The Committee met in a virtual meeting for briefings by the Department of Sport, Art and Culture (DSAC) and the National Library of South Africa (NLSA) on the entity’s 2022/23 annual report, and to be updated on a whistleblower’s allegations of corruption and victimisation.
The Minister referred to the Springbok's World Cup success, and said rugby had shown that it was only through sport that the people could achieve the nation of their dreams, which was a non-racial and democratic society with a shared and common purpose of being a South African. Progress was being made, and advantage had to be taken of this moment to build social cohesion. He said remarks about the alleged corruption at the NLSA concerned the Department, as it believed in accountability.
The DSAC reported receiving an email on the whistleblower’s allegations and recommended that an independent investigation commission be held. At present, an internal unit is conducting a preliminary investigation. The Department’s presentation covered non-financial performance, financial allocations, audit outcomes, governance matters, the composition of its council, oversight activities, governance engagements, the composition of executive management, and the composition of staff. In the current financial year, the NLSA had achieved 65% of its non-financial performance target indicators, and had received a qualified audit outcome for the third year in a row. The basis for the qualification had been that the Auditor General (AG) was unable to obtain sufficient appropriate evidence that the public entity had properly accounted for heritage assets, as the NLSA did not maintain adequate records of them, and the AG was unable to confirm the heritage assets by alternative means.
The NLSA briefed the Committee on its 2022/23 annual performance plan, detailing what programme targets had been achieved and not achieved. The key challenges were the R10m of outstanding municipal debt and the shortfall in the funding allocation for the Generally Recognised Accounting Practice (GRAP) 103 project, which resulted in delays in the completion of the project. It said some of the whistleblower’s allegations were not new, and the entity had responded to them previously. The NLSA had sent their response to the DSAC in September, and its Board was committed to cooperating in the independent investigation so everyone could be satisfied.
Members were concerned about the entity’s qualified audit report. What consequence management process was being implemented to improve the audit outcomes? What were the challenges with GRAP 103, and was one of them the decrease in the budget? Members asked questions regarding the gender composition of the Board, the entity’s interaction with the recognised unions, governance issues regarding corruption, victimisation and whistleblower allegations, budget overspending, assisting new emerging authors, and handling its outstanding municipal debt. They asked about the steady increase in expenditure on consultants, contracts and professional fees which had risen from R700 000 in 2017 to R122.4m in 2022/23. Were there any intervention plans to improve early literacy skills, especially in underprivileged communities?
The Deputy Minister said she was very worried about the qualified audits for three consecutive years and did not see a mitigation plan to avoid a fourth qualified audit, as they did not have the money to do what the AG was calling on them to do. She proposed that the NLSA put down a mitigation plan to detail what needed to be done to avoid a qualified audit and share it with the Department and the Committee. She commented that the NLSA lacked innovative thinking to get around its challenges.
The Chairperson expressed condolences on the passing of the former South African international soccer player, Bonginkosi Ntuli, and a moment of silent prayer was held.
She appreciated that Committee Members had made the effort to welcome the Springboks back when the team had landed, representing the Committee and supporting the Ministry.
Dr Refiloe Mabaso, Chairperson, National Library of South Africa (NLSA), submitted apologies on behalf of three board members who were unable to attend the meeting -- Mr Khathutshelo Nethavhani, Mr Phuthi Phukubje, and Ms Khanyisile Dubazana.
Ms Nocawe Mafu, Deputy Minister of Sport, Arts and Culture, said that she and the Minister had other Cabinet meeting commitments later that morning, and wanted to let the meeting know that in advance.
NLSA Annual Report 2022/23: Department Overview
Mr Zizi Kodwa, Minister of Sport, Arts and Culture, said he wanted to join in on the message that Nelson Mandela had defined on the role of sports. Rugby had shown that it was only through sport that they could achieve the nation of their dreams, which was non-racial and democratic, with the shared common purpose of being a South African. The South African flag and anthem had been raised on the global stage and progress was being made. Advantage had to be taken of this moment to build social cohesion.
He said remarks about the NLSA were of concern to the Department, and the Department believed in accountability.
Dr Cynthia Khumalo, Acting Director-General, Department of Sport, Arts and Culture (DSAC), said the Department had received the email with the whistleblower’s allegations on 14 August. It had made the recommendation that an independent investigation commission should be held. The recommendation was implemented on 16 October, and an internal unit was currently doing a preliminary investigation.
The NLSA's presentation covered non-financial performance, financial allocations, audit outcomes, governance matters, the composition of the council, oversight activities, governance engagements, the composition of executive management, the composition of staff, and the latest whistleblower information.
In the current financial year, the NLSA had achieved 65% of its non-financial performance target indicators, while 35% was not achieved. The financial allocation for 2022/23 was a total of R116.3m
The NLSA had received a qualified audit outcome for the year and the two years prior to that. The basis for the qualification was that the Auditor-General (AG) had been unable to obtain sufficient appropriate evidence that the public entity had properly accounted for heritage assets, as the NLSA did not maintain adequate records of these assets and the AG was unable to confirm them by alternative means.
She then referred to the Board's composition, the Council’s oversight activities, the executive management team, and the staff complement.
On the latest whistleblower complaint, she said the Department had received an email with whistle-blowing allegations of corruption at the NLSA, which had been requested to provide responses to the Department's queries on these allegations. The responses had been reviewed by a Departmental team. After careful consideration, a recommendation had been made to the Minister to commission an independent investigation to ascertain the veracity of the allegations.
Ms Mabaso said the presentation would address the 2022/23 annual performance plan (APP) and the programme targets that were achieved and not achieved. It would also cover the human resources (HR) and financial information for the year under review.
The NLSA had received a qualified opinion on its audit because of the non-implementation of the revised Generally Recognised Accounting Practices (GRAP) 103 accelerated plan for heritage assets because of funding challenges, and because the annual financial statements were not prepared in accordance with GRAP. The entity needed to implement the revised GRAP 103 accelerated plan, implement bi-annual financial statements, and implement the full GRAP compliance checklist. The overall performance of NLSA was that it had achieved 69% of its targets, and 31% were not achieved.
On Programme 1: Administration, had achieved only three out of the ten target indicators.
On Programme 2: To collect, preserve and protect South Africa’s documentary heritage and render national bibliographic services, it achieved eight out of nine target indicators.
On Programme 3: To provide universal access to information and promotion of a culture of reading, writing and publishing, it achieved all seven target indicators.
Mr Kepi Madumo, Chief Executive Officer (CEO), NLSA, spoke to the annual performance per programme, the vacancy rate of 3.7%, and the equity plan.
Mr Godfrey Ditsele, Chief Financial Officer (CFO), NLSA, said total revenue was R199.4m and expenditure totalled R175.3m with personnel costs remaining the highest cost driver. The key challenges were the liabilities of R10m of long outstanding municipal debt, and the shortfall in the funding allocation for the GRAP 103 project which had resulted in delays in the completion of the project.
Ms Mabaso said some of the whistleblower’s allegations were not new, and they had responded to them previously. The NLSA sent their response to the Department on 11 September, and the Board was committed to cooperating in the independent investigation so everyone could be satisfied.
See attached for full presentation
Mr M Zondi (ANC) referred to the gender composition of the Board, and asked who appointed the Board. He asked the Minister what plans he had to assist in capacitating people to occupy senior positions in the NLSA's administration. What unions were recognised by the entity, what had caused the delays in the recognition of the unions, and what impact did this have on the entity? What was the union's role in the corruption and victimisation issues? Regarding the recommendations made to the Minister, he asked if they included action plans for the implementation of the recommendations of the AG, as one could not have the entity getting qualified audits for the same issues repeatedly.
Mr J Mamabolo (ANC) acknowledged the efforts of the Ministry to support the Springboks. He asked what else the Department was doing regarding Library Week and the promotion of reading.
Ms R Adams (ANC) said the entity had responded to allegations of corruption, governance and whistleblowers. What governance issues have been addressed regarding the corruption, victimisation and whistleblower allegations? Had disciplinary action been taken against people in the whistleblower and corruption cases, and what effect had this had on the organisation? How did the entity intend to mitigate the impact of consequences the organisation might have experienced?
Programme 1 had a budget overspend of R29m, while Programme 2 had an overspend of R11.34m. Was overspending not contravening the Public Finance Management Act (PFMA)? Programme 3 had an underspend of R3.52m. What impact did this have on service delivery? What robust measures could be implemented to hold officials accountable and enforce consequences for non-compliance?
Mr E Mthethwa (EFF) thanked the Minister for invitations to events welcoming the Springboks home, but registered his discontent on how the Members had been treated at the event, as there was no event programme given to them. He said the budget for libraries was worrisome, given the role of libraries in education in general. He said the entity needed to relook at their priorities, and libraries should be built in previously disadvantaged areas. He asked for examples of the business development procurement items. He asked why it was concentrating on training people to understand the space within a library, when these people did not have libraries in their communities. He said the NLSA was not assisting new emerging authors, and wanted to know why not. The NLSA was not talking about schools and high schools, but only about universities. What programme was there to assist authors in publishing their books? He asked if it had a programme with universities to incubate communities that would practically influence community development.
Ms V Malomane (ANC) said she was concerned about the NLSA’s qualified audit report. What consequence management process was being implemented to improve the audit outcomes? How did the entity expect to overcome its challenges? Did it commit to the AG that there would be an improvement in the audit for 2023/24? She said Programme 1 did not meet its target of a 100% improvement in its audit plan. What was their plan to achieve the eight unachieved targets? Were the planned targets rolled over? She repeated Mr Zondi’s questions about the relationship between the unions and management, and the corruption, victimisation and whistleblower cases, and the implementation of GRAP. What were the challenges with GRAP 103?
Mr D Joseph (DA) supported the question on the audit outcomes, and asked how the entity would deal with it going forward. Would the turnaround happen in this financial year, or was there a longer-term plan? How big was the GRAP problem? He supported the question on the National Council for Library Information Services' elections. How long did they need to be in place? How long would the Corporate Services Director post be vacant? Would it be filled or not, taking into account the austerity measures that had been called for? If it was being filled, what processes were underway? He was concerned that there were still allegations regarding the whistleblower, and appreciated the Department’s work and the recommendations to the Minister. He said he had written to the Minister about a leaking roof regarding a project in Cape Town. The Minister responded that it had been fixed, but he had seen that a leaking roof had been fixed for R294 000. Was this the same roof, or was this another leak somewhere else? Referring to the R10m outstanding municipal debt, he asked how long there had been a debt, and what it was for. What link did the NLSA have to the Education Department and its impact on the curriculum?
Ms D Sibiya (ANC) asked if there were strategies to overcome the challenges of the entity's under-achievements. Could it clarify the reasons for not implementing the three activities of Programme 1?
Ms V van Dyk (DA) said there was an invoice for R10m for the water and electricity account outstanding for over three years, for which the entity had requested the Department’s support to pay. What was the extent of the Department’s funding to settle the debt, and when would the balance be paid? She said the CEO had not mentioned the steady increase in expenditure on consultants, contracts and professional fees, which had risen from R700 000 in 2017 to R122.4m in 2022/23. Why was there this increase, and why was there a demand for consultants? Who were the service providers, and were the same people being used? The NLSA had received a qualified audit on heritage assets. She asked the Department what plans it had, as the entity had vast collections that needed to be accounted for in GRAP 103.
The Chairperson asked if the entity would be implementing their plan according to GRAP. She asked the Department whether the entity would achieve its plan. What were the reasons for not meeting GRAP? Was it because of the decreased budget?
The Deputy Minister said the Minister had left, and she would be there for one more hour.
Ms Nokuthula Musa, Director: Core Programmes, NLSA, responded to the questions on what was being done about the qualified audits and GRAP 103, and said there were 3.2m items in the collections. It was very diverse and contained unique manuscripts and maps which required special care. The GRAP project was long and complex. In Phase 1 of the project, progress on sorting the collections stood at 82%. It was now left with the most important task of completing a register. The rare and special collections required a heritage specialist for valuations. It was extremely challenging to get additional resources, as it was a scarce skill and the entity relied on one person. There was also a 1.5m item collection which needed to be evaluated, and the NLSA was procuring the services of a company to do this. It was also getting its own staff on Board, as they knew the collections better than external people. It had numerous meetings with labour. The plan depended on additional funding and the availability of specialist skilled persons, and it currently had a budget shortfall of R3m for this.
Mr Madumo said the NLSA was dealing with the collections of the former State Library and the former SA Library. When they merged, they were using different systems, and when records migrated, some data had been lost, so the whole merger exercise was a manual process, with some items on the shelves but not on the system. When they started the project, it was made clear to the Department that it could not complete the project with the allocation of R32m. The project had also been affected by the onset of Covid.
Ms Jolene Shirley, Acting Director: Corporate Services, NLSA, responded on the recognition agreement with organised labour, and said that it had recognition agreements with the National Education, Health and Allied Workers Union (NEHAWU) and the Public Service Association (PSA). The NEHAWU agreement was signed in 2001 and was the larger of the two unions. The NLSA saw a need to update the agreement and embarked on a lengthy consultation process. The process was affected by the departure of the NLSA board secretary and director of corporate services, but there was no rush to finalise the agreement because the NLSA wanted an agreement that everyone was committed to. A new agreement had been signed in May 2023.
Regarding labour issues, she said there was currently a matter at the Commission for Conciliation, Mediation and Arbitration (CCMA) which would be concluded on Friday.
On the issue of the leaking roof, she said the NLSA’s two buildings in Cape Town were both heritage buildings, and it had embarked on a project to fully assess both roofs to do major repairs to both. It had applied to the Heritage Council and received approval for the repairs, with conditions attached. During the rainy season ad hoc work had been done to the roofs. The incident referred to by the Member had been fixed, but they had also fixed other leaks on the roofs.
Mr Ditsele said that to improve audit outcomes, the NLSA was set to send the internal audit report for the first set of biannual financial statements by the end of the current month. It was implementing the full GRAP checklist on non-compliance, and had a revised supply chain management (SCM) policy approved by the Board, and also developed a standard operating procedure (SOP) checklist. It had established a loss control committee to deal with old irregular and fruitless and wasteful expenditure, and to deal with the consequence management.
He said the debt owed to municipalities for services had approached R10.3m, and it was now left with R3.8m outstanding.
Regarding the use of consultants, he said R4m was related to the management of facilities to assist with maintenance work, including the repair work to the Cape Town buildings and the engineers overseeing the work. This was funded by a conditional grant.
Mr Madumo responded on what other programmes the NLSA presented, and said their programmes had a national focus, while the provinces and municipalities conducted their own programmes. He said there was consensus amongst them on which programmes would include the national programmes. The NLSA celebrated National Book Week by reprinting classic books. Regarding the availability of classic old books, he said the NLSA was trying to bring indigenous language books back to communities.
On the procurement of books, he said the NLSA did not buy books -- it received them through legal deposits.
He said preserving books at the provincial level had been a challenge. In the current system of book procurement, one had to get three quotations and indicate how they would protect the copyright of the author. The Copyright Amendment Bill was currently before Parliament.
On university programmes, he said the NLSA had an agreement only with the University of South Africa (UNISA), but had concluded an agreement with the University of the North West and the University of Zululand to establish a library school. The next reading summit would be held in collaboration with Zululand University.
He said the NLSA and the provincial libraries had different mandates. The NLSA focused on the preservation of books, while the provinces provided public libraries and managers.
Ms Mabaso said the whistleblower allegations had been brought to their attention by the Department and had been difficult to deal with, because the submissions had been anonymous, so it had been a challenge to protect the whistleblower. The NLSA did have a policy on how to protect whistleblowers.
On the NLSA’s mitigation plan, she said the entity had responded to the best of its ability. Most of the allegations were repeat allegations. The NLSA had done its best to deal with questions that were put forward without evidence. It had investigated all the allegations so that it could address any that had credence. It was clear that the whistleblower was not satisfied with the NLSA’s responses. The actions of the Department were very important to the NLSA.
On the question of unions' involvement regarding whistleblowers, he said the NLSA had tried to set up a meeting, but no quorum was reached and it was postponed. The unions were raising the same issues as the whistleblower, so the NLSA had wanted to sit with them to have a collaborative approach to the issues, but the union had escalated the matter to the Department level. She confirmed that with all other matters, the unions were recognised, involved and kept abreast of matters.
Mr Mthethwa said he was not happy with the CEO’s responses, as they did not answer his question about assistance given to rising authors who did not have the capital to publish their own books. He was not interested in preserving Jan van Riebeek’s history, but in the preservation of indigenous history. What initiatives were there to integrate the Fourth Industrial Revolution (4IR) to ensure citizens had equitable access? Was there any intervention plan to improve early literacy skills, especially in underprivileged communities? He said there had been no reference to 4IR in the presentation.
Ms Van Dyk asked when the last meeting for the appointment of the National Council for Library Information Services had been held. The last one gazetted had been on 17 August 2018, and their term would have ended in 2022. Had the Council's term been extended, and had Parliament been informed?
On the 4IR question, Mr Madumo said the NLSA had received confirmation of four programmer interns who would assist in revolutionising information communication technology (ICT) systems in libraries, and he hoped to navigate the 4IR trend through them.
He said the NLSA had formed partnerships with Nal’ibali, which was a resource for inculcating early literacy in communities. The NLSA had concluded a national survey to understand reading habits and patterns.
To assist young writers, the NLSA had a community publishing programme that assessed and evaluated manuscripts. If the manuscript was good enough, then 300 copies were printed for the author to sell and to produce more.
Deputy Minister Mafu said the NLSA had qualified audits because they were unable to do the preservation properly. She was worried the NLSA had two unions which were recognised. Some of the complaints came through the unions, but the entity had been unable to meet with the unions because there was no quorum and the unions had then escalated the issues. This talked to a breakdown in the relationship with the unions. This needed to be investigated closely, and management had to give the Department proof of meetings they had tried to call.
She was happy with how the management had dealt with the whistleblower incident, and their mitigation plan. She was very worried about the qualified audits for three consecutive years, and did not see a mitigation plan to avoid a fourth qualified audit as they did not have the money to do what the AG was calling on them to do. She proposed that the NLSA put down a mitigation plan to detail what needed to be done to avoid a qualified audit, and share it with the Department and the Committee. She said the NLSA lacked innovative thinking to get around challenges.
She then left to attend another meeting.
On the issue of compliance with GRAP 103, Dr Khumalo said the Department had already indicated that surpluses were used to fund a portion of the shortfall, but it could not say they would assist with the shortfall because part of the allegations against the NLSA was the diversion of some of the funds meant for GRAP 103 to other budget items. As NLSA put its plan in place, it was looking at how it could re-prioritise the budget so that at the end of March, it was not in the same position it had been in for the past three years.
Ms Mandisa Tshikwatamba, DDG: Corporate Services, DSAC, said the Department had made allocations to GRAP and to the utility bills, as the NLSA was under pressure regarding the utility bills. It had been given R10m, knowing it was not the full outstanding amount and that they would need to re-prioritise the budget to find the balance of the funds.
Regarding the term of the Board, she said the Board had recently been re-constituted, and its term was set to expire in September 2024.
On the gender representivity of the Board, she said that when it started, the Board had four females out of a total of nine members. One female had left, and the replacement had been sourced from the residual potential candidates, who all happened to be males.
Ms Van Dyk asked when this board process had been brought to the attention of the Committee. Where was the Gazette calling for the nominations -- could it be sent to them?
Dr Khumalo said it was not by virtue of the legislation that dictated matters of that entity.
Mr Vusithemba Ndima, DDG: Heritage Promotion and Preservation, DSAC, said the Department implemented the conditional grant to establish and upgrade public libraries. It had started in 2007/08 with R200m, and had progressed to R1.5b in the current year to date. It established 247 new libraries, upgraded 718 libraries and established 259 mini-libraries for the blind. Regarding 4IR, the current allocation of the library grant made provision for the rollout of ICT programs and gadgets. The Department had partnered with the Gates Foundation to upgrade libraries. The provinces spent an average of R100m on libraries annually.
He said the Department was funding the repeat of the African classics project in collaboration with the NLSA to ensure the availability of the classics in indigenous languages.
The National Council for Library Information Services’ term of office had been extended by one year because it was busy with the review of the NCLIS Act, and its term would end in June 2024.
On support given to authors, Dr Khumalo said the NLSA spoke to a public hub, the Academic and Non-Fiction Authors Association of South Africa (ANFASA), to find a way to support emerging authors.
The Chairperson thanked everyone for their participation. The meeting was about oversight. She appreciated the transparency of the Department. It was important to see the gaps in entities and deal with them. The Department should send formal communication on the extension.
The Committee's minutes of 20 October were corrected to record an apology from Mr Joseph, and were adopted. The minutes of 24 October were also adopted.
The meeting was adjourned.
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