South African National Accreditation System & National Metrology Institute of South Africa 2018/19 Annual Performance Plan

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Trade and Industry

27 March 2018
Chairperson: Ms J Fubbs (ANC)
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Meeting Summary

SANAS presented its strategic and annual performance plan (APP), and outlined its risk register as well as actions to improve management of the risks. In order to improve operational efficiency, SANAS would develop and implement a management development strategy, expand its assessor pool, and automate the accreditation processes. These actions would help to address the failure to retain or attract critical skills, and the non-availability of assessors.

New programmes were needed in order to address:

  • The lack of buy-in by stakeholders/experts to support the SANAS process;
  • The timing of regulators to establish the required legislation;
  • Unawareness of regulations by SANAS;
  • Limited skills (assessors) for new programmes;
  • Perceived costs versus the benefits of accreditation.

Actions to improve the management of risk were:

  • Direct interaction sessions with regulators;
  • Involvement in stakeholder forums and drafting of regulations;
  • Subscribing and tracking publication of new regulations;
  • Senior management to pursue regulations sent for comment;
  • Creating a support mechanism to minimise accreditation costs for new applicants by holding an annual induction for new facilities and creating a toolkit to assist small, medium and micro enterprises (SMMEs) with the accreditation process.

Members asked about the retention rate, and whether one existed in terms of the skills development policy; the time-frame to develop and implement an automated accreditation system; how SANAS sourced external assessors; the monitoring system for external assessors to ensure that they were fit and suitable for the job; the main reasons for the failure to retain skilled staff; and how SANAS would address SA’s safety on the Listeria issue.

The National Metrology Institute of South Africa (NMISA) reported that its budget was expected to decrease to R273 million in 2018/19. This had resulted in reduced projected spending on capital expenditure at an annual average of 64%, compared to the three previous years. To cover the resulting gap, NMISA had invested in programmes aimed at increasing external revenue from R11 million in 2014/15, to R31 million in 2018/19. NMISA’s ability to effectively and sustainably deliver on its mandate was dependent on the development of its scientists to the highest level, thus contributing to the increase in operating expenses.

Members wanted to know how NMISA was preparing South Africa for the Fourth Industrial Revolution; the scope of increasing NMISA’s external revenue; what policy and retention strategy existed to deal with the vacancy rate; the impact of project delays; and when NMISA had been approached by the Department of Health to look into the Listeria issue. The Chairperson described the R130 million grant from the Dti as “a joke.” It was not realistic and an approach should be made to Treasury with the projections. If one could not trust the measurements and the calibrations being conducted by NMISA, one would have an avalanche of mortality in hospitals and other aspects affecting the country.

Meeting report

South African National Accreditation System: 2018/19 Annual Performance Plan

Mr Ron Josias, Chief Executive Officer: South African National Accreditation System (SANAS) said that in terms of the constraints on the organisation, threats of a baseline reduction and wage demands were imminent. The strategic objective was to improve SANAS’s operational efficiency to deliver services with a spirit of excellence. To mitigate the risk, the organisation would develop and implement a management development strategy, expand the assessor pool, and automate the accreditation processes. These actions would help to address the failure to retain or attract critical skills, and the non-availability of assessors.

New programmes were needed in order to address:

  • Lack of stakeholders/experts buy in to support the process;
  • Timing of regulators to establish required legislation;
  • Unawareness of regulations by SANAS;
  • Limited skills (assessors) for new programmes;
  • Perceived costs versus the benefits of accreditation.

Actions to improve the management of risk were:

  • Direct interaction sessions with regulators;
  • Involvement in stakeholder forums and drafting of regulations;
  • Subscribing and tracking publication of new regulations;
  • Senior management to pursue regulations sent for comment;
  • Creating a support mechanism to minimise accreditation costs for new applicants by holding an annual induction for new facilities and creating a toolkit to assist small, medium and micro enterprises (SMMEs) with the accreditation process.

The risk register had recorded a failure to meet international requirements, a lack of understanding of the Accreditation Act and SANAS's mandate by other government departments, industry and the public (including staff and assessors), and insufficient funds to maintain regional projects.

Actions to improve the management of the risk were to ensure international participation, develop and distribute relevant marketing material, conduct workshops, identify and train regional resources, and acquire donor funding.

Lastly, he informed Members that SANAS would be moving into new offices between the 7 and 21 May 2018, as the new building had been completed.

Discussion

Mr D Mahlobo (ANC) congratulated SANAS for the technical component of the planning and its quality. There were some issues that needed attention in terms of targets with respect to the outer years, apart from 2018/19. In 2018/19, there was an issue with the development of an e-mail template used for communication between SANAS and clients, and in the next years, there was a repetition of the same output. This raised two issues, one being about the quality of the project itself – one could not develop an e-mail for over two years. Normally, in most instances, year two would be the time for implementation and year three would be for monitoring and evaluation. Perhaps, the manner it in which it was presented might be problematic. It might raise an issue on project management.

There was a target for the vacancy rate in the outer years, but the issue with the target was that there was no improvement and the posts remained the same. However, the way numbers were presented raised a matter regarding the organisational structure -- even though the numbers might be small, this may be flagged at the auditing level. Did it mean that there would be a change in the organogram because of a change in the vacancies? A vacancy meant that the post was vacant and funded, and this would be raised in the audit level as either a material or immaterial issue.

The presentation had referred to an outcome on the acceptance of the SANAS results, where the team had set a reduced target for all the years, and he wanted to know whether this was informed by the concept of a confidence limit (in statistics). However, there had been a time, as outlined in the presentation, where SANAS was achieving 100% on that particular target, so why would it want to reduce it? Generally, he was pleased with the quality of SANAS’s work. More importantly, the organisation needed more money.

Mr S Mbuyane (ANC) wanted to know about the retention rate, and whether one existed in terms of the skills development policy. What was the time-frame to develop and implement an automated accreditation system? How did SANAS source external assessors – was there a plan for localisation and black economic empowerment (BEE) certified companies? As for monitoring, what was the monitoring system for external assessors to ensure that they were fit and suitable for the job.

Mr A Williams (ANC) said when it came to risks, what the main reasons for failure to retain skilled staff were. If this was a new risk, what was the plan to address this risk?

Ms N Ntlangwini (ANC) asked why SANAS was not developing in-house skills to ensure that the assessors remained. On certification bodies, why had the ball been dropped on the Listeria issue? Since SANAS was also managing these certification bodies, – how was it going to guarantee SA’s safety in that area? On marketing, SANAS should not restrict itself to billboards. Perhaps it should host Imbizos and try out other channels to reach more stakeholders. She closed off with a suggestion for a fairer women’s representation.

Ms P Mantashe (ANC) also expressed concern about the gender balance of the organisation, and asked whether it was complying with the 50/50 policy.

The Chairperson was puzzled by the presentation on the risk involving failure to retain skills. She asked for a detailed explanation. What was the ideal of parity for SANAS – it said the skills were there, but on the same page, it pointed out that there was a lack of skills. She asked for an explanation on the approved reserves as outlined on page 16 of the APP. Finally, SANAS was the agency responsible for a critical aspect of the country that impacted on accreditation, so she wanted a full report on the skills priority and why SANAS was failing to retain skills. The risks were of great concern, and the Committee needed to understand the problem.

SANASs response

Mr Josias responded that the retention of skills had been identified as a probable risk that needed to be managed -- should it happen. Currently, there was no legitimate or tangible challenge with skills retention, but there would be an issue if the accreditation managers resigned. To be prudent, it had started to take on full time lead assessors. It had been outlined as a risk, based on the probability of its occurrence.

There were skills development policies in place, but the organisation recognised that it needed to do more, hence the appointment of a human resources (HR) unit who was now working on that policy. The matrix would be provided at a later stage to the Committee. The previous chief financial officer (CFO) of the organisation had resigned after 14 years, so Mr Lunga Saki was now acting in the position, but the team was in the process of making an appointment.

SANAS had a five-year window time frame for the automation accreditation processes, and it was now getting into the second part. The last part, which was phase three, was the on-site assessment process. Hopefully, implementation and the design would be completed this year, and the training the following year.

On the monitoring of entities, SANAS complied with international standards. For it to be a signatory to the international laboratory accreditation and accreditation forum, meant that all accreditation bodies in the world who were signatories to that standard needed to comply with it. Within that standard, there were prescribes that must be complied with in terms monitoring of conformity by assessment bodies like the South African Bureau of Standards (SABS), the National Metrology Institute of South Africa (NMISA), the National Regulator for Compulsory Specifications (NRCS) and other private entities. SANAS assessed them regularly, and the normal cycle was about 18 months. There was an initial assessment that looked at everything. Then there was an interim one within a cycle of four years, and the certification would be a cycle of three years where SANAS did on-site verification. In terms of the black economic empowerment (BEE), we it did that every 12 years, and inspection bodies as well, but every 12 months SANAS would send assessors to verify compliance to the standards. In addition, if SANAS received complaints, it conducted unannounced visits to monitor the situation. The organisation received feedback through evaluations. SANAS’s principal role was to confirm that those organisations complied with the standards.

Currently, the organisation had a staff complement of 76. There were eight lead assessors in the organisation, and the target was to get to 82. The issue that was holding the organisation back was mainly the office space. The critical staff complement had been identified and would soon come on board in 2019.

The reason SANAS did not employ external assessors was because the people they needed had to be current and be working in that particular space. It made use of experts within various industries, but the organisation could not employ those people because they would never be exposed to the developments within that industry. It therefore never employed the technical assessors, but it had employed some lead assessors – the person that looked after the management system -- but there were also external lead assessors who could work across different industries.

SANAS would normally advertise for recruitment. If it started a new programme, it established specialist technical committee (STC) which would consist of a group of experts in a specific area to develop criteria and identify experts in that particular field, and the organisation would draw from that group. The Committee was also responsible for identifying experts, so SANAS taught them assessment techniques. To address the lack of assessors, it had started a process called Project 500, which had ended last year, to recruit 500 assessors and ensure they were demographically spread out. It sourced them from industry through the input of the STC and referrals from the industry.

In respect of Listeriosis, SANAS was involved in the process, and was part of the Dti and the Ministry of Health’s advisory group to look into the issue because its laboratories provided a lot information. The biggest challenge at the time was that Listeria was not a notifiable disease, so there was no obligation to report on it. However, the Minister of Health had now made it a notifiable disease. The issue was not necessarily about the testing, but about the manufacturing, because that was where the disease stemmed from. At first there was a challenge, because the laboratory needed to get the permission from the owner to release the results, but through the notification process some of that had been bypassed. It was something that needed to be tightened, specifically on the certification part –some things had to be put in place to ensure that all manufacturers complied with the requirements.

On marketing, billboards were just one of the channels that were explored, and SANAS did conduct awareness campaigns and communication meetings. It would increase its communication footprint to get people aware of the organisation. The billboards had been more to create general awareness.

Over 79% of the staff complement was female. In the executive, it had been about 50/50 before the CFO resigned.

The Chairperson said that the requested matrix would provide much more detail on the gender balance, and it should also include race.

Mr Josias said he had made note of that, as well as the comments regarding the reduction of targets.

Referring to the salary benchmark, he said it was an issue of affordability and parity. SANAS had had a strike this year and the demands represented a challenge between the total cost to the company and the base. Parity referred to the combination of the two, or when one chose one against the other, one needed to be able to compare them. SANAS had a challenge in meeting the demands, as the calculations indicated about a 94% increase, and this was not affordable for the organisation.

The Chairperson wanted to know how “green” the new building was, as it did not look environmentally friendly from the picture.

Mr Josias said the building was designed in such way that in the future it could get a full certification, but now it had been designed short of certification due to the cost implications.

Ms Ntlangwini referred to the Listeria issue, and said it must be mandatory that when outbreaks occurred, permission should not be required to obtain the laboratory results. SANAS should be permitted to access the results when they were required.

Mr Mbuyane asked whether accreditation was mandatory for laboratories.

The Chairperson said that the remainder of the questions would be responded to in writing.

National Metrology Institute of South Africa: Annual Performance Plan

Mr Ndwakhulu Mukhufhi, Chief Executive Officer: NMISA, said NMISA performed reference analysis and in a dispute in any SA court, its results would be accepted as having the most correct values. For radioactivity standards and dosimetry, it had partnered with the National Nuclear Regulator to establish a radio-activity laboratory to perform independent verification analysis functions. It served the radionuclide production at iThemba LABS through the calibration of a variety of ionisation chambers and activity measurements of various radionuclide. IThemba had been designated by NMISA to represent South Africa in medium and high energy neutron measurements.

The objective of the energy efficiency programme was to research, develop and provide the necessary measurement systems to support the national energy efficiency value. Energy efficiency projects included electrical power and energy, thermometry, solid state lighting and metrology for smart grids.

With regards to the budget analysis, the focus over the five year period will be on:

  • Providing metrology and advanced measurement assistance to specific industry sectors as identified in the Industrial Policy Action Plan (IPAP);
  • Building capacity in the institution to better fulfil its mandate;
  • Research and development programmes;
  • Recapitalisation and modernisation of the Institute’s infrastructure through the replacement of aged and obsolete equipment;
  • Development of a modern NMISA campus to meet the requirements of advanced technology.

NMISA’s budget was expected to decrease to R273 million in 2018/19 due to a reduction in both the NMS and recapitalisation grant. This had resulted in reduced projected spending on capital expenditure, with an annual average of 64%, compared to 2015/16, 2016/17 and 2017/18. To cover the resulting gap from the shrinking fiscal purse, NMISA had invested in programmes aimed at increasing external revenue from R11 million in 2014/15, to R31 million in 2018/19. Its ability to effectively and sustainably deliver on its mandate was dependent on the development of its scientists to the highest level, thus contributing to the increase in operating expenses.

Discussion

Mr Williams said he was concerned that the Dti had not sent the DG to this meeting because every year when the NMISA came before the Committee it raised the same issues. There were financial constraints, and the Dti must give the NMISA more money so that it could build the campus.

Ms Ntlangwini said the campus building was crucial for the country and the health sector, and an important element for South Africa’s safety. It should be given priority, and a cost analysis needed to be conducted for the piece of land that NMISA needed. If the organisation needed that piece of land, it must indicate this so that Parliament could obtain it.

Mr Mbuyane asked how NMISA was preparing South Africa for the Fourth Industrial Revolution. Secondly, what was the scope of increasing NMISA’s external revenue? What policy and retention strategy existed to deal with the vacancy rate? Lastly, what were the other phases of its recapitalisation programme, as well as the impact of the project delays?

Mr G Cachalia (DA) referred to the Africa food safety workshop, and asked when NMISA had been approached by the Department of Health to look into the Listeria issue.

Mr D Macpherson (DA) jokingly wanted to know if NMISA supported Ms Ntlangwini’s proposal to just take the land.

NMISA Response

Mr Mukhufhi said a 5% vacancy rate was allowed. These were positions for PhD students who were already working within NMISA and who would fill the positions when they qualified.

The most exciting aspect of the work of NMISA was helping to prepare SA for the Fourth Industrial Revolution. In the metrology world, NMISA had been talking about it, and it had been led by the Chinese and the Germans. The strategic plan would look at the requirements in that regards. With the Fourth Industrial Revolution, everything was about sensors and sensors were measurement tools. NMISA needed to bring these forward and break them down into smaller elements, which would also create more jobs. It had to be ready to be contributors to the industry. With the marketing team, NMISA would be presenting a strategy in the new financial year that would inform an input-based system about what goes into the standards.

Contributing to the development of regulations was one of the areas that had been identified for this year. Most regulations took the front end approach, but NMISA wanted to take the back end approach. Some of the regulations had not been implemented properly because the measurement aspects of them were not effective. Some regulations had been put in place, but work was now needed to implement them fully, and the Dti could answer properly to this. One needed to ensure that the testing infrastructure pre-empted what NMISA wanted to regulate.

To recruit, the Institute visited universities. It had partnerships with universities and engaged with different departments that were strong in specific areas.

Regarding the retention of skills, Mr Mukhufhi said that when he took over, he was told it took a long time for classical skills to be developed. NMISA was trying to shorten that time from five years to six months, by providing training for what people would be specialists in. It had also implemented a career ladder process.

With regard to taking the land, it had identified the Department of Public Works as the owner of the land, and was establishing how it could be transferred. It required very high tech infrastructure, so NMISA was going to take time to get the work done.

There was scope for an increase in revenue, but it would depend on how NMISA engaged with the industry and the partnerships role, which was why it had been doubled. It foresaw that it would continue along that trajectory.

With regard to Listeria, it had not yet focused on microbiological measures or testing, but there were now structures in place to focus on that.

The Chairperson said that the R130 million grant from the Dti was “a joke.” It was not realistic and an approach should be made to Treasury with the projections. If one could not trust the measurements and the calibrations being conducted by NMISA, one would have an avalanche of mortality in hospitals and other aspects of the country. The Dti was not taking this seriously, and she had reservations about whether it had been communicated effectively to Treasury. She asked for a written report on the issue.

Mr Williams said that the Chairperson should direct the letter to the office of the President.

Adoption of minutes

The minutes dated 16 March and 20 March 2018 were considered and adopted without substantive amendments.

The meeting was adjourned.

 

 

 

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