State Information Technology Agency Amendment Bill State Information Technology Agency Amendment Bill [B 24B -2002] September 2002

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  • State Information Technology AgencyAmendment Bill [B 24B -2002]

    September 2002

  • ContentMain purpose of Billnew business modelSubstantial amendmentsSubsidiaries, objects & functions of SITA, Boards constitution, transfer of staff & assets, rates for service, auditing, exemption, share capital, regulationsConsultation

  • Main purpose of Billincorporate new business modelamend share capitalincrease number of Board members

  • New business model (1)IT House of Valuesecurityinteroperabilityeconomies of scaleselimination of duplicationAims of House of Valuelowering costsincreasing productivityenhancing service delivery

  • New business model (2)Establish subsidiaries to realise IT House of ValueRedefine compulsory & optional services of SITA to align it with IT House of ValueDuty on SITA to uphold & enhance IT House of Value in performing functions

  • Substantial amendments (1):SubsidiariesExpress provision for SITA toestablish subsidiaries, eg e-Services to procure IT goods & services through IT Acquisition Centre (ITAC)Subsidiary performs such functions as SITA (holding company) may delegate to itmay impose conditionstransfer shares in subsidiaries to 3rd personsrequires Cabinets approval fornumber of shares to be transferredpersons to whom shares are to be transferredconditions of transfer Clause 3: section 3A

  • Substantial amendments (2): Objects of SITAAdjust objects of SITA to emphasise its role in using IT topromote efficiency of departments & public bodies (ie constitutional institutions, public entities, municipalities & legislatures)improve service deliveryClause 4: section 6

  • Substantial amendments (3):Duties & powers of SITAServices that SITA must & may render are redefinedCertain listed services must, if required, be rendered to national & provincial departments (compulsory services), provision ofprivate telecommunication network or value-added network service ito Telecommunications Act (wide area networks)transversal information systemsdata-processing or associated services for transversal information systemsClause 5: section 7(1)(a)

  • Substantial amendments (4):Duties & powers of SITACertain listed services may, if required, be rendered to departments (optional services)training in IT or IT systemsapplication software developmentmaintenance services for IT software/infrastructuredata-processing or associated services for departmentally specific IT applications/systemsmanagement services for IT or IT systemsPublic bodies have choice whether to use any of listed services Clause 5: section 7(1)(b)

  • Substantial amendments (5):Duties & powers of SITA contUnder current Act SITA must act as procurement agency for IT requirementsunequivocally establish SITAs role as sole IT goods & services procurement agency for all departmentsDepartments requiring compulsory service mustacquire it from SITA orif SITA cant provide it, procure it through SITADepartments requiring optional service may choose to acquire it from SITA or through procurement, ie not obliged to use SITACurrent system of phased-in (full) participation by departments are replaced by more flexible arrangement Clause 5: section 7(3) &(4)

  • Substantial amendments (6):Duties & powers of SITA contDepartments must conclude business & service level agreements with SITA to regulate compulsory & optional services that it intends to useCompulsory terms of business agreement to be prescribed by regulationExisting business & service level agreements to be phased out within 36 monthsDepartment & SITA must conclude new BA & SLAClause 13: section 20

  • Substantial amendments (7):Duties & powers of SITA contServices used by department in respect of which component initially constituted SITA must continue to use those services (s3(4) of current Act)unless terminated by agreement between by relevant department & SITAcomponent = Central Computer Services, Infoplan, sub-component Information Systems in Dept of Safety & SecurityAssets of these components transferred to SITA (ito current s19(2)) remain SITAs assets & its return may not be requestedClause 2: section 3(4A)

  • Substantial amendments (8):Duties & powers of SITA contSITA must set standards forinteroperability of information systemssubject to Minister for Public Service & Administrations approvalinformation systems security environmentsubject to said Minister & Minister of Intelligences approval

    SITA must certify all acquisition of IT goods/service for compliance with these standardsClause 5: section 7(6)

  • Substantial amendments (9):Duties & powers of SITA contSITA mayexclusively sell or provide authentication products or services for all departmentson request, sell or provide such products or services for public bodyapply for accreditation of those products/services ito E-Communications & Transactions ActIf not provided by SITA, department must & public body may procure it through SITA from preferred authentication service providers (s28(2) of E-Com & Trans Act)Clause 5: Section 7(6)(c) & (7)

  • Substantial amendments (10):Duties & powers of SITA contSITA may conduct research regarding use of IT to improve efficiency of public administrationIn performing functions SITA must-eliminate unnecessary duplication of IT goods/servicesleverage economies of scale to provide cost-effective servicecomply with-government policies on information management & ITregulations made under SITA Act & Public Service ActPreferential Procurement Policy Framework Act

    Clause 5: section 7(6)(d) & (8)

  • Substantial amendments (11):Constitution of BoardCurrent Actmaximum of 10 members/directors with not more than 3 executive directorsAim of proposed amendment is to enable appointment of up to 6 executive directors on board, eg: SITA MD (Group CEO)chief operating officer & chief financial officer of SITA (holding company)CEO of each of 3 subsidiaries

    Clause 6: section 10

  • Substantial amendment (12):Constitution of Board contProposed amendment requiresincreasing maximum to 14 to ensure non-executive directors remain majority in line with corporate governancereplacing limitation of 3 executive directors with requirement that majority of directors must be non-executivemaximum of executive directors never more than 6 -eg 6 executive & 8 non-executiveIncrease in non-executive directors - assist in ensuring experts in financial management, governance and IT networks, security, interoperability & procurement serve on board

  • Substantial amendments (13):Constitution of Board contProvision made for Minister to appoint alternate member for every non-executive memberAim: Absence of non-executive members should not prevent Board from continuing with its businessAlternate may attend & vote at Board meetings that member is unable to attendServe same term as member in respect of whom he/she is appointed & also vacates office with him/her

    Majority of non-executive directors forms quorum

  • Substantial amendments (14):Transfer of staff & assetsSITA must offer employment to IT practitioner of department associated with compulsory/optional service when department uses SITA for that serviceClause 8: section 15(1)When compulsory services are used, all assets must be transferred to SITAincludes intellectual property rightsWhen optional services are used, only those assets that both parties agreed to, are transferred to SITATransfers exempted from transfer & stamp duty, etcClause 12: section 16

  • Substantial amendments (15):Rates for services, auditing & exemptionMinister for Public Service & Administration to determine rates for SITAs servicesafter consultation with all Ministers & MECswith approval of Minister of Finance Clause 9(a): Section 16(1) &(2)Board may appoint own auditor to audit holding & subsidiary companies, ie no longer Auditor-GeneralClause 9(e): section 16(9)To protect Republics security, Minister of Intelligence may exempt any intelligence service established by President ito s209(1) of Constitution from any provision of Act Clause 5: section 7(9)

  • Substantial amendments (16):Share capitalCurrent Act (s18) stipulates that State must be issued with fully paid-up shares as stipulated in an agreementin exchange for assets transferred to SITA valued on method acceptable to StateRequires valuation of assets and then agreement on value and number of shares

  • Substantial amendment (18):Share capital contProvision in current Act inappropriate for both current & proposed role of SITACurrent roleRequires transfer of all IT assets, but assets transferred from time to time, ie as & when departments participate - not once off transfer of assets of all IT assets of all departmentsProposed roleDoes not require transfer of all IT assets, but only-assets related to networks, transversal information systems & data-processing/associated services for such systems (compulsory services)other IT assets but only if SITA & department agree (optional services)also not once-off transfer of assets, but only as & when department requires a particular service

  • Substantial amendment (19):Share capital contNow proposing share capital of R1, represented by one share with nominal value of R1share capital has no linkage to assets transferred to SITAState remains sole shareholder of SITAno provision for transfer of shares in SITA, but only its subsidiaries

    Clause 10: section 17

  • Substantial amendments (20):Regulations - clause 15Minister for Public Service & Administration empowered to make regulations on IT procurement-after consultation with all Ministers & MECssubject to Minister of Finances approvalrequiring participation of client departments in procurement processrequiring support of local economiesregarding exemption from procuring through SITAcompulsory terms of business agreementadditional functions for SITA to achieve objectsinformation systems security for all departments, with Minister of Intelligences approvalprocedure to resolve disputes between departments & SITA

  • Consultation processBefore Cabinets approval was sought, comment requested from all national & provincial departments, SITA & GITO Council

    Those that submitted comment listed in Memorandum on Objects of Bill (par 5)

  • SITA Amendment Bill



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