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OUTA

                 On 30 September 2022, more than four years later, Acting Public Protector Advocate Kholeka Gcaleka published a report upholding OUTA’s complaint and ordering the Hawks to investigate possible bid rigging and corruption by two businesses.SASSA Wasteful Expenditure

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OUTA INVESTIGATES SASSA WASTEFUL EXPENDITURE

Overview

In 2017 and 2018, OUTA submitted complaints to authorities about two huge contracts awarded by the state agency the South African Social Security Agency (SASSA). There was no action until, in October 2022, the Acting Public Protector upheld OUTA's complaint and ordered the Hawks to investigate and SASSA to take action against 11 implicated officials.

 

Outa is challenging the CPS because of misuse of beneficiary personal information to market products that are no related to grants; such as selling airtime and funeral policies; and corruption. Former Minister of Social Development and the South African Social Security Agency (Sassa) appears to have misrepresented many facts in order to keep the SASSA/CPS contract going. She created and appointed work streams to prepare SASSA to take over grant payments. This function was also being performed by SASSA internally, thus creating parallel working groups to achieve one goal. This is corruption and taking advantage of the poor and needy.


During 2017, whistleblowers provided OUTA with information about irregularities in two contracts which SASSA signed in 2016.

They are:

  1. SASSA 42/15/GA: Mikondzo event management services, run through outreach programmes. This was only a request for proposals for accreditation of service providers, but was awarded in July 2016 to Azande Consulting cc and Vee-el Promotions (Pty) Ltd, in a way which appears to have been designed to circumvent procurement procedures. Costs for this project are not clear. SASSA contracted Azande to provide food parcels for the Mikhondzo Project (a door-to-door food package distribution and survey company) to disadvantaged communities. The tender was irregularly awarded with a competing bidder coming in at a third of the price quoted by Azande. No service level agreement was reached nor were deliverables defined. According to records obtained by OUTA, there was no proof of food distribution.

  2. SASSA: 40/15/BT: An “Action Research Project” run as part of SASSA’s integrated community outreach programme (ICORP). Azande was the only one of 23 bidders not disqualified, with scoring which appears problematic. The final price agreed with Azande was R393 million, including VAT, and the contract was signed in July 2016.

The contracts were for three years, one for an unknown amount and the other for R393 million, and at least R221 million was spent on the first year of the contracts.

In 2017, OUTA was tipped off about irregularities in the 2016 contracts by whistleblowers.

In September 2017, OUTA compiled a report on what we found on the contracts, and sent it with a call for the contracts to be cancelled and request for action to: 

  • The Minister of Social Development, Bathabile Dlamini;

  • The acting Director General of Social Development, Nelisiwe Vilakazi;

  • The acting CEO of SASSA, Pearl Bhengu;

  • The Chief Procurement Office at the National Treasury;

  • The Standing Committee on Public Accounts (Scopa);

  • The Portfolio Committee on Social Development.

See OUTA's report and the annexures (part 1, part 2 and part 3).

As far as OUTA is aware, no action was taken by any of them.


OUTA complaint to the Public Protector: upheld, and action ordered

In June 2018, due to the lack of action by the authorities, OUTA submitted a complaint to the Public Protector.

This complaint was ignored by the Office under Advocate Busisiwe Mkhwebane.

On 30 September 2022, more than four years later, Acting Public Protector Advocate Kholeka Gcaleka published a report upholding OUTA’s complaint and ordering the Hawks to investigate possible bid rigging and corruption by two businesses.

The Public Protector’s report orders:

  • The Hawks to take note and consider conducting criminal investigation in terms of the Prevention and Combatting of Corrupt Activities Act for possible bid rigging and corruption linked to the two contracts;

  • The SASSA CEO to take action within 120 days against the 11 employees identified in the report as being implicated in not adhering to supply chain management policy and for breaching public service and Treasury regulations;

  • The SASSA CEO to take “appropriate action” in respect of Azande and Vee-el in terms of Public Finance Management Act rules within 120 days;

  • The SASSA CEO to ensure appropriate training for supply chain management officials within 120 days;

  • The SASSA CEO to “consider conducting lifestyle audits” on supply chain management staff to identify and combat illicit activities; and

  • The SASSA CEO to provide the Public Protector with an implementation plan within 30 days.

OUTA's complaint to the Public Protector is here.

The Public Protector’s Report, No. 26 of 2022/23, is available here.

 

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