Outcomes of outsourcing social grants payment services in the South African Social Security Agency's Ngaka Modiri Molema District

Abstract

The report evaluates the effects of outsourcing of the South African Social Security Agency (SASSA)'s social grants payment system to a private service provider. It seeks to determine whether the activities of the service provider in Ngaka Modiri Molema district comply with SASSA's objectives for adopting a single service provider to administer payment of social grants. The methods of analysis included SPSS 22 to help to quickly and easily find new insights into the data, chi square test of independence to compare observed data with data expected to be obtained according to the hypothesis and charts and tables for descriptive statistics purposes. The results of the data analysed show that SASSA did achieve its outsourcing objectives in that the service provider was able to compile the uniform database for all social grants beneficiaries, handling costs were reduced and services were improved. However due to SASSA's lack of capacity to monitor and oversee the outsourcing contract, new challenges, such as illegal deductions, emerged and dented the image of SASSA. As a result the study recommends, among others, the following; • SASSA should write down a realistic contract I Service Level Agreement (SLA) with clear milestones and deliverables • The new SLA must be drawn with the involvement or inputs from civil society or stakeholders to be impacted by it • The SLA must have suitable penalty regimes • SASSA must introduce new technology like it was done in the Brazilian system to deal with long queues and delays at pay points