Meeting SummaryThe Department of Science and Technology (DST) indicated that the adjustments to the Medium Term Budget Policy Statement had not yet been confirmed by National Treasury and that the report should be viewed from a preliminary perspective as DST was still in the process of finalising the report.
DST had spent 71% of the budget and by year-end the budget was expected to be fully spent with the achievement of most targets. DST had been appropriated R4.404 billion at the beginning of the financial year and during the course of the year, several adjustments had been made. The total budget was currently R4.407 billion.
The budget for Administration (Programme 1) had increased by R4.285 million. This adjustment was due to an additional R2.4 million for salaries to cover inflationary adjustments; movement of R1.2 million from Socio-Economic Partnerships in Programme 5 to cover Ministerial Participation projects in Programme 1; and R700 000 from Research, Development & Innovation in Programme 2 for the NACI National Biotech Advisory Committee in Programme 1.
On non-financial mid-year performance, 70% of targets had been achieved and DST was confident that most of the targets would be achieved.
Members felt that DST’s approach, that “DST’s internal processes were confident that targets would be met”, was problematic. The presentation had not enabled Members to grasp why targets were not met. Targets appeared to involve both productive processes, such as building a pipeline, which should have time-lines; and creative processes which should not have time-lines as such projects could be scrapped after nine months. They suggested that it would be helpful to explain, in tangible terms, what the reasons were for not meeting targets. DST agreed to submit a detailed report which would fully account for the concerns highlighted by Members.
Members asked how DST could be confident of achieving ‘on-track’ targets; how many targets were set lower than those set the previous year; what the meaning was of Ministerial Participation projects; what the reasons were for the Research, Development & Innovation programme expenditure being only 9% of the budget in the 2010/11 year; if the budget for compensation of employees included DST salaries; and how the extra 9.5% of the budget allocated by the Minister of Finance would be spent.
Members also asked why the South African National Space Agency (SANSA) allocation of R93 million had increased to R106 million; why only R9.6 million of foreign funds out of the projected R199.3 million had been leveraged; and if the foreign funding that was misaligned with South Africa’s financial year could be rolled over to the following year.
Mr Thulani Mavuso, DST Chief Operations Officer, indicated at the outset of his presentation that the adjustments to the Medium Term Budget Policy Statement had not yet been confirmed by National Treasury. These would be presented to the Committee once they had been cleared by National Treasury, but they would also be included in the presentation for the sake of the media.
Ms Malekgoloane Malepane, DST Chief Financial Officer, said that DST had been appropriated R4.404 billion at the beginning of the financial year to meet its objectives. During the course of the year, several adjustments had been made and the total budget was currently R4.407 billion.
Administration (Programme 1) had increased its budget by R4.285 million. This adjustment was due to an additional R2.4 million for salaries to cover inflationary adjustments; R1.2 million virement from Socio-Economic Partnerships in Programme 5 to cover Ministerial Participation projects; and R700 000 for the NACI National Biotech Advisory Committee which was released from Research, Development & Innovation in Programme 2.
In analysis of financial performance per programme, the average percentage spending of the budget was 56%, which was 6% above the expected 50% for mid year expenditure. This was an improvement when compared to the previous year.
Percentage spending per economic classification was 44% for compensation to employees, 40% for goods and services, 59% for transfers and 89% for payment for capital assets. Payments for capital assets was within target as DST would not require much more spending in that area.
DST had allocated 92% of the budget to transfers, 5% to salaries and 3% to administration. In the 2011/12 financial year, DST had improved on mid-year actual expenditure (56%) compared to the 2010/11 (41%). However, at the end of October 2011, DST had spent R3.1 billion, which increased spending to 71% of the budget. By the end of the year, the budget was expected to be fully spent with achievement of most targets.
Mr David Mmakola, DST Chief Director: Strategy and Planning, said that he would keep the update on the non-financial performance as brief as possible, as it was a follow-on of the first quarterly report. DST was confident that most of the targets would be achieved. 70% of mid-year targets had been achieved compared to the previous year of 60%. The reason that currently many targets were only partially achieved was that plans were still being put in place to address the challenges of the previous financial year. This report should be viewed from a preliminary perspective as DST was still in the process of finalising the report, which was prepared from the 20th of the month following the end of a quarter and information was still outstanding. It took two to three weeks to review, verify and follow-up on information from reports from public entities.
Ms M Shinn (DA) said that based on the Minister of Finance’s Budget Policy Statement speech, an extra 9.5% per year would be allocated to DST to support business innovation and job creation. She asked what the extra 9.5% of the budget would be spent on.
Mr Mavuso replied that a variety of initiatives had been put in place to be funded by the extra 9.5% on the baseline budget, one of which was the Technology Assistance Package programme.
Ms Shinn commented that performance indicators showed that for patents, technology development, joint projects and households benefiting, zero of the projected targets had been met.
Mr P Smith (IFP) noted that DST was confident that most of the non-financial targets would be met by year-end. While many targets were indicated as currently on-track, many of them were not near 50% of their target for year end. For example, on the foreign Science and Technology Innovation funds, DST had leveraged only R54.4 million of R285 million; the amount of South African and foreign funds spent on science and technology-based socio-economic development in Africa was R16.3 million of the targeted R45 million; and there were only 578 of the projected 3 380 foreign participants in global knowledge and Science and Technology Innovation networks. He asked how DST could be confident of achieving these ‘on-track’ targets.
Ms P Mocumi (ANC) said that not one of the 13 Adjusted Estimates of National Expenditure targets for Joint Department Science and Technology Projects had been met. She asked how DST would address achieving each of those targets.
Mr Mmakola explained that most targets were once-off targets and did not change from quarter to quarter. Therefore, where it may appear that nothing was happening, planning was indeed taking place. For example, patent approval required verification, screening of value of an idea, etc. DST was also in a transition process with regard to setting of targets and the way in which they would be reported. New regulations from National Treasury required that targets had to be translated into quarterly targets. Milestones for projects would also be implemented to better measure performance against targets. DST also had internal processes to interrogate whether targets were being achieved so that it could be confident that targets would be achieved. Historical information was used to establish time frames, but some programmes were a challenge and it was not always possible to know, such as with commercialisation of patents, when a target would be achieved.
Ms Shinn asked what the meaning was of Ministerial Participation projects.
Mr Mavuso replied that Ministerial Participation projects were a SADC initiative under the Socio-Economic Partnership programme (Programme 5) and funding was for launching the initiatives and partnering events with the communities. Currently they were operating in the
Ms Shinn asked why the SANSA allocation of R93 million had increased to R106 million.
Mr Mmakola replied that DST inherited satellite institutions with programmes. With the National Space Programme, the allocated budget did not cover the responsibility of implementing that programme. During the course of the year, DST had endeavored to secure additional funding.
Ms Shinn commented that it was unclear whether inadequate funding was a DST or National Treasury problem. After the bruising experience of the Technology Innovation Agency (TIA), where a complex integration project proceeded without the funding to do so, she expected that the same problem would not occur with the launch of SANSA.
Mr Mavuso replied that the point was noted and DST was aware of the responsibility to secure funding to launch a project successfully. Unfortunately SANSA was launched back-to-back with TIA and the lessons learned from TIA, in terms of process of securing funding from National Treasury, would come in handy for entities launched in future.
Ms Shinn asked why the appropriated R27 million for Indigenous Knowledge Systems (IKS) in the Human Capital programme had been reduced to R17 million.
Ms Malepane replied that this was an adjustment that had been effected within Programme 4. The money had been given to the National Research Foundation for Programme 4 and had allocated R17 million in accordance with IKS in Programme 4. The movement of funds did not change the budget for Programme 4 and the remainder of funds would be used for skills elsewhere within the same programme.
Ms Shinn asked why the budget for Technology Innovation had almost doubled.
Ms Malepane replied that for the same reason, due to adjustments within the programme, the Technology Innovation budget had increased, but the programme budget had remained the same.
Ms Shinn asked why only R9.6 million of foreign funds out of the projected R199.3 million had been leveraged.
Mr Mavuso replied that the issue around foreign funds leverage was related to misalignment of
Mr Smith asked if there were different six month targets per programme, or if 50% was the straight line target across the board.
Mr Mavuso replied that each programme had its individual six month target.
Mr Smith asked what the reasons were for the Research, Development & Innovation actual expenditure being only 9% of the budget in the previous year.
Ms Malepane replied that when TIA was initiated, funding from National Treasury was delayed. The line items created for TIA were such that targets would indeed be achieved.
Ms L Jacobus (ANC) asked for clarification on what was meant by ‘compensation of employees’ – if it included salaries, stipends and travel allowances.
Mr Mavuso replied that the R225 million budget for compensation of employees included DST salaries for the financial year.
The Chairperson agreed with Members’ comments that salaries and compensation of employees were conceptually different.
Mr Mavuso took note of the difference between the two as outlined by Members.
Ms Mocumi said that she felt that the responses to the questions on targets had been evasive. Given that the content was technical in nature, she expected more tangible responses so that the Committee could better understand the reasons for DST not achieving targets.
Mr Smith asked if the foreign funding that was misaligned with the financial year could be pro-rated or rolled over to contribute to the initial purpose for which it was allocated in the following year.
Mr Mavuso replied that indeed the funds were rolled over to the following financial year and DST was negotiating the mandate agreement of the foreign country to ensure that the money allocated served the purpose for which it was intended.
Mr Smith said it was clear that setting of targets for some programmes was particularly complex. In the past, the Committee had cautioned DST to set realistic targets and it should not set targets too high - the Committee would lambaste them for not meeting their targets. He asked how many targets were set lower than those set the previous year.
Mr Mavuso replied that setting of targets with time-frames for some programmes was a risky business, but for others it was quite simple. For Programme 4, such as support of students, it was easy to work with institutions and set targets.
Mr Mmakola added that although there had been progress on setting targets, there was still room for improvement. When it came to issues outside of DST’s control, such as establishment of companies, patents and commercialisation, targets could be delayed. Three year historical perspectives on programmes were analysed before the planning processes began and if there was variance against the historical analysis, strong motivation was required before the plan could proceed.
The Chairperson commented that it would be helpful to explain in logical terms, the shortfalls in the analysis so as to better understand progress, challenges and why zero targets were achieved for some programmes. It would seem logical that where DST was not in control of the outcome of a project, a target should not be set and DST would then not be held accountable.
Ms M Dunjwa (ANC) commented that the responses to questions on targets took for granted that Members understood scientific techno jargon. She requested that going forward, DST emphasised assisting Members with understanding of the issues and challenges around meeting of targets.
Mr Mavuso extended sincere apologies for coming across as not assisting the Committee. However, the discussion was welcome as it assisted DST in planning remedial action in advance where it was clear that financial targets were not achieved.
The Chairperson emphasised that the challenges around targets should be explained logically.
Ms Shinn commented that the creative process of science may entail devoting nine months to a project which could then be scrapped. She suggested that creative processes should not be assigned a time-line and should be reported as such. Targets involving productive processes such as building a pipeline could have time-lines. Presentation of such detail would be helpful to the Committee.
Mr Smith added that the approach that “internal processes were confident that targets would be met” was problematic. The Committee was blind to the real picture.
Mr Mavuso apologised again and said that they would be more than happy to return to the Committee the following week to explain in detail the extensive nature of the targets for each programme.
The Chairperson replied that the Committee was committed to a schedule but that DST could compile a report for the Committee.
Mr Mmakola added that detailed information had been used for internal consumption and that the presentation was a snap-shot of that information. Once the final report had been compiled and presented at EXCO, they would be happy to share with the Committee, line by line, detail on the targets, assumptions and challenges.
The Chairperson ruled that DST would submit a detailed report which would fully account for the concerns highlighted by Members.
The meeting was adjourned.
- We don't have attendance info for this committee meeting
Download as PDF
You can download this page as a PDF using your browser's print functionality. Click on the "Print" button below and select the "PDF" option under destinations/printers.
See detailed instructions for your browser here.