Formal Submission to the Department of Trade and Industry. On the. Lotteries Policy Review: A discussion document

Transcription

1 Formal Submission to the Department of Trade and Industry On the Lotteries Policy Review: A discussion document Date Submitted: 03 December 2012

2 1. Introduction The Funding Practice Alliance(FPA) welcomes the call for comment on the Lotteries Policy Review document by the Department of Trade and Industry(DTI). This document serves as the FPA s formal submission on the Lotteries Policy Review document. This submission focusses on the structures and policies that guide the adjudication, allocation and distribution of funds from the National Lotteries Distribution Trust Fund(NLDTF) by the National Lotteries Board(NLB) and its committees. 2. The Act and its purpose There is currently no statement of intent regarding the long-term purpose of an NLDTF. What is required is a statement that outlines the kind of society we seek to become, and from this, the kind of activities and initiatives for which the NLDTF funds are earmarked to support work in line with this long-term purpose. It needs to be absolutely apparent from the wording in the Act that this state funding agency is geared to support the growth and development of a particular kind of society. It should also be apparent that the kinds of organisations that will be supported are not only those servicing immediate needs and priorities, but also those whose goals are longer-term in line with the framing paragraph referred to above. 3. Terminology Charitable expenditure, as defined in the Lotteries Act, needs to be redefined in more developmental terminology. It is not clear where this expenditure refers to funders and philanthropic trusts and foundations, and where it refers to welfare organisations (the only specific type of organisation mentioned in the definition). With regard to defining funding areas and naming the particular Distribution Agencies(DA), the phrasing from Charities (in reference to Charity and Welfare) needs to be amended so that there is less emphasis on welfare-based terminology and greater emphasis on a developmental language. Charities is a very limiting term as it implies funding for welfare, immediate needs and providing support from those unable to provide for themselves. There is an enormous breadth of civil society work that warrants funding and support, particularly in the social justice sector focusing on human rights work and advocacy around particular social justice areas represented by the three Distribution Agencies, and needs to be included explicitly under one of the DAs or under a new DA. Likewise, environmental protection and climate change initiatives are fundamentally a human rights issue and should be more explicitly mentioned under one of the DAs or under a new DA. 4. Distributing Agencies 4.1 Appointment of Distributing Agency(DA) members There has been much debate as to the functioning of the DA members in part-time positions 2

3 on the DA s while being employed on a full-time basis elsewhere. The FPA understands that the authors of the Lotteries Act (No. 57 of 1997) decided that it would be appropriate that the DA members adjudicating applications should have an in-depth and current knowledge of the essential requirements of the sectors that the NLDTF funds. While this thoughtful endeavour on the part of the authors of the Act is commendable, it has become obvious that operating in this manner is now an impediment to the efficient and effective operations of the NLB and the distribution of funds from the NLDTF. It is noted that on page 3 of the Lotteries Policy Review document(1 st bullet point) it is recommended that the Distributing Agencies should be appointed on a full-time basis. The FPA therefore submits that any new structural amendments to the functioning of the DA s should lend itself to processes that are transparent so that all relevant stakeholders are able to hold the DA s accountable for all the decisions taken by the DA s. 4.2 Distributing Agency Accountability As the NLB is the trustee of the funds in the NLDTF and is responsible for administering the funds, the FPA agrees with the proposal on page 17, clause 3.3.2, of the Lotteries Policy Review document that DA s should be legally accountable to the NLB regarding all the decisions that they make in their respective positions as DA s, as well as all their operations and functions. 4.3 Distributing Agency operational structure The establishment, nomination process, required skills set and profiles of prospective DA members needs to be adequately addressed in the Lotteries Act. The responsibility of the DA s is an integral part of the effectiveness and efficiency of the NLB and the distribution of funds from the NLDTF, their operations, functioning, management and accountability within the organisational structure of the NLB needs to be made clearer. It is currently unclear as to how the DA s make their decisions as to who to fund and to what amount, a better understanding of the values and information that guides these decisions is required. The NLB should also make public the profiles of existing DA members, including who they were nominated by, a record of their experience and knowledge of the respective sectors that they will be representing, their employment history, and why they were selected for the position. 5 Review and Appeals process The lack of an official review and appeals process has led to several civil society organisations employing legal professionals and approaching the courts in order to have decisions regarding their funding applications reviewed. This means that vital funds that could have been used to fund the work of civil society organisations has been diverted to litigate in instances where an internal review and appeals process should exist. The FPA welcomes the proposal on page 17, clause 3.3.3, of the Lotteries Policy Review document that the Lotteries Act should be amended to allow for the establishment of a review mechanism within the NLB. However, the FPA, requests that the grounds on which a review or appeal may be requested by a civil society organisation should be guided by a policy that is clear, transparent and easily accessible, unlike the current process that exists. 3

4 6 Monitoring and Evaluation The FPA supports the recommendation that the NLB should be in a better position to conduct monitoring and evaluation inspections with organisations that receive funding from the NLDTF. However this process should be viewed as an opportunity to empower organisations to ensure that the projects for which they receive funding from the NLDTF are consistent in documenting the expenditure on these projects. In addition, in order to ensure that the process of monitoring and evaluation is as efficient and effective as possible, the NLB will have to ensure that staff deployed to conduct monitoring and evaluation exercises possess the correct skills set to implement these within the social development sector. 7 Categorisation of grants The FPA welcomes the proposals in clauses to of the Lotteries Policy Review document as the level of detail in these proposals prove that a lot of thought and care has been taken in drafting these recommendations. With regard to clauses to of the Lotteries Policy Review document, the FPA suggests the following: That the application process and documentation required for each proposed category, as detailed in 3.5.3, and should differ in complexity depending on the size of the grant requested; That the assessment and reporting mechanisms and documentation required should be dependent on the size of the grant disbursed or the category of the grant; That the NLDTF does not grant funds for amounts greater than R2 million in order to ensure that the limited funds available within the NLDTF are distributed as widely as possible and spread amongst a greater number of projects and organisations; Particularly with regards to clause of the Lotteries Policy Review document, that organisations may only apply for funding from NLDTF funds once per annum; Particularly with regards to clause of the Lotteries Policy Review document, the FPA welcomes this proposal and suggests further that these turnaround times should be formally published and made available on the NLB website in order to allow civil society organisations to monitor the progress of their applications and stakeholders to monitor the NLB s efficiency in distributing public funds. 8 Disbursement of funds The FPA supports the recommendation that the NLB should clearly articulate its internal processes, systems and operations towards ensuring optimal service delivery standards as outlined in clause of the Lotteries Policy Review document. The FPA submits that this articulation should clarify the roles, responsibilities and procedures of all the units and departments within the NLB. Furthermore, the FPA requests that this articulation should be formally documented and published on the NLB website in the interests of transparency. 4

5 8.1 Calls for applications The FPA submits that the NLB, should consider staggering the call for applications throughout the year. This could assist in preventing the bottleneck of receiving up to 7000 applications at one time of the year. Furthermore, the NLB should publish the dates on which applications will be received throughout the year at the beginning of each year so that organisations could plan to submit their application at a time that is aligned to the start of their respective project funding cycles. The fact that the DA s publish specific funding priorities within each broad DA funding area on an annual basis also needs to be published at the beginning of the year to enable organisations to plan their project activities and develop their funding applications well in advance of the deadline for receiving applications. The DA s should also provide the public with documentation on how the decision on specific funding priorities for that year was made. 8.2 Multi-year funding The consideration and approval of a greater number of multi-year grants would also assist to reduce the number of applications received yearly by the NLB. As is standard practice in the funding sector with the approval of multi-year grants, the FPA acknowledges that the payments, reporting requirements and monitoring and evaluation requirements of these grants would be different to those of annual or project related grants. 8.3 Proactive Funding The FPA objects to the proposal in clause of the Lotteries Policy Review document that the Distributing Agencies should be allowed to adjudicate proactive grants. Civil society organisations that work directly with communities have a better understanding of the needs within these communities. It is therefore not necessary for the NLB to conduct its own research in order to determine the priority needs within communities. The NLB should instead focus on ensuring that organisations are aware of the policies and procedures of applying for grants from the NLB. The sentence, Consideration should also be given to Government priorities in determining the needs, clause 3.6.3, implies that the work of civil society organisations is not aligned to government priorities. The FPA submits that this phrase is not necessary, as civil society organisations are established for the public good and all their activities are geared towards improving and uplifting communities. The issue of funding National Priorities is again attended to on page 30 of the Lotteries Policy Review document in the 4 th bullet point. The FPA would like to clarify that the purpose of civil society organisations is not to implement government priorities. This does not mean that the work of civil society organisations is against the national priorities as determined by government. However, a statement within the Lotteries Act that explicitly states that the allocation of funds should be informed by national priorities fails to take into account that civil society organisations are guided by the needs of communities and society and are 5

6 strategically placed to respond to these needs. The allocation of funds from the NLDTF strictly according to national priorities would change the entire nature of the civil society sector in South Africa as organisations would no longer look to communities to assess the greatest needs of society. Instead, the NLB should undertake to host consultations with the civil society sector every five years to discuss the state of development in the country and re-assess the priority needs of South African society and communities. These discussions with the civil society sector should form the basis on which funding priority areas for the NLDTF are determined. In addition, it should be absolutely clear that local, provincial and national government and other state agencies, do not receive funding from the NLDTF, and that NLDTF funding is ringfenced for supporting the development of a strong civil society rather than serving as budget relief for government. 9 The NLB and the licence to run the national Lottery The FPA is concerned with the statement by the NLB chair earlier this year, through a NLB press release, following the resignation of the NLB CEO (Mr Vevek Ram), that Mr Ram s resignation was accepted and that Mr Ram has expressed an interest in the next lotto licence that is due to begin in Even though the FPA would not ordinarily concern itself with the NLB s role as the regulator, there is a concern that there is no policy on a cooling off period for senior staff, board members and DA members of the NLB. This concern is guided by the fact that bids for the new lotto licence may affect the percentage of funds due to the NLDTF from the sale of lotto tickets. The FPA therefore submits that senior staff and board members of the NLB should be subjected to a cooling off period of at least 5 years in which they may not be involved in any bidding process with the NLB. 10 A State run lottery? The FPA is concerned should there be any proposals for the lottery to become a state run lottery. Funding from the NLDTF is important to the strengthening and independence of the civil society sector in South Africa. Civil society organisations in South Africa have been effective because of their ability to respond to the needs within our communities and South African society. The fact that organisations do not have to align their projects with a particular funder s agenda and can focus specifically on the needs of their beneficiaries is because of the independent nature of the civil society space. The NLDTF has been able to provide funding to civil society organisations in a manner that ensures that they maintain their independence. A state run lottery that would determine funding criteria according to government priorities would severely curtail this independence. The FPA submits that the NLDTF s independence should be maintained in order to continue to support an independent and robust civil society sector. 11 Conclusion Overall, the FPA is encouraged by the detail and effort that has determined the issues outlined in the Lotteries Policy Review. It is important that the NLB recognises that as a body legislated to distribute public funds they are accountable to the public, the NLB should make a greater effort 6

7 to ensure continuous transparency on the success of their operations. The FPA recommends that all processes, policies and structures within the NLB should be amended to be as transparent as possible so that all stakeholders may be able to monitor the work of the NLB and hold the NLB to account as custodians of public funds. 7