The Department of Science and Technology briefed the Committee on its Second Quarter Performance and Financial Report. The Director-General related numerous successful activities that the Department had engaged in to promote science, technology and innovation, including a number of highly successful conferences and ongoing successes with the SALT telescope and other telescopes in the vicinity.
Of 27 output targets, the Department had managed to achieve 22 or 81% of them. Programme 3: International Cooperation and Resources had only attained 33% of its targets and the Department indicated some of the challenges experienced, both in that programme specifically, and more generally, in attaining targets. Contracting processes were slow, the lack of personnel was hampering project management and poor administration by funding recipients was hampering dispersal of funds. As part of the cooperation initiatives facilitated by DST, 50 students had been targeted for participation in international training programmes offering a postgraduate qualification, but only two were participating by 31 March 2018 as a result of the information on bursaries only becoming available later in the year.
Only 59% of the total allocated budget of approximately R8 million, including parliamentary grants, had actually been spent in the quarter, resulting in a 15% deviation of actual expenditure against planned expenditure. The Director-General mentioned that the Department had received an unqualified audit opinion in the 2017/18 audit report.
The Members commended the Department on its second quarter report and the presentation. One Member asked for information on the allocation of bursaries as he was concerned about the multiple allegations and appeals from various student movements advocating for students who more deserving of the funding than those who had been selected. One of the Members asked if there were any preventative measures to alleviate the process delays that were due to outside circumstances beyond the control of the DST. Members expressed concerns about the departmental underspend.
Members proposed that the Department shifted its focus towards more disadvantaged communities and considered hosting its National Science Week (NSW) in rural areas and townships.
The Chairperson welcomed the Committee and the Director-General of the Department of Science and Technology. She asked the departmental officials to introduce themselves and to commence the presentation immediately.
Presentation by the Department of Science and Technology (DST)
Dr Phil Mjwara, Director General, DST, presented the Second Quarter Performance and Financial Report.
DST had submitted a draft White Paper on Science, Technology and Innovation (STI) which was approved by Cabinet for public consultation on 5 September 2018. The Department had held a summit on 9 November 2018 and had received a number of comments on the White Paper that were currently being processed. The White Paper had to be finalised by the Department by the end of November. It should be finalised with the Minister’s office by mid-January 2019 for consideration and adoption by Cabinet.
A conference on Indigenous Knowledge Systems had been held in North West in September 2018. It was attended not only by Portfolio Committee Members but also by a number of international experts on Indigenous Knowledge Systems.
In facilitating human capital development, the Department had awarded bursaries to a total of 2 952 PhD candidates as well as 8 747 pipeline postgraduate students studying Honours and Masters. 712 interns consisting of 611 graduates and 111 students from the National Research Foundation and the National Youth Service were placed in the Search for Extra-terrestrial Intelligence (SETI) DST-funded institutions. The National Science Week (NSW) was launched on 28 July 2018 at the University of Mpumalanga in Mbombela and 81 grant holders had engaged the public in science awareness activities across the country.
In terms of international cooperation and resources, the Department, in collaboration with Hitachi, had hosted a send-off reception for six engineers who were going to Japan for the 2018 DST-Hitachi Scholarship for South African Engineers on water and sanitation services and technology. To date, the scholarship had benefited 37 South African engineers.
Of 27 output targets, the Department had managed to achieve 22 or 81% of them. Programme 3: International Cooperation and Resources had only attained 33% of its targets and the Department indicated some of the challenges experienced in that programme. Contracting processes were slow, the lack of personnel was hampering project management and poor administration by funding recipients was hampering dispersal of funds. As part of cooperation initiatives facilitated by the DST, 50 students had been targeted for participation in international training programmes offering a postgraduate qualification, but only two students were participating by 31 March 2018 as a result of the information on bursaries only becoming available later in the year.
Only 59% of the total allocated budget of approximately R8 million, including parliamentary grants, had actually been spent by DST in the quarter, resulting in a 15% deviation of actual expenditure against planned expenditure. Of the allocated budget of R8 million, 92.3% was allocated to transfer payments, 4.4% was for the compensation of employees, 3.1% was for goods and services and the remaining 0.15% for capital assets. The Director-General mentioned that the Department had received an unqualified audit opinion in the 2017/18 audit report.
Mr N Koornhof (ANC) commended the Department on its second quarter report and the presentation. He referred to writings on previous civilisations and asked if there was a possibility of unravel the mystery of an ancient civilisation that existed in the distant past that was even more intelligent than people today.
Mr M Kekana (ANC) commended the Department. He recalled that he had once asked for the number of companies that benefited from the MeerKAT (Square Kilometre Array – SKA) and pointed out that he was still awaiting a response. He requested a list of the students from all the Departmental entities who had received bursaries, along with the family background assessments of each student. He explained that he heard multiple allegations and appeals from various student movements advocating for students who felt more deserving of the funding than others and considered themselves snubbed by the rejection of their application. He reckoned that the financial standing of the families had to be taken into consideration, most particularly in cases where potential bursars had similar academic records.
Ms A Tuck (ANC) referred to the Department’s classification of reasons for variances due to underachievement and asked if there were any preventative measures in place to alleviate the process delays that were due to outside circumstances beyond the control of the DST.
Ms T Motshidi (DA) asked if there were any support structures for achieving and overachieving students, aimed at ensuring that not even minor problems were neglected.
Ms A Mfulo (ANC) commented on the deviation between the planned expenditure and the actual expenditure, suggesting that the Department had underspent significantly.
The Chairperson shared the story of her visit to the rural village of Nkungumathe, in Nkandla, KwaZulu-Natal, to speak to local learners and other community members about the importance of science and technology. She reported that an NPO operating in the community, had requested that the DST hosted its National Science Week (NSW) in the area in future.
The Chairperson also welcomed the send-off of six engineers to Japan for the 2018 DST-Hitachi Scholarship for South African Engineers on water and sanitation. She added that she hoped that they would return with valuable knowledge which could help to propel the KZN water project, by Hitachi. She also requested the Department to find out what was causing the delay in the commencement of the project. Based on the current progress, would the annual target of facilitating 550 international partner organisations be achieved by 31 March 2019? Regarding the classification of reasons for variances due to non- or underachievement, were the target formulation deficiencies improving?
Ms Mfulo supported the request from the Nkungumathe community and asked if it were possible to plan a National Science Week specifically for more disadvantaged communities in rural areas and townships.
Dr Mjwara responded to Mr Kekana’s queries by indicating that he would follow up with the programme 4 administration, who kept record of the questions and which ones whose answers had been submitted to the Chairperson of the Committee. He added that he would check the progress of the process and request further information from the funding agencies (mainly the NRF), if it had not been activated.
Dr Mjwara indicated that the Department had started to address the problem through various policy initiatives. Firstly, there were Ministerial guidelines that had been issued for the NRF to target different communities and to determine the percentage of bursaries designated to each of them. He added that the NRF was expected to report on the matter to the DST. The NRF funded only 10% of postgraduate (PG) students, the remaining 90% were funded by the Department of Higher Education and Training (DHET) and, presumably, other funding institutions. That raised the question of how to solve the financial barriers for students pursuing PG studies. How many students could be well-funded, how many should be partially-funded and how many would have to seek funding elsewhere? Once the NRF Board had finalised the policy, it would be submitted to the Minister’s office for consideration.
In response to Ms Tuck’s question concerning process delays, Dr Mjwara clarified that the DST tried to work with the implementers. For instance, the DST relied on the timely reception of the internal audit reports in order to finalise the quarterly reports, before presenting them to the Committee. The funding information, from the funding agencies, was often not readily available on a quarterly basis. The biggest challenge to alleviating the target formulation deficiencies was the accurate estimation of students being funded. The DST had subsequently negotiated with the Auditor-General to be allowed a 2% tolerance (above and below) of the set targets.
Dr Mjwara assured Ms Motshidi that the Minister had encouraged the DST Executive Committee not to rest on its laurels when all was going well. Sometimes the more significant challenges were on the softer issues. In a strategic plan evaluation meeting, she had advised them to identify their soft skills, those not related to technical and scientific skills that would boost staff morale. She had challenged them to find ways of modernising their methods of monitoring and evaluating projects. In the long-term, the White Paper had identified some critical challenges that were hindering the improvement of the organisation. For example, although the number of PhD graduates had increased, some were still not being absorbed by the work environment. To address that issue, DST, in conjunction with the NRF, had initiated a tracking system that followed up on the progress of those graduates. Another measure was coming up with ways of ensuring that the institutions listed on the Nation System of Innovation, were expanded sufficiently to be able to accommodate the graduates.
Dr Mjwara acknowledged that the15.4% deviation of the expenditure was high and pointed out that it could be attributed to the process followed by the DST in setting up its tracking system of the annual cashflows and also the variations permitted by National Treasury. He indicated that there was also an unusual arrangement pertaining to how contracts with the NRF were finalised, that caused delays. The bottom line, as per the PFMA regulations, was that the budget allocated for the financial year had to be spent according to the planned objectives and utilised effectively and thus the financial books were being evaluated to ensure that there were no funds were wrongly unused.
Dr Mjwara recognised the suggestion about the NSW but indicated that DST had targeted the Mpumalanga province in the current year as working with historically disadvantaged institutions was a way of reaching out to disadvantaged communities. He added that DST ensured that the NSW comprised activities that would target rural areas, over and above launching and hosting the event in such areas. He stated that DST would consider erecting a science centre in the area visited by the Chairperson during the planning for the roll-out of science centres. That would facilitate public engagement.
Mr Mjwara indicated that DST would find out what was causing the delays in the water and sanitation project in KZN and then formally report to the Chairperson. The Department had 90% certainty that it would achieve its annual target of facilitating 550 international partner organisations because the relationships were well-established.
Ms Pretty Makukule, Chief Financial Officer, DST, agreed with Ms Mfulo that the 15.4% deviation was material and indicated that Treasury had set an 8% limit, stating that if a department exceeded that limit, management had to take immediate action to rectify the situation. She explained that most of the implementing agencies had the same financial year as the Department. The Department had to wait for the audit reports of those agencies in order to finalise their financial performance assessment. The Department withheld funds from the agencies that did not provide evidence of the effective use of funds in achieving the targets for the reporting period until a satisfactory report had been submitted.
Ms Makukule stated that, in the first quarter, there had not been any material underspending. In the second quarter, a deviation between 5% and 8% was acceptable. The limit had been exceeded in the month of September when the reports from the agencies were received.
Ms Makukule pointed out that the Department was currently running two parallel processes. Firstly, a catch-up plan for managers in the Department who were responsible for overseeing the agencies had been submitted to the Executive Committee. She added that some of the plans would not be implemented, as indicated during the main presentation. Secondly DST reprioritising funds to other areas that were experiencing budgetary constraints. That process was expected to be concluded by the end of December 2018. To alleviate underspending, the Department would try to enhance its internal processes, such as tightening the contracts with the entities, especially when there are non-performance issues and delays in report submissions. At the CFO level, the Department interacted with its counterparts to optimise cashflow management to reduce the surplus funds being retained.
Mr Takalani Nemaungani, Acting Chief Director of Astronomy, DST, responded to the question posed by Mr Koornhof. The portfolio consisted of Palaeosciences and Astronomy, which were both about studying the past in order to understand the present and to predict future phenomena. The signals received from the telescope typically travel through space for a long time and when they get to the telescope, their travel time could be used to determine what had occurred before they arrived. The science centre in Sutherland had an optical telescope and an exhibition showcasing astronomical history. He stated, in his conclusion, that ongoing, extensive research studies were being conducted.
The Chairperson thanked the Department and commended it on its performance for the second quarter.
The meeting was adjourned.