Estimates of National Expenditure: briefing by National Treasury

Sports, Arts and Culture

18 March 2003
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Meeting report

PORTFOLIO COMMITTEE: SPORTS AND RECREATION

SPORTS AND RECREATION PORTFOLIO COMMITTEE
18 March 2003
ESTIMATES OF NATIONAL EXPENDITURE: BRIEFING BY NATIONAL TREASURY

Chairperson: Ms R Bhengu (ANC)

Documents handed out:
Department presentation on Budget process
Department Expenditure Estimates
Department Programme purpose and measurable objectives (Appendix 1)
Department Strategic overview and key policy developments: 1999/00 - 2005/06 (Appendix 2)

SUMMARY
National Treasury addressed the Committee on the Estimates of National Expenditure (ENE). The presentation served as a set of guidelines for the format of the budget and as a means of formulating questions to be posed to the Department. It dealt with new features like the legally required measurable objective and the compliance with the IMF classification.

The Committee was also briefed by a researcher from the Research Unit of Parliament, who presented a list of questions and concerns to be raised after studying the budget itself. Issues raised included increases in spending in certain areas and consideration of factors pertaining to women in sport. The recreation facet of Sports and Recreation was touched on and whether equal resources and activities were dedicated to it. Mr R Pieterse then reported to the Committee on a study tour to the Western Cape.

Briefing by National Treasury
Mr Cole noted that important information around estimates of national expenditure (ENE) needed to be demystified. He referred to policy development and spending priorities in particular and whether or not they could be deemed affordable. He explained that ENE combined the forecast goals with resources available to achieve those goals. Mr Cole said that ENE was an outcome of the budget process with the two outer years as the starting point. Budget submissions were made with the intent of increasing the baseline. He added that ENE was for National Departments' developments and performances over the three-year spending plan.

Mr Cole said that National Treasury provides the guidelines as to the format and reforms to budgets, especially concerning increases to the baseline. He explained that that the budget process was essentially to accommodate the goals in terms of how much money is available to do so. Medium Term Expenditure Framework approval is then sought from Cabinet. The macro economic framework and fiscal policy allowed an equitable division of funds between local, provincial and national government. This was termed a vertical division. A horizontal division was explained as that based on spending priorities and departmental priorities.

Mr Cole said that a recent reform was the addition of one measurable objective (MO) per programme, as required by law. This would outline quantified results, achievements and impacts on the community and the clients of the Department. He referred to the Department of Health's example in the handout as one which clearly states its MO.

A more descriptive output information table was required for the setting of more realistic targets. Departments would be required by legislation to report back on achieved outputs. Mr Cole recommended more selective reporting on Public Entities with regard to income, expenditure and other activities contributing to the work of the Department. He referred to the New Infrastructure Expenditure Table, which would isolate real infrastructure projects that would benefit communities. These new projects would then be listed on the said Table.

Mr Cole continued to explain the ENE outline which includes: accountability information, the Department aim, the programme purpose and measurable objective (MO), a strategic overview, expenditure estimates and trends and Department receipts. He explained that the programme purpose outlined why the Department exists while the strategic overview presented key policies and the impacts thereof in future ventures. He explained that the income generated differed in each Department. As far as programmes are concerned, Mr Cole said that each was to be divided into sub-programmes with a description and a MO serving as an action statement.

He referred to the MO as outlined in Programme Two of the Department of Sport and Recreation. He said that it needed to be improved upon because it did not refer to the impact on communities, rather reading like a purpose. He said that National Treasury aimed to develop partnerships with the Committees and provide the necessary technical support to Departments.

Mr Cole referred to expenditure estimates and explained that they were divided into the various programmes and then economic classifications. He added that 2004 would see compliance with the International Monetary Fund's (IMF) mode of classification in order to make comparison with other countries easier. He described this as an important development as standard items of expenditure would fall away. He recommended that the Committee convene a meeting at which these changes would be further explained. Mr Cole continued by saying that expenditure trends would exhibit significant changes in the budget and that these changes should be explained. He made an example of the increase in the expenditure on administration between years 2000 and 2003. Service delivery objectives and indicators were explained as those which compare the outputs of the previous year to those of the current year. Results need to be seen as these outputs need to be monitored. Mr Cole said that outputs must relate to and aid in the achievement of the MO.

Mr Cole then referred to the Checklist of questions for the 2003 ENE. He reiterated that descriptions of programmes should be clear and that MO's should relate to the programme purpose. The impact on peoples' lives remained very important because often there is no regard for the impacts made at different levels of government. He concluded by saying that the presentation would serve as a guide for interrogation.

Discussion
Mr R Pieterse (ANC) commented on the elevated wording of the text in the example used by Mr Cole. He asked about the MO of administration, noting that this seemed to be a difficult area.

Mr Cole agreed with his concerns about the verbose text. Since these documents were for Parliament and the public they should be simpler. He answered the question and said that it was assumed that the administrative functions of each Department were uniform. He added that the Minister's Office and that of the Director-general were also included in administration, and so some key functions could have been overlooked. He said that an area of reform for the 2004 ENE would include output information for Programme One.

Mr Pieterse asked how the numbers of non-competitive athletes could be measured as opposed to competitive athletes.

Mr Cole said that it was indeed easier to measure at levels with clear input. Measurement would then be based on maintenance plans, annual events at facilities and awareness programmes, particularly those centred around drugs in sports. The measuring itself would then reflect the outcomes and whether there had been schooling and development involved.

The Chair thanked Mr Cole for his input and invited Dr F Khan: Researcher, Parliament Research Unit, to address the Committee with reference to possible questions arising from the budget.

Briefing by Dr Khan
Dr Khan explained that she had summarised the strategic overview and key policy developments and then drafted some general questions. Areas that elicited questions were those around expenditure trends, evaluation procedures, Sport and Recreation policy, equitable access and needs of the rural poor. She touched on corporate services and asked why there has been such a sharp increase. She noted that most activity was dedicated to sport and asked if activities were equitably divided to cover recreation as well. She raised a question about the success and efficacy of transformation and asked about projects being directly funded and implemented by the Department and indirectly, meaning only funded by the Department. She also said that the reasons for not meeting targets in terms of funding and policy should be investigated. Dr Khan referred to Programme Three and said that factors pertaining to women participating in sport were not considered in the building of sports facilities. She said that queries also arose around issues of upgraded or new sports facilities and job creation.

Discussion
Mr A Mlangeni asked for Dr Khan's definition of recreation.

Dr Khan said recreation would include non-competitive and recreational activities for teams of individuals on an informal basis.

Mr Mlangeni asked whether it was not the responsibility of the Parks Board to provide for recreation.

Dr Khan explained that the Department of Sport and Recreation was empowered to grant transfers to assist with recreational facilities.

Mr P Swart (DP) said that the Department of Sport and Recreation could contribute as far as informal sport activity was concerned and asked Dr Khan for a broader definition of recreation.

Dr Khan agreed and explained that any informal activity would be termed recreation. Organised competitive play would be regarded as sport.

Mr Mlangeni asked for clarification of the term corporate services.

Mr Cole volunteered to answer and explained that corporate services was another term for administration which involved human resource management and development.

Study Tour report
The Chair requested that Mr Pieterse present the Study Tour Report to the meeting.

Mr Pieterse said that he was made even more aware of the discrepancies between the fortunate and the unfortunate. Vandalism was rampant in the areas he visited. Schools and houses were built without facilities and children were made to play in the streets amid the traffic. He mentioned that areas in Khayelitsha and Manenberg he had visited should have their communities mobilised to adopt facilities. The Stepping Stones project had been put into place whereby volunteers from the communities coached and trained school children. A major concern raised by Mr Pieterse was that municipal services were not being rendered and that equipment at their disposal was not utilised optimally.

Mr Mlangeni was not clear on the application of the National Policy on Sport and Recreation and its role in bringing transformation to the sport.

The Chair explained that each province was responsible for transformation and so contributed to the country-wide transformation of sport.

Mr Pieterse mentioned the political instability in the Western Cape that had debilitating effect on many things.

The Chair suggested that a meeting be dedicated exclusively to study tour reports.

Mr Swart questioned the figure of 45% of pupils who preferred soccer to other sports and could not be accommodated in their school. He had experienced a similar situation.

The Chair expressed an interest in talking to those who conducted the study tours to report general observations. It was necessary to look at capacity in terms of what needs to be addressed and what the relation is to policies and programmes.

The meeting was adjourned.

Appendix 1:
Programme purpose and measurable objectives

Programme 1: Administration
Purpose:
Conduct the overall management of Sport and Recreation South Africa.

Programme 2: Funding, Policy and Liaison
Purpose:
Increase participation in sport and recreation as well as improving the performance of South Africans in sport, in order to enhance quality of life.
Measurable objective: To establish a policy framework, undertake projects and to support, fund and monitor the activities of associated organisations, and conclude and service government-to-government agreements in sport and recreation.

Programme 3: Building for Sport and Recreation
Purpose: Enhance access to and performance in sport and recreation activities, empower community sport and recreation organisations, and create permanent and temporary jobs to fight poverty and improve quality of life through the provision of sport and recreation facilities.
Measurable objective: To facilitate and fund the upgrading of existing and the building of new sport and recreation facilities in partnership with provinces, municipalities and communities, especially in disadvantaged areas.

Appendix 2:
Strategic overview and key policy developments: 1999/00 - 2005/06

Sport and Recreation South Africa has focused on the transformation of sport and recreation in the country, aiming to ensure greater access and enhance representivity at all levels of participation. A Sports Transformation Charter and greater co-operation with national federations are envisaged as a continuation of this strategy. Improving the performance of South Africans in competitive sport is also a high priority.

Institutional framework

In recent years significant effort went into stabilising the institutional framework for monitoring and regulating sport and recreation. The South African Sports Commission (SASC), a public entity, was established in 2000, and the co-existence of the Commission and Sport and Recreation South Africa was regulated through legislation. Agreement has also been reached with national education authorities that while the national Department of Education will be responsible for curricular aspects of sport and recreation, Sport and Recreation South Africa will be responsible for competitive and representative school sport. The drafting of legislative frameworks for this, and communication and negotiation with provinces, will take this process further.

Funding and monitoring

Funding and monitoring of associated institutions have progressed, with the publication of policy early in 2002. Monitoring the performance of organisations has also improved, building on the requirements and approach of the Public Finance Management Act (1 of 1999) (PFMA). The funding strategy has been aligned more closely to the two key objectives of Sport and Recreation South Africa, namely increasing participation and improving performance. This could mean larger subsidies to a smaller number of organisations.


Changes in the funding strategy resulted partly from the 2002 report of a task team appointed by the Minister to investigate the performance of South African athletes and teams, especially at the international level. In addition to recommendations about focusing funding on areas with the most potential, continued fragmentation of governance in the sector was raised as a key concern. While these recommendations are being considered, the work of the task team will be extended to the issue of mass participation. Together, these investigations will underpin the new Plan for Sport in South Africa, which will constitute the basis for a White Paper.


School sport

Improving access and representivity requires the popularisation of sport and recreation amongst the youth. School sport is a primary component of such an initiative. Further progress on the division of responsibilities for school sport is therefore critical. In addition, increases to baseline allocations over the medium term will allow Sport and Recreation South Africa to make a greater investment in school, junior and tertiary sport. Sport and Recreation South Africa is also developing policies on equitable access for youth, people with disabilities and women.


Facilities

Access and participation is also being enhanced through a facility-building and upgrading project through local and provincial governments. Funding and support comes from Sport and Recreation South Africa, while provincial and local governments implement projects. Facilities belong to local authorities. Building on an earlier Reconstruction and Development Programme project, a large number of facilities have already been constructed or upgraded, creating jobs and empowerment opportunities, in addition to the increased access to sporting opportunities.


Sports tourism

The economic potential of the sport and recreation sector for the country is significant. Sport and Recreation South Africa, together with the Department of Environmental Affairs and Tourism, will launch a drive to increase sports tourism in and to South Africa. Components of the strategy will include international marketing of local events, clear policy and processes around bidding for international events, support for national federations to bid for the hosting of major international events and support to sportspersons. In the area of international relations, there will be a greater emphasis on exchange programmes that will assist with capacity building in other African countries.

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