DEPARTMENT OF COMMUNICATIONS 2011/12 ANNUAL REPORT 16 October 2012

1. DEPARTMENT OF COMMUNICATIONS 2011/12 ANNUAL REPORT 16 October 2012 A global leader in the development and use of Information and Communication Technologies for socio-economic development

2. DEPARTMENTAL RECIEPTS The Department receipts for the 2011/2012 year amounted to R2, 329 billion of which R899, 569 million accounts for license fees collected by ICASA. The financials were presented to the Audit Committee and revenue was duly audited by the Auditor General as a true reflection of the financial position of the Department. However, during compilation an omission of R116, 585 million for Private Television Stations occurred and was confused with R382, 562 million for private radio stations. A global leader in the development and use of Information and Communication Technologies for socio-economic development

3. IRREGULAR EXPENDITURE CONDONED • An amount of R31 million (2006 – 2009) was condoned by the Departmental Bid Adjudication Committee on the basis of the following reasons: • It was established through a thorough forensic investigation that indeed the Department had received value for money as the travel and accommodation services were rendered. Four officials were subsequently charged and have since left the Department. • Criminal proceedings can only be instituted if reasonable evidence exists that the money had been used fraudulently or that implicated employees benefited through theft. In this instance none of this applies to the condoned amount. A global leader in the development and use of Information and Communication Technologies for socio-economic development

4. IRREGULAR EXPENDITURE- PRIOR YEARS • The irregular expenditure in the Annual Report reflects an amount of R115, 539 million, 83% of this amount relates to transactions that were effected in 2006, whilst 17% relates to the year under review. Transactions for the prior years were in relations to the procurement of travel agencies to render accommodation and travel services to the Department. The forensic investigation did reveal that the Department had derived value for all the services that were rendered. Disciplinary steps were also taken against those who had transgressed the PFMA provisions. • The balance of irregular expenditure for the year under review has been referred to the Legal Unit to advice on the appropriate steps to be taken against any transgression. A global leader in the development and use of Information and Communication Technologies for socio-economic development

5. WASTEFUL AND FRUITLESS EXPENDITURE • An amount of R13 478 Million was reported during the year under review. 92% relates to prior years whilst 8% is for the year under review. A process led by the Legal unit is currently underway to investigate, deduct and recover money from employees/suppliers who have transgressed as well as taking disciplinary steps to prevent recurrence. A specific matter in relations to R1, 657 million has been referred to the Law enforcement agencies. A global leader in the development and use of Information and Communication Technologies for socio-economic development

6. PERFORMANCE AGREEMENTS For the 2011/12 financial year, 7 employees in the Department had not signed performance agreements: 1. Head of Ministry  2. Private Secretary 3. Media Liaison Officer 4. Assistant MLO 5. Director: ISAD Cluster, 6. Chief Director: Multi-Lateral 7. Director: Planning and Foresight This matter has been addressed through a combination of ensuring that these employees sign the agreements as well as disciplinary processes where there was no cooperation from employees. A global leader in the development and use of Information and Communication Technologies for socio-economic development

7. INTERNAL AUDIT REPORTS • During the year under review, Internal Audit conducted audits in the following areas: Asset Management, Risk Management, Financial Management, Performance information and Corporate governance. • Recommendations on all these areas were presented to management structures and correctives actions were developed to address deficiencies. • Internal audit regularly conducts follow-up audits to verify the implementation of the action plans and the effectiveness of internal controls. A global leader in the development and use of Information and Communication Technologies for socio-economic development

8. PAYMENT OF PERFORMANCE BONUSES • The performance agreements set standards that must be met by the employees annually. In cases where standards have been exceeded, performance bonuses are then paid to employees. This is also defined in the Performance management policy of the Department. • A performance assessment board is constituted to determine the individual contribution of each employee and recommend appropriate rewards and also recommend areas that may require further improvement. • During the year under review, 146 non-sms were paid R2, 779 million and 12 SMS were paid R670, 000. • No employee is assessed to receive a performance bonus without a performance agreement. A global leader in the development and use of Information and Communication Technologies for socio-economic development

9. COMMUNICATION • The Department develops tailor-made educational materials for various projects and programmes. These materials are distributed to the relevant target market through the following channels: • Offices of the SOEs reporting to the Department both at national and regional levels, • Ministerial Imbizos, • Municipalities, • Collaboration with GCIS, • Strategic partners, e.g. universities and FET colleges, • IGR forums in provinces, • DoC website,. A global leader in the development and use of Information and Communication Technologies for socio-economic development

10. SOE OVERSIGHT • As part of strengthening the oversight function, a SOE Oversight branch has been created, through the restructuring process, to ensure that the Department is able to effectively fulfill its oversight responsibility. • A joint planning process which involves the Department and SOEs was established to ensure alignment of plans. A global leader in the development and use of Information and Communication Technologies for socio-economic development

11. SOE OVERSIGHT • Expenditure patterns of SOEs are analyzed on a quarterly basis and feedback on corrective steps are provided through various engagements, i.e. Minister’s bilateral meetings and the interactions between CEOs and the leadership of the Department on areas that require intervention. The Department further follows up on actions stemming from all engagements with SOEs. • In recognition of governance challenges faced by the SOEs, a clean audit process has been initiated by the Minister under guidance of the Auditor General to ensure that all entities and the Department attain clean audits by 2014. A global leader in the development and use of Information and Communication Technologies for socio-economic development

12. ICT HUBS • The ICT Hubs are established with a purpose of facilitating the growth and development of ICT SMMEs in under-served provinces. The program is structured in manner that the Department develops a business and operating model. The provinces and other players in the sector are required to donate premises, identify suitable location and contribute funding for implementation A global leader in the development and use of Information and Communication Technologies for socio-economic development

13. Management Performance Assessment Tool Results Management performance areas and standards The self-assessment results position departments in terms of four progressive levels of management performance against set standards in multiple management performance areas. A department which scores at Level 1 or Level 2 for a particular management area is non-compliant with the minimum legal prescripts in that management area and/or is performing poorly in terms of its management practices in that management area. A department which scores at Level 3 is fully compliant with the legal prescripts in that management area. A Level 4 department on the other hand is fully compliant and operating smartly in terms of its management practices in that management area. A global leader in the development and use of Information and Communication Technologies for socio-economic development

14. MPAT RESULTS A global leader in the development and use of Information and Communication Technologies for socio-economic development