DAC Quarter 1 performance; SA Roadies; Enyokeni Cultural Precinct & Winnie Mandela House; with Deputy Minister

Arts and Culture

12 September 2017
Chairperson: Ms X Tom (ANC)
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Meeting Summary

The Department of Arts and Culture Quarter 1 performance overview indicated an achievement of 27 out of the Department’s 32 targets (84%). Programme specific performance was Institutional Governance (91%), Administration (86%), Arts Culture, Promotion and Development (75%), and Heritage Promotion and Preservation (80%). It reported on each of the targets achieved. There was an improved 84% of procurement awarded to BBBEE compliant service providers and 100% of the invoices received were paid within 30 days. DAC spent R913 million (85%) of the quarterly budget of R1.1 billion and 21% of the annual budget of R4.4 billion, as at 30 June 2017.

The Department provided a status report on the South Africa Roadies Association, National Heritage Monument, National Arts Council and Enyokeni Cultural Precinct as requested.

On the complaints of the South Africa Roadies Association (SARA), the Office of the Public Protector made findings and proposed the following remedial actions:
• DAC was directed to provide funding for the renovation of SARA House to the amount of R15 million. However, the grant allocated to SARA for renovation being such a huge amount cannot be transferred to a private entity, since SARA does not have capacity to implement a renovation of this magnitude. To ensure that public funds are spent appropriately and for the purpose intended for, the Office of the Public Protector directed DAC to appoint the Development Bank of Southern Africa (DBSA), as a government infrastructure implementing agent, to implement and manage the renovation at SARA house.
• For the funding of operational administrative costs of SARA, the Minister was directed to amend the White Paper on Arts, Culture and Heritage of 1996, within three months to ensure that SARA is not unfairly discriminated against when it comes to the allocation of operational and administrative budget.
 • DAC should ensure that within three months, a written policy is developed on this type of funding for the future and put in place the criteria that should be followed for this funding model. The Public Protector stated it had issued this remedial action against the backdrop of inconsistencies in the DAC approach to funding of administrative and operational costs.

The Department upon studying the Public Protector report decided to take the matter on review and informed the Office of the Public Protector of this. The review process is still ongoing. The Department’s application for review was based on the grounds that it should not be obliged to renovate the property of a private third party and it will be seeking the setting aside of the SARA-DAC settlement agreement. DAC remains willing to continue supporting SARA through funding but will not accept any further obligations.

A legal opinion about the National Heritage Project Company had stated that the CEO was to account for various funding amounts forwarded to him on various occasions. As soon as DAC receives such account, it will be in a position to proceed. No response has been received to date.

The National Arts Council (NAC) forensic report involved its surplus funding policy which had been challenged as flawed. There is a need to institute another forensic audit to investigate the relationship between the former CEO and the company responsible for the first forensic investigation. The National Arts Council is in the process of reviewing its surplus funding policy. An NAC official was arrested and charged.

The Chairperson said that this was a bad precedent since it will intimidate officials from volunteering information to the Committee since the arrest was made after the Committee conducted its oversight visit.

On the Enyokeni Cultural Precinct, DAC reported that it had a meeting with His Majesty King Goodwill Zwelithini on 31 August and 1 September 2013. His Majesty had requested DAC to assist with capital funding for the construction of the cultural arena to host culturally significant ceremonies and functions. The Committee noted that there was no clear indication of the true cost of the project despite Phase 1 nearing completion. The Committee requested information on the cost of the project so as to conduct an effective oversight visit that week.

Meeting report

Briefing by the Department of Arts and Culture (DAC) on the 2017/18 1st Quarter Expenditure Report;
The DAC Director General, Mr Vusithemba Ndima, noted that the Quarter 1 Expenditure Report had not yet been audited due to logistical and technical challenges the department experienced in the transition from its old building to its current location. However, it will submit an audited report by the end of September. The performance overview indicated an achievement of 27 out of the Department’s 32 targets (84%). Programme specific performance was Institutional Governance (91%), Administration (86%), Arts Culture, Promotion and Development (75%), Heritage Promotion and Preservation (80%).

Mr Ndima went through the achieved and unachieved performance targets in the 2017/18 Annual Performance Plan (APP). He noted that the costing on the Revised White Paper on Arts and Culture and Heritage has been submitted to Cabinet for review. Positives were that 84% of the total value of the procurement was awarded to BBBEE compliant service providers and 100% of the invoices received were paid within 30 days. DAC held 5 of the 20 annual izimbizo. Eight new libraries were built, two in Gauteng, two in Limpopo, three in the Northern Cape and one in Western Cape. The Socio-Economic Impact Assessment on the South African Public Library and Information Services Bill is being conducted and a report will be submitted shortly. Oral history training methodology was implemented in Mthatha (OR Tambo district) on 26 June - 1 July 2017 and two national and international archives awareness initiatives were implemented during National Archives Week in May and International Archives Day on 9 June 2017.

The Department reported that due to the ongoing dispute with IDT there has not been progress with the legacy projects. DAC has since entered into an agreement with DHS for the completion of OR Tambo, JL Dube and Winnie Mandela House.

The Chairperson asked for clarification on the items that were indicated as ‘not for reporting’ and those indicated as ‘not for reporting in this quarter’.

Deputy Minister of Arts and Culture, Ms Maggie Sotyu, replied that those items would be reported on in the second quarter and the last quarter.

Mr Makoto Matlala, DAC CFO, said that DAC spent R913 million (85%) of the quarterly budget of R1.1 billion and 21% of the annual budget of R4.4 billion as at 30 June 2017, with Administration consuming 75% of its allocated budget, institutional governance 59%, Arts, Culture & Development 77% and Heritage Promotion & Preservation at 94%. DAC had overspent on compensation of employees by 1% amounting to R57.6 million. This was due to the retention of previous officials whose contracts were extended to end of June by the Deputy Minister. There was under-spending on goods and services at 61%, payment for subsidies to various entities at 90%, maintenance, upgrade and refurbishment of the Department’s Playhouse, museums and libraries at 13%, expenditures relating to subsidies to Business and Arts South Africa (BASA), Blind SA, Engelenburg Arts Collection and Mzansi Golden Economy (MGE) projects at 68%.

Discussion
The Chairperson said that the Portfolio Committee declared under expenditure to be a crime against society. DAC should spend according to its projections.

Mr J Mahlangu (ANC) requested that DAC maintain its reports as accurately as possible to avoid misunderstandings. He asked if the Timbuktu heritage project in Mali was paid for from the DAC budget and what procurement measures were being implemented. He asked for the distinction between ‘living human treasures’ and ‘living human legacies.’ He recommended that the Winnie Mandela House Project should be better conceptualised. He asked who the beneficiaries of the heritage bursaries were since only a limited number of black persons were represented.

Mr G Grootboom (DA) asked if PANSALB was part of the DAC councils and for the actual number of arts and youth development programmes supported. He asked if the Timbuktu heritage project was an African Union project or a South African project.

Ms N Bilankulu (ANC) asked why DAC had not corrected the mistakes in the report yet the same had been identified by the Deputy Minister in a previous meeting. She asked how DAC came up with the annual target for 20 imbizos and how they will be divided amongst the provinces.

The Chairperson expressed concern with DAC outsourcing its work to entities and transferring about 80% of its budget to these entities.

Deputy Minister Sotyu replied that DAC should monitor more effectively how the entities make their payments.

The Chairperson said that DAC needs to improve its communication to foster better relationships with the officials of the entities.

The Director General said that DAC would communicate its funding criteria better and would reach out to unfunded entities to assist them. Mr Ndima said that the items marked as positive deviations mean positive progress. The funding for the Timbuktu heritage project is by the African Renaissance Fund. The living heritage policy calls for the identification of ‘living human treasures’. It is not determined by age and young people can qualify as well. However, the ‘living legends’ are for people who have been in the industry for a long time. They will be identified so as to pass on their knowledge to the new entrants in the industry.

The Chairperson asked why DAC chose to pay the bursaries in August whereas students have been in school since January.

Mr Ndima said the strengthening of the MGE Funding and the criteria for funding would be popularized throughout the country and made it known to the public. There has been criticism about the living legends programme that it should also focus on legends who happen to live outside urban areas. DAC has five flagship projects; Diamonds and Dorings Festival in Kimberly, the South African Music Awards and the Cape Town Carnival among others. Two research documents have been drafted, one being a socio-economic impact assessment test conducted on the Cape Town Carnival.

Dr Mbulelo Jokweni, DAC Chief Director: National Language Service, said that once the terminologies are developed by DAC, they will be shared with the Portfolio Committee as one of the key stakeholders. These terminologies however are posted on the DAC website for public access. On the bursaries, they are awarded for a three-year cycle and currently they have been issued to six universities. Once the students are awarded the bursaries, the university submits reports on the students to DAC.

South Africa Roadies Association (SARA) complaint & Public Protector recommendations
A DAC representative said that on the 26 May 2017 DAC had received correspondence from the Committee Chairperson about complaints by SARA regarding alleged false statements presented by DAC to the Portfolio Committee. Upon request by the Committee, DAC had submitted a response to it on 30 June 2017. The complaint accuses various former DAC officials among others of dishonesty about a feasibility study which SARA has denied. There were concerns about the alleged failure or undue delay in the implementation of a settlement agreement between SARA and DAC. The nature of the allegations between SARA and DAC revolve around trust issues. DAC has tried to give a satisfactory response to each and every allegation made by SARA.

A report, dated 19 June 2017, was submitted by the Office of the Public Protector after which it conducted its own investigation and made findings and proposed remedial actions. These were:
• DAC was directed to provide funding for the renovation of SARA House to the amount of R15 million. However, the grant allocated to SARA for renovation being such a huge amount cannot be transferred to a private entity, since SARA does not have capacity to implement a renovation of this magnitude. To ensure that public funds are spent appropriately and for the purpose intended for, the Office of the Public Protector directed DAC to appoint the Development Bank of Southern Africa (DBSA), as a government infrastructure implementing agent, to implement and manage the renovation at SARA house.
• For the funding of operational administrative costs of SARA, the Minister was directed to amend the White Paper on Arts, Culture and Heritage of 1996, within three months to ensure that SARA is not unfairly discriminated against when it comes to the allocation of operational and administrative budget.
 • DAC should ensure that within three months, a written policy is developed on this type of funding for the future and put in place the criteria that should be followed in this funding model. The Public Protector stated it had issued this remedial action against the backdrop of inconsistencies in the DAC approach to funding of administrative and operational costs. This should help the funding model to be more coherent and consistent in its approach.

DAC, upon studying the Public Protector report, has decided to take the matter on review and informed the Office of the Public Protector about this. The review process is still ongoing.

Discussion
The Chairperson asked on what basis DAC was lodging a review in court.

The DAC representative replied that it should not be obliged to renovate the property of a private third party and it will be seeking the setting aside of the settlement agreement.

The Director General replied that DAC was willing to pay SARA but it was not willing to take responsibility for any construction or renovation for SARA. The Office of the Public Protector had over stepped its mandate by recommending that DAC utilise DBSA to facilitate the remedial action as well. The recommendation to make a written policy within three months is not feasible due to time constraints. However, DAC remains willing to continue supporting SARA through funding but it will not accept any further obligations.

Mr G Grootboom (DA) asked for the Department’s take on the remedial action put forward.

The Chairperson said that DAC had signed the agreement with SARA and it was on that basis that the Public Protector had reached the proposed conclusion. However, the Committee will not make comments as it needed only a briefing on the status of the matter.

National Heritage Monument
Mr Ndima explained that he had had discussions with Mr Dali Tambo, Chief Executive Officer of the National Heritage Project Company to the effect that DAC was not in a position to proceed without a legal opinion on the matter. The legal opinion stated that Mr Tambo was to account for various funding amounts forwarded to him on various occasions. As soon as DAC receives such account, it will be in a position to proceed. However, there are no timeframes set. A follow up letter was sent on the 7 August 2017 but no response has been received to date.

The Chairperson said that the DAC should use other measures to reach out and follow up on the communication.

National Arts Council (NAC) Forensic Report
Mr Ndima said that the matter related to the NAC surplus funding policy which had been challenged as flawed. There is a need to institute another forensic audit to investigate the relationship between the former CEO and the company responsible for the first forensic investigation. The National Arts Council is in the process of reviewing its surplus funding policy.

On the NAC official being charged, a report was drafted which will be submitted to the Portfolio Committee. The official had breached the NAC policy relating to the Council Charter together with the conditions of employment by failing to act in the best interest of the Council.

Discussion
The Chairperson said that the incident was a bad precedent since it will intimidate officials from volunteering information to the Committee since the arrest was made after the Committee had conducted its oversight visit.

Ms V Mogotsi (ANC) said that the Committee should wait for the report in order to interrogate it effectively.

Enyokeni Cultural Precinct
The Director General said that the report addresses the chronology of events and the status of the project as it is. Abandoning the project may have cost implications since DAC will need to rehabilitate the land.

Mr Ndima said that DAC had a meeting with His Majesty King Goodwill Zwelithini to discuss the Bhambatha Project on 31 August and 1 September 2013. His Majesty had requested DAC to assist with capital funding for the construction of the cultural arena to host culturally significant ceremonies and functions such as Reed Dance Ceremony (uMkhosi woMhlanga).

Discussion
Mr P Mulder (FF+) asked if there was any form of graft in the financial statements.

Mr Grootboom commented that there was no clear indication of the true cost of the project despite the fact that Phase 1 of the project was about to be completed.

The Chairperson said that there was need for further information and reiterated that the Committee needs the cost of the project so as to conduct an effective oversight visit.

The Chairperson said that the DAC should improve its communication so as to foster better relationships with its entities. The Committee would meet with DAC on Thursday 14 September at Enyokeni Cultural Precinct.

Meeting adjourned.
 

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