An incomplete beneficiary database ― allowing hundreds of millions of rand to be siphoned from state coffers ― is being flagged as a major concern by the Auditor-General of South Africa (Agsa) in parliament at a portfolio committee meeting on the department of social development.
The Agsa identified 73,664 beneficiaries who received grant payments from 2012 to 2025 without any of the relevant beneficiary files. A staggering R1.7bn in total was paid to them in 2024/25.
Senior Agsa manager Puleng Molapo on Wednesday briefed the portfolio committee on social development on the department’s audit outcomes. In attendance was social development minister Sisisi Tolashe, who faces increasing scrutiny over the department’s performance and reports lifting the veil on a R3m junket to New York.
“The department’s audit outcomes have regressed, while the outcomes of other entities within the portfolio remained stagnant. The overall impact for the portfolio audit outcomes is a regression. The department obtained qualified audit opinion with findings compared to prior years’ unqualified audit opinion with findings,” reads the report.
“The department spent 99.0% [R269bn] of its vote allocation, with 96.79% spent on social grants. While some improvements were noted in the controls within the grant management system, weaknesses persist, particularly relating to the incomplete beneficiary database.”
The report shows that despite spending almost 99% of its budget, the department achieved only 72% of its planned targets.
There is potential loss that the portfolios are actually suffering because if you continuously pay grants to ineligible people or people that should not be getting grants, it means that there’s a significant amount of money that we are losing from the fiscus
— Puleng Molapo, senior Agsa manager
“With regard to the issues surrounding the grants administration, there has been a slow response in terms of the implementation of the audit document recommendations that were issued in the previous year,” said Molapo. “Hence we see some of the similar issues that were identified in the previous years coming out in the current year.
“There is potential loss that the portfolios are actually suffering because if you continuously pay grants to ineligible people or people that should not be getting grants, it means that there’s a significant amount of money that we are losing from the fiscus.”
According to the presentation, in the previous year, the Agsa identified that:
- grants to the amount of R14m were paid to deceased beneficiaries;
- R231m was paid to beneficiaries who were also directors of companies according to the Companies and Intellectual Property Commission (CIPC) that are doing business with the state; and
- payments were also made to beneficiaries with invalid IDs.
The Agsa said material irregularities previously raised at Sassa had been resolved. It identified the root causes of these issues as:
- internal control deficiencies on the grants administration that went unaddressed;
- a lack of oversight over grants disbursement by the department;
- inadequate implementation of consequence management for poor performance and transgressions; and
- a lack of processes to review the annual performance report and confirm the validity, accuracy and completeness of reported achievements.
The report says the minister should implement the use of biometrics for employees and beneficiaries across all grant types to prevent fraudulent access. Sassa and the department were urged to use South African banks and the National Treasury to help them perform a means test on all beneficiaries receiving grants.
The department also briefed the portfolio committee on its annual report. Thandeka Ngcobo, CFO at the department, said they were concerned about the audit outcomes.
“This is a serious regression from the previous year’s audit outcome of an unqualified audit opinion with findings to a qualified audit opinion with findings,” she said.
She told the committee the department had adopted a framework to assist managers in “systematically identifying the underlying causes of audit findings and designing effective, corrective action plans to prevent recurrence”.
Sassa was “working very hard” to reduce the number of beneficiaries without files, she said, adding that the 73,000 figure represented 0.2% of active grant beneficiaries.
“We are not saying it is OK to pay beneficiaries without the files. Since the finding, Sassa has worked very hard. They’ve reduced those to about 32,000.”
There were also possible payments to CIPC directors that did business with the state. There are also beneficiaries who receive pensions and those who are government employees. Sassa is busy with the reviews on that to make sure this does not happen again
— Thandeka Ngcobo, CFO at the department
More than 11,000 missing files “were probably related to fraud”, said Ngcobo, adding that Sassa wrote to 12,000 beneficiaries to get an update on their status.
“Then there were also possible payments to CIPC directors that did business with the state. There are also beneficiaries who receive pensions and those who are government employees. Sassa is busy with the reviews on that to make sure this does not happen again.”
The department is planning to conduct a root-cause analysis, develop action plans and identify policy and system gaps, she said.
Tolashe thanked the department and its officials for their work. “The significant progress we have made for the year under review would not have been possible without the invaluable contribution [of officials]. We have made great strides by filling posts that have been vacant for an extended period,” she said.
These posts included the recent appointments of the director-general and the chief financial officer, she told the committee.
Sassa officials also briefed the committee on Wednesday.
The portfolio committee is expected to receive a briefing from the department on Thursday regarding media reports that R3m was spent on a controversial trip to New York earlier this year.
The department is also expected to brief the committee on suspensions and alleged irregular appointments of officials.
The National Development Agency will also table its annual report.
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