An enormous blunder by the South African Social Security Agency (SASSA) has resulted in more than R140 million going missing. According to the agency, it knew that the cause of this loss was attributable to the late delivery of official deaths from the Department of Home Affairs (DHA). Resultantly, SASSA ended up with around 75,000 social grant payouts valued at around a year for those people who died.
SASSA Blunder Presentation
The problem was brought to light during the presentation of the 2023/24 audit action plan recently by the parliamentary portfolio committee on social development. During this meeting, SASSA chief executive officer (currently suspended pending an investigation) Busisiwe Mamela was at the helm, while the agency’s chief financial officer Tsakeriwa Chauke was made to give a detailed explanation about the serious financial blunder.
Stimulus for R140-Million Loss
Faulty timing of payment processing is the main reason for such mistakes. Every month, SASSA generates payment files through the SOCPEN database for social grants.
If a person dies between the generation of the file and the payment date, he/she will get a payment, even after the death. It has happened 75,000 times, costing taxpayers a total of about R140 million in a year. Interestingly, 630,667 deaths in South Africa happened in the year 2022, according to Stats SA. That’s about 52,555 deaths in a month. With 45% of South Africans receiving some kind of social support, including SRD or core SASSA grants, only 25,277 deaths per month could have been expected to match the figures reflected from the grants, highlighting the major disparity.
CFO Tsakeriwa Chauke says a new system would be tested in April to put a stop to further errors. This new IT system addresses the problem by allowing bulk payment recall for deceased beneficiaries based on death records from the DHA, which will take place in April.
While SASSA’s arrangements with the DHA is aligned, this system has a major flaw lossy, as many people never report the death of a recipient. Thus, SASSA continued the payments until the beneficiary could not collect the grant over a period of three months.
Despite challenges, SASSA has shown improved performance on irregular expenditure. The report said it declined overall. SASSA, for instance, lost an astounding R1.8 billion due to misappropriation in the financial year ending 2018/19, whereas in 2023/24 it was further reduced to only R34.2 million. According to Chauke, this has been made possible through improved oversight and supply chain management training.
Some Material Irregularities Noted in the Audit Report of the SASSA
Yet, as much as improvement has been seen, the audit report of SASSA also mentions some others of material irregularities, such as:
| Irregularity | Amount | Description |
|---|---|---|
| Payment to CPS | R74 million | Paid to Cash Paymaster Services (CPS) for services not rendered in 2018. |
| Overpayment to CPS | R316 million | Overpaid to CPS; the High Court ruled this should be repaid to SASSA. |
| Fraudulent SRD Grants | R150 million | Paid to ineligible applicants. |
| Photocopier Overpayment | R7.8 million | Paid for photocopy machines in Eastern Cape. |
| Fraudulent Payments to Officials | R1.7 million | Made to SASSA officials. |
Plans to Combat Fraud and Improve Service
To counter issues of fraud, biometrics will be implemented for all SRD grant beneficiaries by acting CEO Temba Matlou in the next fiscal year. In addition, SASSA will be resetting the rate-limiting features of the system to restrict the number of queries against it and thereby reduce opportunities for fraud.
The organization still faces challenges like heavy queues at SASSA offices and a shortage of personnel. SASSA is in the process of hiring additional staff to address this problem.
Matlou further indicated that online applications are being promoted to ease the beneficiary process, especially when offline queues become too long.
It is noteworthy that SASSA’s blunder concerning overpayment of R140 million to dead beneficiaries underlines major shortcomings in the social security system.
Despite improvements with respect to its payment processes and fraud prevention mechanisms including biometric verification and piloting a new IT system, the agency still finds it beset with challenges such as shortage of staff and long queues, which inhibit its operation.
The last audit provides encouraging signals about the improvement of the agency’s financial control mechanisms, though still validates that more must be done to avert similar disasters from happening in the future.
FAQS:
What are the reasons for the SASSA blunder?
The delay in getting an official death registration from the Department of Home Affairs was the reason for the blunder, as deceased beneficiaries continued to be paid out.
What is the cost of the SASSA blunder?
That particular blunder was to cost South African taxpayers R140 million within the period of a year.
What is currently being done to ensure that SASSA never falls in such problems again?
SASSA plans to implement a new IT system that allows bulk recalls of payments based on the death records of the DHA, while also introducing biometric verification for SRD grant beneficiaries.
How will SASSA resolve the long queues?
Currently, SASSA is engaged in recruitment of additional staff to minimize long queues in its local offices, and beneficiaries are encouraged to use online applications to help streamline the process.