Table of Contents




1. Introduction


                1.1 The Committee

1.2 The Department

1.3 Process followed by Committee on BRR Report


2. Strategic Priorities and Measurable Objectives of the Department



                2.1 Strategic Priorities of the Department



                2.2 Measurable Objectives of the Department



3. Analysis of Strategic and Operational Plans of the Department



4. Analysis of Expenditure Reports



5. Analysis of the Annual Report and Financial Statements of the Department



6. Consideration of Reports of Committee on Public Accounts



7. Analysis of the Quarterly Expenditure Reports



8. Committee’s Observations



9. Conclusion



10. Recommendations










The Budgetary Review and Recommendation Report of the Portfolio Committee on Sport and Recreation, dated 29 October 2010


The Portfolio Committee on Sport and Recreation, having assessed the performance of the Department of Sport and Recreation, reports as follows:


1.             INTRODUCTION


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 BSA and SAIDS

·         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 Republic of South Africa, Portfolio Committees have a mandate to legislate, conduct oversight over the Executive and facilitate public participation.


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 these Committees must annually submit Budgetary Review and Recommendations reports for tabling in the National Assembly. These should be considered by the Committee on Appropriations 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 2009/10 to 2011/14 strategic plan, the 2009/10 annual report, A-G Report, SONA, the 2009/10 Estimates of the National Expenditure and the Constitution.










 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 sports and recreation, providing assistance to SA 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 success of the Department:


  • To contribute to a healthy nation by increasing the number participants in sport and recreation and development of talent within an integrated development continuum


  • To assist South African sports people to become winners on and off the field.


  • To raise the profile of sport and recreation through addressing issues of national importance.


  • To streamline the delivery of sport by means of the effective support systems and adequate resources.


  • To contribute to making the 2010 FIFA World Cup the best ever.


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 programme. The department intends to increase mass participation base through effective sports promotion programmes and intensive media campaigns.


2.2.2       Sport Development

Department intends to focus on facilitating the transition from mass based programmes to high performance through coordinating and monitoring the important areas of talent identification and development as well as the delivery of scientific support to national development athletes. The development programmes would be supported by an effective national athlete tracking system. The regular programme impact assessment at various provincial spheres to assess the level of club development and talent identification. Furthermore the Department intents 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 Sascoc becomes the relevant strategic partner of the department since its mandate is to deliver in the focus are of high performance. 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 framework, 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 further the spirit of corporative governance. In addition, the Department intends to intensify its coordination efforts on the 2010 government guarantees to ensure the hosting of successful 2010 FIFA World Cup. The department further intends to finalise the White Paper on sport and recreation that will set the tone for blueprint for sports in our country. The key focus of this policy document would be transformation of sport and promotion of excellence in sport.




The activities of the Department were organized under the following programmes:


3.1          Programme 1: Administration


The Corporate Services: This Unit dealt with Human Resources Department and outlined the human resources strategy. This strategy was inclusive of a clear retention strategy although the Report failed to indicate the skills retained. The Department had set target of 2% for 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 about 37 vacancies in the current financial year. This integration has improved the vacancy rate in the Department.


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 set out in 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 per leave cycle annually. 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 still continuing with relevant parties. The Department was currently developing a succession plan. There were three vacant posts within the Senior Management Services (SMS) of which one candidate must a woman in accordance with DPSA equity targets.


3.2          Programme 2: Sport Support Service


This programme comprises of four sub programmes; namely Sport & Recreation Services Providers, Club Development, Education and Training, Scientific Support. It comprises an integrative financial support provided specifically to Boxing South Africa and SAIDS. The graphics were illustrated which gave funds spent on administration, client support, mass participation, liaison and facilities coordination. Department had made progress in the supply chain management such as awarding 45% of tenders to disadvantaged individuals.


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 and achievements for the current year include among others the following:


          13 959 people trained as coaches, administrators and facilities managers

          0ver 4,5 million people participated in sport and recreation

          Nine national road -shows and 27 provincial road-shows were completed

          Nine provincial school tournaments were held during this period.


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 measurable objectives were to assist national federations and other stakeholders in promoting South Africa as preferred destination for hosting of major continental and international events. This programme was responsible for our country successfully hosting amongst other major international events, Indian Cricket Premier League and the regional under-20 Youth Games.


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. Also oversee the procurement of gymnasium equipment to certain municipalities as part of government drive towards speedy delivery of sports services.


The measurable objectives were to contribute towards skills development of facilities managers.  The greater percentage of the allocated to this programme is used for compensation of employees and purchase of equipment.    Programme 6: 2010 FIFA World Cup Unit


The purpose of this programme is to ensure that all approved venues were ready for the hosting of the 2010 FIFA World Cup in South Africa. This strategic objective was achieved through regular and ongoing monitoring of progress on stadia construction.


The measurable objectives were to enhance the Department’s objectives through policies and directives, promoting South Africa as preferred destination for hosting of major continental and international events and leading to the creation of an environment conducive to sustainable sports development, investment and the improvement of the quality of life of all South Africans.


The greater percentage of the Departmental budget (close to 60 per cent) was allocated to this programme is transferred to entities such as Host Cities for the 2010 FIFA World Cup. The expenditure grew strongly from R603.9 million in 2006 /2007 to R2.2 billion in 2009/10, at an average annual rate of 53, 9 % to accommodate the cost of upgrading and construction of stadiums for the 2010 FIFA World Cup.


 4.            The Analysis of Departmental Allocations and Expenditure Reports 2009/10


The Department of Sport and Recreations was allocated an amount of R2.88 billion for the 2009/10 financial year which is 0.7 per cent per cent of the main budget. This takes into account the adjustment made by the Department during adjustment period in the same year. It should be noted that during the adjustment the Department received about R23.9 million as an additional budget which has increased the total allocation of the Department from the initial budget of R2.85 billion to R2.88 billion in the 2009/10 financial year. 


However, the Department has only spent R2.86 billion or 99.4 per cent at the end of 2009/10 which is R1.7 million or 0.7 per cent under-spending. According to National Treasury this under- spending has emanated from the following programmes[1].




Per Programme

Final Appropriation

Actual Expenditure


Variance as a % of Final Appropriation













Sport Support Services






Mass Participation





International Liaison and Events





Facilities Coordination





2010 FIFA World Cup







4.1.         Administration


Programme 1 was allocated a total budget of R84.5 million for the 2009/10 financial year after the adjustment budget. The programme has only managed to spend at least R81.9 million or 96.9 per cent of this budget. This means that the Department has under spent in this programme. This level of under expenditure was due to the unfilled vacancies such as the one for COO which was only filled in the fourth quarter of the financial year. However, even though the budget has been under spent in this programme but there is amount of R2.4 million which was shifted from this programme to other programmes which then eventually decreased the balance of the budget in this programme but the department still failed to spend it.


This movement of fund was done during the adjustment period, though the PFMA allows it but it is subject to abuse in a number of ways and results in unintended consequences. Firstly, when Department moves funds from one programme to the other those funds do not move with a programme so therefore this movement defeats the intended goal of that particular programme. Secondly, people move funds precisely because of poor financial planning in the particular financial year. It is also an indication that people don’t make use of medium term expenditure framework (MTEF) correctly hence it gives clear projections three years prior of how will the Departmental budget will look like.    



4.2          Sport Support Services


Programme 2 was allocated a total amount of R124.1 million for the 2009/10 financial year after adjustments period, but the Department only spent about R121.3 million or 97.7 per cent of this budget. The slower than expected expenditure was due to the late submission of invoices for training camps and other scientific support services. Part of the under expenditure was delay in transferring funds to sports federations due to the fact that the National Federations were unable to meet the funding requirements. Of note is that an amount of R24.3 million was received by this programme as additional budget from other programmes during the adjustment period but the department still failed to spend the total allocations. 


4.3          Mass Participation


Programme 3 was allocated a total amount of R460.1 million for the 2009/10 financial year. The programme has only spent about R451.8 million or 98.2 per cent at the end of the financial year. This level of under spending was due to the postponement of the National Schools 2010 Football World Cup that was schedule for March 2010 but only took place in May 2010. Of note is that an amount of R10.7 million was received by this programme as additional budget from other programmes to this programme during the adjustment period but the department failed to spend its entire budget.    


4.4          International Liaison and Events


 Programme 4 was allocated a total budget of R9.1 million in 2009/10 financial year and the Department has also managed to spend R7.5 million or 82.2 per cent. This shows a high level of under expenditure of R1.6 million or 17.8 per cent of the allocation in the same period. The slower than expected expenditure was mainly due to the delays in rolling out of International and Tourism promotion projects due to the fact that the team leader’s position was not filled. The Department indicated that the new project leader will be appointed in the last quarter of the 2009/10 and the rest of the projects will take place in 2010/11 financial year. Though the level of under expenditure was high in this programme but it was further noted an amount of R8.8 million was shifted from this programme to other programmes during the adjustment period of the same year but still the Department failed to spend the total allocations even after adjustments.   


4.5          Facilities Coordination


Programme 5 was allocated a total amount of R6.3 million for the 2009/10 financial year. Of this amount, the Department has only spent up to R5.3 million or 91.7 per cent of the entire budget of this programme. This is reflects R530 million or 8.3 per cent under expenditure in this programme. The Department indicated that the slower than expected expenditure in this programme was due to the delays in filling a deputy director’s post which accounts for 87.8 per cent of the current payments budget. Of note is that an amount of R80 thousand was moved away from this programme to other programmes during the adjustment period in the same year.


The Department further elaborated on the trends over the years on this project on expenditure performance. The analysis indicated that the expenditure on this projects pick up in July which is the beginning of the Municipalities financial period.


There is a clear indication that capacity to implement these projects at the local government level is still a challenge. The department indicated that it was useful to intervene by deploying engineers to Municipalities through an internship programme which was discontinued in the current financial year due to lack of funding. The department had always spent around 98 percent of the budget on these projects over the years and therefore the Committee is fairly comfortable with the expenditure level on this programme.


In conclusion the department further raised a number of critical projects that are unfunded to the value of R203 million. These projects are crucial for stability of this department and its capacity development and therefore it is recommended that the amount be granted to the department for execution of these projects. The additional funding is critical considering that government has already committed the funding of these activities.




5.1     Statement of Financial Performance


The total revenue of the department amounted to R4.9 billion comprising R4.7 annual appropriation and 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: 2009/10 Financial Year


For the financial year under review, the department received unqualified audit report. The reasons cited for such a qualified audit report were that the accounting officer of the department ensured that full and proper records of the receivables for departmental revenue of the department was kept as per prescribed norms and standards.


The audit report also pointed to some irregular expenditure of an amount of R38, 4 million which was incurred without adhering to the internal delegation of authority and non-compliance with proper tender process. Those 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 incurred as fruitless and wasteful expenditure due to double hotel booking and payment of venue not utilized.


6.   Report from 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.




8.1          [To date, the portfolio committee’s method of work does not include quarterly evaluation of departmental spending and performance. This part of the report is therefore based on expenditure information supplied by National Treasury].  


8.2          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.


9.    Observations


  • The overall expenditure of Programme 3: Mass Participation grew by 50.5 percent from 2006/07 to 2009/10 financial year. Notwithstanding this exponential growth in overall expenditure, no tangible evidence exists that leagues, clubs were established in communities.


  • The Department continuously transfers conditional grants to municipalities well aware and conscious of the fact that most of the municipalities do not have technical capacity to implement the mass participation programme.


  • Committee was concerned about the delays linked to processing of applications for work permits for foreign sport persons plying their trade in South Africa. The Department of Sport and Recreation and Home Affairs should work together in the processing of applications and ensure compliance with the regulations governing the applications of foreign sports persons.


  • The Committee was concerned that BSA had declared a profit of R2, 1 million yet still had budget deficit of R4, 3 million with its liabilities exceeding its assets. This was attributed to tax penalties and VAT owed to the Receiver of Revenue during the year under review.


  • The Committee expressed serious concern over systemic regression on the front of transformation in major sports codes such as rugby, cricket, swimming, athletics etc.


  • The Committee continued to express concern over the fact that Department had failed to resolve certain prior findings reported in current year still persisting.


  • The Committee expressed its disappointment on the minimal impact made by Mass Participation on club development, talent identification and federations given massive government funding of this programme.


10.          Conclusion


The Committee is satisfied with the service delivery performance of the Department. It is, however, concerned about the consistent recurring matter of emphasis from AG-Report ranging from internal control, irregular expenditure, unauthorised expenditure, and insufficient visits to hubs, supply chain management and mass participation.


The Department has after many years received an unqualified audit report with numerous matters of emphasis from the Auditor General. Notwithstanding the consistent recurring matters, the Committee holds the view that the resources of the Department are utilised economically.


11.          Recommendations


For the current 2009/10 financial year the Department of Sport and Recreation has been allocated R2.88 billion and based on the Department’s strategic focus on the 2010 FIFA World Cup, allocation for the MTEF period will be dramatically reduced for the 2010/11 financial year and beyond. The implication is that those financially struggling stadiums will have to work hard to financially sustain themselves.


Based on the analysis of the Department’s budget for the year under review (2009/2010), the following recommendations are proposed:  


  • Committee on Finance should look at ways to re-align funding allocated for sports development through Love-Life and engage with Department of Sport and Recreation to align and synchronise national, provincial and local spheres of government for implementation of mass participation programmes.


  • The Committee strongly recommends the review of allocation of funding earmarked for sports development to Love-Life since this did not benefit sports programmes. Love-Life should in fact be encouraged to report to Parliament regularly on its sports programmes.



  • The Committee recommends that the Department should strengthen monitoring and evaluation of the Conditional Grants allocated to municipalities to ensure that Municipal Infrastructure Grant (MIG) was utilised for the desired purpose.


  • The Committee strongly recommends that the Municipal Infrastructure Grant (MIG) should be ring- fenced and allocations be dedicated solely for purposes of building basic sports facilities.


  • Transfers of funds to implement building for sports programme should be based on the assessment on Municipalities’ technical capacity and where municipalities were found lacking, the Department should provide necessary assistance.


  • It is recommended that Department should undertake the impact assessment of the Mass Participation Programme and report this to the Committee by end of November 2010.


  • The Committee recommends that the Department should assist community clubs to establish leagues for sustainability of mass participation in sport and recreation.


  • The Committee recommends that additional funding be allocated to sport support services to enable it to provide funding to federations and agencies with a good track record of improving sports facilities and distributing sports equipment to disadvantaged and rural communities, e.g. Sports Trust.


  • The Committee recommends that Department of Sport and Recreation should ensure effective implementation of the current Memorandum of Understanding (MOU) with the Department of Basic Education to advance school sports programmes.


  • The Committee strongly recommends that the Department of Sport and Recreation needed to conduct an impact assessment of transformation in all sports codes and report to the Committee upon completion of such assessment.


  • Additional funding to resource Boxing South Africa in order to fill all vacant key strategic positions thereby ensuring that governance issues raised by the Auditor-General were effectively dealt with by the board and management.


  • It is recommended that the board of Boxing South Africa should appoint the new Chief Executive Officer at least by the 1 December 2010.


  • The Committee recommends that unfunded departmental activities be funded by the Treasury to assist rural and disadvantaged communities with specific sports related projects. In this regard the Department should foster partnerships through the vehicles such as Sports Trust and National Lotteries Fund.


  • The Committee recommends that the Departments of Trade and Industry and Sport and Recreation should move swiftly with initiatives to amend the National Lotteries Act.


  • The Committee strongly recommended that the Department of Sport and Recreation should submit to Parliament all contracts signed between municipalities and federations owning stadiums which were renovated and constructed with the public funds prior to the commencement of 2010 FIFA World Cup.



  • The Committee recommended that Department should submit all international agreements to Parliament signed by the Minister of Sport and Recreation and/or his Deputy  on behalf of the Department in line with statutory requirements.


  • The Committee recommends that the budget for the Department of Sport and Recreation should be reasonably increased given the tremendous contribution made by sport on Gross Domestic Product (GDP) of South Africa through attracting foreign direct investments leveraged during major international sporting events.



Report to be considered