The National Lotteries Boards today came across an unfounded and sensationalised press release from the Democratic Alliance. The Board finds it unacceptable and irresponsible that the DA chose to issue a statement without trying to verify its information with the National Lotteries Board and cannot wonder whether the allegations made are a cheap effort at electioneering.

The Board would have appreciated the opportunity to respond to the allegations of the 105 organisations that approached the DA in a manner devoid of sensationalisation. It would be most valuable to ascertain from where the DA obtained its information. Complaints might have been received and the Board has no issue with people who might complain. However, the nature and extent of the complaints have to be investigated and responded to.

In its press release posted on the DA website, the DA claims that ‘no money at all was distributed in 2006’. The NLB challenges the statement and can confirm that in the 2006 Financial Year an amount of R1, 02 billion was paid to 2 500 beneficiaries. We should stress that some of these payments would be part of the multiple-payment allocations to beneficiaries. Information for other years’ is available in the Annual Report of the Board that is presented to every Member of Parliament and also appears on the Board’s website,

The DA further alleges that NGOs are ‘cutting staff, cutting salaries and reducing services’ as a result of non-payment. The Board questions why a payment of over R1 billion can be construed as non-payment. The Board would also like to emphasise that the Lotteries Act clearly states that the proceeds of the National Lottery would be made available for projects of applicant organisations. It is the responsibility of the applicant organisations to therefore ensure that they make provision for the day to day operations.

Every effort is made to process and adjudicate all applications for funding that are received by the advertised deadline in chronological order. The usual turn around time for the process is between two and 12 months. The process of adjudication is not straightforward and uniform. The Distributing Agencies receive individual applications for amounts up to R140 million. Due consideration has to be given to every application and the Board always stresses the need to get in applications and information as soon as possible. The Board as the Trustee of the National Lottery Distribution Trust Fund has to assess the risks of every application to cover issues of conflict of interest, governance, compliance with the Lotteries Act and the PFMA etc.

For any organisation to be reliable on one source of funding for 33% of its operational budget is irresponsible. No applicant is guaranteed funding. We notice from applications we receive that the dependence on the National Lottery for funding is increasing with each year. There are also no guarantees as the focus of each of the sectors could change with new calls for application. The Distributing Agencies are served by representative of the different sectors who have first hand knowledge of the needs of their sector.

It is also incorrect for the DA to say that the National Lotteries Board puts a ‘constraint on NPOs’ ability to raise their own fund’. This is in fact encouraged in order to reduce the high levels of dependence we see. Many international funders actually welcome ‘partnering’ in projects funded by the National Lottery. They see the local funding as an endorsement of the projects they might be interested in. NPOs can still raise funds through competitions and many do.

Through the department of Trade and Industry, the Board has been attempting to set up a meeting with members of the DA in order to explain the processes in order to prevent un-researched utterances causing embarrassment to the DA. Through constructive engagement with the DA and other interested bodies, the Board could also continue to improve its services and ensure that all applicants have equal access to funding.

Finally, the Board welcomes and values input from the country’s leaders and politicians and would appreciate this to be done in a constructive manner that will be beneficial to all.

ISSUED BY: National Lotteries Board
CONTACT: Sershan Naidoo
TEL: 012-432 1303

DATE: 12 May 2008