Meeting report

Adoption of Outstanding Minutes

The Chairperson welcomed Members of the Committee and presented the minutes of previous meetings for perusal and adoption. The minutes of the meetings held on 26 August 2014 and 2 September 2014 were adopted with amendments while the minutes of the meetings held on 9 September 2014, 16 September 2014 and 23 September 2014 were adopted without amendments.

Budgetary Review and Recommendation Report (BRRR)

Mr Mxolisi Dlamuka, Content Advisor Parliament, presented the synopsis for the Budgetary Review and Recommendation Report (BRRR) which was a report on the expenditure and the performance of the Department after 6 months of the financial year. The Department transfers almost 80% of its budget to entities and has an obligation to follow up on how these entities spend. Doing a budget review of the Department only was tantamount to a budget review of only 20% of its allocation as the rest will be transfer payments to provinces or entities. The Department has 28 entities and Non Governmental Organisations under its auspices, which makes it challenging to have a detailed comprehensive report on all its entities.  In the previous year, the Committee reviewed only entities which received the biggest chunk of the budget in a bid to cover up to 50% of the total appropriation. To this effect, a template was sent to the Department requesting for information about the expenditure on personnel, goods and services, library conditional grant and transfer payment. In addition, entities are reviewed based on their particular subsidies and the role they play in their particular sectors.( A consideration of the vacancy profile for each and every institution revealed  that there are vacancies that have not been filled for over two years. It was imperative to consider to what extent these vacancies have an impact on delivery of services. Institutions were thus requested to list the vacancies, positions profile, duration for which the vacancy has not been filled, the impact on service delivery and when they planned to fill the vacancy.

With regard to the process, the Department will present the annual report and based on the report the Committee shall have discussions. The Committee support staff shall draft a report based on observations of the Members. A meeting was slated for Tuesday 21 October 2014 where a draft report is to be presented and adopted by the Committee. According to the Act, the BRRR has to be published in the ATC three days before the medium term budget segment of the Minister of Finance, but it was impossible to meet the deadline.

Discussion

The Chairperson asked when the report should be adopted.

Mr Dlamuka stated that it is to be adopted on 28 October 2014 and published in the ATC the following day.

Mr J Mahlangu (ANC) inquired about the outcome of the report- whether it was to be debated or it  just included in the ATC. How was the programme going to unfold - would Members meet the entities, and if not what does it say?

Mr Dlamuka responded that the report is not debated in the House; it gets published in the ATC and is sent to the Minister of Finance and the Minister responsible for the vote which in this case is the Minister for Arts and Culture. In terms of the entities, the issue is the number of entities and time frames, what Parliament has tried to do with these templates is to create fields that will allow the Committee get information that would be used if the entities were invited. This tool allows the Committee get more information and better indication to make a conclusion on their expectations.

The Chairperson informed Members that she had written to the Department asking for a report about the entities who in turn expected the entities to make a report to the Committee. The Department disbursed funds to the entities  hence it should report to the Committee. The Department was very reluctant on this issue but had finally agreed give a report on the same. This issue must be addressed because the largest chunk of the budget goes to the entities.

Mr Dlamuka stated that when the white paper of 1996 was developed there was something referred to as the ‘arms length approach’ which was included in the Cultural Institutions Act of 1998. This created a situation where the Department disbursed funds to the entities and the entities remained independent but reported to Parliament. In the current review of the white paper, the entities have been included as part of the Department itself. Under the Act, entities have to report to Parliament but this does not exonerate the Department from reporting about entities because according to the Public Finance Management Act it needs to ensure that when it transfers money, all legislative and financial frameworks are met.

2013/14 Annual Report of the Department of Arts and Culture

Ms Fiona Clayton, Researcher Parliament, presented the overview of the 2013/14 Annual Report for the Department of Arts and Culture.

The Annual Report provides for the achievements of the Department against performance targets in the APP in line with the Department’s strategic goals, the financial and non-financial performance information, report of the Auditor –General of South Africa and the Human resources management information

The Department was organized into six programmes  for  2013/14 financial year- administration, ; performing arts, national language service, cultural development, heritage promotion and, national archives and library services.

Achievements recorded by the department include meeting 71% of the planned targets, hosting a number of cultural events and festivals, placement of over 200 artists in schools across eight provinces, handing over a film studio to the community of Diepsloot, building 16 new libraries and upgrading 55 existing libraries to the tune of over R1 billion, awarding 336 bursaries to students in language studies and 73 to students pursuing careers in heritage profession. Under the financial performance programme, the Department’s budget grew from R 2.7 million in 2012/13 to R 2.9 million in 2013/14. However, there has been an increase in under expenditure of 4.5 per cent which was attributed to money not spent on the conditional grant, MGE projects, capital works and flags in school project. Five out of the six programmes spent above 95% of the final appropriation, but only 71 percent of the targets were achieved overall. The Auditor General selected 2 programmes to conduct its investigation programme 2 and programme 5. For programme 5 (Heritage Promotion), the Auditor General could not find sufficient evidence to support performance information that was reported on 20% of the targets, the programme only spent 88.3 % of the budget.  An overview of non financial programme performance was given as follows:

Programme 1 Administration

• Only 94.1 percent of the employees entered into performance agreements for the financial year 2013/14.
• The annual report for the Msunduzi / Ncome Museum was not tabled; the Department has a vacancy rate of 8.3 per cent, positions such as the CFO and DDG Corporate Services were vacant during the 2013/14 financial year, only 77 percent of the capital works budget was spent.

Programme 2 Performing Arts

• 95 per cent of the budget allocation for this programme was spent - R 29.9 million was not spent. 3 out of 12 targets for this programme, i.e.  25 percent, were not achieved including awarding bursaries to 20 youths in arts, culture, heritage in community – based organizations and high schools due to repriotisation within the budget.

Programme 3 National Language Service

• All targets set for this programme were met.

Programmeme 4, Cultural Development

• The Department supported nine more cultural events than it initially planned, yet failed to create the projected 18000 short term loans linked to supporting these events.

Programme 5 Heritage Promotion

• Only 73 out of the planned 106 bursaries were awarded to applicants, as applicants failed to meet qualification criteria. The flag in schools project consistently does not meet annual targets, and contributed R 44 million to under expenditure in 2013/14.

Programme 6 National Archives and Library Service

• The national archives have been functioning in the absence of the leadership of a national archivist during the period under review.
• The Department received a qualified audit opinion for 2013/14 from the Auditor – General.
• Of the two programmes selected by the AG to evaluate reported performance, the usefulness and reliability of performance information for 20 per cent of targets for programme 5 was questioned.
• Financial statements were not supported by adequate records as required by the PFMA. Material misstatements identified by auditors were not corrected resulting in the qualified audit opinion.

The Department contravened public service regulations by not filling vacancies within 12 months. The CFO position has been vacant for long. The Department also contravened a number of rules and regulations pertaining to supply chain management. There was room for improvement regarding leave within management. Over 70 per cent of the staff utilized sick leave in the 2013/14 leave cycle; R 1.6 million was spent on leave pay – outs to employees who terminated their services. None of the senior managers received performance rewards since many of them failed to submit performance agreements by the 31 May 2013 deadline– on this issue, the Department should be questioned why disciplinary action was not taken. The use of consultants should also be scrutinized. The Department spends over R 36 million on consultants which excludes amounts spent on the internal audit. It has become necessary to question whether the Department has a consultancy reduction plan in place as prescribed by the National Treasury Regulation.

In conclusion, there has been;

• Regression in audit opinion from unqualified in 2012/13 to qualified in 2013/14
• Non – compliance with laws and regulations in relation to financial management
• Under expenditure from 1 percent in 2012/13 to 5.5percent in 2013/14
• Under expenditure on capital works budget should be questioned and the impact on service delivery.
• A lack of management of performance information with regards to the AGSA’s findings- how did the Department plan to manage records and performance information?

Performance management could be tightened and the use of consultants ought to be questioned, for instance there was a consultant hired for over R 3 million.

Discussion

The Chairperson stated that the members of the Committee were not given enough time to review the annual report so the Department accounts for the money allocated to it.

Mr Mahlangu agreed that Members needed more time to review the report, noting that

16 libraries had been built, which meant one library costs about R 6 million- how big were the libraries?

Mr G Grootboom (DA) suggested that the libraries were the same make, costing the same price.

Office of the Auditor General South Africa (AGSA) on Audit Outcomes

Mr Zipho Zonke Mduli, Senior Manager AGSA, presented to the Committee, the audit outcomes of the Department of Arts and Culture. The presentation covered audit outcomes over the past 3 years, reporting on 27 auditees, which included the Department. The three year trend was provided in a bid to paint a clearer picture of the happenings in the entities over time.

Concentrating on 2013 /14 financial year, nine entities had clean audit reports from the Auditor General, nine entities had unqualified audits with findings, eight entities had qualified audits with findings on compliance, one entity (PANSALB) had a disclaimer.

He further stated that there was a movement in audit outcomes where some auditees were seen to have improved; while others remained unchanged or regressed and some were outstanding Some entities were qualified but had moved to unqualified positions due to compliance or performance information. The Iziko Museum and Robern Island went from unqualified with findings to unqualified with no findings in other words they improved. The William Humphreys Arts Gallery, South African State theatre, SAHRA previously had qualified opinions but moved to unqualified with findings on compliance or performance information. There were also regressions such as the National Museum which was previously qualified but now unqualified with findings. Some entities had no movement, and some entities maintained the status of unchanged with no findings. There was a lot of stability in terms of leadership; financial controls were in place as well as good governance structure which led these entities being consistent performers in the category. Most entities in the unqualified with findings category have not changed, it is a critical position as they can easily improve or regress, with better concentration on their day to day duties, these entities can easily move to the improved category where they will be unqualified with no findings otherwise they will fall in the regression category.

On the quality of submitted financial statements; the Department this year was qualified in terms of financial statements and had findings on compliance. There were 15 entities that had to submit financial statements that needed material adjustment. Nine entities which were unable to adjust correctly before 31 July remained qualified (this could have been worse if no such adjustment was done). From the previous year, the overall regression has increased. There has been an improvement in the quality of annual performance reports from the previous year where there were lesser entities that had findings on performance information. In 2012/13 they were 19 while in 2013/14 there are 15 entities with findings on performance information. There has also been an improvement in the usefulness of information as there are lesser entities that had findings on usefulness of information where there is a problem with reliability of information.

On compliance with legislation, it was noted that there is a slight improvement from the previous years where it was eight entities and now nine entities with no findings. Compliance is still a challenge and there is a need for improvement. The most common areas of non – compliance are; prevention and follow – up of irregular spending (15 entities), fruitless and wasteful expenditure, quality of financial statements (15 entities), supply chain management (11 entities), asset management (9 entities) and effectiveness of internal audit (5 entities). A three year trend was given to show the increasing figure of the irregular expenditure incurred within the portfolio from R106 million in 2011/12 to R164.2 million in 2012/13 to R 225.6 million in 2013/14. If no measures are put in place within the institution, this figure will remain on an increasing trend. Some reasons attributed to this trend were-;the required numbers of quotations were not obtained for procurement under R 500,000,awards were made to suppliers that did not submit valid tax clearance certificate, interests were not declared; application of the preferential procurement points system in awarding contracts and quotations not always applied. Fruitless and wasteful expenditure increased in the 2011-2014 financial years. The nature of the occurrences leading to these expenditures includes- Penalties and interest incurred on legislative / contractual payments, Traffic fines, Litigations and claims, VAT paid to non registered vendors, Payment for services never rendered.

Identified areas where drivers of internal control should improve are; leadership, effective leadership culture, oversight responsibility, HR management, policies and procedures, action plans, IT governance Under financial and performance, the key areas are ; governance , proper record keeping , processing and reconciling controls, reporting, compliance, IT systems control, risk management, internal audit, audit committee. The root causes of regression that should be addressed include lack of consequences for poor performance and transgressions, instability or vacancies in key positions and lack of appropriate competencies for key official. There is a need for improvement at all levels, the entities that provide some assurance or limited assurance ought to work towards giving quality assurance.

Key recommendations for improvement were enumerated as follows;

• Strengthening controls to create a control environment that supports reliable financial and performance reporting and compliance with legislation:
• Leadership – implementing adequate systems /processes to support accurate and reliable financial and performance information,
• Financial and performance management to enhance the “checks and balances” during the year to ensure that all reconciliations are done on a daily/monthly basis.
• Leadership- implementing adequate systems/processes to focus on overall compliance with procurement processes.

Discussion

The Chairperson noted that the role of the Committee and the Auditor General was to ensure the Department remained accountable and to assist it in doing the right thing. The performance of the Department was unacceptable, moreso the under expenditures it had recorded. What caused the misstatements and how does irregular expenditure arise?

Mr Mahlangu noting that the Portfolio Committee was said to provide some assurance asked what it takes for one to be regarded as providing assurance.

Dr P Mulder (FF+) noted that 20 years into democracy, South Africa was still expecting a learning curve. The impression is that there has been a regression between last year and this year- where is the problem? Is it new personnel, lack of experience? Is the problem due to lack of sanctions? One of the problems identified is paying for services not rendered; this was akin to corruption and is punishable. What can the Committee do in terms of enforcement?  On entities that complained about the cost for auditing from the Auditor General, there must be a co relation between the budget amount and auditing cost- how can this problem be solved?

Ms V Mogotsi (ANC) called upon Members of the Committee to work together and take the work of the Committee forward and work for their voters not the Department.

Mr T Makondo (ANC) referring to slide 19 and 20 sought for clarification about amounts identified by auditees and those identified during the audit.

Ms Corne Myburgh, t Business Executive AGSA responded that it was a leadership issue. The reason is due to lack of consequences, if nothing happens no one will be held accountable.

Mr Dlamuka asked who the members not proving assurances were.

Mr Mdluli responded to the question on the entities not giving assurance that a list will be sent to the Committee.

Briefing by Department of Arts and Culture on its Annual Report and its Entities

The Chairperson welcomed representatives of the Department of Arts and Culture and expressed the dissatisfaction of the Committee with the Department’s stance on not reporting on its entities. 80% of the Department’s budget goes to its entities, yet it does not report on the said entities - why then did the Department give the entities money in the first place. The entities remained under the auspices of the Department and it needs to ensure that they operate and they deliver on their mandate. Further, the Committee was dissatisfied with the happenings in the Department such as irregular expenditure, failure to sign performance contracts, audit committee not functioning well and misstatements to the Auditor General.

Mr Jack Vuyo, Acting Director General, Department of Arts and Culture (DAC) extended apologies from the Minister and Deputy Minister on their absence and  went ahead to commence the presentation on the annual report highlighting the presentation outline, strategic overview, vision and strategic goals. In terms of the performance overview, the Department achieved 71% of its set target in the 2013/14 financial year, while and 21% had not been achieved. Compared to the 2012/13 financial year, there has been an improvement where figures stood at 55% achieved and 45% not achieved. However, there is still room for improvement.

On the performance review of selected programmes in the Department,  National Building and Social Cohesion had a Social Cohesion Summit in 2012 which adopted a 12 – point declaration, including the hosting of provincial social cohesion summits. To this end, the DAC collaborated with North – West province to host its provincial summit under the theme “Working Together towards a Caring and Proud Society”. Recently, Gauteng held its own provincial Social Cohesion Summit. The year 2013/14 also saw the appointment of social cohesion advocates and finalization of the community conversations programme. Through the legacy projects, the Department seeks to transform the heritage landscape. 40 legacy projects have been conceptualized in the past five years, of which 11 have been completed and 29 are still in the pipeline.

Under Geographical Names, the programme entails the naming of geographical features in South Africa and is part of the process of transforming South Africa’s heritage landscape. A total of 265 geographical names have been approved in the past 5 years and more than 50% of them are in KZN. Of the 54 names approved in 2013/14 financial year, 37 are in KZN followed by Mpumalanga and Gauteng.

Through the flags in school programme the Department seeks to create awareness of and popularize the South African flag as one of the national symbols. As at 31 March 2014, a total of 5301 flags were installed in schools throughout the country. The programme has received a capital injection of R 38 million in the 2014/15 financial year and the Department projects a total of 15000 flags to be installed by 31 March 2015.

Cultural events held were 72 in total, supported in the past five years through the country. The geographical spread of the events covered Gauteng, Eastern Cape, Limpopo and Western Cape. The idea however is to have cultural events across each province at the minimum. For example in January 2014, the Pulo Ya Meropa Drumming Festival was held in Limpopo, supported by the Department. . It offered vibrant dancing, music, food and colorful traditional items. In the 2013/14 financial year, Imvelo Ya Ma Mpondo group from Lusikisiski was invited to partake in the festivities. Beyond South Africa, South Africans have participated in the Festival for Pan African Music (FESPAM) which was held in July 2013 in the Republic of Congo.

The Department initiated 14 public art programmes supported over the past five years through the country. The total budget of R 5 million has been spent over five years. This ranged across all provinces except in Limpopo but the idea is to spread across the country.

As part of the MGE programme, 26 touring ventures were supported over the past two years through the country. A total budget of R 7 million has been spent over two years. Most of these touring ventures were from KZN, Free State, Gauteng and Western Cape.

The Department received a conditional library grant for the building and resourcing of community libraries across the country. On average, the library grant increases annually by 7%. A total of about R 2.7 billion has been spent towards new libraries, library up grades, library material, etc in the past 5 years. The geographical spread of newly built libraries cut across Gauteng, Limpopo and Mpumalanga but not in Free State although the idea is to have libraries built across the nine provinces. The Department has upgraded 244 libraries in the past 5 years throughout the county mostly in Northern Cape and Eastern Cape. A total of R 251 253 000 was spent to upgrade libraries at the average unit cost of approximately R 3 million each. The National Book week is celebrated annually to promote the culture of reading and writing. The 2013/14 event was celebrated at the Nelson Mandela Bay Municipality in the Eastern Cape. The highlight of the event was the ‘Reading for Redemption initiative for offenders as part of their rehabilitation process.

The National archives week is designed to raise awareness about the importance of record management. The theme of the 2013/14 event was ‘The Records/Archives in Deepening Democracy’, where students, academics, historians, and the public visited the National Archives and learned how historical records and information are recorded.

The linguistic diversity, translation and editing programme ensures official documents are translated into and edited in all official languages and foreign languages. Moreover, official documents in foreign languages are translated into and edited in all official and foreign languages. 6639 documents have been translated and edited over the past 5 financial years. Reviewing the trend, there has been a decrease in terms of the translations that have been taking place over the years. There is a need to ensure there is an active promotion of translation of documents in different languages. This is a concern that the department has to work on.

On terminology development, close to 89 000 terminologies have been developed over the past five years. Terminologies have been developed in arts and culture, life orientation, elections, mathematics, soccer and HIV/Aids domains. There is a need for terminology development for the business sector.

The Department supports human capital development in a variety of ways; through bursaries, training programmes and programmes in the educational environment. Over the past five years the Department has had 404 artists placed in schools through the country. R 4 800 000 has been spent over five years. The geographical distribution of the artists cut across KZN, Free State, Limpopo, Northern Cape and Mpumalanga. The number of artists has increased since 2010. Over the past five years, the Department has issued 1203 language bursaries and the provinces that have been major beneficiaries are Gauteng followed by the Eastern Cape. Grants are channeled to universities to redistribute. The geographical spread of universities receiving grant is seen across Gauteng, Eastern Cape, Free State, KZN, and Limpopo. This is done ensuring that they spread across the nine provinces.  A review of the universities benefiting from 2013/14language bursary fund reveals that the biggest beneficiary is the University of South Africa. A total of 244 bursaries have been awarded over the past three years. Gauteng has been the major beneficiary followed by Limpopo.

From the report by the Auditor General, the Department received a qualified report for the 2013/14 financial year and for the preceding past four years it received an unqualified report. The key reason attributed to the 2013/14 qualification is that there have been misstatements identified in the financial statements, although corrected, they have been identified and it is a reportable matter. There is a finding of non – compliance with various regulations as well as in adequate systems to prevent irregular expenditure. The procurement and contract management systems were inadequate and there have been findings of predetermined objectives and an identified need to follow smart principle in terms of being specific, measurable, relevant etc. In 2011/12, the Department incurred unauthorized expenditure to the tune of R 41,769 and in the 2013/14 financial year no unauthorized expenditure was recorded, which relates to shifting of earmarked funds from the 2010 FIFA World Cup budget. The Department has seen increased levels of irregular expenditure which mostly relates to- supply chain reasons in terms of not following the regulations such as tax clearance certificates obtained from service providers; No evidence that preference point system was applied in procurement; lack of consequence management within the Department bringing accountability to the people and taking appropriate action . The instances of irregular expenditure have increased per year hence a qualification where the Auditor General has not been able to say that it is completely irregular. As regards fruitless and wasteful expenditure, in 2011/12 the Department started with 7.43 million and has since increased to about 27.7 million due to breach of contract with a service provider and failure to defend a court case resulting in payment of interest on overview account. There has been a trend of not being able to defend a court case which could have led to recoverability of the amount; this is a weakness that has to be rectified.

Analyzing the budget vis a vis expenditure, 2.9 billion was allocated, 2.7 billion was spent leaving a variance of R 159 million. The balance not spent is surrendered to the National Reserve Fund. Reviewing economic classification, goods and service have a variance of about 68% vis a vis capital works of R 95 million. On compensation of employees, there has been a variance of 135 million relating to administration and cultural development that should be attributed to a vacancy raise. On the expenditure variance per economic classification in goods and services, most of it relates to the under expenditure of R 44 million for installation of flags, R 26 million for Mzansi Golden Economy Project,; R 527 000 for community libraries; R 62 million for correction of office accommodation for the institutions, which was re –classified from goods and services to transfer payments and R 4 million for other goods and services.  Regarding conditional grants on community libraries; the one flag ships arts programme, there was a variance of 6milliondue to the reclassification of provincial flagships from goods and services to transfer payments. The budget was fully spent in the Western Cape Province.  Reviewing Departmental agencies and accounts budget where the Department paid subsidies over to the various Performing Arts Institution , Pan SALB , libraries and Heritage Institutions indicate a variance of about R 58 million. A review of Pan SA Language Board’s budget, reveals no variance but existing underlying problems As regards Heritage institutions, the main issue is monitoring contract transfer in terms of the maintenance with infrastructure to ensure it is implemented per plan. On capital works of libraries there is a backlog. The expenditure on economic classification, higher education and other nonprofit entities has negligible variances but there has been a reclassification of the Nelson Mandela Statue as a capital asset and not a transfer payment. This is mainly caused by supply chain management issues.

There is a need to ensure that there is a consequence management system in implementing supply chain management policies which means there must be a zero tolerance policy. In terms of contract management, currently the Department is working on systems to monitor contracts value for money when contracts come to an end before they can be renewed or when they are ongoing if not they should not be renewed. Another source of problem relates to consultants where about R 153 million  of the compensation budget is spent in hiring consultants - this is very high. The Department is beginning to implement as per the treasury cost maintaining measures to decrease reliance on consultants and ensuring it built internal capacity. The Department was also reviewing the organisational structure in a bid to utilize its staff, thereby optimising resources. There is a need to re-evaluate / re-prioritise projects to make sure service delivery is not impaired. The MGE streamlines the process to make the application more accessible and ensure the funding of the MGE is aligned to the Minister’s budget vote.

Discussion

Dr Mulder asked why the Department was involved in international projects. How do they benefit South Africans? The idea of languages was good but how beneficial was it for students to study one language? What about the other 11 South African languages? What sanctions arose from the finding in the AG’s report?

Ms A Mastshobeni (EFF), noted that there is a challenge in teaching deaf learners; what measures did the Department have in place for this? Many deaf children do not attend school because of lack of sign language. This is a violation of children’s rights.  What strategies were in place, not only for those in schools but for all deaf children?  On the issue of incompetent sign languages interpreters, taking an example of the interpreter at the memorial service of the Late Nelson Mandela, how is this profession regulated?

Mr T Makondo (ANC) noted with displeasure that he expected the presentation to cover entities as agreed but there was no mention of the same yet 80% of the Department’s budget allocation goes to these entities. Thistouches on the issue of accountability and refusal to follow set time frames- can the Department provide the Committee with a time frame within which it will report on its entities? The heritage entities have undergone structural defects yet the Department did not transfer funds to maintain this infrastructure, what plans does the department have in place to address this?

Mr Vuyo responded apologizing and noting that the presentation was set up in two parts, the first dealing with Department while the second presentation dealt with the entities. On consequence management, the key to consequence management is zero tolerance, irregular expenditure will not be tolerated and one of the measures is to have a recovery process until the problem is concluded.

Ms Monica Newton, Deputy Director General (Arts and Culture) stated that the Department has introduced sign language in post graduate programmes to get better trained professionals and has made bursaries available to institutions for this purpose. Language terminology development is important. Sign language is not an official language and it is out of the mandate of the South Africa Association of the Deaf. In terms of regulation, the South Africa Languages Practitioner’s Act was enacted to regulate all language practitioners especially with regard to interpretation of languages.

Ms Kasong Maseopo, Deputy Director General (Institutional Governance), responding to the question about international programmes stated that casual seasons take place in different countries; these include France, China and UK. The Department participates in exchange programmes with different countries and supports South African artists who participate on platforms in these countries.

Mr Vusithemba Ndiima, Deputy Director General (Heritage) , responding to the question about structural defects on heritage entities noted that over the years, capital expenditure has solely been the responsibility for the Department of Public Works , but because many projects that got delayed , the Independent Development Trust decided to assist in accelerating the project. This hasn’t been a solution; the Department intends to evaluate the project to see a better way to implement it. It had also become necessary to question if the Department had technical skills to deal with these issues. One of the main issues at the moment is capacity.

The Chairperson questioned the Department on the process employed in selecting students to receive its bursaries- was the award based on the need in a particular area? For example in Eastern Cape, it has been alleged that because there are no Afrikaans teachers, it thus became an area of priority which would need to be addressed. How was the issue of seasons benefiting the people of South Africa? How were the artists referred to in the presentation identified and are all provinces involved? Which artists participated in the French season?

Mr Mahlangu also sought clarification on the issue of seasons-are they limited to Europe and China, do they extend to the African continent?

N Bilankulu (ANC) questioned the placement of artists in schools- were they placed in primary schools, high schools or colleges? Who identified the artists from their province?

Mr Vuyo responded stating that under seasons there has been a consideration to prioritise Africa- the month of May was slated to celebrate the richness of culture across the continent ranging from fashion, literature ,arts and culture,  with focus on Africa and BRIC countries. Preparations were under way to conclude bilateral agreements across the continent that will be given.

Ms Newton informed the Committee that more than 1000 South Africans participated in the France season. The season’s team has a report of participants, the report will be provided to the Committee showing the artists involved. There was complete participation from a number of provinces not all (as desired) and this is a challenge. The Department supports South African’s participation in these seasons. The Department plans to work with the provincial departments of education and put up schools in all provinces.

Mr G Gootmom (DA) inquired whether a new board had been appointed since the old board’s term expired in September 2014. In terms of the freedom park are the payments made to the board a salary or honorarium- this has been seen to increase by about 66%. One of the ideas of Freedom Park is to collect materials and archives as far back as three million years ago, how does this overlap with the mandate of museums and archives? On accrual of leave pay, it is concerning that although employees are forced to take their leave, they are not paid out.

Mr T Makondo (ANC) questioned with concern the 16 libraries built by the Department- how much was allocated in the last financial year and how much was spent? What is the unit cost of each library, does it differ according to province? It is noted that there are consultants in the Department being paid millions of rands- what exactly do they do in the Department? Is there a plan to  faze them out futuristically? They cost government a lot of money. In relation to performance agreements, why have staff members not entered into performance agreements with the Department, how will it help the Department earn its APP if such staff exists?

Ms M Mogotsi (ANC) highlighted the issue on lack of supply chain and performance management system, noting that if the Department had staff with no performance agreements there was a problem. If the management of the Department did not do its work little could be expected at other levels of the Department. If the Department doesn’t have a performance management system in developmental areas how will it measure its own personnel? There are incidences of non compliance on the supply chain, conflict of interest, issues of governance among others. On the issue of consultants, why does the Department have so many consultants, who are they? About the entity boards, the purpose is to be independent, how and when will the appointment be done? Will the mandate be implemented?

Ms Bilankulu requested that the Department in its next report includes the performance of the past financial year. The presentation on Programme 7 did not highlight issues around Human Resource, had all all jobs been filled? The AGSA report showed that the department was qualified partly due to vacant posts and non – compliance. Did geographical names cover all the provinces? Who was responsible for the distribution of flags in schools?

Mr Mahlangu noted that the strategic overview of the treasury issued a guideline to which each department / public entity would adhere. Did the Department review its’ vision, and mission in this regard.. Were the strategic objectives aimed at achieving a particular number of jobs  achieved and did the Department have a reliable audit team? There is a need for a Certified Accountant on the audit team. The department seemed consultancy driven, yet  it had within its staff complement the resources to run the department- why does the department rely on consultants? With regard to contractors who had completed their work had they left the department or did they remain in the system? Who were Sourcing Enterprise- 6 of its consultants cost about R 10 million? Do they work over the weekend? Although the department spent 94.5% of its allocation it only achieved 70% of planned activities- in this context why was the expenditure very high. It was noted that the AG was not able to verify the information on Heritage, and if the AG cannot get an explanation, the entity gets an adverse finding category for failure to convince the AG with the information given. Why did the department support more cultural development events than it actually executed and why had it failed to create jobs? Why has the CFO position remained vacant for long?

The Chairperson noted that it had come to the attention of Members that there were persons who lived outside of South Africa yet were working for the Government and asked for information about such individuals. Why were flag poles given out to a consultant at exorbitant rates, as each pole cost R 3000 to install, how did this out sourcing happen?

Ms Matshobeni also queried the issue of a consultant being paid R 3 million.

Mr Vuyo responded to the issue of consultants stating that part of the irregular expenses highlighted in the AGs report related to consultants, not following appropriate processes to appoint them, lack of basis for certain renewal etc. To this end, the Minister is putting in place a forensic investigation to review the irregular expenditure. The evaluation of the deliverables will also be reviewed. If there is no value for money, the investigation will help answer these questions. Sourcing Enterprises changed to Mzanzi Golden Market where goods and services that are consumed by both government and private platform were sourced. If one is an artist and government has a launch, he/she can use the Mzanzi Golden Market. If an entity has an Mzanzi golden card then as a member they get discounts and other privileges which also provides sustainable development.

Ms Newton responded to the issue of reducing reliance on consultants and stated that the Department outsourced where there were no internal skills to do the work. Some consultants are appointed to work on particular projects of the Department and leave upon completion.

Mr Conrad Greve, Chief Director Cooperate Services, responding to the performance agreement issue, referred Members to page 81 of the Annual report. There is a regulatory requirement that all senior manager are to enter into performance agreements by 31^st of May yearly, failure to do this is regarded as non – compliance. Majority of senior managers enter into performance agreement contracts although after the deadline- this was still work in progress. There was an intention to take disciplinary action against these managers for non – compliance as one of the targets of the APP is 100% compliance.

The Chairperson asked on what basis the department paid individuals who have no performance contracts, is there a measure which allows this n the performance management system?

Mr Greve responded that it was a legal labour matter. There is a punitive measure for employees who do not enter into performance agreements by the set deadline- they do not qualify for performance bonuses. The Department will apply strict measures under Human resource to ensure strict compliance. As regards the issue of management system , they were 2 levels; 1-12 which is the system currently in place and works well and the Senior Management System regulated by the senior management hand book - the Department has managed to increase the level of compliance , the systems were in place and they are working very well. On the vacant CFO position, there have been challenges, towards the end of last year there was an approval of a CFO and as soon as she was about to resume the position she declined the same. The Department has advertised the posts of CFO and DDG Corporate Services, there has however been a need to extend the time as most candidates applied through post and the applications did not reach the Department because of the post office strike.

Mr M Rabotapi asked what plans were in place if the strike did not end soon, will it be differed?

Mr Greve explained that the Department had asked applicants to apply by post or hand delivery but it had not received any application. This had prompted the Department to  put a notice requesting applicants who submitted via post office to scan and email their applications. So far it had received quite a number. There are a number of positions still vacant which are in the process of short listing and approval. Considering the current rate of 13 % with the new appointments, the vacancy rate is expected to decrease.

Mr Mahlangu asked whether the consultants employed by the Department were South Africans.

The Chairperson asked if the consultants were in the organisational structure of the Department and what happened if officials did not provide Members with information needed for oversight purposes. The mandate of the Committee was oversight but it desired as well to assist the department to do the right thing on behalf of the community.

Ms Mogotsi asked for the organisation structure, and further asked why the Department employed consultants from overseas rather than within the continent?

Mr Greve responded stating that the organisation structure will be made available as requested. As to whether the consultants are in their organization structure, these are not employees, they are consultants and consultants are not part of the organisation structure. On whether they are South Africans or not, during seasons some of these people are foreigners from other countries.

Mr Mahlangu asked who these consultants are. There was no need for a forensic audit - there are DDG’s running the entity, and yet they take no action despite the happening within the organisation. On the invoice for 365 days raised by a consultant which the Department paid, it was inconceivable that a consultant issues an invoice for all days of the year and the Department paid.

Mr Makondo asked how many consultants the Department currently had in its employ. Who are they? On the consultant in the United States, what function was this consultant performing?

Mr Vuyo stated that the Department will provide the list of consultants as requested by t Members highlighting the profiles, responsibilities and how much they are paid. In response to the issue of the 365 days, reference was actually to the duration of the contract (a year’s contract) of which the number of days actually worked were 306. About the mission and vision being reflective of the goals, going forward, this will be taken into account.   Within the audit committee the current Acting Chairperson is a Certified Accountant. The internal audit unit is not fully capacitated this is why it was out sourced an external firm. The Department was currently trying to ensure it had enough internal capacity while reducing reliance on external sources to cover the entire internal audit work programme.

The Chairperson asked for the meaning of no capacity- does this mean no staff or the staff did not have the requisite skills?

Mr Vuyo responded that there are no staffs to perform the actual audit, the Department is beefing up the unit to employ people who can audit.

Mr Greve stated that currently there are four staff at the moment in the internal audit unit and with the appointment of the Deputy Director the Departments was slowly phasing out use of external consultants to rely more on internal capacity.

Mr Mandla Langa Director Financial Management, presented briefly on the supply chain management, noting that the problems are historical. Non compliance in 2013/14 financial year has declined compared to 2012/13 financial year in which they got a qualified audit opinion. Contributing factors are skills shortage- vacancies are filled but there is lack of required skills, poor planning, understanding what leads to irregular expenditure etc.

The Chairperson asked if it was lack of planning or was it a deliberate act on the part of officials.

Mr Langa noted that it was not deliberate.

The Chairperson asked if the Department was able to detect irregular expenditure.

Mr Langa responded saying yes they are able to.

The Chairperson noted that there was some irregular expenditure the Department did not raise

Mr Langa noted that the role played by the Department did not per se prevent such irregular expenditure. The prevention was at submission stage; it is not a question of picking out what has already been paid but to ensure that no process kicks in that is irregular.

Mr Vuyo in addition noted that in order to maintain the systems to detect irregular expenditure through the submission process, control measures were put in place. Although there have been some challenges, these measures have assisted in detecting and minimizing irregular expenditure.

The Chairperson noted with concern that the fact that the Department could not detect irregular expenditure was worrisome as there was some irregular expenditure that the AG was able to identity without the Department noticing.

Mr Vuyo responding to the issue of the correlation between the expenditure and performance stated that it is possible to meet all the targets and spend less thus there was no direct co relation or direct link. On boards and governance issues, while there is a need for governing boards in place, sometimes there is a time lag between when the appointment of the new board and selection process of appropriate skills that speak to the need of the entity actually occurs. In such instances there would be an extension to allow the process of appointment take place. The Minister is going through that process making sure it is taken care of. The Department is prioritising the white paper which will provide certainty from a policy perspective and ensure that Boards can deliver value for money. The Department needs to have consistent coherent entities that can be applied in order to have uniform supply chain management policies together with the monitoring and evaluation ability.

Mr Rabotapti asked for an assurance that the entities that currently do not have Boards will have the same by September.

The Chairperson added that the appointment of Board members is most times left until the last minute which creates a vacuum and it takes time to go through the nomination and appointment process. If these entities do not deliver then it means 80% of the Department’s budget is gone.

Mr Vuyo stated that the appointment process is being expedited and the Department is putting measures in place to make sure that the process is adhered to.

The Chairperson asked how far the Department had gone with the process of appointing Boards that had already expired.

Ms Newton responded that the Department advertised for a number of boards, nominations and interviews were carried out for those boards and the Department is awaiting appointment of the said boards.

Mr Vusithemba Ndima, Chief Director Heritage, responding to the issue of libraries noted that R 195 million was allocated and R 178 million was spent. Normally between 8 to ten million rands was spent per library, however, there is no standardized design of the libraries. The South African Library and Information Services Bill is attempting to set the norms and standards of the libraries. On Geographical Names, the report is 2009 to 2014 Provinces that performed well in this respect are Limpopo and Mpumalanga.

Mr Rabotapti asked whether flags were installed at early learning centers.

Mr Ndima responded in the negative stating that the focus was on every school.

Mr Rabotapti noted that many early learning centers have those flags and asked who carried out inspections to ascertain whether flags were installed in the right places.

Mr Ndima said that the monitoring and evaluation was done by their colleges at the Department.

The Chairperson emphasised that there is a need to engage and work with the provinces.

Mr Ndima responded to the issue on Freedom Park and archives. The Freedom Park is a creation of a Pan African Archive which doesn’t contradict the work happening in the archives. Pan African archives speak more about freedom, countries, the OAU etc that might ultimately have contributed towards the liberation of South Africa.

The Chairperson noted that the Department was not giving the archives the attention they deserve.

Mr Ndima acknowledged that comparing libraries and archives, the libraries are better resourced compared to archives because of the deliberate attention that was given to the libraries which is currently being shifted to the archives in form of the conditional grant for the archives to cover the infrastructure and human resource of the archives.

The Chairperson noted that there was no need for a shift, but archives should be given the attention they deserve.

Mr Greve addressing the accrued leave pay issue noted that this leave referred to leave days where public servants would accrue leave days without a limit. By the time t such staff retired they get paid for the accrued leave. According to the latest public policy this is no more the case as  public servants have a period of 18 months within which to take their leave or forfeit it.

Ms Newton responding to the question on job creation noted that the Department has created about 25 000 jobs all in support of the five year job targets.

The Chairperson requested Committee Members to study the presentation about entities as provided by the Department and the same would be presented and discussed in the next meeting to be held on 21 October 2014.

The meeting was adjourned.