State Information Technology Agency (SITA) Annual Report: briefing

PUBLIC SERVICE PORTFOLIO COMMITTEE
18 October 2005
STATE INFORMATION TECHNOLOGY AGENCY (SITA) ANNUAL REPORT: BRIEFING

Chairperson: Mr J Gomomo (ANC)

Documents handed out:
State Information Technology Agency (SITA) presentation document [document available here shortly]
State Information Technology Agency (SITA) Annual Report 2005 available at [http://www.sita.co.za]

SUMMARY
The Committee heard a presentation by the SITA Chief Executive Officer, Mr M Msimang on the positive financial performance of the agency, its business performance and corporate governance. Members’ concerns included the profile of contractors that had been procuring work from SITA and the high staff turnover. They wanted to know the impact of SITA of public service delivery and the effects of credit management on SITA affairs. Members also wanted to know the nature of problems being experienced with the MPCCs.

MINUTES

SITA Presentation
Mr Msimang, CEO, proudly announced the audit report was unqualified for a third year in a row. The media attention had focussed on one part of the report, which was the irregular, fruitless and wasteful expenditure. He said the financial performance of the SITA was good compared to the previous year. The SITA would reduce its bloated staff component through natural attrition. The contractors that were procuring work from the SITA were not compliant with the Employment Equity Act. The CEO's presentation focussed on Business Performance, Corporate Governance, materiality and the significance framework. On annual financial statements, he said revenue had increased by 14.5 % compared to the previous financial year. The gross profit increased by 7.8% compared to the previous year. He was pleased with the agency’s performance.

Discussion
Mr M Mzondeki (ANC) asked about the measures taken to retain black employees who were taking severance packages. He enquired about the profile of the contractors that were doing work for the SITA.

Mr Msimang replied that a "good" black woman had been poached by the private sector with the offer of a better salary. The companies that procured work from the SITA would often do the poaching. The profile of the contractors was mostly high-skills, which were denied to Black people by the Apartheid government such as business analysts.

Mr N Gcwabaza (ANC) asked about the impact of SITA on Public Service delivery.

Mr Msimang replied that SITA played a significant role within the public sector. He cited the example of the Department of Home Affairs that was able to register newly born babies and issue them with an Identity Number. The Department of Health had improved its administration tremendously; for instance a person could access patient information using a cell phone.

The Department of Social Development and SITA had developed a database that would link all departments. Thousands of instances of fraud were exposed which involved people who received social benefits fraudulently.

Mr Mzondeki asked how SITA had been affected by credit management.

Mr Msimang replied that the credit rating institutions had held that SITA owed over R100 million to contractors. He admitted that SITA did not always pay on time, but they had enlisted the help of the Auditor General to help sort out the problem.

The Chairperson asked for clarity on outstanding debts. He wanted to know the type of agreements in place to ensure that payments would be made on time.

Mr Msimang replied that there were such agreements which stipulated that payments should be made on time failing which a penalty would be imposed on the defaulter. The SITA would continue to encourage Departments to pay on time.

The Chairperson said that the SA Management Development Institute (SAMDI) almost went bankrupt because of late payments. He asked for clarity on temporary employees.

Mr Msimang replied that when Departments required installation of a particular system it could take up to four months. The installers would then be employed for that period on a contract basis.

The Chairperson said the Government was spending a lot on consultants whereas there were people who were competent enough to do the work.

Mr Msimang replied that some of the consultants were doing excellent work. Sometimes they would do work that was beyond their mandate and would then charge more.

The Chairperson said he doubted the effectiveness of the Gateway project in poor illiterate rural communities. In some communities, the Multi-Purpose Centres (MPCC) and Tele-centres were "white elephants".

Mr Msimang answered that the technology installed in the MPCCs was excellent, but the people that worked there were not properly trained or the communities were not utilising the MPCCs properly.

The Chairperson said that the SITA Annual Report for 2005 was sent to the Committee on 17 September 2005 but officials in Parliament and the Committee only got it on 18 October 2005. Members were not able to interrogate the Report properly due to its late delivery. He would sort out the delays with the relevant authorities. Mr Msimang said he was prepared to come back to answer any further questions Members might have on the report.

The meeting was adjourned.