Arts and Culture Department on its Quarter 2 performance

Meeting report

Chairperson's opening remarks: SA Roadies Association
The Chairperson said that the Committee had worked hard during the year, and often felt that the Department of Arts and Culture (DAC or the Department) was not facilitating its job. The Committee had been disappointed in the overspending at the South African Roadies Association (SARA), an issue that had, in her opinion, exposed the incapacity of the Department and forced the Committee to do the Department’s job. It was in fact the job of the Department as a public entity to take action, whereas the Committee had to oversee, monitor and evaluate the measures taken, but the Committee had had to step in. The Department had been warned about several issues, yet seemingly continued to ignore them, and the entity was falling apart because ultimately the Department was not reflecting on its flaws.

Ms Monica Newton, Acting Deputy Director General, Department of Arts and Culture, firstly addressed the issue of SARA and said that in light of the complexities, further discussion was needed. The management at the Department had been dealing with SARA according to its White Paper, and trying to find a common solution.

Mr T Makondo (ANC) said he was not surprised at the answer. He felt that the main problem with the current discussions was the lack of commitment, leadership and proactive steps on the part of the Department, even after several recommendations about SARA. Lack of leadership was evident from the absence of any intention to have the issue resolved.

Ms Tsoleli (ANC) asked the Department how it critically would evaluate its interaction with Freddy Nyathela, President of SARA, as it seems that there is no solution able to be negotiated with this individual in the short term.

The Chairperson said the Department needs to provide a plan of action whereby the Committee can monitor the Department. She repeated that the Department was making it very difficult for the Committee to do its job. The Department needed to take more responsibility,

Ms Newton said that mediation was being considered as a possibility and there were discussions with the Department and external agents. She hoped that an answer would be found in the next year, although she recognised why the Committee was unhappy.

Ms  S Tsoleli asked how the Department expected to engage with Mr Nyathela to solve the issue of SARA, as previous conversations had not gone well and he was not comfortable when the DAC representatives were present. She wondered if the DAC might appoint a new negotiator.

The Chairperson requested a detailed action plan from the Department with which the Committee could monitor  the achievement of goals, and be able to track the activity and accomplishments of the entity.  The lack of any agenda had created a dynamic in which the Department repeated excuses over and over. The relationship with SARA had been difficult from the outset and the DAC had taken the decision to enter into such a difficult relationship so that the Department must admit responsibility.

Ms Newton said negotiations were continuing. The DAC had a history of dealing with the matter and although unfortunately she was unable to provide a clear answer at the moment, given the state of negotiations, the DAC sincerely wished to conclude the negotiations on a positive note.

The Chairperson pointed out once again that the Committee wanted a plan of action with a definite time frame.


Mr T Makondo said that the Committee was therefore expecting a clear commitment  from the Department to fix this issue by a specific date, otherwise the matters would drag on into the next financial year.

Department of Arts and Culture on its 2nd quarter 2016 performance
Before the presentation started, the Chairperson reminded the DAC that the Committee had requested a list of companies who had contracted with the former Chief Financial Officer (CFO) of the Department.

Ms Newton apologised for the delay and said that the document would be ready by the end of that business day.

The Chairperson mentioned the cost of advertisement for the National Arts Council Board, and asked whether this advertisement had been placed only in the Sunday Independent and The New Age.

Ms Newton clarified  that  the selection criteria were based on the wide reach and popularity of the two papers.

Mr G Grootboom (DA) refuted that claim, saying that whilst The New Age was popular, that was not the case for The Sunday Independent, which was not widely available outside of the Gauteng Province.

Ms S Tsoleli added that the Department had lied about the amount  spent on the advertising. In the previous  meeting the Department mentioned a budget of R28 billion and the amount spent exceeded that figure substantially. For that amount the DAC could have delivered services elsewhere and not been corrupt.

Ms Newton said the selection of the newspapers was based on the readership figures. Normally, weekly publications were also used and it is possible that this may have appeared during the week also, although not mentioned in the list. She admitted that when providing non-official information  to the Committee about the cost of the media  strategy it might have given the impression that a lower amount would be needed.

The Chairperson  asked if the Department used the weekend publications as well.

Ms Newton clarified that the selection  criteria were based on audience  and region, according to the type of project  and its interest for the audience.

Mr Grootboom said the selection  criteria of newspapers  was non-inclusive, and left out provinces like the Eastern Cape and Northern Cape.

The  Chairperson  insisted that the communication strategy should always aim to reach  the biggest audience possible.

Ms Newton noted that the selection was also based on the national presence of the selected papers, given that the publicised  matters were those of the National  Assembly. She suggested that Ms Mogodi might have more information.

The Deputy Director General: Corporate Services, DAC, reinforced  the argument  of selection based on audience  and region.

The Chairperson reiterated that these newspapers were not available in the Eastern Cape and therefore that sector of the population had been excluded.

Second Quarter Performance Report

Ms Newton started by identifying all related abbreviations and stated that she would cover performance indicators and her colleague Mr Makoto Mathalo, CFO of the Department would cover financial matters.

She highlighted the new Legal Deposit Committee set up from 01 July 2016 - 30 June 2019, whose Vice-Chairperson is Prof Rocky MD Ralebipi-Simela, Chief Executive Officer, National Library of South Africa (NLSA). This committee will make sure that all documents are preserved and made accessible to the public and to future generations.

She listed some of the celebrations held by the Department, more specifically: Mandela Day on 18 July 2016; Women’s Day on 9 August 2016; and Heritage Day on 24 September 2016. The celebration and commemoration of significant national days are aimed at promoting inter-racial and intercultural gatherings that are central to social cohesion and nation building. As part of the Mandela Month Celebration, the Deputy Minister of Arts and Culture led a campaign to popularise the national symbols, and she emphasised their unifying role.  Symbols can be a statement of intent and a road map in which younger generations of any race can move South Africa forward.

The Department hosted the International Translation Day at the Burgers Park Hotel, Pretoria under the theme “Translation and Interpreting: Connecting Worlds”, to recognise the role of interpreters in bridging understanding among people. DAC held its Living Legends Legacy Programme at the school of the legendary trumpeter Dr Johnny Mekoa, at Cloverdeal, Benoni.   Dr Mekoa was joined by fellow legends including saxophonist Mr Barney Rachabane, trumpeter Stompie Manana and Bro Sonny from the Manhattan Brothers of Sophiatown.

Overall DAC achieved (as yet unaudited figures) 70% of its targets and did not achieve 30%.  Compared to the 1st quarter, the Department had improved its performance by 6%.

Ms Newton then elaborated on performance against key indicators. A comparison of targets and achievements was outlined (see attached presentation for details). DAC had achieved its sector-wide strategic planning process, with the planning session held on 10 to 11 August 2016, in order to develop a planning framework to guide sectoral planning. It held two Intergovernmental Forums, the TIC on 8 September 2016 and the MinMEC on 23 September 2016.

She also covered the areas where there had been under-performance. The Department could only achieve 94% of payments within 30 days. The DAC planned to submit a Revised White Paper for Cabinet approval, and although the first draft of that was received from the Reference Panel, and due to the need for on-going consultations the drafts were delayed. The DAC expected to include 5% people with disabilities in its staff complement, but only 2.96% was achieved, mainly due to financial constraints.

In the area of institutional governance, she outlined the community conversations across the provinces, and summarised that the common message from participants was clear: stop violence, do not burn schools, and unite to root out violence, tribalism, nepotism and racism. She further summarised the reports produced (see attached presentation), the  workshop with representatives from DAC, associated institutions and Provincial Arts and Culture Departments, to prepare inputs from the sector for the Country Report on the International Covenant on Economic, Social and Cultural Rights (ICESCR). It also hosted a Youth Development programme with Department of Correctional Services, at Mangaung Juvenile Centre. The Youth Dialogue in partnership with University of Limpopo students was not held, due to #FeesMustFall unrest on campus.   Two dialogues will be held in the third quarter. The Department planned to host three provincial multi-stakeholder consultations on race, racism and social cohesion, as a build-up to the national convention. Two Ministerial sector consultations  - (i) Private Sector and (ii) Media, Academia and Intelligentsia - were postponed. Councils for public entities were fully constituted, and the PanSALB Board had not been appointed due to a legal challenge by the dissolved board. The NAC Council was dissolved and the process of reappointing board members was under way. She listed the different flagship events and the regions in which they occurred, and she noted that the amount spent on each flagship was listed on the slide.

She further reported on the target of community arts centres initiated, maintained and upgraded and said Phase 2 of a project plan in Polokwane was implemented. A feasibility study was completed and sent to the project committee for discussion. The nine Living Legends Master classes that was supported had been successful and received a lot of positive feedback from participants.

Four terminologies were successfully developed in four domains, as described (see attached presentation for details). Ten touring venture projects were supported, locally and internationally. 100% of the documents accepted by the National Language Survey - 216 documents - were translated to South African official languages and fine languages. 
 
The target of 340 artists placed in schools was not reached partially because the Department was still trying to catch up from the last quarter. Eight Memorandums of Understanding (MoUs) were signed which would ensure that the artists can be placed in schools. The time-cycles needed to be changes, so the artists would start in January instead of the beginning of the school cycle. The seven public projects targeted for support were not supported, because their proposals were not received in time. Roadshows were done, with a special focus on attracting public art proposals, but this was one of the less subscribed areas. Several approvals have been processed for the third quarter. Approvals were granted to support 21 refurbishment programmes, but these were not yet verified because compliance documents were submitted late, and five community art centre refurbishments were not achieved.

She then reported on the targets in the Heritage Preservation and Promotion programmes. A history programme was implemented in the Eastern Cape at KwaNdancama and the Mgobodzi library was built in Mpumalanga. The status of the new community libraries planned for the 2016/17 financial year was outlined (see attached presentation).
 
Ms Newton then moved on to reporting on areas of under-performance. She reported that the Governments Geographical Names plan was only published on 10 October 2016, so that the target of publication in this quarter was not achieved.  51 AU flags, out of the target of 200,  were installed but it was hoped to catch up. There were delays in appointing a service provider for the Liberation Heritage Route, but bids are currently being advertised. The target of distributing 30 000 hand-held flags was not reached.
 
The target of providing 6 430 schools with national symbol tool-kits was not achieved and deliveries were only made to three districts, with none yet in Eastern Cape.

Performance information was being subjected to scrutiny through internal audit verification exercises.

Financial summary
Mr Mathalo then presented the budget and expenditure. The budget for the Department was R4 billion and it spent R1.9 billion by the end of the second quarter, or 48%. He listed the breakdown of that 48%.
 
The Chairperson interrupted and asked for more detail and reasons for the expenditure.

Mr Mathalo said that the following slides would explain that. He continued that 48% was spent on the compensation of employees this, 2% less than expected due to the current vacancies of the Director General, two directors and the Director of Human Resources. The
50% Goods and Services target was not achieved with spending of 49% only, possibly due to invoices that have not been received from builders and suppliers, and outstanding commitments. 48% was transferred to provinces for the Library Conditional Grant Business Plan (see slide 41 for more details).

R661 million, or 52% of annual target, had been transferred to entities and perhaps libraries as at 30 September 2016. Other transfers were made to playhouses, museums and libraries, as well as the construction of legacy projects, for an amount of R121 million, with 46% of budget allocated to maintenance, upgrade and refurbishment. DAC also transferred R106 million to Non Profit Institutions (NPI), which were listed, but one transfer for the Voortrekker Monument was not processed due to the discussion ongoing with the Freedom Park. Around R17 million was allocated to financial assistance projects such as language bursaries, Human Language Technology (HLT) projects, and the funding of individuals through MGE Open calls. No transfers of capital were made for Incubators, upgrades of cultural precincts and community art centers.

The DAC also allocates amount for transfers for foreign governments and international organisations. R2 million was designated to the Commonwealth Foundation. R49 million was intended for acquisition of buildings and other fixed structures. There was under-spending in relation to the National Archives because of a dispute with the Department of Public Works, but roughly R232 million was expected for this project. R847 000 was spent on machinery and equipment.

Discussion
The Chairperson complained that the reports were not being presented line by line and some areas in the document were not touched on at all.

Ms Newton responded that the information in the presentation did not cover all targets, although all the targets were listed in the Annual Performance Plan (APP).

Ms Tsoleli asked what the spending norm is; she understood it should be 25% per quarter.
 
Mr M Rabotapi (DA) requested a breakdown of the Department's transfer for NPIs. He noted that the vacancy rate in the Department had been discussed about three months ago, when the Committee urged the Department to put a plan in place, and it was referred to the broader issues, not just the replacement Director General. He now asked what plan had been put in place? There were constant complaints about the unit that deals with entities, over at least the last three years, and he wanted to know what the plan was also to address this. He remarked on the vastly different figures for building of libraries that were essentially the same: R15 million in Limpopo and R24 million in Eastern Cape and asked how this could be standardised. He then addressed the Pan South African Language Board (PanSALB) and the National Arts Council boards, both of which were presently non-existent and asked what the status of these institutions was at the moment. He said he was aware that the CEO of the National Arts Council had absorbed the responsibilities of the board and wondered if the same happened at PanSALB. He wanted to hear from the Minister about the website, which had not improved.

Mr Grootboom thanked the presenters. He noted that a Northern Cape library had been closed for six months, which was a waste of money. He asked why the Minister's vehicle expenses were not included in this report. Some branches were on par with spending (around 46% to 52%) but others were overspending and therefore, whilst the reported spending of around 48% may look good on paper, if the separate units were analysed individually the picture was not so good. He thought that the word “incurred” was used incorrectly. He questioned the line item report on “car hire damages”, asked why this expense was included if the cars were insured, and that if the damages were from reckless use, then no consequence management was being applied to the individuals.

Ms Tsoleli noted that not all payments of invoices were taking place within 30 days and asked how the Department would deal with this. She wondered if the Department could do anything to avoid late payments, such as collection. She asked if there was a timeframe for the MSC Council.
 
Ms S Tsoleli, referring to page 16, payments within 30 days, she noted it was meant to be 100% but only 94% was achieved; she asked if the department had a way to deal with this difference. She noted that the report stated that a percentage was received after and questioned whether a contingency plan could be put in place by the department to avoid late payments, she proposed a collection. She then went on to ask if the department had a timeframe for the Council matters. She asked whether, on page 24, the MoUs were being reported by school, by individual artists or grouped in another way. She wondered why the hand-held flag distribution was reported as 50 in Limpopo and 0 in Free State. She asked if deliveries, as set out on slide 29, could not be done simultaneously to all provinces.

The Chairperson pointed out that the number of enterprises had not been reported, asked about the toolkits and questioned who the provincial coordinators are, and where they were based. She also wanted to follow up on Mr Rabotapi's question and wanted more clarity on who received the money in the NPIs. She suggested the need for better planning strategies, because she believed that lack of proper planning was responsible for the discrepancies.

Ms Newton responded to the questions pertaining to the National Arts Council and PanSALB. Section 49 of the Public Finance Management Act said that where there is no accounting authority in place, the CEO automatically absorbs the role of the accounting officer and the accounting authority. The Department was well aware of the risks of this. She explained that the legal structure in PanSALB made this a complex issue.

The Chairperson interrupted to ask if the fact that the Department was “aware of the risk” meant that it was taking that risk. PanSALB had fallen into difficulties when the CEO did take on the role of the accounting authority.

Ms Newton responded that the Department was not comfortable with taking the risk at PanSALB, but the difficulty was that the board was dissolved for lack of satisfactory leadership, creating a void that is still trying to be filled. The next board is suing the DAC. A new board will be appointed to the National Arts Council by December 2016. The DAC is ensuring that all the required steps are followed to prevent another dissolution. It was necessary to take on that risk because the whole organisation could not simply be closed down because it lacked a board. The legislation did allow for interim measures, but obviously the risk was perpetuated as long as the interim measures were in place. The CEOs of both PanSALB and the NAC are aware of the risk and are working closely with the Department to resolve it.

Ms Newton noted that the target of 40 enterprises supported in incubator projects was achieved and was reported in the APP, but did not form part of this presentation.
 
The Chairperson interrupted to give her opinion that if some information from the APP is not reported back to the Committee, then the report is incomplete; the two documents should mirror each other.

Ms Newton noted that request.

Ms Newton said that the Arts School programme works in nine provinces and is facilitated through community based organizations; the eight MoUs reported are entered into with the community arts organisations that facilitate the programmes on the Departments' behalf. 340 contracts are administered by the nine provincial coordinators.

The Chairperson asked for further elaboration on the community art based organisations, and Ms Newton said she would come back to that point.

Ms M Mogodi, Deputy Director General, DAC, referred to the compensation budget, saying that if it was spent in full this year the DAC would be short on budget in the next year, as the budget for 2016 was greater. The only position that the Department could actually afford to fill was that of the Director General. All contracts ending in March 2017 would not be renewed. This will only allow the Department to be able to save for the appointment of the Director-General, not to employ any new staff. The Department was trying to engage with National Treasury to get assistance to fill vacancies and was cutting down on overtime payments, and hoped to find a solution by the end of the financial year.

The Chairperson asked where the contract workers were currently placed.

Ms Tsoleli asked how the Department did not plan ahead for budget cuts and how it had decided upon the staff figures.

Mr in which areas these contract workers that are being referred to currently exist.
 
Ms Tsoleli asked if the department had no concern for the 8% they decided to transfer to the entity, thereby leaving it to 3 people, he also asked how the department did not prepare ahead for budget cuts.
 
Ms Mogodi said that the DAC was not able to anticipate the situation in which it found itself. The R80 billion budget cut announced for next year was introduced to the Department late in the year, and whilst the Department was still trying to deal with that, another cut of R2.5 billion was announced. There were 21 contract workers, who had been kept on after their internship two years ago, spread across the Department.

The Chairperson asked about the impact of their work and where exactly they were assigned. She referred to an irregularity in the Nelson Mandela Museum, where a one-year contract worker had been carrying on for over two years.

Ms Newton said that the budget cuts had been very difficult situation, particularly as they came towards the end of the year with very little warning. The impact, for the DAC, that this would have on the contract work had forced the DAC to re-think and re-organise its human capital and skills, to try to “do more with less”. New hiring was based now on absolute need and a very conservative approach was taken. It was very difficult to find the balance, with the contract workers, between flexibility and employability.

The Chairperson was critical that the Department was essentially allocating 80% of the budget for the work of five people and 20% for the other 80% of workers. She sensed that things were not well at the Department and it needed more monitoring and guidance.

Mr Mathalo said that the #FeesmustFall had a huge impact on the current budget, across all the Departments.

In relation to the question about cars, he said that the Department would determine in each case whether employees were liable to pay.

The Chairperson insisted that the Committee must be told what was happening on corrupt officials and asked how it was possible that the DAC did not know about the R78 000 loss.

Mr Mathalo assured the Committee that the Department would provide a detailed budget break down highlighting the inconsistencies. The DAC was assisting National Treasury to track invoices so that they could be paid on time. DAC was also working to verify banking details of suppliers and service providers. In relation to the query on the Minister's car he said that the cost of the two cars was not provided for in the Quarter 2 reports and only one was listed but the information would be presented differently in future.

The Chairperson told the Department that the Committee had been asking for exactly this level of financial detail for the last two years and Members were unable to address questions outside this room when they were not given the detail.

Mr Makondo made the point that the DAC clearly had the information as it was able to draw up this report. He believed that the Department knew very well how much had been transferred and to whom, and he wondered if information was being concealed.

Mr Mokoena noted the explanation as to why all issues that appeared in the APP were not carried over to the quarterly reports. He did not sense any real political will in the Department to achieve development. He had expected, for instance, to hear what work had been done to monitor and develop the sector. The Department seemed to be doing very well in traditional administrative matters, but he had the sense that plans were lacking. He questioned if the DAC even knew how many workers are active in the sector. He said that many of the entities and organizations linked to the DAC were not working and the DAC had not been addressing this issue.

Ms Phola Mabizela, Acting Deputy Director General: Heritage Promotion and Protection, DAC, responded on the question of the PanSALB, saying that the website was in the process of being migrated so that when users attempted to access the old website they were instead directed to a new platform. The library in Northern Cape had been damaged by heavy storms and was now being covered by the Department of Public Works, who had told the DAC that it could be re-opened shortly. In relation to the Voortrekker Monument, there had been discussions within the Department, which were also related to the Freedom Park intention to increase the hectares allocated to it, and further discussions about keeping the road open between the two monuments. The Memorandum of Understanding (MoU) between the two monument administrations must be revised and responsibilities reconsidered. Any plans would require an increased budget and the DAC was also awaiting feedback from National Treasury.

She said that the hand-held flags disparity in numbers could be explained by the fact that these flags were given out on National day events; some provinces might hold events whilst others did not. Distribution was done in conjunction with the Department of Basic Education (DBE) and the toolkits were assigned to Provincial governments.

Ms Tsoleli said the presenter should have been clearer and specify the period of distribution, and the fact that prior to this time, the Department of Basic Education or another entity continued to redistribute flags.

Ms Newton added that perhaps the Provincial Government in the Free State had its own flag distribution programme. School initiatives had benefitted schools in various provinces. She wanted to speak also to the question of correlation between APP and quarterly reports, and said that there is not just one indicator and target, so the coordination has focused on intergovernmental action, implementation and strategic planning for the Arts and Culture Portfolio at the national and provincial levels.

She noted that the DAC had developed coordinating structures to have oversight over Heritage, Development, Agency, Performance and others, and ultimately those that translate into CEO structures and Chairperson structures. Parallel to these structures, key needs within the Department had transformed into large coordinating structures, extending to Ministerial level and ministerial committees. Ultimately these structures would take into account whatever government does in answer to a sector's needs, on the basis of the White Paper.

The Chairperson warned the Department that its infrastructure programme needed to be reconsidered.

Ms V Mogotsi (ANC) said she still wanted to understand the issue of the Free State and its activity- including the flags previously mentioned. She asked why the Free State was included in the 2nd Quarter Report, if all initiatives related to the Free State had been concluded in the first quarter.

The Chairperson urged the Department to better prepare their answers before attending the meeting and stop “thinking on their feet”.

Mr Thulani Khumalo, Director:Monitoring and Evaluation, DAC, told Members that this presentation was a summary of the activity being carried out by the Department and asked if they would prefer a more detailed presentation following a line by line approach.

Ms Mogotsi expressed  her surprise and did not think that it was appropriate for him to ask this. Whatever was included in the Annual Performance Plan of the DAC had to be reported upon, each quarter, without Members having to ask for that information. Indicators had to be made clearly available for each quarter. She asked that the DAC should be more specific when referring to the quarters individually.

Mr Mokoena said that this presentation is a “snapshot”, and needs to be further explained to help the Committee understand what has been done.

Ms Tsoleli reminded other Members that they staff were new in their posts and instead of criticising, questions could be phrased in a manner that would help him come up with ideas to improve future performance.

Ms Newton said the DAC will revise the documents provided, with the coordinator, and thanked Members for their input.

The Chairperson stressed that the DAC must ensure that the reports are adequate and complete, pointing out that they are also accessible to the public, and in addition Members would be asked to explain what was set out in them.

The Chairperson asked about the status of the Performing Arts Council Free State (Pacofs).

Ms Newton responded that movements within the board had made this complicated but in essence there were labour related issues.

Ms Tsoleli said that high level officials had to visit and observe the status of organisations like Pacofs, as sometimes nothing could be done, no matter what appointments were made, because of the overall state of the entity. Some were even closing their doors to the public, because some officials did not want certain views expressed.

Mr Mokoena said that Pacofs is highly politicised. Both the national and provincial officials need to get closer to the issue, and deal with their internal competition first.

The Chairperson reiterated that the DAC is not doing its job properly, and that the Committee is  tasked only with an overview of planning, and should not have to act on behalf of the Department. She reiterated that she was particularly concerned to receive more information on the Nelson Mandela Museum, as she was due to visit it.

Adoption of Minutes

The minutes of the 25th of October and of the 1st, 8th and 15th of November were approved  and adopted, with some minor grammatical amendments.

The meeting was adjourned.