Parliament, Thursday, 10 October 2024 – The Portfolio Committee on Agriculture had a successful engagement with the Agricultural Research Council (ARC) on progress in establishing the foot and mouth disease (FMD) vaccine facility, ARC’s qualified audit opinion and its annual report.
Regarding the construction of South Africa’s FMD vaccine facility, the committee heard that South Africa lost its capacity to produce the FMD vaccine in 2005 due to deterioration of the facility at ARC. South Africa’s vaccines are now imported from Botswana. However, the Botswana manufacturer is not producing enough vaccines for export purposes, leaving millions of animals in South Africa and in the Southern Africa Development Community region vulnerable to this disease.
ARC proposed that a new facility be built and this was approved by ARC’s Board and the Minister of Agriculture in 2010. National Treasury allocated a budget of R214 million in the 2011/2012 financial year for a factory to be built that could manufacture vaccines at commercial scale. The committee heard that additional allocations were to be made when required, based on progress achieved. Since the initial allocation, an additional R400 million was allocated in the 2019/2022 financial year, when the project was restarted. ARC indicated that approximately R450 million remains from 2011/2012 and 2019/2022 allocations, with a required amount of R1.2 billion to build the factory.
ARC told the committee that it is ready to proceed with the construction and all the plans are in place. However, budget remains a challenge. The committee was informed that ARC has submitted numerous applications for additional funding from National Treasury with no favourable response. ARC appealed to the committee for assistance on this matter.
The committee thanked ARC for the comprehensive briefing on the vaccine facility’s construction and indicated its willingness to assist ARC, through the Department of Agriculture.
Regarding ARC’s qualified audit opinion for the 2023/2024 financial year, the committee was dissatisfied with key issues emanating from the Auditor-General’s findings, primarily related to ARC management’s long-standing inability to account properly for property, plant and equipment. The committee requested the entity to indicate how these audit findings will be addressed. The committee further requested ARC to indicate if any consequence management has been implemented, given the audit outcomes and investigations on irregular expenditure for the period under review.
Challenges also remain within the management of the asset register. This is another repeat finding. The qualified finding is based on property, plant and equipment not properly accounted for, depreciation and amortisation of property, plant and equipment materially misstated and impaired, loss of property, plant and equipment materially misstated.
The Chairperson of the committee, Ms Dina Pule, said the committee welcomed the constructive engagement with ARC and she encouraged the entity to address the required areas in the audit findings.
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