1. USAASA / USAF 2015/16 Annual Performance Report
Presentation to Portfolio Committee on Telecommunications & Postal Services
13 October 2016
“Universal Access and Service to ICT for All”

2. Vision, Mission & Values
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.
Values:
Batho Pele – We believe in providing excellent, efficient and effective service to all customers and stakeholders.
Integrity – We uphold high standards of trust; condemn bribery and corruption; and uphold honesty and respect in all interactions with stakeholders.
Accountability – We foster employee ownership and responsibility in ensuring quality service.
Innovation – We support employee creativity in delivering all our services.
Transparency – We encourage openness in all our activities.
Teamwork – We strive to create a harmonious work environment, where all employees and contributors are respected.
Vision:
“Universal Access and Service to ICT for All”.

3. Policy Drivers
The Constitution: Enables equality in the rights, privileges and benefits of citizenship, including the guarantees of freedom of expression and association in the Bill of Rights in digital world
SIP-15: Expanding Access to Communication Technology
100% access to digital ICTs for all South Africans by 2020 as a driver of new economic opportunities and digital equity
New Growth Path Job creation drivers include developing a knowledge economy – an economy underpinned by access to affordable high speed broadband
The National Development Plan: Elimination of poverty and the reduction of inequality. The ICT sector by 2030 will underpin the development of a dynamic and connected information society and a vibrant knowledge economy that is more inclusive and prosperous
The Medium Term Strategic Framework is a 5-year implementation plan for the NDP: Connect all schools, public health and other government facilities through broadband by Emphasises improving service delivery
South Africa Connect: Affordable broadband available nationally, to meet the diverse needs of public and private users, both formal and informal, consumers and citizens

4. Legislative Mandate: Electronic Communications Act (ECA)
In terms of the ECA the Agency must (amongst others):
- strive to promote the goal of universal access and universal service;
-foster the adoption and use of new methods of attaining universal access and universal service;
-make recommendations to enable the Minister to determine what constitutes universal access, universal service and under-serviced areas;
-conduct research into and keep abreast of developments in the Republic and elsewhere on information communication technology, electronic communications services and electronic communications facilities;
-make recommendations to the Minister in relation to policy on any matter relating to universal access and universal service;
-advise the Authority (ICASA) on any matter relating to universal access and universal service; manage the Universal Service and Access Fund (USAF) in accordance with the provisions of the Act;
-submit annual reports on its operations, budget and expenses to the Minister;
-provide incentives for network licensees to construct, operate, and maintain networks in under-serviced areas.

5. Overview: 2015/16 Financial Year
Focus Areas
USAASA:
Enhance Human Capital: Organisational Development
Re-align IT systems & business processes: ERP
Enhance Good Corporate Governance & Accountability: AG Audit Outcomes
USAF:
Broadband Rollout: Mutale and Albert Luthuli
Schools Connectivity: Schools for Persons with Disability
Broadcasting Digital Migration
Annual Performance vs 2015/16 Planned Targets
12 of 24 Annual Performance Plan (APP) targets achieved = 50%
2 of 3 Annual Performance Plan (APP) targets achieved = 67%
Filling of Key Positions
Chairperson of the Board
Resigned on 04 December 2015
Deputy Chairperson of the Board currently occupies this position in an acting capacity
Chief Executive Officer (CEO)
Contract ended 31 March 2015
New CEO commenced duty in May 2016
Company Secretary (CS)
Resigned in March 2015
New CS commenced duty in July 2016
Chief Financial Officer (CFO)
Resigned in October 2015
Recruitment processes for appointment of a new CFO at an advanced stage
AG Audit Outcomes
Unqualified AG Audit Opinion: Matters of Emphasis

6. Annual Performance Against Predetermined Objectives
Strategic Objective
USAASA supports USAF project delivery through the provision of world class project management, supply chain management, human resources, and administrative support
Key Performance Indicator (KPI)
Annual Target
Actual Achievement
Status
Deviation
Reason for Deviation
Mitigation Plan
Percentage availability of business systems to support USAASA and USAF
98% availability of business systems
99.35% availability of business systems for 2015/2016
N/A
Percentage of legal advice and resolution strategies in accordance with legislation and policy provided within 7 (seven) days
Capacitate legal services through;
Internal processes
Knowledge sharing
Contract management
Legal services capacitated to provide legal opinions & draft contractual agreements
Accurate financial statements which are GRAP and Treasury regulations compliant
Produce accurate 2014/15 financial statements with the objective to get an unqualified audit opinion
2014/15 financial statements were produced and an unqualified audit opinion achieved
Number of approved strategic plans and APP’s for USAASA and USAF
Strategic Plans APPs developed, approved by the Board and submitted to the Minister of DTPS and to Parliament on time
USAASA / USAF plans developed, approved and submitted on time 6

7. Annual Performance Against Predetermined Objectives
Strategic Objective
USAASA supports USAF project delivery through the provision of world class project management, supply chain management, human resources, and administrative support
Key Performance Indicator (KPI)
Annual Target
Actual Achievement
Status
Deviation
Reason for Deviation
Mitigation Plan
Number of executive management meetings conducted
12 executive management meetings conducted
12 EXCO meetings were conducted as planned
N/A
Percentage of procurement from BBBEE
80% of USAASA budget procurement from BBBEE
91% BBBEE spending for 2015/16
Number USAASA & USAF Quarterly Reports and Annual Performance Reports
Quarterly reports developed, approved and submitted to DTPS within 30 days of the end of the quarter
Monthly monitoring of organisational performance
Organisational performance was tracked through monthly monitoring reports 7

8. Annual Performance Against Predetermined Objectives
Strategic Objective
USAASA supports USAF project delivery through the provision of world class project management, supply chain management, human resources, and administrative support
Key Performance Indicator (KPI)
Annual Target
Actual Achievement
Status
Deviation
Reason for Deviation
Mitigation Plan
Number of audited Annual Performance Reports for USAASA and USAF
Audited USAASA and USAF Annual Reports submitted to DTPS and Parliament within the stipulated time frames
Audited USAASA and USAF Annual Reports submitted to DTPS on the 31st August 2015
N/A
Three year rolling strategic plan and annual audit plan
Approved Three year rolling strategic plan and annual audit plan
Updated top 10 corporate/strategic risk register
Bi-annual (2) risk assessments workshops conducted
Bi- annual risk workshops conducted as planned, to monitor and update the top 10 corporate risks register
Updated operational risk registers
Quarterly (4) operational risk assessment workshops conducted with all divisions
Quarterly workshops conducted for all divisions within the Agency

9. Annual Performance Against Predetermined Objectives
Strategic Objective
USAASA supports USAF project delivery through the provision of world class project management, supply chain management, human resources, and administrative support
Key Performance Indicator (KPI)
Annual Target
Actual Achievement
Status
Deviation
Reason for Deviation
Mitigation Plan
Implementation of the organisational development (OD)
Alignment of USAASA according to OD structure
Employees were not migrated to OD structure
OD structure not implemented
OD project was put in abeyance for reviewing the OD processes
OD will reach finalisation in 3rd quarter of 2016/17
Improvement of Business process automation
ERP system rollout
Geographic Information System (GIS) upgrade
Network Planning and Monitoring
Targets not achieved
ERP system not rolled out
No GIS System upgrade
No GIS Network Planning and Monitoring
ERP rollout dependent on OD finalisation
GIS system upgrade and network planning not conducted due to financial constrains
ERP project to go - live in r 1st quarter of 2017/18
(dependent on finalisation of OD project)
GIS remains unfunded
Stock count and physical verification of procured BDM STB’s at warehouses
100% stock count of selected procured BDM Set-Top-Boxes in warehouses
Stock counts were not carried out quarterly.
Only year-end stock verifications were undertaken in 2015/16
Appointment of logistics officers and students for stock counts not achieved due to financial constraints
Physical stock verifications of STB’s to continue in 2016/17
Managing the procurement of BDM Set Top Boxes (STB’s)
Project Management of Set Top Boxes roll out subsidy scheme
BDM Project management was done internally due to financial constraints
No service provider appointed for BDM project management services
BDM project managed internally due to financial constraints
Utilisation of internal resources for BDM project management 9

10. Annual Performance Against Predetermined Objectives
Strategic Objective
USAASA supports USAF project delivery through the provision of world class project management, supply chain management, human resources, and administrative support
Key Performance Indicator (KPI)
Annual Target
Actual Achievement
Status
Deviation
Reason for Deviation
Mitigation Plan
Number of main board and committee meetings conducted
4 USAASA Board,
4 USAF Board ,
6 Audit & Risk (BARC), 4 BDS Committee, 4 HR & Remuneration (REMCO), 2 Social & Ethics meetings
Board, BARC, BDS (Operations) Committee, REMCO meetings were held in accordance with APP targets. Only 1 Social & Ethics Committee was held
Only one of the two planned Social & Ethics committee meetings was held
A review of structural arrangements of Board Committees was initiated in Q4
Social and Ethics Committee meeting held in Q1 of 2016/17
Partnerships to the value of R1.5 billion raised in support of USAF
Develop Partnership with various stakeholders to the value of R200 million in support of USAF projects
A funding strategy was developed, however, implementation and reporting was not achieved
R200 million not raised in support of USAF projects
This initiative was overtaken by Operation Phakisa developments
Target will not be pursued further in 2016/17
Number of audits completed
25 audits conducted as per approved annual audit plan
23 Audits conducted for the year
Governance and HR audits not concluded
Governance and HR audits not concluded due to capacity constraints
Audits to be conducted as per approved annual audit plan in 2016/17
Improve visibility of brand USAASA and support USAF project in communities
Public awareness campaigns to promote Brand USAASA and USAF Projects
USAASA / USAF brands were promoted through exhibitions at various events
Development of a Stakeholder Engagement Strategy for 2016 – 2019
USAASA did not initiate public awareness campaigns in accordance with a schedule of activities
Capacity constraints
Stakeholder engagements and public awareness will continue in 2016/17 10

11. Annual Performance Against Predetermined Objectives
Strategic Objective
USAASA established as a centre of excellence for universal access and services market information, knowledge and expertise
Key Performance Indicator (KPI)
Annual Target
Actual Achievement
Status
Deviation
Reason for Deviation
Mitigation Plan
Review and track RSA national policies and regulation
Review and track RSA national policies and regulation impacting universal access and service
A Consultation Paper
on the Review of Universal Access, Universal Service, Under-Serviced Areas and Needy Persons was developed
Formal internal approval process and submission to DTPS was not concluded
No timely approval and submission of Consultation Paper
Focus will be on impact assessments for USAF funded ICT infrastructural projects in 2016/17
Create a universal service and access framework to promote ICT Accessibility for ICT for people with disabilities
Develop, maintain and implement a focused policy and regulatory framework for people with disabilities
Discussion document on focused policy and regulatory framework for people with disabilities developed
Policy and regulatory framework for people with disabilities was not published
Framework and research finding not published due to the national review of legislation governing the ICTs by the ICT Policy Review Panel
Initiation of Research, Policy and strategy monitoring and advice
Develop industry consultation and research papers on all universal access and services related topics
Consultative Document developed and finalised internally
Research findings not published
Develop and maintain a database of all underserved areas in terms of ICT coverage
Evaluating the Impact of Universal Access Models, Strategies and Policies in ICT on Poor Communities
A framework for definitions of needy persons was developed
Database of underserviced areas not automated using GIS
GIS system was unfunded in 2015/16 11

12. USAF Annual Performance Against Predetermined Objectives
USAF Annual Performance for 2015/16
Key Performance Indicator (KPI)
Annual Target
Actual Achievement
Status
Deviation
Reason for Deviation
Mitigation Plan
Uptake and usage of a number of sustainable broadband networks initiated
02 under-serviced local municipalities broadband projects initiated & completed
Broadband projects initiated & completed in Albert Luthuli Local Municipality (Gert Sibande District) and Mutale Local Municipality (Vhembe District)
N/A
Increased percentage of schools of persons with disabilities (PWD) having ICT connectivity
3 schools for PWDs in under serviced municipalities connected to ICT services
Schools for PWDs:
(1) Phumulani Special School, Albert Luthuli - Mpumalanga;
(2) Fhulufhelo Special School, Mutale – Limpopo;
(3) Tsolo Special School, Mhlontlo - Eastern Cape
 Additional schools connected:
(4) Makgatho L. Mandela Primary – Eastern Cape
(5) Mphemba High School - Kwazulu Natal (KZN)
(6) Mdhlangathe High School - KZN
Percentage of 5.2 million needy households subsidised / funded for connection to digital broadcast
0,03% of targeted 5.2 million households subsidised / funded for connection to digital broadcast
4,27% of targeted 5.2 million households subsidised / funded for connection to digital broadcast
Slow uptake of the set-top boxes by needy households
Awareness programmes are dependent on the Department of Communications 12

13. USAASA 2015/16 Performance - Revenue
Description
Budget Income (R’000)
Actual Income (R‘000)
Variances (R‘000)
Variance %
Reasons for variances
Revenue
Other Income -Interest, levies & tenders
8 872
Not Applicable
Transfers received
USAASA Operations
66 429 - 0%
BDM Distribution & Logistics
Enterprise Resource Planning (ERP)
50 000
Total revenue 3%

14. USAASA 2015/16 Performance - Expenditure
Description
Annual Budget (R’000)
Actual Spending (R‘000)
Variances
(R‘000)
YTD % Spent
Reasons for variances
Expenditure
Compensation of employees
41 838
38 735
3 103
93%
Savings of 7% due to vacant positions
Goods and services
23 539
23 213
326
99%
Depreciation -
3 228
-3 228
Non-cash item not budgeted
Capex
1 052
900
152
86%
Amounts earmarked for Head Office relocation remained unspent
Total expenditure
66 429
66 076
353
99.5%
Enterprise Resource Planning (ERP)
50 000
24 937
25 063
49,9%
This forms part of Capex
BDM Distribution & Logistics
14 811
10%
Less spending as the BMD project was launched late in Dec 2015
Total
40%
Attributable to unspent ERP (R25m) and BDM Distribution and Logistics funds (R131m)

15. USAASA 2015/16 Performance – Expenditure (‘R000’)

16. USAASA 2015/16 Performance - Expenditure

17. USAF 2015/16 Performance – Revenue
Description
Annual
Budget
Actuals YTD
(R ‘000)
Actuals as % of Annual Budget
Reasons for variances
Other Income (Interest)
98 452 -
Not applicable
Transfers received
Total revenue

18. USAF 2015/16 Performance - Expenditure
Description
Annual
Budget
Annual Spending
(R ‘000)
YTD % Spent
Reasons for variances
Broadband Infrastructure
30 937
26 560
86%
Project savings on Mutale District and Albert Luthuli network completed
STB Subsidies for BDM
95%
Due to delays in launching the project, the allocated funds could not be fully spent during 2015/16
Rapid Deployment & Connectivity
17 862
14 258
80%
Deployment of equipment in schools as well as connectivity of sites connected in prior years
Bank Charges & audit Fees
870
1 080
124%
Audit fees were higher than anticipated: additional work was done on the BDM project
Project Costs
2 711
1 641
61%
Costs fluctuate based on project and verification requirements and the 2015/16 verifications were affected by the delayed BDM project
Total Spending
93%
Total spending affected by the delayed BDM project implementation
Broadband Rollover
18 290
14 142
77%
Ratlou and Joe Morolong equipment /devices for clinics, schools and maintenance costs in relation to those sites
BDM Tender Facilitation
676 -
Tender facilitation amount spent in Q2 of the financial year.
Total including rollovers
92%
Unspent Funds
20 780
Mainly attributable to unspent BDM funds

19. USAF 2015/16 Performance - Expenditure

20. Audit Findings Summary
USAASA
2011/12
2012/13
2013/14
2014/15
2015/16
# of audit findings 34 25 27 17 21
Audit Report
Unqualified
Supply Chain Management matters 15 9 5
USAF
2011/12
2012/13
2013/14
2014/15
2015/16
# of audit findings 16 8 12
Audit Report
Unqualified
Qualified
Clean
Supply Chain Management matters 4 3

21. Key Audit Findings
Key USAASA / USAF 2015/16 AG audit findings included the following: 
Strategic Planning and Performance Management
Indicators not well defined
Targets not specific and measurable
Budget not linked to the planned objectives
Not all 2015/16 APP targets reported on in Annual Performance Report
Financial Management
No controls in place to prevent irregular expenditure and fruitless and wasteful expenditure
Lack of consequence management
Deviations not in line with SCM Policy
Incomplete non-compliance register
Incorrect allocations
Lack of Policy or Procedure to identify subsequent events
Incomplete Inventory listing – Set Top Boxes

22. Focus Areas Tracking implementation of 2015/16 AG audit action plan
Consequence management for non-compliance and poor performance
Increased connectivity to underserviced and un-served areas
Connectivity of Educational, Health and Government Institutions
Optimise funding opportunities: alternate funding models giving effect to USAASA’s mandate
Developing USAASA’s technical and project management capacity
Improving organisational efficiency
Create a Research Centre of Excellence: USAASA as an information hub on universal service and access
Create a high performance culture
Conclusion of delayed projects: ERP and OD
Achievement of BDM project deliverables
Creation of Smart Villages
Stimulating user demand for digital economy 

23. Ndiyabulela Ke a leboha Ke a leboga Ngiyabonga Ngiyathokoza Ngiyabonga Inkomu Ndikhoulivhuh Dankie Thank you