1. “Universal Access and Service to ICT for All”
Presentation to Portfolio Committee on Telecommunications & Postal Services
Committee Chairperson, Honourable Ms. Mmamoloko Kubayi
USAASA & USAF Quarter 3 Peformance Report
17 March 2015
“Universal Access and Service to ICT for All”

2. USAASA Quarter 3 Performance Report

3. USAASA Quarter 3 Programme Performance Reporting
USAASA Strategic Objective :
To promote an effective, efficient and well – resourced organisation that upholds the principles of good corporate governance.
USAASA has 41 planned targets under the quarter review and most of the planned targets will be achieved in the close of Quarter 4.
At the close of Quarter, the Board of USAASA approved the proposed organisational structure of the Agency and the process will trigger the full implementation of the Organisational Development Process that will see the Agency being technically capacitated I order to respond to the requirements of the South African Connect Broadband Policy, 2013; the National Development Plan and the National Infrastructure Plan [SIP 15]
Year to date USAASA Performance
Unit
Total of Q3 targets
Achieved targets
Partially targets
Not
achieved %
achievement
Governance 6
100%
PM&E 12
Int. Audit 16
Risk Mgmt. 3
Stakeholder 9 2 1
75%
Finance 15
80% IT 29 HR 19 10
53%
Admin
Legal
Total Planned
127
109 8
86%

4. USAASA Q3 Programme Performance Reporting
Annual Target
Quarterly Target
Actual Achievements
Comments
At least 4 USAASA Board
At least 4 USAF Board
At least 6 Audit & Risk
At least 4 BDS
At least 4 REMCO
2 Social & Ethics
USAASA & USAF Board
Audit & Risk Committee
BDS committee
Social & Ethics Committee
Partially
Social & Ethics Committee was convened 17 Feb 15
A minimum of EXCO meetings conducted throughout the year
Minimum of 3 EXCO meetings conducted
Achieved
EXCO is convened frequently to look at management functions
USAASA & USAF Strategic & APP Plans approved by Board and submitted to Minister
USAASA & USAF 2015/2016 strategy & APP reviewed and developed
Strategic Plans & APP delivered on 23 January 2015 to DPTS
Monitoring & Evaluation of organisational performance
USAASA & USAF Quarter 3 Performance Information Reports were submitted to DPTS on 31 January 2015
Approved USAASA & USAF quarterly reports submitted to DPTS 30 days after each quarter
USAASA & USAF 2nd Quarter reports presented to the DPTS
The report was presented to DPTS on the 6th November 2014

5. USAASA Q3 Programme Performance Reporting
Annual Target
Quarterly Target
Actual Achievements
Comments
USAASA & USAF Annual Reports developed and tabled at Parliament
USAASA & USAF 2013/2014 Annual Reports tabled at Parliament
Achieved
The reports were tabled on the 25th September 2014
21 audits conducted as per approved annual audit plan in order to strengthen the Agency’s internal controls
SCM Q2 Expenditure (below threshold)
Audit conducted
SCM Q2 Expenditure
(above threshold)
Review of the “Smart” criteria for the 2015/2016 targets
Not achieved
Audit conducted after the Strategic Plans & APP were finalised in January 2015
Financial Statements
Expenditure Financial Management
Corporate services audit
Partially achieved
Audit finalised in December 2014 and the management response was done in January 2015

6. USAASA Q3 Programme Performance Reporting
Annual Target
Quarterly Target
Actual Achievements
Comments
USAASA & USAF top 10 risks identified and monitored
Monitoring of control improvement plan on the 10 risk exposures
Achieved
The risk register on top 10 risks was updated on monthly basis .
Improvement stakeholder perceptions of USAASA by 80% of the baseline of +38%
26.6% improvement on +38 approved baseline
The stakeholder perceptions of USAASA has been improved by + 38
60% Support and awareness of the Fund Manual by the targeted stakeholders
Updates on priority changes on the distribution on the funds based on the Fund Manual
Not Achieved
There was no updates done on priority changes on the distribution on the funds based on Fund Manual as the manual is not fully implemented
60% stakeholder’s support of the ICT National Strategy
60% support and awareness of the National Strategy for Universal Service & Access
Multi - stakeholder forum conducted for the support and possible funding of the National Strategy for Universal Service & Access
Project awareness campaigns conducted – below and above the line e.g. public relations drives and industry theatre
50% awareness of projects
Engagements with North West and Northern Cape on projects

7. USAASA Q3 Programme Performance Reporting
Annual Target
Quarterly Target
Actual Achievements
Comments
Produce accurate financial statements with the objective to get an unqualified audit opinion
100% complaint & accurate financial statements
Achieved
The accurate financial under the quarter review were produced
95 % of the actual expenditure spend in line with the allocated budget
95% of the actual expenditure in the quarter spent in the line with the allocated budget
Partially achieved
USAASA 93 % was achieved and USAF was not achieved due to delay programme implementation of DTT programme
100% match between the physical assets and the asset register
Perform a physical verification at the provinces
100 % match was attained
80% compliance with the laws & regulations pertaining to treasury, supply chain and regulations
Compliance with the laws & regulations pertaining to treasury, supply chain and the statutory regulations.
80% compliance was attained
80% of USAASA and USAF procurement from BBBEE
80% purchases from suppliers with level 1 – 5 BBBEE rating
85% attainment

8. USAASA Q3 Programme Performance Reporting
Annual Target
Quarterly Target
Actual Achievements
Comments
90% compliance to IT governance
Maintenance of business continuity/ Disaster Recovery
Achieved
Data is replicated to the DR site to comply with USAASA Disaster Recovery Plan.
Perform backups of data
Data is being backed up to comply with backup processes and to address AG findings
Maintain Service Desk System
Service Desk system is maintain to produce reports on calls logged in Quarter 3 and monitor on IT performance
Monitor IT performance
IT systems availability were at 100% excluding that was measured at 97% in Quarter 3.
95% Availability of business systems
IT Strategy implemented as per roadmap
IT Governance Roadmap implementation at 81% in Quarter 3
Revision, approval and implementation of new/old IT Policies
100% adherence to approved IT Governance Charter.
Maximum 10% security breach incidents reported
Monitor and report on security breaches
No security breaches to USAASA IT systems were encountered in Quarter 3 due to robust IT systems

9. USAASA Q3 Programme Performance Reporting
Annual Target
Quarterly Target
Actual Achievements
Comments
Reduce risks associated with litigations against the Agency by 5%
Coordinate and monitor litigations (civil and labour)
Achieved
Litigation at High Court and Labour Court as well as CCMA coordinated
Coordinate with HR to develop legal compliance training
Not Achieved
No training has been developed
Monitor existing contracts , negotiate, draft and approve contracts as per specifications and scope
35 SLA/ contracts drafted and approved
5 negotiated contracts
Appointment of legal representative to act on behalf of the Agency during litigations associated with the Agency
Provide internal well written and legal opinions with 7 days of request to mitigate litigation risk to USAASA
4 Legal opinions
5 Legal advice
13 Legal letters
90% compliance with Occupational Health, Safety and Environmental Act
90% compliance with Occupational Health, Safety and Environment
All sections of OHS Act have been complied with

10. USAASA Q3 Programme Performance Reporting
Annual Target
Quarterly Target
Actual Achievements
Comments
Employee wellness programme activity conducted per quarter
Promote and facilitate participation of staff in employment wellness programme
Not Achieved
Employee wellness programme launched at 30 Jan 2015
Introduce a leadership training programme for all managers within the Agency
Facilitate delivery of leadership training
Training will resume once the matching & placement phase of OD project is completed
Timeous submission of performance agreements & performance assessments by business units
Coordinate performance review
Measures put in place to ensure that all performance reviews are completed at the end of the financial year.
80% satisfactory employment relations based on the survey questionnaire conducted
Develop a programme of action on employee assistance programme
The organisation is undertaking an OD process and the survey questionnaire was delayed.

11. USAASA Q3 Programme Performance Reporting
Annual Target
Quarterly Target
Actual Achievements
Comments
Ensure that employees’ grievances and disciplinary cases handled are less than 5% of our staff complement
Investigate disputes within 30 days. Mediate on disputes . Recommend suitable interventions
Not measured
There were no grievances in the current quarter.
60% Implementation of approved Organisation Development Plan
Implementation of operational structure, training and performance management
Develop performance management framework
Not Achieved
Operational structure has been approved by Board for implementation under 4th quarter period.

12. Summary of USAASA Quarter 3 Performance exc. BDM
Achieved
Partially Achieved
Not Achieved 29 3 9
41 PLANNED TARGETS

13. Summary of the Usaasa Cumulative performance1
109 of the 127 planned targets were achieved being 86% of the total planned target 2
8 of the 127 planned targets were partially achieved being 6 % of the planned targets 3
10 of the 127 planned targets were not achieved, being 8% of the planned targets

14. USAASA Quarter 3 Budget Performance Expenditure
Description
Budget Income(R )
Actual Income (R )
Revenue
Other Income
14,500
408,047
Transferred received
16,257,000
Total revenue
16,271,500
16,665,047
Description
Budget Expenditure (R )
Actual Expenditure (R )
Expenses
Total Current expenses
16,257,000
16,884,869
Compensation of employees
9,922,920
9,842,725
Goods and services
6,334,080
6,079,205
Depreciation -
962,939
Total expenses
Surplus/(Deficit)
(219,822)
The overspending is due to the depreciation line which does not get budgeted as it is a non cash item.

15. USAF Quarter 3 Performance Report

16. Integrated Broadband Projects
Synopsis of Quarter 3 Performance Report for USAF Projects
Integrated Broadband Projects
Broadband
The ITA for a subsidy to rollout broadband at Ratlou & Joe Morolong has been advertised, evaluated, adjudicated and appointed.
Commencement of work on the 2 broadband network sites has begun & 60% of the equipment required has been procured and accounted by the close of the 3rd quarter.
Schools Connectivity
The project is aimed ay deploying internet access devices such as tablets or notebooks at schools & creates schools as Wifi hotspots
10 schools from the mainstream and 5 schools of the Persons With Disability at Ratlou and Joe Morolong has been deployed and fully connected at the close of the quarter under review.
BDM
Development and publication of the Qualifying Criteria for public comment via the GG. Given the intense interest in the project, the submission was moved into the 4th quarter.
Procurement process for the manufacturing of STBs was initiated in conjunction with DPTS and National Treasury. The Board expects to finalise the appointment of manufactures in the course of the fourth quarter.
Integrated Broadband Programme
2 broadband sites at Local Municipality
10 schools from the mainstream and 5 schools for Persons with Disabilities connected to ICT services
Ratlou – North West
Joe Morolong – Northern Cape
Digital Broadcasting Migration
Publication of GG38134 on 28th October 2014 and the RFPs on STBS manufacturing process triggered the implementation of the DTT programme.
Nationally starting with the borders
BDM

17. Summary of USAF Q3 Performance exc. BDM
Achieved
Partially Achieved
Not Achieved 3

18. Summary of USAF Cumulative Performance excl. the BDM1.
Quarterly targets against the planned quarterly targets in the 2014/15 approved Annual Performance Plan 2.
All 9 targets were achieved as planned, which makes it a 100% achievement.

19. USAF Quarter 3 Budget Performance Expenditure
Description
Budgeted Income(R )
Actual Income (R )
Revenue
Other Income (Interest)
5,000,000
13,840,198
Transferred received
895,000
Total revenue
5,895000
14,735,198
Description
Budgeted Expenditure (R )
Actual Expenditure (R )
Broadband Infrastructure
10,750,000
10,829,482
STB Subsidies for DBM -
Rapid Deployment
5,700,047
Connectivity
2,850,466
Access Centre Hand Over
408,061
Bank Charges & audit Fees
203,740
73,759
Project Costs
691,690
1,085,166
National Strategy
(482,720)
Total Expenditure
11,645,430
20,464,261
Surplus (deficit)
(5, 729,063)
There was overspending of 28% during the 3rd quarter, this was as a result of underspending during the first two quarters. The unspent funds which were received during the first two quarters got to be spent in Q3, levelling the budget overall.

20. Matters raised by Auditor – General Response by Board Audit & Risk Committee

21. Auditor – General Findings
The BARC engagement with the AG resulted in the following status of audit findings:
Incorrect classification of expenditure and depreciation on the asset register
Non – disclosure of fruitless and wasteful expenditure and receivables written- off
Over – provision of workmen’s compensation and revenue
Lack of supporting information to journals passed.
Misstatement –
All these issues raised by the AG were resolved.
Condonation of irregular expenditure approved by the Board instead of National Treasury,
Incorrect deficiencies with leave management
Non –compliance to SCM process in the purchase of vehicle & three quotations,
Inconsistency between bid specification & Bid Evaluation Committee
Preferential points incorrectly calculated.
SCM –
All these issues raised by the AG were resolved, except for non-compliance to SCM processes in the purchase of vehicle.
Over-statement of actual performance report
Lack of clear process on the measurement of achievements
Non-alignment between planned and reported targets
Performance Information –
Inadequate back – up process in place
IT issues
Clean Audit

22. BARC Mitigating Action Plans
Since inception of BARC, the following mitigation controls were recommended to management :
Detailed non-compliance register with consequence management actions to transgressors, as a agenda item in the BARC meetings.
Implementation of the Combined Assurance Providers services, to be facilitated by Chief Audit Executive .
The Combined Assurance Providers services, at a minimum, to be composed of CEO(First line of Defence), CFO (First line of Defence) , CEA (Third line of Defence), Senior Manager IT (First Line of Defence), AG(Third Line of Defence), Legal Services (Second Line of defence) & DPTS (Third line of Defence.
BARC intervention
BARC maintains its relationship with AG through the following:
Over-seeing the work of the Audit Steering Committee, to which the AG engages with management .
Keep track of track of management cooperation to ensure submission of auditable document timeously through the CEA, during both the interim and the final audits;
Facilitation of AG audit findings, through the CEA on bi-weekly basis.
It is the BARC’s conviction that the relationship between USAASA/USAF and the AG is at the desired level to assist with “clean administration”.
The BARC monitors, on a quarterly basis, the non – compliance register in order to keep track of any matters that would negatively impact the Agency’s goal to achieving “clean audit” .
Relationship & Reliance with AG
LAND SCAPE :
1. Absence of proper performance management process & systems to evaluate both projects & organisational performance
2. Lack of reporting of key matters including finance & projects enough to provide warnings
3. Lack of detailed non – compliance register
4. Ineffective contract management & contract administration
5. Absence of ERP system
6. Absence of documented business process
7. Current mis-match skills
8. Inadequate attendance to close audit findings by management
9. Critical vulnerabilities of IT environment .

23. BARC Mitigating Action Plans
Risk Management
BARC noticed that Risk Management was not given priority it deserve as there was no resource assigned.
BARC approved role of Risk Manager to be included on the organisational structure and to report to BARC on quarterly basis.
BARC recommended that for each an every new projects the Agency embarks on, there should be a separate Risk Register from the Agency’s Strategic Risk Register and Operational Risk Register , thereby alerting management on emerging risk brought about new projects.
Internal Audit
In its effort to assist USAASA to stabilize, notwithstanding the requirement of the requirement of Standard of Internal Audit with regard to Independence, the view of the BARC has been that Internal Audit will walk a tight rope in the Financial Year 2013/2014 & 2014/2015, to assist management to bring the control environment to acceptable level in order to achieve “clean administration”.
The BARC demand value –add from Internal Audit and would not settle for anything less that.
It is through this expectation that the Agency achieved “Clean Audit” for Financial Year 2013/14
Role of Combined Assurance The BARC introduced the Combined Assurance Providers project in order to:
Identify the role of each role player on the risk exposures for the Agency;
Identify the level of assurance by each role on the various risk exposures &Installer Database
Trace risk exposures that are neglected by the Agency

24. BARC Mitigating Action Plans
BARC recommended the following:
The Chief Executive Officer together with Audit Executive, monitors the status of the implementation of action plans on a monthly basis, and report quarterly to Board Audit & Risk Committee
The quarterly strategic and operational risk assessment workshops, resulting in top 10 risk registers and operational risk registers
Internal Audit review management action plans on each audit finding to ensure that these actions address the root causes and not symptoms
Internal Audit conducts internal audit on SCM, Financial Statements, Performance Information on quarterly basis, in order to pro-actively identify any deficiencies in internal controls and such be attended to immediately before the Auditor General starts with audit process
The Combined Assurance reviews, where the roles of Management, as the first line of defence is clearly articulated for each risk exposure identified. The same applies to Risk Management & Legal as the second line of defence, and so is Internal Audit, Auditor General ; and DPTS as the third line of defence providing an objective assurance for each risk exposure
Management reports on the Agency’s performance on quarterly basis to Board Audit & Risk Committee
Internal Audit verifies the implementation of actions plans status & report to the Board Audit & Risk Committee on quarterly basis
The implementation of the Non-Compliance register, which us reported to the Board Audit & Risk Committee on a quarterly basis

25. THANK YOU 