National Heritage Council 2011 Strategic Plan briefing, Committee concerns about Pan South African Language Board
Meeting Summary
The National Heritage Council (NHC) briefed the Committee on its strategic plans for 2011, although Members noted that insufficient detail was given on some of the issues. Its lines of reporting to the Department of Arts and Culture (DAC) were described, and it was noted that it was trying to concentrate on issues of good governance. Some of the key programmes and achievements were outlined. In the 2009/10 financial year, the NHC had received R48.2 million allocation, and 79% of the budget was spent on its core business. However, the audit report for that year identified some irregular expenditure, relating to contracts not awarded through the open tender system, where National Treasury requirements had not been met in full. NHC had conceded the difficulties and had put corrective measures in place. However, both PriceWaterhouseCoopers and the Special Investigating Unit had been asked to conduct an investigation of the NHC. The Chief Executive Officer could see no reasons why this entity had been singled out for investigation from the 35 similar entities of the DAC, and claimed that this may have been because of pressure brought to bear by the former Minister of Arts and Culture. It was alleged that there had been serious breaches of corporate governance principles, interference with the functioning of the NHC Council, threats made to Council and staff of the NHC and the offices of the NHC had even been closed at one stage on instructions of the Minister, and the Council disbanded.Members interrogated these allegations during the meeting and also asked for input from the Department’s representatives. They were particularly interested in the costs of the investigations to date, which were around R1.5 million, but the Department made the point that only when these were completed would it become apparent whether the investigations were warranted. Members also asked about the rise in the salary accounts, expressed concerns about possible duplications of mandates across the various projects of the DAC, asked whether the NHC’s programmes would be taken to all provinces, and asked what was being done to make its programmes more accessible, and to ensure that community heritage services were also made available to all. They also asked why the monitoring and evaluation functions had been outsourced, asked for more explanation around establishment of cooperatives for artisan training, and how far the internal skills audit had progressed. Members asked that correct documents and more detail should be included with future presentations.
The Pan South African Language Board (the Board) was due to give an explanation to the Committee on the corruption charges laid against it, and to explain who had been suspended and why the Board was apparently not functioning and on the verge of dissolution. However, Members noted, before the presentation was given, that the documents provided did not deal with these issues and felt there was no point in proceeding. They asked that the Department give input as well, and that the Board be asked instead to give a full presentation in the following week, with all the financial details, to enable Members to address the issues properly. The Board was told that it must explain the R101 million deficit, and address the allegations of corruption.
Meeting report
National Heritage Council Strategic Plan 2011/12 briefing
The Chairperson, by way of introduction, informed the National Heritage Council that Members would be asking questions because the Committee, as public representatives, had to ensure that public funding was being properly spent.
Mr Sonwabile Mancotywa, Chief Executive Officer, National Heritage Council, gave a brief overview of the mandate, vision and mission of the National Heritage Council (NHC). He then outlined the strategic objectives (see attached presentation for further details).
Mr Mancotywa stated that governance issues were of high priority, and would receive special attention throughout his presentation. The NHC submitted quarterly reports and an Annual Report to the Department of Arts and Culture (DAC or the Department), but that the 2010/11 Annual report had yet to be submitted. The NHC also made timely submissions of its strategic plans.
Mr Mancotywa placed some emphasis, in his presentation, on the finance, administration and internal controls. In 2009/10, government had allocated R48.2 million to the NHC. Rollovers had amounted to R14.4 million and interest earned accounted for R568 000. He said that 79% of the budget was allocated to the NHC’s core business.
The audit report for that financial year had highlighted some irregularities in expenditure. National Treasury regulations were not adhered to, because some contracts not awarded through an open tender system had not been reported within 10 days to the Auditor-General (AG). He gave details of these. The first contract was related to the South African Traditional Music Awards (SATMA). SATMA was funded by the National Lottery and the expenses were within the national lottery budget. The AG, however, thought that NHC should have been more competitive in awarding the contract. He acknowledged that NHC might have erred in this, and said that corrective steps had been taken to prevent a recurrence of this.
The second contract related to marketing and publicity. The bidding process adhered to the competitive mandate requirements, but when the contact was awarded, the marketing manager observed that there consultants hired at an hourly pay scale. The NHC made a business decision that, instead of going through an hourly rate, it was preferable to pay the consultants a fixed rate so that the salaries could be budgeted with certainty. However, the AG pointed out that in making the decision to follow a fixed-price route, this resulted in discrepancy between what was quoted at the time of the bid and what was charged. Once again, the AG was given a full explanation and corrective measures were taken.
Mr Mancotywa noted that the Special Investigating Unit (SIU) had ongoing investigations into the NHC. He said there was no apparent explanation why the SIU had singled out the NHC, as there were 35 different programmes funded by the DAC, and no other programmes were being investigated, even those with adverse audit reports, and despite the fact that NHC was not alone in receiving National Lottery funding.
Mr Mancotywa alleged that there could have been pressure put to bear on the SIU by the former Minister of Arts and Culture, citing the fact that there had been serious breaches of corporate governance principles, including use by the Minister of one of the NHC council members, who were all wrongly appointed. He claimed that only one council member was appointed in a proper manner and that one of the council members was, without the knowledge of management, given a contract to do the work that management should have been performing. At some stage the Minister had “invaded” the offices of NHC, and some files were later found to be missing. When the Council had met to discuss this it had called on the Minister for an explanation, although some claimed not to have been aware of it, as they did not work at the Council full-time. The Minister had eventually disbanded the Council, claiming that Council Members had failed to disclose certain material facts.
Mr Mancotywa then outlined some of the heritage programmes and key achievements, as well as the policy that was being developed. He described the
Discussion
Dr A Lotriet (DA) asked the reasons for the increase in the salary account from R5 million to R7.3 million.
Ms Stella Ndhlazi, Funding Manager, NHC, stated that all the information, including the breakdown of salaries, would be set out in the annual report. In 2010, various new positions, as well as annual inflation adjustments, resulted in a higher wage bill than the previous year.
Dr Lotriet was concerned that several of the councils falling under the DAC had very similar mandates, and asked what the Department and the NHC were doing to rectify the problem of overlapping mandates.
Mr Sibusiso Xaba, Director General, Department of Arts and Culture, said that there was no evidence that projects were overlapping. Each agency had its own mandates. However, the DAC would continue to refine the process and assist the agencies so that each followed its own mandate to the letter without interfering with others.
Ms F Mushwana (ANC) wanted to know if the NHC had plans to take the ICC program to all provinces, or whether it would remain restricted to only a few.
Mr Thendo Ramagoma, General Manager, NHC, stated that the reason for hosting the SATMA awards in
Ms Mushwana pointed out that the heritage programmes and services were not always easily accessible to all people, and asked what NHC was doing to ensure that there was wider access.
Mr Ramagoma said that the main problem with access was linked with language limitations. Little literature was available in indigenous languages, so it was impossible to reach everyone, especially those in the rural areas. There were also problems with the locations, but NHC was looking into that. He added that NHC was intending to change the policy for visits to heritage sites. Currently, local visitors would pay the same as foreigners to visit the heritage site, and the NHC was preparing a position paper to raise this in Parliament.
The Chairperson interjected and asked Mr Ramagoma to keep to the point.
Ms Mushwana also called for an explanation of the final year budgets, and asked how NHC was going to allocate expenditure. She questioned what amount had been spent on each programme and project for the years 2008, 2009 and 2010.
Ms Mushwana asked what was being done to ensure that people from the grassroots had access to community heritage services.
A Member questioned the audit report, and also wanted more details about the alleged interference by the former Minister. She also asked what had led to the dismissal of the one particular employee before the entire Board was dismissed.
Dr Lotriet asked for an estimate of the total costs associated with the SIU investigation, and what funds would be used to pay for this.
The Chairperson noted that Mr Mancotywa had made several accusations against the former Minister, who was not present at the meeting. She asked him to explain in detail what had been the concerns of the Council.
The Chairperson also asked Mr Vusithemba Ndima, Acting Deputy Director General, Department of Arts and Culture, to explain why he, together with the Minister, had closed up the offices of the NHC.
The Chairperson was also concerned about the cost of the audits by the Auditor-General and PriceWaterhouseCoopers, pointing out that NHC was operating with public funds and must provide details.
The Chairperson asked if the SIU’s investigation had in any way hindered the work of the NHC, and said that she was still not sure why the NHC was singled out for investigation.
Mr R Ledwaba, Chairperson of Funding Committee, NHC, said that it was challenging to try to work in an environment where threats were made that if board members did not comply with certain demands or work, they would be dismissed, and noted that this was the reason behind some of the resignations.
The Chairperson asked who had made such threats.
Mr Ledwaba said that his colleague and the Acting Deputy Director General were present at a meeting where these threats were made.
Mr Ledwaba then commented on the costs. NHC was aware that public funds had been used to pay for the investigations. However, he felt that the DAC should be providing an explanation on that. He said that the investigations by both the SIU and PriceWaterhouseCoopers were interfering with each other and had hindered the work of the former Company Secretary, who was constantly being called upon to leave her own work and provide both these investigating agencies with support. There was no doubt that the investigations had made it difficult for NHC to perform its daily operations. The Board had felt that NHC was not able to attend to its projects in the correct way.
Mr Ledwaba said that the whole issue of the Minister “invading” the offices was more concerned with removing the Chief Executive Officer (CEO). The Chief Executive Officer was under a contract. It was possible that the disbanding of the whole board was linked to the dismissal of the CEO.
Mr Mancotywa stated that the NHC would be better prepared to present on all issues when it next appeared. He said that the lines of communication with the former Minister were broken, and he had felt that there were abuses of power, that the NHC employees were not treated with dignity and felt “terrorised”.
Mr Sibusiso Xaba, Director General, Department of Arts and Culture, said that, whether correct or not, decisions had been taken by and implemented at the request of the former Minister. He pointed out that the Minister should not be seen as a person, but as an office. He could not comment on whether the SIU investigation was wise or warranted, but there was no evidence presented to him to indicate that the NHC was “singled out”. The outcome of the investigation, in hindsight, would indicate whether it was indeed warranted.
Mr Xaba confirmed that the cost of the investigations to date was R1.5 million. The investigations had been launched, and must proceed. NHC would have to find some way to continue its daily operations while supporting the investigations.
A Member noted the statement that the NHC had outsourced the Monitoring and Evaluation of its projects and asked whether this would not add to the expense, and why the monitoring could not be performed internally.
Ms L Moss (ANC) wanted the NHC to explain the establishment of the cooperatives to oversee artisan training, and questioned why National Lottery funding was being used for training purposes. She wondered if the training aspects should not fall under the Department of Higher Education, so that the funding allocated to it now could be used for something more directly related to the heritage programme.
Ms Moss pointed out that the NHC had complained that it did not have a competent supply chain manager, but asked why not sufficient training had been given to ensure that all staff were fully qualified to perform their duties. She also enquired how far the NHC had gone in completing its internal skills audit.
Mr Ramagoma said that the DAC had performed the skills audit and would be able to respond on the funding for skills training.
The Chairperson concluded that the correct procedures must be followed by the NHC, and the correct documents must be attached to future presentations. She also requested that in future, the NHC should bring more details about ongoing projects and finances.
Pan South African Language Board (PanSALB)
The Chairperson noted that the Pan South African Language Board (PANSALB) had been asked to appear before the Committee because it had become clear that it had become dysfunctional, was on the verge of being dissolved, and that corruption charges had been laid against it. She thought that the Board needed to explain who had been suspended, the reasons, and provide explanations as to why the Board was not functioning.
Dr Lotriet referred to the presentation that had been prepared (but was not presented) by PANSALB and indicated that this did not address the crisis. Members needed to know the legal issues, because this presentation would not address the issues that needed to be discussed, and also contained no details on the finances. For this reason, she recommended that this presentation should be postponed.
Ms Mushwana agreed, and recommended that PANSALB should be requested to return, with more details, the following week.
Mr Xaba said that he would like to hear from the DAC about their views, but agreed that there was a necessity for PANSALB to produce an explanation and further financial details.
The Chairperson said that it was unacceptable that no proper information was included in the presentation. The members demanded an explanation for the deficit of R101 million, as also a full explanation on the allegations of corruption. PANSALB was an important entity and Members therefore required a full briefing. It would be asked to attend again in the near future with all the information.
The meeting was adjourned.
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