South African Roadies Association settlement agreement; Department of Arts and Culture on its 4 Quarter 2015/16 performance

Meeting report

Opening remarks: Farewell to staff member
The Chairperson began the meeting by expressing the Portfolio Committee’s gratitude towards a staff member, Mr Mxolisi Dlamuka, who was leaving the Committee to join government as a member of a political party. She highlighted important aspects of his work and thanked him for all his work with the Committee. Other parties also added their best wishes and thanks, and Mr Dlamuka gave a short address. He highlighted his impression that this Committee enjoyed a high level of professionality between Members, each of whom understood the responsibility this portfolio had to the country. He noted that he had been privileged to study transformation and to share the visions of leaders who had driven the transformation forward. He congratulated the Chairperson’s leadership and mentioned her ability to diversify the role of the Portfolio Committee.

South African Roadies Association (SARA) settlement Agreement: Department of Arts and Culture update
Mr Vusithemba Ndima, Acting Director General, Department of Arts and Culture, noted that the Department (or DAC) was still working closely with South African Roadies Association (SARA) and would provide assistance for the appointment of service providers for SARA’s project. Unfortunately, there had been a dispute between the two organisations as SARA was not happy with the approach, and had thought that DAC should be doing the work for SARA.

Ms Monica Newton, Deputy Director General, DAC, said that SARA did good work but the renovation project would not be done for SARA. The intention was to transfer funds to SARA and give recommendations of reliable organisations whom it could employ.

Discussion
The Chairperson asked what the agreement between SARA and the DAC had been.

The Department emphasised that it had been noted all along that support would be given to SARA for renovation project through the Infrastructure Developmental Unit (IDU). The DAC was not willing to list contracts on behalf SARA. Furthermore, DAC would empower SARA to appoint the labourers in order to have the project completed. DAC had consulted with legal officials who believed that this had been a good approach. The DAC had directed contracts similar to the one with SARA with other organisations funded by the Department, and it was not happy that this uncomfortable situation had now ensued.

The Chairperson asked whether providing support through IDU was in line with the agreement, and whether the approach taken was legally viable. The DAC had to consider all legal implications. She stressed that the work needed to be done and completed. She said putting R10million aside for work that was not being done, which then led to under-expenditure, was very serious as this money could have made a substantial difference had it been used elsewhere. Under expenditure was also a reflection of goals not met and poor performance.

Ms S Tsoleli (ANC) highlighted that the Portfolio Committee had heard from SARA and she wanted to know what the next step was in finding a resolution to the dispute between the two entities. She asked that the Portfolio Committee moves towards finding a conclusion and settling the dispute between the DAC and SARA. She asked how soon recommendations could be made, as the term had come to an end. She asked if an announcement could be made that in the meantime new information should be communicated through the Committee's office.

The Chairperson said that she had asked the Parliamentary Legal unit to go through the agreement to recommend a solution. The next meeting would be taking place on 25 May 2016.

Mr Ndima, Acting DG mentioned that the Department had been working with the legal unit and that this approach had been in line with the advice that the DAC had been given.

The Chairperson said that she would use the feedback given by the Parliamentary and departmental legal units.

Ms S Tsoleli agreed that it would be useful for the Committee to hear the legal opinion of the Department, and that it would also be useful to facilitate a meeting between the two legal units in the meantime.

The Chairperson agreed that the Department, SARA and the Portfolio Committee would have to work together to ensure proper service delivery. She emphasised that it was not about the different government organisations, but about working towards making artists live out their dreams. She reiterated that under expenditure was regarded as “a crime towards the country’s artists” whose dreams and aspirations were in the hands of the DAC and Committee. If the DAC failed to deliver it was essentially crushing those dreams and she urged it to learn from past experience.

4th Quarter 2015/16 Expenditure report: DAC briefing
Mr Ndima began the presentation by providing key highlights during the term. Noteworthy events included the South African Cultural Observation which was held in Sandton, Johannesburg on 19 February 2016. There had been a dialogue on building the nation and eradicating racism with the Minister of Arts and Culture.

The performance overview indicated that during the 2015-2016 financial year, 98% expenditure had taken place but only 67% of the goals were achieved for the fourth quarter. The Administrative programme had achieved 50% of its functions within the fourth quarter and 91% of the total administrative budget had been spent. Institutional governance had spent 65% of its budget and achieved 68% of its targets. Heritage promotion completed 62% and Art and Culture promotion and Development has completed 83% of its functions.

The Department also had 46% of women in Senior Management Services and had employed a total number of 2,5% people with disabilities. The target number of part-time job opportunities created across Mzansi Golden Economy (MGE) work streams was a low 8 501, compared to the target amount of 20 990. Five new libraries were built and 28 were upgraded.

He then highlighted the variances between amounts received and amounts spent (see attached presentation for full details under line items). The under expenditure had been due to outstanding amounts payable to funded institutions as well as outstanding invoices.

Discussion
The Chairperson commended Mr Ndima on a well-presented report. She asked what  the illustration on the comparative analysis had highlighted for the DAC if the Department had only met 67% of the fourth quarter targets. A significantly large amount of work was not being done and it was a cause for concern. She also highlighted that the percentage of achievement had also fallen from the previous year.

Ms V Mokgotsi (ANC) commended the DAC for putting together a report that was easily understandable. She mentioned that the report had improved, but under expenditure had remained a challenge. She said that all the programmes were under spending and felt that the leadership had to become a lot more involved. She believed that the DAC had to lead the Committee in the right direction to help solve the problem, by informing the Members of where the problems lay and what could be done to assist. Greater transparency from the DAC was needed in this regard.

She particularly highlighted the spending in Programme 2, at only around 65.2% of the allocated budget, which fell far short. She asked the DAC to explain what had happened. She said that the IDU had previously been a part of Programme 2 and so she wanted to know how effective the programme had been since it was made a separate establishment. She also asked which projects had been successful and which projects had failed during the fourth quarter. She asked whether permanent workers had been recruited to fill vacant positions.

She was not impressed with the on-going challenge to settle invoices on time. She asked for clarity on the funds to foreign government and international organisations. She also wanted to know why the household line item did not have a reason for under expenditure.

She also expressed her concern that the numbers of jobs provided fell far short of the target, at a creation of only 8 501 work opportunities across all Mzansi Golden Economy (MGE) work streams and cultural programmes.

Mr G Grootboom (DA) also highlighted the discrepancy that 96% of the budget had been spent during this financial year, yet the DAC only managed to achieve 67% of the goals set. This was worse than the previous year, as 98% expenditure had been reached during the fourth quarter, and a 71% target had been reached. He emphasised the discrepancies. He noted that workers were being paid however the job was not being done, with only two thirds of the targets having been achieved. This was a cause for concern. He asked where Art Bank would be located and wanted to why it was not operational. He also asked about the flags that were made. He asked how many jobs had been created and whether South Africans had been employed to manufacture the flags. He also requested the total cost per job created, as well as figures relating to the balance between the expenses, as well as the exact numbers of jobs created.

The Chairperson asked for a brief overview on the situation between the DAC and Pan South African Language Board (PanSALB). She asked what role the DAC played in ensuring that issues arising are brought forward in advance and are resolved accordingly. She asked if DAC had applied for a roll over from National Treasury.

Mr Ndima  mentioned that the performance analysis indicated that the DAC had performed less effectively than in the prior financial year, which indeed was a cause for concern. He reassured the Portfolio Committee that the work was happening behind the scenes. Progress was not registered according to the tables because the work was incomplete.

The Chairperson highlighted that targets needed to be realistic and that good leadership required well anticipated deadlines to be reached. She emphasised that the DAC should be setting goals with the intention of seeing them through to completion.

Mr Ndima agreed with the Chairperson. Details about the flags manufactured would be gathered and distributed to the Portfolio Committee. He also noted the need to send the calendar of events once it had been compiled and completed.

The Chairperson asked whether the flags were manufactured in South Africa as the intention was to support SA business.

Mr Ndima  also mentioned that the IDU was being built up; the DAC was aware that at present those people in place did not match the skills – such as for maintenance of infrastructure – that the Department needed. DAC was trying to construct contracts that would be suitable for the workers but also beneficial to the Department, by drawing in more skilled labourers. He clarified that the DAC was not paying out funds to foreign governments although it did subscribe to numerous international organisations.

Ms Matildah Mogotsi, Deputy Director General: Corporate Services, DAC, outlined the process for appointing the new Director General. The position had been advertised when the previous Director General resigned. The applications were not strong enough and so the post was advertised and closed on 4 March 2016. Five candidates were short listed and three appeared for the interviews but none of the three was considered suitable for the position. The position was now that the Minister would be head-hunting to try to find a suitable Director General.

Mr Makoto Matlala ,Chief Financial Officer, DAC, mentioned that even though the expenditure report indicated that R5 million was underspent, the actual compensation to employees would have cost R15 million had all vacancies been filled. He mentioned that  there were vacant positions that the DAC still could not afford to fill. He said that the interest was due to late payments. There had been invoices that were submitted late due to the disputes that had occurred. He reassured Members that the interest payment was separate from audit fees. He also said that the Department of Public Works was doing some work for the DAC, and an invoice was to be received at a later stage. He said that the budget appeared to be under spent because of the delays that took place while processing invoices as well as outstanding payments indicated by line items; payables and commitments. There was R95 million worth of outstanding commitments and R15 million worth of payables. Although it was not reflected in the cash flow, the money was accounted for and had a purpose. The MGE funding had reflected an amount of R3 million underspent, but this was due to the particular funding criteria. The amount would only be transferred once there had been satisfaction about compliance, and once all relevant documents were submitted.

Ms Newton mentioned that  the DAC would have to handle invoices in an effective manner to avoid under expenditure. She restated the challenges faced by delayed invoices. A new employment system had been employed to record the names, ID numbers and contracts of each employee and so the figures had only indicated those that had been registered.  She also highlighted that growth of employment opportunities, given South Africa’s economic state, would be a slow process and that it would be a challenge to reach the target. She said that the cost per job would be calculated and the correct figures would be sent to the Portfolio Committee. She mentioned that a rollover from National Treasury had been requested, but it was highly unlikely that it would be approved as no previous requests along these lines had ever been approved. The Department had requested legal advice on how to handle the situation with PanSALB. The DAC was wondering whether a new board could be elected while the dismissed Board was still engaged in the court challenge. That court case could take some time.

Ms Mogotsi was worried that the performance assessment on Programme 1 seemed to indicate that there was no development and wanted to know how DAC would ensure efficiency, if programmes related to the DAC oversight were not implemented accordingly.

Ms Tsoleli asked when the current board would move out of office and when the vacant positions would be filled. 

Mr Sakiwo Tyiso, Chief Director, DAC, described the attempts to fill the vacancies at the Performing Arts Council of Free State (PACOFS) as “a roller coaster ride”. The chairperson had resigned at the beginning of the year, and another council member had resigned just as that position was filled, about two weeks ago. A minimum of seven council members was required for the board to function, and so the DAC intended to appoint at least eight, to avoid the situation where the Board could not function if someone resigned or left. He also noted that the board of PanSALB had barely completed two years and still had another three in office.

The Chairperson asked whether the reasons for resignation at PACOFS had been looked into.

Ms S Tsoleli asked who the chairperson was, and who the deputy chairperson would be moving forward. Specific criteria for selecting board members was needed, as the high resignation rate could be due to a lack of understanding of the function of the arts and culture mandate.

Mr  Ndima said that there was a set criteria based on the needs within each vacancy. The requirements were communicated. Knowledge of the arts was not the only criterion as there were other functions that called for governance, finance, or legal skills for the institution as well. He said that the roles of board members and the executive committee needed to be clarified. He also mentioned that some executive members refused to be held accountable to the board. 

The Chairperson asked how board members were appointed.

Mr Ndima clarified that there was a list of reserved names, and suitable candidates would be sought based on the specific requirements. There was no actual advertising.

The Chairperson asked whether the people chosen to sit in as members of the board received orientation.

Mr Tyiso said that the board members who had joined the board half-way through the term had received a two day orientation, although this was not as extensive as for the board members who had been a part of the initial induction process. Incoming board members had been introduced at the previous meeting, but had not yet gone through their orientation. He noted the appointment of a particular advocate and noted that Ms Msimang was the new Chair.

The Chairperson asked whether there was an induction manual.

Mr Tyiso mentioned that there was an elaborate induction document with all the information required for incoming board members.

The Chairperson requested see the document that was handed over to new board members during the induction process. She also asked that the DAC provide the documents related to the process of induction for incoming board members. She asked the DAC whether the new members, as well as the administrative function, knew what their roles within PACOFS were.

The Chairperson then noted that PanSALB was a constitutional institution and that if the organisation were to collapse, there would be a lot to answer to.

She pleaded with DAC to make sure that payments were made on time and that tasks were completed. She requested the DAC to work with the institutions that received funding from the Department, and establish and maintain good relationships with them.

Ms Tsoleli said that the problem seemed to lie with management and that assistance from the Department would be required to rectify the challenges faced. She asked what exactly the problem was and why the decisions taken were not being implemented. Failure to implement decisions made was costing the government money. She asked exactly what the problem had been between DAC and PACOFS, and said that no progress would be possible if the underlying issues were not resolved. She strongly believed that problems came from management and felt that leaders were instilling a culture of unacceptable practices, and warned DAC that consequences would follow if the matters within PACOFS, as well as tensions between board members and management, were not addressed.

The Chairperson again wanted to remind the Department to guide its entities to follow legal protocols. She said that it was it was important for the Department to end the “arm’s length” approach and to extend support to funded entities by communicating the vision at large. The Department  should be giving clear guidance in meetings. Sometimes officials could ensure that board members were not trying to push personal agendas. She highlighted that when the term ended in three years, the money should have been used for correct purposes. Since the DAC spent around 80% of its funds on entities, a close relationship would need to be maintained between the Department and those entities.

Ms Tsoleli wanted to thank the DAC for the successful jazz festival.

Ms Tsoleli wanted to raise another issue; she felt that some of the Department's officials did not understand the purpose of, nor fully respect the Portfolio Committee.  Parliament was a high institution in the land and had to be respected as such. She pointed out that the Secretary of the Committee had been treated unfairly, and that every organisation had certain structures and protocols, which might include matters such as the Committee Secretary responding to invitations on behalf of Members, in which case she must be treated with full respect.

Mr Grootboom fully agreed. He wanted then to commend the dialogue on building the nation and eradicating racism, which he felt was a wonderful platform to address a nationwide problem. He felt that events such as those would be meaningful indicators of progress and a movement in the right direction. He requested that Members of the Portfolio Committee should be invited to such events, and he would like to know when they – and indeed other events on the calendar (which had previously been requested) would take place.

The Chairperson asked that invitations be sent well in advance in order to allow for a response.

Mr Ndima mentioned that he had now heard concerns from this and the Select Committee, and having been made aware of the matter, the DAC would certainly address the issues. The DAC was also looking into inviting partners along with Members as it had been an expressed concern as well.

The Chairperson urged the DAC to ensure that all in the plans would be completed during the financial year. The Committee would  support the DAC in bringing about radical transformation. She wanted to see more government funded theatres across all provinces. She said that the Portfolio Committee was waiting to see the ‘radical’ element of future plans.

The meeting was adjourned.