FPB Annual Report 2015/2016

1. FPB Annual Report 2015/2016

2. Contents • Mandate • Vision , Mission and Values • Organizational Achievements • High Visibility, High Impact Strategy • FPB Trends • Use of Consultants • Cost Saving Measures • Statement of Financial Performance • Revenue 2015/2016 • Expenditure 2015/2016 • Audit Report and Finding Categories • Industrial Relations Issues • Performance Information 2015/2016

3. FPB Mandate FPB mandate is derived from the Film and Publications Act, (Act 65 of 1996 as amended in 2004 and 2009). FPB is mandated to regulate the: • creation, • production and • distribution of films, games and certain publications.

4. FPB Vision, Mission and Values

5. Organizational Achievements 2015/2016 • FPB received an unqualified Audit Report – in respect of both Financial and Performance Audits. • The AG has commented on the overall improvement in organizational performance at the FPB. • 86% of FPB’s annual performance plan targets were met. Where targets were not met this was due to financial considerations and subsequent reprioritization of plans. • Successful completion of the On-Line Policy consultation process (including presentations to iweek Conference, Highway Africa and other industry platforms), culminating in the policy being ready for gazetting.

6. High Visibility, High Impact Strategy • High visibility / high impact communications and public awareness program included the following: • Minister’s Imbizo’s • Representation in GCIS Forums • Safer Internet Day Commemoration (Back-to-School Program) in Eastern Cape and Gauteng and other outreach initiatives such as Rand Show. • Adverts placed on seven SABC Radio Stations in seven languages for Safer Internet Day • Collaboration with Justice Cluster on Child Protection matters. • Presence at key industry events, for example Durban International Film Festival, Loeries Awards, Feathers, rAge Expo, Sexpo etc. • Effective expansion of the FPB footprint, with emphasis on the SADC regional program and interaction with other African Countries (Ghana and Kenya). • Successful hosting of the inaugural African Media Classification and Online Child Protection Conference – October 2015.

7. Employment Equity – Workforce Profile

8. FPB Trends

9. Consultants

10. Cost saving Several cost saving initiatives were done during the financial year resulting in an overall operational expenditure increase of only 1.5%, which is well below expected inflationary increases.

11. Statement of Financial Performance

12. Revenue 2015/16 • R5.3m was generated from regulation fees as compared to R6.5m in the previous financial year. The decrease of 18% is due to the reduction in the number of registrations and physical submissions for classification of material. • Other income at R853k consist mainly of investment income and tender fees • Overall income received for the year ended 31 March 2016, was R88.5m as compared to R87.1m received in the previous financial year resulting in an overall increase of only 1.6%. • The reduction of the accounting surplus from R5m to R3.4m is due to more appropriate planning and forecasting. • The 2015/16 year surplus was retained and utilized to pay outstanding balances and for the Online Content Regulation Project. • 100% of the grant allocated was indeed spent during the 2015/16 year.

13. Expenditure 2015/16 • Staff costs of R45.1m were incurred for the current year. This total includes Classifiers’ fees of R4.3m paid during the financial year. • Operational expenditure of R37.9m increased by only 1.6% compared to the previous year due to cost saving measures implemented such as: - Reduction of consultancy fees by 43% compared to the previous year - 70% reduction of advertising expenditure - New vehicle leases entered into.

14. Audit Report • Opinion: Unqualified • Emphasis of Matter: Restatement of corresponding figures • Material Non Compliance: - Effective steps to prevent irregular, fruitless and wasteful expenditure not taken

15. Audit Report • The FPB had no material adjustments to the AFS or Performance Information • The FPB identified, disclosed and has implemented consequence management for all irregular, fruitless and wasteful expenditure disclosed in the AFS Note • Although the AGSA has not identified any additional irregular transactions for disclosure, and that the amounts identified by management were quantitatively immaterial, the AGSA still insist that the transgressions are qualitatively material due to previously raised irregular expenditure reoccurring. • The above assessment by the AGSA resulted in the modified audit report

16. Finding Categories 2014/15

17. Finding Categories 2015/16

18. Audit Progress made 2015/16 Progress made on the following categories: • Expenditure and payables (0 findings) • Property, plant and equipment (0 findings) • Disclosures (Reduced from 4 to 2 findings) • SCM (Reduced from 8 to 1 finding) • Performance information (Reduced from 3 to 1 finding) • Compliance and controls (0 findings) Regression in the following categories: • ICT (Increase from 3 to 5 findings) Overall a reduction in the number of findings from 33 to 14

19. Audit Progress made 2015/16 • 88% of previous unresolved findings were successfully cleared during the 2015/16 year • The AGSA reported an improvement in internal controls as per the Management Report • Proper accounting of revenue transactions and ICT general controls were flagged as areas of concern Irregular, fruitless and wasteful expenditure • Management is satisfied with the controls implemented over SCM processes and procedures. As a result of this control management reduced this from R9.1m in 2014/15 year to R487k in the current year.

20. Industrial Relations Issues – Q1

21. Industrial Relations Issues

22. Industrial Relations Issues

25. SO1: Effective and visible monitoring of films games and certain publications throughout the entire value chain (content creators, producers and distributors of fpgs) to protect children and inform the general public

26. SO1: Effective and visible monitoring of films games and certain publications throughout the entire value chain (content creators, producers and distributors of fpgs) to protect children and inform the general public

27. SO1: Effective and visible monitoring of films games and certain publications throughout the entire value chain (content creators, producers and distributors of fpgs) to protect children and inform the general public

28. SO2: Consumers, general members of the public and industry informed about the mandate of the FPB

29. SO2: Consumers, general members of the public and industry informed about the mandate of the FPB

30. SO2: Consumers, general members of the public and industry informed about the mandate of the FPB

31. SO 3: Effective and efficient management of FPB Operations

32. SO 3: Effective and efficient management of FPB Operations

33. SO 3: Effective and efficient management of FPB Operations

34. SO 3: Effective and efficient management of FPB Operations

35. SO 3: Effective and efficient management of FPB Operations

36. SO 3: Effective and efficient management of FPB Operations

37. SO 3: Effective and efficient management of FPB Operations

38. SO 3: Effective and efficient management of FPB Operations

39. SO 3: Effective and efficient management of FPB Operations

40. SO 4: Ensure effective and innovative regulation of content distributed online, mobile and related platforms to protect children and inform the general public

41. SO 4: Ensure effective and innovative regulation of content distributed online, mobile and related platforms to protect children and inform the general public

42. SO5: '- Expand our footprint as the FPB through partnership and stakeholder relationships in pursuance of our mandate

43. SO5: '- Expand our footprint as the FPB through partnership and stakeholder relationships in pursuance of our mandate

44. Conclusion • Request the Portfolio Committee on Communications to note that the annual report was tabled by the Ministry of Communications on the 9th of September 2016. • Thank you.