Departments of Education & Sport and Recreation: hearings

JOINT BUDGET COMMITTEE
31 October 2007
DEPARTMENTS OF EDUCATION & SPORT AND RECREATION: HEARINGS

Joint Chairpersons: Ms L Mabe (ANC) and Mr BJ Mkhaliphi (ANC Mpumalanga)

Documents handed out:

Vote 14: Education. Presentation to the Joint Budget Committee
Department Sport & Recreation: Presentation to the Joint Budget Committee

Audio recording of meeting

SUMMARY

The Department of Education had spent 99.65% of its budget during the 2006/07 financial year.  Their mandate was based on poverty alleviation, skills development and quality improvement.  The main priorities on which they wished to spend additional funds were the National Schools Nutrition Program, integrated technology connectivity at FET colleges, the expansion of Grade R and ECD facilities, provision of more personnel and predominantly upgrading of infrastructure.

Funding was needed to provide textbooks, and the target was to have full sets of books for all learners in Grades 10 to 12.  The Department was currently spending R1.22 per learner per day on its feeding scheme.  It wished to increase this to R1.50 while simultaneously increasing the number of days on which food was supplied and the number of schools included in the scheme.  Attention also had to be paid to learners with special needs.

Members said that the figures presented had to reflect the allocations made in the Medium Term Budget Statement.  The Department still had to get the detail of the allocations, and undertook to provide these amended figures in writing.  The Committee needed this information to report to Parliament.

Members were concerned about the thoroughness of monitoring and evaluation processes in the Department.  There was concern was that infrastructure projects were lagging, and schools were not receiving allocations due to them.

The Department of Sport and Recreation had established a new sub-directorate for monitoring and evaluation.  The bulk of the Department’s funding was geared towards the 2010 World Cup and the Mass Participation Program.  R1.9 billion would be transferred to provinces and municipalities for World Cup related projects.  The Department had spent 92% of its budget in the 2006/07 Financial Year.  The main areas of underspending had been the administration program, which had spent 53% of its funding.  This was mainly due to vacancies, with only 76% of posts being filled at present.  Only 37% of the facilities co-ordination had been spent, and 90% of the Mass Participation Programme funding.

The Department had received a qualified report from the Auditor General.  The issues raised were all receiving attention.  Many problems had arisen from the merger of the Department with the Sports Commission.  Matters relating to the irregular payments of bonuses and allowances had been handed over to the Legal Services Unit for further investigation.  The situation had arisen partly to poor leadership in the Department during the time that joint Acting Directors-General had been at the head of the organisation.

In response to questions from Members, Department officials said that employment targets in terms of disabled and female staff were meeting targets. Facilities were a problematic area.  The Department of Education was in control of school sport and related facilities, even though the two Departments were working closely together.  Infrastructure in the municipalities was funded through the Municipal Infrastructure Grant, but there was no guarantee that funds would not be utilised for other priority areas in the municipalities.

Questions were raised about the Department’s ability to spend its budget in the current FY, but they were reassured that various factors such as the teachers’ strike had delayed programs which would be presented later in the year.  Contractual issues would be addressed where government funding was being used to upgrade privately owned stadiums in preparation for the 2010 World Cup.

Staff training was being undertaken, and the Department hoped that all vacancies would be filled by the end of the Financial Year.  Posts had been advertised. 
MINUTES

Hearing with Department of Education (DoE)
Mr Duncan Hindle (Director-General (DG), Department of Education (DoE)) welcomed the opportunity to address the Committee.  The DoE had received a clean report.  He was grateful that strike action had not impacted too much on education. The DoE had enjoyed more involvement with their provincial counterparts to discuss issues such as spending and delivery on their mandate.  The vast majority of funds were spent on higher education institutes (HEIs).  There had been an underspending of R45 million on operational expenses and a total underspending of R49 million.  Nevertheless, the DoE had managed to spend 99.65% of its budget for the 2006/07 financial year (FY).

He said that there were three broad areas within the DoE’s mandate.  These areas were poverty relief, skills development and quality improvement.  Priorities in terms of poverty relief were the extension of the no fee schools programme, the National Schools Nutrition Programme (NSNP) and enhanced rural education.  The priorities in terms of skills development were the provision of bursaries, the Adult Basic Education Training and Human Resource (HR) development.  The priorities for quality improvement were the National Curriculum Statement for all grades, but particularly for Grade 11 in 2008, the implementation of the Integrated Quality Management System, and the development of infrastructure.  Too many schools lacked the necessary infrastructure.

Other priorities included the social cohesion and life skills programme.  There would be institutional development at HE’s.  There would be a recapitalisation of FET colleges.  It had been found that schools performed better where there was a strong district management structure.  The DoE had engaged on a five year planning cycle.

Mr Hindle put forward several proposals for the use of extra funds approved in the Medium Term Expenditure Framework (MTEF).  The NSNP had insufficient funds to reach all learners.  Food inflation was a factor.  There was an imperative to expand the programme to secondary schools, and the quality had to be improved.  The programme was a success, and was making a difference where it had been implemented.

He said that connectivity was an issue at FET colleges.  These were prime sites for skills development, and good Integrated Communications and Technology (ICT) was crucial.  They were looking at providing inclusive education facilities for learners with special needs, but acknowledged that some children still needed special schools to cater for them.  There were currently 500 000 children attending Grade R, and the target was to double this number by 2010.

Mr Hindle said that infrastructure was a continuous challenge, and there were significant numbers involved.  R2.7 billion had been granted in the MTEF, but even this would only help the DoE to scratch the surface.  More money was needed for the no fee schools programme.  The Eastern Cape presented special challenges.  The ECD facilities catered for children up to the age of four years.  Money and training was needed.  More teachers were needed, and schools required other staff as well.

He said that funding was needed for public entities such as the Council for Higher Education.  A contentious issue was the provision of textbooks.  The annual budget was R1 billion, but this was still inadequate in places.  Sometimes management was the problem, but there were also problems in procurement and distribution.  A decentralised strategy was normally followed, but the economy of scale with this approach did not make sense.  When the DoE had implemented the national recovery plan following the strike, the DoE had purchased a significant number of books.  The intention was to focus on Grades 10 to 12, and the objective was to have a full set of text books for all learners in these grades.

Mr Hindle then presented a breakdown of the requirements at both provincial and national levels.  The totals over the periods of the MTEF were R11.5 billion, R17.1 billion and R23 billion.

He said that the NSNP currently worked on a budget of R1.22 per learner per day.  The DoE wished to increase this to R1.50, and to extend the programme to all 198 school days in the year.  All of these schools were in quintiles one and two.  The risk involved with the current position was that some deserving learners were not being fed.  Schools would be encouraged to develop their own food gardens as some had already done.  In some cases some learners were fed while others in the same household were not, due to attending different schools.

He said that a major challenge at FET colleges was the availability of ICT.  Business was excited about these institutes, and there was a possibility that call centres would be established at some of these colleges.  The risks included the non-achievement of the aims.  High broadband costs were a factor.

Mr Hindle said that the goal of inclusive education was to ensure there was a place for every learner with special needs.  The current target was 90 000 places for such learners.  Improved screening was needed.  He envisaged having 20 000 places for special needs learners at ordinary schools by 2010.  There was a need for psychologists to cater for these children, but these could be used in a cluster system rather than placing them at individual schools.  The DoE had identified 135 schools that needed infrastructure upgrades at approximately R2 million each.  District based support teams were to be put in place.  It was proposed to increase expenditure by R3 500 per learner per annum.  A reliable screening tool was needed to determine the status of learners.  Securing key inputs was another risk.

He said that Grade R classes were often conducted in much neglected facilities.  There were huge returns from the attention given to learners at this early stage.  The target was to provide 950 000 places in schools for Grade R learners by 2010/2011.  He anticipated an increase of 83 000 learners per annum at a subsidised cost of R3 475 per learner.  Teacher training was needed.  The number of classrooms needed was 1 705 per year.  The risks were that there were not enough teachers.  They were normally on School Governing Body (SGB) posts, and were on different salary structures to teachers employed by the DoE.

The infrastructure requirements were captured in the norms prescribed by the Education Act.  Every school should have a library and a science laboratory.  Security was essential, as well as sports and cultural facilities, although these could be provided as common facilities on a cluster basis.  Learner access to non-personnel and non-capital inputs were addressed by the Qids-up program.  There was a lot of dependence on the private sector for infrastructure development.  In some cases there had been no response to tenders as building companies had other priorities such as 2010 related work.

The Chairperson interrupted Mr Hindle, reminding him that time was too short to allow for a detailed presentation.

Mr Hindle touched briefly on transfer grant management.

Mr Philip Benade (CFO, DoE) said that the figures presented represented baseline allocations and were not based on the MTEF speech made the previous day.

Mr Mkhaliphi said that they could not discuss figures if they had not been recalculated.

Discussion
Mr T Ralane (ANC, Free State) said that the DoE was doing a good job.  However, they were creating the impression that this forum was a second bidding forum.  There was a need to check whether the MTEF allocations were in line with policy parameters, and the conditional grants to provinces.  The infrastructure issue was one of the problems faced by the education budget.  These funds were managed by provinces.  There was a consistent decline in infrastructure.  Education must also benefit from infrastructure grants.  He asked what the national department was doing to address this matter.  He asked if salaries were in line with policy guidelines.  He asked what benefits there were in the cluster system.

Mr Mkhaliphi said that if DoE was not ready with the details, these could be supplied within the next day or two.  The Committee had to submit a report by Friday.  The question was how the adjusted allocations changed the picture.  He asked what the chances were that the DoE would overspend on its budget, as it had already spent 70%.

Ms Mabe said that this presentation by the DoE had already been prepared by the end of September.  The Department had been given guidelines as to what had to be presented.  Objectives had to be compared to performance.

Mr E Sogoni (ANC, Gauteng) said he had not seen anything in the presentation regarding monitoring and evaluation systems.  He asked if ICT was being used in schools to monitor and evaluate performance.  He asked if there was value for money.  The budget in April had not made provision for no-fee schools.  Some schools in Gauteng had not received funding.  This information was contained in a newspaper article that related specifically to the situation in that province, but he suspected this might be the case in other provinces as well.  Things were happening, and he asked if the DoE had a presence on the ground.  He asked about time frames.  School infrastructure needed attention.  On the procurement of text books, he felt that the national procurement was a good idea.  However, he noticed a trend that if a system was not working, then the Department would jump to a new policy rather than see why the current system was not working.

Mr Z Kolweni (ANC, Western Cape) asked about the monitoring of conditional grants.  For some months children had gone hungry as there had been delivery problems with the NSNP.  He asked if it was working.  He wanted to hear more about the budget.  A window for discussion had been created.  There was a lack of awareness amongst the general public.  There should be compulsory regulations for ECD facilities.  These were defined as any place where more than six children were cared for in the absence of their parents.

Mr G Schneemann (ANC) said that the Medium Term Budget Policy (MTBP) statement covered the FY’s from 2008/09 to 2010/11.  The adjustment made additional funds available, but there were also rollovers.  He asked what was being done to ensure that the same situation did not occur again.  He noticed the backlogs identified in the school infrastructure report card.  The numbers were falling but were still high.  There was no indication how this would be addressed.  Grants were being given to provinces.  He asked if the DoE thought the figures would have a positive impact.

Mr Mkhaliphi said that the DoE’s own report highlighted the challenges.  He asked if they were ready.  He asked how they viewed the implementation of this budget.

Mr O Robertson (ANC, Eastern Cape) asked for more specifics on the amounts of other transfers.  He asked what the DoE was paying for in terms of the NSNP in the Eastern Cape.  One person had been appointed to manage the programme in that province.  R100 million had gone missing.  Many schools in the province were in poor repair.  The provincial department was blaming Public Works for this situation.  DoE said that 1220 classrooms were needed per year, and he asked what the backlog was.

Ms B Ngcobo (ANC) asked if the DoE’s budget committee met regularly.

Ms C Nkuna (ANC) asked about bursaries.  Children were leaving the social welfare grant system at the age of fourteen.  There was consultation with the Department of Social Welfare and Development on this issue.

Ms Mabe said that a large part of DoE’s budget was transferred to provinces.  Money for monitoring was shifted.  Procurement took place at lower levels.  She asked what made it difficult for DoE to have on-site observation to see whether the budget was going to the right places.  Gauteng had expected funds.  There were 102 schools in Soweto that needed funding.  She asked what was in place to ensure that schools got the books and funding that they needed.

She asked about the NSNP request over and above the current allocation.  She asked what was being done to ensure that the funding was well spread.  She agreed that the figure of R1.22 per learner must be increased to R1.50.  It was a small amount, but it could go a long way if the DoE was creative enough.  The procurement process could not be delayed both in terms of text books and the NSNP.  Funds had to be utilised to the maximum benefit of all.

Ms Mabe said that there was a problem of leadership and management.  She asked what was in place to ensure that funds were allocated correctly.  Some low fee schools had not received funding by September.  She asked what the DoE was doing to address this.  She asked how the Committee could be assured that additional funds were not allocated where there were already rollovers, and if money could be transferred to different programmes.

Mr Ralane said there were some constraints.  FET connections to ICT were an issue. Issues had to be clarified to be ready for the 2008/09 Division of Revenue.  He asked which provinces had budgeted for text books, and how the DoE would deal with the situation.  The Committee would want to see norms being set.

Ms R Mashigo (ANC) asked how skills for school food gardens were being taught.  She asked if this was part of the curriculum, and if the Department of Agriculture was involved.

Mr Hindle apologised if the DoE had misread or misunderstood the Committee’s instructions.  The policy statement had only been received the previous day, and was very broad.  The detail was still to come, and the Department could not make informed comment at this stage.

Mr Mkhaliphi appreciated the DoE’s position.  However, the Joint Committee had to report to Parliament soon after the speech had been released.

Mr Hindle replied that a lot of work had been done on the request for additional funding.  Three full meetings had been held with National Treasury (NT), who had wanted a full business plan.  This had been done, and the DoE had made use of funds.  One of the big questions was the flow of funding and the transfer to provinces.  Conditional grants were but a small percentage of the transfer.  These funds were dealt with by provincial legislatures, and the DoE had no influence over the allocations except for the conditional grants.  The DoE had withheld funding to the Eastern Cape due to insufficient reporting.  He said that there was a full monitoring and evaluation unit in place.  They could only report on the progress of programmes, and could not manage or change those programmes controlled by provinces.  There was a hands-off relationship within a structure of cooperation as determined by the Constitution.

He said that there was a national procurement catalogue for textbooks.  The system was in place, but the provinces must drive it.  He was encouraged by the MTEF.

Reporting was a small slice of the cake.  Every school was on the Government Information System and reported on facilities.  The DoE thus had a comprehensive picture on infrastructure requirements.  The conservative estimate was that R56 billion was needed to bring school infrastructure up to standard.  The MTEF had allocated R2.7 billion for the current FY, and a total of R17 billion over the three years covered by the framework.  This was welcome, but not nearly enough.  The DoE was considering taking out a loan to assist the programme.  There were targets for the provision of water and sanitation but he feared that these would not be achieved in the current year.

He asked if suppliers and builders were ready.  The Department’s hands were tied on some issues.  Security was a provincial competency.  They were not doing enough.  In some cases donor funds were used for security projects such as fencing.

The DG said that the issue of awareness of ECD had been taken to heart.  He thought this might become compulsory by 2010.  Other transfers mentioned in the presentation included payment for membership of international organisations such as the United Nations Educational and Scientific Committee and the African organisation ASILA.  Children who were too old to receive social grants should not pay fees.  The Department of Social Welfare was responsible for the welfare of these children.  The school gardens were part of the creative solution for the NSNP.  The gardening activities were part of the natural sciences curriculum.

Mr Benade said that idea of the presentation was that the Department’s various bids would be put forward.  The presentation reflected the existing situation.  They would interrogate the NT the following day on the detail of the allocations.  The DoE needed an extra R1 billion, but it seemed only R300 million had been granted.  One of the consequences was that secondary schools would have to wait to be included on the NSNP.  Some quintile 3 or 4 schools might be part of the programme, and might have to be withdrawn to support the poorer schools.  The DoE was working with the provinces on monitoring and evaluation.  When the extra allocation to the Department was known, then the funds must go to the provinces.

The CFO said that officials were visiting various areas.  Maximum funding would be given to priority areas.  There was a unit that made quarterly visits to the provinces.  They monitored the provinces’ spending.  The DoE had contracted a non-governmental organisation to assist with the gathering of information. 

He did not think the DoE would overspend, despite the spending to date of 70%.  The bulk of the Department’s funds went towards HEI’s, and all of these were paid by November.  Accelerated payments were made.  The cash flow estimate was that another R2 billion would be spent.  On the question of rollovers, he said that there had been an estimated increase in the education allowance in the adjustment.  R200 million had been spent on the recovery plan after the strike.  There were small rollover amounts, and this would always be the case.  These were often due to late deliveries and invoicing.  Where funds were not already committed, they would not be rolled over.

Mr Mkhaliphi said there were compromises in the provinces.  There were things that were in the Department’s control.  There still a variance on the question of underspending.  He understood there were personnel constraints, but still asked why there were so many variances.  He wondered if the budget was being shifted.

Mr Hindle replied that between January and June 54 new persons had bee appointed at the DoE, while 56 had resigned.  What was exciting was the number of interns.  There had been an allocation of seventy, which had been doubled.  A high percentage of the interns was being recruited.  This was in line with the Public Finance Management Act (PFMA).  On the question of norms and standards, there was a huge reluctance to determine national norms.  This was less so in the Eastern Cape than the Western Cape.  He acknowledged that inequities still existed.

Ms Mabe asked about Section 21 schools and their capacity to spend.  The SGB’s were empowered to spend.  Where schools could not use their budgets, she asked what the Department was doing about it.  She asked what up-skilling was needed, and if there was sufficient capacity.

Mr Hindle replied that this was generally not the trend.  Section 21 schools did not tend to revert back to Section 20 status.  They had to account for their spending.  Although they were not audited spending did have to be verified.  Section 20 schools had a paper budget.  He mentioned the example of building programmes at Free State schools.  The DoE gave funds directly to schools, and they were more successful in all aspects compared to the situation where the Department paid the contractors.  Building projects were executed cheaper, quicker and with better quality.  When the community was told how much was being invested, they tended to police the situation better than the AG.  The provinces had to assess the capacity of schools, and had the right to withdraw a school’s status.

Mr Robertson observed that quintile 1 and 2 schools were free.  Some quintile 3 and 4 schools were also free.  However, he had seen some Eastern Cape schools that were classified in quintiles 3, 4 and 5 that by rights should be in quintile 1.

Mr Mkhaliphi said there were some substantive questions tabled.  He expected written replies by Friday.

Mr Schneemann said that on page 44 of the MTB statement there was a call on departments to make efficient use of resources.  He asked if the DoE could respond to this with their action plan including transfers.

Hearing with Department of Sport and Recreation (SRSA)
Mr Mkhaliphi told the delegation from SRSA that the Committee wished to hear how the Department proposed to implement its budget, what its successes were in the FY to date and progress on stadiums.  They wanted a focus on the Medium Term appropriations.  He asked the delegation if they were ready to do that.  If information was not to hand, it could be presented fully in writing later.

Ms Xoliswa Sibeko, Director General, SRSA, said that the Department had received a letter with specific issues and questions.  She apologised that not all the Chief Directors were present. 

Mr Makhoto Matlala, Chief Financial Officer, SRSA, said that a new sub-directorate had been created on 1 April 2007 to take charge of monitoring and evaluation systems.  There had been a comprehensive evaluation of the Mass Participation Programme (MPP).  Quarterly reports had been submitted by all sub-directorates.  A Technical Inter-Governmental Committee (TIC) meeting had been held quarterly.  The unit was working to address shortcomings within the Department. 

He said that a major portion of funding was directed to the World Cup programme.  Another major beneficiary was the MPP.  SRSA had been awarded another R1.9 billion.  He presented the budgets for individual programs.  The 2010 programme took the lion’s share.  An amount of R4.6 billion was allocated for the 2007/08 FY.  Money would be transferred to provinces and municipalities to fund projects.  The full amount of R1.9 billion would be transferred.  Another R1.4 million had been allocated to non-profit organisations, which were the national federations.

An adjustment amount had been received for financing stadiums.  The highest was for Soccer City in Johannesburg.  This project was the furthest ahead of schedule.  The amount had been requested now to guard against escalating costs.  He gave a breakdown of spending against budgets for the 2006/07 FY.  Of the administration budget, 53% had been spent; Client Support had spent 94%, MPP had spent 90%, Liaison and Information had spent 98% and Facilities Coordination spent 37%.  This meant that the total spending was 92.4% of the budget.  The underspending in the administration programme was due to vacancies that had only been filled in January.  It was not just the salary bill that had been affected, but there was a corresponding lack of needs for goods and services and capital expenditure, as it was not necessary to fund the purchase of assets for non-existent staff members.

The CFO said that SRSA had received a qualified audit report.  Corrective actions had been taken.  One of the problems lay in the capital asset register management.  The assets of the former South African Sports Council (SASC), which had merged with SRSA, had been captured by the end of September 2007.  A follow-up count of assets would be done during October.  There would be a new classification of assets, and the information would be linked to the LOGIS system.  A reconciliation of intangible assets had been done.  Performance bonus awards had been deemed to be irregular expenditure.  This matter had been handed over to the Legal Services Unit (LSU) for further investigation and for recovery.  All future awards would be done in accordance with Department of Public Service Administration (DPSA) guidelines.  The alleged irregular allocation of transitional and acting allowances had also been referred to the LSU.

Mr Matlala continued that the register of leases had been completed.  The International Monitoring Group had been instructed to monitor and collect the payment on royalties.  Regarding receivables, an amount of R154 000 had been written off.  This amount had been on the books since the 2002/03 FY.  Accruals would be accounted for by the development of an effective new system.  A register had been developed to monitor the state of committed funds.  In terms of allowance to athletes, a list of athletes using the High Performance Centre had been requested from the University of Pretoria.  There would be random verification of the payments involved.  Internal controls had been put in place at the Department.

Mr Thembinkosi Biyela, Chief Director : MPP, SRSA, said that there was a comprehensive service support department.  Of the 221 posts at the Department, 168 were presently filled which represented 76% of available posts.  They were now well prepared with the existing HR to deliver.  They were in a better position than at the start of the year.  A number of positions had been filled in the 2010 Unit, but there were still some critical vacancies.

Ms Sibeko said that there had been a lot of shifts.  Vacancies would soon be advertised.  There had been some resignations, but the situation was not as bad as at some other Departments.  SRSA was looking to restructure, especially to improve monitoring and to provide a more flexible service.

Discussion
Mr Mkhaliphi noted that the figures were compiled before the MTEF statement.

Ms Mashigo noted that some vacancies had been filled, but not others.  Training was to happen, and she wanted to know in which category this would be provided.  She asked about the Department’s capacity to spend.  She appreciated that something had been done regarding irregular expenditure, and asked what punitive measures had been taken.  The Committee wanted an assurance that there would be no recurrence.

Mr Mkhaliphi said that staff development programmes would be in place soon.  A firm commitment was needed.

Ms J Fubbs (ANC) said there was a thread of restructuring.  She asked if this would meet the demands and challenges of 2010.  There were two areas of concern for her.  One was in terms of personnel and in particular the disabled.  She asked how they could be included.  There was a gap in the Department.  She saw comments on training, restructuring and reskilling, but she asked how effective the audit committee was, and how effective management was.  She asked if a top-down approach was being followed.  She then turned to fiscal matters.  The infrastructure budget was not fully developed due to not knowing what the full plan was.  She asked if SRSA relied on other spheres to inform this.  She asked why there was a gap in the budget explanation.

Mr Sogoni said that all Members were concerned by HR issues.  Only 53% of the allocation for administration had been spent.  Posts were being filled.  Some were critical, as he concluded that there was no one responsible to monitor transfer funds.  He asked how many other critical posts were vacant, and how many of these were funded.

Mr Mkhaliphi said that only two members were monitoring all transfers, and asked if they could cope with the workload.

Mr Robertson noted that the DoE’s presentation had included the establishment of sports fields at schools.  He asked if SRSA was involved with this.

Mr Kolweni referred to the meeting with the nine provinces.  The report showed that there were coordinating meetings.  The same situation should apply in the provinces.  A sense of understanding was needed.  He queried the infrastructure budget in that nothing had been allocated to Ellis Park for 2010 upgrades.

Mr Sogoni commented that sport was a very important social activity, yet only 37% of the facilities coordination budget had been spent, and 90% of the MPP budget.  He asked how expenditure could be improved.  He asked what had been voted in the budget adjustment.  He asked how there could be an adjustment if the original allocations were not being spent.

Ms Mabe observed the vacancies from the previous FY.  She asked how this would affect 2010 preparation.  She asked how performance bonuses could be paid without the appropriate mechanisms being in place.  The report indicated that action had been taken, but she wanted to know what the results were.  She asked what risk assessment had been done.  She wanted to know what was being done about the challenges indicated in the second quarter report.  In terms of adjusted expenditure, she said that unused amounts for compensation had been shifted to a budget for unforeseen expenses.  She asked why the Department had budgeted for personnel and then shifted the funds.  Some of the money had been shifted to a marketing project related to the Beijing Olympics and Para-Olympics.  She asked why this had not been budgeted for up front.  She asked what skills were needed for the unfilled posts, and why SRSA was finding it so difficult to employ people.  She asked how long the vacancies would persist.  Monitoring was a very important role, and asked how SRSA could assure the Committee that there would not be a negative impact.

Mr B Komphela (ANC) said that only 50% of the SRSA budget for the 2007/08 FY had been spent to date.  He asked the Department if they thought they would spend the full budget, and yet they were asking for more funds.  He noted household expenditure had been allocated to LoveLife, amounting to more than transfers to provinces and federations.  This was a concern, and the Portfolio Committee on Sport and Recreation would engage with the DG on this matter.  He asked how this fitted in with the objectives of SRSA.  Only 37% of the facilities coordination budget had been spent.  This was very disturbing.  There was no allocation for the Ellis Park and Manguang stadiums.  In these cases public funds were being spent on private stadiums.  He asked if there was any contractual relationship with SRSA, and would like to see the wording of such contracts.

Ms Mabe asked for a written answer on the Department’s plans to spend its full budget.  She wanted to know how SRSA would ensure that there would not be huge spending in the final quarter of the FY.  Funds that had been allocated for employees were being shifted to other uses.  She asked why these had not been in the original budget.  The contractual relationship with private stadiums was very important, as government needed some control.  She asked if there would be any income from future use of the stadiums.

Mr Biyela said that training was being offered to staff at all levels.  This included induction and orientation programmes, some of which would take place in November.  Some of the training was conducted internally and some external resources were also used.  Change management training had also being conducted for 138 staff.  This aspect was critical, and had been presented in agreement with the trade unions.  Staff of the former SASC had been particularly targeted.  Some of the external training was the field of records management, which had been attended by eleven employees. ICT training had been given to 29 staff members.  Every employee would do the change management course.  Twelve of the interns had done policy training.  Work skills were very critical in determining performance management systems.

He said that vacancies were at different levels.  There were currently two vacancies in the DG’s office for a Director and a Personal Assistant.  These were soon to be filled.  There was a vacancy for a Chief Executive Officer (CEO), which was at a DG level.  There were four vacancies in the MPP unit.  Some of these posts had become vacant due to promotions.  There were fourteen vacancies in the Corporate Services unit, of which thirteen had been advertised.  There were two vacancies in the CFO’s office, and the post of Strategic Planning CD was vacant.  There were six openings in the internal audit unit, which had been advertised, and another eight in the 2010 Unit, which had also been advertised.  There was one vacancy in the ministry.  This was a total of 47 vacancies, 80% of which had been advertised.  All of these were funded.

Mr Biyela said there was very close cooperation between SRSA and the DoE.  This had been developed with political guidelines.  There was a new policy and structure in school sport.  It was a smooth relationship.  There was a proposed policy which would see future stars developed from early education stages all the way through to the High Performance programme.  There would have to be investigation of facilities.  There would have to be synergy in the provision of facilities in schools and communities.  Programmes and events had to be streamlined, and they must speak to development.  SRSA had to deliver on its mandate by developing a winning nation.  School and general sport had to be related to the national federations.

He said that a lot of the unspent funding was in grants.  The MPP Unit had a partner with school sport.  There were commitments would reflect an expenditure of better than 50%.  There was a lag between some activities and the payment.  One area causing the slow spending tempo was the teaching strike.  Sport had been suspended during the recovery phase.  The major school games had been postponed to December, and there would be considerable expenditure on this event.

Mr Matlala said that there was a report on irregular spending in the Annual Report. The Department had been unable to do performance assessments.  The issue had been raised.  There had been a lack of performance agreements in the previous years.  Therefore performance bonuses had been paid across the board.  The former DG had authorised payment, and the matter had been handed over to the LSU for further action. 

He said that the infrastructure budgeted had been determined by the host cities for 2010.  SRSA would monitor the cash flow.  Project management teams had been appointed.  Site inspections would be undertaken in conjunction with the Development Bank of South Africa.  Regarding the stadiums at Ellis Park, Rustenburg and Manguang, he said that these were private facilities.  Most of these projects would only be undertaken at a later stage as these were existing facilities and only needed some upgrading to FIFA standards.  The AG had said that a risk assessment should be done earlier.  This would be done earlier in the FY.  Most of the management reports on the April budget had not been compiled.  He hoped that the new team would work out what resources were needed.  Even though only 50% of the budget had been spent to date he was confident most of the remainder would be expended by the end of the FY.  There would be a lot spent on events to be held in the December school holidays.

Ms A Burchell (CD Sport Support Services, SRSA) commented on the facilities programmr.  An audit had been commissioned through a consultant.  Municipalities had been contacted but only 50% had been able to respond.  They either did not know, or their records were poor.  This had delayed a project which was designed to determine the number of facilities which were needed.  This would be calculated according to the size of nearby communities, and SRSA would be able to assess what the backlog was.  They estimated that R14 billion was needed to provide sufficient sports facilities for the country.  The truth of this estimate still had to be confirmed.  Many facilities were owned by municipalities or were either under the control of the DoE or in private hands.  A complete assessment was needed.  Cabinet had taken a decision to move infrastructure funds to the Municipal Infrastructure Grant (MIG).  SRSA had no control over what was built from these funds.  Municipalities had to compile Integrated Development Plans (IDP).  There was no guarantee that money given would actually go to sport facilities.  Municipalities were likely to divert funds towards other priorities such as housing and sanitation.  If SRSA wanted to control the development of sports facilities it might need to get control of the funds allocated.

Mr Mkhaliphi asked if ring fencing funds for sports facilities would be a solution.

Ms Burchell replied that SRSA would have to consult on that question.  It was supposedly the case now.  However, funds for sport were classified together with cultural requirements, and were often used for libraries and cemeteries.  Technically it was possible to ring fence funding for sports facilities, but perhaps the solution would be to create separate funding for sport.  In Pniel nothing had been given towards sport.  A key component would be the government’s response to this problem.  School sport was still a DoE responsibility.

She said that there had been variances towards Olympic branding.  It had been budgeted for the next FY but was needed earlier than expected to secure facilities for marketing at the Beijing Olympics.  One aspect was a 2010 promotion stand.  The Cabinet had taken a decision to coordinate marketing.  There was a need to put the case of how sport in general could contribute to the success of the World Cup.

The LoveLife Games had emanated from a three-party contract in 2001.  The parties involved were the Department of Health, the LoveLife Trust and the Henry J Kaiser foundation from the United States.  This agreement had been extended in 2004.  Funding had been contributed and the games had been combined with an HIV awareness campaign.  Funding was continuing in the form of an unrequited transfer payment.  This was one of a few NGOs that operated on a three year cycle.  LoveLife was able to use its funding as it deemed fit.  There was a need to have discussions with LoveLife on the consistency of messages to complement other government programmes, such as the call for abstinence.

Mr Biyela said there had been discussion regarding the division of revenue grant.  An action plan had revealed a challenge in under expenditure.  There were vacancies at provincial level.  There was also the challenge of compiling a business plan.  In the past SRSA had visited the provinces to understand the situation from an operational point of view.  Finance was a missing element from strategic analysis.  SRSA’s CFO had met with the provinces, and had met his provincial counterparts.  Processes needed to be streamlined and vacancies needed to be addressed.  A joint budget procedure was necessary.  SRSA was beginning to develop norms and standards.  Meetings had been revamped.  There was major support for this initiative.  The CFO was involved.

He said that SRSA was restructuring in terms of disabled persons.  There was a new dynamic in the Department.  Leadership had been a problem while there were two Acting DG’s in office.  There had been a lack of proper synergy.  The issue was complicated.  Now there was one DG and the problems were being addressed.  The structure went all the way down.  Policies had been established and staff now new what was expected of the.   SRSA had exceeded targets in terms of disabled persons and women.  Disabled staff represented the Department at all games.  Sensitisation programs were in place.  The most important aspect was that the DG had enhanced leadership within the Department.
 
Ms Sibeko said that vacancies had been advertised and some interviews had already been conducted.  She hoped that all posts would be filled by the end of the FY.  A staff retention policy had been created.  Senior managers would be assessed so that an idea could be formed of the skills needed.  Regarding contracts with private stadiums, she said that SRSA was working on an exit strategy.  She would provide the Committee with a copy in writing.

Mr Mkhaliphi asked that the information be provided by the next afternoon.

The DG said the question had been asked before, and action had been taken.

Ms Fubbs asked if the DG could clarify the situation with disabled persons.  It seemed there was absolutely no problem at present, and asked when the situation had been rectified.

Ms Sibeko replied that SRSA complied with and even exceeded DPSA regulations in this regard.  In the new structure there was a 3% disabled complement, although this was still a bit lacking.  A disabled friendly service was in place.  There had been a good response from disabled people in Gauteng to the job advertisements.  It was a question of good governance. 

She said that a top down approach had been in force at SRSA.  There had been a culture of a lack of leadership in the Department.  There had been a territorial approach, but reforms were now in place.  A top management forum had been established and an executive committee.  There was a management committee, which comprised all senior management.  There was also a middle management forum. in which staff were included.  This was eliminating the grapevine and was proving very popular.

The DG said that there were two options with punishment for the unauthorised bonus payments.  One was to ensure that personnel signed acknowledgements of debt.  She was afraid that this could lead to an unfair situation.  The staff had not asked for bonuses, and therefore could not be expected to repay the money.

Mr Mkhaliphi asked if the former DG was still at SRSA.

Ms Sibeko replied that in January 2006 Prof Denver Hendricks had been DG.  He had made an agreement with the unions regarding bonuses.  This could not be done, and a pattern had been established.  It was not noted by the AG.  She did not know why Parliament had allowed this to happen.  After Prof Hendricks’s contract had expired, Dr J Phaahla had been appointed acting DG.  It would be unfair to take action against him, as he had inherited the problem.  He had realised what was going on.  However, the situation with two Acting DG’s had made decision-making difficult.  Long hours had been spent with staff in catching up with all the submissions.  Savings had been made on personnel expenses.  She was confident the situation would be rectified.  Directors had to provide project plans or else they stood to lose funding.  An important upcoming project was the Zone 6 games.

Ms Mabe confirmed that there were important times ahead.  The Committee needed to know what, when and how spending would occur so that the Committee could monitor the situation.  They should not be advised at the eleventh hour.  Follow-up answers were needed.

Ms N Ntwanambi (ANC, Western Cape) said that a time frame was needed.  She was not sure if the HR plan was in place.  People were afraid to take decisions.  She asked if there were any disciplinary cases currently related to expenditure.  People had a right to bonuses, but there was legislative control over the process.  It was a relationship process.

Mr Sogoni asked about the rights of staff.  He suggested that the Department be allowed to respond to the issues with the possibility of follow-up questions.

Mr Mkhaliphi said this was fine.

Mr Matlala explained the restrictions on variances.  The first level was within the discretion of the Department, and money could be shifted within a programme.  The second level occurred where funding was to be moved between programmes.  The DG, as the Accounting Officer, could approve such changes.  The last level involved variances of more than 5% of the budget.  This required approval from NT.

Mr Biyela said that a written response would be provided.  A new HR plan was under development.  Collaboration was needed with unions, and this was not happening at present.

Ms Sibeko said that there were grievances within the Department.  Government employees were being used to resolve these grievances.  There were a number of cases, many arising from the merger between SRSA and the SASC.  Many staff were not happy with the levels at which they had been appointed.  Some disputes were still unresolved.

Mr Mkhaliphi said that the Committee would expect written responses as undertaken by the Department.  They wanted to be assured that the additional budget would be in good hands.  He noted that more than 80% of the Department’s staff were women.  Some intuition would be developed.  Sport brought national pride to the country, and the spotlight was on SRSA.

Mr Ralane asked whether allocations in the MTEF were aligned with the policy.  He hoped that the Department would be moving into the right areas between now and February, as they would then be going into a new budget period.

The meeting was adjourned.