Gauteng government funds new drug rehab while defunding existing ones

The Gauteng Department of Social Development has pushed through R11-million in subsidies to a new drug rehabilitation centre even as existing facilities are defunded and facing closure.

• Within three weeks, the Gauteng social development department pushed through R11-million in subsidies for a new drug rehab run by Clinix Health Group in November 2023.
• Meanwhile, other drug rehabs run by non-profit organisations are being defunded because of ongoing investigations, but the organisations have not been told what allegations they face.
• The ease with which Clinix Foundation applied for funding contrasts sharply with the dysfunctional application process other non-profit organisations have had to endure.

While the Gauteng Department of Social Development has moved to defund non-profit drug rehabilitation centres in the province, it has pushed through R11-million in subsidies for a new facility. And while other non-profit organisations that were funded for years by the department have been struggling with catastrophic delays in service agreements and a dysfunctional application process for their subsidies, the new centre was approved in just three weeks.

Clinix Foundation, a new non-profit organisation linked to Clinix Health Group, received R11-million in funding for the last two quarters of 2023/24 for 119 beds.

Meanwhile, at least five non-profit drug rehabs, accounting for 246 of the province’s 571 state-funded beds, were recently notified that they will not receive funding for 2024/25 financial year because they are “under investigation”, but they were not told what the allegations are. The organisations now face closure.

The R11-million grant for Clinix Foundation was made at a time in which the department was changing its funding process for non-profit organisations and conducting forensic audits on organisations it had funded for years.

In September 2023, the department centralised control of the process within the office of the head of department, cutting out social workers and regional officials who would usually be a part of the adjudication process.

The department appointed independent adjudication panels to consider all non-profit grant applications for 2024/25. This, the department claimed, was because of findings of “maladministration” by the Auditor-General, but as GroundUp reported in May, the Auditor-General never made such findings.

The changes to the system have caused a series of delays and forced several organisations to close. But while other organisations have had to navigate the new dysfunctional application process, Clinix Foundation was approved for funding in the space of three weeks between October and November 2023.

Clinix Foundation was registered as a non-profit organisation on 10 October 2023, leaked documents reveal. Nine days later, it applied to be registered as an in-patient drug rehabilitation facility at Clinix Health Group’s hospital in Selby Park. Within the next eight days, it received all the necessary registration and compliance certificates from the Gauteng government.

On 31 October, Clinix Foundation applied for R16.2-million in funding for 119 in-patient beds, and R10.2-million for out-patient treatment of 350 patients per month. The applications included projected budgets for R36.7-million and R22.5-million for inpatient and outpatient treatment respectively for the 2024/25 financial year.

Three days later, on 3 November, service-level agreements were concluded with the department for the last two quarters of the 2023/24 financial year (October to March). The budget had been revised to R10.1-million for 119 in-patient beds and R980,000 for 200 out-patients per month.

Clinix Foundation facility manager Fabion Benett told GroundUp that it has not yet concluded a service-level agreement with the department for 2024/25.

The department followed a similar process in 2016 when it approved funding for a treatment centre run by Life Healthcare. Funding for the company’s treatment centres in Randfontein and Witpoort was pushed through by the department weeks before the launch of the centres.

Life Healthcare received R124-million in 2022/23 for 750 beds, while other organisations offering the same services were funded for far fewer beds, and received subsidies ranging between R1-million and R16-million.

Life Healthcare’s grant is now one of those the Gauteng department says is under investigation, and the centres have not received funding since 2023.

Department spokesperson Themba Gadebe told GroundUp that the decision to fund 119 beds at Clinix Foundation was “due to the demand for in-patient facilities in the province”.

Gadebe said the funding process for Clinix Foundation was “assessed and approved for funding in the same way other non-profit organisations are approved and funded”.

But non-profit organisations that applied for funding for the 2024/25 financial year have had to deal with a series of delays in the new, centralised funding process. Business plans were submitted in November 2023 and organisations only received feedback on their funding applications around May 2024.

Service-level agreements signed over the last few months have been riddled with errors. It appears that the process has now entirely collapsed, forcing the department to revert to last year’s service-level agreements for the first two quarters of the 2024/25 financial year.

GroundUp has spoken to dozens of non-profit organisations that have concluded service-level agreements with the department for 2024/25, but to date, none of them have been paid.

Several organisations, including five in-patient rehabilitation centres and a gender-based violence shelter, have been informed they are under investigation, but have not been told what allegations they face.

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