NYDA’s R133m in irregular expenditure

The National Youth Development Agency (NYDA) has racked up irregular expenditure to the tune of R133 million over the past financial year, routinely flouting the rules governing the procurement of goods and services. The agency, charged with promoting youth development by funding and mentoring young entrepreneurs, has also, since its establishment in 2009, made loans to the value of R161m which the auditor-general has said are unlikely to be repaid. According to Auditor-General Terence Nombembe’s report, the agency repeatedly flouted national Treasury supply chain management regulations, including not inviting competitive bids when sourcing goods and services worth more than R500 000. For goods and services below R500 000, it simply did not obtain quotations.

Where quotations were obtained, contracts were awarded to bidders who did not submit a declaration on whether they were employed by the state or connected to any person employed by the state, flouting another regulation. “Deviations were approved by the accounting authority even though it was not impractical to invite competitive bids,” the auditor general noted. The agency is registered in terms of the National Credit Act as a credit provider, but did not submit its annual report to the National Credit Regulator by the stipulated deadline, and thus did not meet the requirements of section 52(5)(f) of the credit act. Further, the agency did not reflect its registered status and registration number on all its credit agreements and communications with consumers, as required by the act.

Nombembe found the agency’s leadership had not exercised “adequate oversight responsibility” regarding its financial reporting and compliance with laws and regulations. However, the auditor general gave the agency an unqualified audit opinion, meaning its bookkeeping was an accurate reflection of its financial affairs. The public protector is still investigating whether the hosting and funding of the World Festival of Youth and Students in 2010 was within the agency’s mandate. Agency chief executive Steven Ngubeni, the acting accounting officer for the agency, reacted with surprise to questions from Weekend Argus. “The fact that it [the auditor general’s report] is out there raises many questions. Just because it’s been published, doesn’t mean it’s public,” he said.

The annual report was tabled in Parliament on Friday. In his report as the accounting authority Ngubeni says the main contributor to irregular expenditure was the “decentralisation of the procurement of goods and services to divisions, with the supply chain management unit only playing an advisory role for the period April 1, 2011, to October 31, 2011”. Travel and accommodation expenses were another contributing factor.