Gauteng government bungles allocation of billions for non-profit organisations

• The Gauteng Department of Social Development made drastic changes to its funding process for non-profit organisations this year.
• The changes have led to catastrophic delays and serious mistakes have been made in the funding agreements.
• Site visits were conducted by youth “brigades” which organisations claim knew nothing about social work.
• The department’s claims that the changes were made to clamp down on corruption are unsubstantiated.

Changes to the Gauteng Department of Social Development’s process for funding non-profit organisations have had catastrophic consequences for organisations that provide essential social services in the province.

The provincial treasury initially allocated R1.9-billion for the organisations this year, but Premier Panyaza Lesufi increased the budget after pressure from organisations to R2.4-billion.

For this year’s funding process, the department decided to centralise control within the office of the head of department, cutting out regional officials and even senior provincial officials from the funding process.

Social workers were removed from the assessment process and external adjudication panels were appointed. These changes have caused a series of serious delays and mistakes.

As a result, many organisations have had to close or scale back services, including women’s shelters, disability organisations, and children’s homes.

External adjudication panels appointed to assess funding applications were funded with R15-million diverted from a budget for dignity packs.

The department has not provided any details on who appointed the panels, how they were appointed, or how much the members were paid. No report on the panel’s findings has been made public.

Member of the Provincial Legislature Refiloe N’tsheke (DA) asked social development MEC Mbali Hlophe in the provincial parliament on 16 April for details on the adjudication panels, but the MEC did not answer the questions, saying she was ill.

Several senior sources in the department told GroundUp that the panel met at the Capital Hotel in Rosebank to discuss their decisions. GroundUp asked the department why the meeting took place at a hotel and not at a departmental office, but received no response.

Site visits previously conducted by social workers to organisations that applied for funding were this year conducted by “youth brigades” from the department’s Nasi iSpaniyouth employment programme, several sources told GroundUp.

They said the “brigades” lacked knowledge of what they were doing and some only spent a few minutes at the site before moving on.

The “brigades” also worked off a new funding checklist, which included municipal compliance documents that were never previously required.

The manager of one child and youth care centre told GroundUp that they were visited by someone “who knew absolutely nothing about social work”.

“He came to the admin office with a checklist … and made no attempt to go into the centre to look at the facilities,” the person said.

Some organisations that have received service-level agreements in the past few weeks have reported mistakes in their agreement documents, including incorrect funding amounts.

At least one organisation’s business plans have been lost by the department.

An organisation, which asked not to be named for fear of this affecting their chances of funding, said it at first received an agreement for R300,000. But it had only applied for about R160,000 for the year, in line with what it had previously received. A few weeks later, it received a second version of the agreement with a funding amount of R400,000. The organisation did not receive any site visits during the funding process.

At least three organisations received letters from the department saying they were under investigation for corruption, but they were not told what the allegations are.

Several organisations, ostensibly “under investigation” for corruption, have been denied funding for some of their programmes, despite having received funding for decades and having received funding agreements this year for other programmes they run.

One organisation, which runs shelters for women who need a safe haven from dangerous and abusive domestic situations, was told that their women’s shelter programme will not be funded because of the investigation. And yet another of its programmes, relating to crime diversion, was funded with millions of rands, almost double what it had expected to spend.

Meanwhile, the department’s social workers were calling, asking if they had space in their shelters, said the director of the organisation.

Organisations also took issue with a new clause in the agreements requiring 70% of the funds to be spent on salaries and 30% on operational costs. In previous years, organisations could spend up to 80% on salaries.

Gauteng Premier Panyaza Lesufi had told organisations that this clause would be suspended, but Thoko Budaza, director of People Against Woman Abuse, said they received a service-level agreement on Monday containing the controversial clause.

Chantell Venter, who manages Remme Los, a self-help centre for quadriplegics and paraplegics, says they were told by department officials that the business plans it submitted had been lost. Because of this, the centre has not received a service-level agreement for its residential programme.

The Gauteng Care Crisis Committee, a voluntary organisation representing more than 60 organisations, was granted an order by the Gauteng High Court last week compelling the department to finalise service-level agreements with successful organisations by 30 May, and to inform unsuccessful organisations of the reasons for their applications being rejected.

Claims of clamping down on corruption

The department has on several occasions said that “troubling findings” have been made by forensic auditors who are investigating “corruption” and “maladministration” in the department’s allocation of funding to non-profits. Thirteen officials have been suspended thus far, although details of the reasons for their suspensions have not been disclosed.

Acting head of the department Bongani Ngomane said in a recent court affidavitthat the changes were due to findings of “maladministration” by the Auditor-General.

But the Auditor-General’s spokesperson, Africa Boso, told GroundUp that no findings were made regarding the non-profit grant process and that the Auditor-General did not recommend for the “entire appointment process” to be revised. The only findings on the non-profit sector related to monitoring and evaluation of how organisations were spending their money between 2018/19 and 2020/21. No other findings have been made.

The delays to the funding process were not unreasonable, Ngomane argued in his affidavit, because of the ongoing corruption investigations. He said that the finalisation of service-level agreements had now been delegated to the department’s legal services department. The use of electronic signature software had also caused delays, he said.

Ngomane said delays were further exacerbated by the departure of Head of Department Matilda Gasela, whose contract came to an end in April. Even though the end of the contract should have been known about by the department, the MEC and the Gauteng Premier, they were left scrambling in early May to appoint an acting Head of Department.

Gasela had been appointed to head the department in 2023, despite an SIU investigation recommending her criminal prosecution for fraud allegations dating to her time at the Department of Agriculture.

The Gauteng Department of Social Development did not respond to questions sent to spokesperson Themba Gadebe last week Thursday.

Published originally on GroundUp.

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