Umsobomvu Youth Fund

1
Umsobomvu Youth Fund

• Presentation to
• Portfolio Committee on Labour
• 25 October 2005

2
Outline

• The UYF team
• Key issues from the audited financials
• Three years cumulative impact report
• Leveraging opportunities impact on commitments
• Impact data
• Commitments (contracted and non-contracted)
• Last years achievements
• Some highlights
• Target vs Actual
• Financial Information
• Challenges
• Consolidation of audited financials
• Access to UYF services especially rural areas
• Plans for 2005/2006

3
The UYF Team

• Adv. R Moloko Chairperson of the Board
• Ms D Motau Non-Exec. Director Chair of Audit
  Committee
• Mr J du Preez Non Exec. Director
• Mr T Wixley Independent Non Executive Member of
  Audit Committee
• Mr M Kekana Chief Executive Officer
• Ms J Law Chief Finance Officer

4
Approved Projected Commitments
Business Unit Approved Contracted to Date Projected 2005/6 Projected 2006/7 Total
Contact Information Counselling R 71,438,947 R 27,646,047 R 9,705,399 R 108,790,392
Skills Development Transfer R 200,865,417 R 92,417,674 R 79,011,134 R 372,294,226
Business Development Services R 83,608,396 R 52,093,146 R 33,954,299 R 169,655,840
Enterprise Finance R 394,745,248 R 33,682,384 R 36,182,384 R 464,610,017
Communications Advocacy R 10,434,505 R 8,606,946 R 6,606,946 R 25,648,396
Capacity Building Research R 5,471,576 R 4,112,542 R 4,112,542 R 13,696,661
IGM's Youth in LED R 11,117,421 R 10,258,536 R 10,258,536 R 31,634,493
  R 777,681,510 R 228,817,275 R 179,831,240 R 1,186,330,025
These projections are done based on the Assumption that some projects will be scaled back   These projections are done based on the Assumption that some projects will be scaled back   These projections are done based on the Assumption that some projects will be scaled back   These projections are done based on the Assumption that some projects will be scaled back   These projections are done based on the Assumption that some projects will be scaled back  
The projections do not include UYF's Operating Overheads   The projections do not include UYF's Operating Overheads   The projections do not include UYF's Operating Overheads      
The commitment figures are up to 30 September 2005   The commitment figures are up to 30 September 2005   The commitment figures are up to 30 September 2005      
5
Current Funding Situation

• UYF received R855 million from govt. in 2001.
• R780 million has been spent/committed
  contractually and will be paid out until 2006/7/8
• Taking out Auditors definition of commitment, UYF
  is actually fully committed. Auditors only
  recognize those commitments that have been
  reduced to writing
• To protect itself against non delivery UYF signs
  normally for 1 year only.
• However, commitment 3 years at least

6
Cumulative Report
7
Cumulative Report
8
Cumulative Report
9
Factors That Have Evolved

• Lack of capacity in rural areas, govt.
  departments/ NGOs affect time it takes to
  implement a programme. Often a new organisation
  has to be established (e.g. National Youth
  Service Programme in Limpopo/ Free State)
• Leveraging UYF resources with third parties has
  decreased the amount of funds needed from UYF to
  implement programmes. Raised R216 million in
  2004/5 from third parties.

10
For Year Under Review (highlights)

• Skills Development Transfer
• Funding of 26 FET Colleges
• More than 2000 youth receiving training in
  vocational skills
• Succeeded in getting SETAs and FET Colleges
  working together in an unprecedented way
• Assisting in integration of education and
  training
• Rural outreach achieved due to location of FET
  Colleges
• Strengthening of the Public Sector Education
  System

11
For Year Under Review (highlights)

• Skills Development Transfer
• Implementation of the National Youth Service
  Programme launched August 2004
• More than 10 000 youth involved in service
• The National Youth Service Unit established in
  less than 6 months
• Effectively mainstreamed NYSP

12
For Year Under Review (highlights)

• Business Development Support
• Expanded the Voucher programme into 9 from 5
  provinces
• Launched the Entrepreneurship Education project
  30 schools, 180 teachers in 3 provinces (7200
  learners)
• Implementing the National Venture Creation
  Learnership 3 FET Colleges running a pilot
  programme

13
For Year Under Review (highlights)

• Enterprise Finance
• First National Bank increased their exposure from
  R20million to R240million focusing on the same
  youth target. One of the largest Public Private
  Partnerships of its kind globally
• Our loan book surpassed the R100million and more
  than 1000 enterprises

14
For Year Under Review (highlights)

• Contact Information Counselling
• Implemented the Graduate Database as per
  President Mbekis directive in May 2004. The
  database is called Jobs and Opportunities
  Seekers Database (JOBS). Currently has 68 000
  CVs registered of unemployed graduates and
  placing into jobs since March 05
• Launched the SA Youth Card in Dec 04. Currently
  has 10 000 card holders 90 companies providing
  discounts. Associated Youth Magazine in Sunday
  Times (to include Sowetan, etc)
• 17 new centres were established (in total 69
  access points)

15
For Year Under Review
16
For Year Under Review
17
For Year Under Review
18
For Year Under Review (income statement)
19
Challenges

• Consolidation of Audited Financial Statements
• GAAP requires application of AC132 which
  stipulates the consolidation of underlying
  investments due to control (why control by UYF?).
  
• Materiality level of UYF set at R700 000 due to
  small amount of assets under control and amount
  lent as at year end
• Reporting requirements - burden on SMEs.
• To Address
• Adopting International Financial Reporting
  Standards (fair value reporting i.s.o
  consolidation)- IAS 28
• Eastern, Central Southern Federation of
  Accountants (SAICA is part of) proposes New Guide
  on Financial Reporting for SMEs. Will reduce
  reporting complexities
• SME regulatory burden more serious for young
  people

20
Challenges

• Access to UYF services
• Issue is about scale
• Scale limited because UYF was set up with short
  term in mind. Therefore need to sustain few
  programmes instead of a spray gun approach
• Growth limited due to unavailability of viable
  service providers in rural areas. Therefore,
  growth dictated by presence of Service Providers
• To address
• Propose to set up UYF outlets
• Outlets will also facilitate integration of
  services

21
Plans 2005-2006 (highlights)

• Support governments 6 growth target focusing
  especially on the second economy
• Skills development transfer
• Supporting more FET Colleges
• Support project consolidate (DBSA/ Dept of
  Provincial Local govt.)
• Launch the Graduate Development Programme (Social
  Capital for the unemployed graduate)
• Implement Service Programmes along volunteer
  lines e.g. teaching Maths and English, caring
  for orphans or child headed households

22
Plans 2005 - 2006 (highlights)

• Business Development Support
• Expand the Entrepreneurship Education project to
  more schools and provinces
• Increase Entrepreneurship Education for
  out-of-school youth
• Launch the Mentorship voucher product
  reinstatement of the company registration voucher
• Launch the Business Opportunities Support Service
  (linking youth to business opportunities)

23
Plans 2005 - 2006 (highlights)

• Enterprise Finance
• Expand the Cooperative Programme both for
  production coops and savings coops
• Franchise Cadet Programme (with Sanlam Business
  Partners)
• Training of loan officers (up to 500 to serve
  communities to improve access to finance)
• Implementation of pilot UYF outlets at least by
  March 2006
• Enable scaling up of UYF programmes and
• Integration of UYF services.

24
Thank You

• unleashing the potential of youth