By: Anna Majavu
The Auditor-General (AGSA) is concerned that it was unable to verify whether the Small Enterprise Development Agency (SEDA) supported all the township and rural-based businesses it claims to have done. AGSA audit manager Nonhlanhla Zuke told Parliament’s Small Business Development Portfolio Committee that SEDA had reported supporting 21,802 township and rural SMMEs over the past year, far more than its target of 16,000. But the supporting evidence it provided “materially differed from the reported achievement”.
“In other instances, management was unable to provide sufficient and appropriate evidence,” said Zuke, presenting the latest audit of SEDA, the Small Enterprise Finance Agency (SEFA), and the Department of Small Business Development (DSBD). While the DSBD achieved a clean audit, SEFA regressed to an unqualified audit outcome with findings, and SEDA stagnated on an unqualified audit outcome with no findings. This meant the small business portfolio had regressed overall, Zuke said.
Between the department and the two small business finance institutions, several targets were not achieved. This “negatively impacts the stimulation of economic growth of the country and job stimulation and creation”, Zuke said. SEDA had achieved 86% of the targets it had set for itself, but the department had only achieved 56% and Sefa only 59%. Some of the key targets that were not achieved included women-owned businesses being supported to register on international platforms. Only 1202 out of the targeted 2500 businesses received the promised support. While the DSBD said the opportunities had been created, women-owned businesses did not follow through.
Only 68 out of a targeted 250 SMMEs and co-operatives were linked to global market opportunities as promised, because of a shortage of suitable global events, the DSBD added. Another target was to build six pieces of infrastructure across the country for SMMEs and co-operatives, but only two were built. The DSBD also promised to offer support to 900 crafters through a customised programme, but eventually reached 659 because of low uptake from crafters, it said.
The Auditor-General also found irregular expenditure of R6.32 million for the portfolio overall, up from R5.86 million last year. Of this, R5.5 million belonged to SEDA, R655,000 to the department, and R151,000 to SEFA. However, the Auditor-General found that there was a “strong leadership culture, sound financial management, and effective governance” in the DSBD. Zuke said the plan for the public sector to procure 1,000 different products and services from SMMEs by the end of March 2024 was also on track, with 807 already having been procured. The department also said it had supported 132,572 co-operatives and SMMES, far higher than the 100,000 target.