Sassa is on solid ground with R1.9bn surplus – spokesperson

The South African Social Security Agency (Sassa) denies its financial situation is precarious and that it was unlikely to be able to deliver services, including social security grants.

Sassa spokesperson Kgomoco Diseko said: “There is no way Sassa can fail to meet its obligations because Sassa obtained an unqualified audit opinion for the 2018-19 financial year as per the auditor-general [AG] report.”

This follows an article in The Citizen quoting an AG report tabled in the parliamentary portfolio committee on social development last week which stated that the department’s liabilities exceeded its assets and it might be unable to deliver services.

The report said Sassa was responsible for most of the fruitless, wasteful and irregular expenditure in the department.

The fruitless and wasteful expenditure increased from R2 million in 2017-18 to R78 million in 2018-19, which the AG attributed largely to Sassa paying contractors for services never delivered.

Diseko said that at the end of the 2018-19 financial year, the agency had a net accumulated surplus of about R1.9 billion.

“This was mainly as a result of savings amounting to approximately one billion rands realised through the government-to-government collaboration with SA Post Office, which took over the payment of grant monies.

“The cash and cash equivalents as recorded in the annual financial statements [2018/19] stands at about R1.9 billion. This is testimony that Sassa is a going concern and it’s impossible for it to go under or seek a treasury intervention.”

He said for the 2019-20 financial year, the budget allocation for grants was R175 billion, of which R89 million was spent by September 30. “This indicates that the department, through Sassa, will be able to pay grants timeously every month, as usual. There is no crisis at all.”

He said that of the R1.8 billion irregular expenditure reported in the annual financial statements, R67 million was incurred in 2018-19 and the balance of over R1.7 billion was from previous years. Of the R78 million fruitless expenditure last financial year, he said R74 million was a payment to Cash Paymaster Services, which Sassa was in the process of recovering.