PANSALB STATUS REPORT PRESENTED BY: ADG Mr. Vusithemba Ndima DATE: 16 February 2016

PURPOSE To brief the Portfolio Committee on the dissolution of the Pan South African Language Board and way forward

BACKGROUND The institution has had numerous sustained periods of crisis since its establishment. PanSALB has consistently argued that it is underfunded, and over time, there has been substantive instability in senior management and board structures. In 2011, the management and governance challenges were so extreme that the Portfolio Committee on Arts and Culture requested the Minister of Arts and Culture to intervene. In the same year, the Minister of Arts and Culture commissioned a review of the organisation which found as follows: PanSALB had materially failed to meet its mandate and was unable to translate its mandate into a meaningful and aligned set of strategic objectives and performance activities. That there were serious and deep rooted problems in the functioning of the PanSALB board and the organisation itself. Based on this report, the Minister of Arts and Culture (Mr. Paul Mashatile) exercised his powers in terms of section 5(5a) of the PanSALB Act 59 of 1995 and dissolve the Board, and appointed an caretaker CEO to assist in the development and implementation of a turnaround strategy.

BACKGROUND A New Board was appointed in 2014 and took over an organisation that was already in a state of financial crisis as the allocation from the DAC could not accommodate the fixed costs of the organisation or settle outstanding obligations. Numerous meetings were held between the Board and DAC, and the entire staff and board of PanSALB with the Deputy Minister and the Portfolio Committee on Arts and Culture. The current board was unable to fulfill the leadership role as required in terms of the PFMA and the PanSALB Act, and further made a series of decisions that further undermined the viability and sustainability of the organization. These include, amongst others, a lack of responsiveness with regard to decision making which opened up the organization to further legal claims, and the summarily dismissal of 42 staff members without due consideration of the implications for the organization of legal claims against PanSALB. Statutory documentation as required by the PFMA, such as the approved Strategic Plan, approved Annual Performance Plan and quarterly reports were not submitted to the Department within the required timeframes. These documents have to date not been presented to Parliament as required.

BACKGROUND In 2014/2015, the audit opinion issued by the Auditor General (AGSA) was a disclaimer for the following reasons: There was not sufficient audit evidence to support an audit opinion. No sufficient evidence could be found on issues of administrative and operating expenditure; payables from exchange transaction; staff costs; property plant and equipment, wasteful expenditure, irregular expenditure; contingent liabilities. Cash flow statements were materially misstated. The organisation had also received a disclaimer in the 2013/14 financial year.

DISSOLUTION OF THE BOARD Recognising the shortcomings highlighted above and that the Board had not implemented the objects outlined in Section 3 of the PanSALB Act, which are, in the main, the creation of conditions for the preservation, development, promotion and respect for official and other languages in South Africa, the Minister exercised his powers in terms of Section 5 (5A) of the PanSALB and dissolved the Board with immediate effect on 12 January 2016. It is noteworthy that the Department did seek legal opinion from the State Law Advisor on the Minister’s intention to dissolve the Board of PanSALB. A legal opinion from the Senior State Law Advisor dated 31 August 2015 advised that the grounds and motivation to dissolve the Board were reasonable. Subsequently, the Minister of Arts and Culture consulted with the Minister of Finance requesting approval to appoint the Board of the National Heritage Council as the Interim Accounting Authority of PanSALB.

DISSOLUTION OF THE BOARD cont… The Board of the National Heritage Council has been appointed as a caretaker Accounting Authority to oversee the daily operations and initiate actions to stabilise and improve the organisation. A meeting was held between the Minister of Arts and Culture and the Board of the National Heritage Council on 28 January 2016 to inform and brief the Board about its appointment and status of affairs at PanSALB. The Department provided status of PanSALB and proposed areas on which the NHC Board should focus during its caretaker-ship tenure at PanSALB. The Board will meet with the PanSALB Management on a date still to be confirmed to begin its work in the organisation paying special attention on the mandate given by the Department.

PROPOSED AREAS OF FOCUS FOCUS AREA INTERVENTION Strategic Direction Finalisation and adoption of PanSALB Strategic Plan (2015-2020) and the Annual Performance Plan (2016/17) Ensuring that the organisation delivers on its mandate Governance Ensuring that all governance structures are in place (Audit and Risk Committee, HR Committee, and any other committees relevant to PanSALB) Administration Council to give guidance and direction with regards to the following: Senior Management (stability) Matter of dismissed employees Litigation matters Speedy appointment of the Chief Financial Officer (to deal with audit matters) Financial stability Restoration of staff morale

NEW DEVELOPMENTS The Department has been served with a Notice of Application wherein Madiba and others (Case No. 9034/2016) seek an order in the following terms: That the Minister’s decision to dissolve the Board of PanSALB is declared unlawful and invalid; Reviewing and setting aside of the Minister’s decision to dissolve the Board of PanSALB; and That the Minister pays the costs of the application on the scale of an attorney and own client.   The Department intends to send the matter to the State Attorney and then appoint Counsels to assist.

THANK YOU