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Gayton McKenzie's missing R146 million
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Millions meant to support artists, athletes, and others within the purview of the Department of Sport, Arts and Culture (DSAC) during the Covid-19 pandemic cannot be accounted for.
On 25 March 2020, former Minister of Sport, Arts and Culture, Nathi Mthethwa, committed R150 million in relief funding for artists, athletes, and technical personnel impacted by event cancellations due to Covid-19 lockdown restrictions.
However, this was later changed, and during the 2020 Special Adjustment Budget, R250 million was allocated for Covid-19 relief.
This is because these individuals were significantly impacted by the ban on mass gatherings and in-person contact activities, leading to a loss of income.
According to DSAC's 2020/21 annual report, of this, R177 million was allocated for the national Department, R58 million for provinces' relief funding, and R10 million for libraries' health and safety protocols.
The balance of R5 million was used for the acquisition of PPE and decontamination services for the five DSAC sites/buildings.
Thus, from the overall R250 million relief allocation, R235 million (R177 million for national and R58 million for provinces) was directly aimed at providing relief funding for the sporting sector and artists.
"The announcement by the Minister of the disaster relief fund for the sporting sector and artists had a major impact on the Department, as a significant amount of the planned budget was reprioritised for the disaster fund," said DSAC.
Four agencies were appointed to disburse the funds: the Sports Trust, National Arts Council, Business and Arts South Africa, and the National Film and Video Foundation.
However, while thousands did receive some support, throughout the process, there were allegations of maladministration, double-dipping, and other problems.
When new Sport, Arts and Culture Minister Gayton McKenzie took office in July 2024, he promised complete transparency by publishing a detailed list of beneficiaries from his department's Covid-19 relief fund.
This decision was made in response to the committee's scrutiny and outcry from the arts and culture industry.
While some members felt the approach was ill-considered, the DSAC clarified that the intention was not to discredit artists but rather to ensure accountability.
In July 2024, these beneficiaries and the amounts transferred were published, showing that payments were done in three "waves," including:
This brings the total reported payouts to just under R89 million for 6,643 beneficiaries – well short of the original R177 million allocated for payments and the later-revised R235 million pool.
Speaking to BusinessTech, Parliament's Portfolio Committee on Sport, Arts and Culture chairperson Joseph McGluwa said that many question marks remain.
"Despite the department's assurance that accounting for funds was within the rules, the committee has not been provided with figures or information on potential shortfalls, leaving questions about fairness and equality unanswered," said McGluwa.
According to the Auditor General of South Africa's (AGSA's) audit report on Covid-19 expenditure, there were several issues with the rollout.
At the get-go, the AGSA said that "the fund relief framework had certain internal control deficiencies that could negatively affect the overall effectiveness of the department‘s relief efforts."
This "could result in the department not achieving the intended objective of providing relief funding to deserving beneficiaries in the sport, arts and culture sector."
According to the AGSA, the progress of distributing the funds was slow, with a large number of applications initially being rejected and now being re-evaluated.
They identified that the original criteria used to evaluate applications were not specific enough to prevent double dipping and that subsequent amendments thereto could have resulted in an unfair process.
Design deficiencies in the system used to capture applications resulted in duplicate payments made to 72 beneficiaries and applications processed with key information not being captured.
Inadequate validations by the system and a lack of reconciliations further increased the likelihood of invalid or inaccurate disbursements, noted the AG.
The AG also said that the Department did not differentiate between the management fee payable to the disbursing agents and the transfer amount to disbursing agents for relief beneficiaries, which resulted in a misclassification of the management fees.
McGluwa said that, given the concerns raised - including his engagements with the South African Performing Arts representatives who only received calls during COVID for support, but nothing further - a "thorough investigation is necessary."
He added that the committee should consider investigating consequence management, especially as they approach the Budget Review and Recommendations Report period.
DSAC did not respond to queries from BusinessTech by the time of publication. Comments will be added if received.
On 25 March 2020, former Minister of Sport, Arts and Culture, Nathi Mthethwa, committed R150 million in relief funding for artists, athletes, and technical personnel impacted by event cancellations due to Covid-19 lockdown restrictions.
However, this was later changed, and during the 2020 Special Adjustment Budget, R250 million was allocated for Covid-19 relief.
This is because these individuals were significantly impacted by the ban on mass gatherings and in-person contact activities, leading to a loss of income.
According to DSAC's 2020/21 annual report, of this, R177 million was allocated for the national Department, R58 million for provinces' relief funding, and R10 million for libraries' health and safety protocols.
The balance of R5 million was used for the acquisition of PPE and decontamination services for the five DSAC sites/buildings.
Thus, from the overall R250 million relief allocation, R235 million (R177 million for national and R58 million for provinces) was directly aimed at providing relief funding for the sporting sector and artists.
"The announcement by the Minister of the disaster relief fund for the sporting sector and artists had a major impact on the Department, as a significant amount of the planned budget was reprioritised for the disaster fund," said DSAC.
Four agencies were appointed to disburse the funds: the Sports Trust, National Arts Council, Business and Arts South Africa, and the National Film and Video Foundation.
However, while thousands did receive some support, throughout the process, there were allegations of maladministration, double-dipping, and other problems.
When new Sport, Arts and Culture Minister Gayton McKenzie took office in July 2024, he promised complete transparency by publishing a detailed list of beneficiaries from his department's Covid-19 relief fund.
This decision was made in response to the committee's scrutiny and outcry from the arts and culture industry.
While some members felt the approach was ill-considered, the DSAC clarified that the intention was not to discredit artists but rather to ensure accountability.
In July 2024, these beneficiaries and the amounts transferred were published, showing that payments were done in three "waves," including:
This brings the total reported payouts to just under R89 million for 6,643 beneficiaries – well short of the original R177 million allocated for payments and the later-revised R235 million pool.
Speaking to BusinessTech, Parliament's Portfolio Committee on Sport, Arts and Culture chairperson Joseph McGluwa said that many question marks remain.
"Despite the department's assurance that accounting for funds was within the rules, the committee has not been provided with figures or information on potential shortfalls, leaving questions about fairness and equality unanswered," said McGluwa.
According to the Auditor General of South Africa's (AGSA's) audit report on Covid-19 expenditure, there were several issues with the rollout.
At the get-go, the AGSA said that "the fund relief framework had certain internal control deficiencies that could negatively affect the overall effectiveness of the department‘s relief efforts."
This "could result in the department not achieving the intended objective of providing relief funding to deserving beneficiaries in the sport, arts and culture sector."
According to the AGSA, the progress of distributing the funds was slow, with a large number of applications initially being rejected and now being re-evaluated.
They identified that the original criteria used to evaluate applications were not specific enough to prevent double dipping and that subsequent amendments thereto could have resulted in an unfair process.
Design deficiencies in the system used to capture applications resulted in duplicate payments made to 72 beneficiaries and applications processed with key information not being captured.
Inadequate validations by the system and a lack of reconciliations further increased the likelihood of invalid or inaccurate disbursements, noted the AG.
The AG also said that the Department did not differentiate between the management fee payable to the disbursing agents and the transfer amount to disbursing agents for relief beneficiaries, which resulted in a misclassification of the management fees.
McGluwa said that, given the concerns raised - including his engagements with the South African Performing Arts representatives who only received calls during COVID for support, but nothing further - a "thorough investigation is necessary."
He added that the committee should consider investigating consequence management, especially as they approach the Budget Review and Recommendations Report period.
DSAC did not respond to queries from BusinessTech by the time of publication. Comments will be added if received.
Source - businesstech
