Meeting SummaryThe Deputy Minister of Sport and Recreation briefed the Committee on the success of the 2010 FIFA Soccer World Cup and South Africa’s other recent sporting achievements. He tried to allay the concerns of Members that the stadiums built for the World Cup would become ‘white elephants’ and would not be financially viable.
The Director-General of the Department of Sport and Recreation presented the 2009/10 annual report to the Committee. Details of the Department’s performance in implementing its strategic programmes and an overview of the financial performance were provided. The Department had sent 99.4% of its budget. The Department achieved an unqualified audit report but the Auditor-General had commented on items of irregular expenditure and fruitless and wasteful expenditure. Other comments referred to the late submission of financial reports by certain provinces and the failure of provinces to return unspent funds. The business plans of four provinces were approved late. The Department had developed an action plan to address the comments made by the Auditor-General. The major challenges faced by the Department were the lack of capacity to monitor the implementation of programmes, insufficient funding and inadequate office space.
Members asked questions about the late submission of reports by the provinces; the monitoring of programme implementation; the inadequate office space; the interaction with sports federations; the development of young athletes, the maintenance of the World Cup stadiums; the items of irregular and fruitless and wasteful expenditure and the response of the Department to address these issues; the lack of sport facilities in schools and the investigations into the allegations of supply-chain corruption and nepotism in the Department.
Briefing by the Department of Sport and Recreation (SRSA) on the 2009/10 Annual Report
The Department of Sport and Recreation was represented by Deputy Minister Mr Gert Oosthuizen, Mr Vernie Petersen (Director-General), Ms Sumayya Khan (Chief Operations Officer), Mr Makoto Matlala (Chief Financial Officer), Ms Lulu Sizani (Chief Director: Corporate Services), Dr Bernardus Van Der Spuy (Chief Director: Strategic and Executive Support), Ms Rohini Naidoo (Director: School Sport), Ms Noma Kotelo (Director) and Ms Thokozile Mkhonto (Director).
Mr Oosthuizen advised that Minister Stofile was unable to attend the meeting as he was on a visit to
The 2010 FIFA Soccer World Cup had contributed greatly towards nation-building in
Mr Oosthuizen provided some statistics of consumables sold at the stadiums during the World Cup. For example, 771,000 litres of beer, 1.2 million bottles of soft drinks, 390,000 hot dogs and 139,000 boerewors rolls were sold. The average amount spent per person on consumables was R32.35. The World Cup was just the beginning and there was a need to build on the legacy projects.
Mr W Faber (DA,
Mr J Gunda (ID,
Mr Oosthuizen said that Government and FIFA had agreed on 10 stadiums for the 2010 FIFA World Cup. The host cities were the owners of the stadiums. He said that one should not listen to the prophets of doom. In order for the stadiums to be financially viable, it was necessary to have 25 events per venue per year. If the available figures were correct, that target was being reached. The stadiums must be managed by the people. He was glad that Stade France had handed the Greenpoint Stadium back to the City of
2009/10 Annual Report of the Department of Sport and Recreation
Mr Petersen presented the briefing on the annual report (see attached document). The aim of SRSA was to improve on the quality of life of all South Africans by promoting participation in sport and recreation and the participation of South Africans sports persons and teams in international sporting events. The Department worked with the Department of Education on school sport, had a working relationship with SASCOC and was represented on the forums of national sporting federations.
The office accommodation of SRSA was inadequate. A new organisational structure was developed by the Human Resources division to bring SRSA in line with the strategic plan. The grant allocated to SRSA in terms of the Division of Revenue Act (DoRA) had been significantly increased. The grant provided funding for projects in the provinces. However, the effective monitoring of these projects remained a challenge for the Department due to limited capacity. The management of the Lotteries Sport and Distribution Agency continued to pose a serious challenge and the allocation of Lotto funding to sport, without any input from SRSA, remained a matter of serious concern. Discussions regarding the revision of the criteria applied were being held. The delivery of sport at a regional level needed urgent attention. Transformation continued to be a challenge because of the lack of adequate funding. The need to build capacity in both the Governmental and Non-Governmental Organisation (NGO) sport sectors remained an important component in the process of sports development. SRSA needed to do much more regarding marketing and communication of projects.
Ms Khan presented an overview of the performance of the Department’s programmes. With regard to sport support services, the SRSA supported 55 national federations both financially and logistically. 99.55% of funds available were transferred to clients. Service level agreements and memoranda of understanding for transfer payments were signed with clients. For club development, a total of 858 sports clubs were supported, as opposed to the target of 600. Concerning education and training, 1878 persons were trained as sports event volunteers. The quality management system for education and training development was reviewed. Eight learning programmes were developed and updated. The register for accredited training service providers was updated. The SRSA had provided support for scientific research. 308 new junior athletes were supported to participate in international competitions. 1041 elite athletes were supported as well. Talent identification and development guidelines were completed. The reasons why the target of 1157 elite athletes to be supported was not met were because of financial constraints and the increased need to provide support for new junior athletes.
The SRSA had a programme for community participation. 13959 persons were trained as coaches, administrators, technical officials and facility managers. The target of 13500 was surpassed. 4,546,800 persons were participating in the mass participation programme. The Department contributed to HIV and AIDS awareness initiatives through the Heroes Walk project. More than 1440 older persons participated in diverse activities, ranging from soccer to egg-and-spoon races.
With regard to the school sport programme, only 50% of the school sport regulatory framework was completed. Completion of the framework required that extensive consultation took place. Twelve DoRA monthly reports were submitted, eleven DoRA monthly meetings were held and 180 DoRA school monitoring visits had been undertaken. The annual programme of school sports events was 75% completed. Financial constraints hampered the completion of this programme. A total of 5657 schools were mobilised for the 2010 mass mobilisation programme. 75% of memoranda of understanding with provinces for the delivery of national programmes on behalf of SRSA were completed. Five national school sport championships were facilitated and co-ordinated in accordance with the memoranda of understanding.
Mr Makoto presented an overview of the Department’s budget and expenditure trends. The Department had spent 99.4% of the budget for the 2009/10 financial year. A breakdown of the expenditure per programme and per economic classification was provided. Expenditure per economic classification indicated under-spending of 17%. Details of the funding provided to provinces for the mass participation projects and to the 2010 FIFA Soccer World Cup were given.
The under-spending in the Administration programme was caused by the inability to fill vacant posts, especially senior management positions. Under-spending in International Liaison and Events was due to the African Legacy projects not being rolled out as planned. Under-spending in Facilities Co-ordination resulted from the rescheduling of workshops due to the poor response received from co-ordinators in municipalities.
The SRSA achieved an unqualified audit report for the 2009/10 financial year. The Department had received qualified reports from the Audit-r-General in the three prior years. The Auditor General had commented on irregular expenditure of R38.4 million during the prior year and R3 million during the current year. The irregular expenditure was incurred due to non compliance with National Treasury Regulations. Unauthorised expenditure of R704,620 was related to the payment made to the SDASA youth conference. Fruitless and wasteful expenditure of R7.2 million was incurred, of which R5 million related to the prior year and R2.2 million related to the current year. The expenditure item was for double hotel bookings and the payment made for a venue that was not utilised. Other matters raised by the Auditor-General were that the DoRA financial reports from three provinces were not submitted on time. Six provinces did not surrender unspent funds. The business plans of four provinces were approved late. The Human Resource Plan was not in place for the financial year under review. The plan of action developed by SRSA to address the Auditor-General’s comments included holding the heads of departments accountable for the timeous submission of reports, the withholding of funds to provinces who failed to comply and the adjustment of deadlines to ensure that the Treasury deadlines were met.
The Chairperson said that the responsibility of the Committee was to conduct oversight over the Department. She asked which provinces had failed to submit the DoRA financial reports on time. The SRSA had to evaluate its procurement processes to avoid the occurrence of double hotel bookings.
Ms D Rantho (ANC,
Ms Mkhonto replied that the initial grant for community sport was R20 million. The current grant amounted to R426 million. Although the amount of funding had been increased, the capacity of the SRSA had not. The Department suggested that a percentage of the grant should be used for monitoring purposes but the National Treasury had turned down the suggestion and said that the all the funds had to be transferred to the provinces. Without additional capacity, monitoring would remain a challenge. It was difficult to monitor and evaluate all the schools in the country and the Department could only attend to a sample.
Mr M De Villiers (DA,
Ms Mkhonto replied that
Ms Sizani explained that the current office space occupied by the SRSA was leased. The lease expired at the end of October 2011. At the time the lease was signed, the staff complement of the SRSA was only 67 persons. In December 2005, the staff complement was increased to 187 people. There was currently no space available to house interns. Additional space was also needed for cleaners and security staff. The building currently occupied was not disability-friendly. The current office space was totally inadequate to accommodate the new structure of the SRSA. The Department had identified new office space but would have to continue to rent premises as the SRSA did not own any land on which offices could be built.
Ms R Rasmeni (ANC,
Mr Petersen replied that R13 billion was transferred to the host cities for the construction of stadiums. The host cities had to submit maintenance and sustainability plans for the stadiums. The requirement for the plans had been met but there were challenges. The challenges were however being addressed. The investigation into the supply-chain corruption allegations had been completed. An official of the Department had been suspended pending the investigation. The Committee would be informed on the outcome of the investigations. The role of the SRSA was to regulate and co-ordinate sport-related programmes. The actual work was done by the delivery agents because SRSA lacked the capacity to do implement the projects. The Department intervened when mistakes were made. Lessons had been learnt and the SRSA was putting better systems in place to ensure that delivery by the provinces was improved. The sport federations received funding from the Department and were expected to deliver the required results. Certain programmes were implemented by SRSA, even though the available capacity was limited.
Ms Naidoo advised that SRSA attempted to apply scientific criteria to identify and support learners with sports potential. Coaching and training was done to assist school sports. With the help of sports federations, school athletes were placed in centres of excellence. This was included in the service level agreements with the federations. The school sports programmes were intended for all the schools in
Ms Kotelo advised that a boxing convention was held in April 2010. A resolution had been passed concerning governance. Three board members of Boxing South Africa had resigned and the vacant posts had subsequently been filled. Issues of governance at Boxing South Africa had since improved.
Mr Gunda asked why SRSA reported a challenge with preparing the provinces to take over the conditional grants in 2012. He asked when the discussions regarding the management of the Lotteries Board would be concluded. He asked how SRSA monitored the implementation of plans and programmes throughout the country. Referring to the funding provided for mass participation programmes in the provinces, he noted that the
Ms Mkhonto explained that the provinces did not currently have systems in place to manage conditional grants. The provinces had to put proper systems in place before the grants were paid to them directly. The Department hoped that funds would be ring-fenced for the mass participation of communities.
Ms Naidoo responded that soccer promotion was part of the programmes offered by the federations. The SRSA was monitoring what was happening at the school level. The monitoring of more than 29000 schools remained a challenge for the Department.
Mr Petersen observed that one needed to distinguish between the roles and responsibilities of different structures. Facilities at schools were provided by the Department of Basic Education. The Department of Basic Education should be given a conditional grant for sports facilities at schools. He proposed that a model was developed whereby well-resourced schools in a region could be used as a resource by other schools in the region that lacked facilities. Ways should be found to provide schools with at least basic sports equipment. Poor schools often could not access funding from the Lotteries Board as they could not comply with all the requirements. This was not necessarily a fault on their part as they simply lacked capacity. The SRSA had suggested that other organisations, such as the sports federations, applied on behalf of poor schools for sports funding. The federations would identify talent, establish clubs, develop athletes and expose the athletes to competitions.
Mr Petersen confirmed that KPMG had conducted an investigation into the allegations of nepotism. The investigation was in the process of being concluded.
Mr Gunda said that the sports federations had failed to deliver in the
Mr Petersen pointed out that the
The Chairperson said that the Committee approved the budget vote of the Department. Members of the Committee represented provinces. The SRSA was expected to implement its strategic plans. Policies were in place to monitor progress. Even though the SRSA had obtained an unqualified audit report, she was concerned over the Auditor-General’s comments on irregular expenditure and on fruitless and wasteful expenditure. She did not understand why the provinces that did not spend all the funds provided did not return the unspent funds. The failure of provinces to submit quarterly financial reports should not be tolerated. Perhaps the SRSA was not strict enough. She gave the assurance that the Committee would assist the SRSA if necessary.
Mr Petersen replied that the report of the Auditor-General tended to focus on what was done wrong. The SRSA would attempt to improve financial controls. It was necessary to change legislation in order to deal with the issue of past irregular expenditure that recurred in the financial reports of subsequent years.
Ms Mkhonto explained that the business plans of the provinces dealing with community sport had been approved late. The business plan had to first be submitted to the provincial treasury. The problem was that the provincial treasury delayed the approval of business plans.
Mr Makoto explained that the irregular expenditure was incurred by a service provider and not by an individual in the Department. The process should have been by public tender but because it was a school programme, the public tender process was not used. The fruitless expenditure item occurred when two persons booked the accommodation at a hotel. The Department used the services of a travel agency as well as its own supply-chain processes. In this case, an official had been replaced by another person. One person had made the booking through the travel agent and the other person made the same booking by using the supply-chain processes. Currently, only the supply-chain processes were used to make bookings for accommodation.
Ms Khan added that there were guidelines on performance information. Systems were in place to prevent the double booking scenario from recurring.
Ms Sizani pointed out that there were policies and guidelines in terms of DoRA that specified when the provinces had to submit financial reports.
The Chairperson said that improved monitoring by SRSA was needed. She asked if any unpaid debts were carried over to the current financial year.
Mr Makoto confirmed that there were no unpaid debts.
The meeting was adjourned.
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