National Student Financial Aid Scheme, SA Qualifications Authority, Council for Quality Assurance (Umalusi), Council on Higher Education: Business plans & budgets

Higher Education, Science and Innovation

22 June 2009
Chairperson: Ms F Chohan (ANC)
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Meeting Summary

Four institutions in the field of education made presentations to the Committee on their budgets and operational issues. The South African Qualifications Authority was experiencing some change due to new legislation. It was an internationally respected body. Its expected budget for the forthcoming financial year would balance the expenditure. While a government grant would be the bulk of its funding it also had other sources. Members questioned the role of the Authority, whether reactive or proactive, the numbers of vacant posts, the number of qualifications defined, the functions in assessing qualifications, what it was doing about new areas, the racial profiles at employment levels, whether it worked on recognition of prior learning, the adequacy of its budget and the position of Grade R classes, where different standards seemed to apply. In answer to a question what it would do about “fly-by-night” institutions, it noted that it did not register institutes and could only offer advice to protect the public from malpractice.

The Council for Quality Assurance in General and Further Education and Training (Umalusi) was also a statutory body with a responsibility to ensure the quality of education from Grades 1 to 12 as well as in the Further Education and Training Colleges. Due to financial constraints it could only evaluate exit point examinations. The income was derived from fees for their services as well as a grant from the Department. A substantial part of their budget was a transfer from reserve funds. Members felt that the Council should play a part in evaluating the current system of continuous assessment, questioned what emphasis was being placed on practical training and development of artisans, questioned the statistics on matriculation examinations, asked how the budget would have been balanced if the reserves were not taken into account, whether there was any agreed definition of quality, and how frequently the management letters were sent to the Minister. The Chairperson said that these questions indicated the need for further engagement.

The National Student Financial Aid Scheme financed the studies of disadvantaged students at higher education institutions and recently also at further education and training colleges. In the current year It had provided 153 000 students with R2.5 billion in assistance. It was funded by government grants, funds from the institutions, donors, the private sector and repayments of loans. Members were dissatisfied with the presentation. Many of the figures were illegible and some of the information needed for the budget vote was not apparent. Members were concerned that there was a measure of under expenditure of allocated funds and that not all potential beneficiaries were able to take full benefit. They asked what funds would be ring-fenced, how scarce skills would be handled, whether there was lack of capacity, what the organisation was doing to increase public awareness, whether the granting of bursaries was linked to matriculation performance, and with which institutions NSFAS would work. The Chairperson requested further reports from NSFAS prior to the budget debates.

The Council for Higher Education was established by an Act of Parliament. Its primary role was to advice the Minister. The budget allocation was not as large as requested but representations were being made to National Treasury. It was concerned not only with academia but all aspects of student life. It however had no power to implement transformation policies within universities. Members questioned the role of the Universities of Technology in the increased demand for science graduates. Members felt that the Council should play a role in advocating new branches of scientific learning to deal with modern-day challenges such as food security and climate change. They also asked whether there had been assessments of capacity, what the impact would be on universities giving instruction in languages other than English, what the major learning challenges were, and noted that there was a need to give attention to how to overcome divisions.

Meeting report

 

Presentations by stakeholders in the Education fields: South African Qualifications Authority (SAQA)
Mr Samuel Isaacs, Chief Executive Officer (CEO), South African Qualifications Authority, said that SAQA had now enjoyed its twelfth successive year with a clean audit report. SAQA was a statutory body. It comprised 29 members at present but the size of the Board would be reduced to sixteen shortly. The Board had been appointed by the SAQA Act, which had since been repealed. The National Qualifications Framework (NQF) Act had been implemented as from 1 June 2009. SAQA’s mandate was to develop the NQF and to act in the interests of learners.

He said that the objectives of SAQA included the creation of an integrated national framework. It wished to promote access to programmes, to enhance the quality of education and training and to redress past imbalances. Another objective was the development of learners. Since the SAQA Act was passed in 1995 the objectives had been undisputed, but there was a question over implementation.

Mr Isaacs said that SAQA had 121 posts, of which 33 were currently vacant. However, this was no cause for concern as temporary contractors were being used to fulfil these functions. Two of SAQA’s functions had been moved in terms of the NQF Act and SAQA was fulfilling a holding function during the transitional period. The Quality Council (QC) on Trades and Occupations had still to be established. SAQA had eight directors and thirteen operational units, which reported to the executive office. There was a human resources (HR) consultation forum, which set and monitored targets for employment equity. . A consultative process was followed in the event of any deviation from targets.

He explained the different roles of SAQA and the QCs. A system of collaboration was needed. SAQA developed the NQF while the QCs developed and managed sub-frameworks. There were also mutual responsibilities between the two levels. Qualifications were at all levels of achievement. Level 5 comprised a plethora of diploma level qualifications while Level 10 was a PhD standard. It was up to SAQA to register qualifications, while the responsible QC would develop the qualifications needed and recommend new qualifications. It would then be a mutual task to development and implement policy while conducting assessments.

Mr Isaacs said that SAQA regulated the standards of research and maintained and developed the research agenda. South Africa was one of the first five countries to develop a NQF, a model now followed by more than 150 countries. Many other countries consulted with SAQA in developing their own systems. Seven PhD theses had been submitted on the success and failings of the NQF. The QCs were involved in research in partnership with SAQA.

He said that SAQA maintained a National Learner Registration Database (NLRD). The population of this database was well advanced. South Africa was a world leader in this field. The QCs maintained a database of achievements. It had a mutual responsibility to ensure the integrity of the NLRD and to compile reports. Reliable data was important.

Mr Isaacs said that in terms of advocating and marketing, SAQA had a duty to inform the public and advocate the NQF. Consistent and coherent messages had to be sent to stakeholders. A publicity campaign would be launched. There was a new function of developing policy and criteria for the recognition of professional bodies and registering professional designations. Much advance work had been done on this. The QC would work with bodies involved with quality assurance (QA). SAQA had a responsibility to collaborate with its international counterparts and inform the QC regarding international best practice.

He said that SAQA played a role in advising on and evaluating foreign qualifications. There was a relationship with the Department of Home Affairs, as work permit applications were based on these qualifications. SAQA received between 120 and 150 such applications per day. SAQA advised on matters related to the NQF and performed any function in terms of the Act. The QC for trade and occupations should be in place by April 2010. There would be some movement to the skills fund and some revision of plans might be needed.

Mr Mark Albertyn, Chief Financial Officer (CFO), SAQA, outlined the assumptions on which the budget was based. Requirements were based on the mandate, which had come into effect on 1 June 2009. There would be a 7% salary adjustment for all staff. Income was expected to increase by about 6%. Much of this would come from fees for the evaluation of foreign qualifications and he expected that this income would plateau out in the 2010/11 financial year (FY). He expected inflation costs to rise by about 9%.

He said that government funding would amount to R39.1 million. When extra funding was needed for projects then SAQA would lobby for that separately. Due to the change in the Act the staff complement would decrease by 23 as the standards setting and assurance functions currently delegated to SAQA would move to the QC. This would reduce the staff establishment to 109.

Mr Albertyn noted that the previous estimate of income was R63.2 million. Of this, government would provide R39.1 million in the form of a grant. R16.5 would be derived from fees for evaluation of qualifications and the rest would come from various smaller sources. He estimated expenditure at R61.8 million. Staff remuneration would be R37.6 million, goods and services R23.92 million, and capital expenditure R1.3 million.

He said that SAQA had five programmes. Programme 1 covered the activities of the executive office. These included integrated technology (IT) and research. Other functions were advising and informing policy makers and collaborating with their international counterparts. Programme 2 involved leadership and professional expertise, and enjoyed the support of the Department of Labour (DoL). Programme 4 involved the NLRD. Previously there had been a problem with the lack of access to data. Programme 5 involved the service of evaluating and assessing foreign qualifications.

Discussion
The Chairperson regretted that there was not enough time to do the presentation full justice, because of the need, today, to spend some time with each organisation. Hopefully the Committee would find time to do this during August. She noted that the SAQA offices were in Pretoria.

Mr G Boinamo (DA) noted that only 88 of the 121 posts at SAQA were permanently staffed. He asked what was preventing filling of the vacancies. He asked how many qualifications had been defined since the formation of SAQA. He asked how it informed the public.

Mr G Lekgetho (ANC) asked when the vacancies would be filled. He wanted to know what would happen to those staff members who would not be accommodated by the changes at SAQA.

Ms F Mushwana (ANC) asked what functions SAQA performed in evaluating foreign qualifications. For example, there were many Indian teachers working in the country.

Mr W James (DA) complimented SAQA on its work, which he saw as providing a service to the nation. He asked if SAQA saw itself as a leader or follower. He asked that the Departments concerned with education (Department) should provide the knowledge regarding new areas of study such as climate change issues. His question was whether SAQA or the Departments took the lead in such matters, or whether a consultation process took place between the two parties. There might be a need to go back to earlier training systems.

Ms Gobai (ANC) said that it would be helpful for the purposes of overview to have a breakdown of the racial profile of SAQA at the different levels of employment. She asked if there was any target in place for persons with disabilities. She asked what was being done regarding the recognition of prior learning. She asked what had changed in 2008 and if SAQA was stronger now than then.

Mr S Makhubele (ANC) said that students at private colleges were often taken left helpless when a college closed without any warning. He asked about the effects of inflation. There were many new job titles but it was not clear what the corresponding qualifications were. The theorists were creating model while the practitioners were already in the field. He asked if SAQA felt it was moving at the correct pace.

Ms C Dudley (ACDP) asked if the budget was adequate and if not what the concerns were.

Mr D Smiles (DA) was concerned with the benefits to learners. He felt that there was an ad hoc situation in Grade R. He felt that some teachers at this level were inadequate. He asked if this was a matter of job creation or of providing quality education. Learners could not be put at risk.

The Chairperson said that Members had raised some important questions, but noted that the questions about the vacancies had already been addressed during the presentation.

Mr Isaacs gave a general answer attempting to address all concerns. He said, in regard to staffing, that there would be some movement of personnel due to the new Act, but if the change was properly co-ordinated no jobs would be lost. Most of the work in establishing the QC for Trade and Occupations was a matter of transferring functions and staff. There had been much discussion with the both the Departments responsible for education and labour. In 2008 there had been much uncertainty and staff tended to migrate because of this, so that SAQA had decided not to employ permanent staff but rather to make use of contract workers until the uncertainty was resolved, to avoid having surplus staff once the transitional period ended. He said that the NQF review process had lasted from 2001 to 2007 and had resulted in the NQF Act. Stability was returning slowly. Sensitive handling would be needed but nobody should lose his or her job but would be absorbed into the structure.

He said that he had gone far to explain the different functions of SAQA and the QC. A help desk was being established. SAQA would ensure that enough information was available. There was an extensive database on foreign qualifications.

Mr Isaacs said that about 10 000 qualifications had been defined, of which 7 000 related to higher education while the remainder were on Levels 1 to 5. He undertook to provide more details to the Committee. In terms of staffing and equity he had to provide reports to the Board. He would make copies of these available to the Committee. The target for people with disability was 4% of the staff complement. This was currently 2% but the number did fluctuate.

In regard to whether SAQA led or followed, he said that both were done. There was a three-year review process for regulations. If the stakeholders were serious there could be changes. SAQA led in insisting that qualifications in terms of the Act must be comparable. There were some criticisms, but studies would be done, and there was a need to apply systems thinking, problem solving and communication strategies. SAQA would ensure that attributes were embedded. Unions and professional bodies were playing a major role.

Mr Isaacs said that he felt SAQA was strong because it was a model statutory body. It had received unqualified reports. He had occupied the post of CEO since the organisation had been established, which provided continuity. SAQA worked in a collaborative way, and the framework for collaboration, co-ordination and communication across the spheres of education, training and work was excellent. There were important understandings. The NQF provided for coherent training and South Africa could become a world leader.

He said that job titles related to qualifications, and were important. There were some HR problems. The Department of Labour (DoL) had developed an organisational framework. SAQA was working with Palana (formerly the South African Management Development Institute) to train civil servants.

In respect of schooling, however, Grade R qualifications fell outside the scope of the NQF. Level 1 was already pitched at the end of Grade 7. SAQA recognised that Grade R education. was an incredibly important part of the education system and had worked with the former Department of Education (DoE) to develop standards. Appropriate quality learning was needed in Grade R, as it was not just meant to keep young children busy.

Mr Isaacs noted, in regard to the budget, that this had been submitted and clearly identified the sources of funding, although more funding could obviously be used. SAQA could in some areas call on donors, the Sector Education and Training Authorities (SETAs) and the National Skills Fund. There was a budgetary process that was subject to Ministerial approval. If SAQA were able to make savings in one field it could use it to supplement another. There had been three different budgets submitted to the Department, based on three different scenarios. Their planning was matched to the available budget, which currently did cover the requirements.  .

Mr Isaacs addressed the question of fly-by-night colleges, saying that SAQA and the QC would deal with this issue. Learners and parents should be kept aware of the institutes it attended. The Department registered the institutes and had the power to close them if It were below standard. This was not a SAQA competency.

The Chairperson asked if there was any consultation when a new institute was registered.

Mr Isaacs said that some of the colleges were unregistered and not accredited. Members of the public could contact SAQA to see if the college It intended to attend was registered. Many people were desperate for training but failed to qualify for the more established institutes.

The Chairperson said that the problem was that people would only realise their mistake when the college closed and she wondered if there was any possibility of establishing some early warning mechanism. Further discussion was needed with the Department .

Council for Quality Assurance In General and Further Education (Umalusi) briefing
Dr Mafu Rakometsi, CEO, Council for Quality Assurance in General and Further Education (Umalusi), said that Umalusi had been formed by an Act of Parliament in 2001. Its mandate was to enhance the quality of education from Grades 1 to 12, including the Further Education and Training (FET) Colleges. It developed a QA framework for these institutions. It had a responsibility to monitor exit point in terms of the moderation of examination papers, marking and standards. It provided the certification of learner achievements. It accredited service providers such as independent schools registered with the Department. It reported on the provincial education departments on all areas of operations. The Act intended to regulate the relationship between Umalusi, the Departments, SAQA and Education and Training Qualifications Authority (ETQA).

He said that the Umalusi mandate had been amended in 2009. The QA body was being changed into a QC. It managed a sub-framework. It contributed to the development of QA, qualifications and curricula. It carried out assessments on exit points. It certified learner achievements. It had a mandate to accredit private and rural schools. It conducted research and advised the Minister.

Dr Rakometsi said that there were seven key result areas. The first was the improvement and maintenance of QA assessments. The second was the evaluation and accreditation of private service providers. The third was the certification of QA plans and curricula. The fourth was research design and reports, which included statistical analysis. The fifth was the management of support structures. The sixth was IT. The seventh was financial, HR and administrative support. The Department had a task team on transitional matters regarding the transfer of the QA function to the QC. A coherent plan was needed.

Ms B Rudman, Chief Operations Officer (COO), Umalusi, said that a central issue in the operations of Umalusi was the issuing of credible certificates. There were four areas of operations including the setting of standards, standards of the curricula and QA assessments. Umalusi played a supervisory role in eleven national examinations. These included the National Senior Certificate, the old Senior Certificate, (which was still offered but was to be phased out by 2011) and N3 vocational training. It was also concerned with adult education.

She said that Umalusi had evaluated and accredited private institutions since 2003. These included schools, private colleges and adult education centres. It monitored 1500 independent schools, 450 colleges and 120 adult education centres. These were often based at independent schools. It compiled an annual report and maintained relations with stakeholders. It had an evaluation and accreditation function with independent bodies such as the Independent Matriculation Board and the Onafhanklike Afrikaanse Eksamen Raad. In the past, Umalusi had only monitored standards, but now played a development role as well.

Ms Rudman said that Umalusi was working with the Department and SAQA regarding the transfer of functions. The certification of qualifications was a big income stream as Umalusi issued over 700 000 certificates annually. New qualifications were also a main budget area. The process of verifying matriculation provided another income stream certificates. It conducted research to support its professional work such as curricula and past examination papers. It also evaluated foreign qualifications.

Mr Jerome Thomas, Chief Financial Officer, Umalusi, said that there were five key result areas. Umalusi managed support structures and plans. All reports were vetted. There was a network of stakeholders. There was an internal and an external communications plan. Umalusi was working on strengthening its corporate identity. In terms of corporate services and IT there was a responsibility to maintain, establish and implement systems. There was a requirement for gap analysis. There was a certification programme. It had to ensure that the IT equipment was adequate both in terms of hardware and software. In terms of finances and administration there was a need to maintain and improve systems. Umalusi had enjoyed unqualified reports for all seven years of its existence. Debt collection was in hand. Provinces paid for Umalusi’s services but these had to be invoiced. It had achieved a target of 90% in debt collection.

Mr Thomas said that Umalusi had reserves of R24 million. Fixed assets were declared annually. There was a capital expenditure programme of R2 million for the improvement of security and office development in the anticipation of more staff. It currently had 75 staff members although there were 77 posts. Of these staff members approximately 60% were female and 40% male.

Mr Thomas noted that the budgeted income was R53.8 million. This would include R2 million from the provision of accreditation to private institutions, R18 million for certification, R16.5 million from a grant from the Department and R10.4 million from Umalusi’s reserves. The Minister had approved an expenditure budget of R53.8 million.  This represented an increase of 22% for the 2009/10 financial year (FY). Estimates for the next few years were an increase of 29% in 2010/11 and 13% in 2011/12. Umalusi planned to increase its sample sizes for QA assessment, but had not previously had any budget for this. In 2009/10 the Departmental grant represented 31% of their income, but this would decrease to 25% in 2010/11 and 23% in 2011/12. It was appealing to the Department for an increase in the grant because there had been an unrealistically low baseline in 2002/03. In 2010/11 Umalusi was anticipating a shortfall of R15.7 million, and had asked the Department for an increased grant to cover the shortfall. Finally, he noted that there was an external audit committee and no matters had been reported.

Dr Rakometsi said that financial sustainability was a challenge. Umalusi was looking at the funding model. One solution would be to negotiate a higher fee for the QA fees and for certification, or to levy a set fee for services rather than the present system where the fee was related to the numbers passing the examinations. The increased mandate would mean more work for the same payment. It could not afford to lose staff.

Discussion
The Chairperson said that there was a need for deeper engagement with Umalusi. The Committee would need to see the report on the transition process for clarity on exactly what functions would be transferred and where the current overlaps were. She noted that Umalusi provided quality enhancement for Grades 1 to 12 and the FET colleges. She imagined that there was a new form of assessment. She asked where the country stood in this regard. She asked if Umalusi was satisfied with the qualifications. In terms of the fly-by-night institutes, she asked if the registration process led to accreditation, so that only registered institutes would be accredited, particularly schools. She asked what mechanism should be placed into the system. Poor parents still often invested heavily into such establishments only to see them close suddenly. She asked if the legislation was strong enough.

Mr A Mpontshane (IFP) said that the matriculation results showed a decline each year. He asked whether the problem lay with the schools, the teachers or the curriculum. He asked how credible the certificates were. Scores of matriculants were still being turned away from higher training institutes.

Mr N Kganyago (UDM) asked if the FET colleges were producing enough artisans. The emphasis seemed to be on theory rather than practical issues, but artisans should rely on practical training. The apprenticeship system seemed to have fallen away.

Mr D Kganane (COPE) asked how Umalusi would have balanced its budget if it did not have reserves. He noted the lack of any Departmental grant in 2000 to 2002, and asked if there had been any discussion before the budget allocation had been made.

Mr Makhubele asked if there was an agreed definition of quality.

The Chairperson said that this last question illustrated the need for longer engagement.

Ms Mushwana asked where Umalusi stood on the continuous assessment programme. Since Umalusi only moderated the exit point examination, a learner could be satisfying the continuous assessment requirements only to fall short in the examination.

Mr Smiles asked how frequently management letters were sent to the Minister.

Dr Rakometsi said that the required reports would be forwarded to the Committee. In terms of evaluating the quality of education comparisons were made on a continuous basis. The standards were all satisfactory at present. There was a problem with what happened in the class. Teachers were in a protected space. The QA body had to maintain standards. It could assess how current examination papers compared to previous examinations.

He said that it was in the independent schools and FET colleges where parents were short-changed. Parents were not adequately educated in how to select institutions for their children. They should first ask Umalusi if the institution was in fact accredited. It was perhaps necessary to establish a call centre to service the public in this regard.

Dr Rakometsi agreed that there was a decline in matriculation results. In the period 2002/03 there had been a seeming improvement, but this was due to artificial inflation of results. The system had to ensure that it stayed strong. The end product was important.

He said that he had full confidence in the qualifications issued. Even at one institute different faculties could set their own standards. There was engagement on the issue, and universities had full confidence in certificates issued by Umalusi.

On the subject of artisan training he said that there was a strong practical component in the new curriculum. Umalusi’s predecessor (SAFSED) had received a grant from the Department,  but only for one function. This meant that Umalusi had been established with a small baseline. It submitted a bargaining process, followed their budget and this submission.

Dr Rakometsi said that there was an independent council that assessed the work of Umalusi. The Chairperson was unable to attend this meeting. The stakeholders were appointed by the Minister and had a fiduciary function. There were both internal and external audit processes. Research was conducted on the quality indicators. Field tests were now also being conducted. It would be good if Umalusi was able to moderate the continuous assessment process during the year but there were financial constraints. Therefore evaluation could only take place on the year-end examinations. A number of reports were sent to the Minister on a continuous basis.

Mr M Mangena (AZAPO) said that it was a serious allegation that matriculation pass rates had been inflated.

The Chairperson said that this was indicated in the documentation. She suggested that a written report be submitted on this matter.

National Student Financial Aid Scheme (NSFAS) briefing
Mr Sipho Pityana, Chairperson, National Student Financial Aid Scheme, said that NSFAS had compiled a detailed document. It was the successor to TEFSA and had been established in 1999. Its mission was to provide loans and bursaries for students as well as the recovering of loans from beneficiaries. The Act under which it had been established had been amended to include students at the FET Colleges. Many South African citizens experienced financial challenges in accessing higher education. In 2009, 93% of the students benefiting from NSFAS were Africans and in 2008, 54% were female. The definition of scarce skills was also a motivating factor in the work of NSFAS.

Mr Pragasen Naicker, Chief Financial Officer, NSFAS, said that the main focus of NSFAS was on financial aid. This had to be affordable and sustainable. In 2008/09 R2.5 billion had been advanced to 153 000 students. Since the inception of NSFAS aid to the value of R12.2 billion had been rendered. There were continuous increases in the costs of higher education. NSFAS strove to keep its administrative costs as low as possible. The budget for administration in 2008/09 was R40 million. This represented 1.64% of the total budget only.

A research officer had been recruited ten months previously. This was now showing results. The single biggest funding source was the Department of Higher Education and Training (DHET). Higher Education Institutes (HEI) and FET Colleges also made funds available. Some provincial departments were using NSFAS to administer scarce skills bursaries. One company was also using NSFAS as a channel. Recovered loans were a major source of funding. NSFAS organised bursary funding on behalf of donors, but the donors sometimes set conditions.

Mr Pityana said that the slides showed points of intervention. The DoL was providing support for people with disabilities and there was top-up funding from DoE. The FET colleges were now part of NSFAS’s mandate and both State and private institutes made contributions. There were partnerships with the private sector. In particular Nedbank had made an annual commitment of R3.5 million.

Ms Rudman said there was a link between NSFAS and the HEIs and FET Colleges. It was crucial that the head office was well sourced. Staff at universities were accountable. The introduction of the Financial Intelligence Centre Act (FICA) had meant that more work had to be done on loan applications. At the end of the FY some unutilised funds remained. The Board had approved that these funds be rolled over to needy universities. In 2008 the Minister of Education had approved a R39 million top up grant, but this had come too late. It had been redistributed as required.

She said that NSFAS had written to the Vice Chancellors of the institutions to tell them that unused funding would be lost. Some of these institutions had only allocated 80% of the funds provided for them. NSFAS had accounting processes in July and again in October. Unspent funds could then be redistributed. Eighty percent of loan agreement forms had to be returned to NSFAS by September. Strict deadlines had to be met. This enabled NSFAS to redistribute funds where needed. In 2008 the Minister had approved the ring-fencing of funds for persons with disabilities. This was used for funding of special devices for these persons. There had been 860 university students benefiting from this funding in 2008.

There were up-front payments for students entering university, and usually up to 30% of annual fees must be paid in January or February. Of the 23 universities, ten had applied for the up-front payment of registration fees. These were historically black institutions.

Mr Naicker listed the strategic goals. An e-business strategy was being developed. NSFAS was looking to implement an electronic loan application form. There were requirements imposed by the new Credit Act. Aspects of the electronic form would be negotiated with the Department of Communication. The electronic form would greatly reduce the administrative burden and the processing time would also be reduced. This was a crucial requirement. Office space was also an issue. The current office space was sufficient for a staff complement of 26, but the complement was now 68. NSFAS had to move to larger premises. The Department of Public Works said that there was no space to accommodate NSFAS and it would therefore have to look to rent suitable premises.

Ms Merle Festers, Chief Financial Officer, Umalusi, said that the audit of the Annual Report was still in process. However, the reports for the previous seven years had all been unqualified. NSFAS had made a submission to the Auditor-General (AG) about a breach of regulations of which NSFAS was aware. The audit committee had made a recommendation to the Board and there would be no recurrence.

She said that income had grown from R1.4 billion to R1.7 billion, an increase of 25%. Loan repayments in 2008/09 were R396 million. Beneficiaries were expected to start repayments on securing employment with an annual salary of at least R30 000. Up to 40% of a loan might be converted into a bursary. The number of students assisted had grown from 72 000 to the current 153 000. The Funza Lushaka scheme was a conditional bursary. Should the student benefiting from this scheme not become a teacher after graduation, the bursary was changed to a loan. Recovery was R42 million per month and this money was re-injected into the funding scheme.

Mr Naicker said that the revised goals would enable NSFAS to expand fully. The goals were to utilise funds effectively, to sharpen internal efficiency, to reach the right targets, to impact on the scarce skills training needed for industry, to communicate effectively, especially regarding subject choices by learners at school, and to back policy by research.

Ms Festers noted that 70% of the funding for 2009/10 would come from the Department. Re-injected funding from loan repayments would provide 20%. Other funds would come from donors and the private sector. The amount spent on administration would be 2% of the budget and would increase in 2009, due to the growth of NSFAS.

Mr Pityana said that there had been a ministerial review into the shortcomings of NSFAS. The scheme was doing well but there were some policy challenges. The question was whether to give more students less money or fewer students more money. There was an increasing number of entry level applications from students with a middle class background. They would not qualify for funding strictly on the means test, but at the same time lacked the creditworthiness to negotiate loans with the financial institutions. There were still issues of access. Incentives should be provided to encourage students to perform. NSFAS had done a modelling exercise. There was scope for partnerships with the private sector. This would have to be considered in detail.

c Discussion
The Chairperson noted that this was a budget hearing and it was critical to have an understandable explanation of the finances. She presumed that grants came from government and the private sector in the form of bursaries and scholarships. She could not understand the ratio of administrative costs. She wanted to see a separate account of salaries and expenditure. The Committee needed to have an understanding of whether NSFAS had spent its entire budget or if it had in fact gone over the budget. Government had provided funding since the inception of NSFAS. She asked how much funding had been rolled over on a year-to-year basis. She concluded from the presentation that under spending for the previous FY was 2%.

Ms Festers said that this was correct.

The Chairperson said that 2% of R376 million was a considerable amount, of about R7.5 million.

Ms Festers said that R376 million was not the total allocation.

The Chairperson needed to see those figures. The same applied to non-governmental funding. She asked why there was under spending, apparently of quite high percentages. The Committee needed to see the figures the following day and the other information in due course.

Mr Pityana replied that income was derived from the Department, the private sector and the recovery of loans. NSFAS could forecast the amount of the recovery but this was a variable factor. It had taken money from the scarce skills fund. Funding was often allocated by donors, in which case NSFAS only acted as a conduit. Institutions decided on the distribution of funds for persons with disabilities and the funding of facilities. There was a high amount of under expenditure in this regard. A debate was needed on this issue as well as scarce skills. Provision of financial aid at the FET colleges was often as low as 38%. A detailed account was needed by NSFAS. If money was not allocated it would be lost to that institution.

The Chairperson wanted to see how effectively government funds were spent and what the figures were for the loans actually recovered against the projections. She asked what funds would be ring-fenced. There was a question of how to handle the issue of scarce skills.

Mr Naicker undertook to provide this information.

Ms A Mashishi (ANC) asked if there was any mechanism to assist the institutions to ensure that allocated funds were used. She asked if there was a lack of capacity.

Ms N Madlala (ANC) said that it was a complicated matter. HR and numerical statistics had been excluded from the presentation. She asked why this had happened. She wanted to know what the policy of NSFAS was. It should ensure that the poorest of the poor were helped. She asked what the strategy was at grass roots level. Matriculants were often unemployed, and without the opportunity to study further. She asked how people could be made aware of the opportunities available to them. She asked what was done about those people unable to repay their loans.

Mr R Bhoola (MF) asked if the revised goals led to an expansion of the pool. He asked if there was a relationship between the granting of bursaries and good performance in school. He asked if anyone could be given help if they had started their higher education using their own money. He asked what portion of the population was targeted for assistance, and if those in the rural areas received any preference.

Mr Pityana replied that NSFAS worked with all institutions. Each of these had a financial aid office (FAO). Audits were done on the shortcomings of NSFAS and the FAOs. There had been an exchange of information on their roles. Good performances were rewarded. University administrations should see the FAO as in important component. He commented that a longer engagement was needed to explain formulas that NSFAS used.

He said that there were targets for scarce skills. Funds were under-utilised, particularly in the fields of mathematics and science. These subjects were normally poorly taught at the schools targeted by NSFAS. There were more students studying the human sciences but the funding pool was smaller.

Mr Naicker admitted that communication was a weak area for NSFAS. Not enough information was being disseminated. Leaflets and posters were distributed in schools. A non-governmental organisation (NGO) was spreading the word in the rural areas. NSFAS needed to invest more in its communication resources.

He said that no student was expected to repay the loan until after graduation. NSFAS had an effective scheme, linked to the South African Revenue Service (SARS), which made it aware of when the former student became employed. The same applied to those students who dropped out before graduation.

The Chairperson asked if there was no correlation with well-performing matriculants and benefits. Some could not afford to follow courses like engineering so would rather study human sciences. More and more people were falling on hard times.

Mr Pityana replied that there was not a strong correlation between success at matric level and funding. Students in this position could apply for assistance from NSFAS and the FAO also had access to other privately funded bursaries. Universities also had their own funding sources. Research showed that children from poor families were still disadvantaged. The poor standards at many schools hampered the academic progress of the students, which explained why it took so long for students from this background to graduate. NSFAS had a policy of funding a student for three years but made provision for an extra two years to complete the degree.

Ms Mushwana commented on the image of the NSFAS. Interviews with school leavers revealed a lack of hope. She asked if there was a grand plan to boost the number of successful learners.

Mr Kganare asked if NSFAS would explain the reason for underspending.

Ms Mushwana said that government wanted to improve the lives of its citizens. When people had to rely on borrowed money they would be poor forever.

Mr Lekgetho asked where NSFAS was based.

Mr Pityana said that NSFAS had only one office, which was located in Cape Town. There were branches at the different HEIs and it was connected to a network of FAOs. This meant that it was not visible enough. NSFAS needed resources to redirect funds adequately. If funding was important to students then institutions should have the capacity to provide assistance. Money must be used correctly. He emphasised that loans were only recovered once the beneficiary was employed. There was an 80% recovery rate.

The Chairperson emphasised that the information requested should be provided as soon as possible.

Council for Higher Education briefing
Dr Cheryl de la Rey, Chief Executive Officer, Council for Higher Education, said that the Minister appointed members of the CHE. The CHE was in its eleventh year, having been founded by the Higher Education Act of 1997. It were obliged to advise the Minister, if requested, but could also provide advice on a proactive base. Recent areas of advice had been the drafting of a distance education policy, and the use of the title “University” with the establishment of Universities of Technology and institutional autonomy.

She said that the CHE monitored the state of higher education (HE) against policy objectives.
It had been busy with a report on this for the last five years. This covered both private and public institutions, although there was not much information on the private institutions.

Dr de la Rey said that as from June 2009 there had been a QC for HE. This contributed to the development of HE. The CHE was obliged to arrange an annual conference. The focus was normally placed on a specific theme. The HE Amendment Act of 2008 had addressed new qualifications, the promotion of quality and quality assurance. The CHE had a responsibility with the implementation of these new measures and to set standards.

The CHE had a small staff of 45. There was a high proportion of vacancies. Remuneration levels were relatively low, which was one of the reasons for the vacancies. There was no HR management capacity and she and some of her executive members had to perform these functions themselves. She wished to see the staff complement grow to 72 over the next five years. Ten posts were vacant, excluding areas of responsibility identified in the HE Amendment Act. She presented statistics on the demographic make-up of the CHE. There was not sufficient black representation at senior level at present. In terms of gender it was a woman-dominated organisation.

Ms de la Rey said that the CHE had requested a budget of R41 million in September 2008. This had not covered the new mandate given by the HE Amendment Act. In February 2009 the amount of R36 million was approved, with another R6.3 million to cover set-up costs. The difference between the request and the approved amount would have been used to focus on the Council’s strategic focus areas. These included a full assessment of current HE systems. There were two groupings. The assessment was conducted at five universities, all of which were located in the rural areas and had been established in the former homelands. A second focus area was the South African technical network. The CHE wished to determine if the Universities of Technology were satisfying South Africa’s needs. They were seen in a different light to the conventional universities. A third area of focus lay in assisting the HE system on a long-term basis. For example, in Japan there was a 100-year plan in place.

She said that there was a cluster of projects. One of these was the consideration raised by the Minister as to whether a Bachelor degree should be extended from three to four years. Curriculum reform was another project. Other projects concerned doctoral degrees, community engagement and the contribution of public HE to national economic development. A set of indicators had been developed. The next generation of scholars had to be considered. Funding and accountability were important. There were dual systems of funding. There were competitive grants for the fields of science and technology whereas there were block grants for the other fields of study.

Dr de la Rey said that globalisation and internationalism had to be considered. There were three forms of QA. The CHE had conducted a national review into Master of Business Administration (MBA) courses on offer. Programmes had been accredited and there was an audit of institutions.

She said that the budget was dependent on a government grant. There were other smaller sources of funding, which had to be applied to meet the gap between the grant and the CHE’s requirements. There was a need to increase the Council’s fees and for better cost recovery. The CHE also needed to develop a better system to estimate its costs. The current allocation would see 40% of the budget go to corporate services. Of this, salaries amounted to 58%.

She said that the non-financial indicators included a review of institutions. An improvement plan was required. Requests for advice were based on past experience. The CHE did not do primary research but had access to research data which it interpreted. It could increase its own impact on HE but would need a realistic budget to achieve this. It had no resources to service new areas.

Mr Philip Benade, Chief Financial Officer, Department of Education, said that negotiations on the CHE’s request to cover its requirements were at an advanced stage. The matter was in the hands of the National Treasury (NT).

Discussion
Mr James said that the country had been advised to produce more and better quality scientific graduates. The Universities of Technology were good technical colleges and some bordered on the standard of conventional universities. The question was on how to grow these institutions in the course of time

The Chairperson said that the CHE should develop a plan for HE over a period of 20 to 30 years. There were three challenges facing the world; it was getting hotter, more crowded and hungrier. There would be a huge challenge globally over the next 50 to 60 years. The education system should be seen as a whole, and should be geared up to address these issues. There was also a challenge in addressing the imbalances of the past. Food security would be a major concern in the future, and children should be learning the technology to grow more food crops effectively. She did not see any initiatives in this area. There was a need for agricultural education, as people lost the knowledge of how to grow their own food once they became urbanised. Mass farming posed a danger to the land. There should be, but was not, urgency in finding solutions to these problems. This need was particularly in the third world and especially in Africa.

Mr Makhubela had heard there was a dropout rate of 50%. He asked if this was an official figure.

Mr Smiles said that an assessment of capacity was important. Universities had to become centres of excellence. He asked what the impact would be on the University of Stellenbosch, which was a predominantly Afrikaans medium institution. An NGO had argued that there should be two Afrikaans medium universities, one in the north and one in the south of the country. Prof Jakes Gerwel agreed with this opinion.

Mr Lekgetho feared that the young in the community were being taught to hate.

Dr de la Rey replied that the CHE had drafted advice on the question of more science graduates, which would submit it to the Minister. There was a difference in the systems. Professional areas were covered by the curriculum at each level. International information was available, which was now being supplemented by local data. Every student should have at least one opportunity of being in a small class of no more than 25 students. This would help to improve the quality of graduates. Many students did not enjoy this opportunity. The ratio of students to lecturers was simply too high.

She said that attention was being given to learning challenges. One of these was the timing of the academic year. The first month was spent in induction programmes and generally gave the new students the opportunity of having some fun. It might be better if new students should face critical academic challenges in their first two weeks.  Attention was also being paid to a holistic system of education. This would include the student’s experience outside the class in matters such as residence life and participation in clubs and societies. A complete rethink on student life was needed. Research would give the CHE insights.

Dr de la Rey said that quality teaching and learning would result from closer monitoring. The end of the year should not be the time to discover that the student was not coping. Investment was needed in facilities such as laboratories.

She said that national research and the development of strategies were important to the future of HE. There were highlights in some key areas. There was a need for more enquiries based from entry level. There should also be a focus on research at a post-graduate level.

Dr de la Rey agreed that food security and urban migration were major issues. The strategy must be aligned with national rural development initiatives and an anti-poverty strategy had to be in place. Many people had visited the United States of America and had seen institutions that had developed from land grants. These were starting to address specific vocational areas. Better co-ordination was needed with public entities.

She said that the available data on the dropout rate was not sharp enough. There were a number of students who were successful in their studies but still dropped out, for whatever reason. Smaller studies were under way. Not enough qualitative research had been done.

She said that research supported the principle of multi-lingualism at all levels. A report had been tabled some time previously. There was a need to support indigenous languages. Students following some courses thought they would enhance their career prospects if they took instruction in a language other than their own. English was seen as a preferred language. She referred to this as their choice of examination language. The problem was how to support multi-lingualism. If resources were needed, then they must be put in place. It was not just an issue with Afrikaans.

She said that attention must be paid to the culture of institutions. Audits conducted by the institutions concurred with the thinking of the CHE. Each institute had its own transformation issues. The CHE was looking not only at the curricula but also at life in the residences and sports clubs and societies. There had to be a move to overcome divisions.

The Chairperson said that this would be an ongoing study. She did not want to see any more scandalous events at the HEIs.

Dr de la Rey said that CHE must stay within its mandate. Some transformation indicators were included in its reports. It wished to promote the discussion on transformation strategies. The CHE had no power to implement transformation policies within institutions but could only engage with the leadership.

The Chairperson said that this was not an issue that could be placed on the back burner, as it was important and would contribute to the normalisation of society.

The Chairperson reminded Member that the report on the budget vote hearings had to be ready by 26 June. The Committee would plan a visit to NSFAS in the near future. She was still awaiting the AG’s report. It was difficult to get someone to take responsibility for the report. The Department would have to respond.

The meeting was adjourned.

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