Over the past two days the Portfolio Committee on Small Business Development has been briefed by the Auditor-General (AG), Deloitte, the Department of Small Business Development, the Small Enterprise Finance Agency (SEFA) and the Small Enterprise Development Agency (SEDA) as part of the committee’s preparation for the Budgetary Review and Recommendations Report.

On Tuesday, the committee was briefed by the AG and Deloitte on the overall performance of the department and its entities SEFA and SEDA in the 2022/23 financial year. Deloitte was there to support the AG’s presentation as the auditor of record for SEFA. On Wednesday, the committee was also briefed by the department, SEFA and SEDA on their annual reports for the period under review.

The committee welcomed the department’s achievement of a clean audit in three consecutive financial years. The AG stated that the department obtained this audit outcome due to a strong leadership culture, sound financial management and effective governance structures
that are supported by adequately resourced and skilled officials.

However, the committee was not pleased with the regression in SEFA’s performance. The entity went from a clean audit in the prior year to an unqualified audit opinion with material findings on matters of compliance in the period under review. Deloitte attributed this regression to non-compliance by submitting financial statements that did not meet the requirements of the prescribed financial reporting framework and intercompany loans that were approved without a special resolution. The committee urged SEFA to correct its mistakes to attain a clean audit status by the end of the current financial year.

Meanwhile, SEDA has achieved an unqualified audit opinion with findings in three consecutive financial years. The material findings were on matters of performance indicators, such as the number of small, medium, micro and cooperative enterprises reached through awareness sessions, the number of township and rural businesses supported, and ecosys
tem development plan implementation. The committee, however, noted the slight improvement from the prior year, where the performance information received a disclaimer due to a lack of processes to collect information for reporting purposes.

The Chairperson of the committee, Ms Violet Siwela, commended SEDA for being in the process of implementing a performance reporting system that will eliminate manual intervention, which is prone to errors. Ms Siwela believes that with the new system, SEDA will join the department in obtaining a clean audit at the end of the current financial year.

The committee is pleased that in the period under review, the small business development portfolio achieved 67% of its annual targets with the department achieving 56% of its annual targets and SEFA and SEDA achieving 60% each. The committee is particularly pleased by the commitment made by the Minister of Small Business Development, Ms Stella Ndabeni-Abrahams, to continue monitoring and ensuring that the remaining targets are
also met.

Source: Parliament of South Africa