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Annual Report 2011/12

This presentation provides an overview of the Communications Annual Report for the 2011/12 financial year, including performance on key targets and a summary of financial performance. It also highlights audit matters and provides an update on the progress made in the first quarter of the 2012/13 financial year.

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Annual Report 2011/12

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  1. Presentation to Portfolio Committee on Communications Annual Report 2011/12 2011/12 Financial Year

  2. Introducing the Team • Ms.Pumla Radebe (Chairperson) • Mr. Sam Ledwaba • Ms.Seadimo Chaba • Mr. Raj Lalbahadur • Ms. Charlotte Mampane • Mr.KenosiMoroka Appointed as from 01 September 2012 Board Members

  3. Presentation Overview • Team Introduction • Performance on Key Targets • Summary of Financial Targets • Summary of Audit Matters • Rollover Request & Other • Q1 2012/13 Progress & Expenditure Report

  4. Performance on Key Targets

  5. Performance against key targets

  6. Performance against key targets

  7. Performance against key targets

  8. Performance against key targets

  9. Performance against key targets

  10. Summary of Financial Performance

  11. Summary of financial performance USAASA The Agency had a budget of R83.2 m of which 92% was spent during the financial year. The budget was spent as follows: • 43% was spent on compensation of employees • 2% on Capital Expenditure • 47% on operational expenditure • 8% was not spent, i.e. approx. R7m The R7mil surplus was due to an unspent portion of the budget that was allocated to the Broadcasting Digital Migration project for capacity building. A roll over was requested in this regard. The Agency had net cash flows of R15.6 m in the bank.

  12. Summary of financial performance, cont… USAF The fund was allocated a total budget of R260.9 m approximately 98% was unspent. The projects that were budgeted for during the financial year were: • Broadband digital migration, 84% of the entire budget • Rapid deployment • Handover project • Broadband infrastructure None of the projects could get off the ground due to instability that was experienced at senior management as well as at the board level. The cash reserves were a total of R255.3 m at year-end. The entire budget has been the subject of a roll over request that was presented to the National treasury.

  13. Summary of Audit Matters

  14. Summary of Audit Matters USAASA The Agency obtained an unqualified audit opinion with several emphasis of matters as reflected below:- • Fruitless and wasteful expenditure - R1,032m (77% due to rental of offices not occupied; 20% due to penalties & interest for late payments to SARS; remainder due to an amount paid for utilization of venue for cancelled workshop). • Irregular Expenditure - R42,161m (91% due to non-compliance with bidding processes as reported by forensic audit; 58% of total relates to incidents from 2010/11 but only reported in 2011/12). • Other matters relating to the audit of performance information as a result of SMART criteria non-compliancei.e. targets not specific, not measurable, not achievable, not realistic, not timely.

  15. Summary of Audit Matters… USAF The Fund also obtained an unqualified audit opinion with the following emphasis of matter:- • Material under spending of grant - R220m • Fruitless and wasteful expenditure - R3,712m (relates to amounts paid to Telkom & Sentech for internet connectivity while computers were not connected) • Irregular expenditure - R19,458m (76% of total amount relates to procurement during 2010/11 but discovered during 2011/12; 24% due to unauthorised fund transfer from USAF to USAASA)

  16. Rollover Request & Other

  17. Rollover Requested * The amount includes the R220 million that was set aside for set top boxes subsidy that is also unspent.

  18. Challenges • CEO • CEO resigned during March 2012 and there is no replacement as yet • Suspensions • 3 Executive managers are on suspension and one (Executive Manager: Business Development Services) has since resigned • 1 Senior Manager: Supply Chain Manager • 1 Senior Manager: ICT (resigned) • Delivery on projects needs to be accelerated

  19. Update on Disciplinary Processes • Disciplinary process began in December 2011 and has experienced legal delays. • Process currently on recess (adjourned) due to unavailability of Chairman • Will resume once more in November, 2012 • Anticipated completion is year-end

  20. Way Forward

  21. Way forward • The newly appointed board intends to implement the following: • Appoint Board Committees within the current quarter • Appoint a CEO by November 2012 • Appoint the Board Secretary • Speed up the process of finalising the disciplinary hearings • Enhance and tighten corporate governance measures • Review the organisation • - Audit skills • - Review organogram • - Re-align existing skills

  22. Q1 2012/13 – Progress as at end of June 2012

  23. Q1 Core Project Progress

  24. Q1 Core Project Progress

  25. Q1 Expenditure Report

  26. THANK YOU !

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