Court orders GDSD to pay NPOs

The Gauteng Care Crisis Committee (GCCC) recently obtained a court order against the Gauteng Department of Social Development (GDSD).

The order brings much-needed transparency and accountability to the GDSD’s decision-making and enables NPOs to approach the courts for the speedy resolution of disputes around the GDSD’s decisions.

According to the committee, this part of the order rights some of the power imbalance between NPOs and the GDSD by addressing the department’s unwillingness to subject their decisions to meaningful consultation, to ride roughshod over NPOs, and to drag out proceedings endlessly.

Judge Opperman will supervise the GDSD’s implementation of the order.

Background
The case hinged on Section 33 of the Constitution, which grants everyone the right to administrative action that is lawful, reasonable and procedurally fair.

The committee argued that the GDSD’s decision-making about NPO funding had not met this standard and, as a consequence, vulnerable groups’ rights to human dignity, to be free from all forms of violence, to have access to health care, food and social security, and children’s rights had all been compromised.

To understand why the GDSD’s decision-making had fallen foul of the standards set by the

Constitution, it is necessary to explain the process of securing funding from the GDSD.

• The NPO submits a funding application.

• The GDSD assesses it and decides to approve or reject the application and how much funding to award the NPO. This decision should be communicated to NPOs by March at the latest.

• If the application is approved, the GDSD and NPO enter into a contract or service level agreement (SLA), typically in March

• Payment is made to the NPO based on the SLA in April, the start of the GDSD’s new financial year.

Six months after organisations had submitted their business plans in November, the committee said the process was still not concluded. The NPOs remain stuck at steps two or three.

It added that their funds were depleted by March when the financial year concludes, and they have tried to maintain services with their savings and emergency donations. Those without these resources have closed.

The NPO sector is, by now, in a crisis and close to collapse.

On May 14, the premier sought to unblock some of the process’ bottlenecks when he announced “immediate payment to all NPOs with signed Service Level Agreements effective on May 15 with finalisation expected by May 24”.

While this committed to some movement on the GDSD’s stalled processes, it did not help those organisations stuck at step two.

The court order now instructs the GDSD to inform all NPOs of the outcome of their applications by May 24, to issue them with SLAs by May 30, and to pay within seven days of receiving the signed SLA.

The second aspect of the court order aims to give the GCCC a bird’s eye view of the GDSD’s processes. This overarching view of the system as a whole will support the identification of ongoing system blockages and a means of taking action to remove these.

The committee said the court ordered the GDSD to provide a list to the GCCC of all NPOs funded in the province, the amounts allocated to each organisation, which organisations’ SLAs are still outstanding, and which organisations have still not received payment by June 7.

“We aim to use this information to address the circumstances of organisations still stuck at step 3. As an indication of the confusion in the GDSD, some NPOs were approved for funding – and informed of this almost three weeks ago – but have yet to receive SLAs. The SLAs sent to NPOs are also prejudicial to organisations and, we argued, do not contain the basic elements of a contract. Furthermore, the SLAs propose significant cuts to NPOs’ budgets, ranging between 50 to 92%.

Acceptable services that meet legislated norms and standards cannot be offered with these amounts of funding. The GDSD did not explain the cuts. This week, organisations that have already signed SLAs and returned these for payment (three weeks ago, in some instances) received a second SLA for the same programme but now offering considerably reduced funding. Still, other organisations are receiving SLAs intended for different organisations.

“We will follow up this situation constantly and return to court if necessary. This list will also make it possible to identify where cuts are made and to approach the court to ask the GDSD to explain these, doing away with individual organisations’ having to lodge individual queries with the GDSD, which may take months to resolve. Where the GDSD’s decisions do not meet Constitutional standards, they will be challenged.”

The committee said where the GDSD declined organisations’ funding altogether, they would use the order to ensure decisions not in keeping with the Constitution are challenged.

“The court order thus represents a first step in bringing order, transparency and accountability to the GDSD’s chaotic and opaque processes of the last few months, which have endangered services for the most vulnerable.

“However, the struggle for beneficiaries’ and organisations’ rights will not end here. Much work still lies ahead to ensure the GDSD’s funding policy is brought in line with the national DSD’s Sector Funding Policy. Even more work must go into repairing the relationship between the GDSD and NPOs.”

The GCCC thanks Webber Wentzel for their pro bono legal services.

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