Each month, SASSA, the South African Social Security Agency, pays around 19 million old age, disability and child support grants. In its last audited figures, 99.98% landed in the right account, nine in ten new applications were decided within a week, and the whole operation cost 2.6 cents of every rand it moved.

It was not always like this, and how it changed is the argument here.

Ten years ago SASSA was a national scandal. In 2014, the Constitutional Court held its payment contract unlawful, and the agency could not replace the contractor. By 2017, companies working alongside the contractor were taking money off beneficiaries’ grants for airtime, funeral policies, and loans they had never agreed to.

So the Court did something it plainly hated doing. It ordered the unlawful contract to run for another year, because the only alternative was that millions of people received nothing at all. It put a panel of experts over the agency to supervise the work, and it ordered the minister responsible to pay a share of the legal costs personally.

What fixed it, in 2018, was removing the contractor. Payments moved into a ring-fenced state account that debit orders could not reach. What had gone wrong was a procurement. What fixed it was taking the procurement out.

Now read that 99.98% again. It measures whether money reached the account on the record, not whether the person on the record was entitled to it.

There, SASSA is not spotless. The Auditor-General told Parliament earlier this month that it paid R1.33 billion in the past year to people who weren’t entitled to it: government employees, pension fund members, and the deceased. Two years ago, two Stellenbosch students found something sharper in the R370 relief grant, the one channel SASSA built from nothing in 2020. Their own identity numbers had been used to apply, and SASSA had paid the money. The head of grant operations conceded at the time that there were “quite a lot of these cases”.

The answer was the 2018 move again. Every new applicant is now enrolled biometrically, and nearly a million have been since September last year. But just under 70,000 grants were suspended in a single quarter, and nobody can tell you how many were fraudsters and how many were pensioners who did not answer a letter. The fix works, and whoever is least equipped to argue with it pays for it.

The grant is also too small. A child support grant is R580 a month, and nobody who has tried to feed a child thinks that is enough. But that is arithmetic, not administration. Only about 8.3 million people pay personal income tax, less than 40% of what the state collects, and R432 billion of what it collects goes straight back out as interest on money already borrowed, more than the entire health budget. In 2008 that was nine cents in every rand collected. It is now twenty-one. The pot is small.

So hold a payment system that works next to a hospital out of linen, or a school still waiting for textbooks in March. How does the same state do both? The answer is the one SASSA already gave us. Treasury releases the money, and it arrives in a bank account. Nothing is bought along the way: no tender, no supplier, no official choosing between three quotes.

Everything else works the other way. A school doesn’t receive education; it receives a budget, and somebody has to buy desks, textbooks, and a plumber. A clinic receives a budget and has to buy gloves and medicine. A municipality doesn’t receive water; it receives a budget, and someone has to buy pipes and award the job of laying them.

Each is a purchase, and that’s where it goes wrong. Municipalities have run up R145 billion of irregular expenditure in four years, R40 billion of it in the past year alone, and the Auditor-General attributes 87% of that four-year total to broken procurement and contract rules. Not money going missing before it arrived. Money going wrong in the act of buying something.

One conclusion is wrong in an important way. Irregular expenditure is not theft. In the Auditor-General’s own words, it “does not necessarily mean that money had been wasted or that fraud had been committed”, and it covers a contract extended without the right signature as readily as a tender steered to a cousin.

But the opposite conclusion is worse, and it is the one a man with a calculator reaches for. Every number in this column is what was caught, not what happened.

The Auditor-General audits records. If a tender is properly advertised, adjudicated and documented, and the gloves cost two thousand rand instead of twenty, nothing in the office’s categories catches it. The process was followed. The goods arrived. It is neither irregular nor wasteful on paper, and it will never appear in the R9.17 billion the office estimates was actually lost.

That figure also misses the waste that is nobody’s crime. Municipalities ran up R6.36 billion in fruitless and wasteful expenditure in the past year, and 83% of it was interest and penalties for paying suppliers late. Not a cent of that was stolen. The state paid its bills slowly and was charged for the privilege.

Then there is the waste no category reaches at all. A burst pipe reported on a Wednesday and repaired on a Saturday at overtime rates. A job billed by the hour with no deadline, done by someone paid more the longer it takes. None of it breaks a rule. All of it costs money.

You can see the size of that in the municipal numbers. Last year local government lost R14.73 billion in water and R21.63 billion in electricity. Almost none of it is criminal. It is pipes, meters, billing and maintenance nobody got to. Together, it is four times what the office estimates was lost to material irregularity across national and provincial government.

The honest position is not that corruption is smaller than we think. It is that nobody can tell you how large it is, because the people best placed to do it understand the rules better than the rules understand them, and because the largest losses break no law at all.

Legal is not the same as right. A tender run properly at twenty times the price is lawful and indefensible. So is a four-day repair billed at weekend rates. Nobody will be charged for either, and both come out of the same pocket as a theft.

Which is why more money has never fixed this. Procurement is the only part of the state where a person decides what to buy, from whom and on what terms, and discretion is where theft hides, and waste accumulates. A bigger budget buys a larger version of the same problem.

None of which is cause for despair, because we have now done this twice. In 2018, we fixed the payments by removing the contractor. Last year we went after the fraud by taking out the need to trust a document. Neither fix caught a single thief. Both worked by removing a place where somebody had to be trusted, and both were judged on whether the money arrived rather than on whether the file was tidy.

We know what good looks like. We built it, and it reaches more people than anything else the state does.

So, in February, when the budget comes round, and we argue again about how much was stolen, remember that nobody can answer that question. Here is one that can be answered. We are good at paying and bad at buying, and the way out is not more money or more arrests. It is fewer things that have to be bought.

 

Yusuf Bodiat is a chartered accountant, certified director and former chief financial officer. He is the founder of Pragmatic Thinking, an independent strategic advisory firm, and serves as a non-executive director on several boards. He is the author of The Bottom Line: A CFO’s Blueprint for South Africa’s Turnaround, published in February 2026.