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

Freedom Under Law (FUL) has welcomed the Constitutional Court order directing Cash Paymaster Services (CPS) and auditing firms KPMG and Mazars to provide financial statements and documents to verify the service provider’s profits.

FUL approached the apex court asking it to oversee compliance to a 2017 order directing the SA Social Security Agency (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 Constitutional Court, 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.

On Thursday, the Constitutional Courts 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.

Reacting to the judgment, FUL said: “The application was necessary because the court’s original auditing and verification, ordered at the time of the social grants crisis, was not properly complied with.

“Sassa’s auditors maintained they had not been granted full access to the working papers of CPS’s auditors and required further financial information relating to other entities within the network of companies of CPS’s parent company, Net1. However, even without full access, Sassa’s auditors estimated CPS may have understated its profits by approximately R800m.”

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