Youth agency ‘in full disarray’ issues R212m in loans unlikely to be repaid

CAPE TOWN — The National Youth Development Agency (NYDA) has over the last two years issued more than R200m worth of loans, which are unlikely to ever be repaid, AuditorGeneral Terence Nombembe has reported to Parliament.

The agency, which is housed in the Presidency, has been rarely far from the headlines, particularly over salaries and increases awarded to officials and board members.

It is subject to a continuing investigation by Public Protector Thuli Madonsela over the spending on the World Festival of Youth and Students in 2010 and whether there was misappropriation of funds or fraud.

Scrutiny of the awarding of contracts by the agency and whether proper supply chain management rules have been observed is also continuing.

Mr Nombembe — whose report is included in the National Youth Development Agency’s annual report tabled in Parliament yesterday — did not qualify his audit, but highlighted significant problems with the agency’s management.

He said in the 2012-13 financial year R30.5m of loans were impaired, which added to the loans granted in 2011-12 of R192.8m, brought to R212m the amount of loans impaired, “as the recoverability of these loans are doubtful”. It is assumed that some of these loans were repaid.

Earlier this year the agency’s CEO was suspended and a new board put in place. It has since undertaken a number of measures to strengthen the organisation. It announced, among oth- ers, that it will no longer offer loans to young entrepreneurs, but instead provide grant finance combined with business development support. It would tap into a R1bn facility from the Industrial Development Corporation and a R1.7bn facility from the Small Enterprise Finance Agency, which were made available to boost young entrepreneurs.

In his report Mr Nombembe said material misstatements in the agency’s financial statements were found, but these were corrected, allowing the agency to avoid a qualified audit report.

He found that the agency had not taken effective steps to prevent irregular and wasteful expenditure and “effective and appropriate steps were not taken against officials who incurred and/or permitted irregular, fruitless and wasteful expenditure”.

The responsible minister in the Presidency, Collins Chabane said he was delighted with the performance of the agency and “the agency has demonstrated an acceptable record of governance and an improving trajectory on performance”.

Democratic Alliance (DA) spokesman for the Presidency Joe McGluwa said the youth agency’s annual report revealed an organisation in complete disarray.