National Lotteries Commission Presentation to Sports Portfolio Committee ________________________________________ 26 June 2017

OVERVIEW Introduction of Delegation New Board Overview of Sports DA Challenges with Amended Legislation Legislative Framework NLC Strategic Priorities NLC Funding Structure Sector Budgets NLC 2018 Priorities (Sports) Other 2

Prof NA Nevhutanda NLC Chairman 3

NLC DELEGATION Prof Nevhutanda (Chairman) Ms Thabang Mampane (Commissioner) Mr Phillemon Letwaba (Acting Executive Grant Funding) Mr Mveleli Edwin Ncula (Sports & Recreation Distributing Agency Chairman) Ms Nompumelelo Nene (Company Secretary) 4

NEW NLC BOARD APPOINTED Professor Ntshengedzeni Alfred Nevhutanda (Chairman) Adv William Elias Huma Ms Sophie Thabang “Peppy” Kekana Ms Doris Dondur Dr Muthuhadini Alfred Madzivhandila Mr Yaswant Narotham Gordhan Ms Zandile Nkonyane (Ministers Nominee) 5

SPORTS DISTRIBUTING AGENCY Section 26B(3) of the amended legislation states that: “members of the distributing agency shall be appointed for a period of five years, which may be renewed only once, to serve on a full-time basis as members of the distributing agency and staff members of the Commission responsible for adjudication of applications for grants or recommendations of funding of worthy good causes received from the Commission” To date only the Charities DA & Arts DA have been appointed as full-time members. Interviews for the Sports & Recreation DA members have already been completed and the process is currently with the dti for finalisation. 6

CHALLENGES WITH THE AMENDED LEGISLATION Cooling off period & the impact on organisations such as SASCOC; Funding Activities outside RSA; Funding for Impact (NLC’s Strategic Intent); National Consultative Indaba (scheduled for September 2017) to focus on beneficiary challenges; Equitable Funding skewed to benefit developed organisations 7

Ms Thabang Mampane Commissioner 8

LEGISLATIVE FRAMEWORK NLC was established in terms of 2 of Act 32 of 2013 (as amended) Amongst the five key functions of the NLC in terms of S2(A) of the Act “The commission may, upon request by the Minister, board or on its own initiative in consultation with the board, conduct research on worthy causes that may be funded without lodging an application as prescribed by the act” (Proactive funding), and “The commission may, upon request by the Minister, board or on its own initiative in consultation with the board, invite applications for grants from worthy causes in prescribed manner” ( Application based open call system) 9

FUNDING MODEL 10

AMENDED REGULATIONS Regulations relating to allocation of money in the NLDTF Charities – 47% Sports – 28% Arts – 23% Misc – 2% Differentiated grants; Small<500k Medium>500k<5m Large grants> 5m Multi year funding Cooling-off period Direction for distributing agencies in determining the distribution of funds from the NLDTF Setting of caps Education and awareness Capacity building Full time distributing agency 150 days target (from date of submission to finalisation) Reviews to be finalised within 90 days 11

Catalyst for social upliftment VISION Catalyst for social upliftment  MISSION Regulate all lotteries and sports pools with integrity and ensure the protection of all participants Maximise revenue for good causes in a responsible manner Distribute funds equitably and expeditiously   ULTIMATE OUTCOMES   Competent, capable and relevant National Lottery built Compliant and regulated Lottery industry receptive to the NLC mandate Fair and equitable distribution of grant funding STRATEGIC OBJECTIVES   Effective and efficient administration of the NLC Financial Sustainability, control and discipline in line with applicable legislation Initiatives geared towards ensuring compliance with the Lotteries Act Fair and Equitable grant allocations PERFORMANCE INDICATORS, BASELINE AND TARGETS   Knowledge Management Education and Awareness Campaigns Integrated Enterprise Wide Architecture Corporate Governance NLDTF Disbursements NLDTF Allocations Implementation of the Investment Strategy Localised Procurement Combatting illegal lotteries Monitoring the performance of the National Lottery Operator against the licence conditions 3. Regulation of illegal lotteries 150 days 5% distribution across all provinces Site Visits Impact evaluation studies in 5 provinces 12

Acting Executive Grant Funding Mr Phillemon Letwaba Acting Executive Grant Funding 13

REVENUE COLLECTION AND SECTOR ALLOCATION . National Lotteries Commission Applications Quarterly Transfer {section 23 (c)} (4%) Quarterly Interest Unclaimed and expired prize money NPO’s Transfer for operational costs {Section 26(2) and Section 34} Weekly Transfer {section 14 (2)(e)} - (78%) Ithuba (Lottery Operator) Investments Share of game sales Prize commitments Surplus funds {section 25(1)} National Lottery Distribution Trust Fund Interest payments {section 23 (b)} (18%) Arts, Culture and Heritage (23%) Charities (47%) Sports (28%) Miscellaneous (2%) Distributions {section 26(3)} Distributions {section 26(3)} NPO’s 14

GRANTS PERFORMANCE PER PROVINCE 15

COMPARISON ALLOCATION IN FY   2016/17 Percentage Budget Actuals Disbursed Arts, Culture and Heritage 23% 499 471 208 422 436 259 520 278 664 Charities 47% 637 121 487 636 898 578 923 854 709 Miscellaneous 2% 26 402 943 25 915 644 20 165 856 Sports and Recreation 28% 448 389 527 438 936 284 508 982 738 Totals 100% 1 611 385 164 1 524 186 766 1 973 281 967 16

COMPARISON ALLOCATION IN FY Financial Year 2015/2016 2016/2017 Allocations R 611 848 309 R 438 936 284 Payments R 739 655 318 R 508 982 738 17

ALLOCATIONS AND PAYMENT FOR SPORTS FY 16/17 Province Allocated Paid Eastern Cape R 38 891 458 R 46 073 175 Free State R 6 075 942 R 7 871 732 Gauteng R 214 671 547 R 276 276 084 Kwazulu Natal R 22 467 416 R 18 259 992 Limpopo R 44 745 809 R 67 257 833 Mpumalanga R 43 425 173 R 21 878 866 North West R 15 824 595 R 17 592 966 Northern Cape R 28 702 930 R 23 459 113 Western Cape R 24 131 414 R 30 312 977 Total R 438 936 284 R 508 982 738 18

2016/17 GRANT ALLOCATION SUMMARY BY TYPE OF INVESTMENTS 19

SPORTS AND RECREATION PRIORITIES 2017/18 Organisations Programmes National Sports Federations Transformation International participation Domestic participation Capacity Building and empowerment Provincial Federations Transformation and development Training and development of coaches of Lotto funded clubs and schools(2015/16) Affiliates to Provincial federations Participations in the Leagues Sports equipment Training and development Sports Clubs and football academies New basic sports facilities Upgrading of existing facilities Participation in the league Public schools New Basic equipment, apparels and upgrading of existing facilities for Quintile 1,2,3 Sports NGO(NPO or NPC) Implement sports and recreation-based programmes in communities 20

CAPACITY BUILDING NLC has developed a strategy on capacitating emerging organisations on: Governance Finance Reporting 21

EDUCATION AND AWARENESS Coordinated at Provincial Level Addresses specific needs based on target audience Create awareness on Fraudulent activities and consultants Awareness on how to access funds and compliance with required documents 22

MONITORING AND EVALUATION Dedicated Team of Monitoring and evaluation per province Monitoring of infrastructure project by panel of engineers Conducting of site visit for programme and financial monitoring Ensure reporting is done as per the signed Grant Agreement 23

Thank you 24