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KZN social development department tried to ‘cushion’ NPO budgets in previous years, now it’s cutting funding

KZN social development department tried to ‘cushion’ NPO budgets in previous years, now it’s cutting funding
Amid budget cuts, NPOs end up relying on funds from donors, which can also create instability, they say. (Photo: EPA / Nic Bothma)

The KwaZulu-Natal department of social development is aware that nonprofit organisations say they can’t meet vulnerable children’s basic needs due to funding cuts, but National Treasury budget cuts leave it no choice.

KwaZulu-Natal nonprofit organisations (NPOs) say they’re desperate after the provincial department of social development (DSD) cut the budget for transfers and subsidies to NPOs from R755.49-million in 2023/24 to R695.67-million in 2024/25.

Mandy de Sousa, who runs the Durban Child and Youth Care Centre, which provides care for orphans, neglected and destitute children and is based in Glenwood, Durban, said the DSD has been inconsistent with subsidy payments for the past two years.

“The difficulty is always trying to get a clear sense of what is going on from the department. Communication is very sparse. They have structures in place that are not effective but insist we use it and it makes it frustrating when you have concerns or need to have anything addressed,” she said.

Read more in Daily Maverick: Gauteng, KZN non-profits sound future funding alarm after Social Development budget cuts

De Sousa said the inconsistencies make it hard to plan ahead as NPOs only find out about the funds they will receive during not before the financial year.

The KZN DSD has started paying NPOs in three-month tranches, rather than for the whole year, which De Sousa said put a centre like hers at a disadvantage as the number of children they look after fluctuates due to the nature of their work. The average number of children at the Durban Child and Youth Care Centre is 74.

She says they end up relying on funds from donors, which can also create instability.

“At the end of the day, real lives are affected: 74 children need to be fed, they have to be taken to schools, they have to be taken to clinics and hospitals, they have to have access to psychiatric services,” De Sousa said.

The KZN DSD is funding 1,292 NPOs this year, 92 more than last year. Funding cuts have affected all NPOs, with some receiving cuts to administration costs while others have reduced the number of beneficiaries they serve.

The department has cut varying percentages of funding from NPOs depending on their needs and how much they received, the highest being 10%, which is for organisations receiving more than R500,000 a year. 

In a written response to Daily Maverick, the KZN DSD said: “The department has been affected by budget cuts implemented by National Treasury, hence NPOs allocation has been reduced. The budget cuts started about three years ago and the NPOs have been cushioned.” 

“In [the] 2024/25 financial year the department’s budget could not be able to provide that [cushioning]. The department is concerned about this, however no additional funds [were] received from Provincial Treasury to close these gaps as they also don’t have additional funds.”

The department said it wanted to prevent unemployment in the sector, but some NPOs reported that they have had to reduce their operations due to cuts in state funding.

KZN DSD spokesperson Mhlabunzima Memela said the budget cuts were being made across all government departments and have been ongoing since 2019.

Memela said the department will be more hands-on in helping organisations spend funds more effectively while also improving monitoring as there have been cases of fraud within the sector that have cost the department billions.

“It’s very important to protect the public funds. There have been measures in place to ensure that NPOs account for every cent they use in the public purse. They are also being trained on how to handle public funds. The government introduced more stringent measures (in the new Sector Level Agreements and Sector Funding Policy) to ensure best value for money when it comes to the work done,” said Memela. 

Read more in Daily Maverick: Western Cape NPOs sound alarm on impacts of social development budget cuts on the vulnerable

Yvonne van der Galien, who runs Rehoboth Children’s Village, just past Port Shepstone, said: “Our centre has houses, so since they cut us down by 10 children, that means a house mother (guardian) will work less hours or we have to let her go. So it will affect jobs.”

NPO directors working in the Ugu District Municipality said vulnerable children in their area are now being placed in government facilities in Durban, or even further away from their homes, since the KZN DSD has cut the number of children who are funded in different organisations. 

The department said there are 70 child and youth care centres throughout the province and seven are state-owned facilities that always have space for children.

“The facilities are all open to accommodate children from all the districts. All new admissions that cannot be accommodated in Ugu will be accommodated in other facilities.

“Children that were sent to eThekwini in the previous year were sent due to other reasons and not budget cuts. All currently admitted children with valid court orders will not be affected by the budget cuts,” the department said.

Service-level agreements

NPO leaders also questioned why the department had apparently rushed them to sign new service-level agreements (SLAs) before the new financial year on 1 April. They said the previous SLAs were valid until the 2025 financial year. 

Some of the NPOs under the NPO network are yet to sign the new SLAs in the hope of renegotiating, and some are still preparing documentation required by the department. Most organisations Daily Maverick spoke to received the agreements with new budgets on or after 19 March, before the beginning of the new financial year on 1 April.

The DSD said: “The new SLA supersedes all previous editions and addenda. The department is in continuous communication with the NPOs in writing and also holding briefing sessions per district.

“All queries raised during briefing sessions are addressed at the briefing sessions, and written queries are responded to as they are received by the department. The department is open to providing clarification where needed.”

Daily Maverick attended the first briefing about the new SLAs in Pietermaritzburg in late March. Julie Todd, leader of the Non-Profit Sector Network, said she felt the department was not acting in good faith.

“They still are not answering the questions posed to them and all of their modus operandi is in direct contrast to the yet-to-be-implemented Sector Funding Policy, which they base their actions on,” she said.

De Sousa said the lack of communication and budget cuts violate children’s rights by hindering access to essential services.

“Children come to us because they have been subjected to sometimes horrific abuse. It’s unfortunate that we experience an environment where our ‘partner’ places us in a position where we have no option but to violate those children’s rights,” she said.

“Children have the right to education; if there is no money to get them to school then their right to education gets violated.”

In response to concerns raised about the lack of communication, the DSD referred to its district briefing sessions with the head of department.

Responding to claims that children’s rights are at risk, the department noted its past efforts to cushion NPOs’ subsidies and current severe financial constraints. DM

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