KZN NPOs face uncertainty as Social Development department alters subsidy payment schedule
Image: Independent Newspapers Archives
Non-profit organisations (NPOs) in KwaZulu-Natal are fearful that their work could be in jeopardy after the provincial Department of Social Development in KwaZulu-Natal warned them of a change to the payment schedule for their subsidies.
The NPOs said they were concerned that the payment change might result in them not receiving payments on time, or at all which would have a catastrophic impact on their ability to provide social services to the needy and vulnerable.
The Mercury has seen the letter from the Social Development department informing NPOs of the change and also spoke to representatives of two NPOs who received it. The NPOs did not want to be named for fear of reprisal.
The letter, dated June 22, stated that part of the department's budget has been reallocated by the Provincial Treasury to pay outstanding bills of the Department of Education. This decision comes as the department faced a strike by teachers due to delays in payments for norms and standards. About R900 million has been reallocated from other departments and given to the education department.
As a result, the social development department will be paying NPO subsidies using a monthly payment system and not the tranche system it adopted in 2023.
According to the NPOs, the tranche system allows the department to pay every three months.
The NPOs stated that even this system was not working well, as there were sometimes delays in payment, and they now feared that the issue will worsen.
The letter from the Head of Department (HOD) said it was "regrettable that the department cannot continue with this (tranche) system, and we are forced to revert to monthly subsidy payments".
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'This arrangement will reduce the amount of cash available to the department on a monthly basis, and the payment of tranches, monthly subsidies, and invoices will be affected."
The department's letter stated it will continue to provide timely payments to NPOs, but the amount of money available is unknown and will be determined by the provincial treasury.
One NPO representative said, 'The greatest fear for the NPOs is that they might not get paid at all. In the letter they sent us, there is no indication of when an NPO can expect to get paid. When they implemented the tranche system, they said it was important to use it because that way they could manage their expenses due to cash flow problems. Now they want to go back to the month-to-month system for the very same reason.'
Another representative spoke of the devastating impact this could have on operations: 'The workers in this sector are not paid as well as government workers. There are already instances in the NPO sector where workers are paid half their salaries or paid late. This means that some of these workers will not arrive for work because they do not have transport money or cannot pay someone to look after their children, so there is a serious impact on this.'
DA member in the Social Development Committee, Shontel De Boer, said they were informed in a meeting that the department wanted to revert to monthly payments, but no resolution had been taken about it.
The department confirmed that it had sent the letter to NPOs.
Asked whether there is a risk that NPOs might not get paid, it said, 'That will depend on the amount that will be taken to assist Education. The amount is not yet known. Provincial Treasury to determine.'
THE MERCURY
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