Sport, Arts and Culture Minister, Nathi Mthethwa, has ordered a forensic investigation into the mismanagement of R300 million by the National Arts Council (NAC).
These funds are part of the Presidential Employment Stimulus Package (PESP) programme, which is designed to act as an aggressive injection of income into the economy that enables ambitious proposals that create opportunities for employment and collaboration.
The Presidential Stimulus Programme is aimed at assisting practitioners and their projects as well as companies that incurred losses (actual and planned/existing, new and those that were at concept stage) during the COVID-19 lockdown period.
The Department of Sport, Arts and Culture entrusted the administration of the programme to the NAC.
Addressing a media briefing on Monday, the Minister said the NAC mismanaged funds by overcommitting on the available funds by more than double the allocated amount in their possession.
“I want to clarify that we heard in the media there is R300 million that is missing, money is not missing. People over committed the funds that were given to them…part of the R300 million is still there, part of it has been disbursed and part of it is being disbursed so there’s no money that disappeared.
“As a result of this, I have instructed the department to do a deep forensic investigation about this matter so that whoever transgressed in mismanaging funds is brought to book,” said Mthethwa.
Upon the discovery of the mismanagement of funds, the Chief Executive Officer and the Chief Financial Officer at the NAC were suspended.
“We are told part of this mismanagement includes people receiving more funds that they had applied for…these things will have to be revealed in the investigation.
“We are also focusing on those who should have done the fiduciary duty on this matter because management was not doing things alone, an oversight body was there and people have to answer to that,” the Minister said.
The breakdown of budget allocations is as follows: R300 million for the NAC, R140 million for the National Film and Video Foundation and R60 million for the Sports Trust, whose objective was to create jobs.
“A balance of R165 million went towards sports compliance projects, heritage presidential economic stimulus programme projects, and arts and culture projects implemented mostly with provinces,” the Minister said.
In the past weeks, the department has made attempts to get additional funds to cover the shortfall.
“We have engaged the National Treasury but we have not been successful in that because of the economic climate and the financial constraints we are faced with. They are also raising the issue of mismanagement,” the Minister said.
He extended an apology to the sector that has been let down by the NAC.