Audit flags conflicted funding while Gauteng officials remain on duty

A forensic audit has identified possible conflicts of interest, related-party transactions and weak oversight in Gauteng social-development funding for the Beauty Hub Academy. Disciplinary processes recommended against four senior officials remain incomplete, while the department says the processes are ongoing.

A large grant stream for a beauty academy

The Beauty Hub Academy received R144-million from the Gauteng Department of Social Development between the 2017/18 and 2023/24 financial years. The nonprofit was funded to train 1,800 beauticians and hairdressers at campuses in Johannesburg, Tshwane, Carletonville and the Lenasia military base, and to provide hair and beauty services at old age homes. Funding rose from R14-million for 150 students in 2017/18 to R30-million for 500 students in 2023/24, when the academy was the department’s second-highest-funded organisation. By comparison, the average grant to a child and youth care centre was R2.6-million that year. The figures came from records obtained after a Promotion of Access to Information Act application and a successful appeal in the Western Cape High Court.

Audit identifies transfers and related-party spending

FSG Africa’s investigation report, handed to the department on 23 April 2024, said subsidies were periodically transferred from the Beauty Hub Academy nonprofit to Beauty Hub Academy (Pty) Ltd, a for-profit company that was not eligible for the funding. The private company’s directors, Joel Nkomo and Daisy Gama, also held positions at the nonprofit. The audit flagged the consolidation of both entities’ accounts and vehicle rentals from the private company at R50,576 a month. It also identified almost R1.2-million in headquarters rent from Sehlule Properties, whose directors included Nkomo and Gama, as well as department-funded renovations. These findings concern governance and eligibility issues identified by the auditors; they have not been established by a court.

Family connection prompts another conflict finding

Between 2020 and 2023, the academy paid R8.4-million for catering to Edge Promotions and Events (Pty) Ltd, owned by Daisy Gama’s daughter, Nokwakha Gama. The daughter wrote to the board about the possible perception of a conflict and argued that her company should remain eligible because her mother was not a director of Edge and had no role in its business dealings. FSG said the board decided in September 2019 that the advantages of hiring Edge outweighed the disadvantages, but that Daisy Gama did not recuse herself from the meeting. The arrangement illustrates why public grants commonly require disclosure of related interests, independent decision-making and records showing how supplier choices were assessed. Gama and Nkomo did not respond to questions sent by email and WhatsApp.

Disciplinary recommendations remain unresolved

FSG recommended disciplinary action against Onkemetse Kabasia, Solly Ndweni, Themba Msimanga and Mbali Ndlovu, saying department leaders had approved multimillion-rand grants without properly testing project viability. The report said Kabasia recommended R6-million for a manufacturing, distribution and aesthetics hub even though the academy had not formally applied and had supplied no business plan. It also said Msimanga approved budget deviations totalling more than R7-million without authority. FSG reported that some devices had been reset or reformatted and recommended further charges relating to possible destruction of evidence or department data. The department’s spokesperson said disciplinary processes are ongoing: four officials received final written warnings, one was not recharged because of insufficient evidence, and hearings against the remaining eight are still ongoing. Kabasia later became head of KwaZulu-Natal’s Department of Social Development.

Reported from dailymaverick.co.za, 2026-09-28. The Tender Wire is published by Otnox.