Pan South African Language Board: Allegations of corruption and financial crisis

Committee: Arts and Culture

Chairperson: Ms T Sunduza (ANC)

Date of Meeting: 21 Jun 2011

Summary

The Pan South African Language Board (PanSALB), although it had attended a previous Committee meeting, was asked to withdraw and amplify its presentation, and the current meeting offered it another opportunity to explain why it had written to the President to request assistance, why there was apparently a huge budget deficit, and to amplify allegations around internal reviews and disciplinary actions. The PanSALB Chairperson and members of its executive noted, firstly, that the appointment processes for members of its Board were problematic, in that they allowed for little continuity. The Board met at least once every quarter, when the executive management was required to brief it on operational and financial matters, in line with the annual business plans. PanSALB was to establish provincial language committees and national language bodies, and fund these units. The Board promoted multi-lingualism but did not promote any one language. It needed to partner with other organisations to deliver effectively on its mandate, but also needed capacity support. There were some questions around its status, which were highlighted by the fact that it reported directly to Parliament and the Minister. Although its funding was channelled via the Department of Arts and Culture, requests for funding, rollovers, retention of surpluses and virements were made directly to National Treasury. It was outlined that from 2008 to date, it had received substantially less than requested and this resulted in it not being able to deliver on all programmes. Although the average annual increase in funding was around 5%, its operational expenses had risen by 15%, and it feared that if these trends continued it would be unable to continue operations.   

PanSALB reported that the former Chief Executive Officer had been suspended, in February 2009, pending an investigation into alleged irregularities and misconduct. PanSALB stressed that there was no evidence of “corruption” despite this word having been bandied around. The then-Deputy Chief Executive Officer was appointed as Acting Chief Executive Officer, a position he held currently. A disciplinary investigation had been instituted, and, despite numerous delays, had recently been concluded, but the parties had been asked to comment on sentencing by 24 June 2011, and the final sentence in respect of the guilty finding would be handed down on 24 June. The cost of the disciplinary proceedings had been R2 million.

A brief report was given on the administrative issues, reiterating that there was quarterly reporting, outlining the scope of the programmes, the establishment of the National Language Bodies and Provincial Language Committees and the National Lexicography Units. It was stressed that PanSALB worked with provincial and local government. Again, it stressed the challenges around funding, especially for board members, and said that its 38% vacancy rate was also largely driven by inability to afford replacement staff. 70 out of 112 positions were filled. However, for some years it had received unqualified audit reports and there was no evidence of financial misconduct within PanSALB. The allegations made by one member of staff against others were briefly explained.

Members expressed their concern that PanSALB had, in its letter to the Presidency, claimed to have approached the Portfolio Committee several times without success, pointing out that PanSALB had certainly not approached the Committee over the last eight months. PanSALB defended itself by saying that this letter did not refer specifically to this Committee, and mentioned that a visit by Parliament in 2010 had resulted in promises, but no action. Members questioned the confusion over the lines of reporting, wondered if there were not overlapping mandates with other institutions, asked how the Office on Institutions Supporting Democracy was involved and called for its comment, and said there was a need for clarity on several legal aspects. Members were also concerned about the internal personnel difficulties, the appointment processes, conflicts between executive staff, and thought that further investigation was needed and asked whether PanSALB was seeking assistance from the Committee. Members asked for more clarity on the mandate of the Section 21 companies, the costing of the regional units, and the work of National Language Units. Members, and the OISD, said that it was difficult to assess the business plan, which was lacking in detail, and asked if there was a strategic plan in place when the funding was requested in 2009/10. It was agreed that a further meeting was needed to address outstanding issues.


Minutes

Pan South African Language Board: invitation to explain budget deficit
The Chairperson, in her opening remarks, reminded Members that the Pan South African Language Board (PanSALB) had been asked to appear before the Committee to explain the reasons for its apparent budget deficit exceeding R100 million. Although the Board had tabled a document at a previous meeting it had been asked not to proceed with the presentation, but to amplify it so that the specific questions of the Committee could be addressed. The Chairperson also noted that PanSALB had apparently written a letter to the President explaining the situation and had asked for additional funding, and the reasons for writing that letter must also be given. Finally, PanSALB was asked to shed light on the ongoing internal reviews and disputes that had also been exposed recently in the media.

Constitution and financing of the Board
Mr Elias Malete, Chairperson, PanSALB, noted that the PanSALB was appointed by the Minister of Arts and Consultation, in consultation with the Portfolio Committee. Although it had faced some criticism that it did not represent the languages spoken by all communities, the Board was in fact selected to fulfil the mandate behind its formation, and not to fill any language requirements. He named all the members of the PanSALB Board. The PanSALB Act (the Act) required annual election of its members, but this in itself was problematic since it did not provide enough continuity or opportunity for the individual Board members to fulfil his or her commitment to the mandate. Therefore it would be important to review this particular aspect. He then set out the organisational structure.

Mr Malete noted that the Auditor General South Africa (AGSA) performed audits for PanSALB, and these were reported to Parliament. A budget Committee was responsible for approving the budget annually. The Board would meet four times, in each quarter, to discuss financial matters. A three-pronged strategy had been developed, to ensure that PanSALB held to its vision and direction. The strategy for the entity would be agreed upon by the Board, and this would be in line with the Act and Constitution. The Board would make particular reference to the Constitution, to ensure that it was acting in accordance with its mandate.  The Board would also create an annual business plan. The Chief Executive Officer (CEO) would have to report to the Board, on a quarterly basis, on matters, including the financial statements.

Mr Malete then described the mandate (see attached presentation for full details) and highlighted some key components. PanSALB was to establish provincial language committees and national language bodies to advise it on any language matter that affected a province or a specific language. It also would establish national lexicography units, to operate as companies limited by guarantee, under section 21 of the 1973 Companies Act. It was to allocate funding to the units so that they could fulfil their functions.

Mr Malete stated that the primary objective of the Board would continue to be the promotion of multi-lingualism in South Africa. He emphasised that PanSALB was mandated to foster and create conditions for the development of official languages, but it did not create or promote the languages themselves.

A key strategic objective was to ensure prudent financial management and effective corporate governance. It was clear that, in order for PanSALB to work effectively, it would need to partner with other language organisations. However, it must also be recognised that it needed support for capacity, both at the head and its regional offices.

He noted that there was some question as to whether PanSALB must be seen as a Constitutional entity, or as a departmental entity. This meeting should help to deliberate on these issues, and to determine where, and to whom, PanSALB should report.

Mr A Mbilin, Financial department, PanSALB, stated that PanSALB received its funding directly from Parliament, via the National Treasury. The Department of Arts and Culture (DAC), however, was the conduit for the funding, and National Treasury advised both the DAC and PanSALB of the final amounts approved. PanSALB drew its own budget requests and presented them by itself to National Treasury. However, PanSALB was at the moment struggling to come to grips with certain changes in the funding rules.

He emphasised that when PanSALB requested virement of funds, this request did not go through the DAC, but was made directly to National Treasury. This was similar to the funding that it requested through the Medium Term Expenditure Framework (MTEF) and Estimates of National Expenditure (ENE), which were likewise requested directly from National Treasury. If PanSALB wished to retain surplus funds, it had to direct this request to National Treasury. Its financial statements were submitted directly to National Treasury and to Parliament, in line with the Public Finance Management Act (PFMA).

Mr Malete claimed that the reasons why he had placed emphasis on this funding structure was not to be considered as any sign of arrogance or measure of tension between the PanSALB and the DAC. PanSALB considered the DAC to be an important partner and would like to maintain a strong a relationship with the Department.  

Mr Mbilin stated that PanSALB was one of the public institutions mentioned in the Constitution. It was obliged to comply with the PFMA and Treasury Regulations, the PanSALB Act and with the principles of corporate governance.

In the 2008/9 financial year, PanSALB requested R151 million to deliver on its mandate, but it received only R43,6 million. In the following financial year it had requested R167 million and received R47.56 million. In 2010/11, an amount of R173.3 million was requested, but only R52,87 million was received.

He noted that this resulted in budget shortfalls, with the result that PanSALB was unable to deliver on its mandate and had been forced to suspend many of its projects. Despite the cancellation of these projects, its fixed costs remained the same. Although it had, on an annual basis, received increases of about 5%, its operational expenses had risen by 15%. If these trends continued, PanSALB would be unable to continue its operations beyond October 2011. This point had been made to National Treasury.

Report on disciplinary issues
Mr Malete then outlined the reasons and history behind the suspension of the former Chief Executive Officer. He noted that on 20 February 2009, PanSALB had suspended the then-Accounting Officer, Ms
Ntombenhle Nkosi, pending an investigation into alleged irregularities and misconduct. The Deputy CEO, Mr Chris Swepu, was appointed as the Acting Chief Executive Officer.

A forensic investigation was carried out, and as a result of the report, Ms Nkosi was charged with financial irregularities. After lengthy legal challenges and delays a disciplinary hearing was held in December 2010. The findings of that hearing were given on 8 June 2011. Ms Nkosi was found guilty as charged. The parties were asked, by 15 June 2011, to submit written evidence to the Presiding Officer of the Inquiry Committee, in aggravation or mitigation of sentence. Ms Nkosi had requested an extension of time to submit her evidence in mitigation, until 20 June. The Presiding Officer indicated that he would hand down the sentence by 24 June. Because of the seriousness of the findings, the Board was requesting that Ms Nkosi be dismissed.

Mr Malete emphasised that since the suspension there had been many hindrances to the daily activities of PanSALB. Staff were reluctant to follow the instructions of the Acting CEO. Ms Nkosi had also raised a challenge around the legal constitution of the Board of PanSALB, which resulted in further delays. On several occasions, employees submitted certificates from doctors excusing them from attendance at the hearings, which resulted in further delays. He noted that the matter had serious financial implications. To date, the cost of the disciplinary proceedings had been R2 million.

Report on administrative issues
Mr Chris Swepu, Acting Chief Executive Officer, PanSALB, noted that PanSALB had drawn an organisational strategy for a three year period, and also had an Annual Business Plan for a one-year period. These documents, approved by the Board, would guide the CEO’s activities. He noted that there would be quarterly reporting to the Board, outlining progress.

He noted that PanSALB operated through programmes and sub-programmes and summarised that Programme 1 dealt with issues of Administration, Programme 2 handled the creation of conditions for the development and use of languages, Programme 3 would ensure respect for all languages, and Programme 4 emphasised the promotion of languages. In order to achieve success under Programme 2, PanSALB required fully-functioning regional offices, which would, in turn, provide administrative support to the head office. The regional offices would assist in creating partnerships with provincial government departments.

In terms of section 8 of the PanSALB Act, PanSALB was required to establish a National Language Body (NLB) for each language, including Khoi, San and South African Sign Languages. These NLBs, together with the Provincial Language Committees (PLCs) and the National Lexicography Units (NLUs), were funded by, and accountable to, PanSALB.

PanSALB worked with all municipalities in the country to ensure that they all had language policies. In addition, it worked with Provincial Governments and local governments to monitor language policy development and implementation, and to investigate any violation of linguistic rights in any of the provinces. The Board of PanSALB, as mentioned earlier, met on at least a quarterly basis. The Board members were paid a sitting fee of R585.65 per meeting. Mr Swepu argued that this fee was one of the main challenges. Those sitting on the board were academics and professionals, all of whom were committed to the development of language. The sitting fee remained the same, whether the meeting was one hour or three days long. PanSALB had no competitive edge in attracting members, compared to other institutions. NLBs, with similar structures, faced similar challenges. The NLUs were set up as Section 21 companies, and were responsible for the development of dictionaries. They faced similar financial and staff constraints. The underfunding and low sitting fees for Board members were therefore the most significant challenges that prevented all the units from operating to their full potential.
 
Mr Swepu noted that although the total organogram listed 112 employees, PanSALB currently had only 70 posts filled, which meant that the vacancy rate was standing at 38%. This was not only quite high overall, but also pertained particularly in critical areas. For example, within the Language Business Unit, there was no one to oversee the translation and interpretation process.

Mr Swepu emphasised that for some years, there had been unqualified reports submitted by the Auditor-General, and there was no evidence of financial mismanagement or transgression by PanSALB. There was also, in the past, no evidence of irregular expenditure.

Mr Swepu then explained the souring or the relationship between PanSALB and Advocate Feni. Problems started when the Board of PanSALB had approved the new organisational structure. Mr Swepu had appointed some Acting Executive heads. Adv Feni had complained that Mr Swepu did not have the authority to appoint executive heads. Furthermore, he had suggested that he should have been appointed, as he was more qualified than Mr Swepu. There were also anonymous letters sent to the Board, which attempted to discredit Mr Swepu’s qualifications. Adv Feni was subsequently dismissed, and although Mr Swepu did not discuss this dismissal, he noted that Adv Feni had lost six appeals.

Mr Swepu stressed again that the Board and Committee should not refer to “corruption” in relation to PanSALB. There may have been some financial irregularities, but there were never any charges of corruption laid.

Discussion
The Chairperson noted that the Committee had been displeased with the content of the letter addressed to the President by PanSALB. This letter claimed that PanSALB had approached the Portfolio Committee numerous times, to no avail. However, she stressed that, over the preceding eight months, there had not been one approach made to the Committee by PanSALB and she requested an explanation of these statements.

Ms L Moss (ANC) noted that a copy of this letter was sent to Deputy Speaker of Parliament who forwarded it to the Portfolio Committee.

Mr Malete said that the correct protocol had to be followed. PanSALB had written this letter when it had been under-funded for the last twelve years. It had approached the previous Portfolio Committees over this period. The letter did not refer specifically to the current Portfolio Committee. He claimed that the issues had to be heard. In 2010, when this issue was raised in Parliament, some Members had called upon PanSALB to investigate, and had assured PanSALB that the matter would be looked into, but nothing came of those visits.

Dr A Lotriet (DA) stated that there was confusion as to the line of reporting for PanSALB. It was clear that it did not report to the DAC. However, there was also a need to understand whether PanSALB and the Commission for the Promotion and Protection of the Rights of Cultural, Religious and Linguistic Communities (CRL Commission) had overlapping mandates. If so, then the organisations should be streamlined.  

Ms H Msweli (IFP) wanted to know what exactly the purpose of the meeting was, since PanSALB had explained that it had already approached the Committee several times. She too sought some clarity on the legal aspects.

The Chairperson stated that the Office on Institutions Supporting Democracy (OISD) was represented at the meeting, but asked why only three members, and not the entire team, was present.  She also wanted to know why PanSALB had not tried to cut its expenses when it was clear that there would be a budget shortfall. She noted that PanSALB had stated, during this presentation, that it was not dysfunctional, and asked if that statement was a definitive claim by PanSALB.

In response to the questions around the legal lines of reporting and the possible overlaps, Mr Malete stated that there was a need to consult with the DAC. PanSALB wanted to improve its relationship with DAC. It also recognised that while the OISD could assist, it certainly did not replace the Portfolio Committee. The Portfolio Committee was an important entity for PanSALB to approach when there were problems.

Ms F Mushwana (ANC) was concerned about the sour relations in PanSALB, but wanted some clarity as to what it was suggesting that the Committee could do to address the situation.

Mr D Mavunda (ANC) stated that there were confusions about the appointment process and clearly there were some constitutional and legislative issues that needed to be clarified.

Mr Mavunda also expressed concern about the conflicts between the executive staff and said that there needed to be an investigation exploring the root causes of such conflicts.

Dr Lotriet asked for further clarity on the last case filed by Advocate Feni, particularly the outcome, as she was under the impression that the appeal may have been upheld.

Ms Moss asked why there were not sufficient support staff members to support the executive body.

Mr Swepu suggested that Members should read the affidavits and full information in the documentation, in order to understand the conflicts within the organisation.

Mr Swepu admitted that PanSALB had been unable to fill its vacancies, but submitted that it was unable to replace employees who left because of the budgetary constraints.

Ms Mushwana wanted to know how PanSALB tried to ensure that there was gender balance in its Board.

Ms Msweli asked for clarity on the mandates of the sections 21 companies and how far they had gone on the promotion of Khoi languages.

Dr Lotriet wanted to details of PanSALB’s relationship with the NLUs.

Mr Swepu explained that PanSALB had established the National Language Body for the promotion of Khoi and San languages and a lot of work had gone into promoting the development of these languages. Dictionaries had been created to support the local communities. However, he noted that one of the limitations had been that PanSALB, in creating these books, was in competition with other entities, who were able to sell their publications at a lower cost. PanSALB had also been working to try to ensure that South African Sign Language be included in the curricula.

In relation to the NLUs, he noted that the annexure to the presentation provided all the information and could help to clarify some issues. At one stage, PanSALB had ended up communicating more with editors than with the Chairpersons of the NLUs. The Board then began to appoint the editors, which made it easier to communicate with the units. In 2010, a meeting was held with the Chairpersons of all the structures. A major challenge highlighted was that of funding. PanSALB funded NLUs according to the formula crafted by the National Treasury, which meant that they received a portion of the funding given to PanSALB. Costing was done when regional departments were created. They were essential for the functioning of PanSALB.

Dr Lotriet commented that in regard to the funding, it was very difficult to assess the business plan, because there were not sufficient details provided. Dr Lotriet stated that the financial problems seemed to date back to when the regional offices were established and she wanted to know whether a costing was done prior to setting up the offices.

Ms Moss asked if there was any strategic plan in place, when PanSALB originally made a submission for funding in 2009/10.

Mr Malete said that PanSALB recognised that there were some weaknesses in the strategic plan and Annual Business Plan, and assured the Committee that more detail could be provided to address the problems. He said that the entire executive committee dealt with the budgeting.

Mr Swepu stated that PanSALB, by reviewing the operational plans of the business units, had recognised that there were problems and had therefore drawn its own business plans. The costing figures that were submitted by PanSALB were based on the original plans submitted by the various business units. He noted that, in regard to the legal costs, PanSALB had no choice other than to defend any claims made by employees through court action. It had to bear its own legal costs unless it received a costs award.

The Chairperson asked officials from the OISD to comment on the matters raised.

Ms Nonkosi Cetywayo, Head, OISD, said that she could comment on some of the points raised. The OISD mandate stated that it had the responsibility of working with the Chapter 9 Constitutional institutions and assisting the Chairpersons of the Committees on operational issues. She agreed that the Annual Business Plan appeared to lack depth and details, and did not indicate what PanSALB aimed to achieve with the funding it had requested. She stressed that there should be measurable and fully costed targets.

In regard to the lines of reporting, she noted that money was appropriated from Parliament. The Minister of Arts and Culture was present during the budget vote for PanSALB.

In regard to the letter to which the Chairperson had referred, she noted that this letter was addressed, within the Presidency, to the OISD. PanSALB had called for a response in seven days. However, since no individual was mentioned in the letter, it would not have been possible to respond in this time, and therefore PanSALB was informed that certain protocols needed to be followed.

The Chairperson noted that not all the questions had been answered, owing to time constraints. PanSALB would be invited to attend a further meeting so that discussions could continue.

The meeting was adjourned.