Appropriation Bill: DBE briefing, with Minister in attendance

Meeting report

Presentation by the Department of Basic Education (DBE) on the 2023 Appropriation Bill

Mr Hubert Mweli, Director-General (DG), Department of Basic Education (DBE), led the presentation, supported by Mr Patrick Khunou, Chief Financial Officer (CFO), Mr David van der Westhuijzen, Head of Infrastructure, and Ms Mataole Ramohapi, Director: Office of the DG.

The DBE provided an overview of the appropriation for the 2022/23 financial year and the preliminary spending outcomes as at the end of the 2022/23 financial year. It also outlined its plans to utilise the R31.8 budget in the 2023/24 financial year, and gave a progress report and status on eradicating mud schools and inappropriate sanitation.

It said that the total adjusted budget of the Department for the 2022/23 financial year amounted to R29.693 billion, of which R24.796 billion (84%) was allocated to transfer payments as follows:

• Conditional grants - R23.124 billion;
• Transfers to public entities - R178.0 million;
• Other transfers - R1.494 billion.

The remainder of the budget R4.897 billion was  allocated to the following:

• Compensation of employees - R565.6 million;
• Goods and services - R2.225 billion;
• Interest on rent and land - R40 million;
• Payments of capital assets - R2.065 billion;
• Payments of financial assets: R364 000.

The total preliminary expenditure of the Department for the 2022/23 financial year amounted to R29.271 billion. The costs amounting to R24.796 billion were made up of transfer payments as follows:

• Conditional grants - R23.124 billion;
• Transfers to public entities - R178 million;
• Other transfers - R1.494 billion.

The remainder of the expenditure of R4.475 billion was made up as follows:

• Compensation of employees - R550.1 million;
• Goods and services - R2.087 billion;
• Interest on rent and land - R40.0 million;
• Payments of capital assets - R1.797 billion;
• Payments of financial assets - R378 thousand.

2022/23 financial year budget and expenditure

From 1 April 2022 to 30 November 2022, the Department spent R548 572 955 on procuring goods and services, excluding Infrastructure done through implementing agents.

• R251 977 964 was spent on companies where black people had ownership, representing 64.20% of the total paid.
• R155 875 460 was spent on companies where women had ownership, representing 28.50% of the total paid.
• R7 719 112 was spent on companies where youth had ownership, representing 1.36% of the total paid.

There were no companies that had ownership of people living with a disability that had been awarded business.

DBE's overview of ERRP and BBBEE

The Department gave the Committee an overview of the SA Economic Reconstruction and Recovery Plan (ERRP) and Broad-Based Black Economic Empowerment (BBBEE).

The DBE had included specific goals in the approved supply chain management (SCM) policy to empower previously disadvantaged individuals (PDIs).

A maximum of 20 points would be allocated as follows to a tenderer in a case where the evaluation was on 80/20 preference points:

• Black people = 5 points.
• Women = 8 points.
• Disabled (living with disabilities) = 1 point; and
• Youth = 6 points.

A maximum of 10 points would be allocated as follows to a tenderer in a case where the evaluation was on 90/10 preference points:

• Black people = 2 points.
• Women = 4 points.
• Disabled (living with disabilities) = 1 point; and
• Youth = 3 points.

This would ensure that black people, women, youth, and people living with disabilities, were given an advantage when allocating preference points during the procurement process.

Data sources

The Department of Education had compiled the school register of needs (SRN-1996). This was the first database that included every school in the country, including their geographical location, the condition of buildings and the facilities available. It had updated the survey and released the School Register of Needs (SRN-2000). 

The Department of Education developed the National Education Infrastructure Management System (NEIMS-2007). 

In 2011, the DBE launched the Accelerated School Infrastructure Delivery Initiative (ASIDI-2011). This programme focused on the following:

• Appropriate buildings for schools made entirely of inappropriate materials.
• Appropriate water supply to schools with no water.
• Appropriate sanitation at schools with no toilets.
• Appropriate electricity supply to schools with no electricity supply.

In 2018, the DBE launched the Sanitation Appropriate for Education (SAFE-2018) initiative. This programme focused on appropriate sanitation at schools dependent on basic pit toilets.

Operational schools

• The School Infrastructure Backlog Grant funds both the ASIDI and SAFE programmes.
• The Department submits weekly progress reports on the ASIDI and SAFE programmes to the Minister.
• Operational public schools initially increased from 27 004 in 1996, to 28 876 in 2007. but had since decreased to 22 589 in 2022.

“Mud” schools and other inappropriate structures

It was estimated that in 1996, about 1 000 schools were made entirely of inappropriate materials. In 2011, there were 510 schools made entirely of inappropriate materials. Of the 332 schools on the ASIDI programme, 330 had been completed. The remaining two replacement schools were scheduled for completion in 2023/24.

Schools with no water supply

The SRN 2006 recorded 8 823 schools with no water supply. Of the 1 306 water supply projects on the ASIDI programme, 1 292 had been completed. The remaining 14 water supply projects were scheduled for completion in 2023/24.

Schools with no electricity supply

The SRN 2006 had recorded 15 263 schools with no electricity supply. All 372 electricity supply projects on the ASIDI programme have been completed.

Schools with no toilets

The SRN 2006 recorded 3 265 schools with no toilets. Of the 1 087 sanitation projects on the ASIDI programme, 1 085 had been completed. The remaining two sanitation projects were scheduled for completion in 2023/24.

Schools dependent on basic pit toilets.

The SRN 2006 recorded 9 600 schools dependent on basic pit toilets. The Sanitation Appropriate for Education (SAFE) programme started with 3 898 schools. Of the current 3 390 schools on the SAFE programme, 2 663 had been completed. The remaining 727 sanitation projects were scheduled for completion in 2023/24.

Progress review meetings were held weekly with operational teams of implementing agents and the executive management of implementing agents. Weekly progress reports were provided to the Minister and Deputy Minister.

Challenges

The DBE listed its main challenges as:

• Interruption by business forums.
• Limited reliable planning data.
• Lack of standardised concept designs, specifications, processes and contracts.
• Over-reliance on implementing agents.
• Poor performing service providers.
• Inadequate monitoring.
• Capital projects not aligned with national priorities.
• Many schools suffering from overcrowding.
• Many schools with inappropriate sanitation.
• Many schools in poor condition.

The Department had a ten-point strategy to address these challenges:

• Updated NEIMS/ Electronic Facility Management System (EFMS) data on current infrastructure.
• Simplified five-year asset management plan.
• Simplified one-year infrastructure programme management plan.
• Standardised concept designs, specifications, processes and contracts.
• Framework contracts with management contractors, construction managers, quantity surveyors and project managers.
• Maximised local sub-contracting.
• Cost-reimbursable payment with target costs.
• Rigid gateway reviews.
• Monitoring over the entire project life cycle.
• Restrict defaulting service providers

Proposed tactics

• All B-5 project scopes must be based on updated NEIMS data.
• No investment in small and unviable schools.
• All B-5 project budgets must be based on updated NEIMS data.
• All B-5 projects based on a seven-year planning horizon.
• B-5 capital and maintenance projects must be aligned with national priorities.
• Headhunt to fill critical built-environment vacancies.
• Enforce EFMS as the sole reporting tool.
• Share lessons learned across sectors.
• Formalise implementation protocol agreements.

Recommendation

The DBE recommends that the Standing Committee on Appropriations (SCOA) note and discuss the preliminary spending outcomes as of the end of the 2022/23 financial year, the plans to utilise the R31.8 budget in the 2023/24 financial year, the progress report and status on the eradication of mud schools, and inappropriate sanitation.

See the attached presentation for further details.

Discussion

Mr E Marais (DA) referred to the under-spending of Programme 4 (Infrastructure) due to unpaid invoices. He asked for the actual number of outstanding invoices. He also asked for clarity on the rollover amounts from Treasury for the last three years.

He requested an overview of the budget performance of provincial infrastructure compared to the allocation provided.

He referred to the general challenges of needing more schools to accommodate many students, and commented that there should therefore be adequate spending of infrastructure budgets. He noted that the presentation provided insight into this issue, as the challenges with contractors had been highlighted. He asked whether these contractors and directors of the companies were blacklisted and monitored.

Mr O Mathafa (ANC) called for regular onsite monitoring and evaluation to verify performance.

He referred to slide 39 on the school register of needs, and expressed concern at the large number of schools without a water supply. What measures were in place to ensure that the situation was corrected? Why, of the 1 306 water supply projects on the ASIDI programme, only 1 292 projects were completed? Further, in what provinces were the projects completed?

He asked how many schools were without electricity and how that issue would be addressed. What other sources of energy would be considered?

Regarding schools affected by floods, he asked the DBE to advise on the number of schools damaged, and the impact of interventions.

Referring to the challenges in implementing the SAFE Programme, and why pit toilets were not eradicated, he said that the provinces had provided several data inconsistencies. He asked for an accurate breakdown of statistics on pit toilets.

Had the DBE submitted a request to Treasury to improve the funding for scholar transport?

Mr Z Mlenzana (ANC) said that an active relationship with provincial treasury departments must guide the monitoring by the DBE. This would help to ensure that under-spending would be prevented. It was particularly relevant in poorer provinces such as the Eastern Cape.

He said that the discrepancy in infrastructure progress in provinces must be addressed. In some provinces, learners needed access to learner support materials (LSM), such as sports equipment.

The development of schools in rural areas must be prioritised, such as the building and maintaining school libraries and science facilities. Mr Mlenzana asked the Department to provide a percentage breakdown of the infrastructure in rural schools per province. 

Mr X Qayiso (ANC) recommended that the Committee conduct a series of oversight visits to ascertain the progress of school infrastructure. 

He asked the DBE to advise on what sports and recreation activities were available at undeveloped schools, as regulated by the norms and standards of public schools. He cited the Strydom Secondary School as an example of a school which needed to be utilised to its total capacity to implement sports activities. How many schools require these facilities?

He noted concerns over the infrastructure done through implementing agents. What value for money did the Department derive from these initiatives, how much money was allocated, and how many projects were completed?

The need for the internet and connectivity was critical. The lack thereof negatively impacts the morale of teachers.

Lastly, he asked the DBE to advise on the latest staff vacancies in the Department.

Mr Marais added that the provincial departments should appoint the appropriate number of contractors for the provinces. The Minister should withhold or reallocate funds if there was a failure to perform.

Mr Mathafa referred to the issue of youth and persons with disabilities accessing economic activities through the DBE, and asked what measures were in place to ensure their full participation.

Mr Mlenzana commented on the underperformance of the Eastern Cape and Limpopo provinces, and asked the DBE to advise on the expenditure of each province. What were the collective measures to implement sports, arts and cultural activities in rural schools?

Ms T Tobias (ANC) referred to the previous inputs on school sports as a dedicated activity in education. She called for consequence management and performance oversight for budgets not utilised. She said there should be a timeframe for submitting reports to the Committee. She also raised concerns for the safety of learners at schools, and the dangers associated with pit toilets.

Mr N Ntlangwini (EFF) expressed concerns about the unspent budgets by provincial departments and the consequences of unspent appropriations returned to the Treasury.

She added that pit toilets and overcrowding at schools should be addressed, as they affected the safety and mental health of learners and teachers.

The Chairperson added that most Members had highlighted the issue of pit toilets as a substantial challenge. He agreed that the matter was a concern and should be addressed urgently. He asked the DBE to provide a report to the Committee on the subject and the steps being implemented to eradicate the pit toilets within six months.

The economic elevation programme led by the President since Covid was essential. He asked the DBE to inform him of the Early Childhood Development (ECD) programme’s rollout scope, including the rural areas. 

On categorising employment into race groups, he asked the Department to advise whether white people were provided with work opportunities.

He asked for clarity on the scoring of procurement. How did the Department promote localisation and economic development, especially for learner support material (LSM)?

He also asked how many schools received an electricity supply between 1994 and 1996. How many schools currently require electricity? What type of relationship did the DBE have with Eskom? How did load-shedding affect the mandate of the DBE?

DBE’s response

Mr Mweli said rollovers were due to several reasons, such as unprocessed invoices occurring due to school workbooks being in the process of usage by learners, construction work needing to be completed, and tranche funds not being utilised by implementing agents. The transfer of funds between provinces was needed to resolve the issue of under-spending. The under-spending of provinces reflected the DBE’s monitoring and support.

He said the DBE prioritised monthly meetings with provinces to improve performance and budget implementation. The discussions revealed that a high turnover of staff and the need for more qualified staff were substantial factors.

Regarding contracting agents who did not perform, the DBE would report this to Treasury and regulating bodies. Consequence management was essential, and DBE would award new contracts only to good-performing agents.

The allocation of funds to poorer provinces was a vital concern for the Department’s executive management. The matter had been bought to the attention of the President.

The decline of appropriate school structures was impacted by schools' merging and closing, particularly in rural areas. With the unprecedented weather conditions, mud schools were severely affected. 

He welcomed the oversight visits of the Committee, and encouraged joint visits with the DBE to understand the depth of the challenges on the ground.

Schools needed water, particularly clean drinking water, and this was a significant challenge for rural areas. The DBE would contract experts to ensure the implementation of water provision.

Schools without electricity were a concern. There was a good relationship with Eskom, and a dedicated official from Eskom attended DBE forum meetings. The DBE was considering solar as an alternative source of energy. Information technology (IT) and machinery would be critical subjects in the curriculum.

Appropriate and safe sanitation was essential, particularly ensuring safety measures at pit toilets were implemented. There was a backlog of 700 toilets.

The initiatives for infrastructure at libraries and internet connectivity to schools would be provided to the Committee in writing following the meeting. He agreed that the lack of proper infrastructure contributed to the morale and dignity of learners and teachers.

Collective measures to implement sports, arts and culture were a major DBE priority.

Implementing contractors act on the instruction of the DBE and implement projects as per the timeframes provided. The DBE did obtain value for money in certain instances -- but only in some cases. The DBE pays a management fee, so overreliance on agents should be reduced.

Mr Mweli said inappropriate structures were an embarrassment, so functional facilities must replace pit toilets. He agreed that the DBE would provide a report to the Committee on the matter, and steps would be implemented to eradicate the pit toilets within six months.

The economic elevation programme led by the President since Covid had been essential. The DBE would employ 300 learners. It had identified five reconstruction areas and would present the details at the next meeting. Vandalism was a substantial challenge, and negatively impacted school structures. 

Mr Khunou responded on the issue of the expenditure. He confirmed that R179 million had not been spent on infrastructure -- the spending had been at 29.9 percent.

The rollover in the last three years had been positive, as between 2021 and 2022, there had been almost a 100 percent expenditure rate. The provinces had been allocated R12.5 billion for executive induction programme (EIP) and had spent approximately 99. 4 percent. Where specific areas spent 100 percent, excess funds would be given from provincial funds.

He said that the DBE would provide a comprehensive report on the provincial spending of implementing agents (IAs) to the Members at the next meeting.

The rate of vacancies was standing at an average of 9.06 percent, meaning that 91.94 percent of posts were filled. The DBE employed white people. The Department would provide a further clinical collation, and report at the next meeting.

Mr Van der Westhuijzen said that the DBE had provided 320 completely new schools to address the issue of inappropriate structures.

Regarding water supply, 1 306 schools needed to receive water. Mr Van der Westhuijzen said that 1 290 schools had been serviced.

Ms Ramohapi responded that the DBE would provide a detailed overview of library facilities, science and sports facilities at the next meeting.

The norms and standards of public schools were prioritised, but there were challenges. The schools must be assisted within the 2030 national development plan (NDP) timeframe. Schools may share facilities with other schools or utilise community structures. Approximately 79.8 percent of schools had access to internet connectivity.

Regarding disasters affecting schools, all provinces had contingency measures to implement mobile schools and rehabilitation programmes.

Minister Motshekga responded to the Chairperson’s question on purchasing furniture and books. The DBE did not facilitate purchasing unless it was for a particular project. Provinces procured these items as a function of the provinces.

She said the transfer of funds between provinces was a sensitive political issue that had been escalated to the attention of the President. Officials were deployed to assess the provincial situation weekly during quarters one and two of the financial year. Treasury had provided additional support.

She said money could not be taken from poor provinces and given to the richer ones. She had visited the North West Province on the matter.

Proper spending depended on compliance with the instructions of the DBE. A workshop would be conducted in the Western Cape to address the matter with the provinces.

The Chairperson thanked DBE for the presentation and engagement.

Committee matters

The Committee considered the draft minutes of the meeting of 25 April 2023. The minutes were unanimously approved and adopted to reflect the discussions.

The Chairperson thanked Members for their attendance. 

The meeting was adjourned.