R200 million funding boost for youth agency

2014-10-26 17:00

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

A week 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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