USAASA ANNUAL REPORT 20102011 PRESENTATION TO THE PARLIAMENT

USAASA ANNUAL REPORT 2010/2011 PRESENTATION TO THE PARLIAMENT PORTFOLIO COMMITTEE 1 st November 2011

REVIEW OF ANNUAL REPORT 2010/2011

USAASA ANNUAL REPORT 2010/11 FOREWORD • Year under review brought new Board members and new EXCO • The Agency has seen drastic changes in the financial year in question due to migration in to the new structure. • Foundational projects remained at the fore as they are critical to future project sustainability. • Migration to new structure resulted in significant project delays

USAASA ANNUAL REPORT 2010/2011

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USAASA ANNUAL REPORT 2010/2011 GENERAL INFORMATION continued… The Agency’s projects this year were critical foundation projects designed to enhance the efficiency of the Agency in achieving its mandate. In addition pioneering projects such as the Broadband projects were designed to ensure sustainability of deployed infrastructure and to ensure the mainstreaming of technology for development purposes.

USAASA ANNUAL REPORT 2010/2011 GENERAL INFORMATION continued… VISION USAASA is the leading organisation in the promotion of the goals of universal service and access to Information Communication Technology services for socioeconomic development. MISSION To facilitate the establishment of access to ICT services in partnership with all stakeholders towards achievement of an information society.

USAASA ANNUAL REPORT 2010/2011 GENERAL INFORMATION… LEGAL AND CONSTITUTIONAL MANDATES The Universal Service and Access Agency of South Africa (USAASA) is a State Owned Entity established through the Electronic Communications Act, no 36 of 2005. The Agency’s mandate is to promote the goals of universal access and universal service to ensure that “every man, woman, and child whether living in the remote areas of the Kalahari or in the urban areas of Gauteng can be able to connect, speak, explore and study using ICT’s.

INTERNATIONAL TRIP 2010/2011

INTERNATIONAL TRIPS continued…… 10

Pre-Determined Objectives

USAASA ANNUAL REPORT 2010/11 KEY PROJECTS 1. Set Top Box (STB) Subsidies as part of Broadcast Digital Migration (BDM) – 2. Increase in Broadband Access 3. Hand Over of existing Community Access Centres and School Cyber labs 4. New Public Access Centres (Rapid Deployment) 5. Development of the Universal Access and Service Strategy 6. Fund Manual Standard Operating Procedures for application of the USAF

USAASA ANNUAL REPORT 2010/2011 PROGRAMME PERFORMANCE USAF Programme overview summary voted funds 1. STB scheme of Ownership & Support R 180 million 2. BDM capacity building R 17. 3 Million 3. Increase in Broadband Infrastructure million R 13. 5 4. Implementation of Handover Strategy 300 million R 23, 686, 5. New Public Access Centres million R 13, 080 6. Development of the Universal Service & Access Strategy R 2, 7 million

USAASA ANNUAL REPORT 2010/2011 PROGRAMME PERFORMANCE USAF Budget adjustments Programme Voted funds Adjusted 1. STB scheme of Ownership & Support (as part of BDM) R 180 m n/a 2. BDM capacity building R 13. 7 m n/a 3. Increase in Broadband Infrastructure R 13. 5 m n/a 4. New Public Access Centres R 13 (r. o. ) R 16. 6 5. Implementation of Handover Strategy R 23. 6 m R 18. 6 (not received) 6. Development of the Universal Service & R 2. 7 m Access Strategy R 3. 1 7. Development of Fund Manual n/a 8. Connectivity schools & cyber labs R 2. 1 m R 3. 5

Project 1: Set-Top (STB) Subsidies as part of BDM OUTPUT PERFORMANCE MEASURE/ INDICATOR TARGET MILESTONE STB’s subscribed for poor TV-owing households Percentage of poor TV-owing households subscribed (for purchase of STBs as part of Broadcast Digital Migration 367, 000 subsidised Set Top Boxes distributed Not Achieved. Project put on hold whilst awaiting for the strategy to be approved.

STB Subsidy – Historical Overview • BDM Policy specifies the use of the USAF to subsidize needy TV-owning households • Cabinet approved a subsidy level of R 490 or 70% towards the cost of an STB per household for a total of 5 m needy TV-owning households • This tallies to R 2. 45 b in total from the USAF over the dual illumination period. R 180 m was allocated during 2010/11. • USAASA allocated R 17, 2 m over two years Capacity Building for BDM. R 7, 4 m was spent during 2010/11 financial year. 16

BDM Capacitation • Communications Strategy & Plan. • Means test proposal. Stakeholder Identification & Partnerships. • Needy Households Identification Plan & Systems Design • Project Charter & Operational costs @ 20% • Network Infrastructure review @ 20% project costs • Documentation review & Technical Review 17

Project 2: Increase in Broadband Infrastructure OUTPUT PERFORMANCE MEASURE/ INDICATOR TARGET MILESTONE Deployed Broadband Infrastructure Number of (declared) underserviced areas covered with broadband 3 (declared) underserviced areas with broadband infrastructure. In line with target a competitive Bidding Strategy was developed and achieved. • Msinga Local Municipality. A local operator was appointed to roll out infrastructure. • Emalahleni & Giyani Local Municipalities placed on hold.

Project 3: Community Access Centres and School Cyber Labs (Handover Project) OUTPUT PERFORMANCE MEASURE/ INDICATOR Fully functional and Percentage of sustainable access Access Centres centres handed over and fully functional TARGET MILESTONE 100% community access centres and school cyber labs handed over and sustainable over a long term Not Achieved. Implementation of the handover strategy continued; culminating in completion of the training program and signing of MOU for the first batch of handover projects. Other sites to follow.

Project 4: New Public Access Centres OUTPUT PERFORMANCE MEASURE/ INDICATOR Fully functional and Percentage of sustainable access Access Centres centres handed over and fully functional TARGET MILESTONE 100 new access facilities deployed Not achieved. 23 sites were secured and construction began. Delays due to theft and site identification.

Project 5: Development of the Universal Access and Service Strategy OUTPUT PERFORMANCE MEASURE/ INDICATOR TARGET MILESTONE Universal Access and Service Strategy Report A Universal Service Strategy which encompasses clear indication of access, usage and uptake of ICT appropriate models of access and funding. Development of the Universal Access and Service Strategy. Not Achieved. A service provider was contracted to assist the Agency with the development of the strategy and has completed the document. The process of stakeholder consultation and public participation will be undertaken in the next financial year.

Project 6: Fund Manual and Standard Operating Procedures for Application of the USAF OUTPUT PERFORMANC E MEASURE/ INDICATOR Fund Manual and Fund Manual SOP for the and SOP USAF adopted by the Board and Do. C TARGET MILESTONE Clear guidelines for the application of the Fund Manual and SOP for the USAF Not Achieved. Service provider was contracted to assist the Agency with the development of the strategy and has completed the document. The process of stakeholder consultation and public participation will be undertaken in the next financial year.

Project 7: Monitor and Evaluate Effective use and Social Appropriation ICTs OUTPUT PERFORMANCE MEASURE/ INDICATOR TARGET MILESTONE Development of measureable ICT access and impact indicators ICT Access and impact indicators report Finalisation and adoption of a list of universal access and impact indicators Not Achieved. Report on ICT access and impact indicators

USAASA ANNUAL REPORT 2010/11 HUMAN RESOURCES

USAASA ANNUAL REPORT 2010/11 Pos t Lev els Packag e/ Gross Car Allowan ce 13 th Cheq ue Housi ng Per Annu m Medic al Aid Subsi dy Provident Fund Employer Contributio n Per Annum Surname Name Designation Date of Appointme nt Moleele Phineas Chief Executive Officer 01/10/2007 15 1025133 0 0 0 1497. 36 0 0 Mollo Molefi Executive Manager: BDS 01/09/2010 14 830504 0 0 0 1497. 36 0 0 Mngadi Thandeka Executive Manager: Performance 16/07/2010 14 830504 0 0 0 1497. 36 0 0 Hlubi Andrew Chief Financial Officer 03/06/2010 14 830504 0 0 0 1497. 36 0 0 Moiloa Makhotso Senior Manager: Stakeholder 07/09/2009 13 795204 0 0 0 1497. 36 0 0 Lamani Winile National Programme: Manager 26/10/2006 13 819240 0 1497. 36 0 0 Scheepers Sharonne Senior Manager: Administration 21/04/2008 13 727248 0 0 0 1497. 36 0 0 Mngqibisa Sipho Programme: Manager MP 21/04/2008 13 705912 60000 0 0 1497. 36 0 0 Nivi Trevor Senior Manager: Research 16/02/2005 13 727248 0 0 0 1497. 36 0 0 Makenete Thabo Manager: Broadcasting 07/05/2007 13 705912 0 0 0 1497. 36 0 0 Mashiane Jimmy Chief Internal Audit 01/05/2009 13 727248 0 0 0 1497. 36 0 0 Grobler Sare Board Secretariat 01/04/2007 13 727248 0 0 0 1497. 36 0 0 Manamela Joshua Programme: Manager NW 01/06/2000 13 705912 60000 0 0 1497. 36 0 0 Fenyani Ngcwemb e Mantjie IT Manager 01/06/2008 13 695475 0 0 0 1497. 36 0 0 Linda Senior Manager: Finance 01/11/2007 13 727248 0 0 0 1497. 36 0 0 Mathinjwa Aubrey Manager Infrastructure 01/03/1997 12 567957 0 0 0 1497. 36 0 0 Dlamini Phumi Senior Admin Officer 21/05/2007 11 438285 0 0 0 1497. 36 0 0 Mahlangu Khosi District Manager: GP 17/07/2003 11 465180 60000 0 0 1497. 36 0 0 UIF

USAASA ANNUAL REPORT 2010/11 Samons Mongene Manager: Research 02/02/2001 11 465180 0 1497. 36 0 0 Abrahams Thato Communications Officer 06/12/2010 11 406839 0 0 0 1497. 36 0 0 Sephiri Mokgobo Manager: Accountant 01/01/2011 12 482160 0 1497. 36 0 0 Matsepe Thato Senior Manager IT 13/12/2010 13 705912 0 0 0 1497. 36 0 0 Mbatha Archie Senior Manager SCM 13/12/2010 13 705912 0 0 0 1497. 36 0 0 Nzuza Sandile District Manager: KZN 01/06/2003 11 438285 60000 0 0 1497. 36 0 0 Zoko Vusi Manager Legal Services 01/04/2009 12 504180 0 1497. 36 0 0 Xamesi Jeanette District Manager: EC 01/03/1997 10 304311 60000 25359 9600 1497. 36 12168 38038. 875 Sithole Mandla Programme Manager: KZN 03/03/1997 11 465180 60000 0 0 1497. 36 0 0 Mafole Pontsho Programme Manager: FS 01/07/1999 11 458304 60000 0 0 1497. 36 0 0 Tilimeni Mawethu Programme Manager: EC 01/04/1999 11 472155 60000 0 0 1497. 36 0 0 Marima Ramahlap e Lesiba Programme Manager: LP 01/01/2008 11 412941 60000 0 0 1497. 36 0 0 Daniel Programme Manager: WC 01/05/2006 11 425427 60000 0 0 1497. 36 0 0 Mlangeni Magugu Departmental Administrator 01/06/2003 9 222978 0 18582 9600 1497. 36 12168 27872. 25 Moremi Silas Chief Admin: Officer Finance 01/09/2000 9 240207 0 20017 9600 1497. 36 12168 30025. 875 Maluleka Thilly HR: Practitioner 01/06/2003 9 219681 0 18307 9600 1497. 36 12168 27460. 125 Ceda Karabo Communications Officer 01/06/2003 9 236658 0 19722 9600 1497. 36 12168 29582. 25

USAASA ANNUAL REPORT 2010/11 Mashaba Evelyn Departmental Administrator 03/03/1997 9 243810 0 20318 9600 1497. 36 12168 30476. 25 Mapela Esme SCM Admin 01/08/1998 10 299814 0 24985 9600 1497. 36 12168 37476. 75 Manyama Moyahabo Finance Administrator 16/03/2009 9 210084 0 17507 9600 1497. 36 12168 26260. 5 Mokone Paul OHS Administrator 10/09/2007 8 182073 0 15173 9600 1476. 96 8240. 04 22759. 125 Rangateng David HR: Practitioner 01/05/2002 9 219681 0 18307 9600 1497. 36 12168 27460. 125 Motlhabi Tshepiso HR: Practitioner 01/09/2007 9 219681 0 18307 9600 1497. 36 12168 27460. 125 Maselela Maria Front Desk Coordinator 01/06/2008 8 179382 14949 9600 1370. 52 12168 22422. 75 Makhafola Khumo Legal Administrator 04/08/2008 8 179382 0 14949 9600 1497. 36 12168 22422. 75 Sekome Roneah Registry Officer 02/03/2009 8 176733 0 14728 9600 1248. 84 12168 22091. 625 Mosioa Caroline Cleaner 01/10/2010 2 55830 0 4652. 5 9600 654. 36 12168 6978. 75 Mbele Grace Cleaner 01/10/2010 2 55830 0 4652. 5 9600 654. 36 12168 6978. 75

USAASA ANNUAL REPORT 2010/11 Kgomo Japhter IT End User 01/12/2010 9 206982 0 17249 9600 1497. 36 12168 25872. 75 Mahloane Mando PA to CFO 06/12/2010 9 206982 0 17249 9600 1497. 36 12168 25872. 75 Mohlapo Mary-Ann PA to BDS 06/12/2010 9 206982 0 17249 9600 1497. 36 12168 25872. 75 Msibi Nomthandaz o PA to CS 01/01/2011 9 206982 0 17249 9600 1497. 36 12168 25872. 75 Dlamini Gontse Board Administrator 01/01/2011 9 206982 0 17249 9600 1497. 36 12168 25872. 75 Mbangi Mzuqhamile Internal Auditor 01/12/2010 10 258342 0 21529 9600 1497. 36 12168 32292. 75 Bokaba Tshepiso PA to CEO 01/01/2011 10 258342 0 21529 9600 1497. 36 12168 32292. 75 Ramosebu di Hilda Internal Auditor 01/01/2011 10 258342 0 21529 9600 1497. 36 12168 32292. 75 Matlana Nozibonelo Provincial Administrator: FS 01/03/2011 9 206982 0 17249 9600 1497. 36 12168 25872. 75 August Anathi Provincial Administrator: WC 01/03/2011 9 206982 0 17249 9600 1497. 36 12168 25872. 75 Masuku Refiloe Provincial Administrator: LP 01/03/2011 9 206982 0 17249 9600 1497. 36 12168 25872. 75 2467145 4 600000 47308 5 25920 0 83267. 7 6 32460 8 709627. 13

HR continued… Vacancies: Executive Manager: Corporate Services Provincial Programmes Manager: Northern Cape Resignations & Promotions Executive Manager: Corporate Services Provincial Programmes Manager: Northern Cape Performance Reward 6% levels 13 -upwards 8% levels 1 -12 29

HUMAN RESOURCE MANAGEMENT POST LEVELS & GENDER STATISTICS Race: AM = AFRICAN MALE, AF = AFRICAN FEMALE, CF = COLOURED FEMALE & WF = WHITE FEMALE POSITION USAASA DPSA Number LEVELS CEO 15 EXECUTIVE MANAGERS M GENDER F RACE 15 1 1 14 DEPUTY DIRECTOR GENERAL CHIEF DIRECTOR 14 3 2 1 SENIOR MANAGERS 13 DIRECTOR 13 12 8 4 MANAGERS 12 DEPUTY DIRECTOR 12 5 4 1 ADMINISTRATION MANAGER/ PROVINCIAL PROGRAMME MANAGERS/ LEGAL OFFICER/ RESEARCH MANAGER/COMMUNICATIONS OFFICERS/ INTERNAL AUDIT/ DISTRICT MANAGERS/ SCM OFFICERS ADMINISTRATORS/ FINANCE OFFICERS/ HR OFFICERS/ RECEPTIONIST/ PROVINCIAL ADMINISTRATORS HYGIENE SPECIALISTS 10 - 11 ASSISTANT MANAGER 10 - 11 23 11 12 8 -9 CLERKS/ ADMINISTRATORS/ OFFICERS/ SECRETARIES CLEANERS & 6 -9 18 4 14 04 AM 14 AF 1 -5 2 0 2 2 AF 2 -5 1 AM 2 AM 1 AF 8 AM 2 AF 1 CF 1 WF 04 A M 01 WF 11 AM 11 AF 01 WF

USAASA ANNUAL REPORT 2010/11 EMPLOYEE WELLNESS PROGRAMMES • The Agency has deployed an employee assistance platform that enables each USAASA employee access to a variety of discounted services from travel to children’s homework assistance to medical and psychological services. • In addition to the basic platform, the Agency has included telephonic and face-to-face consultations with therapists with the option of assistance outside of medical insurance limits. • Monthly workshops on personal health, personal financial management, competitions and emergency road assistance.

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USAASA ANNUAL REPORT 2010/11 REPORTS TO THE FINANCIAL STATEMENTS REPORT OFTHE AUDIT COMMITTEE EFFECTIVENESS OF INTERNAL CONTROL • The internal systems were tested and found to be ineffective, including deficiencies in the supply chain management process, information technology and human resources, risk and prevention plan and compliance with approved delegation of authority. However, corrective action is being taken. RISK MANAGEMENT • A risk management strategy has been formulated and adopted. However the Operational Risk Management Committee is not functional due to key role players and lack of adequate handover plans that were developed by management were not fully implemented.

USAASA ANNUAL REPORT 2010/11 REPORTS TO THE FINANCIAL STATEMENTS REPORT OF THE AUDIT COMMITTEE GOVERNANCE • Majority of governance processes were found to be adequate and partially effective. Management and the Board have put mechanisms to ensure adequacy and effectiveness of governance practices. EVALUATION OF FINANCIAL STATEMENTS • Financial statement of USAASA & USAF were found to comply with all applicable accounting practises • The committee confirms that the adoption of the going concern assumption in preparation of the Annual Financial Statements for USAASA & USAF were appropriate.

USAASA ANNUAL REPORT 2010/11 REPORT ON THE FINANCIAL STATEMENTS The financial statements present fairly, in all material respects, the financial position of the Universal Service and Access Agency of South Africa as at 31 March 2011, and its financial performance and cash flows for the year ended in accordance to GRAP & PFMA.

USAASA ANNUAL REPORT 2010/11 REPORT ON THE OTHER LEGAL REGULATORY REQUIREMENTS Predetermined Objectives • Targets were not specific in clearly identifying the nature and required level of performance • Targets were not measurable in identifying the required performance Planned • 71% of the planned and reported indicators/measures were no clear, with an unambiguous definition to allow for data to be collected consistently. Expenditure Management • Did not take effective and appropriate steps to prevent irregular expenditure as per the requirement of the PFMA Annual Financial Statements, Performance and Annual Reports • Did not submit financial statements for auditing within two months after the end of the financial year as per the requirement of the PFMA • Submitted financial statements for auditing that were not prepared in all material aspects in accordance with generally accepted accounting practices as required by the PFMA, with regards to plant, equipment and world cup disclosures which were subsequently corrected.

USAASA ANNUAL REPORT 2010/11 REPORT ON THE OTHER LEGAL REGULATORY REQUIREMENTS continued… STRATEGIC PLANNING & PERFORMANCE MANAGEMENT • Did not ensure that the public entity has and maintained an effective, efficient and transparent system of internal control regarding performance, which described and represented how the entity processes performance planning, monitoring, measurement, review and reporting were conducted, organised and managed as required by the PFMA. ASSET MANAGEMENT • Did not perform and keep records of an asset reconciliation and creditors reconciliations as per the PFMA

USAASA ANNUAL REPORT 2010/11 REPORT ON THE OTHER LEGAL REGULATORY REQUIREMENTS continued… INTERNAL CONTROL • LEADERSHIP – Did not ensure that performance management systems and processes are in place before and during the strategic planning session to ensure that targets are measurable, time bound, specific, accurate and realistic. • FINANCIAL & PERFORMANCE MANAGEMENT – The Agency used a service provider to manage the fixed asset register and bar-coding however, it failed to deliver on time and as a result the AFS were delivered late for audit purposes. • GOVERNANCE – There are no business continuity plan, disaster recovery plan and fraud prevention plan

USAASA ANNUAL REPORT 2010/11 FORMAT OF THE AUDIT REPORT continued…. AUDIT OPINION - USAASA • The financial statements fairly present fairly, in all material respects, the financial position of the Universal Service and Access Agency of South Africa as at 31 March 2011, and its financial performance ans cash flows for the year then ended in accordance with SA Standards of GRAP and in the manner required by the PFMA EMPHASIS OF MATTER - USAASA • Irregular expenditure : to the amount of R 490, 000 as a result of splitting of tender • Material under spending of the budget • Fruitless and wasteful expenditure : to the amount of R 66, 000 as result of

USAASA ANNUAL REPORT 2010/11 FORMAT OF THE AUDIT REPORT continued…. AUDIT OPINION – USAF The financial statements fairly present fairly, in all material respects, the financial position of the Universal Service and Access Agency of South Africa as at 31 March 2011, and its financial performance and cash flows for the year then ended in accordance with SA Standards of GRAP and in the manner required by the PFMA EMPHASIS OF MATTER - USAF Attention is drawn to the material under-spending of the USAF in relation to the R 180 million that was never transferred to the Agency by the Shareholder in respect of the Broadcasting Digital Migration.

ANNUAL FINANCIAL STATEMENTS - USAASA 41

Notes to the Annual Financial Statements Note pages 18 to 32 of the audited financial statements document.

ANNUAL FINANCIAL STATEMENTS - USAF 45

NOTES TO THE ANNUAL FINANCIAL STATEMENTS Note pages 14 to 21 of Audited Financial Statements Annual Report 2010. 2011write upssareUSAF Annual Financial Statements-GRAP 2011. pdf

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