Department of Basic Education action plans to address audit & Management Performance Assessment Tool findings

Basic Education

10 March 2015
Chairperson: Ms N Gina (ANC)
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Meeting Summary

The Department of Basic Education (DBE) took the Committee through the action plan to address the audit findings of the Auditor-General of South Africa (AGSA) for the 2013/14 financial year. The Department discussed the major findings and areas of emphasis on each finding, and also included the progress and action plans that the Department had adopted as a result of the findings.

Under financial statement matters, areas covered were accruals on overtime and claims from examiners and moderators, underspending on infrastructure, and issues related to interest earned, tender revenue, accruals, advances, expenditure, transfer of complete schools and supply chain management in the Accelerated Schools Infrastructure Delivery Initiative (ASIDI).

Irregular expenditure findings focused on memorandums of agreement (MOAs) for implementing agents (IAs) not following government prescripts, delays in appointing IAs, and funded students deviating from intended programmes.

The regulatory and compliance audit had uncovered instances of employees not disclosing their business interests when receiving their appointment letters, and taking on remunerative work outside the Department. There was no proper record keeping of leave by human resource management, and over-expenditure in terms of compensation of employees. Transfers related to the National Student Financial Aid Scheme (NSFAS) management of funds also came under scrutiny. The performance audit for the Kha Ri Gude mass literacy campaign drew attention to inaccurate reporting on the recruitment of learners and volunteers. AGSA’s finding on the reliability of strategic objectives was that the information reported was inaccurate, unreliable and incomplete.

In discussion, several members wanted to put emphasis on the need for more concentration on rural schools, especially in relation to the service providers that had not supplied food and other requirements to the schools. Monitoring of the Kha Ri Gude campaign should be intensified for both learners and tutors, especially on their attendance. Learners were being recruited, but they did not attend. The ASIDI programme had great intentions and had made good progress, but had failed to deliver on some of its promises.

A key issue raised was the problem of under expenditure, which had become an annual occurrence. Committee members said the Department did not seem to be addressing this well, and questioned its capacity. However, the Department said it did not expect to underspend in the next financial year.

AGSA said the Department had been making significant improvement in addressing the audit findings, which were centred on five areas: discipline; coordination with principal actors; management of consequences; monitoring and evaluation, and resources and capacity. The Department was taking the AG’s findings very seriously.

The Committee also heard how the Department had been rated in terms of the Management Performance Assessment Tool (MPAT), the aim of which was to get managers to regularly monitor the quality of their management practices and to implement improvement plans where necessary. Areas requiring strengthening were financial management, human resource and systems management, and governance and accountability. Areas requiring improvement were strategic management, human resource and systems management, governance and accountability, and financial management. However, the Department was slowly improving, and MPAT had played a big role.

Meeting report

Auditor-General of South Africa on 2013/14 audit findings

Mr Nibekas Maluleke, Director of Finance: Department of Basic Education (DBE), discussed the major findings and areas of emphasis on each finding, and also included the progress and action plan that the Department had taken up as a result of the findings.

Under financial statement matters, areas covered were accruals on overtime and claims from examiners and moderators, underspending on infrastructure, and issues related to interest earned, tender revenue, accruals, advances, expenditure, transfer of complete schools and supply chain management in the Accelerated Schools Infrastructure Delivery Initiative (ASIDI).

Irregular expenditure findings focused on memorandums of agreement (MOAs) for implementing agents (IAs) not following government prescripts, delays in appointing IAs, and funded students deviating from intended programmes.

The regulatory and compliance audit had uncovered instances of employees not disclosing their business interests when receiving their appointment letters, and taking on remunerative work outside the Department. There was no proper record keeping of leave by human resource management, and over-expenditure in terms of compensation of employees. As far as transfers related to the National Student Financial Aid Scheme (NSFAS) management of funds was concerned, the Department had requested NSFAS to submit an approved implementation protocol for the Funza Lushaka Bursary Scheme. A financial report of moveable and immovable assets was required for Provincial Education Departments (PEDs). Under tender administration, areas of emphasis included non-compliance with Treasury prescripts, the supplier database and compliance on awarded purchase orders, and payment of suppliers within 30 days.

The performance audit for the Kha Ri Gude mass literacy campaign drew attention to inaccurate reporting on the recruitment of learners and volunteers. As far as monitoring was concerned, the roles and responsibilities of SAB&T (auditing company) and DBE must be documented and communicated.

AGSA’s finding on the reliability of strategic objectives was that the information reported was inaccurate, unreliable and incomplete. The planning directorate must verify all documentary evidence, where figures are overstated by reporting units, reports sent back to the branches for corrections to be effected, or for additional evidence to be provided, and the validity of records must be checked every quarter.

On performance information, there was a lack of evaluation of evidence for performance indicators received from PEDs and the national Department of Health with regard to the National School Nutrition Programme (NSNP). The NSNP unit must conduct provincial visits to perform spot-checks on the data provided by schools.

Discussion
The Chairperson said that she wanted the Department’s report on the provinces. Also, with the performance audit, she was very happy that the Department had raised issues on Kha Ri Gude. However, they were broad findings so more information was required.

Ms C Majeke (UDM) commented that she was not very happy with the 29% level of expenditure, especially when there was underutilisation of infrastructure. For schools, under expenditure was very bad because the condition of schools was bad. The Committee would like to see 100%.

Ms Majeke also asked about nutrition. The Department must follow up on the schools to see if children are fed, because what the children say was inconsistent.

Ms J Basson (ANC) commented on NSFAS in relation to the Funza Lushaka Bursary Scheme. The Department should come up with a strategy to address the issue of students deviating from their actual programme or subjects that they were recruited for. Also, it was disturbing that the payment was equal for all students, without a follow up being conducted on how the money was spent. One student who stayed near an institution was given the same money for accommodation as someone who lived far away and had to travel. How did the Department account for this?

Regarding leave management, Ms Basson said the Department concentrated on managers submitting leave late, but what about the HR people who were delaying the process by capturing leave late because they wanted to use the backlogs for overtime?

On the NSNP, Ms Basson said she liked the spot check programme, but urged the Department to concentrate on rural schools, where learners did not get food like they were supposed to, and where suppliers were not paid on time.

Also, Kha Ri Gude was problematic. Monitoring should be intensified for both learners and tutors, especially on their attendance. Learners would be recruited, but they did not attend.

Lastly, the over expenditure for compensation of employees was very worrying. Why was that? The Department needed a strategic plan.

Ms D van Der Walt (DA) said the Auditor General (AG) had a duty to make sure there was value for money, especially with reference to infrastructure. How would the AG’s report refer to instances where brand new schools which cost millions, had been built and were standing empty, as well as money spent on teachers on sick leave but who got paid even though they went over the days of sick leave allowed?

She asked if the clustered invoices of 2010 had stopped in 2011? The Department had referred to a tender which was advertised for less than ten days -- was that the only tender, and what was the amount?

Mr A Mpontshane (IFP) asked about the disclosure of business interests outside of one’s employment by new employees, who had to fill out the forms. What about the older ones -- would they be left out?

On the moratorium on the filling of posts, would that include the post of the Director General? 

On the inaccurate information which had been submitted to the Department, what was important was accountability. This had been very weak throughout all levels of the system. The Department had said it would call in the individuals responsible for inaccurate information, yet this seemed weak when it came to accountability. Stronger action should be taken against such officials who were supplying the Department with incomplete and unreliable information.

Lastly, the Department had said it was lacking in capacity to do spot checks. That was very fair to say, but did it end there? The Committee would like to hear something better than that from the Department.

Ms H Boshoff (DA) asked about new employees who, after a few months, went to get work outside the Department. On leave registers, she asked what had happened to the SAM system? Could that help with correct record keeping?

Mr Anton Schoeman, Deputy Director General, Administration, DBE, said the issue between the Department and provinces had come up in multiple forums already, and the Minister had said the Department needed to check up on it.

On Kha Ri Gude, the two main concerns in the audit were “ghost employees”, and the monitoring and evaluation of service providers that the Department employed. The Department made sure it checked ID numbers. There was a system in place, and a huge clean-up operation. The Department had appointed additional staff to that unit with the capacity and knowledge to go out to provinces and assist them. It was monitoring the matter on monthly basis. Also, the Director General had weekly meetings with Kha Ri Gude officials and with the service providers to sort the challenges out. The enrolment had dropped and the Minister was concerned with this.

The Chairperson responded that with Kha Ri Gude, the main issue was that learners were dropping out. She thought the Department was right on track and was doing a good job in planning ahead.

Mr Schoeman asked the Department to announce the campaign, and said it was important that it advertised the programme.

On the issue of under expenditure on infrastructure, the Department knew this had been an issue in the past. For this year, one reason for under spending was that the Department had not followed up on invoices and had not made sure that proper documentation went to the Department. It was therefore asking for invoices within 30 days. The Department believed it would be very close to reaching 100%.

On NSFAS, what happened was that students got bursaries and enrolled for certain courses, especially maths and science. Halfway through the course, they changed to something easier. The Department had now changed the contract, with a clause to say that students could not change their programme, so the process had been tightened significantly.

The Chairperson asked what the Department was investigating now with NSFAS?

Mr Schoeman said the Department was changing the contracts and there was a huge drive around the placement of teachers.

Regarding leave management, it had been a problem because the leave forms came very slowly to HR. However, there was no backlog. The processes were being tightened. There was a leave register in each directorate that was balanced against leave forms that had been received. If a manager did not submit a leave form, the Department was notified. However, it was a bigger issue in the provinces.

On the value for money for infrastructure, the Department had found that a school in one province cost R100 million, and another school would cost R150 million. The Department wanted to put measures in place to have discussions with implementing agents who did the actual contracting for these schools. This was an issue the Minister had mentioning frequently in meetings.

There were no “ghost workers” in the Department. The AG and the Department had done a test. There had been ghost workers only with the Kha Ri Gude project, but that had been sorted out. With sick leave of teachers, that issue was mostly in the provinces, so that was what the Department needed to monitor.

On the question about the tender, it had been advertised wrongly but had been retracted, and the Department had not spent any money on it. This was the only case.

Regarding disclosure of interest, it was a prescription of government that everyone must declare their interests. The Department had done so throughout the years and it had a very good record. Only one person had declared late.

The Department used the word moratorium on the filling of a post because they wanted to wait before filling the post.

Mr Schoeman said that the Director General post would be advertised as soon as the contract of the previous Director General ended.

Regarding the issue around nutrition, there were nine million children who were not fed. That was a huge number. The problem was with the service provider in the province of Limpopo. What normally happened was that the province went out on tender within ta province to get a service provider to do the feeding. The Department had defined the indicator wrongly. It got reports from the principals, but the AG had said that was problematic and unreliable. Therefore, the Department had changed the indicator. There were spot checks, but it was impossible to see every single school.

Ms N Mashabela (EFF) first asked about the ASIDI. The programme had good intentions but had so far failed to address the backlog in relation to delivery of school infrastructure with water and sanitation. How many schools had been replaced so far through ASIDI, and how many needed to be replaced?

The problem of under expenditure from the AG’s report was an annual occurrence. The Department did not seem to be winning the battle against under expenditure. There did not seem to be the capacity to correct this issue.

The Chairperson emphasised that the purpose of the present meeting was to discuss the findings of the AG on the previous financial year and to see the Department’s progress in dealing with the findings. She wanted to caution this as Members added their input.

Mr D Mnguni (ANC) asked about examination claims. Did the Department take into account when senior management submitted them late, or was everyone under them -- who had submitted on time -- punished? On the completed ASIDI schools, was there a mechanism to make sure the school had been well built and did not have defects? He also asked about the time frame for NSFAS, the leave form, and asset management in provinces.

Mr L Ntshayisa (AIC) raised an issue on service providers, because there was a lot of money involved. Was it not possible that the monitoring could be by the provinces themselves, instead of a service provider? Also, for the building of new schools, and the ones being shut down, could the AG check on this and provide a report?

Mr T Khoza (ANC) asked a question about Kha Ri Gude. What happened in rural areas when parents did not have IDs and had children who were students but did not have birth certificates. This problem was escalating.

Ms N Mokoto (ANC) said it would be useful for the Committee to get reports, because there seemeds to be some disputes between the Department’s statements and the AG. On ASIDI, where was the evidence?

The Chairperson interrupted and repeated that the present meeting was for following up on the findings.

Ms Mokoto said the reports were still relevant because they could be helpful for the Committee. She asked how far the Department was in terms of making sure that it was able to address all the discrepancies that had been identified in the audit. If the Department had trained people, how far had they gone and how much had been invested? On grants that the Department gave to the provinces, it was disheartening to hear that there was no capacity to effectively carry out the monitoring process which, she emphasised, was a function of the Department, not the PED. The Department must take charge and accept accountability.

Mr Schoeman said that he would get the figures on the number of schools replaced. On under expenditure of the budget, this related basically to ASIDI, and that was being followed up on.

On examination claims, if people had done the work, they would be paid. The Department was putting more responsibility on managers and officials in the examination function.

Regarding timeframes, the Department had them in place. When it received an audit report, there was a meeting where each finding was addressed and an action plan was worked out.

On prescripts, Mr Schoeman said that in his personal opinion, it might be because of negligence but there were other issues as well. Prescripts from the National Treasury were hard to follow.

On the issue of IDs, Mr Schoeman said he would convey the message to the Deputy Director General on that issue.

The Department had assisted with the internal audit function, in terms of capacity building. It was difficult to find auditors because many of them went to the private sector. It was difficult to recruit, but the Department had a plan in place.

Ms Stella Mosimege Director: Strategic Planning & Reporting, DBE, responded to some of the queries raised. On the issue of dealing with evidence of what the Department reported, it had tried to the strategies it had in place, during the presentation. It put together what the AG and internal auditor had raised. Regarding capacity, the Department did spot checking. On nutrition, Ms Mosimege was referring to her unit, which deals with reporting, not the Department in general. The NSNP unit did the spot checking because it was their function. It went out on a quarterly basis to check on the issues that had been raised.

Mr H Khosa (ANC) asked, when there was a deviation, how did that become a transfer payment? If a learner was funded for doing economics and they switched to maths, how did this become a transfer payment? Also, regarding the payment of service providers, why was it at 90%? Ms Boshoff had asked about the schools that were still standing empty. Where did the discrepancy lie?

Mr Mpontshane asked for the exact figures for Kha Ri Gude. What was the Department doing for old employees in the system who needed to declare their interest? On the moratorium for the filling of posts, if it was not a moratorium, what was it?

Ms Basson raised the issue again about how children were not eating. The Chairperson interrupted and reminded that the present discussion was on the AG report, and these matters would be discussed later.

The Chairperson commented that the Department had said that there would not be a lot of projects awarded to one contractor, because it would lead to poor performance. Also, the issue of record keeping must be discussed, as it was one of the findings of the AG.

On the issue of ASIDI, the Department had said it did not expect under expenditure. But one of the findings was that the Department did not monitor the process. The Committee hoped that when it received the report for 2014/15, it did not go back to that situation. If the process on ASIDI was tightened up, the Chairperson hoped there will be a better audit report.

Mr Maluleke responded on the issue of the 30 day payment of suppliers. Some delays happened because the suppliers changed their banking details, but that was not in the control of the Department.

On Kha Ri Gude, there were figures which the Department would send it to the Committee. The stipend that was paid to relevant volunteers had been deducted. The Department knew how many learners and volunteers had charged the Department.

The Department had a specific unit that dealt with conditional grants. The Grants Management Unit monitored the implementation, looked at the business plans and visited the provinces with their provincial counterparts.

On ASIDI, in response to the question about damage to a school, he said there was a “retention period.” If there were defects, then they needed to be corrected. When schools were transferred, there was a close up report.

Regarding NSFAS, the investigation was to find out the extent of how many had deviated. The current investigation, to quantify how many had deviated and the value of the deviation, would be completed soon.

Mr Schoeman replied to the question about schools standing empty. He did not know if it was the Provincial Education Department or ASIDI that were building those schools. However, the Department couild investigate this and bring the information to the Committee in writing, but it would be useful to get the names of these particular schools.

Mr Godfrey Diale, Senior Manager: Audit, AGSA, said the deviation of leaners was irregular because these funds were for the Funza Lushaka Bursary Scheme. When the AG verified what educational qualification the learners were initially registered for, they found that what they were actually doing had nothing to do with that. So, that money was not being used for its intended purpose. The AG had allowed the Department to go back during the semester to investigate that.

Mr Diale also said meetings were held where the AG encouraged the Department to develop audit action plans that were intended to address audit findings and root causes. The Department had been making significant improvement in addressing the findings. The findings were centred on five areas: discipline; coordination with principal actors; management of consequences; monitoring and evaluation, and resources and capacity. Mr Diale emphasised that Deputy Director General and the Department had taking the AG’s findings very seriously.

The Chairperson noted there seemed to be good cooperation between these two offices, and that the Committee was happy that there were follow ups on the findings. It looked promising for the Department.

Action plan to address the Management Performance Assessment Tool (MPAT)
Ms Mosimege led the Committee through a presentation on the action plan to address the Management Performance Assessment Tool (MPAT). The Department of Performance Monitoring and Evaluatioon (DPME) was mandated to regularly assess the quality of management practices in departments. The aim was to get managers to monitor the quality of their management practices regularly and to implement improvement in places where necessary.

The DPME had introduced the MPAT to strengthen administrative procedures and systems. Assessment was across five key performance areas -- strategic management, governance and accountability, human resource management, financial management and MPAT process.

Areas requiring strengthening were financial management, human resource and systems management, and governance and accountability. Areas requiring improvement were strategic management, human resource and systems management, governance and accountability, and financial management.

Discussion
Mr Mnguni said that he was very impressed by the report, but when he had visited the office in Pretoria, he had not seen the service charter.

Mr Mpontshane admitted that he had missed most meetings, so he had trouble understanding some of the issues of MPAT. Was the Department monitoring itself?

Ms Mashabela asked why the Committee continued to see poor management and leadership practices in the public service?

Ms Boshoff said that the management of diversity was a problem. Why was that? Why was it so difficult to get the management of disciplinary cases right?

Ms Majeke noted that there had been progress. She was happy about the involvement of the DPME, because it helped to assess if the DBE was doing well or not. However, she was concerned about the Senior Management Service (SMS) system performance. It looks as if it was two percent. The Committee expected it to be at least three or four.

Mr Schoeman responded to the issue on diversity management. There should be 50% women in senior management, but the Department lacked that, even though it advertised.

On misconduct issues, the Department reported on a six month basis to the Public Service Commission. The evaluation of SMS members was not based on their performance, but was an evaluation tool it used to measure.

Ms Mosimege said that for the Department to be at a level two, they wanted to see recognition of good performance, not necessarily in monetary terms.

On the service charter, based on the 2013 assessment, there was none. The Department had put one together, but by the time the monitoring tool had been implemented, it was at a two. It was still not visible to the public, so there was no service charter.

In response to the question on MPAT, Mr Schoeman said that the link between MPAT and the Minister was directly related. The Department could send the Committee more information about this.

Mr Mpontshane emphasised that discipline was a huge problem. What level would the Department give the Committee?

Ms Mokoto asked if MPAT captured the provinces. Also, with regards to the SMS system, who assessed the heads of departments (HODs)?

Mr Schoeman responded that the HODs were assessed by a panel prescribed by the Public Service Commission. Normally, it was the deputy minister of the specific department, another minister, another HOD, and a person nominated from the sector, who did the evaluations.

Ms Mosimege said that based on the 2013 assessment, she would give the Department a “three” score. The Department was slowly improving and MPAT played a big role. Before MPAT, there were things the ministers and HODs would have never known.

The Chairperson thanked the Department and urged them to keep up the good work and the great progress. 

The meeting was adjourned.

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