The board of the Downtown Music Hub (DTMH) has rejected the Auditor-General’s (AG) findings, calling them inaccurate and misleading.
On October 14, the AG reported to Parliament that the grant provided to DTMH was allegedly misused for operational expenses rather than its intended purpose.
In response, the DTMH board has challenged the AG’s claims. It insists that the AG must first verify whether the Department of Sports, Arts and Culture (DSAC) submitted the correct documents. The board maintains that DSAC misplaced key records on two occasions. This may have resulted in the AG’s findings being based on incomplete information.
Factually inaccurate information
“We believe it is not factually accurate to suggest that funding was allocated strictly according to the department’s guidelines. If the AG holds a differing view, we recommend addressing this inquiry directly with the DSAC,” said the board.
The board further stated that they have consistently reported their financial activities to DSAC. And they have never been informed of any irregularities.
“In fact, the DSAC has frequently expressed satisfaction with the reports submitted by DTMH. The DTMH was informed by the DSAC that an audit of the funds allocated to DTMH was being conducted. In response, we expressed our complete willingness to cooperate with the audit process.
“During this time, the DSAC requested specific quarterly reports from 2022 to 2024. [These are] typically found in lever-arch files. This request raised concerns for DTMH, as we have consistently submitted original copies of all transaction documentation to the DSAC on a quarterly and annual basis. We retain only copies for our records. For this reason the DSAC was expected to have all these comprehensive records,” the board said.
They added that DSAC had lost key documentation on two separate occasions.
Only duplicate copies available
“We inquired why the DSAC could not access this information from their own files. A DSAC official informed us that, regrettably, ‘our files have been misplaced. This situation was unsettling. However, in our commitment to fully support the audit, DTMH management proceeded to provide the DSAC with our version of the files. Namely, copies of the original documents that had already been submitted.
“Subsequently, we received another surprising communication from the DSAC. It stated that the borrowed files were missing supporting documents related to transactions of a certain period. While DTMH management found this claim difficult to believe, we continued to fully cooperate with the audit requests.
“This necessitated reaching out to both the bank and the respective service providers to obtain the required documents. For the sake of transparency, we ensured that DSAC officials were copied in all email correspondence during this stage of the audit process.
“Consequently, they were kept informed of the documents resent by the service providers. These include documents from DTMH’s auditors and accountants. This cooperative effort continued until the DSAC communicated that the audit had concluded. With plans for a report to be presented to the Parliament Committee,” they explained.
Access to AG’s report
The board also expressed concern that they were not given access to the AG’s report before it was presented to parliament.
“We were only informed in early August that the investigation conducted by the Auditor-General’s Office has been concluded. And that it would be presented in Parliament. When the acting chairperson of DTMH requested access to this report, the DSAC declined. This refusal has raised significant concerns for us,” they said.
According to the board, before the hub’s operations ceased. DTMH had already begun implementing a self-sustainability plan that had been communicated to DSAC.
“We anticipate that if implemented, within the next three years this business plan will significantly reduce our dependency on DSAC funding,” they said.
The board also rejected the AG’s assertion that the grant was intended to fund artist performances.
“It is important to note that the grant allocation was never intended to financially support artists within the context of R6-million or R4-million per year,” they said.
Questions were sent to DSAC but they had not responded by the time of publishing.
