ATC131021: The Budgetary Review and Recommendation Report of the Portfolio Committee on Sport and Recreation, on the performance of the Department of Sport and Recreation for the 2012/2013 financial year, dated 15 October 2013

Sports, Arts and Culture

The Budgetary Review and Recommendation Report of the Portfolio Committee on Sport and Recreation, on the performance of the Department of Sport and Recreation for the 2012/2013 financial year, dated 15 October 2013

The Portfolio Committee on Sport and Recreation, having considered the performance of the Department of Sport and Recreation and submission to National Treasury for the medium term period of the Department, reports as follows:

1. Introduction

1.1. The Role and Mandate of the Portfolio Committee is to:

·         Consider legislation referred to it

·         Exercise oversight over the Department of Sport and Recreation and its statutory bodies, namely Boxing South Africa and South African Institute for Drug-free Sport

·         Consider International Agreements referred to it

·         Consider the Budget Vote of the Department of Sport and Recreation

·         Facilitate public participation in its processes

·         Consider all matters referred to it in terms of legislation, the Rules of Parliament and resolutions of the House

In terms of the Constitution of the Republic of South Africa, 1996, Portfolio Committees have a mandate to legislate, conduct oversight over the Executive and facilitate public participation.

1.2. The role and mandate of the Department

The Department of Sport and Recreation is the primary government institution responsible for formulating and implementing policy on sport and recreation. It reports to and advises the Minister who, in conjunction with Cabinet, takes final responsibility for Government policy. The Department is headed by the Director-General, who is responsible for ensuring that sport contributes towards maximising access to sport and recreation and encouraging world-class performance which strengthens social cohesion and nation-building.

1.3. Purpose of the BRR Report

The Money Bills Procedure and Related Matters Amendment Act, Act 9 of 2009, sets out the process that allows Parliament to make recommendations to the Minister of Finance to amend the budget of a national department. In October of each year portfolio committees must compile Budgetary Review and Recommendation Reports (BRRRs) that assess service delivery performance given available resources and evaluate the effective and efficient use and future allocation of resources, and may make recommendations on future use of resources. The BRRRs serve as source documents for the Standing/Select Committees on Appropriations/Finance when they make recommendations to the Houses of Parliament on the Medium-Term Budget Policy Statement (MTBPS). The comprehensive review and analysis of the previous financial year’s performance, as well as performance to date, form part of this process.

1.4. Method

For the period under review, the Portfolio Committee on Sport and Recreation, in exercising its oversight role, interacted with the Department of Sport and Recreation and analysed its 2012-2016 Strategic Plan, the 2012/13 Annual Report, the Auditor-General (AG) Report, the State of the Nation (SONA) address and the 2011/12 Estimates of National Expenditure.

To date the Portfolio Committee has held meetings with the South African Institute for Drug-free Sport (SAIDS), Netball South Africa, Sports Trust, South African Sport Confederation and Olympic Committee (SASCOC), National Lottery, South African Football Association (SAFA), Athletics South Africa (ASA), Basketball South Africa (BSA), Swimming South Africa, Hockey South Africa, South African Rugby Union (SARU) and Cricket South Africa (CSA). During the same period it has undertaken oversight visits to the Free State, North West, Limpopo, Mpumalanga, Western Cape and Northern Cape.

2. Overview of the key policy focus areas

2.1. Key Government policy documents

The BRR Report has been informed by such documents as the SONA 2013, in which it was indicated that, during the 2013/14 financial year, there was a need for all departments to align their strategic plans with the National Development Plan. As a result, the Committee, in its oversight function, needed to ensure that the department’s strategic plans were aligned. The Medium Term Strategic Framework (2009-2014) is also a key policy document that has been taken into consideration wherein Sport and Recreation South Africa is responsible for delivering Outcome 12(b), which seeks to create an empowered, fair and inclusive citizenship .

South African sport has been operating without any defined Sport System over many years, and the Department has, since 2011, developed a National Sport and Recreation Plan (NSRP), which is a roadmap of South African sport, the first of its kind since 1994. The 2012-16 Strategic Plan that the Department has presented, has been taken into consideration. The targets of the NSRP have also been included in the 2013/14 Annual Performance Plans that the department has presented during the year. The NSRP has been implemented for the first time in the 2013/13 financial year and will inform the projection and targets of the department.

2.2. Outcome- b ased A pproach

The following are the strategic outcome oriented goals of the Department over the medium term:

·         Increase citizens’ access to sport and recreation activities annually by 5% by 2016.

·         Oversee the transformation of the sport and recreation sector where 80% of the recognised National Federations should meet the transformation targets by 2016.

·         Ensure that more athletes achieve international success by 10% in 2016.

·         Develop enabling mechanisms to support the delivery of sport and recreation established and sustainable by 2016.

·         Sport and Recreation used as a strategic tool to contribute directly to all five government priorities and two United Nations priorities by 2016.

·         Implement internal processes and procedures to ensure that SRSA annually receives an unqualified audit report.

2.3. Overview of revised Strategic Plan and Annual Performance Plans

As indicated earlier, as a result of the introduction of the National Development Plan as a policy, the department has aligned its plans with this policy, albeit, with a focus on programmes that will not require any increment of resources. This is because of the department’s resource constraints. The 2012-16 Strategic Plan and the 2013/14 Annual Performance Plan of the Department has highlighted the commitment to continue implementing the NSRP in the 2012/13 financial year. SRSA has indicated that it would require about R10 billion to implement the National Sport and Recreation Plan, hence it was necessary for them to adjust their strategic plans in order to align to the NSRP.

3. Overview of key developments in the organisational and service delivery environments of the Department for 2012/13 and 2013/14 MTEF cycle

Cabinet approved the National Sport and Recreation Plan (NSRP) in May 2012 as an integral part of the National Development Plan of South Africa. This has been one of the major developments in the provision of service delivery by the department in the current financial year. The NSRP specifically focuses on the following strategic objectives to assist with broadening the base of sport and recreation:

-       To improve the health and wellbeing of the nation by providing mass participation opportunities through active recreation ;

-       To maximise access to sport, recreation and physical education in every school in South Africa;

-       To promote participation in sport and recreation by initiating and implementing targeted campaigns.

The projected budget needed to fulfil all the objectives of the National Sport and Recreation Plan is estimated to be R10 billion.

3.1. Strategic Goal 1: increase citizens’ access to sport and recreation activities annually by 5% by 2016

The 2012/13 Annual Report indicates that 1 277 653 citizens gained access to sport and recreation opportunities through the conditional grant given to provinces. During the year under review there were 8 653 participants in the sport promotion projects. There is a need for the department to conduct a proper analysis of the situation in order to increase access to sport and recreation activities.

3.2. Strategic Goal 2: oversee the transformation of the sport and recreation sector where 80% of the recognised National Federations should meet the transformation targets by 2016

The department has, in the 2012/13 financial year, improved on the number of national federations it provides assistance to. They have assisted 68 (89%) sporting federations which is an increase from 54 (71%) that were assisted in 2011/12. The Eminent Persons Group which has been established to monitor and evaluate the pace of transformation in sport has been setting systems in place that would allow it to do its work. As a result of this, no federation had been evaluated using the transformation scorecard during the 2012/13 financial year. This is planned for the 2013/14 financial year.

3.3. Strategic Goal 3: ensure that 10% more athletes achieve international success by  2016

During the year under review only 90 athletes were supported with high performance training. The athletes support programme was being discontinued because it was only providing service to a few athletes. The Department has decided to focus support on talent identification and development through the district academies and the sport focused schools in order to reach more athletes in line with the National Sport and Recreation Plan. The Sport Support Services, a programme under which the mandate of delivering this goal falls, had received R 189.8 million during the 2012/13 MTEF period and has been allocated R214.6 million in this financial year. It is expected that the new approach and resources will benefit more athletes than in the previous financial year.

3.4. Strategic Goal 4: develop an enabling mechanisms to support the delivery of sport and recreation established and sustainable by 2016

The indicator refers to a number of enablers that are sustainable for a minimum of 5 years. In its output on the 2012/13 annual report, the department has outlined 12 outputs. The outputs appear to be linked to the enablers of the National Sport and Recreation Plan with a long term view and most are a work in progress, with no specific measurable outcomes. Of note is the attention given to the audit of facilities, the Geographical Information System, the National Facilities Plan and the updated norms and standards. It will be very important for the Department to brief the committee on the status regarding the final report on this issue.  The Department is currently busy engaging in negotiations with the National Treasury with regard to the 15% portion of the MIG that has been earmarked for the building of sport and recreation facilities to be transferred and administered by SRSA.

The other notable output is the 3% of the Mass Participation and Development conditional grant which has been allocated to help provinces with the establishment of provincial sport councils. During the oversight exercise the portfolio committee observed that the Free State Sport Confederation is using the financial support they receive from the department maximally, whilst the Mpumalanga Sport Confederation has been disbanded. The North West Provincial Sport Council reported that they did not receive any support from the provincial department. The department has to encourage provinces to use the 3 percent conditional grant allocation to support Sport Councils.

3.5. Strategic Goal 5: Sport and Recreation used as a strategic tool to contribute directly to all five government priorities and two United Nations priorities by 2016.

The Department has managed to present their Sport for Social Change programme to the member countries of the UN Sport for Development and Peace International Working Group (SDPIWG) and they have initiated sport and environment programmes as well.  They have implemented three United Nations priorities successfully. One of the projects is the completion of the UN Sport for Development and Peace International Working Group (SDPIWG) action plan. These are goals that contribute to the Government priorities Goal 12(b), which seeks to build “an empowered, fair, and inclusive citizenship”. Whilst this is the case, the Department has not indicated clear targets and programmes to assist in this regard, thus making it difficult to evaluate and track any changes or progress that take place over time. The committee would appreciate to be briefed about the Action Plan and the broader programme and its budget.

3.6. Strategic Goal 6: Implement internal processes and procedures to ensure that SRSA annually receives an unqualified audit report

It is worth noting that the Department has received an unqualified audit report from the Auditor-General of South Africa with matters of emphasis. There are certain observations with regard to the departmental performance which the department needs to improve. The department has compiled a grant framework with the provinces to ensure that there are proper regulations with regard to the funds transferred.

4. Overview and assessment of financiaL AND SERVICE DELIVERY performance

4.1. Overview of Vote allocation and spending (2009/10 - 2014/15)

Expenditure was expected to increase from R820.8 million in 2011/12 to R848.4 million in 2012/13. In the 2013/14 financial year expenditure has been increased to R1.07 billion due to the additional allocation of R160.9 million over the MTEF period, of which R120 million has been allocated to the three host cities of the African Nations Championship (CHAN) in January 2014. During the 2014/15 MTEF period the allocations will increase by R3 million, and by R4.7 million in the 2015/16 MTEF period. It is also important to note that the department had incurred a 31% increase in spending during the 2012/13 MTEF period, due to the additional allocation for hosting the African Cup of Nations (AFCON 2013). It would be important that the Department provides the committee with a full financial report of the AFCON 2013 as the review does not account for the expenses of the AFCON 2013.

The additional allocations are due to improved conditions of service for Boxing South Africa and the South African Institute for Drug-free Sport, increased operational cost for Boxing South Africa, internal audit functions, the debt of Boxing South Africa, spending on consultants and preparation of athletes for the Olympics and Paralympics (ENE 2013). In the past the Department had an establishment of 206 funded posts. The number of filled posts decreased from 180 in 2008/09 to 171 in 2011/12 due to the closing of the 2010 FIFA World Cup unit in the 2010/11 financial year. Progress should be shared on the Department’s intention to work towards a full staff complement.

The year under review saw the Department’s main cost driver being the transfer and subsidies to the provinces and its entities. This is made of an amount of R833.158 million, 77 per cent of the department’s annual allocation, followed by goods and services worth R145.967 million, which only amounts to 13.6 per cent of the departmental allocation. The increase in expenditure on goods and services was mainly due to the hosting of AFCON and the Ekhaya Project.

The Department went on to under-spend about R9 million, down from R10 million in the previous year, due to the cancellation of some Youth Camps. Following challenges experienced in accommodating all the identified provincial representation, a decision was taken to host the youth camps in all the nine provinces. The under-expenditure that resulted from this change in approach did not impact negatively on the departmental programmes and service delivery. The following table illustrates the budget allocation for 2013/14 and budget estimates for 2014/15 and 2015/16, with further details per programme. The Department is tasked with managing a total budget of R 1.063 billion. The following table sets out the ratios of the programmes in relation to the total appropriated funds for the Department.

Programme

2009/10

2010/11

2011/12

2012/13

2013/14

2014/15

Outcomes

Outcomes

Outcomes

Main

Adjusted

Outcomes

Estimates

Estimates

R’000

R’000

R’000

R’000

R’000

R’000

R’000

R’000

Prog 1 : Administration

80 075

90 795

101 815

113 196

108 050

102 230

124 378

131 317

Prog 2 : Sport & Recreation*

122 685

109 176

178 125

187 290

189 796

215 710

214 587

228 708

Prog 3 : Mass participation

452 368

470 758

479 023

525 427

529 129

509 635

553 461

584 650

Prog 4 : International liaison and events

7 557

14 504

47 662

13 881

230 854

230 654

171 760

13 713

Prog 5: Facilities coordination

5 862

7 200

3 997

8 630

5 270

4 870

9 299

9 589

2010 FIFA World Cup Unit

2 197 883

559 593

-

-

-

-

-

-

Total

2 866 430

1 252 026

810 622

848 424

1 063 099

1 063 099

1 073 485

967 995

Table of transfers to public entities that form part of the SRSA portfolio .

Programme

2009/10      2010/11       2011/12

2012/13

2013/14                2014/15

Outcomes     Outcomes     Outcomes

Budget                   Expenditure

Estimates                 Estimates

R’000

R’000

R’000

R’000

R’000

R’000

R’000

Boxing SA

3 087

2 208

10 112

6 897

10 343

6 552

7 945

South African Institute for Drug Free Sport

6 713

10 042

11 604

15 876

18 463

14 024

14 895

Total

9 800

12 250

21 716

22 773

28 806

20 576

22 840

3.1 Financial performance 2012/13

3.1.1 Programme 1: Administration

Historically the expenditure under this programme grew from R74,1 million in 2008/09 to R108.8 million in 2011/12 due to the filling of posts in the Office of the Chief Financial Officer and Corporate Services sub-programmes; this illustration is not reflected on either of the above tables. Expenditure on compensation of employees decreased slightly from R53.9 million in 2011/12 to R53.3 million in 2012/13. The savings on compensation was largely due to vacancies in senior management posts such as Directors of Finance, Information Technology and Supply Chain Management, as well as new posts that were created as a result of restructuring in the Ministry. The post of Director: Supply Chain Management has been filled while a manager responsible for Auxiliary Services assists with the management of the Information Technology Unit and a Deputy Director within Finance, has been appointed to act as Director: Finance.

The programme received additional allocations of R63 million for salary adjustments for improved conditions of service. As a result, spending on compensation of employees is expected to increase marginally from R 60.5 million to R 72.2 million despite the Department increasing its personnel posts over the medium term. Spending on consultants is equivalent to 1.7 per cent of expenditure on compensation of employees in the 2012/13 financial year. Consultants mainly provide legal services, external auditing investigations and audio visual services (ENE 2013).

Some of the service delivery performance in the programme:

-       The Department had signed one MoU with CATHSSETA to provide resources to fund the Coaching Framework. Seventeen guarantees were signed in relation to AFCON 2013.

-       The Department managed to achieve all six projects it had planned for reaching women, rural communities, elderly, people with disabilities, people living with HIV/Aids and the youth.

-       The Department had achieved 57 task teams impacting on its work.

-       The Department managed to implement seven sport and recreation promotional campaigns. The increase was due to the operational needs of SRSA.

-       141 staff members were trained.

-       115 employees were capacitated in labour relations issues.

3.1.2 Programme 2: Sport Support Services

Expenditure on transfers to non-profit institutions between 2011/12 and 2012/13 allowed the Department to increase the number of sport and recreation bodies it supports from 54 in 2011/12 to 68 in 2012/13. Key sub-programmes include: Programme management, sport and recreation service providers, club development, education and scientific support. There was a general increase of line items in this sub-programme, from R175.1 million in 2011/12 to R213.9 million in 2012/13. Of note is the transfer to non-profit institutions, which grew from R115.3 million in 2011/12 to R137.0 million in 2012/13 The club development model is being revised in line with National Sport and Recreation Plan. The federations that could not be supported were mainly due to their not complying with the minimum qualification requirements to receive funding.

The spending trend of the strategic and executive support has grown from 6.9 percent in 2012/13 to 8.7 percent over the medium term in 2013/14. Equally important has been the growth on corporate services from 4.6 per cent to 6.3 percent in 2013/14.

Expenditure in the scientific support sub-programme increased significantly in 2012/13 to support high performance institutions to train athletes more intensively. Furthermore, a transfer to the South African Sport Confederation and Olympic Committee was introduced in 2012/13 to support high performance sport. Spending on consultants is equivalent to 20.1 per cent of the total expenditure on compensation of employees in 2012/13.

Some of the service delivery performance in the Sport Support Services programme:

-       The department managed to secure the funding of 68 of their target of 70 national federations.

-       The department also managed to monitor and evaluate 13 projects.

-       75% of compliance of SAIDS to Service Level Agreements. This was due to the delays in transferring funds to SAIDS due to non-submission of required documents.

-       75% of compliance of Boxing SA to Service Level Agreements. This was due to the delays in transferring funds to Boxing SA due to non-submission of required documents.

-       50% of compliance of SASCOC to Service Level Agreements. This was due to the delays in transferring funds to SASCOC due to non-submission of required documents.

-       75% of compliance of Sport Trust to Service Level Agreements. This was due to the delays in transferring funds to Sports Trust due to non-submission of required documents.

-       The Department managed to achieve a target of 288 affiliated and functional clubs due to the focus of provinces on the existing clubs.

3.1.3 Programme 3: Mass Participation

The Mass Participation programme is the largest programme of the Department, with a total budget of R509.63 million in 2012/13 MTEF period, up from R486.43million from 2011/12. This sub-programme promotes sustainable participation of people who had been previously excluded, strengthening of school sport through the training of coaches, developing school sport by monitoring service level agreements with federations and the identification of talent. Key sub-programmes include:

·         Programme Management

·         Community Mass Participation

·         School Sport.

There was a reduction of budget within the Programme management sub-programme, from R482 000 in 2011/12 to R343 000 million in 2012/13 and this year under review, 2012/13 MTEF period, saw the Department under-spending by R142 000. This is largely due to the revision of the monitoring mechanisms of officials visiting provinces thus saving on travelling costs.

The community mass participation sub-programme was allocated R482.8 million in the 2012/13 MTEF period, up from R472.02 in 2011/12 MTEF period. The department needs to ensure that the indicators on the performance are in line with the resources it has received in order to avoid deviations.

During the year under review the department managed to increase the number of schools in the sport leagues to 15 662, from a target of 4 000 schools. The department also managed to train 7 405 educators to deliver schools sport programmes, and achieved a total of just over 1 million learners who participated in school sport in 2011/12. This only increased to 1.1 million in the year under review. The budget of School sport sub-programme increased significantly from R12.1 million in 2011/12 to R42.6 million 2012/13, and this increase is in line with the increase in the number of schools supported to participate in schools leagues.

Some of the service delivery performance in the Mass Participation programme:

-       9 Youth camps were held in all nine provinces due to the spread of camps to provinces.

-       43 programmes were implemented using sport as a mechanism for achieving peace and development. This is largely due to the unplanned intervention that SRSA through its engagement with stakeholders had to make.

-       334 jobs were created.

-       15 662 schools were supported to participate in the schools sport leagues.

-       1.13 million learners took part in school sport.

-       7 405 educators were trained to deliver schools sport programmes.

3.1.4 Programme 4: International Liaison

This programme manages international exchange programmes, supports travel arrangements for sports people and encourages the staging of major sports events and the promotion of sports tourism. This programme managed 5 international exchange programmes during the 2012/13 MTEF period. Key sub-programmes include:

·         International Liaison

·         Major events

There was a 100 percent achievement in facilitating the provision of passports on time. With the increase of multilateral agreements that the department is intending to complete in the 2013/14 MTEF period, the budget for international liaison has decreased from R4.2 million in 2012/13 to R3.4 million in 2013/14 and will further decrease to R3.3 million in the 2014/15 MTEF period. The international liaison budget has decreased from R5.4 million in 2011/12 to R4.5 million 2012/13 and the sub-programme overspent its budget by R165 000. It will be important to ensure that the Department regulates this over expenditure by putting systems in place.

The budget for major events had increased from R42.2 million in 2011/12 to R226 million in the 2012/13 financial year. The increase in the budget of this sub-programme came as a result of the transfers and subsidies made to provinces and municipalities who were hosting the AFCON 2013; about R123.1 million was transferred and another R83.3 million was transferred to the AFCON LOC for the operations.  By the end of the financial period, there were still outstanding invoices regarding international travel. The department should provide the committee with the full report on the AFCON 2013, including the financial statements.

Some of the service delivery performance in the International liaison and Events  programme:

-       6 Programmes of action were implemented following the signing of MoU with strategic countries in Africa and abroad.

-       4 International exchange programmes were executed to enrich sport development

3.1.5 Programme 5: Facilities Coordination

This programme was established to facilitate the provision and management of sustainable sport and recreation facilities. To achieve this purpose National Treasury had made an allocation of R4.3 million in the 2011/12 MTEF period and this was increased to R4.87 million in 2012/13. The bulk of this allocation, R3.18 million, went to planning and advocacy sub-programmes whilst the remainder of R1.69 million was allocated to the technical support sub-programme. The technical support sub-programme spent less than what it had planned due to the change in the scope of the GIS, which became less costly. As a result, fewer officials visited the province for monitoring of facilities. However whilst the scope of the GIS changed, the Department is currently still in the process of developing the database on Sport and Recreation facilities information.

4 PUBLIC ENTITIES

4.1 South African Institute for Drug-free Sport.

The Auditor-General provided an unqualified audit opinion with regard to the South African Institute for Drug-free sport. This shows a consistency of good financial performance by the entity. SAIDS budget allocation increased slightly from R11.6 million allocated in 2011/12 to R13.2 million allocated over the 2012/13 MTEF period. The allocation is expected to rise to R14 million in 2013/14 and R14.8 million in the 2014/15 MTEF periods.

In the financial year under review, 2012/13 MTEF period, the entity overspent by R1.4 million.  There was a general increase in costs, largely driven by doping control programme from R6.8 million in 2011/12 to R8.2 million in the 2012/13 MTEF periods. The other notable increase was in the result management programme, which increased from R944 000 in 2011/12 to R1.7 million to 2012/13 MTEF periods. The legal process that was undertaken on the doping control process against the winner of the 2012 Comrades marathon led to the charges being withdrawn on a technicality.

The committee would like to emphasise the need to adhere to supply chain management procedures in order to curb irregular expenditure. This is in line with the matters raised by the AG, as a result SAIDS will have to develop and implement policies and plans to address this irregular expenditure.

4.2 Boxing South Africa

In the year under review the AG had given Boxing SA an unqualified audit opinion. For the first time the entity was able to appoint a full audit committee, with the assistance of SRSA. The entity has also appointed a permanent Chief Financial Officer. This is an improvement from the disclaimer opinion they had received in the 2011/12 financial year. Boxing South Africa needs to be consolidated and built upon for the entity to have a proper governance structure, which the AG had been reporting about.

Boxing SA had been allocated R10.1 million in the 2011/12 MTEF period and this was reduced to R5.1 million. The allocation will continue to grow to R6.5 million in 2013/14 up to R7.9 million in the 2014/15 MTEF periods. The entity had a balance of R667 120 at the end of 2012/13 MTEF period, and this had dropped from R1.1 million which was received in 2011/12 financial year. The entity faces litigation, which has been identified as a contingent liability in the current year.

Table on irregular expenditure on Boxing South Africa

Entity

2010/11

2011/12

2012/13

Total Accumulated 2012/13

Boxing SA

720 308

714 944

101 767

1 537 019

Source: Boxing SA Annual report 2012/13

The Auditor General established that Boxing SA had irregularly spent R101 767 during the year under review due to their failure to comply with supply chain management regulations. The entity had managed to reduce irregular expenditure from R714 944 in 2011/12 and R720 308 in 2010/11. The accumulated irregular expenditure in 2011/12 financial was R1.43 million, and this had increased to R1.53 million at the end of 2012/13 financial year.

5 2014/15 MTEF financial allocations

Budget summary 2013/14

R million

2013/14

2014/15

2015/16

Total to be

Appropriated

Current

Payments

Transfers and

subsidies

Payments for

capital assets

Total

Total

MTEF allocation

Administration

124.4

122.1

0.1

2.2

131.3

137.1

Sport Support Services

214.6

55.4

159.2

228.7

239.2

Mass Participation

553.5

55.9

497.6

584.7

611.9

International Liaison and Events

171.8

15.8

156.0

13.7

14.4

Facilities Coordination

9.3

9.3

9.6

10.1

Total expenditure estimates

1 073.5

258.4

812.9

2.2

968.0

1 012.7

Source: SRSA Annual Performance Plan 2013/14

The current allocation for SRSA does not include all the funding requirements as per the approved National Sport and Recreation Plan, which has been costed at R10 billion. It may not be possible to provide the full allocation, and the National Treasury has indicated that it will reduce the budget of SRSA by 1% in the 2014/15 financial year. This will require an innovative way of using the resources in a more effective and efficient manner.

The first quarterly report of the Department had indicated that under Programme 1 of Administration, the Department had achieved sixteen (16) of the thirty (30) targets that were set, with one (1) of them exceeded. One of the achievements made (in Marketing & Communication) was not targeted for in this quarter. SRSA is expected to complete the organisational review and fill all its 62 vacancies. Spending on operating leases increases significantly across the seven-year period, particularly between 2010/11 and 2014/15, as a result of additional allocation for the increased lease fees for office accommodation. It will be very important for the Department to meet the target of the client satisfaction survey as promised.

The national sports federations play a key role in supporting and implementing strategic priorities of the sector. As a result the growth in the expenditure of transfers to non-profit institutions in the 2014/15 financial year will allow the department to increase the number of federations it supports. The Department has taken the initiative of prioritising one of the federations each year, allocating an additional R10 million to that particular federation. During the 2012/13 financial year Netball SA was the beneficiary of this initiative and during the 2013/14 Tennis SA will be the beneficiary. The 2014/15 financial year will see Basketball SA benefitting from this initiative. As part of the Cabinet-approved budget reductions, the Department will reduce the transfer to LoveLife by R 2.2 million over the medium term, where efficiency savings in the administration function will be effected (ENE 2012). This is because LoveLife funding will be aligned to the objectives of the NSRP and SRSA, specifically on developing young sport leaders who are free of HIV, and to the Sport for change initiative.

The spending focus of the Mass Participation Programme will be promoting of mass participation in sport and recreation through the conditional grant, which supports club development, school sport and sporting hubs. The allocation for the community mass participation programme will continue to grow over the MTEF period to R584 million in 2014/15 MTEF. The Department is expected to increase the number of active participants; the target was not achieved during the 2012/13 MTEF period. The saving over the MTEF period under review, 2012/13, was due to reduced travelling costs. With the new monitoring and evaluations tool being revised, fewer officials travelled to provinces and this is expected to grow in the coming years. The Mass Participation Programme will continue to focus on the 16 priority codes.

During the 2013/14 MTEF period the focus of the International Liaison and Events Programme will be on building and strengthening international bilateral and multilateral relationships to support sport and recreation development in South Africa. The reduction in budget during the 2014/15 MTEF period to R3.3 million, down from R3.4 million in 2013/14, is most likely to affect the operations of the Department in this sub-programme. This is further indicated by the fact that the Department had overspent its budget on this programme by R165 000 in the 2012/13 MTEF period. The Department had managed to save on their capital expenditure of the programme due to the LOC payment of the AFCON-mascot.

There is growing concern for the 15% MIG fund allocated for the building of Sport and Recreation facilities to be transferred to the Department, for them to be able to oversee its usage. In the current financial year the Department is focused on the development and maintenance of a sports facilities database grounded in a geographical information system that will inform a national facilities plan.

The database will be updated on an ongoing basis as more information becomes available, until its completion in 2013/14. On the other hand the Department has indicated that National Treasury will only be able to complete the process for the transfer of the 15% MIG fund in the next financial year, with the possible time of implementation being 2015/16. This will give the Department the time to complete the HR plan, which should increase its capacity to handle this responsibility, the National Sport facilities plan and the setting up of the Geographic Information System.

6 Concluding comments on financial and service delivery performance

The implementation of the National Sport and Recreation Plan in the 2012/13 period had affected the achievement of the Departmental strategic goals. It will be important that the strategic plan of the Department is aligned to the National Sport and Recreation Plan, and that the targets are set in line with the strategic plan.

There is a growing need and concern for the Department to complete its organisational review and fill all the vacant posts, especially the senior management post, as a matter of priority. The implementation of the NSRP will require that the Department is fully capacitated to meet the demands.

The Department will continue its work of supporting federations. Compliance of the federations with the departmental funding grant framework is essential in order for the federations to qualify for the transfer. The implementation of the Transformation Scorecard  will assist the Department to monitor the pace of transformation within the federations. This tool will add more pressure on the federations to comply with the framework in order to receive funding.

The major programme of the Department, which receives over 77% of the departmental budget, remains the Mass Participation Programme. There is a need for the Department to ensure that their reporting mechanisms are accurate, so that it can reflect the correct numbers of active participants in sport and recreation. SRSA has to also ensure that the money that has been allocated is spent correctly for the purposes it was meant for.

The building of sport and recreation facilities still remains a fundamental challenge in addressing transformation and providing access to sporting opportunities. There is a need for the Department to complete the Geographic Information System which will give a database of all the national sport facilities and will enable the Department to identify areas of need in this regard.

7 Finance and Service delivery performance assessment

The AG reported that 46% of planned targets were not achieved during the year under review due to the fact that indicators and targets were not suitably developed during the strategic planning process. The decline in numbers of active participants and projects is a concern. The Department had managed to spend 98% (R1.05 billion) of its allocated funds (R1.07 billion), and achieved 54% of the planned targets. Whilst many programmes were withheld as a result of the implementation of the NSRP, there is a need to determine accurate targets in line with the requirements of the performance and service delivery agreements that have been established by the Department with the National Treasury.

The overall vacancy rate increased from 17% in the previous year to 28% (62 posts) in the current year because the budget is not in line with approved establishment. This increase of vacancies has been largely due to the moratorium that the Department put on filling vacancies until the organisational review process had been completed. Further staff turnover in the year under review exacerbated the problem.

The monitoring and evaluation tool for the Mass Participation Programme has to be revised in order to capture the accurate figures. The schools sport programme received more funding, the number of schools who participated in the schools sport league together with teachers trained has grown, and the Department intends to increase the number in the 2013/14 financial year.

The development of the Geographic Information Systems is a step in the right direction for the Department to have a full database of the national sport facilities. This will enable it to develop a comprehensive National Sport Facilities plan, which they intend to complete in the 2013/14 MTEF period. In the same vein there will be a bigger case to make regarding the 15% MIG fund allocation for building of sport and recreation facilities to be transferred to the Department in order to allow them to coordinate fully the roll-out function of building national sport and recreation infrastructure.

8 COMMITTEES Observations and response

8.1 Technical issues

There is a need for the Department to improve inter-governmental relations: The existing Memorandum of Understanding with the Department of Basic Education has not been properly implemented and further deliberations are needed in order for it to yield more positive results. The oversight conducted by the Committee in the Free State province has shown some positive outcomes of how best the Sports Department and the Department of Education can work together to make this model work. The Department of Education in the Free State has seconded its officials to assist in implementing the school sport programme.

There is a need to engage in talks with COGTA in relation to the use of the Municipal Infrastructure Grant in order to encourage them. Fifteen percent of the allocation of that grant is meant for building of sport and recreation facilities.

It is very important for the Department to take cognisance of the agreed goals in their annual performance plans, as the changes that they are implementing halfway in the year might have an impact on their achievements. The aligning of the plans with the NSRP is important, however, and must be in line with the programme as adopted at the beginning of the financial year.

8.2 Service delivery performance

The changes that were effected in this financial year as a result of the implementation of the National Sport and Recreation Plan resulted in the Department not fully achieving some of its goals. More schools took part in the school sport leagues than in the previous year, and more educators were trained in sport. The Department has contributed in this instance to the creation of 334 jobs.

8.3 Financial performance including funding proposals

The Department seems to be doing fairly well in using the resources allocated to it, however, the year under review had shown a decline in terms of the numbers of the active participants in sport whilst the budget was at the same time fully utilised.

There is a greater need to ensure that deserving federations are being supported financially and that the transformation scorecard is implemented and adhered to by those federations. All federations are expected to adhere to the established grant framework for them to comply with the requirement to be assisted with the funding. The nomination of the federation of the year allows the federation to receive an extra allocation of R10 million in that financial year, to enable it to deliver its programmes.

The reduction in the budget of the international liaison and events programme will need to be used efficiently and effectively as it has been reduced despite the increase in the number of bilateral and multinational agreements envisaged for the year.

The Committee will continue to support the Department in its endeavour with the National Treasury to find a solution in relation to the transfer of the 15% allocation of the MIG to be administered by the SRSA.

9 Summary of reporting requests

Reporting matter

Action required

Timeframe

Revision of the strategic plan goals and performance indicators

Briefing

Written Plan

April 2014

Transformation Performance Scorecard results

Written

April 2014

Filling of vacant posts

Written

At the next quarterly meeting

(January-March 2014)

Geographical Information System, The National Facilities Plan and the updated norms and standards

Briefing

Written report of National Facilities audit and plan

At the next quarterly meeting

(January-March 2014)

SRSA monitoring tool for usage of 3% allocated for sport councils

Briefing

At the next quarterly meeting

(January-March 2014)

Athlete support programme

Briefing

At the next quarterly meeting

(January-March 2014)

Action plan UN Sport for Development and Peace International Working Group (SDPIWG) and its budget

Briefing

At the next quarterly meeting

(January-March 2014)

Action plans to address findings by the AG in relation to SAIDS

Written report

April 2014

AFCON 2013

Briefing

Written report

At the next quarterly meeting

(January-March 2014)

10 Recommendations

Based on the analysis of the Department’s budget for the year under review (2012/13), the Committee recommends that the Minister for Sport and Recreation should ensure that:

§  The Department utilises its budget efficiently and effectively in line with the agreed annual performance plans to implement its programmes.

§  The department fills all the vacancies as contained in the establishment and are funded in order to improve its capacity to implement its programmes.

§  The Department revises its strategic goals in order to set clear, specific goals which have proper timelines and are realistic to their resource constraints.

§  The Department implements programmes as adopted in the Annual Performance Plan as they will be measured against the APP at the end of the financial year.

§  The monitoring tool of the Mass Participation Programme captures the accurate and relevant information of the number of participants.

§  Governance within the public entities under SRSA is strengthened to achieve good corporate governance in sport.

§  The Department ensures that the all amendments to the legislative framework of the entities are resolved in the current financial year.

11 Appreciation

The Committee was fairly satisfied with the service delivery performance of the Department with just a concern on the efficient usage of the resources to achieve the stated goals. The support of the internal audit service that SRSA has provided to Boxing SA produced positive results, where they received an unqualified audit report, and the entity should just build from this to improve further. SRSA has started with the implementation of the National Sport and Recreation Plan in the 2012/13 financial year and the goals for the plan will be a challenge to attain unless the 15 per cent of the MIG fund can be fully transferred and utilised for the building of sport and recreation facilities.

As we express our gratitude, we wish to acknowledge the contribution made by the Members of the Portfolio Committee of Sport and Recreation, support staff, SRSA and all its entities, National Federations including members of the public.

Report to be considered.

Documents

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