Department of Science & Technology on its 2014 Strategic Plan, with Deputy Minister present

Meeting report

Opening Remarks by the Chairperson
The Chairperson welcomed the Deputy Minister of Science and Technology, and the Department of Science and Technology (DST or the Department) delegation. He noted the need to ensure that innovations in science and technology were safe for the people, and said that passion for profit should never be allowed to override community safety concerns, and safety must remain core to the Department’s work.

Department of Science and Technology 2014 Annual Performance Plan and budget briefing
Dr Thomas Auf der Heyde, Acting Director General, DST, commented that the Annual Performance Plan of the Department, covering the current financial year, needed to be formally approved by Parliament. It was formulated in the context of the overarching five year Strategic Plan. The current strategic plan would be replaced with a new strategic plan during the course of the year, as every department would be presenting to Parliament its long term strategic plan for the next five-year administration. There had been certain changes in the political priorities from the previous administration to the current administration, and these would be reflected in the new strategic plans and new annual performance plans, so the current presentation may not reflect all ambitions of the new administration.

He gave an overview of the Department’s vision, mission and goals, which reflected the themes of the National Development Plan (NDP) in terms of sustainability, enduring equitable benefits, and importance of science and technology innovations in national developments.

He mentioned the core elements of the Department’s strategic goals which included:
- developing and supporting South Africa’s ability to innovate
- knowledge as key input into innovation
- fulfilling the human capital requirement for knowledge generation
- ensuring that there was appropriate infrastructure to support knowledge and innovations
- collaboration with international Research Development and Innovation (RDI) partners and destinations. In this regard, he added that almost half of South Africa’s published scientific output was produced in collaboration with overseas collaborators, so that the South African science system was embedded in the global world of science.

Dr Auf der Heyde gave an overview that showed the alignment of the Department’s priorities with the governments priorities. These included the RDI infrastructure (for the development, implementation and application of infrastructure was a strong driver in National Development Plan), an emphasis on human capital development and skills development, the need for research development and knowledge generation input, and a focus on knowledge exploitation and job creation. The Department made contributions to creating employment opportunities for unemployed graduate and postgraduate students.

He mentioned the structures and functions of the DST core programmes, which included programmes on  Technology Innovation, International Cooperation and Resources, Research Development and Support and Socio-economic Innovation Partnerships.

The Programme on Technology Innovation was responsible for ensuring that knowledge products were turned into innovative new products and services that contributed to economic development. It would focus on identifying and supporting new research areas such as Nanotechnology and Biotechnology that showed significant economic and industrial promise. Technology innovation was divided into subprogrammes for Bioeconomy and Health Innovation, Hydrogen and Energy, Space Science and Technology, Innovation Priorities and Instruments and National Intellectual Property Management (NIPMO).

The Programme for International Cooperation and Resources facilitated and managed the Department’s International Cooperation facilities. It was divided into subprogrammes: International Resources, Multilateral Cooperation and Africa (responsible for all African bilateral cooperation and activities on the Continent) and Overseas Bilateral Cooperation (responsible for bilateral Cooperation outside Africa).

The Programme on Research Development and Support was responsible for upstream research activities and ensuring that knowledge production could happen in South Africa, in terms of ensuring human capital and infrastructure. It promoted science as a career choice and interest to the society. It was divided into subprogrammes: Human capital and Science Promotion, Basic Sciences and Infrastructure, Science Missions (focusing on areas of geographical advantage) and Astronomy.

The Programme for Socio-Economic Innovation Partnerships was responsible for the downstream innovation chain, and was more socially embedded. It was divided into three subprogrammes: Sector Innovation and Green Economy, Innovation for Inclusive Development, Science and Technology Investment.

Dr Auf der Heyde then highlighted some of the recent high level achievements and trends of the DST. He said that there was significant growth in the number of postgraduate students funded. DST was the principal provider of funds and bursaries to postgraduate students. In the last five years, there had been a steady increase in the number of PhDs produced, to 34 per million population, but this must still be measured against the recommended 100 PhDs per million of population expected in South Africa by the National Development Plan. There had been a steady increase in the allocations for human capital development over the last five years. There had been an increase in per capita amount of money awarded to the researchers. Also, there had been a significant and steady increase, from 2003 to 2013, in the number of papers published annually by the South African researchers in internationally accredited journals. There was a significant increase in research output, from 0.5% to 0.7% in the last eight years.

Achievements in Knowledge Exploitation included the Fluorochemicals Expansion initiative, which focused on developing new applications of Fluorine, a mineral that was found in South Africa, and there were a number of technological innovations that could add value. Fluorine was an important component of an active pharmaceutical ingredient for HIV/AIDS treatment drugs. The ICT pilot project had ensured that rural schools were better networked through ICT applications. There had thus been interventions in providing and enhancing rural education and rural development.

Achievements in Research Infrastructure include the establishment of a National Recordal System to capture, store and manage indigenous knowledge. Also, Indigenous Knowledge System (IKS) documentation centres were established in six provinces. DST had funded the development of a titanium primary pilot plant and a world class nanotechnology development clean-room at Mintek. DST had completed and launched 64 MeerKAT dish pads. Other achievements included making annual investments of about R400 million in research equipment at universities, the National Research Foundation (NRF) and science councils and an annual investment of about R200 million in cyber infrastructure.

There had been a steady increase in infrastructure allocations over the last eight years and a significant deviation between the allocation and expenditure, because of the roll out of the Square Kilometre Array (SKA) project. Also, there had been a steady growth in the allocation of funding to Science, Technology and Innovation (STI) International partnerships.

Achievements in policy development included the development and launching of the National Bio-Economy Strategy (NBS) in November 2013, and finalisation of a ten year ICT roadmap in April 2013.

Dr Auf der Heyde then presented selected targets to be achieved in 2014/15, as follows:
- Six new technology innovation products in key strategic areas
- Six postgraduate students (MSc and PhD) to be produced in key strategic areas
- R354.6 million foreign STI funds secured from international partners
- 44 international human capital development opportunities accessed for participation by South African researchers and students
- Production of 11 440 postgraduate students(3 414 BTech and Honours, 4 671 Masters and 2 665 PhD and 690 postdoctoral fellows)
- Awards of bursaries
- Eight instruments funded in support of increased localisation
- Enhancing competitiveness
- R & D led industry development.

He presented the budget figures (see attached presentation and explained that DST transferred MTEF allocations to some entities for programmes that they managed on behalf of the Department.

He noted that in this year, the Department would continue to support successful programmes, would build and learn from experience on how to commercialise ideas from R &D, would strengthen efforts to grow the next generation of researchers, would improve its internal operations, and communicate the DST work and achievements better. It was aiming to have stronger partnership with industry and other government departments.

Discussion
The Chairperson was appreciative for this presentation that was based on the five year strategic plan. He believed that the Department had performed well. This Committee was interested in ensuring that the  Department got sufficient budget in order to continue its work for the current financial year.

The Chairperson expressed concern that the amounts contributed by overseas funders outweighed the local funders, and was also concerned at the figures for employee salaries, and how they related to the work produced. He  commented that 92% of the funding went to agencies and hoped the money would be used for projects, rather than employee salaries, there.

Dr A Lotriet (DA) expressed concern about the percentage of students funded (at 10%), saying that the NRF would be getting more allocations in the next budget.

Dr Auf der Heyde replied that the percentage of students supported varied, depending on the level of student, but on aggregate it indeed was less than 10%. The percentage of Research-PhD students supported was 18% to 19%, Masters Students support was at 8% to 9% and Honours students were supported at a 4% to 5% level. He added that this was because the number of Honours students was far greater, but DST could only afford to support that percentage at that level.

Dr Lotriet asked if DST was just a conduit for international funds, and how these were reflected on the budget. She also asked what measures were put in place to ensure checks and balances, in order to ascertain that funds were spent appropriately.

Mr Daan Du Toit, Deputy Director General: International Cooperation and Resources, DST, explained that the role of the DST in relation to international funds depended on the source of funds. Some funding which the Department received directly came, technically, from development cooperation partners, such as the EU or Overseas Development Agencies. Some funding was channeled through National Treasury to the Department as a special budget allocation, and this was managed rigorously according to the standards set by the Public Finance Management Act (PMFA). For example the EU had a R40 million programme on poverty alleviation, which was managed by the DST but did not form part of the main budget, yet on that the Department would have to reported to National Treasury. The Department sometimes negotiated and encouraged investment by international funders of SA science - for example multinational companies or foundations. Funders would make funding available to Medical Research Councils or other councils, and in this case, the DST was not the recipient of the funding. Another component was National Competitive Funding, where a number of competitive programmes were run, for which researchers competed on the basis of their excellence. DST played a role in disseminating information on the opportunities, and gave proactive assistance in terms of strategic advice and how to write proposals for these grants. However, the funding, once approved, was directly channeled from the funder to, for example, the successful university, so it would not reflect in the DST’s books, although the DST had played a critical role in facilitating that funding. The Department oversaw these relationships, as money received directly was regulated by PMFA, and other regulations applied. DST served on a Joint Committee with all international partners, and this met periodically to take stock of the overall volume of cooperation. International funders had their own jurisdiction requirements and monitoring of funding. One reason DST had been successful in attracting international funding was because of the rigour applied that led to the Department’s credibility on responsible use of these funds.

Mr N Khubisa (NFP) commented that there was a paradigm shift from a focus on Science and Technology to Knowledge and Innovation, which should start at the fundamental primary stage at the school level, but the budget was getting reduced at the basic level. Infrastructural challenge was mentioned, and he said that laboratories were needed to start innovation from the basic level. He asked if it was possible to do an interlinking within school structures to shift away from the “traditional” laboratory to a new scale. He added that school learners needed exposure to equipment and instruments in order to be innovative and, for instance, a learner coming with an innovation for a car would require DST support. He suggested that schools be linked, upgraded and the standard of teaching of educators improved by way of training before these students moved to the universities. He added that the research units at the universities were not doing a sufficient job, as students should be innovative at undergraduate level. They were expected to produce articles in internationally recognised science journals before proceeding to postgraduate programmes, with the aim of creating knowledge for socio-economic use.

Dr Auf der Heyde replied that education was a key issue in South Africa and that all government departments needed to address this problem. He added that, given the budget of R6 billion, the Department could make an impact only in relation to that budget. DST had identified the need to demonstrate, using tools within its sphere of influence, and to improve education by focusing on implementing pilot projects and partnerships that would demonstrate how Science and Technology could improve educational processes, as also by improving teaching and learning processes. The Department had identified the challenges of rural education and was working on improvements that S&T could make in this regard. He indicated that DST currently supported a network of science centres running as research projects of Universities, NGOs and Community Based Organisations. Science centres made science accessible to people within their own environment, and the majority were involved in providing learning and training opportunities for schools. Some serviced 40-50 primary schools every year, helping to improve their knowledge. Partnerships between DST and the provincial Departments of Education paid for students to use these science centres, and this focused also on how to improve teaching and learning opportunities in schools. DST ran Annual National Science week (coming up on 2 August), with a one week focus on S&T. DST supported Science Festivals which took place in April every year with 50-80 visitors across the country.

Mr Mmboneni Muofhe, Deputy Director General, DST added that the shift to focus on innovation had made DST realise the need to develop human capacity in innovation and innovation infrastructure. This  process was ongoing as several infrastructures had been set up in some institutions, and some, for example, were in partnership with some industries, DST was building prototypes of the new energy methods, including hydrogen, and solar energy infrastructures were also in place. In the area of space science, Cape Peninsula University of Technology (CPUT) had a programme where students were taught how to build cube satellites. A lot of students had enrolled for this programme and a satellite was launched in November 2013. The system built into the small satellites was being sold to other countries.

Mr Godfrey Mashamba, Acting Deputy Director General, DST also pointed out that innovation was required in various modern educational systems. In consideration of the Department’s budget and mandate to drive technological innovation, DST found itself adopting a model whereby innovative ideas were tested, and so it ran pilot projects, and used the outcomes from that testing as a basis for scaling up through DST, agencies or government departments that could further take up such initiatives. For example, it had tested a wireless mesh network, an ICT based programme where ICT solutions were tested in school environments and, when successful, this could be scaled up to other applications. He explained that the wireless mesh network was a low cost internet connectivity in places that were not easy to reach through conventional ICT network solutions, so it enabled schools to connect, network and access information. Other pilot plans for industrial development include a fluorination plant and titanium plant, both of which were an important basis for development of minerals, and this was done in partnership with the Department of Trade and Industry (dti) and other relevant agencies.

The Chairperson commented that education was a key area of concern as transformation should start from the primary level.

Mr D Kekana (ANC) agreed that knowledge should start at a lower level and requested that DST should engage with the Department of Basic Education as science was needed for the future generations. He asked if the Department had requested funding for job creation, as there were not enough resources to employ strategic people. He said if the Department did not come up with a solution, it would take some years to close the gap.

Mr Kekana wanted more clarification on the budget and content of the Administration Programme. He though it probably included salaries, goods and services, and asked for details on the number of consultants used by the Department and the amount spent on consultancy, and said that further details needed to be provided and interrogated for this Programme, which was allocated R290 million. He also wanted to know how many staff were in the Department, to avoid ghost salaries, and also asked for the number of vacant posts and acting posts in the Department, as the top priority of the President was to eradicate unemployment and poverty and so vacant posts were to be filled. He also wanted to know if there was not a limit to the amount of time that someone could be employed in an acting position. He congratulated the Director General for managing the Department well. Finally, he asked if the Department had received a qualified or unqualified audit report, and requested any comments of the Auditor-General on the audit.

Dr Auf der Heyde replied that DST currently ran professional development and internship programmes and had supported, in the last year, about 700 to 800 unemployed graduates through internship and professional opportunities within its entities and Department. 60% to 70% of the interns ended up with permanent posts at the end of the internship period. DST did not have enough money, but always submitted bids through the MTEF process to National Treasury for funding and got guidelines from the Treasury on priorities for the budget, as it would be irresponsible to present unrealisable expectations to Treasury. A survey of the government internship programme confirmed DST as prime amongst all departments in absorbing interns, as it employed 460 people for internships, which was fairly effective in job creation.

Ms Nombuyiselo Mokoena, Deputy Director General: Corporate Services, DST confirmed that DST had received a clean and unqualified audit. The current structure had 494 posts, of which 460 were filled, with a 5.6% vacancy rate, as compared to the target of keeping the vacancy rate around 7% yearly. Vacancies were usually filled with internal staff and so other posts became vacant on promotion. DST tried to promote internally, in order to capacitate internal staff and get them ready to compete for senior posts within the organisation, although new staff with fresh ideas were brought from outside also, without ignoring the internal staff. DST spent a lot of money developing its internal staff, and that kept the vacancy rate rolling. DST had a target that no post should remain vacant for long, with just sufficient time to advertise the requirements and to interview. Senior management had another assessment process done externally outside the Department, where all the departments competed for the same assessor before they made the appointment.

Ms Mokoena noted that out of the budget of R6 billion for staff, only R21 million was spent on consultancy, and for labour relations expenses to assist the Department with disciplinary processes. The Department had a Legal Services Unit to handle general legal services, with a fair number of contract staff, but when certain strategic skills were needed in legal services, this would be outsourced. The Administration budget included various areas that supported the organisation, such as salaries for the Ministry, salaries for management within the Department, salaries for senior managers and for all support structures such as risk management, human resources management, finance, and IT. It also covered building management, maintenance and rentals and any other capital equipment that needed to be bought. In summary, ministries, management, corporate services, monitoring, evaluation and governance all made up the administration budget.

The Chairperson commented that the Committee expected honesty and integrity on information given and agreed that oversight visits be done after the budget had been finalised.

Mr Khubisa commented that follow up should be done. The document showed indications of slow spending in some agencies and the budget was reduced by R130 million in the 2014/15 financial year. It would be correct for the Committee to do local inspections of agencies to ensure there was value for money and fiscal discipline within the department.

Ms Mokoena said that DST was tightening up the contracts with entities to ensure funds were spent appropriately on projects. Where money remained unspent, the DST would identify this and have discussions with entities and National Treasury before money was made available in the next financial year.

Dr Auf der Heyde added that aside from the management intervention to monitor slow spending in the agencies, it must be remembered that some spending could be unpredictable. He cited the IKS project, which was unpredictable as it was a new project, and that could impact on the expenditure pattern. Also, he noted that NRF usually did not award a lump sum to universities but rather transferred in tranches, according to the performance of the research projects. Hence, there were certain “surpluses” that were actually funds that had to be held until they could be transferred. DST worked closely with entities to ensure it did not jeopardise the commitments, but also making sure not too many of the unspent funds were locked unproductively.

Ms L Maseko (ANC) congratulated the Deputy Minister on her appointment. She noted that the Department of Performance Monitoring End evaluation had identified DST as the best managed department during the presentation of the 2012/13 Management Performance Assessments. She congratulated DST for the clean audit outcome and asked if the issues raised by the Auditor-General around the need for tightening internal control and supply chain management within the Department had been taken up. She said that the Department needed to come back to present on the Annual Performance Plan and how it related to the budget. She asked for the role of the South African private sector in enabling the work of DST in driving the economy. She also asked about the relationship with the South African Bureau of Standards (SABS), to ensure that whatever went out to the public was of good quality. She asked what tools were used to monitor Millennium Development Goals (MDGs). She enquired what would be the best way to communicate messages about the Department, and its importance in developing the country, to young people and learners. She asked for the mechanisms in place to monitor agencies funded by DST and their performance assessment on their performance agreements and with line managers, to ensure compliance. She agreed that more elaboration was required on vacant posts and use of consultancies within the Department. The Department had mentioned the need to increase the consultancy fee allocations, due to a shortage of management of advisory staff in the Department. She asked why the National Advisory Committee on Innovation could not mentor and produce skills that would minimise the use of consultants. She asked about the R25 million budget of NIPMO on publicly funded research, to ensure that the country was taken forward into the knowledge economy, and asked if R25 million was reasonable to allow the country to explore the intellectual property. She added that strategic challenges were not mentioned in the presentation.

Ms Wendy Ngoma, Acting Deputy Director General: Institutional Planning and Support, DST replied that the PFMA served as a guideline to all entities. The Department received monthly financial reports, quarterly financial and performance reports and annual key performance reports from the entities. Besides the stipulated PFMA parameters, the Department had a unit dedicated to looking at governance, monitoring and evaluation in the entities. The Unit advised the Minister on all reports received from entities and these reports were analysed for the Minister and Director General. The entities also presented on how the process was managed, and the Minister would communicate what needed to be done.

Ms Mokoena also confirmed that the DST had consistently had clean and unqualified audits. She added that everybody in the Supply Chain Management and Human Resource Management sections had been vetted. As part of the remedial action taken to deal with comments raised by the Auditor-General, the Department had removed some of the people formerly working in the area of Supply Chain Management and replaced them with competent people who could deal with those issues. Disciplinary action was also taken against defaulters. DST was confident that the current skilled resources would be able to deal with the issue raised and ensure they would not recur.

Mr Muofhe commented that the role of the private sector was an ongoing focus and concern to DST. Last year, DST had its first Innovation Summit with the private sector and some public enterprises, dealing with how they could best work together. There were exciting partnership prospects as the Department was in the process of signing a couple of agreements with Transnet and Postal Services for them to demonstrate the technologies developed. He added that DST’s Technology Innovation Agency was working towards promoting commercialisation of R&D products and it had programmes linked with the SABS, to align certain innovations, and on work done on indigenous knowledge systems. DST was looking at establishing a formal relationship with SABS and some products had to be verified through that Bureau.

Mr Muofhe also spoke to the budget for NIPMO. He said that R25 million budget was not nearly sufficient to allow NIPMO to do its work. DST was utilising the process of bidding, to request additional funds for NIPMO from National Treasury, since NIPMO was a new establishment and was slowly beginning to be introduced into funding processes. Currently, it had been able to “scavenge” for funding from different sources to ensure it did decent work and had been trying to help some universities to establish offices of technology transfer. The protection of intellectual property was important, and the level of knowledge and understanding of various institutions varied, hence the need for more funds.

The Chairperson commented that the budget of NIPMO was an important area for discussion.

Dr Auf der Heyde thanked his colleagues for their contributions and commented that science only grew through rigorous scrutiny and the Department could similarly only improve through rigorous scrutiny.

Mr Kekana expressed displeasure over the R21 million spent on consultancies, suggesting that this could be split and DST could rather have offered 210 students at R100 000 each to further their studies. He added that many South African professionals could be employed to do labour relations services instead of using consultants for such service. He requested that consultancies be stopped with immediate effect, as he was not convinced on their need. He suggested that instead, people should be employed permanently, according to ANC policy. He added that the money could also have been used by all provinces to set up science mini schools or laboratories in high schools, to teach students science and technology.

Ms Mokoena clarified that the consultancy fee was not spent on labour relations services, but rather on legal services, when DST was involved in court actions, and needed a lawyer to represent the Department in court or in arbitrations. Although DST would firstly approach the State Attorney, it could happen that this office did not have enough capacity to deal with the matters, and would recommend that additional expertise be hired. There was work that required specific expertise in certain areas.

Mr Khubisa asked for the number of funded posts in the Department.

Dr Ngoma confirmed the funded posts as 494 posts.

Ms Mokoena replied that the number was as at the end of June 2014.

Mr Khubisa commented that so many factors could affect the completion of PhDs, such as the supervisor going on sabbatical leave, or other social factors that may cause a student not to finish in the two to three year anticipated period, including work pressures, and these could drag on for much longer. He asked the DST to look into these factors, as money had been invested by the Department and it needed to receive value for money.

Dr Auf der Heyde replied that DST had several engagements with the Department of Higher Education an Training, National Research Foundation and Higher Education South Africa, to look at how it could systematically continue improving the training environment around the PhD. This year it commissioned a study to explore why so many students decided not to pursue postgraduate training, and the factors affecting their decision. It was assumed that funding was a key factor, but the full results on constraints would be known by the end of the year.

The Chairperson thanked everyone for their contribution and asked the Deputy Minister for contributions.

Ms Zanele Magwaza-Msibi, Deputy Minister of Science and Technology, thanked the Portfolio Committee on behalf of the Minister and senior management of the Department for the manner in which Members had engaged with the Department. She had seen a high level of understanding on issues that needed to be tackled by the Department. She understood the concerns raised with the Department on high utilisation of consultants but said that this was a problem common to all departments. DST would look again into its use of consultants. She agreed that visits to centres, projects and entities would be critical to understand what these entities were doing on behalf of the Department, as it was important to get value for money given to these entities. She welcomed all comments made and added that she was happy that DST had highly qualified people who were working well, and were not highly politicized, within a Department that was results-driven. The Department had been receiving unqualified audit and clean audits from the Auditor-General, which showed good fiscal discipline, as compared to other departments where there was corruption South Africa was below par in terms of Science and Technology, hence the need to ensure that all people were to be able to assess Science and Technology. She suggested that in the next financial year, science centres should be increased in deep rural areas to allow children, black children in particular, to access science and technology, and agreed that the focus to date had been more on postgraduate students. It was necessary to ensure a stronger link between DST and the Departments of Higher Education and Training (DHET) and Basic Education (DBE) to assist students at lower levels. She thanked the Committee on behalf of the Department.

The Chairperson commented that science was about asking and answering “why” questions, and life was dynamic. He added that he had seen more in this presentation that human and financial resources, and was pleased to note, in the DST, a passion to work. He said the Committee would be visiting the entities. He added that the budget would be accepted, but subsequent budgets would be interrogated thoroughly. He commented that consultancy allocations were “out of order” and needed to be reviewed. He noted that the budget debate would take place on 22 August. He thanked the Members for their searching questions.

Ms J Terblanche (DA) commented that she and Dr Lotriet did not have the power to approve the budget at this meeting; it would first have to be referred to the Party caucus.

Mr Kekana gave his apologies for the next meeting as he had been deployed to the Magistrates Commission, but said that he was happy to vote in favour of the budget being accepted.

The Chairperson commented that the next meeting was re-scheduled to allow for a quorum.

The Deputy Minister commented that, DST having tabled the budget before the Portfolio Committee which monitored the work of the Department, further issues to the Minister and Deputy Minister should be tabled in Parliament; they could not respond to issues raised during the budget debate.

The Chairperson explained that the reason for interrogating the Department was for the Committee’s satisfaction on the budget.

Members proceeded to discuss when would be a convenient time to review and adopt the Committee Report on the budget, and the DA noted again that it must reserve comment until its party had caucused. It was agreed that the next meeting would be at 08:30 on the following Thursday.

The meeting was adjourned.