A 2023 forensic audit commissioned by the Gauteng Department of Social Development has revealed widespread problems with how the department appoints, funds, and monitors non-profit organisations. The audit, conducted by FSG Africa, investigated 46 social welfare organisations and found that the department was unable to properly monitor, evaluate, or support the organisations it funded. Officials often filed financial statements without reviewing them, and routine site visits were not conducted.
Despite the audit's main findings being related to problems within the department, dozens of organisations were defunded at the start of the 2024/25 financial year. Many of these organisations had been providing services to hundreds of vulnerable people. The investigators found that officials had a habit of "fiscal dumping," where they would scramble to spend their budget at the end of a quarter without following proper procurement processes.
The audit found that many organisations were running competently and providing essential services, but were still defunded. Some organisations received millions in extra funding through "fiscal dumping," which was later used as a reason to withdraw their funding. The investigations found minor issues that could have been easily rectified, but instead, the organisations were defunded. For example, one children's home had a fire escape blocked by a mattress and fire doors that weren't working properly.
The Gauteng Department of Social Development's actions have had severe consequences for the organisations and the people they serve. Kitso Lesedi Community Development was contracted to provide social services and food to a City of Tshwane-run homeless shelter, but funding was abruptly halted despite no serious issues being found with their services. The organisation eventually obtained a court order to recover its money, and the department has paid them back.
While some organisations had serious findings against them, further investigations were recommended. The Beauty Hub Academy was found to have channelled public funds to a private company run by its directors. Inqaba Yokulinda Youth Organisation (IYYO) was found to have reasonable suspicion of fraud and corruption over laptop procurement, but the organisation's director claims that the findings were unfounded and that they were not given adequate opportunity to respond.
The department's spokesperson, Motsamai Motlhaolwa, stated that some organisations, including Ratanda Old Age Home and Noma's Care Centre, which were found to be operating in unsatisfactory conditions, continued to receive funding. However, Motlhaolwa did not respond to questions about the current conditions at these organisations. The investigation highlights the need for greater oversight and accountability within the Gauteng Department of Social Development.
The forensic audit's findings have significant implications for the social welfare sector in Gauteng. The investigation's recommendations and the department's response will be crucial in determining the future of social welfare services in the province. The Gauteng Department of Social Development must take concrete steps to address the systemic issues identified in the audit and ensure that organisations are held accountable for their actions.
Key points
- Dozens of social welfare organisations in Gauteng were unfairly punished after a 2023 forensic audit found major problems with how the department appoints, funds and monitors non-profit organisations.
- The audit found that the department was unable to properly monitor, evaluate or support the organisations it funded, with officials often filing financial statements without reviewing them.
- Some organisations had serious findings against them, including the Beauty Hub Academy, which channelled public funds to a private company run by its directors.
