seda 2014/2015 performance report briefing to the portfolio committee on small business development...
TRANSCRIPT
1
Seda 2014/2015 Performance Report
Briefing to the Portfolio Committee on Small Business Development
15 October 2015
Mr Lusapho Njenge, Seda CEO (Acting)
2
• 2014/2015 Auditor-General Opinion• Seda’s Delivery Network as at end March 2015• Seda Staff Complement as at 31 March 2015• Performance Highlights • Performance Information by Strategic Objectives • Strategic Indicator Trends • Statement of Financial Performance • Year to date Financial Performance (April to August 2015)• Seda and Stp Actual Funding and ENE Allocation• Focus Areas for 2015/2016
Presentation Outline
3
• Unqualified Audit Opinion on Annual Financial Statements sustained for seven consecutive years.
• No material findings on the Annual Performance Report concerning the usefulness and reliability.
• No non-compliance to applicable laws and regulations. • No matters to report under Corporate Governance. • No findings pertaining to procurement/Supply Chain
Management. • Reduction in number of internal control deficiencies in
ICT. • Financial health of Seda was evaluated and found to be
exceptionally healthy.
2014/2015 Auditor-General Opinion
4
Seda Delivery Network at 31 March 2015
Province
Seda Branches
Seda Satellite Offices
Seda Supported Incubators
Co-location Points
Mobile Units
Info Kiosks
EC 5 0 9 5 3 6
FS 5 3 1 0 5 3
GT 4 0 16 7 0 6
KZN 6 0 11 0 2 1
LP 5 0 2 0 3 1
MPU 5 0 4 16 0 14
NC 5 0 1 0 2 3
NW 5 0 1 5 4 6
WC 3 12 3 0 0 13
TOTAL 43 15 48 33 19 53
5
Number of Staff Members
Contract Staff
Number of Vacancies
Total Posts
Vacancy Rate as a % of Total Posts
National Office
131 4 40 175 22,86%
Provincial Network
409 18 63 490 12,86%
Total 540 22 103 665 15,49%
Seda Staff Complement at 31 March 2015
6
• Service delivery achievements (target in brackets): • 99% (93%) client satisfaction levels with quality of Seda
services. • 63% (52%) of assisted clients indicated an increase in
turnover.• 43% (33%) of assisted clients indicated an increase in
number of people employed.• Payments over R400 million have been facilitated by the
SMME Payment Assistance Hotline since inception.
Performance Highlights
7
• Service delivery achievements (target in brackets): • 3,016 (1,710) clients supported by the Seda Technology
Programme (Stp).• 1,963 (1,650) direct jobs created by Stp.• 173(127) small businesses supported through conformity
assessments and product testing.• 71,02% of total funds received utilised in the Seda
delivery network. • R 6,8 million leveraged and utilised from delivery partners
during the financial year, with additional in-kind contributions.
Performance Highlights
8
Performance Information by Strategic Objectives
Strategic Objective 1: Enhance the competitiveness and capabilities of small enterprises through co-ordinated services, programmes and products.
Outcome Performance Measure or Indicator
Annual Target
Annual Achievement
Reasons for variance Measures taken to rectify
Client satisfaction ensured
% of surveyed clients satisfied with quality of Seda services
93% 99% High performance is attributed to the efforts and quality of business development service providers and to the improved project management
None
Client business performance improved
% of surveyed SMME clients whose turnover has increased
52% 63% Increased market access enabled the clients to increase their turnover
None
% of surveyed SMME clients whose number of employees has increased
33% 43% Agriculture and service industry contributed to employment creation by SMMEs
None
9
Performance Information by Strategic Objectives
Strategic Objective 2: Ensure equitable access to business support services
Outcome Performance Measure or Indicator
Annual Target
Annual Achievement
Reasons for variance Measures taken to rectify
Client reach improved
Number of clients working with
12,000 10,697 Underperformance due to capacity constraints during the course of the year and accreditation of Business Advisors on appropriate diagnostic tools.
Recruitment and accreditation to be prioritised during the first quarter of 2015/16.
Rural enterprise development enhanced
Number of supported secondary cooperatives
27 35 Continued support of secondary cooperatives from previous year in line with Seda’s delivery model.
None
Cost sharing with delivery partners maintained
Value of service delivery costs covered by delivery partners
R 10 mil
R6,8 mil Partners that have contributed towards Seda’s delivery costs in the past had to reduce or contributions as a result of financial constraints.
Continue to work with existing partners and source new partners.
10
Performance Information by Strategic Objectives
Strategic Objective 2: Ensure equitable access to business support services
Outcome Performance Measure or Indicator
Annual Target
Annual Achievement
Reasons for variance Measures taken to rectify
Cost sharing with delivery partners maintained
Number of partnerships operational
68 49 Financial constraints experienced by potential partners have had an adverse impact on entering into partnerships. A number of partnerships initiated during the year could not be finalised.
Partnerships for the next financial year will focus on enterprise and supplier development, to leverage from the BBBEE codes.
11
Performance Information by Strategic Objectives
Strategic Objective 3: Strengthen the organisation to deliver on its mission
Outcome Performance Measure or Indicator
Annual Target
Annual Achievement
Reasons for variance Measures taken to rectify
Cost efficiency improved
% of direct service delivery costs versus total delivery costs
71% 71.02% Minor deviation None, in line with Seda’s principle to utilise more funds on direct service delivery.
% of deviations of actual expenditure from approved budget
5% 7.31% Under expenditure onpersonnel costs due to moratorium placed on filling of vacancies due to the re-alignment project.
Re-alignment vacancies were filled in 4th quarter of the financial year.
12
Performance Information by Strategic Objectives
Strategic Objective 3: Strengthen the organisation to deliver on its mission
Outcome Performance Measure or Indicator
Annual Target
Annual Achievement
Reasons for variance Measures taken to rectify
Organisational staffing improved
Vacancy rate 14% 15.49% Higher than targeted percentage due to re-alignment project the organization embarked on.
Vacancy rate should reduce to acceptable levels by end of the first quarter.
Seda image improved
Annual Stakeholder Forum (ASF held)
End September 2014
End September 2014
None None
Number of updates on the SMME sector produced.
2 1 Financial constraints limited the number of studies Seda could participate in during the year.
Seda will look at partnering with other institutions.
13
Performance Information by Strategic Objectives (Stp)
Strategic Objective 1: Enhance the competitiveness and capabilities of small enterprises through co-ordinated services, programmes and products.
Outcome Performance Measure or Indicator
Annual Target
Annual Achievement
Reasons for variance Measures taken to rectify
Incubation support enhanced
Number of incubators supported
48 48 None None
Client satisfaction ensured
% of clients satisfied with the quality of Seda services
70% 76% Implementation of measures to deal with areas of dissatisfaction identified during the previous
None
Client business performance improved
Number of jobs created
1,650 1,963 Manufacturing Construction and Agriculture sector, business cycle contributed to high performance overall
None
14
Performance Information by Strategic Objectives (Stp)
Strategic Objective 1: Enhance the competitiveness and capabilities of small enterprises through co-ordinated services, programmes and products.
Outcome Performance Measure or Indicator
Annual Target
Annual Achievement
Reasons for variance Measures taken to rectify
Client business performance improved
Number of clients supported
1,710 3,016 Increase in number of incubators and intake of new clients at established incubators contributed to the over performance.
None
Technology transfer programme implemented
Number of clients assisted
63 42 Insufficient funds available to assist qualifying clients.
Mobilise for more resources to be availed to Seda’s high impact programmes
Conformity assessment and product testing programme implemented
Number of clients supported
137 161 The number of requests declined in the third quart due to the short trading period. A number of audits have been initiated in the fourth quarter. Most audits are scheduled for the fourth quarter.
Finalisation of audits in progress during the first quarter of 2015/16/
15
Performance Information by Strategic Objectives (Stp)
Strategic Objective 1: Enhance the competitiveness and capabilities of small enterprises through co-ordinated services, programmes and products.
Outcome Performance Measure or Indicator
Annual Target
Annual Achievement
Reasons for variance Measures taken to rectify
Training on national and international standards conducted
Number of clients trained
510 696 Increased demand from Seda Branches
None. In line with Seda’s strategy of also servicing the upper end of the SMME sector.
Systems implementation support provided
Number of clients supported
32 44 Increase in the number of applications from established clients and incubates.
None. In line with Seda’s strategy of also servicing the upper end of the SMME sector.
16
Strategic Indicator Trends
2009/2010 2010/2011 2011/2012 2012/2013 2013/2014 2014/20150%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
91%93%
97% 98% 97%99%
28%
37%
56%
63%67%
63%
16%
27%
32%35%
40%43%
% of clients satisfied with quality of Seda services % of surveyed clients whose turnover increased % of surveyed clients whose number of employees increased
17
Strategic Indicator Trends
2009/2010 2010/2011 2011/2012 2012/2013 2013/2014 2014/20150
500
1000
1500
2000
2500
3000
3500
1283
1479
1845
2282
1587
3016
1620
893
1517
2301
2900
1963
Number of clients supported - Incubation Programme Linear (Number of clients supported - Incubation Programme )Number of jobs created - Incubation Programme Linear (Number of jobs created - Incubation Programme )
18
Statement of Financial Performance
Revenue 2014/2015 (R mil) 2013/2014 (R mil)
Parliamentary Grant Seda
Seda Technology Programme (STP)
624,650498,282
126,368
576,979457,764
119,215
External earnings 71,836 51,779
Interest received 16,337 12,354
Gain on sale of assets 0,529 -
TOTAL REVENUE 713,352 641,112
TOTAL EXPENSES Administrative and other Costs
Personnel Costs
Programme and Project Costs
645,243147,863
230,924
266,456
621,302150,902
226,944
243,456
SURPLUS / (DEFICIT) FOR THE YEAR68,109 19,810
19
Year to date Financial Performance(April to August 2015)
Revenue Budget(Rmil)
Actual(Rmil)
Difference
Grant Allocations 318,50 318,50 -
External earnings 45,36 23,97 21,39
Interest received 4,17 4,91 (0,7)
TOTAL REVENUE 368,03 347,38 20,66(5.61%)
EXPENSES 300,51 260,37 40,14 (13.36%)
Note 2
Note:
1. The total revenue budget for the year is R693,09 million and total projected expenditure for the year is
R692,58 million.2. Under expenditure is due to annual salary increase from 1 April 2015 not effected yet. Assets of 2015/16
not acquired yet. Timing difference from commitments of programme and project related costs and actual payments.
20
Seda and Stp Actual Funding and ENE Allocation (R mil)
FY 12/13 FY 13/14 FY 14/15 FY 15/16 FY 16/17 FY 17/18 FY 18/19Actual Funding Received Estimates of National Expenditure
0
100
200
300
400
500
600
700
427.6457.8
498.3478.2 481.5
583.2
618.1
139.3119.2 126.4 132.2 139.2 146.1 153.5
Seda Stp
21
Focus Areas for 2015/2016
To focus on outcomes (job creation, increase in turnover and sustainability), the following are key focus areas/themes for the 2015/16 financial year:• Review of programmes in line with DSBD mandate and government priority
areas.• Roll out of Small Business incubation.• Focused attention on cooperative support, including collectively owned large
scale projects.• Implementation of the Gazelles programme to identify and profile high
performing entrepreneurs. • Facilitation of timeous payment of SMMEs.• Public/Private Partnerships.• Directing specific interventions at medium sized enterprises and cooperatives
(i.e. employing between 21 and 200), such as access to markets, mentorship and coaching, supplier development, technology transfer.
• Repositioning of support functions from a reactive role to a proactive, strategic support role, especially in areas such as ICT, advocacy and lobbying, and human capital.