Parliament, Wednesday, 9 October 2024 - The Portfolio Committee on Agriculture expressed its unhappiness with Onderstepoort Biological Products’ (OBP’s) poor audit outcomes two years in a row and for its failure to conclude the R492 million good manufacturing practice project at OBP’s vaccine manufacturing facility.
The committee visited the entity as part of its week-long oversight visit to OBP and the Agricultural Research Council (ARC). The aim of the visit was to assess progress in the modernisation of the OBP’s Vaccine Manufacturing Plant and ARC’s progress in the construction of the Foot and Mouth Disease Facility.
The committee heard that OBP achieved only 16 (53%) out of 30 annual targets for the 2023/2024 financial year, a disastrous performance in comparison to previous years. The committee was also concerned about the audit outcomes which, among other things, revealed misstatements in the annual performance report submitted for auditing. These material misstatements were in the reported performance information for development, manufacturing and distribution of animal vaccines to the market through advanced and innovative technological solutions.
Members of the committee remarked that it was unacceptable that an entity of this nature can be found wanting on procurement and contract management. The audit outcomes indicate that some of the goods, works or services were not procured in a fair, equitable, transparent and competitive process, as required by section 51 of the Public Finance Management Act.
The committee was also concerned about delays in the implementation of the good manufacturing practices project to refurbish OBP’s vaccine manufacturing facility. OBP received R492 million in funding from the National Treasury during the 2012/13 financial year for the refurbishment of the facility to address ageing infrastructure and frequent equipment breakdown. The committee heard that the focus of the refurbishment was to modernise the facility to ensure that it meets good manufacturing practices standards. The project commenced in 2014 with the appointment of the principal agent to manage the design and implementation of the project.
The committee learnt that a forensic investigation was initiated in 2019 to investigate alleged tender and contract irregularities, and a report was released in 2021 noting that principal agent was irregularly appointed and legal disputes ensued. The contractor suspended activities due to lack of architectural, process design and engineering services.
The committee urged the new OBP board, which was appointed on 1 November 2023, to ensure that the project gets underway. OBP’s CEO, Dr Bethuel Nthangeni assured the committee that recommendations have been submitted to the board for consideration for the appointment of a specialist advisory service provider.
Meanwhile, the board Chairperson, Professor Peaceful Mabeta, also assured the committee that the new board is giving attention to all the matters raised by the Auditor-General. In addition, several initiatives are underway to address the entity’s challenges in training and development, as well as to review roles and responsibilities, policies and procedures, resource planning, internal audit and reporting.
The portfolio committee Chairperson, Ms Dina Pule, welcomed the engagement with OBP, saying that after a meeting in Parliament with the entity the committee wanted to have a site inspection of the facility. “We thought it was important for us to come and see for ourselves, especially matters around the good manufacturing practices and issues that have been raised by the Auditor-General, issues around internal controls and financial management in terms of accountability in general,” Ms Pule said.
The committee requested OBP to provide it with a report on the refurbishment of its vaccine manufacturing facility, which should include how much more is still required to finalise this good manufacturing practice project. “We are happy as the committee with the updates we’ve received from the entity,” added Ms Pule.
ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSON OF THE PORTFOLIO COMMITTEE ON AGRICULTURE, MS DINA PULE.
For media enquiries or interviews with the Chairperson, please contact the committee’s Media Officer:
Name: Malentsoe Magwagwa (Ms)
Cell: 081 716 5824
Email: mmagwagwa@parliament.gov.za
Arrange a tour