The National Arts Council overspent their budget by almost R200 million, report shows
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Cape Town - A forensic report by Mazars investigating the National Arts Council (NAC) has revealed serious discrepancies within the Presidential Employment Stimulus Programme (PESP).
The investigation was conducted following complaints and allegations by the creative arts industry about maladministration and financial mismanagement regarding the PESP.
The PESP was initiated to offer support for employment retention opportunities that would benefit 7000 beneficiaries in cultural and creative institutions and organisations, with an allocated budget of R100 million.
It also aimed to create work opportunities for 8 000 beneficiaries in the cultural and creative industries, with an allocated budget of R185 million.
Findings of the report included financial mismanagement, process irregularities and a lack of adequate oversight. This has led to the appointment of a new council in the hopes that these irregularities will be dealt with.
Due to poor financial oversight, the programme cost the NAC over R420 million, which amounted to almost double the budget. The document revealed that payments of R511 452 made to five former council members for performing work of independent panel members, were to be regarded as irregular expenditure.
The report also identified a conflict of interest in respect to some former council members who had insight into the PESP, and participated in acquiring funds without declaring their former positions.
There were also irregularities in that former council members disregarded their own resolution of 19 September 2020 by allowing five council members to actively participate in the evaluation of applications.
Maladministration of the process was found when the NAC failed to meet deliverables on time and failed to take effective steps to prevent irregularities in the adjudication process.
In a statement, the NAC said, “The NAC Council has taken the findings in the report seriously and are committed to ensuring that all resources required are allocated to restoring strong internal processes and controls, capacitating council members to effectively discharge their fiduciary duties and ensuring the promotion of good governance within the organisation. This is so the entity is never faced with this type of maladministration again.”