ATC241210: Report of the Portfolio Committee on Sport, Arts and Culture on its Consideration of the 2024/25 First Quarter Financial and Non-Financial Performance of the Department of Sport, Arts and Culture Dated, 04 December 2024

Sport, Arts and Culture

Report of the Portfolio Committee on Sport, Arts and Culture on its Consideration of the 2024/25 First Quarter Financial and Non-Financial Performance of the Department of Sport, Arts and Culture Dated, 04 December 2024

 

The Portfolio Committee on Sport, Arts and Culture (the “Committee”), having considered the 2024/25 first quarter financial and non-financial reports of the Department of Sport, Arts and Culture (the “Department”), reports as follows:

 

1. INTRODUCTION

Section 40(1)(f) of the Public Finance Management Act (PFMA) (No.1 of 1999) makes provision for the accounting officer of a department to submit all reports, returns, notices and other information to Parliament. The Act also stresses the need for accounting officers to regularly monitor and report on the performance of their departments against the agreed budget for the year.

 

Section 5(1)(c) of the Money Bills Amendment Procedure and Related Matters Act (No. 9 of 2009) determines that the National Assembly (NA), through its committees, must annually assess the performance of each national department in relation to the expenditure report of the said department published by the National Treasury in terms of section 32 of the PFMA.

 

The Committee conducts in-year monitoring and assessment of the service delivery and financial performance of the Department towards achieving the performance indicators and targets as set out in the Annual Performance Plan (APP). The quarterly assessments of the Department’s financial and nonfinancial performance also assist the Committee in its preparation for the annual submission of the Budgetary Review and Recommendation Report (BRRR) as determined by section 5(2) of the Money Bills Amendment Procedures and Related Matters Act (No. 9 of 2009).

 

The Committee considered the 2024/25 first quarter performance report on 15 October 2024, after it previously rejected the report in a meeting with the Department on 20 September 2024.

 

2. VOTE 37: SPORT, ARTS AND CULTURE

Vote 37: Sport, Arts Culture comprises the Department and its entities. The purpose of the vote is to provide an enabling environment for the sport, arts and culture sector by developing, transforming, preserving, protecting and promoting sport, arts and culture at all levels of participation to foster an active, winning, creative and socially cohesive nation

 

1. 1. Policy and Strategic Context

Over the Medium Term Strategic Framework (MTSF) for 2020 – 2025, the Department’s strategic outcomes align with, but not limited to, policy priorities of the National Development Plan (NDP) and the Economic Reconstruction and Recovery Plan (ERRP). Annually, direction is also taken from the President’s State of the Nation Address (SONA).

 

The Department responds to Chapters 9 and 15 of the NDP and the strategic planning for the DSAC supports the following Government priorities:

• Capable, ethical, and developmental State.
• Economic transformation and job creation.
• Education, skills, and health.
• Spatial integration, human settlements, and local government.
• Social cohesion and safe communities.

 

Stemming from the NDP, the focus areas for the Department are as follows:

• Promoting social cohesion and facilitating nation-building.
• Creating job opportunities in the cultural and creative sector.
• Developing and promoting sport and recreation.
• Transforming and building capacity in the sport, arts and culture (SAC) sector.
• Maintaining heritage assets

 

Over the MTSF, the Department’s policy and legislative programme is guided by two White Papers. The Revised White Paper for Arts, Culture, and Heritage is in the process of being implemented to ensure that it contributes to the transformation of the sector. The White Paper for Sport and Recreation will co-exist with that for the Arts, Culture and Heritage (ACH) sector.

 

Additionally, the South African ERRP introduced in October 2020, was developed, in the short-term, to preserve lives through supporting livelihoods, distressed firms and financial systems and health care.[1] In the long-term, the ERRP focuses on economic recovery and reconstruction to be implemented by Government and social partners to stimulate equitable and inclusive growth. In pursuit of the NDP goals of reducing unemployment, poverty and inequality, the ERRP thus aims to build a new economy and unleash South Africa’s true potential. The overarching goal of the plan is to create sustainable, resilient, and inclusive economy.

 

In terms of aligning and contributing to the ERRP, the Department has identified 5 critical priority areas where specific interventions can create an enabling environment towards economic recovery:[2]

• Job creation using the employment multiplier model, which includes job opportunities created through the Presidential Employment Stimulus Plan (PESP);
• Creating an enabling environment – through legislation and programmes that promote training, skills development and skills transfer to sector practioners;
• Enabling access to local and international markets – this is realised through implementing programmes on an international platform such as the Cultural Seasons and the promotion of national and provincial flagship projects;
• Monetisation of the cultural; creative and sport industries – projects conducive to monetizing the sector include the ArtBank; Debut Fund and the Mzansi Golden Economy (MGE) Venture Capital Fund;
• Enhancement of the arts, culture; heritage and sport tourism – Various developments are underway to enrich this area with sites that will attract tourists and their related revenue, including the Legacy Projects which enhance heritage tourism, and international events.
• The cross-cutting priority: Reviving the Economy Through Infrastructure Development is responded to through the range of sport facilities, theatres, heritage facilities, and libraries.

 

The President’s State of the Nation Address (SONA) in February 2024 highlighted the following which have a bearing on the sector:[3]

• intensifying efforts to end gender-based violence and femicide (GBVF);
• building a social compact to work with social partners in an effort to address tangible challenges with the aim of building a new society;
• advancing the rights of persons with disabilities, which includes the recognition of the South African Sign Language (SASL) as the 12^th official language; and
• creating job opportunities, particularly for the youth through initiatives such as the Expanded Public Works Programme (EPWP) and the PESP.

 

For the 2024/25 financial year, the Department has committed to focus on core projects which align with Government priorities. In its effort to translate the broad policy statements into implementable programmes, the Department’s outcomes will be realised through the implementation of various projects and interventions. These projects focus on the economic contribution of the sector; the DSAC’s lead role in building a diverse, socially cohesive society; transforming the sector through capacity building; providing integrated and accessible (SAC) infrastructure and information; and the ongoing strive for compliant and responsive governance.

 

 

3. 2024/25 BUDGET ALLOCATION

Consolidated expenditure amounts to a projected R2.4 trillion in 2024/25. As a function, expenditure on learning and culture is projected to amount to R480.6 billion in this financial year. Consolidated government expenditure on arts, culture, sport and recreation, as a component of learning and culture, increases from R11.8 billion in 2023/24 to R12.1 billion in 2024/25.[4] Vote 37, implemented by the Department, is appropriated R6.1 billion.

 

Expenditure is expected to increase nominally at an average annual rate of 0.7 per cent, from R6.1 billion in 2023/24 to R6.2 billion in 2026/27, with transfers and subsidies accounting for 81.8 per cent (R14.9 billion) of spending over the Medium Term Expenditure Framework (MTEF) period. The Department’s total budget amounts to R18.3 billion over the next 3 years following Cabinet-approved net reductions of R1 billion. These are mostly affected on transfers to entities and are not expected to have a negative impact on the Department’s core performance.[5]

 

For the Department in the 2024/25 financial year:

• The total budget allocation is R6.11 billion.
• The total national appropriation by vote is R1.1 trillion, and thus the Department’s allocation is less than 1% of this total.
• Transfers and Subsidies decreases by R66.6 million, from R4.98 billion in 2023/24 to R4.91 billion, and represents 80.5% of the budget allocation.
• Payments for Capital Assets increases by R143.0 million from R126.1 million in 2023/24 to R269.1 million (or 4.4%) of the total budget allocation.
• Current Payments, comprised of Compensation of Employees and Good and Services, decreases by R60.0 million, from R983.6 million in 2023/24 to R923.6 million (or 15.1%) of the budget allocation.
  • Compensation of Employees increases from R382.9 million in 2023/24 to R402.0 million.
  • Good and Services decreases by R79.2 million, from R600.8 million in 2023/24 to R521.6 million.

 

The work of the DSAC is divided across four budget programmes:

• Programme 1: Administration
• Programme 2: Recreational Development and Sport Promotion
• Programme 3: Arts and Culture Promotion and Development
• Programme 4: Heritage Promotion and Preservation

 

Taking the total budget allocation into consideration, Programme 4: Heritage Promotion and Preservation receives the largest allocation at R2.70 billion, followed by Programme 3: Arts and Culture Promotion and Development with R1.63 billion. The lowest allocation is directed towards Programme 1: Administration, which receives R449.0 million in the 2024/25 financial year. Allocations for all programmes, except for Programme 3, are slightly higher compared to 2023/24. However, when the projected inflation rate is applied, budget allocations across all programmes, except for Programme 2, are lower than the 2023/24 allocations.

 

For the 2024/25 financial year, the Department has planned to implement 44 (45 in 2023/24) output indicators. This is a reduction by one (1) indicator compared to the previous financial year.

 

Table 1: 2024/25 Budget Summary of the Department of Sport, Arts and Culture

Programme	Adjusted appropriation	Budget allocation	Nominal Rand change	Real Rand change	Nominal percentage change	Real percentage change	Number of performance targets for 2024/25
R million	2023/24	2024/25	2023/24 – 2024/25
1: Administration	447,8	449,0	1,2	-19,0	0,3%	-4,2%	5
2: Recreation Development and Sport Promotion	1 254,1	1 315,4	61,3	2,3	4,9%	0,2%	7
3: Arts and Culture Promotion and Development	1 797,0	1 638,9	-158,1	-231,7	-8,8%	-12,9%	5
4: Heritage Promotion and Preservation	2 590,4	2 702,5	112,1	-9,2	4,3%	-0,4%	5
Total	6 089,3	6 105,7	16,5	-257,6	0,3%	-4,2%	22

Source: National Treasury. (2023), modified; DSAC. (2024), 2024/25 1^st Quarter Performance Report. Presentation to the Portfolio Committee on Sport, Arts and Culture. Cape Town, 15 October 2024

 

4. 2024/25 FIRST QUARTER EXPENDITURE AND PERFORMANCE

The expenditure information below has been extracted from the quarterly expenditure reports published by Parliament’s Standing Committee on Appropriations.

The appropriation for the 2024/25 financial year was R6.11 billion. By the end of the first quarter, the Department had spent R1.33 billion (21.8 per cent) of the available budget. This is R156.3 million or 10.5 per cent lower than the projected spending of R1.49 billion. Higher than projected spending was recorded for Programme 1, mainly on Good and services. Slow spending in Programme 2 and Programme 3 was mainly on Transfers and subsidies, as well as Payments for capital assets in Programme 2.

 

Table 2 provides a summary of the 2024/25 appropriation for each programme, as well as actual and projected expenditure for the period under review.

 

Table 2: Summary of the 2024/25 appropriated budget and first quarter performance of the Department of Sport, Arts and Culture

Programme (R million)	Available budget	Year-to-date				% Budget Available
		Q1 Projected expenditure	Q1 Actual expenditure	Variance from projected expenditure	% Variance from projected expenditure
1. Administration	449,0	119,9	169,6	-49,7	-41,5%	62,2%
2. Recreation Development and Sport Promotion	1 315,4	365,3	255,9	109,3	29,9%	80,5%
3. Arts and Culture Promotion and Development	1 638,9	459,6	370,3	89,3	19,4%	77,4%
4. Heritage Promotion and Preservation	2 702,5	544,1	536,7	7,4	1,4%	80,1%
Total	6 105,7	1 488,9	1 332,6	156,3	10,5%	78,2%

Source: National Treasury. (2024). Report to the Standing Committee on Appropriations: 2024/25 1^st Quarter Expenditure Report.

 

For Quarter 1, the Department had 22 performance targets and achieved 19 (86%) of these targets and did not achieve three (3), or 14%, of the planned targets.

 

The report will provide an overview of performance per programme for the quarter under review.

 

1. 1. Programme 1: Administration

The purpose of this programme is to provide strategic leadership, management and support services to the Department.

 

The available budget for this programme is R449.0 million. By the end of the first quarter, the Department spent R169.6 million against a projected expenditure of R119.9 million. Spending was higher than projected by R49.7 million (41.5 per cent) mainly on Goods and services due to due to the payment of previous year’s invoices for state-owned leases and municipal accounts. This is because of delayed invoicing by DPWI. The Department notes that the shortfall on this budget allocation will be addressed through reprioritisation during the Adjustments Budget process.

 

Programme 1 achieved three (3) out of five (5), or 60%, of planned performance targets for the quarter.

 

Table 3: Programme 1: An overview of performance targets not achieved

QUARTER 1
Indicator Code/No.	Performance Indicator	Quarterly target	Actual achievement	Reason for variance	Plan to address non-achievement
ADMIN 1.3	Number of Sport, Arts and Culture Izimbizo held.	1	0	Inadequate Evidence to support the reported achievement.	Submission of additional and complete evidence, the indicator will be achieved in the annual target.
ADMIN 1.6	Percentage of councils/boards that are fully constituted.	100%	96%	The Pan South African Language Board (PanSALB) has not been appointed due to parliamentary process which was not concluded in 2023/24 financial year.	Awaiting guidance from the Portfolio Committee on Sport, Arts and Culture.

Source: DSAC. (2024), 2024/25 1^st Quarter Performance Report. Presentation to the Portfolio Committee on Sport, Arts and Culture. Cape Town, 15 October 2024

 

1. 2. Programme 2: Recreation Development and Sport Promotion

The purpose of Programme 2 is to support the provision of mass-participation opportunities, the development of elite athletes, and the regulation and maintenance of facilities.

 

Programme 2 has an available budget of R1.32 billion. Expenditure at the end of the first quarter was R255.9 million against projected expenditure of R365.3 million. Spending was lower than projected by R109.3 million (29.9 per cent) mainly on Transfers and subsidies and Payments for capital assets. The capital transfers to entities could not be made due to public entities either being non-compliant with the Department’s infrastructure policy, or the non-submission of expenditure reports for previously transferred funds. The Department also did not process the transfer to loveLife due to the non-submission of financial reports. Payments for capital assets: Heritage assets had a lower than projected spend due to an outstanding Bill of Quantities for the Sarah Baartman Centre of Remembrance (SBCR), and onsite delays with the construction of the Polokwane Theatre.

 

Programme 2 achieved six (6) of its seven (7), or 86%, of planned performance targets for Quarter 1

 

Table 4: Programme 2: An overview of performance targets not achieved

QUARTER 1
Indicator Code/No.	Performance Indicator	Quarterly target	Actual achievement	Reason for variance	Plan to address non-achievement
RDSP 2.1	Number of athlete Development programmes supported.	9	6	KwaZulu-Natal not supported in the first quarter in line with their Business Plan. The Eastern Cape and Limpopo could not be confirmed as supported due to inadequate evidence.	All provinces are due to report in the second quarter of the financial year.

Source: DSAC. (2024), 2024/25 First Quarter Performance Report, Presented to the Committee.

 

1. 3. Programme 3: Arts and Culture Development and Promotion

The purpose of this programme is to promote and develop arts, culture and languages, and implement the national social cohesion strategy.

 

This programme has an available budget of R1.64 billion. Projected expenditure for the first quarter was R459.6 million. The Department however spent R370.3 million during this period. Spending was thus lower than projected by R89.3 million (19.4 per cent) mainly on Goods and services due to the non-submission of invoices by Nelson Mandela University (NMU) for the South African Cultural Observatory (SACO) and on Transfers and subsidies due to the non-submission of claims from the provinces for Youth Day celebrations. The higher than projected transfers to the Performing Arts Centre of the Free State (PACOFS), Market Theatre, State Theatre and Playhouse Company is for the MGE incubation programme, which was not included in the initial drawings.

 

It should be noted that in the first quarter of 2023/24, the Department also experience late invoicing from NMU for the SACO project.

 

Programme 3 achieved all the five (5) planned targets for Quarter 1.

 

1. 4. Programme 4: Heritage Promotion and Preservation

The purpose of this programme is to preserve and promote South African heritage, including archival and heraldic heritage; oversee and transfer funds to libraries.

 

Programme 4 was appropriated a total budget of R2.70 billion at the beginning of the financial year. Projected spending for the first quarter was R544.1 million while the actual expenditure by the end of the first quarter was RR536.7 million. The lower than projected expenditure by R7.4 million (1.4 per cent) was mainly on Compensation of employees due to vacant posts and on Goods and services due to less travel by the South African Geographical Names Council (SAGNC) members in compliance with cost containment measures.

 

The Department planned to implement and achieve five (5) key performance targets during Quarter 1 and achieved all planned targets for the period under review.

 

5. COMMITTEE OBSERVATIONS

Prior to the meeting of 15 October 2024, the Committee met with the Department on 20 September 2024 to consider the 2024/25 first quarter performance. At the first meeting, the Department’s report was rejected based on unclear and inconsistent reporting. The Department’s report on 15 October 2024 was deemed satisfactory and considered without any observations or recommendations.

 

Report to be considered.

 

 

LIST OF ABBREVIATIONS

Abbreviation	Definition
ACH	Arts, Culture and Heritage
APP	Annual Performance Plan
BRRR	Budgetary Review and Recommendations Report
DPWI	Department of Public Works and Infrastructure
DSAC	Department of Sport, Arts and Culture
ENE	Estimates of National Expenditure
EPWP	Expanded Public Works Programme
ERRP	Economic Reconstruction and Recovery Programme
GBVF	Gender-Based Violence and Femicide
MGE	Mzansi Golden Economy
MTBPS	Medium Term Budget Policy Statement
MTEF	Medium Term Expenditure Framework
MTSF	Medium Term Strategic Framework
NA	National Assembly
NCLIS	National Council for Library and Information Services
NDP	National Development Plan
NMU	Nelson Mandela University
NT	National Treasury
PACOFS	Performing Arts Centre of the Free State
PanSALB	Pan South African Language Board
PESP	Presidential Employment Stimulus Programme
PFMA	Public Finance Management Act
SAC	Sport, Arts and Culture
SACO	South African Cultural Observatory
SAGNC	South African Geographical Names Council
SASL	South African Sign Language
SBCR	Sarah Baartman Centre of Remembrance
SONA	State of the Nation Address