R140 million gone: SASSA’s shocking blunder exposes major flaws

In a startling revelation, the South African Social Security Agency (SASSA) has blamed the Department of Home Affairs (DHA) for a bureaucratic failure that led to a staggering R140 million being paid to deceased beneficiaries.

According to GroundUp, the debacle, which saw 75,000 payments mistakenly processed over a year, highlights severe flaws in the country’s social grant system.

The issue came to light last week during a parliamentary portfolio committee meeting on social development, where SASSA presented its 2023/24 audit action plan. Suspended CEO Busisiwe Mamela, who was in charge at the time, is now under investigation, while current SASSA CFO Tsakeriwa Chauke was left to explain the costly error.

How did The SASSA Blunder happen?

Chauke pointed to a crucial timing flaw in the payment system. Each month, SASSA generates a list of payments through its Social Pension (SOCPEN) database. However, if a beneficiary passes away between the generation of the payment file and the actual disbursement, their grant is still processed. This happened 75,000 times, shockingly, draining R140 million from the public purse.

Considering that Stats SA recorded 630,667 deaths in 2022—an average of 52,555 per month—the expectation would be that a fraction of those deaths would impact SASSA’s system. However, with only 25,277 social grant beneficiaries estimated to die monthly, the scale of the error suggests severe inefficiencies in tracking and updating records.

Fixing the system

To prevent future blunders, SASSA is set to roll out a new IT system in April, which will allow for bulk recalls of payments made to deceased beneficiaries based on DHA records. While SASSA’s database is technically synchronized with DHA, a major flaw remains: families do not always report deaths promptly. As it stands, a grant is only stopped after three months of non-collection.

Despite this glaring mismanagement, SASSA insists that irregular expenditure is decreasing. Back in 2018/19, the agency recorded R1.8 billion in misappropriated funds. By 2023/24, this figure had dropped to R34.2 million, a decline attributed to improved oversight and supply chain management training.

A history of financial mismanagement

The Auditor-General (AG) flagged several material irregularities in SASSA’s finances, including:

• R74 million paid to Cash Paymaster Services (CPS) in 2018 for services not rendered.
• R316 million in overpayments to CPS, which a court later ruled must be repaid.
• R150 million in fraudulent Social Relief of Distress (SRD) grant payments.
• R7.8 million spent on photocopy machines in the Eastern Cape under dubious circumstances.
• R1.7 million in fraudulent grant payments made to SASSA officials.

Will new measures work?

Acting CEO Temba Matlou has announced plans to introduce biometric verification for all SRD beneficiaries in the next financial year to combat fraud. Additionally, SASSA aims to strengthen system security by limiting the number of times a query can be made.

However, other long-standing issues remain. Long queues and staff shortages at SASSA offices continue to frustrate beneficiaries. While the agency is hiring more staff, Matlou urged applicants to use the online system—when it is operational—to ease congestion.