The Theatre and Dance Alliance (TADA), launched at the end of March as a representative structure to advocate the interests of the theatre and dance sector, has released its report into the mismanagement of the Presidential Employment Stimulus Programme (PESP) funding by the National Arts Council (NAC).
R300 million was made available by National Treasury to the NAC in October 2020, and after retaining R15M for administration, the NAC had R285M to distribute to the arts sector to retain jobs and to create new work opportunities. These funds were to be allocated and spent by 31 March 2021, a mere five months to support and/or retain 17,000 jobs. The four-year term of the previous Council of the NAC ended on 31 December 2020 and a new Council took office on 1 January 2021.
By the end of 2020, the previous Council knew that they had over-approved the available budget by hundreds of millions of rand, and there were still many more eligible applicants to consider. The new Council, with little experience and no induction by the Department of Sport, Arts and Culture, unilaterally decided to change contracts awarded to numerous successful applicants and to slash the amounts of funding awarded to them, in order that all eligible applicants receive PESP funding.
The National Arts Festival – one of the applicants adversely affected by these decisions – challenged the NAC in court and the Southern Gauteng High Court found in their favour, asserting that the NAC had acted illegally in unilaterally changing the original contracts, and ordering the NAC to pay the original amounts and to cover the legal costs of the NAC. (The NAC has indicated its intention to appeal this judgment).
The Minister of Sport, Arts and Culture announced that a forensic investigation would take place and the National Arts Council suspended its CEO and CFO. Because ‘forensic investigations’ seldom point fingers at the institutions that commission them, TADA embarked on its own investigation to look at all the factors that contributed to this debacle which has directly affected many of TADA’s members negatively.
The key findings of the report are:
1. The short time (5 months) allocated to realise the ambitious aims of the PESP funding was hopelessly unrealistic so that the project was set up for failure from the start.
2. The timing of the project i.e. the times at which the project was to be implemented, were the worst for a project of this ambition and scale, and its unrealistic time frameworks because
2.1 The
PESP funding was intended to address the impact of COVID-19 on the creative
sector, but it was also done in the midst of the pandemic, and at the rise of
the second wave of infections which forced a lockdown that would impact on the
ability of many successful applicants to deliver on their projects.
2.2 The
end-of-year holiday season was not the optimum time for planning and
implementing job retention and job creation projects.
2.3 The
appointment of the new National Arts Council and the decision that they would
take office on 1 January 2021 in the midst of the PESP funding crisis, without
an induction due to COVID-19, is a most serious reflection of poor judgement on
the part of the Minister of Sport, Arts and Culture.
3. A number of internal issues within the
NAC such as the contracting of inexperienced project managers to assist with
the PESP project; the lack of training of new staff; inadequate checking of
compliance; the inadequate deployment of experienced staff to the PESP project;
problems with the NAC’s Grant Management System; poor internal communication
between panels and between the panels, management and Exco; adjudication panels
not being told their budgets so that they approved applicants as if there were
a blank cheque; management leading the Council to believe that there would be
additional funding from DSAC – all these contributed to the over-approval
and mismanagement of the PESP funding.
4. The focus on jobs - while understandable
and necessary in the context of COVID-19’s devastating impact on the creative
sector - was outside of the mandate, capacity and expertise of the National
Arts Council and represented a misunderstanding of the nature of the sector on
the part of government.
5. Members of the NAC – both the current
NAC and the previous NAC - benefited illegally from the PESP funding.
6. The new Council, appointed on 1 January
2021, while we have sympathy for their inheritance of a poisoned chalice, has
acted with dishonesty, with arrogance and insensitivity towards the creative
sector, and has lost the respect of the sector.
In the light of these findings, TADA’s
recommendations – in short – are:
1. That the relevant Portfolio Committees,
Parliament as a whole and the Auditor General investigate and hold accountable
the President, the Department of Sport, Arts and Culture and the National
Treasury in particular for the delayed roll out of the PESP funding and the
unrealistic time frameworks it imposed on the NAC
2. That the Minister of Sport, Arts and
Culture, Nathi Mthethwa, be fired for his serious misjudgement in not extending
the life of the previous Council for three months till the end of the PESP
Project on 31 March 2021, and for compromising the new National Arts Council.
3. That the new National Arts Council,
having lost all credibility with the arts sector and having shown poor judgment
as reflected in its loss in the Southern Gauteng High Court, be terminated
forthwith and its members banned from serving on the Council for at least four
years; that an administrator appointed by National Treasury manages its affairs
until a new Minister is appointed who will oversee the establishment of a new
Council.
4. That the previous Council and its
Executive Committee in particular, its Audit and Risk Committee and its senior
Management (the CEO and CFO) be investigated transparently for their roles in
the mismanagement, including the over-approval of the PESP funding, and that
appropriate disciplinary action be taken against them.
5. That current and previous Council
members who benefited illegally from the PESP funding be charged formally so
that a court can decide whether the National Arts Council Act permits Council
members or the organisations in which they are involved, to benefit from NAC
funding during their tenures, and that should a court determine that NAC
members have benefited illegally, that those member and their organisations be
barred from receiving funding from the NAC in future for at least the time that
they served on the Council
COVID-19 has had a devastating impact on
the theatre and dance sector. The PESP
funding was supposed to inject much-needed assistance into the sector, but
instead, its mismanagement by the National Arts Council has further compromised
many already-vulnerable players.
For this, there needs to swift and
appropriate disciplinary action against those responsible in order to restore
the credibility of the state institutions that should serve the interests of
the creative sector.
The full report is available on TADA’s
website www.tada.org.za
For further information, contact Jaco van
Rensburg, TADA’s Secretary General at jaco@tada.org.za
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