Forensic probe ordered into Arts Council’s R300m funding

THE National Arts Council has appointed Mazars Forensic Services to probe allegations of mismanagement in the disbursement of the R300 million Presidential Employment Stimulus Programme (PESP).

This was revealed by the director-general of the Sport, Arts and Culture Department Vusumuzi Mkhize when he briefed the portfolio committee on sport, arts and culture.

The briefing was a sequel to the committee’s oversight visit to the National Arts Council (NAC) a few months ago amid a sit-in by artists who complained about the handling of the PESP funds by the NAC.

Mkhize said Mazars Forensic Services was appointed on June 25 to undertake the investigation after a tender process closed on June 3 and an adjudication process followed.

“They were briefed on June 28 and commenced with work to ensure the allegations relating to mismanagement of PSEP are investigated and brought to conclusion to satisfy everybody if there was mismanagement or not,” he said.

Mkhize also said Minister Nathi Mthethwa had left it to the council to deal with its fiduciary duties.

The Special Investigating Unit (SIU) had indicated it could not investigate the PESP as it fell outside the presidential proclamation but it was ready to assist where necessary, he said.

If its services such as secondment of expert resources were required, that would be at a cost to the NAC or the department, Mkhize said. “We allowed the council to do its work.”

Mkhize said the NAC was also saddled with litigation where beneficiaries demanded contracts for PESP payments to be based on the original offers made to them prior to the revision of the amounts due to budget availability.

There were 22 letters of demand they received from beneficiaries’ lawyers to honour original contracts to the value of R34 135 117, he said.

“Some beneficiaries have not signed their revised grant notification letters and some have not yet been paid. The NAC’s counsel has sent response letters to some of the complainants.”

Mkhize said one matter that had been in court involved the National Arts Festival which won a court ruling that it be paid according to the original contract.

The South Gauteng High Court ordered the NAC to pay the remaining R4.6 million of the R8 million grant to the National Arts Festival.

Mkhize said the NAC has decided to take the judgment on appeal and had instructed its counsel in that regard.

“That matter is at appeal level.” Another demand by Schoeman Smit attorneys demanding payments for its clients would not be paid pending the appeal application, he said.

Mkhize noted with concern that the NAC funds were diverted away from the core business of supporting artists by the court cases.

“The NAC has spent R860 644 on legal fees. It is estimated additional costs of R300 000 to R500 000 will be incurred,” he said.

Mkhize said the court action could be avoided if people were reasonable and understood there was a limited budget.

“There is a desire to demand more, which is unfortunate.”

He charged that the National Arts Festival was not only funded through PSEP but also through the department’s funds and the Eastern Cape government.

“So for them not to understand the challenges is unfortunate. There is a limited budget from the same department.

“We hope reason will prevail.” Mkhize also said a number of applicants who were rejected in the PESP programme lodged their appeal to the department.

A total of 113 appeals have been received and recorded to date.

“These appeals have been captured and will be referred to the appeals committee. The department will then engage with the appeals committee to expedite the process of reviewing these appeals,” he said, adding the appeals committee would submit its report to Mthethwa for consideration and response.