Gayton McKenzie mum on missing R146 million

Sports, Arts and Culture Minister Gayton McKenzie and his department are keeping mum about over R146 million in unaccounted-for Covid-19 relief payments.

For months, Newsday has been attempting to get an update from the Department of Sports, Arts and Culture (DSAC) and the Ministry, but was repeatedly ignored.

Members of Parliament (MPs) are expressing their frustration over the delays, as they believe McKenzie has seemingly taken a backslide from the many promised forensic investigations.

On 25 March 2020, then-Minister Nathi Mthethwa committed R150 million in relief funding for artists, athletes, and technical personnel affected by event cancellations during the pandemic lockdown.

This was later revised, and in the 2020 Special Adjustment Budget, R250 million was allocated for COVID-19 relief in the sector.

According to the Department’s 2020/21 annual report, R177 million went to the national Department, R58 million to provinces’ relief funding, and R10 million for libraries’ health and safety protocols.

The remaining R5 million was used for personal protective equipment (PPE) and decontamination at five DSAC sites, where the Auditor General found “non-compliance on PPE procurement.”

Thus, R235 million (R177 million national and R58 million provincial) was directed for relief funding to support qualifying artists, athletes and technical persons in the sector.

Four agencies were tasked with disbursing funds: the Sports Trust, National Arts Council, Business and Arts South Africa, and the National Film and Video Foundation.

While thousands benefited, allegations of maladministration, double-dipping, and other problems marred the process.

I pledge transparency!

When new Minister McKenzie took office in July 2024, he promised complete transparency by publishing a detailed list of beneficiaries from his department’s COVID-19 relief fund.

McKenzie said he was publishing the list for the sake of transparency and said there were really good, well-meaning people who received the funds.

He also said the list was not a shame list, but he wanted to dispel the notion that the DSAC did not support artists.

In July 2024, these beneficiaries and the amounts transferred were published, showing that payments were done in three “waves,” including:

• First Wave: R72.04 million for 3,962 beneficiaries;
• Second Wave: R4.11 million for 622 beneficiaries;
• Third Wave: R12.71 million for 2,059 beneficiaries.

The total reported payouts were just under R89 million for 6,643 beneficiaries – well short of the later-revised R235 million pool.

The Department and Minister’s office ignored follow-up questions from journalists on the matter.

Then, in July, McKenzie took exception to an article published on BusinessTech about the matter, which portrayed him and his Department’s silence in a negative light, calling the reporters “piss-poor.”

“The agenda is very clear by some media, this was before my time, an impression is being created that I have something to do with the missing millions, I am the one uncovering and exposing this rot,” he claimed.

Newsday once again repeatedly sought updates from the Department and the Minister’s office over several weeks.

These offices did not answer any of the requests, leaving questions and concerns about the missing R146 million of taxpayer funds unanswered.

Auditor-General’s concerns

According to the Auditor General of South Africa’s (AGSA’s) audit report on Covid-19 expenditure, there were several issues with the rollout.

At the get-go, the AGSA said that “the fund relief framework had certain internal control deficiencies that could negatively affect the overall effectiveness of the department‘s relief efforts.”

This “could result in the department not achieving the intended objective of providing relief funding to deserving beneficiaries in the sport, arts and culture sector.”

According to the AGSA, the progress of distributing the funds was slow, with a large number of applications initially being rejected and later re-evaluated.

They identified that the original criteria used to evaluate applications were not specific enough to prevent double-dipping and that subsequent amendments thereto could have resulted in an unfair process.

Design deficiencies in the system used to capture applications resulted in duplicate payments made to at least 72 beneficiaries and applications processed with key information not being captured.

In addition, the procurement process for digital solutions for this was found by the AG to be non-compliant, and the supplier who received the highest points was not appointed.

Inadequate validations by the system and a lack of reconciliations further increased the likelihood of invalid or inaccurate disbursements, noted the AG.

The AG also said that the Department did not differentiate between the management fee payable to the disbursing agents and the transfer amount to disbursing agents for relief beneficiaries, which resulted in a misclassification of the fees.

MPs growing frustrated

Members of Parliament (MPs) are expressing their frustration over the delays, as they believe McKenzie has seemingly taken a backslide from the many promised forensic investigations.

Democratic Alliance (DA) spokesperson on Sports, Arts and Culture, Leah Potgieter, said that DSAC, like many departments across government, does not hold implicated officials accountable.

“I am not sure if this is a historical departmental issue, but consequences seem to be non-existent. It’s like investigations are just check-box exercises,” said Potgieter.

She cited the Chairperson of Parliament’s Portfolio Committee on Public Service and Administration, Jan de Villiers’ recent revelation of the systemic issue.

He noted that nearly 9,000 senior public servants have undergone lifestyle audits, with 117 officials under internal investigation and 24 cases flagged by the Presidency for suspected undeclared income or hidden assets.

Yet, no criminal action is yet underway. “It is endemic, and it has to be rooted out. We see lots of public rhetoric of a crackdown on corruption, but in practice, it just does not happen,” said Potgieter.

Economic Freedom Fighters (EFF) MP and member of Parliament’s portfolio committee on SAC, Eugene Mthethwa, recently told Newsday that the committee is still awaiting the Minister’s “many announced forensic investigations that he seems to have taken a backslide from now.”

“There has not been any audit after his popular announcement of making public the names of the beneficiaries. It was just a populist act from him with no intentions to get to the bottom of the lost taxpayers’ money,” said Mthethwa.

“There is no willingness to hold anyone accountable, which is what, as the committee, we must intensify. Open criminal cases where anyone is found wanting,” added the EFF MP.

Parliament’s Portfolio Committee on Sports, Arts and Culture, Chairperson, Joseph McGluwa, previously told Newsday that many question marks remain.

McGluwa said that, given the concerns raised, including his engagements with the South African Performing Arts representatives who only received calls during COVID for support, but nothing further, a “thorough investigation is necessary.”

“Despite the department’s assurance that accounting for funds was within the rules, the committee has not been provided with figures or information on potential shortfalls, leaving questions about fairness and equality unanswered.”