1. Annual Report: Financial Year 2007/08 Presentation to the Portfolio Committee on Social Development
Cape Town 22 January 2009

2. NDA Legislative Mandate:
Primary Mandate
To contribute towards the eradication of poverty and its causes by granting funds to Civil Society Organisations for the purpose of
• Implementing development projects for poor communities; and
• Strengthening the institutional capacity of other Civil Society Organisations
that provide services to the poor
Secondary Mandate
Promote consultation dialogue and sharing of development experience between Civil Society Organisations and relevant organs of state; debate development policy; and to undertake research and publication aimed at providing the basis for development policy.

3. Vision, Mission and Values
A developing society free from poverty
MISSION
To contribute to poverty eradication and elimination of its causes
VALUES
As a development agency, we subscribe to the following values:
• Integrity
• Excellence
• Dignity
• Partnering
• Commitment
• Empowerment

4. 2007/08 Summary Performance Report
The report is based on the following FOUR STRATEGIC GOALS:
Organisational Transformation
Partnering For Development
Community Empowerment for Sustainable Development
Communication of Credible and Relevant Researched Development Information

5. NON FINANCIAL PERFORMANCE REPORT
Goal 1: Organisational Transformation
• Achieved organisational stability;
• Enhanced a performance culture by improving the performance management system
• Strengthened the organisational capacity by building the Human Resources Unit; filling critical vacancies; increasing efforts in the areas of training and education of staff; and putting in place appropriate policies;
• Improving on good governance by ensuring that compliance is observed; and
• Increasing organisational visibility by building relations with
stakeholders and promoting the NDA brand.

6. NON FINANCIAL PERFORMANCE
Goal 2: Partnering for development
• Developed a partnering for development strategy which is still to be approved by the Board based on the overall strategy of the organisation.
• Conducted an extensive organisational promotion campaign to raise awareness about the NDA, its mandate and work among key stakeholders in government and Civil Society Organisations.
• Strengthened our “on the ground” collaborations with strategic partners in the implementation of projects, especially local municipalities and specific relevant departments.
• Established new relations with UNDP and the Human Rights Commission who collaborated with us in our annual poverty conference which took place in October.
• Established relations with the Universities of Limpopo; Venda and the Premiers’ office. These relations resulted in a successful collaboration on our conference on poverty in Limpopo.
• Continued with our role as coordinating Agency for the South African Chapter of the German – South Africa partnership forum for development.

7. NON FINANCIAL PERFORMANCE
Goal 3: Community Empowerment for sustainable development
• R89,9 million in grant funding to 78 CSOs; NGOs and Co-operatives was approved by the Board.
This was aimed at funding poverty eradication and development projects across the country especially in the rural areas.
The amount of R133, 8 million included in the annual financial statements relates to projects that were approved from 2001 to 2008.
The budget for 2007/8 for project funding was R89, 9 million which was committed to projects.
Included in the R133,8 million is the R56, 8 million of projects that were approved in the current financial year and the balance of R77 million relates to projects that were approved between
This has benefited people directly and indirectly throughout the country.

8. NON FINANCIAL PERFORMANCE
The biggest amounts of these grants went to those provinces with the largest population of rural and poor, i.e. KwaZulu Natal; Limpopo and the Eastern Cape.
• Successfully implemented the second phase of capacity building
for CSOs which was started in the previous year with a grant of
R25, 7 million.
• A large number of CSOs are benefiting from project through
training.

9. NON FINANCIAL PERFORMANCE
Breakdown of provincial grant commitments for 2007/08 financial year is as follows:
Province Total number approved Amount
Eastern Cape R15,197,111
Free State R 7,915,393
Gauteng R 5,881,732
KwaZulu Natal R13,081,851
Limpopo R11,045,0125
Mpumalanga R 8,938,371
Northern Cape R 7,257,692
North West R12,305,059
Western Cape R 8,263,875
TOTAL R89,886,109

10. NON FINANCIAL PERFORMANCE
Goal 4: Communication of credible and relevant researched information
4a. Research information:
o The state of CSOs
o Municipal Poverty Profile and Resource Flows
o Provincial Poverty Profile and Resource Flows

11. NON FINANCIAL PERFORMANCE
4b. Promotion of NDA visibility:
Published the following:
o Four issues of The Voice newsletter
o Four issues of TsaRona newsletter
o NDA generic brochures distributed at RFPs
o NDA annual report
o NDA Strategy document
o Oudsthoorn Poverty conference report
o October 2007 Poverty conference report
o Website updates
o Intranet updates
o Revised brief strategy and profile documents
o Requests for Proposals adverts for six provincial offices
o South African Local Government Association exhibition
o Corporate Social Investment exhibition
o Institute for Local Government Management Roundtable
o National Council Of Provinces
o Budget Vote
o Branded the organisation at 229 project sites in eight
provinces.

12. Financial Report: 2007/08

13. 1. Condensed Statement of Financial Performance
The statement of financial performance on Page 53 of the Annual Report is summarized
Summarized by grouping the Top 4 expense items separately and the rest of the expenses as a separate grouping

14. 2. Highlights on Financial Performance
The entity is reporting a deficit of R61.4m for the period under review compared to a budgeted break-even.
The reported deficit is mainly attributable to projects committed in the current year which were approved by the NDA Board in previous financial years.
These projects could not be provided for in the books in prior years as they do not meet the requirements for either a Provision or a Contingent Liability. These projects amounted to R76.2m.
If the income statement is stripped of the effect of these projects and the one-off EU Ineligible expenditure, the entity will be reporting a surplus of R20.3m (as shown in the condensed income statement above).

15. Highlights (continued)
The following major expenses items are explained and analysed R 190.6m:2008, R 138.1m:2007 below.
These expense items make up 88% :2008 and 85% :2007 of the total value of expenses

16. 2. 1 Committed Poverty Eradication Projects. (R133. 1m in 2008 and R92
2.1 Committed Poverty Eradication Projects (R133.1m in 2008 and R92.4m in 2007)
Committed projects of R133.1m compared to a budget of R89m for the current year are split as follows per year of approval by the NDA Board.
Projects are recognized as an expense and liability when a contract is signed by both recipient of funds & the NDA.
Year of Approval
2006 and Prior
2007
2008
Total
Committed in current year
No of Projects 21 58 55
134
57% (R76.1m) of the value of commitments relates to projects approved in years prior to 2007/08 FY.
In the 2007/08 FY the Board approved projects of R89.9m of which only R56.9m was committed in the current FY.
On average it takes it takes months for a contract to be signed after the project has been approved by the Board.

17. 2.2 Staff Costs (R38.3m in 2008 and R33.3m in 2007)
Staff costs are split per division as per Note 12 on Page 71 of the Annual Report
Staff costs increased by 15% of which 7.5% was attributable to annual increase in salaries and the rest made up of increases in staff recruitment.
These studies were outsourced to External Service Providers

18. Consulting fees increased by 10%
Consulting & Professional Fees (R13.6m in 2008 and R12.3m in 2007)
Consulting fees increased by 10%
between 2007 and 2008 FY
The largest contributor to the 10% increase was spending by the Research unit
The increase in Research resulted from 3 major studies commissioned in the current year, namely:
Provincial Poverty Profile
Municipal Poverty Profile
State of Civil Society Organisations

19. 2.4 Ineligible Expenditure (R5.6m in 2008 and R Nil in 2007)
A one-off expenditure relating to expenditure incurred by EU funded projects.

20. 3. ANALYSIS OF MAJOR BALANCE SHEET ITEMS
3.1 The cash holdings of R278.7m is made up as follows:
Cash holdings for the NDA R264m
Cash held on behalf of the EU R14m
* The cash holdings of R264m is broken down as follows:
Amount due to Projects per Projects Liability Note 18 R191.1m
Balance of IDT development funds R40.9m
Funds set aside for Projects approved R33m
by the Board but not yet committed
The cash held on behalf of the EU is made up of the balance of uncommitted funds in terms of the EU funding agreement.
These funds will be refunded to the EU in the 2008/09 FY.

21. 3.2 Fixed Assets (R4.1m in 2008 and R2.8m in 2007)
The increase of R1.4m is mainly attributable to:
acquisition of Computer and Photocopying equipment
increase in Depreciation due to the acquisition of new assets
3.3 Intangible Assets (R1.6m in 2008 and R Nil in 2007)
this relates to the cost of the development and implementation of the ERP system which was implemented in September 2007

22. Committed Projects (continued)…
This increase is mainly attributable to the following:
Increase in commitments of R41m (R92m:2007 and R133m:2008)
Decrease in project write backs of R6.3m (R6.8m : R0.6m:2008)
Project Liability by Province
 Provinces EC FS GP
KZN LI MP NW NC WC
Total
Project Liability
% split
12% 7% 9%
13%
17%
11% 8%
100%
No. of projects per province 70 28 37 39 91 52 25 43
422
The average cycle of a project is 24 months.

23. 4. Committed Projects (R196m in 2008 and R141.7 in 2007)
Projects Liability increased by R54m (38%) year on year.
This increase is mainly attributable to the increase in commitments
from R92m in 2007 to R133m in 2008.
The commitments are aged as follows by year of approval:
Project liability by Board approval date (Projects Age Analysis)
 Year approved by Board
Prior to 2006
2006
2007
2008
Total
Project Liability
% split
29%
14%
30%
28%
100%
No. of projects
194 83 82 63
422
The average cycle of a project is 24 months.

24. CONCLUSION
The NDA received an unqualified audit opinion in the year 2007/08
The Auditor General reported a matter of failure to comply with section 53 (1) of the PFMA by the NDA – The NDA has in the current year complied with the above section as we submitted the budget by September 2008.
On other matters of governance reported by the Auditor General, the NDA has put mechanisms in place to ensure that those will not be repeat findings in the 2008/09 audit.

25. Questions & Comments
THANK YOU.