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I C A S A 2012-2013 Annual Report Parliamentary Portfolio Committee on Communications

I C A S A 2012-2013 Annual Report Parliamentary Portfolio Committee on Communications. Presented by Dr. Stephen Mncube Chairperson, Councillors, CEO and CFO Date : Tuesday, 15 October 2013 Time : 09:30 – 18:00 Venue : Committee Room E249, New Wing, National Assembly Building.

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I C A S A 2012-2013 Annual Report Parliamentary Portfolio Committee on Communications

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  1. I C A S A2012-2013 Annual ReportParliamentary Portfolio Committee on Communications Presented by Dr. Stephen Mncube Chairperson, Councillors, CEO and CFO Date: Tuesday, 15 October 2013 Time: 09:30 – 18:00 Venue: Committee Room E249, New Wing, National Assembly Building

  2. Presentation Outline Part 1 Chairperson’s overview Part 2 Chief Financial Officer’s report Part 3 Chief Executive Officer’s report

  3. Dr. Stephen Mncube Chairperson Part 1

  4. Part 1 - Content • ICASA Vision, Mission and Values • ICASA Organogram • Strategic Output Oriented Goals (SOOGs) • ICASA Programmes • Audit findings in AG report

  5. Vision and Mission VISION To advance the building of a digital society MISSION To ensure that all South Africans have access to a wide range of high quality communication services at affordable prices

  6. Organisational structure

  7. Proposed interim structure

  8. Eight Strategic Goals (1) SOOG1 Transformation of the ICT Sector SOOG2 Ensure the provision of broadband services SOOG3Optimise the use of the radiofrequency and numbering resource to support the widest variety of services SOOG4 Promote the protection of consumers and accessibility for persons with disabilities

  9. Eight Strategic Goals (2) SOOG5 Promote the development of public, community and commercial broadcasting services in the context of digital migration SOOG6 Ensure compliance withlegislation and regulation SOOG7 Strengthen and modernise ICASA SOOG8 Promote competition

  10. ICASA Programmes

  11. Council Response to Audit Findings A two-dimensional approach was adopted: Instituted a “dash-board” that enlisted all audit matters for resolution. The General Licence Fee Regulations were revised to resolve the accuracy of licence fees calculated. Introduced an Interim Organisational Structure in which the regulatory programmes report directly to Council as opposed to the Chief Executive Officer.

  12. Other Council interventions The 8 Strategic Goals of 2012/13 have been re-clustered into 5 Goals for 2013/14 reducing the number of Strategic Targets from 43 to 26; and A Consultant to facilitate the organisational realignment process has commenced in the new financial year.

  13. Clarinda Simpson Chief Financial Officer Part 2

  14. Part 3 - Content • Report of the Auditor-General • Statement of Financial Performance • Statement of Financial Position • Compliance with Laws & Regulations

  15. Report of the Auditor-General: Opinion(1) The annual financial statements present fairly, in all material respects, the financial position of ICASA at 31 March 2013 and its financial performance.

  16. Report of the Auditor-General: Opinion (2) • EMPHASIS OF MATTERS (1) • Attention is drawn to certain notes in the annual financial statements which were deemed material by the Auditor General. • Restatement of corresponding figures (refer note 30.1 to the annual financial statements) • The restatement of corresponding figures for NRF Receivables and Payables in order to reflect supported balances for prior years

  17. Report of the Auditor-General: Opinion (3) • EMPHASIS OF MATTERS (2) Significant Uncertainties (refer note 27 to the annual financial statements) • Significant number of lawsuits in progress against the Authority, of which the outcome at this stage is unknown and as a result no provision was raised in the annual financial statements • Impairment of NRF Receivables (refer note 9 to the annual financial statements) • The Authority was unable to recover long outstanding debt from certain licensees, which was ultimately approved for write off

  18. Statement of Financial Performance Main Account

  19. Statement of Financial Position Consolidated (1)

  20. Statement of Financial Position Consolidated (1)

  21. Consolidated Statement of Cash Flows

  22. Statement of Comparison of Budget and Actual Amounts

  23. Compliance with Laws & Regulations 23

  24. Themba Dlamini Chief Executive Officer Part 3

  25. Part 3 - Content • Linking Performance with Budget • Report of the Auditor-General • Predetermined Objectives • Legal Matters • Programmes Performance • Licensing and Compliance • Engineering and Technology • Markets and Competition • Consumer Affairs

  26. Linking Performance with Budget (1) • Of the R411 million budget allocation, the Authority managed to spend 85% of the allocation • A total of R63,4 million was not spent relating to ring- fenced projects • Actual OPEX of R317 million against a budget of R319 million • A saving of R2million (0.7%) was realised due cutting expenditure on consumables such as printing; stationery; publications and advertising etc.

  27. Linking Performance with Budget (2) • On Projects and CAPEX actual expenditure was 71% less than budget • this under expenditure is attributed to unspent funds earmarked for the relocation of the Head Office and procurement challenges relating to the broadcasting and postal services equipment • Other contributing factors for the slow spending relates to the procurement of the spectrum management software

  28. Report of the Auditor-General (1) Expenditure management • the identification of fruitless and wasteful expenditure R3 671 279 has increased compared to the previous year’s restated amount of R189 292 • This can be attributed to fruitless and wasteful expenditure of R2 789 906 relating to prior years which was only identified in the current year. • The process of taking corrective measures for these amounts has been embarked upon. • Similarly, irregular expenditure of R4 153 874 has increased compared to the previous year’s amount of R538 433. • Of this irregular expenditure of R1 304 108 relates to prior periods identified in the current year. • The details of fruitless, wasteful and irregular expenditure are contained in the notes to the annual financial statements.

  29. Report of the Auditor-General (2) Internal audit • The internal audit did not evaluate and develop recommendations on the effectiveness and efficiency of controls throughout the year. • The institution did not ensure that there was an adequately functioning internal audit unit that identified internal control deficiencies and recommended corrective action effectively throughout the year

  30. Report of the Auditor-General (3) Investigations • The investigation was initiated based on allegations of possible fraudulent activities by the supply chain manager. • The supply chain manager was suspended and subsequently charged with alleged misconduct and disciplinary proceedings were instituted. • The employee tendered his resignation with immediate effect during the disciplinary hearing and the disciplinary process was therefore terminated. • ICASA had an obligation, due to the seriousness of the charges and in terms of ICASA’s Fraud and Prevention Policy, to formally report the internal investigation to the Hawks in terms of section 34(3)(a) of the Prevention and Combating of Corrupt Activities Act, 2004 (Act No 12 of 2004). • The Hawks are currently investigating a number of cases within the Supply Chain Management Unit.

  31. Legal Matters Litigations • 1 settlement agreement was reached on Capital Debt; ICASA has not concluded on the interest due on the debt; • 4 allocations for a trial date is still to be issued; • 1 awaiting withdrawal; and • 1 matter for re-instatement for hearing. • CCC Matters • 11 cases; 1 pending, 2 postponed, 3 settled, 3 warnings issued and 2 for ICASA to review its process.

  32. Predetermined objectives (1) AG’s report: There were no material findings on the annual performance report concerning the usefulness and reliability of the information. Of the total number of 42 targets planned for the year, 28 of the targets were not achieved during the year under review. This represents 67% of total planned targets that were not achieved during the year under review.

  33. Predetermined Objectives(2)

  34. Performance – Achievement (1)

  35. Performance – Achievement (2)

  36. Performance – Achievement (3)

  37. Performance – Achievement (4)

  38. Performance – Achievement (5)

  39. Performance – Achievement (6)

  40. Performance – Not Achieved (1)

  41. Performance – Not Achieved

  42. Performance – Not Achieved

  43. Performance – Not Achieved

  44. Performance – Not Achieved

  45. Performance – Not Achieved

  46. Performance – Not Achieved

  47. Performance – Not Achieved

  48. Performance – Not Achieved

  49. Performance – Not Achieved

  50. Performance – Not Achieved

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