Video: Committee Meeting
The Head of the Western Cape Provincial Treasury stated that the Annual Report covered the 2019/20 financial year – essentially what he deemed the calm before the storm occurred for Provincial Treasury - however, 2019/20 had still been a very challenging year. There were a number of critical vacancies which had been vacant for some time. Filling vacancies was and continued to be a challenge for the Department as it required specific technical skills in public financial management which had a limited skills pool. They have made good progress on employment equity considerations.
The Provincial Treasury received the Silver Award for Best Ethics Department in the 2019 Provincial Service Excellence Awards. It had maintained a clean audit for the past seven years with the Auditor-General recognizing and attributing their success to their leadership culture, implementation of action plans and established policies and procedures.
Members asked how sure Provincial Treasury is that the Western Cape departments are getting value for money when procuring goods, including highly standardized goods. The Committee was pleased to see all the internships and bursaries being offered but asked how the duplication of bursaries would be dealt with and whether there had been partnership with NSFAS. Members asked if any employees within the Provincial Treasury had applied for the HOD position and if so what the reasons were for none receiving the promotion. They asked if Treasury believed that the Gambling and Racing Board should report to the Department of Economic Development or Treasury. The Chairperson proposed the Committee should pay a visit to Kannaland to deal with the matter as there seemed to be no consensus on the InovaSure Project, including its legality. More information about the differences between Type B and Type C payout machines was requested and about the negative side of gambling which affected people’s lives who had gambling problems. The Board was asked how it intended to manage the shift from conventional to online gambling and its impact on the future regulation of gambling.
Western Cape Treasury 2019/20 Annual Report presentation
Mr David Savage, Head of Western Cape Provincial Treasury, stated that the Annual Report covered the 2019/20 financial year – essentially what he deemed the calm before the storm for Provincial Treasury, however, 2019/20 had still been a very challenging year. There were a number of critical vacancies and functions which had been vacant for some time. Filling vacancies was and continued to be a challenge for the Department as it required specific technical skills in public financial management which had a limited skills pool. They have made good progress on employment equity considerations.
• 28 provincial budget policy assessment reports
• 33 asset management plans assessed
• 84 infrastructure expenditure reports assessed
• 30 reports submitted for engagements
• 4 datasets managed
• 17 interventions to improve supply chain and asset management systems in departments
• 12 municipal support initiatives on governance, risk and control.
The Department received the Silver Award for Best Ethics Department in the 2019 Provincial Service Excellence Awards and served as a highlight for the Department in recognition of their underlying values and commitment. It has had a clean audit for the past seven years since 2013/14, with the Auditor-General recognizing and attributing their success to their leadership culture, implementation of action plans and established policies and procedures.
The Nedbank Essay writing competition - the top 15 of the 25 finalists received study bursaries to pursue a three-year degree or diploma, thereby creating opportunities for young people and addressing the scarcity of skills in the financial and related sectors.
Chartered Accountants Academy - 14 prospective chartered accountants appointed to the academy
External Bursary Programme - there are currently 125 young persons in the system who are either completing or carrying out their work back period obligation
Fiscal and Economic Services
- Continued emphasis and enhancement of social, economic and fiscal research
- Provincial and the Municipal Economic Review and Outlook (PERO and MERO) are annual research publications produced by Provincial Treasury looking at key economic trends and developments in the Western Cape.
- The Western Cape Fiscal Strategy ensures fiscal sustainability, through driving allocative efficiency, fiscal discipline and fiscal consolidation.
- Overview of Provincial and Municipal Infrastructure Investment is a supplementary publication.
Provincial Treasury formalised the Joint District and Metropolitan Approach (JDMA) of the Province.
6792 procurement related queries from suppliers successfully resolved via the supply chain management (SCM) Helpdesk. It established a walk-in-centre in October 2019 to support departments, municipalities and current and potential suppliers on database registration and support to the e-Procurement Solution for quotations (ePS).
Financial Governance Accounting
Workshop with all municipalities resulted in all municipalities addressing audit concerns raised on prior year technical matters, and allowed them to submit within audit timelines. 95% achievement, zero accounting issues raised by Auditor General South Africa (AGSA) except for Agriculture aside. Condonation Working Committee was established to deal with irregular expenditure. Work done on public entity Accounting Officer / Authority guideline. ERM (enterprise risk management) Unit to guide all municipalities at bi-monthly forums.
Human Resources Statistics
0.7% disciplinary cases; 56.5% personnel expenditure; 0.4% overtime expenditure; 2.7% grievances; 0 injuries on duty; 1.9% vacancy rate; 2% persons with disabilities; 19.3% turnover rate; 9 sick leave; 436 training interventions.
Mr David Maynier, Western Cape Provincial Minister of Finance, Economic Opportunities and Tourism, said the 2019/20 Annual Report reflected some of the excellent work done which had been evidenced by the presentation by Mr Savage. The Department had to adapt to the challenging environment it found itself in as a result of the pandemic. He credited the Department for its swift adaption to Covid-19 which struck in the latter part of the financial year.
The Chairperson tabled parts B and D of the Annual Report for questioning.
Mr A Van der Westhuizen (DA) congratulated Provincial Treasury on its seventh clean audit. With a lot of emphasis being placed on supply chain management and efficiency processing, he asked if the current SCM system was rendering value for money for the goods and services procured. How sure was Provincial Treasury that the Western Cape departments were getting value for money when procuring goods, including highly standardized goods.
Page 17 of the report referred to an integrated financial management system which was being introduced. He asked if the new system was meant to be replacing the old system or if it would be integrated with the old system despite it being completely outdated.
With reference to page 32 and as a former educator, he was grateful to see the internships and bursaries being offered. However, he sought clarity about how duplication of bursaries was dealt with and if there was a partnership or bursary integration with the National Student Financial Aid Scheme (NSFAS).
The Gambling Board Annual Report stated that the Board shared the view that perhaps it ought to report to the Department of Economic Development rather than Provincial Treasury. He sought Treasury’s viewpoint on this and the possibility of transferring responsibility for the Gambling Board to the Department of Economic Development.
Ms N Nkondlo (ANC) asked if Ms Gantana or any other employees within Provincial Treasury applied for the HOD position and if so; what the reasons were for none of them being promoted to the HOD position. The question was raised as firstly there seemed to be no gender equity in Provincial Treasury and secondly, it would be more suitable to have someone internal promoted to the HOD position as they knew how the Department operated and such a transition would be far more smoother.
When looking at the performance indicators of the four programmes, there was no indication of underperformance. However, from the yearly comparison in the Financial Budget Performance table, there seemed to be almost 400% increase in underspending. She asked why the concept of underperformance did not include the spending of budgets as one of its indicators.
She was interested in understanding the types of engagements mentioned. On the MTEF engagements, she asked if they were specifically for stakeholders only or if they included the private sector and communities as well. When it came to local government, she asked how Provincial Treasury ensured growth in those municipalities as well as the findings from the MTEF engagements with local government.
With National Government speaking about the District Development Model and the Western Cape Government implementing the Joint District and Metropolitan Approach, she wanted to understand specifically from the HOD and Minister about the harmony between those two approaches and how they would coexist.
The Chairperson congratulated Provincial Treasury on its seventh consecutive clean audit, as well as receiving the Silver Ethics Award. Recently the University of Cape Town had presented an online report to the Standing Committee on Social Development on child murders. The online platform was used as a mechanism to display statistics in an accessible, simplified manner for users to engage better with the information presented. She asked about a feasibility analysis across all departments to see if the methods used by UCT could be used by departments to simplify information for stakeholders and the public, whilst simultaneously assessing if people were actually engaging with the information.
While having a target for walk-in queries of seven per hour sounded impeccable, the aim should not have been to get more queries but rather to have fewer queries as it would indicate that the system was working better. The aim of government was to simplify and make things easier for residents. The plan should be to lower the average number of queries per hour from seven to six or five walk-ins per hour.
The Chairperson asked what the staff turnover rate was, with the emphasis on vacancies for women. How would they be dealing with a succession plan and if there was blockage in the talent pool within the Provincial Treasury as they sought external candidates for the HOD position.
With reference to page 15 of the Annual Report, the Chairperson asked what happened to the five municipalities which had unsigned MOUs leading to their grant money being sent back to Provincial Treasury. Why had the MOUs not been signed and what would be done in future to deal with such administrative matters?
The Chairperson asked how stakeholders across departments were able to use the MERO and PERO, referenced on page 32, in their budgets as evidence.
The Chairperson noted pages 12,19, 24, 42 and 117 dealt with Kannaland and the InovaSure Energy Project which fell across the Departments of Finance and Economic Development. A reference was made to a letter from National Treasury to Kannaland. She asked what exactly was happening to the project and why National Treasury and Kannaland were in disagreement over it. Provincial Treasury has given its commitment to assist municipalities in procuring energy.
The Chairperson noted the workshops held by Provincial Treasury in the Central Karoo. Her own constituency was Laingsburg and she asked what it was doing to assist Laingsburg Municipality in getting their policies in place to root out corruption and get a clean audit. She said that despite Laingsburg having a bank account of about R22 million, R18 million of that was conditional grant and the rest was budgeted for salaries. The service delivery amount allocated was only R300, which was almost unbelievable and utterly shocking.
Provincial Treasury response
Mr Maynier responded that the InovaSure Project was one of concern, with Kannaland being under a Provincial Financial Recovery Plan. Provincial Treasury had advised and cautioned the Municipality about Project, with National Treasury concerned about whether the process complied with the PFMA. Provincial Treasury raised concerns that the project could possibly compromise the financial recovery of the Kannaland Municipality.
There were internal candidates who applied for the HOD position. However, after a thorough and competitive selection process, the decision of the panel was unanimous. That did not mean that Provincial Treasury was not committed to growth within the department, however, they believed that building a strong and independent Treasury would take both time and a combination of internal and external candidates.
Mr Savage responded that they were indeed aware of the Kannaland Council meeting which had been scheduled for that afternoon. Both Provincial and National Treasuries had cited the documents referred to and felt that the project would possibly compromise the municipality’s recovery plan. The Municipality itself was subject to a Section 139(5) intervention in terms of the Constitution and Chapter 13 of the PFMA.
Both National and Provincial Treasuries after thorough review made extensive comments on the InovaSure transaction and came to similar conclusions. Firstly, it misconstrued the nature of the public–private partnership (PPP) regulatory process. Secondly, the procedures for unsolicited bids were onerous. Provincial Treasury was clear that the project would not contribute to the financial sustainability of the Municipality.
Provincial Treasury has an oversight role in terms of the Section 139(5) intervention and should any transactions step outside the bounds of what the intervention was designed to achieve then certain powers were conferred on Provincial Treasury to prevent the transaction proceeding. They would, however, like to assist the Municipality in finding the right model to proceed with its energy security intentions.
Kannaland Municipality would be well advised to take a step back and propose a transaction which would be compliant in managing the risks that need to be managed and the legislation which helps to achieve it.
Section 217 of the Constitution enjoins government to effectively find value for money alongside transparency and other objectives in its procurement transactions. However, the national regulatory framework is relatively weak and does not assist in being able to determine the additional costs associated with the additional objectives in the system. The Supply Chain Management Reform Strategy helped to align the objectives through the institution of core technology systems through commodity-based procurement initiatives.
The Integrated Financial Management System (IFMS) was a National Government initiative which had been relatively delayed. It would be integrated into the existing legacy systems of government. Provincial Treasury was taking a sort of risk-adjusted approach in terms of the IFMS where they continued to use what they called the ‘Evergreen Legacy Systems’ so they could continue using them productively in building additional modules on top of the core databases. The e-procurement solution was one such additional system which would ensure they stayed in lockstep with whatever emerged in the IFMS environment. Programme 2 being a challenge importantly did not affect the outcomes in terms of the non-financial targets.
The workshops offered bespoke training and support to municipalities where they aggregated them together into learning and dialogued with them around particular challenges which typically were identified, be it strategic or technical in nature. A technical report was prepared and tabled in the Municipal Councils, where their budget and plans were presented.
The Western Cape Government was very proud that the JDMA was an articulation of the District Development Model, with the Western Cape being far ahead of the rest of the country as it started JDMA a number of years earlier. Provincial Treasury was proud of the MERO and PERO as both publications were unique in the South African environment and they were excited by how much further it could be taken in the upcoming year. There was a very complementary relationship between the service providers and their staff, where they did not need to keep a standing capacity but could rather contract in for some of the work. They received extremely complimentary feedback and they are currently in the process of conducting an impact survey at a qualitative level. On the release time for the MERO and PERO, the budget process was quite congested and time circumscribed. For the next financial year budget process, Provincial Treasury was well aware that they needed to pull the timing forward to allow the MERO and PERO to play a greater role and have bigger impact on the overall budget process.
On digitization, they were constantly experimenting within the digital environment as it was a key factor in their strategy going forward. Currently, they were doing a qualitative survey on the utility of the documents and the impact it had in the Treasury environment.
Ms Julinda Gantana, Deputy Director-General: Governance and Asset Management, Western Cape Provincial Treasury, replied on value for money that one needed to be mindful it was not just about achieving the lowest price but about getting the right quality in the right quantity at the right time from the right supplier at the right price. Based on the benchmark prices from National Treasury, Western Cape Government could be fairly comfortable that they got value for money in terms of purchasing power. While a lot was done on public participation in the Western Cape, there was always room for improvement, especially on the JDMA from a budgetary point of view.
Mr Isac Smith, Chief Director: Asset Management, Western Cape Provincial Treasury replied that they have made sure that when students received bursaries from other institutions like NSFAS, it would work in conjunction with them where NSFAS would cover the accommodation while the Department covered the fees and textbooks.
Ms Naadia Ismail, Chief Director: Strategic and Operational Management Support, Western Cape Provincial Treasury, replied that logic would dictate that if they were doing their work well, the number of queries should have been less. However, it not only dealt with problem areas but also gave support to suppliers. What happened with Covid-19, was that they improved their systems and certain deficiencies which required paperwork, had now been automated and this allowed for the electronic acceptance of documentation. However, they still needed to straddle the burden of the audit as they required the original documentation at that stage. They preempted that post August, when lockdown regulations were relaxed, the suppliers would go to the centres to hand in their original documentation.
Mr Aziz Hardien, Chief Director: Financial Governance and Accounting, Western Cape Provincial Treasury, replied that they realized that for change management to be effective they needed to make an investment in the municipalities. While all municipalities signed the MOU, not all could provide evidence for what they had used the money. The five municipalities mentioned on page 114 of the Annual Report could not provide evidence for what they had used the money.
Any grant given by Provincial Treasury went through vigorous external and internal auditing, so whilst they may feel sorry for those municipalities, the municipalities still need to provide evidence for what the money was being used. Beaufort West and Laingsburg were the only two municipalities which had qualified audits in the Western Cape in 2018/19. They had thus written to Laingsburg, Beaufort West and Knysna to ratchet up the support which Provincial Treasury gave those municipalities to achieve a good audit. They were asked to inform Provincial Treasury about all their Audit Steering Committee meetings. Provincial Treasury had committed to supporting those municipalities.
Mr Van der Westhuizen asked if Provincial Treasury believed that the Gambling Board and its reporting was more in line with that of the Department of Economic Development or Treasury.
Ms Nkondlo, with reference to the targets asked what the subsequent outputs were of those particular activities. She was interested to see the correlation between the target and the actual achievement of that target. With regard to Kannaland, 31 July fell outside the annual year end reporting period of 30 June. What considerations were made in deciding if that money fell into the current financial year?
Clarity was sought how vacancies would be dealt with as it seemed to be a problem and even unions were asking why vacancies were not being filled. She asked what the rollover policy entailed, taking into account that Covid-19 had left a lot of municipalities unable to fully utilize their allocations or meet the conditions prescribed for the spending of the money.
She sought comment on the procurement matter which had been raised on page 77. She asked if Provincial Treasury had made comments the National Treasury and if they could be shared with the Committee. On page 78, she asked how Provincial Treasury was going to deal with the longstanding irregular expenditure and what were the allegations circulating on the irregular expenditure in municipalities.
On page 25, she asked if there is a Director of Infrastructure in the Provincial Treasury. She asked what some of the challenges were for the economic recovery plan and it being centered around infrastructure. She asked for the Provincial Treasury viewpoint on the financing for infrastructure.
The Chairperson noted the letter of demand by Mr Anton Bredell, Western Cape MEC: Local Government, Environment Affairs and Development sent to Kannaland Municipality to cease the InovaSure project. He requested all relevant documentation from Provincial Treasury, Local Government and the Kannaland Council’s resolutions be forwarded to the Committee.
The Chairperson proposed that perhaps the Committee should visit Kannaland to deal with the matter as there seemed to be no consensus on the factual matter of the project and its legality.
The Chairperson was of the view that when it came to policy, and programmes and even legislation, programmes were meant to capacitate. Similarly, legislation should provide incentives and capacitate opening the field and a pathway in finding solutions, it was by no means meant to punish. It was proposed that Mr Maynier consider coming up with a plan on how to decrease the number of walk-in queries without compromising the capacity of small businesses.
On the assistance being given to Beaufort West, Laingsburg and Knysna, the Chairperson recommended that the weekly concerns from those municipalities be compiled and the Committee be given a monthly report on those matters. Those municipalities were in a vulnerable situation and needed extra eyes kept on them, otherwise the cycle would continue into the next financial years.
With the country and the global move into the digital age, it was proposed that National Treasury as well as the Auditor-General be invited to explain to the Committee how they would be assisting businesses and entrepreneurs in terms of procurement and submitting documentation digitally. The handing in of physical documentation and having to drive to the Department to hand in documents impeded many suppliers.
Provincial Treasury response
Mr Savage replied that a process was underway to amend the Financial Recovery Plan. The current plan would remain in place, but the Municipal Financial Recovery Service at National Treasury was currently reviewing the plan to look at possible amendments.
On the Gambling Board, Mr Savage replied that a significant revenue source for the Province came from gambling, which happened also to be a specialized area of regulation. They were guided by the Provincial Policy but there were continual reviews given its complexities as well as the litigious nature of this matter of regulation. It would most probably be raised during the review if oversight of the Gambling Board was best placed in the Provincial Treasury or another department.
Any measure, performance or outcome which starts to become a target actually ceases to be a good measure. What they did was to be systematic in the development of their targets in monitoring their achievements and then reflecting once again whether their theory of change took hold in a particular area of the department. He affirmed that extensive comments were made on the InovaSure matter.
On the PPPs, Mr Savage replied that in terms of the reports and the provider who provided the information, there was currently a review process underway.
Mr Savage explained that the infrastructure booklets were referring to the updating of the Overview of Provincial and Municipal Infrastructure Investment which they tabled along with their Budget documentation in the Second Adjustment Budget recently. The responsibility around PPP regulation, enablement, infrastructure monitoring and reporting fed into the National Infrastructure Reporting System.
On the Premier's Speech, he affirmed that there was clearly space for the institutional environment to be modernized for infrastructure provisioning. Infrastructure was the key element in not only the Western Cape's recovery strategy but for the country’s recovery strategy as whole.
Ms Gantana replied that they did quarterly cabinet submissions which included: initiatives, support initiative to municipalities and the quarterly expenditure. She said before it provided the documents to the Committee, it would be prudent for the Executive to be notified of that.
Mr Hardien replied that it had taken a long time to delegate authority to condone irregular expenditure to Provinces; however, that authority did not extend to municipalities. National Treasury had issued Circular 68 which detailed the process for dealing with irregular expenditure.
Provincial Treasury was ensuring that across the 28 municipalities, irregular expenditure was being handled through the correct process. Unfortunately, they did not have the authority to deal with irregular expenditure and were limited to Provincial Treasury’s responsibility in terms of both the PFMA and MFMA where they monitored expenditure on a quarterly basis.
A separate programme dealt with inconsistencies in laws and regulations and much of the irregular expenditure emanated from the Auditor-General saying one thing and the client saying another. It found itself continually on the agenda between Provincial Treasury and the Auditor-General.
Mr Steve Kenyon, Chief Director: Local Government: Public Finance, Western Cape Treasury, stated it was always worth noting that rollovers were governed by the legislation that the current Committee processed. Section 10 of the Provincial Appropriations Act governed the rollovers and aligned it to Division of Revenue Amendment Act (DORA) Public Finance Management Act (PFMA) requirements. A key phrase was that rollovers be set to a default that any unspent funds at year end revert to the Provincial Revenue Fund. The obligation was that if the funds were unspent, they should be paid back to the Province. However, it allowed Provincial Treasury to approve the rollover of funds which allowed municipalities to retain those funds and spend them as required.
In August 2020, Provincial Treasury was able to approve about R221 million in rollovers – mainly housing and disaster grants. They were able to approve about R97 million in October as well. The rollover process was still ongoing and has not been completed as yet. Reasons were provided in writing to municipalities who were not granted rollovers and they were given the chance to appeal.
Mr Anthony Phillips, Chief Director: Public Policy Services, Western Cape Treasury, replied that Provincial Treasury was in active engagements with the Local Government Department and municipalities and entities to achieve an almost integrated process across all Treasury units.
Western Cape Gambling and Racing Board (WCGRB) Annual Report
Mr Maynier introduced the WCGRB Annual Report 2019/20 and the Chairperson tabled Parts A and B of the Annual Report. Members were reminded that Parts C&D would be dealt with in Standing Committee on Public Accounts (SCOPA) at the beginning of 2021.
Ms Nkondlo referred to pages 5 and 6 which indicated the Board had reported R27.9 million on their corporate social investment (CSI) initiatives. She asked what it had been spent on.
On illegal activities and punters, she apologised for her lack of gambling knowledge and asked for an explanation of the concepts and how many cases ended up with law enforcement agencies or being prosecuted. What happened to the machines once they were confiscated?
Mr Van der Westhuizen asked for the difference between the Type B and Type C payout machines. He asked for more information on the criminal side of gambling as more often than not gambling continued to be linked to criminal activities and individuals having gambling problems.
He appreciated the honesty by the CEO on their 28% audit fee increase, 20% increase on computer licence fees and the annual report indicating they had moved to new office premises. What was evident was the Western Cape Gambling Board was striving to make its books balance – something high on its agenda. However, how would the CEO deal with such excessive increases and if there were plans to address that. He sought clarity on the Board vacancies and nominations process and how they could speed up the process – especially since the annual report mentioned that the composition of the Board resulted in it sometimes struggling to be quorate.
He asked how the Board intended to manage the shift from conventional to online gambling including the impact it could have on the future regulation of gambling. With reference to page 38, he asked how sure the Board was that the current year’s performance would improve given that December marked the start of the festive season after a relatively low performance percentage.
The Chairperson referred to pages 6, 23, 28 and 43 which dealt with the Gambling Board's Programme 3 Regulatory Compliance. He proposed that the Committee be allowed to attend a compliance site visit with the Board.
The Chairperson asked Provincial Treasury about the Board's mandate and if the Board should engage in harm reduction programmes. He asked the Board what its vision and mandate was.
Mr David Lakay, WCGRB Chairperson, replied that the R27.9 million mentioned were the contributions made by the licensees. Each licensee had to participate in CSI as a requirement. The contributions made by the licensees came from their profits. The Board played an oversight role over the licensees. Quarterly reports were received. Depending on which region was being visited, there was actual interaction between the Board and the licensees.
Provincial Treasury would trigger a process for board recruitment and eventually the Minister would submit his nominations to the Cabinet. There was very little the Board could do to speed up that process. However, Treasury did interact with the Board on the process where necessary.
Online gambling was illegal in South Africa whilst betting which took place online was completely legal. There was often confusion about the term used in the industry. Illegal operators referred to casino gambling – which was being offered online by illegal operators. Individuals needed to visit a licensed physical casino if they wished to play at a roulette table or use a slot machine. Betting on sporting events and various other types of events which were offered by bookmakers were legal.
Communication would be put out to alert people on what was legal and what was not in the gambling industry. It would serve to educate the public on the correct usage of terms and protect individuals.
Due to Covid-19, the industry had been severely impacted. Fortunately thus far it had led to no job losses, however there had been revenue loss and profit reductions.
Mr Robin Bennett, HOD: Regulatory Compliance, WCGRB, replied that the Board itself conducted the investigation to determine if the allegations were indeed true or false. They would then inform SAPS in that area. They would discuss if they needed a warrant or if circumstances allowed them to just remove the machines. Once the machine and data has been confiscated, the person would be arrested, and the machines would be put into evidence. If the person was found guilty in court, the machines would then be forfeited to SAPS who would send the machines back to the Board. Once Provincial Treasury was notified, and funding to destroy the machines was approved, the machines would be destroyed.
On responsible gambling, the Board assists people who wish to be excluded due to a gambling problem. Once the forms had been filled out, within seven days all operators would have been notified about the person to be excluded, after which the individual would be notified. Third party exclusions would have to be done changing the status of an individual. They would have to make an application to the High Court. There have been very few third-party inquiries to date. The Board has not had any reports recently. However, recent discussions about GBV have led to research being conducted to establish if there is a link between GBV and having a gambling problem. They looked forward to the outcome of the research.
The Board regulated all gambling advertisements, whilst advocating for responsible gambling. All advertisements needed to be approved by the Board. It ensured that the message conveyed was to an audience where the majority were over 18 years old. The toll-free number had to be indicated on all advertisements with a message about responsible gambling.
Mr Primo Abrahams, WCGRB Chief Executive Officer, replied that the South African Responsible Gambling Foundation (SARGF) now housed in Johannesburg dealt with and ran the programmes. SARGF was actively going into communities and speaking about gambling problems. SARGF also requested that they joined the Board on their awareness programmes to assist the public with their gambling problem. He explained that they were not paying for the new premises as it was being provided to them by the Department of Transport.
Ms Zoe Siwa, WCGRB Chief Financial Officer, explained that the Board tried as far as possible to contain their costs. With the recent pandemic, they had to identifying expenditure items they could save on such as travel costs as they were not allowed to travel during lockdown. Unfortunately, as is the case, often there would be unexpected costs which were unforeseen. However, they always reported on actual expenditure versus projected expenditure and significant variances.
The main challenge currently was to get the Board to become self-sufficient. However, until Western Cape Nineteenth Gambling and Racing Amendment Bill has been passed, the Board will continue to have gaps in the Act such as the exclusivity fee for license operators. Until the Bill was finalised, the Board would remain dependent on a government grant to balance the budget.
Mr Abrahams replied that online gambling did not phase them to a great extent. There continued to be a loyal base who preferred the conventional brick and mortar establishments than the online platforms. The younger generation seemed to be the ones more reliant on the online platforms. Once lockdown was over, they would be able to make a comprehensive analysis about online versus conventional gambling.
The low percentage in performance review was a result of the current financial year and the events which had taken place. Another factor was that they had moved their performance to run in line with the actual financial year and in that particular year, unfortunately, a new HR Manager had been appointed which led to problems in the mechanisms available for the review to be on time.The problem would not occur again going forward and they apologized for that.
Mr Savage replied that harm reduction in the Provincial Policy on Gambling was the framework legislation which tried to achieve the balance between gambling economic benefits and potential social harms. It was a relative conservative approach, precisely for the fact that it found itself within a highly regulated industry. That was why they had a dedicated regulator to be able to look at those issues in an integrated way with the range of instruments available to both the economic and regulatory sector to mitigate the harms. The policy on licensing was so framed to inherently limit access to gambling as was the case with many regulated industries. It was essentially a fine balancing act and to achieve that the Board was established as an arms-length regulatory industry to take the full range of matters into account.
Mr Anthony Phillips, Chief Director: Public Policy Services, Western Cape Treasury, explained that there was a subsidiary set of regulations which governed both advertising and the appointment of members to the Gambling Board. The Board comprised of seven members, each bringing their own diverse set of skills which would help regulate the industry. Once the adverts are released and nominations are completed, the nominations are taken to the public and put through a scrutiny process. The applicants have to display that they are fit and proper. Thereafter, they are interviewed, and the recommendations forwarded to the Minister to nominate a specific candidate to the Board. Obviously, there were flaws in the process, however there needed to be a rotation and continuity of a mix of skills comprising both experienced as well as new Board members.
They were looking at rewriting the legislation in its entirety. The piecemeal approach to what they wanted to change in the Bill that was before the Committee, was not working. In the opinion of Provincial Treasury, the entire legislation needed to be rewritten to give effect to those changes.
Mr Lakay replied that harm reduction fell under the responsibility of the Board as far as compliance was concerned. They needed to ensure that all their processes were in place. Due to Covid-19, Board members attended virtual conferences where problem gambling and harm reduction formed part of the agenda.
The positives of the gambling industry such as its significant contribution to the fiscus should not outshine the gambling problem scenarios for some individuals. There needed to be a balance and that was where they worked very closely on their awareness programmes. The Board regularly attended responsible gambling forums to give input and deal with the cause of the negative impact of the gambling sector.
The Chairperson told the Committee about her meeting with the Office of the Speaker on whether the Committee could request a third legal opinion on the 19th Gambling Amendment Bill. The feedback was that Committee had enough information from two legal opinions and it did not believe that a third legal opinion would assist the Committee.
Mr Van der Westhuizen stated that bringing in a third legal opinion may be difficult given the current situation. However, he was of the opinion that engaging a little bit more on the matter could help the Committee find common ground and therefore assist the Committee in moving forward.
Ms Nkondlo asked if the Committee could pursue a third legal opinion against the advice given by the Speaker's Office.
Mr D Mitchell (DA) said a proposal had been made and guidance was given by the Speaker's Office. The Committee should now reach a point where it can move to a discussion on the matter.
The Chairperson suggested that perhaps they hold over the resolutions until the next meeting where everything could be dealt together.
The Committee accepted the proposal to deal with the resolutions in the following meeting.
The meeting was adjourned.
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