ATC120208: Report 2009/10 Annual Report of The National Development Agency (Nda), dated 28 February 2012

Social Development

REPORT OF THE PORTFOLIO COMMITTEE ON SOCIAL DEVELOPMENT ON THE 2009/10 ANNUAL REPORT OF THE NATIONAL DEVELOPMENT AGENCY (NDA), DATED 28 FEBRUARY 2012

 

The Portfolio Committee on Social Development having considered and deliberated on the 2010/11 Annual Reports of the National Development Agency (NDA) on 13 October 2011, 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 2010/11 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 made by the Committee.  

 

2. Strategic Goals of the National Development Agency

 

The National Development Agency (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’s mandate is to contribute towards the eradication of poverty and its causes by granting funds to civil society organizations 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.

 

For 2010/11, the NDA operated under five strategic goals, namely:

 

Goal 1: To build the capacity of the Civil Society Organisations (CSOs) to enable them to carry out development work effectively

 

The following achievements were made to achieve this goal:

 

 

 

 

 

Early Development networks and sites supported:

 

·         Nine Early Childhood Development (ECD) networks were funded and supported for an amount of R9 522 356. These networks provided support to 224 sites. Over and above this, NDA directly funded 5 ECD sites for an amount of R2 283 420.

·         Capacity building interventions provided by the NDA to the ECD sites improved the quality of ECD provision at the sites. Capacity building helped ECD sites to comply with the norms and standards of running an ECD services. The NDA also supported the sites in food security. In turn, these funded ECD sites provided educational programmes and activities that enhanced the physical, cognitive and emotional development of 439 children.

 

Thirty Rural Development CSOs and Cooperatives supported:

 

• The NDA had set target to support 30 CSOs, however due to budget cuts 24 CSOs, inclusive 18 involved in rural development and 6 involved in economic development were supported for an amount of R26 152 995. These supported organisations are working with 5 147 beneficiaries.
• It trained 68 CSOs and Co-operatives to enhance their long-term sustainability.

 

Ten CSOs (Gender based violence, child abuse and neglect, HIV and AIDS, orphans and vulnerable children (OVC), elderly persons, people with disabilities and youth development and empowerment) supported

 

• The NDA supported three CSOs providing aid to the vulnerable groups. This benefited 603 beneficiaries.
• It trained 177 volunteers and interns out of a target of 100 in core competencies in sector/programme specific areas.
• The training included provision of capacity building interventions to CSOs working with groups to improve their institutional capacity.
• Because a 51% cut of the NDA’s budget, the Agency underperformed by 36% under this strategic objective.

 

Five intermediary CSOs supported

 

• The NDA supported two intermediary CSOs for an amount of R1 481 000.
• This benefited 10 CSOs who are affiliated to the intermediary CSOs. The Agency, had however, targeted to strengthen 50 CSOs affiliated to networks and consortia but it could not reach this target due to budget cuts.

 

Goal 2: To grant funds to contribute towards the eradication of poverty

 

The following achievements were made to achieve this goal:

 

Thirty Sustainable CSOs and Co-operatives in rural development funded

 

The NDA supported 24 projects involved in rural development for an amount of R26 024 016.  A significant number of (5 147) direct beneficiaries were supported.

 

Geographic, demographic and socio-economic targets achieved

 

With regard to this strategic objective, NDA funding to the projects in targeted sectors and areas resulted in the creation of 1 613 jobs and secondary employment opportunities.

 

Ten Land Reform projects funded

 

The NDA funded six out of targeted 10 Land Reform projects for an amount of R7 848 006. Forty percent (40%) of the targeted amount was not achieved due to budgetary limitations.

 

Fifteen Food Security Projects in ECD sites supported

 

The NDA achieved its target of supporting 15 Food Security Programmes based in the ECD sites. This benefited 439 direct beneficiaries.

 

 Ten CSOs supporting vulnerable groups supported

 

• The NDA supported three CSOs supporting vulnerable groups for an amount of R3 514 235. The remaining 70% was not funded due to the budgetary limitations. This benefited 603 beneficiaries.
• Eight percent (8%) of the targeted 25% of funding was allocated to CSOs supporting vulnerable groups. The remaining 85% target was not achieved due to budgetary limitations.

 

Goal 3: To facilitate research towards poverty eradication

 

The following achievements were made to achieve this goal:

 

 

 

Organise three dialogues or seminars

 

• Nine provincial policy dialogues with CSOs were carried out in preparation for the Rural Economic Development summit that took place in October 2010.
• A national summit on Rural Economic Development (RED) was successfully hosted in partnership with Kaelo Worldwide Media.
• A seminar titled “The Developmental State and the Fight against Poverty in South Africa” was held. 
• Provincial strategic policy dialogues took place in:
  • Mpumalanga – Food Security;
  • KwaZulu-Natal – Women and Children in Vulnerable groups; and
  • Northern Cape – formulation of development forum for NCNGO Coalition.

 

Implement positive media coverage for the NDA and its funded projects.

 

• Advertorials were taken in five publications in order to enhance repetition of NDA key messages.
• Various publications were produced and distributed in order to update key stakeholders on NDA progress against deliverables.

 

Partnership agreements implemented

 

The NDA entered into partnership agreements with the following stakeholder:

 

• Rural Development and Land Reform
• Kwa Zulu Natal Social Development
• Kaelo Worldwide media

 

Goal 4: To position the NDA as a premier development agency and mobilize resources

 

Under this strategic goal, the NDA had set a target to raise R20 million from identified sources. This was not achieved because of the economic recession, which made it difficult for sponsors to provide financial support. However, it was reported that through partnerships it had entered into, the NDA managed to receive “in-kind” support, meaning support either in the form of technical support or top up funding from these partnerships.   

 

 

 

Goal 5: To promote and maintain organizational excellence and sustainability

 

The following achievements were made to achieve this goal:

 

Implement and maintain systems and processes

 

The following systems and processes were implemented:

 

• Telephone monitoring system
• Wireless data link for increased bandwidth usage
• Integration of VIP payroll system to Great Plains Financial system
• Financial reporting tool
• Amended Financial Management and Procurement policies

 

Develop and implement the cost allocation strategy

 

Various cost saving initiatives were implemented in the financial year, resulting in savings of:

 

• 7% on travelling costs
• 9% of subsistence and travel costs
• 20% reduction on travel costs
• 25% on postage and courier costs

 

 

3. Financial overview

 

The initial budget allocated for project funding was R67 Million. This amount was later reduced during the financial year to R33 million due to the budget cut implemented by the National Treasury in the 2010/2011 financial year. The shortfall was then covered by a nominal amount which came from the discontinued projects.

 

The funding received from the National Treasury for the 2011/12 financial year of R83.5 million represented a reduction of 42% compared to the previous year funding of R144.8 million. To supplement this shortfall, the NDA management took a decision to fund the shortfall from accumulated reserves from the unused portion of the seed capital received from the Independent Development Trust (IDT) at the inception of the NDA and a nominal amount from discontinued projects.

 

Despite the aforementioned, it was indicated that the NDA management was still pursuing a Financial Management Model whereby a large percentage of its available financial resources was going to be channeled towards service delivery. Attainment of the envisaged split between mandate and administration expenditure was a challenge in 2011/12 due to the reduction in funding from National Treasury. The Committee was assured that by 2013/14, this objective would have been resolved.

 

4.  Committee Observations

 

The Committee noted that there is a need for the NDA to refocus its strategic objectives and align them to the mandate of the Department of Social Development and Government priorities. This is so, because of the need to shift the NDA’s perception as sorely a poverty alleviation entity. The mandate of the NDA should be expanded to include Early Childhood Development programme, as it had already focused on it in the 2010/11 financial year.

 

It further noted that the budget of the NDA was reduced to R33 million. It thus advised that the Agency should have revised its strategic plan to reflect the changes in the budget and set new targets to avoid discrepancies in reporting on the initial strategic plan and the achievements.

 

It also noted that the NDA took a decision to ring fence the funding for capacity building of projects as capacity building is important to ensure that projects are sustainable and are also able to source funding.   

 

 

5. Recommendation

 

The Committee recommends the following:

 

 

The NDA should consider awarding funding to projects based on the poverty levels instead of population size, as it had been doing. This will enable projects in provinces where there are high poverty levels to receive funding. 

 

 

 

 

Report to be considered