The decision by the South African Social Services Agency (Sassa) to oppose legal action by Corruption Watch over irregular expenditure incurred in 2015 for the re-registration of beneficiaries by Cash Paymaster Service (CPS) was deemed irrational by the agency, leading to its recent withdrawal from the case. CEO Thokozani Magwaza conceded as much to the Standing Committee on Public Accounts (Scopa) recently, giving assurance that Sassa would abide by whatever decision the court makes.

The CEO admitted that the R316-million transaction, entered into by his predecessor Virginia Pietersen and CPS, was “a thorn in their lives.” The payment was made in April 2015, soon after the wrap-up of a four-month re-registration programme that was meant to clean up the beneficiary database and enrol new beneficiaries.

Corruption Watch applied to the North Gauteng High Court later in 2015, citing irregularities in the decision to pay CPS the amount. The anti-corruption watchdog’s argument was that the original contract between Sassa and CPS already provides for the regular registration of beneficiaries, meaning that the re-registration should not have been deemed a new process that warrants its own costs. Sassa disagreed, and thus launched opposition to the Corruption Watch submission. However, this was not before the agency had asked National Treasury for a condonation of the expenditure. Although Treasury had agreed to the condonation, it later retracted this, in light of the court action.

In Sassa’s previous briefing of Scopa, in which the matter was also addressed, Magwaza had said that legal opinion sought by his office had advised that opposition of the charge was rational. “The last time we were here [in November 2016] we put forward the reasons why we felt that this amount has been a legal transaction, and there were questions that came from Scopa that prompted me to go back and relook into the information that was put in front of me.”

There were things that were glaring in the reports that were written, so he requested a legal opinion on what Sassa needed to do going forward.

“Legal counsel told us that it may not be prudent for you to carry on defending on this issue because there are things that are glaring that are written on to the contract. There is a legal opinion or advice that says it would be irrational for us to defend on something that in our own books is written in such a way that maybe we were not supposed to have done it.”

At the 16 May briefing, the IFP’s Mkhuleko Hlengwa demanded that Magwaza make available both legal opinions – the first which proposed the opposition to the case, as well as the second which proposed the withdrawal from opposing. “I’m going to assume that the decision to oppose must have been informed by some legal opinion, so I would like to get the one that informed the decision to oppose, and subsequently the one that informed the decision to withdraw…if there isn’t one, that will allow me to arrive at other conclusions.”

Magwaza committed to making all information available. Responding to a question by the DA’s Tim Brauteseth on whether or not Sassa would embark on an effort to recover the money from CPS if the court finds that the payment was illegal, Magwaza said Sassa would abide by whatever the court rules.