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.

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• 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

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• 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.

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• 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.

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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.

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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)


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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






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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


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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


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• 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.

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NATIONAL ARTS COUNCIL OF SOUTH AFRICA
2.2 FUNDING ALLOCATIONS 2006 - 2007
Applications Received Funding Requested
1620 R 253 756 900
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NATIONAL ARTS COUNCIL OF SOUTH AFRICA
2.2 FUNDING ALLOCATIONS PER DISCIPLINE
2006 - 2007
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NATIONAL ARTS COUNCIL OF SOUTH AFRICA
2.2 FUNDING ALLOCATIONS PER PROVINCE 2006 - 2007
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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.

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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
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3. NATIONAL ARTS COUNCIL OF SOUTH AFRICA
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3. NATIONAL ARTS COUNCIL OF SOUTH AFRICA
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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.
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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
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• 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,