William Humphrey Art Gallery 2011/12 Annual Report and financial statements

Meeting report

Committee concerns about Minister’s absence
Committee Members expressed concern that the Minister seemed to have a standing apology for inability to attend meetings of this Committee, due to clashes with Cabinet meetings, and it was suggested that perhaps another time needed to be found.

Ms L Moss (ANC) said that a Chairperson had the power to raise the issue of attendance of meetings with the Minister. In view of the need to work with the Minister, perhaps he should be asked to attend quarterly at least.

Ms M Morutoa (ANC) agreed, noting that it was important for the Ministry to know the concerns of the Committee, as often Memorandums of Understanding (MOUs) were submitted and Parliament was expected to “rubber-stamp” them. On other projects also, there was a need to engage with the Minister, for instance on social cohesion. She suggested writing a letter to the Minister. The Committee did not know how far various projects such as social cohesion had gone. There was a need to engage with the Minister.

Mr N Van Den Berg (DA) said that he had asked for more information on an MOU, some five months ago, but had still received no information on it, despite the fact that the Ministry Liaison officer was present at the meeting.

William Humphrey Art Gallery Financial Statements 2011/12: Gallery briefing
Ms Anne Pretorius, Director, William Humphrey Art Gallery, presented the Gallery’s vision, mission statement. She stated that Judge C Williams had had to resign from the Council of the William Humphreys Gallery due to work load, but the Council remained functioning and she had been replaced by Mr D Robbins.

She presented on the race and gender representivity on the Council and said that appointing the council was the prerogative of the Minister. The presentation showcased the race and gender representivity of the establishment as a whole. The organogram showed there was no middle management and there were contract and permanent employees. The Gallery was waiting for the debate in Parliament before making any change to its organogram.

Human resource capacity at the institution was severely limited. This constraints hampered continued development. The total administration of the institution was managed by the Director and the Chief Financial Officer. It was becoming increasingly difficult to comply with all the prescriptions of the Public Finance Management Act (PFMA). One of the implications of such a small establishment was that an evaluation system for staff was impossible to administer.

Ms Pretorius indicated the budget allocation for the next three years. This was, for 2013/14, the amount of R5.613 million, for 2014/15 the amount of R5.96 million and for the following year R6.234 million. In spite of the limitations, the Gallery had continued to produce excellent results against the stated objectives in the Strategic Plan.

The internal audit had been performed up to 31 December 2011. The books and records had been found to be written up to date and all key reconciliations were well and timeously prepared. However, the Auditor-General recurrently raised as a weakness that there were inherent weaknesses in the systems of internal control, as adequate segregation of duties was not possible, due to the limited number of staff members. Mitigating procedures had been put in place since the weakness was identified in 2003.

All expenses had been within the limitations of the budget.  Council had agreed to maintain the admission fees to the museum at a minimal amount, so that people from all walks of life had access to the exhibitions. The Gallery had managed to generate a small amount of funding by marketing the institution as a stylish conference and seminar venue. This museum was not intended for an elite and bringing in meetings and conferences brought in others from outside the “art world” into the gallery.

During the years 2001 to 2012 there had been unqualified audits, and, where there was an emphasis of matters mentioned, it showed whether the matters had been attended to. The report for the 2011/2012 financial year had been unqualified. The Auditor- General (AG) had expressed concerns regarding material mis-statements in the Annual Financial Statements. Management took corrective action immediately. Whilst this may suggest that the financial management at the institution had regressed, she hastened to state that the mis-statements occurred as a result of the notes to the financial statements, and that these had been presented in exactly the same way as the preceding five years, which were unqualified. The change was that a new auditor attended to the audit and applied a very rigid interpretation. The very technical and detailed notes to the financial statements had increased from 14 pages to 30 pages. The actual figures in the financial statements had not been affected.

There were essentially two issues. Firstly, the Annual Financial Statements were adjusted due to the review of the useful lifespan of property, plant and equipment. Various items of office furniture and equipment previously depreciated to a nil value had been re-valued and an adjustment for this was made in the Annual Financial Statements. Secondly, there was a finding on supply chain management. The Gallery did not obtain three quotes for air travel. However, Ms Pretorius pointed out that this would have been impossible, because there was only one service provider in Northern Cape. The auditor then insisted that all expenses for air travel for three years prior to the current year be reviewed. The agent’s commission for this period of four years amounted to R11 271.75.

The Gallery now obtains quotes from the two travel agents on the Provincial Treasury’s preferred suppliers database. For the years under question, there was only one travel agent on the list. The only difference in price was the commission or administration fee charged by the travel agent. This had led the auditor to stated that the Council and Audit Committee did not perform their oversight duties correctly.

Ms Pretorius noted that the Gallery was run by competent and dedicated people who sincerely had the best interests of the institution at heart. It was the Council’s opinion that the PFMA was far too high powered to apply to such a small institution with a small budget, and it was actually detrimental to it. Over the years, the Gallery had improved its ability to govern according to the PFMA, but the National Treasury draft regulations for the PFMA, which were recently put out for scrutiny and comment, were, in her opinion, far too harsh and would probably result in a number of small institutions facing a qualification as they would not be able to comply with the regulations, due to the cost of implementation. In addition, the costs of the external audit by the AG were high, at 7.05% of the total Gallery allocation, and the new regulations would increase this still further as the new regulations would increase the number of hours required to audit compliance. The Public Audit Act made provision for entities with small allocations to pay 1% of total expenditure as an audit fee. This was enormously difficult to achieve in practise.

In addition to this, the implications of Generally Recognised Accounting Practices 103, which the Gallery would commence implementing in the 2013 financial year, might not have been costed. This accounting standard required that all heritage assets in national collections must be reflected in the financial statements at a rand value. Museums had thousands of items that were donated and that presently therefore were reflected at nil value in the databases. They would now have to be valued, to comply with the accounting standard, and the cost of this process had not been fully estimated. The implications that this standard would have upon heritage assets had not been considered. If an institution was not able to comply with this standard, the AG would issue a qualified report.

Ms Pretorius said that she did not believe it was correct for South Africa’s small heritage institutions should fall within the PFMA. Institutions such as schools, universities, FET colleges etc. with multi-million rand budgets were not required to be audited by the Auditor-General, but contracted independent auditors to perform the audit function and submit the results to the executive authority. She suggested that it would make sense for the  smaller heritage institutions to be allowed to do the same, as it would be more cost-effective and appropriate. She emphasised that this audit issue needed urgent attention at the highest level.

She also noted that in spite of the disappointing audit outcomes, the Gallery had received an award from the Auditor-General for the ‘Best Entity’ in the Northern Cape.

The Gallery was also involved in various community endeavours. Members of the staff had participated in Mandela Day at an orphanage in Galeshewe, and assisted with the Reach for a Dream Foundation at a camp presented for children who were terminally-ill or had life-threatening diseases.

Ms Pretorius set out the expenditure of the budget, noting that the split was 65.5% for staff expenditure, 26% for art purchases and 3.6% for insurance.

The Gallery’s core function was to collect, conserve and celebrate excellent South African works of art for the national estate for posterity. During 2011/12 the Gallery spent R1 278 448 on art acquisitions. This constituted of 26% of the allocation. There were 169 artworks acquired in total, of which 121 were purchased and 48 donated, including 37 artworks by black artists.

The Gallery had been able to acquire rare works by artists such as Dan Rakgoathe, Ronnie Ndzombane, and Cyprian Shilakoe as well as works by contemporary artists such as Lynnley Watson, Rosemary Marriott and Clare Menck, to name but a few. She tabled photographs of some of the pieces held (see attached presentation). She noted that the Gallery had worked hard to try to make its collection representative and exhibited a wide array of artists.

In the year, the Gallery had mounted 21 temporary exhibitions of established and emerging artists, community forums and prison art.  Additionally, the Gallery had mounted 15 exhibitions from the permanent collection.  There were four exhibition wings dedicated to the display of historic Dutch, Flemish, French, Italian and British collections.

Exhibition openings at the Gallery were an excellent opportunity to promote social cohesion. There had, however, been budget cuts, so that there were constraints to what the Gallery could spend on entertainment and refreshments at the exhibitions.

There were four outreach exhibitions of South African graphics from the permanent collection taken to deprived rural communities in the Northern Cape, in Daniëlskuil, Prieska, Richmond and Kakamas. Ms Pretorius pointed out that Northern Cape was a vast province, covering 30% of South Africa's total area, with a very low population density of 2.2%. Deprivation was seen in every facet of everyday life is a glaring reality, but most particularly in cultural opportunities. The Gallery’s associated projects had been aligned with the national imperatives of skills transfer, job creation, poverty alleviation, moral regeneration and the building of a national identity. In this regard, she said that the project presenting craft workshops for female offenders at the Kimberley Prison was in its seventh year, with many offenders reaping the benefits of the project. One of the most encouraging spin-offs of the project was the rebuilding of self-esteem and human dignity of the offenders. This reinforced the notion that this project did contribute to moral regeneration and therefore successful rehabilitation of the offenders into society, once they had served their sentences.

The Sguzu Whag Press, a project that was developed to add substance to the concept of mentorship of emerging local artists, had gone from strength to strength. Dumisani Mabaso, Rorke’s Drift graduate of 1978, had continued to pass on various techniques of printmaking and other skills to local aspirant artists.

Keadumela, the Early Childhood Development programme of the Gallery, aimed to equip pre-school children from the desperately poor settlements in and around Kimberley, who were at a huge disadvantage when they began their formal school careers, with skills, through art and craft related activities. This project had been running very successfully for 21 years.

The Gallery’s nickname in the community was “WHAG” and the WHAG Films had been introduced into the Gallery as an incredibly powerful visual arts medium. The Gallery had screened 11 feature films, which included top rated local products, as well as the best of other international genres and art films. It had screened nine music DVDs and 13 literature set works for school groups.

The Gallery’s reference library was widely used by local school learners doing art as a subject, and the history of art classes were presented by the Kimberley Art Centre teacher in the Gallery exhibition wings.

The Gallery not only had partners, but was itself a partner to the community and participated in fund-raising events. The Gallery worked hard to constantly transform to remain meaningful in a changing society. Transformation underpinned every facet of operations, but although great strides had been made, there was no immediate fix, but the Gallery would continue to build its vision of becoming a centre of excellence.

Discussion
Mr N van den Berg (DA) said that this was the first time in his political career where he could say an entity was trying its best with the money and tools available to it. He lauded the staff passion and work and said they were setting a prime example for other galleries, and were urged to continue with the good work.

All Members agreed that the work of the Gallery had been very good. However, they did have other questions.

Human resources issues
Mr S Ntapane (UDM) asked how many staff members the gallery sought to add to its ranks and wondered if it had approached National Treasury.

Ms Pretorius replied that it was quite clear from the organogram that there was no middle management. There was an executive authority, the accounting authority, and then herself, and below that were the conservation, administrative, services and security functions. The kind of staff members needed in the average museum at middle management would normally be a deputy director and a collections manager or curator. At the Gallery, she had been expected to be the curator as well. Whilst another three posts would be ideal, they could not be created since this would result in budgeting for a deficit, which National Treasury would not permit. There were budget constraints and the reality was that these positions could not be created.

Ms Morutoa asked what was being done about the Human Resources problems that had been outlined.

Ms F Mushwana (ANC) asked if it was not possible to have someone take the administrative work ff Ms Pretorius.

Ms Pretorius assured the Committee that the staff at the Gallery were dedicated, loyal and enthusiastic, and did things outside what they were employed to do. However there was a fine line between dedication and exploitation. There was a need to deal with the constraints and see how outputs would be maintained.

Ms Morutoa asked if staff members were encouraged to publish research or popular articles.

Ms Morutoa asked if the gallery had offered internships.

Ms Pretorius said that there had been volunteers, but internships was a more formal matter. The Gallery would have liked to find sponsorship for an intern, and she believed the Department of Arts and Culture (DAC) had a process. However, it must be realised that having volunteers and interns meant that someone from the already-stretched staff would have to spend a lot of time teaching and imparting skills.

Ms Morutoa asked if the Chief Financial Officer, Lukas Stockenstrum, was related to Ms Rika Stockenstrum who was a Project Leader?

Ms Pretorius replied that Mr Stockenstrum and she had taken over administration of the Gallery in 2001. In 2003, one of the applicants for the Project Leader post was Rita Stockenstrum, who was Lucas Stockenstrum’s daughter. The applications had been shortlisted by the Council and the finance committee. Ms Stockenstrum had been the prime candidate. Mr Stockenstrum had not been involved in the appointment in any way.  The relationship had been disclosed at Council, during the application short listing and interviews, and had been disclosed in the annual report, and the Auditor was satisfied that the matter was properly handled. The two did not work together on any projects at the Gallery.

Ms F Mushwana (ANC) questioned representivity, as there seemed to be a racial imbalance.

Mr P Ntshiqela (COPE) asked if any concerns had been raised with the Minister or Board on race representation on the Council. The concerns had been noted in the Annual Report.

Ms Pretorius replied that years ago, when she had taken over the position of technical assistant at the Gallery, there had been three general assistants in the Gallery, who were all black men. They had worked with the gallery for a long time and had gained skills, but were essentially still confined to menial tasks. They had then been given the opportunity to further their education and partake in key functions in the Gallery, giving them more of a career path. However, it was difficult for staff to move up in the ranks since there was such a small staff and little staff turnover.

Accounting issues
Mr Van Den Berg said he echoed the concerns about the PFMA stated by Ms Pretorius and said that ideally the Minister should have heard these concerns.

Mr L Khoarai (ANC) urged the entity to comply with the PFMA despite the constraints.

Mr D Mavunda (ANC) said that there were still rules and regulations that had to be followed, despite the constraints.

Mr Ntapane asked if the gallery had approached National Treasury to voice its concerns, and agreed that the Minister also needed to be engaged on this issue

Ms Morutoa asked what measures had been taken to ensure compliance to legislation.

Ms Pretorius replied that the Gallery tried its best to comply with the PFMA. Until a threshold for smaller institutions was constructed, then there was nothing it could do but try to comply. However this was becoming increasingly difficult. The new draft relations made no distinction between a department and the entities and all of the smaller institutions, including the Gallery, would have problems. She agreed that there was a need to debate this at a higher level.

Mr Khoarai asked for the original Auditor General’s report in order to augment the information given in the presentation.

Ms Pretorius replied that the Auditor General’s report was in the Annual Report.

Ms H Van Schalkwyk (DA) said that the Committee also needed to have a conversation with the office of the Auditor General about the issues that had been raised, to stress the plight of all small entities.

Mr Mavunda asked for more information on the comment that the new auditor had been less flexible than those in the past.

Department’s budget allocation
Mr Khoarai wondered how the allocations from DAC differed from those in the last two years, saying that the Committee needed to track the budget being given to the Gallery.

Mr Mike Rennie, Director: Governance, Department of Arts and Culture, replied that allocations were a difficult issue as South Africa, and hence the DAC also, was facing an uncertain economic context. The DAC had tried hard not to apply the cuts on its own budget to the institutions. This Gallery had not received any cuts from the previous year, although he fully conceded that the allocations were not sufficient. The Department itself had attempted to absorb the cuts, and try not to make them impact on the institutions. The Department understood the situation of the Gallery.

Ms Morutoa said that this was a very vague response. This was a poor Province that needed extra help and the response did not assist the Committee with its oversight. Furthermore, she pointed out that the DAC itself had failed to spend, and yet was withholding funding from other institutions that might well do better with more. She did not accept the explanation.

Ms Van Schalkwyk added that the Gallery was the only National Museum in the Northern Cape, so that effectively the whole Northern Cape province received R6 million of the total arts and culture budget.

Ms Nwamita-Shilubana asked why the challenges of the entities were not better addressed by the national DAC. She agreed that this was the only gallery in the Northern Cape and needed to be taken seriously.

The Acting Chairperson agreed that it was disappointing that this Gallery was only given R6 million whilst other entities wasted great amounts of money. The Northern Cape was a very poor province and was experiencing many social ills.

Inmate Art
Mr Ntapane asked if follow ups were done on inmates to see if they utilised the skills learned in the programmes once they had been released. He commented that this could be an excellent marketing tool.

Ms Pretorius replied that working with prisoners was a sensitive issue and it was very difficult to track them if they were moved to another correctional facility or were released. Some had returned to the Gallery seeking mentorship but it was generally impossible to do follow-ups. She added that there was also a move to introduce a programme into the male correctional facility.

Relationships with Education Departments
Ms T Nwamita-Shilubana (ANC) asked if some of the art work that had been shown in pictures had been donated.

Ms Nwamita-Shilubana said that it would be interesting to see if, when the children left primary school and went to high school, their foundations in art at ECD level would encourage them to continue.

Ms L Moss (ANC) asked if there was a relationship between the gallery and the Department of Basic Education, commenting on the importance of ECD programmes.

Ms Pretorius replied that although the Gallery had run a programme for 21 years, there was no formal partnership with the Department of Education. There had been attempts to get funding to run the project, but it had become ‘bogged down’ with an array of bureaucratic requirements. The Gallery had followed up on a number of children who had gone into good schools and had been able to compete within these educational environments. The project sought to address the gap between children from the poorer townships and children from affluent homes.  The Gallery knew that the project worked but it was difficult to give exact performance indicators.  There had been communication with the Department of Basic Education (DBE) on other projects, but it had been less formal.  The Gallery had been working at ground level with staff from DBE, but these were collaborations more than partnerships.

Ms Moss asked if there was a skills plan and if there was a relationship also with the Department of Higher Education?  

Relationship with other galleries
Ms Moss asked what the relationship was between the Gallery and other arts galleries within South Africa that fell under the care of the DAC, and if there were possibilities for collaboration.

Ms Pretorius replied that the Gallery collection had been so well received it had even been lent out nationally. The involvement at the national level was thus well established. The Gallery was significant on the national level, as it had works of art that would be significant in the metropolitan area. There were three national galleries, but other museums were all provincial.

Ms Moss asked if other countries whose artists’ collections were showcased made a contribution to the Gallery in return for their marketing. She would be concerned if South Africa did a great deal for other countries and got nothing in return.

Relations with Local Government
The Chairperson asked about the Gallery’s relations with the Northern Cape Provincial Department  and the municipalities, pointing out that the latter often seemed to have money for arts and culture, but not to spend it.

Artworks, outreach and transformation
The Chairperson showed concern that a low percentage of the funds used to acquire art work was used to acquire art by black artists.

Ms Pretorius replied that there were many works by black artists available in some years, but not in others. The Council was attempting to fill the gap but new artists were getting harder to find. The Gallery thus tried to concentrate on acquiring more from the artists it already was showing. It had managed some coups in procuring some very exciting works by significant black artists. However, the ability to purchase was dependent on what was produced and for sale.

Ms Morutoa asked who had attended the art film screenings. She also questioned if many local people from Kimberley were attending the gallery, noting that the photographs of gallery openings did not show many black people.

Mr Ntshiqela asked if the gallery reached out to informal settlements.

Ms Morutoa asked if outreach managed to reach the Khoi and the San.
                                                                                                                                 
Ms Pretorius replied that there was a great deal of contact with the Khoisan people. There had been both group and individual teaching of printing and painting skills. Contact was made also through the South African Institute of Southern Africa. There had been contact with the San people who lived by the border in the Kalahari, and work done with women and children in the community there.

Ms F Mushwana (ANC) said that the gallery seemed to operate exclusively in the Northern Cape but seemed to want to get to the rest of South Africa. It would be nice to see it achieve this.

Raising funds
The Chairperson asked if the gallery had tried to raise funds by forging relations with mining companies and other entities around the Kimberley area.

Ms Pretorius replied that page 53 of the Annual Report showed the amount that came in terms of donations. South African mining companies had very little presence within Kimberly. Funding came from gallery activities rather than lobbying corporate entities. The Gallery would continue to try to get National Lotteries money, and money from other sources, as it was hard to get significant amounts from Kimberley itself. For this reason, it was preferable to try to boost Gallery activities as a revenue-raiser. The Gallery would also try to work more partnerships.

Ms Moss questioned this response, saying that Kimberley had been earmarked as a mining province. She insisted that the Gallery should approach the big mines, as there was much activity within the province. The mining companies within the Northern Cape needed to contribute to the province. 

Mr P Ntshiqela (COPE) said that the presentation had said that small amounts had been raised, and asked that they be shown.

Miscellaneous questions
Mr Ntshiqela asked what the financial implications of running this press were?

Ms Morutoa noted that the demographics of the council and the staff did not seem to mention disabled people.

The Chairperson asked if there was a contract of service for students who had been taken to tertiary level.

Mr D Mavunda (ANC) asked how much the “minimal amount” of the entry fee actually was.

Absence of the Department
The Chairperson said she had noticed a trend that when the smaller entities came to the Committee the Director General and more senior staff did not attend. She hoped that the representatives here today would convey these concerns back to DAC. She also wondered why the DAC tended to offer more support to the bigger festivals and institutions, who could actually probably support themselves, whilst the smaller entities were left by themselves. She also did not understand why institutions that did not do well were given more money, yet those that worked hard did not.

Ms Morutoa also noted that nobody from the DAC was present to speak to many of the issues raised by the Gallery. She would have liked to have heard a full response from the Department.

Ms Moss said it was a problem that the Deputy Director Generals who were in charge of the project, programme or entity, and who should be able to give full responses, were often not present at meetings. There was a need to engage with the Director General about this.

Members requested that the questions that were not answered were given in writing.

Other business: Pan South African Language Board (PanSALB) appointments  
The Chairperson asked Members, who had now received the files on PanSALB, to scrutinise the applications. She noted that one of the issues was that of gender, and said she believed it was time that PanSALB was chaired by a woman. She had only seen one person with disability cited in the applications. She noted that until now, PanSALB had been largely dominated by academics and urged that the applications be considered with a ‘broad mind’.  She said that there were some members of the Board, whom the Committee had recommended be removed, who had re-applied, including the previous Chairperson.

She also noted that although PanSALB had been asked to appear before the committee, the caretaker for PanSALB was on record as saying that the Committee had not in fact asked for this, and PanSALB had noted that it could not attend. She recommended that a letter be written by the Committee to the House Chair requesting finalisation of the process in the House in the following week.

The meeting was adjourned.