PRESENTATION OVERVIEW

1. Independent Development TrustPORTFOLIO COMMITTEE ON PUBLIC WORKSPresentation Draft Corporate Plan 2012/1320 March 2012

2. PRESENTATION OVERVIEW 1. REVISITING THE IDT STRATEGIC PLAN 2. PROGRAMMES 3. CORPORATE GOVERNANCE 4. BUSINESS CASE AND ANNUAL PERFOMANCE PLAN 5. FINANCES, FUNDING MODELS, and RISKS 6. LEGISLATIVE AND POLICY OVERVIEW 7. RECOMMENDATIONS ______________Q&A and Closure______________

3. Revisiting and reconfirming the IDT Strategic Plan as submitted to parliament

4. The IDT • PURPOSE: To support and add value to the national development agenda. We do that by deploying our resources in the initiation and delivery of innovative and sustainable development programmes, which make a measurable difference in the levels of poverty and underdevelopment. • VISION: “… to be the leading knowledge-based development agency” • MISSION: “The IDT, together with strategic partners, will enable poor communities to access resources, recogniseand unlock their own potential and continuously improve their quality of life”

5. OUR GOALS FOR THE MTEF... • Contribute to the realisation of the SONA on the character and content of the state which is defined as an “administration…that …knows where people live, …understand their needs, and respond faster.” • Advancing the social policy objectives through the implementation of a diverse range of programmes across national departments and all spheres of government. • Contribute to organisational sustainability and ensure 10th unqualified audit.

6. OUR GOALS FOR THE 2011/12, 2012/13, 2013/14 FINANCIAL YEARS...

7. OUR GOALS FOR THE 2011/12, 2012/13, 2013/14 FINANCIAL YEARS...

8. 3rd Quarter Financial Performance Trends

9. Expenditure per programme type: 3rd Quarter 2011/12

10. Improved alignment with government priority outcome areas

11. Programme Management: Selected issues www.ikhwezifarms.co.za

12. PROGRAMMES OUTLAY

13. Some policy level reflections • Infrastructure planning must be integrated with IDP’s and provincial plans • The current invoice based transfers is working to the detriment of the IDT and service providers, should reconsider tranche type payments • Funding for the costs of social facilitation so as to contribute to integrated outcomes based interventions • Procurement and or recruitment plans as well as maintenance plans are critical • Community involvement in identification, planning, implementation, and maintenance of infrastructure programmes critical for sustainable development • Create lessons learnt and linkages between NSS, CRDP, Veterans

14. CORPORATE GOVERNANCE

15. Staff Establishment Last Year this time 25

16. Head Office Functional Structure: National Treasury Business Case August 2011 A functional design was proposed that best addressed the design principles and was presented in the Business Case submitted to National Treasury in August 2011 Functional structure as presented in National Treasury Business Case

17. Regional Head X 5 - 9 Recommended “To-Be” Structure of New IDT: Key Regional Functions mapped into Positions The value chain was then unpacked to a positional structure at regional level v Admin & Finance Manager Operations Manager Strategy & Partnership Manager Programme Manager: Community Empowerment Programme Manager: Institutional Support Programme Manager: Programme Delivery Team Leader • Strategy development • CRM • Resource Mobilisation • Political Liaison • Business Development • etc Support Functions Contract Management PMU Team at Regional Office Project Accounting PMU at Regional Office deploys teams to Hubs and Programmes Implications Human Capital • Regional teams operate as flat teams that mirror Operations Support at H.O. • Main team resides at regional office while programme funded teams on the ground are able to grow based on programme growth • Each region has support functions that are specific to its size/complexity of operations Core Operations SCM Support Functions IT

18. Gender and racial spread

19. 2012/13 CORPORATE PLAN

20. “The defining feature of this administration will be that it knows where people live, understands their needs, and responds faster” President Zuma 2010 Rationale for Transformation Government Development Gap South Africa ranks 110th in the UN Human Development Index, just below Krygystan. SA’s gap between rich and poor i.e. Gini coefficient of 0.68 is the highest in the world, overtaking Brazil Donors/DFI’s DED DTI DOT DEA Private Sector Int Donors SA Donors DAFF DoH DHS Tourism National CSI Regional CSI National DFI’s Prov DFI’s CoGTA DWCPD DOL DBE NGO Sector DRDLR DWA DPW DSD Development Funding Space exists for single nation wide agency to bridge gap between government and communities by facilitating, coordinating and integrating holistic approach to development, focused on empowering people and supporting their institutions to enable communities to access and leverage programmes & services Development Gap Community Community Community Community Community Development

21. Given Gap and Journey Map the IDT in the Medium Term Shall… • Be a development agency that offers programme Management, Institutional Support, and Community Mobilisaton as well as development advisory services to all spheres of the public service as well as other development partners. Emphasis is on the eradication of chronic intergenerational poverty, especially among the rural poor. • Maintain its VISION of being “the leading knowledge based development agency” • Readjust its MISSION to “The IDT, together with strategic partners, will enable poor communities to recognise and unlock their own potential for sustainable development”.

22. Given Gap and Journey Map the IDT in the Medium Term Shall… • Maintain its values of : People Centred, Having Integrity, Professionalism, Accountability and being Visionary • Prepare Communities to receive, own, manage and sustain their own development through: • delivering Social Infrastructure where Social Infrastructure is seen as all the necessary measures, facilities and networks required for sustainable development in such communities

23. IDT’s response to the development gap • Head Office • Coordinates adaptive strategy; by facilitating regular best practice sharing and dissemination of learning • Fosters supportive corporation between regions; by providing benchmarking, M&E, impact Management and Knowledge Management, leading to innovative policy recommendations that ensure consistently improving delivery • Secures national/international support, resources and cooperation What we do Mobilise Communities… • Sustainable livelihoods • Asset based approaches Key Focus Areas Support Institutions… FS GP • Policy/planning support • Technical expertise EC Delivers Programmes… KZN • Strategy: Shift to community development • Services: Develop communities, support institutions and deliver programmes • Structure: Decentralised regions set strategy, implement local development, coordinated by HO • Programme planning • Delivery management “Butterfly” Transformation Scenario HO LIM Shares Knowledge… MPU • Action research • Learning & innovation Centres of Excellence Build Partnerships… NC NW WC • Stakeholder management • Resource mobilization

24. High-level service value chain 1 PARTNERSHIP WITH COMMUNITIES 3 40% PARTNERSHIP WITH GOVERNMENT, FUNDERS, SUPPLIERS AND COMMUNITIES 30% 30% 2 PARTNERSHIP WITH LOCAL GOVERNMENT

25. FUNDING

26. IDT Historical Financial Performance Historically the IDT has been operating unsustainably on a deficit budget since 2006, using the declining investment fund to top up the shortfall Rm R366m R81m R42m R-243m The IDT’s revenue in 2010/11 of around R123m (management fees of around R81m and investment income of about R42m) is not enough to offset expenditure of around R366m; leaving a loss of +/-R243m

27. What is the financial plan? The transformation of the IDT requires a recapitalisation by Government in order to invest in the development of communities The IDT will implement a cumulative R38.36bn of programmes on behalf of Government for communities over the 2011 – 2017 period. To do this requires a forecasted recapitalisation of R1.95bn

28. Funding streams • Treasury recapitalisation and: • Management fees to be increased significantly to an average of between 4.2 – 5% • IDT’s role legislated to ensure an allocation of funds • Access to donor funding via the TAU and other s • Public/Private Partnerships • Access to other sources of funding such as a revised delivery mechanism of the National Lotteries Distribution Funds

29. Funding streams However since there is currently no treasury allocations approved survivalist scenario….

30. Scenarios for 2012/13

31. Implications of the scenario • The IDT will have about R2million in the 2014/15 financial year assuming it raises the business at or above the projected management fees • Going concern status will change and AG may have to comment on it • To get there about 130 employees may have to be retrenched over the next two years • Drastic reduction in resources invested in community development • Major downscaling of the community driven development orientation component in the programme delivery processes • Dropping of the institutional support and community development oriented targets for example support to civil society organisations such as SAWID, Local Authorities and Community Based Organisations, • Downscaling of the measures that seek to position the IDT as the leading knowledge base development agency for example the Development Week and other knowledge generation and sharing initiatives.

32. Implications on Building Empowered and Cohesive Communities

33. Implications on Building Empowered and Cohesive Communities

34. Implications on integrated social infrastructure delivery

35. Implications on integrated Social Infrastructure

36. Selected Transformation Risk Matrix

37. Selected Transformation Risk Matrix

38. LEGISLATIVE ANALYSIS

39. The Brief • The IDT has submitted its Business Case to the DPW and the National Treasury • In the Business Case certain mandates are given to the IDT, which include the delivery of a revised social infrastructure with the service offerings of (1) Community empowerment, (2) Programme management and (3) Institutional capacity building • The Business Case Document also identified the development gaps in South Africa leaning on the Review on DFI’s as undertaken by the National Treasury • In addressing these gaps it was argued that an enabling legislation would be required to enable the IDT to function • It is the Minister’s expectation that the IDT would provide a rationale for the need for such legislation so that the policy unit can evaluate the need and process the policy outputs

40. The History • Phase I: “Support Equity” – The ushering in of a new South Africa was characterised as a divided society which required an equitable redistribution of the country’s wealth (amongst others). Consequently, the IDT’s early history concentrated on grant funding development actors as the Government focused on establishing an equitable policy framework. During the period, 1990 – 1998/9 the IDT expended R2.8bn on 8, 800 projects country-wide. • Phase II:“Service Delivery” – Having laid the policy foundations for a new South Africa the emphasis on the rights based approaches created an increased demand for services. In March 1997, Cabinet endorsed a recommendation of a Cabinet Advisory Committee that, inter alia, "The IDT must be transformed into a government development agency that will implement projects which are commissioned by government departments. It must cease to be a civil society organisation, an independent agency or a funding agency." Thus with the promulgation of the Public Finance Management Act (PFMA) in 1999 (Act No. 1 of 1999 as amended in 2010) the IDT was listed as a Schedule 2 Public Entity. At the time the organisation’s main fund stood at R1.3bn and the IDT was deemed financially sustainable along with other state owned entities (SOEs) listed as Schedule 2.

41. The History • Phase III: “Infrastructure Provision” - In recent years, taking advantage of the infrastructure focus the IDT has played an instrumental role as Government’s implementing agency for infrastructure provision in for the social sector (in the main), helping lay the platform for future growth. The IDT’s programme portfolio grew from R260m in 1998/99 to R2.5bn in 2010/11 and is projected at over R4bn in 2011/12 and has been effective in creating infrastructure oriented models of poverty eradication mainly targeting rural, marginalised and vulnerable communities.

42. Current Legislative Mandate The Constitution and the RDP • The Constitution and the Reconstruction and Development Programme are the founding documents for an all encompassing social contract, against which the IDT contextualises its development mandate and objectives. • Integration, coordination and a sustainable programme among all three spheres of government which would be delivered in partnership with civil society, business and state owned entities; • People centeredness; • Fostering of economic expansion and greater development as a way of ending endemic violence; and

43. Supportive International Commitments • International Covenant on Economic, Social and Cultural Rights remains relevant as advanced by resolution 41/128 of 4 December 1986 “on the Right to Development” • mutually reinforcing goals and objectives of global agreements and outcomes of major United Nations meetings and conferences including the World Summit for Social Development (1995, Copenhagen), the World Conference on Women (1995, Beijing), the Millennium Summit (2000, New York), and the World Summit for Sustainable Development (Johannesburg, 2002), Millennium Development Goals (MDGs), • African Union’s (AU) New Partnership for Africa’s Development (NEPAD); SADC Protocol on Gender and Development: the principles and objectives of the African Women’s Decade; and the Southern African Development Community’s (SADC) Regional Indicative Strategic Plan (RISDP) which also identify and explore communities of practice as a model for collective action.

44. Current Legislative and Policy Imperatives • South Africa’s legislative and policy framework takes into cognisance “the fact that the struggle to eradicate poverty and underdevelopment in our own country is fundamental to the achievement of our own national goal to build a caring and people centred society” • The Ten-Year Review of Governance which was reemphasised by the ‘Towards a Fifteen Year Review’ report showed that social infrastructure backlogs still existed, and that unacceptably high-levels of poverty remained in the country • The South African Government has reaffirmed its position with respect to prioritising holistic development and has restated its ongoing commitment to being a developmental state. Implicit in the adoption of the developmental state paradigm is the long term desire to reconfigure state-society-capital relations towards certain outcomes which locate the state at the centre of societal transformation.

45. Current Legislative and Policy Imperatives • Implicit in the adoption of this terminology is the pursuance of selected packages of policies which are directed at steering economic and social activity towards long term economic and social outcomes. • In the medium term these are expressed in government’s Medium-Term Strategic Framework (MTSF) as interspersed by the annually reviewed cluster based Programme of Action (POA). • The embedding of performance monitoring and evaluation into government’s planning approach, right down to a quarterly cycle, introduces greater agility, through ensuring that adaptation of plans in response to changes in the environment and past performance (or underperformance) takes place at regular intervals.

46. Historic Refinements on mandate • Presidential Decision 2 February 1990 establishes IDT, supported by July 1990 Cabinet decision and Deed of Trust establish IDT on 14 August 1994 • “It is in everybody's interest that a more acceptable and better balanced situation with regard to living and other standards should come about in South Africa with all possible speed…today’s Budget creates, by way of a transfer from the 1989-90 surplus, a fund specifically dedicated to the reduction of socio-economic backlogs in our country”Minister of Finance Barend du Plessis 14 March 1990 • “R2 000 million…is to form the basis of a Trust to be administered outside the direct ambit of the Government…The Trust is to be managed by Mr Jan Steyn, who is well known for his leadership in the field of socio-economic development” President F W de Klerk 16 March 1990

47. Historic Refinements on mandate

48. Corporate Form Options and analysis

49. The Trust If It isn't broken why fix it?

50. Advantages • A Trust is a relatively simpler form of legal entity, which has very few • In the case of the IDT, the beneficiaries are determinable through the description of its primary goal, which is to use its resources together with strategic partners, in ways which in the opinion of the Trustees will best serve to enable poor communities in the Republic of South Africa to access resources and recognise and unlock their own potential, so as to continuously improve their quality of life. • The IDT is already registered with the Master of the High Court as a trust under Registration No. IT669/91. • In relation to its governance structure, the IDT is already listed as a major public entity under Schedule 2 to the PFMA and is governed by Treasury Regulations