DEPARTMENT OF ARTS AND CULTURE 8/28/2018 DAC OVERVIEW ON THE STATE OF GOVERNANCE OF THE NATIONAL ARTS COUNCIL Presented by: Act Director-General 07 February 2017

PRESENTATION OUTLINE

MANDATE

PERFORMANCE AS AT 30 SEPTEMBER 2016 National Arts Council has achieved all its 20 planned targets for the second quarter of the 2016/17 financial year. This implies 100% achievement of targets as at 30 September 2016.

THREE YEAR PERFORMANCE OVERVIEW 2013/14 2014/15 2015/16 Achieved 76% 87% 100% Not achieved 24% 13% -

THREE YEAR INCOME AND EXPENDITURE TRENDS 2013/14 2014/15 2015/16 R’000 Income 95,650 96,084 98,983 Government Grant 87,554 91,865 96,089 Other Income 8,096 4,219 2,894 Expenditure (103,714) (99,411) (102,567) Deficit (8,064) (3,327) (3,584)

EXPLANATION OF DEFICIT FROM OPERATIONS The deficit is attributable to the accounting method that is applied by the National Arts Council. Due to the nature of the projects that are funded by the National Arts Council, the entity defrays the previous years and current year expenses from the current year allocation which results in a deficit.

THREE YEAR AUDIT OUTCOMES 2013/14 2014/15 2015/16 Audit Outcome Qualified Clean

STATUS OF GOVERNANCE AT NAC

MANAGEMENT TEAM The National Arts Council team is operating under the guidance of the Chief Executive Officer (CEO). The CEO is assisted by a team of five Managers who report directly to her. The NAC has also appointed a Chief Financial Officer to administer its financial affairs . The National Arts Council comprises of 34 employees.

COUNCIL The Minister appointed the Council of the National Arts Council on 22 December 2016. Appointment letters were sent to successful candidates. 8 out of 9 candidates accepted their appointment. One member from the outgoing Council indicated that he is not available to serve on the new Council of the National Arts Council (for purpose of continuity). The induction of the newly appointed Council of the National Arts Council is scheduled to take place in February 2017.

SELECTED GOVERNANCE STRUCTURES AND MEETINGS HELD 2014/15 2015/16 2016/17 Number of Council members 17 18 Number of Council meetings 6 2 Number of Council committee meetings 4 8 3 Attendance rate of Council meetings 90% 80% 95% Number of Audit Committee meetings 5 Number of Management meetings Number of Staff meetings 7

LEGISLATIVE CONSTRAINTS National Arts Council Act provides for a huge number of Council members and the Council subcommittees. This is threatening the ability of the National Arts Council to sustain its governance structures. The Act states that the grant received from the Department of Arts and Culture must be divided into the ratio of 75:25 for both disbursements and administration respectively. The above provision implies that more money is available for disbursements and very limited funding is provided for the day to day operations of the National Arts Council.

OTHER ISSUES The Department has noted a number of queries received by the National Arts Council from print media with regards to: Allegations of maladministration pertaining to funding of Flagship projects. Salary increment of the Chief Executive Officer and Chief Financial Officer. A formal response on the above allegations will be furnished as requested by the Portfolio Committee.

DEPARTMENT OF ARTS AND CULTURE 8/28/2018 THANK YOU