Universal Service & Access Agency of SA on its Annual Report 2010/11; Communications Budget Review and Recommendation Report

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Communications and Digital Technologies

19 October 2011
Chairperson: Mr S Kholwane (ANC)
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Meeting Summary

The Committee met with the Universal Service and Access Agency of South Africa (USAASA) for a briefing on its Annual Report. In their presentation, the representatives said that the targets it had set for its projects (that is, distributing 367 000 subsidised Set-Top Boxes, increase in broadband infrastructure, new public access centres, development of the Universal Access and Service Strategy, setting clear guidelines for the application of the Fund Manual and standard operating procedures for the Universal Service and Access Fund and monitoring and evaluating effective use and appropriation of ICTs) had largely not been achieved.

The Auditor-General had raised matters about its predetermined objectives not containing useful information and its indicators were not being well defined since its business/strategic plan did not have measurable objectives. Financial statements were also not submitted on time due to delays with asset verification caused by the relocation of offices. However, as the Agency was now up to date, the required annual updating of assets would be easier to execute. The lack of strategic planning had resulted in lack of performance management. A strategic planning session was being planned in this regard. There was no business continuity plan though a draft document would be presented at the next Board meeting. Matters were also raised about the irregular expenditure of R490 000 and fruitless and wasteful expenditure of R66 000. In relation to the former, the strategic process would address the issue of integrated planning while legal advice had been sought for Board ratification of the latter.

Current operational interventions at the Agency included a forensic investigation which resulted in three officials being placed under (precautionary) suspension. A joint task team (made up of the Agency and the Department) was established which conducted oversight on the capacitation of the Agency as well as the forensic investigation. The Board had then taken a resolution to place the Chief Executive Officer on ‘special leave’. A technical advisor had been appointed by the Board for a period of six months to assess the current situation and to take corrective action in respect of effective systems and processes in the areas of finance and Supply Chain Management, where required.

Members asked whether the three officials placed on precautionary suspension were being paid during this suspension period; why there was such poor Board member attendance at their meetings; what action had been taken on its irregular expenditure; what the outcomes of the legal advice was on its fruitless and wasteful expenditure; why, given the expertise of Board members, were its strategic plans not realised; why projects had not been achieved; what the budget for the provision of broadband infrastructure in the remaining two municipalities would be; where the budget for the remaining 77 access centres would come from and why had these funds run out; whether there was sufficient ICT-related capacity within the Agency; whether the Agency agreed with the Auditor-General’s findings; what had been done to address the findings on its lack of policies and procedures in place; what was the duration of the technical advisor’s contract; would s/he be transferring skills during her/his tenure at the Agency and whether the process of appointing her/him was an open one.

The Chairperson asked what the difference was between the duties of the technical advisor and the Board. What were the Board members’ fiduciary duties since the presentation of its strategic plan? As it was clear that it had failed in the execution of its fiduciary duties, could the Board members motivate why the Board as it currently stood should not be dissolved?

All members called for a recommendation to be made to the Minister that the Board as it currently stood be dissolved.

Afternoon session
The Committee engaged with the draft Committee Budget Review and Recommendation Report (BRRR). Although some entities had requested additional funds, there was still a need to get detail on that, and Members, after a substantial discussion, decided merely to put a footnote that because no clear presentations on additional funding were given to the Committee, the Committee could express no comment.

The Committee then went through the draft Report, and identified some technical and typographical corrections, as well as making suggestions on more substantive issues. All Members agreed that the comments and recommendations needed to be more strongly worded, and discussed additional matters to be inserted in respect of the entities. The recommendations were also slightly reworded, and a new recommendation was inserted that the Committee recommended that the Minister should take steps to dissolve the current board of the Universal Services and Access Agency of South Africa (USAASA). Other particular concerns included the lack of progress in addressing weaknesses by the Auditor-General, concerns that there were an increasing number of public entities reporting under the DOC who were confronting financial sustainability concerns, and lack of corporate governance. It noted the regression in the SABC results and felt this situation had to be turned around. The need to address the framework of USAASA was noted, although the Committee did not have to make specific recommendations on this now. Recommendations from previous years would be repeated again, with a note that this was not the first time these were raised. The Committee also expressed concern that the DOC should provide strong guidance to the entities, but there was a challenge because the DOC itself had a problem with its own compliance. The lapse of time between the gazetting of the local loop unbundling and implementation by ICASA was noted, and the Committee recommended that the Ministry review the policy directive and come up with clear time-frames, and that a regulatory impact assessment should be conducted before ICASA embarked on the process. The Committee also recommended, in regard to digital migration, that a further information meeting should be held with engineers to address the other options presented at the public hearings in relation to the Set Top Boxes. The Committee had not previously called the section 21 company Domain.co.za to report, but felt that this should be done and that DOC must account for funding to it. In relation to the Government Communication and Information Service, it was noted that the funding model for the Media Development and Diversity Agency (MDDA) should be reviewed, and the Committee thought its funding should not be directed via the DOC, but GCIS. The Committee also recommended that the Competition Commission prioritise investigations into the printing and distribution value chain.

 

Meeting report

Universal Service and Access Agency of South Africa on its Annual Report 2010/11
In his presentation, Prof Shaun Pather, Chairperson: Research and Policy, Universal Service and Access Agency of South Africa (USAASA), said that the Agency’s key projects were Set-Top Box (STB) subsidies as part of Broadcast Digital Migration (BDM), increase in broadband access, handover of existing community access centres and cyber school labs, new public access centres, the development of the Universal Access and Service Strategy and fund manual standard operating procedures for application of the Universal Service and Access Fund (USAF).

Mr Louis Moahlodi, Chairperson: Board of Directors, USAASA, continued that the target the Agency had set of distributing 367 000 subsidised Set-Top Boxes was not achieved. The project had been put on hold whilst it awaited approval of the strategy. Cabinet had approved a subsidy level of R490 (or 70%) towards the cost of an STB per household for a total of five million needy television-owning households. This tallied up to R2.45 billion in total from the USAF over the dual illumination period. R180 million was allocated for 2010/11.

In relation to its increase in broadband infrastructure project target to have three declared under-serviced areas provided with broadband infrastructure, rollout of this infrastructure had been put on hold in two of the three municipalities (Emalahleni and Giyani). Only Msinga local municipality saw a local operator appointed to roll out said infrastructure. The target it had set in relation to community access centres and school cyber labs had not been achieved. Implementation of the handover strategy here continued however and would culminate in the completion of the training program and signing of a memorandum of understanding for the first batch of handover projects.

The target it had set for new public access centres had also not been achieved. Of the 100 facilities it had sought to deploy, 23 sites had been secured and seen construction commence. Delays here were due to incidences of theft as well as the identification of sites.

The target set for the development of the Universal Access and Service Strategy had not been achieved. A service provider had been contracted to assist the Agency with the development of the strategy and had completed the document. The process of stakeholder consultation as well as public participation was set to be undertaken in the coming financial year.

The target of setting clear guidelines for the application of the Fund Manual and standard operating procedures for the USAF had not been achieved. A service provider had been contracted to assist the Agency with the development of the strategy and had completed the document. The process of stakeholder consultation as well as public participation was set to be undertaken in the coming financial year.

The target set for the monitoring and evaluating effective use and appropriation of ICTs had not been achieved as there had been no report on ICT access and impact indicators.   

In relation the Auditor-General’s findings, matters were raised around Usefulness of Information and its indicators not being well defined as a result of its business/strategic plan not having measurable objectives. As a result specialist training in this regard was being planned for managers.

Financial statements were also not submitted on time due to delays with asset verification caused by the relocation of offices. As the Agency was now up to date, the required annual updating of assets would be easier to execute.

Strategic planning was not held which resulted in lack of performance management. A strategic planning session was being planned in this regard. It was also found that there was no business continuity plan. A draft document here would be presented at the next Board meeting. Matters were also raised about the irregular expenditure of R490 000 and fruitless and wasteful expenditure of R66 000. In relation to the former, the strategic process would address the issue of integrated planning while legal advice had been sought for Board ratification of the latter.

Current operational interventions at the Agency included a forensic investigation. The analysis of expenditure in May 2011 had resulted in the Board requesting an open review by the Agency’s Audit & Risk Committee. The results of this review led to the Board instituting a forensic investigation which in turn led to three officials being placed under (precautionary) suspension. A joint task team (made up of the Agency and the Department) was established which conducted oversight on the capacitation of the Agency as well as the forensic investigation. The Board then took a resolution to place the Chief Executive Officer on ‘special leave’.

In relation to the capacitation of the Agency, a technical advisor had been appointed by the Board for a period of six months to assess the current situation and to take corrective action in respect of effective systems and processes in the areas of finance and Supply Chain Management (SCM), where required. The terms of reference included identifying the governance and financial issues which currently prevailed at the Agency and advise the CEO and Board on corrective actions to be taken, facilitating the formulation or review of general governance policies, ensuring the submission to the Board of monthly progress reports on the effective functioning of the Agency, ensuring that the Agency performs its functions in terms of the Electronic Communications Act and other relevant legislation and any other such function as may be delegated by the Board from time to time.

Discussion
Ms N Michael (DA) asked whether the three officials placed on precautionary suspension were being paid during this suspension period.

Mr Vusi Ngcobo, Chairperson: Human Resources, USAASA, answered that the suspended employees were being paid during their suspension period as the Board had been advised that legally they were obliged to do so. The forensic audit report had to be completed within 30 days so that the Board could know whether to lay charges against these individuals.

Ms W Newhoudt-Druchen (ANC) asked why there was such poor Board member attendance at their meetings.

Mr Ngcobo answered that the Minister had been made aware of the need for two extra Board members and had given the assurance that he would provide the Board with two such members. The Board was aware of this problem and was currently working at addressing it.

Ms Z Ndlazi (ANC) asked what action had been taken on its irregular expenditure. What were the outcomes of the legal advice it had sought on its fruitless and wasteful expenditure and what informed the condonation in this regard? Had a service level agreement been signed with the technical advisor? How much was s/he being paid and where was this money budgeted for?

Ms J Killian (COPE) said it was disappointing that the targets set were not achieved in the overwhelming majority of projects. The failure to perform was a serious indictment on the Agency’s internal controls. Why, given the expertise of Board members, were its strategic plans not realised?  How was its staff complement developed as there were currently more senior management employees than people tasked with actual execution?

Mr C Kekane (ANC) asked why a full-time employee with the same skills had not been employed to fulfil the role of the technical advisor.

Ms W Newhoudt-Druchen (ANC) said universal access was not presented through this Agency. Why had projects not been achieved? Where did the Set-Up Box programme go wrong? As costs here would increase in the next financial year, how would this affect the ordinary citizen? What would the budget for the provision of broadband infrastructure in the remaining two municipalities be? From where would the budget for the remaining 77 access centres come and why had these funds run out? What were the timeframes attached to the various projects, particularly the Fund manual?

Ms T Ndabeni (ANC) asked whether there was sufficient ICT-related capacity within the Agency. Was the service provider tasked with the provision of broadband infrastructure in the Msinga municipality, a licensed one and did this licence speak to what they were mandated to do? Why were the Ulwazi and Soweto access centres not fully functional? Did the Agency agree with the Auditor-General’s findings, particularly given that its own internal audit report mentioned none of the matters raised in the Auditor-General’s report? What had been done to address the findings on its lack of policies and procedures in place? What was the duration of the technical advisor’s contract and would s/he be transferring skills during her/his tenure at the Agency? Was the process of appointing her/him an open one?

The Chairperson said that focus should be placed on questions on the Auditor-General’s findings. Once these had been answered satisfactorily, other questions could be answered.

Mr Bheki Maduna, Audit and Risk Management Member, USAASA, answered that the Agency did not dispute the findings of the Auditor-General, though the Board’s concerns emanated from transactions which started around February 2011, the end of the financial year. The matter was dealt with by the Board as soon as it was brought to its attention. Policies were indeed in place but were reviewed as need arose. The technical advisor was a Chartered Accountant and had signed a six-month contract. He would be focussing on areas rof finance and supply chain management and would, during his time with the Agency, be transferring the necessary skills. He was being paid Department of Public Service and Administration rates (R288 000 per month). This money was not budgeted for as this need was not anticipated.

The Chairperson asked what the difference was between the duties of the technical advisor and that of the Board. What were the Board members’ fiduciary duties since the presentation of its strategic plan? As it was clear that it had failed in the execution of its fiduciary duties, could the Board members motivate why the Board as it currently stood should not be dissolved?

Ms Killian asked whether the Board members agreed with its fiduciary responsibilities as outlined in the Public Finance Management Act. Was the Board aware that legal action could be taken against it in light of its failures?

Ms Ndabeni said it was incumbent on the Committee, as public representatives, to call for the Minister to dismiss the current Board members.

All members present agreed with this.

Mr Moahlodi responded that he agreed that the Board had failed in executing its duties. He took full responsibility for this and would, as a result, step down as chairperson and member of the Board at the end of the month.

Prof Pather agreed that there had been notable failures by the Board and that the current situation was untenable. There was a need for both introspection and the addressing of serious capacity challenges.

The Chairperson asked Mr Ngcobo whether he felt he should continue as a Board member.

Mr Ngcobo answered that there was indeed a need for the Board to do some introspection. He was not at present willing to step down as Board member, thereby leaving the matters raised unfinished.

The Chairperson asked Mr Maduna whether he felt he should continue as a Board member.

Mr Maduna answered that he agreed with his colleagues on the need for introspection, though the Risk and Audit Committee did all it could under the circumstances.

Ms Tsebe said that the Committee was not willing to give the current Board any more chances to address the issues raised and was asking for them to step down.

Ms Ndabeni concurred. The Committee was giving the Board a vote of no confidence.

Ms Morutoa concurred.

The Chairperson said that the Committee would be recommending that the Minister relieve the Board members of their responsibilities as the Committee was duty-bound to act when it noticed such notable failure to achieve a mandate.

Ms Ndabeni proposed that to this recommendation the Committee’s concern on the technical advisor’s remuneration be added.

Ms Killian proposed that the recommendation should not result in the investigations into the three employees under suspension being stopped.

The Chairperson noted this.

Afternoon session
Committee Budget Review and Recommendation Report
The Chairperson indicated that all that Members needed to do was to engage with the Report’s recommendations and findings. He asked for Members to start at page 15, in relation to Committee oversight. This would indicate if crucial issues had been highlighted. He would then ask Members to move to item 14.

He commented that some entities had requested additional funds, but the Committee had requested the Department of Communications (DOC) and entities were asked to motivate for that. It might not help the Committee to focus on that now, but it might be more useful for the Committee not to express a view on that, so it would be up to DOC and National Treasury (NT).

Mr D Kekane (ANC) agreed, and said that Members needed to consider the requests on additional funding as a separate issue.

Ms J Kilian (COPE) said that there were some minor grammatical errors to be addressed on pages 15 and 16. She thought that in some cases the wording was not strong enough, and cited, for instance, the comment on funding on page 17, saying that he thought the serious concerns of the Committee needed to be stated.

She agreed that because the Committee had not deliberated on the funding, and merely from an overview of what had been proposed by South African Broadcasting Corporation (SABC) and some other entities, it should not be discussed now. She wanted to record that she would find it difficult to support requests for additional operational expenditure, particularly where there had been poor management. She thought, however, that there might be a case to be made out for support to capital expenditure on specific strategic issues – for instance, ICASA’s monitoring equipment.

She was not sure whether it was preferable to remains silent, or make a general comment to the Minister that it was concerned about the overruns, but would be inclined to support to some of the issues, but definitely not a blanket approval.

Mr N Van Den Berg (DA) agreed that no blanket approval should be given. He thought a strong recommendation should be made to the Department of Communication that it should move on in the Digital Terrestrial Television (DTT) but that it should not allow operational inconsistencies.

Ms F Muthambi (ANC) agreed with Ms Kilian. For instance, no specific concerns were noted in respect of the SABC. She thought that “consider the possibility” was not a direct enough recommendation, and a precise wording should be used for recommendations.

The Chairperson pointed out that last year none of the recommendations had been followed by the DOC.

Ms Kilian referred to paragraph 12.1.1, saying that reference must be made to the Regulator, and the first sentence needed to be rephrased.

The Chairperson said that when the Revised Industrial Policy Action Plan (IPAP2) was issued, DOC made undertakings on what it would contribute to the process. Its first contribution was supposed to be in relation to communication costs, but it had also made commitments on the local loop and cost structure. 

Ms L Ndabeni (ANC) asked if the Committee had finally agreed that no more information would be received on the Set Top Boxes.

The Chairperson clarified that, once again, the commitments should have been reflected in the report.

Ms Muthambi said that certain matters had not yet happened, and that should be reflected, and noted as an area of concern.

Ms Kilian agreed. In relation to 12.1.2, she questioned whether the Report should not include a comment that DOC was to work in conjunction with the Department of Trade and Industry (dti) through whom the manufacturing and development strategy was driven.

Ms Muthambi thought that it was the Department of Economic Development (EDD) with whom it was working on this. This was reflected earlier in the Report. The Policy Framework was released in 2010, and she thought the Committee should note its concern that there had been little progress on delivery agreements. In respect of the local loop, there were concerns that the policies had been formed in 2007 yet there appeared to be attempts to implement now, within a very short space of time, whilst there had been little done over the past four years, and that too should be reflected.

She pointed out some minor typographical errors that needed correction in the third paragraph, and capitalisation in paragraphs 13.1 and 13.2.

Ms Kilian said that the second last bullet at SABC should refer to “strategic vacancies” that had not been filled. In respect of the last bullet on Sentech there should be reference to “communities who were providing for…”.

Ms S Tsebe (ANC) questions whether there was a specific reference to the Committee’s disappointment on the failure of departments to pay the TV licences”. 

Ms Muthambi pointed out some typographical errors in relation to ICASA, in the first bullet point. Under 13.2.4, there was no time line mentioned.

Ms Kilian asked that the sentence on issuing of licences should not refer to “issue out licences” but merely “issue licences”.

Ms Muthambi said that the Committee should raise concerns as to whether the entities were fulfilling their mandates, and should not that when the Committee had visited certain areas, it could not see the projects. 

Ms W Newhoudt-Druchen (ANC) thought, in respect of paragraph 13.2.4, that the sentence should be corrected to read, “ICASA does not prioritise postal services adequately”.

Other Members discussed this point, and suggested that the wording be changed to “ICASA is neglecting its postal services mandate”.

Mr Van Den Bergh reminded Members that the South Office Post Office had asked that the Committee, when interviewing candidates for ICASA in future, should give more attention to the postal services.

The Chairperson noted that in paragraph 14, there would be reference to all the reports that the Committee had received.

Ms Muthambi said that one of the sentences did not appear to have been completed. She thought that the words “ (issues) were considered by the Committee during the Department’s annual report presentations in October 2010 and February 2011, and the Committee noted, with regret, that was not much progress in redressing these weaknesses identified by the Auditor-General”.

Ms Kilian thought that the second last paragraph should be moved to appear after the first paragraph. The Committee noted with concern that there were an increasing number of public entities reporting under the DOC who were confronting financial sustainability concerns, and lack of corporate governance and this seemed to flow from the Auditor-General’s report.

Ms Newhoudt-Druchen thought that the word “confronting” should be replaced by “experiencing”. Other Members agreed.

Ms Kilian made a proposal that the wording be adjusted further, to read “experiencing corporate governance challenges and lack of financial sustainability”.

Ms Muthambi then proposed that the following be inserted before moving on to the gender issues: “The Committee is concerned with the regression in the SABC financial results and is of the view that the situation needs to be turned around”. It would then move to the disappointment with government departments, as the fourth point, and the gender issues under the fifth paragraph.

Ms Muthambi said that there was still no movement on the qualifications and she thought that more specific comment might be needed.

The Chairperson noted that the qualifications had again been based on the same issues as previous qualifications.

Ms Muthambi said that concerns about ICASA, relating to financial management capacity and corporate governance.

The Chairperson said, in relation to Universal Service and Access Agency of South Africa (USAASA), that the Committee needed to address the framework. South Africa differed from other countries, where the service fund was dealt with by the Regulator. The Committee did not have to express an opinion now, merely note that there were concerns raised about the framework.

Ms Muthambi said that the words “the Minister must consider the possibility” was too vague.

Ms Ndabeni thought that the Report should note “the inherent lack of strong leadership, and continuous failure to exercise fiduciary duties by board members, which had led to the Agency’s failure to meet its mandate”. In the recommendations section, a new recommendation should be inserted that the Minister dissolve the current Board as it had failed to execute its fiduciary duties”.

The Chairperson pointed out that other recommendations would be added in, from the previous reports of 2010. These issues covered spending, and appointments.

Ms Muthambi said that there should be a very strong focus on the repetitive problems in the financial matters.

The Chairperson said that the matters could be specifically set out, but he would have thought a mere reference to the same matters being raised as in 2009 and 2010 would have been strong enough to indicate the severity. He noted that the matters of senior management were still problematic. There was still no spending on the core mandate, because of internal processes. The Department should consider appointment of specific staff to guide the entities. He noted that the Committee had, this morning, received a letter from the Director General saying that DOC could only return to the Committee in mid-November to tell the Committee about the time frame and action plans to address the issues. In other words, it was still apparent, and did not appear to have moved much.

Ms S Tsebe (ANC) said that there did not appear to be any guidelines from DOC to the entities.

Ms Muthambi said that this was why it must report on the measures instituted by it in respect of public entities that had flouted corporate governance rules. However, this was a difficult issue because the Department itself was flouting the rules.

The Committee Researcher read out the revised version.

Ms M Morutoa (ANC) made an inaudible comment on the format of the report.

Ms Newhoudt-Druchen said that there was no specific finding in relation to the Digital Migration and she thought that there should be more emphasis on the work that the committee had done in that regard.

The Chairperson noted that, and asked Members to refer to paragraph 12, which was read out.

Ms Muthambi repeated that the lapse of time between the gazetting of the local loop unbundling and implementation by ICASA should be noted. In respect of the recommendations, she said that the Committee should recommend that, due to the lapse of time, the Ministry should review the policy directive and come up with clear time-frames

Ms Muthambi also said that a regulatory impact assessment be conducted before ICASA embarked on the process.

Ms Muthambi discussed point 12.1.2, that the Committee had held public hearings on the digital migration, where a second option-approach to the Set Top Boxes (STBs) was presented. The recommendation should be that the Committee recommended that an information meeting be held with engineers, and not manufacturers.

Ms Ndabeni said that this was important, because manufacturers tended to promote their own products.

Ms Muthambi then put forward her recommendations on 13.2.5, which should read “There is a lack of clear maintenance plan on the project and that the Agency is failing to meet its statutory obligations”.

Ms Muthambi also referred to 11.7, in relation to Domain.co.za.  No Annual Report had been made to the Committee.

The Chairperson noted that they had not previously been invited to the Committee. The problem was that it was a section 21 company.

Ms Muthambi still thought that something needed to be done about this, and proposed that this entity be called. She thought that another recommendation be inserted, to the effect that the DOC should give a report on the operation of the entity in the meantime. DOC had not been accounting to date.

Ms Newhoudt-Druchen had asked where the R1.5 million was paid, and the response was that it was going to operational expenses. She had asked for a breakdown but it was not given.

Ms Kilian noted that she had looked now at the rest of the report. She wondered if the pages preceding page 15 had captured all deliberations. The Committee had raised corporate governance issues when serious weaknesses were identified in appointment processes at ICASA and USAASA. She wondered if the marginal improvement in Sentech should be captured too. The Committee should differentiate between institutions that were succeeding in the turnaround and those who were deteriorating. She wondered if the detail of the long deliberations had been captured.

The Chairperson suggested that this could be put in as a conclusion, otherwise the report might become tautologous. This could reiterate the Committee’s dissatisfaction about the number of entities who were finding themselves in deficit.

The Chairperson asked Members then to focus on the Government Communication and Information Services (GCIS) on pages 12 and 13. The Committee commended GCIS on its achievement of maintaining clean audits, and observed the need for more funding for the Media Development and Diversity Agency (MDDA). He reminded the Committee that the DOC transferred funds to the MDDA, although there was supposed to be a Memorandum of Agreement, there was in fact no structured funding in dealing with the community radio projects. He read out the recommendations, paraphrasing some. He noted that GCIS had not tabled a programme of action with timelines as to how it intended to deal with the Auditor-General’s report. The Committee recommended that the current funding model for MDDA should be reviewed. It further recommended that all government departments must commit a certain percentage of their advertising-spend to support community media. The Committee also recommended that the Competition Commission should prioritise investigation into the printing and distribution value chain, where anti-competitive behaviour had been isolated. It also wanted the budget for community radio for MDDA to go via the GCIS and no longer via the DOC. The Chairperson read out a revised version of these recommendations, which were agreed to by Members.

Ms Kilian proposed a rephrasing as follows, for the first recommendation “The Committee recommends that (and then the bullets should follow) the GCIS should present an implementation plan with clear timelines with regard to the Auditor-General’s findings and recommendations.” Then the other recommendations would follow.

Ms Tsebe and Ms Kilian recommended an improvement to the grammar on the observations.

Ms Muthambi asked what the rationale as for the project being dealt with by DOC.

The Chairperson explained that MDDA was established once the DOC was already in existence. He noted that there had been some duplication of equipment, that a Memorandum of Understanding should have been set up, but in practice it had depended very much on who had been in charge of DOC at the time.

Ms Newhoudt-Druchen referred to an amended document just handed out, querying why matters were left open on page 15. She thought that if conclusions were included, they should be placed last

The Chairperson said that this was where space had been left open for a possible conclusion, and he agreed with the comment on the order, but that was in terms of a specific format. However, after further discussion, Members decided that they did not want to include a “conclusion” session.

Members had by this stage been given a revised document, and they went through it, page by page, making technical corrections and some suggestions to improve the formatting.

Members discussed the reasons why matters had not improved, noting that the lack of capacity had been raised, that the DOC had done a skills audit to try to take the matters further, but it had not achieved the objectives. The report noted regret that there had been no improvement from previous years, reportedly because of lack of capacity, and inserted another recommendation that under-or non-performing managers be duly sanctioned in terms of the Public Finance Management Act.

Ms Tsebe thought that the non-attendance of DOC when the entities presented to the Committee should also be captured.

Members finally discussed, as some length, whether the BRRR should contain any comment at all on the additional funding issues. If the Committee expressed any opinion, it could be causing problems. Although it had merely been noted, Members, after further discussion, thought that any reference to this should be removed altogether.

Ms Newhoudt-Druchen asked what then, was the point of having the BRRR if no figures were mentioned.

The Chairperson said that he took the point. As yet, there was no Budget Office in Parliament, so the decisions fell back on the Committee, yet because no specific presentations were made, the Committee could not express an opinion.

Members adopted the BRR Report, as amended.

The meeting was adjourned




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