Market Theatre 2006/2007 and Business Arts SA 2007 Annual Report

ARTS AND CULTURE PORTFOLIO COMMITTEE
26 October 2007
MARKET THEATRE 2006/2007 AND BUSINESS ARTS SA 2007 ANNUAL REPORT BRIEFINGS

Chairperson: Ms T Tshivhase (ANC)

Documents Handed Out:
The Market Theatre Foundation Annual Report 2006/2007 Presentation
The Market Theatre Foundation Annual Report
Business and Arts South Africa Annual Report 2007

Audio recording of meeting

SUMMARY
The Market Theatre Foundation briefed the committee on its Annual Report, outlining its history, vision and mission. It noted that 2006/07 marked its 30^th birthday. It was noted that there had been many improvements in the theatre such as an increase in door takings. The Theatre had a surplus of R1.8 million. Challenges were listed as the uncertainty around funding, since the National Lottery was one of the major funders, the uncertainty around premises, and the risks included late payment of funders, the need for further skills and lack of accountability of some staff, who were not properly trained in corporate governance and management.

Members raised questions on the funding, why there was a problem in getting staff, especially in light of the surplus, composition of the Council, the risk around the lack of accountability, the reasons for one of the Members of Council being granted leave of absence, projects in the rural areas and outreach to rural people, and the need to provide disabled access to the building.

Business and Arts South Africa briefed the Committee on its 2007 Annual Report. The presenters of BASA outlined the organisation’s mission and vision, noting that the organisation was formed in 1997 to promote the arts, as a joint initiative between the Department of Arts and Culture and the corporate sector. There had been an unqualified audit report. There was a deficit for the year of R434 000, which was set off against an accumulated surplus. A challenge was named as getting business to support the arts rather than sports. Questions by members covered the influence that BASA had on the promotion of South African music, its assistance to people in rural areas,  the vacant post in Cape Town, the reason for the preponderance of female staff, and the vacancy of Company Secretary.                                                                                                                                                                                                                 

MINUTES
Market Theatre Foundation Annual Report briefing
Mr Sibongiseni Mkhize, Managing Director, The Market Theatre Foundation,  told the Committee that the new management team was appointed in 2004. The Foundation had received adverse audit opinion from 1994 to 2004; but that had now changed. Over the last four years, door takings had improved by R3 million, and there had also been an increase in the number of staff. The Theatre’s productions had won 8 Naledi awards. Statistics were tabled on the number of productions, the number of patrons, and occupancy rates. Community festivals were held and 18 students had graduated from the drama school in December 2006.

The capacity constraints reported by the foundation were lack of funding, staff shortages and the skills levels, no capital works funding and the uncertainty around the premises in which the theatre operated. Late payment of funders, fraud and corruption and lack of accountability had been identified as risks

The Foundation reported that the National Lottery and Swedish South Africa Culture Fund were amongst the major donors. The Department of Arts and Culture funded the overheads of the foundation, such as staff salaries and rent.

Ms Christine McDonald, Financial Manager, Market Theatre Foundation, presented the financial section of the report. There had been an unqualified audit report, with no emphasis of matter. She reported that the  foundation had a surplus of R1.8million, with the accumulated surplus increasing up to R4.3 million. Compared to 2003, the foundation had a 60% increase in cash reserves. Comparison tables with the previous years were shown. The activities of the audit committee were outlined, and the balance sheet was tabled.

Discussion
The Chairperson asked the representatives from the Market Theatre Foundation if disabled people had been included amongst the people who benefited from the activities of the theatre

Mr Mkhize, replied that the Foundation had to include disabled people, however at that moment the building was not accessible to physically challenged people due to the manner in which it had been designed.

The Chairperson asked the Foundation to give reasons for the unspent money.

Ms McDonald said that the surplus was caused by the increase in the number of door takings due to the 30^th Birthday celebrations. She noted, however, that there was a risk of people not coming to productions, or certain productions demanding more money, so the surplus was needed as backup and should be retained for when it was needed.

Mr C Gololo ( ANC), asked if the Foundation had a board, because he noted that none of the Board members were present at this meeting.

Mr Mkhize responded that the Foundation had a Council; however there were some uncertainties as to the status of their membership, due to the fact that the members’ term was expiring and they had not received any notification of their continuation in office, and therefore were unaware at this point if they were still representing the Foundation.

Mr Gololo asked how much had the Foundation received from donations and from whom were these donations received.

Ms McDonald said that their biggest sponsor was the National Lottery and there were several other small donors.

Ms P Tshwete (ANC) asked the presenters to elaborate on the point about the lack of accountability, which was noted as one of the top five risks.

Mr Mkhize said that the lack of accountability was rooted in the fact that staff at the Market Theatre lacked an understanding of basic corporate governance, as they were mostly familiar with arts but not business practices. This was why he had listed it as a potential threat.

Mr M Sonto (ANC) noted that during the presentation, the speakers had mentioned nothing about implementing the plans and asked for a report on the progress of those plans.

Mr Mkhize said that the Foundation had been making progress on the plans mentioned in the report.

Mr Sonto again asked the Foundation why it spoke about staff shortages, but yet they spoke also of having a surplus.

Mr Mkhize said that some people had resigned from the Foundation, possibly due to the new systems being implemented, or simply because they had found new opportunities.

Ms McDonald added that it was very difficult to find the correct persons to appoint to a post as a lot of factors had to be taken into consideration.
 
Mr Sonto asked the presenters to tell the committee what skills they needed that the Foundation did not have.

Mr Mkhize responded that the issue was related to management skills.  He further said that some of the staff even needed to be trained in writing skills.

A Member of the Committee asked why Professor Mda was granted a leave of absence by the Foundation.

Mr Mkhize said that the Foundation needed to have a person who was stationed overseas to lobby for funds, and represent the Foundation there when necessary. He further said that the Foundation had assessed all the risks in this instance and were satisfied that they were covered.

The Member then asked the Foundation what plans it had with regard to 2010 and beyond.

Mr Mkhize said that the Foundation had identified the FIFA World Cup as part if the strategic plan, but the theatre needed to see what the Department of Arts and Culture was going to do.

The Chairperson then asked if the Market Theatre included communities in their projects, especially in rural areas.

Mr Mkhize said that the Laboratory had field workers that went into communities to identify skills, and the theatre had groups that came from all over the country.

Ms Tshwete voiced some concern over the issue of disabled people not being able to access the theatre. She asked if the Market Theatre Foundation thought that it would be able to modify the building to cater for disabled people, if the building did not belong to the Foundation.

Mr Mkhize said that as part of the Foundation’s long term plan, he wanted to install lifts in the building to cater for disabled people. He said that it was unfair that disabled people could not enjoy what the theatre had to offer, and thus it was their challenge to ensure that the building was modified.

Business & Arts South Africa (BASA) Annual Report Briefing
Ms Nicola Danby, CEO, Business and Arts South Africa presented the Annual Report. She gave an introduction to Business and Arts South Africa (BASA), which was founded in 1997 as a joint initiative of the Department of Arts and Culture and the corporate sector, to secure greater involvement in the arts from businesses.  The promotion of mutually beneficial and sustainable business arts partnerships would, over the long term, benefit the broader community. She reported that corporate membership in BASA had remained stable. Even though they lost three companies due to a shift in their areas, or mergers, the organisation gained new membership from two other companies.

The Annual Report was tabled, and this set out the vision and mission, governance, the strategic overview, human resource management, supporting grant funding and special projects in detail.

The main donors of BASA were the Department of Arts and Culture and corporate members of BASA.

BASA noted that there was a lack of grants in Limpopo, Mpumalanga and the Northern Cape. BASA blamed this on the lack of business development in these provinces.

Some of the projects reported by BASA under the special projects flag were the ArtsTrack and the Create. Create was described as a five minute arts/culture feature on SAFM, running on Monday, Wednesday and Friday. Media partnerships were geared to mainstreaming of arts and culture, and they were reviewed on a regular basis. Ms Danby reported that Create had cost BASA R 257 167,00 and Art Track, which was a research project, had cost the organisation R 281 580.00.

BASA worked closely with individual arts organisations as well, in an effort to assist them to identify potential sponsors and to encourage them to understand what they were capable of offering. Other sponsorship and partnership efforts were set out in the CEO’s report.

It was noted that indeed the organisation was successfully involving business in Arts, but it found that many businesses preferred sponsoring sports clubs rather than arts, which was based on the perception that sports offered more publicity for businesses rather than arts.

The audit report was not qualified, but contained a note that the supplementary schedule, not forming part of the financial statements, had not been audited. There was a deficit of R434 000, set off against the accumulated surplus.

Discussion
Mr C Gololo asked BASA what influence did they have on the promotion of South African music being played.

Ms Danby said that the role that BASA played in this regard was collective with other organisations.

The Chairperson asked how BASA assisted people in rural areas.

Ms Danby said that BASA was aware of the need to do that. It had gone into rural areas to speak to the small business owners and tried to encourage them to be involved in arts. She
further commented that BASA had the facility to speak to anyone who needed assistance.

Mr M Matlala (ANC), noted that BASA had a vacant post in Cape Town and asked if  BASA had a programme in place to address the issue of vacant posts.

Ms Danby said that the vacant post in Cape Town arose because a public relations company would be taking over the role of encouraging corporate membership.

Mr S Kajee, Non-Executive Director, BASA, further said that the post was in any event not a full time post.

A Member of the Committee noted that the most of the posts in the organisation were occupied by females and enquired as to the reason.

Ms Danby said that she found that women delivered more efficiently and effectively than males, and that she was also a firm believer in the empowerment of females.

Ms Tshwete noted that in the Annual Report  BASA had indicated that it had no secretary during a certain period, and asked if they now had a secretary.

Mr Kajee said that this referred to the Company Secretary as required under the Companies Act of South Africa. The role of the company secretary was fulfilled by the contracted audit firm.

The meeting was adjourned.