NYDA and Audit & Risk Committee on Quarterly Performance

Meeting report

Briefing by the Audit and Risk Committee on the National Youth Development Agency Reports

Ms Reabetswe Kungwane, Independent Member of the Audit and Risk Committee (ARC), presented the findings of the second, third, and fourth quarterly reports on the National Youth Development Agency (NYDA).

The input and recommendations by the ARC was structured the following way: performance information, annual performance plan (APP) 2022/23; unaudited annual financial statements and management accounts; unauthorised, irregular, fruitless & wasteful expenditure; deviations; budget 2022-23; annual procurement plan 2022-23; internal audit activities. Other contents included the risk management activities; ICT governance; POPIA Act; COVID-19 internal control measures; Auditor-General (AG) strategy and fees structure, and the progress report on AGSA action plan.

In terms of the budget for 2022-23, the ARC requested management to re-look the ICT budget regarding the high value of laptops to be procured. Oversight must be done on the value of these laptops.

The Chairperson asked what model of laptops they are.

Ms Kungwane said it is an amount of R29 000 for each laptop.

Mr Waseem Carrim, Chief Executive Officer, NYDA, said that there is now a demand for laptops, especially with people working from home and students. It is better to choose quality over quantity. A laptop that costs R15 000 lasts a year or two. Whereas a laptop of R30 000 or more lasts almost five years. These are the elements that need to be considered. There are discussions to buy these laptops in bulk and seek out discounts. Sometimes, when workers leave, laptops are reassigned to someone else to ensure full value of money spent.

In terms of the internal audit report based on financial discipline reviews, the Chairperson asked for clarity about the long outstanding reconciling item not cleared (interest charge on lease building) since 2018 July 20 and August 01.

Ms Kungwane explained that this interest amount should not have been cleared.

Mr Carrim explained that service providers are paid in advance on the first day of the month. Sometimes there might be some discrepancies in the invoices. As a result of the inquiries, the money might only be received a week or two later. The landlord will then for instance add interest. This particular issue in the report is a building that is being rented in the Eastern Cape. The landlord has informed the NYDA that the interest amount will be removed. So, this issue has been resolved and the interest amount will no longer have to be paid.

(see presentation for more details)

Ms F Masiko (ANC) was happy with the progress that the NYDA has made so far.

The Chairperson informed Ms Masiko that, if she is no longer in the meeting, it will be due to electricity. She handed over to the NYDA for its presentation.

Briefing by the National Youth Development Agency on its Fourth Quarterly Report

Ms Asanda Luwaca, Executive Chairperson of the NYDA Board of Directors, said that this youth month will focus on promoting sustainable livelihoods and resilience of young people for a better tomorrow. Society remains hostile to the work of government insofar as the development of youth is concerned. There is the Trailblazer Campaign, which aims to celebrate ordinary young people doing extraordinary work against the backdrop of unemployment, inequality, crime, climate change, and the COVID-19 pandemic. The first week of the youth month will be focused on youth entrepreneurship, with a particular focus on how to start enterprises. The second week deals with job programmes such as the role that SETA plays. The third week is focused on career programmes. There will be a particular focus on NSFAS, second chance to write matric examinations and life after matric. The last week is on the national youth service. This is to encourage young people to go into communities, particularly those affected by floods, to provide necessary services. There will also be a keen interest in non-profit organisations.

The Chairperson asked what the non-profit organisations will focus on. There are already many non-profit or non-governmental organisations. It would be a great idea if these new non-profit organisations were in line with the fourth industrial revolution.

Ms Luwaca said the focus will be on the spirit of young people to be more involved in-service work as far as youth development is concerned. She said that this can be developed to be in line with the fourth industrial revolution. No youth person will be left behind.

The Chairperson hoped that the organisations that previously failed will be included and worked on. She said that there should not be just talk shows.

Mr L Mphithi (DA) asked if the youth month programme can be shared with the Committee because it cannot be found on the website. 

Mr Carrim presented the fourth quarterly report to the Committee. The presentation consisted of the context, progress on the presidential youth employment intervention, quarterly performance report, quarterly finance information, human resources, BRRR and the monitoring and evaluation of the NYDA Grant Programme.

The Presidential Youth Employment Intervention is a direct response to the challenge that too many young people are not transitioning from learning to earning. The intervention has already begun to increase levels of alignment across government and to create space for innovation in ways that accelerate delivery and catalyse further actions.

In the financial year under review, the NYDA had 22 KPIs and they were all met, and some met and exceeded. The KPIs were distributed among the programmes in this manner:

- Programme One: Administration (ten KPIs)

- Programme Two: Design, Development, and Delivery (eight KPIs)

- Programme Three: Integrated Youth Development (four KPIs)

The Grant Programme is designed to provide young entrepreneurs an opportunity to access both the financial and non-financial business development support to establish their survivalist businesses. The programme focuses on youth entrepreneurs who are at intentional, nascent and new stages of enterprise development. In the financial year under review, a total of 2 007 young people received grants. The Grant Programme has issued 1 002 grants to females, 1 005 to males and 40 (4%) to persons with disabilities. This shows that there are ongoing efforts to achieve gender parity in the distribution of grants. Young people between the ages of 31 and 35 were the most recipients of grants in the period under review, followed by those between 26 and 30, whilst those between 20 and 25 were the least recipients. Most of the grants issued in the period under review were consumed in the service sector. Mpumalanga, KwaZulu-Natal, and Gauteng disbursed most of the grants, followed by Eastern Cape and Western Cape. Least disbursements were from North West and Northern Cape.

Jobs created and sustained through entrepreneurship development are derived from the three programmes, namely: market linkages, voucher and grant programme. The jobs are either created or sustained as a result of the intervention offered by the programme in business on a young entrepreneur. The NYDA has six non-financial services that assist young people in the entrepreneurship space. This includes the business management training programme, mentorship programme, market linkages, co-operative governance, sales pitch and broad-based black economic empowerment.

The recruitment process for all 49 Interns has been finalised and they are due to commence on 01 June 2022. In addition to that, the entity has 33 positions that are being recruited, and 24 of those are permanent positions.

Ms Khuthadzo Mbedzi, Chief Financial Officer, NYDA, presented to the Committee the financial performance of the NYDA. Covid-19 expenditure for the fourth quarter was at R 93 000 (administration) consisting of sanitisers. There was also no fruitless or irregular expenditure. There were no cases of financial misconduct. The Auditor-General is busy with the audit of the 2021/22 financial year, and unaudited financial statements were submitted on 31 May 2022, in line with AGSA requirement timelines. In terms of the 2020/21 audit management letter, an action plan was developed to address the findings raised in the management letter. By the end of the fourth quarter, six of the eleven findings were solved and the other five were still in progress.

Mr Carrim went over the BRRR, which included recommendations and resolutions.

The impact evaluation of the 1 000 grants issued was presented by a business management consultant, Redflank.

Ms Rayleigh Motala, Junior Consultant, Redflank, took the Committee through the impact evaluation of those grants.

Discussion

Ms T Masondo (ANC) commended the NYDA for taking care of persons with disabilities. She asked what percentage the NYDA has in addressing issues of persons with disabilities, as the CEO was talking about strategies. Why is the quarter four budget for jobs R44.248 million? What is the percentage spent determined for the job programmes? How successful have the Business Management Services been for 2021/22 as well as the linkages and mentorships? How does mentorship link to the actual number of people who received grants in 2007? Why is not every recipient assigned a mentor?

She noted that there was not much demand seen from young people in sectors such as education, engineering, health and farming. Why was this the case? What is the catch-up plan with local municipalities to exceed the target capacitating the number of youth with skills to enter the job market? What was the outcome of the National Youth Service programme? What were the key challenges and recommendations identified? Programme three, what were the key findings?

Regarding human resources, why did the number of positions increase from 531 to 556 from when the NYDA last presented to the Committee? What does the position of an informational diary entail? What is the difference between head office officers and other officers? She requested a detailed list of the type of specialists required by the NYDA be provided.

Ms B Marekwa (ANC) commended the ARC for the presentation. The issue of communication is something that stood out to her. It is important that the NYDA reach out to all communities to ensure that youth know and understand the importance and the role of the NYDA. She was pleased with the reasons for the late payments and the progress report on the implementation of the audit action plan. The NYDA is implementing the recommendations of the NYDA.

What is the NYDA’s action plan to attract more young people in sectors such as health and ICT? There are failed businesses, but which businesses are they? What is NYDA doing to assist those failed businesses? How is the NYDA going to help those that are going through training? There are people who train only for a week, but they show an eagerness to learn. The NYDA is reaching out to rural areas, and that is fascinating. The mandate of the NYDA should be clear that no one will be left behind, whether they are people with disabilities or live in urban areas. Teacher assistance is good for the community and the issue of youth unemployment. This also benefits the learners and teachers. How is the NYDA going to ensure the continued employment of teacher assistance?

Ms S Hlongo (ANC) asked what the long-term follow-up plan is for the people that participated in the presidential youth employment intervention. What is the catch-up plan that aided NYDA in meeting targets and exceeding them? This could be useful for other entities and departments. She commended the NYDA board for accomplishing so much in such a short space of time.

Ms Masiko said that the follow-up plan for those that participated in the presidential youth employment intervention is important. It is important to understand what, in terms of the youth, is sustainable. About 46% of the youths are participating or are part of the beneficiary list or profile that are participating in the services sector. What is the NYDA going to do to ensure and encourage youth from other sectors such as ICT, which is important especially since the world is moving according to the fourth industrial revolution? There needs to be a change in profile of the beneficiaries to not only show the service sector but other sectors as well.

Mr Mphithi said that it is commendable that the NYDA has added an acknowledgement of persons with disabilities. It is fundamentally important for the NYDA to be as inclusive as possible and not only provide services to a particular group of people or demographic. People with disabilities have been continually left out of government programmes. However, the NYDA does not mention anything about mental health. What types of programmes will the NYDA be pioneering along the issue of mental health? There have been many stories of how mental health particularly affects young people. “We cannot speak about the creation and entrepreneurship when the well-being and mindset of young people are deteriorating”, he added. The issue of mental health has to be addressed. How does the arrangement with the Department of Women, Youth and People with Disabilities and the NYDA work? The APP of the Department looks concerning because it wants to do oversight over the NYDA and take powers from them. This should not be happening, and it should therefore be monitored. The Department should be there to support the NYDA. Has this working relationship improved?

The rural intervention by the NYDA is not enough. What is the development for rural areas? The youth month programmes taking place in Eastern Cape are a good way to pursue that type of intervention. However, what about the other areas? What type of work and development is happening in those areas? The relationship between the mentor and mentee is fundamentally important. When the mentors are there, there should be an understanding of the basic agreement and the sessions that will take place. This is important for someone that receives a grant from the NYDA. Not everyone is book-smart, and so this will allow a person to use their ability with the assistance of the mentor. It is important to know the particular process and relationship between the mentor and mentee with respect to mentorship.

What does training encompass? It is conceived that, when a person applies for a grant, they have to do particular training in order to receive that grant. Is there a curriculum for this particular training? How helpful is it? Have there been people after that grant where business has not performed successfully? For example, the laundry lady without the support and knowledge of her business did not do so well. In terms of full streams of funding, what are the percentages of grants given to particular streams, and what is the success rate? For example, a young person receives a grant of R10 000 based on needs that have been submitted on their application. How useful is that amount of money to that particular business? What are the actual market linkages figures? What are the success rates of these market linkages?

On the cooperatives stream: can a report be provided on these figures to analyse the success and failure rate? There needs to be an analysis of what is working and what is not. The element of NYDA is an important element for young people who want to put their products out there and expand their business. A proper report on market linkages – particularly those that have been successful and those that have not, and what action steps are going to be taken forward to really build on that particular stream – should be provided. What is being done in the communication section of the NYDA? The communications manager is not doing a really good job. Who is this? The view of the NYDA has really tarnished, and people have lost trust in the NYDA. The NYDA should infiltrate places where they have never been before. This is done through communication. This will help people get to know the NYDA services. There are a lot of young entrepreneurs that do not know about the services and products of the NYDA.

Ms M Hlengwa (IFP) asked whether the programmes for youth month are a once-off programme or if it will be ongoing. The programme is targeted in the Eastern Cape; do they have something special? What about the other provinces? Why was the Eastern Cape chosen as the host of the day? Persons with disabilities are the ones suffering and not the implementers. She requested a report on who the grants are given to in table form. It must include who they are and where they are from. It is important to see how the grant moves, as there are nine provinces in South Africa and each province should benefit. She stressed the importance of teacher assistance.

Mr Mphithi suggested that it would be good to have the team of the Youth Employment Service (YES) programme present to the Committee, for Members to have full understanding of the programme – the type of work being done and the relationship with the NYDA. He asked what type of inputs have been made, in that particular programme, in those engagements with the presidency around the success of the ETI. Employment Tax Incentives (ETI) have been around for a while, and there are actual data and the type of job opportunities available to young people. In his opinion, it is a lot about the type of incentives that are being offered to the private sector. ETI is a great way to skill young people. However, if there is no buy-in, then it will not work. He said he would like to get a presentation of what is happening in the communications department of the NYDA. There cannot be just a communications department that tweets and uses Facebook and other social networks. There must be an overall strategy – a brand strategy around the NYDA’s image. Simply posting on social media is not adequate. Only six per cent of South Africans are on Twitter, so it is not reaching the majority of the people in the country. There is a lack in the communications department. The communications department needs to step up.

Responses

Ms Karabo Mohale, Deputy Chairperson, NYDA, said that findings such as communication not only of the grant recipients but the young in general are issues that have been raised to the board. There needs to be a communication strategy that speaks to the challenges that the NYDA is facing. There are challenges with regard to grants. It is sometimes not enough because of budget constraints. It hinders the number of young people and the amount of money they can be assisted with. It becomes a bit unsustainable for young people to sustain a successful business if they are provided with a small amount of money. The NYDA is looking at ways how to increase the budget of the grant system. One of the unintended consequences of trying to move systems online is that there is a large contingent of young people who still rely on face-to-face interaction or manual interaction. The process of going online and trying to reach out to young people who are in far-flung areas is something that does need to be addressed. The NYDA is trying to get in line with the fourth industrial revolution. When investing in a technological aspect, young people in rural areas should not be left behind. There has been some investment in outreach officers who visit these rural communities to engage with young people and help them with applications and any questions they may have. The NYDA also wants to invest in the different modes of communication. English is the business language, but South Africa has eleven official languages, and this cannot be neglected. Hopefully, some of the NYDA services will be accessible to young people who speak a different language other than English.

Ms Pearl Pillay, Board Member of the NYDA, said that there is a budget to deal with the issues of mental health. A mental health programme will be running through the national youth service. It will be a programme that the youth service volunteers and the general public can go through. A budget has been allocated, and there is now a team that is conducting research on existing mental health projects that are currently happening and mapping out what the mental health landscape currently looks like. This is to avoid duplicate efforts that have already been done by other organisations.

Mr Thulisa Ndlela, Board Member, said that the approach towards market linkages is based on regional engagements in different parts of the country. This includes engagements with the regional businesses and local government to allow young people that produce these items and services to be able to find access to a market. On an international level, there are partnerships in relationship with the Department of Small Business Development to open partnerships with their big business and enterprise. This is the same with skills development level to find a space to allow young people to produce the services and goods that they supply and manufacture to grow their businesses. A presentation as such can be made to the Committee to allow Members an opportunity to provide areas where the NYDA can improve. South Africa is a largely rural country. There are offices and partnerships with local and district municipalities to ensure that NYDA services reach young people in rural communities. There needs to be a balancing act to be careful as much as systems are being moved online so that those people in rural areas are not left behind. Now that most people work from home, access to computers and internet has become a hindrance. The NYDA does not have enough computers for young people. This is a hindrance because young people are not unable to complete applications. There is a need to bridge this gap.

Ms Alexandria Procter, Broad Member, said that she understood the frustration surrounding communication. Before, people used to go to large corporations and big broadcasting channels to get news. The youth is not listening to the radio and watching certain television channels. There are other ways to reach young people, such as social media. There are youth culture creators that have an audience on Instagram, Twitter, or TikTok, informing the youth about the NYDA. This is much more effective and cheaper. “Social media is our friend”, she said. Extending funds like the grants programme to younger entrepreneurs is very important. Similarly, as it is important to hand out money to help youth, it is just as important to source and recruit funds. Measures are being put into place to recruit more funding. The network issues are a challenge. It is even harder for those in rural areas. But this is something that needs to be resolved at a policy level. There are barriers to entry for other companies to come through to start a service in this country. For example, Starlink will be of assistance. Why is this not rolled out in Africa when Africa is at the forefront? There needs to be a breakthrough with technology.

Ms Lebogang Mulaisi, Board Member, said that the legacy that the board wants to leave behind is having created a solid communication strategy for the NYDA and the common young person. A young person needs to understand the product offering of the NYDA, the processes of the applications and the value proposition of the organisation. The communication issue has been discussed in numerous meetings.

Ms Luwaca said that the agency and board are deliberate and intentional on the issue of how to increase rural reach. There are outreach vehicles and mobile offices to ensure more youthful areas are reached. Information is disseminated by using information kiosks that are predominately placed in areas where young people frequent. Outreach activities have been increased in communities, schools, and institutions of higher learning with a particular focus on rural areas. The outreach programme has covered many areas such as Limpopo, Free State, Mpumalanga and Eastern Cape. There have been partnerships with district and local municipalities in a number of areas. The outreach programme will be monitored. The youth day programme calendar is available on the website but can be distributed to the Committee.

Mr Carrim said, on around people with disabilities during the 2021/22 financial year, there was a four percent achievement. Whereas the minimum benchmark for the 2022/23 financial year is at least seven percent. He said that the NYDA obviously of at least ten percent disability beneficiary on all products and the services of the NYDA. There are 638 mentorships, with a further 500 or so from the Small Enterprise Development Agency (SEDA). The grant beneficiaries that were supported in quarter four will receive mentorship in the first quarter of the 2022/23 financial year. There is just a time lag between the grant and the mentorship. The aim is to achieve 100 percent allocation between grant beneficiaries and mentorships. The NYDA is realising the value of mentorships in South Africa and the ability to support young entrepreneurs. SEDA is supporting the NYDA. The African Development Bank and the European Union are assisting the NYDA with implementing a comprehensive programme around mentorships. There are criteria around how mentors are recruited. There is an interview to assess their credibility and strengths. The young person being mentored can give feedback on the quality of the mentorship. NYDA has reached out the South African Institute of Chartered Accountants and to the JSC to assist with their corporate social investment programmes, to allocate human capacity to be able to assist with mentorship. Local municipalities have been contacted to provide venues for this.

The national, provincial and local government does assist the NYDA with implementing catch-up plans. In the head offices, there are more operational type of officers, like human resources, communication and finances. Whereas, with branch offers, there is some sort of focus on particular officers, which focuses on products and services like business development officers. The breakdown of specialist positions can be distributed in a spreadsheet to the Committee. There has been an increase in the number of positions because many offices only had one housekeeper, which required a lot of work and therefore more housekeepers were appointed – especially in areas where the organisation has grown. For example, three to four positions within the National Youth Service, given that the budget for this unit has substantially increased.

There have been optics around areas such as agriculture, but the NYDA has indeed been lagging behind in the education and health sector. For example, a young medical professional who is likely to establish their own businesses, like doctors and dentists, needs funding for things such as equipment, more from SEDA than the NYDA. In terms of education, there is a huge capacity for the NYDA to fund more early childhood development sectors. The NYDA is working with institutions such as the DG Murray Trust to see what can be done. The nature of entrepreneurship is that there will always be failure. One needs to learn from that failure and then assist a young person that has resilience and technical skills to be able to run a business and do it successfully. The NYDA does assist when they fail because they cannot go back to being unemployed. Interventions are explored to support them and re-enter them in the labour market or potentially help them with other ideas. Failure should be characterised as a learning experience. It takes two or three times to implement a successful business idea.

A new infrastructure point to reach rural areas is a bit challenging. The NYDA should leverage off the existing infrastructure. For example, digital access, can also cause a digital divide. It is not possible to have offices in every local municipality, but having a desk in every local municipality to fill entry positions of the NYDA through internship programmes is something that should be done. The NYDA is negotiating on this. Every national library in South Africa should be able to assist young people in receiving information. The teacher assistance programme is indeed one of the most successful public sector programmes, both in terms of young people doing a meaningful job and its coverage throughout the country. Another one is the institutional support that is provided to both the teacher and the learners in the basic education environment. Hopefully, this programme will contribute to reducing unemployment and improving educational outcomes.

There are two components attached to the long-term plan for the presidential youth employment intervention. The first is the quality of the presidential debate because some programmes previously did not deliver their mandate. The quality of the youth employment intervention is a top priority for the NYDA and long-term sustainability. The National Pathway Management helps the NYDA assess what young people's transitions are in the labour market and how effectively they move between opportunities as well as how effectively the NYDA can support them. The National Treasury has committed funding for the presidential youth employment intervention up to March 2024. Thereafter, there might a review as to whether this programme will continue or not. The NYDA will continue to be as inclusive as possible around disability.

The Department of Women, Youth and Persons with Disabilities (DWYPD) has always supported the NYDA. The increase of the budget would not have been possible without the support of the Director-General and the Ministry. There is indeed some growth in the relationship between the NYDA and the Department. It is important to receive feedback from young people that did the training and how it has helped them. In the next presentation, the NYDA will ensure that there is a detailed assessment of their training programme along with the feedback of those who have completed the training. The M&E (or ENE?) presentation showed that 84 per cent of business, which was funded 12 months prior to this report are still operating successfully. This number has increased incrementally. It used to be 58 per cent and has increased by 26 per cent over the last four years. The NYDA will try to break this down around the success rate, particularly per threshold, as requested by the Committee. There will be a more detailed discussion on market linkages in a next meeting. The NYDA commits to doing monitoring and evaluation around its market linkage programme.

The CEO said that he and management will take full responsibility for the issue of communication. It has been illustrated to the board that the NYDA is falling short of expectations. There will be a strategy session with the board on communication and how to improve it. It was a great idea to have the team of YES programme come to Committee and do a presentation. The different entities and organisations want to help and not just duplicate each other’s work. The youth employment service does not get funding from government; they are entirely funded by businesses across South Africa. However, some of the challenges from the youth employment service (YES) are around regional commitment to society. NYDA and the YES programme have weekly meetings and collaborate. The Employment Tax Incentive (ETI) is a programme that many economists have expressed. It is contributing to youth employment, and a million jobs can be created through this programme. It might take six to seven months to be able to see the impact that the adjustment of the ETI will have.

There is a rotational schedule for provinces. Last year, it was KwaZulu-Natal; this year, it is the Eastern Cape. All national days are a repository of the Department of Sports, Art and Culture, so they are responsible for the planning and execution because space is important. But this does not mean that the youth day programmes will only be in the Eastern Cape. At the NYDA centres, through partners and government programmes and the youth month calendar, there are many opportunities for young people. Youth month is not about talk shops; it is about giving young people access to meaningful opportunities that allow them to improve their lives. There is a massive exhibition that runs for three days for young people to have access to live opportunities available. This will inform them of what they will need to not run around when the application comes. He said that the NYDA is happy to provide a detailed number via a spreadsheet to the Committee on the grants programme.

The Acting Chairperson thanked the NYDA and the board members for their presentation and all their hard work. It is important that the NYDA keeps the line open between them and the young people of South Africa.

Consideration and adoption of Committee minutes

The minutes of 17, 24 and 31 May were adopted.

The meeting was adjourned.