Department of Sport and Recreation South Africa Annual Report 2010/11

Sports, Arts and Culture

17 October 2011
Chairperson: Mr M Dikagwi (ANC) (Acting)
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Meeting Summary

The Chairperson noted an apology from the Minister of Sport, but invited the Department of Sport and Recreation (the Department) to present its Annual Report and financial statements for 2010/11, noting that there were concerns about some of the weaknesses highlighted in financial performance.

The Department presented an overview of it performance, and agreed that human resources remained a huge challenge, and although the Department had succeeded in filling 188 of the 220 posts, it battled to get the right candidates, correct gender and demographic balance, and had experienced a lot of resignations or failure to honour commitments as candidates were offered better salaries in other departments. The Department worked mainly with Boxing South Africa (BSA) and South African Institute for Drug Free Sport in implementing its programmes. It had received some funding from the German government for sporting facilities for Youth sports programmes, for technical support to SRSA and for programmes implemented during the 2010 World Cup. It had partnerships with other government departments to build sporting and community facilities. It was planning to move to a new building. The new legislation planned to improve governance of sport was described. In relation to grants, it was explained that the Department had agreements with various non-government organisations, including loveLife, to run programmes. 53 of the 66 national federations were funded, with the rest failing to comply with the requirements. The allocations were set out. The Sport Service report highlighted the revitalisation of clubs in various municipalities, and here, the Department had assisted 80 clubs, as against the targets of 40, but had only managed to revitalise 14, instead of the planned 20 leagues. It assisted with education on sporting disciplines. The Scientific Support Programme aimed to identify athletes with potential, and then assist them with basic sporting necessities, as well as coordinate government efforts of anti-doping. There had been an overwhelming number of athletes attending testing camps for selection. The Mass Participation Programme was tasked with managing the transfer of grants to various provinces, but some provinces had failed to take advantage of the opportunity and continued to perform poorly, particularly Mpumalanga and North West, whilst other payments had been delayed because of failure to meet the deadline. The World Cup had increased the number of participants in these programmes but lack of personnel at the Department hampered the programmes. Management of contracts in provinces remained a major problem. The Department had not managed to achieve its projected training figures although some provinces had started to establish school structures. The Department highlighted the tournaments, internally, where local clubs had competed, and it was noted that four international agreements were signed. The Department claimed that although facility managers were trained to maintain facilities, more money was still required to build sporting facilities. It was noted that the Department had received an unqualified audit, although there were matters of emphasis, particularly in relation to large amounts of unauthorised expenditure. The budget of R1.2 billion, which was a substantial decrease on budgets in the previous year, was 99.7% spent.

Members expressed concern at the performance of the Department, asking several questions about the staffing and capacity, and stressing that it could not function properly without a good leadership structure. Some felt that the Annual Report was lacking in detail, and said that real progress was not shown, and that actual reporting on how funds had been used was not included. They also expressed concern at the amounts transferred, particularly to loveLife, which it felt did not really assist sport in the country, and noted that loveLife had failed to engage properly with the Committee. They also noted that some matters were not highlighted in the Annual Report. In particular, they questioned allocations to schools and municipalities. Members agreed that the position of Director General should be filled as a matter of urgency, and said that the Committee would engage with the Minister of Sport on the problems.

Meeting report

Department of Sport and Recreation South Africa Annual Report 2010/11
Chairperson’s opening remarks
The Chairperson noted an apology from Mr Fikile Mbalula, Minister of Sport and Recreation. He noted that there were concerns about some of the weaknesses highlighted in financial performance, as evidenced by the report of the Auditor-General. He said that it was important that the Department implement the recommendations identified by the Auditor-General so as to improve the efficiency of the Department. He said that there was a need for political intervention to help the Department in achieving its goals, since it was a signatory to the Outcome 12(b) Delivery Agreement. He promised to discuss the challenges, including lack of capacity with the Minister and MECs. He noted that some MECs, particularly in provinces such as North West and Free State, placed a moratorium on employing volunteers which not only delayed submission of reports and meeting of deadlines but negatively impacted on the Department’s efforts of contributing meaningfully to social cohesion and transformation.

Ms Sumayya Khan, Acting Director General, Department of Sport and Recreation, presented an overview of the financial performance of the Department for year ending 31 March 2011. She explained to Committee members that the Department of Sport and Recreation (SRSA or the Department) had filled 188 of the 220 posts, but still had to grapple with leadership problems following the death of its former Director-General, Mr Vernon Peterson, in February 2011.

She explained that the SRSA works with two public entities, namely, Boxing South Africa (BSA) and South African Institute for Drug Free Sport in implementing its programmes. During 2010/11, the Department obtained funding from the German government which was used to build sporting facilities for Youth sports programmes, for technical support to SRSA and for programmes implemented during the 2010 World Cup. In order to enhance its potential to contribute significantly to social cohesion and development, the Department had entered partnerships with various government departments, including the Department of Human Settlements (DHS) and Department of Basic Education (DBE) to build sporting and community facilities in the rural areas.

Ms Khan said that the Department was making plans to move into a new building as the number of staff had increased and there was too little space to accommodate its own personnel as well as the others with whom it shared, including personnel from German Technical Corporation ( GTZ) and it had become unhealthy.

The Department had been working on some legislation to better improve the governance of sport in South Africa. This included the National Sport and Recreation Bill, which was tabled to the Minister and was awaiting inputs from the National Sport and Recreation Indaba, scheduled for November 2011. The Combat Sport Bill was submitted to the Director Generals’ Cluster for further consultation. The SA Boxing Amendment Bill had been withdrawn and would be substituted with the Combat Sport Bill. Some of the regulations drafted by the Department included those for the bidding and hosting of international events, special measures regulations, fitness regulations and safety at sport and recreational bodies regulations.

In relation to grants, Ms Khan said that the Department had formed synergies with non-governmental organisations (NGOs),such as loveLife, for the prevention of HIV/AIDS through sport and with the Sport Trust, BSA, SAIDS and Score for Community Sport. Out of the 66 national federations, only 53 received financial support, since the rest had failed to meet the deadlines and were not funded. The Department transferred R28,693 million to loveLife for the promotion of HIV and AIDS awareness though sport, R40 million was transferred to FIFA for the 2012 FIFA World Cup refund on value-added tax on tickets.  National Federations received R32,369 million, and R15 million was transferred to federations to hold National SPAORT Competitions. Boxing South Africa was allocated R2.208 million.

Ms Khan then outlined the performance of SRSA. She said that the SRSA was facing problems that needed urgent attention, as it was losing more staff than it could attract, mostly because people were transferring to other public sector departments that offered them better salaries. In addition, a number of people had been employed on contract for the FIFA 2010 World Cup tournament. The Department was struggling to attract white and coloured employees, to redress its employment equity. Out of a total of six top management positions two were African males, one was an Indian male, one was an African woman and one was an Indian female. Out of a total of 20 senior management posts, nine were African males, one was white, and nine were African females.

In relation to financial matters, two cases of irregular expenditure were identified.

Ms Noma Kotelo, Director: Sport Support, SRSA, presented the Sport Support Services report. She said that the Department supported, established and revitalised clubs in different municipalities, providing them with basic necessities. The Department had planned to revitalise 40 clubs but due to demand had ended up by reviving 80 clubs, being 17 in North West, 24 in Limpopo, 9 in Mpumalanga, 13 in KwaZulu Natal, 3 in Gauteng, and 16 in Free State. A target of revitalising 20 local leagues was set, but the SRSA had achieved revitalisation on only 14, due to distance constraints. The Department also assisted with education on different sporting disciplines.

Mr Simphiwe Mncube, Director: Facilities Coordinator, SRSA, presented on the Scientific Support Programme, which aimed to identify athletes with potential, and then assist them with basic sporting necessities, as well as coordinating government efforts of anti-doping. He said there was an overwhelming response in the number of athletes who attended testing camps for selection into the 2011/2012 assistance programme, with the result that the SRSA had exceeded its targets of 1 607 and had ended up selecting 1 853.

Ms Thokozile Mkhonto, Director: Community Sport, SRSA, presented the programme on mass participation, which was tasked with managing the transfer of grants to various provinces to encourage mass participation of marginalised communities. She said that despite receiving allocations of grants, some provinces failed to take advantage of the opportunity and continued to perform poorly. Mpumalanga and North West were those provinces with the worst performance. The latter showed under-expenditure of R10 377. The amount of transfers in the year under review had a variance of 1.585 million from the previous year, in which there had been allocation of R2.653 million. She said that payment of funds to certain provinces was delayed, due to poor expenditure and late reporting, with Mpumalanga failing to meet the deadline. Due to mass mobilisation, the number of participants increased dramatically in the last two World Cups. However, lack of personnel at SRSA hampered the success of the programme. She identified management of contract workers as one of the major problems still facing provinces, although measures had been put in place to contain the situation. In relation to education and training, she said the Department had managed to conduct 51 of the target of 85 for training. Some provinces, such as Northern Cape, KwaZulu Natal and Gauteng, had already started establishing school structures, which should be completed soon.

Mr S Mmusi (ANC) interjected to ask where and how the 63 number of coaches who trained under the Department of Basic Education were selected, and whether they included people with disabilities.

The Director answered that the coaches were taken from various provinces and were selected by national federations. She said the selection of disabled people depended on the aim of the training and purpose.

Mr Simphiwe Mncube then gave the presentation on international liaison and major events. He highlighted the tournaments where local clubs competed, and their achievements. The Department signed four international agreements to improve its participation on the international sporting arena. The SRSA managed to secure nine out of the target of ten exchange programmes. The Department gave technical assistance to four national federations holding international events in the country. Technical support ranged from assistance with temporary importation of goods, guidance on bidding and hosting an event in South Africa, and getting the event approved by the Cabinet by submitting the necessary memoranda in time, as well as other forms of assistance. Some of the clubs who received the support include Cricket SA, the Soccer Association, SASCOC, Roller Sport SA, South Africa Tennis Association and 210 UIC World Championship.

Ms Khan  presented the report on planning and advocacy, indicating that the Department had made good strides in lobbying municipalities to build sport and recreational facilities using the money obtained through grants. The Department ensured the training of 110 facility managers, as compared to its targets of trainings 75, to manage turf grass. However there was need for more funds to help build sporting facilities for both the community and schools in the country’s marginalised areas.

Mr Makoto Matlala, Chief Financial officer, SRSA, presented the financial statements of the Department. The department received an unqualified audit for the 2010/11. He outlined that the Department had had a budget of R1,2 billion, representing a 54% decrease from its allocation of R2, 8 billion in the 2009/10 financial year. She said the total expenditure for the year 2010/11 was R1.2 billion, representing a spending rate of 99,7%.This was caused by high decrease in transfers and subsidies after the World Cup, cancellation of the Youth Olympics Hospitality and Commonwealth Games Hospitality. He reiterated that the Department transferred R28,693 million to loveLife for the promotion of HIV and AIDS awareness though sport, R40 million was transferred to FIFA for 2012 FIFA World CUP vat tickets refund, National Federations received R32, 369 million to 52 National Federations and R15 million was transferred to federations to hold National SPAORT Competitions, and Boxing South Africa was allocated R2.208 million. 

Discussion
The Chairperson asked the Department to explain precisely what problem it was facing. If the problems could not be clearly identified, then the Committee had no way of resolving the matter. He asked if this was the cause of chaos that had characterised sport in the country.

Mr Daniel Mabulane, Director: Human Resources Management, SRSA, said that the structure of SRSA was not properly aligned, even though it had been approved by National Treasury. The Department was still familiarising itself with the new strategic plan introduced by the Minister to restructure so that it could meet the requirements.

Ms Khan said that the Department’s greatest challenge was lack of capacity to implement the turn around strategy adopted earlier this year. She said the Department was ready to receive any recommendations on how it could come out of the bad financial picture.

Mr L Suka (ANC) thanked the Department, and asked for clarity on the position of the Department on Millennium Development Goals. He said that the major problem that contributed to poor financial results for the Department was non-compliance with rules and laws as stipulated by the National Treasury.

Ms Khan said the Department had initiated a number of Millennium Development Goals projects, but the result of these had not been included in the Annual Report. The Department would consider doing so in the future.

Mr T Lee (DA) said that the Department’s major problem was lack of capacity and proper leadership, as most of the senior positions had been left unoccupied for a long time He agreed with the Auditor-General’s findings that the Department did not have oversight regarding financial and performance reporting, as well as compliance with laws, regulations and internal controls.

Ms S Lebenya-Ntanzi (IFP) said the Department, as highlighted by its own presentation, was clearly suffering from skills shortages and no strong human resources base.

Ms Khan said that the Department was struggling to find suitable candidates to fill the vacant posts, as some who had been interviewed fell short of the requirements, and in some cases where people were qualified enough, they had joined other government departments who had made better offers to them.

The Chairperson said there was no way the Department could improve its performance without a clearly structured leadership. He said if the issue of leadership and vacancies was not addressed with immediate effect the same problems which had been haunting the Department in this year would continue.

The Chairperson asked how the Department hoped to progress when it did not exercise oversight, and when there was no Human Resources plan in place in the Department. He asked who was supposed to fix the problem of vacancies and poor leadership. He said the issue of leadership had plagued the Department for a long time.

Ms Khan said SRSA had again posted adverts for the vacant positions and were confident of getting the right candidates to occupy the posts. However, the Department was indeed in poor shape as a result of the increased resignation of employees at senior levels.

Ms Khan added that SRSA was limited in its oversight by the Sport and Recreation Act, which prescribed that some of the powers were limited.

The Chairperson noted that some of the vacancies had been vacant for almost eight months, in contravention of the Public Service Act which stated that a government position could only remain unoccupied for a maximum of six months. He asked for clarity on the roles of some of personnel in the Department, He said that the Committee would have difficulties in helping the Department if it could not ascertain exactly where the bottlenecks in operations were. He promised to speak to the Minister to help solve the issue, as it was handicapping the Department, and was stifling its efforts to contribute to Millennium Development Goals (MDGs).

Ms Khan said that the Department had secured a person to fill the post of IT Director, and had a commitment to start work on a certain date. That person asked for an extension of time, and then advised that she could not honour the commitment. A Supply Chain Manger had also agreed to work for the Department but then went to another department where the offer was better. She said the Department was doing its best to address the matter but security checks on candidates were time consuming.

Mr Mabulane said that the Department was outsourcing maintenance and had decided, in light of the current process of restructuring, to leave the issue for the moment.
 
The Chairperson again promised to take the matter further with the Minister of Sport and Recreation, Mr  Fikile Mbalula. He said the environment that prevailed in the Department was not healthy for sport in the country and said there was need to engage the Olympic Committee SASCOC, as more and more sponsors had been leaving the Department.

Mr Suka said that the report had also pointed out that some of the resignations occurred because contracts had expired, and the advertisements to fill those contract posts were not advertised until after people had already resigned. He asked when the right time would be for the Department to advertise its posts.

Mr T Lee wanted to know how the Department was applying its equity policy, as the demographic figures had pointed to only one coloured female, compared to a majority of male of female Africans.

Ms Khan said that the Department did not discriminate against any race but was failing to attract white and coloured personnel to join the Department.

Mr Mabulane said that when the Department adopted the new strategic plan at the beginning of the year it was instructed to accommodate all the people it had engaged. There was no employment equity plan at the time, but the Department was working towards rectifying the anomaly.

Mr S Mmusi (ANC) wanted to know if the Department had a disability policy and whether it monitored transfers to make sure they were put to good use by the provinces or municipalities.

Ms Khan said that the Department had a disability policy but unfortunately it had not included the results in the report. The Department would cater for it in future reports.

Ms Noma Kotelo, Director: Sport Support, SRSA, said that the Department did conduct monitoring procedures and would visit the areas to do an onsite inspection, as well as get reports on how the beneficiaries used the grants.

The Chairperson was still unsatisfied on the point of exactly why so many people were leaving the Department. He also asked why unfinished cases of misconduct were they not dealt with.

Mr Mabulane said that the Department conducted exit interviews, where candidates had confirmed that they were leaving for better paying organisations. Due to budget constraints, the Department could not compete with other players in the public sector. With the appointment of the new Minister, two new advisory posts were created. Some money was being channelled towards renovating the new building and maintenance. In relation to unfinished issues of misconduct, he said investigations were ongoing.

Ms M Dube (ANC) wanted to know the fate of the employee who had been suspended, and asked who determined whether there would be a suspension and for how long.

Ms Khan answered that the person was suspended for six months and there was no financial implication for the Department.

Mr G Mackenzie (COPE) asked the Department to clarify why there was so much fruitless and irregular expenditure incurred.

Mr Matlala said that unauthorised expenditure amounting to R704 620 was incurred in prior years and related to payments made to the Youth Conference. The other irregular expenditure resulted from prior years, where there was double booking of a hotel and a venue that was never used. Another sum was also partially incurred from prior years, amounting in total to R3.3 million, of which R790 000 related to  prior years. The irregular expenditure of R2.513 million had arisen in the 2010/11 financial year, because of non-compliance with supply chain management regulations. Some of the money had been performance bonuses which were paid to the staff in 2007. A legal process had been ongoing to recover the money but the Department was advised by its legal experts  to let the issue lie as there were more expenses involved through litigation.

Mr G Mackenzie (COPE) was happy about the contributions made by sport in transforming lives, but wanted to know how many schools had been helped through the mass mobilisation projects and other projects. He wanted to know how many of the recommendations made by the Minister had been implemented. He also asked how many facilities in municipalities had been built through these projects. He indicated that the report was somewhat lacking in explaining how schools would benefit in the future.
 
Mr Mncube said the Department appreciated the observation. There were a number of achievements that came through the project but he did not have the details on the projects with him. He said the information was limited but the Department was going to address Members’ concern in the future through improved reporting.

Mr Suka said, with reference to school projects, that the Department should do more to see that each programme would be represented by its own budget, so that individual directors could become accountable.

The Chairperson agreed with the proposal on separate budgets for programmes, adding there was need to approach other departments of the issue.

Mr MacKenzie said that there was a lot of potential for projects to succeed, but the Department should ask for more money to fund and monitor programmes since sport was a very big discipline.

Mr Lee said that it was unfair for the Department to charge exorbitant fees for people in the rural areas to compete in leagues or tournaments. The Department should engage with Lotto to fund sport facilities in the rural areas. He questioned why loveLife was being given a large amount of the grants, although its contribution to sport was insignificant, whilst Boxing South Africa was being given an allocation of R2,2 million only.

Ms Khan said that there had been engagements with the National Lottery but nothing materialised, but the Department would continue to negotiate. In respect of loveLife, she promised that the issue would be sorted out by the next financial year. In relation to charges levied in rural areas, she explained that the Department had resolved not to fund national leagues, but would put more effort towards helping teams in marginalised areas.

The Chairperson said the issue concerning loveLife had been around several times, but this entity was not showing itself willing to engage with the Committee.

Ms Khan said SRSA was engaged in talks with loveLife and the Department still relied on this entity to implement its policies.

In relation to BSA, she explained that the grant to this entity did not come from the Department but was an appropriation by Parliament, and that BSA was not entirely dependent on government support, but also had other sponsors. She said a new body had been appointed to retain order, as resignation of some members had resulted in some sponsorship being withdrawn.

A Member noted that the report was much more to do with matters of compliance and operations of the Department but had said less on the objectives and strategies for achieving them. He said the Annual Report was good, but the big question was why a lot of issues arose from lack of compliance. He asked what objectives the sporting programmes aimed to achieve, in line with the current government’s goals. He said that he was not interested in administrative or operational measures of the Department, but what the Department was doing to enhance the potential of the government to achieve its goals. He was sceptical about the current position of events in the Department, and wondered if the Department was any nearer to achieving the government’s goal of bringing development through sport.

The Director agreed with the Member, saying that the SRSA had made plans to focus more on qualitative rather than quantitative achievements. She promised that the Department would ensure that its performance targets were in line with government efforts to develop the impoverished communities.

The Chairperson thanked all members for their contribution and assured the Department that he was going to lobby the Minister of Sport to help the Department in its endeavours to transform marginalised areas to become part of the development process. He said the position of a permanent Director General should be addressed with immediate effect.

The meeting was adjourned.

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