National Youth Development Agency on its First Quarter Performance & suspension of Chief Executive Officer, with Deputy Minister Bapela in attendance

Standing Committee on Appropriations

05 August 2013
Chairperson: Mr E Sogoni (ANC)
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Meeting Summary

The Committee met to receive a briefing from the National Youth Development Agency on its first quarter expenditure and performance for 2013/14, and a briefing on the suspension of the NYDA Chief Executive Officer.

After welcoming the Committee Members and the Deputy Minister in the Presidency: Performance Monitoring and Evaluation, the Chairperson stated the Committee wanted to receive the first quarter report to establish what had been done so far and to take stock of the Agency’s initial intentions. The meeting was being held against a background of all kinds of reports from the media, so the session would help to bring the Committee up to speed with recent developments at the NYDA.

The Deputy Minister pleaded with the Committee not to seek details about the suspension of the CEO. Because the matter was still subject to hearings, investigations and the due process, providing such information at this stage could undermine the process. It was true that the NYDA Board had suspended the CEO and had filed charges against him, and the process was continuing.

The NYDA presented its First Quarter Expenditure and Performance for 2013/14 within the context of its new vision and leadership. It was excited to have initiated new programmes, such as the new grant programme, which had been launched on 5 August 2013. The Agency reported on the performance of its various programmes, providing details of strategic objectives, key performance indicators, 2013/14 targets, actual performance and reasons for variances. These programmes covered the key performance areas of economic participation, education and skills development, health and well-being, policy and research, and governance and administration.

Presenting its financial and management accounts, the NYDA told the Committee that grant income accounted for 95% of the agency’s income with an amount of R100 million.   The other sources of income included bank interest, interest on loans, donor funding income, administration fees, bad debts recovered, fair value adjustments and other income. The total income of the NYDA for 2013/14 was approximately R392 million.  The expenditure figure was approximately R444 million. Of this amount, 63% was for project disbursements, 36% for operating expenses and 1% for loan write-offs.  The Agency had signed a memorandum of understanding (MOU) with the Industrial Development Corporation to provide R2.7 billion for the support of youth. The NYDA was doing a lot, and real progress was going to be seen only in the next quarters.

During the discussion which followed the presentation, Members expressed concern about the actual performance of the NYDA in comparison with the targets it had set for itself. Questions were asked about the measures put in place to enhance the achievement of targets and objectives. A Member said that although he respected the request not to ask questions related to the suspension of the CEO, he wanted to know exactly what processes had been instituted, who had been charged, what the case against them was, who was going to be conducting the processes which were being instituted, and what the timeframe was.  He further asked about the allegations levelled against the Executive Chairperson of the NYDA and media reports about investigations by the Public Protector.  Other Members followed up on previous reports and information which the NYDA had committed to provide to the Committee, but had failed to keep its commitment. At this point, some of Members argued that requesting old information and reports was not on the agenda of the meeting, and was an unnecessary diversion and a waste of the Committee’s time. The Committee asked for a timeframe for the introduction of a Bill to enhance the operation of the NYDA.

The Chairperson said that the entire process and the meeting were not intended to crucify the NYDA, but to seek to assist the Agency. As a way forward, the Committee had agreed to have a workshop with the NYDA and in the light of the new KPIs, it was time to consider holding such a workshop. Such a meeting had to be held with all the stakeholders in youth development. At the next meeting, the Committee would invite the SA Local Government Association (SALGA) to talk on the opening of youth offices in municipalities and at local government level. It was very important to expedite the creation of youth offices in all government departments and municipalities.  The NYDA should be assured of the support of the Committee. The Committee did not doubt that it was important for the NYDA to remain in existence, but the Committee and the NYDA had to work together to achieve their objectives.
 

Meeting report

Introduction by Chairperson
The Chairperson welcomed the Deputy Minister in the Presidency: Performance Monitoring and Evaluation, Mr Obed Bapela, and apologized for the delay in starting the meeting. He also welcomed the delegation from the NYDA, which consisted of both the members of the Board and executive management.

The Chairperson received apologies on behalf of Committee Members who were absent. He acknowledged the presence of the NYDA executive and said that the NYDA had previously been invited to report on the fourth quarter, but he had received information that the NYDA was soon going to present its Annual Report.  It was therefore not very important to report on the fourth quarter, and that was why the Committee wanted to receive the first quarter report to establish what had been done so far and to take stock of the Agency’s initial intentions. The meeting was being held against a background of all kinds of reports from the media, so the session would help to bring the Committee up to speed with the recent developments in the NYDA. He invited the Deputy Minister and the NYDA team to address the Committee.

Opening Comments by Deputy Minister
The Deputy Minister thanked the Committee for the opportunity to make the presentation. He wanted to start by expressing the sentiments of the NYDA in response to the message sent by the Committee when the Agency had failed to appear at a previous meeting. There had been an issue of miscommunication, and there was now a commitment to streamline the communication between Parliament and the NYDA.

On the issue of the recent developments in the NYDA, the Deputy Minister said that because it was still subject to hearings, investigations and the due process, the NYDA could not provide the details, as providing such information at this stage could undermine the process. It was true that the NYDA Board had suspended the CEO and had filed charges against him, and the process was continuing.  He pleaded that the Committee should not seek the details now, as these would be provided to the Committee at a later stage when the investigations were over and a report had been prepared. He then handed over to the Executive Chairperson, Mr Yershen Pillay.

Remarks by the Executive Chairperson of the NYDA
Mr Pillay introduced his team and said that he was just going to give some opening remarks.  The actual presentation was going to be done by the executive management of the NYDA.  He apologised to the Committee for the NYDA failing to appear before the Committee at an earlier meeting. As the Deputy Minister had informed the Committee, it was an issue of miscommunication and the NYDA authorities meant no disrespect or disregard for the Committee or Parliament.  The NYDA had reprimanded the officials responsible for the miscommunication with Parliament.

With the suspension of the NYDA CEO, the intention was to clean up the NYDA, and the Board planned to do so with care. This would result in a credible process to bring to book all those responsible for maladministration, misconduct and recklessness. The charges had been communicated to the individuals concerned, and he craved the indulgence of the Committee to allow the NYDA not to provide the details of the process, as doing so could highly compromise the process. The NYDA was committed to ensure that justice was done to the organisation and to all the youth of South Africa.

The context of the presentation which was going to be given to the Committee was focused on the new vision of the NYDA. The NYDA was excited to have initiated new programmes, such as the new grant programme which had been launched on 5 August 2013.

Briefing on NYDA First Quarter Performance
The Acting CEO, Ms Ayanda Makaula, said that as she had been in office for less than 24 hours, the details of the first quarter performance for 2013/14 were going to be presented by the NYDA Head of Strategy, who was going to present the programme performance indicators, and the Chief Financial Officer, who was going to present the financials. The presentation would provide details relating to strategic objectives, key performance indicators, 2013/14 targets, actual performance and reasons for the variance.

NYDA Programme Performance Indicators
The Head of Strategy, Ms Tebogo Sejane, dealt with the following key performance areas:

Economic Participation
The strategic objective of the programme was to enhance the participation of young people in the economy. The key performance indicators (KPIs) included: the number of new youth-owned enterprises established through NYDA grant funding; the number of youth-owned enterprises supported through NYDA grant funding; the number of communities provided with community development facilitation support; jobs created through grant funding; and jobs facilitated through placement in job opportunities.

Ms Sejane presented to the Committee three graphs, which provided the details of the KPIs spread across the nine provinces.

Education and Skills Development
The strategic objective of this programme was to implement and facilitate education opportunities in order to improve the quality of education which the youth could attain.  The KPIs included: the number of young people enrolled in the NYDA Matric re-write programme; the number of youth supported through the scholarship programme -- particularly the Solomon Mahlangu Scholarship Programme; and the number of young people supported through individual and group career guidance interventions.

Health and Well-Being
With the strategic objectives being the facilitation of access to health and well-being programmes, and the provision of health and well-being interventions to young people, the KPIs of this programme included the number of young people accessing programmes and interventions designed to improve health, with four campaigns and special projects to be implemented.  As at August 2013, only one of the campaigns had been activated, and only 413 young people -- against a target of 5 000 -- were accessing programmes and interventions designed to improve health.

Policy and Research
The NYDA had five strategic objectives for the policy and research programme. These were: to create and produce information and knowledge development planning and decision making; to provide access to information and create awareness of youth development programmes; to lobby key stakeholders to support and implement youth development programmes; to create a platform for youth to participate and benefit from the democratic processes; and to mobilise and leverage financial resources from parties.

Governance and Administration
The only strategic objective of this programme was to establish a credible, efficient and effective organisation. The KPIs included: an IT systems and effectiveness audit; a review of current processes; approval of new processes and implementation; training and capacity building of staff; and a number of information dissemination access points to be established.

Management and Financial Accounts
The CFO of the NYDA, Mr Khathutshelo Ramukumba presented the Committee with the first quarter management accounts.

In an income analysis, Mr Ramukumba told the Committee that grant income accounted for 95% of the Agency’s income with an amount of R100 million.  The other sources of income included bank interest, interest on loans, donor funding income, administration fees, bad debts recovered, fair value adjustments and other income. The total income of the NYDA for 2013/14 was approximately R392 million.

The NYDA presented an expenditure figure of approximately R444 million. Of this amount, 63% was for project disbursements, 36% for operating expenses and 1% for loan write-offs.

Mr Pillay said it was important to note that of the 27 KPIs, only seven had no targets. All the programmes were kicking in, and more action could be expected from the NYDA in the next term. The Agency had signed a memorandum of understanding (MOU) with the Industrial Development Corporation to provide R2.7 billion for the support of youth. The NYDA was doing a lot, and real progress was going to be seen only in the next quarters.

Discussion
Dr S van Dyk (DA) remarked that looking at the actual performance of the NYDA, against the targets, there had been very poor performance. What measures were being put in place to ensure that these targets were going to be achieved?

Mr T Harris (DA), of the Portfolio Committee on Finance, said that he respected the request not to ask about the suspension of the CEO, but Members deserved some clarity on the process. What processes had exactly been instituted, who had been charged, what was the case against them, who was going to be conducting the processes which were being instituted, and what was the timeframe?  Parliament deserved at least this level of clarity.  On cleaning up the NYDA, he was skeptical about such a goal, as it was being reported in the media that the Executive Chairperson was being investigated by the Public Protector.  Was the Executive Chairperson under investigation?   Had he received any letters from the Public Protector about misuse of the NYDA credit card?  The allegations were quite staggering, as there were allegations that he had paid for Julius Malema’s rent, booked himself into hotels with the credit card after his term as the previous Deputy Chairperson had ended, that he had squandered R200 000 on the NYDA credit card and incurred a R23 000 cellphone bill, and that he had enriched himself by buying petrol on the NYDA credit card. The Committee needed reassurance and explanations as to what exactly had happened. The NYDA was treating the youth of the country as a subset and not a mainstream issue, and this questioned the justification of the existence of the Agency.  What was the total size of the NYDA loan book? Could the NYDA provide the budget per programme? The NYDA was planning to spend R10 million on youth awards. Could the public be guaranteed to get value for money on such spending?

Mr L Ramatlakane (COPE) said that it was always encouraging to see the executive authority leading the NYDA.  Looking at the history of expenditure in the NYDA on parties and rents, the Committee had asked for a report in September 2012on this expenditure, but nothing had been provided. In March 2013, similar requests had been made, yet nothing had been provided -- even after a promise had been made by the NYDA authorities. These reports and details were still outstanding, and he wanted to know why they had not been made available to the Committee.

On current issues, the changes in the board, vision and the strategy of the NYDA, meant that there had to be a realignment in the operations of the Agency. What was the budgetary allocation for the five programmes?  On the strategy for recovering debts, it was clear that no progress was being made. It was important for the Committee to be presented with the details of loan write offs and the settlement process. The change from loans to grants was kicking in, but what was the total amount which was going to be lost in write offs?  Had the realignment of the NYDA goals and objectives to the National Development Plan (NDP) been initiated? 

Mr M Bhanga (COPE) said that in terms of economic participation, the 2013/14 target was realistic, but there had been no improvement in performance and actualization. The core mandate of the NYDA was not being achieved. He asked if the NYDA could be trusted to meet its target.  On the “cleaning” of the NYDA, was the code of ethics being looked at?  The CEO had not been working alone, so iif there was a cleanup, all the other officials who worked with him had to be investigated. There had been several irregularities in terms of the World Youth Festival, which had popularly been called the “kiss festival”. He asked if the officials involved in this scandal were going to be investigated.

Mr Bhanga asked the Deputy Minister whether, with the budget problems facing the NYDA, there was any plan from government to consider injecting more money into the NYDA. To what extent was government considering a legislative and regulatory requirement for Ministers to account for their contribution to the whole vision of youth development?  What was the NYDA doing about the mobilisation of young people to register and vote in the upcoming 2014 elections?

Mr J Gelderblom (ANC) asked what the NYDA was doing for rural areas.  What was the attitude of the stakeholders of the NYDA towards their recent activities?

Ms L Yengeni (ANC) said that she understood that two of the Members were not regular members of the Committee, so they might not know what the Committee did at briefings like this. They were focusing on the first quarter reports, and the Committee did not have time to be diverted from the core mandate of the meeting to deal with issues from last year. It was not fair to the new NYDA board, because they were new and could not answer questions from last year.  Secondly, the Committee did not rely on media reports and could not react based on such reports. The Committee was not going to be diverted and dwell on media allegations. There were proper channels to deal with media stories.

Ms R Mashigo (ANC) said that the NYDA had always posed a problem for the Committee as it was a very unstable entity. Looking at the new strategy of the NYDA, it was hoped that a focus could be made on key issues. What problems were encountered in municipalities, and what response was obtained from municipalities in terms of the creation of access points for information?

Mr G Snell (ANC) said that it had been identified that elements in the current Act inhibited the functioning of the NYDA.  What timeframe could be expected in terms of the introduction of an amendment Bill?  

The Chairperson said he was going to give the Deputy Minister a chance to respond.  Members would be allowed to ask any question that they wanted to ask.  In Parliament, Members were allowed to ask any questions regarding accountability. However, he had a problem with Mr Harris questioning the very existence of the NYDA. The purpose of the meeting was to find out the problems facing the NYDA, and how the Committee could be of assistance to the NYDA in achieving its mandate and objectives. It was not good for the Committee to ambush the NYDA with questions about issues that were not included in the agenda of the meeting.  What had been the progress in terms of the reports, as asked by Mr Ramatlakane?  On the concern of youth development being considered a sideline issue, rather than a mainstream issue, there had been no action on the decision that in every department and municipality, there should be a youth office.

Mr Ramatlakane said that he did not think that the questions asked were an ambush. If the NYDA did not have the answers, they could commit to provide the information. There was no reason for members to be limited in the asking of their questions.  In the September 2012 meeting, the NYDA had committed to respond to the questions and reports by the end of that month.

The Chairperson said that he understood, and that was why he had rephrased the question to ask what the progress had been in regard to the reports.

Ms Yengeni said that she agreed with the Chairperson that the questions had to be answered by the NYDA.  Mr Bhanga and Mr Harris could say the things they were saying, because they were not members of the Committee. The Committee had a way of operating, and it always informed an entity or department of the issues which were going to be discussed before the meeting so that they could prepare.

The Chairperson asked Members to give an opportunity to the Deputy Minister and the NYDA to respond to the questions which had been asked.

Responses
Deputy Minister Bapela said that he wanted to start by responding to the general question insinuatiing that there was no need for the NYDA. South Africa had taken a decision to create the NYDA.  It was a progressive step and ought to be welcomed. From a global view point, South Africa was one of the few countries on the continent which had created a full-time entity to deal with the very serious issue of youth development. However, this did not stop anyone from raising any questions they wanted. Many countries in the world were moving in this direction and South Africa could instead not be regressing.  What had to be done was to assist the NYDA in achieving its mandate. The NYDA had very lofty objectives which could really assist South Africa if they were achieved. The NYDA was an investment which just had to be directed to focus on meeting its mandate.

With the recent developments over the past four months and with the new board, he was confident that the NYDA was now going to deliver to the youth of South Africa. The new board had taken over an environment that had its own legacy of challenges. This had to be followed up. It was important to note that cleaning in terms of leadership was not synonymous with purging, and it was not witch-hunting. It was all about good governance.

As to who was being investigated, it was the CEO who had been charged. However, he still cautioned that the details should not be exposed, as this could compromise the investigation processes. The allegations were just allegations, and all persons were considered innocent until proven guilty.

On the issue of investigations by the Public Protector, there was no investigation of the Chairperson. The Public Protector had been receiving anonymous tips about the operations of the NYDA. The Public Protector had sent questions to the NYDA and these questions were being responded to. The Public Protector was still probing the issue, and the NYDA could only wait to hear what the details of the questions were. The only formal investigation was that involving the CEO.

On the timeframe, it could not be clearly said, but the board was committed to fast track the matter and to ensure that it was dealt with speedily.

In terms of investing in the NYDA, the Deputy Minister said it was important not to look at the investment in the NYDA only in terms of money. So much was being invested in the youth of South Africa through education bursaries, employment opportunities, business support, etc. The difficulty was to collate all of these efforts. This was where the NYDA had to improve its reporting. It was also important to measure the impact of these efforts and in this regard, the NYDA was working with the Department of Performance Monitoring and Evaluation in the Presidency.

On the issue of the legislation, the Bill would be ready in October 2013, and consultations with the State Law Advisers were almost complete. After these consultations, the Bill would be sent to Cabinet before the parliamentary process could be initiated.

On the outstanding information, the NYDA would come back to the Committee with a detailed report from the investigation of the World Youth Conference, which Mr Bhanga and Mr Ramatlakane had asked about. On the National Youth Policy, the process had been initiated and there was a deadline of March 2014. It was important to note that this new policy now had to be aligned with the objectives and vision of the NDP.

The Deputy Minister said that he had responded to the high-level issues raised by Members and asked the Executive Chairperson of the NYDA and his team to respond to any outstanding questions. 

Mr Pillay said that the Deputy Minister had responded to most of the matters raised.

Regarding the progress of the NYDA programmes, Mr Pillay told the Committee that the grant programme had just started the previous day and that was why the target was still at One. Like several other programmes, the NYDA had just started the grants programme and it was confident that it was going to be successful.

Mr Pillay said the suspension of the CEO was based on a 50-page audit report. There was an independent process which would hear the charges and the responses from the CEO. The process was not going to be an easy one, because there were high stakes and people who were involved were going to do all they could to disturb the process. On the allegations against him, he asked why these allegations were being raised only now that the CEO had been suspended, when they were claimed to have been committed in 2011. He was willing to subject himself to the due process to establish his innocence.

On the matter of the youth awards, Mr Pillay told the Committee that the NYDA board had postponed the awards. This was based on the reasoning that it was not reasonable to spend R10 million on youth awards, as these resources could be channeled to tangible programmes. The concept had not been thrown away, but a decision had been taken to raise funds and have the awards at a later stage.  

On the issue of elections, the NYDA was working with the Independent Electoral Commission (IEC) to enhance youth participation in elections and encourage youth to register and vote.

The Chairperson said that the major issues had been addressed, and asked the Acting CEO to be very brief in her final response.

Ms Makaula said that on the issue of youth offices and access points in municipalities, about 100 youth offices had been established, and the NYDA was faced with the challenge of creating partnerships with municipalities. Some of the challenges were the long periods taken to sign documents, the poor interest of municipal authorities in providing assistance to the offices, and also the vast nature of the country, which posed a coordination problem.  Many of the municipalities were in geographically challenged areas and this made it difficult to establish youth offices.

The Chairperson said that the Committee was going to follow up to ensure that all outstanding information was provided to the Committee. There was another meeting which had to take place, and in the interest of time, he was going to have to close the meeting.

The Chairperson said that the entire process and the meeting were not intended to crucify the NYDA, but to seek to assist the NYDA. As a way forward, the Committee had agreed to have a workshop with the NYDA and in the light of the new KPIs, it was time to consider holding such a workshop. Such a meeting had to be held with all the stakeholders in youth development. At the next meeting, the Committee would invite the SA Local Government Association (SALGA) to talk on the opening of youth offices in municipalities and at local government level. It was very important to expedite the creation of youth offices in all government departments and municipalities.

The NYDA should be assured of the support of the Committee. The Committee did not doubt that it was important for the NYDA to remain in existence, but the Committee and the NYDA had to work together to achieve their objectives.

The meeting was adjourned.
 

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