7. The Budgetary Review and Recommendation Report of the Portfolio Committee on Science and Technology on the performance of the Department of Science and Technology for the 2016/17 financial year, dated 12 October 2017
The Portfolio Committee on Science and Technology, having considered the performance of the Department of Science and Technology for the 2016/17 financial year, reports as follows:
- Mandate of the Portfolio Committee on Science and Technology
The Portfolio Committee on Science and Technology (the Committee) is mandated by the Constitution and the Rules of Parliament to oversee the activities and performance of the Department of Science and Technology (the Department or DST) and the entities that report to it. Hence, the Committee must consider, amend and/or initiate legislation; consider international agreements and provide a platform for the public to participate and present views on issues and/or legislation specific to the science, technology and innovation (STI) system. The entities that reported to the Department during the 2016/17 financial year are the:
- Academy of Science of South Africa (ASSAf)
- Council for Scientific and Industrial Research (CSIR)
- Human Sciences Research Council (HSRC)
- National Advisory Council on Innovation (NACI)
- National Research Foundation (NRF)
- South African Council for Natural Scientific Professionals (SACNaSP)
- South African National Space Agency (SANSA)
- Technology Innovation Agency (TIA)
To enhance Parliament’s oversight role, the Money Bills Amendment Procedure and Related Matters Act (Act 9 of 2009) was promulgated to provide Parliament with a procedure to make recommendations to the Minister of Finance to amend the budget of a national department. A key provision of this Act is that Portfolio Committees must annually compile Budgetary Review and Recommendation (BRR) Reports. These BRR Reports provide an assessment of service delivery performance given available resources; evaluates the effective and efficient use of resources; and may make recommendations on the forward use of resources. The BRR Reports are also source documents for the Committees on Appropriations when they make recommendations to the Houses of Parliament on the Medium-Term Budget Policy Statement (MTBPS).
- Method to develop the 2017 Budgetary Review and Recommendation Report of the Portfolio Committee on Science and Technology
In preparation for the BRR Report, the Committee assessed the performance of the Department and the entities by:
- Considering the prevailing Strategic Plans and the 2016/17 budget allocations and Annual Performance Plans;
- Evaluating the 2016/17 quarterly performance and expenditure trends;
- Conducting oversight by having briefings on specific initiatives and programmes, which included site visits;
- Inviting the Auditor-General (AG) to explain the 2016/17 audit outcomes for the Department and the entities; and
- Considering the 2016/17 Annual Performance Reports.
- Mandate of the Department of Science and Technology
The Department is responsible for developing, co-ordinating and managing the National System of Innovation (NSI) to transform the economy and provide a better life for all South Africans. In fulfilment of this responsibility, the Department, with its entities, seeks to create an environment that promotes innovation; enhances South Africa’s knowledge-generation capacity; develops appropriate human capital in STI; builds and maintains excellent STI infrastructure; and positions South Africa as a favourable location to conduct scientific research and development (R&D).
- POLICY CONTEXT
Science, technology and innovation are considered crucial for the creation of wealth and improving the quality of life in modern society. Hence, governments, as they strive for equitable and sustainable development, have a duty to create an enabling policy environment to support these goals. In South Africa, the 1996 White Paper on Science and Technology introduced the concept of a NSI as an enabling framework for the development and application of science and technology (S&T) in South Africa. The National Research and Development Strategy (NRDS) and the Ten-Year Innovation Plan (TYIP) are the key drivers of the NSI. The TYIP, particularly, aims to guide the country towards a knowledge-based economy through human capital development (HCD), knowledge generation and exploitation, knowledge infrastructure and enablers to convert knowledge into socio-economic outcomes. Hence; the TYIP seeks to enable multidisciplinary thinking and research that will result in the socio-economic changes envisaged in both the National Development Plan (NDP) and the New Growth Path (NGP).
The NDP identifies the need to increase the size, coherence and effectiveness of the NSI because STI is crucial for national development. Hence, the country must enhance its investment in infrastructure, improve the skills base and ensure that it better exploits the knowledge generated from its investments in research, development and innovation (RDI). To ensure that the NSI can meet the goals of the NDP, the Department is formulating a new White Paper on Science and Technology and will; thereafter, develop a new decadal plan that will provide the policy direction and leadership to ensure that the NSI is optimally managed and co-ordinated.
The 2014-2019 Medium-Term Strategic Framework (MTSF) represents the first phase of implementation of the NDP and commits Government to 14 key outcomes. The Programmes and initiatives of the Department and its entities (who are its implementing agencies) either lead or support Outcomes 2, 4, 5, 6, 7 and 10, as well as the Nine-Point Plan. The Square Kilometre Array (SKA) and MeerKAT Telescopes are categorised as Strategic Integrated Project (SIP) No. 16 (a Knowledge SIP) under the National Infrastructure Plan, and is included in Outcome 6. The Nine-Point Plan seeks to stimulate and diversify South Africa’s economy. Specific areas where the Department contributes to the Nine-Point Plan include:
- Revitalisation of agriculture and agro-processing.
- Increasing the impact of the Industrial Policy Action Plan (IPAP).
- Beneficiation of mineral wealth.
- Unlocking the potential of small business and rural and township enterprises.
- Growing the oceans economy through Operation Phakisa.
- Resolving the energy challenge by advancing alternative energy sources.
- Scaling-up private sector participation in R&D.
To position STI within the framework of the NDP, the Department directs its efforts and resources toward the following five strategic outcome-orientated goals:
- Goal 1: Responsive, co-ordinated and efficient NSI – build on previous gains to create a responsive, co-ordinated and efficient NSI.
- Goal 2: Increased knowledge generation – maintain and increase the relative contribution of South African researchers to global scientific output.
- Goal 3: Human capital development – increase the number of high-level graduates and improve their representivity.
- Goal 4: Using knowledge for economic development – derive a greater share of economic growth from R&D-based opportunities and partnerships.
- Goal 5: Knowledge utilisation for inclusive development – accelerate inclusive development through scientific knowledge, evidence and appropriate technology.
Hence, the Department’s key focus areas are:
- Strengthening the STI policy and strategy environment by addressing current gaps; developing the first decadal plan for STI aligned with the NDP; investigating the desirability of a S&T Act and co-ordinating the budget process for STI institutions.
- Increasing public and private sector funding for the NSI, optimising resource deployment and use, and improved intergovernmental co-ordination.
- Enhancing the capacity for monitoring and evaluation of the entire NSI.
- Improving the effectiveness of instruments and incentives to stimulate R&D.
- Increasing support to facilitate the development of provincial and regional innovation strategies.
- Growing access to and ensuring the development, acquisition and deployment of research infrastructure as a necessary enabler for RDI.
- Strengthening South Africa’s regional, continental and international STI partnership portfolio and expanding these beyond research co-operation to focus more on technology and innovation partnerships.
- Strengthening the Department’s science engagement and communication strategy.
- Expanding research capacity by developing human capital and building institutions.
- Enhancing the rate of transformation of the STI sector.
- Commercialising scientific outputs.
- Increasing technological innovation.
- Supporting traditional industry sectors (agriculture, agro-processing, forestry, manufacturing and mining).
- Supporting emerging industry sectors (mineral beneficiation, pharmaceutical manufacturing and greener energy sources).
- 2016/17 financial performance OF THE DEPARTMENT OF SCIENCE AND TECHNOLOGY
The 2016 National Budget was tabled amid great concerns around South Africa’s growth and investment potential and the crucial need to limit national debt. In light of these fiscal concerns and despite the Department having a huge mandate to fulfil with great expectations for the value that STI will bring to the economy and livelihoods of South Africans; the Department’s budget decreased by R53 million to R7.429 billion in the 2016/17 financial year. Furthermore, over the medium-term, Cabinet approved reductions of R414 million in Programmes 2, 4 and 5. In addition, R52.9 million had been reduced from the salaries budget and R16 million had been reduced from the goods and services budget. These reductions formed part of the effort to lower the national expenditure ceiling. In terms of economic classification, the apportionment of the Department’s 2016/17 budget allocation of R7.429 billion remained the same and comprised Current payments of R509.7 million (6.86%), Transfers and subsidies of R6.917 billion (93.11%) and Payments for capital assets of R2.3 million (0.03%). Transfer payments included 37.2% for parliamentary grants paid to six of the Department’s entities, and 55.9% for payments to various projects managed through contracts.
With the tabling of the 2016/17 Adjusted Estimates of National Expenditure (AENE), the Department’s 2016/17 total allocation remained unchanged at R7.429 billion. However, R44.8 million had been moved from Transfers and subsidies in Programmes 2 (R1.7 million), 4 (R30.2 million) and 5 (R13 million) to Current payments (R22.6 million) and Payments for capital assets (R22.2 million). Notable changes to allocations included:
- Programme 2 - R1.9 million for the establishment of the Sovereign Innovation Fund. The President mentioned this in the 2016 State of the Nation Address. This Fund is a public private funding partnership aimed at commercialising innovations that are from ideas from the public and the private sectors.
- Programme 4 – R52 million for Strategic science platforms. These funds emanated from cost containment measures effected on R&D infrastructure.
The Department spent R7.384 billion of its allocated R7.429 billion (99.4%) and effected virements amounting to R59.8 million after the AENE process (1% of the adjusted budget). R6.4 million was moved between major items and R33.1 million was moved between Programmes. The virements under transfers and subsidies were redirected to the Intellectual Property Fund to capacitate offices of technology transfer, to the operations and infrastructure of the Cape Town component of the International Centre for Genetic Engineering and Biotechnology, and to the commercialisation of African traditional medicine.
Table 1: Overview of the Department’s 2016/17 allocation and expenditure
2. Technology Innovation
3. International Co-operation and Resources
4. Research, Development and Support
5. Socio-economic Innovation Partnerships
(% total expenditure)
The Department incurred R176 000 in irregular expenditure due to non-compliance with supply chain management processes. Irregular expenditure from previous years amounted to R34.9 million; hence, R35.1 million in irregular expenditure is awaiting condonation. The Department incurred R2 000 in fruitless and wasteful expenditure due to travel agent charges and penalties for cancellation of travel bookings. Fruitless and wasteful expenditure from previous years amounted to R62 000; hence R64 000 in fruitless and wasteful expenditure is awaiting condonation. The Department did not incur any unauthorised expenditure.
- Auditor-General’s report on the financial statements of the Department of Science and Technology
The Department retained its unqualified audit opinion with findings. However, the findings relate to misstatements in the performance information and not to legislative prescripts governing financial matters.
- 2016/17 performance OF THE DEPARTMENT OF SCIENCE AND TECHNOLOGY
The Department’s budget funds five Programmes. These Programmes, with their concomitant achievement against the performance targets for the 2016/17 financial year is shown in Table 2. Previous years overall performance is shown at the bottom of Table 2.
Table 2: Programme performance for the 2016/17 financial year
Programme 1 – Administration
Programme 2 – Technology Innovation
Programme 3 – International Cooperation and Resources
Programme 4 – Research Development and Support
Programme 5 – Socio Economic Innovation Partnerships
Overall, the Department achieved 89% (55 of 62) of its 2016/17 performance targets and has shown consistent improvement in the achievement of its performance targets since the 2011/12 financial year, however, dipping by 4% from the 2014/15 financial year’s achievement and achieving an overall performance of 84% in 2015/16. Programme 3, receiving the smallest budget allocation, has once again achieved all its performance targets.
The performance targets that were not achieved pertain to:
Programme 1: Due to the containment measures instituted on the public service wage bill, no vacancies were filled and the vacancy rate for the Department stands at approximately 13%.
Programme 2: 24 less new disclosures (251 reported compared to a target of 275) were reported by publicly-funded institutions.
Programme 4: 728 less pipeline postgraduate students were awarded bursaries (10 268 students awarded bursaries compared to a target of 10 996) than planned for, and 19 less research grants were awarded (4 520 compared to 4 539). In addition, the number of MeerKAT antenna to be installed by 31 March 2017 was reduced from 64 to 32.
Programme 5: The fieldwork for the 2016 Business Innovation Survey did not commence as planned. Due to on-going capacity challenges, the target for the time taken for pre-approval decisions for the R&D Tax Incentive was not met.
- Auditor-General’s report on the performance reports of the Department of Science and Technology
The AG awarded the Department an unqualified audit opinion with findings related to the Department’s processes and systems to identify, collect, collate and verify that the information in the annual performance report was regularly and effectively monitored for the number of knowledge and innovation products; as a result, they reported additional products that did not meet the definition as per the technical indicator descriptors. The AG tested the usefulness and reliability of performance information for Programmes 2, 4 and 5. The material finding related to Programme 5 where the achievement reported for knowledge products was misstated.
- ENTITIES OF THE DEPARTMENT OF SCIENCE AND TECHNOLOGY
The entities are funded through a Parliamentary grant (baseline allocations), specific project and/or contract funds, and from income that is generated from research and commissioned projects, or royalties, publishing, membership, registration and/or facility fees.
ASSAf promotes outstanding achievement in all fields of scientific enquiry, recognises excellence, and provides evidence-based scientific advice to Government and other stakeholders. 2016 represented the 20th year of ASSAf’s existence, the second oldest Academy in Africa, and saw the election of a new ASSAf Council and the appointment of Professor Jonathan Jansen as its new Council President. Overall, ASSAf’s performance achievement for the 2016/17 financial year was 72%. ASSAf did not incur any fruitless and wasteful expenditure. Irregular expenditure was incurred during the first seven months of the 2016/17 financial year due to ASSAf not complying with the Public Finance Management Act (PFMA).
The independent auditor, SizweNtsalubaGobodo awarded ASSAf an unqualified audit opinion with findings relating to inadequate compliance with legislation.
The CSIR’s mandate is to foster industrial and scientific development in the national interest through multidisciplinary research and technological innovation; hence, its R&D programme supports seven of the 11 focus areas contained in the NDP, and these are:
- Economy and Employment – supporting the national effort for re-industrialisation.
- Building a Capable State – focussing on service delivery and associated factors.
- Economic and Social Infrastructure – maintaining and re-building transport, water, energy and information and communications technology (ICT) infrastructure.
- Transition to a Low-Carbon Economy – improving the measurement and management of national natural resources, understanding the effects of climate change to advise on mitigation and adaptation, and supporting the development of a green economy.
- Transforming Human Settlements – providing urban modelling and policies on spatial priorities.
- Improving Health – supporting the National Health Insurance Initiative, developing technology for diagnostic devices and providing new methods to understand and manage disease mechanisms at cellular and molecular level.
- Building Safer Communities – developing systems for sharing of information across different components of the security forces; and developing protection against cybersecurity threats.
Annually, the CSIR enters into a Shareholder’s Compact with the Department, which lists the specific Key Performance Indicators (KPIs) against which its performance will be measured. The CSIR’s KPIs comprise three categories, namely, Scientific and technical, Learning and growth, and Finance and governance. The CSIR met five of the six performance targets for the Scientific and technical category; met two of the seven performance targets in the Learning and growth category; and met four of the five performance targets in the Finance and governance category for 2016/17. Overall, the CSIR’s performance achievement for the 2016/17 financial year was 61%. The CSIR incurred irregular expenditure of R920 000 due to payment for a contract before it was signed. This is awaiting condonation since the contract was subsequently signed and the CSIR did not incur a loss. The CSIR also incurred fruitless and wasteful expenditure of R6 997 for a customs penalty. The AG awarded the CSIR an unqualified audit opinion with no findings, hence a clean audit (as in 2014/15 and 2015/16).
The HSRC strives to be a research organisation that advances social sciences and humanities to help address social issues such as inequality and poverty, and enhances human welfare and development. Hence, its strategic intent is to address key priorities facing South Africa through its research, and to generate new knowledge that helps to understand the changing human and social environment in which we live. The overall performance of the HSRC for the 2016/17 financial year was 76%. The HSRC incurred irregular expenditure of R6.5 million due to not following normal supply chain management processes in relation to construction work needed at its new Cape Town office, and also due to an emergency procurement necessitated by stringent project timelines that negated the implementation of competitive sourcing of service providers. The R3.9 million irregular expenditure incurred during 2015/16 (also for an emergency procurement) was condoned. The HSRC also incurred fruitless and wasteful expenditure of R3.3 million. R7 000 relates to traffic fines issued to staff members on hired vehicles and for flights missed. These monies will be recovered from the staff concerned. The remainder relates to an award granted to a former HSRC Director by the Commission for Conciliation, Mediation and Arbitration (CCMA) for unfair dismissal, and a mutual termination agreement with an HSRC Executive where the balance of the Executive’s contract was paid out. The AG awarded the HSRC an unqualified audit opinion with findings related to non-compliance with supply chain management processes (clean audits in 2014/15 and 2015/16).
NACI is mandated to advise the Minister of Science and Technology, and through the Minister, Cabinet, on the role and contribution of science, mathematics, innovation and technology, including indigenous technologies, in promoting and achieving national objectives. NACI achieved its predetermined objectives for the 2016/17 financial year. NACI is funded and administered by the Department’s Programme 1 (Administration), hence its financials forms part of the Department’s annual audit. NACI was allocated R18.8 million for 2016/17, which included compensation of employees. The allocated expenditure for goods and services was R8.2 million and NACI expended R5.7 million resulting in an under-expenditure of R2.4 million. The savings in respect of goods and services occurred as a result of the development of the national STI data and information portal, which was done internally.
The NRF promotes and supports research in all fields of science, and provides research funding and platforms through national facilities and science engagement activities. Its key goal is to ensure that South Africa contributes at least one percent to global R&D output by 2020 and that this knowledge output benefits society. For 2016/17, the NRF achieved 63% of its performance targets, which is a 21% increase in performance from 2015/16. The NRF incurred irregular expenditure of R4.5 million relating to the procurement of goods and services. However, the NRF did receive the goods and/or services procured and value was derived from the incurred expenditure. During 2015/16, the NRF appointed an independent private firm to conduct a forensic investigation into allegations of fraud perpetrated by an external syndicate regarding an amount of R2.6 million. In 2016/17, the NRF incurred losses due to criminal conduct by its employees amounting to R1.8 million. These related to a former NRF-employee who paid stipends to invalid volunteers (R1.7 million), and an employee who submitted fraudulent travel claims (R24 000). The loss incurred due to the fraudulent travel claims has been recovered and the employee has been dismissed. The matter relating to the employee who paid stipends to invalid volunteers has been reported for criminal investigation. The AG awarded the NRF an unqualified audit with findings (clean audits in 2014/15 and 2015/16). The findings relate to material misstatements regarding the number of joint international agreements at the national facilities reported in the performance report, and incurring irregular expenditure.
SANSA aims to promote the peaceful use of space, foster international co-operation in space related activities, foster research in space science, advance scientific engineering through HCD, and facilitate the creation of an environment that is conducive to industrial development in space technologies. In implementing the National Space Strategy, key outputs for SANSA included the provision of space services and products, increasing space R&D, science awareness and outreach activities, funding students and interns, and developing global partnerships. However, given the marginal increase in its Parliamentary grant and the volatility of the Rand, SANSA, at the start of the 2016/17 financial year, had to revise downward its performance targets for research productivity, science outreach, space operations income, global partnership income, and total non-ringed fenced revenue from those reported in 2015. SANSA also put on hold an annual economic study that would estimate the monetised impact of its work, and a report on the implementation progress of the National Space Programme. Overall, SANSA achieved 15 of its 17 performance targets (88%) for the 2016/17 financial year. SANSA incurred irregular (R37 553), and fruitless and wasteful (R10 032) expenditure during 2016/17. However, both these amounts have been condoned since these were unintentional infractions. The independent auditor, SizweNtsalubaGobodo awarded SANSA an unqualified audit opinion with no findings; hence a clean audit (as in 2014/15 and 2015/16).
SACNaSP’s key functions are to:
- Register natural scientists and voluntary associations, and formulate the necessary administrative systems (applications process, maintain register, determine fees) attendant to this function;
- Institute systems to protect the public and ensure the improvement of the standards of services provided by registered natural scientists;
- Advise Cabinet on any matter relating to the natural scientific professions;
- In consultation with the Council on Higher Education (CHE) and the South African Qualifications Authority (SAQA), ensure maintenance of acceptable standards of training;
- Undertake and encourage research related to natural scientific professions; and
- Ensure safe and responsible practice (towards the public and the environment) by registered natural scientists.
SACNaSP is self-sustaining, generating revenue from the registration fees it administers. During 2016/17, SACNaSP registered an additional 2 507 natural scientists, bringing the total to 10 429 registered scientists, and assisted 127 science professionals with obtaining a critical skills visa. SACNaSP also launched the Continuing Professional Development (CPD) programme on 1 April 2017. Registered scientists will need to accumulate 25 CPD points over five-years to be eligible for re-registration. During 2016/17, SACNaSP had positive financial outcomes, with revenue increasing by 18% and ending the financial year with a R324 772 surplus. It internalised key operational positions, and wrote-off debt and removed from its database, those registered scientists who had not paid their annual registration fees for more than two years. However, SACNaSP still have challenges with regard to collecting annual registration fees and; hence, its bad debt has increased by 134% compared to 2015/16. An independent auditor gave SACNaSP an unqualified audit opinion with no findings.
TIA aims to support, stimulate and intensify technological innovation to improve economic growth. TIA is positioned as a development finance institution that provides “gap” funding for technology development projects (seen as high-risk investments, hence, there is a lack of commercial funding) with high social and economic impact. TIA’s goals are to; support commercialisation of technological innovations; increase access to infrastructure for technology development; and stimulate an agile and productive NSI. Key outputs for TIA include technology development funding that will enhance or develop technology-based companies that will also lead to job creation. As well as, creating an enabling environment for technology innovation that will lead to job creation, increased company turnover and technology support funding for small and medium enterprises. During 2016/17, TIA achieved 86% of its performance targets, only failing to achieve the target set for external income received and not reducing its vacancy rate to the 8% target set. TIA did not incur irregular and fruitless and wasteful expenditure during 2016/17. Independent auditors awarded TIA with an unqualified audit opinion with no findings (clean audit as in 2014/15 and 2015/16).
The entities did not incur any unauthorised expenditure.
- Finance and Service delivery performance assessment
Year-on-year, the Department has consistently demonstrated that it can spend, to a significant degree, its budget allocation according to spending targets, and that it has taken the necessary steps to ensure that the same progress is made with achieving its performance targets. For the 2016/17 financial year, the Department spent 99.4% of its budget and achieved 89% of its performance targets. In 2015/16, the Department spent 99.6% of its budget and achieved 84% of its performance targets. In 2014/15, the Department spent 98.6% of its budget and achieved 85% of its performance targets. The Department and the entities have also made extensive efforts to ensure that operational costs fall within the allowed prescripts and that the bulk of the publicly allocated and externally sourced funds are used to fulfil core mandates.
The Department and its entities have made significant contributions towards the goals of the NDP; ensuring that the knowledge generated is used to enhance existing and create new industries, and is used to enhance and drive social development. However, given its resources, the rate of progress within these priority objectives is not at the desired level. During 2016/17, notable work done by the Department and its entities have included:
- Launching the Biomanufacturing Industry Development Centre (BIDC), which is a hub for innovation in the biomanufacturing sector aimed at supporting small and medium enterprises (SMEs) involved in biomanufacturing.
- Supporting the development of Helio 100, which is a 100% South African heliostat technology being developed for the fast growing Concentrating Solar Power industry. Heliolab was set up by the University of Stellenbosch as a university spin-out company to commercialise Helio 100 technology. However, progress has been slow as Heliolab has been unable to source funding for demonstrations with commercial partners.
- Funding, with partners, the development of a new community-based agro-processing facility based on indigenous crops at Makonde village, in Thohoyandou.
- Establishing and funding a wheat-breeding platform. It is being developed in partnership with GrainSA and co-funded by the Winter Cereal Trust. The initiative will support the local cultivation of wheat, the bulk of which is currently being imported.
- Funding the Soybean Improvement Programme which focuses on the development of appropriate technologies on the increased palatability of soybean as an alternative food source. The direct outputs are development and training of entry-level soya entrepreneurs by supporting economic growth for emerging farmers.
- Funding the Strategic Health Innovation Partnerships (SHIP), which is aimed at facilitating the research and development of medicines.
- Demonstrating targeted decision support through innovative technology solutions to improve the delivery of basic services in distressed rural municipalities.
- Developing the Bioenergy Atlas for South Africa to facilitate the transition towards a cleaner, inclusive and sustainable energy system. he Bioenergy Atlas is a web-based decision-making support tool that is targeting both energy policy makers and potential investors in the energy sector.
- Supporting the development of evidence-based reports. For example:
- South Africa’s Technical Readiness to Support the Shale Gas Industry
- The Regulatory Implications of New Breeding Techniques
- Funding AgriProtein Technologies (Pty) Ltd to develop and demonstrate the production of a low-cost and environmentally sustainable protein animal feed, particularly for the poultry and aquaculture industries. In October 2016, AgriProtein signed a partnership agreement worth US$10 million with an Austria-based engineering group, Christof Industries. The money will be used to construct and establish 25 fly farms a year.
To sustain scientific and innovative endeavour, the Department and its entities also invest their resources to develop the necessary human capital, provide and maintain scientific and industry infrastructure, leverage partnerships to provide additional resources, and ensure that the publics’ awareness and knowledge of science and technology is enhanced. Importantly, the Department, its entities and their partners, continue to provide thought leadership and policy development in terms of optimising the NSI, and drawing full benefit from South Africa’s investment into STI.
However, many challenges remain and some of the biggest threats to the objectives of the Department and its entities, and to that of the NDP, is the poor mathematics and science performance by South African scholars, the low throughput rate to postgraduate study, and the inadequate level of investment and co-ordination in RDI by both the private and public sectors. Recently, the World Bank has also identified the insufficient investment in innovation as a factor holding back South Africa’s economic growth. The latter being identified, along with a poor educational foundation to develop and cultivate innovation, by the Department and entities as well. Furthermore, of particular concern, is the below inflation increases to the Parliamentary grants that are specifically allocated to entities to fulfil their core, legislated mandates. This makes the sustainability of the entities reliant on sourcing external income and diverts attention away from core functions.
Overall, the Department with its entities have shown that they can spend their allocated budget and achieve a significant percentage of their performance targets, as well as ensuring that they closely adhere to legislative prescripts in managing the allocations received from the public purse. The shortcomings in corporate governance, that has led to a slight regression in the audit outcomes of the Department, the NRF and the HSRC, have been acknowledged, and plans to address and improve on these are in progress.
The Committee is immensely pleased with the performance of the Department and its entities and is of the view that greater impact and an acceleration of the change needed by the economy can only be achieved with the allocation of additional resources. Particularly for human capital development, research, and innovation to increase the knowledge generation capacity of the system, the development of new industries and for the provision and maintenance of research infrastructure.
- COMMITTEE OBSERVATIONS
The Committee recognises the important role that science, technology and innovation has to play in the economic transformation of the country. It however, notes the limited funding resources to offset and expand the increased role science and technology has to play in skills development, job creation and economic growth.
The Committee commends the Department and its entities for their efforts in delivering on some of the key priority areas for social and economic development in line with the goals of the NDP against stringent financial constraints.
In light of the current economic climate, the Committee advocates for improved co-ordination and collaboration across government by means of centralising the research agenda to fully realise and achieve the goals and priorities set out in the NDP.
The Committee is of the view that since Government has and continues to invest substantial resources into science councils to address national priorities through evidence-based studies, national departments should make better use of the expertise and resources resident within these science councils to provide the advice and services needed. This would potentially lessen Government’s dependence on private consultants for policy analysis and advice.
The Committee notes the challenges with regard to the uptake of locally produced technologies and innovations, and more especially the commercial viability thereof due to a number of reasons such as limited visibility and support from public and private procurement. Once again, the Committee encourages the improved co-ordination and collaboration across government and with the private sector to promote the use of locally produced technologies.
The Committee notes the discussion around the development of a venture capital fund to support the development of local technological innovations. The Committee will follow up on the progress regarding government support for a venture capital fund.
The Committee proposes that a strategy is developed to promote the new innovations and inventions to the community where there is limited access to science information in an attempt to promote the widespread acceptance, usage and participation in science, technology and innovation.
The Committee notes the current 0.73 percent of GDP spent on R&D has been stagnant for the last two years. For the country to reach its economic goals, reaching the target of 1.5 percent of GDP spent on R&D, or at least to maintain the investment equivalent to some of its African peers and developing countries, the percentage will have to be increased.
To assess how many of the students funded by the NRF are absorbed into the science system after they have completed their studies, the Committee urges the Department to develop mechanisms to track students that it funds. In this regard, the Committee is keen to know whether SACNaSP’s register could be used as part of a student tracking mechanism.
The Committee notes the regression in the 2016/17 audit outcome of the Department, the HSRC and the NRF, and acknowledges the commitments made by the Minister to implement plans to address the shortcomings identified, and commits itself to requesting, from the Department, during its quarterly performance briefings sessions, an update on the progress with implementing the recommended action plans and the status of key controls.
The Committee recognises the research, development and innovation work of the Department and its entities that is of the highest international standard and is being used globally. The Committee encourages that the Department continues its focus on R&D in the existing areas of competitive advantage and in areas where existing markets are set to grow.
The Committee further encourages more intensified programmes and projects, collaborative with other government departments, to address some of our national challenges, more specifically in areas of water scarcity, electricity and information and communications technology.
The Committee notes that the graduation rate and time to completion of degrees by postgraduate students funded by the NRF is well above the national average. This despite the bursary value not being commensurate with the actual cost of postgraduate study and the growth of the research grant not being in line with macro-economic factors.
The Committee notes that all the entities require additional funds to that which is currently allocated by the Department to fulfil their mandates and cover the operational costs. Furthermore, the Committee is cognizant that the need to source additional funds may require the entities to relinquish some control over the research agenda and introduce additional regulatory requirements to meet the needs of the funder.
The Portfolio Committee on Science and Technology recommends the following:
That the Minister continues her engagement with the National Treasury to secure additional funding for the science and technology portfolio and that the Committee supports all funding requests made in this regard.
That the Minister advises against all proposed funding reductions from the National Treasury, based on the key motive that radical economic transformation, growth and the nations progress are strategically linked to our investment in science, technology and innovation; and lack of investment or reductions will have negative impacts.
The Committee, aware of the complexity of measuring and reporting on the impact of investment in science, recommends that the Department of Science and Technology continue to explore mechanisms to better report on the impact of science and technology. Hence, the Committee requests to be briefed in the new financial year about the progress in this regard.
That the Department ensures full compliance with legislative prescripts to avoid future adverse findings from the Auditor-General and that the issues regarding the audit status of ASSAf be addressed. Hence, the Committee will require an update, in the new financial year, on the progress of the amendments to the ASSAf Act.
The Committee expressed its thanks and appreciation to the staff and officials supporting the Committee.
The Committee thanks the Minister, the Department and the entities for their co-operation and commitment.
Report to be considered.