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Forensic reports reveal mismanagement, fraud and corruption in the Gauteng Department of Social Development
The Gauteng Department of Social Development (GDMO) is one of South Africa’s largest funders of non-profit organizations (NGOs), which play an important role in supporting vulnerable people across the province.
The Gauteng provincial government allocates almost R2 billion annually to more than 700 NPOs, making Gauteng the country’s leading province for NPO funding.
This support is critical for meeting the needs of vulnerable groups, including children, the elderly, the homeless and people with disabilities and ensuring access to services such as shelter, food, healthcare and social support.
However, the GDSD has recently come under scrutiny. In early 2024, Gauteng’s non-profit sector faced a crisis as hundreds of organizations experienced several months of delays in receiving subsidies from the department. Some organizations were forced to close, others had to scale back their services and many found themselves in dire financial straits.
The GDSD attributes the crisis to “administrative challenges” that arose as the department implemented measures to respond to the findings of internal investigations and audits. The acting head of the department, Bongani Ngomane, admitted that the funding process lacked internal controls, which created a “fertile environment for maladministration and fraud”.
A whistleblower provided Daily Maverick with these internal GDSD reports, including six independent forensic audits into corruption and financial mismanagement. These audits cover programs such as food banks, school uniforms, dignity suits and the Life Health Recovery Center (now Nkanyisa Recovery Centre).
Daily Maverick cross-referenced these findings with five auditor-general management reports (2019–2023) and four from Gauteng audit services, all of which highlighted serious concerns about poor governance and poor controls over the NPO funding process – from application and selection to financial management and oversight .
In summary, the investigations show:
mismanagement of hundreds of millions of rands;
Prima facie evidence of fraud and corruption by senior GDSD officials;
Numerous recommendations for disciplinary and criminal investigations, most of which appear to have been ignored;
A network of senior officials with ties to top politicians, who allegedly siphon off funds meant for NPOs with impunity;
Dodgy NPOs and their leaders colluding with officials to benefit from misappropriated funds; and
Schemes to bypass procurement processes and appoint handpicked suppliers.
Daily Maverick will investigate these details further in 2025.All three reports recommended disciplinary and, in some cases, criminal, action against senior GDSD officials, including Maphosa. However, no action was taken against any of the mentioned. Maphosa resigned from the GDSD in 2018 “for personal reasons”.
When questions were raised about the investigations into these programmes, Prime Minister Panyaza Lesufi’s spokesperson, Sizwe Pamla, said that the Prime Minister was the MEC for Education when the reports were completed in 2019/20. However, Lesufi was also acting MEC for social development from November 2019 to June 2020.
According to Pamla, relevant departmental accounting officers receive all investigation reports and work with their immediate political principals (MECs) on the progress and implementation of the findings. He said the GDSD dealt with the reports and worked on the recommendations, and inquiries about progress should be directed to them.
“DSD dealt with the report and worked to implement its recommendations. You can follow up with them about the progress.
“The premier was briefed on the report by the Gauteng provincial forensic audit unit and informed that it had been submitted to the Directorate for Priority Crime Investigation (Hawks) to implement some of the recommendations,” he said.
Mbali Hlophe, who was MEC for Social Development from late 2022 to May 2024, told Daily Maverick: “The Gauteng Department of Social Development can unfortunately be characterized as a crime scene, due to the many forensic investigations carried out over the years is, but has not been acted upon, with the result that corrupt activities and its actors have deeply rooted themselves in various areas of the department’s work and procurement.
“Examples of this can be seen in the maladministration cases being investigated on school uniforms, lunch packs and dignity packs, to name just a few. The investigations date back as far as 2016 and curiously no action has been taken. During my tenure, we tried to deal with this by placing implicated individuals on preventive suspension.”
All the suspensions to which Hlophe refers have been lifted and no disciplinary action has yet been taken.
You can read the full article in English on Daily Maverick’s website: https://www.dailymaverick.co.za/article/2024-12-22-forensic-reports-reveal-mismanagement-fraud-and-corruption-in- gauteng-department-of-social-development/?dm_source=top_reads_block&dm_medium=card_link&dm_campaign=top_reads&dm_content=maverick_news
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