State Theatre & Ditsong Museums of South Africa on their 2014/2015 Annual Report

Arts and Culture

15 October 2015
Chairperson: Ms X Tom (ANC)
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Meeting Summary

The State Theatre and Ditsong Museums of South Africa, two entities which fall under the jurisdiction of the Department of Arts and Culture, gave presentations on their 2014/15 annual reports issued by the Auditor General. Both had received qualified opinions and were facing a number of financial difficulties.

The State Theatre was set to present to the Committee first, but once the presentation began it was apparent that the hard copy handed out to members did not match what was being presented. This angered Members of the Committee, and Ditsong was asked to present first. Members of Ditsong needed to be at the airport for a flight at 7 pm, so there was pressure for the meeting to be over by 5 pm. This was compounded by the fact that the meeting had begun late because of some technical difficulties with regard to the presentations.

The Committee Members stressed the need for the entities to be more accountable for their irregular expenditure. The entities were frequently asked who was responsible for the irregular expenditure and what consequences and disciplinary action had been taken against those responsible, and the entities had been unable to give satisfactory answers. The Chairperson repeatedly stressed the need for detailed reports to be given to the Committee in order for it to conduct effective oversight, and to obtain the goal of clean audits set by the national government.

The State Theatre and Ditsong Museums of South Africa both presented on their achievements, the challenges they faced, and how they intended to resolve them. Both of the presentations were criticised for not offering concrete solutions and for not detailing how the two entities had come to be in the situation in which the Auditor General had found them.

Meeting report

The Chairperson explained to the delegation that the Committee would be asking questions in order to get a better understanding of their operations and situations. They should not take anything said personally. She encouraged the delegation to be open and honest.

Remarks by the Department of Arts and Culture
Mr Sakiwo Tyiso, Chief Director: Department of Arts and Culture (DAC), provided a brief financial overview of both the Ditsong and State Theatres. He outlined the expenditure of the entities and some details about the entities, such as how many staff meeting had been held and how well they were attended. The Chairperson commended the Department for doing as instructed and for being aware of the current financial situations of the Ditsong and State Theatres.

Briefing by State Theatre
Ms Bulelwa Malange, Deputy Chairperson: State Theatre, apologised for the absence of the CEO and Chairperson of the entity and introduced the Acting Chief Financial Officer (CFO), Ms Natashia Soopal, and the Technical Director, Mr Gert Viljoen, who would be presenting to the Committee.

Mr Viljoen highlighted some of the key achievements, such as a performance on Marikana that had won an award. It was immediately evident that the hard copy presentation made available to the Committee and attendees of the meeting was not the same as the one being presented by the Technical Director.

Ms N Bilankulu (ANC) interrupted the presentation by drawing the attention of the Chairperson to the discrepancy between the slides being shown and the hard copy presentation.

The Chairperson requested State Theatre to explain why the presentation being given was different from the one submitted and printed for the session. It was revealed that the State Theatre had submitted an updated version of the presentation the previous Friday, which had been emailed to the Committee Members but had not been printed. The Chairperson reprimanded the State Theatre delegation for not submitting the presentation ten days before, as procedure dictated. She instructed the Departure of Arts and Culture representatives to aid entities in following the set protocols and procedures.

Mr T Makondo (ANC) interjected at this point to inform the Chairperson that the email sent out on Friday with the updated presentation was also not the same as the one being presented by the entity. There was much confusion as to why the presentation was different, which ended with the Chairperson instructing Ditsong to begin their presentation while the State Theatre sorted out the problems with the presentation.

Briefing by Ditsong Museums
Prof Lucky Mathebula, Chairperson of Ditsong museums, told the Committee that one slide had been added to the presentation, but that it was only an introductory slide and would not affect the content of the presentation.  

He said the entity operated a number of museums, most of which were on land owned by the Department of Public Works. This inhibited their ability to extract great profit from the properties. They were also unable to extract profits from their heritage assets, as they had insufficient funds to develop them.

The entity had seen a growth in its own fund-raising ability, and had developed a restoration and maintenance programme. The policies were up to date and all committees were functional. A number of successful programs had been held, including the Steve Biko and Batswana exhibitions.

The Chairperson reprimanded the Ditsong delegation for the poor quality of the presentation, and for having to jump from one page to another. She instructed them to apply their minds. The Members of the Committee had already read the reports on the entities, and the opportunity to explain themselves and highlight key issues should be taken seriously.

Adv Diamond Mushwana, CEO: Ditsong Museums of South Africa, said some of the museums operated by Ditsong received a high number of international visitors, while others received little to none. They had been able to generate R8 million themselves, while the rest of their budget came from government grants.

The Chairperson then gave the floor over to the State Theatre once again.

Continuation of briefing by State Theatre
Mr Viljoen began by apologising for the errors with the presentation -- the e-mail containing the correct version of the presentation had been sent to the wrong people.

He said visitors to State Theatre organisations had increased by two per cent, and a new programme had been started under which a number of productions had been produced. A R20 million surplus was reported. There was a plan to upgrade space within theatres to restaurants and shops in order to encourage visitors to visit more often.

The Chairperson asked Ms Soopal, when Mr Viljoen finished his presentation what she intended on speaking on that had not been addressed by Mr Viljoen, as time was an issue.

Ms Soopal said she intended speaking on the State Theatre’s plan to move forward. An audit action plan had been developed, to resolve the issues arising in the bad qualification given by the Auditor General. Part of the qualification had been due to a lack of skills within the finance department of the Theatre and the constantly moving nature of assets within the entity.

The Chairperson acknowledged the contributions of the presenters and expressed the view that the problems faced by the two entities were worrying, as they were recurring. The issues that had been brought out by the Auditor General had been raised before. What were the entities doing about the high level of irregular expenditure? What mechanisms were in place to provide consequences for those responsible?


Ms Bilankulu said that in her opinion, Ms Soopal had contradicted herself in that the report had stated as a positive factor that staff had been sent for training, while she had stated in her presentation that sending the staff for training had resulted in no improvement in their performance. Irregular spending of R16 million was far too high, and the State Theatre should find a way to put people in place who could properly manage the finances. In positions where people were acting and not permanent, why was this so?

Ms Soopal responded that the irregular expenditure had decreased from last year, and that a plan had been developed and put in place to reduce it completely. They had gone through a process to identify all the irregular expenditure and to institute checklists to ensure compliance. There had never been a procurement department within the State Theatre, and now there was a central one which would be used to ensure proper procedures were followed.

Ms Bilankulu asked the State Theatre delegates why they had been unable to keep track of the assets. Why did they not keep and maintain an asset register?

Ms Soopal said that they did have an asset register which was managed using procedures from the previous year. The problems that had been brought up by the Auditor General with regard to asset management had arisen because there had been disagreement between the Auditor General and the CFO as to which assets had value. They were now in the process of developing a more sophisticated system of asset management.

Mr Makondo said that on Tuesday he had been impressed with the presentation given by Iziko Museum, as they had combined "partially achieved" and "not achieved," which State Theatre had not done, and this reflected badly. Chapter five, section 28 of the Public Finance Charter states that an accounting officer must make sure they collected money owed to the Department or the entity. The Auditor General had stated that he did not feel that the accounting authority had taken steps to ensure all money owed was collected, or taken steps to prevent irregular expenditure. There appeared to be no consequences for poor performance and transgression by management at Ditsong. The Board of Ditsong should hold the employees accountable for transgressions and institute consequences for the report given by the Auditor General.

The Chairperson had similar concerns, stating that the job of the Committee was to do oversight and in order to do this, they needed details and specifics. Both entities needed to submit detailed reports.

Mr Mathebula said that at Ditsong, they counted partially achieved as not achieved.

Mr G Grootbloom (DA) asked about the omission of an employment equity plan. What was the current situation at the State Theatre?

Mr Makonda said that the situation at the State Theatre was very bad. Why was the board not addressing the issue of having an acting CEO and an acting CFO. He said that the reports given could not be taken seriously, as they provided no solutions to the problems presented.

Mr Grootbloom expressed the opinion that the audit action plan needed to be looked at again. Why did an outside consulting firm need to be hired -- which was an extra expense -- when they had a CFO and the audit report was done by the Auditor General?

Ms Soopal responded that they did not have an internal audit committee, but they had appointed one now. As a result of the poor qualifications of the current staff in the department, it was necessary to have people with the technical skills needed to resolve the situation.

Mr Grootbloom said that the current people in the acting positions must not be doing a good enough job to convince the board of the entity that they should be made permanent.

Ms Malange explained that the Acting CFO was a stand-in because she had resigned the position of CFO of the State Theatre, but had signed an agreement to remain in the position until a hand over to the next CFO had taken place. A new permanent CEO was in the process of being vetted to begin on 1 November. The council had been meeting to resolve key issues as it recognised that the entity could not be run this way.

Ms Bilankulu asked if the problems within the finance department were part of the key issues discussed at the council meeting.

Ms Malange replied that they had been, as these issues had been compounded by the resignation of the CFO, who was the only one in the department with accounting qualifications.

Mr Grootbloom also asked Ditsong if they had an employment equity plan in place. The current staff did not reflect the current demographics in the country.

Ms A Matshobeni (EFF) asked who was responsible for the irregular expenditure, and why had they not been disciplined?

The Chairperson commented that the under expenditure of R20 million by the State Theatre was unacceptable, and comparable to a crime. She asked for more information on the issue of staff not improving after training.

Ms Soopal said that none of the staff in the finance department had any qualifications and so this made it difficult to train them in finance. In addition, some institutions would not even accept them without any qualifications.

Mr Grootbloom said it was a waste of resources to try and qualify someone who did not have any qualifications -- why not hire a new person?

Ms Soopal responded that they were in the process of correcting the situation, as the newly appointed finance manager and asset controller had degrees.

Mr Grootbloom asked the acting CFO to explain the under-spending of R20 million.

Ms Soopal said it had been an issue that could not be avoided, as the money had been transferred into their bank account only on the last day of the financial year. As a result, they had had to include it in the statements, but had had no time to make use of the money.

Ms Bilankulu asked the delegates from the Department of Arts and Culture if they had in fact transferred the money to the State Theatre on the last day of the financial year and if so, why had they done this?

The Department delegates had no response to this, and so were instructed by the Chairperson to follow this issue up and report back to the Committee.

The Chairperson said that she was dissatisfied with the responses given by the State Theatre delegates with regard to the issue of irregular expenditure. It had not been made clear who had been responsible.

Ms Bilankulu questioned the Ditsong delegates on whether the financial situation was the same as with the State Theatre, and asked why there had been over-expenditure.

Mr Mushwana explained that it looked larger than it actually was, because some of it had been held over from the previous year and then included in this year's statements. They had a five-year strategic plan which had been submitted and approved in the previous year. They had been unaware that they were required to re-submit this year in order for it to be included in the report of the Auditor General.

Mr J Mahlangu (ANC) said that if there were any problems with the Auditor General, they should be dealt with appropriately. Those were management matters, and five-year plans should be submitted every year.

Mr Tyiso responded that five-year plans did not have to be submitted every year, only every five years.
Mr Mathebula said that a financial auditing company had been appointed in order to find out exactly what had led to the current financial situation.

Ms Bilankulu asked the delegates from Ditsong how there had been a failure to budget for water and electricity at one of the museums. How could this happen?

Ms Noluthando Sakawuli, CFO: Ditsong Museums of South Africa, said that all Ditsong museum buildings belonged to the Department of Public Works, who paid the utility bills. A new air conditioning system had been installed at the Natural History Museum, which had increased the bill substantially. They had written to the Department of Arts and Culture to enquire why this bill had not been paid, but had not received a response.

Mr Tyiso responded that they paid only for certain buildings. There were some buildings that did not fall within their management.

The Chairperson asked Mr Tyiso if Ditsong was aware that they did not pay for all the bills.

He replied that they should be aware, as it had always been that way.

Ms Sakuwili said that paper correspondence would be appreciated so that they could make budgetary allowances.

The Chairperson said that good communication between departments and entities was vital.

Ms Bilankulu asked the Ditsong delegates why a moratorium on hiring new staff had been instituted only in the third quarter. Why the wait to do this?
Mr Mathebula explained that that had been a strategy to deal with the issue of overspending.

Ms Bilankulu asked why their report had not contained information on staff demographics such as the number of people with disabilities and the number of women. Did they have an employment equity plan?

Mr Mushwana said that they had an employment equity plan which had been approved in 2014.

The Auditor General made some concluding remarks at the conclusion of the meeting, advising the entities to come with more detailed reports and to come to the Committee with solutions, and not just stories.

The meeting was adjourned.

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