Department of Cultural Affairs and Sport, WC Cultural Commission, WC Language Committee & Heritage WC 2022/23 Annual Reports

Meeting report

[the first part of the meeting was closed to the public as the Committee held an in-camera session with the Auditor-General]

The second phase of the meeting was open to the public, allowing Committee members to ask questions and interact with the Western Cape Department of Cultural Affairs and Sport on its 2022/23 Annual Report and that of the Department’s entities.

2022/23 Annual Report of the Western Cape Department of Cultural Affairs and Sport

Opening Remarks by the Head of Department

Mr Guy Redman, Head of Department, Department of Cultural Affairs and Sport (DCAS), announced that the Department had maintained its unqualified audit status for the 11th consecutive year, overseeing three public entities: the Western Cape Language Committee, Western Cape Cultural Commission, and Heritage Western Cape. The Department appreciates the oversight provided by the Standing Committee, Audit Committee, citizens, assurance providers, internal audit, and the Auditor-General of South Africa (AGSA). The under-expenditure occurred mainly in food and services, employee compensation, and goods and services. The Department requested to roll the committed funds over to the 2023/24 financial year or submit them to the Provincial Treasury.

Discussions

Ms M Maseko (DA) inquired about an irregular expenditure of R15 million, which is currently under investigation. The Audit Committee mentioned scans, and she requested an unpacking of the expenditure to identify any loopholes. And who makes the determination for limited bidding?

Ms N Nkondlo (ANC) asked about the Department's limited financial and human capacities to provide adequate support to youth, and if there is a dedicated youth focal point in place to address this risk. She also asked about limited bids and the circumstances that would lead to limited bids. She also asked about the delays in COE caused by job devaluations of more than five years and the mechanisms in place to secure jobs. The Committee is aware of the law that allows Provincial Treasury to be used for bidding. What circumstances would lead to limited bids?

Ms BG Rutgers, Chief Financial Officer, responded that the irregular expenditure of R15.4 million was related to two digitisation scanners and a small amount for one-year maintenance. They were required to follow the procurement process of the State Information Technology Agency (SITA), which had already procured and tested the market. However, the Department was unaware it needed to approach SITA for procurement on its behalf.

Ms Rutgers stated that the internal procedure was above board, as it followed the procurement processes. However, it did contravene the SITA Act, which requires the Department to approach them if any of the equipment they require is not on the list. This incident highlights the need for proper procurement and compliance with procurement laws.

The Department must undergo a determination test, which is conducted by its internal control unit. It will consult with SITA to determine the extent to which the information should be included in its motivation. Once the test is completed, it must submit it to the Provincial Treasury for possible condemnation. All bases are to be covered and provide enough information for the Treasury to make its decision.

Ms Rutgers stated that supply chain legislation allows Heads of Departments (HoDs) to approve procurement, but it is not required unless it becomes impractical. For example, the National Department issues a transversal team in the sport space, following a competitive bidding process with provinces involved. They form part of the bid specifications, bid evaluation, and adjudication committees, and award service providers to different provinces. This has been happening for six years.

Limited bidding is only used when there is limited competition in the market, as competitive bidding would waste time. In such cases, the company would follow a multi-source approach, sourcing quotations from all service providers within the market. The normal procurement process would then be followed, and the successful service provider would be awarded.

In summary, the CFO stated that supply chain legislation allows HODs to approve procurement, but it is not required unless it becomes impractical.

Ms Jacqueline Boulle, Head: Youth and After School Programme Office, addressed the youth focal point in the Western Cape government, highlighting the importance of a transversal youth forum with representation from all 13 departments. The forum coordinates youth efforts across the province, with the coordination handled by the DCAS. Youth unemployment is a significant risk, and the transversal committee aims to improve its impact. The Provincial Treasury assisted in assessing major youth programmes to identify areas for improvement. DCAS has been awarded phase two of the National Youth Service programmes, focusing on getting young people active and building pathways into their economy and studies.

DCAS has also partnered with national and local government, donors, and the NGO sector to finance programmes. Core donors fund the ecosystem around supporting young people, such as career fairs, practice interviews, and conferences. The organisation has launched a national outcome financing mechanism, incentivising partners and NGOs to keep young people economically active. This helps build sustainability into the programme and ensures that young people return to their needs after exiting the programme.

Ms Maseko inquired about the Department's youth focal point and its staff complement, implementation strategy, and budget. The Department is the least funded among provincial departments, and the question was raised about the youthful focal point's budget. Concern was raised about the risk of raising funds through crowdfunding and other means, as the Department is currently the least funded. The focus was on understanding the Department's approach to youth initiatives.

Mr Redman said the DCAS is a youth-focused organisation that coordinates all youth programmes within the government to meet the established norms and standards. DCAS is responsible for the after-school office, and the Mass participation; Opportunity and access; Development and growth (MOD) programme, which falls under sport development. The Western Cape government's youth strategy, developed in 2013, is still in place, but a review process is underway to assess its effectiveness. The process involves testing all youth programmes against the youth norms and standards, providing reports to Departments to identify areas for improvement or to consider alternative programmes. The review process is expected to take place within the next decade.

Ms Boulle responded about the youth strategy, which national is revising and urging provinces to follow. The youth forum is driving this process, with a revised policy expected next year. The budget for youth is currently being prepared, but a small component is part of the Department's organogram. A substantial team is working on youth issues, funded through national grants, donor grants, and seconded staff. The team is mainly youth, with 83% of them and 72% of management being youth themselves. The team includes ten professional staff and several intern positions.

Difficulties were reported in attracting the right talent in the heritage space, with no successful applications or declined nominated candidates. Recently, four heritage officers resigned to take up more lucrative positions. A Specialist Heritage Officer position has been incorporated within the staff structure and four posts have been placed to address this. It also focuses on organisational culture and uses the Expanded Public Works Programme (EPWP) to train interns in the heritage space, who could eventually apply for posts and become heritage officers.

The Chairperson inquired about the new form of reporting introduced by the AG and the Audit Committee, which differs from how the AG reports on entities and the Department. He also inquired about the auditing process for initiations, which the Department also conducted. He noted that many municipalities have returned unspent funds, and the reason for this return is unknown. He also inquired about the heritage asset of a life-size replica of a caravel ship at the Mosselbay Museum, which Portuguese explorer Bartolomeu Diaz used almost 600 years ago. The Chairperson asked if the Midnight Storm case was over.

Ms Maseko discussed the Hidden Equestrian Federation and SWD Rugby Union Federation's failure to submit compliance documents, resulting in the remaining funds being used in September.

Mr Deon Burger, Head of Office, said between June and September, every federation can apply online for specific needs, such as development, administration, dramatisation, or major events. Funding workshops are conducted in August, either virtually or physically, to guide beneficiaries through the application process. The director for sport promotion, Mr TDTutu, also teaches beneficiaries how to apply for Lotto funding and has representatives in all six districts of the Western Cape. In January and February, a trilateral process is conducted, where the local sports council is invited to assess the beneficiary's financial statements and applications. Non-compliance with the Memorandum Of Agreement (MOA), such as not having an annual general meeting, is considered non-compliance. For example, if a beneficiary's financial statements exceed R50 000, they must undergo auditing. The Department engages with federations like SWD Rugby, and the Department continues to monitor these federations for development.

Regarding mitigating factors, regular meetings with all stakeholders are conducted to address mitigating actions. If the problems persist, they are addressed early. If no problem is resolved, they are transferred to a compliant federation in March. Regular communication is made throughout the year, and if necessary, they are contacted after a year or two. Assistance is provided to new employees or executives who may not understand the processes.

Ms Maseko inquired about the Department's allocation of funds for admissibility, specifically for netball. What metrics are attached to the allocation to assess readiness for municipalities to spend the funds?

Ms Nkondlo asked about the language committee's human resource support, specifically the lack of reliable measurement of members' salaries. She suggested that Departmental staff receive in-kind fees for their additional roles. She asked about the explanation for the lack of payments in 2023, as some were paid in the previous year and suggested conducting a work study to determine the time spent and extra time contributed to the committee and if this model is sustainable.

Mr Redman expressed concern about money being taken from municipality A and given to municipality B, stating that the end user is affected. This issue has been a concern for the past four years, and he believes that proactive measures should be taken to avoid such situations. He suggested that the Department should ensure that projects are ready for implementation before taking A to B, as raising expectations between communities can lead to unrest.

Mr Burger discussed the return of funds to municipalities, which is only done after two years. If a municipality cannot spend in year one, the Department will support a rollover application to the Treasury. If they fail to spend by year two, they must give back. The Department checks applications and financial statements, and only agrees to transfer funding if the CFO is satisfied. Most municipalities are in good positions and rarely do not fulfil contractual obligations. The Department has kept an Excel spreadsheet of all funding to municipalities since 2005, ensuring transparency. The Department has evaluated two case reports in 2015 and 2018 with the University of the Western Cape, which provided valuable insights. 

Mr Redman clarified that museums are about history and memory, not glorifying apartheid. They aim to tell stories and ensure people's lived experiences are not distorted. Museums are about objects, not art galleries. The language committee members listed on page 56 are not staff members but are appointed by the Minister through the Standing Committee. The costs associated with these members are those who were no longer part of the committee in the year under review in 2023.

Ms Rutgers discussed two notes: one dealing with actual member fees and the other under employee cost services in kind. The dedicated team supports the CFO with three public entities, ensuring accurate and reliable measurement of potential services in kind. However, some staff members cannot be accurately measured and are not included in the two notes. The differentiated approach derived value by reducing costs and affecting time over the first year. The value will likely increase over time. The audit of the initiation programme is done with internal auditors, who agree on an annual audit plan covering all service delivery areas, including initiation. The caravan issue is also discussed, and the accounting treatment of it as a heritage asset due to its significance.

Ms Rutgers highlighted the importance of a differentiated approach in ensuring accurate and reliable measurement of services in kind and the potential for increased value over time.

Mr Michael Janse van Rensburg, Director: Museums, Heritage and Geographical Names Service, explained that Midnight Storm Investments took Heritage Western Cape to court to develop a section of land, a declared provincial heritage site. They argued that the Provincial Heritage Authority sterilised their rights to develop the property. The High Court dismissed the case and they took leave of appeal. Midnight Storm now proposes to develop a section of land in the buffer zone of the provincial heritage site.

Ms Maseko asked about the impact of COVID-19 on the renovations of a museum in Mosselbay. The museum's innovations during the energy crisis were not fully utilised, leading to budget constraints and potential closure. She also asked about the rationale behind renovating without adding to the energy crisis. The museum is investing in tourism and auditing, which has seen fees decrease. This change is a result of a decrease in the budget allocated to auditing over the years, with fees being slightly lower this time. What are the reasons behind these changes?

Ms Rugters explained that increased audit fees would be influenced by the time spent on specific areas, such as PTOs, which require more time to provide evidence and audit additional evidence. This would impact time and cost, as the agent has to increase fees annually due to inflation. The value of the audited areas would be affected, but the value of the audited members would be higher. Additionally, additional time was spent on periods due to issues within library services. These were not in the CFO's control, but they were necessary to demonstrate to the ages that they could account for and provide evidence. The issue was resolved, but it ultimately affected time and costs.

The Diaz Museum is still undergoing renovations, with plans for solar and occupational health and safety renovations already in place. The museum has a business continuity plan, including generators for aquatic animals' life support systems in case of power cuts. The University of Hawaii (UH) has managed to provide resources to seven province-aided museums, which have installed solar or battery backup generation facilities. Business continuity plans are in place for potential blackouts. The Museums Ordinance and Audit were amended in 2020, replacing the Auditor General with professional accredited auditors, resulting in a cost savings for the museums. The amendment also replaced the requirement for province-administered museums with private credit companies.

Closing Remarks

The Chairperson stated that the name of the museum should be reconsidered because it is inappropriate to name a magnificent structure after a coloniser.

Finally, the Chairperson took the opportunity to thank the Minister, the HOD, and the rest of the Department and entity delegation. He expressed gratitude to the Auditor-General and the Audit Committee. He expressed gratitude to the Members of the Public Accounts Committee.

The meeting was adjourned.