Business Day

Funding shows National Arts Council in no position to disburse grants

The body has made a hash of R300m it received from the Presidenti­al Employment Stimulus Programme

- Struan Douglas ● Douglas is an author and cultural activist.

In November 2020, the Presidenti­al Employment Stimulus Programme was announced with the promise to inject R500bn in grants across the country to promote innovation and reignite job opportunit­ies. Though the creative cultural industries contribute R75.3bn to SA’s annual GDP and employ 1.3-million people — 7% of total employment — they were allocated only R1.2bn.

Culture is at the heart of SA society and has been a fountain of inspiratio­n in these difficult times, yet the sector is among the worst affected by the lockdowns. The presidenti­al stimulus grants were therefore crucial, yet due to nonspendin­g, the Treasury took back half the money. The balance was disbursed via the department of sports, arts & culture to its funding agency’s National Film and Video Foundation and the National Arts Council (NAC).

The NAC received R300m and allocated this to various projects, completing the process of signing contracts and issuing grant letters by the end of January 2021. Many arts organisati­ons started their rollout of projects, but these were halted when the NAC breached the contracts through non-payment.

The NAC held an administra­tive meeting on February 24 to explain. In the meeting, board “leader” Sipho Sithole announced that “we must spread this little budget graciously so that everybody adjudicate­d has got bread on the table”.

Yet the board had decided to ignore the government’s Batho Pele principles of consultati­on and transparen­cy, and unilateral­ly reduce payments on grants that had already been approved.

The justificat­ion was the awarding of an additional 761 grants, which the council said would create a further 7,000 jobs. This was described by Sibongile Mngoma, founder of the Im4theArts civic movement and president of the new ground-up federation the SA United Cultural and Creative Industries Federation, as “creating more problems to solve a problem”.

To sustain these additional grants, the board had decided to reduce funding by 60% for the 613 existing grants, which it still expected to create the originally forecast 14,000 jobs. Arts organisati­ons immediatel­y picked up the inequity and lack of logic in this decision and suggested that the best solution would be to halt additional funded projects to ensure no further grants were promised until the NAC’s existing obligation­s had been met.

However, Sithole responded by offering arts organisati­ons two choices: “sign the new contracts” or “take us to court”. In the same meeting, NAC CEO Rosemary Mangope said: “As we entered this initiative we knew that we didn’t have the capacity but we also asked ourselves the question, if not us, who?”

Mngoma described Mangope’s response as self-serving. “Clearly, if you don’t know what to do with the money then you don’t deserve it.

“We are not given money to flaunt it. We are given money to use for the benefit of everyone,” she said.

It did not go unnoticed that Sithole had been chief of strategy at the Passenger Rail Agency of SA, where he was among a group of employees accused of “improper, corrupt, fruitless and wasteful expenditur­e”, as was reported by the SABC at the time. Sithole received a 12-month suspended sanction after being found guilty of lesser charges related to maladminis­tration and contraveni­ng company policy.

To date the NAC has not responded to questions, but on February 28 it released a statement saying Mangope and CFO Dumisani Dlamini had been suspended. For those in the know, this was no surprise. Mangope has been at the centre of the scandal since being appointed CEO in 2013.

In April 2018, the Gobodo forensic investigat­ion into alleged conflict of interest and irregular funding awards focused on irregular awards to members of the Mangope and Kerzner families between 2013 and 2016. The report resulted in a disciplina­ry hearing in 2018 where Mangope faced 13 charges of gross negligence.

This process was, however, criticised as ineffectua­l as it failed to analyse the mechanism that sustained the irregular funding — an “expired projects and surplus grants” scheme that was signed into NAC policy on May 15 2015. This policy allows for the NAC to make applicatio­ns on behalf of beneficiar­ies without their consent, and for funds to be withdrawn from organisati­ons for various reasons and repurposed for “other strategic NAC initiative­s”.

A driving force behind the exposé of the abuse of this policy has been the SA Roadies Associatio­n, which discovered in 2015 that the NAC CEO had submitted an applicatio­n to the executive committee for partnershi­p funding using the associatio­n’s name without its knowledge or consent. The roadies complained to the ministries of arts & culture and finance, the Treasury, the auditor-general and the public protector in November 2017. The public protector issued a report on June 15 2020 that found “the implementa­tion of the policy is susceptibl­e to manipulati­on, since some employees could recommend their relatives, families and/or cronies to be funded through the policy” and that it violated the constituti­on as well as the Public Finance Management Act, among other things.

In July 2020, the roadies filed a corruption and fraud complaint against Mangope with the Hawks.

The inability of the governance structures in SA to respond to the ongoing problems at the NAC has shown that the problem is far greater than the council. The sports, arts & culture minister, auditor-general and the Treasury should all be called to order for what has occurred at the NAC on their watch.

Arts organisati­ons could play a greater role in other department­s such as trade & industry, education, labour and small business. The Presidenti­al Employment Stimulus Programme may be better served releasing the remaining R600m for arts through these department­s.

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