Western Cape Treasury & Gambling and Racing Board audit outcomes: hearing

Public Accounts (SCOPA) (WCPP)

01 November 2019
Chairperson: Mr L Mvimbi (ANC)
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Meeting Summary

Prior to the hearing, the Auditor General South Africa briefed the Committee on the 2018/19 audit outcomes of the Western Cape Gambling Racing Board and Western Cape Provincial Treasury in a closed session.

The Standing Committee on Public Accounts said that there had to be cost cutting in the WCGRB. It pointed out that Board receives a higher remuneration than other boards in the province. It questioned why Board Members received board fees for conference attendance and requested reports on the Botswana and Hong Kong conferences attended during 2018/19 to obtain information on best practices for gambling. They asked if the Board has implemented any of the recommendations or best practices from the conferences. WCGRB was asked about the community trusts run by three casinos within the province and if they were economically viable. Several questions were asked about social upliftment. WCGRB was told that the risks and challenges the Board faced must be outlined in the Annual Report.

The Western Cape Provincial Treasury was asked about the municipality audit findings and the impact that Treasury staff turnover had on providing adequate support to municipalities in the preparation of their annual financial statements. There was deterioration in the audit findings due to six municipalities submitting late. This was the first time that this had occurred and it was a cause for concern. It was emphasised that late submission caused a finding of non-compliance even by one day. The impact of the introduction of the Municipal Standard Chart of Accounts was discussed and the Committee resolved to request that National and Provincial Treasuries discuss this.

Also at issue was BBBEE compliance. None of the Western Cape organs of state had complied. The Provincial Treasury noted that the cost for provincial departments and municipalities to comply annually with BBBEE certification cost between  R240 000 and R400 000 for one certification. An organ of state must show compliance to five strategies of BBBEE that go beyond the financial aspect and speak to other items such as corporate responsibility. Due to the cost and given the current fiscal constraints, complying may compromise service delivery. It noted that National Treasury did not agree to the these requirements stipulated by the Department of Trade and Industry. A study is currently underway on the non-compliance. The Chairperson said that it would be helpful to have this study published so that there is one unified interpretation on compliance with BBBEE requirements.
 

Meeting report

The Chairperson indicated that prior to the meeting, the Committee was briefed by the Auditor General on the audit outcomes of the Provincial Treasury and the Western Cape Gambling and Racing Board. [The Auditor General closed sessions are a practice of the Western Cape provincial legislature] He stated that the Committee will deal with Part C and E of the Annual Report.

Western Cape Gambling and Racing Board (WCGRB) hearing
Ms D Baartman (DA) asked if WCGRB members who missed meetings tendered valid apologies. The conference fees are divided into five categories, she asked to what the fifth fee referred. She asked about the outcome and impact of the conferences attended by WCGRB. Two gifts were given to the Board and she asked what was sent, when and by whom.

Mr David Lakay, Chairperson: WCGRB, replied that where members are not able to attend, apologies are always advanced. The report indicates Board committee meetings and not Board meetings.

Ms Zoe Siwa, CFO: WCGRB, replied that the fees refer to the Board fees that have been calculated for the days spent at the conferences.

Mr Robin Bennett, Head of Department: Regulatory Compliance, WCGRB, explained that several benefits were attained for the Board from the attendance of conferences. Some of which were mutual concern and interest. Subjects relating to problem gambling, online gambling campaigning and the impact of not having a licence for this, were discussed. WCGRB wants to introduce a player card which identifies players who access the licence. This will makes it easier to identify problem gamblers. WCGRB learned that the regulator for gambling and the lottery is combined and one of the benefits is that there are similar standards. The Board had a meeting with the National Lotteries Commission and have drafted a memorandum of understanding with them, to see the extent to which there could be synergy between the two. The Board also wants to introduce uniform standards across Limited Payout Machines (LPMs), bookmakers and the casinos as opposed to having different standards. The benefits will not be seen immediately, but the reports that emerge from conferences create timelines for moving forward. The Board has also gained contacts to liaise with. The Board is also looking at licensing virtual gaming within the Western Cape.

Mr Lakay added that it is an exchange of best practices amongst jurisdictions. When the Board attended the conference in Copenhagen, the Western Cape was able to share their best practices with its international counterparts. The Board was able to get information for research from China on the junkets. Attending conferences is easier than desktop research.

Mr Primo Abrahams, CEO: WCGRB, replied that the two gifts were a packet of biscuits and a box of alcohol. The Board is awaiting the alcohol company to pick up the gift of alcohol.

Ms Baartman asked if it is policy to pay the day rate for the Board members, on top of the other fees, such as travel costs, and accommodation.

Mr Lakay replied that is correct. Each day you are away from home; you get paid. The Board adopted a policy in 2017, which noted that members travelling to international conferences will not be remunerated for Saturdays and Sundays. Board members get paid for weekdays, but allowances for food on the weekend are still covered.

Ms Baartman asked that the Committee receive reports on what the Board learned at the conferences.

Mr Lakay replied that part of the approval for attending an international conference – which is requested from the Minister – is that within a month or two a full report is submitted to Provincial Treasury on the content of the conference.

Ms M Maseko (DA) said that one of the mandates of the Board is to conduct ongoing research into gambling and racing throughout the country. She asked if there is research being done on gambling on pigeon racing and will the research bring a change in the legislation about such gambling. She asked what the Board is doing to reduce this gambling within the province. Since the Board learned best practices at the various conferences attended, which of these practices has it implemented.

Ms Yvonne Skepu, Manager: Legal Services, WCGRB, replied that the Board does not regulate the racing side of a sporting event. For example, a horse racing event is regulated by that association. There has been a proposal of whether or not to change this. This is an international phenomenon and is not confined to South Africa. The Board is looking into pigeon racing betting and will see how to effect legislation to regulate this practice.

At the Gaming Regulators Africa Forum (GRAF) conference that took place in Botswana, the Western Cape assisted with the drafting of the founding document for GRAF; before that it was simply an MOU that guided African states on gambling regulation. At the International Association of Gaming Advisors (IAGA) Conference in Hong Kong, the Board obtained information on how the junkets operate and the intricacies in utilising them. The Board is looking to have international junkets accommodated in the casinos of the Western Cape. Only one province has rolled this out. Hong Kong is the best place to understand junkets.

Mr Lakay replied that there was a request from the Western Cape Minister to enhance discussions with the Hong Kong Board representatives. Since the conference, Western Cape Treasury has committed to rolling out junkets within the province. At the conference in Botswana, he was requested to deliver a presentation on social responsible gambling and the risks of problem gambling. Due to its success in the province, the Board was able to advise their colleagues in Denmark on the best practices it utilises. He added that attending the conferences does not mean that the information learned can be implemented immediately in the short-term. Sports betting technology is developing, and the Board has the information on this, and will incorporate into its best practices and the results of this will be evident in the future.

The Chairperson noted that the attendance and international fees paid to Board members are quite high. He asked why that is the case.

Mr Lakay replied that each jurisdiction sends representatives and operators as part of their delegation. Due to cost containment, only two conferences will be attended annually of the 10 available. The Board attends conferences that will add value to its regulatory mandate. Only two Board members and office members are sent. The WCGRB has the smallest number of delegates that attend conferences in comparison to other provinces. Cost-cutting measures have been implemented by the entity, one of which is that members who attend conferences must fly economy, and cheaper accommodation closer to the venue must be sought out.

Ms Maseko asked if policy allows for the Board Chairperson to be paid a higher rate than other members.

Mr Lakay replied that the remuneration of each member is governed, and the remuneration rates of the Chairperson differ from the board members.

Ms Maseko said that there has to be cost cutting within the Board.

Ms N Nkondlo (ANC) asked which of the board committees had charters. Which board committee deals with BBBEE and Corporate Social Investment (CSI) initiatives? She requested copies of the charters.

She asked if the long-standing issue of its initiatives has been resolved by WCGRB as this was noted by the previous Standing Committee on Public Accounts (SCOPA).

She referred to the Board framework and asked if there is a difference of opinion on remuneration between the Board and National Treasury.

On risk management, she noted that no risks were identified by the Board in the Annual Report. Does this mean the Board did not encounter any challenges in the past financial year?

Mr D Davids, Committee Procedural Officer, pointed out that on the SCOPA resolution from the previous year, WCGRB had submitted a report on its initiatives.

Ms Maseko asked if the Committee had in fact dealt with this and from whom it is awaiting information.

Mr Davids explained that this has been forwarded by the Department of the Premier to SCOPA. A meeting date needs to be arranged for the Board to brief the Committee but the document has been submitted

Mr Lakay replied that the board committee charters are available and can be provided to the Committee. The Casino committee does have regular visits for on-site inspections. The  LPM committee also carries out this function, whilst the horse racing committees deal with internal matters. Other committees which deal with administrative matters do not deal with CSI or BBBEE initiatives. The Board is looking at incorporating the Bookmakers Association into the CSI programme. The Board is constantly looking to incorporate socially responsible things for gambling.

Ms Maseko said that there are too many board committees. Is it not possible to decrease the number of committees as this surely increases costs for the Board?

Mr Lakay replied that currently the Board only has five members, and if they had their full complement of Board members, the responsibilities of the committees would be fewer for each member. Each committee deals with different aspects of gambling. If sub-committees were to be brought down in number, then the process of dealing with issues would be longer.

Ms Maseko asked if the other committees that deal with non-important issues, could not deal with various agendas at once. The current system is costly to the Board, and a new system that reduces costs must be implemented.

Mr Lakay replied that the board committees only meet quarterly and meeting packs are sent a week before to members. Irrespective of the number of hours it takes to read the pack, travel to committee meetings and attend the meetings, members are paid a standard eight-hour fee. For a committee meeting, a member is not paid for attending meetings longer than the stipulated eight-hour period except a member outside of Cape Town, Mr Fako. Only for Board meetings are members remunerated irrespective of the number of hours of the meeting. Each committee has different sectors to deal with, and the compact time does not allow for back-to-back meetings to occur. The Board members are underpaid

Ms Maseko said that this Board receives a higher remuneration than other boards in the province.

Ms Nkondlo asked if CSI and BBEEE are under the Casino and LPM board committees.

Mr Lakay replied that all licences are subject to BBBEE. Horse racing is subject to the BBBEE scorecard, . The bookmakers are exempted. Casino executives have to be on level 4 of the BBBEE scorecard, and LPM on level 2. Other casinos are on level 1 and have achieved their targets; similarly, the LPMs have done the same. Once they have achieved that level the Board sets new targets for improvement of their levels.

The CSI Board is not involved in its own CSI activities and there is no funding for CSI activities. If WCGRB were to engage in CSI activities, it would have to change its funding structure. This is something that the Board is looking at.

Ms Siwa replied that the identified risks are included in the WCGRB Annual Performance Plan and not in the Annual Report.

Mr Lakay added that the WCGRB is constantly faced with risks and the Finance and IT board committee consistently discuss the risk register. There is a risk officer who addresses the Board with ESCO, which is the body responsible for risk. Each risk is reported to the risk and finance committee as well as the audit committee. The Board has mitigations in place to deal with the risks.

Ms Nkondlo said that in other institutions, the identified risks are always included in the Annual Report. It is important that the Board includes the identified risks within its Annual Report as standard procedure.

Ms Maseko mentioned that it is only this entity which has not included the identified risks.

The Chairperson said that the Committee expects the Board to be open with the Committee. It should indicate if there are identified risks within the entity.

Mr Lakay emphasised that the biggest risk is the composition of the Board. There is a full risk register which is found in the board committees assigned to dealing with identified risks. Any additional information can be provided to the Committee.

Ms Siwa replied that the Board compiles its Annual Report based on the template provided by National Treasury. The risk register documentation is additional information that the Board is not required to include.

Mr M Xego (EFF) said that the template used by the Board is confusing. There is a standard template for annual reports. The register must be provided to the Committee so it can see the risks the Board faces.

Ms Maseko mentioned that she does not understand how providing the risk register is additional information that the Board was not required to give.

Mr Lakay clarified this statement and said that providing this information is not going beyond the call of duty, and is part of the duties of the Board.

The Chairperson said that in the future the representatives must be unambiguous in the risks the Board faces.

Mr Lakay replied that there may be a misunderstanding of the template and the information required. The Board will address this misunderstanding and provide the information to the Committee.

Mr D America (DA) said that the template that has been used is the standard template; the information provided is just not adequate.

He asked why Ms Gantana is not being remunerated for attending international conferences. The Annual Report states that there was a case of R24 275 irregular expenditure at the Botswana conference. This was meant to cover Ms Gatana’s attendance but she did not attend. He asked why this amount was spent.

Mr Lakay replied that because Ms Gantana is an official of the Western Cape government, she was not remunerated for attending conferences with the Board. She resigned on 1 June. The irregular expenditure of R24 000 did not relate to the attendance of a Board member at an international conference. It related to an official of the Western Cape Treasury not attending the meeting.

The Chairperson asked the Committee to address Part C of the Annual Report.

Ms Baartman said that SCOPA had noted a discrepancy in the financial notes of departments and entities. She asked if WCGRB uses the same accrual system. There was an increase in the discount received from R7000 to R1 million from the entity. She asked what the insurance model of the entity is, and what it covers. The horse racing amount in provincial taxes increased, and she asked if something had been done to increase the taxes.

Ms Siwa replied that that two LPM operators had overpaid the WCGRB, and there was a settlement of R1 million less that was owed. Insurance covers the settling of all amounts of the Board.

Mr Bennett replied that  one of the insured areas is sports betting. When there is a sports event where the bookies favourite does not win, there will be an increase in the taxes, as the bookmakers have to pay a higher amount. For instance, in the 2018 Soccer World Cup, there were several upsets, which meant that the bookmakers had to pay higher amounts. Currently the Board is looking at approving contingencies of virtual games.

Ms Baartman asked if the contingencies for virtual games are placed under the horse racing committee, and those particular taxes.

Mr Bennett replied that  that sports betting has been placed under the horse racing committee. Virtual gaming has not yet been approved.

Mr Lakay replied that the category is Horse Racing and Betting and not just horse racing.

Mr Maseko said that in the Fifth Parliament there was an issue of the community trusts. She asked if the Board still has community trusts and where in the report is this listed and how many community trusts does it have, besides Mossel Bay. It has been reported that there has been infighting within the community trusts.

Mr Lakay replied that community trusts fall within the CSI projects of the various casinos. There are three trusts, Mossel Bay, Mykonos and Caledon within each casino but there are different beneficiaries. For example Garden route in Mossel Bay has a community trust as part of a beneficiary of the entity and not CSI beneficiaries. Each trust is involved in projects of their particular regions and will consider applications from different applicants and allocate funds to various beneficiaries. Once funding is approved, the Board will visit the beneficiaries. Infighting is common within the communities, as there are several small organisations within the communities that apply for funding. The Board has embarked on a recommendation to the community trusts to focus on sustainable development for beneficiaries, for instance, job creation. Funds are allocated to various organisations as well. The limited funds cannot cover all the applications received. The Board has also looked at a rotation of the funds, which can be allocated to different organisations. This model is found across all three trusts.

The Chairperson asked if the trusts are entities of the WCGRB or of the casinos.

Mr Lakay replied that they are not part of the WCGRB; they are aligned to the casinos. They have their own separate trustees.

The Chairperson asked if it was required that each casino have a community trust or was the trust voluntarily offered by the prospective bidders during the bidding on the casino licence.

Ms Skepu replied that the bidders had to identify projects for empowerment and community upliftment. The respective bidders would have submitted applications that said some shares of the casino would be given to the community. The bids of the three approved casinos included community trusts. The empowerment vehicles were imposed on the successful bidders and the entity would outline what the representativity would be and what the percentage of the shareholding would be. None of the WCGRB members stand in these entities and oversight is conducted by the Board on each entity.

The Chairperson said that the trusts are run in an unsustainable manner because they rely on donor funding and do not have creative means to sustain the trust. At the end of the lifespan of the licence, often the trust dissolves. He advised WCGRB to look at a sustainable mechanism to sustain the economic viability of the community trusts.

Mr Lakay replied the trusts are economically sustainable. If one observes the operating licence attached to the casino, for as long as the casino exists, the trust will exist. As part of the licensing conditions, trusts must be a part of the casino. Should the casino sell the licence, it cannot sell the conditions of the licence. This is to ensure that the trusts remain.

Ms Maseko noted that the medical aid contributions decreased and asked why this was the case. She asked why the costs for telecommunications services have increased. She asked how it measures its external audit fees as the fees have increased once more in 2018/19.

Ms Siwa replied that that the Board has moved from its premises, and the increase in spending on telecommunications is a result of this. In the previous financial year, the Board implemented the post-retirement medical aid, and as a result had to have an actual evaluation. The increase is attributed to the implemented post-retirement medical aid.

Ms Maseko asked what staff welfare is.

Ms Siwa replied that staff welfare is the money spent on carers who provide assistance to the staff.

Ms Nkondlo requested that as part of the resolutions, the Board provides their standard licensing conditions that are prescribed to the applicants. Since the biggest expenditure of WCGRB is on employee salaries, she asked to what extent is this sustainable. She asked if there is a specific reason that in 2018/19 there was an increase in expenditure on the awareness campaign. She also asked what the licence project is.

Ms Siwa replied that employee related cost is indeed the biggest cost for WCGRB. The Board is working on the fees charged to the industry so as to sufficiently maintain the Board financially. The awareness campaign conducted on the radio is not an annual cost but a specific campaign run in December 2018 to January 2019 which was to inform the public of the WCGRB, what it does and to spread the responsible gambling message. The cost referred to is the cost paid to the radio firm to conduct the campaign.

Mr Alwin Matthews, WCGRB Head of Department: ICT, replied that the licence project is a project that the Board embarked on in the 2018 financial year. Currently the Board uses too much paper. The Board wants to become paperless by automating its application process. This is a three year project and is currently being processed. The Board is currently in phase 2 of the project.

Mr America asked if the amount spent on medical aid applies only for this financial year. Would a re-evaluation include the liabilities?

Ms Siwa replied that, in terms of the liabilities, this is the amount payable at the end of the financial year and will be stated in the financial statement.

Mr America asked if the Board has repaid the amount to the operators. He noted that the UIF remained the same and asked if there were increases.

Ms Siwa replied that that there were salary increases based on DPSA rates. On the fee correction in the prior year error, this fee had expired in 2014 but the operators continued to pay the fees for three years. In 2018, the Board realised that it needed to repay the fees but two years had prescribed. The Board only had to pay R6.5 million and this is noted.

Mr Lakay replied that most of the employees will be at a level where UIF is at the maximum contribution, so any salary increase will not attract additional UIF.

The Chairperson asked if it is only the three casinos that have trusts.

Mr Lakay replied that this is the case. But each casino has CSI projects that assist communities other than the beneficiaries of the particular community trusts.

The Chairperson asked that this be explained in the next meeting.

Western Cape Provincial Treasury (WCPT) hearing
Ms Baartman asked if valid apologies were tendered for persons who did not attend meetings for the Enterprise Risk Management Committee (ERMCO). She asked if there is an indication (once the report has been published) about when the pilot transfer will occur.

Ms Julinda Gantana, Head of Department: Western Cape Provincial Treasury and Accounting Officer, replied that the department did receive apologies for members who could not attend the meetings. On the key risks, she said because the risks are pilot transfers, there is uncertainty on the cost. The department has been negotiating with National Treasury and there is still uncertainty. This is especially within the context of the macro-economic/fiscal conditions that the department is working under. There is still work on finalising how much this pilot transfer will cost.

The Chairperson stated that in an earlier meeting it said that the Integrated Financial Management System (IFMS) has not been implemented ever since 2005. What were the problems in its implementation?

Ms Gantana replied that there have been challenges in the rollout of the project from National Treasury.

Ms Nkondlo said that WCPT's inability of supporting municipalities due to its staff turnover is a serious challenge and is clearly a key emerging risk. She asked the extent of the impact of this problem.

Mr Aziz Hardien, Chief Director: Financial Governance and Accounting, WCPT, replied that the department saw deterioration in the audit outcomes of municipalities last year. There were 21 clean audit outcomes but there were late submission of financial statements by six municipalities, which was a first for the department. Auditors looked at supply chain prescripts of the municipalities. The deterioration comes from a different interpretation by the auditors and by the client municipalities.

Ms Nadia Ebrahim Acting Chief Director: Asset Management, WCPT, replied there are various conflicts on the regulatory framework and compliance with it in supply chain management. One of which was the exorbitant fees charged to comply with certain prescripts. The way in which the prescripts are written places an onus on municipalities to comply. There has to be consensus with National Treasury and the AG.

The Chairperson asked what the exorbitant fee for complying with BBBEE is.

Ms Ebrahim replied that in one instance the City of Cape paid R400 000 for one BBBEE certificate. This has to be done for every case. Certification per tender must be done in local cases.

Mr Hardien replied that there are two issues. The first is the local content requirement for certain designated sectors, the market is sometimes not ready for the local content requirement. This means that if municipalities go on tender without complying with local content, they will be found to have not complied. Treasury’s requirement is 100%. Second, the cost of complying to the local content requirement is high. For a procurement officials to make a decision on a tender, they must ensure that the products of the company are manufactured in South Africa and only the South African Bureau of Standards can certify it. This is a long process, and increases the cost.

The Chairperson asked why municipalities and departments would not comply with the submission of financial reports.

Mr Hardien replied that in 2014, National Treasury embarked on a reform, called Municipal Standard Chart of Accounts (mSCOA) to bring every single municipality into a single standard chart of accounts. Municipalities then had to invest heavily in systems and rely on them to produce financial statements. This reform is still a work in progress and it may take 5 to 10 years to implement. The AG sent a letter last year to indicate that it is aware of the challenges in the transition to mSCOA, thus it asked that municipalities submit the financial statements and it will not see it as non-compliance, even if there are errors. Some municipalities took the decision to make their financial statements as correct as possible, and submitted late.

The Chairperson asked if submitting after four hours is considered late by the AG.

Mr Hardien replied that the moment you do not submit by due date, you will be found to have not complied.

The Chairperson asked the AGSA representative in the meeting to verify this.

Mr Sazi Ndwandwa, Business Executive: Auditor General South Africa, replied that the financial statements must be submitted on time. It is communicated to municipalities in advance that they must submit on time.

Ms Nkondlo asked if it could be a committee resolution for both National and Provincial Treasury to discuss the challenges faced by municipality. It will assist in mitigation on this matter, as it seems as if the inter-governmental approach is not being followed in this instance.

Ms Baartman asked if a municipality were to submit accurate financial statements late, would it still be deemed as non-compliant.

Mr Ndwandwa replied that the late submission of financial statements is a potential non-compliance in terms of the subject matters that the AG communicates to the management. More often than not, it will be non-compliance. He added that there is no reason for the reports not to be submitted on time. Previously the municipalities would often not submit for long periods of times but this has improved.

The Chairperson asked the Committee to address Part E of the Annual Report.

Mr America noted an amount of R120 000 withheld from Swellendam municipality and asked why this was withheld by WCPT. He asked if the municipalities spent all the transfers and, if not, were unspent funds rolled over to the next financial year.

Ms Annamarie Smit, CFO: WCPT, replied that the condition of the capacity grant is that municipalities need to contribute to it. Swellendam was not ready to contribute but since then they have contributed and the allocation has been made to the municipality. Many of the municipalities do not spend their grants, and there is a rollover of funds. There is a process to monitor the grants allocated. The Provincial Treasury will analyse the reasons funds were not spent and then will rollover the amount if a valid reason is tendered; otherwise municipalities are asked to pay back the grant.

Ms Baartman asked where the policy of exit gratuities for minsters comes from and how this is calculated.

Mr Hardien replied that there is a particular legislation which deals with MPLs and last year the Provincial Parliament had to evaluate how much would be due to an MPL at the time of the end of their service. As the ministers belong to a department, if they vacate their position, the department must make provision and set aside funds for a gratuity.

The Chairperson mentioned that BBBEE certificate compliance has been raised with all departments. There needs to be compliance with this. He asked Provincial Treasury for its views on the instances of non-compliance.

Mr Hadien replied that Annual Report and annual financial statements compliance lies with National Treasury. BBBEE compliance lies with the Department of Trade and Industry (DTI). It appears that there has not been communication between DTI and National Treasury on the guidelines for the Annual Report and annual financial statements that were made at the beginning of the year. National Treasury did not agree to the requirements stipulated by DTI. Non-compliance with BBBEE is related mainly to the costs involved. These costs have to be incurred per annum.

The Chairperson asked what the cost is for the department to comply.

Ms Ebrahim replied the cost relates to the compliance that an organ of state must show to the five strategies of BBBEE as mentioned in the legislation. This goes beyond the financial aspect and speaks to other issues, such as corporate responsibility. For the Provincial Department of Environmental Affairs it would cost between R240 000 and R400 000 for one certification. None of the organs of the Western Cape have complied due to the cost. Given the current fiscal constraints, complying may compromise service delivery.

Mr Ndwandwa replied that he cannot attest to the costs mentioned by Provincial Treasury.

Ms Smit replied that there are discussions with National Treasury and AGSA. It is a legal requirement and the AG audits each department to monitor compliance with the BBBEE Act.

Ms Maseko asked that there be a unified interpretation on this matter, as there have been several interpretations provided by each Provincial Department to the Committee.

Ms Gantana replied that the Provincial Treasury and the AG have agreed that this is an issue it will deal with. A study is currently underway, and once it is completed, it will be provided.

The Chairperson said that it would be helpful to have this study published so that there is one unified interpretation on compliance with BBBEE requirements. He noted that all departments do want to comply but have faced their own individual challenges in doing so.

Meeting is adjourned.

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