Heritage Foundation forensic report; PanSALB legal standing & way forward; Arts and Culture Budgetary Review and Recommendations Report

Meeting report

Appointment of Acting Chairperson

In the absence due to ill health of the Committee’s Chairperson, Ms X Tom (ANC), Members were asked to appoint an Acting Chairperson for the meeting.

Ms S Tsoleli (ANC) nominated Mr J Mahlangu (ANC) for Acting Chairperson.

Mr G Grootboom (DA) second the nomination of Mr Mahlangu.

There were no other nominations, and Mr Mahlangu accepted the nomination for Acting Chairperson.

 

Budget Review and Recommendations Report (BRRR): Adoption

The Acting Chairperson said the first item on the agenda was the BRRR. He asked if there were any matters that the Committee Members would like to raise.

Mr Grootboom said that he did not feel that the 2015 recommendations on page 5 of the Report had been adhered to, or taken into serious consideration. The 2016 recommendations seemed to focus only on matters relating to compliance and key imperatives to oversight. The recommendations that were put forward by the Committee related to issues that the Department had to implement within the last year, and which were also recommended by their internal auditors and the Auditor General (AG). The Department and its entities still had vacant executive positions. The internal auditors had previously reported on Department officials that had been involved in fraud cases, but the Department had never reported these cases to the Committee, or the measures that the department planned on taking against these officials. One of the 2015 BRRR recommendations had been that the Department must assist their entities to comply with Generally Recognised Accounting Practice (GRAP) 103, but the Department had failed to even implement this recommendation. Most of the entities had shown irregular expenditures in 2016, but the recommendations of the BRRR did not indicate any recommendations towards management issues within the entities and the Department.

The Acting Chairperson suggested that Mr Grootboom should perhaps make a recommendation that would be added to the list which was given by the Committee. The 2015 recommendations which had not been achieved by the Department, needed the Committee’s urgent attention. With regards to GRAP 103, he suggested that a meeting should be held between the Committee, National Treasury, the DAC and other Committees. The aim of this meeting would be to strategise on how GRAP 103 would be properly implemented, because this would mean that security would be strengthened at the museums. The expropriation of South Africa’s art was a huge problem, because the art was often sold back to South Africa at a high price. The implementation of GRAP 103 would have to be discussed thoroughly.

Mr Grootboom said one of the important concerns within entities dealt with management issues, so there should be emphasis on the filling of executive vacant positions, the quality of skilled people appointed into management, and taking corrective action against employees charged with financial misconduct.

The Acting Chairperson asked if any other Members wanted to add anything else, or objected to the recommendations.

The Committee was satisfied with the report and the new recommendations, and the BRRR was adopted.

 

South African Heritage Resources Agency (SAHRA): Forensic investigation

Ms Veliswa Baduza, Chief Executive Officer; SAHRA, said when SAHRA presented the draft report on the forensic investigation in August 2015, the Committee had requested that they needed to finalise the whole report and present the findings to the Committee. The final report had been submitted to SAHRA in February 2016 by the Chairperson of the Council. The previous Council’s term of office had come to an end in July 2016, and the new Council was appointed on 1 August 2016.

Ms Catherine Motsisi, Chief Financial Officer; SAHRA, explained the background to the forensic investigation, saying the Agency had appointed Ubuntu Business Advisory and Consulting (UBAC) to conduct an investigation into funds allocated to the Heritage Foundation for the period from 2011 to 2013. The Heritage Foundation was registered as a Section 21 company, and its mandate was to conserve heritage resources, which were an important chapter of the South African history and of special cultural significance to the Afrikaans section of South Africa. Funds totalling R2 250 000 had been transferred to the Heritage Foundation for the restoration, conservation and management of identified burial and memorial sites in terms of a memorandum of understanding (MoU) signed by SAHRA and the Heritage Foundation.

The objectives of the investigation were for UBAC to conduct a review of the MoU entered into between SAHRA and the Heritage Foundation, and to establish how compliance would work; investigate any irregularities identified with regards to the restoration and conservation management of identified burial and memorial sites in terms of the MoU; determine if there were any preferences in respect of the work undertaken by the Heritage Foundation and reconcile; review all payment made to the Heritage Foundation and request and review the statements of income and expenditure for the respective years relating to funds received from SAHRA. In addition, UBAC was asked to request and review the breakdown of expenditure incurred in respect of funds received from SAHRA; identify and investigate any irregularities in terms of the statement of income and expenditure and the breakdown of expenditure as provided by the Heritage Foundation; determine ownership of sites and investigate any irregularities identified and conduct interviews with relevant stakeholders at SAHRA and the Heritage Foundation. 

UBAC found that the former Chief Executive Officer (CEO) of SAHRA, Ms van Damme, had exercised her delegation of authority in concluding the MoU between SAHRA and the Heritage Foundation, as the MoU did not make reference to a stipulated budget as required. The MoU also did not make provision for the duration of the MoU, budgets, project specifications and addendums. The MoU was not concluded in the best interests of SAHRA, as relevant information and clauses were omitted.

The recommendations made were that in future, all contacts entered into between SAHRA and the respective parties should be examined by SAHRA’s internal legal department or an extended legal service provider, to ensure that all the interests of SAHRA were protected. This recommendation had already been implemented, and all of SAHRA’s contracts were examined by their legal unit. SAHRA also ensured strict compliance with the governance and delegation of authority requirements in terms of the Public Finance Management Act (PFMA). The financial delegations were approved in 2013, and implemented accordingly.

The forensic investigation concluded that the former CEO was authorised to conclude the MoU entered into between SAHRA and the Heritage Foundation. The omission by SAHRA to ensure that the MoU included specific provisions with regards to budgets, durations, projects and addendums had disadvantaged SAHRA’s rights to dispute any of the expenditures incurred by the Heritage Foundation. The Heritage Foundation had latitude to act at its own discretion and had unconditional authority over the MoU, and SAHRA had accepted liability for the MoU that was entered into between the respective parties.

SAHRA had made three different payments to the Heritage Foundation. On 31 May 2011, it made a payment of R750 000, which was authorised by Ms Van Damme. In November 2012, it made a payment of R750 000, which was authorised by Ms Mmabatho Ramagoshi, and in May 2013 there was a further payment of R750 000, which was also authorised by Ms Ramagoshi. The investigation found that there was no evidence which suggested that there were any irregularities with payments made by SAHRA to the Heritage Foundation, and all payments were duly authorised by the former CEO and the former Acting CEO, Ms Ramagoshi. The payments were in line with the provisions of the MoU.

The audited financial income statements of the Heritage Foundation for the 2011/12, 2012/2013 and 2013/2014 financial years showed that it received R2 250 000 in cash towards the projects identified for implementation. The total expenditure was R2 265 327, which included procurement, vehicles, vehicle maintenance and running costs, restoration and maintenance, salaries and remuneration, and marketing and publications.

The SAHRA paid R2 250 000 to the Heritage Foundation for the restoration, conservation and management of identified burial and memorial sites. Approximately 90% of the expenditure incurred was for operational costs, and 10% was for expenditure incurred for the restoration, maintenance and material. The expenditure incurred by the Heritage Foundation could not be disputed as SAHRA, as the custodian, had not ensured an effective management contract in respect of the MoU entered into between the parties. SAHRA had the obligation to provide continuous monitoring of the utilisation of funds by the Heritage Foundation, to determine the value for money. The summary of the expenditure provided by the Heritage Foundation had been accepted as a true reflection of the expenditure incurred for the years. There was also no evidence which suggested that SAHRA had suffered any financial prejudice by entering into the MoU between the respective parties as proof of work that was undertaken by the Heritage Foundation was made available to SAHRA.

Ms Motsisi said it was was recommended that with any future projects and expenditure monitoring, SAHRA should appoint a suitably qualified project manager to manage the implementation of the financial resources of SAHRA. She confirmed that Project Management had been identified as a skills gap that was currently provided for in their training plan and some staff members had undergone training in project management. It was also recommended that the delegation of authority framework must ensure that the designated official was held accountable for the administration and management of the project delegated. She added that the delegation of authority would be reviewed to incorporate this recommendation.

The review of the “Black” concentration camps found that the former acting CEO was of the view that no “Black” concentration camps had been identified when the MoU was entered into between the respective parties, and that the Heritage Foundation had been acting contrary to paragraph 3.1 of the MoU. Paragraph 3.1 of the MoU stated that “the aim of this document was to bring an understanding of the agreement for the conservation and management of mutually agreed white and black concentration camps, prisoner of war graves abroad, graves and cemeteries, including the Burgher graves.” Nowhere in the MoU was there any mention of any site or cemetery by name. In a written submission made to SAHRA, Mr GN Opperman had stated that “it was virtually impossible to determine the exact location of the vast majority of the black concentration camps”.

This had prompted the Heritage Foundation to embark on exhaustive research into the subject, the results of which had been given to SAHRA, ex gratia after the decision was announced not to extend the MoU beyond 31 March 2014. The Heritage Foundation, in the course of its research, had succeeded in pinpointing the exact locations of some of the black concentration camps’ graves and had effected repairs at some of the sites. The sites which they had been able to pinpoint were: Doornbult, Orange River Station in the Northern Cape, Krugersdorp in Gauteng, Balmoral, Allen in the Free State, Aliwal North in the Eastern Cape, Heidelberg in Gauteng and Klerksdorp in North West.

It was recommended that the Heritage Foundation take steps to address the “Black” concentration camps, cemeteries and graves. The expenditure incurred may be regarded as minimal, compared to that incurred for the “White” camps and cemeteries. The SAHRA officials who were responsible for the management of the project should have ensured that the Heritage Foundation was assisted with the process of identifying the black camps and implemented a plan of action to address this matter. SAHRA should also accept responsibility, as continuous co-operation and monitoring with the Heritage Foundation would have produced results to the benefit of the restoration and preservation of the “black” camps, cemeteries and graves. It was also recommended that no corrective action should be taken against the former CEO, Acting CEO and former Manager: Burial Grounds and Graves (BGG), Mr Troy Phili, as they were no longer in the employment of SAHRA.

Ms Motsisi concluded by saying that while some of the internal control recommendations had already been addressed, they were required by the National Heritage Resources Act (NHRA) to continue with the rehabilitation and maintenance of the concentration camps, cemeteries and graves. They had already embarked on a process of conducting assessments at some of the camps. To date, they had covered four provinces: North West, Mpumalanga, Gauteng and Free State. Once the assessments were complete, a comprehensive condition assessment would be done, with recommendations for intervention on each site. The challenge with the black concentration camps was largely due to their locations, because they were not marked, fenced or historically preserved. Many were hard to identify unless some marker was put up. It was suspected that some lay in places that had become farms, whereas white concentration camps or memorials were generally located close to towns.

SAHRA was working on a strategy to implement that would help with sustaining the camps, cemeteries and graves. They also saw this as an opportunity for job creation, and planned on working with the private sector, the Department of Defence and Military Veterans and the Provincial Heritage Resources Authorities (PHRAs).

Discussion

Mr Grootboom said the report contained contradictions.The findings of the reported indicate that there had been no irregular expenditure found on the part of Ms Van Damme and Ms Ramagoshi, but the report also indicated that no corrective action may be taken against the two former employees. Also, the recommendations suggested that no criminal cases should be opened against the two former employees because they were no longer employees of the SAHRA. Could it therefore be concluded that when an employee no longer worked for the entity, that person could not be charged with a criminal offence?

Ms Tsoleli said she would have liked to have received a copy of the MoU with the report, because it was difficult to make any sort of conclusions or ask questions without having all the important documents. It seems that the Heritage Foundation had been at an advantage in the MoU between the two parties. SAHRA should have consulted with its legal unit to ensure that the clauses and provisions would favour them, and not necessarily the Heritage Foundation. The MoU should have been managed by people who had the right skills and knowledge to handle such a legal process. She asked SAHRA to provide the Committee with a copy of the structure of the MoU that had been signed between the two parties. She added that she disagreed that the former CEO was not liable for the payments that had been made to the Heritage Foundation.

Dr P Mulder (FF+) said that the MoU was very vague and had been badly written. It could have been that the terms and provisions used in the MoU were not clear enough, and hence SAHRA had been faced with all these financial challenges.

The Acting Chairperson said the Chairperson of SAHRA and the DAC should take note of the Committee’s concerns. SAHRA should give the Committee a brief overview of the MoU so that it could understand what kind of agreement was entered into between the two parties. The MoU should also be accompanied by financial statements that explained how much money was spent on the investigation, with a brief introduction about the Heritage Foundation and what they do.

He made it clear to Mr Grootboom and the Committee that when one was no longer employed by an organisation, it did not mean that one could not open a criminal case against them. He said that Mr Grootboom should not mislead Parliament with his statement, because the laws of the country, especially the PFMA in this regard, gave effect to criminal charges being opened against a former employee who had defrauded the government.

SAHRA’s pursuit of finding the graves of black people who died during the wars had not been done sufficiently. The Department needed to give this issue serious attention, as it had also been raised by the Committee in 2014. Black concentration camps should be protected, because if it seemed as if the Department was ignoring them it could lead to a revolt, and would be seen as a racist act against black people. As such, it was important that SAHRA recognised that there were emotional attachments to these black concentration camps, cemeteries and graves.

Dr Mulder said the Anglo-Boer War Museum in Bloemfontein had done a lot of research and had also released publications on black concentration camps. He suggested to SAHRA that they should perhaps work with the museum to try and identify more black concentration camps.

Mr Grootboom said the MoU had been badly written. Before the MoU was entered into, SAHRA had indicated that there were no black concentration camps, but the problem was that they made this statement before they could start investigations to try to find the black concentration camps. This was also another contradiction. The recommendation that implied that former employees could not be legally charged should be taken out because it was incorrect, and should not be included in the report.

Ms Tsoleli said she knew that the use of this term was unparliamentarily, but the last recommendation that Mr Grootboom was referring to was ‘mischievous’. She also agreed with Dr Mulder that the Anglo-Boer War Museum was doing a good job with regard to managing the museum and documenting both black and white concentration camps. The museum was attracting more visitors in Bloemfontein; the personnel of the museum were marketing and managing the place very well. In fact, the museum should be used as a benchmark for the Agency.

Ms Baduza responded that the museum in Bloemfontein had proved that heritage played a significant role in social cohesion. She said that SAHRA had to work closely with the Department so that they complied with their mandate. The presentation had been taken directly from the forensic investigation report that had been submitted to them by UBAC. The MoU’s terms and provisions did not allow for legal action to be taken against the two former employees. If the partnership was a Memorandum of Agreement (MoA), with clear time frames and deliverables, then there would have been great financial implications for the former employees and the Heritage Foundation. The MoU was very broad and hence it needed to be broken down and explained to the Committee.

The Acting Chairperson interrupted Ms Baduza, and said that if both the former CEO and Acting CEO had not done anything wrong, then the recommendation about not taking legal action against them should not have formed part of the report. He agreed with Mr Grootboom that the statement itself was incorrect, and it should not have appeared in the report.

Ms Baduza replied that the report was taken directly from UBAC’s forensic investigation.

The Acting Chairperson responded that when the report was given to SAHRA, it automatically became their report. SAHRA was supposed to make their own conclusions as to how they were going to deal with the recommendations from UBAC. It was SAHRA’s responsibility to conclude what steps should be taken against the former employees, using the forensic investigation from UBAC. The report could not be submitted to Parliament because there were many contradictions which had to be cleared.

Ms Baduza said a copy of the MoU would be sent to the Committee. The legal unit had been engaged to assist SAHRA with future MoU’s and to ensure that this never happened again.

Ms Motsisi said the forensic investigation had been commissioned because a disclaimer, that black concentration camps were not being properly managed, had been received from the Auditor General (AG). The disclaimer had also come to the attention of the Committee. Before the disclaimer, SAHRA had entered into an MoU with the Heritage Foundation, which was responsible for the restoration, conservation, management and identification of black concentration camps, memorials and graves. During the operation, it was found that the Heritage Foundation had not done an effective job in restoring and identifying these black concentration camps, compared to the white concentration camps, memorials and graves, many of which were not managed properly. Therefore, a forensic investigation had been commissioned to enquire where the funds that were allocated to the Heritage Foundation had gone to. In addition, attention had then automatically been directed towards the structure of the MoU. The MoU had then become the focal point of the investigation because it was believed that the root of the problems stemmed from its structure.

Mr Dumisani Sibayi, Heritage Resource Manager: SAHRA, explained that the Heritage Foundation was a conservation body that focused on conserving heritage. Due to the expertise and skills that were needed for this project, SAHRA had decided to work with the Heritage Foundation because they had the necessary skills to effectively manage the conservation project. The Heritage Foundation was based in Pretoria at the Voortrekker Monument.

The Acting Chairperson made it clear that the investigation had been commissioned because it was found that black concentration camps, memorials and graves were not being preserved and managed effectively. SAHRA claimed that the Heritage Foundation were experts in preserving heritage, but the Heritage Foundation had failed to preserve the black concentration camps. Nonetheless, the forensic investigation had not focused on the scope that had been commissioned. He was very disappointed with the findings of the investigation and the report that had been presented by SAHRA. SAHRA had failed to follow the recommendations that had been made by the Committee. The outsourcing done by entities was becoming a problem, because they all came with the same problems and need for resolution.

Ms Tsoleli said the Committee must receive all the documentations of the investigation, as well as the MoU between the two parties involved. She made it clear that all concentration camps should be restored and preserved efficiently, no matter what the colour of the camp was. A lot of people had died during the wars, and it did not matter what the race of the person. This sort of information should be documented. A disclaimer was usually submitted by the AG when there was mismanagement of finances, but the report claimed that the former two employees should not be held liable for the funds that were provided to the Heritage Foundation.

The Acting Chairperson repeated that he was not happy with the presentation. SAHRA must compile another report to present to the Committee, and the report should be accompanied with copies of the MoU and any necessary documents that were important.

Ms Motsisi told the Committee that the investigation into the lack of preservation of black concentration camps had been commissioned as a result of the findings in the investigation of the MoU. The disclaimer was available if the Committee wanted to see it. Parliament had not previously asked for the disclaimer, so SAHRA had never submitted a copy to the Committee. The reason why the white concentration camps were easily identifiable was due to the fact that they had always been managed and preserved. Before the Agency was established, a lot of white concentration camps were being preserved by community members, and when the time came to register them they were easy to find and identify. The black concentration camps were not being preserved and restored by anyone before SAHRA was established, so the restoration of these camps had had to start at the grassroots level.

The Acting Chairperson wanted to know what SAHRA intended doing differently -- how were they planning on filling the vacant positions, and would they continue to work with the Heritage Foundation?

Dr Mulder commented that the preservation of concentration camps was a complex issue that dated back to the war between the Afrikaners and the British. The Afrikaners had been prohibited from restoring their concentration camps, so many of the grave sites had been lost and could not be retrieved again. This could also perhaps be the same for the black concentration camps, as black people did not have the resources to preserve these graves. A lot of history played a role in the issue of the preservation of the grave sites.

Prof Susan Bouillon, Chairperson of Council, SAHRA, said she had taken note of all the Committee’s comments. She knew that proper leadership was needed at SAHRA. She asked the Committee to give them a month to compile another report that would contain all the information that the Committee had asked for.

The Acting Chairperson granted SAHRA the opportunity to compile another report and present it to the Committee. He concluded by saying that the other matters which were on the agenda would be discussed at the next meeting, because Parliament’s legal team had been given time to compare and link their findings on the PanSALB report.

The meeting was adjourned.