Social Development Minister Sisisi Tolashe has blamed the R4 billion underspending in the R350 Social Relief of Distress grant on a mismatch between projections and actual spending on the grants that were disbursed.
Social Development Minister Sisisi Tolashe has blamed the R4 billion underspending in the R350 Social Relief of Distress grant on a mismatch between projections and actual spending on the grants that were disbursed.
“There will be no consequence management that will be taken by the Department and South African Social Security Agency (Sassa) against officials as the underspending was a result of a mismatch between projections and actual spending.
“There is no wrongdoing by any official,” she said.
Tolashe made the statement when she was responding to EFF MP Mazwikayise Blose, who asked about underspending of R4 billion allocated for the social relief grant.
Blose enquired about the factors that led to the significant underspending and plans in place to ensure that underspending, especially for critical social support programmes like the social relief grant, will not occur in the future.
In her response, Tolashe said the budget allocated for social grants was based on estimations of the number of beneficiaries who will apply.
“These take into consideration various population demographics and economic trends of which Statistics South Africa is the main source. The projections are further refined with the use of historic administrative data,” she said.
The minister maintained that it was not possible that projections were 100% accurate.
“The department accepts that there could be as much as a 5% variance between the projection and the actual, especially if you rely purely on statistical data.
“However, in practice we’ve been able to come within 1% between the projection and actual,” she said.
The R350 grant was initially introduced for six months to support the unemployed during the outbreak of Covid-19 in 2020.
It has been extended several times and was increased by R20 in this year’s budget.
Tolashe said due to the R350 grant being issued for the first time, there was no administrative data available for the grant, and only statistical data could be used for projections.
“It’s generally accepted that statistical data is poor at the extremes of the income spectrum, that is very low incomes and very high incomes. Thus, in practice, the actual uptake of the grant was much less than what statistical data suggested,” she said.
“However, given that it was a new grant – the error rate on the projections only increased from around 1% to 2.7%, well within the current acceptable practice of 5%.”
She said due to the substantial size of the grants budget, a small error margin between projections and actual may appear alarming if the rand value is considered in isolation.
Tolashe said her department, the National Treasury and Sassa were collectively responsible for Social Assistance projections.
“No mismanagement of funds occurred. Projections were within acceptable levels of error.”
Tolashe explained that Sassa processing of grants was based on applications received against the qualifying criteria.
“Sassa does not have the leeway to adjust any of these to match available funds.
“If Sassa becomes aware of potential underspending it does not have the ability to change legislation, etc to enable more people to qualify. Similarly, the Department of Social Development, while able to amend legislation, is not a process that can happen within a short space of time.”
In his medium term budget policy statement, Finance Minister Enoch Godongwana rolled over R1.555 billion to fund outstanding social relief of distress grant payments from 2023-24.
Cape Times