DEPARTMENT of ARTS and CULTURE

1. DEPARTMENT of ARTS and CULTURE MONITORING OF PUBLIC ENTITIES

2. Department of Arts and Culture LEGISLATIVE MANDATE • Public Finance Management Act and Regulations • Individual entities founding legislation • National Treasury Practice Notes

3. Department of Arts and Culture GUIDELINES • National Treasury guidelines • National Treasury Practice notes • King II report

4. 1. BUDGET PHASE N. TABLE ANNUAL REPORT To National Assembly 30 September 2008 M. ANNUAL REPORT To AG, Minister & Treasury 31 August 2008 L. SUBMIT FINAL AFS To AG Latest 15 August 2008 K. AC MEETING TO EVALUATE AFS Latest 8 August 2008 J. AUDIT COMPLETE & REPORT TO AA 31 July 2008 I. SUBMIT FINAL AUDITED CONS AFS To Treasury 30 June 2008 H.SUBMIT DRAFT CONS AFS To Treasury 31 May 2008 • BUDGET 2007/8 • To Minister • 1 October 2006 • B. DRAFT STRATEGIC PLAN • 2007/8-2009/10 • To Minister • 1 October 2006 • C. FINAL STRATEGIC PLAN • To Minister • 1 April 2007 • D. FINANCIAL YEAR STARTS • 1 April 2007 • E.QUARTERLY REPORTS • 2007/08 • To Department • 30 Days after end of Quarter • F. FINANCIAL YEAR ENDS • 31 March 2008 BUDGET & REPORTING CYCLE 2007/2008 2 REPORTING PHASE G.SUBMIT AFS FOR AUDIT To AG 31 May 2008

5. Department of Arts and Culture MONITORING MECHANISMS • Annual strategic plans-draft and final • Estimates of National Expenditure (ENE) • PFMA quarterly reports • Annual reports

6. Department of Arts and Culture ANNUAL STRATEGIC PLANS • Compilation of Framework Annexure A • Ensure receipt of Strategic Plans • Draft by 1October • Final by 1April • Clarify areas of concern • Submission to Minister

7. Inform Public Entities of Budget allocations Request ENE information Co-ordinate and evaluate ENE detail Follow up on areas of concern Forward corrected version to National Treasury Annexure B Department of Arts and Culture ESTIMATES OF NATIONAL EXPENDITURE (ENE)

8. Department of Arts and Culture Quarterly Reports • Income and Expenditure • PFMA compliance • Performance information

9. Creation of Reporting Template Year to date financial performance against budget submitted Financial projection for the balance of the financial year Narration iro variances Statement of Financial Position with notes Expenditure report iro Staff costs List of Investments Creation of monitoring template Follow up on areas of concern eg.PACOFS Annexure C Annexure D Annexure E Department of Arts and Culture Quarterly Income and Expenditure Report

10. Department of Arts and Culture Quarterly PFMA compliance • Creation of Reporting Templates • General PFMA Reporting template (NT) Annexure F • Internal Control Questionnaire template Annexure G • Asset Management Reporting Questionnaire Annexure H • Supply Chain Management Reporting QuestionnaireAnnexure IJ • Receiptof reports • Advise Public Entities iro. compliance • Follow up on areas of non-compliance

11. Department of Arts and Culture Quarterly Performance Information • Creation of Template for quarterly Reporting Annexure K • Ensure receipt of reports • Follow up on areas of concern

12. Department of Arts and Culture ANNUAL REPORT PROCESS

13. Department of Arts and Culture GENERAL ISSUES PERTAINING TO ANNUAL REPORTS • Ensure Public Entities are informed of the latest guidelines • Ensure timeous receipt of Annual Reports (30 September ) • Managing tabling in Parliament • Notification of late submission to Speaker of Parliament

14. Monitor liquidity Monitor solvency Check cash flow Surplus/(Deficit) Disclosure of accounting policies Update database of financial information Annexure L Department of Arts and Culture ANNUAL FINANCIAL STATEMENTS

15. Audit outcome-Clean, EOM, Qualified, Adverse Analysis of AG report Comparison to previous years Sight of Auditor’s management letter Intervene to ensure that “wrongful issues are not reported Request reports from Public Entities to explain Audit Report issues and plan of action to eliminate in future Visit PE with AG to discuss Audit Report Update database of Audit Report history Inform Minister of status of Audit Reports Annexure M Annexure N Annexure O Department of Arts and Culture AUDIT REPORTS

16. Assess compliance with Treasury guideline Is it “User friendly?” Value for Money Judge general appearance Compile Score sheet and prepare letters from Minister to ensure future compliance Annexure PQ Department of Arts and Culture ANNUAL REPORTS

17. Department of Arts and Culture Other oversight/assistance functions

18. Department of Arts and Culture Establishment of Guidelines • Delegation of Authority Guideline Annexure R • Materiality and Significance framework Annexure S • Self assessment questionnaire for Council Members Annexure T • Supply Chain Management Manual • Purchase and distribution of “Toolkit for Audit Committee members” • Database of various policies • Performance Reporting for 2006/07 Annexure U

19. Department of Arts and Culture Training • 2 Workshops on Compliance and Audit Report issues • Workshop for Council Members in May 2005 on • King II Report on Corporate Governance • PFMA • Annual Reporting • Code of Ethics • Fraud risk indicators • Risk Management • How officials get into trouble

20. Department of Arts and Culture Training (cont.) • Multidisciplinary Workshops • General Policy and Legal challenges • Impact of legislation on Museums • Relationship between National and Provincial Museums • Supply Chain Management • Financial and Human Resource Management • Legal and Administrative compliance • 2 Workshops on the Extended Public Works Programme • 2 Workshops on Supply Chain Management System

21. Department of Arts and Culture General communication • Daily communication with Public Entities • Visits to Public Entities • Visits by Public Entities to Department • Close cooperation with AG Office • Visits with AG office to Public Entities • Liaising with National Treasury • Informing PE of any new directive/guidelines from the National Treasury or any other source • Instruction by Minister to introduce Performance Management System within the institution

22. Department of Arts and Culture Budgeting issues • Additional funding in 2004/05 to establish Internal Audit and Audit Committee Functions • Substantial increases in 2006/07 to increase capacity to deal with compliance issues • R35 million allocated to museums since 2003/04 for “transformation” purposes • Substantial funds allocated to Security of Collections at museums from 2007/08 • 2007/08 R39 million • 2008/09 R43 million • 2009/10 R80 million

23. Department of Arts and Culture Human Resource Issues • Conducting of Job Evaluations at • NFI • National Library of SA • Afrikaanse Taalmuseum • Voortrekker Museum • Natal Museum

24. Department of Arts and Culture Legal Issues • Continuous support to Public Entities with regard to • Identifying and managing risks • Legal advice in general

25. Department of Arts and Culture Past Interventions by the Department • Dismissal of Board of the State Theatre and appointment of an Administrator • Appointment of an Interim Administrator at the NFI • Appointment of an Interim Financial Manager at the National Library • Appointment of an Interim Financial Manager at the Windybrow • Additional financial assistance to the Market Theatre • Financial assistance to the Voortrekker Museum to appoint a financial expert for an interim period • Dismissal of NAC Council by Minister • Withholding of subsidies to Public Entities based on 2004/05 Audit Reports until “Plan of Action” to Audit issues had been received • Appointment of an Advisor at the NAC to deal with issues (Audit Report related as well as Strategic) • Alignment of Councils term of Office to coincide with Budget and Reporting cycle • Declaring Playhouses as Cultural Institutions in terms of the Cultural Institutions Act to enhance accountability (Previously Section 21 Companies)

26. Department of Arts and Culture Current and new initiatives • Induction of newly appointed Councils • Introduction of Service Level Agreements with newly appointed Councils • Investigation into establishment of Shared Service Centres • Introduction of Internships • Legislative and policy review • Conducting of a Finance Function Diagnostic at; • NFI • RIM • Iziko • Establishment of Chief Directorate: Institutional Management and extension of staff establishment • Performance Management and Reporting system

27. Department of Arts and Culture Oversight obligations Chapter 9 of “Guide for Accounting Officers on the PFMA” on transfer payments directs; “In assessing the degree of accountability of the Accounting Officer of the Department transferring funds to a Public Entity, if a receiving entity falls under the scope of the Auditor General then the transferring Accounting Officer is not expected to maintain microcontrol once these transfers are effected as the receiving authority will be accountable for the actual spending. This does not absolve the transferring accounting officer from putting into place a basic monitoring mechanism ”

28. Department of Arts and Culture Outcomes

29. Department of Arts and Culture Outcomes (cont.)

30. Department of Arts and Culture Irregular and Fruitless expenditure • 2005/06 • Playhouse Company: R490 300 relating request for payment of Service Provider by KZN Province • Nelson Mandela Museum: R308 000 relating to extension of Contract for security services • Both of the above was condoned by the National Treasury • 2003/04 War Museum of the Boer Republics: After investigation it was revealed that the AG Office misinterpreted relevant legislation and NT condoned the expenditure • No fruitless expenditure has been reported at the Public Entities since promulgation of the PFMA

31. Department of Arts and Culture THANK YOU