Questions are being asked after the Gauteng Department of Social Development pushed through R11m in subsidies for a new drug rehab centre in the province while simultaneously defunding several similar existing non-profit organisations (NPOs).
And while these other NPOs have been funded for years by the department and have been struggling with catastrophic delays in service agreements and a dysfunctional application process for their subsidies, the new centre was approved in a speedy three weeks, write Daniel Steyn, Masego Mafata and Raymond Joseph for GroundUp.
Clinix Foundation, a new non-profit organisation linked to Clinix Health Group, received R11m in funding for the last two quarters of 2023/24 for 119 beds.
Meanwhile, at least five NPO drug rehabs, accounting for 246 of the province’s 571 state-funded beds, were recently notified that they will not receive funding for the 2024/25 financial year because they are “under investigation” – although they were not told what the allegations are. They now face closure.
The R11m grant for Clinix Foundation was made when the department was changing its funding process for NPOs and conducting forensic audits on organisations it had funded for years.
In September 2023, the department centralised control of the process within the office of the head of department, cutting out social workers and regional officials who would usually be part of the adjudication process.
Instead, it appointed independent adjudication panels to consider all non-profit grant applications for 2024/25. It claimed this was because of findings of “maladministration” by the Auditor-General – but the Auditor-General has never made such findings.
The changes to the system have caused a series of delays and forced several organisations to close. And while others have had to navigate the new dysfunctional application process, Clinix Foundation was green-lighted for funding in just three weeks, between October and November 2023.
Clinix Foundation was registered as an NPO on 10 October 2023, leaked documents reveal. Nine days later, it applied to be registered as an in-patient drug rehabilitation facility at Clinix Health Group’s hospital in Selby Park.
Within the next eight days, it received all of the necessary registration and compliance certificates from the Gauteng government.
On 31 October, Clinix Foundation applied for R16.2m in funding for 119 in-patient beds, and R10.2m for out-patient treatment of 350 patients per month. The applications included projected budgets for R36.7m and R22.5m for in-patient and out-patient treatment respectively for the 2024/25 financial year.
Three days later, on 3 November, service-level agreements were concluded with the department for the last two quarters of the 2023/24 financial year (October to March). The budget had been revised to R10.1m for 119 in-patient beds and R980 000 for 200 out-patients per month.
Clinix Foundation facility manager Fabion Benett told GroundUp that it has not yet concluded a service-level agreement with the department for 2024/25.
The department followed a similar process in 2016 when it approved funding for a treatment centre run by Life Healthcare. Funding for the company’s treatment centres in Randfontein and Witpoort was pushed through by the department weeks before the launch of the centres.
Life Healthcare received R124m in 2022/23 for 750 beds, while other organisations offering the same services were funded for far fewer beds, and received subsidies ranging from between R1m and R16m.
Life Healthcare’s grant is now one of those the Gauteng department says is under investigation, and the centres have not received funding since 2023.
Department spokesperson Themba Gadebe told GroundUp that the decision to fund 119 beds at Clinix Foundation was “due to the demand for in-patient facilities in the province”.
Gadebe said the funding process for Clinix Foundation was “assessed and approved for funding in the same way other non-profit organisations are approved and funded”.
But NPOs that applied for funding for the 2024/25 financial year have had to deal with a series of delays in the new, centralised funding process. Business plans were submitted in November 2023 and organisations received feedback on their funding applications only around May 2024.
Service-level agreements signed over the past few months have been riddled with errors. It appears the process has now entirely collapsed, forcing the department to revert to last year’s service-level agreements for the first two quarters of the 2024/25 financial year.
GroundUp has spoken to dozens of NPOs that have concluded service-level agreements with the department for 2024/25, but to date, none has been paid.
Several organisations, including five in-patient rehabilitation centres and a gender-based violence shelter, have been informed that they are under investigation, but have not been told what allegations they face.
See more from MedicalBrief archives:
Multi-million-rand Gauteng rehab centres under investigation
Gauteng Health has learnt nothing from Life Esidimeni
Funding cuts threaten Gauteng quadriplegic NPOs
Life Esidimeni inquest: MEC dodges blame for ending contracts
Gauteng drug rehab centre to be closed after patient dies