Department of Communications & GCIS 2017/18 Annual Reports, with AGSA input; with Minister and Deputy Minister

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Communications

09 October 2018
Chairperson: Mr H Maxegwana (ANC)
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Meeting Summary

Annual Reports 2017/18

The Committee received a briefing from the Auditor-General of South Africa (AGSA) on the audit findings of the Department of Communication (DoC) and its entities, as well as a briefing by the Committee’s content advisor on the analysis of the 2017/18 annual reports of the Department and the  Government Communication and Information Systems (GCIS). The GCIS also reported on its 2017/18 performance.

The Minister of Communications said that Members would recall that in his State of the Nation address, the President had indicated that there would be a review of government departments. She said this process affected affect the communications sector, because indeed some of the things they had been looking at was the consolidation of departments. There would also be a review of state-owned enterprises (SOEs) such as the GCIS, for example, as to whether it would be a department or an entity that focused on government communications. These were the engagements they were working on, because the government’s repositioning on communications was very important and they needed to be able to redefine the GCIS in a different manner. They also had to look at the existence of the Department of Telecommunications & Postal Services (DTPS) and the Department of Communications and see whether it made sense to have these two departments as standalone departments.

AGSA’s audit outcome report showed that for the past three financial years, the Communications portfolio had been regressing. The South African Broadcasting Corporation (SABC) had technically regressed to a disclaimer of opinion, as they had been unable to adequately support the ongoing concerns and assumption used in the preparation of its financial statements. Brand South Africa (BSA) had regressed from clean audits over a two-year period, to an unqualified opinion with findings, as they had been unable to prevent irregular expenditure. The GCIS and DoC were commended for maintaining their clean audit opinions. The planned target for the analogue signal switch off in 88 borderline towns within seven provinces had not been achieved. Value-add procedures were performed on the Broadcasting Digital Migration (BDM) project for the current financial year, and a number weaknesses had been identified.  The Committee showed a lot of concern with regard to the slow response to recommendations by management, leadership instability and vacancies in key positions, and inadequate implementation of consequence management.

The briefing on the status of the South African economy highlighted the country’s negative growth, increased unemployment, and irregular expenditure by government departments and state-owned entities amounting to R72.6 billion due to poor financial controls. The BSA audit had regressed, while the Independent Communications Authority of South Africa (ICASA), the Media Development and Diversity Agency (MDDA) and the Film and Publication Board (FPB) had remained stagnant. This concerned the Committee, as it meant that advocating for more funding while accountability was lacking in the portfolio would be very difficult.

The Department had achieved 25 of the 30 targets planned for the year, but although it received a clean audit, the AG had raised eight findings. These matters, which require improvement in internal controls, would be addressed in the 2018/19 financial year.

The GCIS had achieved 44 of its 46 targets planned for the year.  Highlights included the distribution of 23.5 million copies of the Vuk’uzenzele newpaper, including 13 200 Braille copies, and the raising of R2.6 million through advertising revenue, which was used to print an additional 2.6 million copies. About 4 197 outreach campaigns had been implemented. An electronic Employee Performance Management and Development System (eEPMDS) had been introduced and was functional. The GCIS had practised sound financial management processes and procedures, spending R394 million of its allocated budget of R401 million.

Meeting report

Department of Communications/GCIS: AGSA briefing

Ms Jolene Pillay, Senior Manager: Auditor-General of South Africa (AGSA), presented the AGSA briefing on the 2017/18 performance on the Department of Communications (DoC) and the Government Communication and Information System (GCIS).

She said there had been no improvement in the “plan-do-check-act” cycle. From a planning standpoint, the status of Brand South Africa’s (BSA’s) audit action plans had regressed, although overall the usefulness of performance indicators and targets remained unchanged. In the “do” part of the cycle, BSA’s overall internal controls and basic financial and performance management controls had regressed. Vacancies in the chief financial officer (CFO) positions at the GCIS, Film and Publication Board (FPB) and the South African Broadcasting Corporation (SABC) also indicated regression. From a checking point of view, AGSA was satisfied that assurance was provided by senior management, accounting officers, executive authority and the Portfolio Committee, while the internal audit units and audit committees at the Independent Communications Authority of SA (ICASA) and the SABC showed a slight improvement. Finally, in the “act” part of the cycle, there had been no changes recorded in respect of compliance with consequence management legislation, or  with regard to the investigation into the previous year’s unauthorised, irregular, fruitless and wasteful (UIFW) expenditure or supply chain management (SCM) findings.

A snapshot of the DoC portfolio, comparing its performance with the previous year, indicated clean audits had dropped from 43% to 29%, the quality of financial statements remained unchanged, the quality of performance reports and compliance with legislation had dropped to 43% from 57%. However, the irregular expenditure of R626 million was lower than the previous year’s R722 million, although the completeness of irregular expenditure was qualified at the SABC.

Commenting on the Department’s audit outcomes over the past five years, Ms Pillay said that over the past three financial years, the DoC portfolio had been regressing in audit outcomes. The SABC had technically regressed to a disclaimer of opinion, as they were unable to adequately support the going concern assumption used in the preparation of the financial statements. There were other modifications related to property, plant and equipment (PPE), programme films and sports rights, payables, irregular expenditure and taxation. BSA had regressed from clean audits over a two-year period to an unqualified opinion with findings, as they were unable to prevent irregular expenditure. She commended the GCIS and DoC for maintaining their clean audit opinions.

Key projects selected as part of statutory audit indicated that the planned target for 2017/18 related to the analogue signal switch off in 88 borderline towns within seven provinces was not achieved. Value-add procedures were performed on the broadcasting digital migration (BDM) project for the current financial year and the following weaknesses were identified relating to the project:

  • Lack of appropriate coordination and effective planning between all relevant stakeholders – the DoC, the SA Post Office (SAPO) and the Universal Service and Access Agency of South Africa USSASA) -- in the value chain of the project to achieve the national goal of switch off by the set date.
  • The Department had indicated that it does not have adequate human resource capacity for monitoring the BDM project within the DoC. 
  • Expenditure management was a concern as funds could not be fully utilised -- R13 million (32%) unspent for 2016/17, and R5 million (26%) for 2017/18 -- even though the Department indicated that more funds were required to achieve the overall deadline for the project.
  • Lack of adequate public awareness initiatives to get qualifying households registered. As at 31 March 2018, only 686 150 households had successfully registered and qualified to receive set top boxes (STBs), representing 14% completion of the target initially set.

 

Regarding the financial health and financial management of the portfolio, AGSA reported that

as at 31 March 2018, the SABC was commercially insolvent because it was not able to settle its liabilities as and when they were due, even though its assets exceeded its liabilities. The entity did not have an adequate model to properly forecast cash flows, as forecasted cash balances did not properly consider all relevant information and was therefore incomplete. Management had forecast a significant increase in creditors over the next financial year, which was a significant concern, and the initiatives in the roadmap prepared in July 2018 were still at an infancy stage.  These were not adequately factored into forecasted cash flows.

Regarding fraud and consequence management, the Media Development and Diversity Agency (MDDA) had allegations reported of fraud, but management had investigated these allegations and followed the disciplinary processes required. ICASA also had allegation of SCM misconduct reported, however as at year end, the investigation and hearings were still on-going. The investigation had started in September 2017. The SABC had on-going investigations which were undertaken by the Special Investigating Unit (SIU). The SIU had not yet issued its final report on the outcome of the investigations. In addition, there are some investigations currently under way within the internal forensic unit, but not all of them were investigated by the year end.

Ms Pillay concluded by identifying the root causes and putting forward AGSA’s recommendations. She said the root causes for negative findings were the slow response by management (accounting officers and senior management), instability or vacancies in key positions, and inadequate consequences. AGSA’s recommendations were:

  • The Portfolio Committee (PC) must request management to provide feedback on the implementation and progress of the action plans to address poor audit outcomes during quarterly reporting, and must request quarterly feedback on the progress of filling key vacancies at the SABC and MDDA.
  • The PC must request feedback on controls to address irregular expenditure and the implementation of preventative controls, including actions against transgressors.
  • The PC must request feedback on actions implemented to improve the financial health, budget management and control and turnaround plans/ interventions.

Discussion

The Chairperson commended the presentation, since it did not only focus on clean audit but also the positive impact on service delivery. Having a clean audit without service delivery was not helpful and there was a need to find a way to gauge the impact on service delivery. This was one of major issues he had raised with the AG in 2014/15, but he was happy that it was well demonstrated in the presentation.

Ms V van Dyk (DA) commented that the report was thorough, and she was happy with it.

Mr M Kalako (ANC) requested clarification on the course of regression of the SABC, and asked if this had to do with the loss of expertise within the corporation. Had the AG seen improvements with the new leadership of SABC in addressing issues of governance, wastage, irregular expenditure or even progress moving forward in addressing some of these issues, and if there had been a positive attitude towards resolving its problems.  He commented that there had been chaos at the MDDA that had resulted in the gradual regression as expressed in the presentation.

Mr R Tseli (ANC) said there were some fraud allegations that were not properly investigated, and other investigations took longer than three months, and asked what some of the reasons were as to why some of the allegations were not properly investigated. Why did some of the investigations take longer than three months? Why had the issue of irregular expenditure at the SABC not been attended to for the past three years?

Mr N Xaba (ANC) asked why AGSA had described the reduction in irregular expenditure to R626m from R722m as an improvement, as he did not consider it to be an improvement. The regression in audit outcomes had indicated poor control and slow progress, and he asked if these reasons were a result of poor strategic leadership at the SABC.

Ms M Matshoba (ANC) commented on the issue of allegations not being properly investigated and asked who was responsible for these investigations. She was happy with those targets that were achieved, but at the same she was concerned about the targets that were not achieved and not evaluated, and wanted to know the reason why they were not achieved.

Minister’s comments

Ms Nomvula Mokonyane, Minister of Communications, thanked the AGSA for their presentation and acknowledged some of the issues they had raised. The presentation had revolved around matters of management and leadership, as well as issues related to non-compliance with legislation for some of the entities. With regard to the MDDA, it was better first to understand that there was a Parliamentary process that was needed to give certainty of the road map towards filling the vacancies of the board, and that it was only through the Parliamentary process that they would be able to conclude and attend to the challenges. It was important for Parliament to make a commitment towards filling the vacancies of both the MDDA and SABC boards.

She acknowledged the comments made by the AG on the engagement of these audits. One could attest that the Department had been part of the process. Some of the matters had been presented in the last annual general meeting (AGM) of the SABC, and the DoC had posed some of these issues to the audit and inquired if there was a road map to deal with them, including the funding model for the SABC, as this was one of the critical issues that featured prominently in the turnaround strategy. Regarding the SABC leadership, there was now a new chief executive officer (CEO) and a new chief operating officer (COO), and one female among the new appointments who was the new chief financial officer (CFO). She hoped that this would make it easier for work to be done.

She said the DoC’s weakest link had been the primary mandate of oversight capacity. The Department had undermined its responsibilities for oversight over time. She was working together with the director general (DG) and the entire management team to create more professional capacity to deal with the oversight of entities, because other than the entity oversight, policy and regulations became the two other legs that made the Department exist.

She conceded that some of the issues had continued in perpetuity since 2015/16 precisely because of the absence of a dynamic and efficient oversight capacity. The review on the shareholder compact, the role of the shareholder, as well as the responsibility of DoC’s management would be some of the matters going forward which would be elaborated on during the presentation. She agreed with the comment made by the Chairperson that one could have 700 clean audits but not be effective. In their presentation, they would concede that they had not been effective with their primary mandate, but it was one of the things that they were trying to resolve.

The Chairperson referred to the UIFW expenditure at the SABC, and said it was a clear indication of neglect of duty by the entity’s management. The people responsible some of this situation were no longer there, and this information was provided at the end of the financial year. With such an issue, one cannot do anything until the end of the year, but as one proceeds from one quarter to another, one should raise the red flags so that the challenges can be attended to.

Mr Tseli asked why more money was required for the BDM project, despite the fact that what they had been given before had not been spent. It did not make sense to him and other Members, since on a number of occasions they had discussed the aspect of departments not having enough money but when given money, they did not spend it. The reasons provided on the slide were not convincing enough, and he requested that the Committee should have a separate session in order to discuss this particular issue.

AGSA’s response

Ms Alice Muller, Corporate Executive, AGSA, first addressed the comment made about the impact of the instability of the SABC. It was a known fact that it definitely had an impact on their results. There was a comment on the lack of internal control and leadership, and that was due to the fact that the action plans were not properly monitored right through the year, as well as the plan of supply line management. Regarding the supply chain management, AGSA was dealing with two main issues. The first was the history -- rectifying the big contracts and determining the exact amount of irregularities that had been incurred by the SABC in the past. The other was the internal controls over current expenditure. AGSA had not been able to determine what the exact amount of irregular expenditure, although looking at the financial statements for the last year it could be greater because it had been able to audit all the contracts and all the expenditure. Regarding the quality of financial statements and leadership of the SABC, she said there was a problem leadership instability at the SABC, and a lack of monetary controls and wasteful expenditure. There was a low level of accountability.

Ms Pillay referred to the question of the impact on service delivery and how service delivery could be assessed. She said that if the four aspects of the plan-do-check-act cycle were followed, or if there could be proper financial discipline in these areas, one could achieve accountability which would result in better audit outcomes. This would have a positive effect on the service delivery aspects. It would also develop a culture in the organisation to achieve service delivery.

The regression at Brand South Africa (BSA) could be due to the change in leadership. From AGSA”s point of view, there were many issues they identified when they look at these entities. It was difficult for them to relate it to the performance of the individuals, so it was better if this was done by the entities through their performance management processes, but AGSA would say that there had been regression due to poor internal control.

She also responded on whether AGSA had seen improvements at the MDDA. There had been some appointments, but it had been very difficult to determine at this stage whether there had been improvements. They would continue to monitor the progress to see if there would be any improvement. They had also decided as an office to do a review across all the entities. They hoped that going forward an interim review would be able to provide to them with better feedback. 

She said that the SABC board would be in better position to explain why some allegations were not properly investigated and why some took a long time to be investigated, since they had conducted the investigations. Some investigations were also ongoing, and AGSA had not received the final reports yet. 

Economic factors’ impact on DoC

Mr Mbombo Maleka, Content Adviser, Portfolio Committee on Communications (PCC), gave a briefing on the state of the South African economy and its relevance for the DoC.

He said the South African economy had slipped into recession during the second quarter of 2018, shrinking by 0.7% quarter-on-quarter. Government activity had decreased by 0.5%, largely as a result of falling employment numbers in the civil service. According to the figures from the Quarterly Employment Statistics (QES) survey, released by Statistics South Africa, the total number of jobs reported in the second quarter showed a decrease of 69 000, bringing the total number of persons employed in the formal non-agricultural sector of South Africa to 9 748 000.

He referred to South Africa’s position in relation to the BRICS (Brazil-Russia-India-China-South Africa) community, and said the BRICS countries make up a sizeable portion of the world’s population. South Africa was the most recent member of BRICS, having joined in December 2010, but contributed only 1.8% to the total BRICS population

He said the government’s 14 priority outcomes were the catalysts for successful implementation of the National Development Plan (NDP) goals. The NDP envisaged an active citizenry that participated in the socio-economic life of the country. The Department’s work contributed in particular to outcome 14 (nation building and social cohesion) in the 2014-2019 medium term strategic framework (MTSF).

Irregular expenditure by government departments and state entities had accumulated to R72.6bn, according to a recent analysis by the Democratic Alliance. Speaking at the Banking Summit, Auditor General Kimi Makwetu had lamented the poor financial controls in the public sector that lead to irregular expenditure, saying the scourge had reached an "all-time high.” Public Audit Amendment Bill seeks to expand the mandate of the Auditor General.

Mr Maleka concluded that from AGSA’s perspective, while the clean audit of the DoC was commendable, the regress of BSA was regrettable. More importantly, the stagnation of ICASA, MDDA and FPB was a cause for concern. It would become increasingly difficult to advocate for more funding when accountability lacked in the portfolio.

Discussion

Mr Tseli asked for an overall impression of how the entities had utilised the funds allocated to them. What was the source of the information that indicated that people felt that race relations had deteriorated?

Mr Xaba asked why the issue of the Portfolio Committee and its oversight had been omitted, despite its importance.

Ms Van Dyk commented that she disagreed on a specific aspect of the presentation that stated “the official unemployment rate had been relatively high since 2008,” as it should rather say it was “very high.”

Minister Mokonyane said that what was important about research was not to dilute or add to it, and that the researcher should have put the information as it was. She agreed with Ms Van Dyk (DA) that unemployment was not relatively high, but very high according to Statistics South Africa.

She said the Government Communication and Information System (GCIS) was a standalone department, and was not an entity over which the Department exercised oversight. It was overseen by the Ministry, and not by the DoC. It had its own CFO, accounting officer, roles and responsibilities.

She commented that the issues involving the stagnation of ICASA, the MDDA and the FPB were not the same. At ICASA, the issues were related to their financial controls. At the MDDA, the AG had found that there had been delays in filling the staff vacancies, which was the responsibility of the board. Since their issues differed, they should not be classified in the same space. For the MDDA, the Portfolio Committee should say by when it would help to fill the vacancies on the board, so that it took the lead.

She said the part of AGSA’s presentation that dealt with the audit outcome of the portfolio over five years helped to dissect, but not generalise, the assertions around corruption in some of the entities. She would review its report, because it indicated that there were outstanding corruption-related matters at the SABC that must still be pursued by the Special Investigating Unit (SIU). They should be in a position to dissect the assertions so that when they engaged the Department on actions, they had to know whether they were entity-based or even related to the Department. On the basis of the audit outcome, it was only the SABC that had highly regressed in terms of the now added disclaimer, but the other three entities were all unqualified, with matters of emphasis.

She would support what the Chairperson had said about the social impact of the work they did. They should be looking at issues of transformation in the communication sector, as well as diversity in the sector and access to digital migration and penetration. They had to identify what some of the key activities of this portfolio were that contributed to nation building and social cohesion so that they could focus on community broadcasting, inclusivity, diversity, and transformation of the sector. This was what they should be dealing with.

The Chairperson said that he was tempted to say that the content adviser should integrate the comments, as well as elaborate in his document on the issues that had been raised without responding. The content adviser must not only list his sources, but must go beyond that and verify so that the document became concrete in terms of the information. He suggested they could use the existing document as a working document amd improve on it with further clarification of the issues.

Minister’s response

Minister Nomvula Mokonyane addressed the Committee before the presentation by the Department of Communications and Information Systems (DCIS), as she had to leave to attend a briefing meeting with the President.

She acknowledged that this was their penultimate report before the end of their term in office as the current administration. Part of their responsibility was to contribute towards Outcome 14, which included the creation of an aiding environment for the provision of an inclusive communication service to all South Africans in a manner that promotes social economic development and investments. In their own plans they needed to identify their primary mandates, which covered broadcasting, new media, print media and other new technologies and brands in the country both locally, regionally and internationally. She envisioned a vibrant and sustainable communication service in the country.

She admitted that 2017/18 financial year had had its own challenges, with the high turrover of management, but said the Department had been able to achieve 25 of the 30 targets planned, which translated into 83% in terms of performance. The targets that had not been achieved were largely experienced in the core mandates of the departments. She conceded that there had been an inability to deal with the oversight of entities owing to the limited human capacity.

Different plans had been worked on for continuous implementation and monitoring. They had been looking at a new focus to finalise the new vision for broadcasting through an audio-visiual content programme policy, which had now gone out for public comment. She hoped that very soon they would be able to come back to this Committee and share the progress made with this broadcasting policy.

The other issue had to do with the roll out of the Broadcasting Digital Migration (BDM), where Members would realise that they had not done well. They had missed several targets and had been to the Committee to confirm that they would not be able to meet the target and a turnaround strategy had been worked on, which was before Cabinet. Cabinet would attend to it and resolve the strategy by the coming Wednesday.

She explained why they had gone through this route. It was because they had come to realise that it was not a programme that was solely dependent on the DoC and its entities. It was a programme that could be efficiently rolled out through collaboration and co-ordination with different departments, and it was on this basis that an advisory council had been put together that included other departments, the private sector and research institutions. Hopefully, with what would emerge on Wednesday they would be able to deal with matters in an accelerated manner.

Other highlights were that the DoC had been able to spend 99.3% of its allocated budget for 2017/18, and that the Department and the GCIS had both received clean audits. However, they conceded that there were challenges that were primarily affecting the SABC, and they remained hopeful that through the work that they had been doing, and also the report that presented to the extraordinary general meeting (EGM), there would be an improvement. There was continued engagement that still had to be undertaken around the turnaround strategy and the funding model of the SABC, which was something the DOC wished to bring before the Committee. The SABC could actually be turned around if one dealt with its funding model, issues of content, diversity and even the sports rights. They also acknowledged the issues that had been presented by the AG’s office in this regard.

Ms Mokonyane said that with the unqualified report, Brand South Africa had to do a lot of work around the kind of issues involved. For the record, there had been some dynamics within the management of BSA, and those were among the issues they were engaging the board on, because they had contributed to the shaky space in which BSA found itself. The unqualified reports of the MDDA and ICASA were primarily around the issues of financial management, supply chain management, and so on. They believed that once they had the capacity, then they would be able to change things around. The MDDA felt the sooner they filled the vacancies on the board, the board could sit and would be able to fill the vacancies such as the CEO, and it would be able to move on.

With the FPB, there was a process on the appointment of a CEO that had almost reach its finality.

She did not want to say much about the SABC, but wanted to indicate that together with the National Treasury, the DoC had put together a turnaround task team that included the CFO of the Department and the office of the accounting officer of the finance department, which had the capacity to deal with the turnaround plans. They would be engaging the SABC on what they had presented themselves.

Lastly, she said that Members would recall that in his State of the Nation address, the President had indicated that there would be a review of government departments. She said this process affected affect the communications sector, because indeed some of the things they had been looking at was the consolidation of departments. Secondly, there would be a review of state-owned enterprises (SOEs) such as the GCIS, for example, as to whether it would be a department or an entity that focused on government communications and had a CEO, as compared to a Director General (DG), as it was required in the Public Service Act. These were the engagements they were working on, because the government’s repositioning on communications was very important and they needed to be able to redefine the GCIS in a different manner. They also had to look at the existence of the Department of Telecommunications & Postal Services (DTPS) and the Department of Communications and see whether it made sense to have these two departments as standalone departments.

The issues surrounding GCIS, while in consultation with the team, was what they would finally agree on after filling the vacancies. Would they start looking for an accounting officer or a DG, or would they be looking for a CEO of a company that could be able to execute the responsibilities. She pleaded that by end of her administration there should be a way forward for the next administration, but for now they should rather not have a DG appointed, then after the election have a different structure of government. They should all agree that they needed a different GCIS, with a different capacity in terms of where they wanted to take government communications and with a new policy on government communications. They also need to find a relevance for two departments of communications.

Lastly, she said that what had been stable with the DoC was its ability to account on its financials and its ability also to make sure that it adhered to the plan. However, they conceded that it had not been easy to deal with oversight, and they agreed with the AGs office. The issues around the implementation of digital migration were a priority for 2018/19. For the GCIS, it was the issue of repositioning it with the government policy for communication.

 

Department of Communications: Annual Performance Report

Dr Mashilo Boloka, Acting Director General, Department of Communications, presented the Department’s annual performance plan for 2017/18. He said it had received a clean audit report and this was a continuation, as it had received a clean audit for the past two years.

The Department’s strategic goals and objectives for achievement by 2019 were:

  • Effective and efficient strategic leadership, governance and administration, to ensure compliance with statutory requirements and good governance practices, improve capacity of the entities to deliver, and ensure SOC adherence to good governance and financial stability.
  • A responsive communications policy regulatory environment and improved country branding, to improve universal access to broadcasting services and information by all citizens , and to market the country locally, regionally and internationally to provide an enabling environment for investment.
  • A transformed communications sector, to support the growth and development of the creative industries, to ensure the country migrates from analogue to digital broadcasting, and to strengthen support, guidance and interrelations with stakeholders.

The Department had achieved 25 of the 30 targets (83%) planned for the 2017/18 financial year. Although it had received a clean audit, the AG had raised eight findings that had made their way to the management letter.  These were matters which required an improvement in internal controls, and would be addressed in the 2018/19 financial year.

Discussion

Ms Van Dyk asked if the DoC could promote social cohesion through the SABC, since it was limited because of financial constraints. What were the time lines to ensure the audio-visual and digital content bill would be finalised in the current financial year? She asked for an explanation of the dynamics at BSA. Why was a critical position like that of the DG still vacant? What was the financial impact of the switch-off of the analogue transmission in respect of the signal switch in 88 borderline towns within seven provinces?

Mr Xaba said that he understood that the DoC’s road map was yet to be shared with the Portfolio Committee, but asked if the private sector was going to be involved, and what role BRICS would play in the development agenda. He commented on the turnaround strategy presented by the Department, saying that the idea was good but the problem was that the responsibilities were not clearly defined, so it was difficult to understand who owned what.

Mr Tseli commented on the fact that the DoC had said that the targets that they had made were not “smart,” and asked why they had approved targets that were not “smart.” He also wanted to know how much money the Department thought they needed to execute their responsibilities.

DoC’s response

Minister Mokonyane referred to the issues related to digital migration, and said the challenge had been that over time there had been a single approach to the implementation process. What they had been able to do now was to establish a project management office that would be outside of the DoC, because they did not believe that the Department on its own would be able to do the work. They had since appointed a project manager to co-ordinate all of the six departments that were affected -- the National Treasury and the Departments of Trade and Industry (DTI), Science and Technology, Small Business Development, Environmental Affairs and Telecommunications & Postal Services (DTPS). It also includes the various entities in the communication sector because of their different roles and responsibilities, including the post office. Besides the national departments, all spheres of government, including the South African Local Government Association (SALGA), were also part of this project because the work would be done at the local level. They had also drawn in the South African Social Security Agency (SASSA), the National Consumer Council and the National Communication Forum as part of the advisory council. Within the council, they had formed different technical work streams to look at different issues. Service providers, as well as those who were doing the production and those who were in the retail, were all involved. Everyone had a role to play and to make key contributions, which relieved the government in terms of assumptions of the total cost towards the roll out.

The DoC had not only sought lessons from BRICS, but had also sought experience even from developing nations and those who were within the neighbourhood, such as Namibia and Tanzania. Brazil, for example, was still behind, and was targeting November, and even with them there were lessons to be learnt. The current project manager had been a participant globally after being a technocrat at SABC. He had championed the work in Namibia, and it was felt that South Africa’s benchmark in terms of knowledge might be slightly closer to what the Namibians had been able to do. Through other entities and private broadcasters, the DoC was working on the Tanzanian experience so that it could introduce a hybrid system, which was being considered.

The Department’s target was that by 2019/20, they should be embracing the digital concept as they planned to switch off the Free State this year and move on to the North West, and part of the Northern Cape. They were not looking only at digital migration, but also looking at the opportunities that come with this process. Therefore, after the Cabinet meeting on Wednesday, they would come to the Portfolio Committee and present a detailed road map, the action plan, and most importantly, the communication and marketing approach.

The dynamics at BSA had been around the issues of the CEO being suspended, and some of the issues were related to management. The DoC was dealing with the matter and had asked the board to make sure that there was fairness throughout the process. There was a good CFO at BSA who had left, so they hoped that with the new appointments these matters would be sorted out. The charges of sexual harassment against the CEO had been cleared, but BSA had said that they had four more charges. However, they hoped that this process would not affect the functioning of BSA because of its strategic significance from the standpoint of investment and marketing of the country.

For entity oversight, the Department needed an outfit that had the capacity and was highly resourced, and at the same time could track matters beyond the quarterly reports. What the Department had been doing was relying on quarterly reports in line with shareholder compact, but they believed that they needed a better outfit with the capacity to always follow things through, which was very important for these entities. .

With regard to the DG’s vacancy, she said that there was a review now and she was appealing to the Committee to wait until the process was concluded by the President. It was important that in the process, the roles and responsibility of the GCIS were properly defined. They needed an effective review of the role of the regulator, which was ICASA. It was very important for the whole process to be completed to ensure that these institutions ran their mandatea smoothly.

The turnaround team was dealing with the challenges at the SABC, but the solutions for did not lie only with the corporation. The funding and the funding model of the SABC was quite critical. The National Treasury had the capacity to look at the implementation of the turnaround strategy for the SABC. What had to be avoided was having letters moving back and forth from SABC to the Minister and to the Treasury, and rather bring everyone together and say, was this turnaround fundable and was it going to turn things around, and have the Department say that they could hold the SABC accountable. It was important for the tripartite team to work together for the turnaround to succeed.

Dr Boloka responded on the impact of switching off from analogue to digital. He said that it had three levels of impact: One was on the financials of the entities, and another would be on the diversity of content. The third and critical issue had to do with the brokers. The brokers’ system was not protected by the international interference, because the deadline that was set by the International Telecommunication Union (ITU) was in June 2015.

Ms Dikeledi Thindisa, Chief Financial Officer, DoC, responded on the question about how much they needed to run the Department. She said the amount they needed to carry out their responsibilities effectively had been submitted to the secretary of the Department.

Government Communication and Information System (GCIS): Annual performance report

Ms Pinky Kekana, Deputy Minister of Communications, gave an apology for the absence of Ms Phumla Williams, the acting Director General (DG), on medical grounds, and invited the GCIS team to introduce themselves and proceed with the presentation.

Mr Keitumetse Semakane, Acting Deputy Director-General: Corporate Services, and Chief Director: Human Resources, introduced himself and the team before proceeding with the presentation. The other members were MsTasneem Carrim, Acting Deputy Director-General: Content Processing and Dissemination, Mr Michael Currin, Acting Deputy Director-General: Intergovernmental Coordination and Stakeholder Management, and Mr Mandla Langa, Acting Chief Financial Officer.

He invited Ms Carrim to proceed with the presentation of the progress report on the President's Coordinating Council (PCC) recommendations.

Ms Carrim said the recommendations proposed the GCIS should:

  • Develop or procure a system that would enable the Department to quantify, track and monitor moneys spent outside the GCIS system by government;
  • Liaise with the Association of Independent Publishers (AIP) and provide the Committee with detailed information on the utilisation of government spending;
  • Improve support for small, medium and micro enterprise (SMME) development;
  • Provide a clear plan of how the Department was going to make sure that government departments advertise through platforms that have been created by the Department;
  • Provide a detailed report on the uniform approach of government communicators at all three spheres of government, including the development of the curriculum initiative;
  • To provide an audit of how local government and national government departments were assisting community radio stations in terms of the 30 % advertising spend, before the end of the 2017/18 financial year.
  • Intergovernmental Coordination and Stakeholders Management

She said the Department had 46 targets planned for the 2017/18 financial year, and 44 were achieved. Highlights included:

  • The distribution of 23.5 million copies of the Vuk’uzenzele and 13 200 Braille copies, and raising R2.607 million through advertising revenue, which was used to print an additional 2.646 million copies.
  • The implementation of 4 197 outreach campaigns – 1 959 community and stakeholder liaison visits, 1 727 development communication projects, and 511 Thusong marketing events.
  • Support for political principals at 169 izimbizo events.
  • The clusters held 17 engagements with communicators as part of ensuring proper coordination of the government’s programme of action (PoA) and major campaigns.
  • 276 media-buying campaigns were approved and implemented.
  • The South African Government News Agency published 3 623 stories, Twitter had 136 000 followers by end of the financial year, and  Facebook had 24 241 likes by end of the financial year.

Mr Currin reported on the performance of the GCIS during the 2017/18 financial year. He said there had been compliance with relevant legislation dealing with human resources, strategic management, finance and supply chain management, and it had achieved a clean audit for four consecutive years. The GCIS had practised sound financial management processes and procedures, spending R393.995 million (98.1%) of its allocated budget of R401.45 million The vacancy rate of 8.18% was kept under the legislated percentage (10%) throughout the financial year. An electronic Employee Performance Management and Development System (eEPMDS) had been introduced and was functional. 100% disclosure was achieved for senior management service (SMS) members. Finally, information systems and hardware were available more than 95% of the year, enabling the Department to function efficiently.

Mr Langa covered the financial performance of the GCIS, and said that the Auditor General’s opinion had stated that its financial performance and cash flows for the year had ended in accordance with modified cash standard (MCS) and the requirements of the PFMA. There were no material findings on the usefulness and reliability of the reported performance information or in respect of the compliance criteria relating to applicable key legislation, and no significant deficiencies in the internal controls had been identified. A clean audit opinion was issued by AGSA.

Discussion

The Chairperson commented on the under-spending and requested more explanation on programmes 2 and 3, suggesting that they should overspend sometimes.

Ms Matshoba said she was impressed by the performance of GCIS. She asked how they interacted with the communities in the rural areas in order to convey information and marketing campaigns so that they could participate. She also commented on the fact that where there were no radio stations, the Minister and the Deputy Ministers should go to the people and inform them.

She said that Vuk’uzenzele had not reached the rural areas, so people had not been able to access it. She insisted that the Braille version be accessible to the people in the rural areas so that they too could participate in all the marketing campaigns.

Mr Xaba suggested monitoring the advisements and quantify those received from outside the government so they could estimate to a certain extent how much they were losing, and a control mechanism could be set up.

Mr Tseli said that the reason why he was so passionate about community radio was that it was a very exciting tool, especially for people in rural areas. He was very grateful for the fact that there had been progress in tracking the support that they were getting from community media. After checking with community people, the impression he got was that political principals were still not utilising community radio. He suggested that the GCIS should try to follow up very closely. This also applied to parliamentary constituency offices, which were close to the people. The GCIS should come up with a strategy to ensure that in the process of informing the public, it was popularising these offices because they were very close to the people. 

Ms Van Dyk she congratulated the GCIS on a job well done, but at the same time wanted more clarification on the R4 million which was regarded as wasteful expenditure.

GCIS response

Deputy Minister Kekana said AG’s report would guide the GCIS throughout the next financial year, to check whether was improvement or not.  The report indicated there had been a great improvement, particularly in terms of outreach, communication and service delivery in general. She also spoke about the government communication policy which they had adopted to assist them in coordinating with other government departments on communications issues, including those involving the media. There had been great improvements in the utilisation of community radio, thanks to its collaboration with the Media Development and Diversity Agency (MDDA) to make this possible. She agreed with Members that they need to make us of the constituency offices for circulating the Vuk’uzenzele newspaper so that people stayed informed.

Mr Semakane informed the Committee of the appointment of Mr Langa as the new acting Chief Financial Officer (CFO). He started on 1 June 2018.

Ms Carrim responded on the question of reaching the rural areas. She admitted that although they would like to reach out to everybody, it was not possible. A few years ago, they had changed the model of approach. In the past, they would choose a different area every month, but the problem was that they could not track or measure the success, so they had reviewed the model again and realised they should stay in one area, since they could measure it.  They had also developed an online version of Vuk’uzenzele newspaper, but there still challenges of reaching the target market. They were still trying, and they had also been trying to bring the data cost down. For example, when they get extra money from advertising, they go to those areas they have not been to before. They would provide a breakdown in writing of the areas that they go to. 

She said that the GCIS were passionate about community radio. They always tried to convince every client that came to them to use community media. They put out three radio bulletins twice a day, and community radio could take them for free. They also provide content for community media, and help the community radios became compliant so that they could gain revenue.

Mr Currin said his branch had been working with the community media, but what they had not been good at was how they worked with the big commercial media, so they had focused on improving this aspect. They have also tried to increase the amount of content so that they could use different communication forums and digital avenues.

Mr Langa responded on the R7.6 million under-spending of the budget. He said this was related to vacancies in the DG’s office amounting to over R4 million, which contributed to a total of R5.6 million on the compensation of employees. Another major element was R1.7 million for goods and services, which involved under-expenditure on surface-mounted technology (SMT) and marketing.

There was discussion by the Committee Members on the fourth term programme, and the meeting was adjourned.

 

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