Film and Publication Board & Government Printing Works on their Annual Reports for 2012/13

Home Affairs

15 October 2013
Chairperson: Ms M Maunye (ANC)
Share this page:

Meeting Summary

Two entities, the Film and Publication Board (FPB) and the Government Printing Works (GPW), presented their 2012/13 annual reports to the Portfolio Committee.

One of the key challenges faced by the FPB was the fact that there had been general misconceptions regarding the role of the FPB. One case in particular was that involving the painting The Spear, by Brett Murray, where the FPB was maliciously being classified as a censorship board. Other challenges included a high staff turnover, which the FPB had been working on curbing and a deficit of R11m, experienced due to the national consultancy for the new guidelines as subsidies received for this mandate had proven insufficient. User-generated content, such as those produced by home recording devices and cell phones had also caused critical problems as there was no way of classifying them before distribution. By the time public outcry reached the FPB, it had already escalated to being a case requiring police intervention.

The FPB reported that total revenue for the financial year 2012/2013 added up to R75.7m against a budget of R79.3m. Total expenditure included administrative expenses of R31.2m, general expenses of R53.3m, which excluded a non-cash item of R2.7m. A total expenditure of R87.4m was recorded, resulting in a deficit of R11.7m. The decline in revenue was related to a decline in the amount of material submitted for classification as well as the fact that three main distributors decided to stop the distribution of movies during the third and fourth quarters of the year under review, the two main periods for the generation of revenue.
An unqualified audit opinion was sustained. Non-compliance issues raised included changes on the annual financial statements where the FPB had disagreements with an agent in terms of disclosure of a list of vehicles, which also affected the balance in terms of actual expenditure. A second non-compliance issue was tender invitations from the FPB were not advertised in the government bulletin. In addition, R60 000 was recorded as irregular expenditure; however the full amount was recovered from the affected employees.

The Film and Publication Board received criticism on its frequent staff turnover and uneven employment equity concerning persons with disabilities and white people. It was also questioned about its relationship with the Independent Communications Authority of South Africa and its failure to finalise a Memorandum of Understanding between itself and the authority. The Film and Publication Board also raised issues relating to work-related trauma resulting from exposure to explicit content that had a detrimental effect on its staff, the reworking of The Film and Publication Act as well as its public image and relations with the Broadcasting Complaints Commission of South Africa.

The Government Printing Works (GPW) maintained an unqualified audit report, something it has managed since 2010. Findings in the audit report had been reduced from 42 down to only three. One major finding was related to debtor management where government departments placing orders with GPW were waiting for invoices to be signed off, specifically from the Department of Home Affairs. With regards to this, the Auditor General had stated that government would have needed to pay within 30 days, otherwise accounts would have had to be suspended. Other targets not achieved included a 27% gross profit margin; 100% revised draft supply chain management framework and policy; and R343 085m investment in additional production assets. Profit for the year had decreased due to operating expenses of new equipment and implementation of technology for the new Identity Smart Card project. Debtors days outstanding stood at 88 days.

Most of the targets under the human resources staffing plan were not achieved. The training and development plan and human resources policies and procedures targets were achieved. The special remuneration dispensation target was not achieved. Key challenges included the delay with the Department of Public Works in refurbishing a new building in Visage Street, Pretoria, where the new equipment was to be moved and the fluctuation of higher volumes of the new Identity Smart Cards that was still being handled by a limited staff output.

The Government Printing Works impressed the Committee with its innovative leaps in technology related to the new Identity Smart Cards and all the facilities and renovations around these new developments. The biggest issues raised were the questions around whether GPW would have been able to produce the high volume of Identity Cards over the next six to seven years and the delay in the new facility that was being renovated on Visage Street, Pretoria. The Committee was concerned by the drop in revenue received by the Government Printing Works but impressed with the 30% return on investment against a target of 14%, seeing that the entity offered its services mainly to government departments.
 

Meeting report

Opening Remarks by the Chairperson
The Chairperson welcomed all present. She remarked that the Film and Publication Board (FPB) did not have a Chief Executive Officer (CEO) and that she and the Committee were interested in hearing the details of this development. Apologies were tendered by Ms Thoko Mpuhlwana, the Chairperson of the FPB.

Briefing by the Film and Publication Board (FPB)
Ms Natalie Skeepers, Deputy Chairperson, FPB, presented the organisation’s key achievements for the year. FPB had reached over 500 000 community members during awareness campaigns and more people in rural than in urban areas. It had reviewed its legislation – The Film and Publication Act – as a Constitutional Court case dealing with child pornography had proven the Act’s definition of child pornography open to challenges. New classification guidelines had therefore been published, resulting in fewer appeals against classification decisions. The FPB had also operationalised its online compliance monitoring, especially monitoring social networks such as Facebook and Twitter.
Other achievements included the gazetting and implementation of FPB Guidelines; the classification of 96% of the material that was submitted; the classification internship programme; the results of a convergence survey which indicated a 74% convergence by Gauteng Cinema goers with FPB Classification decisions; and an unqualified audit opinion.

One of the key challenges faced by the FPB was the fact that there had been general misconceptions regarding the role of the FPB. One case in particular was that involving the painting The Spear, by Brett Murray, where the FPB was maliciously being classified as a censorship board. Other challenges included a high staff turnover, which the FPB had been working on curbing and a deficit of R11m, experienced due to the national consultancy for the new guidelines as subsidies received for this mandate had proven insufficient. User-generated content, such as those produced by home recording devices and cell phones had also caused critical problems as there was no way of classifying them before distribution. By the time public outcry reached the FPB, it had already escalated to being a case requiring police intervention.

Strategic Objectives
The FPB’s strategic objective were: to provide effective and visible monitoring of films, games and certain publications; to ensure that consumers, general members of the public, and industry were informed about the mandate of the FPB; and effective and efficient management of FPB operations.
In order to ensure effective and visible monitoring of films, games and certain publications, the FPB implemented content classification and labelling, implemented distributor identification and registration; conducted compliance inspection and industry audits; implement initiatives to ensure cyber safety and child online protection; developed strategic partnerships and stakeholder relations; and pursued international regulatory alignment.

Almost all of the content classification and labelling targets were achieved with the exception of the revamp and implementation of a penalty system, which was delayed due to unavailability of key distributers. The majority of distributer and registration were achieved, although conversions to new registrations and closures and social networks identification and trend analysis were only partially achieved. Most conduct compliance inspections and industry audit targets were partially achieved, although the target to perform 6000 physical platform inspections was nearly achieved, with 94% of the inspections completed. The industry audits and compliance initiatives targets were achieved. Under cyber safety and online child protection, the targets involving online and telephonic tools, and the development and maintenance of an information hub, were achieved. The implementation of a filtering system and conclusion of a Memorandum of Understanding (MoU) with at least three organisations for online child protection were partially achieved. All targets to develop strategic partnerships and stakeholder relations were achieved, except for the target of benchmarking child online protection and classification in SADC.

The second strategic outcome was to ensure that consumers, general members of the public, and industry were informed about the mandate of the FPB. In order to achieve this the FPB had two initiatives: to implement a Public Relations Programme aimed at profiling the FPB as a visible, credible and professionally run organisation and creating brand awareness; and to conduct outreach and awareness programs. All of the public relations and brand profiling targets were achieved, except for the publishing of an external newsletter, which was only published after the end of the financial year. Four multi-unit outreach programmes were held.

In order to achieve outcome three, effective and efficient management of FPB operations, FPB aimed to: implement a turnaround support program; implement a Customer Care Centre; implement an Internal Communications Plan; implement an HR improvement and compliance program; amend the regulation fee structure; conduct industry research to enhance regulation; develop and implement an organisational Compliance and Risk Management Strategy; implement organisational performance management and reporting, including automation of processes; implement relevant finance and supply chain management initiatives; implement information technology (IT) initiatives geared towards improvement of IT value and performance; and launch IT Program Management. The vast majority of these targets were achieved. However, migration to a new structure under the turnaround support programme was only partially (80%) achieved; the strategy for the customer care centre was developed and approved, but the call centre implementation was delayed while awaiting the office expansion project; the regulation fees target was only partially achieved; and the quarterly service providers performance review was only partially achieved.

Human Resources
FPB had 79 staff, of which 44 were female, and 75 were of previously disadvantaged races. There was one employee with disabilities.

Financial Statements and Audit Report
Mr Tebogo Matabane, Chief Financial Officer (CFO), FPB, presented the financial statements of the FPB, which saw revenue of R69.8m received as grants from the Department of Home Affairs (DHA), up from R65.4m in the previous fiscal year, and R5.9 million received as regulation fees, down from R7.5m in the previous year. The total revenue for the financial year 2012/2013 added up to R75.7m against a budget of R79.3m. Total expenditure included administrative expenses of R31.2m, general expenses of R53.3m, which excluded a non-cash item of R2.7m. FPB also disclosed on their financial statements in relation to depreciation. A total expenditure of R87.4m was recorded, resulting in a deficit of R11.7m. The decline in revenue was related to a decline in the amount of material submitted for classification as well as the fact that three main distributors decided to stop the distribution of movies during the third and fourth quarters of the year under review, the two main periods for the generation of revenue.

An unqualified audit opinion was sustained. Non-compliance issues raised included changes on the annual financial statements where the FPB had disagreements with an agent in terms of disclosure of a list of vehicles, which also affected the balance in terms of actual expenditure. A second non-compliance issue was tender invitations from the FPB were not advertised in the government bulletin. In addition, R60 000 was recorded as irregular expenditure; however the full amount was recovered from the affected employees.

Discussion
The Chairperson asked how many years Mr Jonas had been acting as CEO.

Mr Jonas Phoshoko, acting CEO, FPB, responded that it was his first year in the position.

Ms H Makhuba (IFP) asked, referring to page 15 of the Annual Report, why the Memorandum of Understanding (MoU) with the Independent Communications Authority of South Africa (ICASA) in relation to internet service providers (ISPs) was not concluded. She then asked for clarification as to the structure, purpose and locations of the multi-unit outreach programmes that were being done. In addition, she referred to page 35 of the Annual Report, cited one disabled employee and asked how many disabled persons should have been employed by the FPB.

Mr G Mc Intosh (COPE) asked when and why the CEO had resigned. He also asked what interns were doing at the FPB. Finally, he commented on the fact that there were very few white employees at the FPB.

Ms Skeepers replied that the previous CEO had resigned at the end of July for a position as Chief Operations Officer with the Department of Public Enterprises. She emphasised that the CEO did not leave under any notorious circumstances and that her contract with the FPB would have been ending in November.

Mr Sipho Risiba, The Chief Operations Officer (COO), FPB, reiterated the purpose of the MoU, saying that ICASA had been issuing licenses to the ISPs without first ensuring that they were complying with the regulations of the FPB. This necessitated collaboration. Although meetings had been held with ICASA and an MoU was proposed, by the end of the financial year under review, ICASA had informed them that the document was still under consideration at council level and could therefore not be finalised.

Mr Phoshoko replied that interns worked both as classifiers and under learnership of the processes of classification. He also responded to the question pertaining to multi-outreach programmes saying that this involved going into communities and informing them about the work of the FPB. This also involved law enforcement training, service training to cinema staff and cyber-safety and the dangers of child pornography at schools.

Ms Palesa Kadi, Shared Services Executive, FPB, replied to the question of the employment of disabled persons, saying that many applicants did not state whether they were disabled and therefore it was not easy to find disabled individuals. Thus the FPB has elicited the assistance of a recruitment agency that specialised in the selection and evaluation of job seekers abled in other skills but that due to the nature of the tools used at the FPB, this also made the task daunting as it would have been limited in employing people who were, for example, visually or hearing impaired. Furthermore, she stated that 3% of the staff at the FPB needed to be of the disabled grouping (less than 5 employees out of the 79) but by the end of the year under review, it was at 1%. She further went on to respond to the comment regarding the lack of white staff, saying that they had had many white staff in the past but that they had since been part of the high staff turnover, many getting better offers from other companies. However, the FPB has been submitting to their regulation of having at least one white person (and equal members of other races, religions, sexes and other groupings) as part of the committees sitting in on the classification processes.

The Chairperson asked why the online compliance monitors had resigned. She also asked whether the need for an MoU had caused a rift in the relationship between FPB and ICASA.

Ms T Gasebonwe (ANC) said that she had notice that the FPB had moved many of its targets of the year under review over to the 2013/2014 financial year and had asked, seeing that the FPB was already running behind schedule, how that was going to affect its programme.

Ms H Makhuba (IFP) asked which four provinces had been targeted in multi-outreach programmes.

Ms P Petersen-Maduna (ANC) asked for further clarification of the reasons why only one person with disabilities was employed.

Ms Palesa Kadi replied that, due to the nature of work done at the FPB, one of the online compliance monitors had resigned, citing the traumatic content that he was exposed to, specifically child pornography. The other monitor, who was also the individual with a disability, had stated that he was also considering resigning because of job-related trauma. FPB, learning from other regulators abroad, was looking at methods of reducing the exposure of employees to harmful content and was hoping these methods would reduce staff turnover. Individuals were selected by an agency that specialised evaluating the job readiness of people with disabilities. Finally, Ms Kadi responded to the issue pertaining to the carryover of targets into the next financial year saying that they had achieved 90% of targets for the year under review, that the remaining percentage amounted to only one programme that was carried over and that the FPB has put in place a monitoring system to find the best ways of starting each year on a clean slate.

Mr Risiba replied that the FPB had an excellent working relationship, not only with ICASA, but broadcasters and the Broadcasting Complaints Commission of South Africa (BCCSA) and other stakeholders. He cited workshops that were held in which these, and more, stakeholders were present and that they had agreed, even in the absence of an MoU, to work closely with the FPB.

Mr Jonas Phoshoko responded to the question regarding the multi-outreach programmes, saying that programmes were undertaken in the Eastern Cape, Kwa-Zulu Natal, Gauteng and the Northern Cape.

Remarks by the Chairperson
The Chairperson thanked the FPB its presentation and then welcomed the next presentation of the Annual Report of the Government Printing Works (GPW). She apologised to the CEO, Mr Anthony Mbewu, for not having heeded many invitations to visit GPW and has asked the Secretary of the Committee to highlight that excursion as a priority either in November.

Briefing by the Government Printing Works (GPW)
Mr Anthony Mbewu, CEO, GPW presented the major highlights of GWP’s year. The new Identity Smart Card that was launched on 18th of July 2013, and the public roll-out of the Identity Smart Card was done on the same day. GPW also boasted new world-class machines to manufacture these new Smart Cards. 38 million of them were to be rolled out over the following three to five years, phasing out the old Green Identity Documents. GPW had stated that the new identity cards would cost citizens R140. 100% of exam papers were delivered and no losses were reported in terms of security documents.

GPW’s strategic outcome oriented goals were: to develop the Government Component organisation to perform as a sustainable ring-fenced business entity with flexibility and within regulated parameters; to optimise processes and facilities to increase operational effectiveness and improved customer service; and to have an efficient, effective and well-trained/developed workforce and special remuneration dispensation for the Government Component. There were four business divisions: operations and production; strategic management; financial services; and human resource management.

The operations and production branch achieved just over half of its targets. The production of passports had declined substantially from 1 259 611 in the financial year 2008/2009, when the new passports were rolled out, to 627 153 in financial year under review. These were projected to increase as soon as government changed to the new e-passport system. The Government Gazette was also projected to have fewer editions printed once more readers had subscribed to electronic, paperless versions.

The strategic management branch achieved most of its targets, however the new brand and logo was not developed and the new marketing strategy was not completed. The Annual Internal Audit Plan was developed and adopted, however due to the absence of risk assessment the plan was not risk based, and 13% of the plan was not implemented. GPW had also launched a new website on the .co.za domain which been working in conjunction with its existing website. The reason for this launch was due to the fact that the .gov.za domain site was limiting as GPW needed to run itself not only as a government department but as a business as well. In addition, GPW had spent a considerable amount of time and money on training its staff, especially with regards to computer literacy.

Key challenges included the delay with the Department of Public Works in refurbishing a new building in Visage Street, Pretoria, where the new equipment was to be moved and the fluctuation of higher volumes of the new Identity Smart Cards that was still being handled by a limited staff output.

Mr Rassie Barnard, CFO, GPW, presented the financial aspects of the report. GPW had maintained an unqualified audit report since 2010. Findings in the audit report had been reduced from 42 down to only three. One major finding was related to debtor management where government departments placing orders with GPW were waiting for invoices to be signed off, specifically from the Department of Home Affairs. With regards to this, the Auditor General had stated that government would have needed to pay within 30 days, otherwise accounts would have had to be suspended. Other targets not achieved included a 27% gross profit margin; 100% revised draft supply chain management (SCM) framework and policy; and R343 085m investment in additional production assets. Profit for the year had decreased due to operating expenses of new equipment and implementation of technology for the new Identity Smart Card project. Debtors days outstanding stood at 88 days.

Most of the targets under the human resources staffing plan were not achieved. The training and development plan and human resources policies and procedures targets were achieved. The special remuneration dispensation target was not achieved.

Discussion
Mr A Gaum (ANC) commented that if the Independent Electoral Committee (IEC) with all of their complicated operations could accomplish a clean audit, GPW may also be able to do so. He then asked whether GPW had capacity to fully roll out 38 million identity cards over the following six to seven years. How would the costs of the delivery of the new identity cards be covered?

Ms N Mnisi (ANC) echoed sentiments of commendation. She asked about slow development of facility in Visage Street and wanted to know which issues were causing this blockage. What had caused the reduction in total income of GPW?

Mr G Mc Intosh also commended the great work and the keeping of the Old Building from 1897 in Visage Street. He inquired as to how it was possible that GPW had achieved a 30% return on its investment against a 14% target and whether this was a sign that other departments were being exploited. He also asked whether GPW produced any of the Annual Reports of the other government departments.

Mr Mbewu replied that GPW could have produced up to 18 Million Identity Smart Cards per year, but that limiting would be only have been on the side of the Department of Home Affairs to have introduced the Smart Capture systems into all of its offices across the country. Skynet was the courier company that delivered the Identity Smart Cards and all costs involved were included in the R140 paid by the citizen. He further responded to the question on the slow development of the Visage Street facility and has pointed out that the blockage was on the side of the Department of Public Works

Mr Barnard replied that GPW did not charge exorbitant prices as it competed with the public sector. GPW had taken many steps to reduce operational costs and this, coupled with the fact the highly competitive service rendered, had afforded it a high return on investments. Not all Annual Reports were printed by GPW.

The meeting was adjourned.
 

Present

  • We don't have attendance info for this committee meeting

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: