SASCOC: progress report

Sports, Arts and Culture

04 September 2018
Chairperson: Ms B Dlulane (ANC)
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Meeting Summary

The South African Sports Confederation and Olympic Committee (SASCOC) briefed the Portfolio Committee on Sport and Recreation on their financial statements as well as amendments as requested by the Committee. The South African National Boxing Organisation (SANABO) was also supposed to do a briefing to the Committee but SANABO sent their apologies and cancelled at the last minute.  Members of the Committee unanimously noted their disappointed at SANABO cancelling and they agreed to not accept SANABO’s apology.

SASCOC said that overall their revenue has not moved significantly from the previous year. Funding from the National Lotteries Commission (NLC) makes up the majority of the funding that SASCOC receives. The NLC now considers SASCOC a federation and as such the funding from the NLC has dropped from R100 million to just R10 million. SASCOC has put in strict austerity measures to cope with the big loss in revenue but they maintain that they are in dire need of more funding. SASCOC appealed to the Committee to lobby the NLC and government to contribute more to SASCOC. In order to try to generate more revenue SASCOC has appointed a sponsorship expert on a non-exclusive contingency fee based contract. SASCOC is also in the process of selling its shares in Phumelela Gaming and will do so once council approves the decision. The auditing contract with Deloitte has also been terminated through a mutual agreement.

SASCOC is implementing a turnaround strategy in order to stabilise their finances and improve their public image. The recent dismissal of senior managers and the CFO is under investigation and SASCOC is awaiting the conclusion of the investigation in order to recover some of the funds lost through corruption. SASCOC has also paid a significant amount of money on legal counselling to deal with both internal and external legal matters.  The expenditure of SASCOC has also come under pressure. 56% of SASCOC’S expenditure is related to high performance, 18% of their expenditure is for team delivery, 9% is for administration, and salaries and board fees make up 7%. Board member allowances have been cut and, depending on cash flow, were sometimes deferred.  

Members noted their disappointment that only two members of SASCOC had shown up to the meeting. A host of questions were posed to SASCOC which dealt with SASCOC’s finances, legal fees, allegations of corruption of a member of the board, the audit process and how SASCOC plans on dealing with the loss in revenue from the NLC.

 

Meeting report

Opening Remarks

The Chairperson welcomed the delegates from the South African Sports Confederation and Olympics Committee (SASCOC). She said Committee Members are very disappointed as they have just received an apology from the South African National Boxing Organisation (SANABO) who was supposed to be a part of this meeting. SANABO initially said their key leaders will not be around, but now she received an email which arrived at 06:58am which reads, “We would like to humbly apologise to the honourable Members of the Committee that we would not honour the meeting. Our representative missed the flight and the next flight to Cape Town for today is in 14 hours. We therefore request a postponement for this meeting. This is a situation which is beyond our control.”

She said she did not accept this apology. This email was sent very early in the morning and if someone can be in the office or operate at 7am there was no reason for that person to have missed their flight. The Committee planned according to the programme of Parliament and people who the Committee desperately needs information from do not account to the Committee. The Committee is trying to round up as elections are close. She said if she has the support of the Committee she will respond to the email saying the apology is not accepted. In addition, there are apologies from Mr K Sithole (IFP), Mr M Filtane (UDM) and Ms B Dlomo (ANC). Mr A Botes (ANC) has left the Committee and is to be replaced by Ms C Ndlovu (ANC).

Mr Gideon Sam, President, SASCOC, said he is joined by Mr Ravi Govender, a member of the finance committee of SASCOC. In the absence of the CFO, they have asked Mr Govender to look after the finances of SASCOC until such time that they can appoint a new CFO. Mr Govender comes into the office twice a week to work with the chairperson of the finance committee, Mr Kobus Marais.

The Chairperson asked the Members of the Committee to adopt the agenda and consider the apology from SANABO.

Mr D Bergman (DA) said he shares the Chairperson’s sentiment. They have had a proud history of good attendance and where attendance has faulted the Committee has come down on those groups who have not attended Committee meetings have brought scant representation. This is a prioritised meeting for SANABO given their finances and for them to not attend this meeting at the last minute is very sad. He believes there must be something else to it that needs to be interrogated.

Mr S Ralegoma (ANC) said they support the Chairperson’s proposal that they should not accept the apology from SANABO.

Mr T Mhlongo (DA) seconded the proposal to amend the agenda and to write a letter to SANABO.

The Chairperson said the Committee needs to be taken very seriously by entities because some of them are experiencing very challenging problems. SANABO should have come to account to the Committee.

Mr Sam said the Committee may want to be consider that weeks ago in a meeting at Welkom, the entire structure of SANABO met after the abrupt resignation its president and secretary. He would like to share, when it is available, the report of the meeting, because it will give Members an opportunity to look into what transpired in Welkom. SASCOC is also concerned about the situation at SANABO, because it do not have a full executive currently.

The Chairperson thanked Mr Sam. The Committee was not aware of situation of the executive at SANABO. She gave Mr Sam an opportunity to say a few words on the situation.

Mr Sam said the President and the Secretary of SANABO did attend the meeting in Welkom and both their resignations were withdrawn. The report will be given to the Committee soon. He said this briefing is a follow up from the meeting in March which Members felt was lacking.

Briefing by SASCOC

Mr Govender said the last 18 months have been challenging for SASCOC and overall SASCOC’s revenue has not moved significantly from the previous year. The revenue is made up mainly from funding from the National Lottery, donations and funding from government, the International Olympic Committee (IOC) as well as other private sponsors. The interest income or investment income is largely related to the shares SASCOC has in Phumelela through SASCOC’s investment vehicle, Gride Pty Ltd. Total revenues for the financial year under review is roughly R185 million which is very close to what SASCOC received the previous year.

Mr Govender said the movement on some of the big ticket items like board member allowances, employee benefits and depreciation has not moved much and is fairly consistent with prior years which show that SASCOC has been consistently applying their accounting policies. Other operating expenses has dropped from R 157 million to R146 million. This expenditure is split between payments made to SASCOC’s federations, Olympics, Paralympics, other games, marketing, Commonwealth games, bidding and hosting, etc. Sometimes SASCOC has to accrue the cash as an asset because it receives sponsorships in advance. These are just the figures of SASCOC’s financial year end. He believes that Deloitte has given SASCOC reasonable assurance that the financial statements can be relied on; they have made comments with regards to the growing concerns and challenges SASCOC has had over the last 12 to 18 months with respect to the vacancies which have occurred.  

On the 2017/2018 audit, Mr Govender reported that the services of Deloitte have been terminated by mutual consent. SASCOC has commenced the audit process to appoint new auditors and are looking to appoint a mid-tier firm with proper BBEEE credentials. He said as the caretaker financial officer he has started preparing for this audit internally to reduce costs and also ensure that they achieve a clean audit. SASCOC has made a commitment and their audited financial statements will be presented at the AGM which is to be held on the 8th December 2018.

On its turnaround strategy, he said SASCOC needs to learn from the mistakes of the past and move forward. The turnaround strategy has happened in earnest.

Mr Sam said that it slipped his mind to notify the Committee that the Secretary of Gride, Mr Peter Goldhawk, passed away on Sunday morning. He was one of the staunchest supporters of the Paralympics movement in South Africa. Mr Goldhawk is to be buried on Friday and SASCOC has already expressed their condolences to his wife.

The Chairperson offered her condolences on behalf of the Committee to SASCOC and Mr Goldhawk’s family. 

Mr Govender said that in terms of learning from what has happened to SASCOC over the recent past and in terms of taking corrective action, he has been appointed as the caretaker of the finance function until they find a more permanent solution going ahead. His term of reference is to drive the austerity measures which have been out into place by the finance committee chair, Mr Kobus Marais. SASCOC wants to streamline financial reporting so that it can be more meaningful and better board decisions can be taken. They want to enhance business process to achieve higher levels of governance and internal controls. There has also been a start to reviewing some of SASCOC’s commitments so that they can negotiate better value for money and economies of scale on existing termed contracts. Streamlining expenditure is a big ticket item and the last term of reference is to prepare for the current audit.

Mr Govender said they can have all these austerity measures in place but as an NPO they are reliant on government funding and sponsorships. SASCOC has appointed an expert sponsorship agent with huge marketing experience on a non-exclusive and contingency fee basis.

As part of the initiative of SASCOC’s board President, he has a turnaround strategy management committee. They are still working on the detailed terms of reference but their brief is that they must:

-Monitor and regulate their attempts to implement the turnaround strategy.

-Enforce good governance and rebuild the image of SASCOC

-Drive the sponsorship and fundraising initiatives

-Guide SASCOC’s investment activities so as to achieve the best returns

-Regulate the alignment of all policies to the amended constitution adopted on 8th June 2018.

This constitution is now aligned with the King principles on corporate governance. The next step is to align SASCOC’s policies to this constitution.

-Oversee the restructuring process intended to improve efficiencies and effectiveness

-Monitor the improvement of standard operating procedures intended to improve internal controls

-Enforce the development and promotion of High Performance

-Ensure focus on delivery of Team SA

On the budget, he said the slide was drawn up in 2017 and it is meant to represent SASCOC’s game budget leading up to 2020 and will be amended as they go along in order to align to changes. Some sponsorships have fallen away. The National Lottery Commission (NLC) allocated money purely for 2020. SASCOC receives money from the IOC development fund and marketing on an annual basis. The money from Gride investments is largely from the dividends they received.

Mr Govender said he wanted to highlight that 43% of SASCOC’s revenue reliance is on the National Lottery. SASCOC used to get in the region of R100 million and now they are down to R10 million a year, made in two payments; with a cool off period. This has really crippled SASCOC. He understands that SASCOC has to become self-sufficient and self-reliant but the drastic move from R100 million to R 1 million without a phasing in period has dealt them a huge blow. Olympic sponsors make up about 23% of SASCOC’s revenue, the Department of Sports and Recreation makes up12%, and the 9% comes from broadcasting.  

He said 56% of SASCOC’s expenditure is related to high performance, as it should be because that is their main business; 18% of SASCOC’s expenditure is related to team delivery. Administration makes up 9% of SASCOC’s expenditure which is in the norms for an organisation like SASCOC. Salaries and board fees make up 7%.

At Gold Coast 2018 the South African team achieved 13 gold medals, 11 silver medals and 13 bronze medals. The total payout SASCOC has made to these athletes is R1.4 million. At the Commonwealth Youth Games in the Bahamas South Africa won 18 medals. He praised the success Caster Semenya had at the Gold Coast Commonwealth Games in setting a new 1 500m record. He also praised Tatjana Schoenmaker for setting a new record time for Africa in the 200m breaststroke. At the African Youth Games South Africa achieved 29 medals; 15 gold;11 silver medals; and 3 bronze.

Mr Govender said that this is an appeal to the Committee. SASCOC needs the Committee’s support in making SASCOC the organisation that it should be so that they can deliver team SA. They are in desperate need of increased government funding. The board president has made it very clear that if SASCOC does not have the money they will not go to any games. This will be a big embarrassment for South Africa. He appealed to the Committee to lobby the NLC to reconsider their reduction of the funding SASCOC gets from them. SASCOC is not a federation, their members are federations but SASCOC is the conduit that receives the recognise athletes from the various federations, SASCOC then packages them into team SA, provide them with support and then SASCOC delivers them to the global stage.  

Discussion

Mr L Ntshayisa (AIC) asked what SASCOC is doing to manage the drop in revenue received from the NLC.

Mr P Moteka (EFF) said Caster Semenya has done wonders for the country. She is undergoing very serious harassment by the international body. What are we doing to protect Caster Semenya?

Mr Mabika asked what the reasons are for the termination of SASCOC’s contract with Deloitte.

The Chairperson asked for clarification around the auditor situation and the financial implications thereof.

Mr Mabika wanted to know if SASCOC knew that the NLC would reduce its funding and what was done in preparation for this.

Mr Mhlongo said it gives a SASCOC a bad image to only have two delegates attending this meeting. According to the newspapers there is a split in the board and he said perhaps that is what he is seeing here.  Can SASCOC confirm the figures on slide 4 for the expenditure on Commonwealth Games and bidding and hosting? What was SASCOC’s guarantee on the allocation on the hosting on the Commonwealth games and the bidding for 2023? What was the total allocation for 2016/2017 from the NLC to SASCOC was as well as for 2017/2018?  According to the newspapers the Deputy President of SASCOC, Ms Hajera Kajee, resigned. Can SASCOC confirm this? If so, why did she resign? Can SASCOC confirm if they have an investment arm worth R100 million and they wanted to redirect it? How much was redirected? How much is the allocation for education bursaries per annum from 2016/2017 to date? How much has SASCOC spent on legal fees from 2016/2017 to 2017/2018? How much was spent generally on disciplinary hearings and the disciplinary of Mr Tubby Reddy, Mr V Maharaj and another staff member in particular? How much money has SASCOC received from the NLC for their legal fees?

Mr Mhlongo said the presentation changes from numbers to percentages and this is somewhat confusing. What is the total figure of the 1% of KZN on slide 12? He asked for clarification on the figure for salaries ad board fees on slide 13? What is the purpose of the 1% revenue from special funding?

Mr S Mmusi (ANC) said a while back the Committee had the Athletics Federation here and they mentioned how their relationship with SASCOC had gone sour. When they came again they mentioned that their differences had been resolved. He wanted clarification on SASCOC’s investment in Phumelela. Who benefits from these shares and could this not be counted as revenue for SASCOC? When did the NLC decide to reduce the funding to SASCOC?

Ms B Abrahams (ANC) asked what percentage levy SASCOC pays over to SARS. How is this percentage utilised? Who are the beneficiaries of the skills development? How much was received back in the financial year? How many coaches were recognised for prior learning? Are there opportunities for other members in communities to be recognised for prior learning? What is PCD training for provinces? The appointment of the sponsorship expert on a contingency fee basis may seem like a good idea now but it could become costly if the money brought in becomes very high. What is the percentage of the contingency fee? How much has SASCOC spent on legal fees and how much did SASCOC spend in preparation for the Olympics? As a second sponsor to SASCOC, Telkom committed approximately R8 million to the Olympic body of which half went to the medal incentive while the other half was supposed to be used for the team going to Rio. Was the money used for the intended purpose? How many SASCO members travelled to Rio and at what cost?

Mr Mhlongo asked what the operational lease over James and Ethel grey Park is for.

Mr Ralegoma said SASCOC needs to prioritise getting the report from the commission to the Committee. There were so many things happening at SASCOC of which the Committee needs to get closure. He is unsure of whether the problems SASCOC had faced have been resolved. Is the revenue from the IOC in cash or in kind? The NLC would not allow SASCOC to suffer. The challenges facing SASCOC which have been reported in the media has made the NLC reluctant to fund SASCOC. SASCOC cannot rely too much on auditors and need to become self-sufficient. He asked for clarification on the significant fee paid to Norton Rose Fulbright.

Ms Abrahams commended Mr Govender on the presentation and the manner in which the information is presented.

Mr Mhlongo said the information given by SASCOC and the information given by the NLC do not align.

The Chairperson asked if the NLC bailed out SASCOC when going to Rio. She would have liked more SASCOC board members to be present at this meeting. She raised concern over the internal struggle in the board and the legal fee implications it has caused. What is the status of transformation of athletes?

Reponses

Mr Sam said that it is tough to manage with the loss in revenue. The main focus of SASCOC is to drive all austerity measures and that is why there are only two representatives at this meeting. If the notice is less than a month, the cost of a flight from Johannesburg to Cape Town would be too high.

He said under the leadership of the Department and the DG, Dr Alec Moemi, there are two committees operating: the legal committee focusing on the legal issues of Caster and the medical committee that is looking into the chances of this fight going through a medical process. Caster has also gone to the Court of Arbitration for Sport in Lausanne to fight the case on her own.

Mr Sam said the contract with Deloitte was terminated through a mutual agreement. The reason why SASCOC’s audits were not signed off in time for the March meeting was because Deloitte said SASCOC had a disciplinary against three of their senior members, Deloitte waited to see the outcome of the disciplinary to see how to go about the audit. Mr Sam said he had gone to the police to get a case number and he gave Deloitte the case number to finalise the audit. The report he got from the finance committee and from Deloitte questioned whether SASCOC really needs one of the big four auditing firms and SASCOC is now going through the tender process to appoint an auditing firm in a tier below.

He said it comes as a shock to him to be told that his Deputy has resigned. He does not have a letter that shows the resignation. At the end of the year in which a board member turns 70, that board member is removed from the board. There are two board members who will step down at their 8 December 2018 meeting. One of them is the Deputy President, Ms Kajee and he himself will be stepping down at the end of next year. People will point to Dr Sam Ramsamy and say he is 80 and should have stepped down. This is not the case as Dr Ramsay is an IOC member who escaped that rule and as an IOC member on the board he continues on the board until the IOC says he has to step down.

Mr Sam said SASCOC used to have bursaries which came from dividends paid from Phumelela into Gride. SASCOC used to tell its federations to put through the names of their top athletes who are studying so that SASCOC could assist them. With the demise of SASCOC’s finances, the bursaries have been halted finances are in a better position. The finance committee has put in strict austerity policies to cope with the loss in revenue. The figures may show board member allowances but there are months when they do not get anything. When times are tough there are no board fees. When there is money the board will get a cut.

Mr Sam said they have almost resolved the issues with Athletics South Africa (ASA) but they are not yet fully resolved. One of the issues around ASA was that when council told SASCOC that they are more than 14 board members, the council instructed SASCOC to make sure there are only 14 because that is what the constitution says. In the end the blame was put on him as the president, The other issue with ASA is that SASCOC gave ASA a loan when the court wanted to attach their building. It was not clear whether SASCOC’s board said whether it was a donation or a loan. Unfortunately it happened in a council meeting where one member asked about the R8 million from ASA and it appeared as if it was the board that instigated that council member to ask that question.  SASCOC is however in the process of mending their relationship with ASA.

In SASCOC, skills development is only in coaching, working through CATHSSETA.

Mr Sam said SARS is currently asking for some documents SASCOC is struggling to get. Once SASCOC gets a tax clearance certificate from SARS, SASCOC will be able to take that to CATHSETTA who owes SASCOC about R 834 000. Provinces need to approach the coaching department at SASCOC to ask for the necessary training. This process is not always followed by the smaller federations but communities do need the coaching. The agreement reached with the sponsorship expert is that his take will be 16.5% and there is no retainer in it. The real challenge is however managing sponsorships that are brought into SASCOC.

Mr Sam said the long term loan relates to the building in which SASCOC is based. The building belongs to NedBank. SASCOC owes the City of Johannesburg R 1.7 million for their electricity bill

He agrees that views between SASCOC and the NLC are not in alignment. Perhaps the two parties need to sit down together and have a look at that. The responsibility of transformation lies with the federations. He admitted that at the Commonwealth Games and the Gold Coast the team did not look much transformed.  SASCOC does try to engage with the relevant bodies at all levels but ultimately it is out of the hands of SASCOC.

On the issue of the NLC and the R 10million, he said a few months before the Rio Olympics SASCOC received R70 million. This seemed like a huge amount of money to people. What they did not take into consideration is that the preparation of a team happens over a four year period. Over this four year period SASCOC did not get money from the NLC and SASCOC had to “steal from Paul to pay Peter”. It is a bit dangerous for SASCOC to receive money two months before an event. The main concern now for SASCOC is if they will have money on time in preparation for Tokyo since the season for qualifying has already started.

Mr Sam said SASCOC has now been classified by the NLC as a federation. The NLC took a decision that federations from now on will receive a maximum amount of R5 million. After the R5 million there is a cooling off period of a year and this route does not suffice in preparing a team for major competitions.

He reiterated once again that SASCOC is not a federation because they do not own athletes. The athletes are owned by federations. SASCOC is a confederation and they oversee 72 federations. SASCOC’s powers are every limited and at times they are at the mercy of international federations. SASCOC’s power is to present Team South Africa at major games. SAA no longer gives SASCOC free tickets and this stopped in 2017. SASCOC is in a process of relooking the Gride investment. The last time he was here he gave a background to how SASCOC acquired the shares in Phumelela. It was back in the day of the National Sports Council (NSC) and they were looking for a BEE partner, and the BEE partner had to be sport, and the NSC was the only sporting body that could represent all sport and they got the shares. The fears over the shares were caused by the company collapsing and those shares becoming worthless. Council took a decision that the board has to reconsider  whether they want to stay in the shares or whether they want to sell. The council decided that those shares need to be sold to invest the money elsewhere. As it stands now a black women consortium is chasing those shares. They are looking at where they will get the finances to buy those shares. Before the year ends there is a cooling off period where you cannot touch your shares and they are in that period now. At the opening of the next period that business will be concluded. But they cannot do anything until they go back to council.

Mr Sam said that the council has given the thumbs down on the way SASCOC has spent money on legal fees. There were legal fees to deal with the three senior managers. There are also legal fees for when federations take SASCOC to court. For instance, a father claimed that his daughter should have been in the team that went to Rio for fencing, and according to the criteria that were found by the Fencing Federation she did not qualify. The father took SASCOC to court and they had to defend the case. In another case that involved ASA, they did not go in to defend when they were taken to court by an athlete who said that something fell off in the stadium and it hurt his head. The court dealt with ASA and it had to pay a huge amount. In order to avoid that, SASCOC always goes to council to seek advice. In the father and the daughter acse, the court ruled that they have to pay SASCOC R600 000 and SASCOC is struggling to get the money. The legal fees paid to Norton Rose Fulbright are unfortunate but it was necessary since they could not get legal advice elsewhere. Board members travelled to Rio in two groups. The first group was there for the first five days and came back home, the other group then went to Rio. The money SASCOC received from KZN is KZN paying for all the people in their communities that wanted to be recognised for prior learning.  

SASCOC has engaged the Department on the Commission report and is awaiting a response from the Department. The report will contain recommendations on how SASCOC should go about their business and SASCOC is ready to follow the recommendations of that report.

Revenue from the IOC comes in the form of Olympic solidarity and they can apply for amounts that they need.  For instance, they can apply to the IOC for money to help with coaching. They can also apply to Olympic solidarity if SASCOC’s members are involved in training, money for travelling, or accommodation. The other amount is SASCOC’s share from the Games.

He agrees that SASCOC does not look good in the public domain. This is one of the reasons they are looking at the turnaround strategy.

Mr Govender said that they are a Pty Ltd company and in terms of the Companies Act they have a statutory requirement to appoint a public auditor. He is currently engaging with the board to try to get their company audited by the Auditor-General as they are dealing with money from Ggvernment. Through this SASCOC may even save some audit fees.

On deferred revenue, he said sometimes SASCOC receives money in periodic sets either for specific events or multiple events. So the money comes into SASCOC’s bank account but the money has not yet been earned because the event has not yet happened or the roll out of that event is still happening. They cannot recognise that as revenue, but they recognise it as deferred revenue.

Mr Govender said they do have a set of financials which were prepared for the bid for the Commonwealth Games. Everything else in the report relating to the Commonwealth Games is for Gold Coast and about R114 million was used on the Commonwealth bid for 2022.

Mr Mabika said he wants clarity as to why SASCOC is now considered a federation. Why and in what way does SASCOC want the Committee to help it?

Mr Mhlongo raised his disappointment at the manner in which Mr Govender responded to the questions. There were a number of questions asked by Mr Mhlongo which Mr Govender did not answer. How much allowance does a board member get? The response by Mr Sam was ambiguous. Does SASCOC have a policy regulating allowances? What does this policy entail? What is the value of the shares in Phumelela? The change in the way the information is presented from figures to percentages is ambiguous and a sign that SASCOC does not want to be an open company. How much money has SASCOC spent on legal fees? How much money was spent on other legal cases? Has Ms Kajee attended meetings from March until today? ASA told him the R8 million is their money, how does SASCOC account for this?  Why has a board member of SASCOC allegedly used her husband to assist in the movement of finances?  What criteria does SASCOC use to issue bursaries? Can we get a more detailed understanding of the decline of SASCOC’s finances?  Mr Mhlongo raised concern over SASCOC’s policies towards financing federations.

The Chairperson told Mr Mhlongo to be mindful of the time.

Mr Mmusi asked for the year in which the NLC cut their financial contribution to SASCOC. Is there any other financial assistance given to SASCOC by the NLC?

The Chairperson once again said that the rest of SASCOC’s board should have come to the meeting.

Mr Moteka said that future members of the Committee should note responses to questions and not only questions because some of the follow up questions have been answered already.  It seems that SASCOC relies only on the NLC for funding. He raised concern over this as betting is going down and the NLC can only allocated what it receives. Where are the other sponsors? It is not acceptable that the board is not present at the meeting.

Mr Sam said that the Committee must remember that Mr Govender is a member of the finance committee at SASCOC and he is not a board member. He appealed to the Committee that if they want the Rand value, which will never be seen on presentations in detail, to give those questions well in advance before the meeting.

On the question of bursaries, he said when SASCOC decided that the Gride investment must not go to administration but it should help their athletes, it was a noble intention. He said if he knew there would be a question on policies he would have brought along a book which every federation is given on how they should deal with their finances.

Mr Sam said that the model of sports in South Africa is just not correct. The Lottery was the idea of those who were involved in the sports movement and they agreed with government that it should fall under the Department of Trade and Industry (DTI). It cannot be right that DTI decides unilaterally how much money gets distributed to SASCOC. SASCOC wants the Committee to go back to Parliament and appeal for help. SASCOC is responsible for tourism in a big way and they do not receive a cent from tourism levies.  Sponsors are reluctant to come aboard because here is no incentive. A while back there were tax incentives. This is all gone now. SASCOC is in need of much more funding to take the sports movement forward. SASCOC is up against other international teams where SASCOC cannot compete financially. At the end of the year SASCOC is supposed to take a team to Botswana but they may not go because they do not have the necessary funds. He said he might have erred by not bringing the rest of the board but the austerity measures are a necessity. Next time when SASCOC gets an invitation to a meeting with the Committee they will make a plan even if they have to come to Cape Town by train.

The Chairperson said she does not know if the last point by Mr Sam was a serious one or not. She asked Members of the Committee not to respond on it. She said the point Members of the Committee was making was that it is unusual for most of the board members not to be present when called upon.

Mr Govender said that the allowances for board members are listed in the financial statements. The allowances are paid on a monthly basis. What Mr Sam was alluding to was that depending on SASCOC’s cash flow,the allowances will either be paid or deferred.

Mr Govender said he came on board on 1 August 2018 and he only spent 100 hours at SASCOC. He is looking at things that are happening now and looking to the future instead of going through history. He agreed with Mr Mhlongo that SASCOC’s policies and alignment thereof is in serious need of work. He cannot respond on why they are in the state they are. On the 8th of June 2018 the board recognised for the first time the King code on governance and introduced that into the constitution. These slides as presented here was the slides that presented at the AGM on the 8th of June 2018 and he wanted to be consistent. What he was trying to illustrate here was the numbers on slides are over a four year period. The actual Rand value of these figures may vary from year to year. The details for each of the years are disclosed in the financial statements. He hopes that the members of the Committee will accept that explanation.

Mr Goveder said the fee paid to Norton Rose Fulbright was R6.2 million. He is unsure of the allegation of a board member using her husband to move finances. SASCOC is coming out of a very difficult situation and they are waiting for the investigation to conclude so that they can recover some of the lost money.  SASCOC is working hard to undo the corruptions which have taken place. He cannot speak for the past, but he will take accountability for what happens from now on.

Mr Mhlongo said he wants the actual number of the money lost through corruption.

Mr Govender said the number is R6.2 million.

The Chairperson said that an answer does not need to be presented on allegations because it is not proven yet.

Mr Mhlongo said he understands that Mr Govender is new in his role. He has shown Mr Sam the article of the allegations.

Mr Sam said sometimes the context of the allegations is not correct. The member coaching manager and the board agreed that there is no conflict of interest.

The Chairperson thanked SASCOC for the presentation.

Discussion on the proposed oversight visit George and Swellendam

They Committee has received approval for the oversight and because there is plenary on 11 and 12 September 2018, the Committee can only leave after the plenary. They will leave Thursday morning 13 September 2018 to George.

The Committee agreed on the logistics.

The meeting was adjourned.

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