23 July 2010
South Africa’s Department of Trade and Industry has introduced new regulations that will see National Lottery resources being used increasingly for community and rural development, while also making it easier for first-time applicants to access funding.
The regulations, which fall under Section 60 of the Lotteries Act of 1997, seek to improve the efficiency and distribution of resources of the National Lottery Distribution Fund.
They will also streamline the processing of applications by the National Lotteries board, all the way from application point to payment, in order to make the process more transparent and efficient.
Public, beneficiary concerns
According to a statement by the department this week, a number of concerns were raised by the public and beneficiaries of the National Lottery Distribution Trust Fund that the funds were not reaching its beneficiaries on time, and that there were no effective measures in place for expedient distribution of these funds.
Over and above this, there were concerns that the funds were not being distributed to development of communities that really needed them.
“It is important that the National Lottery Distribution Trust Fund be distributed in a manner that addresses developmental needs in rural, poor and under-privileged communities,” the department said.
Priority funding areas
As a result, Trade and Industry Minister Rob Davies has directed that at least 50% of the funds available for distribution must go to priorities that include the expansion of home-based care services, development of facilities for disabled people, and substance rehabilitation and treatment services.
It also includes sports and recreation for talent development, education designed for early childhood, adult literacy and vocational training.
“These funds must benefit rural development and educational needs in a meaningful manner,” the department said.
Removing barriers to access
Having considered the accessibility of the fund to smaller non-governmental organisations and community-based organisations, Davies has decided to do away with the compulsory requirement for first-time applicants to produce audited financial statements when applying for funds.
“This requirement was onerous and excluded a number of deserving beneficiaries,” the department said.
Organisations that received funding before from the National Lottery Distribution Trust Fund will still be required to produce such audited statements, as required in the Lotteries Act.
Thorough checks on applicants
In order to minimise the risk that may arise with the removal of this requirement, the DTI’s deputy-director general for general, consumer and corporate regulation, Zodwa Ntuli, said that thorough checks would be done on applicants, including site visits and reference checks.
Specific attention would be given to organisations that have a history of failing to account for funds received from other donors and those whose members were previously involved in misusing donor funds.
“Any misuse of funds intended for development of communities will not be tolerated,” she said. “We call upon the National Lotteries Board and the Distribution Agencies to deal severely with people found to be misusing funds, including referring them to the police for appropriate action to be taken.”
The new regulations come into effect on 30 July 2010.
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