Treasury held steadfast in Parliament on Tuesday when Finance Minister Pravin Gordhan insisted grants must be paid, but “in a legally and acceptable way”.
Gordhan briefed members of Parliament in the standing committee on public accounts on the ongoing social grants crisis.
He reminded members of Parliament that there was a balancing act between the payment of grants and doing it within legal prescripts.
A new contract with the current service provider responsible for the payment of grants, Cash Paymaster Services, would require a deviation from legal prescripts. Gordhan told MPs they received a request for this but treasury was “still applying its mind”.
Treasury has thus far made it clear it will not approve such deviation without the Constitutional Court’s go ahead. Yet Social Development Minister Bathabile Dlamini and the South Africa Social Security Agency (Sassa) made it clear that the Public Financial Management Act provides, in cases of emergency, for such a deviation from normal tender processes. Dlamini and the agency made it clear they did not need the Constitutional Court’s approval for this but would inform the court as a courtesy.
Gordhan told MPs a deviation from normal tender processes was allowed if a serious and unexpected situation, such as a natural disaster, arises. “Like an act of God,” he said.
Sassa has admitted in documents in the Constitutional Court that it already knew in April last year that it wouldn’t be ready to take over the payment of grants on April 1 this year. Opposition parties and treasury itself has referred to the situation as Sassa’s own self-inflicted crisis.
Sassa this week in court papers also admitted it knew in April last year already that it would not be ready to take over the payments of grants come April 1 2017. Gordhan also told MPs a deviation from legal prescripts was also allowed when only one service provider was able to do the job. In this case, the social security agency has shot down all other options because CPS, according to Sassa, is the only service provider that met the requirements of biometric testing – something Dlamini has been sticking to her guns about.
Gordhan confirmed to MPs that the treasury received an application to deviate from legal requirements, and “is applying its mind”.
Gordhan assured MPs: “We are doing everything in our power to ensure that grants are paid out on April 1 – but within the law. The question is what route to take.”
He was confident that grants would be paid come April 1.
The current contract expires on March 31.
Thokozani Magwaza, the social security agency’s chief executive, also attended the meeting and received applause from MPs welcoming him back.
Magwaza was on sick leave and missed last week’s Scopa meeting with Dlamini.
It was his second day back.
The meeting is still under way.