Media Statement – 14 April 2011

 

MEDIA STATEMENT – 14 April 2011

Response from the National Lotteries Board to the Funding Practice Alliance research report

The National Lotteries Board (NLB) acknowledges the recent research report, “Meeting their Mandates?”, compiled by the Funding Practice Alliance (FPA). The NLB welcomes reports of this nature as they enable it to assess its processes and continue to improve its service delivery.

The NLB is pleased to note that some of the recommendations in the report have been or are being implemented. These include: (comments marked in red by Ralph Freese)

  • Engagement with civil society organisations (CSOs) has been strengthened with information-sharing workshops which allow both the CSOs and the NLB to better understand and address each other’s challenges. These workshops help to build capacity in less-resourced CSOs to facilitate their access to National Lottery Distribution Trust Fund (NLDTF) grants. Civil society is represented in the funding process through the members of the Distributing Agencies (DAs), who are appointed by public nomination. This involvement brings an invaluable understanding for the developmental needs of the different sectors of society. CSOs have always had an opportunity to participate in this process by responding to calls by the Department of Trade and Industry (DTI) to nominate suitably qualified candidates. The truth, Sertian, is that a veil of fear still covers all interactions you (as the Lotteries) have with organisations in the field. This means that whilst this is a good idea, the change in attitude within your team is what will make it possible for open communication. The Minister chooses the individual representatives on the board and they answer to him not to civil society.
  • Regulations that guide NLDTF processes (promulgated in July 2010) have further helped reduce turnaround times from adjudication to payment of grants. However, improvements were initiated in 2008. By December 2010, 94% of successful applications were paid within 30 days of finalisation of the grant agreement. It would be wonderful if this were true – please let us have the analysis. While this is a noteworthy development, the NLB acknowledges that given the significant number of applications received with each call for applications, the turnaround time from submission of applications to their adjudication remains a very big challenge.
  • While the processes might be perceived as bureaucratic, striking a balance between civil society’s needs and good administrative practice is a limitation that has to be constantly considered and managed. The Board’s risk assessment identified the importance of complying with relevant legislation when managing public funds. A beauracracy delivering a low risk service is a good thing! Lowering risk does not mean administrative bungling, lost documents and long delays.
  • Legislative shortcomings are being addressed through the Board’s recommendations to government for the amendment of the Lotteries Act and regulations. The draft amendments are being prepared for public comment. Great, what are the changes and what do you want them to achieve?
  • It is true that there have been instances where some documents were misplaced and the Board agrees that this is cause for concern. However, given that the NLB receives in the region of 7 000 applications a year, it is understandable that a few documents may be misplaced and the Board will ensure that such occurrences are minimised. Will you use an improved document management system as proposed in my letter. If you need help finding one, please let me know.

The report fails to acknowledge several positive achievements since the inception of the National Lottery in March 2000, including the following: I, and everyone else I speak to acknowledge this. All we want is to help improve the service levels, efficiency and transparency – not a bad goal! Let’s meet and talk this through.

  • R12.3 billion transferred by the lottery operators to the NLDTF.
  • R3.6 billion earned in interest.
  • R15.9 billion have been available in the NLDTF for CSOs – of which R14.4 billion (91%) have already been allocated.
  • R11.0 billion (76% of allocated funds) have been paid out.
  • R1.5 billion (that remains unallocated in the NLDTF) is available for allocation in 2011/12 financial year.
  • This means that R3.4 billion was allocated but not distributed – a HUGE amount. To who was the money allocated and when will it be paid?
  • Also this means that there is R4.9 billion in the bank...
The NLB wishes to express its concern about the methodology and sample size (3 000) on which the report findings are based. The manner in which the possible respondents were selected is not clearly identified, given that there are about 30 000 non-profit organisations registered with the Department of Social Development. Since only 226 chose to respond, the findings could be skewed. In some instances assertions made by respondents were not verified with the NLB. In at least one case study, related to the Johannesburg Festival Orchestra (JFO), assertions by the organisation contain factual inaccuracies: namely that the JFO did not declare that they had provided false information in their application for funding, which was subsequently discovered by the NLB. Claims that the lawyers of the JFO had the court freeze the NLDTF bank account are blatantly false. Can the Funding Practice Alliance please comment.

 

The report refers to administrative costs of both agencies researched (NDA and NLB), and implies that that both entities spend 50% of their budget on administration. The NLB in fact currently spends approximately 2% per annum, as published in its annual reports.

In engaging with civil society on challenges related to accessing NLDTF funds, the report claims that some CSOs say they are unlikely to voice their dissatisfaction for fear of victimisation. The NLB would like to reassure civil society that there should be no fear of victimisation and that all constructive comments are appreciated in order to improve the NLB’s services.

The report incorrectly alleges a lack of dedicated NLB support staff for drawing up contracts, payment of grants and monitoring compliance.

The report also incorrectly states that the disbursement of funds had begun to change as a result of a court judgement of August 2010. The process to change the legislation that governs disbursement was in fact completed before this judgment.

The NLB appreciates the efforts of all involved in the FPA research report and believes it has given the NLB an opportunity to clarify public misperceptions and show that the NLB is committed to deliver on its mandate. The NLB will prepare a more detailed response to the report that will be shared with the FPA and other role players and stakeholder.

Issued by Prof Alfred Nevhutanda – Chairperson of the National Lotteries Board

NLB Spokesperson, Sershan Naidoo tel.: 012 432 1303 cell: 082 491 3304 This email address is being protected from spambots. You need JavaScript enabled to view it.

Meropa Communications Contact Persons:
Khomotso Makuse, tel.: 0115067300 cell: 0792752076 This email address is being protected from spambots. You need JavaScript enabled to view it.
Maria Djordjevic, tel.: 0115067300 cell: 0823346192 This email address is being protected from spambots. You need JavaScript enabled to view it.