ATC140303: Report of the Portfolio Committee on Social Development on the National Development Agency 2012/13 Annual Report, dated 18 February 2014

REPORT OF THE PORTFOLIO COMMITTEE ON SOCIAL DEVELOPMENT ON THE NATIONAL DEVELOPMENT AGENCY 2012/13 ANNUAL REPORT, DATED 18 February 2014

The Portfolio Committee on Social Development having considered and deliberated on the 2012/13 Annual Report of the National Development Agency (hereafter referred to as NDA or Agency) on 05 November 2013, wishes to report as follows:

1. Introduction

The Committee’s mandate as prescribed by the Constitution of South Africa and the Rules of Parliament is to build an oversight process that ensures a quality process of scrutinising and overseeing Government’s action and that is driven by the ideal of realising a better quality of life for all people of South Africa.

The Committee, as part of exercising its oversight function received a briefing from the NDA on its 2012/13 Annual Report. This report presents some of the key achievements and challenges encountered by the entity in meeting its set strategic objectives. It will also highlight the observations and made by the Committee.

2. Presentation by the NDA

2.1 Strategic Goals of the NDA

The NDA is a Schedule 3 (A) Public Entity established in terms of Section 2 of the National Development Agency Act [No.108 of 1998]. The NDA’s primary mandate is to contribute towards the eradication of poverty and its causes by granting funds to civil society organizations(CSOs) for the purposes of carrying out projects or programmes aimed at meeting development of poor communities, and strengthening the institutional capacity of other civil society organizations involved in direct service provision to poor communities.

STRATEGIC GOAL

The Strategic goal of the NDA was to leverage the strategic partnerships to eradicate poverty to enable poor communities to achieve sustainable livelihoods.

The strategic objectives were reported as follows:

· To carry out programmes or projects aimed at meeting the development needs of poor communities.

· To undertake research and publications aimed at providing the basis for development policy.

· To strengthen the institutional capacity of civil society organisations.

· To promote and maintain organisational excellence and sustainability.

· To promote debate, dialogue and sharing of development experience.

For 2012/13, the NDA operated under six strategic goals, namely:

2.2 Strategic objective 1: To carry out programmes or projects aimed at meeting the development needs of poor communities

To achieve this strategic objective, the NDA undertook to fund Civil Society Organisations (CSOs) that implement poverty eradication programmes. It managed to make the following achievements:

· 3 programmes on Early Childhood development (ECD), Food Security programme and Income Generation were approved;

· R26.6 million Rand value was allocated to ECD programmes against the target of R22.4 million;

· R30.2 million Rand value was allocated to Income Generation programmes against a target of R30 million;

· R79 million Rand value was allocated to projects against a target of R74.8 million;

· R71.1 million Rand value was disbursed against a target of R42 million. This included disbursements to projects approved in the previous years;

· R10.8 million Rand Value of investment in ECD infrastructure was provided against a target of R6.3 million;

· 153 food gardens on ECD sites were funded against a target of 129 food gardens;

· 73.1% youth and children were targeted in the NDA focus areas against a target of 20%;

· R80.6 million Rand Value of funds were mobilised for poverty eradication programmes against a target of R80 million;

· 4 122 beneficiaries of ECD were reached against a target of 3 850 beneficiaries;

· 3 480 beneficiaries of Food Security were reached against a target of 2 912 beneficiaries;

· 507 jobs were created through the ECD programme against a target of 114; and

· 477 jobs were created through the Food Security against a target of 400.

DEVIATIONS:

· There was a deviation of R18.7 million Rand value for Food Security against a target of R22.4 million. Food Security beneficiaries target was met with reduced funding representing efficiency in the utilisation of resources.

· There were 667 ECD practitioners that were trained against a target of 774. Although the training of the practitioners was underway, some of the modules and full qualifications had not been completed for recording in accordance with the required Portfolio of Evidence (POE).

· 60.5% women beneficiaries targeted in the NDA focus areas was achieved against a target of 70%. The under-achievement was due to the high uptake of youth, particularly in food security and income generation.

· 1.2% of people with disability was achieved against a target of 10% . - There was over-targeting in this area as the national norm is 2%.

· 906 jobs were created through the Income Generation Programmes against a target of 1 686. The target was reviewed to accommodate increased stipend for project members.

2.3 Strategic objective 2: To undertake research and publications aimed at

providing the basis for development policy

(i) NDA RESEARCH AGENDA AND THINK TANK

The research agenda for the Think Tank was approved. However, the Think Tank was not established. The Launch for the Think Tank was postponed to the next financial year due to a long vetting process for potential members of the structure.

(ii) RESEARCH TO SUPPORT INTERNAL FUNCTIONS

Under this programme, the following achievements were made:

· 88 close out evaluation reports on NDA funded projects were produced exceeding a target of 85.

· 3 case studies were produced on NDA programme areas, meeting the annual target of 3.

· 4 good practice reports were produced on the NDA programme areas, meeting the annual target of 4.

· 12 synthesis reports were produced, meeting the annual target.

· 47 performance monitoring reports were produced for the NDA funded projects exceeding a target of 42.

· 4 research reports on the NDA programme areas were compiled exceeding a target of 2.

· 5 Position papers/policy briefs on NDA programme areas were produced exceeding a target of 4.

DEVIATIONS

The following deviations were reported:

· 38 baseline reports were produced on the NDA approved projects against a target of 58. There were fewer projects that required baseline information funded by the NDA.

· 47 mid-term evaluation reports on the NDA funded projects were produced against a target of 127. There were fewer projects that required mid term evaluation than the targeted.

· The Online Resource Centre was not established due to the delays in completing the configuration of the IT tool for hosting the Online Resource Centre.

· The impact assessment report was not produced. The delay was caused by the long time it took to plan and conduct the impact assessment.

· Journal articles were not produced against a target of 2. The research studies that would inform the journal articles were completed in March 2013 limiting the time required to complete writing and producing journal articles.

· Development report was not produced against a target of 1. The delay was caused by the long time it took to plan and conduct the studies required to write and produce the development report.

· South African CSOs MDGs Country report was not produced against a target of 1. The delay was caused by the long time it took to plan and conduct the studies that will inform the MDGs country report.

2.4 Strategic objective 3: To strengthen the institutional capacity of civil society organizations

The NDA achieved the following to achieve this objective:

· 223 CSOs were capacitated in governance; financial, project and conflict management; business plans, strategic planning and technical skills exceeding an annual target of 210.

· 3 831 CSOs beneficiaries from CSOs capacity building interventions (governance; financial, project & conflict management; business plans, strategic planning and technical skills) were reached exceeding an annual target of 2 520.

· R4.4 million was allocated and disbursed to Capacity Building for Lobbying and Advocacy to CSOs networks exceeding an annual target of R4.2 million.

· CSO’s Database by geographic location and sector was developed as planned.

DEVIATIONS The Agency achieved 78% of CSOs demonstrating improved implementation (governance; financial, project and conflict management; business plans, strategic planning and technical skills). The deviation was due to the poor improved performance from participants who were trained on financial management which averaged 58% improvement.

2.5 Strategic objective 4: To promote and maintain organisational excellence and sustainability

2.5.1 Human Resource

Under this programme the Agency planned to complete the staff complement and develop a competent workforce. It made the following achievements:

· 2.26% of vacancy rate was approved against a target of 5%.

· There was a 1.75% staff turnover in critical skills against a target of 8%.

· 70% of staff was trained in accordance to the Work Skills Plan meeting the planned target of 70%.

· 96.1% of all staff achieved a performance rating of 3 and above exceeding the planned target of 95%.

The Agency also planned to create a conducive organizational climate and have organizational systems and processes reviewed and improved. It made the following achievements:

· 62.5% of positive rating of staff perceptions was achieved exceeding a target of 60%.

· 100% of recommendations from the climate and perception survey report were implemented meeting the planned target of 100%.

· 100% of Human Resource (HR) strategy was executed per timeline exceeding an annual target of 80%.

· 100% compliance to HR-related legislation and regulations was met meeting the planned target of 100%.

· 80% reduction in repeat internal and external audit findings was achieved meeting the planned target of 100%.

The Agency also planned to conduct monitoring and evaluation of employee performance. It managed to achieve the following:

· 98% of staff performance contract were submitted on time exceeding a target of 90%.

· 98% of staff performance reviews were conducted bi-annually exceeding a target of 90%.

2.5.2 Marketing and Communications

Under this programme the Agency planned to host resource mobilisation events and networks. It managed to achieve the following:

· 3 events of resource mobilisation were hosted exceeding the planned target of 2.

· 9 CSO Provincial Sector Fora were hosted meeting the planned target of 9.

· 1 National CSO Sector Forum was hosted meeting the planned target of 1.

· 2 NDA profiling events were sponsored meeting the planned target of 2.

It also planned to facilitate CSO dialogues. It managed to host 4 Provincial Dialogues against a target of 9. This was due to the fact that dialogues had already happened through the national CSO sector forum. This was to avoid duplication. One national dialogue was not hosted as planned as dialogues had already happened through the provincial sector fora . This was also to avoid duplication.

The Agency planned to develop NDA branding awareness and stakeholder satisfaction. There were no achievements made on this plan. This was because no brand survey was conducted. The survey was moved to 2013/14 financial year. The customer satisfaction survey was also not conducted. A follow-up survey was undertaken but was disqualified due to the low number of responses received.

The Agency planned to develop a communication tool to support NDA programmes. It managed to achieve the following:

· 12 NDA publications were produced as planned.

· R1 million Rand value of free publicity (print, electronic and online) was secured exceeding a target of R250 000.

· 676 246 NDA website hits was achieved exceeding a target of 25 000 hits

· 10 000 hours were spent on the NDA website exceeding a target of 85 hours.

· 11 audio visual materials were collected from dialogues against a target of 10.

· 114 internal communications initiatives were implemented ( Rara Sessions, Newsflash and Newsletter) exceeding a target of 110.

· 7 Special Development Profiling Events were implemented as planned.

DEVIATIONS

· R398 742 Rand value of media advertorials were secured against a target of R700 000. The final approved budget was R300 000 versus the R700 000 in the Annual Performance Plan.

· Intranet hits were not monitored due to the delays in implementing the ERP system as the tender was withdrawn.

2.5.3 FINANCE

The Agency planned to establish an efficient and effective management of procurement. It managed to achieve 88% compliance to procurement regulations achieved against a target of 100%. It also achieved 95% compliance to all PFMA and Treasury regulations as planned.

It also planned to develop a sound financial management and optimal cash management system. It managed to achieve the following:

· 59:41 Ratio of mandate versus administration costs as percentage of Government Grant was achieved against a target of 55:45 ratio .

· 100% cash efficiently managed as planned.

· 100% surplus cash investments were made within the target set per policy.

It also planned to establish efficient and secure ICT system, hardware and networks. It managed to achieve the following:

· 48 hours as minimum time on disaster recovery was achieved as planned.

· 99.8% of uptime on ICT network was achieved exceeding an annual target of 90%.

DEVIATIONS

· 35% of implementation of ICT improvement project was achieved against a target of 100%. The integrated ERP system was not implemented due to the insufficient responses to the tender resulting in the tender withdrawal.

· IT User Satisfaction Rating on Customer Survey was not conducted due to the cancellation of the ERP systems implementation.

2.5.4 Risk, Audit and Governance

Under this programme the Agency planned to establish effective and efficient corporate governance. It managed to make the following achievements:

· 80% audit findings were closed out exceeding an annual target of 70%.

· 80% compliance to governance principles and prescripts was met as planned.

With regard to its plan to maintain a positive audit outcome the Agency managed to receive an unqualified AG audit report. It also planned to develop effective risk management, financial and internal controls. It managed to achieve 70% reduction in high risks as planned. It also managed to achieve 90% reduction on number of fraud cases at project level as planned.

DEVIATIONS

Eighty percent (80%) implementation of internal audit coverage plan was achieved against a target of 100%. The Auditor General had requested for the Internal Audit perform reviews on the performance information and management accounts. In addition approved Internal Audit coverage plan for five adhoc audits were completed.

With regard to its plan to monitor and evaluate its organizational performance, the Agency only managed to achieve 71% performance against 2012/13 annual Performance Plan deviating of 80%. The Agency reported that during the planning process, it did not anticipate the complexity of the work required in planning key deliverables especially in work relating to research.

Regarding its plan to develop a strategy to overcome areas of underperformance, the Agency Board commissioned the Organisational Structuring Project with the aim of aligning the strategy with structure and competencies to be able to deliver on the strategic plan. The NDA Monitoring and Evaluation (M&E) Framework and Guidelines were developed to promote and support the growing M&E culture in the Agency. The NDA also developed a Strategic Workforce Plan to support the achievement of the NDA strategic goals by ensuring adequate supply of human capital in terms of both numbers and skills. The resource strategy was approved and implemented.

Deviations

· R11 ,7 million was raised in cash against an annual target of R200 million.

· 8 partnership agreements were signed and implemented against a target of 10 due to the delays in the finalisation of agreements with the University of Johannesburg and the National Economic Development and Labour Council (Nedlac)

2.6 Strategic objective 5: to position the NDA as a premier development agency

The NDA managed to achieve the following under this objective:

• A stakeholder management / communications strategy was approved and implemented as planned.

• 14 engagements between CSOs and government on poverty eradication and development were facilitated against a target of 4.

2.7 Strategic objective 6: to promote and maintain organisational excellence and sustainability

The NDA managed to achieve the following under this objective:

· A human resources strategy was approved and implemented.

· A performance management system (PMS) was implemented as follows:

o Executive scorecard was replaced by the directorate scorecards, and

o Critical leadership competencies were introduced and implemented.

· The following key internal controls were managed and successfully implemented:

o Monthly and quarterly management accounts for Exco , Board sub-committees and the Board

o Weekly and monthly bank and general ledger were reconciled

• Finance and procurement policies were reviewed.
• Half-yearly and annual fixed assets counts were performed.
• Effective risk management was implemented.
• Key audit findings from prior year audits were addressed.
• Audit findings were tracked and addressed through quarterly progress report at quarterly review meetings.

Deviations

• A high-level organisational structure was aligned with the strategic plan developed and approved by the Board but was not fully implemented.
• 10% half-yearly performance management reviews were not conducted for staff who joined the NDA in the middle of the performance cycle, including those on maternity and sick leave.
• 35% year-end appraisal reviews were not conducted for EXCO and employees who joined the NDA in the middle of the performance cycle, including those on maternity and sick leave.

· The following HR policies and procedures were developed but not approved by Board:

• Code of conduct
• Long service and excellence awards
• Integrated Employee wellness
• Conflict of interest

· Enterprise-wide risk assessments were conducted and the 2011/12 risk registers were updated but not approved during the year under review.

· A draft audit report were issued on portfolio analysis of Development Management Directorate but not finalised.

· Project write-backs and reviews of projects closeout audits were not finalised due to resource constraints.

· Review of the integration between communication, research and development management were not achieved.

· A review of the NDA funding process was not achieved.

· The Board performance assessments were not achieved.

4. Committee Observations

The Committee expressed concern over the over achievement on most of the targets especially under strategic objective 1. Achievements exceeded the planned targets. This portrayed an impression that the Agency either had under-targeted or planned poorly.

The Committee was pleased with the conversion of the regional NDA offices to becoming advisory offices to provide CSOs with advice and access to resources.

It commended the Agency for the increasing allocation for project costs. This would enable it to reach more projects that are aimed at assisting poor communities.

5. Recommendations

The Committee recommends that the Agency should consider conducting mid- year review of its set targets.

Report to be considered.