Department of Sport and Recreation on its Annual Report 2015/16

Meeting report

The meeting had a brief session of quietude for prayer and meditation.

The Chairperson announced with concern that both the Minister and Deputy Minister had tendered their apologies because they were unable to attend this meeting. It was known by this Portfolio Committee that the Minister would always be held up on a Wednesday because it was a day for Cabinet. However, the Committee had hoped that the Deputy Minister would have been able to attend in case there were political questions that the Committee needed answers about. Both the Minister and Deputy Minister had taken ill.

Ms P Samka-Mququ (ANC, Eastern Cape) made an input in isiXhosa

Ms T Mampuru (ANC, Limpopo) said it seemed that this was becoming a trend that this Committee was handled in this manner. It meant that the Department was not ready to give what was due to the Committee in order to assist and finalise matters. If it were up to her she would say that they should go back until the Minister and Deputy Minister were ready to face this Committee.

Mrs T Mpambo-Sibhukwana (ANC, Western Cape) added that this Committee was feeling undermined and under-estimated. In addition to this the presentation was only sent that morning, which was a huge problem because there was not much time to read the report.    

The Chairperson asked when the report was sent and was told that it had been sent the day before. There was therefore a communication problem prevalent because not all Members had received the report timeously.

The Chairperson shared the concerns of Members and said it appeared that when it was the NCOP then the Executive Authority were not necessarily available. She was not sure if this was correct but it just seemed that there was that kind of laxity when it came to the NCOP. A letter would be sent to the Ministerial Committee about this issue.

Ms L Dlamini (ANC, Mpumalanga) said she heard what was being said but this was not the first meeting.

Mr D Stock (ANC, Northern Cape) said that he was sympathetic to the issue of the Minister and Deputy Minister not being here, but given that the Department was present they should be engaged and in if there were any questions that the DG and his team were unable to answer then a letter should be written to the Deputy Minister about this.

Department Sport and Recreation on its 2015/16 Annual Report

Mr Alec Moemi, Director-General: Department of Sport and Recreation, said the concerns from the Committee would be communicated to the Deputy Minister and Minister, and that the Department did take the work of Committee very seriously. The Office of the Auditor-General (AG) had verified the report being presented. The Department had received an unqualified opinion with no findings. The Department had achieved 79% of all planned targets and this had been translated into a clean audit opinion. The Auditor-General said that this Department was a very well run Department.

The targets not achieved were in two Programmes, that of Sport Support and Infrastructure Support. The targets that were not achieved happened within an environment characterised by among other things:

• The implementation of School Sport;
• Legislation; and
• Inadequate funding

Mr Lesedi Mere, Chief Financial Officer (CFO) reiterated the fact that the Department had maintained a clean audit; and said that it was able to spend 99% of the budget. Added to the achievements was a reduction of the Auditor-General (AG) findings and the improvement on payment of suppliers within 30 days.

The only challenge was that there were still some gaps in the Departmental Internal Control Systems, even though a lot of improvement had been experienced. (See 2015- 2016 Annual Report and Financial Statements)

Discussion

Mr D Stock asked for more information about the serious concern about the filling of all funded posts. He also asked the DG to elaborate on the issue of gender transformation at senior management level. 

Ms Dlamini said more women should be represented in the Department.

Mr Moemi replied that he did not know how the impression was created that males dominated the Department. It had very competent women in senior positions. It had only one DDG who was female. There were also females as Chief Directors and Directors.

Mr Stock said in the previous report the DG also spoke about the implementation of school sports at the level of different schools as part of the curriculum that was also a challenge. What was also in last year’s report was that the Department was going to advertise a Sports Director position for Labour Relations, and a Director of School Sports. The Department had indicated that between the months of March and April 2016 that position would be filled. He asked if the DG could talk about this.

Mr Moemi replied that the Director of School Sports’ vacancy was finally filled. This was a painful process because after the person was interviewed the Department of Public Service and Administration (DPSA) guidelines stated that the person had to undergo competency tests and this took forever.

Mr C Hattingh (DA, North-West) said the emphasis of matter referred to by the AG was about the payment of debtors within 30 days. This would have been R10.974 million if paid. R9.817 would have constituted unauthorised expenditure. He asked if this had been addressed in terms of an internal shift in payment.

Mr Mere replied that there were programmes undertaken in March and budgeted for in April. There were always those overlaps for programmes undertaken in March but paid for in April. But some invoices had to be verified before making payment. It was true that if the Department made the payments it would have over spent. One had to have this balance at any given time. The issue for the Department was that it should settle invoices that were over 30 days. The AG did caution the Department and it was noted. Most of those invoices were for services rendered in March.

Mr Hattingh referred to payment to sports bodies and national federations and so forth; regarding money paid to for example gold medallists and other winners, where was the money coming from how long did this take to get paid and were there any – in the year under review were there any promised monies that were not paid as yet.

Mr Moemi replied that there was an incentive programme from the Department that had a policy that indicated what it had to pay, and for what type of achievements. This policy had been verified and budgeted for in the Winning Nation Programme, for which the necessary funding was provided. Here was the possibility of over budgeting if the athletes did not achieve, or under budget in the sense that more medals were achieved than anticipated. That was why SA law, the PFMA - provided for virements, as long as they were not above the required 8%. If one had over budgeted, then money could be sent to areas where it was required the most.

Mr Hattingh asked if the Committee would get the two entities’ Annual Reports because he had not seen it. He asked what was the financial commitment or the support offered to RADA and the CDA.

Mr Moemi replied that RADA was the Regional Anti-doping Agency. CDA was the Central Drug Authority. Without South Africa (SA) the regional agency would collapse. They were fully dependent on the money SA paid in subscriptions. It worked in the following way: countries paid pro rata based on their GDP. Cabinet took a decision that SA should pay on behalf of other countries that were unable to pay. This was a political decision taken on request from the African Union (AU). If athletes did not take the test they could not compete. SA was paying on behalf of the entire African continent. SA provides technical and financial support. SA was involved in the CDA as a member and expected to contribute in terms of programming to look at using sport as a tool against substance abuse and as a tool to educate society in this regard.

A Committee Member asked about the BRICS Games.

Mr Moemi replied that there was final agreement on football. The Russians wanted a senior competition. South Africa, Brazil and India agreed that such a tournament would be an additional burden and would not help in any way, but if there was a junior tournament it would work better. Netball was not popular in India, but they were committed to working on it to bring more women into the games.

Ms T Mampuru (ANC, Limpopo) said she had not seen any recreational centres or facilities in Limpopo. The Department had to look into how to help communities in rural areas in sport. Upcoming sports people had to be assisted and guided as to how to achieve this as provinces.

Mr Moemi replied that the Department had been previously criticised that it was found in urban areas but not found in rural areas. In the year under review the Department launched the Rural Sport Improvement Programme. This programme was being rolled out. This was in 60 royal households across eight provinces. On 25 September, this year the Minister and himself went to see 60 villages competing in the elimination of the district and the national tournament would be played in Umtata. This programme was growing and the number of rural households would be increased, the Department gave them money and kits to run local leagues and teams.

Mr Moemi answered further that this Department according to the Constitution did not have the mandate for sport facilities. Municipalities and provinces had to deal with this. Provinces were given funds including basic municipal clusters and ward-based facilities. The Department was caught in a situation where it was expected to provide sport facilities. Its budget was only R10 million, which was only to test new models not for a roll out. The roll out money was with the Municipal Infrastructure Grant (MIG). The 15% of MIG was ring-fenced for the component for delivery of sport facilities and if truth was told the municipalities were not using that money for the purposes of delivering sport facilities. If the municipalities were not using the 15% - they should account as to why they were not building sport facilities.

Ms Mampuru asked how provincial allocations worked.

Mr Mere replied that this meant that the money was transferred to provinces that would spend the money further. Some money was not spent, R8 million, so they requested that the money be rolled over into the next financial year. It was not the Department’s decision alone. It would make a recommendation to National Treasury who would agree or approve those rollovers. But that money was allocated for particular targets that had to be achieved through provinces

Mr Moemi replied that the issue of provincial allocations had been responded to but the formula was clearly biased to smaller provinces. This was with the consensus with National Treasury and all the nine provinces. If this was not done sport would only be played in KwaZulu-Natal, the Western Cape and Gauteng. The Department took the entire grant of R533 million and then started with a baseline of R20 million for each province. The remainder of the budget and the equitable share formula was applied to the remainder and gave all the provinces the remaining money. After that 1% was deducted from Gauteng budget and KwaZulu-Natal budget and this was given to the Northern Cape.

Ms Mampuru said that with the escalation of prices of uniforms the Department of Social Development had identified co-operatives that made these uniforms. She asked if the Department was encouraging and exploring this.

Mr Moemi replied that this was something that the Department could explore. It was known that the Department of Social Development was doing school uniforms, not necessarily sport attire. For sport like cricket it would be a tall order for co-operatives to do. The Department would explore this option further.

The Chairperson asked how the situation could be explained that the Department had not completed all its targets but the budget was almost exhausted budget. 

Mr Mere replied regarding the issue around the correlation between budget and performance: there were targets that the Department would have partially achieved; the reality was that money would have been spent in that particular programme. The issue in the end was about reporting. The AG would say not achieved the target but money had been spent. Not a perfect situation. The difference should not be that much, he agreed.  Provinces were spoken to and teams sent so that there was awareness about all requirements, what the AG requires, could be met. It should not be such a disjuncture between budget and performance.

Ms P Samka-Mququ said clean audit on performance and financial information, but when one went to targets not achieved. She asked for clarity about clean audit versus targets not achieved re Adult Basic Education and Training (ABET).

Mr Moemi referred Members to the AG Report. There was no contradiction between the two. The Clean audit was both for Performance Information and Financial Management.

Ms P Dlamini said it might be easy to get a clean audit but difficult to maintain it. She asked if there were 37 targets or 34 targets.

Mr Moemi replied that the 34 targets were linked to money; 3 targets were not linked to money. The 37 and 34 were used interchangeably, but strictly speaking there were 34 targets because financial inputs were linked here but because non-financial targets were also in the Annual Performance Plan (APP) they had to be counted.

Ms Dlamini asked when it was said that the Department achieved 79% of the targets, were the reporting standards used?

Mr Moemi replied that the reporting standard was exactly as was prescribed by the National Treasury’s framework. When 79% was said, it meant that 79% was fully achieved or exceeded.

Ms Dlamini asked if sport was only for young people.  Were people who did not have degrees considered?

Mr Moemi said this was something that should be considered but he was not sure how it would work in the Department. The reason was that many of those people were employed on level 2 and 3 and up to level 4 in the public service like cleaners and so forth. In this Department, it did not have levels 2,3 and 4; it started with level 5 as cleaning functions were all outsourced.

Mr Moemi replied further that a budget was provided as the CFO had illustrated. The Department’s policy was simple: a staff member was definitely allowed to study. The Department took the personal development plans of each employer and training was offered on that basis. The Department first assessed how many employees required similar training programmes and hired in-house trainers, where there were instances where only two or three persons required training, they were then sent outside for training.

Ms Dlamini asked about the issue of identity documents in the Free state and Mpumalanga.

Mr Moemi said on the issue of identity documents the Committee would be given the information. It was during the March championship where all the children’s – unfortunately majority white – parents refused to give their identity documents. The Department still had the forms. The AG refused to accept this explanation. Only those that had identity documents could be counted.

The Chairperson said, on payment of creditors; if they had been paid the Department would have been in the red and would not have received the clean audit. The Department needed to be very careful regarding this issue.

The Chairperson said the target was to train 60 officials. She asked if this was in-house training or outsourced because the Department had increased the target by over 200% and ended up training 127, she asked where the money for this came from.

The Chairperson, on the issue of compensation of employees said the CFO said 99.4% spent virement of R25 million to goods and services? So, the Department had to choose to do the virement versus the employment of people; she asked for clarity on this.

Mr Mere replied that the Department received additional money to employ infrastructure units – to capacitate after R300 million was appropriated for MIG but National Treasury said that it would not be able to spend this money. The money was received late. The Department anticipated pressure on goods and services and requested to virement some money towards goods and services to address this as it was busy trying to fill all vacant posts. It requested the Treasury to allow it to take savings from personnel and put them where they were needed the most like for example there were requests for attire in schools. National Treasury had been very sympathetic in giving all that money. This year was the only year they refused to allow funds to be moved.

The Chairperson said on the issue of sports kits to schools, almost half the targets were achieved. The Department was well aware of the fact that pricing escalated all the time. This should be factored in when projections and planning were done. The Department was not planning properly

The Chairperson said it had come to light that there was evidence of people participating in various sporting codes. This was explained by the difficulty to collect evidence; she recommended that the Department developed a template because a lot of money was going into this.

Chairperson asked for clarity about the boxing federation.

Mr Moemi said the Boxing had achieved an unqualified audit opinion. The board was still intact. A new CEO was appointed. He (this DG) was not in charge of the senior managers in the Ministry and therefore could not insist that they entered into performance agreements.

The Chairperson said she did not think it should take 12 years to audit all equipment in the provinces, she thought 5 years.

Mr Moemi replied that the Department had projected that the audit of facilities would cost R8 million per province. It was therefore pacing itself and being realistic about it. Trying to do it in an affordable way module after module, hence the 12 years estimate.

The Chairperson, on the issue of vacancies, noted that the Department said they were at 6%, she had thought they were at 12 % and asked for clarity?

Mr Moemi said the Department had received a report, an analysis of all the exit interviews, most of whom wrote ‘gloriously’ about the Department. This could be forwarded to the Committee.

Chairperson said SAFA (South African Football Association) was drifting towards being in the red; what was Department going to do about it?

Mr Moemi replied that SAFA was facing liquidation before the Department had intervened. The Department had helped, they had stabilised their finances. The Department had ring-fenced money for them. The female teams and all the male age group teams had also advanced. The Department’s strategy of insistence on development was taking root and SAFA was doing the right thing now.

The Chairperson noted that there were too many resignations in the Department, and asked why there were 14 resignations in one year.

The Chairperson asked if the Olympic athletes had been given what was due to them.

Mr Moemi said that there were no athletes who were not paid in the year under review. In the current one yes there were a few not paid. There were reasons for this. In the basketball League, previously the grant was given to Basketball South Africa as a federation who then gave a portion of that grant to the league. The league paid the teams and the teams paid the player. So ultimately the players received their money from the teams. What was different this year was that the National Federation Basketball did not comply with requirements for funding, as they did not account for the funds given to them in the previous financial year. They had not submitted audited financial statements and such documentation. As a consequence, there was uncertainty as to how to pay the players and how the money could get to the players. The Department consulted with National Treasury because the Department wanted to pay the league itself. But the league was privately owned and the teams were owned privately. National Treasury said payment could not be made this way. The Department said it could either make payment via sport NGOs or register all players playing in the league and pay them individually. Ultimately it was agreed to pay the players via a sport NGO.

Mr Moemi replied that with the Comrades Marathon runners it should be understood that athletes should fill in the required forms and have a bank account in order to be paid. They had been informed of this. Everyone had been paid.

The Chairperson congratulated the Department on achieving a clean audit, but said the critical issue was to sustain it over a period of time. The issue of invoices had to be taken care of because this could jeopardise the image of a clean audit. She requested that in the future the presentation should provide a clearer picture of the provinces. She was very pleased that the Department was able to code indigenous games.  The Committee maintained that upgrading of facilities should not take 12 years – provinces needed to see the importance of sport.

The Department was thanked for their input. It was emphasised that political heads were required at these meetings.  

The meeting was adjourned.