Boxing SA Annual Report

Sports, Arts and Culture

16 November 2009
Chairperson: Mr B Khompela (ANC) and Ms W Bhengu (ANC)
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Meeting Summary

The Committee noted that the planned interaction with the South African Sports Confederation and Olympic Committee had to be cancelled, as the President of that organisation was overseas. Members were frustrated that none of the executive could be present and called for harsh action should this body fail to respond to further invitations to meet with the Committee. All communication with this body would in future be done in writing.

The Board of Boxing South Africa was congratulated on the timely submission of its Annual Report. It was stated that the Auditor-General had given Boxing SA (BSA) a qualified report, and the reasons were explained. The organisation had financial problems. Its liabilities exceeded its assets. Poor accounting practices saw much of its expenditure being done without the provision of receipts. Part of the problem was the lack of a Chief Financial Officer, a post that had never been filled since the founding of the organisation. The preparation of the report had been hampered by the sudden departure of the Chief Executive Officer, who deleted all the necessary information from the computer systems on his departure.

The government grant paid to Boxing South Africa was proving to be insufficient to cover operational costs. Problems with lottery funding had been resolved, but this money was earmarked for staff training. There had been some resignations and departures of staff, but BSA was trying to manage with the remaining staff in order to cut costs. The Department of Sport and Recreation had undertaken to contract a private company to assist with the financial management of the entity. There appeared to be communications problems between Boxing South Africa and the Department. The operational results were outlined, but it was noted that there were difficulties in developing women’s boxing. Different provinces showed different levels of activity. The issues around promoters were discussed. One of the major reasons for the qualified audit was that the AG had not been satisfied that BSA was a going concern, since its liabilities exceeded its assets by R5.9 million. BSA had applied for an increased grant, and was also negotiating with South African Revenue Services (SARS) over refunds. It was, however, able to pay all its creditors. Sponsors were reluctant to get involved, which left BSA dependent on government funding. Some of the money owed to BSA from licence fees was still outstanding, and BSA had tried to engage agents to recover these debts. Media reports about payments to Board members had been incorrect, as they had not been paid even emoluments for attending meetings.

Members felt the need for intervention in the affairs of Boxing South Africa. They expressed their dismay at the state of affairs in the entity and were suspicious that important information was being concealed. Members asked what was the current situation with the former CEO, whether there had been attempts to contact him, why nobody had been seconded from the Department, the current status of the investigation and whether the finances were in order. Members asked if there was a written turnaround strategy and felt that there was a need to hold further meetings where the Department could also put across its point of view Members asked about the role of client support services, expressed their doubts whether either BSA or a private company would manage the finances properly, and questioned whether other funding paid to the Department could not be channeled to BSA. They expressed concerns about promoters who were making large amounts of money while the boxers themselves were not being paid properly, and expressed the view that BSA was failing the boxers, trainers and promoters. Some Members went so far as to suggest that the Board and all staff of BSA should be dismissed to stop the organisation from sinking further, as the same issues were recurring. There was a need to rekindle interest in the sport amongst minority groups. Members highlighted the four main issues as the need to appoint a CFO, to complete reports and tax returns, to pay the SARS debt and to eliminate wasteful and fruitless expenditure.  The relationship between BSA, the Minister and SRSA must also be improved.

Meeting report

Chairperson’s and Members’ opening remarks
The Chairperson spoke about the unfortunate rendition of the National Anthem by a singer before the Rugby Test against France the previous weekend. The Minister had sent correct copies of the lyrics of the anthem to all embassies. The President of the South African Rugby Union (SARU) would take corrective measures. The Test had been organised by the French authorities. The singer had apologised. The French Prime Minster had said that it was the irresponsible media who spread lies.

The Chairperson said that the problem with school sport was ongoing.

Mr J van der Linde (DA) said that school sport was in a shambles. The Director of School Sport at the Department of Sport and Recreation (SRSA) had sent a letter informing the authorities that the codes would be reduced from three to a single age group. The trials for all age groups had already been conducted. The budget for school sport had been increased but was still insufficient to accommodate all age groups. Not enough was being done for the children, an issue which had to be addressed.

Ms Noma Kotelo, Acting Chief Director, Client Support, SRSA, undertook to forward this information during the lunch break.

Mr L Suka (ANC) said that the problem with the anthem did not only apply to rugby, but to other codes as well. The Committee should speak to the Department of International Relations and Co-operation to sort it out. The singer of the anthem at the French Test match and the person who made the arrangements should be disciplined.

A Member said that the Minister should address the issue. All embassies should have a recording of the correct version of the anthem.

Mr M Dikgacwi (ANC) said that the Committee also needed to discuss the issue with the South African Sports Confederation and Olympic Committee (SASCOC).

The Chairperson said that the matters on the agenda included the presentation of the Annual Report (AR) of Boxing South Africa (BSA), the Annual Report of the South African Institute for Drug-Free Sport (SAIDS) and a briefing by SASCOC on the 2008 Beijing Olympics and preparations for the 2012 London Olympics.

Mr L Phori, Portfolio Committee Secretary, said that he had spoken with the Chief Executive Officer of SASCOC. This organisation had intended to brief the Committee at a meeting on 10 November 2009, but that meeting had been cancelled. A letter had been sent to SASCOC indicating that the new date would be 17 November 2009. However, the President of SASCOC was not available, on the new date due to an overseas visit.

Mr Dikgacwi asked when the letter advising the change of date had been sent.

The Chairperson said that this had been done long ago. He did not have a copy of the letter to hand. The first meeting with SASCOC had been cancelled due to a joint sitting of several Committees as well as other Parliamentary business on that day.

Mr Dikgacwi did not understand why this had happened as SASCOC had been in Cape Town on 10 November.

Mr Phori explained that his communications with SASCOC had all been verbal. He had spoken to the Chief Executive Officer on the telephone. The SASCOC executive had been in Cape Town for SASCOC’s Annual General Meeting the previous week.

The Chairperson instructed that all communication with SASCOC, in future, had to be in writing.

Ms T Lishivha (ANC) said that SASCOC was not a one-man show. There were Vice-Presidents who could have come to Parliament.

The Chairperson agreed that the matter could not be closed that easily. No institution was bigger than Parliament. SASCOC had been born from an Act of Parliament. If it failed again to respond to a call to attend the Committee, a summons would be issued, to be followed by a warrant of arrest. He wondered if the entire SASCOC executive was overseas with the President. SASCOC was showing defiance, but would lose the battle dismally. Mr Julius Malema had said that one needed to hit the dog to get the owner to come out of the house.

Mr Dikgacwi said that Members needed to see a copy of the letter so that they would know that the preliminary work had been done properly.

Mr Suka concurred with the Chairperson. Another attempt must be made to contact SASCOC. He would assume that SASCOC knew the rules of Parliament, and therefore needed to explain. The agenda for the meeting with SASCOC must be clear so that they could move forward. The actions of SASCOC harmed the integrity of the Committee. He proposed that a meeting be set up in the week leading up to 4 December 2009, the date for the draw for the 2010 World Cup finals.

The Chairperson said that the Secretary must check on the availability of the SASCOC executive. He thought they might be staying overseas for Christmas. The powers of the National Assembly were described in Section 56 of the Constitution. SASCOC was similar to any citizen. The first letter to SASCOC would be cordial, but a harsher tone would be used in the second. He repeated his instruction to the Secretary that no verbal communication should be used. The Committee would interrogate SASCOC. There were some painful matters to be discussed.

Boxing South Africa (BSA) Annual Report 2008/09 presentation
The Chairperson noted that the Boxing South Africa (BSA) Annual Report for 2008/09 had been delivered on time. He was pleased that the invitation of the Committee had been answered. The early delivery of the Annual Report (AR) was a great improvement, as in the past it had often been delivered to the Committee only after the State of the Nation speech.

Dr Peter (M) Ngatana, Chairperson, Boxing SA Board, introduced the BSA delegation. He had two Board members with him while a third had apologised due to other commitments. Even though the size of the Board had been reduced to four it was sufficient to achieve quorum at their meetings.

Dr Ngatana admitted that BSA had received a qualified report from the Auditor-General (AG) but he wished to outline the context. The Chief Executive Officer had left. The process of compiling the AR had only started in June. Certain documents could not be found, and the Chief Executive Officer had erased all information from the computer system. BSA had been forced to start from scratch. The Board took responsibility for this, saying that its trust in the former Chief Executive Officer had been misplaced.

Discussion
The Chairperson interrupted the presentation at this point as Members had several questions.

Mr Dikgacwi said that the issue was with the Chief Executive Officer (CEO). He asked if there had been any attempt to contact the CEO, or to ask why he had erased the information.

Dr Ngatana replied that the post had been advertised. The BSA Board had met with the Director General (DG) of SRSA after the CEO had left. BSA had been advised to wait, as the Minister would initiate an investigation. This was due to be completed by the end of October 2009. The Department would have supplied a person to help BSA, but this arrangement had fallen through. Since the establishment of BSA by the Act of 2001, there had never been a Chief Financial Officer (CFO). This was a problem that was being addressed. SRSA had promised to second someone to act as CFO, but this had not happened. Matters were coming together now. BSA had tried to make contact with the former CEO, but he did not return messages and was keeping a low profile. BSA might institute legal proceedings.

Mr D Lee (DA) asked how BSA could be sure that all the relevant information had been included in the AR. It seemed very suspicious, and he was particularly concerned about the finances. Some boxers were very unhappy with the current situation. He pointed out that BSA had received millions in funding, and he wanted to know where it was all going.

Dr Ngatana understood Mr Lee's concerns. The information in the AR was correct, even though some of the documentation was missing.

Ms Lishivha said that BSA was a national asset. This kind of behaviour could not be tolerated.

Mr Suka said that the AG’s report questioned the leadership in SRSA. BSA was one of its entities that was giving a bad impression. He asked why SRSA and its DG were so lax over the absence of a CFO. BSA had been crippled for some time. He asked why there had not been a forensic audit. An interim person should be in place to stabilise the financial problems. He asked what role SRSA played. He was unhappy with the situation.

Dr Ngatana was not sure if the report had gone to SRSA. The Department should not be blamed.

Mr Suka still wanted to hear from SRSA on these issues.

The Chairperson said that SRSA should take the issue of the CFO seriously. He asked what help the Department was providing, to compensate for the lack of a CFO. SRSA gave an overall report of its own which reflected on the activities of the entities under its authority such as BSA. SRSA had never mentioned the fact that there was no CFO at BSA. This was a recipe for continued adverse audit findings.

Dr Ngatana confirmed that SRSA knew that BSA did not have a CFO.

Mr J McGluwa (ID) was not comfortable with the discussion. The CFO was the heartbeat of any organisation. He was dismayed that there had been no forensic audit. The Committee and the Minister should intervene. He called for the AG to launch an investigation. He suspected that some information was missing. An investigation was the only way to uncover the truth.

Ms Kotelo said that SRSA had taken care of its responsibilities. BSA had tried to get someone to perform the duties of the CFO. This was a challenge. The Department had placed an advertisement for a company to manage the finances of BSA. This was a six-month process that was now in its final stages. A company had responded and would make a presentation to SRSA on 19 November. If successful, the appointment would be confirmed the following day. BSA had this information in writing. The Minister had instructed SRSA to investigate the affairs of BSA. SRSA was currently looking for money to fund a forensic audit.

The Chairperson said that the Committee would have to present the report in the National Assembly and make recommendations. The Committee would draw up its recommendations once the AR was finalised. If it was accepted, then the Committee's recommendations would be enforced.

Mr Suka asked if there was a written turnaround strategy that included transformation issues.

The Chairperson said that SRSA must provide the strategy. He felt that the Department should be equipping its own people to manage the entities under its authority. It was a waste of money to outsource functions that were the core business of SRSA. Many companies followed a hit-and-run strategy, and were paid more than the CEO.

Mr Claude Bassuday, BSA Board Member, welcomed the Chairperson's comments.

Mr Archie Jonas, BSA Board Member, thought that the reason for the Committee's invitation was to get the truth. The minutes would zoom into one thing only. He felt that it was a waste of money for the Board members to fly to Cape Town to tell the Committee the same thing time and again. There would be another qualified AG report for the 2009/10 AR. An acting CEO had been appointed, but this person's speciality area was public relations. The former CEO had absconded. A decision had to be taken. BSA had to engage with two Ministers. There was a volume of work to be done. Correspondence with SRSA was slow. In one case a letter to SRSA had gone unanswered for nine months. BSA had only met the Minister once. The turnaround strategy had been explained to the Select Committee in the National Council of Provinces (NCOP). No one in SRSA seemed to know what the budget was. SASCOC said that BSA could not be a member, and yet the acting CEO was being given jobs by SASCOC.

Mr Suka felt that the Committee should return to hearing the rest of the presentation. There was a serious issue over leadership. The staff were deeply demoralised.

The Chairperson said that explanations were needed on issues that were not being attended to. The erasure of information was a serious matter. If the investigation was ongoing, he asked why no information was available. The Board was accountable on a daily basis. BSA did not seem to know anything about the investigation. Perhaps SRSA thought that the Board should be dissolved. Leadership was a painful issue and the Board was being indicted. Although BSA had met with the Committee, it had not met with higher authority.

Dr Ngatana said that the Board had met with the new Director General of SRSA twice. BSA had not heard more about the investigation. They were in regular telephonic contact.

The Chairperson asked what role Mr Dumele Mateza was playing.

Dr Ngatana replied that SRSA was better placed to answer that question. Their expectation was that he would consult BSA on major issues. He had heard Mr Mateza on the radio and read about him in the press. The Minister had written a letter of appointment for Mr Mateza in June. The first sight that BSA had of this letter was in July. SRSA had asked BSA not to interfere in the process.

The Chairperson said that this was not covered by the Act. He could not accept that situation. It seemed to him like a criminal investigation.

Ms Lishivha asked who was paying the costs.

Mr Jonas said that he felt that the whole boxing sector was being made to look like the worst offender.

Mr Dikgacwi said that it was a sad story. The Committee needed to make serious recommendations. Previous issues were being repeated. The presentation would not take the Members anywhere. He suggested that the Chairperson allow the Members to make recommendations and then close the meeting.

Mr Suka felt it a pity that Ms Kotelo was not empowered to reveal the stance of SRSA. A special meeting was needed where both sides could explain themselves. The responsibility for the line functions of an entity lay with the DG. The authenticity of the document was questionable.

Mr Loyiso Mtya, Acting Chief Executive Officer, BSA, stated that the turnaround strategy was in place for all issues. Action plans were in place. He suggested that the delegation should be allowed to make its presentation. The financial aspects were problematic, but BSA’s administrative procedures in all other areas were top quality. It would be much better if there was more funding available. So much more was being achieved from less.

The Chairperson felt that the Board Chairperson had made a thought-provoking statement. He would give the delegation a chance to make their presentation. All the talk was about development. The only sign of this was the Baby Champs programme. The investigation was coming, and there was unhappiness. He was concerned about the value for money in the output of the programme. It was a serious situation. He invited the BSA delegation to continue with its presentation.

Continuation of presentation by BSA
Mr Mtya agreed that there should be a forensic report, to expose the true situation. There had been four CEOs since 1997. Mr Mateza was one of these, until he was fired. The Minister had then taken over control of the sport. There had never been a CFO, and yet BSA was audited like any other entity. BSA had to pay audit fees of R700 000 out of the grant of R2 million. Funds were appropriated by Parliament. It had to cover overheads such as salaries and marketing. BSA’s income consisted of licence fees from boxers and sanctioning fees for tournaments. There was limited sponsorship and fund raising. Provincial governments were also assisting. BSA had financial commitments in the staging of title fights and women's boxing.

Mr Mtya then presented the organogram. This was determined by the Act. The resignation of four staff members had reduced the staff complement to nine. BSA had adopted twenty policies including a Disciplinary Code. Despite the resignations, it was managing to get by without appointing replacements, in order to save costs. BSA was, however, unable to present training and development programmes for the staff members in the year 2008/09, due to financial constraints. Lottery funding had not being received because of the incorrect procedure being used in the application. The relationship with the Lottery had since been rekindled.

Mr Mtya reviewed the operational results. There had been a successful awards night. BSA staged 107 tournaments, of which 30 were international. The Baby Champs project continued to be successful. This project provided for the advancement of boxers, officials and promoters. It also gave BSA the platform to develop women's boxing. This would answer many questions raised in the investigation. It provided chances for rural boxers. The Theta skills programme was ongoing. The first certified graduates would emerge at the end of January 2010. Sixteen girls had been able to turn professional and two had gone on to win international titles.

Mr Mtya presented statistics on the number of tournaments staged. There were different levels of activity in the different provinces. No tournaments at all had been staged in Limpopo and the Northern Cape, and only a limited number in the Western Cape. This was due to a low level of funding by those provinces. BSA would visit all provinces and make a proposal to the respective provincial governments.

Mr Mtya said that the targets regarding female boxing had not been reached. Promoters were indifferent to the participation of women. BSA had to promote women's fights themselves. Promoters would be requested to include one or two female bouts in each tournament programme. Some people were of the opinion that some of the 107 tournaments should have been cancelled. The Act allowed for special arrangements to be made. Boxing was all about the staging of tournaments.

Mr Mtya said that the question of financial management at BSA had been discussed over and over again. Since his appointment, he had concentrated on operational management. Internal audit was required. BSA had a policy to have an unqualified AG report. He discussed the issues that had been highlighted by the AG. BSA was trying to obtain the information needed. Payments had been made but people had not provided receipts. The AG had determined that there had been operating expenditure of R346 239 that could not be supported by documentation. One of the problem areas was the provision of refreshments. Promoters often used their own people, although they were supposed to obtain three quotes first, and they often did not provide receipts. Some of the money was now being refunded.

Dr Ngatana said that BSA did not set up the events. This function was ceded to licensees. A sanctioning fee was charged.

The Chairperson asked why payments were still being made without receipts. This was a continuous problem.

Mr Mtya said this was being done correctly now. There had been a drastic improvement recently.

Mr Mtya said that a major reason for the qualified report was the AG's opinion that BSA was not a going concern. Liabilities exceeded assets by R5.9 million. BSA had applied for an increased grant. It had been able to pay salaries. He said that expenditure of R1 million, classified as fruitless, by the AG could not have been avoided. It was attributed to issues surrounding tax and unfair dismissals. BSA was negotiating with the South African Revenue Services (SARS) over refunds. It was able to pay all its creditors.

Mr Mtya said that quarterly reports had been a problem. They had been delivered late. The two most recent reports, during the current financial year, were both submitted on time. The AG had picked up on a problem regarding agreements with SRSA. There were problems of non-compliance with National Treasury regulations. This had been happening for several years. BSA was now engaging with the AG on these issues. The appointment of Mazars Internal Auditors would help with financial control. He was confident that everything would fall into place. Risk assessments were also an area that required attention.

Mr Talifhani Khubana, Finances and Administration Manager, BSA, said that SRSA paid BSA an annual grant of R2 million. There was other income to the tune of R269 000. Provincial government paid grants of R1.4 million but these were exclusively for projects. The income from other sources was approximately R4 million, which included licence fees, sanctioning fees, sponsorships and donations. Sponsors were reluctant to get involved, which left BSA dependent on government funding. The revenue for 2008/09 was approximately R7.6 million, and expenditure was R11.9 million, which left a shortfall of R4 million.

Mr Khubana said that this had led the AG to express an emphasis of matter that BSA was not a going concern. BSA had lost R1 million the previous year. Current assets amounted to R2.4 million. Current liabilities were R8.2 million. Other receivables were approximately R300 000. BSA was awaiting correspondence from SARS regarding the outstanding tax and penalties. The government grant would have to be increased in order to cover overhead expenses such as salaries, water and electricity. Some of the money owed to BSA from licence fees was still outstanding, and BSA had tried to engage agents to recover these debts.

Mr Khubana said there were some misconceptions. The SRSA grant for the quarters ending June and September 2009 had not yet been paid. R659 000 had now been paid by the Lottery and would be used for training and development of staff. It would not be used to cover expenses. Various measures would be used to save costs. The AR would in future be produced in-house rather than being outsourced. Remaining staff would share the duties of those who had resigned. BSA was looking to buy those assets that were currently being leased. Other expenses would be cut where possible.

Mr Mtya said that a newspaper had published allegations that Board members had paid themselves R117 000. BSA's response was that Board members were entitled to emoluments for meetings attended but did not receive a salary. These emoluments had been withheld until such time as BSA was in a better financial situation. There was at present a tax implication, as the Board members were still liable to be taxed on these payments even though they had been withheld.

Dr Ngatana said that this was a serious matter. No payments had been made to Board members.

Mr Mtya said that there was an allegation that the former CEO had received a salary increase from R624 000 to more than R1 million. Much of this extra payment was in fact for medical expenses incurred by Mr Khumalo, which were recovered from his salary.

Discussion
The Chairperson asked where the media got their information. Newspapers such as the Mail & Guardian were causing damage by publishing incorrect information. This could not be allowed to continue. BSA should check its office for information leaks. He asked if the AG’s report was credible.

Mr Mtya said that March 2010 was just around the corner. It was the intention of BSA to return a clean audit, or at least reduce the current situation to small issues.

Mr Khubana said that internal recording standards were applied. All amounts had to be disclosed. He confirmed that the media reports were not well informed.

The Chairperson said that there was no credibility in the media.

Mr Suka said that SRSA had a responsibility to support codes in various areas, including BSA. The Department had given R25 million to three non-governmental organisations (NGOs). He asked why BSA was struggling.

Ms Lishivha asked what the role was of Client Support Services. She was sceptical of the Department's ability to manage BSA's finances, and of management by a private company. There was no money to appoint an outside company. There was a conflict of interest in the appointment of Mr Mateza, as he would have to investigate himself. He was still a television presenter. The wasteful expenditure was worrying. She asked what the position was regarding labour laws. This should not be allowed to lead to a qualified report. Federations would take advantage. She asked about the R50 000 monthly payment to Mr Naidoo. She asked why the money from SRSA had not yet been received. She asked why BSA was not part of SASCOC.

Mr Mtya said that two staff members had been dismissed and had been paid out.

The Chairperson asked how this was regarded as fruitless expenditure if the courts determined the dismissal. He assumed that the Council for Conciliation, Mediation and Arbitration (CCMA) was proceeding.

Mr Khubana said that fruitless expenditure was defined as being expenditure that could have been avoided. If the courts or CCMA found that the dismissals had been unjustified, then all the costs involved were regarded as fruitless.

The Chairperson understood the reasoning. He asked what would happen to SASCOC over the Athletics South Africa (ASA) workers who had been dismissed.

Mr Khubana said that costs could only be recovered if the workers had been dismissed fairly. This would not recur in the next financial year.

Mr G MacKenzie (COPE) said that his questions were very similar to those asked by the ANC Members. Support Services should support public entities. SRSA had given R25 million to three NGOs and R3.5 million to nameless rural beneficiaries. Of the R249 million for the mass participation programme, it was clear that nothing had gone to BSA. Of the fruitless and wasteful expenditure, some R500 000 was for SARS penalties. He asked what the principal amount owing was. He asked if there was any resolution with SARS.

Mr Khubana said that value added tax (VAT) liabilities and tax issues were being examined. BSA was awaiting a final resolution with SARS.

Ms Kotelo replied that funding for LoveLife was channelled through SRSA. The amount for this organisation was R27 million. It came directly from National Treasury and SRSA acted as a post office for this funding. None of this could be diverted to SRSA. There was a programme to address the strategy of SRSA. About 90% of the beneficiaries were scholars. A workshop was planned for November. The other NGO involved was the Sports Trust, which served to further the objectives of SRSA. The allocation for SAIDS was R5.6 million, and for BSA it was R1.9 million. The National Treasury determined these amounts. The Department could facilitate a meeting with National Treasury, where BSA could state its case.

Mr Lee said that BSA had been established for a specific reason. He had not agreed with its establishment at the time, but it had been formed to provide good administration. Promoters and boxers were being exploited. The situation made sponsors reluctant to get involved. On page 38 of the AR, only one promoter was mentioned, namely Branco Sports Promotions. “Baby Jake” Matlala was a partner but was being exploited. He had earned R200 000 in five years while Branco pocketed millions. He asked if BSA was really helping boxing and boxers. Certain individuals were being enriched. There was no development programme in the North West but that province had hosted two title fights and five international fights. A lot of money was going to Branco, while BSA was failing the boxers, trainers and promoters.

Dr Ngatana appreciated the way in which Members were raising their concerns. Professional boxing could not run its own events, as it had no facilities. The South African National Amateur Boxing Organisation (SANABO) could make its own arrangement for amateur fighters. The Act ceded the right to stage professional tournaments to the promoters. The frequency of these events was not as regular as BSA would like to see. The promoter had a certain jurisdiction. BSA could only make suggestions as the promoter was running a business. Each promoter was given dates by television and would then arrange a programme. The South African Broadcasting Corporation (SABC) would then buy the rights. Mr Brankovitch did seem to have more dates. BSA had to deal with the question of opportunities for up and coming promoters. Branco Sports Promotions had been run as a company. In fact, many promoters ran their activities as a company or close corporation. It was difficult for BSA to intervene in their affairs. They never knew how the profits were shared until the partners split up. Contracts were in place.

Mr Dikgacwi said that none of the AG's requests had been met. If there was no improvement, nor any involvement from SRSA then there would be no changes. The AG had found BSA to be in a mess. There was a need to spend time with SRSA. He asked why boxing was being sidelined. The issues were not entirely of the making of the former CEO. There were issues with SRSA. He could not understand the nine-month response time on BSA's letter. The Committee had to make recommendations that day, even if they were unpopular.

Mr McGluwa felt that the Board and all the staff should be fired. BSA was in a pit, and Parliament must do something. If not, then the organisation would die a slow death. Some correctional measures had been taken, but it seemed that the same problems were recurring all the time. The same situations prevailed in the provinces. BSA was not attempting to deal with the findings the AG had made in previous years. The audit committee was not functional. Quarterly reports had never been provided, or were at best provided late. The AR had details of the provincial base of boxing. There were a lot of activities in the Free State. He asked if it was a co-incidence that this was the residence of some of the Board members. The mandate of the Committee was to improve the representivity of minor groups. Most of the residents of the Northern Cape were coloured. He asked if the targets required had been reached. There was no development in KwaZulu-Natal, Limpopo or Mpumalanga. The Acting CEO had mentioned the turnaround strategy, but this must be in line with the budget, and nothing had been presented on this. He asked about the sources of funding. He asked how BSA would be able to afford a programme of going to the provinces, given its financial constraints.

Dr Ngatana said that there had to be a balance with development. The development of boxers was very much a responsibility of SANABO. Discussions had been held on how BSA could implement development without infringing on the turf of SANABO. BSA could develop skills and get promoters involved. It had to coerce promoters to include women on their bills. However, BSA had to tread lightly. There was a misconception about sponsorship. Sponsors did not want to see negative images. BSA could not guarantee exposure for sponsors. It was not true that Vodacom had sponsored BSA to the tune of R27 million. The sponsorship had been paid in three instalments. Only R1 million had gone to BSA and the rest had been paid to the SABC and SuperSport.

The Chairperson said that in the last term of Parliament the Committee had encouraged BSA to rekindle interest in the sport amongst minority groups. There was a certain kind of fire when a white boxer stepped into the ring. If sport was a catalyst for social change then more white and coloured boxers were needed.

Mr Dikgacwi said that the Treasury gave LoveLife R27 million. He asked if National Treasury broke down the allocation.

Mr Suka appreciated the responses made by BSA but said that the Committee needed to take matters deeper. He was not satisfied with the impact of Sub Programme 2 on boxing. Money was given to LoveLife, Score and the Sports Trust. Swimming was a small, elite group yet it received a grant of R1.6 million. Boxing was given almost the same. He could not understand the logic behind the allocation. BSA should first develop a business plan and then conduct a needs analysis. SRSA could then make a submission to Treasury. A global sum should be given to SRSA, which it could then allocate to the different codes. LoveLife should also be invited to meet with the Committee.

Mr Jonas asked if funding was in the interests of a boxer or a business. The question of the SABC came to the fore. Suspensions did make an impact. For the third year BSA had applied to SASCOC for membership. Two weeks ago the acting CEO had been requested to make a follow-up to the application. The position was that BSA could not be given membership. This was to prevent a sea of boxing organisations from applying. They were comfortable with SANABO as a member. He felt this could not be true.

Dr Ngatana said that if BSA wanted to be a member of SASCOC then it would have to affiliate through SANABO.

The Chairperson said that in terms of the Sports Act, SASCOC operated at a high performance level. On that basis he could not understand the response.

Mr MacKenzie said that four things had to be done. The appointment of a CFO was crucial. Reports and tax returns had to be completed. The debt to SARS had to be paid. Wasteful and fruitless expenditure had to be eliminated.

Dr Ngatana said that a request had come from the African Boxing Union to hold their next meeting in South Africa.

The Chairperson said that BSA had a responsibility to help with the development of the sport on the Continent. It must not forget who had helped South Africans in the past. This must be done with open arms. South Africa was the last country to achieve its freedom. He asked what costs were involved in the sanctioning fees. The promotion of female boxing could not be seen as optional. The mass participation programme was unearthing talent. Hockey was the only sport where gender transformation had been achieved even though it was mainly a white sport.

The Chairperson said that the Department may not like BSA, but it still had on obligation to it. Amounts such as the R346 000 that had been paid out without receipts would ultimately have to be written off. The AG had been present at SRSA's presentation. The loss of R4 million was huge. There had been no investigation. R1 million had been classified as fruitless expenditure. The AG had said that entities such as BSA, with its relatively low income, could not be expected to pay the same audit fees as bigger departments. The method would change to one where charges were on a pro rata basis.
Mr Mtya said that the sanctioning fees were made up of 5% of gate takings, 5% of sponsorships and 10% of live broadcast rights.

The Chairperson said that the AR was at least better than the reports from the previous seven years. Some things still needed to be done. One of these was improving the relationship between BSA, the Minister and SRSA.
 
The meeting was adjourned.


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