Sports and Recreation SA Quarter 2 performance; Ministerial Committees of Inquiry; SASREA Board Annual Report; with Minister and Deputy Minister

Meeting report

Election of Acting Chairperson pending arrival of Chairperson
The Committee Secretary informed Members that it was necessary to elect an Acting Chairperson for the meeting due to temporary absence of the Chairperson, who was running late as a result of the marathon ANC National Executive Council Meeting the previous night, which had lasted into the early hours of the morning. Mr S Ralegoma (ANC) was elected Acting Chairperson.

Deputy Minister of Sport and Recreation: Overview
The Deputy Minister of Sport and Recreation, Mr Gert Oosthuizen, apologised for the late arrival of the Minister and Director General of the Department. He stressed the importance of the meeting in which Parliament holds the Department to account on its performance and use of allocated resources. The Department would present progress on financials, and its performance on a quarterly basis. The DG and other officials would provide a detailed report on financials and performance on the second quarter and also highlight the challenges in the second quarter. Most of the expenses in this quarter are for the upgrading of the Department’s aging ICT infrastructure, which in turn will aid improved performance.  Committee Members may be alarmed by the increase in transfers, the DG would provide all the details.
The Department highlighted that in programme one a record 100% payment was achieved on invoices within 30days. This shows that the Department’s supply chain management is functioning effectively and is good news for suppliers and small businesses. Progress has been made in the legislative and regulatory sphere leading to promulgation of the Safety and Events Regulation Act in the government gazette. The National Sport Amendment Bill has also been submitted for approval, and likewise the South African Institute for Drug Free Sport (SAIDS) amendment Bill.
On infrastructure support to municipalities, the DG would provide the details on the ring fenced municipal infrastructure grants details. Challenges exist in the active nations programme from some of the provinces which has impacted on performance.  Active engagement is ongoing with provinces to address these challenges.
Challenges were also faced on programme four, sport support. Similar challenges were experienced with the reporting of sports and recreation bodies and engagements are continuing with the bodies to address the problems. The Safety at Sports and Recreation Events Act (SASREA) as well has administrative issues to be addressed. Finally, the SASCOC and FNB ministerial inquiries are up and running and presently taking submissions.
On SASCOC inquiries, following engagements with the Department and SASCOC board, it was agreed that a costly legal route will not be pursued. SASCOC is fully committed to the inquiry and a meeting last Thursday reiterated the importance of the inquiry, which is to strengthen good governance. Similar engagements are expected with stakeholders of the FNB inquiry in days to come.

Second quarter performance 2016/17 financial year
Ms Sumayya Khan, Deputy Director General (Chief Operation) at SRSA took the Committee through the second quarter performance of SRSA. The purpose of the presentation was to provide an overview of what transpired in the 2nd quarter of the financial year (2017/18). The report reflects progress to date against key strategic objectives and annual performance indicators as reflected in the Department’s Annual Performance Plan (APP). The report was submitted to the Audit Committee, National Treasury and DPME for performance monitoring purposes as prescribed. The report focuses on performance information as verified by the 1st line of defence (respective line function units) for quarter 1 and predominantly preliminary information for quarter 2.

In Q1 performance, SRSA achieved 79% of its targets (15 achieved and 4 not achieved) while that for Q2 stood at 80% (20 achieved 5 not achieved). No target was set for programme 1 in Q1 (performance assessments moderated for the previous year) as per APP under Administration Achievements.

In programme 2 under the Active Nation category; out of the 5000 UNITE campaign targets set, only 475 was achieved. The reasons for the non-achievement is because the Eastern Cape Province misplaced evidence for 3000 participants. However, an updated report will be submitted in Q3. Under the number of people actively participating in sport promotion campaigns and events per year; Rural Sport Development Programme (RSDP) APP target was set at 1836, 2696 was achieved and is attributed to the increase in the popularity of the SRSA events. For the number of people actively participating in organised sport and active recreation events, a target of 500 000 participants was set, only 172 818 was achieved. A province wise breakdown was provided and the provinces will be followed up for better reporting.

Quarter 2 Financial Report
Mr Lesedi Mere, CFO, SRSA, presented the 2nd quarter financial report.
On Departmental financial performance as at 30 September 2017, overall spending at R474.7 million represented 44.5% of the total budget allocation of R1.066 billion; Compensation of employees 47.6% totalling R50.5; Expenditure on Goods and services 46.6% totalling R75.3 million. Expenditure will increase in the third quarter when IG, NRD, SASRecon and Big Walk payments are affected. Transfer payments’ spending is at 43.5% totalling R346.5 million out of a budget of R796 million.

Programme 1: Administration
Total budget R127, 856m, expenditure R67, 527m, and available budget of R60, 329.

Programme 2: Active Nation
Total budget R704, 081m, expenditure of R332, 232m and available budget of R371, 849m. It was noted that there was under spending on Transfers due to penalties on DORA transfers in Quarter 1.    

Programme 3: Winning Nation
Total budget R71, 911, expenditure R28, 194 and available budget R43, 717
Under spending on Transfers is due slow receipt of invoices from schools/universities (Ministerial bursary)

Programme 4: Sport Support
Total budget R150, 661m, expenditure R42, 151m, and available budget R108, 510m. Under spending was noted on transfers due to slow transferring to NPIs and other compliance issues.

Discussion
Mr D Bergman (DA) was concerned with the reliability of information contained in the second quarter financial report. One of the complaints from the Eminent Persons Group (EPG) on Transformation in Sports was the reliability of the data they received, and the reliability of information from the provinces is uncertain. In terms of monitoring progress, the Department itself is unsure of the data received from the provinces. There is a case of where the panel members could not even sit because of their engagement in another department’s events; in this case you wonder what is more important than their reporting functions. The standard of reporting from the provinces to the National Department is at best inconsistent, which is another name for unreliable. The hope is that in Q3 there might be a review of Q2 information.

Mr L Ntshayisa (AIC) asked the reasons for non-achievement of set targets. Are gyms constructed in the rural areas? It is not enough to construct gyms in urban areas and in the townships.

Mr M Mabika (NFP) was concerned with programme 2. The Committee was given a report that did not offer reasons for provinces noncompliance or even submitted their own reports to National Government. This report is not telling the Committee anything or even what the Committee wants. The Committee expects reports from the provinces that are submitted to National Government. What is the Department doing to ensure compliance because the provinces are mandated to comply and they should have no choice in the matter? The Department writing in their own reports presented to this Committee that they are not getting legally obligated reports from the provinces is very unfamiliar. It is not enough for SRSA to say Eastern Cape or any province for that matter did not give reasons or submit reports.

Mr T Mhlongo (DA) welcomed the report but with reservations because it is difficult for the Committee to perform their oversight duties with this kind of report especially with the financials. When referring to percentages 5%, 25%; is of what? There must be numbers accompanying those percentages. He congratulated the Department on achieving 100% on the 30-day payment of invoices. He was concerned about the high percentage of under expenditure. There is mention of slow transfer of NPIS; what is that? We hate to work with acronyms. What is the percentage in penalties meted out to provinces that fail to comply with prescripts?

Ms B Abrahams (ANC) wanted to know the reason for under spending in transfers because there is much ado about the Department not paying the universities on time.  What can the Department do to speed up this process? What are the consequences when provinces like the Eastern Cape do not comply? Is it business as usual? In Gauteng Province there are issues pertaining to duplicates and unsigned registers; what are the consequences and why the duplicates?  Is there any facility audit plan envisaged? Are all the audits up to date? The committee previously requested audits, when will they be provided? On the community gym facilities, which provinces will benefit eventually? Are all the MOUs signed?

Ms Manana congratulated the Department on their achievements, especially for paying service providers within 30 days. She asked what interventions are taking place in the provinces to ensure they too comply? On the Q2 performance report, clarity should be given on client satisfaction survey report. On infrastructure, though effort was made, SRSA need to be harsh on the municipalities. Our communities must be assisted on MIG infrastructures. The underspending on the transfer was caused by the invoices; were there any follow-up with the universities? On the quarterly report by CFO, is SRSA happy with the Department’s overall summary of 44.5%?

The Chairperson apologised for coming late and asked why of the nine provinces only two are doing well with the Division of Revenue Act (DORA) transfers? This is a horrible status. It is understandable that penalties are being meted out but such penalties heap more suffering on the already vulnerable communities. When will these penalties send the required message?

Mr Alec Moemi, DG of SRSA, responded on the issue of data from the provinces, that the Department learnt some lessons in 2012/13 financial year. Back then SRSA took what provinces submitted at face value and recorded them as achievements, only to be subjected to a performance audit. SRSA was fortunate that in that financial year, the Auditor General used the data as a trial run and preparation for a trial of performance audit. Had they done a performance audit that year, SRSA would have had a qualified audit outcome because the portfolio of evidence was found to be suspect. Since then the systems of SRSA have been improved to be a bit robust after consulting the Office of the Auditor General (AG) to give SRSA the standards they would accept and this is encapsulated on indicator discrepant framework which explains every performance indicator captured in the APP. SRSA is now able to foresee the type of evidence the AG is looking for. If for instance you have an event at a primary school, they would insist that not only a list of names is captured, but the IDs of participating children are captured, the school stamp per form and the signature of the principal. SRSA now subjects the provinces to comply to this method otherwise the data is discarded. So, all information disseminated in each quarter is information that has been validated by SRSA and would pass the AG’s test.

SRSA have improved validity though it still has cases where provinces do not meet the requirements and the provinces are aware of indicator prescriptions. SRSA have HODs in provinces to sign up to those indicators so that they know the standards that are acceptable. SRSA also now knows that HODs do not scrutinise the files before sending and they buckle under pressure at the end of the quarter to send files without proper scrutiny. This is an issue that is ongoing and SRSA want to tackle.
SRSA do not believe that the reporting function should supersede that of delivery and SRSA always meets its targets and has never failed this Committee. Should a province not meet SRSA requirements, before SRSA even go to the schedule of penalties, it will first engage with the errant province and even send SRSA staff or second people to help them with administration to ensure that they comply because it is in the Department’s interest to give them the resources to enable them to comply otherwise SRSA have to surrender the money back to National Treasury and that is not a wise action to take when you have a limited budget for the portfolio. Penalties range from 5 to 25%; 5% for a small misdemeanour for instance when provinces have submitted a report but the portfolio of evidence is incomplete and 25% when they have totally failed to give in any report at all and this penalty comes off their quarterly grant. The motive is not to be punitive but to encourage them to comply. The new framework now allows SRSA to reallocate penalty money docked from non-performing provinces to a performing one.

The community gyms and play parks are in rural areas, even in communities of 30000 people. The Grant framework insists that SRSA spend 30% of allocations in rural communities although it cannot ignore the townships because that is where the majority of the population live.  

On the question if SRSA is happy with an achievement of 44%, yes, because its allocations are divided into four quarters so should if it should be at 44% in a quarter that is an achievement. Although the majority of SRSA activities happen in the third quarter (summer) because we are a summer country.

On under spending, the majority of the federations has a high turnover because they are staffed with non-professional staff and are all run by volunteers. So SRSA must be careful with regulatory burden on these people because no one else would want to do the work if it is onerous on them.  On under spending on transfers, yes, SRSA do follow-up and our staff visit all the universities that SRSA give sports bursaries.
On the issue of facilities audit, SRSA have scheduled only one and have asked Gauteng to go ahead but the issue of budget is a hindrance. To finish a full facilities count will require a budget of about R18 million and SRSA simply does not have that kind of money. So far SRSA have finished only two provinces, Western Cape and KwaZulu-Natal. All the MOUs and PIS have been signed.

On the client satisfaction survey, it was not a priority for the second quarter rather it is for the third quarter and our management committee has considered it; be reassured that it is included in the SRSA service delivery plan.

As to why only two provinces are performing; all provinces are struggling with capacity to meet the onerous standards that are laid down though there are provinces that are not doing well at all like North West. The penalties regime has forced many provinces to comply, though the DORA Act allows the Department to withhold money for 90 days and not beyond. In this case the Department either has to surrender it to the revenue fund or send it back to the provinces.

The Minister had raised the issue of non-compliance by provinces, the issue he is going to raise should be looked at critically because it does not affect SRSA alone abut all departments. He gave an example of the Department of Public Works (DPW). An asset register was started for the whole country. When it was almost completed the Auditor-General asked what about the provinces and municipalities? Another example was in the Expanded Public Works Programme (EPWP). People were not submitting the proper documents and these were implemented at the lower levels. We are being penalised at National levels because of incorrect information submitted by the local municipalities, and keep in mind these are various spheres of government and it is very easy for an MEC to tell you that we do not account to you rather we are accountable to our political heads and that they are only accountable to the Premiers who appointed them and to their own legislators. The issue of local and provincial governments is a very serious issue that should be looked into. Even when we want to crack the whip we are thrown the Constitution and told to read it. What is left is just cooperation; we are raising this issue at the level of cooperative governance. It is good that the DGs as the primary accounting officers still have a say on how the money is released but when they do that you, the legislators, complain that they are punishing the weak and vulnerable. All the Minister was saying to the Members is that this matter has to be discussed by all provinces and at National level and with the NCOP. This is because national government depends on provincial and municipal spheres for implementation. And this has to be a political debate. If there is no cooperation at this level, it is going to frustrate a lot of services that are supposed to be delivered to the people.

Ms Manana complained that the Committee no longer receives invitations from SRSA to attend sports awards since the arrival of the present Minister. Could it be that the Minister has given a directive to that effect?

The Chairperson added that the present Parliament is now disadvantaged regarding invitations to attend functions. However, the Department must not take advantage of that and not invite the Committee. The Committee is being invited but some kind of complicated protocols have made it impossible for the parliamentarians to be released to attend. The Minister was applauded for inviting the Committee to the Boxing SA award ceremony. Administration ensured that the invitation came very late because of the resignation of the former Committee secretary.

The DG said he informed the Committee of this issue sometime last year and SRSA apologised for not inviting the committee in the two events that happened but since then, every other event that happened the Committee was invited and all the entities under this Department have been instructed to ensure that they invite the Committee to all their events. There was a meeting between government and the leader of government business in the legislature and also the presiding officers.   After that meeting, there was a communiqué expressly indicating the protocols that needed to be followed. Firstly, that individual members of the committees should not be invited to any of the Department’s functions; all invitations should be sent to the Chairperson. An official has been nominated to oversee whether the Committee should honour the invitations or not. Previously the Department used to pay for Member’s flight tickets and accommodation, there is now an instruction that expressly states that the doctrine of separation of powers should be followed meaning one sphere of government should not pay for another. The budget of the executive should not be used to cover the expenses of parliamentarians or Judges in the judiciary. That blurs the line between organs of state. As a result, the departments can only invite but cannot cover any related costs. This does not mean that refreshments/dinner cannot be provided by the Department though.

The Chairperson thanked the DG for reminding Members on this state of affairs.

Update on Ministerial Committee of Inquiry by the Minister
The Minister presented an update on the two ongoing Ministerial Committee of Inquiries. In 2017 the media reported on numerous alleged irregularities and malpractices in the governance and management of SASCOC which have tarnished the image and integrity SASCOC and sports fraternity in general. Some National Federations also wrote to the Minister alleging that the SASCOC Board is not properly constituted. In response to the Minister of Sport and Recreation’s written requests to be advised pertaining to the abovementioned Board related governance and non-adherence issues, SASCOC has only provided the Minister with scantly drafted responses, especially when weighed against the concerns expressed by individuals or registered members of national federations under SASCOC’s jurisdiction which the Minister has received from time to time. Stemming from the above-mentioned incidences it, therefore, became prudent for the Minister to appoint a Ministerial Committee of Inquiry consisting of a retired judge and two members in terms of Treasury Regulation 20, issued in terms of the Public Finance Management Act, 1999 (Act No. 1 of 1999), to investigate and report to the Minister on the above-mentioned Board related governance issues and alleged non-adherence to the SASCOC Constitution. The committee comprises Judge Ralph Zulman as the chairperson and Dr Ali Bacher and Attorney Shamima Gaibie as members of it respectively.

Both Committees of Inquiry have officially commenced with its mandate on 20 October 2017 when its Terms of Reference were published in the Government Gazette. Both committees of inquiry published adverts in the media around the end of October 2017 inviting all role players, stakeholders, the public at large, etc. to submit written submissions to each of these committees strictly pertaining to its published Terms of Reference. Such role players, stakeholders, the public at large, etc. have already submitted their respective representations to these Committees for consideration. During the first weeks of February 2018, these Committees will be tasked to scrutinise all representations received via the media adverts and to decide who, when, where and for what purpose will persons who have submitted their written representations to these Committees be invited to present their evidence orally in person or via their respective legal representatives to it respectively in which they argue that the establishment of both these Committees of Inquiry are illegal based on the following, amongst others:

(a) SASCOC Committee of Inquiry: The Minister of Sport and Recreation allegedly acted in excess of his powers in terms of the National Sport and Recreation Act, 1998 (as amended) (‘’NSR Act’’), Treasury Regulations and the Olympic Charter as motivated hereunder;

(b) SASCOC allegedly not being listed in the Schedules of the said Treasury Regulations as a public entity hence the said Regulations in terms of which the SASCOC Committee of Inquiry has been established, are not and cannot be applicable to SASCOC;

(c) Section 13 (5) (a) of the NSR Act permits the Minister to issue a directive, amongst others, but does not permit him to appoint a committee of investigation per se; and

(d) The Olympic Charter takes a strong position against interferences by national states in the affairs of national Olympic Bodies such as SASCOC

(e) FNB Stadium Committee of Inquiry: that the established Committee of Inquiry is ultra vires and that the Stadium Management Company (Pty) Ltd does not recognise such a Committee or its Terms of Reference;

(f) Instead of establishing a Committee of Inquiry, the South African Police Service
investigation into the tragic deaths of the two unfortunate spectators and the circumstances giving rise thereto must prevail;

(g) The appointment of the Committee, chaired by a judge, is nothing other than the unlawful setting up of a Judicial Commission usurping the President’s prerogatives and contrary to the Commissions Act, 1947 (Act No. 8 of 1947); and

(h) The Government Notice which establishes the Committee is not a “directive” nor has the Stadium Management Company or any other affected party received a written notice thereof and an opportunity to submit written representations as required by section 12(6) of the NSR Act;

In response to these litigation threats, SRSA –

• has referred these threats to the State Attorney for legal opinion, which we are still awaiting. SRSA in essence and in principle is confident that the legal merits to appoint these Committees of Inquiry in the first place, are absolutely warranted and that all applicable and relevant prescripts have been complied with; and
• will oppose any court application that seeks to undermine the legitimate processes which have already been legally executed to establish these Committees.

The Minister said there is the tendency by some people to think they can do as they please and the law is nothing; this must be nipped and people must be made to comply. Everyone must be compelled to go into this process but the nature of the recommendations can be debated.

The DG added that in terms of section 13 of the Sports and Recreation Act, those powers state that the Minister can issue a directive, though it does not specify what the directive is. The directive is intended to correct what is perceived as wrong within common law and what is practiced convention. Previous ministers have relied on this Act to establish commissions of inquiry to investigate perceived wrongdoings. The Acapulco Declaration allows governments to intervene in their jurisdictions. It does not give the federations any latitude and powers not to be accountable. Governments must intervene where South African government laws were broken. 

Discussion

Mr Bergman maintained that some problems were because SASCOC is both an Olympic body and a federation. Sports being an elitist body they do not entertain interference. The Committee welcomes the enquiry but should also be careful when it relates to governance issues. Another worry is the racial undertones, talking about the colour of the committee members. The objective of this committee which we supported was always about good governance and not to play a big brother role bothering on interference and imposition of political will.

Mr Mhlongo said these words interference, intervention, directives, should be discussed in a sports Indaba. They do not link to outcomes or the ultimate goals especially on good governance. Sometimes we hear SASCOC and PSL saying that the ministers are interfering. The roles of these Federations were not properly defined. He asked the Minister if he is interfering, intervening or giving directives? Why do all these federations SASCOC, PSL, always think that we are interfering instead of intervention? What went wrong? is it because we promulgated the Act? It is very important that we call for a sports Indaba so that we can understand where we see ourselves as a nation.   There is this perception that there is political interference. What is the total amount for the Ministerial enquiries and where does the money come from? Is SASCOC an entity that must report to National Treasury? There is this perception that they do not have to report to anyone. No audited financial statements for the past six months and they do not report to the AG. Why an inquiry instead of a commission for PSL?

Mr S Mmusi (ANC) wanted to know from the DG, as a legal person, in law where it is stated the Minister may does it tantamount to must? It was indicated by SASCOC that the PFMA does not apply to them. How could that happen in this country when they are receiving government funds; how then do they account?

Ms Manana said that SASCOC must come to account to the Committee earlier than scheduled. They are fond of misleading this Committee. Some national federations wrote to this Committee alleging that SASCOC board was not properly constituted but they came here screaming. They are doing that because they are getting sympathy from the president of the Rugby board. When next SASCOC comes here we have to interrogate them on the plight of those soccer fans that have to carry the cost for medical expenses themselves. There are soccer fans that are critically injured. We are not going to allow the president of SASCOC to come here with his emotions. We have to be ready for them when they come. Mr Gideon Sam does not respect us.  The dates must be rescheduled.

Mr S Ralegoma (ANC) wanted the amendments to the Act fast tracked.  A clause must be added that the Minister for Sports and Recreation must have the powers to intervene when a dispute arises between federations or wrongdoings discovered and this should be done without interfering in team selections. When that is done by SRSA, the international bodies must be informed of its intentions. He was not sure that another sports Indaba is needed. Just in 2011 a sports Indaba was held and sports challenges were discussed in detail. The Committee should just implement the national sports and recreation plan and we have not even reviewed that plan to start with.

The Chairperson thanked the speakers and told the Department to always endeavour to brief the Committee on what is going on instead of having to read from the newspapers. The Committee fortunately has met with SASCOC and pleaded with them not to go the lawyer route which is often very expensive. The Committee has taken a decision to call SASCOC only when the departments are also available because the Department also funds them. She had attended a SASCOC conference and even spoke with them aside, urging them to find a solution and not resort to expensive legal fight because lawyers are expensive. She even told them that what they are doing is a reversal of our transformation agenda.  SASCOC is not adhering to our transformation plans.

In his summation the Minister said it is now the season for soccer elections. This should prepare them for a lot of things until after the elections. He asked the Committee to follow up on the incident of the beating up of an athlete without undermining separation of powers. The Department will be releasing a very harsh statement calling for investigation. If this kind of incidence is allowed to continue it is going to set us back. There is a fine line between interference and intervention. We have not gone into that space yet. We are not interfering with their affairs, what we are interested in are issues relating to governance.  Sports are run by Empires who have made fiefdoms. Remember soccer was unified under FIFA but suddenly somebody with money wants to run schools’ soccer separately from the main body, which has succeeded in even dividing the teachers. This has to do with big money coming from sponsors. In a nutshell if government put money into any sports body there must be accountability. SASCOC must account to SRSA.

The DG said the issues of FIFA match fixing being advocated; a distinction has to be made between commission of inquiry and a judicial commission of inquiry. Having carefully studied the allegations of match fixing, the Department realised that a ministerial commission of inquiry will be inadequate because some of the people who are expected to give evidence are foreign nationals and will need to be subpoenaed and the committee of inquiry has no power of subpoena whereas the judicial commission of enquiry has the power of subpoena via extradition treaties South Africa has signed which other countries. SRSA does not believe that the terms of reference are one-sided at all; they are wide enough to look at issue of governance and maladministration. Whether there are racial undertones on what SRSA does, remember that it does not prescribe but the transformation imperatives must be taken into consideration. On the suggestions that some federations think that SRSA is interfering, if they do not have anything to hide then they should have no problem with what SRSA is doing and see it as an opportune moment. In the case of SASCOC since they are unable to handle their affairs they should welcome government's intervention to help them move forward.

On the convening of an Idaba, SRSA has a review around April next year a kind of mini-Idaba. The work week will begin in November this year with a working group that we look at the gaps and a working plan.  On how much is budgeted for the inquiries, R2m is budgeted for each inquiry and it may be less because of the commitment of the judges to congest the proceedings. The bulk of the budget will go to members’ remuneration there are three members each.

The Chairperson thanked SRSA for their presentation and the members for the interactions.

The meeting was adjourned.