Sport & Recreation Annual Performance Plan: AGSA input; Committee Report: SRSA Budget; with Deputy Minister present

Meeting report

Opening remarks

The Chairperson announced that the Committee had noted in the previous meeting that they could not proceed with their set programme and engage in the forthcoming debate without inviting the Attorney-General to present. Unfortunately, the meeting was not being held on the day on which the Committee usually met. The National Council of Provinces (NCOP) had invited SRSA to a meeting and so the Members and all those in attendance were asked to focus only on the APPs that would be discussed in the presentation to give the Department ample time to attend to their other task.

The Chairperson welcomed the Deputy Minister, Mr Gert Oosthuizen, and noted an apology from the Minister, Ms Tokozile Xasa, who could not attend as she was at a Cabinet meetings. The Chairperson welcomed the Auditor General and all Committee Members, as well as the Department. The Members were given a chance to review and adopt the agenda before starting the business of the day. The Programme of Parliament was noted to be rather busy and unfortunate of late, but the Chairperson insisted that those Members who were capable of doing so had to perform an oversight visit, and later brief the Committee, on the soccer match occurring later  that day. The South African Football Association (SAFA) and the Premium Soccer League (PSL) had made a promise to provide tickets to the relevant parliamentary offices but, unfortunately, none had yet been received.

The Chairperson proposed that the meeting focus only on the Briefing by the AG as well as the Consideration and Adoption of the Committee Report on the Performance of SRSA as there were many other commitments which had to be attended to.

Auditor General Briefing to the Portfolio Committee of the Department of Sport and Recreation

The Business Executive of the Auditor General (AGBE), Mr Lourens van Vuuren, stated that he would brief the Committee on the results of the APP Reviews which the AGSA had conducted. He felt it was important to clarify for the Committee that that task was not one which AGSA was required to perform for every entity. The AG followed specific criteria to determine which entities would be reviewed and in the case of the Committee’s Portfolio, the Department of Sport and Boxing SA were the entities which had been chosen as a result of some issues which had been noted in prior years. The purpose of the briefing was to provide feedback on the results of the Interim Review of the Draft APP of the Department as well as Boxing SA. The Committee was advised to take note that the task under discussion was not an audit but rather a review which the AG conducted each year prior to the actual audit of a specific entity.

Key Committee Considerations when Reviewing the APP

Speaking on the key considerations which were prioritised in the reviewing of the APP, the AGBE stressed that they were the most important part of the presentation which the Committee Members should utilise for assistance in their oversight, as well as to remind themselves what their focus should be on. He listed the key considerations as follows:

-Is there an alignment between the APP and the MTSF?

-Are the indicators relevant and complete? Furthermore, are these linked in any way to the legislation and the National Development Plan (NDP)?

-How can the APP be achieved? In this regard, performance contracts and monitoring initiatives are important tools which can be utilised to determine whether the stated objectives, indicators and targets are being met; and to ensure that every individual in the system works towards these APP goals as opposed to only focusing on their individual performance targets.

-Are there adequate human and financial resources to achieve APPs? In this regard, it is important to establish a clear link between what is in the budget as well as what is in the APP as the absence of this linkage creates the risk that the objectives and targets will not be achieved.

-Are the targets realistic? Targets should comply with the SMART principles and be Specific, Measurable, Attainable, Realistic and Time-bound.

AGSA Review Findings on Draft 2018-19 APP

Department of Sports and Recreation: Programme 2- Active Nation: Number of Sports Academies Supported

In terms of measurability, the review had found that the key words “non-financial support” were not described in relation to how they were used to measure performance. Also, how the information was determined, was not explained. In terms of Relevance, the review had not identified any findings for that programme.

Department of Sports and Recreation: Programme 5- Sports Infrastructure Support: Number of Municipalities Provided with Technical and Management Support

In terms of Measurability, the review had found that it was not clear what the Technical and Management Support would entail. In terms of Relevance, the review had not identified any findings for this programme. The AG asked the Committee to note that the SRSA had made changes to the Technical Indicator Descriptions (TID) since the review.

Boxing South Africa

Programme 2- Boxing Development: Reports on Assistance Extended to Associations

In terms of Measurability, the review had found that “Assistance” had not been properly defined in terms of the TID or the plan. In terms of Relevance, the review had not identified any findings for this programme.

Programme 3- Boxing Promotion: Reports on Implementation of Boxing Information Provision Programme

In terms of Measurability, the review had found that “Boxing Information Provision” had not been properly defined in terms of the TID or the plan. Furthermore, the indicator had not been specific as it did not detail Boxing Information that would be implemented in the 2018-19 period. In terms of Relevance, the review had not identified any findings for the programme.

The AGBE asked the Committee to note that the entity had agreed to make changes to the APP after the Auditor General’s findings on measurability and further advised the Committee to ask the management of Boxing SA, on their next visit, whether they had implemented the changes recommended by the AG and management should present the changes it had made.

Discussion       

The Chairperson thanked the AGBE for the presentation and appreciated the relevance of his attendance as she believed that it had provided the Committee with information that it needed to hear.

Mr D Bergman (DA) noted that an important factor pointed out in the presentation was that the Committee had to be focused and relied greatly on the process of reporting of the APPs. The Sports Trust was another problematic entity. Could the Office of the Auditor-General confidently say that it could rely 100% on the information that it had been given? He also wished to know what capacity the Department had in terms of performing oversight.

Mr T Mhlongo (DA) asked the AGBE to further elaborate on the comment in the presentation which read “Auditing to build public confidence”. What mechanisms and measures had the Department put in place to ensure that the issues pointed out by the AG were rectified? Were any changes proposed? If so, where was the list of those changes and when would they be implemented? He failed to understand why the issues highlighted under Boxing SA had been a challenge for such a long period and yet the Committee was still being advised to enquire about those issues at a later stage. What had the Department told the AG? What had they done to overcome those challenges?

Mr S Ralegoma (ANC) noted that the quarterly achievability of targets was a key issue which had been identified in the presentation, whereas compliance with targets seemed not to be a problem when observations were done on an accumulative yearly basis. The Committee had already engaged with this issue and its view was that the entities should push back their quarterly targets to be able to comply with the achievability. What did the AGBE suggest that the Committee should recommend to the entities? Secondly, he noted that the AG had led the Committee to believe that every year it should receive an audit outcome.  However, it now looked as though the Committee would not get one as it should have been presented already. The Committee was therefore worried about going into the budget debate without the audit outcome. The Committee knew that the SRSA would get a clean audit but would still prefer confirmation from the AG.

The AGBE began by addressing the question regarding the 2017/18 audit outcome and stated that the Auditor General was only beginning with the final audits for the 2017/18 period and those would be completed at the end of July. Presently, the AG could not indicate any outcome of the audit for any entity as the AG did not yet know what the outcome would be. In 2017, SAGE had exceeded its budget but a review of their quarterly report seemed to show that they have come within budget. Nonetheless, the AG still could not confirm what the final result in their audit outcome would be.

Turning to the question of quarterly targets and achievability, he stated that the crucial factors that had an impact in those instances were planning as well as the setting of targets. An entity had to clearly define whether its targets were quarterly or annual. Secondly, entities tended to struggle to set targets for Quarter 1 but began to pick up towards Quarter 3 and then rushed to meet targets in the 4th Quarter. The AG had found that major cause of struggle in those entities was poor planning and advised the Committee to monitor that issue and specifically enquire about planning and the allocation of resources, as a failure to meet targets in Quarter 1 created a risk of failure in Quarter 4, as well.

On the question regarding to the capacity of the Department to conduct oversight, the AGSA was currently auditing SRSA, SAGE and Boxing SA. While there were funds which were transferred to other entities within the sports environment, the AGSA was not the auditor of those entities. However, the Auditor General did, to a certain extent, audit them by enquiring about the circumstances under which they received their funds. Also, the Department did exercise oversight over how those funds were utilised. The Treasury Regulation 8 discussed the transfer of payments as well as the conditions that the Accounting Officer could set in the transfer of payments to entities, including reporting requirements. In some cases, one of these conditions that the Accounting Officer could set was the requirement of an Audit Certificate from the recipient entity. Finally, upon the reviewing of entities such as Boxing SA, the AGSA merely made recommendations based on their findings and it was the responsibility of those entities to address those findings and adopt the recommendations. The idea alluded to by the Committee that the Department should be involved in ensuring that those recommendations were adopted was perhaps part of another important discussion which should be held. Currently, the Department did have some oversight capacity as one of the donors and perhaps it could be possible for it to attach to its transfer payments, conditions such as mechanisms that would ensure that performance measures were at the required level.

Mr Alec Moemi, the Director-General (DG) of SRSA, began by explaining the procedure which was followed in the review of the APP. Prior to finalising the APP, the Department, firstly, conducted a Draft 1 analysis of the current APP which had already been approved and gazetted and analysed their performance for the previous year. The Department reviewed their quarterly monitoring and review reports and, finally, considered the observations and recommendations by the Portfolio Committee. Draft 1 was then subjected to the inputs of all the Directorates in the Department. Following that, a senior management official within the Department reconciled the inputs of both the Department as well as the Portfolio Committee to create Draft 2 of the APP. Draft 2 was sent to an Internal Departmental Retreat at which the Ministry provided directives in terms of the new priorities and an attempt was made to reconcile those stated priorities with those from a performance agreement signed between the Ministry and the Presidency. At the end of the Retreat, the Department emerged with Draft 3 of the APP.

Draft 3 was sent to the Deputy President as well as the Department of Policy Monitoring and Evaluation (DPME) in the Presidency, who were the custodians of the framework for compliance as far as the APPs are concerned. Those parties conducted a review and provided feedback on the changes which the Department needed to effect. Having incorporated those changes, the Department emerged with Draft 4 which was given to the AG prior to the auditing process. At that point, the Committee was advised to note that the review under discussion was one which had been performed before the APP was approved. It should also be noted that having given its feedback to the Department, the AG mainly performed the task of quality assurance and determined the standard which would be applied in their auditing process, thereby assisting the Department to prepare for the ultimate auditing process. In turn, the Department engaged with the feedback by the AG and generated a Final Draft 5 which was forwarded to the Ministry for approval before being tabled in Parliament. At that point, the Minister, who was also viewed as the final editor, might make further changes and create a Draft 6, although that was rarely the case.

Finally, following the Minister’s approval, the final draft was presented in Parliament where the House debated it and established the grounds for the allocation of the budget by the Appropriations Committee.

The DG encouraged other entities to follow the same procedure as it was the most efficient. For example, if Boxing SA were to follow the same procedure and submit their final draft to the AG before tabling it in Parliament, then they would not have to go through the trouble of having the AG conduct a review on the tabled draft, being told to effect changes and essentially making the Committee perform the same work twice by sitting through another presentation.

On the Department’s involvement in the effecting of changes recommended by the AG, the DG reiterated that the Department was not supposed to interfere in the running of the entities as they needed to have their own autonomy and operate independently. The Minister appointed the Boards for those entities by considering individuals of certain competencies and doing so through a consultative process. The Department’s role with regards to those entities was to forward a Mandate Paper which suggested the priorities which it believed the entities should pursue. For example, the Department would suggest to Boxing SA that it obtained an unqualified audit and to SAGE that it obtained a clean audit. The Department also held quarterly meetings with the entities to monitor whether they had implemented the aforementioned suggestions. Therefore, to answer directly, the Department did, to some extent, take certain measures to ensure that the entities effected the changes recommended by the AG.

The DG was glad that they had reached a stage where they could discuss the entities together with the Committee in the manner they were doing as that showed significant progress from the discussion held two financial years ago on why Boxing SA had not even submitted an APP. He asked the Committee to remember the tremendous progress which entities such as Boxing SA had made, to commend the current and previous Boards, but also to understand that it would take some time for an entity which was once so badly run to recover. It could be said with confidence, however, that the Department’s Mandate Paper for the 2018-19 period would be able to set those entities the target of achieving a clean audit.

On the issue regarding the extent to which the audit confirmed or denied allegations made, he stated that, at the outset of the audit process, the Department received many allegations via the Presidential Hotline, Public Service Commission and the Public Protector. Those allegations which pertained to irregular appointments amongst other issues, led the Department to deal with approximately 20 to 30 investigations by the Chapter 9 institutions annually. Though the cost of accounting was huge, the entities believed that every allegation had to be fully investigated and the Department had to assign resources for those investigations. What was more, the investigating institutions refused to rely on each other’s work and findings; meaning that if one individual complained to two different institutions on the same matter, the Department would have to answer to both institutions through their individual and distinct procedures.

The Sports Trust was a good example of those issues whereby each year for the past four years, a certain pseudo-journalist by the name of Graham Joffe had written to the AG, the Presidential Hotline and the Public Protector, making allegations alluding to something untoward about the work of SRSA and the Sports Trust. Therefore, on two separate occasions, all the Chapter 9 Institutions were investigating the matter at the same time. The DG stated that while no one denied that there should be a sense of accountability within the country’s institutions, investigators should show a sense of reasonableness considering the capacity of the institutions and, especially, in instances where allegations are repeated. Nonetheless, the Department welcomed the vetting of entities by the AG, particularly those that could not be trusted and those that received the biggest cut of the budget as they proved to be appropriate sample choices for the final audit.

Mr A Botes (ANC) sought clarity from the AGBE on the response that the auditors of the Section 3(a) Public Entities were different from the general auditors at the AGSA. He had a follow-up question based on the answer.

Mr Bergman thanked both the AGBE and DG for their explanations and noted both explanations as relevant. To the DG, he asked for an elaboration on the complaints which were investigated the previous year. What were the complaints about and what were the outcomes of the investigations? He also stated that a considerable amount of focus tended to be directed to the AG’s report and the achievement of a clean audit, only for it to be found a year later, that there were some irregularities that had been overlooked. The DG and AGBE had already explained that it was just a statement. Nonetheless, the Committee Members ought to be more interrogative of the data which they were given and hold the relevant parties to account when they found that the reliability of the information provided was problematic.

The Chairperson welcomed Mr Bergman’s point, stating that it was the reason why even after having received an indication that all was well in terms of the subject entities, the Committee still felt that they needed to go into the forthcoming debate with detailed and precise information so that they avoided misrepresenting the SRSA and the AG.

The DG said he would forward the information regarding the investigated allegations to Mr Bergman.

The AGBE stated that two pieces of legislation helped one to understand what the AGSA did and did not audit. Firstly, the Constitution stated that the AG would audit all national and provincial departments and municipalities. Secondly, the Public Audit Act also provided some guidance in terms of the matter. Therefore, there was certain legislation which, additionally, mandated the AG to audit certain entities. An example of that was the SABS CSIR whose enabling legislation contained a clause which stated that the AG would audit it. There were also Section 4(3) entities in the Public Audit Act which were other entities that were not prescribed by law but might be audited by the AG where specific criteria were applicable. Should the AG decide not to audit the entities in that category, they had to consult with the AG annually on the appointment of their alternative auditors. The Members were invited to mention any specific entities which they would like to receive feedback on. The AGBE would report back on those on 12 June 2018 during the Capacity Building Session scheduled with the Committee.

The Chairperson thanked the AGBE for attending the meeting and stated that the Committee was not disrespecting him but rather doing the opposite by inviting him to present. She asked the Committee Members to release the AGBE and members of the Department and move on to the second point in the agenda.

Report of the Portfolio Committee on Sport and Recreation on Budget Vote 40: Department of Sport and Recreation South Africa for the Financial Year 2018/19

The Chairperson asked the Committee Members to begin by engaging with the Observations and Recommendations of the Committee. They had already contributed inputs in the previous meeting and were now in the Final Stage of the Report. She proposed that the Members use the same strategy as used at the previous meeting where Members had reviewed the report, page-by-page and added information. She invited both Members who were and those who were not present in the previous meeting to add their input as that was the final day. The compilation of the report had taken so long owing to the Committee not having the relevant people to do the work. The Chairperson, therefore, thanked the Committee Secretary, Zoleka Kula, for rescuing them as they would not have had the report without her. She also asked whether the Members were satisfied with her proposal or whether they would prefer another strategy.

Mr Bergman stated that, although he had not been in the meeting when the report was compiled, he had read through it as it had later been emailed to him. His political party’s procedure was always to present to the caucus first and get their input. As a result, the DA would have to reserve its right on such a report at that stage.

Mr Botes suggested that the Committee look at the observations and recommendations first and then proceed from there.

The Chairperson asked the Members to take note of Mr Bergman’s statement and remember that it was not a new trend.

Mr Ralegoma wished to make an additional recommendation and asked that the performance targets of the entities be pushed back to Quarter 3 and 4 as they tended to not be achieved in Quarter 1.

The Chairperson questioned how the entities could not have targets when they met on a quarterly basis. What would they prepare for before they met in the first quarter? The Committee needed to be clear on what it wanted to do because if there was a meeting regarding strategy, for example, then the entities needed to be able to come up with something. Quarter 1 and Quarter 2 needed to have targets, particularly ones which could be achieved. The Committee could, therefore, state that Members had noticed that the targets which were usually set for Quarter 1 and 2 tended not to be met. Following that, the Committee could also make proposals as to what type of targets could be set for those two quarters.

Mr S Mmusi (ANC) welcomed the Chairperson’s proposal regarding Mr Ralegoma’s recommendation.

The Chairperson presented the report of the Committee for adoption and asked whether there were any proposals for adoption.

Mr Ralegoma stated that he moved for the adoption of the Committee Report. Mr Mmusi seconded the move to adopt the report.

The Chairperson noted that the Committee had not been able to begin its preparation for the forthcoming debate as they had been awaiting the presentation and discussion by the AG and SRSA. She noted again the reservation of the DA in the adoption of the report as well as apologies by Mr P Motega (EFF), and Mr M Mabika (NFP). The Committee was nonetheless quorate as Mr Bergman and Mr Mhlongo were present. Could the Members please go and prepare for the forthcoming debate and ensure that it would be a robust debate? The programme of Parliament had been immensely tight but the presence and commitment of the Committee Members in their social clusters was very much appreciated.

The meeting was adjourned.