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The BRRR process is an important function of Parliamentary oversight of the Executive. Before writing the reports, each Portfolio Committee receives presentations from the Auditor General on the financial performance of the department it oversees, from the department itself and all the agencies/entities reporting to it. We then deliberate the information received and make observations and recommendations for the department to include in its budgeting and strategic planning for the following financial year, beginning April 1st.
I had to cut out quite a bit of what I wrote to stick to the 2 minute limit. Minister Zulu, who was supposed to be in the House for all the different parties' declarations, arrived late so didn't hear mine. Who knows, perhaps she will read this blog! Below is the unabridged version.
Toby Chance
BRRR
declaration
Department of
Small Business Development
3 November
2016
The
Department of Small Business Development has produced its first annual report
since it was formed in 2014. In the year ending March 2016 the department spent
R1,1 billion yet only met 42% of its targets.
It
received an unqualified audit opinion with findings relating to irregular
expenditure of R1,8 billion on a training programme.
The
department is still suffering from birth pains, trying to reconcile three organisational
structures simultaneously - the one originally planned in 2014, the one
approved by the DPME in 2015 and the one proposed in the programme review
conducted by an independent consulting firm which reported in November 2015.
The
Portfolio Committee has been unrelenting in its criticism of the department for
the slow implementation of many of its programmes, as reflected in its missing
over half of its KPIs. We are only due to receive the department’s response to
the programme review later this month – a full year after it was completed.
One
of the most glaring targets missed concerns the amendment of the National Small
Business Act of 2004. Public consultations have been slow and resulted in less
suggestions than the department would have liked, which reflects the minimal
publicity such consultations have received.
We
have been told that the amended Act will only be published for comment in the
second quarter of 2017.
Meanwhile,
the DA has been hard at work and my colleague Honourable Kruger has tabled his
Red Tape Impact Assessment Bill which we expect to be well received by the
Department and Committee.
Another
matter of concern was the late appointment of a CEO at SEDA, after nearly three
years of acting CEOs. This led to Seda drifting aimlessly without a leader and
persisting in measuring its performance by activities rather than outcomes and
impact. The new CEO was refreshingly frank in her assessment of SEDA’s
performance and we are expecting a major shake-up in the coming months.
Our
greatest criticism was reserved for SEFA, however, which reported a R380
million loss with impairments on its direct lending book of 67%. This is
unsustainable. SEFA management has devised a rescue plan but in the Committee’s
view only a wholesale restructuring and a merger with its sibling SEDA will
bring relief, not just to itself by to the millions of struggling small
businesses out there needing support.
It
is worth noting, as reported by the DG last week, that spending on SMEs by all
national government departments amounts to R15 billion. The department’s own
budget is a piddling 0,1% of total government expenditure.
Unless
Minister Zulu and her department get a grip on their mandate to create a
positive enabling environment for SMEs, it will continue to be regarded by the
business community and society at large as practically irrelevant to the
country’s goal of creating 11 million jobs by 2030.
The
DA supports this report.
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