Film and Publication Board; Government Printing Works on their 2011/12 Annual Reports

Home Affairs

10 October 2012
Chairperson: Ms M Maunye (ANC)
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Meeting Summary

The Film and Publication Board achievements included an unqualified audit opinion, achieving 90% of Annual Plan targets; outreach and awareness – 200 000 directly reached; a classification guidelines review – qualitative and quantitative research; relocation of FPB head office from Houghton to Centurion; recruitment, appointment, and training of a new pool of classifiers and prudent financial management.

Challenges included limited IT capacity and ageing IT infrastructure; pending outcome of the media court challenge to FPB legislation; legislative limitations – such as penalties; high vacancy rate due to migration of FPB structure to new turnaround structure; ensure effective operations during the relocation process – limited disturbance to FPB activity and limited capacity to regulate new media platforms such as Video-on-Demand and game applications.

The presentation also outlined the key programmes of each of its strategic objectives, their targets, and performance results. It also spoke about the annual financial statements in terms of revenue, expenditure, and financial and audit performance.

Members raised concerns about the withholding of Apple Apps within South Africa; the regulation of pornography; the role of the Film and Publication Board in the Spear controversy - had they been pressured or overstepped their boundaries? Questions were asked about the FPB Council and if all its positions had been filled; the skills within the Board; clarification on the term ‘office rental penalty’; the way in which films were classified; the vacancy rate; findings by the Auditor General; possible partnerships with similar boards in other countries; the decrease in fee generation; travel expenses; the rent hike; and outreach. Members praised FPB’s unqualified audit report and asked for a more comprehensive report.

The Government Printing Works presentation covered its strategic objectives; transformation; corporate governance; business units, production statistics, progress with key projects, the ID smart card project plan and budget. The first roll out of ID cards to 16 year olds would take place free of charge and thereafter the replacement cost to citizens would be no more than the price of the current ID document. The presentation reported on its key performance indicators, the financial statements and unqualified audit report, human resources expenditure and current vacancies.

Members asked questions about the task team established with the Department of Public Services and Administration; the number of women within the management levels; misconduct; the digital gazette; smart cards; underperformance in terms of assets; turnover; vacancies; vetting; duplicate identification documents and risk management.

Meeting report

Film and Publication Board (FPB) briefing
Ms Yoliswa Makhasi, Chief Executive Officer of the Film and Publication Board, begun by requesting that the Committee did not ask about the findings of the Spear issue as the matter was still being discussed within the Board.

Ms Makhasi presented on the Board’s mandate, principles central to FPB regulation and the media distribution channels regulated by the FPB (which included internet service providers, certain publications, cinema and DVDs and mobile content).

The Film and Publication Board achievements included an unqualified audit opinion, achieving 90% of Annual Plan targets; outreach and awareness – 200 000 directly reached; a classification guidelines review – qualitative and quantitative research; relocation of FPB head office from Houghton to Centurion; recruitment, appointment, and training of a new pool of classifiers and prudent financial management.

Challenges included limited IT capacity and ageing IT infrastructure; pending outcome of the media court challenge to FPB legislation; legislative limitations – such as penalties; high vacancy rate due to migration of FPB structure to new turnaround structure; ensure effective operations during the relocation process – limited disturbance to FPB activity and limited capacity to regulate new media platforms such as Video-on-Demand and game applications.

Strategic objectives covered a constitutionally sound regulatory framework, organisational capacity and capability, national and international partnerships, initiatives to support FPB business and positioning. The presentation commented on targets and performance results.

The financial section outlined revenue, expenditure, statement of financial performance and the audit report.

Discussion
Apple Apps
Mr A Guam (ANC) asked what is the reason that some apps were not available within the country? Who was to blame? He asked if it was because the apps needed to be checked before they were made available? The FPB cannot say that they do not have the capacity and that is why they are not available.

Ms Yoliswa Makhasi replied that there was no ‘guilty party’ in the case of the apps as the FPB was following the legislation given by Parliament which required certain things to be done in a certain manner. The FPB had been working with industry to see how the issue could be tackled. Legislation needed to be implemented without frustrating them and without compromising on key principles and beliefs.

Ms Mmapula Fisha, Chief Operation Officer of the Film and Publication Board, replied that Apple had stated that they were not going to submit their 101 000 games as they had a system that classified their own games in terms of age ratings whilst South Africa called for their own classification measures. South Africa was only one of two countries in the world for whom this was the case. Apple had said that because the South African laws had required them to submit before they distributed the content, the process would be too much for it and it would be unable to do it. They would rather not bring the apps to South Africa. Thus there was a need to look at core regulations with the industry to see if there was a way to allow for the manufacturers to use their own system for South African audiences. Soon a system would be presented as there was a to be a meeting this month with even other players within the industry such a Multi Choice. The manufacturers had asked how they could comply with laws without the extra work. Other boards in other countries had merely allowed the distributors to keep distributing whilst they found way to regulate it. This had also been allowed in South Africa as well in terms of Blackberry and HTC for instance but Apple had decided that they did not want to go against the law so they would rather not distribute. There was a global team that consisted of other countries that was working on a system to classify apps. South Africa was part of that international team but was also working locally to deal with these issues. The FPB had enhanced their research capacity to be able to do this.

The Chairperson said there was a need to be pro-active in such instances.

Pornography
Mr Guam asked if pornography was available at all times then who was to govern this, was it parents, teachers, the government or even the FPB? It was important that the FPB was careful in saying who regulated this.

Ms Yoliswa Makhasi replied that the big issue for the FPB was the protection of children against exposure to pornography and how this was to be done. The question was how to use the strength of legislation and the strength of partnerships to ensure that there was a level of protection for children. This included education and outreach.

Mr G Macintosh (COPE) said that the public did care about morals but the difficulty with pornography was it was difficult to define. It was a difficult area and the FPB had his sympathies. The internet posed a great number of problems and was very hard to control. It was a much bigger problem than the FPB – it was an IT issue in general. Other countries with more capacity also struggled.

Ms Yoliswa Makhasi replied the issue surrounding defining pornography was linked to the Constitutional Court judgement regarding print media, namely, what is sexual conduct and how did one decide something was sexual conduct. If this was established how did one go about addressing the issue. The FPB’s role was to protect children. Adults could do what they wanted as this was a constitutional democracy. She agreed the issue was bigger than the FPB and they had done a comprehensive submission to the Portfolio Committee on Communications regarding the country’s approach to digitisation. It would be useful if the Committee met with the Portfolio Committee on Communications. Most of the issues the FPB was dealing with at a policy level, were issues for the Department of Communications.

Mr M De Frietas (DA) asked if the FPB had sought to look at education especially for children and pornography as this would be protection in its own right. He wanted to see more on that.

Ms Makhasi replied that the FPB did focus on enforcement and education. When one looked at their budget spending the FPB was quite big on outreach and consumer education. Although there was work that had been done, there was a need to find cheaper ways of conducting consumer outreach such as using the online space.

Ms Fisha replied that at the moment the law stated that pornography from any other platform other than a physical store was illegally distributed. The reality was that pornography was everywhere. In the extensive review of the law, the question was should one regulate it on other platforms or keep it as ‘it can only be distributed from a building’. There was a need to look into perhaps regulating it on other platforms as they are present there.

Ms Natalie Skeepers, FPB Deputy Chairperson, replied that research done showed that society was still conservative. The FPB wanted to gauge the fibre of society through the research done.

The Spear
Mr Guam argued that Parliament was the highest elected body in the country and thus the FPB could not say that the Committee cannot ask about the findings related to The Spear painting. The findings of the FPB Appeals Tribunal had said that the FPB had been a little over enthusiastic in terms of how the issue had been handled and had over stepped the law. He understood that the appeals tribunal was the higher authority and if they had made a finding, the Board could discuss it but the finding stood. He felt that the FPB should take the Committee into their confidence. One would not want to see a situation in which, due to political drama, that a Board such as the FPB would find an ‘angle to work’. The FPB needed to just do their work in terms of legislation and stick to that no matter the pressures.

Mr Macintosh said when he had seen the painting it had been an unacceptable thing. However when he had seen that the FPB had gotten involved, his response had been, why? As a civil servant, one could not do anything except in terms of an Act of Parliament or regulations passed in terms of an Act. He asked if the CEO could say what led to this. It had been a mistake to take this matter further.

Mr De Frietas said that when he had seen the actions of the FPB in reference to the painting it reminded him of the ‘bad old days of apartheid’. The actions looked exactly the same in terms of censorship. It had tarnished the FPB’s image immeasurably. It had shown people that the FPB existed but in the wrong way. A great deal of fixing had to be done to fix the harm that had been caused. The FPB had gotten themselves into a ‘political muddle’.

Mr M Mnqasela (DA) asked if it had been a voluntary exercise on the part of the FPB to pursue the gallery. If this was not the case, who had exerted undue pressure and what had been the reasons? How had the FPB felt about that and did they want the Committee to intervene? If undue pressure had happened, what was to prevent another party going to the FPB and doing the same thing?

Ms Makhasi replied that the FPB had been not pressurised by anyone and had been implementing a law that FPB had been entrusted to implement. Paintings were defined as publications and were not part of the exclusions of the regulations. Section 16 of the Film and Publications Act outlined the process that was followed. There had been an issue of confusion around City Press. When the FPB had sent classifiers to the gallery, what City Press had done was to write to the FPB, through their lawyers, requesting that City Press come and present to FPB. City Press had not been approached and told they were wrong as they were part of the Press Council. City Press had requested to present before the classification was to be given. City Press had been allowed to do so as this was a democratic country. They had never been forced but there had been some confusion in terms of how the process had been reported. The painting had been given a classification of 16N (N for nudity). The gallery had been unhappy with this classification and had taken the matter for review. The FPB had made their own presentations and had requested to bring in experts to lead on particular issues that came up, in particular, that of exposure of children. The Tribunal refused to allow the FPB to bring in experts. Within the report, it had been stated that this was because the matter was no longer in circulation. There was thus no need for experts. The Tribunal had taken the decision to set aside the classification of 16N as it could not establish the link between the harm to children, the issues of culture raised in the report and the painting. In order to establish this, one would have had to reclassify the painting but because it was no longer in circulation, there was no need to reclassify it. If the painting was to come back into circulation and there was a complaint, then the matter could be handled. The Tribunal, however, did not find that the FPB did not have jurisdiction on the matter. There had been a great deal of speculation around the lack of jurisdiction and if the FPB had jurisdiction in terms of an Act of Parliament. According to the award given, there had been no finding that the FPB had overstepped any law. They had worked within the Film and Publication Act. The FPB had even shared the identity of the complainants with the lawyers but had indicated that the complainants had requested to remain anonymous which was within their right to according to the law.

Mr Rowan Nicholls, FPB Board Member, said that every step of the way the Board took legal counsel and acted in accordance with this advice.

Mr De Frietas said he felt the response interesting. It was interesting that the law was applied to that painting but not others. There had been another painting in which the President had looked much worse. He thus did not buy the argument as one could go to any gallery and see paintings of a similar nature. Even the Vatican had art with vast amounts of nudity. He maintained that the FPB had gotten itself into a ‘political stick’ and they needed to remember they were not a censorship board but a classification board.

Mr Guam said that the FPB just needed to apply the law. The Tribunal had said that the FPB had not applied the law, this is what he had read. When it came to a painting, it became an issue as he had never seen a painting that had a N16 classification. This was something the FPB needed to look at as there was no place for this in a modern democracy.

Ms Makhasi replied in terms of the gallery issue, there would be different interpretations as well as the awards themselves. The reason other paintings of a similar nature were not classified was because there had been no complaint received from members of the public. The FPB could not merely go to galleries and bookshops and merely give classifications without a complaint. The FPB only responded to complaints. The FPB had learned a great deal form the reports that had come out. On this particular issue legal advice had been taken and the FPB was sure they were implementing its legislative mandate. They understood that there would be different interpretations to the legislation. There were various issues such as freedom of expression, artistic expression and individual rights that were bigger than FPB.

The Film and Publication Board
Mr Mnqasela asked if all the members were still a part of the Board and how often did the Board meet? What were the challenges within the space?

Ms Natalie Skeepers, FPB Deputy Chairperson, replied that the FPB Council met on a regular basis. There were a great number of skills on the Council including an attorney, two advocates, a psychologist, an IT specialist, a risk and compliance specialist and a financial expert. There had been some challenges being a small board and operating on a small budget but they had been on track. There were no vacancies on the current board. Challenges faced were mainly within the research and legislation areas and these were being focused on.

Mr Rowan Nicholls replied that the Board had formed committees in finance, operations, human resources and human capital as well as other areas. There was also a committee of all chairpersons of committees. The reason for this initiative was to allow for the strategic issues of the Board to be looked at in more detail and dealt with thus making the Board more efficient. From a governance point of view, the Board had been strengthened tremendously.

The Chairperson said that this was good move for the Board to do that. She did not know how the internal controls worked but she was sure this strengthened them.

Human Resources
Mr Macintosh referred to Human Resources and said he thought after nearly 20 years of democracy there were more females than 20% within university. He thus wanted to know the numbers in terms of qualifications such as degrees or various skills. This information was important as the FPB was quite a small entity and needed skilled people.

Ms Makhasi replied that the kind of reporting on Human Resources was done according to the framework given by the Department of Labour. It was more of a compliance issue but if members wanted a profiling of the type of skills within the organization, this could be done as that information was there.

Office Rental Penalty
Mr De Frietas asked for clarification on the term ‘office rental penalty’.

Mr Jonas Phoshoko, FPB Chief Financial Officer, replied that this was as a result of the previous lease that had been entered into. It had been a condition that the FPB sign for a further five years. If the FPB had occupied the building they would get a discount of a further R100 000 per year. As the lease had ended and the FPB had moved, they had had to pay this to the previous landlord.

Classification on Films
Mr De Frietas asked why some films (within the annexure) had been listed more than once with the exact same information. In some cases there was the same film with a different description in terms of genre.

Ms Mmapula Fisha replied that the reason the movies appeared more than once was because the movie was in different formats i.e. one cinema and the other DVD. The difference in genres could be explained by the example of if the movie was in the form of a trailer it would only show certain clips of the movie and thus did not give the whole context.

Vacancy Rate
Mr De Frietas said that there was a high vacancy rate but 90% of posts were filled. Were the 10% that were not filled, critical positions?

Ms Makhasi replied that for vacancies she had just been reflecting on the financial year. The issue had been migrating from the old structure to the new structure. The 10% was in the process of being filled. It was not necessarily about posts having an absence of people. , the people were in the old structure and had not yet migrated into the new structure.

Mr Mnqasela asked about the staff shortages that had been linked to the capacity problem. This was something that needed to be addressed with speed. It had been said that some of the targets had been partially achieved and all the targets needed to be achieved so that at the next audit there was a clean audit. Despite the good work that had been done there was a lot more that needed to be done in spaces such as Khayelitsha and Alexandra. He had seen DVDs and music being sold for as little as R5 and artists felt that the government was not doing anything about piracy.

Ms Makhasi replied that it was difficult to control this as it was the police who were meant to stop the selling of illegal products on the street. The FPB worked with the police but the problem was bigger. It was a bigger crime issue. Where the FPB could, they worked with the police and cleared the streets but this did not last long as, within a short period of time, the material was back on the streets.

Findings of Auditor General
Mr M Mnqasela (DA) asked for clarification on the AG findings. Why did such occurrences of non compliance with the Public Finances Management Act happen? What was being done to mitigate against the reoccurrence of such.

The Chairperson said that the Auditor General had said management did not communicate policies and procedures to enable and support understanding by staff. The subsistence policy and procurement policies had not been adhered to. She wanted to hear more on this and the other findings. How was the Committee to do their work if the FPB did not adhere to policies and procedures?

Ms Makhasi replied that out of more than 2000 transactions it was only the VAT issue that had been of concern and this related to human error internally. The issue had passed through the various stages until payment of VAT was done. Luckily there were still funds due to that company which had done the work and these funds had been withheld. The FPB had thus not lost money as they had withheld money which would be paid once the VAT was cleared. There had been an active internal audit function within the FPB but the issue of the VAT had not been picked up by the internal audit as it happened towards the end of the financial year.

Partnerships
Mr De Frietas asked if the FPB had considered building relationships which similar organisations in other countries to help with the work they did.

Ms Makhasi replied that there was an extensive relationship with similar boards within Africa as well as other parts of the world. There was a great deal of ‘best practice’ and learning that took place. The precarious part was different countries were sensitive to different things. For example Germany was focused on violence but not sex within classification. When material was imported to South Africa one had to be cognisant of what the country was sensitive to and the classification guidelines helped in this respect. South Africa was sensitive on most things which meant that there was a need for balance as there were various issues that needed to be looked at when importing films.

Fees
Mr De Frietas asked why fees generated had come down due to a decrease in number of material submitted for classification.

Ms Fisha replied that this could only be attributed to the fact that distribution had moved online and people no longer distributed media in the normal way. This meant that there was a decline as there had only been focus on the physical platform. The FPB had now moved online as well.

Unqualified Audit Report
Members praised the FPB on their unqualified audit.

The Chairperson said that it was good that there was an unqualified report but the future needed to hold unqualified clean reports with no findings.

Comprehensive report
Ms Bothman (ANC) said that there had been a request for a simplified report as it was a public report. She had struggled to understand the report.

Ms Makhasi replied that how the report was done was highly regulated. The format of the annual report was checked by the Auditor General. A user friendly version of the report was being constructed to allow for use in communities and placed on the website. This was the manner approved by the Auditor General.

Mr Phoshoko replied that the format of the financial statement was extremely regulated.

Travel expenses
Ms Bothman stated there was a great deal of money being used on travel as it amounted to almost R8 million which was far more than the road show for the education of the consumers. One would expect the reverse to be the case.

Ms Makhasi replied that there was the need to engage in international benchmarking. There were various organisations that the FPB was affiliated with based in Europe and elsewhere. There were thus certain commitments to fulfil which involved flying. The road shows was but one aspect of the outreach for consumers, it was not the total sum. There were also communications and advertising which fulfilled the mandate of outreach and compliance. There were vehicles and mechanisms used to reach the mandate and these had not been counted as part of the travel in outreach.

Rent
Ms Bothman asked why the rent was currently at R2.6 million having risen from R120 000 in 2011? The information on Public Works was also causing confusion as it seemed that they were paying for things but FPB was also incurring a cost.

Mr Phoshoko replied Public Works had been footing the bill for the lease. However from the 2010/11 financial year, the FPB had started footing the bill.

Clarification
Ms Bothman asked what were the workshops for, the ones that had cost R7 million? Also what assets had been sold as it said that there had been assets sold? She asked what was meant by employee related costs.

Mr Phoshoko repliedthat the sold assets pertained to furniture which had been sold to staff. It also included some old equipment and electronics.

Outreach
Ms Gasbonwe (ANC) asked what outreach had been done in rural areas. Did the 200 000 reached include people in rural areas?

Ms Makhasi replied that it did include people in rural areas. The FPB had been asked in future to categorise those reached in terms of categories such as rural areas, women and persons with disabilities. In future reports this information would be provided. Most of the work was based in the rural areas despite the fact that people would presume that FPB concentrated on the urban areas. She told Members that the offer to come to Members’ communities and do outreach still stood.

Compliers
Ms T Gasebonwe (ANC) asked how many of the compliers had been converted and how many had not.

Financial report
Mr Mnqasela asked why the FPB had only presented on 2011/12 when the normal convention was three years. This might help explain the jump in rent.

Mr Phoshoko replied he acknowledged that current standards stated that there was a need to compare with previous years. The three year reporting did not say one had to give all those previous years. However for the sake of clarification, the FPB could provide that information.

Ms Bothman said there was a need for the FPB to give a more detailed report in order to aid their understanding of what was being done. It would be better to have all the information together which would help to make recommendations, especially in terms of accounting. The report needed to give and indication of what was happening on the ground. She could not see the impact of FPB on the ground and that was the problem.

The Chairperson said there was a need for the information to be given in simple terms so that the impact was understood.

Government Printing Works briefing
The Government Printing Works presentation covered its legislative mandate and strategic objectives. It spoke about the transformation of the GPW: The new staff establishment would be rolled-out by the end of 2014 and its new facilities in Centurion completed by the end 2015. An asset recapitalisation process (R388 million over the MTEF period) would replace outdated technology and machinery. The electronic gazette and website www.gpwonline.co.za went live in August 2012.

GPW provided its production statistics and its progress with key projects. The ID Smartcard Project Plan which showed that the cost to citizen will be no more than the price of the current ID document of R 140. The first issue for people turning 16 would receive the ID card free of charge. GPW presentative the tentative budget for the ID Smartcard Project Plan. The presentation also reported on its key performance indicators, the financial statements and unqualified audit report, human resources expenditure and current vacancies.
It put the Senior Management level vacancy rate at 80%, the vacancy rate for middle management and specialist positions was 40% and the vacancy rate of critical artisan positions was between 20 and 30%. The remuneration structure was lagging on average by between 20% to 70% (especially for specialist positions) compared with the local printing industry. This mainly applied to the technical grades, where significant shortage of skills existed.

Prof Anthony Mbewu, Chief Executive Officer of the Government Printing Works, said that conclusion that could be received from the report was that the GPW had made considerable progress. The GPW was well on the path to becoming the state’s mandated security printer. Progress had been made in becoming a modern printing media company through revamping internal business process and the establishment of an enterprise resources planning system to integrate financial and production information systems. A public website had been launched including an electronic government gazette. Migration to a new GPW establishment in human resources had however been held up by delays in renovations of its premises.

Discussion
The Chairperson said that the entity had moved at a great speed from where it used to be to where it was today.

Task Team
Mr Mnqasela asked about the task team between the GPW and the Director of Department of Public Services and Administration. Had this been a long time running project?

Prof Mbewu replied that the task team had only recently begun to be constructed. The first meeting between the Director General of Public Service and Administration, the Chief Executive Officer and their respective teams took place two weeks ago. Terms of reference and task team membership had been produced with the instruction that the task team begun its work as quickly as possible. This matter had been seen as one of the greatest risks to the business operations of GPW because the principle reason why skilled staff from GPW were being poached (by Unisa Press and the South African Bank Note Company in particular) was due to the better remuneration received from those institutions. This was a concern especially in terms of Unisa Press which was opening a new press in Centurion. The task team had been instructed to work as quickly as possible in order to produce a report that would allow for the decision to be made as to whether GPW should receive a special salary dispensation.

Women in Management
Mr Mnqasela said it was worrying that amongst senior management there were no women and there was no indication that women were being recruited. Quotas in terms of women were not even being discussed.

Prof Mbewu replied that GPW was firmly committed to having the personnel at every level reflect the ‘face of South Africa’. For the two general manager positions that were vacant, GPW was going to make every effort to ensure the posts were filled by female black South Africans.

Misconduct
Mr Mnqasela asked about the unauthorised absenteeism. He wanted to know what measures there were for deterrence. What was the rate of misconduct in terms of instances in which people stole from the GPW?

Mr Jan Roussow, GPW Acting General Manager of Human resources, replied that action had been taken in two cases where there had been abnormally high levels of absenteeism. They had been found guilty and suspended with unpaid leave for a certain period. It had been a problem but had declined. At the moment it was not a real concern. The GPW had also worked with the Labour Unit in terms of dealing with these cases and also trained managers to deal with cases in a timely manner.

Mr Joe Englebrecht, GPW General Manager Operations and Productions, replied that there were means of allocating material in order to see whether things went missing. This applied to the production of Identification Cards and Passports. In terms of these two documents, not a single one was lost by the GPW.

Digital Gazette
Mr de Frietas asked if the Gazette was to be electronic and if so would the cost of printing be reduced? Was the GPW able to move in that direction and did legislation allow for it?

Mr Rassie Barnard, GPW General Manager of Financial Services, replied that the eGazette had been broken up into the ‘input phase’ and the ‘output phase’. There had been a decision that there would be quick wins on the output side and that was why there was the electronic gazette. There had not been widespread publicising of the gazette going electronic as there had been negotiations with National Treasury to move to a situation where people no longer subscribed to the gazette but went online and printed the pages they required. Market analysis showed that people bought the gazette took out the small amount of information they needed and threw the rest away. There was a great amount of waste that went into that process. One did need to keep in mind that there were lots of people in South Africa who did not have internet access. The focus was to get the whole process to be electronic with the option of printing at GPW.

Smartcards
Mr De Frietas asked if the cost of smart cards would in ‘real terms’ cost the same as the current ID documents or was this in terms of printing only? Did this take into account the overall production such as putting data on the cards?

Mr Englebrecht replied that the cost cited for the ID Smartcard was calculated to include all the role players in the value chain. There were a great number of labour intensive actions involved in the production of the ID book. The idea of the Smartcard was that many of the contributors in that value chain would fall away. The booklet in comparison with the actual physical card was far cheaper. What made up for the increased cost was the fact that various contributors (who came into play when making the booklets) fell away when making the smartcards. The decreased cost in that respect made up for the increased costs that could be incurred in some aspects of making the smart cards.

Investment and additional production assets
Mr De Frietas asked if the under performance noted on page 17 was not anticipated? Had there been confusion in the calculations?

Mr Barnard replied that the recapitalisation programme was adjusted every year and there was a specific plan for 2011/12 for what was to be bought. The kind of equipment bought was expensive and added up to great sums. This meant that, faced with situations such as the delay due to renovations, GPW could not take the risk of buying the equipment. The risk was that – to lift up the equipment in a year or two’s time – there was the possibility that it might not work. The GPW was getting clean audits as they were doing financial administration well. The limitations in the old system showed what they could do and could not do. Hopefully with the new system the GPW could move forward and implement proper financial management.

Turnover
Ms N Mnisi (ANC) what had been the cause of the drop in turnover?

Mr Barnard replied that the drop was due to fewer passports being produced.

Vacancies
Ms Mnisi asked what were the obstacles to filling all the vacancies? How much leadership training had been undertaken to address the continued high-level management vacancies

Vetting
The Chairperson asked if, due to the nature of the material being handled, employees had been vetted to make sure that no malpractice occurred Had there been instances of fraud?

Mr Roussow replied that process followed was that before appointment, the GPW approached the South African Police Service to see what they had on their record. Vetting forms were also sent to the South African Security Agency. GPW was working to expedite the vetting process of newly appointed staff. There had been no fraud cases reported with staff stealing anything within GPW.

Internal audit staffing
Mr Roussow said that the internal audit was fully staffed and a number of interns had been appointed to assist with day to day working.

Duplicate IDs
Ms Bothman said there was an issue with ID duplicates and sharing of ID numbers. How was the GPW working with Home Affairs to ensure this did not happen? There was a need for the two to talk to each other.

Mr Englebrecht replied that the GPW did not have access to the electronic information as they did with the new passports. A citizen applied to the Department of Home Affairs and in that process would be allocated an identification number which was then downloaded to the South African State Information Technology Agency (SITA). At SITA a carrier sheet with the person’s data was printed. These were then delivered to the GPW where they built the booklet around it. With the ID Smartcard this process would fall away and allow for the GPW to do two checks on the data.

Risk Management
Ms Bothman asked how risk management was being dealt with.

Professor Anthony Mbewu replied that an advert had been issued to find a supplier to undertake a risk management exercise within GPW. This was to be done in terms of developing a risk management plan and a risk register. The GPW was waiting for various quotes in order to choose a supplier and make sure the process was underway within the next month of so.

The Chairperson thanked the GPW for their unqualified report but said that there was a need to fill vacancies especially at senior management level. These issues needed to be tackled to have stability within the workplace.

The meeting was adjourned.

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