SMD

Annual Report 2023/2024

Seda’s main audit issue was the Performance Information management and reporting. The new system has been developed and implemented during the financial year. Seda will be reporting from the new system as from the financial year ending 2023/24. Seda will be enhancing the new system so as to address some of the findings from the last audit. The National Credit Act in the application process looks at the Directors and Managers of the institutions. sefa shall engage FSCA to explore the modalities of our clients registering with FSCA. In addition, sefa will explore the overlaps and the differences between NCA and FSCA and, where possible, contact clients to comply with higher standards. sefa will also

DSBD has a governance structure called a Portfolio Governance Forum (PGF) that sits once a quarter, which is between the Department and its entities, chaired by the DSBD Accounting Officer. The members of this structure are the EXCO members of the Portfolio. One of the standing items of the PGF is to monitor the Seda and sefa quarterly performance reports, which include the progress on the implementation of the Auditor-General recommendations / findings. Through this structure, the Department is providing appropriate guidance regarding the matters raised by the Auditors. During 2022/23 financial year, sefa did not obtain any findings on its performance data. As a result, there were no requests from AGSA to address any risks or tighten internal controls.

Matters raised by the Portfolio Committee Department’s response

endeavour to empower the individuals behind the MFIs, especially the developing MFIs driven by black entrepreneurs to ensure the necessary skill required is in place. While the objective is to promote inclusion, that will be done in a sustainable manner.

Following its oversight visit to the North West province, the Committee emphasized the importance of the sefa Board to consider amendments to the policy

To arrest further decline in audit findings of the agencies, the Department must move quickly to monitor and

assist agencies to implement the AG’s recommendations. The Accounting Authorities/Board of Directors must

be held accountable for improving controls for proper record keeping and ensuring that complete, relevant, and accurate information is accessible and available to support performance data.

Management should respond to the AG’s requests with the requisite urgency in addressing identified risks and

improving internal controls, which will improve audit outcomes for both the Department and entities. The Committee will maintain regular contact with the AG’s office in line with oversight accountability.

guidelines to include a condition for MFIs and RFIs to be licensed by both the National Credit Regulator and the Financial Sector Conduct Authority (FSCA) as authorised Financial Services Providers (FSP). The NCR licensing

process is defective in that it focuses solely on the entity or corporation as a legal person, whereas the FSCA

approach encompasses both the firm and the individual behind the company. The majority of NCR-licensed

companies are led by directors who do not meet the criterion of ‘fit and proper’. Licensing is an important component of the regulatory system and helps to

oversee the value chain. The Board must endeavour to achieve this recommendation before the agency tables its 2024/25 annual performance plan.

Part C • GOVERNANCE • Department of Small Business Development

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