Department of Science and Technology 1st Quarter 2013 expenditure report

Meeting report

Department of Science and Technology 1^st quarter 2013 performance and financial report
Dr Phil Mjwara, Director-General, Department of Science and Technology, said that the Department of Science and Technology (DST or the Department) was still improving on its structuring of the  indicators of its report. He was of the opinion that the DST was likely to meet about 80% of the  targets as set, as indicated by the Auditor-General (AG). His presentation would highlight the challenges that could well cause non-meeting of some of the original goals.

Dr Mjwara gave an overview of the DST. As the custodian of development of the National System of Innovation (NSI) for a standard of economic goals and objectives, the DST influenced this system through the National Research and Development Strategy (NRDS) and the Ten Year Innovation Plan (TYIP) of 2008. He said that the TYIP sought to contribute to the transformation of the South African economy from a resource-based into a knowledge-based economy for economic benefits. The measure of success would be the level to which Science, Technology and Innovation (STI) had a driving role in enhancing productivity, economic growth, and socio-economic development through developing, managing, and coordinating the NSI.

He outlined the five objectives of the DST, which were to enhance South Africa’s knowledge-generation capacity, to develop NSI innovation capacity, to develop appropriate STI capacity to meet societal needs, to build world class STI infrastructure, and to position South Africa as a strategic international research and development partner with the rest of the world.

He noted that the DST contributes to and reported on various Government Outcomes which included Outcome 2 - achieving a long and healthy life for all South Africans, Outcome 7 - decent employment through inclusive economic growth, vibrant equitable and sustainable rural communities and food security and Outcome 10 - protection of environmental resources. Dr Mjwara mentioned the five  programmes of the DST, and their purposes (see attached presentation). He said that it was unfortunate that Mr Patel was not present at the meeting that morning, to make further comments on his programme of development priorities of government through targeted technology and science innovation interventions, and the development of strategic partnerships with other government departments, industry, research institutions and communities.

Dr Mjwara then proceeded to outline the achievements in the first quarter. A total of 62 indicators would be reported during the year 2013/2014. Some targets were bi-annual and annual only, which explained why they were not included in the quarterly reports. For 56% of the targets, the DST was on course. 29% were at moderate risk. The Department was of the view that 2% of the targets would not be achieved by the end of the year (high risk targets). 5% of the targets had already been achieved. Thus, most of the targets were on course. The DST aimed to manage closely those indicators showing moderate risk.  

Dr Mjwara then highlighted some specific examples. On the annual target of providing 2 300 small and medium enterprises with technology support by March 2014, he noted that in the first quarter, 498 small and medium enterprises were receiving technology support by June 2013. Under the Administration programme,  the Department’s 4^th quarter and Annual Reports were submitted to the National Treasury and the Auditor-General by 30 May 2013, as required by the National Treasury. The Department held four public participation communication programmes: the Indigenous Knowledge Systems Conference, Launch of the Recordal System, Nelson Mandela Science Centre, and Public Service week at Hartebeeshoek. This was one more than initially planned. The vacancy rate of the Department had been reduced to 8% during the quarter.

Under the IT governance framework, which was monitored by the National Treasury,  the DST had already started to look at IT Risk management and control. This was being managed by the Enterprise Risk Management Unit in the Department.

Under Programme 2: Research Development and Innovation, Dr Mjwara mentioned that the tender for the MeerKAT satellite dish had been published, and sixty-four dishes had been issued. There was delay in progress as economic clusters had asked for changes. The DST was hoping to get approval for the tender by September. He hoped that the first MeerKAT dish could be installed early next year.

Financial support in the areas of space science, energy and bio science was continuing. Despite budget constraints, the department continues to support Research and Development (R&D) initiatives.
 
The Chairperson interrupted to ask if the Cabinet Minister had already approved the budget.

Dr Mjwara replied that DST was still awaiting a response on this, which should be done by end September.

Dr Mjwara continued that, in relation to R&D, the Space Agency provided information to the South African Air Force. One of these solutions included the magnetic technology services for the Institute for Maritime Technology and the Sharks Board. Paardefontein was one site established for taking satellite pictures as reference data for picture validation, and other countries could make use of this as well, for their own calibration and validation of images. Weather Forecasting and Fire Investigation programmes had also been developed. Technology solutions that were either commercialised or used by the community included the Fundisa Disk, which contained various data sets with educational information applicable to academic institutions interested in these data sets. Students and end-users also had access to information provided by the space agency.

The annual target to have three technology solutions financially supported by 31 March 2013, in the areas of space science, energy and bio-sciences, through DST funding, had already been achieved. There was no target for DST’s collaborative partnership with the private sector. Ten offices of technology transfer (OTT) were supposed to be financially supported. The Department was currently evaluating proposals from the OTTs who generated ideas that could be commercialised.

The DST aimed to identify what the infrastructural and research needs for South Africa were for the next 20 years, and this was one of the main reasons for it having hosted the 5^th Global Forum on Innovation and Technology Entrepreneurship in East London, which was attended by over 800 students. A high end skills development project in agriculture was being developed, in partnership with three previously disadvantaged South African universities, also partnering with French and Flemish universities.

Dr Mjwara stressed the importance for senior government officials to be aware of the STI policy.

The International Cooperation and Resources programme was funded by the US.  He added that the Swiss Federal Council ambassador was keen to collaborate with South Africa, similar to the successful German-South Africa Year of Science collaboration.

With regard to Human Capital and Knowledge systems, the Minister of Science and Technology launched the Indigenous Knowledge Systems (IKS) Bioprospecting and Knowledge Development Consortium, which was made up of three flagships: African traditional medicines, nutraceuticals, and cosmeceuticals. In addition, the launch of the National Recordal System (NRS) on 24 May 2013 in Moruleng, North West Province, had marked a milestone towards the protection, promotion, development and management of indigenous knowledge systems in the country. This event was broadcast live on e.tv, Khaya FM, and Motsweding.

The Department was on track with postgraduate and research grants, and was hoping to soon receive a better sense of who was participating in the Science and Technology week, which would be reported on in the next quarterly report.

On the topic of socio-economic partnerships, the amendments to section 11(d) Income Tax Act required companies to apply for their R&D projects to be approved in order to qualify for the tax deductions under the R&D Tax Incentive. Between 1^t October 2012 and 30 June 2013, 384 applications were received by the DST.

Dr Mjwara reiterated that the DST was on course with many of its programmes, and many had already been achieved. He identified some challenges, which included delays in the signing of investment deals to achieve quarterly targets, and backlog in application evaluations for R&D tax incentive approvals. The DST had now managed to start discussions with the Department of Environmental Affairs to ensure that there was a start made on drafting the Marine Biology Research Strategy which had been pending for some time.

He mentioned some highlights of the programme of the SA HIV AIDS Research and Innovation Platform (SHARP), saying that DST funded the development of new and improved treatment and prevention technologies for prevention of HIV transmission, HIV vaccine development, and development of a diagnostic to test drug resistance. Working with the Department of Health, the DST was involved with drug discovery for TB diagnostics and malaria treatment and diagnostics development. The DST was funding the development and commercialisation of a telemedicine workstation in the Eastern Cape, Free State, and North West. These were all components of the outcome to ensure long and healthy lives for all South Africans.

The DST initiatives also promoted decent employment through inclusive economic growth which contributed to the transformation of the society. He reiterated that it was working on the R&D tax incentives. In addition, a higher proportion of bachelors and honours students were receiving financial support from the DST – rising, in the 2014 year, from 2.5% to 5% for these fields, and from 6% to 10% for Masters students.

The DST’s involvement in pilot projects and research activities was summarised. One particular instance was cited of developed technology that could convert waste to fuel in rural areas, as highlighted during a visit to University of Fort Hare on 10 September 2013, which would continue to be supported by DST.

Dr Mjwara then summarised the slides on budget and expenditure for the quarter (see attached presentation). Slides were tabled showing economic classification and programmes. 92.6% of the budget went to transfer payments, to the entities reporting to the DST. 4.2% went to compensation of employees, 3.1% went to goods and services, and 0.04% to capital assets.

Dr Mjwara concluded that the National Development Plan (NDP) would play a key role in the work of the Department in the next five years and beyond. He reiterated that the DST was on track with 56% of the annual targets.  Human capital development, knowledge generation and exploitation, infrastructure and Africa collaboration would remain key focus areas for the 2014-2019 strategic plan. The Department of Science and Technology was committed to achieving a minimum of 80% of its targets in this financial year, and would be working on further improving its performance information.

Discussion
The Chairperson asked for more clarity on the 92.6% of the budget allocated to transfer payments. He asked if Dr Mjwara thought this allocation was good. He also wanted to know the number of employees in the DST.

Dr Mjwara explained that it was positive that the majority of the budget went to entities of the DST  such as the Council for Scientific and Industrial Research (CSIR), because it meant more money was going towards science innovation than to running the Department itself. He noted that the Department had 450 employees.

Ms M Dunjwa (ANC) commended Dr Mjwara on the presentation saying that the report was empowering and reader-friendly. She hoped that all tenders would be conducted “above board”.

Dr Mjwara responded that the tender had already been awarded to various parties.

Ms Dunjwa asked, in relation to slide 24, which academic institutions would have access to the Fundisa Disk. She also asked where exactly had telemedicine been installed in the Eastern Cape, and for an assurance of its success. She also asked for an indication of the role that the Department of Economic Affairs played in the Fort Hare project, if any.

Dr Mjwara said that the University of Fort Hare was one of the recipients of the Fundisa DISK which was funded by the EU Fund. The University of Fort Hare had been working with a local funding committee on the waste-energy project. Dr Mjwara explained that waste produces methane and the methane was used to produce the energy. He said that the Department would engage in conversation with the Minister of Education about the projects that would benefit the province – maybe not at this point in time - but definitely in the next Global Forum.

Mr Auf der Heyde said that he was unable to report much on the telemedicine question. However, he could confirm that in relation to the establishment of the Science Centre in Cofimvaba, provincial partnerships existed and there was a plan to sign an agreement with the Eastern Cape’s provincial minister.

Ms P Mocumi (ANC) wanted to know why the DST was unlikely to meet some of the targets.

Mr M Nonkonyane (ANC) asked for clarity on some of the targets not met that were indicated also on slide 15. He wanted to know which targets had actually been achieved.

Ms Mocumi asked, referring to the slides following slide 33, why some of the annual targets were not reflected also in 1^st quarter targets.

Mr Nonkonyane noted that last year the Department only met 72% of its targets and then asked how it was going to achieve 80% or more of their targets this year.

Ms J Kloppers-Lourens (DA) asked why the target was 80% minimum, and 90% was also mentioned. She also wanted an explanation of what was moderate risk and what was high risk in terms of indicators.

Ms Kloppers-Lourens wanted more details on the unallocated R18.4 million to be transferred to higher educational institutions. She also asked why the Marine Biology research strategy was still pending.

Ms Kloppers-Lourens asked for details of what was happening with the expensive SA Aghulas research ship that was still stagnant at the harbour. She said that R1,3 billion was meant for research purposes as universities, and the University of Cape Town, specifically, was concerned about this.

Dr Mjwara clarified that the 80% target was a number that the Auditor-General prescribed as a minimum requirement that would indicate that departments had been doing good work. Although that was the minimum target, the DST would actually be striving to achieve much more than that minimum.

Mr Thomas Auf der Heyde, Deputy Director General: Human Capital and Knowledge Systems, Department of Science and Technology, added his response to the questions around targets. Firstly, he responded to the 2% target that was related to  this Department finalising strategies for Arctic and Marine research. DST had realised that its Arctic and Marine Research was very similar to that of the Department of Environmental Affairs’ (DEA) Oceans and Coasts Programme, and felt that it would be better for the two departments rather to have one research strategy to develop overarching concepts for marine work. It had used this plan to set the target. However, having seen what had happened in the first quarter, the DST realised that it was unable to reach the Antarctic goals this year. The DEA’s  Oceans and Coasts programme had done some research on the SA Agulhas, which as pointed out, was presently not in operation, and DEA was therefore unable to assist DST in making any progress. The Antarctic research was noted as “high risk” as the work would not be finalised this year. Marine research was noted as “moderate risk”. Mr Thomas was more hopeful about making progress in the future, considering what had happened since June and after consulting the National Research Foundation (NRF), and could assure Members that the second quarter results would reflect a different picture.

Mr Thulani Mavuso, Chief Operations Officer, Department of Science and Technology, also spoke to the 80% target. He noted that the planning set goals according to the SMART (Specific, Measurable, Attainable, Realistic, Timely) model. The Department wanted to be sure of its indicators, but was quite confident that it could achieve 80% or more of the targets.

Ms Nosipho Ntuli, Representative: Monitoring and Evaluations Unit, Department of Science and Technology, added that the Department had more compliance indicators.

Ms Mocumi enquired about the current vacancy rate of the DST.

Ms J Kloppers-Lourens (DA) asked how many posts existed and at what levels they were. She felt that an 8% vacancy rate was too high.

Mr Thulani Mavuso, Chief Operations Officer, Department of Science and Technology, explained that at the moment 49 positions were vacant, which was about 10% of the total staff. He added that the extra vacancies now existing, as opposed to those at the end of the first quarter, arose as a result of resignations. He hoped that this would change. He said there were 475 positions. The department had kept a vacancy rate at 8% for turnover purposes, because the young employees were mobile and kept changing jobs. Not a lot of people were moving up the corporate ladder within the DST.

The Chairperson suggested that the DST create a model of “employee recycling” to tackle the issue of employees who kept coming and going.

Mr Mavuso said that there was only one top level vacancy at executive committee level and the DST was already in the process of filling that position.

Mr Nonkonyane asked who would be the recipients on the indigenous knowledge systems (IKS) and innovations mentioned in slide 34.

Dr Mjwara noted that the IKS programmes included developing an anti balding product which was currently being commercialised, a skin even toning solution, and a nutraceutical supplement that was being developed through the University of Witwatersrand.

Mr Auf der Heyde thought that North West and Limpompo provinces would be the recipients. He later confirmed that he had questioned this with his office and had just received a message that the communities which were recipients of the IKS included Mamelodi, Genadendal, and Attridgeville.

Ms Dunjwa asked what the community involvement was in the three products being manufactured and who would monitor the process. She also asked about the involvement of the education departments in science centres established in areas such as Cofimvaba, Eastern Cape and Uitenhage.

Dr Mjwara responded that the DST would follow up on supporting Uitenhage.

Mr Nonkonyane questioned the expenditure table in the financial performance report in slide 53, and asked why there were negative percentages (-8.3% for International Cooperation and Resources and -12.2% for Human Capital and Knowledge Systems) under the percentage of expenditure column of the table.

Dr Mjwara explained that the negative expenditures Mr Nonkonyane had mentioned referred to over expenditure during the quarter, for each particular programme.

Ms Kloppers-Lourens asked when the MeerKAT deal would be closed, and how strong South Africa was in terms of skills and competence to meet  requirements.

Mr Auf der Heyde said that the NRF was managing the MeerKAT tender. The tenders were awarded for joint ventures between German companies and a South African company.

The Chairperson asked what proportion was held by South Africa.

Mr Auf der Heyde responded that South Africa held a 75% stake in the project.

Ms Mocumi asked what the targets were for the NRF bursary funds.

Mr Mavuso explained that NRF bursaries were given out at different points of the year, but a census was only taken at one stage in the year, making it difficult to assess a specific target by a specific time, for dissemination of the bursaries. The targets would also depend on how many students graduated at a particular point in time.

Dr Mjwara added that when patents were needed, it was similarly impossible to set targets, because patent applications could be made at any time. This caused many delays in the R&D applications.

The Chairperson, on behalf of Ms Mocumi, asked for more information on employment of people with disabilities in the Department.

Mr Mavuso, in conclusion wanted to add some information about the recently-published Management Performance Assessment Tool (MPAT) report. The Department of Science and Technology was ranked top of the list.

The meeting expressed its delight at this announcement.

The meeting was adjourned.