenditure” as it was not meant to be paid at all.
In another matter, Chauke was questioned on the R414m spent on the hiring of private security companies for Sassa staff over a four-year period since 2012.
The department was only supposed to adhere to the security contract for six months but proceeded to extend it seven more times.
It also didn’t open it for public bidding initially, as required by the Public Finance Management Act (PFMA)
Brauteseth said the handling of the issue was “remarkable”, given that it had taken four years to correct, as well as the prejudice the department showed in not tendering the process.
“Other security companies in the market would have like to have applied,” he said. “But because of your inefficiency, and the way you’ve applied your requirements, you’ve excluded other companies, which is laid down in the PFMA. The real question is did you keep these seven security companies in place for four years deliberately?” he asked.
“No,” Chauke replied.
Brauteseth then asked: “So, you were administratively defunct and unable to put together a proper process for four years?”
“Yes,” Chauke said.
“Can we have your letter of resignation today?” Brauteseth then asked.
Chauke did not answer the question. He said they did request assistance from national treasury to help the department.
MPs continued their grilling of the department.
Economic Freedom Fighters MP Ntombovuyo Mente questioned the emergency nature of the grants re-registering issue and said the committee couldn’t set a precedent for letting officials off the hook.
ANC MP Mnyamezeli Booi told Chauke and Magwaza that they were ultimately responsible for the department’s performance, and should not defer the matter elsewhere.
Committee chairman Themba Godi wanted to know why the department’s own internal audit couldn’t flag the longstanding issues.
Ntlemeza only spoke once during the meeting, to confirm that the Hawks were already looking into six cases of fraud and corruption at Sassa, and a further 10 at the department of social development.
Social development minister Bathabile Dlamini was also present but said very little during the interrogation.
She only gave a statement at the end of the meeting to request more time before reporting on Sassa’s readiness to take over the distribution of grants from CPS in April 2017.
Brauteseth finished his session by calling for Petersen and Earl to appear before the committee to be held accountable.