According to a MoneyWeb report titled “How not to fix a corrupt and incompetent government”, the Gauteng Department of Social Development (GDSD) continues to struggle with funding delays, budget cuts and a series of forensic audits that have highlighted deep-seated corruption and administrative failure.
The department controls roughly R2 billion a year for non-profit organisations that run old-age homes, shelters for abused women, children’s homes, drug rehabilitation centres and soup kitchens. These organisations depend on the department for the bulk of their income, so any disruption to payments directly threatens the services they provide to the most vulnerable.
Forensic audits, investigations that look for illegal or irregular activity, have been ongoing for several years. A 2019 audit uncovered a corrupt relationship between senior officials and a handful of non-profit and private entities. One senior official, July Maphosa, was found to have irregularly paid at least R500 million between 2016 and 2018 to for-profit companies via non-profit intermediaries, some of which were linked to her personally. Law firm Bowmans and auditor BDO, working while Panyaza Lesufi was acting MEC, recommended blacklisting the implicated entities and referring them for criminal investigation. Despite those recommendations, no disciplinary action was taken and Maphosa resigned for “personal reasons”.
In 2022, MEC Mbali Hlophe revived the dormant reports, publicly condemning “dishonest NPOs” and promising to clean up the R2-billion non-profit funding pool. She commissioned a new forensic investigation by FSG Africa in 2023, covering 46 organisations, and announced the findings in the 2023 State of the Province address.
Implementation of the audit’s recommendations proved disastrous. At the start of the 2024/25 financial year, the department announced a R223 million cut to the non-profit budget, yet it had already signed contracts with more organisations than the reduced budget could support. Hlophe then centralised all funding decisions under department head Matilda Gasela, shutting down the previous region-based system. The change caused severe delays; Gasela left the department in April 2024 amid fraud accusations from her earlier tenure in agriculture.
By May 2024, 51 organisations were told they would not receive funding for the year, despite having already committed to salaries and lease payments based on expected funds. Two months later, most of those organisations successfully challenged the decision in the Gauteng High Court and had their funding reinstated, with the court finding that the department’s actions were unjustified. The Gauteng Care Crisis Committee (GCCC), a voluntary association representing the affected NGOs, was subsequently accused by Hlophe of spreading misinformation.
GroundUp obtained a draft copy of the FSG Africa report, which confirms that the forensic audit did not recommend defunding any of the organisations. Instead, it concluded that the department itself was incapable of responsibly funding and monitoring the sector. Most NGOs were cleared of wrongdoing, with only a few flagged as wholly incompetent or needing further investigation. One highlighted case is The Beauty Hub Academy, which was reported on earlier this week.
The fallout has tangible human costs. The Mohau Centre, a home for terminally ill and HIV-affected children, lost funding in 2022 after failing to produce building plans for a government hospital it does not own. Department spokesperson Motsamai Motlhaolwa confirmed the centre has not received any funds since then, even though the audit found no governance or compliance issues at the site.
For SMEs and small NGOs that rely on government contracts, the GDSD’s turmoil serves as a cautionary tale about over-dependence on a single funding source and the risks of opaque procurement processes. The department’s inability to enforce clear procurement rules, combined with political interference, has created an environment where even well-intentioned organisations can be left without cash flow, staff and, ultimately, the services they deliver.
While the department has pledged further reforms, the pattern of delayed action, buried reports and ad-hoc decision-making suggests that meaningful change will require more than new audits. Independent oversight, transparent procurement guidelines and a realistic budgeting process are essential if the province is to restore confidence among NGOs and protect the vulnerable populations they serve.
Read more about the broader implications for non-profit funding in Gauteng on our Regulatory & Policy page.
