TIA; HSRC; SANSA; ASSAf and CSIR on their 2014/15 Annual performance

Meeting report

Technology Innovation Agency

Mr Barlow Manilal, Chief Executive Officer: Technology Innovation Agency (TIA) described the organisational framework, where he said form followed function. Organisational redesign had taken place in the 2014/2015 financial year. The board had approved the strategy and the ministerial review input had been welcomed. The objective was to improve efficiency and effectiveness, and reduce costs. The aim was to strengthen leadership because the leadership had not been finalised for a long time. He was proud that Section 189 had been concluded with no forced retrenchments -- employees had been offered voluntary severance packages. They were working on stabilising the organisation to make it leaner and more streamlined.

 

He said the Agency had exciting projects, innovations and programmes which were aligned to government outcomes and the National Development Plan (NDP)  

PST Sensors had developed a silicon nanoparticle thermistor that could be printed on almost any materials, including paper, fabric and polymer film. The project had been spotted by America’s National Aeronautics and Space Agency, so it had global appeal and impact. Kappa Biosystems’ highlight had been the discovery and commercialisation of novel protein-based products which had an international market.  Staff numbers had grown from 50 to 110 employees, and returns of R 57 million had been reinvested into projects.

Support had been provided to small and medium enterprise (SME) technology platforms. 169 students had been supported, of which 60% had been post graduates. One project had obtained a United States patent. The Agency had plans to expand on co-funding. Forty technologies had been developed through platform support and 145 client projects had been supported.

Mr Barlow said the Committee should bear in mind that all this had happened while the Agency was in transformation.

The TIA’s seeding ideas had seen two new companies being incorporated from higher education institutions (HEIs), nine projects had completed in HEIs, 23 patents had been registered for seed-funded projects, and 74 SMEs had been were funded. The TIA had been extremely active in growing SMEs and would continue to do so in its future plans.

Agriprotein’s innovation had been the development of a maggot-based animal feed protein as an alternative to fish meal. The project had received R 90 million from local and international investors to build three production factories in South Africa.

Advanced imaging technologies were being employed to monitor damage in conveyor belts, using electro-magnetic waves. This innovation was a key to reducing costly downtime. Estimated annual turnover for 2014/2015 financial year was R16.9million, and R2.4 million in royalties had been paid to date.

 

TIA’s youth development initiatives had enjoyed many successes. 14 youth business enterprises developed, one full South African patent had been filed, and 17 fully functional prototypes had been completed.

TIA was engaging in investment impact studies to assess the return on investments and to get a sense of the contributions to the economy. Investment impact numbers for 2014/2015 indicated that revenue generated had amounted to R1.8 billion, 506 jobs permanent and temporary had been created, and a further 326 jobs had been created at technology stations and platforms.

Mr Manilal said that global partnerships were the connecting role of TIA. Three TIA-supported companies had won R100 000 each for the best innovations at the Innovation Bridge event. The Agency would be playing a more decisive role at this event in the future.

The TIA would like to strengthen ties with Africa. Key partnership activities -- institutional capacity development, collaborative technology development, market access and technical cooperation – had been agreed upon. It had hosted five delegations, from Angola, Kenya, Namibia, Sudan and Zimbabwe. It had signed a memorandum of understanding with the Namibian equivalent entity. It would like to play bigger role in influencing policy.

Third party funding for the TIA had increased in 2014/2015 to R 200 million. The number of new investments had dropped, but the value of the investments had increased. The number of SMME’s assisted increased to 2 188. Knowledge innovation products had increased, bursaries had increased, seed funds had significantly increased, but youth projects funded had decreased. TIA had had a clean audit for two years, and it was targeting zero irregular, fruitless and wasteful expenditure.

Overall, the TIA had achieved 73% of its key performance indicator targets even while in transition. 63% of those targets had been exceeded, and all the strategic outcomes had been achieved.

The TIA had embarked on a clean-up exercise, where they went back to inception for a complete audit. The result had revealed there had been R42 million in irregular expenditure from 56 contracts which had not been completed according to regulations. It had not been fruitless expenditure, as they had derived value. This had occurred mostly between 2010 and 2012. The board had agreed to wipe the slate clean. Internal controls had been improved.

When looking at the Medium Term Expenditure Framework (MTEF) and DST-contracted funding, Mr Manila said they had proved that they had sorted out the governance issues and improved the financial fitness, but the budget allocation was decreasing. The TIA had convinced the Committee of its capabilities and urged them to be generous in its funding allocations after the 2014/2015 budget cuts. Investment income had been R 57 million. The organisation was looking at business development processes to access alternative funding streams.

Mr Manilal said grants and expenditure had declined. They were hoping that it would grow over the next period in response to the country’s challenges. Administration and employee costs had been targeted to be no more than 30% of the budget. This target had been achieved, but the TIA would probably be slightly over target in the next period. Generally, the operating costs were efficient.

He said that he could give the Committee the assurance that the current initiatives were to improve the TIA’s stability and growth. The concerning governance issues had been resolved. He was confident that the organisation was agile and efficient, that it was capacitated around planning, risk management, marketing, business intelligence and monitoring and evaluation, with the aim of no recurrence of past problems. At the last meeting, the Committee had been critical that TIA was below the radar and their projects were not being showcased adequately. They were working on aggressive plans to address this.

Discussion

The Chairperson asked how the TIA took scientific knowledge and turned it into innovation.

 

Ms L Maseko (ANC) requested the TIA to send the demographic information to the Committee on those who had benefited from their initiatives. She had attended the Council for Scientific and Industrial Research (CSIR) conference, and had seen the businesses incubated by TIA. She had been impressed by the packaging of the products. Upon interacting with the business owners, she had noticed that there was no market for these products. She could not find any when she went to stores. Some had markets outside the country. She wanted to know what strategy there was to help market the products so that South Africans could find them on the shelves. Along with that, she asked for an assessment of the impact study on those businesses that had been helped.

She asked for a projected ideal budget that the TIA would need to perform optimally. She wanted to know where the production factories for Agriprotein projects would be built.

Mr N Koornhof (ANC) said the TIA had been operating at a deficit for the third consecutive year, and asked for a projection of the deficit at the end of the next financial year. He believed that the Department of Trade and Industry (DTI) Design Institute should be with TIA. He asked what the link between TIA and the Design Institute was, and if there was not a link, why not.

Response

Dr Sibongile Gumbi responded that the Agriprotein production factories would have one facility in the Western Cape and two in the Eastern Cape. She said that TIA had a memorandum of understanding with the Design Institute to work with the technology programme and with the youth technology innovation programme through stations to develop prototypes. There was a voucher system that allowed TIA researchers access to the Design Institute.

Mr Werner van der Merwe, Chief Financial Officer, explained that the graph indicating deficits also showed the funds utilised. Where the graph was below the y-axis, it indicated that the TIA had used its accumulated surplus and approved roll-over budgets, if the surplus was eroded. In the current year, there had been a R60 million accumulated surplus.  He predicted one year of deficit, and then they would break even.

Ms A Tuck (ANC) noted that Kapa Biosystems had 86% of their staff based in the Western Cape. She asked if they had all been head hunted from the Western Cape or from other parts of South Africa too.

Dr Gumbi said that the company was in Cape Town and the rest of the offices were in the global markets, which was why the majority of the staff were from the Western Cape.

Mr Mmboneni Muofhe, Deputy Director General: Technology Innovation, DST, offered to explain the reason for the lack of marketing of the innovation products. He said it was part of the lessons they had picked up. There seemed to be mistrust from some of the people the programme was assisting. The Department had started to focus on the whole value chain -- even parts that were not in their mandate. They had engaged stakeholders in the different specialities to resolve value chain hiccups. Stakeholder engagement was also crucial, because adhering to standards could be an impediment. Adhering to standards meant supermarkets were assured of a quality product. The South African Bureau of Standards (SABS) was on board. Benefit-sharing agreements had been negotiated to ensure producers got a fair share. The Department of Trade and Industry had been engaged to assist with incentives. This project deployed all entities to ultimately ensure that communities were not left behind. The Department was also training young graduates for maintenance work. Before, repairers would have to drive out from afar to fix production lines, but now the Department was training local talent to become part of the project. He hoped that working together would become evident in future products, and help to resolve the trust issues. He added that they were training people in entrepreneurship, as products could fail due to a lack of business running skills.

Chairperson said he had noted the allocation decrease. He suggested that the TIA should go into other areas, like indigenous products.

Mr Manilal responded that they are looking at indigenous products and township work. They had arrangements with the Department of Trade and Industry because some projects fell in their domain, making coordination necessary.

He said the Agency’s needs exceeded the current budget, but in five years’ time the ideal budget would be R800 million. In two years’ time, R600 million would be needed for the programmes.

The Chairperson said that businesses were not willing to take on the risks that accompanied innovation, so the TIA was taking the risk on their behalf. He added that he would motivate for their ideal budget.

Human Sciences Research Council

Prof Crain Soudien, CEO: Human Sciences Research Council (HSRC) said the Council appreciated the grant they had received, and there was no doubt that they were not seeking a reduction.

The Council had managed to achieve 71% of their objectives for the 2014/2015 financial year. It had performed well in knowledge advancement, data preservation, transformation, financial stability and contributing to development and social progression in Africa. They had not done well in skills enhancement, achieving only 40% of their targets. He said it was a national concern, and HSRC were not absolved of responsibility where they did not meet their targets.

It was the first time that they had not exceeded their target for peer-reviewed journal articles. The target had been 96% achieved. All other publication targets had been exceeded. Research capacity development targets had been exceeded, with Master’s interns. The target with the PhD interns had been slightly missed -- only 21 of the targeted 27 post doctoral interns had been developed due to structural problems.

With regard to transformation, the problematic area was with black senior researchers. Currently they represented only 42% against the targeted 54%. It was a systemic problem, but the HSRC would build relations with universities on how to turn these targets around. Female black professors made up a very poor 6% of the pool, which he said was completely unacceptable.

The HSRC was doing well in all collaborations, public dialogue and data preservation targets, even though they were stagnant in datasets preservation.

Extra-parliamentary funding had been targeted at 48%, but HSRC had received 39%. It had been a stretch target that had been put to their programmes in a fairly demanding way. It was hard to raise money for social sciences -- it was easier for hard sciences. The Council repeatedly needed to argue the importance of its purpose. They could get to the solutions only with more money.

The Council had placed emphasis on ethical behaviour on how employees should conduct themselves with the focus on integrity, honesty, and awareness of the dangers of corruption.

Prof Soudien said governance risk was an area to which the HSRC was aware they needed to pay more attention. They had lost staff members in risk management, but would be filling the vacancies shortly.

Ms Priya Singh, Chief Financial Officer, said the HRSC had received a clean, unqualified audit with no adjustments and only one finding. It was the third consecutive clean audit opinion and she hoped it would be motivation for additional funding. The finding had been in IT governance, but it had been resolved post audit. They were down from 44 findings in 2008 to one finding in 2014/2015. Internal controls had been strengthened so a target of zero findings had been set for next year.

The income targets had been achieved. They received had 100% of the grant and the absorption capacity had been good. Other income referred to rental income from the cafeteria and other parts of the building.

The HSRC was below budget in expenses through not achieving their research income targets. This influenced how they spent in operations. Staff costs had been slightly over-spent, but they had recovered R55 million from external research projects through time billing, which had not been shown on the slide.

Ms Singh showed a review of income generation over the past ten years. Other income had stayed constant and Parliamentary income had increased. The incorporation of the Africa Institute of South Africa (AISA) had resulted in a 60% increase, and research revenue had not been steady as it was dependent on whether researchers obtained funding, and the global perspectives.

Mr Temba Masilela, Deputy CEO of Operations, presented on the Council’s research excellence. He said that HSRC was a public service and the adepts did not do justice to the range of publications produced and the benefit to the public.

The HSRC press was open to the public and freely available for knowledge production and dissemination. Peer-reviewed scholarly articles and commissioned work had been done for government departments. 52 articles had been completed and had had a direct effect on policy making. Research was intended to inform policy. The HRSC was tracking the impact of their research on policy and ensuring that the research was closely aligned to national priorities. Social and economic dynamics in townships around spaza shops had been researched.

The HSRC was putting great emphasis and focus on humanities, as it was fundamental to understanding social change. As requested, they were working with the National Institute for the Humanities and Social Science by collaborating on various projects that looked at heritage issues, indigenous languages, and concept formation in African languages. They had a research project called Human and Social Development, which focused on insights and methodology in humanities, such as gender, culture, languages, identity, racial and ethnic division.

The HSRC had collaborations with various universities and other councils. These collaborations included joint research, active MOU’s, and training researchers from universities. With large projects that were commissioned to the HSRC, they used university students and the staff had joint appointments to assist post-graduate students.

Mr Masilela gave the Committee an update on AISA’s incorporation into the HSRC. He said the staff met monthly, and they met with the National Research Foundation, the DST and CSIR, to ensure alignment. They were currently looking for an executive director for AISA.

Discussion

Ms Maseko wanted to know what HSRC’s main challenges were for the Portfolio Committee to intervene in order to make their work more productive. She also asked what their ideal budget to perform optimally was.

 

Mr Koornhof said that HSRC’s challenge was to cut down on administration costs, but their salary bill was up. He asked what a fair salary bill would be, noting that its bill was around 50% of its allocation, compared to the TIA’s being 30%.

Mr N Paulsen (EFF) said the HRSC needed to address transformation. He asked how they planned to address the continued lack of transformation and the lack of black female researchers. Who funded the research when the HSRC did research work for other government departments -- or did they expect it to be free of charge?

Prof Soudien said the main challenge was the funding model.  They were assessing the option of having members of staff raise funds, outside of Parliamentary funds.  The strategic planning meeting for the board was in a month, and the funding issue was top of the agenda. The ideal budget was not finalised yet. They were talking to the DST about it. It would be comforting knowing that longitudinal studies were financed by ring-fenced funding or guaranteed in some way. If they knew they had recurring waves of funding, it would place them in a better position.

Transformation was something they could not do themselves. They were at the closing end of the process where students became competent in their own right. The HSRC needed to be in a close relationship with universities, and engage students from an honours level. They needed to entice them to be a scholar. Many students were sitting with huge debts and their first instinct was to work to pay off the debt. They needed to change those circumstances and the HSRC was willing to participate in changing all that.

Departments were supporting the HSRC and paying for work done, but they expected it to be cheap. They could not always compete with universities, which were much cheaper, but could offer support services which the universities could not. He thought the HSRC needed to explain their cost structures better to the departments.

Ms Singh said the salary bill concern had been raised by the DST. She said that entities in science were hard to compare, as their work was intellectual, so they mostly spent on salaries. Other entities were asset intensive. The HSRC was careful not to use consultants. The salary bill was receiving attention to make sure it did not creep up.

South African National Space Agency

Mrs Joy-Marie Lawrence, Chairperson of the South African National Space Agency (SANSA), said there had been a change of board members. SANSA had had a good year, but it could have been better. SANSA had received a clean audit report for the second year in a row. The satellite programme was back on track, and they were in talks with the DST on further funding.

Dr Sandile Malinga, CEO of SANSA, presented the strategic overview, vision and mission. He also displayed the new organisational structure and inaugural board. The racial distribution of the 180 employees was 64% black, 24% white, 8% coloured and 3% Indians. The gender distribution showed that most females were in the support area. The racial distribution was a concern in the technical field.

SANSA has five programmes -- corporate support, earth observation, space science, space operations and space engineering. Under space engineering, SANSA has started building a satellite for South Africa. Along with Nigeria, Kenya and Algeria, each country would contribute a satellite to create the African Resource Management Constellation.

The benefit of space to society was lost on many. The Minister had indicated that they needed to make the public appreciate the use of space. SANSA had contributed to the areas of food security, water, energy, human settlements, health, safety and security. In agriculture and water activities, the World Bank had reported in 2011 that usable land was at 9% and declining, due to encroachment of human settlements, and mining/industrial activities on good agricultural land. Through space, SANSA could look at land globally and best see how to plan utilisation and meet food security requirements. The grazing project in KwaZulu-Natal had determined how not to overgraze land and optimise grazing. SANSA had developed a map of water bodies. South Africa received an annual average of 450 mm of rain and the global average was 860 mm, so how the country used water was crucial. The project developed automated ways to extract water, mapped out how water was utilised and presented updated maps monthly.

For energy conservation, SANSA works with Eskom. They assist in ensuring that human settlements did not encroach under power lines. They assist in determining where to locate power generating activities. They estimated load demand from dwellings, using satellite imaging. A project with the North West provincial government had allowed independent auditing of houses built without having to physically go to the premises. SANSA would eventually develop an automated way to map all human settlements in the country. It was involved in disaster and flood risk maps. They assist the National Defence Force for necessary satellite imaging for security.

SANSA plays a key role in satellite launch support, special geo-spacial networking, and de-orbiting satellites. Transformation activities include the support of students from Honours, Masters and PhD levels. Its facility in Hermanus has 24 students from different universities. SANSA supports 73 students and interns. They also run short courses especially for the National Defence Force and municipalities. They have outreach programmes and have engaged with 11 400 learners directly.

SANSA had been awarded a clean audit. Among other performance highlights, they had acquired 55 000 satellite images, contributed to 35 journal publications, supported 21 satellite launches and provided in-orbit support -- some launches fail or are cancelled. 36 jobs were directly supported by satellites.

SANSA’s asset base had increased by 23% year-on-year due to the satellite admission programme. The revenue had increased and they were realising revenue from satellite projects on an ongoing basis, even though the money went out as soon as it was realised. The largest portion of funding was from Parliament -- R118 million had been received in 2014/2015. It allowed SANSA to plan and strategise better in the long term.

Dr Malinga appealed to the Committee that the funding be looked at. Self-generated revenue -- at R82 million -- was more than half of the allocated parliamentary funds. Chasing funding contracts detracted from doing work and meeting the mandate. He did not believe self-generated revenue would go further. The Agency needed seed funding as they were getting to the point of strangulation. The ring-fenced allocation for the satellite programme had increased substantially. It put a strain on operations, as they were expected to manage huge projects.

SANSA had spent just over R90 million on employee compensation, about R136 million on goods and services, and R87 million on payments for capital assets. Year on year expenditure and revenue had increased. Total expenses were R 314 514 000.

Dr Malinga invited the Committee Members to visit their sites to see the work they did.

Discussion

The Chairperson commented that the South African community knew nothing about SANSA, as they believed science was for the learned and sophisticated. He had been happy to hear a radio interview with a student from the Hermanus campus. The student had made science interesting, but the interviewer had lacked interest.

 

Ms Maseko said she was glad consequence management had been enforced for those that had caused the fruitless and wasteful expenditure. The distribution of professionals by race and gender concerned her. She noted the number of male engineers had sky-rocketed, but the highest point for females was in the support area. She said that SANSA could correct this by targeting universities and through training. They should not be proud of the current state. She requested a breakdown of internships and short courses to see if the entity was conducting impact assessments.

The Chairperson asked whether, in light of the many protests, SANSA was helping municipalities to convince people what land was being earmarked for.

Mr C Mothale (ANC) asked for a better explanation of the professionals’ distribution by race and gender.

Mr Koornhof said that ‘general expenses’ was the biggest amount. What did this cover? If the details were not available now, SANSA could send them later.

Dr A Lotriet (DA) recalled that Dr Malinga had said the Agency was chasing contracts to fulfil their legislative mandate. She asked if they would not fulfil their basic mandate without outside income.

Mr N Paulsen (EFF) said he liked the collaboration with the other African countries to develop satellites, and asked if they were also collaborating with Dr Robert van Zyl of the Cape Peninsula University of Technology. He said the SANSA large images were “blobs”, and wanted to know if they were collaborating with the Centre for Higher Performance Computing (CHPC) for clearer images. He said centres of science must collaborate with each other. Were all the partnering countries contributing to the satellite programme, as he was concerned about the costs?

Ms Tuck reiterated that the gender and race representations needed to change, as they were disturbing, although the programme performance made up for it somewhat.

Dr Malinga responded that the Committee’s concerns were valid. They would communicate what they did more effectively. He agreed that the benefits of space needed to be communicated. The budget was always an issue, as marketing activities were costly. The DST had started a science programme for TV, to which SANSA contributed. As the programme rolled out, some of SANSA’s work would be aired. He agreed that they needed to do more than that.

He said that the irregular expenditure concern had been dealt with. They had set up structures to deal with the issues and were recouping the money from the responsible parties.

In addressing gender issues, SANSA had made a call for 20 research chairs and had received a large number of female applicants. The lack of physics students was a national systemic issue. There were simply too few at universities. It needed addressing at a higher level. He would bring a breakdown of the figures of the supported students in future. They targeted rural communities, and he would include a report on impact. SANSA did interact with municipalities through workshops that had been attended by over 50 municipal members, to make them aware of what SANSA did.

He explained the graphs to Mr Mothale. The left graph was divided by categories to show gender and race disparities. He responded to Mr Koornhof, saying general expenses were largely running expenses.

To Dr Lotriet he responded that seeking funding distracted SANSA from their core function. As a schedule 3A entity, they should be fully or substantially funded by the state. The Act did not quantify ‘substantially’. He believed that self-generating funds should not be more than half of the parliamentary grant. The proportions were not fair, nor enabling. The core grant allowed them to plan, and if it was not guaranteed, then they could not plan. A satellite cost R25 million, for example.

He told Mr Paulsen that SANSA did work with CPUT, although collaboration with CHPC could be better. Many areas of SANSA’s work involved number crunching and they could achieve more by having CHPC assistance, or any other of DST’s ICT infrastructure entities.

The plan was that each country funded its own satellite.

The Chairperson asked if Lesotho and Swaziland had their own satellites for commercial purposes.

Dr Malinga said no African country had one.

Academy of Science of South Africa

Prof Daya Reddy, President: Academy of Science of South Africa (ASSAf), said the entity ran five programmes -- Governance and Administration, Communications and Publications, Liaison Activities, the Scholarly Publishing Programme, and Policy Advisory Governance and Administration.

 

ASSAf had held four council meetings and they had been well attended. Of their 441 members, 25% were woman and 28% were black. They had implemented a strategy to increase these figures and were treating it as a high priority to have a more representative academy. The vice-president, Prof Pat Berjak, had passed away in 2014 and a new HR manager had been appointed in January 2015. He gave a graphical presentation of the membership by discipline, which showed the majority of the members were in the life sciences discipline. There were 33 staff members and two part-time editors for the publications. ASSAf was renting premises, but the goal was to acquire their own premises.

He described the Policy Advisory Programme as the engine room of ASSAf. They had standing sub-committees for health, biosafety and biosecurity, energy and environment, humanities, Science, Technology, Engineering and Mathematics (STEM) education and poverty reduction. The health sub-committee reported on the diversity in human sexuality: implication for policy in Africa.  This was from the legislation passed in Uganda criminalising sexual and gender diversity. They also published on mental, neurological and substance use disorders. They had commenced on a programme on re-conceptualising education and training of an appropriate health workforce for improved health of the nation. The biosafety and biosecurity sub-committee published an assessment study of stock and the capacity to detect, prevent and control infectious agents. The energy and environment sub-committee published a study on the state of energy research in SA, the state of green technology in SA, and SA’s technical readiness to support hydraulic fracturing. In collaboration with a Sudanese academy they had published a report on the impact of artisanal gold mining. They had also collaborated with the German Academy of Science for an environmental and health symposium. The humanities sub-committee’s major activity had been the conference on being controversial, where the aim had been to take stock of the state of humanities by posing key questions. It had had a large South African presence and eminent international speakers.

The STEM education sub-committee had launched the “La main a la pate” (hands in the dough) pilot project that was being implemented in ten schools in the Tshwane south district.

The sub-committee on poverty reduction had revitalised the committee on science for the reduction of poverty and inequality.

Prof Reddy said that each report was the product of many months of work and the findings were published.

The scholarly publishing programme was the open access platform for journals. The Academy reviewed journals and if approved, they were published on the internet for the public.

The national scholarly book publisher’s forum was an editors’ forum which had done outstanding scholarly work in making SA journals available internationally.

The South African Journal of Science was the flagship publication that had been taken over by ASSAf. They had terminated the print format -- the electronic publication was more popular and was a cost saving. There had been a year on year steady increase in its impact factor.

ASSAf had secured many international academy partnerships. They had hosted a number of conferences and workshops, and were continuously seeking strategic partnerships with international academic councils. They had signed memorandums of understanding with Germany, India, USA and Britain. African collaborations were with Uganda, Ethiopia and Sudan.

The liaison programme had had several Women in Science workshops and group meetings, as well as young science awards. “Quest” was a popular publication for learners that had wide distribution all over South Africa.

Mr Morakeng Chiloane, Finance Manager, presented the financial statements showing total net assets of R14 million. He said it was the smallest entity that reported to the DST.

ASSAf had generated a surplus of R1.9 million. This did not mean the baseline allocation had been more than what they could spend. They had been able to generate other sources of income from advertising in their publications, interest generated from short term investments and membership fees. Money not earmarked for particular activities had been transferred to a sustainability fund.

The statement of changes in net assets shows that the surplus reported had been transferred to a sustainability fund. The intention had been for it to go to an endowment fund but they were under constraints from Treasury, which was not in favour of surpluses. In the absence of funding, ASSAf would rather use it for the acquisition of premises, but it was still too little for the decent premises which they needed. ASSAf did not have a boardroom for council meetings. They had to request boardrooms at other entities.

The audit firm had been changed for the sake of rotation. Sizwe Ntsaluba Gobodo had been appointed. They had audited the entity according to the Generally Recognised Accounting Practice (GRAP), which had been a new framework which ASSAf was ill prepared for. A number of findings had been revealed and they were taking steps to address them. ASSAF was engaging other entities and DST who were all diligently providing support. The National Research Foundation had given ASSAF access to their supply chain management database.

Discussion

The Chairperson said he noticed that every entity was complaining of under-funding. He concluded that the DST was under-funded.

Mr Paulsen said he noted a problem in science and technology fields was the low uptake of black female scientists. He asked what ASSAf was doing to address this problem. He wanted to know what the benefits of membership to ASSAf were. What were the reasons for the drop in income of publications?

Dr Lotriet said the audit findings had been substantial. They were not registered as a public entity but had been audited as one. Why was this happening? She turned to the lack of policy and procedures, and asked what time frame they were looking at before they would be completed. She wanted to know if they would comply by the end of the next financial year.

Ms Maseko asked for the breakdown of the organisational structure, including gender and race. She asked for more details on the young physicians who had been sent to Berlin. She noticed the audit findings chart was not green for irregular expenditure, and asked for clarity.

The Chairperson said there seemed to be a grey area between ASSAF and the HSRC, and asked for clarity on their different work.

Prof Reddy said that ASSAF had a dual mandate to elect those who have excelled in science, and everything else that they did addressed science advice and responding to public entities. Therefore, if one compared it to other entities, one might find it overlapped with the HSRC and CSIR, as they were all required to provide advice. The difference was one of emphasis. ASSAf promoted science education across the sciences, whereas HSRC focused on human sciences only.

The concern over the number of black female participants in science was being addressed through a number of organisations who made huge efforts at gaining participation from school level. The “La main a la pate” programme was implementing an inquiry-based programme. Pupils were taught how to get to grips with science. It was a highly active approach. The domino effect was replicated at higher levels. Black women doing science degrees at post-graduate levels where the community of scientists came from had a skewed pool that was not representative. ASSAf was also addressing it at the level of membership. They had other strategies, including finding suitable members.

The benefit of membership for individuals was the honour of being elected. Prof Reddy said the question was not what the academy could do for the members, but what the members could do for the academy. The Science for Community award for innovations that served communities got scientists involved in the communities.

Prof Reddy said the audit findings had been due to it being a new firm conducting the audit. They had never had intense scrutiny of their internal audit processes, and they had not been prepared. They had a small budget and it went straight to activities, therefore they kept a lean organisation. The key thing at the end of the audit was to get clarity on their status and compliance with the Public Service Act. They were waiting on word from the National Treasury and legal advice. The Science and Technology Amendment Act had a clause with which they had to comply. Unless the clause was changed, ASSAf would have to adhere. He added that compliance would cost money, and they were engaging with the DST and the NRF.

The drop in publication income was a result of a drop in advertising due to the economic down turn.

Mr Paulsen said he was still not clear why a drop in advertising caused a drop in income.

Prof Reddy explained that Quest science magazine earned income when people advertised in it. The adverts had decreased, so revenue had decreased.

Mr Chiloane said the irregular expenditure had referred to anything that did not comply with the Procurement Act and National Treasury regulations. The new framework had caught ASSAf off guard, as they were not a listed entity. This had played a role in what was regarded as irregular. All expenditure had been authorised, documented, and had an audit trail. The issues would be addressed by the end of the current year, but some would take longer to implement -- for example, the listing of ASSAF would take time.

Council for Scientific and Industrial Research

Mr Sibusiso Sibisi, CEO: Council for Scientific and Industrial Research (CSIR) briefly covered the key performance indicator categories -- scientific and technical, learning and growth, and financial and governance. Major initiatives had included collaboration with Transnet, involving having a research unit at the CSIR facilities. They were looking at similar arrangements for Eskom and Denel. The Department of Labour had offered its resources.

He said that when tackling poverty, inequality and unemployment, CSIR did not do it through direct jobs but through creating industries that would create sustainable jobs. They contributed through directed research and technology innovations, maintaining an enabling environment and human capital development. He called on the Committee to share their perception of what they believed the role of the CSIR was in this regard.

The challenge of human resources at the CSIR was that they developed people, and then the people left the organisation. At first, they had been grumpy about this, but now their aim was to develop people and if they left, the organisation lets them go and contribute in another space.

The CSIR was ramping up its activities in the field of energy, but other players existed, like Eskom and the universities. The choice of areas involved other entities and councils for a full picture of interventions. Enabling technology distinguished the CSIR from other role players.

Dr Rachel Chikwamba, Group Executive for Operations, said what informed their choice of research was the National Development Plan and its outcomes. The focus areas were the natural environment, the built environment, defence and security, energy and industry.

The natural environment focused on modelling climate change and trying to predict future outcomes to assist with planning. It impacted on water, energy and food production, and CSIR was creating decision-making support systems. They were look at sustainable ways to do marine services and water works. Radar and satellite dishes helped to establish a map of woody cover for SA. They were able to create deeper maps of the land and the extent of cover to remove alien vegetation, and they could also be used to look at vegetation cover and protect wet lands. The CSIR was able to support other departments, like monitoring the fish population for sustainability by using glider technology controlled by satellite and looking into the sea. The gliders communicated data which was used to understand how many fish there were and how they had rejuvenated after the fishing season.

Mr Laurence Cloete, Group Executive for Operations, said the built environment research looked into improving buildings, design guidelines for public buildings, design methods for roads and railways, and transforming human settlements. Another aspect was a water-secure future for the city of uMhlathuze. The mandate could overlap with other entities, so CSIR was rather enhancing municipalities’ capabilities.

They had a strong partnership with Transnet to rejuvenate rail capabilities. Road and rail infrastructure was inadequate in rural areas. SA was unique in that the hub of economic activities was inland and not coastal. The Transnet optimisation facility on the CSIR campus had impressed the President on skills development. They also had laser repair facilities that could repair equipment that would have previously been discarded. The CSIR was able to assess the impact of interventions.

In the areas of defence and security, the CSIR assisted with information security and situation awareness. The CSIR had assisted the SA Navy for pilot landing practice on frigate decks. Rhino poaching was a major project that used sensors and situational awareness to detect the difference between wild life and human movement.

Dr Chikwamba said that they took a two-pronged approach in health -- health care delivery systems and reducing the burden of disease. They were creating a database on health care. Information systems were helping to collect information electronically. They were creating new biotherapeutic technology and devices that were ICT-enabled for basic diagnosis, to determine referral needs. They were looking at understanding indigenous products and supporting them.

The National Health Laboratory System had a shortage of diagnostic skills in pathology. This had created bottlenecks. CSIR had developed devices that could train pathologists and diagnose patients remotely. Their work with these devices in eradicating malaria was getting recognition from the World Health Organisation.

Renewable energy, wind resources, potential areas for wind and sonar sites are all being researched  at CSIR, and the data would be turned into an energy atlas.

Nanoclays that had unique properties, used for cosmetics and improving plastic, paints, etc, had been developed. CSIR was looking at industrial uses for them. Titanium was a new industry. Richards Bay wanted the titanium industry zone to be South Africa, as it had the largest amount of raw material.

Mr Cloete said that in biomanufacturing and biotechnology, programmes for text to speech in indigenous languages were being developed. They had already built language models for all languages for text to speech, and vice versa.

Mr Chris Sturdy, Chief Financial Officer, presented the key performance indicators. He said all targets had been met. Trends had generally been positive. The growth in royalties (3%) had been modest. All targets for transformation in learning and growth had been met. Finance generated and government allocations had been invested in property, plant and equipment to attract the best scientists. Income growth had been 11%, which was healthy. The organisation remained a going concern and their BEE rating remained at level 2.

Discussion

Mr N Koornhof said the Committee knew the CSIR did quality work but the exercise of the meeting had been for them to report what they had done with their allocation. They should have focussed on their financial performance.

Mr C Mothale (ANC) said on oversight, he had observed a lady with creams. The CSIR had assisted her to manufacture the product but she had had no transport to get her product to the market. He asked how CSIR measured the benefit of its assistance, because it seemed some assistance was not the same.

Ms Maseko congratulated them on being the only entity with a completely clean audit. She reiterated Mr Mothale’s request that they track those entrepreneurs they have incubated.

Mr Sibisi said they incubated to a certain degree and then the businesses needed to graduate. They needed additional support from the Department of Trade and Industry (DTI).

Mr Molefe Motuku, Group Executive for Research and Development, agreed that access to markets was a problem. The first phase was to assist with technical requirements, and now they needed to engage with the DTI and other departments to propel the businesses forward. Ongoing support from the DST was essential. He suggested the CSIR should meet with incubators and find out where the inadequacies lay, and claims of differential treatment could be addressed. He asked for a short report on the outcomes.

The Chairperson said he believed science and technology was the answer to most problems. The public and private sectors were working parallel to each other and so would never meet. He said collaboration needed to happen. Government was starting to understand the importance of science and the Committee would make recommendations that would help the entity.

The meeting was adjourned.