Department of Communications & GCIS on Quarter 1 performance & filling of critical vacant positions

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Communications and Digital Technologies

06 September 2017
Chairperson: Mr H Maxegwana (ANC)
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Meeting Summary

The Committee received a briefing by the Government Communications and Information System (GCIS) and Department of Communications (DOC) on their respective 2017/18 first quarter expenditure and performance reports, including updates on the filling of critical vacant positions.

The GCIS had requested additional funding from National Treasury (NT) for the sharing of office space with the DOC. While the GCIS did not have the budget, they were engaged in dialogues and engagement with communities through the radio platform. More needed to be done, however, and NT had seen the need to have the funding approved.

The DOC had achieved only 18 of their 21 targets. Partnerships had been established with the Department of Public Works (DPW) to train 2 700 installers comprised of young people and women. The DPW was in the process of finalising the procurement services of an accredited service provider for training. Committee Members complained that they had received briefings in the past about the training of young people and women, but nothing had been done about it.

The Auditor-General of South Africa (AGSA) had made several recommendations on entities under the Communications portfolio, to strengthen their controls on accruals and commitments; inconsistencies in annual performance reports and contingent liability confirmations; misstatements on audit findings; the performance of the audit committees; management of irregular expenditure, which was still recurring; and management of fruitless and wasteful expenditure.

Meeting report

Government Communications and Information System (GCIS): Q1 Report

Ms Phumla Williams, Acting Director-General (Acting DG), Government Communications and Information System (GCIS), said that in the first quarter of 2017/18 financial year the GCIS had been faced with challenging environmental issues while seeking to implement its own objectives. It had achieved 37 of its 41 targets,

Ms Zukiswa Potye, Chief Director: Planning, GCIS, said that one edition of Vuk’uzenzele was produced once a month and distributed twice monthly. All the official languages of South Africa were represented in Vuk’uzenzele.

The GCIS had requested additional funding from National Treasury (NT) for the sharing of office space with the Department of Communications (DOC). Current government statements were freely accessible on the GCIS website for everyone.

Ms Williams said that while the GCIS did not have the budget, they were engaged in dialogues and community engagement with communities through the radio platform. More needed to be done, however, and NT had seen the need to have the funding approved.

Mr Michael Currin, Acting Deputy DG (ADDG): Intergovernmental Coordination and Stakeholder Management (ICSM), GCIS said that the Thusong Service Centre was actively running, but they did not meet their targets due to budget restrictions, and therefore had to reduce their community and stakeholder liaison visits.

Ms Tasneem Carrim, ADDG: Content Processing and Dissemination (CP&D), said that GCIS had not achieved the targets on their video campaigns mailing due to budget cuts.

Mr Hennie Bekker, Chief Financial Officer (CFO), GCIS said that the Department had a total budget of R404.75 million and had spent 21%, or R86.61 million.

Programme one - Administration

The Department had spent 23% of its budget due to vacancies, invoices from service providers not being received, and also projects not yet funded.

Programme two -- Content Processing and Dissemination

This programme had spent 19% of its budget, also due to outstanding invoices.

Programme three -- Intergovernmental Coordination and Stakeholder Management

 22% of the budget had been spent, also due to outstanding invoices.

The GCIS was facing funding pressure on communication projects, and they had requested additional funds for the 2017/18 financial year. Office accommodation and municipal services were estimated to cost R4.2 million, with annual appropriation increases with inflation adjustments averaging 5.3% per annum. Facilities management and maintenance were estimated to cost R1 million and external audit fees would cost R1 million. A once-off payment of R2 million would be spent on web servers for information technology (IT) infrastructure.

Discussion

Mr M Kalako (ANC) asked if the Department of Communications (DOC) was paying GCIS for the use of their premises for accommodation. He asked for clarity on the transfer of payments and subsidies, and wanted to know how monies would be recovered. What were the staff complements provincially, and what were the costs for rental services in each province?

Ms N Tolashe (ANC) said that she was impressed with the activism in the GCIS, and congratulated them on the profile of OR Tambo. She was excited with the communication policy, because it was the beginning of real things starting to happen. The policy should be the anchor of the entire communications governance across the three spheres of government. She congratulated the GCIS for their engagement with the Department of Justice (DOJ) in their discussions over gender-based violence, because the government needed to articulate and speak about societal issues. With the upcoming 2019 national elections, it was important for government departments to accurately cover the process and keep the public informed on issues of relevance.

GCIS Response

Ms Williams said that community radio had been kept sustainable and had gained huge listenership through collaboration with the GCIS. During the budget constraints, community radio had emerged as an option to still reach the people. The GCIS also wanted to give credit to the SABC for celebrating the life of OR Tambo. It had invested a lot of their time in training ward councillors, because some of the problems at district level were related to poor communication by ward councillors.

Mr Bekker said that there was a memorandum of understanding (MOU) in place between the GCIS and the DOC for services they each rendered to one another, and therefore the DOC was not paying GCIS for accommodation. When a person passed away or retired, funds from ‘compensation of employees’ would be transferred to ‘payments and transfers,’ to fund such cases. Traveling costs were only for special cases..

Mr Currin said that the GCIS had 441 employees and 30 contract workers. 125 people were employed across the nine provincial offices.

Follow up questions

Ms V van Dyk (DA) asked which provinces Vuk’uzenzele was distributed in, how many people were involved in distribution, and how much they were paying them. She said a great deal of emphasis was put on gender-based violence and she wanted to know where GCIS intended to spread the message on this issue, and if it would reach the rural areas. She asked how the recent incidents of violence involving former Deputy Minister Mduduzi Manana, Ms Grace Mugabe and Mr Robert McBride had impacted on the GCIS as a government department.

The Chairperson asked for an explanation on stakeholder liaison with communities and other departments. He said that each Member of Parliament (MP) had an office in their own constituency and there were usually community radio stations there. The GCIS needed to step up more on its communications to the communities. While the Committee had been on oversight in KwaZulu-Natal (KZN), the GCIS office had been very small and the Committee had been squashed into a small boardroom. He asked if there was any budgeted item for rentals in the DOC’s financials, and if it was being spent.

Ms D Manana (ANC) said that the GCIS had been talking about the huge listenership that community radios had gained through stakeholder relations. She asked why national radio presenters were often resigning and joining community radio stations.

GCIS Response

Ms Williams said that gender-based violence was a national issue and therefore GCIS was tackling such issues as a whole, at both the national and provincial level. There were other campaigns such as those dealing with corruption, to alert the public. The GCIS campaign was that there was a need to educate South Africans that corruption, crime and other social issues were national issues with huge implications for the businesses that employed them, and for themselves.

Mr Currin said that civil society was broad-based, and it was very easy to pull together and work with civil society on various issues. The GCIS was intensifying its engagement with technical experts so that it could go on radio and give technical responses to communities. He said that the GCIS did have small constituency offices around the country, and sometimes did not have the resources to reach even the smallest of towns, but it was open to partnerships with constituency offices.

Ms Carrim said that the department was supplying Vuk’uzenzele to all the provinces through door to door campaigns, taxi rank activations, as well as knock and drop activations. Knock and drop activations were the cheapest form of distribution, because they used GIS mapping to determine the most strategic point to drop the magazines and have a reach to many people.Vuk’uzenzele was also available as a mobile app, but still used data, and the department was looking at ways to make data cheaper.

Ms Qinisile Delwa, Acting DG, DOC, said that there was nothing wrong with national radio presenters leaving and joining community radio stations. Maybe presenters would want to leave due to challenges at the SABC, but this was just mere speculation.

Department of Communications (DOC): Q1 Report

Ms Delwa said that the DOC had a total of 21 targets for the first quarter of 2017/18, and had achieved 18 of those objectives. The 2016/17 annual financial statements and performance information had been submitted to the Auditor General of South Africa (AGSA) and NT on 31 May 2017. The departmental risk register, highlighting strategic and operational risks, had been developed and approved. The three-year rolling internal audit strategic plan and 2017/18 risk-based internal audit annual operational plan had been signed off by the audit risk committee. The Department had commissioned its first evaluation study on the implementation of the broadcasting digital migration communication strategy.

The media diversity and transformation discussion paper had highlighted the following proposals:

  • the agencies responsible for ensuring media diversity needed to be strengthened;
  • the role of government in agencies such as the Media Development and Diversity Agency (MDDA) and the Universal Service and Access Agency of South Africa Universal Service and Access Agency of South Africa (USAASA(USSASA) was critical in ensuring continued and consistent funding for community and small commercial media that served marginalised communities;
  • government needed to explore additional policies to promote media diversity other than through government advertising and support through established agencies;
  • legislation on government advertising needed to be tightened to ensure that it corrected market failures and promoted diversity; and
  • 30% of government adspent to community media needed to be enforced across national, provincial and local government.

The DOC had targeted 10 digital migration broadcasting awareness campaigns for the 2017/18 financial year, and had held two digital migration awareness campaigns by the end of the first quarter. Overall, 31 awarenes campaigns had been carried out in the North West, Eastern Cape, KZN and Mpumalanga provinces. The over-achievement was as a result of exploring other innovative ways of conducting awareness campaigns, given limited resources. Innovative ways included establishing partnerships with other national and provincial governments, and local municipalities in their community engagements.

With regard to the Broadcasting Digital Migration programme, the Minister established a Digital Migration Advisory Council (DMAC) comprising of government, state-owned enterprises (SOEs), broadcasters and Telkom operatiors. The role of the DMAC was to support the DOC in a non-discriminatory approach in order to enable an expedited rollout of Set-Top Boxes (STBs) in all the provinces of South Africa. Focus areas of the DMAC were awareness campaigns, registration campaigns, distribution networksand installations. A partnership had been established with the Department of Public Works (DPW) to train 2 700 installers comprised of young people and women. The DPW was in the process of finalising the procurement services of an accredited service provider for training.

The DOC had targeted to conduct 20 quarterly oversight reports of entities. Reports from the South African Broadcasting Corporation (SABC), the MDDA, BrandSA, the Film and Publication Board (FPB) and the Independent Communications Authority of South Africa (ICASA0 had been submitted to the executive authority. The target for the first quarter had been five oversight reports, and the Department had achieved that.

The FPB had had a total of 74 milestones planned for the quarter under review and had achieved 61 (82%). The entity had been requested to ensure that it addressed: the finalisation of its online policy; delays in responding to queries; costing of key targets against available funds; lack of cooperation with distributors; and the poor response rate by universities for partnerships on classification courses.

ICASA had had a total of 73 key targets, and had managed to achieve 51. The programmes that contributed to the non-achievement of key targets were policy, research and analysis, and engineering and technology, due to capacity constraints. 

BrandSA had a total of 48 targets, and had managed to achieve 44. The key target that was not achieved related to market activaties in the United Kingdom (UK), the United States of America (USA), China and the United Arab Emirates (UAE) due to the absence of the country heads.

The SABC had achieved only three of its 18 targets. Significant key targets that were not achieved were the digitization of radio and television studios, as well as the migration of one channel, “Encore,” to digital terrestrial television (DTT) platforms; the management of revenue and expenditure in accordance with the approved budget; the approved performance management implementation plan; and performance contracts in place for all staff. The Department recommended that the SABC provide a comprehensive turnaround plan and ensure that performance agreements for senior executives and the entire staff be put in place.

The MDDA had a total of 30 performance targets across five programmes in the fourth quarter of 2016/17, and had managed to achieve 21. The main targets that were not achieved related to the production of the digital migration strategy, production of a concept document on the review of the MDDA Act, as well as the signing of MOUs with stakeholders. The DOC had noted the challenge of the lack of capacity faced by the MDDA in the 2016/17 financial year. It had requested the MDDA Board to ensure the filling of positions as a matter of urgency and to furnish the Department with a recruitment plan outlining timelines for filling vacant positions.

Ms Dikeledi Thindisa, CFO, DOC said that the department had a total budget of R1.4 billion and had spent only 23%, or R333 million. Programme one (administration) had spent 26% of its R62.77 million budget. Programme two had spent 14% of its 8.49 million budget. Programme three had spent 26% of its R22.29 million budget, and programme four had spent 23% of its R1.33 billion budget.

The DOC had received three clean audit reports, three unqualified audit reports, and one adverse audit report. The clean audits were for the DOC, GCIS and BrandSA. The unqualified audit reports were for the FPB, ICASA and the MDDA. The adverse report was for the SABC, which had regressed from a qualification opinion. AGSA had reported that the MDDA, ICASA and the SABC required intervention from the DOC.

AGSA had recommended that the DOC strengthen its controls in IT management and monitoring; accruals and commitments; oversight and governance structures at SOEs; and contingent liabilities and confirmations.

It had recommended that the GCIS strengthen its controls on IT infrastructure, management and monitoring, especially the Personnel Administration System (Persal) and Basic Accounting System (BAS); accruals and commitments; standard operating procedures (SOP) for media buying; inconsistencies in annual performance reports; and contingent liability confirmations.

AGSA had recommended that BrandSA strengthen its controls on the overstatement of provisions; leave balances; performance information; and supply chain management.

It had recommended that the FPB strengthen its controls on performance information; accounting authority’s failure to exercise adequate responsibility regarding performance reporting and related controls; misstatements on audit findings; and the performance of the audit committee.

AGSA recommended that ICASA strengthen its controls on the management of irregular expenditure that was still recurring; the management of fruitless and wasteful expenditure; material misstatements on audit findings; material misstatements on performance information; non-compliance with legislation relating to the failure to pay service providers within 30 days; procurement and contract management – no declaration forms or tax clearance certificates; and the accounting authority’s failure to exercise leadership and proper oversight.

AGSA recommended that MDDA strengthen its controls on performance information – reliability and material misstatements; procurement and contract management – no declaration forms, and preference points allocations not in line with the Preferential Procurement Policy Framework Act
(PPPFA) and broad-based black economic empowerment (BBBEE) Acts; management of irregular expenditure amounting to R6.7 million; misstatements on audit findings; and senior management and the accounting authority not exercising adequate controls and oversight on performance information and financial information submitted to AGSA.

AGSA recommended that the SABC strengthen its controls on invoice management; employee compensation (relating to two special bonuses paid in the past fiscal year); management of irregular expenditure valued at R4.4 billion; management of property plant and equipment; TV licences not being accounted for on an accrual basis; discounts offered to clients for advertising revenue not in line with the sales policy, but based on approved deviations.

Ms Delwa said that there were seven vacant positions in the Department. Head hunting was in process for a permanent Director-General. They had shortlisted candidates for DDG positions, and were awaiting interview dates.

Discussion

Ms Tolashe said that there was progress in DOC. The Committee was convinced that between National Treasury and the DOC, they would not agree because of thr many projects they had embarked on that had not succeeded. Maybe what was needed was a political discussion between the Committee Chairperson, as the oversight group responsible, and the leadership of National Treasury. She was looking forward to a meeting with the Minister so that she could present her strategy for the DOC to turn the Department around. She commented that they were almost at the middle of the second quarter, and the report they would bring for Q2 would not be much more different from the report they had presented on the day.

The Chairperson said that he was yet to see a Communications Department in any other country funded sufficiently. The DOC had the role of communicating what the government did, and it was interesting that in South Africa, communications did not have a priority budget.

Ms M Matshoba (ANC) asked how the DOC could assist the Minister to address communication with community stakeholders, such as in her own constituency of Gugulethu, where communication poles were down and there was no signal for their community radio station.

Ms Van Dyk asked what DOC was doing to enforce the 30% adspend. The Committee had been receiving information over the years that young people would be trained. When would the 2 700 young people be trained? Was the deadline to achieve the DTT migration programme realistic? What had been the extent of the irregular expenditures?

The Chairperson asked the DOC to explain the amounts for total registration and distribution, because there were inconsistencies.

Ms Van Dyk said that DOC had headhunted for vacant positions, but it had taken three months before conducting the first interviews. She asked why it had taken so long

DOC Responses

Ms Delwa said that convening a panel to interview DGs and DDGs involved getting a number of Ministers to form the panel, and their schedules were complex.

Tthe number of registrations and distributions on page 13 were for the first quarter, and on page 16 those figures were the total for the year. In terms of National Treasury’s 12-point plan, the recommendation was that the DOC needed to review its funding model.

The advisory committee was comprised not only of broadcasters, but also telecommunications, because they had an understanding of the spectrum before migrating fully to DTT.

On the issue of 30% adspend, the DOC had presented on the issues they needed to focus on to ensure that they had media transformation.

Ms Delwa said that by next week, they would be dispatching a team from the DOC and the MDDA to attend to the issues Ms Matshoba had mentioned in Gugulethu.

Follow up questions

Mr Kalako said that he hoped he was correct if he concluded that the debate around encryption and non-encryption was over. He asked what the ruling of the court had been when eTV had turned around and said they wanted encryption, when they had previously wanted non-encryption. What was the problem with set top boxes and satellites, and why could the problem not be solved out of court? What was the amount of the two bonuses paid in the past 11 months, and to whom were the bonuses paid. Had an amount been paid to Mr Hlaudi Motsoeneng? Over which period had the irregular expenditure been spread? He asked for information on the irregular expenditure in the MDDA and ICASA, and what it had been spent on, and if action had been taken by the DOC as the oversight body. He wanted written information from the DOC to the Committee on all the issues that had been reported so that they could follow the issues themselves. He asked for information on the MOU that had been signed by the Minister.
He also asked for information on the issue of set top boxes so that the Committee could have the information, because everything had gone quiet at the moment.

The Chairperson asked if the set up boxes were being used and activated, or were just being stored somewhere.

Ms Tolashe asked if Ms Delwa could explain about the unit overseeing the entities under DOC.

DOC’s Response

Ms Delwa said that DOC would submit all the information with regard to the reports.

The issue of the deadline preoccupied the DOC, so even if they did not kick off in 2019 with DTT, they would have at least achieved much.

Because there was no funding, the DOC had had to close up its call centre, and people could not call in to alert the DOC that their set top boxes were not working.

It was public knowledge that USAASA had filed a complaint requesting the DOC to nullify the contracts they had with the service providers.

Ms Thindisa said that the DOC would be compiling a report on all the entities and would submit a report to the Committee covering all the issues raised by Mr Kalako.

The meeting was adjourned.

 

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