The Department, Sport and Recreation South Africa, briefed the Committee on its Annual Report 2010/2011. The activities of the SRSA were elaborated upon and members were given a breakdown of its financial performance in terms of its allocation versus its expenditure and audit queries. Members entered into robust discussion on issues of unauthorised expenditure; irregular expenditure; and fruitless and wasteful expenditure. The concern was why investigations into these matters dragged on and why had the Committee not received progress reports of the investigations. Concerns were raised about the inability of the SRSA to monitor conditional grants that were allocated to provinces.
The Committee considered the Higher Education Laws Amendment Bill and adopted it without amendment.
Sport and Recreation South Africa (SRSA) Annual Report 2010/11
The Department, Sport and Recreation South Africa, delegation comprised of Deputy Minister Gert Oosthuizen, Ms Sumaya Khan, Acting Director General, Mr Makoto Mattala, Chief Financial Officer, Ms Rohini Naidoo, Director: School Sport, Mr Paul Singh, Chief Director: Client Liaison, Mr Simphiwe Mncube, Director: Facilities, Mr Retief Le Roux, Acting Chief Director: Corporate Services, Mr Bernardus Van Der Spuy, Director: Strategic Services and Ms Noma Kotelo, Senior Manager: Sport Support.
Ms Sumaya Khan, Acting Director General, stated that the key strategic focus areas for SRSA were to increase the number of performances in sport at international level, contribute to the Outcomes of the Government’s Programme of Action and develop national policies and guidelines for sport and recreation in the country.
For the period under review the SRSA had 220 funded posts of which 188 were filled. The SRSA had obtained an unqualified audit report for 2010/2011 with matters of emphasis raised by the Auditor General. The SRSA had been working on the National Sport and Recreation Amendment Bill, the Combat Bill and the SA Boxing Amendment Bill. It was dealing with fitness regulations and safety at sport and recreational events regulations. The 2010 FIFA World Cup had been successfully hosted and 17 guarantees had been successfully managed. Six legacy projects had been initiated. A total of 336 athletes were provided with sport support services. Support to athletes was complemented by basic sport science education for 63 coaches. The SRSA had received assitance from the German Government and the European Union.
Challenges faced by the SRSA were:
▪ Insufficient human and financial resources to implement the strategic plan. The finalisation of the Sports Plan and the review of the SRSA structure should address this challenge.
▪ Insufficient capacity to monitor the conditional grant given to the provinces to ensure that funds were utilised for their intended purpose.
▪ Management of performance information which the Auditor-General found wanting.
▪ Governance within public entities, sport and federations.
Another consideration was the lease of the building in which SRSA was located was expiring on 31 October 2011.
The presentation then looked at the performance of each of its six programmes by comparing targets with actual results: Administration, Sport Support Services, Mass Participation, International Liaison, Facilities Coordination and 2010 FIFA World Cup Coordination (see document). Mr Singh and Ms Naidoo made the inputs on their respective Programmes: International Liaison and Mass Participation. SRSA also referred to the mandates of the two public entities that report to it: Boxing South Africa and South African Institute for Drug Free Sport (SAIDS). Also included was a detailed report from SRSA’s Audit Committee.
Mr Mattala continued the briefing by way of a second presentation with a breakdown of the financial performance of the SRSA. For 2010/2011 the SRSA had spent 99.7% of its funds. A breakdown of allocation versus expenditure for each of the six programmes was given. Figures for mass participation provincial allocations and 2010 host cities allocations were provided. Problems with Boxing SA governance was noted. Three matters of emphasis were raised by the Auditor General:
▪ unauthorised expenditure of R704, 620 was incurred in prior years which related to payments made to the Seventh-Day Adventist Student Association (SDASA) Youth Conference in 2007;
▪ irregular expenditure of R3.3m was incurred of which R790, 000 related to the prior year and R2.5m related to the current year due to non-compliance with supply chain management regulations and with delegation of authority. The irregular expenditure for the current year was incurred due to non compliance with supply chain management regulations as well as non compliance with the SRSA’s delegations of authority.
▪ fruitless and wasteful expenditure of R7.2m incurred in prior years which related to double hotel bookings and payment made for a venue that was not utilised.
Members were consequently provided with a breakdown of the instances of irregular expenditure and fruitless and wasteful expenditure from previous years and the reasons for this. An action plan was in place to deal with the irregular, fruitless and wasteful expenditure. It noted its investigations into alleged corruption in the department and showed how much it had improved in terms of audit queries by the Auditor-General.
The Chairperson stated that the SRSA had raised the verification of information as a challenge. In the same vein the Committee received information from the SRSA that for example 100% of funds on a specific programme had been spent, however when members went to the provinces at grassroots level another story was heard. How did the Committee know that it was getting value for its money?
Ms B Mncube (ANC,
Deputy Minister Oosthuizen stated that transformation could not be limited to rugby and cricket alone. Transformation had to start at school level. The SRSA was working with the Department of Education on the issue. The idea of transformation was to get everyone on the same level. Having said this, there was a catch-up strategy in place. Some of the efforts were legislative whereas others were regulatory. He noted that realignment of funding would be a consequence of the National Sports Indaba. The SRSA was in talks with National Treasury and the corporate sector about funding for transformation.
On the matter of respect for national symbols and the national anthem, he noted that fidgeting sportspersons was a wider concept. He did state that an example must be set by national teams. The point was however taken. As far as the singing of the national anthem, the SRSA did not always have a say in who sang it. SRSA had asked the Department of Arts and Culture to get conformity in the rhythm and pace of SA’s national anthem.
He stated that the SRSA was engaging on the issue of lottery funding. Consequential from the National Sports Indaba was that funding needed to be aligned. Discussions with the Department of Trade and Industry had taken place over how effective the distribution agency for lottery funds was. The issue was perhaps that funds should rather be ring fenced against the Sports Plan.
Ms Khan stated that the South African Football Association had received funding from FIFA for legacy projects. A trust had been set up and registered.
Mr Mncube stated that lottery monies had been used to upgrade pitches. Concerns had been raised that funds had been wasted to build a pitch over existing pitches. It was simply upgrading of pitches.
Mr Mattala stated that the delay on fruitless and wasteful expenditure investigations was because the SRSA did not have internal investigation capacity. External persons were used for investigations.
The Chairperson stated that in reality there was a lack of public awareness about transformation. Ordinary people should be educated as to what was meant by transformation. It was one of the challenges. After 1994 there was great respect for the national anthem and symbols. The problem was that SA was sometimes too democratic for its own good. People were given too much leeway.
Ms M Moshidi (ANC,
Ms Naidoo stated that the issue of insufficient capacity to monitor conditional grants had come up in the SRSA’s review. It was an problem but a proposal had been put forward to put Programme Management Units in place. Hence there would be greater management at provincial level.
Mr Mncube referring to the donor funding, stated that the idea was to use sports to deal with social ills. Full size facilities could not be built using donor funds. The SRSA had seven pilot projects to which they tried to adhere to a rural bias.
Mr Mattala stated that donor funding was funding that was received in kind. For KFW 5.5m Euros and 4.5m Euros were made available. For GIZ, 7.5m Euros were received by way of donations in kind.
Mr Le Roux, speaking on the rationalisation of staff, referred to slide 25 and stated that 10 persons had been appointed on contract, the contract had expired and the persons were released. The skills of the individuals concerned were specific and could not always be accommodated.
Mr M De Villiers (DA,
Mr Singh explained that the training for coaches had not only been for athletics but other sporting codes as well. The training was of a scientific nature on how to use sports science. He conceded that Boxing SA did indeed have governance problems. The appointment of a new board for Boxing SA was a positive step in the right direction. The board had met with the SABC and eTV to discuss bringing back coverage of boxing matches on a Friday night at 8pm. A new CEO had been appointed. The CEO had given SRSA an analysis of its finances. The SRSA in turn spoke to National Treasury to increase the SRSA’s funding towards Boxing SA. National Treasury could not increase the funding but asked the SRSA to prioritise an increase in funding to Boxing SA.
Mr Mattala explained that in anticipation for the 2010 FIFA World Cup, funds were allocated specifically for tournament preparations in addition to the SRSA’s normal budget allocation. Hence the total amount seemed huge. However after the World Cup the extra funding was stopped. It was conditional funding in any event. Hence there seemed to be a drastic decrease in funding. The opposite was actually true; there was a marginal increase in the SRSA’s budget allocation. A distinction needed to be made between allocated budgetary funds and World Cup funds.
He noted that under spending took place in the
Mr Le Roux acknowledged that vacancy levels were a problem. The majority of vacancies was in administration, specifically Levels 7-8. He noted that it was very difficult to retain people. The SRSA had even spoken to organised labour about it. Why do people leave? As much as 43% of staff had left for higher salaries in other departments. The SRSA was unable to always provide a counter offer. He conceded that it was true that some staff received salaries that were higher than their grade. The reason was historical as staff had come from the old Sports Commission. Travel allowances added to salaries made it seem that salaries were high. The SRSA was managing the issue. On sick leave, the SRSA was not above the average for government departments. It was eight days. Leave was regulated in terms of the Public Services Act.
Mr W Faber (DA,
Mr Mattala noted that the process around unauthorised expenditure was different to irregular and fruitless expenditure. He referred to the R704 000 unauthorised expenditure on the youth conference held in 2007. Unauthorised expenditure could only be condoned by the Standing Committee on Public Accounts (SCOPA). The SRSA officials transferred to Correctional Services were transfers for jobs and not to be incarcerated.
Mr S Plaaitjie (COPE,
Mr Mattala, referring to rollovers of MPP funds, stated that the SRSA engaged with provincial departments to check on progress. Provinces submitted requests for rollovers to National Treasury for approval. The money owed to FIFA was VAT funds. FIFA was granted a discount on VAT from 14% to 12%. The SRSA had estimated that R40m would have been sufficient to reimburse FIFA, the amount had not been sufficient. As at September 2011 a total of R16.6m was owed to FIFA.
The Chairperson, referring to school sports and the involvement of the SRSA and the Department of Education, asked why was the Department of Agriculture not taken on board to encourage learners to plant things. She asked if value for money was obtained on the MPP. Referring to the funding received from the German Development Bank, did rural areas benefit from the funding? What provinces benefitted? Donor funding should not be used to pay employees. She referred to the unauthorised expenditure of R704 620 in 2007 and stated that the Committee needed a progress report. Progress reports were needed on all cases.
Ms Naidoo said there were examples in the
The Chairperson reiterated that the Committee had never received progress reports on the long investigations done by the SRSA. If these were external investigations, why were timeframes not set? She was not convinced by the response given. Neither was she convinced that if donor funding was “in kind”, how could most of it been used for compensation.
Ms Mncube shared the Chairperson’s sentiments about the investigations. She felt that the SRSA was merely shifting the blame. The problem was that leadership was lacking.
Mr Plaaitjie repeated his question as to why cases had been reopened. What was the reason for MPPs continually having funds rolled over?
Ms Khan noted that applications for rollovers were made where actual commitments had been made in the previous year. In terms of actions taken against provinces, she stated that when funds were allocated to provinces it was in terms of the equitable share. Other factors like performance were looked at when allocations were made. The better a province performed, the more funding it received. Some provinces got more, others got less.
Ms Moshodi asked when it was likely that the SRSA would get a completely clean audit report.
Ms Khan stated that the SRSA had regular audit steering committee meetings. There was a list of issues raised in the Auditor General’s Audit Report as well as in reports of previous years. The SRSA did have an action plan to address the issues. It was difficult to say when the SRSA would get a clean audit report.
Mr Faber asked whether the staff going over to Correctional Services was still to be investigated. He had not gotten a clear answer about why the unauthorised expenditure on the youth conference was not done in terms of the budget vote.
Ms Khan stated that staff moving to another department could still be investigated as long as they remained in the public service. The SRSA did get regular reports on its investigations.
Mr Mattala agreed to provide the Committee with a progress report on its cases in due course.
Higher Education Laws Amendment Bill
Adv Eben Boshoff, Chief Director: Legal and Legislative Services, Department of Higher Education and Training, stated that the Bill proposed amendments to several pieces of legislation. It was a section 75 Bill.
Relating to the Higher Education Act, Clause 1 and Clause 2 dealt with the same principle of how to deal with conflict of interest of members of the council of a Higher Education institution. Clause 3 dealt with timeframes by increasing the timeframe from 30 days to 90 days.
The rest of the clauses dealt with the National Student Financial Aid Scheme (NSFAS) Act. It gave the Minister the opportunity to intervene if there was mismanagement, to dissolve the board as well as appoint an administrator. All the issues were linked to accountability. The last issue was the repeal of section 23 of the NSFAS Act, No 56 of 1999. The section had placed an obligation on an employer to deduct money from an employee that owed money to the NSFAS. This was to be repealed as this obligation was considered an infringement of the rights of an employer. Section 23 would be repealed as the National Credit Act was there to cover this.
The Chairperson asked for guidance on whether to deal with the Bill clause by clause or page by page.
Adv Anthea Gordon, Parliamentary Legal Adviser, stated that if there were committee amendments, the Bill should be dealt with clause by clause. If there were no amendments effected by the Committee, it could be dealt with page by page.
Mr De Villiers pointed out that there were no amendments.
Adv Gordon confirmed that there were no amendments.
The Chairperson proceeded to guide the Committee through the Bill page by page.
The Bill was adopted without amendment.
The meeting was adjourned.
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