Portfolio Committee on Telecommunications and Postal Services Presentation to the Portfolio Committee on Telecommunications and Postal Services Committee Chairperson - Honourable Ms. Mmamoloko Kubayi USAASA and USAF Quarter 2 Performance Reports 21 February 2017 “Universal Access and Service to ICT for All”

Vision, Mission & Values To facilitate the rollout of adequate Information and Communication Technology (ICT) infrastructure to enable universal access to under-serviced areas in South Africa. To facilitate ICT service to under-serviced areas and thereby contributing to the reduction of poverty and unemployment in South Africa. To promote and pursue the goal of Universal Access and Services and contribute to the sharing and preservation of information in order to build South Africa’s sustainable knowledge society. Values: Batho Pele – We believe in providing excellent, efficient and effective service to all customers and stakeholders. Integrity – We uphold high standards of trust; condemn bribery and corruption; and uphold honesty and respect in all interactions with stakeholders. Accountability – We foster employee ownership and responsibility in ensuring quality service. Innovation – We support employee creativity in delivering all our services. Transparency – We encourage openness in all our activities. Teamwork – We strive to create a harmonious work environment, where all employees and contributors are respected. Vision: “Universal Access and Service to ICT for All”.

USAASA & USAF Strategic Objectives 2016/17 – 2020/21 Optimise organisational efficiency by 2021 to support the project delivery of the Universal Service and Access Fund Optimise organisational efficiency by 2021 to support the project delivery of the Universal Service and Access Fund Ensure availability of automated and integrated business processes by 2021 to support the project delivery of the Universal Service and Access Fund Ensure availability of responsive IT systems by 2021 to support the project delivery of the Universal Service and Access Fund Provide legally sound services to the Agency by 2021 to support the project delivery of the Universal Service and Access Fund Render an effective financial management function by 2021 to support the project delivery of the Universal Service and Access Fund Promotion of good governance within the Agency by 2021 USAASA established as a centre of excellence for universal access and universal service market information, knowledge and expertise by 2021 Promotion of good stakeholder relations for purposes of enhancing the USAASA & USAF brands by 2021 USAF To provide access to ICT services in 6 identified under-serviced areas by 2021 as part of implementing the South Africa Connect digital development strategic pillar to complete the National Health Insurance Districts. To facilitate the broadband connectivity of educational institutions, primary health care facilities and government institutions by 2021. To fund digital television access equipment for qualifying TV-owning needy households by 2021.

USAASA Q2 Performance Human Resources Performance Outcomes: Achieved targets Work Skills Plan implementation Targets not Achieved Review Learning & Development policy Q2 Progress: Learning & Development Policy was presented to EXCO, approved by REMCO and submitted to Board on 26 October 2016 Monitor and report on HR SLA implementation Q2 Progress: HR SLA was submitted for approval on 26 October 2016. Implementation to commence thereafter Legends Achieved Not Achieved Information Technology Performance Outcomes: Achieved targets Monitor and report on percentage availability of business systems Targets not Achieved ERP System maintenance and support Q2 Progress: A new Go-Live date was set for March 2017 to allow for finalisation of outstanding ERP activities Capacitation of IT Human Resources through recruitment and Training of SAP Critical skills. Q2 Progress: recruitment of SAP Critical skills to be considered as part of OD processes

USAASA Q2 Performance Legal Services Performance Outcomes: Achieved Promote legal compliance by providing written legal opinions and/or advice within 7 working days and drafting contracts with 21 working days from date of receipt of all relevant information Targets not Achieved None Legends Achieved Not Achieved Research Performance Outcomes: Achieved targets None Targets not Achieved Impact assessments in three (3) identified USAF subsidised local municipal areas Q2 Progress: Internal Fieldworkers have been prepared for impact assessment study. Conclusion of the assessments by December 2016

USAASA Q2 Performance Stakeholder Engagement Performance Outcomes: Achieved targets None Targets not Achieved Implementation of the Stakeholder Engagement Strategy and Integrated Communications Policy Q2 Progress: Integrated Communications Policy was submitted for approval by BARC and Board: 26 October 2016 Corporate Governance Performance Outcomes: Achieved targets Monitor and report on organisational compliance with the PFMA and Treasury Regulations Checklist for Public Entities Targets not Achieved None Legends Achieved Not Achieved

USAASA Mitigations: Q2 Performance Unmet Quarter 2 Targets Reasons for deviations Action Plans Review Learning & Development policy Policy was approved by EXCO and REMCO but not submitted for Board approval by end of Q2 Policy submitted to Board for approval on 26 October 2016 Monitor and report on SLA implementation Draft HR SLA not approved by the end of Q2 and implementation thereof could not commence in the same quarter HR SLA was submitted for REMCO and Board for approval: 26 October 2016 ERP System maintenance and support of the implemented modules The ERP system did not go-live as planned on 1st April 2016 A revised project plan was developed to finalise the project by year-end A new Go-Live date was set for March 2017 to allow for finalisation of outstanding project activities

USAASA Mitigations: Q2 Performance Unmet Quarter 2 Targets Reasons for deviations Action Plans Capacitation of IT human resources through training on SAP Critical skills Recruitment processes for SAP Technical Resources not initiated in Quarter 2 Capacitation of IT Human Resources is to be considered as part of the OD processes due to be finalised in Q3 Impact assessments in three (3) identified USAF subsidised local municipal areas Change of strategy: to utilisation of internal resources instead of outsourcing Fieldwork and data collection will be conducted in all six local municipalities by the end of November. Conclusion of the assessments: December 2016 Implementation of the Stakeholder Engagement Strategy and Integrated Communications Policy Integrated Communications Policy was not implemented as it had not been submitted for approval by BARC and Board The Integrated Communications Policy was submitted for BARC and Board approval (26 October 2016) and implementation will commence thereafter

Summary of USAASA 2016/17 Q2 Performance USAASA Performance Outcomes: 4 of the 10 planned Q2 targets were achieved, being 40% of the total planned targets 6 of the 10 planned Q2 targets were not achieved, being 60% of the total planned targets

Summary of USAASA 2016/17 Performance by end of Q3 USAASA Q2 Performance Outcomes 4 of the 10 planned Q2 targets were achieved, being 40% of the total planned targets 6 of the 10 planned Q2 targets were not achieved, being 60% of the total planned targets USAASA Q3 Performance Outcomes 7 of the 10 planned Q3 targets were achieved, being 70% of the total planned targets 3 of the 10 planned Q3 targets were not achieved, being 30% of the total planned targets USAASA Cumulative Performance Outcomes: 24 of the 32 planned targets were achieved, being 75% of the total planned targets 8 of the 32 planned targets were not achieved, being 25% of the total planned targets

USAASA Staff Complement as at the end of Q3 2016/17 USAASA had 56 permanent employees and 4 interns as at the end of the quarter Appointments None Terminations Two resignations, one at executive management level and one at senior management level One retirement at skilled level Consequence Management Non performance – three written warnings at executive management level Insubordination – one suspension at senior management level Breach of internal controls – one suspension/resignation at executive management level and one suspension at qualified professional level

AUDITOR GENERAL implementation action plan

AUDITOR GENERAL implementation action plan

USAASA 2016/17 Quarter 2 Budget Performance - Revenue Description Annual Budget Income (R’000) Budget Q2 Income (R’000) Q2 Income (R‘000) Revenue   Other Income -Interest, levies & tenders - 3 085 Transfers USAASA Operations 69 045 17 261 Total revenue 20 346 Description Annual Budget Income (R’000) Budget YTD Income (R’000) YTD Income (R‘000) Revenue   Other Income -Interest, levies & tenders - 6 116 Transfers USAASA Operations 69 045 34 522 Total revenue 40 638

USAASA 2016/17 Quarter 2 Budget Performance - Expenditure Description Annual Budget (R’000) Q2 Budget (R’000) Q2 Actual Spending (R‘000) Quarter Variances (R‘000) Quarter % Spent Expenditure   Compensation of employees 43 713 10 928 10 189 739 93% Goods and services 24 218 6 054 6 957 -903 115% Depreciation 698 -698 Other Capex 1 114 279 517 -238 185% Total 69 045 17 261 18 361 -1 100 106% USAASA Approved Retention of 2015/16 Unspent funds Description Total Budget (R’000) Q2 Actual Spending (R‘000) Available Budget % Spent BDM Distribution & Logistics 131 189 28 240 102 949 22% Enterprise Resource Planning (ERP) 25 063 0% Total 156 252 128 012 18%

USAASA 2016/17 Quarter 2 - YTD Budget Performance - Expenditure Description Annual Budget (R’000) YTD Budget (R’000) YTD Actual Spending (R‘000) Quarter Variances (R‘000) YTD % Spent Expenditure   Compensation of employees 43 713 21 856 19 609 2 247 88% Goods and services 24 218 11 770 11 037 733 94% Depreciation 1 387 -1 387 Other Capex 1 114 896 656 240 73% Total 69 045 34 522 32 689 -1 833 95% USAASA Approved Retention of 2015/16 Unspent funds Description Total Budget (R’000) YTD Actual Spending (R‘000) Available Budget % Spent BDM Distribution & Logistics 131 189 28 240 102 949 22% Enterprise Resource Planning (ERP) 25 063 0% Total 156 252 128 012 18%

USAASA 2016/17 Quarter 2 Budget Performance - Expenditure

USAF Q2 Performance Report 2016-2017

USAF Q2 Performance Targets not Achieved 100% base stations upgraded for Mhlontlo and King Sabata Dalindyebo local municipalities Q2 Progress: Base station upgrades were not completed Broadband network connectivity maintained in 127 schools, 93 clinics and 38 traditional ICT centres Q2 Progress: Usage to 98 sites out of 258 sites were monitored. 160 sites do not have a remote monitoring access facility and concerned service providers are working on providing it 14 615 Set-Top Boxes (STB’s) & antennas procured and installed for qualifying needy TV-owning households. SKA was area prioritised. Q2 Progress: 9 501 set top boxes & antennas installed for qualifying needy TV-owning households USAF Performance Outcomes: Achieved targets None Targets not Achieved Backhaul upgrades completed for Mhlontlo and King Sabata Dalindyebo local municipalities in the OR Tambo District Q2 Progress: Backhaul upgrades not completed due to delays in obtaining Confirmation letters and Environmental rights applications Legends Achieved Not Achieved

USAF Mitigations: Q2 Performance Unmet Quarter 2 Targets Reasons for deviations Action Plans Backhaul upgrades completed for Mhlontlo and King Sabata Dalindyebo local municipalities in the OR Tambo District Backhaul upgrades not completed due to delays in obtaining Confirmation letters and Environmental rights applications Backhaul upgrades to be completed in Quarter 3 Project to be fast tracked to meet the end of financial year completion 100% base stations upgraded for Mhlontlo and King Sabata Dalindyebo local municipalities Project experienced delays in the awarding of the bid to a licensed operator thus necessitating the procurement process to be concluded in Quarter 3 Procurement process to be concluded in Quarter 3 Base station upgrades to be completed in Quarter 3

USAF Mitigations: Q2 Performance Unmet Quarter 2 Targets Reasons for deviations Action Plans Broadband network connectivity maintained in 127 schools, 93 clinics and 38 traditional ICT centres 160 of the 258 connected sites do not have remote monitoring access facility - Service providers concerned have been engaged by the Agency with a view to secure remote monitoring access facility by the 3rd quarter 14 615 Set-Top Boxes & antennas procured and installed for qualifying needy TV-owning households The focus has been in the SKA area   9 501 set top boxes & antennas installed for qualifying needy TV-owning households during the quarter Continued engagements with Department of Communications (DOC). The project is dependent on increased marketing awareness campaigns by the DOC

Summary of USAF 2016/2017 Q2 Performance USAF Operations Performance Outcomes: 0 of the 4 planned Q2 targets were not achieved. 4 of the 4 planned Q2 targets were not achieved.

Summary of USAF 2016/2017 Performance by end of Q3 USAF Operations Q3 Performance Outcomes: 0 of the 3 planned Q3 targets were not achieved 3 of the 3 planned Q3 targets were not achieved. USAF Operations Q3 Performance Outcomes: 0 of the 4 planned Q2 targets were not achieved. 4 of the 4 planned Q2 targets were not achieved. USAF Operations Cumulative Performance Outcomes: 3 of the 14 planned targets were achieved, being 21% of the total planned targets. 3 targets of the 1st Quarter were achieved in 3rd Quarter. 11 of the 14 planned targets were not achieved, being 79% of the total planned targets

USAF 2016/17 Quarter 2 Budget Performance – Revenue Description Annual Budget Income (R’000) Quarter 2 Budget Income (R’000) Income (R‘000) Revenue   Other Income (Interest) - 25 656 Transfers 644 540 162 577 Total revenue 188 233 Description Annual Budget Income (R’000) YTD Budget Income (R’000) YTD Income (R‘000) Revenue   Other Income (Interest) - 52 248 Transfers 644 540 321 954 Total revenue 162 577 374 202

USAF 2016/17 Quarter 2 Budget Performance - Expenditure Description Annual Budget Quarter 2 Budget (R’000) Actual Q2 Spending (R‘000) Quarter 2 Variances (R‘000) Quarter 2 - % Spent Broadband Infrastructure 32 634 9 600 - 0% STB Subsidies for BDM 589 384 147 346 253 333 -105 987 172% Rapid Deployment & Connectivity 18 776 4 694 2 804 1 890 60% Bank Charges & Audit Fees 996 249 907 -658 364% Project Costs 2 750 688 1 207 -519 175% Total 644 540 162 577 258 251 -95 674 159%

USAF 2016/17 Quarter 2 YTD Budget Performance - Expenditure Description Annual Budget Quarter YTD Budget (R’000) Actual YTD Spending (R‘000) Quarter YTD Variances (R‘000) Quarter YTD - % Spent Broadband Infrastructure 32 634 16 000 - 0% STB Subsidies for BDM 589 384 294 692 445 208 -150 516 151% Rapid Deployment & Connectivity 18 776 9 388 5 391 3 997 57% Bank Charges & Audit Fees 996 498 1 203 -705 242% Project Costs 2 750 1 376 1 443 -67 105% Total 644 540 321 954 453 245 -131 291 141%

USAF 2016/17 Quarter 2 Budget Performance - Expenditure

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