PRESENTATION TO THE PORTFOLIO COMMITTEE ON DEFENCE (PCD) on CASTLE CONTROL BOARD ANNUAL REPORT 06/07

1. PRESENTATION TO THEPORTFOLIO COMMITTEE ON DEFENCE (PCD)on CASTLE CONTROL BOARD ANNUAL REPORT 06/07

2. SCOPE The internal control environment and other issues reported by Auditor General (Annual Report 06/07) Questions raised by SCOPA and PCD on 12 March 2008 Recommendations by SCOPA and PCD Feedback from PCD on 4 March 2008

3. INTERNAL CONTROL ENVIRONMENT ASSET MANAGEMENT Inadequate Asset Audit Trail The newly purchased database (Humanities CMD) assists in the process of successfully capturing and managing of assets - 80% captured The marking and numbering of some assets is not always appropriate (too small and valuable to label directly), hence the current procedure of taking photographs of all assets Using the same measures of capturing assets as Iziko

4. INTERNAL CONTROL ENVIRONMENT ASSET MANAGEMENT Physical Stocktaking of Assets Stock takes were not carried out in the past due to a lack of suitably qualified personnel. CCB will establish a specialist team to complete the annual stock take for the 07/08 FY The existing manual database is adequate to ensure an accurate physical count for this FY Asset – Date Purchased All available dates of purchase are currently included in the manual database

5. INTERNAL CONTROL ENVIRONMENT NON-COMPLIANCE WITH REGULATIONS Lack of critical appointments Audit Committee An Audit Committee will be established in cooperation with the AG and Inspector General by 30 May 2008 Internal Audit Function Inspector General (IG) DOD will carry out the internal audit function

6. INTERNAL CONTROL ENVIRONMENT NON-COMPLIANCE: PFMA REGULATIONS Lack of critical appointments Chief Executive Director The Minister will be approached for the appointment of an interim Chief Executive Director Vice-Chairperson The appointment of the Vice-Chairperson has yet to be confirmed

7. INTERNAL CONTROL ENVIRONMENT NON-COMPLIANCE WITH THE CASTLE MANAGEMENT ACT NO 207 OF 1993 Chief Executive Director The Minister will be approached for the appointment of an interim Chief Executive Director Vice-Chairperson The appointment of the Vice-Chairperson has yet to be confirmed

8. INTERNAL CONTROL ENVIRONMENT SUPPLY CHAIN MANAGEMENT POLICY The implementation of the Supply Chain Management Policy has been considered CCB acknowledges lack of policy The shortcoming will be rectified and a policy will be developed by the DOD by end May 2008

9. INTERNAL CONTROL ENVIRONMENT HUMAN RESOURCE PLAN Lack of Human Resource (HR) Plan CCB acknowledges lack of policy 80% of Castle staff is employed by the DOD under its HR Management Plan and function The shortcoming will be rectified and a plan (CCB and DOD personnel) will be developed by the DOD end of June 2008

10. QUESTIONS BY SCOPA AND PCD ASSET MANAGEMENT Complexity of assets management There are various different categories of assets in the Castle, which makes the management of these artifacts a complicated process. The following assets can be found in the Castle: CCB, DOD, Castle Military Museum Trust, Iziko and private. The CCB only takes responsibility for CCB assets. Lack of progress with regards to the valuation of assets No positive feedback can be provided with regards to the valuation of historical assets, as an external valuator is yet to be appointed. The CCB will however contractually appoint a valuator to fulfill these duties.

11. QUESTIONS BY SCOPA AND PCD ASSET MANAGEMENT Transference of assets A complete list of all assets will be available before the transfer of the Castle to DAC. The DOD and CCB are currently in the process op updating the database of all assets situated in the Castle. Security of assets The DOD currently takes all responsibility towards the security of the Castle as guards are seconded by the ASB Western Cape. Maintenance of movable assets The Curator of the Castle Military Museum is a professional museologist and the preservation of artifacts is of the highest quality.

12. QUESTIONS BY SCOPA AND PCD TRANSFER TO DEPARTMENT OF ARTS AND CULTURE (DAC) Structures or mechanisms put in place to manage the transfer to DAC The Castle Management Act Repeal Bill makes provision for the establishment of a Task Team. The Task Team comprises of DOD and DAC members and has established 2 sub committees. The DOD sub committee takes full responsibility for the research and feedback of outstanding issues which will include the development of policies and plans before the transfer can take place. Time frames/deadline applicable to the transfer No deadlines or time frames are available to the DOD or CCB at this stage.

13. QUESTIONS BY SCOPA AND PCD TRANSFER TO DEPARTMENT OF ARTS AND CULTURE (DAC) Envisaged role of the DOD after the transfer The Castle is defence endowment property according to the Defence Endowment and Property Account Act of 1922. The DOD will therefore play a role, it is however unsure of the extent of involvement. Control of Income generated The CCB will continue to control the income generated in the interim period (during the transfer process) until DAC accepts control.

14. QUESTIONS BY SCOPA AND PCD TRANSFER TO DEPARTMENT OF ARTS AND CULTURE (DAC) Possible co-use of the Castle The risk could be shared by entering into a co-use agreement with other government departments. DOD museums/collections The MOD has instructed that it is only the Castle that is being transferred to DAC, and not other DOD museums and collections. The main reason for the transfer of the Castle is that it is not the DOD core business. Sustainability of the CCB The CCB is not self-sufficient as it is unable to afford key personnel.

15. QUESTIONS BY SCOPA AND PCD GOVERNANCE ISSUES (NON-COMPLIANCE) Lack of an Audit Committee (discussed with Internal Control Environment) Appointment of a Chief Executive Director (discussed with Internal Control Environment) Human Resources Management Plan (discussed with Internal Control Environment)

16. RECOMMENDATIONS BY SCOPA AND PCD Quarterly Reports It was recommended by SCOPA that quarterly reports be submitted to them for the purposes of monitoring and advice Co-operation between all stakeholders involved It was recommended that all stakeholders involved in the management and transfer of the Castle co-operate and work more closely together Maintenance of the Castle as fixed asset It was recommended that National Treasury ring fence funds for maintenance and preservation of the Castle, and that these are indicated on DOD’s the DOD balance sheet as a separate item

17. RECOMMENDATIONS BYSCOPA and PCD Conservation of military history It was recommended that the DOD continue to provide the capacity for the conservation of our military history Compilation of a Business/Management Plan It was recommended that the CCB compile a Business Plan Urgent tabling of the Castle Management Act Repeal Bill It was recommended by SCOPA and the PCD that all Castle stakeholders should be consulted regarding the repeal of the Act.

18. FEEDBACK ON ISSUES RAISED BY PCD Transitional arrangements between DOD and DAC to transfer the management of the Castle - As presented Measures taken by DOD to address AG report (Emphasis of Matter) - As presented Lack of Management appointments - As presented Transfer of Military Museums - As presented

19. FEEDBACK ON ISSUES RAISED BY PCD DOD Management and Accountability ito Veterans Associations and Reserve Forces Buildings DOD responsibility and accountability for buildings utilised for military purposes are only applicable to State owned facilities