Minister's and Department's briefings: Social Development Policy on Financial Awards and Guidelines for NPO funding; National Coalition of Social Services & National Welfare Forum submissions on that Policy

Meeting report

Department of Social Development National Policy on Financial Awards & NPO policy guidelines
Members’ opening remarks
The Chairperson began the meeting by expressing displeasure at the failure of the Department of Social Development (DSD or the Department) to supply the presentation documents on time. She pointed out that the late submission of the presentation meant that the Committee did not have time to study it in detail in order to formulate adequate questions, and for this reason the Members would only be able to ask questions of clarity following that presentation.

Ms S Kopane (DA) also complained about the delay in receiving the presentation documents. She reminded the Department that according to the rules of Parliament, all presentation documents should be submitted to the Committee 48 hours prior to the meeting. She noted that the members from the Democratic Alliance (DA) would not attend future meetings if the procedures of Parliament were not followed.

The Chairperson pointed out that if this happened again, the Committee would have to give serious consideration to whether the meeting should be held at all. She also would raise the matter with the Minister.

Department of Social Development presentation
Dr Maria Mabetoa, Deputy Director General: Welfare Services, DSD, apologised for the delayed submission of the presentation.

Dr Mabetoa noted that she would brief the Committee on financial awards to service providers, and on the financing guidelines for non-profit organisations (NPOs). She outlined the background of the Policy on Financial Awards to Service Providers (the Policy).

Trends in the past showed that the highest percentage of the financial allocations disbursed by the DSD went to NPOs that were longer-established and well-resourced. Whilst, at a community level, some organisations had benefited in recent years, the policies of government had, overall, at provincial and national levels, tended to reinforce the urban and racial bias. In the rural and poor areas the service delivery by the DSD was poor and almost negligible. The DSD delivered many of its services through provincial departments, the NGO sector and faith based organisations. As a result of the imbalance she had described, the intended transformation that the Department hoped for in fact never took place.

The Department had introduced a policy on financial awards in 2005, with the aim of addressing the skewed manner in which funding was formerly allocated to NGOs. It sought to ensure the achievement of the Department’s strategic objectives, specifically with regard to the delivery of social welfare services, by providing a guide to national and provincial departments’ partnerships with the NPO and Non Government Organisation (NGO) sector. Over the years between 2005 and 2010, the implementation of the policy identified numerous concerns. In 2009 a desktop analysis had been conducted that identified gaps within the Policy.

These gaps included lack of uniformity in the implementation of the policy across provinces, the failure to define clearly the national and provincial roles and responsibilities in relation to NPO financing, and the non-alignment of the Policy with various pieces of legislation. Other concerns were that sources of funding were not disclosed by NPOs and there were instances of non-compliance with the NPO Act and other related pieces of legislation.

In order to address these gaps, the Department and NPOs had then set up a joint strategic committee. The concerns and the challenges raised at that committee were then examined during a Policy review. In March 2011 the new Policy was approved by the heads of the DSD. There was an acknowledgment that the matters needed to be addressed urgently, and the Policy implemented by the end of the 2011 financial year.

Dr Mabetoa outlined some of the key areas that the Policy had strengthened. The new Policy recognised the significance of partnerships and strove to improve relationships between the DSD and the NPOs. The Policy unpacked and clarified roles and responsibilities of the DSD and the NPOs. It acknowledged that partnerships allowed for levels of consultation and negotiations that would ensure that services were equitably, effectively and efficiently delivered. It also called for the effective management of financing services delivered by the NPOs within the social development sector.

The broad roles and responsibilities of the DSD were now articulated. These included the determination of priorities, development of guidelines and relevant legislative framework, and proper monitoring and evaluation of services rendered by the NPO sector. The DSD must ensure compliance with the Policy, guidelines and legislative frameworks. DSD had to provide leadership and guidance in the implementation of the Policy, to provide strategic direction for social service delivery, and to ensure the development and implementation of  integrated inter-sectoral policies and programmes, at both national and provincial level. It was called upon to harmonise its central functions with other national departments, provincial departments and other role players, and to develop quality assurance systems for the delivery of social welfare services. Finally, it must ensure capacity and institution-building, promote partnerships and linkages with other key role players for effective service delivery, procure services in line with government priorities, and provide financial support to projects and programmes within available resources. [See attached presentation for further details]

Dr Mabetoa then touched upon transformation issues, saying that this would be enhanced when the DSD took leadership in the effective management of the financing of NPOs, as it could focus on empowering emerging NPOs. She again said that after 1994, attempts were made to reach out to emerging and new organisations, but not much progress had been made. The DSD facilitated the provision of support to such organisations so that they could become more responsive to the Policy, and also facilitated funded NPOs in becoming more responsive to transformation. The DSD also intended to monitor the responsiveness to transformation, both internally and externally.

Dr Mabetoa noted that the Policy also enhanced service specifications, because the Department determined priorities for service delivery at either national or provincial level. These were to be informed by, amongst others, government priorities, research, statistics, and demands for service delivery.

It was also important to deal with financing. Dr Mabetoa said that in order to address the challenges identified, specifically with regard to the financing of statutory services, there was a proposal that there must be a move away from subsidisation to programme financing, in accordance with national norms and standards and costing models, to ensure uniformity. Financing must be based on departmental priorities and affordability, as well as on identified needs and availability of financial resources. There was a linkage of proposals to service demands and realities, and a situational analysis was done for each province. NPO financing time lines were linked to Medium Term Expenditure Framework (MTEF) periods and the NPO Financing Guidelines.

Dr Mabetoa explained that the Policy would be implemented by both the national and provincial Departments of Social Development, in line with the NPO Financing Guidelines. However, national government should provide leadership and guidance, as stipulated in the section of the Policy dealing with roles and responsibilities. The provinces should take responsibility of ensuring effective and proper implementation, monitoring and reporting by funded organisations.

In line with institutional arrangements, the Department would establish a national forum for the purposes of adopting a collective approach, and would jointly prepare for Policy implementation, NPO coordination and management, monitoring to ensure effective and efficient service delivery and effective reporting, and facilitating of improved interaction with key stakeholders at all levels, especially at grassroots community level.

The Department would also facilitate the development of monitoring and evaluation systems to ensure that provinces adhered to their migration plans, linked to the proposed Policy implementation plan. The national Department of Social Development would also take the overall responsibility of supporting provinces towards migration and effective implementation of the Policy. The administrative mechanisms and tools instituted by the DSD would support and give effect to the implementation of the Policy, and some of the mechanisms to be employed were set out (see attached presentation).

She noted that the NPO Financing Guidelines (the Guidelines) were developed parallel to the review process. These would, broadly, give effect to the effective implementation of the Policy, would address major gaps identified in the current NPO financing system; and would lead towards uniform implementation of the Policy. The Guideline would act as a planning and management tool for provinces. They would help with implementation through providing timeframes on when contracts must be entered into with an NPO, how to transfer funds and the reporting. They would provide a framework for coordinating provincial NPO funding without delays, as there would be reminders sent out by the national Department, and it was also hoped that capacity for management of funding would be established. Finally, the Guidelines should ensure better uniformity in funding.

The Guideline would deal with establishing partnerships as a form of funding NPOs for sustainable community service delivery. There were three categories, dealing with  institutional arrangements, proposed processes for  NPO funding and management of funded NPOs. Firstly, all NPO funding would have to comply with supply chain management requirements. The compliance form called for proposals to be prepared and advertisements to be put out within 30 days. There would also be briefing sessions, intended to empower Community Based Organisations (CBOs). The proposals would be adjudicated by a special team. The new Policy would increase funding from one year to three years, with a yearly evaluation and appraisal of the NPOs’ performance.

Dr Mabetoa noted that the Policy and Guideline should be implemented in 2012/13. Further consultations with stakeholders would continue to ensure comprehensiveness and maximum impact. Issues of transformation would be given more attention, in order to address service delivery, especially in the poor and rural areas, and support to provinces would be provided continuously.

Discussion
Ms J Masilo (ANC) wanted to know whether the DSD would assist NPOs from the rural and poor areas to complete a business plan, so that they would be eligible to receive funding.

Ms S Kopane (DA) wanted to know why the organisations were not properly consulted when the new policy was being drafted.

Ms Kopane asked how this Policy would ensure sustainability of the NPO sector. She asked why the DSD was not inviting the larger and more established NGOs to mentor the smaller NGOs, especially to help them manage their finances.

Ms H Lamoela (DA) wanted to know whether the new Guidelines were sufficient, and whether there was enough funding available to implement the Policy. She questioned also if the NPOs would receive their funds timeously. She pointed out that there were some NPOs from Limpopo that had still not received funds allocated to them in the last financial year.

Ms T Kenye (ANC) wanted to know whether the Policy dealt with the lack of disclosure of funding by the NPOs. She also asked for more details on capacity building. She noted that some provinces were complying better than others, and enquired what the Department was doing to monitor and evaluate the provinces. Finally she wanted to know what the penalties were for non-compliance with the Policy.

The Chairperson wanted clarity on the funding procedure for the small NGOs, and, in particular, what support was offered to them, in terms of networking, to help them access additional funding, especially from government departments. She also wanted to know about the preparedness of provinces in the 2011/12 financial year, and whether the DSD itself was ready to implement effective monitoring and evaluation of the NPOs. Finally she enquired whether the NGOs were fully capacitated to comply with the new Guidelines.

Dr Mabetoa responded that since the new programme funding was being introduced, DSD had made it clear that it did not wish to take over from the NPOs themselves. NPOs also raised money from the communities, but the money provided by the DSD was put to the specific services that they rendered for the DSD, and for which the DSD remained responsible. The DSD would not be able to continue funding agencies that were not delivering the services that were promised.

Dr Mabetoa confirmed that the nationally-funded NGOs and smaller NGOs were already working together, to ensure that there was knowledge transfer to the smaller ones. However, she acknowledged that the Department would need to ensure that, in all provinces, funding was provided to NGOs who engaged in capacity building. She acknowledged that there were flaws within the system, and DSD was doing all it could to rectify the problems. Social community workers, welfare workers and others were being trained. The DSD aimed, by the end of the 2012 financial year, to have 33 000 social service workers on the ground.

She noted that the DSD would be conducting annual reviews, for which the provinces must provide all information about NPOs working on the ground in those provinces.

Mr Peter Netshipale, Acting Deputy Director General, DSD, agreed that it was a challenge to  build capacity within the NPOs, because new ones would be registered every year. DSD had therefore issued a Guideline to assist in capacity building, linked to the Policy. He reiterated that provinces needed to look into whether the NPOs who were given funding also needed to have capacity. Capacity could be provided in various forms; some provinces asked larger NPOs to provide training and provincial departments did the training themselves. He added that once an NPO was funded, monitoring should be done on a monthly and quarterly basis. Each province would submit the data to the national Department, who would make further recommendations on the monitoring and evaluating process to the provinces and the NPOs.
He acknowledged that people in the rural sector needed to be empowered, so that they in turn could pass on their skills to other members of the community.

Dr Mabetoa stated that all the provinces were made aware of the areas where support was needed. The provinces were using the information provided by the National Department to target funding to those NGOs who were engaged in projects benefiting each individual province. He further alluded to workshops that were to be held that would create a channel for discussion and debate with the NGO sector.

Minister Bathabile Dlamini argued that the purpose of the funding projects was to develop a close relationship between civil society and government. The Department must work harder to ensure that the needs in the rural and poor sector were met. She stated that many community organisations were not aware of, or did not have the skills to apply for funding. Part of the  capacity building projects that the Department would implement should focus on helping small groups to develop a strong business plan so that they would become entitled to funding. She added that if there were NPOs or NGOs working in rural areas, then they must work with local members of the community and involve them in their projects. She stressed that local members should be involved at managerial and board levels.

The Minister also acknowledged that no province was perfect, but it was important to bring all the provinces to the same level. Money that would be given to all the provinces would be monitored, and uniform standards would be maintained.

Mr Netshipale stated that the Department had a help line that assisted the applicants on the application process, trying to ensure that everything had been completed before it was submitted, and, more importantly, that all the necessary information was submitted.

Ms H Lamoela asked whether the money that was allocated to DSD was spent on funding projects.

A Member enquired about a case in which parents had died, leaving the children alone, and asked if there was any legislation to ensure that social workers provided assistance to the children.

Dr Mabetoa responded that social workers were obliged, by legislation, to give care to children under 18. In practice, the local police and social workers would assess the situation and ensure that appropriate actions were taken.

Ms Kopane asked about the allocation of funds by the provincial legislature, and asked about extra funding that the DSD received as a portion of NPO registration fees.

Mr Netshipale stated that the DSD did receive an extra R5.2 million from the NPO registration fees.

The Chairperson stated that the Minister could not be held accountable for provincial expenditure.

Mr V Magagula (ANC) said the issues raised by the Minister were very important. He asked if there were incentives for the NGOs to stay in one area until a project was completed. He said that often NGO workers moved from one project to another without completing their initial projects.

Dr Mabetoa stated that the DSD was looking into the disparities in funding on both the provincial and rural levels.

National Coalition for Social Services (NACOSS) submission
Mr Willie Van der Merwe, Chairperson, National Coalition for Social Services, outlined that the Coalition (NACOSS) acted as an advocacy, lobbying and communication body for the 20 NPOs in the social welfare and development sector. The majority of these member organisations were umbrella bodies or national councils, who in turn represented more than 3 000 affiliated service-rendering organisations. Their services included services to children and youth, families, women, older persons, person with disabilities, the homeless, people abusing alcohol and drugs and people affected and infected by HIV and Aids.

He outlined the role of NACOSS in signing the Memorandum of Understanding with the National Welfare, Social Services and Development Forum and the Joint Strategic Committee. [See attached document]. He then outlined that there were some objections to the process that the DSD had outlined to revise the Policy on Financial Awards. He argued that the DSD did not sufficiently understand the financial challenges that the NPO sector faced, and gave his view that the revised Policy would not address the current funding crisis. It was the NACOSS submission that this policy did not present any definite strategy or any practical solution to the current crisis. In the opinion of NACOSS the tendering concept, which was fundamental to the revised Policy, would only be applicable to very specific situations, such as the start-up of new projects or programmes. The Policy clearly stated that financing was seen as a mechanism to bring about transformation. NACOSS held the position that the transformation agenda should separated from the funding debate.

He claimed that NACOSS fully agreed with the Policy position that organisations who were originally excluded from funding should now be included. Many NACOSS members were already involved in supporting or developing emerging organisations, especially in rural and remote areas, with the aim of bringing them into the system. The conceptualisation of partnership in the Policy was, however, confusing, for reasons that were more fully outlined in the attached document. He also thought that another critical flaw of the revised policy was that it did not set out any strategy to grow the existing budget for social welfare services.

He concluded that NACOSS believed that the NPO social welfare sector had arrived at a point where bold steps were necessary in order to secure its future, and ensure that equitable services were provided to all. Therefore, in the spirit of partnership, as defined by the Policy, NACOSS proposed that there must be an open consultation process that included all role players in the sector.

Discussion
Ms Lamoela stated that all the inputs that made were critical, and needed to be considered, but unfortunately there was insufficient time to review the presentations in detail and formulate the necessary questions. She suggested that perhaps more time was needed for Members to read the presentations, and that another meeting might be needed to follow up with questions.

The Chairperson wanted to know what opinion NACOSS held on the uniformity of funding packages. She noted that it would be necessary also to consult with National Treasury. She asked for some sense on where NACOSS was going.

Mr van der Merwe stated that NACOSS covered all provinces. This organisation would welcome legislation to support the Policy for financial awards, but also wanted to see a uniform costing model. It would be prepared to help NPOs to develop such models. NACOSS hoped that Parliament and NPOs could jointly make submissions to the National Treasury for the social services sector as a whole. He also offered to bring information about NPOs and their requirements for poor and rural areas to the Committee. He suggested that the DSD must acknowledge the identities of the NPOs, and the two must work together to raise funds. It was accepted that it was not just the responsibility of government to fund NPOs but there must be civil society contribution as well.
 
National Welfare Forum (NWF) submission
Ms Xaba Mambaso, Executive Member, National Welfare Forum, agreed at the outset that there was a need for equitable redistribution of funding to the historically disadvantaged areas. This was supported by the National Welfare Forum (NWF) and was also a fundamental aspect of the Freedom Charter.

She then noted that her document (see attached document for full details) gave comments for each chapter of the Policy and Guidelines. Where no comment was noted, the NWF was broadly in agreement with what was outlined.

She then pointed to specific points. On page 9 she noted that the NWF welcomed the recognition that was given to the fact that inequality in government and NGO salaries was leading to social workers leaving the NGOs. She noted, on page 11, that there was a misleading assumption that Section 21 companies, trusts, and bodies organised at the provincial and national levels were likely to be well resourced. She noted the NWF’s agreement that most of the issues identified presented challenges, including the lack of equity between the provinces in relation to the their funding of and overall dealing with NGOs

NWF recommended the inclusion of some further objectives. It wished to ensure that there were adequate DSD budgets, both at national and provincial level, to provide for a social welfare system that would have sufficient scope and quality to provide for the core service needs of all poor, vulnerable and marginalised people in South Africa. She wanted to make suggestions in regard to the potential outcomes of the policy, values and principles, roles and responsibilities of the NGOs, as outlined more fully in the document attached. The transformation criteria were also outlined in more detail. She argued that the Department’s responsibility was to source sufficient funding for services mandated by the Constitution, and that relevant statutes, international agreements and policies should be spelled out. Whilst NGOs could and should raise funds for the continuous improvement and expansion of services, this funding must be relied upon to provide for core costs of essential services.

The NWF supported full transparency with regard to the sources of NGO funding.

Due to time restraints the Chairperson asked the NWF to focus on the main issues as all the members had the relevant documents on hand.

Ms Mambaso then outlined a proposal for an overarching framework, (see attached document). She finally stated that the White Paper on Social welfare had laid a foundation for further development of social and development services. Given the critical services provided by this sector to the most vulnerable people in society, there was an urgent need to develop a new and better legislative environment for the social welfare and development sector.

Discussion
The Chairperson stated that since the documents from all presenters were not received on time, it would be necessary to arrange for a further meeting at which questions could be asked.

Ms Kopane commended the NWF on its presentation, which contained many valid points. She noted that organisations should be researched thoroughly before allegations of racism were to be made.

The Chairperson stated that transformation was the common theme running across all the presentation. She said it was important to make services available to all citizens. Over a period of time, as the Department and the Social Sector worked most closely together, many of the gaps would be closed. Finally she challenged allegations that suggested that confidentiality was not being respected, saying that more evidence was needed on this matter.

The meeting was adjourned.