Hon Chairperson, Minister and Deputy Minister of Communications, Chairperson of the Portfolio Committee on Communications, hon Members of Parliament, distinguished guests, ladies and gentlemen, ndi matsheloni, avuxeni, thobela, greetings.
I thank you, Chairperson, for this opportunity to share with fellow South Africans how the ANC-led government, as a principled leader of the process of fundamental change, has thus progressed in taking technology to the people in the service of the people. It has fulfilled the ANC governance mandate as enshrined in the statement of the national executive committee of the ANC on its 99th anniversary.
It is evident that the ANC will continue to be an organisation that is respected and cherished by the masses of people for what it represents and how it conducts itself in practice. Hence we are all up in arms against all the ills that have the potential of undermining our organisation's lofty core values, which are, serving the people. Therefore, the ANC-led government has put in place structures, processes, cultures and systems that engender the effective delivery of services to society at large.
The ANC ascribes to the values and principles governing public administration as provided for in section 195 of our Constitution. It is therefore non-negotiable that organs of state and public enterprises should uphold this constitutional principle. They must promote and maintain high standards of professional ethics, and promote the efficient, economic and effective use of resources. Then, services must be provided impartially, fairly, equitably and without bias. Also, people's needs must be responded to, and public administration must be accountable and transparent to the public.
Therefore, the ANC's election manifesto identified one of the key priority areas as being to fight against crime and corruption. This provision has been made solely to ensure that there is transparency, accountability, probity or fairness, and respect for all the stakeholders of government in all our dealings as the ANC-led government.
We are pleased to note that the Minister has signed a performance agreement with the President. One of the key performance indicators the department is faced with is to ensure that there is an improvement in oversight and monitoring of performance of its state-owned enterprises, namely the SABC, Sentech, Icasa, Usaasa, Nemisa, Sapo and the .za domain name. We want to thank Dr Harold Wesso for his stalwart leadership during the period in which he was acting. Now the department has some tools in place with which it will be able to monitor the implementation of the critical governance policies of the SOEs. All human resource policies and implementation must be reviewed annually and the outcomes of these must be reported to the Minister. This applies to all the entities.
All benefits applicable to management in particular and staff in general must be reviewed annually and reports submitted to the Minister. The boards are required to design for approval by the Minister schemes for the payment of bonuses to senior management and the executive, or variable payment schemes, or schemes that recognise and reward good and excellent performances by senior managers.
The department is also expected to monitor performance and to reinforce effectiveness of boards and board committees. All approved policies and terms of reference governing the constitution and work of the boards and board committees must be reviewed on an annual basis and reports of such reviews must be submitted to the Minister. Prepared, approved and annually reviewed delegations of authority from the board to the executive must be submitted to the Minister.
The other responsibility of the department is to enforce accountability in terms of the Public Finance Management Act. Each SOE must timeously submit a projection of revenue expenditure and borrowings for the financial year and a corporate plan, as required in terms of section 52 of the Public Finance Management Act. Each entity must submit annual reports and financial statements as required in terms of section 55 of the Public Finance Management Act.
The other responsibility of the department is the enforcement of financial reporting to the shareholder. In order to endeavour to strengthen accountability to the shareholder, the boards of SOEs must implement the following measures.
They must ring-fence all the government-allocated and project-specific funds and report on a quarterly or monthly basis on progress towards attainment of key milestones. They must submit on a monthly basis reports of all transactions exceeding an amount of R10 million, together with an indication of appropriate approval obtained for the transactions in terms of delegations of authority. On a monthly basis the entities must report to the Minister on all acts of criminal conduct and irregular and wasteful expenditure, together with their monetary values. They must also timeously submit management letters issued by the auditors, together with management response, to the Department of Communications.
Chairperson, the Department of Communications obtained a qualified audit opinion for the year ending in March 2010. The basis for the qualification was irregular expenditure amounting to R8 501 000 and R15 701 000. In all instances payments were made in contravention of the supply chain management regulations.
A fruitless and wasteful expenditure to the amount of R54 000 was incurred due to interest on the late payment of a Telkom account, cancellation of trips, and a duplicate payment to a service provider.
There were elements of noncompliance with the Public Finance Management Act. However, the committee noted the progress that was made under the stewardship of Dr Wesso in redressing all those issues. However, what now remains as the task for our brand-new director-general is to make sure that the transgressors of the Public Finance Management Act are brought to book.
The SA Post Office received a clean audit for the financial year ended 31 March 2010. This is an ideal governance model worth emulating. I would also like to congratulate them for the good work and say that they should maintain the good standard. [Applause.]
Sentech received a qualified audit opinion for the financial year ended 31 March 2010. The basis of the qualification was that the Accounting Authority was not able to confirm the fruitless and wasteful expenditure disclosed as R31 million, and the irregular expenditure disclosed as R14 million. This represented all fruitless and wasteful expenditure.
The Accounting Authority's report also raised the issue of whether it is a going concern. The accounting report further indicated that in the event that the DoC does not meet Sentech's request, there is significant doubt about the ability of Sentech to continue as a going concern. Therefore they may be unable to realise their assets and discharge their liabilities in the normal course of their business. There were issues of noncompliance with laws and regulations.
Let me take this opportunity to congratulate the Accounting Authority of Sentech for commencing the business rescue proceedings, and the progress made thus far is that the collection rate has improved drastically. The cash-generating position is now strong and has improved significantly. The board is confident that Sentech will continue to function as a going concern.
The committee therefore still awaits the comprehensive report detailing steps management and the board have taken, and consequences they have brought about, in relation to the fruitless, wasteful and irregular expenditure.
The Universal Service and Access Agency of South Africa, Usaasa, received a clean audit for the financial year ended 31 March 2010, with emphasis on matters of a fruitless and wasteful expenditure amounting to R65 885, and an irregular expenditure of R562 950.
The committee therefore still awaits the comprehensive report detailing the steps management and the board have taken, and the consequences they have brought about, in relation to fruitless, wasteful and irregular expenditure.
The SA Broadcasting Corporation, SABC - this is our chairperson's baby - received an unqualified audit report for the financial year ended 31 March 2010, with several emphases on several matters amongst others were the going concern issues.
It is pleasing to note that the SABC turnaround strategy is bearing fruit in terms of the corporation's desired outcomes. Progress has been made thus far. All members of the board have complied with the disclosure requirement and the board is fully functional. Thank you. [Time expired.] [Applause.]