GCIS briefing on action plan to address the findings of the Auditor-General; Short-listing of candidates to be interviewed for vacancies of the boards of the SABC & MDDA; Outstanding Reports

Meeting report

Briefing by the Government Communication and Information System (GCIS) on the action plan to address the findings of the Auditor-General
Mr Jimmy Manyi, Chief Executive Officer, GCIS presented the briefing to the Committee (see attached document).

The Auditor-General had made adverse findings in the categories of procurement and contract management, expenditure management and revenue management.  The briefing covered descriptions of the findings, recommendations, the corrective action plans and the target dates for implementation.

The briefing was concluded with the outcomes of an interim assessment performed by the Auditor-General on 7 October 2011.  The assessment indicated that the performance of the GCIS was satisfactory and that corrective intervention was not required in the areas of leadership, financial and performance management and governance.

Discussion
Ms J Killian (COPE) welcomed the specific feedback that was provided and the positive outcomes of the assessment of the Auditor-General.  She recalled that the finding concerning external remunerative work by employees applied to lower-level staff.  She asked how many staff at the top four levels and at the lower levels had contravened the code of ethics.  She asked what percentage of total employees had performed outside work for remuneration without the necessary permission.

Ms R Moratoa (ANC) observed that Mr Manyi was confident that the action plan would be implemented.  She was concerned that the interim assessment indicated that a number of leadership criteria were still in progress.  She asked what action was being taken to ensure that the performance of the GCIS in the area of leadership was improved.

Mr C Kekana (ANC) asked what GCIS did to inform other government departments of good governance practices.

Mr N Van den Berg (DA) asked if the corrective action concerning procurement and contract management was only applicable to transactions with a value greater than R500,000 and if the same controls were applied to smaller contracts.  He had observed that the Department of Communications (DOC) and GCIS had neglected their subordinate entities.  He wanted to know what action was taken to provide assistance to subordinate entities with unsatisfactory performance records.

Mr Manyi advised that the Media Development and Diversity Agency, which reported to the GCIS, had received a clean audit report from the Auditor-General and was under good management.  The control measures applied to all procurement contracts, regardless of the value of the contract.  The code of ethics previously applied to the top management level but had been extended to apply to employees at the lower levels as well.  Fewer than ten out of 600 employees had applied for permission to accept external remunerative work.  Only two applications were received from employees at the management level.  The overall percentage of total staff involved in outside work was negligible.  The GCIS published a magazine for the public sector, which included a forum where issues of good governance was discussed.  The findings of the Auditor-General concerning leadership were related to vague performance indicators that were not measurable.  The environment in which the GCIS operated was not conducive to setting measurable objectives but progress was being made in devising ‘smart’ targets.  The assessment indicator depicting work in progress was not necessarily a negative outcome.

The Chairperson said that the Committee followed up on the findings of the Auditor-General.  The Committee awaited the corrective action plan of the DOC.  He suggested that the GCIS ensured that the principles of good governance were communicated to State-owned entities.

Consideration of the short-list of candidates for the Board of the Media Development and Diversity Agency (MDDA)
The Chairperson advised that the Committee had appointed a task team to consider applications for the two vacant positions on the MDDA Board and to compile a short-list of ten candidates for interview.  The vacancies were advertised and 36 applications were received.  One application was withdrawn.  Interviews would commence on Wednesday, 9 November 2011.

The task team recommended that the following applicants were placed on the short-list of candidates for interview:

Mr Denis Lille
Mr Lionel Adendorf
Prof Benjamin Khoali
Mr Phenyo Nonqane
Dr Bheki Shongwe
Mr Adam Haupt
Ms Rene Alicia Smith
Mr Mxolisi Mvimbi
Adv Sifiso Malunga
Mr Zola Fihlani (who subsequently withdrew).

Mr Van den Berg proposed that the Committee approved the short-list of the nine remaining candidates.  There was no need to select a tenth candidate.

Mr K Zondi (IFP) supported Mr Van den Berg’s suggestion.

Ms Killian pointed out that the Committee did not have a quorum and could not make a decision.

The Chairperson decided to postpone the adoption of the Committee’s resolution to a later stage in the proceedings when a quorum of Members was present.

Consideration of the short-list of candidates for the Board of the South African Broadcasting Corporation (SABC)
The Chairperson advised that 52 applications were received for the single vacancy on the SABC Board.  Interviews of the short-listed candidates would commence on Thursday, 10 November 2011.  The task team suggested that the following candidates were placed on the short-list for interview:

Ms Nthabiseng Petunia Samba
Mr Denis Lille
Mr Kenneth Herold
Prof Sadhasivan Perumal
Mr Lionel Adendorf
Mr Thami Ka Plaatjies.

Mr Van den Berg recalled that the Committee had interviewed Messrs Herold and Perumal on previous occasions.  He suggested that the Committee approved the short-list of candidates.

Ms Killian noted that none of the candidates proposed by COPE were short-listed.  She regretted that few female candidates were short-listed as there was a need to address the gender imbalance on the Boards.

The Chairperson noted that an eighth Member of the Committee had joined the proceedings and that a quorum of Members was present.  He read the report of the Committee on the recommendation of a person to be appointed to the SABC Board.

Ms Moratoa moved for the acceptance of the report.  The motion was seconded by Mr Zondi.

The Chairperson read the report of the Committee on the recommendation of a person to be appointed to the MDDA Board.

Mr Van den Berg moved for the acceptance of the report.  The motion was seconded by Ms A Ndlazi (ANC).

Adoption of Committee reports on oversight visits to the Northern Cape, Free State and SABC Sea Point studios
The Chairperson invited input from the Committee on the draft oversight reports.  Members made no comment on the report on the oversight visits to the Northern Cape and Free State provinces and the report was adopted, without amendment.

Mr Zondi pointed out that staff at the SABC’s Sea Point, Cape Town studios had complained over the lack of communication on the problems faced by the public broadcaster by the Auckland Park, Johannesburg head office.  The report omitted mention of the concerns that had been raised.

The Chairperson agreed to insert the item in the Committee’s report.  The report was adopted, with amendments.

Other Committee business
The Chairperson advised that the South African Post Office Bill (SAPO Bill) had been referred back to the Committee by the National Council of provinces (NCOP).  The NCOP had proposed amendments to the Bill, which were circulated to the Members of the Committee.  The SAPO Bill was a Section 75 Bill.  He had consulted with the Parliamentary Law Advisers on the proposals of the NCOP and awaited their advice.  The Committee was scheduled to meet on 16 November 2011 to discuss the matter.

Ms Moratoa was surprised that the Bill had been referred back to the Committee.  The Committee had gone to a great deal of trouble to ensure that the Bill was properly crafted.

The Chairperson advised that the matter concerning Cape Mail had been referred to the Committee by the Speaker for attention.  182 staff members of Cape Mail had lodged a complaint against SAPO with Parliament.  He had contacted SAPO and Cape Mail to inform the parties that the issue would be dealt with by the Committee and suggested that Cape Mail appointed five representatives to represent the employees.  He had met with the Cape Mail representatives during the previous week to brief them on the process that would be followed by the Committee.  The Committee would appoint a task team of five or six Members to deal with the matter.  The Committee’s schedule for the remainder of the year did not allow for a meeting before early 2012.

Ms Moratoa pointed out that more than five Members would need to be on the task team to ensure that all the political parties were proportionately represented.

Mr Zondi agreed to serve on the task team, subject to the approval of the IFP leadership.

The Chairperson explained that he was merely providing feedback to the Committee and that the task team had not yet been appointed.

Progress report of the Media Development and Diversity Agency (MDDA) on the implementation of Committee recommendations for the advertising industry
Ms Nebo Legoabe, Member of the MDDA Board extended the apologies of the Chairperson of the Board and introduced the delegates from the MDDA to the Committee.

Mr Lumko Mtimde, Chief Executive Officer, MDDA and Mr Nkopane Maphiri, Programme Director, MDDA presented the progress report on the implementation of the recommendations concerning the transformation of the advertising industry to the Committee (see attached document).  The MDDA had previously briefed the Committee on the issue on 14 June 2011.

The briefing included the background to the issue of transformation of the advertising industry; an overview of the research that had been undertaken by the MDDA; the outcomes of Parliamentary hearings and oversight visits; the progress that had been made in implementing Parliamentary recommendations; the results of an analysis of revenue spend on advertising and a summary of the challenges.  Details were provided of the proposed technological solution of a central on-line booking system.  The on-line booking system was provisionally approved by the MDDA Board, subject to the finalisation of a sustainable business model.  A levy would be charged on all advertising revenue traded on the booking platform to fund the development and maintenance of the system.

The briefing was concluded with the conclusions that had been drawn and a summary of the planned activities for the near future.

Discussion
Mr Zondi referred to the summary of the challenges on slide 18 of the presentation document.  He asked for more information on the organisations found to be non-compliant.  He asked if the proposed on-line booking system allowed advertisers to choose where advertisements would be placed or if the decision would be made by GCIS.

Ms Killian asked for more information on the proposed booking system levy (see slide 26 in the presentation document).  She asked if the revenue generated would be transferred to the National Treasury and what controls would be in place to ensure that the funds were properly managed.

Mr Van den Berg was doubtful that the plan to spread government advertising spending to community media and other small media companies was workable.  He understood that the MDDA would be monitoring the output of community media entities.  It would be difficult to monitor all the output of community media organisations and care should be taken that the sector was not over-controlled.

Mr Kekana said that the Committee had learned during oversight visits that community media organisations got advertising through brokers.  The companies had complained that the brokers retained 80% of income generated from the advertisement, leaving little benefit for the advertisers to use community media for advertising.  There was a need to regulate advertising brokers and curb the charging of excessive brokering fees.

Ms S Tsebe (ANC) referred to the conclusion reached from the research that was conducted that a marketing procurement agency should be established (see slide 6 in the presentation document).  She asked what the funding model of such an agency would be.  She suggested that the progress report included target dates for the conclusion of various engagements with other stakeholders.  She asked when the MDDA Board would approve the on-line booking system.  Members of rural communities had complained that they did not have the opportunity to serve on the boards of community media organisations.

Mr Mtimde replied that the issue of compliance had recently been the subject for discussion at a business breakfast event arranged by the MDDA.  Non-compliance was found to be a problem across the board but was more prevalent in smaller organisations and in the community media sector.  The interventions by the MDDA included making a toolkit available and demanding proof that an advertisement had been placed.  The interventions were starting to show positive results.  The MDDA was currently working on the business model for the on-line booking system.  The Agency was allowed to generate revenue in accordance with the MDDA Act.  More detailed information could be made available to the Committee in 2012.  The MDDA was aware of the complaints concerning advertising brokers and had requested additional information from the complainants.  A challenge was that the information in reports submitted to the MDDA was not always accurate.  The on-line booking platform would track progress and generate accurate data.  The advertising sector should be able to account how effectively government spending on advertising had been utilised, which was one of the areas examined by the Auditor-General.  He agreed that rural communities should benefit more from government advertising spending and be in a position to see the advertisements in community media publications.  The communication strategy needed to take the diverse nature of South African communities into account and recognise that there was no such thing as a national newspaper.

Mr Maphiri explained that the on-line booking system allowed for targeted communication reach, for example only certain parts of KwaZulu Natal province was affected by malaria and only those communities in the affected areas required communication on the disease.  The issue of advertising broking fees was being considered during the process of determining which business models were successful.  The MDDA engaged with the provincial authorities by means of participation in communication forums.  Sentech carried the signals for community radio stations and was involved in the discussions on the monitoring of community radio broadcasts.  The MDDA had held discussions with the Independent Communications Authority of South Africa (ICASA) on monitoring and had received input from the South African Music Rights Organisation (SAMRO).  The MDDA did not control the content of community radio broadcasts and monitoring was limited to obtain data for evaluation and reporting purposes.

Ms Legoabe advised that the MDDA had developed a strategy to encourage the advertising industry and government entities to utilise the on-line booking system.

Progress report of the Association for Communication and Advertising (ACA) on the implementation of Committee recommendations for the advertising industry
Mr Nkwenkwe Nkomo, Member of the ACA Board presented the briefing to the Committee (see attached document).  The briefing was intended to augment the MDDA presentation.

The ACA was originally established as the Association of Advertising Agencies (AAA).  The ACA worked closely with the MDDA and worked towards aligning the stakeholders in Marketing Advertising and Communication South Africa (MACSA).  The ACA participated in a task team with MACSA and the MDDA.  The ACA was involved in designing a community media module, which would be piloted at the AAA School of Advertising.  The module would be extended to other communication and marketing training facilities.  The Board of ACA would meet on 22 November 2011 to consider the proposals.

The briefing included details of the value added by MACSA to the advertising industry.  MACSA was in the process of applying for registration as a Section 9 entity and was assisted by the Department of Trade and Industry (DTI) and GCIS.  The process was expected to be finalised during 2012.

Discussion
Ms Tsebe asked for clarity on the re-naming of the AAA to ACA.  It was not clear what the mandate of the ACA was.

Mr Kekana asked that the acronyms used in presentations were explained.  Members found the excessive use of acronyms in presentations confusing.

Mr Van den Berg asked for clarity on the relationship between the ACA and the MDDA.  He gathered that the two organisations were working together and it would appear that good work was being done but it was not clear whether effort was duplicated and which organisation took the lead.

Ms Killian gained the impression that the relationship between the two organisations was good.  It was rare for the private sector to participate in government initiatives and to promote government policies.  She asked for clarity on the role played by ACA.  She noted that MACSA provided internships and wondered what the relationship was with the National Electronic Media Institute of South Africa (NEMISA).  She asked if Mr Nkomo was confident that the ASA Board would accept the proposals and that the members of the Association and their clients would approve the involvement of the ACA.

Ms Moratoa felt that the presentation document did not include sufficient detail.  She perceived that some progress was being made but asked that future briefing documents provided more information.  The community media module being prepared for the AAA School of Advertising would be useful to empower media students.

Mr Nkomo apologised for the use of unexplained acronyms in the presentation.  He explained the history of the AAA, which was originally established in the 1940’s, and how the organisation evolved into the present ACA.  The name of the AAA School of Advertising had remained unchanged.  The School had campuses in Cape Town and in Johannesburg.  51% of the 400 students were black.  The School was managed by the ACA.  The new community media module would be piloted at the School before it was made available at other media training institutions.  The ACA Board understood the expectations of the Committee concerning the transformation of the advertising industry.

Mr Wayne Naidoo, Chairperson of the ACA Board explained that the mandate of the ACA was to promote the value offered by advertising agencies.  The MDDA was an affiliate of the ACA.  The ACA had engaged with the MDDA on the issue of transformation of the industry.  Members of the ACA were open to the concept but it was premature to expect the members to provide funding.  Member organisations had to be convinced of the benefits that could be offered by the MDDA.

Mr Nkomo said that the ACA and MDDA were members of MACSA.  Media organisations were necessary to carry advertisements.  The development of the media industry was critical for ACA and the Association had decided to work closely with the MDDA.  The ACA perceived the GCIS as the leader.  Parliament had instructed the GCIS to address the issue of the transformation of the advertising industry.  There was good cooperation between the ACA and NEMISA.  The ACA had no objection to working closely with NEMISA on skills development programmes.

The Chairperson asked if the matter concerning Print Media South Africa (PMSA) had been resolved.

Mr Nkomo explained that marketers used the research data provided by the Advertising Standards Authority of South Africa (ASASA) and the South African Advertising Research Foundation (SAARF) and paid a levy to fund these organisations.  PMSA had refused to continue to pay the levy as most complaints dealt with by ASASA were directed at radio and television broadcasting media, rather than at the print media sector.  PMSA’s stance was causing conflict in the industry, which was being addressed by MACSA.

Mr Mtimde said that the MDDA had signed the MACSA Charter.  The MDDA was arranging a round table discussion for all the MACSA stakeholders.  The outcome of the discussion would provide more clarity on the issue.

Mr Van den Berg suggested that the Committee invited advertising agencies operating in the private sector to brief the Committee on the impact of the transformation initiatives.  The advertising environment was complex and it was not easy to sell advertising.

Mr Nkomo welcomed Mr Van den Berg’s suggestion.  ACA would find such a briefing to be useful as there were few buyers of advertising products in the market.

The Chairperson said that the provincial authorities had disputed the effectiveness of SAARF.  The Committee would like to invite SAARF to present a briefing on its operations.

Ms Odette Van der Haar, Chief Executive Officer, ACA understood that media companies were required to pay a levy of 1% of total advertising revenue to fund research and self-regulation.  SAARF did not have sufficient funds to conduct all the research that was required, which had resulted in disparities and disputes.

The Chairperson observed that there appeared to be a basis for the complaints concerning SAARF.  It was necessary for the Committee to understand the entire advertising value chain and what the role was of each stakeholder.  The optimum time for a briefing to the Committee would be early in 2012, before the strategic plans of the various government entities were finalised.  The work of the Committee covered diverse sectors in the field of communication and it was necessary for Members to be well-informed.  The work of the ACA and MDDA was ongoing and the Committee expected the next quarterly progress report early in 2012.  He suggested that the GCIS appointed a dedicated person to assist MACSA to finalise the application for registration as a Section 9 entity.  The on-line booking system was a key component and he asked when the system would be ready for implementation.  He urged Members to question Parliament’s failure to use community media for advertising purposes.  He asked the MDDA to include information on the progress made in spreading government advertising spending to community media organisations in its 2012 first quarter report to the Committee.  The Committee would arrange a joint briefing by the MDDA and the advertising industry in 2012.

Ms Legoabe advised that the on-line booking system was discussed at the previous meeting of the MDDA Board.  The project would proceed as soon as the Board had approved the business model.  The Board was aware of the urgency of the matter.

Mr Ntimde said that the next meeting of the MDDA Board was scheduled for January 2012.

The Chairperson thanked the delegates for the briefing to the Committee.

The meeting was adjourned.