Department on 2019/20 Quarter 3 and 4 performance; Update on Covid 19 relief fund; with Deputy Minister

Sports, Arts and Culture

25 August 2020
Chairperson: Ms B Dlulane (ANC)
Share this page:

Meeting Summary

The Department of Sports, Arts and Culture briefed the Portfolio Committee on its 2019/20 quarter two and three performance.

The second quarter performance of the 2019/20 financial year improved by 10% compared to the first quarter performance.

The third quarter performance of the 2019/20 financial year decreased by 8% compared to second quarter performance.

Members asked about the unstable Information Technology infrastructure in the Department, when more than R150 million was spent.

Another issue raised was why the Department outsourced a wellness service from a communication company. The company was questioned as its listed website could not be found. Members wanted to know where the company has provided wellness services in its past experience.

The Committee asked why the Department did not implement its recommendations from the last budget report, where the Committee said clearly the Department must avoid outsourcing.

Other issues raised were what consequence management the Department takes if the provinces or stakeholders do not submit documents in time; how much the Department pays for private accommodation; what are cultural diplomatic engagements, and if the money allocated to cultural engagements finds its way back to the fiscus.

It was questioned why the Northern Cape province is the only province with insufficient funds to send its learners to the National School Championship; why there is gross under-expenditure for Programme Four (Sports Support), and if it will have a negative impact on the preparation of the Olympic games. Members asked if the Department has a contingency plan in case the National Lottery Commission does not fund the Olympic Games.

Concerning the Copyright Amendment Bill, the Chairperson said the Department must prepare to have a joint meeting with the Department of Trade and Industry. This Bill was referred to the Committee but the Committee did not have a full briefing. There must be a joint briefing with the other departments to fast-track discussion on it.
 

Meeting report

Second Quarter Performance Report
Mr Vusumuzi Mhkize, DG, Department of Arts and Culture, said the Department planned to implement and achieve 26 performance targets during the second quarter reporting period.

However, 81% (21/26) of the aforesaid targets were achieved and only 19% (5/26) were not achieved.  Below are details of the targets which were not achieved in the second quarter.  Some of the non achieved targets were:

  • Conducting social advocacy platforms
  • Provision of support to sector organisations;
  • Provision of support to provincial community arts programmes;

The second quarter performance of the 2019/20 financial year improved by 10% compared to the first quarter performance.

[See presentation for detailed budget expenditure]

Third Quarter Performance Report
The Department planned to implement and achieve 30 performance targets during the third quarter reporting period.
However, 73% (22/30) of the aforesaid targets were achieved and only 27% (8/30) were not achieved.  Below are details of the targets which were not achieved in the third quarter.  Some of the non achieved targets were:

  • Procurement awarded to Broad Based Black Economic Empowerment (BBBEE-compliant) service providers
  • Implementation of the social cohesion compact
  • Conducting social advocacy platforms
  • Provision of support to arts and social development programmes
  • Provision of support to provincial community arts programmes

The third quarter performance of the 2019/20 financial year decreased by 8% compared to second quarter performance.

The overall spending is at R3.178 billion (70%) against the adjusted appropriation of R4.6 billion as at end of December 2019.  Compared to the spending of the prior year, amounting to R3.146 billion, there is an increase of 1.0%.

Compensation of employees
The spending is at R188.8 million (71%) against the adjusted appropriation of R267.5 million. The expenditure in comparison to the prior financial year, the same time at R178.3 million has increased by 5.9% due to several positions filled.

Goods and Services
The spending is at R273.1 million (59%) against the adjusted appropriation of R463.0 million.  The underspending is mainly attributed to the Department of Public Works (DPW) not billing the Department for the first, second, and third quarters state-owned leases. It still awaits Treasury’s approval for the itemised billing tariffs. The result is a 7.8% decline in expenditure, compared to the prior financial year. 

Provinces and Municipalities
An expenditure of R1.2 billion relates to transfers for the conditional grant on community libraries.  Compared to the same period in the prior financial year, there is an increase of 6.1%, due to a nominal growth in the appropriated budget.

[See presentation for detailed budget expenditure]

Department of Sport and Recreation: Second Quarter Performance Report (2019/20)
Presented by DDG, Ms Sumayya Khan, and CFO
The Department planned to implement and achieve 27 performance targets during the second quarter reporting period.
However, 70.4% (19/27) of the aforesaid targets were achieved and only 29.6% (8/27) were not achieved.  Below are details of the targets not achieved in the second quarter.

The Departmental financial performance as at 30 September 2019:

  1. The overall spending is at R503.2 million which represents 43.6% of the total budget allocation out of a total budget of R1.2 billion. The expenditure pattern is in line with the previous financial, with an increase of just over 1.1%. Provinces were penalised in the second trench transfer in the previous year, whilst this year the trench was transferred in full.
  2. Spending on compensation of employees is at 40.9% totalling R49.2 million out of a budget of R120.1 million. Compared to the first half of 2018/19, expenditure over the same period in 2019/20 decreased by 4.1%. This was mainly due to the office of the Minister's costs now catered for at Arts and Culture.
  3. Expenditure on goods and services is at 36.9% totalling R65.2 million out of a budget of R176.4 million. There is a decrease of 5.1% compared to the same period last financial year. Expenditure is expected to increase in the Third Quarter with payments of projects.
  4. Transfer payments spending is at 45.5% totalling R388,5 million out of a budget of R854.7 million.  Improved cooperation between SRSA, provinces and federations has yielded positive results hence an increase of 3.3% in the spending as compared to 42.2% spent the same time last year.  
  5. Payment for capital assets expenditure is at 14.9% totalling R374 thousand out of a budget of R2.5 million. The expenditure is expected to increase during the year with procurement and payment of assets. There is a decrease of 27.6% as compared to the same Quarter last year. This is due to project (Sport Buses) which was completed in the middle of  2018/19 financial year.

Discussion
Mr T Mhlongo (DA) asked why there is unstable Information Technology (IT) infrastructure in the Department, when the Department spent more than R150 million.

Under the heading of appointment of the service provider, he noted there is a company appointed for wellness. It is a company which deals with communications, and has communications experience. He asked why the Department outsourced a wellness service from a communication company.

He also wanted to find out why the Department is not taking the Committee’s recommendations from the last budget report, where the Committee clearly stated the Department must avoid outsourcing.
More so, he wanted to know what the total budget for the wellness service is. He asked if the communication company passed all the required tests.

The Minister, in one of the last meetings, said the Chief Executive Officer (CEO) of the National Arts Council (NAC) will take the Public Protector’s report under review. It has been 60 days, and nothing has been done yet. He wanted the Minister to intervene to ensure it has a clean National Arts Council leadership.

He asked how much was used for the izimbizo, and how many people attended the event.

He wanted to know if the Department has a relationship with SARA because in the presentation it did not reach the target. He proposed the Department come before the Committee, because it receives allegations of corruption regarding the Department

Ms V Malomane (ANC) said, under Sports and Recreation, there seem to be challenges with the submission of documents. She wanted to find out if there is any consequence management the Department takes if the provinces or stakeholders do not submit documents in time.

She wanted to know if the dispute with the Department of Public Works is resolved. She asked how much it pays for its accommodation.

Mr B Madlingozi (EFF) asked about the cultural diplomatic engagements the DG was talking about, and what kind of help it will give to the national culture. He asked who these people are who are being told to go and be part of the cultural exchange, and asked how these people are chosen. He asked if the money allocated to these cultural engagements finds its way back to the fiscus.

On the Copyright Amendment Bill, he said it was never extensively discussed in the Committee of the Sixth Parliament. People within the industry, for example creatives, most do not have a clue of what the Bill is talking about. The Committee must come together and present the Bill as one, so it is as concrete as possible.

Ms V Van Dyk (DA) said the sole spending on infrastructure is a persistent challenge within the Department. She wanted to know, with the recently established infrastructure management office, if it ensured the implementation of the infrastructure project like the Winnie Mandela House, the OR Tambo memorial, and such. She asked if these projects follow through or if it is delayed.

She asked for an explanation on programme three. She wanted to know why there are late claims for the heritage deliberations. These claims are made by the Northern Cape Department, Office South Arica, Arts and Culture. She asked why this is considered late because this event happened on the 24 September 2019. She wanted to know why the Human Language Technology project was not achieved. She asked why the Northern Cape province is the only province with insufficient funds to send the learners to the National School Championship.

Mr M Seabi (ANC) wanted to know the progress with the construction of sports facilities. He asked why there is a gross under-expenditure for programme four, dealing with sports support. He asked if it will not have a negative impact on the preparation of the Olympic Games.  

He also asked if there are funds for the preparation of the Olympic Games, and if the Department has a contingency plan in case the National Lottery Commission does not fund the Olympic Games. The Chief Financial Officer (CFO) said there is no budget but ultimately, the Department spent money as a result of the former Minister and Deputy Minister. He wanted a further explanation of this.

Mr W Faber (DA) wanted to know the reason why there is such a high rate of resignations. He asked about the Copyright Amendment Bill, asking if the Department as well as the Department of Trade and Industry together will be part of it.

On the Copyright Amendment Bill, the Chairperson said the Department must go and prepare for a joint meeting because this Bill was referred to the Committee while the Committee had not had a full briefing. There must be a joint briefing with the other departments so the discussion can be fast-tracked.

Ms R Adams (ANC) wanted to know why Members of the Committee do not receive invites to the Recreation Promotion Council (RPC), to perform effective oversight. She asked how often senior managers within the Department pay a visit to problematic provinces.

Responses
Mr Vusithemba Ndima, DDG: Heritage Promotion and Preservation, DAC, said the Winnie Madikizela Museum is completed. Currently, the Department is looking at an exhibition to become operational. The work on the JL Dube project is resuming. The Department needed to investigate the structural integrity of the amphitheatre when it stopped its working relations with Independent Development Trust (IDT).

The OR Tambo, the Wi-Fi Centre, and the Garden of Remembrance, is almost complete. When it comes to the Raymond Mhlaba statue, there are still matters which need to be resolved. The project had to undergo some investigations because of problems highlighted. The Department needed to make sure it investigated the matter.

Speaking on software, the Chief Financial Officer (CFO) said its systems, especially for payment, are done through what is called the basic accounting system. The Department is not necessarily in charge, but it is the national system which enables the Department to process transactions into the general ledger of the department.

When spending on software, it is basically like spending on license fees to participate in Microsoft, Outlook, and so on.

On the issue of the appointment of the service provider for wellness, the Department does have a budget for wellness. In the last two months or so, it finalised the appointment of a wellness service provider. It did not have such a service in the company and had to contract these services.  Although the company poses as a media company, it has expertise in the wellness service itself.

Mr Mhkhize (DG) said the company it hires for the wellness service indeed has the expertise in this area. It was an open tender and the company passed all the requirements. There were no indications the company is not equipped to deal with the issue of wellness.

A written report will be provided on how many people attended the izimbizo.

Regarding its relationship with SARA, he said there is a relationship. It goes back years, and the Department supported all its programmes without fail. The Department can provide data and evidence to the Committee about this. The recent one is of R23 million, the Department is providing to upgrade SARA’s building.

The cultural diplomatic engagements are engagements with other countries, to share practices and were necessary for colleagues to also engage. It is to learn what is being done, and eventually to have a Memorandum of Understanding (MOU) on culturally exchanged programmes with these countries, which benefits creatives.

On the Copyright Amendment Bill, he said the Department accepts the request to work jointly with the Department of Trade and Industry. It will be able to make the necessary presentation and if there is a need for a joint presentation, the Department should be able to do this.

Regarding the Human Language Technology not being achieved, he said the support was provided but the support to those technologies was only done mainly in the first quarter. Payments were done.

When talking about the second and third quarters, he said one will find money runs over three quarters before it is transferred to the next trench. The Department agrees the time of payment must be clear, which one will end in which quarter. The Department tries to implement payments so as not to run over when there is a target.

On the issue of submitting reports, he said where the Department is now, it does not have issues with the submission of reports any longer.

The Acting CFO of SRSA spoke on the overspending of households under programme one. He said when it budgets it does not budget for households in relation to resignations. At the end of September, it had the change of administration. Secondly, it was supposed to pay the former Minister and Deputy Minister its once-off gratuity upon leave the Office. This is the overspending which happened.

When the former Minister and former Deputy Minister left office, support staff were not all absorbed in the Department. This resulted in the termination of contracts.

Addressing the reason why the Northern Cape did not have enough funds to send learners to the national championship, she said the end of the quarter, which was September, the Department transferred all the funds due to all provinces including Northern Cape.

Ms Khan said the Olympics could have already happened in this financial year. The time when the South African Sports Confederation and Olympic Committee (SASCOC) was preparing for the Olympics it had some sponsors on board, but the discussions will have to start again with the National Lottery for funding.

From the Department’s side, historically it has not always given funding towards Olympic Games. It gives an annual allocation to SASCOC for administration and support in other programmes. The Northern Cape is one of its smallest provinces, and when it gives it a grant, it gets the smallest amount of money. Northern Cape also has vast rural areas and the spread of schools is very vast. Even for it to host its district championship is a challenge. It has to come up with various models of delivery for the Northern Cape because the schools are so far apart. The Department asked KwaZulu-Natal (KZN) and Gauteng to sacrifice some of its grants to give to the Northern Cape.

Follow up question
Ms Malomane and Mr Mhlongo said some of the questions were not answered.

Ms Van Dyk said the company the Department hired for the wellness service did not show such services on its website. She wanted a detailed report on this.

Mr Mhlongo said he received emails saying SARA did not get any money from the Department. He wanted to know how much SARA received for this financial year, and last financial year.

Responses
The CFO answered on the issues of rent. He said the national office is sitting in a private office which is Sechaba House. Currently, it occupies about 11 000 square meters. The Department is in the process of relocating the former Department of Sports and Recreation, to join it and occupy the remaining space in the building.

The amount spent on the Izimbizo- Credo Mutwa is R1.4 million, and 800 people attended the event. There was also social dialogue the day before the event and about 200 people attended it. For both events, the total amount spent was R1.7 million.

On the issue of outsourcing, the type of work required is not the type of work the Department does, and therefore it needed to provide the service to the clientele it is servicing.

Answering on the amount of money given to SARA, he said he will provide the Committee with all the documents and data going back to 2014. In 2013 the Department entered into an agreement for three-year funding with SARA to the value of R2.8 million, and the contract ended in 2016. In 2015 there was another allocation of R800 000. In 2015 there was also the issue of renovations of the SARA house. At the time the cost was R15 million. After engagements with SARA, the Department agreed to a fee of R23 million, which is the project that is currently running.

The Deputy Minister, Ms Nocawe Mafu, apologised to the Committee for the long reports. She said on the issue of the Copyright Bill, the Committee must first be briefed before it has a joint meeting. Then by the time it has the joint meeting it will have information on the same level as the Department of Trade and Industry (DTI).

On the issue of Olympic funding, she said, although SASCOC is responsible for it, there is no way that as a Department it should let the country down by not making sure the team is sufficiently supported. The interaction between themselves and SASCOC will determine what kind of support is needed.

Concerning the National Arts Council, she said the best the Department can do is to give an update report which is requested from the National Arts Council.

The Department will ensure the Committee is briefed, and has all the information which might be helpful to it.

The meeting was adjourned.

 

Download as PDF

You can download this page as a PDF using your browser's print functionality. Click on the "Print" button below and select the "PDF" option under destinations/printers.

See detailed instructions for your browser here.

Share this page: