A major error by the South African Social Security Agency (SASSA) has resulted in a staggering loss of over R140 million.
This blunder was attributed to delays in the delivery of official death registrations from the Department of Home Affairs (DHA).
As a consequence, SASSA mistakenly made 75,000 social grant payments to individuals who were already deceased over the span of a year.
The SASSA Blunder Unveiled
The issue was revealed last week during the 2023/24 audit action plan presentation to the Parliamentary portfolio committee on social development.
At the time, the SASSA CEO, Busisiwe Mamela, who has since been suspended pending an investigation, was in charge. The agency’s CFO Tsakeriwa Chauke was compelled to explain the grave financial mistake during the meeting.
R140-Million Loss Explained
The primary reason for this mistake lies in the payment processing timing. Each month, SASSA generates payment files for social grants through the Social Pension (SOCPEN) database.
If a beneficiary passes away between the file’s generation and the payment date, they will still receive a payment, even though they are deceased. This occurred 75,000 times, costing taxpayers R140 million in total over the course of a year.
Interestingly, South Africa saw 630,667 deaths in 2022, according to Stats SA. That means approximately 52,555 people died each month. With 45% of South Africans receiving some form of social support, including SRD or core SASSA grants, only 25,277 deaths per month were expected to match the figures from the grants, highlighting a major discrepancy.
A New System to Prevent Further Errors
In response to this ongoing issue, CFO Tsakeriwa Chauke mentioned that a new IT system would be tested in April. This system aims to solve the issue by enabling the bulk recall of payments to beneficiaries who are found to have died, using the DHA’s death records.
While SASSA is synchronized with the DHA, the system has a significant flaw: many citizens fail to report a beneficiary’s death. As a result, SASSA continues to make payments until the beneficiary fails to collect their grant for three months.
Despite these challenges, SASSA has made progress in reducing irregular expenditures. The report noted a decline in such expenditures overall. For instance, in 2018/19, the agency faced an unbelievable R1.8 billion misappropriation, whereas by 2023/24, the figure was reduced to just R34.2 million. Chauke credited the improved oversight and supply chain management training for this reduction.
Notable Irregularities in SASSA’s Financial Records
While there has been progress, SASSA’s audit report also identified material irregularities, including:
| Irregularity | Amount | Description |
|---|---|---|
| Payment to CPS | R74 million | Paid to Cash Paymaster Services (CPS) for services not rendered in 2018. |
| Overpayment to CPS | R316 million | Overpaid to CPS; the High Court ruled this should be repaid to SASSA. |
| Fraudulent SRD Grants | R150 million | Paid to ineligible applicants. |
| Photocopier Overpayment | R7.8 million | Paid for photocopy machines in Eastern Cape. |
| Fraudulent Payments to Officials | R1.7 million | Made to SASSA officials. |
Plans to Combat Fraud and Improve Service
To address concerns about fraud, acting CEO Temba Matlou stated that biometric verification would be introduced for all SRD grant beneficiaries in the next financial year. Additionally, SASSA is reconfiguring the system’s rate-limiting capabilities to reduce the number of times the system can be queried, thus curbing fraudulent activities.
Despite these efforts, there are still ongoing challenges, such as long queues at SASSA offices and staff shortages. SASSA is actively hiring additional staff to alleviate this issue.
Matlou also emphasized the importance of online applications, which are being promoted to streamline the process for beneficiaries, especially when the offline queues become too long.
The SASSA blunder, which resulted in R140 million in overpayments to deceased beneficiaries, highlights significant issues within the social security system.
Although the agency is working towards improving its payment processes and fraud prevention methods, such as implementing biometric verification and testing a new IT system, challenges such as staff shortages and long queues continue to hinder its operations.
The recent audit shows improvements in the agency’s financial oversight, but more work is needed to ensure such costly errors do not happen again.
FAQs
What caused the SASSA blunder?
The blunder occurred due to delays in receiving official death registrations from the Department of Home Affairs, which led to deceased beneficiaries still receiving payments.
How much money did the SASSA blunder cost?
The blunder cost the South African taxpayers R140 million over the course of a year.
What is being done to prevent future SASSA blunders?
SASSA plans to implement a new IT system that will allow for bulk recalls of payments based on the DHA’s death records and is also introducing biometric verification for SRD grant beneficiaries.
How is SASSA addressing the issue of long queues?
SASSA is actively hiring more staff to help reduce long queues at local offices and encourages beneficiaries to use online applications to streamline the process.