DST Annual Performance 2013/14

Vukani Eliya Madikane

14 October 2014

Contents Introduction

DST Strategic Plan

Annual Performance Plan

DST Performance and Issues for consideration

Entity Performance and Issues for consideration

Audit Reports

Financial Performance of DST and Entities

Conclusions

Oversight Role of Parliament Section 55(2) of the Constitution Section 42(3) of the Constitution

Accountability and Responsibilities Section 92(3) of the Constitution

Public Finance Management Act - emphasis on financial management

Committees of the National Assembly Standing Committee on Public Accounts (SCOPA) – Financial

Performance

Portfolio Committees – Non-financial Performance

DST Strategic Plan 2011-2016Priority Focus Areas Develop the innovation capacity of the National System of Innovation (NSI) in

order to contribute to socio-economic development.

Enhance South Africa’s capacity for generating knowledge to produce world class research outputs and turn some advanced findings into innovation products and processes.

Develop appropriate human capital in the science, technology and innovation sector to meet the needs of society.

Build world class infrastructure in the science, technology and innovation sectors to extend the frontiers of knowledge, train the next generation of researchers, and enable technology development and transfer; as well as knowledge exchange.

Position South Africa as a strategic international Research and Development; and innovation partner and destination through the exchange of knowledge, capacity and resources between South Africa and its regional and other international partners, thus strengthening the national system of innovation.

Annual Performance Plan 2013/14 Achieving critical mass in a small number of long-term, large-scale high-impact priority areas that have been identified

over the past few years.

Ensuring that high-level human capital is developed and employed in long-term productive research careers in South Africa.

Introducing and strengthening efforts that enhance South Africa’s ability to exploit knowledge effectively for economic and social benefit.

Improving the ability of government investment to leverage private sector and international funding.

Building the knowledge-generation and knowledge-exploitation capabilities of rural and historically disadvantaged higher education institutions.

Providing and maintaining state of the art STI infrastructure.

Creating a coordinated and integrated NSI governance and robust monitoring and evaluation (M&E).

Developing and strengthening of regional and provincial innovation systems and capabilities to meet community and industry demands.

Using the cluster system to facilitate alignment of the DST programmes to the New Growth Path and Industrial Policy Action Plan (IPAP) and National Development Plan (NDP).

Resourcing of the system by achieving and going beyond the 1 per cent (General Expenditure on Research and Development (GERD) as a percentage of GDP.

Strengthening Government-industry-higher education partnerships.

DST Programme Performance

Programme #set targets

#Achieved #Partly Achieved

#Not Achieved

% Achievement

Administration 11 11 0 0 100Research, Development and Innovation

13 5 5 3 38.5

International cooperation and resources

4 4 0 0 100

Human Capital and Knowledge Systems

15 12 2 1 80

Socio-economic Partnerships

14 12 2 0 86

Totals 57 44 9 4 7777 per cent targets achieved 2013/1471 per cent 2012/13

ISSUES FOR CONSIDERATION

Administration (pg. 4 DST Annual Report brief)

Effectiveness of the Enterprise Risk Management (ERM) System

Fraud risk prevention and detection plan

Staff Retention Strategy of the Department

Staff Recruitment Strategy of the Department

Employees with disabilities

Misconduct and disciplinary action

Funding shortfalls for programme 1

4 MeerKAT satellite dishes due on 31 March 2014, but this has not happened, only 1 was installed

National Intellectual Property Management Office (NIPMO) underfunded – Intellectual Property (IP) Fund

International Centre for Genetic Engineering and Biotechnology (ICGEB) Budgeting

Management of Programme 2 – vacancies concentrated in this programme

Research, Development and InnovationPg. 5-6 DST Annual Report brief)

South African Research Infrastructure Roadmap

Cyberinfrastructure assessment Research Chairs taking up positions late

affected several targets

Human Capital and Knowledge Systems(Pg. 7-8 DST Annual Report brief)

Research and Development Tax incentive and decline of research intensity

Feedback regarding rejected applications Provision for an appeal process within

section 11D Pre-approval condition for the R&D Tax

incentive Suggestion by COVA Advisory

Socio-Economic Partnerships(pg. 8-9 DST Annual Report brief)

ENTITY PERFORMANCE

National Council on Innovation (NACI)

The Council is constituted of 16 to 20 members (with broad experiences and expertise) appointed by the Minister of Science and Technology after consultation with the Minister’s Committee and after submission to Cabinet for notification.

NACI Act (Act No. 55 of 1997)

Issues for Consideration (pg. 3 NACI Annual Report brief)

What is the thinking of the Department with regards to recommendation 1 Ministerial Review with regards to the National Council on Research and Innovation (NCRI) and Office for Research and Innovation Policy (ORIP)?

Has the Presidency been alerted to Recommendation 1 of the Ministerial Review Report in order for the President and the Deputy President to consider raising the science, technology and innovation (STI) agenda to a higher level and to take science, technology and innovation forward in line with the National Development Plan 2030?

Is the allocation of R12.5 million sufficient for NACI to do what the Council needs to do, or is it constrained by capacity as well?

Will all the NACI reports and studies be made available to the public?

Is there a tracking mechanism for the advice given to the Minister? What advice was or wasn’t implemented, and why?

The position of the Chief Executive Officer has been vacant for months. Why was a decision taken to delay appointment until the new Council is appointed? Did this not affect the work of the Secretariat?

Technology Innovation Agency (TIA)

TIA Act (Act No. 26 of 2008)

stimulating and intensifying technological innovation

improve economic growth and the quality of life of all South Africans

83 per cent targets achieved 2013/1484.8 per cent 2012/13

24/29

A total of 9 TIA targets were either adjusted down or completely abolished. This was due to the restructuring of the strategic focus of the organisation in response to the 2012 TIA Ministerial Review Report.

TIA claims an achievement of 86 per cent of targets. However, the target related to the number of new interns placed for work place exposure was also not achieved. The planned number was 220, but only 180 interns were placed. The overall achievement is therefore 83 per cent, not 86 per cent.

Vacancies at TIA are concentrated in the office of the Chief Operations Officer with 21 vacancies of the 73 available positions.

Of the 21 employment terminations, 14 (70 per cent) have resigned.

Interestingly it has come to the attention of Parliament that TIA is retrenching some of it employees by a 3rd, meaning that if one works from the numbers given in the annual report about 75 people will be retrenched leaving only 152 people at TIA.

If you add the 75 positions that are being abolished to the 51 that are already vacant, then it is clear that the TIA staff complement is effectively being almost halved of its current size.

How many people does TIA really need to run effectively and efficiently?

What will the impact of these retrenchments be on service delivery in the short term?

Is it true that these retrenchments are as a result of the budgets cuts for TIA during the 2014/15 financial year?

What systems is the new interim Chief Executive Officer introducing at TIA that would ensure efficiency?

Issues for Consideration (pg. 4-5 TIA Annual Report brief)

What are the details of the alleged inefficiencies that led to the liquidation of Adept Airmotive, a start-up company in the aircraft engine design and manufacturing sector? What were the funding disbursement agreements between TIA and Adept Airmotive? Why was the funding not made available on time to Adept Airmotive?

Of the 13 commercial entities that TIA inherited when the Biotechnology Regional Innovation Centres (BRICS) were merged, TIA decided to continue investing in four (4). Can TIA explain what is exactly happening with the 9 companies and their intellectual property (IP), if any?

Of the R27 million that the DST spent on consultants, R24 million was as a result of TIA. Why is TIA spending so much money on consultants?

Regarding the Seed Funding applications, what is the plan to fund the additional applications that were not funded in 2013/14? Are the projects funded in 2013/14 once-off projects or are they multiyear projects? Does TIA require more funding for this activity, if so how much?

A total of 10 risk areas were identified by the Audit and Risk Committee and these include the decreasing funds allocated to TIA, high staff turnover and insufficient attraction of relevant investment, just to name a few. What strategies is TIA putting in place to mitigate these and other risks?

Regarding the party that claimed for damages. Who is the party? And why was the bid retracted?

How much money can TIA recover from the investment made at Corporate Money Managers (Pty) Ltd?

How much more funding does TIA require and for what activities is this funding required?

Issues for Consideration (pg. 4-5 TIA Annual Report brief)

Human Sciences Research Council (HSRC)

HSRC Act (Act No. 17 of 2008)

Conduct research that serves the public, contributes towards good governance and public service delivery and helps address challenges of poverty and inequality

72.2 per cent targets achieved 2013/1481 per cent 2012/13

26/36

Issues for consideration (pg. 21-25 of Annual Report) Budget constraints with regard to number of titles published, only

budgeted for 3 but target was set for 5 titles.

Target for Masters interns appointed at the HSRC was revised up from 34 to 42, only 37 were appointed. What was the reasons for setting a target that couldn’t be reached?

There is a bottleneck with regards to publishing for Masters and PhD interns

Senior researchers that are African, particularly black are on 45 per cent instead of 53 per cent

Council also struggling to secure contract funding and research grants

If the budget were to be increased. How much more would the HSRC require and for what activities?

South African Space Agency (SANSA)

SANSA Act (Act No. 36 of 2008)

for the promotion and use of space and cooperation in space-related activities, foster research in space science, advance scientific engineering through human capital and support the creation of an environment conducive to industrial development in space technologies within the framework of national government policy

84.8 per cent targets achieved 2013/1489.5 per cent 2012/13

28/33

Issues for consideration “…Delivering performance while balancing cost containment with capacity

constraints…” Dr. Sandile Malinga Chief Executive Officer

What are these cost containment measures? What capacity constraints are these?

The Space Industry Cluster Competitiveness Programme did not happen due to funding constraints. What were the reasons for these funding constraints not to be foreseen?

SANSA has a difficulty employing permanent staff from designated groups in management positions. Why is that so? What is being done to rectify this?

The IBSA1 project was included as a target for approval from a concept paper. Why was the project not approved?

Vacancy rate at SANSA is at 12.4 per cent. What is the recruitment strategy for SANSA?

Council for Scientific and Industrial Research (CSIR)

Scientific Research Council Act (Act 46 of 1988, as amended by Act 71 of 1990)

"The objects of the CSIR are, through directed and particularly multi-disciplinary research and technological innovation, to foster, in the national interest and in fields which in its opinion should receive preference, industrial and scientific development, either by itself or in co-operation with principals from the private or public sectors, and thereby to contribute to the improvement of the quality of life of the people of the Republic, and to perform any other functions that may be assigned to the CSIR by or under this Act."

75 per cent targets achieved 2013/1481 per cent 2012/13

12/16

Issues for consideration The Minister of Science and Technology states “The CSIR’s track record of

scientific and administrative excellence must now be even more translated into actions that address our national priorities of reducing inequality, poverty and unemployment”. How will the CSIR ensure that its activities are even more aligned to the vision of the National Development Plan?

The Chief Executive Officer of the CSIR, Dr Sibusiso Sibisi says “Therefore the question of how we allocate our resources will become ever-more critical…”. What is the strategic thinking at CSIR with regards to fulfilling its mandate to contribute to the improvement of the quality of life of the (majority of the) people of the Republic

The target that relates to publication equivalents was not met. This is one of the indicators that are used to measure the health of the National System of Innovation. What were the reasons for this target not to be met given the fact that even the number of patents granted was also not met? Usually the patent before you publish rule delays publications, but it doesn’t seem to be the case in this instance.

National Research Foundation (NRF)

NRF Act (Act 23 of 1998)

“To support and promote research through funding, human resource development and the provision of the necessary research facilities in order to facilitate the creation of knowledge, innovation and development in all fields of science and technology, including indigenous knowledge and thereby to contribute to the improvement of the quality of life of all the people of the Republic”

53 per cent targets achieved 2013/1465 per cent 2012/13

RISA & NRF26/49

Issues for consideration Inconsistency in reporting makes the assessment tedious

NRF highlights issue of baseline funding as a key, below inflation increases

Increasing governance and compliance demands continue to precipitate unfunded additional investments in Human Capacity

Placing SKA funding on a sustainable basis is a concern

The NRF also mentions cost containment measures

NRF strategic plan 2015 is nearing the end, things are far from perfect

The value of the grants have not increased to the set level. Is there a shortage of funding with regards to this target? If so, how much is needed?

545 grants have not been spent at the time of reporting. What are the reasons?

The whole system is struggling to secure patents, which are key for the technological advancement that the South African economy needs. The NRF is not an exception in failing to achieve this target. TIA target is 3, NRF target is 22

The NRF is struggling to secure sufficient numbers of black and women individuals to support for grants, and postgraduate funding at all levels. Are these individuals choosing not to apply? Are they there in the system? What are the reasons for this alleged lack of suitably qualified individuals?

Academy of Sciences of South Africa (ASSAf)

ASSAf Act (Act 67 of 2001)

“Providing evidence-based science advice in support of policy development on issues of national significance to government and beyond”

Issues for consideration Unlike all the other DST entities the Annual reporting of ASSAf is not

aligned with Annual Performance Plan (APP). Same issue was highlighted in 2012/13. Could ASSAf tabulate their actual outputs as outlined in the APP?

Who has ASSAf provided policy advice to in 2013/14? Is there a database from which all the policy advice documents can be accessed?

How does ASSAf monitor and measure impact of the policy advise in government?

What are the recommendations of the consensus study on nutritional assessment and micronutrients?

Audit Opinions

Financial PerformanceRevenueR’000

ExpenditureR’000

Surplus/(Deficit)R’000

Irregular expenditureR’000

Fruitless and wasteful expenditureR’000

DST 6 309 148 6 276 773 32 375 32.7 0

NACI 12,5 11.7 719 - -

HSRC 350 615 347 717 2 898 76 3

AISA 37 119 35 548 2 049 406 18

TIA 578 350 609 085 (18 626) 5 804 371

CSIR 2 153 438 2 150 262 52 333 - -

ASSAf 27 209 23 096 4 561 - -

NRF 3 003 139 2 612 786 388 723 18 579 93

SANSA 212 690 201 394 11 296 - -

Interests on Pay as you earn, accounts etc

Supply Chain Management

CONCLUSIONS Overall DST has improved performance in terms of set targets, however Research,

Development and Innovation (Programme 2) is not performing at an optimal level, Most vacancies in DST are in this programme

The NRF struggles to meet targets related to the number of blacks and women supported in terms of grants funding and funding for post graduate studies

Several entities mentioned funding constraints and cost containment measures, NRF and TIA

TIA has a deficit of over R18 million at the end of the financial year, is this as a result of underfunding or the poor management that TIA experienced recently?

TIA has a high vacancy rate and is said to be retrenching a third of its staff. It is important to ascertain that this will not affect service delivery. Already TIA’s budget has been reduced by over R100 million for 2014/15 and it was claimed that service delivery will not be affected

The NRF claims that the baseline funding has not increased with inflation for several years

Given the financial performance for 2013/14, the Department needs to convince Parliament why it needs more funding and for what specific activities that funding will be utilised