Inside Gauteng’s welfare corruption investigation

In 2023, the Gauteng Department of Social Development launched a forensic investigation into 46 social welfare organisations to combat corruption and mismanagement. Beauty Hub Academy, a beauty school, received R144 million in government funding, much of which was given to a for-profit company. The report, obtained by GroundUp, revealed that hundreds of vulnerable people were left stranded when funding was abruptly cut at the start of the 2024/25 financial year.

Auditors found that the department was unable to properly monitor, evaluate, or support the funded organisations. Financial statements were filed without scrutiny, and routine site visits were not conducted. Organisations struggling to meet targets or comply with regulations were not provided with support. Most organisations investigated were found to be running competently, but were defunded nonetheless.

Officials had a habit of "fiscal dumping," where they would contact organisations to purchase items or provide wishlists without following proper procurement processes. As a result, half the organisations received millions in extra funding. Issues like blocked fire escapes, non-compliant health and safety regulations, and lack of administrative documents led to funding being withdrawn.

Beauty Hub Academy was found to have funneled public funds to a private company run by its directors. Inqaba Yokulinda Youth Organisation was suspected of fraud and corruption over laptop procurement, but the organisation denied these allegations and continued receiving funding. Two old age homes remained funded despite being in unsatisfactory conditions.

Noma’s Care Centre and Life Healthcare, another non-profit organisation, received funding despite serious issues being raised in the report.