National Lotteries Commission & Netball SA briefings

Meeting report

The Chairperson welcomed the visitors and apologised for the logistical problems and the meeting starting late. She further made a few household announcements including new staff members which Parliament had seconded to the Committee.

Briefing by National Lotteries Commission (NLC)

Prof Alfred Nevhutanda, Board Chairperson, NLC, introduced his delegation and submitted an apology for the Chief Executive Officer (CEO). He said that funding for sports and recreation had become problematic in that sports federations had become quite large such that the NLC was struggling to fund everyone. He asked the Committee to assist the NLC in developing a different funding model for sports and recreation.

Ms Peppy Kekana, Board member, NLC, read through the presentation. She said that the NLC distributed R1.5 billion across the sectors it was involved with. Amongst its fulltime employees were the Arts and Culture and Charities distribution agencies and it was awaiting approval for from the Department of Trade and Industry on the sports distribution agency. The current part-time sports distribution agency members were quite active and brought with them a wealth of experience in the sports fraternity.

Although the Minister of Trade and Industry appointed Distribution Agency members, those very members after appointment reported directly to the NLC Board.  Because the Board was not daily in the officer, it had delegated the power to the NLC commissioner and with the quarterly reports from the Commissioner the board was satisfied with the work of the distribution agencies.

Mr Philemon Letwaba, Chief Operating Officer (COO), NLC, said that the NLC existed with a vision to be a catalyst for social upliftment because of the work the NLC did.  Beyond regulating lotteries, the NLC maximized funds for the different sectors that it serviced.

The NLC had insured that it improved its systems by incorporating the Integrated Enterprise Wide Architecture into its systems. The NLC was also facing a challenge of illegal lotteries which were competing and encroaching into the space of the National Lottery.

Sports and Recreation Priorities

Mr Mveleli Ncula, Chairperson, Sports Distribution Agency (SDA), said there had been a surge in emerging talent across sports federation for example; the number of athletes had increased at Athletics South Africa (ASA) with the likes of Ms Caster Semenya, Mr Akani Simbine and others. That then put pressure on the SDA because not only was that at ASA but at four or more other big federations which were flying the SA flag high.

The SDA had decided to categorise federations according to their participation levels. Category A, were sports federations that participated in the Commonwealth and Olympic Games.  When out on an advertising window for funding for national sports federation, the NLC expected a transformation and development programme that was costed from federations.

Mr Ncula said sports funding beneficiaries had complained about the matter of a cooling off period where if a beneficiary had been funding for one year the same beneficiary could not apply for funding for the following year. The NLC had raised the issue as well with the Department of Trade and Industry (DTI) that cooling-off was done away with and rather for the NLC to consider multi-year funding.

The SDA had ensured that it had no backlogged applications such that the 150 day turn around period for funding to be disbursed was not needed to date. In six provinces the SDA met its 5% target distribution where it wanted to assure the Committee that it will have met the target for the Free State (FS), North West (NW) and the Western Cape (WC) by the end of the financial year (FY).

On the repeated question as to why the NLC funded South African Sports Confederation and Olympic Committee (SASCOC), SASCOC had an Operation Excellence (OpEX) programme which focused on elite, medalling athletes. It was for that programme which managed the Wayde’s Van Niekerk, Simbine and other elites that NLC funded SASCOC. Without that funding SA would be unable to field a team in international competitions as the NLC was the sole funder of that programme.

Monitoring and Evaluation

Ms Xolile Ntuli, Chief Financial Officer, NLC, said of the infrastructure projects that the NLC had funded in the current FY was the Mbulaheni Mulaudzi Sports Centre in Limpopo and the Eastern Cape (EC) Boxing Centre in the EC. The projects were monitored by a panel of engineers. She also spoke to revenue collection and sector allocation.

Discussion

Mr P Moteka (EFF) recalled that the Committee had committed to ensuring that the NLC would fund rural provinces and areas, therefore he wanted to know whether the applications from rural areas had improved to date.  

Rural clubs wanting to participate in domestic leagues continued to struggle to honour their fixtures; what remedy the NLC was proposing for that? If there were legislative blockages he asked that the Committee be informed so that it could assist the NLC.

In terms of illegal lotteries where were they mostly prevalent geographically, and had the NLC ever registered convictions related to that? Could the miscellaneous 2% funding be clarified?

Mr T Mhlongo (DA) asked when the cooling-off period issue would be done away with? He then referred to media reports that 5900 applications had backlogged the NLC system and were waiting processing.

He wanted disaggregation in figures about the 28% sector allocation for sports reported in the presentation. There had been a further allegation that there were Distributing Agencies or middle men whom would request R10 million for example,  they would then take 50% of that funding and the sport federation would receive the remaining 50%; what was the NLC doing about that.

Mr Mhlongo asked what type of impact was the NLC’s funding having on its beneficiaries. What type of legislative assistance did the NLC need? He was dissatisfied that there were no audited financial statements that the NLC had presented. What was the cause of the reductions in the allocations compared to previous years? He also required a disaggregation and elaboration on how big urban versus rural allocations were by the SDA’s. Where was the NLC head office; there was no equity in the provincial allocations had been what he observed. He requested that a list of schools funded per province for facilities and apparel be submitted to the Committee. How many officials per province were doing monitoring and evaluation (M& E) and when did they do that work?

Ms B Abrahams (ANC) wanted to know why Gauteng had seen the biggest decrease in funding.

What happened to unclaimed prize money? Who owned the facilities that the NLC refurbished; where they leased after hand-over to the beneficiaries?

Prof Nevhutanda replied possibly the NLC would need the Committee to schedule a further briefing for the NLC to thoroughly go through its programmes and how it allocated funds. Financial statements certainly could be submitted in writing as they were readily available.

The NLC Act provided that the NLC had to fund but to make sure that each province at least gets 5% of R1.5 billion. It had been a challenge to allocate 5% per province because if province X did not apply for funding the law did not allow the NLC to take money and give a province which had not applied and the applications had to comply with the requirements outlined in the NLC Act and also depended on whether provinces qualified to be funded. The problem in communities was that even when the NLC did education awareness on how to apply, and sometimes specify that funding was for apparel or sports equipment, sports clubs or communities still applied for funding for a sports tour.

The 28% was out of a total R1.5 billion and the function of the NLC Board was to set the budget for each financial year.

The country still practised traditional lottery whilst South Africans gambled online whilst the country did not have regulation of online gambling. Until online gambling was regulated and the NLC was allowed to use technology as well, then allocations for the different sectors would continue dwindling.

Unclaimed prize money went into a participant trust account as the law provided that the NLC Board had to ensure that participants’ interests were catered for. If prize monies were uncollected for more than 365 days, it went back to the National Lottery Distribution Trust Fund (NLDTF).

Regarding how the NLC could fight the middle men, it had tried many solutions for example, at some point when the closing date for new applications in the NLC offices was close; he had happened to be in the office doing oversight. As he was finding out why people were there he had found a group of consultants selling cooked financial statements to applicants, inside the NLC building. That was how rife the corruption was in that NLC applications process. He had received a call sometime ago from someone in Venda who was in a school that had received funding to build a tennis court. The person informed him that the consultant who had assisted the school with the application had told the school that the work to build the tennis court had to be given to him only and no one else. 

The current NLC Act was a copy of the lotteries Act in the United Kingdom which had been amended ten years ago already; therefore the current law had to be contextualised to the needs of South Africans and the NLC needed the Committee’s assistance in getting the NLC Act amended.  

Gauteng received more funding possibly because there were more consultants in that province because NLC was unlike the South African Social Services Agency (SASSA) as it did not continuously pay beneficiaries as a mandate but rather; processed applications individually and funded according to application approvals.

Mr Ncula added that Gauteng housed most sports federation’s headquarters and because the NLC received most application from that province it could not deny compliant applications because too many people would have applied.

There had been an improvement in disbursement of funds in rural areas since the NLC had established provincial offices in all nine provinces. The headquarters of the NLC were in Pretoria.

As he had reported, the SDA had changed focus in terms of funding sports clubs to focus on funding for travel so that they could honour their fixtures and paying for apparel, and that had worked to date.

The DTI was considering the issue of the cooling-off period.

The NLC had through its grant funding office asked engineer to develop a template for all the combination court (Combo Court) and had costed that; so that when the next advertising window opened, then the NLC would identify and place the facilities in places where the communities, clubs together with schools could access them. Hopefully with that sharing of the facilities, everyone who used the facility would see to it that each facility was not vandalised.

R250 000 was indeed for the facility and R50 000 for apparel for schools sports but with the planned new funding template for combo courts, the amounts would change depending on the facility, including payment for apparel. The agents that formerly had been applying for schools would go hungry going forward, because of the changed funding for facilities.

Indeed the NLC had prioritised quintile 1, 2 and 3 rural school because private schools had facilities already but private schools did apply to be funded for renovations and replacement of worn infrastructure however; the SDA was of the view that it could not be renovating facilities of private schools when rural public schools had nothing to start off with.

Regarding funding leased facilities the SDA always enquired as to who the facility belonged to; moreover before funding was approved the SDA required clubs to provide their constitutions where the SDA looked for the dissolution clause. The SDA did not fund clubs without dissolution clauses.

Mr Letwaba said the financial allocations per province as reported by the CFO had been audited numbers for the 2017/18 FY as well as the 2016/17 FY. The rural skewness in funding by the NLC was in response to the outcry that the NLC had not been prioritising rural sports clubs historically. That had also been a matter of rural sports clubs not being registered as Non-Governmental Organisations (NGOs) and the education awareness drive of the NLC had encouraged that, so that the clubs could be eligible for funding. The fruits had been that clubs had started receiving funding from the NLC.

He added that illegal lotteries generally spoke to Lotto Star which was licensed in Mpumalanga and played in the National Lottery’s space because of loopholes in the NLC Act and was something the NLC had litigated against. The advantage of Lotto Star was that its product was available online which the gambling legislation of South Africa currently did not allow, because although registered in Mpumalanga, Lotto Start was accessible across the country.  Some of the illegal lotteries were traditional to SA like Mtshayina, and the NLC were looking at opportunities in getting them regulated instead of closing them down.

The challenge of the cooling-off period had been a matter of interpretation rather that ambiguity in the NLC Act because all that was provided for clearly was that a beneficiary could not apply twice within a space of 12 months. The NLC was engaging DTI to clarify that matter only; because repeat applications or funding posed a planning risk for the NLC as well as potential beneficiaries.

To date the NLC did not have a backlogged system of applications because having permanently established DA’s that processed applications daily, the backlog of two years ago had been dealt with. Currently the law strictly prescribed how long an application had to take to reach finality including disbursement of funds after approval.

NLC impact assessments had been conducted in the NW, Northern Cape (NC), Gauteng and Limpopo because in the previous FY the NLC had funded for impact, focusing of various elements. The assessment reports were available and would be submitted when the NLC returned to present its Annual Report (AR) for the 2017/18 FY.

There were two M& E officials per province and the NLC was mindful that they were not overseeing all projects that the NLC would have funded and the NLC was also mindful of balancing its operational expenditure against its funding obligations to beneficiaries.

The infrastructure that the NLC built was handed over to the organisations that the NLC funded.

The Chairperson thanked the NLC for indulging the Committee and engaging. She then allowed the delegation from Netball South Africa (NetballSA) to brief the Committee.

Briefing by NetballSA

Ms Cecilia Molokwane, President, NetballSA, said she had been a player and a coach of netball at national level and had been in the sport from as young as 10 years old. She also enumerated the current leadership of NetballSA made up of females including Ms Christine Du Preez, Anneline Lewies, Annie Kloppers and Mpumi Javu. She then presented to the Committee verbatim.

She said NetballSA had eight full time staff members.

Amateur Vs Professional

It saddened Ms Molokwane that netball was unable to employ player’s fulltime although it was the number 1 female mass support sport code after soccer in the country. Through sheer hard work NetballSA had managed to put together a demographically representative Spar Proteas netball team.

Income Comparison

Ms Blanche de la Guerre, CEO, NetballSA, said NetballSA’ sole self generated income was from an association membership fee of R30 per person which remained unchanged since she had been involved in NetballSA’s leadership.

Before accepting the invitation to participate in the Quad Series with Australia and England the Spar Proteas had been losing no those country teams by large tallies but that had since improved and the Proteas had even beaten England.

NetballSA’s income had decreased in 2018 as Sport and Recreation South Africa (SRSA) financial support of three years for the diamond challenge had ended but NetballSA had managed to do the competition for a shorter period though.   

Discussion

Mr Moteka said even though NetballSA had funding challenges, he had never seen a netball league in Makhuduthamaga sub-region, Limpopo and his belief was that where there were soccer tournaments netball had to be hosting a parallel tournament. He was challenging NetballSA to start developing rural, local leagues.

If funding from SRSA was compared between netball and volleyball and others sports the Committee would see that women empowerment was sorely lacking.

Mr D Bergman (DA) said a females only board and constitution was not in the spirit of transformation although he understood the history behind that and if that was because no boys wanted to play netball that was fine, but the NetballSA’s constitution had to be open the fact that males had and could want to participate in netball. Partnering with CricketSA (CSA) was interesting as cricket had a very expensive barrier to entry and the sports footprint was not as wide as soccer where partnering with soccer leagues across the country NetballSA would have better prospects of success. Moreover both soccer and cricket had a problem in that they were unisexual sports and had a risk of poaching netball players into their codes, which was something NetballSA had to be weary of.

Netball was the most transformed code and was the shining light on how sporting codes could and had to transform.

Mr Mhlongo asked whether NetballSA’s board of directors transformed; why was there no male member? What had been the challenges with the Netball League? Did the Spar Proteas still have 12 players in A level division? How many districts did NetballSA have? What relationship did NetballSA have with Public Schools; what development progress was there and what targets had NetballSA set itself in that regard?

Ms Abrahams asked NetballSA to also speak to its relationship with township schools as it was responding to its relationship with public schools.

Mr S Ralegoma (ANC) asked whether NetballSA believed the three year support from SRSA had borne fruit in terms of activating sponsors to get involved in netball.

Ms Molokwane replied that she would ensure that Makhuduthamaga would have a league; the Sekhukhune Netball association structure had recently just been resuscitated.

NetballSA accepted the challenge to approach the South African Soccer Federation (SAFA) as well as the Premier Soccer League (PSL) for partnerships and making netball accessible to a wider audience.

She said that NetballSA had a male’s championship which would be played in Durban but the participants were mostly gay men. They were coached and managed by men, and men remained a big part of netball nationally because they coached many netball teams. NetballSA’s experience from provincial structures was that once men were given an opportunity to be in leadership positions, they generally took over and as NetballSA were claiming netball to be a female sport. Therefore men would not be allowed in the management of the sport at national level.  

NetballSA had 50 districts, 6 associate members including schools, South African National Defence Force (SANDF), South African Police Services (SAPS), DeafSA, Action Netball and Royal Bafokeng. NetballSA was also considering a request from the Intellectually Impaired Netball Association as well.

Formerly NetballSA had had strained relations with Schools Sport Netball but since the new leadership the federation had approached schools netball and the relationship was on the mend. 

Regarding leagues, she believed if NetballSA started everything at ward, then cluster, local, district and then provincial then development leagues would produce the necessary talent and Ms Molokwane was quite passionate about emphasizing that pipelining. In Polokwane where she resided leagues had started as she was reporting and the uptake was promising.

The once-off support for the diamond league was a pilot and not long term. In deed the leagues was possible but then its results were limited with the support. Her personal belief was that it would make more sense for Government support to be withdrawn after Netball was producing franchises.  With that withdrawal NetballSA had had to decrease tams participating in the leagues whereas the plan was to increase participation by having more teams partaking.

When members knew of communities already playing netball or who had an interest in netball, they only had to inform the federation and it would reach out.

80% of the registered netball players were black, with 20% being white.

Ms de la Guerre said the Brutal Fruit Tournament name was for sale as AB inBev had bought South African Breweries (SAB) and although AB inBev would continue funding Netball that would dry up in the short term. The tournament was an elite player production stream for the Spar Proteas as it was high performance and gave opportunity to provincial players. The tournament had 10 teams of 15 players each with most of the Proteas not getting that much time in lieu of giving game time to provincial players. The international rule was there were supposed to be 12 players on the bench and 7 on the court. It was important therefore for NetballSA that it found a funder for the netball premier league.

The Chairperson thanked NetballSA for honouring the Committee’s invite. She also thanked the Committee members for attending the briefing and the meeting was then adjourned.