1. PRESENTATION TO THE PORTFOLIO COMMITTEE DEPARTMENT OF TELECOMMUNICATIONS AND POSTAL SERVICES /2017 ANNUAL REPORT October 2017
Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development

2. PRESENTATION OUTLINE Auditor-General’s Audit Outcomes
Findings in the 2016/17 Audit Report
Key Findings in the 2016/17 Management Letter
Interventions to Address Audit Outcomes
Significant Achievements during the Reporting Period
Arears of under-achievement during the reporting period
Programme Performance for 2016/17, with specific focus on targets not achieved
2016/17 Financial Performance
Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development

3. AUDITOR - GENERAL’S AUDIT OUTCOMES FINDINGS CATEGORY FY 2014/15
Audit Report 3 2 4
Management Letter 27 15 22
Overall Opinion
Unqualified
Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development

4. FINDINGS IN THE 2016/17 AUDIT REPORT (1)
Details
Action Plan
Deviation
No deviation approved for procuring goods & services without obtaining at least three quotations
SCM policy to be reviewed to enhance internal controls
Deviation form to be completed at all times
Procurement to be effected only after approval is granted.
Include as Key Performance Indicator in the performance agreement of delegated official in SCM
Procurement and contract management
Non-compliance identified in the hygiene and cleaning services tender
Central database to be utilised to verify declaration of interest
All bids to be sent to Internal Audit to audit before awarding
Wording of terms of reference and evaluation criteria to be objective and simple for evaluation purpose
Training and development of bid committee members
Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development

5. FINDINGS IN THE 2016/17 AUDIT REPORT (2)
Details
Action Plan
Irregular expenditure
No consequence management of irregular expenditure incurred
Disciplinary action to be taken against all officials who are responsible for the irregular expenditure.
SCM policy to be reviewed to enhance internal controls
Appointment of the irregular expenditure committee
Workshops to be conducted across the department on SCM policies and procedures
All irregular expenditure to be reported to National Treasury
Corrected material misstatements
The financial statements submitted for auditing contained material misstatements
Payment of financial assets to be adequately reviewed and further be validate with entities and National Treasury regarding disclosure
Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development

6. KEY FINDINGS IN THE 2016/17 MANAGEMENT LETTER (1)
Details
Action Plan
Irregular appointment
Salary payment made to employee before appointment was approved
Disciplinary action to be taken against all officials who are responsible for the irregular appointments.
Recruitment and selection policy to be reviewed to enhance internal controls.
Expenditure management
Payment to suppliers not made within 30 days
Receipt of invoices is now centralized and a template to track and monitor the payment of invoices is in place.
Control measures have been put in place to ensure that the process of certification of invoices is smooth.
Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development

7. KEY FINDINGS IN THE 2016/17 MANAGEMENT LETTER (2)
Details
Action Plan
Internal Audit
Internal Audit did not audit transfers made to the entities
Develop and implement a comprehensive process to develop the Internal Audit Plan which contains control measures to ensure that all legislative requirements and leading practice recommended are taken into account.
The Internal Audit Plan for the 17/18 financial year does cover transfer payments.
Performance Agreements
Performance agreements not submitted within the required timeframe
Implementation of disciplinary action process
Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development

8. INTERVENTIONS TO ADDRESS
AUDIT OUTCOMES
In order to address the AG’s findings, the Department has developed and is implementing an Integrated Action Plan (IAP) that focuses on:
Providing a systemic resolution of the findings
Ensuring that root causes are effectively identified and addressed
The effective implementation of the IAP is monitored on a regular basis by:
The Governance Integrated Action Plan Committee
The Departmental Executive Committee
CD: Internal Audit Services conducts follow-up audits as independent monitoring of progress on the implementation of the IAP
Audit Committee provides independent oversight, holding Executive Management to account on effective implementation of the IAP.
Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development

9. SIGNIFICANT ACHIEVEMENTS DURING THE REPORTING PERIOD (1)
The Department achieved 81% of its 21 planned 2016/17 annual targets (17 out of 21) while spending 86% of it budget allocation
Drafting of ICT Legislation (White Paper)
Department identified priority Bills so as to enable the implementation of the White Paper in the short to medium-term. The priority Bills include the Electronic Communications Amendment Bill, the ICT Sector Regulator and Tribunal Bill, the Digital Development Fund Bill, the SAPO SOC Ltd Amendment Bill and the Postal Services Amendment Bill.
National e-Strategy & e-Government Strategy
Department developed the National e-Strategy and the e-Government Strategy which underwent stakeholder consultation which included the Government Cluster System, following which it was approved by Cabinet for gazetting for public comment.
ICT SMME Strategy
Following the development of the draft ICT SMME Strategy, an extensive stakeholder consultation process was undertaken, including presentations to the Government Cluster System following which the Strategy was approved by Cabinet for gazetting for public comment and was subsequently gazetted on 31 March 2017
Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development

10. SIGNIFICANT ACHIEVEMENTS DURING THE REPORTING PERIOD (2)
SOC Rationalisation
The Department developed Assessment Reports on the rationalisation of BBI, SITA, Sentech and SAPO, which resulted in the development of a Consolidated Assessment Report on SOC Rationalisation inclusive of recommendations for implementation.
National Radio Frequency Plan
The NRFP was reviewed and updated during the reporting period. The Department incorporated the Government services spectrum into the draft NRFP that was subsequently gazetted for public comments. Furthermore, the reviewed NRFP was submitted to the Executive Authority for approval for publication in the Gazette.
Advancing SA’s ICT Agenda
In order to promote ICT policies and strategies at the International level and promote the South African ICT industry to increase partnerships and investments, as well as increase SA’s presence and influence, the Department developed 5 RSA Positions that were advanced at relevant international ICT forums.
Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development

11. SIGNIFICANT ACHIEVEMENTS DURING THE REPORTING PERIOD (3)
Automation of Business Processes (Enterprise Document Management)
As part of moving towards a paperless environment, the Department sourced, installed, configured, and customised an Electronic Document Management and workflow system. The electronic system is currently being implemented through the automation of identified processes such as the leave management process. Further processes have been identified for automation.
Climate and Culture Survey
Department conducted an Organisational Culture and Climate Survey, with all its staff members, which informed the development of an Action Plan to improve the organisational climate and culture. The Department commenced with implementation of the Action Plan during the reporting period and will continue with the implementation of identified interventions in the 2017/18 FY.
Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development

12. AREARS OF UNDER-ACHIEVEMENT DURING THE REPORTING PERIOD
The Department did not achieve 4 of its 21 planned 2016/17 annual targets, as reflected below:
Revision and implementation of the Organisational Structure
The Department was only able to develop the Service Delivery Model as planned however all other elements related to the target were not achieved.
Development of the RSA Position for BRICS
Although the RSA Position for BRICS was developed, the partnership agreement could not be concluded as planned.
Development of the National e-Strategy.
Although the e-Strategy was developed, it was gazetted after the reporting period.
Project Managing the roll-out of the Broadband connectivity.
The Department was not able to develop the connectivity implementation plan or connect any of the identified sites.
Further details with regards to the above-mentioned targets are reflected in the presentation
Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development

13. Comments on non-achievement
PROGRAMME 1:
ADMINISTRATION
Target
Status
Comments on non-achievement
Organisational Structure revised and implemented in line with Strategy
Not Achieved
Delays in the finalisation of the Service Delivery Model (SDM), which would inform the revision of the organisational structure, had a negative effect on the achievement of the planned annual target.
However, to date, the Department has an approved SDM and has also developed its draft Functional Structure in consultation with management.
Climate and Culture survey conducted and Action Plan developed
Achieved
n/a
Core business processes identified, documented optimised and mapped, so as to enable process automation
Enterprise Document Management and workflow system designed and developed
Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development

14. ICT INTERNATIONAL AFFAIRS (1) Comments on non-achievement
PROGRAMME 2:
ICT INTERNATIONAL AFFAIRS (1)
Target
Status
Comments on non-achievement
RSA position for UPU developed towards regulations of ETOEs, promoting postal services as a driver for socio-economic inclusion.
Achieved
n/a
RSA position for WTSA developed to promote access to technology, manufacturing, conformance and interoperability for ICT SMME development
RSA position for SADC ICT Ministerial meeting promoting access to affordable ICT infrastructure, services and regional integration
RSA Position for BRICS developed focusing on skills, development, R&D for innovation and internet governance programmes
Not Achieved
SAPO could not sign the Partnership Agreement by March 31, 2017 due to a need for further engagement.
However, SAPO has subsequently signed the Letter of Intent on 6 April 2017.
Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development

15. ICT INTERNATIONAL AFFAIRS (2) Comments on non-achievement
PROGRAMME 2:
ICT INTERNATIONAL AFFAIRS (2)
Target
Status
Comments on non-achievement
Country Position for International Internet Public Policy developed
Achieved
n/a
1 South African placement in an identified Global ICT Governance Institution to influence the system of global governance
1 seat in Global ICT Governance Institution maintained
Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development

16. AND CAPACITY DEVELOPMENT (1) Comments on non-achievement
PROGRAMME 3:
ICT POLICY, RESEARCH
AND CAPACITY DEVELOPMENT (1)
Target
Status
Comments on non-achievement
Draft ICT Legislation developed
Achieved
n/a
Postal Services Amendment Bill developed
South African Post Office Amendment Bill developed
ICT SMME Strategy developed in line with ICT B-BBEE Sector Code
Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development

17. AND CAPACITY DEVELOPMENT (2) Comments on non-achievement
PROGRAMME 3:
ICT POLICY, RESEARCH
AND CAPACITY DEVELOPMENT (2)
Target
Status
Comments on non-achievement
3 year e-Services Programme developed
Achieved
n/a
National e-Strategy developed
Not Achieved
Due to the need for extensive preliminary stakeholder consultation, the e-Strategy was not gazetted within the reporting period as planned.
However, the e-Strategy has since been gazetted for public consultation in April 2017 and has undergone extensive provincial stakeholder consultation towards its finalization and approval in the 2017/18 financial year.
Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development

18. ICT ENTERPRISE DEVELOPMENT Comments on non-achievement
PROGRAMME 4:
ICT ENTERPRISE DEVELOPMENT
AND SOC OVERSIGHT
Target
Status
Comments on non-achievement
SOC Rationalisation assessment conducted and consolidated report developed (BBI, SITA, SENTECH and SAPO)
Fully achieved
n/a
Performance and compliance of SOC against strategic plans and relevant prescripts monitored and evaluated
Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development

19. ICT INFRASTRUCTURE SUPPORT Comments on non-achievement
PROGRAMME 5:
ICT INFRASTRUCTURE SUPPORT
Target
Status
Comments on non-achievement
Project Manage the roll-out of the Broadband connectivity Implementation Plan (Phase 1) towards connecting 2700 sites
Not Achieved
The Department was unable to connect any of the identified sites. The challenge was largely due to the Department not being able to appoint the Broadband connectivity service provider, despite the SITA administered tender process which could not result in the appointment of a service provider as the bidders did not meet the technical requirements.
However, the DTPS has subsequently formally mandated relevant SOCs (SITA and Broadband Infraco) to roll-out Phase 1 of SA connect. The Department and the SOCs have signed Master Service Agreements to enable implementation of the project to commence in Quarter 3.
National Radio Frequency Plan (NRFP) reviewed and updated taking into consideration the outcomes of WRC-15 & national policies
Achieved
n/a
Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development

20. FINANCIAL PERFORMANCE
2016/17
Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development

21. FINANCIAL PERFORMANCE (1)
STATEMENT OF
FINANCIAL PERFORMANCE (1)
2016/17
2015/16
REVENUE
R’000
Annual appropriation
Departmental revenue
Direct Exchequer receipts -
Aid assistance
TOTAL REVENUE
CURRENT EXPENDITURE
Compensation of employees
Goods and Services – operational exp.
Interest and rent on land
TOTAL CURRENT EXPENDITURE
Content – First level
Second level
Third level
Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development

22. FINANCIAL PERFORMANCE (2)
STATEMENT OF
FINANCIAL PERFORMANCE (2)
2016/17
2015/16
R’000
Transfers and subsidies *
Expenditure for capital assets
Tangible capital assets
5 058
3 425
Software & other intangible assets
4 201
2 056
Total expenditure for capital assets
9 299
5 481
Financial transactions in assets & liabilities
447
TOTAL EXPENDITURE
Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development

23. FINANCIAL PERFORMANCE (3)
STATEMENT OF
FINANCIAL PERFORMANCE (3)
2016/17
2015/16
R’000
Voted funds surrendered
Departmental revenue
Direct Exchequer receipts -
Transferred to National Treasury
Content – First level
Second level
Third level
Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development

24. EXPENDITURE PER PROGRAMME Expendi-ture as % of final appro-priation
2016/17
2015/16
Programme
Final Appro-priation
Actual Expen-diture
Variance
Expendi-ture as % of final appro-priation
Administration
5 740
97.4%
ICT International Affairs and Trade
48 430
46 944
1 486
96.9%
43 310
41 542
ICT Policy Development
88 775
78 494
10 281
88.4%
97 132
73 979
ICT Enterprise Development
4 255
99.5%
ICT Infrastructure Development
72.8%
TOTAL
85.9%
Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development

25. Content – First level Second level SUMMARY OF EXPENDITURE
PER ECONOMIC CLASSIFICATION
2016/17
2015/16
Economic Classifi-cation
Final Appro-priation
Actual Expen-diture
Variance
Variance as
% against final allocation
Actual Expenditure
Current payments
48%
Transfers and subsidies -
Payments for capital assets
14 618
9 299
5 319
36%
7 350
5 481
Payment for Financial assets
447
TOTAL
14%
Content – First level
Second level
Third level
Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development

26. Adjusted Appropriation Act R’000
DETAILS OF
TRANSFER PAYMENTS
Adjusted Appropriation Act R’000
Actual Transfer
R’000
Variance
USAASA - DTT: Distribution and project
management costs -
USAASA – Operations
69 045
USAF - DTT: Set top box, installation
Universal Service and Access Fund
55 156
SA POST OFFICE
NEMISA
77 200
Sentech: Dual Illumination
Foreign Government / International
Organisation
26 136
TOTAL
Content – First level
Second level
Third level
Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development

27. THANK YOU
Making South Africa a Global Leader in Harnessing ICTs for Socio-economic Development