NYDA fat cats feel the AG’s whip

2011-10-01 16:43

The National Youth Development Agency (NYDA) ignored ­government tender rules and paid its top executives fat bonuses in the past financial year.

This is revealed in the Auditor-General’s (AG) 2010/11 annual ­report on the agency.

The detailed report challenges NYDA chief executive Steven Ngubeni’s crowing claim this week that it had received a “clean ­opinion” from the AG’s office.

The report contains a number of “emphasis of matters” and “significant uncertainties” comments.

These include that R142 million (80%) of the R178 million it had lent to beneficiaries was ­unlikely to be repaid and had to be considered “impaired”.

The agency also incurred over R2 million in fruitless and wasteful expenditure – including R6 000 on the fraudulent use of a credit card.

Other issues raised were:
» Errors in the agency’s financial reporting, including that ­management “did not implement daily and monthly controls” over trade, monies owing and its loan ­management system;

» That the agency had contravened a number of Treasury rules and requirements of the Public Finance and Management Act in its ­procurement processes;

» That it did not allow for competitive bidding for contracts worth more than R500 000;

» That contracts valued between R10 000 and R500 000 were awarded without first obtaining three quotes, as required by law;

» That not all invitations for competitive bidding were advertised for the minimum 21 days;

» That it did not apply the preference point system required by law for goods and services worth more than R30 000, and;

» That it awarded contracts to ­bidders who did not submit the ­required forms setting out potential conflicts of interest with people employed by the state.

The agency managed to settle a dispute over a R5.7 million transport bill with the City of Tshwane, stemming from its controversial youth festival in December, by agreeing to foot half the bill.

City Press recently revealed official Treasury figures which showed that the NYDA was among the top paying state agencies, with a budgeted annual cost per job for the current financial year of R517 000 – a figure Ngubeni disputed in our report even though it had been signed off by the ­Presidency under which the agency falls.

The financial statements show that the 15-strong “divisional management” team scored huge ­bonuses.

Most bonuses amounted to between 17% and 21% of their annual salaries, which effectively means annual bonuses of between R112 000 and R191 000.

The only director to receive a bonus of less than R110 000 was ­Margaret Tleane, the divisional ­director for policy, lobby and advocacy, who got a R36 000 bonus. But she received expense allowances totalling R213 000, which represented 49.5% of her yearly salary.

Freddie Bruintjies, the divisional director for enterprise finance, earned a salary of about R232 000 until his resignation in July last year. He was paid a R185 000 bonus – almost 80% of his salary.

The salaries paid to divisional directors ranged from R430 000 a year to R670 000 a year, excluding expense allowances and ­pension fund contributions.

Expense allowances cost the agency R905 000.

The agency commented by saying that Ngubeni had addressed the AG’s concerns during the release of the annual report.

He said of the irregular expenses that R41 million was due to ongoing contracts entered into by the former Umsobomvu Youth Fund, and R26 million due to expenses incurred for the World Festival of Youth and “late commitment from some funders”.

“Due to the urgency resulting from the limited time, the normal tender processes were not followed to allow the delivery of a ­successful festival,” he said.

“It is important to note in this regard that the Auditor General has satisfied himself that other than the procurement process not being followed to a ‘t’, no misappropriation of funds occurred and no other unbecoming conduct in relation to these expenses in question occurred.”

With regard to the R147 million in impaired debt, he said “this is not bad debt yet” and said the reason for the impairments was “mainly the character and risk profile of the agency’s target market, as these are mainly young people”.

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