Office of auditor-General & National Treasury on an overview of Provincial Education spending: briefing

Basic Education

12 October 2010
Chairperson: Ms F Chohan (ANC)
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Meeting Summary

The Chairperson explained that this was a joint meeting because the Members would be dealing with the Department of Education’s Annual Report for 2009/10, the last year of the Department of Education’s existence as such. He reminded Members that the Minister had recently held summits dealing with Higher Education and Further Education and Training. He highlighted that the Department of Education had received an unqualified audit and a good report, but the performance evaluation spoke otherwise.

The Directors-General of Higher Education and Training and Basic Education presented the Department of Education’s Annual Report for 2009/10.

The Department of Education was abolished during the macro reorganisation process of the National Government during 2009/10. However, the newly established departments continued their functions under the Department of Education until 31 March 2010. The functions and budget of the Department were split between the newly established Departments of “Basic Education” and “Higher Education and Training” from 1 April 2010. The functions of the Department of Education were continued in these two Departments.

It was acknowledged that the split of the Department of Education into two departments had had a negative impact on service delivery. Processes were complicated by the assignment of functions to two new Ministries and Directors-General, while the budget remained with the Department of Education. This in itself was a challenge as the new Departments had their own political mandates and programmes, but the Accounting Officer for Education remained responsible for the budget.

Although the Department of Education had closed down on 31 March 2010, the books of account would remain open until fully cleared. This process would be managed by the Department of Higher Education and Training under the leadership of Prof Mary Metcalfe, who had been appointed as the Accounting Officer for the Department of Education. The 2009/10 Annual Report of the Department of Education must therefore be seen as the final report on the operations of that Department and the bridge towards the functioning of the newly established Departments.

The Minister had declared 60% of learners to be in no-fee schools.  The technical design phase of National Educational Infrastructure Management System was completed, further additions to the Occupational Specific Dispensation for educators were implemented, and audio-visual training materials on the Integrated Quality Management System were developed and distributed to schools. The National Education Evaluation Development Unit was set up and posts were being filled, bursary support had been provided to
1 063 maths, science and technology students, and the Ministry of Finance had concurred on the Policy Infrastructure as well as the Norms and Standards for school infrastructure.

A Human Resource Planning Framework had also been developed; the information system prototype had been completed and the Learner Unit Record Information and Tracking System had been implemented.
Furthermore an exemplar code of conduct for Learners at all public schools was developed. This was distributed to all provinces. The School Nutrition Programme had been extended to Quintile One secondary schools. Over 600 000 learners had attended the Kha Ri Gude mass literacy campaign classes.

In 2008 the College Councils had taken over the responsibility of being an employer; it was discovered after this that the Councils did not have the capacity for this job. A training manual was created to rectify this.

In 2009 the College Funding Norms were developed, 2009 was the first dry run of these norms in an effort to ensure they would be ready by April 2010. The core of these norms focused on ensuring access and equity across the provinces. The funding was focused on following the students and not institutions. An assessment policy was developed for Adult Education and Training in 2009/10 and gazetted to the public for comment. This tool was completed in order to monitor the implementation of Adult Education and Training funding norms in the provinces.  The Higher Education section had recently been renamed the Universities Branch. The Department noted that one of its key goals was the strengthening of governance at Higher Education Institutions to ensure greater participation. A task team was put in place to look at the Research Development Grants.

Members questioned the substance of the Department of Education’s achievements, noted the lack of indicators, paid special attention to disruptions on infrastructure, interrogated the actions of the Department vis-à-vis members of the general public, asked the Department to explain its role in establishing and maintaining schools, asked about the School Nutrition Programme, the printing of workbooks, took issue with the number of vacant posts, and wondered why the Department was asking for more resources even though existing posts remained unfilled. Members were also interested in the mood within Basic Education and Higher Education and Training since the split.

The Committee required that the Department should give progress updates regarding the implementation of the Policy on the Organisation, Roles and Responsibilities of Education Districts and finalisation of the Policy for Learner Transport and Hostel Provisioning. The Committee was concerned that the Department had for two consecutive years been unable to finalise the development of a methodology for costing, as well as to determine the costing of a Basic Minimum Package for Schooling, which the Department first stated it would do in 2009. It was also concerned that the Department had not finalised the Funding Norms for Inclusive Education and Special Schools.

The Auditor-General of South Africa briefed the Committee on the audit outcome on the Provincial and National Departments of Education, conclusions on audit of pre-determined objectives, overview on education sector auditing, and highlights on the performance (financial and non-financial) of the entities related to the Department of Education. The Auditor-General of South Africa said that, ideally, departments should strive for a clean audit report, which was an unqualified opinion on the financial statements, without the need to include other matters under the auditor’s opinion paragraph. Only the national department received a clean audit report. There were no clean audit reports in any of the nine provincial departments. Gauteng, KwaZulu-Natal and Western Cape received unqualified reports with other matters noted in the report. All the remaining provincial departments received qualified audit opinions ranging from qualified audit reports (three reports), to a disclaimer (one report) and an adverse report (one report). The Auditor-General of South Africa concluded that the overall performance of the provincial education departments in terms of internal controls remained unsatisfactory. Six of nine provinces received either a disclaimer or a qualified audit opinion. Of concern was that the number of provinces that received a disclaimer of audit opinion had grown from one in 2008/09 to three
in the 2009/10 financial year. The root causes for the negative audit outcomes indicated above lay in the
internal control deficiencies identified in the three fundamental areas of internal control, namely, leadership, financial and performance management and governance.

Members were shocked at the over expenditure and asked for more clarity on leadership issues. They were also interested in the findings of the sector report and asked when this would be available. Members asked about the system and processes and monitoring tools established. Members expressed particular concern over who was responsible for rectifying the situation and what the role of the Auditor-General would be in following up the findings of the report findings. A joint meeting with the National Treasury was suggested.


 

Meeting report

Department of Education. Annual Report 2009/10. Presentation.
Background
The Directors-General of Higher Education and Training and Basic Education presented the Department of Education’s Annual Report for 2009/10.

The Department of Education was abolished during the macro reorganisation process of the National Government during 2009/10. However, the newly established departments continued their functions under the Department of Education until 31 March 2010. The functions and budget of the Department were split between the newly established Departments of “Basic Education” and “Higher Education and Training” from 1 April 2010. The functions of the Department of Education were continued in these two Departments.

It must be acknowledged that the split of the Department of Education into two departments had a negative impact on service delivery. Processes were complicated by the assignment of functions to two new Ministries and Directors-General, while the budget remained with the Department of Education. This in itself was a challenge as the new Departments had their own political mandates and programmes, but the Accounting Officer for Education remained responsible for the budget.

Although the Department of Education had closed down on 31 March 2010, the books of account would remain open until fully cleared. This process would be managed by the Department of Higher Education and Training under the leadership of Prof Metcalfe, who had been appointed as the Accounting Officer for the Department of Education. The 2009/10 Annual Report of the Department of Education must therefore be seen as the final report on the operations of that Department and the bridge towards the functioning of the newly established Departments.

Part 1 – Higher Education & Training
Prof Mary Metcalfe, Director General, Department of Higher Education and Training, explained that the Department of Education had been abolished in the macro reorganisation of Government in 2009/10. Although this had created two new Departments, they were still as committed to their goals of education and training. She explained that the two Departments continued to work together in a single goal system towards one goal. She noted that although they had had two ministers since 2009, the Department of Education had carried on its work until 2010.  Functions were split. 42% went to the Department of Higher Education and Training and 58% went to Basic Education. Both Departments continued to work towards the Strategic Plan presented to the Committee in 2009. She explained that the report before the Committee dealt with that strategic plan, dealing with both financial and formal compliance. She did highlight that the negative impact of the split had meant that staff had performed corporate functions within the formally single Department, yet were required to be split between the two Departments. This often required those staff to do more work than they previously had, as they were often doing the work that had been done by two people. She stressed the need for Corporate Services to be bought up to full capacity and that this would require more resources

She explained that currently the Department of Education (DOE) was still considered a legal entity for  the books of the account remained open until they had been fully cleared. This process would be handled by the DoHET under the guidance of its Director-General, who had been appointed as the accounting officer for DOE. She noted that this was simply a move that made the most sense and that regardless of this DoHET worked closely with the Department of Basic Education (DBE).

Department of Education. Annual Report 2009/10. Presentation. Part 2 – Basic Education
Mr Bobby Soobrayan, Director General, Department of Basic Education, presented on Basic Education – significant events and achievements.

Mr Bobby Soobrayan said that the fact that the Minister had declared 60% of learners to be in no-fee schools had had a significant impact on the number of learners accessing school - approximately 8 million in 19 000 schools. The technical design phase of National Educational Infrastructure Management System (NEIMS) was completed, further additions to the Occupational Specific Dispensation (OSD) for educators were implemented, audio-visual training material on the Integrated Quality Management System (IQMS) were developed and distributed to schools, National Education Evaluation Development (NEEDU) was set up and posts were being filled, bursary support had been provided to 1 063 maths, science and technology students, and the Ministry of Finance had concurred on the Policy Infrastructure as well as the Norms and Standards for school infrastructure. He stressed that the norms and standards provided a comprehensive approach to school construction and provided a more comprehensive approach to planning and budgeting, including stipulating what should be provided and how such as libraries and ablution facilities.

A Human Resource Planning Framework had also been developed to assist the sector with planning for the demand, supply and utilisation of educators; the information system prototype had been completed and the Learner Unit Record Information and Tracking System (LURTIS) had been implemented. He stressed that this had been an ambitious project but that it was on track and that this system was one of the very few in the world. The programme provided information on each learner, allowing the Department to know where a child had been from childhood to adulthood in terms of education. Continuing with significant achievement and events he highlighted that the Department had achieved 77% enrolment of Grade R learners at public and independent primary schools and community sites. Quality in terms of Grade R learning remained a priority. School governing body elections took place at various schools. He noted here that there continued to be issues with regards to the behaviour of governing bodies. He highlighted that participation in the annual national assessment (ANA) in literacy and numeracy for Grade 1-6 increased to more than 90%. The Data Quality Audit of some of the worst transgressing schools was concluded. He stressed that this was a key intervention in improving quality in basic education. He was hopeful that the next audit would show even greater improvement although he noted that this had been postponed due to the recent strike action. The Department provided key support in developing Grade 12 assessment tasks for all 16 subjects, the Teenage Pregnancy in South Africa report was released and a teacher guide to building humanity and accountability in schools was developed. This had received widespread input. He explained that this was created in order to support teachers in their endeavours and inculcate a culture of responsibility and accountability among young people.

Furthermore an exemplar code of conduct for Learners at all public schools was developed. This was distributed to all provinces, which would then be able to encourage schools to develop individual and specific code of conduct. He noted that they had encountered a challenge over the years with regards to discipline and behaviour and that this was an attempt to deal with this.

The School Nutrition Programme had been extended to Quintile One secondary schools. Provinces had been provided with financial resources to prepare Quintile Two secondary schools for the implementation during the 2010/11 financial year. Research had shown that nutrition had a positive impact on school attendance. He explained that school health screenings programmes had been rolled out in conjunction with the Department of Health.
Lastly over 600 000 learners had attended the Kha Ri Gude literacy campaign classes. The programme had reached 1 million of the targeted 4.7 million with little or no schooling. This created 40 000 short term jobs and reached 1 700 blind and deaf learners.

Briefing on further education and training colleges.
Dr Bheki Mahlobo, Acting Deputy Director General, Department of Higher Education and Training, presented to the Committee on Further Education and Training Colleges focusing on the achievements for 2009/10. He explained that before 2009 there had been an indication from the Further Education Training (FET) college centre that the funding regime in use was not accurate because colleges tended to cost programmes individually. This affected uniformity. In response to this, in 2009 the College Funding Norms were developed, 2009 was the first dry run of these norms in an effort to ensure they would be ready by April 2010. The core of these norms focused on ensuring access and equity across the provinces. The funding was focused on following the students and not institutions, which may not have had students in them. Inherent in these norms was the funding formula, which meant that each programme would have had to have been costed at the cheapest and the variation between this and the most expensive. The same norms also required a register of programmes, which would then have to be gazetted as policy and listed as funded by the state. He noted that this had been completed and was an instrument used by the current DoHET. He explained that the changes taking place in the Higher Education landscape necessitated a re-visitation of the funding norms and the programmes being offered. This was to ensure that all programmes costs were normalised to ensure fairness of the funding distribution mechanism. He noted that in looking at the financial statements of the Colleges, the Department had discovered that 16 of the colleges were running at a deficit. In reviewing the funding norms the Department had come to the conclusion that had, had a knock on effect in terms of financial viability of some of the colleges. He explained that the Department was busy investigating and creating corrective measures.

Dr Mahlobo explained that in 2008 the College Councils had taken over the responsibility of being an employer; it was discovered after this that they did not have the capacity for this job. In order to fix this, a training manual was created to rectify this. He highlighted that this had been FET process which would be making recommendation to the Minister in terms of who should be the employer and a report was in the process of being completed, this would deal directly with the capacity of colleges and their ability to deal with the employer function. Turning to Adult Education and Training (AET) he explained that 2009/10 an assessment policy was developed and gazetted to the public for comment. This tool was completed in order to monitor the implementation of AET funding norms in the provinces. However, he stressed that it had not been implemented due to the fact that they had become aware that landscape for AET in the country was currently changing. The DoHET had decided to halt the funding norms until the sector had stabilised and  had come to a conclusion as to what sort of adult educational norm would provide both vocational and professional training. He explained that a challenge in the AET sector was that of the educators. In the year under review a discussion took place in order to decide if the educators in this sector required a separate set of conditions of service. It was decided that this was necessary, that work around this was ongoing.

Ms Kirti Menon, Acting Deputy Director-General, Department of Higher Education & Training, presented to the Committee on the Higher Education section. She explained that this had recently been renamed the Universities Branch. She noted that one of its key goals was the strengthening of governance at Higher Education Institutions to ensure greater participation, in order to do so a framework had been developed to analyse and review institutional statutes. This had taken some time to develop, as it was impossible to have one framework for all. The DoHET had also been working quite closely with institutions assisting with research outputs in order to improve their ability to manage information. It also assisted in ensuring grants were utilised and proposals were placed, this was monitored through the submission of project proposals and audited statements from the University. She also informed the Committee that a task team was put in place to look at the Research Development Grants. It provided a report which was quite useful and suggested different ways of allocating the grant to ensure more widespread usage of the grant. She noted that in 2010/11 it would be looking at different ways of suing the grant, noting that until then the current model would continue.

All clinical training grant proposals had been approved during the financial year. Extensive modelling had been done in relation to these, using the clinical training grant model to trying and discover how they could expand clinical training within the medical system. She also explained that institutions had received support in order to better manage Student Representative Council ( SRC) elections. The Department had focused on strengthening of leadership at institutions for students.

Ms Menon explained that at the beginning of every year universities could be understood as under siege by new students. These students were often in need of help; to assist in this process the DoHET had implemented a student registration monitoring process. This had been implemented in January and included a call centre and a team of people in liaison with institutions assisting with student queries. She stressed that this had been an attempt to deal with upheaval; they had dealt with over 800 queries. The Department had also worked quite closely with the national student financial aid scheme. In terms of Higher Education Act, the Minister had the right to appoint a person to each council. In order to do so the DoHET was required to establish the skills set required for this appointee. She also noted that a draft policy on health sciences enrolment planning was developed and the consultation process with regards to this would be continuing into 2010/11. Work had also commenced on the review of higher education funding framework. This would continue into the 2010/11 financial year; this would be reported on in the next financial year.


Department of Education. Annual Report 2009/10. Presentation. Part 3 – Annual Financial Statements
Mr Theunis Tredoux, Chief Financial Officer, Department of Higher Education & Training, provided a report on the Annual Financial Statement for the entire department. He stated that total expenditure for the Department was R21. 3 billion this resulted in a deviation of R486 million and total spending was 97.8%. He highlighted good total spending throughout apart from goods and services; he attributed this to programme three. He explained that there was a difference between under spending and saving and that each programme had experienced some under spending due to a request by the former Director General that programmes continue to provide services in the most economical way possible. Programme One: Administrations had 1,4 million unspent, this was due to the late receipt of invoices and the fact that certain items turned out to be cheaper than initially anticipated. Under Programme Two: System Planning and Monitoring, they had unspent by 4 million, this was due to the outstanding claims from the IQMS moderators and the slower than expected filling of posts for NEEDU. Programme 3: General Education had R477 million unspent. The bulk of this was due to the inability of the DBE to appoint a service provider to create workbooks, progress had been made subsequently. Programme 4: Further Education and Training had R1,5 million unspent this was due to cost saving measures on administrative expenditure. Programme 5: Social and School enrichment had a small saving of R2,4 million mainly due to the conditional grant. He stressed that this was not the grant itself but an element of the grant. Again there were also cost saving measures on administrative expenditure. The saving was also due to the fact that some posts took longer than expected to fill. Programme 6: Higher Education had R 146 000 unspent this was also mainly due to the late filling of vacancies. Lastly in Programme 8: Auxiliary and Associated Services, R311 000 had gone unspent this had been due to cost saving measure son administrative expenditure

Prof Mary Metcalfe, Director General, Department of Higher Education and Training, dealt directly with the report of the Auditor General. She explained that a review of the Annual report looks at both performance and the report of the Auditor General (AG). The Departments had received an unqualified opinion from the AG, one matter was raised and this was that two of the departments had not met their quarterly reporting on performance information. She noted that it was the responsibility of the Executive Authority to receive the reports in the time frame given she explained that this was being monitored closely.

Mr Soobrayan acknowledged that the report reflected compliance on behalf of the Departments. He noted though that the report was simply one element of their work and that within the report there was more information on the challenges that they were addressing particularly in terms of the indicators for the Department. He explained that the Annual Report required them to report on there vote function and not that of the provinces, although they were well aware of their stewardship role and were in the process of working out the role of both Departments in inter-government relations.

Discussion

The Chairperson noted issues around perceived gains and goals reached, yet a number had not been reached. He queried the fact that objectives had not been stated up front and that this was a general trend, which would need to change. He suggested that as long as the objective was vague enough you could meet a sound objective. He also questioned the vague language around certain issues and whether this was helpful. He also raised issues about patriotism, nation building and information on what Basic Education was doing to this end particularly with regards to the guide mentioned.

Ms M Kubayi (ANC) noted a number of activities being sent out of the Department and raised concern with the lack of feedback. She also questioned the Department’s relations with sister departments and what governed these relations. She also stressed that the Department would need to make the acronyms used in the Annual Report clearer in order to allow public access.

Ms N Vukuza (COPE) challenged the Department in its dealings with people. The split would mean institutional changes, and she asked what the Department was doing in terms of staff management in relation to this. She asked for a guarantee of quality when discussing education, particularly addressing the CFO’s comments on cost effectiveness. She asked whether learners were becoming more informed about what they would need to enter into the University space. She also asked if there was recourse should ministerial appointees not have the requisite skills required

Mr W James (DA) asked the respective Directors-General about the mood in their Departments.

Mr B Skosane (ANC) asked the Department to unpack its plan for dealing with the lack of infrastructure in rural areas

Mr Soobrayan noted the issues with articulating gains vaguely and that they were in process of dealing with this. He informed the Committee that they were involved in a process currently called ‘gaining’. He explained this as a technical approach, which required the setting of the bar very low in order to over stretch it. He informed the Committee that they did not want to default to a point where they were simply reporting on compliance issues. They were also wary of reporting on indicators that were not credible in the first place. He noted the issues that could be misleading with regards to the reports and the language in them. In terms of the teacher guide t school level he noted the concern but stated that there were basic things they believed everyone should identify with. In light of this they were not forcing anything. He agreed on the language and reporting issues.

In terms of working with other Departments, he stressed that there was an emphasis on this matter although there were challenges in working across Departments. He noted the need for this and stressed that when issues had become very important Director-General to Director-General meetings had taken place. The spirit in the Department was understood as high and that there was visible conviction from staff in terms of where the Departments were going respectively. In terms of the change process he acknowledged there was a need for a change management programme and a plan. He stressed the importance of the plan for people to focus on and this was in place. He acknowledged the lack of reports but stated that reporting of performance information was becoming increasingly institutionalised and in terms of this they would have to make sure that the Department operated properly in terms of what was required. He noted a challenge was institutionalising while dealing with budget pressure. He also explained that infrastructure presented two important challenges to the Department' this was in terms of physical infrastructure and monetary issues and these would have a huge impact on the future of the Departments.

Prof Metcalfe suggested that the heart of the process was the reliability of the indicators. She noted that there was a debate around which indicators would be used, whatever was used would need to be valid and reliable and these would have to measure impact in terms of goals and priorities. She suggested that these questions would need to be dealt with in workshop mode in order to ensure the use of the best possible indicators. She noted the indicators currently used by the presidency but suggested that these were minimal and that the Department would require more than this, she requested the Committees assistance on this.

Ms Menon explained that they had recently followed up and dealt with the 277 students at an institution who were struggling with access at a particular institution. What came to light was that a number of students were taking the wrong combination of subjects in order to enter into engineering. A task team was set up to assist the FET College in guiding their students on subject choices. She stressed that an area that required some work was the strengthening of subjects at FET level in order to project on the correct career path

The Chairperson requested a memo addressing what had actually happened to the 277 FET students

Mr Mahlobo addressed the question relating to quality versus cost effectiveness. He acknowledged that there should be a balance, but that when he referred to a cheaper programme he was not referring to a lack of quality but rather he was questioning what the cost drivers of that programme would be. He suggested theoretical programmes would be of a lower cost; these would become the low cost programme rate. The quality of these programmes would be ensured through curriculum quality assurance. In terms of articulation he noted that in 2009 it was suggested that the articulating of student from colleges into universities would end. A policy outlining the requirements of degrees and diplomas was available and circulating. He noted the need to integrate the University and FET college provision so that FET colleges could become aware of the demands of Universities so that students could receive greater support

Prof Metcalfe addressed the mood in the Department; She suggested that those employed in the Department gave a sense that they understood that public service was a vocation. They were working for the sector and the contribution they were making to this country. She noted that they were well aware that they could do no work without the basis of an Act or Regulation, although this could allow for a number of bureaucratic issues they were aware of this and were in process of working on this in conjunction with other Departments and the Presidency. She explained as well that as a Department they were aware of the risk of over working but were attempting to provide a space for their staff to relax.

Mr A van der Westhuizen (DA) expressed frustration at the vacancy rate within the Departments

Ms Menon explained that each institution was governed by its own statute, in light of this the last round of appointments had been based on the skills needed on an institutional basis. Appointments were being monitored closely, although the statue did not make provision for a change or a switch

Mr Tredoux addressed the vacancy rate question noting that some positions had not been filled. He explained that there had always been vacancies in the Department and rather appointees were made in relation to the project running over a shorter period. This appointment was not made to address capacity issues but rather to perform for a specific period.  In terms of the current financial year and the budget split he highlighted that National Treasury had not allocated additional funds to either Departments to fill their additional posts. The only funds provided were for creating the new ministries and the new Directors-General. This has left the Departments with shortages. He noted though that both Departments have begun the process of advertising for vacancies. He also noted that after the split there was a duplication of the administrative set up of the previous Department of Education, due to the staff split percentage a number of posts were left vacant and without a budget to fill them.


Prof Metcalfe explained that the Government was a member of the United Nations and its various substructures. There were substantive benefits to education in terms of international cooperation in order to take part; there was need to meet financial requirements with regards to membership fees. She argued that these fees were justifiable in terms of the benefits received.

Mr Tredoux clarified that the membership fees, which appeared on the votes of the Department, were for the whole country and not simply the Department

The Chairperson reiterated the vacancy issue and suggested that they would need to know what the plan for rectifying this would be. He also asked for information on suspensions and the cost of these. He highlighted issues around immigration particularly with regards to skilled workers

Prof Metcalfe replied that they were busy working on their organogram and promised a report within in the next two weeks. There were also no suspensions in Higher Education presently

Ms Kubayi asked about the report of the Fifteen Year Review, she noted that it had been not been concluded due to the consultant suggested poor planning on behalf of the Department. She suggested Programme Two had unperformed. She highlighted the achievements the Strategic Plan had put forward but highlighted that there was no indication of demand or what these achievements were being made against. She asked how the Department could monitor infrastructure development if there were no reports available.

The Chairperson asked if it was in fact Treasury that was not able to hold the process down

Mr James explained that in the previous year he had asked the former Minister how many biology teachers, teaching biology were qualified to teach and had received a less than satisfactory reply about qualifications and the electronic capturing system. He asked if this had been rectified.

Ms F Mushwana (ANC) addressed the suggested deaf and blind learners that had benefited from the readership programme. She asked about conditions of infrastructure in schools where children required special assistance. She suggested that children such as this had particular environmental issues to confront and asked if the Department could ensure that services rendered to these types of schools would be usable.

Mr Soobrayan highlighted the link between national and provincial and issues around capacity and role players. Managing of intergovernmental relations meant that they did not yet have a coherent plan in place as yet. He noted that the budget around infrastructure this was driven by need not by size. He suggested this came down to a planning problem and a budget issue. Provinces would receive money and then decide whether to dedicate the entire requested amount or otherwise. Norms and standards coupled with provinces and the implementation chain were proving problematic; an answer to this was there current plan - The Accelerated School Infrastructure Initiative. He noted this was a Departmental driven idea focused on standardising the requirements for building schools. In terms of agreements with Treasury, work was on going but he suggested that they would definitely benefit form a joint meeting.

The Chairperson agreed and stated that there was definitely a visible need for a meeting between Basic Education, Treasury and Public Works. He asked if IDIP had not yielded what was required from it.

Mr Soobrayan explained that community involvement was central but that they had lost a lot of money due to vandalism of schools. He suggested that this was due to a loss of community involvement. This needs to be rectified; by informing the community the school is being given to them. He stressed communities needed to own schools and participate in schools. Addressing questions of qualified teachers he stated that the information’s was currently registered on the Persal system although it was well known that there were very serious issues with this system. He also raised the question of what could be considered a qualified teacher. He suggested that there was a need on the Departments part to clarify what it meant by qualified and teacher. He noted challenges at school level with regards to catering for needs, and that this was being addressed in the Departments actual plan. He noted challenges at school levels in catering properly for students in need

Mr Makhubele asked about the status of NEEDU and when they could expect it to be a fully functioning organisation, as this had not been indicated in the report. He asked about the 95% expenditure and what it was actually used for as the report seemed to indicate a number of areas were not covered.

Mr N Kganyago (UDM) suggested that a number of learners in FET had not completed matric; he asked why in terms of this, this unit was placed within Higher Education & Training. He suggested that a focus on language over skills was not profitable for learners in FET colleges

Mr Soobrayan stated that a full time CEO had been appointed to NEEDU. He explained that this had taken some time due to the fact that they were finalising its documents and did not want it to start off as a huge institution but rather it should grow as is needed. He replied that the Department had achieved a number of goals; these were often small taking up the expenditure leading to the 95%. He also noted that a number of projects were funded by donor funding and that these would not appear within the expenditure.

Prof Metcalfe addressed the issues of language noting the need for all institutions to work so that all languages could be respected. She informed the Committee that a round table would be taking place in the near future to discuss this matter further particularly with regards to the advancement and consolidation of languages. A report of the round table would be made available to the Committee.

Ms Menon informed the Committee that recent research had suggested that the number of students taking African languages in universities was low and that the round table would attempt to address this

Mr K Dikobo (AZAPO) asked for more information on the conditions of service for Early Childhood Development (ECD) practitioners, particularly those below Grade R. He suggested that this group of people in particular work under difficult conditions. He also suggested that the Departments had been silent on quality teaching

Ms J Kloppers-Lourens (DA) asked what would be happening with the annual national assessment tests since these had been postponed due to the strikes. She highlighted the 476 million that had gone unspent on workbooks she noted that this was a vast difference from the year before. This had been moved in house and should have been cheaper as opposed to more expensive

Ms N Gina (ANC) expressed concern over the pace that assessments were taking and which schools were being targeted. She asked for more information on challenges and targets. She also asked about the teachers guide and who it was addressing with regards to discipline. Addressing the Integrated Quality Management System (IQMS) she asked about challenges that were there, the scores that had been attained from teachers and whether there were any changes with the tools being used

Ms Mushwana raised the issue of the Teenage Pregnancy Report and queried whether there was a need to question it. She stated that if the Kha Ri Gude mass literacy campaign had only reached a quarter of its intended people, it could not be considered that great an achievement. She asked where the people were who did not fall into this quarter

Mr Van der Westhuizen queried the tests for literacy and how useful they would be since previously they were done annually and it had been suggested that next year it would take place in the beginning of the year. He also asked for clarity over the workbook tender. In terms of no fees schools he asked if a study had been carried out to find out if this status had influenced parental involvement in the schools

Ms A Mashishi (ANC) asked if the tools being used were effective particularly those targeted at building humanity and accountability in schools

Mr Soobrayan explained that in terms of Grade R and before Grade R he informed the Committee that this fell within the area of the Department of Social Development. The tests had been postponed due to lost time in learning and teaching. He stated that learners would be given their Grade assessment of the year that they were previously in not the year they were currently in. He stressed that the tests could not be administered at the expected time because of the lost learning time; they would be administered in February. He noted the problems around asking a Grade Four learner Grade Three questions and how this would impact statistics and numbers. The Department was aware of the issues and had weighed up its options. Workbooks were currently cheaper per unit in house; the larger amount was due to greater coverage. The workbooks were also being created with intellectual property to ensure that costs could be cut in future with regards to ownership. He explained that it was not that the Department had not found a supplier but rather they had not found an adequate supplier. He highlighted that the tender had not been cancelled but simply that it had not been awarded and that this was an acceptable means of dealing with the situation. Addressing the teacher guide and discipline, he noted challenges particularly with regards to corporeal punishment. There was a need to identify flashpoints and for provinces to implement policies such as age grade norms. 

He informed the Committee that appraisal for teacher performance and appraisal for salary increase had been separated, this was done to ensure accountability for performance. In terms of the teenage pregnancy report he suggested that there was a view on behalf of the public that the Child Support Grant was encouraging young women to have children. This had been investigated and found to be untrue; in fact research had suggested a decline in teenage pregnancy regardless of this South Africa’s rate of teenage pregnancy was considered to be quite high. He stressed that girls that stayed longer in training and education had less chance of falling prematurely pregnant.

He explained that there was a time where Quintile One learners were benefiting differently across provinces; this was due to the fact that different provinces had a varied number of poor learners. He suggested that research had shown that the quintal system was largely successful and that the report of this was available. He stressed again that community involvement was critical and that it was centrally important to tell the school that the money, the computers and the infrastructure were items that belonged to the community. Should something happen to them then they would have to be replaced or repaired from the community budget

Mr Mahlobo addressed the monitoring tool with regards to Adult Learning Centres. In terms of norms and standards for funding adult learning centres, it was suggested that the policy be suspended due to the changing landscape. He explained that each province was meant to use the capacity of its District Officials to support the norms; it was found that most provinces could not satisfy that most Adult Learning Centres had the capacity. The norms have been postponed for implementation in 2011. The tool has indicated this

Ms Ntestsa Molalekoa, Acting Chief Financial Officer, Department of Basic Education, corrected the amounts for the allocation of funding. She noted that the total allocation for the current financial year was R 750 million.

Mr Dikobo reiterated his stakeholder issue. He stated that teachers, learners, parents and departments had been committed to certain things.

Ms Kloppers-Lourens expressed confusion with regards to teenage pregnancy and the numbers applying for grants. She stated that the study initially carried out was a literature study and not an empirical study. She asked for comments on this. In terms of nutrition she asked if the Department had plans of extending the programme to weekends and holidays

Mr Mokwane asked why the Department could not act resolutely in terms of employment function and capacity of the Adult Learning Centres. He suggested this issue could have repaired sooner.

Mr Van der Westhuizen highlighted that some of the Colleges had been running at a loss, 16 out of 32. He asked what was going to be done in order to improve this situation. He also asked why connectivity had only been rolled out in eight of the nine provinces. He was disturbed by the enrolment drop of 6% in a single year for secondary schools. He asked for comments on the Service Delivery Plan as outlined in the Annual Report noting that in some instances targets were described as ‘still to be determined’.

Mr Soobrayan noted that his comments on pregnancy and access to child grants were taken from two reports and that it was acceptable to draw on these and utilise them in a literature review. He argued that those two sources answered the question that they asked although the outcome would be monitored. He noted that the literature review did not offer qualitative information. He agreed that it was important to extend the school nutrition programme to weekends and holidays. He noted that there were issues with school governing bodies abusing there powers. This was often due to weak District Governing Bodies, they were monitoring the matter and in cases where the District was considered unreliable the Department had been involving themselves directly. He agreed with the issues in the Service Delivery Improvement Plan and that perhaps some goals were quite ambitious but these had been adjusted within the plans for the Department. Addressing the drop in secondary school involvement he stated that there were a range of reasons influencing this and explained that it was an area of great concern. He informed the Committee that the figure needed to be contextualised, throughout the world countries experienced a drop in this stage.

Mr Mahlobo spoke to conditions of service for Adult Education & Training practitioners. He noted that there was an engagement between the Department, the Human Resources Council and Labour. There had not been any movement since then; close to more than 90% of practitioners in the sector were also teachers in schools. He explained that the delay was caused by the fact that the function was raised during the split, at this time there had to be dedicated focus on the FET colleges. He noted that this had almost been completed and that during the next financial year they would be focusing on practitioners and educators in the AET sector. He stressed this would not just be focused on academics but a wide range of vocational and skills programmes. In terms of this conditions of service would have to be understood in the context of a completely new and evolving sector. In addressing the 16 Colleges operating in deficit, he explained that these were identified through the monitoring function; they would now need to identify the reasons. In some instances this would be due to poor financial management in others it was due to the inability to understand the new funding framework. The third issue was that at some point the two funding frameworks meet they often met unequally.  He suggested an error had been made in terms of researching whether the FET Colleges had the capacity to carry out the employer function in the first place. In the greater majority of the Colleges the view was that when they were given the function they were not ready for it and this affected their approach to it. He explained that in order for Colleges to offer programmes they would need to be accredited by the Sector Education and Training Authority (SETA). The funding for infrastructure lay with the province and the College and the Department provided support. He stated that the with regards to transformation processes put in place, if they were not understood they could not be implemented this was particularly true for change management purposes. One of the projects being implemented in 2010/11 would be looking at how the Department could support Colleges to partner with the SETAs effectively.

Prof Metcalfe welcomed the focus on FET, Colleges and management issues. She noted that the issues raised had been raised at an FET summit meeting. She explained that the FET Summit steering Committee had made its recommendations to the Minister. These recommendations covered a number of areas. In terms of this change management was considered critical. She informed the Committee that Task Team Five was out in the Provinces working with the FET Colleges. The work of the Steering Committee was to assist in the planning of the College. She noted this was not in the Strategic Plan and was a set of issues that was identified by the new administration and external donors were funding the cost for it.

Briefing by the Auditor-General of South Africa on overview of Provincial Education spending
Ms Meisie Nkau, Office of the Auditor General, briefed the Committee on the audit outcome on the Provincial and National Departments of Education, conclusions on audit of pre-determined objectives, overview on education sector auditing, and highlights on the performance (financial and non-financial) of the entities related to the Department of Education.

Ms Nkau explained that of the nine provinces, certain provinces reports had remained unchanged. As an example the Eastern Cape was highlighted suggesting that it had simply received a negative opinion year on year showing no progression. She stressed that departments should strive for a clean audit report and a clean audit outcome. A clean opinion did not necessarily mean a clean outcome. A clean outcome suggested no other issues or matters whilst a clean opinion suggested that there were still other issues. Only the National Department of Education received a clean audit outcome and opinion. There were no clean audit reports in any of the nine provinces. Gauteng, KwaZulu-Natal and the Eastern Cape received unqualified reports with other matters noted in the report. All of the remaining provincial departments had received qualified audit opinions ranging from qualified audit reports to a disclaimer and an adverse report. She noted that the overall performance of the provincial education departments in terms of internal controls remained to be unsatisfactory. Six of nine provinces received a disclaimer or a qualified audit opinion. Of real concern was the fact that the number of provinces, which had received a disclaimer, had increased from one to three on 2009/10. The suggested root causes of these negative audit outcomes lay in internal control deficiencies identified in three fundamental areas of internal control namely leadership, financial and performance management and governance.

In terms of leadership, she explained that where Departments had received either a disclaimer or a qualified audit opinion, the leadership of the department had either failed to exercise adequate oversight responsibility over compliance with laws and regulations, had not provided an environment conducive to good accountability and service delivery, or did not address control weaknesses identified in the prior years by external audit over the achievement of complete and accurate financial and performance reporting. She explained that root causes were focused on leadership because a good leader should be able to identify previous years' findings. This had not happened

In terms of financial and performance management the overriding factor was a lack of documental trail to support transactions included in financial statements. The lack of supporting documentation meant that the occurrence, validity and completeness of transactions included in financial statements could not be verified. In those departments that received disclaimers in particular there had been a lack of internal controls over record keeping and management. In such an environment, fraud and public abuse of resources could have been easily perpetuated, resulting in irregular, unauthorised, fruitless and wasteful expenditure and other forms of non-compliance with laws and regulations.

In terms of governance, in all provincial departments a number of investigations took place during the year under review that related to fraud and other forms of non-compliance to the laws and regulations. The underlying cause in most cases was either a lack of effective internal audit functions or fraud prevention plans not being implemented or monitored. She stressed that it was important to address these issues.

She expressed sadness at the fact that three of nine provinces had regressed in terms of audit opinion. She touched on areas of unauthorised expenditure per province explaining that this was considered to be over spending of the vote or the main division of the vote. Provinces with unauthorised expenditure included Gauteng, KZN, Limpopo, Eastern Cape, Mpumalanga and the Northern Cape. She informed the Committee that the Auditor General (AG) was in the process of creating a consolidated report of all the departments in the country. In terms of irregular expenditure the Eastern Cape was the highest, she stressed that this appeared in all provinces and it should not be tolerated in any of the provinces. In terms of fruitless and wasteful expenditure every province apart from the Northern Cape appeared, she explained that these would be explained more clearly in the report.

She explained that of the six entities that received qualified audit opinion 60% were qualified on capital assets in 2008/9 this figure was 100%. In 209/10 33% was due to current assets and in 2008/9 40%. The proportion of audits that received either a qualification or disclaimer per qualification area had decreased when compared to 2008/9. However, the situation remained largely unchanged when the fact that the number of qualified audits had increased in 2009/10 was taken into account. She noted that departments that had received a disclaimer of opinion it mean that a number of components in the financial statements could not be qualified and these should be considered a large are of concern. Provinces that had not provided appropriate documentation included the Eastern Cape, Limpopo and the North West. She explained the categories of qualified and unqualified with other matters as those that had received significant findings in the audit report. These were KwaZulu-Natal, the Northern Cape and Mpumalanga. She explained that those that had no significant matters raised implied those that had, had clean audit outcomes in this case Gauteng and the Western Cape.

In concluding she stated that a review of the bases for audit opinions had revealed a number of internal deficiencies. These areas of concern were within the root causes and similar to those of financial opinion raised with the department. With regards to leadership the accounting officer had not exercised oversight responsibility over performance, reporting and compliance with laws and regulations, especially with regards to quarterly reporting. Also actions were not taken by management to address risks pertaining to the achievement of complete and accurate performance reporting. In terms of performance management and reporting, reported information on predetermined objectives were not reviewed by management to ensure accuracy and completeness prior to submission for audit. She noted that most of the findings that formed the basis of qualified or disclaimers of audit opinion related to non-compliance with laws and regulations and reliability of reported information on predetermined objectives. She stressed that overall there had been a general decline in the quality of audit outcome for 2009/10 financial year compared to the year before. This was in line with the overall increase in internal control deficiencies in the fundamental areas of internal control relating to leadership, financial management and governance. 

She then addressed the sector report focusing on specific areas within the DBE. Areas focused on included HIV/Aids conditional grant to provinces, National School Nutrition Programme conditional grant to provinces, Dinaledi School Initiative, Learner Transport Scheme and Qualifications of Mathematics and Physical Science Teachers. She stressed that in the approach to the sector report it was believed that there needed to be a specific focus on improving education in schools, because it was significantly different from the principles applied at the higher education level. She stressed that this was the reason that the AG had taken specific areas from the DBE and focused on them. She explained that a sector report could only be successfully prepared and published if the same procedures were performed at all departments. After discussion with amongst other the National Treasury the five areas mentioned were decided on. She stated that they were busy focusing on these areas and three new areas had been added: Learner Teacher Support Material, Allocation of Funds and schools and Technical Secondary Schools Recapitalisation Grant.  The sector general report was still underway and would be reported on once it had been completed for 2009/10

She also highlighted entities related to the DBE that were not mentioned in the audit report although they did have outcomes for them, namely the Education Labour Relations Council (ELRC), Council for Quality Assurance in General and Further Education and Training (Umalusi) and South African Council of Educators (SACE). She noted that all three entities had received clear unqualified audit opinions. The SACE had other matter reported these were non-payment to the South African Revenue Service (SARS) of employees tax withheld for the periods October 2009-January 2010. Steps to remit payment of SARS had been initiated by management. She also noted that no system was in place for effective monitoring, evaluating and reporting on performance information. The reporting of target was not in line with the target and objectives set out in the annual strategic plan.  Certain performance targets could not be validated due to management not maintaining appropriate documentation to support its targets achieved. Quarterly reports did not result in documented corrective action; this would need to take place in order for the entity to achieve its objectives.

Discussion
The Chairperson informed the Committee that Treasury had been invited to the meeting but were not able to attend.  She noted that there was worry over the budget in the provinces and fruitless expenditure. These issues suggested that the Department was in no way in a sound financial state. She noted that the National Department had received a clean audit but that the provinces were highly problematic. She stressed that the Eastern Cape in particular calls for concern and she noted the need for a mechanism in order to deal with the issues.

Mr Ndokomo stated that he was uncomfortable with the definition for unauthorised expenditure. He suggested this meant expenditure did not follow the correct pattern not that it was an overspend. He questioned how a province could appear under irregular expenditure and fruitless and wasteful and then could still receive a clean audit

Mr Van der Westhuizen suggested there was an interesting link made between quality of audit findings and the quality of leadership in Departments. He asked if the bar had been raised in terms of standards or had Departments regressed. He also asked if the AG gave support to Departments in need.

Ms Gina asked for clarity on fruitless and irregular expenditure. In terms of the transport scheme she asked if the report was speaking to all the provinces, even though some did not have a transport scheme. She also asked about the lack of qualified educators particularly in terms of the Dinaledi School Project.

Ms Mushwana asked for clarity on unqualified reports at national levels. She asked if the statement that ‘Basic education with primarily focus on schools’ was a promise and what it meant. In terms of maths and sciences shortages she suggested that they needed clearer information on where educators were and whether they could be transferred.

Mr Makhubele asked to what extent the department’s compiling these financial statements were actually able to do so. He also asked if departments were not reporting against their strategy plans what they were reporting on

Mr James asked who was responsible for following up on the consequences of the AG’s recommendation.

Ms W Nelson (ANC) asked what has changed in provinces that have improved. She also asked what was identified as the bulk problem in fruitless and wasteful expenditure

The Chairperson asked about the money actually transferred to provinces, and showed particular interest in infrastructure money and whether this was always spent on infrastructure and development

Ms Nkau explained that according to the Public Finance management Act (PFMA) unauthorised expenditure was considered to be over spending on a vote. Internal approval processes not being followed by an entity are considered to be non-compliance. She explained that a clean audit was considered to be a clean opinion.  She noted that an opinion had a clean audit opinion but other issues were considered not to be a clean audit outcome. A clean opinion was an unqualified opinion, which did not necessarily imply that there were no other matters.

In terms of the quality of the leadership she explained that the department audits in terms of international audit standards, which does mean the bar is lifted annually. She noted that they did focus on specific internal controls in order to address the root causes rather than the symptoms. The root cause allowed the department to address processes in order to look at future issues; this tact required a focus on leadership.

In terms of support she noted that the AG gave recommendations to management, identifying root causes and providing practical recommendations to rectify the issue, She noted that in order to maintain their ability to audit they could not be furthered involved with the entity. The AG had committed to interact with the Portfolio Committees and the Management. They also provide the option of quarterly reviews in order to establish if interventions were working. She stressed the need to maintain their independence. She stated that with regards to funding there were conditions attached to when and where the Department could transfer donor grants, she suggested that the National Department had complied with this. She offered her availability to talk about the Money Bills Amendment Procedure and Related Matters Act 2009 (Act No. 9 of 2009) at some later suitable date.

Addressing irregular expenditure she explained that the PMFA requires every entity to detail out what irregular expenditure they have been related to. Departments were required to explain their irregular expenditure she offered to make this available to the Committee.

Returning to the sector focus area she explained that they were zooming into specific areas, these were considered critical areas for the department. She indicated that the report was still in progress and show would be happy to come and talk to the findings once it had been completed.

Highlighting the Departments that had not reported on what was in their strategic plan she suggested that this was because departments had not gone back to their plan and aligned their activities accordingly. When it was time for them to report they simply stated what they believe they had done without considering what they said they would do. She suggested this was largely due to lack of monitoring and evaluations.

In terms of who was responsible for following up on action planes, she noted that their interaction with the Directors-General was to ensure that they achieved the desired outcomes financial or otherwise. She explained that they had developed a Key Control Documents for the leadership of departments guiding them in the controls that were necessary for optimal functioning at every level. In terms of Provinces that had regressed she stated that leadership was definitely a problem. Addressing Limpopo and the North West she highlighted there was a disclaimer of an opinion; this meant the lack of appropriate supporting documentation. She believed that this situation was always due to lack of leadership, documents were usually available when there was financial management and leadership specifically within the finance unit. She suggested that details about fruitless expenditure could be obtained from the Annual Report. She requested time to verify how far the infrastructural report was before speaking to it.

The Chairperson expressed anxiety about the state of finances in the province and the state of education for South African children, and suggested that there was a need for a meeting between themselves, the departments and National Treasury. There was a definite need for a mechanism of accountability.

The meeting was adjourned.

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