Fourth Quarter Expenditure Report: briefing by the Department of Basic Education

Standing Committee on Appropriations

15 August 2011
Chairperson: Mr E Sogoni (ANC)
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Meeting Summary

The Department of Basic Education was called by the Standing Committee on Appropriations to explain the high levels of under spending in the department. Senior officials from the Department attended the meeting, but the Director-General was not present, as he had to host a delegation from the United Nations Educational, Scientific and Cultural Organisation. The Director-General’s absence caused some consternation amongst the Committee as many MPs were displeased that he was not there.

The Acting Chief Financial Officer made a presentation to the Committee and provided reasons for under spending. The figures showed that expenditure, as a percentage of the final appropriation across all programmes was 89.4%. The highest percentage of spending achieved was 99.9% on social responsibility and the lowest, 54.7% was spent on Curriculum Policy, Support and Monitoring.

Expenditure as a percentage of the final appropriation was 94.5% on compensation of employees, 100% on examiners and moderators, 100% on transfers to public entities, 99.6% on conditional grants, 53.2% on earmarked funds, 97.9% on departmental operations, 82.2% on projects and 91.5% on other transfers.


The Department explained the under-spending by categorising it according to the different programmes. Under programme 1: Administration, the under-expenditure was due to vacant positions and savings on the transfer of payments to UNESCO as a result of the favourable exchange rate.  Under spending in programme 2: Curriculum Policy, Support and Monitoring was due to withholding of funds in respect of the Technical Secondary School Recapitalisation conditional grant to Eastern Cape, Limpopo and Mpumalanga

. Under spending was also as a result of savings incurred on the Workbooks project. An in-house service was utilised for the development, layout and design of the workbooks. A saving of an estimated R400 million were realised excluding commitments for the printing and delivery of Book 2.

The Committee was dissatisfied with the presentation. Members argued that the presentation was sketchy and needed greater details. They were also unsatisfied with some of the reasons provided and were concerned the budget was not properly researched and this illustrated bad planning on the part of the Department. Other maters raised pertained to unfilled posts, the technical secondary school grant and the capacity of the Department to develop books for more grades.




 

Meeting report

Opening Remarks by the Chairperson
The Chairperson welcomed the representatives from the Department of Basic Education. He further noted that the Director General was unable to attend the meeting as he was hosting a delegation from the United Nations Educational, Scientific and Cultural Organisation (UNESCO).

The Chairperson expressed concern that the Department had not appointed a permanent Chief Financial Officer (CFO). Consequently, he advised the Department to address this and other Human Resources issues. According to the Public Service Act an “acting” position could not be held for more than six months.

The Chairperson further noted that the Department was invited to meet with the Committee because of under-expenditure, which was more than 10%. The committee was concerned that the Department of Basic Education (DBE) was under-spending in important areas such as curriculum monitoring and support, workbooks and infrastructure. He reiterated that education is a priority area of the government and that limited resources must be utilised effectively and efficiently.

Presentation by the Department of Basic Education (DBE)

Ms Ntetsa Mofalekoa, Acting Chief Financial Officer, Department of Basic Education, walked the Committee through the figures, which showed that expenditure, as a percentage of the final appropriation across all programmes was 89.4%. The highest percentage of spending achieved was 99.9% on social responsibility and the lowest, 54.7% was spent on Curriculum Policy, Support and Monitoring.

Expenditure as a percentage of the final appropriation was 94.5% on compensation of employees, 100% on examiners and moderators, 100% on transfers to public entities, 99.6% on conditional grants, 53.2% on earmarked funds, 97.9% on departmental operations, 82.2% on projects and 91.5% on other transfers.

She explained the under-spending by categorising it according to the different programmes. Under programme 1: Administration, the under-expenditure was due to vacant positions and savings on the transfer of payments to UNESCO as a result of the favourable exchange rate.  Under spending in programme 2: Curriculum Policy, Support and Monitoring was due to withholding of funds in respect of the Technical Secondary School Recapitalisation conditional grant to Eastern Cape, Limpopo and Mpumalanga. Under spending was also as a result of savings incurred on the Workbooks project. An in-house service was utilised for the development, layout and design of the workbooks. A saving of an estimated R400 million were realised excluding commitments for the printing and delivery of Book 2.

Under spending in programme 3: Teachers and Education Human Resource Development and Management was due to the nascent stage of the National Education and Development Unit. There was also under spending on the compensation of employees on the Integrated Quality Management System project. Under spending on programme 4: Planning, Quality Assessment and Monitoring and Evaluation was due to the rescheduling of the Annual National Assessment due to the strike. The tests were planned for November 2010 but they could only take place in February 2011. Under spending in respect of the Education Management Information System project was due to the late invoicing as well as incomplete service delivery by the service provider regarding certain projects.

Discussion

Ms L Yengeni (ANC) was displeased that the DG did not attend the meeting. She added that communication between the Committee and DBE should be timeous to avoid conflicts in the schedule, and reiterated that it was very important that the DG attend future meetings.

Mr Anton Schoeman, Acting Deputy Director General: Administration noted this and said he would pass on the message to the DG.

Mr W James (DA Member of Portfolio Committee on Basic Education) asked if the workbooks had not properly been costed and as a result there was a surplus in the budget.

Mr Schoeman responded that the budget was based on market related research, which priced content development, printing and distribution at R42 per book. The DBE developed the content in house and went out on a tender for the printing and distribution, which cost R9 per book. In the new year the workbook will go up to grade 9 and the estimates would be better. He added that the DBE now owned the copyright, which brought down the cost.

Mr G Snell (ANC) queried if the Department had the in house capacity to develop books for more grades.

Mr Schoeman replied that the DBE did have the capacity and that it would advertise a three-year tender for printing and distribution.

Ms Mofalekoa added that the variance in the budget was for workbook 2. It was a huge task to print and deliver 23 million books to 19 000 primary schools, the DBE had estimated that this task would be completed by February, but the timeframe and tender were extended to June, and currently payment for the printing and distribution of workbook 2 is being wrapped up.

Mr J Gelderblom (ANC) sought greater clarity on monitoring and evaluation.

Ms Mofalekoa explained that currently there were several monitoring and evaluation structures within the DBE. The idea was to create one centralised monitoring and evaluation unit, this unit would make sure that grants were used properly.

Ms N Mkhulusi (ANC) asked about the technical secondary school grant, she queried how much was withheld from each province and what measures were taken to assist the provinces to avoid a similar situation from occurring in the future. She also asked why the nutrition programme appeared under both the conditional grants and the earmarked funds.

Ms Mofalekoa replied that she did not have the figures at hand, however, in total R15.5 million was with held. She added that the new monitoring and evaluation unit would play a critical role in supporting provinces to use the grants effectively. She explained that the school nutrition programme that was listed under the earmarked fund was administered by the DBE and was for training including financial training relating to the execution of the programme. The conditional grant was transferred directly to and was administered by the province.

Mr M Swart (DA) asked why there was under spending on projects. He also made the general observation that under spending on earmarked funds was very disappointing. He asked for clarity on the line item “claims against the state”.

Ms Mofalekoa explained that ‘claims against the state’ pertained to situations where staff hired cars to execute their duties and were involved in car accidents.

Dr P Rabie (DA) stated that the reasons provided for in the presentation for under spending on earmarked funds, was unacceptable. He followed up by asking what proactive steps would be taken to stop under spending.

Ms G Nomalungelo (ANC Member of Portfolio Committee on Basic Education) asked what projects were incomplete and noted that there were problems with service providers.

Ms Mofalekoa responded that the DOE had several small projects, which included maintenance of IT systems and ICT projects. She added that the deviation in the budget was due to late billing by SITA (South African State Information Technology Agency). She also added that the implementation of the annual national assessment, which was delayed to February 2011 caused the under spending.

Mr Schoeman added that the DBE hosted monthly meeting with SITA to address issues including late invoicing.

Mr Sogoni asked if programme 3, Teachers and Education Resources Development and Management was still continuing and who was manning the programme. He referred to a previous report that showed that staff had resigned from the programme due to grievances. He asked what the staff vacancy rate was for the programme and recalled that the President said in the State of the Nation that all funded posts had to be filled.

Mr Schoeman replied that the unit was set up under the former Minister. Since 2009 all 5 posts in the unit had been filled and there had been no resignations. He also mentioned that Prof. John Volmink, was the current CEO of the unit.

Mr James posed a follow up question and asked if he was still on the board of JUTA, as that would constitute a conflict of interest.

Mr Schoeman replied that he understood that Prof Volmink had resigned but he would confirm this.

Mr Songoni asked about unfilled posts and under spending, he said that it was vitally important that all positions including lower level positions needs to be filled. He reiterated that a permanent CFO needed to be appointed and that the three DDG posts that were vacant must be filled as a matter of urgency.

Mr Schoeman replied that the organisational structure was finally approved on 24 June 2011. It took over a year to approve because it took some tome to set up the oversight unit to assist provinces.  He went on to explain that this was the second structure and was altered from the first.

Mr Snell asked what power the DBE had to influence provinces and what happened when provinces failed to implement national policies.

Ms Mofalekoa replied that funds were withheld if provinces did not comply. She explained that money was transferred quarterly and that if provinces failed to explain under spending or over spending the DBE could withhold money for 30 days and would need approval from National Treasury to delay transfers for more than 30 days.

Ms Yengeni stated that the use of the internal facilities in preparing the workbook seemed to have been an after thought. She asked if the new budget would be better researched and prepared, and queried if there was a problem with planning at the DBE.

Mr Sogoni made some concluding remarks.  He said that the Members were unhappy with the budget, and would like it to be more accurate in the future. He added that with the recent global recession, resources were limited and that the budget must be as accurate as possible. He also intended to review documents on National Education Evaluation and Development Unit (NEEDU). He also mentioned that he was generally unhappy with the responses provided by the DBE. He reinforced the importance of monitoring and evaluation, and the importance of the DG attending these meetings.

The meeting was adjourned.

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