ATC191029: Budgetary Review and Recommendation Report of the Portfolio Committee on Sports, Arts and Culture on the 2018/19 Performance of the Department of Arts and Culture, dated 23 October 2019

Sports, Arts and Culture

THE BUDGETARY REVIEW AND RECOMMENDATION REPORT OF THE PORTFOLIO COMMITTEE ON SPORTS, ARTS AND CULTURE ON THE 2018/19 PERFOMANCE OF THE DEPARTMENT OF arts AND culture, dated 23 OCTOBER 2019

 

The Portfolio Committee on Sports, Arts and Culture (hereinafter referred to as the Committee), having considered the performance of Vote 37: Department of Arts and Culture (hereinafter referred to as the Department), reports as follows:

 

  1. Introduction

 

  1. Mandate of Committee

The Constitution empowers the National Assembly to have oversight over the Executive.  Thus, through the Constitution, the Portfolio Committee on Sports, Arts and Culture (the “Committee”) is empowered to oversee and monitor the Executive in the form of National Departments and its entities.  The Budget Review and Recommendation Report (BRRR) is a vital tool that the Committee uses to assess the performance of the Departments as well as its entities. The BRRR also acts as a mechanism to measure service delivery and identify areas that require urgent interventions. Committee is made to understand the Department’s process and outcomes of its budget’s implementation.

 

  1. Description of Core Functions of the Department

The Department derives its mandate from the Constitution with specific focus on language and culture, access to information and, to some extent, education. The Department further seeks to unleash the potential of the Arts, Culture and Heritage sector to contribute to job creation and economic growth and development through the Mzansi Golden Economy (MGE) strategy. The Department focus is to promote and preserve infrastructure, provide community library services, position cultural and creative industries to contribute to economic growth, and facilitate social cohesion and nation building. In addition, the Department is also responsible for the promotion of the performing arts in South Africa; provision and promotion of official languages and enhancement of linguistic diversity in South Africa; and provision and maintenance of the declared cultural institutions, National Archives and National Library of South Africa. The Department is responsible for 26 entities established to enable the Department to deliver on its mandate. These entities are categorised into Development Agencies, Performing Arts Institutions, Libraries, Heritage Institutions and Constitutional Entities.  

 

  1. Purpose of the BRR Report

Section 5 of the Money Bills Amendment Procedure and Related Matters Act (No. 9 of 2009) requires the National Assembly, through its Committees, to produce a Budgetary Review and Recommendation Report (BRRR), which assesses the performance of each national department with reference to the following:

  1. The Medium Term Estimates of Expenditure, Strategic Priorities and Measurable Objectives, as tabled in the National Assembly;
  2. Prevailing Strategic Plans;
  3. The Expenditure Report as published by the National Treasury (NT) in terms of section 32 of the Public Finance Management Act (No. 1 of 1999);
  4. The Financial Statements and Annual Reports;
  5. The Reports of the Committee of Public Accounts; and
  6. Any other information requested by or presented to a House of Parliament.

 

  1. Method

In compiling the 2019/20 BRRR the Committee utilised the following documents:

  • 2019 President’s State of the Nation Address (SONA);
  • 2014 – 2019 Medium Term Strategic Framework;
  • 2015/16 – 2019/20 Strategic Plan of the Department of Art and Culture;
  • 2019/20 Annual Performance Plan of the Department of Arts and Culture;
  • 2019/20 first quarterly report of the Department of Arts and Culture and entities;
  • 2018/10 Annual Report of the Department of Arts and Culture and entities;
  • 2019/20 Budget Review and Recommendation Report of the Portfolio Committee on Arts and Culture; and
  • The National Development Plan (NDP): Vision for 2030.

 

  1. Portfolio Committee’s Oversight Environment

The establishment of the fifth Parliament and the fifth administration heralded the publication of the 2014 – 2019 Medium Term Strategic Framework (MTSF) after the 2014 general and provincial elections. The 2014 – 2019 Medium Term Strategic Framework (MTSF) identified the following priorities:

  • Radical economic transformation, rapid economic growth and job creation
  • Rural development, land and agrarian reform and food security;
  • Ensuring access to adequate human settlements and quality basic services;
  • Improving the quality of and expanding access to education and training;
  • Ensuring quality health care and social security for all citizens;
  • Fighting corruption and crime;
  • Contributing to a better Africa and a better world; and
  • Social cohesion and nation building.

 

These priorities were then expanded into fourteen outcomes and their associated activities and targets. The outcome that is allocated to the Department is Outcome 14, ‘a diverse, socially cohesive society with a common national identity’.

 

Unlike other years, in 2019 Parliament had two State of the Nation Addresses (SONA) because of the elections and having a new administration. The call for the shared responsibility of building a better South Africa is a recurring appeal common to all SONAs post the publication of the NDP. This year is no exception with the President stressing this more than once in his address.

 

Furthermore, pertaining to the arts, culture and heritage sector the following objectives while not sector-specific, have bearing:

  • The intention to increase the number of tourists entering the country to 21 million by 2030, will bring with it indirect job creation in the creative and cultural industries;
  • Government will focus its efforts on key parts of the economy that are labour intensive such as tourism;
  • The acceleration and stimulation of economic growth necessitates the need to find new and larger markets for South African goods and services;
  • In the pursuit of inclusive growth and social development, the President has appointed a Presidential Commission on the Fourth Industrial Revolution;
  • The practice of requiring applicants for work experience for entry-level positions in state institutions will be ceased; and
  • The operationalisation of section 8 of the Public Administration and Management Act (No. 11 of 2014) will intensify the illegal practice of public servants who do business with the state.

 

  1. The Portfolio Committee oversight approach

The oversight activities of the Committee aim at accelerating the delivery of arts, culture and heritage services. In order to achieve the acceleration in the delivery, the Committee engaged the Department and its entities to their strategic priorities are aligned to the ones of government and the National Development Plan. 

 

  1. Oversight role of the Committee

As mandated by section 55 of the Constitution of the Republic of South Africa, 1996, the Committee exercised it oversight function through robust portfolio committee meetings where the executive accounts on a regular basis. The Committee ensured that the Department accounts to it on its Annual Performance Plans, Quarterly Reports, Annual Reports and other activities that the Department is engaged in.  On Quarterly Reports and Annual Report, the Committee ensured that the Department accounts for its performance and other pertinent matters.  

 

  1. Overview of the key relevant focus areas

The following events and achievements characterised the sector during the 2018/19 financial year:

 

2.1 Africa Month Programme

In May 2018, Africa Month was successfully celebrated in all nine provinces and across various cultural genres under the theme “The Year of Nelson Mandela: Building a Better Africa and Better World”. Africa Month events contribute towards social cohesion, regional integration and further provide a platform for people-to-people contacts.

2.2 Africa Seasons

In the 2018/19 financial year, the DAC successfully participated in Africa Seasons in Ghana and Kenya.

 

2.3 BRICS

The Department has prioritized collaborations with BRICS member countries. To this end, South Africa hosted the 3rd BRICS Film Festival Forum Panel Discussion in July 2018 under the theme: Content Travelability among BRICS Countries: Opportunities and challenges of the 4th Industrial Revolution for Content Creators in the BRICS market. South Africa also signed a film co-production treaty with Brazil and further presented a South Africa Week in Brazil in September 2018.

 

2.4 Cultural Diplomacy Programme

The Department, in partnership with the South African Fashion Week, hosted the BRICS Fashion Show and the Fashion Business Forum, displaying some of the best local and international designs BRICS had to offer. The fashion extravaganza was aimed at showcasing textile and retail opportunities within BRICS countries, creating a platform for fashion designers to participate in each other’s premier fashion shows, discussions and collaborations on fashion-related issues, as well as creating market access and consumption of fashion among BRICS countries. The Fashion Week concluded with a business forum on Friday, 26 October 2018 at Lesedi Cultural Village.

 

2.5 Multilateral Engagements

The Department contributed to the following key international conferences:

  • UNWTO/UNESCO Conference on Culture and Tourism (2nd and 3rd Conference)
  • World Culture Forum on Sustainable Development
  • 4th World Forum on Inter-Cultural Dialogue
  • World Conference on Creative Economy
  • International Conference on Heritage in Danger
  • UNESCO Conference on Culture for Sustainable Cities

 

2.6 National Days

All six national days were successfully held and celebrated (i.e. Human Rights Day, Freedom Day, Youth Day, Women's Day, Heritage Day and the Day of Reconciliation).

 

2.7 Twenty-Five-Year Review

The Department, as the lead coordinator of Outcome 14, was requested to coordinate the compilation of the Twenty-Five Year Review. This process was supported by various stakeholders, especially the Outcome-14 delivery partners and culminated in the generation of a report that was submitted to Cabinet.

 

2.8 Living Heritage

Two books were commissioned and written during the 2018/2019 financial year. The two books were on two of South Africa’s Living Human Treasures, Dr Esther Mahlangu and Noria Mabasa. The naming of geographical features in South Africa is part of the process of transformation of South African Heritage Landscape in order to forge a common national identity and nationhood. The changing of the name of the town Grahamstown to Makhanda during 2018/2019 is one of the highlights recorded by the Department.

 

2.9 National Oral History Programme 2018

NARSSA hosted the 15th Annual National Oral History Conference from 9–12 October 2018 in the Western Cape in partnership with the Oral History Association of South Africa and the Western Cape Provincial Archives. The Conference theme was “Freedom and Egalitarianism: Nelson Mandela, The Symbol of Democracy”.

 

2.10 International Archives Day

The National Archives, with its slogan "taking the archives to the people”, celebrated the International Archives Day event at Es'kia Mphahlele Community Library, Sammy Marks Square in Pretoria on 8 June 2018.

 

2.11 South African Library Week (SALW)

The celebration of the South African Library Week was held from 18–24 March 2019, under the theme “Collaborate @ your library”.

 

2.12 Annual National Archives Awareness Week 2018

The 2018 Annual Archives Awareness Week, under the theme “Archives: Our Lives, Our Legacy: Workers' Rights” was launched in partnership with the Free State Provincial Archives (Department of Sport, Arts, Culture and Recreation). The Annual Archives Awareness National Week (AAANW) was held from the 7–11 May 2018.

 

2.13 The Annual Library and Information Association of South Africa Conference

The Department supported the Library and Information Association of South Africa (LIASA) to host its annual conference, which was held from 8–12 October 2018 at the International Convention Centre, Cape Town. The Minister delivered a keynote address and officially opened the Conference on 9 October 2018. The theme of the Conference was “Library and Information Services: agents of community development and social transformation”.

 

2.14 Ministerial Roundtable on Information Access

The Ministry of Sports, Arts and Culture, in cooperation with the African Library & Information Associations & Institutions (AfLIA) hosted the African ministers responsible for the provision of library and information services on the continent from 5–6 July 2018. The purpose of the Ministerial Roundtable was to report on progress in the library and information services sector across the Continent. 12 Ministers attended the meeting and 41 countries were represented.

 

2.15 Addressing the Scourge of Gender-based Violence (GBV) and Racism

The Department held an imbizo in Acornhoek, Mpumalanga, on 23 November 2018. Minister Mthethwa interacted with the community, who raised issues and challenges and made recommendations on GBV and victims of GBV. This imbizo sought to create social partnerships and contribute positively to government endeavours, including initiatives aimed at good governance, improved external citizen and stakeholder morale, and public confidence in efforts aimed at reigniting the economy, creating jobs and building a prosperous society all can benefit from. On 15 June 2018, the Minister also presided over a Youth Day Dialogue with students at the Johannesburg University of Technology sharing the platform with the Vice-President for Human. Resources: Unilever, following the controversial Dove advertisement.

 

  1. Summary of previous key financial and performance recommendations of Committee

 

  1. 2018 BRRR Recommendations

During the 2017/18 BRRR the Committee made the following recommendations:

 

  • Succession Planning: The Department should develop a succession policy and ensure that all employees are part of its development as well as its implementation.
  • Recruitment and selection: When the Department uses agencies, the prospective employee should be in the employment of the Department not that of the agency.  This is in line with the recent amendment of the Labour Relations Act (LRA), which dictates that clients of labour brokers have to hire contractors after three months who earn less than R205 433 annually.
  • Proper Planning: The Department should ensure that it applies the SMART principles in their planning.
  • Mzansi Golden Economy: The Department should find ways of utilising these funds effectively so that the anticipated jobs could be created. 
  • Consequence Management: Leadership should ensure that all those who are found to have contravened legislation, policies and regulations are reprimanded accordingly.
  • Leadership: The Department should strengthen its monitoring on all of its entities, and all the personnel in the monitoring and evaluation unit should be held accountable for underperformance on entities.
  • Irregular, fruitless and wasteful expenditure: Internal control mechanisms should be strengthened to curb the recurrence of irregular, fruitless and wasteful expenditure. The Public Financial Management Act (PFMA) section 81 (1)(b) states that an accounting officer of an institution commits an act of financial misconduct if that accounting officer wilfully or negligently permits an unauthorised expenditure, an irregular expenditure or wasteful expenditure.  All senior managers if found to have been negligent on irregular, fruitless and wasteful expenditure, should be held accountable.
  • Under-expenditure: The management should draft an operational plan that will make them spend the budget on Capital Works as planned. 

 

  1. 2018/19 Committee Budget Report

 

The Committee supported the 2018/19 budget of the Department and its Annual Performance Plan (APP). It also supported the strategic alignment of the Department’s programmes with the NDP.

 

  1. Overview and assessment of the 2017/18 vote performance
    1. Service Delivery Performance for 2018/19

 

The Department achieved 97.7% of its planned targets (31 out of 39 targets) during the 2018/19 financial year. The following are the highlights of the Department’s achievements:

 

  • Programme 1: Administration
  • 38 izimbizo were held by the Department including a crafters’ imbizo at the Bumbane Royal Palace on 9 November 2018. The Deputy Minister of Arts and Culture and the Acting King, Azenathi Zanelizwe Dalindyebo, handed over the sewing machines that will be placed in the Community Arts Centre for crafters.

 

  • The Minister of Sports, Arts and Culture launched the #I am the flag campaign to promote national consciousness, social cohesion, nation building and patriotism for all citizens of South Africa.

 

  • The Information and Communication Technology (ICT) Unit within the Department is laying the foundation for the fourth industrial revolution through initiatives aimed at modernisation of business processes. The Unit has successfully implemented an Enterprise Content Management System with digital signatures leading to the automation of the submissions approval process.

 

  • Programme 2: Institutional Governance

 

  • The DAC is implementing different models to contribute to the socio-economic transformation whereby the artists especially the Legends and Divas participated in the Gender Based Violence Campaigns. This is a four pronged model of taking theatre to the people which includes the use of Industrial Theatre, Cultural Performance, dialogue and media interviews and social media platforms to convey messages of “No Violence”.

 

  • In a bid to address the scourge of Racism, following the controversial Dove advertisement, on 15 June 2018 the Minister hosted a Youth Month Dialogue at the University of Johannesburg Soweto Campus where Unilever was part of the panel discussion.

 

  • On 13 June 2018, the Minister launched International Albinism Awareness Day under the theme SHINE YOUR LIGHT. The launch was held in Hlalakahle in Mpumalanga where two (2) girls were killed and their body parts disembodied. The Minister also had the opportunity to meet with the affected family.

 

 

  • Programme 3: Arts and Culture Promotion and Development

 

  • The Minister hosted the USIBA Creative and Cultural Industries Awards on 1 June 2018 at Emperor’s Palace. These awards celebrate the immense richness of the arts heritage across the creative arts landscape.

 

  • In recognition of the historically diminished use and status of indigenous languages,

section 6(2) of the Constitution of the Republic of South Africa, 1996, obliges the state to take practical and positive measures to elevate the status and advance the use of these languages. In this regard, the Department provides bursaries to students studying official South African languages at various institutions of higher learning, with emphasis on previously marginalised languages.

 

  • Programme 4: Heritage Preservation and Promotion:

 

  • The Department of Arts and Culture, in partnership with the National Heritage Council, held a workshop on the Human Rights, Liberation Struggle and Reconciliation: Nelson Mandela legacy sites world heritage nomination. The workshop took place from 19–20 July 2018, in Gauteng. The workshop brought together the relevant decision makers and stakeholders of the affected sites to provide the necessary information as required by the UNESCO World Heritage Guidelines.

 

  • The Infrastructure Development Programme has continuously throughout the year assisted its public entities with their accommodation needs, including maintenance planning of its buildings by annually producing a User Asset Management Plan and also by providing entities with funding for their infrastructure needs. One of the capital projects that reached practical completion on 18 December 2018 is the Luthuli Resource Centre at Luthuli Museum in KZN.

 

  • The unveiling ceremony of the statue of Nelson Mandela in New York City on 24 September 2018 was one of the highlights celebrating the centenary of Nelson Mandela. The President of the Republic of South Africa, HE Cyril Ramaphosa, unveiled the statue.

 

  • On 26 September 2018, the Deputy Minister held an event to express government’s intention to declare the house of Mama Winnie Madikizela-Mandela in Majwemasweu Township, Brandfort, as a national heritage site, and to unveil an artistic impression of the museum design. This heritage house will be converted into a museum together with the bombed clinic that Mama Winnie used as a clinic. A multipurpose centre with Wi-Fi connectivity will also be constructed on the museum site.

 

  • Progress on the Sarah Baartman Centre of Remembrance construction site, Hankey, Eastern Cape: 75% complete in terms of funds payable for construction of the Centre which spans both sides of the R300 at Vergaderingskop, Hankey.

 

  • On 24 September 2018, a Heritage Day celebration was held at the Riverview Stadium in Kokstad under the theme "The Year of Nelson Rolihlahla Mandela: advancing transformation of South Africa’s heritage landscape". The day’s activities commenced with the unveiling of the statue of Adam Kok by Deputy President David Mabuza.

 

  • The National Archives and Records Service of South Africa (NARSSA) hosted the 15th Annual National Oral History Conference from 9–12 October 2018 in the Western Cape in partnership with the Oral History Association of South Africa and the Western Cape Provincial Archives. The Conference theme was "Freedom and Egalitarianism: Nelson Mandela, The Symbol of Democracy".

 

  • The Minister of Sports, Arts and Culture approved the changing of the name of the town Grahamstown to Makhanda during 2018. This was done as part of the transformation of the heritage landscape and also as part of one of the recommendations of the Truth and Reconciliation Commission, which recommended name changes as part of symbolic reparations.

 

 

  1. Voted funds and expenditure patterns
    1. Overview and assessment of financial performance

 

The Department’s final appropriation for the 2018/19 financial year was R4.339 billion. Actual expenditure for the period under review was R4.238 billion. Expenditure thus represents 97.7 per cent of the final appropriation and is an improvement on the 94.7 per cent expenditure for the 2017/18 financial year.

 

  1. Appropriation statement for the 2017/18 financial year

 

Below is the Department’s appropriation statement for the 2018/19 financial year. This shows the appropriation per programme:

 

Voted funds and direct charges

R’000

Adjusted appropriation

Shifting of funds

Virement

Final appropriation

Actual expenditure

Variance

Expenditure as % of final appropriation

R’000

R’000

R’000

R’000

R’000

R’000

%

Programme

  1. Administration

310 317

18 288

(13 293)

315 312

308 865

6 447

98.0%

  1. Institutional Governance

287 823

213

(27 645)

260 391

226 079

34 312

86.8%

  1. Arts and Culture Promotion and Development

1 167 540

(13 071)

17 131

1 171 600

1 132 471

39 129

96.7%

  1. Heritage Promotion and Preservation

2 573 057

(5 430)

23 807

2 591 434

2 570 570

20 864

99.2%

TOTAL

4 338 737

-

-

4 338 737

4 237 985

100 752

97.7%

 

As reflected above, overall under-expenditure amounted to R100.8 million or 2.3 per cent of the final appropriation. Under-expenditure in 2017/18 amounted to R230.3 million or 5.3 per cent of the final appropriation.

This therefore indicates a year-on-year decrease in unspent funds. The lowest performing programme, Programme 2, spent only 86.8 per cent, or R226.1 million of the total appropriation of R260.4 million.

 

Under expenditure

 

Economic classification

R’000

Compensation of employees

  • The variance of R14,7 million is due to underspending caused by vacant posts that are in the process of being filled.

14 689

Goods and services

  • The variance of R3,6 million is due to the resignation of one community library consultant, including travel and subsistence costs.

3 557

Transfers and subsidies

Departmental agencies and accounts (Cur/Cap)

  • The variance of minus R18,4 million under-expenditures was mainly due to:
    • Artscape and the State Theatre, which did not submit the Incubator Trade Fair report on time to enable payment processing, and
    • Capital works projects and payments made on claims from DPW based on work done at entities.

18 441

Foreign government organisations

  • The variance of R544 000 is due to the exchange rate, which was lower than the estimated transfer to the Commonwealth Foundation was.

544

Households

  • The variance of R362 000 is attributed to less than projected transfers made due to changed funding strategy for heritage bursaries as a result of challenges experienced with the previous implementation strategy. Transfers were only made to renewed bursaries with existing universities.

362

Public corporations (Cur/Cap)

  • The variance of R4,7 million under-expenditure is due to:
    • delays in concluding the memorandum of agreement (MoA) for the upgrading of community arts centres, and
    • Compliance documents that were not submitted on time for the upgrading of public spaces.

4 680

Non-profit Institutions (Cur/Cap)

  • The variance of R10,8 million is due to the under-expenditure relating to:
    • Transfer not made to Dennis Goldberg Foundation due to non-compliance with tax clearance certificate, and
    • Late enactment of the Adjusted Appropriation Bill, which had an impact on the facilitation process for transfer of funds to the Albany Museum for the management of operations of Ingquza Hill Museum and to Barberton Museum for the management of operations of Samora Machel and Matola Monuments and Interpretative Centre.

10 849

Buildings and other fixed structures

  • The variance of R20,7 million is due to approval granted by National Treasury to re-classify funds from non-profit institutions to buildings and other fixed structures, necessitating that DAC make payment to DBSA on recoverable basis.

20 700

Higher education institutions

  • The variance of R1,5 million is due to funds for the implementation of the Chief Tyali project at the University of Fort Hare and the family not having finalised the concept document before the end of 2018/19 financial year.

1 501

Heritage assets

  • The variance of R25,4 million is attributed to late submission of claims from the Department of Public Works for the construction of Sarah Baartman Centre of Remembrance.

25 429

Total

100 752

 

 

  1. Department’s performance against the pre-determined objectives

The table below provides a concise overview of general performance for the period under review.

 

Total budget spent

97.7%

Total targets set

39

Targets achieved

31

Targets not achieved

8

Success rate

79.5%

 

 

  1. Contextualising the report of the Auditor General of South Africa and its implications
    1. Financial Audit

 

The Department has achieved a financially unqualified audit opinion with findings. The audit opinion thus remains unchanged from those achieved for the last four years. The following section contains an overview of matters raised by AGSA.

 

  1. Audit on pre-determined objectives

The AG raised a number of matters in relation to the non-financial performance of the Department. These include:

 

  • The AG evaluated the usefulness and reliability of performance information reported under Programmes 2, 3 and 4. Material findings in respect of the reliability of the performance information for these programmes include:

 

Programme 2

  • Indicator: Number of cultural diplomacy engagements coordinated

 

The planned target for this indicator was not specific in clearly identifying the nature and required level of performance.

 

  • Indicator: Number of social cohesion projects implemented

 

The AG was not able to obtain sufficient audit evidence for the reported achievement. This was due to fact that there was no evidence that the Department either appointed or approved social cohesion advocates. As such, the AG could not verify if appointed social cohesion advocates conducted the platforms created and or supported. The AG tried to confirm the reported achievement through other means, but was unsuccessful.

Note: The AG also raised this matter for the 2017/18 financial year.

 

Programme 3

  • Various indicators

 

The reported achievement as per the annual report does not agree with the supporting evidence for four indicators, as illustrated below:

 

Indicator

description

Reported

achievement

Audited

value

Number of flagships projects supported;

10

  1.  

Number of community arts projects supported;

  1.  
  1.  

Number of sector organisations supported; and

  1.  
  1.  

Number of capacity building programmes supported

  1.  
  1.  

 

Programme 4

The achievement for the number of newly built and/or modular libraries supported financially reported in the annual performance report was 29. However, the supporting evidence provided did not agree to the reported achievement and indicated an achievement of 38.

 

  1. Compliance with the laws and regulations
  1. Annual financial statements

The financial statements submitted were not prepared in accordance with the prescribed financial reporting framework as required by section 40(1)(b) of the PFMA. The AGSA identified material misstatements on commitments and contingent liabilities in the submitted financial statements. Material misstatements were corrected which resulted in the financial statements receiving an unqualified audit opinion. 

 

  1. Procurement and contract management

 

Goods and services of a transaction value below R500 000 were procured without obtaining the required quotations. The Department appears to be improving in procurement and contract management, as the AG did not flag any further concerns.

 

  1. Expenditure management

The Department failed to take effective steps to prevent unauthorised expenditure and irregular expenditure. Further, payments were not made within 30 days or an agreed period after receipt of an invoice. The AG has flagged expenditure management for at least four successive financial years.

 

  1. Consequence management

Disciplinary steps were not taken against some of the officials who had incurred or permitted irregular, fruitless, and wasteful expenditure as required by the PFMA. The AG flagged this matter for at least the last two financial years.

 

  1.   Internal control deficiencies
  2. Leadership

 

Identified weaknesses in leadership as controls in place were not always effective to ensure oversight monitoring and review of compliance with laws and regulations, annual performance report and the annual financial statements. Further, leadership did not develop adequate policies and procedures on management of some transfers and subsidies. This resulted in lack of a proper process of risk and financial management for financial assistance provided by the department. There was also no thorough review and record keeping of the expenditure reports and accompanying supporting documents on transfers and subsidies to non-profit organisation, Private Corporation and households.

 

The AG identified weaknesses in leadership as controls in place were not always effective to ensure oversight monitoring and the review of compliance with laws and regulations and annual performance report.

 

  1. Financial and performance

 

Leadership did not investigate irregular and fruitless expenditures reported in prior year and for investigations done in prior years, evidence of actions taken against the official as required by legislation could not be produced.

 

  1. Performance overview of 2018/19

 

Total expenditure up to the end of the first quarter amounts to R943.5 million or 20.4 per cent of the main appropriation. This is comparable to spending in the first quarter of 2017/18 during which R919.1 million or 21 per cent of the main appropriation was spent. The Department spent R169.5 million or 15.2 per cent less than projected for the first quarter. Further, the Department has failed to spend the quarterly projected budget for all four-budget programmes.

 

Treasury’s report to the Standing Committee on Appropriations (SCOA) has raised the following matters in relation to the first quarter expenditure. Treasury has noted the matters contributing to the slow expenditure in the monthly expenditure feedback report to the Department.

 

  • Programme 1: Expenditure in this programme is lower than projected by R16.9 million or 22.3 per cent mainly on goods and services. The slow spending is mainly on operating leases due to delayed invoicing by the Department of Public Works (DPW) for Sechaba House.

 

  • Programme 2: Expenditure in this programme is lower than projected by R13.5 million or 26.3 per cent, mainly on transfers and subsidies. The slow spending under transfers in the Social Cohesion and National Building sub-programme is for the Young Patriots project and the Women and People with Disability project. The transfer to the National Youth Development Agency (NYDA) for the Young Patriot’s project was delayed because of an outstanding tax clearance certificate, whilst capacity constraints in the Legal Services Unit of the Department affected the finalisation of contracts with beneficiaries responsible for the implementation of Women and People with Disability project.
  • Programme 3: Expenditure in this programme is lower than projected by R56.4 million or 16.3 per cent mainly on transfers and subsidies as well as goods and services. The slow spending under transfers and subsidies on non-profit institutions (NPIs) and other transfers to private enterprises is mainly on the Cultural and Creative Industries Development sub-programme due to Mzansi Golden Economy (MGE) beneficiaries failing to submit final expenditure reports as per the contractual agreements. Furthermore, slow spending was recorded on departmental agencies (non-business entities) due to the resignation of the project manager responsible for the implementation of the incubator programme implemented by the Performing Arts Institutions.

 

  • Programme 4: Expenditure in this programme is lower than projected by R82.8 million or 12.9 per cent mainly on transfers and subsidies. Slow spending by the Infrastructure Management Office sub-programme is due to slow progress on infrastructure projects at public entities by the DPW. In addition, spending on the Community Library Services Grant (CLSG) was lower than projected due to incorrect projections to provinces as these were based on incomplete business plans from provinces.

 

  • Personnel: Spending on personnel was R63.3 million or 23.2 per cent of the main budget, resulting in a variance of R4.2 million or 6.2 per cent against the first quarter projections. Twenty-seven (27) vacant posts have contributed to the under-expenditure on personnel:

 

  • Programme 1: 17 positions;
  • Programme 2: Deputy Director: Strategic Planning and Director: Resourcing and Multilateral (2 positions);
  • Programme 3: Principal Language Practitioner, Director: Language Policy Development and Implementation, Director: Performing Arts, Director: Human Language Technologies and Deputy Director-General (DDG) (5 positions)
  • Programme 4: Archivist: Book Conservator, Assistant Director: Filing Systems and Chief Director: Heritage (3 positions).

 

 

  1. Observations

During the process of considering the 2019/2020 APP of the Department, the Committee made the following observations:

 

  1. Lack of monitoring

The Committee observed that there was no monitoring within the Department. The Department was not monitoring the projects that they funded and seemed not to have an idea of how the events and projects were run and had no say on the content.

       

  1. Non response to stakeholders and Committee by the Department

The Committee observed a pattern of non-response by the Department to matters raised by stakeholders and the Committee. The Committee felt that they were acting as a conduit between the Department and stakeholders, which was a concern as this, meant that in order for communities to receive attention and or favourable outcome they would have to go through the committee, which was not the mandate of the committee.

 

  1. Victimization of staff

The Committee received complaints that from staff from entities who indicated that management victimized them. There      

 

  1. Finalization of legacy projects

The Committee observed that the Department was delaying the finalisation of the legacy projects, in particular the Winnie Mandela House in Brandtford and the Sarah Baartman project. 

 

  1. Finalization of the White Paper

The Committee raised concern that the White Paper had not been finalised by the Department.  

 

  1. Socio- Economic impact of events

The Committee observed that there were no real socio economic returns on events that were organised, because they mostly concentrated on bringing in international artists.

 

  1. Overall Portfolio Committee Recommendations   

 

  • Mzansi Golden Economy: The Department should find ways of utilising these funds effectively so that the anticipated jobs could be created. 
  • Consequence Management: Leadership should ensure that all those who are found to have contravened legislation, policies and regulations are reprimanded accordingly.
  • Succession Planning: The Department should develop a succession policy and ensure that all employees are part of its development as well as its implementation.
  • Recruitment and selection: When the Department uses agencies, the prospective employee should be in the employment of the Department not that of the agency.  This is in line with the recent amendment of the Labour Relations Act (LRA), which dictates that clients of labour brokers have to hire contractors after three months who earn less than R205 433 annually.
  • Proper Planning: The Department should ensure that it applies the SMART principles in their planning.
  • Leadership: The Department should strengthen its monitoring on all of its entities, and all the personnel in the monitoring and evaluation unit should be held accountable for underperformance on entities.
  • Irregular, fruitless and wasteful expenditure: Internal control mechanisms should be strengthened to curb the recurrence of irregular, fruitless and wasteful expenditure. The Public Financial Management Act (PFMA) section 81 (1)(b) states that an accounting officer of an institution commits an act of financial misconduct if that accounting officer wilfully or negligently permits an unauthorised expenditure, an irregular expenditure or wasteful expenditure.  All senior managers if found to have been negligent on irregular, fruitless and wasteful expenditure, should be held accountable.
  • The Department to look at a feasibility study for the amalgamation of the Department of Arts and Culture (DAC) Entities because twenty-five was too much to made.
  • Members believed that consequence management should be implemented to the affected officials regarding the R17 million that the Department had to pay for the court cases.
  • Members indicated that the Committee should come up with mechanisms that will ensure that the Department and its entities were held accountable.
  • Members also recommended that the entities that received a poor audit outcome during this financial year under review must work towards an improved audit outcome in the next financial year. 
  • Some Members of the Committee raised a concern that they were expected to support a report where certain public holidays were said to have been celebrated successfully whereas in reality it was not the case. For an example, some people in the society do not celebrate Heritage Day but celebrated the National Braai Day and this does not promote social cohesion.

 

  1. Appreciation

 

The Committee thanked the support of the Department that worked hard to produce documents that were required to generate this report.

 

 

 

 

Report to be considered.

 

 

Documents

No related documents