Multi-million-rand drug rehabs under investigation by Gauteng government

• Two of Life Healthcare’s rehab centres in Gauteng that received R124-million in 2022/23 from the provincial Department of Social Development are under investigation by it.
• Leaked documents show the decision to launch the fully government-funded centres was pushed through by officials even though the social development department could not afford it.
• This was at the same time that the centres — previously psychiatric facilities under Life Esidimeni also run by Life Healthcare but in partnership with the Gauteng health department — were closed for budget reasons, which led to the deaths of 144 patients.
• The department has not paid subsidies since the end of 2022/23, but Life Healthcare says it is continuing to fund the rehab centres itself “in advance of payments due” and in the interest of its patients.

Two large drug rehabilitation centres in Randfontein and Witpoort operated by Life Healthcare are under investigation by the Gauteng Department of Social Development, the department has confirmed to GroundUp.

The centres previously belonged to Life Esidimeni’s psychiatric facilities but were converted to drug rehabilitation centres between 2015 and 2016. They have 750 beds in their in-patient and halfway-house facilities.

Part of the department’s substance use programme, these flagship centres received R124-million in 2022/23 — more than 25% of the programme’s total budget that year. Other smaller facilities run by non-profit organisations were funded for far fewer beds, and each received between R1-million and R16-million in subsidies that year.

The Randfontein and Witpoort treatment centres were formerly branded under Life Esidimeni but were rebranded Life Nkanyisa.

The department has fully funded the centres since 2016, but last year did not renew its agreements because of “troubling findings” from an investigation launched by the department.

Department spokesperson Themba Gadebe declined to provide more details of the investigation, or the allegations faced by the centres, but indicated that these revolved around the large funding amounts the centres received.

Life Healthcare told GroundUp that it has cooperated with forensic auditors. Nkanyisa brand CEO Puseletso Jaure told GroundUp that the rehabilitation centres are still operating “irrespective of funding disruptions”, and that Life Healthcare is funding the centres itself “in advance of payments due”.

Since their launch in 2016, people in the sector and the provincial treasury raised concerns about their affordability and effectiveness.

Leaked documents seen by GroundUp reveal that the department approved budgets for the new centres in 2016 at short notice, even though the government could not afford it.

The Randfontein and Witpoort centres have a total of 606 beds for six-week in-patient detox programmes, and 144 beds for half-way house programmes.

Gadebe said the service-level agreement for 2023/24 was not signed by the head of department after questions were raised about the funding amount and an investigation was launched.

Gadebe said funding the centres stopped in 2023 and the centres will not receive funding in the 2024/25 financial year.

If the centres were to shut down, the province would lose almost half its state-funded beds for in-patient rehabilitation.

This will come on top of other corruption investigations by the department that have caused catastrophic delays in funding that have led to the closure of several organisations, including a rehabilitation facility in Boksburg run by the South African National Council for Alcoholism and Drug Addiction (SANCA).

SANCA’s Boksburg facility stopped taking in new patients and closed when the last patient was discharged. Some of the organisation’s other facilities have not been able to pay salaries for two months, said SANCA national coordinator Adrie Vermeulen.

Vermeulen said that only one of twelve SANCA facilities that applied for funding has heard back from the department, and a service-level agreement provided to one of the facilities erroneously described services not provided by the facility.

Unaffordable rehab centre

The Randfontein and Witpoort rehabilitation centres were previously psychiatric facilities under Life Esidimeni, also run by Life Healthcare but in partnership with the Gauteng Department of Health.

In October 2015, the health department announced the end of its partnership with Life Esidimeni, leading 1,500 vulnerable patients to be moved to unsuitable facilities and causing the deaths of 144 people.

In March 2016, while the Life Esidimeni’s psychiatric facilities were being shut down and patients were still being moved, the Gauteng Department of Social Development signed a service-level agreement with a newly formed non-profit organisation called Witpoort Treatment Centre, which would later be renamed Esidimeni Recovery Centre and today is called Nkanyisa Recovery Centre.

The service-level agreement was for the setup of a new drug rehabilitation centre in Witpoort, run by Life Esidimeni, at the site of Life Esidimeni’s Witpoort mental health facility.

In the first year, 2015/16, R14.4-million would be provided to the centre to fund 150 beds for in-patient rehabilitation, 44 beds in a half-way house, and an additional R750,000 for start-up costs.

On 21 June 2016 the department approved a budget for the drug rehabilitation centre in Randfontein: 181 beds for in-patient rehabilitation, 19 beds in a half-way house, and R2.8-million for startup costs. The total for the 2016/17 financial year was R23.2-million. The Randfontein centre would also fall under the organisation called Witpoort Treatment Centre.

According to internal departmental documents, the idea was that the budget would increase every year so that within three years, the centre would have 900 beds.

Leaked internal emails between department officials from 21 June (the day the budget was approved) show that they planned for patients to be in the new centre in only ten days, by 1 July.

The emails also indicate that from the outset the project was unaffordable for the department. In one email, a senior official writes: “This project was not planned but we are making means to implement it by using some allocation from the GCR [Gauteng City Region] anti-substance abuse and crime prevention budget. It is a massive project and would require serious reprioritisation of the budget but will keep you informed”.

Two days after these emails, the department announced to the media that they had partnered with Life Healthcare on the Randfontein Treatment Centre, which would be launched on 26 June.

The department then applied for more money from the Gauteng Treasury to fund its new campaign against substance use, which included the Randfontein Treatment Centre. The department asked for R69.3-million over three years to fund the 900 beds at the centre.

But a report by Gauteng Treasury, in response to the department’s application for more funds, noted that it was not convinced that “enough analysis and comparative evaluation” had been done to show that “this model is the best and is cost-effective”.

The Treasury report pointed out that according to the agreement with the service provider, the facility would “shut down and discontinue the services”, should the department fail to fund the services.

“Lessons may be learnt from the experience that Gauteng Department of Health had during the tenure of Life Esidimeni,” the report reads.

Already, the Randfontein Treatment Centre had stopped taking in new patients because of financial constraints.

“DSD has not fully considered risk issues when entering into this kind of an agreement,” the report reads. “Now that government has committed itself, there is a need to mitigate such risk, and that can only be through finding resources to open for more beds.”

A combination of injections from the Gauteng Treasury and budget reprioritisation within the department have enabled the Randfontein centre to keep operating. It never achieved the envisaged 900 beds; there are now 406 in-patient beds and 100 half-way house beds at the centre.

GroundUp understands that at least one of the senior department officials involved in the decision to fund the facility has been suspended in the past year.

But Gadebe was not forthcoming with more details on the outcome of the investigation or when it will be finalised.

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