The Chief Albert Luthuli Museum and Nelson Mandela Museum briefed the Committee on their annual reports for 2006-2007. The Chief Albert Luthuli Museum had opened in August 2004, and aimed to promote the legacy of Chief Albert Luthuli. The Director was appointed in August 2006, and described what had been done in the years since opening. For 2006/7 the Auditor-General had given a qualified report, on the basis that the Museum had lacked a complete register of assets. In addition it had an unsubstantiated difference of R53 000, a lack of appropriate policies and procedures, financial information was not always captured and distributed in sufficient detail or in the right form, and insufficient monitoring strategies were in place. There had not been compliance with Treasury Regulations, and there had not been a risk assessment or fraud prevention plan, nor implementation of the supply chain management system. The financial statements were not submitted on time. There had not been sufficient authority for its strategic plan, and quarterly reports were not submitted. Members asked questions on the items reported lost, the staff structure, risk management, what matters remained outstanding from the audit, and expressed their disquiet that Chief Albert Luthuli’s name was associated with the mistakes. Further questions related to the name of the museum, the reasons why social cohesion was not mentioned, whether there was a curator. Members noted that much was expected of a museum dedicated to the legacy of Chief Luthuli.
The Nelson Mandela Museum Council noted that there had been a disclaimer by the Auditor-General in respect of the financial statements for the 2006/07 year. This disclaimer was a huge embarrassment but the present Council took office only after that report was given. Although it was not responsible for the errors leading to the disclaimer the present Council had taken substantial measures to establish a firm structure of governance for the Museum. The Museum was a national asset, a centre of culture and intellectual life, and aimed to be the centre of research, scholarship and enquiry around Mr Mandela’s life. The figures had been submitted late for audit in the 2006/07 year, as there was only one member in the financial department, but in the current year internal auditors and an internal audit committee were in place. The overview of the audit report was set out in the Annual Report. The Auditor General had issued a disclaimer as he had been unable to verify the figures given for assets, the integrity of the fixed asset register, and because supporting documentation was not submitted. The assets appeared to have been overstated and expenses understated. Treasury Regulations were not complied with, and there were several further reasons for the disclaimer. It was noted that the bulk of the funding came from the State but donations were also sought. There had been loss of two medals in one year, but security had now been upgraded. The museum was making an economic impact, but had to grow incrementally. Members asked whether the voice of Mr Mandela had been recorded, the role of the Department of Public Works, the constitution of the Council, the gender balance amongst staff, the reasons why it was based at three sites, and why the logo was recorded as an expense and not an asset.
Chief Albert Luthuli Museum (the Museum) briefing
Ms Rooksana Omar, Director, Chief Albert Luthuli Museum, said that the Museum was one of nine legacy projects, and had opened in August 2004. It was still an institution in the process of development, which aimed to promote the legacy of Chief Albert Luthuli.
Only in May 2005 had the Museum been able to appoint a financial officer on a one year contract, and it was not until July 2006 that the appointment could be made permanent. Ms Omar herself had been appointed in August 2006 and in a period of six months had faced the task of completing two annual reports. The Museum’s organogram had been completed together with job descriptions, and in November 2006 positions had been advertised. For a considerable time the Museum had relied on contract staff and volunteers.
Mr Thulani Thusi, Heritage Educator, Chief Albert Luthuli Museum, said that he had initially been appointed as a contract worker on a month-to-month basis. The major aim had been to increase the number of visitors. To that end the Museum had profiled visitors, and increased the number of exhibits with a view to the needs of visitors. It had also developed training in oral history so that local practitioners could assist in recording the history of Chief Albert Luthuli and his family. It had developed a database of arts and craft practitioners, auditioned performers in the Kwa Dukuza areas, and held major exhibitions on Chief Albert Luthuli. Visitors had included the Premier of Natal, and the President of Singapore.
Ms Nana Mzoneli, Personal Assistant to the Director of the Museum, gave some background to administrative systems. She said that she had begun, as a volunteer, to establish the filing system and database of suppliers, as well as designing forms for staff leave and for petty cash. She had contacted various institutions to compare and research best practices. She also had undertaken the task of documenting policies for the Museum, and co-ordinating meetings of the Museum’s council.
Ms Omar gave details of the Museum’s finances, and referred especially to page 29 of the Annual Report. She said that the Auditor-General had given a qualified report, on the basis that the Museum had lacked a complete register of assets. In addition the Museum had an unsubstantiated difference of R53 000 between the previous year’s surplus, accumulated surplus and the net assets, as disclosed in the current year’s financial statements. In his comments, the Auditor-General had also noted a lack of appropriate policies and procedures, causing material misstatement of assets and inadequate monitoring and reviewing of operations concerning property, plant and equipment. There was not always capturing and distribution of financial information in sufficient detail and in the right form, to enable the Museum’s Council to fulfil its duties and responsibilities effectively and efficiently. There was no strategy to ensure ongoing monitoring to identify and rectify problems.
The Auditor General further noted that there was not full compliance with applicable legislation. There was not an internal audit function in this year, as required by the Treasury Regulations, and that Museum’s finance committee had performed the functions of the audit committee, resulting in violation of the Treasury Regulations that called for the chairperson of the audit committee to be independent. The majority of members of the audit committee were not non-executive members appointed by the Museum’s council. No formal, written terms of reference regarding the audit committee’s membership, authority and responsibilities, had been in place.
In addition, a risk assessment, including a fraud prevention plan, had not been performed by the accounting authority for the year under review; the accounting authority had not had an approved investment policy; and the accounting authority had not implemented the supply chain management system as required by the Treasury Regulations.
The Museum had not submitted its financial statements for the year ended 31 March 2007 for audit by 31 May 2007 as required by the Public Finance Management Act (PFMA) as these statements were submitted for audit only on 6 June 2007.
The Museum also had lacked authority for its strategic plan, and had not reported on a quarterly basis to the National Treasury.
A laptop computer and a digital camera had been reported lost, but were subsequently recovered.
Ms Omar noted that the Department of Public Works owned the Museum’s building, but the Museum undertook routine repairs and maintenance. Previously, the Museum did not have any benefits for employees such as a retirement fund, but these had now been established.
The Chairperson asked Ms Omar about the items that had been reported lost, and what steps were taken to ensure the security of the Museum.
Ms Omar agreed with the Chairperson that the theft of a laptop computer and a digital camera had been totally unacceptable, and replied that the police had investigated the lost items. No further losses had occurred.
Mr G Lekgetho (ANC) asked for further details of the Museum’s staff structure.
Ms Omar replied that the Museum now had 12 members of staff. Vacant positions had been filled. It was however a challenge to retain staff, especially in view of the pull of urban areas. Staff gained valuable experience from working at the Museum and were therefore sought after by other organisations who could offer them better remuneration and benefits. The Museum had lost its financial officer who had been recruited by another start-up institution.
Mr Lekgetho asked about risk policy management, and about present challenges.
Ms Omar replied that the Museum faced many challenges, including the difficulty of obtaining supplies. Climatic conditions such as humidity and heat were also problematic.
Ms Omar said also that institutions such as this Museum perhaps needed a toolkit to which they could refer while establishing themselves, in order to anticipate likely challenges.
Ms D Ramodibe (ANC) asked what matters remained outstanding with regard to the qualified audit.
Ms D van der Walt (DA) said that many different criteria must be met before an unqualified audit report could be submitted. She felt that this museum was set up to honour the late Chief Luthuli, and it did him an injustice to ‘drag his name through the mud’ in this way.
Ms Omar agreed that the Museum could not be complacent in the face of an adverse audit report. However, she was confident that the organisation had turned itself around. She mentioned that for the year ending 31 March 2008, the Museum had received a clean audit report, and she looked forward to briefing the Committee further on that at the relevant time.
In mitigation, Ms Omar said that the Museum had a short history, only 12 staff members, and a very small budget. As at 31 March 2007, the Museum was in the set-up phase of institutional development, and, because of human resource constraints, it had been unable to put in place all the necessary procedures to achieve full compliance with the Public Finance Management Act
Mr B Zulu (ANC) asked why the Museum’s title did not reflect the full names and designations of Chief Albert Luthuli. She felt that this diminished his status.
The Chairperson agreed with Mr Zulu.
Ms Omar responded that Mr Zulu’s comment was well-made. However, the Museum was gazetted as the “Chief Albert Luthuli Museum”. The staff of the Museum had confirmed with his family that he had always signed himself “Chief”.
Ms Omar also said that all visitors to the Museum had been important, as reflected in the visitors’ book, and she complimented Mr Thulani Thusi on the many favourable comments made by visitors as to how welcome they were made to feel. She said that programmes of the Museum included a writers’ festival and a film festival.
Mr M Bhengu (IFP) said that it was essential that the Museum match the status of the man after whom it was named. He criticised the presentation for the fact that it had not made mention of social cohesion and non-racialism, which he would have expected it to epitomise.
Ms Omar replied that issues around social cohesion would be included in the Museum’s next presentation to the Committee. However, in this presentation, the Museum had focused on the set-up stage of its development.
The Chairperson said that nothing was said in the presentation about the curator of the Museum.
Ms Omar said that the Museum did have a curator, who was conducting a large amount of research on making the legacy of Chief Albert Luthuli accessible to the nation.
Mr Lekgetho asked if the book Let my people go could be found at the Museum.
Ms Omar replied that this book had just recently been reprinted. The Museum had been collecting letters, but had been unable to obtain the originals.
Members asked for details of the vacancies and staffing.
Ms Omar gave a detailed response, referring to pages 24 and 25 of the Annual Report. There had been an 83% vacancy level at that point.
The Chairperson observed that Chief Albert Luthuli was an icon, and therefore much was to be expected of the Museum dedicated to his legacy.
Nelson Mandela Museum (NMM) Annual Report 2006/2007 briefing
Professor Crane Soudien, Member of the Council of the Nelson Mandela Museum, noted that he was asked also to represent Professor Kader Asmal, the Chairperson of the Council. He noted that there had been a disclaimer by the Auditor-General in respect of the financial statements for the 2006/07 year. The disclaimer was a huge embarrassment to the Museum and to Mr Mandela himself. However, the Museum now had a hands-on council that had taken substantial measures to establish a firm structure of governance for the Museum, which was a national asset of great potential, a centre of culture and intellectual life, and which was envisaged as the centre of research, scholarship and enquiry around Mr Mandela’s life. It aimed to collect a copy of everything that was written about him anywhere in the world.
The present council had not been in office when the audit report for 2006/07 had been submitted. The present council had taken office only in April 2007, and had functioned for some time without a chairperson until, following a request to the Department of Arts and Culture, Professor Kader Asmal had been appointed Chairperson. The present council could not take responsibility for that report.
Mr Soudien noted that the NMM sought co-operation with the Walter Sisulu University, and hoped to become a catalyst for regeneration in the Mthatha area. A number of colloquia and seminars were to be organised in co-operation with the University of Fort Hare.
Mr Khwezi Ka Mpumlwana, Chief Executive Officer, Nelson Mandela Museum, apologised for the very late submission of the 2006/2007 figures for audit. There had been only one staff member in the financial department. However, he assured the Committee that the Museum was on track to submit for audit its figures for the current financial year on time, and would be printing the figures this week. Internal auditors and an internal audit committee were in place. Capacity issues in the finance department had been partially resolved.
Mr Mpumlwana then gave an overview of the 2006/2007 audit report, as contained on page 31 of the Annual Report. He noted that paragraph 5 related to the property plant and equipment. None of the fixed assets of the Nelson Mandela Museum had been bar-coded, a standard procedure required under the asset management policy. Furthermore, stocktaking working papers for verification of internal assets could not be obtained for audit purposes. This situation made it impossible to compare the physical assets with the register. The integrity of the fixed asset register could not be verified, meaning that the amount of R2.2 million disclosed for property, plant and equipment in the financial statements might be overstated or understated. The report further noted additions to fixed assets, including office equipment to the value of R50 798, for which supporting documentation was not submitted. The Auditor General was therefore unable to satisfy himself as to the ownership and valuation of fixed assets. Other reasons for the disclaimer of opinion, as set out in paragraphs 6 to 15 (on page 31 to 32 of the Annual Report) included failure to distinguish between the research and development phase of intangible assets amounting to R308 931. Accordingly, the assets of the Museum had been overstated and expenses understated by R308 931.
Paragraph 7 of the audit report noted that the Museum had breached Treasury Regulations by failing to use a competitive bidding process to procure goods and services costing more than R200 000. Further reasons for disclaimer were set out in paragraphs 8 to 15, relating to revenue, cash and bank, employee costs, accruals, accounts receivable, irregular expenditure, and unauthorised expenditure.
Mr Mpumlwana said that the State contributed the bulk of the Museum’s funding. The Museum did not charge entrance fees, but did collect donations by way of donation boxes. The Museum had been able to purchase two buses for youth programmes from funds received from the National Lottery.
Mention was made in the Annual Report of loss of two medals, and he clarified that this loss had related to the two items only, and in one year only. Security in that area had been strengthened by improving security cameras. There had also been co-operation with the South African Police Service.
With regard to enterprise development, Mr Mpumlwana referred to the statistics in the Annual Report about visitors and tour operators. The Museum was not an economic entity but it had to make an economic impact. The Museum had a number of approved but unfunded posts. Unlike other entities, the Museum had had to grow incrementally. Insofar as the information technology resource strategy was concerned, the Museum had entered into co-operation with the University of Michigan.
The Chairperson asked if the Museum had any recorded archives of “that golden voice” of Mr Mandela’s voice for the benefit of future generations.
Professor Soudien said that the Museum did have recordings of Mr Mandela’s voice and had copies to distribute, including a speech at his trial. He regretted that the delegation had not brought along copies.
The Chairperson asked about the role that the Department of Public Works played in regard to the Museum.
Mr Mpumlwana replied that the NMM was reviewing its relationship with that department.
Mr Lekgetho asked how the Museum’s council was constituted. He also asked if it was envisaged that Mr Mandela would be buried in the Museum complex, when that unhappy day came.
Mr Mpumlwana replied that the present council was composed of ten members – nine men and one woman. He did not have the jurisdiction to answer Mr Lekgetho’s second question.
Professor Soudien said that members of council were aware of the council’s present gender imbalance, and had raised this concern with the Minister. The present members of council had one more year to serve to complete their term of office.
Ms Ramodibe asked about the gender balance and employment equity in the staff structure, as set out on page 56 of the Annual Report. She observed that at the second and lower level of skills, there appeared to be a greater number of women.
Mr Mpumlwana said that there had been an upward movement of women members of staff into higher level positions. Circumstances had necessitated a considerable amount of multi-tasking, and it had not been possible to increase the staff.
Mr Zulu asked why the Museum did not have sites in the various places in which Mr Mandela had lived.
Mr Mpumlwana replied that the three present sites of the Museum had been chosen on the basis of consultations held at the time. Each site had something different to offer. He hoped that Members could visit the sites.
Mr Zulu asked why the Museum did not charge entry fees, and if it could depend on donations.
Mr J Maake (ANC) said that the logo on the Museum’s website could be regarded as an asset; however; the Museum reported that it had been required to record it as an expense.
Mr Mpumlwana replied that the Museum had considered it to be an asset, since it led to the generation of revenues. However, the Auditor-General, and later the chief financial officer, had advised that, according to accounting standards, it should be considered an expense, since it had been internally generated.
Mr M Mdludlu, Chief Financial Officer, said that the Museum had originally established the logo with a view to generate income.
Mr Maake and the Chairperson asked about the proposed retrenchments mentioned on page 36 of the presentation.
Mr Mpumlwana replied that the paragraph arose from the template used for reporting processes. It was ‘a material disclosure’. No retrenchments were planned.
Professor Soudien expressed his deepest thanks to the Committee, and expressed the council and Museum’s support for the Committee’s oversight role.
The meeting was adjourned.
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