Nelson Mandela Museum on its Annual Report and audit queries 2009/10

Arts and Culture

22 February 2011
Chairperson: Ms T Sunduza (ANC)
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Meeting Summary

The Nelson Mandela Museum briefed Members on its Annual Report and audit queries 2009/10. The briefing included the Museum’s mandate, institutional arrangements, mission and values, location and contact details, the Museum's services, strategic priorities, achievements, items not achieved, general lessons from the period under review, and some incidents of note beyond the financial year.

Much more detailed financial information was provided than in the previous week's presentation. The Museum provided a statement of financial performance, graphic financial statements and analysis, and financial highlights - reserves and cash and cash equivalents, revenue, operating expenditure, budget, non-current assets, current assets, non-current liabilities, current liabilities, and overall financial position.

The Auditor-General had issued an unqualified opinion on the financial performance and financial position of the Museum for 2009/10 but drew attention to matters of emphasis on: Restatement of Corresponding figures, Irregular expenditure, Performance Information, Non-Compliance with Public Finance Management Act and Treasury Regulations, Leadership, Financial and performance management, and Governance. The Museum explained each matter, the action it had taken to address this, and offered explanatory notes.

Members asked about the return on the Museum's staff travel costs, the Museum's contribution to job creation and the Museum's strategic plan to attract visitors from all provinces, deplored the lack of appropriate or sufficient staff, questioned the wisdom of offering unguided tours and the Museum's security, noted that human capacity was critical and that an external service provider was needed to develop capacity, suggested reinstating entry fees for non-South Africans, asked to whom the Museum referred when it spoke of its principals, what its plan for the area around Bhunga was, and hoped that the road to the Museum had been repaired.

Members briefly interacted with the Department of Arts and Culture and asked it to expedite the tabling of legislation to the Committee.

Meeting report

Introduction
The Chairperson welcomed Members and delegates. Since there were no microphones and loudspeakers in the room, she insisted that all Members and delegates wait for the Parliamentary Monitoring Group (PMG)'s sound recording device to be passed to them before beginning to speak. The recording was important to ensure correct capturing of what Members and delegates said.

Nelson Mandela Museum Annual Report and audit queries 2009/10 presentation
Mandate, institutional arrangements, mission and values
Mr Khwezi Mpumlwana, Chief Executive Officer, Nelson Mandela Museum, explained the Museum's legal mandate: the Museum was inspired by the South African Constitution, established in terms of the Cultural Institutions Act, subject to the National Heritage Resources Act, and subject to the Public Finance Management Act (PFMA).

The Museum was the official museum of the South African people and Government to Mr Nelson Mandela – housing the diversity of gifts and awards received during his presidency, a declared national institution in terms of the Cultural Institutions Act, one of the portfolio of Arts and Culture legacy projects along with Ncome Museum, Machel Memorial, Freedom Park, Constitution Hill and others, a Schedule 3A public entity in terms of the PFMA, and a public benefit organisation functioning in the space of culture, heritage, education, research, tourism and socio-economic development.

The Minister of Arts and Culture had established a juristic person, the Nelson Mandela Museum with three sites for public benefit on 11 February 2000. The Minister appointed a non-executive council of independent directors broadly representative of all South Africans to oversee strategy and policy execution for terms of three years. The Council appointed a full time management team in consultation with the Minister. The Museum was managed by a full time management team. The management implemented the Council's strategy within the Council's policy framework subject to the law and established norms and standards for institutions of this type and purpose. The Museum accounted to the Minister, National Treasury and Parliament. It interfaced with diverse stakeholders.

The Museum's mission was to be a leading museum that represented and interpreted the life story and values of Mr Nelson Rolihlahla Mandela, a product and champion of ubuntu. It sought to develop a site for collecting, interpreting, and curatorship that promoted a critical understanding of Nelson R Mandela’s work, life memory and legacy. It sought to be a centre for cultural life in the forefront of restoring ubuntu as a pioneering philosophy for social change, to build Nelson Mandela's legacy as a vehicle for social change, nation building, pursuit of human solidarity, through education and advocacy programmes, and to promote sustainable community development and self upliftment in partnerships. Its values were ubuntu, stewardship, integrity and respect, and learning and development.

Location and contact details
The Museum was located at Bhunga Building, Cnr Owen Street and Nelson Mandela Drive,
Mthatha, OR
Tambo District in King Sabata Dalindyebo Municipality, Eastern Cape. The Qunu Youth and Heritage Centre was located in the Qunu Administrative Area, King Dalinyebo Local Municipality. [Tel: +27-(0) 47- 532-5110; www.nelsonmandelamuseum.org.za ] The Museum was not to be confused with other museums bearing Mr Mandela's name in Soweto and Port Elizabeth.

The Museum's services
The Museum managed a collection of gifts and awards given to President Mandela, managed sites associated with his early life and pointed to the rest of the landscape. It conserved, interpreted and presented for public benefit the story of the life and work of Nelson Mandela in context. It offered education programmes, research, exhibitions and outreach; and promoted social cohesion, national unity, patriotism and economic development through tourism, and other initiatives.

The Museum offered free entry to a quality cultural experience, exhibitions, education and outreach programmes, guided and self guided tours, entry into the National Liberation Heritage Route, a base from which to explore the liberation related sites in our region, preserving and interpreting part of the authentic landscape of Mr Nelson Mandela’s childhood, and a fully equipped conference centre with graded accommodation and a museum shop with growing diverse offerings.

Strategic priorities
The Museum's strategic priorities were to build and renew the Museum’s content and quality of services; build and mobilise resources to increase organisational capacity; building better governance and achieving an unqualified audit; improve the Museum’s public profile with greater accessibility, a national footprint and increased public perception; and improve and renew infrastructure, facilities management and strengthen security.

To these ends staff training had been enhanced. A new security and cleaning company had been appointed. Graded accommodation had been established. New backup arrangements for electricity and water supplies had been instituted. Facilities for collection and heritage management had been partially upgraded and improved.

The Museum had also planned three exhibitions for 2009 and 2010.
 
Achievements
The Nelson Mandela Research Library was in place - the upgrade of the collections of the library was completed and books were being processed; the research programme, new exhibitions, guided and self-guided tours, graded accommodation, well equipped conference venues, and diverse public programmes were established.

Audit reports had improved. Two years ago the Museum had a disclaimer; last year it had an unqualified audit opinion; this year the audit opinion was also unqualified, but, Mr Mpumlwana stressed, with emphasis of matter on irregular expenditure.
 
An improved visitor experience was reflected in comments in the visitor's books.

Facilities were graded by the Tourism Grading Council and the Automobile Association (AA). There was improved execution of the Museum's programme. Staff development was ongoing. Baseline funding or recapitalisation was still needed. Human Capacity was still a challenge: only 22 out of 42 required positions were funded and filled. Delays in council appointments were still a challenge.

The Museum achieved an improved public profile, accessibility, footprint and public perception, and an outreach to and presence in more provinces and reaching diverse disadvantaged audiences. The Museum had partnered with Parliament in last year’s opening ceremony to mark Mr Mandela’s 20th year out of prison and the Museum's 10th year. It had a partnership with Drakenstein Correctional Facility with positive news coverage. There was a diverse growth in visitors.
 
Items not achieved
An adjustment to baseline was not achieved; the new council was not in place; and the Mvezo issue was still not resolved – there was occasional negative publicity (generally no comment given).The Integrated Conservation Management Plan (ICMP) was not complete. The Bhunga upgrade was delayed. The former Minister had convened a meeting where the National Lottery confirmed that no money was ever released: there was, however, agreement for an advisory team.

General lessons from the period under review
These included the value of reaching out to other provinces; the need to factor in more contextual information in projecting project implementation, for a new funding formula, for recapitalisation, for timely appointment and capacitating of independent councils, for strengthening the alignment of strategy and budget, for ongoing attention to human capacity and Infrastructure, and for achieving resolution of the Mvezo matter; and the value of partnerships.

Some incidents of note beyond the financial year
These included 2010 World Cup Museum activities, travelling exhibitions, presence at public places (Limpopo, Free State, Northwest, Western Cape, Eastern Cape, Gauteng), the Mandela and Luthuli exhibition, good media coverage, and the Mvezo meeting by the former Arts and Culture Minister.

Financial highlights - reserves and cash and cash equivalents
The Nelson Mandela Museum’s results for the year showed an increase in reserves from R10 493 058 to R 10 631 237 which could be attributed to the net effect of the use of rolled over surpluses from the previous years, use of which was authorised by the National Treasury through the Department of Arts and Culture in August 2008, extension of which was further obtained during September 2009, and the reclassification of leases from operating leases to Finance Lease. In the year under review a decrease in Cash and Cash equivalent from R19 224 308 to R8 809 880 had been recorded.

Financial highlights - revenue
The Nelson Mandela Museum received most of its funding from the subsidy allocations from the National Government through the Department of Arts and Culture. Total Revenue collected by the Nelson Mandela Museum for the year under review increased by 11.75% from R20 197 813 to R22 571 767. This increase was attributable to the relatively accelerated pace in which the special projects were being implemented. A further amount of R184 738 was realised as interest from short term investments.

The subsidy from the Department of Arts and Culture accounted for 65.38% of the total revenue while .038% was from Donor funding, 32.74% from project funding recognised as revenue as projects implementation progress, 1.84% realised as the Museum's own income generated through interest from bank investment of amounts received from various project funders, rental of conference venue and charge for accommodation at Qunu Youth and Heritage Centre as well as sales realised on the sale of books and golf shirts.

Financial highlights - operating expenditure
The operating expenditure for the year under review was R22 596 964 eliciting an increase of 3.55% from that recorded the previous year, constituting a minor variance due to relative increase in other operating expenses comprised of advertising expenses, audit fees, council travel and accommodation, consultancy expenses, exhibition expenses, repairs-buildings, security expenses and general travel and accommodation as main contributors. The operating expenditure was made up of 20.59% fixed costs on personnel, 11.95% administrative and governance expenses, and 63.64% core function activities and cost of sales of 0.36% as well as 3.46% statutory audit fees. An additional expenditure of R21 361 was incurred as finance cost on finance lease liabilities.

Financial highlights - budget
The Nelson Mandela Museum was a going concern with a budget of R15 412 000 for the year 2010/11.
The Museum would continue to adopt a going concern basis in preparing its financial statements in the year ahead as the budget indicates.


Financial highlights - overall
While a great deal of work still needed to be done to improve the baseline funding to facilitate meeting targets set in the Museum’s strategic plan, the results for the year under review demonstrate progress, and management remained committed to achieving its strategic objectives.

Statement of financial position
Non-current assets consisted mainly of property, plant and equipment showed a decrease from R1 998 164 to R5 171 676 yielding a net amount of R3 173 512. This net increase was attributable to additions to fixed assets and reclassification of leases from operating to finance leases made during the year under review.

Financial highlights - current assets
The main contributor to a figure of R8 921 065 in current assets was the item cash and cash equivalents amounting to R 8 809 880 which in turn mainly consisted of R3 348 116 relating to cash and balances with banks, short term deposits/investments of R5 450 751 and cash on hand amounting to R 1 013. These amounts relate to conditional grants received from the national Government for R 1 190 458 reflected under current liabilities.
 
Financial highlights - non-current liabilities
The figure of R253 868 related to the non- current portion of the finance lease liability.
 
Financial highlights - current liabilities
The figure of R3 207 636 was made up of trade and other liabilities of R1 835 179 representing accrual of amounts owed to suppliers of goods and service providers at year end, R182 000 reflecting current portion – finance lease liability and balance on conditional grant amounting to R1 190 458.

(For the following tables and graphs – statement of financial performance, graphic financial statements analysis [reserves, cash and cash equivalent, total revenue collected, and operating expenditure], statement of financial position, graphic financial statements analysis [non-current assets, current assets, non-current liabilities, and current liabilities] - please see presentation document.)

Audit Opinion
The Auditor-General (A-G) had issued an unqualified opinion on the Financial Performance and Financial Position of the Institution for the Financial Year ended 31 March 2010 (page 35 of Annual Report), but had drawn the attention of the institution to the following matters of emphasis, which while they did not modify his opinion, it took very seriously and had implemented steps to address them:
▪ Restatement of corresponding figures
▪ Irregular expenditure
▪ Alignment between strategy and budget
▪ Turn around time for payment of service providers
▪ Review of the work of the audit committee by council
▪ Segregation of duties and fraud prevention plan

Restatement of Corresponding figures
Issue: The corresponding figures for March 2009 financial year had been restated as a result of an error discovered in operating leases which met the criteria for finance leases as per Generally Recognised Accounting Practice (GRAP) 13 and therefore, were reclassified resulting in adjustments ( see note 20 to the Financial Statements).

Action: The operating leases were reclassified to finance leases, the equipment concerned capitalised and prior year adjustments were made as reflected in note 20 to the Annual Financial Statements.

Irregular expenditure
Issue: The finding that the Museum did not comply with supply chain management requirements as preference points framework was not followed with regards to transactions falling between R30 000 and R 500 000 for a total expenditure of R4 198 511 was recorded.

Action: The Museum developed a formula driven template to implement the evaluation of transactions falling between R30 000 and R500 000 using the preference point system of evaluation. The Financial Controller was in charge thereof. A disclosure was made in annexure 3 of the annual financial statements (AFS).

Notes: In this case the requirement where three quotations should be sourced was followed and satisfied and the most favourable quotation, both in price and quality of service was chosen.

This amount had been disclosed as an irregular expenditure in Annexure 3 of the Annual Statement for the year ended 31 March 2010 in terms of Treasury Regulations 9.1.5 and 28.2.1.

Issue: The A-G made a finding that a tender process was not followed for payments exceeding R500 000 made to a travel agent resulting in an amount of R4 467 318 being treated as irregular expenditure.

Action: Museum management advertised in the media for service providers to submit their profiles to be assessed and included in the museum data base where after a rotation system will be implemented. The figure reflected above was disclosed in annexure 3 of the financial statements as irregular expenditure.

Notes: The only local travel agency in Mthatha named Swift Travel and Tours was used by the Museum and an amount of R4 467 319 was paid for the period ranging from 01 April 2009 to 31 March 2010. The Museum was convinced that the transactions with this agency were below the tender threshold as only R 317 036 went into their bank account as commission out of the total amount reflected above. The rest was paid to various service providers like hotels, airliners and car hiring companies for accommodation and transport. The agency did not make use of the same hotels and car hiring companies all the time but rotated use thereof among various hotels, bed and breakfast establishments and car hiring companies contained in its data base.

This amount had been disclosed as irregular expenditure in Annexure 3 of the Annual Financial Statements for the year ended 31 March 2010 in terms of Treasury Regulations 9.1.5 and 28.2.1. An application for condonation had been made to National Treasury.

Performance Information
Issue: The A-G raised a concern about the non- alignment of the measure contained in the strategic plan and annual performance plan which did not relate directly to the budget submitted to the Department of Arts and Culture (DAC) with regard to the establishment of the Nelson Mandela Reference Library.

Action: The Museum had since drawn up a strategic plan and the derivative annual performance plan which were aligned with the funding and estimates as contained in the budget with reference to measurability, relevance and logical linkage.

Non-compliance with Public Finance Management Act (PFMA) and Treasury Regulations
Issue: The A-G made a finding that the Museum acted contrary to the requirements of Treasury Regulation 27.1.8 and sections 51(1)(a)(ii) and 76(4)(d) of the PFMA in that the audit committee did not review the AFS to ensure compliance with applicable standards and no annual evaluation of the Audit Committee was carried out by the Accounting Authority.

Action: There was neither an accounting authority nor an audit committee when the financial statements were drawn as the extended term of the council came to an end on 31 March 2010 and the new one was not in place yet. But hence forth the institution would ensure that the audit committee is evaluated regularly.

Issue: The A-G raised an exception that contrary to the requirements of PFMA sections 38(1)(f) and 76(4)(b) not all payments due to creditors were settled within 30 days from receipt of an invoice.

Action: The institution had established and adopted a system where invoices and statements were date stamped on receipt so as to ensure that they were paid within 30 days of receipt. Payments and payments vouchers were checked by the Chief Financial officer to establish if the procedure was followed.

Notes: As the exception was raised by the A-G during the audit for 2008/09 which was concluded at the end of July 2009, the Museum put in place control measures to remedy the situation. However, the A-G raised this issue again during the 2009/10 audit, picking up examples of payments made in May and June 2009 which period was before the original recommendation was made. On bringing this to their attention they took note of this comment but because it fell within the period under 2009/10 audit they felt it proper to include it in the audit report.

Leadership
Issue: The A-G noted numerous instances of non-compliance with supply chain management regulations and the internal control deficiencies during the audit.

Action: Although there was no separate supply chain management office due to the size of the organisation and the shortage of human capital due to limited budget, the institution had established and put in place a supply chain management policy which was controlled by the finance department under the supervision of the Chief Financial Officer. A supplier data base had been established and placed under the control of the Financial Controller.

Financial and performance management
Issue: The A-G highlighted that the entity did not perform adequate reconciliations for assets and conditional grant expenditure on a monthly basis but at year end and this resulted in misstatements in the AFS.

Action: Although there were teething problems, the Museum had acquired and put in place an electronic asset management system and asset inventory counts were conducted monthly and reconciliations thereof to the asset register were made. Expenditure was recognised as revenue on conditional grants as the projects were implemented monthly in keeping with the provisions of IAS 20 as GRAP 23 would take effect only on 01 April 2012

Governance
Issue: The A-G highlighted the fact that the audit committee did not review the financial statements before submission on 31 May 2010 resulting in inability to detect the numerous errors identified during the audit process.

Action: As the A-G had mentioned the term of the audit committee came to an end on 31 March 2010 at the same time as the end of the Museum council term as the audit committee was the committee of council. The committee, therefore, could not have been able to review the AFS as they were only compiled and completed in April-May. This could be obviated only by fixing an audit committee term which outlived the council term.

Issue: Segregation of duties to prevent fraudulent transactions and asset misappropriation within revenue was not adequate and the entity had no updated fraud prevention plan.

Action: Management had separated the preparation of payments and the receipting and banking of revenue functions by designating the Administration Officer at Qunu Youth and Heritage centre as a receipting and banking officer and the Administration. Officer - Bhunga as the payments officer, thus obviating rolling of cash. The institution had established and put in place a fraud prevention plan

Discussion
Mr J Smalle (DA) said that when one spoke of separation of duties, ultimately the buck stopped with the chief executive officer, who, in the case of the Museum, had been in office for at least five years. It was of great concern that there appeared to be a lack of understanding of supply chain management and the requirements of the Public Finance Management Act (PFMA). He hoped that Ms Veliswa Baduza, Acting Director-General, Department of Arts and Culture, was listening very carefully. He emphasised the importance of correct reporting, since this was a Government that was accountable. Where money had to be spent, it had to be spent efficiently, effectively and correctly. The manner of reporting had to be correct. When year by year the same mistakes occurred, the question of the capabilities of management was raised. The same mistakes should not be repeated.

Mr Mpumlwana replied that a new supply chain management policy was approved by council and had been implemented.

Mr Mpumlwana replied that there was, indeed, continuous reporting to the Department.

Mr Mpumlwana replied that the issue of timeliness of the data and the issue of manual versus electronic procedures were the basis of the request to upgrade the Museum's information and communications technology (ICT) system.

Dr Smalle referred to the section of the annual report on staff costs (subsection 15), and observed that the Museum's temporary staff had grown excessively, by about 300% in the past financial year. Why?

Dr Smalle asked if “senior staff emolument” was a nice word for bonuses. There had been a notable increase.

Mr M Mdludlu, Chief Financial Officer (CFO), Nelson Mandela Museum, responded the term “emolument” referred to salaries. It was a term used in accounting. It referred to the total paid to management, including benefits. However, in this case, it referred only to basic salaries. Members of management were actually on total costs. There were no bonuses there. Bonuses would come only when there had been an assessment of performance. Such had not gone through. It was not in the figures at all.

Mr Mdludlu said that there had been resignations in management. There was actually a resignation early in the year by the executive assistant to the CEO and by the security manager. These posts had since been advertised. In addition, the post of human resources manager had fallen vacant and been advertised. These were “done” on the basis of “negotiated salaries”, which were more than was paid to the predecessors.

Dr Smalle asked about the decline in the number of tour guides and the apparent lack of proper skills. Why was the number of tour guides declining?

Mr Mpumlwana replied that the decline in tour guides was not a decline in capacity but a decline in numbers. When the Museum started, everyone was a tour guide except the CEO and the Secretary. Some of those people had to be trained for other disciplines over a number of years. This was where the decline came in.

Dr Z Mqamelo, Human Resources Manager, Nelson Mandela Museum, responded on the issue of the tour guides. The Museum had trained many tour guides, especially the interns, the students who were coming from the universities to train in tourism management.

Mr Mpumlwana added that the need for particular skills in various fields had been realised, including marketing, and when it was understood that there would not be substantial funding available immediately, some of the tour guides were taken and put on short courses, or tertiary education courses. As participants in the meeting spoke, leaving aside those who had resigned or passed away, one was responsible for design, layout and graphic production. One was working in communications and public relations. One was busy with her master's degree – previously she had a diploma and was responsible for education. One who was a caretaker was now an administrative assistant and journalist. What had happened was that people who were in the front line were gradually being moved into these services. One was responsible for the collections. One could not afford to compromise. To deal with the fact that the Museum might be delayed in getting staff to do the front line work, the Museum had redesigned its exhibitions to allow visitors to walk around.

Dr A Lotriet (DA) asked about the return on the Museum's staff travel costs, which were high, while the report was vague. Travelling costs were more than 20% of operating expenditure. Nowhere did one really see the return on that expenditure. There were only six council meetings. What exactly did the Museum spend the money on?

Ms F
Mashalaba, Accountant, Nelson Mandela Museum, said that the travel and accommodation expenses related to the travel and accommodation for the council members. There were more than 13 council meetings in this period. For example, there were about 13 audit committee meetings. This resulted in such large expenditure. Then there was travel for core business to mount exhibitions in various places. The youth camps took place in that time. The security manager had travelled to organise the upgrades. The staff of the Museum had travelled to various workshops.

Mr Mpumlwana added that the logistics of travel to and from Umtata was that the only place to which one could travel directly was Johannesburg. Almost always one had to fly from East London, especially if one wanted to travel in and out. Also travel to and from the Museum potentially involved a good deal of night driving, unless one was going to spend money on overnight accommodation. So council members would travel to East London, then hire cars, and seek overnight accommodation.

Dr Lotriet also questioned the wisdom of offering unguided tours and asked about the Museum's security. How were its valuable items protected?

Mr A Kgakgadi, Security Manager, Nelson Mandela Museum, explained security arrangements around the exhibitions and the self-guided tours. These were attended to as part of the upgrading. He emphasised that the security department had trained one woman from among the security officers as a tour guide to ensure that, over the weekends when the other staff members were not present, she was able to help the tour guides.

Mr Kgakgadi said that the Museum's security system was integrated. There was a control room in the Museum, at which, when the visitors entered, their entry was recorded and their movements monitored by a staff member. Moreover, there were guards moving around the exhibitions. All exhibits were protected by glass panels and sensor beams.

Mr Kgakgadi said that not all the gifts received by Mr Mandela were on display at the same time.

Mr Kgakgadi said that there was 24 hour security on the premises and constant supervision.

Dr Lotriet asked how the Museum knew that it had diverse visitors. How did it count them? Especially when there was no one to take them around.

Hosi T Nwamitwa-Shilubana (ANC) complimented the Museum on its very comprehensive brief. She referred to page 73, the reconciliation of the irregular expenditure. Had the condonation been actualised?

Mr Mpumlwana replied that condonation had been applied for and the Museum was awaiting a response.

Hosi Nwamitwa-Shilubana asked about professional vacancies. Were these the result of lack of funding or lack of strategic planning? Some of the Museum's problems were caused by its not having appropriate or sufficient staff.

Mr Mpumlwana replied that the Museum had to prioritise which positions it needed to fill most urgently. One of them was the supply chain management position. It was quite an involved process. It was not yet filled. However, the Museum gave over some of those functions to the financial controller, a position that was now filled.

Mr Mpumlwana replied that the job evaluation was done, along with the performance management exercise, using independent experts to advise the council. The outcome was the adoption of a grading system, which was to be brought to the attention of the Minister and the Minister of Finance.

Hosi Nwamitwa-Shilubana asked about the tender process. Was there no other travel agency in Umtata?

Ms F Mushwana (ANC) asked about the Museum's contribution to job creation.

Ms Mushwana also doubted the rationale of the unguided tours, when people were unemployed. Moreover, how could visitors learn without a guide?

Ms Mushwana asked if the Museum had a time frame for reaching the other provinces. Mr Mandela had liberated all of us. Not everyone would be able to travel to Umtata.

Ms Mushwana said that one needed to know the way forward with fraud prevention.

Mr Mpumlwana replied that the fraud prevention plan had been updated.

Ms Mushwana said that there was need of a business plan to convince those concerned of the need for funds.

Ms L Moss (ANC) noted that human capacity was critical. Without it progress could not be made. Ms Moss said that, if an external service provider was needed to develop a job evaluation system for this entity, such providers were supposed to produce a plan for the long term and the short term – one paid those people to do a proper job.

Mr Mpumlwana said that training and development had to fit the mandate of the Museum.

Ms Moss asked about the Museum's marketing programme plan to attract visitors from all the provinces. She asked for a strategic plan to attract the visitors.

Ms Moss said that the Museum was not just for the Eastern Cape, but for the other provinces. There must be partnerships with institutions like the Robben Island Museum.

The Chairperson referred to the New Growth Path and the President's emphasis on job creation. She noted that over 10 000 visitors to the Museum came from overseas.

Ms Nokuzola Tetani, Marketing Manager, Nelson Mandela Museum, spoke about the balance between international and local visitors. The 39 000 visitors in the year under review did not include the visitors to exhibits in other provinces, or to the exhibit mentioned by Ms Mandela that was abroad. The decline in those numbers was due to various factors. One factor was the closure of the Museum for about three months, in particular the Bhunga building, which was one of the most popular sites. Qunu had been developing gradually. There were peak seasons and low seasons. September was popular for overseas visitors. The Museum participated in indabas and trade shows. People were more aware of the museums dedicated to Mr Mandela in Port Elizabeth and in Soweto. This put the Museum in a difficult situation. “It has been our greatest challenge.” Within the Museum's marketing budget, there were some things that the Museum was unable to implement, for example, television advertisements. The Museum was proud to say that it was one of the leading institutions of its kind in programmes for learners. It was proud to say that it was one of the most visited museums.

The Chairperson understood that Dr Lotriet had said that the Museum was not generating revenue. It was just spending. Why? National museums were part of job creation. She asked if it was not time for the Museum to reinstate entry fees for non-South Africans.

Mr Mpumlwana replied that the council had taken a decision on entry fees, but it could be revised. He was happy that the question had been raised, so that, if later the Museum was criticised for charging fees, it could say that it was the people's representatives who called for fees, not the Museum. Differential fees were also a national policy issue that the Department of Tourism and the Portfolio Committee had to give guidance upon. There had been disinclination in that direction. Next week, the Portfolio Committee on Tourism was meeting and might discuss this subject. There was a tourism levy of 1%, but no part of that went to heritage institutions, and yet tourists were visiting heritage institutions.

The Chairperson asked if the Museum was providing education and training for people in the locality, or on a broader basis. This was a national, not a provincial museum. It seemed that everything was directed to the Eastern Cape. Many people did not even know where the Museum was located. She asked Mr Smalle [from Limpopo] if he had visited it.

Mr Smalle replied that he had visited the Museum twice.

Ms Pumza Mandela, Education and Outreach, Nelson Mandela Museum, said that the Museum sought to make itself relevant accessible to all South Africans and people outside South Africa. The Education and Outreach section did this by organising exhibitions, by developing public programmes, and by symposia and colloquia, as well as by research. The section did this through partnerships. The section made sure that it invited all provinces to the education camps. Fortunately the Museum had facilities for accommodation where it conducted its programmes annually in June. She gave examples of groups of learners who had attended. The section also developed travelling exhibitions, including in Cape Town. There were partnerships, even on an international basis, including with Germany and with the British Council, which put the Museum in contact with primary and secondary schools in England. However, because of the financial constraints at the Museum, the section could not always go to all provinces, but in the Western Cape, the section did mount exhibitions in Parliament and in Mossel Bay. There were also partnerships with different municipalities and with sister heritage institutions. There was currently an exhibit installed in North West. The assistance of the Department of Arts and Culture was acknowledged.

Mr Mpumlwana added that it was at the youth camps that the Museum experienced its greatest diversity of visitors.

Mr Smalle asked about Mvezo. Perhaps an intervention by the Committee would be needed to solve that issue.

Hosi Nwamitwa-Shilubana asked what the Mvezo matter was that had not been resolved: was it finance or the running of the branch?

The Chairperson asked Mr Mpumlwana not to beat about the bush regarding Mvezo, since this was in the media. What was really happening?

Mr P Ntshiqela (COPE) asked if there were any measures to deal with the Mvezo issue.

Mr Mpumlwana gave the history of the Mvezo matter. On 11 February 2000 as was usually done when a legacy project was established, a steering committee that involved traditional leaders, business and other stakeholders was declared to establish one museum with three sites. The one site was in Bhunga. There was no argument about this, since it was a Government building. Another site was a five hectare site at Qunu which was identified as earmarked for development. At Mvezo there was a site that was believed to be birthplace of former President Nelson Mandela. It included the ruins of that home and a number of other homesteads. It was an area of five hectares. It demonstrated how a chief lived at the turn of the century side by side with his people. It also demonstrated that, however important one was, there was a price that one paid for standing for the truth. Mr Mandela's home had been abandoned and allowed to go to ruin. It was believed that the potential for archaeological material existed. It had been designated to be an open air museum. The Museum did not want to interfere with the evidence. This may not have reflected well in many directions. Part of the Museum's effort was to look for funding beyond the Department. The Museum had gone to the National Lottery for funding for planning. However, the Lottery approved funding for infrastructure, but not the planning. The approved funding had never been transferred to the Museum. In that time a situation had arisen in which Mr Mandela had been crowned as Chief for the area of Mvezo. The logical thing to do was to establish it as the original place where the home was. The difficulty that was arising for the Museum was that if an area was designated for public use, there was a conflict, because such great places were both private and public. It was not for a CEO to reverse what a former President and former Minister had done. There arose contestations as to whether the plan belonged to the Museum or to the Department of Arts and Culture. The Museum did not want to involve the media until the matter was resolved with the principals and the stakeholders. The council had decided that until all the related matters were resolved, it would be better not to operate from that site in order to avoid any confrontational situation. Pat of the net effect was that it would not be possible to take any of the funding. The former Minister had conducted a meeting on the matter, and the Department had briefed the new Minister. It was not an easy matter.

Ms Mushwana asked who was contesting the above.

The Museum explained that the state gave land to the Museum which was five hectares in extent and was registered with the Department of Agriculture. Over time, the Museum was functioning there as an open air museum. There had been an occupation of that land by the Chief who was installed as Chief of that area. This is what the contestation was all about. That was the summary of it all.

Hosi Nwamitwa-Shilubana thought that the matter could and should be resolved, but perhaps would have to be referred to the President.

Mr Mpumlwana replied that the matter had to be dealt with in the framework of the law and in a way to protect relationships between stakeholders.

The Chairperson said that the matter was sensitive and it was best, for the time being, not to comment to the media, while the principals were dealing with it.

The Chairperson asked what the Museum's plan for the area around Bhunga was.

Mr Kgakgadi said that the Bhunga upgrade was being planned on the basis of the space that the Museum currently had. The Museum was continually engaging the provincial Department of Public Works with the aim of building up a complex of provincial government department offices behind the Museum's premises. The Museum sought, with regard to the Bhunga upgrade, to promote job creation.

The Chairperson asked what kind of partnership the Museum had with the Eastern Cape provincial government and its department concerned with arts and culture. It seemed that its focus was on the Eastern Cape.

Mr Mpumlwana said that the Museum had certain obligations to the local community. There had been limitations on resources. The Museum had exhibited at the Robben Island Gateway, also at Mossel Bay and George.

The Chairperson hoped that the road to the Museum had been repaired.

Ms M Morutoa (ANC) hoped that the Museum would progress in its partnerships, because it was a good plan. She asked for more information about staff development.

Mr Mpumlwana replied that the Museum's emphasis was on the financial capacity and the supply chain, project management, and conservation issues by means of part-time and short courses.

Ms Morutoa asked how long exhibitions remained in an area. She was concerned about access for previously disadvantaged persons.

Mr Mpumlwana replied that exhibitions remained normally for six months, but in Limpopo the Museum had been requested to retain its exhibit for a longer period.

The community benefit was largely in terms of access to knowledge. Enterprising people used exhibits as an opportunity for selling things.

Ms Morutoa asked for clarity on the analysis of current irregular expenditure (page 73 of the Annual Report).

Mr Mpumlwana replied that the Auditor-General gave importance to using public funds to benefit previously disadvantaged people, especially local people. The Museum had started to apply the points system. The Museum just had to implement the thresholds for tenders. At the time its understanding had been different.

Ms Morutoa asked for clarity on salaries (page 75 of the Annual Report). Why was the total coming down from R5 million to R4 million.
 
Mr Ntshiqela asked what the two major issues for staff development were, and what the size of a full time management team would be, and how would their performance be measured.

Mr Mpumlwana replied that the full time management team should be composed of five members – the CEO, the CFO, the senior manager for programmes, the senior manager for marketing, and the senior manager for enterprise development. This last position was vacant, but it had now been advertised.

Mr Mpumlwana replied that two service providers had been commissioned by the council at different times. One was to develop the job evaluation and move away from the ad hoc system used when the Museum was first established. The second was to develop the performance management system aligned to the strategy and what each manager must deliver. In the absence of a council, independent experts were used to do the assessment, but the assessments would have to be referred to the Department for moderation.

The Chairperson asked to whom the Museum referred when it spoke of its principals. She asked when the new council would be appointed, since the Museum could not operate without it.

Mr Mpumlwana replied that the Museum was referring to the Minister.

Ms Moss also asked about the council. She noted that the Minister was to appoint a non-executive council. When was the Minister to appoint it? This council was supposed to account to the Committee, not only to the Minister and to National Treasury.

Mr Mpumlwana said that it was the Minister who dealt with the matter.

Mr
Vusithemba Ndima, Acting Deputy Director-General: Cultural Heritage and Promotion, Department of Arts and Culture, said that the Department would ensure that the Nelson Mandela Museum's council came into existence. It was true that it was currently not in place. However, the Department had been given a tentative date – 02 March 2011 – for the inauguration of the council. The induction process would follow.

The Chairperson thanked the Museum and said that more staff members and stronger partnerships – with a view to more revenue - were needed. However, the Committee was happy with what the Museum had presented.

Other business
Discussion with the Department of Arts and Culture
The Chairperson said that she expected a representative of the Department to be present when any of its entities were appearing before the Committee, since it was the Department which gave funds to the entities.

The Chairperson criticised the Department for giving the National Film and Video Foundation (16 February 2011) the impression that it was not necessary, on account of its unqualified audit reports, for the Foundation to appear before the Committee.

The presence of the Department was important also to give the Committee clarity as to reported figures when required.

Ms Morutoa said that when the Department wanted to sign treaties with other countries, the Department should first consult the Committee, which would require a thorough explanation. The relationship between the committees and the Executive had become strained on account of the Executive's signing treaties, international instruments, and protocols, and making deals which Parliament was expected to rubber-stamp, but now Members thought that there was an improvement. So the Committee wanted to say to the Department, if there were any treaties, especially on filming, that the Department wished to sign, it must consult the Committee first. Members had a serious concern about filming issues and information technology (IT) issues, especially in so far as these issues had an effect on the youth. Members of Parliament wanted to be thoroughly informed before they endorsed any treaty, so that they knew what they were talking about.

Dr Lotriet advised that the Department should pay attention to training and induction for the members of the councils of its entities. She had been worried when she saw the expenses of the Nelson Mandela Museum's council and the audit committee. It does not appear that the Museum obtained value for money for that expenditure in terms of the audit report that was produced.

Ms Mushwana asked about the legislation governing the Department of Arts and Culture and its entities.

The Chairperson advised Ms Veliswa Baduza, Acting Director-General, Department of Arts and Culture, that the council of the Nelson Mandela Museum must be constituted as soon as possible. The matter should be raised with the Minister. There appeared to be insufficient political guidance and the lack of a council was a very serious challenge.

The Chairperson said that in its oversight role, it would largely be concerned with heritage. The Department appeared to be neglecting some of these sites.

The Chairperson said that she had many proposals for places to be made heritage sites, and she needed the Department's advice.
 
The Chairperson further asked the Department to expedite the process of the two bills pending. If the Department wanted the Committee's support on the proposed legislation, it must be forthcoming with the bills.

The Chairperson said that she would arrange for Ms Mushwana to be provided with copies of arts and culture legislation.

The Chairperson asked the Department to get Parliament to support its “Friday Programme”. It was important to promote nation-building and should be extended to the provincial legislatures.

The Chairperson thanked the Department and said that it was important for the Department's image not to be tarnished. Where public money was concerned, the Committee could call the Department, or any of its entities, five times if necessary, as long as it took to obtain clarity.

Mr Ndima confirmed that the Department would ensure that the Nelson Mandela Museum's council came into existence.

Mr Ndima said that the Department could make available the Cultural Institutions Act 1998 (Act No. 119 of 1998), together with a package of all the Acts governing the Department.

Mr Ndima said that, the Department wished to help Members, and members of the public, with the procedures for nominating cultural heritage sites. Legislation existed which had the necessary provisions. The Department also had the institutional mechanisms, like the South African Heritage Resources Agency (SAHRA), which was the organisation that could help a great deal in advising communities and individuals of what steps they needed to take if they wanted their sites to be nominated or declared as heritage sites.

Ms Baduza appreciated the benefits of this session and the opportunity to hear Members' comments.

Ms Baduza said that, when the Department visited the Committee, it was an extension of the Department's oversight of its entities. The Department acknowledged that it was going to tighten that oversight function.

Ms Baduza said that the Department would do the same as with the South African Geographical Names Council and conduct workshops in the provinces on how to declare sights as heritage sites.

Ms Baduza suggested that the Committee call the Department to make a presentation on all the agreements signed with other countries. France had requested a cultural season in 2012 to showcase France for a period of three to four months, in return for which South Africa would showcase itself in France the following year.

The Chairperson thanked the Department.

Oversight trip
The Chairperson reported that she had secured funding and approval for the Committee's projected oversight trip.

Adoption of minutes
Previous minutes were adopted

Date of next meeting
The Chairperson announced that next week, Wednesday, 02 March 2011, the Committee would meet the National Arts Council (NAC) and the Afrikaanse Taalmuseum. The Committee Secretary would ensure that Members received copies of the presentations.

The meeting was adjourned.



























 




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