Hunting for a CFO for the Independent Communications Authority of SA (ICASA) is an important part of the plan to solve the regulator's financial challenges, communications minister Dina Pule said.
In response to a question at the National Assembly, Pule said the process of headhunting for a CFO will be completed before the end of the financial year.
The minister was asked what steps she intends to take to solve the governance and financial management challenges faced by ICASA, without jeopardising its role as independent regulator.
“The regulator has a government structure and committees in place. That is the Council, Audit and Risk Committee, the Remuneration Committee, and the Information and Technology Review Committee,” said Pule.
She added that she recently met with ICASA's council and executive management and took a decision that an action plan must be developed to respond to the auditor-general's (AG) concerns.
The AG stressed that ICASA's finances must be reworked and enhanced to ensure compliance.
The minister said part of this strategy will include a process of headhunting a CFO before the end of the financial year, as well as ensuring all officials responsible for managing the finances of ICASA are urgently capacitated to execute their responsibilities diligently.
“Furthermore to this intervention, I will be closely monitoring the performance of ICASA through regular bilateral meetings to determine and assess if the regulator is satisfactorily implementing the recommended interventions.”
Challenged regulator
ICASA received another qualified audit opinion from the AG in October, after incurring R5 million in irregular expenditure, because it did not follow correct procurement processes.
The regulator's financials were also qualified because the AG could not verify the correctness of the amounts due for licence fees, or what was payable to National Treasury.
ICASA collects licence fees from operators, which it must pay over to treasury's National Revenue Fund (NRF) within 30 days. It collects these payments from broadcasters, telecoms operators and for the use of spectrum.
However, the AG says it could not verify NRF assets of R899.9 million and payables balances of R906.8 million. The AG writes that this was “due to lack of control over the invoicing and collection of licence fees”.
ICASA, which is the regulatory authority over a sector worth about R50 billion, also received a qualified audit report last year, as the AG found it had no control over recording outstanding invoices, and did not have satisfactory audit procedures.
The regulator agreed with the qualified audit, and said it is putting measures in place to ensure better controls over revenue collection and to prevent further irregular expenditure.
In the year to March, ICASA generated revenue of R296.8 million, up from last year's R285.4 million.
However, it was left with a deficit of R10.97 million, a leap from the 2010 shortfall of R4.7 million.
The AG also noted the entity incurred fruitless and wasteful expenditure of R707 413 in the year to March.
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