‘Financially sound’ SITA rakes in R2.9bn, says acting CEO
Contrary to a media report that the State Information Technology Agency (SITA) faces a serious cash-flow crisis, acting CEO Ntutule Tshenye says the organisation is in a “financially sound” position.
Responding to ITWeb’s questions via e-mail, Tshenye said: “SITA is in a financial space where it is fully meeting all operational commitments and, on a day-to-day basis, payments are made to suppliers, employees are being paid, and operational obligations are being met.”
SITA’s mission is to render an efficient and value-added ICT service to the public sector in a secure, cost-effective and integrated manner, contributing to citizen convenience.
The agency is responsible for about R2 billion annually in IT procurement spending on behalf of government departments.
This week, Tshenye presented before the Portfolio Committee on Communication on the agency’s annual performance for 2019-2020.
After his presentation, Business Day reported SITA is facing a serious cash-flow crisis that threatens the functions of the state.
Service delivery woes
While Tshenye says SITA is meeting all operational commitments, several government departments have accused the agency of poor service delivery. Other allegations levelled against SITA include corruption and failing to fix IT systems at several government departments.
Faced with these challenges, Members of Parliament earlier this month called for SITA to be closed down.
However, Omega Shelembe, deputy director-general of the Department of Communications and Digital Technologies, told ITWeb SITA will not be closed down but government is working to overhaul the SITA Act which will breathe some life into the organisation.
The committee meeting was a positive engagement, with good dialogue based on building the service delivery space, with recommendations for SITA to implement, says Tshenye.
He points out “the common denominator was the collective commitment to improved service delivery and continued improvement of the organisation’s service to government and its citizens”.
Tshenye adds SITA received an unqualified report, noting there must be continual improvement built into the organisation’s evolution, based on the recommendations from the auditor-general and Parliamentary oversight committees.
The Portfolio Committee made recommendations for SITA to improve on its operations and was principally driven by the need for a state agency to be responsive to the evolving fourth industrial revolution (4IR) requirements, he notes.
“Within this context, SITA also gave a report and update on its financials. SITA is, and remains, a financially sound going concern. The financials reported to Parliament are stable, noting that in SITA’s 20-year history, it has been completely self-sustaining.
“SITA has never requested nor received a government bailout for its operational expenses and plans to continue on this trajectory. The agency and its leadership are completely confident about the organisational financial checks and balances. The leadership plan is bold and intent on building this SOE into an institution that will thrive, as it adds value to government’s ICT-supported services.”
According to Tshenye, SITA’s budget for the April 2019/March 2020 financial year is R6.796 billion and is linked to the services needed by customers and rendered by SITA.
This budget is a fiscally responsible budget, based on expected sales, and is flexible enough to accommodate increased or decreased cost of sales, based on the contracts that SITA executes work on, he says.
Nonetheless, Tshenye, in a recent interview with ITWeb, blamed budget constraints for poor service delivery.
“Parliament engagement also highlighted that in the last six months – April 2019 to October 2019 – SITA collected R2.947 billion. This is further and concrete evidence of the financial sustainability of the agency.
“The agency also reported on the requirements for the implementation of its new business model, as it supports and assists government in the execution of its national fourth industrial revolution vision. In implementing and executing on the needs and expectations from government in this fourth industrial revolution, SITA is advocating that allowance must be made for critical capital expenditure investments.”
SITA’s report to Parliament spoke to plans to build up its capital cushion, the acting CEO says, adding that capital expenditure will be needed for infrastructure development as the country continues to migrate from outdated legacy systems to new innovative and necessary ways of doing business.
SITA’s financial year runs from 1 April to 31 March. In the first six months, SITA’s expenses are generally higher as once-off annual costs are paid and this cost is typically recovered during future periods, he says.
“SITA leadership, management and employees all regard corporate governance as fundamental to the success of our business. We are fully committed to work and create programmes that ensure SITA remains a viable, relevant and sustainable business that adds value to government’s 4IR agenda.”