presentation to parliament portfolio committee on arts and culture (24 october 2012)

PRESENTATION TO PARLIAMENT

PORTFOLIO COMMITTEE ON ARTS AND CULTURE

(24 October 2012)

www.statetheatre.co.za

CONTENT1. Overview

2. Vital Statistics

3. Background

4. Strategic Performance Statistics

5. Operational Indicators

6. Human Resources

7. Information Technology

8. Governance and Audit Report

9. Financial Performance

10. Key Focus Areas

11. Conclusion

1. OVERVIEW

This presentation is intended to provide the Portfolio Committee with an overview of the performance of the South African State Theatre in 2011 – 2012 as contained in its Annual Report for the same period and includes:• Background to the Annual Report• Statistical Information• Findings of the Audit Report• Financial Performance• Key Focus Areas

2. VITAL STATISTICS, 2011 - 2012

• Budget R71 827 041

• Revenue R25 155 498• OPEX Grant Funding R37 199 594• CAPEX Grant Funding R5 014 152• Total Employees 119• Total Performance Venues 6• Total Performances 580• Total Attendance 139 224www.statetheatre.co.za

BACKGROUND3.1 Mandate and Role

3.2 Vision, Mission and Values

3.3 Chairperson’s Report

3.4 CEO’s Report

3.5 Artistic Director’s Report

3.6 Strategic Objectives

3.1 Mandate and Role

Constitutional MandateThe mandate of the SA State Theatre is derived directly from the legislative mandate of the Department of Arts and Culture which in turn comes from the Constitution of the Republic of South Africa Act, 1996.

Legislative MandateAs a Cultural Institution we are established under the auspices of the Department of Arts & Culture and are then bound by the Public Finance Management Act 1 of 1999 (PFMA) as well as other applicable legislation.

Policy MandateThe SAST has aligned its legislative mandate to the Department of Art and Culture’s drivers, outcomes and/or outputs.

3.2 Vision, Mission and Values

VisionThe South African State Theatre as a national flagship aspires to be a world leader in the performing arts.

Mission– identify, develop and present the very best performing arts work,– provide programmes which ensure self-generated income, – provide opportunities for the development of emerging arts practitioners,– promote diversity and develop new audiences, and – develop, maintain and upgrade our unique theatre facilities.

Core ValuesCelebration of Excellence - Opportunity and Access - Openness and Integrity - Freedom of Expression - Accountability

3.3 Chairperson’s Report

Financial resultsThe South African State Theatre has managed to meet its financial objectives and increase its self-generated income with further increases projected through to 2015.

Systems and controlsSystems upgrades are being made and controls put in place to monitor performance and make continuous improvements.

Corporate governanceStrengthening of corporate governance practices continues to be a key focus of the Council and Management; both are confident that progress is being made and risks are identified and mitigated in a timely and efficient manner.

3.3 Chairperson’s Report, continued

Revised strategic plan 2012 – 2015

We continue to periodically review the Strategic Plan and take actions consistent with meeting our core business objectives and responding to the changing business environment. Monitoring and measurement techniques are employed to ensure compliance with regulatory bodies and enable The State Theatre to achieve its financial and strategic objectives for the 2012/13 year.

3.4 CEO’s Report

• Our facility• Mandate obligations versus economical

imperatives• The industry• Funding• Clean administration• The immediate future

3.5 Artistic Director’s Report

Actors, Dancers, and Technicians 509

Performances 580

Audience Attendance 139 224

Tickets Sold 124 602 (Used: 106 951)

Complimentary Tickets Issued 49 539 (Used: 32 273)

Total Tickets Sold & Complimentary 174 141

Naledi Awards Won 8

3.5 Artistic Director’s Report, continued

Artistic Programme• Opera• Drama• Arena• Rendezvous• Momentum

3.5 Artistic Director’s Report, continued

Development Programme

• 52 Seasons• Supported by National Lottery• 7 Productions• Momentum Theatre Venue

• Tshwane University Of Technology • Fieldwork programme • 19 Community Groups

3.6 Strategic Objectives

Key Objective 1 Strategy OutputActual

PerformanceComment/ Corrective Action

Develop and Maintain Long-term

Partnerships

Corporate Sector Partnership

Additional Funding secured to improve

service delivery, building development,

maintenance of facilities.

Achieved 2nd MOU of R300 000 to be signed

National, Provincial and Local Government

PartnershipPartially Achieved

Report submitted to DAC for the upgrading of SAST infrastructure

Government Partnership Achieved Several CAPEX projects in progress

Embassies Partnership Partially AchievedCity of Tshwane sponsorship

requested

3.6 Strategic Objectives, continued



Increase Diversity of Products

Staging & Developing In-House Productions

through commissioning and buying

34 In-house productions /annum

32 ProductionsRendezvous Theatre Programme

part of Calendar

624 Performance Days476 Performance

DaysOpera and Drama Theatre closed for

upgrade January & February

132 181 Audience attendance

139 224 AttendedMarketing Department Restructured.

New Marketing Plan to be developed.

391 Actors Employed /annum

423 Employed




Increasing the Diversity of Our

Audience

Market Segmentation and Penetration

Attract LSM 2-6 Community and School

AudiencesPartially Achieved

New and Innovative Marketing Strategies to be Implemented as well Product Diversification together with

Target Market Needs Analysis




Promote Enterprise Culture

Develop Human Capital Skills

HOD Training Achieved

HR Strategic plan now approved by

new HR Committee to be implemented

Introduce Performance Management & Appraisal

StructureAchieved




Increase Self-Generated Income

Raise Sponsorship Income

R8 166 350 R2 249 890

Unrealistic Baseline as based on 2010 World Cup Funding. Fund

Raising Committee established & will implement action plan

Rental Income

Kilnerton R1 195 080 R1 281 686

Office Block R991 200 R762 119Tenant affordability. New tenants

signed up for 2012-2013

Theatre Rental R3 565 146

R3 326 943Scheduled maintenance in January &

February impacted on rentals

Function Room R99 900 R128 449

Restaurants R574 658 R514 4081 Tenant vacated and another

defaulted in payments

Hiring Décor & Costume R1 418 348 R1 597 193

Increase Ticket Sales of In-House Productions

R3 000 000 R2 130 818Marketing and Sales Strategy

reviewed

Parking Income R10 281 207 R10 074 364Increased Show Production will

increase evening parking

Front of House Income R1 502 405 R1 720 192New Pricing Strategy to be

implemented

3.6 Strategic Objectives, continuedKey Objective 6 Strategy Output

Actual Performance

Comment/ Corrective Action

Develop and Maintain Buildings

Feasibility study for development of SAST

including Kilnerton

Report Implementation by December 2011

R13.21m has been approved

Kilnerton on Hold for possible utilization by DAC

Upgrade of Stage Equipment & Facilities

Theatre fit for purpose Achieved

Develop additional Parking Bays from Costume Storage

area

Create 70 Additional Parking Bays

Study commissionedFor completion 2012-2013. Additional

income potential R403 200 p/a

Building Maintenance

98% of Health & Safety Issues dealt with within 24

HoursAchieved

All issues arising successfully resolved within 24 hours

Implementation of Effective Maintenance Programme

Implemented

Reduction of Man-hours spent on Emergency Repairs

(16)Not Achieved

Old building with latent unforeseeable problems.

Scheduled Maintenance Man-hours 600

1 245 HoursOld building with latent unforeseeable

problems

Health & Safety Audit Partially achievedAircon Service Provider Appointment in

process

Minimise Production disruption

No Cancellations due to Breakdowns

Achieved

Secure Environment for Staff and Audience

Security plan developed and implemented effectively

Achieved

Reduce Incidents to 5Not Achieved. 4 Theft

& 10 IODH&S Audit to be done. New Cameras to

be installed




Provide Excellent Customer Care

Create Customer Satisfaction

Increase SAST visibility and customer interaction

Partially Achieved

Implementing CRM System and creating loyalty benefits for valued

customers. Customer care telephone number to be implemented. Annual Customer satisfaction survey to be

implemented




Compliance with Legislation

Compliance with PFMANo qualified audit opinion

or emphasis of matter

2 Audit opinions and 1 Emphasis of

Matter

Aggressive Action Plan to address findings in place. Control

environment being addressed & improved. Performance Manager Appointed to ensure Compliance.

Compliance with BCEA, LRA & EEA

Minimise Labour disputes Achieved4 cases arose during the year. 3

ruled in favor of SAST and the 4th is pending




Develop and Train Staff

Training Strategy Staff training Partially AchievedStrategy approved by New HR

Committee and now being implemented

Employee Recognition & Improved Communication

Policy development Partially AchievedPolicy approved by New HR

Committee to be implemented 2012-2013




Enhance cost efficiency within the

organisation

Install Software to manage Venue Hire & Planning

Installation complete September 2011

Not AchievedProject abandoned due to lack of

funding

Performance Information Management

Quarterly Reporting Partially AchievedQuarterly reporting is achieved. Performance Information Policy

being developed

Moonlighting Policy New policy by May 2011 Partially Achieved Policy amendments pending

4. GENRE REPORT

0% 4%8%

7%

9%

27%

11%

27%

2%1% 4%

Aw ards

Childrens Theatre

Comedy

Concert

Dance

Drama

Festivals

Music

Opera

Student Production

Workshops

OPERATIONAL INDICATORS

5.1 Operational Indicators

5.2 Historical Operational Indicators

5.1 Operational Indicators: Revenue

56%

7%

36%

1%

Grant OPEX

Grant CAPEX

Revenue from Operations

Investment Income

5.2 Operational Indicators: Expenditure

26%

14%

1%

46%

13%

Administrative

Selling & Distribution

Refreshments

Employee Costs

Other Expenses

5.2 Historical Indicators: Revenue

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

2006/7 2007/8 2008/9 2009/10 2010/11 2011/12

Financial Year

R'0

00

StateContribution

Revenue fromOperations

Other Income

5.2 Historical Indicators: Expenditure

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2006/7 2007/8 2008/9 2009/10 2010/11 2011/12

Financial Year

R'0

00

Administrative

Selling & Distribution

Refreshments

Employee Costs

Other Expenses

HUMAN RESOURCES

6.1 Organisational Structure

6.2 Human Resources Strategy

6.3 Employment Equity Programme

6.1 Organisational Structure

6.2 Human Resources Strategy

• Minimise Industrial disputes• Compliance with the Labour Law• Recruitment process efficiency• Customer Care Training• Improve internal communications• Develop a learning culture• High level of skill and care in administration• Awards for good practice• Transformation staffing of competent

individuals

6.3 Employment Equity Programme

PROFILE 2006/2007 2007/2008 2008/2009 2009/2010 2010/2011 2011/2012

Occupational Levels A.C.I W A.C.I W A.C.I W A.C.I W A.C.I W A.C.I W

Management 2 1 3 1 4 1 4 1 4 1 3 2

Middle Management & High Level Specialists

5 4 5 5 5 6 5 6 5 6 6 5

Supervisors & High Skilled/Clerical

36 13 32 10 31 9 32 9 33 9 33 9

Lower Level Skilled/Clerical 42 7 53 4 46 4 46 5 45 5 47 5

Very Low Skilled 4 0 7 0 7 0 7 0 7 2 7 2

CATEGORY TOTAL 89 25 100 20 93 20 94 21 94 23 96 23

ANNUAL TOTAL 114 120 113 115 117 119

6.3 Employment Equity Programme, continued

OCCUPATIONAL LEVELS FILLEDAFRICAN COLOURED INDIAN WHITE

M F M F M F M F

Management Yes 2 1 0 0 0 0 1 1

Middle Management & High Level Specialists

Yes 1 5 0 0 0 0 3 2

Supervisors & High Level Skilled/Clerical

Yes/No 16 13 2 2 0 0 4 5

Lower Level Skilled/Clerical Yes/No 24 16 3 4 0 0 2 3

Very Low Skilled Yes 5 2 0 0 0 0 2 0

CATEGORY TOTAL 48 37 5 6 0 0 12 11

ANNUAL TOTAL 85 11 0 23

119

7. INFORMATION TECHNOLOGY

Focus areas: • Acquisition of Event and Programme Software;• Acquisition of Pastel Payroll;• Integration of Pastel Payroll with Pastel Evolution Accounting;• Implementation of Fixed Assets Management Software to

accurately manage asset values;• Upgrade Server Software from Small Business 2003 to SB 2008;• Standardise Windows platform and upgrade to Windows 8 when

it become available; and• To review the Internet Service Provider to ensure best value for

money and maximise functionality.

8. GOVERNANCE AND AUDIT REPORT

Basis for qualified opinion

1. Trade and other payables from exchange transactionsNo system of control over the recording of outstanding invoices at year-end and no reasonable assurance that all outstanding invoices have been accrued or provided for.

2. Irregular expenditurePayments were made in contravention of the supply chain management requirements amounting to R1 563 712 (2011: R8 810 367). No system of control over irregular expenditure.

FINANCIAL PERFORMANCE9.1 Statement of Financial Performance

9.2 Statement of Financial Position

9.3 Statement of Changes in Net Assets

9.4 Cash Flow Statement

9.5 Statement of Comparison of Actual & Budget

Amounts

9.1 Statement of Financial Performance

9.2 Statement of Financial Position

9.3 Statement of Changes in Net Assets

9.4 Cash Flow Statement

9.5 Statement of Comparison of Actual & Budget Amounts

10. KEY FOCUS AREAS

• Clean Administration through the centralisation of Procurement & Implementation of Compliant Asset Management Processes & Controls

• Implementation of Audience Development Programme in partnership with external stakeholders

• Improve Income from Self-generated Productions• Expand Scope of Development efforts & Introduce

Partnership Approach• Introduce Human Resources Grading and Performance

Management System• Introduce Career Development Programmes for Staff

Development• Introduce Compliance Management

11. CONCLUSION

The South African State Theatre remain and iconic institution. We are striving to consistently meet this standard in our programme content, patron entertainment experience and in our administration. Our intentions are well facilitated through “fit for purpose” operational activities. There is increased pressure on our organization to become financially sound due to imminent Department of Treasury budget restrictions. We are strategically enabling ourselves to increase and improve our income streams. This will enable us to drive key projects, aimed at improving our business holistically. We are ready for the future.

presentation to parliament portfolio committee on arts and culture (24 october 2012)

Documents

sa state theatre

department of arts culture

chairpersons report3

unique theatre facilities

best performing arts

ceos report3

republic of south africa

legislative mandateas