Department of Arts and Culture 2012/13 Third Quarter Performance Report
Arts and Culture
20 February 2013
Chairperson: Ms L Moss (ANC)
The Department of Arts and Culture delivered a report on the Third Quarter 2012 performance and expenditure. It was reported that a number of targets had been met, and the spending overall amounted to 74, just under the targets of 75% by the end of the quarter. However, there was quite a wide variance of spending within the programmes and by economic classification. There had been over-spending on the administration programme, mainly because of 131% spending on compensation of employees, because a number of priority senior management posts were filled, and overspending also in the programmes dealing with performing arts and national language services, with the others showing underspending ranging from 63% to 72%. The spending by economic classification showed that there was slight overspending on conditional grant transfers, and transfers to non profit organisations, but underspending on goods and services, capital works, household spending and capital assets. Provincial performance was generally improving, but was still poor in Eastern Cape and Limpopo, which had been placed under administration. The DAC had visited these provinces to try to fast-track expenditure. Capital works spending was under budget because of delays by the Department of Public Works (DPW) but it was later explained, during the discussion session, that the DAC had made plans to reduce its reliance on DPW. The households spending would be accelerated in the next quarter because National Treasury had approved a virement of funding for the Mzansi Golden Economy Projects.
Members raised wide-ranging but similar concerns. They were not entirely happy with the explanations given for some of the discrepancies, asked what exactly the DAC had done to improve spending in the provinces, noted that reasons given for delays on some of the projects, and the projects themselves, were recurrent, such as the upgrades of the Playhouses. They wondered if the conditional grants were always being used for the purposes intended, specifically questioned the libraries grants and utilisation of premises and books, and asked how DAC monitored the allocation and spending of funding. They asked for elaboration on problems with service providers and questioned how DAC planned to deal with the DPW problems, with one Member pointing out that it was up to DAC to ensure that it did obtain delivery as promised. They wondered why DAC waited until the end of the year to purchase capital assets, and asked for lists of assets. In general, they asked about plans to correct discrepancies, risk management at the DAC, and why DAC had taken so long to manage certain processes, including the hiring of staff, and whether all critical posts were now filled. They were worried that, given the current situation, the Department may not achieve its targets by the end of the financial year. More detail was requested on the Mzansi Golden Economy, the projects that were being run, why projects tended to be run in the bigger centres, and how the projects were promoted. They asked about the progress of legislation through the Department, attendance of delegates at international summits, cooperation with other departments and tracking of bursary students. The DAC finally commented that it had been in communication with the Pan South African Language Board in relation to the former staffing problems there, and the legal action recently undertaken, and would be able to report back shortly..
The Acting Chairperson called for the apologies, which were noted.
Ms F Mushwana (ANC) had asked to be excused from 10:00 to attend a doctor’s appointment.
The Acting Chairperson said that she would not accept this as she herself was at the meeting despite not feeling well.
Ms M Morutoa (ANC) expressed the view that the apology was in order.
Mr S Ntapane (UDM) suggested that this was a matter better discussed in private.
Department of Arts and Culture (DAC) Third Quarter 2012/13 Performance Report
Mr Sibusiso Xaba, Director-General, Department of Arts and Culture, tabled an apology from the Head of Communications, who had taken ill.
Mr Xaba tabled the performance overview of the Department of Arts and Culture (DAC or the Department) for the third quarter of 2012/13. He noted concerns raised by the Committee during the presentation of the second quarter review, and noted that he had now amended the format, to contextualise the report better.
He noted that the targets for the third quarter were fully achieved, and compared the achievement across the three quarters of the year, noting that the general benchmark for achievement by this time was set at 75%. The total spending by this time for DAC was 74%, just short of the target.
He set out the spending across the six programmes of the Department (see attached presentation). Programme 1 had spent 83%. The remainder of the programmes’ spending was summarised as 79% in the Performing Arts programme, 86% for National Language Services, 63% for Cultural Development, 70% for Heritage Promotion and 72% for National Archives and Library Services. He then set out the economic classification, noting that on compensation, DAC had spent 71%, for Goods and services (including payments for financial assets) it had spent 85%. There had been 81% on conditional grants, that were transferred. The capital works, which he noted was for construction of buildings, had spent 55%. Transfers to non-profit organisations had amounted to 88%. The households spending comprised 47% and there was 46% spending on capital assets.
Mr Xaba noted the over-spending, to the tune of 131%, on personnel under Compensation of employees. He noted that this was due to certain management positions being filled, as this had been prioritised. Mr V Ndima had been appointed as Deputy Director-General for the DAC . In the new financial year there would be all posts filled at executive management level\.
He highlighted the conditional grant transfers, noting that by the end of this quarter, R459 million of the R564 million conditional grants had been transferred to provinces. The balance would be transferred in the fourth quarter so that the provinces could complete their programmes as listed. From a delivery point of view provincial performance was improving. However, he reminded the Committee that Limpopo was currently under administration. For this reason, only R31 million of the R60 million budget was spent, which was a problem. The national DAC had visited Limpopo to assist and fast track the expenditure. He trusted that this province would be able complete its projects by the end of the financial year.
Mr Xaba noted the spending of R82 million on the different entities for Libraries and Heritage Institutions. He assured Members that each entity was different, and no over or under expenditure was expected by March 2013.
In respect of capital works spending, he noted that the reason for under-expenditure, at 55%, was due to delays by the Department of Public Works (DPW) and the Independent Development Trust (IDT), who had not submitted claims timeously for payment. Transfers to non Profit Institutions were at 88%, and these amounts had been transferred to BASA, Blind SA and Engelenburg Arts Collections.
In regard to the households spending of 47%, Mr Xaba said that this would accelerate in the fourth quarter as National Treasury (NT) had granted approval for a virement of funding between goods and services and households, in respect of the Mzansi Golden Economy allocation.
The capital assets spending of 46% related to the purchasing of machinery and equipment, including ICT equipment. He noted that further expenditure would be incurred before year-end for antivirus software, network monitoring software, the website project, servers and storage.
Ms H van Schalkwyk(DA) referred to the item on conditional grants, and enquired if these were for he building of the libraries, or if they related exclusively to the projects. She asked if the R460 million allocated for conditional grants was being used for the purposes intended. She also wanted to know why the DAC was dealing with funding of non-government organisations, saying that there were other agencies who dealt with such funding.
Ms van Schalkwyk questioned why the presentation noted that certain targets had not been met due to problems with service providers.
Ms van Schalkwyk questioned the status of the legislation on language practitioners and when it was likely that the South African Languages Bill would be to be implemented.
Ms van Schalkwyk asked how the Department would choose the delegates who were to attend international meetings, and what the cost implications of this were.
Mr S Ntapane (UDM) requested the DAC to specify the names of the capital assets in full in the presentations in future. He wondered why DAC seemed to wait to the end of the financial year to purchase, and why more capital assets were not purchased in advance.
Mr Ntapane noted that under programme 1, some projects had not been completed, which was problematic, and also asked what DAC would be doing about this. He commented in general that there were delays in certain programmes, with little finalisation, and wanted to know what structures were in place at DAC to monitor this, whether a corrective action plan was needed, and when this was likely to be done, asking also why this had been so long in preparation.
Mr Ntapane commented that every department was getting millions for compensation of employees but what was actually happening in reality was that substantial amounts were being spent on consultants.
Mr P Ntshiqela(COPE) noted that social cohesion and development of languages were important issues in the long term.
Mr Ntshiqela was concerned at the underspending and how this would translate across also in the new financial year.
The Chairperson firstly noted that the presentation should have been sent to the Committee seven days before the meeting, but it was submitted late, on 18 February. This was unacceptable.
The Chairperson summarised that several Members had raised their concerns about under-achievement by end December, and there was a distinct possibility that the DAC would not meet all its targets by 31 March 2013, the end of the financial year. She had already voiced her concerns about the low rate of spending, and now she asked what DAC intended to do to address this. She also wanted specific answers as to its plans in regard to the poor performance of Limpopo and the Eastern Cape.
The Chairperson asked how much the DAC planned to spend on Mzansi Golden Economy and which institutions and provinces would benefit from this.
Ms M Morutoa(ANC) was concerned about whether and how the conditional grants were to be adjusted, in view of the under-performance. She had noted that the Auditor-General South Africa (AGSA) was satisfied that the DAC had streamlined its performance indicators, and was adhering to the SMART (Specific, Measurable, Attainable, Relevant and Timely) principles around reporting. However, she was concerned at the continuing under-performance. Whatever the level, it would need to be investigated, and reasons given.
Ms Morutoa echoed concerns of previous Members in relation to the lack of delivery on the part of service providers, and underspending in Limpopo and Eastern Cape, and said that these provinces had to be shown how to spend more effectively.
Ms Morutoa had concerns about risk management, saying that it was not highlighted what mitigatory actions were taken.
Ms Morutoa voiced her concern about the libraries and wanted to know why consensus had not been reached.
Ms Morutoa stated that the acronyms used in the presentation were confusing. She later also highlighted incorrect page numbering on some of the copies.
Mr Xaba firstly explained the table showing a summary of budget and expenditure by economic classification, and said that it could be slightly confusing as the difference in the percentages related to the adjusted appropriation. On the conditional grants, the spending was R459,3 million or 81%. Expenditure in the Eastern Cape and Limpopo was low because these provinces were under administration. In relation to the release of funds, he reminded Members that only on completion of the necessary agreements and formalities would money be transferred, and this was the main problem that there had not been some transfers.
Mr Xaba assured Members that in relation to archives and record management, the money was being spent as it should be. He explained that the Libraries Grant had been used to build new libraries, upgrade some existing ones and buy library material. Initially, ten libraries were to be upgraded but this was increased to eleven. He was confident that the money here was being properly spent, in lie with the purpose of the grants. In all libraries there was sufficient library material and computers were available for library use. There had been full achievement in this quarter of three indicators.
Mr Xaba elaborated that there were problems with the procurement, and noted that the evaluation committee did need to sit more often. In relation to procurement, the DAC had considered, at the end of the last year, whether the system was working properly. Time limits were imposed on certain matters, and disciplinary action had been taken in respect of some incidents. He was confident that the procurement section had improved.
Mr Xaba said, in relation to the targets, that there had been about 90% achievement of targets set for the third quarter. The DAC had stricter plans to upgrade performance, and he was calling for results from managers to achieve objectives.
Mr Xaba noted that the Mzansi Golden Economy was implemented, and in the new year there were plans to hold many cultural events across all provinces. He gave an example of the Cape Town Carnival on 16 March 2013, and added that every province had at least two projects and there was co-financing. The National Arts Council had included children and youth events. Touring ventures had been offered and there were currently six theatres. In the next financial year, artists were to be introduced to schools, as part of the projects. Provincial schools would be offering art from about grade 5, and the Art Bank Project would be implemented. Artwork in South Africa would be promoted using South African artists, which would also market South African art, and help to curate it properly. The spending of budget for the Mzansi Golden Economy was on track. He reminded Members that this was a new project, in its first year of implementation. National Treasury had funded it, but under the classification of Goods and Services, which was clearly not correct as, for instance, this had an impact on the intellectual property implications. Much of the necessary documentation had been handled in December 2012.
Mr Xaba noted a comment that many of the projects were in cities. However, places mentioned in the presentation, such as Kalahari, Kwazulu-Natal and Grahamstown, were in fact rural. There was a challenge with all new projects in making them sustainable. The problem in planning events for the rural areas was that proper accessibility and appropriate facilities were needed at such places.
The Chairperson interjected that if there was not an airport at a particular place, this should not necessarily be a reason not to host a project there.
Mr Xaba noted that most projects had to start small until they could become self-contained and sustainable.
Mr S Ngcobo, Department of Arts and Culture, noted that caution was needed to ensure that if something was constructed in a town, the people would continue to benefit from this development later.
Ms Morutoa wanted to know which other areas were identified in the campaign for improvement.
Mr Xaba said that projects were being presented in both the rural and other areas. Craft development was mostly taking place in rural areas.
Ms Morutoa asked how they were being promoted and queried the involvement of Government Communication and Information Systems.
Ms L Moss (ANC) commented that this was work in progress and all must act to help others.
Mr Vusithemba Ndima, Deputy Director General, Department of Arts and Culture (DAC) responded to the question about the South African Language Practitioners Bill, noting that it had been through the Cabinet process and was now with the State Law Advisors.
Mr Mbulelo Jokweni, Deputy Director General, Department of Arts and Culture, said that the Official Languages Act had been promulgated.
Ms Veliswa Baduza, Chief Operating Officer, Department of Arts and Culture, said that the procurement processes were being revised. Each programme had its own assets plan, particularly in relation to ICT, but the process would be centralised.
Ms Baduza also said that social cohesion was being promoted by attendance at the African Summit.
Mr Xaba noted that the DAC would be implementing resolutions and asked for support from the Committee. There had been engagement also around the National Development Plan and this would force a more collaborative approach and rollout plans were being prepared.
Mr Xaba said that officials had attended courses on how to develop strategic plans. He believed that DAC would be meeting the objectives on improving risk management and risk management strategies would be implemented. All risks that were within the control of the DAC were managed at operational level.
Mr Ndima elaborated further on the conditional grants. Some were used exclusively for building and were transferred on that understanding and were used specifically for that purpose. Transfers were only done after business plans were presented. Any deviations from plans were scrutinised by the Director General and each case would be decided on its own merit.
Mr Ndima noted that it was useful for DAC to compare the provinces and see which were not doing so well. Comparisons on performance also gave indicators as to possible future rural development programmes.
The Acting Chairperson commented that this also assisted in oversight by the Committee.
Mr Conrad Greve, Chief Director: Human Resources, Department of Arts and Culture, spoke to when corrective steps would be taken on processes. He noted that all inputs would be considered, and the staff capabilities taken into account when populating the new staff structure, to ensure that it had the right people with the right skills. There were some hitherto unforeseen implications, and certain revisions were made. The staff matters were a standing item on executive management meeting agendas. The posts were being filled, as shown by the expenditure. The budget would determine the positions. There had been an identification of what posts were critical in order to deliver on the mandate.
The Acting Chairperson asked what the critical posts were, and questioned if they were all in senior management.
Mr Greve responded that the Deputy Director, followed by other Senior Management posts were advertised. The management team and Risk Committee Chairperson would identify and categorise according to priority and the impact that the filling of that post would have on ability of the DAC to deliver.
Mr D Mavunda(ANC) wanted to know how this process tied in with legislation on the public service. He was concerned about the role of the DPW.
Mr Ntapane commented that not only were changes expected within the DAC, but this Department must also take responsibility for ensuring performance by other departments whose work impacted upon it. He did not think that some of the reasons why DAC did not reach its targets were acceptable.
The Acting Chairperson asked why the spending in the North West province was reflected as zero.
Mr Ntapane asked for whom the translation and editing services were being done.
Mr Ntapane commented, in regard to the bursaries, that value for money must be ensured, and that the students’ results must be carefully tracked. If they were not performing properly, then more deserving students should instead be awarded their bursaries.
Mr Ntapane wanted to know if a service provider had been appointed to deal with the South African national flags already. He asked if 100 000 booklets had been distributed.
Mr Ntapane wanted to know if the libraries that were built were being used, and if the building and marketing of the libraries had been done in conjunction with each other.
Mr Ntapane asked who had delivered the training on legal compliance, and who attended.
Mr Ntshiqela commented that he was not happy with the level of explanation about the delays. He questioned also the substantial difference in performance between the provinces. He asked if the Free State had shown any improvement.
The Acting Chairperson noted that the issue of upgrading the Playhouses had been raised over and again for a number of years. She wondered if adding accommodation to them would not help to generate income. She asked exactly what upgrading entailed. She noted that DAC had a responsibility to monitor what was happening, to prevent the same issues being constantly raised. She noted that it would be useful to hold joint meetings with other affected departments.
Mr Xaba reiterated that some provinces were underperforming because they were under administration. He noted, in respect of the questions on Department of Public Works and upgrades, that maintenance and new buildings were at issue, but they were being managed. The DAC had reduced its reliance on the DPW by transferring funding directly to the theatres. It had also appointed the IDT. He agreed that DAC needed to take a lead on monitoring. All of this had the potential to build social cohesion.
Mr Xaba responded that libraries were used largely for basic education. Few schools had their own libraries and so the material provided to the new libraries was used by school children and other people in that area. He agreed that it would be useful to expand the marketing campaigns. In the 2013-2014 financial year there would be an increase in the Libraries Grant and the Department was spending.
Mr Xaba said that the first service provider for the flags would be appointed by 22 February, and DAC was trying to have 200 flags in each province.
Mr Xaba also gave an update on other matters. In the fourth quarter, there would be an increase in the purchase of goods. There would be one publication per quarter in relation to geographical names. He noted that a place name could only be changed if there was a request, with new names being supplied, and the Council to determine the issues fell under DAC. After a decision the changes still had to be gazetted but this was a long process. KPMG had reported backlogs. The National Symbols passport was being delivered. In relation to the comment about Government Communication and Information Systems, he said that working with this body would put events on a more strategic footing and gave DAC opportunities to distribute booklets.
Mr Xaba said that the translating and editing services were done for government and all other departments. It was correct that 130 documents were translated or edited in this quarter.
Mr Greve commented that the process of making the Deputy Director General appointments had been slow, because certain processes had to be followed. It usually took six months to fill senior posts. Some of the invitations to take up posts in the legal and audit divisions had been refused by the chosen candidates.
Mr Ntshiqela questioned how many people in South Africa knew the national anthem and asked if there was anything that DAC was doing to assist them in learning it.
Mr Xaba reported that the Minister had received letters from the Committee noting its resolution in relation to appointments and dismissals at the Pan South African Language Board (PanSALB). He clarified that this Board appointed its own staff, and DAC had nothing to do with this process. He had, however, discussed some of the issues with PanSALB. There was a legal process of reinstatement. There had been disputes around jurisdiction, subject to appeal and legal costs. A decision had been taken on a matter without PanSALB’s participation. He would be able to report back later on these issues.
The meeting was adjourned.
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