Presentation to the Portfolio Committee on Telecommunications and

Presentation to the Portfolio Committee on Telecommunications and Postal Services Committee Chairperson - Honourable Ms. Mmamoloko Kubayi USAASA and USAF Quarter 2 Performance Reports 21 February 2017 “Universal Access and Service to ICT for All”

Vision, Mission & Values Mission: Vision: “Universal Access and Service to ICT for All”. • To facilitate the rollout of adequate Information and Communication Technology (ICT) infrastructure to enable universal access to underserviced 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. 2

USAASA & USAF Strategic Objectives 2016/17 – 2020/21 USAASA • Optimise organisational efficiency by 2021 to support the project delivery of the Universal Service and Access Fund • Ensure availability of automated and integrated business processes by 2021 to support the project delivery of the Universal Service and Access Fund • Ensure availability of responsive IT systems by 2021 to support the project delivery of the Universal Service and Access Fund • Provide legally sound services to the Agency by 2021 to support the project delivery of the Universal Service and Access Fund • Render an effective financial management function by 2021 to support the project delivery of the Universal Service and Access Fund • Promotion of good governance within the Agency by 2021 • USAASA established as a centre of excellence for universal access and universal service market information, knowledge and expertise by 2021 • Promotion of good stakeholder relations for purposes of enhancing the USAASA & USAF brands by 2021 USAF • To provide access to ICT services in 6 identified under-serviced areas by 2021 as part of implementing the South Africa Connect digital development strategic pillar to complete the National Health Insurance Districts. • To facilitate the broadband connectivity of educational institutions, primary health care facilities and government institutions by 2021. • To fund digital television access equipment for qualifying TV-owning needy households by 2021.

USAASA Q 2 Performance Human Resources Performance Outcomes: Achieved targets Legends § Achieved q Work Skills Plan implementation § Not Achieved Targets not Achieved q Review Learning & Development policy Q 2 Progress: Learning & Development Policy was presented to EXCO, approved by REMCO and submitted to Board on 26 October 2016 q. Monitor and report on HR SLA implementation Information Technology Performance Outcomes: Q 2 Progress: HR SLA was submitted for approval on 26 October 2016. Achieved targets Implementation to commence thereafter q Monitor and report on percentage availability of business systems Targets not Achieved q. ERP System maintenance and support Q 2 Progress: A new Go-Live date was set for March 2017 to allow for finalisation of outstanding ERP activities q. Capacitation of IT Human Resources through recruitment and Training of SAP Critical skills. Q 2 Progress: recruitment of SAP Critical skills to be considered as part of OD processes 2

USAASA Q 2 Performance Legal Services Performance Outcomes: Achieved q Promote legal compliance by providing written legal opinions and/or advice within 7 working days and drafting contracts with 21 working days from date of receipt of all relevant information Targets not Achieved q None Legends § Achieved § Not Achieved Research Performance Outcomes: Achieved targets q None Targets not Achieved q. Impact assessments in three (3) identified USAF subsidised local municipal areas Q 2 Progress: Internal Fieldworkers have been prepared for impact assessment study. Conclusion of the assessments by December 2016 3

USAASA Q 2 Performance Stakeholder Engagement Performance Outcomes: Achieved targets q None Targets not Achieved q Implementation of the Stakeholder Engagement Strategy and Integrated Communications Policy Q 2 Progress: Integrated Communications Policy was submitted for approval by BARC and Board: 26 October 2016 Corporate Governance Performance Outcomes: Achieved targets q Monitor and report on organisational compliance with the PFMA and Treasury Regulations Checklist for Public Entities Targets not Achieved q None Legends § Achieved § Not Achieved 4

USAASA Mitigations: Q 2 Performance Unmet Quarter 2 Targets Reasons for deviations Action Plans & Policy was approved by EXCO and REMCO but not submitted for Board approval by end of Q 2 - Policy submitted to Board for approval on 26 October 2016 Monitor and report on SLA implementation Draft HR SLA not approved by the end of Q 2 and implementation thereof could not commence in the same quarter - HR SLA was submitted for REMCO and Board for approval: 26 October 2016 ERP System maintenance and support of the implemented modules The ERP system did not go- live as planned on 1 st April 2016 - A revised project plan was developed to finalise the project by year-end Review Learning Development policy A new Go-Live date was set for March 2017 to allow for finalisation of outstanding project activities 7

USAASA Mitigations: Q 2 Performance Unmet Quarter 2 Targets Reasons for deviations Action Plans Capacitation of IT human resources through training on SAP Critical skills Recruitment processes for SAP Technical Resources not initiated in Quarter 2 • Capacitation of IT Human Resources is to be considered as part of the OD processes due to be finalised in Q 3 Impact assessments in three (3) identified USAF subsidised local municipal areas Change of strategy: to utilisation of internal resources instead of outsourcing • Fieldwork and data collection will be conducted in all six local municipalities by the end of November. Conclusion of the assessments: December 2016 Implementation of the Stakeholder Engagement Strategy and Integrated Communications Policy was not implemented as it had not been submitted for approval by BARC and Board • The Integrated Communications Policy was submitted for BARC and Board approval (26 October 2016) and implementation will commence thereafter 8

Summary of USAASA 2016/17 Q 2 Performance USAASA Performance Outcomes: q 4 of the 10 planned Q 2 targets were achieved, being 40% of the total planned targets q 6 of the 10 planned Q 2 targets were not achieved, being 60% of the total planned targets 9

Summary of USAASA 2016/17 Performance by end of Q 3 USAASA Q 2 Performance Outcomes USAASA Q 3 Performance Outcomes q 4 of the 10 planned Q 2 targets were achieved, being 40% of the total planned q 7 of the 10 planned Q 3 targets were achieved, being 70% of the total targets planned targets q 6 of the 10 planned Q 2 targets were not achieved, being 60% of the total planned q 3 of the 10 planned Q 3 targets were not achieved, being 30% of the targets total planned targets USAASA Cumulative Performance Outcomes: q 24 of the 32 planned targets were achieved, being 75% of the total planned targets q 8 of the 32 planned targets were not achieved, being 25% of the total planned targets 10

USAASA Staff Complement as at the end of Q 3 2016/17 USAASA Staff Complement 30 USAASA had 56 permanent employees and 4 interns as at the end of the quarter 25 25 23 Appointments • None 20 16 14 15 13 14 Terminations • Two resignations, one at executive management level and one at senior management level • One retirement at skilled level 10 5 5 4 2 0 Top Management Senior Management Professional qualified No. of approved post Skilled Semi - skilled Actual appointments 0 Unskilled Consequence Management • Non performance – three written warnings at executive management level • Insubordination – one suspension at senior management level • Breach of internal controls – one suspension/resignation at executive management level and one suspension at qualified professional level

AUDITOR GENERAL implementation action plan

AUDITOR GENERAL implementation action plan

USAASA 2016/17 Quarter 2 Budget Performance - Revenue Description Revenue Other Income -Interest, levies & tenders Transfers USAASA Operations Total revenue Q 2 Annual Budget Income (R’ 000) Budget Q 2 Income (R’ 000) - - 3 085 69 045 17 261 20 346 Annual Budget Income Budget YTD Income (R’ 000) Income (R‘ 000) YTD Income (R‘ 000) - - 6 116 69 045 34 522 40 638 14

USAASA 2016/17 Quarter 2 Budget Performance - Expenditure Quarter % Variances Spent (R‘ 000) Annual Budget (R’ 000) Q 2 Actual Spending (R‘ 000) Compensation of employees 43 713 10 928 10 189 739 93% Goods and services 24 218 6 054 6 957 -903 115% Depreciation 0 0 698 -698 Other Capex 1 114 279 517 -238 185% Total 69 045 17 261 18 361 -1 100 106% Description Expenditure USAASA Approved Retention of 2015/16 Unspent funds Total Budget (R’ 000) Q 2 Actual Spending (R‘ 000) Available Budget % Spent BDM Distribution & Logistics 131 189 28 240 102 949 22% Enterprise Resource Planning (ERP) 25 063 0% Total 156 252 28 240 128 012 18% Description 15

USAASA 2016/17 Quarter 2 - YTD Budget Performance - Expenditure Annual Budget (R’ 000) YTD Actual Spending (R‘ 000) Quarter Variances (R‘ 000) YTD % Spent Compensation of employees 43 713 21 856 19 609 2 247 88% Goods and services 24 218 11 770 11 037 733 94% Depreciation 0 0 1 387 -1 387 Other Capex 1 114 896 656 240 73% Total 69 045 34 522 32 689 -1 833 95% Description Expenditure USAASA Approved Retention of 2015/16 Unspent funds Total Budget (R’ 000) YTD Actual Spending (R‘ 000) Available Budget % Spent BDM Distribution & Logistics 131 189 28 240 102 949 22% Enterprise Resource Planning (ERP) 25 063 0% Total 156 252 28 240 128 012 18% Description 16

USAASA 2016/17 Quarter 2 Budget Performance - Expenditure USAASA Expenditure : Quarter 2 of 2016/17 (R'000) 10 189 6 957 28 240 517 698 Compensation of employees Goods and services Depreciation Other Capex BDM Distribution & Logistics 17

USAF Q 2 Performance Report 2016 -2017

USAF Q 2 Performance Targets not Achieved q 100% base stations upgraded for Mhlontlo and King Sabata Dalindyebo local municipalities q. Q 2 Progress: Base station upgrades were not completed q. Broadband network connectivity maintained in 127 schools, 93 clinics and 38 traditional ICT centres q. Q 2 Progress: Usage to 98 sites out of 258 sites were monitored. 160 sites do not have a remote monitoring access facility and USAF Performance Outcomes: concerned service providers are working on providing it Achieved targets q None q 14 615 Set-Top Boxes (STB’s) & antennas procured and installed for qualifying needy TV-owning households. SKA was Targets not Achieved area prioritised. q Backhaul upgrades completed for Mhlontlo and King Sabata q. Q 2 Progress: 9 501 set top boxes & antennas installed for Dalindyebo local municipalities in the OR Tambo District qualifying needy TV-owning households q. Q 2 Progress: Backhaul upgrades not completed due to delays in obtaining Confirmation letters and Environmental rights applications Legends § Achieved § Not Achieved 12

USAF Mitigations: Q 2 Performance Unmet Quarter 2 Targets Reasons for deviations Action Plans Backhaul upgrades completed for Mhlontlo and King Sabata Dalindyebo local municipalities in the OR Tambo District Backhaul upgrades - Backhaul upgrades to be completed in not completed due Quarter 3 to delays in obtaining Confirmation letters - Project to be fast tracked to meet the end of and Environmental financial year completion rights applications 100% base stations upgraded for Mhlontlo and King Sabata Dalindyebo local municipalities Project experienced - Procurement process to be concluded in delays in the Quarter 3 awarding of the bid to a licensed - Base station upgrades to be completed in operator thus Quarter 3 necessitating the procurement process to be concluded in 20 Quarter 3

USAF Mitigations: Q 2 Performance Unmet Quarter 2 Targets Reasons for deviations Action Plans Broadband network connectivity maintained in 127 schools, 93 clinics and 38 traditional ICT centres 160 of the 258 connected sites do not have remote monitoring access facility - Service providers concerned have been engaged by the Agency with a view to secure remote monitoring access facility by the 3 rd quarter 14 615 Set-Top Boxes & antennas procured and installed for qualifying needy TV -owning households The focus has been in - Continued engagements with Department the SKA area of Communications (DOC). The project is dependent on increased marketing 9 501 set top boxes & awareness campaigns by the DOC antennas installed for qualifying needy TVowning households during the quarter 21

Summary of USAF 2016/2017 Q 2 Performance USAF Operations Performance Outcomes: q 0 of the 4 planned Q 2 targets were not achieved. q 4 of the 4 planned Q 2 targets were not achieved. 22

Summary of USAF 2016/2017 Performance by end of Q 3 USAF Operations Q 3 Performance Outcomes: q 0 of the 4 planned Q 2 targets were not achieved. q 4 of the 4 planned Q 2 targets were not achieved. USAF Operations Q 3 Performance Outcomes: q 0 of the 3 planned Q 3 targets were not achieved q 3 of the 3 planned Q 3 targets were not achieved. USAF Operations Cumulative Performance Outcomes: q 3 of the 14 planned targets were achieved, being 21% of the total planned targets. 3 targets of the 1 st Quarter were achieved in 3 rd Quarter. q 11 of the 14 planned targets were not achieved, being 79% of the total planned targets 23

USAF 2016/17 Quarter 2 Budget Performance – Revenue Description Annual Budget Income (R’ 000) Quarter 2 Budget Income (R’ 000) Income (R‘ 000) Revenue Other Income (Interest) - - 25 656 Transfers 644 540 162 577 Total revenue 644 540 162 577 188 233 Annual Budget Income (R’ 000) YTD Income (R‘ 000) Description Revenue Other Income (Interest) - - 52 248 Transfers 644 540 321 954 Total revenue 644 540 162 577 374 202 24

USAF 2016/17 Quarter 2 Budget Performance - Expenditure Description Broadband Infrastructure STB Subsidies for BDM Rapid Deployment & Connectivity Bank Charges & Audit Fees Project Costs Total Annual Budget Quarter 2 Budget Actual Q 2 Quarter 2 (R’ 000) Spending (R‘ 000) Variances (R‘ 000) Quarter 2 Spent 32 634 9 600 - 9 600 589 384 147 346 253 333 -105 987 172% 18 776 4 694 2 804 1 890 60% 996 249 907 -658 364% 2 750 688 1 207 -519 175% 644 540 162 577 258 251 -95 674 % 0% 159% 25

USAF 2016/17 Quarter 2 YTD Budget Performance - Expenditure Description Broadband Infrastructure STB Subsidies for BDM Rapid Deployment & Connectivity Bank Charges & Audit Fees Project Costs Total Annual Budget 32 634 Quarter YTD Budget (R’ 000) Actual YTD Quarter YTD Spending (R‘ 000) Variances (R‘ 000) Spent 16 000 - 16 000 0% 589 384 294 692 445 208 -150 516 151% 18 776 9 388 5 391 3 997 57% 996 498 -705 242% -67 105% 2 750 644 540 1 376 321 954 1 203 1 443 453 245 -131 291 % 141% 26

USAF 2016/17 Quarter 2 Budget Performance - Expenditure USAF Expenditure: Quarter 2 of 2016/17 (R'000) 2 804 907 1 207 253 333 Broadband Infrastructure STB Subsidies for BDM Bank Charges & Audit Fees Project Costs Rapid Deployment & Connectivity 27

THANK YOU 28