National Youth Development Agency on its Strategic Plan and Budget 2010-2013: follow-up

Meeting report

Transfer Issues and Merger
Mr Steven Ngubeni, Chief Executive Officer (CEO): NYDA, introduced the other members of the delegation who comprised the acting Chief Financial Officer, Mr Sello Nkoane and Ms Teboho Sejane, Business Strategist in the CEO's office. Also noted were Mr Baba Ntshobane, Parliamentary Liaison Officer for NYDA, and Ms Bernice Hlagala, Senior Policy Analyst in the Office of the Presidency.

At this point the Chairperson asked the reason that the Chairperson of the NYDA was absent. Mr Ngubeni replied that both the Chairperson and Deputy Chairperson were unable to be present. He said that the Minister would come to the meeting “later on”. The Minister however, later sent a letter of apology and explained that he was attending a Cabinet meeting.

Ms P Duncan (DA) asked whether the transfer of the funds from the Umsobomvu Fund to the NYDA would be dealt with in this meeting.

The Chairperson said this was on the agenda.

Mr Ngubeni said there were two parts to the presentation. Part one would deal with members' concerns and recommendations. These arose from the meeting of 21 April 2010 where the strategic plan and budget had been presented. The concerns and recommendations were contained in a “letter of invitation” from the Committee to the NYDA. This list under the heading “purpose” ended off with the point which requested a list of its projects.

The Chairperson asked whether this list was available. The list was available but had not been photocopied for members' to peruse, and a confusion ensued between Mr Ngubeni, Ms Hlagala who was the original recipient of the document, and the Committee Secretary. The Chairperson declared that whoever was to blame for the confusion, it was poor preparation which compromised the smooth flow of the meeting.

Ms Hlagala said she would make the document available to the Committee Secretary for distribution when she returned to her office.

Ms Duncan said that it was the CEO's responsibility to ensure that all the documentation had been duly received.

The Chairperson said that this was a very serious matter that the relevant documents had not been prepared for the meeting, and that it was an even more serious matter that the Office of the Presidency had not assisted in providing the document on time and to the correct person, that is, the Committee Secretary.

Ms Hlagala had mistaken the Committee Secretary for the Deputy Chairperson of the Committee and said that she had provided the document to such a person.

The Chairperson said there is no Deputy Chairperson of the Committee.

Mr Ngubeni proposed that the presentation continue and that his office would e-mail the document to the Committee.

Mr D Kekana (ANC) said that this “was not right”. He stated that if the NYDA could not account properly on a relatively minor matter, he did not see how it was possible that it could request for more funding and be accountable for a major matter. He said the fact that the document was not available was “a mess up”.

Mr Ngubeni continued his presentation and gave the detail of the merger between the former Umsobomvu Youth Fund (UYF) and the National Youth Commission (NYC). This was quite a lengthy and detailed process, and included final approval by the Presidency. The statutory requirements and the approval occurred on the 30 September 2009. Simultaneously, the take-on balance audit was completed for UYF, but the take-on balance audit for NYC would only be finalised by the end of this month. The bulk of the assets of both the UYF and NYC had already been transferred to the new body, the NYDA. The value of these respectively were R245 million and R5.3 million.

The liabilities were also transferred, consisting of R71 million for the UYF, and R4.6 million for the NYC. In the same vein, the staff from both former entities had been transferred, with the same conditions of service. The total number was 406. Of these, those who held fiduciary responsibilities, and other senior positions, had been requested to appear before this Committee, the purpose of which was to make a full disclosure of the activities of the NYC. Their response to this request was that they would comply once they had received a direct invitation from the Committee.

With regard to the annual reports for 2008/2009 for the UYC there was clear information on its number of loans disbursed, number of businesses provided with support, and number of jobs created. These statistics were given. The loans were worth R87 million, number of businesses given support were 12 095 and the number of jobs were 38 304. There were also statistics given for the assets, liabilities and reserves.

In the case of the NYC's annual report for the same period, the Auditor-General (AG) could not “express an opinion” on the information in the report. This was due to a lack of source documents, lack of transparent systems and controls, and non-compliance relating to performance reporting. A disclaimer was expressed with regard to the financial statements mainly as a result of insufficient supporting documentation. Consequently, this fell short of accounting standards and legislative requirements in relation to the management of funds totalling R7.3 million.

Furthermore, this situation set the scenario whereby the senior officials had not attended the meeting, nor had they made disclosures which would assist the continuation of business for the NYDA. The decision had therefore been taken to adopt the procedures and systems of the UYC which had been in a sound position. Before concluding, Mr Ngubeni's said the NYDA needed more funding and would negotiate with the Presidency on this. Lastly, the list of projects should be provided and its successes and failures “scorecard” should be made available.

Ms Duncan asked whether those staff previously in the employ of the NYC and now in the employ of the NYDA and who had been asked to disclose their activities, were given a due date by which this task should be completed. Her second question was on the number of jobs created and whether these were sustainable jobs. She said that the senior officials of the NYC should present and account to this Committee.

Ms Duncan said in view of the importance of the attendance of the Minister, that he be given a choice of three dates so as to accommodate his schedule.

The Chairperson asked that this point be taken by the Office of the Presidency.

Ms H Malgas (ANC) said that the budget vote was a very important component and that as a Committee it needed to consider what would be done. She referred to page 10 with regard to the audit fees. She asked whether this expense was for the new financial year or whether it was for the current year. This needed clarification. She said that the previous question of Ms Duncan was of great importance, and she felt as strongly about the matter as she did in terms of the officials being accountable to the Committee, as there seemed to be a tendency for the NYDA to take responsibility for those officials.

Ms Malgas asked for the date of the meeting between the NYDA and the Premiers and the President. She said also that the Auditor-General (AG), in its report, had noted poor compliance, and asked how the NYDA would follow up on that point.

Ms P Maduna (ANC) asked how many women were employed by the NYDA. Secondly, she asked how the NYDA would go about popularising the African Youth Charter.

Ms D Robinson (DA) said that the NYDA presided over an enormous amount of money, and in that regard, she wanted to know whether employees had job descriptions and whether their employment consequently was properly justified.

The Chairperson said she agreed with the emphasis placed on the above matter by Ms Robinson and asked whether the number of 406 staff employed was correct.

Mr Ngubeni responded to the questions on the AG's report saying that the document was not available, but that he would follow up this matter.

He continued with the next reply which was on job creation. He said that the presentation provided the number of jobs, but the number of those which were sustainable would be provided.

On the time frame with regard to making disclosure, he said there was no time frame and that he would ensure that it was in place as soon as possible. He said that the disciplinary procedures would also be put in place as soon as possible. This would be in regard to insufficient information having been provided to the AG.

The Chairperson said that the Committee would like to understand how far these processes were. The answer provided was not helpful.
Mr Ngubeni said that the first process was to secure the disclosures. He said again that the senior position staff had wanted a direct invitation from the Committee before they would consider appearing before the Committee. He confirmed that these staff remained in the employ of the NYDA and their disclosure was still a matter outstanding.

Ms Robinson asked if the delegation could clarify who they were, that is, were they transferred, and those who were not here and with whom they were negotiating, whether their names could be given.

Mr Ngubeni said that there were 36 people in negotiations, and that their names would be given in writing.

The Chairperson asked whether the five-person delegation was among those who had been transferred.

Mr Ngubeni said that 406 staff were the combined number from the UYC and the NYC. Among those invited to come before the Committee were the former CEO of NYC as well as other senior staff. He said that there had been some resignations.

Ms Malgas asked whether these staff were currently employed with NYDA.

Mr Ngubeni said that they were not, but some executive directors were in the employ of the NYDA.

Ms Robinson said that she would like to see the list of those names.

Mr Ngubeni said that there was a list. He said that of the two audits that had been done, the latest complete year was the 2008/2009 audit, and that was where the concerns were. The six month audit up to September 2009 was the take-on balance and showed a healthy organisation. But the portion ascribed to the NYC, was where the problem was because of the insufficient information being provided to the AG. In addition, although it was an unqualified audit, the disclaimer from the AG was due to the problems with the insufficient information from the NYC.

On the question of the percentage of women employees, Mr Ngubeni said that it was in the region of 46%.

Ms Sejane said that the merger with UYF absorbed a percentage of 70% women employees of that former organisation, as well as 6% disabled employees.

The Chairperson encouraged the delegation to continue to have a good representation of women employees.

Mr Ngubeni reiterated that thus far the answers required in writing were:
(a) The number of sustainable jobs
(b) The number of women and disabled employees.

Ms Duncan said that the breakdown per racial group and per province could be done at the same time.

Mr Ngubeni said the popularisation of the African Youth Charter was in process.

He said with regard to the job descriptions, these were inherited from the two former organisations, and that every employee had one. He said however, that the restructuring process would impact on these job descriptions.

The Chairperson said that they, the NYDA, were the leadership which would have to be ready to take over the reins from the leadership currently in place, and which would “be gone one day”.

Mr Kekana said that the changing structures should be based on need. He said it should be clearly stated what the purpose would be.

Ms Duncan asked if the delegation could address their replies based on the three-year strategic plan.

Ms Malgas asked in connection with the donor funding whether this would continue to be granted by the Flemish government, and whether the projects it supported were successful. She said that because the funding terminated in 2010, she would like to know how the projects would proceed.

Mr Ngubeni said that the Flemish government had renewed the funding and the projects were therefore proceeding. The IYDS was being reviewed to check for duplication. Financial provision however, had not been made for some of the initiatives. In terms of projects initiated outside of the NYDA, the youth component of those projects was their interest. This was particularly so for agricultural and rural development projects. In this instance a framework was being put in place, and would go through an evaluation process as well.

The Chairperson asked whether the loans given out had a particular format which would include the purpose and how it was disbursed.

Mr Ngubeni said there were two types of loans. A small to medium enterprise (SME) could loan up to R5 million as a capital injection. The micro loans would typically be granted to an individual young person whose business showed clear objectives with a thorough business plan. Businesses also could have a consultant assigned to it to help it remain viable and sustainable. In this kind of business the voucher system was used after the initial funding had been disbursed.

Ms Malgas asked whether this was any different from making a loan from a bank and whether a risk management structure was in place.

Mr Kekana asked whether the NYDA worked with co-operatives in rural areas and whether these would receive any training in running a co-operative.

Ms Duncan asked what the terms of payback of loans were. She then asked where these funds would be sourced since the Committee had heard in the presentation that the NYDA was underfunded. She also wanted to know what the criteria were in selecting a business worthy of receiving the loan.

The Chairperson put it to the delegation that the money awarded to their organisation was intended for beneficiaries spread across the country in members' constituencies. If she were to encounter a young person in her constituency needy of such funding, she wanted to know how she would physically work with the NYDA in ensuring that such a person's need was being attended to, and how the funding would be accessed. She said ultimately this was about bringing about a better life for such a person.

Mr Ngubeni said that the NYDA was in negotiation with the major banks to secure their assistance in partially funding some enterprises. The negotiation with the Premiers and President would take place soon to try and increase the funding. With regard to risk management, he said that the business plan was structured and assessed so as to minimise the risk. The application process was very thorough. As concerned the access, there were regional offices across the country where people could link up with the NYDA and members could also refer anyone to these offices for assistance.

At this stage, the first part of the presentation was concluded.

National Youth Development Agency
Mr Ngubeni said that the second part of the presentation would cover the briefing on the NYDA. He gave the background to the establishment of the organisation, and its aims and objectives. He listed the key performance areas (KPAs) of the organisation,  He listed the strategic foci over the MTEF period which included the finalisation of the merger, the establishment of provincial structures, and the finalisation of the Integrated Youth Development Strategy (IYDS), the Youth Directorates, and young people with disabilities, amongst others.

The KPAs were then broadened into “Key Deliverables”, which gave a target and a description of that target for each KPA. The targets were given for the MTEF period. The target was progressive over the period, for example under Education and Skills Development, the number of young people enrolled in Youth Build South Africa projects in the first year would be 100, and would increase so that by the last year would be 608. The presentation also covered the Capital Projects but only for the 2010/2011 period, and this was because the IYDS was awaiting completion. Amongst these there were the matric re-write, NYDA Contact Centre, and National Youth Service. He also listed the NYDA Programmes such as the Business Development Services. Next followed the organogram which detailed the Interim Structure and how this would function. Finally, he gave a list of the NYDA's performance thus far.


Please refer to attached powerpoint presentation for further details.

Discussion
Ms G Tseke (ANC) asked how the NYDA would focus on rural matters through its projects. She also wanted to know, under the National Youth Service, where such large numbers of youth would come from, and as stated, their period of work would continue beyond the World Cup. How would such a large scale project be funded?

Ms Robinson asked about two items which seemed to be the same thing in the presentation – under Economic Participation there was “Value of loans issued to young entrepreneurs” and “Value of loans disbursed to young entrepreneurs”. She asked what the Alumni Society would entail. With regard to the Matric Re-write, she asked whether this was a duplication of the work of the Education Department. She asked whether an accredited training institution was responsible for the training, and if it added value.

Ms Duncan was concerned about the statements made on job creation. She wanted to know where trainees received a salary or a stipend, and whether there was co-ordination with other government departments. Government was meant to create an enabling environment for job creation, rather than create the jobs per se. Lastly, she said it was imperative to have the Minister present so as to clarify whether the merger as well as the activities of the NYDA was a duplication of work of other government departments.

Ms Maduna asked how many youths had benefited from the NYDA.

Ms Malgas needed clarity on the National Youth Service because government already had a graduate and internship programme. She asked how the organogram was populated, and whether vacancies existed. The strategic plan and budget needed to be totally covered for the MTEF period, and this was not always the case in certain parts of the presentation.

The Chairperson said that there seemed to be a high number of jobs created. She asked where these were created, and what kind of jobs were created. A breakdown of all those statistics would be required.

Mr Ngubeni agreed with the comments about the MTEF period. With regard to the creation of jobs, he said that where a loan was provided it included the creation of jobs, and it was through this that an enabling environment was created.

The Chairperson asked if he could explain this latter point.

Mr Ngubeni said that with all beneficiaries of loans, the NYDA worked closely and knew their business well. That is the reason that those statistics (on job creation) could be obtained.

The Chairperson asked whether a list could be provided so that she could check whether this was the case in her constituency.

The Chairperson said the surest way to find out whether beneficiaries were receiving value added service was for them to write to this Committee on their experience with their application and relationship with the NYDA.

Mr Ngubeni said that the method of reporting was based on the principles used by the UYC, that is, as a guideline.

Ms Malgas said that the list of projects had been requested in a previous meeting and in their oversight duties the Committee would be making visits to those regional offices.

Mr Kekana said that the amount of criticism levelled at the NYDA was not to be concerned about, since it was healthy criticism meant to build a better organisation.

The Chairperson said the Committee here was not in the habit of “patting shoulders”.

Ms Sejane said that where the loan amounts showed what was disbursed in one year, this was a portion of the full amount since the disbursements were done in tranches, per year.

Mr Ngubeni said the volunteers in the clean-up campaign would be working over a three year period, and the presentation merely meant to highlight their participation in the World Cup – in other words this was not a project only for the duration of the World Cup. He said that there were 283 offices and some of these were mobile offices. With regard to the Alumni Association, it was intended to focus on assisting one another.

Ms Sejane said that the number of staff members trained would be provided in writing to the Committee. As far as the matric re-write project was concerned, there was no duplication because those matriculants were re-trained to properly prepare them for the examinations. However, she said this project lacked sufficient funding.

Ms Duncan was concerned, since the Department of Education already provided a service. She asked whether this implied more teachers would be needed. This appeared to be a duplication, unless the delegation could say whether it was a completely different project.

Ms Malgas asked what the NYDA's relationship entailed with the Department of Education, and how did it complement or assist what already existed.

Mr Ngubeni said that the NYDA should not duplicate the work of the Department of Education. He said with regard to the resignations, that some of those staff were approached and asked to resign, while others who had committed fraud were told and asked to resign.

Ms Duncan asked whether there was a register of all the names of beneficiaries of loans, and for what period of time these names were kept.

Mr Kekana said the answer on the matric re-write project was incomplete. He asked whether the build project trained artisans such as bricklayers, rather than training too many office and clerical staff.

Mr Ngubeni said the project was called Youth Build and it was aimed at training plumbers, carpenters, and other artisans.

Mr Kekana asked where this training takes place.

Ms Robinson asked for an example where a young person walked into one of NYDA's offices and required help. How would that process be followed?

Mr Ngubeni said that the negotiation with the Premiers and the President, once the meeting had taken place, would be shared with the Committee.

Ms Duncan returned to her previous question on the register of names. She asked how many young people had been helped through NYDA's programmes.

The Chairperson asked about the “scorecard”. She said the successes needed to be compared with the goals set. She suggested that the NYDA brought a quarterly report to the Committee so that such comparison could be done.

Ms Sejane referred members to the NYDA business model, whereby a thorough process was undertaken with each applicant, and thereby detail such as job creation was captured. She also said that on the slide on key deliverables, most of the detail being requested was there, but the arrangement of the details was perhaps different. The delegation would however, respond to the “scorecard” and arrange the detail in a satisfactory manner.

Mr Kekana said his concern was also that the training he earlier referred to would be available to young women as well, and not only to young men.

Ms Robinson urged the delegation, in regard to the National Youth Service, to think “out of the box” so that for example, training could be given for ballet, and the arts in general.

Ms Malgas said that the presentation did not address adequately the matter of the Young Women's Network and the Young Women's Programme.

The Chairperson said that this Committee would also forward their own ideas to the organisation. She asked for their telephone numbers – not numbers which would ring endlessly – but reliable numbers.

Both officials provided their contact numbers to the Committee.

The Chairperson asked whether they could be called upon to address gatherings of youth, to which Mr Ngubeni said anyone was welcome to call as this was part of their brief as the NYDA.

The Chairperson said that the Committee would certainly be applying their responsibility to do oversight very soon. She cautioned them, that in the future, they should be more careful with the logistics of sending of documentation to the Committee. She said it was their responsibility to check that the documents arrived on time for their presentation.

The meeting was adjourned.