Resolution of outstanding issues: DAC Briefing

Meeting report

Chairperson’s Opening Remarks

The Chairperson said some items on the agenda dated back to the year 2013. It was disheartening to discuss the same issues repeatedly and not finding the solutions. This did does not reflect well on the Committee, the Department of Arts and Culture (DAC), and all the people they were serving. The Chairperson expressed her concern, as the Committee was not being kept in the loop with some of the challenges the Department was facing, and there were instances where it found out about the issues in the social media. The Chairperson said this was not acceptable, and asked the Department to give a report on all matters arising. If a matter was still not resolved, the DG must explain it to the Committee.

Resolution of outstanding issues: DAC Briefing

Mr Vusumuzi Mkhize, Director-General (DG): DAC, said the Department had made progress in resolving the issues raised in previous meetings. As presented last week, the matters involving the South African Roadies Association (SARA) had been finalised. All the parties implicated had signed an order of court, a settlement agreement, on 22 August 2018, which included the matters raised as remedial action from the Public Protector. The DAC would work with the Public Protector to have the issues resolved.

Regarding the National Arts Council (NAC), an investigation had been commissioned by the Minister, and the report would be submitted to the Committee. The report was clear on the actions that had to be taken by the NAC board, and the board had instituted the processes that needed to be dealt with.

The DAC had looked at the challenges identified and the remedial actions that were taken after receiving the complaints and allegations leveled by SARA on issues of impropriety by the NAC management regarding grant funding policies. Regarding the salary of the chief executive officer (CEO) and chief financial officer (CFO) for the 2016/2017 financial year, the findings had been that the salary was structured and only included car allowances and no performance bonuses. The increase of the CEO's salary by 18%, from R1.2 million to R1.6 million in 2014, had been found to be incorrect. The performance bonus of R137 902 given to the CEO was more than the 5% stipulated by the remuneration and reward policies of the NAC. The Minister had met with the NAC Council on 16 July 2018 to discuss the progress of the investigation, and to discover the steps that had been taken by the Council to implement the findings on the performance bonus paid to the CEO.

On the “Lalela” flagship project, the forensic investigation had recommended that a disciplinary hearing must be instituted against the CEO, based on the submission of the funding application directly to the Executive Committee and the Council without the application being subject to the normal funding process, in breach of paragraph 6.1 and 12.15 of the grant awarding manual.

Mr Mkhize referred to the state of affairs at the Performing Arts Centre of the Free State (PACOFS). The forensic report had been provided to the DAC and the interviews had been conducted, but the unit did not have a CEO. The status of the pending cases was:

• the case on the dismissal of the CEO was sitting with the Labour Court;
• the Finance Manager's case had been finalised in favour of PACOFS;
• the Development Manager had been reinstated and had resumed work on 18 June 2018;
• the Sound Technician’s disciplinary hearing had been finalised, and the DAC was waiting for a report;
• the driver's disciplinary hearing had been concluded; and
• the Logistics Officer disciplinary hearing was still in progress.

The progress on outstanding challenges at PACOFs were explained in detail in the presentation in the “Update on State Affairs at PACOFS” (see attached).

Mr Mkhize provided an update on the Ditsong Museums of South Africa (DMSA). The new organisational structure had been submitted for consideration by the DAC and the Minister. Two directors of the Natural and Culture Museums had resigned, and the positions could not be filled because of the moratorium on recruitment in place, in order for the new structure under way to be finalised. The DAC had advised the entity to consider its financial position carefully when implementing the new structure and to ensure that its implementation did not expose it to any labour disputes. The Council had approved the CEO’s prioritisation of filling critical posts.

A labour issue had arisen,, where the former Director of the Military Museum had alleged that the CEO had disclosed his medical condition to staff at the museum, and there were also complaints about racism at the Museum. The DAC had communicated the matter to the Ditsong Museums to resolve the matter, and DMSA had responded. The matter had gone before the High Court, but had been finalised through the facilitation of an independent Chairperson of the National Employers’ Association of South Africa (NEASA), and DMSA had since conducted a workshop on racism facilitated by the South African Human Rights Commission (SAHRC).

The Audit Committee had recommended a forensic audit on all the historic contracts that the DMSA had contracted, and had not been completed in accordance with the specifications. The entity had appointed Sizwe NtsalubaGobodo to investigate. A preliminary report had been submitted. The Council had resolved to separate with the CFO at the cost of five and half months of her contract, effective 31 August 2017.  The settlement had not closed the ongoing criminal cases opened against her.

Regarding the Tswaing meteorite crater staff’s 14-day shift system, the fence and patrol team were permanent employees enjoying pension and leave benefits accordingly. The team was working on a shift system of two weeks in and out. The court order referred to by employees had been reviewed to confirm DMSA compliance, and all the issues related to it had been closed. The future working system would be affected in the implementation of the new structure. The management and concerned staff had agreed to frame the employment contract around three shifts of eight hours each per day for the fence patrol team.

There had been allegations of mismanagement leveled by the Noka Ya Tswaing Foundation. A submission was en route to inform the Minister to sign a letter asking the Council to attend to the allegations. A letter had been sent to the Foundation to inform them that the Council would attend to their complaints.

Nelson Mandela Museum

Mr Matlala Makoto, Chief Financial Officer: DAC, provided an update regarding allegations at the Nelson Mandela Museum. The DAC had received a complaint from the Portfolio Committee about the termination of the fixed term contract of Mr Thembile Mkhohliwe, Supply Chain Manager at the Museum. The DAC had requested the management of the Museum to respond to the complaint. In their response, the Museum had explained how the entity dealt with all the contracts that were due to expire. It had said that there were currently five employees who were on five-year fixed term contracts, and the Supply Chain Manager was one of them. It had followed the prescripts of the Labour Relations Act, which states that employees must be reminded about the expiry of their contracts. In line with the Labour Relations Act, the CEO had had meetings with all the affected employees. The meetings had taken place prior to issuing letters.  The CEO had informed the employees that the posts would be advertised and had encouraged them to submit their applications.

On the victimisation of contract employees, both the Council and management had always ensured that all employees were treated equally. This was substantiated by one of the questions asked during the performance assessment reviews, where the CEO would ask the employees whether the process of assessment between the supervisor and subordinate was fair. Another question was whether the supervisor was biased or prejudiced in his or her assessment, and whether there were any personal differences. These were deliberate questions to ascertain if there had been any unfair treatment. The Supply Chain Manager had clearly indicated that he did not suspect any form of victimisation, unfairness or bias from the side of his supervisor. Furthermore, a consistent and fair process had been followed before the contract expired, and there had been no victimisation or dismissal of contract employees by the Museum. It was implementing the recommendations from the Committee of making the middle management who were on contract, permanent, by following the prescripts.

The Supply Chain Manager had further informed the Committee that during his tenure at the Museum, he had never been involved in fraudulent activities and his performance was commendable. However, he did not disclose to the Committee that due to his incompetence, a security service provider had been appointed in 2017 for a tender which had expired in 2015. Similarly, a cleaning tender had been extended on several occasions. The reasons for these were squarely inefficiencies in his office. Both the internal and external auditors had consistently highlighted the inefficiencies in this section. For example, one of the critical areas was contract management and compliance with legislation, rules and regulations. During the assessment of his performance, in all four quarters, his performance had been below standard, especially considering that he had been sent for training to the School of Government. The CFO had also met with him on many occasions, motivating and showing him support.

On the Human Resources Manager matter, the former HR Manager had never been dismissed from his employment. In 2017, while the Museum was verifying its employees’ qualifications, the former HR Manager had indicated that he was in possession of a matric certificate. However, when the State Security Agency (SSA) had verified his and all other employees’ qualifications, it had been discovered that he did not possess a matric certificate. At the same time, the HR Manager had been in possession of a theology degree. He had confirmed he did not have the certificate. In April 2018, he had been asked to explain his situation, but instead of giving an explanation, he had resigned. The CEO had accepted the resignation. When it had emerged that the HR Manager did not have a matric certificate, he had been put on paid leave. The SSA had recommended that he should not be fired until a final report had been produced by them. Indeed, a report had been received which was shared with the former HR Manager. The report had been received when he had already resigned. Amongst other things the report had highlighted that the former HR Manager could not be trusted.

There had been progress in the following areas:

Permanent positions

The management had taken a decision that all middle management positions should be made permanent. Council had approved the decision to place all middle management posts on permanent contracts and further approved that the posts should be advertised and that the incumbents should apply. The Museum policy make provision for internal candidates to be given priority.

Centenary activities

The expiry of contracts was not related to how the Museum implemented its centenary programmes of both Mama Nontsikelelo Albertina Sisulu and Tata Nelson Mandela. Internal teams had been established to ensure that there were diverse skills for each programme.

Staff morale

The Executive could confirm that staff morale was high. All employees had been given equal opportunities to raise any matters through an anonymous process, and through departmental or general staff meetings. Employees participated in all Museum programmes. Management was also utilising the promotion system to reward qualifying and experienced employees. This was done to ensure continuity and to retain institutional memory. Management had ensured that there was stability at the Museum.

Discussion

The Chairperson expressed her dissatisfaction on the outcome of the investigations made about the CEO.

Ms S Tsoleli (ANC) said there was evidence that the CEO had transgressed, and the fact that the CEO's contract was being renewed was totally unacceptable, especially after the DAC had learned about the findings on the investigation. The CEO should not be reappointed. The CEO was supposed to have been suspended with immediate effect. This was pure corruption, and it was amazing that the DAC was not acting against this corruption. She expected a report that confirmed that the CEO no longer worked for the Department, and commented that the report presented by the Director-General had not been clear.  

Mr T Makondo (ANC) said the Committee was not surprised about the report they had received from the DAC. The only difference was that the report had been presented by the new Director-General. Without sounding personal, he wanted to ask what the Director-General had been doing at work. At the previous meeting, there had been an enquiry on when the contract of the CEO would be coming to an end, and the DAC had not answered that question. He asked the DAC what kind of a Department they were -- that protected people who transgressed. Were they serious about fighting corruption? It seemed as if the DAC was assisting those who committed corruption to continue with the corruption. He asked the Director-General what the problem was, as there seemed to be a big problem that needed to be dealt with within the DAC. The Director-General was the leader of the DAC, and the message that he communicated must be very clear and there must be no ambiguity. There were people in the DAC that had been suspended without any substantial evidence. However, the CEO had been reappointed, regardless of the findings on the allegations. He expressed his disappointment at the actions taken by the DAC to resolve this matter.

The Chairperson said it took a “lifetime to build integrity, but a minute to destroy it”. He asked the Director-General to explain the meaning of the report.

Director-General said that he understood the issues that had been raised by the Committee. The findings on the investigations had been clear about what transgressions had been found. A due diligence process had to be followed on someone who was accused of wrongdoing. The DAC ensured that consequence management was followed, and that did not mean breaking the laws of the country when dealing with such issues. The report clearly stated the wrongdoings that had been found and leveled against the CEO. The CEO had been faced with disciplinary action by the NAC Board. The Director-General, together with Minister, had met with the Chairperson of the NAC and state that the DAC did not spend money on the investigations for an outcome to be unclear.

The Chairperson said the Committee wanted to understand why the DAC had extended the contract. The DAC had not acted properly on this matter. It had failed to do the right thing before the contract of the CEO was extended. She asked who should account for the failure of the DAC. The Committee had previously enquired whether the DAC was waiting for the contract of the CEO to end before they acted on the allegations against him. She asked the Director-General if this was the best possible way this issue could have been dealt with.

Ms S Tsoleli (ANC) asked if the appointment of the CEO was for a contract period, or a fixed term.

Ms Mogotsi (ANC) asked when the DAC had received the report on the findings of the allegations against the CEO. If the report had been received within seven days, the DAC should have acted on the findings of the report already. If the report had been received within 14 days, and it was not actioned within the 14 days, then the DAC had also transgressed. She said the CEO must leave the DAC before the community removed her from that position. 

Ms Tsoleli said the DAC was selective when acting on allegations were made against members, and few had been suspended without having substantial evidence against them. It was important to have consequence management, but the problem with the DAC was that it was selective when acting upon such matters. The DAC could not follow through thoroughly with the process of a disciplinary hearing if the person being implicated was the CEO. She proposed that a meeting must be scheduled with the Minister, so that the Minister could address the matter of the reappointment of the CEO with the Committee.

The Director-General said he had called the Chairperson, and the Chairperson had explained that the appointment had been based on the reasoning that a person was guilty when they were found guilty, and "corrective action" was taken only when the person implicated was found guilty. The Director-General said he had advised the Council against the decision to reappoint the CEO, but the Council had said the CEO had not been found guilty.

Mr Makondo said the Director-General had not responded to the question. He asked him to explain what happened to the position of the CEO when the term came to an end, and if the position was advertised. He understood that the Board acts on the fiduciary duties of the Minister. However, if the Board was acting on behalf of the Minister, it could be possible that the Minister had given them the go-ahead to make the decision. The law that dealt with employees was different from the law that dealt with criminals in a court of law. The fact was that there were findings on the allegations that should be enough evidence to prove the person implicated was guilty. It was the responsibility of the person to prove their innocence.

The Chairperson said the Director-General should explain the process that had been followed by the DAC when appointing the CEO, and to confirm if the CEO's contract was for five years.

Mr Mkhize confirmed that the contract was for five years.

Ms Kelebogile Sethibelo, DDG: Institutional Governance, DAC, said the report had been presented to the Council by the DAC forensic team and forensic manager on 9 June 2018, before the contract of the CEO had expired. The Council had been split around whether to appoint or not appoint the CEO. The Council had been cautioned by the National Film and Video Foundation (NFVF) that there were allegations against the CEO, and the matter had been escalated to the Minister. On Monday, 11 June 2018, the chairperson of the board and two members of the Council had appointed the CEO verbally. The Minister had met with Board and had cautioned about their decision, saying that the public was watching the NAC due to the issues they had been experiencing. She had advised that the Council had said the disciplinary hearing against the CEO would still be held, even after the appointment. Lastly, if the contract came to an end, then the DAC needed to advertise the position.

Ms V Mogotsi (ANC) said the Minister needed to explain what was happening with this process, as there had not been any action taken against the CEO.

Ms N Bilankulu (ANC) said the Committee needed to meet with the entire board. She suspected the Board was not aware of what had been happening, and it may have been that the chairperson of the board was the only one who had been aware.

Ms Tsoleli said she agreed that all the board members had to be invited and given individual letters to appear in front of the Committee. All the board members must account for the decision to appoint the CEO, as it had been wrong.

Mr Makondo said it was unfortunate that the DAC would leave without answering his question about the process followed in appointing the CEO. He also agreed with the Committee that the board must be invited to appear in front of the Committee urgently. It must also invite the Public Service Commission to give a presentation on the appointment of senior members in government, so that the Committee could know whether the board had acted unlawfully.

The Chairperson said the Committee must involve the Parliament Legal Unit to justify whether the process taken by the Council was within the legal framework. Her mind could not grasp what had happened -- she did not understand how the Council could appoint the CEO while the report clearly stipulated the findings on the allegations were true.

Ms Sethibelo said she thought the Council had used Section 1.34 of the NAC Act to extend the contract of the CEO.

The Chairperson asked whether it was correct for the Council to extend the contract of someone who had transgressed. It was a pity that the Committee had to engage on the administrative issues of the DAC, and this showed that the DAC failed to do its work efficiently.

Mr Makondo asked why the disciplinary hearing process took so long in the DAC. This issue with the CFO from NAC was not a new -- it was still there from last year.

Ms Tsoleli said the NAC Chairperson was a problem in the unit. The way in which he did things was unacceptable. There were inconsistencies within the NAC and the PACOFS entity, but the matters were not treated equally. Some of the matters were treated with "rough gloves," and some were treated with "soft gloves". However, there had been some improvement in terms of activities organised by PACOFS.  She had personally attended some of the activities and had noted the drastic change. The acting CEO and the CFO were doing a great job, and they had promised the Committee in their previous engagements that they would turn things around.

Ms Sethibelo said with regard to NFVF, some of the funds had been recovered from the members of the unit that had paid for their children to attend the South African and Television Awards (SAFTAs). The unit had recovered R70 000 that had been paid by the former CFO for her family to attend the SAFTAs. The NAC was still recovering the funds from the former CEO. The matter was with the NAC, and the members implicated would still attend a disciplinary hearing.

The Director-General said he hoped the new monitoring system that incorporated the forensic report would be a mechanism that would implement a steady process for the disciplinary hearings.

Mr G Grootboom (DA) asked when the report about the HR Manager who had lied about his qualifications would be presented.

The Director-General said the report on the allegations against the HR Manager was out, but the HR Manager had resigned when the matter had surfaced.

The Chairperson asked how much the Brandfort House project would cost.

Mr Mkhize responded that the project would cost R9.8 million.

The Chairperson asked the Director-General to give an estimate of the costs incurred to employ the auditors to do investigations.

Mr Mkhize said he would check his records, and revert to the Committee

The Chairperson said Department needed to look seriously into its operations. The Department saw the Committee as interfering when they enquired on the matters arising, but the Committee was addressing the issues that the Department was not resolving. The DAC was not doing its work properly, as there were complaints from external people about the issues in the Department.

The Director-General said the costs from the forensic investigations had been R971 619, and the legal costs had been R249 774.

The Chairperson said if the Department had done their work in the first place, they would not have had to waste R1 million on forensic investigations. This was a lesson for the DAC.

She asked the House to skip the presentation on Robben Island, and to present on the first and fourth quarter expenditure report. The Committee had to take notes, as the presentation would be discussed at the next meeting.

The meeting was adjourned.