DSBD 2023/24 Quarter Two Performance Report Presentation
The DSBD 2023/24 Quarter Two Performance Report presentation outlines the background and purpose, governance and compliance, overall performance summary, performance highlights, under-achievements, provincial breakdown, financial report, human resource report, anticipated sector outcomes, overall performance by programme, and recommendations. It covers details such as scheduled meetings, progress on output indicators, financial status, and corrective measures for the quarter.
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DSBD 2023/24 QUARTER TWO PERFORMANCE REPORT SELECT COMMITTEE ON TRADE AND INDUSTRY, ECONOMIC DEVELOPMENT, TOURISM, EMPLOYMENT AND LABOUR 31 OCTOBER 2023 PRESENTER: ACTING DIRECTOR- GENERAL
PRESENTATION OUTLINE 1 BACKGROUND AND PURPOSE 2 GOVERNANCE AND COMPLIANCE 3 OVERALL PERFORMANCE SUMMARY 4 PERFORMANCE HIGHLIGHTS 5 6 7 UNDER-ACHIEVEMENTS PROVINCIAL BREAKDOWN (DSBD Entities: sefa and Seda) FINANCIAL REPORT (OVERVIEW OF SPENDING TRENDS FOR Q2) HUMAN RESOURCE REPORT 8 9 NDP ANTICIPATED SPECIFIC SECTOR OUTCOMES (REVISED 2019-24 MTSF Priorities) OVERALL PERFORMANCE BY PROGRAMME 10 11 RECOMMENDATION 2
GOVERNANCE AND COMPLIANCE BACKGROUND AND PURPOSE 1.1. The report presents an overview of the activities of the Department of Small Business Development (DSBD) in line with the Public Finance Management Act 1 of 1999, Treasury Regulations 5.3 and 30.3, the Guidelines for National Quarterly Performance Reports, and the revised Framework for Strategic Plans and Annual Performance Plans. 1.2. The 2023/24 Q2 Performance Report reflects: 1.2.1 Progress made on the implementation of Output Indicators and Annual Targets set in 2023/24 Annual Performance Plan in respect of Quarter Two; 1.2.2 Actual output, and reasons for deviation; 1.2.3 Corrective Measures for 2023/24 Quarter Two; 1.2.4 Financial Report; and 1.2.5 Human Resource Report. 4
GOVERNANCE AND COMPLIANCE COMMITTEE NO. OF SCHEDULED MEETINGS Three (3) EXCO meetings held ACTUAL NO. OF MEETINGS Three (3) EXCO meetings were held in quarter 2. DATES 31 July 2023 EXECUTIVE COMMITTEE 28 August 2023 26 September 2023 10 July 2023 Three (3) MANCO meetings held per quarter Three (3) MANCO meetings were held in quarter 2. MANAGEMENT COMMITTEE 14 August 2023 11 September 2023 18 July 2023 One (1) Extended EXCO Meeting held per quarter One (1) Extended EXCO Meeting was held in quarter EXTENDED EXCO One (1) Risk and Ethics Management Committee meeting held One (1) Risk and Ethics Management Committee meeting was held in quarter 2. 04 September 2023 RISKAND ETHICS MANAGEMENT COMMITTEE Two (2) Audit and Risk Committee meetings held. Two (2) Audit and Risk Committee meetings were held in quarter 2. 27 July 2023 AUDITAND RISK COMMITTEE 21 September 2023 One (1) ICT Steering Committee One (1) ICT Steering Committee was held in quarter 2. 30 August 2023 ICT STEERING COMMITTEE One (1) SBD Portfolio Governance Forum meeting held One (1) SBD Portfolio Governance Forum meeting was held in quarter 2. 12 25 August 2023 SBD PORTFOLIO GOVERNANCE FORUM TOTAL 12 6
GOVERNANCE AND COMPLIANCE (CONT) 2.1. The Department complied with all the relevant provisions and rules of: The National Assembly; The National Council of Provinces; The Public Finance Management Act (PFMA), 1999 (No.1 of 1999); Treasury Regulations; The Revised Framework for Strategic Plans and Annual Performance Plans; Guideline for Implementation on Revised Framework; and Guidelines for National Quarterly Performance Reports 2023/24 financial year. 2.2. The Department submitted the 2023/24 Q1 Performance Report to the Minister on 30 July 2023. 2.3. The Department submitted the 2023/24 Q1 Performance Report to the Department of Planning, Monitoring and Evaluation (DPME) on 30 July 2023. 2.4. The Department submitted the audited 2022/23 Annual Report to the National Treasury on 31 August 2023. 2.5. The Department submitted the 2022/23 Annual Report to the Minister on 22 August 20223. 2.6. The Department presented 2023/24 Quarter One Performance Report to the Portfolio Committee on Small Development on 06 September 2023. 2.7. The Department submitted the 2022/23 Audited Annual Performance Report to the DPME on 30 September 2023. 7
PERFORMANCE SUMMARY 2023/24 QUARTER TWO PERFORMANCE STATEMENT: THE DEPARTMENTHAS 26 OUTPUTINDICATORS, 26 ANNUAL TARGETSINTHETABLED 2023/24 APP ANDISREPORTINGAGAINST 26 QUARTERLYTARGETS. Branch Branch No. of Output No. of Output Indicators Indicators Quarterly Targets Quarterly Targets Achieved Achieved Not Achieved Not Achieved 1. ADMINISTRATION 1. ADMINISTRATION 9 9 6 3 (67%) (33%) 2. SECTOR AND MARKET 2. SECTOR AND MARKET DEVELOPMENT DEVELOPMENT 5 5 3 2 (60%) (40%) 7 7 5 2 3 3. DEVELOPMENT FINANCE . DEVELOPMENT FINANCE (71%) (29%) 5 5 4. ENTERPRISE 4. ENTERPRISE DEVELOPMENT DEVELOPMENT 4 1 (80%) (20%) 26 26 18 8 T TOTAL OTAL (69%) (31%) 9
PERFORMANCE SUMMARY 2023/24 QUARTER TWO PERFORMANCE REPORT Q 2 2023/24 100.0% 95.0% 90.0% 80.0% 78.0% 80.0% 69.0% 68.0% 70.0% 65.0% 62.5% 60.9% 60.0% 57.2% 57.1% 55.0% 54.5% 50.0% 45.5% 45.0% 42.9% 42.8% 39.1% 37.5% 40.0% 35.0% 32.0% 31.0% 30.0% 22.0% 20.0% 20.0% 10.0% 5.0% 0.0% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2020/21 2020/21 2021/22 2021/22 2021/22 2021/22 2022/23 2022/23 2022/23 2022/23 2023/24 2023/24 Achieved Not achieved 10
PERFORMANCE HIGHLIGHTS (APP) 1. Obtained unqualified audit outcome, without material findings, on non-financial performance information for 2022/23 financial year (Clean audit). 2. Obtained unqualified audit outcome, without material findings, on Annual Financial Statements for 2022/23 financial year (Clean audit). 3. The Department managed to process 2 809 invoices amounting to R20 094 172.17 on average of 5 days. 4. The Department managed to spend R819.3 million against the cashflow projection of R838.7 million resulting in a variance for the quarter of R19.4 million (2.3%). 5. The Department achieved 54.3% female SMS representation (vs Q1 target 50%). 6. 32 DSBD and its Agencies Public engagement Programmes implemented within District Municipalities. 7. A total of 78 (vs Q2 target of 75) products were produced and services rendered by SMMEs, and Co-operatives linked to domestic market. 8. A total of 118 (vs Q2 target of 100) SMMEs and Co-operatives were exposed to global market opportunities. 9. The Department supported 80 (vs Q2 target of 50) Co-operatives financially and/or non-financially. 10. Progress report on the implementation of the approved projects presented to EXCO 26 September 2023. 11. Progress report on the Implementation Plan of SMMEs and Co-operatives Funding Policy was approved by EXCO on 26 September 2023. 12. Six (6) MOAs were signed with hubs and agencies. 13. A total of 544 informal and micro enterprises (vs Q target of 333) were supported through IMEDP. 14. National Integrated Small Enterprise Development Strategic Framework implementation report developed and approved by EXCO on 26 September 2023. 15. The Department conducted two consultations with key stakeholders on regulatory impediments to SMME growth 16. Stakeholder consultations on the Draft National Entrepreneurship Strategy were conducted. 12
PERFORMANCE HIGHLIGHTS (NON-APP) 1. The Terms of Reference for research on challenges, business opportunities, and support required by MSMEs and Co-operatives in the national priority sectors focusing on the short, medium, and long terms were approved. 2. The department managed to host the second quarterly Interprovincial Task Team (IPTT) on the Ease of Doing Business and Red Tape Reduction in Polokwane, Limpopo. 3. The department managed to draft the IGR Strategy by conducting consultations and developing a stakeholder mapping. 4. Two reports on stakeholder consultations for the utilities and construction sub-sectors were produced. 5. The Department managed to identify existing support interventions for SMMEs in Agriculture, Fisheries, Aqua, Environment and Mining. 6. The key stakeholders for the development of Enterprise Development (ED) model were identified and the stakeholder matrix was developed. 7. Department through its regional LED coordination participated and provided inputs into the LED Strategies for the different municipalities. 8. The Department hosted a feminine cluster workshop on the 7th August 2023 where twenty-three (23) SMMEs (i.e. distributors and manufacturers) attended. 9. DSBD visited the growers and SMMEs in the cannabis and hemp sector in the Eastern Cape from the 14th to the 17th of August 2023. Face-to-face interactions with SMMEs, growers, and stakeholders were a central aspect of the visit. 10. SheTradesZA Roundtable Discussion with Women in Business Support Organisations was held, The International Trade Centre (ITC), the European Union, and the EDSE program are among the partners with whom the Department works to strengthen and improve the meaningful engagement of women and young people in the economy. 11. The Department during the period under review conducted consultation with the Co-operatives bodies in preparation for the Policy dialogue on the review of Co-operatives Strategy. 13
UNDER-ACHIEVEMENTSFOR 2023/24 Q2 No . 1. OUTPUT OUTPUT INDICATOR ANNUALTARGET Q2 MILESTONE ACTUALOUTPUT REASON FOR DEVIATION 8 new posts were created in the Q2. Increasing the number of newly created posts from 80 to 88 in line with the annual implementation of the structure plan. 6 Terminations. 2 promotions. CORRECTIVE MEASURES Filling of vacancies in line with Recruitment plan. COMMENTS FOR Q2 <10% vacancy rate. Percentage vacancy rate in funded permanent posts. <10% vacancy rate in funded permanent posts. <10% vacancy rate in funded permanent posts. 16 Appointments were made, of which: 2 promotions (no impact on vacancy) 3 contracts additional to establishment (no impact on vacancy). 11 permanent positions. Recruitment for the 7 posts has commenced. Target Not Achieved: 32.1%vacancy rate in funded permanent posts. Appointment of Response Handling Service Provider. 2. Percentage representation of PWDs. No new appointments of PWDs, while the headcount increased by 6 employees. Implementation of the Strategy for Recruitment of PWDs: Continue to share adverts with tertiary institutions and Persons with disabilities Organisations. Appointment of 7 Interns earmarked for PWDs. Project implementation will be considered when budget availability is confirmed. Target Not Achieved: 5% Representati on of PWDs. 5% representation of PWDs. 4.6% representation of PWDs. 3.3% representation of PWDs. 33 applications received from PWDs. Currently 1 post is ready for shortlisting and interviews. N/A 3. Phase 6: SMME Database implemented . SMME Database SMME Business Licensing and Centralised Permit System developed and approved by EXCO. Number of monitoring Reports on the Incubation Support Programme Improvement Plan approved by EXCO. Phase 6: SMME Database - Business Licensing and Centralised Permit System developed and approved by EXCO. Two (2) Monitoring Reports on the Incubation Support Programme Improvement Plan approved by EXCO. Phase 6 systems development and testing commenced. No budget is available to continue with the implementation of Phase 6. Target Not achieved: Phase 6 systems development and testing has not commenced. 4. Incubation Support Programme Improvement Plan monitored. Monitoring Report on the Incubation Support Programme Improvement Plan approved by EXCO. Further improvements required on the content of the Monitoring Report The target will be achieved in Q3 through catch-up plan. N/A Target Not Achieved: Monitoring Report on the Incubation Support Programme Improvement Plan not approved by EXCO. 15
UNDER-ACHIEVEMENTSFOR 2023/24 Q2 No. OUTPUT OUTPUT INDICATOR ANNUALTARGET Q2 MILESTONE ACTUALOUTPUT REASON FOR DEVIATION CORRECTIVE MEASURES COMMENTSFOR Q2 (EQUITY INFORMATION) N/A 5. Business Amendment Bill submitted to Parliament. Business Amendment Bill submitted to the Minister for introduction to Parliament. Business Amendment Bill submitted to the Minister for introduction to Parliament. One (1) progress report on the public consultations on the Businesses Amendment Bill and proposed changes submitted to the Minister for consideration. Target Not Achieved: Given that the Bill was not certified by OCSLA; the Bill was not submitted to Cabinet to secure approval for the Bill to be gazetted for public comments, thus no public consultations were undertaken. Consequently, a report on the public consultations could not be developed. Depending on the outcome from OCSLA, the Department through the Minister intends to submit the Bill to Cabinet by end of October 2023 and undertaking public consultations in November 2023; and submit to Cabinet for approval to introduce the Bill to Parliament by Jan/Feb 2024. No progress report on the public consultations on the Businesses Amendment Bill and proposed changes submitted to the Minister for consideration. The Bill was first submitted to Office of Chief State Law Advisor (OCSLA) on the 4th May 2023 and the legal opinion from the OCSLA was received on the 29 June 2023. the proposed revisions and corrections were only completed in early September and the Bill was re-submitted to OCSLA on the 11 September 2023 for further consideration. Change of dates by identified provinces. 6. Municipalities assisted to roll out the Red- Tape Reduction Awareness Programme. Number of municipalities assisted to roll out the Red-Tape Reduction Awareness Programme. 30 municipalities assisted to roll out the Red-Tape Reduction Awareness Programme. 5 municipalities assisted to roll out the Red- Tape Reduction Awareness Programme. Moving forward, the Department will identify more than three Provinces to choose from in case of changes in any of the identified municipalities N/A Target Not Achieved: No municipality was assisted to roll out the Red-Tape Reduction Awareness Programme. 16
UNDER-ACHIEVEMENTSFOR 2023/24 Q2 No. OUTPUT OUTPUT INDICATOR Number of Township and Rural Enterprises supported financially and/or non- financially. ANNUALTARGET Q2 MILESTONE ACTUALOUTPUT REASON FOR DEVIATION The underperformance in the quarter under review has been recorded on the financial support which is offered by sefa. CORRECTIVE MEASURES The approval of the proposed improvement plan will improve the uptake of Trep financial support. COMMENTSFOR Q2 (EQUITY INFORMATION) 7. Township and Rural Enterprises supported Financially and/or non- financially. 30 000 Township and Rural Enterprises supported financially and/or non- financially. 10 000 Township and Rural Enterprises supported financially and/or non-financially. Target Not Achieved: 6 283 Township and Rural Enterprises supported financially and non- financially. In the meantime, the department through District Coordinators will assist with the pipeline improvement. In addition to the above 5 interns have been employed by sefa The department must consider interventions as opposed to enterprise supported. 8. Consolidated report on supported Competitive SMMEs and Co-operatives produced. Consolidated report on the number of competitive SMMEs and Co-operatives Supported approved by EXCO. Consolidated report on the 50 000 competitive SMMEs and Co- operatives supported approved by EXCO. Progress update Report on the 15 000 competitive SMMEs and Co- operatives supported developed. The numbers reflected above are based on enterprises support instead of interventions received by each enterprise. This therefore clearly indicates that the department may record under performance on the planned target. Target Not Achieved: 10709 Competitive SMMe s and Cooperatives supported financially and non- financially. 17
6. PROVINCIAL BREAKDOWN (DSBD Entities: sefa and Seda) 18
Spatial Distribution of sefa Loan Disbursements Spatial Distribution of Loan Disbursements Province SMME's Disbursement 30 59 126 1 463 2 002 695 R54 307 594 Eastern Cape Free State Gauteng KwaZulu Natal Limpopo Mpumalanga Northern Cape North West Western Cape LP 10.6% R4 078 068 R150 587 187 R86 033 649 GP 36% NW 0.7% MP 6.1% R44 467 009 R25 709 969 13 11 49 R1 258 948 FS 1% R3 036 231 R48 809 262 NC 0.3% 4 448 Total R418 287 916 EC 13% WC 11.7% In value terms, majority of sefa s disbursements were done in Gauteng followed by KwaZulu Natal and Eastern Cape. The majority of SMMEs supported in Limpopo, KwaZulu Natal and Mpumalanga were through sefa s Micro Finance and Informal sector loan programme. The total number of small businesses financed comprises of the following loan programmes: Informal and Microfinance programme (98.3%), DL (1.7%), WL SME (2,2%) & KCG (5,4%) . 19 19
Seda Expenditure Per Province (July September 2023) Seda Expenditure Per Province (April June 2023) 20
7. FINANCIAL REPORT (OVERVIEW OF SPENDING TRENDS FOR Q2) 21
2023/24 Q2 PROJECTION VS ACTUAL EXPENDITURE 900,000 800,000 700,000 600,000 500,000 R'000 400,000 300,000 200,000 100,000 0 Q2 Projections Q2 Expenditure Q2 Variance Amount in R'000 838,741 819,301 19,440 22 22
2023/24 Q2 PERFOMANCE PER ECONOMIC CLASSIFICATION R 000 799,990 699,990 599,990 499,990 R 000 399,990 299,990 199,990 99,990 (10) Compensat ion of employees 51,053 43,953 7 100 Goods and services Transfers and subsidies 741,684 742,973 -1 289 Capital assets Projections Expenditure Variance 43,426 31,829 11 597 2,578 545 2 033 23 23
2023/24 Q2 PER ECONOMIC CLASSIFICATION Compensation of Employees Expenditure for the second quarter amounted to R44 million (86.1%) against a projection of R51 million resulting in a variance of R7.1 million (13.9%). The result in underspending is mainly due to the vacancy rate of 32%. Goods and services Expenditure amounted to R31.8 million (73.3%) against a projection of R43.4 million, resulting in an underperformance on the cash flow by R11.6 million (26.7%). The underperformance is mainly on core programmes cannabis programme (R2 million) and smme exposure to international markets (R5.2 million) and IMEDP R2.2 million. Whilst the operational items contributing to underperformance are R2.2 million for the quarter. Transfer payments Expenditure for the quarter amounted to R743 million against a projection of R742 million which resulted in an overshooting on cashflow by R1.3 million (-0.2%) due to: Co-operatives Development Support Programme (CDSP) (R11 million): NT approved the virement request to move CDSP from sefa to Seda in Q2 which was planned for in Q1. Product Market (12.6 million): Funds not transferred due to tax non-compliance and a delay in submitting claima. i.e. North West Development Agency (R3.2 million), King Sabata Dalidyebo (R6.4 million) respectively and Chris Hani (R3 million). Craft Customised Sector Programme (CCSP) (R2.5 million): Payment of claims planned for in Q1, processed in Q2 after the finalisation of MoAs with the approved agencies to implement Craft CSP for 2023/24 financial year. Capital assets Expenditure for the quarter amounted to R 545 thousand (78.8%) against a projection of R2.6 million resulting in an underperformance on the cash flow of R2 million (282.3%) to ensure offset the Q1 reported overshooting of expenditure on vehicles ordered in July 2022 and only delivered in Q1 2023. 24 24
AUDIT FINDINGS PROGRESS AS AT 30 Sept 2023 Number of years findings AREA INTERNAL CONTROL DEFICIENCY PROGRESS Not achieved. Q2 duplicates and discrepancies have been identified and removed from the count. This will improve as business units get familiar with the tool Achievement as per APR not supported by schedules provided- CoAF 2 PREDETERMINED OBJECTIVES 1 PREDETERMINED OBJECTIVES Service delivery observations- CoAF 5 0 The tool is being implemented to pick up on duplicates and discrepancies to ensure that accurate information is submitted Not achieved. Q2 duplicates and discrepancies have been identified and removed from the count. This will improve as business units get familiar with the tool. PRE-DETERMINED OBJECTIVES Validity of indicator cannot be confirmed- CoAF 10 0 PRE-DETERMINED OBJECTIVES Reconciliation of reported achievement not provided- CoAF 0 Duplicate entities identified in the population of Number of women-owned businesses supported to register on international platform- CoAF 9 Not achieved. Q2 duplicates and discrepancies have been identified and removed from the count. This will improve as business units get familiar with the tool. PRE-DETERMINED OBJECTIVES 0 Not achieved. Reference made to 2022/23 information, which does not provide progress on Q2 post the audit. No assessment conducted on contingent liabilities.- CONTINGENTLIABILITY 1 KEY MANAGEMENT PERSONNEL Incorrect amounts included in disclosure notes- CoAF 2 Not yet due. Q2 progress to be provided 1 CASHAND CASH EQUIVALENT Not yet due. Progress will be reported in Q3 and on annual financial statements of 2023/24 Understatement of the cash and cash equivalents balance CoAF 6 0 Achieved. The department has used the template provided by the dtic to report on B-BBEE and the relevant documents submitted to BBBEE Non-compliance with B-BBEE regulations- CoAF 7 BBBEE 0 Total 10 25
9. NDP ANTICIPATED SPECIFIC SECTOR OUTCOMES (REVISED 2019-24 MTSF PRIORITIES) 30
NDP ANTICIPATEDSPECIFICSECTOROUTCOMES (REVISED 2019-24 MTSF PRIORITIES) Departmental Impact Statement Department Outcomes Revised 2019-24 MTSF Targets Priority Linkages to the NDP Five- Year Implementation Plan Progress to date Linkages to the Monitoring Framework for the NDP Five Year Implementation Plan Achieved SMMEs-focused Localisation Policy Framework and Implementation Programme for SMMEs developed and approved by EXCO and Cabinet in 2021/22 financial year. In progress 807 products produced and services rendered by SMMEs and Co-operatives linked to market. The purpose of the Small Enterprise Manufacturing Support Programme (SEMSP) is to build a manufacturing sector for an improved industrial base through a focused import replacement programme and build the industrial base for both the domestic market and external market. The programme aims to contribute to South Africa s localisation strategy. As at 31 March 2023, approvals concluded amounted to R832.6m to 85 SMMEs, facilitating 5056 jobs. This is since the SEMSP started approving transactions on 18 Sept 2020. Over the same period, R548.0m was disbursed to 74 SMMEs. Overachieved 110 Incubation Centres and Digital Hubs have been established, already exceeding the revised MTSF target. All incubation Centres are operational. Sustainable SMMEs and Co-operatives contributing meaningfully to the economy. Increased participation of SMMEs and Co-operatives in domestic and international markets. Localisation Policy Framework and Implementation Programme on SMMEs and Co-operatives developed and adopted by 31 March 2021. Implement the SME Focused Localisation Policy and ensure 100% compliance by public sector in procuring 1 000 designated local products and services from SMMEs by 31 March 2024. Scaled-Up and coordinated support for SMMEs Co- operatives, Village and Township Economies. 100 incubation centres and digital hubs established by 2024. 110 that are in various stages of implementation is: 73 Technology Business Incubators; 31 Centres for Entrepreneurship and Rapid Incubation; and 6 Township and Digital Hubs that focus on various designated sectors within which small business startups are functioning. 31
NDP ANTICIPATEDSPECIFICSECTOROUTCOMES (REVISED 2019-24 MTSF PRIORITIES) Departmental Impact Statement Department Outcomes Revised 2019-24 MTSF Targets Priority Linkages to the NDP Five- Year Implementation Plan Progress to date Linkages to the Monitoring Framework for the NDP Five Year Implementation Plan Sustainable SMMEs and Co-operatives contributing meaningfully to the economy. Expanded access to financial and non-financial support and implemented responsive programmes to new and existing SMMEs and Co-operatives. 10 000 youth business start-ups supported per annum. Achieved Number of start-up youth businesses supported financially and non-financially. 2021/22 financial year: 13 369 2022/23 financial year: 8 993 In Progress The Draft SMMEs and Co- operatives Funding Policy together with its implementation plan was approved by Cabinet for public comments on 28 April 2023. At least 50% of national and provincial DFI financing dedicated to SMMEs and Co-operatives through establishment of the SMMEs and Co-operatives Funding Policy by March 2021/22. Corrective measures: The SMMEs and Co- operatives Funding Policy together with its implementation plan is anticipated to be finalised and approved by the third quarter of the 2023/24 financial year. Overachieved 132 573 competitive small businesses and Co-operatives supported, through the DSBD, Seda and sefa non-financial and financial instruments. 100 000 competitive small businesses and Co- operatives supported by 2024. 32
PROGRAMME 1 34
OVERALL PERFORMANCEBY PROGRAMME 1 ADMINISTRATION OUTPUT OUTPUT INDICATOR 1.1. Unqualified audit outcome for the Department. information obtained. financial year. financial year. information for 2022/23 financial year. b) Unqualified audit outcome on Annual Financial Statements obtained. financial year. financial year. year. Payment register. creditors paid within 30 days. days. creditors were paid within 30 days. 95% expenditure on annual budget. cash flow projections. <10% vacancy rate. vacancy rate in funded permanent posts. posts. No . 1. ANNUALTARGET Q2 MILESTONE ACTUALOUTPUT REASON FOR DEVIATION CORRECTIVE MEASURES COMMENTS FOR Q2 a) Unqualified audit outcome on non-financial performance Unqualified audit outcome on non-financial performance information for 2022/23 Unqualified audit outcome on non-financial performance information for 2022/23 Target Achieved: N/A N/A Obtained unqualified audit outcome, without material findings, on non- financial performance information for 2022/23 financial year (Clean audit). Unqualified audit outcome on non- financial performance Unqualified audit outcome on Annual Financial Statements for 2022/23 Unqualified audit outcome on Annual Financial Statements for 2022/23 N/A N/A Obtained unqualified audit outcome, without material findings, on Annual Financial Statements for 2022/23 financial year (Clean audit). N/A Target Achieved: Unqualified audit outcome on Annual Financial Statements for 2022/23 financial 2. % of valid 100% of valid creditors paid within 30 days. 100% of valid creditors paid within 30 N/A N/A Target Achieved: 100% of valid 3. % variance on annual budget. N/A N/A N/A Target Achieved: 5% variance on annual budget. 5% variance on cashflow projections. 2.3% variance on 4. Percentage <10% vacancy rate in funded permanent posts. <10% vacancy rate in funded permanent posts. 8 new posts were created in the Q2. Increasing the number of newly created posts from 80 to 88 in line with the annual implementation of the structure plan. 6 Terminations. 2 promotions. N/A Filling of vacancies in line with Recruitment plan. 16 Appointments were made, of which: 2 promotions (no impact on vacancy) 3 contracts additional to establishment (no impact on vacancy). 11 permanent positions. Target Not Achieved: 32.1%vacancy rate in funded permanent Appointment of Response Handling Service Provider. 5. Percentage of female SMS Representatio n. N/A N/A Target Achieved: 50% female in SMS employed. 50% of female SMS representation. 50% of female SMS representation. 54.3% of female SMS Representation. 35
OVERALL PERFORMANCE BY PROGRAMME 1 ADMINISTRATION No. OUTPUT OUTPUT INDICATOR Percentage representation of PWDs. ANNUALTARGET Q2 MILESTONE ACTUALOUTPUT REASON FOR DEVIATION No new appointments of PWDs, while the headcount increased by 6 employees. CORRECTIVE MEASURES Implementation of the Strategy for Recruitment of PWDs: Continue to share adverts with tertiary institutions and Persons with disabilities Organisations. Appointment of 7 Interns earmarked for PWDs. N/A COMMENTS FOR Q2 6. Recruitment for the 7 posts has commenced. Target Not Achieved: 5% representation of PWDs. 5% representation of PWDs. 4.6% representation of PWDs. 3.3% representation of PWDs. 33 applications received from PWDs. Currently 1 post is ready for shortlisting and interviews. 7. DSBD and its Agencies public engagement programmes implemented within District Municipalities. Number of DSBD and its Agencies public engagement Programmes implemented within District Municipalities. 90 DSBD and its Agencies public engagement programmes Implemented within District Municipalities. 25 DSBD and its Agencies Public engagement Programmes implemented within District Municipalities. In addition to public engagement programmes that were initiated by the Department and its Agencies, several external invitations were received from strategic Government Departments (National, Provincial and Local) and other key stakeholders to engage the public on the Programmes offered by the Small Business Development Portfolio (DSBD, Seda and sefa). N/A Target Achieved: 32 DSBD and its Agencies Public engagement Programmes implemented within District Municipalities. 36
OVERALL PERFORMANCE BY PROGRAMME 1 ADMINISTRATION No. OUTPUT OUTPUT INDICATOR SMME Database SMME Business Licensing and Centralised Permit System developed and approved by EXCO. ANNUALTARGET Q2 MILESTONE ACTUALOUTPUT REASON FOR DEVIATION No budget is available to continue with the implementation of Phase 6. CORRECTIVE MEASURES Project implementation will be considered when budget availability is confirmed. COMMENTS FOR Q2 8. Phase 6: SMME Database implemented. Phase 6: SMME Database - Business Licensing and Centralised Permit System developed and approved by EXCO. Phase 6 systems development and testing commenced. N/A Target Not Achieved: Phase 6 systems development and testing has not commenced. 37
PROGRAMME 2 38
OVERALL PERFORMANCE BY PROGRAMME 2 SECTOR AND MARKET DEVELOPMENT No. OUTPUT OUTPUT INDICATOR ANNUALTARGET Q2 MILESTONE ACTUALOUTPUT REASON FOR DEVIATION The greater cooperation and collaborations with Shoprite and Spar Encore led to an excess of 3 products linked to the market during Q2. CORRECTIVE MEASURES N/A COMMENTSFOR Q2 (EQUITY INFORMATION) No. of Female: 18 No. of Male: 11 No. of Youth: 18 Female: 67% Male: 33% No of PWDs: Female: 0% Male: 0% 1. Products produced and services rendered by SMMEs and Co-operatives linked to domestic market. SMMEs and Co-operatives exposed to global market opportunities. Number of products produced and services rendered by SMMEs and Co-operatives linked to domestic market. 250 products produced and services rendered by SMMEs and Co-operatives linked to domestic market. 75 products produced and services rendered by SMMEs and Co-operatives linked to domestic market. Target Achieved: 78 products produced and services rendered by SMMEs, and Co- operatives linked to domestic market. 2. Number of SMMEs and Co- operatives exposed to global market opportunities. 250 SMMEs and Co-operatives exposed to global market opportunities. 100 SMMEs and Co-operatives exposed to global market opportunities. Increased participation through an online seminar with Botswana. N/A Target Achieved: No. of Female: 100 No. of Male: 38 No. of Youth: 18 Female: 15% Male: 5% No. of PWDs: Female: 0% Male: 0% N/A 118 SMMEs and Co- operatives exposed to global market opportunities. 3. Incubation Support Programme Improvement Plan monitored. Number of monitoring Reports on the Incubation Support Programme Improvement Plan approved by EXCO. Number of approved Business infrastructure for SMMEs and Co- operatives refurbished or built. Two (2) Monitoring Reports on the Incubation Support Programme Improvement Plan approved by EXCO. Seven (7) approved Business infrastructure for SMMEs and Co- operatives refurbished or built. Monitoring Report on the Incubation Support Programme Improvement Plan approved by EXCO. Further improvements required on the content of the Monitoring Report The target will be achieved in Q3 through catch-up plan. Target Not Achieved: Monitoring Report on the Incubation Support Programme Improvement Plan not approved by EXCO. Target Achieved: 4. Approved business Infrastructure for SMMEs and Co- operatives refurbished or built. Progress report on the implementation of the approved projects presented to EXCO. N/A N/A One project completed KwaMashu Market Stalls. The project to be De- Established by 13 October 2023. Progress report on the implementation of the approved projects presented to EXCO 26 September 2023. 10 Projects still in progress during period under review. 39
OVERALL PERFORMANCE BY PROGRAMME 2 SECTOR AND MARKET DEVELOPMENT No. OUTPUT OUTPUT INDICATOR ANNUALTARGET Q2 MILESTONE ACTUALOUTPUT REASON FOR DEVIATION CORRECTIVE MEASURES COMMENTSFOR Q2 (EQUITY INFORMATION) N/A 5. Business Amendment Bill submitted to Parliament. Business Amendment Bill submitted to the Minister for introduction to Parliament. Business Amendment Bill submitted to the Minister for introduction to Parliament. One (1) progress report on the public consultations on the Businesses Amendment Bill and proposed changes submitted to the Minister for consideration. Target Not Achieved: Given that the Bill was not certified by OCSLA; the Bill was not submitted to Cabinet to secure approval for the Bill to be gazetted for public comments, thus no public consultations were undertaken. Consequently, a report on the public consultations could not be developed. Depending on the outcome from OCSLA the Department through the Minister intends to submit the Bill to Cabinet by end of October 2023 and undertaking public consultations in November 2023; and submit to Cabinet for approval to introduce the Bill to Parliament by Jan/Feb 2024. No progress report on the public consultations on the Businesses Amendment Bill and proposed changes submitted to the Minister for consideration. The Bill was first submitted to Office of Chief State Law Advisor (OCSLA) on the 4th May 2023 and the legal opinion from the OCSLA was received on the 29 June 2023. the proposed revisions and corrections were only completed in early September and the Bill was re- submitted to OCSLA on the 11 September 2023 for further consideration. 40
PROGRAMME 3 41
OVERALL PERFORMANCE BY PROGRAMME 3 DEVELOPMENT FINANCE OUTPUT INDICATOR Consolidated report on the implementation plan of the SMMEs and Co-operatives Funding Policy approved by EXCO. EXCO. EXCO. 2023. Number of Co- operatives supported financially and/or non- financially. financially. non-financially. No. OUTPUT ANNUALTARGET Q2 MILESTONE ACTUALOUTPUT REASON FOR DEVIATION N/A CORRECTIVE MEASURES COMMENTSFOR Q2 (EQUITY INFORMATION) N/A 1. SMMEs and Co-operatives Funding Policy Implementation plan reported on. Consolidated report on the implementation plan of the SMMEs and Co- operatives Funding Policy approved by Progress report on the Implementation plan of SMMEs and Co- operatives Funding Policy approved by N/A Target Achieved: Progress report on the implementation plan of the SMMEs and Co-operatives Funding Policy was approved by EXCO on 26 September 2. Co-operatives supported Financially and/or non- financially. 250 Co- operatives supported financially and/or non- 50 Co-operatives supported financially and/or non-financially. There was a higher attendance of the workshops than anticipated. N/A No of Female: 136 No of Male: 45 No of Youth: 67 Female: 75% Male: 25% No of PWDs: 4 Female: 2% Male: 0% Youth: 37% Target Achieved: 80 Co-operatives supported financially and/or 3. Township and Rural Enterprises supported Financially and/or non- financially. Number of Township and Rural Enterprises supported financially and/or non- financially. 30 000 Township and Rural Enterprises supported financially and/or non- financially. 10 000 Township and Rural Enterprises supported financially and/or non-financially. The underperforman ce in the quarter under review has been recorded on the financial support which is offered by sefa. The approval of the proposed improvement plan will improve the uptake of TREP financial support. In the meantime, the department through District Coordinators will assist with the pipeline improvement. Target Not Achieved: 6 283 Township and Rural Enterprises supported financially and non- financially. In addition to the above 5 interns have been employed by sefa N/A 4. SMMEs and Cooperatives in the craft Sector supported through the Craft Customised Sector Programme. Number of Crafters supported through the Craft Customised Sector Programme. 1000 Crafters supported through the Craft Customised Sector Programme. Signing of MOAs with the hubs and agencies. N/A Target Achieved: N/A Six (6) MOAs were signed with hubs and agencies. 42
OVERALL PERFORMANCE BY PROGRAMME 3 DEVELOPMENT FINANCE No . OUTPUT OUTPUT INDICATOR ANNUALTARGET Q2 MILESTONE ACTUALOUTPUT REASON FOR DEVIATION CORRECTIVE MEASURES COMMENTSFOR Q2 (EQUITY INFORMATION) 5. Start-up youth businesses supported financially and non-financially. Number of start-up youth businesses supported financially and/or non- financially. 10 000 start-up youth businesses supported financially and/or non-financially. 2 500 start-up youth businesses supported financially and/or non-financially. Target Achieved: More applications were received and approved by Seda N/A 2 680 start-up youth businesses supported financially and/or non-financially. 6. Informal and Micro Enterprises supported through the Informal and Micro Enterprise Development Programme (IMEDP). Number of informal businesses supported through IMEDP. 1 333 informal businesses supported through IMEDP. 333 informal businesses supported through IMEDP. Increased interactions with targeted municipalities, business associations and responsiveness of the DSBD due to high demand. N/A Target Achieved: No. of Female: 355 No. of Male: 218 No. of Youth: 228 Female: 112 Male: 116 No of PWDs: 4 Female: 4 Male: 0 Youth: 0 544 informal businesses supported with equipment, tools and machinery on IMEDP. 7. Consolidated report on supported Competitive SMMEs and Co- operatives produced. Consolidated report on the number of competitive SMMEs and Co-operatives Supported approved by EXCO. Consolidated report on the 50 000 competitive SMMEs and Co- operatives supported approved by EXCO. Progress update Report on the 15 000 competitive SMMEs and Co- operatives supported developed. The numbers reflected above are based on enterprises support instead of interventions received by each enterprise. This therefore clearly indicates that the department may record under performance on the planned target. The department must consider interventions as opposed to enterprise supported. Target Not Achieved: 10709 Competitive SMMEs and Co- operatives supported financially and non- financially. 43
PROGRAMME 4 44
OVERALL PERFORMANCE BY PROGRAMME 4 ENTERPRISE DEVELOPMENT No. OUTPUT OUTPUT INDICATOR ANNUALTARGET Q2 MILESTONE ACTUALOUTPUT REASON FOR DEVIATION CORRECTIVE MEASURES COMMENTSFOR Q2 (EQUITY INFORMATION) N/A 1. National Integrated Small Enterprise Development Strategic Framework implemented and reported on. Number of the National Integrated Small Enterprise Development Strategic Framework implementation reports approved by EXCO. Four (4) National Integrated Small Enterprise Development Strategic Framework Implementation reports approved by EXCO. National Integrated Small Enterprise Development Strategic Framework implementation report approved by EXCO. N/A N/A Target Achieved: National Integrated Small Enterprise Development Strategic Framework implementation report was approved by EXCO on 26 September 2023. 2. Municipalities assisted to roll out the Red- Tape Reduction Awareness Programme. Number of municipalities assisted to roll out the Red-Tape Reduction Awareness Programme. 30 municipalities assisted to roll out the Red- Tape Reduction Awareness Programme. 5 municipalities assisted to roll out the Red- Tape Reduction Awareness Programme. Change of dates by identified provinces. Moving forward, the Department will identify more than three Provinces to choose from in case of changes in any of the identified municipalities. N/A Target Not Achieved: No municipality was assisted to roll out the Red-Tape Reduction Awareness Programme. Target Achieved: Stakeholder consultations were conducted with key stakeholders on regulatory impediments to SMME growth 3. A Regulatory Reform Implementation Plan. A Regulatory Reform Implementation Plan submitted to Minister for approval. A Regulatory Reform Implementation Plan submitted to Minister for approval. Stakeholder consultations conducted with key stakeholders on regulatory impediments to SMME growth. N/A N/A N/A 45
OVERALL PERFORMANCE BY PROGRAMME 4 ENTERPRISE DEVELOPMENT OUTPUT OUTPUT INDICATOR ANNUALTARGET Q2 MILESTONE No. ACTUALOUTPUT REASON FOR DEVIATION CORRECTIVE MEASURES COMMENTSFOR Q2 (EQUITY INFORMATION) N/A 4. Sector-focused and Hybrid Incubation and Digital Hub Support Strategy Developed and Approved. Sector-focused and Hybrid Incubation and Digital Hub Support Strategy developed and approved by EXCO. Sector-focused and Hybrid Incubation and Digital Hub Support Strategy approved by EXCO. Stakeholder consultations conducted with key stakeholders on Sector focused and Hybrid Incubation and Digital Hub Support Strategy. N/A N/A Target Achieved: Stakeholder consultations conducted with key stakeholders on Sector focused and Hybrid Incubation and Digital Hub Support Strategy were conducted. 5. National Entrepreneurship Strategy approved. National Entrepreneurship Strategy approved by EXCO. National Entrepreneurship Strategy approved by EXCO. Stakeholder consultations on the Draft National Entrepreneurship Strategy conducted. N/A N/A N/A Target Achieved: Stakeholder consultations on the Draft National Entrepreneurshi p Strategy was conducted. 46
RECOMMENDATION It is recommended that the Select Committee on Trade and Industry, Economic Development, Tourism, Employment and Labour adopts the 2023/24 Quarter Two Performance Report of the Department of Small Business Development. 48
Thank You! Thank You!
