GCIS, MDDA & SITA on 2019/20 Annual Reports & Revised Annual Performance Plans

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Communications and Digital Technologies

18 November 2020
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Meeting Summary

2019/20 Annual Reports

The Department of Government Communication and Information System briefed the Portfolio Committee on its 2019/2020 Annual Report. From the Report, it was noted that the Government Communication and Information System (GCIS) managed to meet 95% of its performance targets (41/43 set targets). The two targets not met were from the Intergovernmental Coordination and Stakeholder Management and it was mainly because forums were cancelled as a result of the COVID-19 pandemic. GCIS registered overachievements under administration specifically on targets set for women at SMS level and people with disability. The entity received a clean audit outcome from the Auditor-General.

The Media Development and Diversity Agency (MDDA) was second to brief the Committee on its 2019/2020 Annual Report. It was presented that MDDA’s performance had significantly increased in 2019/2020. In 2017/2018, the entity had achieved 44% of its targets. In 2018/2019 it achieved 80% of its targets which increased in the 2019/2020 financial year to 84%. MDDA also received a clean audit outcome from the Auditor-General for the reported financial year.  Multichoice, SABC and E-TV were listed as the major contributors to MDDA broadcast contributions.

The State Information Technology Agency (SITA) also presented on its 2019/2020 Annual Report. The entity recorded a 60% achievement in meeting its targets. SITA failed to meet targets in service delivery and financial stability. It was presented that the performance challenges were closely linked to a number of reasons including delays in clients accepting proposals, power outages and outstanding payments from clients. SITA had tabled 2019/2020 as the first year of implementation for the digital transformation strategy but it was delayed due to financial constraints. Regardless, the entity managed to assist various Government Departments deliver on their planned initiatives such as the migration from website to the SITA cloud. The entity experienced a regression in its audit outcome and achieved qualified with findings opinion.

The Minister of Communications briefed the Portfolio Committee on the SABC crisis. It was stated that following the events on national television, the Department had called for an urgent meeting with the SABC Board, to have a discussion around section 189 of the Labour Relations Act. During the meeting, the SABC Board failed to agree on a way forward as there were splitting views regarding section 189. One group supported the implementation of section 189 which would result in retrenchments of SABC workers while the other was moving for considerations of other options before evoking section 189, which should only be evoked as a last resort. The Department made its position clear to the SABC Board that it was not in support of the retrenchment of workers. It further urged the Board to consider other options and also be procedural in dealing with the matter.

It was stated that the Portfolio Committee was going to have a meeting with the SABC Board on the evening of 18 November 2020 to try and come up with a solution to the challenges.

Members congratulated GCIS and MDDA on receiving clean audit outcomes from the Auditor-General. They urged SITA and other entities to also learn from GCIS and MDDA so that they could also receive clean audits.

Concerns were raised by Members on the high vacancy rate within entities. Though efforts were being made for the filling in of critical positions, there still remained a challenge with regards to the vacancy rate in GCIS, MDDA and SITA. Members welcomed the initiative by GCIS in appointing the Chief Financial Officer (CFO) and SITA the DDGs but emphasised that the vacancies had to be filled before the end of the financial year.

Members indicated that there was need for the entities and Departments to start channelling energies towards digitalising the sector. They indicated that the COVID pandemic had exacerbated the move into the digital age and the entities needed to start coming up with policies that are targeted towards digitalising all government sectors. Projects towards digitalisation such as the centralised e-procurement system by SITA that were stuck in the planning stage needed to move to implementation.

On the SABC issue, Members emphasised that the Committee’s position was clear on that it was opposed to retrenchments. Section 189 of the Labour Relations Act was only going to be implemented as a last resort after all options have been exhausted. Therefore, the Department had to come up with alternative solutions to deal with the problems in the SABC whilst at the same time preventing job losses.

Meeting report

Opening remarks by Chairperson

The Chairperson opened the meeting by indicating that the Portfolio Committee was going to be briefed on the Annual Reports of several government entities.

Given that the first two items on the agenda are issues of national interest, it was prudent that the Committee addresses them. He asked GCIS and MDDA to brief the Committee and emphasised that the presentations were not going to take time as the Committee had already been briefed by the Auditor- General of South Africa (AGSA). The meeting with AGSA had given Committee Members a sense of how the entities were doing.

The Chairperson indicated that Members had the responsibility to keep the meeting on flow. Committee support the work that entities are doing and that is the reason why they need to brief it on work that has been done.

An apology was received on behalf of the Deputy Minister.

Remarks by Deputy Minister Siweya

Ms Thembi Siweya, Deputy Minister in the Presidency, thanked the Committee for the opportunity to present the GCIS and MDDA report. She indicated that the reports to be presented before the Committee were for the 2019/2020 financial year and were based on the performance of the two institutions.

The Deputy Minister noted that there was a presentation by the AG which had taken place the previous day in which GCIS and MDDA received clean audit reports. She said stability, leadership and good governance in GCIS and MDDA assisted the Department to be where it is today.

She highlighted that the Ministry continuously wants to improve and bring back good governance of these institutions especially with GCIS which for some time was not stable and did not have a CEO. She said government wants to ensure that GCIS and MDDA are efficient when it comes to the delivery of their mandates.

She requested that Mr Currin from GCIS and the delegation from MDDA be given an opportunity to lead the Committee through the presentations and speak about what the entities have been able to do and the positive outcomes thereof.

Deputy Minister Siweya noted that there are areas of improvement that were pointed out by the AG in respect of GCIS and MDDA. She highlighted to the Portfolio Committee that the Ministry was going to ensure that through the action plans, the entities work hard towards the result and improve moving forward.

She stated that the entities had to revise their Annual Performance Plans (APPs) for 2020/2021 due to budgetary cuts that were caused by the COVID-19 pandemic.

The Deputy Minister concluded by confirming that Members of the Portfolio Committee had been given the presentation reports in time. She noted that the Department has always furnished the Committee with the reports in time and as such the conversation that was about to take place was not necessarily new but a continuation from somewhere.

Government Communications and Information Systems Annual Report 2019/20

Mr Keitu Semakane, Acting Deputy Director-General (DDG): Corporate Services and Chief Director: Human Resources and Mr Michael Currin, Acting DDG: Intergovernmental Coordination and Stakeholder Management, presented the GCIS’s 2019/2020 Annual Report. The following was highlighted from the presentation

95% of performance targets were achieved (41 out 43 targets) and 271 out of 240 radio products and services were provided.

The summary of organisational performance was represented in the form of a graph. The two targets that were not met were from Intergovernmental Coordination and Stakeholder Management. The targets were not achieved due to forums that were cancelled as a result of the COVID-19 pandemic among other reasons.

Overachievements were registered under administration. These overachievements were recorded in targets set for Women at SMS level and People with Disability.

The expenditures per programme and per economic classification were graphically represented. In total, the final budget for GCIS was R438 683 and the final expenditure was R425 567 which is 97% of the total budget.

GCIS received a clean audit outcome from the AG.

[see presentation for details]

Media Development and Diversity Agency Annual Report 2019/20

Ms Zukiswa Potye, Chief Executive Officer (CEO), MDDA, and Mr Yaseen Asmal, Chief Financial Officer (CFO), MDDA, led the Committee through the presentation.

The three year performance trend for the organisation was represented by pie-charts. In the year 2017/2018, MDDA achieved 44% of its targets, in 2018/2019, it achieved 80% and in the 2019/2020 financial year, it achieved 84% signalling an increase in performance.

The performance for 2019/2020 was sub-divided into sub-programme tables indicating organisational performance per programme.

MDDA’s financial statement recorded a total revenue of R113 071 947 and total expenditure of R130 703 947. The recorded surplus for the financial year was R17 683 000.

Multichoice, SABC and E-TV were listed as the major contributors to MDDA broadcast contributions.

MDDA received a clean audit outcome for the 2019/2020 financial year from the AG.

Remarks by the Deputy Minister

Deputy Minister Siweya thanked the presenters for their detailed presentations. She emphasised that MDDA had not amended its APP. A second round of the strategic planning session has been scheduled for 3 December 2020.

She indicated that there was hope to do better for MDDA because the entity appointed four new Board Members for the 2021/2022 financial year upwards of the MTEF planning.

The Chairperson thanked the presenters and the Deputy Minister who was leading the delegation for detailed presentations.

He opened the floor for discussion and engagement on the presentations by GCIS and MDDA.

Discussion

Ms P Faku (ANC) appreciated the presentations and congratulated GCIS for the good work that it is doing as an entity. She indicated that even during the briefing with the AG, it was impressed with the work being done in GCIS. She said the Committee has been consistent in congratulating GCIS although there are areas that need improvement.

Ms Faku appreciated the appointment of the CFO and noted that the CFO who had been appointed is a woman and hoped that she would understand the responsibilities that are in the office of the CFO to ensure that GCIS continues to receive clean audit. The Committee appreciated the emancipation of women.  

Referring to the findings of the AG’s report which said that one of the issues that affect GCIS relate to the filling in of vacancies, Ms Faku pointed out that the finding was important and that all vacancies needed to be filled as a matter of urgency.

She stated that for the targets that had not been achieved during this financial year, the Committee hoped that the targets will be met in the next financial year. She reiterated that GCIS was doing a great job.

Ms Faku noted that MDDA had also received a clean audit and managed to achieve 16/19 targets which was good.

She stated that vacancies in MDDA also needed to be filled.

It seemed as if MDDA had changed their strategy when it comes to research. Regardless, the Committee appreciated the work that Minister Mthembu and Deputy Minister Siweya are doing with MDDA and GCIS. Ms Faku said that the Committee was proud but wanted to see more improvement going forward. She reiterated that even the AG was satisfied with the performance of the two entities.

Ms Faku recalled that in previous meetings, the Committee made recommendations to MDDA. One of the recommendations was that MDDA needed to have the same relationship with the SABC as it has with Multichoice. The CEO of MDDA had assured the Portfolio Committee that there was communication between the MDDA and the SABC. She said that the Committee had full confidence in the newly appointed Board and that it will execute its mandate.

Mr C Mackenzie (DA) congratulated GCIS and MDDA for the clean audits. He said it seemed as if the presentations had been grouped into a class, separating the naughty boys sitting in the corner. MDDA and GCIS were definitely shining in the front role.

Mr Mackenzie stated that the document that he had received from MDDA seemed to be badly formatted and was wondering if that was the formatting for a Macbook or it was the actual formatting of the document. Referring to page 89 of the report where MDDA stated that Brenda Leonard was one of the new Directors, he said the ‘L’ on the name was not capitalised.

He asked both GCIS and MDDA how many reports they were planning on printing this year. He said the Department was that of Communication and Digital Technologies and COVID had also exacerbated the transition into the digital age. Therefore, how much money were the entities going to spend on printing the annual reports?

He referred to points 6.12 and 6.20 on the MDDA annual report which provides for the notes to financial statements. He asked why there was an increase in the cleaning expense from R3 782 to R22 410. He said he was pleased to see a decline of R70 000 in professional services which were presumably outsourced. Raising a question about the professional services, Mr Mackenzie asked that the Portfolio Committee be told what those professional services were for and how long it can expect to see them continuing in the financials.

Mr Mackenzie also noted an increase in MDDA’s refuse expenses from R4 000 to R18 000 and asked why there was such an increase. From the report, there was a record of R5,9 million in other administrative expenses and he asked MDDA to tell the Committee what falls under those administrative costs.

He stated that there the day before the meeting, Committee Members were briefed by the AG and from the presentation, it could be noted that some Government entities had fallen down the trap of fruitless and irregular expenditure. However, there were no irregular expenditures in GCIS and MDDA which is a good thing.

Mr Mackenzie noted that there was a R49 million carry over from the previous financial year broken down into two amounts; R10 million and R39 million. He recalled that during its presentation, MDDA has mentioned condonation and asked the entity to further clarify on how the amounts were going to be condoned by National Treasury.

He congratulated GCIS and MDDA on their annual performance. He said perhaps the performance had a lot to do with the Minister and his Deputy. The Minister is always very polite, very gentle and gracious. When compared to other Ministers, Minister Mthembu is quite a pleasant man.

GCIS printed an economic opportunities booklet.  Mr Mackenzie referred to the part in the report under performance highlights which says that an economic opportunities booklet by GCIS Youth, Environmental Services was printed. Also, there is another that is referred to as the Job Placement Programme. He wanted to know if the two were separate booklets or formed part of the same booklet. He also referred to the part on the Cooperate Incentive Scheme and indicated that he believes that chicken farming was a good opportunity for everybody. However, he wanted GCIS to give more information on all those booklets particularly how many it printed and for what purpose.

Ms P Van Damme (DA) said it was comforting to note that in an era where most state owned entities are struggling, GCIS and MDDA were doing well. As discussed in the last meeting with the AG, a clean audit means entities are managing their money properly.

She indicated that the entities needed to now focus on digitalising government services. The Portfolio Committee is a Committee on Communications and Digital Technologies. However, it often seems as if the digital technologies part of the mandate is often neglected.

She noted that many African countries have taken an opportunity from COVID-19 to learn how to make sure that services are more available online. As such, she was hoping that as a Committee, it would hear more of future centric plans on digitalisation in the next meetings with GCIS and MDDA. If the Department is talking about the fourth industrial revolution (4IR), it should not just be a buzz word but it must be followed with implementation.

Ms Van Damme complimented the entities on spending their money correctly and having clean audit reports. She emphasised on the fact that the focus needed to shift towards digital policies intended at taking the Government to the next level.  She reiterated that the entities have an important role to play towards contributing to the digital economy which has the great potential to create a lot of new employment opportunities.

Ms N Khubheka (ANC) acknowledged the presentations and noted that GCIS has been receiving clean audits for seven successful years which is not something to be taken for granted. She said GCIS has proved to the Committee that there is nothing too difficult to achieve as there has been serious progress within the entity.

She also complimented MDDA for the clean audit report and for the appointment of key vacancies. She congratulated the new CFO on her appointment and stated that the Committee still supports women empowerment.

Ms Khubheka asked if the Committee could have joint interactions with GCIS, MDDA and other entities that the Committee oversees so that MDDA and GCIS could give pointers and transfer skills to the other entities on how they are managing themselves. She said that would lead to the other entities under the watch of the Committee improving towards getting clean audit reports.

The Chairperson thanked the Members for the questions and invited GCIS and MDDA to respond to the questions.

He announced the presence of Minister Stella Ndabeni- Abrahams in the meeting and brought it to everyone’s attention that the Minister had commitments elsewhere and therefore would be released after her engagement with the Committee. He said the Committee appreciated that the Minister could get back to the Members on the matter of SABC which is of interest to the country.

Responses

Deputy Minister Siweya thanked Members for their input. She said she appreciated that the Committee was happy with the entities’ performance and it remains the Department’s intention to do more and improve. The clean audit outcomes must continue.

On the issue of vacancies in GCIS, Deputy Minister Siweya confirmed that the Ministry has been engaged in the process of filling in vacancies for DDG’s and that only one vacancy was left. She highlighted that the Ministry was going to conduct the last interview for the position of a DDG on 23 November 2020 which would mean that all the vacancies within the management of GCIS will be filled. The newly appointed CFO was also part of the briefing thus showing that vacancies were being filled. She emphasised that the Ministry remains committed to realising that the 95% vacancy rate is achieved.

She said GCIS and MDDA would respond on the numbers of print outs they hoped to make for the annual reports. However, if the entities are not sure of the exact number of printouts, she requested that the Department be permitted to submit the responses in writing after due consultations with the entities.

Deputy Minister Siweya indicated that MDDA and GCIS had revised their 2020/2021 APPs due to budgetary cuts caused by the COVID-19 pandemic. The entities had to be creative and luckily managed to revise the APPs.

She requested that the CEO of MDDA briefs the Committee on the plan for digitalisation and ensuring that community media expands in that regard.

She thanked the Committee for its feedback and said the Department endeavoured to work with the Committee without any complaints from it on under performance.

Mr Currin reiterated sincere and humble appreciation for the words expressed by the Committee. He said such feedback keeps the management on their toes and helps in identifying areas of improvement. He assured the Committee that GCIS was going to keep working with diligence.

Mr Currin indicated that GCIS made adaptations, something he was very proud of. GCIS has a dynamic group of ‘young chaps’ as part of the economic cluster team that has turned the content of the cluster work into electronic newsletters. The GCIS economic cluster has thus been developed into an electronic bulletin.

He said the economic opportunities booklet is mainly electronic and there have been two or three additions in 2019 to the economic opportunities booklet. The booklet showcases different places at different times. For instance, when GCIS is doing community property association work and shows how communities can benefit from its schemes, the locals are given good news stories through the booklets.

He highlighted that in the provincial offices, GCIS uses electronic booklets but sometimes prints them when the team is going for outreaches especially in those constituencies that have no access to the electronic version. The District officers go around handing out the booklets which are often 4/5 paged and they are not fancy. GCIS prints the booklets from their photocopier machines hence it is not a big printing exercise.

He said that he would have to go back and draw down with GCIS Provincial officers for the exact figures spent on printing booklets and report back to the Committee. He indicated that GCIS kept a regular audit of printing and that could be availed to the Committee.

Mr Currin said it has been an exciting exercise because it relates to the empowerment of women and the youth. The young team in GCIS came forward to management saying printing was expensive and suggested that the booklets be in electronic copies.

Mr Semakane said that last year, GCIS had printed 1 950  copies of the annual report but given the budget cuts experienced this year, the entity was looking into the availability of funds. From the forecast, GCIS will not be able to print large numbers and will therefore look at what is reasonable to print in light of the budget constraints.

Ms Potye appreciated the sentiments shared by the Committee Members. She said MDDA owed its clean audit to the Minister, who has been described very kindly by the Committee. The Deputy Minister as well has been on the ground working with MDDA at the Commercial Printing House and also when launching new radio stations. She appreciated the leadership from the Ministry, the leadership of the Board and the staff that came together to ensure that MDDA achieves a clean audit.

She highlighted that MDDA is still at the planning stage on digitalising the sector. MDDA presented on the digitalisation of the sector and the mitigation of Sentech during the previous week. During the presentation, MDDA pointed out that it had a digital migration strategy and highlighted some of the preliminary findings. The strategy was submitted and is no longer a draft. One of the preliminary findings from the strategy pointed to the fact that nearly all stations have some form of social media platform such as Twitter, Facebook, cloud and websites. Some of the websites were listed as per the Committee’s request.

She said MDDA went to the August 2020 Consultative Conference on Sustainability Research and took a conscious decision to say, the slogan for the sector will be, ‘Building a Resilient and Future Forward Sector.’ MDDA has met with independent media that have a wing called Volt Africa. The independent media agreed that MDDA could send its digital team that will be responsible for digitalising the sector to Volt Africa for understudy.

She indicated that MDDA needed space to interact with the Digital Migration Strategy first then be allowed back to the Committee with more solid interventions and more solid plans on how the entity will move forward with digitalisation.

Ms Potye highlighted that MDDA had a preliminary agreement with Multichoice to include all radio stations on Multichoice’s DSTV audio bouquet. MDDA has also interacted with the SABC on its Digital Terrestrial Television (DDT) Multiplex platform and Sentech on its satellite audio channel. Sentech confirmed that it has a satellite audio channel and once the discussions are completed and the MDDA Board has ventilated on those issues, the Committee will be given feedback on the developments.

She said she was not sure what the problem was with the document formatting, however, MDDA tried making the document lighter so it can be sent via email and that could have led to the problems with formatting that had been raised by Members.

She pointed out that MDDA intended on printing 200 Annual Reports mainly for stakeholders such as funders and potential funders. Normally, MDDA would have held an annual event in which it accounts back to the commercial funders and also invite potential funders.

Ms Potye highlighted that MDDA was working on a funding strategy which will lead to a fundraising plan. Again, the Minister offered to assist MDDA where he can and the entity is hoping to tap into foreign donations that are provided for in the governing Act.

Mr Asmal said the changes in cleaning and refuse services were as a result of the improvements that were made in the current financial year in terms of reporting. Where the numbers were cumulatively lump, MDDA decided to disclose the figures separately hence the increase.

He said the professional services costs include costs of when MDDA outsourced certain expert services for which the entity does not have sufficient capacity and any intention of increasing capacity because of the nature of the work which is often once off. These services include legal costs. He stated that from the CEO’s presentation, MDDA had one legal matter which was dealt with and the cost accumulated as professional services costs.  

He indicated that the R5,9 million for other administrative costs covered expenses such as travelling costs and rentals. The travelling costs in MDDA are quite expensive because the team constantly travels to provinces looking into projects and doing evaluations. That has led to the bigger costs included in the amount.

Mr Asmal highlighted that the application for condonation was approved by the Board and it was sent to the National Treasury and MDDA is currently waiting for further information from Treasury. Follow ups have been made and MDDA is still waiting for feedback on whether the applications for condonations were accepted or not by Treasury.

The Chairperson thanked GCIS and MDDA for the responses. He said the Committee appreciates the plans in place to improve performance on areas where there is slow or no achievement due to the challenges of the time. The Portfolio Committee is confident that both entities will be able to come back to the Committee on those issues of the digitalisation strategy and research especially with MDDA and the sustainability of the Media Committee.

He urged MDDA and GCIS to keep up the good work.

Department of Communications and Digital Technologies

The Chairperson indicated that although an apology had been presented to the Committee on behalf of the Deputy Minister of Communications, the Committee was hoping that the Minister will be able to brief the Committee on the SABC matter. After the Minister’s address, SITA will then have the opportunity to present on its Annual Report.

Mr Semakane stated that he wanted to conclude by saying that when the presentation was made on behalf of GCIS, it had not mentioned that the entity had not done much in terms of revising it APP.  GCIS revised its targets downwards in three areas due to budgetary cuts. Otherwise, all the activities and undertakings by the entity are still there.

The Chairperson thanked Mr Semakane for the remarks and indicated that Members had noted that when the Committee was having engagements with GCIS and that is why the matter was not pressed further. He stated that MDDA had also repeated same in terms of the outliers for MTEF.

The Chairperson then invited the Minister to address the Committee.

Address by Minister Ndabeni-Abrahams on the SABC issue

Minister of Communications and Digital Technologies, Ms Stella Ndabeni- Abrahams, thanked the Committee for the opportunity to brief them on the issues relating to the SABC.

She indicated that she was going to give a brief on what was seen happening on television (TV). On the 17 November 2020, the Ministry as the shareholder representative, convened a meeting with the Board of SABC which was prompted by the developments witnessed on TV which the Ministry perceives to be a crisis situation. Together with the Deputy Minister to whom SABC is delegated in the Ministry, the shareholder representative gave the SABC Board an opportunity to explain what was happening against the background of the turnaround strategy currently unfolding at the SABC.  

Minister Ndabeni- Abrahams said in the earlier interactions with the SABC Board, the Ministry implored the Board to prioritise managing payee related matters in the implementation of the turnaround strategy especially with the possible retrenchments. The Ministry advised that the SABC Board should strictly adhere to the provisions of the Labour Relations Act and other prescripts. The SABC was further advised to conduct skill audits to enable the Board to deal with the specifics of the individuals and find acceptable fall back options and also that the Board should be meticulously procedural and uphold fairness all the way.

She said resorting to s189 of the Labour Relations Act should be the last resort after all options have been explored in order to avoid job losses. The G-tech staff optimisation has similar recommendations on handling staff related matters during the implementation of the turnaround strategy.

Minister Ndabeni- Abrahams indicated that whilst the Ministry recognises that the SABC has a legal standing, the shareholding has the responsibility to make certain interventions within the confines of the law. When the SABC was faced with a financial crisis, the Ministry intervened and managed to secure a bail out. It was in the same spirit that the Ministry deemed it necessary to offer suggestions to the Board. However, both the Department and G-tech’s views were not taken into consideration. After the engagements facilitated by the Commission for Conciliation, Mediation and Arbitration (CCMA) failed to yield immediate results, the Board moved in speed to evoke the Labour Relations Act,  in particular s189 which has widened the gap between  the SABC and the Trade Union.

She highlighted that every Board Member was afforded an opportunity to express their views on the situation at the SABC.  After hours of discussion, what became clear is that the Board is split into two on how to manage the situation. One group is of the view that s189 should be implemented and the other group is of the view that the Board should explore all other options before invoking s189. Because it goes with adverse effects on the workers at a time when the whole country is undergoing an economic strain exacerbated by COVID-19, the differences between the two groups reduced the hope that on its own the SABC Board is capable of resolving the problems within the company.

She said the Ministry is of the view that there is no other way. A negotiated settlement of the matter should take place if necessary but it will take the involvement of government and multi stakeholder joint effort to solve the SABC problem which is a vital and strategic entity that operates directly in the public terrain.

The Minister indicated that she had met in the morning with the Minister responsible for employment and labour and the two Ministers will be engaging further with those affected. She said it is in this context that she implores the Portfolio Committee, collectively to put its weight behind finding solutions to the SABC crisis.

She reiterated that the differences shown by the Board amongst themselves is really a problem and therefore does not inspire confidence on the fact that the Board is able to provide strategic leadership on its own.

The Minister appealed to the Committee to come up with solutions to help the SABC to be able to deal with the crisis it is faced with.

The Chairperson thanked the Minister for the report and opened the floor for discussion. He reminded the Committee Members that the Minister needed to be excused shortly as she had other urgent business to attend to. The Portfolio Committee was going to engage with the SABC in the evening.

Discussion

Ms Faku said she appreciated the report from the Minister. What the nation saw on TV was bad and she appreciated the effort made by the Minister to meet with the SABC Board and the effort that had been taken to ensure that the Committee meets with the SABC Board.

What had happened on TV should never happen as there must be stability in government entities. She said even the public and social media were not happy with what transpired and reaffirmed the Committee’s position on the issue of retrenchment that it is opposed to retrenchments. 

Ms Van Damme echoed that the SABC situation was indeed disturbing.

She said she sympathises greatly with the SABC staff that lived through years of trauma, firstly under terrorism by the Hlaudi era and secondly through the reality that they might lose their jobs.  She indicated that she fully appreciates that and feels the pain as no one can celebrate losing their job. She reaffirmed that the Committee was going to engage with the SABC later and ventilate the issues.

Ms Van Damme said that she was pleased with the manner in which the Minister had responded to the issue. The Minister had responded in a manner that does not seek to overstep the mandate of the Minister vis-à-vis that of SABC. The independence of the SABC from the Minister is being adhered to which is important as there is a need to avoid playing politics.

The Department and the Minister consistently speak of other options, what are those options? From the address, it felt like it is being left to Parliament to consider what those options are. The Minister’s role as it relates to the Department is to draw policies. So, the Committee cannot keep being told about other options, the options must be laid out. What other options does the Ministry have apart from the pre-condition from National Treasury for the bail-out which says staff numbers should be reduced? The reduction of staff numbers was a recommendation of the SABC inquiry and it is an undisputed fact that the SABC staff is bloated.

She noted that it was unfortunate that the process of people losing their jobs had to happen. However, it is not something that is entirely unique to the SABC. The retrenchment process had happened to Prime Media and other media houses.

Ms Van Damme indicated that she wanted to hear solutions and not problems from the Minister.  If not retrenchment what is the Minister going to do? She highlighted that the SABC had said it needed R700 million if it is to keep its staff.  She asked the following questions, is that R700 million going to be provided as an alternative solution? Speaking broadly about the SABC funding model, there is what is called the unfunded mandate which has been discussed extensively and cannot be ignored because it affects the bottom-line. So what is the solution to the unfunded mandate?

She reiterated that the Minister’s job was to give policy considerations and the Committee needed policy from the Minister. Members of the Committee committed and engaged extensively with the unions, SABC staff and the SABC Board. The Committee is further committed to sitting down with these stakeholders and talking about this further but what is missing is a solution from the Minister.

She indicated that the role of the Committee in the SABC matter relates to oversight. The Committee as Parliament cannot tell the SABC how to resolve the matter. As Parliament, Committee Members have tried mediating what is a complex situation and in terms of the law, the bodies that conduct mediation are the CCMA and the Labour Court. As a result, it is not for Parliament to have a final say on whether the processes are right or wrong.  The Committee cannot sit in a meeting and decide who is right and who is wrong. Its role is to listen to both sides and conduct oversight.

She highlighted that the Committee should consider hearing from the CCMA on its position as there are different sides to the story. That would ensure that the role of Parliament is not misunderstood in the matter involving the SABC.

Ms Van Damme said the fact that the Board is currently split poses a huge challenge because once there is acrimony in the Board, there start to be resignations which will send the whole process back to square one. Hence she wanted to know what the numbers of disagreement were.

She stated that in every organisation there is a likelihood of dissenting arguments. Even when the Portfolio Committee sits, it does not always agree on all issues but ultimately when Members cannot reach a consensus, everything goes down to a vote.  

She asked if a vote had taken place in relation to s189 of the Labour Relations Act and if so, what the number of dissention was. She reiterated that if there is no consensus, then the decision of the majority has to prevail. There should not be a situation in which the Portfolio Committee is expected to intervene and manage the SABC Board as that is not the role of the Committee. The Committee should not be in a position to suggest that since three people disagreed, then the majority that agreed does not matter.

Ms Van Damme repeated her questions, what is the alternative solution that is spoken of? Where is the R700 million going to come from? Where is the money going to come from for the unfunded mandate?

She recalled that the Minister had indicated that she had negotiated a settlement that involved the Government. That process would be against the law. There is a clear process where the independence of the Board is sought. So, if there is to be a negotiated settlement, the CCMA and the Labour Court should take the mandate to ensure that there is no political involvement. Parliament cannot play politics especially on this matter because it has a lot to do with people’s livelihoods, jobs and a public broadcaster that has to stay afloat.

She emphasised that the Committee did not want a situation in a year or two in which it is faced with having to bail-out the SABC again. If that situation arises, the Committee will have to say no.

She concluded by asking the Minister to respond to her engagement with humility, in a manner that is not flippant or seeks to ridicule as she had been polite in her engagement with the Minister.

Ms Khubheka emphasised that the Chairperson had put it clear that the Committee was to meet with the SABC in the evening. She confirmed that the Committee’s position on retrenchment is firm in that it did not want retrenchments at the SABC.

She pointed out that the Committee was tired of hearing the stories about Hlaudi. The Committee appointed people who have taken an oath to assist towards progress in the SABC and those people needed to be given a chance to put their skills to use for the success of.

She thanked the Minister for meeting with the SABC Board in an attempt to resolve the matter. She indicated that if one has no ubuntu, they will respond to the intervention how they want to but Ubuntu is important.

She indicated that more would be discussed in the evening meeting with the SABC Board.

Mr V Pambo (EFF) highlighted that he differed from other Committee Members in that he was not going to sing praises for the Minister because the Minister has been extremely reactionary as far as the SABC matter is concerned.

He said the meeting that the Minister had held with the SABC Board the previous day was supposed to have been held a long time ago. However, the Minister is absent and what happened on national TV was an embarrassment to the country and the continent. He stated that the SABC situation cannot continue. It cannot be speaking of retrenchment because it is a national asset and that would be insulating the country during such a time when most people are losing their jobs.

He stated that the SABC cannot be retrenching people and the retraction of the retrenchment letters by the Group Executive (GE) should be made permanent.

He said although the other Members were asking of other options, in his view, there were no other options. The only option available is for the retraction of the letters to be made permanent.

Mr Pambo said the Committee must come resolute and say that whatever happens, people will not lose their jobs. The Committee cannot sit and discuss the number of people that must be retrenched. It is not a good thing to do and the Committee has to ensure that every job within the SABC is cushioned including that of a cleaner.

He emphasised that the Minister is always absent, stating that even as the Committee is sitting, the Minister is already standing by the door ready to leave and every time Members have had to speak under duress because she has to leave. That is the conduct from the Minister that the Portfolio Committee has been forced to accept.

He said that the Minister was supposed to have been working with the SABC from the onset not for her to appear before the Committee now that there is a crisis. If the Minister had been working with the SABC, she could have seen the crisis before it happened and there was not going to be any need for an urgent meeting.

He said there was no vision in the Minister. The Minister is not visionary but is reactionary and she saw the SABC crisis on TV like the rest of the country. Mr Pambo was of the view that the Minister was as good as any other layman in the country who has no idea of what is happening within the SABC. He then asked the following questions, so why do we keep her? Why does the government keep this ‘bloody Minister’, she is ‘useless’?

Mr Pambo indicated that the Committee was supposed to be clear on the position that the Minister must go.

Ms Faku raised a point of order. She said Members should not call each other names; rather they should try and resolve the matter before the Committee.

The point of order was noted and Mr Pambo retracted his statements.

Mr Pambo also apologised to the Minister for calling her names and said that he was just agitated by the situation at the SABC.

He indicated that the Committee must work towards preserving jobs. If jobs are shed in the SABC, the people who are going to be affected are at least taking care of no less than three other people. Therefore, the Committee needed to be sensitive when talking about retrenchments.

He again apologised for calling the Minister names and said that in summary, there was no other option for the Committee to take. Rather, the only option available was that jobs be preserved in the SABC. He said the EFF was not in support of the retrenchment process.  

Mr Pambo said if there is really a turnaround strategy in the SABC, then all the employees must be retained. Retrenchment of employees in the SABC would make Hlaudi appear a hero and if the newly elected Board is something to speak of, then it should ensure that all employees are retained. That would show that the Board is working towards the success of the entity.

He indicated that the SABC did not need to make any profit. Rather, it needs to be self-sustaining hence it should not be talking of retrenching its workers. The situation with the SABC is not about money. It is about keeping the entity afloat which means keeping the employees and also breaking even.

Mr L Molala (ANC) emphasised that the Committee has been meeting with the SABC for a very long time and at some point the Committee made clear its position regarding s189 of the Labour Relations Act.  The Committee’s position was that it is not in support of retrenchments and if need arises, at an extreme level, then s189 would be evoked but as a last resort.

He recalled that during previous interactions, the Committee had indicated that the SABC had not followed processes. It had written letters in terms of s189 before the CCMA and the Committee pleaded with the SABC Board to retract and follow due processes.

He said he hoped that people were not going to misinterpret the Committee’s actions as interference with the SABC Board. The Committee never interfered with the Board but it just made its position clear on retrenchments. 

He indicated that the Minister in her address had not said that she has a solution. She was giving the Committee a report back of the meeting held with the SABC Board. As such, the Committee’s duty was to hear the report and not put the Minister on the spotlight as if the mandate is to discuss the Minister.

Mr Molala said that there is instability at the SABC. The manager who was presenting the letters of retrenchments on TV retracted in the morning and the SABC had also issued a statement saying it is continuing with retrenchments. It was clear that even at management level, the SABC team was not speaking the same language. He then asked how the Committee would do its oversight.

The Committee has a responsibility to give the people of South Africa its position regarding the SABC situation. The Committee cannot run away from that responsibility and even if Members decide to do it along political party lines, it would not help the situation. The Committee therefore has to sit with the SABC and get a situation analysis from the Board.

He said the Committee cannot sit when Rome is burning saying the Committee does not want to interfere. He reiterated that the Committee was not interfering with the Board but was merely expressing its view. The SABC Board was not being forced to take any decision but the Committee was making it clear that it is opposed to retrenchment.

Mr Molala stated that the reason why the Committee wanted the report from the Minister is because she was doing her work as a shareholder representative. The Minister did a fact finding mission and the result was that the SABC Board is divided which is very sensitive. He said if the Board is divided, then the Committee needs to step in and see how it can help.

He urged Parliament to be more united beyond political lines and present a united front during the evening meeting with the SABC.

He said the general sentiment he was getting during the meeting was that the majority of parties except the DA were against retrenchment. The position of the DA was not very clear as Members were saying that the SABC staff is bloated.

Ms Van Damme raised a point of order. She said the DA’s position on retrenchment was being misrepresented. She reiterated that she had said in her earlier engagement that there was a need for other solutions if retrenchment is off the table. She repeated her question, what are the solutions?

The Chairperson clarified the point of order. He said the DA was not against retrenchment. The Members were saying if there are there are alternatives to be looked at, what are those alternative solutions to retrenchment? 

Mr Molala thanked the Chairperson for the clarity and indicated that the newly elected Board of the SABC had a responsibility and there was no need to keep mentioning Hlaudi and everyone from the past.

 He said what is key is establishing what the newly elected Board is doing to stabilise the situation at the SABC. If the Board has capacity, what is it doing? It must demonstrate that. The Committee cannot be managing a crisis forever.

He indicated that it was worrisome that the situation in the SABC was arising after the Auditor General’s report which said that the SABC alone contributed 32% of the R358 million of the regular expenditure in the whole communications sector.

He highlighted that the Committee needed to have a discussion, if possible, before the meeting with the SABC so that each party could table its proposal on the SABC issue.

Mr Molala said it seems as if the SABC has already rejected the Committee’s position which is that retrenchment must be the last resort. Members of the Committee have worked in public service and they know how retrenchment goes. The SABC said it advertised for posts and all employees must re-apply. That is not placement.

He highlighted that if an entity is restructuring, the first thing to be done before retrenching people is to place people. After that, the entity has to do a skills audit, checking who is qualified, who has experience, and then place people. It is only after this process that the positions that would have been regarded as redundant can be terminated.  However, in the case of the SABC, retrenchment is the first thing on the table. Every time the SABC Executive meets with the CCMA it is first retrenchment and after retrenchment people can apply. It is thus a vice versa process.

He concluded by saying that the discussion was to continue further during the evening meeting but the Committee’s position was that it is opposed to retrenchment and could only be done as a last resort.

Mr Mackenzie indicated that he wanted to emphasise that the Committee sees retrenchment as the last resort. From his understanding, the Committee was very concerned about the employees at the SABC losing their jobs and the families on the line.

Responses from the Minister

Minister Ndabeni- Abraham thanked the Chairperson and Members for their questions and statements.

She said that the Department was going to present more detail on the unfunded mandate during the evening meeting. If the Committee prefers, it could give the Department more time to talk about the work that has been done during that meeting as the Deputy Minister will be present. The Deputy Minister is the one who is delegated to the SABC and has been leading all Department engagements with the SABC.

The Minister said that although some Members say that she has been absent in all meetings, the Ministry was always fully represented as the Deputy Minister who has mandate, as per the delegations within the Executive framework, would always attend.

She indicated that the Department would speak more on the options during the evening meeting.

Minister Ndabeni- Abrahams emphasised that in the report, she had not said there are option rather she said that the Department had implored the SABC Board and its Management to look into other options. She said she also invited Parliament, the appointing authority, to make sure that the Committee can provide some suggestions to the Board. Inasmuch as the Ministry is aware of what is expected of the public broadcaster, the Act is very clear on the fact that Parliament or the National Assembly is empowered to intervene in matters of the public broadcaster. It is on that basis that the request to the Portfolio Committee was made for solutions to best solve the SABC issue.

She stated that she could not count numbers in terms of the disagreements in the SABC Board, as she did not want to single out people, but when the evening meeting takes place, the Committee could do the counting for itself for the numbers within the divisions.

The Minister indicated that a negotiated settlement that involves government can never be illegal. The Department of Communication is responsible for policy, the Department of Employment and Labour is responsible for all labour and employment related matters, the Department of Finance and Treasury is responsible for the allocation of budgets. Therefore, these Departments have a responsibility and a role to play in matters facing the country, especially with the public broadcaster. The SABC belongs to all the Departments and they are responsible for it.  

She said the settlement can never be illegal in whatever law because there are responsibilities in Government that are aligned and allocated to specific departments.  Those departments must be on board as to how they can meet each other half way in order to attend to the crisis. The identified departments have to come up with solutions having a full appreciation of the challenges in the SABC and the impact of people losing their jobs at such an opportune time.  Getting rid of people only consumes money because those retrenched people will be dumped to social development. It is still the state that foots that bill.

She stated that the Department was asking that everyone looks into the entire ecosystem when coming up with suggestions for interventions.

The Minister highlighted that the Deputy Minister was going to present options that have been proposed by the Department in the evening meeting. That would be done with the understanding that the Government is a caring government that cannot just take things up and say the law has been established and therefore the Department cannot say anything.  The Department has to intervene when needs require and in this instance, the crisis at hand requires all entities to come together and not politic such a sensitive matter.

She indicated that government was looking at possible interventions and imploring those who have been delegated the authority to carry out the mandate as defined in the law, that is the administration to look at other alternatives.

The Minister said if regard is to be given to the conditions of the turnaround strategy; a lot of the conditions have not been met. Retrenchment is not just about the law. It also has to be aligned with organisational realities such as timing and revenue generations.  It also has to be aligned with strategies that are put in place by those mandated to do so in the confines of the law.  Even if the process is to be followed to the letter, although in the case of the SABC it is disputable that the process was followed, it does not matter if it is one person or two. The fact that there is a dissenting voice unfortunately as a shareholder representative, the Department has to take that into consideration. 

She stated that it has been proven that majority does not always mean that it is right. The country is at the Zondo Commission because of the decisions that were taken by the majority. Therefore, as a responsible Government and Parliament there is a need to look into all the finer details until there is satisfaction that there is no other corner one can possibly get into. So that no one will say ABC was not given regard to.

She emphasised that the Department was imploring Parliament to work with it in identifying those that are responsible and have the authority delegated to it by the law.

Minister Ndabeni- Abrahams highlighted that the recommendations by G-Tech were not followed. If regard is given also to other areas in terms of revenue generations, they were also not met. The Department was not blaming anyone because there is an understanding as to why the recommendations have not been fulfilled. As a shareholder, the Department was again committing itself to doing everything to ensure that the SABC is assisted.

She indicated that a number of issues such as the identification of media assets for sale could have contributed to minimising the impact of the SABC crisis. However, the Department is not tied up because of those issues. The Department understands that at times, challenges do arise and they need honest engagement. As such, there is a need to engage with the ones that are affected and to come up with clear strategies exploring all avenues and bringing in parties that have the potential to resolve the challenge and minimise the impact of those resolutions.

The Minister stated that the Department has been clear on the issue of retrenchment since 2018 which then becomes difficult to understand when Members say that “the Minister is not being clear”. The Portfolio Committee has also been clear on its view, which is why the Department under the leadership of the Deputy Minister and the Committee have reached out to other entities that have a role to play in ensuring that the challenges at the SABC are minimised.

She said the government is not only a caring government but it is also a listening one. That is why it takes long for the Minister to meet with the Board because within the confines of the law, the Minister must be able to give the Board and management space to satisfy themselves. The Department must then come on board to look at the areas that may have a negative impact on the policy outcomes and the socioeconomic impact that is driven through the entities in government. That is why the Department has been involved and has raised concerns as the shareholder representative.

The Minister indicated that she welcomed views from Members that she ‘is useless’ even though they were retracted. She said it was not up to her to tell Members how to think as it was the Members’ understanding. However, people should learn and listen so as to understand the space because when Members say the Minister must therefore tell the SABC what to do, that goes against the same law that Members preside over as representatives of Parliament.

Mr Pambo raised a point of order. He said that he had not retracted that the Minister ‘is useless’. He retracted calling the Minister names and as for being useless, he could repeat that.

The Minister thanked the Member for the point of order. She indicated that in the Member’s usefulness, the Member was to try and be familiar with the responsibilities of the Executive and those of Parliament in relation to the entities that have been established.

She indicated that not everything is solved through rhetoric and Members of Parliament are expected to rise to the occasion, provide solutions and advice to the people of South Africa and to the SABC Board members.

In conclusion, the Minister reiterated that the SABC matter was going to be deliberated on more during the evening meeting.

She urged the Chairperson to ensure that during the evening meeting, Members of Parliament are not called names. She indicated that she was an honourable Member like other Members in the meeting and demanded the same respect that the Members demanded from her.

She reiterated that the situation required all Members to come up with a solution. The Department has implored the Board to relook and identify other options. That was a suggestion that the Department had to bring to Committee Members as people that can intervene. The Department as a policy maker and shareholder representative cannot be a bystander on the business of the SABC. That is why even though the SABC Board as independent as it is, it reports to Parliament and cannot go and get money from Treasury without the Department.

The Minister highlighted that the Department was not going to plead for money from Treasury on behalf of the SABC without understanding what it is being used for or if the government is deriving value. She said it is what happened with all the entities at the Zondo Commission now. It also happened previously with the SABC after being given independence.

She indicated that responsibility comes with everything especially if the Department is going to say there must be an allocation from Government meant for the SABC.

The Minister noted that if ever the Department goes before Deputy Chief Justice Zondo or anyone who will be there at that time, she should make sure that in her capacity as Minister, the Deputy Minister of Communication and the Department have done their part in relation to the SABC.

The Chairperson thanked the Minister for staying to respond to the questions. He reminded the Committee Members that there was a meeting with the SABC in the evening. He hoped that the Deputy Minister who has been delegated to work on the SABC matter would also attend the meeting.

The Chairperson indicated that he had briefed Members on why the Committee wanted the Minister to give a report on the SABC issue. He said it was because the Committee was applauding the Deputy Minister as delegated on the work she was doing to interact with the stakeholders.

He stated that the Minister did not have to leave with the impression that there is no recognition from the Committee on the strides being made to find a solution to the SABC problem. Everyone could point to the problem but in the end, there is a need to come up with solutions.

The Chairperson highlighted that the SABC was also going to have the opportunity to brief the Committee so that the Members can get a sense of the discussion that happened between the Minister and the SABC Board from the Board’s perspective.

Ms Van Damme suggested that the meeting with the SABC scheduled for the evening be open to the public as the matter was already in the public domain and was also of public interest. She indicated that the Committee already had a meeting with the entity in which commercially sensitive matters were discussed. Other matters could be shelved and the meeting be opened to the public because the public would want to know what is happening at the SABC.

The Chairperson highlighted that the reason that a closed meeting had been requested was due to the sensitive nature of matters. Whenever the Committee is dealing with matters of public interest, the rules apply and the meeting is held in public.

He reminded the Members that the Minister had indicated that the meeting was going to be open so that the public is made aware of the interventions that are going to be made.

Ms Van Damme stated that she did not want to misunderstand what the Chairperson was saying and asked if the Chairperson was saying that the Committee would be continuing with its discussion of commercial matters and the meeting would be closed.

The Chairperson clarified the point. He said there were matters that were already pending and reminded Members that the Committee had to call off the meeting because of time limitations. It was then resolved that the SABC was to appear again before the Committee to respond to the matters that had been raised.

He indicated that the Committee got an approval that was clear. In terms of the approval, matters identified as being commercially sensitive were supposed to be addressed in a closed door meeting. On the other hand, matters of public interest had to be in an open meeting. He said that was the reason why the Committee wanted the Minister to respond to the questions that had been raised during the meeting.

The Chairperson said when the SABC matter arises, the Committee will have to look at the advice which came from Parliament. The Committee was going to deal with the matter when it gets to the meeting although it is the Committee’s decision to separate matters of commercial sensitivity from those of public interest.

He assured the Members that when the Committee discusses issues of s189 of the Labour Relations Act, the meeting will have to be opened as it is of public interest. Members did not need to worry about the meetings because Parliament has advised legally on those issues.  

He asked that it be noted that he also supports the point of order that was noted of not calling people names.

State Information Technology Agency (SITA) Annual Report 2019/20

Mr Luvuyo Keyise, Executive Caretaker and Administrative Authority, SITA, presented the Annual Report.

SITA played a pivotal role during the election by supporting the integrity of the voters roll. The tabling of the new medium term strategy was delayed due to the country’s election cycle.

2019/2020 was the first year of the implementation of the new digital transformation strategy but there were delays due to financial constraints. SITA still managed to enable government departments to deliver their planned initiatives such as the delivery of an enhanced presidential hotline, provision for secure digital platforms for firearm monitoring and migration of websites to the SITA cloud.

Annual performance information was presented in a graph and it revealed a 60% achievement in meeting targets. Service delivery failed to meet 33,33% of the set targets and financial stability was also 33,33 %.

Challenges associated with performance were not limited to delays in clients signing SLA annexures and accepting proposals; numerous power outages and outstanding payments from clients.

The statement of financial performance revealed that the audited surplus for the year was R51 131 257 and the unaudited surplus was R171 302 746.  The balance sheet reflected the total value of assets to be at R4 190 464 943.

The entity experienced a regression in its audit outcome and achieved qualified with findings opinion.

Discussion

Ms Faku thanked SITA for the presentation. She indicated that the Department needed to strengthen its monetary issues. She said there has been talk about the set of boxes sitting at the Post Office that need to be installed and how that costs a lot of money.

The AG gave the Committee a clear indication that it needed to monitor consequence management and implementation plans.

She emphasised that the Committee needs to strengthen oversight on the issues that the Department has raised because it seems a number of people are not taking things seriously. The Committee had to be strict in monitoring the Department on a quarterly basis so that the Department meets its set targets.

Ms Faku urged Members to give the Department the benefit of doubt that it was going to conclude pending matters.

She noted that the Acting DG has been trying his best but there is need to move forward. If the Department strengthens implementation on the issues that were raised in the AG’s report, then the Department could get a clean audit.

She asked who was going to receive vouchers and how it is going to be done.

She said another problem was on irregular tenders. The AG raised those issues of contracting, in the Department’s action plan and they needed to be addressed.

She stated that SITA has capacity issues and that had been raised by the AG. The Department had to explain why DDG Shelembe had been given new responsibilities. An entity like SITA cannot be having capacity issues. She recognised the appointment of the CFO as a positive step as it was one of the key vacancies that were posing problems for SITA.

Ms Faku appreciated the work done by the caretaker. The entity had a revenue increase of R100 million and an increase from 25% to 60% in meeting annual targets. She said that was a sterling job given that the Department is currently struggling, with some of its entities in need of bail outs.

She indicated that there was a need to appreciate the transformation going on in the Department. The Department reported that it achieved 42% of the initial target from 40%. In the previous year, the Department had achieved only 9% of its targets and there was a great improvement.

She highlighted that there was still an issue regarding finances. Looking at the Department’s overall performance, the huge fall was on finances. Ms Faku hoped that the new CFO starting in December would emphasise on clean governance so that the entity gets a clean audit.

She emphasised that regardless of the challenges at SITA, it was moving in the right direction. There is therefore need for serious consequence management so that the people who steal from Government are held accountable.

Ms Faku asked the Department to explain more on the Eastern Cape issue. She said from a layman’s point of view, it seems that the Department was doing well but from the presentation it seemed there was something wrong with the tender process. As such, the Department had to explain further on that for the benefit of the Committee Members.

Mr Mackenzie said it was a great pleasure to first meet Dr Setumo Mohapi when he was CEO of Sentech. Dr Mohapi led the organisation to clean audits and into a very well run internal organisation that became the pride of the Committee. Dr Mohapi was then moved to SITA to sort out the problems around procurement.  After a couple of years, he left SITA for the private sector and the Committee wishes him well.

He indicated that SITA has two roles; one is to administer and secure government systems and the other is to source out and procure on behalf of the government. He said that was a very clean and precise business model with two areas where SITA really needs to get it right and everything centres on contracts.

He noted that the AG singled out SITA for criticism because it failed. He referred to his earlier analogy of a classroom full of entities and said SITA was in the naughty corner because of its irregular expenditure that runs into hundreds and hundreds of millions of Rands.

He highlighted that there was talk during Dr Mohapi’s time around a centralised electronic procurement system at SITA. He said the system was to help remove sticky fingers from the supply chain, ensure the electronic system is available to all government departments and entities and also that the process of procurement was transparent. He asked for SITA to give the Committee an update on that electronic procurement system. He questioned where SITA was on that.

Mr Mackenzie stated that he imagined the procurement system would have a flag for contract renewal thus solving the issues in which SITA is rolling out contracts without any in place.

He said he saluted the intention to terminate all irregular contracts by 31 March. However, looking at the number of contracts with irregular expenditure, will the process not cause a massive disruption on the services SITA offers to its clients? Also, what steps will SITA take to mitigate that risk?

He referred to page 131 of the Annual Report on doubtful debt movement of R2,869 million. He asked if SITA could tell him what this was, further asking if it could explain what the doubtful debt movement is.

He commended SITA for doing a good job in maintaining an increase in revenue and being able to deliver even during the pandemic. He stated that each time Departments and entities appear before the Committee, he always asks them why their procurement process is not being handled by SITA.

He said he believes government should be buying from SITA but the entity had to strive to be efficient, cost effective and deliver the right equipment at the right place and on time.

He indicated that he was not quite sure that SITA was doing that and it needed to give the Committee some form of assurance.

He noted that SITA seemed to have a fair amount in retained surpluses. He asked if there was any chance of sending that money back to National Treasury or if the entity was going to keep it on hand.

Mr Mackenzie referred SITA to the list of irregular expenditure. He asked if SITA could give the Department a bit more information on the following expenditures at page 107 of the report;

  • item 14 – R45 million relating to a service provider for hardware and maintenance. He asked if SITA could tell the Committee who the service provider was, what is it expected to do because that is a lot of money  and explain what hardware maintenance service is;
  • item 15 – R16 million related to delays in processes;
  • item 19 – R15 million related to software licences which is SITA’s core business;
  • item 20 – R200 million,5 year MSA;
  • item 24 – R400 million;
  • item 27 –R39 million from expired contracts;
  • item 31 –R16 million bursaries,

He noted that it seemed as if all the problems with SITA were linked to contract maintenance and there was need for SITA to provide more information on that.

Ms Khubheka said the Committee was emphasising on the issue of monitoring to the Department. She said the issue of the set of boxes had to be dealt with by March next year as promised. 

She said there was a need for consequence management.

She indicated that the caretaker of SITA was trying hard to push but she was not happy with the pink colour that was reflected on the audit report. The Auditor-General had instructed the Committee Members to be happy only when they see a green colour because that would reflect a clean audit.

She said she hoped that the CFO to be appointed will work hard to sustain and push on the entity’s financial statement because that is where the key challenges are.

She highlighted that SITA was still facing challenges with its internal controls particularly daily keeping, monthly control, review and monitoring of compliances.

Ms Khubheka stated that irregular expenditure was really worse and the Committee is not impressed. She pointed out that the caretaker promised the Committee during the presentation that SITA was going to try and resolve the challenges before April next year. She implored the other Members of the Committee to give SITA the benefit of doubt on the basis of the assurance that was given by the caretaker.

She indicated that the Committee was expecting improvement especially with accounting, the audit committee and the executive authority of SITA which are seemingly challenging. She stated that when the Committee meets with SITA again, Members will be waiting to see noticeable change and progress.

Responses

Ms Batyi indicated that the Department was going to present before the Committee in the coming week on the challenges the Department was facing with regards to implementation in communities. She said monitoring was happening but it has not been a smooth sail. The presentation was going to extensively deal with the issue of the set of boxes.

She noted that the Department was strengthening implementation and the partnerships with Sentech and the Universal Service and Access Agency of South Africa (USAASA) However, the Department could do better especially with its engagements with communities.

She highlighted that the Department received a legal opinion on the issues of CIP registration in SITA. The opinion stated that SITA requires a minimum of three directors so that it can be fully compliant with the proper structures for purposes of proper governance in terms of the Companies Act. Subsequently, DDG Shelembe was then appointed together with the Executive Caretaker and the Acting CFO.

Ms Batyi stated that the possible question that arises is how then is DDG Shelembe exercising oversight in SITA? She responded to the question saying for the purposes of the Department, the responsible DDG is DDG Mashudu. DDG Mashudu has an IT background as he comes from Transnet and is the one responsible for any SITA related oversight meaning that responsibility was taken off DDG Shelembe.

She indicated that the decision was taken under the background that SITA had to be repurposed into an entity that is responsive. During this period of COVID, the National Assembly said it noted that SITA has been responsive. Therefore, the Department is grateful for the interventions taken and the turnaround strategy.

Ms Batyi indicated that the Department had set up a team to meet with the mayors, councillors and leaders of communities so as to best address the challenges being faced by the Department in those communities.

Mr Keyise said SITA was aware of the problems of irregular contracts and was working on regularising the contracts. He said the Gauteng broadband contract is expiring in November 2021 and SITA has agreed that it will not be extended as the organisation cannot continue with an irregular contract.

He indicated that SITA was going to advertise for another contract which then limits revenue expenditure. Also, SITA wrote to National Treasury asking for assistance in regularising the contracts.  He stated that on Data lines, SITA was closing the contracts and had already published tenders for new contracts for before March 2021.

Mr Keyise said the longest irregular contract was a ten year contract which was signed in 2018/2019 for the management of SITA’s cloud. He highlighted that SITA was writing to National Treasury for advice on how the entity can walk away from the contract without serious financial implication. He said SITA also instructed its legal team to look into the consequences of cancelling the contract earlier without financial implications.

He emphasised that the goal for SITA was to create precedent that all irregular contracts can be set aside without any consequences to the entity.

The Eastern Cape contract is for the procurement of an e-learning system. SITA’s position is that if Government is going to procure the e-learning solution, then it must not be just for the Eastern Cape. It should be implemented across the country without any further financial implication on government.  He stated that the curriculum being studied is the same across the provinces hence there was a need to ensure that the e-learning solution is a universal solution for the benefit of the whole of South Africa.

Mr Keyise stated that the on the issues of vacancy, there were plans put in place by SITA to ensure that the remaining positions are filled in as soon as possible. He said when he started work, the layer just below the Executive was more than 70% vacant and he could confirm that more than 80% of all the vacancies had been filled in. He reiterated that the plan was to ensure that critical positions are filled to ensure that the organisation runs smoothly.

He indicated that when he joined SITA, he briefed the Members on the legal matter that he was taking with regards to the tender for the e-procurement solution that was procured a long time ago. He said SITA has spent more than R200million on the e-procurement solution but there has not been any value for that money. So, the case was still on-going but parallel to the legal processes, SITA is working with the service provider so that the solution be fixed before the end of the financial year. Even if SITA loses the legal case, the solution should still be fixed so that SITA can launch an e-procurement solution for both SITA and its clients.

He confirmed that SITA was working on launching some functions, so that solution can be used by SITA internally by no later than 1 January. He said the intention is that by end of March, there should be an e-procurement solution that can also be used by clients.

Mr Keyise indicated that SITA has already spent more than R200 million for that solution and as a responsible manager, he wanted it to work. Failure to work would mean it was wasteful expenditure. He stated that he needed to run around to everyone who signed for that money so that it is recovered. Everyone who signed for the money in the last three years had to account and Government had to recover the funds.

He highlighted that he understood the concerns that were being raised by Members regarding the backlog at SITA. He stated that when he arrived at SITA, the entity had more than 410 backlog tenders that date back to three years. He informed the Members that the backlog has been reduced to less than 40. He said SITA is currently working on clearing the remaining tenders before the end of the year and also a minimum of at least 60% of the new tenders must be resolved by then.

He told the Committee that more than 45 tenders were waiting to be evaluated by the police. He said he wrote to the Commissioner of Police asking that the Police send people to SITA for contract evaluation. SAPS had to send evaluators because in terms of the law, SITA is not allowed to evaluate any tenders without the majority of the people from the Department asking for that service.

He reiterated that SITA implored the Commissioner of Police to send evaluators because the exercises needed to be completed expeditiously as it’s an irregularity on SITA. SITA cannot do anything because the law stops it from evaluating the tenders without evaluators from the Department that would have asked that the tender be published.

Mr Keyise highlighted that he wrote to all major departments that have tenders with SITA including Defence so that it can start sending evaluators. He informed the Committee that he has been making follow ups on the issue of evaluators during monthly government meetings in which most DGs are present.

The Chairperson thanked the entities for their detailed responses. He indicated that the Committee was looking forward to the quarterly reports so that Members can assess how well the entities would have been responding to the challenges identified.

He said the Portfolio Committee appreciated the work that was put in to ensure that there is an increase in targets that are being met from 25% to 60% in two months.

He asked if Committee Members had any further questions or comments.  

Ms Faku recommended that the Committee needed to consider having a joint meeting with SITA and SAPS focused on the evaluation of tenders. She said the Committee needed to get an update from SAPS on its implementation plan so that there is some movement on the evaluation of tenders.

The Chairperson thanked the Member for the recommendation.  He said that it was worth considering and perhaps that could help in facilitating the processes for those 45 tenders.

He observed that in other Committee meetings, entities always complain about SITA not moving expeditiously on procurement. As such, having a joint meeting was something to look at.  

The Chairperson made the following proposals;

-The SABC meeting be held in parts. He said that during the evening meeting, the SABC was also going to present on its revised corporate plan. As such the Committee was going to make an application to the House Chair that the meeting with the SABC be in parts since both commercially sensitive matters and matters of public interest were going to be discussed.

-USAASA be included in the responses that the Committee needed on the matters raised by Ultra and other complaints raised on how things are being handled at USAASA.

The Chairperson noted that the Committee would be interested in issues relating to broadband, set of boxes and the deposit boxes in the Post Office because of the timelines agreed upon. Any revisions would require the Committee to do thorough oversight which would not be possible given the time constraints. There is a need for the Committee to be able to deal qualitatively with reports that are presented before it.

He suggested that the remaining entities take the Committee through those issues of interest whilst the Committee notes the issues and then breaks afterwards. He indicated that he was not dictating but merely making a proposal before the Committee Members.

Ms Khubheka indicated that she was in support of the proposal. She said the Committee needed to do justice to the remaining entities and the time was insufficient. As such, she proposed that the Committee considers having another session to engage with those remaining entities.

Ms Faku stated that she was in support of the view and implored the entities to understand the crisis the Committee finds itself in, particularly with the SABC issue.

She indicated that the SABC issue had taken more time for the Committee and there was another meeting in the evening.

Ms Faku apologised to the other entities that were yet to present and stated that the Committee could not continue with the meeting.

The Chairperson noted that there was an alternative proposal that had been made that the meeting be rescheduled and the remaining entities would present during the next session. He moved for the adoption of the proposal and it was adopted.

The meeting was adjourned.

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