Portfolio Committee on Telecommunications and Postal Services Presentation to the Portfolio Committee on Telecommunications and Postal Services USAASA and USAF Quarter 1 Performance Reports 23 August 2016 “Universal Access and Service to ICT for All”

USAASA Vision, Mission & Strategic Goals Universal Access and Service to ICT for All Mission To facilitate the rollout of adequate Information and Communication Technology (ICT) infrastructure to enable universal access to under-serviced areas in South Africa To facilitate ICT service to under-serviced areas and thereby contributing to the reduction of poverty and unemployment in South Africa To promote and pursue the goal of Universal Access and Services and contribute to the sharing and preservation of information in order to build South Africa’s sustainable knowledge society Strategic Goals Centre of Excellence on Universal Service and Access in South Africa Positioning the Agency as a focal point for universal service and access to ICT Vision Mission Strategic Goals

USAASA Q1 Performance Human Resources Performance Outcomes: Achieved targets None Targets not Achieved Implement the organisational Work Skills Plan (WSP) to address identified skills gaps. Q1 Progress: WSP submitted to MICTSETA - Training scheduled for July and August 2016 Review and implement Resourcing and Deployment policy Q1 Progress: Draft Resourcing and Deployment policy developed Develop and approve an HR Service Level Agreement (SLA) Q1 Progress: Draft SLA developed Legends Achieved Not Achieved Information Technology Performance Outcomes: Achieved targets Monitor and report on percentage availability of business systems: 99% availability of business systems achieved Targets not Achieved ERP system go-live. Q1 Progress: Project halted at the Final Preparation Phase due to delays experienced with the OD project Capacitation of IT Human Resources through recruitment and Training of SAP Critical skills. Q1 Progress: This is pending the finalisation of the OD project. Internship programme extended for ERP resource Revise and approve a service Level Agreement (SLA) for IT Services. Q1 Progress: SLA developed in Q1. To be submitted for approval in Q2

USAASA Q1 Performance Legal Services Performance Outcomes: Achieved Promote legal compliance by providing written legal opinions and/or advice within 7 working days and drafting contracts with 21 working days from date of receipt of all relevant information Targets not Achieved None Legends Achieved Not Achieved Research Performance Outcomes: Achieved targets None Targets not Achieved Impact assessments in three (3) identified USAF subsidised local municipal areas Q1 Progress: Terms of reference to invite service providers to conduct impact assessments were developed in Q1. Procurement processes and impact assessments to commence in Q2

USAASA Q1 Performance Stakeholder Engagement Performance Outcomes: Achieved targets Implementation of the Stakeholder Engagement Strategy to promote awareness about the Agency Targets not Achieved Develop an Integrated Communications Policy for approval by the Board Q1 Progress: Draft Integrated Communications Policy submitted for EXCO inputs. Policy to be submitted for Board approval in Q2 Corporate Governance Performance Outcomes: Achieved targets Monitor and report on organisational compliance with the PFMA and Treasury Regulations Checklist for Public Entities Targets not Achieved None Legends Achieved Not Achieved

Summary of USAASA 2016/17 Q1 Performance USAASA Performance Outcomes: 4 of the 12 planned Q1 targets were achieved, being 33% of the total planned targets 8 of the 12 planned Q1 targets were not achieved, being 67% of the total planned targets

USAASA Mitigations: Q1 Performance Unmet Quarter 1 Targets Q1 Progress Update Reasons for Deviations Action Plans Implement the organisational Work Skills Plan (WSP) to address identified skills gaps The WSP was developed and submitted to MICTSETA by 30 April 2016 Services could not be sourced in time due to challenges related to introduction of Centralised Supplier Database Implementation of training was scheduled to commence in July 2016 and will continue in the 2nd quarter of 2016/17 Review and implement Resourcing and Deployment policy Draft Resourcing and Deployment policy was developed in Q1 The policy was still in a draft format as the end of the quarter Draft Resourcing and Deployment policy to be circulated for EXCO and REMCO inputs in Q2 prior to submission for Board approval Develop and approve an HR Service Level Agreement (SLA) HR Service Level Agreement was developed in Q1 The SLA was still in a draft format as the end of the quarter SLA reviews by EXCO and REMCO and approvals are planned for Q2 ERP system go-live ERP Project was at the Realisation Phase in Q1 The ERP project could not enter final preparation phase due to Organisational Development (OD) project delays It is estimated that the revised Go-Live date will be during Q4 of 2016/17. This is dependent on finalisation of the OD structure

USAASA Mitigations: Q1 Performance Unmet Quarter 1 Targets Q1 Progress Update Reasons for Deviations Action Plans Capacitation of IT Human Resources through recruitment and Training of SAP Critical skills Internship programme extended for 6 months for the resource allocated to the ERP project Finalisation of the OD structure is required to enable the finalisation of the ERP project -Capacitation of IT Human Resources through recruitment is to be considered as part of OD processes Revise and approve a Service Level Agreement (SLA) for IT Services The SLA for IT services was developed in Q1 No IT Steering committee was held in Q1 (scheduled meeting was postponed) - Tabling of SLA to IT Steering Committee was scheduled for 05 July 2016 and approval is to be finalised in Q2 Impact assessments in three (3) identified USAF subsidised local municipal areas Terms of reference and a submission for sourcing external resources was prepared and pending approval as at the end of the quarter ICT impact assessments are new to the Agency and a need to source external expertise was identified due to inadequate internal capacity - Sourcing of external capacity and project implementation is envisaged to commence in the 2nd quarter of 2016/17 Develop an Integrated Communications Policy for approval by the Board The draft Integrated Communications Policy was developed and submitted for EXCO inputs in Q1 The Integrated Communications Policy was still in draft format as at 30 June 2016 - The draft policy will be submitted for Board approval in Q2

USAASA 2016/17 Quarter 1 Budget Performance - Revenue Description Budget Income (R’000) Budget YTD Income (R’000) Income (R‘000) Revenue Other Income -Interest, levies & tenders - 3 066 Transfers USAASA Operations 69 045 17 261 Total revenue 20 327

USAASA 2016/17 Quarter 1 Budget Performance - Expenditure Description Annual Budget (R’000) Q1 Budget (R’000) Actual Spending (R‘000) Quarter Variances (R‘000) Quarter % Spent Expenditure Compensation of employees 43 713 10 928 9 420 1 508 86% Goods and services 24 218 5 716 4 080 1 636 71.4% Depreciation - 689 -689   Capex 1 114 617 139 478 22.5% Total 69 045 17 261 14 328 2 933 83%

USAASA 2016/17 Quarter 1 Budget Performance - Expenditure

USAF Quarter 1 Performance Report 2016/2017

USAF Q1 Performance Targets not Achieved 50% Backhaul developed / upgraded for Mhlontlo and King Sabata Dalindyebo local municipalities Q1 Progress: Backhaul is developed by licensed operator which was yet to be appointed as at 30 June 2016 Broadband network connectivity maintained in 127 schools, 93 clinics and 38 traditional ICT centres Q1 Progress: Usage to 98 sites out of 258 sites were monitored. 160 sites do not have a remote monitoring access facility and concerned service providers are working on providing it 14 615 Set-Top Boxes (STB’s) & antennas procured and installed for qualifying needy TV-owning households Q1 Progress: 5 601 out of the targeted 14, 615 STBs and antennae were installed in Quarter 1 USAF Performance Outcomes: Achieved targets None Targets not Achieved Environmental rights application completed for Mhlontlo and King Sabata Dalindyebo local municipalities in the OR Tambo District Q1 Progress: Procurement processes for the appointment of a licensed operator were initiated but not finalised in Q1 Legends Achieved Not Achieved 13

Summary of USAF 2016/2017 Q1 Performance USAF Operations Performance Outcomes: 0 of the 4 planned Q1 targets were achieved, being 0% of the total planned targets 4 of the 4 planned Q1 targets were not achieved, being 100% of the total planned targets

USAF Mitigations: Q1 Performance Unmet Quarter 1 Targets Q1 Progress Update Reasons for Deviations Action Plans Environmental rights application completed for the Mhlontlo and King Sabata Dalindyebo local municipalities in OR Tambo District The Agency has enlisted the services of BBI and Sentech to fast track implementation e.g. Sentech sites will be used; BBI will prepare its PoPs in the areas for use This should drastically reduce the need for EIA application Appointment of licensed operator was not finalised by 30 June 2016 - Appointment of licensed operator is envisaged to be finalised in Quarter 2  50% Backhaul developed / upgraded for Mhlontlo and King Sabata Dalindyebo local municipalities Backhaul is developed by a licensed operator which was yet to be appointed at the end of the quarter

USAF Mitigations: Q1 Performance Unmet Quarter 1 Targets Q1 Progress Update Reasons for Deviations Action Plans Broadband network connectivity maintained in 127 schools, 93 clinics and 38 traditional ICT centres Usage at 98 of the 258 connected sites was monitored in Q1 160 sites do not have remote monitoring access facility and the service providers concerned have been engaged by the Agency - Monitoring and Evaluation proposal from CSIR has been resuscitated and will be tabled before the Bid Adjudication Committee for consideration 14 615 Set-Top Boxes & antennas procured and installed for qualifying needy TV-owning households The focus has been in the SKA area A total of 12 147 registrations have taken place in the SKA. To date 9 048 installations have been allocated to the installers with 5 601 completed in Q1 Communication on the project is the responsibility of the Department of Communications (DoC) - The DoC has put in place a door-to-door registration campaign to speed up registrations. Funding for such has been factored into the 2017/18 databases of the DoC

USAF 2016/17 Quarter 1 Budget Performance – Revenue Description Annual Budget Income (R’000) Quarter 1 Budget Income (R’000) Income (R‘000) Quarter 1 Variances (R‘000) Revenue Other Income (Interest) - 26 592 Transfers 644 540 159 377 Total revenue 185 969

USAF 2016/17 Quarter 1 Budget Performance - Expenditure Description Annual Budget Quarter 1 Budget (R’000) Actual Q1 Spending (R‘000) Quarter 1 Variances (R‘000) Quarter 1 % Spent Broadband Infrastructure 32 634 6 400 6 400 0% STB Subsidies for BDM 589 384 147 346 187 135 -39 789 127% Rapid Deployment & Connectivity 18 776 4 694  2 663 2 031 56.7% Bank Charges & Audit Fees 996 249 296 -47 119% Project Costs 2 750 688 236 452 34.3% Total 644 540 159 377 190 330 30 953

USAF 2016/17 Quarter 1 Budget Performance - Expenditure

USAASA Focus Areas for Quarter 2 of 2016/17 USAASA focus areas for Quarter 2 are to include the following: Tracking the implementation of action plans to ensure all delayed Quarter 1 targets are met in Quarter 2 Development and implementation of action plans to address 2015/16 Auditor General findings Review compliance of current targets to the SMART principle (Specific, Measurable, Attainable, Relevant and Timely) and follow due process to amend Implementation of stringent strategies to improve organisational performance

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