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Independent Development Trust Presentation to Portfolio Committee for Public Works: 200809 Annual Re

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Title: Independent Development Trust Presentation to Portfolio Committee for Public Works: 200809 Annual Re


1
Independent Development TrustPresentation
toPortfolio Committee for Public Works2008/09
Annual ReportOctober 2009
2
Content of Presentation
  • Compliance Statement
  • Opening Remarks
  • Statements Minister Chairperson
  • Trustees Report
  • Performance Report
  • Annual Financial Statements
  • Concluding Comments

3
Compliance Statement
  • In terms of Section 55 (1) (b) of the
    Constitution, the National Assembly must provide
    mechanisms to effect oversight of among other
    any organ of state.
  • Hence this account to the Portfolio Committee on
    the performance over the 2008/09 financial year
    and application of public resources with which
    the IDT has been entrusted, is being presented in
    respect of the Committee's oversight
    responsibility and to enable the Committee to
    recommend the IDTs Annual Report to Parliament

4
Statement Executive Authority
  • Expectation that public institutions have
    mastered and institutionalised the PFMA
  • Extremely proud of the IDT achieving 7th
    successive unqualified audit which sets the IDT
    apart and a leader.
  • Endorse the IDT Annual Report rooted in
  • Quarterly reports accountability tracking
  • Witnessed the impact of the IDTs performance and
    the impact thereof on peoples lives
  • Confidence in the value of the IDT as a
    development agency in advancing the national
    social policy agenda

5
Statement Chairperson
  • IDT operates in a dynamic changing
    environment.
  • Noted key changes which impacted over the
    reporting period, e.g., Executive Authority
    changes in the Board
  • Board approved the IDTs 1st long term Strategic
    Vision
  • Performance challenges, largely out of the
    organisations control, were timeously reported
    to the Board and corrective actions put in place
  • Confidently present the 2008/09 results

6
Trustees Report
7
Trustees Report
  • Compliance Statement Page 9
  • Mandate of the IDT (Page 9-10)
  • Retained primary mandate to support government
    with the eradication of poverty despite changes
    of focus and interpretation
  • In 2008/09 the IDT introduced a focus on women
    in recognition of the increasing feminisation of
    poverty and the effectiveness of women as change
    agents
  • Corporate Governance (Page 10) sound corporate
    governance is integral to the IDTs business
    enterprise and ethics
  • Executive Authority Complied with provisions of
    the Shareholder Compact.
  • Reporting to Parliament Presented 2009/11
    Corporate Plan

8
Corporate Governance Board of Trustees
  • Board Structure (page 11-12)
  • 12 independent, non-executive Trustees, 10 by
    public nomination 2 by Minister
  • Assumed office 1 October 2007
  • Names of Trustees
  • Responsibilities (page 13)
  • facilitated by Board Committees.
  • Board Charter
  • Reserved specific matters and other delegated to
    CEO
  • Functioning of Board (page 15) Attendance

9
Board Committees Page (17-23)
  • Outline of functions of Committees, main
    achievements, dates of meetings and membership
  • Audit Committee Same members
  • Finance Committee
  • Strategic Planning and Programmes Committee
  • Human Resources and Corporate Services Committee
  • Remuneration Committee

10
Financial Overview (Page 25-29)
  • Financial Performance Information
  • Sound financial management which emphasises
    internal controls and assures stakeholders that
    assets are safeguarded and transactions executed
    according to generally accepted business
    practices and adopted policies
  • Resources strictly applied in accordance with
    budget allocations approved by the Board
  • Actual overhead expenditure was R 332.3 m
    representing a variance of 0.85 under-spending
    for the reporting period
  • R150m of IDTs funds approved for poverty
    eradication programmes (Mud Schools programme
    in particular). R 94m was spent and the rest will
    be spent/concluded in 2009/10
  • Renewed focus on cost containment, improving
    efficiencies, working capital improvement and
    managing capital expenditure

11
Financial Overview (Page 25-29)
  • Undertook a comprehensive review of programme
    recoverables
  • Strict verification and ageing of all programme
    related transactions up to an including the
    2005/06 financial year.
  • Results tested against strict criteria to
    determine reasonable expectations to recover such
    costs from clients
  • Based on this evaluation, the Board approved an
    amount of R57.7m to be written off in order to
    appropriately restate the balance sheet item in
    respect of total programme expenditure of R 3
    billion over the period (2005-2009)
  • Does not represent wasted or lost resources as
    contracts were delivered to the satisfaction of
    clients
  • Exposure of this nature is unlikely to recur as,
    since 2008, payments for services are drawn down
    directly from dedicated client-contract bank
    accounts

12
Financial Overview (Page 25-29)
  • Investment of main fund and other sources of
    income
  • Main source of funding income from investment
    of main fund. Income partially applied to fund
    operations
  • Capital applied in poverty eradication projects
    and thus gradually diminishing
  • At 31-Mar-09 balance R 948m
  • Uncertainty in global markets, results in high
    volatility
  • Fund performance monitored by an Investment
    Committee which contributed to revenue receipts
    exceeding budget targets by 48 notwithstanding
    market fluctuations
  • Increased capacity and commitment to recover
    costs from public sector (and few private sector)
    programmes
  • Developed a Costing Model to identify cost
    drivers, have a sound basis for determining
    management fees and baselines for future
    financial planning

13
Financial Performance
14
Financial Overview (Page 25-29)
  • Long-Term Sustainability
  • IDT established with a R 2bn government grant in
    1990
  • Until 2005, investment income from the balance of
    this grant covered operational expenses
  • Growth in business and volatility in market
    impacting on interest rates has resulted in a
    growing margin between expenditure applied and
    revenue since 2006
  • Capital base is depleting challenging the
    financial sustainability of the IDT post the
    2011/12 financial year
  • IDTs long-term Strategic Vision is aligned to
    social policy agenda (MTSF) as the development
    agency of choice.
  • Thus IDT has recorded its future funding
    requirements with National Treasury

15
Risk Management (Page 29-31)
  • Risks Management embedded in IDT's business
    processes
  • Key players
  • Accounting Authority Audit Committee in
    particular
  • Executive Management
  • Risk Champions
  • See Risk Management Infrastructure on Page 31

16
Performance Report
17
CEOs Report (Page 35-45)
  • 2008/09 Coincided with the end of the CEOs 1st
    five-year term and start of 2nd term
  • IDT able to effectively balance remaining focused
    on what has been planned with being responsive
    within a changing environment
  • 2008/09 Scorecard represents a combinations of
    KPIs and targets completely in the control of the
    IDT and those which are integrated with and
    dependent on inputs and cooperation of client
    departments
  • Summary
  • Achieved 11 (73.4) of 15 KPI and targets, of
    which 10 (66.7) were exceeded
  • Underachieved 4 (26.6) all of which were not in
    IDTs control

18
CEOs Report (Page 35-45)
  • Development Impact accounted through 3 examples
  • Social Infrastructure Delivery
  • Empowerment of Women
  • Knowledge production
  • New Opportunities responsive and flexible
    development agency, e.g., Xenophobia and
    intolerance Project Re Tlisa Diphetoho EPWP2
  • Looking ahead 2010/30 Strategic Vision which
    positions the IDT as the as the development
    agency which will drive transformation and
    innovation in supporting government with the
    design and implementation of a long-term
    comprehensive integrated anti poverty strategy.
    IDT funds will be solely invested in
    community-based sustainable development and anti
    poverty programmes, and the public-mandated work,
    such as the social infrastructure and social
    development programmes, will be delivered on a
    full cost recovery basis.
  • IDT Team
  • ..\..\..\BOARD\2009\MAY 2009\2008-09 PERFORMANCE
    SUMMARY DRAFT 6.doc

19
CEOs Report (Page 35-45)
  • Social Infrastructure Delivery
  • 83 of Turnover Social infrastructure delivery,
    largely delivered in rural South Africa, e.g., EC
    39.6 KZN 22.8. Thus supported government
    with the reduction of infrastructure backlogs in
    historically marginalised areas.
  •  Concluded and handed over eight (8) schools
    (Eastern Cape, Mpumalanga and Kwazulu-Natal)
    which were constructed with IDT funds as part of
    the Eradication of Mud Schools and Undesirable
    Structures Programme. Other outcomes of this
    specific programme
  • 24 contractors engaged on the projects, 21 (88)
    were women contractors.
  • Constructed 116 classrooms providing learners
    with first-time access to decent facilities.
  • All schools were provided with computer
    laboratories furniture and solar power where
    there no electricity is available and pre-school
    facilities at the primary schools. Such
    facilities are not typically provided at state
    schools thus these rural learners have the access
    to the infrastructure for optimal learning and
    growth.

20
CEOs Report (Page 35-45)
  • Social Infrastructure Delivery cont.
  • The IDT did not fully meet its programme
    expenditure targets because we were not provided
    with the funds to do so. Notwithstanding this
    challenge the IDT achieved R1.313 billion (88)
    against a targeted R1.5 billion, which in real
    terms represents a 13 increase on the previous
    years achievement of R1.167bn. The development
    impact of this programme expenditure includes
  • R632.5m of programme expenditure was spent on
    local contractors and labour, which includes
    R450m on women contractors
  • 53 581 job opportunities created of which 71
    were women and,
  • 2 195 persons received technical training and a
    further 13 259 basic life skills.
  •  Thus the IDTs model of social infrastructure
    delivery, which is grounded in labour intensive
    methodologies and the empowerment of local labor
    and contractors, has meaningfully impacted the
    individuals who participated in the programme as
    well as their households.

21
CEOs Report (Page 35-45)
  • Empowerment of Women
  • Introduced a Contractor Development Programme
    with the objective to meaningfully contribute
    towards the advancement and empowerment of
    disadvantaged communities, and women in
    particular, by
  • providing opportunities to existing contractors,
    as well as emerging entrepreneurs in the building
    and construction industries
  • developing a pool of capable, highly skilled
    contractors, and women in particular, able to
    compete with the best in sector and to benefit
    from the substantial budget available for
    infrastructure development and,
  • Creating sustainable and self-sufficient
    contractors able to run profitable businesses.
  •  Target 45 women contractors but registered 59
    participants
  •  25 women contractors were up-scaled on grading
    system of the Construction Industry Development
    Board as a result of contract values of the work
    they were awarded by the IDT.

22
Structure and Business Practice (page 53-59)
  • Structure
  • Operational model combines centralised systems,
    process, policies and functions with
    decentralised operations, which informs the
    structure
  • Innovations and operations of the four (4)
    Business Units
  • Office of the CEO
  • Development Programmes Services
  • Corporate Services
  • Financial Services
  • Human Resources Management Report (Appendix 1)
    Page 109-117)

23
Annual Financial StatementsPage 61-106
24
Auditor Generals Report (Page 65-68)
  • The IDT received its seventh consecutive
    unqualified audit report for the year ended 31
    March 2009.
  • In my opinion, the financial statements present
    fairly, in all material aspects, the financial
    position of the IDT as at 31 March 2009 and its
    statement of comprehensive income and its cash
    flows for the year then ended, in accordance with
    the Statement of Generally Accepted Accounting
    Practice and in a manner required by the PFMA.
    Without qualifying my opinion, I draw attention
    to the following matter
  • The impairment of programme recoverable was
    highlighted as an Emphasis of Matter due to its
    value
  • Material amendments resulting from the audit were
    reflected as an Other Matter

25
Financial Overview
  • The financial statements fully compliant with SA
    GAAP (IFRS).
  • Expenditure base exceeds revenue generation
    capacity.
  • Revenue generating capacity volatile due to bonds
    in investment portfolio.
  • Deliberate thrust to increase cost recoveries on
    managed infrastructure programmes.

26
Concluding Remarks
  • Proudly and confidently present the 2008/09
    year-end results to the Portfolio Committee.
  • Aware of the fact that the Committee might not
    have had the chance to witness the IDT at work
    during its Oversight visits
  • As is evident from the map at the front of the
    report, the IDT has clear and definite footprint
    in all provinces. Hence, we would like to invite
    the Committee to
  • Visit the IDT projects during the current year,
    and
  • Join us with the public presentation of the
    2008/09 Annual Report in Tzaneen on 26 October
    2009

27
Thank youThembi Nwedamutswu Chief Executive
Officerthembin_at_idt.org.za
www.idt.org.za
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