ATC130605: Report of the Standing Committee on Appropriations on the Strategic Plan, Annual Performance Plan and Budget of the National Youth Development Agency, dated 5 June 2013

Standing Committee on Auditor General

REPORT OF THE STANDING COMMITTEE ON APPROPRIATIONS ON THE STRATEGIC PLAN, ANNUAL PERFORMANCE PLAN AND BUDGET OF THE NATIONAL YOUTH DEVELOPMENT AGENCY, DATED 5 JUNE 2013

REPORT OF THE STANDING COMMITTEE ON APPROPRIATIONS ON THE STRATEGIC PLAN, ANNUAL PERFORMANCE PLAN AND BUDGET OF THE NATIONAL YOUTH DEVELOPMENT AGENCY, DATED 5 JUNE 2013

1. Introduction

In terms of section 10 (1) (c) of the Money Bills Amendment Procedures and Related Matters Act, No 9 of 2009, the relevant members of Cabinet must table updated strategic plans for each Department, public entity or institution, which must be referred to the relevant committee for consideration and report. The Strategic Plan for 2013-2018, the 2013/14 Annual Performance Plan (APP) and the Budget of the National Youth Development Agency were tabled in Parliament on 23 April 2013. Furthermore, a revised Strategic Plan for 2013-2018, and revised 2013/14 Annual Performance Plan were tabled on 15 May 2013. The revised documents were referred to the Standing Committee on Appropriations on 21 May 2013. On 15 May 2013, the Deputy Minister in the Presidency: Performance Monitoring and Evaluation as well as Administration, Mr O Bapela , the Chairperson of the National Youth Development Agency Board, Mr Y Pillay, the Chief Executive Officer and senior officials briefed the Standing Committee on Appropriations (herein after referred to as the Committee) on the revised Strategic Plan for the 2013 - 2018 and the Annual Performance Plan and budget for the 2013/14 financial year.

2. Mandate of the National Youth Development Agency

The National Youth Development Agency (herein after referred to as the NYDA) is a national public entity owned and funded by government. It was launched on 16 June 2009 (Youth Day) by the President of the Republic of South Africa , His Excellency J.G Zuma. The NYDA came about as a result of the merger of the National Youth Commission (NYC) and Umsobomvu Youth Fund (UYF) in 2007 and subsequently the National Youth Development Agency Act No 58 of 2008. Furthermore, the NYDA was established to address youth development issues in the country. The NYDA reports to government through the Office of the President.

The NYDA is a South African Youth Agency established primarily to tackle challenges faced by the country’s young people. The institution was established to be a single, unitary structure, to address youth development issues at all spheres of government. The existence of the NYDA should be located within the broad context of South Africa ’s development dynamics. Similar to many developing countries, South Africa has a large population of youth with those between the ages of 14 and 35 constituting 42 per cent of the total population. Given the youthful nature of the country’s population, much of the socio-economic challenges facing the nation, i.e. poverty, inequality, unemployment, poor health etc, are borne by the youth. The gravity of the challenges faced by young people in the country require a multi pronged approach that simultaneously promotes the development of sustainable livelihoods, reduces poverty and inequality and prioritises the development of policies which create an enabling environment for youth development.

The NYDA seeks to play a leading role in ensuring that all major stakeholders, i.e. government, private sector and civil society, prioritise youth development and contribute towards identifying and implementing lasting solutions which address youth development challenges.

The NYDA derives its mandate from various legislative frameworks, including the National Youth Development Agency Act, No 58 of 2008 (NYDA Act), the National Youth Policy (2009 – 2014) and the Draft Integrated Youth Development Strategy. The NYDA mandate as outlined in the NYDA Act can be summarized as follows:

· To lobby and advocate for integration and mainstreaming of youth development in all spheres of government, private sector and civil society;

· To initiate, implement, facilitate and coordinate youth development programmes;

· Monitor and evaluate youth development intervention across the board; and mobilise youth for active participation in civil society engagements.

3. Strategic Shifts for the 2013 MTEF

As from 01 April 2013 a new Board of the NYDA assumed office. The new Board committed to the citizens of the country to restore the image and credibility of the NYDA.

The broad review of the mandate and operations of the NYDA by the new board with vital inputs and guidance from the Committee led to the realization that the mandate of the NYDA in its current form is too broad thus making it difficult to have focused interventions. The NYDA has also experienced challenges in the effective implementation and monitoring of youth development programmes at provincial and local levels. As a result thereof, it has been proposed that the NYDA Act must be reviewed in order to streamline the NYDA’s mandate and give the NYDA powers to coordinate and implement youth development at provincial level. The NYDA indicated that the draft legislation has been completed with inputs from various stakeholders including Office of the Premiers and government departments and is currently undergoing legal scrutiny.

The NYDA will prioritise education and skills development as its core area of emphasis in the rollout of all its programmes in the 2013 MTEF. This emanates from the realisation that a lack of skills is consistently identified as the major impediment in efforts to successfully drive youth development.

To ensure that high standards of honesty and integrity are entrenched and maintained within the Agency, a new Social and Ethics Committee will be established in the 2013/14 financial year.

The NYDA has adopted a new vision, mission and value statements in line with its plans to restore public confidence in the Agency. The NYDA also undertook several key strategic shifts in ensuring it fulfils its commitment to restore its image and credibility. The new vision, mission, value statements and strategic shifts for the 2013 MTEF are outlined below:

Vision

· To be a Credible and Capable Development Agency for South Africa ’s Youth

Mission

· To mainstream youth issues into society; and

· To facilitate youth development with all sectors of society.

Value Statements

· Excellence, Honesty and Integrity, Respect, Care, Punctuality; and Timeliness.

Key Strategic Shifts

· Comprehensive review of the NYDA’s goals, strategy and outcomes;

· Reduction of the Key Performance Areas from 10 to 5 to ensure more focused youth interventions, and;

· Reducing the Key Performance Indicators from 72 to 27 to make performance measurement more realistic.

· Adoption of the grant funding model to replace the enterprise loan finance mechanism

4. Strategic Outcomes

The Revised Strategic Plan and Annual Performance Plan of the NYDA for the 2013/14 financial year are informed by the following four strategic outcomes:

· Improved and sustainable livelihood opportunities for young people in South Africa

· Enhanced enabling environment that promotes youth development in all sectors of South African Society

· Enhanced participation of young people in social cohesion towards nation building.

· Develop and enhance a credible and capable youth development Agency

5. Key Performance Areas

To implement the above-mentioned strategic outcomes the NYDA will focus on the following 5 Key Performance Areas:

· Economic Participation

· Education and Skills Development

· Policy Research and Development

· Health and Well-being

· Governance and Administration

6. Overview of the Budget for the 2013 MTEF

Table 1: Budget Summary for the 2013 MTEF

Budget and Revenues

Main Appropriation

Medium-Term Estimates

Programmes Budget Excl. Compensation of Employees

2013/14

R’000

2014/15

R’000

2015/16

R’000

Economic Development

51 837

54 377

56 878

Executive Directors Office

16 471

17 278

18 072

Communications and Public Relation

22 159

23 245

24 314

Corporate Services

54 808

57 494

60 139

Research and Policy

18 921

19 848

20 761

Partnership and Stakeholder Management

1 586

1 664

1 740

Financial Management

7 488

7 855

8 210

Chief Executive Office

6 007

6 302

6 592

Information Communication Technology

14 645

15 363

16 070

National Youth Service and Skills Development

53 649

56 277

58 866

Service Delivery Channel

7 434

7 799

8 157

Chief Operating Office

1 092

1 145

1 198

Total Programmes Excl. Compensation of Employees

256 097

268 647

280 997

Economic Classification

Compensation of Employees

171 467

179 869

188 143

Goods and Services

256 097

268 646

280 997

Payments of Capital Assets

4 862

5 101

5 335

Total Budget

432 426

453 616

474 475

Transfer from Vote 1: Presidency

392 710

411 237

425 765

Interest and Capital Repayments

39 716

42 379

48 710

Total Revenues

432 426

453 616

474 475

The NYDA’s budget is included under Vote 1-the Presidency. The total budgeted transfer from the Presidency to the NYDA for the 2013/14 financial year amounts to R392.7 million. The budget transferred to the NYDA increases over the medium term to R411.2 million in 2014/15 and R425.8 million in 2015/16.

In addition to the transferred budget allocation, the NYDA raises its own revenue through interest income and capital repayments on loans and an amount of R39.7 million has been budgeted for in 2013/14. The consolidated budget of the NYDA therefore amounts to R432.4 million in 2013/14, R453.6 million in 2014/15 and R474.5 million in 2015/16. The NYDA indicated that a key strategy for enhancing the effectiveness of the utilization of resources in the 2013 MTEF will be a shift in emphasis in spending away from internal operations and move towards prioritizing expenditure to outward focused youth development service delivery programmes.

The 2013/14 budget allocation for the NYDA shows that the programmes receiving the largest allocations were Corporate Services at R54.8 million followed by National Youth Service and Skills Development at R53.6 million and Economic Development at R51.8 million. The budget allocation for Compensation of Employees was R171.5 million in the 2013/14 financial year and shows inflation linked growth in the medium term. Spending reductions of R25.5 million have been effected in the medium term in the budget allocation of the NYDA as part of Cabinet approved budget reductions.

7. Strategic Outcomes and Key Performance Areas

7.1 Strategic Outcome Goal One

Strategic Outcome Goal One: Improved and sustainable livelihoods opportunities for young people in South Africa comprises of three Key Performance Areas (KPA), namely, Economic Participation, Education and Skills Development; and Health and Wellbeing. Economic Participation aims to enhance the participation of young people in the economy through targeted and integrated programmes. A key feature of this performance area is the shift from loan funding to grant funding as a delivery method for financial support to youth owned enterprises. Grant Funding will be complemented by Business Development Support Services and Mentorship in order to provide a holistic package in supporting youth enterprises. The Youth Grant Fund will be launched in June 2013 and the Youth Cooperatives Fund will be launched in July 2013.

In enhancing the participation of young people in the economy, the NYDA plans to establish 500 youth owned enterprises and provide support to 37,975 youth enterprises in 2013/14. The target for the establishment of 500 enterprises will be spread throughout the provinces, i.e. Gauteng (80), Mpumalanga (70), Limpopo (60), Free State (30), Northern Cape (50), Eastern Cape (60), Western Cape (40) and KwaZulu-Natal (60). The NYDA indicated that, generally, young people required small and micro grants to assist them in setting up enterprises. In addition, the Agency will partner with established large business funding facilitators such as the Industrial Development Corporation (IDC) in cases where large capital funding is required for a given youth enterprise. Moreover, the NYDA plans to create 2,500 jobs through grant funding and business development services and provide for 1,500 job placements for young people in 2013/14.

The Education and Skills Development KPA aims to facilitate and implement education opportunities to improve the quality of education attainment for the youth and also to facilitate and implement skills programmes. In facilitating and implementing education programmes, the NYDA will support 130 young people through the Solomon Mahlangu Scholarship programme in the 2013/14 financial year. Three thousand young people will be enrolled for the Matric -rewrite programme in 2013/14 and the number is set to increase to over 4,000 in 2015/16. The NYDA will continue supporting young people through career programmes and 700,000 young people will benefit from the programme in 2013/14.

In driving its skills programme for young people, the NYDA plans to have 1,500 young people participating in structured Youth Build programmes aimed at empowering and capacitating youth in communities. The Youth Build programme seeks to develop the academic, leadership and technical skills of young people through on-the-job training opportunities in the construction sector. It is envisaged that this programme will be expanded to other sectors such as the Information Communication Technology (ICT) sector in the medium term. In addition , 100,000 young people will be supported through the job preparedness programmes.

The Health and Well-being KPA under Strategic Outcome Goal One aims to improve the health and wellbeing of young people to allow them to productively lead fulfilling socio-economic lives associated with a responsible and sustainable nation. In particular, the NYDA plans to benefit 5,000 young people through various health and wellbeing intervention programmes.

7.2 Strategic Outcome Goal Two

Strategic Outcome Goal Two: Enhanced enabling environment that promotes youth development in all sectors of South African Society comprises of the Key Performance Area: Policy and Research Development. The Policy Research Development KPA aims to develop a body of knowledge and best practice in the youth development sector to inform and influence policy development, planning and implementation. The key objectives of Policy and Research development are:

  • To create and produce information and knowledge for better youth 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 democratic processes and promote social cohesion
  • To mobilize and leverage financial resources from third parties

The NYDA plans to design five new youth development programmes and produce 80 knowledge management and youth related reports in the 2013/14 financial year. In addition, the NYDA plans to complete 100 evaluation reports of programmes and projects that it has undertaken. The NYDA intends to establish the Youth Development Institute (YDI) in 2013/14. The institute will serve as the central hub for youth related research projects and it will partner with various research bodies and institutions of higher learning. Part of the outputs envisaged for the YDI include the formulation of the Youth Development Index that will assist in gauging progress the country is making in addressing youth development challenges. Other key projects to be undertaken under Policy and Research Development include, namely:

· Development of Youth Employment Strategy for South Africa 2050 with the aim of halving youth unemployment by 2050;

· National Youth Service Programme, the NYDA to lead the review and reframing of current models of the National Youth Service Approach;

· Re-drafting of the National Youth Policy 2015-2020 and the Integrated Youth Development Strategy in conjunction with the Public Service Commission;

· Design and implementation of special projects to address the needs of people with disabilities and implementation of the Rural Youth Development Strategy; and;

· Two percent of all programme interventions will be ring-fenced towards supporting the needs of people with disabilities.

The NYDA indicated that the revised Integrated Youth Development Strategy will be completed by the end of the financial year. The NYDA plans to have 700,000 young people receiving information on youth development through the Agency’s access points. In fulfilling its key objective of lobbying key stakeholders to support and implement youth development programmes, the NYDA plans to lobby 30 private and public entities to establish youth directorates. In addition, the Agency intends to establish 70 partnerships across government, the private sector and civil society. The NYDA indicated that it has been in discussions with Telkom and its cellular phone subsidiary 8ta on ways to utilise young people in its marketing activities.

To expand its reach to all young South Africans, the NYDA plans to host 106 dialogue sessions with young people and will mobilise 1,500 young women and disabled youth to participate in youth development programmes. The NYDA plans to mobilise and leverage financial resources from third parties and aims to raise R80 million in the 2013/14 financial year.

7.3 Strategic Outcome Goal Three

Strategic Outcome Goal Three: Enhanced participation of young people in social cohesion towards nation building comprises of the Key Performance Area: Health and Well-being. This KPA seeks to increase awareness on the health lifestyles that promote good health practices amongst the youth of South Africa , including the dangers of substance abuse, unprotected sex, importance of good nutrition, sexually transmitted diseases and the impact of HIV and AIDS amongst young people. The NYDA will continue to utilise partnerships with Love Life and other related stakeholders to achieve its health and lifestyle programmes objectives. The NYDA plans to carry out four health and wellbeing campaigns and implement a number of special projects in 2013/14. The number of campaigns and special projects in health and wellbeing will increase from four to nine in 2015/16.

7.4 Strategic Outcome Goal Four

Strategic Outcome Goal Four: Develop and enhance a credible and capable youth development Agency comprises of the Key Performance Area: Governance and Administration. This strategic outcome area is defined as the efficient and effective utilisation of resources through the provision of judicious governance, technology and systems, business operation systems, human capital and financial management systems that adhere to relevant legislative requirements. The NYDA has attained an unqualified audit opinion for the past three financial years. In addition, t he Board has capacitated and instructed the audit committee of the organization to perform more regular audits to ensure compliance and improved processes in key governance areas such as supply chain audits and value add audits.

The NYDA will develop a systems roadmap in 2013/14 through the auditing of its Information Technology (IT) systems for efficiency and effectiveness. Furthermore, there will be a review of the current business processes to ensure that processes are aligned to the programmes and products and services. The Agency plans to further expand its reach and will establish 30 access points in the 2013/14 financial year. The Agency will train and capacitate 400 staff to ensure the effective delivery of youth development services

8. Deliberations

The Committee welcomed the Board’s commitment to restore the image and credibility of the NYDA. It supported the change in the NYDA’s strategic direction towards more focused interventions and was of the view that the shifts will enhance the efficiency and effectiveness of the NYDA operations and outputs.

The Committee enquired from the NYDA whether they had a proper transition plan in place for the implementation of the new grant funding model. The Committee was of the view that a transition plan would assist in strengthening public confidence in the organization and its funding programmes. It was indicated that such a plan must encompass transparency in the administration of grant funding through clear criteria and guidelines for accessing grant funding and accountability mechanisms for beneficiaries. The Committee viewed the submission and thorough analysis of business plans as critical in the process of awarding grant funding to beneficiaries.

The Committee expressed concerns regarding the considerable lack of awareness amongst young people about the NYDA, its mandate and services. Furthermore, the Committee highlighted that the NYDA’s budget for Communications and Public Relations seemed insufficient to address the significant redress required to resolve the current limited awareness by young people on the products and services of the Agency.

The Committee was concerned about the NYDA’s pursuance of partnerships that may be favourable to one service provider over another in a competitive sector market. In particular, the Committee expressed the concern that the partnership with the new cellular phone company may unfairly prejudice other cellular phone network providers in the market. The NYDA indicated that all service providers and any other stakeholder (including all cellular phone companies) were welcome to initiate partnerships with the Agency. The Committee viewed the perception of the Agency as being non-partisan as vital for the image and credibility of the NYDA.

The Committee was of the view that programmes of the NYDA need to take into account the needs of young graduates and young qualified professionals. Furthermore, whilst the Committee recognises the importance of skills in the mathematical sciences, however it called for the NYDA to prioritise other skills sets required by young people by enhancing its programmes at school level to include the development of other sciences and entrepreneurial skills. The NYDA indicated that it needs to enhance its graduate database so as to have more graduates registering and broaden the linkage with potential employers. The NYDA indicated that it strived to have programmes that cater for all career and youth development fields.

The Committee was concerned about the timeline alignment between the proposed Youth Employment Strategy for South Africa 2050 and the National Development Plan Vision 2030. The Committee highlighted the need for consistency and alignment between programmes initiated by the NYDA and long term government plans.

The Committee sought clarity on the role that the Agency plays in the event of large uptake of young people in institutions like the South African National Defence Force (SANDF). The Committee was of the view that the NYDA needed to leverage partnerships with institutions such as the SANDF where young people could be channelled into technical and engineering branches within SANDF. The NYDA indicated that it will seek to enhance and mainstream its partnerships with departments such as the SANDF and other large programmes such the Expanded Public Works Programme and the Health Brigade.

The Committee pointed out that there seems to be an overlap in the classification of expenditure items on the NYDA Budget in relation to operational expenses and project disbursements. Furthermore, the Committee was concerned that based on previous trends there was no assurance that the NYDA would be able to collect all the revenue budgeted for. This was viewed as a potential cash flow risk given that budgeted expenditure for 2013/14 equals budgeted revenue.

The NYDA indicated that it formulates its budget according to the Activity Based Costing (ABC) system hence the tagging of operational expenses and project disbursements for the same expenditure items. However the Committee highlighted that the Agency should review its budget classification for reporting on expenditure items so as to show clear distinctions in expenditure items. With regard to the collection of revenue, the NYDA reported that it has undertaken legal steps towards some loan beneficiaries and was in the process of negotiating settlement proposals and revised repayment terms and anticipated that it would be able to collect all the budgeted revenue.

The Committee requested the details on progress made in addressing findings made by the Auditor-General of South Africa (AGSA) in previous audit cycles. The Committee pointed out that addressing matters of emphasis highlighted in the findings of the AGSA was critical in enhancing governance in the Agency. The NYDA indicated that in the previous audit cycle, there were two main areas of emphasis, namely, compliance with supply chain management (SCM) regulations and loan impairments. Positive progress has been made on both fronts with significant reductions of non-compliance with SCM procedures and the pursuance of legal processes to recoup outstanding loan repayments.

9. Observations and Findings

The Standing Committee on Appropriations, having considered the Strategic, Annual Performance Plans and Budget of the National Youth Development Agency, made the following findings and observations:

9.1 The new vision, mission, value statements and streamlined performance objectives of the NYDA are a positive step towards reviving the image and credibility of the NYDA.

9.2 The NYDA has shifted its youth enterprise support strategy from enterprise loans to grant funding. The Committee views the development of strict criteria and guidelines in the awarding of grants as critical in ensuring sustainability and accountability.

9.3 The National Youth Development Agency Act, No. 58 of 2008 is currently under review as a result of challenges experienced by the National Youth Development Agency in the effective implementation and monitoring of youth development programmes due to its broad mandate and the need to review the institutional, administrative and management arrangements at provincial and local levels.

9.4 The National Youth Development Agency has limited reach in terms of its visibility and accessibility to all young people. Furthermore, the Committee finds that there are disparities in the ability of young people to access information given their particular geographic location (i.e. rural areas versus urban areas).The Committee views the need for easier access to the products and services of the NYDA by all youths especially women, people with disabilities and rural youth as a strategic imperative.

9.5 The NYDA may be involved in partnerships that could be perceived as partisan. The Committee, however, welcomes the affirmation by the NYDA that it is transparent and open in its partnerships and that all stakeholders are welcome in initiating partnerships with the Agency.

9.6 The NYDA has undertaken to develop the Youth Employment Strategy for South Africa 2050 (YE-SA 2050) to halve youth unemployment by 2050.The Committee, however, views the alignment of any long term youth development strategy with the National Development Plan Vision 2030 as critical to ensure alignment with other government programmes.

10. Recommendations

The Standing Committee on Appropriations, having considered the revised Strategic Plan for 2013-2018, the Annual Performance Plan and the Budget of the National Youth Development Agency for the 2013/14 financial year, recommends as follows:

10.1 That the Minister in the Presidency for Performance Monitoring and Evaluation as well as Administration should ensure the following:

10.1.1 That the National Youth Development Agency develops a grant funding

framework that provides a basis for transparency, fairness and accountability in the awarding of grant funding.

10.1.2 That the National Youth Development Agency enhance its visibility and accessibility to all youth by undertaking a media strategy analysis in order to determine the best and most cost effective outreach platforms that will reach more young people including those in the rural areas and the youth with disabilities.

10.1.3 That the National Youth Development Agency put in place change management mechanisms and a rigorous performance management system to ensure that all staff of the NYDA respond rapidly and effectively in the implementation of the new vision and mission of the Agency.

10.1.4 That the National Youth Development Agency form partnerships in a transparent manner which cannot be misconstrued to be unfairly prejudiced in competitive sector markets.

11. Conclusion

The Standing Committee on Appropriations, having considered the Annual Performance Plan and the Budget of the National Youth Development Agency for the 2013/14 financial year supports the Annual Performance and Budget of the National Youth Development Agency for 2013/14 which forms part of Budget Vote 1: The Presidency.

Report to be considered.

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