NYDA Presentation: Addressing Concerns from Portfolio Committee

1. NYDA PresentationBy: Steven Ngubeni: CEODate:18 May 2010

2. PRESENTATION OUTLINE Part 1 • Presentation Purpose • NYDA address concerns as raised by the Portfolio Committee • Transfer Key Issues • Part 2 • Background – when was the three year plan crafted • NYDA at a glance • Vision and Purpose • NYDA Objectives • NYDA Development Philosophy • NYDA Key Performance Areas • Performance Targets:2010-2013 • NYDA Status report

3. PURPOSE • The NYDA was requested to appear before the committee to respond to matters as contained in the letter of invitation by the committee . The letter outlined the following: • The NYDA must Respond to the attached concerns and recommendations made. • The three year strategic plans and budget for financial year 2010/13. • National Youth Commission’s annual report for financial year 2008/09.

4. COMMITTEE CONCERNS AND RECOMMENDATIONS • The Agency should forward to the Committee the transitional report and the three year strategic plans before the 12 May 2010. • The Agency should brief the Committee with the appropriate representation by the office of the President on the National Youth Commission’s 2008/09 Annual Report and the Auditor General’s 2009 forensic report. • It is imperative that the Agency stipulates how exactly staff within the Agency who previously were in the employ of the National Youth Commission will be dealt with if found guilty of any violations in relation to the PFMA as per the Auditor General’s report and provide the Committee with all relevant information timeously.

5. COMMITTEE CONCERNS AND RECOMMENDATIONS • The Agency should negotiate with the Presidency for more funds as the current budget is insufficient. • The Agency should prepare scorecards on how they should be measured on their performance and present this to the Committee. • The Agency should engage with the Department of Higher Education to train youth on skills such as artisans etc. • The Agency should provide information on list of projects and indicate where these projects are located insofar as the activities of the former Umsobomvu Youth Fund is concerned and the current NYDA.

6. KEY TRANSFER ISSUES Umsobomvu Youth Fund and National Youth Commission The National Youth Development Agency was established through a merger between Umsobomvu Youth Fund and National Youth Commission. The NYDA Act makes provision for this merger, particularly Section 21(2) which refers “As soon as possible after the Act takes effect the President must in consultation with the Minister of Finance: transfer the assets, rights, obligations and liabilities of UYF and NYC to the Agency; and subject to 197 of the Labour Relations Act, transfer staff of UYF and NYC to the Agency. THE EFFECTIVE DATE OF THE TRANSFER IS THE 1ST OCTOBER 2009

7. TRANSFER KEY PROCESSES • The implementation of the merger, as envisaged by the provisions of Section 21(2) of the NYDA Act involved the following key process; • Conclusion of the transfer agreement between the NYDA and UYF, NYDA and NYC; ( see slide 6) • Performance of the take on balance as at 30th September 2009 on both the UYF and NYC. person of this audits was to give assurance to the Board of NYDA on the assets, rights, obligations and liabilities that are taken over by the NYDA; ( see slide 6-9) • HR matters related to transfer ( see slide 10)

8. PROGRESS IN TERMS OF THE KEY MERGER PROCESS CONCLUSION OF THE TRANSFER AGREEMENT Umsobomvu Youth Fund • The transfer was tabled and approved by the Board of UYF and NYDA; • Accompanying the transfer agreements was the special resolution in terms of section 228 and 349 of the Companies Act; • Special resolution relating transfer, as envisaged in the NYDA Act, has been approved by the Registrar of Companies • Special resolution for the dissolution of the UYF has been lodged with the Registrar of Companies National youth Commission • The transfer agreement has been approved by both the NYDA and Presidency, subject to the finalization as of the statutory audit on NYC as of the 30th September 2009;

9. TAKE-ON BALANCE AUDIT AS AT 30TH SEPTEMBER 2009 • The take on balance audit was concluded for UYF and the auditors have issued an unqualified audit opinion (refer Annexure 1). • In respect of NYC the Auditor General of South Africa is currently conducting statutory audit as oppose to taken balance audit which should finalised by the end of May 2010. We have however included the draft Statement of Financial Position as at 30th September 2009 and the related notes which are still subject to the statutory audit (refer Annexure 2)

10. CONTINUED… • HIGH LEVEL COMMENT ON THE BALANCE SHEET AS AT 30TH SEPTEMBER 2009 – UMSOBOMVU YOUTH FUND • TOTAL ASSSETS – The total assets worth R245m, consisting mainly of loans and investments representing 69% of the total assets, have been transferred to the NYDA. The remaining 31% is represented by cash on hand, fixed assets and other receivables. • NON CURRENT LIABILITIES – Undrawn project commitments amounting to R275m was transferred to the NYDA. R113m of these undrawn commitments were funded from deferred grant income and R45m funded from accumulated reserves. The remainder represents loans and investments commitments which are funded off balance sheet. CURRENT LIABILITIES – Total current liabilities transferred to NYDA amounted to R71m mainly consisting of the normal trade creditors, provision for employee leave and incentive.

11. CONTINUED… • HIGH LEVEL COMMENT ON THE STATEMENT OF FINACIAL POSITION AS AT 30TH SEPTEMBER 2009 – NATIONAL YOUTH COMMISSION • TOTAL ASSSETS – The total assets worth R5.3m, consisting mainly of cash on hand representing 77% of the total assets, have been transferred to the NYDA. The remaining 23% is represented by inventory, fixed assets and other receivables. • TOTAL LIABILITIES – Total liabilities transferred to the NYDA amounted to R4.6m consisting mainly of which normal trade creditors representing 68% of the total liabilities. The remaining liabilities relates to provisions for employee leave and audit fees.

12. CONTINUED… • UMSOBOMVU YOUTH FUND AND NATIONAL YOUTH COMMISSION • Staff from both former entities have been transferred to the NYDA effective the 1st October 2009 with the same terms and conditions; • A total of 406 staff members were transferred from the former entities NYC 36 and UYF 370 with the same terms and conditions • NYDA has invited former staff of the NYC who held fiduciary responsibilities to appear before the committee • Those who are in the employ of the NYDA will also appear, they have been requested to write full disclosure’s on the activities on the NYC ( in response to matters raised by the AG)

13. UMSOBOMVU YOUTH FUND 2008/9 ANNUAL REPORT • PERFORMANCE INFORMATION • Key highlight of the UYF during the year under review was the 21, 884(2007: 19,682) loans issued to SMMEs resulting in R87m worth of loans being disbursed. • Number of business provided with business support services increased to 12,095 (2007: 10,534). • Overall number of jobs created and /or sustained totaled 38,304 (2007: 41,002)

14. CONTINUED… • FINANCIAL STATEMENTS • TOTAL ASSSETS – Total assets decreased by R376m when compared to 2007/8 financial year. Key contributor is the decrease in cash and cash equivalents of R367m due to UYF only receiving R5m during the under review. • TOTAL LIABILITIES – Total liabilities have decreased by R180m which is accounted for mainly by increase in project disbursements. RESERVES – Reserves decreased by R177m due to projects being funded out of reserves as deferred grant is fully committed.

15. NATIONAL YOUTH COMMISSION 2008/9 ANNUAL REPORT • PERFORMANCE INFORMATION • Based on the audit report there AGSA could not express an opinion on the performance information as reported in the annual report. Some of the factors that influence the basis of his disclaimer are; • lack of source documents to support performance information reported; • Lack of effect, efficient and transparent systems and internal controls regarding performance management; and • Legislative non compliance relating to performance reporting

16. CONTINUED… • FINANCIAL STATEMENTS • The Auditor General also expressed a disclaimer of the financial statements of the NYC due limitation of scope as a result of mainly lack of supporting documentation to substantiate some of the transaction recorded NYC’s accounting systems. The fact that supporting documentation could be provided these transactions could be perceived as fraudulent justifying a forensic audit. Again records did not permit the use of alternative audit procedures. Key factors that resulted in disclaimer by Auditor General are as follows; • Expenses totaling R4,5m could not be audited due to that lack of supporting documentation; • Donor funding revenue amounting to R2.8m could not be audited again due to lack of supporting documentation; • Journals processed without supporting documentation; and • Non compliance with accounting standards and legislation requirements;

17. CONTINUED… • Based of the above and other matters contained in the annual report as raised by the Auditor General is evident that the root cause could be the lack of continuous senior leadership, as well as generally weak internal control environment and ineffective oversight and governance. • The senior officials that presided during this period under review were invited to the committee meeting however at the time of writing there was not indication as to whether they will attend the meeting. • The NYDA as part of the merger process adopted mainly the processes procedures and systems of the former UYF is it believed such were sound to built from as they establish the NYDA.

18. CONTINUED… • The Agency should negotiate with the Presidency for more funds as the current budget is insufficient. • Discussions between the Agency and the NYDA have resumed, this was also reflected in the Minister Chabane’s budget vote. • Furthermore, the NYDA is engaging Provincial Governments to support NYDA activities. This matter will also be tabled at the next Presidential Co-odinating Council Seating

19. CONTINUED… • The Agency should prepare scorecards on how they should be measured on their performance and present this to the Committee. • - NYDA Key deliverables represent those areas that the NYDA performance should be measured against. • - NYDA key deliverables are clustered around the KPA’s of the organisation

20. CONTINUED… • The Agency should provide information on list of projects and indicate where these projects are located insofar as the activities of the former Umsobomvu Youth Fund is concerned and the current NYDA. - List of all NYDA projects attached ( Annexure 3).

21. Questions and Discussion

22. Part 2 • National Youth Development Agency • 3yr Strategic Plan • 2010-2013

23. NYDA AT A GLANCE • Background • Launched on Youth Day June 16 2009 • Established through merger of Umsobomvu Youth Fund and National Youth Commission , took effect on the 1st of October Policy and Legislative Framework • Integrated Youth Development Strategy 2006, Paragraph 5.2 • Aligned to the United Nations World Programme of Action on Youth (WPAY) • African Youth Charter • National Youth Policy 2009 • NYDA Act 54 of 2008 • PFMA 1999 • Constitution of South Africa 1996

24. Vision • Integrated and mainstreamed youth development in all organs of state, private sector and civil society for sustainable livelihoods • Purpose • To mainstream and integrate youth development for sustainable livelihoods • Nature of Business • To initiate, facilitate, implement, coordinate and monitor youth development interventions aimed at reducing youth unemployment and promoting social cohesion

25. NYDA OBJECTIVES • Develop an Integrated Youth Development Plan and Strategy for South Africa; • Develop guidelines for the implementation of an integrated national youth development policy and make recommendations to the President; • Initiate, design, co-ordinate, evaluate and monitor all programmes aimed at integrating the youth into the economy and society in general; • Guide efforts and facilitate economic participation and empowerment, and achievement of education and training; • Partner and assist organs of state, the private sector and non-governmental organisations and community based organisations on initiatives directed at attainment of employment and skills development;

26. NYDA OBJECTIVES CONTINUED.. • Initiate programmes directed at poverty alleviation, urban and rural development and the combating of crime, substance abuse and social decay amongst youth; • Establish annual national priority programmes in respect of youth development; • Promote a uniform approach by all organs of state, the private sector and non-governmental organisations. To matters relating to or involving youth development; and • Endeavour to promote the interest generally of the youth, particularly young people with disabilities.

27. DEVELOPMENT PHILOSOPHY OUR WORK AIMS TO: • redress the previous imbalances, • create equal opportunities, and • promote accessibility, transparency and accountability of youth development programmes. Our Development Philosophy will be defined by the following Characteristics: • We serve young people aged between 14 and 35 years • Majority of beneficiaries will be from low income households. • Unstructured programmes initiated by young people themselves will be introduced , these will be supported on merit and ad hoc basis • Develop partnerships with stakeholders in government, civil society and private sector- Our mainstreaming mandate requires delivery through partners • Adoption and application of standards of effective practice when making investments in youth development projects

28. NYDA KPA’s

29. STRATEGIC FOCUS 2010-2013 • Completion of NYDA operating structure national, provincial and Establishment of NYDA Provincial Structures in line with NYDA mandate to facilitate the mainstreaming of Youth Development across all spheres of government; • Establishment of 9 NYDA Provincial Advisory Boards (PAB’s) and Monitoring of NYDA Provincial Structures; • Defining the implementation of the regulatory role of the NYDA with respect to Section 19 of the NYDA act no 54, 2008; • Increase direct service delivery of NYDA of non transactional products and services to the youth i.e. Career Guidance, Mentorship, Business Opportunities Support Services ( BOSS); • Finalisation of Integrated Youth Development Strategy ( IYDS) and implementation thereof; • Project Implementation to focus on rural areas;

30. CONTINUED • Scoping and Implementation for organisational key projects • Establishment of the Social Entrepreneurship Fund • Fly the flag campaign • The NYDA will lobby for the professionalization of youth work • Programme implementation to focus on young person’s with disability • Programme implementation to focus on young women • The NYDA website is completed and launched to the public • All NYDA related information is provided in 11 official languages • Merger between the former NYC and UYF is completed and finalise HR matters • Hosting of the WOEFDE conference

31. CONTINUED… • All government department must have a Youth Directorate located in the office of the DG • All provincial departments must have a dedicated official dealing with youth issues • All Municipality to establish a local youth unit located either in the office of the Mayor or Municipal Manager • Establishment of 283 NYDA local offices over the MTEF period

32. KEY DELIVERABLES

33. CONTINUED

34. CONTINUED

35. CONTINUED

36. CAPITAL PROJECTS 2010-2011NB: Upon completion of the IYDS, more key projects will be identified and implemented over the MTEF period.

37. NYDA PROGRAMMES

38. NYDA INTERIM STRUCTURE • The organizational structure has been arranged in discrete units comprising key programme areas and support areas. The structure, which is depicted in the diagram below, shows the breakdown of the programme areas, support functions and reporting lines.

39. NYDA BUSINESS MODEL

40. NYDA – INTERIM OPERATING MODEL • Planning and Performance • The organization carefully plans its programmes and outcomes based on an assessment of national priorities in relation to its performance areas. This ensures that the programmes, products and services offered are always relevant. Performance is monitored on an ongoing basis against set targets and outcomes. • Project Cycle Management. • Implementation is driven on a project basis so that efficient delivery, resourcing and impact are measurable. The process also ensures that there is accountability with respect to the priorities set by the organization and the approval process that have been established.

41. CONTINUED • Customer Engagement • This process assists with managing the relationship with young people or customers over the lifespan of their interaction with the organization. The objective is to have a holistic view of the young person throughout the organization. Information is collected on the profile, needs and service history of the young person. This information is then shared with the young person and throughout the business to ensure that we communicate effectively and always base our interventions on good information.

42. Performance thus far Established a Board of Directors Board Sub-committee’s established Appointed Executive Staff Staff vacancies being filled ( currently underway) High level Structure Approved Call for nomination of PAB’s issued 41

43. Performance thus far A brief summary of the NYDA performance against set targets since its inception. This summary focuses on key outputs against the NYDA key performance area up to 31st March 2010. Economic Participation: A total of 33,008 jobs were created for young people by programmes of the NYDA against the year target of 36,300 jobs. 4,220 business support vouchers were issued to young entrepreneurs against the year target of 5,500. The Enterprise Finance programme issued 10,021 loans were issued to youth enterprises against the year target of 12,450 loans. Education and Skills development: A total of 39,813 beneficiaries were enrolled in skills development and community service against a target of 68,610 for the current year financial year. The National Youth Service programme has enrolled 16,093 young people in a number of projects against a year target of 20,000. Information Provision and Communication A total of 530,390 young people were provided with information on products and services through the NYDA branches and the NYDA call centre against a target of 600,000. 42

44. Performance thus far Policy, Lobby and Advocacy: The NYDAhas achieved the following to advocate and lobby for mainstreaming and integration of youth services. The Inter Departmental Committee adopted the guidelines on the establishment of Youth Directorates in government departments Signed an MOU with CIPRO and the Buy Youth Campaign to support young entrepreneurs Made a presentation to the National Council of Provinces (NCOP) programme on needs for young people. Research, Monitoring and Evaluation: A total of 18 programme and projects evaluations were conducted and completed, in addition 5 research studies on youth development were conducted and completed. Effective and Efficient Resource Management: A total of 198 (52%) of the 379 staff members have undergone training. The level of customer satisfaction measured from the branch clients survey conducted by the Operations Support Division is 60.9% whilst the level of complaints have decreased by 38%. Portfolio at Risk for SME Lending was 36% whilst for Microfinance Programme was 34%. 43

45. THANK YOU!!!!