Many NGOs have already gone two months without salaries, food or enough money to meet their basic requirements. Perhaps it would be ironic if it weren’t so tragic.
It is May, the month when non-governmental organisations (NGOs) and non-profit organisations (NPOs) in the welfare sector have come to dread. It isn’t just because it is getting colder, but because May is the month when the Department of Social Development’s almost unbelievable inability to do its job affects them most.
The department outsources the majority of its direct care for vulnerable children, the disabled, the aged, as well as its Early Childhood Development (ECD) functions to non-profits and NGOs. Its role in the equation is to financially support these crucial services. To achieve this, the department has to renegotiate and sign Service Level Agreements (SLAs) with these organisations prior to the beginning of the government’s new financial year on 1 April. Although this role is crucial, and the paper work involved intensive, it doesn’t appear to be complex. Yet, it is a task which the department seems incapable of completing before the set deadline.
The consequences for the department are non-existent; it is not penalised in any way for its lack of performance. But the consequences for the NPOs are cataclysmic. Without an SLA, the department won’t pay a subsidy. Last year, multiple Child and Youth Care Centres (CYCCs) and homes for the aged and disabled in provinces like Gauteng and the Eastern Cape were brought to the brink of ruin.
Bethany House, a CYCC in Krugersdorp, continued operations only thanks to the kindness of the community, and Child Welfare in East London closed down briefly until public pressure and outrage forced the department to intervene and ensure that it reopened.
As May 2018 draws to a close, it seems that the picture is uncannily similar. Already the Benoni Child Welfare has closed its doors after not receiving a subsidy in April or May. According to the director, most of the Child Welfares in Gauteng have not been paid this financial year.
The aged have also been affected, with Ebenhaeser Old Age Home not able to pay salaries for their staff or fund meals and electricity for residents. In the mental health sector, Takalani Home for the mentally disabled in Soweto is also publicly struggling to care for its residents. The home, which was left bankrupt during the Life Esidimeni scandal that ended the lives of some of its residents, has warned that it may run out of food this week.
The situation is equally dire in some other provinces. In North West, a strike by the Department of Social Development, which has been ongoing since January 2018, has resulted in the SLA process being massively delayed. Even department employees who want to assist struggling NGOs have been hampered because they cannot access their offices during working hours.
All business plan applications for provincial funding for the 2018/19 financial year have been negatively affected, and social workers in North West face another month-end without contracts or salaries.
In the Eastern Cape, the department is also lagging behind the process of signing SLAs and securing subsidies (for no stated reason). Social workers in the Eastern Cape report that this has been the final nail in the coffin of the beleaguered East London Child Welfare branch, which after a 10-month reprieve finally closed its doors in April 2018.
Even when the process does run smoothly, there are troubling inconsistencies across provinces and regions. One national organisation explained that in some areas, the department places an advertisement calling for applications by NGOs to obtain an SLA. These NGOs are then required to attend a compulsory briefing session to qualify to apply. The NGO receives an application at that session, with a deadline and submission date. If an organisation misses the advert or the briefing, or submits their application a bit late, they will not qualify for that year.
In some instances, the award of funding happens at a very late stage, which then leads to delays in the finalisation of the SLA. In practice, this means that NGOs continue to render the service, but get paid later. More established NGOs with stronger financial sustainability and cash flow can carry these losses, but smaller organisations struggle to pay salaries and continue operations.
Nor is this process consistent. Other provinces do not apply this type of procurement process. Instead, they work in accordance with the PFMA. The department informs the NGOs that are already receiving funding when they have to submit their application. It also enters into multi-year contracts to optimise the SLA process. This explains the inconsistencies across provinces and why there are countless problems in some, but none in others.
Undoubtedly, the worst affected this year is Gauteng. And, while there appears to be no word from the national department about the challenges, as the non-payment of subsidies has again brought negative publicity to the department, the MEC for Social Development in Gauteng has come out swinging.
In a series of press releases, she explained that the problems with payments were due to NPOs’ non-compliance with the NPO Act. She stated that she had been in consultation with the NPOs and had explained that the department was tightening up requirements for NPOs to ensure that there would not be a repeat of the Life Esidimeni tragedy.
As a reference, she quoted the Premier’s State of the Province address in which he said:
“Learning from the tragic death of mental health patients, I have decided to implement a wide-ranging inspection and condition assessment of all centres that care for the most vulnerable – the elderly, people with disabilities and children – whether they are run by the public sector, private sector, NGOs or non-profit organisations”.
The MEC further explained that the vetting was necessary, but that they were doing everything possible to expedite the process to avoid distress to the most vulnerable, and were prepared to offer a six-month period of grace to get the NPOs compliant with the Act.
Some NGOs question both the MEC’s statement about consultation, indicating that not all NGOs were included, and the validity of the new policies (which many believe overstep the requirements of the NPO Act).
But, to the department’s credit, it is apparently prioritising the cases of most pressing need (or for the more cynically minded, the NGOs receiving the most publicity), including Ebehaeser and Child Welfare.
Behind the apparent quest for efficiencies, justifications for delays and active communication though is a troubling reality, which is that any changes to process should have been communicated and implemented prior to February, and that all SLAs should have been signed by the beginning of March if the department was ever going to pay subsidies in time.
In fact, the timing challenge is even greater this year because time lines (which have always been roughly the same) are now more stringent because of Treasury’s CDS (Central Database for Suppliers) system. There is a mandatory 30-day wait between signature of an SLA and payment. For this reason, even if the concern is compliance, the burning question is, why would the department only be consulting in May and highlighting these issues now, months after they should have finished the signing of SLAs for the year? Citing vetting seems a poor excuse given that these requirements for compliance were certainly not unexpected.
So while the Gauteng department appears to show genuine concern for the vulnerable, it is hopelessly behind with the SLA process. By its own admission, as of the end of May (three months after what should have been the deadline), it had only signed 85% of its anticipated 2369 SLAs (2029), and submitted just 1,284 (slightly over 50%) to Finance for payment.
The MEC’s projection is that the rest will be completed within the next four weeks, a full three months into the new financial year. And this is where the disconnect between concern for the defenceless, and practical application, breaks down, because most NPOs simply don’t have three months’ buffer to shield them from the non-payment of subsidies, or the department’s inefficiencies (nor is it an operational requirement for them to have such a buffer).
Regardless of the MEC’s explanation for the delays (and her strategy of blaming the NGOs), surely the validity of the department’s concern that those being cared for by NGOs are not put at risk, and its resultant compliance strategy, is massively undermined by its inability to carry out the strategy before the deadline for SLAs to be signed (before the end of the last financial year). The only likely outcome now, one which is already being played out, is that the vulnerable are exposed to hunger, cold, and lack of care, because employees cannot get to work or are forced to leave because their salaries aren’t paid, and insecurity. In 2017 it was a tragedy, but after Life Esidimeni, it looks more like criminal neglect.
Ultimately, the Gauteng government’s goal of tightening up processes and controls to avoid future tragedies may be a successful one. But its execution was ill-conceived, and the results could already be disastrous.
Even more bewildering is why the DSD hasn’t changed its processes to make them less labour intensive and more achievable for its staff complement. Striking employees in provinces like North West are clearly leveraging the NGOs’ plight to try to achieve their negotiation goals, but there can be no beneficial reason for advertising for SLAs, for setting effective NGOs up for failure, or for negotiating SLAs annually. Multi-year agreements, relationship managers who can maintain an ongoing relationship with successful NGOs, and a more efficient deadline-driven SLA process is essential if (and it is a big if), the government actually wants NGOs to succeed.
If that is the goal, then there is no current indication of will on the part of the DSD. So, for now, peaceful protests by affected NGOs and the opposition parties will continue, and the DSD in turn will continue with its slow, painful vetting process and blusteringly justifying payments being three (or possibly more) months late.
After months of subsidy non-payment, NGOs will once again have to rely on the kindness of communities to keep their doors open. Or they won’t, and yet more will close down, leaving the most vulnerable members of our communities even more exposed. With Life Esidimeni still looming large, it isn’t really ironic, it’s just tragic. DM