In South Africa, audit finds irregularities in Beauty Hub funding — Daily Maverick
In South Africa’s Gauteng province, a forensic audit found problems in the management of funds by the non-profit Beauty Hub Academy, which received R144 million from the Gauteng Department of Social Development in the 2017/18–2023/24 financial years. The money was allocated for training hairdressers and beauty service specialists, as well as for services for residents of homes for the elderly, Daily Maverick reports.
According to the publication, the academy was among the department’s most heavily funded organisations. In the 2023/24 financial year, it received R30 million to train 500 students and ranked second by funding volume. By comparison, the average grant for child and youth care centres that year was R2.6 million.
Transfers to a private company
A draft report by FSG Africa, submitted to the department on 23 April 2024, found that subsidies were periodically transferred from the non-profit Beauty Hub Academy to the commercial Beauty Hub Academy (Pty) Ltd without the department’s approval. Commercial entities are not eligible for such funding.
The directors of the private company were Joel Nkomo and Daisy Gama. In the non-profit organisation, Nkomo was the academy’s head, while Gama was the treasurer. Auditors also noted that financial statements for 2021/22 and 2022/23 combined the accounts of the non-profit organisation and the private company. In addition, the academy leased two vehicles from the company for R50,576 per month.
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Rent, repairs and disciplinary proceedings
According to the report, the academy spent almost R1.2 million in public funds on renting its headquarters from Sehlule Properties, whose directors are also Nkomo and Gama. FSG Africa pointed to a possible conflict of interest, as Gama may have indirectly benefited from rental payments and repairs. In 2022, the department funded repairs to a site in Johannesburg for R750,000 and a further R750,000 for repairs to another leased facility in the West Rand.
Auditors also found that between 2020 and 2023, Beauty Hub Academy paid R8.4 million for catering to Edge Promotions and Events (Pty) Ltd, owned by Nokwakha Gama, Daisy Gama’s daughter. According to FSG Africa’s conclusion, Daisy Gama did not recuse herself from a board meeting in September 2019 where the engagement of her daughter’s company was discussed. Gama and Nkomo did not respond to journalists’ requests for comment.
FSG Africa recommended disciplinary measures against four senior department officials, including Onkemetse Kabasia, Solly Ndweni, Themba Msimanga and Mbali Ndlovu. Department spokesperson Motsamai Motlhaolwa said disciplinary proceedings were ongoing: four officials received final written warnings, no further disciplinary action was taken against one employee due to insufficient evidence, and hearings involving another eight people had not been concluded. Following the audit findings, the department stopped funding the academy in the 2024/25 financial year.
