SA Tourism Q3 2023/24 Performance; Introduction of new SAT Board Members; with Minister

Meeting report

Introduction of new SA Tourism (SAT) Board Members

The Chairperson said the newly appointed board members of South African Tourism (SAT) would have to understand good governance as there’s been no improvement in running the entity. In fact, operations worsened. Black excellence and unhappy staff members were purged yet when the Minister said she appointed people with expertise it signaled improvements. In a warning to new board members about the importance of honesty, she said each member would be accountable to Parliament, the Executive, and the Department which would enable Parliament and the Department to help SAT to improve where it could.

The Department and SAT would appear before Parliament only after the Auditor-General (AG) presented its findings. Governance at SAT was a priority for the Committee because it was unacceptable to find the Acting Chief Executive Officer (CEO) simultaneously in the role of Chief Financial Officer (CFO) which was like being a referee and a player at the same time. It only served to highlight the danger of bad governance.

Half of the Department’s budget was allocated to SAT yet SAT had projects which demonstrated no value for South Africa or the tourism sector. The Tottenham Hotspurs project, for example, which the Committee ended for precisely this reason, could be cited.

The Minister of Tourism, Ms Patricia de Lille, presented members of the board and the CEO of SAT to the Committee, saying although the process took longer than anticipated, the appointments were still in accordance with instructions from the AG and the nine new members of the board complied with stipulations of the Employment Equity Act and the Tourism Act. She told the Committee the Department planned engagements with the board to discuss matters related to the Tourism Master Plan; Stakeholder Engagement; Parliamentary Rules and Procedures; and Drafting a Service Level Agreement (SLA) for SAT, which was expected to be finalised in early April. The discussions were also about staff morale which had been very low, and about grievances and disciplinary procedures. It was agreed that board meetings should be held quarterly, and a departmental representative would brief the Director-General (DG) and the Minister monthly.

The CEO had been appointed for a period of five years and this appointment, together with the CFO’s, was assessed by an external agency and the results were sent to Cabinet.

Committee Members were happy with the gender representation saying a fair number of women were appointed to the board.

SA Tourism Q3 2023/24 Performance
Speaking on internal processes, the Chairperson warned it was unacceptable for the presentation to be made to the Committee late as Members have to study reports 72 hours before the meeting. It also seemed SAT’s disciplinary procedures were unlawful as a hospitalised employee was dragged to appear before its disciplinary committee.

Ms Nombulelo Guliwe, Chief Executive Officer (CEO), SAT,  reported the entity met 89% of its targets including 63% of its Key Performance Indicators (KPIs) in the Corporate Support Programme.
Other achievements included the Corporate Compliance Campaign or Operation Clean Audit as it was named, which was implemented along with Planned Milestones. The unavailability of project team members meant one of the planned meetings was not convened but this was corrected in Quarter Four (Q4) as recruitment plans were underway to factor in women in senior and top management positions.

In the 2022/23 recommendations on Risk Management Maturity Assessment Report, targets were not achieved and there were capacity constraints within the Business Unit.

Speaking on the percentage of People with Disabilities (PWD) employed in SA Tourism, Ms Guliwe said voluntary disclosures continued to be a challenge but Q4 demonstrated an improvement.

Other targets not achieved related to an 8% vacancy rate in the staff complement ending the quarter on 17%. Overspending in this programme was attributed to non-cash items such as depreciation and amortisation.

Another missed target was the goal to improve its rating in the Best Company to Work for Survey or its equivalent which was not achieved because of delays with the project. A project management approach would be undertaken to meet due dates for the planned deliverables in Q4. Spending on research was also delayed and was set for achievement in the following quarter.

The Leisure Tourism Marketing Programme (LTMP), the Business Events Programme (BEP), and the Tourist Experience Programme (TEP) achieved 100% of their planned targets for Quarter Three (Q3). The cumulative overspend variance in the LTMP was attributable to higher unrealised foreign exchange transactions. The variance in the TEP was due to underspending in Assessor Training which would commence in Q4 and the spending on BEP in the year to date aligned to the budget. Further expenditure for Meetings Africa would be incurred at the beginning of Q4.

(For full presentation, see attached)

Discussion
The Chairperson wanted clarity on what SAT meant by capacity constraints within the Business Unit; she asked why people living with disabilities were encouraged to disclose this, questioning if it was because the Department had to recruit disabled persons; at the last meeting, the Committee asked SAT to declare if it complied with legislation on the matter because LGBTQ persons also have to be recruited; she asked why invoices were not paid within the stipulated 30 days as this was against the law and could result in litigation which should be avoided; and asked why figures on board meetings, including remuneration of board members were not presented as the Committee knew board meetings were tallied at over 33 which was considerably more than the Act stipulated.

Ms Guliwe said capacity constraints stemmed from the moratorium blocking SAT from recruiting people and this impacted deliverables. SAT approached the board to determine if critical posts could be filled. There was an approval currently placing the vacancy rate at 14%, 3% less than the initial 17%.

Details about the content of the meetings, the number of board meetings, and the quarterly fees of board members would be sent to the Committee.

As far as payment of invoices went, she said a full report was sent to the Board and the Minister and a letter that was sent to Minister de Lille and linked to valid and complete invoices.

Dr Mzolisi Toni, SAT Board Member, said South Africa started working on disability matters in the early ‘90s and it was an emotive issue. At the United Nations (UN), people speak of persons with disabilities but the term we employ in South Africa is people living with disabilities. He encouraged employing disabled people and said the White Paper on the matter was approved in South Africa in 2015 and many disabled people could be employed and must not be forgotten. The challenge was around having access to the environment. For example, when he struggled to find his bank card at Nedbank, he was unable to process his financial documents because he only had one thumb. He had an account at First National Bank (FNB) as well and ended up doing advocacy work there because the FNB processes were not limited by this, as was the case with Nedbank.

Ms P Mpushe (ANC) said the appointment of a new Board would bring stability to SAT. One member of the board was living with a disability, and this would assist SAT in recruiting people living with disabilities and meeting targets. She asked SAT to elaborate on its recruitment measures and said it was good to hear the Department would be informed by a departmental representative on board matters on a monthly basis.

Ms Guliwe said the only reason SAT had fixed-term contracts was because there was a moratorium in place and certain projects were delayed because there was not enough capacity within the organisation. While dealing with these capacity issues, the organisation was unable to recruit staff for vacant positions on the organogram, but SAT had a recruitment plan in place.

Ms H Ismail (DA) wanted to know why project team members were not available for planned meetings on the Corporate Compliance Campaign; asked the Committee to be forwarded a progress report on the Best Company to Work for Survey; and sought clarity on what would happen to the remainder of the budget for the Visitor Experience Programme because 63% had already spent with 100% attainment of targets.

Ms Guliwe referred to details in the main presentation discussed under Programmes Three, Four, and Five which resulted in 100% of targets attained and said project team members were not available due to the shortage of numbers in human resources. She explained the model the board had was based on cost recovery with assessor fees and indicated a document on this would be sent to the Committee.

Mr A Matumba (EFF) asked about the representation of youth on the board, considering there were no persons under 35 years of age; asked about geographical location of Board Members; asked for a detailed report on the appointment of the CEO and CFO starting with the advertisement process, shortlisted candidates, and memo sent to Cabinet; asked for an update on the Tourism Marketing South Africa (TOMSA) levy; asked why the digital strategist was suspended although he produced good work and there was nothing in writing suggesting intent to suspend him; said it was against the law to ask people living with disabilities to disclose disability status, suggested the matter of the hospitalised employee who was asked to attend a disciplinary meeting be investigated. This has never happened anywhere in the country; said the matter of a person who took a bribe should have been tackled by human resources instead of bringing it to Parliament; asked why the Budget for the Summer Campaign was cut as it resulted in creating 400 jobs; said all decisions taken by the former Chairperson of the Board were illegal because there was not a single Gazette on the appointment of Mr Tim Harris and he acted as a Chairperson before he was gazetted. It was not true that the Special Investigating Unit (SIU) was investigating the SAT. Instead, it was SAT who requested SIU to conduct investigations and said it was strange the CFO was appointed as CEO when there were complaints of abuse from staff, yet the organisation was involved in the Best Company to Work for Survey.

Mr Victor Tharage, Director-General, National Department of Tourism (NDT), reported there were members of the board from provinces such as Mpumalanga, KwaZulu-Natal, Western Cape, Gauteng, and Eastern Cape and identified geography and skillset or expertise as important considerations saying it could not be found and that a report would be sent to the Committee on this. Of all the positions, only two remained and no one fell under the category of youth.

On gazetting, he said it was not an element of interpretation. The initial Gazette name was Mr Zwelibanzi Mntambo but a correction was made and the name which was printed in the correction was Mr Harris’s. The question was one of interpretation. He said the Auditor-General (AG) would reply to this in the final audit as he was not in a position to make any judgement except to say there was a correction made in the Gazette from the day it was gazetted. The person whose name was gazetted nullified the previous name and the new person was the one who would execute functions associated with the responsibility of the Gazette. A legal interpretation was necessary.

Ms Makhosazana Khanyile, Chairperson, SAT Board, said internal investigations would be prioritised and the board would be able to answer to this once it convened.

Ms Guliwe said it met the CEO of TOMSA for the approval of the allocation and it confirmed there would be more allocations than the previous financial year.

Ms Bronwen Auret, Acting Chief Marketing Officer, SAT, explained the Summer Campaign proceeded in the previous year but in a different format due to the late release of funds. She confirmed 360 jobs were created.

Mr H April (ANC) said he was thrilled to hear of the new board because it played a pivotal role in promoting tourism in SA. The Committee wants to respect SAT and expected the same respect in return. He said he was unhappy with the Corporate Support Programme and would like to see improvements; he asked for an explanation on the support given to programmes with a 100% achievement rate on targets; wanted an update on Shot Left; asked for clarity on why there was not a single Coloured person in the top management structure; asked why 35 foreign nationals were in the employ of the organisation, and asked if it was necessitated by the too-wide skills gap where no Black people were available. Finally, he said the wife of the head of the hub in America was renting out property to SAT in the United States (US).

Ms Guliwe acknowledged the allegations about the US hub and said some of these issues were being addressed in the internal audit, including the matter of the seconded person. Internal audit reports would be disclosed to the AG. The board did not have numbers on Coloured people, she said, but the numbers were not high and there was an opportunity to correct things because the approval to recruit was in place. Local people were hired and there were vacancies at management level. Further, if one considered professional jobs, approvals would change the way the profile appeared.

Ms Aurent said Shot Left had a few strategic campaigns during the year which were successful and the Easter Campaign would be the biggest one with a target of 3 million trips. Then there would be the Travel Campaign in September and there would also be smaller campaigns during the year for Valentine’s Day and school holidays.

The Chairperson said the CFO’s report on invoices should be submitted to the Board and Minister. She asked the report to be shared with the Committee, saying Members raised many concerns and some would need a day to discuss it with SAT and to address other questions which called for the Minister’s response.

The two person Board made bad decisions and resolutions taken were not shared with the Committee, leaving the board to inherit delayed transformation, lack of support to Small, Medium, and Micro Enterprises (SMMEs) in the tourism industry, lack of job creation, instability and lack of strategies to market South Africa domestically and abroad.

The internal audit committee seemed not to exist as these problems were allowed to fester. The AG report highlighted these issues and made recommendations but she said the new board needed to take decisive action because it had not made any decisions on the appointment of the new CEO and CFO and very soon executive positions would be filled.

The board should not allow matters to proceed further than the present position because Board decisions might be undermined or not be implemented. The Committee’s decision was for all executive positions of the entity to be executed by the new board and it further recommended the appointment of the CEO and CFO to be held back until the new board was in place; this was overlooked by the two-member board. She advised the board to stick to the principles of the game instead of aligning itself with politics.

There were situations within the entity where women were chasing other women away from senior positions, which should not be happening. Women should support each other instead of trying to satisfy the status quo which can come and go.

She said the Summer Campaign was a programme which turned the tide in the country on job creation and participation of young people in the tourism sector. However, the person who was appointed by the previous CEO to drive the programme did not seem to be favoured by the current CEO. The Summer campaign was left to crumble.

There were certain people whose invoices were not paid because these persons had once been appointed to investigate conduct issues by the current CEO. These matters reached Committee Members through emails, and there was no action, so they decided to call the DG and Minister about it instead.
The new board had the important task of assuring staff about the healthy environment it was going to work under but allegations of abuse and favouritism which happened under the current CEO to the extent that people were not attending the entity’s committee meetings, were disturbing.

Further, she said there were investigations within the entity which came through a whistleblower. The SIU report about SAT was exonerating people. The two-member board had its own agenda because it wanted to achieve its mission but insisted on an investigation.

The issue of a bribe was not a case because the employee made a declaration on the matter to the then Acting CEO who refused to approve the declaration. Now, the new board was dealing with people who were presiding over a disciplinary committee, forcing a hospitalised employee to present himself/herself. The board should arrest this behaviour.

The AG presented Information, Communication and Technology (ICT) challenges within SAT to the Committee and said a highly qualified employee made improvements in this regard but because a certain individual in the entity did not want him or her, this employee was suspended without following due process. The Chairperson wondered if the entity wanted improvements or to settle scores. These were the matters the new board should discuss and resolve. At some point, the Portfolio Committee decided that no funds should be transferred to SAT by the Department. This Committee's decision was informed by instability within the entity, yet there was stability in finances when the previous Acting CEO, Ms Nomasonto Ndlovu, was in charge.

The Chairperson said she was raising these matters so the new board could be decisive in taking action and making decisions for the betterment of the entity. An investigation was being conducted into the dome facility for no apparent reason. The Portfolio Committee asked the CEO, the person presiding over the purchase of the dome, who was the CFO at the time. The then CFO was present at the meeting when the Committee raised the question and said there was an investigation into the dome which she was presiding over. She said this was a contradiction and that the leaders of the entities and departments were overlooking the Portfolio Committee's recommendations.

There were those who wanted their own people in place yet these people would not be doing anything. The head of hubs was getting chased because of this and while the country was being showcased in a good way, it was done for nefarious ends by people in authority. One example was the head hub of China which was based in South Africa (SA) but would go to China when he heard the Portfolio Committee was visiting and boldly told the Committee he was operating from SA. She wondered how the hub in China was going to market South Africa when it was run by the Chinese and advised the new board to download the Committee’s Announcements, Tablings, and Committees (ATC) reports to familiarise itself with what was happening in the Portfolio Committee.

The AG report documented the challenges the Department of Tourism faced and the Portfolio Committee pushed the Department to address these challenges. There was nothing to stop SAT from achieving what the Department had, but the two-member board brought back bitter people who had resigned from senior positions. It was a digression of the highest regard.

The board had to look at AviaDev, a platform dedicated to growing connectivity throughout the African continent. It was hosted in South Africa twice but had been taken to Rawanda, and no one knew why South Africa no longer hosted it. The Portfolio Committee asked SAT to investigate what went wrong.
Brand SA was said to belong under the Department of Tourism as one of its departmental entities, according to the Committee. The Grading Council believed it should be an entity on its own and have its own CEO, which was another issue raised in previous meetings and in the present one.

The AG had stopped Joint Marketing Agreements (JMAs) with the private sector because it seemed to go against the Public Finance Management Act (PFMA) and the previous board of two members tried to bring it back. The board should look into what the Committee highlighted and bring its report on what was done, as these issues are crucial.

Mr Matumba said there was no error in gazetting Mr Mntambo as Chairperson of the Board. Mr Harris wrote letters and issued instructions even before there was an erratum notice because the Committee made it aware he was not the Chairperson.

Regarding the Summer Campaign, he said the intent was to kill everything that existed from the time of CEO Mzilikazi. He wrote that the Summer Campaign should go on even if there were no funds, as the impression was that there was a Summer Campaign, but it was allocated fewer funds.

The appointment of the CEO and CFO was illegal because Parliament decided to appoint a new Board to oversee the appointment of the CEO and fill executive positions. This Committee report was ATC’d and the two-member board was told not to make any appointments until the Minister appointed a new Board.

Ms Ismail wanted to know if the savings were in Programme Five and if they would be prioritised.

Ms Guliwe said it would not be reprioritising, especially on Q4 and said the Office of the CFO was dealing with the saving which amounted to R11m. The matter was reported to National Treasury.

Ms Mpushe said she was not satisfied with the response on the employment of foreign nationals and asked if it related to lack of skills or expertise in the country or if these staff members had rare skills.

Ms Guliwe said the rule was to recruit South Africans for hub heads but the levels below hub heads were recruited from local employees. There were no foreign nationals in the staff complement of the entity.

• The Chairperson asked the entity to submit the following reports to the Committee:
• A report on invoices to be paid within 30 days
• A report on compliance with legislation in relation to employment of people living with disabilities
• A report on the previous board members, specifically the number of board meetings, and remuneration from day one until the last day
• A revised report on the Summer Campaign because there was no truth in saying there were no funds to run it
• A detailed report on the appointment of the CEO and CFO, including advertisements, resumes of people who applied and were shortlisted, and correspondence to Cabinet.

After this, the meeting was adjourned.