Release of Fees Commission Report; Committee Reports on DHET Quarter 4 & 1 performance and Gauteng, UWC & NSFAS oversight

Higher Education, Science and Technology

01 November 2017
Chairperson: Ms C September (ANC)
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Meeting Summary

The Committee considered outstanding reports and Committee minutes.

The Committee Report on the National Student Financial Aid Scheme was adopted.
The Draft Report on the Sector Education and Training Authorities was adopted.
The Committee Report on Oversight visit to Gauteng was adopted
The Committee Report on DHET Quarter 4 Performance was adopted.
The Committee Report on DHET Quarter 1 Performance was adopted.

The Portfolio Committee discussed outstanding reports for the four institutions that presented before the Committee, namely the University of Zululand, Mangosuthu University of Technology, Cape Peninsula University of Technology as well as the University of the Western Cape.

The Committee felt that the institutions which needed to account for the mishaps and flaws it had in its administration and audits, should have been invited before the Committee to explain the possible solutions to issues and account for all mishaps. The Committee found that the University of Zululand had a fraudulent deal which cost R11.5 million. Members were pleased that this money was recovered, however still questioned how R2 million could have been claimed back from insurance even though the entire dealing was a fraudulent one. The Committee felt that there were many loopholes and the University of Zululand would need to be revisited again.

On the Mangosuthu University of Technology, the Committee felt that there were many problematic areas in that it had no administrative report to hand to the Committee. The University’s appointed administrator apparently resigned without submitting the administrative report to the University. The Committee found that this University never handed in the various documents and paperwork as requested from it and felt that it also had to sit before the Committee and thoroughly explain itself.

The Cape Peninsula University of Technology was found by the Committee to be an institution which seemed to carry a lot of instability in management. The issues that it had two years ago regarding the relationship between management and the students, were the same issues that it was faced with to date. The Cape University of Technology’s recommendations were not resolved, and the weakness of management was noted.   

Walter Sisulu University was working with third parties such as the Intellimali scheme to help with the distribution of funds. However, the Committee agreed that the institution was in no position to have a third party as it was a huge matter of concern and should be discouraged and discontinued.

The Committee considered the letter which was sent to the Chairperson by Ms B Bozzoli (DA), wherein she expressed her huge concern for the Fee Commission report that was not yet released by the President. The entire Committee agreed that the report might be released as soon as possible, however the Minister, Professor Hlengiwe Mkhize, was still processing the report. The Portfolio Committee expressed concern about the potential consequences of delaying the release of the Higher Fees Commission report and resolved to officially write to Minister Mkhize to request its release. Ms Bozzoli was disappointed that the ANC Members of the Committee used its majority to block the proposal to summons President Zuma to release the report.

The Chairperson then stated that while the Committee accepted that President Zuma needed to apply his mind to the report, and engage with the relevant ministers, it would have been ideal if this happened expeditiously.

The Committee adopted six sets of outstanding minutes.

Meeting report

Opening remarks
The Chairperson welcomed the Committee at large as well as the new Member to the committee, Mr Jackson.  

The Chairperson informed the Committee of a letter that was sent to her office from Ms B Bozzoli (DA) and that she would share it amongst the Committee Members.

University of Western Cape and National Student Financial Aid Scheme (NSFAS)
Mr C Kekana (ANC) asked if the reports would be considered page by page.

The Chairperson said that as the reports were circulated to Committee Members beforehand, she trusted that Members would either just be in agreement or disagreement with the report instead of going page by page.

The report was adopted.

Draft report on the Sector Education and Training Authorities (SETA)
The Chairperson said there were a string of Annual Performance Plans (APPs) that were dealt with in the Sector Education and Training Authorities (SETA) report.

The report was adopted.

Committee Report on Oversight visit to Gauteng
It was noted that Ms Bozzoli’s name was omitted from those present.

The reported was adopted with that amendment.

Committee Report on DHET Quarter 4 Performance
The report was adopted.

Committee Report on DHET Quarter 1 Performance
Ms Bozzoli said those recommendations found in report were to discipline an employee of the Department who was still employed, and the Department indicated that it would sort out the matter. She asked for follow up on that situation.

The Chairperson said the Department would be coming in with its second quarter report next week and that it sent a response regarding that matter which would be presented to the Committee at that time.  
Mr M Mbatha(EFF) suggest that in future the Chairperson should ensure that perhaps each item was considered and discussed.

The Chairperson explained that after the Committee adopted the report, it then went to the National Assembly for approval or rejection. Once National Assembly approved the report, the Speaker then wrote to the President.  

The report was adopted.

University of Zululand Report
Ms Bozzoli spoke of the University of Zululand and its response to the R11.5 million which was transferred to a fraudulent account, that it was adequately explained, and the right people received blame for that. Approximately R9 million was recovered, as well as R2 million was recovered from insurance.

Ms Bozzoli felt good about the fact that it was recovered, however she was worried about the amount of people who were found involved in that crime. There were a whole lot of settlements with people, which came to R3.2 million and there were copies of the various settlements which were recovered. She did not understand how settlements were made with people who were involved in fraud. She wanted to know what happened to the main fraudster and if legal action took place.

Mr Mbatha agreed with Ms Bozzoli, however he questioned how R2 million went missing and was recovered from insurance. He asked how that occurred when this was based on fraud and crimes. There was a missing link in the entire situation.

Mr Kekana explained how insurance operated in that if whatever you have insured gets damaged, the insurance would compensate and reimburse a certain amount to the asset that was lost and insured. He believed that was what occurred in the case of University of Zululand and believed that the amount was retrieved, meaning that there might have been an amount of money which was insured and that the report stated that was the reason they recovered that amount of money.

Mr A Van der Westhuizen (DA) said that to his knowledge, should someone defraud you on something you have insured, the insurance would ensure that the amount was returned to you, but as the client you have now ceded the right to recover the money from whoever the guilty party was. You lose your right to act and give it to the insurer.

Mr Mbatha responded that he understood the laws of insurance, however his point was that should one close the case, then the insurer should give you a report back of how they retrieved the money through a process where fraud took place; more especially if you are a public organisation. The intention was to make sure that even in your balance sheet, one may be able to close the report officially. Fraud did not mean that you claimed and the matter was handed to the police without receiving any kind of feedback.

He said that the University of Johannesburg had two executives with fraud cases worth R25 million, so the University could claim. However, what happened to the criminals in such cases? That was not how public organisations were run. There was some level of accountability when it came to how the situation started and ended.

The Chairperson asked Members to turn to page 8. She made certain recommendations to the University of Zululand and argued the point that regarding the R11 million that went missing, the issue still did not end and that there were certain issues that needed to be answered. It was not about going to the insurer; however, it was about ensuring that money that was appropriated could be accounted for. The real faces of who actually transferred the money should be seen and the fact that it was not was a huge matter of concern. If an error was made or there was intent behind the error, then the Committee should know about that.

The recommendations should be made in regard to the instability of the University, and that teaching and learning should be the main priority as well as further updates should be made by the audit committee in relation to the disappearance of the money.

Ms Bozolli said that after reading the University of Zululand report, there were about eight companies where fraudulent account numbers were entered by the fraudsters and they did not name the account holders. She felt the Committee should know what exactly happened to them and what consequences they received. The only information received was of those who were peripherally involved and not the main fraudsters. Were the main fraudsters disciplined and did they face their consequences? She asked that the point of consequence management in the report should be a lot firmer and explain the settlement.

Mr Mbatha said the settlements had to be legally acceptable which then meant, one could not just settle because of a meeting, however should settlement should happen because of losing a case. Nobody could settle without protocol and they should ensure that those protocols were followed, and all questions were answered as to why the settlements were so high and who would be accounted for.

Ms Bozolli spoke to the third and fourth bullet and asked that the recommendations for those bullets were presented on. The first being the recommendations of the previous administrator, whom the Committee understood was not incriminated. She asked that a report be sent back about the second one, being the allegations against the Vice Chancellor, and a report from the council was required on those investigations and what was found. She asked that the University report back to the Committee within six months.

Mr Mbatha raised the point of fear of abusing the constitution of the Student Representative Council (SRC) to the detriment of the legally elected SRC because the fear that was instilled was real. He continued to say that the Vice Chancellor even went to assist the SRC with the High Court order which could have amounted to R30 000. This was wrong, and it should be made sure that generationally, it did not occur again.

Ms S Mchunu (ANC) agreed and asked that in relation to the fear in the SRC, that Mr Mbatha give a few suggestions as to what solutions could be implemented as she did not see how that could be a recommendation.

Mr Kekana explained that when oversight was done, they checked what was legal and constitutional and should anything be violated in those areas, that was when the Committee challenged. However, he did not agree with Mr Mbatha’s point as one which had a strong standing as it was not constitutionally or legally violated.

Ms Bozzoli recommended that the Committee request the University to provide a copy of the SRC constitution and to clarify whether the appointment of an SRC administrator was in accordance with the SRC constitution.

The Chairperson recommended that the Higher Education Act had to be tightened up as it related to the power in the institutions to bring about their own regulations that they had.

Mangosuthu University of Technology (MUT)
Mr Mbatha said that the University never gave back the reports that the Committee requested from them.

Ms Bozzoli was concerned about the report sent by MUT which stated that the University never received the administrators report when the administrator left and therefore could not hand it in to the Committee. She found this extremely problematic as that was where the functions of the universities operated and recommendations for possible solutions for the following weeks ahead could be drawn from. The Department should be asked why they never received that report and ask the University to get the report.

Cape Peninsular University of Technology (CPUT)
Mr Mbatha stated that the CPUT report seemed fine, however he suspected that there was a decline in the management and counsel of the University. He asked how weak management had to be if they always felt so challenged by the students as there were never any coherent proposals and agreements.

The Chairperson felt that the absence of a Vice Chancellor was also part of the issues in CPUT and its management. CPUT recommendations were not resolved and the weakness of management was noted and CPUT. CPUT had to be visited gain. 

Walter Sisulu University and NSFAS
Mr Mbatha (EFF) said a lot of things were not understood between Walter Sisulu as well as the
third party involved with the University, Intellimali. The fact that the private company ran a benefit structure outside of the University portfolio benefits and was the only subsidy that knew what was going on in that portfolio was intriguing.

Mr Mbatha felt that third parties such as Intellimali should be discouraged as they were a cause for concern. Third parties did not work when the institution had a weak management structure, and would work better in institutions such as UCT where the management structure was strong enough to accommodate a third party. He suggested that the Committee should advise the Department to be worried about the third parties, in fact that the entire arrangement of third parties had to be discouraged. Third parties could not be put in when the situation was volatile in the university.

Ms Bozzoli recommended that firms such as Intellimali should not be used. They were there to intervene between NSFAS and the students and to create issues, and that was unacceptable.

Mr Kekana believed that the internal control of the University should be strengthened as well as its capacity to deal with matters of NSFAS. He agreed with his colleagues in that, third parties were not needed and that capacities should be built in Universities or even NSFAS for funds to be dispersed.

The Chairperson said the outcomes of the investigation should be reported to the Committee and the Department should come back and report.

Mr Van der Westhuizen, in defence of third parties, said the University was still in hot water for the releasing of funds to a student a few months ago and they then brought in Intellimali to intervene. Intellimali had a great solution and NSFAS could learn from some of Intellimali’s doings.

Ms Mchunu disagreed with Mr Van der Westhuizen and the fact that Intellimali helped with the R14 million that went missing, because as the entity itself, it could not answer how a mistake such as that occurred. Intellimali employees were people that used to work for NSFAS. She suggested that NSFAS should build capacity.

The Chairperson announced that Ms Nkadimeng would be leaving the Committee as she received a new deployment, and wished her well on her departure.

Mr Mbatha was also leaving the Committee.

Committee business
Correspondence from Ms Bozzoli
The letter Ms Bozzoli addressed to the Chairperson spoke to the concern that was lingering with regard to the Fee Commission report which was not released by the President, who was holding onto it for nearly two months. She was concerned about the potential consequences of delays in releasing the Higher Fees Commission report.

Ms Bozzoli believed that the reason the President was delaying the report was because once he released it later, it was likely that the students would have already completed the academic year and would therefore not be able to protest.

She stated how immensely the pressure grew and that the report had to be released. Ms Bozzoli wrote to the Chairperson asking her to subpoena the report to this Committee in the public interest. The delay reached a critical point where the Committee could not wait any longer. Students around the country were protesting and fees were not set for next year. No agreements were made, the report was still being delayed in terms of the release date and there were now rumours that publication houses such as Citi Press actually managed to get hold of the Fees Commission report which continued adding uncertainty and anxiety to the public and therefore Ms Bozzoli suggested that the Committee should subpoena the report in the public interest.

Ms Mchunu agreed that the report was in the public interest. However, she felt that Ms Bozzoli overstepped her boundaries by writing in her own personal capacity to the Chairperson and not consulting with the Members first. Ms Mchunu did not feel it necessary to subpoena the report as they did not receive any kind of non-adherence. She suggested that certain things should be done before subpoenaing the report.

Mr Mbatha said that it was unfortunate that there was no cut and paste way where Presidents reports came to Parliament, it was always determined by the President and the President only. Most times, many felt that these took too long as they kept retouching and postponing the report.

Mr Mbatha wished the Committee well in 2018 and felt that most time would be spent on the oversight and the students would be striking the beginning of the year, and that even though the strikes were not liked, they were normally engineered by expectations.

Mr Van der Westhuizen agreed that the report should have been made public a while ago and feared that the protesting might spill over to the next academic year. On the reported leaks of the Fees Commission report to the City Press, the only way to end all those conversations, was for the report to be released.

Mr Kekana felt the omission of the Minister was also stirring up anxiety on this matter and that the Minister, having just come into power, seemed enthusiastic about this issue but has now gone quiet. All the Members should come together and bring their heads together before sending the request for the Fees Commission report to be released. The Minister should be informed first, and find out about the report before proceeding to the President.  

Mr M Wolmarans (ANC) said that stakeholders and departments should make sure that when the report reached the public, all issues should be extensively addressed. The report should be requested through the Minister. Going directly to the President would be overstepping boundaries and skipping certain middlemen.

Ms Bozolli thanked the Committee for supporting her letter, however she had a few concerns and responses, the first being the fact that the Committee wanted to wait for the President to make his judgement, that she stated that that ship had sailed as the report was already reportedly in the hands of the City Press and it was already in the hands of the public which was embarrassing to this Committee. There could not be any more delays.

Ms Bozzoli said that the President and his allies were not considering the interests of the public and the damage that holding back this report was causing.  Parliament was part of the hierarchy of control embedded in government itself, rather than a separate and independent body to which the President and public representatives were fully answerable. The leaks were reporting all sorts of allegations in the report, causing more uneasiness and anxiety because of the ambiguity in the unreleased report in the public. The matter should be demanded. 

The Chairperson understood and agreed with what Ms Bozolli said about the report, however as a Committee, they could not subpoena the President to get back the report. Certain people who were appointed for certain duties should be consulted with first before the President was contacted. The common denominator was that this matter was now a public matter and it gave the Committee a bad image. With regard to the leaking of the Fees Commission report, she could not argue whether it was true or not. She agreed that while the Committee accepted that President Zuma needed to apply his mind to the report, and engage with the relevant ministers, it would be ideal if this happened expeditiously.

The Chairperson thanked Members and said there were no disagreements in Members wanting the report, however the disagreements were where the request should go to. Most Members believed that it should be requested through the Minister first.

Adoption of Minutes
13 September 2017
Ms Bozzoli questioned a point in the report which was titled “Key decisions” and said not all Members agreed with that point. She felt there was already a lot of skills planning and that even the Department was dubious about that it. She was not sure if that recommendation stood.

Mr Mchunu said the Committee agreed that it was an ideal situation that this point may be considered. In as much as these kinds of skill planning sectors were available, it was not helpful to the Committee and that perhaps it should not be implemented.

Ms Bozzoli wondered if the National Skills Authority would find that as an objection as that was not their job and that the Committee might be clashing with an existing major government body which already did skills for the entire country.

The Chairperson responded that the Committee was not doing that and instead, the Committee was helping a government body focus on matters worth being focussed on.

Minutes of Committee meetings held on 13 September, 4 October, 5 October, 11 October, 13 October, and 18 October 2017, were all adopted.

Ms Bozzoli felt that going through the minutes was a waste of time and instead, one of the colleges which was under the firing line could have attended the meeting and shared with the Committee the various solutions they may have with their problems, such as their entity or even their audit findings. She asked when the Committee would actually begin with the action.

The Chairperson stated that a decision should first be taken, hence the adoption of minutes was important, and that action could not be implemented with the absence of adoption of minutes.

Ms Bozzoli asked when the Committee would raise the questions and concerns they had with the various academic institutions and when that meeting would be taking place.

The Chairperson said she remembered the Committee agreeing on bringing different entities before the Committee when they dealt with the second quarterly report, and where these issues were discussed it would then be raised and brought forth.

Ms Bozzoli stated that Technical and Vocational Education and Training (TVET) colleges asked for clarification on when these colleges would come and sit and discuss their flaws with the Committee.

The Chairperson agreed and said that was in the Budget Review and Recommendations Report (BRRR) report.

Ms Bozzoli felt that the Committee did not need to wait for the Department to engage with the entities and that the Committee could do it independently.
The Chairperson reiterated that the Department as well as the TVET colleges that had issues, would all come together with the second quarterly meeting.

Mr Kekana suggested that the TVET colleges should come and that they should be dealt with.

Mr Mbatha asked what the content said according to the Content Advisors, as he felt that Committee Members’ choice was deliberated and spoken of in advance on the bigger and more serious issues and asked that perhaps those solutions were spoken of beforehand.

The Chairperson agreed to note the points that all Committee Members raised.
The Chairperson spoke of the meeting which took place on 13 October with all four institutions included.

The 13 October report was adopted.

The meeting was adjourned.


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