1. Click to edit Master subtitle style Department of Arts and Culture Veliswa Baduza Chief Operations Officer Presentation to the Portfolio Committee 2011/2012 Budget – 2nd Quarter Expenditure Trend 23 November 2011

2. 11/25/11 Programmes Main Appropriation 2011/12 Roll-overs and adjustments Virements Adjusted Appropriation 2011/12 R’000 1. Administration178,75718,215196,972 2. Arts and Culture in Society 549,37931,800581,179 3. National Language Service 101,570(1,300)100,270 4. Cultural Development and International Co- operation 180,717(8,873)171,844 5. Heritage763,7023,000766,702 6.Archives, Records, Libraries and Heraldic Services 694,45225,514719,966 Total2,468,57768,356-2,536,933

3. 11/25/11 Virements and shifts per Programme Programme 1 (Addition of R18,215 million) – Shift from other Programmes iro Compensation of Employee budget (R13 million) – Additional funds received for difference in General Salary increases and original budgeted amount (R2,558 million) – Rollovers received from 2010/11 savings (Social Cohesion R3,657 million) Programme 2 (Addition of R31,800 million) – Shift to Programme 1 iro Compensation of Employee budget (R3,200 million) – Additional funds transferred from IIC iro Mzansi’s Golden Economy (R35 million) Programme 3 (Reduction of R1,3 million) – Shift to Programme 1 iro Compensation of Employee budget

4. 11/25/11 Virements and shifts per Programme Programme 4 (Reduction of R8,873 million) – Shift to Programme 1 iro Compensation of Employee budget (R6 million) – Shift to Programme 2 iro Mzansi’s Golden Economy (R35 million) – Rollovers received from 2010/11 savings (IIC R32,127 million) Programme 5 (Addition of R3 million) – Shift to Programme 1 iro Compensation of Employee budget (R500 000) – Rollovers received from 2010/11 savings (Geographical Place Names R3,5 million) Programme 6: (Addition R25,514 million) – Shift to Programme 1 iro Compensation of Employee budget (R1 million) – Rollovers received from 2010/11 savings (Conditional Grant on Community Libraries R26,614 million)

5. 11/25/11 Budget per Economic Classification Economic Classification Main Appropriation 2011/12 Roll-overs and adjustments Virements Adjusted Appropriation 2011/12 R’000 Compensation164,8042,5581,930169,292 Goods and Services228,09688,157(1,930)314,323 Provinces & Municipalities 543,42026,514569,934 Dept Agencies & Accounts (Current) 861,769 Dept Agencies & Accounts (Capital) 455,613 Non Profit Organisations 12,258 Households196,211(48,873)147,338 Machinery & Equipment 6,406 Total2,468,57768,356-2,536,933

6. 11/25/11 Virements and shifts per Economic Classification Compensation of Employees – Additional funds received for difference in General Salary increases and original budgeted amount (R2,558 million) – Funds transferred from Goods and Services for appointment of IT staff (R1,930 million) Goods and Services – Rollovers received from 2010/11 savings (R7,157 million) – Funds transferred from Investing in Culture (Households) for Mzansi Golden Economy (R81,000 million) – Funds transferred to Compensation of Employees for appointment of IT staff (R1,930 million) Provinces and Municipalities (Conditional Grant on Community Libraries) – Rollovers received from 2010/11 savings (R26,514 million) Households – Rollovers received from 2010/11 savings (R32,127 million) – Funds transferred from Investing in Culture for Mzansi Golden Economy to Goods and Services (R81,000 million)

7. 11/25/11 Expenditure per Programme Programme Adjusted Appropriation Expenditure as at 30 Sept 2011 Total Available % Spent R’000 Administration196,97297,28799,68549% Performing Arts581,179225,562355,61739% National Language Services100,27051,98648,28452% Cultural Development171,84442,358129,48625% Heritage Promotion766,702265,295501,40735% National Archives & Library Services 719,966350,484369,48249% Grand Total2,536,9331,032,9721,503,96141%

8. 11/25/11 Expenditure per Economic Classification Economic Classification Adjusted Appropriation Expenditure as at 30 Sept 2011 Total Available % Spent R’000 Compensation of Employees169,29276,57292,72045% Goods and Services314,323106,581207,74234% Provinces & Municipalities (Conditional Grant on Community Libraries) 569,934282,601287,33350% Dep. Agencies & Accounts (Current)861,769472,719389,05055% Dep. Agencies & Accounts (Capital)455,61341,261414,3529% Non Profit Organisations12,2587,1835,07559% Households147,33843,947103,39130% Capital Assets6,4062,1084,29833% Grand Total2,536,9331,032,9721,503,96141%

9. 11/25/11 Expenditure Trends Overall

10. Click to edit Master subtitle style 11/25/11 Explanation of Expenditure Trends per Economic Classification

11. 11/25/11 Compensation of Employee Expenditure Trends

12. 11/25/11 Compensation of Employees Compensation budget is under severe pressure and leaves very little room to appoint additional staff However expenditure was only at 45% at end of 2nd Quarter Department still has to incur expenditure relating to: – Performance Bonuses:R2,4 million – General Salary increases:R6 million – Pay progression:R2,3 million Notwithstanding these expenditures there is an anticipated saving of R10 million due to the fact that post that have been vacated have not been filled, pending a prioritisation exercise

13. 11/25/11 Goods and Services Expenditure Trends

14. 11/25/11 Goods and Services Expenditure is at 34% after the 2nd Quarter There are three main areas in which Goods and Services are divided namely; BudgetExpenditureAvailable R’000 Goods and Services (normal departmental activities)165,98085,26663,608 Property Management67,34321,31546,028 Mzansi Golden Economy81,000-

15. 11/25/11 Goods and Services Property management – Property Management budget relates to the reimbursement of payments made by DPW for the Municipal Accounts and Property Leases on behalf of the Department and its Public Entities – The reason for the slow spending in this area is due to the delay in the submission of monthly accounts by DPW – Given past history and current commitments it is anticipated that the budgeted amount will be spent by 31 March 2012 Mzansi Golden Economy – Approval was obtained from the Treasury to transfer R81 million from the Investing in Culture Budget to be redeployed for the purposes of the Mzansi Golden Economy (Households) – A Business Plan is to be developed which will dictate the spending areas and processes to ensure spending by 31 March 2012 Normal Departmental activities – The expenditure of the remainder of the Goods and Services Budget is pegged at 51% for the 2nd Quarter – Projected to 31 March 2012 no under or over expenditure is anticipated but expenditure will be carefully managed to avoid any possible over expenditure for the remainder of the financial year

16. 11/25/11 Goods and Services (Normal Departmental activities)

17. 11/25/11 Expenditure Trends Provinces and Municipalities (Conditional Grant on Community Libraries)

18. 11/25/11 Provinces and Municipalities (Conditional Grant on Community Libraries) In total 50% of the budget was transferred to the various Provinces in the 2nd Quarter Funds transferred to the various Provinces are based on their needs By implication spending is not managed by the Department directly In order to stimulate spending the Department is working closely with the Technical Assistance Unit of the National Treasury The Department also encourages the Provinces to increase capacity to expedite expenditure It also has regular meetings with the Provinces, collectively and individually to iron out erratic expenditure

19. 11/25/11 Expenditure Trends Departmental Agencies Accounts (Current)

20. 11/25/11 Departmental Agencies Accounts (Current) This expenditure item relates to subsidies paid to the Department’s Public Entities Expenditure is at 55% after the 2nd Quarter Payments to the Playhouses are made every trimester based on a third of their total subsidy This is the reason why the expenditure percentage is at 55% Payments to Heritage Institutions and Libraries are done monthly based on a twelfth of the total subsidy No over or under expenditure is anticipated under this economic classification

21. 11/25/11 Expenditure Trends Departmental Agencies Accounts (Capital)

22. 11/25/11 Departmental Agencies Accounts (Capital) As at the end of the 2nd Quarter only 9% of the budget had been spent This expenditure item relates to the maintenance, upgrading, and refurbishment of the Department’s Public Entities as well as for Heritage Legacy Projects The Department has for the past two financial years under spent on this budget although it improved markedly from an under spending of R351,679 million in 2009/10 to R79,787 million in 2010/11 Approximately 50% of this budget is managed by the DPW which is directly related to the infrastructure projects of the Museums and heritage institutions

23. 11/25/11 Departmental Agencies Accounts (Capital) Delivery by the DPW remains problematic and the Department will be appointing its own implementing agency such as the Independent Development Agency (IDT) to ensure the fast tracking of new projects The Department is also in the process of appointing the Technical Assistance Unit of the National Treasury to assist in the Project Management of the Capital Works Programme In addition the Department has recently received approval from the National Treasury to transfer R204 million directly to Playhouses, National Film and Video Foundation, National Library of SA and SAHRA within the current financial year Funds allocated to the Heritage Legacy projects will also be accelerated through the appointment of the IDT

24. 11/25/11 Expenditure Trends Non Profit Organisations

25. 11/25/11 Non Profit Organisations This expenditure relates to the subsidies to subsidies to BASA, Blind SA, and the Engelenburg Art Collection At the end of the 2nd Quarter expenditure is at 59% As in the case of the Playhouses, BASA receives a third of its subsidy in April No over or under expenditure is anticipated under this item

26. 11/25/11 Expenditure Trends Households

27. 11/25/11 Households This expenditure item relates to all the financial assistance projects the Department funds during the financial year and includes the Investing in Culture Project Only 30% of the total budget had been spent in the 2nd Quarter Spending on IIC has remained problematic since the Forensic Investigations The Department realises that the IIC Project is very important as it contributes to government priorities on Job Creation.

28. 11/25/11 Households It was however of the view that the redeployment of these funds to the Mzansi Golden Economy will stimulate job creation on a broader scale of arts, culture and heritage The National Treasury had therefore been approached to redirect R81 million of the IIC funds for the purposes of kick starting the Mzansi Golden Economy Strategy in relation to the Art Bank Resource, Cultural Events, Public Art Resources and Touring Ventures An amount of R56,155 million remains for the IIC in order to wrap up this programme (R41,404 million after payments to date) Regarding the remainder of the Households funding all the funds have been committed and will be spent by 31 March 2012

29. 11/25/11 Expenditure Trends Capital Assets

30. 11/25/11 Capital Assets This budget relates to the purchasing of machinery and equipment including IT equipment Although only 33% of the budget had been spent at the end of the 2nd Quarter, the Department’s Chief Information Officer has established a Procurement Plan for the purchasing of IT equipment and upgrading of systems for all Programmes Consequently no over or under expenditure is expected under this item

31. Click to edit Master subtitle style 11/25/11 Thank you