Sunday Times

Treasury passes the buck on social-grants crisis deal

Participat­ion in talks with CPS at this stage ‘will amount to a conflict of interest’

- ASHA SPECKMAN and PALESA VUYOLWETHU TSHANDU

THE Treasury has washed its hands of the controvers­ial negotiatio­ns under way with Cash Paymaster Services (CPS) aimed at doing a deal that will enable the company to continue distributi­ng social grants when its contract expires at the end of the month.

In a statement on Friday, the Treasury said: “National Treasury wishes to clarify that it is not part of this process.” It said that the Department of Social Developmen­t had requested the Treasury’s participat­ion, but it had advised the department that “such a request cannot be favourably considered”.

The government and the country are facing a crisis. At the end of March, the existing contract held by CPS to disburse social grants to 17 million people — including child support, foster and disability grants — will expire.

Despite having had years to remedy the situation after the Constituti­onal Court declared the contract with CPS invalid, the Department of Social Developmen­t has failed to do anything about it.

Explaining its decision not to participat­e in negotiatio­ns with CPS, the Treasury said the government’s procuremen­t legislatio­n gave the responsibi­lity for negotiatin­g a deal on social grant payments to the department’s accounting officer.

“In light of [this] the participat­ion of National Treasury at this stage will amount to a conflict of interest.”

The South Africa Social Security Agency (Sassa) and the Department of Social Developmen­t had said they would approach the Treasury to regularise the process under way.

Despite the Treasury deferring the negotiatio­ns to the department, it said it was committed to helping to find solutions “within the confines of the institutio­n and the procuremen­t regulatory framework when required to do so”, to ensure that grant beneficiar­ies did not suffer.

Sassa CEO Thokozani Magwaza declined to comment, saying he was on sick leave.

Political analyst Ebrahim Fakir said the Treasury did not want to fall foul of the law, because the Constituti­onal Court had already made a ruling on this matter.

“What I would’ve hoped is that the Treasury would’ve worked with social developmen­t in order to refine the criteria, develop new criteria or say we can source the specificat­ions from elsewhere.

“But the real culprit here is the portfolio committee,” Fakir said.

The parliament­ary portfolio Maxime Holder, chairman of Paul Internatio­nal, at the opening of an outlet of the French chain of bakery-cafés in Melrose, Johannesbu­rg committee, which has oversight over the department, ought to have been asking questions all along, especially after the judgment by the Constituti­onal Court. “Yet we can’t see any evidence of the portfolio committee trying to intervene, either to ask questions about fixing the process or finding a new service provider or developing new criteria of what a service provider should do,” he said.

“It’s basically a breakdown of effective democratic government. If we can’t trust these guys to run an ordinary department why should we trust them with radical economic transforma­tion? They’ll just mess it up,” Fakir said.

The Treasury’s move on Friday came after a week of bungling by Sassa.

BusinessLi­ve reported that the applicatio­n lodged by Magwaza regarding the payment of social grants was not authorised by the acting CEO or the social developmen­t minister, leading to it being withdrawn, according to fresh papers filed by the agency at the Constituti­onal Court on Thursday.

Magwaza had filed the urgent applicatio­n earlier this week, asking the court to allow Sassa to enter into another year-long contract with CPS See Page 5 so that it could continue to pay social grants come April 1.

However, less than 24 hours afterwards, the applicatio­n was withdrawn. Social Developmen­t

If we can’t trust these guys to run a department, why should we trust them with radical transforma­tion? What I would’ve hoped is that the Treasury would’ve worked with social developmen­t to refine the criteria

Minister Bathabile Dlamini and acting Sassa CEO Thamo Mzobe have not lodged a new applicatio­n with the court, but have sent a “follow-up report”.

In the report, Dlamini and Mzobe said they were not consulted before Magwaza lodged the applicatio­n.

Also this week, Sassa officials admitted in parliament that it had no alternativ­e but to extend Net1 subsidiary CPS’s contract. — Additional reporting by BusinessLi­ve

See Pages 2 and 10

 ?? Picture: SIZWE NDINGANE ??
Picture: SIZWE NDINGANE

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