Lotto board: It's not our fault

2009-06-29 18:01

Johannesburg - Lotto funds were not distributed to charities due to legislative and procedural issues, the National Lotteries Board (NLB) said on Monday.

However, the NLB did not have the authority to make grants, CEO Vevek Ram said in a statement.

"Distributing agencies, which are committees appointed by the minister of trade and industry in consultation with the other relevant ministers, are the entities entrusted with the making of grants," he said.

"The Board does NOT have the authority to make grants in respect of arts and culture, sports and recreation and charities," he emphasised in the statement.

The NLB was the trustee of the National Lotteries Distribution Trust Fund and had a fiduciary duty to ensure that monies from the fund were distributed honestly, impartially and with the proper due process, Ram said.

Recommendations

The NLB had made recommendations to the department of trade and industry to amend the Lotteries Act to remove certain restrictions which hamper the effective distribution of funds.

The recommendations included creating two new grant categories, namely health and education, which would allow the fund to distribute more money which was not likely to be used by the existing three categories of arts and culture, sports and charities.

The two new categories would replace the defunct RDP category and had been proposed as early as 2004, Ram said.

The NLB also proposed the removal of the restrictions that only juridical persons were allowed to apply for grants.

Reducing turnaround time

The NLB also proposed that members of distributing agencies be appointed on a full-time rather than a part-time basis.

"In the past year, the board has moved into bigger premises, doubled its staff and completely re-engineered the business processes relating to grants.

"Despite these efforts however, the reduction of the average turnaround time of 12 months is unlikely in the short-term given the legislative constraints," Ram said.

However, claims by the NLB that they could not pay needy organisations on time because distribution agencies did not work full-time were untrue, the Sowetan newspaper reported on Monday.

Deputy director general of consumer and corporate regulation at the trade and industry ministry, Zodwa Ntuli, told the newspaper the board had enough staff to process applications.

It emerged in Parliament last week that only 28% of lottery funds - R948m out of the available R3.3bn - had been paid out to beneficiaries in 2009.

- SAPA