Gauteng Department of Social Development fudges reason for funding delays

The Gauteng Department of Social Development claimed it centralised its non-profit funding process because of findings by the Auditor-General. No such findings were made.

• The Gauteng Department of Social Development centralised its funding to welfare organisations this year, resulting in payment delays which left organisations in financial difficulty.
• The department claimed the centralisation was based on findings by the Auditor-General.
• But the Auditor-General’s office says no such findings were made.
• After GroundUp reported on this, the department acting head lied in a radio interview.

During an interview on SAFM on Monday, acting head of the Gauteng Department of Social Development, Bongani Ngomane, said the Auditor-General’s office had denied telling GroundUp that it had not recommended changes to the non-profit funding process.

But the Auditor-General’s spokesperson, Africa Boso, on Tuesday said the Auditor-General stands by its previous statements to GroundUp that no recommendation was made to revise the process.

The Gauteng Department of Social Development (DSD) had centralised the non-profit funding process this year, appointing external adjudicators to assess which organisations should receive a share of the department’s R1.8-billion budget for non-profit organisations.

This caused catastrophic delays in payments to organisations, forcing many to close their doors or scale down their services. The new process ultimately collapsed and many of the changes have now been reversed.

In May, the Gauteng Care Crisis Committee, a voluntary association representing more than 60 organisations, took the department to court to compel the department to pay organisations that have been successful in their applications.

This was almost two months into the new financial year, and hundreds of organisations had not yet received subsidies for the services they provide on behalf of the state.

In his responding affidavit in that court case, Ngomane stated the delays in payment were due to a centralisation of the funding process, which was necessary because of corruption and fraud in the department and in the non-profit sector.

Ngomane stated in his affidavit that drastic changes were made to the department’s non-profit funding process “pursuant to the findings of maladministration within the Department’s NPO funding process by various regulatory bodies such as the Auditor-General”.

He stated that “the findings of the AG concluded that some of the service-level agreements concluded [with organisations] contained the approval of large payments, in excess of one million rands, by officials not authorised to sign off such large amounts and that those approvals were in contravention of the National Treasury regulations.”

He stated that because of these findings, the “Department was required to revise its entire appointment process” of organisations.

But the Auditor-General’s statements show this is not true.

On 29 May, Boso, in response to GroundUp’s questions, said the Auditor-General had made no recommendations to revise the entire process.

Boso told us the only findings regarding non-profit organisations were related to monitoring and evaluation, which included refining the Service Level Agreements to improve monitoring and evaluation. But these findings date back to 2021. There were no findings related to the payments of R1-million signed off by officials, Boso said.

On Monday, during an interview with Stephen Grootes on SAFM, Ngomane said the Auditor-General had told the department that they distanced themselves from the spokesperson and his statements.

“You know when we met with the Auditor-General after that press statement, they denied that,” Ngomane said. “The Auditor-General, firstly they denied that the person who is quoted there is part of them. They said they don’t know that person … We might not have raised the issue in the way they raised it but they raised concerns concerning how the NPO processes in the department were managed.”

After Ngomane’s interview, GroundUp sent questions to the Auditor-General asking for clarity. “The Auditor-General of South Africa stands by the response to GroundUp on 28 May 2024 on the matter you are enquiring about,” Boso responded.

To date, the department has provided little evidence of widespread corruption and fraud to justify paralysing the sector in the first two months of the 2024/25 financial year. Of the 51 organisations that were flagged in forensic investigation, more than 34 have now been cleared. A handful of organisations remain under investigation, including eight organisations that have been referred to the Hawks, according to the department.

The Gauteng DSD did not respond to our questions.

Read More at GroundUp