Honourable Chairperson and Members.
Context of the Media Development And Diversity Agency mandate and its role in society

Media diversity in any country is regarded as a measure of the depth of its democracy. Every citizen should have access to a range of media.

To deepen media diversity, Government partnered with commercial print and broadcast media entities to assist the Media Development and Diversity Agency (MDDA), which is tasked with providing financial and non-financial support to community and small commercial media projects throughout the country.

The objective of the MDDA is to ensure that all citizens can access information in a language of their choice and to transform media access, ownership and control patterns in South Africa.

This is done in order to redress exclusion and marginalisation of disadvantaged communities and persons from access to the media and the media industry to promote media development and diversity by providing support primarily to community and small commercial media project.

We do this because the media has a critical role to play in aiding good governance, transparency and accountability.  Hence, a pluralistic and free media sector, is needed to ensure that all voices in society are heard.

Without a wide array of information, people’s opinions and views would be limited and their impressions and conclusions of the world around them stunted.

Honourable Chairperson and Members,

As the Ministry of Communications, we applaud the MDDA for its continued efforts in the advocacy and campaign to make the media literacy a priority on its agenda as well as accelerating media literacy efforts. 

The Media Literacy and Culture of Reading Summit is an event which MDDA implements annually which features a number of young people in our schools. The aim of the summit is to introduce a culture of reading and basic media literacy amongst learners in schools, to promote debate and dialogue on media for learners and to encourage them to be media aware and be involved in producing their own media.

The media literacy efforts are in line with the United Nations Literacy Decade (UNLD) that took place in New York in February 2003 which highlighted the importance of media literacy.

Funding Challenges

Chairperson

There is a tremendous demand for MDDA support, which in turn requires an increase in funding. To this end, the Agency has reported to this Committee that it receives more than R 150 million worth of applications, which suggests that without increased funding, the Agency will fail to support initiatives aimed at giving effect to both the MDDA Act and section 16 of the Constitution.

It must also be emphasised that the MDDA support is needed on an ongoing basis especially in rural areas and also in areas where there is not much of economic activities taking place.

Most of the communities served by MDDA, their  projects have few economic prospects, with high unemployment, and are beset by problems such as lack of access to basic services, and access to media which could serve as a platform to raise awareness around these issue

The point is that whilst community media are not profit-making enterprises, they are not for bankruptcy either!  The fact is that, we need advertising revenues to flourish in these community media projects, however, we also know communities in the country where there is no advertising revenues to be generated and such challenges poses a major risk to the financial self-sustainability of these projects.

In addition, community media are themselves in­creasingly seen as small enterprises with a responsibility to survive and sustain high quality community service. Therefore training in business and newsroom management to support the financial operations, and other forms should continue to be provided by the MDDA to ailing projects in order to sustain the sector. Therefore government has to urgently review the funding model of the Agency.

In the interim, however, as the Ministry, we welcome the finalisation of the MoU between the MDDA and Small Enterprise Development Agency (SEDA) to roll out an enterprise development programme across the country,

Funding Shortage and call for legislative Gaps, and the need TO level the playing field in the sector

Honourable Chairperson and Members,

The funding agreements with broadcasting service licensees are aligned to the ICASA regulation and each broadcast licensee contributes 0.2% of their annual turnover of licensed activities.  The funding from the mainstream commercial print media on the other hand, is not regulated which to us, amounts to a gentlemen’s agreement.

For the year under review, there is no funding from this sector at all and in turn this impact negatively on funding for community print media. Engagement with the sector is ongoing to find a lasting solution.

Reviewing the of MDDA mandate

Honourable Chairperson and Members,

With the Agency now in operation for over a decade, an Impact Assessment Study has been commissioned to reflect and evaluate the extent to which the MDDA is responding to its mandate, the impact of MDDA funded projects and identifying and sharing best practices. The Agency will share the findings of the study with Members, once the research has been completed at the end of the 2016/17 financial year.

On key Performance Targets and challenges durind the 2015/16 financial year

Honourable Chairperson and Members,

Governance matters

The terms of office of some Board members came to an end in 2015/2016, As such I would like to thank those members who left the Board during the year for their contributions.

Achievements of Planned Targets

• The Agency achieved 71% of its performance indicators for the 2015/2016 financial year; this translates into 96 of the 135 performance indicators being achieved, which a positive outcome is given the challenging environment.
• The emphasis was on projects, publishing and broadcasting in indigenous languages, which brings disadvantaged communities into the information and communications sector
• For the 2015/2016 financial year, 26 community broadcasters were funded. Of these, 13 were start-up projects and 13 were for strengthening
•  In the Community Broadcast, 13 of the funded projects are based in rural areas as opposed to the 5 which are  urban based,
• Of the 24 print and digital media projects funded, 10 were start-ups and 14 were strengthened. Thirteen projects were based in rural communities and 5 were in urban communities.
• The community TV station has also grown into a resilient industry. The MDDA has supported four stations, of which one is still being supported. Similarly, the community and small commercial print sector has grown significantly in recent years with South Africa now boasting more than 200 small publishers, a large proportion of which are publishing in an indigenous language.
• As part of capacity building, a number of initiatives were implemented including the awarding of bursaries to community radio stations to enrol at the Wits Radio Academy.
• There was partnership between the MDDA and Southern African Agency for Science and Technology Advancement (SAASTA), to support and train the community media in engaging with and reporting to communities on science, technology and related matters using indigenous languages.
• We acknowledge the role of community media during the 2016 local government elections. Despite the shoe-string budget, the community media was able to provide coverage of the 2016 Local Government elections which also provided meaningful participation to our people in communities through these local platforms.

Overall performance: Programme 2: Grant funding and non-financial support

The roll-over funds from the 2014/15 financial year approved by National Treasury enabled the MDDA to support more projects, hence some targets have been exceeded. In some instances, partnership forged with SAASTA resulted in more budget being available.

Advertising Revenue skewed to community broadcasting and intervention required

Government has increased its advertising spend on community media from 22 million in 2012/13 financial year to R 36 million in the 2015/16 financial year, we are concerned that the bulk of this budget goes to community broadcast. We have instructed the MDDA and GCIS to correct this abnormal situation.\

Honourable Chairperson and Members,

Major challenges encountered during the 2015/16 financial year planned targets

Staff Complement

During the 2015/16 financial year, the total staff compliment for the MDDA was sixteen (16) .Of the 32 approved positions to be filled, the vacancy rate was at 50%.

The MDDA’s organogram was reviewed to be aligned with its new strategy, this led to the decision not to fill all vacant and funded positions. This led to sixteen (16) employees serving in all projects which are spread across the country.

The staff complement negatively affected the achievements of major service delivery areas especially in relation to compliance with laws and regulations which are key in ensuring good governance. This was also raised by the Auditor General of South Africa

Other human resources challenges

Due to staff turn-over in the Human Resources Unit, MDDA did not submit the Annual Skills Report as well as the Workplace Skills Plan to the Department of Labour in contravention of the associated laws

• The HR in-capacity also affected other areas namely, number of personnel enrolled for the leadership Development Programme, the employee relations strategy was not developed, and the internship programme was also not in place.
• Job evaluations to grade new and identified jobs was also not conducted.

Honourable Chairperson and Members,

Compliance with laws and regulations

The MDDA failed to comply with laws and regulations and this is evidenced by the failure to submit the EMP 2011 UIF payments due to the absence of Acting CFO due to ill-health.

There was no adherence to Supply Chain Management Policy, PPPFA, PFMA and Treasury Regulations, this is because for the most part of the financial year, critical positions in Finance and Supply Chain were not filled, and therefore standard procedures were not followed. The positions have been subsequently filed.

The number of procurement plans were not submitted to National Treasury and at Board level the planned meetings did not take place as planed as the MDDA did not have an IT advisory committee chairperson to identify gaps in the IT environment. This has subsequently been addressed with the appointment of the Chairperson.

Additional information

Honourable Chairperson and Members,

The Agency has always received an unqualified audit outcome (clean audits for more than 4 consecutive years) with very limited findings and the current financial year is no exception. However, the following issues were never really performed to the satisfaction of the AGSA.

The following contains the summarised version which formed the basis for the unqualified audit outcome

Annual Financial statements

The financial statements submitted for auditing were not prepared in accordance with the prescribed financial reporting framework and as required by section 55(1) (b) of the PFMA.

Strategic planning and performance management

Procedures for quarterly reporting to the Department of Communications and the facilitation of effective performance monitoring, evaluation and corrective action were not established as required by Treasury regulation 30.2.1.

Procurement and Contract Management

• Goods and services with a transaction value below R500 000 were procured without obtaining the required price quotations, as required by Treasury Regulation 16A6.1.
• Deviations were approved by the Accounting Officer even though it was not impractical to invite competitive bids, in contravention of Treasury regulation 16A6.4.
• Goods and services of a transaction value above R500 000 were procured without inviting competitive bids, as required by Treasury Regulations 16A6.1. Deviations were approved by the Accounting Officer even though it was not impractical to invite competitive bids, in contravention of Treasury regulation 16A6.4.
• The preference point system was not applied in all procurement of goods and services above R30 000 as required by section 2(a) of the Preferential Procurement Policy Framework Act and Treasury Regulations 16A6.3(b).

Expenditure Management

• Effective steps were not taken to prevent irregular expenditure, amounting to R5 324 585 as disclosed in note 34 of the Annual Financial Statements, as required by section 38(1) (c) (ii) of the PFMA and Treasury Regulation 9.1.1.
• Effective steps were not taken to prevent fruitless and wasteful expenditure, amounting to R1 156 000 as disclosed in note 33 of the AFS, as required by section 38(1) (c) (ii) of the PFMA and Treasury Regulation 9.1.1.

Internal Controls

Leadership -The Accounting Officer did not have sufficient monitoring controls in place to ensure compliance with the relevant laws and regulations.

Financial and performance management

Senior management did not adequately monitor compliance with laws and regulations.