National Development Agency 2010/11 Annual Report to the Portfolio Committee on Social Development By NDA CEO: Ms Vuyelwa Nhlapo 13 October 2011 1.

National Development Agency2010/11 Annual Report to the Portfolio

Committee on Social Development By

NDA CEO: Ms Vuyelwa Nhlapo

13 October 2011

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TABLE OF CONTENTS

1. Introduction2. 2010/2011 Key Achievements3. Financial Report4. Challenges5. Conclusion

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INTRODUCTION

• This report marks an important event in the history of the NDA, in that it coincides with the 10th anniversary of the organisation. We pride ourselves in achieving an unqualified Audit report for the fifth consecutive year.

• Reflecting on the year under review, our interventions made it possible albeit the fiscal constraints, to have an increasing number of poor people becoming self-reliant and contributing towards building sustainable rural communities.

• Our focus areas for the year under review were: (1)funding rural development to achieve sustainable livelihoods, (2) supporting organisations dealing with vulnerable groups to foster social cohesion and create safe and prosperous communities, (3) supporting organisations working in Early Childhood Development , and (4) providing capacity building support to CSOs to enable them to effectively contribute to poverty eradication initiatives.

• The NDA Board approved grant funding to 43 CBOs, NGOs and Co-operatives amounting to R42 Million.

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INTRODUCTION CONT……

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

• We believe that the NDA will continue to be extremely relevant given the Government’s focus on improving rural livelihoods, provision of quality education and implementing quality service delivery to the poor. A concrete partnership between NDA, Government and CSOs will continue to ensure quality service delivery to poor citizens.

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KEY ACHIEVEMENTS FOR STRATEGIC GOAL 1: TO BUILD THE CAPACITY OF CSOS TO ENABLE THEM TO CARRY OUT DEVELOPMENT WORK EFFECTIVELY

PLANNED ACHIEVEMENTS

ECD Networks and Sites supported

• 9 ECD networks funded and supported for an amount of R 9 522 356. The networks provide support to 224 sites.

• 5 ECD sites were directly funded by the NDA for an amount of R2 283 420.

• Each ECD site supported has employed an average of 6 staff members and volunteers, totalling 390 beneficiaries.

• Provision of funding and capacity building interventions has improved the quality of ECD provision at the sites supported.

• The funded ECD sites have provided educational programmes and activities that have enhanced the physical, cognitive and emotional development of 439 children.

30 Rural Development CSOs and Co-operatives supported

• Although the target was 30 CSOs, 24 CSOs inclusive of 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 5147 beneficiaries.

• 68 CSOs and Co-operatives received training to enhance long-term sustainability.

• 51% of resources earmarked for capacity building were committed to rural development . The NDA targeted 40% allocation of resources.

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KEY ACHIEVEMENTS FOR STRATEGIC GOAL 1: TO BUILD THE CAPACITY OF CSOS TO ENABLE THEM TO CARRY OUT DEVELOPMENT WORK EFFECTIVELY

PLANNED ACHIEVEMENTS

10 CSOs (Gender based violence, Child abuse and neglect, HIV/AIDS, OVC, elderly persons, people with disabilities and youth development and empowerment) supported

• 3 CSOs supporting vulnerable groups supported. After the budget cuts, the targeted CSOs were 5 and there was a 30% under commitment. This deliverable will be prioritised in the new financial year.

• 603 beneficiaries were supported.

• 177 volunteers and interns out of a target of 100 were trained in core competencies in sector/programme specific areas.

• Capacity building interventions provided to CSOs working with vulnerable groups. 8% of resources were committed to CSOs working with vulnerable groups to improve institutional capacity. This represented a 36% under commitment after the 51% budget cut.

5 Intermediary CSOs supported • 2 Intermediary CSOs have been supported for an amount of R1 481 000.

• 80% target not achieved due to budgetary constraints

• Advocacy, Lobbying and Think Tank CSOs were not supported due to budgetary constraints.

• 10 CSOs benefitted from supported Intermediary CSOs. The target was to strengthen 50 CSOs affiliated to networks and consortia.

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PROVINCIAL GRANT ALLOCATION 2010/11

Province Population Index Total Approved Amount per Province

Total number approved projects

Eastern Cape 20.80 7 R 6 623 280.00

Free State 7.10 6 R 4 478 890.00

Gauteng 10.50 6 R 5 392 481.00

Kwa-Zulu Natal 22.60 5 R 7 702 441.00

Limpopo 15.50 3 R 5 486 511.00

Mpumalanga 7.90 3 R 3 289 256.00

Northern Cape 1.80 3 R 1 804 800.00

North West Province 9.30 6 R 3 206 309.00

Western Cape 4.50 4 R 4 970 042.00

Total 100 43 R 42 954 009.00

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KEY ACHIEVEMENTS FOR STRATEGIC GOAL 2 : TO GRANT FUNDS TO CONTRIBUTE TOWARDS THE ERADICATION OF POVERTY

PLANNED ACHIEVEMENTS

30 Sustainable CSOs and Co-operatives in Rural Development funded

• 24 projects involved in Rural Development supported for an amount of R26 024 016.

• 5147 direct beneficiaries supported.

• 51% of funding allocated to Rural Development CSOs.

Geographic, demographic and socio-economic targets achieved

• Funding projects in targeted sectors and areas resulted in the creation of 1613 jobs and secondary employment opportunities.

10 Land Reform projects funded • 6 out of targeted 10 Land Reform projects were funded for an amount of R7 848 006. 40% was not achieved due to budgetary limitations.

15 Food Security Projects in ECD sites supported

• 15 Food Security Programmes based in ECD sites supported.

• The NDA committed an amount of R11.8m representing an over-commitment of 27.5% for the financial year.

• 439 direct beneficiaries supported 8

KEY ACHIEVEMENTS FOR STRATEGIC GOAL 2 : TO GRANT FUNDS TO CONTRIBUTE TOWARDS THE ERADICATION OF POVERTY

PLANNED ACHIEVEMENTS

10 CSOs supporting Vulnerable Groups supported

• 3 CSOs supporting Vulnerable Groups have been funded for an amount of R3 514 235. The remaining 70% was not funded due to budgetary limitations.

• 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.

• 603 beneficiaries were supported through the CSOs supporting vulnerable groups.

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KEY ACHIEVEMENTS FOR STRATEGIC GOAL 3: TO FACILITATE RESEARCH TOWARDS POVERTY ERADICATION

PLANNED ACHIEVEMENTS

3 Dialogues or seminars • 9 provincial policy dialogues with CSOs were carried out in preparation for the Rural Economic Development summit that took place in October 2010.

• 4 National Think Tanks held leading to the national summit.

• Provincial strategic policy dialogues took place in: Mpumalanga – Food Security KZN – Women & Children in Vulnerable groups. Northern Cape – formulation of development forum for NCNGO

Coalition.

• A dialogue/ network strategy and operational plan developed.

• A study on mapping the Rural Economy was completed.

• 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.

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KEY ACHIEVEMENTS FOR STRATEGIC GOAL 3: TO FACILITATE RESEARCH TOWARDS POVERTY ERADICATION

PLANNED ACHIEVEMENTS

Tool for measuring impact of dialogue developed

• Tools for measuring the impact of both internal and external dialogues produced.

• Civil Society Engagement Strategy MOU signed between the NDA and the community constituency of NEDLAC.

• Regional cooperation for Civil Society on development creating partnership and networking opportunities was not achieved due to budgetary constraints.

1 Publication for distribution • Two Best Practice reports completed.

• Five Case studies produced 1 Consolidated report for targeted funding

• A consolidation of Close Out / Impact Evaluations reports compiled into a single report.

• A consolidation of all 84 Due Diligence reports compiled into a single report.

• Concept Document / Papers on Rural Agro-Processing and Rural Enterprise Development compiled.

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KEY ACHIEVEMENTS FOR STRATEGIC GOAL 3: TO FACILITATE RESEARCH TOWARDS POVERTY ERADICATION../CONTI

PLANNED ACHIEVEMENTS

Publicise report on development information

• The following Development information was collated and disseminated to key stakeholders:

Baseline information on identified poverty wards Municipal IDPs and Provincial PGDs Information on Bio fuels A guideline / manual on project proposals for NGOs Guidelines and National integrated plan for ECDs Manual on how to start and run a co-operative

Number of technical reports generated and accessed by CSOs

• Profiles of SADC Councils of NGOs compiled.

• 84 project Due Diligences technical reports were compiled to guide funding of projects.

60% of close out projects evaluated

• 75 out 79 projects close-out reports were compiled.

• 35 Provincial project performance monitoring have been carried out.

• No baseline studies were undertaken in this financial year.12

KEY ACHIEVEMENTS FOR STRATEGIC GOAL 4: TO POSITION THE NDA AS A PREMIER DEVELOPMENT AGENCY AND MOBILISE RESOURCES

PLANNED ACHIEVEMENTS

Positive media coverage for the NDA and its funded projects.

• Free publicity in media was achieved for the NDA .

• 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.

1 National network established

• Instead of the national networks the funds were used for the four think tanks leading to the Rural Economic Development(RED) summit.

Partnership agreements implemented

• The following partnership agreements were entered into:

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

• The Partnership Agreement with Kaelo Worldwide Media was implemented in hosting a national summit on Rural Economic Development (RED). 13

KEY ACHIEVEMENTS FOR STRATEGIC GOAL 4: TO POSITION THE NDA AS A PREMIER DEVELOPMENT AGENCY AND MOBILISE RESOURCES…/CONTI

PLANNED ACHIEVEMENTS

R20 million raised from identified sources. • Not achieved.

Conduct feasibility and comparative studies on models of endowment fund

• Not achieved due to budgetary limitations.

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KEY ACHIEVEMENTS FOR STRATEGIC GOAL 5 : TO PROMOTE AND MAINTAIN ORGANISATIONAL EXCELLENCE AND SUSTAINABILITY

PLANNED ACHIEVEMENTS

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

Review and update and train on policies and processes

• The following Human Resources Policies were reviewed and developed :

Job Evaluation and Grading Recruitment and Employee Wellness

• A “Know Your Rights” campaign was conducted to educate, train and inform employees on salient clauses in both new and existing policies.

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KEY ACHIEVEMENTS FOR STRATEGIC GOAL 5 : TO PROMOTE AND MAINTAIN ORGANISATIONAL EXCELLENCE AND SUSTAINABILITY…/CONTI

PLANNED ACHIEVEMENTS

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

Benchmarking on cost management and resource utilization

• Benchmarking studies done

Monitor and implement corrective action

• Variance reports on actual performance against budgets attended to monthly.

Approved organisational structure and Job profiling

• Finalisation of the organisational structure is awaiting the approval of the diagnostic report. The approved organisational structure has been prioritised for the new financial year.

Creation of an enabling environment for people living with disabilities to reach their full potential

• One person with disability has been appointed.• The 2% strategic goal on employment of people with disability was

achieved .

Shared Values lived and Institutionalised

• Organisational values launched, institutionalised and incorporated in the performance management system.

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FINANCIAL REPORT

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SUMMARISED STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 31 MARCH 2011

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STATEMENT OF POSITION FOR THE YEAR ENDED 31 MARCH 2011

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• The NDA is reporting a deficit of R 30 Million for the period under review. The reported deficit was mainly attributable to the large cut in funding received from the National Treasury. The deficit was covered by accumulated reserves from the previous years(IDT establishment fund).

• The funding received from National Treasury for the current year of R 83.5 Million represents a reduction of 42% compared to previous year funding of R 144.8 Million.

• Management took a decision to fund the shortfall from accumulated reserves from the unused portion of the seed capital received from IDT at inception of the NDA and a nominal amount from discontinued projects.

• Management is still pursuing a Financial Management Model whereby a large percentage of its available financial resources are channeled towards service delivery. Attainment of the envisaged split between Mandate and Administration expenditure was a challenge in the current year due to the reduction in funding from National Treasury.

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COMMENTARY TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2011 (STATEMENT OF FIANCIAL PERFORMANCE)

Salient features of the Financial Performance for the year under review are highlighted below:

1. Total Revenue (R 83,5m: 2011, R 144,8m : 2010)• Total Revenue for the year was 41% lower compared to the previous year due to the reduction in

the transfer revenue received from National Treasury. • The reduction in transfer revenue also had a negative impact on the interest collected on cash

balances.

2. Total Expenditure• Total Expenditure was 23% lower compared to previous year.• 32% of the total expenditure for the year was funded from accumulated reserves.

2.1 Mandate Costs

2.1.1 Funds committed to Poverty alleviation Projects• 43 projects worth R42 Million were funded in the current year as compared to 77 projects in the

previous year worth R 94.7million, thus representing a 55% reduction.21

COMMENTARY TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2011 (STATEMENT OF FIANCIAL PERFORMANCE)

3. Administration and Governance costs ( R 75.8m :2011, R 72.6m: 2010)

• Administration costs increased year on year by 4% mainly due to an increase in staff costs. Other Administration costs such as Board costs and Goods and services were lower compared to previous year due to cost containment measures that were implemented.

• Staff costs increased by 10% year on year mainly due to key positions such as CEO and CFO that were filled in the current year.

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COMMENTARY TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2011 (STATEMENT OF FIANCIAL PERFORMANCE)

COMMENTARY TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2011 (BALANCE SHEET)

• The Total Assets of R 115 Million in current year and R 222 Million in previous year are mainly made up of Cash balances that account for 93% and 97% respectively of the total assets.

• Total Liabilities of R 103 Million in the current year and R 180 Million in the previous year are mainly made up of Funds committed to projects of R 95 Million and R150 Million which account for 92% and 83% respectively of the total liabilities.

• A further 12% of the total liabilities in 2010 was made up of funds due to the European Union that were refunded in the current year.

5. Cash and Cash Equivalents• Cash and Cash equivalents of R 111 Million and R 216 Million in 2011 and 2010 respectively are

largely made up of funds committed to projects not yet paid.

6. Funds committed to Projects• The reduction in funds due to projects is mainly attributable to cash disbursements to the amount

of R94 Million.

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CHALLENGES

• Capacity of CSOs remains a challenge.

• Monitoring of projects has improved but other projects require sustained on-going mentoring support.

• Achieving a split between the mandate costs and administration costs is a concern to the

NDA. The current under funding of the NDA will continue to present the challenge of balancing mandate and admin costs as the organisation requires a critical mass of dedicated human resources to achieve strategic goals supported by sound administrative infrastructure.

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Hi nkhensile

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