National Development Agency 2009/10 Annual Report: Briefing by NDA

Social Development

16 November 2010
Chairperson: Ms Y Botha (ANC)
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Meeting Summary

The National Development Agency had a mandate to contribute towards the eradication of poverty and its causes by granting funds to civil society organisations for the purpose of carrying out projects or programmes aimed at meeting development needs of poor communities; and strengthening the institutional capacity of civil society organisations involved in direct service provision to poor communities. This enabled the impoverished communities to empower themselves by implementing sustainable projects, which allowed them to join the mainstream economy.

The NDA had for the past four years achieved an unqualified audit with emphasis of matter on irregular expenditure, which was due to the proper procurement process not having been followed.

Challenges were that the needs were so huge and yet the resources very limited; limited management, institutional and technical capacity of funded projects; inadequate skills and competencies of NDA staff to provide effective support of funded projects; and performance monitoring and evaluation of funded projects.

The NDA believed that through the successful engagement in poverty eradication initiatives and the constructive impact it had on the lives of its beneficiaries, the poverty challenge could be defeated. As long as women were subjected to discrimination, exploitation or abuse, the NDA would not rest or falter in its drive to eradicate poverty.

The Chairperson noted that the strategic goals in the Annual Report and those given in the presentation were different. It was a huge oversight and would confuse the Committee. With the support of Committee Members she asked permission from the Deputy Minister to schedule a meeting for next week for the NDA to present a redone presentation.


Meeting report

The Chairperson welcomed the new Minister of Social Development, Hon Bathabile Dlamini, and the new Deputy Minister, Hon Maria Ntuli, and also welcomed the board and delegation from the National Development Agency (NDA).

National Development Agency on its 2009/10 Annual Report
Bishop M Mpumlwana (Chairperson: NDA) said it was a time when the key issue of poverty reduction, at the core of the work of the NDA, was gaining accelerated focus and there was a greater concerted effort across the board and in government.

Ms Vuyelwa Nhlapo (CEO: NDA) briefed the Committee on the Annual Report. Some highlights were:

▪ The NDA had a mandate to contribute towards the eradication of poverty and its causes by granting funds to civil society organisations for the purpose of carrying out projects or programmes aimed at meeting development needs of poor communities; and strengthening the institutional capacity of civil society organisations involved in direct service provision to poor communities. This enabled the impoverished communities to empower themselves by implementing sustainable projects, which allowed them to join the mainstream economy.

▪ The NDA had for the past four years achieved an unqualified audit.

▪ The NDA could not engage on issues of poverty as an isolated entity, it needed to interact and partner and work with various partners that addressed development and poverty issues.

▪ Strategic goals were to build the capacity of civil society organisations to enable them to carry out development work effectively; to grant funds to contribute towards the eradication of poverty; to facilitate research towards poverty eradication; and to position the NDA as a premier development agency and mobilise resources.

▪ Key achievements: In terms of Strategic Goal One (Promoting Sustainable Development), the NDA funded 77 projects to the value of R95 million in 2009/10 financial year, the sectoral breakdown being food security (11), economic development (45), capacity building (6), and agri-business (15). The projects funded created 2 444 direct job opportunities for poor households and 8 005 indirect opportunities within communities where projects were implemented. 3 551 beneficiaries were supported through food security projects, including women, youth and people with disabilities.

▪ The importance of capacity building, especially in governance and project management, was stressed. Challenges experienced were the capacity of civil society organisations in meeting governance and financial management objectives. It was important they met their objectives in terms of the agreements, to ensure accountability of using public and government funds. Another issue was that of conflict amongst the members themselves. Conflict resolution had to be addressed and in some instances, despite early interventions, some projects had to be discontinued because of unresolved issues.

▪ For Strategic Goal Two (Funding Towards Eradication of Poverty), the NDA signed two MoUs with Asgisa and Masisizane programmes for the implementation of an agreement to facilitate and coordinate programmes in rural economic development zones. NDA needed to work closely with other partners to ensure various issues were addressed.

▪ For Strategic Goal Three (Facilitate Research Towards Poverty Alleviation), the NDA achieved its target in facilitating the strategic policy dialogue on the developmental state and the fight against poverty in South Africa.

▪ For Strategic Goal Four (Positioning NDA As Premier Development Agency & Mobilising Resources): During the year under review, the NDA managed to successfully carry out a National Study on the State of ICT in the NGO sector in South Africa. Furthermore, two best practice case studies on NDA funded projects were produced.

The NDA Chief Financial Officer presented the financial report. Revenue was R161 million, of which 55% was spent on funding projects directly and 45% on administrative support. Expenditure was R162 million, of this R89 million was mandate expenses and R72 million administration expenses. The net deficit for the year was R1.2 million, mainly as a result of a drop in the interest income that NDA had hoped to receive.

NDA total assets were valued at R222 million, 97% of which was cash, which did not belong to NDA but to projects approved by the board. 3% was property and intangible assets. Current liabilities were R180 million and net assets R42 million.

Ms Nhlapo continued that for the 2009/10 financial year the NDA achieved an unqualified report with one emphasis of matter. This was due to irregular expenditure of R881 819 where proper procurement processes were not followed. Processes were put in place to deal with the issue.

Ms Nhlapo turned to NDA’s challenges and its intervention strategy. Challenges were that the needs were so huge and resources very limited; the limited management, institutional and technical capacity of funded projects; the inadequate skills and competencies of NDA staff to provide effective support to funded projects; and performance monitoring and evaluation of funded projects.

Ms Nhlapo concluded that the NDA believed that through the successful engagement in poverty eradication initiatives and the constructive impact it had on the lives of its beneficiaries, the poverty challenge could be defeated. As long as women were subjected to discrimination, exploitation or abuse, the NDA would not rest or falter in its drive to eradicate poverty.

Discussion
The Chairperson asked for clarity as the strategic goals in the Annual Report and those given in the presentation differed.

Bishop Mpumlwana explained that the NDA did a strategic review annually and with the guidance of the new Minister of Social Development in the middle of the last fiscal year and the development of the plans for this year there were changes in some areas of focus.

The Chairperson said the 2009/10 financial year was under review, not the current year. Before proceeding with the meeting she conferred with the Committee as to whether or not to continue with the report. There was a difference in the Annual Report tabled to Parliament and that of the presentation. If the presentation was based on current goals then they would need to reschedule a meeting for the following week.

Ms Nhlapo responded that the goals in the presentation were not formulated as indicated in the strategic plan. Goal One was to promote sustainable development and the purpose was to contribute to alleviate poverty through grant funding and resource mobilisation; the presentation stated the goal was on grant funding. She agreed that the two reports were not the same.

Bishop Mpumlwana said the essence of the work did not change the area of emphasis in the actual grant making.

The Chairperson explained that it was a huge oversight and would confuse the Committee. With the support of Committee Members she asked permission from the Deputy Minister to schedule a meeting for the following week for the NDA to present a re-done presentation.

Ms H Lamoela (DA) asked for a copy of the fraud and whistle blowing policy that was reviewed last year.

The Chairperson said only if it were reviewed in the year under review. She thanked the members of the board and members of the NDA.

Committee matters
Minutes of Committee meetings held on 20 July, 17 and 24 August 2010 were adopted with amendments.

An invitation had been received from the Minister for Members residing in the Eastern Cape to join her in visiting Elliotdale on Saturday 20 November 2010. It was in connection with the recent brutal killing of three children and an elderly woman.

Confirmation was required from Committee Members who would be attending the World Social Security Forum Conference to be held in Cape Town from 1 to 5 December.

The meeting was adjourned.


Present

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