Payment delay leaves KwaZulu-Natal charities struggling
Last year GroundUp reported that the NPO sector had its funding budget cut by the KZN social development department by R60-million.
On Thursday last week, the department issued a circular informing NPOs of problems processing payments.
This has effectively left organisations with no funding since February, and further delays payments for the first quarter tranche of the 2025 financial year, which includes March, April and May.
Some are already battling, as delayed payments have become common since the provincial department introduced the new tranche payment system in October 2023. Several NPOs this week told GroundUp that this won't be the first time they have been paid in arrears.
The first quarter tranche payment for this financial year was meant to run from April to June. But some organisations say they haven't even received their March payment.
Julie Todd, manager of the Child and Family Welfare Society of Pietermaritzburg, said that department-funded organisations only got their December 2024 payments in the January to March tranche. This was confirmed by the department. According to Todd, her organisation has had to take out loans to pay staff.
CEO of Lifeline Zululand in Richards Bay Bethel Jewlal said the delayed payment had left the organisation in 'a dismal situation'. LifeLine Zululand offers free mental health services. If payment doesn't arrive next week, they will struggle for two months to pay staff salaries and will have to pay penalties on late payments of bills, she said.
Jewlal said in the past her staff have had to to take out loans to cover their personal expenses while the organisation waited for payment from the department.
Christelik Maatskaplike Raad, which provides child welfare services, has used its reserve funds to stay afloat during previous payment delays. Following the latest delay to payments, staff will likely not be paid this month, said social work manager Carike Forsman.
Recently, due to a lack of funds, the organisation has not been able to pay its electricity and telephone bills, said Forsman. 'The Child and Youth Care Centres also had to cut food budgets as there are no funds for proper meals.' To save money, the organisation has had to make salary cuts and is now considering retrenchments.
Forsman said they tried contacting the department last month but received no correspondence about payment until the circular last week.
The late payment has also left Emuseni, an old age home in Pietermaritzburg, struggling to pay for essential items such as medicine, adult diapers and food for residents, said general manager Sue McAlister. 'It's heartbreaking that we spend every month-end with our hearts in our mouths, wondering how we are going to keep it all going, and when we will be paid.'
Some organisations have had to make alternative plans to find funding. Fiona Balgobind, director of the Pietermaritzburg Child Youth Care Centre, said the organisation had been approved for funding from the lottery. Had this not come through, she would not have been able to pay salaries or expenses this week, she said.
The department said in the circular that the delay was due to the implementation of new rules by the National Treasury. It committed to making the first payment by the end of April. It said
Spokesperson Thube Vilane told GroundUp that the change to the new system has been challenging for all government departments using the Basic Accounting System (BAS) system.
The Treasury also sent its own circular to government departments, explaining the situation on 15 April. According to Vilane, the department is still within the payment deadline as the current tranche only has to be paid by the end of the month. But there is a chance that the payment may not arrive next week. Vilane said the department is currently working to solve the BAS issues.
This article first appeared on GroundUp. Read the original article here.
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