Adjustments Appropriation Bill: DBE hearing

Standing Committee on Appropriations

23 November 2018
Chairperson: Ms Y Phosa (ANC)
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Meeting Summary

The Committee met for a briefing with the Department of Basic Education on the 2018 Adjustments Appropriation Bill, in the presence of the Minister.

The Department expressed its readiness to effectively and efficiently spend any additional allocations as per the 2018 budget adjustments process. There were currently no virements needing Parliament approval. The additional R800 million appropriated to the Department will be spent on projects that are currently underway. The summary of non-financial performance at the end of the 2nd quarter as well as reasons and remedial measures for under/over spending and under performance was outlined as follows: For programme 1: Administration, 98.8% of service providers within the procurement unit were paid within 30 days. The marginal deviations were as a result of actual invoice receipt dates being captured incorrectly, and payments being delayed by incomplete delivery. To remedy this, the Department had developed an invoice day tracker tool to trace number of days from the time invoice is received by the Department until it is authorized on the system. For programme 2: Curriculum policy, support and monitoring, out of a 14 training sessions for technical sessions bi-annual target, two were not achieved in quarter two. The reason for deviation was that this is a specialised training and is done by skills training centres through Service Level Agreements (SLAs). In 2018 provinces delayed to sign these SLAs. Therefore, the Department has put systems in place to monitor the signing of these SLAs. One of them is the Recovery Plan. On advocacy campaigns conducted on the Rural Education Policy in the provinces, the policy has not yet been finalised. The policy was presented at CEM and concerns were raised regarding the potential legal implications of the policy in view of the already constrained resources of the sector. CEM recommended that the principles contained in the policy be considered at HEDCOM for inclusion in the guidelines on the improvement of Rural Education. On transfers to public entities, conditional grants transfers had already been done for the three quarters. The projected spending for the school infrastructures backlog grant for the remainder of the year shows R1.2 billion, which exceeds the current balance by R94 million. The project underspending is due to slow spending of National Assessments. The Department had for the first time administered a pilot study on the implementation of re-design Systemic Evaluation model from 15 to 19 October 2018. Tests were developed according to an internationally recognised matrix design. 40 learners in Grades 3, 6 and 9 per school will be selected across 9 provinces to participate in the testing. The spending on this item will increase in the third and fourth quarter when invoices are received and processed.

Minister Motshekga highlighted the challenges the Department was confronted with in efforts to deliver on its mandate. Foremost were cases of service providers in the school infrastructure programme who had lodged court challenges against the Department, hence stalling ongoing projects, particularly in the Eastern Cape. By the time these blockages were dealt with, Treasury had recalled the allocation to the Department with the undertaking that the funds would be recompensed as soon as the Department puts its house in order. Most of the projects were already in the pipeline such that it led to the Department failing to pay service providers and subsequent abandonment of these projects.

Members made reference to reports that 27 contractors had walked away from a school infrastructural project in the Eastern Cape because of a R104 million debt. They asked for an indication why this was the case and how this challenge would be addressed going forward. Was this a persistent problem? They asked for an indication of the number of schools that were still using pit latrines across the country. By when was the target of eradicating such schools going to be met and how much was allocated for this programme? The Chairperson sought clarity about the post-disaster rehabilitation projects in KwaZulu-Natal and the Western Cape. How was the Department going to ensure that these provinces would use the allocated funds effectively and efficiently? Were there any monitoring mechanisms in place?

Meeting report

The Chairperson welcomed everyone and indicated the focus of the engagement would be on the additional grant to the school infrastructure backlog as well as the education infrastructure grant. The Department was expected to fill in the Committee on whether it had the capacity to effectively utilise its allocation from Treasury and had plans to effect actual implementation. She invited the presentation from the Department.

Ms Angie Motshekga, Minister of Basic Education, in her opening remarks, highlighted the challenges the Department was confronted with in efforts to deliver on its mandate. Foremost were cases of service providers in the school infrastructure programme who had lodged court challenges against the Department, hence stalling ongoing projects, particularly in the Eastern Cape. By the time these blockages were dealt with, Treasury had recalled the allocation to the Department with the undertaking that the funds would be recompensed as soon as the Department puts its house in order. Most of the projects were already in the pipeline such that it led to the Department failing to pay service providers and subsequent abandonment of these projects. She thanked the Committee for the opportunity to give a presentation.

Briefing by Department of Basic Education (DBE)
Mr Mathanzima Mweli, Director-General, DBE, expressed the Department’s readiness to effectively and efficiently spend any additional allocations as per the 2018 budget adjustments process. There were currently no virements needing Parliament approval. The additional R800 million appropriated to the Department will be spent on projects that are currently underway. The summary of non-financial performance at the end of the 2nd quarter as well as reasons and remedial measures for under/over spending and under performance was outlined as follows:

For programme 1: Administration, 98.8% of service providers within the procurement unit were paid within 30 days. The marginal deviations were as a result of actual invoice receipt dates being captured incorrectly, and payments being delayed by incomplete delivery. To remedy this, the Department had developed an invoice day tracker tool to trace number of days from the time invoice is received by the Department until it is authorised on the system. For programme 2: Curriculum policy, support and monitoring, out of a 14 training sessions for technical sessions bi-annual target, two were not achieved in quarter two. The reason for deviation was that this is a specialised training and is done by skills training centres through Service Level Agreements (SLAs). In 2018 provinces delayed to sign these SLAs. Therefore, the Department has put systems in place to monitor the signing of these SLAs. One of them is the Recovery Plan. On advocacy campaigns conducted on the Rural Education Policy in the provinces, the policy has not yet been finalised. The policy was presented at CEM and concerns were raised regarding the potential legal implications of the policy in view of the already constrained resources of the sector. CEM recommended that the principles contained in the policy be considered at HEDCOM for inclusion in the guidelines on the improvement of Rural Education.

On transfers to public entities, conditional grants transfers had already been done for the three quarters. The projected spending for the school infrastructures backlog grant for the remainder of the year shows R1.2 billion, which exceeds the current balance by R94 million. The project underspending is due to slow spending of National Assessments. The Department had for the first time administered a pilot study on the implementation of re-design Systemic Evaluation model from 15 to 19 October 2018. Tests were developed according to an internationally recognised matrix design. 40 learners in Grades 3, 6 and 9 per school will be selected across 9 provinces to participate in the testing. The spending on this item will increase in the third and fourth quarter when invoices are received and processed.

Discussion
Mr M Shackleton (DA) made reference to reports that 27 contractors had walked away from a school infrastructural project in the Eastern Cape because of a R104 million debt. He asked for an indication why this was the case and how this challenge would be addressed going forward. Was this a persistent problem?

Ms D Senokoanyane (ANC) wanted to know if schools that were going to be built were part of the existing school infrastructure programmes. Was the recent allocation going to be able to cover all the requisite infrastructure in the schools where the projects would be undertaken?

Mr N Gcwabaza (ANC) asked for an indication of the number of schools that were still using pit latrines across the country. By when was the target of eradicating such schools going to be met and how much was allocated for this programme? He asked how many schools the Department was looking into completing this year and the extent to which the set targets were achievable.

The Chairperson sought clarity about the post-disaster rehabilitation projects in KwaZulu-Natal and the Western Cape. How was the Department going to ensure that these provinces would use the allocated funds effectively and efficiently? Were there any monitoring mechanisms in place?

The Minister, in response, reiterated that the withdrawal of funds for multi-year projects mid-stream by Treasury was a big challenge. The situation was desperate as there was a huge risk of projects being abandoned. These concerns were being communicated continually with Treasury. There were more than 3000 schools with pit latrines and the project required R6.8 billion. The Department was also embarking on fundraising drives in an effort to compensate the funds recalled by the Treasury mid-stream.

Mr Mweli highlighted the budget cut figures for the period under review. In 2017/18, R72.8 million was taken from the Department. In 2019/20, R518 million and in 2020/21, R738 million was taken. All in all, a R2.7 billion total budget cut was effected from the MTEF baseline. The bulk of the funds taken away during the MTEF were from ASIDI and the education infrastructure grants. The impact of the budget cut was significant. On reports that 27 contractors in the Eastern Cape had walked away, the Department had sent a team within the project management unit to deal with the matter. The Department was duty-bound to deal with the problems in spite of its cash-flow challenges. An undertaking to relocate resources from overheating to underperforming provinces as part of the adjustment processes was underway. The total projected expenditure for the pit latrine project was R6.8 million and some of the funds were being received from donors. The Department had also set a target to complete 238 sanitation projects in the current financial year, and 114 had been completed. There were no cost overruns as a result of cash-flow constraints and non-payment to date. 32 schools in the Eastern Cape had not yet been completed owing to lack of funding due to budget cuts.

Mr Mweli said the development of norms and standards for the school facilities project was underway and assessments were being undertaken throughout the nine provinces. On consequence management, the provision that deals with penalties had been strengthened. He added that legal challenges instituted by contractors were delaying implementation of projects. The Department was working with provincial departmental heads on an ongoing basis to ensure that funds allocated to storm-damaged schools were being spent judiciously. Work had already been done to rehabilitate the schools in the provinces that were affected by natural disasters. 

The Chairperson appreciated the engagements and the informative presentation from the Department. She expressed the Committee’s commitment to support government’s efforts to enhance provision of quality education.

The meeting was adjourned.

 

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