Department of Higher Education and Training & its entities 2016/17 Annual Performance Plan: AGSA on audit outcomes; DHET Budget for 2016/17 analysis: Finance and Fiscal Commission briefing

Meeting report

The Chairperson opened the meeting and apologies were recorded for Mr E Siwela (ANC) and Mr N Khubisa (NFP). Mr Y Cassim (DA) and Mr M Mbatha (EFF) had advised they would be late for the meeting.

Financial and Fiscal Commission (FFC)

Mr Bongani Khumalo, Acting Chairperson, Financial and Fiscal Commission (FFC), said that there were challenges and risks related to the Department of Higher Education and Training (DHET) budget. This was because the government had agreed to a 0% increase in university fees, which had resulted in consideration being given for free education. The Commission would be supporting the policy decision by the government to make higher education free.

The DHET was confronted with funding restrictions for Technical and Vocational Education and Training (TVET) and Continuing Education and Training (CET) colleges.

The DHET was responsible for six programmes. These were administration, human resource (HR) development, planning and monitoring coordination, university education, vocational and continuing education and training, skills development and community education. The DHET was also responsible for Sector Education and Training Authorities (SETAs), the National Skills Fund, the National Student Financial Aid Scheme (NSFAS), the Council on Higher Education, the South African Qualifications Authority (SAQA) and the Quality Council for Trades and Occupation.

The funding of higher education in South Africa was underpinned by four principles. These were the sharing of costs, autonomy in determining fees, funding for service delivery, and funding as a steering mechanism. The funding for the university education programme had increased in the 2016/17 financial year, as well as in the continuing education and training programme. This had been in response to the no-fee increase.

The compensation of employees, goods and services budgets were still growing positively for the 2016/17 financial year, compared to the 2012/13-2015/16 financial years. This was a huge risk, given the 0% increase in university fees. Transfers and subsidies were also growing significantly.

The economic classification of the composition of spending showed that the share of transfers and subsidies in comparison to other line items was declining. Comparatively, the share of compensation of employees was increasing, as well as goods and services. The departmental spending performance showed that the DHET was consistently spending its allocated funds, but there was under-spending on planning, policy and strategy.

In the 2016/17 financial year, the entities reporting to the DHET had been allocated a budget of R26.7 billion, which increased to R31 billion in 2018/19. NSFAS was to receive R24.5 billion. The allocation of shares per entity showed that allocations for SETAs, NSFAS and the National Skills Fund were much higher than for other entities. The spending performance of NSFAS was continuously improving.

Mr Khumalo concluded by saying that more resources had to be put into university education. The funding for the skills levy and SETAs, TVET and skills development had declined in the 2016/17 financial year. The spending performance of NSFAS had improved in 2013/14 compared to 2012/13. The Commission would be available to support the work of the Presidential Commission, given the challenges within the higher education sector.

Discussion

Dr B Bozzoli (DA) expressed disappointment at the content of the presentation. She wanted to know the accuracy of the budget allocations for university education in relation to the 0% fee increase.

Mr C Kekana (ANC) asked why there was not enough budget allocation for TVET colleges. What was being done to ensure an increase in the budget allocations, as TVET colleges helped to address the shortage of practical skills.

Mr M Mbatha (EFF) asked how long it would take, and how much money it would cost, to ensure free education in tertiary institutions in South Africa.

Mr Khumalo responded by saying that it was difficult to answer the question about access to free education, as a lot of factors came into play. It would be inaccurate of give to give a top-of-the-head figure and period. The issue would become clearer when the FFC partnered with the Presidential Commission.

Mr Khumalo said that the Commission would provide a written response about the exact budget allocations for university education in relation to the 0% fees increase, and the budget allocation for TVET colleges.

The Chairperson thanked the Financial and Fiscal Commission for its presentation, and invited the Office of the Auditor-General to begin its presentation.

Auditor General of South Africa (AGSA)

Ms Meisie Nkau, Business Executive, AGSA, thanked the Chairperson for the opportunity to present. She introduced her colleague as Mr Joshua Baganzi, who would be leading the presentation.

Mr Baganzi, Senior Manager, AGSA, began by outlining the process of reviewing the draft 2016/17 annual performance plans by departments. He said that AGSA assessed the measurability and relevance of the final draft indicators and targets planned for selected programmes. The criteria used to assess the draft annual performance plans (APPs) were that the indicators must be well defined, verifiable, specific, measurable and time-bound (SMART). The indicators must also be relevant to the mandate and the realisation of strategic goals and objectives.

The review findings of the draft APP for the Department of Higher Education and Training showed that there were no significant findings identified that related to the “SMART” criteria on the performance indicators and targets over which the Department had direct control. Technical consultations were currently taking place regarding the audit approach and reporting requirements for the consolidated outcome indicators with systematic targets.

Significant findings were identified in the following SETAs and other public entities:

- Chemical Industries Education and Training Authority (CHIETA);

- Local Government Sector Education and Training Authority (LGSETA);

- Safety and Security Sector Education and Training Authority (SASSETA);

- Services Sector Education and Training Authority (SSETA);

- Energy and Water Sector Education and Training Authority (EWSETA);

- The National Student Financial Aid Scheme (NSFAS);

- The South African Qualifications Authority (SAQA).

The review findings for SAQA showed that its objectives were not consistent with the strategic plan. SAQA had agreed to make the corrections and were currently in the process of making the amendments. Review findings for CHIETA and NSFAS showed that the indicators were not well defined. For NSFAS, the indicators were also found not to be verifiable.

Review findings for LGSETA, SSETA, SASSETA, EWSETA, NSFAS and SAQA indicated that targets were not specific. SASSETA was in the process of developing a tracking tool to ensure alignment of planned targets to pivotal skills. SAQA had agreed to make corrections. The review findings for NSFAS and SAQA had shown that the targets were not measurable.

Discussion

The Chairperson requested that the full audit findings be provided in order to allow the Committee to conduct oversight on the entities.

Mr Y Cassim (DA) requested that these findings be furnished in writing.

Ms J Kilian (ANC) wanted to know how many of the entities’ audit findings were not aligned with the mandates and strategic objectives.

Ms Nkau responded by saying that all responses would be provided for in writing.

The Chairperson thanked the Members and delegates from the Financial and Fiscal Commission and the Auditor-General of South Africa.

The meeting was adjourned.