NPOs Hamstrung by Non-receipt of Funding

Mar 24, 2023 | Press Releases

The Inkatha Freedom Party in KwaZulu-Natal is deeply troubled by the Department of Social Development’s backpedalling on the issue of subsidy payments to non-profit organisations (NPOs), such as child welfare societies, old age homes, childcare centres, centres that provide services to persons with disabilities, and places of safety.

The Department has, for many months, been erratic in the payment of subsidies to these NPOs and it has become a crisis that has the potential to destroy the NPO sector, which provides essential services to communities across the province.

In terms of Section 105 of the Children’s Act, government must provide funding to these NPOs who are registered with the Department. Further, according to Treasury Regulations and National Treasury Note 34, accounting officers have to pay all money owing within a prescribed or agreed timeframe.

However, what is happening in KZN is a flagrant disregard, not only for legislation but also, for the welfare of our citizens and the functioning of NPOs. The failure to make payment of subsidies to NPOs results the NPOs not being able to fulfil their obligations in paying staff salaries and other running costs. This is unacceptable because just like everyone, staff members have their own personal obligations, which they are unable to realise when salaries are not paid on time.

When I addressed this issue with the MEC of Social Development, Ms N Khoza, in February, she said that there were “some technical problems” and the Department was looking into paying the NPOs in quarterly tranches rather than monthly – but there is no sign that this will be happening.

On 16 March 2023, the HOD, Mrs N Vilakazi, wrote to NPOs, again apologising for the delay in payment of claims received from NPOs.

It is ridiculous that the HOD now says that the delays are as “a result of excess budget cuts” and that the next BAS run will take place on 17 March, as the Department has requested Treasury to “put more money in the bank account”. It is shocking that the letter goes on to say, “If that request succeeds money will be deposited in our clients’ accounts on Wednesday, 22 March 2023”.

The question that begs an answer is how the MEC expects the NPO sector to function optimally with this sort of financial uncertainty hanging over them?

This sombre situation reflects the ineptitude that exists within this Department. The MEC needs to come clean and be honest about what the problem is and when it will be resolved, since funds are budgeted annually for such payments to NPOs.

Hon. Les Govender
IFP MPL in the KwaZulu-Natal Legislature
Social Development Portfolio Committee
083 974 4894

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