REPORT OF THE PORTFOLIO COMMITTEE ON SOCIAL DEVELOPMENT ON THE 2009/10 ANNUAL REPORT OF THE NATIONAL DEVELOPMENT AGENCY (NDA) DATED 19 APRIL 2011

The Portfolio Committee on Social Development having considered and deliberated on the 2009/10 annual reports of the National Development Agency on 09 February 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 report presents some of the key achievements and challenges encountered by the entity in meeting its set strategic objectives. The report will also highlight matters of concern raised by the Committee.

2. Background

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 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.

The Committee, as part of exercising its oversight function received a briefing from the NDA on its 2009/10 Annual Report.

This report provides an overview of the aforementioned briefing, ensuing discussions and highlight the recommendations made by the Committee, which the entity needs to take into consideration.

3. Strategic Goals of the National Development Agency

The National Development Agency operates under the four strategic goals, namely:

Goal 1: Promote sustainable development

In 2009/10, the NDA achieved the following under this Goal:

· It approved 77 funding applications for projects aimed at capacity building, including governance, financial management, conflict resolution and marketing.

· It supported 3 551 beneficiaries with food security.

· It supported 11 food security projects.

· It approved R54.2 million funding towards 45 income-generating projects.

· The income-generating projects created 1 761 employment opportunities.

· It funded 15 agriculture and agribusiness projects to the value of R23.4 million.

Goal 2: Promote organizational sustainability, development practice and excellence

The NDA achieved the following under this Goal:

• It signed two Memorandums of Understanding (MOUs) for implementation of Asgisa and Masisizane. The MOUs are aimed at facilitating and coordinating development programmes that are executed in rural economic development zones.
• The NDA 2010-2013 Strategy document was developed within the specified timeframe for tabling in Parliament.
• Awareness of the NDA increased in communities as community-building initiatives were undertaken through projects launches in five provinces.
• Strategic partnerships were formed with government, business and civil society organizations, elevating the level of engagement.
• An Occupational Health and Safety (OHS) policy was developed, approved and implemented and 15 Occupational Health Safety representatives were appointed.

The NDA had planned to allocate 65% of the total budget to core mandate costs including direct grant funding, research and development and direct projects costs. These are costs associated with direct project implementation. It also planned to allocate 35% of the budget to administration operating costs, i.e. salaries, rental of national and provincial offices, marketing and communication, governance, support for IT infrastructure, etc. These targets were not achieved in the year under review. The NDA is however committed to progressively moving towards achieving the target in the upcoming financial years.

Goal 3: Promote interface between CSOs, research institutions, development practitioners and the state on development issues

The key achievement under this Goal was reported as follows:

· The entity organized a strategy policy dialogue on the developmental state and the fight against poverty in South Africa.

Goal 4: Facilitate research that informs grant-funding decisions, procedures and development policy

The following are the achievements under this Goal:

· A national study on the state of Information and Communication Technology (ICT) in the NGO sector in South Africa was conducted.

· Two best-practice case studies on the NDA funded projects were conducted.

· Desktop research on poverty and developmental issues has been continuously disseminated to provinces.

· Resource centre material was made accessible to the NDA employees.

4. Financial overview

The entity received a transfer of R144 782 million for 2009/10 from the Department of Social Development. It earned an interest of R16 million and this was less than it had expected. The financial report showed that an amount of R94 million was committed as mandate expenses, that is, costs committed for poverty eradication projects. It further reported that an amount of R12, 3 million was withheld from projects that were terminated (or project written back). These are the projects that were not performing due to unresolved conflicts among beneficiaries as well as lack of capacity. Some of these projects had not been performing for over six years.

For the 2009/10 financial year, the entity obtained an unqualified report with an emphasis of matter on irregular expenditure to the amount of R881 819. This was as a result of instances where proper procurement processes were not followed.

5. FINDINGS

This section outlines some of the concerns raised by the Committee.

· Monitoring and evaluation of projects was raised as an issue that needs urgent attention. The entity was advised to put in place mechanisms to improve monitoring and evaluation of the project performance.

· It raised a concern over the fact that the NDA failed to achieve the target of splitting administrative costs and costs for core mandate. It viewed this as a worrying factor and it requested the entity to mobilise more resources in order to achieve these targets.

· It expressed its dissatisfaction over the level of conflicts taking place among project beneficiaries. It was concerned that some projects had not been performing for more than six years, as reported in the presentation. To address this challenge the Committee recommended that drastic conflict resolution interventions should be developed to address it.

· The Committee raised a concern over the lack of support provided to the rural communities and advised the entity to focus more on rural development and assist communities in drafting business proposals. It should also ensure that these communities are able to access NDA services.

6. RECOMMENDATIONS

The Committee made the following recommendations:

· The Committee expressed its dissatisfaction with the NDA’s delay in addressing the issues of inadequate skills and competencies of its employees in order to provide effective support to projects. It recommended that a retention strategy should be developed as a measure to retain staff.

· The Committee also felt that the lack of proper conflict resolution measures to assist project beneficiaries to resolve conflicts is a critical aspect that needs urgent attention.

· It agreed that the entity should strengthen and improve its core business and put more focus on achieving its target of reducing administrative costs. It should also mobilize more resources in order to achieve this objective.

· The Committee recommended that the entity should strengthen its capacity building of the NGOs and CBOs it funded.

Report to be considered

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