The National Lotteries Board (NLB) briefed the Committee on the funding of the arts, culture and heritage sector. The budget allocation for the sector had been reduced from 27% to 23%. The main issues and challenges highlighted by the NLB were those of backlogs, the complexity of project proposals sent to distributing agencies, and the gap between the demand and supply, as requests amounted to far more than the NLB could give.
The Committee questioned what informed budget allocations and what had caused the decrease in the Arts, Culture and Heritage sector. It was not happy with the skewed distribution of funds and the use of consultants
The Pan South African Language Board (PanSALB) briefed the Committee on the appointment process of the CEO of PanSALB. The Board had agreed upon a candidate, and security checks were currently being conducted. An appointment was expected by the end of the week. The Committee was concerned about gender equity, the ambiguity of the contract, and the fact that PanSALB was working independently of the Department of Arts and Culture (DAC).
The DAC briefed the Committee on the activities and projects targeting youths that the DAC would implement in 2015/2016. The Committee was not impressed by the fact that most of these projects and activities were concentrated in one area, Gauteng. The Committee was also concerned about the overlapping of funding.
The Chairperson said that another committee, the Portfolio Committee on Trade and Industry, oversaw the National Lotteries Board (NLB), but artists had reported problems with the NLB to the Committee and to the Department of Arts and Culture (DAC). They had complained that they had applied to the Council but had not received any acknowledgement of receipt of their applications, or had been advised that their applications were in process, but three years down the line they had heard nothing from the NLB.
The Chairperson assured the NLB not to worry or be scared about presenting to the Committee. The Committee was there to seek clarity and information so that they could make well-informed decisions on the matter.
National Lotteries Board on funding the Arts, Culture and Heritage sector
Prof Alfred Nevhutanda, Chairperson: NLB, said the National Lotteries Council had celebrated 16 years of existence in March 2015, during which it had distributed more than R18 billion to good causes. On 14 April 2015, the Lotteries Amendment Act had come into effect. The main changes had focused on the name of the Board, distributing agencies (DAs), education and awareness, proactive funding and grants. The National Lotteries Board would no longer be known as the National Lotteries Council. In the past, DAs had been part-time, but with the amendment they were now full-time. The DAs would be responsible for adjudicating certain tasks, and money would be allocated to them by the NLB. The Amendment Act emphasized education and awareness around the existence of the NLB and how to apply for grants. In the past, the form was very confusing and did not differentiate between the different funds and the requirements for each fund; the form had now been differentiated, and advertisements for the grants would also be differentiated.
The National Lottery Distribution Trust Fund distributed funds to DAs for arts, charities, sport and miscellaneous. The arts fund had been reduced from 27% to 23%; the charities fund had been increased from 45% to 47%; the sports fund had been increased from 22% to 28%; and the miscellaneous fund had been reduced from 5% to 2%.
The DAs adjudicated applications and made grants in line with criteria.
Ms Thabang Mampane, Chief Executive Officer: NLB gave an overview of the Board, and said its vision was to be the catalyst for social upliftment. The mission of the NLB was to regulate all lotteries and sports pools with integrity and ensure the protection of all participants, to maximize revenue for good causes in a responsible manner, and to distribute funds equitably. Compliance with the Act, and fair and equitable allocations of grants were organisational mandates. The Board faced a challenge in meeting the funding needed, so there was a need to grow the fund. It was evidently a problem that people were applying to only one sector, so there was a need to educate the public about the other sectors of funding and to encourage them to apply to more than one sector of funding.
The key drivers for the NLB Grant Funding Division were the fulfilment of the NLB mandate, brought into effect by the amended Act and new regulations. The development of an integrated E-system would impact heavily on the operations of the Division, especially in view of the shift to automation in the revised business processes emanating from the business process review. Human resources need to be up-skilled. There had to be a direct correlation between the available funds for distribution and the number and/or scope of projects that could be funded within the financial year. Full-time DAs would impact on the pre-adjudication workflow.
The grant funding divisional programme had divisional programmes -- grant funding, service delivery and support. The purpose of the sub-programmes was to provide support to the DAs and to ensure that the grants were distributed according to the legislative mandate. The nine provincial offices and the sectors constituted the two sub-programmes of the NLB funds.
Mr Phillemon Letwaba, Chief Financial Officer: NLB, gave a financial overview of the NLB. The budget allocation for 2014/15 by sector was R1 001 million for charities; R623 million for arts, culture and national heritage; R489 million for sport and recreation; and R111 million for miscellaneous purposes.
Mr Jeffery du Preez, Senior Executive Manager, Grant Funding: NLB, spoke on the Board’s turnaround times. The Board would like to achieve reduced turnaround times in the adjudication process. Noticeable progress had been recorded of the last couple of years. The NLB was aware that the time from application to adjudication remained a challenge. The NLB expected that the move towards a more decentralised application-processing model, in addition to the full-time appointment of DAs and other administrative actions, would improve efficiencies and reduce timeframes.
The Minister of Trade and Industry had clearly summarized the three categories of interventions within which the required forms were pursued. These were administrative actions that could quickly be carried out by the Council to achieve efficiencies and reduce time frames, regulatory changes that could be relatively rapidly introduced in terms of the powers available under the Act as it stood, and amendments to the Act that would inevitably take more time to have an effect.
Based on the previous research undertaken, beneficiaries had complained of two main issues. These were the delays from the time of application to payment, which amounted to approximately three years, and concern raised by the beneficiaries on the delays in the release of subsequent tranches. In addressing these concerns, the NLB had put in place the following control measures:
- A provincial rollout expansion, which would allow direct access to applicants and additional capacity;
- An ERP system rollout;
- A business process review; and
- The pre-funding capacity building pillar would comprise a continuation and expansion of the existing education and awareness programmes. These programmes would be used to inform the public about the NLB and the National Lotteries Development Trust Fund (NLDTF).
During 2013, the NLB had commissioned the services of independent consultants MacIntosh Xaba & Associates to research the impact and effectiveness of NLDTF grants from 2005 to 2010, focusing on recipient organizations. In response to the question as to whether the Lotto or beneficiaries encountered any challenges relating to payment of tranches to projects, 6.6 % had found compliance difficult. Beneficiaries had encountered delays in the processing of progress reports, a lack of communication from the NLDTF had led to the postponement or scaling down of projects and problems with service providers, and there had been non-responsiveness to beneficiary queries. The NLB had encountered delays in the responsiveness of beneficiaries and auditors (for verification purposes), incorrect contact information supplied by beneficiaries, limitations/deficiencies in the current grant making and support system; corruption, collusion, fraud and conflict of interests; and misrepresentations by agents.
The interest accumulation in the Lotto funding from 2013 to 2015 was R774 559.
The introduction of the funding model was the new NLB’s approach to promote and support the attainment of the strategic mandate and vision, by responding to social problems and opportunities through a strategic and evidence-based mixed funding model. During the 2015 financial year, approximately R330 million of the arts, Culture and heritage budget had been invested in the creative and cultural industries.
The NLB highlighted the challenges that they faced. Firstly, the demand was greater than the supply. In 2013, the NLB had received R72 billion worth of requests, but could distribute only R2 billion. Secondly, the projects that were sent to the NLB were very complex and the DAs had found it very difficult to make decisions on which ones to choose for funding. Lastly, the NLB was struggling with backlogs from 2013.
The Chairperson informed the NLB that the Committee would ask questions based on the presentation and what was happening in the relevant Member’s constituencies. She appreciated the eye-opening and informative presentation. She commended the NLB on their self-reflection, because they had been able to identify the gaps and weaknesses in the Board.
The Chairperson asked what informed the budget allocations, and what they were based on. What did the NLB mean by the term ‘equitable’, and how far was the NLB with their vision of equitability? She acknowledged and commended the NLB’s objective for education and awareness about the NLB and the NLDTF, and asked if the NLB had the capacity to carry out this education and awareness campaign.
Professor Nevhutanda said that the NLB received its policy from the Department of Industry and Trade. The role of the NLB was to participate in regulation and law, not to make it. The budget allocation was not static and it changed over the year. The NLB would ensure that education and awareness took place everywhere, and they would send teams to assist those who wished to apply. The teams that were sent for education and awareness had capacity.
Mr T Makondo (ANC) said it had been an eye-opening presentation that had brought clarity about the operation and distribution of the NLB. He asked what informed the decrease in the arts portfolio/sector. In other countries, such as America and Nigeria, the arts and culture sector contributed largely to the gross domestic product (GDP). South Africa’s arts and culture sector had the potential to contribute largely to the country’s GDP and create full-time jobs. He wanted to understand the budget allocation in relation to this. The new Act would help the Council to target areas that did not have certain resources, and he welcomed this. The Committee would appreciate it if the Council stuck to the new turnaround time. He welcomed the differentiation of the forms, because it would now ensure that all people would have the opportunity to access funding.
Mr Willie Reetsang, Deputy Chairperson: NLB, said that he was an artist. He said that comparisons could not be made with regard to the arts sector contributing to the GDP and job creation. More than anything, it was about investing wisely. Income preservation referred to sustainability and the preservation of heritage sites in order to generate income.
Ms N Bilankulu (ANC) appreciated the review of the application form in order to make it less complex and difficult to complete. She asked where the NLB’s offices were and where the applications went. She acknowledged that the NLB was still dealing with the backlog of 2013, and asked what was being done about the backlog of 2014. She asked if applicants received a number or code after being processed. She sought clarity on whether it was true that some officials in the system were corrupt, biased and accepted bribes. Was the NLB informing the different areas that they visited in the different provinces about the NLB and NLDTF?
Ms Mampane said that the NLB would send the list of their offices to the Committee. She said that the issue of bribery, corruption and bias with regard to officials had been dealt with. She explained the processing system, saying that the officials worked according to a number allocated to the applicant. The NLB was currently dealing with corruption and fraud.
Dr P Mulder (FF+) asked whether charities needed to reapply for funding every year. He said that many charities were not aware of this and as a result lost funding that they were dependent on, because they assumed that they would receive funding the following year. He asked what was meant when the NLB talked about the maintaining of heritage sites for revenue generation -- he wanted to know what was meant by “revenue generation.”
Mr J Mahlangu (ANC) said that arts, culture and sports brought and kept people together, and that these sectors mobilised everyone. He spoke about the 2010 World Cup to support his statement. He argued that because of that very reason, well thought out funding measures were necessary. He asked why there was a reduction in the arts and culture sector. He was offended by this reduction. Did the NLB have any people who were from the arts sector, who were passionate about it and could advocate for arts and culture? Since 2013, there had not been a call for applications in the arts sector -- why was that the case? He asked if the NLB could speak about distribution in the different provinces, as he felt that the distribution was skewed and not in accordance to the Fiscal Act in respect of making allocations and distribution. There was a lack of equity.
Professor Nevhutanda explained that at least 5% of resources had to be allocated to provinces. He explained that the allocation to each province was application-based. People did not understand the Lotto process, and the NLB hoped that a focus on education and awareness would eradicate that. There were offices in all the provinces. Last year, the NLB had met their 5% target in each province.
Ms Mampane said there was a lot of passion in the organisation. The Chairperson of the NLB had a PhD in music, so he could relate to the plight of artists. Funding was application-based and call-based. The Western Cape, Kwa-Zulu Natal and Gauteng had the most non-government organizations (NGOs) and non-profit organizations (NPOs), which was why the distribution seemed skewed. The NLB had been encouraging a number of organisations to register as NPOs and NGOs so they could apply for funding.
A Member from the Portfolio Committee on Trade Industry commended the NLB on its progress. He asked what intervention was being used with regard to the NLB’s vision of being a catalyst for social upliftment. The NLB needed to look into the problem of local governments applying to the NLB for funds for infrastructure. He said that local government had specific funds for infrastructure, but the problem was that they spent these funds on other activities, and then unfairly turn to the NLB to fund these projects. He asked when the NLB would complete its backlog. He asked how the NLB would deal with the problem of consultants – they were problematic and unnecessary, and cost organisations a lot of money,
Professor Nevhutanda said that applications were assessed according to quality and preciseness of what an organisation wanted. An application required two audited financial statements.
Ms Mampane acknowledged the fact that consultants were problematic and pointed to the fact that they were the ones who drew up the organisations’ proposals, and as a result organisations were at an advantage.
Ms Zodwa Ntuli, Deputy Director-General: Trade and Industry, said that most funding went to well formulated proposals, and not to the projects and proposals that needed the funding the most. Most proposals were rejected because they did not meet requirements. She said that the Department of Industry and Trade (DOT) hoped to balance the needs and the quality of the proposals. The process was consultative and involved input from different stakeholders, the NLB, the Minister and the DOT. She acknowledged the plight of artists and said that the DOT was aware of this plight and was attending to the issue. The Department was currently working with different relevant entities to deal with the issue and establishing a framework and a way to deal with the matter.
Briefing by Pan South African Languages Board (PanSALB)
Prof Mbulungeni Madiba, Chairperson: PanSALB, briefed the Committee on the appointment of the CEO for PanSALB. The application period had been opened on 5 March 2015 and the deadline for the applications was 5 May 2015. Five candidates had been short-listed from the application process, and one had pulled out. On 29 May, one of the four candidates had been agreed upon. The appointment process was not yet complete, but the Chairperson anticipated that it would be complete by the end of the week. Currently a security check was being done on the chosen candidate.
Mr G Grootboom (DA) asked what the current status of the acting CEO was, and what would happen to the acting CEO after the appointment of a CEO.
Prof Madiba said that the acting CEO was previously a senior advisor of the organisation. He would continue with that job once the CEO had been appointed. He said that it had been assumed that the acting CEO was not interested in the CEO position because he had not applied.
Ms S Tsoleli (ANC) asked what the gender of the agreed upon CEO was. She asked at what level Parliament was involved in terms of the employment and appointment of a CEO in a public institution. She said that in some public entities, Parliament had to endorse CEO candidates. She asked whether Parliament had a say in who was appointed CEO of PanSALB.
Prof Madiba acknowledged the need for gender equity.
Mr Makondo asked how PanSALB would deal with the expectation created by the advertisement they put out, stating that the five-year contract was renewable, instead of stating that it was fixed. This creates an expectation of the renewal of one’s contract, when that was not the case.
Mr Mahlangu said that the PanSALB Board needed to be proactive and involve the Committee in what was going in the organisation before it was too late or beyond repair.
The Chairperson said that PanSALB had not submitted annual performance plans or a strategic plan. She also said that PanSALB did not have money. The Department of Arts and Culture needed to intervene.
Prof Madiba explained that this was due to the problem of capacity.
Mr Mahlangu said that PanSALB could have asked the DAC to help. He asked why consultants were being used for such an intricate and intimate document. PanSALB was spending money it did not have.
The Chairperson urged and encouraged PanSALB to make use of its relationship with the DAC.
Mr Vuyo Jack, Acting Director-General: DAC, explained that a meeting had been held with the Minister and PanSALB. At this meeting a list of requirements, such as an annual performance plan and strategic plan, were specified as needing to be completed by PanSALB before receiving any funding from the DAC.
The Chairperson said that the PanSALB should not work in a silo, but use the support and relationships available to them.
Briefing by Department of Arts and Culture on its youth activities
Ms Monica Newton, Deputy Director General: Arts and Culture Promotion and Development (ACPD), DAC, briefed the Committee on its planned projects for the 2015/2016 year. On Youth Day and Youth Month, the DAC would support and co-host a Youth Day event and run a Youth Month Programme. It would be partnering with the National Youth Development Agency, the Presidency and relevant Departments. The budget for this project was R700 000.
The DAC would be hosting rehabilitation programmes through arts, culture and heritage. This project was called Arts Access. The DAC would be partnering with the Department of Correctional Services on this project. The allocated budget was R950 000.
The DAC would have various programmes that targeted and promoted participation of out-of-school youth in arts, culture and heritage. This project was called Youth Enrichment. The DAC would be partnering with civil society organisations on this project. The allocated budget was R1.1 million.
The DAC would have a mass participation programme encouraging youth inclusivity and participation through brass bands. This project was called the Field Band Foundation. The DAC would be partnering with some municipalities, the Field Band Foundation and several private sector companies on this project. The allocated budget for this project was R2. 6 million.
The DAC would have various projects that targeted youths at school in order to promote careers in arts, culture and heritage. This project was called Arts Education. The DAC would be partnering with the Department of Basic Education on this project. The allocated budget was R1.5 million.
The DAC would develop a mainstreaming strategy for five years to ensure coordination and maximization of resources and programmes for target groups – youth, women, children, people with disabilities, and the elderly.
The DAC would support youth proposals through the Mzansi Golden Economy (MGE) for public art projects in their locality. This project was called the Public Art Programme.
The Department would support various youth proposals or requests for touring ventures where there was potential to represent South Africa on continental or international stages. This project was called Touring Ventures.
It would have a DAC internship programme which sought to give young new graduates workplace skills by placing them in work environments for twelve months. Plans were to recruit 30 graduates or diplomats for the 2015/2016 period.
Various bursuraies were awarded by the DAC. These were offered internally by the DAC and through the DAC entities for study at tertiary institutions to promote careers in arts, culture and heritage.
The DAC, in partnership with the National Youth Development Agency and the Gauteng provincial government, would host the National Youth Day Commemorations on June 16, 2015. The event would take place at the Tshwane Event Centre, Pretoria. The theme for the commemoration was “Youth Moving South Africa Forward”
Issues affecting the youth of South Africa were complex and required coordination across all of government and all its spheres. The DAC was part of the Presidential Youth Work Group which was looking at this form of coordination. The location of youth development programmes at provincial and local levels needed to be revisited to ensure that they were served and participated in civic issues that affected them. The DAC intended to have board consultants during the formulation of the Target Groups’ Mainstreaming Strategy, to ensure better coordination of youth development resources. The Deputy Minister had engaged provinces on target groups programmes, and a working committee had work under way. The DAC was finalizing the process of signing memorandums of understanding with the Department of Basic Education to ensure that there was a deliberate schools-based programme in all public schools, including flags, singing of the National Anthem, and the recital of the Preamble to the Constitution.
Mr Grootboom said that there was an overlap in funding that was evident in most of the projects that the DAC hadpresented. The DAC needed to look into this matter, because the funds could be used in other areas.
Mr Jack stated that greater transparency with regard to funding was needed in the National Youth Development Agency.
Ms Tsoleli questioned why the projects and programmes had been concentrated in one area, namely Gauteng. She welcomed the Youth Day programme.
The Chairperson asked what the end goal for these projects and programmes was, and what the DAC wished to achieve through these activities. She asked how the DAC was intervening and responding to issues that were prevalent in rural areas, such as teenage pregnancy. What was being done day by day to empower the youth?
She said that what the DAC did must always be related to the Department’s strategic objectives. She told the Department that the dreams and aspirations of young people were in their hands, and that the country was banking on the DAC to change the mindset of the youth.
The meeting was adjourned.
Download as PDF
You can download this page as a PDF using your browser's print functionality. Click on the "Print" button below and select the "PDF" option under destinations/printers.
See detailed instructions for your browser here.