SA Postbank Limited Amendment Bill: deliberations; SITA, SABC, SAPO, DCDT and USAASA/USAF on material irregularities and action plan to address the AG concerns

This premium content has been made freely available

Communications and Digital Technologies

22 November 2022
Chairperson: Mr B Maneli (ANC)
Share this page:

Meeting Summary


The Committee met virtually with the Department of Communications and Digital Technologies (DCDT) to discuss the material irregularities identified by the Auditor-General of South Africa (AGSA) in the Department and some of its entities, and the action plans to address the AGSA's concerns. The Committee also neared the finish line of its Postbank Amendment Bill process when Members went through the Bill clause by clause.

The Department briefed the Committee on the audit findings, their risk categories, and whether they had been resolved. It provided a breakdown of the findings per entity, the audit action plans, and the fruitless and wasteful expenditure and material irregularities. It assured the Committee that it had been working with the office of the AGSA on the issues raised about the audit findings. As a result, a chief financial officers' forum was established, which reported to the chief executive officer (CEO)/Director-General (DG) forum to ensure that the material irregularities and findings across the portfolio were being addressed. The forum would meet quarterly.

The South African Post Office (SAPO) seemed to have perpetual liquidity challenges, which continued destabilising it. It reported on the closure of 149 of its branches and the matter of the employee medical aid contributions, which were allegedly not paid to the service providers, leaving employees without medical aid cover. The Department clarified this, and said that SAPO did not have any money at all. It operated on a deficit of over R200 million monthly, so it did not have the cash to make medical aid contributions for its staff. The money was not necessarily deducted from their salaries, but it was reflected as such only for accounting purposes, or as an accounting entry. SAPO had already seen losses amounting to over R2 billion in the current financial year, and it would not be spared from such losses even in the next financial year. Management still made a case for financial support for SAPO to save it from sinking.

The State Information Technology Agency's (SITA’s) irregular expenditure had decreased from R820 million incurred during the 2020/21 financial year, to R282 million incurred in the 2021/22 financial year.
At the South African Broadcasting Corporation (SABC), the AGSA had been unable to confirm the completeness of irregular expenditure by alternative means. Consequently, it was unable to determine whether any adjustment was necessary in respect of the irregular expenditure disclosure stated at R2 898 million.
The Universal Service and Access Agency of South Africa's (USAASA’s) irregular expenditure was R16 778 000, most of which was due to lapsed contracts. It had struggled with long-term contractual commitments due to its process of disestablishment. The Universal Service and Access Fund (USAF) had not incurred any irregular expenditure in the current year, but had a cumulative balance up to 31 March 2021 of R63 250 000.
Members were not pleased with the slow rate at which the Department and its entities implemented consequence management. It seemed people were being allowed to get off the hook without any accountability. Members were weary of hearing about the same things yearly, but nothing changed.

The Committee also went through the Postbank Amendment Bill, clause by clause, although the Democratic Alliance objected to this because of time constraints. Members adopted or agreed to the amendments of the clauses unanimously, without any changes. The Committee would commence the next process of the Bill in the next meeting, where the A-List would be presented. 

Meeting report

The Chairperson welcomed everyone present and announced the rules of engagement in the virtual platform. Apologies were noted and the agenda was submitted. The agenda was rearranged, and the Committee would first engage the entities.

Ms D Kohler Barnand (DA) said the consolidated report by the Department seemed to be a summary. The SABC report was 14 pages, but it was now reduced to five slides. She was not comfortable with this process. The Committee should not be looking at summaries, but full presentations.

The Chairperson said that in the presentations from entities, the entity oversight of the Department would usually scrutinise the reports. Members had received the detailed reports, and in the engagement, Members would work based on their notes from those detailed reports. Members would rather focus on salient points than listen to full reports and presentations they would have gone through before the meeting. The entities were not exonerated from answering questions in the detailed presentations.

Ms Nonkqubela Jordan-Dyani, Acting Director-General (DG), Department of Communications and Digital Technologies (DCDT), clarified that these presentations did not replace the presentations that the entities had detailed. Since there were 11 entities, the Department thought it was best to reduce them to focus on the matters highlighted by the Auditor-General of South Africa (AGSA), and other salient matters that Members had raised.

Ms Kohler Barnard said she was uncomfortable because the public could not see the presentations. They could not cut the process short to save time. It did not do the process justice.

The Chairperson said that this approach had been brought up before, and Members had complained that the information was too much to take in one go. It was thus proposed to rather have summarised versions because Members would have gone through the presentations before the meeting. The high-level summary would provide a sense of the context in which Members were engaging the presentations for the public. This may be considered and consulted broadly. If Members processed the information that came before them, they should be able to engage with the entities based on the detailed information submitted before the meeting.

DCDT briefing on Audit Action Plan

Ms Jordan-Dyani began with a briefing on the Department's performance management, saying that three targets were not resolved. These were related to a misalignment between the estimated national expenditure and the annual performance plan (APP), where the critical priorities were not included in the APP; a reported achievement that was not supported by an accurate and complete listing relating to the analogue switch-off. Under human resources (HR) there were four findings, but three were not resolved while one was partially resolved. The unresolved findings were related to the HR plan, which was not in place. The partly unresolved findings related to the Department’s training policies with Treasury. These would be addressed.

Under information technology (IT), there were three findings, where two were resolved and one partially resolved.

The Department had been working with the office of the AGSA on the issues that had been raised, and a chief financial officers' (CFO's) forum was established that reported to the Chief Executive Officer (CEO)/DG forum to ensure that the material irregularities and findings across the portfolio were being addressed. The forum would be meeting quarterly.

Mr Frik Nieman, CFO, DCDT, took Members through the financial presentation, which covered the audit findings and their risk categories and whether they had been resolved or not; a breakdown of the findings per unit; the audit action plan; fruitless and wasteful expenditure; and material irregularities.

Action plans to address AGSA concerns

Mr Omega Shelembe, Deputy Director-General (DDG): State Owned Entity (SOE) Oversight, presented the material irregularities and action plans. The presentation covered the South African Post Office (SAPO), the State Information Technology Agency (SITA), the Universal Service and Access Agency of South Africa (USAASA) and the South African Broadcasting Corporation (SABC).

The presentation went into detail about each of the above entities regarding material irregularities.

South African Post Office

Losses of R2.4 billion for the 2021/22 financial year, and R2.2 billion for 2022/23.
Implementation of the SAPO strategy would improve financial performance.
Financial assistance was required to settle the historical debt and implement the strategy.
Liquidity challenges resulted in late payments and interest being incurred

State Information Technology Agency

Irregular expenditure had decreased from R820 million incurred during the 2020/21 financial year to R282 million in the 2021/22 financial year. Of this amount, R247 million was continuing irregular expenditure identified in the prior year, mainly relating to access links.

South African Broadcasting Company

The AG was unable to obtain sufficient appropriate audit evidence that the irregular expenditure for the previous years had been completely accounted for, due to the public entity not implementing adequate procedures in the past to identify and record all instances of irregular expenditure.

The AGSA was also unable to confirm the completeness of irregular expenditure by alternative means. Consequently, it was unable to determine whether any adjustment was necessary to the irregular expenditure disclosure stated at R2 898 million.

389 instances under investigation were related to the period from 1 April 2018 to 31 March 2022. 16 supply chain management (SCM) officials had been disciplined from 2020 to date, following the conclusion of the investigations. About 100 of these instances were currently under investigation and a further estimated 200 were planned to be investigated and finalised in the next 12 months.


Irregular expenditure incurred during the financial year amounted to R16 778 000. The majority (96%) of this was due to contracts that had lapsed. USAASA was not able to extend beyond 31 March 2022 due to disestablishment. The opening balance up to 31 March 2021 was R35 336 000.
The Universal Service and Access Fund (Usaf) did not incur any irregular expenditure in the current year but had a cumulative balance up to 31 March 2021 of R63 250 000.
[See the presentation for the rest of the details on root causes and audit action plans]


Ms Kohler Barnard asked what was being done to prevent these matters from happening again at all these entities. They were telling Members how they were cleaning up the issues, but these matters were recurring, dating back a couple of years. The Committee would sit with a similar report again next year unless the employed accountants were trained to be accountants, or the audit function had to be beefed up, amongst others.

She understood that the SABC debt was a tricky matter, but this may be recorded as a historical debt in two- or three years’ time, and it would end up being brushed off. Consequence management was crucial, yet there were issues not yet resolved. Did they relate to irregular, fruitless and wasteful expenditure? How were these cases not picked up while they were ongoing? It seemed it was only up to the AGSA to uncover these illegal activities. What had been put in place to prevent these activities from happening in the future or would they wait again for the AGSA to uncover it? It seemed management was walking around with blinkers on as they did not know what was happening around them. Did consequence management in this situation mean that the money would be clawed back, or that criminal charges would be laid?

The SABC had been functioning without a board for over two months. During the previous board, there had been a reference to bulk investigations, and condonation of all similar types of transgressions, yet they saw a repeat of previous findings. It would be interesting to know if the same staff was repeating the same issues. Who was accountable for the awarding of the R140 million contract? Investigators had to be called in, and the AGSA had been unable to obtain sufficient evidence of the irregular expenditure. This was inexcusable, because it had happened right in front of the CEO, CFO and the board.

With regards to the Post Office, 146 offices have been closed. Was that assisting with the financial situation of SAPO? Was that part of the plan? What had happened to the staff that were working in those offices? What was the plan?

The Hawks had been approached to investigate the issue of medical aid and retirement fund contributions. Yesterday, a post office worker died because he could not be admitted to a nearby private hospital, as the medical aid had been discontinued. These were issues that should have been predicted. Finances were in a catastrophic state at SAPO, but it offered the workers R120 000 to remove themselves from this medical aid, which they had been paying for decades. This figure would not even cover the removal of an appendix in a private hospital. What else was being considered in terms of finances?

How would the removal of the Postbank affect the finances of the Post Office?

The losses amounted to R2.4 billion, and there was much talk about a bailout, but how had the last bailout money been utilised? The Department was attempting to attend to the audit findings of the AGSA, but where was the proactive action to prevent the findings from happening again? Would it be an accurate assertion to say that the Department started looking at fruitless and wasteful expenditure only when the AGSA had mentioned it? Consequence management was always recommended, but it was recommended last year. The focus should be on how it would be prevented again.

In the previous annual report, there was R1.4 billion specifically set aside by the Minister in 1995 for the protection of retired Post Office workers and pensioners, but in the recent annual report, there was no reference to it.

As for the SITA, only a small complement in the finance area was up to date with the generally recognised accounting practice (GRAP) standards. This seemed to be a common problem flagged by the AGSA every year. How were these unqualified staff hired to control finances? Were people employed and trained on the job? Who was held accountable for incorrect calculations of commitment balances? There seemed to be differences in trade receivables – massive issues here.

How was the irregular expenditure of R35 million incurred by USASSA? Had any money been recovered? The Special Investigating Unit (SIU) had been called in, but it was shameful because there was no consequence management by the management who was overseeing these employees and was responsible for these errors. Some matters date back to 2015, but they were seeing issues today described as difficult or complex, and they drag on for years, and in a few years, they would be referred to as historical issues that should be ignored. People needed to be held to account. Today, there was a great appetite to hold people to account, especially after the Zondo Commission.

Who decided to prepare the financial statements using Excel, which came with errors in the audit findings? Had that person been held to account? Who was behind these issues and why were people without relevant qualifications allowed to come in and mess up entities? Was it the same team that handled Usaf’s R1.1 billion budget, but spent only R40 million with zero evidence for the AGSA to work with?

Ms S Xego (ANC) said the portfolio had many qualifications, but the AGSA had afforded chances to rectify, answer and account for some of the qualifications. She observed that the Department was weak in its internal controls. It should not wait for AGSA but should proactively address matters they came up what. What was not prioritised by the Department that was initially included in the annual performance plan?

If these repeat findings were to be avoided, it must develop a corrective plan to spare Members from hearing the same things yearly about the AGSA’s findings. She recommended that the Department and its entities must develop plans to correct all the findings from the previous financial year and that plan must include the recovery of money. This plan must also be presented to the Committee. How does the Department monitor its entities? With weak internal controls, there would always be a report like this.

Mr T Gumbu (ANC) commented on the critical vacant positions. Could the Department elaborate on the structure to be put in place to address these vacant positions?

Mr L Molala (ANC) commented through the chat box (due to connectivity challenges) and asked the Department to explain what consequence management measures would be implemented for the irregular expenditures of the portfolio; the findings on the integration policies and of the two departments; how SITA centralised its record-keeping systems without training the staff to do the job; the timeline for the dis-establishment of USAASA; if the SAPO fraud was caused by a lack of controls in its IT system; and the status of the consequence management report of the SABC employees responsible for the security bid.



Ms Jordan-Dyani replied that the Department had a governance and compliance structure internally and the findings from the AGSA had been reduced from the previous year. It was understood that this was not sufficient, and it spoke to the inadequacy of the internal controls of the Department. There was a consequence management framework, and it was implemented against several staff members. They had gone further to ensure that those who had left the Department were followed up on, such as writing to the relevant entities within the public service, indicating the outstanding case against them and requesting that they take consequence management action against them.

The Department had also been working with the AG. The Minister meets the AG quarterly to have sight of the overall portfolio and address issues related to irregular registry, deviations, historical matters and those concerning SAPO and Postbank. The AG was assisting the Department with the investigations ongoing within the Postbank. Beyond the DG meeting with the CEOs, a CFOs forum was established for the relevant officials in their entities to meet regularly to address the irregular registry and strengthen the internal controls.

The Department was also working and supporting USASSA with some of the investigations, as well as those involving the Post Office and the Postbank, to ensure that they were finalised. The Hawks had been brought in in the case of the Postbank, which would assist in tracing the money or assets that the State may have lost.

As for the structure, she assured Members that the Department was in the process of finalising the positions. It was a recurring matter, but she hoped that advertisements would be issued by the end of this year. It had lifted the moratoriums at Postbank, SITA and Sentech to fill the vacant positions.

Mr Nieman defined irregular expenditure as bypassing procedures or signing something you were not delegated to sign for -- it may not mean a loss of funds. The 49 cases referred to stemmed from the former Department of Communications (DoC) and had to be included in the register of the new Department due to the merger. The investigation had been concluded, and the person was found guilty of circumventing SCM processes. A letter was sent to the new Department requesting it to continue with the consequence management. The DCDT had done all it could to resolve the matter and before the end of the week, a letter of condonation would be sent to Treasury.

As for the SABC, the expenditure was not declared irregular or fruitless -- it was a technical issue that was withdrawn, but several issues remained intact. A solution would be devised to correct the matter through Treasury processes and Cabinet.

Regarding the internal processes of the Department, they had a checklist for each procurement. In the previous financial year, there was no irregular expenditure identified by the internal audit or AGSA, except for the training that happened. Unfortunately, the Department had developed a training policy, but the policy stated that there must be one quotation and then one would go on training. The rationale was that the Department would want a specific service provider for training. When the AGSA came in, it identified that the policy was not in line with SCM processes. It then went back seven years to look at the training that the Department provided. All those training programmes were declared irregular expenditure, leading to the skyrocketing irregular expenditure of R17 million. The Department had requested the labour relations office to assist with investigations into whether anyone must be held liable for the policy.

The short course matter had been corrected. A letter had been received from the Treasury advising the Department on how to deal with this matter going forward.

As for cases in the Department, it had identified and appointed resources to deal with all the irregular, fruitless and wasteful expenditure cases. Many cases are currently under investigation, and a secondary source was also identified to assist with these cases. The Department was also utilising the services of the regulations officer to address the cases quickly.


Ms Yolande van Biljon, Chief Financial Officer, SABC, confirmed that in 2016/17, following the issues raised by the Public Protector’s report on how governance had failed at the SABC, and the Committee’s report, a host of measures, issues and instances were handed over to the SIU for investigation. These investigations were still ongoing, although some of them had been resolved. Some were in court and others were at the Tribunal.

She confirmed that the contract had concluded, expired in July and there was a new service provider for the next five years.

The material irregularity engagement with the AGSA centred on the financial loss between bidders one and two, and bidder two (Mafuku) had been irregularly awarded. There was a R2 million difference in the value. That was also the subject of a court case and would be dealt with once the judgment had been handed down. Similarly, when the judgment was handed down, those indicated as responsible in the SIU investigation would be held to account appropriately.

As for the irregular expenditure, completeness and constituency of the finding, management had opted to first focus on ensuring the completeness of the irregular expenditure register from 1 April 2018. R15 billion worth of transactions needed to be assessed for completeness, and currently, the assessment is 99% complete. It had been able to shift the attention to pre-2018 -- from 2012 to 2013 -- which was likely to be an amount of similar magnitude. In 2016/17, a consultant assessed a large amount of that population, and a report was concluded in this financial year after some legal challenges in the process. The SABC had started the work and implemented measures to confirm the completeness, and the AG was assessing these efforts.

As for consequence management, no process existed in the context of financial misconduct. This was developed about three years ago, and the process towards condonation or write-off was preempted by a determination test and followed by an investigation. Once the investigation was completed, consequence management could be implemented. Repeat offenders would be held accountable.

Concerning the security bid, this matter was subject to an SIU process and was currently in court. The SABC would wait for the judgment. The SIU had indicated that certain officials had done wrong and were part of the court process. The SABC would act in accordance with the outcome of the judgment.


Mr Molatlhegi Kgauwe, Chief Financial Officer, responded that the "blue turtle" related to purchased and not utilised licences. SITA had gone through an arbitration process and was awaiting the award of that process. It was also in the process of instituting disciplinary hearings against officials within the organisation.

The trade zone matter was related to an event that was paid for and did not materialise. It was going through a legal process, which was to recover the funds that were lost, and it had appointed a tracing agent for the officials that had left the organisation to hold them accountable for the losses incurred

When appointing officials, they were qualified enough, but it seemed the issue would be from the continuous development component due to the changing requirements of the relevant accounting standards. This was the main issue, as opposed to the qualifications of officials. The record-keeping that was not centralised and the training currently being provided, were not linked, and they could run parallel. Regarding the centralisation of documentation, for example, the service providers performing the service would be in possession of documents confirming that the service was rendered to the client, but the documents recorded and filed within finance to invoice those customers did not include all the documentation. The project was to ensure that all documents were in one place for the AGSA. The training ensured that they were up to date with the relevant accounting standards and interpreted them as they recorded transactions.

On the repeat findings, SITA noted that the audit had been finalised quite late, so it had three months to come up with an audit action plan, implement it and assess if it yielded the required results. The audit was finalised in August, the audit action plan was compiled, and the implementation process had also kickstarted. SITA had engaged with the AGSA to ensure that the parties were on the same page. It had also engaged with the Treasury to advise on some of the complex areas and procurement matters, and interpretation issues and differences encountered with the AGSA. SITA has since been able to account correctly for what was expected by the AGSA. There would be an improvement in the next audit cycle.

Ms Chwayita Madikizela, Chief Executive Officer, USAASA, said the entity had established working groups with the Department to ensure proper processes were followed during the dissolution. It had included this as a target in the annual performance plan (APP) and was aligned with the Department’s target. The sole reason was to ensure that by 31 March 2023, the transfer of staff and the handover of the USAF Fund to the principal happened. This would occur after the legislation to repeal the Act had taken place, but there had been some delays on the legislative side. The 31 March 2023 target did not look like it would be realised.

On the irregular expenditure, the R35 000 was a legacy issue, and the SIU, National Prosecuting Authority (NPA) and the courts had ruled on it. However, the entity had failed to implement the court ruling and the SIU's reports. The responsible people were no longer in the organisation. The entity was now implementing the court's ruling and the proclamations made by the SIU and NPA. The irregular expenditure was historic, and Treasury would be engaged for condonation.

Mr Sidney Mongala, Chief Financial Officer, USASSA, said the entity had conducted a detailed root cause analysis to establish what had led to the repeat audit findings and had planned accordingly. Much time had been spent dealing with the symptoms, not the root causes, hence the detailed root cause analysis.

When he joined the entity in March, he had found the entity to be using Excel to compile the financial statements and did not know who had taken that decision. Most people who were in finance at the time had already left the organisation. The entity struggled to attract people with the calibre that would take it somewhere within a short period.

Some people were suspended, but the disciplinary cases were still ongoing, leaving a gap in the finance division. People would be appointed temporarily for now.

The irregular expenditure from last year would mostly be contracts that had lapsed, but the entity had managed to get into short-term contracts for now, which avoided payments after contracts had lapsed. One of these was the rental of the current premises, and the landlord was not interested in getting into short-term contracts. Otherwise, once the investigations had been concluded, consequence management would be implemented. Most of the irregular expenditure had already been investigated by the SIU, and some were written off by the board, because most of the people identified to be transgressors had left USASSA.

South African Post Office

Mr Sipho Majombozi, Chairperson of the SAPO board, said there had been a modest improvement in the performance. The audit showed a marked decrease in material irregularities, which was moderately encouraging. A major contributing factor was the outstanding infrastructure, and if this was not addressed, it would further worsen the situation. This was where funding support was required for the implementation of the strategy. SAPO was waiting for a positive outcome for that request.

Ms Nomkhita Mona, CEO, SAPO, said 146 SAPO branches had been closed, but by the end of October, there were still 1 901 operational branches. The closure of those offices was partly forced and planned because some of those offices were in the process of amalgamation with other offices in the proximity. The forced closures resulted from non-payment of rental, and some landlords being unable to keep SAPO operating on their premises any longer.

The employees from those offices had been redeployed to other branches, but this was not going to be sustainable because the cost of employment remained high while the revenue remained significantly low.

Regarding the Post-Retirement Medical Aid (PRMA), this was stopped in 2005, and only those who were already members of that scheme were kept and looked after by SAPO. In the last 11 years, SAPO has covered that group of people at a cost of over R1.3 billion. This medical aid also covered the family and dependents, and in some instances, some people had remarried, and the process would start over, which tended to go on into perpetuity. The amount given to SAPO was not R1.4 billion -- it was R716 million, and SAPO and MediPos shared the amount. SAPO received R457 million as a reserve, and the remainder was given to MediPos as a reserve. In the past 11 years, calculations showed that SAPO had covered the PRMA by over R1.3 billion. As a common practice, SAPO had assessed that liability, approached the pensioners, and offered them a buy-out to remove the liability from SAPO’s books. This process had started and there was a range of payments, as some people had beneficiaries and others did not. It had also outsourced the process to a service provider that did this work with other state-owned enterprises (SOEs). Most members were accepting the buy-out, and the process was underway.

The separation of Postbank had an impact on the SAPO business. The Postbank has been a division of SAPO since its inception. Prior to 1 April 2019, it was still a division and the reporting of SAPO's finances had included the Postbank. On 1 April 2019, the entities were separated and reported separately. This stripped off the assets and liabilities of the bank that were included in the SAPO company financials. It also ensured that the profit of the Postbank was consolidated into the SAPO’s income statement, which no longer happened. At the time of the separation, the Postbank took reserves with it, but management had been asking whose reserves those were anyway. Perhaps SAPO could have got a share of those reserves.

The last bailout was given to SAPO in January 2019, which was R2.9 billion during the tenure of the previous CEO. When she joined SAPO 15 months later, the bank had no money. Perhaps the CFO could shed some light on this.

SAPO had not waited for the AG to raise the issue of fruitless and wasteful expenditure to deal with it. Management brought up the cumulative amount, which stemmed from interest and penalties charged by the creditors, including the landlords. These were the two areas where SAPO had incurred fruitless and wasteful expenditure.

Mr Lenny Govender, CFO, SAPO, said that SAPO had a financial misconduct committee that assessed fruitless and wasteful expenditure, where interest was recorded and had not been paid yet. It was negotiating to waive the interest, but the challenge was paying the capital amount. Consequence management has been implemented in certain cases.

The PMRA cost SAPO R120 million annually, which significantly impacted the cash flow and balance sheet. Hence, the buy-out process was introduced.

On staff salary deductions, there was a significant difference between SAPO’s monthly revenue and expenses. SAPO’s revenue could not cover its total costs, resulting in insufficient funds to settle the full staff liability, which was the salaries, medical aid and pension fund. SAPO did not deduct from employees’ salaries, and ensured that operations kept running and paid certain service providers. Unfortunately, there was insufficient cash to pay the medical aid and the PRMA commitments.

Regarding the bailout in 2019, the R2.9 billion went towards suppliers, creditors and liabilities. Management also had to ensure that operations continued monthly. The bailout also funded the deficit that SAPO had on its books.

In terms of the audit findings, in the past three financial years, the completion of the financial statements had been late, as well as the audit processes. The knock-on effect of those delays also impacted the current financial year, because there was insufficient time to address the significant audit findings. The audit action plan had been developed and was in the process of implementation.

Further discussion
Ms Kohler Barnard said that after the SIU investigation, the relevant people were no longer in USASSA. The SIU had come out with findings, but these people had left the entity and the buck stopped there. Why was USASSA not looking at finding the people who were accountable and holding them accountable? A hard line must be taken on this.

Regarding the PMRA, SAPO had not responded to the issue of the passing of Mr Michael de Bruyn. She told SAPO that she had been receiving calls from people who were refused chemotherapy and were basically told to go home and die. Medical aid was still being deducted from their salaries monthly, but it was not paid. This was fraud, and was simply being ignored by management.

The Chairperson was concerned about the transition plan of the USASSA. This had been raised before by the Committee, and even the set timelines may not be met. The Department needed to speak about this because most of the challenges they had raised were about the uncertainty of the merger or dissolution.

On the implementation of consequence management, this may be submitted in writing to the Committee for Members to know who the people were that were involved in irregularities.

Ms Mona noted that management was saddened by the passing of Mr De Bruyn. SAPO sent its condolences to the family.

Mr Govender said the payment of medical contributions was a sensitive matter, and management was aware of the implications of this matter. The October contribution had not been paid yet from either the employer’s or the employee’s side. SAPO’s cash flow reflected a monthly deficit. Currently, its losses were not funded, and there were no reserves to fund those losses. Unfortunately, monthly certain liabilities could not be paid. Management had been trying to prioritise the payment of salaries because of the impact if they were not paid.

Ms Kohler Barnard said SAPO was still deducting the money from the employees’ salaries, but did not pay it over to the service providers. Employees believed that the contributions were paid, but SAPO was taking those contributions and utilising them elsewhere.

Mr Govender said that staff costs did not generate cash, and SAPO ran a monthly deficit of over R220 million – there was no cash or reserves for this. The deductions on the pay slips were not actual -- they were accounting entries. No money was essentially being deducted or not being paid; it was for accounting purposes, because the entity would have to pay that money in any case.

Mr Mongala clarified the SIU and NPA investigations, saying the key issue was that USASSA had assessed the reports and analysed them to ascertain if there were irregular payments. For example, the reports said there were irregular appointments with certain companies, but the work was done, and the payments made were in line with the work delivered or certified by the relevant people. It was not about the fact that the payments were not commensurate to the work done, but all those payments made would be regarded as irregular because of how the companies were appointed. It was the ex-board that had made those appointments. In its report, the SIU said it did not see any success in going after the ex-board members, but the key issue was to improve the controls. USASSA has since implemented those controls, hence recommending condonations or approval by the board.

Ms Jordan-Dyani concluded the responses by saying that the Department had tabled the APP in May last year, but there had been Cabinet changes in August, which had resulted in the Minister entering into a new performance agreement with the President. The President had delegated certain priorities to the Minister, which related to ensuring the transformation of the sector and fast-tracking the spectrum auction and equally ensuring that there was uptake and usage of local products. The localisation programme was shared between the Department, the Department of Trade, Industry and Competition (DTIC) and the Department of Science and Innovation (DSI). It was also designated as a lead department to issues related to the digitisation of government. The Department was working on this with the Presidency and the Department of Public Service and Administration (DPSA).

There was also a cybersecurity awareness responsibility that was allocated to the Department. It was also requested to fast-track the corporatisation of the Postbank, as the government wanted to aggregate all the banks and ensure there was only one state bank. This required the Department to revise the APP and include these priorities, which the Department had executed.

The vacancy rate was above the 10% threshold, and the AG had also raised this. This was because the Department did not have an organisational structure, which caused capacity constraints in the human resources (HR) environment. The new strategy was being finalised. A transitional plan had been put in place to have an operating model where functional areas were being assessed and the placing of officials in those areas in accordance with the APP while the structure was still being finalised.

Critical vacant positions would soon be filled.

The Department intended to finalise the disestablishment of USASSA. It currently had commitments of over R806 million related to critical contracts – broadcasting digital migration (BDM) and broadband rollout – and these projects would continue because there was a medium term strategic framework (MTSF) allocation. The transition was expected to be smooth, and the officials would be transferred to the Department. The Department was also engaging the landlord for additional space, which would also resolve the short-term contract challenges.. The Department understood that an investment in human capital must be made.

The Department was trying to fast-track the conclusion of the legal cases so that when USASSA closed effectively, all these cases would have been dealt with.

There was a Cabinet memo on the disestablishment of USASSA, which would make it easier to amend the legislation. Section 80 of the Electronic Communications Act (ECA) must be repealed for the disestablishment, but there was also section 87 related to the transfer of Usaf in terms of its management and control back to the Department. Once the Postbank Act had been passed, it was hoped that the management of Usaf would be transferred to the Postbank.

Finalisation of SA Postbank Limited Amendment Bill [B22-2022]

Ms Kohler Barnard suggested that the Committee postpone this exercise to another day because the remaining time would not do it justice, as it was an important piece of legislation.

The Chairperson said there was a general agreement that the Committee needed to go through the Bill clause by clause, but given the time constraints, this may need to be done in the next meeting. Members also needed to understand the next step after going through the Bill clause by clause. The state law advisor would also comment on the A-List and what that meant once the Committee had gone through the Bill line by line. If the clause-by-clause deliberations were agreed to be done in the next meeting, the Committee would not start from scratch -- it would continue from where it left off from this meeting.

Ms Kohler Barnard said there was no time to go through the Bill clause by clause now. Many matters had come up during the joint sitting, but no one knew when they would be addressed. It seemed that this process was being driven from all sorts of angles. She was not pleased with the tiny amount of public input on the Bill. The public may not be aware of this. If the SAPO was saved, the need for this legislation would fall away. Many issues must be considered before finalising this process.

Mr Gumbu said that if the Committee’s time could be extended, the Committee may continue with the clause-by-clause deliberations.

The Chairperson indicated that the Committee had engaged on this matter, and everyone should be of the same understanding regarding what the Committee dealt with. This had also been clarified by the Standing Committee on Finance when it was engaged, which was part of the broader consultation, but not to outsource the responsibility of the Committee as directed by Parliament in the Announcements, Tablings and Committees (ATC).

All concerns had been noted and had also been responded to several times. For the record, the Committee had been moving slowly to ensure that consultations were as wide as possible. After the clause-by-clause exercise, he wanted to know what the next steps required of the process would be.

Ms Yolande van Aswegen, Principal State Law Advisor, said that for the A-List, the Committee would go through the Bill clause by clause and decide which amendments had to be made. Once there was an agreement in the Committee on the proposed amendments, those amendments would be captured in the A-List, which would indicate a line-by-line amendment of various provisions in the Bill. Once the Committee approved the A-List, it would be incorporated into the B-Bill. The A-List could not be compiled unless the Members agreed on the amendments that must be contained in the A-List.

Mr M Basopu (ANC) did not understand why the Committee was not doing the clause-by-clause exercise now.

The Chairperson said the Committee would not have an issue with going through the Bill today if the quorum was met.

After much back and forth and clarifications about the time, Members resolved to go through the Bill clause by clause as the quorum was met.

The Chairperson indicated that the approach was going to be page by page, and it must indicate where amendments had been made and responded to. He would read each provision and clause of the Bill and Members would comment on whether they agreed or not with the amendments or the responses to the amendments by stakeholders. 

Ms Thiloshini Gangen, Parliamentary Legal Advisor, read out the memorandum of the Bill clause by clause.

The Chairperson assumed that Members agreed that the memo would still need to be aligned with the amendments that would have been made and the public participation that had been run from the Committee’s side. The Committee had received submissions from different stakeholders.

He asked if Legal Services or the State Law Advisor would be able to complete the alignment, as well as the A-List Bill by the next meeting.

Ms Gangen informed the Members that her difficulty at this point was her capacity, because she was involved in another Committee meeting tomorrow that she had to prepare for. However, she would try to compile the list by the close of business tomorrow for the State Law Advisor and the Department.

The Chairperson noted the time constraints

Ms Van Aswegen said that there were not a lot of amendments, but the A-List was going to be done from Parliament’s side. Responses from the State Law Adviser (SLA) and the Department would need to be furnished. For some of the proposed amendments, the Department’s input would be required. They would see that the Committee would have the A-List by Thursday.  

The Chairperson appreciated the commitment of the SLA and Legal Services.

SABC board vacancies

The Chairperson said the Committee was still waiting for candidates for the SABC board to be vetted. Some names had been received and others had withdrawn, but these details would be discussed in detail in the sub-committee. The sub-committee would prepare a report, which would be presented to the Committee on the same day.

Committee minutes

The minutes of 15 November were considered and adopted without any corrections.

The meeting was adjourned. 


No related

Download as PDF

You can download this page as a PDF using your browser's print functionality. Click on the "Print" button below and select the "PDF" option under destinations/printers.

See detailed instructions for your browser here.

Share this page: