David Macfarlane
Top executives at the country’s largest channel for funding to non-profit organisations, the National Development Agency (NDA), are apparently flouting the agency’s own funding procedures. And, while NGOs serving South Africa’s poorest citizens struggle to remain afloat as the NDA continues to be chronically unable to disburse funds at its disposal effectively, the agency’s chief stands accused of lavishing funds on projects with which he has personal connections.
NDA insiders accuse acting CEO Delani Mthembu of bias towards certain projects based in his home province of KwaZulu-Natal.
The Mail & Guardian has seen documents concerning three projects in the province that have received NDA funding ranging from R270 000 to R5-million.
In total these three projects have received more than R7-million. Comparison with figures the NDA supplied to the M&G last week shows this is more than 60% of the amount the agency allocated to projects in the whole of KwaZulu-Natal between May 2000 and December last year.
In each case, the M&G has been told, NDA funding procedures were ignored, and in each case Mthembu has family or other personal connections with the projects in question.
Asked about this, Mthembu said: “I wish to assure you that the NDA’s assessment, approval and disbursement process is a thorough one that is undertaken by all board members. Also my involvement in NGOs and other private, independent entities is public knowledge and I declare conflicts of interest whenever necessary.
“As a committed citizen of the country, I have been and continue to be involved in development projects and programmes, not only in KwaZulu-Natal but also throughout the country.”
However, NDA sources say about 70% of NDA-funded projects in KwaZulu-Natal are “not genuine”, meaning the projects don’t exist or were formulated only after receiving NDA funding.
Mthembu did not answer questions about how their funding applications were assessed.
The core function of the NDA, which was established by a 1998 Act, is to channel government and donor funds to non-profit organisations in their battle against poverty a function it has been struggling to perform since opening its doors in April 2000. As a result, a wide range of the country’s high-priority areas remains seriously neglected adult education (including literacy training), early childhood development, HIV/Aids awareness, domestic violence, land reform, human rights education and rural local government, among others.
The M&G reported on several occasions last year that the NDA was consistently falling well short of its disbursement targets. Last week Mthembu told the M&G that the NDA disbursed more than R142-million between May 2000 and December last year. The NDA’s own figures show that this is less than half the money the agency had available for disbursement in that period.
Large numbers of cash-strapped NGOs are still waiting for the NDA to assess their funding applications, and in some cases even to return phone calls. One has had to submit its application three times: the NDA lost the first, which the NGO hand-delivered in April; lost the second, hand-delivered in June; and eventually gave a reference number in December to the third application. Nine months after the NGO’s first application, it still awaits the NDA’s assessment.
At a recent Southern Africa Institute of Fundraising workshop, about half the participants felt they “should give up on the NDA”, an NGO source says.
“Mention the NDA and NGOs roll their eyes … They feel they might as well put their fundraising energies elsewhere as they’re nearly going bankrupt waiting for the NDA.” Representatives from organisations involved in human rights education, the disabled, small business, job creation, early education and welfare attended the workshop.
Amid mounting controversy last year around the NDA’s performance, the government announced in September that it was shifting responsibility for the agency from the Ministry of Finance to the Ministry of Social Development. Minister of Social Development Zola Skweyiya said at the time an audit of the NDA was necessary “so that its problems are known to everyone in South Africa”. Skweyiya has said nothing since then about this audit, and did not respond to the M&G’s faxed questions last week.
One beneficiary of more than R5-million in NDA funding is a trust in KwaZulu-Natal that boasts Mthembu’s brother as a board member, the M&G has been told. Especially favoured by Mthembu, the Uphaphe Empowerment Trust aims to help subsistence and small-scale farmers gain access to markets. But M&G sources say NDA funding procedures were not followed, and the project is “a spectacular failure”.
Another organisation, the Ethalaleni Development Trust, is apparently based in Mthembu’s hometown. It targets rural women and youth for skills training, and recently received more than R1,5-million from the NDA. Yet this trust, insiders say, has three different NDA-allocated reference numbers for the same project, and has received multiple, overlapping grants as a result. Relatives of Mthembu are involved in this trust too, it is understood.
“There’s no proper assessment,” the M&G has been told. “It’s a chronic problem. NDA management relish this chaos, because it means they can do what they want.”