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annual report (2018/19) PORTFOLIO COMMITTEE on Social development 09 OCTOBER 2019

annual report (2018/19) PORTFOLIO COMMITTEE on Social development 09 OCTOBER 2019. PURPOSE. To present the Annual Report for the 2018/19 financial year, comprising mainly of the: Programme Performance Information; and Annual Financial Statements (AFS) for year ended March 31, 2019.

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annual report (2018/19) PORTFOLIO COMMITTEE on Social development 09 OCTOBER 2019

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  1. annual report (2018/19)PORTFOLIO COMMITTEE on Social development09 OCTOBER 2019

  2. PURPOSE • To present the Annual Report for the 2018/19 financial year, comprising mainly of the: • Programme Performance Information; and • Annual Financial Statements (AFS) for year ended March 31, 2019

  3. PART A: GENERAL INFORMATION

  4. LEGISLATIVEMANDATE NDA is a Schedule 3A Entity administratively reporting to DSD but operationally attached to all departments Further, the Agency is required by section 4 of the Act to implement programmes that respond to the following areas of responsibilities: • Act as a key conduit for funding from the Government of the Republic, foreign governments and other national and international donors for development work to be carried out by CSOs. • Contribute towards building the capacity of CSOs to enable them to carry out development work effectively. • Create and maintain a database of CSOs, including, but not limited to, the scope and subject matter of their work and their geographical distribution, and share the information in that database with relevant organs of state and other stakeholders.

  5. Vision: A society free from poverty ORGANISATIONAL VALUES Mission: Facilitate sustainable development by strengthening CSOs involved in poverty eradication through enhanced capacity building with grant funding and research VISION OF THE NDA Integrity Dignity Empowerment Accountability Transparency Excellence Partnering

  6. PART B: PERFORMANCE INFORMATION

  7. PROGRAMME 1: GOVENANCE AND ADMINISTRATION

  8. ProgramME 2: CSodevelopment

  9. ProgramME 2: CSodevelopment

  10. Program 3: - Research

  11. PART C: GOVERNANCE

  12. GOVERNANCE – NDA BOARD The NDA Board consisted of 10 members and was appointed for a period of three years commencing 4 January 2016 to 3 January 2019. During the fourth quarter of the reporting period there was a vacancy in relation to governance because the process of appointing the new Board took longer than expected. The Board operated through the following four committees namely: • Management Committee; • Audit and Risk Committee; • Human Resources and Remuneration Committee; and • Projects, research and Development Committee.

  13. GOVERNANCE – AUDIT COMMITTEE REPORT The Audit Committee of the Board has evaluated the internal controls through ongoing assessment of the: • The effectiveness of the internal control systems. • The operational risk areas covered in the scope of internal and external audits. • The adequacy, reliability and accuracy of financial information provided to Board and stakeholders. • Any accounting and auditing concerns identified as a result of internal and external audits. • Compliance with legal, accounting and regulatory frameworks. • The activities of the Internal Audit Function, including its annual work programme, coordination with external auditors, the reports of significant investigations and the response of management to specific recommendations.

  14. GOVERNANCE – AUDIT COMMITTEE REPORT The Audit Committee of the Board has : • Reviewed and discussed with the Auditor-General the audited Annual Financial Statements included in the Annual Report; • Reviewed the Auditor-General’s management report and management’s responses; • Reviewed the accounting policies and practices; • Evaluated the audited financial statements included in the Annual Report and, based on the information provided to the Committee, considered that the said statements comply in all material respects with the requirements of the Treasury Regulations, the PFMA requirements as well as South African Standards of Generally Recognised Accounting Practices (SA Standards of GRAP); and • Reviewed the NDA’s Report on Performance

  15. PART D: HUMAN RESOURCES

  16. PERSONNEL COST BY PROGRAMME AND LEVEL

  17. PART E: ANNUAL FINANCIAL STATEMENTS

  18. AUDITED ANNUAL FINANCIAL STATEMENTS AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2018 *All numbers are rounded off to the nearest Rand.

  19. STATEMENT OF PERFORMANCE FOR YEAR ENDED 31 MARCH 2019

  20. REVENUE FOR 2018/19 FINANCIAL YEAR

  21. NARRATIVE TO ANNUAL FINANCIAL STATEMENT • INTRODUCTION • The NDA is reporting an Accounting deficit of R 5.1 million compared to a restated deficit of R 4,1 million in 2017/2018. The Accounting deficits are due to timing differences between the receipt of allocation and actual expenditure. Some expenses incurred in 2018/19 were committed and funded from revenue recognised and received in the previous financial year.

  22. NARRATIVE TO ANNUAL FINANCIAL STATEMENT • REVENUE • Total revenue/(Resources) available to the NDA declined by 2% from R 225,9 million in 2018 to R 221 million in 2019. • The main sources of revenue , the official allocation from National Treasury increased by 0.8% from R 200.9 million in 2018 to R 202.6 million in 2019. During the same period the costs of doing business (CPI) increased by 4.9%. The allocation declined in real terms by 4,1%, while cost of leases and compensation of employees increased by 8% and 6.5% respectively. • The second major source of revenue, the conditional grants received from other government departments and funders declined by 27% from previous financial year. This decline is attributable to the introduction by National Treasury of Circular 21 on classification of expenses. The circular implies that transfers between departments and entities are classified as Goods and services and require a procurement process.

  23. NARRATIVE TO ANNUAL FINANCIAL STATEMENT • REVENUE • Interest income declined by 53% due to the reduction in bank balances. • The entity continues to have to do more with less due to a resources base that continues to decline in real terms. Below inflationary increases in the allocation from government puts strain on the entity and result in less resources becoming available to implement key organizational programmes and impacts on delivering on the Strategy

  24. EXPENDITURE BY PROGRAMME FOR YEAR ENDED 31 MARCH 2019CH 2019

  25. NARRATIVE TO ANNUAL FINANCIAL STATEMENT • EXPENDITURE BY PROGRAMME • A total of R 229 million was spent on programmes against total available budget of R247 million. The spend represents 93% utilization of the available budget. • PROGRAMME 1: ADMINISTRATION • The programme spent 94% (R104,9 million) of the allocated budget (R110.8 million). Administration expenditure grew by a mere 6% year on year from R 95,6 million to R 101,7 million. • The main drivers of the administration costs are infrastructure costs such as rented offices, ICT infrastructure and compensation of employees. • Compensation of employees increased by at 6.5% • Rentals and office infrastructure costs increased at an average of 7% from previous year

  26. NARRATIVE TO ANNUAL FINANCIAL STATEMENT • PROGRAMME 2 : CSO’s DEVELOPMENT • The programme was allocated a total budget of R 126 million for the 2018/19 financial against which R116,8 was spent in the current year. • 92% of the allocated budget was spent in the current year. • The lower than expected spend is mainly attributable to slow spent on disbursements to CSO’s due to projects that could not be approved in 4th quarter of 2019. • PROGRAMME 3 : RESEARCH • The programme was allocated a total budget of R 10 million for the 2018/19 financial against which R8,1 was spent in the current year. • 78% of the allocated budget was spent in the current year.

  27. NARRATIVE TO ANNUAL FINANCIAL STATEMENT • PROGRAMME 3 : RESEARCH • The low spend is attributable to the following : • Three research studies were commissioned in 18/19 but only awarded and finalized in 1st quarter of 19/20. • Aplanned evaluation of the capacity-building programme that was to be funded and implemented in collaboration with the department of Social Development , did not materialise due to the department not making the financial contribution as planned to conduct the study

  28. EXPENDITURE BY ECONOMIC CLASSIFICATION

  29. STATEMENT OF FINANCIAL POSITION

  30. NARRATIVE TO ANNUAL BALANCE SHEET • CURENT ASSETS Debtors are made up as follows: • Cash and cash equivalents represent funds in bank accounts • The decrease in bank balances is due to lower balances held in 2019 ( R 10m in 2019) compared to R 28.9 million .

  31. NARRATIVE TO ANNUAL BALANCE SHEET • FUNDS DUE TO THIRD PARTIES:

  32. CASH FLOW STATEMENT

  33. CONCLUSION It is proposed that the Portfolio Committee notes the Annual Report for the 2018/19 financial year, comprising mainly of the: • Programme Performance Information; and • Annual Financial Statements (AFS) for year ended March 31, 2019

  34. Thank you THANK YOU

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