South African Broadcasting Corporation 2012 Strategic Plan

Meeting report

The Chairperson noted the apologies of Mr G Schneemann (ANC) and Ms R Morutoa (ANC)

Strategic Plan and Budget of the South African Broadcasting Corporation (SABC)
Mr Thami Ka Plaatjie, Deputy Chairperson of the SABC Board tendered the apologies of the Chairperson of the Board, Dr Ben Ngubane.

Ms Lulama Mokhobo, Chief Executive Officer, SABC presented the briefing to the Committee (see attached document).  The SABC was the largest broadcaster on the African continent, with 18 radio stations and three television channels.  The public broadcaster reached 24 million people per day.

The briefing outlined the vision, mission and corporate values of the SABC.  The executive summary gave an overview of the background to the SABC and included a summary of the business structure; the SABC Charter; the key requirements for public services; the legislative and regulatory environment; music regulations and license conditions; television content and license conditions; the broadcasting of sports of national interest and the regulations on advertising and sponsorship.

The broad strategic objectives for the period 2012 to 2015 were outlined.  The key focus areas were organisational stability, financial sustainability and the reorganisation of the Corporation.  The critical projects for the Medium Term Expenditure Framework (MTEF) period were the implementation of the Digital Terrestrial Television (DTT) digital content strategy (2012/13); meeting the government guarantee deliverables (2013/14) and completion of the digital migration programme (2014/15).  The DTT strategy, performance focus areas and business strategy were summarised.

An overview of the industry included the results of the SA Entertainment and Media Outlook (2011 – 2015) study conducted by PriceWaterhouseCoopers (PWC).  The information provided included the current status and outlook of the television market and the radio advertising industry.  The major challenge to the public broadcaster was the growth of the pay television market.

Ten strategic objectives were identified for the period 2012-2015.  The SABC was currently undergoing a process of reorganisation.  A skills audit was in progress and once completed, employees might be re-aligned or re-assigned.  The process had the full support of organised labour.

Ms Gugu Duda, Chief Financial Officer, SABC took the Committee through the quarterly key performance indicators for the 2012/13 fiscal year.  The briefing covered the key deliverables and indicators and the specific quarterly targets that had been set for each strategic objective.  The key performance areas were identified as revenue enhancement; cost management; audience attraction and retention; content management and enhancement; upgrade of technological infrastructure and governance.

The budget for the Medium Term Expenditure Framework (MTEF) period 2012/13 to 2014/15 was presented.  Total revenue for 2012/13 was R6.2 billion.  A breakdown of revenue sources was provided.  The most significant source of revenue was from advertising, totaling R4.3 billion (69.5%), followed by television license revenue of R920.8 million (14.7%).  Total expenditure was R6.1 billion.  Interest paid amounted to R114.1 million.  The operating profit (before interest and tax) was R100.9 million.  The net profit was R11.1 million.  The key drivers and assumptions for the budget estimates were provided.

The SABC was required to meet the targets that had been set for the government guarantee provided in December 2009 for the loan of R1 billion from Nedbank.  The SABC had approached the National Treasury to request amendments to the guarantee conditions.  If the submission was approved, the guarantee targets would be met.  A loss of R119 million was projected for 2011/12 as opposed to the guarantee condition of a profit of R228 million for the year.  The actual loss declared could be less as the SABC continued to apply cost management measures.  The performance monitoring mechanisms were listed.

A summary of the projected financial statement and the projected cash flow statement were included.  The total equity and liabilities was R4.6 billion in 2012/13.  Capital expenditure investment in 2012/13 amounted to R527 million.  At least R400 million of the loan was kept in reserve. 

The projected cash flow statement demonstrated the ability of the SABC to generate cash from normal operations during the MTEF period.  However, the additional funding requirement for capital expenditure, content acquisitions, sports rights and production and Digital Terrestrial Television (DTT) content, subtitling, dubbing and audio amounted to R1.3 billion in 2012/13 and approximately R1 billion p.a. thereafter.  The SABC could contribute R447.4 million in 2012/13 but additional funding of R461.3 million would be required.

The briefing was concluded with the statement of borrowings/debt.  The total debt at the beginning of the 2012/13 fiscal year was R889 million.  The Nedbank loan would be repaid by the end of 2013/14.

Due to time constraints, the sections in the briefing document dealing with the key strategic deliverables, multi-platform distribution strategy, television and content strategy and the content themes were omitted from the verbal briefing.

Discussion
During the briefing, Members had difficulty in aligning the verbal briefing with the documents that had been circulated.  Members pointed out discrepancies in the information provided in the briefing document and in the strategic plan document submitted to the Speaker of Parliament.  As a result, the integrity of the information provided was brought into question.  The strategic plan document submitted to Parliament did not include the quarterly targets that had been set for the current financial year, although the information was included in the briefing document and in the supplementary document.  This omission would make it difficult for Members to monitor the performance of the SABC in implementing the strategic plans.  It was not clear which documents would be approved by the Committee.

The Chairperson said that the strategic plan document that was submitted to Parliament would be referred to in all instances.  He asked the SABC presenters to cross-reference the briefing document with the strategic plan document during the presentation.  Any altered data had to be brought to the attention of the Committee.  The Committee had experienced similar problems with all the strategic plans of the State-owned entities reporting to the Department of Communications (DOC).  If changes were made to the version that was submitted to the Speaker of Parliament, the document had to be recalled and an amended version had to be submitted.

Ms Mokhobo explained that the SABC had attempted to apply the SMART criteria required by the Auditor-General to the strategic plans.  The quarterly targets for the 2012/13 fiscal year were included in a separate document circulated to the Members (see document titled “Supplementary Information on Quarterly Targets FY 2012/13”).

Ms J Killian (COPE) explained that the Committee had to determine if the budget was credible and realistic.  The financial management of the SABC was under scrutiny.  Quarterly targets should have been set at the beginning of the budget process.  The Committee would be assessing the performance of the SABC against the quarterly targets.

During a break in the proceedings, a list of errata was produced by the SABC (see attached document).  Ms Duda took the Committee through the discrepancies between the strategic plan document submitted to Parliament on 7 March 2012 and the briefing document.  Subsequently, Members pointed out other discrepancies that had not been included in the list of errata.

Mr D Kekana (ANC) asked the presenters to plan presentations in a manner that took into account the limited time available for briefings to the Committee.

Ms Mokhobo explained that much work had already been done on the strategic plans before her appointment as CEO.  She was aware of the provisions of the Public Finance Management Act (PFMA) concerning the submission of the strategic plan documents.  Ms Duda was appointed as CFO in March 2012.  The information provided in the documents that had been prepared was scrutinised and a number of discrepancies were found.  The matter was discussed with the SABC Board and it was decided to prepare a supplementary document reflecting the corrections that had been made.  The Auditor-General had only provided training on the SMART criteria during the previous week and it was acknowledged that the information provided might not meet the required standard.  A list of errata was compiled during the proceedings.  The quarterly performance indicators included in the supplementary document replaced the information included in the briefing document.  The supplementary document could be submitted to the Speaker of Parliament as an addendum to the strategic plan document.  Alternatively, the document could be withdrawn and an amended version could be submitted.

Mr Ka Plaatjie apologised for any confusion that had been caused.

Mr B Steyn (DA) accepted the explanation that was provided.  He assured the SABC that the Committee wished the SABC to be successful and Members’ comments were not intended to be malicious.

Ms S Tsebe (ANC) endorsed Mr Steyn’s remarks.  The background information provided had given some clarity.  She suggested that the briefing was proceeded with and that any discrepancies in the information provided were cleared up in the responses to Members’ questions.

Ms Shinn asked for an update on the matter concerning Mr Phil Molefe and the CEO.  The Independent Communications Authority of South Africa (ICASA) had informed the Committee that an investigation into allegations of political interference at the SABC ordered by the South Gauteng High Court was underway.  The SABC was losing viewers because of the low standard of content.  The public broadcaster was asking for a substantial amount of funding to provide more television channels.  She asked why the SABC was not focusing on improving the content of the existing channels instead.  The credibility of SABC news coverage was under question and she was doubtful of the chances of success of the new 24 hour news channel.  The targets that had been set to increase local content were welcomed.  The SABC did not have a good reputation for paying production companies on time.  During the briefing, it was stated that payments to suppliers would be ‘stretched’ in order to improve cash flow but this practice was unfair to suppliers.  The National Treasury refused to ring-fence license fee revenue and there was a general culture of non-payment of television license fees amongst South Africans.  She asked if the SABC had considered the feasibility of adding the license fee to pay television subscriptions.

Mr Kekana considered the SABC to be an expert in the field of communication but He noted that the strategic plans included conducting a skills audit.  This item had been on the agenda for a number of years but at some stage it was necessary to produce the results of the audit.  Staff changes continued to occur but the human resource strategy was unclear.  Previous briefings to the Committee had included a turnaround strategy.  He asked what progress had been made in implementing the strategy, which was not mentioned in the briefing.

Mr Kekana said that South Africa had a high unemployment rate.  In Germany, 60% of young people received artisan training, which had contributed significantly to that country’s economic success.  The lives of young people could be significantly improved if they received training and acquired skills.  He would like to see that the SABC screened more educational programmes instead of imported content of dubious quality.

Ms W Newhoudt-Druchen (ANC) would like to see more female technicians, artisans and managers being employed by the SABC.  It was stated during the briefing that the SABC outsourced 100% of the content that was broadcasted.  She asked what action was being taken to improve the standard and quality of content.  Many young people did not watch SABC television broadcasts because they considered the content to be of low quality.  She asked what training was provided to encourage people living in the rural areas in particular to produce local content.  She wanted to know what support was provided to community radio and television stations.  The briefing included detailed financial information and she was pleased to note that the budget included provision for access to television broadcasts for persons with disabilities.  However, she remained concerned that not enough was being done to ensure that all programmes were subtitled once DTT was implemented.  She encouraged the deaf community to pay their television licenses but it was difficult to persuade them as most programmes were not subtitled.  90% of films broadcasted by Mnet were subtitled and she asked why the SABC did not work with the pay television companies to improve the level of access for the disabled community.  She asked for more information on the statement made during the briefing that a review of the SABC’s funding model was necessary.  She had seen little coverage of the national women’s soccer team and asked if the SABC would be broadcasting the Special Olympic Games.

Mr Steyn had studied the documents provided by the SABC during previous briefings to the Committee.  The skills audit was supposed to have been completed by March 2010 and he asked if a report on the audit had been issued.  A television license had to be produced when a new television set was purchased.  He asked if consideration was given to pass regulations requiring pay television subscribers to produce a television license.  Discussions on DTT had mentioned that applicants for Set-Top Boxes (STB’s) would be required to produce a television license in order to qualify for the subsidy.

Mr Steyn complained that the financial information in the strategic plan document was badly printed.  It was not clear how the capital expenditure on infrastructure would be spread across the provinces.  The SABC had requested the National Treasury to review the government guarantee conditions.  It would appear that the assumption was made that the request would be approved and he wondered what action would be taken if the request was declined.  The Minister of Health was adamant that a ban on alcohol advertising would be introduced.  The SABC had to take into consideration that such a ban would have a significant impact on advertising revenue.  The DOC had informed the Committee that there was a substantial shortfall in the funding requirements for DTT.  Although DTT was a national priority, the National Treasury had declined applications for additional funding.  He wondered if it was not necessary to review the costing of the DTT programme or if there were other reasons why the Treasury had not approved the funding requests.

Mr Steyn said that one of the government guarantee conditions was that the SABC would reduce the number of employees.  He asked what the reason was for the 8% increase in the budget for staff expenditure.  The lease for the outside broadcasting vehicle would expire in the near future but it was not clear what the impact would be on the budget.  It was not clear if increased revenue from advertising was expected from broadcasting the Olympic Games.  The risk management strategy made no allowance for the failure of the turnaround strategy.  He asked when the 24 hour news channel would be launched.  He noted that television license revenue was not expected to increase significantly but the cost of collecting the license fees would be escalating by 7%.

Ms Tsebe asked that specific target dates for the strategic objectives were indicated.  Revenue was expected to increase by 9% but it was stated during the briefing that adequate revenue provision remained a challenge for the SABC.  The SABC had to pay R72 million to a claimant after losing a Court case.  She asked how much had been paid out in total as a result of legal action against the SABC and questioned the standard of the legal advice being provided to the broadcaster.  She understood that an external service provider was appointed to conduct the skills audit that should have been completed by March 2010.  She approved of the approach being taken to align the skills of employees with the job.  This had been raised as a serious concern by employees during the Committee’s oversight visits to SABC facilities.  She asked for more information on the statement made during the briefing that the three SABC television channels would remain unchanged.  She suggested that a strategy was developed to address the negative reports on the SABC in the media.  She asked what progress had been made in addressing the lack of capacity, which had been listed as a challenge in previous briefings.  She asked for an explanation for the length of time between the expiry of the employment contract of the Head of Marketing and the commencement of the process to recruit a new incumbent.  Sentech was involved in the programme to erect low power transmitters.  She asked what role was played by the SABC in identifying where the transmitters would be installed and what criteria were used.  The Auditor-General had found instances where the petrol cards provided to managers were abused.  As a result, the cards were withdrawn and a travel allowance scheme was introduced.  The cost of the allowance scheme was however far higher than the petrol card scheme.  The briefing had not referred to this matter.

Mr Ka Plaatjie advised that Mr Molefe was placed on special leave by the CEO.  The Board had requested the CEO to provide the rationale for her decision.  The Board had held frank and open discussions with the parties involved in the matter.  A special meeting of the Board had been scheduled and he hoped that a lasting solution would be found.  Mr Molefe had been placed on special leave on previous occasions.  The issue of editorial independence was not the key issue.  The SABC did not condone political interference in the content of news broadcasts.  The CEO was also the editor-in-chief and the Accounting Officer and had oversight responsibilities.

The Chairperson remarked that the reason for Mr Molefe’s suspension was therefore not the reason reported in the reports in the press.

Ms Mokhobo explained that the matter concerning allegations of political interference and the blacklisting of organisations was of long duration.  ICASA had been instructed by the South Gauteng High Court to conduct an investigation.  The response of ICASA and advice on how the SABC should proceed were awaited.  She conceded that viewer numbers had declined.  There was a perception that the pay television platforms provided better content.  Certain sectors of society considered the possession of a satellite dish to be prestigious.  However, the SABC offered good quality content as well and she could provide Members with a list of the top ten programmes.  She agreed that a strong marketing strategy was needed to change viewer perceptions.  The DTT programme allowed for the number of television channels to be increased.  The SABC was given the mandate for DTT and would participate in the programme.  News broadcasts were currently restricted to one hour per channel per day.  In the process of gathering news, much content was accumulated but 80% had to be archived.  The 24 hour news channel would allow for more extensive news coverage.

Ms Mokhobo explained that the decision to defer payment of suppliers was made at a time that the SABC had suffered a serious cash flow problem.  As a result, the Corporation was accused of forcing production companies to close down.  The SABC planned to spend R800 million on the acquisition of local content during the current financial year, which would help to resuscitate the local production sector.  She confirmed that all outstanding supplier accounts had been settled.  Tight financial control measures were in place and the SABC would not commit to new productions if funds were not available.  Members’ suggestions concerning television license fee collection would be considered.  Changes to existing legislation would be necessary to allow the SABC to collect license fee revenue from pay television companies.  Communication with the Committee would be improved as new incumbents at the SABC gained more experience.  She reminded Members that several SABC journalists had received awards and recognition for excellence.

Ms Mokhobo was not aware of a skills audit report.  The Human Resource Executive had advised that no skills audit had been undertaken.  The skills audit would be done in-house as The SABC was reducing the use made of external service providers and consultants.  The results of the skills audit were expected at the end of June 2012.  The results would include statistical data as well as qualitative information gathered from employees.

Ms Mokhobo listed programmes aimed at uplifting rural communities, for example “Touching Lives”, a series promoting agriculture as a key career area and a series on occupations that could be followed by the youth.  The SABC had built relationships with aid agencies, such as USAID and Gift of the Givers.  A review of the marketing strategy would include publicising programme offerings.  The decision to increase local content acquisition would help to stimulate the economy.  News and current affairs programmes were made in-house but other content was outsourced.  The budget included provision for subtitling of programmes to increase access for the disabled community.  The cost of subtitling a local production was approximately R1.2 million.  Sport broadcasts were not suitable for subtitling.  Most news programmes included a sign-language interpreter.  Initially, the 24 hour news channel would broadcast some subtitled content and this would be increased over time.

Ms Mokhobo said that a review of the funding model was motivated by funding pressure.  The amount of funding available for the existing three television channels was barely adequate.  Once DTT was launched, the demand for more channels and digital content was expected to increase.  Funding constraints would restrict the extent by which the plans could be implemented.  Other governments made substantial funding available for public broadcasters.  The SABC raised 80% of revenue from advertising.  There were limitations on how much revenue could be generated and assistance from the fiscus was required.  In terms of the revised funding model, 60% of funding would be provided by government.

Ms Mokhobo confirmed that the SABC would broadcast the Special Olympics.  Advertisers were reluctant to support the Special Olympics but efforts to find sponsorships and encourage the involvement of various Departments were continuing.  The SABC had an agreement with the South African Football Association (SAFA), which included broadcasting matches played by the women’s team.  Confirmed match times would help to prevent regular programmes from being dropped at short notice.  The new DTT sport channel being planned would broadcast minority sport fixtures as well.

Ms Mokhobo suggested that the Committee referred questions concerning the STB’s to the DOC.  The infrastructure projects took into account the comments of the Committee concerning the state of the facilities visited during oversight visits.  The SABC planned to renovate and upgrade facilities and to provide facilities in rural areas that would be available to local producers.  The percentage salary increase was decided before her appointment as CEO.  The SABC Board had to approve the salary increase percentage.  The salary increases of managerial staff would be based on individual performance.  It was essential that critical and valuable skills were retained.

Ms Shinn asked for clarity on the Siemens/ATOS contract matter.

Mr Lumko Mtimde, Member of the SABC Board agreed that DTT was a national imperative.  The introduction of any new channels would be subject to a cost/benefit analysis.  The SABC had a contract with Siemens to provide services.  Siemens wanted to transfer the contract to ATOS.  The matter was discussed with Siemens.  An analysis was in the process of being finalised and recommendations would be submitted to the Board.  A new contract with ATOS had not been concluded.

Mr Cedric Gina, Member of the SABC Board advised that the Board had been briefed on the decline in viewer numbers.  An exercise to determine the reasons for the decline was conducted.  The conclusion was that dissatisfaction with content was not the only reason for the decline in viewer numbers and that the issue was far more complex than originally thought.  The 24 hour news channel would only be available to DSTV subscribers.  The SABC was aware that the Committee was critical of this decision as most South Africans would not benefit.  An alternative suggestion was that one of the existing free-to-air channels was used for continuous news broadcasts.  The Board had requested that the alternative proposal was studied thoroughly and that a cost/benefit analysis was done before it could be considered.  The decision to include the 24 hour news channel on the DSTV platform until the DTT project was implemented had delayed the launch.

Mr Gina advised that Executive Managers had been given the mandate to discuss the broadcasting of educational programmes with the Departments of Basic Education and Higher Education and Training.  The outcome of the discussions was awaited by the Board.  The Board had been informed that the skills audit had been done in 2010.  The results of the audit had not been submitted to the Board.  The Human Resources Department had been unstable and a new Human Resource Manager was appointed only recently.  The Board had continued to provide guidance on gender and racial equality employment practices and a number of procedure guides had been developed.  The Board was informed by the former Acting CEO that performance contracts had been signed by the executive managers.  However, the contracts were not been found by the new CEO.  The SABC had been in a state of change and extensive use of consultants had been necessary in the past.  The Board had confidence in the ability of the new CEO to provide the necessary leadership.

Ms Mokhobo advised that the performance of the legal department had not been satisfactory.  Progress was being made in recruiting a new Head of Department, who had to have strong legal skills.  An integrated media strategy was being developed and would be presented to the Board in June 2012.  She conceded that the SABC had not performed well in providing training to employees.  The strategy was to re-skill existing staff to fill vacant positions and to recruit new employees only when absolutely necessary.  The DOC target was to erect 100 low power transmitters in remote areas per annum.  The project was a joint venture by the DOC, the SABC and Sentech.  The decision on where a transmitter would be erected was based on the presence of a community and on reaching the maximum number of people.

Ms Mokhobo said that the decision to replace the petrol card system with a travel allowance system was made in haste after the Auditor-General had identified instances of abuse.  The travel allowance system was more costly and was subsequently replaced by a more cost-effective car allowance system.  The SABC was reluctant to claim back the money that had been paid out under the previous system but the issue was being considered.

Ms Sully Motsweni, SABC explained that all petrol cards issued to managers were withdrawn in 2010.  The cards issued to members of the sales team and to the vehicle fleet were capped.  The cards were replaced by a travel allowance system.  Executive managers were allowed to tailor their individual remuneration packages.  The SABC had tried to establish who else was involved in providing the services in terms of the contract with Siemens, what the cost had been to date, who was managing the process, what approval had been obtained for transferring the contract and what policies and procedures were followed.  Siemens was allowed to transfer the contract to ATOS but this had not yet been approved by the Board.  The Committee would be briefed at a later stage on the due diligence process, what work remained outstanding and if the contract would be renewed.

Ms Duda explained that the SABC had agreed to the government guarantee conditions in 2010.  However, it became apparent that the SABC had lost revenue because the conditions prevented the Corporation from capitalising on opportunities.  Discussions were held in 2011 with the National Treasury to review the conditions.  The SABC had advised the Treasury that the net profit targets for 2011/12 would not be met.  R400 million of the loan was being kept in reserve.  The SABC was generating R300 million p.a. in cash revenue.  Nedbank was satisfied that the SABC would be able to repay the loan in accordance with the loan agreement.

Ms Duda said that the proposed ban on alcohol advertising was identified as a key risk to meeting the revenue targets.  Discussions with the Department of Health on mitigating initiatives had been held.  The sales team was encouraged to find new advertising customers.  She was unable to comment on the funding allocation decisions made by the National Treasury.  She was aware of discussions between the Ministers of Communication and Finance on the funding shortfall issue but had no information on what the outcome was.  The costing of the DTT project had been done after extensive consultation with the industry.  The lease on one outside broadcasting vehicle expired at the end on 2013.  The three remaining vehicles were new.  The cash flow forecasts included provision for the replacement or renewal of the lease.  According to her calculations, employee benefit expenditure would increase by 4.97%.  It was apparent that the SABC would not be able to meet the optimistic guarantee revenue targets for 2011/12.  The budget assumption was that revenue would grow by 9% in 2012/13.  The increase achieved in the previous year was 16%

Ms Killian queried the increase in the employee benefit liability over the MTEF period (from R918 million in 2012/13 to R1.7 billion in 2014/15).  She asked how the SABC planned to manage the new channels included in the DTT project.  The Committee was informed during 2011 that the funding shortfall was R7 billion.  She asked what the current funding shortfall was.  The SABC appeared to be competing for increased viewer numbers with itself rather than with the pay television companies by screening popular programmes on different channels during the same time slot.

Mr Kekana detected some signs of improvement at the SABC.  He welcomed the initiative to involve the education Departments in developing more educational content.  He said that the SABC should not rely on the revenue from alcohol advertising and should rather concentrate on sending out the right message about alcohol abuse.  Other public broadcasters (such as the BBC) were 100% funded from the fiscus but the National Treasury had to be convinced that the SABC was spending taxpayers’ money wisely before it would be persuaded to approve funding requests.  He asked for clarity on the status of the turnaround strategy developed in 2010.

Ms Shinn appreciated the honest response to questions on the Phil Molefe matter.  She hoped that ICASA would finalise the investigation into allegations of political interference without delay.  There was a limit on the funding available for DTT and she awaited a response to her question on why the SABC did not concentrate resources on improving its existing three television channels rather than attempting to introduce more channels.  Substantial amounts had been made available for upgrading technology and for new equipment for DTT.  She understood that tenders had not been issued and she wondered if the SABC would tailor the list of new technology and equipment required to the funding available or review the priorities.

Mr Steyn noted that the budget did not include provision for legal settlements.  He was not satisfied with the response to questions concerning the replacement of the petrol card system with the more expensive allowance system.  He asked if adequate investigation had been done before the decision to change the system was made.  He asked if any executives from the previous management structure were still in their posts.  He wanted to know if the SABC was still paying DSTV subscriptions for its staff.  He was of the opinion that the best defence against negative publicity was to ensure that the facts were communicated as soon as possible.

Ms Newhoudt-Druchen said that little time remained before the DTT programme was due for implementation.  She asked what action was taken to increase awareness of the DTT programme.

Ms Mokhobo advised that the SABC had a transversal and network strategy in place to avoid broadcasting competing programmes in the same time slot.  Viewer numbers had increased by 20% since the strategy was implemented.  She agreed with Mr Kekana’s comments on the need to educate and skill the unemployed, particularly the youth.  A plan is in place and she assured Members that more would be done.  She was encouraging the change from ‘turnaround strategy’ to ‘standard operating procedure’.  ‘Turnaround strategy’ was no longer referred to in the organisation.

Ms Mokhobo said that she had no intention to control news content.  Her responsibilities included oversight and she would intervene if she found that something was going wrong.  Accusations of biased reporting would be verified.  Her request for the diary was a once-off occurrence.  Staff had been informed that editorial integrity was expected.  She said that most of the available funding would be used for content for the existing three television channels.  There was enough sport coverage and children’s programmes and the remaining content categories would be phased in.  She hoped that the Committee would be able to assist with meeting the funding requirements as there was an expectation from the public that DTT would result in more channels.  The SABC was satisfied with the viewer numbers for the SABC 1 channel.  The content was changed to reflect audience values.

Ms Mokhobo confirmed that the budget included a legal contingency.  She and the CFO had met with parties threatening litigation against the SABC in order to negotiate a settlement agreement and avoid drawn out and costly Court battles.  She confirmed that the SABC was no longer paying the DSTV subscription fees of employees.  The SABC responded to adverse media reports and attempted to communicate the facts but this was not easy if the matter was of a sensitive nature and if other processes could be placed in jeopardy.  Information on the digital migration programme had been published in all the major newspaper but she would discuss the matter of publicising the programme on television and radio with the Minister.

Ms Duda explained that the increased employee benefit liability in subsequent years was because the SABC had enjoyed a pension fund ‘holiday’ but would have to increase contributions in future.  A provision was raised in the accounts when the amount of a legal settlement was known.  Details of legal settlements would be disclosed in the financial statements and annual reports.

Mr Mtimde said that there had been significant improvement in the standard of management of the SABC.  The executive management provided better leadership, governance had improved overall and there was more management stability within the organisation.  The Board would continue to support the management and ensure that the commitment to editorial integrity and independence was met.

Prof Pippa Green, Member of the SABC Board noted Members’ criticism of the standard of the content.  She listed the awards won by SABC journalists to illustrate that the broadcaster was capable of producing quality content.  She conceded that there was a historical negative perception and that room for improvement remained.  There were objective measurements to determine the extent of editorial accountability and control, for example audience numbers and adverse rulings in cases where complaints had been made.  The CEO had final accountability to measure these elements, which had to be done in a manner that did not undermine the organisation.

The Chairperson said that the main issue in the debate on funding of the SABC was the separation of commercial and public interests.  There was a need to determine and measure the public and commercial elements.  He suggested that the applicable legislation was considered but there was also a legacy element that should be identified and corrected.  This was not an issue that should be addressed by the SABC.  He wondered why the SABC included mention of newspaper reports in its shows.  Other matters for consideration were the activities of journalists and diversity of news context.  The Committee accepted the explanation provided on the matter concerning Mr Molefe and noted that an internal process was underway.  A skills audit was supposed to have been done in 2010 and funding provision was made.  The Committee asked that the matter was investigated and that a detailed report was submitted.  The Committee requested a detailed report on the Siemens/ATOS contract matter, including how much was involved, what value for money was provided and what skills transfer had taken place.  The Committee awaited the outcome of the ICASA investigation.  The Committee would look into the issue of television license fees and suggested that the SABC explored alternatives to the current license revenue collection methods and develop recommendations.  There was potential for conflict between the public broadcaster’s universal access obligation and the payment of television license fees.  The issue of STB subsidies being available only to television license holders had to be taken into consideration.  Consideration should be given to a pay-to-view option and the ‘must-carry rule’ had to be revisited.  He explained the procedure that had to be followed when documents submitted to Parliament were subsequently amended.  The Committee would report that a corrected document would be resubmitted to Parliament.

Ms Mokhobo undertook to provide the corrected document by Thursday, 10 May 2012.

The Chairperson advised that the Minister be informed of the resubmission of the strategic plan documents.

Mr Ka Plaatjie thanked the Committee for the input provided.  He gave the assurance that the Board was committed to improve the performance of the SABC and that the excesses of the past would not be repeated.

The Chairperson thanked Members and delegates for their participation.

Other Committee Business
The Chairperson advised that the .za Name Domain had been released from presenting a briefing on the strategic plans and budget.  The DTT programme was not being advertised in community media and this matter would be taken up with the DOC.  The Committee’s report on the strategic plan and budget of the DOC would be finalised and adopted by Friday, 4 May 2012.  The budget vote debate of the DOC was scheduled for Tuesday, 8 May 2012.

The meeting was adjourned.