Auditor-General says it did not recommend changes to the funding process
- Acting head of the Gauteng Department of Social Development Bongani Ngomane claimed in the High Court that drastic changes to its funding process for non-profit organisations was required after findings of "maladministration" by the Auditor-General.
- But the Auditor-General told GroundUp that no such findings were made regarding the non-profit sector.
- The changes have caused catastrophic funding delays, forcing some organisations to close their doors.
The Gauteng Department of Social Development claimed in the High Court that centralising control of its funding process for non-profit organisations by cutting out senior officials and appointing independent adjudication panels was necessary due to findings of "maladministration" by the Auditor-General.
This is one of several misleading statements made in an affidavit deposed by the department's acting head Bongani Ngomane and filed in response to a High Court application brought by concerned non-profit organisations on 22 May.
The new funding process has led to numerous mistakes and caused delays with devastating consequences for non-profit organisations, many of which have still not received subsidy payments almost two months into the new financial year.
The Auditor-General's spokesperson Afrika Boso told GroundUp that no findings or recommendations regarding the non-profit funding process have been made.
Yet Ngomane says in his affidavit, "The Department was required to revise its entire appointment process" after the Auditor-General had found that service-level agreements for funding amounts of more than R1-million had been approved in contravention of National Treasury Regulations "by officials not authorised to sign off such large amounts".
Boso says this is simply not true. "There is ... no finding on the signing of service level agreements with non-profit organisations valued at more than R1-million," he told GroundUp.
The only recommendations made by the Auditor-General in regards to the non-profit funding sector were that the monitoring and evaluation of organisations be improved, and that service-level agreements be "enhanced" to "strengthen governance controls", says Boso. But no complete overhaul of the funding process was required.
The Auditor-General's recommendations were made between 2018/19 and 2020/21. In 2022 a new funding protocol for non-profit organisations was adopted by the department, which relied on social workers to conduct site visits, after which senior officials deliberated and the head of department made the final decision.
But the changes implemented for the 2024/25 financial year are a dramatic departure from this protocol, removing social workers and senior officials from the process entirely.
External adjudication panels were appointed to assess funding applications. R15-million was diverted from a budget for dignity packs to fund the adjudication panels. As GroundUp reported on Tuesday, the department has not provided any details on who appointed the panels, how they were appointed, or how much members were paid. No report on the panel's findings has been made public.
Ngomane said in his affidavit that the previous process "lacked internal controls" and that there was "minimal segregation of duties resulting in the creation of a fertile environment for maladministration and fraud". Social workers adjudicated and evaluated proposals and signed off on service-level agreements "to the exclusion of the department's legal unit", Ngomane's affidavit said.
A source in the department who is familiar with the process has told GroundUp this is misleading as service-level agreements were always vetted by the department's risk unit, legal representatives and delegates from the provincial treasury. And adjudication panels from past years included not only social workers but also community development practitioners and delegates of the Chief Financial Officer.
Site visits previously conducted by social workers were this year done by people with no expertise in social work. Several sources reported to GroundUp that the people conducting site visits were part of the department's Nasi iSpani youth employment programme and simply worked off a checklist without doing any substantial inspections.
GroundUp understands from senior sources that the department's social workers were now being required to sign off on service-level agreements, but some are unwilling to do so because they have not been given access to the adjudication reports and had also not conducted site visits.
The department has repeatedly claimed that forensic audits into allegations of "corruption" in the non-profit sector have delayed the funding process.
Although there are instances of questionable multi-million-rand grants being made to some organisations, the department has not disclosed details of the investigations and those most affected by the funding delays are organisations providing essential services for vulnerable people.
GroundUp reported on Tuesday that some organisations have received letters informing them they will not receive funding for some of their programmes due to corruption investigations, while some of their other programmes will receive increased funding amounts.
Sign up for free AllAfrica Newsletters
Get the latest in African news delivered straight to your inbox
The Gauteng High Court ordered the department on 22 May to finalise service-level agreements with successful organisations by 30 May and to inform unsuccessful organisations of the reasons for their applications being rejected. Payments had to be made within seven days of the funding agreements being concluded.
On Tuesday, Gauteng Premier Panyaza Lesufi issued a media statement, announcing that payments for the first two quarters of the 2024/25 financial year would be paid to all compliant non-profits that had signed contracts in 2023/24. Payments for the last two quarters of the 2024/25 financial year would be paid only to organisations that had signed new service-level agreements.
This means the department will be paying organisations that were selected in the previous funding cycle for 2023/24, and buys the department time to fix the mess it has made of the 2024/25 adjudication process.
Lesufi's statement also said that his previous promise of paying organisations by 24 May was missed because the department was taken to court, but did not explain how the court order had affected the department's processes and caused further delays.
The department's spokesperson Themba Gadebe did not respond to questions sent to him a week ago.
