The Committee met with the Department of Military Veterans (DMV) and the National Student Financial Aid Scheme (NSFAS) for a briefing on challenges relating to the provision of educational support benefits to military veterans and their dependants.
The Department briefed the Committee on the financial performance of the Department for the 2017/18 financial year specifically allocations per quarter vs. actual expenditure. There was increased expenditure on salaries while there was underperformance on housing delivery. Challenges were experienced with benefits and compensation for injuries. The Department achieved seven of its 13 performance areas.
The Committee questioned Social Relief of Distress, under-spending on education support, healthcare and housing, unspent funds and the use of the conference centre at the castle. Members were concerned by the underachievement of targets while 77% on salaries was spent. Further questions focused on historical debt, capacity and critical vacancies and skills shortages.
NSFAS then briefed the Committee on funds allocated in the 2017 academic year, beneficiaries, challenges and overpayments. Also highlighted were intervention measures and the overview for 2018.
The Committee questioned additional funds beyond the allocation, funding of postgraduate students, criteria to qualify as a military veteran, the national means test and working relationship between the Department and NSFAS.
Preliminary: 3rd Quarter Performance and Financial Report (QPR) (October – December 2017) for the period ending 31 December 2017
Mr Max Ozinsky, DMV Acting Director-General, began with financial performance noting the budget allocation was R622.11 million – the DMV had spent R466 million of that amount. This amounted to 75% utilisation. 54% of the budget was allocated for benefits. This was the same amount of money which was allocated in the previous year.
The cost of employment, which included salaries, was marginally above the budget allocation. There were imbalances in the DMV organogram. The structure did not favour service delivery to military veterans and, as such, non-permanent workers were used to meet service demands. Using non-permanent workers was costlier for DMV. The DMV was in constant engagement with National Treasury with regards to funding matters.
Slow delivery of housing heavily added to under spending in the DMV. Main benefits provided through the branch included education, housing, compensation for injuries and grants. Spending outcomes remained the same as the previous year. There was a potential for over expenditure in education and under expenditure in housing provision.
With regards to compensation for injuries, a professional was appointed by the DMV to conduct assessments. The staff member had since resigned and as a result no assessments were completed and no payments were made. Grants were a highly contentious issue and the root cause of protests against the DMV. There was a potential for over expenditure in the budget. A number of measures were taken to limit this.
Mr Ozinsky then outlined budget and forecast - the budget was divided into quarters with R152 million allocated for each quarter. With regard to actual spending for key benefits, benefit compensation for injuries had a R5 million budget allocation of which 3% of that budget was spent. Education support had R98 million and spent 92% of the budget. R30 million was allocated to healthcare and 17% was spent on housing. R62 million was allocated for skills development for which 28% was spent. The budget allocation for the castle was not spent but all commitments with the castle were settled in the financial year. There was over expenditure in burial support - there was huge pressure on DMV for burial support.
With regards to performance information, DMV planned to achieve 13 performance areas of which seven areas were actually achieved. There were issues with historic debt accrued on various contracts relating to travel, cellphone and healthcare contracts.
Mr Ozinsky stated that the number of military veterans which should have been provided with housing was under achieved. Achievements remained below that which was desired. DMV should have achieved 100 house provisions but only provided 82. The third quarter had no target for the number of beneficiaries. The Department was way over what was planned. There was an issue with members who were not in the database. In order to overcome under achievements, there was a need for a common shared vision, teamwork and improvements in service delivery.
Mr S Esau (DA) noted there were a number of issues. The Social Relief of Distress (SRD) was not initially part of the benefits but was accommodated for at a later stage. Some veteran members had been cut off completely and that was why there were protests. With regards to spend vs. the budget, there was a huge under spending on healthcare and housing. Education support was performing well financially but still there was under spending. Money was shifted from other benefits to education but this was not recorded. There was a lot of unspent money. This could be taken back by National Treasury. With regards to the castle and the issue of the conference centre, were there conditions of use of the conference centre and who was eligible to use the centre. With regards to targets, there was huge underachievement. This was a serious concern. Despite this, 77% on salaries was spent. There was overspending on salaries and underachievement of targets. This was a problem.
He noted that the DMV was the worst performing Department in 2012 and there were still concerns with regards to impact. With regards to the 30 days’ notice of receipt, there were serious problems. Why has historical debt not been resolved? Capacity in the DMV was an issue. Critical posts were not filled to execute the job. 116 people out of 169 were employed. 15 new vacancies were created in the Department. The number of additional staff grew tremendously. This did not do well for the DMV. Critical posts needed to be filled. Furthermore, there was a huge shortage with regards to skills development. Skills and education could break the cycle of poverty.
Mr Ozinsky said that the SRD was not a benefit listed in the Act. It was paid in terms of a ministerial directive. Initially there was a Memorandum of Understanding (MOU) with the Department of Social Development (DSD). This was paid for through the Department of Social Development but was later in housed to the DMV. DMV was not happy with SRD provision. There was a policy guideline for this. The key aspect meant that SRD was available for a year. Veterans were advantaged more than the ordinary citizens of SA. Secondly, social workers were needed for assessments. Four social workers were appointed.
There was massive resistance by military veterans to being assessed by social workers. A large number refused to be assessed and that put the DMV in trouble. If the social worker found that military veterans were not in distress, grant money would be taken away. There were a large number of veterans who were receiving grants who did not qualify. Out of the 300 veterans assessed, 51% did not qualify. Veterans had the wrong perception of the grant.
The DMV had engaged veterans in a number of forums. There was refusal of policy and control measures. The majority of veteran protestors were receiving SRDs. There were about 5 000 people who had applied for SRDs and who never received it before. There were problems from those veterans who were cut off the SRD and those who still needed to receive it.
The DMV suggested it draw up a new MOU with the Department of Social Development for DSD to handle grants. Establishing a pension was possible but needed a lot of work. This would lead to major areas of disagreement. If the pension was paid it needed to help reduce expenditure in other areas. The pension was agreed to and it would be dealt with in the coming financial year.
Maj. Gen. Lifeni Make, DMV DDG: Corporate Services, said that with regards to spending patterns, there was almost equal phasing in each quarter. However reality had brought the DMV down to earth. For quarter one the assumption was that 25% of the total budget would be spent but only 18% was actually spent. For the second quarter, 25% was allocated and 22% was spent. In quarter three 25% was allocated and 16% was spent and in quarter four 25% was allocated and 45% of the total budget was spent in this quarter. Last year, 43% of the budget was spent in quarter four. The DMV acknowledged that the forecast needed to be realistic.
With regards to benefits, DMV was tracking far behind what was expected in terms of education and SRD. Education was seasonal. There was misalignment between the academic and financial year. This delay and timing difference had always been present. This was the reason for under spending. Budgeting needed to meet the academic year which was contradictory to the financial year.
With regards to housing, DMV could set targets. In reality delivery did not meet these targets. There was a huge under-delivery in housing. There were internal issues with regards to healthcare. There was a challenge of a six-month backlog of invoices. However a new system was developed. With regards to potential overspending on education, the DMV sought concurrence with National Treasury. This allowed the Department to shift money to important areas. Going forward, the DMV considered a strategy where education and skills would be managed under one branch.
With regards to the 30 days receipt notice, a manual system was being used. This made it very hard for people to send and sign invoices. There were a huge number of invoices which needed signatures. With regards to the Sector and Education Training Authority (SETA), there were annexes which were not agreed upon. Invoices were submitted and R6 million had already been paid. There was a backlog with cellphone contracts but this was being cleaned up. In April, the DMV wanted to upgrade so that contract and invoices would be managed easier. There were issues around travel invoices and insufficient capacity in the supply chain.
Ms Nontobeko Mafu, DMV DDG: Empowerment and Stakeholder Management, said that the conference centre in the castle was being refurbished. There was an MOU between the DMV and the castle. Military veterans could use it without paying. With regards to under spending in skills and placement opportunities, the realties were that skills did not result in placement opportunities but that leaderships led to permanent placements. The approach was being relooked.
The Chairperson noted this was not the last interaction with the Department.
NSFAS: Department of Military Veterans (DMV) Higher Education Bursary Programme
Ms Mpho Matlala, NSFAS Senior Manager: Funding Relations, said that in the 2017 academic year R82 million was paid on behalf of 1 500 students. NSFAS was still in the 2017/2018 financial year. With regards to outlook, the total number of beneficiaries funded was 1 500 students. There were a number of technical challenges which affected 122 students. These related to Identity Document (ID) verification, registration template and postgraduate course codes. NSFAS was able to track funding and distribute, verify and showcase study programme costs and progress thereof.
With regards to challenges, in 2017 NSFAS went through a transition. Institutions were not required to submit manual claims. There were some delays and technical difficulties. Students struggled in the way in which the new registration process and template was set up. Some of the amounts were disbursed over the threshold. There were over payments recorded in the University of Johannesburg and the University of the Western Cape. Some terms remained unpaid.
Some intervention measures were made. A service team was set up in various institutions. This assisted students to change cellphone numbers and with the registration process. The operations team would meet on a five-week basis. Monthly reports were provided. Students received SMSs directly. The DMV could now call students or parents. Furthermore, NSFAS visited problematic institutions.
The overview for 2018 was reported in February. The required funding was R96 million. NSFAS invoiced the DMV and this amount was changed. Some recommendations were made. An approved list of students needed to be submitted of students with academic offers only. Funding could be availed in the second week of the academic year. Students needed funding status and guidelines.
Mr Esau asked who those who had applied for additional funds beyond the allocation were. R72 000 encompassed a lot. He asked for the breakdowns of this and how much money was spent in the different areas. With regards to the 22 students who did not register, did this create problems? Were these students able to finish their studies
With regards to 2017 beneficiaries, funding postgraduate courses was a breach of policy. The accommodation of a DMV person permanent to NSFAS would ensure the process ran smoother. What were the criteria for people to qualify as military veterans? Did the national level means test apply to DMV bursaries? How was this being aligned?
A funding specialist at NSFAS answered that with regards to the breakdown of R72 000 for students, different institutions allowed different allocations. Allocations for books, accommodation, transportation and food were made. The DMV said that variations were present at different universities. A process of standardisation was underway. Book allowance would be capped at R5 000, meals at R14 000 and accommodation at R32 000. This was becoming standardised. Furthermore, there were beneficiaries which were worked with last year. If these students fell between the desired threshold they could be put into the NSFAS system for NSFAS to manage them. This would free more money for DMV. DMV would not do the means test. The benefits were most or less the same. The qualifying criteria were similar.
Ms Matlala said that with regards to the R72 000 further breakdown, this information would be made available to the Committee and DMV. There were 56 approved students. The total number extended was 47. With regards to the 22 students, through the registration template the process was to send the list of students. These students were not registered at any institutions and as such were not picked up on the system. With regards to postgraduate course codes, there were postgraduate students on the process. NSFAS only issued funds.
The Chairperson asked if NSFAS and DMV had a good working relationship.
Mr Ozinsky said that NSFAS and DMV were working together to improve relations. One of the consequences of the problems last year had to do with the 500 students that were at the University of South Africa (UNISA). A number of students could have been forced to drop out for non-payment. The means test remained an issue. The Committee needed to resolve this with military veterans. There was no support for means test. The Department was moving towards implementing the means test by veterans. The database would be properly verified. Home Affairs would assist in cleaning up the database. There were steps which would be taken. By the end of the financial year the verification process and means would be agreed upon. Support was needed for the means test issues.
Ms Esau said in terms of the policy, 33 postgrad students were not meant to be funded. The policy was only allocated for undergraduate degrees.
Ms Matlala replied that there was a previous agreement to fund postgrad students.
Mr Esau said that all government departments had internship programmes - why did the DMV go this route when it was not in policy?
The Chairperson noted the concerns.
The meeting was adjourned.
- Memorandum of understanding
- DMV guidelines: 2017 education support disbursement
- DMV Higher Education Bursary Programme: NSFAS presentation
- National Student Financial Aid Scheme invoice
- NSFAS Quarterly Funder Report
- Research Unit: Second Quarter Expenditure Report for Department of Defence For 2017/18
- Research Unit: Matters Related to NSFAS & SITA
- DMV Educational Support to Military Veterans & their Dependants presentation
- DMV preliminary 3rd quarterly performance & financial report
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