Department of Arts & Culture; Robben Island Museum & Afrikaans Taal Museum: Interrogation of Audit Reports 2005/06
Public Accounts (SCOPA)
27 March 2007
Meeting Summary
A summary of this committee meeting is not yet available.
Meeting report
SELECT
COMMITTEE ON PUBLIC ACCOUNTS (SCOPA) & PORTFOLIO COMMITTEE ON ARTS
AND CULTURE
27 March 2007
DEPARTMENT OF ARTS AND CULTURE; ROBBEN ISLAND MUSEUM, AND AFRIKAANS TAAL
MUSEUM: INTERROGATION OF AUDIT REPORTS 2005/06
Chairperson: Mr T Godi (PAC)
Documents handed out:
2005/2006 Auditor–General
Report on Robben Island Museum
Robben Island Museum 2005/2006 Annual Report (available at www.robben-island.org.za shortly)
2005/2006 Auditor
General Report on the Afrikaans Language Report
Afrikaans Language
Museum 2005/2006 Annual Report
2005/2006
Auditor-general Report on the Department of Arts and Culture
Department of Art and Culture: 2005/2006 Annual Report (available at www.dac.gov.za)
Audio Recording of
the Meeting
SUMMARY
Three entities were interrogated on their audit reports for the 2005/2006
financial year.
The Robben Island Museum received a qualified audit report due to the lack of
proper record keeping and preservation of the Mayibuye collection as well as
the increased deficit incurred in the financial year under review.
Representatives admitted the complexity of managing and achieving the goals of
the museum, given both its budgetary constraints and the necessary institutional
changes. Questions were asked on the achievement of the goals, the new
catamaran, the failure to note the Mayibuye collection on the asset register,
the functioning of the internal audit committee, non compliance with generally
accepted principles of accounting, the level of monitoring exercised and staff
capacity. Further questions addressed the need for policies and adherence to
them, and the Museum was asked to provide written responses to the specific
areas raised by the Auditor General. The management was asked about the
overseas trips, the fact that a sitting Councillor was also a shareholder in
the ferry service, and the conservation of wild life on the island.
The Afrikaans Taal Museum had received qualifications and matters of emphasis
in the audit report. Questions were asked on adjustment of the balances, the
building "Historia", lack of understanding on the materiality and
significance framework, the fact that the objectives of the strategic plan were
not adequately documented in the Annual Report, and provision of leave
payments, the amounts in savings accounts, and the lack of recordal of the
antique collections in the asset register or financial statements. The issue of
representivity raised in the letter by the Chairperson of the Museum, Dr Van
Harte, should be taken up by the Portfolio Committee on Arts and Culture.
The Department of Arts and Culture had spent almost its full allocation, but
questions were raised on the delays in delivery of capital projects. Questions
were asked on the bonuses, the steps to establish a performance management
system, the high vacancy rate, the slowness of the appointment process,
the reasons why staff were leaving, and the alignment of asset management
systems to the milestones set out by National Treasury. Further questions
related to the leadership of the asset management unit, the current state of
the asset management register, irregular expenditure on a contract that had
expired, and monitoring generally. The Chairperson of the Portfolio Committee
on Arts and Culture commented that the Department did not appear to have taken
sufficient steps to align itself with universities to address the skills
shortages. It was stressed that the Department played a critical role in the
transformation of South Africa and promotion of a clear cultural identity.
MINUTES
The Chairperson noted with appreciation the number of members of the
Portfolio Committee on Arts and Culture who were attending this meeting, and
appreciated the effort to synergise the work of the two Committees.
Robben Island Museum (RIM): Interrogation of Audit Report
Mr E Trent (DA) explained that the purpose of the meeting was to interrogate
certain issues so as to seek improvement in performance. The Committee was
concerned over the retrogression in performance by the Robben Island Museum. He
noted that the mission of the RIM was to maintain the unique political and
universal symbolism and values of Robben Island, to conserve and maintain the
natural and cultural resources of the island, to promote the island as a
platform for critical debate and lifelong learning as well as to manage the
Robben Island Museum in a manner that promoted its economic sustainability and
development. He asked if the Museum believed that it had adequately achieved
all these commendable goals.
Mr Paul Langa, Acting Chairperson: RIM, answered that the Museum had achieved
some of these goals, but there was still room for improvement in certain
important areas.
Mr Trent commended Mr Langa for acknowledging the challenges to reaching all of
the goals. He noted that the Auditor General (AG) had stated that the deficit
before grants had increased from R19,5 million in 2005 to R37,2 million in
2006. It was not clear what this deficit would be in 2007. He asked for an
explanation of the increase in deficit, and noted that it surely challenged the
Museum’s ability to maintain its economic sustainability.
Mr Langa explained that the deficit was due to the necessary institutional
changes as well as the purchasing of a new boat to transport visitors to RIM.
Given the specific nature and purpose of the RIM; its budget and expenditure
needed to be aligned to the better and integrated management of both the
historical and ecological resources of the Island. He added that the budget had
traditionally been provided through a Correctional Services account.
Mr Trent wanted to know whether the new Robben Island catamaran boat was
already in operation.
Mr Langa answered that it took about seven to twelve months before a newly
purchased boat could be fully in operation. The hand-over of this vessel was
expected to be completed shortly.
Mr Trent noted that this boat should have been in operation from February 2007
as cited in the 2005/2006 Annual Report.
Mr Langa responded that although it was behind schedule, it did not report an
operational deficit.
Mr Trent noted that the cost of the newly purchased catamaran could not be the
sole cause of the current deficit suffered by the RIM. Capital expenditure was not
written off in one year, but would be written off over a period of time. The
response was not satisfactory.
The Chairperson commented that this reason was not accepted as the cause of the
deficit.
Mr Langa concurred that the biggest challenges faced by RIM were the current
budgetary constraints. Since the museum and the whole island had to be
preserved, this task entailed complex requirements and service provision. The
integrated conservation management system sought to address complex needs such
as transport. He added that the museum’s budget had never been interrogated
before, which compounded this issue, as it had formed part of the Correctional
Services budget.
The Chairperson said that the Committee needed to assured that the funds
provided to the RIM would be appropriately utilised, managed and administered.
This necessitated the appointment of sufficiently skilled people.
Mr Trent focused on RIM’s management of the natural and cultural resources and
heritage of Robben Island. He noted that the Mayibuye collection was not
recorded on an asset register and its catalogue was incomplete. This was a
cause of concern as this collection was very important and valuable. He asked
for an explanation why this was the case, and asked what had been done to
improve the preservation of this collection.
Mr Langa explained that the there were five elements to this collection. These
were the historical papers, art, posters and banners, sound and oral history,
films and video, and the artefacts and photographic archives.
The Chairperson interjected to explain that RIM should clarify why the asset
register and catalogue for this collection were incomplete and what was being
done to correct this situation.
Mr Langa restated that this collection consisted of various categories. These
categories had been registered to varying degrees. The problems encountered in
the registration process had affected the ability to timeously record the
collection.
The Chairperson reiterated that Mr Langa should clarify whether the asset
register and catalogue had been updated.
Mr Langa said that although such recording was taken place, there were some
items that could not be clearly recorded. These were recorded as ‘unnamed
items’.
Mr Trent said that the recording of these items was important as these items
could easily go missing. He asked specifically what RIM was doing to manage the
risk of this happening in the interim, and how long the recording would take.
He asked why did it take so long to simply record an item. He also asked if RIM
was experiencing a capacity problem.
Mr Langa explained that, with the assistance of the Department of Arts and
Culture, RIM was currently recording the items. It was expected that these
would be finalised in 2007. He acknowledged that the constraints were related
to the budget.
Mr Trent stated that this matter would be dealt with as part of the Committee’s
recommendations to RIM.
Mr Trent focused on RIM’s audit history, and stated that three qualifications
and six matters of emphasis were received for the 2005/2006 financial year.
These matters had not apparently been problematic in the preceding two
financial years. This was a cause of concern. Departments and entities needed
to improve, not regress. A few observations made by the AG were highlighted.
These included the fact that there could be no reliance on the internal audit
unit, as it was ineffective for the 2005/2006 financial year. The approved
audit plan was not executed. He asked that reasons be provided for the
deterioration of the internal audit function.
Mr Langa explained that although the services of another unit had been
commissioned, the internal audit was not performed adequately. It was therefore
decided to cancel this process. A tendering process for conducting the internal
audit was put out, and RIM was currently being audited.
The Chairperson asked whether RIM was satisfied that this audit would be
adequately conducted.
Mr Langa expressed his confidence that this audit would proceed as desired.
Mr Trent wanted to know whether existing problems were likely to be identified
in the pending audit.
Mr Langa responded that the relevant policies had been reviewed.
The Chairperson asked if this then meant that the AG would not cite these
issues as problematic again.
Mr Trent added that although the policies were renewed, people needed to be
trained to apply these policies effectively. These individuals should also be
monitored, and RIM needed to ensure that all policies were adhered to.
Mr Langa answered that the relevant services and appropriate skills were hired
to provide these services.
Mr Trent noted that the AG was of the opinion that the problems experienced by
the RIM were related to the non-compliance to the Generally Accepted Accounting
Principles (GAAP) and Generally Recognised principles (GRAP). RIM seemed not to
have the skills to comply with these regulations, as evidenced by incorrect
accounting, and the lack of control over journals, noted in the AG’s report. He
requested the AG representatives to clarify why these problems were not
detected earlier.
A representative from the AG’s office explained that the main reasons for the
qualifications were the non –compliance to GAAP and GRAP.
Mr Trent wanted to know if the RIM had the capacity to comply with these
regulations, and what had been done to correct this matter.
Mr Langa responded that internal systems had been put in place and a service
group was currently being trained to assist in compliance with these
regulations. The AG’s office was also lending assistance.
Mr Trent noted that the observations made in the AG’s report were very critical
and included the lack of procedures to ensure effective cash management; lack
of appropriate documentation and approved policy and procedure frameworks.
These were basic aspects for the management of finances. He asked if these
systems had subsequently been put in place.
Mr Langa answered that a cash management policy was in place. At the time the
AG was conducting the audit and requested this document, it could not been
provided. Unfortunately, when this document was provided for auditing purposes,
the audit for that particular section was already concluded..
Mr Trent asked if there was adherence to these policies and procedures.
Mr Langa confirmed the monitoring of the level of compliance.
Mr Trent suggested that, due to the time constraints and for the purposes of
the Committee’s recommendations to Parliament; RIM provide written responses to
the specific areas raised by the AG and the progress made to improve these
weaknesses.
Mr Trent wanted to know whether RIM had the capacity to implement all the
prescriptions of the relevant legislation.
Mr Langa said that a new integrated conservation management system had to be
developed and had been submitted to the executive committee. There were also
new demands TIM needed to deal with and much needed to be done to develop
workable systems to execute the work effectively. There were about 38 vacant positions
in RIM, an increase from the 28 recorded in 2005. The institution was currently
being realigned to the new demands faced.
The Chairperson noted that the staff capacity had deteriorated.
Mr Langa answered that the demand on the institution was higher than
anticipated. The skills needed were very different from those the museum had
inherited from the Department of Correctional Services (DCS).
The Chairperson said the staff shortages were compounded by the lack of
critical skills. The issue of capacity, in terms of skills and numbers, was
clearly not improving. This had an impact on the ability to monitor compliance
with procedures and policies. The non-compliance was caused by the current
capacity constraints. The filling of vacancies was crucial in improving
institutional performance. This regression was reflected in the number of
qualifications and emphases of matter in the 2005/2006 annual report. RIM
should urgently address the current vacancies.
Mr Trent recalled that one of the core objectives of the museum was to promote
sustainable economic development. Currently, RIM was not generating enough
income to cover its costs, despite the popularity of the museum. In addition to
this, the museum experienced a shortage of sufficiently skilled staff.
Mr D Gumede (ANC) wanted to know whether parliament had been consulted
regarding the funding capacity of the RIM. Moreover, he asked if a budget had
been provided for the number of vacant posts to be filled. He asked if they
were not filled because of scarcity of skills and asked what skills were
desperately needed.
Mr Langa explained that that these vacant posts needed to be funded as required
by the relevant guidelines. These were specific posts, which required
specifically skilled individuals. The recruitment process was on track.
Mr P Gerber (ANC) noted the international trips made by some staff members
during the 2005/2006 financial year. He asked RIM to explain why Mr Forbes
travelled to London to inspect fire trucks donated to the museum. He noted that
Department of Public Works (DPW) and the RIM financed the plane ticket and
accommodation respectively.
Mr Langa explained that the museum had developed a particular emergency
response for fires and other emergencies, and did not have any fire trucks. The
British Council made an offer to the RIM as part of the total donation of fire
trucks to Africa.
The Chairperson interjected to explain that although the need for fire trucks
was understood, the Committee did not understand why a trip to London was
undertaken to view these donated trucks.
Mr Langa said that this official needed to sign the necessary agreements on
behalf of the receiving country and organisation.
Mr Gerber noted that a current Council member was also a shareholder in the
current ferry service provider for RIM. There had been an increase in
commission paid to these service providers, from R12.0 million in 2005 to R17.4
million in 2006.
Mr Langa answered that Councillors were compelled to declare their interests.
Mr Gerber expressed his dissatisfaction with this response. He requested RIM to
provide the minutes of the meetings with the particular service provider. This
was not a very healthy situation. Mr Trent expressed similar concerns.
Mr Gerber wanted to know whether the conservation of existing animal life on
the island was outsourced and who was responsible for the culling of excess
animals.
Mr Langa answered that the only animals culled had been wild cats and there
were currently no wild cats on the island.
The Chairperson hoped that the concerns raised by SCOPA were noted. These would
again be emphasised in the resolutions and recommendations to be made by the
Committee.
Afrikaans Taal Museum (ATM): Interrogation of Audit Report
Mr Trent commented that although the ATM was very small, the principle of
compliance and sound financial management was critical and SCOPA had a
responsibility to ensure that the Museum was held accountable r.
Mr Trent noted that the ATM reflected deterioration on its financial
management. It received five qualifications in 2004, which had been resolved in
2005, but qualifications were again detected in 2006. The emphases of matter
followed the same trend. Although the main excuse was the lack of capacity, the
ATM’s organogram did not reflect any vacancies. He asked ATM to explain what
capacity constraints were referred to in the Annual Report and what would be
done to correct this matter.
Mr Jack Louw, Director:ATM, did not believe that the capacity of the financial
management of the museum had deteriorated. The qualifications made were based
on the complexity of reporting donations received by any organisations.
The Chairperson acknowledged that that there may have been no regression,
and that the type of qualification might appear owing to the nature of the work
of the museum. Mr Louw should therefore not focus his response on that
particular qualification dealing with donations.
Mr Trent agreed that it was very difficult to recognise revenue in advance,
because the source was not immediately identifiable, given the nature of
donations. This was a very important issue, but a solution needed to be found.
Mr Trent commented that the general ledger revealed that adjustments to the
balances had not been made to be carried over for the following year. he asked
if these had now been corrected. He further noted that the trade and other
receivables and recovery of debts could not be adequately identified due to
under and over statements, amounting to R3 500. He asked if this had been
corrected.
Mr Louw confirmed that these matters had been dealt with.
Mr Trent commented that he had some difficulty in understanding the
relationships of the ATM to the Afrikaans Language Council. The related party
note to the financial statements said that the property
"Historia", registered under the name of the Afrikaans Language
Museum, was actually originally purchased by the Afrikaans Language
Council, and no income received from this property was included in the
financial statements of ATM. He asked for comments from representatives of the
AG.
The representative from the AGs Office explained that they were not involved in
that particular audit.
Mr Louw explained that the particular building was a public building and was
purchased by the Afrikaans Language Council in 1990. This sale was negotiated
with the relevant Minister at the time together with the Department of
Education, but it was decided to transfer the to the building to the Council
and not the State. This caused confusion as the Minister had nominated the
Council, and the building appeared to be private property. The audit function,
performed by PriceWaterhouseCoopers at the time, classified these buildings as
assets on the ATM’s financial statements. In 2004, the AG decided that this
building should not be on the financial statements of the museum because it
belonged to a private entity, although this private entity was also a public
council. This caused a matter of emphasis due to the significant value of the
property that was not reflected in the financial statements. The building
was currently treated as a separate building.
Mr Trent noted that there was a lack of understanding of the materiality and
significance framework. He requested Mr Louw to comment on this matter.
Mr Louw explained that this was a fairly recent matter. The ATM received a form
from the Department of Arts and Culture, which required the museum to state its
norms and standards. This was done according to the guidelines set out in the
PFMA, and was approved as a guideline for its work. At the time of the audit,
the auditors rejected the ten to twenty percent norms stated, and prescribed a
0.5 to 2.5 percent standard. The error then was mentioned as a Matter of Emphasis.
However, the standards had subsequently been corrected and had been sent to the
Minister for approval.
Mr Trent said that SCOPA would increasingly focus on the reliability of
performance information provided by government departments and entities. The AG
had noted that the objectives of the strategic plan were not adequately
documented in the Annual Report, to facilitate comparison and benchmarking to
the desired performance set out in the Strategic Plan.
Mr Louw explained that ATM did not align its objectives with its accounts. This
information had been sent to the AG and feedback was still pending. This matter
would be rectified in the following annual report.
Mr Trent was informed by the representatives from the AG that they could not
give feed back as Cape Town office personnel, who were not present, had done
the audit. Mr Trent said it was difficult to understand this if the relevant
officials were not present.
Mr Trent focused on the observation by the AG that ATM failed to supply sufficient
information regarding the provision of leave payments.
Mr Louw and the officials from the AG's office could not immediately respond to
this matter, and the Chairperson ruled that the Committee would make a follow
up at a later stage.
Mr Trent anticipated an improved audit report.
Mr Louw expressed his confidence that this would be the case.
Mr Gerber welcomed Dr Edna Van Harte, Chairperson of ATM, to the proceedings
and stated that he had welcomed her report in which she expressed her dissatisfaction
at the lack of full representivity on the ATM board. It did not reflect the
demographics of South Africa, and she had urged Minister Jordan to address this
shortcoming.
The Chairperson noted the comment made by Mr Gerber and ruled that a statement
by the Chairperson on this matter would probably better be dealt with before
the Portfolio Committee on Arts and Culture.
Mr Gerber noted that the liabilities for the 2004 financial year were reported
as R38 000 and this figure increased to R155 000 for 2005. The statement of
financial performance reflected a decrease in revenue, from R3.9 million in
2004 to R2.3 million in 2005. This also meant that there was a loss of
R34 000. However, the museum had a fixed deposit account at Absa Bank and a
money market fund at Sanlam. He asked whether, given the amount of money
managed and the loss experienced, these savings were not too high. He asked if
ATM had an investment policy.
Mr Louw explained that the fixed deposit was a grant received from the
Department and was paid out to all museums about two years ago. Another R430
000 was also received for its transformation plans. This money was currently
being utilised for specific transformation purposes.
Mr Gerber asked for clarity on the R843 000 received from the sale of goods in
2002.
Mr Gerber explained that was due to the building that had been taken off its
financial register, that was valued at R870 000.
Mr Gerber noted that the antique collection was not recorded in the fixed asset
register or any financial statements. It was accounted for in the acquisitions
register. He asked if there was a current evaluation based on the current
market value and asked how it was covered in the insurance policy.
Mr Louw confirmed that the museum followed a system of evaluation for its
antique collection and was also insured for about R200 000. Since the museum
had an intangible collection, many artefacts were not in its possession and
therefore the size of the insurance did not necessarily reflect the full value.
The antique collection was mainly audiovisual.
The Chairperson hoped that the next annual report reflected an improvement on
all the concerns raised in the 2005/2006 annual report. The issue of
representivity raised in the letter by Dr Van Harte, as well as by Mr Gerber,
should be taken up by the Portfolio Committee on Arts and Culture.
Department of Arts and Culture (DAC): Audit Report Interrogation
The Chairperson noted that further meetings would be held between SCOPA and
Playhouse Company and the Pan South African Language Board (PANSALB) on 8 May
2007. As these entities were accountable to the Department, it would be
expected to attend the proceedings.
The Chairperson noted that the Department had spent almost its entire budget as
expected by Parliament. The under spend was too a large extent due to the slow
delivery on the capital projects such as the Freedom Park Trust. He asked why
there were delays, and what was being done to ensure that these projects were
delivered on timeously.
Prof Itumeleng Mosala, Director General, DAC, answered that the Freedom Park
Trust project was very complex, particularly on the capital works side of the
construction. Many plans could not be delivered on for very specific reasons.
Both the Board and management of the Freedom Park Trust were unable to spend
the money allocated for the project by the Department. The Department was thus
forced to return the money to National Treasury (NT).
The Chairperson asked whether the Department was suggesting that the slow
delivery on plans for this project would continue until its completion.
Prof Mosala confirmed that, given the complexity of the project, delays should
be expected. This building project intertwined many South African political and
cultural issues and the political changes would affect the capital project
plans. When the Freedom Park Board made a presentation to the Presidency, the
feedback received had necessitated a review of certain aspects of the project.
The Chairperson focused attention on the R4.7 million bonuses paid out during
the 2005/2006 financial year. He asked the Department to explain this,
particularly in view of the inadequate performance management processes. He
noted that although they were approved, the payments were way beyond the
norm.
Prof Mosala explained that the DAC, as a department independent from the
Department of Science and Technology was only four years old. The processes
needed to be established and developed from scratch. There were continuing capacity
weaknesses due to the vacancies. Performance bonuses were paid to those staff
members who had acted in a dedicated way and overextended themselves in
difficult circumstances. There was no deviation from the standards under which
performance bonuses should be paid.
The Chairperson wanted to know what progress had been made to establish the
performance management system in the DAC. This was necessary to ensure that all
funds could be accounted for.
Prof Mosala explained that although the systems were in place, the capacity to
adequately enforce these systems was currently lacking. The Department needed
to increase the number of staff members and fill all the current vacancies.
The Chairperson acknowledged the high vacancy rate in the Department. In the
2005/2006 financial year the Department recorded 38.5% vacancy rate, an
increase from the previous year. He asked what was being done to deal
with such high vacancy rate, why the vacancies were not being filled timeously,
and how the Department would ensure that the delivery of services were not
adversely affected.
Prof Mosala said that there was an error in the information provided to the AG,
and the real vacancy rate was still at 28%. percent. 77 of the posts
listed as vacant were unfunded.
The Chairperson stressed that the vacancy rate was a great concern. He asked
the Department to explain how it had managed to spend 99% of its budget, in the
context of this vacancy rate, and enquired if this did not indicate that the
existing staff capacity was sufficient to operate the Department.
Prof Mosala explained that the existing staff were overextended already in
trying to reach the levels necessary to achieve the goals and work of the
Department.
The Chairperson wondered why the appointment process was so slow.
Prof Mosala acknowledged the slow pace of filling these vacancies. A new
structure for the Department, which incorporated its needs and demands, had
been presented to Minister Jordan. Discussions had also been held with the
Department of Public Service and Administration regarding the approval of the
staff capacity and skills required in the DAC. Some posts needed to be
transformed into higher level skilled positions.
The Chairperson noted that the DAC was developing a Personnel Skills
Development Plan for every employee in the Department, and asked for a
progress report.
Prof Mosala answered that this process had not yet been completed. It would be
aligned to the requirements of the pending new positions and posts required by
the new departmental structure.
The Chairperson wanted to know when this process was expected to be
completed.
Prof Mosala answered that it would be completed by March 2008.
The Chairperson observed that this time frame was not properly
determined.
Prof Mosala answered that the statutory processes approved by the DPSA at every
stage of its institutional development drove DAC. The progress was constrained
by delays in getting the necessary approvals, as well as the other legislative frameworks.
The Chairperson noted that the Department’s assets were all recorded on an
asset register, as stated in the 2005/2006 Annual Report. He asked if the asset
management systems were compliance with the milestones set out by the Asset
Management Reforms (AMR) of National Treasury.
Prof Mosala acknowledged that these systems were not as yet fully compliant
with the relevant standards. However, DAC was fairly competent in managing
weaknesses and problems arising out of its asset management system, which were
related to the current limited personnel capacity and leadership in the
Department. Further senior management appointments in the supply chain
management unit had been made, mostly at Chief Director and Director level. The
recent appointees proved to be very competent in managing these issues. The
next audit report would reflect an improvement of this system.
The Chairperson asked whether this response implied that the Department had
addressed the matters raised in the AG’s report.
Prof Mosala confirmed that the Department was in the process of addressing the
matters raised by the AG. A meeting with the audit unit had been held recently,
and the Department received strong leadership and guidance in this regard.
The Chairperson said that according to the AG, the asset management unit
operated without a senior manager. He asked for an explanation and asked if the
unit was sufficiently capacitated.
Prof Mosala expressed his confidence that the management of the unit was in a
position to improve the management of assets.
The Chairperson stressed that the adequate management of assets was very
critical because assets needed to be accurately accounted for. There had been
instances where Departments could not locate assets. Given the assurances
provided, the Department would be held accountable.
The Chairperson turned his attention to the reasons why staff were leaving DAC.
He asked that there be some clarity on the resignations as well as
transfers to other public service departments.
Prof Mosala explained that people made career changes for economic reasons. The
public service rearrangements were such that staff members could be appointed
to higher level posts at other departments.
The Chairperson urged Prof Mosala to refrain from providing generic responses.
He stressed that the Committee wanted to know about the exodus of staff from
DAC in particular.
Prof Mosala reiterated that DAC staff members had cited economic reasons when
leaving the DAC. Other departments also poached staff.
The Chairperson suggested that the human resource strategy might also limit the
growth opportunities in the Department. This policy could also be reconsidered.
Mr B Pule (UCDP) commented that although the unqualified audit report for the
2005/2006 financial year was welcomed, the Matters of Emphasis noted by the AG
needed to be addressed. He asked the Department to clarify why it had received
a Matter of Emphasis for the inadequate management of its asset register and
asked what the current status of this register was.
Prof Mosala said that different reasons accounted for the inadequacies in the
asset register. The separation of the DAC from the DST meant that assets needed
to be divided between the two departments, and separate asset registers
created. Insufficient capacity in this newly established unit, the suspension
of senior officials, and the move of premises also compounded the weaknesses.
The Department was busy dealing with this matter.
Mr Pule noted the discrepancies in the supply chain management, including
irregular expenditure of R3.9 million, which was incurred when there was no
formal agreement signed between the Department and the service provider. He
asked if there was an adequate supply chain management policy in place,
as well as related business-processing procedures. He enquired who had
authorised the payment of R3.9 million.
Prof Mosala confirmed that these processes were in place. The services were
properly awarded through a tender process, but the Department had not detected
that the contract had expired, since the senior management of this unit also
left at that same time. The Department continued to procure services by the
service provider.
The Chairperson ruled that the Department should not minimise the importance of
this error, as it highlighted the capacity and monitoring challenges faced by
the Department. The Director and COO were suspended for reasons that were not
yet known.
Prof Mosala acknowledged these challenges. He added that the contract could be
renewed.
Mr Pule wanted to know how the expenditure had been classified.
Prof Masala agreed that this had amounted to irregular expenditure. However,
the matter had now been rectified and the contract had been renewed.
Mr Pule asked how the Department justified expenditure when the monitoring
processes were not adequate nor properly followed.
Prof Mosala replied that this was an isolated incident. Monitoring procedures
were adhered to ‘under normal circumstances’.
The Chairperson commented that this question went beyond that particular
incident.
Prof Mosala said that the Department had established a separate section of the
supply chain management unit to focus on the monitoring of payments to
contracted service providers.
The Chairperson wanted to know how this monitoring was done, given the capacity
constraints.
Prof Mosala said that the Department had made specific appointments in this
regard. The management of the supply chain management and finance units had
been greatly improved.
Remarks by the Chairperson of the Portfolio Committee of Arts and Culture
Ms P Tshwete (ANC), Chairperson of the Portfolio Committee on Arts and Culture
expressed her dissatisfaction at the responses provided by the Department.
Although all Departments faced a skills shortage, DAC had not taken steps to
align itself with universities and higher education institutions to address
this matter. There were therefore no real mechanisms to improve and develop the
skills capacity within the department. Ms Tshwete added that given the number
of unemployed graduates, the high vacancy rate in the Department could not be
justified. The DAC needed to clarify the skills needed.
She noted that the Portfolio Committee had met with the CEO of the Freedom Park
Trust to discuss the challenges faced in the development of this project. The
issues highlighted by SCOPA would also be taken up with the Trust.
Chairperson’s closing remarks:
The Chairperson thanked the entities for their responses, which would be
used by SCOPA in drafting its resolutions and recommendations, which in
turn aimed to ensure that the challenges faced by these institutions could be
resolved. He stressed the critical role of the DAC in the transformation and
development of a representative South African culture. People, who had for
centuries been subjugated and their culture mutilated, must be given a sense of
identity. Freedom without a clear sense of identity and forward thinking
did not serve any purpose, so the central role of the Department could not be
overemphasised.
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