Ending corrupt contract is not enough, OUTA tells Services SETA

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30/09/2019 11:44:08

Ending corrupt contract is not enough, OUTA tells Services SETA

The Services SETA has finally dumped the business it used to pay learner stipends for two years.

The Organisation Undoing Tax Abuse (OUTA) believes this isn’t enough and wants the Services SETA (SSETA) to reclaim the money that was paid to the contractor, Grayson Reed Consulting, as much of it appears to have been diverted from learners to corrupt recipients.

“We trust that this decision by SSETA will attempt to eradicate the unfair treatment of disadvantaged learners who have often not received their stipends,” said Dominique Msibi, OUTA Portfolio Manager for Education, in a letter to the SSETA. She said OUTA welcomed the SSETA decision to move away from Grayson Reed after OUTA raised serious concerns with SSETA about this contract in November last year.

Msibi asked SSETA to explain what remedial action it was taking against Grayson Reed. She pointed out that any omission by SSETA to take the appropriate action would be financial misconduct in terms of the Public Finance Management Act.

The SSETA decision to end the Grayson Reed arrangement emerged in a letter to stakeholders.

The SSETA told stakeholders that the learner stipend payment process would change in September, so payments would be made directly by the SETA rather than by a contractor. “The Services SETA conducted an in-depth analysis of the stipend payment system and processes and has decided to currently bring the management of learner attendance and the payment of stipends in-house whilst looking for a permanent solution on the matter,” said the Services SETA CEO Amanda Buzo-Gqoboka in the letter to stakeholders dated 5 September.

In January 2019, OUTA submitted a request to the SSETA for documentation relating to the Grayson Reed contract. This request was made in terms of the Promotion of Access to Information Act (PAIA) but the SSETA failed to provide the information, claiming that Grayson Reed had objected to this. OUTA appealed against this decision (an internal appeal to SSETA in terms of PAIA procedure) but SSETA failed to respond, effectively dismissing the appeal.

OUTA is now considering legal action against the SSETA over this refusal.

In November 2018, OUTA exposed the SSETA arrangement with Grayson Reed, which appears to have been structured to loot SSETA funds which should have been used for learner stipend payments and the procurement of Biometric systems. The 29-month contract started in November 2017, runs to March 2020 and is worth at least R162 million.

Learners have been complaining to OUTA that they were not receiving their stipends from Grayson Reed.

At the time, OUTA called for the immediate suspension of the Grayson Reed contract, for an independent investigation into this matter and for learners to be reimbursed missing stipends.

The OUTA letter of 27 September to the Services SETA is here.

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