1. ON THE SOUTH AFRICAN BROADCASTING CORPORATION
PRESENTATION    
ON THE SOUTH AFRICAN BROADCASTING CORPORATION
17 March 2015 
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Republic of South Africa

2. PRESENTATION OUTLINE MINISTER’S OVERSIGHT ROLE SABC BOARD OF DIRECTORS
AMENDMENT OF MOI
SABC AUDIT MATTER
KEY CHALLENGES
INTERVENTIONS
CONCLUSION
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Republic of South Africa

3. Minister’s Oversight Role
The Minister derives her oversight role in terms of inter alia the following legal instruments:-
The Constitution of the Republic of South Africa Act No. 108 of 1996
Broadcasting Act No. 4 of 1999
Companies Act No. 71 of 2008
SABC Memorandum of Incorporation
Board Charter
Shareholder
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Republic of South Africa

4. Minister’s Oversight Role
Ministers Interaction with SABC Board
The Minister is the shareholder representative, representing the State as the Shareholder in the SABC.
The Minister relationship with the SABC Board is governed by the provisions of the Companies Act, Shareholders Compact, Board Charter, and the MOI
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Republic of South Africa

5. Minister’s Oversight Role (Continues)
Executive Directors Appointments
The Minister confirmed the appointments of the Chief Operating Officer and Chief Financial Officer who are also Executive Directors of the SABC Board.
Note (The court application by the DA in respect of Chief Operating Officer’s positions is pending before the High Court of South Africa – Western Cape High Court, Minister is bound by the sub judice rule and therefore can not make pronouncement on this matter.
The appointment of the Group Chief Executive Officer is pending and the decision will be made in due course.
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Republic of South Africa

6. SABC Board of Directors
The SABC Board of Directors is currently resolving some of the problems which were experienced by the the previous Boards, resolving Auditor General's queries or disclaimers, improving the ethical standard of Board Members and focusing on improving governance and stable leadership at the corporation.
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Republic of South Africa

7. SABC Board of Directors (continues)
Minister’s powers as a shareholder representative in terms of the Companies Act No. 71 of 2008, Section 71(1) (Minister had written letters to certain Board Members to explain their alleged misconduct pursuant to the provision of section 71 (1) of the Companies Act
The Minister is also entitled in terms of the MoI, Shareholder compact and the Board Charter to intervene in resolving SABC Board Members alleged misconduct.
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Republic of South Africa

8. Amendment of the MoI
 The Minister has amended the MoI in terms of section 16 (1) (ii) of the Companies Act , the MoI is a document, as amended from time to time, that sets out rights, duties and responsibilities of shareholders, directors and others within and in relation to a company, and other matters as contemplated in section 15
The MoI is a shareholders’ document and therefore the shareholder is entitled in terms of section 16 (1) (ii) to amend during the shareholders meeting if it deems it necessary.
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Republic of South Africa

9. Amendment of the MoI
The Minister had amended the MoI to empower the Management Team of the SABC to appoint and to discipline staff.
The amendments also corrected the grammatical errors which appeared on the original MoI

10. SABC Audit Matters SABC received a qualified audit opinion
Areas inadequately controlled
TV licences fee revenue and related receivables
Property plant and equipment
Deferred tax, tax payable and income tax
Other payables
Deferred government grant
Mobile income
IFRS Disclosures
Irregular, fruitless and wasteful expenditure
Findings on predetermined objectives in the Corporate Plan

11. Key Challenges
Skills challenges and vacancies in the finance functions
Inadequate & sometimes out-dated policies and procedures in key areas
Inadequate monitoring of key control activities
Anomalies in the reporting architecture that affected adequate oversight over key activities
Inadequate assessment of tax risks
Limited accounting systems applications reviews
Inadequate corporate planning & reporting capabilities

12. Interventions
Skills-Targeted recruitment of scarce skills and engagement of consulting firms
PSP will address
Preparation of financial statements
Trade receivables
Review of procurement process and revise SCM policies
Conduct research on TV license revenue models, benchmark with other entities like Water Trading Entity (Department of Water & Sanitation) & UIF
Dedicate a resource on the findings on Performance Report
Revise the process to detect irregular, fruitless and wasteful expenditure

13. CONCLUSION
The Ministry is open to Parliamentary suggestions to move South Africa forward .
I THANK YOU