Presentation to Portfolio Committee on Telecommunications and Postal Services USAASA & USAF Quarter 1 Peformance Report 04 August 2015 “Universal Access and Service to ICT for All”

USAASA Quarter 1 Performance Report

USAASA Quarter 1 Programme Performance Reporting Year to date USAASA Performance UnitTotal of Q1 targets Achieved targets Partially achieved Not targets % achievement HR % IT % Legal % Finance % Governance % PM&E % Int. Audit % Risk. Mgmt % Research40400% Total Planned % USAASA Strategic Objective : USAASA supports the project delivery of the Universal Service Fund through the provision of world class project management, supply chain management, human resources, and administrative support. To promote an effective, efficient and well-resourced organisation that upholds the principles of good corporate governance. USAASA established as a centre of excellence for universal access and services market information, knowledge and expertise USAASA has 22 planned targets for the quarter under review and majority of the targets were achieved as planned.

DivisionAnnual TargetQuarterly TargetActual Achievements Comments Human resources Alignment of USAASA according to approved Organisational Development organization structure Skills Matching Migration process AchievedThe Migration Framework was completed Skills matching exercise was completed through skills audit and competency assessments Information Technology 98% availability of business systems Improvement of Business process automation Revise and approve SLA for IT Services and Report on percentage availability of business systems Appointment of a service provider, project plan and solutions management framework approved. Achieved The actual achievement is 98.5% on all IT systems Additional 2 SLAs were signed, namely, Internet Solutions for Telephone Systems and Unified Communications Appointment of the service provide EOH Mthombo. Project Plan and solutions test management framework approved by EXCO Legal Services Capacitate legal services through; Internal processes Knowledge sharing Contract management Provide internal written legal opinions within 7 (seven) days of request and submission of all relevant documentation AchievedLitigations: 2 Reviewed contracts: 2 Tendering process: 3 Produce accurate 2014/15 financial statements with the objective to get an unqualified audit opinion. 3 sets of monthly financial statements per quarter. Submission of the final financial statements to the Auditor General 31 st May 2015 AchievedMonthly financial statements produced as planned. AFS submitted to AG on the 29 th May 2015 Finance Unit USAASA Q1 Programme Performance Reporting

DivisionAnnual TargetQuarterly TargetActual Achievements Comments Finance Manage ment 80% of USAASA budget procurement from BBBEE 80% of the expenditure procured from BBBEE AchievedThere was a 98% procurement, 100% in April and May and 94% in June. Corporate Governance At least 4 USAASA Board At least 4 USAF Board At least 6 Audit & Risk At least 4 BDS Committee At least 4 HR& Remuneration 2 Social & Ethics Meetings conducted throughout the year USAASA & USAF Board - Audit & Risk committee - HR & Remuneration committee - BDS [USAF Operations] committee Achieved Meetings conducted as planned USAF Board: 23/04 and 28/05; USAASA Board: 28 /05; BARC 17/04 and 05/05; HR & Remco 14/05; BDS 10/04 and 22/04 and 12 May A minimum of 12 executive management meetings conducted throughout the year A minimum of 3 EXCO meetings conducted AchievedEXCO meetings were convened in the following dated 08/04/2015, 13/05/2015, 01/06/2015 and 18/06/2015 Develop Partnership with various stakeholders to the value of 200 million in support of USAF projects Develop funding strategy for Board approval AchievedFunding strategy developed in conjunction with KZN Basic Education and Intersite. Performance Monitoring and Evaluation USAASA and USAF quarterly reports developed by PM&E Unit, approved by the Executive Authority and submitted to DTPS within 30 days of the end of the quarter. USAASA and USAF 2014/15 4th Quarterly reports submitted to the DTPS AchievedThe reports were submitted to DTPs on the 28 th April 2015 Monthly monitoring of organisational performance and/ against organisational expenditure in order to avoid non-performance and overspending Produce cumulative monthly monitoring and evaluation reports on organisational performance AchievedUSAASA and USAF monthly progress reports produced USAASA Q1 Programme Performance Reporting

DivisionAnnual TargetQuarterly TargetActual Achievements Comments PM&E Audited USAASA and USAF Annual Reports submitted to DTPS and Parliament within the stipulated time frames Approved 2014/15 APR submitted to AG by the 31 st May 2015 for audit purposes. AchievedThe APRs were submitted on the 31 st May Internal Audit Unit 21 audits conducted as per approved annual audit plan in order to strengthen the Agency’s internal controls. SCM Below Threshold - Q4 Expenditure AchievedAudit conducted and completed Findings: There were no significant findings raised SCM Above Threshold - Q4 Expenditure AchievedAudit conducted and completed Findings: There were no significant findings raised. Annual Financial Statement for 2014/2015 AchievedAudit conducted and completed. Findings: Overstatement of accruals on broadband project in Joe Morolong Local Municipality Progress on action plans: The financial statements were revised to reflect the correct accruals USAASA Q1 Programme Performance Reporting

DivisionAnnual TargetQuarterly TargetActual Achievements Comments Internal audit 21 audits conducted as per approved annual audit plan in order to strengthen the Agency’s internal controls. Annual Performance Information for 2014/2015 AchievedAudit conducted and completed Findings: Overstatement of performance as a result of non-deliverables on broadband project in Joe Morolong Local Municipality Progress on action plans The annual performance information were revised to reflect the correct percentage of performance achieved. Financial Management – Q4 Expenditure Not achievedAdditional unplanned audit project conducted in the period under review Broadband project in Joe Morolong and Ratlou Local Municipalities HR AuditNot achievedAdditional unplanned audit project conducted in the period under review. Follow up audit on previously completed audits Risk Management Quarterly (4) operational risk assessment workshops conducted with all divisions One Risk assessment workshop per unit AchievedStrategic and divisional operational risk assessment were conducted. USAASA Q1 Programme Performance Reporting

DivisionAnnual TargetQuarterly TargetActual Achievements Comments Research, policy and regulatory Review and track RSA national policies and regulation impacting universal access and service and make submissions and participate in the formulation process, where applicable Track RSA national policies and regulations and provide inputs Partially AchievedIncomplete research on identified issues affecting the current and future mandate of the Agency/ USAF Develop, maintain and implement a focused policy and regulatory framework for people with disabilities Develop baseline documentsPartially AchievedInternal workshop with Operations Division. External workshop with both ICASA and DTPS Develop industry consultation and research papers on all universal access and services related topics covering broadcasting, communications and postal services Identification of topical themes that relates to universal service and access Partially AchievedConclude desktop research on best practices. Conduct an Agency operations assessment against identified best practices. Generate a report and recommendations. Evaluating the Impact of Universal Access Models, Strategies and Policies in ICT on Poor Communities Data collection and assessments of underserved areas in terms of coverage Partially AchievedOrganise a meeting with Operations to establish project status quo. Organise a meeting with the IT Unit to establish hardware and software requirements and the Unit status of readiness. USAASA Q1 Programme Performance Reporting

Summary of USAASA Quarter 1 Performance AchievedPartially AchievedNot Achieved PLANNED TARGETS

SYNOPSIS OF QUARTERLY ACHIEVED PER SUB UNIT

Summary of the USAASA Cumulative (Q1 targets and delayed 2014/15 targets)

USAASA Quarter 1 Budget Performance Expenditure DescriptionBudget Income(R )Actual Income (R )Reasons for variances Revenue Other Income Interest income and tender levies received Transferred received Total revenue DescriptionBudget Expenditure (R ) Actual Expenditure (R )Reasons for variances Expenses Compensation of employees Variance due to the cost of living adjustments which is still outstanding Goods and services Funds for DTT implementation, which has not begun yet, savings on travel and subsistence, repairs and maintenance and stationery budget Depreciation Not budgeted as it is a non cash item Total expenses Funds for DTT implementation, which has not begun yet, savings on travel and subsistence, repairs and maintenance and stationery budget Surplus/(Deficit) The surplus is mainly due to the 98m capacity building funds allocated to DTT project that was not utilised and the remaining is due to savings on other small line items, these would be the likes of travel and subsistence, repairs and maintenance and stationery budget etc.

USAF Quarter 1 Performance Report

Integrated Broadband Projects Broadband  Mongalo was awarded a subsidy to rollout broadband at Albert Luthuli Local Municipality in Mpumalanga and, Vhembe Local Municipality in Limpopo;  Network plan completed and 84% of network equipment procured  Upon review, environmental rights not necessary as towers are below environmental rights threshold (15m). Schools Connectivity  The project is aimed at deploying internet access devices such as tablets or notebooks at schools & creates schools as Wifi hotspots.  2 schools of the Persons With Disability at Albert Luthuli and Vhembe, third school is Tsolo Special School in the Eastern Cape. A change request has been prepared to include Tsolo Special School outside of the designated broadband areas due to limited special schools. BDM  A tender for installation services was advertised and 158 submissions received, the Bid evaluation process has been completed and a recommendation report has been sent to BAC;  To ensure localization is met throughout the project life-cycle, a relationship with SABS has been developed around the testing, verification and spot audits to ensure consumers are protected, their safety is taken into consideration and that the BDM Policy imperatives of equitability and industrialization are realize  Delays were experienced due to the ETV legal matter which was only concluded on the 25 th of June. The court has affirmed the amendments to the BDM policy that was gazetted on the 18 th of March Integrated Broadband Programme 2 broadband sites at Local Municipality 3 schools for Persons with Disabilities connected to ICT services Albert Luthuli - Mpumalanga and, Vhembe - Limpopo Integrated Broadband Programme 2 broadband sites at Local Municipality 3 schools for Persons with Disabilities connected to ICT services Albert Luthuli - Mpumalanga and, Vhembe - Limpopo Synopsis of Quarter 1 Performance Report for USAF Projects BDM Digital Broadcasting Migration Publication of GG38134 on 28 th October 2014 and the RFPs on STBS manufacturing process triggered the implementation of the DTT programme. Nationally starting with the borders

DivisionAnnual TargetQuarterly TargetActual Achievements Comments Broadband 02 under-serviced local municipalities broadband projects initiated & completed: Albert Luthuli Local Municipality, and, Vhembe Local Municipality Environmental rights applications completed Third Party agreements signed 30% Backhaul extension/ upgrade completed Partially AchievedNetwork plan completed and 84% of network equipment procured. Upon review, environmental rights not necessary as towers are below environmental rights threshold (15m). Third party agreements signed at Mutale. Backhaul work commenced in Mutale. Awaiting signed agreements in Albert Luthuli. Schools connectivity 3 schools for PWDS in under serviced municipalities connected to ICT services Broadband Network upgradeAchievedThe broadband network upgrade has commenced. Broadcasting Digital Migration 4.3% of targeted 5.2 million households subsidised/ funded for connection to digital broadcast households supplied with set-top boxes through a subsidy or 100% funding Not AchievedDelays were experienced due to the ETV legal matter which was only concluded on the 25 th of June. The court has affirmed the amendments to the BDM policy that was gazetted on the 18 th of March 2015 USAF Q1 Programme Performance Reporting

Summary of USAF Q1 Performance exc. BDM AchievedPartially AchievedNot Achieved 110

Summary of cumulative USAF Q1 Performance incl. BDM AchievedPartially AchievedNot Achieved 111

Summary of USAF cumulative Performance excl. BDM 1.2 of the 3 planned targets was achieved, aggregating to 67% of the total planned targets 2.1 of the 3 planned targets was partially achieved, aggregating to 33% of the total planned targets.

Summary of cumulative (delayed 2014/15 and Q1 ) USAF Performance incl. BDM 1.2 of the 6 planned targets was achieved, aggregating to 33% of the total planned targets 2.3 of the 6 planned targets were partially achieved, aggregating to 50% of the total planned targets. 3.1 of the 6 planned targets was not achieved, aggregating to 17% of the total planned targets.

DescriptionBudgeted Income(R ) Actual Income (R )Reasons for variances Revenue Other Income (Interest) This is interest income from the BDM allocation Transferred received Discrepancy is due to Different between Budget & actual money received from DTP for Q1 is not the same as Drawdown submitted to them Total revenue DescriptionBudgeted Expenditure (R ) Actual Expenditure (R ) Reasons for variances Broadband Infrastructure Several supplier were appointed for providing equipment and hardware,the work is still in progress STB Subsidies for DBM Rapid Deployment Deployment of hardware to school& infrastructure Connectivity Schools connectivity Bank Charges & audit FeesAudit fees are expensed and paid when the invoices are received,therefore is not accurately anticipate the fees from month to month basis Project Costs Travelling for projects Total Expenditure Surplus (deficit) DTT funds that are not utilised USAF Quarter 1 Budget Performance Expenditure

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