SA Roadies Association allegations against National Arts Council

Meeting report

South African Roadies Association briefing
Mr Freddie Nyathela, Founder and President of South African Roadies Association since 1992, said SARA is grateful for the Committee invitation. SARA is a small training organization, in its 26th year of audited operations, whose primary purpose is to train South African youth for readiness in the event, technical, and production sectors. For more than 20 years SARA has run an on-the-job training programme locally and abroad. This year eight South African youth are on a 10-month on-the-job training programme in the USA at Universoul Circus, the oldest and only black-owned circus in the USA. This training programme has been running since 2002 and more than 150 South African youth have received paid-for on-the-job training in various production and technical positions at the circus. SARA has had limited dealings with the National Arts Council for two decades before Ms Mangope arrived at NAC and had never had cause or conflict with the NAC or its staff.

SARA has a specific view about the NAC incorrect audited financial statements. The past three years of clean audits passed by AGSA were corrupted. The Expired Project and Surplus Policy is unlawful yet signed off (S217 of the Constitution / Section 38(1)(a)(iii) of the PFMA / Regulation 13(c) of Public Service Regulations, 2016). The Flagship Projects abuse is not reflected in the financials or noted. Surplus NAC funds are used to fund DSAC projects such as orchestras.

In SARA's view and experience, NAC is riven with governance issues. The running of an unlawful policy using surplus funds – the Expired Project and Surplus Funding Policy – is improper conduct in state affairs (Section 182 (1)(a) of Constitution) and constitutes maladministration in terms of section 6(4)(a)(i) of the Public Protector Act. He spoke of the NAC paying NAC council members to provide services to the NAC; trying to destroy a whistleblower for highlighting corruption; using NAC funds for personal matters such as litigation against SARA; and issuing fake proposals on behalf of third parties.

From SARA's experience, the NAC funding model is rent asunder and abused by the personal interests of the Council and CEO. This allows for abuse of flagship projects – which is Council members and senior executives giving money to parties who do not need funding. He spoke of delays in issuing calls for proposals, delays in payment of grants with the specific aim of creating surplus funds which would then be distributed through this unlawful policy. This was made use of by the Department and manipulated by it.

SARA filed a complaint with the Public Protector against the NAC and its CEO in January 2017. The Public Protector finally issued a report on 15 June 2020, with the following findings: There was improper conduct and maladministration by the NAC CEO. The allegation that the NAC CEO submitted an application to ÈXCO for partnership funding using the complainant’s name without his knowledge and consent, was substantiated. The NAC Expired Project and Surplus Policy was found to amounts to improper conduct in state affairs as envisaged by section 182(1)(a) of Constitution and constitutes maladministration as envisaged in section 6(4)(a)(1) of the Public Protector Act. The Policy is not aligned with sections 33(1) and 217 of Constitution, section 51(1)(b)(i) of Public Finance Management Act, sections 3(1) and 3(2)(b)(i) of Promotion of Administrative Justice Act, Regulation 16A8 of the National Treasury Regulations as well as regulation 13(c) of the Public Service Regulations 2016.

After release of the Public Protector Report, it was referred by SARA to the Hawks. After reviewing the Public Protector Report, the Hawks opened up Case No 233/10/2020 against the NAC CEO.

He pointed to the abuse of power by CEO Mangope in using the NAC and the court to settle personal issues and the findings of the Public Protector.  

Mr Nyathela concluded by giving the SARA recommendations:
• NAC should be properly audited
• The Expired Project and Surplus Policy stopped as it is unlawful
• Funding should be overhauled
• All NAC Board members and senior executives subjected to lifestyle audits
• Parliamentary Monitoring Group reports evidence the Portfolio Committee's frustration at NAC dishonesty
• Minister and Director General should be called to order for what transpires at NAC under their watch.

DSAC Update on Support provided to South African Roadies Association (2014-2020)
Mr Vusumuzi Mkhize, DSAC Director-General, detailed the R37.8 million that had been committed to SARA since 2014. This was in recognition of the role played by SARA in the sector, DSAC has had a long relationship with SARA since early 1997 under the then Department of Arts, Culture Science and Technology (DACST). Most of the initial support the Department provided to SARA was mainly towards the International Programme, where funding was allocated to assist SARA travel with selected youth to attend key international conferences, exhibitions, festivals held annually in countries such as UK and Germany to name a few. These platforms are of key importance in the sector as they are attended by high-level industry leaders, innovators, production suppliers, and was a major platform for SARA to network and build relationships such as with the Backstage Academy. Other initial support had been towards emergency administration funding and an exchange training programme.

Through its International Relations Programme, SARA met sector leaders that provided international strategic support for SARA towards skills and business development in South Africa such as conducting workshops for youth attending a training programme at SARA House; presentations at the annual Live Events Technical Productions Conference (LETPC) initiated by SARA since 2015 attracting more than 300 participants from different parts of South Africa, Africa, and overseas. It has also been able to take an average of two to four youth from South Africa each year to travel overseas and participate at some of the international trade fairs, conferences and expos.

The Committee was advised that for a very long time SARA had appealed to the Department for assistance with renovations to the building in which it conducts its business and training and development activities for youth as well as storage for technical equipment. In response, the Department commissioned conditional assessments in 2009 by Trinity Risk Management Services and another assessment in 2014 by the Independent Development Trust (IDT). Both assessments reported that the condition of the building was derelict and is a health hazard to the occupants. A set of recommendations for renovations was made.

The Department as per Court Order appointed the Development Bank of Southern Africa (DBSA) as implementing agent for the renovations of SARA House. A site visit to the SARA building was held on 6 September 2018 attended by the Department, DBSA and SARA. Thereafter, a DBSA proposal was submitted to the Department on 14 September 2018 where the refurbishment costs had escalated from the previous IDT estimation of R15 million to R23 million.

The Department sent a letter of approval to DBSA, confirming the R23 million project budget and an MOA was signed by both parties. The project timeframe is projected to be 19 August 2019 to October 2021. DBSA appointed Simukayi Projects (Pty) Ltd to provide full professional services as Project Managers. DBSA is currently advertising for the appointment of the construction team to commence renovations.

On 19 August 2019, the Department received an email from SARA, with a proposal dated 19 July 2019. The proposal requested R10.9 million three-year financial support for SARA administration and operations: Year 2020/21: R2 863 368.00; Year 2021/22: R3 149 704.80; Year 2022/23: R3 464 675.28.

A letter was sent to SARA on 11 November 2019 where the Department committed to provide SARA with funds towards administration and operations from mid-April 2020.

SARA introduced DSAC to Sir John Botham (OBE) of Semperior Ltd from the UK to present a proposal for the development of a Backstage Academy in South Africa. Thereafter DSAC embarked on a Human Capital Development and Skills Audit of the Live Events, Technical and Production Services sector incorporating a feasibility study for the establishment of an Academy structure. This was done as an exercise for the Department to gather more information and knowledge about the skills dynamics in the sector. The sector was updated about the study at the annual LEPTC and the study report was completed in 2018 and circulated to the key sector associations and stakeholders including SARA.

As follow up, the Director-General joined SARA in 2019 for a physical site visit to the Backstage Academy in the UK. The Minister of Sport, Arts, and Culture made a public announcement on 16 July 2019 as part of his budget vote speech to confirm that the Department is in support of the development of an Academy. On the 11 October 2019, the Department hosted a Live Events Technical Production Skills Seminar at Freedom Park and the outcomes of the study report “Human Capital Development for Events and Technical Production Services Sector - Feasibility Study and Strategy”. All key sector stakeholders who provide skills development and training were invited.

Mr Mkhize then addressed the Public Protector Report and its remedial actions. Although the Department continued to provide support to SARA over the years, several challenges emerged and in 2014, a Settlement Agreement was signed between DSAC and SARA as a means to consolidate recommendations towards resolving the challenges. However, in the course of implementation of the Settlement Agreement, SARA was still unsatisfied and raised a complaint in 2017 to the Public Protector. The Public Protector investigated the matter and produced a report in June 2017 which outlined a set of remedial actions to be undertaken by DSAC in implementing the Settlement Agreement:
• DSAC must provide R15m funding for SARA House renovations as per the settlement agreement.
• DSAC must appoint DBSA as implementing agent for SARA House renovations.
• DSAC must amend the White Paper to ensure SARA is not unfairly discriminated against.
Mr Mkhize then gave a summary of the actions in implementing these and some challenges.

Discussion
Mr T Mhlongo (DA) welcomed the presentations and asked if SARA, NAC, and the Department received the presentations. He asked if the NAC has an Expired Project and Surplus Funding Policy and if it was lawful. If yes, he asked if NAC submitted the policy to the Public Protector?

Mr Mhlongo asked if NAC responded to the Auditor General (AG) recommendations and what is NAC’s audit action plan. He asked if the allegations about the NAC paying the CEO legal fees are true. He asked what NAC is doing about the media reports that are putting the name of the NAC into disrepute.

Mr Mhlongo noted that the NAC Chairperson had promised to implement the AG recommendations but today it is over 200 days since that AG report but there has not been any review of it. They must not promise to do what they cannot do. The NAC Chairperson must ensure that the time frame is reflected in the Annual Performance Plan report. As a Committee they need action and asked why the NAC has given the minutes and not the Public Protector Report to the Committee. The bad publicity that NAC is receiving especially the allegations of R596 000 paid to the CEO has to be explained. What is the update on the CEO disciplinary hearing? If there is a report, he requested it.

Mr Mhlongo sought clarity on allegations of a fake funding proposal NAC is accused of. What did NAC do about it? He asked if NAC has a policy on promulgation. Mr Nyathela had given the Committee several emails that the Department is not responding to his emails. Mr Mhlongo said the DG promised in the last meeting that the emails matter would be resolved but as it stands NAC still does not respond to emails. He asked why the Department blocked the privilege of young people participating in this technical production skills project and why NAC is not funding the Backstage Academy?

Mr B Madlingozi (EFF) welcomed the presentation and asked:
- is NAC fighting to protect one another?
- is NAC fighting SARA as the builders of the black child?
- is NAC saying the Public Protector is not impartial?
- is NAC hiding something?
- why is NAC so concerned about how documents were found rather than the truth in the documents?
- is NAC saying the Public Protector did not investigate properly?
- is SARA feeling hindered by NAC and the Director General in its duty to build up the life of the poor?
                                                                                   
Ms V Van Dyk (DA) said a October 2016 report commissioned by the Minister and compiled by Business Innovation Group found the NAC surplus policy was against the Public Finance Management Act (PFMA). Against this background, how did NAC understand this finding? She asked if the NAC can answer if there was a fake application on behalf of SARA without its consent and who signed it off.

Ms Dyk expressed concern about the information presented to the Committee. She cannot believe that the Public Protector did not seek information from the NAC. She asked if the NAC had filed a notice for a review application of the Public Protector Report. She asked if the NAC CEO had made a statement to the Hawks. She asked the Director-General and NAC to confirm the Public Protector Report is in the public domain.

Mr M Seabi (ANC) welcomed the presentation. The reason the Committee is here is because of Mr Nyathela's complaints but the Committee is yet to hear his prayer. He is not sure if the review of the Public Protector Report is already before the court. He asked that this be made clear as the Committee cannot discuss a matter that is before the court. He asked about the relationship that structurally exists between the three: NAC, SARA and Department. He did not see any concrete evidence which shows there is maladministration as alleged about the NAC audited financial statements. He asked SARA to name its sources of funding other than the NAC and the Department.

The Chairperson thought that when the Department gives information to the Committee it is also giving the information to SARA. She was confused because here we are meeting with the NAC today but it has the matter before the court. After all this, the issue has not been resolved and will still be before the court for a very long time. This worried her. She thought that the Committee is performing its oversight role by calling in NAC and SARA so that the Committee can hear what is going on. DSAC has been getting letters from Mr Nyathela. For her this made her think that the Department is coming close to where SARA wants it to be.

The Chairperson wanted to know from where SARA is getting funds. She urged the entities that when they respond to Member's questions, they should respond well so that they can arrive at a way forward. They need to iron out everything since they started on the wrong footing. There is a need to make things right.

SARA response
Mr Nyathela replied that he would like to put the record straight about both the NAC and the Department. The truth is that SARA has been receiving a raw deal from NAC and DSAC starting with NAC. Before the NAC CEO arrived, SARA had good working relations with the NAC. SARA is compliant and it has submitted all requested compliance documents. The NAC would fund SARA for the traveling cost of its students going to Denmark and Holland for on-the-job training without any problems. SARA submitted its reports. Then arrived the new CEO in 2013. We applied to purchase equipment and the maximum funding was R1 million. We applied for R900 000. We did not receive a response; we made a follow-up and finally a response came from NAC stating that SARA did not submit supporting documents such as a tax clearance certificate. SARA challenged this and said we had submitted all the compliance documents as always. When NAC had no way out, the NAC CEO requested a meeting with SARA. The NAC CEO and the former Chairperson came to SARA and apologized in that meeting. They even stated that it was wrong for them to deny SARA funding and that they are going to sort out the matter and that the money requested was not a lot of money.

Mr Nyathela said that while still waiting for the response from NAC, somebody from EXCO called and asked if we had submitted an application for a partnership with NAC for R350 000. He told them that SARA had not submitted that as it was still waiting for an NAC response to a funding request. We then got hold of that document after the call and it was titled NAC submission to EXCO and was signed by the CEO and Manager in the Office of the CEO. The submission stated that SARA had applied for a partnership. We challenged that and wrote to NAC on 30 March 2015. They responded in April with a short response that the allegations Mr Nyathela raised in the email were extremely spurious and damaging to the NAC's reputation and that he needed to realize that the allegations are questionable. They said that they will get back to him but up until now they are yet to respond. SARA has never requested a partnership with NAC. What transpired is SARA filed a complaint to the Minister who appointed Business Innovation Group (BIG) to make an investigation of the Expired Projects And Surplus Funding policy. The findings confirmed this policy was unlawful and that NAC was not complying.

National Arts Council (NAC) response
NAC Chairperson, Mr Hartley Ngoato, responded that it is important for people to understand the role of NAC and the impact it has on the Arts Sector. We receive funding from government with funding sectors allocated. The funding we get from the government is not earmarked for specific individuals but is for all citizens. Inasmuch as we take responsibility for the conduct of our previous Council members, we found the concerns of Mr Nyathela already in the public domain. When we came on board, the Business Innovation Group report had already been presented. The BIG report did not agree with Mr Nyathela's allegations. Mr Nyathela objected to the BIG findings and wrote to the Minister that one of the investigators has a relationship with the NAC CEO and therefore was biased. For that reason, DSAC appointed another forensic team to investigate whether there is a relationship.

The allegations of maladministration raised by Mr Nyathela are from 2014 before this NAC board was appointed. On the bad publicity, when a person tweets that "the Minister is protecting the NAC board" what are we to say? It is not the truth, but the person is not providing evidence and many other tweets by Mr Nyathela are not true. We do not want to respond to every tweet on social media and the NAC board agrees that the NAC has reputational damage, but we respond structurally and properly.

The NAC Chairperson said that despite the BIG report, Mr Nyathela was unhappy with the findings and sent the matter to the Public Protector. Mr Seabi asked if the matter is at the courts and it is. The Committee Chairperson complained that we are paying lip service by coming to the meeting. However, even if we are before the courts, if we are invited by the Committee, we will appear.

He reiterated that the NAC Board is not hiding anything, but they are hell-bent on protecting the NAC and the Department and any person who is being accused by Mr Nyathela without a shred of evidence. We cannot allow one man to destroy the NAC.

If Mr Nyathela has issues, he should come. He had met Mr Nyathela at the awards and approached him and gave him his number and advised him that if he wants to talk, his door is open. However, the next thing he hears he is getting negative publicity from Mr Nyathela that he is a bad person. As the Council members, we will not be bullied without facts. We challenge him that if any one of us is guilty and there is evidence, he should bring it. Mr Nyathela keeps making issues about an application for lighting he made in 2014. The DG explained that NAC does not provide that because it is outside its mandate. The previous NAC Council was right to shoot it down and Gobodo Forensic and Investigation Accounting (GIFA) and the Public Protector as well.

The NAC Chairperson noted the reference by the Committee Chairperson to the NAC CEO falsifying a SARA application which was not the case. He strongly stated that they would not come before the Committee to lie and sell their souls for evil issues. There was no fake application – even the Public Protector in her report said that. All she found was that when the proposal was sent to EXCO, Mr Nyathela was not notified.

The NAC Chairperson replied that Mr Mhlongo was referring to issues that were said in a meeting at which the NAC council members were not present and we find it unfair that you expect us to respond to such. There is a Expired Projects And Surplus Funding policy and in the findings of the Public Protector, it is noted that the policy is susceptible to manipulation by staff. There is no proof that we have funded council members in the past. If the Public Protector has evidence, she would have placed that information in the report but she did not. Mr Nyathela continues to tweet and accuse without evidence. We call on him to name who in the NAC is corrupt and practising nepotism. We submitted a response to the Public Protector but it was not included in the report. The NAC CEO was subjected to a disciplinary hearing. Out of all the allegations, none could be sustained and the independent advocate found the CEO innocent. If that report is wanted, we can share it any time. The case was opened by SARA in Johannesburg and the Hawks who opened the case will know the case number.

SARA response
Mr Nyathela reiterated that the NAC Chairperson is lying. First, when we put these matters on Facebook and Twitter, the NAC council resolved to support the CEO in litigation against SARA stating that he must remove the tweets and we were issued with a summons. We filed a notice to oppose because we stand by what was posted on Twitter and Facebook. What happened was that after we challenged that, NAC obtained a court order using the back door method and we challenged that matter and it will be heard on 16 November 2020. The NAC has not yet filed its heads of argument as we speak. The NAC Chairperson has benefitted from NAC. The Chairperson was appointed to investigate who was leaking this information from inside the NAC. He was protecting the CEO because the same person has benefited and it was authorised by the Minister.

Mr Nyathela reiterated that SARA’s funding application was based on the advice of the NAC that we can submit. The NAC objectives state clearly that the previously disadvantaged must be supported especially in terms of tools. SARA has not received a report from NAC after they had admitted that they had declined our application. That is one remedial action which the Public Protector has recommended. Why did the NAC do that submission to EXCO when we did not know about it. The NAC seeks to sabotage SARA and it is sabotaging the Backstage Academy and this is all done so that the African Child is not emancipated.

Department response
The Director-General said there is no intent by the Department to undermine the concerns of SARA. It is not right for a person who says he represents Africans to be lying. The problem is that Mr Nyathela is lying that the Minister authorised procurement. Unfortunately, he is using his position to lie. The Director-General said he has asked Mr Nyathela so many times to come and discuss this but he does not want to. The Department will only support him on matters that it sees are noble and not his insults.

Further comments
Mr Mhlongo responded that the NAC Chairperson's arrogance is too much and he cannot tell an MP what to ask. Mr Ngoato is hiding something as he cannot say he does not know the case number and who the attorney representing NAC is. Mr Ngoato is not answering how much they paid for the CEO's legal fees and what they will do about the policy.

The Committee Chairperson said that the Committee had met to resolve this matter of 2014 and 2016 and it is trying to do its best. However, she was worried that the matter is now involving the courts. Even worse everyone is far too emotional, judging from the way we are talking to each other in this meeting.

Mr Madlingozi noted that NAC, SARA, and Department should get together and resolve their dispute to ensure that the people benefit. This was echoed by Mr Seabi and Mr M Zondi (ANC). He argued that Mr Nyathela might be angry and frustrated but they should be peaceful and sit down and resolve this.

The Committee Chairperson’s network connection was lost and she could no longer join the meeting. Mr Mhlongo was seconded to chair the meeting.

Mr Mhlongo asked the NAC to respond to the unanswered questions in writing. He advised NAC, SARA, and Department to go and sit down and resolve their issues and inform the Committee on the progress.

The meeting was adjourned.