South African Weather Service 2009/10 Annual Report, Election of new Committee Chairperson

Water and Sanitation

23 November 2010
Chairperson: Adv J de Lange (ANC)
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Meeting Summary

Adv Johnny de Lange was elected as the new Committee Chairperson. The Committee discussed the delegation that had been appointed for the trip to Cancun, and noted its concern that the new delegation, comprising of the Chairpersons of other committees, had not been intimately involved in work on climate change, as had the Members of the Portfolio Committee on Water and Environmental Affairs, who had, in addition, made preparations for that visit before being informed of the change in plans. The Chairperson said that these concerns would be addressed in the new year.

The South African Weather Service (SAWS) gave a presentation, by teleconference, on its 2009/10 Annual Report, noting that it was celebrating 150 years of work. It had received a government grant of R240 million for the extension of the Radar Network Project. It was working on two major corporate social investment projects, one involving the upgrade of schools (with other partners) in Mthatha, and the other involving the harvesting of water from fog for schools and communities in Venda. SAWS had received an award for gender empowerment, had published two books, and was proud of achieving an unqualified audit report with no matters of emphasis. Its key strategic programmes had included a Climate Change and Variability Programme, addressing long-range forecasting, a flash flood guidance system and a Demonstration Project on Severe Weather Forecasting, as well as air quality information systems. Challenges were named as the need to ensure sustainability, and to recruit and retain skilled scientists. Fewer bursaries had been offered in the 2009/10 year, due to the economic downturn, but SAWS maintained ten interns. A report on the financial statements indicated that the Auditor-General had commented that SAWS could improve upon asset management, management of contracts, and IT security. Although SAWS had spent R139 million out of the government grant, on radar updates, this was not easily seen because of the changes in accounting practices. There had been a decline in aviation revenue, but other commercial revenue had grown. SAWS was making conscious efforts to decrease its expenditure, but had a 137% in property, plant and equipment, due to three radars being completed.    

Members asked for further details about the revenue, asking whether the SAWS Act permitted commercial revenue, and questioning whether the projects had been discussed with National Treasury, and noting that SAWS had been fortunate to retain its government grants but must consider other revenue streams to ensure sustainability. Members asked about projects in other countries, and asked if these offered a real benefit to SAWS and South Africa, and whether they were funded by South African taxpayers. Members were concerned that issues raised in 2006/07 about contradictions between the Public Finance Management Act and the SAWS Act had still not been addressed, and called for a written report on this from both SAWS and the Department, by 18 January 2011. Members were also interested in the awareness campaigns, how the bursaries were publicised, whether previously disadvantaged communities were made aware of them, and were being encouraged to enter this sector, the gender balance, and how SAWS was benchmarked against other weather services worldwide. Although some questions were answered, SAWS was asked to provide a further written report, and to follow up questions around the communication with the Committee, via the Committee Secretariat.


Meeting report

Election of new Committee Chairperson
Nominations for a new Committee Chairperson were called for.

Mr P Mathebe (ANC) nominated Adv Johnny de Lange, and this was seconded by Mr J Skosana (ANC). Since no other nominations were made, the Committee unanimously elected Adv de Lange as the new Committee Chairperson.

Adv de Lange thanked Members, asking for their assistance while he learned the issues. He regarded this as a most important committee, especially the issues of water, and promised to learn the issues quickly, and to work hard and in a cooperative manner. He urged problems to be discussed openly. He noted that there had been a number of changes to the Committee, and he would compile a programme for the Committee, which would meet again on 18 January.

Cancun visit discussions
Adv de Lange noted that he, Mr G Morgan (DA), Mr P Mathebe (ANC) and Ms H Ndude (COPE) would attend the tour to Cancun and he had been notified that the Presidency wished to brief him and Mr M Johnson (ANC), the Chairperson of the Portfolio Committee on Agriculture, Forestry and Fisheries, prior to their departure on 25 November.

Ms H Ndude (COPE) congratulated and welcomed the new Chairperson, saying that she was looking forward to working with him. She emphasised that the Committee Members had worked very well together in the past, putting aside party differences to deal in depth with the real challenges. She was sorry that the leader of the delegation that would discuss climate change and visit Cancun was not a member of this Committee, noting that water and environmental affairs were inextricably linked to climate change. She was also sorry that the Content Advisor for the Committee, who was well versed on these issues, was not included in the delegation. She said that the world was looking to South Africa to lead the Continent on these issues, and all delegates should have an excellent understanding of all issues in order to make significant input and impact.

Adv de Lange said that there were many problems in the lead up to Cancun. However, all Members who would attend from this Committee would ensure that the most important issues were raised, and hopefully matters would be better organised in future.

Mr P Mathebe (ANC) congratulated the new Chairperson, on behalf of the ANC, and assured him of their support. He agreed that issues within this Committee were not dealt with in terms of party affiliations. He agreed with the concerns that Ms Ndude raised, and urged that they must be addressed next year, in particular that this Committee should lead where the issues were of direct concern to it. He noted that initially it was proposed that the delegation to Cancun should be comprised of all Members of this Committee, but this was subsequently altered.

The Chairperson noted this had been organised by the Office of the Deputy Speaker.

Mr G Morgan (DA) added his congratulations on the appointment of the new Chairperson. He noted that the Committee had a huge portfolio, overseeing the two Departments, one Minister, and 24 entities, with a substantial workload. Taking into consideration the broad range of the issues, he noted that it was fortunate that many of the environmental entities were being well run, but this was less apparent in the water entities, which required constant care and guidance. He said that he looked forward to discussing issues with the new Chairperson during the Cancun trip. Many issues that would be dealt with shortly would speak to climate change, in the lead up to the Conference of Parties (COP) in Durban in 2011.

Ms P Bhengu (ANC) asked for more information about the Cancun delegation, saying that she had spent time making applications and preparations before being informed that she would not attend.

The Chairperson said that many of the developments had taken place at the last minute. He would forward the documentation that he had received. It was intended that the delegation should consist of the Chairpersons of the Portfolio Committees on Water and Environmental Affairs, Agriculture, Forestry and Fisheries, Energy, Rural Development and Land Reform, and Science and Technology. Only in the previous week had it been decided that three Members from the opposition parties, and two Members from the National Council of Provinces (NCOP) would also attend. He had not been aware that other arrangements had been made earlier, but would engage on that.

Ms J Manganye (ANC) added her congratulations, also noted that this Committee had two portfolios, and voiced her disappointment that not all Committee Members were able to attend the trip to learn about the issues, but asked if they would receive a full briefing from those who did attend, including those who would not be providing oversight through this Committee, but who were travelling at the expense of this Committee.

The Chairperson said these issues would be tackled in the new year.

Ms Ndude said that she could understand the difficult situation in which this Chairperson was placed, but said that although climate change was a cross-cutting issue, it was this Committee that was essentially doing the work on the issue, which was why it would be fair for the majority of those attending the trip to be drawn from this Committee. This was something that the Chairperson should address. It should be recognised that work on climate change must be done jointly in future.

Mr J Skosana (ANC) added his congratulations to the new Chairperson, and said he looked forward to working with him to address the relevant issues. He suggested that all Portfolio Committees that worked across climate change issues should be asked, in the following year, to present their relevant issues to this Committee, to enable better coordination and work.

The Chairperson said this was a good idea, but these decisions needed to be taken by the Speaker. When delegations were put together, there should be approaches to the ANC Chief Whip and then the Speaker.  There needed to be a process of engagement.

Mr Mathebe said that the initial memorandum had included all the Members of this Committee. However, the Speaker’s Office had indicated, in correspondence, that climate change was not completely embedded in any one Committee, although this Committee had been addressing it constantly. He believed that things that this Committee was driving should remain in the Committee.

South African Weather Service (SAWS) 2009/10 Annual Report briefing:
The Chairperson noted that the South African Weather Service (SAWS) would brief the Committee on its 2009/10 Annual Report, by way of a teleconference session. He asked that the briefing address should be selective, and should concentrate in particular on any areas of difficulty and financial issues.

Dr Linda Makuleni, Chief Executive Officer, South African Weather Service, introduced the team. She noted that SAWS had started in 1860 and was now celebrating its 150th year. She screened a short video that tracked the sector progress, and thanked government and all shareholders for their participation.

Dr Makuleni noted that in the 2009/10 year, government had given R240 million to upgrade the Radar Network Project, which had been unveiled on 29 March by the Minister. A number of radars had been commissioned. There were some problems in regard to the positioning of one radar system, where SAWS was to pay the community for leasing land in Mthatha. However, there had been problems establishing a community trust fund, and the community had opted to use the money to upgrade various local schools, by providing chairs, toilets and training facilities. This was currently under way, and SAWS was working with Eskom and other communities. Another community project involved harvesting water from fog, which was then used by the schools and surrounding communities. SAWS had decided to take over the Fognet Project in Venda, in partnership with the University of Pretoria, as part of its corporate social investment portfolio. SAWS had some of its students at the University of Pretoria working on the project. It was looking for further funders to extend the project, and had already held some discussions with the Eskom Foundation, which was interested in the project.

She announced that SAWS had won the award for being the top parastatal in terms of gender empowerment. She noted that SAWS had also launched a book that linked indigenous knowledge to its functions, entitled “Rainbows in the mist: indigenous weather knowledge, belief and folklore in South Africa”. A further publication “On the forefront of weather” was a good opportunity to collate information for  future generations.

She outlined the SAWS strategic goals for 2009/10. SAWS must ensure continued relevancy of meteorological products and services, in compliance with applicable regulatory frameworks, and she indicated that this included issues related to climate change. It was also important for it to ensure effective management of stakeholder relations. It must fully address short-term viability and long term sustainability of SAWS revenue and other resourcing requirements, ensure business integration and organisational effectiveness of SAWS, and create adequate human capital capacity to enhance SAWS’s performance.

She then outlined the five key strategic programmes for 2009/2010. A Climate Change and Variability programme, addressing long-range forecasting and a South African flash flood guidance system, had been launched, as well as a Severe Weather forecasting demonstration project, the Global Atmospheric Watch,  and the South Africa Air Quality Information System.

Dr Makuleni then discussed the short term viability and long term financial sustainability. SAWS was well aware that 65% of its funding came from a government grant. It had put effort into cost-cutting initiatives. She indicated that SAWS had exceeded its budget, and its target, for non regulated commercial activities, although the regulated aviation commercial activities was 14% below budget. Cost cutting initiatives included decreasing administrative and other operational expenses. Inventory management had been reduced by 18%.

Dr Makuleni pointed out that in the past there had been problems with skilled scientists leaving the organisation. SAWS now had a scarce and critical skills transfer programme, a bursary scheme, a learnership programme, and collaborations with institutes of higher learning.

She noted that there had been infrastructure modernisation, such as the Radar Network Upgrade, with SAWS having capitalised R137 million from the R240 million grant.

She also noted the emphasis on total quality management. She cited some of the problematic areas, which included the need to ensure the sustainability of the organisation, in which respect certain targets had not been reached, as well as the need to attract and retain scientists. SAWS employed 370 people, 71% of whom were previously disadvantaged. The bursary scheme was a key performance area, but 42 bursaries were offered in this year, when compared to the 64 of the previous financial year, as a result of the economic downturn. SAWS maintained an average of ten interns.

Dr Makuleni noted that SAWS had achieved an unqualified audit, with no matters of emphasis.

Mr Slingsby Mda, Chief Financial Officer, SAWS, said that the auditors had commented on certain areas on which SAWS could improve. These included asset management, management of contracts and IT security. He noted that the new standard of Generally Recognised Accounting Practices (GRAP23) obscured the spending of the R139 million. This “perceived surplus” was the result of a change in accounting policy. He noted that SAWS had some vacant land opposite its offices, which its was trying to develop and the value of this had to be reduced by R14 million, partially because it could be viewed as protected land. SAWS was conducting an Environmental Impact Assessment (EIA) on the site.

Mr Mda noted that the government grant had been growing 6.8%, year on year, over the past four years. Aviation revenue had been dropping, owing to lower traffic volumes. There had been an increase in other commercial revenue, which had grown by 18% in the 2009/10 financial year. Employee costs were the highest expenditure, at 59%, due to the need for skilled labour. However, other expenditure had decreased by 2.5% year on year. Given shortfalls on aviation, SAWS had been looking at ways to decrease expenses, with great success. It had been trying to reduce its inventory, which had decreased by 18%, and operating expenditure had been decreased by 4.1% by reducing the foreign and local travel, whilst there was R2.6 million decreased expenditure on equipment, a decrease of R431 000 on research costs, and a 71% decrease on computer expenses.

Mr Mda then outlined a 137% increase in property, plant and equipment, due to the three radars completed at a cost of R137 million, a 30% decrease in investment property due to the re-evaluation of the land, and an 18% decrease in inventory.

Discussion
Mr Mathebe asked about the revenue resources of SAWS, pointing out that government grants contributed more than half of its income.

Mr Mathebe asked what benefits South Africa and SAWS were obtaining from providing services to South African Development Community (SADC) countries, and asked if this was being done at the expense of the South African taxpayers.

Mr Mnikeli Ndabambi, Senior Manager: Forecasting, SAWS, noted that climate change, and its impact, were a reality through the world, and the latest predictions were that the severity of weather would increase in time. The direct benefit of the Demonstration Project would be capacity building and free training, as global centres were giving SAWS technology that it would otherwise have been unable to obtain. He noted that it was expensive to send people overseas to learn about climate change. He added that the flash flood guidance system was radar based, but there were gaps where there was not radar, and so SAWS was working on developing satellite based guidance systems, from which it would benefit freely.

Mr Mathebe said that this still did not provide a detailed response on the benefits provided by working in SADC countries, although it had spoken of gaining experience. His enquiry had not been directed to the capacity building, but to the financial cost of this work, and whether this was borne by South African tax payers.

The Chairperson asked if SAWS charged for these services, or obtained any reimbursement.

Dr Makuleni noted that the SAWS Act placed a responsibility on SAWS to be a regional weather service. She pointed out that weather knew no boundaries. These regional services were part of SAWS’s public service, and were included in its budgeting. She would provide full details on this during the next presentation.

Mr Mathebe asked how SAWS disseminated information on the bursary schemes to the most vulnerable rural communities.

Mr Mathebe noted questioned whether the Committee was invited to any of the events linked to the 150 year celebration of SAWS.

Dr Makuleni said that SAWS did send invitations to members of the Portfolio Committee, and noted that Mr Morgan had apologised for not being able to attend.

The Chairperson asked if the invitations were sent individually or through the Committee Secretariat

Dr Makuleni said the invitations were sent individually and through the Secretariat.

The Chairperson noted that neither the Secretariat, nor some other Members, had received these invitations, and said that the communication issue must be clarified, pointing out that formal communication always should be done through the Secretariat.

Mr Morgan asked about amendments that were required to the SAWS Act (the Act), pointing out that he had asked questions on this also during the previous year. The Auditor-General (AG) had noted that there was a contradiction between Section 17 of the Act and Section 49 of the Public Finance Management Act (PFMA) and he asked why no amendments had been proposed for the SAWS Act. He pointed out that this issue had already been pointed out in the 2006/07 audit, and asked why no progress had been made.

Dr Makuleni noted that the Board of SAWS had looked at these issues in 2007, as also at the suggested transition of SAWS from a Directorate to an Agency. Both these matters were to be reviewed, and SAWS had indicated to the shareholder that it wanted a review. The shareholders had also wanted to extend the mandate of SAWS, and meetings were held between the SAWS and Department of Water and Environmental Affairs’ (the Department) legal teams, to look at the changes required in terms of the Act. These changes had been presented to the Board, whose comments were forwarded to the Department. The Department’s legal team must now take the matter forward.

Mr Morgan said that SAWS had been fortunate that the government grants had increased each year, whilst other entities had their grants cut. However, he thought that SAWS should not rely on this happening every year, and he pointed out that sources of revenue on other commercial activities remained very low, so he wanted to know how this could be increased, to address SAWS’s sustainability. He asked whether it had engaged with National Treasury on the other schemes, and whether SAWS was empowered by the Act to charge for commercial activities.

Dr Makuleni said that there had been debates on how much the Government should be contributing, and the funding model. SAWS and the Department had held discussions and had been engaging in benchmarking exercises with other weather services throughout the world. In United States of America, the weather service was 100% funded by government, which regarded it as one of the key strategic institutions in providing information for the public good. In most of Europe, government funding amounted to close to 70%, so the benchmarking exercise indicated that the South African Weather Service was more or less on par with the rest of the world. She added that benchmarking on commercial service indicated that SAWS was doing a little more than other entities. She noted that commercialising all the infrastructure would be a risk. She noted that the increase of its mandate on equality had resulted in it being granted more than other entities. In respect of the activity-based costing, she said that more than 60% of SAWS activities were classed as for the public good. The commercial ventures were growing, but she pointed out that it had started on these from a zero base.

Mr GC Schulze, General Manager: Projects, SAWS, noted that Mr Morgan had been correct in questioning whether there had been engagement with National Treasury, since National Treasury also questioned why SAWS had not consulted it on the projects, and SAWS had undertaken to do so in future. A pilot project had been held with Future Foresight (who had since changed its name to Weather Intelligence Systems). This was one of SAWS’s most successful and promising commercial ventures, and would practically double its commercial income.

Dr Makuleni added that when SAWS was looking for partners in the market, it had not projected sales, but had realised the potential. National Treasury had since been informed of the contracts with Future Foresight. She confirmed that the SAWS Act did permit SAWS to generate income from commercial activity.

Mr Morgan noted that in the previous year there had been R1.1 million irregular expenditure, for which an employee had been disciplined and dismissed, but that this matter had then been referred to the Commission on Conciliation, Mediation and Arbitration (CCMA). He asked what had happened since then, and whether there had been an attempt to recover the money.

Mr Lindani Gcwensa, General Manager: Human Capital Management, noted that SAWS itself had identified the irregular expenditure and informed the Auditor-General of this, and then took the process further to try to create a precedent. SAWS had instituted a disciplinary hearing, before qualified practitioners from outside the organisation. The relevant person had abandoned his engagement in the process, and was found guilty in absentia and the matter was then referred to the CCMA, which decided the issue in around September. The procedures were found to have been fair, but there was a ruling that the finding was not fair, because the Commissioner did not exonerate certain actions, because the relevant person claimed to have taken advice from the former Chief Financial Officer. The matter was then taken on review. SAWS’s legal advisors had suggested that correspondence be addressed to the individual concerned, and the person who resigned, indicating that steps would be taken to recover the money. The figure involved may escalate due to legal expenses.

Mr Skosana asked about the staff profile, noting that no breakdown was provided of the different categories such as women or youth. He thought that SAWS had some way to go on gender, and said that this issue should be addressed.

Mr Gcwensa noted the remarks in the presentation on the staff breakdown. SAWS consciously implemented the skills transfer to new scientists, partially to ensure that there were no punitive repercussions.

Dr Makuleni noted that 24% of staff were previously disadvantaged females and 9.7% were white females, which was around 33.7%. Gender balance was a challenge in all science-based institutions, but SAWS was placing more emphasis on this through bursary schemes.

Mr Gcwensa added that SAWS had taken a conscious decision to ensure that previously disadvantaged communities were given the opportunity to participate in bursaries and to practise in the sector. SAWS had advertised its bursaries in media such as the Sowetan, and over 1 000 applications were received from blacks. Most of the bursaries were awarded to youth under the age of 35. The gender balance in bursary awards was improved, as shown in the presentation. All internships were taken by previously disadvantaged individuals. In the past financial year, the University of Zululand had received two bursaries, Nelson Mandela Metropolitan University had received one, the University of Pretoria had received 21, and Wits had received two. SAWS did attempt to address the issues raised by the Committee.

Mr Skosana thought it was problematic that the grant exceeded the income by so much.

Mr Skosana asked for clarity on the  funds unaccounted for, in the financial report.

Mr Skosana noted that most of the information was privatised and wondered how SAWS would make the information more accessible to the public, particularly in the areas of job creation, or operations.

Mr Skosana wondered whether the development of schools had been done according to policy, or whether this was an accidental spin-off.

Dr Makuleni said that, in respect of the Highbury community project, it was not the core business of SAWS to build schools, but because SAWS owed the community about R200 000 in respect of the lease of the land, it complied with the community’s request for help with the building of schools, and had therefore looked for partners to assist it. It regarded this as part of its corporate social investment activities.

Ms Ndude congratulated SAWS on its 150 years of existence, and commended the progress made. She noted that recently four boys had died in Flagstaff as a result of a weather-related incident, and therefore asked if any awareness programmes were being run in communities on when lightning could be expected, and what should be done to ensure the safety of communities.

Mr Ndabambi said it was costly to hold workshops in each area. The strategy was to develop relationships with the media. SAWS had worked with radio stations, on educational interviews and E-TV was busy running advertisements for SAWS. It believed that it had to act in a more integrated manner, to reach communities.

Ms Ndude commended that government entities were tending to try to rely on government grants, which meant that they did little to build alternative income streams.

Ms Ndude also asked again about the real benefits  or returns from their work throughout SADC.

The Chairperson said that although he did not know a great deal about the work, he was quite impressed with the presentation. The Committee would be looking more closely at matters in the coming year. He requested a written report on services provided to other countries, and the financial implications, as well as details on the two income streams of aviation and the commercial grant, besides the government grant. He also requested a follow up on the three issues that were cited by the Auditor General as requiring better control, asking for details of what exactly was being done to address these issues and correct them. He also wanted details of the disciplinary issues raised. He also wished SAWS to speak to the Secretariat around the breakdown in communications, which should be done within the following week. Finally, he wanted a joint report, before 18 January 2011, from SAWS and the Department, about what was being done to amend the Act, and when this amendment was expected. He pointed out that three years was far too long to hold discussions around the matters. He hoped that this amendment could be presented in the first quarter of 2011.

The meeting was adjourned.



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