Arts and Culture funding; Fruitless and wasteful expenditure: DAC briefing

Meeting report

Opening the meeting, the Chairperson referred to the previous meeting with the South African Cultural Observatory (SACO) and said it did not make sense for a project that was successfully hosted by the Nelson Mandela Metropolitan University (NMMU) in Port Elizabeth to go out on tender.

She said that the Department of Arts and Culture (DAC) had been lacking in consequence management since the beginning. The Committee wanted it to improve before the end of its term. She asked the Department to explain why it could not do for SACO what it did for other non-profit entities.    

Department of Arts and Culture (DAC): Overview

Mr Vusi Mkize, Director General: DAC, noted the concern about SACO’s contract and agreed that the project under the NMMU had done exceptional work. Although the Department could not stop the tender he would consider the Chairperson’s advice. Regarding the achievement of targets, the half year assessment had categorised the Department’s performance. Targets had also identified and it would be a process to monitor the targets.

Regarding the White Paper, he said that there had been meetings with SACO and the reference group, who had asked for a timeline. An update would follow.

Mr G Grootboom (DA) interrupted and said it sounded like Mr Mkize was having a monologue and, with due respect, asked if he was speaking to all of the Members, or only to the Chairperson.

Mr Mkize said he would project his voice better.

Ms Matildah Mogotsi, Deputy Director General (DDG): DAC, said that a socio-economic assessment for the White Paper was under way. A second report was submitted and the plan was for different departments to meet and for a report regarding that input to be out by the end of November. Submission to Parliament was planned by the end of the financial year. A fourth draft, which had incorporated several inputs, was out and the DAC was waiting on the Department of Planning, Monitoring and Evaluation (DPME) to finalise their processes and issue certificates.  

DAC: Expenditure issues

The Department provided an update on the Public Protector’s report on South African Roadies Association (SARA), a breakdown of the amount spent on Africa Month since 2015, the amounts spent on local artists during festivals, and the exact amount spent on National Days.

The DAC had received notice to oppose from the SARA. The Public Protector had also delivered the record of proceedings to review. The Department’s legal counsels were studying the Public Protector’s record in order to determine whether or not the DAC’s review application needed to be supplemented. If required, the counsels would prepare the relevant supplementary papers.

In 2015, R61 987 000 had been spent on Africa Month. In 2016, R42 756 750 had been spent, and in 2017, the amount spent was R35 674 879.

At several of the festivals, more than half of the money given by DAC was spent on local artists.  

Regarding National Days, the marketing and communication budget amounts had not been included in the total budget amount of R12 206 618.

Discussion

The Chairperson asked if the Department was saying that when an event was planned, the costs of marketing and communication were not included.

Mr Mkize said that that was an error that should be corrected, because money was spent on communication. He asked his colleagues to elaborate, as the practice had been not to include the marketing and communication costs since before his time (he had been appointed only at the beginning of September 2017).  

Ms V Mogotsi (ANC) said the Committee and the Department were talking about National Days, where marketing and communication should be a priority and not something additional. The Department needed to say what had happened to the money.

Mr Grootboom asked if Youth Day and Women’s Day should not be organised by the National Youth Development Agency (NYDA) and the Office of the Status of Women respectively. Why should Arts and Culture take that responsibility?

Ms Matildah Mogotsi explained that the DAC sits with other key departments, such as the Department of Women in the Presidency, when planning National Days. It had the budget for the National Days, and it was the lead department. There were arrangements with the Government Communication and Information System (GCIS) to take care of some of the marketing responsibilities. All the events were on national TV and in national newspapers, specifically “Morning Live,” because marketing and communication was part of the planning. Sometimes the DAC had the money, and at other times other Departments did the procurement for them.

The Chairperson said she was confused. One day the DAC pays, and on other days other Departments pay. Could the Committee have a clear answer? Was there a clear answer? The DAC needed to be clear when they were budgeting.

Mr Vusithemba Ndima, Deputy Director General (DDG), answered that the Department was managing all the National Days because of a Cabinet decision in previous years that gave responsibility to the DAC to be the coordinator of National Days. He fully agreed that there needed to be consistency and credibility regarding funding. When working with other departments, the DAC discussed finances, especially when it was a special year, like the Women’s Day of 2016.

Ms Matildah Mogotsi added that the DAC writes letters to the provincial departments to inform them what would happen and the provincial departments were responsible for mobilisation, transport and catering, for example. Thus costs were shared. She agreed that that breakdown needed to be shown.

The Chairperson said the manner of reporting raised more questions than answers. As the Members said, clarity was needed. She believed that the questions asked by the Committee would assist the Department to look closer at issues and plan more clearly. Government did not operate by departments thinking on their feet. Planning was needed.

The DG agreed. The Department would review the whole model, including planning to review and streamline the Department. Marketing and communication should be part of a bigger budget. The Department would also develop a clear template on reporting on these matters.

The Chairperson asked if the DAC was happy about the amount that went to local artists. It had to ensure that local artists benefited, because that was what the Department was about.

The DG said that the artists charged according to appearance rates. He agreed that the DAC should empower artists and transform the sector. The approach was geared towards achieving that. Artists would quote, and the DAC would spend according to the quotation.

The Chairperson said she wanted to ask the following question to make the DAC think: what would happen if a quotation of R400 000 was received from Johannesburg, and a quotation of R5 000 was received from Port St Johns?

Mr Charles Mabaso, Chief Director (CD): Cultural Development, DAC, answered that normally the further artists came from the higher their price was. For a normal festival in a stadium, there would be around R500 000 or R800 000, and the DAC would go to the artists and ask them to review their quotes if needed.

The Chairperson asked if the DAC ever said to a local artist that they could not pay R5 000. Did the Department ever have it in their hearts to say that R5 000 was not enough for an artist’s performance?

The DG said that the DAC had to be guided by procurement processes and could not set unfair precedents. He said that using the heart was very dangerous.

The Chairperson reacted strongly, and said that she was now clear that the DAC was not about artists. The DAC did not have time for artists.

Mr Grootboom said the DG had touched on a sore point, because artists could say they wanted R5 000 and the Department could say the minimum was R20 000, for example, and tell the artists that they would give them R5 000 if the artist would give them R15 000 back. That was what was happening. The DAC needed to send benchmarks for rural areas and benchmarks for city areas. Artists must know that if they go to a stage in Gauteng, they would get R20 000, for example.

The Chairperson said that that was what she was saying. The system devalued artists from rural areas even if those artists were good and knew they were good.

Ms Mogotsi said that what the Chairperson said was not only relevant to artists in rural areas, but up-and-coming artists as well. Would the DAC address what Mr Grootboom was saying about benchmarking? The Department talked about a supply chain, but had to start where they were. Maybe R20 000 should be the minimum. Maybe in the future, the Department should be clear on that. Raising the matter of discrepancies and record companies, she said that the DAC should close the gap and that there were many artists crying and the Department was not there.

Mr Mabaso said in KwaZulu-Natal (KZN), artists were working according to the system that was suggested. He also mentioned that artists there were being paid an honorarium.

Ms Mogotsi responded that that meant KZN was leading the Department, when it should be the other way around!

The Chairperson said it was important for the DAC to sit down and say how much local artists would benefit from festivals before finalising the budget. There must be a way to ensure that local artists would benefit. She also wanted to know if provinces gave feedback on the R1 million they got from the Department.

Mr Ndima replied that the condition was that provinces had to provide business plans. The DAC wanted Africa Month to be inclusive of, and beneficial to, the whole country and not only Johannesburg, Cape Town and Durban. There were conditions to the money given.

Ms Bilankulu said she was not satisfied, because a very simple question “were you given feedback” had not been answered. She said the officials looked at each other before answering. The question was supposed to be answered by admitting that there was no feedback. The Department was not monitoring. They were only spending the money that they needed to spend.

The remark was greeted with soft laughter, also by the Chairperson, who commented that they could hear even what the Department was not saying. It was important for the Department that the information that they gave the Committee was the truth and nothing but the truth. Another matter that lacked feedback was the matter of libraries. What happens after the Department provided money and a library was built? How did the Department ensure that there was not a gap, as there was now, between the DAC, the provincial department and the libraries? A way needed to be found to close that gap. In the following year, time should be spent on that.

Ms Mogotsi said that early in the following year, time should also be spent by the DAC to clearly outline concepts in terms of the Mzanzi Golden Econony (MGE).

The Chairperson said the following year would go so fast that they would wake up and it would be over. The Department should know that the Committee was not asking for the information to have fun or to be mean. Information which may even be shocking for the Department itself, needed to be sought. The DAC should focus on not only musicians but, for example, crafters as well. The DAC was in the right space to change society, but it seemed unaware of its power and there would be change only when the Department did the work that it was there to do properly. The DAC could make people realise who they are, what their potential was and how to tap into that potential.

She continued her passionate plea by saying that even if South Africa had a strong and growing economy, and people had houses, all that would be destroyed if people did not know who they are. The Minister had said that people should not be recognised only when they were dead. Being successful was not something that one woke up to one morning. It happened only by doing the right thing all the time. Little things led to success and the Department should realise that success rested on how they treated artists. If the Department treated artists with respect - in a way that the artists themselves could feel and sense - then society would treat them with respect as well. People budgeted more for catering than they budgeted for paying artists. The Committee would support the Department, and if it needed help in the Northern Cape, Mr Grootboom would be there. Artists should know and feel that somebody out there was really keen on empowering them. The nature of an artist was to create jobs, not to seek jobs.

The Chairperson said the Department was non-responsive. She did not want to sound like a broken record, but the Department should communicate better with people, even if when there was negative news, like unsuccessful applications. The Committee was not saying that the Department should break all the laws to make sure that artists got what they deserve, but within the legal framework artists should get what they deserve. Money given to festivals should not enrich the Department, but the people out there. Also, people should not depend on the Committee, but on the Department.

She asked why there was had been a drastic reduction in the budget for Africa Day.

Mr Ndima replied that the DAC could not spend as much as in the past because government resources were shrinking.

Mr Grootboom said the biggest reduction in the budget was in the area of communication and marketing -- from R21.6 million to R6 million -- and said that the Chairperson’s question was relevant.

Mr Ndima said the Department had used service providers for marketing and communication in the past, and now the Department was handling it internally.

Mr Grootboom asked about the South African Roadies Association (SARA) and the funding breakdown. There was an R800 000 amount for SARA on the technical events conference. As there was still a dispute with SARA, was this the same amount that was mentioned on p3 of the “Matters Arising” document?

Mr Mabasa answered that as part of implementing the DAC’s sector strategy, different organisations were supported. SARA did the technical conference, but it was separate from the other proposals.

Concept document: Community Conversations.

DG Mkhize began the presentation by sketching the background to the community conversations which emanated from the resolutions of the national social cohesion summit.

While South Africa was a thriving democracy and had registered one of the most peaceful political transitions in modern history, the legacy of the past continued to linger on. There had been recognition of this social reality at the highest level of leadership, as evidenced by a plethora of legislative instruments aimed at addressing socio-historical injustices.

There were also lingering questions on restorative justice in general and reparations in particular. Radical transformation had yet to bear the desired fruits, and a vast majority of those disadvantaged by apartheid continued to remain on the margins, as the economic apparatus remained very much in the hands of white monopoly capital, even as the government continued to intensify efforts around the redress agenda.

The national strategy for developing an inclusive and cohesive South African society defined social cohesion as the degree of social integration and inclusion in communities and society at large and the extent to which mutual solidarity finds expression among individuals and communities.

Discussion

The Chairperson interrupted the presentation on p9 of 16 pages, and said what was needed was case studies, and for the Department to give factual examples.

The DG replied that there were such examples, and mentioned the involvement of advocates. There were also examples of direct involvement by the Department, and these could be provided.

The Chairperson said the document and presentation was doing well in outlining the matters of transformation and social cohesion, but where “the rubber hits the road,” examples were needed. It should not be a case of conversing for the sake of conversing. She said that the names and numbers of the mentioned advocates should be provided to the Committee, also in case the advocates needed assistance.

Dr P Mulder (FF+) said he wanted to speak from his heart. As he moved around in the country, he was of the opinion that the country was in the worst position ever on the issue of social cohesion, and their “poor” Department was tasked with addressing this situation. He was at the end of his political career, although he would go back to work in his community. Having just written an article on the topic of nation building, he could share that, other than in European countries, matters of language and race could create artificial boundaries in Africa. One just had to look at Nigeria to see how tense people in that country could become. One could force people into a lot of things, but one could not force them to change their minds. The same went for nation building. If people did not want to cooperate, they would not cooperate. One could have conversations and give people information, but silos of perceptions still existed. Unity in diversity was another approach, for diversity could not be ignored, but it should not be overemphasized because that led to racism.

He referred to a section of the document where it said that a nation became a cohesive collective when certain elements could be evident and accounted for. Many of the elements, like a shared indigenous language and a shared consciousness of forming a homogenous group, were things that South Africa did not have. That might work for Europe and Botswana, but South needed something different. He strongly believed that leaders determined the atmosphere in country and the atmosphere was different now compared to what it was in 1994.

Dr Mulder said one of the slogans in Mozambique was, “for the nation to live the tribe must die,” but everything had died but the tribe. In most African countries, a recipe was used to find a scapegoat -- such as the Belgians, the French or the British. It was easier to unite people against something. However, the same recipe could not be used in South Africa – which was something he had discussed with Nelson Mandela over breakfast more than once. We were all here. The Asians came and they stayed here, the Afrikaners came and they stayed here, and they would stay here.

Leaders were now blaming each other when it was the leaders who could make a difference. Leaders should define the atmosphere that filtered down, and those lower in the line those who defile that atmosphere should be removed. The opposite was now the reality, where leaders were saying things like “you are the trouble”, “blacks are causing farm murders”, “whites are causing racism” and the poor guy down the line who tries to talk reconciliation is out of line.

Dr Mulder shared with the Committee that he, as a father of five children, had brought three who were living overseas back to the country. His daughter, a medical doctor, had lived in London for eight years and ran a successful practice in Canary Wharf. When she asked him if she should come back he had told her to not watch the news for three months and then come back.

He said he was an African and a proud African, something he would argue until the day of his death. Leaders could not blame and do what they did, and then task the DAC with social cohesion and nation building. The recipe needed to change. Regarding what unity and cohesion meant, he said that all he wanted was to be himself in South Africa, but it was complicated because he was an Afrikaner and he would always be an Afrikaner.

He closed by saying that when the ships sink or the forest burns down, all would sink and all trees would burn.

The Chairperson said that she hoped the Committee and the Department had listened. The attitudes of people could not be legislated, but the outcome of the situation was on the DAC’s plate and it could not be run away from. The DAC needed to be creative and say how it could deliver on the mandate.

Mr Grootboom said it was important to remember that engagement in the Portfolio Committee was about all South Africans and not just a group. The Department had not reported back on the digging up of Khoisan graves, or houses to be built in Athlone. It seemed that some graves mattered and some graves did not. If South Africa had been declared a secular state, why was the Department sponsoring Gospel festivals, such as Afrigospel. The right hand must know what the left hand was doing. If one followed one pattern, let white be white and black be black. Should he ask the Minister about the document on the MGE funding, or could the Department answer?

The Chairperson asked about a policy on exhumation. It was very important to have a policy, and the Department should tell the Committee if it did not have a policy.

Ms Mogotsi said social cohesion touches everyone in different way. It was deeper than a shared indigenous language or an education system. Each one should assess themselves in dialogue and community conversations. South Africans needed to come together. She asked the DAC about moral regeneration and why the Department waited for something to happen before being active. She mentioned fighting in Hebron between immigrants and the police the day before. Safety was a broad issue.

The Chairperson thanked her and said it was a conversation that should be held and that perhaps other committees should be invited for that conversation.

Dr Mulder said in 1994 they had been forced to sit at a table week after week and talk to each other to write the Constitution. The basis of talks were about where people were from, what their background was, why they thought the way they did and if it was the right way to think. He was afraid that was all lost now.

The Chairperson said: “We had it. We lost it. We must find it.” She hoped that the Department would take that forward. Space needed to be created for people to say what was in their hearts without being judged or offending anybody. She asked if they could continue with the thorny matter of fruitless and wasteful expenditure.

Mr Grootboom said the question on the policy of exhumation had not been answered yet.

Mr Ndima answered that exhumation was dealt with within the parameters of national legislation. A policy on exhumation could not be divorced from repatriation, and that was where the challenge lay -- not only with moving human remains, but taking heritage objects as well. There were situations where families wanted their deceased to be brought back into the country with certain heritage items. The DAC was working on that policy.

When development surveys discovered archaeological remains, it became a complex provincial or national matter, as families could not be identified. Currently the Department was having provincial consultations. Mr Ndima requested time to respond appropriately, as a draft would have to go through processes and clusters.

Mr Grootboom said a doctoral thesis on the repatriation of human remains had been done at Wits University. The details of the student, who had received funding from the South African Heritage Resources Agency (SAHRA), could be provided.

The Chairperson thanked Mr Grootboom.

Fruitless and wasteful expenditure 2016/17

Mr Makoto Matlala, Chief Financial Officer (CFO): DAC, said that in the 2016/17 financial year, the Department had incurred fruitless and wasteful expenditure of R492 000. This was mainly due to venue cancellations and interest paid on invoices received. The trends of fruitless and wasteful expenditure indicated that there had been a decline from R11 million in 2013/14 to R492 501 in 2016/17. However, there had been an increase of R272 943 compared to the previous financial year. This was mainly due to cancellation of venues. Measures had been put in place to monitor expenditure patterns to prevent fruitless and wasteful expenditure.

The breakdown for 2016/17 was as follows:

• R447 000 for the cancellation of sector consultations towards the social compact.
• R33 000 paid for catering services not cancelled.
• R13 000 paid for interest on overdue accounts.

Interventions to prevent fruitless and wasteful expenditure were:

• Training on finance for non-financial managers, Treasury regulations and supply chain management policies and procedures.
• Awareness campaigns by distribution of updated/revised circulars and practice notes.
• Implementation of procedure manuals and standard operating procedures.
• Review of monthly scheduled and recurrent payments.
• Develop a proper plan for annual and special events.
• Implement consequence management.

Discussion

The Chairperson asked what had happened with the venue that incurred so much cost.

The CFO admitted that the venue had been cancelled at the eleventh hour by the Minister.

The Chairperson said the Minister’s speech could have been given to somebody to read and the message could still have been conveyed to people, as everyone was there already. It was not necessary for R500 000 to have gone down the drain.

She said that people were being held accountable for things that had happened two to three years ago. How were they even expected to remember what had happened during those days? Consequences should be imposed immediately. She added that the Committee appreciated that fruitless and wasteful expenditure was being dealt with.

Dr Mulder said individuals making bona fide mistakes were something that happened everywhere, but what was learned from the mistakes was what was important. If the figure was correct, 216 Directors General had been moved around in the last five years, making continuity and learning from the past difficult. Was there any way to give feedback within the Department to prevent the same mistakes from happening?

Ms Mogotsi asked the CFO if his office had a finance and risk committee, as that was where sub-directorates would send their budgets. Did such a committee not see the risk coming? Where was the legal team of the Department? Also, if the Minister and the Deputy Minister was not there, the Department would not function. As much as there was consequence management, it went back to senior manager as documents needed to be signed. She drew from her experience as a public servant when she said that all these procedures -- funds above R500 000 needing a tender, for example -- were there. She felt sorry for the DG, because the matters raised were from before his time. The DAC was not doing justice to the people of South Africa, who were dying of poverty. Poor artists could not even be paid.

Mr Grootboom said it was also important to give credit where credit was due. He commended the Department on reducing fruitless expenditure from R11 million to less than R1 million. He asked if the officials mentioned in the document had been suspended, or if the money had been paid. The term “written off” would then be incorrect. About court cases and litigation, he did not see it featured. He also asked for feedback on the R20 million that had been set aside for dismissed officials of the Pan South African Language Board (PanSALB), as he had not seen that information in the document.  

The Chairperson asked the CFO to respond.

The CFO answered that the Department did have a risk committee, which recommended action plans for every unit each year. Some of the action plans tied together with audit action plan. There had to be a mitigating action, and that was how it was addressed. As the years went by, the number of transactions had decreased because of this intervention.

When an official was suspended, because of legislation he/she would still receive a salary, but that was defined as fruitless expenditure. The accounting official had recommended that it be written off, although it was exposed.

The DAC would still come back to the Committee about litigation issues and court cases as it was still reviewing responses from relevant officials and looking at what was in the representations.

The DG added that one of the DAC’s key mandates was to follow the money. That was why the Department needed an infrastructure project team to monitor the projects that were being funded. Service providers should be held responsible. To make sure all infrastructure teams worked together, that was being implemented now. The DAC had also learned that it should make sure that people planned in advance. There was a process that would be looked at.

Ms Mogotsi asked why the Government Employees Pension Fund (GEPF) charged so much interest to the DAC for money owed.

Ms Bilankulu said much as the reduced fruitless and wasteful expenditure was appreciated, the DAC had to take note of the Committee’s serious concern over the pace at which it was addressing fruitless and wasteful expenditure. It was not a mandate or a law to have fruitless and wasteful expenditure. The team that was advising the DAC was not doing it correctly, for there was too much money being lost and corrective measures had not been taken for many years. Still, the Department was saying they were going to deal with it. It sounded as if that was not going to happen immediately. Something was not right in the Department. Was it implementing the findings and advice of the yearly internal audit?

Dr Sakiwo Tyiso, Chief Director (CD): Planning, Monitoring and Evaluation and Governance responded to the question about the settlement costs of PanSALB employees by saying Mr Grootboom was right that that money should fall under the category of fruitless and wasteful expenditure, because it was paying for services that had not been rendered. Some employees had settled with PanSALB, which meant an amount of R6 million had to be qualified as fruitless and wasteful expenditure. The rest of the employees had not yet settled with PanSALB. The process was still on-going. A separate report had been prepared for public entities.

The CFO answered the question about the GEPF by saying that when an employee went on pension, the GEPF paid out the full amount to them, therefore not disadvantaging them. However, sometimes the Department had to refund the GEPF for a difference and if the Department delayed there was interest to be paid. Interest also had to be paid on the late payment on building rentals. Pay as you earn (PAYE) had to be paid by the 7th of each month. If not, it also resulted in fines or interest.

The DG said the root causes had to be identified. That was part of the plan -- not to attract more interest. Part of the DAC’s audit action plan was to make sure that they took into account what had been raised, to make sure that it would be monitored with an invoice tracking mechanism, for example.

The Chairperson concurred with Dr Mulder that while fools learnt from their mistakes, clever people learnt from other people’s mistakes. It was, however, encouraging that the DAC had started to look at this. People should be assisted to do what they should do, but if they failed to do that, measures should be taken. Looking at the document on entities, which had not been presented on that day, she noticed that there were entities who had not submitted information. The DAC should go back to these entities, and that information should not be discussed on that day. She asked why the Moral Regeneration Movement was not included anywhere.

Dr Tyiso said that the Department now had more clarity on the Committee’s requests. He asked if the Committee wanted information on all non-profit organisations (NPO’s).

The Chairperson reminded Dr Tyiso that the Department had said that 80% of its budget went to entities, and that they had explained that that also includes non-profit entities. It was clear what was needed.

Mr Grootboom said he would like to see SARA before the Committee.

The Chairperson said when taxpayers’ money was given, people must account. The rest of the documents would be presented at another meeting. She concluded by thanking the DAC for better organised presentations. She asked them to keep improving and do the right thing the first time. If 80% of the budget succeeded within the entities, the DAC would succeed. Lastly, she asked what happened to the African Union (AU) anthem. It had been lost and it should be found.

The meeting was adjourned.