Department of Arts and Culture Quarter 2 and 3 performance

Meeting report

Minister’s Presentation on matters arising
The Minister of Arts and Culture, Mr Nathi Mthethwa, read the Committee through matters needing immediate attention and discussion.

Update and proposition on the matter of disciplinary proceedings on the reported cases of corrupt staff members
Minister Mthethwa said the Department cannot necessarily take-up the disciplinary procedures following the cases of corruption in the Department, the Department can only report such instances.

Updates on National Heritage Monuments
Minister Mthethwa said the Department is planning on taking efforts to recognise other liberation struggle leaders as opposed to only celebrating ANC leaders. This year the department shall be investing efforts in remembering Professor Robert Mangaliso Sobukwe. This will be done through engagements with the Pan Africanist Congress and those related to the late Prof Sobukwe. He proposed that things such as memorial monuments should be erected in the celebration of Sobukwe’s legacy. This is important for enriching the democracy that South Africa has and should contribute towards reflecting back at how far the country has come.

On the topic of heritage landscapes, there should be open dialogue around the individuals whose legacy is celebrated with erecting monuments in reflecting the new democratic South Africa. This was in reference to the movement by UCT students questioning statues which may not be representative of the social cohesion and democracy South Africa has now. The Minister suggested that this transformation should go as far as reflecting this on the naming of streets and buildings. This is an important matter as these statues and monuments in their existence continue to express the colonial history of the country. Therefore, monuments in public spaces should express the values of the democratic constitution. Conversation on this has been in progress for two years going around to different stakeholders and the Department will have to then engage with the report.

There must be a culture to appreciate art as part of the South African heritage and announced the creation of an art academy. Further, on the topic of art appreciation, and old artists whose music is no longer appreciated, that there needs to be continued cherishment of their talent and be allowed access to resources to continue doing the work they do. Minister Mthethwa emphasised the importance of this as he claimed that musicians had an influential role in the liberation struggle in South Africa.

The last point the Minister raised was on the racial representation of the people employed with the South African Heritage Resource Agency (SAHRA). Which is is dominated by old white men and this needs transformation.

Discussion

The Chairperson applauded the Department on its efforts in the building of the Esther Mahlangu monument as part of the heritage landscape projects. She frowned upon the Department’s inability to follow-up on other similar projects which it had taken-up. She also highlighted the Department’s limited efforts in initiating such projects until it is pushed by the intervention of the Committee; and noted how the Department injects limited funding for such projects to be created.

The Chairperson additionally made suggestions of how the Department going forward could make sure that they visit and engage with communities about creating these projects. This is important as it provides a platform for the Department to acquire primary information about how passionate and eager the people are about projects of this nature. Therefore, going forward the Department will feel the need and pressure to fund and show accountability on the projects.

The Chairperson also supported the point raised by the Minister on the demographic representation in SAHRA. The chairperson said that this would be an action towards radical transformation in the agency and would in turn open up opportunities of employment for young people.

Mr T Makondo (ANC) referred to the execution capacity of the Department and government in general and was in response to the proposed projects of heritage landscapes, the art academy and the commemoration of old artists. He said a gap exists between the policy objectives of the Department and the actual personnel capacity in executing the policies. Hence the Department will continue to experience inefficient implementation of policies.

Ms V Mogotsi (ANC) supported the proposed initiative by the Minister on the creation of the academy. She claimed that this would be a step in the right direction for the Department as it is a much-needed institution in South Africa. She highlighted how institutions of art can be inaccessible and that no bursaries exist in that sector.

Mr G Grootboom (DA) said the work of the Department is lacking a bridge between heritage projects, community conversations and language. The execution of heritage projects needs to be done in languages which communities can relate with. There is therefore a language barrier in the work of the Department and the communities receiving the services.
Mr Grootboom further mentioned another point about the progress the country is making towards heritage landscapes. The removal of the Khoisan exhibition is a step back from the progress the Department is trying to achieve in appreciating the cultures and heritage of the country, and this was not being politically correct.
Mr Grootboom lastly raised a point on the assigning of monetary value to artefacts. He claimed that this puts these art pieces at risk of theft or being bought off from the collection of heritage symbols of the country.

The Minister responded to Mr Makondo’s point on the appointment of capable personnel in the department. He confidently reassured the committee not to be worrisome of the capacity of the Department in driving and implementing the proposed projects; there is progress in the implementation of these projects.

Mr Vusimusi Mkhize, Director General, Department of Arts & Culture, said financial receipts are going through auditing on the Tambo project. An investigation was being done on the costs of the monuments so that payments can be processed. The department is expecting the reports from the forensic auditors by the end of the week.

Mr Mkhize gave updates on the criminal cases of staff members in the Department. He refrained from giving extensive details on the progress as this might compromise the investigation. However, that the HAWKS are involved in the investigation and are engaging with the staff members.

He updated the Committee on the progress of the reported irresponsible expenditure behaviour in the National Film and Video Foundation. The cases were on unauthorised expenditure, irregular expenditure and wasteful expenditure. A report about this has been submitted to the chairperson of the board in the foundation, and disciplinary procedures are expected to take place.

On the updates arising from the investigation of the National Arts Council, the investigation which was being conducted was disturbed by matter of conflict of interest. This had to therefore be allocated to the hands of another neutral body to investigate and get a different view. This was to validate whether the previous investigation had been reflective of facts or not. This is projected to be resolved by the end of April 2018.

On the revision of the White Paper, this process was done and is awaiting certification from the Department of Monitoring and Evaluation (DPME). This process is expected to be concluded by the middle of March.
Regarding the renewal of the SA Cultural Observatory contract, the previous contract was not going to be renewed. The contract for suppliers was going to be opened up for advertisement and the Department was in the process of selecting a new supplier. The previous contract will be ending at the end of March and the successful candidate should begin from the beginning of April.

PACOFS has already a board and director and this should give it stability and functionality. However, it was still missing a CEO.

Mr Mkhize updated the Committee regarding the Tfolalwati project which could initially not be funded due to missing relevant tax payment documents. The Department has been in contact with the project manager of Tfolalwati, and subsequently received the tax payment documents. The Department has consequently committed to affording Tfolalwati with a minimum of R200 000.

Briefing by the Department on Quarter 3 Expenditure
The Chairperson asked the presenters to focus on the third quarter of the expenditure report and make reference to the second quarter only when necessary.

Mr Mkhize presented a summary of the achievements in the 2nd and 3rd quarter.
88% of set targets were achieved, which is an improvement compared to the 2nd quarter. Compared to last year’s quarter, this year’s third year quarter is showing progress. A comparative analysis between expenditure and staff performance was done and results were as follows: administration achieved 91% of their targets and the expenditure also amounted to 90% of the budget allocated; Institutional governance was not able to achieve 80% of targets and only used 36% of the expenditure budget allocated; Arts & Culture & Promotion and Development managed to achieve 70% of what they had targeted, expenditure at 92 %. Heritage preservation was able to achieve 92%, translating to an expenditure of 99% of the budget.

Key highlights of the third quarter
Key highlights include

• the Imbizo was organised from 20 October at Mpumalanga by the Deputy Minister in partnership with Sports and Recreation.
• Partnership on Oral history with Oral history association of South Africa in organising the 14th National Oral History conference which fundamentally tackled research on meanings around clan names in South Africa.
• The public lecture held at the University of Venda in solidarity with the people of Palestine.
• The department also participated in the Indoni Cultural Festival, an initiative that aims to provide knowledge about South African identities and values, their audience are young girls and boys around the country.
• the Liasa Annual Conference that addressed the current state and the future of Libraries in South Africa.

Discussion
Ms Mogotsi expressed concern on the poor and limited clarity provided on the 3rd Quarter expenditure.  The information provided on targets reached and not reached is vague and lacks specificity. Additionally, the Director General is derailing the committee by dedicating more time on the highlights of the quarter instead of the relationship between expenditure and performance in the Department. The Department must shy away from not meeting targets that have been set, this is important and is simply professional incompetency.

The Chairperson emphasised the importance for the Department in meeting its goals. Going forward the department needs to invest efforts so that the set targets are achieved.

The Minister responded that the number of targets not met exposes the gap between plans and actions that has been raised about the Department. He suggested research being done before certain targets are made to avoid the understating and over stating of targets.

Achievements in 3rd Quarter administration
Mr Mkhize presented the achievements, the first achievement being on the draft revision of the White Paper on Arts, Culture and Heritage (ACH) to have it tabled in Cabinet. An assessment on the socioeconomic impact study on this has already gone through the reference panel. Thus, this process has been a success.
Secondly, the target on the number of national and commemorative days publicised which was to publicise a target of one day and this was achieved. The department had achieved this. This was the National Day of Reconciliation.
The third achievement was on the communication and marketing campaigns implemented. One communication and marketing campaign has been achieved and this was the target, meaning the Department was successful. The fourth achievement was on the updating of ICT service uptime of which the Director General announced that the ICT unit managed to 95% of the ICT service out of a target of 95%.
The fifth goal for the department was to issue 70% of procurement awards to BBBEE compliant service providers of which this target exceeded expectations issuing a value of 89%.
The sixth update on achievement was on the number of Imbizo held by the Department. The target was a number of 5 and the Department achieved 6 Imbizos. These were held in Mthatha on 12 October in the Eastern Cape, in Mpumalanga on 20 October in Siyabuswa, 18 October in Free State in Botshabelo, 16-19 October in Western Cape in Khayelitsha, 8 December in Eastern Cape in Mgababa and 16 December in Eastern Cape in Peddie.
Lastly, the Department managed to achieve the projected Work Place Skills project out a single target projected.

Presentation on Institutional achievements in 3rd Quarter
The Director General presented the achievements beginning with its success in coordinating international engagements. The Department achieved 3 of these out of a target of 3, which means they succeeded. These were on their facilitation of the DAC officials’ attendance of the second UNWTO/UNESCO World Conference. The second was on the DAC participation during the 39th session of the UNESCO General Assembly Conference in Paris, 08-10 November 2017. The third was on the participation of the DAC in the SA Film Week in Spain from 21-31 December 2017. The second achievement was on the number of Africa/Middle East engagements facilitated on a target of 2 of which the department achieved both. This success was on the Department’s facilitation of the DAC participation in the Public Lecture in Solidarity in solidarity with Palestine on 13 October 2017 at the University of Venda. Additionally, the Department facilitated SA’s participation in the 22nd Algeria International Book Fair from 25 October to 05 November 2017. Lastly, Mr Mkhize reported on the number of arts and social development programmes supported of which the target of 1 was achieved. The Department supported the Clan Names project in Mthatha from 06-13 October 2017 and the Zwakala Awards on 27 October in Gauteng.

Presentation on Institutional Governance in 3rd Quarter
The Director General presented the figures on the Department’s success in constituting councils of DAC at a 100% success rate. The Department was able to submit a second draft of the DAC Annual performance plan to the DPME and NT as expected.

Thirdly, the Department was able to submit the preliminary 2017/18 2nd Quarter Performance report to NT and DPME. Following this the Department successfully implemented the projected Youth Development Programme in Gauteng, Mpumalanga and Free State Correctional Centres. Lastly, the Department achieved its annual target of 33 community conversations in the quarter.

Presentation on underperformance in 3rd Quarter

Administration
Director General Mkhize reported on the underachievement of payments which are supposed to be made in 30 days. The department was 1% below target. This was due to the fact that invoices were received before they could be verified and for projects to be confirmed by the DPW. Furthermore, suppliers changed banking details without informing the Department on CSD, which this slowed down progress. The Department proposed that they will correct this by implementing an invoice tracking system in the 4th Quarter. An agreement was made with the IT unit and accountability on the part of the officials will be considered.

Institutional Governance
The Director General announced that the target of submitting a second draft of 2018/19 UAMP could not be achieved. This was due to the fact that the department could not find an ideal service provider. Those that were questioned could not meet requirements.

Arts and Culture promotion and development
The first goal for the Department was to financially support up to 4 market access platforms. The Department experienced an overall failure in this and did not have any achievements. This was due to inadequate source verification.
The second goal was financially support 50 community arts projects, of which the Department achieved only 14. This was an issue of relocation of projects of which the adjudication and approval processes for implementation were delayed for all quarters. The Department proposed a way forward on this that they sent an 18-member team to follow up on these setbacks. Additionally, the Department was planning to establish a project management officer for the monitoring and oversight on this initiative. The Department had however taken-on measures to fast track the signing of a MOA and transfer of grants to all the approved projects by the end of January 2018.
The third matter was on the goal of 5 Community Arts Centres refurbishments to be supported financially. The achievement was on 3 projects. This was explained as a delay by the beneficiary agencies from provinces. A corrective measure on this should be to fast-track the finalisation of MOA with North West and Eastern Cape provinces by the end of the 4th Quarter.

Heritage preservation and promotion
The Department had aimed to distribute national symbols toolkits to 6430 district offices of the Department of Education. The actual achieved target was 1150 district offices. This was due to the outstanding districts in the Eastern Cape. The province had not been cooperating even after the Acting Director General intervened. The proposed solution by the Department was that deliveries would be made in the 4th Quarter by 23 March 2018.

Presentation on Summary of Adjusted Appropriation & Quarterly Projected Budget versus Expenditure per Programme

Mr Makoto Matlala, CFO, DAC, presented the financial figures. The items were Administration, Institutional governance, Arts and culture promotion and development and heritage promotion and preservation. R1 139 717 was budgeted on these items for the quarter. Actual expenditure was R1 030 627, reflecting a 10% under expenditure.

Presentation on Summary of Adjusted Appropriation & Quarterly Projected Budget versus Expenditure per Economic Classification
Compensation of employees: expenditure was 57 794, which was above by 2%. This was due to the fact the figure included an amount which was supposed to be spent in the previous quarter. The figure also includes bonuses for employees hence the amount is inflated.

Goods and services and expenditure was at 43% under expenditure. The Department has not processed any payments to the DPW on buildings and entities. The Department usually pays an amount of R11, 6 million for a quarter, but has not made any payments the whole year for this item. This is due to the fact that the DPW billing standards need to be updated and payments cannot be made until the DPW receives an exemption from National Treasury. The Department has been waiting for this procedure to take place for over 9 months. The exemption was only received in January and an amount of R44 million was paid out to recover all the previous quarters which were outstanding.
The Department has moved to a new building and the agreement with DPW had not yet been finalised. Therefore, the Department has not been paying rent for the new building for the past 5 months, amounting to R11,8 million.

The Department’s Provinces and municipalities reflects the grant for libraries cash float approved by National Treasury.

 Department agencies and accounts (Cur) over expenditure of 2% reflects additional expenditure which were supposed to be made from previous quarters. This is the reason for the inflated expenditure amount.  

Department agencies and accounts (Cap) under expenditure of 43% is due to invoices which could not be settled on time by DPW as there are reports missing which must support the invoices.

Non-profit organisations (Cur) reflecting 38% over expenditure. The figure includes amounts which were supposed to be paid in previous quarters. These amounts could not be processed as NPO MOA signing could not be finalised on time.

Households expenditure had 101% over expenditure. This has been due to delays of MOAs. The figure therefore includes pay-outs to beneficiaries from previous months.

Other machinery and equipment reflected 70% under expenditure. This was due to delays in the installation of IT and security infrastructure.

 Software and other intangibles was below projected budget by 70%. This was due software which had not been procured by the end of December.

Payments for financial assets reflected an amount of R28 000 which was not budgeted for. These are late payment charges charged to the Department by Telkom and other service providers.

The CFO summarised that the Department for the year is sitting at a position of 71% while for the quarter is it at 90%. Additionally, in the remaining quarter the Department is supposed to spend R29 million.
There was slow expenditure on the legacy project on Institutional Governance. The accounting officer suggested that the Department could come up with a strategy to make sure they do not lose the funds. Therefore, the Department suggested that they take-on a strategy of transferring excess funds from one programme to another which may need the funding such as in infrastructure with permission from National Treasury.

Discussion
The Chairperson asked for a report on those programmes considered to be doing well and having excess funds before funds could be moved around, in response to the last suggestion presented by CFO. She reminded the Department of the importance of spending all allocated funds on projects and that underspending is not acceptable, specifically on infrastructural programmes, and emphasised this as an aspect of accountability to the public. She emphasised the recurring trend of under expenditure since 2014, that the Committee has been highlighting this with the Department, specifically with infrastructure.

Mr Grootboom raised three points of inconsistency with the figures and budgeting. The first was on the graphical representation of items on slide 11. He suggested that the items should have been more programme specific such as in the manner it is done in slide 32.
Secondly, he highlighted the lack of budgeting for machinery and equipment, as well as for payments for financial assets but there is an amount of expenditure reflected against them.
Thirdly, he highlighted how the department had inconsistencies with the grouping of programmes which then influenced budgeting.

Ms Mogotsi asked for clarity on the strategy of shifting funds from one programme to another, and why there are excess funds on some programmes while others are taking up more funds when a thorough forecast of allocation of funds and expected costs was done. What was the Department doing wrong such that they are experiencing this? The shifting of funds is often done when there is a need for development, therefore on what grounds will the Department be shifting funds.

Chairperson followed with another enquiry about the budgeting on the Voortrekker Monument no longer being required, and why this is so.

The Director General responded on the questions raised about under expenditure and over expenditure on programmes. Some setbacks the Department experiences are out of their control while they have a negative impact on budgeting and expenditure. Going forward the Department will be more realistic and accurate in its budget forecasts and their ability to meet targets so that there are less disappointments. Under expenditure on infrastructure is dependent on provinces actually using the funds they have been allocated. It is the responsibility of provinces to ensure they spend the funds, what the Department can do however is to put in place disciplinary measures to motivate expenditure. He expressed non-fulfilment on the performance of the department in budgeting and that they aim to do better.

The Chairperson noted that the expenditure in the Department has been much slower in this financial year compared to the previous one. The Department must observe what they were doing differently.

Ms Mogotsi said the Department needs to show better command of their financial recording and budgeting and needs to take better imitative and effort into ensuring that this is the case and be less apologetic of the work they present and do and show confidence in their performance reports.

Minister Mthethwa proposed that going forward the Department will be careful of taking-on projects which are beyond their capacity. This will help avoid having to account for projects which fail but not because of the actions of the Department as well as in having to account for inconsistencies which the Department may not be fully informed about.

The Chairperson asked, going forward, what is going to be done about the building of institutions and infrastructures as the Department has received funding for the programmes and the funds cannot remain unused.

The Deputy Director General, Mr Vusithemba Ndima, responded on the matter of targets not achieved with the heritage programme. The Department was unable to distribute about 1152 toolkits. 4992 toolkits have been distributed in the Eastern Cape as a way of recovering the unachieved target. These have already been distributed to district offices of the Department of Education. This ensures they should be achieving the target following this.

The CFO elaborated on measures going forward in correcting the underperformances. He proposed that there should be an improvement on the payments made within 30 days for the next quarter as there are expectations of improvement on the conditions which caused payments not to be made.

DDG Ndima touched on the underperformance in building libraries. The target for new libraries to be built was 26 and 21 libraries had been built. He expressed confidence going forward in achieving the number of new libraries left to be built. The Department is considering building temporary libraries so that communities have access to resources while this gap is being bridged. Alternatively, if this proves too challenging to achieve the Department will consider renovating existing infrastructure. The department had set a target of 55 and this is below expected performance by 45 infrastructure renovations.

DDG Sethibelo admitted to forecasting an underperformance on Institutional Governance until the end of the financial year on user asset management. The Department was unable to do conditional assessment as the appointed service provider could not deliver and had to be dismissed before starting the project. Another service provider has therefore been appointed.

Ms Mogotsi responded to the forecasted under performance of the Institutional Governance. The Department needed to be more thorough in its appointment of service providers. The audit committee of the Department was not being efficient in screening service providers so that such matters can be avoided. This has its own implication as the dismissal of the service provider would have to undergo a legal process and the Department would faces legal fees.

Mr Makondo added that the Department needed to take thorough measures on programmes which are especially directly handled by the Department and that because of this there should be no excuses and lack of accountability as the Department is directly responsible.

The CFO responded on the matter of service provider appointment. Service providers are appointed on the basis of offering service at a low cost. However, on appointment service providers change their quoting in realising the magnitude of the work to be done. Therefore, service providers are dismissed on this basis as they cannot provide services on the proposed costs.

Ms Mogotsi said the Department should know that even in that case where service providers charge a low price that should be a sign of the quality the service provider has to offer and thus quality of projects can be potentially compromised. She urged the Department to take note of this.

The Minister responded on the matter that it needs to be taken into consideration that the main priority for government departments is to save funds, therefore, justifying the selection of cheaper service providers compared to more expensive ones. The Department therefore cannot fully be judged on selecting providers based on costs. However, the department did not blindly select based on costs, this was together with the capacity of the service provider.

The Chairperson questioned whether the Department does a screening process where they refer to previous work of the service provider to validate its compatibility.

Discussion of implications of underperformance in the financial year

• This will result in fiscal dumping as funds will have to be redirected to other programmes as allocated funds to be used.
• Affects performance of the whole Department
• Affect audit opinion of the Department, the Department will have a negative review as it has under performed
• Poor and slow service delivery

Proposed solutions

• Appointment of new company to revise updates on the building of infrastructures

Closing remarks
The Minister thanked the Committee for engaging with the Department and for its oversight. The Minister further proposed follow-ups on under performances raised.

The meeting was adjourned.