AGSA briefing on audit outcomes of DSI and its entities; Department of Science and Innovation, HSRC & South African National Space Agency Annual Reports 2021/22
Higher Education, Science and Innovation
19 October 2022
Chairperson: Ms N Mkhatshwa (ANC)
In a virtual meeting, the Portfolio Committee on Higher Education, Science, and Innovation received a briefing from the Auditor-General of South Africa on the audit outcomes of the Department of Science and Innovation and its entities, and briefings by the Department itself, the Human Sciences Research Council and the South African National Space Agency on their 2021/22 annual reports.
The Auditor-General reported that the portfolio’s overall audit outcomes had regressed slightly compared to the 2020/21 financial year because The Human Sciences Research Council had regressed from an unqualified audit opinion with findings to a qualified audit opinion with findings. The findings related to errors in calculating leave liability for employees. Overall, however, the audit picture was positive, as the Department and all of its other entities, including those that were not audited by the Auditor-General, had received clean audits.
The Department briefed the Committee on its annual report for 2021/22. The presentation included institutional outcome goals, performance highlights, performance overview of all its entities, areas of under-performance and financial performance. The Department had spent 99.5% of its R9bn budget. Among other targets, targets for awarding bursaries had not been met.
The Committee was generally positive about the state of governance at the Department but raised concerns about transformation, inclusivity, representation and public engagement, and vacancies, especially at senior management level. They sought greater clarity about the factors hindering the awarding of bursaries.
The Human Sciences Research Council achieved 19 out of 21 performance targets. Missed targets related to the number of PhD researchers, among others. The Council had received a qualified audit opinion with findings. It acted quickly as soon as the problem had been identified and worked hard to recover lost money.
The Committee appreciated the robustness of the HSRC’s response to the Auditor-General’s findings. Members raised concerns about the high vacancy rate and consequence management, and sought assurance that the Council’s research agenda was aligned with the needs of the country.
The South African National Space Agency achieved 16 out of 17 performance targets. The missed target was because the skills audit and workforce plan had not been concluded. Recruitment of a permanent CEO would commence in a few days, and the position would hopefully be filled by the end of 2022. The Space Weather Centre at Hermanus had been completed ahead of schedule and was scheduled to be launched on 4 November 2022.
The Committee asked for an update on the appointment of a permanent CEO and emphasised the importance of inclusivity in space science. Members also sought assurance that the country was reaping the benefits of its geographical advantage in space science and requested details on the Agency’s transition to a new business model, the transfer of certain assets from Denel, and the review of the Agency’s scheduling status.
Briefing by the Auditor-General of South Africa (AGSA) on the audit outcomes of the Department of Science and Innovation and its entities
Ms Nozipho Nekhofhe, Senior Manager, AGSA, took the Committee through the 2021/22 annual reports of the Department of Science and Innovation (DSI) and its entities. The Department itself, the Council for Scientific and Industrial Research (CSIR), and the National Research Foundation (NRF) had obtained clean audits, while the Human Sciences Research Council (HSRC) had received a qualified audit due to a material irregularity arising from an out-of-date payroll system. The HSRC had initially disagreed with the findings but had agreed to take action to address it after meeting with AGSA. The Department, meanwhile, had been able to correct a material finding during the audit process. All audited entities were assessed as being able to continue as a going concern. New irregular expenditure amounting to R24m had been incurred, R20m of which had been incurred by the HSRC. None of the irregular expenditure had resulted in value for money not being received. All three of the Department’s entities that were not audited by AGSA had received clean audits. These entities are the Academy of Science in South Africa (ASSAf), the Technology Innovation Agency (TIA) and the South African National Space Agency (SANSA). AGSA recommended that the HSRC board take appropriate action to ensure that it fixed its payroll system, conduct proper and timely investigations into all instances of irregular, fruitless and wasteful expenditure, and take appropriate disciplinary action.
(see presentation for further details)
Ms J Mananiso (ANC) welcomed the presentation by AGSA. She observed that supply chain management (SCM) issues were raised every time AGSA reported to the Committee. The Committee needed to follow up with the HSRC and the CSIR, the entities that had incurred irregular expenditure. These entities must submit programmes of action on consequence management with specific commitments and timeframes, and provide more clarity on the root causes of audit findings. The Committee should also do in-person oversight at these entities.
Ms D Sibiya (ANC) asked how much fruitless and wasteful expenditure had been recovered. She also wanted to know whether unspent funds had been returned to National Treasury (NT) or whether a rollover had been approved.
The Chairperson noted that these questions would need to be answered by the entities themselves, rather than AGSA. She appreciated the analysis that the AGSA has provided. The HSRC remained a concern, and it was important to understand the Department’s oversight role on the HSRC and to hear from the HSRC itself on what its actual challenges were and when exactly it expected to finalise its leadership.
Mr Lourens Van Vuuren, Business Executive, AGSA, said that the overall picture of the portfolio was that it was performing well in terms of audit outcomes. Many of the entities had a good track record of a clean audit over the last few years. Leadership was indeed important and if a permanent and full-time chief executive officer (CEO) was appointed at HSRC, it would have a positive impact on audit outcome.
Department of Science and Innovation (DSI) 2021/22 annual report
Dr Phil Mjwara, Director-General (DG), DSI, said that the Department was aware of the challenges identified during the audit report. He apologised in advance for leaving the meeting early and asked Mr Mmboneni Muofhe, Deputy Director-General (DDG): Socio-economic Innovation Partnerships, DSI, to present the briefing.
Mr Muofhe provided a comprehensive overview of the Department’s six institutional goals:
- A transformed, inclusive, responsive, coordinated and efficient national system of innovation (NSI): There would be a deliberate focus on just transitions, for example in health, education and energy. The science, technology and innovation Decadal Plan 2021-2031 would be finalised, with input incorporated from all social partners, and tabled to Cabinet in March 2023.
- Human capabilities and skills for the economy and for development: 2024 targets for post-graduate and PhD bursaries and DSI-funded work placements were within reach. The target for general science engagement was reached by the specific target for space science engagement was not reached.
- Increased knowledge generation and innovation outputs: over 9000 articles by DSI/NRF-funded researchers were published and cited in the Web of Science database.
- Knowledge utilisation for economic development: Roadmaps for the Hydrogen/Platinum Valley Initiative and the CoalCO2-X project had been developed. The first of these aimed to kick-start the use of hydrogen fuel, while the second aimed to covert flue gas from coal power stations and industry into onsite industrial commodity streams. Plans for local vaccine manufacturing were also being explored.
- Knowledge utilisation for inclusive development: An indigenous knowledge-based Covid-19 research team had been established. Three formulations had progressed to clinical trials and one had received approval by the South African Health Products Regulatory Authority (SAHPRA).
- Innovation in support of a capable developmental state: DSI projects had been undertaken in all nine provinces in line with the District Development Model, and the DSI had participated in a range of international partnerships.
Mr Muofhe reported that the Department had achieved 48 out of 52 annual performance targets in 2021/22. 24 out of the target of 35 capacity-building initiatives for international cooperation specifically targeting historically disadvantaged institutions had been implemented. The number of honours and masters bursaries awarded had fallen 8.9% short of the target due to the difficulty of predicting demand. 287 out of a target of 392 bursaries for high-level research students in designated niche areas had been provided. 54% of applications for the research and development (R&D) tax incentive were pre-approved, against a target of 80%.
Mr Robert Shaku, acting Chief Financial Officer (CFO), DSI, took the Committee through the financial performance. He reported that the Department had spent 99.5% of its R9bn budget, and analysed spending per programme and economic classification. He discussed future funding requirements for key departmental initiatives and departmental entities. The Department had received a clean audit. No new irregular, fruitless or wasteful expenditure had been incurred
(see presentation for further details)
Human Science Research Council (HSRC) Annual Report 2021/22
Dr Cassius Lubisi, Chairperson of the Board, HSRC, said that he was deeply concerned about the regression of audit outcomes over the past three years from a clean audit to an unqualified audit with findings and now a qualified audit opinion in 2021/22. The board was determined to turn this negative trend around. It had made a commitment to AGSA to implement its recommendations, particularly those regarding consequence management. A review of at least 51 instances of irregular expenditure was already underway. The board was determined to track the audit action plan to ensure that the HSRC was able to address the two material findings, namely incorrect taxation and inaccurate reflection of leave liability. The internal auditor had been requested to conduct a thorough review of the processes and internal controls in this area and report to the audit and risk committee as soon as possible. Management has advised the board that it had taken several steps to tighten the reconciliation and reporting structures, including monthly verification with assistance from a service provider to provide reconciliations as part of the standard reporting and segregation of duties to compile, review, and approve live accrual reports. The board intended to hold management to account for this commitment. Management had also advised the board that disciplinary steps had been taken against key human resource personnel identified for these failures. The system error that had led to a material irregularity was corrected when it was discovered in August 2020. The matter had been disclosed and an application for relief submitted on 1 July 2020. The outstanding liability of R6.9 million would be paid. The board had decided to pursue recovery of the money from current and previous employees. This was understandably an unpopular decision but it had not been taken vindictively. The process of verifying the individual liability for each of the 613 individuals who were affected had been completed and letters would be issued to commence with the recovery process. The risk and audit committee would closely monitor progress.
Ms Sharlene Swartz, Divisional Executive: Inclusive Economic Development Research Programme, HSRC, presented an overview of the Council’s 2021/22 performance. 19 out of 21 performance targets had been reached. In the ‘leadership and knowledge production programme,’ 69% of researchers had PhDs, against a target of 76%. In the ‘transformed research capabilities’ programme, 40 scholarly book chapters were published by HSRC researchers, against a target of 47. She also discussed some of the Council’s notable achievements in 2021/22, which included the national COVID-19 vaccination programme and the publication of the Social Security Review 2021.
Ms Jacomien Rousseau, CFO, HSRC, confirmed that HSRC had received a qualified audit opinion because of material misstatements. No material findings had been identified in relation to performance information, however. Research revenue had increased significantly from R117m to R280m due to international funding, resulting in total revenue exceeding the budget amount of R541m by R48m.
(please see presentation for further details)
SA National Space Agency Annual Report 2021/22
Mr Patrick Ndlovu, Chairperson of the Board, SANSA, confirmed that SANSA had received an unqualified audit opinion. There were however still a number of senior staff in acting positions, including the acting CEO. Recruitment of a permanent CEO would commence in a few days, and the position would hopefully be filled by the end of 2022. Over the past two years, SANSA has made efforts to advocate for using space technology to improve service delivery within state entities. A programme to encourage district municipalities to use space technology for service delivery has recently been launched. This was a key programme because the whole world was moving towards the use of space technology in daily life and South Africa did not want to be left behind. It was important that the public understood the impact of space and space technology on their own lives.
Ms Andiswa Mlisa, acting CEO, SANSA, took the Committee through the performance overview and highlights. Out of 17 performance targets, only the completion of the skills audit and workplace plan had not been achieved. Highlights included deploying Global Navigation Satellite System instruments to address the lack of data in African countries, and getting ISO 45001:2018 accreditation. She noted the high vacancy rate in some programmes but said this was not a cause for alarm because the figures anticipated project-related appointments.
Mr Brighton Jena, CFO, SANSA, said that there had been a significant improvement in internal controls and adherence to regulations and standards at SANSA in 2021/22. The leadership committed to seeing that this status was maintained. He presented the Agency’s financial performance per programme,
Mr Muofhe reported that the Space Weather Centre at Hermanus had been completed ahead of schedule. This included a live 24/7 space weather service. The official launch was scheduled for 4 November 2022. It was something that SANSA could be extremely proud of.
(see presentation for further details)
The Chairperson commended the Department for its ability to manage itself, perform well and utilise its funds. It was one of the best performing departments in government. She was however concerned about issues around transformation, inclusivity and representation not only in the DSI but in its entities. Targets needed to be intentional and measurable to ensure successful transformation of the entire national system of innovation. For example, SANSA mentioned that companies within the South African space market contributed to the global space market. This was commendable but these companies were mostly white-owned. The matter of transformation within the science and innovation space was something South African citizens could not be apologetic about. She asked for clarity about vacancies at the Department and SANSA, and said that inclusivity and representation should be targeted for the anticipated project-related appointments.
There had to be gender-responsive budgeting. This needs to be included in the current budget and the DSI and entities should not wait for lump sums of monies to begin the journey of transformation. Could SANSA provide a precise date for the appointment of a permanent CEO? There were a number of acting positions across the Department and its entities. She appreciated the robustness and honesty of Dr Lubisi’s opening remarks about the turnaround plans at the HSRC. She said it was difficult for the Committee to motivate for increased funding for entities when irregular expenditure was incurred.
Furthermore, how could the Department claim that it did not have the necessary funds for bursaries when it had not met its targets for awarding bursaries? She also struggled to reconcile the Department’s claim that there was no demand for postgraduate bursaries with her experience of young people being unable to pursue their studies because of a lack of funding. Was it because young people wanted to pursue studies in the wrong fields? What was the Department doing to address this disconnect? Could science engagement programmes assist in some way? All citizens should understand the importance of science and innovation and its impact on their daily lives. Holders of indigenous knowledge should be made aware that there were ways of protecting and promoting this knowledge through the Department. Science engagement programmes should deal directly with the particular crises of the day.
Mr W Letsie (ANC) also appreciated Dr Lubisi’s opening remarks about the turnaround plans at the HSRC. However, the high vacancy rate continued to pressure the available human resources. A lack of dedicated infrastructure investment threatened the information technology infrastructure. The financing model remained contentious insofar as it detracted from the ability of senior researchers to respond to critical research needs. What had the new board come up with to address these challenges? Could the board provide details about its plans to refine the HSRC research agenda? What areas of work had been most affected by the resignations and contract expirations in 2021/22? Has there been any progress on the appointment of a permanent CEO? What was the current outlook for achieving 2022-2023 targets for PhD-qualified appointments? What was the HSRC’s view on the material irregularity identified by AGSA, and what actions were being taken to identify and address weaknesses? Had the full amount of fruitless and wasteful expenditure been recovered from the responsible staff? Had provision been made for dedicated capital expenditure for the allocation for infrastructure? Could the Department report on progress of the transfer of the Houwteq facility from Denel to SANSA? What were the key risks at SANSA as it transitioned to a new business model? Had surplus funds been rolled over to the current financial year? He noted that SANSA was seeking a change to its Public Finance Management Act (PFMA) scheduling status: would this require a legislative amendment, and what was the Department’s view on this matter? Why were positions at all the entities not filled immediately with permanent replacements when someone resigned? Could the Department report on the review of its organisational structure and provide timeframes for filling vacancies in senior positions? He asked for a detailed report on the Department’s progress toward its medium term strategic framework (MTSF) targets. He recalled many meetings at which the Department had complained about being under-financed, but in 2021/22, it had underspent by R43.6m, which put the Committee in a difficult position. What factors contributed to underspending? He asked for an explanation of a contingent asset of R3.5m relating to damages claimed by a person called Charisma Bredenkamp [https://pmg.org.za/committee-question/14305/ ]. What were the proposed funding requests for each of the five programmes for 2023/24? What were the most critical funding shortfalls?
Ms Mananiso agreed with the Chairperson that structural transformation could not be postponed. There was a need to include people with disabilities in the DSI and its entities. Entities needed to indicate their youth demographics. It was also important for the DSI to strengthen its awareness programme. Often, when people heard about science and innovation they assumed that it was not for them. It was important to ensure that people were not left behind. To this end, plans around the district development model should be pursued so that people get to know about science and innovation. HSRC should ensure that its critical vacancies are filled and provide the Committee with timeframes. Transformation was something that had to be addressed by each entity. She was happy that the HSRC had a plan to recover money but criticised it for describing some its workforce as ‘unskilled,’ and suggested that the word ‘semi-skilled’ be used instead. She welcomed SANSA’s new business model and hoped that it would share more on this with the Committee. Concerning the National Space Infrastructure Hub, what was the timeframe for securing the investment of R4.5bn and what had been the key outcomes from the feasibility study? What were the key findings and recommendations stemming from SANSA’s institutional review? What support had SANSA provided in response to the flood disaster in Kwazulu-Natal? What progress had been made on the appointment of the new CEO? The DSI should increase its internships and training opportunities at all its entities, and there must be inclusivity in terms of indigenous languages as well.
Ms Sibiya asked how the HSRC supported government’s planning and impact assessment, and were any of its findings utilised by government? Were there opportunities that SANSA was missing due to capacity constraints, and what was the potential social impact of those missed opportunities? How did SANSA protect its intellectual property when employees left? Have there been any incidents of intellectual property being used by former employees? She asked DSI what the demand for high-level research student support programmes was, and was the allocation to the technology diffusion project at the expense of other technology development projects. She observed that DSI had missed its target of 40% expenditure on women-owned companies and asked what plan was in place to prioritise women-owned companies in science and innovation. In what strategic areas would historically disadvantaged institutions pursue international opportunities? How did DSI plan to crowd in private investment in R&D and critical areas of economic transformation and growth? She recommended that the DSI increase its internship and training opportunities in all its entities, particularly in specialised areas, and suggested that the DSI focus on the domestic development of the upstream market of manufacturing renewable energy solutions.
The Chairperson said it was important to bridge the gap between the work of entities like SANSA, such as the app which provided information on dam storage levels, and the line departments that this kind of work would assist. She acknowledged that the decadal plan was an intervention that could assist in bridging this gap. International agreements and cooperation should have a direct impact on the socio-economic needs of the country, particularly unemployment, and the country should be unapologetic about its ownership of natural assets such as the clear skies that allowed other countries to gather data from here. There should be tangible rewards for the use of this kind of resource. She also asked whether DSI evaluated the performance targets set by its entities to ensure that they were appropriate and relevant to their mandates.
Dr Lubisi said that the HSRC had made great strides in filling senior management vacancies in the past few months. A new executive for human resource management was appointed in the last month, and an announcement would be made on the new permanent CEO by the end of October 2022. He accepted that the HSRC could not expect to receive any budget increases as long as there were problems with financial management. Regarding the HSRC’s financial model, the balance between revenue from parliamentary grant and research revenue was skewed toward the latter. The ratio was currently 45%/55%, but the HSRC was working with National Treasury set it at 80%/20%. He agreed that the word ‘unskilled’ should not be used. He affirmed that the HSRC had no reason to exist if its research did not have an impact. To this end, an Impact Centre had been established at the HSRC and he asked the HSRC management to expand on its work.
Prof Leickness Simbayi, acting CEO, HSRC, said that the Council took transformation very seriously. Inclusivity and representativeness were critical aspects but it also extended to who was producing the knowledge. HSRC was also expanding on science engagement with the view that findings do not just end up in reports and peer-reviewed publications but were made accessible to the broader public too. This could include releasing research results in one or more vernacular languages. There were between 400 and 500 full-time employees at the HSRC. It provided internships, including Masters and PHD internships, along with postdoctoral fellows, and not only within the organisation. Over the last year, the HSRC has also taken part in the presidential youth employment initiative, through which up to 1 000 research graduates have been given internships. Around 1000 field workers had also been employed on short-term contracts in the last year doing fieldwork. He also noted that the terms ‘skilled’ and ‘unskilled’ were used in line with requirements of reports to the Department of Employment and Labour and National Treasury. It was not the HSRC’s intention to denigrate anyone. It was just an employment category.
Ms Swartz said that there were a few examples of the impact of the HSRC’s research in the annual report. For example, there was the annual list of skills in high demand that came out of the recent labour market impact survey. The HSRC had also done work with Sector Education Training Authorities (SETAs) on black industrialists and some of the outcomes of this work would be published soon. There had been a social security review and engagement with the Department of Social Development around the universal basic income grant. This was work that the HSRC was particularly proud of. The HSRC was trying to understand government’s policy cycle to ensure that its work reached the right decision-makers at the right time. This was not easy to do because research had its own timeframes that were not necessarily coordinated with those of government. This was the kind of work the Impact Centre was trying to do. It was trying to ensure that every researcher understood the relationship between research outputs and actual outcomes. The HSRC has recently signed a memorandum of understanding with NRF regarding engagement. She admitted that it did not look like HSRC was going to meet its PhD researcher target this year, but meeting the five-year target was a priority, which the HSRC was pursuing by recruiting staff with PhDs and making time and money available for existing staff, especially black women, to obtain PhDs.
Ms Rousseau said that 95% of the irregular expenditure (R35m of R37m) related to an issue from the previous year about single suppliers, where the HSRC had failed to get pre-approval from National Treasury. It had not resulted in a financial loss. Procurement regulations had also since been amended and this would no longer be a problem. Management itself had identified the payroll issue that had led to the material irregularity in July 2020 and corrected it immediately. However, it took a bit longer to determine the value per employee and tax year during which the issue had existed. This had finally been completed in May 2022. Fruitless and wasteful expenditure would be recouped from staff members where possible, although there was a small portion, about R44 000 in 2021/22, that would be written off. The surplus was created by all revenue streams but particularly research revenue. It had not been spent by the end of 2021/22 because of procurement issues but HSRC had committed the spending.
Ms Lulekwa Ngcwabe, Group Executive: Shared Service, HSRC, said that the overall vacancy rate was 13%. There were challenges around attracting the right skills but mechanisms were being put in place. In particular, there would be efforts to upskill all employees.
Dr Lubisi added that there had been a time during which National Treasury had placed a moratorium on new hiring at the HSRC, which meant that people who resigned could not be replaced. The salary scale at the HSRC was also relatively lower than other organisations, making it difficult to attract some of the best people. It would take some time to align the salary scale with the market. He reiterated that the HSRC was committed to turning things around so that it could focus on its functions and did not need to be preoccupied with compliance matters.
The Chairperson asked for outstanding responses to be submitted in writing within seven days.
Mr Ndlovu said the intention was for the new CEO to start on 1 January 2023. He said there were certain challenges associated with SANSA being a PFMA Schedule 3 entity, for example, when it came to the need to invest in maintaining infrastructure. SANSA had been engaging with DSI to find a solution to these challenges, but there was no definite position yet concerning changing its scheduling status.
Ms Mlisa agreed with the Chairperson that the country should be unapologetic about the elements that gave it a competitive advantage in certain scientific fields. SANSA did ensure that all international partnerships were in the best interests of the country. For example, there had recently been negotiations with the United States National Aeronautics and Space Administration (NASA) to establish a space vehicle tracking and communications ground station in Matjiesfontein. It might seem that NASA and the international scientific community would be the main beneficiaries of the ground station but the site was being provided at a commercial cost. There was also the inspirational aspect of having the station in the country. The risks associated with the new business model could be put into four categories. The first was to ensure that SANSA did not let external commercial factors affect its strategy and mandate. The second one was around leadership and ownership. The move from a more federated approach to a “value-chain” approach would create new dependencies and complementarities. The third one was to ensure that internal processes and systems stayed in place during the transition. This included financial and human resource systems. The fourth one was to ensure that the new business model was in line with all labour laws, policies, and practices. The risk register was updated constantly and monitored weekly.
Mr Ndlovu also offered to provide more detail on the transition in written form or as a dedicated presentation to the Committee.
Mr Jena reported that National Treasury has allowed SANSA to retain its whole surplus.
Dr Lee-Anne McKinnell, Managing Director, SANSA, said that two SANSA sites, at Hartebeesthoek and Hermanus, were vulnerable to electromagnetic and radiofrequency interference. In the past year, progress has been made in establishing some legislative protection for these sites. The first of these had been a national key point under the National Key Point Act since 1986 and SANSA applied this year for the Hermanus site to be declared a national key point. SANSA was positive that this would ensure that space activities were protected. An air magnetic gradient survey had been undertaken in Hermanus to help with an action plan to ensure that the site was protected going forward. There had been communication with both the local and district municipalities around a municipal bylaw.
Mr Ndlovu said there had been an agreement to set up a steering committee to start the transitioning of the Denel facility. There had also been engagements on this matter with DSI.
Dr Rebecca Maserumule, acting DDG: Technology Innovation, DSI, said that the Department had not yet received the management report on the business model transition from SANSA. The important factor in the matter with Denel was not so much the Houwtec site but the whole company, Spaceteq, incorporating the land, the people and the intellectual property. Denel was clear that SANSA was best positioned to take it over and the Department hoped that the issues would be addressed before the end of November 2022. The Department had received feedback from Treasury on the space infrastructure hub, to the effect that the funding would need to come from DSI baseline budget. The Department saw the hub as critical to implementing the space strategy and as part of the Economic Reconstruction and Recovery Plan (ERRP).
Mr Muofhe said that transformation was one of the Department’s priorities. One of the critical areas of engagement between the Department and its entities was around the new transformation framework that had been developed. The framework focused on ensuring that the issues of racial equity, inclusivity, women, and the youth found their way into planning. There would be special efforts to ensure that even those living in rural areas and townships would come to know about the benefits of science, technology and innovation (STI). This included the issue of languages. This framework was being implemented as part of the annual performance plan for the next financial year, and all entities would have to account on how they would deal with these particular areas. This year three locally-produced nano-satellites were launched. A black women-owned company had helped to develop these satellites. Transformation was indeed slow but it was happening. South Africa as a whole but especially government should prioritise buying locally so that companies like these do not suffer. There was a programme that would be looking at the development of rockets and rocket engines. He noted the issues related to bursaries that had been raised and undertook to provide a written response. He was confident that all except one of the medium term strategic framework (MTSF) targets would be achieved
Ms Gugulethu Zwane, DDG: Institutional Planning and Support, DSI, said there had been three critical vacancies at the DSI. These were the DDG: Technology Innovation, the Chief Audit Executive, and the CFO. A CFO had been appointed. The first candidate for the Chief Audit Executive had rejected the offer, and an offer would be made by the Minister to the second candidate. Advertisement of the DDG: Technology Innovation position was in the final stages. The process had been delayed because the Department of Public Service and Administration had directed the DSI to undertake an organisational realignment process before making appointments. There had been engagements with senior management to look at the functions and the future of the DSI. A service provider with knowledge of the national system of innovation would be brought in to look at policies holistically. The processes so far were going well. There was a task team at all levels of organised labour to ensure that everyone was aware of what was happening.
Mr Shaku said the underspending of R4m on compensation of employees resulted from vacancies. He explained that the DSI had claimed an amount of R3.4m against Charisma Bredenkamp for damages suffered. She was served with papers at her last known address but she could not be found there. Efforts were still being made to find her. He said that although the budget would increase over the medium term, the increases would not keep up with inflation, which was why additional funding was being requested. During lockdown, some events targeting previously disadvantaged groups could not be held but now that lockdown restrictions had been lifted, a number of events had been held.
Mr Muofhe appreciated the work that the Committee had done on behalf of the Department to ensure it received the budget it required. The R4m that was unspent was largely unavoidable, but this did not mean that the Department was happy about it. Underspending of 7-8% was generally considered acceptable and the Department had pushed to keep it under 1% The additional budget being requested was needed for project investment. The Department would explore the possibility of taking on more interns but needed to ensure that the interns’ experience remained meaningful. Experience has shown that the bulk of people that pass through the internship programme receive employment opportunities. The current recruitment process would require candidates from various priority areas for the DSI to achieve its transformation targets.
The Chairperson said that the questions that the Committee felt had not been adequately responded to would be emailed to the DSI and the entities.
Mr Letsie said that the DSI should report back to the Committee every three months on the progress made in tracking Charisma Bredenkamp.
The Chairperson agreed. Consequence management is important. She asked for audit action plans from the DSI and its entities to be submitted once they had been tabled. She reiterated that inclusivity was important. Young people and people with disabilities needed assistance, especially in light of the high unemployment rate in the country.
The meeting was adjourned.
Mkhatshwa, Ms NT
Boshoff, Dr WJ
King, Ms C
Letsie, Mr WT
Mahlatsi, Ms KD
Mananiso, Ms JS
Sibiya, Ms DP
Yabo, Mr BS
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