accompanied
ROBBEN ISLAND MUSEUM
PRESENTATION – 2010/11 ANNUAL REPORT
TO THE PORTFOLIO COMMITTEE ON ARTS AND CULTURE
12 OCTOBER 2011
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INTRODUCTION
• Robben Island Museum (RIM) was established 1997.
• It is a declared cultural institution in accordance with the
Cultural Institutions Act, 119 of 1998.
• Opened its doors to the public on 01 January 1997.
• The museum is a based on a site with a rich layered history
which goes back to the 17th century.
• The island was a prison for political and common-law
prisoners from the 1960s to the early 1990s.
• Robben Island Museum was declared a World Heritage Site
in December 1999.
• Consists of 5 main sites: Robben Island, Nelson Mandela
Gateway, Mayibuye Archives, Jetty 1 and M-Berth.
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Cont...
• Sites around the Island include Murray’s Bay
Harbour, Old Faure Jetty, 5 different prisons, and a
village that includes a school, village shop, clinic, post
office, leper graveyards, gun emplacements, power
station, the lighthouse, desalination plant, churches,
landing strip, helicopter landing, desalination plant,
transport yard, diesel and petrol tanks.
• RIM completed its first 5-year Integrated
Conservation Management Plan (ICMP) in 2007.
• Currently preparing to review and compile a new
ICMP for 2012 – 2016.
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LEGISLATIVE FRAMEWORK
As a unique MUSEUM and World Heritage Site, RIM is managed in accordance with the
following laws:
•
National Heritage Resources Act, 1999
•
The Cultural Institutions Act, 1998
•
The National Monuments Act, 1969
•
The World Heritage Convention Act, 1999
•
The Public Finance Management Act, 1999
•
The National Environmental Management Act, 1998
•
Cape Nature and Environmental Conservation Ordinance, 1974
•
Conservation of Agriculture Resources Act, 1983
•
Marine Living Resource Act, 1998
•
Environment Conservation Act, 1989
•
Sea-shore Act, 1935
•
National Veld and Forest Fire Act, 1998
•
National Water Act, 1998
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GOVERNANCE
• The RIM Council exercises strategic oversight in accordance with
the Cultural Institutions Act and the Public Finance Management
Act.
• The Current Council, which consists of 13 members, was
appointed in March 2010.
• Council appointed the following subcommittees: Human
Resources Subcommittee; Heritage Subcommittee; Finance, Risk
and Procurement Subcommittee; Marketing and Fundraising
Subcommittee; Governance Subcommittee; Estates
Subcommittee; and Education Subcommittee
• Audit Committee was appointed in October 2009.
• Council appointed internal auditors from August 2010.
• RIM obtained an Unqualified Audit Report for the first time
since 2004/5 financial year.
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GOVERNANCE ( cont.)
• Council prioritised stability and containment of
costs.
• Put in place measures to effectively deal with
negative media publicity
• Strengthened corporate governance by reviewing
strategies, policies and contracts.
• Prioritised executive appointments of the Chief
Executive Officer and Chief Financial Officer.
• Prepared the museum for a visit by UNESCO’s
World Heritage Committee.
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MANAGEMENT
• Council appointed the CEO who started in
November 2010.
• The CFO started in January 2011.
• Other management appointments: Senior
Manager: Ferry and Cargo Operations,
December 2010; Company Secretary, February
2011; Senior Manager: Human Resources, July
2011; Unit Manager: Supply Chain
Management, May 2011.
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ORGANIZATIONAL STRUCTURE
• RIM personnel stands at 222.
• More than 90 employees were absorbed
during the 2010/11 financial year.
• RIM’s 7 Business Units are: Executive Office,
Human Resources, Marketing, Ferry and
Cargo, Tourism Services, Heritage and Natural
Environment Conservation, Public Heritage
Education.
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CHALLENGES
• Long history of poor financial management
• No stable governance and executive leadership during 2008/2009
and 2009/2010.
• Huge staff expenditure as a result of staff absorption.
• Business model not designed for productivity
• No fundraising effort (programmes not packaged so as to attract
external funding)
• Inadequate attention being given on the core business
• No alignment between the Strategy and Structure
• History of having a budget that was not synchronised with the
strategy
• Legacy of weak control environment
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CHALLENGES ( cont...)
• Lack of requisite skills in core service delivery units.
• Absence of a culture of performance against strategic objectives.
• No organisational review or restructuring since the museum’s
establishment
• Allocation of resources to activities which are not the museum’s core
mandate.
• Unfunded mandates: School, clinic, post office and municipal services.
• Inadequate protection of RIM’s intellectual property
• Access to the island mainly by boat.
• Control of natural environment and threat of poaching (protection of 1
nautical mile).
• Lack of competent Built Environment and Facilities Maintenance Unit.
• Challenges in the relationship with Public Works in relation to
maintenance of the island and provision of municipal services.
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2010/2011 ANNUAL REPORT
• This is the first annual report of the current Council.
• It covers a financial year during there was no executive
leadership for the first seven months.
• Financial management was outsourced to
Pricewaterhousecoopers (PwC) until end of January 2011.
• No monitoring of performance against predetermined
objectives.
• A weak control environment prevailed and was worsened
by the absence of a supply chain management unit.
• Other critical business units were occupied by acting senior
managers.
• Company culture not conducive to fiscal discipline.
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Cont....
• Reports of the Chairperson and CEO highlighted
achievements and areas requiring attention
• CEO’s reported highlighted challenges with regard
to funding, performance reporting, maintenance
of the island and compliance with conventions
which govern World Heritage Sites .
• Performance Reporting has been given special
attention and RIM management is working
closely with Internal Auditors to address this
challenge.
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ACTION PLANS TO ADDRESS
CHALLENGES
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•
•
•
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Review of the strategic planning process and configuration of
departments
Allocation of resources to favour of core service delivery units
Interrogation of strategic objectives and performance reporting
Highlighting Human Resources as a key strategic risk and embarking on
efforts to use available personnel to address skills shortage.
Prioritisation of Risk Management and Internal Audit
Setting up of Monitoring and Evaluation Unit in the CFO’s Office
Strengthening of the Supply Chain Unit and revision of Delegations of
Authority in order to avoid a recurrence of Irregular Expenditure
Review of policies and procedures
Review of strategic priorities so as to realise the museum’s potential to
generate revenue.
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ACTION PLANS TO ADDRESS
CHALLENGES (cont...)
•
•
•
•
•
•
•
•
•
Review of existing contracts, service level agreements with service providers and
partners such as the Department of Public Works.
Formalising partnerships with SAHRA, the City of Cape Town’s Fire and Emergency
Services, the Department of Agriculture, Fisheries and Forestry, and the South
African Police Services
Engaging National Treasury on establishment of Public Private Partnerships on
those functions which the museum has no capacity to deliver.
Engaging DAC on the establishment of a Project Management Unit to manage the
heritage built environment and estates of the island.
Appointment of a Facilities Management Contract by the Department of Arts and
Culture.
Engaging the museum’s trade union on organisational restructuring.
Putting in place a plan to address problems identified in the 2010/2011 Annual
Report
Prioritisation of the Visitor Management Plan (narrative, interpretation and
diversification of tour options to enhance visitor experience)
Stabilisation of Ferry Operations so as to address negative publicity and turn
attention to RIM’s core business.
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SUMMARY OF COMPARATIVE INCOME
AND EXPENDITURE
DESCRIPTION
2010/11
R ‘000
2009/10
R ‘000
Operating Income
117,128
97,174
3,094
2,319
TOTAL INCOME
120,222
99,493
Administrative
Expenditure
(12,579)
(10,575)
Operating Expenditure
(109,260)
(78,909)
TOTAL EXPENDITURE
(121,839)
(89,484)
(1,617)
10,009
Other Income
SURPLUS/(DEFICIT)
% DIFF
NOTE
A
21%
B
36%
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SUMMARY OF COMPERATIVE
INCOME AND EXPENDITURE
A:
Robben Island Museum has two (2) main sources of Income(i.e. Ticket Sales and
Subsidy from Government)
* Ticket Sales increased by 35% from R 37m in 2010 financial year to just over
R 50m during the 2010/11 financial year.
* The subsidy from Department of Arts and Culture increased by 6% for the
same period.
B:
Operating Expenditure increased by 38% for the period under consideration.
This is mainly attributed to significant increases in expenditure incurred with
regard to Boat Repair Expenditure, Boat Hire Expenditure and Compensation of
Employees.
RIM had to also incur R 1,7m in the last quarter of the 2010/11 financial year
renovating Houses located on the tourists bus routes in preparation of the
UNESCO mission.
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HISTORICAL PERSPECTIVE OF RIM’s
AUDIT OUTCOMES
2004/05
2005/06
2006/07 2007/08
2008/09
2009/10
2010/11
UNQUALIFIED
QUALIFIED
QUALIFIED
QUALIFIED
QUALIFIED
UNQUALIFIED
DISCLAIMER
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MATERIAL AUDIT FINDINGS FOR
THE 2010/11 FINANCIAL YEAR
1. Irregular Expenditure of R 27,7m (2010: R 8,8m)
was reported;
2. Restatement of Corresponding figures;
3. Material Losses;
4. Inadequate systems of recording performance
information.
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MATERIAL AUDIT FINDINGS FOR THE
2010/11 FINANCIAL YEAR( Cont...)
1.1 Irregular Expenditure
• These arose mainly as a result of inappropriate procurement
practices. RIM did not have suitably qualified and experience
officials in its SCM: Unit who could enforce compliance.
Corrective Measures that have since been put in place
• SCM Unit Manager was appointed during the first quarter of
2011/12 financial year;
• RIM in partnership with National Treasury conducted 2(two)
SCM Workshops during the first quarter of 2011/12 financial
year with all relevant officials within RIM to raise awareness on
acceptable SCM processes and practices.
• Procurement practices were centralized and the responsibility
for initiating transactions was delegated to Senior Management
only
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MATERIAL AUDIT FINDINGS FOR THE
2010/11 FINANCIAL YEAR (Cont...)
2.1 Restatement of Corresponding Figures
• These related to Irregular Expenditure that was
proactively identified by new management.
Corrective Measures that have since been put in place
• SCM practices have been improved and capacity is
being progressively strengthened to ensure non
recurrence of Irregular Expenditure.
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MATERIAL AUDIT FINDINGS FOR THE
2010/11 FINANCIAL YEAR( Cont...)
3.1 Material Losses
• These relates to amounts written off in respect of Books
previously donated to Robben Island;
• Irrecoverable Debts with DPW due to the absence of formal
working arrangement.
Corrective Measures that have since been put in place
• An appropriate SLA/or MOU would be finalized with DPW
that will govern RIM and DPW’s operating arrangments.
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MATERIAL AUDIT FINDINGS FOR THE
2010/11 FINANCIAL YEAR( Cont...)
4.1 Inadequate Systems of Recording and Reporting
Performance Information
• The challenge arouse mainly as a result of the absence permanent
Executive Leadership consistently throughout the year.
Corrective Measures that have since been put in place
• The Executive Leadership has since been appointed and capacity is
being built to enable RIM to be responsive to the requirements of
PFMA and Treasury Regulations as they related to performance
information.
• The Internal Auditors have been co-opted to review and monitor
performance information.
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THANK YOU
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