NGO, NPO & Social Enterprise
Gauteng welfare organisations worried about late payments
Department of Social Development is improving but problems remain.
Organisations funded by the Gauteng Department of Social Development are facing late payments and have concerns over contracts. Illustration: Lisa Nelson / GroundUp
- One month into the new financial year, non-profit organisations (NPOs) in Gauteng are worried about late payments by the Gauteng Department of Social Development.
- The department seems to have made some progress since it bungled the funding process last year.
- But some NPOs which have signed contracts with the department have not been paid.
- They are also concerned about new clauses in their contracts.
One month into the new financial year, non-profit organisations (NPOs) in Gauteng are already complaining about late payments by the provincial Department of Social Development.
The department seems to have made some progress since it bungled its funding process last year. But there are concerns about problems which remain and about new clauses in funding contracts. Also, the Department’s budget for NPOs this year is considerably less than last year.
In the 2024/25 financial year, which ran from 1 April 2024 to 31 March 2025, the department introduced a new centralised funding adjudication process which eventually collapsed, leaving hundreds of organisations without funds for months.
This year, the NPOs were told they would be funded by the beginning of April and receive contracts in April.
But some organisations say they have not yet been paid. The Gauteng branch of Epilepsy SA, which was especially hard hit by the department’s maladministration last year, has signed three contracts for different programmes but has still not received any funds.
As a result, staff received only half of their salaries in April, said Aileen Langley, the organisation’s Gauteng director. Some utility bills also went unpaid, threatening the electricity supply to two of the organisation’s residential centres, home to 175 people.
Epilepsy SA is yet to receive its fourth contract for its biggest programme.
“It’s very important for the public to understand that we are not a charity, but that we render a professional service and we are assisting the government to fulfil their mandate,” said Langley, adding that critical services and livelihoods are threatened by late payments.
Department spokesperson Motsamai Motlhaolwa said late payments are due to a “technical glitch” at the Gauteng Provincial Treasury.
Contract issues
The new service-level agreements (SLAs) issued by the department to organisations are also a source of concern.
One of the new clauses is that vehicles funded by the department must be made available to the department whenever needed, says Lisa Vetten, chair of the Gauteng Care Crisis Committee.
Vetten called this a “free-of-charge shuttle service” for department staff. Motlhaolwa denied that it meant organisations are required to provide such a service.
The exact wording in the contract is: “The condition of the vehicle funding is that the Department is entitled to the use and enjoyment of the movable asset when it is reasonably required. The driver of the asset/s during this usage will be designated by the Service Provider.”
The contracts also say that the person who signs them, either the chairperson or director, must take full liability in their personal capacity for any future activities relating to their organisation. This includes any violations or breaches of the agreement and any issues that the department might have with the organisation, says Vetten.
She says when organisations queried this, they were told “you can like it, or leave it.” Vetten says there has been no room for negotiation and many organisations have signed the SLA under the threat that they won’t be paid if they don’t.
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Motlholwa said chairpersons and directors have “critical oversight” over the finances of NPOs. “They fully transact on the funds of the Department and therefore this clause is critical in minimising the risk of mismanagement of funds.”
Last year, in response to the funding crisis, Gauteng Premier Panyaza Lesufi stated that a technical task team would be formed to develop a new standard SLA between the department and the NPOs. Vetten says no new SLA was ever agreed on.
Motlhaolwa said a task team had been formed, but did not specify which organisations were in the task team or what changes had been made to the SLAs as a result.
Underspending and budget cuts
Last year’s funding crisis led some organisations, under the banner of the Gauteng Care Crisis Committee, to take the department to court. Some have still not been paid despite having signed funding contracts and are still busy fighting for their money in court.
The department has said that the reason it could not pay all NPOs was that it had run out of money and overcommitted its budget.
This has been met with some scepticism by organisations. Vetten points out that as of 6 February 2025, the department had only spent 83% of its budget for NPOs and had R360.8m of its R2.1bn budget left to spend.
But Motlhaolwa said between 6 February and the end of the financial year on 31 March, much had changed, and the department had spent 96% of its budget for NPOs.
The underspending from the department in the last year is mostly due to organisations being non-compliant, said Motlhaolwa.
Meanwhile, the department’s budget for NPOs has dropped by R191m from the R2.1bn allocated in 2024/25 to R1.9bn, according to the Gauteng Treasury’s Estimates of Provincial Revenue and Expenditure.
This article was originally published on GroundUp.
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