CORPORATE GOVERNANCE PRESENTATION 26 APRIL 2001

1
Department of CommunicationsAnnual Report
Presentation

• Ms. Lyndall Shope-Mafole
• Director General
• 29 October 2004

2
Outline

• Introduction
• The Director-Generals Overview
• The Ministers Overview
• The Presidential National Commission
• Programme Performance
• Multimedia Business Unit
• Postal Services
• Telecommunications Business Unit
• The Postal Regulator
• Support Services
• PFMA Compliance
• Financial Information
• Implications of the MTBPS

3
Introduction

• Introduction of team DoC
• Historical
• Covers financial period 1 April 03 31 March 04
• Former DG Ngcaba served 10 months of previous
  financial year
• DDG Ntombela- Nzimande served the remaining two
  months and better part of this year
• Minister re-elected in May 2004
• New Portfolio Committee of Communications
• Presentation
• To follow format of annual report
• Portfolio Organizations left out as they will be
  presenting separately

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Mandate

• Old
• To develop,formulate and implement policies for
  the Telecommunications, Postal and Broadcasting
  Services sectors

• New
• To create a favorable information and
  communication technology(ICT) environment that
  ensures that South Africa has the capacity to
  advance its socio-economic development goals, to
  support the renewal of Africa and to create a
  better world

5
Vision

• Old
• Improve the lives of the ordinary South Africans
  whilst contributing to economy growth. Make South
  Africa a knowledge based society and help create
  an information economy.

• New
• To be a global leader in harnessing information
  and communications technologies for
  socio-economic development.

6
Mission

• Old
• To enable ordinary people to have access to
  traditional media and the convenience of
  information technology.

• New
• To enhance the well being of peoples of South
  Africa, the African Continent and the world
  through the creation of a sustainable and an
  enabling information communications technology
  environment. We shall through leveraging our
  world class knowledge, skills and experience
  deliver on our social contracts to the people in
  a professional manner reflective of our national
  value system informed by Batho Pele ethos

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2. DIRECTOR GENERALS OVERVIEW
8
DGs overview

• Information and Communication Technologies must
• Lead the way forward and create the paths along
  which we will push back the frontiers of poverty
• Create a better life not only for the
  disadvantaged communities in our country but for
  the whole of Africa
• Enable us to reach our developmental goals and
  objectives as well as enhancing our participation
  in global information society
• ICTs in the Education system
• Will have meaningful educational impact in
  schools through out South Africa through
  empowerment, skills and development
• Many young people will grow up having been
  exposed to basic desktop PC systems and the
  internet
• Develops a coterie of young people who will grow
  up using the technology, understanding it and
  making careers within the industry

9
DGs overview(Cont)

• Convergence Bill
• Will integrate Information Technology and
  Broadcasting
• Facilitate knowledge transfer and allow people to
  have access to IT and Broadcasting facilities
• Enhance peoples potential to improve
  economically
• BEE Charter
• Developed for the sector
• Allows meaningful entry of the previously
  disadvantaged into our sector
• Restructuring
• Align our business with the vision of Batho- Pele
• Prepare ourselves for the great task of giving
  our people access to the benefits of ICT

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3. MINISTERS OVERVIEW
11
Ministers Overview

• World Summit on the Information Society
• A plan of action to harness the development
  potential of ICT
• To promote the use of information and knowledge
  for the achievement of internationally agreed
  upon development goals
• To provide both choice and affordability of
  services through the managed liberalization of
  all sectors in which we have influence
• Provide effective universal access both for
  people at grassroots level as well as for the
  most sophisticated segments of our society
• Progress made by Department
• Worked closely with the PNC on ISAD in promoting
  corporation, coordination, and joint action by
  all spheres of Government
• The Convergence Bill which was submitted for
  comments in December
• The Digital Migration Strategy, aimed at
  encouraging broadcasters and independent
  producers to convert their production and their
  archived material to digital formats

12
Ministers overview(cont)

• Content and Language Development Strategy aimed
  at encouraging development and growth across
  entire audio-visual content field,including full
  recognition and operational status for all South
  African languages
• Supported the NEPAD e-Africa Commission and its
  programmes
• Progress has been made with regards to the
  Eastern African Sub-Marine Cable System and
  corresponding infrastructure affecting
  land-locked countries
• The Department has been active in fostering
  Public Private Partnerships, a contractual
  arrangement in which a suitable private party
  undertakes a specific departmental project ,
  assumes the associated risk in return for a fee
  related to agreed performance criteria
• Registering the SABC as a public company and
  corporatization of Channel Africa
• Initiative to popularize South Africas
  indigenous languages on the Internet.

13
Ministers overview(cont)

• Plan to corporatise and reposition Post Bank as
  the bank of choice for South Africans who have no
  access to financial services
• Provision of postal addresses and postal retail
  network extending into historically disadvantaged
  communities
• The installation of 200 Pits is proceeding well
• Greater focus on the Nodal points and the
  Multi-Purpose Community Centres
• Progress has been made in the Frequency Spectrum
  Management, Virtual Reality modeling and
  Information Security Programming
• Progress has been made with the Edunet, in
  alliance with the Department of Education
• The imminent completion and implementation of the
  National Public Emergency Call Centre, the
  establishment of the .za Domain Name Authority,
  the creation of both a Cryptography and Critical
  Databases Registry, the establishment of an
  Accreditation Authority and the foundation of the
  Cyber Inspectorate to help combat crime.

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4. THE PRESIDENTIAL NATIONAL COMMISSION(PNC)
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PNC

• Chairpersons Overview
• Engagement in a number of activities both
  nationally and internationally
• Aimed at linking efforts at Provincial level with
  National progress
• ICT climate will be enhanced by the e-strategy
  and the Convergence policy that is being
  developed by the DoC
• Established a National Youth Forum in information
  Society and Development
• Enable our youth to play a pivotal role in
  building an inclusive information society

16
PNC

• Activities in the past year
• Workshops in the three priority areas identified
  by the PIAC,(Education, Health and SMMEs)
  together with the two added by the PNC(Content
  and e-government)
• Provincial consultative Forum in all provinces
  except Gauteng
• Commissioning of Research studies in the area of
  SMMEs, e-Literacy and open source Software
• Coordination of the World Summit on information
  Society(WSIS)

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4. Programme Performance
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Multimedia Business Unit
Key policy Strategy Progress
SABC Restructuring To restructure and corporatise SABC as a public company so as to improve issues of corporate governance, transparency and accountability To transform the SABC from being a broadcaster providing a true Public Broadcasting Service In line with the Broadcasting Act of 1999, SABC was corporatised as a public company on 1st October 2003 The Board of the SABC is currently finalizing the structure of the SABC in accordance with the stipulations of the Broadcasting Act 1999,as amended
19
Multimedia Business Unit
Key policy Strategy Progress
SABC Restructuring To ensure that the SABC delivers a broadcasting service to all South Africans, regardless of location and in the language of their choice. Policies governing operations of the SABC which include issues relating to promotion of South African content programming coverage in the official languages in particular marginalised African indigenous languages and procedures intended to ensure access to broadcasting services by persons with disabilities, were finalised and submitted to ICASA in accordance with the provisions of the law
20
Multimedia Business Unit
Key policy Strategy Progress
Regional Language Television service To create a policy framework for the equal convergence of all currently marginalised South African official languages and the coverage of regional issues. The law mandates the SABC to apply for a license to operate regional language television services in the Republic. The SABC submitted its application to ICASA on the 8th of December 2003 for a license to launch a Regional Language Television Services The SABC proposed the establishment of two Regional Language Television Services, one regional service to focus on the Northern part of the country and the other on the South
21
Multimedia Business Unit
Key policy Strategy Progress
Regional Language Television service The Regional Language Television Service must contain programmes that focuses only in the following official languages IsiZulu, SiSwati, IsiNdebele, IsiXhosa, SeSetho, SeTswana, Sepedi, Tshivhenda,Xitsonga and Afrikaans Government is currently working on a funding model for these regional TV services The rolling out phase of the Regional Television Services is expected to be implemented in the next 2005/06 financial year.
22
Multimedia Business Unit
Key Policy Strategy Progress
Channel Africa To restructure and corporatise Channel Africa into a subsidy of the SABC Ltd. Cabinet approved the corporatisation of Channel Africa as a subsidy of SABC Ltd There are ongoing discussions between the Departments of communications, Foreign Affairs and the Presidency on the issue of a broader mandate for the restructured Channel Africa.
23
Multimedia Business Unit

• Infrastructure Roll out
• To date the Department has equipped thirty-seven
  four year licensed community radio stations and
  six non-broadcasting institutions for training
  purposes
• The Department purchased equipment earmarked for
  allocation to seven stations in Gauteng and
  Western Cape. The community radio stations
  selected are the following
• Kathorus FM
• Voice of Tembisa
• Radio Mamelodi
• Top Stereo
• Well FM
• Valley FM and
• Radio West Coast

24
Multimedia Business Unit

• Signal Distribution Upgrades
• Fourteen community radio stations are
  distributing through the SENTECH platform.
• SENTECH has reduced tariffs for community radio
  stations while the coverage of these stations has
  increased dramatically
• Seven installations were completed in KZN and
  five of the projects are distributing their
  signals through SENTECH.

25
Multimedia Business Unit

• Satellite Communication Network
• Construction of a Satellite Communication Network
• Hosted a workshop with community Radio Stations
  and sector organizations to send a message of an
  enormous need for this infrastructure
• First phase roll out process of the Satellite
  Communications Network to take place in the
  2004/05 financial year

26
Postal Services
Key Policy Strategy Progress
Public Internet Terminals To create a communications infrastructure through which all people will have access to information form Government, Business and Communities To empower citizens to communicate via email or the Internet and to access additional services such as photocopying, fax machines and scanners 700 PITs have been rolled out in Post Offices and Multi Purpose Community Centres,which includes nodal points through out the country A billing system to be introduced selectively and will not apply to the Government sites and e-mails
27
Postal Services
Key Policy Strategy Progress
Citizens Post Office To provide public access to digital communications infrastructure, content and service to all citizens, at the same time ensuring that SAPO is well-positioned to capture a share of the growing e-commerce market. To date 14 CPOs are operating in various parts of the country and ten more will be rolled-out during the next financial year.
28
Postal Services

• Multi-Purpose Community Centres(MPCCs)
• The roll out of the ICT infrastructure to the
  MPCCs is ongoing
• The communications centres have been integrated
  into the broader MPCC initiatives
• Geographic Information System(GIS)
• A GIS postal database to integrate data
• To assist in identifying postal
  infrastructure,its deficits and imbalances
• National Address System
• A framework for a National Address system has
  been developed
• The Village of Garasai in the North-West Province
  was used as a pilot project and the entire
  community received street addresses
• Another project on street delivery is taking
  place in the rural area of Eastern Cape

29
Postal Services

• International Activities
• Pan African Postal Union
• South Africa handed over Chairmanship to Kenya
• Assisted in modernizing and upgrading the Postal
  Services, including both financial services and
  regulatory framework
• Universal Postal Union
• South Africa accepted nomination for the
  Vice-Chair of Committee 7 of the 23rd UPU held
  in Bucharest, Romania
• Participated in the Executive Marketing
  Conference for UPU held in Durban
• Celebration of World Post Day
• Celebrated on 9 October 2003

30
Telecommunications Policy
Key Policy Strategy Progress
Second National Operator (SNO) To liberalize the telecommunications industry The Second National Operator has been announced. 25 holding in the SNO not finalised.
31
Telecommunications Policy
Key Policy Strategy Progress
Under Serviced Area Licenses (USALs) To provide telecommunications services to the Under Serviced Area licenses ICASA has approved four USALs, three are still outstanding and an invitation will be extended to apply for twenty more
112 Emergency Call Centre To establish an Emergency Communications Infrastructure that will be accessible from anywhere in South Africa. An operating call centre already established
32
Telecommunications Policy
Key Policy Strategy Progress
African Advanced Institute for ICT To establish an Institute that focuses on the study, research and development of ICTs in the form of technologies that benefits all citizens. A Project Office was established at the CSIR in terms of the Cabinet approval on 31 March 2004.The establishment process is underway and on target.
.za Domain Name Authority To establish a fully functional authority for the .za name authority The authority has been established.
33
Postal Regulator

• Monitoring and Enforcement unit
• Independent monitor to monitor the adherence to
  delivery standards
• Roll out audit to be undertaken in due course for
  the postal services and street delivery addresses
• Six Postal inspectors were appointed
• Information brochure on customer protection is in
  circulation
• Regulation Unit
• New Postal Services Regulations will be gazetted
  as soon as approval by the Minister has been
  obtained.
• Pricing and Tariffs Regulation Unit
• Separated from the Pricing and Tariffs unit
• To align it with Government objectives to ensure
  the effective regulation of administered prices

34
Support ServicesShareholder Management

• Facilitated the appointment of Directors of SOE
  Boards in such a way that these Boards are fully
  representative of the geographic and population
  diversity of South Africa
• Developed Shareholder Compacts to ensure that
  SOEs deliver on Government policy targets
• Analyze the financial performance of public
  entities

35
Other Support Services

• The DoC is currently developing a space weather
  research facility at the OTB site near Bredasdorp
  in the Western Cape
• The knowledge management unit was instrumental in
  the development of mobile access to the District
  information Management System web-based-applicatio
  ns through the General Packet Radio Services
• The Department recruited twenty seven interns, 17
  of whom were women
• Media and Communications co-ordinated the
  following events
• World telecommunications day
• World Post Day
• African ICT Achievers Awards
• The Telecommunications Amendment Act,2004 was
  drafted by the legal unit and passed by
  Parliament

36
Other Support Services

• International Relations sections main focus
  areas were
• Influencing the global arena by voicing the
  inspirations of many developing countries,
  especially African nations
• Implementing the New Partnership for Africas
  Development projects (e-schools and
  infrastructure development)
• Reforming the institution of Global Governance of
  the United Nations and contributing to the
  strengthening of the African union
• Contributing to Global efforts to Bridge the
  Digital Divide
• Building bilateral and multilateral Relations and
  sharing experiences with other countries
• Promoting peace and stability , good political
  governance and post conflict reconstruction with
  a view of using ICTs as a reconstruction tool

37
Other support services

• The Chief Audit Executive was appointed at a
  meting in Kenya to chair the newly formed African
  Telecommunications Networks Fraud
  Association(ATNFA)
• A new Audit Committee was appointed in terms of
  the PFMA to serve for a period of three years
• The Annual Financial Statements were submitted on
  time and in the format prescribed by National
  Treasury
• The Annual Report was submitted on time to
  Parliament
• The Office of the Auditor General issued an
  unqualified audit opinion

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5. PFMA COMPLIANCE
39
PFMA Compliance

• Sec 27 National Annual Budgets
• The annual budget of the Department of
  Communications is in accordance with the format
  prescribed by National Treasury
• Sec 30- National Adjustment Budgets
• The Departments adjustment budget complies with
  the requirements of sec 30
• Sec 38- General Responsibilities of Accounting
  Officer
• The Accounting officer does ensure that the
  Department has and maintains an effective,
  efficient and transparent system of internal
  control, financial and risk management.

40
PFMA Compliance

• Sec 39- Accounting Officers responsibility to
  budgetary controls
• The Accounting officer adheres to budgetary
  controls highlighted in section 39
• Sec 40- Accounting Officers reporting
  responsibilities
• Timeous submission of
• Annual Financial Statements
• Annual Report
• Monthly Expenditure Reports
• Quarterly Reports

41
PFMA compliance

• Sec 43- Virement between main division within the
  vote
• Virements remain within the eight percent of the
  amount appropriated under that main division as
  stipulated in the Act
• Sec 44- Assigning powers and duties by the
  accounting officer
• The Accounting officer delegated duties in
  writing to
• Programme Managers
• Responsibility Managers
• Chief Financial Officer
• Tender Committee
• Procurement
• Chapter 7- Executive Authorities
• The Executive authority of the Department does
  adhere to Chapter 7 of the PFMA.

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6. FINANCIAL INFORMATION
43
EXPENDITURE REPORT
Programme Adjusted Appropriation 2003/04 Revised Estimate 2003/04 Actual Expenditure 2003/04
Administration 88 607 86 107 80 470
Telecommunications policy 146 796 158 318 125 534
Postal Services 1 090 186 1 080 841 322 372
Multi-Media Services policy 312 948 313 737 305 829
Auxiliary and Associated Services 6 682 6 217 3 134
TOTAL 1 645 219 1 645 219 837 338
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PER ECONOMIC CLASSIFICATION
Economic Classification Adjusted Appropriation 2003/04 Revised Estimate 2003/04 Actual Expenditure 2003/04
Current Payments 225 550 229 556 182 186
Transfers and Subsidies 1 403 564 1 399 264 639 490
Payment for Capital Assets 16 105 16 399 15 663
TOTAL 1 645 219 1 645 219 837 338
45
Details of Transfer Payments
Beneficiary Adjusted appropriation 2003/2004 Actual Expenditure 2003/2004
USA 14 211 14 211
USF 24 745 24 745
Advanced Institute for ICT 11 000 8 262
South African Post OfficeSubsidy 1 050 000 300 000
46
Details of Transfer Payments
Beneficiary Adjusted appropriation 2003/2004 Actual Expenditure 2003/2004
SABCPublic Broadcaster 84 717 84 717
SABC Channel Africa 26 288 26 288
Community Radio Stations 9 000 1 964
Programme Production 30 100 25 800
NEMISA 15 153 15 153
ICASA 138 350 138 350
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RECONCILIATIONBUDGET VS SPENDING
Amount Explanation
Actual Expenditure 837 338 Actual expenditure for the 2003/04 financial year
Funds not spent 750 000 Not transferred to SAPO pending the restructuring and corporitisation of the Postbank and the signing of the Memorandum of understanding between the Minister of Finance and the Minister of Communications. This amount was requested as a roll-over.
Rolled-over 8 329 Amounts already committed but not spent. Requested to be rolled over
Surrendered to NRF 49 552 Amount surrendered to the NRF excluding the amounts requested to be rolled-over
BUDGET 1 645 219 Amount appropriated to the DoC
48
Implications of the MTBPS

• An increase in the Transfer Payment to ICASA for
  its VAT liability. An amount of R 45 341 million
  was allocated to fund the liability
• An amount of R 1 047 million was allocated for
  the establishment of the Deputy Ministers Office

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THANK YOU