Robben Island Museum on its Annual Report 2010/11

Meeting report

Robben Island Museum (RIM) presentation
Mr Sibongiseni Mkhize (Chief Executive Officer: Robben Island Museum) outlined the history of Robben Island Museum. Established in 1997, the Museum became a World Heritage Site in 1999. RIM had completed its first 5-year Integrated Conservation Management Plan (ICMP) in 2007 and was currently preparing to review and compile a new ICMP for 2012 – 2016. He also listed the Acts that govern RIM [see attached document].

Consisting of 13 Members, the RIM Council exercised strategic oversight in accordance with the Cultural Institutions Act and the Public Finance Management Act. The Museum had an Audit Committee that was appointed in 2009. The Museum appointed internal auditors in 2010. Additionally RIM obtained an unqualified Audit Report for the first time since the 2004/5 financial year.

Mr Mkhize emphasised that while RIM had received an unqualified Audit Report there were many issues that needed to be addressed. As such the new Council prioritised stability and containment of costs, put in place measures to effectively deal with negative media publicity and strengthened corporate governance by reviewing strategies, policies and contracts. The Council had also appointed a new Chief Executive Officer and Chief Financial Officer and had prepared the Museum for a visit by UNESCO’s World Heritage Committee. RIM employed 222 personnel and more that 90 employees were absorbed during the 2010/11 financial year.

Several challenges were also identified. Mr Mkhize stated that RIM had a long history of poor financial management and these trends needed to be reversed under the new management. In addition, there was no stable governance and executive leadership during 2008/09 and 2009/10. Staff expenditure had risen dramatically as a result of all the staff absorption that took place in 2010/11. The business model implemented by the previous management team was not designed for productivity. There was high reliance on government funding and ticket sales and the Museum had done little to seek out other avenues for funding in order to increase the Museum’s revenues. The core business of the Museum, which was heritage protection and promotion, had been ignored and required immediate attention. The Museum also created budgets that were not synchronised with the Museum’s strategy.

The Museum lacked adequately skilled professionals in the core delivery units, especially heritage protection. There was no organisational review or restructuring analysis completed since the establishment of the Museum. Resources were also allocated to areas that did not pertain to the Museum’s core mandate. There was inadequate protection of RIM’s intellectual property and lack of competent Built Environment and Facilities Maintenance Unit. Challenges in the working relationship with the Department of Public Works were also identified.

The 2010/11 was the first year for the new Council and Mr Mkhize expressed his pleasure at receiving an unqualified report in his first year. The financial management was outsourced to Price Waterhouse Coopers (PwC) until end of January 2011. However, he noted that there was no monitoring of performance against predetermined objectives and a weak control environment which was worsened by the absence of a supply chain management unit.

The CEO also produced his own report in which he identified challenges in regards to funding, performance reporting, maintenance of the island and compliance with conventions that govern World Heritage Sites. Performance reporting was given special attention and RIM management was working closely with Internal Auditors to address this challenge.

Mr Mkhize then highlighted RIM’s plans to address all the challenges. The Council and Management would review the strategic planning process, configuration of departments and allocation of resources to favour core service delivery units. The Council would also interrogate strategic objectives and performance reporting. He added that it was important to highlight Human Resources as a key strategic risk and embark on efforts to use available personnel to address the skills shortage. It was also important to set up Monitoring and Evaluation Unit in the Office of the CFO, to strengthen the Supply Chain Unit and revise delegation of authority in order to avoid a recurrence of irregular expenditure.

He said that a review of strategic priorities was required in order to realise the Museum’s potential to generate revenue. Another review of existing contracts, service level agreements with service providers and partners, such as the Department of Public Works, was also required. The Museum needed to engage National Treasury on establishment of Public-Private Partnerships on those functions which the Museum had no capacity to deliver.

RIM aimed to engage the Department of Arts and Culture on the establishment of a Project Management Unit to manage the heritage built environment and estates of the island. Moreover, it was important to engage the Museum’s trade union on organisational restructuring.

Finally RIM needed to prioritise the Visitor Management Plan (narrative, interpretation and diversification of tour options to enhance visitor experience) and stabilise ferry operations so as to address negative publicity and turn attention to RIM’s core business of heritage conservation / promotion.

Mr Mkhize then outlined the income and expenditure for the 2010 and 2011. RIM’s total expenditure was approximately R121 million with a deficit of R1.6 million in 2010/11 [see attached document].

Robben Island Museum had two main sources of income: Ticket Sales and Subsidy from Government. Ticket Sales revenue was increased by 35% from R 37 million in 2010 to just over R50million during the 2010/11 financial year. At the same time the operating expenditure increased by 38% for the period under consideration. This was mainly attributed to significant increases in expenditure incurred with regard to Boat Repairs, Boat Hire Expenditure and Compensation of Employees.

The unqualified Audit Report did contain Matters of Emphasis. There was an irregular expenditure of R 27.7 million, Restatement of Corresponding Figures which related to irregular expenditure that was proactively identified by new management, Material Losses that related to amounts written off in respect of books previously donated to Robben Island and irrecoverable debts with Department of Public Works due to the absence of a formal working arrangement. The Report also acknowledged the lack of inadequate systems of recording and reporting performance information. He outlined some of the measures put in place to correct those findings.

Mr Mkhize stated that supply chain management (SCM) practices had been improved and capacity was being progressively strengthened to ensure non recurrence of irregular expenditure. Finally, the executive leadership has since been appointed and capacity was being built to enable RIM to be responsive to the requirements of PFMA and Treasury Regulations as they related to performance information. The Internal Auditors had been co-opted to review and monitor performance information.

Discussion
Mr D Ntshiqela (COPE) applauded RIM on their unqualified report. He wanted to know what RIM was planning on doing when the current crop of tour guides retired. Since many of the tour guides were former prisoners he wanted to know once they all retired if there were going to be new tour guides trained who could tell the story of the island with similar zeal.

Ms F Mushwana (ANC) asked if the 222 employees included the 90 new hires that were made in 2010. She wanted more details on how the Museum was going to meet the challenges identified during the presentation. She asked why there was no monitoring and evaluation programmes and a way forward.

The Chairperson responded to Ms Mushwana’s questions that many of those had been covered during the presentation.

Dr A Lotriet (DA) asked if there was a timeline for completing all the plans stated during the presentation. She asked if there were any feasibility studies done on the proposed programmes. She wanted to know how the Museum was going to manage the overdrafts and deficits. Finally she wanted more details on the remuneration package for the CEO in 2010 of R730, 000, which was considered to be wasteful by the Auditor-General.

Ms P Duncan (DA) asked whether any of the Acts that affected the Museum were outdated and needed to be amended. She asked how many of the old Council Members were still present in the new Council. She asked what measures were being undertaken to repair all the negative media publicity. She wanted a report detailing the findings of the visit by UNESO Officials. Finally she asked whether the skill levels of the 90 new employees matched the positions that were granted to them.

Ms L Moss (ANC) wanted the Museum to provide a full staff structure. She asked if the Museum was providing the staff who were living on the island all the basic amenities and services. She asked the future marketing plans of the Museum and how the Museum was going to overcome the deficit. Finally she wanted more details on the Memorandum of Understanding with the Department of Public Works (DPW).

The Chairperson asked how far the Audit Committee was in assisting the Museum in correcting its financial irregularities. She stated that the Museum must work on improving its image in the media.

Mr Mkhize responded that the Museum was looking into developing capacity of those employees whose jobs descriptions were unclear or those who did not have all the required skills to perform their jobs. He stated that the Audit Committee was looking into all matters raised by the Auditor-General and the by the internal review committees.

He stated that all the contracts with suppliers used by the Museum were being reviewed in order to ensure that there were no irregularities in spending. He noted that in the past the Museum had signed contracts that were not favourable to the Museum and this resulted in large sums of unauthorised expenditure.

He responded that the 220 employees included the 90 that have been absorbed.

He stated that in the past the Museum had placed significant focus on services such as the ferries. However this had diverted valuable resources from the Museum’s core business of Heritage Protection and Promotion. The Museum was looking into outsourcing the ferry operations to save costs and to minimise the risks taken by the Museum itself. He had been in the position for one year and there have been many improvements in the services since then. He urged patience from the Committee as the CEO and the Council aimed to reverse the previous trend of the Museum.

He stated that a feasibility study was done the on the usage of ferries and it was discovered that the risk was too high for the Museum to continue maintaining the service. Therefore it was important to develop a joint partnership with a private consortium to manage the ferries.

He revealed that the Council was focusing more on stabilising the organisation and moving forward, but was still working on recovering some of the unpaid debts that were owed to the Museum under the previous management. The R700 000 spent on remuneration was done so on the previous CEO and the current CEO did not receive any portion of that money.

The Acts that guided the Museum could not be changed by the Museum but had to be done in Parliament.

He responded that there were no Members from the previous Council inserted in the new Council.

He emphasised that the Museum needed to fix many of its internal issues in order to gain back credibility in the media. Therefore, instead of hiring “spin doctors” the CEO had appointed high ranking managers to address the problems and deliver on sustainable solutions. The Museum needed support in financial management and called for the privatisation of shops, post offices and restaurants located on the island.

The UNESCO meeting took place in March 2011 and the Museum was still awaiting its reports.

Mr Mkhize stated that the Museum was preparing its Strategic Plan and would submit the plan in the first week of November 2011 to the Department of Arts and Culture outlining the vision and goals of the Museum. The plan would address issues of salary benchmarking in order to ensure that each employee received an appropriate salary according to position and skill level. The strategic plan would contain the marketing plans of the organisation.

He noted that the property on the Island was not being managed properly and there was ongoing talk with the DPW to ensure that the island’s infrastructure was being well maintained.

Mr Mphume Llale (Chief Financial Officer: Robben Island Museum) responded that from its operating activities, the Museum had positive cash flow. The challenge, however, was to put in place austerity measures such that the revenue would always exceed the expenditure. The main reasons for the loss in 2010/11 were mainly due to the write off at the end of the fiscal year and the absorption of the 90 employees. These expenditures were not likely to recur which meant that the Museum would be in a good financial position. He added that the Museum had entered into a settlement with the previous CEO which was the reason for the R700 000 remuneration package.

Mr Sibusiso Xaba (Director General: Department of Arts and Culture) stated that there had been cases in the past where the Department of Public Works was not able to carry out the assigned projects. Therefore, the DAC was looking into alternative means to ensuring the projects got completed.

Dr Lotriet wanted more feedback on the wasteful expenditure and unfunded mandates.

Mr Ntshiqela asked about the progress RIM had made on its review of policies and procedures.

Mr D Mavunda (ANC) asked to what degree RIM had approached other departments to assist in the management of the Island.

Ms Moss asked what measures were put in place to overcome failures from other departments in fulfilling their duties. She asked whether RIM was working with the Department of Agriculture on controlling poaching on the island.

Ms M Morutoa (ANC) asked to what degree were the needs of the disabled, especially the blind being met. She was concerned that the incorporation of audio-visual apparatus in the Museum tours would alienate the blind and the deaf.

The Chairperson again raised concerns about the lack of training being given to younger tour guides. She warned that replacing tour guides with audio visuals would harm the overall experience in the Museum.

Mr Mkhize stated that the Minister of Arts and Culture’s support of the Island in the past had helped boost the image of the Island and the Museum within the media.

He added that that the Museum too was concerned about the challenges faced by the disabled on their visit to the Museum. The Museum was working to develop programmes that would include all people with disabilities.

Mr Llale explained that the reported material losses were due to the devaluation of some of the assets that were purchases. For example, some of the books that were purchased were valued at less than what they were purchased for and this loss had to be written off.

Mr Richard Whiting (Senior Manager; Heritage: RIM) stated that RIM was working hard to control poaching but due to financial constraints it was not able to achieve all that it wanted in terms of preventing poaching. He added that currently all those who were blind that visited the island would get the complete audio experience; however he noted that there was no trained staff that could use sign language during the tour.

The Chairperson raised concerns that if the tour guides were to be replaced by audio visual apparatus the history of the Robben Island would be lost. This point was reiterated by other Members.

Mr Mkhize requested a Council Member to deliver a statement.

Ms Rashida Abdullah (RIM Council Member) stated that there have been many improvements made since the new Council and the new CEO had been appointed. However the Council understood that much more needed to be done and they would, with guidance from the Portfolio Committee and the DAC, continue to work on improving the performance of RIM.

The Chairperson stated that RIM should come back with a time frame that RIM required to fulfill its mandate.

Mr Mkhize accepted the Chairperson’s proposal.

The Chairperson noted that RIM would be invited again to provide the Committee with a progress report. The meeting was adjourned.