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NATIONAL ARTS COUNCIL

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Title: NATIONAL ARTS COUNCIL


1
  • NATIONAL ARTS COUNCIL
  • OF
  • SOUTH AFRICA
  • PRESENTATION TO PORTFOLIO COMMITTEE ON ARTS AND
    CULTURE
  • 6 NOVEMBER 2007 10H00
  • VENUE ROOM V226, SECOND FLOOR OLD ASSEMBLY WING,
  • 120 PLEIN STREET, CAPETOWN.

2
  • NATIONAL ARTS COUNCIL OF SOUTH AFRICA
  • INDEX PAGES
  • Background of the National Arts Council of South
    Africa. 3 - 5
  • 2. Review of the Annual Report 2007 year.
  • 2.1 Financial Review and Audit Report, and
    6 - 10
  • 2.2 Funding Allocations. 11 - 13
  • Background to Accumulated Surplus. 14 - 17
  • 4. Highlights. 18
  • 5. Challenges. 19

3
  • 1. BACKGROUND OF THE NATIONAL ARTS COUNCIL OF
    SOUTH AFRICA
  • OUR VISION
  • To promote, through the arts, the free and
    creative expression of South Africas cultures.
  • MISSION
  • To develop and promote excellence in the arts.

4
  • 1. Background of the National Arts Council of
    South Africa.
  • The NAC was established through Act no 56 of
    1997. Its vision is to promote through the arts,
    the free expression of South Africas cultures,
    while its mission is to promote excellence in the
    arts.
  • The NAC receives its annual grant from the
    National Department of Arts Culture. The NAC is
    governed by a Board which comprises 23 members,
    14 of whom are appointed by the Minister of Arts
    and Culture, the remaining 9 members are the
    provincial representatives.
  • The Board is mandated to approve recommendations
    for funding from Advisory Panel members. Advisory
    Panel members are publicly nominated and
    appointed by the Board.
  • The National Arts Council currently offers
    financial support to organisations and
    individuals involved in dance and choreography,
    literature, music, theatre, multi-discipline,
    visual arts and craft projects. Each discipline
    is chaired by a Board member.

5
Appointment of New Council
1. Background of the National Arts Council of
South Africa
  • The NAC operated without a Council for
    approximately 18 months and a new Council was
    only inaugurated in September 2006, 6 months into
    the year under review.
  • The Council had to prioritise its plans and the
    top three priorities and key deliverables for the
    year under review were identified as-
  • 1. An improved Audit Report,
  • 2. An improved Staff moral,
  • 3. An improved Public image.
  • Whilst the Council recognised that funding
    remains an integral part of the NACs work, it is
    clear that this is not the only role for which it
    was established.
  • The key aspect of the NACs strategy relates to
    the development of an integrated model that will
    ensure harmonious work between the Provincial
    Arts and Culture, the Provincial Department of
    Arts and Culture as well as the NAC. This will
    necessitate the overhaul of the funding model and
    the Council plans a series of consultative
    meetings with all stakeholders over a period of
    time.
  • The three year strategy will include improved
    grant making processes, transformation in the
    arts research and policy, broader cultural
    participation and audience development,
    international liaison and fostering a shared
    South African identity.

6
NATIONAL ARTS COUNCIL OF SOUTH AFRICA 2.1
STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR
ENDED 31 MARCH 2007
Note 2007
2006 R
R REVENUE

83,288,180 53,033,458 Grants received

62,081,000 47,894,000 Grants and initiatives
expired 8 16,935,180
2,170,508 Interest received
3,892,448
2,614,774 Other income
379,552 354,176 EXPENDITURE

58,517,648 54,510,482 Agreed distribution
transferred to project and bursary creditors
and initiatives
10 48,202,957
45,571,768 Operating costs
10,314,691
8,938,714 Surplus / ( Deficit ) for the year
24,770,532
(1,477,024)


7
NATIONAL ARTS COUNCIL OF SOUTH AFRICA 2.1
STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR
ENDED 31 MARCH 2007
Accumulated Total
surplus R
R Balance at 1April 2005
6,646,635 6,646,635 Net deficit for
the year
(1,477,024) (1,477,024) Balance at 31
March 2006 5,169,611
5,169,611 Surplus for the year
24,770,532 24,770,532 Balance at 31 March
2007 29,940,143 29,940,143






8
NATIONAL ARTS COUNCIL OF SOUTH AFRICA 2.1
STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH
2007
Note 2007 2006
R
R ASSETS NON - CURRENT ASSETS Property, plant
and equipment 3
3,324,401 3,405,649 CURRENT ASSETS
64,052,512 51,901,035 Accounts
receivable 4 684,824
1,373,000 Cash and cash equivalents
5 63,367,688
50,528,035 TOTAL ASSETS 67,376,913
55,306,684


9
NATIONAL ARTS COUNCIL OF SOUTH AFRICA 2.1
STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH
2007
Note 2007
2006 R
R NET ASSETS TOTAL NET
ASSETS 29,940,143
5,169,611 Accumulated surplus 29,940,143
5,169,611 LIABILITIES CURRENT LIABILITIES
37,436,770 50,137,073 Accounts
payable 6 199,956
262,877 Provisions 7
276,134 142,827 Projects and
bursaries payable 8 34,502,249
45,568,187 Administered Funds 9
2,458,431 4,163,182 TOTAL NET
ASSETS AND LIABILITIES 67,376,913
55,306,684


10
  • NATIONAL ARTS COUNCIL OF SOUTH AFRICA
  • 2.1Summary of the Audit Report History for the
    past 4 years.
  • Over the 3 years preceding the year under review,
    the institutions
  • governance and compliance record grew steadily
    worse.
  • However, the audit outcome for the 2006/7 year is
    evidence
  • of a comprehensive turnaround in this area.

11
NATIONAL ARTS COUNCIL OF SOUTH AFRICA
2.2 FUNDING ALLOCATIONS 2006 - 2007
Applications Received Funding Requested
1620 R 253 756 900
12
NATIONAL ARTS COUNCIL OF SOUTH AFRICA
2.2 FUNDING ALLOCATIONS PER DISCIPLINE
2006 - 2007
13
NATIONAL ARTS COUNCIL OF SOUTH AFRICA
2.2 FUNDING ALLOCATIONS PER PROVINCE 2006 - 2007
14
NATIONAL ARTS COUNCIL OF SOUTH AFRICA
3. Background To Accumulated Surplus
  • Over the period, 2004 to 2007, the NAC has
    cumulatively allocated in excess of 75 of its
    annual parliamentary appropriation to grants to
    the arts in accordance with S16(2)(a) of the NAC
    Act.
  • Over the 4-year period 86 of the parliamentary
    appropriation was allocated as grants. These
    grants allocations are held in a current
    liability account from which actual grants
    disbursements are drawn down and are then
    reflected in the performance statement as
    expenditure. While the grants allocations were
    allocated to applicants in each year, not all
    applicants were actually paid their allocated
    funds. This is accumulated surplus is a result
    of
  • Applicants that did not claim their allocations
    because they became defunct or the
  • projects for which they applied were no
    longer viable,
  • Applicants whose allocations were withheld due
    to contractual non-compliance and
  • Interest earned, rental income and savings on
    administration costs. The result is that a
  • grants surplus developed and accumulated
    over the years.
  • These surpluses were not immediately apparent
    since they were held as part of the overall
  • current liability owed to applicants. It was
    only after an analysis of grants undertaken
    during
  • March 2007 to May 2007 that expired grants were
    identified and quantified as set out in the
  • table below. Note that expired grants are
    defined as grants that have either not been
  • claimed for period of 1 year after the
    allocation decision was taken or have not
    satisfied
  • contractual terms by the due date.

15
3. NATIONAL ARTS COUNCIL OF SOUTH AFRICA
Historical analysis of grants to the arts Prior Years Rm 2004 Rm 2005 Rm 2006 Rm
Parliamentary allocation - 42.1 44.7 47.9
Grants allocation per NAC Act (75) - 31.6 33.5 35.9
Grants allocated (Rm) Grants allocated ( of appropriation) - - 28.4 67 46.5 104 45.6 95
Grants actually paid out - 25.5 29.4 40.0
Balance of Grants Allocated - 2.9 17.1 5.6
Expired Grants 7.1 6.9 2.9 0.1
Accumulated operating surplus as at 31 March 2006 5 169 611
Operating surplus for the period 2006/7 8 235 340
Accumulated expired grants as at 31 March 2007 17 003 130
Total accumulated surplus as 31 March 2007 30 408 081
Less Fixed Assets (3 324 401)
Accumulated surplus available for re-allocation 27 083 680
16
3. NATIONAL ARTS COUNCIL OF SOUTH AFRICA
17
3. NATIONAL ARTS COUNCIL OF SOUTH AFRICA
18
NATIONAL ARTS COUNCIL OF SOUTH AFRICA
4. HIGHLIGHTS 2006/2007
NAC delivers its first unqualified audit report
in four years NAC allocates R48,2m to 426 arts
entities NAC allocates 78 of annual
parliamentary appropriation as grants to the
arts. This is in excess of the legal
requirement of 75. NAC wins bid to host 2009
the IFACCA (International Federation of Arts
Councils and Cultural Agencies) World Summit on
Arts and Culture.
19
5. CHALLENGES OF THE NATIONAL ARTS COUNCIL OF
SOUTH AFRICA
The strategic challenges that the NAC will need
to address in the coming year and beyond are as
follows The NAC needs to provide leadership
in the sphere of public funding of the arts.
Currently, the NAC is a small player in an arts
funding landscape that is confusing and
inefficient. There is now an opportunity, given
the NACs improved governance environment, to
consider centralizing the management of public
funds to arts at the National Arts Council.
There is a need for equity and balance of funding
across our various communities, the arts
disciplines and across our provinces. However,
the treatment of this issue should not be
approached naively but should take account of the
inherent complexities of resource allocation in
the arts. There is a dire need for
intervention in the arts at the sectoral level.
Such intervention which would include sector
research, advocacy, policy input and the like
is very much a part of the NACs mandate and the
NAC must step into the breach. The NAC must
identify its stakeholders and engage more
effectively with them such engagement should
not emphasize the promotion of the NAC but should
seek to add value to the NACs stakeholders
through the dissemination of information and
knowledge. Budget
20
  • 6. THANK YOU
  • The National Arts Council of South Africa wishes
    to thank the Portfolio
  • Committee on Arts and Culture.
  • Mr Nicholas Motsatse,
  • Chairperson of the NAC Board.
  • Ms Brenda Madumise
  • Deputy Chairperson of the NAC Board.
  • Mr Navin Lakha,
  • Chairperson of the Audit Committee.
  • Mr Kiran Isvarlal,
  • Chief Financial Officer.
  • Mrs Julie Diphofa,
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