Presentation to Portfolio Committee on Telecommunications & Postal Services Committee Chairperson, Honourable Ms. Mmamoloko Kubayi USAASA & USAF Quarter

Presentation to Portfolio Committee on Telecommunications & Postal Services Committee Chairperson, Honourable Ms. Mmamoloko Kubayi

USAASA & USAF Quarter 3 Peformance Report17 March 2015

“Universal Access and Service to ICT for All”

USAASAQuarter 3 Performance Report

USAASA Quarter 3 Programme Performance Reporting

Year to date USAASA Performance

Unit Total of Q3 targets

Achieved targets

Partially targets

Not achieved

%achieve

ment

Governance 6 6 0 0 100%

PM&E 12 12 0 0 100%

Int. Audit 16 16 0 0 100%

Risk Mgmt. 3 3 0 0 100%

Stakeholder 12 9 2 1 75%

Finance 15 12 3 0 80%

IT 29 29 0 0 100%

HR 19 10 3 6 53%

Admin 3 3 0 0 100%

Legal 12 9 0 3 75%

Total Planned 127 109 8 10 86%

USAASA Strategic Objective :

•To promote an effective, efficient and well – resourced organisation that upholds the principles of good corporate governance.

•USAASA has 41 planned targets under the quarter review and most of the planned targets will be achieved in the close of Quarter 4.

•At the close of Quarter, the Board of USAASA approved the proposed organisational structure of the Agency and the process will trigger the full implementation of the Organisational Development Process that will see the Agency being technically capacitated I order to respond to the requirements of the South African Connect Broadband Policy, 2013; the National Development Plan and the National Infrastructure Plan [SIP 15]

Annual Target Quarterly Target Actual Achievements Comments

At least 4 USAASA BoardAt least 4 USAF BoardAt least 6 Audit & Risk At least 4 BDS At least 4 REMCO2 Social & Ethics

USAASA & USAF BoardAudit & Risk CommitteeBDS committeeSocial & Ethics Committee

Partially Social & Ethics Committee was convened 17 Feb 15

A minimum of EXCO meetings conducted throughout the year

Minimum of 3 EXCO meetings conducted Achieved EXCO is convened

frequently to look at management functions

USAASA & USAF Strategic & APP Plans approved by Board and submitted to Minister

USAASA & USAF 2015/2016 strategy & APP reviewed and developed

Achieved Strategic Plans & APP delivered on 23 January 2015 to DPTS

Monitoring & Evaluation of organisational performance

Achieved USAASA & USAF Quarter 3 Performance Information Reports were submitted to DPTS on 31 January 2015

Approved USAASA & USAF quarterly reports submitted to DPTS 30 days after each quarter

USAASA & USAF 2nd Quarter reports presented to the DPTS

Achieved The report was presented to DPTS on the 6th November 2014

USAASA Q3 Programme Performance Reporting


USAASA & USAF Annual Reports developed and tabled at Parliament

USAASA & USAF 2013/2014 Annual Reports tabled at Parliament

Achieved The reports were tabled on the 25th September 2014

21 audits conducted as per approved annual audit plan in order to strengthen the Agency’s internal controls

SCM Q2 Expenditure (below threshold)

Achieved Audit conducted

SCM Q2 Expenditure (above threshold)


Review of the “Smart” criteria for the 2015/2016 targets

Not achieved Audit conducted after the Strategic Plans & APP were finalised in January 2015

Financial Statements Achieved Audit conducted

Expenditure Financial Management


Corporate services audit Partially achieved Audit finalised in December 2014 and the management response was done in January 2015



USAASA & USAF top 10 risks identified and monitored

Monitoring of control improvement plan on the 10 risk exposures

Achieved The risk register on top 10 risks was updated on monthly basis .

Improvement stakeholder perceptions of USAASA by 80% of the baseline of +38%

26.6% improvement on +38 approved baseline Achieved The stakeholder

perceptions of USAASA has been improved by + 38

60% Support and awareness of the Fund Manual by the targeted stakeholders

Updates on priority changes on the distribution on the funds based on the Fund Manual

Not Achieved There was no updates done on priority changes on the distribution on the funds based on Fund Manual as the manual is not fully implemented

60% stakeholder’s support of the ICT National Strategy

60% support and awareness of the National Strategy for Universal Service & Access

Achieved Multi - stakeholder forum conducted for the support and possible funding of the National Strategy for Universal Service & Access

Project awareness campaigns conducted – below and above the line e.g. public relations drives and industry theatre

50% awareness of projects Achieved Engagements with North West and Northern Cape on projects



Produce accurate financial statements with the objective to get an unqualified audit opinion

100% complaint & accurate financial statements Achieved The accurate financial

under the quarter review were produced

95 % of the actual expenditure spend in line with the allocated budget

95% of the actual expenditure in the quarter spent in the line with the allocated budget

Partially achieved USAASA 93 % was achieved and USAF was not achieved due to delay programme implementation of DTT programme

100% match between the physical assets and the asset register

Perform a physical verification at the provinces

Achieved 100 % match was attained

80% compliance with the laws & regulations pertaining to treasury, supply chain and regulations

Compliance with the laws & regulations pertaining to treasury, supply chain and the statutory regulations.

Achieved 80% compliance was attained

80% of USAASA and USAF procurement from BBBEE

80% purchases from suppliers with level 1 – 5 BBBEE rating

Achieved 85% attainment


Annual Target Quarterly Target Actual Achievements

Comments

90% compliance to IT governance

Maintenance of business continuity/ Disaster Recovery Achieved Data is replicated to the DR site to

comply with USAASA Disaster Recovery Plan.

Perform backups of data Achieved Data is being backed up to comply with backup processes and to address AG findings

Maintain Service Desk System Achieved Service Desk system is maintain to produce reports on calls logged in Quarter 3 and monitor on IT performance

Monitor IT performance Achieved IT systems availability were at 100% excluding e-mail that was measured at 97% in Quarter 3.

95% Availability of business systems

IT Strategy implemented as per roadmap

Achieved IT Governance Roadmap implementation at 81% in Quarter 3

Revision, approval and implementation of new/old IT Policies

Achieved 100% adherence to approved IT Governance Charter.

Maximum 10% security breach incidents reported

Monitor and report on security breaches

Achieved No security breaches to USAASA IT systems were encountered in Quarter 3 due to robust IT systems



Reduce risks associated with litigations against the Agency by 5%

Coordinate and monitor litigations (civil and labour)

Achieved Litigation at High Court and Labour Court as well as CCMA coordinated

Coordinate with HR to develop legal compliance training

Not Achieved No training has been developed

Monitor existing contracts , negotiate, draft and approve contracts as per specifications and scope

Achieved 35 SLA/ contracts drafted and approved5 negotiated contracts

Appointment of legal representative to act on behalf of the Agency during litigations associated with the Agency

Provide internal well written and legal opinions with 7 days of request to mitigate litigation risk to USAASA

Achieved 4 Legal opinions 5 Legal advice13 Legal letters

90% compliance with Occupational Health, Safety and Environmental Act

90% compliance with Occupational Health, Safety and Environment

Achieved All sections of OHS Act have been complied with



Employee wellness programme activity conducted per quarter

Promote and facilitate participation of staff in employment wellness programme

Not Achieved Employee wellness programme launched at 30 Jan 2015

Introduce a leadership training programme for all managers within the Agency

Facilitate delivery of leadership training

Not Achieved Training will resume once the matching & placement phase of OD project is completed

Timeous submission of performance agreements & performance assessments by business units

Coordinate performance review

Not Achieved Measures put in place to ensure that all performance reviews are completed at the end of the financial year.

80% satisfactory employment relations based on the survey questionnaire conducted

Develop a programme of action on employee assistance programme

Not Achieved The organisation is undertaking an OD process and the survey questionnaire was delayed.



Ensure that employees’ grievances and disciplinary cases handled are less than 5% of our staff complement

Investigate disputes within 30 days. Mediate on disputes . Recommend suitable interventions

Not measured There were no grievances in the current quarter.

60% Implementation of approved Organisation Development Plan

Implementation of operational structure, training and performance managementDevelop performance management framework

Not Achieved Operational structure has been approved by Board for implementation under 4th quarter period.


Summary of USAASA Quarter 3 Performance exc. BDM

Achieved Partially Achieved Not Achieved

29 3 9

41 PLANNED TARGETS

Summary of the Usaasa Cumulative performance

1 109 of the 127 planned targets were achieved being 86% of the total planned target

2 8 of the 127 planned targets were partially achieved being 6 % of the planned targets

3 10 of the 127 planned targets were not achieved, being 8% of the planned targets

USAASA Quarter 3 Budget Performance Expenditure

Description Budget Income(R ) Actual Income (R )

Revenue

Other Income 14,500 408,047

Transferred received 16,257,000 16,257,000

Total revenue 16,271,500 16,665,047

Description Budget Expenditure (R ) Actual Expenditure (R )

Expenses

Total Current expenses 16,257,000 16,884,869

Compensation of employees 9,922,920 9,842,725

Goods and services 6,334,080 6,079,205

Depreciation - 962,939

Total expenses 16,257,000 16,884,869

Surplus/(Deficit) (219,822)

The overspending is due to the depreciation line which does not get budgeted as it is a non cash item.

USAFQuarter 3 Performance Report

Integrated Broadband Projects Integrated Broadband Projects Broadband The ITA for a subsidy to rollout broadband at Ratlou & Joe Morolong has been advertised, evaluated, adjudicated and appointed.Commencement of work on the 2 broadband network sites has begun & 60% of the equipment required has been procured and accounted by the close of the 3rd quarter.Schools Connectivity The project is aimed ay deploying internet access devices such as tablets or notebooks at schools & creates schools as Wifi hotspots10 schools from the mainstream and 5 schools of the Persons With Disability at Ratlou and Joe Morolong has been deployed and fully connected at the close of the quarter under review.

BDMDevelopment and publication of the Qualifying Criteria for public comment via the GG. Given the intense interest in the project, the submission was moved into the 4th quarter.Procurement process for the manufacturing of STBs was initiated in conjunction with DPTS and National Treasury. The Board expects to finalise the appointment of manufactures in the course of the fourth quarter.

Integrated Broadband Programme

2 broadband sites at Local Municipality

10 schools from the mainstream and 5 schools for Persons with Disabilities

connected to ICT services

Ratlou – North West

Joe Morolong – Northern Cape

Synopsis of Quarter 3 Performance Report for USAF Projects

BDMDigital Broadcasting Migration

Publication of GG38134 on 28th October 2014 and the RFPs on STBS manufacturing process triggered the implementation of

the DTT programme.

Nationally starting with the borders

Summary of USAF Q3 Performance exc. BDM

Achieved Partially Achieved Not Achieved

3 0 0

Summary of USAF Cumulative Performance excl. the BDM

1. Quarterly targets against the planned quarterly targets in the 2014/15 approved Annual Performance Plan

2. All 9 targets were achieved as planned, which makes it a 100% achievement.

Description Budgeted Income(R ) Actual Income (R )

Revenue

Other Income (Interest) 5,000,000 13,840,198

Transferred received 895,000 895,000

Total revenue 5,895000 14,735,198

Description Budgeted Expenditure (R ) Actual Expenditure (R )

Broadband Infrastructure 10,750,000 10,829,482

STB Subsidies for DBM - -

Rapid Deployment - 5,700,047

Connectivity - 2,850,466

Access Centre Hand Over - 408,061

Bank Charges & audit Fees 203,740 73,759

Project Costs 691,690 1,085,166

National Strategy - (482,720)

Total Expenditure 11,645,430 20,464,261

Surplus (deficit) (5, 729,063)

There was overspending of 28% during the 3rd quarter, this was as a result of underspending during the first two quarters. The unspent funds which were received during the first two quarters got to be spent in Q3, levelling the budget overall.

USAF Quarter 3 Budget Performance Expenditure

Matters raised by Auditor – General Response by Board Audit & Risk Committee

Auditor – General Findings

The BARC engagement with the AG resulted in the following status of audit findings:

1. Incorrect classification of expenditure and depreciation on the asset register

2. Non – disclosure of fruitless and wasteful expenditure and receivables written- off

3. Over – provision of workmen’s compensation and revenue4. Lack of supporting information to journals passed.

Misstatement –

All these issues raised by the AG were resolved.

1. Condonation of irregular expenditure approved by the Board instead of National Treasury,

2. Incorrect deficiencies with leave management 3. Non –compliance to SCM process in the purchase of vehicle & three

quotations, 4. Inconsistency between bid specification & Bid Evaluation Committee 5. Preferential points incorrectly calculated.

SCM –

All these issues raised by the AG were resolved, except for non-compliance to SCM processes in the purchase of vehicle.

1. Over-statement of actual performance report2. Lack of clear process on the measurement of achievements3. Non-alignment between planned and reported targets

Performance Information – All these issues raised by the AG were resolved.

1. Inadequate back – up process in place IT issues

All these issues raised by the AG were resolved.

Clean Audit

22

BARC Mitigating Action Plans


23

24


BARC recommended the following:

The Chief Executive Officer together with Audit Executive, monitors the status of the implementation of action plans on a monthly basis, and report quarterly to

Board Audit & Risk Committee

The quarterly strategic and operational risk assessment

workshops, resulting in top 10 risk registers and operational risk registers

Internal Audit review management action plans on each audit finding to ensure that these actions address the root causes and not symptoms

Management reports on the Agency’s performance on quarterly basis to

Board Audit & Risk Committee

Internal Audit verifies the implementation of actions plans

status & report to the Board Audit & Risk Committee on quarterly basis

The implementation of the Non-Compliance register, which us

reported to the Board Audit & Risk Committee on a quarterly basis

THANK YOU

Documents

Presentation to Portfolio Committee on Telecommunications & Postal Services Committee Chairperson, Honourable Ms. Mmamoloko Kubayi USAASA & USAF Quarter