A post office to pay subsidies can put Sassa's finances under pressure

The panel, led by Auditor-General Kimi Makwetu, says that hiring the post office to pay cash subsidies may not be the most cost-efficient for Sassa.

FILE: Old and new Sassa cards. Image: OfficialSASSA / Twitter.

STADSHUIS – An expert panel appointed by the court is concerned about the fact that the South African Social Security Institution (Sassa) scheme could charge the agency's finance to the post office for paying scholarships.

This is because the actual costs of the takeover by the post office are unknown.

A transitional agreement set the price tag at R3, 2 billion, but the panel designated by the Constitutional Court to oversee the transition says it is concerned that none of the parties involved has carried out a detailed investigation into future costs and expenses. up to now.

In its eighth report to the Constitutional Court, the panel, under the direction of Auditor-General Kimi Makwetu, argues that hiring the post office to pay cash subsidies may not be the most cost-efficient for Sassa.

The post office must invest significantly in infrastructure to make the payments.

According to the panel, Sassa can save money by using service providers that already have the necessary infrastructure.

But a tender to invite bids from private companies to pay cash grants was canceled in March due to a legal challenge by one of the bidders.

The panel says it is also concerned that the costs of implementing the payments by Sapo are increasing. But it says that it can not properly estimate the cost implications because the post office has ignored its requests to provide detailed information on updated projections and capital costs.

According to the panel, Sassa and the post office should have drawn up a three-year budget to determine how it relates to the controversial payment providers CPS, which should be phased out at the end of September.

(Edited by Winnie Theletsane)

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