Minister’s Briefing on Budget, Developments, Achievements & Programmes & Quarterly Reports on Monitoring of Public Entities: Department briefing

Meeting report

ARTS AND CULTURE PORTFOLIO COMMITTEE
19 June 2007
MINISTER’S BRIEFING ON BUDGET, DEVELOPMENTS, ACHIEVEMENTS & PROGRAMMES & QUARTERLY REPORTS ON MONITORING OF PUBLIC ENTITIES: DEPARTMENT BRIEFING

Acting Chairperson: Mr P Maluleke (ANC)

Documents handed out:
Department of Arts and Culture briefing on Budget 2007/08
Department of Arts and Culture’s Strategic Plan 2007/08 – 2009/10 financial years
Progress Report on Developments and Achievements of 2007 (please email [email protected])
Programmes in the Department for 2007 (please email [email protected])
Quarterly Reports on Monitoring the Entities
List of supporting documents

Audio Recording of the Meeting

SUMMARY
The Minister of Arts and Culture Mr Pallo Jordan gave the Committee a detailed briefing on the developments, achievements and programmes in the Ministry. The six programmes were fully outlined with an indication of what public entities were included in those programmes. The Department had recently been reorganised and the new structure was tabled. The Department of Arts and Culture briefed the Committee on the priorities and the activities planned to support those priorities. Major areas mentioned included library services and the literacy campaign, emphasis on African languages literacy and writing, hosting of international conferences, commemorative activities in respect of Oliver Tambo and Steve Biko, promotion of music and creative activities. The Department co-operated with the Department of Housing on the programmes for the upliftment of informal settlements, and with the Department of Education in developing youth services and the early childhood learning project. The Department wanted to augment its strategy of programmes. It also aimed to advance the electrification and digitalisation of all libraries and build library collections. It was gratified to note a doubling of visitors to the International Book Fair held recently. Members were appreciative and supportive of the Ministry and Department’s progress and achievements.

The Department briefed the Committee on its oversight of public entities, and noted that this mandate was conferred by the Public Finance Management Act and the founding legislation of the entities. The monitoring mechanisms were described. It was noted that public entities that fell into financial difficulty would need to be assisted by the Department and that strict oversight was necessary. Examples were given of previous interventions. The Auditor General had indicated that asset management was a major problem in government institutions, and there was a need for specific Treasury guidelines. The Department had produced its own guidelines and assisted entities also by conducting workshops, including those for council members. The Department was in daily communication with public entities, there was a performance management system and budgetary increases had increased compliance and assisted in raising the numbers of unqualified audit reports.

Members asked questions on improving library services to the rural areas, the funding of public library services, supporting arts and crafts in the rural areas, the responsibility for the provision and maintenance of museum buildings, world heritage sites and the proportions of budget respectively allocated to staff expenses and special programmes. They stressed the need for the Committee to be kept abreast of and invited to visit Department of Arts and Culture projects.  It was noted that the Minister’s briefing should ideally be given before the budget vote.
 
The Committee adopted minutes of the previous meeting and postponed adoption of the Budget Hearings Report.

MINUTES
Mr P Maluleke (ANC) was appointed as Acting Chairperson.

The Acting Chairperson introduced and welcomed a new Member of the Committee, Mr M J Bhengu (IFP). He also welcomed back Mr B Z Zulu (ANC) and wished him good health.

Briefing by the Minister of Arts and Culture on developments, achievements and programmes in the Ministry
Mr Pallo Jordan, Minister of Arts and Culture, gave a detailed briefing illustrated by slides. He noted that the Department of Arts and Culture (DAC) had as its primary aim the development and preservation of South African culture to ensure social cohesion and nation-building.

The Department had six programmes. The administration programme conducted overall management of the department and provided centralised support services. The second programme, arts and culture in society, aimed to increase and facilitate access to and broader participation in arts and culture through policy formulation, legislation and equitable funding. It supported performing arts institutions, embraced 2010 World Cup projects and the National Arts Council. The third programme of the national language service aimed to develop, promote and protect the 11 official languages through policy formation, legislation, and policy implementation. It included the Pan South African Language Board (Pansalb). The fourth programme of cultural development and international co-operation aimed to increase the access and participation of grass roots arts practitioners in cultural industry economic activities, through training, legislation and international opportunities. This programme included the National Film and Video Foundation. The fifth programme of heritage promotion aimed to ensure the transformation of the heritage landscape as a vehicle for nation-building and social cohesion. This programme included the National Heritage Council, and declared cultural institutions and the South African Heritage Resources Agency. The sixth programme of national archives, records, meta-information and heraldic services included the National Archives and libraries, and aimed to enable transparency and evidence-based good governance of information, as well as protect the heraldic and symbolic inheritance of the nation through institutional management, regulation and development. Funding support towards public libraries was included in this programme under the heading ‘Community Libraries’. The Department must subsidise the as “bricks and mortar institutions” like museums and their personnel, in addition to assuming responsibility for more abstract work such as the responsibility for name changes.

Mr Sidney Selepe, Deputy Director-General, DAC, gave further details of the work in the six programmes from 2007 to 2010. The flagship projects reflected Departmental priorities. These included the literacy campaign, libraries, the African Languages Literacy Museum, and South Africa’s hosting of the International Libraries Liaison Committee (IFLA) in July 2007. Further activities would include a literary journal, commemoration of the late O R Tambo and his efforts for the freedom of South Africa, the Cuba-Africa Project, the Crafts Centre, South African Music to the World, hosting of the Africa and Diaspora Conference during 2007, the Steve Biko Memorial in September 2007, and the South African Centre for Creative Industries. Bead Manufacturing, Integrated Sustainable Human Settlements, the Department of Arts and Culture Youth Programme, and Arts and Culture in Schools and Early Childhood Development were also of importance The project with Malaysia was still being planned. The Department was reviewing means of increasing support for all the Department’s work in creative industries.

The Department was engaged on a restructuring process. In April 2006 the Minister approved the establishment of six branches, each headed by a deputy director-general.

There was cooperation with the Department of Housing in the programmes for the upliftment of informal settlements, and with the Department of Education in developing youth services and the early childhood learning project. The Department wanted to augment its strategy of programmes and in particular aimed to support music and musicians, and was considering assistance to craft artists and raising the profile of visual arts.

The Department had programmes to promote literature, develop literacy and support libraries. A national liaison committee was addressing the shortage of libraries and trying to create more opportunities for youth to have access to books. A study had shown that the best endowed libraries were in the Western Cape and Gauteng and the poorest endowed in the Eastern Cape and Limpopo. Township libraries were poorly endowed although low density urban libraries were well endowed. People complained that there were no libraries nearby and that the books were not of interest. DAC aimed to advance the electrification and digitalisation of all libraries and build library collections.

The Minister reported on a gratifying doubling of visitors to the Cape Town International Book Fair from 16 to 19 June 2007. The Minister strongly emphasised the importance of developing a culture of reading.

Discussion
Ms D Van der Walt (DA) asked how far community (public) library services could be extended into the rural areas by the use of mobile libraries. She also said that arts and crafts should be promoted not only in the cities but also in the rural areas, and asked that the Committee, as a matter of routine, should be invited to visit the Department’s projects.

The Minister replied that mobile libraries were a dimension of the Department’s plans to serve villages that were widely separated geographically.

Mr M Matlala (ANC) asked if a problem arising from a Centre for Scientific and Industrial Research (CSIR) employee who had cheated craft artists had been resolved.

The Minister responded that the Department wanted to assist craft artists by eliminating the middlemen who bought their products at low prices and resold at a great profit in the towns. The middlemen cheated the craft artists, who tended to be located mainly in the distant rural areas. He said that the specific instance cited had related to a person that the CSIR had assigned to crafts people in the rural areas. There was now monitoring, and that individual had been dealt with.

Mr M Sonto (ANC) was encouraged by some of the plans, and it was gratifying that Africa was rediscovering its own identity rather than seeing itself as an appendage of Europe. There had been complaints that there was currently no manufacture of beads in South Africa, and it was commendable to see this reflected in the Department’s plan.

The Minister noted that there were arguments for and against the importation of beads. Given the globalisation of markets, it could be argued that it was more economic to let mass producers continue to make the beads and export them to South Africa.

The Acting Chairperson asked about the provision of school libraries and their pattern of use, especially in the rural areas.

The Minister replied that school libraries were not the Department’s responsibility. It was the Department’s intention was to make books available in the indigenous languages.

The Minister emphasised the importance of reading to children, including reading to them at bedtime. The culture of reading was sadly very poorly developed in South Africa. DAC wanted to meet with the Department of Education to augment its 2007 massive literacy campaign by promoting library refurbishment and engaging in a drive to promote literature in the African languages. Revival of interest in poetry amongst the youth was a priority.

Ms D Ramodibe (ANC) asked about the allocations to the heritage service and translation.

The Minister said that it was necessary to increase the allocation. The language service faced severe competition from the private sector, which paid much higher salaries. There was a danger that the Department’s language service would become just a training ground for the private sector. Negotiations were currently under way regarding civil service salaries.

Ms N Mbombo (ANC) said that when the Committee had visited libraries and museums in the Northern Cape, they were the best, and the Members found a great deal of information, including valuable material in isiXhosa.

Ms P Tshwete (ANC) asked if Department members were aware of the African World Heritage Fund.

The Minister said that many world history sites on the African continent were in danger of being de-listed as world heritage sites, largely because the countries in which they were situated were too poor for maintenance of the world heritage sites. It was hoped to raise money for a ring-fenced fund to support world heritage sites on the African continent and for a campaign to increase the number of sites. Heritage sites were a concern for all developing countries.

Ms Tshwete agreed with Ms Van der Walt that the Committee should be invited to visit the Department’s projects, so that Members could inform their constituency offices about the work that the Committee and the Department did together.

The Minister agreed that this was a good suggestion. He said that there should be an list of projects made available to the Committee, which would give better opportunity for oversight of the Department’s projects. The Portfolio Committee Members were usually advised of national days’ activities, but would be kept more closely informed.

Mr George Lekgetho (ANC) said that in 2004 the Minister had conducted a survey of the funding of libraries and he had asked if funding should go directly to the municipalities or to the provinces. He argued that if funding went directly to the provinces, there was delay in its reaching the intended beneficiaries.

The Minister said that in view of the Department’s focus on community or public libraries, the Department was making a conditional grant to the provinces. This grant was to be used only for libraries and no other purpose. A conditional grant would be ring-fenced, could not be misallocated, and correct use of the grant was protected by legislation.

Quarterly Reports on the Monitoring of Public Entities: Briefing by Department of Arts and Culture
Mr Themba Wakashe, Deputy Director-General, DAC, noted that the Department was mandated by the Public Finance Management Act (PMFA) and regulations, the founding legislation of individual entities, and the National Treasury Practice Notes in its monitoring of public entities. The Department followed the National Treasury Guidelines, the National Treasury Practice Notes, and the King II Report.

Mr Mike Rennie, Director, Department of Arts and Culture, described the budget and reporting cycle for the 2007-2008 financial year. Monitoring mechanisms would cover the annual strategic plans of entities, estimates of national expenditure (ENE), PMFA quarterly reports, and annual reports. Quarterly reports detailed income and expenditure, PFMA compliance, and performance indication.

Mr Rennie said that a public entity was not a listed company on the stock exchange, and would therefore never close down. If they were in financial difficulties, the Department would have to meet them halfway. Strict oversight was necessary.

Mr Rennie described examples of a Departmental interventions. These had included the dismissal of the Board of the State Theatre and appointment of an administrator, the appointment of an interim administrator at the National Flagship Institution, the appointment of an interim financial manager at the National Library, additional financial assistance to the Market Theatre, financial assistance to the Voortrekker Museum to appoint a financial expert for an interim period, and enhancing accountability by declaring playhouses as cultural institutions in terms of the Cultural Institutions Act.

The reports of the Auditor-General had indicated that asset management was a major problem in government institutions. There were not enough detailed guidelines from National Treasury for public entities, and Treasury was now dealing with this issue. The existing guidelines were written as if for government departments, but public entities typically did not have staff with sufficient financial expertise and experience to understand and follow these guidelines.

The Department therefore sought to assist public entities by providing its own guidelines. These embraced the delegation of authority, a materiality and significance framework, a self-assessment questionnaire for Council Members, a supply chain management manual, the purchase and distribution of a “Toolkit for Audit Committee members”, a database of various policies, and performance reporting for 2006/07.

The Department had further assisted public entities by conducting two workshops on compliance and audit report issues. A workshop for council members in May 2005 had covered the King II Report on Corporate Governance, the Public Finance Management Act, annual reporting, code of ethics, fraud risk indicators, risk management, and “how officials get into trouble”. Further training included multi-disciplinary workshops on general policy and legal challenges, the impact of legislation on museums, the relationship between national and provincial museums, supply chain management, and financial and human resource management. The Department also conducted two workshops on the extended public works programme, and two workshops on the supply chain management system.

The Department maintained daily communication with public entities. Visits were exchanged, there was close co-operation with the Auditor-General’s Office, liaison with the National Treasury, and information was given to public entities on any new directives or guidelines from the National Treasury or any other source. The Minister had instructed the Department also to introduce a performance management system. Additional funding had been allocated in 2004/05 to establish internal audit and audit committee functions. There had been substantial increases in 2006/07 to increase capacity to deal with compliance issues. R35 million had been allocated to museums since 2003/04 for transformation purposes. Substantial funds had been allocated to the security of collections at museums from 2007/08, rising from R39 million in 2007/08 to R80 million in 2009/10.

Job evaluations had been conducted at the National Flagship Institution, the National Library of South Africa, the Afrikaans Language Museum, the Voortrekker Museum, and the Natal Museum.

Continuous support had been provided to public entities with regard to identifying and managing risks, and legal advice in general.

There had been a rising trend of unqualified audit reports received by public entities supported by the Department, from 52% in 2003 to 70% in 2006.

Discussion
Mr M Bhengu (IFP) said that it was important that funding for public entities be subject to the major performance measures, such as financial input against the performance output.

Ms Van der Walt asked why the Minister’s briefing had been given after the budget vote, as a prior briefing would have been more informative and useful. She commented that management of assets was very important. Public entities continuously complained that their buildings were in bad condition, that they had disputes with the Department of Public Works, and were concerned about security. It was necessary to resolve these issues with the Department of Public Works.

Mr Wakashe said that the Department attached much importance to co-ordination with the Department of Public Works. Public entities typically approached the Department of Public Works directly and tried to play off the two Departments as a bargaining ploy. This disrupted budgeting and oversight. Continuous supervision was needed. The legacy problem was critical. The Department was insisting that it engaged firstly with public entities’ strategic plans before the entities could proceed with expenditure, in order to forestall incorrect spending. Any subsidy must be linked to accountability.

Ms van der Walt was impressed with the Department’s interventions. She emphasised the need to resolve issues with the Department of Public Works.

Ms Tshwete said that the National Treasury had given insufficient guidelines.

Mr Rennie responded that the Auditor-General was aware of insufficient treasury guidance for public entities and would address this issue.

The Minister said that the Department followed up the submission of public entities’ reports, but did not have sufficient leverage. Often the responses by Chief Executive Officers would be pleasant, but non-committal. The Department had resorted to some strong measures, including withholding funds. Perhaps it was necessary to give the Department more leverage and power. No one could say that the Department was complacent.

Mr Sonto was perturbed that the Department of Arts and Culture was unable to exercise control of public entities’ expenditure at a micro level.

The Minister said that it was impossible for the Department to micro-manage and it could not be expected to look over the shoulder of every CEO. There would have to be a general solution to what appeared to be a standard weakness in the various entities and institutions.

Ms Tshwete asked if the Voortrekker Museum’s financial expert’s term of office was already completed.

Mr Rennie replied that it had long been completed.

Ms Van der Walt asked if the 252 vacancies in the Department had been filled.

Mr Themba Wakashe said that the Department was filling vacancies. The Government had issued instructions that all vacancies in the public service must be filled within the next six months.

Mr Bhengu asked about the funding of programmes as against the funding for staff expenses, which was a contentious issue.

Mr Wakashe said that the major portion of budgetary allocations to pubic entities was spent on salaries rather than on programmes. Salary scales were still inadequate. Staff members were generally motivated by passion, commitment and dedication, but their plight deserved attention.

The Minister admitted that the Department did not pay competitive salaries, and that put the Department in a difficult position if the Department were to shift funding to service delivery. The Department valued its experienced personnel. The dilemma was especially notable in the national language service. It would be hard to retain graduate staff if salaries could not be raised.

Ms Van der Walt asked about the number of outstanding questions to be answered in the National Assembly, and observed that the Minister of Trade and Industry had no outstanding questions.

The Minister confirmed to Ms Van der Walt that there were three outstanding questions for Arts and Culture and he was sure that they would be answered by the end of the current parliamentary quarter.

Ms Tshwete said that most museums, during the budget hearings, said that their buildings belonged to the Department of Public Works. Most museums had no facilities for the disabled. She asked whose responsibility it was to upgrade the museums’ buildings to accommodate the disabled, and which Department was responsible for the maintenance of the museums.

Mr Wakashe said that Department was co-operating with the Department of Public Works to upgrade museum buildings to accommodate the disabled. It was a considerable challenge.

Committee Business
The Committee adopted the minutes of the previous meeting.

In view of the fact that Members had not yet had the opportunity to study the Committee Report on the budget hearings, this stood over for approval at a later date.

The meeting was adjourned.