1. PRESENTED BY MR VUSITHEMBA NDIMA ACTING DDG: CULTURAL HERITAGE DEPARTMENT OF ARTS AND CULTURE A NEW VISION FOR THE CASTLE OF GOOD HOPE UNDER THE DAC

2. OUTLINE 1.Background 2.Motivation for Transfer 3.Transitional arrangements 4.DAC Readiness 5. Due Diligence 6. Other Benefits of the Transfer 7. Future Vision 8. Legislative Framework 9. Functions of Council 10. DAC Institutional Management Capacity 2

3. 1. BACKGROUND DOD requested for transfer of Castle in 2006 as per Cabinet Memorandum Main reason cited as Castle being non core business of DOD Cabinet approved transfer on 19 September 2007 as follows: “Government agreed with the proposal to repeal the Castle of Cape of Good Hope Monument in Cape Town, presently under the DOD, to DAC. Following ratification by Parliament, the process will see the dissolution of the Castle Control Board” 3

4. 2. MOTIVATION FOR REPEAL OF CASTLE MANAGEMENT ACT The Cabinet Memorandum submitted to Cabinet by the Department of Defence and approved by Cabinet had the following to say: –“Protection of cultural heritage, including military heritage, and preservation of national memory is the core business of the Department of Arts and Culture, under the direction of the responsible Minister” –“The Castle Management Act, 1993, in as far as it imposes this responsibility on the Minister of Defence, has entrusted to the Minister of Defence, powers and functions that legitimately belong to the Minister of Arts and Culture” –“The Ministry and Department of Defence are neither structured nor capacitated to execute these functions and powers” –“In order to rectify this, it is necessary that the Castle Management Act, 1993, be repealed in its entirety and the Castle Control Board be dissolved so as to allow the Minister of Arts and Culture to assume responsibility for the management and administration of the Castle under the Cultural Institutions Act, 1998” 4

5. 2. MOTIVATION FOR REPEAL OF CASTLE MANAGEMENT ACT (CONT.) The Castle tells a complex multi-facetted story about: –The development of a cosmopolitan society –The genesis of racial, social and class stratification This would later inform the entire South African social and political landscape Confining the Castle to military history will therefore deprive this cultural heritage resource of its rich tapestry of history 5

6. 3. TRANSITIONAL ARRANGEMENTS Castle Management Act Repeal Bill in process Bill provides for the Castle Control Board to remain in existence and in control until the Castle is declared as a Cultural Institution and a new Council is appointed Bill provides for civilian staff (8) to be transferred from Board to Council in terms of Labour Relations Act Minister of Arts and Culture has signed off on submission to declare Castle as a Cultural Institution Advertisements to appoint a new Council have been placed Envisaged date of declaration is date on which Castle Management Act is repealed Request forwarded to DOD Minister for retention of military staff (14) for 12 months after appointment of new council to avoid administrative vacuum and ensure smooth transition Major strategic and operational decisions are left to the Council guided by provisions of Cultural Institutions Act 6

7. 4. DAC READINESS TO TAKE ADMINISTRATIVE AND MANAGEMENT RESPONSIBILITY DAC has provided the following amounts: 2008/9R3,515 million 2009/10R4 million 2010/11R4,5 million As process of appointing a Council takes time, DAC has already initiated the process of appointment by publishing a call for nominations which will be followed by: –Nominations to be considered by advisory panel –Panel recommendations for appointment –Minister appoints –Appointments effective from date of repeal of Castle Management Act and dissolution of Castle Control Board –Inauguration and Induction of newly appointed councils and management This will ensure that a management structure is in place by the time of declaration Civilian staff transferred to Council and military staff status quo remains for 12 months after appointment of new council to avoid administrative vacuum and ensure smooth transition (depending on approval by Minister of Defence) 7

8. 5. DUE DILIGENCE EXERCISE DAC, in close cooperation with current management conducted a Due Diligence exercise into the Castle to obtain a high level insight into the history, current operations as well as the challenges it faces This is being used to inform DAC on strategies and structures it needs to implement to ensure a smooth transition of ownership and efficient functioning post transfer of the Castle 8

9. 5.1. ISSUES EMANATING FROM THE DUE DILIGENCE Financial position: –Castle is currently self sufficient but most of the staff are remunerated from the DOD budget –DAC will have to make provision for the payment of the full compliment of staff after transfer –Banking and cash investments amounted to R6,073 million; and, –will have to be “committed to projects” (Section 53 of PFMA prohibits the accumulation of surpluses without the approval of the National Treasury) 9

10. 5.1.2. ISSUES EMANATING FROM THE DUE DILIGENCE (CONT.) Staff establishment –Organisational Development Exercise to be done (Staff establishment needs) with a specific emphasis on the Museum/Heritage component –Job Evaluation Exercise to determine the levels of remuneration –Approval of the Minister of DAC and the Minister of Finance to be obtained iro the levels of remuneration –Negotiations with DOD for possible transfer of certain staff currently deployed at Castle –Possible incorporation of current Contract employees into new staff establishment –Processes to appoint Heritage/Museum professional and other support staff (advertising, interviews, appointments etc.) 10

11. 5.1.3. ISSUES EMANATING FROM THE DUE DILIGENCE (CONT.) Human Resource Issues –Establishment of Pension Fund –Establishment of Medical Aid Fund –Determining of leave provisions –Establishment of HR plan –Establishment of HR policies Supply Chain Management (SCM) –Establishment SCM Framework as required by Treasury Regulation 16A –Establishment of Procurement Policy and Asset Management Policy 11

12. 5.1.4. ISSUES EMANATING FROM THE DUE DILIGENCE (CONT.) Upgrading and Maintenance of Castle –Castle is over 350 years old and needs continuous refurbishment and maintenance –There’s no dedicated capital works budget to address this issue and income generated from gate takings is used for capital works –Castle Control Board could only manage to allocate R2 million in the last 5 years towards refurbishment and maintenance –Estimates are that approximately R76 million is needed over the next 3 years to address the backlog in refurbishment and maintenance –As part of the National Estate the refurbishment of the Castle should be one of the compelling reasons for the Castle to be transferred to DAC 12

13. 5.1.5. ISSUES EMANATING FROM THE DUE DILIGENCE (CONT.) Other issues to be addressed –Establishment of an Investment Policy –Establishment of various financial policies –Establishment of an Internal Audit function and Audit Committee –Establishment of Delegations of Authority dedicated specifically to the PFMA, SCM and HR –Establishment of Risk Management Processes (Risk Assessment, Risk Management Strategy, Fraud Prevention Plan etc.) –Establishment of Local Area Network (LAN) environment iro IT as well as Disaster Recovery and Firewall Protection –Establishment of Security arrangements 13

14. 6. OTHER BENEFITS OF THE TRANSFER Inter-museum Relationships Designated museum/heritage focus Military heritage of Castle will not be neglected eg. Museum of Military History (Under Northern Flagship Institution) remains a key institution of DAC Designated 3 year MTEF budget Strong emphasis on Maintenance of the Castle 14

15. 7. FUTURE VISION From the legal framework to be presented it is clear that not every decision about the future of the Castle can and should be made now As accounting authority the Council must be given the opportunity to make sensible strategic and operational decisions about the Castle’s future To be unnecessarily prescriptive now may be seen as usurping councils prerogatives granted under the Cultural Institutions Act Future vision below is therefore not definitive but possible starting point 15

16. 7. FUTURE VISION (CONT.) The main vision is the maintenance, expansion and enhancement of the Castle’s cultural and military history A focus on both domestic as well as international tourists This will be done through widening the range and scope of activities to integrate 5 aspects of Castle history: –Military history –Maritime history –Slavery –Khoi-San history –Colonial history Castle integral part of City cultural heritage precinct, including Slave Lodge and District Six Museum Castle integral part of City Integrated Development Plan 16

17. 8. LEGISLATIVE FRAMEWORK The Cultural Institutions Act 119 of 1998 as amended by the Cultural Laws Amendment Act 2001 is the enabling legislation It provides for the payment of subsidies to certain Cultural Institutions. It establishes certain institutions as declared Cultural Institutions under the control of Councils. The Public Finance Management Act 1999 applies as the Castle is a Schedule 3A public entity 17

18. 9. FUNCTIONS OF COUNCIL MAIN Formulate Policy To hold, preserve & safeguard all immovable property. Receive, hold, preserve and safeguard all specimens, collections or other movable property. Raise funds. Manage and control moneys received - pay expenses. Proper record of property – inventory – submit to DG any returns – proper books / accounting records. Determining objects of the Institution. Execute objects of the Institution. 18

19. 9. FUNCTIONS OF COUNCIL (cont.) Determine access hours to institution, conditions and admission fee. Appoint staff to execute functions. Determine remuneration and conditions of service. Publish objects of declared institution in Gazette. One month prior to commencement of Financial Year –submit Business Plan for the next three years. Council must submit an Annual Report to Minister. Minister must table Annual Report to Parliament within 14 days. Within 5 months – Delegation chair + 2 council members to brief committees of Parliament. 19

20. 10. DAC INSTITUTIONAL MANAGEMENT CAPACITY DAC manages 15 national heritage institutions and 25 public entities in total DAC has a heritage programme dedicated full time to assist its museums DAC also has a Corporate Governance Component designated full time to assist its institutions on matters relating to general legislative compliance as well as financial and accounting issues All the other support functions such as HR, legal etc. are also capacitated and are obliged to assist institutions when their specific expertise is required 20

21. 10. DAC INSTITUTIONAL MANAGEMENT CAPACITY (CONT.) An institutional performance management system has been introduced Strategic plans of institutions are aligned with Government/DAC strategic objectives Successful interdisciplinary workshops with councils and executive management in terms of above as well as on PFMA and other Governance issues have been held This system includes a strategic focus on Capital Works 21

22. 10. DAC INSTITUTIONAL MANAGEMENT CAPACITY (CONT.) DAC has established a process of quarterly reporting and concomittant action on –Progress with Strategic Plan –Extent of compliance with strategic plan –Income and expenditure with projections Establishment of processes to improve on Audit Reports Compilation of various Guidelines relating to PFMA and other Governance and Accounting issues 22

23. Thank You 23