Department of Higher Education and Training on its 2016 Strategic and Annual Performance Plan

Meeting report

Briefing by Department of Higher Education and Training (DHET)

Mr Gwebinkundla Qonde, Director General, DHET, informed the Committee that the Department had increased its staff capacity from 1 200 to 3 031 due to the Department’s assumption of duties regarding Technical and Vocational Training (TVET) colleges from the provincial sphere of government. Departmental reconfiguration involved the vocational and continuing education and training to include technical, vocational education and training, as well as community education and training. He spoke about the establishment of three new universities and said that the Sector Education and Training Authority (SETA) had been extended for two years to 31 March 2018, as well as the National Skills Development Strategy based on the requirements of legislation.

Mr Theuns Tredoux, Chief Financial Officer, DHET, informed the Committee that in the 2016 Medium Term Framework (MTF) period, the annual budget increased by 9.8% on average (excluding direct charges), from R42 billion in 2015/16 to R49.2 billion in 2016/17, and would increase to R55.3 billion in 2018/19. Direct charges had also increased quite substantially, from R17.6 billion for the 2016/17 period, to R22.1 billion in 2018/19,. The university education program (Programme 3) dominated budgetary spending, at 80.4% of the total budget. Under the economic classifications, spending on departmental services (salaries, buildings, and operational costs) stood at 16.7%. Employee remuneration increased by R840 million over the MTF.

With regard to the 0% increase in university fees, a total of R5.7 billion had been agreed with the National Treasury -- R300 million in 2016/17, with R2.6 billion and R2.8 billion being carried over for the second and third years. The amounts carried over would be financed through SETA skills levies and reprioritisation within projects in the university sector. Transfers to the National Student Financial Aid Scheme (NSFAS) for once off historic debt relief payments included R2.5 billion, while support to unfunded continuing students was R8 billion.

On the matter of function shifts, the Public Service Sector Education and Training Authority (P-SETA) had been carried over from the department of Public Service and Administration to the DHET, with a total amount of R312 million. There had also been a function shift with regard to funding medical students from the Department of Health to the DHET, costing R75.3 million. There had been a R43 million baseline reduction in the skills levies paid by the department to P-SETA, and goods and services had been reduced by R29.4 million.

There had been a sharp increase in the compensation of employees in comparison to the 2014/15 financial year. This was due to the fact that all of the TVET and Community education and training colleges’ employees were now employees of the DHET. Therefore, their salaries were no longer transfers effected from the conditional grant mechanism.

With respect to budgetary pressures, key areas highlighted included fiscal constraints which had a direct impact on service delivery, operational pressures such as a cap on the remuneration of employees, which restricted the departmental regional presence. Monitoring and evaluation was also limited due to budget constraints and the Department’s under-spending was very limited.

Ms Lulama Mbobo, Deputy Director General: Corporate Affairs, DHET, described the activities of Programme 1, covering Human Resource Management, Financial Management and Information and Communications Technology (ICT) infrastructure. Under Human Resource Management, the three performance indicators required the filling of 90% of approved funded positions, disciplinary cases would be resolved within 90 days, and it would take 180 days to fill vacancies. In Financial Management, the performance indictor was the payment of creditors, which was set at 30 days. With ICT, the sole aim was to have the procurement plan approved. She said that the Department was undergoing internal pressures that would hamper the progress of achieving these objectives, but assured the Committee of the Department’s commitment.

Mr Firoz Patel, Deputy Director General (DDG), DHET, said there were four strategic objectives in Programme 2. These were to develop new post-school education and training policies, the monitoring and evaluation framework, developing teaching and learning support and management information systems.

Discussion

Mr Y Cassim (DA) inquired about the interventions that had been made following the national Fees Must Fall campaign. He was interested in the impact of the agreement, such as the number of students who had benefited from the scheme, especially those who were not funded by NSFAS. He was also interested in the specifics of student support structures afforded to the students who had benefited from the funding opportunity. With regards to TVET institutions, he wanted to know why there was an apparent absence of funding grants.

Ms S Mchunu (ANC) sought understanding as to how the strategy laid out by the Minister of Finance in reference to human resource capacity would affect the Department’s objectives if it held redundant positions, and if so, how many redundant positions were there and at what level? Referring to university education, she asked why the NSFAS forensic report had not been included in the annual performance plan (APP), and when it would be finalised. The dropout rates at TVET colleges stood at 15%, which appeared low. She inquired why the DDG, Mr Patel, had been shifted from his previous position, and when the position would be filled. Would Dr Bheki Mahlobo be assuming leadership of Programme 6 on a permanent basis, and had the Deputy Director General post in Programme 4 been filled?

Mr M Mbatha (EFF) commended the actions of the Department with regard to the function shifts of the medical students and the P-SETA to the DHET. He inquired about the manpower necessary to deal with issues such as historic disciplinary cases. With respect to research grants, he wanted to know if the Department would scale up the funding to previously disadvantaged universities.

Dr B Bozzoli (DA) commented on the structure of the department’s budget, especially as it focused more on university education. She wanted to know how the Department intended to manage the costs of in-sourcing and the 0% fee increase imposed on the universities, resulting in severe budgetary restrictions. She commented on the under-funding of the TVET colleges, the wasteful spending at NSFAS -- as only 46% of students funded by this scheme completed their tertiary education -- the failure of the SETAs.  She warned that protests at both universities and TVET colleges were likely at the end of the year. She asked what the position of the Department was, given it had envisioned many control mechanisms, policies and reports from universities, and taking into account the New Higher Education Act which was soon to be enforced -- would the Department consider reducing the pressures placed on universities? She requested confirmation as to whether the Department had reduced its target for growing student numbers in universities, and asked for a report listing the mandates handed to the Department which had not been funded. She asked the Department to stop mentioning that it had set up three new universities, as well as the claim that new TVET colleges had been built, as this was misleading.

Ms M Nkadimeng (ANC) asked what the response of the National Treasury had been to the Department’s request for assistance regarding funding to cater for student enrolment numbers. With regard to the NSFAS allocation, she asked if the increased amount given catered for the increase in the number of students.

Mr C Kekana (ANC) applauded the financial management of the Department. He said that cultural assumptions on TVET colleges relegated the institutions to low academic qualifications and stressed that this would end only if they were properly funded, thereby bettering the quality of education afforded to students and opportunities available to them.

The Chairperson asked why the Department did not produce quarterly reports. Why had many of the Department’s targets been reduced, such as in student enrolment, and graduates in particular courses, such as in engineering?

Mr Qonde responded that the funding for TVET colleges was under review. Regarding the performance of students funded by NSFAS, findings by the University of Stellenbosh showed that NSFAS-funded students performed better than non-funded students.

Mr Patel said that the comments made by the Minister of Finance would affect the programmes of the Department, and as a consequence of this directive, it would have to review its targets. He also clarified that the department had indeed created three new universities, as new infrastructure had been set up and three new bodies (juristic persons) had been set up as per the Higher Education Act.

Following the question on Programme 1, Ms Mbobo said that the National Treasury had not pulled the funds on the compensation fund due to function shifts as such, and the Department had not been adversely affected. Therefore, the crucial vacancies would be filled. There had been acknowledgement that there was a need to strengthen support for both curriculum and examinations, and consequently there was the need to build capacity to provide it. Since 2009, when the Department was established, there had not been adequate support for the compensation of employees. With regard to historical cases, the Department had inherited 841 cases from the provinces, but these had been reduced by 90%. Some of the Department’s processes had been automated, such as leave and performance management, to ease capacity constraints. She clarified that the current vacant slots were the DDG for Planning, due to an internal transfer, and that Dr Mahlobo was Acting DDG: Community, Education and Training.

On the matter of promoting previously disadvantaged institutions, the Committee was informed that there were facilities, such as the R2 billion Historically Disadvantaged Grant and a Research Development Grant, which were being utilised to encourage research at these institutions.

The amount received by NSFAS took into account the new students, and the amount was sufficient. On the issue of why the Department did not issue quarterly reports, the Committee was told that reporting depended on the nature of the targets set and met by the Department.

The Chairperson mentioned that the presentation had been ambiguous, as the Department had not set targets that were measurable and time bound. A lack of clarity on this issue would lead to a wastage of time, as targets would not be achieved.

Mr Cassim refined his question to the Department by asking about what would be done to support students from the specific cohort who had qualified for the special dispensation. These were students who were not funded by NSFAS, but who qualified for tertiary education and had registered at an institution of higher learning. He was worried that the universities might appropriate the money set aside for this specific use, and inquired if NSFAS was involved in the direct disbursement of these monies.

Dr Bozzoli enquired as to when the new universities’ budgets would be integrated into the main budget, as they were being funded from a separate source. She requested confirmation of the number of artisan trainees who were qualified under the Recognition of Prior Learning (RPL) programme, or under apprenticeship. She also asked for the differentiation plans for universities, as well as a report detailing the financial standing of the previously disadvantaged universities.

Mr Mbatha requested a breakdown of the R2 billion, detailing the beneficiaries and the areas of research which the recipient universities were carrying out. He also asked about the financial health of Walter Sisulu University, North West University, University of Zululand and the University of Fort Hare and whether there was a need to be concerned about their financial state. He also asked about how universities grew, and if it was customary for them to start off fully fledged. With regard to engineers, he asked if employment assistance could be given to students who had acquired scarce skills.

Ms Mchunu commended the Department on surpassing its target for the training of artisans, especially in the face of funding constraints.

In response to the question raised by Mr Cassim, Mr Qonde said the Department would have the requested details available after the universities had concluded their internal processes, and informed him that all students received the same amount of support. With respect to the disbursement of funds, NSFAS and the universities’ administration worked together, thereby reducing the chances of exploitation. With regards to artisan development, he said that trade skills in demand were such as electricians, bricklayers, motor and fridge making, to name but a few, and the Department had increased the amount it directed at these trades.

The committee was told that many current universities started as single trade colleges, grew over time and were affiliated with already established institutions before becoming stand-alone institutions.

The Chairperson said the reason for requesting quarterly reports was that they would better assist the committee in its monitoring and evaluation function. She also inquired why the number of days required to fill vacant post was set at 180 days (six months), yet the prescribed time was four months.

Mr Kekana brought up the fact that the ANC government had made it a priority to provide employment and encouraged the Department to hasten the period between the advertisement and employment for a post.

Dr Bozzoli, asked when the new universities would be included in the main budget.

She was informed that their source of funding would be earmarked funding by the National Treasury until 2018/19.

Mr Mbatha asked for the Department’s capacity projections within the new universities for 2019/20, and was told that this was dependent on a variety of factors such as the infrastructure development rollout, based on the funding stream. The figures stood at approximately 4 000 students, with 90% of this dedicated to undergraduates.

The Chairperson asked the Department to prioritise the placement of the new Deputy Directors General as a matter of urgency.

The meeting was adjourned.