PRESENTATION OF THE NATIONAL DEVELOPMENT AGENCY ANNUAL REPORT 2011/12

PRESENTATION OF THE NATIONAL DEVELOPMENT AGENCY ANNUAL

REPORT 2011/12

PORTFOLIO COMMITTEE ON SOCIAL DEVELOPMENT

06 NOVEMBER 2012

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CONTENT

INTRODUCTION

Role and Mandate

Mission, Vision and Values

Organisational Structure

STRATEGIC GOALS AND STRATEGIC OBJECTIVES

MEASURING OUR DELIVERY AGAINST STRATEGIC OBJECTIVES

FINANCIAL PERFORMANCE FOR THE YEAR ENDED 31 MARCH 2012

AUDIT TURNAROUND STRATEGY

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INTRODUCTION

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ROLE AND MANDATE

In terms of the National Development Agency (NDA) Act (Act No 108 of 1998

as amended), NDA was mandated to contribute towards the eradication of

poverty and its causes by granting funds to civil society organisations (CSOs)

to:

Implement development projects in poor communities, and

Strengthen the institutional capacity of other CSOs that provide services to

poor communities.

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MISION, VISION AND VALUES

Vision

A society free from poverty.

Mission

Facilitate sustainable development by strengthening civil society organisations

involved in poverty eradication through enhanced grant funding and

research.

Values

Integrity

Accountability and Responsibility

Transparency

Excellence

Partnering5

ORGANISATIONAL STRUCTURE

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STRATEGIC GOAL AND OBJECTIVES 2011/12

STRATEGIC GOAL To leverage strategic partnerships to eradicate poverty to enable poor

communities to achieve sustainable livelihoods.

STRATEGIC OBJECTIVES To build and enhance the capacity of CSOs to enable them to carry out

development work effectively To grant funds, facilitate and manage poverty eradication programmes To influence policies, practices and strategies through comprehensive

research and knowledge management To mobilise and leverage resources To position the NDA as a premier development agency To promote and maintain organisational excellence and sustainability

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MEASURING DELIVERY AGAINST STRATEGIC OBJECTIVES

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STRATEGIC OBJECTIVE 1

TO BUILD AND ENHANCE THE

CAPACITY OF CSOs TO ENABLE THEM TO CARRY OUT DEVELOPMENT WORK EFFECTIVELY

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CAPACITY NEEDS OF CSOs, TARGETED INTERVENTIONS AND TECHNICAL CAPACITY OF TARGETED CSOs

ACHIEVEMENTS

Capacity needs of 146 funded projects were assessed

Capacity programmes designed and implemented as per the recommendations

of capacity assessment reports in line with the target

237 ECD sites supported through eight ECD networks approved for funding

against an annual target of 100.

400 volunteers capacitated to support the identified ECD projects against an

annual target of 200.

199 CSOs capacity enhanced against an annual target of 40

DEVIATIONS 150 members of CSOs supporting vulnerable groups not trained as planned due

to late approval of projects.

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TO GRANT FUNDS, FACILITATE AND MANAGE POVERTY ERADICATION PROGRAMMES

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CSOs INVOLVED IN NDA TARGETED SECTORS FUNDED AND NUMBER OF JOBS CREATED

ACHIEVEMENTS

28 food security projects in ECD sites funded to an amount of R9 785 816

against a target of 20.

65 volunteer opportunities created in the rural development sector against a

target of 60.

47 volunteer opportunities created in CSOs supporting vulnerable groups

against a target of 10.

2 079 employment opportunities created against a target of 800.

2 research think-tank CSOs supported - Cooperative for Research and Education

(CORE) – Centre for Early Childhood Development meeting the annual target.

25 partnership linkages created with government departments, private sector

CSOs and local government against a target of 10.12

CSOs INVOLVED IN NDA TARGETED SECTORS FUNDED AND NUMBER OF JOBS CREATED Contd…

DEVIATIONS

4 CSOs supporting vulnerable groups funded against a target of 5 –

Management approved larger grants for CSOs supporting vulnerable

groups resulting in one CSO not being funded.

3 CSO networks supported against a target of 5 – Networks planned

for support did not complete current funding activities.

37 CSOs in rural development funded to an amount of R50 965 630

against a target of 40 due to a larger grant allocated to rural

development projects.

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TO INFLUENCE POLICIES, PRACTICES AND STRATEGIES THROUGH

COMPREHENSIVE RESEARCH AND KNOWLEDGE MANAGEMENT

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DEVELOPMENT ORIENTED RESEARCH AND POLICY ANALYSIS, DATABASE OF CSOs UPGRADED AND CSOs ADVOCACY AND LOBBYING

ACHIEVEMENTS Research agenda developed and approved by EXCO and presented to

Parliament as planned. 1 planned policy paper presented on the role of NGOs and CSOs in policy

formulation. 2 planned study reports commissioned and submitted on ECD and CSO

fundraising challenges. 2 partnerships and linkages built with Journal Storage (JStor) and Development

Bank of South Africa (DBSA) / South African Local Government Association (SALGA)

Supported CSOs in the Northern Cape through sponsorship of their annual general meetings.

DEVIATIONS

The agenda on lobbying and advocacy was not developed.

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MONITORING AND EVALUATION OF NDA FUNDED PROJECTS UNDERTAKEN

ACHIEVEMENTS

36 monitoring and evaluation performance reports produced and analysed

11 projects visited

3 case studies produced

16 mid-term evaluations performed

20 close-out evaluations conducted

Monitoring and evaluation framework reviewed and implemented

DEVIATIONS

None

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CSO PARTICIPATION IN NATIONAL AND INTERNATIONAL FORA FACILITATED

ACHIEVEMENTS Supported CSOs in the Northern Cape through sponsorship of their annual

general meetings. Supported the Natal Women’s Resource Centre. Supported provincial MDGs structure formations that resulted in four

Provincial task teams in place in KwaZulu-Natal, Eastern Cape, Limpopo

and Free State.

DEVIATIONS

None

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LESSONS LEARNT AND BEST PRACTICES ON POVERTY ERADICATION INTERVENTIONS PUBLISHED

ACHIEVEMENTS

Best practice report on ECD capacity building developed for Masikhule ECD centre

Best practice report produced for Super Grand Agric Feed Mill Cooperative

DEVIATIONS

None

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TO MOBILSE AND LEVERAGE RESOURCES

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RESOURCE MOBILISATION STRATEGY APPROVED AND IMPLEMENTED

ACHIEVEMENTS Resource mobilisation strategy approved and implemented.

DEVIATIONS

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

R7,5 million – ECD, Free State

R1,5 million – Biomass project

R2,7 million – DSD Mpumalanga In-kind

R306 330 (free broadcast)

± R8 million (journals)

8 partnership agreements were signed and implemented against a target of 10

due to delays in finalisation of agreements with University of Johannesburg and

the National Economic Development and Labour Council (Nedlac) 20


TO POSITION THE NDA AS A PREMIER DEVELOPMENT AGENCY

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ENHANCE STRATEGIC ENGAGEMENTS WITH KEY STAKEHOLDERS

ACHIEVEMENTS

Stakeholder management / communications strategy approved and implemented as planned.

DEVIATIONS

None.

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IMPROVED INTERFACE BETWEEN CIVIL SOCIETY AND GOVERNMENT

ACHIEVEMENTS

Facilitated 14 engagements between CSOs and government on poverty

eradication and development against a target of 4.

DEVIATIONS

None.

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TO PROMOTE AND MAINTAIN ORGANISATIONAL EXCELLENCE AND

SUSTAINABILITY

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ORGANISATIONAL CAPACITY STRENGTHENED, MONITORING AND EVALUATION OF ORGANISATIONAL PERFORMANCE

ACHIEVEMENTS

Human resources strategy approved and implemented

A performance management system (PMS) implemented as follows:

Executive scorecard replaced by directorate scorecards

Critical leadership competencies introduced and implemented

DEVIATIONS

A high-level organisational structure aligned with strategic plan developed and

approved by the Board but not fully implemented.

10% Half-yearly performance management reviews 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 not conducted for EXCO and employees who

joined the NDA in the middle of the performance cycle, including those on

maternity and sick leave.25

ORGANISATIONAL SYSTEMS AND PROCESSES REVIEWED AND IMPROVED

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

Monthly and quarterly management accounts for Exco, Board sub-

committees and Board Weekly and monthly bank and general ledger reconciliations

Finance and procurement policies reviewed. Half-yearly and annual fixed assets counts performed. Automated supplier database. Implemented Effective risk management Key audit findings from prior year audits addressed Audit findings tracked and addressed through quarterly progress report at QRM

meetings

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ORGANISATIONAL SYSTEMS AND PROCESSES Contd…

ACHIEVEMENTS Coordinate and manage NDAwide budgets in line with PFMA. The following

budgets coordinated and submitted to the Executive Authority and Treasury: Estimates of national expenditure (ENE) budget (submitted in Jan 2012) Five-year budget for 2013 –2017 (submitted to Exco and Board) Medium-term expenditure framework (MTEF) budget (submitted in August

2011) Coordinate and manage interim and statutory year-end audits

2011/12 annual financial statements submitted to Treasury and the Auditor-

General timeously in line with PFMA deadlines 2012 audit preparations well underway and various memos sent to

departments to manage 2012 year-end

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ACHIEVEMENTS Ongoing implementation of IT governance framework. Needs and gap analysis finalised to assist in systems selection in terms of the

information and communications technology (ICT) systems revamp project. Reviewed ICT infrastructure in terms of systems revamp project. Fraud prevention plan and whistle blowing policies reviewed, approved and

implemented. Disaster recovery plan approved. Board meetings held according to statutory requirements. Delegations of authority reviewed and approved. Memoranda of agreement (MoAs), memoranda of understanding (MoUs) and

service-level agreements (SLAs) drafted, reviewed, vetted and signed off.

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DEVIATIONS 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 assessment conducted, 2011/12 risk register updated but not approved during the year under review.

Draft audit report issued on portfolio analysis of Development Management Directorate but not finalised.

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

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

Review of NDA funding process not achieved. Board performance assessments not achieved.

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Financial Performance for the year ended 31 March 2012

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EXECUTIVE SUMMARY TO THE FINANCIAL PERFORMANCE FOR THE YEAR ENDED 31 MARCH 2012

HIGHLIGHTS

The transfer from the DSD was restored to previous levels after a significant reduction in 2011 (R 83,4m : 2011 , R 144,7m : 2010) to R 163,4m in 2012 financial year.

The entity raised a total of R 11.7m in the current year as part of the resource mobilisation strategy to expand the revenue streams for the NDA.

Funds worth R 77.5m were committed to projects in 2011/12 financial year compared to R 49.5 million in 2010/2011 representing a 57% increase in direct project funding year on year.

Total cash of R 83,1m was disbursed to funded projects including those approved in previous years, resulting in reduction in projects liability of 13% from R 95.5 m in 2011 to R 83.1 m in 2012.

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EXECUTIVE SUMMARY TO THE FINANCIAL PERFORMANCE FOR THE YEAR ENDED 31 MARCH 2012 (Cont…)

LOWLIGHTS

The desired Mandate vs Admin expenses ratio of 60: 40 was not achieved, a ratio of 50: 50 was achieved in the current year. This split was occasioned by the escalating fixed costs that will be remedied in subsequent financial years through increased resource mobilisation.

Interest income was down 45% compared to previous year. The reduction implies that a significant source of funding to the organisation was no longer available. The decrease in interest income can be partly attributed to the delay in transfers of tranches by DSD and decrease in prime rate.

The entity’s funding remains a concern due to historical below inflationary increase in the funding from Treasury. This impacts negatively on our ability to perform at the expected level of our legislative mandate.

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SUMMARISED STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 31 MARCH 2012

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STATEMENT OF POSITION AS AT 31 MARCH 2012

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AUDIT TURNAROUND STRATEGY

PROCESS FOR IMPLEMENTING AND VERIFYING AUDIT TURNAROUND STRATEGY

An audit turnaround strategy has been developed and approved by the Audit Committee and the Board to address all identified weaknesses from the regulatory audit.

The corrective action is currently been implemented by management, assessed by internal audit and monitored by the audit committee on quarterly basis.

The progress implementation report on the turnaround strategy will be submitted to the AGSA and the Ministry as part of the quarterly audit dashboard.

corrective actions will be taken by management on non implementation of the turnaround strategy.

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2011/2012 SIGNIFICANT AUDIT FINDINGS AND PROGRESS

FINDINGS PROGRESS

1. Procurement of goods not followed in procuring consulting and professional services

60% - procurement policy amendment awaiting Board approval.

Policy awareness for all NDA staff conducted.

Benchmarked the proposed amended policy to DSD and Treasury.

2. Supply chain process not followed for purchases incurred

Approval of a automated procurement system.

Corrective action is currently being taken against non compliance.

Reviewed an automated supplier database.

3. No tender processes for purchases

Policy reviewed to align with the tender threshold from R200k to R500k in line with Treasury Regulations.

Tightens controls around approval of deviations.

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2011/2012 SIGNIFICANT AUDIT FINDINGS AND PROGRESS (Cont…)

FINDINGS PROGRESS

4. Supporting information for targets cannot be verified

Supporting information was verified through provision of portfolio of evidence.

Monitoring and evaluation framework with a verification process is currently being developed and will be finalized by 30 November 2012.

5. Predetermined objectives actuals reported on are based on project proposals

Register of project’s beneficiaries is submitted to record information on the numbers and will be verified through the monitoring process.

6. Supporting information for targets cannot be verified


Monitoring and evaluation framework with a verification process is currently being developed and will be finalized by 30 November 2012.

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2011/2012 SIGNIFICANT AUDIT FINDINGS AND PROGRESS (Cont…)

FINDINGS PROGRESS

7. Targets not verified Supporting information was verified through provision of portfolio of evidence.

Monitoring and evaluation framework with a verification process is currently being developed and will be finalised by 30 November 2012.

8. More than 20% of targets not achieved

Achievement of targets is monitored and verified monthly and quarterly.

Corrective action is put in place to address negative deviations on target achievements within defined timeframes.

9. Actual targets disclosed as achieved in the annual report do not match the supporting documents provided


Monitoring and evaluation framework with a verification process is currently being developed and will be finalized by 30 November 2012. 391

SUMMARY OF AUDIT FINDINGS PER UNIT PER 2011/2012 YEAR END AUDIT

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FUNCTIONAL AREA SIGNIFICANT MATTERS OR

MATTERS AFFECTING THE AUDIT REPORT

OTHER IMPORTANT

MATTERS

ADMINISTRATIVE MATTERS

TOTAL FINDINGS

Procurement 3 1 1 5

Accounting - 3 9 12

Strategy; AR & APP 6 3 - 9

Governance - 6 - 6

Human Resources - 4 - 4

Development Management (Projects)

- 4 3 7

Research & Development

- - 2 2

Legal & Risk - 1 - 1

Information Technology

- 2 - 2

TOTAL 9 24 15 48

PROGRESS ACHIEVED IN ADDRESSING SIGNIFICANT FINDINGS TO DATE

FUNCTIONAL AREA SIGNIFICANT MATTERS/ MATTERS AFFECTING

AUDIT REPORT

PROGRESS TO DATE ON SIGNIFICANT FINDINGS

Procurement 3 2 Findings 100% complete 1 Finding 60% progress

achieved to date

Strategy; AR & APP

6 60% Progress achieved to date

TOTAL 9

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SUMMARY OF FINDINGS THAT REQUIRE SYSTEMS IMPLEMENTATION

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Thank you

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PRESENTATION OF THE NATIONAL DEVELOPMENT AGENCY ANNUAL REPORT 2011/12

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