PanSALB, PACOFS, National Arts Council Annual Performance Plan; Department APP: Auditor General input

Arts and Culture

17 April 2018
Chairperson: Ms X Tom (ANC)
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Meeting Summary

The Office of the Auditor-General South Africa said its briefing to the Committee on the Annual Performance Plan 2018/19 of the Department of Arts and Culture was intended to add value to the Committee’s oversight function. The presentation showed the link between the National Development Plan, the Medium Term Strategic Framework documents and the Annual Performance Plan which were key considerations and criteria used to assess the draft Annual Performance Plan. The review process provided an early warning to the Department regarding the measurability and relevance of Annual Performance Plan targets. The Auditor-General pointed out instances where indicators were not well-defined, and targets were not specific and measurable, and indicators were not verifiable when inspecting the Technical Indicator descriptions. The Auditor-General also found discrepancies between the Annual and Quarterly targets. The alignment of the Annual Performance Plan with the Estimates of National Expenditure was also interrogated. The Budget of the Department had also been reviewed, especially as 80% of the budget was transferred to various entities for which the Department was responsible.

A status of records review was conducted for PanSALB only since the process was at the implementation stage. Overview and oversight, one of the key focus areas of the review, was impaired owing to PanSALB having no board.

One Member asked if the accounting system required a physical counting of assets or if a value was placed on the assets. Another Member asked if asked if the indicator for community conversation had been included in the APP for 2017/18.

The presentation on PACOFS 2018/19 Annual Performance Plan included a representative snapshot, which was criticised by the Committee for not being arranged in a correct hierarchical fashion. The successes presented by PACOFS were on an institutional and managerial level and not related to outcomes. Challenges and interventions included inadequate commitment and poor performance, largely a result of low morale and a lack of a performance management policy. The limited budget was to be addressed by executing programmes and projects through partnerships and collaborations. Delays in the finalisation of capital works projects required the settling of all litigations relating to the capital works projects.

Members focussed on the situation with the CEO of PACOFS. Why was PACOFS considering re-appointing the CEO, who had been suspended and eventually expelled, when at the same time, the organisation was seeking to appoint a new CEO? Members asked that the labour issues be explained. Why did PACOFS have so many litigations against the organisation? Members required details of litigation relating to capital projects and litigation relating to staff. Where did the power lie in the organisation? Members asked when the air conditioning in the building would be repaired so that the theatre and facilities could be fully utilised? embers struggled to link the PACOFS presentation to the Department’s presentation. Why were they so different? Why had PACOFS not included any detail in the APP? Could the APP be amended by the following week to avoid a rejection of the APP and therefore the budget?

In the overview of PanSALB, the Director-General of the Department of Arts and Culture found that PanSALB was aligned with the Department’s objectives. The link between the key outputs and targets of PanSALB and the ten Department priorities were in the areas of promotion of languages and improving functioning as well as improving reporting and compliance. There were some issues on the legal status of PanSALB and the current constitutional arrangement between the Department and the entity. There was overspending but, because of the challenges regarding accountability, the matter had not been dealt with since it was difficult to access information from the institution. PanSALB had received a disclaimer from the Auditor-General in 2013/14, partially because of extensive irregular expenditure of over R11 million in 2013/14 and over-expenditure of R38 million. The board had been replaced and in 2015/16 and PanSALB had received an unqualified audit. There were issues around allegations of maladministration at the institution and the Department had appointed investigators through the internal audit unit. The unit had started work on 15 March 2018. The CEO had been implicated in the maladministration and was on special leave.

A financial risk in PanSALB was the fact that the National Lexicography Units were not submitting financial reports, which would drag out the process of submitting financial records. The Units were responsible to the board of PanSALB but not to the CEO and were refusing to provide documentation to the CEO. There were no incidences of irregular expenditure and an unqualified audit was expected.

Risk management included letting the executive make decisions in the absence of the board. A lack of service delivery by PanSALB was a risk. There was an urgent need for a review of Norms and Rules and a review of the Memorandum of Incorporations of National Lexicography Units as well as amendments to the PanSALB Act.

In the overview of the National Arts Council the Department of Arts and Culture said the vision spoke to a vibrant arts community. Strategic Objectives also corresponded with the Department’s mandate. The Annual Performance Plan of the National Arts Council aligned with the aims and mandate of the Department. A forensic investigation was currently underway which could impede the institution from fulfilling its mandate. The recommendations and findings pertaining to the National Arts Council improper performance bonuses was addressed.

Members posed questions on the investigations. One Member asked by the board secretary was the only one to be charged and not members of the board or the CEO who had also been involved in wrong-doing. Why had the list of names supplied by the Auditor-General of employees and council members involved in irregular business not been investigated? Should the process of establishing a new board be continued when a member of the previous board was challenging the disbandment of the board in court?

The National Arts Council made a presentation in which it stated that collaboration was important since the budget was insufficient to achieve all aims. It was essential to assess the impact of action before funding was provided. The National Arts Council aligned with the National Development Plans because it promoted social cohesion, transformation and nation-building. The National Arts Council had had a clean audit the previous year and planned to sustain it in the current financial year. In a quest to move away from a discipline-based approach to funding, the NAC had proposed a programmatic approach.

In terms of partnership with BRICS countries, a memorandum of understanding had been signed with the China Federation of Literary and Art Circles and there were also collaborations with African countries such as Senegal and Namibia as per the Department’s mandate, programmes and vision.

The chairperson of the council spoke freely about the difficulties that the board was experiencing at the National Arts Council. All members, himself included, were being manipulated and threatened. In the minutes of council meetings, it was found that, a year before the new council came in, AGSA had submitted findings to say that some employees of the council and council members were doing business with the Council and had provided a list of those individuals for the board to deal with. The previous board had never taken action and when it was dissolved, the issue had immediately disappeared.

One of the Members indicated that he was satisfied with the APP, but he wanted to know how risk mitigation, management plans and consequence management would be addressed. He also wanted to know the plans for addressing equity targets and arts promotion, and how the plans addressed nation-building and social cohesion.

Members asked for more information about the accusations of leaking information about the Council. Why had the CEO not been charged for irregularities regarding her performance bonus and those of the staff? Who was meant to sign off the minutes of the board because that person should also be charged. Were Members correct in thinking that the board members were in conflict about the Chairperson? Was the board chairperson accusing the Committee of something?

Meeting report

Opening Remarks
The Chairperson welcomed delegates’ backs from the constituency period. That would be the last time Annual Performance Plans (APPs) were dealt with in the current government term. In 2014, APPs had been the first thing the Committee had dealt with. The Department had done its work to the best of its ability and every Portfolio Committee was as strong as the Department it oversaw. The power of the Portfolio Committee was thus limited. In 2014, PanSALB was the entity in most need of help and presently it still needed help, which was disheartening, although some improvement had been made.

An apology was tendered on behalf of the Minister of Arts and Culture, Mr Nathi Mthethwa, and formally accepted by the Committee.

The Chairperson welcomed the officials from the Auditor-General of South Africa (AGSA). She appreciated the work of the AGSA which empowered the Department to oversee its entities more effectively, since the entities received 80% of the departmental budget. The Committee had focussed on the entities since 2014 because the entities spent the Department’s budget.

AGSA Review of the 2018/19 APP of the Department
Ms Nelisiwe Mhlongo, Senior Manager: AGSA, presented. The purpose of the briefing was to add value to the oversight role played by the Committee. To improve audit outcomes, AGSA had taken a seven-step approach to the development of Annual Performance Plans. Planning was very important, and the process started with planning and defining a target, and if that step was correctly done and all steps completed, it would lead to a better life for citizens. The leadership of an organisation implemented internal controls so, if there was no leadership, there would be problems with the implementation of internal controls. She provided an overview of the performance reporting process and stated that the presentation was an example of strategic planning. The National Development Plan (NDP) contained the Medium Term Strategic Framework (MTSF) which contained the APP, and which had targets. The presentation aimed to show the link between those documents for the Department.

The review process provided early warning to the Department regarding the measurability and relevance of APP targets and did not go into extensive detail on the targets, which would be conducted by the audit. Only two of the four departmental programmes were reviewed, Programme Two on Institutional Governance and Programme Three on Arts and Culture Promotion and Development. Key considerations and criteria used to assess the draft APPs were outlined.

Ms Pulane Motaung, Manager at AGSA, said the Department and not its entities, had been reviewed. It had not been an audit. Findings were raised with management, but the findings were not verified before the tabling of the final APP of the Department. The technical indicator descriptions were not available when the APP was tabled. There was alignment between the NDP, the MTSF and the APP.

Indicators in red on the presentation were not included in the APP, those in yellow were somewhat included and those in green were included. On the alignment of the APP to the NDP there were many indicators to look at. The first three indicators, namely, the number of schools saying the preamble to the Constitution at school assemblies and the percentage of schools flying the national flag and having materials bearing the national symbols, shown in yellow, were being carried out by the Department in collaboration with the Department of Education but since the indicators were not included they could not be tracked. The indicator for national days hosted and celebrated was also shown in yellow since only six national days were planned in the APP whereas seven were celebrated previously. A further seven targets were not included.

The APP should also align with the Estimates of National Expenditure (ENE). The indicator of number of community conversations on social cohesion and nation-building conducted per year was set out to be 33 in the ENE but the APP had a planned target of 150. A further four indicators did not align with the ENE.

The 2018/19 APP review had many key findings. There were instances where indicators were not well-defined, and targets were not specific and measurable, indicators were not verifiable when inspecting the Technical Indicator descriptions and there were discrepancies between the Annual and quarterly targets.

Programmes 2 and 3 were reviewed. Under Programme 2, there were seven indicators, of those five were not well defined and targets were not specific and measurable. Programme 3 had 11 indicators, of which eight were not well defined and targets were not specific. Four new indicators had been included in the APP, two in each of Programmes 2 and 3.

A budget analysis was conducted. The comparison of the budget between the current year and prior years for all four programmes was included. 80% of the departmental budget went to transfers and subsidies and the remaining budget was divided into 44% goods and services, 27% payments for capital assets and 29% compensation of employees.

The status of records review for PanSALB was conducted. Ms Mhlongo said that the record review was an early warning process given to institutions where key focus areas were assessed, and feedback was given to management. AGSA engaged accounting officers on the status of their records based on the outcomes of the previous financial year or the most recent audit outcomes AGSA had. The review was only conducted for PanSALB since the process was at implementation stage. In the first and second quarters of the Department’s financial year, reviews of all other entities would be conducted. On overview and oversight, one of the key focus areas of the review was impaired due to PanSALB having no board, which played a key role in internal control and risk assessment. The organisation struggled with performance management. Improvement had been made in all other key focus areas.

The Committee received an update on GRAP 103. The seven entities of GRAP 103, Heritage Assets, were presented to show their status. The results presented were based on discussion and there was no verification done by AGSA. Ditsong Museums of South Africa and National Library of South Africa were the only two entities still in the process of verification. Ditsong had not included the value of the assets in the discussion. The National Library of South Africa had also indicated that the information about their assets might not be submitted in time for its financial status assessment due in May 2018. The other five entities had concluded, or were in the process of concluding, their assessments. Audit outcomes, not based solely on discussion, would be available by July 2018.

Key recommendations referred to what needed to be implemented to ensure that repeat findings were not made. The Department had to ensure that targets could be independently examined against SMART criteria and clearly defined standards of achievement on the technical data description. The Department’s managers had to design and implement standard operating procedures for planning and reporting of targets and indicators, which would promote consistency. The Committee had to continue to reinforce oversight by having regular robust engagements, promoting accountability in management, and scrutinising the APP to ensure that all recommendations from assurance providers, internal and external, were implemented and continued with robust quarterly engagements with departmental leadership.

The Chairperson thanked AGSA for the presentation, pointing out the value of its assessments to the Portfolio Committee.

Mr G Grootboom (DA) asked if GRAP required a physical counting of assets or if a value was placed on the assets.

The Chairperson responded that she understood that GRAP worked on the value of the items.

Mr T Makondo (ANC) asked if the indicator for community conversation had been included in the APP for 2017/18.

Ms Mhlongo replied that it was difficult to place value on some items but there was a certain standard for how items were valued. The issue was that most entities did not have an inventory list, making it even more difficult to assign value. Once an inventory had been established, items needed to be categorised to assign value.

Mr Grootboom said he assumed that the first job of GRAP would be to physically count and list assets before assigning a monetary value to the items.

Ms Mhlongo said that in the 2017/18 APP, 150 conversations were set as the target which still held true for 2018/19, with an additional 33 planned for 2018/19.

Ms N Bilankulu (ANC) said that she did not think that artists had been placed in all schools as per the target outlined in the ENE. She also asked, if the indicator was no longer in the APP, whether the work continued and was budgeted for.

The Chairperson said those were questions better raised with the Department since AGSA just identified those areas that need to be focused on by the Committee. The Department needed to apply its mind to planning and interrogate what was the necessary. It needed to make sure that what was planned for was achieved. Targets could not be “thumb-sucked” and had to be realistic with regard to the budget. The issue of artists in schools had been raised with the Department, especially after oversight in Limpopo where there was a lot of confusion about artists in schools and what they were supposed to do. It was a necessary programme but the way it was implemented was not desirable.

Ms Mhlongo said that the Department had indicated that there were some areas where the Department had not included an indicator in the APP but had communicated an operational plan for it. Those operational plans could not be verified by AGSA by the time the AGSA had composed the report.

The Chairperson stated that having an operational pan for an indicator not in the APP seemed illogical since, as she understood the process, an operational plan was drawn up on the basis of the APP. The Committee would have to take up those issues with the Department. The Chairperson was aware that AGSA was not compelled to provide such regular updates, but it was beneficial to have those updates and she really appreciated the work put into them. It was helpful for the Department and entities to be assessed in an ongoing manner. The feedback assisted the Committee to fulfil its mandate.

Since the Department was not present to give an overview, she handed over to PACOFS for its APP presentation.

PACOFS 2018/19 APP Presentation

Ms Tina Mnumzana, Council Member of PACOFS, introduced the delegation from PACOFS.

Mr Meshack Xaba, Acting CEO of PACOFS, told the Committee that the Council had said that it was necessary for PACOFS to develop a strategic plan for operations which had culminated in the APP. The APP, as presented in the APP Snapshot, had six goals from the strategic plan, with a corresponding goal statement for each strategic outcome. There were seventeen strategic objectives and twenty key performance indicators (KPIs). Annual Projections were for 2018/19, 2019/20 and 2020/21 with the quarterly targets for 2018/19 presented.

An overview of the 2018/19 budget was provided. The total budget for 2018/19 was R48 million, made up of a government grant of R45.3 million and R2.7 million of own revenue. That was a 4% decrease from the 2017/18 budget. Staff costs constituted 53.7% of the grant and 50.6% of total budget. R21 million was available for operations and core business. The Department had allocated and additional R7.7 million for infrastructure in 2018/19.

Mr Sello Sunyani, CFO: PACOFS, said that the R48 million was divided between three programmes namely, administration, business development and public engagement which took up R26.8 million. The compensation of employees would account for R24.3 million and goods and services would amount to R21.7 million.

Mr Xaba added that there were seven KP’s for Programme 1: Administration, eight KP’s for Business Development, and five KP’s for Public Engagement, Programme 3. The macro structure of the organisation had the PACOFS Council at the top overseeing the organisation, followed by three committees: the audit and risk committee; human resources, ethics and legal committee; and the core business committee. Below those committees was the executive, headed by the CEO.

Successes and Challenges

PACOFS had been successful in appointing the CEO and undertaking organisational restructuring and renewal. Other successes included training and skills development, the development of a fundraising strategy, a review of policies and the development of business processes.

Challenges and interventions presented by PACOFS included inadequate commitment and poor performance, which could be changed by conducting climate surveys and addressing morale issues, as well as implementing the performance management policy. The limited budget could be addressed by executing programmes and projects through partnerships and collaborations, marketing productions to at least break-even and sourcing long term relationships. Inadequate marketing affecting patronage numbers could be mitigated by developing and implementing an effective marketing strategy. Delays in the finalisation of capital works projects could be addressed by settling all litigation relating to the capital works projects.

Overview of PACOFS by Director-General: Arts and Culture
Mr Vusi Mkhize, Director-General of the Department of Arts and Culture (DAC), introduced the storyline of PACOFS, outlining the organisation’s vision, mission, outcome-oriented goals and strategic objectives. The presentation sought to outline how PACOFS achieved the outcomes of the Department. When looking at outcome-oriented goals, DAC looked at the organisation and its transformation allowing it to perform at a higher level, as well as corporate governance issues, staff morale and labour issues. There was a lack of funding for upgrading and maintenance to optimise PACOFS’ facilities and infrastructure, which was one of the goals. PACOFS was not optimally utilised in producing artistic programmes despite its strategic objective in that regard. PACOFS was committed to partnerships but it needed to add value to those partnerships. It should also strive to retain customers and gain new customers.

It was important to assess how the 2018/19 APP and strategic objectives of PACOFS related to the goals of the Department since they fulfilled the same mandate. The key outputs in the APP were the common thread that ran through the two and the APP and the Departmental goals were indeed linked. It was expected that the productions would contribute towards transformation in the sector at provincial level by including more productions that talked to women, previously marginalised people and other groups. Good governance was an objective of PACOFS, but the absence of a CEO had presented a challenge in leadership as there had been no accounting officer. A turnaround strategy had been implemented, by way of a business improvement programme, to improve performance and oversight. A professional and capacitated Arts, Culture and Heritage (ACH) sector was facilitated by 12 artistic programmes of excellence and four training workshops conducted for arts practitioners, although there were still gaps that needed to be addressed.

The Department also had ten priority areas and had ascertained that the PACOFS APP 2018/19 key outputs and targets aligned with those as well as aligning with the budget provided. A budget of R1,3 million was allocated for nation-building and social cohesion and included as artistic programmes of excellence in the APP. The Community Arts Development programme in the APP targeted developmental artists from the Free State with a budget of R1 000 000. Skills audits were essential had been included so that the Department knew the capacity of the entity.

Four initiatives had been submitted for the celebration of the Nelson Mandela centenary. Mr Mkhize submitted a review of performances. There was some improvement in PACOFS over three years, although a large percentage of targets were still not achieved. Only 58% of targets had been achieved in the first three quarters. the lack of leadership and switching over of leadership was the central reason for all. Stability was necessary for the APP to be adequately rolled out.

The Chairperson stated that the Committee did not bank on hope since hope was not a strategy. In 2014 the Committee had said that the APPs of entities should be aligned to the APP of the Department. Some entities had called that a top-down approach, in the November meeting, when it should be a bottom-up approach. The Department should set the record straight in that regard. That APP was aligned to DAC, but previous ones had had to be sent back by the Committee to be redone and aligned, work that should be done by the Department.

She asked what PACOFS meant by “Africa first” since the people the organisation served should be first. Additionally, the budget allocation for operations was only R21 million, which does not seem right. Many members of staff were under investigation, but the Committee needed details for monitoring purposes.
She asked what the challenges were in PACOFS and how they would be addressed. On the Committee’s oversight visits many issues were seen that had not been included in the challenges. The things that they had experienced were not there.

Ms S Tsoleli (ANC) said she had experienced some of the shortcomings referred to by the Chairperson on a daily basis since she lived close to PACOFS. The organisation did not offer value for money since they did not do enough work to justify their budget. She suggested that the organisation be closed so the Department could start afresh. The staff of PACOFS did not want to see the organisation move forward which might suggest that they were employed to do what they did not enjoy.

The current situation with the CEO had not been adequately covered and the organisation might be regressing to the state it had been in in 2014. Parliament had issued recommendations, which she was not sure if the DAC had seen it but none of them have been implemented. The Department had said that the CEO, who was suspended and eventually expelled, needs to return but the Committee recommended that that CEO was not fit for office. Processes used to appoint the CEO needed to be reviewed. The presentation had not adequately addressed the labour issues. There were only a few cases reported on, unlike PanSALB which had many more litigations. In the litigation, it became evident that the attitudes of the staff were problematic. What would the appointing of a CEO change since the council was the leadership?

There were a lot of underlying factors that hindered the implementation of the APP and those issues needed to be dealt with to get value for money out of PACOFS. The mandate of the organisation had not been achieved at all. The general public suffered the consequences. She was passionate about social cohesion and nation-building, which was included in the presentations, but asked what PACOFS was actually doing to promote that.

There had been very serious issues of racism in the Free State. There was an incident at Free State University which had not been addressed by PACOFS. The organisation had no relationship with those relevant institutions, including local government. Despite the budget for the mandate, the work was not done. The infrastructure was beautiful but PACOFS only used 1% of it because people were not going to the theatre. That was embarrassing compared to the Artscape, for example. The work was not being done to justify the budget.

The Chairperson said that the issue of where the power lay came out very strongly in the November workshop. The Department needed to clarify that. She wanted an answer to where the power lay.

Mr Makondo said he was struggling to link the PACOFS APP to the presentation by PACOFS. The Director-General’s presentation had been different from that of PACOFS. He compared the presentation delivered by AGSA with the ones of PACOFS and the Department and he could see the gaps: what the Department had presented was not a summary of the PACOFS presentation. Details on indicators were not in the PACOFS presentation but in the Department’s. That presented a problem with accountability. The Department spoke of the Nelson Mandela centenary which was not in the PACOFS presentation. Activities were not identified clearly by PACOFS. He did not think the document should be accepted without review.

Mr Grootboom said that talk of people being misplaced made him think of 2012/13 when CEOs were inappropriately appointed, and institutions were still sitting with people who are misplaced. The Department should take their overview and workshop it with PACOFS because there was no alignment. PACOFS should look at the composition of their council and management to look at the diversity issues that needed to be addressed when looking at demographics.

He addressed the order of priority of the APP Snapshot diagram. The hierarchy did not fall in line with Maslow’s Hierarchy of Needs, for example, saying it should be read from the bottom to the top. The bottom of the pyramid would be annual targets, then quarterly targets, then 17 strategic objectives, then the 20 KPIs, then strategic-oriented goals then strategic outcomes. The APP was more raw data than a presentation and should be sent back. There was no risk management policy and no consequence management for irregular expenditure. Inadequate marketing was affecting patronage numbers.

PACOFS was supposed to be looking at audience-broadening measures to get people back to the theatre after the Congress of South Africa Trade Unions (COSATU) came to strike in the theatre while a show was on. There was no union management plan to prevent that happening again. There was no production to revive the spirit of PACOFS. He asked what “the icon of arts in South Africa” meant as the mission said nothing. There were no staff management plans and competence, as well as staff appointments, needed to be looked at seriously. The APP was very poorly presented.

Mr Mkhize said the hierarchy of decision-making and accountability between PACOFS and the Department was quite clear as to what the board should be doing and when the Department should intervene. If the entity did not perform the Department had to intervene to provide leadership, guidance and oversight. Legally the organisation was accountable to the board, so it was the board that needed to be decisive and direct the organisation. The board had the power to hold the administration accountable, which the Department should ensure. The Department would be meeting with PACOFS to “tighten the screws’’. He said he was working with the executive to strengthen their relationship and was looking at reports to provide an early warning system. If things went wrong the buck stopped with the Department which had to intervene, but when things went well, the buck stopped with the board. That was why accountability was of utmost importance.

The Department had devised an intervention to be presented to the chairperson of the board. No institution could run programmes outside of government programmes. After the government had set out the outcomes and shown the hierarchy of planning, all entities needed to abide by that to ensure that the outcomes of government were achieved. Once done, government developed an NDP and MTSF which provided guidance. Then the Department worked with the entities seek to fulfil those goals. Therefore, the bottom-up and top-down approach were not at variance with each other. He suggested reporting to the Department to make sure a turnaround strategy was implemented. He was not sure why there was so little detail in the APP but the issues in the storyline of the Department’s presentation, were repeated in the APP with regards to artistic programmes, for example.

Mr Makondo said that details, such as that on Nelson Mandela centenary, should appear in the APP because the public would not understand the document and they should know that PACOFS had an activity that related to the centenary. It relayed the message that they had no idea what they were going to do but had allocated a budget to it.

Mr Mkhize accepted Mr Makondo’s view. The Department would meet with PACOFS on the issue raised about insufficient details.

The Chairperson said the insufficient details issue needed to be addressed immediately so that the APP would not be rejected. It had to be resubmitted with details before the following Tuesday or the budget could not be passed.

Ms Mnumzana said, in respect of where the power lay, that the council was not at PACOFS on a daily basis. The Director-General had missed PACOFS’ presentation but, as the PACOFS council, they had taken a resolution about where they wanted to take the organisation to fulfil the mandate of the Department. She agreed that more detail needed to be provided in the APP. The acting CEO and the artistic director had made that omission. Detail had been provided in the artistic programme approved by council.
The issue with unions had been resolved by the council sitting with staff and there was cooperation. One council member went to PACOFS almost daily to assure that, and one union had been dismantled due to conflict.

Appointing a CEO was difficult when the authority had advised them to reappoint the previous CEO despite some of his actions being illegal. The council thus decided that they would not bring that CEO back to PACOFS, especially since they had received an anonymous call to say if he was reappointed PACOFS would be burnt down. The past CEO’s actions were an issue being worked on by PACOFS’s legal team. A shortlist had been drawn up of candidates for the CEO position, but that case needed to be resolved before the organisation could continue with that process.

The Chairperson said that numerous questions had not been answered. When would the investigation against the previous CEO be concluded and was he also being prosecuted for fruitless and wasteful expenditure? The Committee needed details on those investigations. Current assets information was not available due to the vacancy of the CEO post. That was stated in the presentation. It was unbelievable that PACOFS did not have an asset register.

Mr Mkhize addressed the point on the reappointment of the CEO, saying that that might create the impression that the Minister was reckless, which was untrue. The country was regulated by law and if someone did not abide by the law, there would be a problem. The Minister would not say that it was okay not to comply with the law as that would undermine the law, so the decision made by council was sound. In that case, the council should request a review of, or circumvent, the issues. Once the decision had been made, there were legal avenues for challenges, and the council had to be careful not to be held in contempt. PACOFS should get a resolution of the investigation before appointing the CEO, but the current impasse was a problem since they might end up with two people in the same position.

The Chairperson remarked that there were more questions than answers.

Mr Makondo said he had expected the Director-General to speak as an administrator not as a politician. The organisation had had two CEOs before. When the previous CEO was appointed that matter was sub judice. The concern was whether the board would challenge that.

Ms Tsoleli reminded the Committee that that CEO was appointed permanently while the matter was sub judice. The Department could not assist because PACOFS needed guidance on how to deal with solving the technical details of the former CEO. PACOFS had the upper hand in the matter. The former CEO was third in line for the job. Where were those candidates who had come before him now? He was not qualified to do the job. He could not come back. The board needed to advise the relevant authorities that that individual could not be allowed to come back into PACOFS since he was the reason the organisation was in the state it was. There was no need for PACOFS to be burnt down. She said she would also go to PACOFS and fight if the previous CEO was reappointed.

The Chairperson said that Ms Tsoleli must not do that as she did not want her to be arrested. After the meeting, the Director-General would go and get all the information on the case and ensure it was given to the Committee. Sometimes only a little information was provided, and a decision was made on that when the rest of the information was necessary for adequate guidance. She asked for an indication of when the investigation would be concluded and a description of the litigation with the CEO and other parties.

Ms Mnumzana said the details were there when the council looked at the APP so those could be included before Tuesday. Matters on litigation had also been presented to the council since the council was not there on a daily basis and required reports.

Mr Makondo asked if the council would hold the officials accountable for the omissions.

Ms Mnumzana said what had happened in the Committee meeting would be conveyed to the board since she was now presented with questions that she had thought would be addressed in the presentation. The board had to hold the officials accountable.

Ms V Mogotsi (ANC) asked what the role of the council was if the council sent a representative to the Committee meeting when it did not know what was in the presentation. The council also had to take responsibility since they had to see the APP first in order to adopt it. They could not just hold officials accountable.

Ms Mnumzana answered that she took full responsibility on behalf of the council.

The Chairperson asked if the officials could provide details of the investigations off the cuff.

Mr Xaba said that there was misalignment between the APP, the PowerPoint presentation and the Department’s presentation. The executive decided to take a high-level approach, so details were excluded. The Department had been furnished with the details. PACOFS was happy to go back and workshop issues with the Department.

Mr Pule Moeketsane, Senior Manager at PACOFS, responded to the litigations to do with infrastructure. He said that when they had had a CEO, the Department had given an allocation for PACOFS to undergo a project earmarked by the organisation. There had been mismanagement during that process by a company appointed to oversee the implementation of those operations, but in the reporting process there had also been mismanagement and the Committee had called for a forensics audit. Towards the end of the previous year, PACOFS had received the final forensics report and, looking at its recommendations, officials had charted a plan of action and advised council as to what should be done. It was found that the contract with the company was open-ended and there was no expiry date. There was a project that did not go well, and the contractor took the PACOFS to court where the contractor had won the case. According to the forensic investigations, PACOFS had been overcharged, so management team of the company had to pay back R1.6 million to PACOFS.

He said there was a claim made to PACOFS for a stability study. He said it was difficult for patrons to attend shows at PACOFS since the air-conditioning was not functioning. They had claimed R4.4 million but because of the moratorium on payments in the province, no payment could be made. PACOFS had issued a disclaimer that no payments would be made to any company when they had completed work until a forensic investigation had been carried out. PACOFS had engaged the affected stakeholders. R1.6 million would be paid back to PACOFS and R4.4 million which was due for feasibility studies by HPAC would be deducted from the invoice

With the case of fire detections, PACOFS had won the case. The recommendation of the court was that no other contractor might be appointed, and the company had to finish the job. The job had been halted by the contractor when the contractor had wanted to claim more than agreed in the contract. The contract between the contractor and PACOFS had two clauses. One made it possible for them to leave the area and the other to return and resume the job. The contractor had thus not defaulted, and the engineering company did not want to sign off on that which needed to be completed.

Mr Moeketsane said he was trying to give a broader understanding so when recommendations made sense. Money had been paid before the contractors had resumed their job, which was said to be for materials that needed to be recovered. PACOFS had been assured that that had been repaid but could not find such transactions. The management team would submit evidence on the matters mentioned but with regard to the R1.6 million, PACOFS would deduct it from the R 4.4 million and would terminate the open-ended contract. Those were the litigations around the infrastructure projects.

On litigation with regard to labour, one case was about the financial manager but was at arbitration. The award had not been announced so PACOFS awaited that outcome. The other litigation was the matter of the former CEO. When the previous council’s term had ended in November, a resolution was taken to solve the process of litigation. A team of council members met those who were implicated, discussions were held, and arguments made. PACOFS said the former CEO needed to disclose before he could resume the job. A letter issued by the interim CEO had instructed him to resume his duties on 1 January 2018. He had not, to date, submitted the relevant documents so that the council could examine them. In December 2017, a new council had been appointed. A meeting was held to discuss that individual because the letter had said he had to resume his duties on 18 December 2017. The new council had said the matter would be reviewed, which it was. It was found once again that he had to disclose. The council had wanted to determine how much he should earn and to find out if he was double-dipping, using the documentation he had to provide to them. In January, when he had tried to resume the post, the council had informed him that he could not resume his position.

Mr Makondo interjected, asking if, when the CEO was dismissed, he was still on the payroll.

Mr Moeketsane replied that he was not on the payroll.

Mr Makondo asked what Mr Moeketsane meant by “double-dipping”.

Mr Moeketsane said there were council meetings where three potential arguments were explored on the basis of the CEO’s double-dipping and where the letter instructing him to return to work was discussed.

Ms Tsoleli, Acting Chairperson as the Chairperson had briefly left the room, interjected and asked for clarification of the question on double-dipping.

Mr Moeketsane said that when he had been reinstated, he needed to be paid retrospectively for when he had been dismissed. If he had been working for another government institution at the same time, that would be double dipping and would not be fair.

Mr Makondo said that Mr Moeketsane was wrong. He was supposed to implement the award not to interpret it. If the Commission had issued an award, it had to be reviewed. Mr Moeketsane had an issue with the person, not the award. If an employee stepped out of line and was dismissed, that person was off the payroll. The employee may then contest their dismissal in court. If the employee won, even if they had employment elsewhere, they received the award and had to be paid that award. He said Mr Moeketsane was wasting government money because of his own issues. Mr Makondo said he was worried about litigations at PACOFS. If litigations happened with their own money, officials would not do those things, but it was government money, so they did so. The Department should look into litigations at PACOFS and report the findings to the Committee which could then seek legal advice and see what was necessary. If it was not, those individuals who were responsible for the legal action had to be held liable.

Ms Tsoleli said the presentation showed that the previous board had taken the decision to reinstate that individual with the conditions stated. It would be beneficial to have a copy of those conditions to see if they were implementable by the former CEO. Additionally, if the board had taken a resolution, that should not change when a new board was appointed. The presentation did not say if the individual had been given a timeframe to comply with the conditions and to provide the board what it had requested since the new board had started in December and the individual was to start in January. The letter that the acting CEO had written following the resolution of that council, needed to be submitted.

The workshop with the Department and their entities was necessary and should reinforce that the authority lay with the board and council, who were actually supposed to be submitting APPs to the Committee. It was very expensive to take a case for litigation, so she agreed with Mr Makondo.

Mr Grootboom said, if the award was made, it needed to be executed or else PACOFS would be held in contempt and any litigation will be at one’s personal cost and not government’s cost. It was very important to know that.

Mr Moeketsane said that he had explained that there had been a council meeting held in December where a resolution had been taken and whatever was communicated to his fellow employee had to stick. It was untrue to say that CEOs did as they liked. The staff was there to implement the resolutions of the council. That instruction in the letter, even though carried out by the CEO, was a decision made by council in January.

The Chairperson asked when the resolution had been made for the CEO to come back. She wanted to establish the gap between when he was told to come back and told not to.

Mr Moeketsane said that the first letter to resume on 1 January had been written around October. Upon the institution not receiving what it had requested, another letter was issued in December, before Christmas. He had followed up via email, but the CEO had refused to accept the letter. On 1 January, during the holidays, he had gone to PACOFS.

The Chairperson asked if the October letter was based on the discussions of the council.

Mr Moeketsane said it was.

The Chairperson asked if the letter received in December was also based on the council discussions.

Mr Moeketsane said that there had been a meeting of the new council in December where the new resolution had been made.

The Chairperson said she felt she could not take the matter further but was not sure what it meant when a council could change their resolution in two months, since there had to have been people from the old council on the new council. It seemed decisions were made without thinking.

Mr Moeketsane clarified that the letter not to resume was not reneging on the prior decision. It was due to the CEO not having applied their conditions to furnish them with the information they had requested.

Mr Makondo asked if Mr Moeketsane was on the council.

Mr Moeketsane replied that at the time he was acting CEO, so he was there during the discussions.

Mr Makondo asked Ms Mnumzana what her understanding of double-dipping was.

Ms Mnumzana said she was not there when the matter was discussed but it was her understanding that it was when someone worked for government and worked for an entity somewhere else and they both belonged to the state. He was receiving two salaries from the state at the same time.

Mr Makondo said that that was not double-dipping. If someone received two salaries from the state that was double-dipping.

The Chairperson asked when Mr Moeketsane had started as acting CEO.

Mr Moeketsane said he was acting CEO from 15 December 2017 to 15 January 2018.

The Chairperson asked about the whereabouts of the Acting CEO that had been introduced to the Committee and who was supposed to be acting CEO until 29 December, which meant there had been more than one CEO at that time.

Mr Moeketsane said he was not privy to discussions on the previous acting CEO. The question would be better addressed to council. What he knew was that he was offered an acting letter on the 15th December 2017 and at that time the acting CEO was not at PACOFS anymore.

Ms Tsoleli said that question was better directed at the Department since the Department had informed the Committee that the Acting CEO would be acting at PACOFS until the end of the month. Council might be able to answer but Mr Moeketsane would not be able to. The letters from council were required to see the council members’ signatures and see who had signed off on minutes. The matter of the last council and the current one about the reinstating and dismissing was not right since resolutions had to be followed through from council to council.

Mr Makondo said the Committee had wasted a lot of time with PACOFS and was not getting the answers it was supposed to get. The Committee did not accept the APP and officials cannot answer all the questions, especially when the council was not fairly represented. A meeting had to be scheduled with the entire board to get clarity. The board had to account on those matters. He admitted that he thought there had been stealing in the institution.

The Chairperson said to Mr Mkhize that after oversight at PACOFS, the Committee had said it was a PanSALB 2014 situation in the making. PanSALB had been in shambles and relations had been tense. PACOFS needed to ensure that that did not happen and needed intervention to stop things in their tracks. It was sad when one gave it one’s all and nothing was achieved. The most important thing was to deliver to the constituency. The APP would be sent back to be returned on Monday with improvements. The documents requested were necessary. PACOFS needed to do honest introspection as to what it wanted to achieve. PACOFS represented artists who needed the assistance but was failing them.

The Chairperson explained that PanSALB had been the Committee’s baptism of fire. The Committee’s first oversight was at PanSALB and the institution had not been functioning. People had been fighting against each other and there had been a lot of tension. After meeting everyone, the Committee had come up with its findings and recommendations.

Overview of PanSALB by the Director-General of Arts and Culture
Mr Mkhize said the Department’s presentation looked at the strategy overview that fulfilled the mandate of promoting the development of languages, especially those that were formerly marginalised, and also of fulfilling the mandate of the Department. PanSALB had an improvement plan where not much detail had been introduced. The mission of PanSALB was quite clear. A number of things promoted their outcomes. The Department agreed with the mission that the organisation had a mammoth task. PanSALB had two outcome-oriented goals, namely sustainable institutional ability to deliver on the core business and comply with legislation, and the creation of conditions for the development of South African languages. Those needed to be fulfilled with partnership. The latter was addressed by one strategic objective while the former was addressed by five, including the delivery of marketing, communication and stakeholder management services which promoted respect for languages and was a critical objective.

PanSALB was aligned with the Department’s objectives by means of the Department’s outcome-oriented goal of a transformed and productive ACH sector. The institution played a crucial role since, without language, there was no culture carried over and there was no identity.

The link between the key outputs and targets of PanSALB and the ten Department priorities were in the areas of promotion of languages and improving the functioning of the PanSALB, as well as improving reporting and compliance. The institution had shown a dramatic improvement of their work over the past three years and had achieved most of their targets.

There were some issues on the legal status of PanSALB and the current constitutional arrangement between the Department and the entity. There was overspending but, because of the challenges regarding accountability, the matter had not been dealt with since it was difficult to access information from the institution.

PanSALB had received a disclaimer from the Auditor-General in 2013/14, partially because of extensive irregular expenditure of over R11 million in 2013/14 and over-expenditure of R38 million. The board had been replaced and in 2015/16, PanSALB had received an unqualified audit. There were issues around allegations of maladministration at the institution and the Department had appointed investigators through the internal audit unit. The unit had started work on 15 March 2018. The CEO had been implicated in the maladministration and was on special leave. The investigation was meant to be preliminary but there had been a request to extend it, so the CEO’s special leave had been extended to give the team time to perform their activities. It was anticipated that the investigation would be completed by mid-May 2018. The Committee had agreed to the timeline.

The Department had been asked if the environment of the organisation was conducive to the entity achieving its APP. The lack of a board for two years was a challenge that needed to be addressed because it meant that the CEO had the accountability of two authorities. On issues of staff litigation, it would be best to talk to PanSALB directly. There had been a request for R20 million to deal with litigation issues, which had been given. He expressed the hope that when the investigation and litigations were over, the institution would be in a better position to fulfil its mandate.

PanSALB Presentation of the APP 2018/19 to the Portfolio Committee on Arts and Culture
Ms Angelina Netshiheni, the Acting CEO of PanSALB, introduced the delegation from PanSALB. She outlined the PanSALB mandate in which the Department had left out one detail since their mandate actually included, Khoi, Nama, San and Sign Language.

The strategic-oriented goals of PanSALB were the same as the previous year. There were concerns in terms of progress and performance due to the reconstitution of PanSALB structures. The process had been started but not completed.

The finalisation of regulations that for National Language Boards and Provincial Language Committees to regulate the functioning of structures and the memorandum for incorporation of the National Language Boards and Provincial Language Committees could also not be finalised owing to the absence of the board. There were serious concerns about human rights violations complaints that PanSALB had received that sometimes needed a legal mind but, unfortunately, because of vacancy in the legal division owing to a dismissed manager who continued to litigate against PanSALB, that could not be done immediately.

A highlight in 2017/18 was hosting the Indigenous Peoples Language Conference of the Nama and Khoi and Sign Language Communication Chapter.

The Chairperson interjected, asking if the presentation the Committee had was the same as the one being presented.

Ms Netshiheni replied that she was providing extra information, on the advice of the Department.

The Chairperson said that Ms Netshiheni should have stated upfront that the presentation had been changed and why.

Ms Netshiheni apologised for not mentioning the changes in the presentation upfront. PanSALB had developed a monitoring and evaluation tools for literature and media and reviewed the draft document to the nine formerly marginalised languages and for Khoi and San languages. The organisation had celebrated Languages Month in February and had conducted a workshop for national departments and entities on the guidelines for language. The Committee would remember that in February 2017 PanSALB monitored the development of language policies towards the promotion of use of official languages, so that workshop had been a follow up on that.

There had been three programmes in PanSALB, but on the advice of the Department, they had been collapsed into two, namely Programme One dealing with administration and institutional support and Programme Two which dealt with language development, use and equitability. Programme Two was where the mandate of PanSALB was carried out and had the sub-programmes: language development, use and equitability of language use, and linguistic human rights.

Mr Talifhani Khubana, CFO of PanSALB, informed the Committee that the first sub-programme in Administration was finance, which contained three key performance indicators.

PanSALB would receive a clean audit for 2018/19 and should be able to achieve what it had set out to do. The only issue preventing the clean audit could be that of compliance since all other matters had been improved. Quarterly reports had been submitted as required. One of the financial risks in PanSALB was the National Lexicography Units not submitting financial reports on time, which would drag out the process of submitting financial records. Engagement had begun with National Lexicography Units (NLU) to ensure that that did not happen and that all submissions were made by 30 April.

PanSALB had had an issue with irregular expenditure in the past but the amounts of irregular expenditure had been reduced from 2017/18. Currently, there were no incidences of irregular expenditure. Funds were being recovered from people who had stepped out of line in that regard and, to date, R25 000 of R 82 000 of wasteful expenditure had been recovered.

PanSALB action still needed to be taken in some cases since National Treasury had dealt with them previously. In terms of managing the consequences, there was a target on the costing of the APP. Using a demand management plan, the organisation had ensured that it aligned with the requirements of carrying out its mandate. PanSALB ensured that it also contributed to the development of Small Medium and Micro Enterprises (SMMEs).

Risks to PanSALB included the alignment between the strategies of PanSALB and the demands of management strategies, poor decision-making and issues with supply chain. Risk management strategies were in place. ICT was important to ensure that the organisation did not develop in a vacuum. Risk management would include letting the executive make decisions in the absence of the board. Infrastructure and assets base had been a challenge facing PanSALB as per the audit outcome, but new ICT equipment would prevent that.

The Human Resources unit had been faced with many litigations which would be a challenge. The organisation had put together a KPI around Human Resources. Another KPI was reducing vacancy rate over the next financial year. It was a goal to increase the percentage of performance assessments finalised to 80%. The main problem in human resources was the litigations that used a big chunk of the budget. That risk needed to be mitigated, so PanSALB had a strategy to deliver on that risk. Branding and marketing of PanSALB was also necessary. Institutional planning and governance was a sub programme to be looked at.

Programme 2
Ms Netshiheni said there were three strategic objectives for Programme Two. The objectives aimed to research and record the development and use of official languages as well as Khoi, San and Nama and Sign Language in accordance with the PanSALB act. There were three sub programmes.

Sub programme 2.1 had four KPIs. The first was the number of dictionaries developed and produced per year where each NLU had to produce 11 dictionaries. Put that way it seemed like a dictionary was produced each year, but dictionary compilation was a process. The next KPI was the percentage of the terminology list that had been authenticated. The next KPI was the number of revised spelling and orthography rules for previously marginalised official languages, and the focus was on Nama. The next was the reports on language research conducted.

Sub-programme 2 had three additional key indicators, the number of National Language Board (NLB) structures re-constituted, number of Provincial Language Committee (PLC) structures constituted and the establishment of a Khoi, San and Nama language centre in partnership with the Sol Plaatjie institute. She hoped that would be completed by the end of the financial year.

The Chairperson said that the Committee did not function on hope and needed to be provided with what planning was being done to ensure that the outcome would be achieved.

Ms Netshiheni said that there was a plan in place to ensure the outcome was achieved. She added that during previous years there were insufficient nominations for particular approaches, so the organisation would advertise to critical stakeholders and await their call for nominations.

Sub-programme 2.2: Equitability of language use would cover national, provincial and local governments. At the end of the financial year a report would be presented. A key indicator was the number of activities in celebration of significant days there were many significant days that were relevant to PanSALB. International Minority Languages Day was on 9 August, but it was problematic in South Africa since it coincided with Women’s Day and it might be changed. On Dictionary Day, the organisation went to schools to run programmes to promote the use of indigenous languages and dictionaries.

Sub-programme 2.3: Linguistic Human Rights had three key indicators: number of linguistic human rights campaigns conducted, percentage of linguistic human rights complaints monitored, and the percentage of linguistic human right complaints resolved. A serious lack of service delivery by PanSALB was a risk. That would be mitigated by the reconstruction of structures, governance workshops, review of Norms and Rules and a review of the memorandum of incorporations of NLUs. NLBs and PLCs would not sign the memorandum of incorporations if issued by the CEO since they were answerable to the board - departmental assistance would be sought in that regard. Amending the PanSALB Act was especially needed in the area of NLUs. The pace was very slow, there were challenges in paying researchers and money given to them was not sufficient, although they had been able to find a publisher, so some royalties were coming in

Annual Budget 2018/19 for PanSALB
Mr Khubana presented the Annual Budget 2018/19 for PanSALB, saying they were purely reliant on one source of revenue: the grant from the Department and the national fiscus. He outlined the total of revenue afforded to Programmes One and Two and showed the projections of those budgets. Only 36-46% of budget was afforded to programmes. NLUs took 90% of the budget and thus additional funding needed to be afforded to make a real impact.

The budgets for programmes and sub-programmes were presented. The budget for Human Resources was based purely on what could be budgeted for since litigations sapped the budget. The sub-programme for linguistic human rights, if they had a permanent appointment, would struggle to meet the demand. The acting CEO said different measures would be looked into due to legal counsel being necessary. PanSALB seeks to appoint a legal team.

There were many implications of the budget cuts. PanSALB was affected by budget cuts of R3 million per year. The organisation had suffered under the VAT increase from 14 to 15%. The implications of that was the filling of vacancies that were critical to fulfilling the mandate, the review of contracts to search for value for money and necessity, to avoid leakages in the system by curbing irregular, fruitless and wasteful expenditure, to upgrade the infrastructure and to establish a video facility to reduce travelling and accommodation costs. PanSALB would only undertake projects that created an impact and forged partnerships with organisations with a similar mandate.

The Chairperson asked Mr Mkhize what had happened after nominations for the board had been received and forwarded on 7 November. The Committee needed to be informed about what had happened in the same report.

The litigation of employees required an explanation since there was an amount of R11 million unspent. She asked how much interest that money had accrued and what would be done with the interest. She found the dissolution of the Advisory Board of PanSALB because the CEO would not cooperate, unbelievable. The Minister could not allow a CEO to block the work of an organisation. She encouraged the good work being done by PanSALB because their mandate was very central and important.

Mr Makondo welcomed the APP. It really indicated the good work that had been done. PanSALB was an indication that if an organisation was committed it can achieve what it aims to. How was that issue of the employees being managed and did it relate to the balance of R11 million?

Mr Grootboom said the entity described the late submission of the financial statements from the NLUs as a risk. That should be a possible risk since they were not at the point where they had to submit yet. A risk policy was essential to mitigate possible risks. It was unnecessary to include the number of risk reports and submissions set out by the APP of 2017/18 and 2018/18. The organisation had completed the establishment of the Khoi, Nama and Sign Language Centre but should also be teaching those languages in schools in conjunction with the Department of Education.

In the APP document, it was not clear what the consultants, provided for in the budget, were to be used for. Instead of indicating the implementation of management and procurement plans, which required a positive or negative answer, the percentage should be included.

Looking at the financials, Mr Grootboom noted that there was a very high cost for switchboard hire. In terms of transport hired and private transport, was it only private when officials claimed for the use of their vehicles? There were a lot of abbreviations used that were not explained. Catering and banqueting were found on two pages where one says two events were organised and the other says eight events were organised.

The Chairperson asked if the NLUs would not cooperate, could PanSALB not withhold funding? NLUs needed to understand that their money came through PanSALB, so it was accountable to it. PanSALB had to aim to spend 100 percent of the budget, not 95% of it. The organisation could not function without a board.

Mr Sakhiwo Tyiso, Chief Director of Coordination and Monitoring, DAC, said that there had been a disagreement about who NLUs should be accountable to. The Committee had indicated that the legal team of the Department and PanSALB had to have a meeting to discuss that. That was why the actual report could not function: the entity was still claiming that it was a constitutional entity and took orders from the Committee and that administratively it received its funding from the Department. As such, it did not provide the PanSALB board access to the Institution which had caused the board to fall apart. The Minister had realised that it would be fruitless and wasteful expenditure to continue with the board and those wanting to be paid.

Mr Mkhize clarified the issue of the R11 million and the R8 million. R8 million was in relation to matters that needed to be settled prior to the receipt of the additional R20 million. Thereafter, on receipt of the R20 million, only R481 000 was used against that R20 million. The amount of money that had already been used to deal with that matter was outside of the financial year in question. That needed to be discussed and reimbursed so that the money could return to what it had been allocated for. That money was still within PanSALB.

When PanSALB had become aware of the matter, there had been a follow up that revealed that a board member had challenged the disbandment of the board, making it a legal matter. He asked if the Committee would be correct to continue with that matter.

The Department believed that PanSALB should still be on the right track for the board to be appointed, despite the pending legal process. The Department needed to resolve the status of the legal standing of PanSALB and the challenges relating to that.

The Chairperson said she had written to the Department to ask what the situation was around that matter but had not received a reply.

The Committee Secretary said a meeting should have taken place on 13 February between the Department’s lawyer or legal team and the PanSALB legal team and the Committee, to discuss the legal status of PanSALB but the weekend prior to the meeting, the Committee had received communication from the Minister that the matter was before the court. The Committee had responded to that on Monday 12 February.

The Committee noted the letters and requested confirmation of the appeal of the board member who had challenged the disbandment of the board. The Committee had communicated with the office of the Speaker asking for confirmation to process the letters but had received no reply, despite follow-ups. The office of the Minister had not replied either.

The Chairperson instructed the Committee Secretary to follow up with the Speaker’s office. The Committee had already planned the interviews for the Board. It had been informed of the case but had not been told what the implications would be.

Mr Khubana said that the first issue Mr Mkhize had responded to about the R20 million had been addressed. After PanSALB had been given the additional grant of R20 million, it had only concluded two settlements. Prior to that, in 2015 alone, the first batch of CCMA relief was R 3.1 million. In 2016 the organisation had paid R1.2 million for additional employees, and R4.4 million, which made up the R9 million that Mr Mkhize. Most of those settlements were paid before 2017, and if there were any conditions attached to those grants, it would be difficult to say PanSALB had reimburse the money. It would have to be a matter that PanSALB and the Department agreed on. It was important that Mr Mkhize was there to address that so that the financials of PanSALB and the Department were aligned.

On the interest accrued, the money was in the hands of PanSALB and, even in the case of surplus retention, approval had been granted. That money was intended for settlements and could be accounted for. Also, with regard to interest, the money was not necessarily kept in a single account.

The 2016/17 report had a breakdown on the assets of PanSALB. He was very surprised that the assets had been mostly cell phones and switchboard machines. The previous year he made the recommendation to the CEO that the entity should do away with cell phones, which had been achieved. Those who were given a cell phone had a maximum allowance of R1000. PanSALB had had expensive contracts with network providers and were now left with only two and for which the contracts would not be renewed. The switchboard was necessary infrastructure, but it would have been cheaper, in the long run, to purchase the switchboards and then get a maintenance contract for them. Although, the contracts were under review, where they offered no value, they were cancelled. Buying computers was a very unpopular recommendation due to the cost involved, but it had helped PanSALB.

The organisation was moving forward and was mostly dealing with legacy matters that were being phased out. The NMUs were indeed a risk, and not a potential risk. The organisation was trying to revive the relationship between it and the NMUs. NMUs were PanSALB structures, but NMUs were required to report to the board and in the absence of the board, the staff had not handed over documentation such as financial statements, although the previous year, some NMUs had co-operated. PanSALB hoped that the Act could be amended to provide for those types of situations.

The Chairperson asked if NMUs had received money in the absence of the board.

Mr Khubana replied that they had.

The Chairperson asked why funding was not withheld if they were not willing to submit the documentation.

Mr Khubana said it was a catch-22 situation. In 2017, there had been an incident where PanSALB had refused to pay an NMU in accordance with the Act and they were not happy. Ultimately PanSALB had been forced to pay the grant. The organisation did try to work with them, so they understood that those were compliance matters for PanSALB. The consultants provided legal advice. Transport indicated car hire or reimbursement. PanSALB wanted to facilitate the use of technology to hold meetings instead of providing transport and accommodation, which was much costlier. PanSALB had two programmes, the three was a typographical error.

On why the organisation did not commit 100% of the budget for some issues, he explained that those matters were prolonged sometimes, and the organisation was just trying to be reasonable and realistic. He said other issues to do with the numbers would extend the meeting for a long time.

The Chairperson said if there was any question that had not been responded to, that could be done in writing. She commended PanSALB for the work they were doing, especially given their adverse beginnings.

Mr Grootboom asked if the Department was building arts centres.

The Chairperson said that on Tuesday, when the Department presented its APP that would be covered in the AGSA Report.

Overview National Arts Council by Director-General: Arts and Culture
Mr Mkhize provided an overview of the vision and the mission of the National Arts Council (NAC) as well as the outcome-oriented goals and strategic objectives in the storyline. Outcome-orientated goals were aimed at creating a vibrant, inclusive and transformed Arts and Culture Sector, achieving global recognition for the unique South African Arts and Culture in line with the Department’s outcomes and programmes. The Strategic Objectives also corresponded with the Department’s mandate. There was a focus on the dispersal of funding. The Department dealt with various disciplines in the portfolio, so the NAC should focus on all of them. The lack of policy on unclaimed funds had been problematic. The APP of the NAC did align with the aims and mandate of the Department.

A forensic investigation of the NAC was currently underway and could impede the institution from fulfilling its mandate. The complaint from the South African Roadies Association (SARA) on conflict of interest and irregular awarding of funding to a beneficiary was reported to the Department because it had implications for the NAC CEO. The Department appointed had Gobodo Forensic and Investigative Accounting (Pty) Ltd, (GFIA) on 11 November 2017 to conduct the investigation, which was at an advanced stage, and was anticipated to be completed before the end of April 2018. A first draft report had been developed, with one interview outstanding despite numerous follow up efforts. Upon finalisation of the last interview (or scope limitation) a second draft would be issued to the Department for further review, consideration of the findings, conclusions and recommendation. That would be followed by normal communication processes internally and externally to the Council of the National Arts Council as would be appropriate for remedial action. NAC had been instructed to implement the results of their investigation. The Chairperson had been accused of using his own company, but he had indicated that he had not used his company and the money due to him was payment for his services as the Chairperson.

NAC Annual Performance Plan 2018/19 Presentation
Mr Hartley Ngoato, Chairperson of the NAC, introduced the delegation saying that not all council members were present. No slides on the investigations were included since he was presenting an APP review, but questions would be answered on the subject.

The Chairperson said that the report need not be presented word for word due to time constraints. Only areas that need attention and the support of the Committee should be highlighted.

Mr Makondo requested that the NAC tell the Committee what Members should and should not worry about.

Mr Ngoato agreed and requested that the questions be asked upfront.

The Chairperson said that the questions would be asked on the basis of their operations and what he voluntarily tells the Committee. Oversight was about asking questions but in that situation the NAC had come to account.

Ms Julie Diphofa, Arts Development Manager of the NAC, said the mandate spoke to what the NAC aimed to achieve, which was to give the historically disadvantaged such additional support resources as were required to give them access to the arts. It also spoke to addressing historical imbalances in the provision of infrastructure for the promotion of the arts and to promote the arts and to encourage excellence in the arts. What was meant by “develop” and “promote” was outlined in greater detail.

There had been a meeting of the NAC in August the previous year to charter the way forward and ensure it reinvented itself and remained relevant. Strategic realignment would continue taking place in the organisation.

Collaboration was important since their budget was insufficient to achieve all aims. It was essential to assess the impact of action before funding was provided. The NAC aligned with the NDP because it promoted social cohesion, transformation and nation-building. The NAC had a clean audit the previous year and planned to sustain it in the current financial year.

In a quest to move away from a discipline-based approach to funding, the NAC had proposed a programmatic approach. The five programmes introduced were social cohesion and nation building, innovation, design and creation, Arts platforms, strategic initiatives and capacity building. The strategic goals of the NAC were to create a vibrant, inclusive, and transformed Arts and Culture sector, achieve global recognition for unique South African arts and culture, develop a sustainable capability that enabled the arts to entertain and inspire, achieve increased access to markets and enable creative engagement for South African arts and artists. NAC also planned to increase awareness of the arts through advocacy and to enhance the NAC’s capacity to support the arts by strengthening its governance and organisational design.

Ms Diphofa presented the six goals in detail.

There were three programmes in the NAC budget, namely arts development, business engagement and administration. The NAC also had orchestra funding and had received communication from the Department in that regard but needed a concrete go-ahead for funding.

For the Nelson Mandela centenary celebrations, the focus would be on people with disabilities in order to promote social cohesion. That celebration had to deliver on that because disabilities programmes needed to be elevated and supported. Partnership would happen with the Gauteng Department of Arts, Culture and Recreation as well as Moving into Dance Mophatong (MIDM) and international bodies. The work was very inclusive. The anniversary celebration would be a NAC collaboration with MIDM according to NAC goals. MIDM offered accredited training as well as people who would be working with people with disabilities.

In terms of partnership with BRICS countries, an MOU had been signed with the China Federation of Literary and Art Circles (CFLAC). There were also collaborations with African countries such as Senegal and Namibia as per the DAC’s mandate, programmes and vision. To achieve all those goals the NAC needed to be empowered with strategic capabilities.

The Chairperson said that partnerships were important in any sector. For instance, the NAC could even use PanSALB to teach sign language when the NAC had theatre productions. When a particular activity was needed it was necessary to group organisations, but it was important to come together too to partner, learn and support each other. Artists in schools was another way they could collaborate.

Mr Makondo said he thought the NAC was going to take the Committee into their confidence since it was important to disclose the issues in the NAC.

Mr Ngoato appreciated the opportunity to take the Committee into confidence because the last time the

Committee and the NAC had met at the oversight meeting at NAC there had been “fireworks” and the Committee had left a clear mandate that the NAC had to litigate all other allegations made to the Committee.

It was noted in that sitting was that the NAC already had a chairperson of the audit committee, but the Committee had appointed someone to be the chairperson of that particular committee. As litigations in terms of issues raised in that meeting took place, decisions that had allegedly been made by the previous board had to be looked into. In doing so, they had looked into the minutes of the previous board’s meetings which were on tape only. What was found was that the minutes of the previous board meetings were either not signed or decisions that were taken were not signed and action plans that were discussed, were not happening. There had been a manipulation of board minutes. That was critical because it had led to the colouring of board decisions and also affected record-keeping of the organisation.

Mr Ngoato spoke freely about the difficulties that the board was experiencing at the NAC. All members, himself included, were being manipulated and threatened. Presentations were made to the Board and perhaps sent back for due diligence documents, but the very same proposal would be presented at a different meeting, without the requested due diligence. Board members received threats via sms, email and phone calls, especially before a meeting where money was to be allocated. He had received a threatening email before coming to Parliament. Board members were threatened, and false rumours were spread. When grants were awarded for artistic events, some companies were paid upfront in a single tranche, other companies received several small tranches over the entire period of the grant. When he had last appeared before the Committee, he had indicated that the NAC had spent all its money, but when he got back, the executive asked him to sign off a R 3 million surplus. It was very hard on the board members, but he believed that it was all about the money.

In the minutes it was found that, a year before the new council came in, AGSA had submitted findings to say that some employees of the council and council members were doing business with the Council and provided a list of those individuals for the board to deal with that particular issue. Upon further investigation it was found that the previous board mentioned the matter at a board meeting once, but it was never actioned. The previous board was then dissolved, and the issue immediately disappeared. That had to be addressed since some of the same people on that list were board members in the current board. That had created friction. Coincidently, once that matter had been revealed, one of the people on the AGSA list had resigned.

The NAC had submitted the report on that matter to the Committee for recommendations and was planning to be discipline-based on what was found. Based on the findings, the NAC would have to suspend 50% of the executive and that could not be done so it had to decide which issues were critical and where to start first.

For phase one of the disciplinary action, board minutes were used. The Council had found that it could not find hard copies and soft copies of the minutes for the same board meeting. The Council provided guidance on the action plan and the format of the minutes but found that the Board Secretary was not taking minutes during meetings. A print-out of an email showed that during the board meeting for more than five hours she only applied her mind for 20 minutes because she was busy on email. The board secretary was employed only as only the board secretary. She had no other jobs. Board members were to receive the board pack ten days before the meeting, but they never did. They received an often-incomplete pack the night before. Hence, the board was rarely fully informed when entering a board meeting. Board minutes took more than ten days for completion but when they were received, they were inaccurate. The board therefore had to discipline her, especially as their decisions were being manipulated. In discussions on the previous board, the new board had requested the recording of the meeting that had been transcribed. The board secretary stated that the board had empowered her to appoint a third-party service provider to verify the minutes of the previous meeting, even though the service provider had not been in that meeting to verify them. The secretary was the only person the council had suspended to date. The charge sheet had 13 charges, of which nine were specifically about board minutes.

Mr Ngoato noted that the Chairperson had asked another entity that day how it was possible to make a decision and then change it. He stated that it was very possible if the new board was not provided with records of the previous board. People who were aware of that would bring the same submission to two different boards. There had been numerous allegations that had found their way into the media. If the board had a meeting scheduled, members began to receive threats. He himself just received a message yesterday to say there was going to be a toyi-toyi at the NAC. There was serious manipulation of the system and employees had perfected the system.

The board had noted its limitations as a board. There had also been accusations that someone was leaking information to the media, implying that it was he, himself. A report had been submitted to the Committee outlining those issues. By looking at dates it was clear to see that the threats and accusations were by organisations who wanted money and knew that if they went through the official channels, they would not be approved. The Public Protector had contacted the NAC seeking documentation which they had provided. How did the Public Protector’s office become aware of certain minutes of certain meetings with certain agendas? The Public Protector would ask for minutes that the board could not provide or that were not signed.

Regardless of those matters, Mr Ngoato believed the NAC was moving forward well. The date of the judiciary hearing with the board secretary was approaching. Whatever things she had alleged, the hearing was where they would be brought to light. To date, she had made a number of admissions and confessions. The NAC had given the union’s new lawyer time to become acquainted with the case. In terms of the investigation that was being done by the Department, if the Department did not accept the NAC’s findings, that was okay, and the Committee was at liberty to do their own investigation. The fact that the investigation was still ongoing meant that those individuals implicated could not be disciplined by the board. Once the Department had the final draft of its investigations, the board would follow those recommendations. If the CEO of the NAC was wrong and needed to be disciplined, that would happen, and the board was clear on that.

The Chairperson said that the Committee had learnt that there were three sides to every story: my story, your story and the story in-between. The Committee was also in possession of the email saying that someone was leaking information. When did the Department inform an entity that there was someone leaking information and when did it not do that? When did entities warn other entities that information was being leaked and then used that information?

Ms Tsoleli asked how giving information to the Committee was regarded as leaking information since Parliament was empowered to ask for information from any entity or person. The board was very selective in applying disciplinary action. The board had been very reactionary in dealing with the secretary of the board but if the board was applying disciplinary measures fairly, it would have started with the CEO because she had increased her and the CFO’s salaries, which was against the law. She asked who was meant to sign off the minutes of the board because that person should also be charged for not doing what he or she was supposed to have done. When the Committee was doing its analysis on the overview of different entities, the people on the AGSA’s list were the same people with ties to the law firm or Mr Ngoato’s company.

Mr Makondo advised that the next time the presenters should prepare the presentation themselves, so they could speak from a position of preparation and not speak generally. On the overview, the issue of disclosure of information had been elevated to the Minister who had promised to get back to the Committee. Whether the charges came after the email or before it, still needed to be established. The Department needed to establish that. He found it unfair to charge the board secretary and not the board members on the AGSA list. What that conveyed was that a wrong was a wrong when done by one person, but by a group it was not. It was necessary that the NAC disclosed the names of the people who were mentioned in the AGSA report and disclosed whether they had appointed a company to investigate the company that they were affiliated to. Once that investigation had been completed, Mr Ngoato should report back because there was an allegation that it was his company. The Department had provided the Committee with a list of the investigations happening in their entities.

On the issue that related to the CEO’s increase of salary and the funding of the Lalela, the board had found out that the CEO was related to the owner of Lalela and would take disciplinary action against the CEO. Also, the board had investigated and found that the CEO had not increased her salary and that of the CFO, but she had paid herself a bonus. On the recommendation of the report, the Committee was told that the NAC was going to take disciplinary action against the CEO because she had not been honest. No action had been taken against the board members. He wanted to know how much had been paid to the investigating company, and what their findings were.

In the NAC’s APP there was a target of 90% for funding. The Chairperson talked about a surplus which was the same thing picked up in the APP. The NAC had set aside 10% for women, and an amount for disabled people and youth. How would the Committee do oversight on that?

Mr Grootboom said he was satisfied with the APP. He was not sure how risk mitigation, management plans and consequence management would be addressed. He also wanted to know the plans for addressing equity targets and arts promotion, and how the plans addressed nation-building and social cohesion.

Mr Ngoato addressed the question on the selective approach to discipline, saying that the action had not been reactionary. When the board had been given the instruction to investigate the Lalela matter by the Committee, they had come across the matter relating to board minutes. AGSA had raised the question about the individuals. Before it could be addressed the NAC needed to go back to AGSA and find out how that finding was closed. By the time the board had received the response from AGSA on that particular issue, the action against the board secretary had already begun, which was in the board minutes.

Mr Ngoato said he had come prepared to discuss the APP and was not prepared for a meeting on investigations since it was not on the agenda. Even given 24 hours to provide evidence on the investigations, he could do so. He was not the board, the board consisted of 20 other members, who were professionals in their own right. On the board minutes not being signed, he noted that if the minutes were not provided they could not be signed. If the person who was employed to do one thing for 30 days could not do that one thing, which was take the minutes and submit a transcript, he could not sign those minutes. The entire board refused to look at the minutes and they could not be charged for doing the correct thing.

Ms Tsoleli asked how many times the minutes had to be sent back because it did not contain what was discussed. She asked what was done to train or retrain that person who could not do the job she was paid to do.

Mr Ngoato said the minutes of the first three meetings were not signed. After the first meeting, the board secretary was provided with guidance, for which there was evidence. Almost five times the board could not get minutes and even had to arrange a special meeting to redo and reapprove all the minutes, which was an expense. It became even worse when the board found that during the meeting the committee secretary would be sending emails when she was supposed to be listening to the meeting.

The board had approved the salary increases of the CEO and the CFO. They were also awarded bonuses. The board was trying to follow Department of Public Service and Administration (DPSA) prescripts so when the board made that decision to say NAC employees must receive that salary increase, that was done through a round-robin where all documentation and information related to that decision had to be attached to that email addressing it and he would not say the board was misled, but the DPSA circular had not been included. The employees had refused to accept the salary increase of 6% as approved by the board because it was not in line with the DPSA and had requested the board to approve an increase of 7.5%. The board was not aware that one DPSA circular applied to level 1 to 12 and another circular applied to level 13 to 16, so the 7.5% salary increase was approved across the board. The salary increase of the CEO was, therefore, approved but the board had not been given the correct information.

Ms Tsoleli asked who had made a recommendation to the board based on the salary in the NAC. The difference in levels would mean a discrepancy in the increase awarded, but how did the CEO’s salary increase by 18%?

Mr Ngoato said the issue of 18% had been quite clearly outlined in the report submitted to the Committee. There was no salary increase of 18%. The board had approved 7.5% to 7.6% salary increase across the board. In that year, the CEO had qualified for a performance bonus of 5% of the salary. Upon review, the board saw that she had not received 5%, but 10%. That was where the 18% increase came from. The policy of the NAC said everyone received a 5% bonus. She received 10% because the person who did the performance appraisal, of which there was a copy, was the former chairperson. The board had approved the performance bonus, but it was paid wrongly. It was then that the CFO asked why 10% instead of 5%. That had also happened the previous year when someone who was supposed to receive 5%, had received 10%. So, the board had put everyone in the same basket and needed to deal with that issue.

Mr Makondo said that he had asked about the report that was sent by the Department and if that report existed, but Mr Ngoato had not responded. He also asked if the money had been recouped. On the AGSA report, he asked what the board’s intentions were on the matter.

Mr Ngoato said he had parked that matter when the issue of the 18% had come up. Yes, there was a report that the NAC had sent to the Committee and the Department on the AGSA report where the matter was explained thoroughly. Since litigation was still underway, the board could not charge for the issue on Lalela, the salary and the bonus. Timeframes had been provided for disciplinary action, but the Committee had decided to run its own investigation, the results of which they awaited. If the results were in line with the board’s report, it would discipline people.

The AGSA report could have been emailed because it had been so topical. The AGSA report implicated staff and board members. When the NAC had picked up that issue, they had followed it up with the AGSA, the correspondence of which could also be given to the Committee.

The Chairperson said that, in the report the Committee had, it was stated that the increase of the CEOs salary was found to be incorrect.

Mr Ngoato said he was not aware of the report from the Department, but he was aware of the report the NAC had sent to the Department. What the Department had sent to the Committee was not forwarded to the NAC.

Ms Tsoleli asked if the Department could be of assistance and settle that matter.

Mr Tyiso said that there was a threshold for a performance bonus above which the CEO could not be paid and she had been paid in excess of that performance bonus threshold according to the NAC standard, although she was rightfully awarded the bonus. That information had been extracted from the NAC and the Department had presented the report in question to the Committee not to the NAC board because it was the source of the information.

Mr Makondo asked if the NAC was aware of that report. In the recommendations it said that measures would be taken against the CEO.

Mr Ngoato said the NAC received that report a month ago.

Mr Makondo said he had a problem when a separate issue was raised when he was addressing one issue. The recommendation was that the NAC would take action against the CEO. What had been done concerning that matter?

Mr Ngoato said that the NAC had discovered the bonus irregularities. The NAC then composed a report which was sent to the Department and the Committee. From there the Department had extrapolated and submitted its report, therefore he was not aware of the Department’s report

Ms Tsoleli asked if the information in the Department’s report differed from that in the NAC’s report.

Mr Ngoato said that the question was if the NAC was aware of the report and it was not, but it was aware of what was in the report because it was the source.

Ms Tsoleli asked what had been done to correct the matter.

Mr Ngoato said that the Department and the Committee did not trust the NAC report so the month after they had decided to investigate the issue themselves.

The Chairperson said the Committee would never do that because that the Members would be sent to court since the Committee could not institute a forensic audit. The Department could and had the right to do as many forensic audits as necessary. The Committee could only make recommendations. The investigation did not take away from the corrective actions that the board had to take.

Mr Ngoato said that that issue was straightforward. Misconduct had been discovered and reported to the Department and the board had said it was going to discipline the people. The Department then decided to conduct its own investigation.

The Chairperson reiterated that the Committee did not institute investigations. It made a finding and recommendations to the Department. It was disheartening when one found out that the person chairing the investigation was a friend of the CEO from outside the institution. Background checks should be done on the person who chaired the investigation.

Ms Bilankulu said she thought the board members were in conflict about the chairperson. It was like Mr Ngoato was defending the board and accusing the Committee of something. The board was shifting their responsibilities, but the Committee was not bound to only listen to the board, it listened to the Department too and whoever else had information to assist.

Mr Ngoato said it was quite clear that the Committee had not appointed the investigator, but the fact of the matter was that investigations were underway.

Mr Ngoato said that the charges had come before the email about someone leaking information. We were not even aware of the existence of that email. It had been revealed during the disciplinary hearing.

Mr Makondo said it was very difficult to believe what Mr Ngoato was saying because the board would not have not known that the secretary was not doing her job if the CEO had not said so, and the email was also sent to the CEO.

Mr Ngoato said he would run out of words to respond to Mr Makondo on that issue. The mandate of the board secretary’s job had to be approved by the chairperson (himself) as did the board minutes. The charges were not to do with the CEO; they were to do with the job description.

The Chairperson said that, according to the information provided, the board secretary had been charged after the email.

Mr Ngoato asked what the date of the “so-called” email was.

The Chairperson called for order.

Ms Tsoleli said that that was not how the Committee did things and Mr Ngoato could not backchat the Chairperson.

The Chairperson requested the dates for the “so-called” email from the Committee Secretary. The Committee Secretary said the Department had received the email from the CEO of the NAC on 2 February 2017.

Mr Ngoato apologised to the Chairperson, saying he just wanted to clarify the matter of the board secretary. She had been charged in August and in August the board had already had more than six meetings. It had no relation to the email that was sent. The charges were not based on that email, neither was the board aware of the email. The board had just decided that they could not allow the board secretary to continue.

Ms Tsoleli asked in which year the charge and emails had happened.

The Committee Secretary clarified that it was 2017.

Mr Ngoato said the matter had not arisen in January when the Committee there. The board had not been appointed in January, but in February, and the chairperson had been appointed at the beginning April. So, the Committee was there in April not in January.

Mr Ngoato said the board had taken the decision not to charge people working with government. The final answer from AGSA had come late the previous year. The board had only had one meeting to date and would deal with the matter. One meeting was held per quarter. A decision would be taken in the next council meeting on those issues.

There was an issue about the law firm or company appointed to investigate the secretary of the board. The board had not appointed a company to investigate the secretary of the board. If the board had, it would have had to follow proper procurement processes of the NAC and there was no appointment of such a company on the supply chain database.

There was a question on the 90% surplus in terms of the targets. When the NAC had allocated 100%, it was approached by the executive and had a surplus which had come about because those companies that had been provided with funding, did not comply. The money was then returned to the NAC. The 90% was an attempt to limit surplus to just 10%.

Mr Ngoato said that the NAC received many applications and was unable to accept all of them so only worthy causes were selected. When there was a surplus, those applications were reconsidered.

The Chairperson said that when there was no plan as to how to spend money, when it came back, it gave entities free reign to do whatever they wanted to do about it. Even in going back to the projects that had applied and did not get funding, the board you give those projects choice funding. Surpluses opened space for corruption. It had happened to the NAC and in the Department.

Mr Ngoato said the problem arose when the companies did not comply, and the NAC had a surplus. When confronted with the issue of having to write off a surplus, the NAC questioned its monitoring and evaluation processes because if that had been done properly the amount would have been picked up before it got to R1 million. He agreed that when money and people came together there was always room for corruption. NAC needed to tighten the screws on the system to reduce surplus.

Mr Makondo asked when the contract of the CEO expired.

Mr Ngoato replied that it expired in two months’ time, in June, because the NAC was currently busy with the CEO performance review.

Mr Makondo asked why the board did not want to act against the CEO.

Mr Ngoato said that the board understood that it needed to act. However, the explanation as to why the board had not acted to date was unacceptable to Mr Makondo. The board was not in any way trying to protect or defend the CEO. It was just coincidence that her contract was coming to an end.

Mr Makondo asked if Mr Ngoato knew what it meant if her contract ended.

Mr Ngoato said that whether she left after her contract had ended or did not leave, did not mean the board could not follow up and recoup the money, if necessary. The matter was sub judice, so the board felt it should let the Department finish the investigation and it would act if there had been wrongdoing.

Mr Makondo said the issue of the investigation had nothing to do with whether the board took disciplinary action. The board had conducted an investigation. The Minister had not said the board should not act based on that. Hence, it could be assumed that the board was protecting the CEO and wanted her off the hook.

The Chairperson said the Committee had experience of people committing serious crimes in the Department. The reason why there were no consequences was because the people had resigned and were no longer working in the Department.

Mr Mkhize said the issue was around Lalela. The investigation with the issue of conflict of interest was what needed to be investigated. There had been miscommunication or a misunderstanding about what the Department was investigating. The board had to implement their recommendations and that was what the report from the Department was saying. The Committee would deal with the matter of conflict of interest that was raised but to clear that confusion it was important that the Department drafted a letter for the board to act on their recommendations. On the leaking of information, it had been brought to the attention of the Minister, and to whom the emails were provided, hence the Minister would deal with that.

The Chairperson asked if the NAC understood that they needed to implement the recommendations of their investigation.

Mr Ngoato said that the next time it would be better to do the NAC presentation with documentation and agreed there had been miscommunication between the NAC and the Department since he had been invited to watch a presentation on the areas that need to be covered by investigators. The NAC had provided everything it needed to investigators.

The Chairperson said that the Members asked questions since theirs was an oversight function, mandated by the Constitution. Nothing was personal. Robust meetings were necessary. She encouraged the entities to make the most of that time so that the Committee’s last report was a positive report. The Committee had learnt that it would not solve everything in five years, but it could set a firm foundation.

Mr Makondo said there was someone who had been working at NFVF (National Film and Video Foundation) and who was working at NFVF in the same position but who was under investigation at NFVF. He asked that Mr Mkhize report on that at the next meeting.

The Chairperson said that the same thing had happened at PACOFS. When someone was employed, a background check was necessary.

Mr Mkhize said the Department was aware of that individual. He hoped the NAC would be able to engage with the CEO of NFVF about that matter. The investigator was dealing, mainly, with a conflict of interest, and the irregular awarding of funding to a beneficiary. The board was free to discipline the CEO.

Mr Makondo said, in parting, that Mr Ngoato had to tell the Committee when the next board meeting would be held.

Mr Ngoato said it was scheduled for 28 May 2018. On the issue of the NFVF, he had been shocked when he had heard about it, but NFVF was another entity in government so they thought that there was nothing irregular when the board held interviews and appointed the individual. The NAC had received the information from the Department and would act accordingly. Two board members who had sat in on the interviews had said that everything was above board and they had instructed the council to run background checks. Everything had been done according to the book.

The Chairperson said an interviewer should make the effort to contact the last place of employment. If a CV stated that the last place an interviewee had worked was NFVF, then that was where one checked.

Responses to unanswered questions would be submitted in writing as the Committee had run out of time.

The meeting was adjourned.

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