1. Professor Alfred Nevhutanda (Chairperson) & Professor Vevek Ram (CEO) October 2011 Presentation to the Select Committee on Trade and International Relations

2. Agenda Overview of – the National Lottery and its components – the National Lotteries Board and its functions – The current funding model Criteria used to Disburse funds Achievements and Challenges

3. The National Lotteries Act Establishes the National Lotteries Board & Specifies its Functions Sets up the process for awarding the Licence Establishes the National Lottery Distribution Trust Fund (NLDTF) Sets up the Distributing Agencies & the process of Distribution Sets up process for Monitoring & Regulating – Private & Society Lotteries – Promotional Competitions

4. Functions of the Board Advise the Minister – on the issuing of Licence/s – on the percentages allocated to good causes – on the efficacy of Legislation related to Lotteries Protection of Players Maximize proceeds to good causes Administer NLDTF Monitor & Regulate Other Lotteries Manage the Central Applications Office

5. GIDANI NLB NLDTF DA Charities DA Art & Culture DA Sport DA RDP DA Misc 28% 45% 22% 5% 0% Weekly transfer Central Applications Office REGULATOR Monitors activities through Licence NGOs CBOs Applications Structure Operates the National Lottery Payments

6. The Current Funding Model

7. NLB DA Charities DA Art & Culture DA Sport Central Applications Office NGOs CBOs Advertised Call for Applications Application Process Payment NLDTF Grant Agreement Applications Forms

8. Internal Process

9. The Current Funding Criteria

10. Who is eligible for funding? Non-Profit Organisations (NPOs) Non-Governmental Organisations (NGOs) –Public Benefit Trusts –Section-21 Companies Municipalities and Parastatal Bodies Institutions of Higher Learning Public Schools Museums, Libraries, National Parks and Institutions (Est. through an Act of Parliament) Provincial Academies of Sport National Sports Federations Affiliates to National Sports Federations Sports Bodies Recreational Clubs

11. What are the application requirements?  Prescribed Application Form (2010/1)  Registration Certificate / Proof of Affiliation  Signed & dated Constitution / Founding Documents  New applicants: Two most recent and consecutive sets of Annual Financial Statements - signed & dated by a registered accounting officer  Previously funded applicants: The most recent years’ Audited Financial Statements - signed & dated by an auditor  Signed & dated Auditor’s or Accounting Officer’s Report  Detailed project Business/Implementation Plan  Detailed Project Budget  Project Motivation

12. NEED FEASIBILITY & SUSTAINABILITY IMPACT FINANCE BUDGET GOVERNANCE PARTNERSHIP HISTORY INNOVATION SPREAD FUNDING DECISION Funding Criteria

13. Current Funding Focus

14. Charities Focus Capacity Building Poverty Alleviation Community and Residential Programmes for – children – youth – women – the aged – persons with disabilities – people affected by / infected with HIV/AIDS – the terminally ill – drug abuse

15. Charities Focus (new) at least 50% to be spent on Expansion of home based care services through training and Infrastructure development for the aged, the sick, vulnerable as well as the orphaned children, disabled and rehabilitation homes Provision of educational facilities designed to enhance literacy through early childhood education, adult literacy, vocational training and mentoring for skills development that include the disabled people

16. Arts, Culture & Heritage Focus Major Projects of National Significance Rural Grants for projects designed to serve the community Creative Development Grants Festivals Film Production and Distribution Public Art Heritage: Architectural, Archaeological, Historical and Indigenous Knowledge Systems. Environment

17. Arts, Culture & Heritage Focus (new) Support for causes designed to protect and promote traditional knowledge and cultural expressions Promotional work of arts and craft produced by groups of disabled people and women Development and preservation of cultural heritage sites for revenue generation including tourism attraction, and economic viability for the community at least 50% to be spent on

18. Sports Focus Capacity building for sports people, managers, administrators and coaches. Equipment and kit for teams and clubs. Upgrading of existing sporting facilities (incl. schools) Funding of preparation for and attendance at Major events

19. Sports Focus Development of sport and recreational facilities in the rural areas for talent development and increase accessibility to such facilities for all including disabled persons. at least 50% to be spent on

20. Achievements

21. NLDTF Revenue & Disbursement 1 st April 2000 to 31 st March 2011(R million) Revenue from Lottery Operator 12,301 Interest on investments 3,633 Total revenue 15,934 Cash disbursed since inception 10,962 Spent on administration (2.4%) 336 Funds on hand 4,819 Less amounts already committed as at 31 March 2011 3,178 Cash available for allocations in 2011/2012 1,769

22. NLDTF Allocations 1 st April 2000 to 31 st March 2011(R million) YearArtsCharitiesSportMiscTotals 200144 20024810372223 200317134421110736 2004375613252171257 200531050438911204 200622962641091274 200723542811834815 2008170380422972 200926356559711426 2010123114026491273409 201176716616651193212 Totals37996626378532214532

23. NLDTF Allocations Provincial Spread %

24. NLDTF budget 2011/2012 (Rm) ArtsCharitiesSportMiscTotals Budget496796389881769 Allocations18239325032857 Available31440313956912

25. Challenges

26. Challenges with current funding Model Low Impact Inflexible Absence of Targeted approach High Risk Reactive Unresponsive to National Priorities Inequitable

27. Application Challenges High Rate of Declines Incomplete documentation Unaudited financial statements Unregistered auditors Documents not in the names of applicant… Applications outside the mandate of DA (wrong sector or non fundable items)

28. Project Management Challenges Lack of good cooperate governance Grant Agreements not properly signed Grant Agreements not being read Unauthorized deviations. Incorrect, incomplete or unsatisfactory Progress Reports Improper record keeping Delays in submitting requested additional information NLDTF recognition

29. Other Challenges Fraud Misrepresentation Little or No Impact Dependency Conflict of Interests

30. Other Challenges Fraud Misrepresentation Little or No Impact Dependency Conflict of Interests

31. Interventions Medium Term – Amendments to the Act including Funding Model – Decentralized operation Short term – Board’s Consultative Process – Operational fixes – Formalized relationship with Distributing Agencies – Systematic Adjudication – Conflict of interest & code of conduct management – Focused calls for applications

32. Consultative Process In order to arrive at the most appropriate model for the South African Context, the Board held consultative workshops in all provinces as well as a National Indaba Attended by 18000 beneficiary organizations in provinces Attended by 1500 beneficiary organizations at National Indaba Robust Discussion on Current Model Consensus on proposed flexible model Consensus on funding Policy Consensus on simplification of process and requirements Consensus on elimination of dependency Consensus on elimination of Fraud and Misrepresentation

33. Questions…?