Department of Communications & Universal Service and Access Agency of South Africa 2012 Strategic Plans; Committee Report to the Presidential Review Committee on State-owned Entities

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Communications and Digital Technologies

16 March 2012
Chairperson: Mr E Kholwane (ANC)
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Meeting Summary

The Department of Communications had briefed the Committee on its strategic and performance plans on 13 March 2012.  Due to time constraints, the briefing was not concluded.  Representatives from the Department proceeded with responses to Members’ earlier questions concerning the Department’s failure to spend its budget allocation; the failure to secure approval from the National Treasury for additional funding; the utilisation of external service providers; increased interaction with subordinate entities; the planned legislative amendments; connectivity services to schools; communication services for the Square Kilometer Array project; the policy on cyber security; job creation initiatives; support for community radio stations, the Set Top Box project and the provision of ICT services in remote, rural regions.

Members were not satisfied with the Department’s responses concerning job creation.  Additional questions were asked about the planned review of the ICT policy; the nature of connectivity services to schools and the support provided to maintain the service; access for persons with disabilities; the results of studies undertaken and the Department’s staff complement.  Members suggested that the Department’s strategic plans were streamlined to provide more focus on the key priorities.  Members asked for more detailed information on the Department’s projects and programmes, in particular the Set Top Box, Digital Terrestrial Television and broadband projects.  Members asked for more information on the increased budget for certain expenditure items.

The Executive Caretakers and Acting Chief Financial Officer appointed by the Department of Communications briefed the Committee on the corporate and business plans for the Universal Service and Access Agency of South Africa.  The briefing included an overview of the current state of governance at the Agency, the disciplinary action that had been taken against senior officials and the corrective action that had been taken in response to the findings of the Auditor-General.  The Department had suggested to the Minister of Communications that the mandate of the Agency was reviewed and that the Agency was re-positioned.

The Agency had identified five key projects for 2012/13.  The project budget for 2012/13 was R273.9 million and the budget for staff and administration costs was R59.8 million.  The Agency warned that it was unlikely that the entire amount allocated would be spent.

Members found the strategic and business plans of the Agency to be lacking in substance.  Discrepancies in the information provided were pointed out and the plans included out-of-date data.  Members from the DA suggested that the operations of the Agency were suspended but the Members from the ANC felt the caretaker team should be allowed the opportunity to turn the entity around.  All parties agreed that the Agency was not in good shape and lacked capacity.  The Agency had identified major risk factors but mitigation plans, disaster recovery plans and fraud prevention plans were not in place. 

Members asked for the report on the forensic investigation, the current status of the disciplinary proceedings against senior officials and whether the officials were suspended on full pay.  Other questions concerned how the plans to provide connection services to schools and colleges and community access centres fitted into the broader strategic plans of the Department; the role of the South African Post Office in the distribution of set Top Boxes, the Agency’s Set Top Box project; details of the 500 jobs created; the broadband subsidy and the criteria used to identify under-serviced municipalities.

The Executive Caretaker agreed to provide the Committee with a written response to Members’ questions.

The Committee adopted the report to the Presidential Review Committee on State-owned Entities, with amendments.  The adoption of the minutes of meetings held on 21 and 28 February 2012 was deferred.

Meeting report

Strategic Plan of the Department of Communications (DOC)
Due to time constraints, the briefing by the DOC to the Committee on 13 March 2012 was not concluded and the Department’s response to the questions asked by Members was postponed to 16 March 2012.

Mr Sam Vilakazi, Acting Deputy Director-General: Finance and ICT Enterprise Development, DOC replied to Members’ questions on the reasons for the Department’s failure to spend its 2010/11 allocation.  The funding for the Set-top Boxes (STB’s) required for Digital Terrestrial Television (DTT) broadcasts was not transferred to the Universal Service and Access Agency of South Africa (USAASA).  The amount involved accounted for the bulk of the under-spending.  The funds were not transferred because the review of the standards for the STB’s was delayed.

Mr Vilakazi said that the funds made available since 2008 to the DOC and the State-owned Entities (SOE’s) involved in the DTT project had not been sufficient.  The additional funds requested by the DOC, Sentech and the South African Broadcasting Corporation (SABC) were not approved by the National Treasury.  Despite the motivations submitted by the Department and meetings with the Treasury, only R138 million of the R7.3 billion requested by the SABC was allocated.  Sentech applied for R1.4 billion but only received R141 million.  The cost of the STB’s was being reviewed.  The Department would continue to submit applications to the National Treasury on behalf of Sentech and the SABC for additional funds for the STB and DTT projects.

Mr Vilakazi advised that the Department had been forced to appoint external service consultants because of a lack of internal capacity.  The National Treasury had requested that the expenditure on consultancy fees was reduced.  The DOC had attempted to fill the vacant posts to reduce its reliance on external consultants and currently only made use of such services where there was insufficient internal capacity.  The Department took note of the Committee’s call for closer contact with the SOE’s.  The Department did not wait for scheduled meetings with the entities and dealt with issues as they arose.

Mr Vilakazi explained that the consequences of the funding shortfall included the inability to meet targets and deadlines.  The shortfall prevented the SABC from keeping its lead ahead of other players in the sector.  The Department was competing with other priority sectors (such as roads, health and education) for public funding.

Responding to questions from Members on the Department’s legislative programme, Mr Vilakazi explained that technical amendments were required to the South African Post Office Act to make provision for the spouses of Post Office employees to access pension fund benefits in accordance with a Court judgment.  The Postbank would provide network services.  The appointment of the Postbank Board was currently in progress.  As soon as the Board was in position, the launch of the Postbank could take place.

Mr Jabu Radebe, Acting Deputy Director-General: ICT Infrastructure, DOC explained that 500 Dinaledi schools were planned.  375 were completed and the remaining 125 were included in the plan to provide connectivity services to 1650 schools.  Information on where the schools were situated could be made available to the Committee.  The DOC had worked with the Department of Science and Technology (DST) on the Square Kilometer Array (SKA) project.  The requirement for no radio interference in the area surrounding the SKA facility in the Northern Cape was challenging for the type of communication infrastructure that could be installed.  The Minister of Communications had issued a policy directive on infrastructure in 2010.  The DOC, Sentech and the DST collaborated on the provision of communications infrastructure for the SKA.

Mr Radebe explained that the Department had been developing the policy on cyber security since 2009, in accordance with the decision and agenda of the International Telecommunications Union (ITU).  The original focus had been on ICT security but was subsequently expanded to include the justice and security clusters.  The DOC worked with other government stakeholders to develop the cyber security policy and framework.  Areas requiring urgent intervention had been identified and it was decided to first develop the cyber security policy framework.  The development of the policy itself was a much lengthier process.  Cyber-crime had to be addressed as it could impact on national security.

Mr Themba Phiri, Acting Deputy Director-General,
Presidential National Commission on Information Society and Development (PNC), DOC responded to questions from Members concerning the measurement of job creation strategies.  Statistics South Africa undertook labour surveys and published the results.  The Department made use of a monitoring tool to determine the number of jobs created through the projects under its control.  The strategic plans included specific targets for local content acquired by the SABC and the projects carried out by USAASA.  A monitoring mechanism had been lacking but a Ministerial forum was established and quarterly reports would be submitted in future.

Mr Phiri acknowledged that community radio stations faced many challenges, including financial sustainability, high signal distribution costs and license fees.  Most community radio stations could not afford the charges and struggled to become financially viable.  The DOC provided support through the distribution of infrastructure.  Agreements had been signed with Sentech to provide support for certain radio stations in dire financial straits but this was a temporary measure.  The DOC had set aside funding to support community radio stations in the following financial year.

Mr Phiri advised that plans for the distribution of STB’s had not been finalised.  The Department had established a committee with representatives from the DOC, SABC, USAASA and the South African Post Office (SAPO) to oversee the DTT and STB projects.  SAPO was considered to be most suitable for the distribution of the STB’s because of its extensive network of post offices, particularly in rural areas.  The Department worked closely with the sector to ensure that the STB’s would be available on time.

Responding to questions about the Department’s involvement in rural development, Mr Phiri said that the DOC was committed to the national outcomes for rural development.  The DOC collaborated with the Department of Land Reform and Rural Development and had identified the areas where low power transmitters would be erected and ICT centres would be established.

Mr Vilakazi advised that the Department’s new organisational structure had been approved by the National Treasury and the Department of Public Service and Administration (DPSA).  Additional funding for employee costs was not available but the Department was able to proceed with filling vacant critical posts.  The PNC directorate was not expected to continue indefinitely.

Mr Farhad Osman, Chief Director: Strategic Planning and Monitoring, DOC responded to Members’ questions on the strategic plans of subordinate SOE’s.  The strategic plans of the SABC and the Independent Communications Authority of South Africa (ICASA) had not adhered to the SMART criteria applied by the Auditor-General.  The plans of USAASA had satisfied the criteria.  The Department had made assistance available to the SOE’s and would ensure that the revised plans adhered to the Auditor-General’s criteria and were aligned to the DOC’s strategic plans.

Ms Rosey Sekese, Director-General, DOC advised that the Department monitored the roll-out of infrastructure conforming to the DVB-T2 standard by Sentech.  The target was the achievement of 74% signal coverage during 2012/13.

The Chairperson asked if the percentage coverage referred to the general population or to geographic areas of the country.  A significant proportion of the population lived in remote, under-developed, rural areas of the country.  He had compared the Department’s strategic plan to the plan for the previous year.  The Minister had pointed out the need to establish a sound foundation that would allow future progress.  He noted that the Department planned to amend certain pieces of legislation before the new ICT policy was finalised.  He asked what informed the legislative changes and what the outcome was of the policy review.

Ms W Newhoudt-Druchen (ANC) asked if the 1650 schools that would be connected included the Dinaledi schools.  She asked if the Department would provide ongoing support to the schools to ensure that they remained connected and that the connectivity costs were covered.  She asked for more information on the involvement of the 1000 small, medium and micro enterprises (SMME’s) in the STB project.  She asked if the STB’s would be manufactured locally by the SMME’s and if the SMME’s would be involved in the distribution of the boxes.  She noted that the bulk of the Department’s funding allocation was for employee costs and expenditure on goods and services.  She asked for a detailed explanation of what was included in ‘goods and services’.  She asked for a detailed explanation of exactly what was being planned to improve access for persons with disabilities.

Ms M Shinn (DA) wanted to know what network was being used to connect schools.  She asked if the idea of a national broadband connectivity network had been abandoned or if the same network provided by Telkom would be used.  She asked what equipment the schools would need.  The financial resources of the country was limited and needed to be spent judiciously on the critical needs of the country.  Funding for less critical programmes was not available.  The critical strategic goals of the DOC were the provision of broadband services and DTT.  She asked what less critical goals could be abandoned or deferred.

Ms J Killian (COPE) found the plans of the Department to be too complex and lacking in clear priorities and focus.  It would have been preferable if the Department had identified only five key strategic goals and provided more detail on how the goals would be achieved.  DTT was a critical objective and the agencies under the leadership of the DOC were largely responsible for implementation.  It was essential that adequate mechanisms were in place to ensure that the agencies remained focused on their core business, adhered to the Public Finance Management Act (PFMA) and were held accountable for the delivery of their mandates.  She noted that the Department had developed a plan for DTT but wanted to see clear milestones that could be monitored by the Committee.

Ms Killian said that the development of ICT policy was a priority.  She asked why the process to develop the new White Paper and Green Paper on ICT had taken so long and if there would be a new approach.  She was of the opinion that ICASA was part of the problem and that there had been unintended consequences to include both broadcasting and telecommunication authorities under ICASA.  The policies of ICASA deviated from government policies in certain instances.  The situation created a conundrum for the DOC, which was responsible for ICT delivery.  The Department could not interfere when ICASA set different priorities and followed different policies.  The Department appeared to be reluctant to put the issue forward for debate.  She felt that the Department should not attempt to amend the Electronic Communications Act (ECA) without first undertaking a complete review of the regulation of the industry.

Ms Killian noted the Department’s objective to promote competitiveness and economic growth in the ICT sector, which had the potential to create many new jobs.  It was not clear how investment in the sector could be maximised if the DOC was not allowed to influence the priorities set by ICASA.  For example the Authority had a different attitude to the roll-out of broadband infrastructure.

Ms Killian observed that employee expenditure had virtually doubled in five years.  It was not clear if the additional expenditure was incurred to increase capacity.  She asked what the headcount of the DOC was and at what levels the staffing complement had changed most significantly.  There had been a significant increase in the amount provided for employee bursaries since 2008.  She asked what criteria were applied to award the bursaries and who benefited from the scheme.  She asked if bursary beneficiaries were required to work for the Department for a specified period thereafter or if any other mechanisms were in place to ensure that the investment made was recovered.  She asked for more information on the expenditure on fleet services and government vehicles.  She wanted to know how the Department had managed to reduce the expenditure on travel and subsistence allowances.  She asked for more information on the provision for expenditure on buildings and fixed structures.  She noted that the budget for ICT policy development had been reduced.

Ms F Muthambi (ANC) recalled that the President had referred to broadband legislation in the 2012 State of the Nation Address.  The Minister had referred to the strategy for broadband services in her overview.  The National Planning Commission had criticised the lack of an ICT policy framework.  She asked what action was taken by the DOC to develop the policy framework and to review the policy.  She asked when broadband legislation would be introduced in Parliament and what the legislation would entail.  The strategic plans mentioned the involvement of Sentech and Infraco in the provision of universal access.  She asked what role would be played by Telkom and the State Information and Technology Agency (SITA).  She asked if the DOC had taken other government initiatives into account in formulating its strategies.  She asked if the DOC had made specific commitments for job creation and service delivery.

The Chairperson advised that the National Treasury report had stated that 500 Dinaledi schools had been provided with connectivity services.  This differed from the information provided by the Department that 125 Dinaledi schools were included in the target to provide connectivity to 1650 schools.  He asked for an explanation of the discrepancy in the information provided by the Treasury and by the DOC.

Mr B Steyn (DA) said that the Committee had the power to amend the budget of the Department but was not in a position to make a decision from the information provided.  He asked for a detailed list of the Department’s programmes and corresponding funding requirements.  He suggested that the Department refrained from setting targets for unfunded mandates and approached the Committee if funding was required for critical programmes.  The DOC should not wait until an SOE asked for assistance.  The Department had oversight responsibilities over the SOE’s and need to ensure that strategic plans conformed to the Auditor-General’s criteria and were aligned to departmental strategic plans.  He suggested that improved results would be obtained if the DOC took pro-active action.  He noticed significant increases in expenditure for catering, external contractors, agency support and several other items and a decrease in the expenditure on policy development.  He said that the budget of the Department had to be aligned to specific milestones.  The SABC had indicated a budget shortfall of R836 million for DTT but the DOC had indicated that additional funding for R7.3 billion was required by the SABC.

Mr G Schneemann (ANC) was not satisfied with the Department’s responses to questions concerning job creation.  Job creation was a high national priority but little attention was paid in the DOC’s strategic plans.  He suggested that the DOC reconsidered the strategy for job creation.  The Committee wanted extensive details of the projects, where implementation would take place and how many jobs would be provided.

Mr Schneemann recalled that the Committee was shown a sample STB in 2008.  At the time, the provision of STB’s was a top priority and the project was about to be rolled out.  Five years later, little had been achieved.  He understood that certain issues needed to be addressed but the Committee required more information on what had caused the delay.  He was not convinced by the Department’s excuse for failing to secure additional funding from the National Treasury.  He suggested that the DOC reviewed the applications for additional funding and considered alternative sources of funding.

Ms S Tsebe (ANC) suggested that the Committee engaged with the National Treasury to establish the reason for the refusal of the Department’s funding requests.  She queried the Department’s expenditure on administration.  She wanted to know what the status was of the STB project and how the 1000 SMME’s involved in the project would benefit.  She asked if other stakeholders were consulted, for example, certain municipalities had programmes to assist indigents.  She was not impressed by the standard of the published strategic plan document.  Much of the content was obviously cut and pasted from the previous years’ plan.  Schools faced serious challenges to maintain infrastructure and needed additional support.  She asked why no mention had been made of support for community print media enterprises.

Ms Sekese said the main challenge with the broadband project was the current complex institutional arrangement.  Telkom, SITA, Infraco and Sentech reported to different departments.  The provincial and local government authorities were involved as well.  The matter had been discussed with the Minister, who had taken the initiative to address the challenges.  The proposed legislative amendments were required to allow the relevant entities to proceed with operations.  Policy development was a lengthy process, requiring a Green Paper and White Paper, followed by legislative changes.  A period of 12 to 18 months was necessary to allow the Department to do a thorough job.

Mr Osman explained that 375 Dinaledi schools were connected in 2010/11.  The DOC had an agreement with the Department of Basic Education to complete the remaining 125 schools in the project.  The agreement fell through and the schools were included in the target to connect 1650 schools.  The DOC had held workshops with the SOE’s on the alignment of strategic plans and would in future ensure that the plans conformed to the technical criteria as well.  The Department’s five flagship programmes were not negotiable.  Specific objectives were set for each strategic goal.  Detailed targets were identified for each strategic objective.

Mr Vilakazi advised that the SMME’s would be manufacturing the STB’s and would benefit from the funding made available for this purpose.  He doubted if re-shuffling the Department’s budget would have any significant impact as the entire budget was inadequate.  The funding shortfall for the SABC for DTT was substantial.  Sentech would not be able to meet its obligations unless adequate funds were available.  The Department’s budget for 2012/13 was R1.7 billion, of which 35% was for DOC projects and 65% was transferred to the SOE’s.  He felt that the Department had done all it could to convince the National Treasury to approve the additional funding requests.  It was difficult to convince the Treasury that digital television was more important than roads, schools and clinics.  Any assistance from the Committee was welcomed.  The Department might be able to cut expenditure to a certain extent but was already avoiding wasteful expenditure.  The increased budget items were attributable to inflation and controls were in place to ensure that the required services were delivered and that money was not wasted.

Mr Phiri said that the DOC was not in a position to put forward its views if the Minister issued policy directives that allowed ICASA to establish its own policies and priorities.  Consensus had to be reached on the integration and implementation of long term national goals.  The Cabinet had not yet approved the final plans for broadband services.  Jobs were created by the projects implemented by the SOE’s.  The DOC had little control over job creation in the sector and the lack of adequate funding had a negative impact on the number of new jobs that could be created.  The Department focused on its priority programmes and he conceded that the plans could have been presented in a more detailed, understandable manner.  The Media Development and Diversity Agency (MDDA) could provide more information on the support provided to community media.  He agreed that many community radio stations struggled to become financially viable.  More detail on the financial support available to community radio stations would be provided when the Department briefed the Committee on its annual report and budget.

Ms Sekese agreed to provide the Committee with a written response to the remaining unanswered questions from Members within one week.

The Chairperson explained that Members needed to have a thorough understanding of the Department’s objectives and responsibilities and have all the necessary information to hand in order to approve the budget.  He noted that the Department had undertaken several studies during the previous year but little mention had been made of the outcomes of the studies.  He agreed that the Department needed to continue with operations but the focus should be on putting in the ‘building blocks’ that would ensure future progress.  An example was the establishment of databases of information.

The Chairperson suggested that the DOC motivated proposed legislative amendments very well.  The Committee would not agree to the amendments unless it was convinced that the changes were really necessary.  The DOC was the leading department in the ICT sector and had both direct and indirect influence.  It was difficult for the Committee to assess the progress made with job creation without accurate data.  Unless the Department was able to establish accurate job creation statistics, the working of the strategic plan should be changed.  The Committee wanted more information on the results of the market analysis study and the impact of the DOC’s activities on the sector.  During 2011, the Committee had issued six reports on the Department, which included recommendations.  Certain recommendations were implemented but others remained outstanding.  The Committee recommended that the Department streamlined its priorities.  Certain countries only had four key priorities for three to five years on which most attention was focused.  The remaining priorities were managed.  The Committee noted that the Department had been unable to secure additional funding.  The Committee had contact with the Appropriations Committee but needed to be convinced that the funding application was critical.  The Department would be invited to re-present its strategic plan to the Committee after the Easter recess.

Ms Sekese thanked the Committee for the comments, which would help to strengthen the Department and its strategic plan.

2012/13 Corporate and Business Plans of the Universal Service and Access Agency of South Africa (USAASA)
Mr Themba Phiri and Mr Sam Vilakazi were appointed as Executive Caretakers of USAASA by the DOC in November 2011.  Mr Phiri reported on the current status of governance at the Agency (see attached document).

Non-executive Board members were released from duty.  The Technical Advisor had resigned in November 2011.  Forensic investigations were completed in December 2011 and the projects awarded to service providers were subjected to value-for-money audits.  Disciplinary hearings involving the Chief Financial Officer, two Executive Managers and one Senior Manager were in progress.  The Senior Manager: ICT was on precautionary suspension.  The Chief Executive Officer had requested a settlement agreement after disciplinary proceedings commenced.  Acting appointments were made in the key positions.  The DOC had established a committee to oversee operations at the Agency, ensure that procedures were in place and that the Board remained functional.

It was critical to re-position the mandate of USAASA.  The Agency was responsible for providing universal access services in rural areas but it was unlikely that the existing service level agreements would be met.  The DOC had suggested to the Minister that USAASA was re-positioned but this would require an amendment to the ECA.  The ICT policy review had to include the role played by the Agency.  Workshops had been held with the caretaking team.  The Department was of the opinion that the current projects under way should continue as these were in line with the DOC’s strategic plans.  It was unlikely that the Agency would be able to spend its allocation for the current financial year.

Mr Vilakazi took the Committee through the findings of the Auditor-General and the corrective action that had been taken.  Strategic and business plans conforming to the Auditor-General’s SMART criteria were developed.  A service provider would be appointed to complete the asset verification process.  Tender Committees were appointed to ensure that supply-chain management procedures were followed.  Condonement of the wasteful expenditure concerning capped leave would be sought.

The action taken to address the issues raised by the Committee during previous meetings was summarised.  Members had queried the skills capacity, organisational structure, functioning and interaction with the MDDA and SAPO.

Mr Winile Lamani, Acting Executive: BDS Division, USAASA explained the context of the business plans of USAASA and illustrated how the Agency’s projects were aligned with the DOC’s strategic plan and the Minister’s performance outputs.  The quarterly spending plans for 2012/13 on the e-connectivity,
Universal Service and Access Fund (USAF) Manual, Rapid Deployment, STB Subsidy and broadband subsidy projects were summarised.

Ms Linda Ngcwembe, Acting Chief Financial Officer, USAASA presented the budget of the Agency for the MTEF period 2012/13 to 2014/15.  The total 2012/13 budget amounted to R273.9 million, of which R230 million was earmarked for the STB project.  R59.8 million was budgeted for staff and administrative costs.

Discussion
Ms Newhoudt-Druchen asked if the Agency’s target to provide internet connections to 200 schools were included in the DOC’s plan to connect 1650 schools.  The target for subsidized STB’s was 469,387 but there were 50 million people in the country.  She asked for more details on how the community centres and communication hubs established by USAASA related to the strategic plans of the DOC.

Mr Steyn asked if any senior executives had remained in the employ of the Agency.  He asked for a copy of the report on the forensic investigation that was done.  The briefing did not indicate if senior employees were suspended on full pay and did not elaborate on the current status of the disciplinary hearings under way.  He noted that the Agency would not spend its allocation.  It was not acceptable that no service delivery took place while the management of the organisation was addressed.  USAASA had been in existence since 2007 and it would appear that proper procedures were never implemented.  He wondered what supervision was done by the DOC.  He disagreed with the decision to condone the wasteful expenditure with regard to the capped leave and felt that everything possible should be done to recover the money.

Mr Steyn asked for clarity on the involvement of SAPO in the STB project.  It was not clear whether applications for subsidies would be processed by SAPO or if the boxes would be distributed by post offices.  He asked for clarity on the STB budget of R230 million, the rapid deployment project and the planned ICT centres.  He asked what criteria were used to identify the two under-serviced municipalities that would be provided with broadband infrastructure. He asked what was meant by ‘monitor and evaluate the implementation of the definitions targets’.  He asked for an explanation of the broadband subsidy.

Mr Steyn noticed that most of the expenditure would occur during the third and fourth quarters of the year and wondered if the Agency had the necessary capacity to spend its budget.  The published strategic plan of USAASA included statistics from 2005 and 2007, which indicated that the Agency was not using up-to-date-information.  The Agency had identified ongoing technological changes as a major threat.  Rapid technological advancements were a given in the ICT sector and it was necessary to be pro-active and have adequate plans in place.  He disagreed with the statement made that the government did not perceive ICT as a vehicle to alleviate poverty.  The Agency had identified serious risk factors but little information was provided on mitigation plans.  No disaster recovery plans or fraud prevention plans were in place.

Ms Shinn wondered what USAASA had achieved besides enriching its executives.  She was critical of the CEO’s request for a settlement agreement, which would allow him to depart with an unblemished record.  There were many examples of government officials not being held accountable for failure and being allowed to ‘get away with it’.  She noted that USAASA would be sharing support services until 2017 and appeared to be doing very little whilst the review of its mandate was pending.  She suggested that operations were immediately suspended and questioned the rationale for keeping the Agency going in the light of the high risk, absence of a strategy and chronic lack of skills capacity.

Ms Tsebe welcomed the Minister’s intervention, which was long overdue.  She felt that the caretaker team should be given the opportunity to turn USAASA around.  She found the strategic plan to be weak and unsatisfactory.  The organisation was clearly in bad shape.  She asked if the suspended employees continued to receive full pay.  She wanted more information on the progress that had been made since the Committee’s intervention in 2011.  She asked if the suspended projects had a negative impact on creditors.  She wanted to know what issues concerning the mandate and future of USAASA had to be clarified.  The published strategic plan referred to connectivity services to 28 FET colleges but the briefing document referred to 18.  She received many enquiries from her constituents on the STB project and wanted to know what the current status was.  She asked for a breakdown of the 500 jobs the Agency claimed had already been created through its projects.  There were many unexplained, blank spaces in the published strategic plans.

Mr Schneemann found the briefing to be too sketchy and lacking in substance.  The risks identified could have a serious impact on the operations of the Agency.  The quarterly targets included in the strategic plan were unclear, for example the target was to connect 200 schools but no quarterly targets were set.  He asked if the Agency had the necessary capacity to carry out the planned work.  He suggested that USAASA responded to Members’ questions in writing.

The Chairperson asked if the strategic plan of USAASA conformed to the direction provided by the DOC.  It was not clear how the services delivered by USAASA fitted into the overall objectives to provide access to ICT services to communities.

Mr Phiri said that Members had raised important issues.  USAASA needed time to rebuild and lacked adequate capacity.  The section responsible for the bulk of the projects was severely under-staffed.  It was difficult to keep adequate control when much of the work was outsourced.  The Agency was responsible for a substantial budget and its projects had national significance.  In his opinion, the Agency was capable of completing the projects currently under way.  He conceded that the Agency faced many challenges but disagreed that operations should be suspended.  He undertook to provide a detailed written response to questions to the Committee.

The Chairperson was concerned that the allocation for ICT services was inadequate.  The budget should be reviewed.  Government needed to take the leading role and make sufficient funds available, even when entering into public/private partnerships.  He asked that the disciplinary action was finalised as soon as possible and that the Agency refrained from making over-generous termination settlements.

Other Committee Business
Adoption of the minutes of Committee meetings
The adoption of the minutes of the meetings held on 21 and 28 February 2012 was deferred.

Committee Report to the presidential Review Committee on State-owned Entities
The Committee deliberated on the report on a page-by-page basis.  The technical amendments and typographical corrections proposed by COPE were accepted.  The DA had submitted several suggestions for insertion in the draft report.  The ANC did not support any of the suggestions made by the DA.

Ms Morutoa moved for the adoption of the report.  The motion was seconded by Ms Killian. The report was adopted, with amendments.

The meeting was adjourned.


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