HSRC Integrated Annual Report 2018/2019

This year theHSRC commemorates its 50 th anniversary and the 90 th anniversary of its predecessor, the National Bureau of Educational and Social Research. It is a privilege to present this Integrated Annual Report in the spirit of Building on the Past to Shape the Future. The year, as indeed the organisational history, was not without difficulty. This report, however, is a demonstration not of ill performance because of these difficulties, but of our successes notwithstanding these difficulties. The 2018/19 year was a challenging year for the HSRC in light of budget constraints which resulted in a very difficult operating environment. The baseline budget was reduced by R21.2 million as a result of reductions over the Medium Term Expenditure Framework (MTEF) and the increase in VAT. Despite a number of cost containment measures to mitigate the effect of this, the organisation inevitably had to increase its external income target, placing the senior research staff under enormous pressure. In spite of these difficult circumstances, we managed to achieve 83% of that target. Research costs were accordingly below budget as a result of less research activity, but expenditure on all other cost items was in line with budgeted amounts. In addition to a series of cost saving measures in aid of the declining budget, the organisation had to implement a decision to close its office in Port Elizabeth. A deficit of R555 000 was recorded for the year, largely as a result of not attaining the external income target and not being able to recover fixed costs from projects. The annual internal audit review of Supply Chain Management confirmed that the activity continued to function effectively, and that the internal controls in the area remained adequate, efficient and effective. Regular reports were submitted to both the Audit and Risk Committee and the Board, reflecting pertinent issues such as tenders in progress, deviations incurred and an overview of irregular, fruitless and wasteful expenditure. The recent Institutional Review, like those before it, recommended an increased government allocation to support the work of the HSRC as a public research institution. However, with the unavailability of ‘new’ funding, the threats presented by an unfavourable economic climate need to be approached and understood as the new reality. With due regard for the limitations of cost savings, the HSRC’s response PART A: ORGANISATIONAL OVERVIEW C h i e f E x e c u t i v e O f f i c e r ’ s O v e r v i e w Professor Crain Soudien “As we enter a new five-year administrative period, the HSRC will organise itself, as a public‑good research entity to go beyond explaining challenges to provide evidence-based solutions and interventions.” 8 / HSRC INTEGRATED ANNUAL REPORT 2018/19