ATC210205: Budgetary Review And Recommendation Report of the Portfolio Committee on Sport, Arts and Culture on the 2019/20 Performance of the Department of Sport and Recreation, Dated 2 February 2021

Sports, Arts and Culture

THE BUDGETARY REVIEW AND RECOMMENDATION REPORT OF THE PORTFOLIO COMMITTEE ON SPORT, ARTS AND CULTURE ON THE 2019/20 PERFORMANCE OF THE DEPARTMENT OF SPORT AND RECREATION, DATED 2 FEBRUARY 2021

The Portfolio Committee on Sport, Arts and Culture (hereinafter referred to as the “Committee”), having considered the 2019/20 financial and non-financial performance of the Department of Sport and Recreation (hereinafter referred to as the Department), Boxing South Africa and the South African Institute for Drug-free Sport, reports as follows:

 

1. INTRODUCTION AND MANDATE OF THE PORTFOLIO COMMITTEE AND THEDEPARTMENT OF SPORT, ARTS AND CULTURE

1.1. Introduction

Section 42(3) of the Constitution of the Republic of South Africa, 1996 bestows the oversight function over the national executive to the National Assembly (NA). The National Assembly Committees are required in terms of Section 5 of the Money Bills Amendment Procedure and Related Matters Act, 2009 (Act No. 9 of 2009) to annually assess the performance of each national department, and to thereafter submit a Budgetary Review and Recommendation Report (hereafter referred to as the “BRRR”), which will provide an assessment of the Department’s service delivery performance given available resources; an assessment of the effectiveness and efficiency of the Department’s use and allocation of available resources; and may include recommendations on the forward use of resources.

 

1.2.The Department of Sport, Arts and Culture (Previously Sport and Recreation South Africa)

The newly merged Department of Sport, Arts and Culture [previously Sport and Recreation South Africa (SRSA)] is aimed at developing sport and recreation in the Republic of South Africa. Though SRSA and the Department of Arts and Culture were subsequently merged, this report only outlines the budgetary review of SRSA and a combined report will only be presented from the 2020/21 financial year onward. The Department derives its mandate from the Constitution of the Republic of South Africa (1996), which requires sport and recreation to be transformed and democratised in accordance with the values of human dignity, equality, human rights and freedom, non-racism and non-sexism. The mandate of the Ministry of Sport and Recreation ensures that the National Sport and Recreation Plan finds resonance in the National Development Plan (NDP).

Government’s strategic priorities have remained unchanged since the 2014-2019 electoral term. This section will thus outline the Department’s strategic priorities. The Medium Term Strategic Framework (MTSF) identifies key priorities, which are delineated into fourteen outcomes and associated activities and targets. Outcome 14, ”A diverse, socially cohesive society with a common national identity” that responds to chapter 15 of the National Development Plan (NDP) is assigned to the Department. In response, the Department has developed the following strategic outcome-oriented goals, which guides the Department’s strategic direction over the MTSF:

  • Increase citizens’ participation in Sport and Recreation

This goal measures the extent to which citizens’ access tosport and recreation activities increases, to ensure that citizen participation in selected sport and recreation activities increases by 10% by 2020.

  • Ensure that Sport and Recreation is adequately transformed

This goal measures the percentage (set at 80%) of selected national federations (NFs) that achieve their transformation commitments by 2020.

  • Ensure that athletes achieve international success

This goal measures the percentage improvement in the number of athletes (including teams) achieving national performance standards as a result of them being supported by high-performance interventions. Success is qualified as an improvement in South Africa’s performance at selected multi-coded eventsor an improvement or maintenance of world rankings in selected sports codes by 2020.

  • Enable mechanisms to support sport and recreation

This goal measures the number of sustainable integrated system enablers that are set to be established and fully operational by 2020. This includes facilities, sports confederations, academies, a sports house, information centre, beneficial international relations, as well as supportive sports broadcasting and sponsorships.

  • Sport used as a tool to support relevant government and global priorities

This goal measures the percentage increase in the perception of sport being recognised by the South African population as contributing to nation-building. The targeted increase is 5% by 2020.

  • An efficient and effective organisation

Implementation of internal processes to ensure that SRSA receives annual unqualified audit reports and aManagement Performance Assessment Tool(MPAT) rating of 4 within 5 years.

 

1.3. Oversight role and the Mandate of the Committee

Section 55(2) of the Constitution of the Republic of South Africa, 1996 stipulates that “the National Assembly (NA) must provide for mechanisms (a) to ensure that all executive organs of state in the national sphere of government are accountable to it; and (b) to maintain oversight of (i) national executive authority, including the implementation of the legislation; and (ii) any organ of state”.

In line with the above mentioned provisions of the Constitution, the Committee oversees the implementation of the following Acts:

  • South African Boxing Act, 2001 (Act No. 11 of 2001),
  • South African Institute for Drug-Free Sport Act, 1997 (Act No. 14 of 1997 as amended),
  • The Public Finance Management Act, 1999 as amended by Act No. 29 of 1999,
  • Occupational Health and Safety Act, 1993 (Act No. 85 of 1993),
  • National Sport and Recreation Act, 1998 (Act No 110 of 1998 as amended),
  • Public Service Act, 1994 (Act No. 103 of 1994 as amended),
  • Safety at Sports and Recreational Events Act, 2010 (Act No. 2 of 2010),
  • Bidding and Hosting of International Sport and Recreational Events Regulations, 2010,
  • Recognition of Sport and Recreation Bodies Regulations, 2011.

 

 

1.4. Purpose of the Budgetary Review and Recommendation Report (BRR)

The purpose of this report is to account in accordance with Rule 166 of the Rules of the National Assembly for work done by the Committee in considering the 2019/20 Annual Reports of the Department and entities,which were tabled in accordance with Section 40(1) of the Public Finance Management Act (PFMA); and as referred in terms of National Assembly Rule 338 by the Speaker to the Committee for consideration and reporting in terms of Rules 339 and 340 respectively.

 

1.5. Method and the scope of work of the Committee

In preparation for the consideration of the Department’s2019/20 Annual Report, the Committee considered key government policy documents relevant to the work of the Department, including, among others:

  • Medium Term Strategic Framework (MTSF) 2014 – 2019;
  • The 2019 State of the Nation Address (SONA);
  • The 2019/20 Annual Performance Plan(APP) of the Department andits entities, and
  • The Committee’s 2019/20 financial year-in-year monitoring in terms of Section 32 reports of the PFMA.

 

2. OVERVIEW OF THE KEY RELEVANT POLICY FOCUS AREAS

2.1. The National Development Plan (NDP), Vision 2030

The NDP recognises that sport plays an important role in promoting wellness and social cohesion, and treats sport as a cross-cutting issue, with related proposals in the chapters on education, health and nation building. It further defines sport as a discipline teaching mechanism and an integral component of a healthy lifestyle and enables South Africans to share common space. Unfortunately, instead of sharing common spaces, and developing common loyalties and values through sport, South Africans and South African sport were systematically segregated and underdeveloped under apartheid.

The transformation vision for sports in 2030 is that: Participation in each sporting code begins to approximate the demographics of the country. South Africa’s sporting results are as expected of a middle-income country with a population of about 50 million and with historical excellence in a number of sporting codes.

For the vision of the National Development Plan (NDP) to be realised, school sport must be adequately resourced. The government must ensure that there are adequate facilities for the majority of the population to play sport and that these are adequately maintained. This does not need expensive buildings, but recreational environments with basic facilities that can function as community hubs. Communities should organise sporting events, leagues, championships and generally look after the sports facilities once they are installed or developed. Corporate investment in grassroots sport should also be encouraged.

 

2.2. The 2014 – 2019 Medium Term Strategic Framework (MTSF)

The work of Sport and Recreation South Africa (SRSA) is aligned with outcome 14 (nation building and social cohesion) of government’s 2014-2019 medium-term strategic framework (MTSF). As such, over the medium term, the department intended to focus on: promoting participation in sport and recreation; supporting the delivery of sport infrastructure; fostering transformation in sport and recreation; developing talented athletes by providing them with opportunities to excel; and supporting high performing athletes to achieve success in the international sporting arena.

 

2.3. White Paper on Sport and Recreation 2011

In formulating the White Paper, cognisance was taken of the strategic environment in which sport and recreation is delivered. Furthermore, the effective implementation of government’s policy on sport and recreation will also require an appropriate legislative framework.

The purpose of the White Paper is to pronounce clearly Government’s policy regarding sport and recreation in the Republic of South Africa. This White Paper sets out Government’s vision, strategic objectives, policy directives, outcomes and outputs for promoting and providing sport and recreation.

As an official publication of national government, a White Paper OutlinesGovernment policy. It is tabled in Parliament to ensure that Parliament is informed of Government policies andto give effect to the constitutional requirement that members of the Cabinet must provide Parliament with full and regular reports concerning mattersunder their control [Section 92(3)(b) of the Constitution of the Republic ofSouth Africa, 1996]; andto enable the National Assembly, according to its constitutional powers ofsection 55(2), to maintain oversight over the exercise of national executiveauthority, including the implementation of legislation, and any organ of the state.

From the above, it is clear that tabling a White Paper in Parliament was to ensure accountability and as such, it is accordingly an important link in the process ofensuring accountability and openness of Government.

 

2.4. National Sport and Recreation Plan(NSRP) Vision 2020

The NSRP is an eight-year implementation plan for the sport and recreation policy framework as captured in the White Paper. The NSRP is monitored annually to identify any hindrances which may negatively impact effective implementation.

The NSRP was to be reviewed in 2020. The NSRPwas developed through an intense and thorough consultative process with robust debates and constructive contributions from all role-players that comprised the sport and recreation sector in the country.

There can be no doubt that true accessibility and equitability can only be visible in a transformed sport and recreation sector. It is for this reason that at the core of the NSRP is a Transformation Charter, the purpose of which is to transform the delivery of sport in South Africa

Aligned to the Charter is a multi-dimensional Transformation Performance Scorecard thatenables the sports system to measure progress made towards a transformed sport and recreation sector.

 

2.5. Transformation Charter

The purpose of the Transformation Charter  was to support the Department, in consultation with sport federations and other key stakeholders in sport, in fast-tracking sport transformation and the delivery mechanisms for all sectors and role players involved in sport and recreation.

The Transformation Charter is based on designing, structuring and implementing a range of broad-based transformation initiatives as part of a process of re-organising the operational and strategic initiatives of Government, the South African Sport Confederation and Olympics Committee (SASCOC), and its membership on and off the field of play.Toimplement,manageandmonitora transformationprocessinsport,amulti-dimensionalTransformationPerformanceScorecardisused.TheScorecardisbuiltaroundasetofkeystrategicareas that set thedimensionswithinwhichchangehastobebroughtabout,ifeffectivetransformationistotakeplace.

 

3. SUMMARY OF THE PREVIOUS KEY FINANCIAL AND NON-FINANCIAL

PERFORMANCE RECOMMENDATIONS OF THE PORTFOLIO COMMITTEE

3.1. The 2018/19 Committee Budget Vote Report

Having considered Budget Vote 40 of the Department of Sport and Recreation, the Portfolio Committee on Sport and Recreation recommended that the House support Budget Vote 40: Sport and Recreation and made certain recommendations towards the Executive.

The Minister of Sport, Arts and Culture, within the current financial year, should:

  • Advocate “Recreation” equally as they have for “Sport” and brief the Committee on the progress made regarding the implementation of the Ministerial Advisory Committee on Recreation (MACRe).
  • Continue to lobby for more funding to construct and revamp sports infrastructure in previously disadvantaged communities and in rural areas.
  • Provide the Committee with a detailed briefing on its financial position, which should also include the effects of the budget breakdown on its programmes and the activities of Boxing South Africa (BSA) and the South African Institute for Drug-Free Sport (SAIDS).
  • Have a budget for the implementation of the National Sport and Recreation Plan (NSRP) Vision 2020.
  • Implement the Memorandum of Understanding (MoU) with the Department of Basic Education (DBE) on school sport.
  • Encouragea holistic approach in the transformation of the sport and recreation sector.
  • For 2019/20, the Minister of Sport, Arts and Culture needs to prioritise the following risk factors:
  • Performance Management: Performance management is a significant risk for SRSA as they are reliant on provincial departments for information showing the accuracy and completeness of actual numbers reported in the Department’s APP. SRSA did not achieve all planned targets as a result of provinces not submitting the required supporting documents required in terms of the technical indicators descriptions in 2018/19. Late submissions by the provincial departments resulted in material adjustments to numbers reported in the annual performance report of the Department.
  • Compliance: Transfers to provinces and federations are not being used for the intended purpose; hence, this represents the risk of not complying with the provisions of the Division of Revenue Act and theMass Participation and Sport Development Framework. i.e. Federations; provinces and municipalities using these funds for other purposes than intended.
  • Involve traditional leadership in promoting rural sport development programmes.
  • Work with the South African Football Association (SAFA) on a funding model to support the women’s football league in the country and to do roadshows to convince Corporate South Africa to support women football.

 

4. OVERVIEW AND ASSESSMENT OF THE DEPARTMENT’S 2019/20 FINANCIALYEAR FINANCIAL PERFORMANCE

4.1. Overview and assessment of the overall budget and expenditure

Table 1: 2019/20 budget allocation and expenditure

R million

Adjusted Appropriation

Available Budget

Total year end expenditure

Expenditure as % of Available budget

Underspending

Underspending %

Administration

143.1

140.5

131.2

93.4%

9.3

6.6%

Active Nation

744.1

755.7

755.1

99.9%

0.4

0.1%

Winning Nation

82.2

77.1

63.4

82.2%

13.7

17.8%

Sport Support

166.4

163.8

162.5

99.2%

1.3

0.8%

Sport Infrastructure Support

15.2

14.0

11.6

83%

2.4

17%

Total

1151.1

1151.1

1123.9

97.6%

27.1

2.4%

Economic Classification

 

 

 

 

 

 

Current Payments

288,1

287.7

265.3

92.2%

22.4

7.8%

Compensation of employees

111,8

111.8

98.1

87.7%

13.7

12.3%

Goods and Services

176,4

176.0

167.2

95%

8.7

5%

Interest and rent on land

0,0

0.0

0,0

-

0.0

0.0%

Transfers and Subsidies

860,4

860.4

855.6

99.4%

4.8

0.6%

Payments for Capital Assets

2,5

2.9

2.9

99.8%

0.0

0.2%

Payment for financial assets

0.0

0.0

0.1

-

-0.1

0.0%

Total

1151.1

1151.1

1123.9

97.6%

27.1

2.4%

 

Table 1 shows the annual allocation and expenditure forthe 2019/20 financial year. The Department has underspent by R27.1 million (or 2.4 per cent) ofits allocated budget, having spent R1.124 billion (or 97.6 per cent) of the allocated R1.151 billion. Programmes 1 and 3, mainly under Compensation of Employees as well as Goods and Services, were the major contributors to this underspending.

 

 

 

4.1.2. Expenditure Estimates per Economic Classification

Table 2: The 2019/20 allocation and expenditure per economic classification

Economic Classification

 

Adjusted appropriation

Available budget

Actual Expenditure

Variance

 

Expenditure as % of the finalappropriation

R’000

R’000

R’000

R’000

%

Current payments

288.1

287.7

265.3

22.4

92.2%

Compensation of employees

111.8

111.8

98.1

13.7

87.7%

Goods and services

176.4

176.0

167.2

8.7

95.0%

Transfers and subsidies

860.4

856.6

855.6

4.8

99.4%

Payments for capital assets

2.5

2.9

2.9

0.0

99.8%

Payments for financial assets

0.0

0.0

0.1

-0.1

 

Total

1151.1

1151.1

1123.9

27.1

97.6%

 

After the final appropriation of R1.151 billion, R1.123billionor 97.6 % of the total appropriation was spent, witha variance of R27.1 million.

 

  • As per the economic classification, the total budget of R287.7 million was for current payments. Only R265.3million or 92.2 per cent of the total allocated budget was spent, with a variance of R22.4 million.
  • In terms of compensation of employees, the total budget was R111.8 millionand the Departmentspent R98.1 million or 87.7 per centof the total allocated budget, with a variance of R13.7 million.
  • On Goods and Services, the Department hadallocated R176 million. The expenditure was R167.2 million or 95 per centof the total allocated budget, with a variance of R8.7 million.
  • Transfers and Subsidies wasallocated R856.6 million,which was distributed to Provinces as well as Departmental agencies. The total expenditure was R855.6 million or 99.4 per centof the total allocated budget and the variance was R4.8 million.
  • The allocation forthepayment of Capital Assetswas R2.9 million. The expenditure was R2.9 millionor 99.8per centof the total allocated budget, with minimal variance.

 

4.2. Overview and Assessment of the Programme Budget and Expenditure for 2019/20

financial year

Table 3: SRSA general performance 2019/20

Total budget spent*

97.6%

Total targets set

33

Targets achieved

30

Targets not achieved

3

Success rate of non-financial performance

90.9%

 

* Based on the information provided in the 2019/20 annual report.

(Source: SRSA Annual Report 2019/20)

 

 

 

 

 

 

 

 

 

Table 4: Appropriation perprogramme in the 2019/20 financial year

Financial Performance

Non-financial Performance

R million

Available Budget

Year-end actual expenditure

Expenditure

as % of

Available

budget

Underspending %

Targets Set (Performance indicators)

Targets Achieved

Programme 1: Administration

140.5

131.2

93.4%

6.6%

5

4

Programme 2: Active Nation

755.1

755.1

99.9%

0.1%

11

10

Programme 3: Winning Nation

77.1

63.4

82.2%

17.8%

7

7

Programme 4: Sport Support

163.8

162,5

99.2%

0.8%

8

7

Programme 5: Sport Infrastructure Support

14.0

11.6

83%

17%

2

2

Total

1151.1

1123.9

97.6%

1.3%

33

30

Source: Department of Sport and Recreation Annual Report (2020)

 

4.2.1. Expenditureanalysis

Table 4: Shows the year-end expenditure in relation to the annual allocation in the 2019/20 financial year. The Department has underspent its final appropriation by R27.1 million (or 2.4 per cent), having spent R1.124 billion (or 97.6 per cent) of the available budget of R1.151 billion. Programmes 1 and 3, mainly under Compensation of Employees and Goods and Services, attributed to this underspending.

Programme 1:Administration underspent by R9.3 million (or 6.6 per cent), mainly under Compensation of Employees due to the vacancies that were left unfilled in line with the recommendations to delay the filling of posts until the merger with the Department of Arts and Culture had been completed. The Department also underspent on office accommodation due to late invoicing by the Department of Public Works.

Programme 2: Active Nation underspent by R500 000 (or 0.1 per cent) in the 2019/20 financial year. The Department spent over 99.9 per cent of its budget on this programme.

Programme 3:Winning Nation underspent by R13.7 million (or 17.8 per cent), mainly underCompensation of Employees as posts were left unfilled. InTransfers and Subsidies,particularly the costs of the ministerial bursary programme towards athletes was lower than projected.

Programme 4: Sport Support underspent by R1.3 million (or 0.8 per cent) of the programme allocated budget in the 2019/20 financial year. The Department spent 99.2 per cent of its allocated budget on this programme.

Programme 5:Sport Infrastructure Support underspent by R2.4 million (or 17 per cent), mainly on Compensation of Employees as posts were left unfilled as above, and under the goods and services related to these unfilled posts.

4.3. Unauthorised expenditure

Table 5: Unauthorised expenditure as per SRSA financial statements

 

2019/20

2018/19

Opening Balance

 

R705 000

R705 000

Prior period error

 

-

-

As re-stated

 

R705 000

R705 000

Closing Balance

 

R705 000

R705 000

Source: SRSA Annual Report (2020)

 

The opening balance for 2019/20 was R705 000. Unauthorised expenditure was carried over from the 2018/19 financial year. The figure is similar to that of the 2017/18 financial year. The Departments closing balance on unauthorised expenditure awaiting authorization remained R705 000. The Department did not incur any unauthorised expenditure during the year under review.

 

4.4. Irregular expenditure

The was no Irregular Expenditure reported under the 2019/20 financial year

 

4.5. Fruitless and wasteful expenditure

Table 6: Fruitless and wasteful expenditure as per SRSA financial statements

 

2019/20

2018/19

2017/18

Opening Balance

0.00

R5 038 000

R7 158 000

Prior period error

-

-

-

As re-stated

0.00

R5 038 000

R7 158 000

Less amounts resolved

0.00

(5 038 000)

(2 120 000)

Closing Balance

0.00

0.00

R5 038 000

Source: SRSA Annual Report (2020)

 

The opening balance for fruitless and wasteful expenditure at the beginning of 2018/19 was R5 million, which was carried over from the 2017/18 financial year. The amount was resolved in the 2018/19 financial year, and there was no further fruitless and wasteful expenditure in the period under review. Therefore, the closing balance for fruitless and wasteful expenditure for 2019/20 was zero.

 

4.6. Committee observations on Sport and Recreation South Africa

  1. Service delivery performance

SRSA had 33 targets and 30 of those were achieved and this translates to 90.9% of the budget spent at a success rate of 97.6%.

  1. Submission of bills

The National Sport and Recreation Amendment Bill, 2020, is still in draft. It will be taken through public hearings after the national lockdown and then be reintroduced to the clusters, leading to Parliament.

  1. Construction of sport facilities

The Department needed to prioritise the construction of sport facilities in rural areas and townships, more especially in areas that were underdeveloped duringapartheid and still experience its legacy to date. Members were concerned about the progress on the completion of sport facilities at the Municipal level.

  1. Slow pace of sport transformation

The Members were concerned about the slow pace of transformation in various sporting codes as indicated in the Eminent Persons Group (EPG) transformation report.

  1. Outsourcing of services

Members were concerned that the Department was not taking recommendations of thePortfolio Committee seriously because in the last BRRR it was recommended that the Department must avoid outsourcing of services.

  1. Poor reporting by provincial Departments and SASCOC

Members wanted to know if there has been any consequence management for the provinces, stakeholders such as SASCOC, and relevant officialswithin the Department for not submitting quarterly performance reports on time.

  1. Northern Cape learners not attending the National School Sport Championships

Member probed the reasons why the Northern Cape was the only province with insufficient funds to send learners to the National School Sport Championships.

  1. Challenges facing Chess South Africa

Members wanted to know more about the challenges faced by Chess South Africa and advised the Department to provide support to these struggling federations before they collapse. 

  1. Olympic preparations

Members asked if there were ring-fenced funds within the Department for the Olympic Games seeing that there were still leadership challenges at SASCOC.

  1. Poor performance by the National Football Team, Bafana Bafana

Members were concerned about the poor performance of the National Football Team Bafana Bafana and welcomed the Minister’s initiative of calling for a Soccer Indaba in the 2019/20 financial year.

  1. Poor implementation of the National Women’s Football League

The Members were concerned about the slow pace of implementation of the National Women’s Football League.

  1. Lowering of targets in the Department’s Sport and Recreation Projects

Members noted with unhappiness that the Department had lowered the targetsof ensuring that more citizens are participating in Sport and Recreation activities.

  1. Non-invite to National Sport and Recreation events

Members were concerned that the Department does not invite them to any Sport and Recreation events in order forthem to perform their oversight effectively.

  1. Finalizing the new organogram of the merged Department and filling of vacancies

Members noted that the Department was still busy with its new organogram and wished to receive a presentation about the overall structure and vacant positions.

  1. Information Technology

There were concerns regardingthe Department’s poor ICT systems, as supported by a finding by the Auditor General.

  1. Indigenous games

The Members indicated that they would like to see the Department play a leading role in introducing and teaching Indigenous Games to the international arena.

  1. Memorandum of Understanding on School Sport (MoU)

The Committee called for the fast tracking and implementation of the MoU on School Sport by both the Department of Sport, Arts, and Culture (DSAC) and the Department of Basic Education (DBE).

 

4.7. Auditor-General’s report

The Department has achieved a financially unqualified audit opinion with no material findings (clean audit). The audit opinion thus remains unchanged from those achieved for the last three financial years.

 

4.8.Concluding remarks on the 2019/20financial and service delivery performance for

Sport and Recreation South Africa

The Department continues to lead and implement Outcome 14 of the MTSF through facilitating the participation of Sport and Recreation among citizens and fostering social cohesion. According to the Auditor General’s report, the Department received an unqualified audit outcome with no material findings in the 2019/20 financial year.

The Department had spent 97.6% of its allocated budget in the 2019/20 financial year and presented with no significant over- or under-expenditure in its programmes. However, there were some sub-programmes where the Department had underspent. The Annual Report also indicates that there was no unauthorised and/or irregular expenditure nor was there any wasteful and fruitless expenditure that occurred during the 2019/20 financial year at SRSA.

The Department has only achieved 90.9% of its targets for the 2019/20 financial year and more work needs to be done to ensure that the Department meets all its targets. Improved co-ordination of reporting between the National and Provincial Departments as well as SASCOC is needed in order to allow SRSA to acquire timeous, accurate informationfrom the Provinces.

The Department should always ensure that its implemented programmes are scientifically based and periodically reviewed. The Department should continue to lobby for increased participation in Sport and Recreation activities by South Africans and should ensure regular monitoring and evaluation of its programmes. The MoU on School Sport needs to be fast tracked and implementedby both DSAC and the DBE. The Department must work hand-in-hand with SASCOC to ensure that athletes are funded and adequately prepared for the Tokyo Olympic Games. The Department needsto ensure that the National Federations meet their transformation targets.

 

 

 

5. PUBLIC ENTITIES OF THE FORMER DEPARTMENT OF SPORT AND

RECREATION.

5.1. Boxing South Africa (BSA).

5.1.1. Legislativemandate of Boxing South Africa

BSA was established in terms of the South African Boxing Act, Act No 11 of 2001, herein referred to as the Act. It is the successor of the former Boxing Commissions. It is mandated with accomplishing the following functions:

  1. Provide a new structure for professional boxing in the Republic,
  2. Ensure effective and efficient administration of professional boxing in the Republic,
  3. Recognise open boxing,
  4. Create synergy between professional and open boxing, and
  5. Promote interaction between Associations of Boxers, Managers, Promoters, Trainers, Officials, and BSA.

 

5.1.2. Programmes of Boxing South Africa (BSA)

Boxing South Africa has three programmes in-line with its Strategic Plan 2015-2020; namely:

  • Governance and administration

The purpose of this programme is to provide strategic leadership, good corporate governance and the overall administration (including Finance, HR, ICT, etc.) of boxing. It comprises of the following sub-programmes:

  • The Board
  • Office of the CEO and Corporate Services
  • Stakeholder mobilization and lobbying
  • Boxing development

The purpose of this programme is to ensure compliance with the key aspects of the Boxing Act, itsrules and regulations and enforce their application where non-compliance is observed. The vision going forward is to make the application of the Boxing Act and its regulations the cornerstone of the turnaround for the governance and administration of the sport. Accordingly, this programme features the key activities that are in line with the regulatory requirements of BSA. It comprises of the following sub-programmes:

  • Licensing, sanctioning and ratings
  • Licensees training and development
  • Regulations compliance and enforcement
  • Boxing promotion

The purpose of this programme is to promote and market boxing to improve its public profile, increase its brand value as well as coordinate premium BSA events across the country. The overall purpose and goal of this programme is to raise the public profile of BSA and boxing and to increase its brand value to such an extent that the general public and sponsors will compete for a space in boxing programmes and enlist their support and resources for its further development. It comprises of the following sub-programmes:

  • Marketing and branding
  • Communication
  • Events Coordination
  • Revenue generation

 

5.2.Non-financial performance of BSA

In terms of its Annual Performance Plan, Boxing SA had twenty-seven (27) performance indicators located across its three programmes in the 2019/20 financial year. During the period under review, only ten (10) of twenty-seven (27) targets were achieved.

 

Table 7: Non-financial performance of BSA

 

Total indicators

Achieved

Not-Achieved

Targets not achieved

Programme 1: Governance and Administration

8

5

3

  • Number of agreements or MoUs signed or reviewed.
  • Number of reports on implementation of Stakeholder Engagement Framework
  • Number of reports on the implementation of the amended areas of the Regulations.

Programme 2: Boxing Development

12

5

7

  • Number of Licensees trained and developed
  • Number of site inspections conducted per year
  • Number of compliance reports
  • Number of tournaments sanctioned
  • Number of associations assisted
  • Number of Medical Committee meetings held
  • Number of Memoranda of Understanding with other boxing sanctioning bodies

Programme 3: Boxing Promotion

7

0

7

  • Number of marketing initiatives implemented
  • Number of boxing activities and information communicated to the public
  • Number of sponsorships secured
  • Number of SA Boxing Awards hosted
  • Number of Women in Boxing programmes hosted
  • Number of Revenue Generation Strategy initiatives implemented
  • Number of implemented funding model strategies

 

5.2.1.Programme 1: Governance &administration

This programme area had eight (8) indicators and during the period under review, five (5) of these indicator targets were achieved, equating to 63% achievement. The two targets which were not achieved are highly dependent on third party participation, and thus operational challenges with those stakeholders resulted in delaysand ultimately in BSA not being able to deliver on the targets.

 

5.2.2. Programme 2: Boxing development

In this programme area, BSA achieved 42% of its targets, i.e. five (5) out of twelve (12) targets. The entity indicated in their annual report that the main reasons for most of the indicators which were not achievedwere as a result of the cancellation of tournaments and related activities, as a result of the global pandemic, i.e. Covid-19 which led to a national lockdown.

 

5.2.3. Programme 3: Boxing promotion

Programme 3 comprises of seven (7) indicators and none of the targets were achieved.

 

5.3. Financial performance of BSA

Table 8: Income and expenditure statement of BSA

 

Estimate

Actual amounts

collected

Difference

between final

budget and

actual

REVENUES

‘R 000

‘R 000

‘R 000

Sanctioning Fees

2 221

1 089

1 132

License Fees

722

722

0

Fines, Penalties, and Forfeit Fees

27

2

25

Interest income

51

625

(574)

Transfer from SRSA/Government

14 295

14 295

0

Application fees

20

20

0

Safety and Public Liability

335

335

0

Sponsorship

2 000

2 000

0

TOTAL:

19 671

19 088

583

 

 

 

 

EXPENDITURE

‘R 000

‘R 000

‘R 000

Compensation of Employees

(7 631)

(7 631)

0

Depreciation and amortisation

(162)

(162)

0

Finance costs

 

(2)

(2)

0

Debt Impairment

 

27

27

0

General Expenses

(9 181)

(9 181)

0

TOTAL

(16 950)

(16 950)

0

 

Revenue:The total revenue for BSA in the 2019/20 financial year was R19 millionraised through forfeit fees, interest income, licensing, sanction levies, transfers/grant funding as well as sponsorship. The revenue acquired was lower than their estimated annual revenue of R19.6 million, whereby there was a shortfall of R583 000. Poor revenue collection was observed in the sanctioning fees whereby there was a shortfall of R1.1 million. The entity managed to gain more interest income of R625 000 than the anticipated R51 000.

Expenditure: the final expenditure from the final budget was R16.9 million which covered compensation of employees, depreciation and amortisation, finance costs, debt impairment and  general expenses. According to the statement of financial performance, BSA had a surplus of R2.1 million in the 2019/20 financial year.

Assets vs. liabilities:According to the BSA statement of financial position ending 31 March 2020, the entity had total assets to the value of R4.7 million, with total liabilities amounting to R3.4 million, resulting in the net asset (Accumulated surplus) value of R1.2 million.

 

5.4. Irregular expenditure and fruitless and wasteful expenditure for BSA.

Table 9: Irregular expenditure and fruitless and wasteful expenditure.

Entity

 

2019/20

 

 

Total

Boxing SA

 

Irregular expenditure

 

 

R 8.2 million

Boxing SA

 

Fruitless and wasteful expenditure

 

 

R2.5 million

 

Fruitless and wasteful expenditure: BSA has an opening balance of R2.5 million in fruitless and wasteful expenditure incurred during previous financial years and no fruitless and wasteful expenditure was recorded for the year in review.

 

Irregular expenditure: BSA had an opening balance of R7.1 million and incurred more irregular expenditure in Advertising (R616 730) and on Contractors (R497 490) during the year under review. Therefore the closing balance for irregular expenditure was R8.2 million.

 

5.5. Auditor’s report for Boxing South Africa

According to the Auditor General’s report, BSA received an unqualified audit opinion/report with findings.

Areas of non-compliance with legislation include:

  • Supply chain management- fair and competitive processes not followed.
  • Expenditure management- incurrence of irregular expenditure was not prevented.
  • Consequence management- documents with regard to some investigations for irregular and fruitless expenditure not provided nor was there evidence of disciplinary steps taken.

 

5.6. Committee observations on Boxing South Africa

  1. Performance targets not met

There is a concern that BSA only achieved 10 of its 27 targets, which is only an achievement rate of 37% in the year under review.

  1. Performance indicators not well defined

There were some performance indicators and targets that were not clearly defined, measurable and not specific to the overall strategy of the organization.

  1. Relationship with the South African National Amateur Boxing Organisation (SANABO)

The Committee was concerned about the relationship between BSA and SANABO and needs to do follow-up as to whether the two organizations have a good working relationship.

  1. Poor collection of sanctioning fees

The Committee showed concern over the poor collection of sanctioning fees by BSA

  1. Accessibility of boxing nationwide

The Committee showed concern that boxing development and the tournaments were concentrated in the Eastern Cape province and wondered if there is a roll-out for boxing to take place in the rest of the provinces, with particular emphasis on rural areas.

  1. Change management and strategy implementation

Boxing South Africa should try to stay the course with the strategic plan set out at the Boxing Indaba in 2013 and continue an upward trajectory, by implementing the resolutions of their indaba.

  1. Women’s boxing

The Committee showed concern regarding the development of women’s boxing and would like to see more support for female boxing.

  1. Licencing with South African Broadcasting Corporation (SABC)

The Committee was concerned that boxing in SA was not popular among the public and called for BSA to speed up the process of acquiring a licence with the SABC in order for live professional boxing matches to be broadcasted by the National Broadcaster.

 

6. SOUTH AFRICAN INSTITUTE FOR DRUG-FREE SPORT (SAIDS)

The South African Institute for Drug-Free Sport operates as an independent public entity in sport with jurisdiction over all sports codes and entities that are recognized by SASCOC and/or are individual signatories to the World Anti-Doping Code. The South African Institute for Drug-Free Sport Act, No. 14 of 1997 Government Gazette, Vol. 383, No. 18028, 23 May 1997 states: “To promote participation in sport free from the use of prohibited substances or methods intended to artificially enhance performance, thereby rendering impermissible doping practices which are contrary to the principles of fair play and medical ethics, in the interest of the health and well-being of sportspersons; and to provide for matters connected therewith”.

The South African Institute for Drug-Free Sport is a non-profit organisation. As such, no dividends are declared to any members or outside parties and all funds received are utilised for the furtherance of the Institute’s objectives as outlined in Section 10 of the South African Institute for Drug-Free Sport Act. The Institute for Drug-Free Sport receives the majority of its funding from DSAC.

 SAIDS is ISO 9001:2015 certified by Bureau Veritas Certification Holding SAS – UK Branch, which certifies that itsManagement System has been audited and found to be in accordance with the requirements of the ISO 9001:2015 management system standards.

All South African sports organisations and national federations are obliged to;

  • Recognise the authority of SAIDS and comply with its directives following South Africa’s endorsement of the World Anti-Doping Code and the UNESCO convention on anti-doping.
  • To promote participation in sport free from the use of prohibited substances or methods intended to artificially enhance performance, thereby rendering impermissible doping practices, which are contrary to the principles of fair play and medical ethics, in the interest of the health and well-being of sportspersons; and to provide for matters connected therewith.

Its aim is to:

  • Promote participation in sport without the use of prohibited performance-enhancing substances and methods;
  • Counteract doping in sport and ensure fair play and ethics in sport;
  • Protect the health/wellbeing of sports persons and educate sports people about the harmful effects of doping; and
  • Conduct and enforce a national anti-doping programme.

 

6.1. The Programmes of SAIDS

Programme 1: Finance, Compliance and Administration

Programme 2: Doping Control and Investigations

Programme 3: Results Management

Programme 4: Education and Research

Programme 5: National and International Collaboration

The effectiveness of anti-doping in the sports environment predominantly rests on the implementation of a test distribution plan that is based on doping risk and where sports codes are divided into high-, medium- and low-risk categories.

These categories permit the efficient allocation of anti-doping services to sports codes so that these are used to mitigate doping risks. The performance environment of SAIDS is also influenced by the independent World Anti-Doping Agency (WADA) accredited laboratory in South Africa, i.e.the SA Doping Control Laboratory in Bloemfontein. In the sport environment, doping control samples can only be analyzed within a global network of accredited laboratories.

When the accreditation of the Bloemfontein laboratory is under threat, suspended or revoked, SAIDS still has to fulfil its mandate and is required to send its samples to another accredited international laboratory. The transfer of samples to another laboratory is influenced by international foreign exchange rates and international courier costs.

 

 

 

6.2. Non-financial performance of SAIDS

Table 10: Non-Financial Performance of SAIDS

 

Total indicators

Achieved

Not-Achieved

Targets not achieved

Strategic goal 1

7

5

2

  1. Generating of monthly management accounts for CEO review.
  2. Implementation of the remedial plan. The AG did not find any material findings in the 2018/19 financial year.

Strategic goal 2

3

1

2

  • Implementation of the mitigating plan.
  • Implementation of the annual quality assurance/internal audit plan.

Strategic goal 3

5

4

1

  • Blood testing for doping

Strategic goal 4

3

0

3

 

Strategic goal 5

2

1

1

  • Annual review meeting of tribunals to audit decisions for organizational improvements.

Strategic goal 6

4

3

1

  • Annual training seminar for education officers and doping control officers. The entity was supposed to organize 2 annual trainings as their target, but it was indicated that the trainings were combined into 1 workshop.

Strategic goal 7

1

1

0

 

Strategic goal 8

1

1

0

 

Strategic goal 9

1

1

0

 

Total

27

17

10

 

 

SAIDS achieved 17 (or 63%) of their 27 performance indicators and targets, according to their annual report.

 

6.3. Financial performance of SAIDS

Table 11: Income and expenditure statements of SAIDS for 2019/20

 

Estimate

Actual amounts

collected

Difference

between final

budget and

actual

REVENUES

‘R 000

‘R 000

‘R 000

Grant - DSAC

25 644

25 644

0

National Lotteries Commission grant

4 022

2 782

1 240

Fines – Doping Transgressions

0

0

(300)

Doping Control Sales

2 000

4 447

(2 447)

Profit of foreign exchange

0

111

(111)

Insurance Claims

0

0

0

Sundry income

0

32

(32)

Bad debts recovered

0

46

(46)

Interest received

200

233

(33)

TOTAL:

31 866

33 595

(1729)

 

 

 

 

EXPENDITURE

‘R 000

‘R 000

‘R 000

Administration

11 739

11 845

(106)

Education

4 008

2 840

1 168

Doping Control

12 868

14 376

(1 508)

Results Management

1 962

1 590

372

Internal Liaison

654

352

302

Corporate Services

635

642

(7)

TOTAL

31 866

31 645

221

 

Revenue:The entity was able to collect a total revenue of R33.5 million (5.4% higher than projected) in the 2019/20 financial year. The revenue of R25.6 million was acquired through the DSAC grant, R2.7 million from the National Lotteries Commission (NLC), R4.4 million through Doping Control Sales, R111 000 through foreign exchange profit, R32 000 was sundry income, R46 000 bad debts recovered, and R233 000 interest received.

Expenditure: The total expenditure from the budget was R31.6 million. Most of the expenditure was on Doping Control (R14.3 million), Administration (R11.8 million), Education (R2.8 million), and Results Management (R1.5 million).The entity acquired a net surplus of R1.9 million.

Assets vs. liabilities: According to the SAIDS statement of financial position ending 31 March 2020, the entity had total assets to the value of R7 million, with totalliabilities amounting to R4.8 million, resulting in the net asset (Accumulated surplus) value of R2.2 million.

 

6.4. Irregular expenditure and fruitless and wasteful expenditure for SAIDS

Table 12: Irregular expenditure and fruitless and wasteful expenditure

Entity

 

2019/20

 

Total

SAIDS

 

Irregular expenditure

 

R1.5 million

SAIDS

 

Fruitless and wasteful expenditure

 

R20 000

 

Irregular Expenditure: SAIDS had an opening balance of R85 000 irregular expenditure that occurred in prior years. In the year under review, SAIDS incurred R1.4 million in irregular expenditure, creating a closing balance of R1.5 million in irregular expenditure. The irregular expenditure related to the following:

  • Overspending on internal audit contract.
  • Foreign supplier with no completed and signed declaration of interest.
  • Suppliers not tax compliant as per the central supplier database.
  • No approval from National Treasury for contract extensions in excess of 15% threshold.

Fruitless and wasteful expenditure:SAIDS had an opening balance of R20 000 in fruitless and wasteful expenditure that wasincurred in prior years and no fruitless and wasteful expenditure was recorded for the year under review.

6.5. Auditor’sGenerals report

SAIDS achieved anunqualified audit outcome with findings. The most common findings were as follows:

  • Declaration of interests not submitted by bidders at one auditee.
  • Supplier tax matters not declared at one auditee.
  • Uncompetitive and unfair procurement processes at two auditees.
  • Bid adjudication committee not composed in line with policies at one auditee.

 

6.6. Committee Observations on SAIDS

  1. Doping education at school level

The Committee wanted an increased rollout of Sports Doping Education at school level, given that there has been increased steroid use among high school students and athletes.

  1. Drug testing at the school level

There needs to be some form of legislation allowing for increased drug testing at school level without the interference of parents and coaches.

  1. Breach of supply chain processes at SAIDS

The Committee was concerned over the increased level of irregular expenditure at SAIDS in the year under review.

 

 

 

7. OVERALL PORTFOLIO COMMITTEE RECOMMENDATIONS

7.1. Sport and Recreation South Africa (SRSA).The Portfolio Committee on Sports, Arts

and Culture recommends the following:

The Portfolio Committee recommends that the Minister for Sport and Recreation undertake the following:

  1. That the Department finalise the new organogram for the merger of SRSA and DAC and present the number of vacancies that will be available.
  2. That the Department continue to monitor the work of all the public entities, given the material findings in the Auditor General’s report.
  3. The Department capacitate its own staff to do the work required rather than relying on contractors.
  4. The Department should ensure that critical vacancies are filled under the new organogram.
  5. The Department should prioritise the issue of transformation in sport, given the slow pace in some sporting codes.
  6. The Minister to lobby Provincial counterparts in the promotion of health and well-being of the nation by providing mass participation opportunities through active recreation programmes and do proper reporting on these programmes.
  7. That the Minister fast-track the implementation the Memorandum of Understanding (MoU) between the Department of Sport and Recreation and the Department of Basic Education. This was going to contribute to the development of school sport and community sports club programmes.
  8. Members also felt that the issues of the South African Sports Confederation and Olympics Committee (SASCOC) should be captured in the report as the organization was still experiencing challenges with regards to the implementation of the recommendations of the Zulman Inquiry.
  9. Given that there was a National Lockdown towards the end of the 2019/20 financial year, the Department should continue supporting athletes, especially those that have lost income as a consequence of the lockdown.

 

7.2. South African Institute for Drug-Free Sport (SAIDS).The Portfolio Committee on

Sports, Arts and Culture recommends the following:

  1. SAIDS needed to update its Supply Chain Management (SCM)and Procurement Policy to include the requirements for local production and content, and continue with the strict compliance practices currently in place.
  2. SAIDS should ensure that disciplinary measures are taken for the breach in supply chain processes, given that the entity has incurred R1.5 million in irregular expenditure.
  3. With the assistance of the Department through its school sport and community sport programmes, SAIDS must considerreaching out to townships and rural areasto implement the anti-doping education projects specific to youth sports. This point was raised in previous financial years.
  4. Through engagements with the Department, SAIDS needs to look at crafting legislation that will address drug testing at school sport level to avoid resistance from coaches and parents.

 

7.3. Boxing South Africa (BSA). The Portfolio Committee on Sports, Arts and Culture

recommends the following:

  1. The Accounting Authority must implement consequence management and there must be an action plan to deal with investigations for cases of irregular, fruitless and wasteful expenditure to ensure that matters of discipline, financial misconduct and recovery are dealt with.
  2. Boxing South Africa should familiarise itself with the Framework for Managing Strategic Plans and Annual Performance Plans and the Framework for Managing Programme Performance Information.
  3. Boxing South Africa should make sure that their performance indicators and targets are clearly defined, measurable, and specific to the overall strategy of the organization.
  4. Boxing South Africa should strengthen and maintain good working relationships with SANABO.
  5. The Committee would like to see a rollout of boxing development and tournaments throughout the country, especially in rural provinces, as boxing is currently concentrated in one province.
  6. Boxing South Africa should stay on course with the strategic plan set out at the Boxing Indaba in 2013 by implementing the resolutions of thatIndaba.
  7. Boxing South Africa should put more effort into the development of women’s boxing.
  8. The Committee called for BSA to speed up the process of acquiring a licence with the SABC in order for live professional boxing matches to be broadcast by the National Broadcaster.

 

8. SUMMARY

The Committee was satisfied with the clean audit outcome of the Department of Sport and Recreation South Africa (SRSA). The main concern isthe two sport entities (SAIDS and BSA), which both received unqualified audit opinions with material findings. The audit report found that there was irregular expenditure at both BSA and SAIDS, indicating a breach of supply chain processes during the year under review. The Committee will request the management of the Department and entities to provide feedback on the implementation and progress of the audit action plans to ensure further improvement in the audit outcomes of their portfolios. The Committee will alsomonitor the implementation of its recommendations to the Department and entities.

 

9. APPRECIATION

The Chairperson wishes to acknowledge the oversight work done by the Portfolio Committee members. The Committee thanks the Minister, Deputy Minister, Department of Sport and Recreation, the office of the Auditor-General South Africa and all other stakeholders for their contribution towards the work and achievement of a clean audit by the Department.

 

 

Report to be considered

Documents

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