Budgetary Review and Recommendation Report of the Portfolio Committee on Sport
and Recreation, on the performance of the Department of Sport and Recreation
for the 2011/2012 financial year, dated 25 October 2012
The Portfolio Committee on Sport and Recreation, having assessed the performance of the Department of Sport and Recreation, reports as follows:
1.1 The role and mandate of the Portfolio Committee
· 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 or resolutions of the House
In terms of the Constitution of the
Furthermore, Section 5 of the Money Bills Amendment Procedures and Related Matters Act, No 9 of 2009 (the Act) provides that the National Assembly, through its committees, must annually assess the performance of each national department and submit Budgetary Review and Recommendations reports for tabling in the National Assembly. The Committee on Appropriations should consider these when it is considering and reporting on the Medium Term Budget Policy Statement (MTBPS) to the House.
1.2 The role and mandate of the Department
The Department of Sport and Recreation is the primary government institution that is responsible for formulating and implementing policy on sport and recreation. It reports to and advises the Minister who, in conjunction with the Cabinet, takes final responsibility for government policy. The Department is headed by the Director-General, who is responsible for ensuring that sport contributes towards the maximising access to sport and recreation and encouraging world-class performances that improves social cohesion and nation-building.
1.3 Process/ method followed by the Committee in writing the BRR Report
For the period under review, the Portfolio Committee on Sport and Recreation, in exercising its oversight role, had interacted with the Department of Sport and Recreation and analyzed its 2011-2015 Strategic Plan, the 2011/12 Annual Report, the Auditor-General (AG) Report, the State of the Nation (SONA) address and the 2011/12 Estimates of the National Expenditure.
2. STRATEGIC PRIORITIES AND MEASURABLE OBJECTIVES OF THE DEPARTMENT OF SPORT AND RECREATION
2.1 Strategic Priorities of the Department
The Department’s Strategic Plan seeks to deliver results along five strategic objectives that include promoting initiatives that increase the number of participants in sport and recreation, providing assistance to South African sports people to become winners in international and continental sports competitions, raising the profile of sports and recreation through transformation of the sport and recreation sector, and strengthening the operations and management of the Department.
The following strategic focus areas are critical to the success of the Department:
2.2 Measurable Objectives of the Department:
2.2.1 Mass Participation Programme
Sport and Recreation South Africa (SRSA) should continue to pursue initiatives that increase the number of participants in sport and recreation. The Department has to broaden its focus to the area of recreation and strengthen its relationship with the Department of Basic Education in the delivery of school-sports programmes. The Department intends to increase the mass participation base through effective sports promotion programmes and intensive media campaigns.
2.2.2 Sport Development
The Department intends to focus on facilitating the transition from mass-based programmes to high-performance programmes through coordinating and monitoring the important areas of talent identification and development as well as the delivery of scientific support to national development athletes. Furthermore, the Department intends to roll out a national Sport Facilities Plan. The Sports Facilities Plan would enable the Department to monitor the use of facilities and ensure proper maintenance thereof.
2.2.3 High Performance
The Department intends to improve working relations with its key strategic partner in nourishing talent in high-performance sport in our country. Therefore, South African Sport Confederation and Olympic Committee comes the relevant strategic partner of the Department since its mandate is to deliver in the focus area of high-performance sport. The Department intends to improve our country’s international ranking through adequate scientific support to our athletes.
In general, the Department realised that the above strategic focus areas needed to be supported by strong regulatory frameworks, adequate financial resources, reliable sports information and functional sports academies. The Department will continue to work closely with departments such as Basic Education, Tourism and Health in order to further the spirit of co-operative governance. In addition, the Department intends to intensify its coordination efforts of the 2013 government guarantees to ensure the hosting of a successful 2013 African Nations Cup. The Department further intends to finalise the work of the Transformation Commission on Sport and Recreation that will set the tone for transformation, based on sport development in our country.
3. ANALYSIS OF PROGRAMME PERFORMANCE
The activities of the Department were organized under the following Programmes:
3.1 Programme 1: Administration
Corporate Services: This Unit dealt with human resources and outlined the Department’s Human Resources strategy. This strategy included a clear retention strategy although the Annual Report (hereafter, the Report) failed to indicate the skills retained. The Department had set a target of 2 per cent for the employment of people with disabilities. Therefore, the Department had exceeded its own target in employment equity. The current rate of vacancies as reflected in the Report had been due to integration of staff from the Sports Commission and the Department had approximately 37 vacancies in the current financial year. This integration has improved the vacancy rate in the Department. The Department outlined that the Audit Unit was not fully staffed and that slowed down performance. Notwithstanding the above, the Department has not yet met all the employment equity targets as prescribed by the Department of Public Service and Administration (DPSA). The Human Resources Unit had put in place a performance management system and was constantly monitoring it. The employees of the Department were each entitled to 36 days leave per annum. In addition, employees were entitled to 36 days sick leave per annum. In addition, the performance systems and individual agreements were not concluded since negotiations were continuing with the relevant parties. The Department was currently developing a succession plan. There were three vacant posts within the Senior Management Services (SMS) of which one must be a woman in accordance with DPSA equity targets.
3.2 Programme 2: Sport Support Service
This programme comprises of four sub programmes; namely, Sport and Recreation Service Providers, Club Development, Education and Training, and Scientific Support. It comprises an integrative financial support service that is specifically for Boxing South Africa (BSA) and SAIDS. Only four of 61 National Federations received financial support. The reason for this variance was that some National Federation grants were withheld because they did not meet the deadlines and requirements for funding.
The Department reviewed its overtime policy since it was an operational requirement that officials work during weekends. Therefore, officials were no longer rewarded for working in the field or weekends. One hundred and eighty nine capacity building training sessions (target met) were provided to the clubs and sports equipment was provided to 41 clubs in our communities.
3.3 Programme 3: Mass Participation Programme
The purpose of this programme is to increase the number of participants in sport and recreation with special emphasis on disadvantaged and marginalised groups. The programme also transfers conditional grants to provinces to promote mass participation in communities and schools. Achievements for the current year include among others the following:
3.4 Programme 4: International Liaison and Events
The purpose of this programme is to coordinate
all international and intra-governmental relations and support the hosting of
identified major events. The Department hosted a
successful 123rd International Olympic Committee Session
from 7 to 12 July 2011 in
Following the success of the first phase of the Youth Development through Football (YDF), the German government extended its support by another 18 months making a further contribution of Euro 1, 6 million. The second phase will build on the achievements gained during the initial phase, specifically, focusing on consolidation and sustainable integration into the national structures and programmes.
The measurable objectives were to assist
national federations and other stakeholders in promoting
Nineteen major international events received
intra-governmental support per year against the targeted 15 because
3.5 Programme 5: Facilities Coordination
The purpose of this programme is to coordinate the provision and management of sustainable sport and recreation infrastructure by municipalities. In addition, it oversees the procurement of gymnasium equipment to certain municipalities as part of the Government’s drive towards speedy delivery of sports services. A database was developed and updated subsequent to the completion of an audit of provincial facilities. One hundred and sixty three municipalities have been lobbied to build sports facilities, utilizing the Municipal Infrastructure Grant.
The measurable objectives were to contribute towards skills development of facilities managers. The greater percentage of the allocated budget for this programme is used for the compensation of employees and the purchasing of equipment. FifteenYouth Development against Violence through Sport (YDVS) facility projects were implemented (target met).
The 2010 FIFA World Cup Country Report has been finalized. The report is a collation of evidence gathered from commissioned and empirical research, and from the findings contained in stakeholder reports. It also provided the country with the socio-economic benefits generated from hosting the 2010 FIFA World Cup. This Country Report would later be tabled before the Committee for its consideration.
4. The Analysis of Departmental Grants and Expenditure Trends
4.1 Analysis of Expenditure Trends
During the period under review, the Department under-spent on its
allocated budget by less than 1 per cent on average. In
4.2 Conditional Grant Expenditure
The Department administers the Mass Sport and Recreation Participation Programme Grant, which is aimed at facilitating mass participation within communities and schools through selected activities, and the empowerment of communities and schools in conjunction with relevant stakeholders. The monetary value of the grant allocations and expenditure has increased gradually over time; however, the total grant allocation has never been fully expensed. The expenditure rate of this grant for the period 2006/07 to 2010/11 averages at around 93.3 per cent (Figure 1).
Figure 1: Sport and Recreation Conditional Grant Expenditure Trends for the period 2006/07 to 2010/11
Source: National Treasury (2006/07-2010/11)
The Annual Report of the Department is not easily accessible as the reporting format presents the performance information in a fragmented manner and therefore an assessment of performance outcomes against the targets cannot be concluded. Notwithstanding the limitations of the Annual Report, some performance information is reported in the Division of Revenue Bill [B4-2012]. In 2010/11, the grant funding provided for the training of 3 298 people in sport and development compared to 14 679 people in 2009/10; 45 mass mobilisation campaigns were held, the same number as in 2009/10; and 5.1 million people participated in the programme via schools and community clubs compared to the 4.5 million people that participated in 2009/10.
According to the Annual Report, challenges at the provincial level include: underage participants; the non-arrival of transport requested to transport participants; and purchase orders of sporting gear being placed late thus affecting some deliveries. At the national level, challenges with the co-ordination and implementation of the programme is primarily attributed to delays in provinces confirming their accommodation and last minute withdrawals; prolonged memorandum of understanding (MOU) discussions between the Department and provinces; and the SRSA not attending the majority of the plenary meetings.
4.2.1 Irregular, fruitless, wasteful and unauthorised expenditure
The Department incurred irregular expenditure amounting to R49.2 million, unauthorised expenditure amounting to R1.5 million; as well as fruitless and wasteful expenditure amounting to R7.2 million. Table 1 below succinctly demonstrates the pattern of irregular, fruitless, wasteful and unauthorised expenditure from 2006/07 to 2010/11.
Table 1: Irregular, fruitless, wasteful and unauthorised expenditure for the period 2006/07 to 2010/11
Fruitless and wasteful expenditure
R8 937 000
R34 861 000
R4 979 000
R2 964 000
R2 176 000
R2 513 501
Source: Auditor-General (2006/07-2010/11)
Crucially important is to note the seismic shifts in the Department’s expenditure trends from 2008/09, with future projections up to 2014/15 included in the following sections.
Expenditure grew from R74.1 million in 2008/09 to R108.8 million in 2011/12 due to the filling of posts in the Office of the Chief Financial Officer and Corporate Services sub-programmes. Expenditure on compensation of employees also increased from R37.3 million in 2008/09 to R56.1 million in 2011/12. Over the medium term, expenditure is expected to grow to R131.8 million in 2014/15, which is due to increased municipal and office accommodation charges. Expenditure for consultants has declined but is expected to increase over the medium term due to the need for legal services. Of the 35 vacancies in the Department, 28 were in the Administration programme. The objective of this programme is to provide overall and centralised support services. This means that administering, guiding and managing Sport and Recreation is the core business of this programme. The utilization of technology to capture South African athletes in one database is an important aspect and should reside in this programme, as it could also lead to job creation.
4.4 Sport support services
This is one of the key programmes of the Department with a focus on increasing participation through providing financial support, strengthening high-performance sport, promoting sport at a community level and empowering sport human resources through the training of coaches, administrators and technical officials. Key sub-programmes include Programme management, Sport and recreation service providers, Club development, Education, and Scientific support. The budget for this programme is expected to increase from R162 million in 2011/12 to R228.3 million in 2014/15 due to additional allocations to BSA and the increased number of sports federations supported from 61 in 2011/12 to 70 in 2014/15. In preparation for the 2012 Olympics and the Paralympics, expenditure for the Scientific sub-programme will increase. Support for sporting bodies also increases during this period. The programme makes transfers to Lovelife, the South African Sports Confederation & Olympic Committee, Boxing South Africa and the South African Institute for Drug Free Sport. Expenditure for consultants increased during this period in preparation for the 2012 Olympics. It is suggested that the Committee enquires about the tangible impact of these increases.
4.5. Mass participation
The Mass Participation programme is the largest programme of the Department and promotes the sustainable participation of people previously excluded, strengthening of school sport through the training of coaches, developing school sports by monitoring service level agreements with federations and the identification of talent. Key sub-programmes include Programme management, Community Mass Participation and School Sport. The Community Mass Participation sub-programme is the largest component of this programme and is expected to increase over the medium term. Participants in SRSA events increased from 12 165 participants in 2009/10 to 28 000 in 2011/12. The budget for this programme increases from R500.8 million in 2011/12 to R584.3 million in 2014/15. The Community Mass participation sub-programme is expected to increase from R472 million in 2011/12 to R537 million in 2014/15. The School Sport sub-programme is expected to increase from R27.3 million to R44.5 million over the medium term. Mass participation is a programme that is meant to promote programmes by focusing on increasing number of participants in sport and recreation. It is crucial to note that the results and impact of this programme are not clearly visible.
4.6 International liaison and events
This programme manages international exchange programmes, supports
travel arrangements for sports people, and encourages the staging of major
sports events in
4.7 Facilities coordination
This programme established a sports geographical information system and lobbied municipalities to build sports facilities. It facilitates the provision of multipurpose sports facilities, builds upon the legacy of the 2010 FIFA World Cup, and provides technical assistance for sport infrastructure and the training of facility managers to ensure the proper maintenance of sports facilities. The two sub-programmes include Planning & advocacy and Technical support. The programme is also involved in overseeing the donor funds received from the German Development Bank, Kreditanstalt fur Wiederaufbau (KfW), for developing infrastructure associated with the Youth Development against Violence through Sport Project. This programme was responsible for purchasing mobile gyms for designated municipalities. Over the medium term, this programme increases from R8.7 million in 2011/12 to R9.5 million in 2014/15. Over the medium term, expenditure on contractors is expected to increase from R712 000 in 2011/12 to R5.2 million in 2014/15 for the development and maintenance of a sports facilities database using the geographical information system that will inform the national facilities plan. At the local level, the Municipal Infrastructural Grant (MIG) and Urban Settlement Development Grant (USDG) are grants that the majority of the people are not aware of, these grants are specifically meant to build sport and recreation facilities and this is sometimes used on programmes that are far from Sport and Recreation essentialities.
5. ANALYSIS OF ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
5.1 Statement of Financial Performance
The total revenue of the department amounted to R4.9 billion comprising the R4.7 annual appropriation and the R217.1 million departmental revenue.
The total expenditure amounted to R4.5 billion comprising R673 million total current expenditure; R3.8 billion total transfers and subsidies; and R48.7 million total expenditure for capital assets. The surplus for the year amounted to R348.6 million.
5.2 Analysis of Auditor-General Opinion for the 2011/12 Financial Year
For the financial year under review, the Department received an unqualified audit report. The reasons cited for the unqualified audit report were that the Accounting Officer ensured that full and proper records of the receivables for the departmental revenue was kept as per prescribed norms and standards.
The audit report also pointed to irregular expenditure of R38. 4 million, which was incurred by not adhering to the internal delegation of authority and tender processes. These were picked up by the internal controls established by the Department and all cases were evaluated and condoned by the Accounting Officer during the year. An amount of R2. 2 million was incurred as fruitless and wasteful expenditure due to double hotel bookings and payments for venues that were not used.
6. Report OF the Committee on Public Accounts
Because the Department had received an unqualified audit, it was yet to meet with the Committee on Public Accounts, wherein, recommendations by the Committee will be made. That meeting is yet to take place.
7. PERSPECTIVES OF THE COMMITTEE ON THE QUARTERLY EXPENDITURE REPORTS
7.1 To date, the Committee’s method of work does not include quarterly evaluation of Departmental spending and performance. This part of the report is based, therefore, on expenditure information supplied by National Treasury.
7.2 Notwithstanding the above, both the Committee and the Department recognised the urgent need for regular interactions and quarterly reporting in order to ensure accountability and improve effective service delivery.
For the 2011/12 financial year, the Department had been
allocated R820,880, million
and based on the Department’s strategic focus on the School Sport Programme,
allocations for the MTEF period will be dramatically reduced from the 2010/11
financial year and beyond. The implication is that those financially struggling
Federations will have to work hard to sustain themselves financially through
attracting private sponsorships.
Based on the analysis of the Department’s budget for the year under review (2011/2012), the Committee recommends that the Minister for Sport and Recreation should ensure that:
The Committee was fairly satisfied with the service delivery performance of the Department. However, the Committee would like to urge the Director-General to adequately address the recurring matters of emphasis reported by the A-G that range from internal control, irregular expenditure, unauthorised expenditure, insufficient visits to hubs and supply chain management to mass participation. The Department has after many years received an unqualified audit report with no matters of emphasis from the A-G. The Committee held the view that the resources of the Department are utilised efficiently with the view to achieving the targets set out in its Strategic Plan.
Report to be considered