Agrément South Africa on their Strategic Plan

Public Works and Infrastructure

30 June 2009
Chairperson: Ms L Hendricks
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Meeting Summary

Agrément South Africa was called for the second time to do a more in-depth briefing. Its focus was, within the Council for Scientific Industrial Research (CSIR), on testing innovative “non-standardised” products. This mandate was quite distinct from the mandate of both the CSIR and the South African Bureau of Standards (SABS), in that it neither developed products, nor set standards of quality for products. This mandate was clearly a world-wide practice since it belonged to the World Federation of Technical Assessment Organisations (WFTAO) of which its member countries number 21. But while it made a good case for its existence both within South Africa and within the construction industry, questions were raised on its financial reporting, its use of expert consultants, its past and proposed training for employees, and its method of calculation for an increase in allocation. Members said that some of the replies to questions were not as clear as they would like and the delegation was requested to return to address these questions at a future date.

Meeting report

Agrément South Africa (ASA) CEO, Mr Joe Odhiambo, commented that this was a follow-up briefing to the 9 June meeting with the Committee. The organisation operated under the authority of the Ministry of Public Works and provided testing, evaluation and certification for innovative products for use in the construction industry. Its mission in terms of providing certification, was to promote government’s objectives of economic development, good governance, and prosperity. It was an organisation within another organisation, that is, the CSIR, and externally it was affiliated to the World Federation of Technical Assessment Organisations (WFTAO). It was a founder member of this global body, which was attended, in its annual meeting of September 2008, by countries such as Brazil, Canada, Australia, Japan and Israel. Its allocation for the 2009/10 financial year was R9.6 million, but an allocation of R25.9 million would have been closer to the mark for it to achieve all its objectives. The CEO further briefed the meeting on its professionalism in dealing with testing and evaluation, its staff, its board, and organisational structure, its relationship with municipalities, the widespread use of products tested, its achievements and its challenges. In short, these were: enforcement and capacity issues.

The financial officer, Mr Pat Ncube, continued and presented the meeting with the financial statement for 2008/2009. That amount was R7.4 million. The allocation for 2009/10 was R9.6, for 2010/11 R10.3 and for 2011/12 it was R11 million. He gave a budget forecast for the present year. The meeting was also presented with an “ideal” budget for the next three years. This, he motivated, was the budget needed if the organisation was to achieve all its objectives. For the three years, respectively, it would have to be considerably more: R25.9, R28.4 and R31.3 million.

Discussion
Mr M Rabotapi (DA) had a question on the quality of corrugated iron sheets. He said the modern sheets were very thin and prone to breaking and did not last long. Mr S Masango (DA) agreed, adding that in his experience, up to 90% of roofs were blown off in bad weather. He asked for clarity on whether such fell under this or another Ministry or department.

Mr Odhiambo replied that he was aware of this problem, and that this question had arisen in the previous briefing. The quality of the product was a competency of the South African Bureau of Standards (SABS) and therefore he could not answer. He agreed that corrugated iron was a product which was already on the market for many years. ASA worked closely with SABS but it remained squarely the responsibility of SABS, which fell under the Department of Trade and Industry (DTI). He added that while ASA did certification, the enforcement of standards of quality was beyond its scope.

Of the total allocation accounted for in the year past, Mr Masango noted that 62% of it was used for salaries. He said that not only was it very large, it also seemed a contradiction since the presentation clearly showed that the salary budget would be reduced, yet there was an objective to increase the number of employees. He wanted to know how this would be achieved.

He asked, in regard to the training for employees, why so much time had been spent on training, and whether this was because employees had too little work, or whether their skills were not at the desired level.

Mr B Dhlamini (IFP) posed a similar question on skills shortages, and asked whether there was a strategy in place to deal with it. He needed to understand, secondly, whether criteria were in place when consultants were used, and why ASA’s own employees were not used instead. With regard to the Extended Public Works Programme (EPWP), he wanted to know how ASA’s strategy matched that of EPWP.

Mr G Radebe (ANC) asked for clarification on the forecast budget and the ideal budget. He asked whether there was an increase by percentage or by actual amounts and furthermore, why an increase was needed, when in fact the meeting was presented with ASA’s goal to decrease, for example, the salary expenditure.

Mr Ncube’s reply was that individual items may experience an increase but the total budget would eventually be decreased. He said, on the question of percentage, that a fixed percentage was not chosen and then applied to all items evenly, but rather based on the need to increase by individual amounts.

Ms B Gxowa (ANC) said that it appeared as though three budgets were being presented. Mr Radebe and Mr Masango expressed their concern that Mr Ncube’s presentation was not clear. Mr Dhlamini agreed that clarification was needed on the three budgets.

Mr Ncube explained that there were indeed three budgets, the first being the financial statements for the year past, the forecast for the year ahead, and the “ideal” budget would be what was wished for in order to operate without constraints.

Mr Rabotapi agreed that the percentage issue was a problem. He asked whether the employees who received training would be retained by ASA. He stated that there must be a deliberate plan to recruit disabled people. Finally, he wanted to know if the Auditor General (AG) had given any qualification in the audit report on ASA’s financial statements.

Mr Masango asked for a breakdown of the “human capital cost” – that is, how much of this expenditure went towards the use of consultants.

At this stage, Ms Gwoxa reminded the Acting Chairperson of the need to adjourn in order to prepare for the plenary sitting in the National Assembly.

Mr Manana agreed that more time would be needed for the delegation to address all the questions and comments. He requested the Committee Coordinator to arrange another briefing, and asked that ASA come to the meeting well prepared, since it seemed that especially in the case of the financial officer, there was a need for much more preparation. He asked that members’ questions be noted and answered fully at the next meeting.

The meeting adjourned.

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