Thursday, 24 October 2024 | Cape Town
Honorable Speaker, Honorable Members of Parliament, and Fellow South Africans,
Today, I stand before you to address a matter of utmost importance: Fraud and Corruption and the impact it has on the income security of our most vulnerable citizens, who rely on social grants as their primary source of income to make ends meet. We are tasked with the important mandate of ensuring that, through the South African Social Security Agency (SASSA), to stand in the gap to protect these grants and ensure that they reach their intended beneficiaries.
Chairperson and compatriots, before I delve to the SASSA issues, I would like to share some information from the South African Banking Risk Information Centre, which has highlighted the loss experienced by the banking system in 2023, in this year alone South Africa lost almost 3.3 Billion Rands from fraud committed by cyber criminals and identity theft. The same report indicates that arm robbery for the state institution has gone down by 41% in the same year because SASSA has moved the payment from pay point to the banking sector.
Honorable members I am highlighting this report to show the inconsistences in the way we use language when it comes to the Private sector compared to Public entities. We need to stop the grand standing and creating the impression that when you talk about the corruption and fraud exposed in the SASSA system to the public eye, they will thing is the officials who are fraudulent and corrupt. We also need to give credit where it is due, let us equally celebrate the decision to switch to the banking cards for our beneficiaries. We need to use this opportunity to educate our citizens to be vigilant and be wise on issues of identity theft and fraudulent use of their information.
Chairperson, the social grants programme is our government’s largest and most successful anti-poverty interventions, covering a total of 28 million beneficiaries. This success has been recognized the world over, and has even won international awards from prestigious institutions such as the International Social Security Association, which commands a membership of 320 social security institutions from 120 countries across the world.
With a budget of R266 billion paid into the accounts of vulnerable older persons, children and persons with disabilities, we understand the important role we play in staving off poverty and hunger among our people.
The SRD grant makes up R35 billion of the total allocation, and covers an average of 8 million working age adults each month.
Advancements in Social Grants over the Last 30 Years
Over the past three decades, South Africa has made significant strides in establishing and expanding its social grant system. From the early days of democracy, our government recognized the critical need to support those who are most vulnerable in our society. Social grants have become a lifeline for millions of South Africans, providing essential financial support to the elderly, children, and people with disabilities; and in recent years, working age individuals who are unable to secure income from employment.
The introduction of the Child Support Grant in 1998 marked a pivotal moment in our social security landscape. This grant has grown to support over 12 million children, ensuring that they have access to basic necessities and opportunities for a better future. Similarly, the Old Age Pension and Disability Grant have provided dignity and financial stability to millions of our senior citizens and persons with disabilities.
The Importance of Social Grants
Social grants are not merely financial handouts; they are a fundamental constitutional right, and a foundational component of our social safety net. They play a crucial role in reducing poverty and inequality, ensuring that all South Africans have the opportunity to live with dignity. For many households, social grants are the primary source of income, enabling them to meet basic needs such as food, shelter, and healthcare.
Moreover, social grants have a multiplier effect on the economy. By providing financial support to the most vulnerable, we stimulate local economies as recipients spend their grants on goods and services within their communities. This, in turn, supports small businesses and creates jobs, contributing to overall economic growth.
Background and History of the COVID-19 SRD Grant
The COVID-19 pandemic brought unprecedented challenges to our nation, exacerbating existing inequalities and pushing many more South Africans into poverty. In response, the government introduced the COVID-19 Social Relief of Distress (SRD) grant. This temporary measure was designed to provide immediate financial assistance to those who lost their livelihoods due to the pandemic. Because of its successful implementation, and the positive lifelince it provides to millions of unemployed adults, government has continued to extend it each year.
Because of the need to contain the pandemic through lockdown provisions, the implementation of the SRD grant required the rapid adoption of digital technologies in an unprecedented manner to be able to reach millions of individuals in the shortest space of time. While its speed of implementation remains unparalleled in the history of social security provision anywhere else in the world, it has not come without it challenges. It was a steep learning curve for both SASSA and those needing the grant, exposing the Agency to new areas of vulnerabilities and what we’ve seen in recent years, identity theft of many who are in need of the grant. These challenges have underscored the need for robust systems and stringent oversight to ensure that social grants reach their intended recipients.
Challenges and Lessons Learned
The administration of the COVID-19 SRD grant revealed several critical lessons. Firstly, it emphasized the importance of leveraging technology to improve access, efficiency and transparency in the distribution of social grants. However, this also opened the Agency up to vulnerabilities in our systems that could be exploited by fraudsters and cybercriminals.
Secondly, it highlighted the need for better collaboration between various government departments and agencies, through data sharing and consistent communication. Lastly, it has highlighted the need for increased vigilance and agility within the Department to ensure that we can respond with agility and pre-emptive speed to prevent any leakage in the social grant system.
Fraud vs. Corruption: Understanding the Difference
It is essential to distinguish between fraud and corruption as we address these issues. Fraud involves deceit or trickery to gain an unfair advantage, often for personal gain. It is not only a crime against those that have had their identity stolen but also a crime against the agency and government.
Corruption, on the other hand, involves the abuse of power by those in positions of authority for personal benefit.
Both are detrimental to the integrity of our social security system and must be addressed with equal vigour.
Commitment to Addressing Corruption and Fraud
Honorable Members, I stand before you with a firm commitment to ensure that any corruption within SASSA will be dealt with decisively. We will implement stringent measures to detect, prevent, and punish corrupt activities. This includes enhancing our oversight mechanisms, increasing transparency, and holding accountable those who abuse their positions of power.
Furthermore, we will leave no stone unturned in our efforts to combat fraud against the agency. We’ve already made investments in advanced technologies and data analytics to detect fraudulent activities and will continue to strengthen these to be able to act more swiftly. We will also strengthen our collaboration with law enforcement agencies to ensure that those who commit fraud are brought to justice. SASSA fully supports sting operations conducted by SAPS and the National Credit regulator; the Fusion Centre set up by the Presidency which consists of the Financial Intelligence, the National Prosecuting Authority, SAPS and DPSA.
Furthermore, SASSA is strengthening its Anti-Fraud and Corruption Implementation Plan that is built on the foundation of SASSA’s Fraud Prevention Strategy. This strategy provides clear and detailed procedures to address control deficiencies and outlines specific activities and the personnel responsible for their execution. The plan is designed to ensure that all measures are in place to protect the integrity of our social grant system.
The plan is structured around four key pillars: Prevention, Detection, Investigation, and Resolution.
- Prevention: This pillar focuses on reducing the likelihood of fraud occurring through sound policies, managing conflicts of interest, continuous anti-fraud and corruption awareness campaigns, and fostering an ethical culture within the agency. Key activities include financial disclosures, lifestyle reviews, and the implementation of a beneficiary biometrics system to mitigate the risk of grant fraud.
- Detection: Early detection measures are crucial for identifying the presence of fraud and corruption. This includes internal and external audits, reports from whistleblowers, and self-reporting mechanisms. The plan emphasizes the importance of maintaining a corruption database and implementing robust whistle-blowing and reporting mechanisms.
- Investigation: Upon the occurrence or suspicion of fraud, thorough investigations are conducted. These investigations aim to implement consequence management measures, which may involve law enforcement agencies where appropriate. The plan highlights the need for cooperation with other agencies and the strengthening of our investigation capacity.
- Resolution: Post-investigation activities focus on hearing the matter and issuing findings. It is essential for the institution to recover losses suffered and take disciplinary actions based on the findings from internal investigations. Matters may be resolved internally or referred to courts of law for criminal prosecution.
In addition to these measures, I wish to report that the Department has now taken steps to finalise the establishment of the Inspectorate for Social Assistance during this financial year. We view this as a critical institution to strengthen our capacity to conduct robust, comprehensive and invasive investigations to tackle the sophisticated fraud syndicates and collaborate more closely with other law enforcement agencies to speed up prosecutions.
Protecting the Integrity of Social Grants
Protecting the integrity of our social grant system is not just a matter of financial prudence; it is a moral imperative. Every rand lost to fraud or corruption is a rand stolen from the pockets of our most vulnerable citizens. It is a betrayal of the trust that the people of South Africa have placed in us as their representatives.
We must ensure that social grants are distributed fairly and efficiently, reaching those who need them most. This requires a commitment to transparency, accountability, and continuous improvement in our systems and processes. We must also foster a culture of integrity within the Department and within SASSA, where employees are dedicated to serving the public with honesty and diligence.
Conclusion
In conclusion, while we have made significant progress in expanding our social grant system over the past 30 years, we must remain vigilant in protecting these vital resources from fraud and corruption. The COVID-19 SRD grant has taught us valuable lessons, and we are committed to applying these lessons to improve our systems and safeguard the welfare of our most vulnerable citizens.
As a social development family, we take the view that every grant beneficiary who is denied their grant because of any weakness in our systems is one beneficiary too many. We therefore urge every South African to work with us to build a more transparent, accountable, and efficient social security system that truly serves the needs of all South Africans. Let us handle these matters with the delicate hands it deserves it is the only entity we have that protects our ordinary citizens from sleeping without food at night. I would like to thank the members of the house and especially the members of the Portfolio Committee and Chairperson for the guidance and oversight they providing to the DSD portfolio
Thank you.