Conditional Grants and Capital Expenditure: hearings with Sport & Recreation MEC's

Meeting report

FINANCE SELECT COMMITTEE
25 January 2006
CONDITIONAL GRANTS AND CAPITAL EXPENDITURE: HEARINGS WITH SPORT & RECREATION MECS

Chairperson: Mr T Ralane (ANC) [Free State]

Documents handed out
Free State Province presentation
Limpopo Province presentation
Gauteng Province presentation
National Treasury Presentation – as presented at 16 January 2006

SUMMARY
The Free State, Limpopo and Gauteng provincial departments outlined their mass participating programme grant allocation for the 2005/6 financial year, the extent to which the allocation had been spent and it provided a description and status report of each of the projects involved. The Free State department provided a summary, status and monitoring capacity report on its Building for Sport and Recreation Programme for 2005/2006, and noted that that department had spent 97% of its total grant allocation during the 2005/6 financial year. The Limpopo provincial department had not spent R752 000 out of the total R2,6 million allocated in 2005/6, with the Gauteng provincial department spending R1,8 million out of its total R2,6 million allocation in 2005/6..

The Committee noted that many of the Free State department’s projects involved schools, and it ought clarity on the responsibilities of that department and its provincial departments of Education and Public Works and local municipalities with regard to providing infrastructure within schools. Concern was raised with the fact that the department had not concluded a service level agreement for its mass participation programme, as indicated in the presentation. It was felt that the department’s spending priorities did not allow sub-standard facilities in the under-privileged areas to receive accelerated funding to allow them to be brought up to speed with the affluent facilities, which only perpetuated inequality. The department did not envisage any overspending in the current financial year. The Limpopo department was asked whether it encouraged the playing of the new streets sports codes
because that department was not interested in building proper sports facilities

The Chair engaged in a lengthy and incensed discussion with the Gauteng department representative regarding the R35 million allocated to it for the upgrading of competitive sports facilities. The Chair believed that it was not the provincial department’s primary function to fund competitive sport, and Members agreed that government cannot be seen to be subsidising large, commercially viable sports facilities.

MINUTES
Free State Province Presentation
Ms Suzan Mnumzana, Free State Sports, Arts, Culture, Science and Technology MEC, indicated the following errata in the presentation: the monitoring capacity section would deal with the 2004/5 financial year, the status report would deal with the 2003/4 financial year and the amount of sport equipment purchased on Slide 9 was R215 632. She outlined her department’s projects from 2000 to 2006. A status report was provided of the Building for Sport and Recreation (BSRP) for the 2005/2006 financial year with regard to the funds allocated and the capacity it created, the number of facilities established, as well as a detailed description of each project and the current status of the project. The monitoring mechanisms in place for BSRP was outlined, as well as the gender, youth and disabled figures. The province’s 2003/4 mass participation programme was outlined, as well as the department’s capacity to monitor the mass participation programme. The department had spent 97% of its allocation during the 2005/6 financial year, which was due to the fact that the programme was young and the department was on a learning curve. A gender, youth and disabled persons breakdown of the programme was provided. The business plan guidelines for the 2005/6 mass participation programme grant was outlined, which included the personnel, training, equipment and management items. A detailed description of each BSR project during the 2000-2006 financial years was provided.

Discussion
Mr Z Kolweni (ANC) [North West] stated that the presentation did not provide detailed and sufficient information on the province’s spending trends, the amount of funds allocated and the percentage of the allocation that was spent and the reasons for the failure to spend the entire allocation.

The Chair agreed, and stated that some of the 2004/06 projects mentioned in the presentation did not even indicate the budget allocated to those projects, which was problematic.

Ms Mnumzana responded that the information was contained in the portion of the presentation that provided a detailed description of each project and the current status of the project, the funds allocated per financial year, the extent to which the funds have been spent and whether the project would be completed within the current financial year. She stated that if the Committee required additional information her office could provide such information to the Chairperson by the end of the following week.

The Chair noted that many of the department’s projects involved schools, and this created a problem as the relationship between the Sports, Arts, Culture, Science and Technology department and the provincial department of Education was not clear, because there appeared to be an overlapping of responsibilities. The role of the provincial Department of Public Works with regard to providing infrastructure within schools was also not clear.

Secondly, the objectives of the mass participation programme was to benefit the community broadly, yet the department’s projects have focused on schools alone. The Committee would now have to have follow-up meetings with the Free State Sports, Arts, Culture, Science and Technology department as well as with its Education and Public Works provincial departments to the bottom of the matter.

Thirdly, he stated that the role of municipalities in providing services such as water, ablution facilities and electricity to the projects outlined by the presentation, was unclear and needed to be investigated.

Mr B Mkhaliphi (ANC) [Mpumalanga] raised concern with the neglect of the facilities once they were established, which occurred due to a lack of certainty as to which provincial department was responsible for those facilities. The problem needed to be addressed. The end result was that those facilities became white elephants and amounted to nothing more than wasted expenditure.

Secondly, he asked the department to explain the steps it was taking to combat theft and vandalism at sports facilities.

Ms Mnumzana replied that the municipalities were responsible for the maintenance of the facilities, but her provincial department was responsible for the construction of libraries.

The Chair expressed his concern as the Free State Sports, Arts, Culture, Science and Technology department had not built any libraries in the current financial year.

Ms Mnumzana answered in the affirmative. She explained that the municipality was responsible for the construction of the library, whereas her department was responsible for running the library. It was proposed that the municipality itself take control of the running of the libraries, but it has not yet been approved. The department would thus remain responsible for the running and training of libraries until the municipality itself became capacitated.

The Chair stated that the Committee would investigate the matter in greater detail with the South African Local Government Association (SALGA) in its meeting with that institution on the following day.

Mr Kolweni noted that the Free State Sports, Arts, Culture, Science and Technology department had not concluded a service level agreement (SLA) with regard to the mass participation programme, as indicated in the presentation. He asked whether that was because no SLA was needed, or that one was needed but had not yet been concluded.

Ms Mnumzana responded that the SLA for the 2006/7 financial year had not yet been signed. A draft SLA had been finalised with other relevant provincial departments.

Mr Teboho Loate, Free State Sports, Arts, Culture, Science and Technology Head of Department (HOD), added that the department had concluded a Memorandum of Understanding (MOU) with the Free State Education department in 2005, which identified a number of co-operation areas. The department planned to sign SLAs with other provincial departments as well as with municipalities, in order to address the problem with maintenance of facilities in the under-serviced areas. At the moment the department had agreed to an interim arrangement whereby the municipalities would be responsible for ensuring the security of the facilities in order to prevent vandalism etc. He stated that the department had initially hoped to conclude the other SLAs by February 2006..

The Chair noted that the presentation indicated areas in which the department had built sporting facilities without involving the municipality. He contended that all the problems that were currently faced by the provincial department would not have materialsed if it had in fact first consulted with the municipality concerned, as the project would then have been concretised in that municipality’s Integrated Development Plan (IDP). He asked whether the department was in the custom of normally imposing infrastructure on municipalities.

Mr Loate answered in the negative. He explained that the municipalities were in fact involved, but the municipality did not make provision for the security of the facility until such time as the facility was handed over to it. The department decided to proceed with the handing over, and the municipality itself must provide security for the facility until it was finally handed over to the municipality.

Mr Mkhaliphi commended the Free State Sports, Arts, Culture, Science and Technology for seemingly allocating funds equally amongst all the target areas, but contended that equity considerations did not influence the allocation decision. The result was that the sub-standard facilities in the under-privileged areas were not allowed to receive accelerated funding to allow them to be brought up to speed with the affluent facilities. This disparity succeeded only in perpetuating inequality.

The Chair agreed with Mr Mkhaliphi and ruled that the criteria used to identify target areas must be evaluated further.

Ms A Mnchunu (IFP) suggested a possible partnership between the provincial departments and the private sector to address the country’s problem with youth were out of school but were unemployed, and who ended up as street children and criminals. She stated that sport went a long way to keeping children occupied, especially as so many young people were unemployed at the moment.

Secondly, she asked whether the department was working together with the provincial department of Health to accommodate the health risk of the elderly who were involved in the mass participation programme and the BSP programme. .

Ms Mnumzana responded that the Sports for All initiative would include these concerns. Those persons would not be left behind because it was acknowledged that exercise was one of the most important activities to improve the health of all, especially the elderly. Her department was running a programme which went out into the communities to encourage their participation in the sports activities.

The Chair asked whether the department envisaged overspending in the current financial year, and the steps it was taking together with its provincial treasury to address it.

Ms Mnumzana replied that her department did not foresee any overspending. The Free State provincial treasury was monitoring the situation and steps were being taken to prevent it, such as the monthly financial reports, which was an important monitoring mechanism.

She informed the Committee that she had concluded an MOU with the Free State Education department, which identified the need to work together in developing sports in schools and in ensuring sports facilities were maintained.

The Chair stated that the critical aspect of that MOU was in identifying the exact contribution of each of the provincial departments, and which was honouring its commitment.

He stated that further that the Committee would follow up on some of the matters raised, and it would evaluate the Free State department’s budget and expenditure broadly. It would also investigate whether the provincial department’s budget spoke to the business plan, and whether the expenditure was efficient and appropriate.

Limpopo Province Presentation
M Joe Ndlovu, Limpopo Sport, Recreation, Arts and Culture Acting HOD, formally tendered the apology of the Limpopo MEC. He stated that the presentation focused on the department’s mass participation grant, and stated that any additional information required by the Committee could be made available at a later stage. The provincial department’s Siyadlala mass participation programme was allocated R1 million for the 2004/5 financial year, and it absorbed 32 co-ordinators for four hubs. He provided a breakdown of the sporting codes in the four hubs, which included street soccer, street basketball, indigenous games and a fun run. In the current financial year four additional hubs were identified, and nine co-ordinators per new hub were employed. An amount of R752 000 out of the total R2,6 million allocated had not yet been spent.

Discussion
The Chair sought clarity on what precisely was meant by "hubs".

Ms Ndlovu replied that "hubs" were essentially the co-ordinating centres for the programmes, and were located in four districts in the province.

The Chair noted that all the eight provinces identified for the grant received the same amount of R4 million in the 2006/5 financial year, and the Committee would be engaging National Treasury on the reason for the "one size fits all" allocation in the Division of Revenue Act (DORA). He noted further that the Limpopo Sport, Recreation, Arts and Culture department received a reduced amount of R3 million for the 2007/8 whereas all the other provincial department received an increase for that financial year, and sought clarity from the department on that.

Mr Ndlovu responded that his department had received the full R3 million. He contended that the question on the reasons for the provincial allocations was best responded to by National Treasury itself, because it used its own formula.

The Chair agreed, but stated that the equity considerations were not properly taken into account by National Treasury when making the decision. He stated that the matter would be taken up with National Treasury when it briefed the Committee in March.

Mr Kolweni noted that the National Treasury presentation delivered on Monday 16 January on provincial grant expenditure indicated that the Limpopo Sport, Recreation, Arts and Culture department spent between 50-70% of its mass participation programme grant by November 2005, whereas the Free State department at that point had already spent more than 70% of its allocation.

Secondly, he sought clarity on the interesting new sporting codes such as street soccer and street basketball.

The Chair asked whether the streets in the Limpopo province were in the proper condition for the playing of the street soccer and the other new sporting codes.

Secondly, he asked whether the new codes a problem with traffic. He suggested that the Limpopo Sport, Recreation, Arts and Culture department encouraged the playing of sports in the streets because it was not interested in building proper sports facilities.

Thirdly, the provincial department’s relationship with the Limpopo department of Public Works was important here, and he reminded Mr Ndlovu that the Committee was very well aware that the two provincial departments did not enjoy the best of relationships.

Mr Ndlovu replied to the questions by stating that the terminology used may be misleading, and explained that people did not literally play in the streets, nor was it the case that they played in the streets because there were no proper facilities. The correct name would probably be community soccer or community basketball etc. because they were in fact events that took place at a community level, and they were co-operative rather than competitive.

The Chair asked whether the department had created proper community facilities or whether people played on the open veld.

Mr Ndlovu responded that in the past his department received allocations for the building of sports facilities, but those allocations now formed part of the IDP support grant. The overwhelming majority of municipalities were primarily concerned with ensuring the provision basic services, and the reality was that spending on sporting facilities was not a priority. The department used to be able to provide sports facilities via the building for sport programme but it was no longer in a position to do that because, as explained earlier, it no longer received funding for it.

He assured the Chair that the department had provided sporting facilities in almost every community within the province, and some even had indoor facilities. There were however certain facilities that were quite basic, but the co-ordinating hubs themselves were located in the Multi-Purpose Community Centres (MPCC’s).

The Chair stated that Mr Ndlovu’s response also suggested an overlapping of responsibilities of various provincial departments. The matter must be evaluated further to ascertain whether resources of the different provincial departments, such as their Municipal Infrastructure Grants (MIG), could not be pooled together to fund the community facilities.

Secondly, the Chair expressed concern with the problem with acting senior posts within the provincial department, which bedevilled consistency with accounting officers. Permanent posts were required to ensure proper accountability.

Mr Mkhaliphi was concerned by the vast number of volunteers involved in some of the department’s projects, and in fact it appeared as though they even drove some of the projects. Whilst the use of volunteers was welcomed as it addressed unemployment, it was however not a desirable situation for volunteers to remain within the programme for years and years. He asked whether funds could not be found within the provincial department’s budget to elevate them and to alleviate their plight or expectations.

Secondly, he noted the absence of any mention of the involvement of community development workers in the presentations delivered by the Free State and Limpopo provinces. Their absence from its projects needed to be considered further.

Gauteng Province presentation
Mr Vuyane Mpofu, Gauteng Sport, Arts, Culture and Recreation Acting HOD, informed the Committee that the MEC was unable to attend the meeting as she was at the Gauteng Executive Council meeting. He stated that the presentation outlined the mass participation programme conditional grant and capital expenditure and infrastructure trend allocations from the 2002/3 financial year to November 2005, and it also explained the reasons for the significant increases in those data trends. A detailed breakdown was provided of the initial allocation and actual expenditure to date for each capital expenditure and infrastructure project for the 2005/6 financial year. A progress report was provided on each project, as well as the reasons for under- or over-expenditure and the steps taken to address the problem. He noted that the municipalities were objecting to assuming responsibility of libraries, because Schedule 4 of the Constitution did not list libraries as a local government competence.

He responded to the questions raised earlier by the Committee regarding the new street soccer and street basketball codes, and informed the Committee that the community was encouraged to use the available open space to conduct the activities whilst the municipality was not yet able to provide the necessary sporting facilities.

Discussion
The Chair stated that the Gauteng province had a large number of hubs yet it received the same funding allocation for the mass participation programme as provinces with a fewer number of hubs. He failed to understand the logic.

Mr Mpofu replied that the primary issue was how the department maintained the hubs and projects, as the entire allocation would have to be spread very thinly to accommodate all. The department planned to increase its current number of hubs to 30 in the current financial year. He contended that the Gauteng department had more hubs because its population density was higher than any other province, which was one of the factors considered. Furthermore, some of the staff of the hubs were in fact part of provincial department’s staff complement whereas other provincial departments’ staff complement could consist of more volunteers, and thus the volunteers would not necessarily absorb as large a portion of the funds as the department’s staff would.

The Chair stated that the upcoming national budget included a large allocation to provinces for the construction of libraries, and therefore no province could in future complain of a lack of funding for such infrastructure. His only concern was whether the Limpopo and Free State provincial department were able to provide computers and other necessary equipment in its libraries.

Ms Mnumzana answered in the affirmative, and informed the Committee that her department had already identified some libraries as priorities for receiving such equipment..

Mr Ndlovu answered in the affirmative. He stated that his department had an ICT budget, but the challenge was linking those library computers to the internet.

The Chair encouraged the provincial departments to include such information in their presentations.

Ms D Robinson (DA) [Western Cape] was delighted by the Chair’s statement that libraries would receive greater funding. As mentioned earlier discussions were being held at national level as to which department was responsible for the funding of libraries, with the result that libraries at the moment were an unfounded mandate. She stated that it was vitally important that libraries were managed by librarians, because they were people with specialised knowledge in the field. She welcomed the provision of computers in libraries, but contended that at times too much emphasis was placed on providing computers and not books. She cautioned against government paying less attention to the provision of books and librarians. Furthermore, Ms Robinson was of the view that libraries were probably best placed under the responsibility of the municipality.

The Chair stated that the Committee would follow up on all the concerns raised by Ms Robinson.

Mr Mkhaliphi welcomed the good presentation. He asked whether the department would be able to spend its budget by the end of the financial year.

The Chair sought clarity on the department’s responsibility with regard to funding competitive sport. It was not the provincial department’s primary function, yet it requested R35 million from its provincial treasury for the upgrading of four targeted competitive sport stadia. He suggested that it was surely the role of the professional sports clubs and the South African Football Association (SAFA) to fund the maintenance of such facilities. He argued that the provincial department’s core responsibility was ensuring community participation in sport.

Mr Mpofu replied that national priorities were cascaded down to all spheres of government, such as growing the economy job creation. The department viewed its investment in competitive sport as a means to achieve such goals.

The Chair reiterated that the conceptual problem was that the provincial department’s core business was not competitive sport, but rather community sport. Furthermore, the presentation only referred to the competitive sport investment in soccer, and appeared to exclude all the other sporting codes. It created this bias, which was problematic. The R35 million could be used in other more dedicated and focused job creation projects, such as the Expanded Public Works Programme (EPWP). He was of the view that the investment should not be made by the provincial department.

Mr Mpofu responded that the reason for the R35 million was that the provincial department believed that If it was to encourage professional teams to play in Gauteng, then the sporting facilities must be up to standard.

The Chair maintained that the maintenance of competitive sporting facilities was not the core responsibility of the provincial department.

Mr Mpofu explained that sporting stadia belonged, at moment, to the municipalities.

The Chair stated that if that was the case, he failed to see the reason for the involvement of the provincial department.

Mr Mpofu replied that the provincial department maintained the hubs because they were run in partnership with municipalities. The department was working with the municipalities to improve and maintain the sports facilities. He stated that it was clear that he and the Chair would have to agree to disagree on this matter.

The Chair attempted to arrive at the root of the matter by inquiring into department’s strategic plan, and asked whether it outlined the objectives of the provincial department’s competitive sport programme.

Mr Mpofu responded that one of the critical issues for the department job creation, and the competitive sport item was included in the provincial department’s business plan for that very reason.

The Chair requested a copy of that business plan within the next three days. He stated that he raised this issue because the department received that R35 million in July 2005 whereas the strategic plan was submitted much earlier, and he thus wanted to check whether there was any realignment and whether the department’s measurable objectives were in line with the business plan.

Mr Mkhaliphi stated that the Committee required more information on this issue, because it could be that the facilities that were benefiting from the R35m were in fact the large commercial stadia that were able to sustain themselves. The question then was why government was subsidising such commercially viable sports facilities.

The Chair thanked Mr Mkhaliphi for raising a good point, as the allocation of the R35 million did appear to create a slippery slope. It would now be difficult for government to justify not making such allocations to other commercial stadia, such as Loftus Versfeld for example.

Secondly, he noted that the department had concluded an MOU with its provincial department of Public Works to address reasons of over- and under-expenditure, and informed Mr Mpofu that the Committee was aware that the Gauteng Public Works department "was not in the best condition". In the first nine months of 2005 that department had spent only 1% of its total budget, yet it managed to spend 103% of its budget over a two-month period. It was thus clear that the Committee must prioritise a visit to Gauteng.

Concluding remarks
Mr Mkhaliphi stated that the Members were very grateful for the interaction with the provincial department, as the input assisted them in executing their roles as provincial delegates. He assured the provincial departments that the interaction was not a witchhunt, but was instead aimed at strengthening provincial government.

Mr Mpofu thanked Committee for granting his department the opportunity to address it. He stated that he understand that the hearings were not aimed at punishing the department but were instead aimed at assisting to improve its service delivery.

Ms Mnumzana thanked the Committee for the interaction. She committed to responding to the Committee’s requests before the end of the following week. Her department shared the Committee’s concerns that sport infrastructure be provided to those who need it and that the infrastructure must be used for the desired purpose.

Mr Ndlovu expressed his department’s grateful for the opportunity and apologised for any shortcomings in the presentation. He stated that he would raise the issue of the acting senior positions with the Premier, and he was confident that when the department returned in May it would have proven that it could make good on its commitments.

The Chair reminded the Committee of the problem that occurred during 2005 in which the NGO sector in the Gauteng province expressed their dissatisfaction that the provincial government was not investing in it sufficiently. He thus encouraged the province to redirect funds appropriately and into profitable measures.

The meeting was adjourned.