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Name: Mphumzi Mdekazi

Name: Mphumzi Mdekazi. Researcher: Portfolio Committee on Sport and Recreation Topic: Budget of SRSA. Themes. Legislative Framework Entities/Agencies Historical Program trends Historical Budget trends Current Budget analysis (red flags) Analysis per program Overview on the entities

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Name: Mphumzi Mdekazi

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  1. Name: MphumziMdekazi Researcher: Portfolio Committee on Sport and Recreation Topic: Budget of SRSA

  2. Themes • Legislative Framework • Entities/Agencies • Historical Program trends • Historical Budget trends • Current Budget analysis (red flags) • Analysis per program • Overview on the entities • Key issues for Parliamentary consideration

  3. Legislation and policies Governing SRSA • Sport and Recreation Amendment Act of 2007 • PFMA • Division of Revenue Act (DoRA) • Safety at Sports and Recreation Events Act, 2010 • The Lotteries Act, 1997 (Act No 57 of 1997) • National Sport and Recreation Plan • 2012 Indaba resolutions • BSA Act 11 of 2001 • South African Institute for Drug-Free Sport Amendment Act.

  4. Legislation Cont • United Nations Charter of Rights • Recognition of Sport and Recreation Bodies Regulations 2010 • Bidding and Hosting of International Sport and Recreational Events Regulations, 2010 • Merchandise Marks Act of 1941 • Revenue Laws Amendment Act 20 of 2006 • Financial Management of Parliament Act • Bi-lateral Agreements (IBSA, BRICS)?

  5. Sport and Recreation Entities • Boxing South Africa, governed by Boxing Act of Parliament • SAID (South African Institute for Drug Free Sport) • Love life • Lottery

  6. Departmental Programs (Old) • Administration • Sport Support Services • Mass Participation • International Relations and Events • Facilities Coordination

  7. Historical SRSA Budget Analysis

  8. Succinct Historical Trends • It must be noted that the 2011/12 budget has limply been divided into five programs, which doesn’t resemble the same as the previous year 2010/11, which had 2010 FIFA Unit. • Expenditure spending focus over the MTEF period was expected to continue promoting mass participation, mainly through the mass sport and recreation participation grant, and on the development of sport at various levels by supporting school sport, club development and sport federations, including hubs.

  9. Succinct Historical Trends Cont • Expenditure was expected to increase from R820,8 million in 2011/ 2012 to R848,4 million in 2012/2013. The additional allocations was due to improved conditions of service, improved conditions of service for Boxing South Africa and the South African Institute for Drug Free Sport, increased operational cost for boxing South Africa, internal audit functions, the debt of Boxing South Africa, including the spending on “consultants” and preparation of athletes for the Olympics and Paralympics.

  10. Succinct Historical Trends Cont • Over the MTEF period of 2011/12, expenditure was projected to increase to R 967.6 million over the medium term, at an annual rate of 5.8 per cent, mainly due to inflationary increases in municipal and office accommodation charges, transfers to sport federations and mass participation sport development grant. The Department had an establishment of 206 funded posts. The number of filled posts decreased from 180 in 2008/09 to 171 in 2011/12 due to the closing of the 2010 FIFA World Cup unit in 2010/ 11. The Department had plans to fill all funded posts in 2012/2013 and would maintain a full staff complement over the medium term.

  11. Succinct Analysis Per Program between 2008/09-2011/12 • ADMINISTRATION: • The overall essence of this program was and is still to provide overall and centralised support services. This means that administering, guiding and managing Sport and Recreation is the core business of this programme. • Expenditure on compensation of employees also increased from R37,3 million in 2008/09 to R56,1 million in 2011/12.

  12. Succinct Analysis Per Program between 2008/09-2011/12 Cont • Sport Support Services • This is one of the key programmes of the Department with a focus on increasing participation through providing financial support, strengthening high performance sport, promoting sport at a community level and empowering sport human resources through the training of coaches, administrators and technical officials.

  13. Succinct Analysis Per Program between 2008/09-2011/12 Cont • Sport Support Services • Key sub-programmes included: Programme management, Sport and recreation Service providers, Club development, education and scientific support. • The budget for this programme was expected to increase from R162 million in 2011/12 to R228, 3 million in 2014/15 due to unspecified additional allocations to Boxing South Africa and the increased number of sports federations supported in 2011/12 to 2014/15. Also in preparation for the 2012 Olympics and the Paralympics expenditure for the Scientific Sub-programme increased.

  14. Succinct Analysis Per Program between 2008/09-2011/12 Cont • Sport Support Services • Support for sporting bodies also increases during this period. The programme makes transfers to Lovelife, South African Sports Confederation & Olympic Committee, Boxing South Africa and the South African Institute for Drug Free Sport. Expenditure for consultants increased during this period in preparation for the 2012 Olympics.

  15. Succinct Analysis Per Program between 2008/09-2011/12 • Mass Participation • The Mass Participation programme has been the largest programme of the Department and promotes sustainable participation of people previously excluded, strengthening of school sport through the training of coaches, developing school sports by monitoring service level agreements with federations and the identification of talent.

  16. Succinct Analysis Per Program between 2008/09-2011/12 Cont • Mass Participation • Key sub-programmes include: programme management, Community Mass Participation and School Sport. The Community Mass Participation Sub-programme is the largest component of this Programme and is expected to increase over the medium term.

  17. Succinct Analysis Per Program between 2008/09-2011/12 Cont • Mass Participation • Participants in Sports and Recreation South Africa events increased from 12 165 participants in 2009/10 to 28 000 in 2011/12. The budget for this programme has been projected to increased from R500, 8 million in 2011/12 to R584, 3 million in 2014/15. • Mass participation is a programme that is meant to promote programmes by focusing on increasing number of participants in sport and recreation.

  18. Succinct Analysis Per Program between 2008/09-2011/12 • International liaison and events • This programme is meant to negotiate government-government agreements and manages the ensuing programmes of cooperation. It also manages international exchange programmes, supports travel arrangements for sports people, and encourages the staging of major sports events in South Africa and the promotion of sports tourism.

  19. Succinct Analysis Per Program between 2008/09-2011/12 Cont • International liaison and events • Expenditure for this programme decreased from R40,5 million in 2011/12 to R13,6 million in 2013/14. The decline budget was due to the rollover of R16, 7 million received in 2011/12 for value added tax refunds on 2010 FIFA World Cup tickets and savings of R3,8 million in spending on goods and services.

  20. Succinct Analysis Per Program between 2008/09-2011/12 • Facilities coordination • This programme established a sports geographical information system, lobbied municipalities to build sports facilities. Facilitate the provision of multipurpose sports facilities, build upon the legacy of the 2010 FIFA World Cup, and provide technical assistance for sport infrastructure and the training of facility managers so as to ensure the proper maintenance of sports facilities.

  21. Succinct Analysis Per Program between 2008/09-2011/12 Cont • Facilities coordination • The programme is also involved in overseeing the donor funds received from the German development bank, Kreditanstalt fur Wiederaufbau (KfW), for developing infrastructure associated with the youth development against violence through sport project. • Over the medium terms this programme increased from R8,7 million in 2011/12 to R9,5 million in the following year. Over the medium term expenditure on contractors was expected to increase from R712 000 in 2011/12 to R5, 2 million in following financial year for the development and maintenance of a sports facilities database using the geographical information system that will inform the national facilities plan.

  22. Departmental Programs (new) • Administration • Active Nation • Winning Nation • Sport Support • Infrastructure Support

  23. Current SRSA Budget Red Flags • The Committee should also guard against the financial implications of merely re-languaging certain programs • The Committee should also enquire about the conceptual clarity of these new programs and how they fast track the development of sport in South Africa/ benefits of changing or introducing new names of the programs. • The rationale behind these changes is crucial for members to understand, especially core functions and costs attached.

  24. Current SRSA Budget Analysis Cont

  25. Brief Analysis Per Program • Administration • According to this table the attention of the members must be drawn to a the possible shift of funds to other activities; this is explained by the average rate of under spending which is at the 9.5 per cent under administration. • This expenditure accounts for the dominance of transfers and subsidies in the departmental expenditure.

  26. Brief Analysis Per Program Cont • Administration • This explains the projected increase in expenditure on the compensation of employees over the MTEF period. Spending on operating leases is also projected to grow, due to the Department’s planned move to new premises in 2013/14 to accommodate the bigger staff complement. • Thus, the most significant items of expenditure in the program are compensation of employees, travel and subsistence.

  27. Brief Analysis Per Program • Active Nation • The purpose of this; is to support the provision of mass participation opportunities in sport and recreation. One of the objectives of this program is to improve the well being of the nation by stimulating lifelong participation in active recreation, through facilitating the delivery of at least 3 programs. • An average of 85 per cent of the program’s total allocation over the medium term will be spent on the grant in the provincial sport support and coordination subprograms.

  28. Brief Analysis Per Program Cont • Active Nation • Another concern under program two (Active nation) is that PFMA is clear on acceptable levels of under spending which should be in the range of 5 per cent not in the region of 48 per cent as depicted by the 51.8 per cent average (see the table). • The management and oversight exercised by the Department in respect of the grant partially accounts for the increased expenditure on travel and subsistence, which falls under the community sport and school sport subprograms.

  29. Brief Analysis Per Program Cont • Active Nation • School sport remains a priority for the Department as it is the bedrock for sport development in the country, as reflected in the growth in expenditure in the school sport subprogram over the MTEF period. • The main activity in this subprogram is the South African national school sport championship. Staged annually, the event explains the relative significance of expenditure on travel and subsistence and venues and facilities within expenditure on goods and services.

  30. Brief Analysis Per Program Cont • Active Nation • In addition contract positions set to be created in 2014/15 to assist provinces in implementing their respective school sport programs account for the growth in expenditure on compensation of employees over the medium term.

  31. Brief Analysis Per Program • Winning Nation • The purpose of this; is to support the development of elite athletes. One of the crucial objectives of this program is to contribute to the nation building by financially supporting; monitoring and evaluating the services delivered by the South African Sports Confederation Olympic Committee (SASCOC) in preparing and delivering South African teams for participation and selected international multi-sport code events on an ongoing basis.

  32. Brief Analysis Per Program Cont • Winning Nation • On winning nation (see the table above), why do you budget 45.5 million when you are busy with mobilization of 2010 FIFA World Cup and the then you have 292.5 million when there is no major tournament and then again this money decreases from 292 to 228.8 million during 2013/14 financial year, the Committee should be constructively curious around this issue?

  33. Brief Analysis Per Program Cont • Winning Nation • The number of personnel in this program is expected to increase from 17 in 2013/14 to 23 in 2016/17. This accounts for the increase in expenditure on compensation of employees over the medium term as vacant posts are filled to provide the capacity required to support the implementation of the newly endorsed national sport and recreation plan. The Department delayed filling these posts to ensure that the new organisational structure would be aligned with this plan.

  34. Brief Analysis Per Program • Sport Support • The objective of this program is to contribute towards uniting the country by supporting 60 national sports federations and other non-governmental organisations that offer sport and recreation opportunities to all South Africans in 2014/15. • The number of personnel in this program is 6 posts in 2013 and it should grow to 9 funded posts in 2016/17. The Department delayed filling these posts to ensure that the new organizational structures would be aligned with this plan.

  35. Brief Analysis Per Program Cont • Sport Support • Sport support again like in 2010/11 there is far less budget of 48.2 million and then suddenly you have 117.5 million in 2012/13 and 118.2 million respectively; and then you have an average expenditure of 8.7 per cent, this must also be explained. Ironically the average under spending here is at the rate of 8.7 per cent

  36. Brief Analysis Per Program • Infrastructure Support • The purpose of this is to regulate and manage the provision of sport and recreation facilities. The objective of this program is to improve levels of participation in sport and recreation by facilitating the provision of adequate and well maintained facilities. • The spending focus over the medium term will be on providing 18 outdoor gyms to rural areas that have no sport facilities; completing the national facilities audit; and compiling a national facilities plan. This planned expenditure is reflected in the sport and recreation facility management subprogram, which constitute 49.5 per cent of total program expenditure over the medium term.

  37. Brief Analysis Per Program Cont • Infrastructure Support • The number of personnel in this program is expected to increase from 5 posts in 2013/14 to 9 posts in 2016/17. This accounts for the growth in compensation of employees over the MTEF as the Department fills the vacant posts that will provide the capacity required to support the implementation of the newly endorsed national sport and recreation plan. • On infrastructure support the irony here is that infrastructural development is a government priority and yet the Department spends at an average rate of 0.5 per cent, let alone the fact that is minimally budgeted for. • The medium term expenditure is not yet audited, the comments are drawn from the current appropriated budget which could be effected during medium term adjustment, which is likely to occur in September this year.

  38. SRSA Entities • Boxing SA • Boxing South Africa was established in terms of the South African Boxing Act (2001). It is mandated to administer professional boxing, recognize amateur boxing, create and ensure synergy between professional and amateur boxing, and promote engagement between associations of boxers, managers, promoters and trainers. Boxing South Africa also considers applications for licenses from all stakeholders in professional boxing, sanctions fights, implements the relevant regulations, and trains boxers, promoters, ring officials, managers and trainers.

  39. SRSA Entities Cont • Boxing SA • The committee should reason around the legislative mandate of this entity versus the kind of resources it receive from the Department, despite the possibility of the on coming new Combat Sports Bill.

  40. SRSA Entities Cont • Strength of Boxing SA • A new board has been appointed • The CEO post has been filled • Boxing SA is in good standing with African Boxing Union (ABU), • The entity is also in good standing with five (5) international sanctioning bodies i.e. WBC, WBA, WBF, IBO, IBF • The entity has got accredited ring officials with international boxing bodies

  41. SRSA Entities Cont • Weaknesses of Boxing SA • The audit committee members are insufficient • Internal audit function is not completely fulfilled • The government grant is not sufficient to fund all legislative requirements • Lack of CFO • Numerous other significant posts vacant forcing such duties upon current staff lacking such expertise

  42. SRSA Entities Cont • Threats of Boxing SA • No success in obtaining sponsorships • No success in obtaining an increase in government grant. • As a result in no increase in funding, recurring deficits incurred annually • High going concern risk • Qualified audit report

  43. SRSA Entities Cont • Opportunities of Boxing SA • SRSA approve an increase in BSA annual grant hence BSA having sufficient funds available to meet obligations. • Co-operative relationship with SAIDS to achieve organizational efficiencies • Getting a mutually beneficially relationship with SANABO • Transfer of skills and knowledge from the financial management consultant • Increase in the number of tournaments, resulting in increase in revenue for BSA • Promote female boxing on the back of Olympic admittance • Leverage additional benefits of boxing i.e. boxing fitness • Involvement of BSA in school boxing workshop with SANABO,

  44. SRSA Entities Cont • Boxing SA summary • The profile of boxing as a sport has a declined significantly over the years as measured by the public support for the sport a fact that is the direct cause for the declining sponsorship and television right, • The following factors has a bearing on the status of the sport and the environment that broadly defines it; • The absence of an aggressive marketing strategy, • The poor standard of boxing administration in South Africa, • A media that shows little interest in boxing activities and the negative marketing of BSA, • The quality and image of boxers (compared to athletes in other codes e.g. rugby, soccer, cricket) and the fact that many licensees are boxing’s worse critics,

  45. SRSA Entities • SAID • The South African Institute for Drug-Free Sport (SAIDS) is a public entity established by an Act of Parliament, Act No 14 of 1997. It exists to do the following: • To promote participation in sport free from the use of prohibited substances or methods intended to artificially enhance performance, thereby rendering impermissible doping practices which are contrary to the principles of fair play and medical ethics, in the interest of the health and well-being of sportspersons; and to provide for matters connected therewith. • The Drug-Free Sport Act grants the institute statutory drug testing powers and the authority to conduct and enforce a national anti-doping programme. By virtue of the institute’s legislative ambit, national sports federations are obligated to co-operate with the institute.

  46. SRSA Entities Cont • Challenges of SAID • Current legislation – the current legislation promulgated in 1997 and amended in 2005 is no longer as effective in giving authority and jurisdiction as it was in the past. This year SAID will be going through review of the drug-free sport legislation and drafting a whole new body of legislation to give better effect to the task of tackling doping in sport. • Areas that SAID will have to look at in proposed new drug-free sport legislation are: • -Jurisdiction to test in schools and school sport • -Regulation around sports supplements in the market • Co-ordination of resources and expertise from Law Enforcement, National Prosecutions, Health and SARS is another key challenge

  47. SRSA Entities • Love Life- • Love Life received an amount of R29.4 million from SRSA in 2012. The Department will have to periodically brief the Committee how much have they funded Love-life this time • The Department of Social Dev has allocated R40.3 million for Love Life as at the end of December 2010. This allocation has also been spent on the two programmes of the Department that is Support costs and Programme costs. Large portion of this allocation has been allocated for Programme costs which amount to R30.5 million or 76 per cent of the allocated amount. The compensation of employees continued to dominate the expenditure of the organisation which amounted to R19.96 million that is almost half of the allocated amount. • The Health Dep transferred R72.6 million to the organisation in 2010/11, that money did also increased from there.

  48. SRSA Entities • Lottery • 22% distribution is given to sport after 28% which goes to Arts and Culture • Total allocation is in the range of 463 016 000 • Total grants awarded till 18 February 2014 is 319 129 731 • Withdrawals amount to 18 397 016 • Balance remaining is 162 283 285 • National federations, SASCOC, Provincial academies, Tertiary institutions and schools do benefit from this money • The Committee must intensify its oversight on the stated entities and must be curious about the 162 m balance.

  49. Key Issues for Consideration by parliament • South Africa is plagued by disparities in the access to sport, particularly in the poorer communities, especially toward sport and recreation facilities. It is clear that much still needs to be done with regard to meeting the sporting and training needs of the nation, particularly among historically disadvantaged communities. Transformation and sustainable access highlight the challenges of sport in South Africa .

  50. Key Issues for Consideration by parliament • Ensuring access to marginalised communities • Equitable participation in sport especially for women, youth and the disabled • Development of school sports, including talent in rural areas • Effective monitoring and good governance • Intensify transformation and accountability of federations • Build more sporting facilities and access to equipment and sports regalia in poor (especially rural), communities.

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