Department & entities 2020/21 Annual Performance Plan: AGSA briefing; COVID-19 Relief Fund; with Deputy Minister

Sports, Arts and Culture

05 May 2020
Chairperson: Ms B Dlulane (ANC)
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Meeting Summary

Video: Portfolio Committee on Sports, Arts and Culture, 5 May 2020
Audio: Department & entities 2020/21 Annual Performance Plan: AGSA briefing; COVID-19 Relief Fund; with Deputy Minister 
Annual Performance Plan (APP) of Government Departments & Entities 20/2021

COVID-19: Regulations and Guidelines
Disaster Management Act 57 of 2002
Schedule of Services to be phased in as per COVID-19 Risk Adjusted Strategy
President Cyril Ramaphosa: South Africa's response to Coronavirus COVID-19 pandemic

The meeting was convened for the Committee to be briefed about Auditor-General of South Africa on the Annual Performance Plan Review 2020/21 of the Department of Sports, Arts and Culture and for the Department to also brief Members on the mitigating measures in place to assist artists and athletes as a result of the COVID-19 pandemic.

During the discussion with the AG’s office, Members enquired about the progress on finalising the standard operational procedures; the acting positions in the Department; measures the Department had for non-compliance; late payment of invoices and monitoring mechanisms; the Department’s record of implementing recommendations; the merging of the two departments and the impact of COVID-19 on the Department’s review plan.

During the discussion with the Department, Members enquired about the eligibility of the relief fund for freelancers; appointing mechanisms for the adjudication committee and its member’s conflict of interest; some beneficiaries’ double-dipping behaviour and the short time frame provided for applicants.

Committee Members also asked about the applicability of the Broad-Based Black Economic Empowerment Policy; measures of the Department to reach artists in rural areas and other disadvantaged backgrounds; the lack of support for local artists and the permitted activities for artists at level four of the lockdown. The Department must urgently intervene in providing necessary assistance.

Meeting report

Opening Remarks by the Chairperson

The Chairperson expressed her struggle with Microsoft Teams and that she had not experienced such problems on Zoom.

She commented on the tragedy of the lost lives in the country as a result of the COVID-19 pandemic, especially in the Western Cape, and encouraged everyone to wear a face mask. Those that do not have a mask should use a handkerchief or a scarf.

The meeting would begin with a presentation made by the Auditor-General’s Office on the Department’s Annual Performance Plan Review (APPR) for the 2020/21 financial year. Then the Department of Sports, Arts and Culture would brief the Committee on its mitigation strategies to address the negative impact caused by COVID-19 on athletes and artists.

The Chairperson asked Members to limit their questions within the three minutes allocated to each of them and requested the technical team to switch off microphones if any Member exceeded the time limit.

Briefing by the Auditor-General’s Office

Ms Nelisiwe Mhlongo, from the Auditor-General’s (AG’s) office, presented to the Committee the 2020/21 APPR for the Department of Sports, Arts and Culture. This review was not a detailed audit but the purpose was to identify the key areas of concern with the Department’s indicators and targets in their audits. The four aspects of accountability consisted of planning, doing, checking and acting.

She summarised some of the key findings for programmes two, three and four and indicated that there was a slight change in the indicators between the draft and the final draft of the presentation.

Ms Mokgadi Masekela, AG’s office, first outlined the objectives of the 2019/20 Status of Records Review to the Members.  

Ms Masekela indicated that the Department of Arts and Culture had not approved policies and procedures addressing all work streams where they provided financial support. There was no evidence that transfers were being monitored to ensure the funds were used for the intended purpose. Some indicators may have been immeasurable due to lack of standard operating procedures.

For the Department of Sports, the critical acting positions of the Director-General (DG) and Chief Financial Officer (CFO) were still not finalised. As a result, oversight over the Annual Financial Statement (AFS) and annual performance report (APP) preparations had not been determined. There was no evidence of submissions of quarterly performance reports for the second quarter. Late submissions by provinces were a recurrent issue. There was also the risk of noncompliance due to late invoice payments and expired contracts that continued to be used.

Discussion

Ms N Nkabane (ANC) enquired about the remaining findings in the presentation. Since the AG’s office was still waiting for final standard operational procedure to define targets, who would be responsible for these targets and what impact it would have as a result of the delay?

Mr C Sibisi (NFP) expressed his concern on the acting positions that were still not finalised. When will the appointments be finalised as the vacancies were costing the Department? What measures are in place for non-compliant applicants?

Ms V van Dyk (DA) emphasised the importance of standard operation procedures and asked when they would be made available. Also, the AG’s office had marked five out of seven indicators as concerns for the Department of Art and Culture which should show the urgency to have the procedures made available.

Mr W Faber (DA) sought clarity on the Department’s removal of some indicators which the AG’s office could not verify.

Mr T Mhlongo (DA) enquired about the late payment of invoices. He also asked if the Department had implemented all the recommendations put forward in previous years.

Mr M Seabi (ANC) welcomed presentation from AG. Since the two departments were about to be merged according to President, how will that affect the appointment of DG and CFO?

In light of the COVID-19 pandemic, he asked the AG’s office what their view would be if the Department withdrew the whole submission.

The Chairperson was concerned about vacancies that were not being replaced and asked if the Department could offer an explanation. For instance, does the lockdown affect making appointments?

Responses

Ms Mhlongo responded to the question around the remaining findings in the report. She said that depending on actual management, the Department would always come with more findings and recommendations. The Department usually worked with the AG’s office to either resolve the matter by either integrating or informing the office that the Department would not be able to integrate at this stage and would ask to defer it.

On when standard operation procedures could be made available, Ms Mhlongo responded that the Department was in the best position to respond to the question. The AG’s office could only confirm that the matter had not been resolved.

With the removed indicators, she explained that the review made reference to the APP and not to the standard operation procedure. Members should ask the Department for more clarity on this matter.

Ms Masekela explained that the issue of vacancies had been raised with the Department’s management in January and the AG’s office marked DG and CFO as critical positions. Since there was the indication that Department of Arts and Culture and the Department of Sports were going to merge, the Sports Department froze the advertising of those positions. However, the contracts for the current DG and the CFO expired in March and the AG’s office raised a concern as there would be no one overseeing the Department’s and AFS in their absence.

On noncompliance, she said that the Department did pay their invoices. The AG’s office normally checked if the Department paid on time. A few invoices in May were paid late and were picked up by the AG’s office. However, the Department showed great improvement – around 97% of the payments done in the third quarter were done on time.

She explained that the two departments agreed that certain targets would have to be prioritised now that the two department were about to become one and produce one APP. The view was that some indicators would be traced at APP level and the others would be traced in the operational plan.

Ms Mhlongo said that all recommendations made by the AG’s office from previous years had been implemented. Members could confirm this if they reviewed the presentation. For those that had not been implemented in the review presentation, it was probably because the AG’s office still had to communicate with the Department.

Ms Mhlongo asked for more clarity on Mr Seabi’s question.

Follow-up questions

Mr Mhlongo asked if any consequence management was in place to address non-payments of invoice. He also asked if there was any monitoring process for funds that were not being used; what mechanisms is the AG’s office proposing for the Committee to perform its oversight function in monitoring underused funds?

The Chairperson asked if the Department was still telling the AG’s office that non-payments were caused by late payments of provincial governmental departments.

Mr Seabi recognised that the Department was not aware of the pandemic when the APP was devised but now as the pandemic kicked in, it inevitably affected a few programmes for the Department. Has the Department indicated if it would withdraw and redo the review as a result of the pandemic?

Responses

Ms Mhlongo responded that there were three frameworks regulating how each department should respond should there be critical changes within it. This included the budget reallocation and reprioritisation caused by COVID-19. So there were sufficient provisions made for the Department to review its budget allocation.

Ms Masekela responded that the Department had not used the non-payment of provincial departments as a reason because the Department could always withhold payment transfers until these provincial departments have submitted documents and made payments. There had been two incidents in which the Department used non-payment as a reason, but that was for normal suppliers and was due to SETA processes.

She could not comment much on consequence management because that fell under management. She confirmed that the AG office did find the Department of Sports response to non-payment to be inadequate.

Briefing by the Department of Sports, Arts and Culture

The Chairperson welcomed the Department. She commended its initiatives to assist the artists and athletes affected by COVID-19. The Committee would support all interventions undertaken by the Department to get additional funds should the necessary relief funds be insufficient in supporting those who deserved them.

Ms Nocawe Mafu, Deputy Minister of Sports, Arts and Culture, thanked the opportunity to brief the Committee on the Department’s relief fund. She emphasised that COVID-19 was a global pandemic, extending beyond South Africa. One sector that was badly affected was the sports and art sectors. Following the President’s call that each Department should review its programmes and determine how they could assist, the Department reviewed all of its national events and determined the amount of R150 million to be given to athletes and creative artists.

Mr Vusi Mkhize, the Director-General of the Department, informed the Committee that the country was facing a technical recession even before COVID-19 struck. The COVID-19 only exacerbated the recession. A cabinet resolution was reached to adopt a war-time measure to deal with COVID-19.

The DG gave a preliminary view of the creative sector’s contribution to the national economy. Between 2016 and 2018, the cultural industry contributed 1.7% of the country’s GDP which was about R74.4 billion. The sector employed 92 163 direct jobs which accounted for 0.57% of the country’s employment. It employed indirectly 355 780 jobs. The jobs that supported this industry were about 688 000 and the sector contributed about 1.1 million jobs to the national employment. The Department’s research unit discovered that 46% freelancers would be affected and 95% reported cancellation or indefinite postponement of work.

Mr Mhlongo pointed out that the DG was speaking to a different presentation slides so he could not follow his latest response. He asked the DG to talk about the presentation that Members had been given.

The DG said he would have to continue his presentation and provide the copy in due course because the meeting had been moved forward.

The Chairperson asked the DG to continue with the presentation.

The DG then brief Members on the timeline and the corresponding activities that took place on the dates after the President’s announcement for the state of disaster. The state of disaster was projected to last for 90 days and so the Department had to plan accordingly.  He also explained the application opening and closing dates.

The DG explained to Members of the criteria to determine who qualified for the relief fund. He also explained to Members some of the errors that adjudication panel encountered when rejected an application.

The Chairperson asked the DG to summarise the rest of the presentation because time was running out and Members still needed to ask questions.

The DG responded that the rest of documents were about mitigation strategies which he would not elaborate on due to time limit.

Discussion

The Chairperson expressed that her wish was for the Department to intervene, given those huge number of rejections for providing assistance.

Mr B Mamabolo (ANC) asked the DG if his Department was aware of the freelance actors and actresses who received no subsidy and medical aid from their production companies. Were they eligible to apply for relief fund? Do those freelancers apply in their individual capacity or through their production companies? He also asked if the Department had engaged with stakeholders around the Premier Soccer League (PSL) games.

Mr Mhlongo enquired about the Department’s mechanism it used to appoint the expert panellists. He asked for the Deputy Minister or the DG to provide a list of applicants who benefitted from the relief fund. He asked how the Department came up with a formula that paid R20 million to artists and athletes.

He raised the issue of beneficiary double-dipping and used an example in KZN in which an additional R7 million was paid out to those double-dipping beneficiaries. What is the national government going to do to address that?

He requested a list of names for Members on the appeal committee. Lastly, he asked the DG why Members were given a different version of the presentation slides and why the correct slides had not been provided in advance.

Ms van Dyk asked the Department the reason for such a short timeframe for relief fund applications. She asked the Department to be mindful of the fact that the country was under level five lockdown during that time. Although the Minister did apply for extension but due to technical errors such as ‘system offline’ it wasted a full working day again.

Ms van Dyk commented on the low figure of recommended applications as it only stood at 232. She said that she had written to the Minister about the criteria for the relief fund for artists and athletes. Will that apply to those who are related to the Department or to all artists in South Africa, especially from disadvantaged community? Will the BBBEE criteria be applicable? How much of the funding would be made available to finance live streams of artists and since it is not an essential service, how does the Department plan to justify the streaming?

Mr Faber asked why the Department created an adjudication panel which might have conflict of interest. This panel seemed like an additional body because each federation knew exactly who were affected.

Ms Adams enquired about the short time for the application which began on 02 April and closed on 06 April. She asked the department to consider those from disadvantaged backgrounds, who may have challenges in receiving emails and printing. What does the Department plan to do with those who have been rejected?

Mr B Luthuli (IFP) expressed his support for the high court decision to uphold the government’s decision. He added that it was a long way to go and the recent court case showed that SA’s fight against apartheid was not fully won.

He asked the DG what measures were in place for rural areas and for those who required additional assistance in filling out relief fund forms since they had been disadvantaged for a long time. He believed that this was an area in which the Department needed to intervene.

Ms Nkabane (ANC) contended the Department’s work so that people who did sports, arts and culture for a living were taken care of. She applauded the interventions and initiatives, and said that these should be given credits for. What the criteria is used to appoint members of the adjudication panel? Since these members are from various institutions, what measures are in place to mitigate conflict of interests? As far as disadvantaged communities are concerned, what mechanisms are there to ensure that fund is accessible to them? Lastly, she enquired about the methodology the Department used to provide feedback to declined applicants.

Mr B Madlingozi (EFF) expressed his concern about the overall trend of local artists being marginalised. The nation was killing the culture and the media was not supporting South African artists. Subsequently, artists cannot survive as a result of the lack of support. Why is the Department dragging its feet in paying artists and why did those who got paid got paid so quickly? He urged the Department to pay artists where it was due.

Mr Seabi asked about the remuneration for the members on the adjudication committee. Are their services voluntary or are their salaries paid from the R150 million relief funds? How is the Department planning to intervene and help those applicants from disadvantaged backgrounds? He sought clarity on what artists could and could not do at level four of the lockdown.

Responses

The Deputy Minister thanked the Members for their constructive questions in helping the Department.

She commented on the high number of rejections. As those rejection letters were sent to those people, the Department also attached a form of appeal because the Department believed that some rejections were caused by minor mistakes. However, the condition was that appeal form must be completed and processed within five days. The appeal committee currently consisted of three members and the Department appointed them because of their cross qualifications in both the legal and creative spaces.

The Minister denied the allegations about R20 million payouts to artists and confirmed that there were no such payments made as it was practically impossible to do so, given the Department’s limited resource. She clarified that it was actually R20 000 per artist and athlete. The Department was not paying full salaries to those who were affected. The relief fund was a measure to protect those affected from falling into poverty – for them to buy basic essentials etc. The Department’s intention was to use this limited resource to reach out to as many people as possible.

The Deputy Minister responded to double dipping beneficiaries. The Minister had met with provincial MECs to explore the means for provincial governments to assist those that did not meet and had not been assisted by the national government. These two processes at the two different levels of government were consistent. The intention was that those that missed out at the national level would find out at the provincial level. Indeed, there was a possibility that some people would take chances to double dip and so the Department would share the list of names.

The Deputy Minister agreed with all Members that the timeframe for applications was short. She explained that the relief fund was planned around the 90-day national disaster context, which was why the period was so short. The Department had begun discussing a longer-term strategy since it was now certain that COVID-19 would be here for much longer. There would be meetings between the Minister and the Deputy Minister as well as Department stakeholders to listen to stakeholders’ views on how to proceed henceforth. The Department hoped that through these discussions it would be able to reach out to those that had previously been excluded from the fund.

The Deputy Minister informed Members that even though there was only a three-day period for applications, the Department had received 6 000 applications within three days. So far the three adjudicators had only processed 1 050 applications of which 323 were recommended and the rest were not.

The Deputy Minister was unaware of the extension which Ms Van Dyk referred to. However, there was a discussion on the possible extension after the Department engaged with stakeholders. The important thing was to cover as many affected as possible, especially those from disadvantaged backgrounds.

The DG said that the Deputy Minister had covered almost all the questions asked by Members. He would just highlight and elaborate a bit more on a few issues.

The DG recognised that the struggle of local actors was a challenge. The Department proposed address this issue with two levels of approaches: one was through local content on SABC and the other was to engage with stakeholders such as SABC and MultiChoice to come up with an assistance plan, particularly for freelancers. Although the Department had agreed to help, stakeholders such as MultiChoice had set aside R80 million for soapy episodes; there was also still the health protocol that actors needed to adhere to.

Concerning the PSL, he said that there had been engagement between SAFA President and the chairperson of PSL. Both stakeholders indicated that they would bring a complete proposal to the meeting which would take place on 08 May 2020.The Minister hoped that they would be speaking in one voice so that government could address football as a collective entity.

The DG also announced the expansion of the adjudication panel to 21 people to speed up the turnover time. He assured Members that the Department did all these interventions in good faith with the intention to assist artists to cushion the negative impact and to reach out to those in rural areas who had been excluded.

The DG confirmed that there was no BBBEE in the criteria but he advised all South Africans to pull together during this time.

The Chairperson interjected as time had run out. She requested for a list of paid artists’ names to be sent to the Committee secretariat as well as the formula used for the R150 million for relief fund.

The meeting was adjourned.

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