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State Information Technology Agency Amendment Bill [B 24B -2002]

The IT Agency Amendment Bill aims to introduce a new business model to optimize IT services, redefine SITA's duties, establish subsidiaries, and enhance efficiency. Consultation and amendments are highlighted.

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State Information Technology Agency Amendment Bill [B 24B -2002]

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  1. State Information Technology AgencyAmendment Bill[B 24B -2002] September 2002

  2. Content • Main purpose of Bill • new business model • Substantial amendments • Subsidiaries, objects & functions of SITA, Board’s constitution, transfer of staff & assets, rates for service, auditing, exemption, share capital, regulations • Consultation

  3. Main purpose of Bill • incorporate new business model • amend share capital • increase number of Board members

  4. New business model (1) • IT House of Value • security • interoperability • economies of scales • elimination of duplication • Aims of House of Value • lowering costs • increasing productivity • enhancing service delivery

  5. New business model (2) • Establish subsidiaries to realise IT House of Value • Redefine compulsory & optional services of SITA to align it with IT House of Value • Duty on SITA to uphold & enhance IT House of Value in performing functions

  6. Substantial amendments (1):Subsidiaries • Express provision for SITA to • establish subsidiaries, eg e-Services to procure IT goods & services through IT Acquisition Centre (ITAC) • Subsidiary performs such functions as SITA (holding company) may delegate to it • may impose conditions • transfer shares in subsidiaries to 3rd persons • requires Cabinet’s approval for • number of shares to be transferred • persons to whom shares are to be transferred • conditions of transferClause 3: section 3A

  7. Substantial amendments (2):Objects of SITA • Adjust objects of SITA to emphasise its role in using IT to— • promote efficiency of departments & public bodies (ie constitutional institutions, public entities, municipalities & legislatures) • improve service delivery Clause 4: section 6

  8. Substantial amendments (3):Duties & powers of SITA • Services that SITA must & may render are redefined • Certain listed services must, if required, be rendered to national & provincial departments (compulsory services), provision of— • private telecommunication network or value-added network service ito Telecommunications Act (wide area networks) • transversal information systems • data-processing or associated services for transversal information systems Clause 5: section 7(1)(a)

  9. Substantial amendments (4):Duties & powers of SITA • Certain listed services may, if required, be rendered to departments (optional services) • training in IT or IT systems • application software development • maintenance services for IT software/infrastructure • data-processing or associated services for departmentally specific IT applications/systems • management services for IT or IT systems • Public bodies have choice whether to use any of listed services Clause 5: section 7(1)(b)

  10. Substantial amendments (5):Duties & powers of SITA cont • Under current Act SITA must act as procurement agency for IT requirements • unequivocally establish SITA’s role as sole IT goods & services procurement agency for all departments • Departments requiring compulsory service must— • acquire it from SITA or • if SITA can’t provide it, procure it through SITA • Departments requiring optional service may choose to acquire it from SITA or through procurement, ie not obliged to use SITA • Current system of phased-in (full) participation by departments are replaced by more flexible arrangementClause 5: section 7(3) &(4)

  11. Substantial amendments (6):Duties & powers of SITA cont • Departments must conclude business & service level agreements with SITA to regulate compulsory & optional services that it intends to use • Compulsory terms of business agreement to be prescribed by regulation • Existing business & service level agreements to be phased out within 36 months • Department & SITA must conclude new BA & SLA Clause 13: section 20

  12. Substantial amendments (7):Duties & powers of SITA cont • Services used by department in respect of which component initially constituted SITA must continue to use those services (s3(4) of current Act) • unless terminated by agreement between by relevant department & SITA • “component” = Central Computer Services, Infoplan, sub-component Information Systems in Dept of Safety & Security • Assets of these components transferred to SITA (ito current s19(2)) remain SITA’s assets & its return may not be requested Clause 2: section 3(4A)

  13. Substantial amendments (8):Duties & powers of SITA cont • SITA must set standards for— • interoperability of information systems • subject to Minister for Public Service & Administration’s approval • information systems security environment • subject to said Minister & Minister of Intelligence’s approval • SITA must certify all acquisition of IT goods/service for compliance with these standards Clause 5: section 7(6)

  14. Substantial amendments (9):Duties & powers of SITA cont • SITA may— • exclusively sell or provide authentication products or servicesfor all departments • on request, sell or provide such products or services for public body • apply for accreditation of those products/services ito E-Communications & Transactions Act • If not provided by SITA, department must & public body may procure it through SITA from preferred authentication service providers (s28(2) of E-Com & Trans Act) Clause 5: Section 7(6)(c) & (7)

  15. Substantial amendments (10):Duties & powers of SITA cont • SITA may conduct research regarding use of IT to improve efficiency of public administration • In performing functions SITA must- • eliminate unnecessary duplication of IT goods/services • leverage economies of scale to provide cost-effective service • comply with- • government policies on information management & IT • regulations made under SITA Act & Public Service Act • Preferential Procurement Policy Framework Act Clause 5: section 7(6)(d) & (8)

  16. Substantial amendments (11):Constitution of Board • Current Act • maximum of 10 members/directors with not more than 3 executive directors • Aim of proposed amendment is to enable appointment of up to 6 executive directors on board, eg: • SITA MD (Group CEO) • chief operating officer & chief financial officer of SITA (holding company) • CEO of each of 3 subsidiaries Clause 6: section 10

  17. Substantial amendment (12):Constitution of Board cont • Proposed amendment requires— • increasing maximum to 14 to ensure non-executive directors remain majority in line with corporate governance • replacing limitation of 3 executive directors with requirement that majority of directors must be non-executive • maximum of executive directors never more than 6 - eg 6 executive & 8 non-executive • Increase in non-executive directors - assist in ensuring experts in financial management, governance and IT networks, security, interoperability & procurement serve on board

  18. Substantial amendments (13):Constitution of Board cont • Provision made for Minister to appoint alternate member for every non-executive member • Aim: Absence of non-executive members should not prevent Board from continuing with its business • Alternate may attend & vote at Board meetings that member is unable to attend • Serve same term as member in respect of whom he/she is appointed & also vacates office with him/her • Majority of non-executive directors forms quorum

  19. Substantial amendments (14):Transfer of staff & assets • SITA must offer employment to IT practitioner of department associated with compulsory/optional service when department uses SITA for that service Clause 8: section 15(1) • When compulsory services are used, all assets must be transferred to SITA • includes intellectual property rights • When optional services are used, only those assets that both parties agreed to, are transferred to SITA • Transfers exempted from transfer & stamp duty, etc Clause 12: section 16

  20. Substantial amendments (15):Rates for services, auditing & exemption • Minister for Public Service & Administration to determine rates for SITA’s services • after consultation with all Ministers & MECs • with approval of Minister of Finance Clause 9(a): Section 16(1) &(2) • Board may appoint own auditor to audit holding & subsidiary companies, ie no longer Auditor-General Clause 9(e): section 16(9) • To protect Republic’s security, Minister of Intelligence may exempt any intelligence service established by President ito s209(1) of Constitution from any provision of Act Clause 5: section 7(9)

  21. Substantial amendments (16):Share capital • Current Act (s18) stipulates that State must be issued with fully paid-up shares • as stipulated in an agreement • in exchange for assets transferred to SITA valued on method acceptable to State • Requires valuation of assets and then agreement on value and number of shares

  22. Substantial amendment (18):Share capital cont • Provision in current Act inappropriate for both current & proposed role of SITA • Current role • Requires transfer of all IT assets, but assets transferred from time to time, ie as & when departments participate - not once off transfer of assets of all IT assets of all departments • Proposed role • Does not require transfer of all IT assets, but only- • assets related to networks, transversal information systems & data-processing/associated services for such systems (compulsory services) • other IT assets but only if SITA & department agree (optional services) • also not once-off transfer of assets, but only as & when department requires a particular service

  23. Substantial amendment (19):Share capital cont • Now proposing share capital of R1, represented by one share with nominal value of R1 • share capital has no linkage to assets transferred to SITA • State remains sole shareholder of SITA • no provision for transfer of shares in SITA, but only its subsidiaries Clause 10: section 17

  24. Substantial amendments (20):Regulations - clause 15 • Minister for Public Service & Administration empowered to make regulations on— • IT procurement- • after consultation with all Ministers & MECs • subject to Minister of Finance’s approval • requiring participation of client departments in procurement process • requiring support of local economies • regarding exemption from procuring through SITA • compulsory terms of business agreement • additional functions for SITA to achieve objects • information systems security for all departments, with Minister of Intelligence’s approval • procedure to resolve disputes between departments & SITA

  25. Consultation process • Before Cabinet’s approval was sought, comment requested from all national & provincial departments, SITA & GITO Council • Those that submitted comment listed in Memorandum on Objects of Bill (par 5)

  26. SITA Amendment Bill end

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