DST, National Advisory Council on Innovation, SANSA, TIA, HSRC, & AISA on their 2013/14 Annual Reports

Science and Technology

15 October 2014
Chairperson: Dr B Goqwana (ANC)
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Meeting Summary

Department of Science and Technology 2013/14 Annual Report Presentation

For the year under review, DST achieved 77% of its targets and 16% of targets were only partly achieved.  Programme 2 (Research, Development and Innovation) achieved only 38% of its targets. The target to have four MeerKAT antennae designed and installed by 31 March 2014 had not been achieved. One antenna had been designed and installed and project delays by the contractor had resulted in the remaining three dishes not being installed.  DST received a budget allocation of R6.1 billion and 92.4% of the allocation was paid out as transfer payments to public entities and other DST policy implementing partners. The Department achieved or partially achieved 93% of its targets and had shown consistent improvement over three years.  DST was evaluated second best of all department in the Department of Planning, Monitoring and Evaluation (DPME) evaluation of performance management systems.

Members strongly debated DST’s monitoring of the contractors that were supposed to install the MeerKAT antennae and whether line mangers were being held accountable when performance targets were not met.  An ANC Member had to withdraw his comment when he called a Member of the opposition (DA) a ‘drama queen’. The DA felt that the Committee was unfairly interrogating the Department on the MeerKAT satellite dishes and that it was a new science for South Africa. The Committee questioned the Department on the vacancy rate, their performance management systems and the proposed budget cuts by National Treasury.

National Advisory Council on Innovation (NACI) 2013/14 Annual Report Presentation

Key outputs for 2013/14 were a refocused NSI which needed skills, investment, inclusivity, infrastructure, flagship projects and champions and role models. Other key outputs were the assessment of the NSI, policies and legislations affecting the implementation of the Bio-economy Strategy and established an E-learning Platform for Gender Mainstreaming. Based on discussions with the Minister, NACI’s plans for the next term included a strong advisory function with a focus on macro science and technology innovation aligned with the NDP, a review of the White Paper for Science and Technology (1996) and to deliver regular reports on the state of innovation in the country.

The Committee discussed how information could be shared to the broader society, to what extent NACI’s advice had been considered and implemented and what could be done to address negative patent trends.

South African National Space Agency (SANSA) 2013/14 Annual Report Presentation

SANSA obtained a clean audit for the first time and achieved 27 out of 33 targets (82%). SANSA had a total revenue income of R212 minion for the year under review of which R111 million was parliamentary grant funding and R71 million was contract revenue.

The Committee discussed SANSA’s role and mandate in assisting other departments. The funding constraints and the cost containment issues were also discussed and the Committee focused on specific programmes like the IBSA1 project, the Space Industry Cluster Competitiveness Programme and the Satellite Build Programme. 

Members questioned SANA’s funding model SANSA stated their main priority was to deliver a public service to government. Currently SANSA’s commercial income was more than half the Parliamentary allocation and it was not sustainable. A Member of the ANC and a Member of the DA had a brief disagreement when the ANC Member requested that the DA’s researcher not be seated with Members of Parliament, but rather with the rest of the support staff. The DA Member said the ANC Member’s behaviour was ‘petty’. These were the same Members who had previously had a stiff disagreement.

Technology Innovation Agency (TIA) 2013/14 Annual Report Presentation

There had been a lot of reportage about TIA’s governance challenges in the media last year. Since 2010, R1.2 billion had been disbursed to the system and R564 million had been leveraged through third party funds. Over 6 800 SMMEs had been supported through the Technology Stations Programme with 98 products, processes and services developed, 18 investments commercialised and 500 interns trained. TIA achieved 86% of its targets and the Agency received an unqualified audit opinion for the third year in a row.  Audit findings were reduced significantly and although revenue generated increased steadily over the Medium Term Expenditure Framework (MTEF) to R480 million for 2013/14, TIA’s funding had been significantly cut by R100 million for the current financial year.

Committee members discussed the irregular expenditure, the supply chain management challenges and the pending retrenchment of employees. It was confirmed that the irregular expenditure was not in any way fraudulent in nature, but related to non-adherence to internal policies and procedures which related to approval processes of investments. It was not ‘fruitless expenditure’, because the funds paid for services, but did not go through the proper channels before being paid. Reports that TIA would effectively half its staff complement was denied and the Committee extensively discussed the measures TIA was taking to decrease administrative costs. The Committee expressed concern over the measures put in place to support the employees of TIA and the effect the retrenchments could possibly have on the sustainability of the Agency.

Harsh words were spoken between the same ANC and DA Members who previously disagreed in what the ANC Member felt was an insinuation by the DA Member that she merely used the Committee Researcher’s document to ask questions and not her own reasoning. The DA Member in turn felt that the meeting was being politicised. The Chairperson said the issue would be discussed once the officials were excused, but the DA Member left the meeting not long after the incident.

Human Science Research Council (HSRC) 2013/14 Annual Report Presentation

HSRC met or exceeded all its targets for publications, except for policy briefs where the Council published eight against a target of 14.  All the targets for research capacity enhancement, collaboration, public dialogue and data preservation were either met or exceeded.  HSRC did not quite meet the targets for transformation in terms of African senior researchers, multi-year grants and extra-parliamentary funding.  HSRC achieved a clean audit opinion and no audit adjustments were processed to the annual financial statements.  One audit finding was raised by the Auditor-General and it related to declaration of interests.   In terms of research income, HSRC achieved 83% of its targets and the Council utilised 100% of its budget allocation.  HSRC continued to grow its income and was operating on a budget of R401 million in the current financial year.

The Committee commended HSRC for the good work.

Africa Institute of South Africa 2013/14 Annual Report Presentation

AISA was incorporated into the HSRC on 1 April 2014.  AISA met or exceeded all their research targets except for the Edited Proceedings target of which only 33.3% of the target was met.  AISA exceeded its target of publishing 6 books and published 10 for the year under review.  The publishing targets of African Insight Journals (75%) and Occasional Papers and Monographs (25%) were only partially achieved.  AISA obtained an unqualified audit report.  The two audit findings in terms of internal control measures related to a tax certificate and material misstatements on the re-evaluation of AISA’s assets.  AISA’s expenditure amounted to approximately R36 million against a budget of R39.4 million.  The variance was as a result of frozen posts pending the incorporation and the fact that a permanent chief executive officer was never appointed.  At the date of incorporation AISA was solvent.

The Committee commended AISA on how the merger was approached and asked for clarification on the tax clearance certificate issue.  It was confirmed that the service provider in question had a valid tax clearance certificate on file at the South African Revenue Services (SARS) and at the time the contract was awarded.

Meeting report

The Chairperson welcomed everyone to the meeting and said the Committee had a very long programme ahead. The purpose of the meeting was to assess how the Department and its entities were spending their budget allocations, if the money was being utilised effectively and whether the Department and its entities could convince the Department that the budgets were hampering their work. Transformation was vital in the innovation sphere and the economy would be greatly enhanced by more people exposed to and empowered by innovation.

Department of Science and Technology 2013/14 Annual Report Presentation

Dr Thomas Auf der Heyde, DST Deputy Director-General: Human Capital and Knowledge Systems, submitted the apologies of the Minister and the Director-General. He said the South African science system could not absorb any further cuts in funding without dire consequences. Despite trying to, the Department of Science and Technology (DST) could not identify significant opportunities for reprioritisation, because programmes were strategically focused. The general Ministerial Medium Term Expenditure Framework (MTEF) funding priorities included Human Capital Development, productive and sustainable public entities and modernising the knowledge infrastructure. Other priorities were the expansion of science, technology and innovation (STI) on the African Continent, ensuring the success of the Square Kilometre Array (SKA) and the Bioeconomic Strategy. He gave an overview of the indicative baseline reductions for 2015/16 and 2016/17 for compensation of employees, goods and services and transfers.

For the year under review, DST achieved 77% of its targets and 16% of targets were only partly achieved.

Programme 1 (Administration) achieved 100% of its targets. Highlights of the programme included maintaining the targeted 6% vacancy rate and the successful internally piloted Performance Information Management System (PIMS) in September 2013. 

Programme 2 (Research, Development and Innovation) achieved 38% of its targets. The target to have four MeerKAT antennae designed and installed by 31 March 2014 had not been achieved. One antenna had been designed and installed and project delays by the contractor had resulted in the remaining three dishes not being installed. The contractor had resolved to have the remaining three dishes installed by June 2014.  The target to have 24 institutions awarded a rebate for Intellectual Property (IP) prosecution and maintenance costs from the IP Fund by 31 March 2014 had also not been achieved. A lack of funds prevented the immediate reward of rebates and the obligation had been rolled over into the new financial year.

Programme 3 (International Cooperation and Resources) achieved 100% of its targets. Highlights of the programme included the international partnerships that enabled more than 2 000 cooperation opportunities for the South African National System of Innovation (NSI). In November 2013, the DST Director-General also assumed the Presidency of the Science Commission of the United Nations Educational Scientific and Cultural Organisation (UNESCO). It was the first time an African had chaired an UNESCO Commission.

Programme 4 (Human Capital Development and Knowledge Systems) achieved 80% of its targets. The target to have 3 822 researchers awarded research grants through National Research Fund (NRF) managed programmes had only been partly achieved. Only 3 569 researchers were rewarded research grants, because delays in taking up positions by new South African research chairs resulted in a decrease of grants taken up. Highlights of the programme showed that on 7 March, the Deputy President announced 54 new research chairs and chair holders, bringing the total number of awarded chairs to 137.  Five new centres of excellence were established, bringing the total to 14.

Programme 5 (Socio-economic Partnerships) achieved 86% of its targets. An agreement with the Bill and Melinda Gates Foundation for piloting various sanitation technology solutions within the 23 district municipalities and rural schools in the Cofimvaba Technology for Rural Education Development (TECH4RED) Project had been signed. DST received an allocation of R143 million towards the Innovation Partnerships for Rural Development. This initiative focused on demonstrating and piloting innovative technology solutions to improve public services within the 26 rural district municipalities.

Dr Auf der Heyde said DST received a budget allocation of R6.1 billion and 92.4% of the allocation was paid out as transfer payments to public entities and other DST policy implementing partners. Of the allocation, 48.5% were paid to seven DST-managed public institutions and 51.5% was payments for various projects which were managed through contracts. In total, 99.5% of the budget was spent with a R28.6 million surplus amount. The Department achieved or partially achieved 93% of its targets and had shown consistent improvement over three years. DST was evaluated second best of all department in the Department of Planning, Monitoring and Evaluation (DPME) evaluation of performance management systems.

Discussion

The Chairperson asked members to ask questions with the Budgetary Review and Recommendations Report (BRRR) in mind.

Ms L Maseko (ANC) asked what department was rated better than DST. Although the Department achieved 77% of its targets, it was essentially an underachievement. She asked what strategies were put in place to boost the achievement of targets in Programme 2 (Research, Development and Innovation). She also asked if the performance agreements were being utilised to ensure accountability. The benchmark for vacancies was commendable and she asked what was done to ensure that the areas in Administration such as under spending and maladministration did not recur. Of the four MeerKAT satellite dishes due on 31 March 2014, only one had been installed and she asked what was being done with the contractors responsible for the installation of the dishes. The Department should be able to achieve a clean audit and she asked what effect the elections had in terms of the redeployment of political staff and the new mandates, on the Department.  Every department was supposed to have an innovation aspect and she asked if there were broader interdepartmental meetings between departments. The latest baseline reductions were worrying, because it seemed the Department was being penalised for doing good work and the cut money had to compensate for those departments not functioning efficiently. The reductions of compensation, goods and services and transfers did not speak to the need to increase innovation and it needed to be motivated. She asked whether the Department had begun to look at acquiring a big piece of land that could perhaps also house the entities.

Dr Auf der Heyde replied that the alignment of all performance agreement contracts of senior management in the Department with the Annual Performance Plan was audited, at least internally. Performance reviews were held mid-year and an annual performance assessment was also held where senior management had to answer specific questions based on their performances and the performance targets.

Mr Mboneni Muofhe, DST Deputy Director-General: Technology Innovation, said there were a number of interdepartmental engagements, particularly with the departments of basis and higher education and rural development. The main objective was that the support for locally developed technologies should be enhanced.

Ms Maseko said she specifically meant if line managers were held accountable for specific audit outcomes and findings.

Dr Aufder Heyde replied that the responsibility of certain audit outcomes was allocated to senior managers for which they needed to be accounted for. The tenders for the installation of the 64 MeerKAT dishes went to a consortium of service providers and 75% of the content of the dishes would be locally sourced as per the tender requirements. It was not just one company involved in the installation, but it was often the company and their different suppliers on which they had to rely to get different parts of the satellite dishes. The SKA Project Office intervened and interrogated the company as soon as they became aware that the company would not be able to deliver the four dishes by the due date and penalties were invoked. The penalties had been maximised, also as per the tender regulations and the SKA project Office had been monitoring the process closely to make sure that there would be no more delays. All dishes would be erected by the end of the financial year. The main reason for the delay was that one of the subcontractors had not been adequately prepared to produce whatever they were supposed to produce to install the dishes.

Mr M Kekana (ANC) said the Department should state who responsible was for overseeing this process in terms of the deadline that already passed and whether the main contractor had been penalised. A contractor was supposed to be assessed monthly and penalised if their work was not up to standard. It was not clear what the people responsible for these projects were doing because there were clear guidelines in contracts that stipulated specific penalties up to termination of a contract.

Ms Maseko said the initial due date was missed and then the contractor resolved to have the dishes installed by the end of June 2014, which had also been missed. She asked that DST clarified the specific steps that had been taken against the contractor.

Ms J Terblanche (DA) said it should be kept in mind that it was a new field of expertise in South Africa and it was clearly explained what caused the delays. It would be good if members could go and physically see how telescopes had been developing over the years. Strictly speaking, it was not necessarily contractors, but scientists that had to work through very difficult processes which most would not able to understand even if it was explained three times. Ms Terblanche said her husband was a scientist and with ground-breaking work, it was very difficult to adhere to timelines, as most scientists would attest to.

Ms Maseko said the contractor made a lawful undertaking to have the satellite dishes installed at a certain date. You need not be a scientist to hold someone responsible and accountable to commitments made.

Mr Kekana said the Committee did not need ‘drama queens’ to come to the defence of the Department when simple answers were requested. He proposed that the Committee, after the meeting agreed on a specific date to oversee the MeerKAT project in detail.

Mr C Mathale (ANC) said if a person stayed with an accountant it did not mean that others could not talk about accounting activities. It was also not true that if something was explained repeatedly, Members would not be able to understand because they were not scientists. He asked what specific component of the satellite dishes was not available for these dishes to be installed. If the technology was not available for a project to continue, it should be publically discussed. If the Department needed time to get back to Committee, they should be afforded the opportunity to provide the Committee with detailed feedback.

Dr Auf der Heyde said he did not know the name of the specific component. The Department would provide the Committee with specific details on the MeerKAT project and the status of the satellites and the concerns that were raised in the meeting. 

Ms Terblanche said it was offensive to be called a ‘drama queen’ and she asked that Mr Kekana withdraw his comment. It was important for the Committee to get the answers they wanted, but engagement with the Department should be in a respectful manner.

Mr Kekana withdrew his comment.

The Chairperson said the Department only achieved 38.5% of its targets in Programme 2 (Research, Development and Innovation) and he asked if it was due to capacity or funding constraints. He asked if the Department ever considered on having a specific vote for research and development.

Ms Terblanche said she was delighted with the agreement with the Bill and Melinda Gates Foundation for piloting various sanitation technology solutions within the 23 district municipalities and rural schools in the Cofimvaba Technology for Rural Education Development (Tech4RED) Project. It was a project that could be implemented in other rural areas once this project was assessed to be successful. She asked if DST was consulted with on the indicative baseline reductions or was the Department just informed by National Treasury.

Dr Auf der Heyde said National Treasury did engage with the Department and with entities on proposed budget cuts to determine if it was reasonable. On the latest cuts, National Treasury requested the Department to give some indication as to where the Department would be able to absorb budget cuts. After engaging with the Minister, the Department communicated to Treasury that DST had been reprioritising its budget on a continuous basis and that was why the Department spent almost 100% of its budget. DST also went on a voluntarily budget cut two or three years ago and at this stage there were no areas that could be identified to absorb further budget cutting.

Mr Kekana (ANC) said perhaps in the future the Committee should engage with only one entity per day.  The 100% achievement rate for Programme 1 (Administration) was misleading in terms of the misconduct and disciplinary actions taken, the funding shortfalls and the employment equity balance in terms of gender and employees with disabilities. The only acceptable reason that could be given for the vacancy rate was if there was no budget and he asked where the money was that was supposed to pay for the people that would be hired. The Department needed to be transparent in their reporting and the Committee expected to hear more on the Fraud Risk Prevention and Detection Plan and the Staff Retention Strategy of the Department.  He also referred to the MeerKAT satellite dishes that were supposed to be installed and the consequences for those that did not deliver on the deadlines. He asked for clarification on the statuses of the International Centre for Genetic Engineering and Biotechnology (ICGEB) budgets and the management of the vacancies, which seemed concentrated in Programme 2. It would perhaps be a good idea to have a separate presentation on performance management up to the most senior level so that the committee could get an indication of the strategies the Department had in place. He asked if the reports of the meeting between the senior management of the Department and the Board members were available to the Committee.

Dr Auf der Heyde asked if the Committee could allow the Department to come and present extensively on the Department’s human resources and equity and transformation related matters.

Mr Muofhe said the ICGEB was underfunded because the Department was struggling to find the money to fund the programme.

Ms Nombuyiselo Mokoena, DST Deputy Director-General: Corporate Services, said vacancies were unavoidable, because in some instances when people left, they were replaced with people from within the Department and it also created another vacancy. DST set a target of not exceeding a 10% vacancy rate and this target was thought through carefully taking into consideration historical context and the public, private and international sector benchmarks. The strategies put in place were to make sure the vacancy rate was kept at a minimal and the current vacancy rate was around 6%.

Mr N Koornhof (ANC) asked if the Department had oversight over the DST public institutions and if not, how independent these institutions were. He asked if the Department had any say in what was done with the grants received from the Department.

Dr Auf der Heyde replied that the Minister signed a shareholder contract with the chairperson of each entity in which agreements were stipulated between DST and a particular entity on the priorities for that specific year. There were regular bilaterals between the Director-General and his team and the chief executive officers of all the entities two or four times a year. The chief executive officers of all entities also engaged with the Minister twice annually and there were quarterly performance and monitoring evaluations of the reports of the entities. This range of tools allowed the Department to monitor and evaluate entities.

Mr Mathale commended the Department on their achievements over the past three years, but the focus should shift to the targets not met. The findings by the Auditor-General found that there had been no improvement on the SCM findings from the previous financial year and he asked why there had been no improvement. In one of the entities a contract had been awarded without a valid tax clearance certificate on file and it was in fact illegal and such issues needed to be addressed. Research and development was a critical area for science and technology and the other achievements were hollow if the targets in Programme 2 were not met. He asked how the Department could plan and budget for a programme without having money for that programme. It did not make sense to then say that the target was not achieved because of ‘funding constraints’. He asked what the objectives of the National Science week and the Science Festivals were and whether the ‘public participation’ spoke to the future sustainability of science and technology. 

Ms Mokoena said DST was not ignoring the Auditor-General’s findings and recommendations on SCM and more skilled personnel had been moved into the SCM area. The SCM policies and monitoring systems were reviewed to address all the issues and inaccuracies highlighted by the findings.

Dr Auf der Heyde said older people might not have a direct role to play in the future of science and technology, but they had a vital role to play in the lives of those who were the future of science and technology. Reaching out to the general public on these initiatives would allow the youth to see science and technology as something that the whole of society valued. It did not mean that there were not specific programmes that targeted the youth.

The Chairperson said the Committee should take care that the comments and questions asked during the discussions were not perceived to be insensitive and Members should be respectful to both the delegations and each other at all time.

Dr Auf der Heyde assured the Committee the Department was happy to answer questions and to assist the Committee in their oversight function. There had been no offense taken and the Committee was simply doing their job. All of the questions not answered would be forwarded to the Committee.

The Chairperson thanked the Department for their input.

National Advisory Council on Innovation (NACI) 2013/14 Annual Report Presentation

Professor Cheryl de la Rey, NACI Chairperson of the Board, said NACI advised the Minister for Science and Technology and through the Minister, the Minister’s Committee and Cabinet on the role and contribution of science, mathematics, innovation and technology, including indigenous technologies, in promoting and achieving national objectives. A properly positioned and appropriately empowered NACI was essential and the Department needed to use NACI to give direction on new technologies that should be investigated. The measures that government has taken (especially related to the roles of the DST and NACI, as designated coordinators of an otherwise fragmented and diverse National System of Innovation) have yet to find sufficient effect.

Professor Jennifer Thomson, NACI Councillor, said some of the strengths of the NSI were increasing numbers of South African patents granted by the United States Patent and Trademark Office (6%) between 2010 and 2011. There had been an improvement in the Technology Balance of Payment (5%) and an increased number of high impact publications (3.8%) between 2010 and 2011. Some of the weaknesses of the NSI included a lack of effective monitoring and evaluation across the NSI and the measuring system was limited to research and development activities. The innovation infrastructure was not properly networked and there was a shortage of good quality skills for innovation.

Prof Thomson gave an overview of how the NSI areas compared to the BRICS partners and an illustration of the Patent Corporation Treaty (PCT) process. Patent application was a first step, followed by publication, examination and granting. Key outputs for 2013/14 were a refocused NSI which needed skills, investment, inclusivity, infrastructure, flagship projects and champions and role models. The current skills mix was unbalanced and skewed towards high end skills and funding should be accessible to the small and medium enterprise sector. NSI was currently an exclusive domain of the science community and it should be aligned to the National Development Plan (NDP) Vision. The success of innovation activities should be nurtured and highlighted and flagship projects such as the SKA needed to be built upon. Other key outputs were the assessment of the NSI, policies and legislations affecting the implementation of the Bioeconomy Strategy and established an E-learning Platform for Gender Mainstreaming. More outputs included two booklets that spoke to understanding gender and disability mainstreaming and South African science and technology indicators.

Further engagements were needed with Department of Higher Education and Training (DHET), Department of Trade and Industry (DTI), DST, the National Planning Commission and a strategic workshop with the innovation community. These engagements would strengthen the vocational education and training pipeline; review research output incentives to encourage technological development and discuss trends in technological progress in the context of prioritisation and commercialisation mechanisms. The on-going work programme focussed on the structure, governance and coordination of the NSI with specific indicators such as the development of the Innovation Data Portal, mobilising South African researchers and supporting the Bioeconomy Strategy. The diagnostic assessment of gender and race in science and engineering in selected parts of the public sector; indigenous technologies and sustainable management of biodiversity and sustainable biomass refining were also indicators in the on-going work programme of the NSI.

Based on discussions with the Minister, NACI’s plans for the next term included a strong advisory function with a focus on macro STI aligned with the NDP, a review of the White Paper for Science and Technology (1996) and to deliver regular reports on the state of innovation in the country.

Discussion

The Chairperson said NACI, in their role as advisors to the Minister, NACI should also focus on how this information could be shared with those that would not be ordinarily privy to this type of information. It should benefit the broader society.

Mr Mathale said although the synergising of departments might be a challenge, it would be good to know to what extent the advice given by NACI had been implemented.

Prof Thomson said it was a real issue and the Council’s advice in the past had sometimes been considered and other times disregarded. In engagement with the Minister, it was decided that every few months there would be a meeting with either the Minister or with an appointed official on tracking the advice given by NACI.

Ms Maseko asked what could be done about the negative trends in terms of patents. NACI had a huge role to play and was essentially the eyes and ears of the Minister. The audit outcomes needed to be tracked very closely and remedial matters needed to be put in place. Performance management was important and bonuses should be reserved for those going the extra mile.

Prof Thomson said patents were not easy to secure and the University of Cape Town (UCT) had a patent office that assisted academics, but it was not easy for students that could not be published until the patent had been secured. It was also an issue that should be brought up with the Technology Innovation Agency (TIA) that could better address the challenges facing patents.

The Chairperson thanked NACI and the Committee Members for their input.

South African National Space Agency (SANSA) 2013/14 Annual Report Presentation

Ms Joy-Marie Lawrence, SANSA Chairperson of the Board, said she hoped the presentation would show the Committee how well SANSA had been using the allocated funds. 

Dr Sandile Malinga, SANSA Chief Executive Officer, said SANSA provided for the promotion and use of space and cooperation in space-related activities, fostered research in space science, advanced scientific engineering through human capital, supported the creation of an environment conducive to industrial development in space technologies within the framework of national government policy. 

Dr Malinga gave an overview of employee statistics and the SANSA programmes which dealt with image acquisition, image distribution and value-added services and products. These programmes were Earth Observation, Space Science, Space Operations and Space Engineering. Space was used in a variety of settings. The Independent Electoral Commission (IEC) used space to demarcate and verify voting districts, to locate voting stations and to plan and implement the voting process. Eskom used space for the planning and designing of electrification, electricity load forecasting, socioeconomic evaluation, infrastructure security (theft, encroachment, illegal connections) and predicting potential space weather adverse effects. SANSA used space to create a national human settlement map, to monitor urban growth and to audit housing development. Space was also used for space weather services, geomagnetic navigation support, electromagnetic signature management, satellite image intelligence and defense training support. SANSA operated a geospace laboratory that generated new data for knowledge creation and investigated the mysteries of the universe. Space and National Innovation focused on the National Satellite Development Programme, the development of the space industry, the development of space technologies, opening space markets for our industry and space capacity building.

Dr Malinga said the Agency was now fully established and has obtained a clean audit for the first time. SANSA achieved 27 out of 33 targets (82%) and Dr Malinga also gave a detailed overview of the key performance indicators as it related to the stakeholder perspective, learning and growth perspective, the financial perspective and the human resources and transformation perspective. SANSA had a total revenue income of R212 minion for the year under review of which R111 million was parliamentary grant funding and R71 million was contract revenue. Employee related costs constituted 31% of expenditure, while operating expenditure and capital expenditure constituted 50% and 19% respectively.

 

Discussion

Mr Kekana said SANSA’s vacancy rate was more than 10% and he asked if there was a recruitment strategy in place. It seemed that permanent staff from designated groups was not employed in management positions and he asked what was done to rectify that. The Space Industry Cluster Competitiveness Programme did not happen due to funding constraints. He asked what the reasons were for these funding constraints not to be foreseen. He also asked how many consultants were used and for what purposes. 

Dr Malinga said the vacancy rate could be ascribed, in part to the salary budget. There were some vacancies SANSA could not afford to fill and a small section of the vacancies remained unfilled after unsuccessful recruitment programmes. Management positions were filled by people in designated groups, but the challenge was the technical positions like engineers and the gender challenge for scientists. Funding had been received from some government departments and the Space Industry Cluster Competitiveness Programme ended up with a shortfall of R8 million. In engagement with the Minister, SANSA was advised to go into a ‘user pay’ principle, but because SANSA was a public entity, the expectation was that the service should be provided for free. This could be funded through an allocated vote for satellite imagery through National Treasury as opposed to the current system of going ‘cap in hand’ to government departments asking for contributions. The exact number of consultants used was not exactly known at this point, but it was very few. Consultants were primary used for policy review processes and system upgrades.

Ms Maseko said Dr Malinga stated in the Annual Report that SANSA aimed to deliver performance while balancing cost containment with capacity constraints. She asked what these cost containment measures and capacity constraints were. The IBSA1 project was included as a target for approval from a concept paper and she asked why the project was not approved. She asked how come water shortages and the earthquakes could not be detected. She asked why there had been a decrease in the achieved targets from the previous financial year. She asked what SANSA was doing to support Mandla Maseko, winner of the Axe Apollo Space Academy competition.

Dr Malinga said SANSA was established in 2011 and there were certain positions that needed to be filled within the organisational structure which had not been filled. The Satellite Build Programme had two engineers that were essentially responsible for a very big project and such limited capacity put the project at risk. It was essentially these types of capacity constraints SANSA had to balance with cost containment measures. During the 2011 IBSA Summit in Brazil, President Zuma, together with the two presidents from India and Brazil, announced that the three countries should jointly develop a space weather satellite. That had not materialised in terms of funding commitments from the three countries.  SANSA had already developed the scientific plans for the IBSA1 project. SANSA had tools that could detect earthquakes and although it had never been a high priority for SANSA, in light of the two recent earthquakes it was something that should be looked into. It would probably be a collaborative effort with the Council for Geosciences.  SANSA had been trying to refine its targets since inception and the decrease in achievement was based on that refinement. SANSA was working with Mandla Maseko, in collaboration with the Innovation Hub in Pretoria and SANSA funded his recent trip to Canada.

The Chairperson asked why DST and the Department and Trade and Industry (DTI) had separate mandates when it came to space matters.

Dr Malinga said the roles were distinct because DTI regulated space activities and DST implemented space activities.

Ms Terblanche said currently, 104 mines were operating illegally, using water illegally. She asked should SANSA not have picked this up and warned the Minister of Water Affairs and Sanitation. She asked if SANSA had no way of tracking illegal mining in terms of biodiversity, because mining in wetlands could totally destroy certain species.

Dr Malinga said SANSA provided the tools for others to do their work and it was not SANSA’s mandate or duty to do the work of other departments. Reports from SANSA were provided on a monthly basis that asked departments if these tools (maps, images, footage) could be used to inform certain issues in that department.

Mr Koornhof said the contract revenue for SANSA was slightly higher in the 2012/13 financial year. He asked what SANSA would need to increase their contract revenue.

Dr Malinga said the space commercial market was cyclical and a dip was expected. SANSA’s main priority was to deliver a public service to government. Currently SANSA’s commercial income was more than half the Parliamentary allocation and it was not sustainable.

The Chairperson thanked SANSA for their input. He explained the importance of the BRRR once again and welcomed the Technology Innovation Agency (TIA) delegation.

Ms Maseko asked that the DA’s researcher take a seat at the back with the other support staff and not be seated with the Committee Members.

Ms Terblanche said Ms Maseko was being petty.

The Chairperson asked the researcher to move to one of the back seats.

Ms Terblanche said it was not something ‘Madiba would have done’ and she elected to also move to the seats at the back.

Technology Innovation Agency (TIA) 2013/14 Annual Report Presentation

Ms Khungeka Njobe, TIA Board Chairperson, said the TIA accomplished above average achievements under very difficult circumstances. These achievements could, in part be ascribed to the guidance provided by the Ministerial Review in terms of strategic focus. There had been a lot of reportage about TIA’s governance challenges in the media last year. These issues had been resolved and it was also reported on in the Annual Report.

Prof Rivka Kfir, TIA Interim Chief Executive Officer, said TIA was established to bridge the ‘innovation chasm’. The chasm represented the gap between scientific research activities that yielded new ideas and the successful introduction of products and services emanating from those ideas into the market which ultimately benefited the broader society. TIA’s positioning along the value chain was illustrated as it applied from basic research to applied research to technology development and lastly, commercialisation. The Agency aimed to provide for (in addition to funds and technological competencies), specific value-adding services addressing the specifics needs of its stakeholders. Supporting programmes included the Technology Innovation Programmes which were collaborative programmes that aimed to connect between stakeholders along the innovation chain. Other support programmes were the Technology Stations and Platforms, the Youth Technology Innovation Programme and Innovation Skills Development.

Mr Mkhululi Mazibuko, TIA Chief Operations Officer, said TIA played different roles within the innovation chain. TIA could be a connector that catalysed partnerships, an active funder providing risk funding and support for innovators; a facilitator, a facilitating and a service provider who reduced barriers of access to high-end skills and equipment for innovators. An extensive overview was provided of TIA in each of the role in specific innovation programmes and activities.

The Innovation Skills Development Programme supported fundamental business skills associated with new innovation developments like the Chuma Commercialisation Internship Programme and the DST Industry Support Technology Station Internship Programme. The Youth Technology Innovation Programme assisted young innovators through funding, mentorship and business support. The fund promoted and stimulated a culture of technology innovation and entrepreneurship among young South Africans. During 2013/14, 43 youth projects have benefited (R15.6 million) and a young entrepreneur (28 years old) won R175 000 for ‘Most Innovative Business’ at the ‘2013 Free State enter-PRIZE Job Creation Challenge’.

Since 2010, R1.2 billion had been disbursed to the system and R564 million had been leveraged through third party funds. Over 6 800 SMMEs had been supported through the Technology Stations Programme with 98 products, processes and services developed, 18 investments commercialised and 500 interns trained.

TIA achieved 86% of its targets and TIA Acting Chief Financial Officer, Mr Werner Van der Merwe, said TIA received an unqualified audit opinion for the third year in a row. Audit findings were reduced significantly and although revenue generated increased steadily over the Medium Term Expenditure Framework (MTEF) to R480 million for 2013/14, TIA’s funding had been significantly cut by R100 million for the current financial year. Administration costs had also been steadily decreasing and it was important, because high administration costs negatively impacted innovation funding.

Discussion

Ms Maseko said it was unfortunate that the budget allocations were so limited because innovation cuts across all departments. The number of targets achieved decreased from the previous financial year and she asked what TIA was doing to improve the number of patents secured. The irregular expenditure incurred significantly increased from the previous financial year and the Auditor-General sighted a lack of effective monitoring and evaluation systems, non-adherence to supply chain management policies and regulations and deficiencies in internal control mechanisms. She asked whether TIA’s SCM personnel had been vetted.  Of the 21 employment terminations, 14 had resigned and she asked if there was a structure or committee in place that could investigate the reason for the resignations. If you add the 75 positions that were being abolished to the 51 that were already vacant, then it was clear that the TIA staff complement was effectively almost being halved of its current size. She asked how many people TIA really needed to run effectively and efficiently, what impact these retrenchments would have on service delivery in the short term, if the retrenchments were as a result of the budgets cuts for TIA during the 2014/15 financial year and what systems the new Interim CEO introduced that would ensure efficiency. Of the R27 million that the DST spent on consultants, R24 million was as a result of TIA. She asked why TIA spent so much money on consultants and whether there were performance management policies in place to address line managers that were not delivering on targets.

Prof Kfir agreed and said the year under review had been in a very difficult year for TIA in terms of leadership and executive management and there had been some turbulence in that regard. The targets that were not met were related to the new strategy, how the Ministerial Review influenced the strategy, future investments and the organisational design. The majority of the irregular expenditure related to non-adherence to internal policies and procedures which related to approval processes of investments. It was not ‘fruitless expenditure’, because the funds paid for services, but did not go through the proper channels before being paid.

Mr Van der Merwe said the Board had taken a strong stance against the non-adherence to approval processes of investments. Through forensic investigations, some staff had lost their jobs while others had been subjected to sanctions and disciplinary processes.

Prof Kfir said cutting costs was a priority for the Agency, and TIA was taking care to assist employers in any way possible through this process while balancing the sustainability of the organisation. The SCM unit within TIA was very effective, the employees had been vetted and any or all deviations had been corrected. All consultants appointed had been approved by the Board through specific organisational policies and regulations. It was not true, nor was it the Agency’s intention to halve the staff complement. The impact should be positive, because the reorganisation would allow for TIA to function much more effectively. TIA had a very important role to play in the country. TIA and the National Intellectual Property Management Office (NIMPO) with possible seat funding to universities would have to look at and address to increasing the number of secured patents. It was important to stimulate the economy, not only through monetary investments, but through enhancing the capacity of people to invest.

Ms Njobe said there had been no retrenchments as yet, but rather a process of reorganisation that had necessitated that Section 189 of the Labour Relations Act was revoked. It was an on-going consultation process and TIA was being facilitated and assisted by the Commission for Conciliation, Mediation and Arbitration (CCMA) to ensure a fair process and outcome for everyone. In terms of patents, the results of the structures and policies put into place would only be really visible in a few years’ time.

Ms Terblanche said she would not be using the Committee Researcher’s document to ask questions. The Committee recently met with TIA and at that point they should have known already about the planned retrenchments. It seemed that this information had been deliberately withheld from the Committee and based on some of the reports in the media; it appeared to also surprise many of TIA’s employees. She asked why it was not reported to the Committee at the earlier meeting.

Ms Maseko said she took offense to Ms Terblanche’s insinuation. She said she asked questions because she read the supporting documentation and was therefore informed to ask questions. She asked Ms Terblanche to withdraw the comment and wanted it put on record.

The Chairperson said the Committee Researcher was commissioned to produce the document to assist the Committee and Members were free to ask any question they wanted to ask. At the previous meeting with TIA, the purpose of the meeting was primarily to inform the Committee of what exactly the Agency did.  At that point the organisational structure of TIA was not discussed. He asked Ms Terblanche to withdraw the first part of her statement/question.

Ms Terblanche said she wanted to give recognition to the Committee Researcher who did a lot of work compiling the questions for the use of all the Members. No harm was intended, but if someone read all the questions, it did not give other Members the opportunity to ask questions nor did it give recognition to the Committee Researcher that compiled all the questions.

Mr Mathale said the insinuation was not necessary, especially in light of what happened earlier with the DA’s researcher and Ms Terblanche’s comment that ‘Madiba would not have done that’.

Ms Maseko warned Ms Terblanche to ‘shut up’ while Mr Mathale was still talking.

Mr Mathale said Ms Maseko was also now out of order and there were a certain way Members of Parliament conducted themselves, including how Members were seated. If there were underlying issues, it would be best to be dealt with in-house.

The Chairperson asked Ms Terblanche to withdraw her statement.

Ms Terblanche said she would not withdraw, because the statement was not intended in the way it was perceived and especially now that she had been ‘threatened’ and ‘warned’ by Ms Maseko. Previously the EFF’s researcher has also sat among the Members and although conventions were important, it ultimately it did not matter where people sat.  It was not justified to embarrass someone to this extent and the focus of this Committee historically, had always been on science rather than politics.

The Chairperson asked Ms Terblanche to withdraw her statement, because the comment was perceived to be offensive and once the meeting had been adjourned, her allegations of the ‘politicisation’ of the Committee could be discussed.

Ms Terblanche said she would only withdraw the comment if Ms Maseko would be instructed to withdraw her ‘threats’.

The Chairperson said once Mr Mathale made his comment to Ms Maseko, she stopped talking and addressing Ms Terblanche. The matter would be closed for now and would be addressed once the officials had been excused.

Ms Njobe said the formal decision by the Board had only been recently made and that records could be made available to the Committee. The Board knew at the time of the previous meeting that the newly formulated strategy needed to be aligned with the structure of TIA, that the budget cuts had put a lot of strain on the Agency’s ability to fund its investments and that the administrative costs at TIA were exorbitantly high.  TIA money needed to be primarily spent on funding innovative activities and currently 46% of the budget was spent on administrative costs. It needed to change and the Board consulted with organisational development consultants on options available to TIA, as well as change management consultants for assistance. The current process was informed by those reports.  A process like this understandably invoked a lot of emotion and fear among employees, but it was a very fair process.

Ms Maseko asked what the target for administrative costs was.

Ms Njobe said TIA aimed for 27% in the first year after the reorganisation and hopefully to decrease further from there. Another way to achieve this target was to increase revenue and it was not just about cutting human resources.

Mr Koornhof said ultimately all the patents and technology should make money for the Agency and the economy. He asked if TIA was satisfied with the outputs.

Prof Kfir said it was a high risk business and from the concept to the patent to the commercialisation stage it took a lot of intermediaries. Some of those intermediaries would exit without contributing anything, but others would enter and contributed a lot of money that also covered those that exited the process.

Ms Maseko said she would like to apologise for what happened earlier.

The Chairperson thanked TIA for the contribution.

Human Science Research Council (HSRC) 2013/14 Annual Report Presentation

Dr Olive Shisana, HSRC Chief Executive Officer, said the HSRC intended to serve as a knowledge hub for research-based solutions to inform human and social development in South Africa, the African Continent and the rest of the world. An overview of the performance indicators against the strategic outcome oriented goals showed achievements for Knowledge Advancement (80%), Contribution to Development and Social Progress in Africa (100%), Enhanced Skills (38%), Preserved data and knowledge (100%), Transformation (83%) and Financial Sustainability (71%).

HSRC met or exceeded all its targets for publications, except for policy briefs where the Council published eight against a target of 14. All the targets for research capacity enhancement, collaboration, public dialogue and data preservation were either met or exceeded. HSRC did not quite meet the targets for transformation in terms of African senior researchers, multi-year grants and extra-parliamentary funding.

Dr Shisana gave an overview of the extensive highlights of the HSRC for the 2013 financial year. These highlights included chairing the plenary session of the General Assembly of the International Social Science Council (ISSC), developing the draft BRICS Universal Health Coverage Monitoring and Evaluation Tool and contributing to research for, and writing of, United Nations guidelines for National Urban Policies in Africa.  HSRC also started work on the Maternal and Infant Morbidity and Mortality Surveillance (MIMMS) project that aimed to strengthen the existing surveillance system and strategies to monitor maternal and child morbidity and mortality. The project was funded by the Centre for Disease Control (CDC). HSRC worked with the International Labour Organisation’s (ILO’s) programme on HIV/AIDS and the Working World to assess what initiatives have worked in the workplace within Africa.

A moratorium was in place on filling any new positions, including funded vacancies. The goal was to achieve an optimal researcher to administrative staff ratio of 1:1 in financial year 2015/16. A reduction in administrative positions would appreciably reduce the organisation’s salary bill, while an increase in research staff conversely allowed the HSRC to continue to produce world-class, policy relevant research.

Cabinet endorsed the Minister’s proposal to incorporate AISA into the HSRC in February 2012. Working committees were then set up to drive the process. This included the DST-convened Incorporation Management Committee (IMC), and the HSRC-AISA convened Incorporation Working Group (IWG). AISA was formally incorporated into the HSRC on 1 April 2014. The process was underway to realign research programs of AISA with those of the HSRC.

HSRC Chief Financial Officer, Ms Priya Singh, said HSRC achieved a clean audit opinion and no audit adjustments were processed to the annual financial statements. One audit finding was raised by the Auditor-General and it related to declaration of interests. The HSRC Dashboard remained all green and it was testimony to strong internal controls within the HSRC.

In terms of research income, HSRC achieved 83% of its targets and the Council utilised 100% of its budget allocation. DST provided HSRC with additional funding for the AISA incorporating activities. Due to austerity measures, expenditure decreased slightly against the budgeted amount.  Research revenue amounted to approximately R124 million and R69 million (55%) were from government departments and entities and R50 million (41%) was international funding. The private sector and secondment income accounted for 2% each of the revenue income of R124 million. HSRC continued to grow its income and was operating on a budget of R401 million in the current financial year.

Dr Shisana said the HSRC was a high performing and well governed institution that continued to achieve the overwhelming majority of targets. The Council had good absorptive capacity and continued to become more of a global player in knowledge production and dissemination.

Discussion

The Chairperson said the journals published by HSRC were very impressive.

Ms Maseko asked if the finding for the two financial years was the same. Gauteng launched the first Nelson Mandela Children’s Parliament where very interesting issues came to light and the Department of Women in the Presidency would have the final report on those gatherings. It would be very good if HSRC could take a look at those issues that came out of the Children’s Parliament as areas of possible research. It was important for research institutions to know the important areas for research to inform legislation.  

Ms Singh said it was not the same finding. The finding in the 2012/13 year related to the VAT claimed by a supplier who did not have a VAT registration number and the 2013/14 finding related to enhancements the HSRC could make to the Conflict of Interest Policy which had since been addressed.

The Chairperson commended HSRC for the good work and thanked the Council for the input.

Africa Institute of South Africa 2013/14 Annual Report Presentation

Dr Phindile Lukhele-Olorunju, former Interim Chief Executive Officer of AISA, said AISA’s agenda in the reporting year was to seek solutions for Africa’s developmental challenges. AISA was incorporated into the HSRC on 1 April 2014. AISA’s objectives were the promotion of knowledge and understanding of African affairs through research conducted by leading social scientists in various disciplines and through training and education on African affairs. Other objectives were the collection, processing and dissemination of information on African Affairs, to give effective advice and to facilitate appropriate action in relation to the collective needs, opportunities and challenges of the Continent. Lastly, awareness and consciousness of Arica at grassroots level were promoted. 

Dr Lukhele-Olorunju gave the geographical spread of AISA’s focus on the African Continent and gave an overview of the types of research undertaken in specific focus areas. These areas were governance and security, sustainable development and science and technology. The audited research targets covered journal articles, policy briefs and books. AISA met or exceeded all their research targets except for the Edited Proceedings target of which only 33.3% of the target was met. AISA’s Geographic Information Systems (GIS) and Cartography Unit was a cross cutting unit and was a research laboratory earmarked to provide a kit of tools for data collection, collation and analysis in implementing AISA’s Research Agenda. The portal served as an established online platform for accessing spatial data sets and data services.  Special projects and initiatives included the third African Unity and Renaissance Conference in May 2013, the eighth AISA’s Young Graduate and Scholars Conference (AYGS) in February 2014 and the fifth Archie Majefe Memorial Lecture in March 2014. AYGS attracted over 200 students representing seven African countries and 48 papers were presented. AISA’s Internship Programme trained six interns in the Research Division and four in support divisions. The interns in the Research Division published 2 policy briefs or one journal article each and presented at AYGS. The Publications Division was a conduit through which AISA’s research outputs were disseminated. The division not only published internally generated research outputs but those from external stakeholders such as South African and African universities and from the Diaspora as well. AISA exceeded its target of publishing 6 books and published 10 for the year under review. The publishing targets of African Insight Journals (75%) and Occasional Papers and Monographs (25%) were only partially achieved. 

The Library and Documentation Services Unit was an invaluable source of information on Africa and African affairs. It fulfilled the mandate through collection, processing, value adding and preservation of information materials on Africa, in various formats. The archives stood at 4 706 individual volumes and the total library collection stood at 99 679 volumes. The key performance indicators were expanding the library collection, creating increased awareness of the AISA mandate, products and services and providing efficient and effective services to clients. AISA met all its targets except for the number of books, journals and subscriptions to expand the library collection. The Outreach and International Liaison unit promoted the mandate of AISA to various stakeholders by forming strategic linkages with government, science councils, academic institutions, the diplomatic community, business, media and civil society. AISA met or exceeded all its targets that spoke to increasing the knowledge resources on African Affairs for stakeholders to access. 

Ms Elsie Maritz, former Chief Financial Officer of AISA, said AISA obtained an unqualified audit report. With the pending incorporation into HSRC, AISA had to undergo additional audits at year end and it made it very difficult on the staff complement. In the prior year there had been no findings on assets and eight of the audit findings on assets related to the incorporation requirements. The two audit findings in terms of internal control measures related to a tax certificate and material misstatements on the re-evaluation of AISA’s assets. AISA ended the financial year with a surplus of R2 million and an accumulated surplus of approximately R13 million. It was agreed that when the incorporation commenced that the accumulated surplus funds would be retained to cover the VAT shortfall. AISA’s expenditure amounted to approximately R36 million against a budget of R39.4 million. The variance was as a result of frozen posts pending the incorporation and the fact that a permanent chief executive officer was never appointed. At the date of incorporation AISA was solvent.

Discussion

The Chairperson said a merger was very difficult situation because it involved people’s jobs and finances and he commended AISA on how the merger was approached.

Ms Maseko asked if the Khoisan was included in the indigenous publications and if the study on Mamelodi could be sent to the Committee. She asked how AISA felt about the merger and whether they would be able to sustain the programmes.

Dr Lukhele-Olorunju said the merger had not been easy and affected the employees and management of AISA greatly.  It was in the stabilising phase and hopefully all the programmes would be able to continue.  The African Continent was already expecting the services AISA had delivered and it was important that these programmes be maintained.

AISA Director: Publications, Mr Solani Ngobeni said the publications had always been sent to the Committee in the past and this practice would continue.

Mr Mathale asked for clarification on the missing tax clearance certificate.

Ms Maritz said the Auditor-General requested all the tax clearance certificates and there was one certificate they felt looked fraudulent. The certificate was taken to the South African Revenue Services (SARS) for verification and SARS confirmed it was not issued by them. An investigation was launched and the service provider participated. It was confirmed then that the service provider in question had two valid tax clearance certificates, one for ‘good standing’ and one for ‘tenders’. Up until today it had not been established how the certificate ended in the file and it was confirmed by SARS that the service provider had a valid tax certificate issued long before engagement with AISA and at the time the contract was awarded to the service provider.  The irregular expenditure mainly related to the issue of that one tax clearance certificate. Subsequently, AISA took all their tax clearance certificates for verification.

The Chairperson thanked AISA and apologised that the meeting took as long as it did.

The meeting was adjourned.

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