Address by the Deputy Minister in The Presidency, Mr Buti Manamela, to the Auditor- General South Africa Audit awards
Minister of Trade and Industry – Mr Rob Davies
Minister of Justice and Correctional Services – Adv Michael Masutha
Executive Chairperson of the NYDA – Mr Yershen Pillay
Director General of the DTI – Mr Lionel October
Director General of COGTA – Mr Vusi Madonsela
Chief Executive Officer of SALGA – Mr Xolile George
Chief Operations Officer in The Presidency – Ms Lakela Kaunda
National Leader of Audit Services – Mr Eugene Zungu
The Chinese philosopher, Lao Tzu, wrote that “the journey of a thousand miles begins with the first step”.
Today the Presidency, the Department of Planning, Monitoring and Evaluation (DPME) and the National Youth Development Agency (NYDA) receive awards for a clean audit opinion. We applaud and celebrate this achievement.
For the DPME, this is the third year in a row that the Department has achieved a clean audit. As the Department charged with the responsibility for monitoring government performance, it was important for the Department to lead by example.
With the Presidency being the nerve centre of government, the clean audit demonstrates leadership by example.
This is the first time that the NYDA receives a clean audit. What did it take to turn this public entity around? Three years ago, this seemed like a thousand miles away. Regular reports in the media alluded to corruption, mismanagement and nepotism. The NYDA became known as a “cash-cow” for the connected elite. What was even more disturbing was the perception of a “culture” of financial mismanagement within the agency.
It is important for us to reflect on this journey towards a clean audit because we need to identify and model good practices across the public sector. We need to amplify these good practices and challenge departments and entities to model these good practices. Public funds must be spent prudently and must be properly accounted for in terms of our legislation and regulations.
So what were some of these steps that were taken towards the thousand mile journey? What are some of the good practices that were developed and institutionalised?
President Jacob Zuma appointed a new board of directors for the NYDA in March 2013 under the able leadership of Mr Yershen Pillay. And so began this journey of a thousand miles.
Upon my appointment as Deputy Minister in The Presidency with oversight responsibility of the NYDA, I immediately met with the NYDA board. I explicitly stated my concerns about the perceptions of the NYDA in the public space. I iterated my demand for strong leadership and sound financial management as the foundation for impactful youth development service delivery. I was mindful of the expectations that young people had for the NYDA and we could not fail them any longer.
The NYDA board told me that they wanted to provide a proper balance between leadership, governance and management. They emphasised a culture of ethical leadership. They promised good governance.
They accentuated quality management with a particular focus of financial management.
Ethical leadership had to start at the top, from the board. The board had to assure that it provided ethical leadership by walking the talk and setting the leadership tone for management and staff. Ensuring that proper controls are effected and that the control environment is strengthened was one of the steps in the journey. Driving a culture of legislative and regulatory compliance was another step in the journey. Holding officials accountable by taking disciplinary action for irregular expenditure, fruitless and wasteful expenditure was a further step.
Having a well-functioning Audit Committee, under the competent leadership of Ms Rachel Kalidass, certainly assisted.
The Audit Committee held management accountable and ensured that proper controls were developed and that the control environment was monitored. Risks were identified early and mitigating actions implemented consistently.
Oversight was critical. My regular meetings with the Chairperson, Deputy Chairperson and the board, wherein my expectations were clearly articulated resulting in pro-active oversight. Representatives of the Presidency and the DPME, as the respective Executive Authorities, participated in Audit Committee meetings to monitor and guide.
Strong management was central to driving a culture of compliance and respect for legislation and regulations. The NYDA management, through training, coaching, taking corrective and sometimes disciplinary action set the tone for a culture shift.
The confluence of actors and actions working in a concerted effort helped drive the NYDA towards a clean audit. Sturdy oversight, sound corporate governance, strong management and a supportive compliance culture were the foundations.
So what were the results?
A 97% reduction in irregular expenditure, from R62 million in 2012/2013 to R16.7 million in 2013/2014 to R580 000 in 2014/2015. The NYDA will not rest there. We are aiming for zero irregular expenditure.
A reduction in matters of non-compliance from 10 to zero. Today the NYDA is a fully compliant public entity.
Good financial management almost always results in more resources for service delivery. The NYDA achieved its best ever performance reaching 93% of its pre-determined objectives.
And this is what it is all about. Sturdy oversight, good corporate governance, and sound financial management are not ends in itself. It must result in better service delivery for our people. It must result in public funds being put to its best use for meeting the needs of our people and for the responsibilities of the state.
Clean audits inspire public confidence. It changes people’s perceptions about public institutions. Young people are more confident about the services of NYDA. Over 1 million young people have been served through NYDA services.
More money has been freed up for youth entrepreneurship grants, scholarships and career guidance services. 1 034 young people received grants to start their businesses. 300 students received scholarships. Young people have been served irrespective of political affiliation.
I wish to commend the Board, the Audit Committee, the management and the staff of the NYDA. They have shown South Africa that young people are capable of managing and accounting for funds. They have shown us that it is indeed possible to turn public entities around. They have shown us that good management of resources will result in better service delivery.
The journey has been a long, tiresome one. But the results have been good. Let us adopt and model these good practices across the public sector.
I thank you.