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Action over festival funds

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“The evidence and information obtained during the investigation confirmed that the department requested the NCACC to make a direct payment of R1.6 million to Traffic Events”

PUBLIC Protector Busisiwe Mkhwebane has instructed the Northern Cape MEC for Sport, Arts and Culture, Bernice Sinxeve, and the national head of the Hawks to take the appropriate action against those implicated in the funding of R1.6 million for a festival in Norvalspont that never took place.

Mkhwebane has released her report on her findings following an investigation into alleged improper conduct and maladministration relating to the misappropriation of public funds by the Northern Cape Department of Sport, Arts and Culture (DSAC) and the Northern Cape Arts and Culture Council (NCACC).

The Umsobomvu Youth Tourism and Cultural Festival was to have taken place in December, 2016 and R1.6 million was awarded to Traffic and Events Management Company (Traffic Events) by the NCACC to organise the event.

The event, however, never took place.

The NCACC entered into a memorandum of agreement (MOA) with Traffic Events on December 14, 2016. In terms of the MOA, the NCACC undertook to set aside a total amount of

R1.6 million in the 2016/2017 financial year towards the implementation of the festival. The NCACC also undertook to transfer R1 million to Traffic Events by December 15, 2016 and the remaining R600 000 as soon as the first expenditure report in respect of the festival was submitted to the NCACC, which should have been done by January 31, 2017.

The NCACC paid an amount of R1 million into the bank account of Traffic Events.

Mkhwebane’s office investigated whether the conduct of the DSAC and NCACC were improper.

According to the report, a complaint was lodged anonymously at the Kimberley office of the Public Protector on March 13, 2017.

“The complainant alleged that in December 2016 the Northern Cape Department of Sport, Arts and Culture requested the NCACC to pay R1 million directly to Traffic and Events Management Company (Traffic Events) towards the organising of the Umsobomvu Youth Tourism and Cultural Festival which would have taken place in December 2016. The festival did not take place and the money was not recovered from Traffic Events. This conduct of the department and the NCACC was improper, constitutes maladministration and resulted in the misappropriation of public funds,” said Mkhwebane.

She said that her office had conducted a thorough investigation into the matter to determine whether the request to pay the money came from the department.

“The investigation was conducted in terms of section 182(1) of the Constitution, and sections 6 and 7 of the Public Protector Act. It included correspondence with the department and the NCACC, meetings with senior officials of the department and the NCACC, analysis of documents obtained during the investigation and the application of the relevant laws and other prescripts.”

Mkhwebane said that investigation found that the conduct of the department was improper and constituted wasteful expenditure.

“The evidence and information obtained during the investigation confirmed that the department requested the NCACC to make a direct payment of R1.6 million to Traffic Events on December 13, 2016 to organise the festival, on the basis that the NCACC would be refunded.

“It is not disputed that the festival was never held. As the accounting officer of the department that is expected to support and assist the NCACC to enable it to perform its functions, the HOD should have acted with care and diligence to prevent fruitless and wasteful expenditure. The HOD was fully aware that the department had no role to play in the exercising of its mandate by the NCACC, yet she approved a request to the NCACC to make a direct payment of

R1.6 million to Traffic Events, on the basis of reimbursement.

“The conduct of the department accordingly constitutes improper conduct as envisaged in section 182(1) of the Constitution and maladministration in terms of section 6(4)(a)(i) of the Public Protector Act.”

Mkhwebane said the conduct of the NCACC to agree to pay the money directly into the account of Traffic Events was also improper.

“By acceding to the request of the department to make a direct payment to Traffic Events for organising the festival, the NCACC did not act in accordance with its responsibilities in terms of the PFMA (Public Finance Management Act) and the NCACC Act.

“The NCACC did not act with fidelity, honesty, integrity and in the best interests of the entity. It made no attempt to take effective and appropriate steps to prevent fruitless and wasteful expenditure, and the misappropriation of public funds as well as to recover the amount that was lost. The conduct of the NCACC accordingly constitutes improper conduct.”

Mkhwebane said that Sinxeve and the Hawks must take action against those implicated, within 60 days.

“Appropriate remedial action should be taken against the HOD, Ms R Palm, in terms of the Public Finance Management Act (PFMA), 1999 and the Public Service Act, 1994, for her improper conduct in requesting the NCACC to make a direct payment of R1.6 million to Traffic Events to organise the festival that was never held, within 60 days from the date of receiving my report.

“Appropriate action must be taken in terms of the Northern Cape Arts and Culture Council Act, 2013 and the PFMA against the NCACC as the accounting authority for its improper conduct in making a payment of R1 million to Traffic Events to organise the festival that was never held, failing to cancel the memorandum of agreement and to recover the money, within 60 days from the date of receiving my report.

“Appropriate steps must be taken to ensure that the NCACC recovers the amount of R1 million plus interest from Traffic Events, within 60 days from the date of receiving my report.

“The department must also report the fruitless and wasteful expenditure to the Provincial Treasury within 60 days from the date of receiving my report. It should also liaise with the South African Police Service on the progress made with the criminal investigation of this matter, within 30 days from the date of receiving my report.”

Mkwhebane said the report would also be referred to the national head of the Hawks to investigate whether any crime was committed and if so appropriate action should be taken.

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