The Minister of Youth, Women and People with Disabilities, Sindisiwe Chikunga, and National Youth Development Agency (NYDA) chairperson, Dr Sunshine Myende, are under fire for allegedly convening and approving a questionable annual general meeting (AGM), where a decision crucial to the agency’s accounting was taken.
The AGM, which was convened on December 10, adopted a resolution to extend the NYDA risk and audit committee (ARC), a structure whose term of office lapsed due to multiple cancellations of appointment processes stemming from suspected internal interference by Myende.
When in place, the ARC ensures financial oversight, risk management, and compliance with Public Finance Management Act (PFMA) regulations at the agency.
It has since come to light that the absence of a fully mandated ARC since the coming into office of the new board in August last year at the embattled agency led to the unexplained expenditure of a staggering R71-million that the attorney-general has classified as wasteful and fruitless expenditure, a classification that the NYDA top brass is contesting.
The matter has subsequently been escalated to the national treasury. The EFF Youth Command has called out Chikunga for political overreach, saying the NYDA statutes do not make provision for an AGM approving the appointment of NYDA subcommittees, thus rendering the December meeting and the subsequent decisions made there illegal. However, the minister insisted she was entitled to convene the meeting.
This is despite an internal legal opinion from NYDA, which Sunday World has reviewed, indicating the contrary.
“Whilst the NYDA is bound by the PFMA’s provisions pertaining to the spending of funds allocated to it, there is no provision in the PFMA or the board’s charter that the NYDA must hold an AGM,” reads the legal opinion from NYDA legal manager Rookaya Ballim to chief executive Ndumiso Kubheka-Radebe.
“In terms of section 49 of the PFMA, the board is the accounting authority and is responsible for the approval of the annual report and the financial statements. While an AGM may be held for purposes of good corporate governance, there is no legal role for an AGM where members approve financial statements.”
In line with the provision, on December 7, NYDA company secretary Veronica Mkhize circulated a board round-robin resolution via email to extend the term of the interim ARC until the end of January.
But Chikunga’s December AGM, which is highly questionable, decided to
extend the tenure of the ARC “until the recruitment process is
finalised”.
Chikunga, circumventing the NYDA board decision to extend the ARC until January 31, affirmed the names of independent ARC members, Mbusiswa Ngcobo and advocate Mary Roseyn, including those of Dr Wiseman Mbatha and Busisiwe Mbatha as non-executive
NYDA board members of sitting in the ARC, according to the AGM resolution seen by
Sunday World, which was signed off by Chikunga.
EFF Youth Command leader and MP Sihle Lonzi criticised Chikunga for the AGM during a parliamentary portfolio committee meeting this week.
“It is not true that there is no fruitless and wasteful expenditure in the NYDA because the AG came before us and said that there is R71-million which they have flagged,” said Lonzi.
Chikunga did not back down on the AGM and her defence of the NYDA: “Let me say something about the AGM, which was referred to as illegal. It is well within the right of the minister; she decided that she is going to convene an AGM and invite whoever she feels should be part of that meeting.
“The minister, in those meetings, decided whether she was going to approve the reports and financial statement or not, and that is well within the right of the minister.”
Lonzi retaliated: “What the minister is saying is not true, but we are not going to degenerate the meeting. We will deal with her; we are used to dealing with her ”.
The next portfolio meeting in April will see the continuation of the duel between Lonzi, Chikunga and the NYDA board. At this meeting, the agency is expected to explain several issues, including the missing R71-million, the lapse of the ARC’s term of office, the international travel expenditure report, and questionable appointments.
