SportBRRR

2.  Budget Review and Recommendation Report of the Portfolio Committee on Sport and Recreation, on the performance of the Department of Sport and Recreation, Boxing South Africa and the South African Institute for Drug-free Sport for the 2016-17 financial year, dated 1 November 2017

The Portfolio Committee on Sport and Recreation, having considered the performance of the Department of Sport and Recreation, Boxing South Africa and the South African Institute for Drug-free Sport during the 2016-17 financial year, reports as follows:

1. Introduction

On 10 and 11 October 2017 officials of the Office of the Auditor-General of South Africa (AGSA), Sport and Recreation South Africa (SRSA), Boxing South Africa (BSA) and the South African Institute for Drug-Free Sport (SAIDS) briefed the committee about the performance of SRSA, BSA and SAIDS in the 2016-17 financial year.

The Money Bills Procedure and Related Matters Amendment Act, Act 9 of 2009, sets out the process that allows Parliament to make recommendations to the Minister of Finance to amend the budget of a national department. In October each year portfolio committees must compile Budgetary Review and Recommendation Reports (BRRRs) that assess service delivery performance and evaluate the effective and efficient use and future allocation of resources. Committees may make recommendations on future use of resources. The BRRRs serve to inform recommendations of Standing and Select Committees on Appropriations and Standing and Select Committees on Finance on the Medium-Term Budget Policy Statement (MTBPS). A comprehensive review and analysis of performance trends during the previous and current financial year forms part of this process.

1.1.      Mandate of the Department of Sport and Recreation (SRSA)

In terms of the National Sport and Recreation Act, Act 110 of 1998, the Minister of Sport and Recreation has the legislative power to oversee the development and management of sport and recreation in South Africa. The main responsibility of SRSA is to develop national policies and guidelines for sport and recreation. The key implementers are the provinces and municipalities, as well as the South African Sports Confederation and Olympic Committee (SASCOC), and national federations.

1.2.      Mandate of Boxing SA and the South African Institute for Drug-free Sport

1.2.1.   Boxing SA (BSA)

In terms of the South African Boxing Act, Act 11 of 2001, Boxing South Africa is required to administer professional boxing, recognise amateur boxing, create and ensure synergy between professional and amateur boxing, and promote engagement and interaction between associations of boxers, managers, promoters and trainers. The main focus of Boxing SA programmes is improving governance and administration, boxing development and boxing promotion.

1.2.2.   South African Institute for Drug-Free Sport (SAIDS)

SAIDS is an independent corporate body established in terms of the South African Institute for Drug-Free Sport Act, Act 14 of 1997, and is responsible for providing leadership in the development of a national strategy concerning doping in sport, ensuring the adoption of a centralised doping control programme, which may subject any athlete to testing, with or without advance notice, both in and out of competition; ensuring that national sports federations and other sports organisations adopt and implement anti-doping policies and rules which conform with the World Anti-Doping Code and the requirements of the anti-doping policy and rules of the Institute; and to ensure, as far as reasonably possible, the establishment and maintenance of a World Anti Doping Association (WADA) accredited laboratory in the Republic of South Africa.

2.         Overview of key focus areas

2.1.      Key government policy documents

Sport and Recreation South Africa has aligned itself with the National Development Plan (NDP) and committed to implementation of Outcome 14, which seeks to create empowered, fair and inclusive citizenship. Social inclusion is an important condition for social cohesion, and sport and recreation can potentially play a significant role in these processes. At the heart of this process is the implementation of the transformation scorecard in order to change the profile of Team South Africa to reflect national population demographics. The purpose of the transformation focus of the SRSA is firstly, to correct the inadequate and unequal distribution of facilities and resources and secondly, to ensure an adequate pool of talent for future national sport teams.

The National Sport and Recreation Plan, as policy guideline for delivering sport and recreation opportunities, is not fully funded, and is being implemented in phases. By the 2016-17 financial year 23 per cent of NSRP objectives had been achieved, and 40 per cent had been partially achieved.

International Relations: The role of South Africa to influence the development of world sport was increased by its election to the Chairpersonship of the Intergovernmental Committee for Physical Education and Sport (CIGEPS) in February 2016. In addition, South Africa has been identified as one of four countries to pilot Quality Physical Education, which was developed by UNESCO (the United Nations Educational, Scientific and Cultural Organisation). The country continues to fulfil its responsibilities with the United Nations Sport for Development and Peace International Working Group (UN SDP IWG), UNESCO and WADA, amongst others.

2.2.      Outcomes-based approach

In 2009, the current administration adopted the outcomes-based approach, which requires improved coordination across all spheres of government and utilising empirical evidence to determine impact and future policy making and implementation. Sport and Recreation contributes to delivery in sub-outcome 3 of Outcome 14. To address the strategic intent of the NDP, SRSA has committed to:

• Increase the access of South Africans citizens to sport and recreation
• Provide mass participation opportunities
• Advocate transformation in sport and recreation
• Develop talented athletes by providing them with opportunities to excel
• Support high performance athletes to achieve success in international sport.

In its 2017-18 annual performance plan it was noted that, on 4 August 2016, governments from 32 Commonwealth countries committed to aligning their national sports policies to the Sustainable Development Goals in order to gear investments in sport towards positive outcomes in health, education, gender equality and justice. SRSA reported to be working very closely with global role-players and other Government departments to develop indicators for the sport sector that could have a meaningful impact on the achievement of the 2030 Sustainable Development Goals.

UN Sport for Development and Peace International Working Group: South Africa continues to play a leading role in projects of UNESCO and the UN Sport for Development and Peace International Working Group (SDP IWG).  In 2016, the work of the SDP IWG was hampered after the announcement that the UN Office for Sport for Development and Peace was no longer in a position to provide secretariat services to the SDP IWG without requisite funding and a formal memorandum of understanding (MOU). Under the chairmanship of South Africa the member states on the executive board (United Kingdom, Russia, China, South Korea and Denmark) objected to the requirement of concluding a legally binding MOU, and questioned the validity of regulating the relationship between working groups and individual offices in the UN Secretariat. The executive board further decided that, as the SDP IWG is functioning according to resolutions adopted by the General Assembly of the UN, guidance on the future existence and functioning of the SDP IWG should be sought from the newly elected UN Secretary-General. The committee anticipates that SRSA will report on these issues in its 2017-18 annual report.

3.         Previous recommendations by the Portfolio Committee on Sport and Recreation

3.1.      2015-16 BRRR recommendations, published in 2016

It was recommended in 2016 that the Minister for Sport and Recreation emphasise:

Regarding SRSA:

• Ensuring that the Community Sport programme receives attention and the necessary resources for its full implementation;
• Ensuring that the provincial departments of sport and recreation account for the funds that they have been allocated in accordance with National Treasury regulations and the PFMA;
• Completion of the proposal for alternative funding for sport through tax on ticket sales in order to ensure that the NSRP is adequately funded and ensuring that it is subsequently presented to the Davis Commission on taxation;
• Consultation with the Minister of Basic Education (DBE) and schools which have identified as sport focused schools to ensure that there are properly signed service level agreements between all the parties involved and value for money for service delivery standards that have been set;
• Delivering the appropriate and quality equipment to all targeted schools and clubs in order to encourage participation in sport amongst learners and community members;
• Building of sport facilities in rural communities;
• Pursuing the discussions with the Minister of Basic Education regarding the allocation of funds for school sport intra-school programme and the review of the Memorandum of Understanding;
• Ensuring that there is a systematic approach to identify talent at schools by federations including the establishment of school sport in their governance structure; and
• Capacitating the sport infrastructure programme, in order to ensure that it is able to fulfil its role of supporting the municipalities to build sport facilities through the allocated 15% p-Component of the MIG outside the formula.

Regarding SAIDS and BSA:

• Developing the necessary policies and controls;
• Consequence management; and
• Plans of action as instructed by the AGSA, monitoring, compliance with PFMA and supply chain management requirements.

3.2.      2016-17 Committee report on Budget Vote 40

The budgets of the SRSA, SAIDS and BSA were reduced in response to the economic downturn and the unfavourable currency exchange rate exacerbated the resultant constraints on operations.

• In its Budget Vote report for the 2016-17 financial year the Portfolio Committee on Sport and Recreation recommended that the Minister of Sports and Recreation:
• Emphasise the need for provincial departments to budget for sport and recreation from their equitable share budget allocated by provincial treasuries;
• Ensure that the department has clear performance indicators in line with the mandate of the sub-programmes within each programme;
• Ensure that the budget cuts and reduction of programmes are done in the most cost effective way to improve the delivery of programmes within the allocated resources;
• Ensure that the department is adequately resourced and prepared to roll out the sport infrastructure support programme through the use of the ring-fenced amount of the municipal infrastructure grant (MIG);
• Ensure that both entities, SAIDS and Boxing SA, adequately implement the recommendations of AGSA in order to address the challenges related to governance; and
• Ensure that the process of preparing draft legislation is expedited during the 2016-17 financial year.

3.3.      Committee review of revised Strategic Plan and Annual Performance Plans

SRSA had made technical adjustments to its Strategic Plan 2015-2020 to improve the indicators and targets and to adhere more strictly to the SMART principle of indicator development. There were no policy shifts, however in 2016, the department revised a number of priority implementations to promote social cohesion.

3.4.      Expenditure analysis summary

Expenditure against budget: 2014-15 to 2016-17

The department of Sport and Recreation had an available adjusted appropriation of R1.026 billion, of which they spent 99.7 per cent, leaving R2.9 million unspent. Transfers and Subsidies accounted for R749.8 million of the available budget, and of this amount the department transferred R749.4 million, or 99.9 per cent, mainly to provinces. This left an amount of R452 000 unspent.

Current payments: Current payments were allocated an adjusted amount of R272.7 million which was revised downwards by R1.9 million from R274.6 million. This economic classification only managed to spend R270.1 million, or 99.1 per cent, which left R2,5 million unspent. The current payments are made out of two (2) types of spending categories, namely compensation of employees and goods and services. Therefore, of the R272.6 million, the following amounts were allocated and spent on both compensation of employees and goods and services: 

- An amount of R101,5 million was earmarked for the compensation of employees with salaries and wages accounting for a larger portion of R90.0 million and only R101.3 million or 99.7 per cent was spent in this regard. This left R290 000 unspent.  

- An amount of R171. 0 million was earmarked for goods and services, with contractors, travel and subsistence allowances and advertising accounting for the larger portion of the allocation. Only R168.9 million or 98.7 per cent was spent at end of the financial year. This left R2.2 million unspent.

Of note is that the department incurred underexpenditure on each of these categories, however, there is more underexpenditure on goods and services, which might be the result of invoices not being paid within 30 days as required in terms of the Public Finance Management Act, Act 1 of 1999.

Transfers and Subsidies were allocated R749.8 million, and only transferred R749.3 million or 99.9 per cent, leaving an amount of R452 000 not transferred to provinces and municipalities. North West Province was penalised R330 000 or 5 per cent of their Provincial Mass Participation and Sport Development Grant allocations on their first trance after the Province did not comply with the gazetted Mass Participation and Support Development Grant Framework.    

Payments for capital expenditure were allocated an adjusted budget of R4.0 million with machinery and equipment accounting for the larger portion of the allocation, of which only R3.5 million, or 86.4 per cent, was spent, leaving R559 000 unspent. Of note is that most of the under expenditure was recorded under machinery and equipment. 

Spending by programme was as follows:

2016-17 Expenditure per programme

The table above, which sets out expenditure per programme for the 2016-17 financial year, indicates that Programmes 1, 2 and 3 have contributed to the overall under-expenditure in the department.

Programme 1: Administration was allocated R117.9 million, and spent R117.3 million or 99.6 per cent, leaving R489 000 unspent.

Programme 2: Active Nation was allocated R684.4 million, and spent R683.9 million or 99.9 per cent, leaving R420 000 unspent.

Programme 3: Winning Nation was allocated R63.1 million, and spent R62.7 million or 99.3 per cent, leaving R471 00 unspent.

Programme 4: Sport Support was allocated R147.3 million, and spent R147.1 million or 99.9 per cent, leaving R132 000 unspent.

Programme 5: Infrastructure Support was allocated R13.9 million and spent R12.5 million or 89.5 per cent, leaving R1.46 million unspent. The under-spending was caused by delays in finalising the sport infrastructure planning and oversight function. Of note is that the Department was allocated an additional R6 million during the year under review to capacitate Programme 5 (Sport infrastructure Support). However, delayed filling of identified vacant posts resulted in under-expenditure of ten (10) per cent of the allocation.   

3.5.      Conditional grants to provinces

In 2016-17, the Mass Participation conditional grant allocation was R555.7 million, of which 98.5 per cent was spent as follows:

Mass Participation provincial allocation (R’000)

Spending on conditional grants was satisfactory except for the North West province, which spent 87.1 per cent. For noncompliance the province was penalised R330 000 or 5 per cent of their next provincial transfer.

3.6.      2017 Treasury budget review information on conditional grants to provinces

The 2017 Treasury budget review indicates that arts, sports, recreation and culture will be bolstered by R32.5 billion over the medium term to promote a diverse and cohesive society with a common national identity. The funding is meant to support school sports, the indigenous games and sporting federations, and to promote equity, redress and transformation in sports.

3.6.1.   Municipal infrastructure grant (MIG)

The largest infrastructure transfer is made through the municipal infrastructure grant (MIG), which supports the Government’s aim to expand service delivery and alleviate poverty.

3.6.2.   Local government infrastructure grant review

The 2016 Budget review indicated that the National Treasury, in collaboration with the Department of Cooperative Governance (DCoG, the Department of Planning, Monitoring and Evaluation (DPME), South African Local Government Association (SALGA) and the Financial and Fiscal Commission (FFC) had reviewed the system of local government infrastructure grants. The structure of grants allocated to different types of municipalities was changed to reduce grant proliferation; improve asset management over the lifespan of municipal infrastructure; and enhance national grant support and oversight. Initial changes were implemented in 2015-16, and further reforms would be phased in over the 2016 Medium Term Expenditure Framework (MTEF) period.

The review concluded that there is substantial scope to improve the outcomes of the infrastructure conditional grants by enhancing the oversight and support provided to municipalities by the sector departments transferring conditional grants. Departments have been asked to identify and prioritise the resources they allocate to manage grants in their departments. The Municipal Infrastructure Support Agent would also play a greater role in helping municipalities improve their delivery of infrastructure, including through new regional management support contracts, which would have been be piloted in 2016-17.

The 2017 Budget review indicated that the MIG includes an amount of R300 million, which is allocated outside of the grant formula and earmarked for specific sport infrastructure projects identified by Sport and Recreation South Africa. In addition, municipalities are required to spend a third of the P-component (equivalent to 4.5 per cent of the grant) on sport and recreation infrastructure identified in their own integrated development plans.

4.         Financial and operational information for Budget Vote 40: SRSA

4.1.      Budget allocation and spending

The SRSA’s 2016-17 annual report reflects that it had spent 99,7 per cent of funds allocated in the financial year: R1.023 billion of an allocated R1.026 billion, and R2.978 million of appropriated funds will be surrendered. The R2.978 million in underspending was mainly under economic classifications Goods and services (R2.249 million), Transfer payments (R452 000) and Compensation of employees (R290 000).

Spending on compensation to employees is 99.7 per cent for the year under review.

• This was achieved because a virement of R5 million to goods and services was effected during the year  to enable the department to defray over-expenditure on departmental projects.
• The spending on Goods and Services is 98.7 per cent for the year under review.
• The under-expenditure occurred because of additional earmarked funds for MIG.

Spending on Transfers and Subsidies is R749 million; 99.9 per cent of the appropriated amount.

Transfers and Subsidies were allocated as follows:

• Provinces - R555 million which represents 99.9 per cent of the Transfers and Subsidies budget
• Nonprofit institutions (Clubs and federations) - 100 per cent of the Transfers and Subsidies budget, or R156 million
• Boxing SA and South African Institute for Drug-Free Sport – R32.9 million, or 100 per cent of the Transfers and Subsidies budget.
• Households – R4 million which represents 97.5 per cent of the Transfers and Subsidies budget
• The spending on payment for capital assets was 86.4 per cent for the year under review: Actual expenditure of R3.54 million of an appropriated budget of R4.1 million.

2016-17 Transfer payments (R’000)

Mass-Participation and Sport Development Grant:

North West Province was penalised 5 per cent, or R330 000, of their provincial Mass-Participation and Sport Development Grant allocations on their first trance after the province did not comply with the gazetted Mass-Participation and Sport Development Grant Framework.

Annual financial statements for the year ended 31 March 2017 - (R’000)

Expenditure trends of public entities - (R’000)

4.2.      Explanations of material variances from amounts voted (after virement)

The department was allocated an additional R6 million for the financial year under review to capacitate the department to deliver sport infrastructure projects in identified municipalities.

The department was not able to use all the funds, underspending by R1.8 million on this item. SRSA reported that it took longer than expected to fill vacancies in Programme 5: Sport Infrastructure Support. 

Per programme final appropriation actual expenditure variance (R’000)

4.3.      Auditor-General of SA (AGSA)

In the 2016-17 financial year prior period an administrative omission resulted in errors of R9.1 million and R40 000. The contract for an outdoor gymnasium was not captured, and overpayment had not been recovered from CATHSETA by the time the audit was conducted.

4.4.      Overall Challenges and Achievements

Performance and targets reported by SRSA, including observations 2016-17

• During the period under review, the department had 28 targets of which 23 were achieved, which translates into an achievement of 82 per cent of the targets.
• The department obtained a clean audit opinion on performance and financial information.
• The achievement was reached through 172 staff members working in functional units and task teams.
• R1.024 billion of the allocated R1.026 billion was spent, representing 0.03 per cent underspending compared to 1 per cent in the 2015-16 financial year.

Targets not achieved: Creditor payment age: Overall actual greater than 30 days.

Reason:

This could be attributed to system failures, among other things. For example, the 4th quarter transaction volumes put pressure on the (BAS) payment system, and some payments were not captured. In addition, disputed invoices that retain the original submission date even after resolution of the dispute caused payment delays.

Corrective Action:

To ensure that disputed invoices do not affect the overall invoice payment age the department is working on a system of isolating such invoices until the service provider corrects them.

Targets not achieved: ‘3 national school sport championship supported’.

Reason:  

Owing to financial constraints the Autumn national school sport championship could not be held in the fourth quarter of the period under review, and only two championships were held.

Corrective Action:

The Autumn national school sport championship was moved to Limpopo Province, and took place in the first quarter of the 2017-18 financial year.

Targets not achieved:  Number of people actively participating in organised sport and recreation events.

Reasons include:

• Conservative planning by provinces despite the financial allocations they receive from SRSA to contribute to the national targets.
• Some figures from provinces were disregarded because reports did not align with the technical indicator description.
• Reporting challenges: Where some claimed performance is not supported with evidence, thus being disregarded.

Corrective actions include:

• Analysis of the provincial 2017-18 business plan targets by SRSA, has led to the adjustment of all their conservative targets.
• Indicator verification guides have been drafted to assist provinces to interpret the technical indicator descriptions consistent with how SRSA interpret them.
• Engagement of provinces in this regard at various SRSA-provinces fora will also continue to take place.

Targets not achieved: The planned target on national and international sporting events, exhibitions or conferences used to showcase SA as a sports tourist destination.

Reason: Cancellation of Ekhaya, which had been scheduled to take place in support of the South African Olympic and Paralympic athletes in Rio, because of a moratorium on international travels – a cost containment measure communicated by the Office of the President of the Republic of South Africa.  

Corrective Action: None

Targets not achieved: Sport Support - National federations entering into transformation barometer agreements with the Minister:

Reason: Lengthy consultations with relevant stakeholders.

Corrective Action:  The SRSA has prioritised the signing of these agreements because of their impact on transformation assessments. The intention is to go on a drive to get all priority codes signing and not following the piecemeal signing approach.

4.5.      Factors contributing to SRSA not achieving targets

• The agreement with the Department of Basic Education towards implementation of school sport remained problematic. A new agreement, which will require vigour and commitment from the two departments at national and provincial level, has been drafted. Several engagements at different levels between the two departments have already taken place.
• Legislation that does not fully support SRSA strategy. Efforts to amend or introduce the legislation such as the National Sport and Recreation Act, South African Institute for Drug-free Sport Act and Combat Sport Bill, as well as related regulations, are moving at a slow pace because of other national priorities.
• Sport Support: Financial constraints and uneven distribution of resources across the sporting codes remain a major challenge. A significant number of federations still do not have proper administration resources, that is human and other office infrastructure resources, which impede the effective governance of sport in general.
• Sport Facilities: The R300 million MIG Fund project identification was a challenge since not all municipalities cooperated especially on the issue of the suggested transversal tender. Municipalities wanted to use their own procurement processes in undertaking the MIG projects. This was resolved by allowing municipalities to appoint their own professional service providers (PSPs).
• 2022 Commonwealth Games: Although Cabinet had approved, in August 2015, the hosting of the 2022 Commonwealth Games, the country had to withdraw in 2017 because of the associated financial risks.
• Insufficient funding towards implementing the NSRP adequately: The sport delivery system continues to be impacted by budget constraints and the absence of adequate equitable share to implement the NSRP adopted by the sports movement and approved by Cabinet.

5.         Programme performance of SRSA in the 2016-17 financial year

5.1.      Programme 1: Administration

65 employees were trained in accredited/non-accredited training courses. This amounts to 38 per cent of filled posts.

Employment and vacancies by programme as 31 March 2017

The internal perception survey that was conducted revealed again that, overall, staff members were motivated, and aware of the capacity challenges. The results continued to assist the department to engage labour unions from an informed position.

Employment and vacancies by salary band as at 31 March 2017

5.2.      Programme 2: Active Nation

The number of people actively participating in sport and recreation promotion campaigns and events was exceeded by over 10 000, because of increased interest from communities, especially in mass-based events such as the Big Walk. This target relates to SRSA-led activities.

In addition to the usual national summer school championship (held in Johannesburg, Gauteng), the school sport programme implemented one other national championship in 2016 (Winter Championship), in Durban, KwaZulu-Natal. The two events reached at least 7 925 participants. The number of learners participating in school sport tournaments at a district level exceeded the target by over 28 000 participants. More schools have shown interest to participate in the programme, as some of the tournaments were a stepping stone towards participation in the provincial and national school sport championships.

The number of schools, hubs and clubs provided with equipment and/or attire in terms of established norms and standards, was exceeded by over 460 beneficiaries. The outreaches undertaken by political principals, added to the increased support of schools, clubs, and hubs.

Six sport and recreation campaigns and events were successfully hosted: Youth Camp, Move for Health, Big Walk; National Recreation Day; Indigenous Games Festival; and the Unite Campaign (implemented through the Andrew Mlangeni Golf Development Day, 67 Minutes of Mandela, and the Basketball National League).

Sport academies supported: Because of the high demand for scientific support, especially ahead of major events in 2016, more district academies were supported to further support athletes.

There was also intensified engagement of provinces for submission of performance evidence. In addition, SRSA withheld funds to provinces that were not complying to the set performance and/or reporting arrangements. As a result, the target for number of athletes supported by sports academies was exceeded by at least 958 and the target for academies supported was exceeded by 3. 

5.3.      Programme 3: Winning Nation

The Ministerial Sport Bursary Programme benefited 66 talented athletes. These athletes are placed in accredited sport focus schools. If there are no sport focus schools close to their homes they are place at non-accredited schools with good sport and academic programmes. The number excludes learners identified at the 2016 championships. The target for ‘number of athletes supported through the scientific support programme’ was exceeded by 279 athletes because of the increased need for support to potential Rio Olympics and Paralympics athletes, as well as athletes who had been earmarked for the African Union Sports Council (AUSC) Region 5 activities. Seven athletes’/team recognition events were held during the period under review, because of good performances displayed at various international events such as the Olympics and Paralympics, as well as the hosting of the national sports awards and the regional sports awards.

Four drug-free support agencies: SAIDS, WADA, CDA and Regional Anti-Doping Organisation (RADO), were supported during the period under review.

Four major international events that received ministerial approval received intra-governmental support as planned: African Sprint Canoe Championships, held from 01-03 April 2016 at the Shongweni Dam, KwaZulu-Natal; World Masters Squash Championships, held from 23-30 September 2016 in Johannesburg, Gauteng; CANA Senior Aquatic Championships, held from 02-09 October 2016 in Mangaung, Free State; and the World Blind Bowls Championships, held from 20-31 March 2017 in Cape Town, Western Cape. In addition, 8 events were supported in aspects such as visa assistance, NATCCOM services, and ports of entry liaison.

5.4.      Programme 4: Sport Support

Sport and recreation bodies receiving financial and non-financial support per year: There was improved compliance by sport and recreation bodies. This enabled the department to allocate funds to an additional 8 sport and recreation bodies. Forty-one (41) federations, one over the target of 40, pledged support for the Code of Conduct. 

Bilateral exchange programmes were conducted with Cuba, India, Bulgaria, Zimbabwe, and Jamaica.  The multilateral engagements supported by the department relate to: African Union Sports Council (AUSC) Region 5 Executive Committee, WADA Independent Testing (ITA) Steering Group, UN International Working Committee on Sport, and UNESCO.

5.5.      Programme 5: Sport Infrastructure Support

This programme achieved 100 per cent against its set targets. The second phase of the facility count, the precursor to a fully-fledged facilities audit, has been completed, and the target for facilities audits has been limited to one provincial audit per financial year owing to funding constraints. The SRSA continued supporting municipalities with technical aspects of facility construction.

6.         Public entities

6.1.      Boxing SA (BSA) 2016-17 financial year

1. Boxing SA reported that by 2016-17 internal capacity had been restored with a stable administrative structure; the frequency of legal disputes between BSA and its licensees had been reduced significantly, and no new matters went to court during period under review;
2. A framework for broadcasting of boxing had been agreed to with the national broadcaster and was being rolled out;
3. South African boxers started to compete in the major boxing world titles again and in the 2016/17 financial year, South African boxer Zolani Tete won a WBO world title;
4. BSA reintroduced the Boxing Awards in the 2016-17 financial year, alongside the Women in Boxing and licensee training programmes

6.1.1.   Situational analysis

In its strategic plan the BSA board outlined the following priorities for the 2017-18 financial year:

1. Need to maintain balance between the Core Function and Support Service functions;
2. Need to strengthen legal capacity through increased support towards the legal commission;
3. Need to prioritise finalisation and implementation of revenue generation strategy;
4. Need to strengthen administrative capacity, particularly the policy environment, internal audit capacity and office space;
5. Need to support BSA licensees more, particularly to establish licensees’ associations and with regard to training.

The BSA board completed its three-year term of office at the end of the 2016-17 financial year. The BSA Board was appointed on 18 May 2014 during a period when BSA faced a number of challenges:

1. Weak internal capacity and a number of labour relations disputes which resulted in the termination of services of the CEO, the CFO, the COO (Director: Operations), Manager: Finance, Manager: HR;
2. Frequent disputes and litigation between BSA and its licensees, characterised by a general culture of noncompliance with the SA Boxing Act and regulations;
3. Declining broadcast coverage of boxing in the mainstream media, resulting in many promoters being sidelined as jousting for the broadcast rights escalated.
4. Declining activity and dominance of South African boxers in the rankings of major sanctioning bodies in international professional boxing (WBA (World Boxing Association), WBC (World Boxing Council), WBO (World Boxing Organization) and IBF (International Boxing Federation)) and
5. Inconsistent publication of South African boxing ratings and unreliable tournament sanction systems.

By the 2016-17 financial year internal capacity was restored with functional board committees and a stable administrative structure headed by a chief executive officer, and BSA had filled 80 per cent of approved and funded posts.

The frequency of legal disputes between BSA and its licensees had been reduced, and no new matters went to court during period under review. A framework for boxing broadcasting had been agreed upon with the national broadcaster and was being rolled out, and BSA reintroduced the Boxing Awards.

6.1.2.   Organisational environment

BSA sanctioned only 75 tournaments in 2016-17 compared to 89 in the 2015-16 financial year. The decline is ascribed to BSA’s stronger emphasis on compliance and reduced Government assistance.

6.1.3.   Performance overview for Boxing SA

Purse money:  To ensure that no boxer was owed purse money for tournaments sanctioned by BSA they paid R1,3 million to boxers and officials from the two tournaments hosted by Mamali and Sijuta Promotions.

Disciplinary processes:  BSA concluded the disciplinary process against Sijuta Promotions in respect of the outstanding purse money from the tournament held in April 2016, resulting in suspension of Sijuta Promotions and further action to legally recover the money owed.

Support to associations:  As part of continued support to licensees’ associations BSA held bilateral engagements with the full executive committee of the Eastern Cape Promoters Association after they escalated their grievances to the Portfolio Committee of Sport and Recreation.

Ring officials:   From 10 to 11 November 2016 BSA held the first seminar for all BSA ring officials since 2004 at Elandsfontein in Gauteng. The event was attended by 89 ring officials.

SA Boxing Awards was hosted in partnership with SABC, Ethekwini City and the KwaZulu-Natal department of sport.

Women in Boxing: BSA appointed four female promoters to host four tournaments as part of Women in Boxing programme.

Internal auditor: In the third quarter of the 2016-17 financial year BSA appointed an appropriate audit firm to serve as BSA internal auditor after SRSA's internal audit services to BSA were withdrawn.

Debt collection: BSA commenced with civil claims against two promoters for purse money they still owed, and against the Premier Boxing League (PBL) in respect of prize money owed to BSA licensees. Debt collection was mostly from promoters owing money to BSA. The dispute by promoters about the percentage of earnings payable to BSA was under arbitration when the audit was conducted.

6.1.4.   Challenges raised by BSA

BSA identified the need to:

1. Improve communications between BSA and its licensees, particularly boxers, managers and promoters.
2. Continue, in a gradual but consistent manner, to enforce compliance and overcome inertia or resistance.
3. Intensify boxing training programmes, starting with the development of boxing-specific training materials and including assessments criteria in the licensee application process.

6.1.5.   Concerns flagged during discussions with BSA

1. BSA is a regulator and not responsible for SANABO’s mandate;
2. The director-general of SRSA was of the opinion that BSA should have been a 3c entity instead of a 3b entity (in terms of Treasury regulations) from the outset, since it was unlikely that BSA would be able to generate money to sustain themselves in the foreseeable future, because only a handful of promoters were able to sustain commercial success and sell their product to the SABC. He said that most promoters, after paying their licences, expected government subsidies;
3. Cost of governance policies and complying with supply chain management regulations was comparatively high for small entities;
4. Irregular expenditure reported by the AGSA because BSA did not align their remuneration policy to legislation for the public sector as defined in the Boxing Act, (amounting to R98 838) had resulted from regulatory stipulations in terms of the Public Service Act and outstanding alignment of benefits for entities such as BSA. BSA had found itself in a regulatory bind, since their staff remuneration was aligned to the Public Service Act in terms of which regulation dictated that employees could not get the same benefit if they did not use the Government Employees Medical Scheme (GEMS). BSA reported to have applied for years to be able to use GEMS, and that they were discussing the matter with the Department of Public Service and Administration, which was considering BSA’s case, and had provided a list of things BSA needed to do. It was, however, flagged as irregular expenditure also for the 2016-17 financial year. The Department of Public Service and Administration informed BSA that at least one other public entity, SASSA, had a similar problem.

6.2.      SA Institute for Drug-free Sport (SAIDS) - 2016-17 financial year

After the suspension of SAIDS’s primary doping control service provider, the SA Doping Control Laboratory at the University of Free State in Bloemfontein, the accreditation of the backup laboratory in Qatar was also suspended. SAIDS’s contingency plans ensured minimal disruptions to the implementation of the national test distribution plan. 

The national testing programme continues to catch a high number of doping offenders, and South Africa continues to report a higher average of positive dope tests in comparison to the international average. Though the SAIDS antidoping education programme has expanded to the different tiers of sport, including schools, they continue to see a cavalier attitude towards steroid use and cheating among some sports people.

The term of the current SAIDS board expired in October 2017. The board leaves a legacy of an agency that is ISO 9002 certified and fully compliant with the World Anti-Doping Code.  SAIDS operates as an independent public entity in sport with jurisdiction over all sports codes and entities which are recognised by SASCOC and/or are signatories to the World Anti-Doping Code.

The performance environment of SAIDS is influenced by the ability, status and WADA accreditation of the independent SA Doping Control Laboratory, since doping control samples can only be analysed at accredited laboratories, therefore, when the WADA accreditation of the Bloemfontein laboratory was suspended during the year under review, SAIDS had to send samples to accredited back-up laboratories overseas. The cost of transferring samples overseas is influenced by international foreign exchange rates and international courier costs, and cost of doping testing increased, predominantly owing to the weak South African currency and increased courier costs, as well as the larger South African 2016 Olympic team.

6.3.      Concluding comments on financial and service delivery performance

The financial performance of SRSA continues to inspire confidence in how the department is able to channel its resources effectively and efficiently to achieve its goals. Whilst the department receives comparatively little funding, it manages to implement sport programmes, and Boxing SA and SAIDS have performed exceptionally well in light of the challenges they faced.

7.         Observations and concerns

1. The SRSA’s recognition that it operates in a service delivery environment and that successful delivery of SRSA programmes depends on inter- and intra-governmental cooperation with departments such as Health, Basic Education, Cooperative Governance and Traditional Affairs, as well as Arts and Culture indicates the department’s willingness to honour the Government’s August 2016 commitment to aligning the national sports policies to the Sustainable Development Goals in order to gear investments in sport towards positive outcomes in health, education, gender equality and justice;
2. Though the Move for Health day and Golden Games, two of the few recreation programmes which are not sport related, were no longer included in the department’s delivery targets for the 2016-17 financial year, SRSA continued to partner with the Department of Health and the Department of Social Development in delivering programmes.

7.1.      SAIDS

1. SAIDS has a high burden of compliance and spends in excess of R 1 million to account for an annual budget of R22 million. Apart from the Public Finance Management Act (PFMA) and Treasury regulations, it has to ensure compliance with the SAIDS Act, the World Anti-Doping Code (the Code), and the UNESCO Convention against Doping in Sport;

1. SAIDS’s sustainability analysis indicated that is underfunded by an estimated R5.7 million annually over the medium term in order to (i) comply with WADA and the testing targets for priority sports codes, (ii) adhere to national compliance requirements, (iii) follow up and prosecute steroid manufacturing and trafficking (horseracing), (iv) implement a comprehensive schools testing programme and (v) implement a comprehensive antidoping curriculum (life orientation) in high schools;
2. A number of South African learners and the proportionally higher percentage of South African athletes compared to the international baseline tested positive for performance enhancing substances;
3. Failing to respond to the financial demands of the entity’s mandate by funding SAIDS appropriately will necessitate reduced testing for sports doping, which will have negative consequences for South African athletes’ ability to compete internationally. SAIDS is unable to control the expense of testing for illegal doping in sport, since the required minimum number of doping tests is prescribed by WADA. In addition, SAIDS has to pay laboratories abroad at fluctuating exchange rates whilst maintaining chain of custody for samples it sends overseas;
4. It is perplexing that more support and priority is not given to ensuring full functionality of the Bloemfontein laboratory, which is the only remaining one of its kind on the African continent, not only because it serves the region, but also because South Africa experienced the exorbitant financial impact of losing accreditation of the Bloemfontein laboratory.

7.2.      BSA

a)         Cost of governance and compliance with Treasury regulations is high for small entities such as BSA, which is subject to standard Treasury compliance requirements, also for supply chain management. For instance, BSA needs 15 people to comply with the requirement to have five-person committees for bid evaluation and adjudication et cetera, before procurement can be effected;

b)         The finding that BSA incurred irregular expenditure for the 2016-17 financial year by not aligning their remuneration policy to legislation of the public sector as defined in the Boxing Act, is in the opinion of the committee the result of catch 22 regulatory stipulations in terms of the Public Service Act, and outstanding alignment of benefits for entities such as BSA;

c)         BSA’s internal controls had failed, however the shortfall was not necessarily financial, and weakness had been identified in terms of sponsorship; 

d)         The board of BSA is commended for the turnaround achieved since 2014, however, the list of outstanding achievements deepens the committee’s grave concern about the existing realities in the South African boxing environment, and indicates that many of the factors which had contributed to the decline of the code remain to be dealt with by BSA and stakeholders;

e)         Provincial management of boxing is not functioning optimally yet, and has not been appointed in all nine provinces. BSA reported that they had found it difficult to deliver provincial boxing tournaments;

f)          By the time this report was written the committee had not received information about which promoters were in charge of what, and who controlled the broadcasting of bouts on SABC;

g)         It is the duty of the committee to alert the House to the fact that many South African boxers suffer hardship. The plight of a large portion of the boxing fraternity appears, at first glance, to be the product of the cumulative impact of a number of realities in the boxing milieu which has eventually resulted in what amounts to effective abuse;

h)         The need has been identified to address promotion of amateur and professional South African boxers;

i)          The committee notes the comment by the CEO of Boxing SA that, in order to address inclusivity, there was a need to look at the Boxing Act and regulations, the PFMA, as well as the practical difficulties of other departments, promoters, and boxers;

j)          Only a handful of promoters in South Africa reportedly have the capacity at present to package and market boxing events in a financially sustainable manner and without requiring subsidisation from the Government.  There is therefore compelling motivation for creating additional opportunities and forums for the boxers at grassroots level to compete, and to enable the South African public to attend bouts or access televised broadcasts;

k)         The committee hopes that the dire current financial and economic position and outlook for sport codes and the local sport economy will be addressed in the legislation and regulations that are being drafted, and that the Department of Trade and Industry will be consulted on remedies for practices contributing to constraints experienced in the boxing fraternity.

7.3.      Sport and Recreation South Africa

a)         The Committee notes the high level of under expenditure on goods and services which affects the procurement from small, emerging businesses and cooperatives. This is linked to the continued noncompliance with the 30-day deadline for paying service providers and the manner in which disputed invoices were being dealt with remains a concern.  The SRSA’s strategy to overcome underperformance in achieving the indicator for Creditor payment age, which requires paying invoices within 30 days, addresses one of the causal factors the department had identified, but in its latest annual report the department does not make reference to the other factor it has identified, namely that some payments are not captured because of system failures. The SRSA observed that such failure occurred especially when 4th quarter transaction volumes put pressure on the (BAS ) payment system. The SRSA’s immediate solution to comply to the creditor payment age requirement  is to implement a system of isolating disputed invoices to ensure that such invoices do not affect the overall invoice payment age. The department intends to continuously engage with the service providers prior to invoicing, and disputed invoices will have to be re-dated after resolution.

b)         Implementation of programmes in provinces remains a challenge, and provinces’ late submitting of evidence impacts negatively on SRSA’s reporting. The committee had expressed concern about late reporting on several occasions. After receiving the department’s 2016-17 first quarter performance report the committee raised concern about provinces' noncompliance with reporting deadlines for Programme 2;

1. The discrepancy in provincial and national targets for achieving indicators illustrate the urgent need for a constructive nationwide engagement of role players to find an operational solution of current delivery problems caused by what appears to be a disjuncture between national and provincial vision and understanding of roles, achievables and resources. In the 2016-17 financial year the SRSA reported missing a target because of lengthy transformation agreement consultations with national federations; therefore the 2017-18 financial year presents the ideal opportunity to review indicators, or refine targets for indicators over which SRSA has limited control;

d)         SRSA is commended for ensuring that its service to the nation remains current and relevant by conducting one-on-one sessions with the programme managers during October 2016 when reviewing its 2015-2020 Strategic Plan. Whilst the 2017-18 Annual Performance Plan identified no significant policy shifts and no substantial changes in the service delivery environment that would impact on operations, the department’s narrative reflects a dynamic and responsive mindset;

e)         The committee noted the department’s reliance on delivery agents such as provincial departments responsible for sport, and recognised that, whilst SRSA transferred conditional grant funding to provinces for delivering sport and recreation goals, delivery agents  also had their own provincial priorities;

f)          The postponement of the 2016 autumn national school sport championship indicates that the issue of provinces not having the capacity to host school sport championships has not been resolved;

g)         School sport and physical education are lagging behind; and there is no dedicated school sport day yet;

h)         It has become clear that transformation requires a cluster approach and that that physical education in schools is important, although the Department of Basic Education has indicated that it would not yet be promoted to a standalone subject;

i)          The implementation of the MIG funding for sport and recreation facilities is a challenge for provinces which needs to be addressed;

j)          School sport and the MIG are central to effecting transformation, but transfers to some provinces had not been not spent;

k)         Many multipurpose facilities have not been handed over to communities, which caused conflict in communities and between communities and schools;

l)          Only by the first quarter of 2017/18 does SRSA’s organogram reflect that it has appointed a director for facilities support in programme 5;

m)        SRSA was allocated R24 million of the MTEF period to provide oversight and support to municipalities for the delivery of sport infrastructure projects. The department’s implementation is halfway through the period where the funding for their new capacity is ramping up, which is an opportune juncture for the department to account to the committee on what they have done with the funds;

o)         The MIG R300 million municipal facilities project (outside the formula) was a pilot. The concern of the committee is monitoring and accountability and the location of performance indicators; since it appears as if no national or provincial government department has performance indicators for this expenditure. The money had been allocated on provision that it was a pilot project, and the committee wishes to establish from Treasury what criteria are applied to inform the decision to extent or amend the arrangement;

p)         The committee has found that it was not able to monitor sponsorship effectively because of insufficient reporting and unavailability of information about sponsorship. A solution is needed on how to obtain  the requisite quality of information from the broad perspective down to inclusive and detailed information to reflect all layers of sponsorship, not only financial, but also about items such as trips and tracksuits. The question remains how to mediate the private and public interest in sponsorship for federations.

8.         Recommendations

Based on the analysis of the Department’s budget and the entities for the year under review (2016-17), the Committee recommends that the Minister for Sport and Recreation emphasise the following imperatives and urgent matters: 

a)       Implementation of the recommendations of AGSA as reflected in the 2016/17 annual reports of SRSA, SAIDS and BSA, including:

i) Submitting and implementing action plans to address control deficiencies indicated in audit findings for Boxing SA and SAIDS;

ii) Submitting regular reports on the action plan by SAIDS and the SRSA on the accreditation by WADA for the Bloemfontein laboratory, and

iii) Submitting and implementing an action plan on addressing performance information reporting from provincial departments with a view to optimising indicators and targets for indicators over which SRSA has limited control;

b)      Commitment to effecting optimal spending of provincial allocations, aligning provincial performance indicators to national goals, and mutual and active cooperation by national, provincial and local government partners as pivotal delivery agents of sport and recreation to citizens in districts and municipalities nationwide;

c)       Initiating an audit of sport clubs nationwide in support of their indispensable role in the supporting and facilitating of sport from amateur to professional level;

d)      Setting up a roadshow to the provinces, together with the national committee on sport and recreation, inviting all stakeholders and interested persons to make input on the current transformation policy;

e)       Emphasising the responsibility of the SRSA as well as provincial and local government delivery partners to include gender and disability in programmes and budgets, and to educate, canvass and inform stakeholders and participants accordingly;

f)       Optimising policies on grants such as the municipal infrastructure grant (MIG) for sport and recreation and all other facilities with a view to effecting transformation;

g)       Coordinated performance targets with implementation partners for the delivery of sport infrastructure projects funded through the special R300 million allocation outside the MIG formula;

h)       Monitoring utilisation of the 15% allocation of Municipal Infrastructure Grant funds to build sport and recreation facilities and submission of detailed financial and operational monitoring reports for all projects at the respective municipalities to Parliament and delivery partners with a view to developing best practice and ensure accountability;

i)        Motivating for adequate funding to implement the National Sport and Recreation Plan to ensure delivery in terms of the National Development Plan;

j)       Initiating dialogue a formal multi-year Memorandum of Agreement on broadcasting of boxing with the national broadcaster, SABC;

k)      Engaging on best practice to mediate the private and public interest in sponsorship for federations;

l)        Cooperation with the Departments of Health and Basic Education in achieving the transformation of sport and recreation, and building a talent pool from all walks of life;

m)      Scrutinising the impact of legislation and regulations on respective stakeholders in South African boxing with a view to optimising inclusivity;

n)       Addressing (i) practices that cumulatively amount to, or directly result in, abuse of South African boxers and aspects of (ii) promotion of amateur and professional boxers.

Report to be considered.