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Department of Social Development Department of Social Development 2020/09/21 - 22:00

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Department of Social Development Call for proposals for NPO for 2021-2022 Application for funding - Business Plan.pdf

Published 2020/09/21 - 22:00

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Social Development (WCPP)

Dsd on funding model, monitoring and evaluation process of ngos in province, 15 june 2021, chairperson: mr g bosman (da), meeting summary.

Video:  Standing Committee on Social Development, 15 June 2021,  09:00

The Department of Social Development (DSD) briefed the Committee virtually on its funding model and the monitoring and evaluation of non-governmental organisations in the Western Cape.

It informed the Committee that the funding of non-profit organisations (NPOs) represented a large part of the Western Cape government's, and specifically the DSD's, budget.  The Department contributed significantly to the lives of the poor and vulnerable through this funding. In the 2020/21 financial year, a total of 2 193 NPOs had received funding from the DSD to further policy objectives and priorities. Of these, 61 were found to be non-compliant.

It also described the funding process that took place within a three-year funding cycle, in which programme managers analyse and assess the business plans and application forms in terms of the DSD-approved funding criteria and predetermined specifications. Funded organisations were assessed on their current performance, while new organisations were assessed on their capacity, and site visits were conducted. The Department had line programmes to monitor and assist the 2 193 funded NPOs. Monitoring and evaluation tools were being used by M&E officials and social workers, and if any non-compliance was identified, the line programmes would develop a Service Delivery Improvement Plan (SDIP) for NPOs to comply with within a three to six month period. Follow-ups were done within a six-month period to ensure the SDIPs were implemented to improve the quality of service delivery by NPOs. If needed, further capacity building and support was provided by the capacity building unit in the areas of finance and governance management.

The DSD's line programmes assist NPOs with:

• Registration of NPOs as old age homes, in-patient treatment centres, child and youth care centres, early childhood development facilities and after school care facilities (funded and unfunded NPOs);
• Registration of service delivery programmes at CYCCs and ECDs (funded and unfunded)/diversion programmes etc);
• Training and registration of carers/ECD educators;
• Accurate completion of non-financial data, progress reports and contracts; and
• Any new NPO which applied for funding would be assessed by line programmes and be guided to comply with legislative norms and standards

Members wanted to know what remedial action had been undertaken to assist the non-compliant organisations so that they were not rejected; wanted to understand the processes that led to unannounced visits, and if they were only a result of complaints; wanted to find out if the R3 600 unit costs of old age homes happened automatically, or if one had to apply, because normally old age homes received a subsidy; asked if the Department did quality checks when carrying out its unannounced visits, such as inspecting the quality of the products bought, and if that inspection was part of monitoring and evaluation.  They also requested a detailed budget breakdown of the R15.3m spent on youth development; wanted to know the number of NGOs in Khayelitsha that had been funded, especially those involved in dealing with gender-based violence (GBV); and asked what would happen when a compliant NPO needed more funds because of its extra work, and what processes it should follow to get more money.

Meeting report

Western Cape Department of Social Development briefing

Mr Charles Jordan, Chief Director: Children, Families and Early Childhood Development (ECD), Western Cape Department of Social Development (DSD), said that funding to non-profit organisations (NPOs) represented a large part of the Western Cape government's, and specifically the DSD's, budget.  The Department contributed significantly to the lives of the poor and vulnerable in the Western Cape through this funding. In the 2020/21 financial year, a total of 2 193 NPOs had received funding from the DSD to further policy objectives and priorities. Of these, 61 had been found to be non-compliant.

He said the funding process took place within a three-year funding cycle. The notification of the intent of the DSD calling for proposals was done via advertising in the media and circulars. Business plans and application forms were submitted by NGOs, which set out the main cost drivers of each project/service output to one central point in the DSD. Programme managers analysed and assessed the business plans and application forms in terms of the DSD-approved eligibility, funding criteria and predetermined specifications. Current funded organisations were also assessed on current performance. New organisations were assessed on their capacity and site visits conducted. Programme managers compiled a schedule of all NGOs recommended for funding, and those which were not. The funding schedule was recommended by the relevant chief director and head of Department. The Funding Schedule was approved by the Minister of Social Development. Successful and unsuccessful NGOs were notified of the outcomes.

The Department’s executive management approved the following funding criteria:

(a) Track record of previous/current performance.

The evidence of a track record of previous performance could be obtained from a sub-programme monitoring report for the previous financial year, or from a monitoring and evaluation rapid assessment report for the previous financial year, or from two quarterly reports for the previous financial year, or from an on-site monitoring and evaluation report that included an assessment of service delivery implementation. Reports must be certified by either the appropriate programme director/manager or by the monitoring officers as a true reflection of the status of the services delivered. It was contended that such a certified report provided evidence of a track record indicating that the NPO was competent and capable of rendering the service.

(b) Legislative compliance

The Department had to verify that the NPO/Section 21/Trust registration of the residential facility, non-residential facility and/or social service organisation was valid. There had to be verification by the relevant programme that the organisation/services were legally registered in terms of any other service-specific related legislation -- for example, the Children’s Act, Older Person’s Act etc -- that required such registration.

The following funding methods were used in respect of social welfare and community development services that were aligned to the DSD’s annual performance plan (APP):

• Project or service outputs;
• The unit cost funding method would, where possible, be used for the funding of residential and non-residential services. Unit costs were reviewed annually and funding level increases may be implemented as additional funding became available. Unit costs applied to old age homes, Child and Youth Care Centres (CYCCs), shelters and ECD facilities;
• The post funding method, where possible, should be used to determine funding allocations. Post costs were reviewed annually and funding level increases may be implemented as additional funding became available. Funded posts includes social workers and administrative staff;
• Funding may include seed funding for emerging organisations, pilot/new projects, funding for non-consumables such as furniture, equipment, accommodation and vehicle rental as required to render a specific programme or project.

With regard to monitoring and assistance to NGOs, the Department’s line programmes monitored and assisted the 2 193 funded NPOs per annum, or alternatively in a three-year cycle, according to the relevant contract legally entered into between the NGO and the Department.

Monitoring and evaluation (M&E) tools were being used by M&E officials and social workers, such as:

• Desktop monitoring (annually);
• On site monitoring tool (three-year cycle);
• Quality assurance tool (two-year cycle for NPOs that receive more than R2 million);
• Mentoring and evaluation tool (three-year cycle);
• Rapid assessment tool (annually and part of spot check);
• Financial inspection tool (NPOs red flagged);
• Audit financial analysis tool (annually).

This entailed, amongst other things, the assessment of:

• Progress reports submitted by NGOs on a quarterly basis;
• Verification and validation of non-financial data -- for example, a register of beneficiaries of each NGO;
• Targets, outcomes and activities as prescribed in the contract;
• Income and expenditure per quarter;
• Audited financial statements on an annual basis (September-December of a particular year).

If any non-compliance was identified, the line programmes would develop a Service Delivery Improvement Plan (SDIP) for NPOs to comply with within a three to six month period. Follow-ups were done within a six-month period to ensure SDIPs were implemented to improve quality of service delivery by NPOs, and if needed, further capacity building and support would be provided by the capacity building unit on issues of finance and governance management.

Mr Jordan said there were line programmes to assist NPOs with:

Ms R Windvogel (ANC) asked the Department to provide full details about the 2 093 funded NPOs, including the 61 that had been found to be non-compliant. She wanted to know what remedial action have been taken to assist the non-compliant organisations so that they were not rejected.

Mr Jordan responded that all the details of the NPOs were indicated at the back of the up-coming annual report. A list had been sent to the Department in November last year. It was mainly the ECDs that were non-compliant about registration. The operation certificate was valid for five years. Thereafter, the organisations got a notification to re-apply. Sometimes it happened that some of them did not re-apply to be considered for operation, but they were assisted to be registered again.

Ms A Bans (ANC) wanted to know the processes that led to unannounced visits, and if they were a result of complaints. She asked if the R3 600 unit costs of old age homes happened automatically or if one had to apply, because normally old age homes received a subsidy. She enquired who was funding the NGOs, because they were guided and given assistance in their applications by the DSD. She reasoned that many NPOs in the Beaufort West region were struggling to access funding from the Department. They were told to get assistance from an NGO in Oudtshoorn because their assistance for applications was outsourced to it. She said when one applied for assistance, it meant one did not have money. It was difficult for NPOs in Nelspoort and Merweville to get to Oudtshoorn for assistance with their applications that had to be submitted to Beaufort West, which was very far away. Lastly, she wanted to establish if the Department took action against NPOs that were not changing their boards, because there were criteria that were looked at when changing boards.

Mr Jordan replied that unannounced visits were done when the Department got a complaint from a whistleblower or member of the public. Detailed information about these unannounced visits would be sent to the Committee.

He said the matter of unit costs at old age homes was not automatic. Every three years, the old age home had to apply with a business plan to get a subsidy. In an old age home, there were three categories of people. Category 1 comprised those who were 60 years old and healthy, and could do things by themselves. Category 2 consisted of elders who needed assistance, even though they could do things on their own. Category 3 was made up of completely dependent elders, who were sick and frail and needed to be monitored 24 hours a day. It was the old age home that determined these categories, and a social worker or doctor would do an assessment to classify them. The social worker would then sign a certificate which was linked to the subsidy to confirm the category one was in.

He said the Department tried to get to all rural-based NGOs with applications. The application could be emailed. It was not necessary to travel. Help was also given telephonically.

On the changing of boards, he explained that each board had a constitution. Every two years, a new board had to be elected. The NGO had to advertise in local newspapers for new board members from the community. He was aware of one case of a board that had not changed for a long time, but the Department had picked this up and did not fund it. The Department looks at the constitutions and offers help to iron out challenges, but it does not interfere in the election of boards. It could not punish a non-compliant NPO it did not fund, but it could be deregistered by the national Department if it did not try to be compliant.

Mr R Mackenzie (DA) enquired about the status of the fraud cases the Department had spoken of. Did the Department do quality checks when doing its unannounced visits -- for example, inspecting the quality of the products bought and if that inspection was part of monitoring and evaluation? He wanted to know if there had been any findings on that. He also wanted to establish where the process of appropriated funds started, and how people could access those funds. What training was in place to ensure NGOs knew how to produce business plans to get funding? Had the Department had ever considered making use of an outside company to check if complacency had not crept in, to ensure everything was up to standard seeing that monitoring was in-house?

Mr Jordan explained that monitoring looked at several other things upon receiving audited financial statements. It looked at the food, menu, laundry and sluice rooms, and fire extinguishers, and monitored when nurses administer medication. It even looked at the cleanliness of the place. The Department had donated sanitisers and personal protective equipment (PPE) masks, and provided training on how to use these sanitisers.

On fraud, he said one organisation had been dealt with, and information had been forwarded to the South African Police Service (SAPS). The Department stopped doing business with it.

About business plans, he made it clear the Department did provide informal training by conducting workshops in communities, even though it could not be done in all communities. The same assistance had been given to the ECDs, especially on application forms. The Department also made use of external people or organisations, including a professionally registered nurse, to monitor its work. Internally, there were managers and directors who checked the reports to ensure complacency did not happen. He added that the APPs included the priorities and needs assessments of communities. Funding was based on the targets the Department wanted to reach.

Ms Leana Goosen, Chief Director: Social Welfare and Restorative Services: DSD, added that the Department prioritises required services and preferences that would be given more than to others, based on the gap analysis.

Ms W Philander (DA) asked about the point at which the teams or social workers went to these facilities and if this was when there were complaints, because the Committee had visited an old age home in Paarl which was located in a residential area and surrounded by informal settlements. She wondered how this facility was conducive to its residents, and how the Department evaluated it, since there had been an application to relocate it.

Mr Jordan said the Department did not manage and own the properties -- its role was to approach municipalities when there was a need for a facility. The Department only facilitates, but did not sign the lease.

Mr G Brinkhuis (Al Jama-ah) asked for a detailed budget breakdown of the R15.3m spent on youth development

Mr Jordan said those funds were used for youth cafes in the metro and rural areas, and promised the budget breakdown would be sent to the Committee.

Ms N Bakubaku-Vos (ANC) wanted to know how many NGOs in Khayelitsha had been funded, especially for gender-based violence (GBV). She asked what would happen when an NPO needed more funds because of its extra work -- what processes could it follow to get more money?

Mr Jordan said information about NPOs based in Khayelitsha would be sent to the Committee.

ECDs did not get an automatic increase when their workload increased, but they had to submit a business plan which would be assessed before funding was provided. The situation also depended on the occupancy certificate issued by the municipality. If there was over-crowding, that would pose a serious risk to the occupants.

Ms Goosen added that for future funding, the application of the organisation was referred to the municipality to issue a certificate, and the DSD work-shopped the applying NPO for compliance, but it could not guarantee it would remain compliant.

The Chairperson enquired if there had been consequence management implemented against an employee of a Malmesbury NGO who got involved in fraud, and asked how one ensured such individuals did not resurface in other NGOs.

Mr Jordan responded that the person involved in fraud had been criminally charged. She had been fired from the Jo Dolphin Swartland facility. There was a new board in charge, and the Department was satisfied with the work at the facility. He added that the Department did not have a blacklist to ensure individuals did not resurface, but it was aware of where the individuals had gone to.

Ms Windvogel asked if there had been organisations that had been suspended for poor service after they have been visited.

Mr Jordan said one or two organisations had been rejected because of poor infrastructure, especially in areas like the sluice rooms. These organisations got informed about shaping up before they were rejected.

Ms Bans remarked it was impossible to ensure compliance with a limited budget, but there was a need to extend a hand to the rural areas, as well and to ask how to bring the rural-based NPOs on board because they did good work -- better than those getting funding.

Mr Jordan, in his closing remarks, said the Department needed to see how to get everybody into the network. There were organisations that did good work but did not want funding from the Department because of the many application forms they had to sign. Unfortunately, the Department could not let public funds go unaccounted for. Compliance was important. There was a need to strengthen networks and ensure women, the disabled and children were safe. The DSD would try its best to see how it could support the NPOs and provide assistance where it was needed.

Resolutions

The Committee resolved the Department should submit reports on fraud cases and unannounced visits and their outcomes, and forward a report about the old age home in Paarl. It further proposed conducting an oversight visit to Worcester in connection with a vandalised and looted old age home.

Adoption of Committee reports

The Chairperson took the Members through the draft Committee report on the Haven Night Shelter in Sea Point, and the Sanitary Dignity Project in Paarl document, page by page.

Mr Mackenzie moved the adoption of the report.

Ms Philander seconded the motion.

The report was adopted with minor amendments.

The Chairperson took the Members through the draft Committee's activity report for the 2020 financial year, page by page.

Ms Bans seconded the motion.

The report was adopted with no amendments.

The Chairperson took the members through the Committee's quarterly report (January 2021 – March 2021) page by page.

The Chairperson took the Members through the tracking document, page by page.

Mr Mackenzie proposed the adoption of the report.

Mr Brinkhuis seconded the proposal.

The Committee considered the draft Committee programme, but did not adopt it.

The meeting was adjourned.

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• WC Social Development: Funding, Monitoring and Evaluation of NGOs

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What is a 403(b) plan?

• 403(b) contribution limits
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• How to invest
• How to withdraw
• Pros and cons of 403(b)s
• 401(k) vs. 403(b)
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403(b) Plan: Definition, Example, Explanation

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• A 403(b) plan is a retirement plan for employees of public schools, nonprofits, and religious organizations.
• A 403(b) plan is a tax-deferred option that invests your money in annuities and mutual funds.
• Employers choose how their 403(b) plans are structured and what options employees can pick from.

It can take a lifetime to save up enough money to retire. That's why it's important to know what your employer-sponsored retirement options are as soon as possible.

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Check out the best retirement plans .

A 403(b) plan is a tax-deferred retirement account that's generally for employees of public education institutions, nonprofits, and some religious organizations. The employer must meet IRS eligibility standards to offer a 403(b) plan to its employees. 

You may be able to contribute a portion of your pre-tax earnings to a 403(b) plan if you work in one of the following sectors:

• Public primary, elementary, or secondary education
• Public colleges or universities
• Public schools run by American Indian tribal governments
• A 501(c)(3) tax-exempt organization
• Cooperative hospital organizations
• A church, synagogue, mosque, temple, or ministry

403(b) contribution limits in 2024 and 2023

For 2024, employees under 50 can contribute up to $23,000. Folks 50 or older can contribute an additional $7,500 catch-up contribution ($30,500 total).

Employees who have been with the same organization for at least 15 years and whose average annual contributions are less than $5,000 per year are eligible to contribute an additional $3,000 per year for up to five years. That means, if you're 50 or older and have had the same employer for 15 or more years, you can contribute up to $33,500 a year for at least five years.

Employee and employer combined contributions in 2024 can be up to $69,000.

In 2023, employees under 50 could contribute up to $22,500 (50 or older could contribute an additional $7,500 for a total of $30,000 total). 

It's important to note that starting in 2026, you'll no longer be able to deposit catch-up contributions to a traditional 401(k) plan if you make over $145,000 annually. Instead, those contributions must be deposited into a Roth 401(k).

How 403(b) plans work 

403(b) plans are very similar to 401(k) plans, as they allow you to contribute a certain amount of your pre-tax income to a retirement fund, where it can grow tax-free until you begin to take distributions. 

No two 403(b) plans are the same. Individual employers work with companies that provide and manage 403(b) plans to determine what they want to offer employees. Options could include offering matching funds, the ability to take loans against a balance, and choices about how employees' money is invested. 

Matthew Sanchez, a Certified Financial Planner and wealth advisor at Biechele Royce Advisors  says, "Employers typically contribute to these plans, generally, 1%-5% of compensation, much like their for-profit counterparts do."

Most 403(b) plans allow you to make elective deferrals, which is how much of your pay goes into your retirement account. Your employer may choose whether to make its own contributions to your fund. Although employees aren't required to, many added contribution matches as a benefit of employment. 

How to invest in a 403(b)

Your employer determines what kinds of investment choices you have as a 403(b) plan participant. Generally, investment options are more limited compared to other tax-advantaged retirement plans. 

With a 403(b) you can invest in the following options: 

• Mutual funds
• Low-cost bonds
• Stock index funds
• Target-date funds

Kenny Senour, Certified Financial Planner with Legacy Wealth Partners LLC , says that plan sponsors are the ones who determine what features their plans will have and what kind of vesting schedule they will offer. Their employees often can self-direct their plan investments based on a menu of options provided to them. 

"Historically, 403(b) plans' main investment options were annuities," he adds. "That type of option comes with some ugly repercussions in the form of complexity, potential surrender charges, and opportunity cost in the form of meager returns versus a comparable mutual fund. Fortunately, for the sake of simplicity and transparency, many of these plans have moved toward a more 'open architecture' structure, where participants have access to a streamlined investment menu of lower-cost mutual funds."

How to withdraw from a 403(b)

The date you can begin withdrawing money from your 403(b) plan may be determined by your provider. Though the IRS sets the minimum age for penalty-free withdrawal at 59 1/2, your plan might have a different age written into the contract.

If you haven't already started taking withdrawals from your 403(b) plan by the time you're age 72, you are required to start at that time.

Similar to a 401(k), 403(b) plans don't allow you to withdraw money before age 59 1/2. Early withdrawal may result in a penalty fee unless you:

• Are no longer employed with the sponsor of the plan
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If you withdraw funds too early and don't qualify for the above exceptions, you'll be charged a 10% penalty fee of the amount withdrawn. For example, if you're younger than your plan's minimum and want to take $10,000 out of your 403(b) account to pay for home repairs, you'd have to pay income tax on that amount — plus an extra $1,000 as a penalty ($10,000 x 0.10 = $1,000). 

However, if you took that money from your plan as a loan, you wouldn't have to pay taxes or penalties on it. But you'd still have to pay the money back and may have some interest applied, as well.  

"The types of withdrawals available to employees in retirement are plan specific," Senour says. "But, typically, employees have the option to rollover their account to another qualified retirement account, take a lump sum distribution, or set up 'installment payments' on a monthly or quarterly basis."

Any withdrawal is considered taxable income for the year in which it is received, except for money that was originally contributed to the account after taxes were paid. According to the IRS, if you don't take at least the minimum amount required from your account, "you are subject to a nondeductible 50 percent excise tax on the difference between the required minimum distribution and the amount actually distributed."

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Should you invest in a 403(b) plan?

The 403(b) is the standard for employer-sponsored retirement savings in the nonprofit and public education sector. If you work in any of these eligible industries and want to plan for retirement, you'll want to speak with your employer about what 403(b) options are offered. They are the ones who determine the details of what's available to you through a company 403(b) plan, what rules apply, and when you can participate. 

Once you have that information, consult with a financial advisor to determine how you can best use the plan to achieve your retirement goals.

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