NSFAS on 2018 state of readiness; DBE Quintile System; with Minister

NCOP Education and Recreation

29 November 2017
Chairperson: Ms L Zwane (ANC, KwaZulu-Natal)
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Meeting Summary

The Committee was briefed by the National Student Financial Aid Scheme (NSFAS) on its state of readiness for the 2018 academic year, and heard from the Department of Basic Education (DBE) how schools were ranked into quintiles based on socio-economic factors prevailing in the surrounding areas.

NSFAS reported that a total of 224 000 applications for 2018 had been completed, of which 118 466 were new applicants. There were 18 326 applications for technical and vocational education and training (TVET) colleges, and 174 658 applications for universities.

It conceded that the 2017 application process had had undesirable effects. There had been unstable system performances, such as no integration to third party data sources, RegHandler functionality, limited contact centre capacity, no productivity matrix in place for operations, lack of capacity, incorrect messaging to students, fragmented messaging to stakeholders and no collaboration with partners in the sectors. In the 2018 application process, there were system enhancements to increase capacity, NSFAS had effectively integrated with the DBE and the Department of Home Affairs, and had aligned across the board what the student-centred model meant and who played which role.

Its key initiatives included institutional engagements and contact centre initiatives. It had embarked on an exercise to assist institutions to close off 2017 and prepare for 2018. Training on the 2018 application forms had been completed. The contact centre’s iCloud-based telephony system would ensure that it could carry improved call volumes. It was increasing its capacity in Cape Town and establishing a disaster recovery site in Johannesburg. 50 contact centre agents would be recruited between now and the end of 2017. The new Student Single View 2017 provided a central tool where all interactions with students and learners could be reported. The system gave NSFAS contact centre agents and other departments access to this information in order to respond quickly and accurately to queries. The project was targeted to be completed by 31 December.

The Committee was concerned that NSFAS presentations were not matched by what was practically happening in institutions. Members said the progress statistics were misleading, as they focused only on the urban areas. They were also concerned about the low number of NSFAS applications for TVET colleges, compared to universities. They feared that uncertainty over the “Fees Must Fall” outcome would lead to student protest action at the start of the 2018 academic year.

The DBE explained how the quintile ranking worked. The DBE’s current funding system for schools was determined by the national targets for school allocations and the poverty ranking of the school. Poverty scores were assigned to schools by Provincial Education Departments (PEDs), and were based on the relative poverty of the community surrounding the school. The challenges regarding the current funding system were the adequacy of the school allocation and the ability of the current system to accurately rank some schools in terms of their relative poverty.

The Department bemoaned the fact that there was wastage in the poor communities – non-retrieval of textbooks, lights left on, taps left running – while parents at fee-paying schools played a supportive role. It also called for a reduction in the number of schools in some provinces, as there were schools with as few as 10 learners, and this had a negative effect on the Department’s finances. It would also prefer to consolidate the quintile system into just two categories – fee paying and non-fee paying schools.

Meeting report

NSFAS: Readiness for 2018

Mr Steven Zwane, Chief Executive Officer (CEO): National Student Financial Aid Scheme (NSFAS), referred to the undesirable effects of the 2017 application process, and said there had been unstable system performances, such as no integration to third party data sources, RegHandler functionality, limited contact centre capacity, no productivity matrix in place for operations, lack of capacity, incorrect messaging to students, fragmented messaging to stakeholders and no collaboration with partners in the sectors.

Looking at the desirable effects of the 2018 application process, there had been a system enhancement to increase capacity, effective integration with the Department of Education and Training (DHET) and the Department of Home Affairs (DHA), implementation of a goal alignment model to measure performance, controlled and managed communication services, activation of the university financial aid office (FAO) to enable the 2018 process from applications, alignment across the board on what a student centre model meant and who played which role, and finally a revised NSFAS value chain to enable a process-driven approach to delivery.

Mr Zwane said that the systems could handle huge volumes. The content server had increased capacity and improved functionality, there was an effective document queuing system, an identity document (ID) match solution for the application and evaluation, a third party data integration and an FAO to build an integration link for the capturing of applications. The core operations were the productivity matrix, which entailed capacity plans and staff members working eight-hours shift per day and four-hour shifts per night. To assist with regional application centres, NSFAS was working with the National Youth Development Agency (NYDA) offices and 16 NYDA branches in capturing applications, and they were planning to work with post offices to capture applications.

A total of 224 000 NSFAS applications for 2018 had been completed, of which 118 466 were new applicants. There were 18 326 applications for technical and vocational education and training (TVET) colleges, and 174 658 applications for universities. There were 118 128 female applicants and 74 854 male applicants. What was important to note that was that in Bloemfontein, 6 317 application forms were issued, but only 1 324 applications were received. In Durban, 10 175 application forms were issued, but only 6 115 applications were received. A grand total of 48 607 application forms were issued, and only 31 970 applications were received. There were 566 school visits, but none in Cape Town and Wynberg.

Regarding universities’ and TVET colleges’ readiness, NSFAS operates under the constraint of key process deadlines, as educational institutions had to submit results in time for returning students. Institutions had to submit registration data and new students had to sign the loan agreement forms (LAFs). There were different application cycles for TVET colleges for the 2018 academic year, and the TVET workstream was aligning all efforts to ensure that stakeholders agreed on how the 2018 process would bring about the desired impact. NSFAS would further deploy a team at TVETs to support students during registration and also with issues regarding the schedule of particulars (SOPs).

The 2018 applications were open between 1 August and 30 November. The majority of the applicants were applying for university. The key risk was the uncertainty if the online application system would be able to meet unknown peak demands. The project was envisaged to be completed by 31 December. The project depended on academic results and admissions from institutions. Third party validations of applications started in September and one of the problems was that some of the applicants could not be found in the data received from the Department of Basic Education (DBE). There was a possibility that evaluations of applications would have to extend into January 2018, hence delaying the funding decisions.

Regarding the 2018 disbursement and stabilisation, the objective of this stream was to stabilise the current disbursement process by fixing all the defects and including minor enhancements to the current process. The risk was the inability to disburse because of an unstable and erroneous disbursement process. The aim was to improve the disbursement process by eliminating all unnecessary steps in the process and ensure that student/learner allowances were paid timeously. The project would also have more disbursement providers, such as Standard Bank and VBS bank, on board.

With regard to institution engagements and contact centre initiatives, NSFAS had embarked on an exercise to assist institutions to close off 2017 and prepare for 2018. Training on the 2018 application forms had been completed. The cloud-based contact centre telephony would ensure that NSFAS was able to carry improved call volumes at the contact centre. The centre was increasing its capacity in Cape Town and establishing a disaster recovery site in Johannesburg. 50 contact centre agents would be recruited between now and the end of 2017.

The purpose of the new Student Single View 2017 was to provide a central tool where all interactions with students/learners could be reported. The system allows NSFAS contact centre agents and other departments with access to this information to respond quickly and accurately to queries. The project was targeted to be completed by 31 December.

Discussion

Mr M Khawula (IFP, KwaZulu-Natal) asked what experiences and lessons had been learnt about the new experimental centralised model of NSFAS. There had been complaints about the old model, and now there were complaints about the new one. The intention of getting into this new model was to eliminate corruption.

He said that when NSFAS made presentations, they sounded well and good, but when one got out there it was a different story. NSFAS had given a good presentation to the Committee at the end of 2015 and when Members of the Committee went to Mpumalanga the following year, students were protesting because of NSFAS. Committee Members went to the TVET colleges in Kimberley towards the end of 2017 and there were problems with NSFAS, with students still applying for NSFAS support this year and next year. Ethekwini was also experiencing the same problems.

He asked, when NSFAS paid the fees, who monitored what the money was used for what they had been allocated, because students were also saying that management used NSFAS money for other things. When comparing TVET colleges to universities, it was stated that there were 18 326 NSFAS applications for TVET colleges and 174 658 for universities, yet there was a bigger TVET college population in the country than universities. This was a problem, and TVET colleges were a disaster waiting to happen, because more attention was being given to universities. This showed that something needed to be done about TVET colleges.

The assisted capture statistics on progress in the presentation were out of order and misleading, as they focused only on cities and did not talk about institutions. When referring to Durban, for example, where there were many universities and colleges, the presentation did not show if all these institutions were catered for in the statistics.

He said that the beginning of the 2018 year was going to be a very busy year for universities, because one could suspect student organisations might shut down universities wanting free education. The former Minister of Higher Education had made a statement at the beginning of 2017 that every deserving case would be accommodated to get NSFAS funding, and Members of the Committee had gone to these institutions, and it had not been like that. NSFAS said that they had applicants they had rejected, but the Committee did not know what the reasons were. The statements that were being made were in contradiction of what was happening in practice. He asked how ready NSFAS was to deal with the chaos that would be taking place at the beginning of 2018.

Ms L Dlamini (ANC, Mpumalanga) said there were serious problems at NSFAS. When looking at the presentation, one would think that all was well, but out there it was a different case. Members of the Committee had been to different institutions, and both the management and students were experiencing the same problems with NSFAS. What was worse was that if one took Ethekwini college, for example, maybe NSFAS sends money to the college, but students do not receive it. This meant that students did not have money for food and accommodation, and they ended up doing things they did not plan to do.

She said that there was a problem with the information technology (IT) system of NSFAS. Mpumalanga, for instance, was mostly rural, and what did NSFAS do about students from rural areas where there was no internet and they could not apply online? NSFAS needed to strengthen its relationship with the Department of Social Development (DSD) and the Department of Basic Education. She understood the pre-screening process of NSFAS starting with the DBE, because this was where children were about to complete their grade 12. If the pre-screening started with the grade 12s, then by the time NSFAS worked on the final application process, some of the work should already have been done.

She said that the qualification criteria of NSFAS were misleading. Looking at quantiles one, two and three, there were some children who attended quintile four and five schools but did not pay school fees. With NSFAS looking only at those who were in quantiles one, two and three may be misleading, as there were children in quantiles four and five who were not well off, and at the same time there were children who were in quintile one, two and three schools whose parents could afford to pay for their children’s tertiary education.

In Singapore, if a child qualified for social grant, they did not have to apply to other departments for assistance because the system showed that they did not have money. This should be applied with the NSFAS applications so that students who were social grant beneficiaries did not have to apply and would automatically be granted NSFAS support.

She also said the progress to date statistics in the presentation were misleading. For example, in Mpumalanga, the province was divided into three districts and the statistics were missing the Gert Sibande district. Looking at the number of application forms distributed was worrisome. She asked why no applications were issued in Wynberg. She asked the CEO to take time to go to the institutions and engage with the students.

Ms Zwane said that she wanted an assurance from NSFAS that the large volume of applications would be processed on time. She also wanted an assurance that those students who applied manually were given application forms on time and that their applications were captured on time so that they could get funding.

At one of the TVET colleges in Kimberley, there were complaints that NSFAS students who were boarders and lodgers within the institution got money for food and other needs from NSFAS, but those who were not borders were not given money for transport or food. She asked how NSFAS ensured that every student obtained those benefits from the disbursements. Was the NSFAS money disbursed directly to the students or the institutions?

She said that students were very reluctant to sign the SOP, and she did not know how NSFAS dealt with this problem because it was only after students had signed the SOP that money was disbursed to them. The applications for the TVET colleges were very low, and this was worrying. She asked NSFAS what they were going to do to increase these numbers, and who tracked the students’ academic performances at TVET colleges.

Last year, after the former Minister of Higher Education had stated that every deserving case must be registered, the Committee had met with NSFAS and it was noted that the DHET had not paid NSFAS the amount that was outstanding. She asked if the issue had been rectified. Did NSFAS foresee the same issue in 2018? When did it anticipate receiving the money from the DHET so that it could take care of registration issues?

NSFAS response

Mr Zwane said that NSFAS appreciated the relationship it had with the DBE and their responsiveness, knowing that the broader part of the population that NSFAS funded came from the DBE, especially in 2017.

He said the student-centred model continued to be a big learning curve, because it was an uncomfortable process for both the universities and TVET colleges, as they used to own the process but now no longer owned it. This change had not been a nice one, which was why there were lots of complaints everywhere. This was because now NSFAS had its own application process, and now the money was following the students, as opposed to the universities or TVET colleges.

One of the lessons learnt was that NSFAS had its own application process, and everybody had to understand that. The application process was then recognised when the student registered at the university or TVET college, as opposed to before, where the university would state that they had given a student a place, and whether the student took the place or not, NSFAS would receive an invoice to pay. NSFAS was now closing those gaps which were uncomfortable. NSFAS was now asking for registration data on an ongoing basis, as opposed to asking for it at the end of the year.

There were many lessons that involved how NSFAS integrated their processes, and it was going to remain a problem for the next two years, because they do not think they would be able to address it during this financial year. One of the biggest lessons learnt was being clear about what the student-centred model meant, because there were still various misinterpretations about its meaning.

The student centred-model meant that students applied directly to NSFAS, and the money follows the student. The student signed a contract with NSFAS, and they were recognised by NSFAS. The student therefore becomes indebted to NSFAS. Money was distributed differently, with both the universities and students receiving the money that was due to them directly. This was as opposed to giving the money to the university and the university distributing the money to the students. NSFAS would be contracting with the different institutions based on the student-centred model so that it was not just out there as a concept.

NSFAS had had many issues in 2017. They were meeting on a daily basis with institutions and were addressing a number of issues which they had raised. They were learning as they go on how to communicate with each other better, creating systems in order to be able to deal with issues and then following through on those systems. They were learning to put more people into their processes so that they were able to address the issues.

He said that NSFAS had often been used as a scapegoat, as every time something went wrong, NSFAS was blamed. NSFAS had been said to be unreasonable when they informed students that they could not pay them if they had not signed the SOP. The SOP indicated that the student had a contract with NSFAS, and that gave NSFAS the right to pay the student. If TVET colleges did not show that the student had attended 80% of his or her classes, how did NSFAS know they were not paying for ghost students? This was a real issue, because when the Auditor General (AG) audited their process, the AG would not say that NSFAS should have been kind to the students and paid them the money without signing the SOP -- NSFAS would have got an audit fine.

Mr Zwane said that NSFAS anticipated a lot of problems in 2018. NSFAS had been avoiding talking about its readiness for free education in 2018, because they did not know what President Zuma was going to pronounce. Therefore, NSFAS did not want to speculate what that could be. NSFAS had written different scenarios down. One stated that if NSFAS were to fund students up to a household income of R350 000 -- moving from the R122 000 -- what the impact would be on NSFAS, because then NSFAS would have to reactivate their channels and reopen the application process. This meant that some applications would not be received on time, and also meant that the decision processes on whether someone was accepted or not would be moved to February or March. NSFAS would need more resources to tackle this scenario.

If students did not have a decision about free education by the end of January, people would be saying that NSFAS was not ready for 2018, and nobody would say it was because of the new process. NSFAS had two decision-making streams. The first stream was when an offer was placed to students who had just applied and qualified, and these were those students who were on the SASSA data base. NSFAS had sort of linked SASSA to the quintile one, two and three schools, because they had found that the majority of those on SASSA’s data base were already in quintile one, two and three institutions. The ones that were not in that category, meaning quintile four and five, were taken through the means test. NSFAS looked at the South African Revenue Service (SARS) data, the Department of Labour’s data and the DHA in order to verify if the information submitted in the application form was correct. This process had been working very well for NSFAS, as it also strengthened their relationships with the different departments. NSFAS tests on a first come, first serve basis in terms of applications.

He said that the imbalance of TVET college applications compared to the university applications was a structural and systemic issue. It was the South African government that had over the years made people feel less than adequate if they did not have a university degree. Therefore, anything that one studied in between did not matter. NSFAS could not redress that until the government took that position.

Unlike universities, which were autonomous, TVET colleges were managed by the DHET, meaning all decision-making processes were centred in the DHET. Therefore, NSFAS took instructions from the DHET on how to service these institutions. NSFAS did not distribute the money directly to the students -- it sends the money to the TVET colleges, and they distribute the money to the students.

The responsibility of NSFAS was to make sure that students got their money and to monitor how the money got used, making sure that the distribution was via vouchers that could be activated only at certain merchants. Whether the student started selling them on to somebody else was not NSFAS’s responsibility.

In the deep rural areas, NSFAS did not have centres that were available to assist its operations. Its biggest ambition for 2018 was for it to station people at centres that were viable, and where transport was given to people to drive to the different schools. NSFAS could not claim to be covering all the rural areas in 2018, but they had done their best to be as close as possible.

The drive to access higher education was to be able to attain the right to get in to an academic institution. If a student did not apply for NSFAS support and was accepted at a university, there was a new process where students could apply via the institution. Financial aid officers were ready on the ground to assist students to apply via the online application process.

NSFAS was avoiding using manual application forms because they needed to be collected, and posted to the NSFAS offices in Cape Town. If the applications got lost in the process, NSFAS would not be able to recognise them in the system. The DHET was their boss, so they looked to them for direction and guidance, which was why NSFAS did not talk about money in relation to how many people it could cover.

Regarding disbursements in the future, previously NSFAS had one distributor, and now they had two banks coming in. NSFAS was still going to stress to universities and TVET colleges that the loan agreements had to be signed. The biggest problem was how long it would take for students to get their money after they had signed. NSFAS wanted to put the students’ money in their accounts after seven days, and the universities’ money in their accounts after 30 days.

NSFAS was still working on the R122 000 household income threshold, unless they were told otherwise. They had disclosed their readiness to deal with the R350 000 household income, and had a scenario for the R600 000 household income, but hoped this was not implemented in 2018.

Mr Victor Rambau, Chief Operating Officer (COO): NSFAS, said that after the former Minister of Education had stated that any deserving student should be funded, NSFAS had met with all the universities through the University Chairs of Council Forum (UCCF) and requested universities to give a list of all quintile one and SASSA students. NSFAS had received 21 699 students who fell within the SASSA and quintile one, two and three categories, and the process of finalising them would be done on 8 December, so that by 2018 all students accounts would be settled. He said that there was another group of students who did not fall under quintile one, two and three or SASSA, and the universities had given NSFAS 5 707 students who fell into this group who would then be funded in 2017 and moving forward, and this process would be finalised this year by 15 December at the latest.

Mr Jomo Jacobs, General Manager: NSFAS said that there were a lot of different cycles for applications at TVET colleges, as there were students who started their courses in September, and those applications were still going to take place this year. NSFAS made funding decisions, but the allowances were approved by the colleges in terms of how much the student would receive for transport and accommodation.

 

DBE Minister on school fees

Ms Angie Motshekga, Minister of Basic Education, said that the no-fee paying schools were mainly on budget allocations provided by provinces. The provinces worked within those budgets because if they exceed them -- the way poor provinces such as Limpopo and the Eastern Cape had been forced to do – there were major financial implications. In provinces like Gauteng, learners who resided around fee-paying schools areas would by law be exempted from paying fees. However, there was also a formula being used which stated that if that child was in Soweto, the DBE would contribute R10 000 towards the child where the fee-paying school charged R40 000 because of all the other costs, such as extra-mural activities. The state could not pay the R40 000, but could only pay the R10 000.

The decision to exempt the learners from paying fees was done by the School’s Governing Body(SGB), in concurrence with the principal. It was issues like this that the DBE was confronted with daily. If the school could show that majority of their learners could not afford school fees and resided in informal settlements, that was when they would be exempt from paying school fees.

Because some provinces exempted a lot of learners, they had to take money from other sources. The Eastern Cape and Limpopo could hardly employ clerks because they have more poor students, and the allocations that they had were not enough to cover all the poor children. Provinces such as Gauteng and Western Cape stick to the law, because they stick to the budget and anything that was outside the budget would not be paid, for which was why they were doing well.

DBE: Review of quintile system

Ms Gladys Modise, Chief Director: Human Resources, DBE, said that Section 35(1) of the South African Schools Act (SASA) required the Minister to determine national quintiles for public schools. The National Norms and Standards for School Funding (NNSSF) provided criteria for a system in terms of placing public schools, as well as all learners into quintiles, according to their financial means.

The national poverty ranking of schools (quintiles) for public schools and learners was divided into five groups. Quintile 1 was the poorest quintile, while quintile 5 was the least poor. The national poverty distribution table guided the Provincial Education Departments (PEDs) on how to distribute learners in the different quintiles. The DBE’s target was for the national poverty distribution to have 20% of learners in each quintile.

With regard to the current school funding system, funding for schools was determined by the national targets for the school allocation and the poverty ranking of the school. Poverty scores were assigned to schools by PEDs and were based on the relative poverty of the community surrounding the school. The challenges regarding the current funding system were the adequacy of the school allocation and the ability of the current system to accurately rank some schools in terms of their relative poverty.

With regard to the 2017 per-learner allocations, the national threshold was R1 243 for quintiles 1 to 3, R623 for quintile 4 and R215 for quintile 5. Five provinces were not able to allocate funds according to the national threshold, based on budget constraints. KZN was at the lowest, with R955 for quintile 1 to 3, R522 for quintile 4 and R179 for quintile 5.

With regard to the 2017 no-fee schools and no-fee learners, 20 478 schools were classified in South Africa as no fee schools, which represented 86.34% of the number of schools, and there were 9 784 411 learners who did not pay school fees.

In respect of the actual expansion of no fee learners versus policy targets, all PEDs had exceeded the policy targets for no fee learners in quintiles 1,2 and 3.

With regard to the no-fee versus fee-paying, provinces like Gauteng and the Western Cape classified other selected quintile 4 and 5 schools as no-fee schools, based on the learners in these quintile 4 and 5 schools coming from poor areas.

PEDs were responsible for assigning poverty scores to schools, and there were three indicators of poverty used: income levels of households in communities around the school, the unemployment rate in the community, and levels of education of the community. Schools in quintiles 1, 2 and 3 had been declared no-fee schools.

Many learners did not attend the closest public school. Schools in less poor communities increasingly accommodated learners from a different socio-economic background. Data on the surrounding households was becoming a less reliable indicator of the socio-economic status of learners in many schools. The unemployment rates had drastically increased recently and had not been considered when determining the poverty scores for schools. Some fee-paying schools in quintiles 4 and 5 experienced a level of funding that was below the no-fee threshold. There was a national total of 928 schools in quintiles 4 and 5 with a total income per learner below the no-fee threshold.

One of the recommendations to address the shortcomings of the present system for allocating funds to schools was to de-link a school’s allocation from its quintile ranking, and to distinguish between only two broad categories of schools. Proposals for de-linking allocations from the quintile ranking were to equalise the school allocations for all no-fee schools, and the introduction of a ‘fee-sensitive’ funding system for determining the level of the allocation to fee-paying schools.

Progress with proposals on de-linking school allocations from quintile ranking had seen the equalising of the school allocation for all no-fee schools already being achieved. A funding bid had been made in 2016 for the voluntary reclassification of selected quintile 4 and 5 schools as no-fee schools and given the budgetary constraints experienced by provinces currently, most PEDs would probably not be able to find the additional funding required within their existing budgets.

With regard to the proposals for improving the adequacy of the school allocation, the DBE wanted to improve the efficiency/utilisation of the school allocation, addressing the ‘under-funding’ of the school allocations by certain PEDs, increasing the national targets for the school allocations and soliciting funding for PEDs to be able to fund at these levels.

In respect of 2018 per-learner allocations, the national threshold was R1 243 for quintiles 1 to 3, R623 for quintile 4 and R215 for quintile 5. KZN and Mpumalanga would fund all schools below the national threshold. Northern Cape would fund schools in quintile 1 to 3 below the no-fee threshold.

With regard to the norms and standards transfer to public ordinary schools, the Eastern Cape (for quintiles 1 to 3), Gauteng, Northern Cape, North West and the Western Cape had made transfers before the due date. The Eastern Cape (quintiles 4 and5), Free State, KZN, Limpopo and Mpumalanga had transferred after the due date. The Free State and KZN were experiencing cash flow problems, which was affecting their ability to transfer by the due date.

With regards to the transfer of subsidies to independent schools, KZN, Limpopo, Northern Cape and the Western Cape had made transfers for both quarters before the due date. The Free State and Gauteng could not meet the due date for any of the quarters mentioned on the presentation.

In the Eastern Cape, KZN, Limpopo and Mpumalanga, no budget was made available for school governing board (SGB) association subscription fees. Limpopo and Mpumalanga would consider a budget during the 2017/18 budget adjustment process. Limpopo reported that none of the associations currently met the qualifying criteria for a subsidy.

With regard to compensation for fee exemption, Gauteng, Northern Cape and the Western Cape had made their 2016/17 transfers before the due date. Limpopo had not made any budget available.

Discussion

Ms Dlamini said she appreciated the good work the DBE was doing. She thanked the Minister for giving clarity on how schools in the same area were differentiated. She wanted clarity on why the three provinces in the presentation would fund all schools below the national threshold.

Ms Zwane said that presentation indicated the national threshold for quintiles 1 to 3 was R1 243, but KZN was R995. Why was it far less than the national threshold? She asked how the DBE had dealt with the tendency of schools inflating enrolment.

Ms Dlamini said that the problem she had with the Western Cape was that it had clean audits, but when one looked at the services -- especially in the poor areas -- the services could not be equated to the clean audits. They wanted to stick to the law, but if one looked at what they were doing from a learner’s point of view, they were not doing well compared to other provinces. They were more conscious about following the law than accommodating poor people.

DBE’s response

Minister Angie Motshekga said that provinces need to improve their inefficiency. KZN, Eastern Cape, Limpopo and Mpumalanga had too many schools. Eastern Cape, with a population less than Gauteng, had three times as many schools as Gauteng. This had major implications, because in the Eastern Cape the DBE had to give something to the small schools, even if they had only 10 children. R25 000 had to be given to a school as a minimum. On top of that, there were more than 5 000 principals in the Eastern Cape who had to be paid a certain salary. The more schools there are, the more money is spent on water, electricity and other resources. If schools were regionalised, then more money would be available for schools. She said money was given, based on learner populations. If there were 4 000 learners in KZN, Treasury gave the province money for the 4 000 learners. The 2018 per-learner allocations reflected what the province could afford.

The Minister said that the Eastern Cape and Limpopo had done very well to be efficient, but more work still needed to be done. Mpumalanga province should reduce the number of smalls schools so that instead of having five principals there was one, and instead of taking money to five schools money was taken to only one school. This helped reduce expenses in the province and assisted schools to do more in areas that were more important. The Eastern Cape did not have clerks in schools, and the money that was intended for hiring clerks was used for other things. This was why one found principals also being administrators, and this was a problem.

Mr Hubert Mweli, Director General: DBE, said that in the long run the Department would prefer to have fee paying and non-fee paying schools, so that they could get rid of the five quintiles and have only two types of schools, as was the case generally in the world. When he was in the Eastern Cape in 2012, they had picked up that principals were inflating learner numbers because it worked to their advantage.

Currently, the Eastern Cape was one of the leading provinces in dealing with the inefficiencies related to learner numbers. The DBE was using a learner unit tracking system which was enabling the Eastern Cape to be the leader in the country. There had even been a court case against the DBE in the Eastern Cape because of their ability to track fraudulent learners, which had led to some schools not being given their allocations until they were able to prove that the learner numbers that they had indicated were real learner numbers.

The way the poverty ranking of schools had been done historically was the same way as municipal wards were classified. Was there running water at the school, what was the level of education in the school’s surroundings, was there electricity, was it a new school or an old one, where money would be needed for day to day maintenance and renovation? These factors constituted a poverty index, which had many variables. The challenge was the migration of learners from communities which defined their poverty level, to other areas that were less poor. This complicated the poverty ranking of schools.

If learners went to fee paying schools, there was an exemption policy where learners were exempted from paying fees. However, the affected schools would have to indicate the number of learners they had exempted so that the DBE could reimburse the schools for exempting learners. The Western Cape and Gauteng were the only two provinces that abided by the rules. If other provinces were to abide by the rules, they would not be able to cover the number of learners they were covering now. The number of poor children exempted in other provinces with low funding levels, were far higher than in Gauteng and the Western Cape.

South Africa was predominantly poor, with an economy that was going down, and poverty levels were increasing. This meant that those provinces which were struggling to meet the threshold had done a good thing. The National Council of Provinces (NCOP) must fight for those provinces to get more money so that they were able to survive. If more money was not given to those provinces, they might not even have money to pay their teachers, but would have the funds to exempt learners from paying school fees and for nutrition.

Minister Motshekga said that more work needed to be done in the communities. There was a lot of wastage of resources in poor communities. There was this attitude that this was government money -- forgetting that it was their money. The retrieval of books was a big problem. Poor schools with limited resources had to buy new textbooks because learners did not return them. Parents of children who attended fee paying schools, because they bought the textbooks, were even able to resell them the following year, so they looked after them.

During weekends, one would find lights of the entire school on, because the government was going to pay, and taps were leaking. This was why, when the DBE wanted more money from Treasury, it was sometimes denied because of the wastage. A lot of the small schools did not give results and were not adding any value except wasting money. Community members had been taught the culture that because the government was paying for the children’s school fees, community members could not do a thing to help in schools. In model C schools, parents helped to maintain the schools, and in poor schools, parents did not help.

Mr Mweli said that the observation made by Ms Dlamini about the Western Cape was right. The Auditor General was looking at the possibility of changing the way the DBE conducted audits so they were not based only on financial statements as part of the performance. The Premier of the Western Cape wanted the DBE to also take audits on service delivery. Moving in this direction would test whether some people were operating according to the book, or whether they were able to reach out to communities in terms of service delivery.

There were two ways in which schools accounted. The first way was through the annual general meeting, where principals presented reports to parents and they were approved. The second way was through an audited financial statement. The Act states that the governing body must submit an audited financial statement, audited by a registered auditor, to the DBE on an annual basis. The challenge was that in small towns, one rarely finds registered auditing firms. The DBE was looking at amending the Act to be user friendly for people who were in the outlying areas. If the audited financial statements were not submitted, then the subsequent funds transfers would not happen, and this meant that learners and schools were going to be affected.

Some schools abused the funds that were transferred, as they were not used for their intended purposes. Sometimes the money was used as loans, and for some schools it was the first time they had received R100 0000 into the school’s account, and it was money they had never handled before. Therefore, they ended up loaning each other this money, and paying it back was a problem. The DBE needed to strengthen financial accountability.

The meeting was adjourned.

 

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