Human Sciences Research Council, Africa Institute for SA; National Advisory Council on Innovation 2011/12 Annual Reports; Department of Science & Technology audit

Meeting report

Auditor-General South Africa (AGSA) on Department of Science and Technology 2011/12 audit
Mr Musa Hlongwa, AGSA Business Executive, presented the audit outcomes for the Department of Science and Technology (DST) and its entities: the Human Sciences Research Council (HSRC), Africa Institute for South Africa (ASIA), South Africa National Space Agency (SANSA), Technology Innovation Agency (TIA), National Research Foundation (NRF), the Council for Scientific and Industrial Research (CSIR) and Academy of Science of South Africa (ASSAF). The presentation outlined the key focus areas: supply chain management, predetermined objectives, human resources, information technology controls, material errors/omissions in the annual financial statements submitted for audit, the financial health status as well as other compliance matters (see document for results). AGSA stated that the Minister had committed herself to follow up on the performance information findings for the Department and ensure that IT controls are implemented (policies and procedures have been approved and a Chief Information Officer has already been appointed). In response, AGSA had committed itself to assist with the arrangement of a workshop on predetermined objectives to be presented by National Treasury. It also showed other matters of interest such as fruitless and wasteful expenditure and irregular expenditure by the Department and its entities.

Discussion
The Chairperson said that the report was not user friendly – a sentiment that was echoed by most of the members.

Private auditing
Mr P Smith (IFP) asked why there were three organisations, termed a section 4(3), that were not audited by the Auditor-General but privately despite the fact that the audit done on them was according to AGSA standards and methodology. However they were unable to be audited for the purposes of an audit opinion. Could this be explained?

Mr Musa Hlongwa replied the three organisations had never been audited by the Auditor-General’s office. The termed section 4(3) was not an ‘outsourced type of situation’ like the CSIR where outside auditors audited on their behalf with specific instructions. Traditionally there were audits which had never been audited by the Auditor-General but in terms of the Constitution, the Auditor-General was the auditor for all departments and public entities falling under those departments. The Auditor-General was in the process of getting those audits back as they build the skills and make sure that everything was in place to audit those entities. AGSA was currently in the process of regularising the way in which entities were audited. They still did not get 100% of the information as they would have, had they audited the entities themselves.

Mr Smith said that this would suggest that they did not follow the Auditor-General’s methodology but in fact followed their own methodology. The AGSA was thus trying to bring it in line with methodology that was useful to them.

The Chairperson said he did not feel the reason given was excusable. He did not understand how the AGSA could only begin to realise now that the entities needed to be audited and try to correct the process. The AGSA had allowed the situation to violate the Constitution for 18 years. This was also surprising as the Committee had not known there were some entities that were exempted and others that were not, this was unfair. He asked for an explanation of this.

Mr Hlongwa replied the AGSA was facing the situation the Chairperson was describing and gradually taking those audits back. They had never in been audited by the Auditor-General and section 4.3 allowed for the Auditor-General to decide to not audit. The Auditor-General was empowered in terms of the Public Audit Act to opt out on audit certain entities. The AGSA was in the process of getting back those entities and prescribing to them the audit opinion format they should follow.

The Chairperson said the Committee was empowered by Parliament to ask why the Auditor-General had chosen in the last 18 years to have some entities opt out of AGSA audits and why after one year he had decided to have them opt in again.

Mr Hlongwa replied that he may not have the most comprehensive answer to that question but according to his understanding the AGSA did not have the skills to audit them at the time. The AGSA had made big stride to remedy the situation, one of which was having an audit in terms of international standards. The AGSA was trying to avoid situations of inconsistency and in the end the goal was to have everything audited by the AGSA.

The Chairperson asked when Mr Hlongwa started working at AGSA.

Mr Hlongwa replied he had worked there six years.

The Chairperson said that was why he suspected that Mr Hlongwa did not have the correct answers as the matter being discussed went back 18 years. It would be better to get actual clarification on this matter as it affected oversight. He suggested that Mr Hlongwa go back to AGSA and say that the Committee wanted to know details on what was happening. According to their understanding of the information before them, there were many inconsistencies that the answers given did not address. He asked if something could be submitted in writing, explaining the situation, as the Committee wanted to understand the gist of the problem.

Irregularity
Mr Smith asked what was the effect of condoning irregularity on the status of an entity. What criteria were used to condone irregularities?

Mr Hlongwa replied that the AGSA did not condone irregular expenditure and the like. If anyone could do that, then it was National Treasury. The role of AGSA was merely to audit and report the findings. The condoning process depended on who was responsible for the regulation and if it was something that could be condoned within the entity or Department, then the Chief Executive Officer was empowered.

Clarification on page 3
Mr Smith was confused about the information being displayed on page 3 in terms of the six focus areas. He presumed the Pre Determined Objectives (PDO) were just column two and the others were merely compliance with regulations. He was not sure how to read the table in relation to the audits for Pre-Determined Objectives (PDOs) and compliance. When he looked at it, it did not make sense.

Mr Hlongwa replied that the AGSA did not get 100% of the information from the entities that were not audited by them. The AGSA had decided to have six focus areas for all audits because of the importance of those matters. For the Section 4(3) entities, those areas had not been audited which was why they did not have information on them. This did not mean they had not been audited properly according to international audit standards. It had just been that this year the AGSA had decided to focus on those key areas.

Lateness of report
Ms J Kloopers-Lourens (DA) asked why this report had not been received before the meeting. The members were supposed to come prepared but had not been able to do so, which was unacceptable.

Closing remarks
The Chairperson said that there were many more delegations to present and thus members were free to interact with Mr Hlongwa outside the meeting. There were still issues that needed clarification and this needed to be given.

Human Science Research Council (HSRC) presentation
Dr Olive Shisana, HSRC Chief Executive Officer, spoke about HSRC’s objectives, gave an organizational overview (500 staff in five offices country-wide), and outlined its six strategic predetermined objectives. She looked at the results of some of the research the HSRC had been engaged with over the previous year such as public perception of who was corrupt amongst public leaders and officials (see document). The HSRC research areas were:
Democracy, Governance and Service Delivery
Economic Performance and Development
Education and Skills Development
HIV/AIDS, STIs and TB
Human and Social Development
Population Health, Health Systems and Innovation.

HSRC performance was evaluated against the six predetermined objectives, using performance indicators and achievement of targets ranged from 75% to 136%. The number of peer-reviewed publications in internationally accredited scientific journals per senior researcher had increased from 1.52 in 2009/10 to 1.68 in 2011/12. Graphs outlined actual performance compared to SMART targets in 2011/12 .

Ms Priya Singh, Chief Financial Officer of the HSRC, presented the annual financial statements showing the audited HSRC 2011/12 performance highlights which showed a consistent decrease in the number of issues raised by the Auditor-General from 44 in March 2009 to 10 in March 2012. In graph format, she showed HSRC’s income, expenses, surplus/deficit since 1999 and income from parliamentary grant versus external outcome since 2004. HSRC’s good performance was attributed to good unqualified audit history, further strengthening HSRC’s appeal to external funders, more focus on external income fund raising, good staff capacity and retention, and more funding channeled to research costs (by minimal utilisation of consultants on support service activities; austerity measures on administration costs; and cost saving measures introduced on utilities, that is, rates and telephones).

Dr Shisana reported on the HSRC human resource management showing demographic trends from 2002 to 2012 with its highest demographic being black females. Qualification levels of its senior researchers was provided. She concluded that it was a very successful year in terms of HSRC meeting its legal mandate, most predetermined objectives were met or exceeded, major research projects were undertaken covering key priority areas with funding secured to undertake these research studies.

Discussion
The Chairperson said that the 10 findings in the Auditor-General report causing the audit to be unqualified not clean and this needed to be reduced to 0 findings. If the CSIR could do it then so could they. The HSRC was an important entity in shaping the way forward for Africa and thus needed to be exemplary even in the Auditor’s opinion.

Mr Smith congratulated the HSRC on an improved audit.

Research results
Mr Smith asked said some of the HSRC research results seemed counterintuitive. He was struck by the finding that people had high levels of satisfaction about education. Could this be explained? The fact that politicians and judicial officials were perceived as having the same level of corruption seemed remarkable. He asked why the politicians at national level were seen to be the most corrupt where as other research had shown local officials as being the most corrupt, followed by provincial officials and then national.

Dr Shisana replied that most of the people who lived in rural areas were not previously able to enter into a school system due to the fact that they had not had the money to pay. They now found that they could enter the school system as the government had provided ‘no-fee schools’. This meant that access was better. This did not speak to the question of quality. This was why the results were positive.

Mr M Nonkonyana (ANC) said he found it alarming that the private sector had not been showcased as being corrupt. It was the private sector that corrupted everyone.

The Chairperson stated that the media played a role in creating these perceptions within the general public. The media was owned by ‘big business’ and the perception was created that ‘things were wrong because of the people governing’.

Dr Shisana replied that the perception that the HSRC was getting from the public was not that corruption was only in the public sector but about the problem in terms of the links between business and the public sector. This meant that corruption was not only occurring in the public sector. It was that link between the two that was contributing to corruption. The link was based on what people were saying and not what the HSRC itself was saying. There was further investigation being done in terms of understanding the dynamics that went into the interplay.

The Chairperson said that many of the cases exposed had been senior officials from government. These officials ended up more often than not being given golden handshakes. He asked if there had been research on why that happened. There had been those who had suffered but had not been protected by authorities.

Dr Shisana replied that no research had been done into that but she was sure it was something that the Democracy, Governance and Service Delivery (DGSD) Unit could look into in the next Social Attitudes Survey of South Africa (SASAS) survey.

Tendering
Mr Smith said that the Minister of Health had made a statement that a vast number of problems were caused by tendering and there could be great advantage of doing things ‘in house’. Was any work being done by the HSRC for the Minister of Health on this matter?

Dr Shisana replied that the HSRC was not doing work for the Department of Health on that particular subject but it was doing work for them on a host of other areas but not necessarily on the issue of tendering. The issue of tendering was being done on a government-wide basis as the HSRC served many government departments.

Ms Judith February, Director of Democracy, Governance and Service Delivery Research programme for the HSRC, replied that on the issue of corruption the answers had been based on perception. There needed to be questions asked about who the ‘judicial officers’ were perceived to be. Had the judicial officers been conflated with the police or was it the people who buried the dockets, for example? For the answers given on levels of corruption in local, provincial and national governments, this had been a dramatic year in terms of corruption at the national level and this had influenced people’s perception. The HSRC planned to use the information within the Democracy and Governance Unit to inform public debate and also use it to improve policy and look at the implementation of policy.

Mr Nonkonyana asked would it not be a conflict of interest with the private sector to state, on the one hand, that entrepreneurship, industry and business in South Africa needed to be promoted whilst on the other hand, contribute to employment by government providing the jobs internally. Would this not take away jobs from the private sector?

Dr Shisana replied that the level of jobs would fall in the private sector if the state no longer tendered its services to the private sector. This would mean that the jobs would have to be created within the public sector. It was a valid point that jobs should be created in the private sector. However what the HSRC was saying was there was a need for some of those jobs that ‘belonged to the state’ to be done by the state in order to create long term jobs that had more benefits. Usually what one found with small entrepreneurial ventures was that the ones who created them benefited along with the senior management but people on the lower levels encountered jobs that were short term with no benefits. This was why there was a need for additional research to look at the state capacity to provide these kinds of jobs, and even the capacity within the private sector to create sustainable jobs.

Condoning of irregular expenditure
Mr Smith asked how irregular expenditure was condoned and who condoned it?

Ms Priya Singh, HSRC Chief Financial Officer, replied that the BAC stood for Bid Adjudication Committee. The HSRC did write to Treasury on the individual circumstances and the response from Treasury had been that condonation should be effected within the processes of the HSRC. It related to when the donor was specific in terms of a supplier for the purposes of a particular type of research.

External funding
Mr Smith said that although it had been stated that the HSRC was satisfied with the current external funding if one looked at the graph over the last two years, external funding had been lower than the levels of parliamentary funding; however in previous years this had not been the case. What was being done to get to greater external funding as one of the goals had been to be self sustaining? Why had the figures dropped?

Dr Shisana replied the aim was to get government to put more resources into research. The reason being that if there was a sustainable source of funding for research then one was able to keep the skills of those people within the organization. Also one would be putting more energy into fund raising instead of implementing the mandate set up in the Act. Ideally, it would be HSRC raising 40% of the income whilst the government supplied the remaining 60%. This had also been the conclusion of the review of the HSRC and which,in fact, had called for an even higher rate than the 60%. Thus for HSRC to be sustainable there was a need for government funding. There were few people interested in research into humanities – it was mainly government. Thus it was government who could provide the resources to be able to undertake such research.

Mr Nonkonyana asked why was the funding from private sector decreased whilst that from the public sector stayed the same.

Ms Kloppers-Lourens also asked what had been the reason for the decline in external income over the last two financial years.

Researchers
Mr Smith asked how many of the 109 researchers that had been lost had been senior researchers and what had the effect been of the declining number.

Ms Kloppers-Lourens asked how many were senior researchers and how many were junior researchers within the staff component. What was the target within these two groups in terms of publications?

Dr Shisana replied that for senior researchers the target was 1.5 journal articles published in internationally accredited journals and for junior researchers the 1.8 articles in a peer reviewed journal.

Staff turn over
Mr Smith said that the staff turnover seemed to be quite high compared to the norm for a public service institution. What caused that?

Dr Shisana replied that the HSRC worked on a model of contracts for its employees and sometimes contracts were not renewed. The HSRC was trying to make sure that the next round of contracts that were signed would lead to recruitment from the same people who had been contracted before.

Wasteful and Fruitless expenditure
Mr Nonkonyana asked on what basis was fruitless and wasteful expenditure condoned for 2010/2011.

Ms Priya Singh replied the circumstances were that interest had been incurred on a payment that had been delayed due to circumstances beyond our control. The amount came to R4 000 interest.

Perceptions in other countries
Ms Kloppers-Lourens asked if these finding had been compared with those in other countries. What were the perceptions of corruption in other countries, especially African ones?

Secondary schools and teacher skills
Ms Kloppers-Lourens asked if the HSRC had analysed secondary schools. Had research been done on how to improve teacher skills and was there to be collaboration with the Department of Education?

Dr Vijay Reddy, Executive Director: Education and Skills Development research programme at the HSRC, replied that last year the Annual National Assessments reported on Grades 3 and 6, this year they would report on Grades 3, 6 and 9. The Trends in International Maths and Science studies were administered at the Grade 9 level and 11 December would see the release of the results which would indicate how South Africa performed at the Grade 9 level. A book had been produced called ‘The Low Achievement Trap’ that gave explicit details of the performance in various areas of teacher skills. It reported on content knowledge and pedagogical content knowledge and showed how to assist in producing pedagogical content knowledge. This was one aspect. There was also the HSRC review which gave a synopsis of various pieces of research including perceptions of the public.

Child Maltreatment programmes
Ms Kloppers-Lourens asked which provincial governments were implementing the child maltreatment programmes.

Mr Arvin Bhana, HSRC Executive Director: Human and Social Development research programme, replied that the Western Cape provincial government had been the first to institute this.

Dr Shisana added that this was because the study had been conducted in the Western Cape.

Mr Smith asked what was meant by the term ‘child maltreatment’. Was this the entire gambit of how children were treated within society? He also asked what was meant by inappropriate attitudes.

Prof Arvin Bhana, Executive Director of HSRC, replied that the definition of child maltreatment was a broad definition used by the World Health Organisation. It encompasses all forms of maltreatment of children ranging from physical to psychological abuse. In terms of ‘inappropriate attitudes’, the focus of this study was in relation to evidence based child maltreatment programmes. “The extent to which one used programming that was evidence based was the issue”. It had been noted that those providing services were not entirely open to using evidence based programmes. This was partly because they would have had to re-learn (or re-tool) and had thus felt that this was additional work at no additional remuneration. There were negative attitudes towards learning appropriate methodology for treating children.

Annual targets
Ms Kloppers-Lourens asked how were annual targets determined.

Human Resources Deployment
The Chairperson said that the Committee had attempted to work with the HSRC in terms of human resources deployment. This endeavour had failed due to the attitudes of the employers in both the HSRC and elsewhere. Had these attitudes changed, and if it had not what had been done to try and influence such a change?

Dr Shisana replied that the HSRC was working on the human resource challenge. The HSRC had a high rate of employees who came from a previously disadvantaged background. The HSRC had a higher percentage of black people now than before. Black females and black males were the majority. There had been a change in terms of the distribution of the staff.

The Chairperson said he was speaking about people with scarce skills being “wrongly deployed or not deployed at all”. He had given the HSRC top CVs of people who had been either wrongly deployed or not properly deployed. The Committee had only managed to deploy one person this way. It was not that we did not have skills in South Africa, it was just that people “pick and choose” who they wanted. South Africa had a struggling economy as South Africa was not prepared to use the skills of people that had already been developed.

Dr Reddy replied that in terms of Human Resource development she wanted to refer to a study that had been conducted which looked at unemployed science graduates. There had been an attempt to quantify this phenomenon as well as gain an understanding of why graduates who had come from various universities remained unemployed. The myth had been that these graduates had ‘low grade degrees from black universities’ but this was not the case as some came from the top universities. The perceptions of the graduates on why they were not being employed was that they needed experience – but in order to get the experience, the graduates needed to be employed.

The Chairperson said when the Committee had visited Rhodes University they had had a three hour session with the graduate and academic community. Many of the graduates said they continued to study because there were no employment opportunities, whilst others went to work in banks or became teachers. Many had not been employed within the science system and were engaging in work they were not qualified in.

Dr Vijay Reddy replied that the Department had set up internship programmes within science centres and in the government/ public sector so that they could gain experience. Before the former Minister had left she stipulated she had struck agreements with the private sector for internships for young graduates and the Department would provide subsidies so as to give them that experience. The unemployment of science graduates was a strange phenomenon and through research the HSRC hoped to gain insight into the reasons for it. In regard to skills development the HSRC was undertaking research to build a credible institutional mechanism for skills planning within the country. Within that there would be detailed studies on each sector and the needs of the country in terms of supply and demand, the absorption rate as well as the barriers to employment.

Health and Nutrition Survey
Ms P Mocumi (ANC) asked what was the sample size of the population for the survey done on health and nutrition. Was the sample based in urban areas, the townships or rural areas in order to conduct research?

Dr Shisana replied that for the Health and HIV study it had 1 000 census enumeration areas, 15 houses had been selected within that area. The total sample nationally had been selected randomly on a ‘probability basis of more than 25 000 feet’.

Employment target for disabled people
Ms Mocumi asked if the HSRC had thought about conducting research on why the employment sector and government institutions were unable to reach the 2% employment target for disabled people. Had research been conducted to find out what the reasons for this were?

Dr Vijay Reddy replied the Department for Higher Education and Training, for whom the HSRC was doing this research, also had indicated that when the research was being done there was a need to ensure that studies were undertaken on the situation facing disabled groups. The studies had not yet been done but the HSRC would certainly look at the disabled group as a sector and understand the skills capacity as well the vacancies that they took up or did not take up.

AISA
The Chairperson said that some AISA board members had approached him to ask why the entity was to be absorbed into the HSRC without any proper amendments to the HSRC Act to do that. He had told them it was because the HSRC Act did accommodate for research into Africa, as this was the brief given by the Department. The Department had said that there was no need for amendment of the HSRC Act. The board members had argued that there were aspects of AISA that were not incorporated into the HSRC Act.

Dr Shisana replied the decision to incorporate AISA into the HSRC had been taken by Cabinet and the HSRC Board had been consulted and had approved that AISA could be incorporated into the HSRC due to duplicate mandates. Both entities focused on social science research in Africa. Once the decision had been made, the Department had found it appropriate to repeal the AISA Act. The HSRC already had that mandate. There was thus no need to amend the HSRC Act for the incorporation but there was a need to repeal the AISA Act.

The Chairperson replied that the AISA board members had said that there had been three options including being incorporated into the Department of International Relations and Cooperation (DIRCO). He asked why that option had been ignored?

Dr Shisana replied that the only reason she could think that the Department had decided to put AISA in the HSRC was that AISA was meant to undertake research as a research council which it could not be under DIRCO. The research council used particular methodology to generate knowledge that informed the public and government. In DIRCO they would not be able to undertake this, but would be able to in the HSRC.

Mr Nonkonyana said that it would be best to obtain a senior council opinion.

The Chairperson thanked the HSRC for coming and he believed they would have a clean audit next year.

National Advisory Council on Innovation (NACI) presentation
The Chairperson said that NACI had not presented to the Committee in many years and he was thus not sure what report they were bringing.

Mr Steve Lennon, NACI Chairperson, replied that NACI with the Department had tried to arrange times for a presentation to the Committee and there had been times which NACI had been unable to make. If there was any information the Committee needed above and beyond the presentation he would be happy to provide it.

Mr Lennon spoke about NACI’s mandate and gave an overview of the Council and its Council Members and NACI’s key outputs. Highlights included the completion of the Science, Engineering and Technology (SET) Gender Policy framework, the publication of the South African Science and Technology Indicators 2010 booklet and the continued focus on the National System of Innovation (NSI). The presentation covered the SET enrolment and graduation for 2000-2010, Research and Development expenditure as a percentage of GDP which showed that there had been a slight decline in the percentage. Also provided were the numbers and world percentage held by South Africa for publications and patents, the South African Technology Balance of Payments for 2000-2009 and high tech manufacturing exports and imports for 2005-2010. Overall South African NSI had shown a good record on SET enrolment and graduation however some weaknesses in the system persisted with regard to low and declining R&D intensity, decline in world share of patents and heavy reliance on imported knowledge and products.

NACI’s secretariat and financial report were discussed. The way forward outlined challenges for NACI in its structure and mode of operation. NACI’s mandate was hamstrung by the fact it reported to the Department and thus had no structural location that would afford it the authority needed for effective coordination of a national innovation system. NACI had been effectively constrained to ‘advise’ only in the limited NSI domains in which the Department can operate. In order for NACI to be effective, it needed a strong efficient secretariat with substantial professional, technical and analytical capability beyond mere administration. The presentation proposed several new ways in which NACI should be structured and conduct its business which included the development of a National Innovation Framework, the adoption of a Project Team Approach to conduct NACI business and the development of professional, technical and analytical skills within its secretariat.

Projects implemented during 2012/13 included development of a National Innovation Framework; monitoring, evaluation and indicators; strengthening skills in Mathematics, Science and technology; infrastructure for research and innovation, innovation for economic development and social upliftment, bio-economy policies and strategies, and gender mainstreaming.

Discussion
Oversight over NACI/Role of Director General within NACI
The Chairperson said that the Committee had always wondered about the role of NACI versus the Ministerial Review Committee. This was because the role seemed to overlap. The Committee had thought that, seeing as NACI had not presented, it had been the Ministerial Review Committee that had taken over. They had been surprised about not being informed formally that NACI had been dissolved so it made sense to see them presenting today. However there had been no Ministerial account of why NACI had not presented to Parliament in the past few years and this had confused the Committee. He felt the Minister needed to be called after this to see explain what had happened due to the fact that as a committee of Parliament they were supposed to know what was going on with all entities under DST.

Mr Lennon replied the Director General was being presented as a Council Member. He had been a chief executive up until the promulgation of the Science and Technology Laws Amendment Act in December 2011. Prior to this the Chief Executive of NACI had been the Director General. However now the Chief Executive was appointed by the Council.

The Chairperson said that the Committee had always complained in Parliament about the Director General being Chief Executive Officer of NACI as this did not make sense. This was because the Council was supposed to be independent and advise the Minister whose accounting officer was the Director General. To have the Director General in that position did not make sense.

Mr Lennon replied that this sentiment had been echoed by numerous reviews undertaken over the years. When he had been appointed Chair, the first thing he had done was sit down with the Director General and outline the contradictory approach and an agreement was reached that the Director General would meet a hands off role. He would obviously meet his obligations in terms of the Public Fiance Management Act (PFMA) as the accounting officer but in terms of the substance of recommendations given to the Minister, the Director General had never interfered in this process during Mr Lennon’s tenure as chair.

SET Enrolment and graduation
Mr Smith said that he did not feel as if this slide showed the notion that overall the NACI recorded good levels of Science, Engineering and Technology (SET) enrolment and graduation. When this had been spoken to during the presentation, a different position had been presented from the positive one as shown by the slide?. He who said? said that enrolments and graduations had actually been one of the disappointments of the system. There had been an increase in enrolments over the 10 or 12 years and the graph line for graduations was almost flat.

Mr Lennon replied that Mr Smith was right in his comment about enrolment. He apologised if he had come across as contradictory. If one were to amplify the slide, one would see that graduations had increased but he agreed that it was not good enough, however at least there had been an increase. This really was an appalling situation? what was being seen here. He pleaded that the Committee think about the opportunity that this had for the country. If 50% of those students who enrolled, achieved the degree, then there would be a massive injection of skills into the economy.

Indicators
Mr Smith said that when one looked at the indicators from Slide 8 onwards many of them were disappointing. They were disappointing despite all the initiatives to turn things around. South Africa would have been in a better position having done nothing. The indicators showed the disturbing trend of tailing off over the last few years. The situation seemed worse since 2006 despite the White Paper process, the specialist department, the creation of the National System of Innovation (NSI) and the creation of a variety of entities to tackle these issues. However despite these interventions there seemed little effect as trajectories in some cases were declining. Was there an explanation for why post 2006 some of the trends became negative?

Mr Lennon replied that NACI did not know why the situation had taken a turn since 2006. They had grappled with the matter and there had been discussions with the various Science and Technology Ministers and they did not understand why the inputs into the system had been consciously increased yet no outputs were seen. One could argue that there were gaps in the output and that was why the Technology Innovation Agency had been created. There was a big gap in the system in that there was not a true venture capital ethic investing into within South Africa. The Development Bank of Southern Africa, the National Empowerment Fund and the Industrial Development Corporation had funds which were meant to promote innovative new businesses but they had no risk appetite whatsoever. This was one of the things NACI was working on: whether the chasm was the innovation chain that was the problem. There was a plan to create substantial public-private sector funding mechanisms to close that gap. He also said one should not be disheartened as it was difficult to establish any cause and effect relationships between inputs and outputs thus the work needed to carry on. These had been tried and tested mechanisms from around the world that worked and there was no reason that they should not work in this case.

Recommendations
Mr Smith asked for a list of all the recommendations made that had not been acted upon. This would allow the Committee to speak to the powers that be and state the relevance of the list of recommendations.

Mr Lennon replied that former Minister Pandor had asked for exactly the same list. NACI was now going through a process of engaging with the Department and asking if they could now go back over the last few years . NACI would come back to the Committee on this issue.

Ministerial Review
Mr Smith asked if there were differences between the Ministerial Review and NACI. Were the two on ‘the same page’?

Mr Lennon replied that largely, yes, the two were on the same page. The matter on which they were not, was NACI did not believe that the detail of the proposals on the advisory structure was feasible. They had given this advice to the Minister and were working with the Minister and the Department to come up with something that was in line with previous recommendations that NACI and the Department had made.

The Chairperson asked what happened when NACI had a conflicting opinion with the Ministerial Committee.

Mr Lennon replied that there had been conflicting advice and in some cases conflicting opinions. The response from the Minister had been that it was frustrating when one had highly respected bodies giving different advice. The response from NACI had been conflicting advice should be welcomed and not necessarily a cause for conflict and should be used as input to make a final decision. Where there was conflicting advice, it had always been possible to find a middle ground. This depended on the good will of those involved. This was a small community and everyone knew everyone else and there was a great deal of goodwill as everyone was working towards the advancement of South Africa as a whole.

The location of NACI within a department
Mr Smith said he agreed that NACI was wrongly located as the drive to become a knowledge economy was not the drive of one department. The work of NACI was core to the direction this took and thus he felt that NACI should be located in the Presidency or Deputy Presidency or some place where they could properly carry out their mandate. The recommendation had been made and he presumed it was being considered.

The Chairperson agreed with this notion and this had been one of the issues raised. NACI was meant to act as a think tank for government.

Mr Lennon replied that the Minister had stated that he would look carefully at the Ministerial Review Committee recommendations and wanted to engage them with NACI and other stakeholders and come up with something that would work for the country. The plan was for the Minister to put something together and then take that to Cabinet.

The workings of NACI
Mr Nonkonyana said that he was confused by the workings of NACI. He understood that NACI had been established in terms of the Act and was an entity on its own. He also knew that NACI was part and parcel of the Department and therefore the accounting officer was the Director General within the Department. NACI also engaged with two project teams. He asked how all this came together and worked.

Mr Lennon replied that the relationship between the Department and NACI had a ‘chequered past’ with various ups and downs. He was a strong supporter of independence for NACI but had heeded the words of Minister Pandor that it must not become a ‘big stand alone bureaucracy’. There was a need to find a fine line as NACI needed to make its own decisions independently in terms of what it prioritised. Whilst the Department tended not to interfere, there had been times where NACI had wanted to pursue a particular project and the Department had said it would not process the commercial application for example. This had happened in the past and what had been seen as the solution was for the Chair of NACI to have a strong and constructive relationship with the Director General and the Minister – which he had had over the years. The relationship did work but it just meant that those involved needed to work at it.

PHD Project
The Chairperson asked how much had been done in terms of the PHD project. There had been a great deal of interest in this project when he had given the key note address at a CPUT graduation. Some who graduated were not able to continue studies as some had younger siblings who they needed to get through school or some other form of financial commitment.

Mr Lennon replied that NACI had advised the Minister on the key elements that were needed in a PhD project and what had been said was that there was a need for more PhDs in the country. It was in the national Research and Development Strategy and in the targets. More importantly there was a need for more black PhDs. The social pressures placed on students, who were possibly the first in their family to have a degree, were massive. The advice that had been given on the PhD programme was that it needed to be made sure that this was not seen as merely further study for a poor student but something that was an important first step in an illustrious career. The question was how to make this work.

Teacher training strategy
The Chairperson said this was an important strategy as some teachers had very little training in the subjects they taught. There was a need to develop a science orientated society. This was an important initiative of NACI that it needed to guide.

Mr Lennon replied that NACI had made some recommendations surrounding the education value chain and this highlighted the problems that NACI had. NACI was not advising the Minister of Basic Education or Higher Education but the Minister of Science and Technology. This also frustrated the Minister as what NACI was advising for him to do was within the education realm but he was the Science and Technology Minister. There were many problems within the education value chain but there were also many positive initiatives that needed to be built on. There was a need to engage in teacher training in depth and this could be done through excellent hubs in schools that trained existing teachers. There were a lot of teachers out there who had been poorly trained or not trained at all and had all the good will in the world. Society seemed to have lost respect for teachers especially in terms of technical subjects.

Indigenous knowledge systems
The Chairperson asked how much advice had been given in terms of the indigenous knowledge systems. A number of people did not hold it in high regard as they thought that it was just ‘things for the rural areas’ and was a ‘rural challenge’. There was a wealth of knowledge within the indigenous knowledge systems which people from the West came and took and used to make money. These knowledge systems were seen as far removed from society.

Mr Lennon replied NACI had not looked at ingenious knowledge systems for some time but they had been dealing with the issue through the work done on models of social innovation. NACI had said that all South Africans needed to be given the opportunity to innovate and as a society and an economy everyone could benefit from that. Innovation and Development was looking at how to put in place ‘open innovation systems’.

Universities in the Northern Cape and Mpumalanga
The Chairperson asked how NACI tapped into the building of the universities in the Northern Cape and Mpumalanga. These projects were critical to human capital development, skills development and so forth. The Northern Cape University was situated at the core of astronomy, why could it not be a centre of excellence in astronomy? Other universities were located at the core of various industries such as mining but were not the centre of excellence. These initiatives and ideas needed to be brainstormed and put to the relevant political authorities.

Mr Lennon replied it was that sort of question that NACI wanted to answer in the National Innovation Framework. There was a need to plan centres of excellence in terms of the innovation framework. The current council would probably not complete that work but it would definitely set up the framework for future work to be done.

Future Careers
The Chairperson said when he had grown up there were very few careers that were open within the science realm. But now there was so much to choose from.

Mr Lennon replied career guidance was critical in making sure that the science system works. In the majority of schools in this country, career guidance was non-existent and in many cases the teachers were not aware of the careers that were out there and the rich diversity of careers. This was a big gap that needed to be filled and was where the Department could play a role.

ioeconomy Strategy
The Chairperson said that the Bioeconomy strategy was very important. There was a group within CSIR who seemed concerned that the project was not getting off the ground. There had been a great deal of initiative and funding but nothing was happening. They had pleaded with Parliament to find out what were the problems in developing the Bioeconomy Strategy.

Prof Jennifer Thompson, Council Member of NACI, replied that she understood the frustrations of CSIR as NACI shared them. They had been completely frustrated at the lack of progress on the Bioeconomy Strategy. Minister Pandor had told NACI it would be involved in the initiative but it had not been. Some had been involved in their personal capacity but their advice had not been taken. She was pleased that the National BioTechnology Advisory Committee had now morphed into the Project on the Bioeconomy Currency and Strategy as she understood the frustrations of everyone. She hoped the new project structure would hone in on the project more efficiently.

The Chairperson had said that the top management had said this was a matter that they needed to discuss with the Department as it was the Department that should give support. Top management had said that they would be meeting with the Director General to highlight these frustrations and then report back to the Chairperson after the meeting. The Chairperson had told the CSIR that if there were any challenges, then it might be best to convene all parties and have this sorted out in Parliament.

Prof Thompson said she would appreciate any help as those involved were very frustrated.

Mr Smith asked where the blockage lay.

Prof Thompson replied that it was due to ‘turf wars’ and the inability to solve them as well as conflicting opinions and agendas.

Financial projections
Mr Smith asked for clarity on the financial projections.

Mr Lennon replied that in terms of the financial projections NACI had been in a situation where they had been completely dependent on the Department and were not getting any financial reports. What was then seen were the projections which showed a linear figure. As one got to the end, the secretariat had made assumptions on the completion of a host of contracts and amounts to be paid to service providers but that did not materialise and thus the expenditure was ‘all over the place’.

The Chairperson thanked the delegation for presenting.

AISA presentation
Prof Phindile Lukhele-Olorunju, Acting Chief Executive Officer of AISA, presented on the geographical spread of the research for 2011/12; AISA’s mandate and objectives and organisational structure. The research division was split into five units: Peace and Security, Sustainable Development, Governance and Democracy, Science and Technology, and Knowledge Transfer and Skills Development. The other divisions included Publications, Library and Documentation, Outreach and International Liaison, Corporate Affairs, Finance, Administration and Information Technology and lastly Human Resources. The presentation outlined AISA’S achievements in delivering on its mandate in 2011/12 with the achievements including publications, journal articles, books and policy briefs. Many of the targets were achieved or exceeded. Achievements also included the study and monitoring of democracy in collaboration with various partner countries and entities including DIRCO. AISA had various flagship research projects (see document). AISA’s Young Graduate and Scholars Programme ( in partnership with UNIVEN and the Guggenheim Foundation) was a platform for emerging African scholars to engage and exchange insights in the debates pertaining to the challenges faced by African societies. In March 2012, it met on the theme: Governance and Youth in Africa: Assessing Service Delivery, Unemployment and Sustainable Development for the 21st Century. Participants came from across Sub-Saharan Africa, including Botswana, Kenya, Nigeria, Rwanda, South Africa, Uganda, Zimbabwe and from the University of East Anglia.

Special Projects and initiatives included the Archie Mafeje Memorial Lecture, Campus Lecture Series at University of Limpopo; North West University (Mafikeng); University of Venda; University of Fort Hare; Wits and the Department of Defence and AISA – Private Sector Cooperation.

The presentation provided detail for 2011/12 on publications, the Library and Documentation Services Unit outputs, Corporate Affairs, Outreach and International Liaison, Human Resources, employment target outcomes, employee age and race distribution, AISA scientific qualifications, and its Finance and Administration and Information Technology division.

Ms Elsie Maritz, Chief Financial Officer, presented the Finance Report, looking at strategic objectives. The audit opinions expressed for the past six years showed that since a disclaimer in 2006/7, AISA had an unqualified audit with some findings in 2011/12.

The Chairperson asked her to speak more to the audit opinion.

Ms Maritz said there had been six audit findings within supply chain management. This was because AISA was such a small organisation there was a decentralized supply chain management function. This meant that there were eight different people working on supply chain management and procurement. In other entities there was a centralized unit in which only one or two people approved supply chain management. It was not that there was no commitment about supply chain management.

The Chairperson asked why this was allowed. Why had it not been centralized?

Ms Maritz replied that this had been implemented however it required human capacity to have a centralized management function. For the past three years AISA had submitted funding applications to expand the finance division to incorporate a centralized supply chain management division. AISA had managed to reduce the supply chain audit findings from 34 in the previous year to 6 this year. The audit committee and council had prioritised supply chain management within the organisation.

Discussion
Targets
Ms Mocumi asked why AISA had managed to overshoot their targets by so much. Was it because they had set them so low? Had this been deliberate?

Prof Lukhele-Olorunju replied that most of the targets were set based on the performance of the previous year. They provided a baseline. Being a small organisation with few researchers the way the targets were set in terms of publications and outputs were the chief research specialists (people with PhDs) needed to produce two journal articles and policy briefs and also be involved in a book project. For those with Masters, the target was reduced as in international research organisations and a good researcher should be able to publish two articles in a year. The target was thus based on research AISA had done on other organisations as well as the number of researchers. It had been expected that each research should produce at least two policy briefs. AISA had devised it in such a way that did not leave each researcher doing research on their own on policies. What instead had happened was every Tuesday there had been a brainstorm session to tackle a particular issue or occurrence.

Qualifications of researchers
Ms Kloppers-Lourens asked why there were so few doctorates and masters researchers in the staff component (12 in total). What qualifications did the rest of the staff have compared to the HSRC who had large numbers of people with top qualifications? Were people encouraged to study?

Professor Lukhele-Olorunju replied that out of the total staff there were only 15 researchers. The rest were in finance, human resources, publication support units. If one looked at the 15 and the number of PhDs, it was not a bad number. AISA gave support for people to further their studies.

The Chairperson thanked the delegation for the report.

The meeting was adjourned.