Department of Communications 2009/10 Audit Outcomes by Auditor-General; Department on its 2009/10 Annual Report & 1st quarter 2010/11 performance

Meeting report

Opening Remarks
The Chairperson noted an addition to the agenda with a presentation by the Auditor-General's Office, who would be commenting on the Department of Communications 2009/10 audit outcomes.

Communications Sector 2009/10 Audit Outcomes: briefing by Auditor-General's Office
Ms Corne Myburgh, Business Executive: Communications Portfolio in Office of the Auditor-General, looked at outcomes for the Department and the public entities within the sector which were the South African Broadcasting Corporation (SABC), Sentech, the Independent Communications Authority of South Africa (ICASA), the National Electronic Media Institute of South Africa (NEMISA), the Universal Service and Access Institute of South Africa (USAASA), the Universal Service and Access Fund (USAF), Telkom and the South African Post Office (SAPO).

The Department, ICASA and Sentech were given qualified audit opinions by the Auditor-General. Telkom and the SAPO received an unqualified audit opinion and there were no findings on compliance with laws and regulations. NEMISA, SABS, USAASA and the USAF were found to be financially unqualified with no findings on predetermined objectives or compliance with laws and regulations. Both Sentech and the Department had regressed while the SABC had improved its performance. Telkom and the SAPO showed improvements in their oversight responsibilities and the actions they had taken to mitigate risks; while ICASA and Sentech showed that they needed to improve on their oversight and on mitigating risks.

The Auditor-General noted that there was an improvement in financial statements of certain entities and as a result, the financial statements were reliable and of good quality. These entities included NEMISA, the SABC, Telkom and the SAPO. The Department, ICASA, USAASA, the USAF and Sentech needed to improve their Annual Financial Statements. Entities that were required to improve their record keeping included the Department, NEMISA and the SABC. The Department, ICASA, USAASA, the SABC and Sentech were found to have inadequate financial systems in place. The Department had to improve its risk identification and fraud prevention plan. ICASA’s risk identification and internal audits were found to be less than satisfactory. USAASA needed to improve its risk identification processes while the SABC had to improve its internal audit processes.

Entities that received qualified audit opinions received them due to proper processes not being implemented to identify and record unauthorised, fruitless and wasteful as well as irregular expenditure. Qualifications that were received on accounts receivable and payable primarily related to entities not obtaining sufficient and appropriate evidence to support the amounts disclosed as receivables and payables. In terms of accruals, many entities did not have a system of control over the recording of outstanding invoices at year end. Some entities also did not have contract management systems in place for the identification and recognition of contracts.

The findings on reporting of predetermined objectives showed that the SABC and Sentech did not comply with regulatory requirements, and NEMISA and the SABC reported information to the Auditor-General that was not reliable. In terms of findings on compliance with laws and regulations, the Auditor-General found that the Department, SABC, and USAASA did not immediately report the particulars of irregular expenditure that was discovered to the National Treasury. The Department and USAASA did not implement effective and efficient processes of financial risk management to prevent and detect irregular expenditure. The Auditor-General also found that ICASA had not paid its suppliers within thirty days of receipt of invoices. The Department’s fruitless and wasteful expenditure amounted to R51 000 while its irregular expenditure amounted to R 28 111 000. The Department only disclosed the amount of R1 040 000 to the Auditor-General as irregular expenditure. The Auditor-General identified an additional expenditure of R27 071 000 during the audit. The SABC’s fruitless and wasteful expenditure amounted to R70 476 000 for the financial year, while its irregular expenditure amounted to R187 255 000. Sentech accumulated an amount of R31 000 000 for fruitless and wasteful expenditure and an amount of R14 000 in irregular expenditure.

Discussion
The Chairperson thanked the Office of the Auditor-General. The Committee would not be making any comments on the presentation, but they appreciated the view put forward by the Auditor-General's Office.

Mr S Kholwane (ANC) said that he was shocked at some of the information contained in the presentation. It was going to be difficult for the Committee to engage with the document now as Members had only just seen the presentation. He asked if the Committee could break for ten minutes to recover from the shock.

The Chairperson granted the ten minute break.

After the break:

The Chairperson announced that the Committee did not want to engage in discussion on the presentation. The presentation would serve as background information.
 
Department Briefing on its Annual Report
The Chairperson stated that the Committee had been noticing developments within the Department and there were a number of matters of concern to it. Today’s meeting was an opportunity for Members to receive a thorough briefing on the current state of affairs within the DoC, to interrogate the information and to exercise its oversight role over the Department. The Committee knew that certain functions in the Department were not working well and it was its responsibility to hold the officials and administration within the Department accountable.

Dr Harold Wesso, Acting Director-General: DoC, said that many of the officials were still in acting positions. This matter had to be addressed for the purpose of securing institutional memory. It seemed that the media had a negative perception of the Department. Today, he could say that his team had succeeded in stabilising the environment within the Department. He thought the Department was more functional and productivity was on the increase. The Department was meeting its targets and there was a general positive feeling emerging within the institution.

Dr Wesso said that all the projects undertaken and reported on during the 2009/10 financial year, across all six programmes of the Department, were focused towards achieving the goals and objectives set out in the 2009-2012 Medium Term Strategy. He recounted achievements for each of these priorities:

Information and Communication Technology (ICT) policy development
The Integrated National ICT Policy was approved and a draft concept paper on the integrated ICT policy framework was developed. However, the National ICT Policy was not finalised and approved largely due to human resource capacity constraints. The Draft Public Service Broadcasting Bill was published for comments in the last quarter and the SAPO Bill was approved by Cabinet in November 2009 and subsequently introduced into Parliament. The Digital Dzonga Council was formerly launched by the Minister who approved the establishment of the Digital Dzonga as a government component in August 2009. The Draft Set Top Box (STB) manufacturing sector development strategy was developed and gazetted for public comment. Unfortunately no STBs were distributed as manufacturers were dependent on the finalisation of the STB manufacturing sector development strategy. The South African Postbank Bill was approved by Cabinet in October 2009, introduced into Parliament and debated. In terms of the Meraka e-Skills Institute, the Further Education and Training (FET) ICT skills programme was made in collaboration with Microsoft and Cisco. The curriculum guidelines were approved and completed in collaboration with the Department of Higher Education and Training.

ICT Infrastructure Development
This focused on developing a draft Broadband Policy and draft National Broadband Strategy. The policy was not approved by Cabinet on its first submission as it was recommended that further deliberation should take place in an Inter-Ministerial Committee. An Integrated ICT Infrastructure Audit was conducted and a draft ICT infrastructure audit report was developed. An audit on Dinaledi schools was conducted to assess the state of readiness for connectivity in the schools. The Department engaged various network operators to discuss connectivity to Dinaledi schools; however, the process was hindered due to funding constraints. A National Connectivity Plan was finalised and approved by the Human Development Cluster for e-schools. The Department was engaging with the National Treasury and USAASA to utilise the USAF to fund the connectivity of schools. A revised National Internet Policy was drafted and took into consideration other initiatives that supported the realisation of the Internet Policy objectives.

ICT International Affairs and Trade
The Department strengthened relationships with African multilateral organisations and SADC ICT structures. They also strengthened bilateral relations with other African countries.

Presidential National Commission (PNC)
No progress was made on the Inter-Ministerial Information Society and Development (ISAD) Committee as an analysis had to be conducted on the future relevance and viability of the inter-ministerial ISAD Committee. The Minister approved the reconstitution of the South African e-Skills Council. The PNC provided secretariat and professional support to the council and its working group. The Limpopo, Northern Cape and North West provinces were supported to develop and implement ISAD measurement initiatives. An ICT indicator study was conducted to understand the status of ICTs in each province.

ICT Enterprise Development
1.5 million locally manufactured STBs were distributed in the market and 3500 Small Medium and Micro Enterprises (SMMEs) were accessing and using ICTs for the first time. Fifteen ICT business linkages were facilitated; however, they were delayed due to administrative adjustments.

Corporate and strategic plans of State Owned Entities (SOEs) were received and reviewed as well as shareholder compacts. The Minister instituted a Turn-around Task Team for both Sentech and the SABC to review their corporate plans. Quarterly performance reports of SOEs were analysed and feedback was prepared for the Minister’s consideration. Meetings were held with some SOEs to discuss their performance. Implementation of the corporate governance review report by SOEs and compliance with applicable protocols and legislation were monitored through quarterly reports submitted by SOEs.

Governance and administration within the Department
The Department formed part of a working group, comprising of Digital Dzonga members, which focused on various elements of Broadcasting Digital Migration (BDM) awareness. The Digital Dzonga was officially launched on 21 July 2009. The BDM public awareness programme was put on hold as it was being reviewed to ensure the best and most cost effective approach. Substantive progress was not made regarding leadership development; however, the Department developed a draft leadership charter as well as a leadership model. The Employment Equity Plan was developed in consultation with the departmental Employment Equity Consultative Forum (EECF. By the end of the reporting period, the Department had achieved 41.57% gender representivity and 2.6% representivity of people with disabilities. Thirty interns were appointed from 1 June 2009 and the Department compiled a Workplace Skills Plan and an Annual Training Report in line with Sector Education Training Authority (SETA) requirements. Various employee wellness initiatives were undertaken through the implementation of the Employee Wellness Programme. Of the 429 total numbers of posts within the Department, 159 were vacant.

Financial Report for 2009/10
Mr Sam Vilakazi, Acting Deputy Director-General: Financial and ICT Enterprise Development, stated that the financial statements were prepared and timeously submitted to Treasury, Auditor-General and Audit Committee. The Department administration programme spent 99% of the budget allocated to it; 90.5% of the budget allocated to the ICT International Affairs and Trade was spent while 75.4% of the budget allocated to the ICT Policy Development Programme was spent. Of the amount allocated to ICT Enterprise Development, 94.2% of the budget was spent, 82.9% of the budget allocated to ICT Infrastructure Development was spent, while the PNC spent 81.7% of its budget.

The Department received a qualified audit report due to the payments that were made and contracts entered into in contravention of the supply chain management regulations. The bulk of these irregular expenditure items related to prior years. The actual value for irregular expenditure amounted to R24 million. The Department had responded by reviewing all finance and supply chain management policies. They also instituted disciplinary processes against officials that transgressed the law. Training on the Public Finance Management Act, supply chain management and budget processes for all senior officials was made compulsory and the capacity of the internal audit unit was increased to ensure that non-compliance would be detected. Key positions in the supply chain management unit were being filled to ensure strict monitoring and compliance with legislation and relevant National Treasury regulations.

Department’s Organisational Performance against the Strategic Plan: April 2010 to date
Dr Wesso explained that the Department’s 2010-2013 strategic plan was in line with the Medium Term Strategic Framework that was informed by the electoral mandate period, 2009-2014. The Department identified 135 targets for the 2009/10 financial year of which 80 were identified as flagship projects because they appeared in the Minister’s budget vote speech and Performance Agreement. In terms of progress made at the end of mid-year, 53 (39%) of targets were on track while 74 (55%) were in progress. No progress had been made with 8 (6%) of the targets.

In terms of the legislative programme, the South African Postbank Bill was passed by National Assembly and was currently being deliberated on by second house of Parliament’s Select Committee on Labour and Public Enterprises. The ICASA Amendment Bill was approved by Cabinet and published for public consultation. The Integrated ICT Policy framework, the Public Service Broadcasting Bill and the Electronic Communications Amendment (ECA) Bill were also in progress.

The report discussed progress made to date with infrastructure in the sector. Digital Terrestrial Television (DTT) infrastructure roll-out showed that 33% coverage of the population was achieved. A rollout plan from Sentech showed that the project was on track to achieve 60% population coverage by April 2011. A draft broadband legislation and provincial as well as municipal guidelines have been developed.

Progress was also made on SOE oversight. A monitoring task team was established to monitor the performance of the SABC in compliance with conditions of the Government Guarantee. They would report progress and early warnings to the Minister. Bilateral meetings were being held between the Minister and the boards of the SOEs. This was a forum for discussing critical issues between Directors-General, Chief Executive Officers and SOEs. The Department was in the process of developing guidelines for the remuneration of boards of SOEs and ICASA. They were also reviewing the financial controls of ISAASA, NEMISA and ICASA. An analysis of quarterly and annual reports as well as financial statements was being conducted to assess the performance of SOEs. This would include their financial and operational performance and would allow the Department to take note of early warnings. The Department wanted to facilitate the alignment of SOE plans with government priorities. A Ministerial Task Team was appointed for the turnaround of the SABC and Sentech, which made specific recommendations for the turnaround of Sentech and developed a turnaround plan for the SABC. The new board of Sentech developed a 2010/11 turnaround strategy based on the task team recommendations.

In terms of Broadcasting Digital Migration, the Digital Dzonga Council was re-appointed and is functional, and BDM strategies were finalised.

Some of the challenges included prolonged internal decision-making processes, human resource capacity constraints, and departmental instability due to low staff morale, suspension of key senior managers, and ad hoc re-deployment of staff within the Department. This had esulted in delays in projects and related expenditure.

At this point in time the Department has stabilised. Management structures were put in place and were functional resulting in effective decision making and periodic performance reviews. The recruitment and filling of critical posts has commenced and the Organisational Review Process was concluded. Oversight on SOEs was being prioritised. This would result in the improvement in project implementation and expenditure.

The Department discussed its expenditure for the first six months of the 2010/11 financial year. So far, the actual expenditure (as at 30/09/2010) has amounted to 26.21% of the Department’s adjusted appropriation. Only 11.61% of the budget allocated to ICT Infrastructure Development has been spent so far. They explained that the under-spending for the first six months of the financial year 2010/11 was mainly under the current payments. This was due to capacity constraints and the delay in the implementation of the projects. However, management has taken corrective action by prioritising and implementing key projects.

Discussion
Ms N Michael (DA) said that she felt sorry for Dr Wesso because his honesty got him into trouble sometimes. She thanked him for not hiding any of the Department's problems. The amount of acting positions within the Department was frightening, especially the fact that there was an acting Director-General. The Department's employees had low morale because they did not know how long they would be around for. There was a lack of leadership, which meant it was difficult for employees to “plant their roots”. This was terribly worrying. Dr Wesso had explained to the Committee that people were appointed to positions that they were not fit for. If this was the case, then the person appointing these people had to be suspended as well. There was a serious lack of accountability within the Department. Technology was power and if the Department wanted to empower the country and its citizens, they had to teach people how to use technology, especially in rural areas. This was the only way people would be able to be at the level of people living in developed countries such as Finland where their technology was so advanced. Access to technology and access to broadband, in this day and age, was a basic human right. South Africa was 10-15 years behind developed countries in terms of technology. The Annual Report showed that only 11.6% of the allocated budget was used for the development of Information and Communication Technology (ICT). This was scandalous.

Mr S Kholwane (ANC) said that there seemed to be a clear understanding of what the Department's vision and mission was. There were certain Millennium Development Goals that had to be achieved and the country was clear on where it wanted to go with ICTs. The Department's vision and mission seemed to talk to this goal. The problem was that the Department did not know how to achieve these goals. If the Committee looked at some of the countries that were succeeding in building an information society, they would see that the solution was to get all the various and critical stakeholders in the sector to work together. Part of the problem was that the basic principles of a participatory democracy had been abandoned. People in the country had to contribute in shaping the sector. He asked if this meant there should be a review of departmental processes so there could be new processes that encompassed all critical stakeholders. Would this happen in a vacuum or in a policy framework? It was unfortunate that the policy section of the Department did not seem to have a tail and a head. The Department was conducting an organisational review. He wondered what would happen if the Department did not agree with the terms of reference of the organisational review. He did not want this to end up being just another irregular expenditure. The Director-General would be responsible for the irregular expenditure. Was it worth it to continue the review or would the Department instil policies to address weaknesses so they could achieve their policy objectives? Part of the capacity of the Department was to internalise the King III report. State Owned Entities (SOEs) also had to be in line with those reports. It seemed that the responsibilities of the Department and SOEs were sometimes confused. He thought the department report would cover the SOEs in more detail. The Department was accountable for the SOE activities. He felt that the Department was “contracting out” their responsibilities as a Department to manage SOEs. He did not think this was right. The SOEs had to deal with their own issues, but it was the Department's responsibility to perform oversight over the SOEs and to intervene when necessary. The King Report did not reflect the challenges in the SOEs. The Annual Report showed that people were not reporting irregularities and that the Department had reached an out of court settlement with one of their employees. What did this mean? Where was the seriousness in dealing with the problem of financial irregularities? Who was the Committee supposed to hold accountable? This made the Committee feel like the Department was not serious about solving the problem of financial irregularities. He wondered if the Department had the correct personnel in place to fulfil its mandate. The Committee wanted a skills audit in the Department. Quite some time ago, the Committee said that the PNC should be reviewed. The Department seemed to agree; however, the PNC was still operating as usual.

Dr Wesso responded that the concept of the participatory democracy was very important. The way people participated in the past was no longer the way they would participate in the future. There was so much modern technology in the social media. Unless the Department had more capacity and thought leadership, they would not be able to build this technology into the country's policy strategies. As a result, the youth would not know what was happening in the sector.

Dr Wesso replied that he did not think that policy processes had to be reviewed. The Department had to look at moving forward so they could perform their functions properly. The government also needed to focus on evidence-based policy, instead of implementing policy on an ad hoc basis.

He said that the organisational review was something that the Department inherited. There was a term of reference and the idea was that, at some point in time, the organisation should be restructured because there were so many instances of overlapping and duplication. The review would start with the mandate and work its way through until the structure was aligned with the mandate. The Department would accommodate what they learnt from the review into their new strategic processes.

Dr Wesso said that performing oversight on the SOEs was not rocket science. However, the way the Department related to and reported on SOEs had to be re-defined. The reporting structure was too activity-based and not outcomes-based.

Mr Sam Vilakazi, Acting Deputy Director-General: ICT International Affairs and Trade, addressed the matter of the out of court settlement and financial irregularities. The Department decided upon an out of court settlement because the legal costs that were going to be incurred were likely to be very high. This did not take away from the fact that there had been wrongdoing and the Department had now sought legal advice about what they should do once a person has left the Department after engaging in some sort of wrong doing. The Department knew there were ways and means of dealing with this kind of situation.

The Department was also given a qualified audit opinion due to the existence of irregular expenditure. This matter emanated from previous years. Approximately 82% of the irregular expenditure was incurred in 2006. Unfortunately, the Department had to suffer as a result of this. The Department has decided to look into each and every case of irregular expenditure. There were various other corrective measures that would be implemented. The Department was taking the matter very seriously.

Ms J Killian (COPE) said that she thought the Department was in deep crisis. The communications sector was an industry that could contribute greatly to the country's economic growth. The Department had to focus on what was stopping them from fulfilling their objectives. The Department could not lose sight of its vision to bridge the digital divide and give people access to information via broadband. If they did, they were letting the country down. She felt that the Department has imploded and feared that there was a serious leadership problem within the institution. The Department needed proper financial managers and realistic goals. She thanked Dr Wesso for admitting at a previous meeting that the Department was a “sinking ship”. The Committee now understood what he was talking about. The Department had a very high vacancy rate. They had to fill these positions with suitably qualified people. A skills audit had to be conducted alongside the organisational review process. If the Department did not demonstrate leadership and the ability to manage itself, it would never receive any kind of credibility. The Auditor-General’s audit report was clear that the Department had to improve on their audit outcomes, financial and performance management. There was a serious problem with record keeping and having adequate systems in place. The Department had to focus on getting SOEs back on track as well. They had had to actively oversee that SOEs were fulfilling their objectives. ICASA has had repeated qualified audit reports over the past few years. Clearly, there was a leadership crisis in ICASA as well as in other SOEs. The SABC had a capacity problem as well as a leadership problem. She wondered if it was necessary to reprioritise the Department's programme activities, and to reprioritise their expenditure accordingly. It seemed that the Department's six programmes were not coordinated. She asked if the Department attended international conferences and what the input was from those conferences. Was the Department projecting South Africa as a leader? The Department needed to reprioritise its programmes even if it meant that they needed to hire management consultants. She suggested that ICT should be made a presidential priority. What was the Department doing to develop skills in the sector? Did the Department interact with universities to ask them to invest in e-skills programmes?

Dr Wesso replied that the Department was doing its best to fill all the vacancies. If he looked at where the country had to be in ten years time in terms of the ICT sector, it was clear that the country did not have the skills right now. The Department was a very reactive institution, but this was not the way to go. The Department had to look at where it wanted to be in ten years time and how it would get there. They also had to look at the needs in the sector and how they would put together legislation to deliver on their objectives.

There were a number of concerns about leadership within the Department. Leadership as well as “thought leadership” was necessary within the Department. The Department would not be able to mobilise stakeholders if they could not lead them. Thought leadership had to be developed in the ICT sector. The Department needed partnerships with all necessary stakeholders in the sector.

Dr Wesso answered that the Department had signed Memoranda of Understanding (MoUs) with five universities in South Africa, with ten in Australia, one in Cuba and one in South Korea. The Department wanted to customise what these universities did to suit South Africa's situation.

Mr Norman Munzhelele, Acting Deputy Director-General: Policy Development, added that the Department had to look at ways to strengthen the capacity of the SOEs. They also had to look at separating policy making issues from policy implementation, and strengthening corporate governance.

Ms R Morutoa (ANC) said she was shocked at the position that the Department was in. She asked if the Department had included the South African community in the production and manufacturing of STBs and what the Digital Dzonga Council had achieved since their re-appointment. What was the Department doing about the ECA Amendment Bill?

Mr Munzhelele replied that the Digital Dzonga model was taken from a model used in the United Kingdom and adapted for South Africa. The Minister appointed some new council members to the Digital Dzonga Council. The Department was liaising with the Department of Public Service and Administration (DPSA) to establish Digital Dzonga as a government component as required by the Public Service Act. The model will clearly articulate the roles and responsibilities of the various stakeholders in the sector.

Ms Rosey Sekese, Deputy Director-General: ICT Infrastructure Development, added that the Minister appointed the Digital Dzonga Council. But, what was more important was that the Digital Dzonga Office had to be established. The Department advertised the positions of the executive director and senior managers last week. The Department recognised the urgency for implementing digital migration. At the moment, the council was in the process of advising the Minister on the implementation of the digital migration programme.

Mr Munzhelele explained that the Department's understanding was that their policy branch was going to look at the current scenarios within the telecommunications, broadcasting, e-commerce and postal sectors. There was a white paper and green paper on e-commerce. The Department looked at the ECA and realised there was a policy vacuum, in the way that the ECA did not have a policy framework. This posed challenges for the implementation of that law. The postal service, globally, was being integrated into the broader ICT sector. The e-dimension looked at modernising how postal services were provided by postal administrations. The sector was moving into the ICT sector and required a different way of thinking about how it would form part of the mainstream sector. The Department realised it needed to review the policy environment even if it had to go back and look at all the white papers. The Department wanted to create a new vision going forward. However, the issue of the ECA Bill was not necessarily in the Department's programme. The Department did not want to do an overall amendment of the law. They wanted to look at what had to be done given the lessons that the Department had learnt over the past few years. They also wanted to rectify certain issues so the regulator could be properly capacitated.

Ms W Newhoudt-Druchen (ANC) wanted the Department to elaborate on the ICT skills programmes in FET colleges. How many students registered for the programme and how many graduated? Were any persons with disabilities involved in the programme?

Dr Wesso explained that programme would require collaboration with universities. The concept of e-skills was new in South Africa. The Department signed MoUs with 22 FET colleges. This was supported by the Department of Higher Education and Training. There were 2000 students enrolled in the project in FET colleges. This year, the Department would be able to train more people. A wide range of students were included in the project, including disabled persons. The Department would provide the Committee with these details.

Mr N van den Berg (DA) wanted to know what progress the Department had made with the DTT programme. What point was the Department at in terms of rolling out broadband? He was sure that the communications industry was willing to help the Department in closing the 10-15 year technology gap, but more leadership was needed from the gap. Everyone would understand ICT better if the Department could tell them where the country was in terms of ICT.

Ms Sekese explained that the Minister had made a presentation on DTT on 2 June 2010 where he reported that SADC would lead discussions on the standards of DTT that would be adopted. South Africa, as a country on its own, could not just adopt a standard different from other countries because it had implications for managing co-ordination. The country was bound by how SADC manages its meetings.

Ms M Magazi (ANC) questioned the reliability of the information the Department gave to the Auditor-General. This made her wonder about the characters of the people employed at the Department, especially those in management and leadership positions. The PFMA policy regulations governed the sector and the Department. She asked why the Department did not comply with these regulations. There were forensic investigations in the Department regarding mismanagement of finances and irregular expenditure. She asked if the Department could give this report to the Committee.

Mr Vilakazi replied that the Department took the Auditor-Generals findings very seriously. This was why the Department had taken certain measures to ensure that non-compliance was addressed. Measures included reviewing the Department's policies, strengthening audit and risk management units, and ensuring that all managers responsible for procurement transactions take part in supply chain management, budget processes and PFMA courses.

The Chairperson noted that the Committee did not have any more time for questions and answers. During the break he had conferred with all the parties and it seemed that there was unanimous support for the resolution he was going to make. The resolution of the Committee regarding the briefing by the Department was as follows:

”The Portfolio Committee on Communications was gravely concerned that for the better part of the current financial year, the Department of Communications was in a state of disarray, if not wholly dysfunctional. This in part was characterised by the large number of vacancies particularly at senior management level, the current low level of spending on operational programmes, the poor staff morale, the financial and corporate governance challenges confronting public entities such as the SABC and Sentech, and the absence of effective leadership at managerial level. However, the Committee has noted with some satisfaction the effort made more recently to stabilise operations of the Department and to fast track certain development initiatives in operational programmes identified in the strategic plan of the Department. The Committee therefore resolves that the Department:
▪ Should initiate a process of redefining its strategic priorities so that it is consistent with the Minister's performance and service delivery contract signed with the Presidency
▪ Urgently fill vacant posts with suitably qualified and competent personnel, particularly at senior management level
▪ Review the contract with the consultancy appointed to undertake an institutional review of the Department
▪ Prudently increase the level of spending on core operational programmes
▪ Consider the creation of a specialised division, adequately staffed with personnel with requisite skills to manage the Department's relationship with public entities
▪ Take urgent steps to institute proper financial controls over the Department's expenditure and to minimise risks relating to irregular, fruitless and wasteful expenditure
▪ Undertake a comprehensive skills audit
▪ Report on how the Department proposes to resolve the issue of irregular staff appointments
▪ Report on measures instituted by the Department in respect of public entities that have flouted good corporate governance rules
▪ Should report to the Committee on progress made in respect of the above matters before the end of the parliamentary session this year.

Mr J De Lange (ANC) proposed that the resolution be amended to say “the financial and corporate governance challenges confronting the Department and public entities such as the SABC and Sentech”.

Mr Kholwane supported the resolution but thought it would be problematic if the Committee only received a report back from the Department at the end of November. The Department had to report back to the Committee much sooner than November. He proposed that the tenth resolution be amended with the deletion of “before the end of the Parliamentary session this year”.

Ms Michaels supported the amendment and the resolution.

The Chairperson noted that the Committee agreed on the resolution. He thanked the Department for its presentation and asked them to report back to the Committee urgently.

The meeting was adjourned.