The Department of Basic Education (DBE) briefed the Standing Committee on its first quarter expenditure for 2014/15. Total expenditure for the 2014/15 first quarter was R6 billion. Most of the expenditure consisted of conditional grants, transfers to public entities, and other transfers. Actual expenditure per programme showed that the lowest spending was on support and monitoring (7.9%), while the highest spending was on teachers, education, human resource development and institutional development (80.4%). Cost containment measures were related to limitations regarding vehicle rentals, accommodation, travel, catering, telephones, and a reduction in outsourced services and consultation costs.
In discussion, the DBE was challenged for being invisible “on the ground,” especially when it came to the timely delivery of school books. A lack of school feeding schemes in rural areas was highlighted. There was concern about teachers who were also councillors and deputy mayors, which affected their performance as educators. The DBE was asked if it could break with its history of overspending and under-spending. It was asked how much was spent on actual education, and whether the DBE’s operations and projects addressed the core business of the Department. The non-payment of invoices within 30 days caused concern. There were a number of questions related to learner bursaries. The Department was asked about the status of Dinaledi schools and technical schools. It was taken to task for not adhering to the principles of a unitary state that could monitor the provinces. It was said that while communities were up in arms over educational matters, the DBE was hiding away. The Department was asked not to refer the Standing Committee to the provinces. The DBE was the centre and the centre had to hold. The Committee wanted to see money bear fruit. There were also questions about the quality of new schools.
The Committee was briefed on the Schools Infrastructure Backlogs Grant, also referred to as the Accelerated Schools Infrastructure Delivery Initiative (ASIDI). The purpose of the grant was for the eradication of schools with inappropriate structures -- such as mud and plankie schools -- and the provision of water, electricity and sanitation to schools. The DBE drove the initiative, and had established a Programme Support Unit (PSU) to support the programme manager. The DBE worked closely with provincial education departments, who in turn interacted with provincial Public Works departments as custodians. The DBE appointed Implementing Agents (IAs) to manage projects. Challenges centered on the limited authority of the PSU, who also had to work through DBE structures that were not aligned to service delivery. Expenditure remained undesirably low. The technical capacity of IAs was often inadequate. Contracts between the Department and the Implementing Agents were not firm enough to allow for rapid termination and replacement. The PSU could not take over and manage projects after termination.
In discussion, there was concern about the handover period for completed schools. It was asked if problem contractors had been identified. There was concern about prefabricated schools, which were old and in a state of disrepair. The inability to meet schools targets, and the performance of provincial departments of Public Works, were challenges. The delivery of schools had to be fast tracked. There were delays related to poor performance by contractors that caused cost escalations. Questions were raised about alternate construction methods. Security at schools received attention. There was interest in the provision of libraries, laboratories and sport facilities at schools. Capacity problems caused concern. The Committee expressed its commitment to follow up on whether money appropriated was resulting in service delivery. Education had to feed into the building of human capital. The DBE was urged in various ways to contribute towards a developmental state.
Election of Acting Chairperson
Ms Zandile Hulley, Committee Secretary, said that an acting Chairperson had to be elected. Mr N Gcwabaza (ANC), Committee Whip, was elected.
Department of Basic Education: briefing on first quarter expenditure for 2014/15
Ms Ntsetsa Mololekoa, Chief Financial Officer (CFO), stated that the total expenditure for the 2014/15 first quarter was R6 billion. The majority of the expenditure (R5.6 bn) consisted of transfer payments in the form of conditional grants; transfers to public entities, and other transfers. The remainder of the expenditure went chiefly to compensation of employees and the category of “specifically and exclusively appropriated.”
The Committee was taken through allocation against actual expenditure per programme for 2014/15. Lowest spending was on support and monitoring (7.9 %), and highest spending was on teachers, education, human resource development and institutional development (80.4%). Actual expenditure per economic classification showed the lowest spending was on goods and services (6.0%), and payment for capital assets (5.4%). Capital assets comprised the schools infrastructure backlog grant. Highest spending was on transfers and subsidies (39.5%). The Committee was taken through details of earmarked allocations/transfers.
Cost containment measures included limitations related to vehicle rent; accommodation; travel; catering; telephones, and the reduction of outsourced services and consultation costs.
Ms S Shope-Sithole remarked that the Department was a national department. Care had to be taken that strict telephone control measures did not impede communication with the provinces.
Mr Paddy Padayachee, DBE Director General, replied that telephones were regulated according to public service policy, but the Department enforced limits, without compromising service delivery. The limits were there so that people did not abuse the facility. The AG could audit abuse.
Ms Mololekoa added that the telephone account limit applied to personal calls.
Mr M Figg (DA) said that the limit for private calls had to be zero.
Ms Shope-Sithole referred to the printing of workbooks. The first half of the books should already have been at the schools, with the second half on the way. Timeliness of delivery was of utmost importance. While the Department was hiding, the Standing Committee (SC) was having to explain to parents why books were not at school.
The Chairperson added that more often than not, textbooks did not reach schools on time. Teachers were saying that they had to ask repeatedly. There had to be some computerised system to track where the books were.
Mr Padayachee replied that workbooks were delivered for 2014/15 before the schools opened. There were top up and mop up strategies. There was top up when extra children came in. There was investment in service production, and proof of delivery. Mopping up was done when textbooks delivered were not in the right language, or when school attendance dropped. The provinces could report, but the DBE managed the process. There was a bulk payment in December of R800 million, with the last 10 or 20 percent held back until delivery. Workbooks one and two were available for 2015. The delivery rate was 99%.
Mr Figg said that delivery notes could be used if there was no record of an invoice. In the old days, books lasted for ten years. The very fact that it was either 10 or 20 percent that was held back, pointed to a lack of policy. He was pleased to hear that books were delivered by December. The Committee would visit during the last week in December.
Ms Mololekoa replied that normally the delivery note was with the invoice. The DBE could pay only when the invoice account transaction happened.
The Chairperson remarked that some schools did not qualify for feeding schemes. The nutritional programme system was used to decide who qualified. Most learners in rural areas had to go hungry, as there was no nutritional programme for them.
Mr Padayachee replied that R5 billion had been voted for nutrition programmes. All quintile schools had feeding schemes. But the grant could feed only a certain number of children. There had been attempts to extend the feeding scheme to Saturdays, but it was difficult to add anything extra in the current fiscal climate. The challenge was to get funding and extend the programme. Funds had to be made available to schools and parents through cooperatives, rather than big companies.
The Chairperson referred to teachers’ salaries. Many teachers were councillors or deputy mayors, and could not do justice to teaching. The question was how to improve the quality of education. There were infrastructure challenges, especially in the Eastern Cape.
Mr Padayachee replied that the Department of Public Service and Administration (DPSA) had issued a regulation that such people had to resign from teaching posts.
Mr Figg asked where money was spent. The DBE had a history of overspending and under-spending. He asked if it could be relied upon that there would be adequate spending, without overspending.
Mr Figg said that study loans seemed to be paid by the DBE, but beneficiaries received the money only by the middle of the year, or later.
Mr M McLoughlin (DA) said the final appropriation for planning, information and assessment was R10 billion. He asked how much of that was spent on actual education. It seemed that the core business was not being addressed, with money going to peripheral entities like consultants. He asked if Departmental operations and projects addressed the core business.
Mr Padayachee replied that schools belonged to the provinces. The key focus was on the curriculum. The DBE worked with and through the provinces. The Department would look at activities that were not core business. African languages were being introduced in the schools. There was special needs funding in provincial budgets. Programme budgets had to be reprioritised. There was bulk spending for the National Student Financial Aid Scheme (NSFAS) and bursaries for student teachers (Funza Lushaka), approved by the accounting officer.
Mr McLoughlin asked if the DBE could adhere to the regulation of payment of invoices within 30 days.
Ms Mololekoa said that the DBE did pay within 30 days. Payment for infrastructure looked like underspending. Contractors were paid, but there were delays in receiving invoices. The DBE gave advances to pay contractors.
Mr McLoughlin noted that the actual expenditure on goods and services was only six percent. This was ongoing throughout the year.
Ms M Manana (ANC) sought clarity on the 80% figure cited under expenditure in the Teachers, Education, Human Resources Development and Institutional Development Programme. In addition, she asked about projections for accruals.
The Chairperson asked how much had been saved through cost containment measures.
The Chairperson referred to the payment of subscriptions at the end of the year. The Department would not be in good standing for the whole year, if it paid only at the end of it.
Ms Mololekoa replied that membership was not paid late.
The Chairperson asked why the NSFAS was paid by the DBE. He was not seeing predetermined targets for the rest of the financial year.
Mr Padayachee replied that information about cost containment and predetermined targets would be supplied in writing. The NSFAS bursaries were administered on behalf of the Department. There were no delays in payment.
Dr C Madlopha (ANC) said that education stakeholders had complained about the shortage of workbooks. There was always a shortage of books, especially imported books. It was a challenge. There had to be oversight of service providers, to counteract delivery shortages.
Mr Padayachee replied that there were no budgeted funds for textbooks in provincial departments. There had to be one book per child per subject. The DBE screened books in terms of catalogues. Having core textbooks reduced the price of textbooks. SASOL assisted with textbooks for grade 12 mathematics. Books were sponsored by the private sector. Delivery was at the provincial level. Provinces were not always on target. Tracking and retrieval systems had to be looked at. Books had to be returned.
Dr Madlopha said that the Committee, as an oversight body, did not know where “other transfers” went.
Ms Mololekoa replied that it went towards membership of the United Nations Educational, Scientific and Cultural Organisation (UNESCO), and the national education collaboration framework.
Dr Madlopha noted that the expenditure on capital assets was 5.4%, and 6% on goods and services. There would be under-spending. Goods and services projects had to be implemented. The Department had to pronounce on the issue of the 30-day payment of invoices.
Mr Padayachee replied that there was under-spending on the Schools Infrastructure Backlog Grant. Money that was not spent on workbooks, was savings, not under-spending. Overspending was not an overall pattern.
Ms Shope-Sithole said that she was from Bushbuck Ridge. She looked after two children who told her every weekend that there were no school books. The children were tired of going to school. The teachers went out to drink and the principal had to go and fetch them. She was thinking of moving them to another school. She asked if it could be the fault of the Department that teachers drank, because there were no materials to teach with. The school was at Acornhoek. She did not expect an answer. The Department could respond to her in writing, after they had visited Acornhoek.
Mr A Shaik Emam (NFP) asked if there was any system to check what had happened to NSFAS money distributed to 2 000 children. He asked if there was follow up to see if they had proceeded to tertiary level, or were dropping out.
Mr Padayachee replied that learners had been tracked over four years, and 3 400 had graduated. There was placement across the country, but 1 200 still had to be placed. Placing had to be raised to 100%. Teachers were needed. Graduates would be moved to provinces where teachers were needed. Enrolment for mathematics had decreased, with a shift to languages.
Ms R Nyalungu (ANC) asked how many Dinaledi schools there were, and where. She asked if the Department analysed the performance of technical schools.
Mr Padayachee replied that there were 500 Dinaledi schools. More information on them would be provided. There were discussions with the Treasury to reconsider the grant for mathematics and science. The 500 schools supported other schools. A list of 200 technical schools would be provided. The DBE was proposing a sharpening of the technical schools grant. There was a national education collaboration trust. Education was to be made a societal matter, together with business. Allocations had been made for the functioning of the trust. There were eight underperforming districts. Best practices would be upscaled in the remaining districts.
Ms Shope-Sithole remarked that the pronouncements of the Head of State had to be followed. President Zuma required economic change. Education had to equip people for that. South Africa was a unitary state. All spheres of government conducted their own business, but there could not be division. She did not like to hear about the provinces. The Standing Committee was not a portfolio committee. It appropriated funds, trusting that every rand given would be followed. The scarce resources of the State had to be appropriated to those who monitored their use. When communities were up in arms about education, the National Department hid away. She advised the DBE to not call MECs, but to call the Minister direct. The DBE had to operate in a manner which would enable the Standing Committee to support the budget.
Dr Madlopha agreed that it was not acceptable to refer the Committee to the provinces. The Committee wanted answers. The DBE was the centre, and that centre had to hold. The Committee had an oversight role. There were complaints in the constituencies from parents, principals and school governing bodies that food schemes were “on and off” because service providers were not paid on time. The children could not eat. The Committee was aware of this situation. The Committee had to see money bear fruit. The AG had stated in 2011 that the DBE was not fulfilling an oversight role. There had to be correct monitoring of the provinces, so that money could be followed.
Ms Manana also urged that the Department do oversight. The provinces were saying that money was being withheld until the end of the year, and then dumped on them. Workshops about expenditure had to be held. She asked for a written report on accruals.
Ms Mololekoa replied that there was withholding on conditional grants if funds were not spent. Such monies were returned to the Treasury. Information was required to roll over funds.
Mr Shaik Emam asked if all new schools built would be of the same quality, and would provide the same kind of education. Would the schools would be equipped with laboratories and other facilities? Old schools had to be maintained and improved. He asked what was being done differently.
Mr McLoughlin pointed to a discrepancy between amounts cited for employee compensation. The first amount cited was R315 million, while R414 million was cited in the table of expenditure.
Ms Mololekoa replied that the R414 million included people who were not on the permanent staff establishment.
Ms Nyalungu asked that it be assessed if there had been an improvement in mathematics and science due to the Dinaledi schools grant. A lot of money was given to technical schools. The status had to be known.
Mr Padayachee replied that an assessment could be made of performance against the grant. There had been an impact on grade 12 passes, and mathematics. There had been difficulty with spending on the technical schools in the first few years. A report could be made available. Workshops had to be refurbished. The Department had gazetted about technical mathematics.
Dr Madlopha asked what interventions there were when provinces did not spend.
Mr Padayachee replied that the Department would say if spending had to be accelerated, as with the Schools Infrastructure Backlog Grant.
DBE briefing: Schools Infrastructure Backlog Grant / Accelerated School Infrastructure Delivery Initiative (ASIDI)
Ms Tsholofelo Diale, ASIDI Programme Manager, said the purpose of the grant was for the eradication of schools with inappropriate structures, such as mud and plankie schools, and the provision of water, sanitation and electricity to schools. The programme was driven by the DBE, which had established a Project Support Unit (PSU) to support the programme manager. The DBE worked closely with its provincial counterparts at Provincial Education Departments (PEDs), and the PEDs interacted with provincial Public Works departments as custodians to coordinate the improvement of facilities. The DBE appointed Implementing Agents (IAs) to manage batches of projects. The IAs appointed professional service providers and contractors to execute the work.
The Committee was taken through the ASIDI scope of works per province, according to the categories of inappropriate schools; electricity; water; and sanitation. The Eastern Cape headed the list on all counts.
Ms Diale briefed on the ASIDI implementation processes. The optimistic estimated target by the DBE for the building of a school was 18 months. A list of implementing agents was provided. Most prominent were the Development Bank of South Africa (DBSA) and the Independent Development Trust (IDT). ASIDI’s progress with inappropriate schools, water, electricity and sanitation was noted.
ASIDI’s expenditure was analysed. Challenges centered on the Programme Support Unit being limited in its ability speed up implementation, as it had limited authority and had to operate through existing DBE structures which were not aligned to infrastructure delivery. ASIDI expenditure had remained undesirably low. Lack of technical capacity at DBE necessitated the use of IAs that had their own procurement policies. This made procurement faster, but the technical capacity of many IAs was not sufficient, which led to poor performance. Contracts between the DBE and IAs were not firm enough to allow for quick termination and replacement. The PSU had finite technical capacity and could not take over and manage projects after termination.
The Chairperson asked a delegate from the national Department of Public Works to comment.
Ms Lydia Bici, Deputy Director General: Special Projects, DPW, said that there was an agreement between the Ministers that the DPW not only had to coordinate, but also to implement as well. There were arrangements between the DPW and service providers that had to be implemented. The DPW did not build, but provided support in project management. Service providers were appointed, and then contractors. Provinces were the custodians of the finished product. The DPW acted as facilitators on the national bid committee.
Mr Shaik Emam said that in the Eastern Cape, the handover period of built schools from the DPW to the DBE was a problem. It was serious. The DPW, DBE and the contractors all had to be on site for it to happen.
Ms Diale replied that schools were occupied when completed, before they were signed over. The school had to be transferred to the books of the custodian. The DPW was invited during monitoring and implementation. It could be hard to get everyone to sign.
Mr Paddyachee added that the Department intervened in completed schools in the provinces, to get the children in.
Mr Shaik Emam asked if problem contractors had been identified.
Mr Padayachee replied that there was blacklisting of problem contractors, but more could be done. Problem contractors would not be employed again, but still the country had to be alerted. The Treasury could help.
Mr Shaik Emam referred to prefabricated schools. Some were 43 years old and had been condemned by engineers, but nothing had been done. Such schools had been excluded from progress. There were no signs of extracurricular activities or sport. Sport was going downhill. Not everyone went to school to become a doctor.
Ms A Lovemore (DA), a Member of the Basic Education Portfolio Committee, asked about infrastructure norms and standards for sport.
Mr Figg asked about the criteria for contractors. Some could not cope with repairs and maintenance. Schools in the Eastern Cape were falling apart.
Mr Padayachee replied that there was a lack of capable contractors. Construction Industry Development Board (CIDB) grading was used. The Department did not wish to place all its eggs in one basket. Risks were mitigated.
Ms Lovemore noted that 189 schools had been targeted, with 75 completed. She asked if Lafarge dominated the supply of building materials.
Mr Padayachee replied that some schools had to be “meshed.” This was prevalent in the Eastern Cape. There was a discrepancy between the targets and completion for inappropriate schools. The schools were not rolled out as targeted because an agreement framework had to be in place. A rollout of 140 could currently be completed. It was the case that various contractors had to wait for materials from Lafarge. There had to be an alternative supplier.
Ms Lovemore said that new schools had to have everything. They had to be equipped for sport and cater for the disabled. There had to be ventilation and light. She asked if such things were in place.
Mr Padayachee replied that schools were not equipped for sport, but were for the disabled. For sport, the basic level was a soccer and netball field. Sometimes the soccer field had to be shorter than the standard, or even built on a slope. Work was done in terms of what the grant allowed. Sometimes several schools could share a good athletics track together.
Ms Nyalungu asked about implementation in the Eastern Cape. She asked what happened if the DPW could not complete a school.
Dr Madlopha noted that the 2011/12 AG report showed a lack of leadership and monitoring with regard to infrastructure delivery. There was poor work by the DPW in all provinces. The DBE could rectify matters.
Dr Madlopha asked if the DBE had a policy and guidelines to deal with the infrastructure delivery process. It was not clear who did what. The separate roles of the DPW and implementing agents had to be defined. The Department had to fast track the delivery of schools. Schools were audited by the AG. The AG was concerned that the provinces had not made adequate progress during the contract term. There were delays in reports and the appointment of contractors. Notice letters were issued but not enforced. There were challenges involving the Service Level Agreements (SLAs).
Mr Paddyachee replied that the Minister wanted an infrastructure branch in the Department, with its own DDG. If the number of people could be increased, the DBE could fulfill the IA role.
Dr Madlopha said that the IDT had not delivered anything for two to three years. Delays with schools escalated costs. She asked about the cost of escalation. She asked if schools were being built in accessible places, or whether they were “lying around as white elephants.”
Mr Padayachee replied that the Department tried to build where there were existing schools.
Dr Madlopha asked about security against vandalism, and a plan for security at schools. People complained about lack of security, and that computers were being stolen at night.
Ms Diale replied that the community was being involved in the security at schools. The community had to take charge. The Standing Committee could make sure that communities looked after schools.
Dr Madlopha referred to delays with building. She asked what methods were currently used. Alternate methods could be fast tracked. There was the issue of job creation through the EPWP.
Mr Padayachee replied that the IDT was the IA in the Free State. There was a final intention to terminate the contract. A task team was investigating alternative construction technologies. Norms and standards had to be established. The DBE would investigate the market to see what was available.
Dr Madlopha said that alternate technologies had been available since 2012. The DBE had to talk to the DPW and IDT, to establish minimum requirements.
Mr Ramasedi Mafoko, Director for Physical Planning and Rural Schooling, replied that there were already hundreds of schools built with alternative methods in the provinces. Schools built by the DPW with alternative technology were falling apart. Ongoing evaluation was needed. Maintenance of schools was critical. Regulations were needed. There were 27 000 schools. The DBE wanted the maintenance budget increased, from five to ten percent. There had to be capacity building. There was R10 million per province for architects, engineers and quantity surveyors. It had to be increased to R26 million, and building environment specialists also appointed. Infrastructure management had to improve.
Mr Padayachee added that the AG had raised issues about appointing people with experience. There had to be accountability mechanisms. The DBE would work with the AG.
Mr Shaik Emam remarked that money would be wasted if the system were not perfected. There was nothing to prevent someone from carrying out bad building.
The Chairperson asked if there could be interaction with the South African Bureau of Standards (SABS) when schools collapsed.
Ms Bici replied that it was not the contractors, as such. Alternative methods could be certified by Agrèment. Contractors had to be licensed to erect structures. Contractors had to produce certificates. The process could be improved. Buildings did not necessarily fall apart because of the method used.
Mr McLoughlin noted that the mandate for water and sanitation was covered in the budget. He presumed that the same amount was not budgeted for in the Department of Water Affairs and other departments. He remarked that nothing had been said about land for schools. He asked how land was obtained. APP targets had gone up and down. He asked if the balance of funds was returned to the fiscus, or rolled over.
Mr McLoughlin said that contracts between the DBE and IAs had to be improved, with firm penalty clauses. The PSU was said to have finite technical capacity, and could not manage projects after termination. He asked if private entrepreneurs could be used.
Mr Padayachee replied that there was general concern in the Eastern Cape about IAs who did not perform. There had to be more clauses in contracts. PSUs could not be involved in procurement.
Mr McLoughlin said that he had found the briefing informative but somewhat alarming. There was a huge problem -- he wanted to see some passion. People had to be taken out of poverty and educated.
Ms Shope-Sithole said that she had come to Parliament knowing little, and had had to be instructed about leadership and governance. Her professor had said that public sector management of programmes depended on policy planning over the Medium Term Expenditure Framework (MTEF). There had to be public/private partnerships and regular evaluation of financial statements to help evaluate effectiveness. It would not do to worry about who had not delivered, but the DBE as leaders had to do the accounting. She asked what impact the DBE felt it delivered to the children of South Africa. The Department surely would not want to feel that it had drowned a generation. If the DBE could not deliver, nothing would happen.
The Chairperson referred to the scope of work. The lack of libraries and laboratories was a backlog inherited from apartheid. This had to be corrected. When funds became available, libraries, laboratories and sports fields were excluded. There had to be interaction between the DBE and other responsible departments, which included the Department of Transport. Some areas were not the responsibility of the DBE, but the question was what relationship existed with line departments to produce schools one could be proud of.
Mr Padayachee replied that there were not enough schools in the Eastern Cape. It was not possible to build state of the art sport facilities. There was an attempt to supply soccer fields. There had been talks with the Treasury. The conditions of the grant imposed limitations.
The Chairperson said there was a problem with infrastructure implementation due to lack of capacity in the Eastern Cape. He asked if capacity was being built. The Financial and Fiscal Commission (FFC) had said that infrastructure funds had been withdrawn because there was no infrastructure service on the ground. It would not do to punish those who needed to benefit from infrastructure. The government could not lament about a lack of skills and capacity. The NDP prescribed the building of a capable developmental state. It had to start with the capacity in the provinces and municipalities to build projects. It was useless to condemn the Eastern Cape because it failed. He asked what could be done to cope with the capacity challenges.
Mr Padayachee replied that schools had to be built in the right places. There had to be norms, standards and guidelines for where schools had to be provided. It was unacceptable for a building process to be drawn out over two to three years. Decisions would have to be made in the coming months. It was already an improvement, if only to take children out of the mud schools. There were provinces where professionals did not want to work, but in successful areas they wanted more. Conditions were better than two to three years before. The momentum was there. The DBE would not pay if there was no delivery.
The Chairperson asked a delegate from the National Treasury to comment.
Mr Spencer Janari, Director: Education and Related Departments, said that the Treasury applauded the improvement in the programmes. Although 70% expenditure was not yet good, it was better than two years before. The Department had received R100 million over the MTEF to support planning. There was improved delivery and expenditure. The Treasury would assist with procurement.
The Chairperson asked the DBE to answer unanswered questions in writing. After the passing of the Appropriations Bill the Committee wanted to follow up to see what the money was achieving. Assistance was needed to unlock blockages and identify wastage. The DBE and Parliament had to deliver to the people, without maladministration, fraud and corruption. The Committee would follow project delivery. Money had to be spent timeously and appropriately. The Committee would interact with the DBE and other departments. Government had to deliver. Education in a conducive environment fed into the building of human capital.
The Chairperson adjourned the meeting.
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