The Gauteng Department of Social Development (GDSD) provided R144-million to the Beauty Hub Academy, a nonprofit organisation, over seven years to train young beauticians and provide beauty services for older people. This makes it one of the department's highest-funded organisations, far exceeding the average subsidies for social welfare services for Gauteng's most vulnerable people. The funding was allocated to train 1,800 beauticians and hairdressers on campuses in Johannesburg, Tshwane, Carletonville, and at the Lenasia military base.
A 2024 forensic audit by FSG Africa found that money was transferred from the Beauty Hub Academy, a nonprofit organisation (NPO), to a private company with the same name, even though for-profit entities are not eligible for funding. The auditors also found that the academy's caterer, paid R8.4-million over three years, was owned by the daughter of one of the academy's directors. The forensic auditors recommended disciplinary action against four senior GDSD officials, but more than two years later, these disciplinary processes have still not been completed.
The audit findings led to the department discontinuing funding to the academy in the 2024/25 financial year. The department is supposed to make details about all the nonprofit organisations it funds available online, but it has not done so for years. A Promotion of Access to Information Act (Paia) application by GroundUp for details of Beauty Hub's funding, as well as details of all GDSD's funding of nonprofits from 2014 to 2024, was rejected. However, after an appeal in the Western Cape High Court, the documents were obtained.
The documents reveal that the Beauty Hub received R144-million between the 2017/18 and 2023/24 financial years, making it one of GDSD's highest-funded organisations. In 2017/18, the academy was given R14-million for 150 students. Funding increased almost every year, with the academy spending the next six years in the top 10 of department-funded organisations. By 2023/24, the academy had received R30-million for 500 students, making it the second-highest-funded organisation that year.
The academy also received funding under the department's Services to Older Persons programme for students to provide hair and beauty services at old age homes. Between 2017 and 2023, the academy received R14-million to provide services at old age homes. The funding contract with the department did not explain what the bungalows at the Lenasia campus would be used for. In 2020/21, the academy received about R464,000 to renovate bungalows, and another R663,000 for capital costs such as furniture, computers, and kitchen set-up.
The forensic auditors found that the department's leadership failed in its oversight of the academy's funding and recommended disciplinary action against four senior staff members. Officials approved multimillion-rand grants without investigating the viability of the funded projects. The auditors also found that the academy's governance was flawed, with conflict of interest, related party transactions, and violation of the NPO's own policies. Two of the academy's directors, Joel Nkomo and Daisy Gama, also held positions at the private company.
Despite the serious findings, the implicated officials are still on duty. Onkemetse Kabasia has since been made head of the KwaZulu-Natal Department of Social Development. The Hawks are investigating a 2019 forensic audit that implicated Kabasia, Themba Msimanga, and Mbali Ndlovu. The lack of transparency and accountability in the funding of nonprofit organisations by the GDSD raises concerns about the use of public funds and the effectiveness of oversight mechanisms.
Key points
- The Gauteng Department of Social Development provided R144-million to the Beauty Hub Academy over seven years, despite irregularities in funding and governance.
- A forensic audit found that money was transferred from the nonprofit organisation to a private company, and that there were conflicts of interest and related party transactions.
- The implicated officials, including senior GDSD officials and academy directors, are still on duty, despite recommendations for disciplinary action.
