SABC progress report

Meeting report

Request for the Minister to appear before the Committee
The Chairperson informed the Committee that he had received a letter from Ms J Killian of COPE, requesting that Minister Dina Pule come before the Committee today to brief Members on the ongoing media reports about her. The request was communicated to the Minister; however, she was attending the World Economic Forum and could not come to the meeting. The Minister was still willing to come before the Committee.

Ms R Morutoa (ANC) asked the Chairperson to be specific about what was being requested of the Minister.

The Chairperson replied that the request from COPE was for the Minister to account for issues emerging from the ICT Indaba and ongoing media reports about it. Some of the questions posed in the National Assembly had not been answered because the Joint Ethics Committee was still dealing with the matter.

Ms Killian clarified that the request related to the Minister accounting for the issues stemming from the ICT Indaba. There were other matters that were sitting before the Ethics Committee, but the Committee could not remain silent on matters of great importance. She accepted that the Minister was unable to attend the meeting and thanked the Chairperson for getting back to her on the matter. She had copies of the request if Members wanted to see it.

Ms Morutoa said that questions were asked in the House and it was quite clear that there were other processes going on, such as the one in the Ethics Committee. She did not remember any instance where the Committee sat down and decided, despite the fact that the matter was explained in the House, that they would call the Minister in. Therefore, she wanted to distance herself from the request.

The Chairperson stated that the Committee would not be doing anything until all the relevant processes were completed. Even when the matter came up in the House, the Minister could not respond to questions because the matter was still being processed. However, the Minister did not have any problem coming to the Committee to talk about the matter once the processes were complete. He just did not want the media to report that the Minister was “running away” from the Committee.

South African Broadcasting Corporation (SABC)
The Chairperson noted that the South African Broadcasting Corporation (SABC) had prepared an additional presentation focusing on the entity’s turnaround strategy. He did not think the Committee would be able to take the extra presentation, given the time constraints. It would take a full meeting to deal with the Turnaround Strategy – it would not be a quick matter. Unless Members indicated otherwise, the Committee would deal with the three presentations on the agenda.

Dr Ben Ngubane, Chairperson of the SABC Board, stated that he hoped there would be enough time to discuss board governance issues as well because it was a very pressing matter that had to be communicated to the Committee.

The Chairperson noted that the request was to discuss board governance issues; however, in terms of King III, it was called “board functionality”.

SABC Skills Audit Report
Ms Lulama Mokhobo, Group Chief Executive: SABC, noted that Mr Thabiso Lesala, the Group Executive for Human Capital Services at the SABC, would take the Committee through the recommendations. Ms Mokhobo reminded the Committee that the first time the SABC discussed the matter of the skills audit with Members, they spoke about it within the context of the future skills that the SABC required versus the fact that there were ongoing concerns about the number of employees at the SABC. The undertaking made to the Committee was that the SABC was going to review the skills it required as they moved into the Digital Terrestrial Television (DTT) environment. This was being juxtaposed against the current number of employees that the SABC had. The SABC would be able to identify, very clearly, what skills the entity had and where skills were needed. As the SABC was re-engineered to do what it needed to do in the future, the employees would be redistributed into their appropriate positions. It had been a journey of about four months where skills had been assessed. To some degree, the top management had been met with fear from some employees who had had suspicions that the purpose of the skills audit was to exclude people. Mr Lesala had been able to calm staff and had taught them how they could benefit from the skills audit. Following the skills audit, employees would be matched to their appropriate positions. Attached to this was the question of development as well. Employees that were put into new positions would also have to be trained.

Mr Lesala stated that the SABC had said that it would tackle the challenge of skills development head on. The entity had taken on a number of initiatives, especially from a technological point of view, to address this matter. The organisation spent approximately R23 million on learning and development initiatives, and a total of 2 049 employees attended learning programmes that were linked to their personal development plans.

The purpose of the skills audit was to assess skills provision against set skills requirements in order to develop strategies that would meet its human capital needs both current and future, thereby ensuring business sustainability. It would also provide the SABC with an idea of where the critical skills segments were located and how they could best be aligned to the needs of the organisation. Strategic and structural business factors taken into consideration included: the approval of the top management structure by the board, the realignment of the divisional structures in line with the top structure, the incorporation of content enterprises into television, the rollout of Digital Terrestrial Television (DTT) and the launch of the 24 hour news channel.

There had been varying levels of understanding of the purpose of the skills audit and this had resulted in some suspicion of the process and the purpose for which the information would be used. However, the SABC had made progress in determining skills levels within the organisation. Further work was needed in phase two to ensure that the SABC had the right skills in the right place to achieve its strategies in the future.

The 2 049 SABC employees were trained in the fields of commercial enterprises, content enterprises, corporate affairs, group services, human capital services, news, public broadcasting, commercial broadcasting and technology. Total expenditure on training was R23 million, with the average unit cost per employee trained amounting to R11 200. 47% of employees trained were female and 53% were male.

Background
In February 2012, the SABC executive committee mandated a skills audit to be conducted across the SABC to ascertain the level of skills and qualifications that exist within the organisation, and to identify the skills needed for future operations. Once identified, a training plan would be developed to ensure the sustainability of the organisation.

Work was conducted under the Group Human Capital Services within the SABC and a multi-disciplinary team was constituted in order to ensure cohesion within the project. The team was tasked to develop a tool and approach to be used for the audit, as well as a project and communication plan. The idea was to compare the current skills found in the organisation with desired skills based on strategy and drivers. The task team would then come up with interventions to address the gap.

The first phase of the implementation plan would focus on the organisational structure required to support the achievement of the strategy. An employee skills and qualifications audit commenced to determine the current skills in the organisation. This put the SABC in a position to confirm whether the current structure and employee skills sets positioned the organisation correctly for the achievement of its long term strategic goals, or it would identify the skills gap which would inform the training agenda for the organisation.

Limitations and Challenges
▪ Some of the limitations include:
▪ Capturing the questionnaires manually, which resulted in a number of errors being recorded.

▪ Non-availability of some qualification categories on the system used to capture employee information.
▪ Some employees had been captured as having up to 11 qualifications – but many of them were found to be similar qualifications.
▪ The design of the questionnaire and the system used to capture and report the results were not aligned.
▪ There had been varying degrees of understanding of the purpose of the skills audit which had led to suspicion of the process and purpose for which the information would be used.

Findings
2 457 employees (67% of employee complement) completed questionnaires that were received by the various divisions across the SABC. Senior and middle management employees had the highest participation rate levels, with the former at 70% and the latter at 73%. The divisions of the highest levels of participation were television (96%) and radio (81%). The remaining divisions were commercial enterprises (80%), news (51%), stakeholder and provinces (67%), group services (71%), and technology(53%).

According to results, 80% of people who participated in the audit had qualifications between NQF level 5 and NQF 7. The exercise helped in identifying that a lot of work was needed to correct the NQF levels of qualifications. News, radio and commercial enterprises had relatively high numbers of employees with qualifications in NQF level 6-8. The top five skills that SABC employees had come across are: team work, handling of pressure, self-motivation skills, keeping confidential information and detailed orientated. The programming content creation skills, news reporting, auditing skills, performance management and entertainment skills were at the bottom.

Recommendations
Ms Mokhobo stated that the first recommendation was the SABC was allowed to retain the staff it had, as the entity had embarked on a process of identifying skills and allocating employees to positions where they would be able to function appropriately. The SABC implored Members to allow them to continue in this vein. There were some staff reductions resulting from natural attrition. However, as the SABC moved forward, especially with the launch of the 24 hour news channel, the staff level had to be ramped up. While there was journalistic ability within the organisation, the task of setting up the news channel required additional staff, especially in the area of economic news. This was part of what the SABC called “Vision 2030” because it believed in a vision that the organisation must lead in terms of communication in the country. For the news channel, the SABC was looking to employ an additional 100 people.

The second recommendation was that once employees were reallocated, and the SABC discovers that there were people that did not fit into the organisation at all; they would make a provision available that would create separation packages for these employees.

Discussion
The Chairperson asked why the SABC’s Chief Financial Officer, Ms Gugu Duda, was not at the meeting.

Ms Mokhobo replied that the CFO was supposed to be at the meeting but had to deal with an urgent matter at the SABC. She was expected to arrive at the airport this morning but she was not there. She had not been able to engage with the CFO yet, but would get a full report later.

Mr A Steyn (DA) noted Ms Mokhobo said that the SABC wanted to retain all its staff. This was contradictory to the resolution that there had to be a reduction of staff. Ms Mokhobo justified that going forward, with the 24 hour news channel; the SABC would require more staff. However, where the ambiguity came in, was that a skills audit had now been done where only 73% of the employees participated. He wondered how justice could be done to the audit process if almost a third of the staff in middle to senior management did not participate in the process. It meant that the SABC did not know what the skills were of the 30% in the middle to senior management category. It should be mandatory for every single employee to participate in this process. It had to be a dual process with the strategic plan and the skills required within the organisation. He worried that the SABC would provide separation packages to employees whose skills were needed, and retain employees whose skills were not needed or that could not be up-skilled. Was the skill audit complete or was it still ongoing? When was the Committee going to see exactly what the situation was? He was not getting the full picture as there was nothing of substance in the presentation that he could absorb. 

Dr Ngubane answered that the SABC should have told the Committee at the start of the presentation that they were still in the first phase of the skills audit. The questions that were raised were going to be very helpful when the organisation tackled the second phase.

Ms Mokhobo addressed the question on the 73% participation of middle to senior management in the skills audit. She acknowledged that there was resistance to the audit; however, the SABC was working very hard with the trade unions. There was a very strong presence of trade unions in the organisation. Management had had to work very hard to convince people that they were not being set up for removal.

Ms Mokhobo spoke to up-skilling and gap filling. This was central to the skills audit. This was just the first phase and it was important for the Committee to recognise that the organisation was dealing with a matter that was probably going to take up to end of the next financial year to settle completely. The recognition of the current skills and of the new skills required, plus the skills that still had to be developed through training programmes was an ongoing project.

Ms Mokhobo explained the need to retain staff. This was from the process used to identify the skills that were required within the SABC. As the organisation proceeded with the process, they would get to a point where they would talk to who was re-allocated and who the entity was unable to relocate for reasons that they were unable to be trained or they were unqualified. Employees had a choice as to whether they wanted to be trained or not. If not, then discussion would be held as to how these employees would be released. If people did not want to be retrenched then the SABC would enter into “separation agreements” with them.

She stated that the SABC was very aware of the 11 million jobs that the Vision 2030 suggested had to be created. This translated to roughly 650 000 people that had to be employed annually between now and 2030. The SABC was aware that it had the ability to create jobs. Jobs for the 24 hour news channel were just one of the areas where jobs could be created. For those that were not re-allocated within the organisation, the SABC would like to see how they could be assisted externally to hone their production skills. 

Ms Shinn asked if this skills audit was the one conducted by KPMG or if this was a separate audit. She found the report lacking because there did not seem to be an identification of what skills were needed for the SABC to become a quality digital broadcaster, particular in the area of engineering and technical skills. This was not adequately addressed in the report. She was alarmed that the SABC thought they did not have to cut staff; as they did. There seemed to be an over-supply of middle management. She asked what “20% of Other training” was. Those that declined to participate in the skills audit had to be read the riot act. If they could not prove that they added value to the SABC, perhaps they should be seeking other employment.

Ms Mokhobo replied that if employees were read the riot act for not participating in the audit, the SABC stood the chance of having a riot on their hands. They had to be extra careful about how the situation was being handled, as they were in the middle of executing critical projects. The last thing the SABC needed was a riot. The audit process was continuing and additional “forms” were coming through now. She understood that the lack of job security would cause employees to act out.

Ms Mokhobo explained that the SABC had utilised its own internal staff for the skills audit, as they wanted to retain costs as much as possible. As far as KPMG was concerned, they never actually did the audit. There was a proposal for them to do it, but this offer was never taken up. Therefore, the SABC used its own team, who understood the business better than any consultant.

Ms L van der Merwe (IFP) asked for timeframes attached to the audit process. These were lacking from the presentation. The Committee needed timeframes for when employees would be relocated to different positions. She was concerned about the participation of newsroom staff in the skills audit process. Only 50% seemed to have participated in the audit. There were reports of staff morale being low. She asked how the SABC would ensure that newsroom staff had the requisite skills to adhere to the principles of responsible journalism, especially as the organisation was heading towards launching a 24 hour news channel.

Ms Mokhobo replied that this was the first phase of the skills audit. In the normal scheme of things, and given that people would be trained as the SABC went along, she could not say that the organisation would be at full capacity in three years. As the SABC moved forward, more channels would be added. This was going to take quite a long time. She hoped they would be in full production by 2018, but the process of skilling and re-skilling people was an ongoing process. However, in terms of the skills audit itself – the SABC hoped to have that completed by the end of October. The structure of the organisation had already been completed.

On the level of responses from the news department – this matter was being addressed. The news teams were very educated and did not have to worry about whether or not they would lose their jobs. The SABC was trying very hard to get employees to focus on the 24 hour news channel. The SABC was also working closely with international broadcasters such as the BBC. Some SABC employees had trained at the SABC and had been invited to be trained at a broadcaster in India. Employees were also receiving proper training at Rhodes University. Through the re-skilling process, employees were starting to do job shadowing.

Ms Killian said she needed clarity on the SABC’s overall structure. She understood that there was a process in place currently that would finalise the structure; however, she thought that this should have been the very first step. In order to start, the entity had to know how many numbers of employees were needed and then a skills audit had to be conducted on the basis of where the SABC was heading. She failed to see the structure and how the “huge management-bloated bureaucracy” that was identified over the past years was going to be adjusted. How was the process designed? She wondered if the top structure was a little too “clumsy” or too “heavy and costly”.

Ms W Newhoudt-Druchen (ANC) stated that the concept of evolving technology had been mentioned and the rapid changes in this field. Would the SABC be able to keep up with this? Out of the 2 049 employees, how many were disabled? How many still needed training? She asked about the relationship between the SABC and National Electronic Media Institute of South Africa (NEMISA). The SABC said NEMISA would provide training and they had learnerships. She asked for clarity on the matter.

Dr Ngubane responded that there were a lot of technical skills within the SABC; they just had to bring it to the fore. There was no need to bring in other employees, as the SABC had its own internal skills. All that was needed was for employees to be up-skilled and they would be able to keep up with the best. The organisation was in the process of finalising the digital media initiative and this would be the high point of advancing technology efforts. He understood that the SABC had to look very carefully at how to upgrade disabled employees, as they should be able to learn any skills that they were capable of learning. He stated that the SABC was working with NEMISA and would continue to do so. 

Ms A Muthambi (ANC) noted that the presentation did not speak to what the training programmes were and if they spoke to broadcaster needs. The SABC reported that it had 860 designations with 640 job profiles. A major concern was that the SABC had been over-bureaucratised, especially in the area of middle management, which had left the broadcaster thin in technically skilled people, including programming staff. Could the SABC disaggregate the designations and do job profiles across employment levels to show the Committee how much staff had been allocated to different departments and where the “fat” of the organisation was? She thought the organisation needed serious streamlining. In a previous meeting the SABC told the Committee that they were leaking technical, broadcasting and contract creating skills. These skills were the core of the organisation. She wondered how the SABC was tackling this matter, especially since they were heading towards a digital platform. The SABC said that 27% of their staff was trained in “Other skills”. What were these? She noted that news reporting, producing and programming skills were sorely lacking. Millions of rands were allocated to the 24 hour news channel, yet the organisation was lacking critical skills for news broadcasting. She asked how they were dealing with this problem.
 
Dr Ngubane noted that the presentation did not speak to broadcaster needs. This was a serious issue that the SABC would focus on. He agreed that the presentation seemed to show that the organisation was short of technical staff, however, they were trying to trying to address this issue.

He replied that the headcount of 640 people was attainable, but it had to be financed. The SABC was not yet assured that they would be financed. The organisation was trying to create severance packages that would be offered to anyone, except those whose skills were indispensable. This was included in the Medium Term Expenditure Framework (MTEF).

Dr Ngubane concluded that with all these comments from Members, the SABC would be able to prepare a better report for the Committee that would be circulated to members in approximately three weeks.

The Chairperson noted that without timeframes for when all the phases of the skills audit would be completed, it was difficult to hold the SABC accountable. The Committee needed to know what the other phases of the audit were and how they were going to unfold.

Ms Killian asked how the SABC planned to retain skills once employees were re-skilled. Why had the 24 hour news channel not been launched on 3 September 2012 as previously announced by the board?

The Chairperson noted that the Committee was discussing the skills audit, and therefore the SABC did not have to respond to Ms Killian’s last question.

Mr Steyn needed clarity on audit which was supposed to be concluded at the end of October 2012. He asked if this referred to the conclusion of the first phase of the skills audit, or the conclusion of the entire audit. He understood that phase one was a gathering of information through questionnaires. Phase two had to do with the verification of the information, which he was concerned about. There appeared to be a few limitations which could make the entire audit process “suspect”. The presentation showed that information from the questionnaires was captured manually and that errors had been found. Also, the design in the questionnaire used to capture and report the results were not aligned. If this was the case, then the SABC was not going to come out with a credible result, which could jeopardise the future of the organisation.

Dr Ngubane replied that the presentation for the turnaround plan would explain what the phases of the skills audit were. Unfortunately, there might not be enough time to present the document.

Ms Muthambi stated that the skills audit could not be divorced from the organogram. She asked who the SABC was skilling. The organisation had to look at its organogram. Could the board justify that their training programmes were adding value to the organisation?

Dr Ngubane answered that training had been happening within the SABC for a long time. There was a lot required in terms of skilling people. Bursaries were provided through various institutions for training purposes. The SABC would continue dealing with the skilling of its people.

Ms Shinn also had serious doubts about the credibility of the SABC’s skills audit. She did not think that a credible audit of skills could be assessed by people within the organisation. She was told that the SABC did not have the necessary skills for digital television and wondered were they were going to source these skills.

Dr Ngubane explained that the question of credibility was inherent in any research exercise. That was why controls were built into the process and standards were set. He agreed that the SABC had to pay particular attention to credibility. They would tell their employees that everyone had to participate. He pleaded with the Committee to let the organisation move into the second phase, and they would come back to them at the end of the year to tell Members what the skills audit revealed.

The Chairperson hoped the SABC had taken note of the questions raised by the Members, as they were quite critical for the skills audit. He concluded that the reality was that the SABC had not finished the first phase of the skills audit. This meant the Committee was dealing with a matter that was “half cooked”. The Committee would look at the possibility of calling the SABC back to deal with all the questions Members had raised. This would depend on Parliament’s schedule and whether there was enough time in the year.

Auditor-General’s Progress Report
At the Committee meeting in March 2012, the SABC task team provided a detailed report outlining the tasks carried out in implementing the Auditor-General's (AG) recommendations from 2009. Significant progress had been made to fill vacant executive positions, in the area of contract management, and the suspension of employees. A project plan of outstanding items to be completed was also presented.

The AG had raised a concern about the declaration of interests. This item was delayed because the task team felt it was more important to implement the declarations process and securely store it on their drive. Once the process of declarations were familiar to all employees, then the meeting minutes would also be stored on the same drive. This should be completed by 30 September 2012.

There were delays in creating a systemised workflow process and declaration form storage. The intention was to create workflow processes for the approval of employee declarations by the appropriate levels of management. This task was not accomplished in time for 2012/13. A manual form and approval process was thus implemented. The automation and systemisation would be implemented for 2013/14.

There were legal matters that were still ongoing. The SABC was awaiting the outcomes of those.

In terms of trade exchange and sponsorship, the sponsorship policy had been reviewed and approved. It was currently implemented in the organisation. The trade exchange policy had undergone a review and extensive consultation was underway.

Matters referred to the Special Investigating Unit (SIU) included: R9.6 million for fruitless and wasteful expenditure, R428.6 million irregular expenditure, disciplinary action against more than 300 employees, financial misconduct in terms of the Public Finance Management Act, and nine ongoing criminal investigations and prosecutions. 

Discussion
Ms van der Merwe pointed out that the AG Report had raised particular concerns about leadership, decision making and governance. She addressed the issue of financial prudence and asked if she could get clarity on the R3 million sponsorship given to the ICT Indaba. Did the SABC believe that this was prudent and did the taxpayer get value for money? Who approved the actual donation?

Ms Shinn noted that the SABC had not had a Chief Technical Officer for over a year now. She asked if any urgency had been applied to filling this post. The interim SABC board had been asked to remind all employees about the SABC policy regarding performing other work and doing business with the SABC. She asked if this had been done. Was it part of the new employment contract? She wondered what the progress was on the Bid Adjudication Board. The matter of petrol cards was an ongoing problem and she asked what was happening with this.

Mr Lesala replied that the last time the SABC was at Parliament, the Committee was very concerned about the progress dashboard. He thought the entity had improved; however, there were some issues regarding staff appointments that were outstanding. The SABC recently hired a head of television and head of radio, which was critical. The AG performed well and they respected what the AG said about the SABC. Discussions were held between the SABC and the AG to clarify certain outstanding matters.

Mr Lesala referred to the petrol cards and answered that employees that were hired now were given the option of having a total package, where the employee decided what they wanted to do. New employees were not given petrol cards; they were in charge of their own budgeting as the AG was very vocal about people abusing their petrol cards. He believed that this method was going to help the SABC a lot.

Ms Sully Motsweni, the Head of the SABC Task Team, added that when they analysed the petrol card scheme they realised that the AG did not say the SABC should withdraw the petrol cards. The AG said the amount on petrol cards should be capped. Management at the time decided to withdraw the cards and replace them with a petrol allowance. However, this increased petrol expenditure by 170%. The board reviewed the allowance and the entitlement had fallen away. Anybody employed after February did not receive this benefit. This was how the SABC had been able to reduce the amount spent on petrol expenditure.

Ms Motsweni referred to the AG identifying poor policy on the declaration of interests. A declaration form had now been redesigned and they ensured that there was evidence in terms of saving the forms. The AG discovered that there was no physical registry of people who had declared their interest. The source documents could not be found, but since the task team had come into being, they had created a file on the server. The task team had also ensured the procurement department did checks against the task team’s database.

She replied that when the new board took over they appointed a Bid Adjudication Committee (BAC), but since November 2011 when the chairperson of the BAC resigned, they ceased to be a proper committee. However, the matter had been escalated and had become the responsibility of the Group Executive Committee.

Ms Killian addressed the decisions made on the AG’s recommendations which said the Minister should look at the fruitless expenditure incurred, in one instance, for security on the house of the former Group CEO of the SABC and Board Chairperson amounting to R206 513 and R186 243 respectively. There was no approval for this. Therefore, it was expected that action be taken to recoup the money. There were a number of employees suspended an average of ten months between 2006 and 2009. The salary cost to company totalled R8.3 million. The AG said this should be investigated. However, the status to date was that no further action was required. The Committee had to ensure that every instance of irregularity was investigated and that all the money was recouped. If one looked at the progress dashboard, there were still outstanding matters. Leadership was a problem and it seemed that there was no progress since the previous report. She asked if the procurement policy review had started and if there had been any improvements since its implementation. What measures were in place to ensure that employees were honestly declaring their interests? Had the prosecuting authority made any progress on investigations?

Ms Motsweni explained that at the time the security benefit was made available to the chairperson of the board and former Group CEO, there was no policy in place that guided whether security was a fringe benefit or a taxable benefit. The board at the time approved that the chairperson and CEO needed security at their houses. This was why the matter was considered a closed matter – at the time there was no policy that governed board benefits. The SABC’s tax office had contacted the former chairperson and CEO to recover the tax that was done at the time. The SABC would have to go the legal route to recover this tax.

Ms Motsweni stated that interviews had been held for the Chief Technical Officer.

Mr Lumko Mtimde, SABC board member, added that the SABC received 71 CVs for the position and interviews were held on 21 August 2012. a recommendation had already been made and the process would be finalised soon.
 
In terms of the procurement policy review, there had been significant progress in the procurement of goods and services. The policy was still under review, given the new regulations of the Preferential Procurement Policy Framework Act (PPPFA). The policy had not been finalised and presented to the board for approval yet as conflict of interest issues were still being resolved. The procurement division had also employed a contracts manager that would be able to engage with vendors and service providers. This was a challenging process as it had not had a permanent head in the last year and a half. The SABC had also had to strengthen its human capital procedures. This had been done and several Human Resources policies had been finalised.

Ms Motsweni addressed legal matters that were forwarded to the prosecuting authority. The AG was only given six weeks to conduct an investigation into the SABC. When they gave the report there were several matters, including the appointment of consultants that they did not investigate fully. Those matters were handed over to the SIU for further investigation. One of these was the investigation into the former head of legal services. She hoped the Committee was aware that this matter was currently before the courts. It was one of the success stories. The person was arrested and released on bail. However, he was now eluding authorities and had not shown up for two court appearances. From an organisational point of view, these matters were in the right hands.

Ms Muthambi worried about the SABC’s turnaround times. She thought that it was time to measure the performance of the board as the pace at which they were moving was concerning. She noted that the SABC’s task team had been meeting with the AG. It was worrying that the SABC said that the AG’s report over-stated the payment to consultants by R120 million. It felt like the SABC was questioning the credibility of the AG. The matter had to be discussed with the AG.

Ms Motsweni explained that the SABC was not questioning the AG's credibility. The SABC had had several discussions with the audit manager that was in charge of the investigation at the SABC in 2009. The SABC was also able to speak with the SIU about the amounts which the AG had indicated as monies having been paid over to consultants. The AG issued a disclaimer in its report that they did not do a proper investigation due to time constraints and they recommended that the SABC hand over the matter to the SIU. The SIU was then able to determine that the amount was not R249 million; it was in fact R119 million given the over-statement for about R129.8 million.

Ms Killian said she did not understand what the SABC was saying, because to her, it looked like the over-statement was approximately R10 million and not R129.8 million.

Ms Motsweni clarified that in 2009 in the AG's report, the total amount was R249 237 053. Through the SIU and the SABC's own internal system of verification, it was verified that the actual amount paid to consultants was R119 million. The difference between the two amounts was approximately R129 million.

Mr Mike Oberholzer, Auditor-General of South Africa (AGSA) project manager for the investigation conducted in 2009, added that the AGSA interviewed a few consultants, but due to the fact that there were so many allegations against the appointments of consultants, the AG decided that it would have an extension report from SAP, the system. The only thing the AGSA did was to withdraw that extension report. They identified 188 consultants with a total payment amount of R279 million. It was recommended to the SABC board to follow up on these consultants to identify further irregular appointments. He had a discussion earlier this year with officials of the SABC who said they did not agree with the amount. When the SIU did its investigation, they concluded that the AGSA overstated the amount by R129 million but he could not comment on this as no one had discussed this alleged overstatement.

Ms Newhoudt-Druchen asked how the skills audit fit in with the AG’s report in terms of staff that were suspended; staff that were not there and staff that had cases pending. Were they part of the audit? She asked why the AG did not audit the international programme content. In terms of deviations from the tender process, what steps did the board put in placer to ensure this did not happen again?

Ms Motsweni answered that a meeting was held with the audit manager at the time and he indicated that due to the extent of the allegations the SABC received around international content and the timeframe that the AG received, it was one of the key critical investigations that were forwarded to the SIU and the necessary charges were laid in the commercial crimes unit. It was still being decided whether they would charge the former general manager of international content as there was procurement of content to the value of R170 million which at the time was not approved by the board.

Mr Oberholzer added that the reason the AGSA did not investigate the international content was because it took the attorneys two years to investigate it and when the AGSA started, the attorneys initiated their final report. The AGSA only had six weeks to finalise their entire investigation, but what they realised was that the SABC did not act on the attorneys report. To make sure that the SABC would act on it, the AG included some of the findings of the attorneys report in its own report.

Ms Motsweni focused on the question concerning deviation from the tender process. She stated that this was done through the procurement policy and the inclusion of the PPPFA. There was an allowance for slight deviations but this had to be approved by the head of procurement, the CFO and the Group Executive Committee.

The Chairperson said that he hoped that the deviation came with conditions.

Ms Motsweni explained that there were stringent conditions in place. Deviations could only occur under extreme circumstances.

Mr Mtimde concluded that there was indeed movement forward. The Committee could see this by looking at the dashboard. He understood that there were areas that had to be elevated, but because of democratic processes in other areas, they moved a lot slower. There were a few success stories from the leadership point of view as the SABC was trying to stabilise its top level.

Dr Ngubane stated that in addressing the SABC's procurement issues, they recently suspended the head of procurement for irregular expenditure and processes.

Ms Muthambi asked if the board finally reviewed and came up with a proper delegation of authority. This was spoken about in the SABC's strategic plan. She thought that the Committee should get a copy of the security threat report. The Committee also had to have access to the new policy for board benefits.

Ms Killian said she would appreciate it if the Committee could get proper timelines for objectives and if the SABC could move a little faster to achieve what they needed to. According to SIU report, financial misconduct was identified for former members of the board – 32 individual members from three different boards. In addition to this, reference was also made to the former head of procurement. She needed clarity on whether there was a new head of procurement that had been suspended. Would there be a speedy disciplinary hearing for the head of procurement? She believed that if people saw that misconduct would not be tolerated, then they would change their ways. She asked if the SABC allowed its members who were in full permanent employ of the corporation to conduct any business. Or was this completely outlawed? The Committee needed to know what the current position of the board was, as it was stressful to read that 32 board members held interests in 177 companies and that 698 employees held interests in 1 105 companies. It was important to clean up the SABC and restore its credibility.

Ms van der Merwe wanted clarity on a report that a vote of no confidence was made on a board member, specifically because this board member tried to solicit specific business or contracts from the SABC. She reminded the Committee that they needed to answer the question regarding the R3 million sponsorship given to the ICT Indaba. Was this approved by the board?

Mr Thami Ka Plaatjie, SABC Deputy Chairperson, explained that it had come to the board's attention one day that the SABC had given away R1 million in cash and R2 million in the form of airtime to the ICT Indaba. When the board heard about it, the chairperson rightly requested an investigation into the matter. The modus operandi was to talk to certain key persons in the organisation to get information in respect of matter at hand. The board requested the group CEO to submit a report on the process followed within the SABC to approve this amount of money. A very detailed report was given to the board. A report was also requested from the CFO. The report was received by the board. Another report from a consultant about the processes that were followed was requested. These reports would be discussed at the next board meeting. The matter was still a work in process as some of the reports were only received last Friday. They still had to be consolidated. The board also received a report from the Acting COO, Mr Hlaudi Motsoeneng, about his department's role or lack thereof in the ICT matter. The matter was receiving the board's urgent attention.

On this vein, he wanted to report on the processes that led to the suspension of the acting head of procurement. When the acting CFO at the time, Mr Lerato Nage, resigned unceremoniously within 24 hours, it became a cause for concern, especially as the board had to read about the resignation in the press. Accordingly, the chairperson requested that two board members talk to Mr Nage in relation to what was supposed to be his exit interview. Mr Nage exited suddenly and the board agreed that the proper channels to retain him had not been explored, not the channels to conduct an exit interview. When Mr Nage gave the interview, he listed a number of incriminating allegations which pertained to the CFO, Ms Duda. The CFO subsequently responded to the allegations and these were taken to the sub-committee on governance. Two external persons were appointed to analyse the report and a final report was then tabled to the governance committee. The report exposed the rot that was present in the procurement environment, implicating the acting head of procurement as well, Ms Nompilo Dlamini. The recommendation was that she be suspended. The board met yesterday and it was decided that certain questions would be posed to Ms Duda, after which she would be given 24 hours to respond to. Depending on the nature of the response, the board and Group CEO would have to take appropriate action. This was where the matter stood at this moment.

The Chairperson noted that there was not enough time to have the presentation on the SIU report. This would have to be done another time.

SABC Board Governance matter
Dr Ngubane stated that this was a sad matter. The board had thought that it was turning a corner, but now it was degenerating into serious dysfunctionality because one member of the board continually attacked the company secretary and other board members, saying that Mr Hlaudi Motsoeneng should be removed because he “frustrated the Atos tender”. The board meeting minutes, which he hoped they had sent to the Committee, showed that the board member was punting Atos as a supplier which would have cost them R500 million outside of proper tender procedures. The vote of no confidence was not necessarily to do with this issue, but the board took a decision to ask for a forensic audit of governance around the issue of the Atos tender. Clearly, governance rules and fiduciary responsibilities were totally abrogated by the member. On top of this, a preliminary inquiry was made by the board where members voted that he, the chairperson, approach a legal firm to look at two letters of grievance from Mr Phil Molefe and Mr Lerato Nage regarding this member. A report was written and given to the Department of Communication (DoC) who sent it to the Committee to make the final recommendation. Subsequent to this there had been serious breaches of order during board meetings so two sets of votes of no confidence were taken. He took it that the Committee had those letters.

He warned that the board was going to become highly dysfunctional as long as this member was given the freedom to do as she wished. Therefore, he recommended that the Committee look at the matter and the document that were submitted. He appealed that they suspend the member while the matter was being investigated.

Ms Killian stated that it seemed that certain documents were sent to the Committee. She asked if these would be made available to the Members so they could attend to the matter.

Mr Ka Plaatjie clarified that the rest of the board agreed with the sentiments expressed by the chairperson of the board. It was a regrettable move to support as ordinarily, board members had to work together to achieve the SABC's objectives. However; this board member’s behaviour had been very disruptive to say the least. She had undermined the chairperson and had brought the good name of the board into disrepute.

Conclusion
The Chairperson thanked the SABC for its report back to the Committee. He was aware that the Committee had not dealt with the presentation on the SIU report. The Committee did not want to rush such an important matter. He noted the concerns raised by the chairperson and the deputy chairperson of the SABC board. He also noted the concerns raised about the sponsorship given to the ICT Indaba. Members noted that the money was never processed through the board. The Committee also noted that the SABC board had suspended the acting head of procurement. It was further noted that the CFO had to respond to certain issues raised by the board. Members said that if the acting head of procurement was to be prosecuted, then the board had to move with speed. None of the Members wanted to see the SABC board regress as they seemed to be moving forward well. Issues had to be dealt with decisively as a board otherwise they would be removed as most of the time boards failed to act on their fiduciary duties. Just like the Committee could make recommendations for board members' appointment, they would also make recommendations for their removal. All the Committee wanted was clean governance within the SABC. On the vote of no confidence, it was a pity that this had happened, but all that could be done now was follow due process. There were a number of issues – an inquiry was being made regarding a board member while a vote of no confidence was given on the same member. This matter would be dealt with by the Committee. He hoped the shareholder was going to make itself available as Members would have to ask them how they processed the matter. Then a decision would be made regarding the inquiry. The proper processes had to be clarified and a report had to be given to the President, who was the appointing authority. Or an inquiry could be conducted by the Committee and a recommendation could be taken to the National Assembly. If the board made an inquiry, the report did not have to go the Committee, it had to go straight to the President. But, since the board had come to the Committee – it might have to have its own inquiry. This was a matter that had to be processed. The reason he did not give the documents given to him by the board regarding the inquiry to Members straight away was because it had to go the President. He asked for Members guidance on the matter.

Ms Killian wondered if Members should just get the information from the board so they could consider it, because it was quite a full inquiry that the Committee might have to do. This also depended on the outcome of the board's inquiry. It was something that the Committee had to apply its mind to. She also suggested that the President be informed of the matter through the Minister.

Ms Morutoa agreed with Ms Killian, saying the SABC had to record their grievances in a report that had to be submitted to the Committee. Then the Committee could proceed by referring the matter to the Presidency.

The Chairperson added that the problem was that the Committee did not know what the President’s response was to the matter. The Committee had to follow due process if the President referred the matter back to the Committee. Then Members may move forward. He noted that the issue of the enquiry was referred to the President but the matter of the two votes of no confidence had not been. Members needed to get the information on the two votes of no confidence as well so they could apply their minds to it. He asked Dr Ngubane to send this information to the Committee.

The meeting was adjourned.