Sassa's spending splurge

The South African Social Security Agency splurged at least R50-million on consultants to help set up an in-house system to pay social grants.

The consultants, appointed by Social Development Minister Bathabile Dlamini, first advised the minister on how to implement the in-house system and then scored lucrative contracts to implement their own recommendations.

The contracts, ranging from R4-million to R35-million, were awarded without going out to tender.

The new details emerged as Sassa faces a potentially catastrophic threat to the payment of grants totalling R12-billion a month to more than 17million beneficiaries.

The agency is scrambling to come up with a solution before April 1, because its contract with Cash Paymaster Services expires at the end of next month. The Constitutional Court has ruled the contract is invalid.

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As the deadline looms, it has emerged that Dlamini rejected National Treasury proposals on how to pay the grants, which included appointing a service provider for cash-payment points and using the banks.

Sassa is preparing to approach the Constitutional Court this week to ask it to extend the CPS contract. Finance Minister Pravin Gordhan has told Dlamini he would not support such an extension unless it was approved by the court.

Documents seen by the Sunday Times detail how the consultants were part of a ministerial advisory committee set up in September 2013 which recommended that Dlamini and Sassa establish a series of "workstreams". These would handle information and business system management, human resources, banking services, local economic development and stakeholder management.

The advisory committee was set up in anticipation of the expiry of the agency's contract with CPS this year.

In May 2016, members of the committee were awarded tenders to carry out some of the work.

Rangewave Consulting, which is owned by Patrick Monyeki, who was part of the advisory committee, was awarded a R35-million contract to lead the information and business systems management workstream.

Another member of the advisory committee, Tankiso Parkies, was awarded a R4-million contract for the local economic development workstream, while Tim Sukazi was awarded the legislative and policy contract for just over R11-million. According to a senior government official these contracts were not put out on tender.

"Three service providers were appointed through deviation to prepare for Sassa to take over CPS functions. Those appointed were members of the ministerial task team, resulting in serious conflict of interest," said the official.

Social development spokeswoman Lumka Oliphant acknowledged Sassa had retained the three consultants.

"Some of the advisory committee members were retained as part of the institutional memory," she said. "We have not stopped the insourcing process, it is ongoing but we had underestimated the work that had to be done."

Monyeki, Parkies and Sukazi did not respond to requests for comment.

jikat@sundaytimes.co.za; sabaa@sundaytimes.co.za