IMC on resolution of SASSA/SAPO impasse, with Minister in the Presidency

Meeting report

The Chairperson welcomed the Minister Jeff Radebe, Chairperson of Inter-Ministerial Committee (IMC), National Treasury, South African Social Security Agency (SASSA), South African Post Office (SAPO) and Department of Social Development (DSD). the purpose of the joint meeting was to receive a brief from the IMC on resolutions reached on SASSA/SAPO impasse over social grants contract. The impasse was linked to compliance with the Constitutional Court ruling on the phasing out of Cash Payment Services (CPS) and procurement of alternative services. He conveyed the apologies of the Chairperson of Portfolio Committee on Social Development.

Inter-Ministerial Committee (IMC) Chairperson: briefing
Minister in the Presidency and IMC Chairperson, Jeff Radebe stated that Government decided to resolve the impasse through IMC and took full responsibility to implement solutions that would resolve the impasse. The role of the IMC was to use its political authority to act in guiding, directing and ensuring the implementation of the Constitutional Court ruling. He assured South Africans that Government would continually pay social grants. He gave a background of what led to the intervention of the Constitutional Court (ConCourt) and highlighted the ConCourt directives. The ConCourt directives to SASSA on the 7 November 2017 was to ensure proper compliance with its order dated 17 March 2017.

The order to SASSA was to provide information to the Panel of Experts within the required timeframes; provide appropriate and sufficient detail on process undertaken by SASSA to obtain services of service providers, including communication with the Office of the Chief Procurement Officer by 12 noon Friday 17 November; combine statistics and information of all mechanisms involved in the payment of social grants into one consolidated document to be provided to the panel on a monthly basis; and ask GCIS to develop and implement a focused communication plan to inform current and potential beneficiaries and recipients of social grants of the implications of the transition and benefits of receiving their social grants via bank accounts provided by commercial banks or financial institutions of their choice.

The order included provision of monthly reports on progress achieved in implementing a communication plan; report to the Court, on affidavit, as to SASSA’s plan to effect the uninterrupted payment of social grants, specifying matters such as definite roles and responsibilities, precise timelines, dependencies, desired outcomes and risk mitigation measures by Friday, 8 December 2017; submit a progress report to the Court after filing its plan on progress achieved in implementing the plan, the steps taken to mitigate risks which could prevent the full execution of the plan and any other matters each month; submit a report to the Court by Friday, 8 December 2017 on SASSA’s contingency plan if a seamless transition on 1 April 2018 was not realisable and provide the Panel with appropriate and sufficient information on any steps taken to implement the directives.

Based on the comprehensive directions of the ConCourt, the IMC decided to align its work to the ConCourt reporting requirements, given the similar timeframes and expectations of the dedicated period between now and April 2018. The IMC Chair and the Chair of the Technical Committee met with the Panel of Experts, on 14 November 2017, to outline the process and find convergence with respect to the approaches to this task. The IMC Technical Committee agreed that reporting requirements must coincide with the deadlines and deliverables of ConCourt to ensure that SASSA remained focused on the task of implementation as will be revealed in IMC project plan. The IMC Technical Committee dedicated team was established to ensure the finalisation of the agreement between the SASSA and SAPO as well as the development of an implementation plan and a communication strategy. A public sector-led hybrid model which included partnership between Department of Home Affairs (DHA), State Security Agency (SSA) and financial institutions was confirmed by the Technical Committee. This hybrid approach allowed a set of public and private sector service providers to offer beneficiaries of social grants with maximum choice, access and convenience. The Technical Committee established the financial, legal and ICT teams to find sustainable solutions for the payment of social grants in the country. The Technical Committee, financial and ICT teams met with the financial institutions, on Friday 10 November 2017, to discuss the specific role of financial institutions. The legal team led by the Chief State Law Advisor as well as the SAPO and SASSA legal teams met to ensure that the process was constitutional and legal. IMC’s commitments to the Committees and South Africans were to conclude signing an agreement between SASSA and SAPO on the implementation Protocol, communication strategy and the implementation plan.

Minister Radebe stated that the Implementation Protocol had been concluded and signed by SASSA and SAPO and by the Minister in the Presidency on behalf of the IMC on 17 November, 2017.

The Implementation Protocol was an overarching agreement in terms of the Inter Governmental Relations Framework Act of 2005. The collaboration between SASSA and SAPO was enabled by Section 238(b) of the Constitution; Section 4(2)(b) of the South African Social Security Act of 2004 (which allowed SASSA to do anything necessary for the realisation of the Agency’s objectives) and the National Integrated ICT White Paper Policy. The Protocol empowers SAPO to provide SASSA with a Corporate Control Account (Holding Account); a Special Disbursement Accounts, Card Body Production and Distribution (subject to price competitiveness) and On-boarding of new beneficiaries (Instant Account Opening & Card Issuance at SASSA branches and biometric authentication of beneficiaries) by 1 April 2018, (subject to cost effectiveness). The Protocol formed the foundation for the signing of a further detailed collaborative agreement between SASSA and SAPO with the Detailed Project Plan which will be submitted to the IMC by 6 December 2017. The Detailed Project Plan would be submitted to the Panel of Experts and Constitutional Court by 8 December 2017. IMC met with the financial institutions and the Banking Council of South Africa on 10 November 2017 and agreed on the principles of establishing a special affordable account for SASSA beneficiaries. The parties agreed on how to enhance the role of financial institutions on SASSA grants and further meetings to discuss the details of the commercial accounts and the expansion of their joint activities would come up later.

The Implementation Protocol is accompanied by an implementation plan which identifies the various critical steps required to ensure payment of grants by 1 April 2018. The various stages of the implementation plan includes finalising of all necessary service agreements, agreements on the cost model and conclusion of the cost benefit analysis of the options, issuing the first batch of the new biometric enabled card, development of new software to manage card system and seamless handover from the current service provider to the new service providers. It is important to note that the IMC and the Constitutional Court reporting requirements have been aligned and therefore the work program is synchronised.

The IMC instructed Government Communication and Information System (GCIS) to develop the communication strategy that would ensure beneficiaries were well informed and updated about the strategies to appoint a service provider to pay social grants from 1 April 2018 as reinforced by the Constitutional Court directives dated 7 November 2017. Minister Radebe confirmed that the Communication Strategy was developed by 17 November 2017. The strategy would reassure all grant beneficiaries through a multimedia communications approach that Government has no intention to cancel or frustrate this social security program. This will include community radio, TV, print, social media, outdoor and further commitments have been made by Provincial Governments through the Social Development Minister and Members of Executive Councils meeting (MINMEC) to disseminate information through district, metro and local municipalities to South African communities and communicate with beneficiaries of social grants across the country, especially recipients that have limited or no access to public information due to their remote or inaccessible locations. Minister Radebe remarked that it was vital to have coordinated communication and a reputable voice from Government that offered credible messages on the way forward to avoid a repeat of the anxiety about grant payments experienced around March 2017. IMC is on course to finding permanent solutions to the challenge of continuous payment of social grant come 1 April 2018. It understands the anxieties that the impasse over grants has caused, including fears that the cards might expire and beneficiaries will not receive their grants. He assured all SASSA beneficiaries across the country that no card will expire at the end of this calendar year.

Minister Radebe remarked that according to the General Household Survey (2016), social grants were the main source of income for many South Africans and he outlined the benefits. He emphasised that changing the service provider would not mean poor service and Government remained committed to providing all deserving beneficiaries social grants timeously and in a dignified manner. SASSA has facilitated the extension of its current payment card lifespan beyond 31 December 2017. This will not affect the beneficiaries that have opted to use commercial bank accounts. Government encouraged beneficiaries to call SASSA call centres for assistance or inquiries. He indicated that Government would continually protect beneficiaries from unscrupulous deductions and exploitation of personal data. DSD and SASSA have made commitments to implement the court order on the protection of beneficiary data and deductions. SASSA will proceed to investigate all financial activities around the grants as directed by the Court with the view to protect beneficiaries. SASSA intends to insource the management of Social Assistance Regulation 26(A), which provides for the deduction of funeral policies authorised by beneficiaries. He outlined the contributions of the social assistance programme to South Africans through social grants from 1998 to 2016. He concluded that IMC was committed to continue with this work until the conclusion of the implementation plan.

Discussion
The Chairperson appreciated the IMC for its work towards ensuring that SASSA complied with the Constitutional Court directives for a valid social grants contract. He expressed happiness that the impasse has been broken between SASSA and the SAPO. He drew Members’ attention to page six which outlined the areas of responsibility given to SAPO by the Implementation Protocol and that IMC had ensured that Implementation Protocol processes aligned with the Constitutional Court’s deadline.

Mr T Brauteseth (DA), SCOPA, thanked Minister Radebe for his leadership of the IMC and the role of IMC in resolving the impasse between SASSA and SAPO. He expressed concern about the cost effectiveness qualification for the services to be provided by SAPO. He asked the Minister to state IMC’s plan B if it turned out that SAPO could not provide the services in a cost effective manner. He commented on the Panel of Expert’s report filed to the Constitutional Court on 20 November 2017 which recommended that National Treasury must investigate the conduct of SASSA employees and DSD officials based on all actions since 2016 to issue service provider contracts to give effect to the court order. The recommendation sought to determine if anyone should be prosecuted under Section 81, 83, or 86 of the Public Finance Management Act. This was a direct recommendation to the Constitutional Court that SASSA officials be investigated for criminal conduct. He wanted SCOPA to ensure it held SASSA accountable and ensure National Treasury followed up on making SASSA account. The Panel recommended that the IMC gets involved in instructing the Department of Planning, Monitoring and Evaluation (DPME) to investigate and set out remedial actions to ensure that there is an end to SASSA being an entity without proper institutional governance, capacity and technical expertise to carry out oversight functions. He asked SCOPA not to forget its accountability mandate and address it by ensuring that officials that were part of the criminal conduct need to be investigated.

The Chairperson remarked that since the recommendations were part of the report addressed to the Constitutional Court and not to the Committee, the IMC Chairperson should not address this.

Mr Brauteseth clarified that he was not expecting an answer.

Ms N Mente (EFF), SCOPA, remarked that Minister Radebe should be allowed to answer the questions if the Committee though that IMC could provide it with answers. She asked the Minister to confirm if IMC had gone through the Request for Proposals (RFPs) to confirm it was cost effective. She wanted confirmation that SAPO was capable to provide services in the four areas agreed on in the Implementation Protocol. She asked IMC to clarify if the public sector-led hybrid model allowed social grant beneficiaries to withdraw money from any ATM or if social grant beneficiaries would have to be bank customers of banks and be subjected to illegal deductions.

Mr D Ross (DA), SCOPA, thanked Minister Radebe for his decisive leadership in aligning towards the Constitutional Court order. He asked IMC if it could assure the country that timeframes for the Implementation Protocol and plan would be binding. He asked if IMC could ensure timeous payments in terms of the agreement. He asked if there were agreements that the IMC expected to be signed but were not yet signed on the roles of SASSA and SAPO.

Ms B Abrahams (ANC), Committee on Social Development, expressed happiness that legal processes were followed by the IMC and asked if there were any legal implications that would result from Minister co-signing the Implementation Protocol with SASSA and SAPO. She asked for contingency plans in case there were challenges with the Implementation Protocol.

Ms H Malgas (ANC), Committee on Social Development, observed that Cash Paymaster Services (CPS) had been declared illegal hence she asked IMC to confirm if CPS would exist beyond 1 April, 2017.

Mr M Hlengwa (IFP), SCOPA, appreciated the IMC for taking its work seriously based on the new leadership. He remarked that if the IMC had done its work initially the challenges on social grant would not have escalated. He asked for clarity on if SAPO had the capabilities to carry out the functions in the implementation Protocol signed with SASSA. He asked IMC to state the alternative parties referred to in its brief based on the qualification on cost effectiveness alluded to in the report. As the report could be interpreted to mean CPS was coming back as a service provider. He asked IMC to state when it would commence testing on migrating to the new system. He asked for the state of readiness of implementing the process because he doubted if the targets could be met. He supported Mr Brauteseth’s (DA) point on investigations. The Committee needs to investigate what the IMC was doing to ensure social grants were paid and mitigate the impasse between SASSA and SAPO before the change of leadership. the Committee needs to investigate corrupt officials.

Mr E Kekana (ANC), SCOPA, indicated that the Committees' decision was for IMC to assist with the impasse between SASSA and SAPO but the Committee did not agree that SASSA or SAPO would address it hence SASSA or SAPO could not answer any questions. He asked IMC to give clarity on the communications strategy to ensure that South Africans would have information on social grants before Christmas. He asked IMC to state timeframes for implementing communication strategy.

Minister Radebe responded that IMC's posture was to implement the recommendations of the Constitutional Court. The IMC implementation plan would include all things needed for a new service provider by 1 April, 2018. The hybrid model would use all available models for social grants payouts. This was why IMC had met with financial institutions to discuss the possibilities. IMC has received the Panel of Experts report and would meet with the Committee after considering it. IMC would stick to the timelines and deadlines agreed to in the signed implementation Protocol between SASSA and SAPO. Deductions on social grant accounts would be based on the recommendations of the Constitutional Court. The Chief State Legal Adviser advised IMC that the legal implications favoured IMC. The capabilities of SAPO would be known during the meeting of 21 November, 2017 and the services that SAPO would render would be outlined. The principles of cost effectiveness are important and the implementation plan would depend on it. Migration is part of the implementation plan and would be evident by 8 December, 2017. GCIS developed the communication strategy and it was approved on 17 November, 2017. GCIS has set out modalities to inform the public and IMC is committed to meeting the deadlines in the implementation plan. IMC intervened because the Constitutional Court declared CPS illegal; hence he assured the Committee that CPS would not be part of the service providers for social grants anymore.

The Chairperson observed that Members wanted SASSA and SAPO to answer questions but the Committee would not entertain the questions until IMC completed the process of the detailed signed agreement between SASSA and SAPO.

Ms Mente remarked that the Committee should not be seen to be encouraging fruitless and wasteful expenditure because SASSA and SAPO were present at the meeting and the Committee had not allowed them to respond.

The Chairperson replied that the response of SASSA and SAPO would not be different from the outcome of the detailed signed agreements that would be presented to the Committee on Friday 24 November 2017.

Mr M Booi (ANC), SCOPA, thanked the IMC for its detailed brief and prompt resolution of the impasse between SASSA and SAPO.

Ms S Tsoleli (ANC), Committee on Social Development, noted that the IMC briefing had encouraged the public to make enquiries about social grants through the call centre. She asked the IMC to clarify if its call centres would be using answering machines or be using dedicated staff that answered queries immediately because old people were involved.

Ms P Sonti (EFF) spoke in Xhosa.

Mr Ross expressed concern about the implementation plan and asked if IMC was happy with the agreements signed to date. He asked if IMC felt some items were missing in the signed agreements between SASSA and SAPO. IMC indicated that it would evaluate SAPO and asked if there would be formal signing of agreements after the SAPO evaluation was completed.

Mr Kekana asked if both Committees would get the IMC reports and how regular the reports would be.

Mr Hlengwa asked if the implementation plan process would include tendering because he was concerned about timeframes. He asked IMC what would happen if it found that SAPO was not capable based on cost effectiveness. He requested the CSIR Report because CSIR's position on out-sourcing needed to be known.

The Chairperson mandated the IMC to give monthly reports on its progress to both Committees. He proposed that the Committee engage with IMC in January 2018 to follow-up on IMC's progress towards the roadmap of 1 April 2018. He asked IMC to forward its communication strategy to both Committees when it was completed. There were two critical matters for implementing the Protocol: the timeline for the old system to be phased out and the new system phased in. The costing of implementing the Protocol was vital. He expressed concern about the functions allocated to SAPO as one element that was missing was mobile payments. This was because it would not be easy for beneficiaries living in rural areas to access commercial banks. He asked IMC to confirm if it had discussed the type of account commercial banks would open for beneficiaries based on deductions. IMC must establish that beneficiaries living in rural areas cannot carry the cost to transfer the funds. He noted that the brief had indicated that the signed Protocol would lead to further detailed agreements. He remarked that the process needed to be followed systematically but Members wanted the issues to be addressed immediately.

Minister Radebe replied that SASSA call centres would be reinforced through the Presidential Hotline which was free. The Presidential Hotline had dedicated staff that answered queries without placing callers on answering machines. Further agreements would be signed between SASSA and SAPO after SAPO’s capabilities had been outlined. Both Committees would be provided with documents on the communication strategy in a written report. SASSA has mapped out its payment points for mobile payments and superimposed the payment points with SAPO locations. The use of banks would be based on cost effectiveness. He thanked the Technical Committee members for their convergence.

The meeting was adjourned.