National Lotteries Commission briefing

Sports, Arts and Culture

27 June 2017
Chairperson: Mr S Ralegoma (ANC) (Acting)
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Meeting Summary

The National Lotteries Commission briefed the Committee on its allocations for sport and recreation for the 2016/17 financial year.

The amended regulations relating to allocation of money in the NLDTF showed that 47% needs to go to charities, 28% to sports, 23% to arts and 2% to misc. The direction for distributing agencies in determining the distribution of funds from the NLDTF focused on setting of caps, education and awareness, capacity building and having a full-time distributing agency. There is also a target of 150 days for funding from date of submission to finalisation and the review to be finalised within 90 days. There is a limit of 5% distribution of funding across all provinces.

Gauteng received the largest chunk of grant for the 2016/17 financial year followed by Limpopo, Eastern Cape and Western Cape. A total of R438 936 284 was allocated for 2016/17 in comparison to the R611 848 309 in the previous financial year. In 2016/17, NLC made payment of R508 982 738 in comparison to R739 655 318 in the previous financial year. Sport equipment received a total funding of R88 million, followed by R54 million for travelling arrangements, accommodation and meals and R49 million went to administration, leagues and international games. The sport and recreation priorities for 2017/18 financial year are on transformation, international and domestic participation and capacity building within national sports federations.

NLC had developed a strategy on capacitating emerging organisations on governance, finance and reporting. In terms of education and awareness, NLC coordinated at provincial level and this was to address specific needs based on target audience. This was also to create awareness on fraudulent activities, consultants and how to access funds and compliance with required documents.

Members appreciated that the projects that are being funded were making a direct impact to the people on the ground. The people from rural areas should also be able to benefit from the grants that are being disbursed. NLC should be able to fund South Africans that are outside the country and who happened to be based overseas because of training or any other reason. The 5% cap for the distribution of grants should be applied as stipulated in the legislation. The Committee should be briefed as to why SASCOC seemed to receive the bulk of funding relative to other organisations. The Committee should be briefed as to which portfolio committee undertook the interviews for the new Board took place. There is often a complaint from various communities that NLC does not provide a reason for not funding other organisations. There seemed to be confusion on the amount that had been allocated and that which payment had been made.

Some Members commented that it was unclear as to how to differentiate between the funds that had been allocated and those where payments had been made. The Committee should be briefed about the extent in which NLC managed to promote public knowledge of the Commission. It was unclear if the R250 000 funding was allocated per school or for all schools. The Committee should be briefed on the 150 days target in the distribution of funds and whether this was related to the finalisation of the review process within 90 days. The Portfolio Committee on Trade and Industry confirmed that NLC had a backlog of 26 000 applications. What is the strategy in place that would deal with this backlog?

Meeting report

Election of Chairperson

The Committee Secretary indicated that the Chairperson of the Committee was absent and therefore the Committee would have to elect an Acting Chairperson.

Ms D Manana (ANC) nominated Mr S Ralegoma (ANC).

Ms B Abrahams (ANC) seconded the nomination.

Mr Ralegoma accepted the nomination.

In the absence of any further nominations, the Committee recognised Mr Ralegoma as the Acting Chairperson.

The Acting Chairperson welcomed everyone and mentioned that the Committee should also deal with the oversight programme. He then requested the Committee to adopt the agenda for today’s meeting.

Adoption of the agenda

Mr T Mhlongo (DA) moved for the adoption of the agenda and was seconded by Ms Manana.

The Committee adopted the agenda with amendment.

Briefing by National Lotteries Commission

Prof Ntshengedzeni Nevhuthanda, Chairman of NLC, indicated that to date only the Charities Distributing Agency (DA) and Arts DA have been appointed as full-time members. The interviews for the Sports and Recreation DA members have already been completed and the process is currently with the Department of Trade and Industry (dti) for finalisation. There are a number of challenges that had been identified with the amended legislation and these included:

  • Cooling off period and the impact on organisations like South African Sports Confederation and Olympic Committee

  • Funding activities outside South Africa

  • Funding for impact (NLC’s strategic intent)

  • National Consultative Indaba (scheduled for September 2017) to focus on beneficiary challenges

  • Equitable funding skewed to benefit developed organisations

Ms Thabang Mampane, Commissioner, NLC, mentioned that amended regulations relating to allocation of money in the NLDTF showed that 47% needs to go to charities, 28% to sports, 23% to arts and 2% to misc. The direction for distributing agencies in determining the distribution of funds from the NLDTF focused on setting of caps, education and awareness, capacity building and having a full-time distributing agency. There is also a target of 150 days for funding from date of submission to finalisation and the review to be finalised within 90 days. There is a limit of 5% distribution of funding across all provinces.

Mr Phillemon Letwaba, Acting Executive: Grant Funding, NLC, stated that Gauteng received the largest chunk of grant for the 2016/17 financial year followed by Limpopo, Eastern Cape and Western Cape. A total of R438 936 284 was allocated for 2016/17 in comparison to the R611 848 309 in the previous financial year. In 2016/17, NLC made payment of R508 982 738 in comparison to R739 655 318 in the previous financial year. Sport equipment received a total funding of R88 million, followed by R54 million for travelling arrangements, accommodation and meals and R49 million went to administration, leagues and international games. The sport and recreation priorities for 2017/18 financial year are on transformation, international and domestic participation and capacity building within national sports federations. In provincial federations, the focus would be on transformation and development, training and development of coaches of Lotto funded clubs and schools. In public schools, the priorities are mainly on new basic equipment, apparels and upgrading of existing facilities for quintile 1, 2 and 3 schools. In sports Non-Governmental Organisations, the priority would be on the implementation of sports and recreation-based programmes in communities.

Prof Nevhuthanda highlighted that NLC has developed a strategy on capacitating emerging organisations on governance, finance and reporting. In terms of education and awareness, NLC coordinated at provincial level and this was to address specific needs based on target audience. This was also to create awareness on fraudulent activities, consultants and how to access funds and compliance with required documents. In terms of monitoring and evaluation, a dedicated team of experts will be responsible for this. The team will also focus on conducting site visits for programmes and financial monitoring and ensuring that reporting is done as per the signed grant agreement.

Discussion

Mr P Moteka (EFF) appreciated that the projects that are being funded were making a direct impact to the people on the ground. The people from rural areas should also be able to benefit from the grants that are being disbursed. NLC should prioritise any organisation that is able to make a direct impact on the people and there should be a level of accountability on the money that had been disbursed. NLC should be able to fund South Africans that are outside the country and who happened to be based overseas because of training or any other reason. It was concerning to see that the distribution of grants at provincial level was not highly skewed and focused on urban provinces like Gauteng. The 5% cap for the distribution of grants should be applied as stipulated in the legislation. The Committee should be briefed as to why SASCOC seemed to receive the bulk of funding relative to other organisations.

Ms Abrahams firstly appreciated the presentation that had been made as it was clear and succinct and then welcomed the new Board. The Committee should be briefed as to which portfolio committee undertook the interviews for the new Board took place. There is often a complaint from various communities that NLC does not provide a reason for not funding other organisations. There seemed to be confusion about the amount that had been allocated. It was unclear as to whether there is consequence management for organisations that had misused the funds. NLC should be commended for focusing on capacity building as this would ensure that the right organisations get the funding. The Committee should be briefed on why SASCOC was being given a responsibility to assist organisations that did not qualify for funding.

Ms Manana asked about the process that was being followed for the allocation and payment of funds by the Commission. It was also unclear as to how to differentiate between the funds that had been allocated and those where payments had been made. The Committee should be briefed about the extent to which NLC managed to promote public knowledge of the Commission. How many provinces did the NLC go to and promote public knowledge? How long does it take for NLC to approve application for funding? What are the main reasons for the rejection of funding for some of the applicants? It would be important to hear about the effectiveness of the monitoring and evaluation team. It would be important to know if there is any form of accountability in relation to the money that NLC was giving to SASCOC.

Mr Mmusi enquired about the problem of accountability in management and distribution of funds in Northern Cape and North West as these provinces were lagging behind. It would be important to know about the process that was being followed as there are apparent fluctuations. It was unclear if the R250 000 funding was allocated per school or for all schools. The Committee should be briefed on the 150 days target in the distribution of funds and whether this was related to the finalisation of the review process within 90 days. The Chairman should explain whether a Member of Parliament could have any influence on the proactive funding. It looked like the Commission was doing the allocation of funds before actually determining the actual cost of the project to be undertaken.

Mr Mhlongo wanted to know how it was possible that there is no backlog from NLC in the distribution of funds while there is a backlog in other divisions. The Portfolio Committee on Trade and Industry confirmed that NLC had a backlog of 26 000 applications. What is the strategy in place that would deal with this backlog? NLC should confirm as to whether it is true that there was an allocation of R70 million directed to SASCOC in the 2016/17 financial year. There is a perception that there is unfairness in the distribution of funding and this was particularly the case for lack of support of Deaf Sports Federation in Olympics.

The Chairperson requested to be provided with more information on the cooling off period and the impact it had on organisations like SASCOC. NLC should explain further the allocation of grants per provinces and whether this was merely based on performance per provinces. The Committee welcomed the indication that the DA would now be full-time in order to ensure that the applications are fast-tracked. The Committee should be provided with the list of 9 provincial offices so that people could be referred to these offices for accessing funding.

Prof Nevhuthanda responded that the legislation is clear that the Commission should allocate a minimum of 5% for provinces. NLC should try by all means to ensure that there is no province that gets to receive less than 5% of funding. NLC was doing public awareness and educating the general public on the process to be followed to make an application for funding and this was being done twice a year. NLC also aimed to have offices in each and every province in the country and this is part of encouraging people to apply for funding. There is a tendency of people submitting the application on the last day and this was a tendency that needed to be discouraged. There is an expectation that a particular province should be able to perform after being allocated 5% of funding in order for funding to be increased beyond 5%. The Portfolio Committee on Trade and Industry was charged with responsibility of appointing the new Board. The Act only stipulates that the Minister should appoint the Board and it does not go further than that.

Prof Nevhuthanda clarified that the cooling off period simply means that anyone that had made an application for funding should run the project for the period of twelve months. However, the problem was that NLC only considered the grant on the last day of payment for funding. The cooling off period is to deal with the problem of limited funding as an organisation cannot get two funding in one year. There are indeed cases where some of the organisations that had been given the money would be delinquent and there are people who are monitoring the funds. NLC was trying to do a follow-up on the projects in order to ensure that the funds are spent accordingly. There is a number that the applicants receive via an SMS immediately when leaving the NLC offices. There is an opportunity that is given to the applicants to fix whatever that is wrong in the applications or add missing documents. The applicants should make it a priority for NLC to be satisfied with all the required information and documents so as to speed-up the process. NLC welcomed the suggestion that there should be a specific section dealing with funding to NGOs so that they are not counted under profit making organisations.

Prof Nevhuthanda mentioned that NLC was giving a huge amount of money to SASCOC because this was regarded as a capable organisation. However, there is no legislation that stipulates that SASCOC should be given the largest funding as the Constitution is clear that everyone should be treated equally. There are cases where SASCOC was now even demanding funding for its administration operation from NLC and this was completely unacceptable. NLC was not created to look after SASCOC only but created to fund development even at grassroots level. The approach of the new Minister of Sport is premised around promoting sports development in rural areas. The reality is that SASCOC should have been the organ of state and the Committee should be developing a discussion around the issue.

Prof Nevhuthanda indicated that there are three underperforming provinces, namely; North West, Northern Cape and Free State and NLC was particularly concerned about the performance of these provinces. NLC managed to link up with the sport federations where all the clubs are affiliated to as well as the provincial offices in order for them to go through the villages and ask why their applications are not coming forth. The challenge that NLC was experiencing here was the population size of these specific provinces. The office of the Northern Cape had assured NLC as well as sport federations that they had done all in their powers to encourage people to make the applications for funding. NLC was not discriminating against certain provinces but the issue was the population of these specific provinces.

Prof Nevhuthanda explained that there had been some changes in the way in which the offices are conducting their businesses and this is to deal with fast-tracking applications. NLC decided that it was pointless to take the applications that would ultimately be rejected to the DA as this was time-consuming. The provincial offices had been given the discretion to immediately decline some of the applications that did not meet the basic requirements. The only applications that are being considered by NLC are those that are for funding. The declines are forwarded to the NLC in order to verify if these had been declined fairly or unfairly. The federations that are bringing glory to the country are athletics, rowing and swimming would be asked to apply for funding as they are performing very well. SASCOC has got a marketing arm and even a Chief Executive Officer (CEO) and one of the responsibilities of a CEO is to look for funds. The success of the athletes like Caster Semenya and Wayde Van Niekerk brought about a lot of hope and optimism for athletes at grassroots level in many villages around the country.

Ms Mampane replied that it was indeed concerning that NLC was unable to respond on time to the applications that had been made and this was something that had been taken into consideration. The priority of NLC is not about declining and sending the applicants back home but to rather to guide the applicants on how to improve the application to receive funding. Charities are the biggest sector that receives funding. NLC once received 18 000 applications from charities amounting to R40 billion while the budget for allocation was R750 million. There is no organisation by the end of August 2017 that would be complaining about the backlog. NLC would be looking at doing branding for all the projects that had been funded. There are organisations that had been punished for delinquency and were asked by the DA to return part of the funding that would have been allocated to them. There are also cases where NLC had reported some organisations to the police for wrongdoing. There are a number of provinces like Western Cape, Gauteng and KwaZulu-Natal where one would find a lot of NGOs.

Ms Mampane responded that NLC would be monitoring the 5% allocation on a quarterly basis as this was also contained in the Annual Performance Plan (APP). NLC was committed to increasing the number of workshops and public awareness programmes aimed at helping the general public to submit the applications for funding. The 90 day review is when a project had been declined and the applicant is given an opportunity to submit a review. The new legislation has now empowered the review committee to adjudicate the application from scratch. NLC was also working very hard in educating the general public about their rights in terms of issues like review of a declined application. The total number of staff in provinces ranges between 10 and 12 and this was to ensure that each office was properly staffed.

Prof Nevhuthanda indicated that the Committee should be commended for getting the NLC to take school sports seriously. The Committee challenged the NLC two years ago to focus on school sports and this call was responded to positively. NLC decided to make available an amount of R300 000 for each school applying for funding and R250 000 should be for facility and R50 000 for kit. The principals around the country have indicated that there had been an increased interest in sports from many learners and this was something that should be commended.

Mr Letwaba responded that the budget of NLC in 2016/17 was R1.6 billion and some of the funds that had been funded tended to overlap to the next financial year. NLC was currently sitting with a liability of R1.1 billion and this is a liability that is still due to the beneficiaries. There is a proper monitoring, evaluation and control of the project during the implementation of the project. NLC already prioritise on public awareness so that people are fully aware of the requirements for funding to be accepted. The matter of capacity building and monitoring and evaluation had been strengthened in various provinces. NLC does not allow the application to enter into the system if it is going to be declined and NLC was focused on capacity building in rural areas so as to also receive funding for sports and recreation.

Prof Nevhuthanda replied that it was impossible for a Member of Parliament to influence proactive funding as the Act only authorises the Minister, Deputy Minister or the Commission to tell a particular community after conducting a thorough research to apply for funding without appreciation offered.

The Chairperson stated that the Committee would deliberate on Committee Report on SRSA operational and financial performance during quarter 1 in the next meeting.

Committee Planned Oversight

Mr Mhlongo said he was happy with the overall programme but expressed concern that the oversight visit on 31 July 2017 was on a Monday as this was a day that was dedicated for constituency work.

The Acting Chairperson agreed that the oversight visit on 31 July should be moved to Tuesday 1 August.

Ms Manana said that the Committee currently did not have a content adviser and there were many schools in the townships like Khayelitsha and Nyanga and this should be reflected in the Committee Programme. The reality is that there is a lot of sport going on in Langa but there are no facilities for rugby and soccer. There is a lot that the Committee could benefit by visiting township townships like Khayelitsha as there are no facilities in the area.

Mr Moteka suggested that the Committee should work on the programme so as to deal with it at a later stage. It would be completely unacceptable not to have townships schools reflected in the programme.

The Acting Chairperson said that the Committee should agree in principal that 31 July would be avoided and start conducting the oversight on 1 August. The Committee would also consider township schools as agreed.

Adoption of minutes

The Committee adopted the minutes of 13 June 2017 with amendments.

The meeting was adjourned.

 

 

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