Review of Department of Higher Education & Training's Annual Performance Plan: Auditor-General briefing

Higher Education, Science and Innovation

15 March 2017
Chairperson: Ms C September (ANC)
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Meeting Summary

The Office of the Auditor General South Africa provided insight on the 2017/18 draft Annual Performance Plans of the Department and its public entities. The review focused on the SMART criteria and whether the performance targets set by the Department and its entities met the criteria.

The AGSA noted that three of the outcome indicators under programme 4 had zero targets as a result of the unavailability of funding- as reported in the APP. During the review process, AGSA had noted that there were certain indicators that the DHET claimed that it needed to achieve. However, there were no targets set for them in the APP. This meant that the DHET would not be able to achieve those targets as there was also no budget allocated to them. Public entities: indicators not well defined and not verifiable. Findings have been discussed with entities. The completion of the learnerships would not be included in the APP of the Safety and Security Sector Education and Training Authority (SASSETA) but would be included in the DHET’s.

Some of the targets set by the entities were not specific. Forty six percent of Manufacturing, Engineering and Related Services SETA’s (MERSETA’s) and 18% of Council for Higher Education (CHE)’s targets were not specific. This was because although the entities had identified skills which were scarce and in need of cultivation, there was no link between the APP targets and the scarce skills. Furthermore, CHE had not specified because they simply did not produce the required documents.

The targets set by the entities were also not measurable. For instance, it was difficult to measure any of SASSETA’s targets as their documentation had been referring to the prior financial year and not March 2018- this made it particularly difficult to collect data. Subsequently, the numerators and denominators for targets were not easily determinable. The difficulties highlighted to entities have not been resubmitted as revised APPs.

Members said it seemed that the pricing of SASSETA had not yielded positive results; was this a result of a lack of capacity or the refusal of the SETAs to change, as no effort had been made to correct the significant findings of the previous year. Members raised concern over the fact that three outcome indicators under programme 4, Technical and Vocational Education and Training had no targets. Was this a normal situation and why was it important to capture targets which did not exist? A Member questioned how the Committee could measure the contents of the report to ensure that it was relevant in itself. The most important achievement would have been ensuring that the training was effective, more people were trained, and that the training was relevant and cost effective. Very few of the APP’s targets addressed this core business.

The Committee was not satisfied with the briefing as there were many gaps in the information provided. An annexure that the Office of the Auditor-General allegedly sent to the Committee Secretary had not been printed for the meeting, which led to the content in the meeting being very thin and therefore discussion also being kept at a minimum.  

Meeting report

The Chairperson apologised on behalf of all the members who would either be late or unable to make the meeting as the weather had caused a car accident and therefore a congestion in traffic. The AGSA also apologised for being late.

Briefing by the Auditor-General South Africa (AGSA).
The purpose of the briefing was to provide audit insights on the interim review of the 2017-18 draft Annual Performance Plans (APPs) of the Department of Higher Education and Training (DHET) and its public entities.

There was a number of key considerations made by AGSA when they reviewed the APPs:

  • Their alignment with the MTSF

  • Whether there was a logical link between objectives, indicators and targets

  • Whether the APP included all programme performance indicators and whether those indicators were well defined, verifiable and relevant

  • Whether there were quarterly targets made for indicators which needed to be reported on quarterly

  • Whether there was a clear and reliable baseline information for the targets

  • Whether the alignment between the budget and APP was evident and clear?

  • Whether each performance target was specific, measurable and time bound

In the Review process, the overall planning of the DHET and other entities involved was assessed. Draft APPs were reviewed and AGSA focused on the same programmes audited in 2016-17. Previous errors had been addressed and corrected, therefore the presentation was about that which was found wrong. The findings of the review would not form part of the audit report as they related to the 2017-18 APP.

For the reviewing process, AGSA had set up a SMART criteria in order to determine whether the performance targets were viable or not.

Specific- This meant that the nature and required level of performance could be clearly identified (Previously, AGSA found that after reviewing the APPs, the AG would discover that its definitions of the indicator differed from those of the DHET’s. Furthermore, the DHET and entities needed to assess whether they had enough capacity to execute all plans.)

Measurable- The required performance could be measured

Achievable- This meant to measure whether the performance targets were realistic considering the capacity (or lack thereof).

Relevant- The performance required was related to the achievement of the overall goal

Time Bound- The deadline for the delivery had to be specified (as time targets tend to overlap and therefore yearly milestones needed to be set and achieved in order to keep track)

After the review process, AGSA noted that a select number of programmes did not have significant findings:

  • Programme 2- Planning, policy and strategy

  • Programme 3- University education

  • Programme 4- Technical and vocational education and training

  • Programme 5- Skills development

  • Programme 6- Community education and training

AGSA also noted that three of the outcome indicators under programme 4 had zero targets as a result of the unavailability of funding- as reported in the APP.

During the review process, AGSA had noted that there were certain indicators that the DHET claimed that it needed to achieve. However, there were no targets set for them in the APP. This meant that the DHET would not be able to achieve those targets as there was also no budget allocated to them. Public entities: indicators not well defined and not verifiable. Findings have been discussed with entities. The completion of the learnerships would not be included in the APP of the Safety and Security Sector Education and Training Authority (SASSETA) but would be included in the DHET’s.

Some of the targets set by the entities were not specific. Forty six percent of Manufacturing, Engineering and Related Services SETA’s (MERSETA’s) and 18% of Council for Higher Education (CHE)’s targets were not specific. This was because although the entities had identified skills which were scarce and in need of cultivation, there was no link between the APP targets and the scarce skills. Furthermore, CHE had not specified because they simply did not produce the required documents.

The targets set by the entities were also not measurable. For instance, it was difficult to measure any of SASSETA’s targets as their documentation had been referring to the prior financial year and not March 2018- this made it particularly difficult to collect data. Subsequently, the numerators and denominators for targets were not easily determinable.

The difficulties highlighted to entities have not been resubmitted as revised APPs.

Discussion
Mr E Siwela (ANC) noted that the presentation was rushed. The budget of the programme had increased by 6% but some indicators were reported to have lacked funding. It seemed that the pricing of SASSETA had not yielded positive results. Was this a result of a lack of capacity or the refusal of the SETAs to change, as no effort had been made to correct the significant findings of the previous year.

Ms J Kilian (ANC) asked for the annexure that AGSA stated, as it had not been distributed in the meeting. The Committee needed to be provided with further detail in order to sharpen its pencils. She raised concern over the fact that three outcome indicators under programme 4, Technical and Vocational Education and Training (TVET) had no targets. Was this a normal situation and why was it important to capture targets which did not exist? The document was only going to work if the Committee received further detail.

Mr A van der Westhuizen (DA) asked for clarity on the subject of the “achievable”. The report did not specify the aspirational targets of the DHET, which was something he would have liked to have seen. He also questioned how the Committee could measure the contents of the report to ensure that it was relevant in itself. The most important achievement would have been ensuring that the training was effective, more people were trained, and that the training was relevant and cost effective. Very few of the APP’s targets addressed this core business.

AGSA’S Response
The DHET would be better positioned to shed light on any questions regarding programme 4 as it was its forte and therefore all questions regarding programme 4 should be deferred to the meeting that the Committee would have with the DHET.

With SASSETA and other SETAS under administration, AGSA had witnessed over the years that there was a lack of skills capacity. Coupled with that, the oversight would also not happen as often as it needed to. Whenever AGSA identifies the root causes of an entity not having specific targets, they realise that monitoring and evaluation is a consistent failure in these SETAs. There should be regular record keeping and performance reports that are complete and credible. Furthermore, in SETAs under administration, government structures are also almost always never what they need to be.

The annexure to the presentation was submitted with the presentation.

The Chairperson interjected and asked for it to be sent again as the Committee did not receive it.

One of the recommendations made to the Committee was that when the Department and the entities present their quarterly reports to the Committee, the internal audit and the chairperson of the audit committee need to be invited. These would ensure that reports that go to Parliament are complete and credible. These should be submitted to the audit committee before circulation to ensure that they went through completion and credibility tests. Historically, when departments and entities presented reports to the Committee, irregular expenditure would never be highlighted. However, the AG would find irregular expenditure, which means that the reports were not accurate. It would be ideal for the audit committee to be involved.

Mr Theuns Tredoux, CFO, DHET, addressed the query about CHE’s target. The increase in funding under programme 4 was merely inflationary adjustment. This was for personnel and other administrative costs. This increase therefore could not fund performance targets. It was important to include the outcome indicators under programme 4 even though they had no targets, due to the fact that the strategic plan originally included the targets. The targets are in the MTSF and therefore had to be included in the APP as indicators and targets in need of attention.

Ms Mchunu asked what the oversight role of the DHET was in cases where the service level agreement detailed what needed to be achieved but the entity itself moved away from what it had been contracted to do.

A Member said the Committee was informed that there would be no increases in TVET programmes as these are inflation adjustments. Why does it only happen in TVET budgets, what about other programmes?

Dr B Bozzoli (DA) categorised the Committee meeting as ‘wasteful expenditure’. The report was not substantive. The report could have been summarised on one page as there was a lot of detail missing. Furthermore, AGSA was being very critical of the DHET. The DHET had been given jobs to do but had received funding in order to do them, this did not appear in the APP. Furthermore, there was no sense that SETAs were institutions in trouble in the presentation.

Ms H Bucwa (DA Alternate) asked for clarity on programme 5. In the previous year it was implicated in irregular and wasteful expenditure and the same problem arose the following year, what measures were in place for monitoring and evaluation? She also enquired about what would occur in the interim between this financial year and the next one.

The Chairperson appreciated the effort made by AGSA to report to the portfolio Committee. It was not for AGSA to respond to the belief that the meeting had been fruitless. She encouraged the AG to continue and add other strategies which would tell the committee how to overcome the challenges. For instance, it did not make sense that funding was given to institutions such as universities but there could be no oversight of the institutions. Perhaps the portfolio Committee could borrow from similar exercises in different departments.

An official from AGSA responded that perhaps AGSA had done a poor job in explaining what the presentation entailed. The purpose was solely to share the findings in relation to the SMART principles relating to the 2017/18 financial year. AGSA was in the process of auditing the 2016/17 financial year and the performance would be touched on after that. The presentation was not about performance, it did not intend to highlight any challenges, that would come with the audit report.

Departments and entities produced quarterly reports. These are not necessarily reported to the audit committees. The recommendation from AGSA was that the reports be presented to the audit committee which would ensure that corrective steps are taken.

Dr Bozzoli said the response was not accurate. The comments given by AGSA were thin with very little detail.

Ms Kilian asked when the Portfolio Committee would receive the annexure to the presentation in order to give adequate background.

The Chairperson said some of the comments made by Members would not empower the AG. She advised Dr Bozzoli to say what the Committee would have liked to see instead of merely criticising so that AGSA would leave knowing what to correct.

Dr Bozzoli rebutted by saying that time, money and pain was spent for Members to arrive at the briefing and yet there were documents missing. Getting the annexure later would be helpful however, it should not have had to happen. Documents should be within the meeting as they need to be discussed.

Ms Kilian added to that the Committee could not make suggestions until it had seen the document.

The AGSA delegation said it was unfair to be accused of not sending the annexure as it had. The absence of the documents in the meeting was an administrative issue.

The Chairperson said that AGSA had heard the Members. The AG’s office needed to have a look on their side and see how to improve.

The AGSA delegation said that the Committee needed to ensure in future that all the documents would be present. Furthermore, there were a lot of findings that were corrected and the four findings are the only ones that remained. This was why the presentation was brief. AGSA apologised again for the inconveniences and stated that it would ensure that all documents were present in future

The Chairperson thanked the AG delegation for coming and allowed them to take leave.

Committee Business
Committee went over the minutes of meetings on 1 and 8 March and moved on.
Both were approved.

Other Matters

Mr Kekana questioned why there were three DA members instead of two. An alternate member was only supposed to be on board when a full member was not available. This would also be especially problematic if votes were required.

Ms Kilian supported this and encouraged Members to bear in mind that the Committee is made up of specific proportionality and to disrupt that would be unlawful.

Mr van der Westhuizen said his interpretation was that an alternate member does not have voting rights, not that members could not participate in committee meetings. If it were so, then the issue should be tested with legal advisory of Parliament.

Ms Bucwa directed the Committee towards rule 105 which said that any member of Parliament may engage in a portfolio committee of their interest. The only thing that the member can not do is vote.

Mr Siwela said nobody said that members can not participate; Mr Kekana did not imply this.

Ms Kilian explained that the rule was retained for small parties who could not be full members. It was for smaller parties to have representation. The whole basis of composition of committees was proportionality. A legal interpretation should be received. Members should not try to distort the principle of proportionality.

The Chairperson said that legal advice would be sought and then the Committee would reconvene.

Mr van der Westhuizen said that perhaps the Committee should engage the rules committee and not seek legal assistance.

Dr Bozzoli said she had attended other committee meetings and there had been no problems.

The Chairperson interjected and said that nobody had disputed that.

Ms Mchunu said Members of Parliament can participate in committees but proportionality was what was causing concern. She questioned the full participation of an alternate member. In the meetings that she attended, time would be given to guest members if there was any left but it was not the same as that of the members.

The Chairperson ended the meeting there as the points could lead to a lot of back and forth. The rules committee would be engaged on the matter.

The meeting was adjourned. 

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