Department views beauty academy that gets millions

Henry

Millions of rands in subsidies that were awarded to a Johannesburg beauty academy, among others, are now part of an investigation by the department of social development.

According to the department, several officials have already been provisionally suspended pending the outcome of the investigation.

The investigation was launched after GroundUp revealed in a report that generous grants of more than R56 million were awarded to two non-profit skills development organisations, one of which was the beauty academy The Beauty Hub Academy.

The funding of these organizations comes amid enormous cuts to the government grants of various non-profit institutions, including organizations that support people with HIV and the elderly in need.

“The department wants to assure members of the public that the relevant non-governmental organizations (NGOs) form part of the department’s investigation into NGO funding. Some officials have been suspended as a precautionary measure,” the department said.

The purpose of the investigation is apparently to establish whether “funding is allocated correctly and whether the department receives value for money”.

“Gauteng gives the highest NGO grants in the country, aimed at tackling the socio-economic challenges facing vulnerable people.”

The department says issues that urgently need attention have already been highlighted and an independent NGO evaluation and award panel will be set up to carefully assess and consider applications for government grants.

This panel will also continuously evaluate NGOs’ performances so that funding can be reviewed periodically during each financial year.

RNews previously reported that financial statements show that R30 million was allocated to the Beauty Hub Academy during the 2023-24 financial year. Daracorp, a shelf company, received R26 million in government subsidies during this financial year.

These two institutions also received millions of rand in grants during the previous financial years. Beauty Hub received R33.7 million and Daracorp R23.9 million – which amounts to a combined amount of R113.7 million over two years.

In April last year, the department proposed severe cuts to key funding which would mean R418 million would be cut from not-for-profit organizations that provide welfare services. This money would then apparently be diverted to the department’s research and development programme, as well as its poverty alleviation initiatives.

The department later revised its budget and the amount allocated to the above organizations was reduced by R233 million.

However, Daracorp and Beauty Hub’s funding was almost untouched.

The two organizations’ government subsidy far exceeded that of any other organization in 2022-23.

While Beauty Hub received more than R33 million and Daracorp almost R24 million, most other organizations received less than R1 million each of the almost R2.3 billion in funds paid to non-profit organisations.