ConCourt orders CPS, KPMG, Mazars to provide financial statements for social grants contract

Cash Paymaster Services and auditing firms KPMG and Mazars have been ordered to produce financial statements relating to a contract with the SA Social Security Agency. File photo.
Cash Paymaster Services and auditing firms KPMG and Mazars have been ordered to produce financial statements relating to a contract with the SA Social Security Agency. File photo.
Image: South African Gov‏ via Twitter

The Constitutional Court has ordered Cash Paymaster Services (CPS), formerly hired by the SA Social Security Agency (Sassa) to pay social grants, and auditing firms KPMG and Mazars to provide financial statements and documents to verify the service provider’s profits.

The order comes after Freedom Under Law (FUL) approached the apex court asking it to oversee compliance to a 2017 order directing Sassa and CPS to ensure payment of social grants from April 2017 for a period of 12 months, by extending the contract awarded to CPS for the payment of social grants. The contract was declared invalid.

The order had imposed conditions, including that CPS file an audited statement of “expenses incurred, the income received and the net profit earned” and allowing RAiN Chartered Accountants, the auditors appointed by Sassa, free access to its financial statements to verify them for submission to national treasury for approval.

In the application before the ConCourt, FUL asked for an order compelling compliance with the conditions. It alleged CPS did not allow RAiN free access to its financial statements and that the verification report produced revealed CPS had under-declared its profits by about R800m.

FUL wanted the court to force CPS, KPMG Services and Mazars to furnish RAiN with outstanding documentation.

According to court papers, the parties declined to furnish RAiN with copies of the required documents.

None of the parties cited as respondents in the matter opposed the relief sought by FUL, except CPS which opposed the part concerning the determination and repayment of profits made by the company from the unlawful contract.

In its judgment, the ConCourt ordered that CPS, KPMG and Mazars furnish RAiN with documents in their possession within 15 days from the date of receipt of a list of outstanding documents.

It also ordered that RAiN submit, within 30 days, an updated verification report to national treasury.

“Within 20 days of receipt of the updated verification report, the National Treasury must allow Cash Paymaster Services and the SA Social Security Agency to make representations on the updated verification report, if they so wish,” the court ruled.

“Within 40 days of receipt of the updated verification report, the National Treasury must consider and approve the updated verification report and file its approval together with the updated verified report with the registrar of this court.”

The court deferred the portion of the relief that was opposed by CPS.

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