SBDF holds urgent meeting to set the record straight, on statements by Mr.Herman George

Director of the Small Business Development Foundation (SBDF) Ludwig Ouenniche on Wednesday stated that the operation and administration amounts spent by the SBDF from the funds for the Skilled Entrepreneurship Training (SET) program was 10 to 11 per cent and not "over 60 per cent" as stated by Director of Reda Sosial Herman George. 

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Ouenniche was reacting to the decision of Reda Sosial (Fund for Social Development and Economic Activities) to terminate its funding of the Small Business Development Foundation SBDF and, by extension, the SET program initiated by the SBDF.

George said his organization does not have any confidence in the management team of the SBDF and their ability, or lack thereof, to manage funds that have been allotted.

He also stated that Reda Sosial had approved NAf. 79,300 in late 2009 for the execution of the SET program and released NAf. 25,100 as an advance. Disbursement of the remaining funds depended on how the NAf. 25,100 was accounted for.

George explained that once an account of how the monies were spent was finally received, "more than 60 per cent of the funds" were spent on operational and/or administrative cost of the SBDF which is against the financial rules and regulations. The funds, he stressed, are meant for the execution of the programs not to cover SBDF bills.

In a press conference on Wednesday, Ouenniche said the operational/administrative fees were budgeted and approved by Reda Sosial and said he had no clue where George got the 60 per cent figure. He said the amount spent on administrative/operational cost amounted to NAf. 8,000.

However, the approved budget that Ouenniche said he submitted to Reda Sosial and provided to the media makes no mention of administrative/operational cost for the SBDF. When asked for clarification, Ouenniche said the cost are calculated in the various budget posts and detailed in a budget explanation brief that Reda Sosial also has. He said this was a confidential document and could not be released to the media.

The SBDF lists its cost in the budget under the budget posts "pre-selection of the candidates" for NAf. 3,000 and "Program Management" for NAf. 5,000.

Also, in its letter to the SBDF dated December 17, 2009, Reda Sosial said that the NAf. 25,100 will be advanced for the pre-selection of candidates, advertisements and the social behaviour training and the program management fee would be paid towards the end of the program. No mention was made of administrative/operational cost.

George could not be reached by press time to determine if he realised that these were the budgeted SBDF administrative/operational cost to which the SBDF refers.

Additionally, in the financial justification that Ouenniche presented to Reda Sosial, the total amounted to NAf. 36,396, exceeding the NAf. 25,100 that was advanced, but still within the total SET program cost of NAf. 79,300. Re-iterating his statement made on Tuesday, Ouenniche said SBDF apologised for being a few weeks late with the justification.

"Once the budget is approved, then every justification has to go according to that budget. This is how we have been operating from day one. In the justification, like in the budget, you have a post for administrative expenses for SBDF that never, ever, exceed twenty per cent," Ouenniche said.

He also explained that in April 2007, NAf. 150,000 was allotted to the SBDF as part of the "Quick Wins" funds from the Dutch government. Some of these funds were used to carry out a number of programs leaving NAf. 79,300 unused. Ouenniche said the SBDF thought the "money was over and finished" and "we didn’t even approach Reda Sosial" until they heard from George at the end of 2008 who indicated there was money left over.

According to Ouenniche, George had agreed in a meeting with former Commissioner Maria Buncamper Molanus that the remaining funds would be used for the construction of a computer lab and the minutes from the meeting reflects such, although no agreement was signed with Reda Sosial for a lab.

He said SBDF sent a letter to Reda Sosial about the computer lab project and received a response from George’s assistant stating that the funds were not meant for construction of a computer lab but for the execution of courses.

The SBDF then "dropped" the idea of the lab and moved ahead with the SET programme and advised Reda Sosial of such in December 2009. When pressed for clarification on the minutes, particularly if George agreed to the computer lab or if the minutes only recorded a discussion, Ouenniche could not provide a definite explanation. "All I know is we sat down and he agreed that the fund would be used for the computer lab," he said.

He said Reda Sosial could take whatever decision it wants as it relates to the SBDF, but his only concern is the future of the SBDF. In this regard, he said he intends to brief the Executive Council and give SBDF’s account of the situation. He said the SBDF has always operated within management rules and has built its reputation on this.