Biometric cards to beat social grant fraud

14 June 2012

South Africa has begun rolling out a new biometric card to social grant beneficiaries that will cut down on fraud and corruption in the country’s grants system, improve on the delivery of grants, and reduce the costs involved in making payouts.

Between June and December, the South African Social Security Agency (SASSA) will hand out the new, branded, biometric magstripe cards to grant holders, replacing the current Sekulula cards.

The biometric cards will also replace temporary smart cards that social grant beneficiaries in Gauteng, Western Cape, the southern part of the Eastern Cape, Mpumalanga and Free State – provinces which don’t use the current service provider – have been using since March.

The first phase of the project, which began in March and ended in May, saw new beneficiaries being enrolled onto the new system.

Second phase under way

The second phase, which began this month and will end in December, will see existing eligible beneficiaries, including bank beneficiaries and children, being enrolled on to the new system at SASSA pay points, local offices and designated sites.

SASSA will conduct home visits to those older than 75 years old as well as for bedridden beneficiaries at their homes and institutions such as hospitals.

Beneficiaries of the child support grant will be required to bring their babies, along with their birth certificates, for re-registration. The child’s fingerprints will be taken to verify his or her identity. Beneficiaries will then be issued with a SASSA-branded smart card.

The new cards, and the verification process attached to the issuing of the cards, will help SASSA to reduce the incidence of fraud and corruption, over which Auditor-General Terence Nombembe has repeatedly raised concern.

A 2008 report by the Institute of Security Studies estimated that before the commencement of investigations by the Special Investigating Unit (SIU) in 2006, the government had been losing about R1.5-billion a year through corruption and the maladministration of social grants.

The risk of fraud and corruption is ever more important, with the 15.7-million social grant beneficiaries registered as of 30 April this year expected to grow to 16.8-million in three years.

Progress in reducing fraudulent beneficiaries

However, in recent years, SASSA has made several advances in reducing the incidence of fraudulent grant beneficiaries.

Between 2006 and March 2012, the SIU was able to prosecute 20 554 people for fraud and corruption relating to grants, which resulted in 17 880 convictions.

In all, 46 237 individuals who have been incorrectly receiving social grants have signed acknowledgement of debts totaling R304.9-million.

Individuals that sign acknowledgement of debts, which has the effect of a civil court order, commit to repaying the money received in installments that are financially viable for them.

To this end, a total of 132 603 beneficiaries have been verified for eligibility and existence and 7 133 were found to be fraudulent.

Kgomoco Diseko, SASSA’s senior manager: media relations, said grants paid to the 7 133 beneficiaries who defrauded the system had been cancelled and criminal charges had also been brought against them.

Monitoring irregular practices by employees, public

SASSA has also successfully implemented its integrity model, which serves to address and monitor irregular practices by both its employees and the public.

Diseko says the integrity model represents a more proactive fraud management approach which encapsulates all aspects of fraud management, namely prevention, detection, investigation and resolution.

“Its emphasis is on regulating the behavior of staff, while improving systems and processes,” Diseko says. “The greatest feature of the model is the integrity policy, which allows the agency to conduct random checks on its high risk employees to determine their level of integrity.”

The agency is also participating in anti-corruption forums driven by the Department of Home Affairs.

The Department of Social Development will also be setting up an inspectorate to help the department weed out fraud.

R30-million anti-fraud inspectorate to be set up

Social Development Minister Bathabile Dlamini said in her budget vote in May that R30-million had been allocated to set up an inspectorate, which is expected to be up and running by 2015.

Also in May, Dlamini told Parliament that an Inspectorate Establishment Framework had been developed, as well as the Inspectorate Programme Management Unit structure comprising various functional work streams.

“The process to recruit specialists and work stream project managers is at an advanced stage,” Dlamini said.

She said the inspectorate unit was currently in the process to commission various research projects, and had prioritised the Comprehensive Legislation Review Project as well as the Systems Integrity Evaluation baseline study.

“This will enable office to determine the actual levels of fraud and misconduct and help to project savings for the South African Social Security Agency, once the Inspectorate is fully legislated and adequately resourced to commence with the execution of its investigative mandate,” Dlamini said.

Over R104-million in fraudulent grants recovered

Marika Muller, the SIU’s acting head of communications, says that since the SIU’s investigation into the SASSA began in April 2005, the unit has helped the government recover over R104.6-million.

She says the SIU is still collecting an average of over R2.3-million a month in cash repayments from those who claimed grants irregularly.

The SIU has recommended to SASSA that it remove all improperly received grants, involving savings to the government (and the taxpayer) of over R1-billion, and the prevention of future losses of over R11.8-billion.

Three types of wrongful beneficiary

Muller says individuals receiving grants to which they are not entitled generally fall into three categories. These include individuals who have been found to have purposely lied about their income, employment status and or state of health in order to receive grants.

They also include individuals who initially qualified to receive a grant, but then saw an improvement in their financial status which generally disqualified them from receiving grants.

In many cases these individuals do not notify the SASSA of this change in status in order for their grant to be stopped; in some cases, they are not aware they needed to do so, says Muller.

Finally, there are individuals who are receiving social grants as a result of errors in the process.

Muller says that in the first category of individuals – those who purposely lied about details to gain access to grants – the SIU concludes initial investigations before handing the cases over to the SAPS for a decision on further action.

Criminal charges, she explains, are also laid in instances where individuals had gone more than 12 months without notifying SASSA of their change in circumstances.

“A decision was made with SASSA and other role players that criminal charges would not be laid against individuals who did not understand the reporting obligation, or who erroneously received grants as a result of process errors.

“These individuals are, however, required to pay back the money they were not entitled to, either in a lump sum or installments through an AoD (acknowledgement of debt),” says Muller.

Biometric cards to save R800-million a year

There are also other benefits to the new biometric cards. For instance, the new smart cards will allow beneficiaries to access grants through multiple channels across the country, such as points of sale, banks, merchants and cash pay points.

Dlamini said in her budget vote speech that the new payment system would help the government save R800-million a year.

The new system provides for a service fee of R16.44, totaling R2-billion collectively in fees a year – R800-million less than the total fees generated by the former service provider.

However, the former service provider, All Pay, has launched a court bid to have the current contract, run by Cash Paymaster Services, set aside, alleging irregularities in the tender process.

The Legal Resources Centre has joined the case as an amicus curiae over concern that the court action may disrupt the disbursement of grants and SASSA’s verification process.

Sarah Sephton a lawyer from the Legal Resources Centre, says Judge Elias Matojane had assured the court that interim processes would be considered should a ruling be made to halt the tender.

In 2000, Sephton assisted thousands of grant beneficiaries in the Eastern Cape in a class action case against then minister of social development, Zola Skweyiya, after a botched verification process, intended to consolidate grant beneficiaries from the former homelands of the Transkei and the Ciskei and old Cape Province, resulted in thousands not being able to obtain disability grants.

However, SASSA had assured Sephton that there would be no disruption in the disbursement of grants with the current verification process.

Source: BuaNews