Umsobomvu Youth Fund

Umsobomvu Youth Fund

Presentation to Portfolio Committee on Labour

25 October 2005

Outline The UYF team Key issues from the audited financials

Three years – cumulative impact report Leveraging opportunities – impact on commitments Impact data Commitments (contracted and non-contracted)

Last year’s achievements Some highlights Target vs Actual Financial Information

Challenges Consolidation of audited financials Access to UYF services – especially rural areas

Plans for 2005/2006

The UYF Team Adv. R Moloko – Chairperson of the Board Ms D Motau – Non-Exec. Director & Chair of Audit

Committee Mr J du Preez – Non – Exec. Director Mr T Wixley – Independent Non Executive

Member of Audit Committee Mr M Kekana – Chief Executive Officer Ms J Law – Chief Finance Officer

Approved & Projected Commitments

Business UnitApproved &

Contracted to DateProjected 2005/6 Projected 2006/7 Total

Contact Information & Counselling R 71,438,947 R 27,646,047 R 9,705,399 R 108,790,392

Skills Development & Transfer R 200,865,417 R 92,417,674 R 79,011,134 R 372,294,226

Business Development Services R 83,608,396 R 52,093,146 R 33,954,299 R 169,655,840

Enterprise Finance R 394,745,248 R 33,682,384 R 36,182,384 R 464,610,017

Communications & Advocacy R 10,434,505 R 8,606,946 R 6,606,946 R 25,648,396

Capacity Building & Research R 5,471,576 R 4,112,542 R 4,112,542 R 13,696,661

IGM's & Youth in LED R 11,117,421 R 10,258,536 R 10,258,536 R 31,634,493

  R 777,681,510 R 228,817,275 R 179,831,240 R 1,186,330,025

These projections are done based on the Assumption that some projects will be scaled back 

The projections do not include UYF's Operating Overheads     

The commitment figures are up to 30 September 2005     

Current Funding Situation UYF received R855 million from govt. in 2001. R780 million has been spent/committed

contractually and will be paid out until 2006/7/8 Taking out Auditors definition of commitment,

UYF is actually fully committed. Auditors only recognize those commitments that have been reduced to writing To protect itself against non delivery UYF signs normally

for 1 year only. However, commitment – 3 years at least

Cumulative Report

Cumulative Report

Cumulative Report

Factors That Have Evolved Lack of capacity in rural areas, govt.

departments/ NGOs affect time it takes to implement a programme. Often a new organisation has to be established (e.g. National Youth Service Programme in Limpopo/ Free State)

Leveraging UYF resources with third parties has decreased the amount of funds needed from UYF to implement programmes. Raised R216 million in 2004/5 from third parties.

For Year Under Review (highlights)

Skills Development & Transfer Funding of 26 FET Colleges

More than 2000 youth receiving training in vocational skills Succeeded in getting SETAs and FET Colleges working

together in an unprecedented way Assisting in integration of education and training Rural outreach achieved due to location of FET Colleges Strengthening of the Public Sector Education System

For Year Under Review (highlights)

Skills Development & Transfer Implementation of the National Youth Service

Programme – launched August 2004 More than 10 000 youth involved in service The National Youth Service Unit established in less than 6

months Effectively mainstreamed NYSP

For Year Under Review (highlights)

Business Development Support Expanded the Voucher programme into 9 from 5

provinces

Launched the Entrepreneurship Education project – 30 schools, 180 teachers in 3 provinces (7200 learners)

Implementing the National Venture Creation Learnership – 3 FET Colleges running a pilot programme

For Year Under Review (highlights)

Enterprise Finance First National Bank increased their exposure from

R20million to R240million focusing on the same youth target. One of the largest Public Private Partnerships of its kind globally

Our loan book surpassed the R100million and more than 1000 enterprises

For Year Under Review (highlights)

Contact Information & Counselling Implemented the Graduate Database as per President

Mbeki’s directive in May 2004. The database is called “Jobs and Opportunities Seekers Database” (JOBS). Currently has 68 000 CVs registered of unemployed graduates and placing into jobs since March ‘05

Launched the SA Youth Card in Dec 04. Currently has 10 000 card holders & 90 companies providing discounts. Associated Youth Magazine in Sunday Times (to include Sowetan, etc)

17 new centres were established (in total 69 access points)

For Year Under Review

For Year Under Review

For Year Under Review

For Year Under Review (income statement)

Challenges Consolidation of Audited Financial Statements

GAAP requires application of AC132 which stipulates the consolidation of underlying investments due to control (why control by UYF?).

Materiality level of UYF set at R700 000 due to small amount of assets under control and amount lent as at year end

Reporting requirements - burden on SMEs. To Address:

Adopting International Financial Reporting Standards (fair value reporting i.s.o consolidation)- IAS 28

Eastern, Central & Southern Federation of Accountants (SAICA is part of) proposes New Guide on Financial Reporting for SMEs. Will reduce reporting complexities

SME regulatory burden more serious for young people

Challenges Access to UYF services

Issue is about scale Scale limited because UYF was set up with short term in

mind. Therefore need to sustain few programmes instead of a “spray gun approach”

Growth limited due to unavailability of viable service providers in rural areas. Therefore, growth dictated by presence of Service Providers

To address: Propose to set up UYF outlets Outlets will also facilitate integration of services

Plans 2005-2006 (highlights) Support government’s 6% growth target focusing

especially on the second economy

Skills development & transfer Supporting more FET Colleges Support project consolidate (DBSA/ Dept of Provincial &

Local govt.) Launch the Graduate Development Programme (Social

Capital for the unemployed graduate) Implement Service Programmes along volunteer lines –

e.g. teaching Maths and English, caring for orphans or child headed households

Plans 2005 - 2006 (highlights)

Business Development Support Expand the Entrepreneurship Education project to more

schools and provinces

Increase Entrepreneurship Education for out-of-school youth

Launch the Mentorship voucher product & reinstatement of the company registration voucher

Launch the Business Opportunities Support Service (linking youth to business opportunities)

Plans 2005 - 2006 (highlights)

Enterprise Finance Expand the Cooperative Programme both for production

coops and savings coops

Franchise Cadet Programme (with Sanlam & Business Partners)

Training of loan officers (up to 500 to serve communities to improve access to finance)

Implementation of pilot UYF outlets at least by March 2006 Enable scaling up of UYF programmes; and

Integration of UYF services.

Thank You

unleashing the potential of youth