accompanied ROBBEN ISLAND MUSEUM PRESENTATION 201011 ANNUAL REPORT

accompanied ROBBEN ISLAND MUSEUM PRESENTATION – 2010/11 ANNUAL REPORT TO THE PORTFOLIO COMMITTEE ON ARTS AND CULTURE 12 OCTOBER 2011 1

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 17 th century. • The island was a prison for political and common-law prisoners from the 1960 s to the early 1990 s. • 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. 2

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. 3

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 4

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. 5

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. 6

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. 7

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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. 9

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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 11

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 provision of municipal services. 12

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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 (Pw. C) 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. 14

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 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. 15

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ACTION PLANS TO ADDRESS CHALLENGES • • • 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. 17

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. 18

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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% 20

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 37 m in 2010 financial year to just over R 50 m 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, 7 m in the last quarter of the 2010/11 financial year renovating Houses located on the tourists bus routes in preparation of the UNESCO mission. 21

HISTORICAL PERSPECTIVE OF RIM’s AUDIT OUTCOMES 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 UNQUALIFIED QUALIFIED UNQUALIFIED DISCLAIMER 22

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MATERIAL AUDIT FINDINGS FOR THE 2010/11 FINANCIAL YEAR 1. Irregular Expenditure of R 27, 7 m (2010: R 8, 8 m) was reported; 2. Restatement of Corresponding figures; 3. Material Losses; 4. Inadequate systems of recording performance information. 24

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 25

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. 26

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. 27

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. 28

THANK YOU 29