NGOs face cash crisis as new payment system fails

PAYMENTS to the NGO sector in the province are in a shambles as some organisations started receiving partial, unspecified payments this week while others face a severe financial crisis.

Social Development MEC Pumza Dyantyi, responding to questions in the Eastern Cape legislature, said the department had owed organisations R89.5-million before the current crisis.

The head of the Eastern Cape Department of Social Development, Ntombi Baart, said there were teething problems with a new payment system.

“The department has opted to revert to the old payment system while it is sorting out delays and teething problems,” she said.

Baart said subsidy transfers to the organisations, which assist some of the province’s most vulnerable, had been decentralised but officials still had to be trained before they could process payments.

She said some NPOs had been paid this month and last month.

“Arrangements have been made to pay the next batch today,” Baart said.

“Weekly arrangements are made every Tuesday and Thursday for capturing and payments of NPOs respectively.

“The department is doing all it can to expedite the payments.”

Maureen Andreka from the Algoa Bay Council for the Aged said her organisation had received a payment of about R41 000 on Tuesday – but without any indication of what it was for.

“I am still waiting for clarity on which project it is for. In total, we are due R104 532.16 per month so the above is a small contribution,” she said.

Hilary Bolton from Cheshire Homes in Cleary Park said it was waiting for two months’ worth of subsidies.

“This is killing us. We, as managers, not only have to focus on the day-to-day challenges of running a home such as ours, but also have to fundraise extensively and be constantly concerned about our lack of funding,” she said.

Port Elizabeth Mental Health director Limeez Arends said it was also waiting for its subsidies.

“It is very frustrating given the official memorandum from the department promising payment by the end of May 2018,” she said.

DA spokesman Kobus Botha said there were 3 000 NPOs on the department’s system.

“The non-payment of subsidies has a very negative impact. They can’t pay their accounts in time and this affects their creditworthiness,” he said.

Botha said the implementation of the new payment system had not been discussed with the portfolio committee.

“I think it is safe to say that payments to NPOs are in total chaos,” he said.

Baart did not respond to questions on the new system, how much it had cost, and specifics about the problems.