ATC180504: Report of the Portfolio Committee on Arts and Culture on Budget Vote 37: Department of Arts And Culture, dated 3 May 2018

Arts and Culture

REPORT OF THE PORTFOLIO COMMITTEE ON ARTS AND CULTURE ON BUDGET VOTE 37: DEPARTMENT OF ARTS AND CULTURE, DATED 3 MAY 2018

The Portfolio Committee on Arts and Culture, having considered the 2018/19 budget and the Annual Performance Plan (APP) of the Department of Arts and Culture, Vote 37, reports as follows:

1. Introduction

The Portfolio Committee on Arts and Culture (hereafter referred to as the “Committee”) considered the 2018/19 budget of the Department of Arts and Culture (DAC) as part of its oversight function over the Department as mandated by Public Finance Management Act (Act No 1 of 1999) and Money Bills Amendment Procedure and Related Matters Act (Act No 9 of 2009). Performing Arts Centre of the Free State (PACOFS), National Arts Council (NAC) and Pan South African Languages Board (PanSALB) briefed the Committee on their APP and budget on 17 April 2018 and the Department briefed the Committee on its APP and Budget on 24 April 2018.

2. Background

2.1 The aim of the report is to present an intensive analysis of the 2018/19 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 and its entities’ expenditure of public funds and the impact of service delivery.

Information contained in the report is based on the Department’s 2018/19 APP, 2018/189budget, as well as the 2018 Estimates of National Expenditure (ENE) as tabled in the National Assembly.

The Report presents a programme-by-programme summary of the Department of Arts and Culture 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, Nation Building and Social Cohesion, of the National Development Plan (NDP) Vision 2030. The Department has been assigned by the President the responsibility to lead Outcome 14: A diverse, socially cohesive society with a common national identity.

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 aligns its work with the NDP as well as the Medium Term Strategic Framework through contributing to quality education and rural development. The Department seeks to equalize opportunities, promoting inclusion and redress and promote active citizenry and broad-based leadership.

3.5 The Department will work towards achieving the above findings by continuing with programmes which place 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 and building heritage infrastructure monuments.

3.6 The Department has ensured that all entities reporting to it have submitted annual performance plans (APPs) for the 2018/19 financial year. These include:

The Afrikaanse Taal-Museum and Monument
Iziko Museums of South Africa
National English Literary Museum
KwaZulu-Natal Museum
Msunduzi/Voortrekker and Ncome Museums
National Museum Bloemfontein
Ditsong Museums of South Africa
Robben Island Museum
War Museum of the Boer Republics
William Humphreys Art Gallery
Freedom Park
National Heritage Council
National Film and Video Foundation (NFVF)
National Arts Council
South African Heritage Resources Agency
South African Library for the Blind
National Library of South Africa
Artscape
Performing Arts Council of the Free State (PACOFS)
South African State Theatre
Playhouse Company
Luthuli Museum
Nelson Mandela Museum
Market Theatre
Pan South African Language Board (PanSALB)

The Committee had to send back the APP of PACOFS to amend some areas where there were concerns. The Department ensured that corrections were done and the APP was resubmitted.

4. Overview of the 2017/18 financial year

Looking at the mandate of the Department enables one to assess the financial and service delivery performance of a department in any financial year, and the same applies for the 2017/18 financial year.

The Department derives its mandate firstly from the Constitution of the Republic of South Africa and other key pieces of legislation, which provide the primary legislative framework. The mandate of the Department is to[1]:

Preserve, develop, protect and promote the cultural, heritage and linguistic diversity and legacy of South Africa;
Lead nation building and social cohesion through societal transformation;
Enhance archives and records management structures and systems and promote access to information;
Provide leadership to the art and culture sector to accelerate its transformation.

In the 2017 State of the Nation Address (SONA), the President pronounced 2017 as a year of unity in action, which is in line with the social cohesion and nation building as one of the outcomes of government. In line with radical socio-economic transformation, the President said that arts should be used to open doors for tourism to catalyse economic activity.

Since annual reports for national departments have not yet been tabled, information related to performance over the last financial year is extracted from in-year quarterly expenditure and financial reports. The review of progress on the 2017/18 budget will therefore only focus on the first three quarters.

In order to evaluate service delivery, it is essential to look at expenditure per programme. The summary of the budget versus expenditure as at the end of the third quarter is tabulated below.

Table 1: DAC expenditure as at the end of the third quarter of the 2017/18 financial year

Programme	Adjusted appropriation 2017/18	Q3 Actual Expenditure 2017	Expenditure as % of the budget	Q3 Projected expenditure	% variance from projected expenditure
R million
1. Administration	370 422	170 759	46.1%	189 247	9.8%
2. Institutional Governance	297 420	113 145	38.0%	243 404	50.5%
3. Arts and Culture Promotion and Development	1 092 595	784 099	71.8%	871 853	10.1%
4. Heritage Promotion and Preservation	2 611 301	2 015 329	77.2%	2 066 486	2.5%
Total	4 371 738	3 083 331	70.5%	3 370 990	8.5%
Economic Classification
Current payments	669 204	354 808	53.0%	438 575	19.1%
Compensation of Employees	232 464	171 594	73.8%	173 228	0.9%
Goods and Services	436 740	183 214	42.0%	265 346	31.0%
Transfers and subsidies	3 486 869	2 670 747	76.6%	2 782 657	4.0%
Payments for capital assets	215 665	57 655	26.7%	149 664	61.5%
Payments for financial assets	0.0	122	-	95	-29.3%
Awaiting classification		0.0
Total	4 371 738	3 083 331	70.5%	3181.5	8.5%

Source: Standing Committee on Appropriations (2018).

As per the report issued by the Standing Committee on Appropriations (SCOA) as at 31 December 2017 (end of the third quarter), the Department spent R3.1 billion or 70.5 per cent of its total adjusted appropriation which is R4.4 billion. Spending is lower by R287.7 million or 8.5 per cent when compared to the 3rd quarter projection of R3.4 billion, mainly on transfers & subsidies, payments for capital assets in programmes 2, 3, and 4 and on goods and services in programme 1.

Based on the report by SCOA, the following observations should be noted[2]:

Expenditure on compensation of employees for quarter 3 is R171.6 million compared to its projections to spend R173.2 million. This expenditure is lower by R1.6 million or 0.9 percent, mainly in programmes 3 and 4, mainly due to delays in the filling of vacant posts including the post of DDG: Arts and Culture Promotion and Development. However, spending is higher than projected in programmes 1 and 2 due to the salary adjustment for senior management service employees which was paid in September and backdated from 01 April 2017, payment of performance bonuses in December and the appointment of the new Chief Director: Social Cohesion and staff brought to the department by the Minister and new Deputy Minister.

As at the end of December, the department reduced its staff establishment by 57 posts at various salary levels by continuously terminating contract workers and intern posts. A moratorium on the filling of vacant posts is being implemented to ensure that the department’s personnel spending remains within the set compensation ceiling with the exception of critical posts including the post of DDG: Arts and Culture Promotion and Development.

Persistent underspending on the Mzansi Golden Economy (MGE) projects point to inefficiencies and inadequacies in the execution of the funding model of MGE work streams, which has been a problem since inception in 2012.

Slow spending on Capital Works projects remains a challenge for the department due to its reliance on DPW for implementation as well as constraints experienced by public entities resulting in these entities not meeting the requirements of the department’s infrastructure policy. The persistent trend of underspending on capital projects is a concern, especially considering the need to upgrade infrastructure in this sector.

An escalating and a continuous increase on travel and subsistence allocation to International and local events by officials in the Ministry and Director General’s office appears not to be in line with cost containment guidelines and the National Travel Policy Framework.

5. Policy Priorities for 2018/19 and alignment with national, regional, continental and global development agendas

The constrained resource environment has made the Department to direct its resources to the following key priority programmes and projects of the 10-Point Plan to yield a great impact in the short term[3]:

Accelerating and amplifying nation building and social cohesion and dealing with, inter alia, the challenges of racism;
Focusing on Africa and the global space;
Resistance and liberation heritage (RLH) Route infrastructure programme, including the National Heroes’ Acre;
Promotion of all languages and improving the functioning of the PanSALB;
Ensuring that MGE benefits previously disadvantages artists;
Ensuring that the Libraries programme provides access to library infrastructure for all and encouraging society to read and visit libraries;
Using available spaces for Community Arts;
Ensuring that the school curriculum teaches correct South African heritage and history through the Arts Education Programme and DAC Schools Programme;
Improving the quality of reporting and compliance; and
Conducting ongoing skills audit in the Department to ensure that human resources are correctly placed in the organisation.

The 2017/18 MTEF programme of action is structured against the following strategic outcome-oriented goals:[4]

A transformed and productive arts, culture and heritage (ACH) sector, aiming to:
- Develop, protect and promote the cultural and creative sector;
- Develop, preserve, protect and promote heritage;
- Develop and promote the official languages;
- Build relationships and partnerships locally and internationally; and
- Provide access to information.

An integrated and inclusive society, aiming to:
- Lead, coordinate and implement social cohesion programmes.

An efficient and effective ACH sector, aiming to:
- Create a coherent policy and legislative environment for the ACH sector;
- Drive integrated outcomes-based research, planning, monitoring and evaluation across the sector;
- Implement sound financial management and control systems; and
- Strengthen and modernise archives and records management systems.

A professional and capacitated ACH sector, aiming to:
- Build human resource capacity and promote excellence.

The alignment of the Department’s prevailing strategic plan and annual performance plan (APP) with national, continental and global agendas is briefly discussed below.

5.1. National agendas

5.1.1 National Development Plan

During the 2014-2019 term of government, the Medium-term Strategic Framework (MTSF) was aligned to the NDP. The Department thus plays a dual role in relation to the MTSF:

To lead and coordinate the delivery of the outputs of Outcome 14: A diverse, socially cohesive society with a common national identity. The Department is delegated to coordinate the implementation of Outcome 14; and
To ensure alignment with and support for other outcomes of the MTSF through programmes and interventions by the sector.

Strategic planning within the Department has taken cognisance of the NDP, particularly Chapter 15, and thus the Department aims to integrate arts, culture, language and heritage into all sectors of national life. The Department in a process of refining the MGE Strategy to ensure more efficient processing of applications and responses to beneficiaries[5].

The policy priorities of the Department are aligned with the NDP. Through addressing the following three areas, the Department aligns its work with the NDP:

Social cohesion and nation building;
Job creation and economic development; and
Quality education and rural development.

In response to the call to lead the way on matters of social cohesion, the Department has elevated the status of social cohesion and national building to subprogramme level within its Institutional Governance Programme as of 2014/15. Strategies and programmes such as the MGE Strategy, artists in schools, building ACH infrastructure (libraries, monuments and arts centres), and flags in schools all contribute to the implementation of the Chapter 15 of the NDP and Outcome 14 of the MTSF.

5.1.2 Nine-Point Plan

Government’s Nine-Point Plan aims to grow the economy and create much-needed jobs. While the Department does not play a lead role in the achievement of the initiatives of the plan, through the MGE Strategy, the Department does contribute by increasing job creation in the sector and thus stimulating the South African economy.

5.2. Continental and global agendas

A brief outline of the alignment of the Department’s policy priorities to the United Nations’ (UN) Sustainable Development Goals (SDGs) and the Aspirations of the African Union’s (AU) Agenda 2063 follows below.

5.2.1. Sustainable Development Goals

The United Nations Sustainable Development Summit has adopted the 2030 Agenda for Sustainable Development. This agenda, through its Sustainable Development Goals (SDGs), aims to end poverty, fight inequality and injustice and tackle climate change by 2030.

The work of the Department speaks to the following SDGs:

Goal 4: Ensure inclusive and quality education for all and promote lifelong learning

Through awarding bursaries for heritage and language studies, the Department contributes to the Goal 4 target which reads, “By 2030, ensure equal access for all women and men to affordable and quality technical, vocational and tertiary education, including university”[6].

Goal 8: Promote inclusive and sustainable economic growth, employment and decent work for all[7]

As mentioned above, the MGE Strategy is the Department’s main job creation strategy thus contributing to the attainment of this goal.

Goal 10: Reduce inequality within and among countries

Through prioritising nation building and social cohesion, the Department supports the target for this goal, which states, “By 2030, empower and promote the social, economic and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, religion or economic or other status”[8].

5.2.2. Agenda 2063

The DAC has taken a deliberate decision to prioritise collaborations with BRICS member countries and the African continent to promote the AU’s Agenda 2063, as well as the US Sustainable Development Goals (SDG) 2030. The DAC has collaborated on a number of international engagements, including the BRICS Cultural Festival and Film Weeks hosted in India and China respectively as well as SA/Russia season in the past two years to expose South African arts and culture to international markets. On the continental aspect: the SA/Algeria and SA/Gabon seasons have been hosted.

6. Committee Engagements

The Committee held engagements with the Department of Arts and Culture and the following issues emerged:

The Committee wanted to know the role played by the Department on artists, especially when it comes to victimisation and safety. The Department stated that it is not their role only as employment included Department of labour, and also some artists get into contracts knowing that they maybe tied to them even after they are dead. The Committee was not happy with the response of the Department, as the Committee required the Department to have an active role in the well-being of artist.
The Committee noted that the Department was detached from the entities, such that it was not aware of what is happening in some entities. The Committee was worried that there is infighting in some entities and there are also unending litigation cases in some. The Department said that it is aware of these issues such that they had been at PACOFS for conflict resolution with the board.
The Department in unresponsive to complaints of the communities, such that people resort to send their complaints to the Committee.
The Committee started in 2014, and since then the Department was saying that they were developing a White Paper for Arts, Culture and Heritage. However, to date, the White Paper has not been completed. The Department stated that they have reduced their targets from 65 to 36; however, the Committee asked what made them to reduce their targets. The Committee sought to know how does the Department assess themselves against their values, especially the value of responsiveness.
When comparing the budget of the Winnie Mandela House (R2,8 million) and other infrastructure projects (R8 million each), the amount seems too little. Thus, the Committee was not sure whether that amount was adequate. The Department responded by saying that considering the size and space of the Winnie Mandela House, they were happy with the amount and they thought it was adequate
The Committee asked why the Department had commissioned GTAC to conduct a work-study and organisational review. The department stated that they had conducted a skills audit in 2016, which had led them to do the work-study so that they can have an approved organisational structure and have employees at the appropriate functions. They have started communicating their plan and their next engagement will be with labour unions in the Department
The Committee stated that the issue of making entities to work in isolation seems not to be working, as they can learn from each other. The Department stated that they have started a project of amalgamating some entities, as running them separately is expensive, because each entity has its own board. In order to action the amalgamation, the Department will commission a study in June, which will take approximately six months to complete. The Department will use Iziko and Ditsong as prototypes in this amalgamation.
The Committee noted that the Department was doing a feasibility study on Resistance and Liberation movements Museums. The Department stated that they are doing the feasibility study to check whether there is a need for a new project or just to enhance the existing one.
The Committee sought clarity on the use of library conditional grant. The Department said that it is used for building as well as for purchasing of all needed library materials. Provinces were funded for libraries against their business plans that they submit in the Department and they are monitored quarterly.
The Committee was concerned with the infrastructure already at Enyoken, it was important that a proper handover process took place so that the building does not dilapitate. The Committee further sought a handover plan by the Department. The Committee was also concerned that the perpertatrors had not been charged yet. The Department stated that it is in their operational plan because there are areas that they need to iron out. They are in talks with the KwaZulu Natal government so that when the project is complete, the KZN government can take over. The Department and KZN government are still developing a Memorandum of Understanding about the Enyokeni Project takeover.
The Committee asked the role of the Moral Regeneration Movement. The Department reported that the Moral Regeneration Movement new boards have been appointed and social cohesion advocates have been allocated R5million.

The Committee held engagements with the PACOFS, PanSALB and NAC:

PACOFS

The Committee noted that the APP of PACOFS was incomplete and there are areas where there was lack of detail. The Committee ordered PACOFS to take the APP back and amend the areas identified by the Committee and resubmit. The Committee stated that there was no value for money at PACOFS. The entity is not doing anything about social cohesion and the Committee advised that the Department and the entity should work closely. The Committee noted that PACOFS did not have a relationship with stakeholders, i.e. Universities, provincial Legislature, Libraries and provincial Department. Although the entity intends to produce a centenary production, the Committee does not see that happening. The entity informed the Committee that the matter of the unions has since been resolved.

There are litigation cases at PACOFS, and the Committee advised the Department to look at the litigation cases and present them to the Committee. The entity has failed to reinstate staff members who have been awarded judgements at CCMA. The Committee will seek for legal advice in the Parliamentary Legal Advice Service. The Committee observed that there was infighting in the PACOFS board. The entity does not have a programme for skill development for staff.

PanSALB

PanSALB does not have a board, as it was dissolved and a board member challenged the dissolution in court. Currently the matter is before the court. The CEO, who was an accounting authority because there is no board, has been put on precautionary suspension. This has left a void in the executive management level of the entity.

The Committee said there is a need to resolve the legal status of PanSALB because, although PanSALB gets funds from DAC,the entity was challenging their reporting lines. The Committee is encouraged by the work done by PanSALB. The Committee asked about the issue of R11 million that is still with the entity. The entity stated that they were given R20 million and they used R9 million and they have the R11 million in their coffers. PanSALB was given a surplus retention approval by the National Treasury and they can account for the R11 million and the interest anytime. The Committee sought clarity on the switchboard and cellphone contracts in the entity. The entity stated that they were reviewing all contracts to ensure that there is efficiency, and all contracts that are not adding value to the organisation will not be renewed. The entity will reduce travelling as they will leverage on ICT infrastructure and use remote communication. The entity is still grappling with the risk at National Language Units (NLU). NLU are supposed to report to PanSALB board, and in its absence there is no reporting although PanSALB funds them.

National Arts Council (NAC)

The Committtee was concerned that the roles, responsibilities and reporting lines between at the entity were blurred, and it was not clear what the role of the Board was and the role of the Executive was. The Department should play its role of ensuring that it inducts Board members of all entities so that they can play their fiduciary duties effectively and not interfere in the operations of an entity. The Department should evaluate their induction mechanism because even though these took place problems still persisted

The Committee believes that the reason that the Board Secretary was suspended related to the fact that she disclosed information to the Portfolio Committee. The Council disputed that fact stating that she was suspended for failing to perform her duties. This was however questioned by the Committee with the Committee seeking proof of what remedial actions the entity took to rectify the matter prior to her suspension. The Committee raised the issue of the CEO who received 18 percent increase in the previous financial year. However, the entity said that there was no 18 percent increase, but all employees received 7.6 % increase across the board and the 10% bonus, which amounted to the 18% The Committee was not happy with the explanation.

The Board Chairperson reported that the board secretary did not keep minutes and those that were kept were not signed. This led to decisions of the board not to be followed through. During meetings, the board secretary would type but not the deliberations of the meetings and for these transgressions, the board secretary had to be disciplined, reported the Board Chairperson.

7. Budget Analysis

The budget structure for the Department remains unchanged and has four expenditure programmes:

Programme 1: Administration
Programme 2: Institutional Governance
Programme 3: Arts and Culture Promotion and Development
Programme 4: Heritage Promotion and Preservation

For the 2018/19 financial year, the total budget allocation is R4.4 billion. During the 2017/18 financial year, the adjusted budget was R4.4 billion. The budget has real decrease of 5.2 percent (R227 411 900). The highest decrease is in Programme 1: Administration (23.02%) followed by Programme 4: Heritage Promotion and Preservation (10.31%).

7.1 Programme analysis

This section explores budget allocations per programme for the 2017/18 financial year. The table below sets out the budget allocation per programme for the current financial year and compares it to allocations in 2016/17.

Table 2: Change to allocations per programme for 2018/19

Programme	Budget		Nominal Increase / Decrease	Real Increase / Decrease	Nominal Percent change	Real Percent change
R thousand	2017/18	2018/19	2018/19		2018/19

Administration	370 422,0	300 844,0	- 69 578,0	- 85 261,8	-18,78%	-23,02%
Institutional Governance	297 420,0	416 027,0	118 607,0	96 918,4	39,88%	32,59%
Arts and Culture Promotion and Development	1 092 595,0	1 184 413,0	91 818,0	30 071,4	8,40%	2,75%
Heritage Promotion and Preservation	2 611 301,0	2 470 980,0	- 140 321,0	- 269 139,9	-5,37%	-10,31%

TOTAL	4 371 738,0	4 372 264,0	526,0	- 227 411,9	0,0%	-5,20%

The following graph is a visual representation of the budget allocations (not adjusted to inflation) tabulated above:

Figure 1: Comparison of budget allocations per programme for 2016/17 and 2017/18 (not inflation-adjusted)

7.1.1 Programme 1: Administration

The programme is responsible for the provision of leadership, management and support functions to the Minister, Deputy Minister, Director-General (DG) and the Department.

For the 2018/19 financial year, the budget allocation for this programme is R300 844 000. During the previous financial year, the adjusted budget was R370 422 000, representing a real decrease of 23.02 percent.

Budget allocations for all sub-programmes are tabulated below:

Table 3: Programme 1: Administration

Sub-programme	Budget 2017/18	Percentage of total programme budget
R million
1: Ministry	4.9	1.6%
2: Management	53.4	17.6%
3: Corporate Services	102.2	33.9%
4: Office of the CFO	31.5	10.4%
5: Office Accommodation	108.9	36.2%
TOTAL	300.9	100%

Table 4 below reflects how budget allocations per sub-programme has changed between financial years 2016/17 and 2017/18.

Table 4: Change to allocations per sub-programme for Programme 1

Sub-programme	Budget		Nominal per cent change in 2017/18	Real per cent change in 2017/18
R million	2017/18	2018/19	Nominal per cent change in 2017/18	Real per cent change in 2017/18
1: Ministry	4.5	4.9	8,89%	3,21%
2: Management	52.5	53.4	1,71%	-3,59%
3: Corporate Services	146.4	102.2	-30,19%	-33,83%
4: Office of the CFO	30.5	31.5	3,28%	-2,11%
5: Office Accommodation	140.7	108.9	-22,60%	-26,64%
TOTAL	374.6	300.9	-19.7%	-23.9%

As reflected in Table 3 above, 36.2 per cent of the programme budget is allocated to office accommodation. Table 4 also shows that sub-programme 3 and 5 have decreased. It is important to find out the rationale of decreasing in these sub-programmes. .

7.1.2 Programme 2: Institutional Governance

The purpose of this programme is to coordinate and manage all cross-cutting functions of the Department and its public entities and provide support and oversight to these public entities.

In the 2018/19 financial year, this programme has seen a real increase in budget allocation of 32.6 percent (from R297.4 million to R416.0 million).

The budget allocation for this programme is divided amongst its sub-programmes as follows:

Table 5: Programme 2: Institutional Governance

Sub-programme	Budget 2018/19	Percentage of total programme budget
R million
1: International Co-operation	36.9	8.9%
2: Social Cohesion and Nation Building	78.6	18.9%
3: Coordination, Monitoring, Evaluation and Good Governance	45.3	10.9%
4: Capital Works	255.2	61.4%
TOTAL	416.0	100%

Table 6 reflects how budget allocations per sub-programme has changed between financial years 2017/18 and 2018/19.

Table 6: Change to allocations per sub-programme for Programme 2

Sub-programme	Budget		Nominal per cent change in 2017/18	Real per cent change in 2017/18
R million	2017/18	2018/19	Nominal per cent change in 2017/18	Real per cent change in 2017/18
1: International Co-operation	37.1	36.9	-0,54%t	-5,72%
2: Social Cohesion and Nation Building	53.7	78.6	46,37%	38,74%t
3: Coordination, Monitoring, Evaluation and Good Governance	30.2	45.3	50,00%	42,18%
4: Capital Works	169.3	255.2	50,74%	42,88%
TOTAL	290.3	416.0	43,3%	35,83%

This programme has had a biggest increase of 32.6% in real terms, which amounts to R96.9 million. Within the programme, a subprogramme that got the biggest increase is Capital Works, followed by Coordination, Monitoring, Evaluation and Good Governance. International Cooperation had a decrease. Social cohesion also received a healthy increase.

7.1.3 Programme 3: Arts and Culture Promotion and Development

The purpose of Programme 3 is to promote and develop arts, culture and languages. Figure 1 above illustrates that this programme receives the second largest allocation of the total budget, i.e. 27.0 per cent or R1.2 billion. In terms of percentage change compared to the last financial year, Programme 3 has experienced a slight increase of 2.1 per cent.

The budget allocation for this programme is divided amongst its sub-programmes as follows:

Table 7: Programme 3: Arts and Culture Development

Sub-programme	Budget 2018/2019	Percentage of total programme budget
R million
1: National Language Services	522.4	4.4%
2: Pan South African Language Board	11.6	9.6%
3: Cultural and Creative Industries Development	385.5	32.6%
4: Performing Arts Institutions	331.7	28.0%
5: National Film and Video Foundation	146.7	12.4%
6: National Arts Council	111.5	9.4%
7: Capital Works of Performing Arts Institutions	43.1	3.6%
TOTAL	1 184.5	100%

Table 8 below reflects how budget allocations per sub-programme has changed between financial years 2016/17 and 2017/18.

Table 8: Change to allocations per sub-programme for Programme 3

Sub-programme	Budget		Nominal per cent change in 2017/18	Real per cent change in 2017/18
R million	2017/18	2018/19	Nominal per cent change in 2017/18	Real per cent change in 2017/18
1: National Language Services	49.0	522.4	6,94%	1,36 %
2: Pan South African Language Board	108.6	11.6	4,60 %	-0,85 %
3: Cultural and Creative Industries Development	383.5	385.5	0,52 %	-4,72 %
4: Performing Arts Institutions	296.4	331.7	11,91 %	6,08 %
5: National Film and Video Foundation	129.1	146.7	13,63 %	7,71 %
6: National Arts Council	106.2	111.5	4,99 %	-0,48 %
7: Capital Works of Performing Arts Institutions	27.9	43.1	54,48 %	46,43 %
TOTAL	1 100.7	1 184.5	7.6%	2.0%

In real terms, the budget for this programme has increased by 2 percent. The subprogramme that received a huge increase is Capital Works.

7.1.4 Programme 4: Heritage Promotion and Preservation

The purpose of this programme is to preserve and promote South African heritage, including archival and heraldic heritage. It also oversees and transfers funds to libraries.

Programme 4 receives the bulk of the total budget, R2.5 billion or 56.5 per cent. In comparison to the budget allocation in 2017/18, this represents 3.2 per cent reduction in this programme budget.

Table 9 provides an overview of the budget allocation per sub-programme.

Table 9: Programme 4: Heritage Promotion and Preservation

Sub-programme	Budget 2018/19	Percentage of total programme budget
R million
1: Heritage Promotion	57,4	2,32 %
2: National Archive Services	45,1	1,83 %
3: Heritage Institutions	635,1	25,70 %
4: National Library Services	151,9	6,15 %
5: Public Library Services	1 452,5	58,78 %
6: South African Heritage Resources Agency	55,7	2,25 %
7: South African Geographical Names Council	4,8	0,19 %
8: National Heritage Council	68,5	2,77 %
TOTAL	2 471.0	100%

Table 10 reflects how budget allocations per sub-programme has changed between financial years 2016/17 and 2017/18.

Table 10: Change to allocations per sub-programme for Programme 4

Sub-programme	Budget		Nominal per cent change in 2017/18	Real per cent change in 2017/18
R million	2017/18	2018/19	Nominal per cent change in 2017/18	Real per cent change in 2017/18
1: Heritage Promotion	82,6	57,4	-30,51 %	-34,13 %
2: National Archive Services	47,1	45,1	-4,25 %	-9,24 %
3: Heritage Institutions	737,3	635,1	-13,86 %	-18,35 %
4: National Library Services	162,7	151,9	-6,64 %	-11,51 %
5: Public Library Services	1 447,2	1 452,5	0,37 %	-4,87 %
6: South African Heritage Resources Agency	59,9	55,7	-7,01 %	-11,86 %
7: South African Geographical Names Council	4,6	4,8	4,35 %	-1,09 %
8: National Heritage Council	64,7	68,5	5,87 %	0,35 %
TOTAL	2 606,1	2 471.0	-5.2%	-10.1%

The programme has a real decrease of 10, 1 percent. The biggest decrease is on heritage promotion.

8. Observations

During the process of considering the 2018/19 APP of the Department and its entities, the Committee made the following observations:

8.1 Review of White Paper on Arts, Culture and Heritage

The Committee raised concern that the Department has been very slow in the process of reviewing the White Paper.

8.2 Compliance with Generally Recognised Accounting Practices 103

The Committee raised concern that the accounting standard was affecting the audit outcomes of the entities. The Committee appreciated the efforts of the entities in complying with the accounting standard. The Committee was pleased with the National Treasury for the allocation of funds to assist the entities.

8.3 Infrastructure Projects

The Committee was concerned that the transgressors in the Enyokeni Precinct Project have not been brought to book.

8.4 Funding Model of the Department to the entities

The Department still was without a funding model resulting in funding the entities and the NPO’s randomly. This was a concern as a majority of entities were underfunded taking into account their mandate and the role they play in society.

8.5 Litigation in entities

Some entities are faced with litany of litigations. These litigations are unending because even if an accused wins the case at CCMA, entities opt to interpret the award instead of actioning them.

8.6 Underspending on infrastructure by the Department

Historically the Department has been underspending on Capital Works Projects. The Department attributes this chiefly to slow invoicing from Department of Public Works.

8.7 Infighting within the entities

While the Committee noted that there was improvement in some entities, the Committee raised a concern that there was a lot of infighting within the Councils and Management in some entities. The concern of the Committee is that, the Department is not doing enough to solve challenges in the entities, which maybe caused by lack on monitoring. The Department get to hear about some challenges of the entities from the Committee.

8.8 Quality of information

The quality and accuracy of information that is submitted by the Department at times is not acceptable. One of the entities had to take back its APP and amend as suggested by the Committee and resubmit. If the Department had closely scrutinised the APP, it would have come to the Committee in an acceptable state.

9. Recommendations

The Committee welcomes the Annual Performance Plan and 2018/19 budget of the Department of Arts and Culture. The Committee further recommends the following:

9.1 Review of the White Paper on Arts, Culture and Heritage

The Department should provide timeframes (road maps; action and times) to the Committee of the process of the White Paper review.

9.2 Compliance with Generally Recognised Accounting Practices 103

The Department together with the AGSA, National Treasury and the Chief Executive Officers should keep updating and reporting the status and progress of GRAP 103. In the meantime, the entities should develop inventory to manage their collections and value some of their collection to begin complying with GRAP 103. Once collections have been values, it is critical for entities to strengthen their securities. The Committee acknowledges the budget by the National Treasury to improve the accounting standard.

9.3 Infrastructure Projects

The Department should work closely with the Department of Public Works to ensure that all its projects are up to date. Within the Department, there should be a team of experts in the infrastructure built industry to be able to monitor and conduct evaluation of the infrastructure projects.

9.4 Funding Model of the Department to the entities

The Department should develop a funding model for all entities and organisations that receive funding from it. This will make the funding to be transparent.

9.5 Litigation in entities

It is advisable that entities should abide by the law in instances where employees win their cases at the CCMA. Should anybody within the entity wish to challenge the outcome they should do so using their own funds.

9.6 The Enyokeni Project

The Department should ensure that there is transparency in the manner it deals with the Enyokeni Project. The MoU with the KZN Department should be finalised soon and be made available to the Committee.

9.7 Underspending on infrastructure by the Department

The Department should ensure that it issues invoices on time so that funds can be spent within the budgeted quarter. Putting all infrastructure projects under the same programme will be of great assistance in curbing infrastructure underspending.

9.8 Infighting within the entities

The Department should manage the relations between management and Councils of entities by monitoring them closely to know their challenges on time. When there are challenges and conflicts in entities, the Department should intervene timeously

9.9 Quality of information

The Department should quality check all its documents before it sends them to the Committee, and this is very important, especially the APP of the Department and the entities. Documents that are sent to the Committee are open for public consumption.

10. Conclusion

The Portfolio Committee acknowledges the importance of the mandate of the Department of Arts and Culture in building and uniting South Africa. The Committee recommends that the House adopts the Budget Vote Report of Vote 37: Department of Arts and Culture.

Report to be considered

[1] National Treasury, 2018, p. 793

[2] Standing Committee on Appropriations, 2018

[3] Department of Arts and Culture, 2018, pp.31 - 34

[4] Department of Arts and Culture, 2018, p. 40

[5] Department of Arts and Culture, 2018, p. 8

[6] http://www.un.org/sustainabledevelopment/education/

[7] http://www.un.org/sustainabledevelopment/economic-growth/

[8] http://www.un.org/sustainabledevelopment/inequality/

Documents

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