Appointment of NDA Board Process; National Development Agency on its 2016 Strategic Plan; Second Term Committee Programme

Meeting report

Election of Acting Chairperson

Ms Lindiwe Ntsabo said the Chairperson had excused herself due to other Committee responsibilities.  She requested that Members nominate a chairperson. Ms H Malgas (ANC) was elected as Acting Chairperson

The Acting Chairperson welcomed the officials from the National Development Agency (NDA), the CEO and board members. The day’s agenda was a presentation on the strategic plan and budget of the NDA. She asked the Committee Secretary who was leading the delegation.

The Secretary replied that she had not received a letter on this.

The Chairperson commented that this would have to be followed up later as the Director-General had said that a letter had been written to the Committee. Was it sent to the Chairperson’s office?

The Department replied that the DDG for community development was responsible and that the letter was sent today.

Ms S Tsoleli (ANC) felt that the board of the NDA should be accountable, lead the delegation and take responsibility. She also felt that a letter was not necessary.

The Acting Chairperson decided that clarity was needed. The NDA was an entity of the Department of Social Development and accounted to the Minister of Social Development, so the Committee must keep them accountable.

Appointment of the NDA board
An outstanding issue from the previous meeting was the board itself. It was understood that in the process of appointing the board, firstly the board had to be advertised and secondly the Committee had to be part of the process in appointing the board. She asked the Department to please explain this process?

Mr Peter Netshipale, Deputy Director General: Integrated Development, DSD, stated that the NDA Act states clearly in s5 what processes the NDA must take to appoint the board. He asked the Chief Director, who was responsible for the processes to report back on what happened.

Mr Osborne Masilela, Chief Director: Entity Oversight, DSD, explained that in terms of the NDA Act the board comprised of members of civil society and government representatives. An advertisement went out for the appointment of members of civil society. Applications were received, short listing done and recommendations made to the Minister of Social Development on who to appoint. The Department followed the Act to the letter.

The Acting Chairperson asked what the Committee’s role in this process was. This could be addressed once the Committee had clarification on how the process worked. The Committee had been under the impression that they would be involved in this process. Please speak to the Act itself – how does s5 work?

Mr Netshipale guided Members through s 5 of the Act. After the advertisement a panel would be established to make recommendations to the Minister, so the Minister appointed the board members.

Ms E Wilson (DA) commented that the Act was pretty clear on the process to appoint the Board. However she was unhappy with how the process bypassed the parliamentary committee completely. To make the election of the board a little more transparent would have been helpful although this was not required by the Act. Although the Committee could not change the process, more transparency should be provided in the process.

Ms Tsoleli said there was nothing the Committee could do as it could not change the Act now. It was important to ascertain whether the process was complied with and the representatives from civil society were appointed. Could the members of the board who were here introduce themselves to establish where they came from? Members on the board who came from civil society were very important.

Mr Netshipale began to read out the names of the board members.

Ms Tsoleli interrupted that merely names was not helping. She wanted to know where the board members came from, for example the Committee would like to make sure that not all members came from one civil society organisation.

Mr Netshipale asked the members of the board who were present to introduce themselves.

Ms July Hermans, Chairperson of the NDA board, stated that she was from the Western Cape. She had a civil society background serving in ratepayers and community projects. She had also served in CSOs and NGOs and came from a civil society activism background.

Mr Zolile Ngcakani, Deputy Chairperson of the NDA, explained that he did not come from a civil society background but that he had been involved in development projects regarding water. He was a water scientist by profession and worked with the Water Research Commission. He then moved onto intelligence in environmental affairs where he was head of ministerial service before becoming inspector-general. He was from Gauteng.

Mr Abram Hanekom stated that he came from civil society and served on the board of Witness Change. He had been involved in refugee rights, LGBT (Lesbian, Gay, Bisexual and Transgender) rights, on the board of BDS (Boycott, Divestment & Sanctions) South Africa and involved with migrant workers and farm workers. He completed a diploma in humanitarian assistance through the Liverpool School of Tropical Medicine. He is from Zimbabwe but lives in the Western Cape.

Ms Makgoro Mannya explained that she was a farmer in Tzaneen and came from a background of civil society supporting women in agriculture and rural development.

Only four board members present.

The Acting Chairperson asked which members were absent.

Mr Netshipale read a list of the rest of the members.

Ms Tsoleli commented that all the members of the board present came from civil society or development.

The Chairperson asked if the Committee could get a sense of who came from government.

Mr Netshipale offered to provide the Committee with a list of the members and where they were from as he did not have the information with him.

Ms V Mogotsi (ANC) was irritated that this was the first meeting with the board of NDA, and the Department did not have the information. This went back to the issue of transparency and trust. The Department and Committee were supposed to work together as a team, the Department was taking the Committee for granted.

Ms Wilson asked if the Committee could get clarity on when the board was elected. The last meeting highlighted the issue with communication. It was still not happening.

The Acting Chairperson emphasised that the Department should provide the names of each board member and a short little background on each one, to be sent to the Committee Secretary.

The delegation from the Department of Social Development consisted of Mr Peter Netshipale, Deputy Director General: Integrated Development; and Mr Osborne Masilela, Chief Director: Entity Oversight. The delegation from the NDA consisted of Ms Nelisiwe Vilakazi, Acting CEO of the NDA; Mr Bongani Magongo, Executive Director for Management, Development and Research); Mr Anthony Bower (Acting COO); Mr Solomon Shingange (Acting CFO); Mr Rakgabo Makgae (Company Secretary); and Ms Hajra Mansour (Audit Executive).

The Chairperson invited the Department to speak before the Chair of the NDA Board introduced the CEO of the NDA.

Mr Netshipale agreed that it was proper that the Department introduce this entity, and to remind the house that the entity was established as a 3a entity. The fundamental issue hinged around issues of poverty. The NDA was a service delivery arm of the Department, focusing on mobilising civil society.  Cognisance should be taken of the fact that poverty alleviation programmes needed to deal with issues of income, human capital, asset poverty, and focusing on households. Therefore in tabling the strategic plan one should be aware that the work of the NDA complemented work in the country, focusing on the poorest.

Ms Hermans stated that the Board recognised that it was the duty of the Committee to ask questions and clarify things. This made sure the Board and NDA were doing good work. The newly appointed board was ready to start work as the NDA board for the next three years. The work of the NDA board was largely oversight and strategic direction, the Act spelt out very clearly what the NDA was about – it was about poverty eradication and working together with communities on the causes of poverty. This would give strategic direction to make sure that the NDA was doing its work in poverty alleviation. The new business plan spoke about evolving the work of the NDA into provinces, into districts and eventually into wards. Poverty was found at the level of the ward. The board worked hand in hand with stakeholders; with funders, mobilised and sourced funding for programmes in the NDA with the end result of alleviating poverty at the level of communities in wards.

The Acting Chairperson replied that the Department should take note that, according to the Act, there was a timeframe for introducing the board to Parliament. The Act said 30 days and the board was appointed in February 2016, so giving the Committee information on board members was long overdue. This could be sent to the Committee Secretary.

National Development Agency Annual Performance Plan 2016-2017 and Strategic Plan 2016-2021

Ms Nelisiwe Vilakazi presented the business case, strategic plan and annual performance plan.

Ms Tsoleli interrupted that it was not acceptable for Members to be only given the document at the meeting. Reports had to be submitted prior to the meeting. What changes had been made? An earlier version was given to Members, but which version should Members look at?

The Secretary replied that the first version was received on Monday and was 40 pages long. Yesterday a second version was received that was 32 pages long.

The Acting Chairperson asked the CEO to clarify.

Ms Wilson commented that she and the DA members did not receive anything prior to the meeting.

The Chairperson replied that Members received the document electronically.

The CEO replied that the presentation was circulated last Friday. The latest version cut out the implementation plans to make the presentation shorter. Implementation plans were more operational. Members should focus on the 32-page version.

The Acting Chairperson stated that from now on, reports must be received by the Committee a week before the meeting so all Members could go through the reports, discuss them at caucuses, and then everyone could come prepared. This was a ruling for the Committee.

The CEO presented the primary mandate: to contribute towards the eradication of poverty and its causes by granting funds to civil society organisations for the purpose of:

• Carrying out programmes and projects aimed at meeting development needs of the poor
• Strengthening the institutional capacity of other civil society organisations involved in direct service provision to the poor communities 

The secondary mandate was: to promote consultation, dialogue and sharing of development experience between the CSOs and relevance organs of state through:

• Debating  development policy 
• Undertaking research and publication aimed at proving basis for development policy
• Acting as conduit for funding from Government, foreign government and other national and international donors for development work carried-out by CSOs

This new mandate was formulated after the Department conducted a review of the NDA. This review found that the old mandate was unclear and that the NDA needed to reposition itself and to establish its own niche to remain relevant to the government and to the stakeholders.

Limitations and inefficiencies of current NDA business model:
 

1. The NDA programmes were currently located at provincial offices making it very difficult for the poor communities to access NDA services, thus contributing to poor visibility and presence of the Agency services.
2. The structure had a number of limitations and inefficiencies as the human resources skills required to implement programmes and projects is located at provincial and national levels.
3. This resulted in high cost of running business as staff have to travel long distances to implement and monitor programmes and projects.
4. The Advisory centres werere currently providing very limited function, namely, provision of information and referrals, this make this business to be ineffective and inefficient as resources are spent on human resources and infrastructure with minimal return on investment.

Under the proposed NDA repositioning model most work would take place at district level, rather than national or provincial.

• •          Priority districts
  • o    Most deprived in terms of the poverty index
  • o    Cabinet approved that these 27 were most deprived districts
• •          District office – will look like with decentralising services
  • o    Four local municipalities in Joe Gqabi districts
    • §  Takes four hours to travel to local municipality from East London office.
    • §  If you have to contribute poverty alleviation, will take long to make an impact if office is far from the district.
  • o    Vhembe district: one of the most deprived, currently NDA office is in Polokwane.
• •          Funding proposal
  • o    Baseline overall shortfall R292 million
• •          Objective 1: To develop and strengthen internal systems, processes and human capability to deliver efficiently and effectively on the NDA mandate
• •          Objective 2: To conduct CSOs engagements, assessments and needs analysis in the identified priority wards.
  • o    CSOs register with different authorities.
  • o    Some of CSO funded with Social Development but if they aren’t registered correctly then can’t get funds.
• •          Objective 3: To increase accessibility to capacity strengthening interventions to CSOs with the aim of improving the quality of services.
• •          Objective 4: To conduct, collate and disseminate research and evaluations that inform national development agenda.
  • o    In terms of Act, should be leading in the development space. Critical that when research is done, the findings should be disseminated to benefit poorer communities.
• •          MTEF budget allocation
  • o    Like to request the acting CFO to cover the budget allocation

 Mr Solomon Shingange talked the Committee through the budget.

 The purpose was to indicate which resources were made available to NDA from government, and how they should be split to deal with programmes.

How much was available to deliver on strategy? Funded by National Treasury through Department; allocation in next three years of resources: R194 million this year; R203 million next year; R214 million for 2018/19. Interest was also accumulated in the bank: R3,2 million this year, R2,8 million next year, and R2,3 million for 2018/19. Therefore the total available per year: R197 million, R206 million and R216 million respectively. In terms of allocation, the budget was split into the four programmes of the NDA. There was also the sub-programme that spoke to the decentralisation process, what resources were available, establishing district infrastructures. He detailed the budget per programme.

The last sub-programme of rolling out the model of decentralisation was capital expenditure. NDA would need a footprint in the districts, as there was a move away from the provincial mode. In the first year, R21 million would be spent setting up the first nine district offices as pilot, one per province.

Going forward how do we plan to resource this new model?  The Agency was currently in discussion with the Department of Social Development (DSD) and provinces to access the R292 million from the Department and provinces, which was currently earmarked as capacity building.  The Agency intended using the resources to roll out the rest of the decentralisation programme.

The NDA had currently been allocated R195 million for this financial year. But this would be insufficient for the implementation of the new business model, so the NDA would like to access additional resources (namely the R292 million), which would give the NDA the baseline of R487 million.

Discussion

The Acting Chairperson referred to page 16, and asked the Acting CFO to explain the amount of R292 million?

Mr Shingange explained the proposed funding model for this new set of operations of the NDA. The columns should be headed 2016/2017, followed by 2017/2018 and 2018/2019. Currently the NDA was allocated resources of R194,153 million. This was the official allocation for the current financial year. But going forward, as the NDA implemented the programme, the NDA was in discussion to access the funding to be able to roll out the rest of the district model. So currently the NDA did not have this outstanding R292 million which was needed.

 

The Acting Chairperson asked the CFO to explain if the money was in the provinces, where was it? Provinces were given equitable shares so where would this money come from?

Mr Netshipale responded that following the review of the NDA and it’s repositioning, the business model was presented because the current way it was operating was not feasible, and not effective with dealing with issues of poverty. So the model required that if the NDA had to deal with the issue of fighting poverty, the model required that it be wired up to district model. In terms of that the NDA required a greater amount – interchangeably this model had been presented to National Treasury (NT). This bigger model would be viable. The Department was in continuous discussion with provinces and NT. The NDA needed R292 million to implement the model.

The Chairperson stated that she did not have clarity about the R292 million.

Ms Tsoleli commented that the reply was more confusing as she was under the impression that the NDA already had the money. The President stressed the issue of austerity measures in the State of the Nation address. Where did this money come from? Almost all departments’ budgets had been cut. In Arts and Culture, a lot of cost-cutting measures were taking place. She thought, when the CFO presented, that the money was floating between province and Department and that he implied that that money was not being used.

The Acting Chairperson replied that there was still a lot of confusion.

Ms Tsoleli commented that even if they had their own budgets, involving provinces was another matter. Another process would have to take place. They had to go through the legislature.

Ms Wilson had big concerns about this presentation. She began to speak about their presentation in 2014 but was interrupted by the Chair.

The Chairperson commented that currently the discussion was focusing on slide 16.

Ms Wilson expressed her concerns about the budget. She had the impression that funds were already lying there. If they did not get the R292 million did that make the NDA and the third new mandate that the Committee received impossible to fulfil. This was a crisis. If the NDA did not receive the money, where did that leave the NDA? Up the creek without a paddle?

Mr Netshipale commented that he should clarify that upfront, in reviewing the NDA business model, they found that some of its functions were currently happening in the Department, e.g. institutional capacity of NPO. These funds were currently in provinces. There was a gentleman’s agreement on how it should be accessed for the NDA to perform these functions. In the past two financial years the NDA had done a good job in providing capacity. The Department identified that money within provinces. There was also another element – those functions which were taking place in provinces still had to go through a lot of processes, therefore dealing with NT. The APP dealt with the current allocation of R194 million. R292 million was needed for the roll out of the new business model, but could start the pilot of the project.

The Acting Chairperson decided to make a ruling on this issue. The MTEF budget allocation that had been received was a forecast. The Committee needed another meeting to discuss this forecast. Page 16 should be removed from the presentation, as this amount would affect the NDA. This budget allocation had nothing to do with what the Committee was being told now concerning current baseline allocations.

Ms Mogotsi stated that if the Committee understood the plight of the NDA with the triple challenges facing it, if the NDA could be transparent to the oversight committee and come early and present the proposal to the Committee, instead of introducing several new issues at the same time, where did that leave the Committee? The NDA was supposed to come and present its business case. The Committee was currently doing the budget vote, and could not vote for something like this. There was a social distance between the NDA and this Committee.

Ms Wilson replied that she did not think this page must be removed. This was a projection for what the entity required to meet its new mandate. This was the NDA’s third new mandate within this Parliament, which was already concerning. How much had NT allocated? If they could not get funding then what would they do? The Committee needed to find out where these figures came from.

Ms Tsoleli was worried about the gentleman’s agreement mentioned. Often such like ended up in the Constitutional Court. Do the correct thing. If that money must be removed from one session to another there were systems to do that. She agreed with the Chairperson that the MTEF budget allocation should be on what the NDA had and was anticipating, and page 16 should not have been there. It could have been explained in the background, but not here in the budget. The last page, which was the allocation which spoke to all the current years – this was what the Committee should have and the budget vote should be on this.

The Acting Chairperson proposed that the Committee approve the 2016/17 budget. This proposal MTEF budget allocation needed another meeting to deal with these projections. If that page were going to remain in the report then the Committee would be passing R292 million. However, the Committee was not passing that but was passing the other figures. 

Ms Tsoleli was not sure whether she welcomed the presentation or not. At least there had been some movement with the NDA in the right direction. However she was still worried. In terms of the mandate, the NDA was an entity of the DSD; therefore whatever they were doing was on behalf of DSD as a department. The mandate guaranteed funds to CSOs, but when you look at the budget it did not go to the mandate. They were not doing their core function. It was just an employment agency as the bulk of the money went to salaries (programme 1). If you were planning something or if the core mandate was to develop something, then 80% of your budget should go there, and then 20% should go to compensation for the people who were going to implement the mandate. How were we going to eradicate poverty if the total money we were getting did not go there? The bulk of the money should go to CSOs or NGOs as they would be delivering the services to the people. It should not all be going to programme 1. Most of the entities seemed to be only employment agencies. The presentation did not talk to what the President said – radical transformation, radical service delivery. In terms of the problem statement she agreed that the NDA was not well positioned to deliver its mandate.

The CEO stated that the NDA were doing their mandate, the entity just has a limited budget. As NDA had a limited budget, it had limited resources and limited HR on the ground. In terms of programme 1, the NDA had cut some of the positions to focus mainly on service delivery by NDA. That was work in progress.

In terms of the issue of duplication of activities, Ms Tsoleli asked who the other departments were. Which services did they identify as duplication? If the Committee has to defend what the NDA was doing the Committee had to have the information.

Mr Anthony Bower (Acting COO) replied on the issue of duplication of NDA services. In the first few years of NDA, the entity focused on capacity building, income generation, and food security. Other Departments also offered some of the food security programmes. So the NDA then focused on capacity building and referrals for CSOs working in this area. The same happened with ECD. The ECD operated in different areas and the NDA wanted to assist them in terms of developing their capacity. The NDA looked at identifying the different CSOs within the areas and categorising so when NDA gave support they knew which support to give them.

Ms Tsoleli commented on the issue of the NDA not being known, she wondered if the budget would make the people in the rural districts know of the NDA. The presentation mentioned the Joe Ngcaba district, where she was born, and the people there did not know the NDA. Would they be able to reach them? Were they going to know you through this? Establish offices in rural districts was long overdue, and she welcomed this. This was where the NDA should have started. This top-down approach to deliver services had not worked.

The CEO replied that the first part that the NDA thought was relevant was to facilitate the meeting urgently with the Committee, to share with the Committee the new business case that was based on the review that the Department did to NDA, which would cover many of the questions raised by members. As the NDA was repositioning itself it was responding to the review. If the communities did not know about it, it was not there; we were very lean on the ground. She agreed that it was overdue; the NDA should have started its work in the districts on the ground. The Agency was not changing the mandate but changing how it did things. NDA officials would be closer to where poor communities were. This was where the NDA needed to be visible.

Ms B Masango (DA) queried why so many appointments at the NDA were only acting, although she appreciated that the board had only just been established. How far was the process in terms of appointing permanent staff? In terms of the secondary mandate – how had it gone? Could one have a performance report or update on the agency? How had the secondary mandate assisted the agency to get where it was now? A sizable amount of money was devoted to research.

The CEO replied that the process was in place for the filling of the vacancies and was about to be finalised. The vacancies were already fewer. There had been advertisements, and even the CEO position was about to be finalised. In terms of the secondary mandate, what was emphasised here was because we it conducted research and evaluation studies we need to feedback to communities, how we as South Africa benefit. The NDA partnered with HSRC and other research institutions.

Mr Bongani Mabong (Executive Director for management, development and research) responded that over the past three years the areas of monitoring and evaluation within the NDA had taken a position where the function of monitoring was entrenched in the practice of each staff. Therefore staff were trained on a continuous basis on monitoring and reporting and evaluating their work. In addition, the NDA had just completed a five a year impact assessment on itself. The report had just come in which would be engaging with programmes, staff, and NPOs. The report included how effective the NDA had been in supporting NPOs. This also informed NDA programme design. The NDA had been conducting research over the past years. The research conducted was informed by the development discussion and development discourse based on issues raised by CSOs and government. Within a year the NDA conducted a number of research studies, in collaboration with public research institutes. The NDA had a number of symposiums to organise presentations of research. The NDA signed collaborative agreements with a number of academic research institutes to assist the NDA. Research was conducted to inform development policy, development discussion and development agenda. So the secondary mandate component was dealing with this research, having dialogue around it with CSOs and business, and was part of the NDA’s programme of action.

Ms Masango asked about the new revised model. Did it leave the national and provincial the way it was and add the district session? Or was the review affecting the national and provincial to rationalise the agency so it’s functioning was revised?

The CEO responded that the NDA had large positions at national level at the expense of districts so had done away with some of these so these were appropriated to relevant positions to deliver the mandate of NDA. The NDA wanted to be lean on top but be more visible on the ground where it provided services. This repositioning and business case was well received at MinMec and would be going to Provinces. Tomorrow a delegation from NDA would be visiting the new MEC for Social Development in the Northern Cape. What happened in terms of decentralisation was that each province has its own provincial plan on how to do NDA work within the province, and aligned with APP in the provinces. So the Agency was strengthening further was that it was an entity of Social Development.

Ms Masango asked if the NDA mobilised its own funding. There was a time where it did so to augment what it received from NT.

The CEO replied that in terms of the Act, the NDA had a duty to mobilise resources whether from foreign donors, foreign agencies, government agencies and so forth. The NDA had been doing this as the NDA was not doing well. The Act allowed the NDA to do this for the benefit of poor communities. This fell in the programme management unit of NDA where a strategy had been developed. The NDA would come back to share this with the Committee when it presented the business case. This would include what targets were developed to ensure the NDA oid resources mobilisation. There was a presentation that dealt with how much was raised from the different government departments this financial year, indicating the specific resources raised.

The CFO added that in the financial year that just ended the NDA had raised resources to the value of R60 million from provincial departments of DSD who transferred the money for capacity building. So the NDA had been implementing the capacity building for the provinces. In 2014/15 the NDA mobilised resources to the value of R95 million mostly where NDA managed capacity building programme. In 2013/14, R105 million was raised on behalf of other government departments, mostly for capacity building in the area of ECD. The NDA was continuing this in the new financial year. R292 million was part of the resources that the provinces had been willing to provide for implementing the capacity building process. The NDA appreciated the concern of Members but they were adamant that they could access this money.

Ms Wilson stated that in 2014 the Committee received a presentation with a mandate. In 2015 the mandate changed, the APP changed and the Committee was unhappy. Now in 2016 the entire mandate had changed again. The core business had changed again. So in the last three years so much money was spent training and capacitating people according to those mandates and plans. The NDA was blowing astronomical amounts of money on recapacitating and training staff. This was the third year the Committee received a new plan and different proposals. The Committee had raised several questions on the cross-over between the Department of Social Development and NDA, and hopefully this plan would clarify it. She admitted that this was a major concern with the entire presentation. While she appreciated the presentation she did not think it was realistic. The NDA was not going to meet its APPs under any circumstances, especially if it was R292 million under funded with not an idea about where that was coming from. All Members in the Committee came from constituencies and her municipalities were in Limpopo province. These were three of the most dysfunctional municipalities in the country and it was on record that the Limpopo Legislature was hugely dysfunctional and there were huge corruption issues to deal with. The NDA had stated that there was a gentleman’s agreement but she assured the NDA that the money was definitely not there. This was alarming. Gentleman’s agreements were not going to work. It’ was a case of ‘Show us the money’.

The Acting Chairperson asked that the gentleman’s agreement be excluded from the minutes because the Committee was now looking at the proposal and would discuss the other issue at another time.

The CEO replied that in terms of capacity building, the NDA used to outsource the services but had now trained officials to do capacity building itself.

Mr Mabong elaborated that in terms of capacity building, as the NDA repositioned itself it had adopted an approach which it started implementing in the just completed financial year, where the actual training and monitoring was moved from being provided by third parties, to trained internal staff. So within each province for all the CSOs capacity training was conducted internally. If you look at the budget, the costs of staff related to the people who worked at provincial level currently who would move to district level. The advantage was that if you looked at the numbers that NDA was able to reach, these have almost tripled in the last three years, because the NDA had people who could go and do these activities within reach and cost that NDA could control. So the NDA had been able to increase the capacity of its ability to facilitate training for CSOs. This model would be adopted as NDA moves to a new approach.

Ms Mogotsi stated that she needed to be educated by the NDA. In terms of the problem statement, the Committee was an oversight committee but in terms of bulletin number 1 on the problem statement, which looks at the positioning of NDA, it explained that the NDA was not well positioned so they were trying to find their feet. It also focused on the stakeholders – government and civil society sector. The NDA was an agency of the DSD, was it remaining to be one? Secondly, in terms of the duplication, the R292 million that the NDA wanted: where did this duplication come from? Did the provinces have this duplication? If this money was in the provinces: who was monitoring it? And if the bulk of work in terms of capacity building was being done by the provinces and not by the national NDA then there was a disjuncture. How was the NDA funding model work? Was it province to national, or national to province? And on the issue of duplication, there was a social cohesion in nation building, which was programme fourteen. Most of the Department was cost-cutting it, where was the NDA on this? She asked that they did not just reject the funding model but the Committee needed to know where this R292 million comes from.

The Acting Chairperson told the Department to speak about how they allocate money to the provinces. However, the Department should not discuss page 16 as the Department and NDA must come back to speak about it to the Committee.

The CEO requested that the NDA respond when they return to the Committee to discuss the new strategy and the issue of the budget. At this point in time there were Departments of Social Development in provinces that requested the NDA do capacity building in their provinces using their budget. This was the money earmarked by NDA. NT had given the NDA the guide on how to reach the money, so the NDA could appropriate the money from provinces – this was a legal process. So the NDA was aware of the process.

During this transitional year, and before the current financial year, the budget was centralised at national level. But the NDA was starting slowly to ensure that there was decentralisation, so provinces take accountability of the money. First the NDA needs to have its systems in place.

Ms Abrahams referred to the lack of knowledge of the NDA in the rural areas. What marketing tools or strategy would they use? How many offices around the country did it envision? Perhaps narrow it down to where these offices would be? In the R3, 5 million for M &E, the budget for skills development, how many would be trained?

The CEO replied that they had come up with a marketing strategy for the NDA to communicate in their languages, as part of access to information and visibility. In North West, the NDA had to explain who they were even to counsellors.

Mr S Mabilo (ANC) looked at the performance of the entity overall. The NDA had received an unqualified audit over a period. They must sustain it. One of the challenges was to have clean audits. It was not all doom and gloom. It was important that the Agency structures review it from time to time and change to keep relevant. He picked up two strategic shifts. The first was the focus on CSOs in the most deprived districts. This was a step in right direction; poverty must be addressed where it happened at the district level. He agreed with decentralisation. The second was the focus on capacity building. As much as there were challenges, NDA as an entity must pursue relentless capacity building – must be focused, strengthened and enhanced especially around communities. He did not understand the effectiveness of municipalities in this regard as a key component in integration and poverty as well as effective coordination. A recommendation was on cohesion and this was an area that the NDA should focus on, effective coordination. The Committee found that there was a disjuncture between the different levels, particularly in the lower levels which were often overlooked. The leadership of the entity should focus on effective coordination, as well as reducing the number of programmes from five to four. Could the NDA please illustrate for the Committee the cost containment? Could the NDA please give a brief illustration as the National Treasury has ordered that we “cut the frills” as Pravin Gordhan would say? How was NDA approaching this? It was unfair if the Committee attacked entities that were not present – the Provincial Legislature of Limpopo was not here. This was an unfair attack by the DA member. The municipalities were not here to defend themselves, whether they were corrupt or not. This was election year and opposition parties would take every opportunity for grandstanding, but this was not fair. It was not fair for a National Assembly Portfolio Committee to attack other entities and not fair to make political statements as the team from the Department and NDA was not political. There was also corruption elsewhere – we were given an example last week that one of the counsellors of the DA has defrauded Social Development. We don not want to turn this Portfolio Committee into politics. The ANC run the province so I must defend it. Here the Committee was criticising the NDA, but where they do well we must say so, and where they do not we must say so.

The CEO replied that the NDA was doing its best to align with the directive from NT. For example, to hold meetings in NDA offices, the board utilised NDA offices in Cape Town for meetings not a hotel, the NDA would use small rental cars, aligning NDA with cost cutting, even no refreshments in meetings.

The CFO added that in the last three years the NDA allocation from Treasury had increased at a rate of 3-4 %, which was way below inflation. So the NDA was adapting to make sure costs were cut. If the Committee looked at current overheads and increases in next 2-3 years, the NDA was trying to keep overheads the same and below inflation. The NDA was forced to manage costs very closely and augmenting these by implementing directives of NT, for example using corporate rate for travel. The NDA was continuously trying to find ways to cut costs.

The Acting Chairperson wished to interrupt earlier to clarify that the Committee was an extension of Parliament. Stones were thrown from both sides. She ruled that Members of the Committee must respect each other and respect the provinces and provincial legislatures. She asked how the repositioning of NDA affected the NDA Act. The NDA has an Act in place, was the repositioning still within the Act?

Ms P Sonti (EFF) spoke in an indigenous language (translated by Ms Tsoleli). She asked about the mandate, how were the people going to know about the new mandate?

The Acting Chairperson commented that all the questions were interlinked.

Ms Tsoleli (indigenous) When the Committee asked questions, they were difficult questions and need straight answers. Otherwise the Committee was going to ask a lot of questions based on response. A follow up on the issue of duplication of services between NDA and DSD: the response quoted DSD as also having duplication. Why was this happening? If they were the implementing agent for DSD there should be no duplication and both should save costs. They clearly need to give the report of their functions – should they still be located within DSD or moved to NDA. Could second staff to NDA. All other departments had a clear policy on comprehensive social security services – all services were supposed to be located in DSD. Comprehensive policy was currently fragmented. Need a report to know functions. Committee were not experts but were able to pinpoint to see what Department or NDA might miss. She wished the new board of NDA well.

The Acting Chairperson stated that the Committee was not rejecting page 16 – but the NDA must come back to speak about it with the Committee. The other thing she would like the NDA to do was to put in writing where to find the national and provincial offices and telephone numbers. Was the national office in its own building? Where were they? Was it paying rental? Or what price did it pay for it if bought? This was the first time the Committee was hearing about these quarterly reports. Then the Members would measure NDA up against the report. The NDA was coming back with the business case. Could the NDA give a break down on duplication of services?

She thanked the NDA for the budget. The Committee would write a report on it. That report would go into the bigger report of DSD with findings and recommendations. The report would be discussed within the EPC on h May. She reminded the NDA that whenever they come to the Committee they must come with Department officials leading the delegation, the CEO came with her delegation and two members of the board. Of these the chair must always come and the other board members should alternate. Of the internal audit, two members should come, of which one must be a permanent member and the others should alternate. 

The delegations were then asked to leave.

Adoption of the Second Term Committee programme

 The Acting Chairperson stated that the Committee would not look at the adoption of the committee report on the oversight visit to the Eastern Cape as the Chairperson was not present.

The Committee looked at the Second Term Committee programme.

The Acting Chairperson asked if Members were satisfied with the agenda for the 20 April: adoption of the committee report, consideration and adoption of the Children’s Amendment Bill, consideration of adoption of the Children’s Second Amendment Bill. On the 4th of May the Committee was having the presentation of the Department of Social Development’s quarterly financial report.

Ms Wilson commented that the Committee would be unable to sit on the 4th May as it was the day of the EPC.

Ms Tsoleli added to Ms Wilson’s comment that the programme of Parliament showed that the Committee would be unable to sit from the 1 May because every day from then until 29 May was a budget vote. According to the Committee’s programme there was a meeting on 11 May, but there was a budget vote in Parliament that day. MPs were expected to be present, particularly in support of the cluster and those extended EPCs. 4 of May was the budget vote of the Department of Social Development.

Ms Wilson replied that Ms Tsoleli was 100% correct. Nothing would be finalised in committees after next week as it was EPCs and plenaries, and MPs were booked to sit in the House from 9.30 – 5. MPs must attend all the EPCs.

The Secretary responded that Members were correct and the house chair would send instructions that no committees were to meet during the EPCs. The programme had been compiled but the instruction of the house chair supersedes what was written in the Committee agenda.

The Acting Chairperson stated that next week the Committee’s reports would be adopted. Was that in order? This closed the matter of the programme.

Another matter had come to her attention. The Committee received a letter from the Children’s Institute. They indicated that in the amendments to the Act they gave an amendment to the Department. If  Members looked at the matrix received from the Department, the amendments made by the Children’s Institute were supported. So the Committee would send the letter to the Department and, because the Department supported the amendment, the Committee would have to see how it could be added to the Act. She instructed Members to read through the letter received and then the Committee would discuss it next week. A legal opinion would be obtained to see how it could be included in the amendment.

The Secretary commented that upon receiving the letter she did some groundwork to solicit what the Committee could do. She forwarded it to the Committee’s legal advisor and to Department’s legal advisor. The response she received from the Department’s legal advisor was that the amendment did not concern legal issues, but was more operational. This is not a train smash because the Department supported it. She was waiting on a response on whether it would be possible to include the amendment.

The meeting was adjourned.