Department of Communications, National Electronic Media Institute, Universal Service and Access Agency Annual Reports 2008/09

Meeting report

Department of Communications (DoC or the Department) Annual Report Briefing
Ms Mamodupi Mohlala, Director-General, Department of Communications, briefed the Committee on the Department's organisational performance. The DoC's key goals and objectives were guided by strategic focus areas, based on government priorities. Some of the goals included achieving higher rates of investment in the economy, increasing the competitiveness of the economy, and broadening participation in the economy. There were six programmes in the Department, each of which was outlined.

Programme 1: Administration, was presented by Ms Gerda Grabe, Chief Operating Officer and Deputy Director-General for Governance and Administration, who stated that the Department appointed a service provider to assist in driving the Broadcasting Digital Migration (BDM) public awareness campaign. The DoC achieved 2% representation of people with disabilities, and budget and expenditure management improved significantly. The Department fully complied with requirements of the Public Finance Management Act (PFMA) and the final draft of the Departmental Youth and Information and Communication Technology (ICT) Strategy was developed.

Programme 2:  ICT International Affairs and Trade  was described by Ms Mohlala. The Department actively supported the New Partnership for Africa’s Development (NEPAD) infrastructure programmes and hosted the International Telecommunication Union's (ITU) World Telecommunications Standardisations Assembly. The Department hosted an e-Schools stakeholder conference where countries resolved to convert 50% of their secondary schools into NEPAD e-Schools by 2012. South Africa, through the Department, accepted an offer from South Korea to jointly cooperate on ICT Communications Centres to promote e-skills development.

Programme 3: ICT Policy Development  was presented by Ms Rosy Sekese, Deputy Director-General for ICT Infrastructure Development. She stated that the technical specifications Set-Top Boxes (STBs) and the draft Digital and Local Content Strategy was finalised. Members of the Digital Dzonga Council were appointed and a draft programme to address the cost to communicate was finalised. Draft policy guidelines were developed on the National Postal Address System. The DoC facilitated the roll out of broadcasting equipment to nineteen newly licensed community radio stations and provided computer workstations and digital mixes to eight existing community radio stations.

Programme 4: ICT Enterprise Development was explained by Mr Sibongile Makopi, Chief Director: Shareholder Management, who stated that the Department monitored the roll out of 43 Thusong Post-Offices and a Plan of Action was put in place regarding the development of e-commerce websites for Small, Medium and Micro Enterprises (SMMEs). The Department undertook an independent evaluation of corporate governance practices at both SABC and Sentech and reports were submitted to the Minister of Communications.

Programme 5:  ICT Infrastructure Development  was presented by Ms Sekese, who informed the Committee that the
 Department developed the first draft of the National Frequency Spectrum Policy Discussion Document and oversaw the roll out of the elements of the 2010 FIFA World Cup ICT guarantees. The Department developed a 2010 Legacy Plan which would ensure that all infrastructure installed for 2010 would be reused, post 2010. Sentech's roll out plan for the 2010 project was put in place and the procurement of the required equipment was to commence once funding was secured. All stakeholders were awaiting the finalisation of the digital broadcasting frequency plan by ICASA.

Programme 6: Presidential National Commission (PNC) on Information Society and Development (ISAD) was explained by Mr Themba Phiri, Acting Deputy Director-General: PNC on ISAD. He stated that the PNC facilitated a process to ensure the incorporation of the ISAD Plan into the Provincial Growth and Development Strategy (PGDS). A total of 1200 young people were identified though municipalities nationally, leading to the formation of an additional fifty youth e-Cooperatives. 377 young people were recruited and trained on ICT related skills and life skills and thereafter they were deployed to undertake community development work as volunteers in hospitals, clinics, health district offices, Further Education and Training (FET) Colleges and at Dinaledi Schools.
 
The National Digital Repository (NDR) on cultural heritage was initiated in order to preserve, promote and disseminate South Africa's cultural heritage. Topographical data was collected to determine the location of Dinaledi schools and user requirements for the schools were identified. Foundation elements were put in place to establish the Meraka e-Skills Institute as a legal entity.
 
Financial matters
Ms Mapitso Malaku, Chief Director: Finance, DoC, presented the financial statements. She stated that total revenue amounted to R5 851 631 000 for 2008/09. Total expenditure amounted to R2 328 611 000. During the year, R500 million was transferred to Sentech for its wireless broadband initiative. This transfer was then stopped, as Sentech failed to draft a plan for the initiative regarding setting up internet connections in schools.
 
The budgets were also broken down per programme. The Administration Programme under spent on its budget by R1 100 000. The ICT Infrastructure Development Programme under spent by R1 798 000. The rest of the DoC's programmes neither under spent nor overspent on their budgets. Overall, the programmes spent 99% of the allocated budget. Other transfer payments were made to the Universal Service and Access Agency of South Africa (USAASA), the Universal Service and Access Fund (USAF), the Independent Communications Authority of South Africa (ICASA), the National Electronic Media Institute of South Africa (NEMISA), the South African Post Office (SAPO) Subsidy, Sentech for Digital Transmitters, the South African Broadcasting Corporation (SABC), the .za Domain Name Authority, the Meraka Institute, Information Systems Electronics and Telecommunications Technologies - Sector Education and Training Authority (ISETT-SETA), Telkom and NEPAD.

Discussion
Mr L Mkhize (ANC) asked if the Department was happy with the way entities were using the funds allocated to them. If the Department was not happy with the way funds were used, he asked what was being done about this. He also asked if the Department received updates and reports from these entities showing how the money was being used. In particular, he asked for comment upon the performance of the Independent Communications Authority of South Africa (ICASA) so far.
 
Ms Mohlala stated that the Department was in the process of reviewing all the shareholder contracts as part of its oversight role. The Department had identified both the SABC and Sentech as entities in need of help. Discussions were being held to strengthen these entities and to strengthen the Department’s monitoring and evaluation mechanism. The Department would take more of an active role in the SABC with regards to its governance structures.

The ICASA Act had a requirement that a performance agreement be concluded between ICASA councillors and the Minister of Communications. The Department wanted to propose some solutions to the ICASA councillors in the previous month, but there were certain delays in the completion of the proposal. The Department would be contributing to the terms and condition of the performance agreement before it was shown to the National Assembly.   
Ms W Newhoudt-Druchen (ANC) noted that there were many disabled persons employed at the Department; but could not see the level at which they were appointed. She also noted that the Department selected 500 young people to undergo basic ICT skills training. She asked how many of these youths were disabled. She noted that the Department would be looking for local manufacturers to manufacture Set-Top Boxes (STBs). This would assist the country with job creation. She asked if the Department was successful in finding these local manufacturers.

Ms Grabe answered that the statement about disabled persons was a good observation. She stated that there was a disabled person in a senior manager position and there were other disabled persons working under managers.
 
Mr Phiri stated that the Department did not have the details of the students that were receiving ITC training on hand. The Department wished to analyse this information before giving it to the Committee.
 
Ms Mohlala stated that the Department was still in the process of finding STB manufacturers. The Department wanted broad public participation in who should be producing the STBs. The Department believed there needed to be participation in the production of STBs by local manufacturers.

Ms S Tsebe (ANC) asked what criteria the Department used in deciding which schools would be converted to NEPAD e-Schools. She worried whether the Department would monitor the maintenance of the ICT equipment in these schools. She noted that there were very few  ICT skills in poor, black communities in the country. She wondered what the Department was doing about this.

Ms Sekese stated that the Department looked at schools in poverty-stricken areas and the coverage stemming from connecting these schools. This meant that the Department looked at how the areas around the schools would benefit from the schools becoming connected.

A Member stated that there needed to be articulation between the different levels of education. The Department found that there was no communication between primary, secondary and tertiary institutions about ICT. He thought it was important to include primary schools in poor areas in ICT training.

Adv J De Lange (ANC) stated that there could be some Departmental officials who had interests outside of the Department, but benefited from working in the Department. He hoped that this was being checked every month. He asked if there were officials in the DoC that fell in to this category. If this was the case, the DoC should write a full report on each individual and forward it to the Chairperson.

Ms Mohlala stated that the DoC received certain complaints that certain senior managers did have interests outside of the Department that could be seen as conflicts of interests. The matter was investigated and taken up with certain individuals. The recourse was still to be decided and some matters would be resolved in open court. Officials were required to declare their interests and these declarations were being checked to see if they were correct and in line with departmental policies. The declarations were confidential, but could be made available on a confidential basis to the Committee.

Adv De Lange stated that the Committee wanted a report on these individuals. The Report need not contain intimate details, as the Committee just wanted to know what the nature of these interests were. The Committee needed to interrogate this matter further. A mechanism was needed whereby the Department reported to the Committee on these issues every month, so that Members could see whether there were regular checks being made. Mr de Lange pointed out that when reading he Auditor-General’s  report, he was shocked to see how many senior officials were benefiting from Departmental money. A proper reporting mechanism was needed to resolve this matter.
 
Ms Mohlala stated that the Department was taking the matter very seriously. There was only one serious case that the Department was aware of. The DoC would give the Committee a report on the matter after it was settled in court.  
Mr S Kholwane (ANC) did not understand what the problems were with connecting Dinaledi schools. He wondered if the problems were being resolved. He asked the Department for information on the entities that were owed money by the SABC.
 
Ms Mohlala stated that the DoC took note of the concerns with connecting Dinaledi schools and these issues were being addressed. She stated that individual concerns were being looked at and solutions were under way. After the DoC completed investigations on and found solutions to irregularities discovered during the implementation of the project, it would decide on the way in which it would proceed.
 
Mr Kholwane noted that the money that was given to Sentech for the initiative to connect schools was taken away. The children in rural areas and other poor areas were suffering because they did not have access to the internet that would allow them to do necessary research.
 
Adv De Lange thought it was the right decision to take the money away. The children were suffering because of incompetent people. Sentech clearly did not have the capability to put this project together. It had been given R500 million for the initiative and failed to draw up a plan for it. He wondered why the task of drawing up a plan for the project was not a joint initiative. Sentech, the DoC and National Treasury could have been involved in the project planning phase. Sentech could be responsible for implementing the plan.
 
The Chairperson agreed that this should have been a joint initiative.
 
Mr N Van den Berg (DA) added that he had spoken to many people in the ICT industry and it was clear that South Africa had the capability to implement the project. It came down to a lack of political will.

Ms Mohlala stated that the issue of connectivity in schools was not just exclusive to Dinaledi schools. The DoC wanted to connect all schools and there were various initiatives to ensure such internet connection. The Department was in discussion with the Department of Education (DoE) about how to overcome certain connectivity challenges. The Department was in the process of drawing up a report showing the progress made in connecting public schools.   
Mr Kholwane asked for that report on progress made.

Ms J Kilian (COPE) stated that there was no key strategic driver of the project. At this stage the DoC needed to be working closely with the Department of Education (DoE) to find out how many schools still needed to be connected. It should look at the combination of initiatives that were already in place between the two departments to evaluate what needed to be done. No one was taking full accountability of the project and a champion was needed to steer the project, set goals, evaluate initiatives and hold people accountable for their actions.

The Chairperson agreed that a full and extensive report was needed regarding school connectivity.
 
Ms Mohlala stated that the Department would forward the report to the Committee.

Ms Mohlala addressed the matter concerning the SABC. She stated that from a shareholders point of view, the Department was doing everything it could to assist the SABC with its liquidity challenges. In the recent past, the Department assisted the SABC with operational expenses. It also had the assistance of government to help with their redistribution of funds. The DoC would be allocating money to the SABC; however, the money could not be spent at will. There were specific measures and controls in place that were attached to the allocated funds so that the SABC did not find itself in a similar situation a few days down the line. The SABC stated that they expected a positive turnover by 2012.

Mr Van den Berg wondered how the Department ensured that its policies filtered down to ground level. He wondered if people were really benefiting from Departmental initiatives and programmes. He addressed transfer payments and asked why Telkom received R600 million from the Department. 
  
Ms Sekese answered that there were certain FIFA requirements that were needed for the 2010 Soccer World Cup. There was no way Telkom could adhere to these requirements without funds. The DoC therefore had to give Telkom R600 million in order for Telkom to adhere to those requirements. Telkom had not used the full R600 million yet.

The Chairperson asked what exactly the relationship was between the Department and Telkom. He heard that Telkom had been delisted from the Johannesburg Stock Exchange (JSE). He wondered whom they reported to. He asked what exactly the PNC was. He wondered if it should be included under the Presidency.

Ms Mohlala stated that as far as she knew Telkom was delisted from the New York Stock Exchange (NYSE).

Mr Phiri stated that the government was a significant shareholder in Telkom. The Department had a significant influence in the entity, but could not regulate or control Telkom. Telkom was a commercial entity. At some point, Telkom took advantage of a provision in the Public Finance Management Act (PFMA) and requested that it should be exempted from the requirement to report in terms of the PFMA. Currently, Telkom was exempted from reporting to government.

Ms Mohlala stated that the role of the PNC had been raised on a number of occasions. The DoC was looking in to the matter. There were members of the DoC staff that were involved in the PNC and there were labour issues that would be raised in discussions about the role of the entity.
 
The Chairperson noted the Department used the word “entity” when describing the PNC. He stated that the PNC was not a reporting entity; it was just created by the Department. This was a matter that needed to be clarified.
 
Ms Kilian asked if all the performance management agreements were in place.
 
Ms Mohlala stated that not all performance management agreements were in place. There were certain employees who indicated that they were not comfortable with the performance agreements that were put in place. The DoC was in the process of consulting with these specific individuals to resolve the matter or to amend the performance agreements.

Mr Mkhize asked if the Department used labour brokers to fill vacancies.

Ms Grabe stated that the Department did not always get what it wanted when advertising the vacancies, and would sometimes use recruitment companies to help fill vacancies.

The Chairperson stated that he hoped the Department’s report on ICASA would be completed soon and handed to the Committee. The Committee also wanted a report on the Department’s investigation into the case regarding declaration of interests and a report on the progress made with connectivity in schools.

National Electronic Media Institute of South Africa (NEMISA) Briefing
Ms Karen De Wet, Chief Financial Officer, stated that NEMISA received an unqualified audit from the Auditor-General for the 2008/09 financial year. The total income received for the financial year amounted to R39 547 351, which comprised of government funding, interest receivable and sundry income. Operational expenditure amounted to R40 786 699 and capital expenditure amounted to R1 765 328. NEMISA qualified as a Public Benefit Organisation in terms of the Income Tax Act and therefore was tax and VAT exempt.

NEMISA acquired a portion of a sectional title property development in Franschoek during the 2007/08 financial period. The facility was being used to further the provisioning of skills development in the electronic media and information technology fields.

In terms of strategic leadership and overall management, NEMISA retained Media Advertising Publishing Printing Package – Sector Education Training Authority (MAPPP-SETA) Institutional Accreditation and approval of four programmes. NEMISA recruited and trained 271 students in the Training and Development Unit. In terms of establishment of strategic alliances, 480 students were trained. NEMISA fell short of having eight productions, which was their initial target, and only delivered four content productions.

Discussion
Ms Kilian noted that there was an amount paid to Ms B Baloyi (Page 30, Annual Report) for reimbursements. She did not see other payments made to her, and asked for clarity on this matter. She also noted that one of the Directors, Mr K Moroka, incurred the highest costs in terms of reimbursements despite the fact that his attendance record was very poor. She asked NEMISA to comment on this.
 
Ms De Wet stated that Ms Baloyi was an employee of the DoC and part of the NEMISA board and that was why she did not receive any compensation. She added that Mr Moroka was the only board member that lived “out of town and therefore, he incurred the highest costs in traveling to the meetings.
  
Ms Newhoudt-Druchen noted that NEMISA had fallen short of reaching its target of delivering eight productions and only managed to deliver four. She asked for more clarity on this.  

Mr Vuyo Makhaya, Acting CEO, NEMISA, stated that NEMISA was scheduled to have eight multimedia productions, but that, due to unprecedented shrinking regarding the commissioning of content, NEMISA found it difficult to access any more content. Because of the shrinking of the market, NEMISA experienced challenges in commissioning certain projects.

The Chairperson stated that the Committee received a letter from a NEMISA staff member alleging that NEMISA property was being used for private purposes, that a good number of NEMISA programmes were not fully effective, and that there were concerns around NEMISA's agreement with a Nigerian television company. He asked who this individual was, as it was unusual for staff members to report and complain directly to the Committee.

Ms Rizelle Sampson, Chairperson, NEMISA Board, stated that this was the first time that the Board heard of these allegations. She asked that the Chief Executive Officer should have a chance to deal with the allegations and stated that it would be put on the Board’s agenda for the meeting on 6 November 2009. The Board would investigate the allegations made. She agreed that it was out of the ordinary for a staff member to refer the matter directly to the Committee. NEMISA held sacred the rules of good governance and this meant that it usually had a good relationship with management staff.

The Chairperson stated that if the Board was seeing this for the first time, it should be allowed more time to investigate the matter further.

Mr Makhaya added that NEMISA was dealing with the disgruntled staff member that wrote the letter. A disciplinary hearing against the individual was being held in the week, as there were other allegations against him as well.

The Chairperson reiterated that the Committee would give the board time to investigate the matter. He asked if NEMISA would be able to table a report with the Committee after a week.

Ms Sampson replied that the board meeting was only going to be held on 6 November, after which a detailed report could be sent.

The Chairperson confirmed that this would be in order.

Ms Kilian asked if there were any plans as to how the vacancies in NEMISA would be filled.
.  
Ms Sampson stated that NEMISA was going through the processes of filling the CEO vacancy. The DoC wanted to become more active in assisting NEMISA in filling vacancies. NEMISA was awaiting feedback from the DoC in this regard.

The Chairperson asked if the DoC was allowed to become so involved in assisting NEMISA to fill their vacancies, as an official in the DoC was currently part of the board. 

Ms Sampson stated that Ms Maloi was removed from the board. NEMISA was awaiting the official notification of her removal.
 
Mr Van den Berg stated that he was impressed with NEMISA and the work that it was doing. He got the impression that NEMISA had an Executive and a board. He wondered why it was necessary to have a board when there were skilled people “on the ground”. He thought this was unnecessary.

Ms Sampson answered that NEMISA was established with a Memorandum and Articles of Association. The Board had the duty of reporting to the Minister. This was a governance issue and the PFMA required that certain institutions had boards.

Ms S Tsebe (ANC) asked what the Board’s relationship with NEMISA managers was like.
 
Ms Sampson stated that since there was no CEO, the Board had made more effort to be involved in NEMISA without becoming involved in operational issues.

Ms Kilian noted that the lease agreements for NEMISA premises were very costly. She asked if it was possible for NEMISA to acquire more affordable premises. She asked why NEMISA had a surplus last year and a deficit for this financial year. She asked if NEMISA had the ability to start getting additional income. She wondered if NEMISA received adequate support and direction from the DoC and what the Committee could do to ensure that it improved its very important skills transfer mechanism.
 
Ms De Wet stated that NEMISA’s lease was set to expire on 1 December 2009. NEMISA was looking for better options in the market. NEMISA was currently located in Parktown, which was central and convenient for most students but had problems with shortage of space. NEMISA wanted to take in more students, but unfortunately there was no capacity. It was in the process of exploring other ideas for premises that it could occupy.

Ms De Wet explained the surplus, stating that at the end of the 2008 financial year, NEMISA had not used all of the funding that was made available to it. The funding was “rolled over” to the next financial year with permission from the National Treasury. She stated that NEMISA had a problem with acquiring funding. In the last three to four years NEMISA started training more students and increased the student base. This pushed up the institution’s costs as well. The money that was allocated to NEMISA was not enough and the institution found itself severely strapped for money. NEMISA needed to find ways and means to address the funding issue. NEMISA put in requests for additional funding twice, but was turned down both times. She thought it should look at alternative forms of funding so that NEMISA could move forward and be fully functional.
 
Ms Kilian suggested that NEMISA should look at the possibility of getting a funding allocation from the Department of Higher Education. The Committee wanted to see funds allocated to successful initiatives.
 
Mr Mkhize asked if all NEMISA staff members had signed performance agreements.
 
Ms Sampson stated that the board instituted a policy encouraging staff to sign performance agreements. The only outstanding performance agreements that were outstanding would be dealt with at the board meeting. 

The Chairperson thanked NEMISA for its presentation. He stated that the Committee was very impressed with the work it was doing
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Universal Service and Access Agency of South Africa (USAASA) Briefing
Ms Cassandra Gabriel, Chairperson of USAASA, gave a brief summary of USAASA's mandate, a description of the board and a description of the Executive management. She stated that previously restrictions limited USAASA from fulfilling its Electronics Communications Act mandate. Previously, there was insufficient funding for USAF, which resulted in the fund not being able to fund infrastructure and connectivity projects. Challenges had been addressed with the DoC and the National Treasury and the tide was now turning for USAASA.
 
Mr Winile Lamani, Acting Chief Executive Officer, USAASA, addressed the USAF budget. He showed the budget allocations for the next two financial years and USAF expenditure trends for 2008/09 and 2009/10. USAF would be spent on refurbishment and connectivity for schools and communities, funding private entities, subsidies for under serviced area licences (USALs), training, subsidies to Further Education and Training (FET) colleges, and research and development. USAASA would be allocating R400 million for the subsidy of Set Top Boxes over the next three years in order to help and support the working group of the Digital Dzonga.
 
Mr Lamani discussed USAASA's budget. USAASA's budget allocation would increase from R21 105 000 in 2007/08 to R64 904 000 in the 2010/2011 financial year.  Some USAASA expenses included administration expenses, operating expenses, advertising, audit fees, board fees, depreciation, Capital Expenditure (CAPEX) and research costs.

The Audit Report for USAF and USAASA was unqualified. However, there was a comment that irregular expenditure of R9.48 million was incurred during the financial year on USAF because delegation of authority was not followed. In terms of fruitless and wasteful expenditure under USAASA, R461 000 was incurred on non adherence to supply chain management processes. R122 000 was also incurred due to late submission of PAYE returns, short attendance of delegates for training courses and payments to consultants.
 
USAASA's key strategic responsibilities included establishing infrastructure, ensuring affordability, driving effective usage and uptake of e-literacy and design of access, focusing on network ICT partnerships and sustainability. USAASA planned to identify under-serviced areas, quantify the access gaps, subsidise infrastructure roll out, build viable partnership models for the development of the community access centres, subsidise cyber labs and subsidise connectivity in FET colleges.

Discussion
The Chairperson wondered if USAASA would be missed if it was closed down. There were so many entities that performed the same function.
 
Mr Van den Berg stated that after listening to all the institutions, it seemed that they were all interconnected. It seemed as if USAASA was trying to do ICASA's job and vice versa. He wondered if ICASA or Sentech could perform USAASA's functions.
 
Ms L Mazibuko (DA) wondered if there was any advantage to USAASA being a separate entity and what USAASA's view was on it being absorbed or dissolved in to ICASA.
 
Ms Gabriel noted that the Committee had not visited any of the USAASA facilities yet. This meant that they were at a disadvantage. USAASA would be sending the Committee a letter formally inviting them to visit the USAASA centres. If the Committee visited some rural areas they would see the work that USAASA was doing and they would see who would miss the entity if it were to be disbanded. The little that USAASA managed to do with a small budget made a big difference in a small community. Even the Minister refused to cut USAASA's budget, and in fact increased it because of the good work it had been doing. It did not matter whether USAASA became part of the DoC or not, as its function still needed to be performed. The new budget was reflective of the new capacity at which the Minister wanted USAASA to function.

The Chairperson responded that he understood the need for USAASA; however, recent research indicated that South Africa was slipping as a country in terms of its performance. Therefore, if institutions were not making an impact the Committee had to ask why government was still funding these institutions. Just like ICASA, USAASA had not performed up to scratch in the past. The Committee had only heard a litany of complaints about the entity, and there was not one positive word said about it. The Committee had to ask what impact USAASA was making in the country; as the Members had not seen any real improvement in the entity in the past eighteen months.

Mr Phineas Molele, Head: Legal and Regulatory Services, USAASA, stated that USAASA's agenda had to be elevated to the point where its role was clear. USAASA tried to highlight some of its functions in the report.

Mr Kholwane asked what the possibility was of USAASA filling the CEO and CFO vacancies. He noted that the previous CEO was “fired” for sexual harassment. He asked for an update on the situation. He stated that it was not a question of where USAASA's function was located; the point was that the function was still needed. He asked what USAASA's role was in the R400 million that was allocated to STBs.
 
Ms Gabriel noted that USAASA should already have had a CFO. It had tried to appoint someone but that individual declined the offer. USAASA was experiencing difficulty drawing good leadership in to the entity. The CEO and CFO were in the process of being selected. USAASA was currently in the process of locking in dates for interviews.  
Ms Gabriel stated that the previous CEO was dismissed for sexual harassment. He was found guilty by the board after testimony from a witness. He was now forming a case with the Commission for Conciliation, Mediation and Arbitration (CCMA). However, USAASA was still able to fill the CEO position.
 
Ms Gabriel stated that the R400 million for STBs would be allocated to USAASA over the next three years. There were still a lot of questions to be answered concerning when the subsidy would be transferred. USAASA would administer the subsidy through USAF and would ensure that things were done properly. It would follow all the right policy procedures.
 
Ms Kilian noted that there were many institutions in the communications sector that were interconnected. She wondered how these institutions ensured that they were not working against each other. There was often the problem that many interconnectivity projects were being duplicated or replicated. She asked if the increase in USAASA's budget would have an impact on the way that they could advise ICASA, because ICASA was in desperate need of assistance.

Mr Molele stated that if institutions were just responsive to what they were mandated to do, then there would not be the problem of duplication. USAASA's strategies had to be aligned to the strategies of other entities.
 
Ms Gabriel added that the DoC was the coordinating structure and therefore had to work with entities on a coordinated agenda.

Mr K Zondi (IFP) asked if USAASA's legacy projects would be able to survive without help.

Ms Gabriel replied that currently the mentality was that no one wanted to take ownership of facilities provided by USAASA. USAASA was held responsible for all its initiatives. This was a challenge that USAASA would address.  The entity was now involved in hand-over projects. USAASA believed that with proper handover processes, the centres could survive.

Mr Kholwane stated that he was told that there were millions of rands just sitting in USAF. He asked how much the Fund currently held.

Ms Gabriel answered that USAF held approximately R800 million at the end of the last financial year. About R400 million would be used for the roll out of STBs.

Ms Kilian noted that USAASA had set goals previously that were not yet achieved. It should, in its reports, distinguish between the goals that were set, and those that were achieved.

Ms Gabriel agreed. USAASA was not even at the point where it could achieve all the goals. It needed to “beef up” the monitoring and evaluation mechanisms. When USAASA received its new budget it would be able to achieve what it wanted to. USAASA was not going to be demoralised by negative comments made by the Committee because its members knew how hard they had been working. However, USAASA agreed that it could not make excuses for the lack of delivery and proper processes.

Mr Mkhize asked if USAASA had a long term strategy to maintain centres. He asked why USAASA was subsidising FET colleges when those students were already getting training.

Mr Lamani stated that USAASA subsidised centres so that they could be maintained. However, it was wary of centres becoming completely dependent on the subsidies. USAASA was in the process of monitoring the sustainability of centres.

Mr Lamani stated that the intention of providing FET colleges with funding was so that their training programmes could become successful.

Mr Kholwane stated that the Committee was at a point where it needed to streamline all the entities that were not working. He thought that some entities could be joined. He did not think that communications operators would like what was happening with USAF. The Fund was supposed to be used for ICT development.  

The Chairperson added that the Presidency was in the process of looking at all government entities’ functions. The time had come for the Committee to look critically at the issues. He suggested that the USAASA Board should make an honest assessment on the existence of USAASA, and then revert to the Committee to justify why it should either exist as a separate entity or merge with other entities. He did not see the point of having many small institutions. They were doing good work but the scale of their impact was so small. The Committee would not make any decisions now concerning the future of USAASA, but would certainly be taking a closer look at the institution.

Ms Gabriel responded that it was not the Board’s job to say whether USAASA should “live or die”. USAASA believed it could make a difference in the ICT sector, even if this meant merging with other entities. She agreed that the communications sector could be more efficient, but reiterated that the Committee could not ask the board to decide the fate of USAASA.

Mr Kholwane clarified that the Committee was asking the board to help the Committee understand how USAASA could be more efficient and effective so the sector could move forward.

The Chairperson added that they Committee was not being difficult, but was actually giving the board a vote of confidence because it thought the board would give an honest assessment and an honest answer. The Committee did not have to approach USAASA, as it could have gone straight to the Ministry, but chose to speak to USAASA first. This was a serious task that the Committee was asking USAASA to undertake.

The meeting was adjourned.