Council for Higher Education & Quality Council for Trades and Occupations on their Annual Reports for 2012/13

Higher Education, Science and Innovation

10 October 2013
Chairperson: Adv I Malale (ANC)
Share this page:

Meeting Summary

The Quality Council for Trades and Occupations (QCTO) and the Council for Higher Education (CHE) briefed the Committee on their 2012/13 annual reports.

The QCTO’s presentation focused on human resource matters, governance, and their core operations. Some of the QCTO’s challenges included insufficient office space, lack of funding, being fully reliant on the Department of Higher Education’s (DHET’s) policies, the majority of their staff were completely new, and stakeholders were unaware of the QCTO’s role. A statement of financial performance showed that the organisation had a net surplus of R5.3 million. The entity received an unqualified audit opinion from the Auditor-General of South Africa (AGSA) with findings regarding the achievement of planned targets, adjustments to the annual performance information, adjustments to the annual financial statements, irregular expenditure, and the lack of accrual accounting systems.

Members were concerned about the number of financial policies that the QCTO had, why they had not filled their vacancies, whether targeting 60 qualifications had been too ambitious, and what the entity was doing to raise stakeholder awareness and secure funding partners.

The Council for Higher Education (CHE) briefed the Committee on its Annual Report. The presentation focused on the entity’s functions, and also gave an overview of its race, gender and vacancy profile. The Annual Report showed that 46% of the CHE’s budget was spent on employee costs, 17% was spent on consultants, 6% was spent on travel expenses, and 4% on IT expenses. CHE assured the Committee that they had sufficient funds to continue as a going concern, and that the reason they spent 79% of their allocated budget was because of vacancies that existed during the year, and the change in focus of the entity’s quality assurance function. The CHE received an unqualified audit opinion with a matter of emphasis for restating prior year balances. Most audit findings were addressed by 31 July 2013.

The Committee wanted to know whether the CHE made use of consultants because it was cheaper than hiring staff, whether the Minister had approved the recruitment and retention strategy for staff, how the underperformance of staff members was dealt with, and whether three-year degrees were going to be extended to four years.
 

Meeting report

Opening Statement
The Chair drew the Committee’s attention to the fact that there was not a quorum and that the matters at hand would be thoroughly deliberated on, on Wednesday 16 October, after which the Committee would compile a report with recommendations in order to carry out its oversight function.

Briefing by Quality Council for Trades and Occupations (QCTO)
Prof Peliwe Lolwana, chairperson of the QCTO, Ms Joyce Mashabela, Chief Executive Officer, and Ms Ndhivu Madilonga, Chief Financial Officer presented.

The QCTO was responsible for designing, developing, establishing, maintaining and quality assuring occupational standards and qualifications within the National Qualifications Framework (NQF).

As the QCTO had many partners, there was a need for standardisation, which had been achieved.

The Skills Development Act provided for the establishment of the QCTO, which had become operational in April 2010, with a permanent CEO appointed in April 2012. The management committee, which reports to the CEO and the qualifications, assessment and accreditation and audit and risk committees were all fully operational.

Standardised processes had been communicated to partners and the provider accreditation system was in place.

The QCTO received an unqualified audit opinion with findings.

In programme 1 (administration), the QCTO had met all compliance due dates, developed financial policy and drafted supply chain management (SCM), human resource management (HRM) and Information and Communication Technology (ICT) plans, independently of the Department of Higher Education and Training (DHET).

In programme 2 (qualifications management), the target for developing policy and completing guidelines for implementing it had been exceeded. The target number of applications in development and historically registered qualification to be managed had been exceeded. But, in this programme, the following targets had not been met: only one out of 60 qualifications had been recommended to the South African Qualifications Authority (SAQA); a verification and certification system had not been developed; and only 336 learners (out of a target of 20 000) had been assessed in Foundational Learning Competency.

Overall, challenges included insufficient office space, reliance on DHET policies, novice staff, lack of stakeholder awareness and concerns about funding; there were no standard operating policies because of capacity constraints and there was no accrual accounting system as a result of capacity constraints. All were being or had been addressed.

The QCTO had under spent on their budget by R12m and received an unqualified audit opinion with findings: 53% of its targets were not achieved because of capacity constraints; material adjustments had to be made to the annual performance report because of inadequate quality assurance processes; material adjustments had to be made to the annual financial statements because of reliance on the DHET’s systems; and there had been irregular expenditure as a result of using the DHET’s contract.

Regarding the targets and functions not achieved, a new organisation had to rethink assumptions. Developing the right skills to grow the economy was not merely a matter of developing qualifications.

Discussion
The Chairperson thought that having 12 financial policies was excessive number and wanted more clarity on them.

Mr C Moni (ANC) noted the underachievement in developing qualifications and assessing learners. He wanted to know why vacancies had not been filled when there was a budget to fill them.

The Chairperson added that the target of 60 qualifications might have been ambitious and asked for clarity as skills were not all advanced in a formally structured manner.

Ms D Chili (ANC) noted that the Annual Report said that a second qualification was to be taled to Council in May 2013. What had come of it, what was being done to raise stakeholder awareness and were there any funding partners? On page 9 of the presentation, under ‘revenue’ what did ‘compensation mean – who was being compensated for what?

Ms N Gina (ANC) agreed that recommending only one qualification out of 60 to SAQA created a bad impression. Regarding inadequate office space, when was the QCTO moving? The presenter had said that using a service provider who was under contract to the DHET had led to a finding of irregular expenditure – why had the Auditor-General then said that the spending was irregular?

The Chairperson interjected to explain that the CFO had said that treasury regulations allowed this but the Auditor-General was still obliged to make this finding.

Mr S Makhubele (ANC) asked whether all vacancies in the Council structure had been filled, how extreme was reliance on the DHET with regard to policy development, and did the QCTO have research capacity. He also noted that on pp 26-47 of the Annual Report, there were no targets and that the Auditor-General said that no steps to prevent irregular expenditure had been taken and that systems for credible financial reporting were not in place.

Ms Mashabela answered that the QCTO, as a new organisation, had inherited a system with 60 qualifications as targets. Both delivers of the qualifications and assessors had to understand the system before qualifications could be recognised. She drew the Committee’s attention to the status report on QCTO qualifications registered on nearing registration: many qualifications were in process at SAQA and some had been approved by the Qualifications Committee and had to be distributed for public comment. She was confident that the target would be met in the next year. The answer to Ms Chili’s question on the tabling of the second qualification was in this status report too.

She said that twelve vacancies were about to be filled. Office space had been an issue but the QCTO was moving in December or January. The Director of Finance started in August and the Director of ICT in June. Of the 2200 ‘legacy qualifications’, only 747 were active, a situation which had been inherited. The database of these qualifications had had to be cleaned and verified and the active qualifications piloted in the public domain. The last 12 months had shown that the QCTO ‘couldn’t simply deliver qualifications’.

Regarding raising stakeholder awareness, the QCTO had been on road shows with three other stakeholders and were about to embark on one on their own. External funding might emanate from a SETA grant as the budget allocation had grown. Regarding the targets that might have been ambitious and had not been met, Ms Mashabela said that they had been ‘inherited’ and were being processed ‘in a vacuum’.

She was not sure she understood the question on ‘council structures’ but all committees were running. HRM policies were in draft.

Ms Madilonga said that there were indeed 12 financial policies although the most commonly known and used ones related to SCM. The less commonly known ones related to bank charges, investments etc and were short but regulatory. Before the SCM policies could be implemented, Pastel software had to be loaded.

Ms Lolwana added that a highly skilled and developed country such as Germany had only 143 occupational qualifications, while South Africa ‘was sitting on’ thousands.

Ms Madilonga said that vacancies had not all been filled although there was a budget to do so, because they had taken a decision to cascade downwards: first the CEO’s position had been filled, then chief directors, then directors, after which a lower tier of vacancies would be filled.

Regarding the finding of irregular expenditure, the QCTO had to produce financial statements for 2011/12 but did not have a CFO. Treasury regulations allowed ‘piggybacking’ on the DHET but the bidding process managed by the DHET was not competitive. Ms Mashabela had asked the Auditor-General to be less harsh but he was obliged to use standard wording.

Mr Moni said that it was not correct that one could only hire accountants and bookkeepers when one had a CFO.

Ms Mashabela answered that that was why the QCTO had a memorandum of understanding with the DHET and had seconded some staff from it.

The Chairperson said that the Committee recommended that the QCTO comply with Auditor-General recommendations and populate its organogram in order to be fully operational. Conceptualisation and development of qualifications should be undertaken according to international best practice.

The meeting broke for tea, after which members of the Council for Higher Education briefed the Committee.

Briefing by Council for Higher Education
Dr Bandile Masuku, Exco member and Mr Ahmed Essop, Chief Executive Officer of the Council for Higher Education (CHE) presented.

The CHE’s functions were to advise the Minister; conduct quality assurance audits of higher education institutions (HEIs); accredit programmes; promote quality assurance; develop and manage the higher education qualifications framework; set standards; maintain a learner database; publish information on the changing state of higher education; and monitor higher education.

The CHE proactively advised the Minister regarding the status and location of agricultural and other public colleges. This was prompted after the re-accreditation of programmes offered by agricultural colleges, an outcome of which was a finding that indicated that the quality of provision is negatively affected by the lack of clarity on their status and location.

The institution published information and convened conferences, workshops and seminars on the undergraduate degree/diploma structure; and governance challenges in education. A 20-year review of higher education was planned. The report of the task team to investigate the desirability of extending three-year degrees to four had been finalised.

Background research for a project focusing on student unrest and the role of student political organisations in Student Representative Councils (SRCs) was completed and empirical research was being undertaken.

In order to advise the Minister on governance challenges which have resulted in some HEIs being placed under administration, the CHE has initiated a research project to identify the underlying factors and to indicate interventions that may be required to stabilise such institutions.

The Higher Education Qualifications Sub-Framework (HEQSF) review was complete and alignment of some programmes (category A) was 40% finalised. A framework for the development of qualifications standards had been approved and criteria and format for the representation of a qualification standard were in development. The CHE continued to submit student enrolment and achievement data to the National Learner Records Database (NLRD).

Assessment and approval of HEI improvement plans and progress reports was in progress. Audits of the Vaal University of Technology and Oval International Computer Education had been closed. The draft quality enhancement framework for the next cycle had been approved by the Higher Education Quality Committee (HEQC) and Council.

Fewer (302) programmes had been accredited or re-accredited than in 2011/12 (466). The accreditation programme had been revised. National reviews of existing programmes in some qualifications in social work, law and physics were being undertaken.

In providing corporate services (administrative, financial, technical and professional), recruitment and retention were challenges.

Financial, administration and supply chain management policies were updated, internal control deficiencies were addressed and a CFO and other staff were appointed. Out of the staff complement of 4 233 were female and 12 out of 54 remained unfilled.

CHE has sufficient funds to continue as a growing concern. It spent 79% of its budget, mainly because of vacancies that existed and a change in the quality assurance function. There was no irregular expenditure. There was wasteful expenditure relating to a PAYE payment in 2007. It received an unqualified audit opinion with a matter of emphasis for stating prior year balance. (Revenue for accredited was incorrectly accounted for and policy was changed in April 2013 to correct this.) Most audit findings had been addressed by 31 July 2013.

Discussion
Ms Chili commented that women were usually outnumbered in similar circumstances, so the CHE should not complain and asked whether the disabled were accommodated.

Mr Moni asked whether the CHE made use of many consultants because it was cheaper than hiring staff.

Ms Gina noted that 10 staff members had resigned in the course of the year and asked whether the Minister had approved the recruitment and retention strategy. (He had.) How was underperformance of staff members dealt with? That some HEIs could not deliver improvement plans – ‘what picture is it giving us?’

Mr Makhubele asked whether all three-year degrees and diplomas were likely to be extended to four; what the ‘underlying thinking’ of institutions that disciplined students – academic performance? There should be a clear objective. On institutional improvement plans and collapsing institutions, if situations were monitored, it should be possible to activate a warning system and intervene. He considered 30% of objectives unmet too high. Noting that the Auditor-General had said there were no adequate oversight controls, what were the challenges?

Prof S Mayatula (ANC) asked what the main issue regarding agricultural colleges was. Did mergers cause the problems in HEIs?

Ms Chili noted that Further Education and Training (FET) colleges were back under higher education; why had they been removed?

The Chairperson thanked the presenters, noting that they had not raised any financial concerns.

Dr Masuku answered that it was hoped that the 20-year review of the state of higher education would provide insights into inherent weaknesses. The CHE could ask for improvement plans but did not have the authority to demand them. He suggested that political party campaigns at SRCs caused racial polarisation.

Mr Ahmed said that there were no disabled staff at the CHE but they remained committed to disabled policy. Consultants were employed as subject specialists to review academic programmes. It was not viable or sensible to employ all subject specialists on a permanent basis. Similarly, audits were conducted by panels of academics that were also not on the permanent payroll. Two or three staff members were seconded from HEIs. As the CHE was small, opportunities for advancement were limited and staff sometimes became bored with their jobs. At higher levels, CHE salaries were not competitive. A 20% extra non-pensionable allowance to address this had been requested from the Minister. Under performing staff was not the cause of the high staff turnover.

The recommendation for an extra year to complete degrees would apply to all degrees. The problem was not only caused by poor schooling as it affected all groups. If the proposal was accepted, it would have to be carefully implemented.

FET colleges’ placement was changeable because nurses, for instance, got trained on the job, so moving them would be a challenge. Agricultural colleges were currently under provincial administration. Moving them would entail movement of funding too. There had been such ‘political’ complications for years without resolution.

Pilot projects had been delayed not because of capacity constraints but because approval was delayed.

As with the QCTO, the Auditor-General’s language was a problem. For instance, the CHE ‘lacked ethical leadership’ because a particular post had not been filled, although the CHE had only about ten ‘housekeeping problems’.

Mr Ahmed did not believe that unbundling collapsing HEIs would help them as much as the problems were deeper than being merged. The CHE powers of sanction over HEIs and could de-accredit but not institutions.

The Chairperson invited a further round of questions.

Ms Gina asked when the review of some physics and law qualifications would be complete, and whether it would have a big impact.

Mr Makhubele proposed that organisations that dealt with disabilities be liased with. He wondered if extending three-year diplomas and degrees might result in no graduates in a particular year.

Dr Ahmed answered that 27% of graduates completed their degrees in three years or less. In terms of the report on physics and law degrees - it was complete and he would send a copy to the member concerned.

The Chairperson thanked the presenters and the meeting was adjourned.
 

Audio

No related

Present

  • We don't have attendance info for this committee meeting

Download as PDF

You can download this page as a PDF using your browser's print functionality. Click on the "Print" button below and select the "PDF" option under destinations/printers.

See detailed instructions for your browser here.

Share this page: