Briefing to the Parliamentary Portfolio

Transcription

1 Briefing to the Parliamentary Portfolio Committee on Communications FY Annual Report

2 Contents Organisational Mandate Strategic Fit - Government s Priority Outcomes Strategic Outcome Oriented Goals: 2015/ /20 Performance Summary 2016/17FY Key Achievements by Programme Key Non-Achievements by Programme Human Resources Governance Complaints and Compliance Committee AG Audit Outcome 2016/17 Financial Year End 2

3 Organisational Mandate ICASA is established pursuant to section 192 of the Constitution and in terms of the ICASA Act of 2000, as amended ICASA s mandate is derived from: ICASA is mandated to - Regulate electronic communications, broadcasting and postal sectors in the public interest Ensure affordable services of high quality for all South Africans The Constitution, 1996 ICASA Act, 2000 EC Act, 2005 Broadcasting Act, 1998 Postal Services Act, 1998 ECT Act,

4 Strategic Fit - Government s Priority Outcomes Government Long-Term Plans and Priority Outcomes Outcome 6: An efficient, competitive and responsive economic infrastructure network Promote competition and network deployment for universal broadband provision NDP 2030 Outcome 12: An efficient, effective and development oriented public service Outcome 14: A diverse, socially cohesive society with a common national identity Ensure that the regulatory framework facilitates the use of ICTs as a platform to provide increased access to government services Facilitate the 3-tiers of broadcasting and specifically focus on a regulatory agenda that: Promotes local content Dissemination of information in the public interest Public broadcasting content across all platforms 4

5 (Strategic Outcome Oriented Goals)

6 Strategic Goals: 2015/ /20 1. Universal Access to Broadband 2. Access to Communication Services at Affordable Prices 3. Improve Organisational Service Delivery 4. Common National Identity and Social Cohesion 6

7 ICASA Services to the Sector ICASA Services to licensees Type Approval & Allocation of numbers Interconnection / Facilities Leasing Spectrum Assignment Licences & Channel Authorisations Issue registration certificates Services to end-users & audiences Universal service obligations Diversity of local Content Quality of Service Speedy resolutions of Complaints Competitive pricing

8 Performance Summary

9 Performance Summary by Programme Programme Outputs Achieved Outputs Not Achieved Total Outputs Planned Licensing Policy Research & Analysis Engineering & Technology Regions Compliance and Consumer Affairs Corporate Services Finance Human Resources Internal Audit Legal Risk Complaints & Compliance Committee TOTAL PERCENTAGES 74. 5% 25.5% 100%

10 Expenditure Summary by Programme Programmes Summary Report - March /17 Chief Operations Officer 2015/16 (Regulatory (Over)/Under Projects Office) (Over)/Under Programme Budget Actual Expenditure Budget Actual Expenditure Programme 1: Administration ( ) Programme 2: Licensing ( ) ( ) Programme 3: Engineering & Technology Programme 4: Policy Research & Analysis Programme 5: Compliance & Consumer Affairs ( ) ( ) Programme 6: Regions TOTAL ( )

11 Reasons for Over Expenditure Actual operational expenditure (OPEX) was R (2.4%) less as compared to the budget amount of R Chief Operations Officer Normal projects actual spending of R was (Regulatory R (70.7%) Projects more Office) to the budget of R , the below were mainly the cause for the over spending: - 1. The project Local Elections Monitoring head count costs for the officers who were temporarily employed initially budgeted with lower scale packages and were actually salaried with higher scales going over by R The projects Quality of Service(QoS) Monitored and Frequency Migration strategy/plan and updated National Band Plan and reviewed broadcasting plan both were under budgeted for resulting in in over spending of R The number of small projects under support division make up balance of the remaining amount of R1m. 4. The actual amount incurred during the current financial is inclusive of the prior year accruals paid during the current financial year. The over expenditure on repairs and maintenance was mainly due to the following: 1. Additional expenditure of R incurred for repairs on old motor vehicles 2. Additional expenditure of R incurred for maintenance of monitory equipment.. 11

12 Achievement by Programme

13 Programmes for 2015/ /20FY 6. Compliance & Consumer Affairs 1.Administration Purpose: To provide coordinated strategic leadership, management and support to the organisation to deliver on its mandate 2.Licensing Purpose To authorize, issue, renew, transfer and revoke all types of licence within its jurisdiction for the purpose of socio-economic development and promotion of competition 3. Policy Research & Analysis Purpose To conduct research and policy analysis into all the regulatory sectors in line with ICASA mandate 4. Engineering & Technology Purpose To research on radio frequency spectrum, type approval and technical standards to provide support to ICASA Programmes as needed 5. Regions Purpose To enable unimpeded national provision of electronic communications, broadcasting and postal services through compliance and enforcement Purpose To ensure licences compliance with terms and conditions of their licences, regulations and requirements and protect interest of consumers

14 Programme 1: Administration - Achievements Corporate Services Finance Systems and processes integration from 30% to 50% Increased ICASA communication reach from 10% to 40% on available Chief communication Operations platforms Officer (Regulatory IncreasedProjects safety andoffice) OHS from 50% to 60% Revenue collected R on all invoices (99%) Support to Programmes increased from 88% to 95% Human Resources Increase in talent sourcing from 20% to 50% Increase in employee interventions from 20% to 50% Internal Audit Legal, Risk & CCC Audit plan completed from 84% to 85% 12 Issues tracking reports produced Assurance reports increased from 1 to 4 Repository for analysed legal opinions and case law complet from 0 to 50% Increase in risk maturity level from 1 to 2 beyond planned target SLA agreement completion increased from 20% to 50% 14

15 Programme 2: Licensing - Achievements Universal Access to Broadband IMT Spectrum ITA published Regulation on exempted devices completed Regulation on Premium Rated Services completed Chief Operations Officer (Regulatory Projects Office) Access to Communication Services at Affordable Prices Public hearings and deliberations on number portability regulation completed Licensing process for commercial sound broadcasting in the Northern Cape completed Increase in type approval applications processed within 30 days from 18% to 65% Increase in numbering applications from 94% to 96% Increase in individual service licences amendments, transfers & control processed from 88.9% to 100% Increase in new, amendments, transfer & control of spectrum licensing applications from 81% to 97.7% ITA for Free To Air Commercial Television Broadcasting published 15

16 Programme 3: Policy Research & Analysis - Achievements Chief Operations Officer (Regulatory Projects Office) Access to Communication Services at Affordable Prices Draft community broadcasting regulatory framework published 16

17 Programme 4: Engineering & Technology - Achievements Universal Access to Broadband Chief Operations Officer (Regulatory Projects Office) Updated National Radio Frequency Plan approved Final regulations on E-band and V-band published on 22 November 2016 Improve Organisational Service Delivery Updated and redefined broadband maps and infrastructure maps published on ICASA website Quality of Service measured distance increased from 5600km by 15% 100% of spillover cases resolved within 60days 17

18 Programme 5: Regions - Achievements Improve Organisational Delivery An additional ICASA regional office opened in Limpopo Additional ECS/ECNS class licence processed in regional offices Increase in resolution of interference cases from 90% to 92.5% Chief Operations Officer (Regulatory Projects Office) Common National Identity and Social Cohesion Increase in consumer awareness from 0 to 5% All NATJOINTS instructions received executed 18

19 Programme 6: Compliance & Consumer Affairs - Achievements Access to communication services at affordable services RIA recommendations implemented Chief Operations Officer (Regulatory Projects Office) Improve Organisational Service Delivery Consumer Advisory Panel published 3 ECS/ECNS compliance reports published Consumer protection strategy and implementation plan completed Increase in consumer complaints resolution from 75% to 80% Common National Identity and Social Cohesion A compliance reported published on Municipal elections A discussion document produced on ownership and control regulations on equity ownership and BBEEE 19

20 Non-Achievement by Programme

21 Programme 1: Administration - Non- Achievements Finance 87% against 95% target ( suppliers paid out of suppliers invoices received) 71% against 100% target (197 SMMEs paid out of 277 SMME invoices received within 15 days Chief Operations Officer (Regulatory Projects Office) Human Resources 25% of Performance Management & Organisational Development strategy implemented against a target of 50%. Consultation process took longer than expected 33% of HRD initiatives implemented against a target of 50%. Consultation process took longer than expected Internal Audit Compliance monitoring not completed. Data Analytics position took longer than expected to fill due to the poor level of candidates interviewed 21

22 Programme 2: Licensing Non-Achievements Chief Operations Officer (Regulatory Projects Office) Universal Access to Broadband Licensing of 45% of MUX not completed. ICASA decided to extend the submission deadline on the request by the qualifying applicant 22

23 Programme 3: Policy Research & Analysis Non-Achievements Access to Broadband Spectrum Chief Operations Officer (Regulatory Projects Office) Study on definition of priority markets that are susceptible to ex-ante regulation. Council approved the publication of the notice to conduct market inquiry. There was a delay in procurement of the service provider. Access to Communication Services at Affordable Prices Discussion Document on subscription broadcasting market will be published in May The project experienced unexpected delays at the information gathering stage. Draft regulations on call termination. Published a notice and a questionnaire to conduct the review of 2014 procompetitive remedies 23

24 Programme 4: Engineering & Technology Non- Achievements Universal Access to Broadband 5G forum establishment. On 6 September 2016 Council approved the terms of reference for the establishment of the 5G Forum. Invitation letters were sent to potential participants. Only 25% responded Research report on TV White Spaces regulations. Two research reports have been produced by CSIR for ICASA. This represents 75% achievement of the target. Chief Operations Officer (Regulatory Projects Office) Improve Organisational Service Delivery Decrease turnaround time on type approval and spectrum licensing. 35% progress has been achieved. The target was unrealistic in terms of the project plan 24

25 Programme 6: Compliance & Consumer Affairs Non -Achievements Access to Broadband Spectrum Chief Operations Officer (Regulatory Projects Office) Obligations imposed for broadcasting ECS/ECNS and postal services from 4 licenses to 7. Draft USO amendments published, comments received. Improve organizational Service Delivery Final code for persons with disabilities regulations. Decision to publish a further draft Code for Persons with Disabilities for public comments extended the project beyond the FY 25

26 Human Resources

27 Personnel by Population Group Chief Operations Officer (Regulatory Projects Office) 27

28 Personnel Cost by Division Chief Operations Officer (Regulatory Projects Office) 28

29 Headcount and Vacancies per Occupational Level Chief Operations Officer (Regulatory Projects Office) 29

30 Employment Changes and Attrition Reasons

31 Governance

32 Council Members during the Year under review Mr Rubben Mohlaloga Ms Katharina Pillay (term of office ended on 11 February 2017) Mrs Nomvuyiso Batyi (term of office ended on 11 February 2017) Ms Botlenyana Mokhele Dr Keabetswe Modimoeng Mr Paris Mashile Mr Peter Zimri

33 Council Committees Members Meetings Attendance

34 Complaints and Compliance Committee

35 Number of Complaints Adjudicated And Attendance

36 AUDIT OUTCOME PRESENTED BY CFO: TEBOGO MATABANE

37 STATEMENT OF FINANCIAL POSITION R thousand ' / /2016 Assets Current Assets Non Current Assets Total Assets Liabilities Current Liabilities Non Current Liabilities Total Liabilities Accumulated surplus The Authorities assets exceeded it liabilities by R , the request to retain the surplus was approved by National Treasury. 37

38 STATEMENT OF FINANCIAL PERFORMANCE R thousand ' / /2016 Revenue Revenue from non exchange transactions Revenue from exchange transactions Total revenue Expenditure Employee-related costs General expenses Total expenditure Surplus for the year

39 UNQUALIFIED AUDIT AG s Assessment of 2016/17FY Performance Internal Control Deficiencies [74.5 %] Organisational Performance 39

40 Achievements for Financial Year Unqualified with findings Types of audit outcomes Unqualified with no findings Unqualified with findings Qualified with findings Adverse with findings Disclaimed with findings 40

41 Achievements for Financial Year Risk areas Quality of submitted financial statements Quality of submitted performance information Supply chain management Financial health Human resource management Information technology Good Concerning Intervention required 41

42 Audit Report Issues Audit Report Audit Report matter: Non compliance on; Unqualified 1. Usefulness of reported performance information - Programme 1: Policy Research and Analysis, Programme 2: Regions, Programme 3: Licensing, Programme 4: Compliance and Consumer Affairs & Programme 9: Legal, Risk and CCC; 2. The constitutional institution did not have a proper record management system to maintain information that supported the reported performance in the annual performance report; and 3.Irregular and fruitless and wasteful expenditure. 42

43 Audit Report Issues Audit Report Audit Report matter: Non compliance on; Unqualified 1. The financial statements submitted for auditing were not prepared in accordance with the prescribed financial reporting framework as required by section 40(1) (b) of the PFMA Material misstatements of non-current assets, current assets and disclosure items identified by the auditors in the submitted financial statement were corrected, resulting in the financial statements receiving an unqualified audit opinion. 2. Contractual obligations and/or money owed by the entity were not met and/or settled within 30 days, as required by section 38(1)(f) of the PFMA and treasury regulation Effective steps were not taken to prevent irregular expenditure amounting to R as disclosed in note 34 to the annual financial statements, as required by section 38(1)(c)(ii) of the PFMA and treasury regulation Effective steps were not taken to prevent fruitless and wasteful expenditure amounting to R as disclosed in note 33 to the annual financial statements, in contravention of section 38(1)(c)(ii) of the PFMA and treasury regulation Quotations were accepted from prospective suppliers who did not submit a declaration on whether they are employed by the state or connected to any person employed by the state, which is prescribed in order to comply with Treasury Regulation 16A

44 Audit Report Issues Audit Report Audit Report matter: Non compliance on; Unqualified 6.Contracts and quotations were awarded to suppliers whose tax matters had not been declared by the South African Revenue Services to be in order as required by Treasury Regulations 16A9.1(d) and the Preferential Procurement Regulations. 7.Goods and services of a transaction value above R were procured without inviting competitive bids, as required by Treasury Regulations 16A6.1. Deviations were approved by the accounting officer even though it was not impractical to invite competitive bids, in contravention of Treasury regulation 16A Bid documentation for procurement of commodities designated for local content and production, did not stipulate the minimum threshold for local production and content as required by Preferential Procurement Regulation 9(1) 9.Commodities designated for local content and production, were procured from suppliers who did not submit a declaration on local production and content as required by Preferential Procurement Regulation 9(1) 44

45 FRUITLESS AND WASTEFUL EXPENDITURE R thousand ' / /2016 Fruitless and Wasteful expenditure Fruitless and Wasteful expenditure increase from R reported in 2016 to R in the current year. A total amount of R was condoned by Council during the financial year. The fruitless and wasteful expenditure identified during the current year is under investigation in terms of Section 38 and 51 of the PFMA and disciplinary steps against relevant officials will be taken where it is proven the relevant officials committed the fruitless and wasteful expenditure as disclosed. 45

46 IRREGULAR EXPENDITURE R thousand ' / /2016 Irregular expenditure Irregular expenditure increase from R reported in 2016 to R in the current year. A total amount of R was condoned by Council during the current financial year. The irregular expenditure identified during the current year is under investigation in terms of Section 38 and 51 of the PFMA and disciplinary steps against relevant officials will be taken where it is proven the relevant officials who committed the irregular expenditure as disclosed. 46

47 Thank You