Department of Sport and Recreation 2016/17 Annual Report, with Minister & Deputy

Meeting report

The Chairperson noted that this time of the year the Department considers annual reports of departments as part of their mandate to ensure the executive authorities are held to account based on pre-determined targets. The Committee would also look at how best to support the departments in areas where there were challenges and advice where possible as part of its oversight responsibilities. The Minister and Deputy Minister were commended for attending the session.

Remarks by Minister
The Minister for Sports and Recreation, Mr Thulas Nxesi, in his opening remarks, stated that the new executive takes political responsibility past and present even though he was appointed after the budget was passed. Sports and recreation continues to deliver on its mandate within very tight financial constraints guided by the tenets of a winning nation. Research by the Eminent Persons Group indicates that the vision is interdependent and is linked to increasing participation, development and transformation of sports in schools and community levels. This is a prerequisite for widening the pool of talent in which to identify support for high performance athletes which can represent the country at the highest level to realise SA’s vision of a winning nation. Everyone here is a product of sports Wednesday and that is dead presently. This is not caused by the teachers but because the new demand and priority is academic excellence whereby the teachers and learners are moulded to perform in flying colours while forgetting wholesome development which has less to do with sports. As a result, the shining schools in sports are the former model C schools. It is the Department’s view that transformation in sports at community level is a precondition for widening the pool. It has to start in schools. The Department has therefore prioritised that sports in school and community level hold the key to a more equitable access and transformation.

Working within the current Annual Performance Plan (APP) we are pleased to report some progress starting with schools’ sports programmes in conjunction with the Department of Basic Education (DBE) to review and refresh the Memorandum of Understanding (MOU) with a view to a more determined implementation. Work is in progress with MEC’s of both departments; schools’ sports are under the DBE while SRSA is the sports ministry. As a result, SRSA must first have a pre- arrangement with DBE. Working in an integrated and coordinated way is still a challenge because every sphere of government still holds dear its sphere of influence. The Committee will be briefed on the final outcome of these engagements. The focus must now be on implementation; many things are spoken about without implementing them. In the Annual Report, the Department’s strategic plan outlines six outcomes and oriented goals, three of which are: citizens, access sports, and recreation activity.

The DG would shed more light on the others later. The detailed targeted numbers that were achieved are contained in the report. In the year under review, events hosted were: Move for Health; Indigenous Games Festival; Big Walk; You Can national recreation games and annual golf development games.

On strategic goal number two; sports and recreation sector adequately transformed; transformation targets and outcomes are summarised in the report and addressed in detail.

On strategic goal number three; athletes achieved international success, and success is measured by improvement in SA performance at selected multi coded events or improvement or maintenance of world rankings in selected events. To support sports development, the SRSA has developed a number of interventions such as the Ministerial bursary programme.

Strategic goal number four is enabling mechanisms to support sports and recreation. The goal measures the number of sustainable integrated systems of creating facilities for sports federations and supporting sports broadcasting and sponsorships. The issue of broadcasting has to be dealt with by politicians. COSATU raised an important question recently when they threatened to protest at a rugby test match. They asked how it could be that in a game of national importance, the majority of the people are unable to watch the game live because it was on pay TV. The subscription is expensive and not reachable to the average South African. SRSA will be engaging with the stakeholders in the coming months to address this matter; it is untenable that big matches we want our people to support our national teams can only be on pay TV. This raises a number of questions because when Multi Choice was consulted they argued that the rights were given to them by SABC. This has to do with the disorganisation in the SABC.

It is also an important step that SRSA received an allocation of R300m of the Municipality Infrastructure Grant (MIG) in 2017/18 financial year. SRSA is working closely with the Department of Cooperative Governance and Traditional Affairs (COGTA) and relevant authorities to deliver sports and recreation facilities. The Department also continues to install multi-purpose courts in partnership with Sports Trust as a way of also strengthening local service providers.

Strategic goal number five; sports users are told to support relevant government and the global priorities. This goal measures the contribution of sports and recreation towards the implementation of outcome fourteen for nation building and social cohesion. SRSA continues to play a role in the development and implementation towards sports development, peace, and fulfil its obligations in international forums such as UNESCO, World Anti-Doping Agency (WADA) amongst others. SA continues to play an active role in the African Union Sports Council and have hosted regional awards in 2016/17. The Deputy Minister is the chairperson of the Intergovernmental Committee for physical education and sports and played a leading role in UNESCO world conference held in Kazan, Russia in June 2017.

Strategic goal number six; An efficient and effective organisation which is to implement internal processes to ensure that the Department annually receives an unqualified audit report and impact rating of four within five years. The Department received a moderated management performance report which was a score of 3.2 out of 4 areas. The areas for improvement were identified and this will continue to be pursued in 2018.
A clean audit report was obtained in 2016/17 for the fourth year running. SRSA in terms of performance received 82%. Most of the challenges are related to conditional grant shown in the indicators which are not supported by reliable evidence. This requires greater cooperation between the Department and the provinces. Cost reduction measures are being implemented although alternative funding models is being explored.

Commonwealth games hosting was approved in principle by Cabinet in 2015. By 2017 the Commonwealth Federation withdrew the hosting rights of the games from South Africa because of associated financial costs. As government, having learned from 2010 when it signed a blank check to the FIFA authorities. FIFA became a government within a government when they were here. This time around, government refused to do the same thing. SA was told it will cost R4b but later on they said the cost has escalated to R8b we could not agree to that. The difference between that and the 2023 Rugby World cup we are bidding for now is that this is designed as an economic bid with clear and limited financial commitments, hence the bid secured the support of Cabinet. It is not over yet as the final vote of the World Rugby Council will take place on 15 November 2017. SA will remain vigilant once it wins the vote to ensure that the deal with World Rugby is in line with the interest of SA rugby and its people. SA rugby will leverage the bid to drive real development and transformation and most importantly to ensure that corruption and collusion that marred the 2010 FIFA world cup has no place in 2023. We shall ensure that the BBBEEs and SMMEs beneficiation will be non-negotiable in this bid and that it not only benefits big companies.

The South African Sports Confederation and Olympic Committee (SASCOC), plays a dual role of being a confederation whereby all federations of all sporting codes are affiliated and also acts as the local version of the International Olympic Committee (IOC). There is the tendency when there is irregularity for people to run and mobilise other people and run internationally to say that SRSA is interfering, as if they do not have to account. By law as a sports federation, they are obliged to account to the ministry. SRSA is saying that it is not interfering, rather intervening, and has the right to do so. No accountability will draw SRSA to intervene as long as there is money coming from the government to them. There is a lot of money coming from sponsorships but with no accountability and they hide behind the mask of running an independent federation whereas they are using public resources. The members must be alive to the fact that some people will come to lobby and cry SRSA interference whilst they do not want to account. There is a big case; the Solidarity case. Solidarity has gone to court to challenge the transformation model of SRSA as racism. This is going to be a test case in SA. The integrity of SA sports structures must be above reproach. Transformation is a must in this country and non-negotiable.
None of the achievements of 2016/17 would have be possible without the able leadership of the former Minister, Mr Fikile Mbalula, supported by the Deputy Minister, DG and the whole team.

Discussion
The Chairperson thanked the Minister for his remarks, he had raised important questions regarding maintaining the integrity of sports administration and sports transformation in the country.

Mr M Khawula (IFP, KwaZulu-Natal) thanked the Minister and Deputy Minister and staff of SRSA and agreed that the Minister touched on a variety of important issues. He could not remember receiving the report of the Eminent Persons Group (EPG) and engaging on it. What has happened to it? This document is an important document on transformation and the Committee would like to find out what are their recommendations. This Department always gets interesting Ministers. The DG is his favourite amongst the DGs in the country because he knows every issue pertaining to the SRSA at his fingertips but that seems to be ruined now with the Minister also very aware of happenings in the department.

Ms L Dlamini (ANC, Mpumalanga) welcomed the remarks and said sports development goes to her heart and understanding the issues of sports and education, which luckily forms part of the Committee portfolio, holds the key to wholesome development of SA. It is important to sort out the broadcasting problems and it is important to engage with the minister in charge of that department. Pay TV is expensive and many SA citizens cannot afford the subscription. It is important that our people benefit from her national teams.
What went wrong with Bafana Bafana? Is it from the boys or coach? This is now a new team and those not winning before are no more there and they have a different coach now. If it neither the coach nor the boys, what went wrong? Losing to Cape Verde in Durban was very painful. The Minister has to look into the issues of Bafana Bafana.
Mpumalanga has no multi-purpose sports facilities and people from the province love sports. That has to be looked into.
Banyana Banyana is also not getting the level of support extended to Bafana.

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

Mr D Stock (ANC, Northern Cape) thanked the Minister and was confident that his leadership will take SRSA to greater heights. The DG should be applauded for the steady hand he has provided for SRSA.
The Department has achieved another clean audit for this financial year. It might seem like an old record because the Department has always achieved a clean audit. How about speaking to your colleagues in your interdepartmental forums from other departments who are struggling? Maybe your experiences could be shared because this Committee oversees nine departments and judging from our experience, they are really struggling to achieve a clean audit.
It is very encouraging that the issue of schools’ sports was also raised. DBE and SRSA must jointly meet to get this rolling especially implement the MOU signed by the two departments.
The participation of provinces in sports development is still a blight for SRSA, although the Committee is aware that it is not the responsibility of SRSA to implement, but grants that go to provinces fall within the province’s legislative mandate.
We are aware that the Department of Arts and Culture is always not performing well in this regard. From their presentation in pie chart format nothing has changed since the last four years.

Mr C Hattingh (DA, North-West), said the issue of broadcasting rights was a complex one. It must be noted that broadcasting rights is a valuable asset to a sporting body. It goes out to the public for bids both locally and internationally and money realised from these transactions goes back to develop the sport. The way it goes, it is difficult for the public broadcaster to compete with the likes of Supersport and Skysport etc. It can be addressed but the financial component must be looked into as well.
It is good the Minister brought the issue of the disappearance of the sports Wednesday but SA faces a bigger problem; that of the collapse of the club system. Even rugby is facing the same problem because of the failure of the smaller leagues.
Formerly, teachers who intend to go into education had to take coaching courses as part of their curriculum. As teachers, they had to spend some time in the afternoons coaching but that is no more. It is no more expected of educators to spend time after school doing and teaching sports to learners. To get it right, we must return to basics by getting educators to coach and do it after school hours and ensure it forms part of their curriculum. The present Minister should know that his predecessor participated in the Cape Town tour.

The Minister, in his response, promised to bring the report of EPG to the Committee or make it available to the Members. A session could be arranged where it could be presented. It is good to have a hands-on approach DG but the other side must be looked in to too. What if the DG collapses now, can the other people be able to articulate the issues? Grooming the leadership is important as well. Other staff members accompanying the DG are on a learning exercise. Coordination and integration is an issue that runs deep in government and for government to succeed, this is the only way and not working in silos. The schools’ sports issue will have to be dealt with. A balancing act must be found on the broadcasting issue. Profits must not be sacrificed for the good of the people and everything must never be given to monopoly.

Department Sport and Recreation on its 2016/17 Annual Report
Mr Alec Moemi, DG of SRSA, in his presentation said that in the Annual Report for this year, volleyball has been adopted and declared as the federation of the year. Each year the Minister adopts one federation and it is given additional support, financial resources and technical expertise. SRSA’s intent is that within a space of twenty years, there should be an increase in the professional codes from the existing four to sixty. If we want to broaden the participation, it must be widened. It started with tennis, then moved on to volleyball, basketball and last year hockey premier league was launched. Next year will be softball and so on.

The main responsibility of SRSA is to develop national policies and guidelines for sport and recreation in the country. Partners assisting with implementation are provinces and municipalities as well as SASCOC, National Federations, and other agencies such as NGOs. Despite the delivery of sport and recreation in three different spheres of Government, the actions and initiatives within SRSA’s mandate were coordinated to maximise impact. The Department administers two public entities namely; Boxing South Africa (BSA) and the South African Institute for Drug-Free Sport (SAIDS).

During the period under review, the Department had 28 targets of which 23 were achieved. This translates to an achievement of 82% of the targets. The Department obtained a Clean Audit Opinion on performance & financial information. The achievement was reached through 172 staff members working as functional units and in task teams. An amount of R1 023.6b of the allocated R1 026.6b was spent. This expenditure translates to only 0.03% under-spending. This is an improvement from 2015/16’s 0.9% under-spending.

Targets not achieved: Creditor payment age: overall actual >30 days.
Reason: This could be attributed, among other things, to system failures. For example, the 4th quarter transaction volumes put pressure on the Basic Accounting System (BAS), with some payments not being captured. In addition, delays in payments are caused by disputed invoices that retain the original submission date even after resolution of the dispute.
Corrective Action: The Department is working on a system of isolating disputed invoices to ensure that such invoices do not affect the overall invoice payment age, until such time that they are corrected by the service provider. We are already seeing some successes in this regard in 2017/18.

The targeted ‘3 national school sport championship supported’ – partially achieved.
Reason: This is because owing to financial constraints, the Autumn Championship could not be held in Q4 of the period under review as planned. As such, only two championships were held.
Corrective Action: The championship was moved to Limpopo Province, and set for the 1st quarter of 2017/2018. The event (Autumn Championship) has indeed taken place in quarter 1.

The number of people actively participating in organised sport and recreation events
Reasons include: Conservative planning by provinces despite the financial allocations they receive from SRSA to contribute to the national targets. Failure by provinces to report in line with the technical indicator description, thus resulting in some of the reported claims being disregarded. Reporting challenges where some claimed performance is not supported with evidence, thus being disregarded.

The targets that were not achieved happened within an environment characterised by among other things:

- The Agreement with DBE towards implementation of School Sport that remained problematic.

- A new agreement whose implementation will require vigour and commitment from the two departments, at national and provincial level, has been drafted.

- Several engagements at different levels between the two departments have already taken place with the intention to change the school sport landscape for the better.

Legislation that does not fully support our strategy. Efforts to amend / introduce the legislation such as NSRA; Combat Sport Act; and SAIDS Act, as well as related regulations, are moving at a slow pace because of other national priorities.

Sport Support:
Financial constraints and uneven distribution of resources across the sporting codes remain a major challenge. A significant number of federations still do not have proper administration resources, that is: human and other office infrastructure resources, which impede the effective governance of sport in general.

Sport Facilities:
The R300 million Municipal Infrastructure Grant (MIG) Fund project identification was a challenge since not all municipalities cooperated especially on the issue of the suggested transversal tender. Municipalities wanted to use their own procurement processes in undertaking the MIG projects. This was resolved by allowing municipalities to appoint their own professional service providers (PSPs).

2022 Commonwealth Games:
- Although Cabinet had approved in August 2015, the hosting of the 2022 Commonwealth Games, the country had to withdraw in 2017, from hosting the games because of the associated financial risks.

- While we continue to be part of the commonwealth family, we had to prioritise the wellbeing of ordinary citizens of our country.

-We wish to reiterate our appreciation to all stakeholders, who played a part in winning the hosting rights and preparations for the games. Their efforts were not in vain.

Inadequacy of funding towards adequately implementing the NSRP.
Our sport delivery system continued to be impacted by budget constraints and the absence of adequate equitable share to implement the National Sport and Recreation Plan (NSRP) adopted by the sports movement and approved by Cabinet.

SRSA continues to explore alternative funding models to ensure that our strategic goals are not compromised i.e.: optimising citizens’ access to sport and recreation; transformation of the sector; and supporting athletes to achieve international success. Mechanisms include: partnerships with provincial and local spheres of government and other national government departments.

The Audit Committee has reviewed and accepts the opinion of the Auditor-General of South Africa.

The Audit Committee concurs and accepts the conclusions of the Auditor-General of South Africa on the annual financial statements and Annual Report. The Audit Committee is of the opinion that the audited annual financial statements and Annual Report be accepted and read together with the report of the Auditor-General of South Africa.

The Audit Committee has reviewed the Department’s implementation plan for audit issues raised in the prior year and satisfied that the Department has put more effort in improving the internal control environment.

Financials
SRSA is amongst the non-revenue generating government departments. The revenue for the Department is mainly made up of the annual appropriation received from the National Revenue Fund. SRSA appropriated an amount of R1, 027m for the financial year under review. SRSA also generated an amount of R97, 000 from: interest from bank account, recovery of telephone and parking expenses, and other staff debts. The Department spent almost all funds allocated in the current financial year. The amount to be surrendered is only R2, 97m of the R1, 027b appropriated from the Revenue Fund. The funds utilised amount to 99,7%, translating into R1,024b of the allocated funds. The R2,97 million under spent was mainly in the following Economic Classifications:

- Goods and services - R2, 24m
-Transfers payments - R452 000
-Compensation of Employees - R290 000

The detailed breakdown of expenditure is included in the Appropriation Statement and the Notes to the Annual Financial Statements.

Challenges:
There are still few gaps and weaknesses in the departmental Internal Control Systems, which have been noted by the Auditor-General during the audit. Those few gaps and weaknesses have been included in the Management Report issued by the Auditor-General.
The Department has already developed an Action Plan to address the issues raised in the Management Report.

Achievements:

- Unqualified opinion from AG for four (4) consecutive years.
- Tremendous improvement on payment of suppliers within 30 days.
- No emphasis of matters reported by the AG on performance and financial information.
- Reduction in number of issues raised by the AG.

The issue of Bafana Bafana must be put into context. SA has a bad reputation as the only host country to be knocked out in the group stages at FIFA world cup all other host nations progressed at least to the quarter finals.

Teachers are insisting that if they are to do any extracurricular activity, they must be paid overtime. The only way is to insist that the Education Law Amendment bill before Parliament removes the power from the Schools Governing Boards (SGB) and ensure that teachers are paid extra overtime because it is an extracurricular activity. SRSA has made inputs in that bill already.

There is rot in the governance of football in SA. The history of football in SA is laced with blood. When the old South African Amateur Black Football Association was changed to NPSL people died. People were just disappearing. When that was changed and Abraham Banjee was in charge there were also problems. SA recognises SAFA as the agency in charge of football but we have a league which is supposed to be the property of the national federation but is not. PSL and SAFA are distinct and separate bodies. One is headed by Danny Jordan the other by Irvin Khoza. Over the years there have been some compromise that says SAFA will recognise the PSL and there is a stalemate that is still there. The present arrangement is that when you are the chair of the PSL, SAFA has no say in what PSL does. The tail is wagging the dog while the dog is not wagging the tail.
Even more problematic is that looking at the administration of the PSL, 90% of the football spending in SA is on the PSL quite unlike in the other countries. You have clubs that play tournaments and the clubs chairpersons, who own the clubs, constitute the board of governors. And essentially self-governing systems, meaning you are the referee and player at the same time. Your team plays and you govern yourself up there; they sit and pass resolutions that give allocations to their own teams. They go down to their own teams to receive what they have given to their teams. This is a clear conflict of interest and infringes on good corporate governance. Even the PSL board manages the second tier of the South African league and decides who must be promoted to PSL.

The Chairperson thanked the DG for the presentation and congratulated the SRSA for another clean audit and for dealing with the issues the Auditor-General raised. This is lacking in many departments and it is good that other colleagues are being groomed to take over the baton.

Discussion
Mr Hattingh wanted to know what was going on in the North-West province. There is a R320 000 without a penalty yet they under spend approximately another R500 000 and on top of that another R5.6m was approved. They seem to be perpetual offenders.

Mr Khawula asked about the transfers and the federations. An amount of R56m was transferred to the federations. The federations also received transfers from the provinces; are there consultations before these things happen? There might be duplications and how does it work? The outreach programmes in rural areas: netball league for instance has provincial games but more often than not those provincial teams are urban based. In reality these are not provincial teams but metro and big city teams. What programmes are in place to ensure these teams are not biased towards urban teams but are more inclusive to the entire province?

On the MOU between DBE and SRSA, when the Committee was making an input on it, it commented the duty of DBE is to teach, what is it going to take to make it work? The DG needs to look into it and ensure that teachers are given something extra so as to be happy to do extracurricular activities.
When the Annual Report was presented last year, the Committee complained on the mass participation allocation was spent. Does SRSA monitor how this fund is spent and make sure they are producing results? Gauteng was given R83.16m and spent exactly the same amount’ same has happened in KZN and Northern Cape with their allocations. It cannot be. This should not be for compliance purposes alone it should benefit the people.

Ms Dlamini also congratulated the Department for a clean audit.
Looking at the presentation one might think all is going very well, which is not true. The reports should translate to excellent performance. What does the report mean to the beneficiaries of your services? After the explanation of the DG, she now understood the problems of Bafana Bafana and the complexities thereof. One cannot be a referee and a judge at the same time. Something has to be done, but how we do not know. Bafana cannot be fixed with the situation as it is. What informs the mass participation programme amount allocation for Mpumalanga?

Ms P Samka-Mququ made an input in isiXhosa

The DG responded that before schools’ sports was compulsory for all learners and every learner was expected to play some sort of sport. But right now, school sport is made an extracurricular activity and no longer compulsory. Also, the idea of physical education has been done away with. Now Physical Education (PE) is replaced with life orientation and it has a compendium of thirteen different things. So, teachers drawing up lesson plans are not expected to include sports. SRSA believes that PE be made compulsory in schools again. If the law says schools’ sports are compulsory and there is a willingness to follow it through, we shall get it right again. That is the basis of SRSA engagements with the teacher unions for teachers to dedicate two hours extra for sports. It will be reinforced when the Education Amendment bill is passed into law. Right now, the powers lie in SGB to determine what sport is played or languages taught in schools. Most of them decide they are a rugby school or arts and culture school etc. With it we want the Minister to gazette that the big five sports of Netball, Rugby, Cricket, Football and Athletics be made compulsory in schools and the powers must rest with the Minister and not SGB.

On the issue of the Lotto, SRSA called for its establishment and when it came it was intended for sports but SRSA became the least beneficiary by being allocated only 10% of the funds. The rest now goes to charities, NGOs and even arts and culture gets allocated more than the Department. That 10% is not enough to do anything significant added to a cooling off period tied with the allocation. New regulations state that government representatives cannot be on the board and the lotto board decisions cannot be influenced and a lot of other issues.

The issue of finances is being monitored fully. The provinces that receive SRSA grants first spend all SRSA money before spending their provincial equitable shares. Whatever they receive from SRSA is always all spent. That is why figures are exact. On transfers to federations and provincial departments, SRSA ensures that there are no duplications. SRSA shares the same framework that is used for funding. It is divided into two tiers; one is administration. Certain federations that have sufficient revenues are not given funds for administration such as SAFA, Cricket and Rugby. On the second tier which is more conditional the funds are split and earmarked specifically for schools’ sports. Not all the provinces have funds they transfer to the federations which have to look into because it then means that certain provinces are ahead of others. On how the formula used to allocate funds to the provinces, all provinces are allocated a baseline amount of R20m and look at other priorities they have such as additional training centre, pilot studies they are having, and number of events. Money is then allocated accordingly.

The meeting was then adjourned.