Department of Cultural Affairs & Sport Audit Outcomes & 2019/20 Annual Report

Public Accounts (SCOPA) (WCPP)

29 January 2021
Chairperson: Mr L Mvimbi (ANC)
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Meeting Summary

Video: Public Accounts Committee, 29 January 2021, 08:00

Western Cape Government 2019/20 Annual Reports

The Standing Committee on Public Accounts (SCOPA) was briefed by Auditor-General South Africa (AGSA) and the Western Cape Department of Cultural Affairs and Sport (DCAS) Audit Committee on the 2019/20 audits of DCAS; Heritage Western Cape; Western Cape Cultural Commission; Western Cape Language Committee. This briefing was closed to the public.

Only the discussion following the briefing was open to the public. During the discussion, Committee members asked about the delegation of heritage resource management to local authorities; remedial action on the irregular expenditure; apparent lack of compliance by Heritage Western Cape with BBBEE legislation; sexual harassment case; measures taken to mitigate identified risks; the accounting authority of the Western Cape Language Committee. They requested details on an ongoing land claim case; transfers and subsidies to municipalities; assets lost, damaged or stolen; and archival material on liberation and sports heroes.

Meeting report

The briefings by the Auditor-General South Africa (AGSA) and the Audit Committee of the Western Cape Department of Cultural Affairs and Sport (DCAS) on its 2019/20 audit outcomes was closed to the public. The discussion following the briefing was open to the public

Discussion
Mr Brent Walters, Head of Department, Western Cape Department of Cultural Affairs and Sport, noted that the Department had spent more than 98% of its budget in 2019/20 and had received its eighth consecutive clean audit. He welcomed the engagement with the Committee on Part C: Governance and Part E: Financial Statements of the 2019/20 Annual Report.

Questions on Part C: Governance
Ms A Bans (ANC) asked for the allegations and findings in the single case investigated by the Provincial Forensic Services (PFS) and what action had been taken. She asked what had caused the irregular expenditure and what if any remedial action had been taken. She asked if any heritage resources had been lost during 2019/20. What actions and what plans had been adopted including granting to local authorities the right to manage heritage resources? She asked DCAS to confirm that Heritage Western Cape (HWC) was not compliant with BBBEE legislation, as its Annual Report seemed to imply, and when it would become compliant. She asked for an update on the appointment of an accounting authority and fully representative committee by the Western Cape Language Committee (WCLC) as identified by WCLC as risks.

Ms L Maseko (DA) asked if cases of sexual harassment had been reported and if so, what had the outcome been? How did its policy deal with the African style of courtship known as ukushela, according to which a man was expected to persistently praise a woman in order to win her? She asked why HWC had not indicated a plan of action to reduce the possibility it might take ultra vires decisions, which it had identified as an emerging risk. Why had this been identified as a risk?

Mr M Kama (ANC) asked about HWC’s compliance with BBBEE legislation. He asked how the HWC Committees were constituted and how it ensured that its members did not have interests that conflicted with its mandate. He asked how the Western Cape Cultural Commission (WCCC) had been impacted by COVID-19 and what it planned to do to recover. He called for a consultative process to take place about key cultural events such as the summer initiation season, which had been cancelled due to COVID-19. How did the Department's entities such as WCCC ensure that meetings of the enterprise risk management and risk committee were attended, and what consequences were in place for non-attendance?

Ms R Windvogel (ANC) asked a question but her network connection was interrupted.

DCAS responses
Mr Walters replied that DCAS had a comprehensive sexual harassment policy as well as a sexual harassment office. He undertook to send information about these to the Committee. There had been one case reported in 2019/20 and the person was found not guilty.

Ms Colette Scheermeyer, HWC Acting CEO, explained that any building more than 60 years old fell under the general protection of the Heritage Resources Act. There were similar protections for archaeological and palaeontological sites as well has grave sites. This created such a vast number of heritage resources that it was not possible to keep a comprehensive database. This introduced an inherent risk of heritage resources being lost, although HWC was doing what it could to mitigate this. For example, it was looking at delegating the management of “Grade Three” heritage resources to local authorities. In particular, this process was going ahead for the City of Cape Town and Drakenstein municipalities. It had put together a guide for municipalities to apply to HWC to take on the management of their heritage resources. HWC maintained a database of lost heritage resources reported to it, assessed the damage to the resource and determined the action to follow.

Ms Scheermeyer replied that the HWC Committees were constituted through the Council, which determined the skills requirements of the various Committees. Committee members were often working or retired professionals in a relevant field and the council was cognisant of the need for diversity, as well as the need to find a balance between expertise and freedom from potential conflicts of interest. There was a code of conduct according to which members were required to recuse themselves if they had a conflict of interest in a particular matter. A legal advisor attended all Committee meetings.

Ms Jane Moleleki, DCAS Director: Arts, Culture and Language Services, replied that the WCLC and the WCCC had both moved all their meetings to a virtual platform in response to COVID-19. Their facilities had been used as quarantine and isolation sites during the initial lockdown in 2020. Thereafter these facilities had been deep cleaned, supplied with sanitary supplies and personal protective equipment and limited to 50% occupancy. The temperature and contact details of all visitors were recorded.

Ms Moleleki noted that the WCCC committee members were not full-time staff and might not have the skills to manage finance or risk, for example. DCAS therefore assisted the WCCC with administration to ensure compliance. In 2019 it had been established that the WCCC, as a juristic person, was the accounting authority and, in terms of the Public Finance Management Act, could not delegate accounting responsibility outside it.

The relevant information on the cancellation of the initiation season had been circulated amongst initiation schools. DCAS had prepared a roadmap for training initiation custodians on COVID-19 preventative measures, which had been included in the MEC’s recent statement on the ongoing prohibition of initiation.

Ms Brenda Rutgers, DCAS Chief Financial Officer, replied that the case investigated by the Provincial Forensic Services had involved allegations of theft, bribery and irregular procurement in the library services. The allegations had been investigated but not confirmed and the case was closed.

Ms Rutgers explained that the irregular expenditure had been the result of internal control deficiencies and there had been no fraud or malfeasance. She admitted that DCAS was not compliant with BBBEE legislation. The Provincial Treasury had championed the Preferential Procurement Policy but had experienced a number of challenges to its implementation. In the meantime, DCAS was giving effect to the requirements of the legislation through its accounting officer system.

Ms Scheermeyer replied that a schedule of meetings was circulated to HWC Committee members at the beginning of each term and reminders were sent out two weeks before each meeting. HWC mitigated the risk of taking ultra vires decisions through an induction process for members and the presence of a legal advisor at all Committee meetings to ensure the technical correctness of all decisions taken. In the rare instance of an ultra vires decision, the decision could be appealed within HWC or through the ministerial tribunal. The reason this possibility had been identified as an emerging risk was that there had been a transition to a new Committee and Council in November 2019

Mr Walters added that the identification of an emerging risk constituted a kind of early warning system and it did not mean that the risk would necessarily be realised.

Questions on Part E: Financial Statements
Ms Bans asked for details about ongoing land claim lawsuits in which DCAS was a defendant and in which HWC was involved. How much had been spent on these cases and what was the Department's interest in them? She asked if the transfers and subsidies to municipalities were used for maintenance of sports facilities, and if not, why not? What conditions were attached to transfers and subsidies and was there a possibility of increasing the amounts, especially in poor communities? What explanations had been given for underspending by various municipalities in previous years, and what mechanisms were in place to ensure funds were fully allocated? She asked if the Provincial Archives and Records Service held any archives worth mentioning on liberation heroes or sports legends and if so, what value was attached to them?

Mr Kama asked if assets stolen from various public libraries in 2020 had been recovered and if criminal cases had been opened for these thefts. What had been done to improve security? What were the movable tangible assets that were missing? What was the reason that a WCCC official had resigned. He asked DCAS for more detail on the nature of the doubtful debts.

Ms Windvogel asked about the damaged vehicles and what remedial action was taken against officials involved in these accidents. She asked about the four outstanding Procedure on Incapacity Leave and Ill-Health Retirement (PILIR) cases. Why had they not been finalised? She asked for an update on the DCAS request for condonation of irregular expenditure from previous year. What was the precise nature of the minor physical assets not found during the 2019/20 asset verification?

DCAS responses
Ms Scheermeyer explained that the land claim case had been brought by Midnight Storm Investments, which had argued that the formal declaration of the site as a heritage site infringed on its right to develop the site and should be seen as constructive expropriation. The Court ruled in favour of HWC in January 2020 but granted leave to appeal, the date of which had not yet been determined.

Ms Rutgers replied that the employee who had resigned was a bookkeeper who wanted to find a half-time job. The doubtful debts related to camps offered by the WCCC which were usually paid for in advance but sometimes incurred extra costs when the number of participants was greater than the number paid for. The WCCC intended to write these debts off in the next financial year if it was unable to recover them.

She explained that when asset verification was done, missing items were listed and investigated. This process had not been finalised in 2019/20 due to COVID-19, but historically, missing items were usually found during the investigation. These included book trolleys, scanners, monitors and similar items.

DCAS had received a revised irregular expenditure framework in April 2019, which required Provincial Treasury to take over the condonation of irregular expenditure from DCAS. However, Provincial Treasury had established the committee to look at irregular expenditure only six months ago, and DCAS was still waiting to hear back. The process followed by DCAS when a vehicle was damaged was to assess the situation and determine if the official should be held liable for the cost.

Dr Lyndon Bouah, DCAS Chief Director: Sport and Recreation, explained that transfers to sport and recreation federations and municipalities were handled on an application basis. DCAS assessed the applications submitted by federations and municipalities. He noted that DCAS did not pay for maintenance of municipal sports facilities, only upgrading and construction. Once a transfer or subsidy had been approved, a handover ceremony took place, after which regular reports to DCAS were required.

Ms Cecilia Sani, DCAS Library Service Director, replied that transfers to municipalities came from two main funds: 1. Transfers from the Municipal Replacement Fund were made to B3 municipalities for compensation of employees and everyday expenses, and 2. Conditional grant transfers were made to all municipalities for compensation of employees as well as infrastructure. The R4.4 million returned by the City of Cape Town was a conditional grant. None of the stolen library assets had been recovered. They had been replaced and security had been improved at the expense of the municipalities. The missing minor assets were mostly books. Losses were currently at around 1.2%, which was below the normal level of 5%.

Ms Nomaza Dingayo, DCAS Director: Provincial Archive Service, said that she did not have a list of liberation and sport heroes ready at hand but she would be able to provide some information to the Committee. The Provincial Archive Service had access to the national database and worked closely with the Mayibuye Centre at the University of the Western Cape, which had specific information on liberation heroes. The Archive Service was struggling to accept new archives due to lack of storage space. She explained that it had been decided that it was not possible to put a monetary value on archival heritage.

Mr Shaun Julie, DCAS Director: Strategic and Operational Management Support, said that the four outstanding PILIR cases were for employees who applied for temporary incapacity leave after their allowed sick leave had been used. The requests had been declined at first but had since been granted after grievance procedures had been instituted, and the cases were now finalised.

The Chairperson noted that no members of the public had indicated that they wished to address the Committee. He thanked DCAS for its work and excused the officials. He asked the Committee if it wished to take formal resolutions based on the foregoing briefings and discussion.

The remainder of the meeting was closed to the public.
 

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