National Arts Council mismanaged R300m intended to support artists – report

A forensic investigation has revealed that three former and two current members of the National Arts Council (NAC) have been found guilty of ‘committing’ around R630 million in funds as part of Covid-19 financial support for artists, despite the Presidential Employment Stimulus Programme (Pesp) only allocating a budget of R300 million for the initiative.

This was confirmed on Monday during a media briefing by Minister of Sport, Arts and Culture Nathi Mthethwa.

Mthethwa now wants answers from the five unidentified NAC members implicated in the mismanagement of the funds that were earmarked to assist artists and boost the creative economy.

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The investigation was launched in July after the creative sector reported multiple claims of mismanagement of the Pesp fund.

Mthethwa said the probe found instances of wrongdoing, mismanagement, overcommitting of funds and maladministration.

While the Pesp fund allocated R300 million for the initiative, 5% of this was meant to be retained by the NAC for administration purposes. The balance of R285 million for project funding was broken down into two streams – the first stream was allocated R85 million for job retention and the second stream R200 million for job creation.

The minister noted that the forensic report presented to him last week by the NAC had identified a myriad of challenges which included:

• Applicants being approved and contracted for more funding than they applied for;
• More than 55% of approved beneficiaries not being allocated funding; and
• The NAC approving more beneficiaries than budgeted for.

“The forensic report found that certain individuals including senior management, staff, adjudicators and former council members of the NAC have been the main players and culprits in this,” said Mthethwa.

“We cannot as government get the blame that we do not take care of artists when we avail resources and funds for them and somebody else decides to mismanage the funds. Each and every cent of the R285 million should go to artists and will go to artists,” he promised.

“We are reiterating that without any fear or favour, we will fight any mismanagement of funds of government especially because of the difficult economic climate we find ourselves in,” added Mthethwa.

The minister has instructed the council to implement the recommendations of the forensic report. One of the recommendations includes ensuring that any funds that may have been given to people inappropriately must be recouped.

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NAC chair Princess Celenhle Dlamini said investigators discovered several administrative failures attached to the Pesp programme, such as failure to adequately resource the Pesp project with competent staff.

“Another administrative failure relates to a lack of adequate oversight and review processes which resulted in non-compliant projects being approved, failure to meet the timelines for the delivery of the Pesp, and failure to manage and monitor the process,” she said.

However, Dlamini pointed out that in spite of the administrative challenges of the programme, R272 million has been distributed to artists and organisations – constituting 96% of total distribution of all Pesp funding and the remaining balance (4%) is still being distributed.

She did not comment on how the council would handle the issue of any “overcommitted” funds.

Mthethwa said the council is in the process of instituting disciplinary hearings against the implicated officials.

* Palesa Mofokeng is a Moneyweb intern.