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HSRC Annual Report 2016/17
PART E: Annual Financial Statements
28. Fruitless and wasteful expenditure
2017
R ‘000
2016
R ‘000
Opening balance
249
67
Fruitless and wasteful expenditure – current year
3,307
182
Fruitless and wasteful expenditure – condoned
(249)
-
Recovered
(2)
-
Fruitless and wasteful expenditure awaiting condonement
3,305
249
Instances of fruitless and wasteful expenditure recorded for the year
1 The HSRC was taken to the CCMA by one of its directors, with the Commissioner awarding the employee a payment
of R1.2 million related to unfair dismissal. The payment was processed in line with the CCMA ruling.
2 The HSRC reached a mutual termination agreement with one of its Executives, with both parties agreeing to settle
on contract balance. The contract was earmarked to terminate in January 2018. The Board reached this agreement
having taken into account possible costs of pursuing this matter through a disciplinary process, the CCMA and/or
eventually in court.
3 The other portion amounting to R7,000 relates largely to traffic fines issued to staff members on hired vehicles and
flights missed. The money will be recovered from the staff members concerned.
29. Statement of Comparison of Approved Budget to Actual Results (explanatory notes)
29.1 Research revenue
Research revenue achievement for the financial year was 91%, representing an underachievement of 9%. This is largely
as a result of challenges being experienced in the fund raising environment, with a number of research programmes
in the HSRC failing to meet their set targets. A number of our key flagship projects also commenced towards the later
part of the financial year, with more activities envisaged for the 2017/18 financial year. Strategic engagements in new
funding markets have been explored with the Executive Management team visiting Europe towards the end of 2016/17
financial year, with more visits planned in the 2017/18 financial year. Utilisation of the prior year surplus also resulted in
more projects being undertaken from the parliamentary grant as opposed to external income, hence research costs for
the year exceeded budget by 6%. This resulted in the overall achievement of the external income target. It is envisaged
that this target will be exceeded for the 2017/18 financial year.
29.2 Parliamentary grants
The full parliamentary grant allocation received from the Department of Science and Technology (DST) was fully utilised
during the period under review, in line with the HSRC’s mandate as stipulated in the HSRC Act, HSRC’s Strategy and
Annual Performance Plan (2016/17 financial year), as presented to the Minister of Science and Technology and Parliament.
29.3 Parliamentary grants – ring fenced
The ring fenced allocation received from the DST was fully utilised during the period under review, in line with the HSRC’s
mandate as stipulated in the HSRC Act, HSRC’s Strategy and Annual Performance Plan (2016/17 financial year), as presented
to the Minister of Science and Technology and Parliament. This allocation was earmarked for science and technology
indicators and was exclusively used for that purpose in line with the CeSTII Business plan for the 2016/17 financial year.
29.4 Other operating revenue
Other operating revenue is mainly generated fromour rental agreement with the Department of PublicWorks, publication
sales, cafeteria sales to the HSRC staff and the public as well as interest earned on unused funds (mainly the parliamentary
grant). The target was surpassed due to more interest income being earned on funds received in advance, insurance
recoveries and the escalation in rental earned from the Department of Public Works. This income is utilised to augment
the parliamentary grant in the maintenance of the building and other operational costs within the HSRC.