Trou­bled body says cash in­jec­tion will be used for projects and not salaries

CityPress - - Business - MOY­AGABO MAAKE moy­agabo.maake@city­press.co.za

Aweek after it was threat­ened with clo­sure, the Na­tional Youth De­vel­op­ment Agency (NYDA) was granted an ad­di­tional R200 mil­lion in fund­ing this week. The agency used to of­fer en­ter­prise fi­nance and grants for strug­gling en­trepreneurs and co­op­er­a­tives. It has as­sisted more than 6 mil­lion peo­ple in 14 branches across the coun­try, but has changed fo­cus to ed­u­ca­tion and skills de­vel­op­ment.

Its chair­per­son, Yer­shen Pil­lay, said th­ese ben­e­fi­cia­ries had no rea­son to worry. He blamed the op­po­si­tion Demo­cratic Al­liance for “mis­lead­ing state­ments” say­ing, “Par­lia­men­tary tran­scripts, which are avail­able to the pub­lic, will re­flect that no dis­cus­sion or decision to close down the NYDA ex­ists. The dis­cus­sion in Par­lia­ment was whether to ap­prove ad­di­tional fund­ing for the NYDA or not.”

Michael Cardo, the DA’s spokesper­son on the pres­i­dency – whose min­is­ter is re­spon­si­ble for the agency – said re­spon­si­ble mem­bers of the par­lia­men­tary com­mit­tee, in­clud­ing ANC MPs, were crit­i­cal of the agency’s per­for­mance last week and also ques­tioned its lack of vis­i­bil­ity and pres­ence in ru­ral ar­eas, its top-heavy struc­ture and bloated salary bill, as well as its dis­mal record of waste­ful and ir­reg­u­lar ex­pen­di­ture.

“The com­mit­tee chair­per­son, Peace Mabe, took a tough line on the NYDA,” said Cardo.

“She re­peat­edly said it was the ‘last chance’ for the agency in the cur­rent fi­nan­cial year, and if it didn’t man­age to turn it­self around com­pletely by the end of the fi­nan­cial year we, as a com­mit­tee, would rec­om­mend to Par­lia­ment that the NYDA should ‘close shop’.”

Ac­cord­ing to Cardo, Mabe or­dered the NYDA to re­port back to Par­lia­ment with a turn­around strat­egy the next day, but the agency did not turn up. It even­tu­ally ar­rived on Tues­day.

Pil­lay said that after the agency had pre­sented its op­er­a­tional turn­around strat­egy for the next three to five years, the com­mit­tee was so im­pressed that it de­cided to ap­prove and rec­om­mend the ad­di­tional fund­ing of R200 mil­lion.

Cardo said this would top up the R408 mil­lion al­ready al­lo­cated to the agency.

“This was a clear vote of con­fi­dence in the NYDA by Par­lia­ment,” said Pil­lay.

Asked why Par­lia­ment would re­quest a turn­around strat­egy if noth­ing was wrong with the agency, Pil­lay said the com­mit­tee merely wanted as­sur­ances that the agency would spend the ad­di­tional fund­ing ef­fec­tively and ef­fi­ciently.

“The CEO of the NYDA had al­ready de­vel­oped an op­er­a­tional strat­egy to do so that would re­di­rect R78 mil­lion away from op­er­a­tions and to­wards ac­tual prod­ucts and ser­vices for youth in the next three years.

“Par­lia­ment re­quested to see this strat­egy and, after it was pre­sented to them, they were con­vinced that the NYDA de­served more fund­ing.”

Cardo at­trib­uted the fund­ing grant to a “com­plete turn­around” on Mabe’s part.

“When the com­mit­tee fi­nalised its bud­getary re­view and rec­om­men­da­tions re­port yes­ter­day, the DA and EFF put it on record that we op­posed the ad­di­tional R200 mil­lion,” he said.

The agency has come through years of ir­reg­u­lar ex­pen­di­ture, which it slashed by 73% to R16.7 mil­lion be­tween March last year and March this year. Salaries and other ex­penses are no longer larger than project dis­burse­ments, as they were in the past. But the col­lec­tion of loans con­tin­ues to bedevil the agency. The Au­di­tor-Gen­eral found that an amount of R32.5 mil­lion was im­paired in the cur­rent year, while R225.6 mil­lion – rep­re­sent­ing more than 97% of the agency’s to­tal gross loans book of R232.3 mil­lion – was im­paired in the year to March this year. It is doubt­ful if this money can be re­cov­ered. “The NYDA stopped loan fund­ing in June 2013 and since then we have been at­tempt­ing to rec­ol­lect all loans is­sued be­fore that,” said Pil­lay. “Given that the NYDA has not been is­su­ing loans since June 2013, Par­lia­ment has rec­om­mended that we con­sider sell­ing the loan book to re­cover the R232.3 mil­lion of loans re­ceiv­able.”

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