I C A S A 2011-2012 Annual Report
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Transcript of I C A S A 2011-2012 Annual Report
I C A S AI C A S A2011-2012 Annual Report2011-2012 Annual Report
Presented by Dr Stephen Mncube Chairperson, Councillors, CEO and CFO
October 2012Parliamentary Portfolio Committee
on Communications, Cape Town
Presentation OutlinePresentation Outline
Part 1 Chairperson’s Overview
Part 2 Chief Executive Officer’s Overview
Part 3 Chief Financial Officer’s Overview
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Part 1Part 1
Dr Stephen Mncube – Chairperson
1. ICASA Vision, Mission and Values2. ICASA Organogram3. Strategic Output Oriented Goals
(SOOGs)4. Core Programmes5. Predetermined Objectives
Part 1 - ContentPart 1 - Content
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VISIONTo advance the building of a digital society
MISSIONTo ensure that all South Africans have access to a wide range of high quality communication services at affordable prices
Vision and MissionVision and Mission
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NecessityNecessity
ICASA is committed to evidence-based regulation ensuring that regulation is only introduced where there is a
demonstrable need. The Authority furthermore intends to ensure that regulatory compliance does not become a barrier to the development of a sustainable ICT sector by simplifying
or reducing regulation, wherever possible or appropriate
EffectivenessEffectivenessICASA is committed to achieving its identified goals and to deliver on its mandate, taking into account the impact of
such decisions
ProportionalityProportionalityICASA aims to impose obligations in an objective, transparent and proportionate manner, where intervention is necessary
TransparencyTransparencyICASA strives to work within a consistent, fair and certain set of parameters, and to ensure decisions are evidence based and fully reasoned, and that any decision-making process is
open and accessible
AccountabilityAccountabilityICASA is formally accountable to the Parliament of South
Africa and, through the appeals system, to the courts. ICASA remains conscious that it ultimately serves end-users
ConsistencyConsistency ICASA pursues its legal responsibility to ensure consistency in its actions
ValuesValues
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CHIEF EXECUTIVE
OFFICERT DLAMINI
CHIEF EXECUTIVE
OFFICERT DLAMINI
GM: LICENSING & COMPLIANCES TSOTETSI
GM: LICENSING & COMPLIANCES TSOTETSI
GM: MARKETS &
COMPETITIONP GROOTES
GM: MARKETS &
COMPETITIONP GROOTES
GM: ENGINEERING
& TECHNOLOGY
P RUPLAL (ACTING)
GM: ENGINEERING
& TECHNOLOGY
P RUPLAL (ACTING)
GM: CONSUMER AFFAIRS
P MASHANGOANE
GM: CONSUMER AFFAIRS
P MASHANGOANE
OrganogramOrganogram
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CORPORATE SECRETARY
M MATHABATHE
CORPORATE SECRETARY
M MATHABATHE
CHIEF AUDIT EXECUTIVES SEKANO
CHIEF AUDIT EXECUTIVES SEKANO
GM: LEGAL AND CCC
B SEHLAPELO (ACTING)
GM: LEGAL AND CCC
B SEHLAPELO (ACTING)
GM: COMPLIANCE
, RISK & AUDIT
B JOOSTE
GM: COMPLIANCE
, RISK & AUDIT
B JOOSTE
CHIEF FINANCIAL OFFICER
C SIMPSON
CHIEF FINANCIAL OFFICER
C SIMPSON
SM: INFORMATION TECHNOLOGY
R ALGU
SM: INFORMATION TECHNOLOGY
R ALGU
SM: COMMUNICATI
ONS& IR
J MATLOU
SM: COMMUNICATI
ONS& IR
J MATLOU
GM: ADMINISTRATI
ONB NTULI
GM: ADMINISTRATI
ONB NTULI
GM: HUMAN RESOURCES
R MAHLABANA
(ACTING)
GM: HUMAN RESOURCES
R MAHLABANA
(ACTING)
SM: REGIONAL OFFICES
M RAMSEY
SM: REGIONAL OFFICES
M RAMSEY
COUNCILCOUNCIL
CLLR: STUCKECLLR: STUCKE
CLLR: LEBOOACLLR: LEBOOA
CLLR: SOCIKWACLLR: SOCIKWA
CLLR: CURRIECLLR: CURRIE
CLLR: SIBANDACLLR: SIBANDA
CLLR: NDHLOVUCLLR: NDHLOVU
CLLR: BATYICLLR: BATYI
CLLR: MAKHAKHE
CLLR: MAKHAKHE
CHAIRPERSON: DR S MNCUBE
CHAIRPERSON: DR S MNCUBE
SOOG-1: Transformation of the ICT Sector
SOOG-2: Ensure the provision of broadband services
SOOG-3: Optimise the use of the radiofrequency and numbering resource
to support the widest variety of services
SOOG-4: Promote the protection of consumers and accessibility for persons with disabilities
SOOGs (1)SOOGs (1)
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SOOG-5:Promote the development of public, community and commercial broadcasting services in the context of digital migration
SOOG-6:Ensure compliance with legislation and regulation
SOOG-7:Strengthen and modernise ICASA
SOOG-8:Promote Competition
SOOGs (2)SOOGs (2)
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Core Programmes Core Programmes
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Predetermined objectivesPredetermined objectives
Audit findings in auditor’s report:• Of the total number of planned targets, only 32 targets
were achieved during the year under review. This represents 56% of total planned targets that were not achieved during the year under review
• This was due to under spending of the budget relevant to the following divisions which were then reprioritised:Markets and CompetitionEngineering and TechnologyConsumer Affairs
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Part 2Part 2
Themba Dlamini Chief Executive Officer
1. CORE PROGRAMMES PERFORMANCELICENCE AND COMPLIANCEENGINEERING AND TECHNOLOGY MARKETS AND COMPETITION CONSUMER AFFAIRS
2. SUB PROGRAMMES PERFORMANCE (Governance and Administration)Human ResourcesInformation Technology
Part 2 - ContentPart 2 - Content
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Key Achievement Current or envisaged benefit/impact of achievement
Commercial Radio Stations For The Primary and Secondary Markets
Granted 3 licenses for the provision of commercial radio
broadcasting services for Gauteng, Cape Town and Durban
Increase diversity and choice in the broadcasting sector, as well as promotion of competition
Conducted public hearings to determine the feasibility of issuing Medium Wave licences
Explored opportunities to increase competition in thecommercial sound broadcasting market
The Authority has issued an Invitation To Apply for commercial radio broadcasting licences in the
FM frequencies for the geographical markets of the
Eastern Cape, Northern Cape and Free State provinces
In order to introduce competition, diversity of broadcasting content and to introduce more historically disadvantaged
individuals
Licensing & Compliance (1)Licensing & Compliance (1)
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Key Achievement Current or envisaged benefit/impact of achievement
Compliance Reports
Development of Compliance Manual Procedure Regulations
• Effective Monitoring of Compliance by the Licensees• Improved compliance
• Streamlined reporting procedures
Compliance Report on Coverage of 2011 Municipal Elections
• Improved compliance by broadcasters with election coverage regulations
• Fair coverage by broadcasters
Licensing & Compliance (2)Licensing & Compliance (2)
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Key Achievement Current or envisaged benefit/impact of achievement
New Commercial Subscription Broadcasting Services
The Authority licensed one new commercial subscription services,
namely Top TV
Commercial Subscription Broadcasting market is another segment of the broadcasting sector that requires more
competition and liberalisation
The Authority granted and issued radio frequency spectrum licences for purposes of providing Mobile Television to existing licensees,
namely MultiChoice and e-TV
To further stimulate new market entry
The Authority has issued an Invitation To Apply for new subscription television services
To further stimulate new market entry
Licensing & Compliance (3)Licensing & Compliance (3)
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Key Achievement Current or envisaged benefit/impact of achievement
Community Radio Services
Licensed 19 community radio stations
To provide a voice for community development and empowerment
Issued one province with a Community Low Power
Broadcasting Service licence
To increase diversity and choice in the broadcasting sector, as well as promote competition
Issued 12 Community Special Event Broadcasting licences for
the areas/provinces
To allow communities in these areas to experiment with community radio broadcasting services through pilot initiatives during festivals and other events
Licensing & Compliance(5)Licensing & Compliance(5)
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Key Achievement Current or envisaged benefit/impact of achievement
Class Electronic Communications Network And Services
Licensed 64 ECS and 68 ECNS operators
To provide small and emerging entrepreneurs with opportunities of entering the lucrative and expanding
electronic communications market
Licensing & Compliance(6)Licensing & Compliance(6)
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Key Achievement Current or envisaged benefit/impact of achievement
Unreserved Postal Services
Registered 34 Unreserved Postal operators bringing the total of 68
in operation
To open competition among hundreds of operators spread across the country. Provide an opportunity for historically disadvantaged individuals to enter this growing market
Key Achievement Current or envisaged benefit/impact of achievement
Transfers, Amendments, Private Electronic Networks and Electronic Communication Service Licence Exemptions
• 30 individual Electronic Communications Services and Individual Electronic Communications Network Service licence transfers
• 18 PECN Licence exemptions• Two ECS Licence exemptions• One Class Community Sound
Broadcasting Service licence amendment
• One reserved Postal Service licence amendment
• One individual Broadcasting Service licence transfer
• One individual Broadcasting Service licence amendment
To ensure that basic licence terms and conditions remain intact
Licensing & Compliance(7)Licensing & Compliance(7)
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Key Achievement Current or envisaged benefit/impact of achievement
Approved 40 Annual Compliance Reports in terms of compliance with
broadcasting regulations and legislation. This includes SABC public and commercial television and radio
services
Ensure that all licensees comply with licence terms and conditions and the regulations governing the respective
markets on an annual basis
Published the Compliance Procedure Manual Regulations
Approved 15 major ECS and ECNS Annual Compliance Reports in
compliance with General Licence Fees regulations; Code of Conduct
regulations; Code on People with Disabilities
Monitored broadcasting coverage of the 2011 Local Government Elections
Ensure Compliance with the Election broadcasts regulations
Approved the Annual Compliance Report of the South African Post Office
Ensure that South African Post Office comply with licence terms and conditions and the regulations
Licensing & Compliance(8)Licensing & Compliance(8)
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Key Achievement Current or envisaged benefit/impact of achievement
Frequency Spectrum
Broadcasting signal distribution market review discussion paper
and public hearings
A reduction in the charges faced by community licensees
Licensing of Spectrum Efficient use of high demand spectrum
Ensuring the provision of Broadband
New entrants to the market to stimulate competition and increased access to broadband services to rural areas
Engineering & Technology (1)Engineering & Technology (1)
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Key Achievement Current or envisaged benefit/impact of achievement
Frequency Spectrum
Updating of National Band Plan and Frequency Migration Plan in line with ITU-R Final Acts 2012
Greater access to mobile telecommunication spectrum
Desktop research on market -based licensing mechanism completed and preliminary report completed
Greater access to Radio Frequency (RF) spectrum by optimising spectrum usage
Participation in ITU and regional forums dealing with IMT, digital migration and cognitive radio and standardisation forums
Supports DTT migration process by coordinating inputs from regional forums
Engineering & Technology (2)Engineering & Technology (2)
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Key Achievement Current or envisaged benefit/impact of achievement
Radio Spectrum Licence Fees
The Authority commissioned a study to determine the new radio spectrum fees framework, specifically the economic value of the spectrum
The billing for the 2012/13 financial year was successfully completed based on the new radio frequency spectrum regulations
Increase the revenue base for the National fiscus
Engineering & Technology (3)Engineering & Technology (3)
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Key Achievement Current or envisaged benefit/impact of achievement
Licensing Framework For High-demand Frequencies
• The Authority identified the 800MHz and the remaining radio frequency spectrum in the 2 500 to 2 690MHz (2.6GHz) bands as high-demand bands which must be licensed through a competitive licensing process
• The draft industry consultations were completed
Greater access to high demand spectrum
Engineering & Technology (4)Engineering & Technology (4)
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Key Achievement Current or envisaged benefit/impact of achievement
Digital Terrestrial Television Re-planning
• The Authority commenced the development of a comprehensive Digital Terrestrial Television (DTT) Frequency plan
• The Authority commenced a detailed migration implementation strategy
To address the challenges faced by the Authority to roll out DDT using Digital Video Broadcast – T2. The re-planning process is to be undertaken taking cognisance and consideration of the ITU final act of 2007, the ITU’s Radio Regulations edition 2008 and the WRC-12 Final Acts 2012
Engineering & Technology (5)Engineering & Technology (5)
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Key Achievement Current or envisaged benefit/impact of achievement
Formation Of The Joint Spectrum Advisory Group
The Authority has establishes a joint spectrum advisory committee
To advise the Authority on spectrum management matters during the digital migration process
Key Achievement Current or envisaged benefit/impact of achievement
Participation In Regional And International Technical Fora • The Authority participated in
the work of the WRC-12To contribute to the development of the Final Acts and the ITU Radio Regulations
Engineering & Technology (6)Engineering & Technology (6)
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Key Achievement Current or envisaged benefit/impact of achievement
Collaboration With Academic And Research Institutions
The Authority collaborated with academic and research institutions
To improve the administrative, regulatory and technical expertise of frequency management as well as the funding of frequency spectrum research
Key Achievement Current or envisaged benefit/impact of achievement
Radio Communications Frequency Licensing
• The Authority issues about fifty thousand (50 000) or more radio frequency spectrum licences every year to a wide variety of operators
The licences were issued to manage emergency, disaster, safety and security, aeronautical and maritime
Key Achievement Current or envisaged benefit/impact of achievement
Spectrum Licences
47 085 licenses were issues as at 31 March 2012
Promote competition and increase the revenue base
Engineering & Technology (7)Engineering & Technology (7)
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Key Achievement Current or envisaged benefit/impact of achievement
Equipment Type Approved
13209 licenses/certificate approved as at 31 March 2012
Promote compliance
Key Achievement Current or envisaged benefit/impact of achievement
Market and Competition Analysis
The publication of the Local Loop Unbundling (LLU) discussion
document and subsequent public hearings
• The impact/outcome of the public consultation regarding local loop unbundling was a price reduction in access to the
wholesale layer of Telkom’s network on the 1st April 2012 as well as the introduction of a new wholesale access layer product,
Bitstream in November
• The impact of these will a reduction in retail prices and new
• innovative services, resulting in increased take-up
Publication of a discussion document outlining the definition of Broadcasting transmission services for the provision of signal distribution services and the
holding of public hearings
• An average of 33% reduction for community television broadcasters
• An average of 65% reduction for community radio broadcasters
Interconnection and the Facilities Leasing provide the framework to
uphold the open-access provisions of the Electronic Communications Act to promote inter-operable networks and
competition in the electronic communications markets
The Authority noted and received forty-nine (49) interconnection agreements and fourteen (14) facilities leasing agreements
Ten (10) disputes regarding the conclusion of agreements were reported, and their resolution will be carried out in the new financial
year
Markets & Competition (1)Markets & Competition (1)
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Key Achievement Current or envisaged benefit/impact of achievementEconomic, Financial Analysis and Numbering
The Authority approved a 5,7% SAPO general price increase for
implementation in 2012/13
To protect consumers
The Authority revised the existing proposed regulations regarding the
introduction of a new numbering plan and engaged in further public
consultation
Resulting in more licensees becoming eligible to apply for numbers for purposes of providing communication services
A preliminary audit of the numbering resource allocations was conducted
To ensure efficient and effective utilisation of numbering resource by licensed operators in line with the numbering plan
regulationsThe authority initiated the
development of the regulatory financial reporting framework for
wholesale call termination
Establishment of a instrument to be used by established significant market power (SMP) operators
The Authority published the Code of Practice for the implementation of Carrier Pre-Selection (CPS) Phase
1
Promotion customer choice and different pricing options
Markets & Competition (2)Markets & Competition (2)
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Key Achievement Current or envisaged benefit/impact of achievementBroadcasting Policy Development and Research
The Authority published an Issues Paper and engaged in extensive
regional public consultation on the necessity for the review of existing
analogue based regulatory framework for broadcasting
services
The purpose of the Issues Paper was to consult with the public and to identify the effective sequencing of the review
process
The Authority thereafter released revised regulations in March 2012
that incorporate the Ministerial Policy Directive and maps out the
regulatory process for Digital Terrestrial Television Migration
Developing regulations that allocate capacity for broadcasting services to existing and future licensees in the
digital era
The Authority submitted its recommendations to the Minister
of Communications in August 2011 on Ownership And Control
Of Broadcasting Services
The purpose of the review is to analyse the existing ownership and control of commercial broadcasting services with the purpose of determining whether the market can be
further opened up and enhance the participation of historically disadvantaged groups and individuals, including
women and persons with disabilities
Markets & Competition (3)Markets & Competition (3)
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Key Achievement Current or envisaged benefit/impact of achievement
Received and handled 4 553 complaints
Receives and redresses consumer complaints regarding communications services in the field of fixed and mobile
telephony, broadcasting and postal services
Resolved 3 081 complaints and 1 472 are still pending
Receives and redresses consumer complaints regarding communications services in the field of fixed and mobile telephony, broadcasting and postal services
The Authority established a committee for analysing the
Consumer Protection Act (CPA) and the Electronic
Communications Act (ECA) in order to make recommendations
to Council on Application for Exemption
The outcome of the consultation process was that the Authority needs to focus strongly on price, quality of service and billing. The Authority analysed the data gathered and then compiled an Application for Exemption that was forwarded to the Minister of Trade and Industry to exempt the Authority of communications matters whereby it does not have jurisdiction
Consumer Affairs (1)Consumer Affairs (1)
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Key Achievement Current or envisaged benefit/impact of achievement
Public Education and Awareness
Raise their awareness using both print and electronic media,
community radio talk-shows and public presentations in all nine
provinces
Inform communities about accessibility, availability and affordability of communications as fundamental rights
Consumer Affairs (2)Consumer Affairs (2)
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Key Achievement Current or envisaged benefit/impact of achievement
Consumer Outreach Campaign
World Consumer Rights Day Campaigns
The theme of the campaign was “Advance the Building of a Digital Society, Reach out and Bridge the Digital Divide”
•The Authority hosted the campaigns in all nine provinces of South Africa from 15
to 28 March 2012
Consumer Outreach •A total number of one hundred and
nineteen (119) outreach programmes were conducted. These programmes were done through public presentations,
campaigns and radio interviews
To provide a platform for licensees to update communities about their vision on universal service and access to communications services
To provide a platform for the Authority to update communities on the regulation of the ICT sector
To provide an opportunity for consumers to lodge their complaints with the Authority at the campaign
Consumer Affairs (3)Consumer Affairs (3)
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Key Achievement Current or envisaged benefit/impact of achievement
Consumer Outreach Campaign
Publicity Material
The Authority developed and distributed pamphlets on the following:
•Consumer Guide – 30 000 copies. •Postal Customer Care Standards – 30
000 copies. •Reprint of the Code on People with Disabilities in Braille – 3 000 copies
The Authority published Consumer Alerts on roaming charges, data charges, wrongful billing, fraudulent billing and subscription of mobile competition in national papers
Consumer Alerts were published in national newspapers on roaming charges, data charges and billing
To increase consumer awareness
Consumer Affairs (4)Consumer Affairs (4)
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Key Achievement Current or envisaged benefit/impact of achievement
Human Resources
Implemented a cost-to company remuneration system company-wide
To ensure that employees have a variety of flexibility in managing their salary packages, taking into account their individual tax legislative obligations
Settled with organised labour at an 8% salary increase across the board for all employees in the bargaining unit
To enable employees to benchmark their salary packages with their peers in the electronic communications industry
Information Technology
Implemented electronic records and document management
system
To improve efficiency and effectiveness of tracking and accessibility of critical documents
Sub-programmesSub-programmes
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Human Resources (2)Human Resources (2)
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Part 3Part 3
Clarinda Simpson - Chief Financial Officer
1. Report of the Auditor-General2. Statement of Financial Performance3. Statement of Financial Position4. Compliance with Laws & Regulations5. Corrective Action Timelines
Part 3 - ContentPart 3 - Content
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Report of the Auditor-GeneralReport of the Auditor-General
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ISSUE CORRECTIVE ACTION
PROGRESS REPORT
NRF DEBTORS and RELATED NRF CREDITORS Timeline: February 2012- May 2013
The valuation, existence and completeness of the NRF debtors and related NRF creditors could not be confirmed
A Finance Turnaround Plan (FTP) has been developed and was implemented in February 2012. The FTP includes actions to address audit related issues as well as corrective measures to address gaps/shortcomings in Administered Revenue identified internally
To improve the internal control environment the Administered Revenue Management Policy was updated to address the shortcomings identified
Data Integrity issues emanating from the core departments and impacting on the accuracy and completeness of Revenue have been identified and corrective measures to address these shortcomings have been formulated and are expected to be resolved by 31 May 2013
A service provider has been appointed to deal with data related issues in Finance
Report of the Auditor-GeneralReport of the Auditor-General
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ISSUE CORRECTIVE ACTION
PROGRESS REPORT
NRF DEBTORS and RELATED NRF CREDITORS Timeline: February 2012- March 2013
Due to the subjectivity of the General License Fee Regulations,
the audit team was unable to independently recalculate the correct value
paid and owed by the Licensee
The General Licensee Fee Regulations must be amended to provide for calculating the license fee on Turnover generated from licensed activities instead of Gross Profit
The amended regulations have been tabled at Council for approval and will be published for comment during October 2012. The amended regulations providing for licence fees to be calculated on Turnover will be effective 1 April 2013 to ensure the accuracy and completeness of license fees collected for the 13/14 financial year
ISSUE CORRECTIVE ACTION
PROGRESS REPORT
NRF DEBTORS and RELATED NRF CREDITORSTimeline: February 2012 - May 2013
Due to the incomplete submission of financial statements by licensees the audit team was unable to confirm the completeness of Revenue
License & Compliance Division to enforce compliance with regard to submission of annual financial statements by licensees
License & Compliance has commenced with sending letters to the respective licensees requesting the submission of the outstanding audited annual financial statements and a follow up is being made with licensees who have not responded failing which non compliant licensees will be referred to CCC for adjudication.
Report of the Auditor-GeneralReport of the Auditor-General
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Statement of Financial Performance Main Statement of Financial Performance Main AccountAccount
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31 March 2012 31 March 2011
Revenue from non-exchange transactions 315 434 608
291 171 453
Revenue from exchange transactions 4 914 108
5 653 589
Total revenue 320 348 716
296 825 042
Administrative expenses (32 623 339)
(32 149 834)
Staff costs (186 210 004)
(170 958 691)
Audit fees (3 209 444)
(2 937 234)
Other operating expenses (82 585 428)
(86 485 587)
Finance costs (230 856)
(6 261)
Depreciation on owned assets (7 510 829)
(12 200 881)
Amortisation (1 496 995)
(1 193 135)
Total expenses (313 866 895)
(305 931 623)
Deficit for the period 6 481 821
(9 106 581)
Statement of Financial Position Statement of Financial Position Consolidated (1)Consolidated (1)
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31 March 2012
31 March 2011
ASSETS Non-current assets 99 410 074 100 374 277 Property, plant and equipment 87 102 867 89 717 651 Intangible assets 12 307 207 10 656 626 Current assets 847 068 546 947 196 633 Trade and other receivables from exchange transactions 2 549 344
2 311 761
Other receivables from non-exchange transactions -
-
Current portion of operating lease assets 42 251 National Revenue Fund – Administered Assets 792 969 029
898 483 250
Prepayments 5 998 893 5 249 432 Cash and cash equivalents 45 551 280 41 109 939 TOTAL ASSETS 946 478 620 1 047 570 910
Statement of Financial Position Statement of Financial Position Consolidated (2)Consolidated (2)
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Consolidated Statement of Cash FlowsConsolidated Statement of Cash Flows
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31 March 2012 31 March 2011
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts Cash received from DoC 313 378 000 290 923 000 Cash received by Administered
Revenue
986 842 320
771 571 464 Finance income 4 475 697 5 580 968 Payments Cash paid by Administered
Revenue
(985 581 181)
(790 323 084) Cash paid to suppliers (121 872 478) (126 171 662) Cash paid to employees (146 717 879) (137 157 073) Employees tax paid (36 349 610) (33 716 330) Finance costs (230 856) (6 261) Net cash flows from operating activities
13 944 013
(19 298 978)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of plant and equipment (6 592 894) (15 378 185) Purchase of intangible assets (2 909 778) (5 475 670) Proceeds from sale of plant and equipment
-
118 420
Net cash flows from investing activities
(9 502 672)
(20 735 435)
Net (decrease)/ increase in cash and cash equivalents
4 441 341 (40 034 413)
Cash and cash equivalents at the beginning of the period
41 109 939
81 144 352
Cash and cash equivalents at the end of the period
45 551 280
41 109 939
Statement of Comparison of Budget and Statement of Comparison of Budget and Actual AmountsActual Amounts
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31 March
2012
R
31 March
2012
R
31 March
2012
R
Difference
R
Budget
Approved
Budget
Final
Actual
REVENUE
Revenue from non-exchange services 313 378 000
313 378 000
315 434 608
(2 056 608)
Other income from exchange services 6 012 000
4 012 000
4 914 108
(902 108)
Total revenue 319 390 000 317 390 000 320 348 716 (2 958 716) Administrative expenses (29 040 405) (33 374 539) (32 623 339) (751 200) Staff costs (175 349 976) (184 687 546) (186 210 004) 1 522 458 Audit fees (2 400 000) (3 400 000) (3 209 444) (190 556) Other operating expenses (102 390 529) (100 506 675) (82 585 428) (17 921 247) Depreciation (8 641 118) (15 667 565) (7 510 829) (8 156 736) Amortisation (875 032) (1 878 811) (1 496 995) (381 816) Finance costs - - (230 856) 230 856
Total expenses (318 697 060) (339 515 136) (313 866 895) (25 648 241) Surplus/(deficit) 692 940 (22 125 136) 6 481 821 (28 606 957)
Add back: depreciation and amortisation 9 516 150
17 546 376
9 007 824
8 538 552
Surplus/(deficit) before depreciation and amortisation 10 209 090
(4 578 760)
15 489 645
(20 068 405)
Compliance with Laws & Regulations Compliance with Laws & Regulations
Finding Corrective Action
Material misstatements were identified in the financial statements submitted on 31 May 2012
• An internal Finance Department monthly closure timetable and
adequate internal controls i.e. review and monitoring of all finance daily;
monthly and year-end closure steps for completeness and accuracy by the
managers; Financial Manager and CFO have been implemented
• Finance has concluded Service Level Agreements with the core departments relating to information emanating from core departments and impacting the
financial statements. • Skilled staff have been recruited and
are being appointed in the Administered Revenue section
• A service provider has been appointed to deal with finance data-related
issues. • Compliance and enforcement action
being taken against defaulting licensees
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Compliance with Laws & Regulations Compliance with Laws & Regulations
Finding Corrective Action
The accounting officer did not take effective steps to prevent irregular; fruitless and wasteful expenditure
• The supply chain management policy is being updated to comply
with the principles of Treasury Regulations
• Employees found guilty of transgressing the supply chain
management procedures resulting in irregular or fruitless and
wasteful expenditure are being dealt with in terms of the HR
policies
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Corrective Action TimelinesCorrective Action Timelines
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STRATEGY
Includes a preliminary assessment of the following:
1.Addressing the Audit Findings (January 31 2013)2.Financial Systems (31December 2012; 31 March 2014)3.Finance Skills and Requirements ( January 31 2012)4.Licence Fees Regulations (March 31 2013) and5.Enforcing Compliance (May 31 2013)
Financial SystemsFinancial Systems
Area Issues Current Status
Action Plan Date
Financial Systems
Interface of JDE &
Spectrum
LS system being
procured to manage
spectrum and interface with
JDE
Interface to be configured
once contract with service
provider concluded. In the interim
service provider on
board to assist with developing
program to upload
manually on a monthly basis
31 March 2014
31 December
2012
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Corrective Action TimelinesCorrective Action Timelines
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GENERAL LICENCE FEE REGULATIONS
Due to the subjectivity of the Regulation, the audit team was
unable to independently recalculate the correct value owed by the
Licensee
Publish Draft Amendment for Public Comment by 31st October 2012
Publish/Gazette Final Regulation by 28 February 2013
The amendment to calculate license fees on Turnover will address the
qualification on accuracy
Questions ?Questions ?
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Thank you Thank you
DankieDankie
Re a lebohaRe a leboha
Re a lebogaRe a leboga
SiyabongaSiyabonga
InkomuInkomu
Ro livhuwaRo livhuwa
EnkosiEnkosi
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