Science, Technology and Innovation Portfolio Audit Outcomes; DSTI, NACI, NRF & CSIR 2025/26 Annual Reports (with the Ministry)

Video Annual Reports 2025/26 The Portfolio Committee on Science, Technology and Innovation met on 6 October 2026 to consider the 2025/26 annual reports and audit outcomes of the Department of Science, Technology and Innovation (DSTI) and its entities, following a briefing by the Auditor-General of South Africa (AGSA). The Chairperson emphasised that the Committee’s oversight responsibilities extended beyond reviewing audit opinions and financial statements to assessing governance, internal controls, compliance, leadership stability and the actual impact of public expenditure. The AGSA reported that, although some audit outcomes had improved, weaknesses persisted in financial reporting, performance management, procurement and contract management, compliance with legislation and consequence management. It highlighted the importance of setting clear and measurable performance targets, monitoring the implementation of corrective action plans and evaluating whether investments in research, postgraduate education, scientific infrastructure and technology development produced tangible benefits for society. The briefing also drew attention to delays in research application processes and difficulties in moving technologies through the development pipeline, particularly within the National Research Foundation (NRF) and the Council for Scientific and Industrial Research (CSIR). The Department reported that it had achieved 54 of its 61 annual performance targets, representing 89% performance, and had maintained a clean audit for the sixth consecutive year. It had spent 99.7% of its budget of approximately R9.465 billion, with underspending of about R24.24 million. Its achievements included support for postgraduate students and researchers, technology development, international cooperation, innovation partnerships and community-based initiatives. During the discussion, Members questioned aspects of performance and accountability, including the non-submission of financial disclosures by a small proportion of senior managers and the measures taken to address such non-compliance. Members also examined the Department’s support for innovation and the performance of the Innovation Fund, which had supported only four of the 12 venture capital firms targeted during the year. The shortfall had been attributed to a technical problem at the Technology Innovation Agency (TIA), prompting questions about why corrective action had not been taken earlier and whether accountability measures would follow. Programme performance was also considered, with Members acknowledging consistently strong performance in some areas while seeking explanations for targets that had not been achieved. The Department’s continued responsibility to strengthen internal controls, address weaknesses and ensure that its research and innovation initiatives contributed to national development remained a central theme. The National Advisory Council on Innovation (NACI) reported that it had delivered most of its planned advisory outputs, including reports on the national system of innovation, its transformation and science, technology and innovation indicators. It had also advanced the development of a national information portal intended to consolidate research data and support evidence-based policymaking. However, the institutionalisation of foresight remained only partially achieved, as the planned review report on the South African foresight exercise for Science, Technology and Innovation 2030 had not been completed; an inception report had been produced instead. Members questioned why a similar target had remained outstanding despite known resource constraints, why the deliverable had been changed, who had approved the change and what corrective action would ensure completion during the 2026/27 financial year. They also sought a detailed plan, budget and deadline for finalising the work. Questions were raised about NACI’s financial management, including reported overspending of approximately R831 000 against a budget of about R20 million, particularly on goods and services, despite underspending on compensation of employees. Members requested explanations concerning the budgeting of rollover payments and fixed-term contract remuneration, the authorisation of additional expenditure and compliance with the Public Finance Management Act (PFMA) and National Treasury requirements. Governance, Council attendance, organisational capacity and the prolonged vacancy in the permanent Chief Executive Officer (CEO) position were also discussed. NACI maintained that it had delivered most of its planned work but acknowledged the need to strengthen its capacity, monitoring and evaluation, and the practical uptake of its advice. It further highlighted concerns about declining research and development investment, weak patenting performance and the difficulty of translating South Africa’s research strengths into commercialisation, industrial competitiveness, exports and inclusive economic growth. The NRF reported improved overall performance, having achieved 18 of its 21 targets, compared with 80% in the previous reporting period, and maintained a clean audit. Its income had increased to approximately R6.1 billion, supporting postgraduate funding, research outputs, international partnerships, science engagement and national research infrastructure. Nevertheless, Members raised serious concerns about the reliability and maintenance of research infrastructure, particularly the availability of accelerator beam time, which had reached 65% against a target of 75%. They questioned why a sustained renewal, and preventative maintenance plan had not been implemented earlier, why known funding shortages had not been escalated in time and what measures had been introduced to protect researchers’ access to facilities. Members also sought information about the maintenance backlog, disrupted experiments and the financial consequences of infrastructure breakdowns. The shortfall in foreign income from national facilities, which had reached R348 million against a target of R376 million, was questioned in light of delays in the Square Kilometre Array (SKA) contract and interruptions to export-related production. Members further examined the NRF’s staffing shortages, executive vacancies, researcher-rating targets and financial and supply chain management. Particular concern was expressed about approximately R23.848 million spent on external attorneys, contract variations and expansions, and separate contracts relating to the same vessel and berthing facilities. Questions were also asked about an investigation involving senior management and whether adequate due diligence had been undertaken before contracts were awarded. In response, the NRF indicated that executive recruitment was well advanced, with interviews for the CEO position scheduled to begin on 12 October 2026 and other executive interviews expected to follow. It acknowledged that existing funding would not meet all research requirements and identified financial sustainability, income diversification, infrastructure renewal and skills development as continuing priorities. The CSIR reported progress in technology localisation, licensing, industry partnerships, research commercialisation and support for government and industrial development. It had exceeded its targets for technology licensing agreements, achieving 18 against a target of 14, and technology localisation, achieving 30 against a target of 10. However, it had produced 45 technology demonstrators against a target of 58 and secured eight new patents against a target of nine. Members questioned the reasons for these shortfalls and sought clarity on the measures that would restore the technology demonstrator and patent pipeline. They also raised concerns about staffing and research capacity: the CSIR had 1 534 science, engineering and technology (SET) staff against a target of 1 642, while the number of principal researchers and the proportion of SET staff holding doctoral qualifications had also fallen short of their targets. Members asked why effective recruitment and retention measures had not been implemented and who would be held accountable. Further questions concerned the CSIR’s unqualified audit opinion, which Members distinguished from a clean audit, as well as its financial management, capital investment and underspending on information technology equipment. The Committee sought assurance that the planned equipment investment would not be lost and that procurement would take place during the current financial year. The Chairperson also questioned the targeted restructuring undertaken during 2025/26, which had affected business areas unable to meet their financial targets and resulted in the loss of 54 positions, including principal researchers and staff with doctoral qualifications. The CSIR was asked whether further restructuring or closures were anticipated, what criteria had been used to determine the viability of business units, how employees had been consulted and how many had been retrenched directly. Members further challenged the organisation to demonstrate what proportion of its research expenditure had resulted in commercialised technologies, licensed products, policy interventions or measurable public benefits, and what support it required from the Department, National Treasury and Parliament to strengthen its impact. In closing, the Committee welcomed progress in some audit and performance outcomes across the portfolio but stressed that recurring weaknesses in governance, internal controls, financial management, procurement, compliance and consequence management required sustained attention. It emphasised that entities should not regard the achievement of an unqualified audit opinion or the production of research outputs as sufficient evidence of effective performance. Institutions were expected to implement credible corrective action plans with clearly assigned responsibilities, realistic deadlines and appropriate consequences where shortcomings persisted. The Committee also stressed the importance of measurable outcomes, particularly in relation to research infrastructure, technology development, commercialisation, skills development and the broader contribution of science, technology and innovation to economic and social development. It undertook to use the AGSA’s findings and the concerns raised during the meeting to guide its oversight work and follow up on outstanding matters. The Department and its entities were expected to provide evidence of progress in addressing the issues identified and to demonstrate that public resources were being managed effectively and producing tangible benefits for South Africa.