Presentation Outline

Film and Publication Board Presentation to the Portfolio Committee on Communications09 September 2014

Presentation Outline • Vision, Mission & Values • Historical Perspective • Legal Framework • Regulatory Tools • Governance Structures • FPB Management • Strategic Outcomes • Strategic Priority Programmes 2014-2019 • FPB Successes • Current Challenges • Employment Equity • Staff Misconduct Matters • Performance Information Report Quarter 3 • Revenue and Expenditure Report: 3rd Quarter 2013-14

FPB Vision, Mission and Values

Historical Perspective • Previous Censor Board within the Department of Internal Affairs • Governed by the Publications Act of 1974 to Censor undesirable content • 1994 shift from Censorship to Content Classification • Task Group established to draft legislation to replace Publications Act • Film and Publications Act no 65 of 1996 • FP Act allowed for content classification and age ratings, only child pornography and bestiality prohibited from distribution

Legislative Framework

Evolution of FP Act • Enacted in 1996 to establish the FPB and regulate the creation, possession and distribution of films, games and certain publications. • Amended in 2009 to among others: • Insert and delete certain definitions • Establish and provide for the powers and duties of a Council • Provide for the appointment of functions of compliance officers • Provide for the compositions, functions and management of the Board • Repeal certain schedules to the Act • Currently a legislative amendment process is underway to allow for better regulation of online content distribution

FPB Regulatory Tools FILMS AND PUBLICATIONS ACT 1996 REGULATIONS APPEALS

Governance Structures

FPB Management

FPB Strategic Outcomes: 13/14 – 17/18

STRATEGIC PRIORITY PROGRAMMES 2014/2019 • Research, Compliance Monitoring & Evaluation (SO1) • High Visibility-High Impact Communications, Stakeholder Engagement & Consumer Education (SO2) • Resourcing and Financing Plans and Institutional Reform (SO3) • ICT , Connectivity and Digitisation Strategy (SO3) • Technology driven content classification (SO4) • Legislative review (SO4) • Regional, Continental and International Partnerships (SO5)

FPB Successes • National, Regional, International visibility • Online Regulation – Agreements with distributors in place (Altech, Apple, Google) • Our classification processes and governance are more rigorous and effective due to online submission of games • Financial systems are sound, we had 5 years of unqualified audit reports. • Reduced the % of appeals to classified material due to improved operational efficiencies and training of Classifiers • We have developed a training manual for the classifiers which will be accredited through UNISA as a formal training programme

Current Challenges • Inadequate empirical research and industry-specific expertise • Proliferation of content on various platforms (local and international), accessible to South African citizens, especially online • Increase of illegal content and user generated content (especially Child Pornography) • Cyber-safety as it relates to children • Inadequate regulatory tools for online content distribution (pending legislative amendments, Online Strategy implementation, ICT tools) • Limited enforcement of FP Act provisions (inadequate enforcement provisions) • Reduced funding sources to meet an expanding mandate (Decreased revenue generation due to shift from physical to online distribution)

Employment Equity

Staff Misconduct Matters • Misrepresentation of Qualifications – Gross Dishonesty: • Detected through a credential verification process • Investigated and referred to a Disciplinary Hearing • Employee found Guilty and Dismissed • Failure to relocate as per Contractual Obligation + Absenteeism + Misconduct at an Official FPB Function: • Investigated and referred to a Disciplinary Hearing • Dismissal Finding, employee lodged an appeal and the finding was upheld • Employee referred the matter to CCMA for arbitration – settled “ out-of-arbitration” on provision that employee receives full pension benefit. • Classifier’s Failure to Comply with Requirements for Content Classification at an External Viewing Venue: • Disciplinary hearing was held , finding was that the FPB was unable to provide evidence to support the allegations • Ruling – Classifier found Not Guilty of charges

Staff Misconduct Matters...continued • Theft of Material submitted to the FPB for Classifications + Accessing Viewing Facilities and Utilising Equipment and Materials without Authorisation:(2 Operations Staff) • Two employees suspended while allegations were investigated • They were charged and disciplinary hearing was held on the 05 – 22 August 2014 • Employees were found guilty on all charges and dismissed with effect from the 25 August 2014 • Collusion with a service provider + Conflict of interest + Contravention of FPB Fraud Prevention Plan: (Senior Manager & Operations Staff) • Allegations reported to FPB from a whistle-blower • Allegations currently being investigated through forensic auditors • Outcome still to be determined • Non-compliance with SCM procedures and regulations as accountable FPB Official + Irregular expenditure (Executive) • Investigation report tabled with FPB Council Task Team • Responsible Executive was suspended with effect from 8 August 2014 • Charges are being formulated .

Performance Information Report 2013/2014 Quarter 3

SO 1 :Effective and visible regulation of films game and certain publications throughout the entire value chain to protect children and inform the public

SO: 3 Effective and efficient management of FPB procedures

SO4: Ensure effective and innovative regulation of the content distributed on online, mobile and related platforms to protect children and inform the general public

SO 1: Effective and visible monitoring of films games and certain publications throughout the entire value chain (content creators, producers and distributors of fpgs) to protect children and inform the general public

SO 2: Consumers, general members of the public and industry informed about the mandate of the FPB

SO 3: Effective and efficient management of FPB Operations

SO4: Ensure effective and innovative regulation of the content distributed on online, mobile and related platforms to protect children and inform the general public

SO 5:Expand our footprint as the FPB through partnership and stakeholder relationships in pursuance of our mandate

REVENUE AND EXPENDITURE REPORT: 3RD QUARTER 2013-14

Table of Contents • Revenue • Expenditure • Budget Report • Report on Irregular Expenditure • Additional Funding Requirements

FPB Revenue Framework

Revenue Report for Q3 ended 31 December 2013 o Grant subsidy R 55,631,000 was received to date from the Department of Home Affairs. The Grant subsidy is being transferred in quarterly instalments of R 20,669,000 at the beginning of each quarter. o Classification fees of R 6,375,750 were collected during the first three quarters of the current financial year. To date only 30% of projected fees were collected; this is due to a decline in the material submitted for classification. o Registration fees of R 339,919 were collected during the first three quarters of the current financial year. To date only 24% of projected fees were collected. o Annual renewal fees of R 195,149 were generated. To date only 26% of projected fees were collected. This is due to an increase in number of distributors closing shop. o Interest Income amounting to R 15,848 was received to date from short-term investment made during the current financial year. o Other income collected from during the quarter related to recoveries from staff and income received for Tender purchases, at end of second quarter total amount of R 6,200 was collected. o 70 % of the overall budgeted income was actually received as at the end of the third quarter.

Expenditure Report for Q3 ended 31 October 2013 o SO1 – Effective and visible monitoring of industry compliance throughout the value chain for the protection of children and adults through consumer education. 50% of the budget has been spent. o SO2 - Consumers, general members of the public and industry informed about the mandate of the FPB. 78% of the budget has been spent. o SO3 – Effective and efficient management of the FPB operations. 61% of the budget has been spent. o SO4 – Effective and innovative regulation of content distributed on-line, mobile and related platforms for the protection of children and adults through consumer advice and information. 56% of the budget has been spent. o SO5 – Expand FPB footprint through partnerships and stakeholder relations in pursuance of the FPB mandate. 65% of the budget has been spent. o 54% of the Capital expenditure budget has been spent. o 61% of the administration expenditure has been spent. Overall, 59% of the expenditure budget was spent as at the end of the third quarter, these amounts include commitments.

Q3 Expenditure Comparison Report 2012 and 2013

Budget Report

Budget Report for period ended 31 December 2013

Report on Irregular Expenditure

Report on Irregular Expenditure • During the third quarter it was noted that one of our service providers did not deliver services contracted upon, as a result of which, the total amount of R 1 080 000 paid to the service provider was identified as irregular expenditure. • After internal investigation, it was determined that there was a breach of procurement processes and disciplinary processes are underway. • Recovery processes were also instituted against the service provider. FPB has since received a written offer of settlement from the service provider.

ADDITIONAL FUNDING REQUIREMENTS

ADDITIONAL FUNDING REQUIREMENTS • Organisational Capacity and Capability – R 3 800 000, this once off allocation will be used to resolve current salary disparity; the new packages will be incorporated into the baseline throughout the MTEF. • Implementation of Communication Strategy – R 10 300 000, this additional allocation will be used to implement the revised communication strategy during the 2015-2016 financial year. The strategy will be focussing on the implementation of Media Engagement Strategy, Stakeholder Relations, Public Relations and Marketing and Community Forums and Outreaches. • c) ICT Modernisation and Infrastructure Improvement – R 32 400 000, due to the current ICT challenges highlighted above, it is recommended that the FPB improve current ICT infrastructure and optimise its ICT services to meet its business requirement. The additional allocation will be distributed as follows over the MTEF period: • • 2015 – 2016 = R13.8m • • 2016 – 2017 = R9.6m • • 2017 – 2018 = R4.1m • • 2018 – 2019 = R5.3m

Presentation Outline