The longstanding controversy about funding of a major cultural institution is now receiving official scrutiny. The Department of Arts and Culture has established an audit committee to investigate why Johannesburg’s Windybrow Centre of the Arts appears to be on the brink of bankruptcy.
Windybrow, recognised as one of the premier community arts centres in the country, ran at a loss of R580 600 last year despite receiving R2,4-million from the department and R500 000 from the National Arts Council.
The Public Finance Management Act 1999 states that the responsibilities of accounting officers, in this case the department, are to ensure that “before transfer of any funds to an entity … that entity [must] implement effective, efficient and transparent financial management and internal control systems”.
Questions are being asked about why the department continues to fund the centre, despite clear-cut legislation that requires the head of department to “take into account all relevant financial considerations, including issues of propriety, regularity and value for money”.
Windybrow previously operated as a playhouse under the control of the former Performing Arts Council of the Transvaal (Pact) but registered as a separate Section 21 company in 1998 and is now funded by the department. Ninety percent of the department’s budget is transferred directly to cultural institutions like Windybrow, but is governed by stringent legislation.
The department’s Deputy Director General, Themba Wakashe, confirmed that there are serious problems at the centre. “I am the first to agree that there is this question of the losses. We have raised the issue with the relevant parties and have established an audit committee and appointed an interim financial manager to assess the situation and formulate a course of action to rectify the problems,” he said.
Independent auditors LG Edwards and Company qualified Windybrow’s financial statements last year, suggesting they were incomplete. The auditors’ report said that “due to a breakdown in record-keeping … we were unable to satisfy ourselves as to the completeness and accuracy of the [company’s] accounting records”.
But the department continues to fund Windybrow. The budget vote tabled last month allocated another R2,5-million for the 2002/03 financial year and R3,3-million the following year.
Said Wakashe: “How do we begin to solve the problem? What has become important to us is to bring the centre back on board.”
A former Windybrow employee and a former Pact board member believe the financial problems at Windybrow are a result of mismanagement by executive director Walter Chakela dating back several years. Former general manager Jaki Seroke told the Mail & Guardian he levelled such accusations against Chakela in 1997. He said that his main grievance was that Chakela had used the centre “for his own personal gain and donor deposits were made into his personal account”.
In 1998 the Special Investigating Unit launched an investigation into various allegations, including those against Windybrow. The final report, delivered to Parliament in June last year, revealed that over a two-year period while Windybrow was operating under Pact, Norwegian arts company Nordic Black Theatre deposited R106 000 into Chakela’s private account. Although the investigators concluded that they were unable to “find substantiated proof that Chakela was either bribed or stole any money destined for a state institution”, Meridy Wixley and Arlette Franks — two former Pact board members who blew the whistle on a R24-million Pact slush fund in 1997 — are contesting the unit’s findings.
Asked about the allegations of mismanagement and the transfer of public funds into his personal account, Chakela said, “I am beginning to ask myself what the reasons are for the allegations, which have been around for 10 years. There is no validity in these; Windybrow is simply going through a transitory situation. Forensic audits have been conducted that prove these allegations are not based on any amount of truth … Where people raise money and put it into personal accounts, my goodness, we must get rid of them.” He said the R580 600 is a “deficit rather than a loss” because operational expenses exceeded the budget allocation last year.
Wakashe said: “We have sent a financial manager to assess the situation and it would be unfair for me to start talking.”