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PRESENTATION TO THE PRESENTATION TO THE PORTFOLIO PORTFOLIO COMMITTEE ON SPORT & COMMITTEE ON SPORT & RECREATIONRECREATION

XX /09/2014XX /09/2014

PRESENTATION TO THE SELECT COMMITTEE ON PRESENTATION TO THE SELECT COMMITTEE ON EDUCATION AND RECREATIONEDUCATION AND RECREATION

DATE: 25 NOVEMBER 2015DATE: 25 NOVEMBER 2015

BY: Mr ALEC MOEMI, DIRECTOR-GENERALBY: Mr ALEC MOEMI, DIRECTOR-GENERAL

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BACKGROUND & MANDATE

The main responsibility of SRSA is to develop national policies and guidelines for sport and recreation in the country. Partners assisting with implementation are provinces and municipalities as well as SASCOC, National Federations, and other agencies such as NGOs.

Despite the delivery of sport and recreation in three different spheres of Government, the actions and initiatives within SRSA’s mandate were coordinated to maximise impact.

The Department administers two public entities namely; Boxing South Africa (BSA) and the South African Institute for Drug-Free Sport (SAIDS).

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The Department is led politically by Minister Fikile Mbalula, who is deputised by Mr Gert Oosthuizen.

Mr Alec Moemi is the administrative head of the Department (Director-General). His deputy is Ms Sumayya Khan, who holds the post of Chief Operations Officer (COO).

There are 8 Chief Directors, including the CFO, Chief of Staff and Ministerial Advisor (as well as the newly appointed CD: Communication Services), forming the next level of authority, below the COO.

LEADERSHIP

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The Vision of Sport and Recreation South Africa (SRSA) is ‘An active and winning nation’.

While this vision indicates the core focus of SRSA’s current endeavours, the scope of the vision expresses firm commitment to having a significant and positive nationwide impact.

The Mission is to transform the delivery of sport and recreation by ensuring equitable access, development and excellence at all levels of participation and to harness the socio-economic contributions that can create a better life for all South Africans.

STRATEGIC INTENT

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During the period under review, the Department had 23 Targets. Of these targets, 21 were achieved and two were not. In addition, the Department obtained a Clean Audit Opinion on performance & financial information.

This translates to non-achievement of 9% and the Achievement of 91% of the targets.

The achievement was reached through 163 staff members working as members of ordinary functional units and in task teams; and R966.8 Million of the allocated R970 Million.

Although the ideal is to spend 100%, the Department's expenditure translates to only 0.3% under-spending.

PERFORMANCE OVERVIEW

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PERFORMANCE OVERVIEW

The targets not achieved: a score of ‘4’ for Management Performance Assessment Tool (MPAT) [Programme 1] and 9 Facilities Audits (1 by each province) [Programme 5]. Only 2 audits were conducted.

MPAT: Despite its capacity constraints, the intention was to reach the maximum achievable score of ‘4’. This is because the Department could not plan to fail by allocating a score lower than a ‘4’ as its target for the year. An implementation plan has been developed to assist relevant managers’ to track performance against the set MPAT Key Performance Areas and standards.

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PERFORMANCE OVERVIEW

The targets not achieved:…

Facilities Audit: Only 2 audits were conducted by Free State and Western Cape, while KZN only conducted an audit for one district within the province.

- Although financial capacity ended up being the main reason for provinces not conducting the Audit, there seemed to be generally lack of appetite to conduct the audit.

- The indicator was carried over to 2015/16 financial year. SRSA will be leading implementation of the project.

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The implementation of the National Sport & Recreation Plan (NSRP) is not fully funded.

This means that the Department has to prioritise the programmes it can afford.

Despite the government-wide Medium Term budget constraints, the Department is hopeful that in the near future, sport and recreation will find a spot among the other important funding pressures that are high on government priorities.

CHALLENGES

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The consultation process towards finalisation of the organisational structure took longer than anticipated, thus impacting on staffing of the Department.

Although a solution, creation of posts additional to the establishment, has a limit.

Even though the structure can only be implemented in a phased approach because of funding constraints, its approval will enable the Department to plan better for the future.

CHALLENGES continues

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Lack of capacity to effectively monitor the implementation of the Mass Participation and Sport Development Conditional Grant by SRSA and Provinces.

Terms of the Grant are updated to ensure integration of provincial programmes and those of SRSA.

The Agreement with DBE towards implementation of School Sport remains problematic. For school sport to function successfully, a sound foundation is needed; and this is where DBE operates [intra-school; inter school, and so forth].

CHALLENGES continues

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Lack of control over the building of sport and recreation facilities at municipal level to meet the existing needs. Discussions around the MIG are ongoing.

Although there is an improvement, governance challenges relating to Boxing South Africa (BSA) are still existing. Progress towards filling the vacancies in critical positions that are attributable to the entity’s lack of efficient and effective leadership, are in progress.

Legislation does not fully support our strategy. To this effect, the Department is reviewing its legislation: NSRA; Boxing Act [to be repealed in favour of the Combat Sport Act once finalised]; and the SAIDS Act.

CHALLENGES continues

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PROGRAMME PERFORMANCE

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5 PROGRAMMES:

1. Administration

2. Active Nation

3. Winning Nation

4. Sport Support Services

5. Infrastructure Support

PROGRAMME PERFORMANCE

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Corporate Services

Two key policies under HRM were approved and implemented during the year under review. They are:

Overtime Compensation Policy and the Flexible Work Practice Policy. Not having these policies had somewhat affected delivery of services after working hours.

A total of 120 employees were trained, in accredited/non-accredited training courses.

The Internal perception survey conducted revealed that overall, our staff members are motivated and are aware of the capacity challenges that only them, in the interim, can mitigate. The results help us engage labour unions from an informed position.

ADMINISTRATION

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Against a target of 10 000, the 3rd national school sport championship held in December 2014, reached 915 more participants than the target. Of the total participants, 8 307 were learners. This can be attributed to additional categories of disabled participants having been added.

2nd Nelson Mandela Sport and Culture Day with the official reach of 2 681 participants, saw cyclists, walkers and runners participating in physical activities as part of the broader contribution towards an Active Nation.

Hosted in partnership with the Department of Arts and Culture, the Day is part of the Unite Campaign aimed at entrenching social cohesion and nation-building.

ACTIVE NATION

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With fewer sport codes selected as per need, to receive sport equipment and apparel, 226 (106 more schools than planned), benefitted. The Department spent more or less what could’ve been used to procure for many codes in each of the initially targeted 120 schools, in procuring equipment and apparel for 226 schools.

Once again the Department hosted the annual Andrew Mlangeni Green Jacket Awards and the Andrew Mlangeni Golf Day, as a way of contributing to golf development, while celebrating the contribution made by Mr Mlangeni to the growth of sport in the country.

ACTIVE NATION

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Nine as opposed to the planned 2 sport promotion campaigns and events were implemented because of additional events, mainly Ministerial Outreaches to respond to added sport promotion needs. Outreaches impact on immediate & future participation in sport and recreation [enabling tools such as equipment and apparel was made available].

ACTIVE NATION

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11 318 people more than planned, especially in the events that are open to the public, such as the Big Walk, showed interest in the SRSA mass-based events.

This is because the events open to the public can take more participants without having a significant bearing on finances. For example, at a Walk, if a provision is made for 5 000 people, the additional ones may still register; but will not receive goodie bags like those who pre-registered.

ACTIVE NATION

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The SasRecon – a sport and recreation conference, where academics meet with the broader sport and recreation sector to discuss matters relating to the growth of the sector, was held in Potchefstroom in 2014 as part of the knowledge management efforts of the Department.

The ThinkSport journal focusing on club development, was released in March 2015 to encourage discussions about the subject as the Department is piloting a franchise system of club development.

Five drug-free support agencies, namely: SAIDS; WADA; IADA; CDA; and RADO were supported during the period under review.

WINNING NATION

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Following the 2014 National School Sport Championships, 18 talented athletes were chosen as recipients of Ministerial Sport Bursaries. These athletes are placed in accredited sport focus schools, and where there is no sport focus school closer to their homes, in a non-accredited school that is good in sport and academically.

The planned number of major international events receiving intra-governmental support per year was reached, while other events that will be taking place in 2015 and 2016, already received some support with among others, the facilitation of visas for organising team members to conduct site inspections, etc.

WINNING NATION

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WINNING NATION

In partnership with the Department of Arts and Culture, we hosted another successful Ekhaya hospitality centre in Glasgow, in support of Team South Africa that participated in the Commonwealth Games in 2014.

Six athletes’/teams recognition events were held during the period under review. This was 3 more than the planned SA Sports Awards; Andrew Mlangeni Green Jackets; and 1 ‘celebrate as they win’ recognition event.

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Sport and recreation bodies receiving financial and non-financial support per year: There was improved compliance by sport and recreation bodies. This enabled the Department to allocate funds to an additional (4) sport and recreation bodies.

The 2014/2015 National Federation Transformation Progress Report was produced. The report will go a long way in helping create a transformation database for the country’s sport teams.

The Department will then be able to agree on transformation targets with each priority federation and monitor their adherence to the agreement. The financial allocations to federations will thus, be dependent on how far they meet their set transformation targets.

SPORT SUPPORT

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SPORT SUPPORT

The Department continued with the implementation of the agreement signed with Cuba benefiting the South African students studying Physical Education in that country.

The planned number of bilateral and multilateral engagements supported was exceeded because of the additional needs identified for such engagements.

This, mainly because at the time of planning, some of the engagements were unknown. This included for example, participation at international meetings that were only confirmed closer to them taking place.

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SPORT SUPPORT

The Department was however able to manage with the resources at its disposal. Some of the exchanges involved representatives of other countries visiting South Africa, thus costing the Department only minimal resources.

Similarly, some of the multilateral engagements had to be supported because of South Africa’s membership of various international forums.

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INFRASTRUCTURE SUPPORT

25 sport & recreation facilities were assisted with technical support during construction. They include those built through support from the Sport for Change (SFC); Municipalities (using MIG); and the SRSA directly-funded community gyms.

Exceeded facilities supported: due to ‘carry overs’ caused by delays in finalising some of the projects in the 2013/2014 financial year.

2 [FS /WC ]out of 9 provinces completed a facility audit.

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GOVERNANCE

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RISK MANAGEMENT / ASSESSMENT

With regard to management of risks, the Department has developed and approved the combined assurance framework which outlines the various lines of defence or available assurance providers of the Department.

A combined assurance plan has been developed, approved, monitored and reviewed on a quarterly basis through the Risk Management Committee and Audit Committee.

Risk assessments: Management has developed a risk identification and assessment methodology which aims to outline the processes of risk assessment within the Department and the rating thereof.

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FRAUD AND CORRUPTION: The Department’s Fraud Prevention Plan was developed and approved. The plan forms part of Anti-Fraud and Corruption Policy. The Plan encompasses among others, Training; Supplier awareness and database; Reporting of corruption and fraud; Disclosure of gifts; and Staff vetting.

The Department is looking at capacitating this area of our governance work to ensure proper implementation of the Fraud Prevention Plan.

INTERNAL CONTROL: The Department introduced a process of internal control to provide a reasonable assurance regarding the achievement of the objectives set for the Department relating to operations, reporting and compliance.

FRAUD & CORRUPTION / INTERNAL CONTROL

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MINIMISING CONFLICT OF INTEREST: In terms of the Financial Disclosure Framework all SMS members made their financial declarations.

Interview panel members: made declarations relating to their relationship with candidates.

Supply chain practitioners: signed to declare their understanding of the code of conduct (that obligates all SCM practitioners to the extent required by their position, to declare any business, commercial and financial interests or activities undertaken for financial gain that may raise possible conflict of interest).

MINIMISING CONFLICT OF INTEREST

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HEALTH SAFETY AND ENVIRONMENTAL ISSUES: The reviewed departmental OHS Policy and Procedures was finally adopted at the Departmental Bargaining Chamber (DBC) and is being implemented.

AUDIT COMMITTEE REPORT: We have reviewed the Department’s implementation plan for audit issues raised in the prior year and we are satisfied that the Department has put more effort in improving the internal control environment.

The Audit Committee has reviewed and accepts the opinion of the Auditor-General South Africa.

GOVERNANCE

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HUMAN RESOURCE MANAGEMENT

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Table 3.2.1 Employment and vacancies by programme as on 31 March 2015

ProgrammeNumber of posts on approved

establishment

Number of posts

filled

Vacancy Rate

Number of employees

additional to the establishment

Programme 1 175 122 53 7

Programme 2 24 18 6 2

Programme 3 18 10 8 4

Programme 4 19 17 2 3

Programme 5 7 4 3 1

Total 243 171 72 17

* Excluding two (2) Ministers and two (2) Special Advisors.

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Table 3.2.2 Employment and vacancies by salary band as on 31 March 2015

Salary bandNumber of posts on approved

establishment

Number of posts

filled

Vacancy Rate

Number of employees additional to the establishment

Lower skilled ( 1-2) 0 0 0 0

Skilled(3-5) 65 38 27 8

Highly skilled production (6-8)

59 46 13 4

Highly skilled supervision (9-12)

88 64 24 4

Senior management (13-16)

31 23 8 1

Total 243 171 72 17

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Table 3.3.1 SMS post information as on

31 March 2015

SMS Level Total number

of funded SMS

posts

Total number of SMS posts filled

% of SMS posts filled

Total number of SMS posts

vacant

% of SMS posts vacant

Director-General

1 1 43% 0 0%

Salary Level 16 0 0 0% 0 0%

Salary Level 15 1 1 4.3% 0 0%

Salary Level 14 7 6 26% 1 12.5%

Salary Level 13 22 15 65.2% 7 87.5%

Total 31 23 100% 8 100%

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Table 3.5.1 Annual turnover rates by salary band for the period 1 April 2014 to 31 March 2015

Salary band Number of employees at

beginning of period-1 April 2014

Appointments and transfers

into the department

Terminations and transfers

out of the department

Turno-ver rate

Lower skilled ( Levels 1-2) 0 0 0 0%

Skilled (Levels3-5) 30 5 1 13.3%

Highly skilled production (Levels 6-8)

42 10 2 19%

Highly skilled supervision (Levels 9-12)

60 10 8 3.3%

SMS Bands A 14 5 6 -7.1%

SMS Bands B 6 1 1 0%

SMS Bands C 1 0 0 0%

SMS Bands D 1 0 0 0%

Contracts 17 2 4 11.7%

Total 171 33 22 6.4%

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Table 3.10.1 Sick leave for the period 1 January 2014 to 31 December 2014

Salary band Total days

% Days with

Medical certificati

on

Number of

Employees using

sick leave

% of total

employees using

sick leave

Average days

per employ

ee

Estimated Cost (R’000)

Lower Skills (Level 1-2)

0 0% 0 0% 0 0

Skilled (levels 3-5) 229 80.3% 35 27.1% 6.5 155

Highly skilled production (levels 6-8)

259 77.2% 32 24.8% 8 273

Highly skilled supervision (levels 9 -12)

404 80.6% 49 37.9% 8.2 759

Top and Senior management (levels 13-16)

71 81.6% 13 10.0% 5.4 243

Total 963 79.7% 129 100% 7.4 1430

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Table 3.10.3 Annual Leave for the period 1 January 2014 to 31 December 2015

Salary band Total days taken

Number of Employees using

annual leave

Average per employee

Lower skilled (Levels 1-2)

0 0 0

Skilled Levels 3-5) 645 38 17

Highly skilled production (Levels 6-8)

878 46 19

Highly skilled supervision(Levels 9-12)

1490 64 23

Senior management (Levels 13-16)

406 23 18

Total 3419 171 20

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ANNUAL FINANCIAL STATEMENTS – 2014/2015

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SRSA

SRSA is amongst the non-revenue generating government departments.

The revenue for the Department is mainly made up of the annual appropriation received from the National Revenue Fund.

SRSA was appropriated an amount of R970 404 million for the financial year under review, which is a decrease of 9.6% translating into an amount R103 million compared to the R1 073 billion received in the previous financial year.

This significant decrease was as a result additional funding of R120 million which was a once-off special funding for the CHAN 2014.

REVENUE

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SRSA

SRSA has received an additional amount of R27 million from KFW, Frankfurt am Main (German) for the rehabilitation of kick-abouts, pitches and multipurpose sites.

SRSA also generated an amount of R107 000.00 from recovery of telephone expenses from staff, interest on the bank accounts and sale of motor vehicles.

REVENUE (continued)

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The Department expensed almost all funds allocated in the current financial year.

The amount to be surrendered is only R3.5 million of the R970 million appropriated from the Revenue Fund.

The funds utilized amounts to 99,63% translating into R966 million of the allocated funds.

The 3.5 million underspent was mainly in Compensation of Employees, with an amount of R1.8 million and in Goods and Services, with an amount of R1.7 million.

EXPENDITURE

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The detailed breakdown of expenditure is included in the Appropriation Statement and the Notes to the Annual Financial Statements.

EXPENDITURE (continued

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EXPENDITURE 2014/15 PER ECONOMIC CLASSIFICATIONEXPENDITURE 2014/15 PER ECONOMIC CLASSIFICATION

DEPARTMENT OF SPORT & RECREATION SA

Final Appropriation

Actual Expenditure Variance

Expenditure as a %

of final

Appropriation

R'000 R'000 R'000 %

Current Expenditure

Compensation of employees 84 203 82 376 1 827 98%

Goods and services 185 262 183 021 2 241 99%

Transfers and Subsidies

Provinces & Municiaplities 525 632 525 632 - 100%

Departmental agencies and accounts 26 525 26 496 (29) 99%

Non-profit institutions 146 615 146 615 - 100%

Payments for capital assets

Machinery and equipment 2 167 2 109 58 97%

Software and other intangible assets

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EXPENDITURE (continued)

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Expenditure is therefore broken down as follows in terms of Appropriation per Economic Classification:

1. Compensation of Employees

The spending on compensation to employees is 97.8% for the year under review.

This was achieved because there was a virement of R4.029 million to goods and services effected during the year.

This was to enable the Department to defray over-expenditure for the Ekhaya Project that took place during the 2014 Commonwealth Games in Glasgow and payments towards computer software, laptops, printers and UPS for departmental servers.

EXPENDITURE (continued)

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2. Goods and services

The spending on Goods and Services is 98.8% for the year under review.

The under-expenditure was due to savings realized as a result of accommodation costs that have not been utilized as the Department did not move to the new premises.

EXPENDITURE (continued)

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3. Transfers and Subsidies

The spending on Transfers and Subsidies is R699 million which represent 100% of the appropriated amount, this simply means that SRSA did not under-spend on this budget item. Transfers and Subsidies was therefore broken as follows:

To Provinces - R525 million which represent 75% of the Transfers and Subsidies budgetTo Non-Profit Institutions (Clubs and Federation) - 21% of the Transfers and Subsidies budget, which translates into R146 millionTo Boxing SA and South African Institute for Drug Free Sport - R26.5 million which is 4% of the Transfers and Subsidies budget.

EXPENDITURE (continued)

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4. Payments for Capital Assets

The spending on Payment for Capital Assets was 97.3% for the year under review.

This represent actual expenditure of R2.109 million out of appropriated budget of R2.167 million.

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EXPENDITURE (continued)

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EXPENDITURE AGAINST BUDGET 2012/13 TO 2014/15EXPENDITURE AGAINST BUDGET 2012/13 TO 2014/15

Financial year

BudgetR’000

ExpenditureR’000

Percent

2012/13 1 063 099 1 054 084 99.2%

2013/14 1 013 485 1 073 029 99.9%

2014/15 970 404 966 825 99.6%

EXPENDITURE (continued)

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EXPENDITURE 2014/15 PER PROGRAMMEEXPENDITURE 2014/15 PER PROGRAMME

Per Programme Final Appropriation

Actual Expenditure

Variance Expenditure as a % of Final

Appropriation

  R'000 R'000 R'000 %

Administration 106 512 105 152 1 360 99%

Active Nation 624 767 624 767 0 100%

Winning Nation 84 499 83 109 1 390 98%

Sport Support 148 861 148 861 0 100%

Infrastructure Support 5 765 4 936 829 86%

EXPENDITURE (continued)

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Name of institution Final Appropriation

R’000

Amount Transferred

R’000

Provincial Conditional Grant

525 632 525 632

Boxing SA 7 945 7 945

SA Institute for Drug-Free Sport

18 504 18 504

CATHSSETA 76 47

National Federations 146 615 146 615

TRANSFER PAYMENTS

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Province 2014/15Division ofRevenue

Act

Roll Overs

ActualTransfer

Amount spent byprovince

% of fundsspent by

department

R’000 R’000 R’000 R'000 %

Eastern Cape 64 895 1 091 65 986 65 986 100%

Free State 40 318 40 318 40 318 100%

Gauteng 94 915 94 915 94 915 100%

Kwa-Zulu Natal 85 435 85 435 85 435 100%

Limpopo 59 446 59 446 59 446 100%

Mpumalanga 46 959 46 959 46 959 100%

Northern Cape 31 450 31 450 31 450 100%

North West 43 503 43 503 43 503 100%

Western Cape 58 711 58 711 58 711 100%

525 632 1 091 526 723 526 723 100%

MASS PARTICIPATION PROVINCIAL ALLOCATIONS

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Challenges: The post of Director: Finance has not yet been filled

There are still some gaps in the departmental Internal Control Systems, even though a lot of improvement has been experienced.

Achievements :Maintenance of a clean audit

Reduction of AG Findings

Payment of suppliers within 30 days.

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•Achievements:

Unqualified opinion from AG for consecutive years

No emphasis of matters reported by the AG on financial statements

No emphasis of matters reported by the AG on performance information

Reduction in number of issues raised by the AG.

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ADUTOR-GENERAL’S REPORT:

• I have evaluated the reported performance information against the overall criteria of usefulness and reliability.

• I evaluated the usefulness of the reported performance information to determine whether it was presented in accordance with the National Treasury’s annual reporting principles and whether the reported performance was consistent with the planned programmes.

• I further performed tests to determine whether indicators and targets were well defined, verifiable, specific, measurable, time bound and relevant, as required by the National Treasury’s Framework for managing programme performance information (FMPPI).

FINANCIAL PERFORMANCE (continued)

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ADUTOR-GENERAL’S REPORT: I assessed the reliability of the reported performance information to determine whether it was valid, accurate and complete.

I did not identify any material findings on the usefulness and reliability of the reported performance information for the following programmes: Active Nation and Sport Support.

OpinionIn my opinion, the financial statements present fairly, in all material respects, the financial position of the Department of Sport and Recreation South Africa as at 31 March 2015 and its financial performance and cash flows for the year then ended, in accordance with the Modified Cash Standards as prescribed by National Treasury and the requirements of the PFMA.

FINANCIAL PERFORMANCE (continued)

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WORKING TOGETHER, WE CAN WORKING TOGETHER, WE CAN CONTINUE TO MAINTAIN THE CONTINUE TO MAINTAIN THE DEPARTMENTAL CLEAN AUDIT.DEPARTMENTAL CLEAN AUDIT.

We’ll now take questions and advice from the Honourable Members.

Thank You.

Mr Alec MoemiACCOUNTING OFFICER