SASSA Accuses Home Affairs of Role in R140-Million Payment Blunder

One of the huge mistakes made by the South African Social Security Agency (SASSA) has caused a humongous loss of more than R140 million. The error was caused by a delay in receiving official death notices from the Department of Home Affairs (DHA).

This has led SASSA to accidentally pay out 75,000 social grants to people who had already passed away within the course of one year.

The SASSA Blunder Unveiled

The problem was exposed last week during the presentation of the 2023/24 audit action plan to the Parliamentary portfolio committee on social development.

The SASSA CEO at the time, Busisiwe Mamela, who has since been suspended while an investigation is conducted, was responsible. The agency’s CFO, Tsakeriwa Chauke, was forced to account for the serious financial error during the meeting.

R140-Million Loss Explained

The main cause of this error is the timing of payment processing. Every month, SASSA creates payment files for social grants using the Social Pension (SOCPEN) database. When a beneficiary dies between the time the file was created and the date of payment, they will nevertheless be paid, although deceased.

This happened 75,000 times, at an overall cost to taxpayers of R140 million during one year. Interestingly, South Africa recorded 630,667 deaths in 2022, as reported by Stats SA. That translates to about 52,555 individuals dying each month.

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With 45% of South Africans on some social support, including SRD or core SASSA grants, only 25,277 deaths per month would be anticipated to align with the numbers from the grants, and this is a huge discrepancy.

A New System to Prevent Further Errors

In reaction to this persisting problem, CFO Tsakeriwa Chauke said that a new IT system would be piloted in April. The system will address the problem by allowing for the bulk recall of payments to beneficiaries who have been discovered to have passed away, based on the DHA’s death records.

Although SASSA is coordinated with the DHA, there is a weakness in the system: most of the citizens don’t report that a beneficiary died. Therefore, SASSA pays until the beneficiary doesn’t pick up the grant for three months.

In spite of all these issues, SASSA made some improvements in the lowering of irregular expenditures. The report indicated a reduction in such expenditure as a whole. For example, during 2018/19, the agency encountered an unimaginable R1.8 billion misappropriation, while by 2023/24, the amount was down to a mere R34.2 million. Chauke attributed the decrease to the enhanced oversight and the supply chain management training.

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

Although there has been an advance, SASSA’s audit report also revealed material irregularities, which include:

To deal with fraud concerns, acting CEO Temba Matlou said biometric verification will be implemented for all beneficiaries of the SRD grant in the coming financial year. Furthermore, SASSA is reconfiguring the rate-limiting function of the system to limit how many times the system may be queried, thereby stemming fraudulent behavior.

Even with these initiatives, there are still challenges being faced, including long queues at SASSA offices and a lack of staff. SASSA is recruiting more staff to help with this problem. Matlou also highlighted the need for online applications, which are being encouraged to make the process easier for beneficiaries when the offline queues get too long.

The SASSA mistake, which has seen R140 million paid out in excess benefits to dead claimants, illustrates major problems with the social security system. Even though the agency is trying to enhance its payment procedures and methods of preventing fraud, including biometric checks and piloting a new IT system, issues like staff shortages and long queues remain to plague its operations.

The new audit indicates an improvement in the agency’s fiscal management, but additional effort must be made to prevent such an expensive mistake from occurring again.