PRESENTATION ON THE 201718 QUARTER 1 PERFORMANCE REPORT

PRESENTATION ON THE 2017/18 QUARTER 1 PERFORMANCE REPORT 06 SEPTEMBER 2017 1

PRESENTATION OVERVIEW q Introduction q Strategic Goals q Overview of 2017/18 First Quarter Performance Report q Performance per Programme and key milestones (Impact) q Financial performance q Feedback on the 2016/17 Audit Report q An update on filling of vacancies 2

INTRODUCTION q The Department of Communications (Do. C) presents the 2017/18 financial year first Quarter Performance Report (QPR). q This performance report is in line with Section 195 of the Constitution and other legislative prescripts that guide performance management in the public sector to display and promote transparency and accountability to stakeholders and the general public concerning matters under their control. 3

STRATEGIC GOALS The department set itself the following strategic goals: q Effective and efficient strategic leadership, governance and administration; q A responsive communications policy regulatory environment and improved country branding; and q Transformed communications sector. 4

OVERVIEW OF FIRST QUARTER PERFORMANCE REPORT 14 12 First quarter performance Overview per Programme 13 11 10 8 6 4 4 2 2 4 2 1 2 0 Programme 1 Programme 2 Planned Achieved Programme 3 Programme 4 Not achieved Do. C Overall First Quarter Performance 14% 86% Achieved Not achieved 5

PROGRAMME 1: ADMINISTRATION 6

PROGRAMME 1: ADMINISTRATION [2] q The 2016/17 Annual Financial Statements and Performance information were submitted to AGSA and National Treasury on 31 st of May 2017. q The departmental risk register highlighting strategic and operational risks, was developed and approved. q The three-year rolling Internal Audit Strategic Plan and 2017/18 risk-based Internal Audit Annual Operational Plan were signed off by the Audit and Risk Committee. A progress reports on financial, compliance and performance audits against annual operational plan was compiled. q The Department commissioned its first Evaluation Study on the implementation of Broadcasting Digital Migration Communication Strategy (Public Awareness Campaign and Consumer Support) and it is envisaged to be completed during the second quarter. 7

PROGRAMME 1: ADMINISTRATION [1] q The MTSF Outcome 14 2016/17 4 th quarter report was submitted to the Department of Arts and Culture q The following corporate reports were submitted as per legislative requirements: • The Human Resource Plan Implementation Report was submitted to the DPSA. • The 2016/17 Annual Training Report, 2017/18 Workplace Skills Plan together with the 2017/18 first quarter Training Report were submitted to PSETA q The department has seventy-nine (79) total approved posts. • Seventy-two (72) posts are filled and seven (07) are vacant. • Twenty-one (21) employees are on contract: 12 (DTT); 3 (Industry Research & Analysis); 2 (Minister’s Office); 1 (Dep Minister’s Office); 1 (Office of the DG); 1 (Entity Oversight) and 1 (Facilities Management) q In terms of Employment Equity: • At senior management (SMS) level, females are accounted for 11 (55%) and males 09 (45%) respectively; and • People with Disabilities constitute 1. 3%. 8

PROGRAMME 2: COMMUNICATIONS POLICY, RESEARCH AND DEVELOPMENT 9

PROGRAMME 2: COMMUNICATIONS POLICY, RESEARCH AND DEVELOPMENT Performanc Target for e Indicators 2017/18 as per APP Target for Quarter 1 Description of Actual Reason for variance Achievement and Planned Action Audio. Visual and Digital Content Act implemente d Audio-Visual and Digital Content Bill for South Africa developed Five Stakeholder Consultation s on the Audio-Visual and Digital Content coordinated Five Stakeholder Consultations on the Draft white paper on Audio-Visual and Digital Content were not coordinated. Engagements with relevant Departments are ongoing on matters that need further clarity and elaboration in the finalisation of the White Paper on Audio-Visual and Digital Content. Media Transformat ion and Diversity Policy Implemente d Draft Position Paper on the Media Transformati on and Diversity Policy submitted to the Minister Research/ Discussion Document finalised and approved by MANCO A discussion document on the Media Transformation and Diversity was finalised and approved by MANCO for submission to the Ministry. None 10

COMMUNICATIONS POLICY, RESEARCH AND DEVELOPMENT – key milestones Media diversity and transformation discussion paper highlights the following proposals: q The agencies responsible for ensuring media diversity must be strengthened. q The role of government, through agencies such as the Media Development and Diversity Agency (MDDA) and the Universal Service Agency of South Africa (USSASA), is critical in ensuring continued and consistent funding for community and small commercial media that serve marginalised communities. q At the same time, government should explore additional policies to promote media diversity other than through government advertising and support through established agencies, as this has proved inadequate. q Legislation on government advertising must be tightened to ensure that it corrects market failures and promotes diversity. q The 30% government adspend to community media must be enforced across national, provincial and local government. 11

PROGRAMME 3: INDUSTRY AND CAPACITY DEVELOPMENT 12

PROGRAMME 3: INDUSTRY AND CAPACITY DEVELOPMENT [1] Performance Indicators Target for 2017/18 Target for Quarter 1 as per APP Description of Actual Achievement Reason for variance and Planned Action Number of digital broadcasting awareness campaigns (Izimbizo) held per year 10 digital migration broadcasting awareness campaigns (Izimbizo) held Two digital migration broadcasting awareness campaigns held 31 Awareness campaigns were carried out in the North West, Eastern Cape, Kwa-Zulu Natal and Mpumalanga Provinces. The overachievement was as a result of exploring other innovative ways of conducting awareness campaigns, given the limited resources. Establishing partnerships with other National, Provincial Departments and Local Municipalities in their community engagements. Number of reports showing consumer access to digital broadcasting in particular those with government subsidised STBs compiled Four quarterly reports showing consumer access to digital broadcasting compiled One quarterly report showing consumer access to digital broadcasting compiled One (1) report showing consumer access to digital broadcasting was compiled • Registrations recorded = 95, 517 • STBs distributed and installed to households = 50, 917 None 13

BROADCASTING DIGITAL MIGRATION PROGRAMME KEY MILESTONES q Minister established a Digital Migration Advisory Council (DMAC) comprising of Government, SOEs, Broadcasters and Telcom Operators. q The role of the Digital Migration Advisory Council (DMAC) is to support the department in a non-discriminatory approach in order to enable an expedited rollout of STBs in all the provinces of South Africa. § DMAC’s role is limited to providing an advisory role and to execute its work through the established Digital Migration Project Management Office in the department. q The establishment of DMAC has a potential to realise savings benefits on: § Awareness Campaigns; § Registration Campaigns. § Distribution networks; and § Installations.

BROADCASTING DIGITAL MIGRATION PROGRAMME - KEY MILESTONES q DMAC focus areas : § Collaborating with the department to raise education and awareness campaigns leveraging on digital platforms of participating industry operations. § Facilitating the extension of material support in terms of STB rollout and seconding personnel to participate in the Digital Migration Project Management Office. § Assist with strategies and to provide on the ground support to migrate citizens that do not qualify for the government subsidy. § For participating broadcasters (commercial and free-to-air) to advise on strategies to provide and share attractive content across all the digital platforms in order to encourage viewer uptake. § Provide support to the department’s Digital Migration Project Management Office. 15

REGISTRATION, DISTRIBUTIONS AND INSTALLATIONS / ACTIVATIONS OF DTT DEVICES Provinces Registrations Recorded Distribution & Installations Completed Northern 49, 037 23, 651 Free State 67, 987 15, 938 Limpopo 32, 992 29, 881 Mpumalanga 32, 200 8, 825 Kwa. Zulu Natal 27, 339 5, 256 Eastern Cape 13, 117 5, 586 North West 21, 990 3, 529 TOTALS 244, 662 96, 429 q 668, 000 STBs and 680, 000 Antennae and Satellite dishes were produced by manufacturers and delivered to SAPO warehouses for distribution and installations to qualifying television owning households. q A partnership has been established with the Department of Public Works to train 2700 installers (young people and women). DPW is in the process of finalising the procurement services of an accredited service provider for training. 16

PROGRAMME 3: INDUSTRY AND CAPACITY DEVELOPMENT [2] Performance Indicators Target for 2017/18 Target for Quarter 1 as per APP Description of Actual Achievement Reason for variance and Planned Action Number of position papers tabled at multilateral engagements Two position papers tabled at multilateral engagement s on WIPO and WRC 19 The department attended the WIPO 34 th Session of the SCCR held on the 1 st to 5 th May 2017 in Geneva Switzerland the report on the deliberations was compiled. None Number of Stakeholder engagements coordinated 10 2 Stakeholder engagement s coordinated Two Stakeholder engagements were coordinated during the quarter under review: None One position paper on WIPO Broadcasting Treaty (1). Inter-Departmental Meeting in preparation for WIPO’s 34 th Session of the SCCR. (2). Brics interdepartmental meeting. 17

INTERNATIONAL AND STAKEHOLDER RELATIIONS – key milestones q The 34 th Session of the Standing Committee on Copyright and Related Rights (SCCR) of the World Intellectual Property Organisation (WIPO) conference continued the discussions on the following issues: the Broadcasting Treaty – protection of Broadcasting Organisation, Exceptions and Limitations for Libraries and Archives, Expectation and Limitations for Educational and Research Institutions and persons with other Disabilities. • Protection of Broadcasting Organizations – The SCCR pursued discussions on the protection of broadcasting and cablecasting organizations in the tradition sense. There seemed to be an understanding to limit the text of the draft Broadcasting Treaty to be signal-based and focus on broadcasting organizations in the traditional sense, with the appreciation that this includes broadcast in any technology platform, to render the treaty technologically relevant. It was further agreed that the definition for Broadcasting, should take into account the 21 st technological developments and existing definitions in current international treaties. q The BRICS Inter-Departmental meeting discussed the overview of Chinese Chairship, the planning for South Africa’s BRICS Chairship and Hosting of the 10 th BRICS Summit. § The Inter Ministerial Committee (IMC) was requested to ensure optimal synergy between the successive Chinese and South African BRICS chairships. In keeping with the directive to create synergy and establish continuity in BRICS, we should therefore also seek to build further on the Chinese proposals during our chairships in 2018. § The IMC also discussed the preparation for the review of the BRICS Strategy (adopted by Cabinet in September 2012) which will be submitted to Cabinet prior to the UNGA meeting in September 2017, together with proposals for hosting the 10 th BRICS Summit in 2018. § The support and commitment to ensuring that the President presides over a successful chairship as well as the 10 th BRICS Summit in 2018, is highly valued. 18

PROGRAMME 4: ENTITY OVERSIGHT 19

PROGRAMME 4: ENTITY OVERSIGHT [1] Performance Indicators Target for Quarter Description of Actual 2017/18 as per 1 Achievement APP Reason for variance and Planned Action Number of entities quarterly oversight reports submitted to the Executive Authority 20 quarterly oversight reports of entities (SABC, MDDA, Brand. SA, FPB and ICASA) reports submitted to the Executive Authority Five quarterly oversight reports were analysed and submitted to the Executive Authority None Number of funding requests compliant to the drawdown conditions 12 funding requests compliant to thedraw-down conditions Three funding requests compliant to the draw-down conditions Three funding requests were received and processed None 20

ENTITY OVERSIGHT – KEY MILESTONES Quarterly oversight reports provides the Minister with an analysis of SOE’s performance against key deliverables that were set for the fourth quarter of the 2016/17 financial year. Feedback letters based on the analysis reports are submitted to Chairpersons of the Board. q FPB had a total of 74 milestones planned for the quarter under review. The entity achieved 61 milestones (82%) and the remaining 13 (18%) were not achieved. The entity was requested to ensure that the following matters are addressed: finalisation of the Online Policy; delays in responding to queries; costing of key targets against available funds; lack of co-operation with distributors; and poor response rate by universities for partnerships on the Classification course. q ICASA had planned to deliver a total of 73 key targets in the fourth quarter of the 2016/17 financial year. ICASA achieved 51 key targets with 22 targets not achieved (70%). The programmes that contributed to the non-achievement of key targets were Policy, Research & Analysis and Engineering & Technology due to capacity constraints. q Brand. SA had 48 targets planned for the period under review. 44 targets were achieved and only 4 were not achieved. The overall achievement of Brand. SA is 96%. The key target that was not achieved relates to market activations in the UK, USA, China, UAE and on the continent (including GSA). This target was not achieved due to the absence of the Country heads. 21

ENTITY OVERSIGHT – key milestones q The overall achievement of the SABC for the fourth quarter reflects 18% (3 targets out of 18). Significant key targets that were not achieved are the digitisation of radio and television studios as well as the migration of 1 channel (Encore) to DTT platforms; management of revenue and expenditure in accordance with the approved budget; approved performance management implementation plan; and performance contracts in place for all staff. In order to correct the deteriorating financial status, the department recommended that SABC provides a comprehensive turnaround plan and ensure that performance agreements for executives, seniors and the entire staff are put in place. q MDDA had a total of 30 performance targets across its five programmes in the fourth quarter. The agency achieved 21 (70%) and the remaining key targets were not achieved. The main targets that were not achieved relate to the production of the digital migration strategy; production of a concept document on the review of the MDDA Act as well as the signing of Mo. Us with stakeholders. The department noted the challenges (lack of capacity in critical positions) faced by the MDDA in the 2016/17 financial year. The department requested the Board to ensure the filling of positions as a matter of urgency and furnish the Ministry with a recruitment plan outlining timelines for filling vacant positions. 22

Financial Information Quarter 1 of 2017/18 23

Expenditure for Quarter 1 per Programme BUDGET PROGRAMME R'000 P 1: ADMINISTRATION Q 1 TOTAL EXPENDITURE EXPENDITUR R'000 E R'000 % SPENT AGAINST BUDGET 62 771 16 097 26% P 2: COMMUNICATION POLICY, RESEARCH & DEVELOPMENT 8 492 1 147 14% P 3: INDUSTRY AND CAPACITY DEVELOPMENT 22 290 5 900 26% 1 331 542 310 545 23% P 4: ENTITY OVERSIGHT TOTAL 1 425 095 333 689 23% 24

Total budget allocation per Programme Budget per Programme 1400000 1331542 1200000 1000000 800000 600000 400000 200000 62771 8492 22290 Programme 2 Programme 3 0 Programme 1 Programme 4 25

EXPENDITURE QUARTER 1 PER ECONOMIC CLASSIFICATION BUDGET Q 1 EXPENDITURE R'000 TOTAL EXPENDITURE R'000 % SPENT AGAINST BUDGET COMPENSATION OF EMPLOYEES 76 697 16 112 21% GOODS AND SERVICES 23 416 7 975 34% TRANSFER PAYMENTS 1 324 888 309 585 23% 94 17 17 18% 1 425 095 333 689 23% ITEM MACHINERY AND EQUIPMENT TOTAL 26

TOTAL BUDGET ALLOCATION PER ECONOMIC CLASSIFICATION Per Economic Classification 1324888 1400000 1200000 1000000 800000 600000 400000 200000 76697 23416 94 0 Compensation of employees Goods and Services Transfer payments Capital 27

AN UPDATE ON FILLING OF VACANT POSITIONS 28

UPDATE ON FILLING OF VACANT POSITIONS NO POST CLOSING DATE STATUS 1 2 Director-General DDG: Entity Oversight 26 May 2017 3 DDG: Communications 26 May 2017 Policy Research and Development DD: Internal Audit 19 August 2016 Headhunting in progress Shortlisting process concluded. Awaiting interview date 4 5 6 7 Admin Officer: Legal Services Driver/Messenger (Facilities) 16 August 2017 ASD: Asset and SCM 19 August 2016 N/A Appointment memo submitted for approval Pre-screening completed. Shortlisting process in progress. Budget to be used to appoint an Admin in Ministry. Appointment memo submitted for approval Interviews conducted on 22 August 2017. Verifications are being conducted 29

FEEDBACK ON THE 2016/17 AUDIT REPORT 30

FEEDBACK ON THE AUDIT REPORT q The Portfolio has received three Clean audit reports, three Unqualified audit reports and one Adverse audit report. q The Clean are: Do. C, GCIS and Brand. SA and all have maintained their status. q The Unqualified are: Film and Publication Board, ICASA and MDDA. q Adverse report is for the SABC, which has regressed from qualification opinion of last year. q The AGSA has reported that MDDA, ICASA and SABC requires intervention from the Ministry. 31

FEEDBACK ON THE AUDIT REPORT - DOC q The following areas as identified by the AGSA requires strengthening of controls: ü IT Management and Monitoring; ü Accruals and Commitments; ü Oversight and governance structures at State Owned Entities; and ü Contingent Liabilities Confirmations. 32

FEEDBACK ON THE AUDIT REPORT - GCIS q The following areas as identified by the AGSA requires strengthening of controls: ü IT Infrastructure, management and monitoring especially PERSAL and BAS; ü Accruals and Commitments; ü Standard Operating Procedures (SOP) for Media buying; ü Inconsistence in the Annual Performance Report; and ü Contingent Liabilities Confirmations. 33

FEEDBACK ON THE AUDIT REPORT - BRANDSA q The following areas as identified by the AGSA requires strengthening of controls: ü Overstatement of provisions; ü Leave balances; ü Performance Information – Targets not included in the APP or APR; and ü Supply Chain Management – Non compliance with Treasury Regulations. 34

FEEDBACK ON THE AUDIT REPORT - FPB q The following areas as identified by the AGSA requires strengthening of controls: ü Performance Information – Usefulness and reliability, no sufficient audit evidence (21 indicators affected); ü The Accounting Authority failure to exercise adequate responsibility regarding performance reporting and related controls; ü Misstatements on AFS; and ü Performance of the Audit Committee. 35

FEEDBACK ON THE AUDIT REPORT - ICASA q The following areas as identified by the AGSA requires strengthening of controls: ü Management of Irregular Expenditure – R 27. 5 million and this is recurring; ü Management of Fruitless and Wasteful Expenditure – R 12. 2 million; ü Material Misstatements on AFS; ü Material Misstatements on Performance Information – others were corrected but nine could not and such remained in the report; ü Non compliance with legislation – failure to pay service providers within 30 days; ü Procurement and contract management – no declaration forms (SBD 4 forms), no valid TCC, goods and services above R 500 k procured without competitive process, no local threshold for local content and no declaration of local content submitted; and ü Accounting Authority failure to exercise leadership and proper oversight. 36

FEEDBACK ON THE AUDIT REPORT - MDDA q The following areas as identified by the AGSA requires strengthening of controls: ü Performance Information – reliability and material misstatements; ü Procurement and Contract Management – no declaration forms (SBD 4 forms) and preference points allocation not in line with the PPPFA and BBBEE; ü Management of Irregular expenditure – R 6. 7 million; ü Misstatements on AFS; ü Senior Management and Accounting Authority did not exercise adequate controls and oversight on performance information and financial information submitted to AGSA. 37

FEEDBACK ON THE AUDIT REPORT - SABC q The following areas as identified by the AGSA requires strengthening of controls: ü Going Concern – SABC was not a going concern as at 31 March 2017, however financials were prepared and submitted to the Auditor General assuming the status; ü Accounts Payable - AG’s first finding related to invoices that were recorded in the incorrect period; ü Employee Compensation - There were two special bonuses that were paid in the past fiscal; ü Management of Irregular expenditure valued at R 4, 4 billion; ü Management of Property Plant and Equipment; ü TV Licence - TV licence was accounted for on an accrual basis in the past. The AG raised a finding that we should use accrual accounting; and ü Revenue - Advertising revenue agreements includes discounts offered to clients. These discounts were based on an approved Sales Policy. Some were not in line with the sales policy but were based on approved deviations. 38

THANK YOU 39