SITA ANNUAL REPORT - CONCEPT 01

2nd

ELECTRICITY

3rd

COMPUTING

4th 1st

CONNECT STEAM

Annual Report 2019

1st 2nd 3rd 4th

4th Industrail Revolution And Digital Transformation

PAGE 01 SITA ANNUAL REPORT 2019

PART A: GENERAL INFORMATION 00
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1. Public entity’s general information 00
2. List of abbreviations/acronyms 00
3. Statement of responsibility and confirmation 00
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of accuracy of the annual report 00
4. Foreword by the Chairman 00
5. Managing Director’s Overview 00
6. Strategic overview 00
7. Vision 00
8. Mission 00
9. Values
10. Legislative and other mandates 00
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10.1 Presidential Review Committee 00
10.2 State Information Technology Agency Act, 88 of 1998 00
10.3 Constitutional mandates 00
10.3.1 Section 195: Basic values and principles governing 00

public administration 00
10.3.2 Section 217: Procurement 00
11. Organisational Structure
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PART B: PERFORMANCE INFORMATION 00
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1. Auditor-General’s Report: Predetermined Objectives 00
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2. Situational analysis 00
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2.1 Introduction 00
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2.1.1 Electronic government 00
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2.1.2 Cloud computing 00
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2.1.3 Broadband connectivity 00
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2.1.4 ICT security 00
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2.1.5 Industry transformation 00
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2.1.6 Procurement automation 00
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2.1.7 Economies of scale 00
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2.2 Customer Services 00

2.3 Organisational Environment 00
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2.3.1 Key policy developments and legislative changes
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There have been no significant changes in SITA’s legislative 00
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and other mandates during the year under review

2.3.2 Strategic programmes and initiatives
3. Programme Performance Information
3.1 Programme 1: Service delivery
3.2 Programme 2: Infrastructure
3.3 Programme 3: Procurement
3.4 Programme 4: Financial sustainability
3.5 Programme 5: Organisation, governance and administration
4. Performance Links to Financial Resources
4.1 Summary of revenue collection
4.2
4.3 Summary expenditure by programme
Capital investment, maintenance and asset management plan

PART C: GOVERNANCE

1. Introduction
2. Portfolio Committees

2.1 Composition of the Parliamentary Portfolio Committee
2.2 Portfolio Committee on Telecommunication and Postal

Services Engagements with SITA

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3. Executive Authority PAGE 02

4. Accounting Authority 00
4.1 The SITA Board of Directors 00
4.2 The role of the Board
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4.3 Board charter 00
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4.4 Composition of the Board 00
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4.5 Board and Board committees 00
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4.6 Remuneration of Board members 00
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4.7 Board Profiles 00
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5. Internal control 00
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6. Compliance with Laws 00
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7. Risk Management 00
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8. Fraud and Corruption 00
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9. Minimising Conflict of Interests 00
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10. Code of Conduct 00
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11. Occupational Health and Safety 00
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11.1 Establishment of SHE committees 00
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11.2 Health and safety legal appointments 00
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11.3 Legal Compliance with Health and Safety 00
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12. Company Secretary 00
13. Social Responsibility 00
14. he Broad-Based Black Economic Empowerment 00
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15. Audit, Risk and Compliance Committee Report 00
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15.1 Introduction 00
15.2 Terms of reference of the Audit, Risk and Compliance Committee 00
15.3 Audit, Risk and Compliance Committee responsibility 00
15.4 The quality of financial information provided 00
15.5 The effectiveness of internal control 00
15.6 Internal Financial Control 00
15.7 The effectiveness of Internal Audit
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15.8 Risk Management 00
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15.9 Compliance with legal and regulatory provisions 00

15.10 Evaluation of the financial statements 00
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16. Social and Ethics Committee report 00
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16.1 Introduction 00
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16.2 Composition 00
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16.3 Terms of reference 00
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The SEC operates within an approved framework set out in the 00
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Social and Ethics Committee Terms of Reference
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16.4 Role of the Social and Ethics Committee

16.5 Discharge of responsibilities

16.6 Codes and policies

16.7 Ethics governance structures

16.8 Institutionalising and reporting

16.9 Conclusion

PART D: HUMAN CAPITAL MANAGEMENT

1. Introduction

2. Talent Development
Employee Satisfaction Survey
3. SITA Employee Wellness
4.
Proactive wellness programme
4.1
4.2 Employee wellness day
4.3 Heritage day
4.4 Women’s month programme
Human Capital Management Oversight Statistics
5. Employment Equity Statistics for Occupational Level
5.1

5.2 Personnel Cost

5.3 Staff Turnover

5.4 Training Cost

5.5 Employee and Labour Relations

5.5.1 Disciplinary Matters

5.5.2 Loss Control

PART E: FINANCIAL INFORMATION

1. Certificate by Company Secretary

4th Industrail Revolution And Digital Transformation

PAGE 01 SITA ANNUAL REPORT 2019

PAPRartT AA:

GENERAL
INFORMATION

4th Industrail Revolution And Digital Transformation

PAGE 02PUBLIC ENTITY’S GENERAL IINnFfOoRrMmAaTItiOoNn

REGISTERED NAME
State Information Technology
Agency (SITA) SOC Ltd
REGISTRATION NUMBER
1999/001899/30
PHYSICAL ADDRESS
459 Tsitsa Street
Erasmuskloof, Pretoria
0048, South Africa
POSTAL ADDRESS
PO Box 26100
Monument Park
0105, South Africa
TELEPHONE NUMBER
+27 12 482 3000
FAX NUMBER
+27 12 367 5151
EMAIL ADDRESS
[email protected]
WEBSITE ADDRESS
www.sita.co.za
EXTERNAL AUDITORS
Auditor-General of South Africa
BANKERS
Standard Bank of South Africa
PO Box 6232, Marshalltown
Gauteng, 2107
COMPANY SECRETARY
Ms Shirley Kgope

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PAGE 03 SITA ANNUAL REPORT 2019

2. LIST OF
ABBREVIATIONS/
ACRONYMS

Abbreviations/ ABIS Automated Biometric Identification System
AFS Annual Financial Statements
AG Auditor-General of South Africa
APP Annual Performance Plan
ARCC Audit, Risk and Compliance Committee
BBBEE Broad-based black economic empowerment
CAPEX Capital Expenditure
CAS Crime Administration System
CEO Chief Executive Officer
CSIR Council for Scientific and Industrial Research
DBE Department of Basic Education
DOD Department of Defence
DHA Department of Home Affairs
DCDT Department of Communication and Digital Technologies
DPSA Department of Public Service and Administration
EE Employment Equity
Exco Executive Committee
FDA Forensic Data Analysis
GETC General Education and Training Certificate
HANIS Home Affairs National Identification System
HCM Human Capital Management
ICT Information and communications technology
IFMS Integrated Financial Management System
MIOS Minimum Interoperability Standards
MLP Management Letter Points
MTSF Medium-Term Strategic Framework
NATED National Accredited Technical Education Diploma
NC(V) National Certificates (Vocational)
NDP National Development Plan
NT National Treasury
PFMA Public Finance Management Act
PRC Presidential Review Committee
SAPS South African Police Services
SAMHS South African Military Health Services
SANDF South African National Defence Force
SCM Supply Chain Management
SCOPA Standing Committee on Public Accounts
SITA State Information Technology Agency SOC Ltd
SLA Service Level Agreement
SMME Small, Medium and Micro Enterprise
SOC State-Owned Company
SOE State-Owned Entity
WCG Western Cape Government
WSP Workplace Skills Plan

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PAGE 04

3. STATEMENT OF RESPONSIBILITY
AND CONFIRMATION OF ACCURACY
OF THE ANNUAL REPORT

We, the undersigned do hereby confirm that:

• The information and amounts disclosed in the annual report are
consistent with The Annual Financial Statement (AFS) audited by the

• Auditor-General;
• The annual report is complete, accurate and free from any omissions;

the annual report has been prepared in accordance with the guidelines
• on annual reports as issued by National Treasury;

the AFS (Part E) has been prepared in accordance with the Generally
• Recognised Accounting Practice standards applicable to public

entities;
the Accounting Authority of the entity is responsible for both the
preparation of the AFS and for the judgements made based on the
information contained in the AFS;
• The Accounting Authority is responsible for establishing and
implementing a system of internal control, which has been designed to
provide reasonable assurance as to the integrity and reliability of the
performance information, the human resources information and the
AFS;
• The external auditors are engaged to express an independent opinion
on the AFS; and
• In our opinion, the annual report fairly reflects the operations, the
performance information, the human resources information and the
financial affairs of the public entity for the financial year ended 31 March
2019.

MR ZD NOMVETE
Chairman of the Board of Directors

State Information Technology Agency SOC Ltd

MR N TSHENYE
Acting Managing Director (CEO)

State Information Technology Agency SOC Ltd

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PAGE 05 SITA ANNUAL REPORT 2019

4. FOREWORD information systems and related services for the
BY THE benefit and convenience of the citizens.
CHAIRMAN
Among others, the recommendations of the
With the Fourth Industrial Revolution (4IR) upon Presidential Review Committee which shaped
us, we were as an organization and a country in the SITA transformation journey included
an advantageous position to engage with and redefining clear roles, responsibilities and
preside over the disruptions associated with coordination for the IT in the public sector,
these massive changes. ensuring the compatibility of systems and
architecture, eliminating wastages of resources
On the policy front there were positive and promoting IT knowledge and skills in the
indications that the government and the country public sector and the nation at large and making
were bracing for the envisaged impact brought ICT responsive to business processes of
by rapidly unfolding technological changes. government.
Announcements on the institutional
rearrangements including the consolidation of More than 20 years later, as the Agency looked
the Information Communication Technology back to reflect on the progress made, as well as
sector, the establishment of the Presidential focus on the future technological vista brought
Advisory Review Commission on the Fourth by the advent of the fourth industrial revolution,
Industrial Revolution and other policy changes there was both a general contentment on the
to mobilize the country for the digital society milestones attained, and an acknowledgement
underpinned by the knowledge economy, were of the challenges that were still lying ahead.
instrumental in the tone and early hallmarks of
the Presidency of Mr. Cyril Ramaphosa. In the past year the Agency has been hard at
work to reorganize itself to embed the new
The President’s vision on the role and impact of business model. At the heart of the new
the ICT was summed in both his successive business development plan was the
State of the Nation Addresses (SONA) in 2018 organization of SITA into a value-adding
and 2019 respectively, unequivocally consulting machinery that will have a line of
committing his administration to the technology sight over the business requirements of the
revolution in fulfilment of the ideals laid in the clients and be able to offer tailor-made business
National Development Plan. solutions and thus fulfilling the aspiration of
“making ICT responsive to business processes
The clarion calls contained in the SONA of government.”
coincided with SITA’s digital transformation
journey that the Agency had embarked upon. Executive, senior and other core technical roles
were replenished, to build the requisite
It has been 21 years since the report of the strategic and technical capacity to drive
Presidential Review Committee (PRC) which organizational redesign and ready the Agency,
became the genesis for a centralized the government and the country for the realities
information and technology systems agency for of the fourth industrial revolution, expected to
government and that led to the birth of the State be the main disruptor to the world of work,
Information Technology Agency (SITA). hence the President’s assertion for the creation
of the “workforce of the future.”
In that period, the journey has been one of
transformation, to take the Agency from its Reskilling and upskilling will define the human
primordial beginnings and make it a significant capital management agenda of the Agency in
player and thought leader in the adaptation and the next Medium Term Strategic Framework as
adoption of ICT to improve service delivery to the country anticipates the advent of the sixth
the public through the provision of ICT, administration, working with the government
stakeholders and the civil society to create the
national skills pipeline for the core and critical
competencies as part of the talent
management.

4th Industrail Revolution And Digital Transformation

As a socially responsible organization, SITA has PAGE 06
finalized the establishment of the National
School of Software Engineering with Free State International Telecommunications Union event
province as a pilot host. This marked the in the continent, showcasing the country’s
commencement of a strategic initiative with the readiness to leapfrog into the digital society.
government to augment the basic education The creation of a digital society as envisaged in
school curriculum and introduce digital skills to the National ICT Policy White Paper under
the learners at the secondary level, thus Digital Inclusion as one of the key pillars, SITA as
contributing to the quality of basic education as an organ of state was required to comply with
one of government outcomes. the Amended Information and Communications
Technology (ICT) Sector Codes of Good
The outcomes of the School were inextricably Business Practice as gazetted on 7th November
linked to SITA developmental policies to give 2016 to use ICT and its related investments to
cadets a clear growth path which will ensure support development, transformation and
their employability, increase their academic growth.
prospects and empower them economically as
skilled small ICT enterprises and suppliers. This Targeted preferential procurement among
helped lay the basis for the workforce of the others was used by SITA to drive industry and
future.The re-capacitation of the ethics function societal transformation, allowing SITA to
during the period under review was a stern advance procurement from certain groups for
reminder that the Agency will stop at nothing to the benefit and impact of the designated
promote good corporate governance and sectors. Economic empowerment of the
legislative compliance amongst all the disabled, rural communities, SMME, women and
stakeholders – internally and externally. youth development were earmarked for
SITA has demonstrated repeatedly in its growth. Training support will continue to be
dealings with the parliamentary oversight given to the SMMEs in collaboration with the
bodies that corruption in all its forms will be OEMs to intensify their capacity for growth.
exposed, investigated and decisively dealt with. Given the strategic nature of these technology
Perpetrators will be named, shamed and projects, there was large capital outlay in the
prosecuted albeit to recover state losses. period under review for the acquisition of the
Central to the recommendations of the PRC was technology, adversely affecting some of the key
the technological imperative to digitally corporate financial targets.
transform the government, the public service
and the society at large. Part of the ongoing Still on technology, the Universal access to the
SITA organized public engagements with the internet services remained key to the realization
ICT industry focused on the digital of the goals of a digital society as envisaged in
transformation through innovative and cutting the National Development Plan. And the
edge technology. Agency as part of the SA Connect – a
government broadband roll-out programme -
To mitigate against the poor state resource continued to collaborate with the Broadband
management particularly in the hosting Infraco, another state entity, to lay both the
environment caused by unnecessary infrastructure and the services required as per
duplications and other systems the norms and standards of the programme,
incompatibilities, SITA for the period under connecting and targeting government sites
review broke the ground and acquired the first which offer essential public services such as
ever government private cloud hosting health, education and safety & security as
technology to manage the government data identified under the first phase of the
efficiently, in a coordinated manner with programme.
inherent security capabilities.
In places like Musina which is under the
This ground breaking technological decision Vhembe District Municipality in Limpopo,
was executed in the year that SITA joined with communities that have been positively affected
government to plan for and host the first ever by the SA Connect, were expressing gratitude
and beginning to mull over the economic
4th Industrail Revolution And Digital Transformation spin-offs such as the possible development of
their area into a Special Economic Zone.

PAGE 07 SITA ANNUAL REPORT 2019

Internally SITA has for the period under review Importantly the appointment of the Presidential
seen a surge in the development of the Advisory Review Commission on the 4IR was a
e-Services, another demonstration of the welcome relief. On behalf of Team SITA we
impact of what can be achieved by the once again congratulate all the Commissioners
combination of the right skills with and the Agency looks forward to cooperating
commensurate technology to improve service with and making meaningful contributions in all
delivery. the Commission’s deliberations.

Interventions to promote innovative practices As expected 2018/19 proved to be another
such as the community ‘hackathons’ and tough year for the Agency. The strain was felt
continuous creation of a learning organisation both in governance, management and
internally will continue apace, because behind operations of the organization. As we continue
every technology and systems revolutions, the task of implementing the principles of the
there are people with needs for development new business model and embedding the new
and self-actualization. micro-structure, we believe and are committed
to unlock and unleash service delivery. SITA
The successful combination of both our human through ICT must be in the forefront of
resources and technical ability was development and growth.
demonstrated once again given the role the
Agency played during the finalization of the I would like to thank the former Chief Executive
country’s national matric results for the class of Officer, Dr. Setumo Mohapi, the current Acting
2018. CEO Mr. Ntutule Tshenye and his Executive
The appointment of Ms. Stella Committee, the management team and all the
Ndabeni-Abrahams and Ms. Pinky Kekana as employees for their diligence and integrity in
the Minister and Deputy Minister of executing all the work. Our partners in
Communications and Digital Technologies government and the industry remained key in
respectively in the latter part of 2018 and the providing our raison d’être as a business and we
consolidation of the portfolio imbued the ICT thank them and value their confidence in our
sector with vigour and energy and once more service offering. We promise to even do better
reinforced the President’s and government’s in the coming years as a reliable and
commitment to the digital transformation of the dependable partner
state and to expedite service delivery to the
citizens by harnessing technology. To my fellow Board members, my sincere
appreciation for your support and persistence
On behalf of the Board, the Executive, the for the governance insight, leadership, and
management and employees at SITA our oversight over the Agency. Even though
congratulations are in order to both the Minister sometimes or most of the time, it felt that the
and the Deputy Minister and as SITA we are gradient was steeper than our step, we stuck
committed to tap into their wisdom, guidance together, managed to hold hands, and tried to
and passion in support of delivering on our made it work. Thank you for your dedication to a
mandate, growing and prosperous nation empowered by
information and communications technology.
Equally, on behalf of the SITAzens we would
like to thank our previous Minister, Dr. MR Z D NOMVETE
Siyabonga Cwele and wish him well. Chairman of the Board of Directors
Our sincere gratitude will be incomplete without
mentioning the leadership and guidance of the State Information Technology Agency SOC Ltd
parliament through all the structures that
interacted with the Agency in the course of the
financial year under review. Working together
and holding us accountable was an imperative
to growing South Africa and improving service
delivery.

4th Industrail Revolution And Digital Transformation

PAGE 08

Z.D.Nomvete Mr Z D Nomvete
Chairman of the
Board of Directors

State Information
Technology Agency
SOC Ltd

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PAGE 019 SITA ANNUAL REPORT 2019

Part B

4th Industrail Revolution And Digital Transformation

PAGE 0210

PPARartTBB:
PERFORMANCE INFORMATION

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PAGE 0111 SITA ANNUAL REPORT 2019

1. AUDITOR- 2. SITUATIONAL
GENERAL’S ANALYSIS
REPORT:
PREDETERMINED
OBJECTIVES

<This section will be populated upon conclusion 2.1 INTRODUCTION
of the audit process>

Situational Since its inception, SITA has been committed to
Analysis leveraging Information Technology (IT) as a
strategic resource for government, managing
the IT procurement and delivery process to
ensure that the government gets value for
money and use IT effectively to support the
delivery of eGovernment services to all citizens.

SITA views ICT as a national socio-economic
game changer, through which ICT investment
must be equated with growth, impact and
citizen satisfaction. The Agency’s value
proposition ensures that it drives the progress of
a connected government that it supports
government with secure and well maintained IT
infrastructure, and that its outputs and
outcomes are measured through quantifiable
public service delivery interventions. The year
under review was the last year of the
implementation of SITA 2014-2019 strategic
plan which intended to transform the internal
operations to offer value added innovative
service offerings to address the long standing
customer service delivery challenges and
improve the provision of government services
to the citizens.

SITA found itself in an unpredictable

macro-economic environment amidst

heightened focus on the Fourth Industrial

Revolution (4IR), where there is increasing

demand from citizens for digital service

offerings, access to government services and

heightened interest to participate in

government decision processes. In addition,

SITA was expected to deliver services within the

context of government cost containment

initiatives, the impending SOC rationalisation

and persistent systemic and institutional

challenges.

4th Industrail Revolution And Digital Transformation

PAGE 0122

Minister of Communications, SITA therefore aligned its business operations
Telecommunications and Postal Services was to support the aforementioned government
appointed by President Cyril Ramaphosa as the imperatives aiming to embed 4IR into delivering
coordinator of government’s 4IR programme. In IT solutions through its comprehensive service
this capacity she commands the achievement offering to government that enables service
of 4IR objectives which will ensure that people delivery with the following key strategic
are at the heart of all 4IR discussions and that priorities taking centre stage, namely;
through technology people’s living standards
are improved, better and more efficient services
are delivered to meet their needs, people are
enabled to reach their human potential and that
citizens are empowered to embrace
opportunities while minimizing its negative side
effects.

VALUE-ADDED Lorem ipsum dolor sit amet, consectetuer
PROCUREMENT adipiscing elit, sed diam nonummy euismod

CORE IT Lorem ipsum dolor sit amet, consectetuer
SERVICES adipiscing elit, sed diam nonummy euismod

ELECTRONIC Lorem ipsum dolor sit amet, consectetuer
GOVERNMENT adipiscing elit, sed diam nonummy euismod

CYBER Lorem ipsum dolor sit amet, consectetuer
SECURITY adipiscing elit, sed diam nonummy euismod

HEALTHY Lorem ipsum dolor sit amet, consectetuer
ORGANISATIONS adipiscing elit, sed diam nonummy euismod

BUSINESS Lorem ipsum dolor sit amet, consectetuer
ENABLER adipiscing elit, sed diam nonummy euismod

4th Industrail Revolution And Digital Transformation

PAGE 13 SITA ANNUAL REPORT 2019

3. PROGRAMME 1: Service
SERVICE Delivery
DELIVERY
the provision of SITA’s IT infrastructure services
The purpose of this programme is to provide in order to increase availability, flexibility,
high quality IT services to enable government to scalability, predictability and security.
deliver efficient and convenient services to
citizens through the use of ICT and to optimise

Strategic Performance Actual Planned Actual Deviation from Reasons for
Objective Indicator achievement target achievement planned target variance
2017/18 2018/19 2018/19 2018/19
C1: Enhance M4: No. of Additional services
efficiency of e-government 23 e-services 50 e-services Achieved 5 were developed to
government services deployed deployed 55 e-services meet identified clients’
business deployed deployed which needs.
processes have deployment
certificates

C2: Improve M5: Level of Attained Attain information Achieved None No variance.
security of maturity of ICT information security maturity SITA attained -80%
government data security security maturity Level security maturity The survey was not
assets level 2 3 as per ISF level 3 as per ISF concluded due to the
security security controls cost containment
C3: Transform M6: Customer 51% controls model for model for 11 challenges.
SITA into satisfaction level 11 discipline areas areas.
customer-centric MTTR and MTTR were
organisation M7: 80% customer Not achieved missed due to power
% performance satisfaction level 0% outage and backlog in
against August 2018. Although
measured 98% performance Not achieved -1.62% improvement initiatives
contracted against measured 96.38% were implemented,
SLA metrics 96.56% contracted SLA there was
metrics under-performance for
some metrics.
C4: Achieve M8: % increase in 10% increase in Achieved 3.3%
growth in government government 13.3% increase in This being a cumulative
government market share 10.7% market share on government target, the impact of Q2
market share designated market share on and Q3 performance
services (increase designated impacted the final YTD
on 2017/18 target) services (increase performance.
on 2017/18
target) Agency sales related to
the provision and
support of contracted
services/SLAs
transacted through
framework agreements
and other contracts
also been included.

4th Industrail Revolution And Digital Transformation

PAGE 14

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4th Industrail Revolution And Digital Transformation

2nd Erasmuskloof
(Head Office)
ELECTRICITY
T +27 12 482 3000
4th F +27 367 5151
W http://www.sita.co.za
CONNECT Postal Address
PO Box 26100
Monument Park
Pretoria
0105
Physical Address
459 Tsitsa Street
Erasmuskloof
Pretoria
0048

3rd

COMPUTING

1st

STEAM

4th Industrail Revolution And Digital Transformation