Boxing SA Annual Report 2005/06 briefing & noting of Complaint Against SA Rugby Union President

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Meeting Summary

A summary of this committee meeting is not yet available.

Meeting report


15 May 2007


Chairperson:  Mr B Komphela (ANC)

Documents handed out:
Boxing South Africa Annual Report 2005\06
Boxing South Africa on the Annual Report 2005\06 presentation

Audio Recording of the Meeting

The Committee noted that a complaint alleging deliberate misrepresentation to the Committee had been lodged by Dr Bhorat against Dr Basson. Dr Basson had been asked to respond and the Committee would consider the matter once his response was received.

Boxing SA briefed the Committee on its Annual Report. It was noted that an Acting CFO and new CEO had been appointed, and hopefully this would result in the turnaround efforts already started by the Board being taken to further fruition. Although the Board had tried to instill better monitoring and management, it was hampered by the fact that funding promised by the Department of Sport had still not been forthcoming, and the drop in revenue from Lotteries and declining sponsorship were putting the future development of Boxing SA at risk. Members asked questions on monitoring and the matters reported on by the Auditor General, training and development of financial staff, tracking of lost documents after amalgamation of provincial centres, reasons for the decline in revenue, new sponsorship plans, the Baby Champs programme, and mechanisms to monitor the current assets. The Committee asked what steps were being taken to try to revive boxing and the promotion of female boxing, and commented that the decline of boxing was as a result of bad planning and lack of development. An explanation was sought why the strategic plan and budget were not aligned. The Committee was displeased that the Department had not sent through the promised funding and instructed the Department to resolve the issue, and inform the Committee in writing of the steps taken.

The Department of Sport and Recreation advised the Committee of the changes made to the Strategic Plan following three workshops, and taking into account comments made by the Committee and the role expected of the Department in 2010. All work was aligned with the State of the Nation address and all key role players were involved.

Complaint against Dr K Basson
The Chairperson stated that on 4 April he had received a letter that was addressed to the Speaker by the Secretary of Transformation and Anti-Racism Rugby Committee, Dr A Bhorat. In it Dr Bhorat alleged that the South African Rugby Union Vice President Dr Koos Basson had deliberately misled parliament when he appeared before the Portfolio Committee on 20 February 2007. That meeting had been considering the transformation agenda. Dr Bhorat stated in the letter that he had a valid argument to prove that the statements made by Dr Basson were misleading.

Allegations that a person had deliberately misled Parliament were very serious and Adv A Gordon had advised that the Committee must afford Dr Basson an opportunity to respond. Therefore a letter had been addressed to Dr Basson on 15 May, asking for his comments by 31 May. Once that response had been received the Committee would deliberate further. The Chairperson stated that if it should be necessary to hold an enquiry, this would be done in closed session.

Adv A Gordon, Legal Advisor, Parliament, commented that he Chairperson had outlined the procedure sufficiently, and stated that no investigation could commence without Dr Basson’s comments. It would be correct to let Dr Basson have sight of the allegations by Dr Bhorat. The matter had roused much emotion. He confirmed that, should this be considered desirable after the response had been received, the Rules of the National Assembly did allow for the holding of enquiries.

Mr Frolick commented that the matter should be dealt with as quickly as possible as the allegation related to such a sensitive topic.

Boxing SA (BSA) Annual Report 2005/06 Briefing
Mr Dali Mpofu, Chairperson, Boxing SA, briefed the Committee on the Annual Report. He stated that he had taken the Committee into BSA's confidence when he had outlined some the problems experienced, prior to the Annual Report. BSA now believed that it had turned a corner and would be able to submit the financial expenditure report on schedule. The Board had underestimated some of the challenges, and had realized that problems were worse than they seemed at first, especially given the challenges in staffing. The Chief Executive Officer was suspended in relation to the Annual Report and that action had served to further weaken the organisation. The Auditor-General's staff had been helpful but even with their intervention matters could not be brought to a successful conclusion. This had resulted in negative comments on the financial situation of BSA. The process of appointing a new CEO required BSA to work with both the Ministers of Sport and Finance. However the appointment had now been finalised and the new CEO was ready to begin. BSA had also restructured the provincial offices because it wanted to decentralise the organisation and to have proper representation.

Mr Mpofu tabled the revenue and expenditure statements for BSA, noting that the revenue was set to decline in 2006/7 with removal of funding from the Lotteries and sponsors. BSA had been informed, in March, that it would receive extra funding from the Department, but it seemed as if the process had been delayed by bureaucratic problems, as no additional funding had yet been received. BSA was also having problems with promoters not adhering to the Act.

Mr Mpofu highlighted the achievements for 2005 and 2006, which included the removal of the three-fight rule, reduced licencing fees, rotation of ring officials, the launch of the Baby Champs project and the establishment of a regional office in Port Elizabeth. He outlined the training and development undertaken.
Mr Mpofu hoped the Board, at the end of its term, would be able to leave a better organisation.

Mr S Masango (ANC) was surprised that the revenue figures had dropped by 45%. It seemed that whatever had been achieved in 2005/06 could not be repeated.

Mr Masango enquired when the CEO was going to start.

Mr Mpofu stated that BSA had received the approval of the appointment only in November 2006, but at that time the new CEO was ill. He would start next week.

Mr Masango commented that it was admirable that the BSA was going to submit their financial report on time, and hoped that it would contain favourable information.

Ms W Makgate (ANC) indicated that the Auditor-General’s report was very disturbing regarding the managing of the financial problems. She stressed that there should be a mechanism in place that both monitored the current situation and ensured that problems did not recur.

Mr Mpofu stated that the change of the Chief Financial Officer had resulted in a better situation, as the Board had had to play a more robust role. This had also resulted in the Board being more closely engaged with monitoring.

Ms Makgate asked if BSA would be training and developing financial staff.

Mr Mpofu responded that steps were being taken to train the staff properly and consultants were being used.

The Chairperson noted that the amalgamation of the provincial centres had resulted in a loss of documents. There was no suggestion that the Chairperson was at fault, but it was his responsibility to correct this issue. He asked what steps had been taken by the Board to trace the documents.

Mr Mpofu responded that there was no question that there had been problems. The Board accepted its responsibility and were not making excuses, but merely giving the Committee an idea of the context and the inherited problems. New training had been instituted to try to correct these problems.

The Chairperson appreciated the efforts the Board had gone through to turn boxing around. However, he stressed that all its achievements should not be lost through bad financial management.

Mr Mpofu stated that the quality of boxing had improved. Governance and finance had had to be improved as the sporting side improvements were made. The major problem with revenue was the lack of sponsorship. It was felt that the Department of Sport and Recreation (SRSA) should put more money into boxing, as this would improve the situation and would put the organisation on a more even keel. This would also attract private sponsorship. Provinces would also hopefully assist.

Mr M Dikgacwi referred to the report on the fixed assets and asked what mechanisms were in place to ensure no loss of statements and to monitor the current assets.

Mr Josh Steyn (Acting Chief Financial Officer: BSA) stated that he was appointed on 1 November and had revamped and recaptured the financial accounts. An internal auditor was appointed to assess the progress. Audit planning had been performed over the past twelve days, and the audit should be finished on 4 June. He confirmed that there had been a physical check of all assets and a numbering system had been implemented.

Mr Mpofu reiterated that matters were difficult, as BSA had not received the funds promised by government yet.

The Chairperson expressed displeasure that BSA had not received the funding that the Department had promised. He instructed Dr B Van Der Spuy, Director: SRSA, to resolve the issue immediately. He asked how BSA had paid their CEO.

Mr Mpofu stated that he was paid from the little funds that BSA was holding.

The Chairperson asked that the Deputy Director of the SRSA must write a letter informing the Committee of the steps it had taken in regard to the finances, with a copy also to be sent to BSA.

Mr Mpofu commented that it was both illogical and untenable that BSA, being a state institution, not be given what it required to function.

Mr B Solo (ANC) stated that the report was clear and the Committee could assess the realistic nature of BSA. It must appreciate what had been done thus far. He agreed that it was not realistic to expect an institution of the state to perform to standard if the state did not provide the necessary tools. The Department's lack of cooperation was embarrassing the government. He wanted to know how BSA was going to deal with the issue of lack of sponsorship.

Mr Masango asked if the new CEO would be paid a higher remuneration, stating that employees did not perform well if they were not properly compensated.

The Chairperson stated that the department was obliged to take full responsibility for the salary for the CEO and agreed that such officers must be paid appropriately.

Mr Mpofu stated that they BSA required extra assistance from the department until it could reach a particular level.

Mr Masango also requested the reason why the other revenue had dropped.

Mr L Reid (ANC) commended the BSA on their improvement and asked why the sponsors had left. If BSA had lost those sponsors due to the negative reports from the Auditor-General over the past few years, then it could be assumed that once BSA received a positive report from the Auditor General then the sponsors would return.

Mr Reid asked if BSA had plans to engage new sponsorship.

Mr Mpofu stated that the lottery issue had become problematic, as the funds from this source had already been assigned for training. This meant that BSA had to dip even deeper into its reserves to assist with the training programmes. He stated that BSA was doing a lot to attract new sponsors.

Mr Steyn stated that BSA had approached SABC, specifically the sport and marketing departments, as they had to bring something to the table. When the contract with Vodacom was structured it was a partnership that had entailed a fair division of compensation. A partnership with SABC would envisage that each year BSA would receive R1 million and SABC would receive R8 million. The SABC marketing department would approach possible sponsors.

Mr Reid stated that at the public hearings in Durban the Committee was informed of the fact that boxing in Kwazulu-Natal (KZN) was ruined. He asked if any action had been taken to rectify the situation.

Mr Loyiso Myta, Public Relations Officer, BSA, stated that it was not only KZN that had formerly been perceived as a boxing capital as the Eastern Cape was included in that label. He stated that BSA took the ‘baby champs’ to all of the provinces as they were obtaining increased support.

The Chairperson stated that it was an ongoing concern, as noted by the Auditor General’s report, that sponsorship had been lost, which meant a drop in revenue.

Mr Mpofu stated that if national government assisted more then this would attract sponsors. Provincial government had been supportive. BSA’s popularity had grown already as the crowds were coming back.

Mr Mtya stated that there was a need to differentiate between the two levels of boxing, the development level and the national and international levels. He stated that people were exposed to boxing through television. The reality was that the fights screened on television showed boxers who had already managed to do well for themselves. These fighters had good promoters and good sponsorships. Boxing had declined since the last golden age of boxing because there were no boxers with whom the public could identify.

The Chairperson stated that this was a result of bad planning and lack of development.

Mr Mtya continued that people perceived boxing as a dying sport. The Board was focused on the development stage through the programme ‘baby champs’. He stated that the development stage of boxing was completely dependent on BSA as it was BSA who paid these boxers, and not an outside sponsor. He stated that if the government did not assist BSA with funding then boxing would fade. The ‘baby champs’ would be starting up on 2 June. BSA had a sponsor who had thus far been reliable. He stated that boxing should not only be promoted by way of financing but by promotion of the sport itself.

Mr Dikgacwi commented on the point made by Mr Reid. He stated that one of the issues was that in order to participate in amateur boxing, boxers had to come to the big cities. The smaller areas should also receive recognition. Major tournaments were also limited to big cities, although many of the boxers were from the rural areas. Only a few well-known promoters were involved and he queried where the other smaller promoters were.

Mr Mtya stated that BSA was developing the newcomer promoters as well, and had linked them up to the government. They required government assistance to build the provincial tournaments. The promoters played a crucial role in this development.

Ms Makgate brought up the issue of female boxers and the fact that they lacked promotion and support from the organisation. She stated that for big tournaments female boxers could be curtain raisers and obtain well-deserved exposure. She stated that female boxers required development.

Mr Mpofu stated that BSA were the first to hold a boxing tournament where all the officials were female. BSA had created a regulation for promoters that if female boxers were included in matches or tournament then added incentives would apply.

Mr Mtya noted that the ‘baby champs’ included female boxers. The programme for females had been around for two years. The ‘baby champs’ was all-inclusive, and fights under this programme had gone all over the country. He also stated that BSA had a joint venture ongoing with SABC regarding female boxers.

Mr Solo commented that youth were affected by lack of promotion of sport. He stated that it would benefit society if boxing, in particular, were further supported by the government. He stated that there seemed to be a lack of social cohesion. There seemed to be too many political obstacles when boxing required assistance.

Mr Masango asked for an explanation why it was stated in the Audit Report that the strategic plan could not adhere to the budget. He wanted to know if BSA first drew up the strategic plan and then the budget or first the budget and then the strategic plan. He also requested both the strategic and budget plans for the year.

Mr Mpofu stated that this statement was regrettably correct. He reminded the Committee that the current board only came into being once the budget was already established and had no power over it. However after this particular year the strategic and budget plans were aligned and accounted for.

Mr Masango enquired about staff management and the fact that a general manager was suspended. He asked if that suspended manager was still being paid.

Mr Mpofu stated that it would not be so difficult to revive boxing in the country as boxing was one of the cheapest sports, which even poor people could participate in, and which had the ability to bring hope to them. All that BSA was requesting was a boost from the government until the sport had got on its feet.

The Chairperson commented that the Committee must check the South African Boxing Act and assess the role the department had to play. He noted the overlapping issues that the Auditor-General had noted in the report.

Amendment to Strategic Plan of Department of Sport: SRSA Briefing
Dr Bernardus Van Der Spuy, Director SRSA, informed the Committee that a few amendments had been made to the strategic plan after 20 March. At that meeting the committee was told that there would not be any major changes to the White Paper and Strategic Plan. However, subsequent to that there had been three workshops involving senior management, middle management and the Minister and Deputy Minister. All their input had been added to the White Paper. SRSA had tried to add the Committee’s inputs to the Strategic Plan also, with the added focus areas of amateur sport, mass participation, club development programmes and school sport. The SRSA had also looked anew at their objectives in order to complete their line function with regard to the FIFA World Cup 2010.

The revised Strategic Plan therefore included the programmes, specific outcomes and outputs that had been aligned and consolidated, and also now included the latest organisational structure. The Service Delivery improvement plan was also included as part of the strategic plan. All of the work had been aligned with the State of the Nation Address. All key role players would be involved in updating the White Paper, which had a deadline of November 2007. Once that was adopted the strategic plan would follow.

The Chairperson stated it was pleasing to discover that the Department had listened to the Committee’s input and added it to their strategic plan.

Mr Dikgacwi requested a copy of the revised strategic plan.

The meeting was adjourned.


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