Into Thin Air: Thousands of SA’s most vulnerable at risk as NGOs’ subsidies subside

by | Child Protection Legislation & Child Rights

At the end of April, thousands of NGOs across South Africa failed to receive their government subsidies. As winter sets in, these custodians of the country’s most vulnerable, including children, the elderly and the disabled, have an anxious wait to see if, and when, the Department of Social Development will pay the money. And all the while, the department’s litany of financial abuses keeps growing, and the minister remains defiantly unaccountable.

This year, 2017, will be remembered as the year of the Department of Social Development’s self-induced crises. First SassaGate, then an ugly social workers’ strike, and now, the mass non-payment of subsidies to NGOs running residential homes for vulnerable children, the elderly and the disabled; critical community support services, and even creches.

The work of welfare in South Africa is overwhelmingly carried out by NGOs, rather than government facilities. So, the scope and impact of this crisis could be immense, both in terms of human suffering and potential loss. But although this calamity (like the others) was self-induced and therefore both foreseeable and preventable, the department seems paralysed and unable (or unwilling) to respond.

Perhaps it is to be expected. In the week when the NGOs discovered that their subsidies had not been paid, the Minister of Social Development and her deputy were both absent from Parliament, again, and the news broke of yet another disgraceful wastage of social development money. It is indicative of a leadership crisis that has left thousands of NGOs across the country wondering if they will be able to continue providing food, warmth and shelter to those in their care.

The hapless NGOs are the unwitting victims of a “perfect storm” that began as far back as August 2015 when the department failed to negotiate with Nehawu following the union’s demands for changes to wages and workload. It was a costly miscalculation. The union finally lost patience with the department in February 2017, just as the Sassa crisis was breaking, and at the most critical stage in the department’s planning cycle.

At the time, the department was about to begin its annual process of negotiating tens of thousands of service level agreements (SLAs) with the NGOs it subsidises to care for vulnerable communities on its behalf. Knowing that failure to secure the SLAs (which involved the lengthy process of reviewing budgets with each NGO and then signing off an annual SLA with the NGO’s board) would result in the department not being able to pay subsidies for the new financial year, the union called a strike. It was a cynical act, designed and timed for maximum impact.

Nehawu’s general secretary confirmed the strategy in an interview in early April: “All that we know is that our members are on strike. The intention of a strike is to affect services so the employer can present what would be acceptable. It’s up to those NGOs to speak to the department to resolve any outstanding issues.”

According to the department, strikers went one step further, not only delaying the signing of SLAs but also disrupting the process by “tearing all the signed and concluded SLAs”. By choosing to strike in March, the unions effectively gave the department three options: negotiate quickly, make a contingency plan, or risk the calamity of tens of thousands of NGOs going without funds at the end of April. Where the unions may have miscalculated, though, was the belief that the NGOs would be able to put pressure on the department to negotiate (they couldn’t), or that the department would expedite the process to ensure that the NGOs received their subsidies (it didn’t).

As a crisis became inevitable, one spokesperson described the department as being “in panic mode”. But perplexingly, either through a lack of leadership or a vain attempt to try to achieve everything, negotiations dithered on until the second week of April. In the end, the department acceded to the union’s demands. But by that time it was too late to get the SLAs signed before the new financial year. The department undertook to “expedite” the process, and even promised the NGOs that all SLAs would all be signed by mid-April (an impossibility given when the strike ended), and all payments made at the end of April. But, given that SLAs were still being completed in the first week of May, it soon became clear to everyone (with the notable exception of some parts of the department) that payments would be late.

NGOs, with few or no financial reserves, faced the bleak prospect of having to “self-fund” the payment of April salaries. In addition, residential and ECD facilities have been forced to cover the cost of food, heating, petrol and all other items needed for the daily care of their charges until their subsidy is eventually paid (halfway through May, large numbers are still waiting). But, for a handful of NGOs, including Bethany House Trust which first drew the media’s attention to the non-payment crisis, the situation was even worse. These NGOs were responsible for “rescuing” and caring for children who had to be moved out of government institutions during the strike when social workers barricaded them into their homes without food or medical care. The NGOs have yet to be compensated for weeks of caring for these government charges, and “ironically” (there is certainly no humour in it), it was this act of mercy which brought several organisations to the edge of a precipice.

Finally, to add to the calamity in some provinces, April 2017 also saw provincial authorities introduce new financial codes which (apparently) could only be tested once the new financial year began on 1 April. In what the department rather euphemistically described as a “technical glitch”, the system (inexplicably, it seems) attempted to make four quarterly payments at once. According to the department, “capturing and testing of new financial codes in the payment system… led to the current glitches” and “the first payment run [in the] last week of April… was not successful.” The problem is ongoing. Even for those organisations whose SLAs had been ratified, the “glitch” has made automatic payments impossible.

Nonetheless, despite the technical problems and late signing of SLAs, the situation may have been salvageable had the department acted decisively and cohesively. It didn’t, and every province was left scrambling to make a plan. Some fared better than others. According to one NGO (which did not want to be named), they had very different experiences in Gauteng and the Western Cape. In the Western Cape they were notified by circular at the beginning of April that the system was changing and that the payments would have to be processed manually. Then on 2 May the provincial department apologised for the delay in making the payments and promised to pay them on the 3rd, which it did. Gauteng, by contrast, seemed to be in chaos.

According to Les Sanabria, the deputy chairperson of the Gauteng Social Services and Welfare Development Forum, the MEC for Social Development met with interested parties in late March to explain that because of the strike, the department would not get subsidies to organisations when the first tranche was due. The warning and the apology undoubtedly came too late for the NGOs to make adequate contingency plans (and without any time frames, they were unable to do so with any effectiveness). Nor did the department warn the NGOs of the compounding system problems. Instead, according to Gert Jonker from Bethany House Trust, they were told that the payment had been made. Then, when it didn’t appear in their accounts, and worried NGOs began to contact the department, they were told that they would be paid as soon as the technical glitch had been found, then that they would be paid manually, then on 9 May, and now on 17 May. Although a small number of payments have trickled through, scores of NGOs in Gauteng are still stuck in an anxious wait.

In the Eastern Cape the situation seems even worse. There, NGOs received no warning about a potential payment delay, and when the Eastern Cape NGO Coalition sent an urgent memorandum to Social Development MEC Nancy Sihlwayi and department head Stanley Khanyile asking them for answers, the memorandum was received and acknowledged, but no response was forthcoming. Concerningly, the rumour is that there is a political agenda governing the department’s actions. One NGO head is quoted as saying that they had “been told that department head had not finalised the subsidies because of internal politics at the department”.

The most troubling aspect of this crisis, which worsens every day payment is delayed, is the sheer number of organisations and vulnerable people affected.

In Gauteng alone, the department provides subsidies to 2,638 NGOs, including 101 children’s home and shelters, 72 residential facilities for the elderly, 30 residential homes for people with disabilities, and close to 1,500 ECD centres (creches).

NGOs also run shelters for women, in-patient facilities for people battling substance abuse, and hundreds of community programmes related to support for the elderly, HIV/ AIDS centres, poverty alleviation and youth development programmes, victim empowerment programmes for abused women and children, crime prevention programmes, home and community care programmes for the disabled, and family services. These are the organisations that are currently scrambling to secure loans, borrowing on their overdrafts, or living off the kindness of strangers while they struggle to keep their doors open. Given the critical nature of these services, and the vulnerability of the people they support, the department’s lack of action seems even more negligent.

All of which brings us full circle, to the minister. Even if we attribute this latest crisis to union manipulation, and the vicissitudes of technology; social welfare NGOs – who are effectively the department’s hands and feet – are increasingly experiencing hostility in their relationship with the minister and her team. And perhaps that is the most chilling part of the current crisis. Whether intentionally, or as an accidental consequence of serious incompetence and the department’s inability to make contingency plans, this crisis may force the closure of large numbers of those NGOs. If one missed payment resulted in children going to bed hungry, creches not functioning and the elderly huddling in unheated rooms, the potential cost of closure is devastating. And, by contrast, the department has neither the resources, the finances, the skills, nor (if truth be told) the inclination to provide those affected with adequate alternative care. The stakes are too high to avoid this reality any longer: the vulnerable are paying for the mistakes of the minister and her department. It cannot continue. DM

First published in the Daily Maverick: 17.05.2017

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