The Department of Arts and Culture (DAC) briefed the Committee on the current status, legal challenges and way forward for the Pan South African Language Board (PanSALB). It was noted that the dissolution of the Pan South African Language Board resulted from numerous and long standing periods of crisis on funding and instability in the senior management and board structures, and that PanSALB had consistently argued that it is underfunded. The Minister then commissioned a review which found that PanSALB had materially failed to meet its mandate and was unable to translate the mandate into a meaningful and aligned set of strategic objectives and performance activities. Due to this, the Minister appointed a new Board in 2014, however; by then, the organisation was already in a state of financial crisis. Also, 42 staff members were summarily dismissed without consideration of the impact this would have on the legal claims and the PFMA required documentation were not submitted to the Department. The AG had issued a disclaimer for both 2013/14 and another in 2014/15, on the basis that there was insufficient audit evidence to support an audit opinion. The Minister then exercised the powers under section 5 (5A) of the PanSALB policy and dissolved the Board with immediate effect on 12 January 2016. The Minister of Arts and Culture consulted with the Minister of Finance requesting approval to appoint the Board of the National Heritage Council as the Interim Accounting Authority of PanSALB. Prof Mbulungeni Madiba, former Chairperson of the PanSALB Board, and others had now asked the Court to find the Minister's decision to dissolve the Board as unlawful and invalid and asked that it be reviewed. DAC would be asking the State Attorney to defend the matter .
Members of the Committee expressed concern on the challenges and crises in PanSALB, asked if the new Council would take responsibility for the legal matters arising from the old Board, and noted that despite the fact that so much time had been spent on this entity, it was yet to present its Annual Performance Plan. It was suggested that input from legal advisers be obtained and it was also stressed that the new Board needed to have the right skills mix.
The DAC also presented a report on the forensic audit undertaken at the Windybrow Theatre. Since 2010, the DAC had been funding the Windybrow Theatre to address its infrastructure requirements, and since 2010 it had spent around R65 million on capital works, using this for the renovation of the Heritage House and the refurbishment of the main theatre. However, when the accounting authority at the time and the audit committee visited the Windybrow, they found a lack of correlation between the work done and expenditure incurred, with ongoing concerns about the state of Windybrow Theatre premises. The Council was of the view that the funds spent on capital works projects at Windybrow included both irregular payments and fruitless and wasteful expenditure, and commissioned a forensic investigation which was done by Ernst and Young and covered the 2010 to 2013 financial years. Findings included payments made in excess of contract values, overstepping of the mandate by the Chief Financial Officer and Chief Executive Officer, executive making unauthorised payments, failing to comply with local authority requirements. The auditors had recommended that disciplinary action be instituted against the identified contractors.
Members said that the Committee should be briefed regularly to get updates, asked about the progress of renovations and stressed the importance of the forensic report. They suggested that corrupt officials should be placed on a database to ensure that they were not appointed on the Boards of public entities. They asked for details on the linked cases. The relationship between the cases of Windybrow and Market Theatre were contrasted.
The DAC finally briefed the Committee on its survey of 87 community arts centres, and the functions and delivery of objectives was debated, setting out the research and where that might lead. Figures were tabled to show the provincial breakdown of survey respondents. The main challenges were listed as inadequate interface between government investment in infrastructure and a sustainable and resilient approach to the needs, difficulties in effective management and programming, and in actively addressing infrastructure. It was suggested that there should be clarity on the roles, models and support systems between all spheres of government. A central vision and policy framework, and an adequate funding framework was needed for the Centres, and so a national programme was recommended. Members suggested that the Minister be asked to intervene and wondered if enough support had been given, and whether this was monitored particularly to check on use of funding. They questioned developments in rural towns and areas. They suggested that the SA Rhodes Agency, who were appointed as temporary caretakers, should be a public entity. They discussed the two linked cases of the Market Theatre and Windybrow Theatre, and how the decision in one might affect the other. The realities of programming and the costs of operating, programming, maintaining and upgrading were outlined. Provincial departments had been asked to identify the centres that would require refurbishment within the next five years, and provincial grants were being awarded. There were some challenges with unrealistic budgets and lack of interest from some provinces. Members asked for the names of the Centres, whether they had received sufficient support, how they would be monitored, and what rural communities they were supporting. It was noted that the investigation into the National Arts Council was continuing.
Department of Arts and Culture (DAC) briefing on the Pan South African Language Board (PanSALB) dissolution
The Chairperson asked Members to reflect on the issues raised previously in relation to the Pan South African Language Board (PanSALB or the Board) and ensure that PanSALB could be empowered to deliver full results and meet the mandate for which it was created.
Mr J Mahlangu (ANC) took over as Acting Chairperson at this point.
Mr Vusithemba Ndima, Acting Director General, PanSALB, gave a general report on the dissolution of the PanSALB and the way that the Department of Arts and Culture (DAC or the Department) was intending to take the matter forward. His presentation also covered the forensic audit report on the Windybrow Theatre and a high level audit report on community arts centres.
He noted that the dissolution of PanSALB resulted from numerous and long standing periods of crisis on funding and instability in the senior management and board structures, which had basically been extant since the establishment of the Board.
The institution had had numerous sustained periods of crisis since its establishment. PanSALB had consistently argued that it is underfunded, and over time, there has been substantive instability in senior management and board structures.
In 2011, the management and governance challenges were so severe that the Portfolio Committee on Arts and Culture requested the Minister of Arts and Culture to intervene.
The Minister then commissioned a review which found:
- PanSALB had materially failed to meet its mandate and was unable to translate the mandate into a meaningful and aligned set of strategic objectives and performance activities
- There were serious problems with the functioning of the Board
The Minister used the powers in terms of section 5(5A) of the PanSALB Act 59 of 1995 and dissolved the Board, and appointed an caretaker Chief Executive Officer (CEO) to assist in the development and implementation of a turnaround strategy.
A new Board was appointed in 2014. By then, the organisation was already in a state of financial crisis. The allocation from the DAC was not sufficient to cover the fixed costs of the organisation or settle outstanding obligations. Despite numerous meetings between the Board, the Department, the whole staff of PanSALB and the Deputy Minister and this Portfolio Committee, the Board was still unable to put matters right and to fulfill the leadership role. Various decisions of the Board further undermined its stability. It was found later that the Board had not responded and made decisions, as a result of which further legal claims were lodged. 42 staff members were summarily dismissed without consideration of the impact this would have on the legal claims. Various statutory documents, such as the approved Strategic Plan, Annual Performance Plan and quarterly reports that were required under the Public Finance Management Act (PFMA) were not submitted to the Department in time and had still not been presented to Parliament
The Auditor-General (AG) issued a disclaimer for both 2013/14 and another in 2014/15, on the basis that there was insufficient audit evidence to support an audit opinion. This included lack of evidence on administrative and operating expenditure, payables from exchange transactions, staff costs, property plant and equipment, wasteful expenditure, irregular expenditure; contingent liabilities. There were material misstatements in cash flow.
The Minister then exercised the powers under section 5 (5A) of the PanSALB and dissolved the Board with immediate effect on 12 January 2016. This was done because of the numerous shortcomings and the fact that the Board had failed to implement the objects outlined in section 3 of the Act. It had not created conditions for the preservation, development, promotion and respect for official and other languages in South Africa, as it was mandated to do. The State Law Adviser's opinion was sought and that confirmed, on 31 August 2015, that the grounds and motivation to dissolve the Board were reasonable.
The Minister of Arts and Culture consulted with the Minister of Finance requesting approval to appoint the Board of the National Heritage Council (NHC) as the Interim Accounting Authority of PanSALB. The NHC Board was so appointed and is overseeing the daily operations and initiate actions to stabilise and improve the organisation. The NHC and Minister met last on 28 January 2016 to brief the Minister in full, and the Department also proposed where the NHC Board should focus during its caretaker tenure at PanSALB. The NHC Board was still to start work with PanSALB Management, to try to ensure that the PanSALB will start to work properly on its mandate.
However, the DAC had now been served with a Notice of Application by Prof Mbulungeni Madiba, former Chairperson of the PanSALB Board, and others, asking the Court to find the Minister's decision to dissolve the Board of PanSALB as unlawful and invalid, reviewing and setting it aside and calling on the Minister to pay costs. The Department will be asking the Office of the State Attorney to defend.
Mr G Grootboom (DA) asked whether the new Council, which has taken over the PanSALB Board, would also take responsibility of the legal matters which surfaced during the term of the old Board. He also suggested that that the new Council should be kept out of the matters of the old Board as the new Council were not part of the previous legal proceedings which took place between the Minister, employees and the old Board.
The Acting Chairperson said the Committee has spent more time with the PanSALB Board than with any other entity within the department, but one of the problems for the Committee is that PanSALB has yet to make its presentation on their Annual Performance Plan (APP).
A member of the Committee said an input from the legal advisors is needed at this point so that the Committee can be directed as to how this matter of the PanSALB Board can be resolved.
The Acting Chairperson suggested that the department should get a lawyer who had experience working with the government, someone with financial skills to audit the expenditures of the entities as well as those of the Board, a good labour practitioner with experience in Human Resources (HR) and perhaps a language interpreter because the issue of language has been an on-going one within the Board.
Windybrow Theatre: Forensic Audit: DAC Report
Mr Ndima presented a report on the forensic audit undertaken at the Windybrow Theatre. By way of background, he explained that the DAC allocates capital grants to its public entities, including the Windybrow Theatre, to address their infrastructure requirements. Since 2010, the Windybrow Theatre had spent about R65 million on capital works, using this for the renovation of the Heritage House and the refurbishment of the main theatre. However, when the accounting authority at the time, and the audit committee, visited the Windybrow they found a lack of correlation between the work done and expenditure incurred, with ongoing concerns about the state of Windybrow Theatre premises. The Council was of the view that the funds spent on capital works projects at Windybrow included both irregular payments and fruitless and wasteful expenditure, and commissioned a forensic investigation.
The forensic audit was authorised in 2013, to be done by Ernst and Young, covering the 2010 to 2013 financial years. The scope was to cover:
- Payments made to various service providers contracted to refurbish the premises
- Procurement processes followed in awarding contracts
- Terms of reference for various service providers.
The findings were that:
- Payments made were in excess of the contract values (over-payments)
- The Chief Financial Officer and Chief Executive Officer overstepped their mandates
- Fruitless and wasteful expenditure was incurred
- The executives made unauthorised payments
- There was non-compliance with local authority requirements.
Mr Ndima outlined some of the recommendations of the auditors: including instituting disciplinary action against the identified contractors, and appointing an independent consulting engineer to quantify the quantity of the value of work and funds required to complete the project.
Mr T Makondo said he welcomes the forensic report. He said that the Committee should be briefed regularly on matters arising regarding the investigation so that the Committee is aware of any new developments.
Mr Grootboom asked how far the Windybrow Theatre is with its renovations.
Dr P Mulder (FF+) apologized for missing most part of the discussion and recommended that the idea of forensic audit is important and should be taken seriously.
The Acting Chairperson said he shares the same views as that of the Council of the Market Theatre Foundation. He said he is unsure whether both Windybrow Theatre and the forensic auditors realised the severity of the problem. He said that the corrupt officials should be placed on a database to ensure that they are not appointed on the Boards of public entities. With regards to the finalization of the renovations, he pointed out that according to the Market Theatre, Windybrow is going to use their own money for the renovations. He said that this is commendable and hopes that many other entities would take this initiative.
Ms Monica Newton, Deputy Director General, DAC, said that there are a range of different avenues for individuals who feel that they were unfairly dismissed. She added that there are not any individuals from the Windybrow or Market Theatre who have come forward claiming they have been unfairly dismissed.
The Chairperson corrected her pointing out that the Market Theatre had decided to challenge the Commission for Conciliation, Mediation and Arbitration (CCMA) award at the Labour Court.
Ms Newton clarified that the individuals from the Market Theatre challenged the manner in which they were dismissed, and not their dismissal from the Council of the Market Theatre. The CCMA had awarded the dismissed individuals with a cash bonus, pending their dismissal from the Council.
The Acting Chairperson asked why, if the individuals were paid, the Market Theatre would challenge the CCMA award.
Ms Newton said that the DAC was willing to provide the Committee with a detailed report as to why the Market Theatre had challenged the award. The Committee should note that every organisation has its private mechanisms, and this was the case with the Market Theatre. There were a number of court cases and this had an effect on the liability of the Market Theatre, for there are suppliers who have not been paid and are claiming that they have the right to be paid. There were also criminal cases and counter claims which have been laid against the former Chief Executive Officer and Chief Financial Officer. Whether any finances could be recovered would be determined by the civil court. The Department had committed to allocating R20 million for the next three years to repair the Market Theatre so that it can be a fully functioning theatre.
Mr Makondo said there is a relationship between the case which Windybrow has logged with the North Gauteng High Court, and the case logged by the Market Theatre to dismiss the two executives. Firstly, the two executives who were dismissed had appealed that decision, and the Committee should not forget that they had won the appeal, so that Windybrow has been ordered to pay the executives’ settlement. If the Market Theatre were now to continue with its case, and lose, this would jeopardise the North Gauteng High Court outcome. He asked the Department whether the DAC had already paid the settlements due to the two executives because the settlement was an indication that indeed their dismissal was unfair.
Dr P Mulder (FF+) asked whether it was fair that the Market Theatre has to pay for the forensic investigation when it had not been part of the case in the beginning. He said that the financial contingency placed upon the Market Theatre by Windybrow executives is unfair.
The Acting Chairperson said that the Committee must be sent the report on the two cases logged by the Market Theatre and by Windybrow. He asked that the Department answer the question asked by Dr Mulder.
Ms Newton said that the forensic report was concluded by the National Treasury (NT), and that information was then handed to the previous Board for implementation. The dismissal of the PanSALB Board has caused delays in the implementation of the recommendations from the NT.
Community Art Centres: Audit of progress and implementation
Mr Ndima reminded the Committee that the DAC had decided to institute a detailed survey on a sample of 87 community art centres, to audit the progress and implementation of the aims and objectives, drawing on the perspectives of Centre managers.
The focus of the research for each of the centres was on the following:
- The core functions of the centre
- Institutional arrangements and governance
- Management and staffing
- Service delivery and programming
- Networks and partnerships
- Strategic issues for the centre
There was also a shorter perception survey of 405 users and ancillary/contract staff at selected centres.
The findings showed that about 250 Community Art Centres across the country employ more than 3 300 people, 58% of these in full-time positions. These Centres involved over 115 000 people on a monthly basis in active participation in the development and making/staging of arts and cultural works. The audience figures collectively are about 3.8 million people annually for arts and cultural work, and most of this is locally produced. The annual turnover is around R390 million, obtained mostly from provincial and local government, for the government Centres, and from public funding agencies and self-generation for the independently managed Centres.
Mr Ndima then produced figures that showed the provincial breakdown of survey respondents, and details such as their locations, infrastructure, programmes and audience details and their institutional arrangements, their main sources of finance and partnerships.
The main challenges were then identified which included;
- Inadequate interface between government investment in infrastructure and a sustainable and resilient approach to the needs, resources and aspirations of local communities
- Difficulties in the institutional arrangements of government centres, that related to effective management, building a sense of community ownership and finding relevant programming
- Difficulties in actively and proactively addressing the development and maintenance of infrastructure
- Finding sufficient resources
- Weak intergovernmental coordination
- Continued disjunct between government centres and those run by independent entities
Various recommendations were made. In regard to the role of government it was suggested that there should be clarity on the roles, models and support systems between all spheres of government. A central vision and policy framework, and a funding framework was needed for the Centres, that would produce new revenue streams to stimulate local arts and programming, along with the right infrastructure. It was clear that in the longer term, dedicated funding would be needed and the sector needed to develop the ability to access it, through the National Lottery Distribution Trust Fund, which did support the goals and objectives of the Centres.
Finally the entity overseeing the resourcing and support of the Centres would have to be properly capacitated with sufficient financial resources also to complete its task.
The DAC recommended
- A national programme for Community Arts Centres development
- A more formalised system for ongoing monitoring and evaluation and impact assessment
- Development of better networks
- Management training, infrastructure development and programme enhancement
The factors that could potentially lead to success were identified as well as the appropriate monitoring and evaluation framework, and the monitoring was to be included in national, provincial and planning frameworks, with requirements for regular reporting.
The DAC noted that the Medium Term Strategic Framework noted that community arts should receive significant attention over the next five years. It was hoped to activate 500 community arts programmes, build 15 Community Arts centres and refurbish another 80. The budget for community arts had been increased over the next three years, both for planning and capital expenditure. The nine existing community arts networks would receive support and would work with the DAC to develop policy. The main focus would be on the rural and township areas. Existing no- profit community arts centres were asked to create annual community programmes, using the existing space, create training and development opportunities for young South Africans, support programming to facilitate nation building and social cohesion, and upgrade facilities.
A call for grant proposals had closed on 6 November. Grant awards were decided by a panel. The Community Arts Programmes for the 2015/16 year were listed.
Key issues identified from the proposals, in summary, focused on the reality of programming in Community Arts Centres, and the costs of operating, programming, maintaining and upgrading. In some provinces, notably Limpopo, Mpumalanga, Free State, North West, Eastern Cape and Northern Cape, there was lack of capacity. In some centres the budgeting process was a “thumb suck” that was quite inadequate, and there was often lack of proper organisation and systems by which to account for funding.
It was noted that provincial departments had been asked to identify existing government run or owned centres that would require refurbishment in the next five years. Provincial grant awards had been made, pending the submission of detailed quotations, for projects to be supported in the coming year. No government applications had been made for refurbishment projects in Mpumalanga, KZN, North West or Western Cape, but 26 applications were received from the other provinces. Again, there was a problem with budgeting which was unrealistic, and the provinces making these submissions would be engaged with and asked to clarify. Meantime, provinces had been asked to continue submitting proposals. The DAC would in all cases do its own assessments of the budgets submitted by the Community Arts Centres.
Ms S Tsoleli (ANC) said the Committee was supposed to be dissolved based on its poor performances. She recommended that the institution needs expertise in the area of finances who is going to turn the organisation around. She also suggested that the Minister of Arts and Culture intervene in the matter of the caretakers of the community. She asked whether the Department had been giving the Community Arts Centres enough support, and she also asked the Department to provide the Committee with their names, and also how it would monitor these Centres to check whether the funding was used for the intended purpose. She noted that there was an outcry from some of these communities over the fact that the Centres and spaces were not being utilised for what they were created to do.
Mr Grootboom said the Minister had allocated funds to the King William Theatre in the Northern Cape for upgrades but the Department has not indicated how far the Theatre is with the upgrades.
The Acting Chairperson welcomed the presentation. He also said that the Department had previously indicated that its main focus would be the people in the rural areas, as well as the community art centres located around or near rural areas. However, the report does not indicate that there had been any developments in the rural areas and there is no mention of rural towns either. He further went on by asking the Board to identify the rural communities that were community art centres were supported.
Ms Newton responded saying the Department can provide the Committee with a list of the community art centres that were audited. Further, there are six listed community art centres in the Free State, and only four were audited, and one of the challenges is being able to identify what a national centre is because the department does not directly support any outreach community art centres. Through the Integrated Development Plan (IDP) programme a host of community art centres were funded via the provincial government. With regards to the monitoring of community art centres, the department works together with the provinces and they receive feedback from the provinces on the progression of these centres. For the purpose of being able to identify what a community art centre is, the department has established that a community art centre should have a multiplicity of functions.
She said that the Board is considering a multi-purpose centre to meet more needs and she promised to provide the Committee with more information and to keep the Committee updated on the developments. The Department has received three proposals from the South African Rhodes Association (SARA) for the alliance in the technical production conference which will be hosting programmes like it did in the previous years. The proposal has been provisionally approved for 2016.
She noted that the international interaction programme is ongoing and the Committee will be updated if any changes occurred. In terms of the Memorandum of Agreement (MOA) for renovations, the Department and the South African Rhodes Association had been at loggerheads with the content of the agreement. The Department had made a commitment to provide R10 million, but would like this money to be put towards a development trust. The SARA had been adamant that the Department should appoint the IDP and a meeting between the Department and the SARA was held on 15 January 2016, with a formal response from the DAC noted on 1 February 2016, but one from SARA still outstanding. The investigation on the National Arts Council (NAC) was being done internally by the department’s BIG auditors, and is expected to be concluded by the end of March. She added that there are continuous discussions between the Department, the NAC and the auditors.
The Chairperson suggested that SARA should be a public entity that will be embedded into the community. He believed that the Department would handle the issues in an appropriate manner.
The meeting was adjourned.
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