Gauteng Provincial Treasury must investigate corruption in school uniform cooperatives

Issued by Refiloe Nt’sekhe MPL – DA Gauteng Shadow MEC for Social Development
02 Oct 2024 in Press Statements

The Democratic Alliance (DA) in Gauteng demands that the Gauteng Provincial Treasury launch a full investigation into the conduct of staff at the Department of Social Development (GDSD) in the handling of sewing cooperatives enlisted by the department to supply school uniforms.

In May 2024, the DA issued a statement indicating that sewing cooperatives had been abandoned because the former MEC for GDSD, Mbali Hlophe, refused to pay them for services rendered. At that time, MEC Hlophe denied knowing the cooperatives even though GDSD’s social media posts depicted her handing out uniforms made by cooperatives. Further investigation and oversight inspections by the DA revealed that the department had implemented an odd procurement process whereby certain cooperatives would become main contractors and others would become subcontractors. This means that the department was still using cooperatives as main contractors.

For about seven years, the GDSD has failed to spend on school uniforms because the Treasury has released a Circular (21) stating the government cannot procure goods and services from NPOs. During all Portfolio Committee meetings, the department repeatedly highlighted that they had discovered a way to comply with Circular 21. However, every year, funds remained unspent and this has left many Gauteng learners in desperate need of these uniforms stranded.

One of the suggested solutions involved hiring a company as the primary contractor and using cooperatives as subcontractors. In December 2023, the department implemented this odd method and procured uniforms. As of August, many of the cooperatives were still not paid. Some had even staged an overnight sit-in by the DSD provincial offices.

In August 2024, the Gauteng Social Development Portfolio Committee visited some NPOs who used to make these school uniforms in the Sedibeng area. This visit revealed some horrifying practices by the department. These include the following:

1. Many NPOs stated that GDSD staff in the department had cooperatives, which they “fronted” using friends’ or relatives’ details.

2. NPOs were registered as main contractors, and the department-imposed subcontractors on them.

3. The main contractor would get smaller quantities than the subcontractor. One of the subcontractors is alleged to be a company from KZN.

4. In some instances, the main contractors were contacted by the sub-contractor, they saw the quality of uniforms from this KZN company and containers from Dubai, and they refused to align with them as this was inferior quality and would damage their reputations in their community.

5. Many sub-contractors were not legitimate: the existing cooperatives were told to take their sewing machines to these sub-contractors so that they seemed to have capacity when inspectors visited.

6. Main contractors refused to sign memorandums of agreement with subcontractors because they did not appoint them—the staff or department had appointed them.

7. Main contractors were given expired purchase orders; others received the tenders via WhatsApp without a purchase order.

8. Orders were also given to cooperatives at the last minute; this is unnecessary pressure when staff know the whole year that uniforms will be needed in January. It was bad that some cooperatives were told to buy uniforms to meet delivery dates.

9. There was an inconsistency with the orders: the department would give a cooperative an order of 150 uniforms, and yet when they were delivered to the school, the school principal would be expecting an order of 300.

10. NPOs, where members were vocal, were already being punished mainly by refusing to give them orders.

The DA has long called for GDSD to transition cooperatives into businesses while protecting them from big businesses. The DA has also proposed that the tender for school uniforms should be divided into smaller amounts to give opportunities to more small businesses. However, the department has ignored our warnings, leading to improper tender procedures and the exploitation of cooperatives.

The DA will write to the MEC for Treasury and Economic Development, Lebohang Maile, demanding an urgent investigation into the corruption allegations against GDSD staff. This includes looking into the former GDSD MEC Mbali Hlophe, if necessary. In our letter we will demand that MEC Maile provide clear timelines as to when the investigation will be concluded, the public release of outcomes, and the implementation of recommendations. There must be no delay in justice, and those found guilty must face the consequences.

An empathetic DA government would make it easy for small businesses to do business with the government and treat them with the dignity they merit, while also taking a stand against corruption.