East Rand chronic underfunding of Child Welfare organisations: Social Development Department response to petition

Meeting report

Apologies
The Committee Secretary informed the Committee that apologies were received from the Minister and Deputy Minister of Social Development.

Ms P Sonti (EFF) expressed her concerns about the apology in vernacular.

The Chairperson said Ms Sonti’s concern was the same as all other Members of the Committee - the Committee had agreed to take the absence of Deputy Minister up to the highest authority. The Deputy Minister had also been informed personally about her absence and the concerns of the Committee Members.

Social Development Funding of Welfare Services
Ms Nelisiwe Vilakazi, Acting DG, Department of Social Development (DSD), noted that the Department looked at the petition from Mr M Waters (DA) and acknowledged the problem raised. It also acknowledged the importance of partnership between government and Non-Profit Organisations (NPOs) in social service delivery. The importance of partnership was informed by constitutional, legal and international obligations as well as policies and programmes central to the mandate of the Department. This collective responsibility contributed immensely towards the creation of an enabling environment for effective delivery of developmental social services.

Mr Peter Netshipale, DDG: Community Development, DSD, gave a high-level overview of the presentation before looking at the Gauteng province in terms of the petition. The total number of NPOs in SA, dealing with social services, stood at 68 708 - of this number, 43 990 dealt with services to children.

The Department implemented the Policy of Financial Awards (PFA) as a guide to fund NPOs in the sector. During implementation of the PFA, several challenges were identified – (1) disparities in the funding of the same services across different provinces (2) different approaches by provinces to the management and administration of funding of NPOs (3) non-compliance of some NPOs to the NPO Act and other pieces of legislation. Other challenges were lack of alignment to service delivery norms and standards, lack of capacity within the NPO sector, gross underfunding of welfare services and funding of the welfare NPO sector and slow transformation within the NPO sector.

Turning to the budget, Mr Netshipale pointed out that of the R19 billion allocated to the Department for 2017/18, only R7 billion was spent on NPOs nationally. Of this amount, only 70% went to social welfare, children and families and restorative services. The majority of this percentage went to Early Childhood Development (ECD) and partial care.

Poverty was increasing but the budget was decreasing - the Department needed more funding.

The solution to the challenges was to define partnership (between the NPO and the DSD) that was based on mutual understanding in the provision of services. Treasury should review the funding model of welfare services to ensure there was equitable provision of services especially to historically disadvantaged communities. The Department was finalising the Sector Funding Policy, the State and Civil Society Organisations partnership model and the DSD financing models.

Ms P Mogotsi (ANC) asked if the Committee can see the draft document of the policy. How far was the Department with the policy document?

Mr Waters asked the Department to explain discrepancies in the figures in the presentation.

Ms K Jooste (DA) asked if the funding for the Expanded Public Works Programme (EPWP) was separate from the ECD funding.

Mr Netshipale said the PFA was ready and in the process of consultation. The Department will brief the Committee on a scheduled date. The figures showed the scenarios to move to greater equity in spending. If the minimum allocation was set at the 2016/7 level of per capita spending, the Department was supposed to be getting R32 billion - if it is set at 25% above the 2016/17 national average per capita, the Department should be getting R22 billion. The budget for EPWP was not included in the budget presented.

Ms Jooste stated that the issue of ECD was of great importance and a lot of money went to ECD 0-4.

The Chairperson said it was better to hear from the province for better understanding of the question and answer on ECD.

Mr Onkemetse Kabasia, DDG, Gauteng Social Development, outlined that of the R7 billion allocated to NPOs, only 34% (R2.4 billion) went to the Gauteng province for NPO funding. NPO funding accounted for 55% of the total departmental budget in Gauteng. The allocation to the NPOwais more than what the province spent for normal operation of the Department. A sizable chunk of the R2.4 billion went to children and families, followed by social welfare services.

Looking at the highlights of transfers over three financial years, 6% subsidy increments were implemented for the past three financial years to minimise negative impact of inflation.

The Department engaged and introduced innovative programmes in the NPO sector such as non-centre based in un-serviced areas, mobile services, an independent living model for people with disabilities and active aging programmes.

There was also implementation of Isibindi Model which sought to address child and youth care worker skill shortage in the children sector - the Department paid salaries of the workers even though they were employed in the NPOs.

The Department also supported NPOs with provision of equipment. It further offered financial bail-outs to NPOs in financial distress due to the shrinking of donor funding particularly from the National Lottery.

In terms of the funding model for children welfare, for the 2017/18 financial year, Gauteng DSD will be funding 122 welfare NPOs and providing families services with a budget of R133 million.  GDSD provided post-funding with related administrative costs. In sum, GDSD provided limited programme funding focusing on professional psychological services to augment social work services.

It was not possible to fund statutory services at 100% despite donor funding. The reason was that the budget was not increasing at the same rate at which donor funding was decreasing.

Current amendment of the PFA sought to provide a fair, equitable and transparent method of determining the contribution of NPOS to the cost of social welfare services.


Discussion
Mr Waters said that the problem was not only happening in Ekurhuleni but in other areas and provinces. It was a constitutional obligation to provide for these social services and it should be funded.

Ms Jooste said some things were not negotiable - vulnerable children need to be sorted. The Department should completely fund compliant NPOs rather than those who were non-compliant.

Ms E Wilson (DA) raised concerns about disparities in funding of same services across different provinces - something needs to be done to get the norms and standards. Welfare services play a huge and critical role in this country but most closed because of underfunding.

Ms B Abrahams (ANC) asked how the Department assisted NPOs who were non-compliant. What criteria were used when assisting with renovation especially those on a private facility? What criteria were used when paying salaries of workers in NPOs? Did the Department monitor the co-ops? Can the Department provide the list of the 122 welfare NPOs?

Ms Sonti spoke in the vernacular.

Ms Malgas explained that the question related to the relationship between the Department and non-compliant NPOs.

Ms Vilakazi responded that there was a good relationship between the Department and the NPOs. The Department signed an agreement with the NPOs on deliverables it was funding. The Department, in terms of the Public Finance Management Act (PFMA), monitored the NPOs as per the deliverables. NPOs that were non-compliant were mostly the emerging NPOs and those in the rural areas who needed a lot of support. The Department had also asked the well-off NPOs to mentor the emerging ones so that they can comply. The Committee could assist by making sure that Treasury released more funds for these services.

Mr Kabasia added that the Department only did minor renovations in private facilities. ECD services were very important. The Department supported payment of salaries for social workers and administrative services. With co-operatives, this was an ongoing process as some needed to be trained and developed. Some produced graduates that can produce school uniforms. The Department was continuously engaging with NPOs.

Ms Mogotsi asked the Department to forward a list of the organisations it was funding.

The Chairperson said there was need for provinces to come and present their state of readiness and food security strategies.

Ms Wilson asked whether it was proper for Department to instruct NPOs on whom to employ because it funded them.

Ms Vilakazi responded that, as per governance, it was not proper. If it was happening it needed to be investigated.

The meeting was adjourned.