Governance, Finances & Administration: University of Zululand & University of Fort Hare briefing

Higher Education, Science and Innovation

07 September 2016
Chairperson: Ms C September (ANC)
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Meeting Summary

The Portfolio Committee on Higher Education and Training was briefed by the Universities of Fort Hare and Zululand on their governance, finances and administration.

The University of Fort Hare (UFH) said its Council had shown stability over the years, as the audit and risk committee had kept the institution on its toes as regards governance. The human resources policy and procedures were currently being revised for compliance and relevance. The Students Representative Council (SRC) was hard at work addressing student concerns with management. Institutional autonomy on academic matters was exercised through Senate.

In 2015, total comprehensive income had been R82.7m, subsidies and grants had been R433m, while total assets had amounted to R1.9b. Major funding categories and projects’ total cost had included: engineering (R17.3m); cooperative projects (R196m); teacher education (R47m); infrastructure backlog (R50m); health sciences (R35,3m); and student housing (R137.8m). Central to the overall transformation plan of the university was the integrated city campus vision, and the medium to long term development plan included students’ accommodation, as UFH owned no residences.

Students had protested and demanded among other things that the residence fee increment for 2016 must be reversed, and the university had released a forensic audit report for residences immediately. Students leading the protests had been brought before a disciplinary hearing and charged according to the university’s rules. The university had obtained an interdict against violence and the damaging of property by students.

Total allowances allocated to students in 2016 amounted to R155.1 million, of which R30.8 million was for books, R89.4 million was for meals, and R34.9 million was disbursed as cash.

The Committee expressed concern over the need for better accommodation for students, and the fact that National Student Financial Aid Scheme (NSFAS) money had been used to pay staff salaries. Members asked what action had been taken with regard to the forensic reports, as the intentions must be achieved. They argued that the model of financing was unsustainable, and asserted that while much information had been given in the presentation, much had also been left out. They described the R24 000 per annum for a room with eight occupants at the East London campus as “shocking.” Other issues raised included the reason for the surplus in 2015; the R25m diverted for short term relief, and whether it had been reinvested; the wastages in the 2014 allocation; and a growing concern that UFH was becoming a no-go area for some organisations.

The University of Zululand said operational developments had included a review and modification of senior management and faculty structures. The Students Representative Council had been constituted in 2015 following elections and unsuccessful legal challenges. Issues involving on-campus housing for the Vice-Chancellor and staff, and abuses, were being resolved. The mid-year performance report for 2016 showed income had reached 86% of the annual total, while expenditure was at 42%. Vacancies were being addressed aggressively via a recruitment and retention policy. Capital expenditure was at 14% of the R304m budget. Current cash/investments of R1.4bn reflected early receipt of revenue and delayed expenditure. There had also been delayed spending on specifically funded projects (R500m).

The DHET had allocated R400m for infrastructure funding in 2013. Tenders had been awarded, but the procurement process had been challenged. A new 250-bed residence was under construction. The completion date was December 2016. In the 2014 academic year, the student success rate had been 84%, and 85% in 2015. The vacancy rate of 23.3% was mainly in the professional services divisions, and there was a focus on filling the posts to deliver teaching and learning activities. The 2014 forensic audit had discovered fraudulent events which related to infrastructure development and the theft of R11.5 million. This had resulted in two senior management resignations as well as two senior management settlements.

The Committee expressed concern over the infrastructural development plan legal costs. Other issues raised by Members included how the university had resolved vacancy issues in the Faculty of Education; what action had been taken on fraudulent certificates; the enrolment rate in the fields of agriculture and science; and the requirements for the sustainability of the university. They encouraged the university seek a resolution to the accommodation problems.

Meeting report

Opening Remarks

After it had been proposed that the University of Zululand and the  University of Fort Hare should be given equal time for their presentations, Mr Y Cassim (DA) said the time for the presentations should be limited in order to have sufficient time for the discussion. He referred to the letter he had written to the office of the Chairperson, requesting that specific issues be addressed by the University of Fort Hare. The meeting had been convened mainly to address that request.

The Chairperson responded that no person had objected to the Agenda.

Mr Mduduzi Manana, Deputy Minister, Department of Higher Education and Training (DHET), said the meeting had been convened by the Chairperson in line with the letter Mr Cassim had written, requesting an account of issues raised by some Members of Parliament. The MPs had felt that the two universities should come to brief the Parliament on how they had been able to put corrective measures in place to deal with the challenges they faced. If there were issues that were not in the presentations, such issues could be raised by the Members, and responded to by the two institutions.

University of Fort Hare: briefing
Dr Mvuyo Tom, Vice Chancellor, University of Fort Hare (UFH), briefed the Committee on the university’s governance, finances and administration. The University Council had shown stability over the years, as the audit and risk committee had kept the institution on its toes as regards governance. The human resources policy and procedures were currently being revised for compliance and relevance. The Students Representative Council (SRC) was hard at work addressing student concerns with management. Institutional autonomy on academic matters was exercised through Senate.

In 2015, total comprehensive income had been R82.7m, subsidies and grants had been R433m, while total assets amounted to R1.9b. Major funding categories and projects total cost included: Engineering (R17.3m); cooperative projects (R196m); teacher education (R47m); infrastructure backlog (R50m); health sciences (R35,3m); and student housing (R137.8m). Central to the overall transformation plan of the university was the integrated city campus vision, and the medium to long term development plan included students’ accommodation, as UFH owned no residences. 41.6% of the students lived in residences owned by private landlords with whom the university had signed lease agreements. The aim of the student housing funding was to build a 2 046-bed residence on the Alice campus, of which 610 beds had been completed, but funding for the balance of 1 436 had not yet been secured. Future staff housing development for the Alice campus was also proposed in the medium to long term.

13 872 students were registered at UFH as at August 2016, of whom 10 480 were undergraduates and 3 392 were post graduates. 56.3% of the registered students were at the Alice campus, 38.8% in East London, and 4.8% in Bhisho. The students accommodated in Alice were 4 489, and in East London the figure was 2 814.

Students had protested and demanded among other things that the residence fee increment for 2016 must be reversed, and the university had released a forensic audit report for residences immediately. Students leading the protests had been brought before a disciplinary hearing and charged according to the university’s rules. The university had obtained an interdict against violence and the damaging of property by students.

Total allowances allocated to students in 2016 amounted to R155.1 million, of which R30.8 million was for books, R89.4 million was for meals, and R34.9 million was disbursed as cash. In preparation for the 2017 academic year, a request for proposals regarding the outsourcing and in-sourcing of staff was in place for an analysis of the university’s staffing requirements for 2017. An SRC workshop had recently been run by the financial aid office to educate its members on the new developments for the 2017 year.  Wi-fi had been fitted to all residences at a cost of R5.6 million. The university had managed its preparations for registration through the enrolment committee.

Discussion

Ms S Mchunu (ANC) asked what plans were in place to build better and cheaper accommodation for the students, now that UFH was moving from the expensive lease agreements it had signed with landlords.

Dr Tom replied that the UFH was looking for a space in an area called the Sleeper Site. This area had been earmarked for education, business and government offices. The university would have land once that space was released. Secondly, discussions had been entered into with the landlords to include the option for the UFH to buy into the contract agreements.

Ms Mchunu said the Committee remained concerned about the National Students Financial Aid Scheme (NSFAS) money that was being used to pay salaries of staff. However,going by the explanations from the university, the Committee was optimistic this would never happen again.

Dr Tom replied that the UFH was actually dealing with that. This was in the past, and the university would never go back to such a situation.

Mr Cassim said there had been lots of information in the presentation, but quite a lot had also been left out -- for instance, how the allocation of R71 800 per student for 2016 was broken up.

Dr Tom replied that the figures would be given later, as the figures were not handy. The UFH had been forewarned that because of the limited funding for the zero fees increase, some of the money would be used to fund the period and reinvested later on. This had not been neglected. It had been said that this would not be one of the sources for the funding this year.

Mr Cassim asked what action had been taken by the University Council as regards the forensic report, as the Committee would like to obtain a copy of it.

Dr Tom replied that there had been a forensic audit in Alice. This was being discussed between the DHET, the university and the contractors. There was also a forensic audit concerning two residences in East London, to get a sense of where the problems were. The problem was that some of the students were accommodating themselves illegally. There should be at most two students to a room, and not eight. The contract had expired and the UFH had asked that the students be accommodated properly. The UFH had decided to go the way of forensic investigations to ensure that there was value for money. The report was a Council report. Comments had been made on those issues so that external decisions could be made.

Mr Cassim said there were reports of students signing loan agreements without the actual amounts being included in the agreements. There were bound to be problems if students signed agreements without knowing what they were signing for.

 Mr Alberto Lai-Wing, Financial Aid Manager, UFH, replied that there was an ongoing discussion with the Chief Financial Officer (CFO) to address this.

Ms M Nkadimeng (ANC) asked if the R25m which had been earmarked for infrastructure and then diverted for short term relief, had been reinvested.

Dr Tom replied that the R25m had been paid to the Department.

Mr M Mbatha (EFF) asked what amount had been put forward for special assistance to the University, as one person’s struggle should not be another’s gain. How much had the 2014 allocation been? What had been the highlights, as well as the wastage, as the Committee was interested in the wastage?

Dr Tom replied that the UFH had not gained much, though it had made its pledges, and there were no other universities that had gained more than the UFH. Some of the students had paid. On wastage, contract management, asset management, and the issue of management of tenders were some of the areas that were being dealt with. There had been instances where some employees had been seen to be double dealing -- doing contracts on one side, and university jobs on the other. These issues were being clarified. The management report’s forecast process had been going through stages. The final report would be tabled this week with the management committee.

Mr Mbatha said that in 2014, when the Committee had met with the UFH management structure, there had been a person who had addressed the Committee. Where was that person now?

 Dr Tom said the person (Dr Gaffar) had been charged with misconduct by UFH. He had gone through a disciplinary process and had decided not to continue with the university.

Dr B Bozzoli (DA) said referred to student accommodation, and said the Committee had carried out an oversight visit in East London, where it had been discovered that each student was being charged R24 000 per annum for accommodation, and there were eight people to a room. R24 000 a year was a lot of money for one room with eight people. This was absolutely shocking. Even more shocking was the situation in Alice, where students slept in dining halls, and cardboard was used as borders between students. There was no water or desks, and toilets and bathrooms had no locks. How could this be justified, and what was the university doing about this?

Dr Tom replied that he would like to ask Dr Bozzoli to give the UFH a list of those residences. Those were dining halls, and not residences. The students requested this because of the lack of space. These were areas condemned for use, but students used them out of desperation because they did not have to pay for them. Now the UFH had removed those spaces.

Dr Bozzoli asked what the long term financial stability of the UFH -- was it was financially stable and dependent on itself? The long-term future of this model of financing seemed to be unsustainable.

Dr Tom replied that Dr Bozzoli had been to the university previously. There were three sources of funding for universities -- fees, subsidies and income. He did not know how Dr Bozzoli came to the conclusion that UFH had a source of funding that was insufficient for its sustenance. All historically disadvantaged institutions had a low base of students who could pay for themselves. Was Dr Bozzoli now suggesting that students who could not pay for themselves should not be admitted to the university? The debt would still be owed, not to the university, but to NSFAS. This was an issue that had to be addressed by the country, and not by one university. There had been a recommendation to the Commission that students should not be made to pay in cash, but in kind.

Mr E Siwela (ANC) asked what the reason for the surplus in 2015 had been. Was it because of prudent financial management, or because of the funding that had recently been given as a bailout by the Department?

Mr Nielesh Ravgee, CFO: UFH, replied that expenditure had remained pretty much the same in 2014 and 2015. The big difference had been in the total income for both years.

Dr Bozzoli said what percentage of students paid tuition and other fees. What would the deficit be if the additional government subsidy did not come through? She was in agreement with Dr Tom on the university subsidy being too low, as it could not carry on unless a serious engagement was made about increasing the subsidy permanently.

Dr Tom replied that the comments were well taken. The presentation had talked about certainty and predictability in the funding. The UFH was going forward. There was a report on what should be done to change the funding framework. Some aspects of it had been dealt with by the Department.

Mr Cassim said the Committee would like to have feedback as regards Dr Tom’s submission, as it was a serious matter which would help to give the students a fair deal. Why were no student leaders present who could to speak on behalf of the students to the Committee?

Dr Tom replied that the process had been dealt with, and there were some results that had been finalised. There should be no conflict of party issues with that of the Committee. He had sat with the Committee Member, Mr Cassim, and DA Leader Maimane, to discuss the issue. There would be a feedback, but the matter was not finished. The student leaders were not present because UFH had been given the categories of people who should be present, and they had not been included.

Mr Cassim asked if there had been criminal charges against Dr Gaffar, and if there had been a follow up.  

Dr Tom replied that there had been no criminal charges against the former employee.

Mr Cassim said the Committee would like to look at the report of the finance committee. This was now the end of 2016. What was delaying the process, and why could it not be made public? It would be possible for the UFH to buy a building with all the money paid for the lease agreement.

Dr Tom replied that the report had not been delayed, as it was different in nature. It had not been audited, and was ongoing. Council had been briefed, and UFH was working to address the issues

Mr Mbatha said when forensic and management reports were completed, the management guideline was that the report was within the oversight structure. It could no longer be a management document alone, as the intentions of the report must be achieved. What had been said in June and to date had not been finalised was, in fact, criminal. Why had the Council not received the report when it had met four times since then? The faster issues were resolved, the better. There was a growing tendency to make UFH a no-go area for certain organisations. The UFH belonged to the country, whether one was there or not. How on earth, within an existing democracy, had the University gone to autocracy and a lack of freedom of association?

Dr Tom replied that an oversight committee of the Council had been tasked with dealing with the report before going to Council. It was not just management. No university should be a no-go area or partisan, and UFH did not have that culture. It was open, and there was no discrimination.

Ms Mchunu said the accommodation had been meant for two students per room, and there was a current situation of eight students in a room. During her stay at the University, it had been the same situation. It was called “squatting.” Students paid the owner of the room for sleeping space. Though this was not the fault of the University, there should be a follow up to bring the practice to an end.

Dr Tom replied that in Alice there were 7 000 students. There were residences in villages and towns outside the campus. Squatting was still taking place. The Dean of Students dealt with this, but it was difficult to monitor every student.

Mr C Kekana (ANC) thanked the university for its response, and said he hoped it would be on the better side of history. Would the Department consider extending the period of submission of claims in view of the fact that the university was finding it difficult to facilitate the claims in time for NSFAS?

An official from the Department replied that all universities had to submit all their different categories of funding by 16 September 2016, and had to indicate how much of the funding they would utilise by 31 December so that the unutilised funds could be distributed to other institutions. The DHET would not go to the National Treasury to say it had unutilised funding.

University of Zululand: briefing

Mr Cyril Gamede, Chairman, University of Zululand (Unizulu), said the Vice-Chancellor (VC), Prof Xoliswa Mtose, was on an oversea trip which had been arranged before the meeting was scheduled, and his absence was not in any way intended to undermine the Committee. Prof Neil Garrod, Deputy Vice-Chancellor: Institutional Support, University of Zululand, would stand in for the VC.

He was glad to say that the University was not only out of the intensive care unit (ICU), but also the hospital. There had been certain implementation issues which could not happen when the University was under administration. When the first Council had been constituted, the university had begun dealing with these issues. Employees who had been involved in misconduct had been through disciplinary processes. Elections had been free and fair, as the students involved in violence had faced the full wrath of the law. The Council was in control, and management was discharging its duties.                                  

Prof Garrod said the operational developments in the University of Zululand had included a review and modification of senior management and faculty structures. The Student Representative Council had been constituted in 2015 following elections and unsuccessful legal challenges. Issues involving on-campus housing for the VC and staff, and abuses, were being resolved. The mid-year performance report for 2016 showed income had reached 86% of the annual total, while expenditure was at 42%. Vacancies were being addressed aggressively via a recruitment and retention policy. Capital expenditure was at 14% of the R304m budget. Current cash/investments of R1.4bn reflected early receipt of revenue and delayed expenditure. There had also been delayed spending on specifically funded projects (R500m).

The DHET had allocated R400m for infrastructure funding in 2013. Tenders had been awarded, but the procurement process had been challenged. An engineer who had taken up his post on 1 September 2016, would lead and drive the tender, procurement and implementation process. A new 250-bed residence was under construction. The completion date was December 2016.

In the 2014 academic year, the student success rate had been 84%, and 85% in 2015. The vacancy rate of 23.3% was mainly in the professional services divisions, and there was a focus on filling the posts to deliver teaching and learning activities. The 2014 forensic audit had discovered fraudulent events which related to infrastructure development and the theft of R11.5 million. This had resulted in two senior management resignations as well as two senior management settlements.

Preparations for the 2017 academic year included the Richards Bay campus development of student residences and engineering/maritime programmes. Enrolment targets had been set until 2019, as well as arrangements for SRC elections.

Discussion.

Mr Siwela asked how much the university had paid the government for the infrastructural development plan, and what the legal costs incurred had been. Regarding the ongoing strike, where the National Education, Health and Allied Workers Union (NEHAWU) was involved, the university had said that NEHAWU was fighting for people who were not employees of the University, but people who were working for co-operatives. What was NEHAWU’s interest in the co-operatives?Prof Garrod replied that tenders had been awarded. The court agreement had been that the tender should be set aside, and the work that had been completed should be paid for by the university. This had been done, and there had been no actual cost to the university. The NEHAWU agreement had been to set up legal entities so that there was a relationship between such entities and the university, but this had never really materialised as there were issues of inappropriate practices.

Mr Gamede added that in many areas, co-operatives were not necessarily the most efficient way of delivering services, as the nature of co-operatives was to fight about things.

Ms Nkadibeng said there had been serious challenges in the Faculty of Education, where there were many vacancies. How had the university managed to resolve this situation?

Prof Garrod replied that action had been taken over the vacancies, and these were having a positive impact.

Mr Mbatha said Unizulu and UFH should lock themselves into housing proposals that took care of the accommodation challenges.

Ms Mchunu said the Portfolio Committee wanted to see changes in performance, and was not on a fault finding mission. She commended Unizulu on steps taken as regards accommodation. Although the Committee had accepted the apology from the Vice-Chancellor, it would have been better if she were present, as most of the issues that were problematic involved management. The allegations of selling certificates had been there for a long time. There was a need to see action being taking. Had there been cases where certificates had been withdrawn, since they had been awarded fraudulently? Identifying such cases alone was not enough, as action had to be taken to ensure it never happened again.

Prof Garrod replied that the university had not withdrawn qualifications because of fraudulent certificates, but had done so in cases of falsification of results by students. The university was working on how it could go forward from there.

Ms Mchunu said what the enrolment rate in the faculties of agriculture and science was, as these were critical skills. It had to be ensured that there were people who could teach in these fields. She was happy the university had been able to identify its challenges

Mr Cassim said Unizulu was one of those that had very low fees paid. What were the requirements for the sustainability of the University?

Prof Garrod replied that operationally, Unizulu was fine, but not fantastic. What was really needed was capital expenditure. It needed R4.5b. It did not need operational support, but backlog investment support.

Mr Cassim asked how many students would be unfunded, based on the national margin of R72 000 in fees put forward, and what model the university would propose. Was there a national data base for all those who had graduated from the university with certificates, and did employers know they could check on this to avoid fraud? Was the university’s administrator in any way involved in the delayed expenditure in specifically funded projects and if not, how could this be avoided in future administrations?

Dr Bozzoli congratulated the University on the appointment of three new executives. The university had been a bit quiet on whether the administrator had been involved in delayed expenditure and delayed spending on specifically funded projects. She had thought the delay was connected to the NEHAWU strike. Had the strikes been deliberately encouraged to stifle the new administration?

Prof Garrod replied that there were many strikes at the moment, because the University was addressing issues which had become institutional cultures and needed to be changed.

Mr Gamede added that one of the issues he had seen in the NEHAWU issue at Unizulu was a lack of maturity, as there was little understanding of certain consequences.

Dr Bozzoli asked what the Vice-Chancellor was doing overseas? At this critical time at the university, all hands should be on deck.

Mr Gamede replied that the visit was important to deal with internal issues and to enhance Unizulu, and it was unfortunate that it coincided with the current meeting. The essence of leadership was that the next level should be able to tackle the issues.

The Chairperson thanked the universities for the presentations. Next week there would be more time to debate about the presentations.

The minutes of the previous meeting were adopted.

The meeting was adjourned.

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