The Budgetary Review
and Recommendation Report of the Portfolio Committee on Sport and Recreation, on the performance of the
Department of Sport and Recreation, Boxing South Africa and the South African
Institute for Drug-free Sport for the 2014/2015 financial year, dated 21 October 2014
The
Portfolio Committee on Sport and Recreation, having considered the performance
of the Department of Sport and Recreation, its entities and submission to
National Treasury for the medium term period of the Department, reports as
follows:
1.
Introduction
1.1 The
Role and Mandate of the Portfolio Committee is to:
·
Consider legislation referred to it
·
Exercise oversight over the Department of
Sport and Recreation and its statutory bodies, namely Boxing South Africa and South
African Institute for Drug-free Sport
·
Consider International Agreements referred to
it
·
Consider the Budget Vote of the Department of
Sport and Recreation
·
Facilitate public participation in its
processes
·
Consider all matters referred to it in terms
of legislation, the Rules of Parliament and resolutions of the House
In terms of the Constitution of the Republic of South
Africa, 1996, Portfolio Committees have a mandate to legislate, conduct
oversight over the Executive and facilitate public participation.
1.2 The role and mandate of the Department
The
Department of Sport and Recreation is the primary government institution
responsible for formulating and implementing policy on sport and recreation. It
reports to and advises the Minister who, in conjunction with Cabinet, takes
final responsibility for Government policy. The Department is headed by the
Director-General, who is responsible for ensuring that sport contributes
towards maximising access to sport and recreation and encouraging world-class
performance which strengthens social cohesion and nation-building.
1.3 Purpose of the BRR Report
The Money Bills Procedure and Related Matters Amendment Act, Act 9
of 2009, sets out the process that allows Parliament to make recommendations to
the Minister of Finance to amend the budget of a national department. In
October of each year portfolio committees must compile Budgetary Review and
Recommendation Reports (BRRRs) that assess service delivery performance given
available resources and evaluate the effective and efficient use and future
allocation of resources, and may make recommendations on future use of
resources. The BRRRs serve as source documents for the Standing/Select
Committees on Appropriations/Finance when they make recommendations to the
Houses of Parliament on the Medium-Term Budget Policy Statement (MTBPS). The
comprehensive review and analysis of the previous financial year’s performance,
as well as performance to date, form part of this process.
1.4 Method
For the period under
review, the Portfolio Committee on Sport and Recreation, in exercising its
oversight role, interacted with the Department of Sport and Recreation and
analysed its 2014-2019 Strategic Plan, the June 2014 State of the Nation (SONA)
address and the 2014/15 Estimates of National Expenditure.
To date the Portfolio
Committee has held meetings with SRSA, the South African Sport Confederation
and Olympic Committee (SASCOC), National Lottery, South African Football
Association (SAFA), Athletics South Africa (ASA), Boxing South Africa (BSA), Department
of Planning, Monitoring and Evaluation and the Local Organising Committee for
AFCON 2013 and CHAN 2014.
The Committee also
visited SAIDS offices, attended the national lottery Indaba, attended the
Workshop of SAIDS in the implementation of the WADA Codeand held its strategic
planning workshop.
2.
Overview of the key policy focus areas
2.1 Key Government
policy documents
The
BRR Report has been informed by such documents as the SONA 2014, in which it was indicated that, during the 2013/14
financial year, there was a need for all departments to align their strategic
plans with the National Development Plan.
As a result, the Committee, in its oversight function, needed to ensure that
the department’s strategic plans were aligned. The Medium Term Strategic Framework (2014-2019) is also a key policy
document that has been taken into consideration wherein Sport and Recreation
South Africa is responsible for delivering Outcome 12(b), which seeks to create
an empowered, fair and inclusive
citizenship.
South
African sport has been operating without any defined Sport System over many
years, and the Department has, since 2011, developed a National Sport and
Recreation Plan (NSRP), which is a roadmap of South African sport, the first of
its kind since 1994. The 2014-19
Strategic Plan that the Department has presented, has been taken into
consideration. The targets of the NSRP have also been included in the 2014/15 Annual Performance Plans that
the department has presented during the year. The NSRP has been implemented for
the first time in the 2013/14 financial year and will inform the projection and
targets of the department.
The Department is playing a leading rolein the
development and implementation of United Nations (UN) policies related to sport
for development and peace.
United Nations
Educational, Scientific and Cultural Organisation (UNESCO):Governments have accordingly drafted, pursuant to the WADA Code, an
International Convention under the auspices of UNESCO to allow formal
recognition of WADA and the Code. International
Anti-Doping Arrangement (IADA)has evolved into a unique and effective
organisation, committed to combating the practice of doping in sport. The IADA
has developed into aneffective partnership between governments and their
respective national anti-doping organisations (NADOs).
White Paper on Sport and
Recreation for the Republic of South Africa: The White Paperprovides the national policy direction (the “what”), and formed the basis
for the development of the Government’s first ever NSRP, (the “how”) nurturing
a vibrant sports system that encourages the growth and development of the
sports sector and the equitable delivery of sport to all to ensure that South
Africa is both an active and a winning nation
2.2
Outcome-based Approach
The following are the strategic outcome
oriented goals of the department over the medium term:
·
increase the perception of sport being recognised
by the South African population as contributing to nation building by 5%
in 2016
2.1.
Overview
of revised Strategic Plan and Annual Performance Plans
The 2014-15 Annual Performance Plan (APP) is the
operational tool that expresses the ideals of the 5-year Strategic Plan of the
department. This document aims to assist the Committee to ensure that the
departmental plans are an integral part of the NSRP to ensure that it attains
the objectives and goals as indicated in the 2014-2019 Strategic Plan. In the
main the APP provides the rationale expression of the five critical pillars of
the NSRP, which are: An active nation, a winning nation, an enabling environment,
transversal issues and sport as a tool. The 2014-15 APP was tabled with no
updates incorporated on the situational analysis of the performance delivery
and organisational environments. It is worth noting that there are no changes to the SRSA
legislative mandates as it is reflected in their 2014-2019 Strategic Plan.
However in the current financial year, 2014/15, there
were changes to the names of the programmes of the department.
These changes were effected as a result of the adoption and implementation of
the NSRP in the2014 Medium Term Expenditure Framework period, which sought to
integrate the strategic decisions. As a result, National Treasury has approved the
2014/15 budget structure as it is aligned to the legislative and the
NSRP-approved mandates. These changes have necessitated a strategic realignment
of programmes by the department. It is therefore important to note that the
changes have affected the historical review of programmes, due to the
incorporation of new programmes and movement of other programmes to the
directorates.
The committee has
analysed the 2014/15 APP and the 2014-2019 Strategic plan that the department
tabled based on how it intends to achieve the goals and what it has been doing
to improve on its performance. There are departmental flagship programmes to
increase the citizens access to sport and recreation activities includes Big
walk, National School Sport championship, Indigenous games and the National
Youth camp, will be rolled out for three years.
The
additional mandate of the South African Institute of Drug-free Sport (SAIDS)
has necessitated an increase in funding and this public entity during the
2014/15 financial year. Additional funding of R3.6 million has been secured for
SAIDS in the 2014/15 MTEF period, R4.2 million for 2015/16 and R5.5 million in
2016/17. This is to ensure that SAIDS is able to comply with WADA code. Nothing
has been added extra for Boxing SA, despite the request to get an extra
funding.
Table
1: SRSA 2014-15 budget per programme
|
Programme |
Audited
Average Expenditure |
Adjusted
Appropriation |
Medium
Term Expenditure Estimate |
||
|
R
million |
2010/11
to 2012/13 |
2013/14 |
2014/15 |
2015/16 |
|
|
Administration |
90.8 |
100.3 |
124.9 |
131.3 |
137.1 |
|
Active Nation |
500.8 |
539.5 |
592.3 |
615.2 |
642.5 |
|
Winning Nation |
45.5 |
292.5 |
228.8 |
91.3 |
96.1 |
|
Sport Support |
48.2 |
117.5 |
118.2 |
122.2 |
129.1 |
|
Infrastructure
Support |
7.2 |
4.3 |
9.3 |
10.4 |
11.0 |
|
2010 FIFA World Cup
Unit |
559.6 |
_ |
_ |
_ |
_ |
|
Total |
1,252.0 |
1,054.1 |
1,073.5 |
970.4 |
1,015.8 |
The total allocation of budget for the 2014-15 financial
year amounted to R970.4 million, down from R1 073.5 billion which was
appropriated during the 2013-14 financial year. This budget will rise to
R1 015.8 billion in the 2015/16 financial year, showing an increase of
R45.4 million or just 4.4%. This difference between the 2014/15 and 2013/14
financial years is a result of the additional R160.9 million for
hosting the African Nations Championship during the 2013/14 MTEF period. This budget does not yet reflect
the total approved costs of the NSRP which has been estimated to be R10
billion, if it were to be fully implemented. As such, whilst parliament has
approved the implementation of the National Sport and Recreation Plan, the NSRP
still remains largely an unfunded mandate.
The major part of the departmental budget allocation
was meant for the Active Nation programme. This programme attends to the
provincial transfers of the Division of Revenue Act (DORA) grant. During the
process of conducting its oversight function, the committee should engage with
the provinces to ensure that the funds are spent wisely for the purpose of
developing sport.
In its presentation
on the 2014-2019 Strategic plan, the department has highlighted its intention
to amend the legislation, this is indicated also in the 2014/15 APP, however it
should be noted that the current government legislative programme has not
indicated any legislation coming from the Department of Sport and Recreation
during this financial year. It will be important for the department to ensure
that it provides the committee with the full and accurate update of the
timeframes within which it intends to complete this process.
During the 2013/14
MTEF the department allocated extra R3.6 million to SAIDS to increase its
budget to R14 million up from the R13.1 million it was provided in 2012/13 MTEF
period. SAIDS also managed to receive an additional R18 million grant from the
National Lottery to enable it host both the WADA World Conference on Doping in
Sport, in Johannesburg in November 2013 and the International Conference on
Sport Law and Anti-doping for decision-makers in South Africa and Africa in the
same year.
Boxing SA has
continued to face some challenges which made it difficult to achieve most of
its objectives. These challenges ranged from the paralysis of the board, this
happened after resignations of board members and the passing of one member. The
suspension of the CEO also did not make things any easier. Whilst a CFO was
appointed during the course of the year, there was a slight improvement in the
ratios like net profit, current assets and return on assets, this largely due
to increases in revenue generation and decreases in expenditure.
3.
Overview
of key developments in the organisational and service delivery environments of
the Department for 2013/14 and 2014/15 MTEF cycle.
Strategic
Goal 1: Increase citizens’ access to sport and recreation activities annually by
5% by 2016
Table: Number of citizens with access to Sport and Recreation activities
|
|
2012/13 |
2013/14 |
2013/14 |
2014/15 |
||
|
|
Target |
Actual |
Target |
Actual |
Accumulate total |
Expected Outcome |
|
Citizens having access to sport and recreation activities |
42000 |
8 653 |
25000 |
25 038 |
61 694 |
27 000 |
The Committee’s
previous BRR report indicated that during the 2012/13 financial year the
department was not able to achieve its goal on increasing the number of sport
promotion projects; it declined from 28 008 participants in 2011-12 when
there was 42000 targeted for the year to 8 653 participants in 2012-13.
There was a 70% (19355) decline of participants who were being given access to
participate in Sport and Recreationactivities in the 2012/13 financial year.
The 2014-15 Annual Performance Plan indicates a target of 9150 participants in
the promotional campaigns. This means that the department is anticipating an
increase of about 500 participants during the 2014/15 MTEF period. With the
addition of programmes like Cycle for Life, the additional sporting codes in
the Golden Games and the additional recruitment of Ground-breakers for Love-life,
notwithstanding an increase in budget allocation from R592.3m in 2013-14 to
R615.2m in 2014-15, it should be expected that the number of participants
should increase far beyond the set standards.
The 2012-13 Annual
Report of SRSA indicated that 1 277 653 citizens gained access to
sport and recreation opportunities through the conditional grant to provinces. Whilst
the 2010-11 annual report indicated that the number of participants was 5.08
million, which was partly due to the 2010 FIFA World Cup mobilisation. It is
concerningthat there is a decline of participants in sport and recreation as
this implies ineffective execution of the transformation mandate of increasing
access and opportunities for all South Africans in Sport and Recreation.It is expected that the changes and
realignment of departmental programmes will provide a bigger pool of sport and
recreation participants.
Strategic
Goal 2:To oversee the transformation of the sport and recreation sector where
80% of the recognised National Federations should meet the transformation
targets by 2016
Table: National Federations assisted during 2012-16 MTEF period
|
|
2012/13 |
2013/14 |
2014/15 |
2015/16 |
||
|
|
Target |
Actual |
Target |
Actual |
Expected Outcome |
Expected outcome |
|
NFs meeting transformation targets |
60 |
68 |
60 |
68 |
60 |
60 |
Source: 2014/15 SRSA Annual Performance Plan
As per the latest available list provided by SASCOC
there isapproximately 76 affiliated federations. During the 2012/13 financial
year the department managed to assist 68 (89%) sporting federations which was an
increase from 54 (71%) that were assisted in 2011/12. The 2013/14 report shows
that the department managed to assist 68 National federations, indicating a
113% achievement from the target of 60 federations. During the 2014/15
financial year the department intends to assist 60 national federations. The
indicator for this goal stipulates that the measure of performance is a percentage
of these recognised federations that would have met the transformation targets;
the goal is to see 80% of the federation achieving the targets by 2019. It
should be noted that the number of the federations being assisted will reduce, this
will imply thatthe federations that will not be included in this year’s budget
will struggle to survive once again because there will beless budget and their
programmes may not grow.
The 2014 report of the Eminent Persons Group on Transformation
in Sport, has highlighted that transformation is not only limited to the quota
system but should be applied multi-dimensionallyto include: progress to peak
performance, changing demographic profiles, institutional governance, skills
and capability development, employment equity and preferential procurement. The
transformation scorecard for all federations is based on measuring these
dimensions and SASCOC will assist to monitor and evaluate the federation’s
performance in this regard.
Strategic Goal 3: To ensure that more athletes
achieve international success by 10% in 2016
Table: Athletes assisted by means of Scientific Support
|
|
2012/13 |
2013/14 |
2014/15 |
2015/16 |
|
Actual |
Actual |
Expected performance |
Expected performance |
|
|
Support to athletes assisted by means of
scientific support |
90 |
58 |
40 |
0 (Phase out) |
|
Ministerial Sport Bursary |
-
|
28 |
40 |
45 |
Source: 2014/15 SRSA Annual Performance Plan
The introduction of the Ministerial Sport Bursary
programme in the 2014/15 financial year is aimed at ensuring that athlete’s
career is given a multidimensional support and resources are channelled
strategically to provide the necessary scientific support through institutions
that have the infrastructure. The new programme managed to assist up to 28 athletes
during the 2013/14 financial year. The old programme of residential support was
ceased in December 2013. During the 2012/13 financial year 90 athletes from the
old programme were supported and in the 2014/15 financial year only 58 athletes
were still remaining in the athletes support programme.
The 2013/14 annual report indicates that 71
athletes were withdrawn from the programme after their contracts lapsed,
leaving only 58 athletes and coaches in the programme. The 2014/15 Annual Performance
Plan indicated that there were only 40 athletes who continue to be supported in
this programme. The new Ministerial Sport Bursary programme aims at providing
40 athletes with the support during the 2014/15 financial year. The budget for
the 2014/15 has been reduced to R91.3 million, from the R228.8 million that was
allocated in the 2013/14 year. The reduction comes as a result of there not
being any major event that would require additional funds.
There is a need to establish a baseline to
determine how many athletes have attained the international success. The
department will have to furnish the Portfolio Committee with the concrete plans
and provide clear targets of how the programme will unfold.
Strategic Goal 4: develop the enabling mechanisms
to support the delivery of sport and recreation established and sustainable by
2016
The intended outputs for the 2014/15 financial year, as established in
the 2014-2019 strategic plan are to establish the norms and standards for
facilities and to complete the national facility audit. SRSA has set a target
of completing an audit of facilities in all the 9 provinces during the 2014/15
financial year. The usage of the 15% of MIG funds intended for the building of
sport and recreation facilities in rural areas will be continued to be
monitored. However since the implementation of this agreement has been gazetted
in May 2011, little progress has been seen in this regard.
In the 2013/14 financial year the department continued with the audit of
facilities, although in the report is not clear how far the process is and how
many facilities have been audited in how many provinces. The Director General
reported that they have stopped to implement the Geographic Information System,
which was supposed to be completed by the end of last financial year due to the
huge financial burden it may have on the departmental budget. Alternative means
of conducting this data collection activity should be sought and the department
should prioritise this as a matter of urgency, as it has implications on the
National facilities plan and the NSRP.
The department has been engaging SALGA around the possibility of
transferring the ring-fenced grant from MIG to the budget of SRSA. Whilst the
2013/14 annual report indicates that progress had been made in this discussion,
a speedy resolution is needed. A thorough plan would be needed to ensure that
SRSA can properly monitor and has the capacity to administer the MIG
conditional grant. The plan is important in order to ensure that SRSA continues
providing support to the municipalities
with planning and implementation of the municipal sport and recreation
facilities and consequently monitoring of the municipalities’ performance and
compliance with conditions applicable to the sector.
Sport Trust plays a key role in the Ministerial
outreach programme of building facilities in rural areas. In the 2013/14 financial
year three facilities in Carolina, Tlagameng and Mabopane that were built
through this programme. During the term of the 4th parliament, the
Portfolio Committee, paid a visit to the facility in Carolina and was satisfied
with the status and type of the facility built.
The NSRP clearly states that 3% of the Mass
Participation and development conditional grant should be allocated to help the
provinces with the establishment of Provincial Sport Councils. The 2013/14
annual report indicates that this allocation was increased to 4% since the
provincial sports councils are at different levels of structuring, operation
and governance. Whilst this output has been left to SASCOC to monitor,
allocations to provinces should have a measure of how funds have been allocated
to sport councils. An effort should be
made to avoid delays in transferring funds to provinces.
Strategic Goal 5: Sport and Recreation used as a
strategic tool to contribute directly to all five government priorities and two
United Nations priorities by 2016.
The department has repackaged and expanded the Sport for Social Change
programme, which should catalyse change in the environment, HIV and AIDS a
programmes for sport against crime. These are goals that contribute to the Government
priorities of Goal 12(b) and the, which seeks build “an empowered, fair, and inclusive citizenship” and promote social
cohesion. The programmes that are meant to assist in this regard are
strategically linked to the other programmes of the department, these may
require the department to monitor any change or progress that take place over
time.
The 2014/15 APP indicates that the department will continue to lead the
country in playing a role in matters of global importance within UNESCO, UN
Sport for Peace and Development International Working Group (SDP IWG), IADA and
WADA. South Africa holds the chairmanship of the board of SDP IWG. It also holds the Secretariat of the African
Union Sport Council Sport Development Region Five. Strategic partnerships with
IBSA and BRICS, which will be strengthened through participation in joint
projects aimed for the preparation of 2014 and 2018 FIFA World Cups. For the
2014/15 financial year, the department has promised to cut down on cost of international
travel by reducing the number of delegates.
The South African contribution in the international sphere is notable in
the 2013/14 report and should be commended. It will also be important that the
Committee be briefed and provided with the country’s report on theseimportant international
forums. This will help the committee to conduct proper oversight of the
programmes that are implemented for these agreements in terms of the importance
and the benefits of these agreements.
Strategic Goal 6: Implement internal processes and
procedures to ensure that SRSA annually receives an unqualified audit report.
In
its previous year the Portfolio Committee raised a concern regarding the
findings of the Auditor General in the 2012/13 MTEF period and has been
engaging both the department and AG for progress regarding the implementation
of the intervention measures that were proposed. During the 2013/14 MTEF, the
Auditor General conducted an audit in two programmes, Sport Support Services and
Mass Participation, and could not raise any material findings about the
reliability and usefulness of the performance information. This is a huge
improvement from what had been happening in these two programmes in the 2011/12
and 2012/13 financial years. The Portfolio Committee would like to commend the
department on this achievement and emphasise the need for maintaining good
governance and clean audit, this will ensure that SRSA is in compliant with the
legislation.
SRSA received an unqualified audit report during the
2012/13 MTEF period and had set a plan to attend to the recommendations
contained in the AG management letter to address some of the key issues that
have been raised. The 2012/13 AG report had indicated that the department
is not consistent in complying with their predetermined objectives, where the
information received could not be measured and was not useful. In addition to
this the information received could not be found to be reliable since the
performance information on Sport Support Services and Mass Participation was
incorrect, due to management’s inability to develop standard operating
procedures for accurate recording of actual achievements. This indicator had
also received a qualified report from the AG in the 2011/12 MTEF period,
showing that the department had not done anything to improve the situation.
However the 2013/14 MTEF period has indicated that there is an improvement,
SRSA had improved on the management of performance information.
SAIDS
The introduction of the new WADA code, which will be
implemented at the beginning of 2015, will increase the activities and workload
of SAIDS. This will require that SAIDSassesses the possibilities of building a
small infrastructure that will support the new code requirements of processing
doping intelligence information. Implementing the code there will be an impact
on the organisational operations, which has necessitated the need to review the
job descriptions in order to develop this new organisational structure. The new
structure will be implemented in 2015.
Education is an important role that SAIDS plays and
during 2013/14 MTEF 16 education officers were appointed in 7 provinces, excluding
provinces like Mpumalanga and North West. This expansion of staff will have an
impact on the entity’s outreach programmes and there is a need for SAIDS to
review its current model on education and outreach, so that it can be effective
and efficient. In the 2013/14 financial yeara number of education seminars were
held including Regional Anti-doping, one training for doping control officers, a
total of 49 workshops held and 24 outreach programmes. These included an
international symposium on international sports law and anti-doping.
Boxing SA
Boxing
SA managed to hold a stakeholders Indaba in the last financial year with the
intention of reviewing the legislative mandate of Boxing and reorganising the
sustainable systems to improve the entity’s revenue, the broadcasting and the
welfare of Boxing SA licences amongst other things. A CFO was appointed to
improve and tighten the governance structure of Boxing SA. Some of the
strategic goals achieved include the provision of training for boxers in
partnership with CATHSETA. A total of 84 fights were staged across different
categories, 110 new boxers passed their sparring, thirteen (13) of which were
females and there were up to 906 licensees, 43 of which were females.
The
visit by one of greatest boxers, Floyd Mayweather to promote boxing programmes,
was one of the highlights of the year. South Africans continued to do well in
the international bounds, Hekkie Budler (Mini flyweight) and Simphiwe Vetyeka
(featherweight).
Boxing
SA continued to be marred by some governance challenges during the 2013/14 MTEF
period. The board became paralysed in November after one of the members passed
on and a replacement was not immediately appointed by the minister. However in
May 2014, during the 2014/15 MTEF the new board was appointed by the minister.
The Board had suspended CEO and appointed an acting CEO who is also currently
on suspension.
4.
Overview and assessment of financiaL AND SERVICE DELIVERY
performance
4.1.
Overview
of Vote allocation and spending (2010/11 - 2015/16)
Table: New Programmes for 2014/1
|
Programme |
Audited
Average Expenditure |
Adjusted
Appropriation |
Expenditure
Total Average (%) |
Medium
Term Expenditure Estimate |
||
|
R
million |
2010/11
to 2012/13 |
2013/14 |
2010/11
to 2013/14 |
2014/15 |
2015/16 |
|
|
Administration |
90.8 |
100.3 |
124.9 |
131.3 |
131.3 |
137.1 |
|
Active Nation |
500.8 |
539.5 |
592.3 |
615.2 |
615.2 |
642.5 |
|
Winning Nation |
45.5 |
292.5 |
228.8 |
91.3 |
91.3 |
96.1 |
|
Sport Support |
48.2 |
117.5 |
118.2 |
122.2 |
122.2 |
129.1 |
|
Infrastructure
Support |
7.2 |
4.3 |
9.3 |
10.4 |
10.4 |
11.0 |
|
2010 FIFA World Cup
Unit |
559.6 |
_ |
_ |
_ |
_ |
_ |
|
Total |
1,252.0 |
1,054.1 |
1,073.5 |
970.4 |
970.4 |
1 015.8 |
Source: ENE 2014
The total allocation of budget for the 2014-15
financial year amounted to R970.4 million, down from R1 073.5 million in
the 2013-14 financial year. Expenditure increased from R848.4 million in
2012/13 to R1.07 billion during the 2013/14 financial year due to the additional
allocation of R160.9 million over the MTEF period, of which R120 million was
allocated to the three host cities of the African Nations Championship (CHAN)
in January 2014. During the 2014/15 MTEF period the allocations will increase
by R3 million, and by R4.7 million in the 2015/16 MTEF period. This budget does not yet reflect the total approved costs of the NSRP
which has been estimated to be R10 billion, if it were to be fully implemented.
During the 2013/14 MTEF the main cost drivers were
Mass Participation Programme which accounted for R 573.2 million (53.4%) of the
actual expenditure and Sport Support Services R219.9 million (20.4%). Of the R
573.2 million of the Mass Participation Programme, R497.5 million (87%), is
transferred to provinces. Transfers to federations and other entities like
lovelife, Sport Trust, Boxing SA and SAIDS also accounted R160.3 million
(72.8%) of the actual expenditure of the Sport Support Services. In conducting
its oversight function, the committee will engage with the provinces to ensure
that the funds are spent wisely for the purpose of developing sport. Whilst the
federation should be closely monitored on the implementation of the grant
framework signed with the department across two tiers, guaranteed funding,
intended for administration and conditional funding, which is essentially meant
for addressing matters related to governance, transformation and
performance.
The 2014/15 Annual performance and the 2014-2019
Strategic Plan indicated that programmes have been renamed and other
sub-programmes shifted in order to align to the mandate of the NSRP. Notable
changes include name changes to the current structure, Programme 1 still
remains that of Administration, Programme 2 is now Active Nation, previously
Sport Support Services, Programme 3 is called Winning Nation, previously Mass
Participation, Programme 4, Sport Support previously International Liaison and
Events and Programme 5: Infrastructure Support, it was previously called Facilities
Coordination.
Changes effected include the following, Programme 1:
Administration consists of 6 sub-programmes down from 7 sub-programmes of the
old structure. Of note is the establishment of the offices of DDG: Corporate,
previously Chief Director; Corporate Services and DDG: Sport and Recreation
Service which was previously office of the COO. The strategic support
sub-programme has been separated to provide a separate executive support,
meaning the functions have been reduced and the Strategic Stakeholder
management function has been expanded.
Programme 2 changed the name to Active nation to meet
the needs of the NSRP and consists of 5 sub-programmes, up from 3 in the old
structure. The names of the sub-programmes also changed accordingly. New
sub-programmes include the Active Nation and the Provincial Sport Support and
Coordination.
The changes in Programme 3, Winning Nation, sees the
establishment of two new sub-programmes out of 4 that it has. These new
sub-programmes are Winning nation and Recognition system.
Under Programme 4: Sport Support consists of 3
sub-programmes down from 5 which were in the previous structure. This programme
hadits name changed and the functions were expanded especially under the sub-programme
of Sport and Recreation services to include Transformation, Sport
Administration Support House, financial resources, Sport and the environment,
Domestic competitions, International competitions, Geopolitical Sport
boundaries, Sport councils and Athletes and technical officiating support
amongst other service. One important change is the fact that Club development
will no longer be a sub-programme but will move to part of programme 2.
The notable changes in Programme 5: Infrastructure
Support, include the establishment of the 3 sub-programmes, up from 2 due to
the introduction of the new sub-programme called Infrastructure support. Its
mandate will also expand to meet the needs of the NSRP. The department has to ensure
that the MIG will be managed under the sub-programme of Sport and Recreation
Facility Management.
It is important to also note that the in the 2014/15
Annual Performance Plan of the department, themajor part of its budget, R615.5
million (63%) allocation has beenallocated to the Active Nation Programme. A
total of R698.8 million (72%) will be transferred to provinces, the entities,
and non-profit institutions.Only R269.5 million (27%) is meant for departmental
current payments and operations. The capital assets budget is R2.2 million
(0.2%), which is meant for office equipment and software and other intangible
assets. The trend will continue in the next financial year. This indicates that
there is no budget for the building of sport facilities or sport
infrastructure, an indication that SRSA does not have a mandate to build sport
infrastructure but should work closely with municipalities to influence and
coordinate the function of building facilities through the Municipal
Infrastructure Grant (MIG) and the Urban Settlement Development Grant (USDG).
In
the past the Department had an establishment of 206 funded posts. However as a
result of the newly established structure, there are currently 239 funded
posts. The number of filled posts decreased from 180 in 2008/09 to 171 in
2011/12 due to the closing of the 2010 FIFA World Cup unit in the 2010/11
financial year. At the end of 2013/14 MTEF period there were 162 filled posts
with 77 posts vacant, this includes the 17 newly added posts whilst 15 staff
members left the department in the same period. The Portfolio Committee has
always recommended that the vacant posts be filled as a matter of urgency in
the past three financial years, but there has not been much improvement in this
regard. A moratorium that the department put on filling the vacancies in
2012/13 due to the restructuring had been the reason posts were not filled and
internal training that was provided to staff for internal recruitment has not
yielded positive results. In 2013/14 MTEF posts were to be filled, however
there has been a deviation due to internal staff not meeting the requirements. Progress
should be shared on the Department’s intention to work towards a full staff
complement.
The
following table illustrates the budget allocation for 2013/14 and budget
estimates for 2014/15 and 2015/16, with further details per programme. The Department is
tasked with managing a total budget of R 1.063 billion. The following table
sets out the ratios of the programmes in relation to the total appropriated
funds for the Department.
PUBLIC ENTITIES
Table:
Expenditure trends of the public entities
|
Programme |
Audited
Average Expenditure |
Audited
expenditure |
Medium
Term Expenditure Estimate |
||
|
R
million |
2011/12
to 2012/13 |
2013/14 |
2014/15 |
2015/16 |
|
|
Boxing
SA |
10 112 |
6 897 |
6 552 |
7 945 |
|
|
South
African Institute for Drug Free Sport |
11 604 |
15 876 |
14 024 |
14 895 |
|
|
Total |
21 716 |
22 773 |
20 576 |
22 840 |
|
The
additional allocations were due to improved conditions of service for Boxing
South Africa and the South African Institute for Drug-free Sport, increased
operational costs for Boxing South Africa, internal audit functions, the debt
of Boxing South Africa, spending on consultants and preparation of athletes for
the Olympics and Paralympics (ENE 2013).
4.2 Financial performance 2013/14
Table: 2013/14 expenditure trends per
programme
|
Programme |
Audited
Outcome |
Expenditure
Total |
Adjusted
Appropriation |
Medium
Term Expenditure Estimate |
|
R
million |
2012/13 |
2013/14 |
2014/15 |
2015/16 |
|
Administration |
100.3 |
114.5 |
131.3 |
137.1 |
|
Sport and
Recreation Service Providers |
213.9 |
219.9 |
91.3 |
96.1 |
|
Mass Participation |
506.9 |
573.2 |
615.2 |
642.5 |
|
International
liaison and events |
229.6 |
160.6 |
122.2 |
129.1 |
|
Facilities
Coordination |
3.2 |
4.5 |
10.4 |
11.0 |
|
Total |
1,054.0 |
1,073.0 |
970.4 |
1 015.8 |
Programme 1:
Administration
The
expenditure under this programme grew from R100.3million in 2012/13 to R114.5
million in 2013/14 MTEF period. Expenditure on the compensation of employees
amounted to R56.2 million (49%) and the goods and services accounted for R57.1
million (49.8%). The adjusted appropriation was R62.1 million which went down
to R56.5 million after the virements were done. There was a virement of R5.6
million (9%) out of the compensation of employees (R56.2m), this is more than
the allowed threshold of 8% for virements. This meant that the corporate
service sub-programme had an excessive virements of up to R7 million (15%) of
its total expenditure out of the current payments. The virements for office
accommodation amounted to R2.4 million (12%) of the total expenditure on
accommodation.
The
variance occurred as a result of the vacant posts not filled and accommodation
costs that were not used due to delays to move to new premises. There was a
general increase in expenditure on compensation of employees from R53.3 million
in 2012/13 to R56.2 largely due to the filling of vacancies in senior
management posts such as Information Technology and Supply Chain Management, as
well as new posts that were created as a result of restructuring in the
Ministry.
The
2014/15 first quarter expenditure report indicates that the operational
expenditure was R22.7 million, which was largely on the compensation of
employees and goods and services. This expenditure has decreased by R12 million
(34.5%) when compared to the same period last, this has been so because of low
spending on goods and services.
Programme 2: Sport
Support Services
Expenditure under this programme grew from
R213.9 million in 2012/13 to R219.9 million in 2013/14 MTEF period. Key
sub-programmes include: Programme management, sport and recreation service
providers, club development, education and scientific support. The club
development model is being revised in line with National Sport and Recreation
Plan, as a result there was a virement of funds in the current payments of this
programme of about R1.9 million (90%). The department managed to spend 100% of
its allocated budget in this programme. During the year under review the
department managed to assist 68 National federations, up from 63 in 2012/13,who
complied with the minimum qualification requirements to receive funding.
Expenditure in the scientific support
sub-programme increased significantly in 2013/14 to support high performance
institutes to train athletes more intensively. A total amount of R4.9 million
was a virement into the scientific support sub-programme, increasing the total
expenditure to R51.5 million. Furthermore, a transfer to the South African
Sport Confederation and Olympic Committee was introduced in 2012/13 to support
high performance sport. In 2013/14 due to lack of cooperation from SASCOC, no
reports were received from SASCOC. The DG should provide the report regarding
the intervention to follow-up on this matter.
The roll-out of the new club development
system will continue in phases, of the two provinces currently being piloted,
the Mopani region in Limpopo showed more progress. A club smart-kit tool has
been developed.
A total of R160.3
million (73%) was spent on transfers to non-profit institutions (Federations)
within the sport
and recreation service providers sub-programme. A
closer observation of the expenditures to these non-profit institutions
indicates that SRSA transferred R36 million to
LOC CHAN 2014, R33.6 million to Lovelife, R 12.2 million to SASCOC and
R22.9 million to Sports Trust. At the
same time other federations received additional funds after adjustments were
done, these include an additional R3 million allocated to SAFA, R4.7 million was
added to SARU, R9.7 million to Sport Trust and R4.3 million to SASCOC.
Programme
3: Mass Participation
The
Mass Participation programme is the largest programme of the Department, with a
total expenditure of R573.2million in 2013/14 MTEF period, up from R506.9million
from 2012/13. This sub-programme promotes sustainable participation of people
who had been previously excluded, strengthening of school sport through the
training of coaches, developing school sport by monitoring service level
agreements with federations and the identification of talent. Key
sub-programmes include:
During the year under
review the department had planned to assist 4 000 schools participate in the
sport leagues, which would have increased from the 15 662 schools that
were assisted in 2012/13. However due to the lack of cooperation with CATHSETA
and SASCOC to provide school sport training, this target was never achieved.
The main cost drivers
of this programme, is the transfers to provinces, which amounted to R497.5
million (86.7%) in 2013/14 up from R469.6 million provided in 2012/13. There
was a roll-over amount of R18.1 million by four provinces, which was
transferred to them during 2013/14 financial. Three of those provinces went to
over spend, with Mpumalanga over spending by R53.6 million (120%) from the
R44.7 million that they received. The other province that over-spent was the
Eastern Cape, which spent R65.3 million (107%) from the R61.3 million they
received.
The budget of School
sport sub-programme increased significantly from R12.1 million in 2011/12 to
R42.6 million 2012/13, and this increase is in line with the increase in the
number of schools supported to participate in schools leagues
Mass
participation programme was the biggest beneficiary of the virement allocation,
receiving a total of R16.7 million largely from administration program (R10.2
million), Facilities coordination (R4.4 million) and International liaison and
events programmes (R3 million). It should be noted that the largest virement
came from facilities coordination R4.4 (47%), of the total allocation in this
programme. National Treasury can only allow 8% of virements within programmes.
Some of the service delivery performance in the Mass
Participation programme:
-
25038 people were provided with sport and
recreation opportunities
-
1100 people participated in the National
Indigenous Games
-
8000 people took part in the Big Walk
programme nationally
-
2500 Young people attended the Youth camp
-
8000 learners took part in the National
School Sport Championship
Programme 4:
International Liaison
This
programme manages international exchange programmes, supports travel
arrangements for sports people and encourages the staging of major sports
events and the promotion of sports tourism. Key sub-programmes include:
During
the 2013/14 MTEF period there was a R160.7 million (100 %) spending of the
budget allocated to the programme. The expenditure had been reduced from R229.6
million of 2012/13 MTEF period. About R156 million (97%) of the expense was
transferred to municipalities for hosting CHAN 2014 tournament. LOC CHAN spent
R36 million and R120 million was a direct transfer to the City of Cape Town
(R63 million), Mangaung (R28.5 million and Polokwane (R28.5 million).
Some of the service
delivery performance in the International liaison and Events programme:
- SRSA provided technical assistance to Lesotho regarding COSAFA U/20
Youth Championship
- Bilateral consultation were held with Jamaica and Bulgaria
- Implemented a bilateral agreement that was signed with Cuba for students
studying for a Physical Education degree in Cuba
- Supported 14 multilateral agreements
- Assisted Tennis SA to host 2013 Soweto Open
- Hosted the 4th WADA World conference on Anti-doping
- Hosted the 2014 CHAN
- Supported the launch of Kagiso Dikgacoi Foundation in London (UK)
Programme 5:
Facilities Coordination
This
programme was established to facilitate the provision and management of
sustainable sport and recreation facilities. To achieve this purpose National
Treasury had made an allocation of R4.87 million in the 2012/13 MTEF period and
this was increased to R9.2 million in 2013/14. The final appropriated statement
indicates that there was a virement amount of R4.4 million (47%) that was moved
out of the programme leaving a balance of R4.5 million that was spent in this
programme. This far exceeded the treasury threshold of 8%.
The
bulk of this allocation, R2.4 million, went to planning and advocacy
sub-programmes whilst the remainder of R1.9 million was allocated to the
technical support sub-programme. There is no indication of where the funds were
transferred to, however as indicated earlier the Mass participation programme
was the beneficiary of the virement funds from all the programmes. Up to R2
million (45.6%) of the expenditure in this programme went to the compensation
of employees and the other amount, R2.5 million (55.5%) on goods and services.
There
were delays experiences in the completion of the Sport for change programme. The
scope of the GIS changed, the Department has not completed developing the
database on Sport and Recreation facilities information due to the delay in the
approval of the classification framework.
PUBLIC
ENTITIES
South
African Institute for Drug-Free Sport.
The
Auditor-General has again provided an unqualified audit opinion with regard to
the South African Institute for Drug-free sport financial statements. This
shows a consistency of good financial performance by the entity. SAIDS budget
allocation increased slightly from R13.2 million allocated in 2012/13 to R14.7
million over the 2013/14 MTEF period. The allocation has been increased to
R14.8 million in 2014/15 MTEF period.
In
the financial year under review, the budget of the agency increased substantially
due to the R18 million grant that was received from the National Lotteries
Board.
The
Auditor General has again made an emphasis on the lack of evidence regarding
the procurement of goods and services below R500 000 without obtaining the
required price quotation. There is still lack of consideration of the PFMA when
it comes to taking effective steps to prevent irregular spending in the entity.
As a result there was an over expenditure of R182 000, although this is
still better than the over-expenditure of R1.4 million incurred during the
2012/13 financial year. Whilst the statement on financial performance indicates
clearly the revenue and expenses incurred, the explanatory notes on the
deficit, do not show the revenue received from the National Lotteries Board,
which could have had an impact on the deficit. It is accounted for separately
though under revenue received.
Administrative
programme expenses increased by 17% from R5.2 million in 2012/13 to R6.1
million in 2013/14, this was largely due to payroll cost of R2.8 million (46%)
which increased from R2.3 million in 2012/13. There was a decline in expenses
of the Education programme, from R2.1 million in 2012/13 to R1.7 million in
2013/14. There objectives were delivered with less resources in this programme
thus resulting in efficient use of resources.
The
international projects costs increased substantially from R321 000 in
2012/13 to R14 million in 2013/14 due to hosting the 4th WADA World conference on Anti-doping. The Corporate services expenses also
increased substantially from R689 000 in 2012/13 to R1.2 million in
2013/14 due to increased board activities and the hosting of the Sport law
Conference and the increased spending in travelling and accommodation, from
R91 000 in 2012/13 to R209 000 in 2013/14.
Doping control programme has a 12% increase in
spending, from R8.2 million of 2012/13 to R9.2 million in 2013/14. This
increase was largely due to the increased activity especially the high costs of
blood testing. Another reason for the increase was due to travelling,
accommodation and the reimbursement of the newly recruited DCO, which increased
from R2.1 million in 2012/13 to R3.1 million in 2013/14. The courier costs
increased by 26% from R690 000 in 2012/13 to R870 000 in 2013/14.
The
entity is technically insolvent based on their current assets and current
liabilities, the ratio is at 0.68, meaning that it may be difficult for the
entity to pay short-term liabilities, particularly if there
could be a significant delay in converting inventory into cash. The current
inventory amounts to R395 000, which is also insignificant to make up for
the potential insolvency.
The
committee would like to emphasise the need to adhere to supply chain management
procedures in order to curb irregular expenditure. This is in line with the
matters raised by the AG, as a result SAIDS will have to develop and implement
policies and plans to address this irregular expenditure.
Boxing South Africa
In the last financial year the AG had given
Boxing SA an unqualified audit opinion. The situation regressed during the
2013/14 financial year, where the AGSA could not express an opinion regarding
the entities compliance with legislation and internal control. The AGSA also
found that there were significant misstatements on material targets and these
could not be reliable when compared to the supporting information and
documentation. As a result there were no material findings raised on the
usefulness and reliability of the reported performance information for
Programme 3, Marketing, Branding, Communication and Events co-ordination.
Boxing SA had been allocated R9.1 million in
the 2013/14 MTEF period and this was increased to R10.1 million in 2014/15 MTEF.
There three programmes that the entity manages, it programme 1 governance and
administration with three sub-programmes, Programme 2; Compliance and
Enforcement with three sub-programmes and Programme 3, Marketing, Branding,
Communication and Events co-ordination comprising also of three sub-programmes.
As indicated earlier Programme 1 had challenges of board meeting due to
resignations and the death of a member, the board could not quorate. However during
the 2013/14 MTEF period the entity incurred an over expenditure of R7.9 million
from the budget of R6.9 million largely due to legal fees. The salary bill
accounted for R3.77 million (47.7%) of the total expenditure in this programme.
There was also an over expenditure of R2.3
million in Programme 2 from the budget of R2.1 million that had been allocated,
this was largely due to the training and skills development provided to 39
boxers, 4 less than the planned target. The initial budget allocated for this
line item was R12 000 but went up to R271 000 for a target of 43
boxers. It is clear that management did not adequately budget for this activity
resulting in this over-expenditure. Programme 3 was never budgeted for and
hence no activity took place in this programme. The entity still faces
litigation, which has been identified as a contingent liability in the current
year.
Table on irregular expenditure on
Boxing South Africa
|
Entity |
2011/12 |
2012/13 |
Total Accumulated 2012/13 |
2013/14 |
|
Boxing SA |
714 944 |
101 767 |
1 537 019 |
924 312 |
Source: Boxing SA Annual report 2013/14
The
Auditor General established that Boxing SA had irregularly spent R924 212
during the year under review due to their failure to comply with supply chain
management regulations. The entity has reversed the gains made during the
2012/13 where they were able to reduce irregular expenditure from R714 944
in 2011/12 toR101 767 in 2012/13. The accumulated irregular expenditure
wasR1.53 million at the end of 2012/13 financial year
4.3 MTEF 2014/15 Allocations
National
Treasury has indicated that the country’s current fiscal position does not
allow any room by making additional funding available, however there still has
to be progress towards creating an inclusive economic growth and job creation
amid the tough fiscal environment. This will require new priorities and an
expansion of existing programmes through reprioritisation within the existing
budget. As a result of this, there are difficult choices that have to be made
in choosing between spending priorities and in deciding on the sequence of
programme implementation. Due to the budgetary constraints, departments are
required to efficiently manage the costs pressures related to changes in the
inflation rate, exchange rate or any other factors affecting input prices.
During
the 2012/13 financial year expenditure spending focus over the MTEF period was
expected to continue promoting mass participation, mainly through the mass
sport and recreation participation grant, and on the development of sport at
various levels by supporting school sport, club development and sport
federations, including hubs. Whilst the overall expenditure has been on the
decline between 2010/11 and 2013/14, following the completion of the 2010 FIFA
World Cup projects, it is expected to decrease further from R1.1 billion to
R970.4 million in 2013/14 and 2014/15 respectively due to the once-off
allocation of R158.5 million in 2013/14 for the African Nations Championship.
Whilst the National Sport and Recreation Plan is being implemented, the budget
allocation has not considered the cost implications for its implementation.
The
2014/15 budget projects an increase in the expenditure of compensation of
employees, from R85.9 million to R103 million in 2013/14 and 2014/15 consecutively.
This is an indication that SRSA plans to fill the vacancies, mainly between
levels 7 and 10. There were 42 vacant posts in November 2013. One other expense
that will increase is the spending on lease agreement, where the department
intends to move to new premises to accommodate the bigger staff complement. The
Auditor General had observed in the previous financial years that the
department’s performance was affected by the high number of vacancies. The
increase funding allocated for compensation of employees, will require the
department to take serious steps in fulfilling this task.
Additional
funding of R3.6 million has been secured for SAIDS in the 2014/15 MTEF period,
R4.2 million for 2015/16 and R5.5 million in 2016/17. This is to ensure that
SAIDS is able to comply with the World Anti-Doping Code (WADA Code). Nothing
has been added extra for Boxing SA, despite the request for additional
funding.
Table
1: SRSA 2014-15 budget per programme
|
Programme |
Audited
Average Expenditure |
Adjusted
Appropriation |
Expenditure
Total Average (%) |
Medium
Term Expenditure Estimate |
|
|
R
million |
2010/11
to 2012/13 |
2013/14 |
2010/11
to 2013/14 |
2014/15 |
|
|
Administration |
90.8 |
100.3 |
124.9 |
9.5% |
131.3 |
|
Active Nation |
500.8 |
539.5 |
592.3 |
51.8% |
615.2 |
|
Winning Nation |
45.5 |
292.5 |
228.8 |
16.1% |
91.3 |
|
Sport Support |
48.2 |
117.5 |
118.2 |
8.7% |
122.2 |
|
Infrastructure
Support |
7.2 |
4.3 |
9.3 |
0.5% |
10.4 |
|
2010 FIFA World Cup
Unit |
559.6 |
_ |
_ |
_ |
_ |
|
Total |
1,252.0 |
1,054.1 |
1,073.5 |
91% |
970.4 |
National Treasury
(2014)
Administration
The
spending focus over the medium term will be on increasing participation in
school sport and developing sport clubs as well as sporting hubs within
communities. The main areas of expenditure will therefore be the Active Nation
program, which consist mainly of transfers of the mass participation and
development grant to provinces, and the sport support programme from which
transfers to sport federations are made. This expenditure accounts for the
dominance of transfers and subsidies in the departmental expenditure.
The
need to provide the necessary oversight in relation to actual use of these
transfers funds accounts for the growth in expenditure on travel and
subsistence over the MTEF period. Overall expenditure decreased between 2010/11
and 2013/14, following the completion of the 2010 FIFA World Cup projects, and
was expected to decrease further between 2013/14 and 2014/15, from R 1.1
billion to R 970.4 million, due to the once-off allocation of R 158.8 million
in 2013/14 Africa Nations Championship. There were 42 vacant posts in November
2013, mainly between levels 7 and 10 and the Department should fill these over
the medium term and these have since increased to 77 vacant posts in the
current financial year due to the new structure. With the increased expenditure
on the compensation of employees over the MTEF period, it is expected that the
department will fill the vacant posts as a matter of urgency. Spending on
operating leases is also projected to grow, due to the Department’s planned
move to new premises in 2013/14 to accommodate the bigger staff complement.
In
future the spending focus over medium term will be on providing corporate and
other support services to the Department, which accounts for the dominance of
corporate services subprogram, and providing for the Department’s accommodation
needs. Thus, the most significant items of expenditure in the programme are
compensation of employees, travel and subsistence. The lease for office
accommodation constitutes 7 per cent of the budget between 2010/11 and 2013/14
and is expected to increase over the medium term after the Department’s
expected move to new premises at the end of 2013/14. Spending on consultants is
equivalent to 1.7 per cent of expenditure on compensation of employees in
2012/13. Consultants mainly provide legal and audio visual services and conduct
external auditing investigations.
Active Nation
The
objective of this programme is to improve the well-being of the nation by
stimulating lifelong participation in active recreation, through facilitating
the delivery of at least 3 programs. The spending focus over medium term on
this programme will be on promoting mass participation in sport and recreation
through the mass participation and sport development conditional grant, which
supports school sport, club development, sporting hubs, sport academies and
sport councils and accounts for dominance of expenditure on transfers to
provinces in the program. An average of 85 per cent of the program’s total
allocation over the medium term will be spent on the grant in the provincial
sport support and coordination subprograms. The management and oversight
exercised by the Department in respect of the grant partially accounts for the
increased expenditure on travel and subsistence, which falls under the
community sport and school sport subprograms.
School
sport remains a priority for the Department as it is the bedrock for sport
development in the country, as reflected in the growth in expenditure in the
school sport sub-programme over the MTEF period. The main activity in this
sub-programme is the South African national school sport championship. Staged
annually, the event explains the relative significance of expenditure on travel
and subsistence and venues and facilities within expenditure on goods and
services. The decreases in expenditure in this sub-programme in 2013/14 were
due to the once–off shifting of funds to the community sport sub-programme for
the Nelson Mandela Sport and Culture Day. The programme had a funded
establishment of 23, with 1 vacancy, at the end of November 2013. It is
expected that all the vacant posts will be filled during the 2014/15 MTEF
period. In addition contract positions set to be created in 2014/15 to assist
provinces in implementing their respective school sport programs account for
the growth in expenditure on compensation of employees over the medium
term.
Winning Nation
The
purpose of this; is to support the development of elite athletes. One of the
crucial objectives of this programme is to contribute to the nation building by
financially supporting; monitoring and evaluating the services delivered by the
South African Sports Confederation and Olympic Committee (SASCOC) in preparing
and delivering South African teams for participation and selected international
multi-sport code events on an ongoing basis. The newly established
sub-programme of Winning nation, the other newly introduced sub-programme is
the Ministerial Sport Bursary Programme, which replaces the Scientific Support.
This programme has ceased to support 31 athletes in December 2013 and will
continue to support 40 in 2014/15 until its complete phase out by the end of
the financial year. Scientific support will help coordinate talent scouting
using school sport competitions as a tool.
The
spending focus over the medium term will be on providing scientific support to
athletes as reflected by the additional allocation of R13.3 million for the
transfer to the South African Institute for Drug-Free Sport. The additional
funds are to assist the institute in ensuring that South Africa complies with
the World Anti-Doping Agency (WADA) code which will be implemented in the
beginning of 2015.
Expenditure
on contracts in the scientific support sub-programme grew significantly from
2010/11 to 2013/14, due to the Department intensifying support for the elite
athletes through high performance centres in preparation for major events over
this period, including the 2012 Olympic Games. The fluctuations in the
transfers to non-profit institutions are due to once-off allocations of R 84
million in 2012/13 African Cup of Nations, and R36 million in 2013/14 for the
2014 African Nations Championship (CHAN). As a result, spending in the major
events sub-programme fluctuates between 2010/11 and 2013/14.
The
recognition systems sub-programme was introduced in 2011/12. Expenditure has
fluctuated (R17.1m in 2012/13, to R21.9 in 2013/14 and down to R18.8m in
2014/15 MTEF period) in this sub-programme from inception, mainly due to
financial incentives paid to athletes for their achievement at international
events in 2011/12 and 2013/14. These
payments were made through transfers to the South African Sports Confederation
and Olympic Committee and are reflected under transfers to non-profit
institutions. As part of the Cabinet-approved budget reductions, the
recognition systems sub-programme expenditure will be reduced by R 3.4 million
over the medium term. The impact of this reduction on service delivery will be
minimised as private sector donors are brought in to augment funding for the
recognition of performances.
The
number of personnel in this programme is expected to increase from 17 in
2013/14 to 23 in 2016/17. This accounts for the increase in expenditure on
compensation of employees over the medium term as vacant posts are filled to
provide the capacity required to support the implementation of the newly
endorsed national sport and recreation plan. The Department delayed filling
these posts to ensure that the new organisational structure would be aligned with
this plan.
Sport Support
The
purpose of this; is to develop and maintain an integrated support system to
enhance the delivery of sport and recreation. The objective of this programme
is to contribute towards uniting the country by supporting 60 national sports
federations and other non-governmental organisations that offer sport and
recreation opportunities to all South Africans in 2014/15. The spending focus
over medium term will be on supporting recognised sport federations through
transfers to non-profit institutions in the sport and recreation service
providers’ subprogram. These transfers constitute 83.6 per cent of the
program’s allocation over the medium term and will ensure that 60 sport
federations are supported in each year of the MTEF period.
The
Sport and Recreation Service Providers sub-programme is part of the existing
structure, however in line with the NSRP, there will be an expansion of its
functions to include, Transformation, Sport Administration, Sport House,
Financial resources, Sport and Environment, Domestic competitions,
international competition, Ethical environment, Geopolitical Sport boundaries,
Sport Councils, Athlete Coach and Technical Officiating support, including
transfers to National federations, Sport Trust and Boxing SA. Its budget will
grow from R111.7 million to R117.9 million in 2013/14 and 2014/15 MTEF periods.
The increased mandate will put pressure on the resources of the department and
thus require a thorough plan of activities to be undertaken within the limited
resources.
The
international liaison sub-programme is projected to have a negative average
annual growth over the medium term due to the implementation of efficiency
measures in international travel, which include smaller delegations being sent
to international events.
The
number of personnel in this programme is expected to increase from 6 posts in
2013 to 9 funded posts in 2016/17. This accounts for the growth in expenditure
on compensation of employees over the MTEF period as the Department fills
vacant posts that will provide the capacity required to support the
implementation of the newly endorsed national sport and recreation plan. The
Department delayed filling these posts to ensure that the new organizational
structures would be aligned with this plan.
Infrastructure
Support
The
purpose of this is to regulate and manage the provision of sport and recreation
facilities. The objective of this programme is to improve levels of
participation in sport and recreation by facilitating the provision of adequate
and well maintained facilities. The spending focus over the medium term will be
on providing 18 outdoor gyms to rural areas that have no sport facilities;
completing the national facilities audit; and compiling a national facilities
plan. This planned expenditure is reflected in the sport and recreation
facility management sub-programme, which constitute 49.5 per cent of total
programme expenditure over the medium term. The provision of outdoor gyms to
rural areas also explains the expenditure on contractors across the seven-year
period.
The
newly created sub-programme of infrastructure support is intended to manage the
delegated administrative and financial responsibilities, and coordinates all
monitoring and evaluation functions. There was only 1 staff member in 2013/14
in this sub-programme and it has been a budget of R2 million during the 2014/15
MTEF period. Whilst the other two sub-programmes have just been expanded to
meet objectives of the NSRP, the name change from Technical Support to Sport
and Recreation facility management sub-programme, has expanded this function to
include the MIG management function.
Expenditure
in this sub-programme is expected to increase over the medium term, following
the lower than expected spending in 2013/14, which was the result of unexpected
delays in the delivery of the outdoor facilities and delays in conducting the
facilities audit. The number of personnel in this programme is expected to
increase from 5 posts in 2013/14 to 9 posts in 2016/17. This accounts for the
growth in compensation of employees over the MTEF as the Department fills the
vacant posts that will provide the capacity required to support the
implementation of the newly endorsed national sport and recreation plan. The
Department delayed filling these posts to ensure that the new organizational
structure would be aligned with this plan.
ENTITIES BUDGET
ANALYSIS
Table
2: Budget of entities of department.
|
Programme |
Audited
Average Expenditure |
Adjusted
Appropriation |
Medium
Term Expenditure Estimate |
|
|
R
million |
2010/11
to 2012/13 |
2013/14 |
2014/15 |
|
|
Boxing
SA |
16
486 |
9
055 |
9 181 |
10
190 |
|
SAIDS |
|
|
|
|
Boxing
SA: 2014/15 Annual Performance Plan
Boxing SA
The budget allocated for the 2014/15 MTEF period is
R10.1 million, which will see R6.4 million (60% of total allocation) being
allocated for the compensation of employees. The development programme and
administration of Boxing SA will always be hampered by the limitation of the
resources. Boxing SA spending over the
medium term is to ensure that key divisions like finance and fund raising
divisions are adequately capacitated. The focus on 2013/14 was on settling the outstanding
debt and filling of key positions. Spending on consultants will reduce as a
result of employing the Chief Financial Officer.
SAIDS
Only
the 2013-2018 strategic plan was tabled for SAIDS and no APP has been referred
to the committee. However during the 2013/14 budget review it had been noted
that SAIDS’s allocated budget would rise from R14 million in 2013/14 to R14.8
million in 2014/15 MTEF periods. This is a slight increase from the R13.2
million which was allocated in 2012/13 MTEF period.
4.4 Concluding comments on financial and service
delivery performance
SRSA
is continuing to implement the NSRP, though largely still an unfunded mandate
and have so far managed to implement 42% of the mandate of the NSRP and are
others have been reviewed for future implementation. A phased-in approach has been designed to ensure that various aspects
can be implemented on an incremental basis. SRSA cost this plan and in the
initial Medium Term Expenditure Framework period it requires approximately R10b
for the 1st year reducing to R7.8b by the 2nd year and stabilizing at R4b
annually to roll-out and implement the entire plan for the 20 year life cycle
of this plan.
Up
to 53.5% (R573 million) of departmental allocation is meant for mass
participation, whose major flagship programme is school sport. The
implementation of school sport programme takes place in provinces, hence up to
87% (R496 million) is transferred to provinces. Training of teachers could not
take place during the 2013/14 MTEF due to lack of cooperation between CATHSETA
and SASCOC. It will important that the Department improves its work and
approach on this programme to ensure that it meets its predetermined
objectives.
The
renaming and alignment of programmes to respond to the objectives of the NSRP
has been noted and has increase the mandate of SRSA to include new programmes,
like the Ministerial Sports Bursary scheme, the Transformation agenda, the
creation of new sub-programme that will assist with the implementation of MIG.
There
is an urgent need for the department to fill all the vacant posts, especially
now that the intention to fill the posts from within has failed and the mandate
has expanded as result of the alignment to the NSRP. There are 77 vacant positions and only 15
people left the department in the past financial year.
Compliance of the federations with the departmental
funding grant framework is essential in order for the federations to qualify
for the transfer. The implementation of the Transformation scorecard is will
assist the Department to monitor the pace of transformation within the
federations. This tool will add more pressure on the federations to comply with
the framework in order to receive funding.
It is important that the department should
plan properly so as to avoid unnecessary shift of funds from one programme to
another, as seen in the increase of more R15.6 million shifted to the Mass
Participation Programme. Whilst this is allowed, it will be important to adhere
to the required threshold of 8% virements. The International Liaison and events
had seen up to 47% (R4.4 million) as virements during the 2013/14.
There is need for SRSA to make follow-up with
SASCOC regarding the its reports on how funds were spent.
Monitoring of provincial allocations remains
a big concern especially where there seems to be over-spending or even under
spending of the grant. SRSA has been previously encouraged to develop proper
monitoring and evaluation systems. The Committee should ensure that it
strengthens oversight and monitor how provinces spent their allocated funds.
The AGSA has made an observation regarding
the financial status of SAIDS and found that it is technically financially
insolvent. This is situation is a concerning and there is a need to find a way
to turn it around. There continues to be irregular spending within the entity,
without adhering to the PFMA, the entity needs to take effective steps to
prevent the reoccurrence of this problem.
The activities of the entity increased during the 2013/14 due to the
increased blood testing they conducted and the amount of educational workshops
provided across all provinces. Doping control officers were appointed to assist
with the education and testing programmes within the 7 provinces. Mpumalanga
and North West province are the only two provinces which currently do not have
dope control officers.
Boxing SA continues to be faced with
challenges again this year, the AGSA could not express an opinion regarding the
entities compliance with legislation and internal control. The irregular
expenditure was more than last year’s rising to R924 312 in 2013/14. This
added to the accumulated irregular expenditure of 2012/13 which was above R1.5
million. The board could not have it meeting due to there being no quorum as a
result of the resignations of members and the sudden death of another member.
5.
Finance and Service delivery performance assessment
The Department had managed to spend 99%
(R1.07 billion) of its allocated funds (R1.07 billion), and achieved a clean
audit from AGSA. The Department was able to successfully implement 17% of the
outputs of the NSRP, and a further 42% still a work in progress. A challenge
still remains the funding of the NSRP and may delay the implementation of a
further 41% of outputs if additional funding is not secured.
SRSA managed to fill some vacancies in senior
management posts such as Directors of Finance, Information Technology and
Supply Chain Management and this increased the expenditure on the compensation
of employees. The vacancies continues to grow as a result of the restructuring
process conducted and up to 77 posts are vacant whilst 15 people left the
department during the 2013/14 financial year.
The largest portion of expenditure of the
department still remains the Mass participation programme and these funds are
largely transferred to provinces for the implementation of the project. School
sport programme remains the flagship of the departmental programmes. The
department has stopped the Club development programme and initiated a new
system of supporting clubs, after piloting the project in two province. A new
club development toolkit has been developed as a result. It will be important
that the plan and the budget for the new system be presented to the Portfolio
Committee.
The movement of funds within programmes
remains a concern for the Committee, this indicates a lack of proper planning
for the department, especially where the funds that are transferred exceed the
required limit as set out by the National Treasury. The facilities coordination
programme had huge, R4.4 million (47%) that were transferred. The main
beneficiary of these funds was the mass participation programme.
The increased load of work to SAIDS as a
result of adopting a new WADA code for anti-doping will require extra resources
from the entity to be able to implement it fully. Whilst there is largely a
concern about the financial status of the entity, it remains a priority that
the entity should fully comply with the PFMA regulations in its activities for
procurement.
Boxing SA has a huge challenge of governance
which should be address by the newly appointed board as a matter of urgency.
More than 60% of it expenditure is spent on the compensation of employees thus
making it impossible for it to implement its programmes. There are still
litigation cases pending and the matter of the CEO should be resolved speedily
to bring stability to the entity.
6.
COMMITTEES Observations and response
·
Technical issues
The existing Memorandum of Understanding with
the Department of Basic Education has not been properly implemented and further
deliberations are needed in order for it to yield more positive results. It
will important to ensure that there is progress in this regard since it will
have an implication on the full implementation of the NSRP, which prioritises
school sport as a flagship programme.
Further discussions with SRSA and COGTA are
needed in relation to find a solution around the use of the 15% Municipal
Infrastructure Grant (MIG) for building of sport and recreation facilities. The
budget of the department does not accommodate the building of facilities but
caters for the implementation of sport programmes. The facility coordination
programme has been restructured to ensure that it accommodates the coordination
function of MIG usage by municipalities.
The mandate of Boxing SA to perform its
function is also exacerbated by the fact that the regulations for the South
African Boxing Act of 2001 were never written. The entity has not been able to
attract sponsorships due to the litigations it has been having and they have
also not been able to acquire the broadcasting rights for all its tournaments
due to the same reason. This has reduced the revenue stream of Boxing South
Africa and has caused it to depend largely on funding from the National
Treasury.
·
Service delivery performance
Whilst SRSA continues with the implementation
of the National Sport and Recreation Plan, it should be noted that this
programme has not been fully funded. In order to ensure that the NSRP achieves
its objectives, the Committee has encouraged that the minister should keep it
posted with regard to the engagements with the National Treasury.
The implementation of the NSRP requires many
departments to cooperate and assist with the rolling out of specific task. The
Portfolio Committee has observed that this may require that there be an
inter-ministerial committee that will be tasked with coordination of the these
tasks.
There were no teacher’s training that took
place however the department managed to spend all its budget on mass
participation and hosted the national school sport championship.
There are vacancies that must still be filled
to support the department. The vacancies have accumulated as a result of the
newly adopted structure which has increased the number of posts. The department
should prioritise filling the important positions and review the need for the
positions that have not been filled.
The inability of the department to meet some
of these targets affects its target and outputs for the next financial year and
should be avoided at all costs.
Boxing SA needs to improve their performance
on how they use the little financial resources they are provided with, so that
they can be able to request more financial assistance to advance some of their
programmes. The Portfolio Committee would appreciate that there be strict
time-frames given to the new board of Boxing SA to enable them to bring about a
meaningful turnaround to the operations of the entity.
The department had taken a decision to
discontinue the Club Development programme and had instead decided to pilot a
new model of Club development in two provinces, Limpopo and Kwazulu-Natal. The
Portfolio Committee has noted that there is still a need to provide support to
all the talented athletes and community clubs who may not necessarily meet the
requirements to enter in universities after their school playing years.
The Committee has noted that SAIDS is not in
a position to generate its own revenue due to the nature of its business but
spends the money that is being allocated to it. As a result there is a need for
the entity to review its spending patterns such that it can increase funding on
programmes and perhaps spend less on capital.
·
Financial performance including funding
proposals
The
Portfolio has taken note of the National Treasury concern regarding the
country’s current fiscal position which does not allow any room of making
additional funding available, however there still has to be progress towards
creating an inclusive economic growth and job creation amid the tough fiscal
environment. Due to the budgetary constraints, departments are required to
efficiently manage the costs pressures related to changes in the inflation
rate, exchange rate or any other factors affecting input prices. As a result
the Portfolio Committee will urge the department to continue implementing the
NSRP by prioritising, whilst other means of funding this mandate will be
sought.
There is a greater need to ensure that
deserving federations are being supported financially and that the
transformation scorecard is implemented and adhered to by those federations.
All federations are expected to adhere to the established grant framework for
them to comply with the requirement to be assisted with the funding. The
nomination of the federation of the year allows the federation to receive an
extra allocation of R10 million in that financial year, to enable it to deliver
its programmes.
There is a need to monitor the provincial
transfers and their alignment to the NSRP. This is intended to ensure that the
provincial programmes are aligned to the national programmes and are pursuing
the funded mandate.
The Committee will continue to support the
Department in its endeavour with the National Treasury to find a solution in
relation to the transfer of the 15% allocation of the MIG to be administered by
the SRSA.
The department has been funding Sport trust,
whose mandate is to build multi-purpose facilities within the rural
communities. During the 2013/14 financial Sport Trust was allocated just over
R30 million by the department, to help amongst other things, with the
Ministerial Outreach programme to build sport facilities and provide sport
equipment in rural areas. The department should ensure that the Sport Trust is
properly managed and accountable for the funds that they have been
appropriated.
7.
Summary of reporting requests
|
Reporting
matter |
Action
required |
Timeframe |
|
SASCOC report on 2013/14 financial
statements for transferred funds |
Briefing Written Plan |
February 2015 |
|
Club development strategy |
Written Briefing |
February 2015 |
|
Filling of vacant posts |
Written |
At the next quarterly meeting (January-March 2015) |
|
Progress report on the facility audit that
was initiated in 2012. |
Written |
March 2015 |
|
Geographical Information
System, The National Facilities Plan and the updated norms and standards |
Briefing Written report of National Facilities audit
and plan |
At the next quarterly meeting (January-March 2015) |
|
Revise the financial
implications of using the Geographic Information System |
Briefing |
March 2015 |
|
SRSA monitoring tool for usage of
3% allocated for sport councils |
Briefing |
At the next quarterly meeting (March 2015) |
|
Action plans to address findings by the AG in relation
to SAIDS and Boxing SA |
Written report |
April 2015 |
|
Progress regarding
cooperation with DBE on School Sport |
Written |
January 2015 |
|
Plans to improve coordination
of training with CATHSETA |
Written |
April 2015 |
|
The list of athletes and schools currently being
assisted through the Ministerial Sport Bursary programme |
Written |
January 2015 |
|
Baseline study to determine
how many athletes who have been supported through Athletes support programme
have attained the international success. |
Written |
April 2015 |
|
SAIDS should report on the
newly revised organisational structure which will include operations of the
newly adopted WADA code |
Written |
February 2015 |
|
Reporting
matter |
Action
required |
Timeframe |
|
Sport Trust should brief the committee on
its activities |
Presentation |
January-March 2015 |
|
Minister to inform the committee on
engagement with the National Treasury on funding for NSRP |
Brief |
March 2015 |
|
In next meeting Boxing SA, SANABO should
be invited |
Presentation |
March 2015 |
|
|
|
|
3
Recommendations
Based
on the analysis of the Department’s budget and the entities for the year under
review (2013/14), the Committee recommends that the Minister for Sport and
Recreation should:
1.
Continue to persuade the National treasury
through innovative ways to fund the full implementation of the NSRP.
2.
Prioritise that all the important vacancies
are filled as contained in the establishment and review the need for those that
have not been filled.
3.
Develop the framework and strengthen the
monitoring mechanism of how provinces use the DORA funds in line with the
priorities of the NSRP as approved by the National treasury
4.
Continue to lobby the National Treasury for a
transfer of the 15% MIG funds and the USDG intended to build sport and
recreation facilities back under the control of the department so that it can
facilitate the building of sport facilities with the municipalities.
5.
ensure that the facility count be completed
as a matter of urgency in order to develop a proper national sport facility
plan by the end of the 2014/15 financial year.
6.
Ensure that the entities implement the
recommendations of the AGSA and are able to avoid the irregular expenditure by
April 2015.
7.
Develop the norms and standards that will
encourage federations to comply with the corporate governance issue and make
provision for corrective measures for those who are not complying. This is to
ensure that federations are self-sustainable in the long term.
8.
ensure that internal controls within the
public entities is strengthened to achieve good corporate governance and
compliance to the legislative framework that governs the use of public funds.
9.
Ensure that litigations that surrounds Boxing
South Africa are resolved in order to enable it to generate revenue through
broadcasting and sanctioning of fights with promoters.
10.
ensure that the all amendments to the
legislative framework of the entities are resolved in the current financial
year.
4
Appreciation
The
Committee was very satisfied with the service delivery performance of the
Department with just a concern on the efficient usage of the resources to
achieve the stated goals. There is concern regarding the management of Boxing
SA and oversight over SAIDS regarding compliance with the treasury regulations
around the PFMA.
As we express our gratitude, we wish to acknowledge
the contribution made by the Members of the Portfolio Committee of Sport and
Recreation, support staff, SRSA and all its entities, National Federations
including members of the public.
Report to be
considered.