ATC140711: Report of the Portfolio Committee on Arts and Culture on Budget Vote 14: Department of Arts and Culture, dated 10 July 2014

Arts and Culture


The Portfolio Committee on Arts and Culture, having considered the 2014/15 budget and the Annual Performance Plan (APP) of the Department of Arts and Culture, Vote 14, reports as follows:

1 Introduction

1.1 The Portfolio Committee on Arts and Culture (hereafter referred to as the “Committee”) considered the 2014/15 budget of the Department of Arts and Culture (hereafter referred to as the “Department) as part of its oversight function over the Department as mandated by the Public Finance Management Act (Act No 1 of 1999) and Money Bills Amendment Procedure and Related Matters Act (Act No 9 of 2009). The Department briefed the Committee on its 2014/15 budget on 01 July 2014.

2 Background

2.1 The aim of the report is to present an intensive analysis of the 2014/15 budget of the Department of Arts and Culture. This will assist the Committee to fulfill its monitoring and oversight functions effectively. This analysis particularly enables the Committee to monitor and oversee the Department’s expenditure of public funds and the impact of service delivery.

2.2 Information contained in the report is based on the Department’s 2014/15 APP, 2014/15 budget, as well as the 2014 Estimates of National Expenditure (ENE) as tabled in the National Assembly.

2.3 The Report presents a programme-by-programme summary of the Department’s budget, an overview of the key observations and recommendations made by the Committee.

3 Committee Observations

3.1 The Department derives its mandate from the Constitution of the Republic of South Africa (Act No. 108 of 1996) with specific focus on language and culture, access to information and, to some extent, education.

3.2 The work of the Department is central to the implementation of Chapter 15 (Transforming society and uniting the country), of the National Development Plan (NDP) Vision 2030. The President of Republic of South Africa has assigned the Department the responsibility to lead Outcome 14 ( Nation Building and Social Cohesion ) of the 2014-2019 Medium Term Strategic Framework.

3.3 Through the implementation of the Mzansi Golden Economy (MGE) strategy, a strategy developed during the 2009-2014 term, the Department aims to contribute to national priorities of job creation and economic development.

3.4 Going forward into the medium-term, the Department further aligns its work with the NDP as well as the Medium Term Strategic Framework through contributing to quality education and rural development.

3.5 The Department will work towards achieving the above plans by continuing with programmes which places artists in schools to improve the teaching of arts in basic education and by building arts, culture and heritage infrastructure in rural areas. This infrastructure includes community libraries, arts centres, building heritage infrastructure and monuments.

4 Budget Overview

4.1 Strategic Goals of the Department of Arts and Culture

The Department of Arts and Culture aims to achieve the following objectives:

· Job creation

Create 150,000 decent jobs in the arts, culture and heritage sector by 31 March 2016 .

  • Human capital development

Implement targeted programs that are geared towards human capital development in the arts, culture and heritage sector by 2014.

  • Access to information

Enhance access by citizens and public institutions to accurate, reliable and timely information in their language of choice through the provision of archives, libraries, and language services .

  • Linguistic diversity

Entrench linguistic diversity in a manner that facilitates equitable cultural expression by citizens and communities.

  • Development, protection, preservation and promotion of arts, culture and heritage

Enhance capacity of the sect or through equitable and sustainable development, protection and preservation of arts, culture and heritage (through policy development, legislative promulgation and implementation).

  • Governance and accountability

Align public sector art, culture and heritage institutions around a shared vision, common mandate and strong governance and accountability.

4.2 Overview of the 2014/15 Budget

National Treasury has approved the revised budget programme structure which came into effect at the beginning of the 2014/15 financial year. This approved budget programme structure takes into account new developments in the form of the emphasis on nation building, social cohesion and job creation, as well as ensuring that the Department’s organisational structure is aligned with its strategy. The number of budget programmes has decreased from six in the 2013/14 financial year to four in 2014/15.

For the 2014/15 financial year, the total budget allocation is R3.5 billion. Relative to the 2013/14 financial year, during which the budget was R2.9 billion, this translates into an increase of 20.9 per cent. The actual increase, after the projected inflation rate of 6.2 per cent is taken into consideration, is 13.9 per cent (or R404.1 million). Approximately R2.8 billion, or 80 per cent, of the total budget allocation is spent by the entities of the Department, namely on transfer payments to entities, provinces, etc., while R698 million, or 20 per cent, is spent by the Department.

The Department’s spending focus over the medium-term will be on implementing the MGE, nation building and social cohesion strategies through Programmes 2 and 3.

In the current budget Programme 4 receives the largest portion of the budget in 2014/15. The total allocation for this programme is R2.2 billion, or 61.4 per cent of the total budget allocation. This is due to the Department’s continued efforts to increase access to community library services and heritage institutions. Programme 3, which receives the second largest allocation, sees the implementation of the MGE strategy as well as the Department’s contribution to human capital development through awarding sector-specific bursaries.

Infrastructure spending is another driver of spending over the medium-term. With the implementation of new construction projects, spending on legacy projects is expected to increase from R71.2 million in 2013/14 to R82.1 million in 2016/17. A number of small projects on upgrading, restoration and maintenance of existing arts, culture and heritage infrastructure are to be carried out over the medium-term at an estimated total cost of R1.2 billion.

It should be noted that Cabinet approved budget reductions of R10.6 million over the medium-term. These reductions have mainly been introduced in spending on the MGE strategy projects and the transfer to the National Arts Council.

4.3 Programme Analysis

Table 1: Programme allocations over the medium-term


Medium-term expenditure estimates

R thousand




Programme 1: Administration




Programme 2: Institutional Governance




Programme 3: Arts and Culture Promotion and Development




Programme 4: Heritage Promotion and Preservation








Figure 1: Budget allocation per programme for 2014/15

A. Programme 1: Administration

The purpose of this programme is to provide leadership, management and support functions of the Department. In the 2014/15 budget, this programme now features a sub-programme titled Office of the Chief Financial Officer. The budget allocation for Programme 1 reflects a percentage change of -2.5 per cent (or R5.8 million) for the 2014/15 financial year. However, the real percentage change is -8.2 per cent over the same period. This represents a real decrease amounting to R19.1 million.

B. Programme 2: Institutional Governance

This programme will coordinate and manage all cross-cutting functions of the Department and its public entities and provide support and oversight to these public entities. Programme 2 is a new programme in the 2014/15 budget. Its introduction to the budget programme structure speaks to one of the Department’s strategic goals over the medium term which seeks to align public sector art, culture and heritage institutions around a shared vision, a common mandate, and strong governance and accountability. It will potentially address the recommendations made by the Committee in its 2013 Budgetary Review and Recommendation Report (BRRR) which expressed concerns about legislative and financial compliance, skill shortages, performance and general cooperation between the Department and its entities. The programme is allocated R99.8 million for the 2014/15 financial year.

C. Programme 3: Arts and Culture Promotion and Development

The purpose of Programme 3 is to promote and develop arts, culture and languages. From Figure 1 above, it can be observed that this programme received the second largest allocation of the total budget, i.e. R1.0 billion or 29.3 per cent.

Programme 3 will, inter alia , implement the MGE strategy and build capacity in the arts and culture sector by awarding bursaries. The budget allocation for this programme is divided amongst its sub-programmes as follows:

Table 2: Programme 3: Arts and Culture Development



Percentage of total programme budget

R thousand

1: National Language Services

49 160


2: Pan South African Language Board

83 497


3: Arts and Cultural Development

335 487


4: Performing Arts Institutions

319 161


5: National Film and Video Foundation

111 588


6: National Arts Council

91 865


7: Capital Works of Performing Arts Institutions

42 118



1 032 876

100.0 %

Sub-programme 3: Arts and Culture Development receives 32.5 per cent of the programme budget. This sub-programme implements the majority of projects for the MGE strategy and supports the creative industries in a number of ways including stakeholder forums, providing training and supporting projects.

Sub-programme 4: Performing Arts Institutions receives the second largest portion of the programme budget, i.e. 30.9 per cent. This sub-programme transfers funds primarily to performing arts institutions for operations and capital works.

D. Programme 4: Heritage Promotion and Preservation

The purpose of Programme 4 is to preserve and promote South African heritage, archival and heraldic heritage, and funding of libraries.

Programme 4 enjoys the bulk of the total budget amounting to 61.4 per cent or R2.2 billion. This is understandable as Programme 4 and Programme 3 are the two programmes which most directly speak to the Department’s mandate and the aim of the budget vote.

Programme 4 is structured essentially to:

· transform heritage and heraldry landscape;

· award bursaries for heritage studies;

· promote national identity, nation building and social cohesion;

· facilitate the creation of jobs within the sector; and

· transform heritage, archives and library sectors.

Table 3: Programme 4: Heritage Promotion and Preservation



Percentage of total programme budget

R thousand

1: Heritage Promotion

74 047


2: National Archive Services

46 234


3: Heritage Institutions

594 702


4: National Library Services

104 755


5: Public Library Services

1 039 825


6: Capital Works

192 326


7: South African Heritage Resources Agency

47 417


8: South African Geographical Names Council

8 575


9: National Heritage Council

55 917



2 163 798


The bulk of the budget for Programme 4, i.e. 48.1 per cent (just over R1 billion) is allocated to Sub-programme 5. This sub-programme transfers funds to provincial departments for the community library services conditional grant for constructing and upgrading libraries, employing staff and procurement of library materials. This budget allocation is in line with the Department’s strategy to align its work with the NDP.

Sub-programme 3 provides funds for declared cultural institutions and heritage bodies that work towards heritage preservation, protection and promotion. This sub-programme is allocated 27.5 per cent (R594.7 million) of the total budget for the programme which is transferred in full to heritage institutions.

5 Committee Findings

5.1 Technical errors

Upon examining the Department’s APP, the Committee has identified the following critical issues of concern:

5.1.1 The Department has an indicator entitled “Governance of DAC public entities strengthened”. The target for this indicator however excludes the analysis of draft APPs of entities. As a result of this exclusion the following entities did not comply with the National Treasury Framework for Strategic Plans and Annual Performance Plan:





National Heritage Council

Not signed off by the Chairperson of Council.


William Humphreys Art Gallery

Sign off page not signed by the Chairperson of Council.


Pan South African Language Board

No sign off page. Even though the entity did not have a Board at a time of submitting the 2014/15 APP the CFO and other required personnel should have signed.


Robben Island Museum

APP not signed by the CFO.

5.1.2 The document has a number of acronyms that are not explained or written in full when initially used in the document. The APP is a public document which is meant to be read or understood by every citizen. Unexplained acronyms make the document difficult to read and comprehend.

5.1.3 The Department’s indicator on the “Number of jobs created” does not have quarterly targets. Instead the Department sets itself a target to report on a number of jobs created. Since the Department has already set a target for the indicator it should then indicate how it would achieve it during each quarter.

5.1.4 The Department’s target on the “Number of jobs created” sub target for the performing arts institutions has two different targets, 11 000 and 16 000.

5.1.5 The Department’s target for the “Number of touring ventures” is six (6). But the APP does not indicate quarterly targets for this indicator.

5.1.6 The Department’s target on “Number of public art projects initiated” has an inconsistency in the wording of the target. The indicator refers to the term “initiated” while the target uses the term “implemented”. This could cause confusion as these terms have different meanings.

5.1.7 The Department’s indicator on “Number of artist placed in schools” has an annual target of 240. However, the fourth quarter refers to “9 programmes supported and implemented”. How is this related to the indicator? There is also an inconsistency with target in the indicator protocol and mapping template.

5.1.8 The Department’s indicator on “Creative Industries Strategy reviewed” sets a target to develop a strategy. Reviewing and developing have different meanings.

5.1.9 The Department’s indicator on “Number of exhibitions platforms supported” has no clear targets for craft and films.

5.1.10 Department’s indicator on “Ministerial Arts and Culture awards conducted” indicated that there is a target for second, third and fourth quarters. Would the Department be hosting these awards for three quarters for R1 million?

5.1.11 There is a general inconsistency between targets set in the programme performance indicators and annual target for 2014-2017 section with annual targets and quarterly targets for 2014/15 financial year, and indicator protocol and mapping template.

5.1.12 Programme 4: Indicator on job creation has two different targets, 3912 and 10268.

5.1.13 In some instances National Treasury selected performance indicators in the ENE differ from APP indicators. This makes oversight difficult if the two documents are not synchronised.

During the course of the budget processing the Committee raised its concerns about the accuracy of the APP. The Minister has provided an undertaking that all errors will be rectified and the corrected version of the APP will be submitted to the National Assembly by not later than 31 July 2014.

5.2 Operational and Strategic Challenges

During the process of considering the Department’s 2014/15 APP the following operational and strategic challenges were identified by the Committee:

5.2.1 The Department has a budget of R3.5 billion. However, the Department is planning to spend 98 per cent of its budget. This will result in an under expenditure of approximately R70 million. It is important to note that while the Department plans not to spend its entire budget it rebuffed funding requests from Arts and Culture organisations that could not be catered for by the existing funding structures of the National Arts Council or the National Heritage Council such as a the District Six Museum.

5.2.2 Since 2012 the Department has been unable to appoint a permanent Chief Financial Officer. The position of a CFO is crucial in ensuring financial compliance by the Department and its entities.

5.2.3 The National Archives are an intellectual hub of knowledge management in the country. The position of a National Archivist has been vacant for over two years. This has the potential to compromise the Department’s ability to provide strategic leadership in the promotion of access to information and archiving of the nation’s treasures.

5.2.4 Funding patterns of entities currently reflect historical distribution of the Department’s resources. Funding structure is based on the infrastructural size of the entity without examining impact on designated groups.

5.2.5 After having read the APPs of entities, it emerged that their outputs are not linked to key government priorities, i.e. some entities’ APPs do not even recognise the existence of the NDP.

5.2.6 There is a clear indication that most entities are struggling to maintain a balance between operational and personnel costs. In some instances entities project that their operational costs will exceed 80 per cent of their budget. This has a potential to compromise service delivery as core functions will suffer at the expense of escalating personnel costs.

5.2.7 Moreover, it also emerged that most entities have not been able to maximise their ability to raise additional funds. These entities thus rely entirely on the Department’s subsidy for survival.

5.2.8 In its presentation to the Committee on 01 July 2014, the Department indicated that it intends to make budget cuts in respect of Non Profit Institutions by the 2016/17 financial year.

6 Recommendations

The Committee welcomes the Annual Performance Plan and 2014/15 budget of the Department of Arts and Culture. The Committee further recommends the following:

6.1 The Department must spend 100 per cent of its 2014/15 budget allocation.

6.2 The Department should prioritise the appointment of the Chief Financial Officer as a matter of urgency.

6.3 The Department should prioritise the appointment of the National Archivist as a matter of urgency.

6.4 More governance monitoring to be provided to departmental entities, particularly with regard to the development of the Annual Performance Plans and Strategic Plans.

6.5 The Department should consider developing customised national indicators for entities in order to ensure that the work of entities are in line with government’s priorities such as the National Development Plan.

6.6 In the light of scarce resources it is crucial that the Department develops a shared service model in provinces such as Free State, Northern Cape and KwaZulu-Natal.

6.7 The Department to invest in the Business Development Approach of entities so that they are able to raise more funds on their own rather than to depend entirely on the state’s subsidy.

6.8 The Department should reconsider budget cuts in respect of Non Profit Institutions, i.e. Blind South Africa and National Library for the Blind. These budget cuts should be possibly absorbed elsewhere in the budget other than institutions that target people with disabilities.

7 Conclusion

The Portfolio Committee acknowledges the importance of the mandate of the Department of Arts and Culture in building and uniting South Africa. It further acknowledges that creative industries have a major role to play in job creation. The Committee recommends that the House adopts the Budget Vote of the Department of Arts and Culture.

Report to be considered


No related documents