NSFAS, SAQA & DSI 2021/22 Annual Performance Plans; with Minister and Deputy Minister

Meeting report

The Chairperson opened the virtual meeting, welcoming everyone present and submitting that the Committee was due to receive presentations from the National Student Financial Aid Scheme (NSFAS), South African Qualifications Authority (SAQA) and the Department of Science and Innovation. He submitted the agenda for adoption and received the apologies.

Briefing by NSFAS on its Strategic Plan 2020-2025 and Annual Performance Plan (APP) and Budget 2021/22

Mr Ernest Khoza, Chairperson of NSFAS Board, commenced with his opening remarks and submitted that the new administration came into the organisation during uncomfortable times where the Auditor-General (AG) had issued a report to the organisation. The Board appeared before the Committee where negative light on the organisation was prevalent but the Board started working on the matters that were dismantling the organisation. The Board also had to deal with substantial negative publicity as well as displeasures by the stakeholders – the students.

The Board had to review and revise the Strat Plan and APP, which are now on the student-centred model. Both the APP and Strat Plan were divided into two parts: the student-centred model and the supporting of activities. As a result, the Board came up with seven outcomes for its strategic plan, which were: raising funds; sustaining and improving recoveries; funding the right students with the right amount; better and more effectively engaging stakeholders and sharing information; research and knowledge management; clean governance and deploying resources efficiently.

NSFAS from three years ago is not the same as the NSFAS today for obvious reasons, such as the number of eligible students and the availability of funding. Thus, the structure had to be aligned to take these substantive changes into consideration.

Throughout its existence NSFAS played a night watchman role regarding student accommodation and left the rest to the institutions. The Board has observed that there is a relationship between student accommodation and performance, and this affects funding directly because students can only be funded for a number of years. This provision has been a source of discomfort and the Board was now reviewing the policies and processes around student accommodation and enhance NSFAS’ role on student accommodation.

Lastly, on general review of policies regarding student funding – this will be done in collaboration with the shareholder but NSFAS will take initiative to start the process. Hopefully, this undertaking will yield to the policies that respond to the challenges that the sector currently experiences.

Mr Andile Nongogo, Chief Executive Officer, NSFAS, thanked the Chairperson and submitted an apology about the absence of his senior executive team who were attending another meeting with the Auditor-General.

The Chairperson commented on the absence of the rest of the executives who were attending a meeting with the Auditor-General. The Chairperson stressed upon the CEO that this was an important meeting because it is about the organisations plans, which speak to the budget of the organisation. The Committee normally prefers that all senior executives of the organisation be present in such a meeting.

Mr Luthando Mehlomakulu, Senior Manager, Auditor-General of South Africa (AGSA), submitted that as far as he understood, there was no AGSA meeting taking place with the NSFAS delegation. AGSA was only having an internal meeting.

Mr Nongogo proceeded to present NSFAS’ Strategic and Annual Performance Plan and covered the reasons for the revised Strategic Plan and Annual Performance Plan; and key outcomes over the MTSF (Medium-Term Strategic Framework), which included increasing access of students to TVET (Technical Vocational Education and Training) colleges and higher education institutions to make further education progressively available and accessible, amongst others. 

Administratively, NSFAS has been faced with significant challenges. At the heart of these challenges are a suite of systems that are not-fit-for purpose and a poor governance environment with NSFAS funding policies not properly enforced.

The budget summary depicted a rather melancholic picture, because its approved budget for 2020/21 is R41.5 billion (this excludes the R6.4 billion additional budget approved by the Minister awaiting virement approval from National Treasury) and will decrease to R39.6 billion in 2023/24. The decrease in the budget does not speak to the expected increase of students accessing higher learning institutions depending on NSFAS for funding.

Briefing by SAQA on its Strategic Plan 2020-2025 and Annual Performance Plan (APP) and Budget 2021/22

Prof Peliwe Lolwana, Chairperson of the Board: SAQA, opened the briefing and indicated that SAQA has an unbroken record of clean audits and that SAQA’s board was still incomplete missing one member, whom was yet to be appointed by the Minister and had recently appointed its new Chief Executive Officer, Dr Julie Reddy. The Board was still new and has since observed that SAQA was a precursor of many organisations within the sector.

It would be necessary to refigure the organisation, which would see a new vision, functions and structure. There are functions within the organisation that still needed to be reviewed. It was necessary to find new ways of seeing education and training and functioning through SAQA. There is a lot of thinking that must go into redirecting the trajectory that SAQA has to go. SAQA has had to retrench its staff, but there is progress made on the appointments for the new structure. The new CEO was appointed on 01 May 2021, along some executives. However, the organisation has not been successful in appointing a Chief Financial Officer but it has since started the process of recruitment again.

The Board approved new redesigned structure in January 2021 and interviews to fill 81 positions on the new structure took place in April and May. Monitoring and evaluation post implementation will identify gaps in the redesigned structure. The Board expects to approve the final structure by July 2021.

Dr Reddy reported on the Strategic Plan 2020/25, which covered the Authority’s mandate; strategic focus areas; challenges and mechanisms to address them; and measuring performance of the organisation through five-year targets and outputs.

In terms of challenges, the lockdown severely affected SAQA’s ability to generate income from services. SAQA revised its revenue projection for 2021/2 and this unfortunately resulted in a shortfall of R19 million. Challenges experienced in balancing the 2020/21 budget resulted in major expense and projects being deferred to 2021/22. SAQA has mainly manual processes and aging Information Technology (IT) infrastructure. Automation of processes is a priority with any additional available resources. SAQA must ensure that we maintain a positive cash flow despite the low demand for services. Repairs and maintenance to the building are critical, as these expenses were cut in 2020. It is envisioned that the redesign and restructuring of SAQA, and the implementation of its alternative revenue streams strategy, will assist in addressing some of these challenges.

She concluded by highlighting high level risks citing that new structure may not be adequate to deliver on priorities; SAQA may not be able to generate sufficient funding for sustainability in the short term; and the loss of institutional memory due to the implementation of the new structure.

Discussion

The Chairperson sought to share some comments on SAQA and commended SAQA for its women led delegation and organisation at large. It was pleasing to witness such. On a different note, he reckoned that it was a sad presentation and in the Department of Higher Education and Training (DHET) family it looks like SAQA is the entity that has been hit very hard by the Covid-19 pandemic – in all the economic difficulties the country is experiencing. The loss of employees due to retrenchments is something that must always be the last resort. The loss of income of almost 100 employees causes an immense disruption in those families. It appears that despite the intervention of the Department the retrenchments could not be avoided.

The public sector, generally throughout the years, has been viewed as a safe area that offers employment certainty. Many public entities were also going through retrenchments and this was indicative of where the country is. The truth is that Covid-19 exacerbated a pre-existing bad economy. However, it was pleasing to see that the organisation was re-imagining its future. Hopefully, the processes of retrenchments have been handled properly.

Dr Julie Reddy, Chief Executive Officer, SAQA, said that SAQA has only appointed one executive for now and it was hoping to make an appointment sometime in May 2021, and there were now two vacant positions. She would be commencing her position in June 2021.

Mr T Letsie (ANC) welcomed all delegates and thanked them for their attendance. The Department is in the process of amend the National Qualifications Framework (NQF) Bill; is the reconfiguration of the structure going to be done after the Bill or before it is signed into law? How many staff members were retrenchments and from which functions of the organisation?

Has SAQA considered renting some of its building space, since it now has more space available in the building? On page 19 of the strategic plan, the biggest challenge is said to be funding. What is the viability of the entity in line of the budget cuts over the MTEF?

Lastly, on SAQA, can the Members table the new structure and the details of those that would be retrenchedalong with their demographics and their qualifications as well as those who will be retained?

He said that NSFAS has mentioned that this was a revised strategic plan and APP; this is explained further on slide five of the APP. On point six, it is acknowledged that the previous ones were not off good quality, amongst other reasons. Which strategic plan and APPs were revised? Is it the ones that were outsourced, for which about R490 000 was paid? If so, what is the Board planning to do about that in terms of recouping the monies and those that were within the entity who approved such bad quality of APP and strategic plan? What is the vacancy rate and when will these be filled? How many cases are still under litigation and how much is the organisation spending on such? Is there a fundraising strategy developed by the entity? Have personnel been dedicated to implement the fundraising strategy?

Both the Chair and CEO of NSFAS mentioned that one of the top seven priorities is to ensure that it pays the right students, the right money and at the right time. However, one student from Limpopo sent a query with her results showing that she was funded in 2019/20 and she progressed but in 2021 her application was unsuccessful, citing that she did not meet academic requirements. Is there an explanation about this? Surely, the new administration was aware of the infamous ‘hand of god’ at NSFAS. Has that been looked into? Are you of the view that the current NSFAS Act was inadequate and whether there is a need to review it and which areas required a review?

What kind of assurance can NSFAS provide to students to ensure that the difficulties that students were experiencing were resolved? How many cases of appeals were pending and when can they be expected to be finalised?

Ms C King (DA) said that students were extremely frustrated with NSFAS because of poor communication from the entity. The CEO said that it takes ten days to communicate to students but yet students were still contacting Members and other stakeholders as a resort to intervene. She asked what measures have been put in place to ensure that the turnaround time for communication to students was sped up. Secondly, it was stated that in 2024 NSFAS would fund 450 000 university students and 400 000 TVET college students. If NSFAS was struggling now to get R7 billion just to augment the shortfall, will it be able to fund students well into 2024 on a bursary scheme basis? The CEO alluded to the fact that the funding system for the ‘missing middle’ students should be on a load basis. She disagreed with that and suggested that the whole funding system should be overhauled to ensure that the system is reverted back as per the recommendations of the Hefer Commission of Inquiry, in 2016.

It was said that the application portal would be reviewed, but how long will that take and when will it commence to be fully implemented to avoid the anomalies on student queries?

What precisely in the leadership instability is creating challenges on ICT, which is said to have contributed to regression in NSFAS financials and compromising the service delivery performances? What plans have been put in place to ensure that this is not a deterrent of service delivery?

The ICT system supporting the core operations of the entity is not fit for purpose; is the ICT system linked to the institutions of higher learning for ease of access on student information? Are there even plans in place to ensure that this was achieved?

It was also mentioned that maintaining the ICT system was costly when looking at big data challenges and there is a skills shortage on local talent in ICT. Has the entity gone out to search for local talent or is it considering outsourcing? How much will it cost NSFAS to maintain the system yearly?

Suggestions were made for NSFAS to look into revising its student funding policies for poor and working-class students and halting funding for second qualifications. Will the funding model be geared towards funding qualifications in demand to boost economic growth? This is one view that NSFAS should be taking to consider the TVET colleges create the skills needed in the market and we should be looking at gearing the system more towards TVETs than universities. It will be cheaper and more skill people in the market will be available.

As for the Hefer Commission recommendations of 2016, which were not implemented; will we consider going on an income contingency loan system approach overall for the system and conversion later of the loans into bursaries once the academics have been successfully completed? What are the challenges with SARS (South African Revenue Services) in recovering loan repayments from debtors?

She sought clarity on NSFAS’ intention on approaching insurance companies to recover debt through payroll. As for returning students, there are students performing well academically but then find themselves in a situation where they cannot be funded; they are registered with the intention that they will be funded but then find themselves in huge debt. How many returning students are funded by NSFAS for this year? Is NSFAS funding being done on a race classification basis?

Ms J Mananiso (ANC) asked NSFAS about its comments on the new student-centred model and whether the Board would ensure that it would deploy the right personnel into realising this new model. Secondly, on decentralising personnel on dealing with appeals and day to day inquiries – it is important that NSFAS does as Members suggest because Members do not want to be seen as if they were encroaching on the duties of the entity. The entity needs to have a response strategy that speaks to appeals, communication, applications and other issues that speak to queries, in order to ensure that students are able to receive correspondence on time.

How does NSFAS monitor institutions to ensure that allowances are disbursed timeously?

On SAQA’s APP, was there indication on how much it was willing to spend on the external specialists and who those external specialists are? Lastly, on slide 50, does SAQA have a time frame in terms of splitting its budget as outlined?

Dr W Boshoff (FF+) commented on SAQA’s retrenchment and thought that the entity must have been immensely brave of leadership to present this optimistic plan to the Committee. The fiscal cliff that was predicted for South Africa was now prevalent, evidently seen from the presentations presented before the Committee. It is evident that South Africa has reached a fiscal cliff.

Ms D Sibiya (ANC) asked for clarity from SAQA about the 13 179 qualifications that were registered in April 2014, with 2 143 out of that total not having articulation options after they have registered. Secondly, on page 41, she asked about the steps to be taken against institution and service providers that have offered unregistered qualifications.

Ms N Mkhatshwa (ANC) wanted confirmation from NSFAS that the amount allocated for funding for TVET College students has decreased or not compared to the funding allocated to university students, which saw an increment. If this is true, it is of great concern because the aim is to increase the investment towards the TVET sector. As for stipends, is this the case as well between TVET and university students? Members have been calling to equal stipends for students across the board because they endure the same food or transport prices.

The top leadership of NSFAS must also be frustrated with the challenging ICT system, but the Committee needs to be brought to confidence on whether this was being attended to speedily. Student protests result from the lack of responses from NSFAS on matters of appeals. Has the fault in the delays been identified yet by management? Has the new leadership tried to identify where the fault is and is there concrete solutions to mitigate this into the future? The system can be changed but if the personnel are incapacitated to operate the system, the efforts to resolve the matter will remain futile.

On reviewing the functions of the sector in the era of Covid-19, the focus has been around the teaching and learning methodologies as well as teaching infrastructure. Are there any conversations taking place at NSFAS regarding how funding would look like in the era of Covid-19?

She expressed her concerns about the challenges that SAQA is experiencing, particularly the retrenchments that have recently taken place. “Collectively, we need to find ways to get the private to invest in the sector.”

The Chairperson said that the sentiments that he got from Members is that the Committee continues to appreciate the work of the new leadership at NSFAS in terms of turning around the institution and improving inefficiencies. One of the frustrating issues at NSFAS is the inefficiencies in the system. Members have heard about the ‘hand of god’, students being granted funding and taken off the system and many other frustrating situations students are facing. It is these kinds of inefficiencies that must be resolved in the system. The new leadership must invest more time to deal with these inefficiencies in the system. If this remains the preoccupations of the leadership, the Committee will provide its full support to the leadership to turn around the institution to be effective and efficient to be at the cutting edge of student funding. The constituencies that it caters to are the poor and the working class. It must be at the level where vulnerable students get the assistance that he/she requires for their studies.

The new leadership must be encouraged to stabilise NSFAS after a terrible era of two of administration by the former Administrator, Dr Randall Carolissen. That administration was so terrible – the audit results confirmed that; the indicators also confirm that. The first engagement with the new board was when it came to present NSFAS’ annual report – the irregular expenditure and everything was pointing to the fact that the entity is in serious trouble. The Committee resolved in agreement with the new board that the situation must be turned around, improving the audit outcomes as well as its performance. That administration period was characterised by a lot of negative things such as nepotism, the purge of staff members, maladministration, corruption, irregular expenditure and the rental of expensive upmarket apartment that amounted to R10 million. There was also the hiring of cars that were chauffer driven. The board has the responsibility to turn around that situation. The Committee has since learned that the former Administrator has been recycled to the University of Johannesburg with a good job. This is the same person who destroyed that entity, and it is extremely shocking how he was even still in the system. The Committee would need to ascertain from University of Johannesburg and maybe the Minister how a person who missed up so dismally at NSFAS to be rewarded with a good job within the same system.

The Committee has received invitation from the Board to visit NSFAS but the Committee was still processing that invitation.

After looking at the quality of the presentation of NSFAS for the revised Strategic Plan and APP – management should go back to the drawing board and look into its planning team.

NSFAS Responses

Mr Khoza responded to the appropriateness of the NSFAS Act and the funding matters that were raised during the presentation. Before answering the questions, he requested to speak from the heart regarding the challenges that the new administration was facing. We need to accept that NSFAS is the face of access to education in the country and it attracts so much anger from stakeholders. If something goes wrong, NSFAS becomes a very clear target from stakeholders. If one looks at our problems, some of them are policy matters, efficiencies within the higher education institution – for example, the well-known R14 million that was paid to a student at Walter Sisulu University. The blame went directly to NSFAS. This talk to communication and the manner in which NSFAS fails to clarify the various roles of different stakeholders within the sector.

On the NSFAS Act, it needs a serious facelift and it has substantive deficiencies, which in some cases renders it inappropriate for governance. The current Act is on a loan scheme, not a grant scheme and there has been no major amendment on the Act since shifting to the current model. Secondly, it is about the prescribed committee that NSFAS should have; the Act prescribed that there should be a finance committee (FINCO), but in this case the committee is structured in a manner that shares responsibilities with the Audit Risk Committee. The responsibilities of the FINCO are on the Act but good governance requires an establishment of the Audit Committee.

The desire for fundraising is a prescription and a requirement of the Act; it is within the Act. He said that they assume that raising funds should be done over and above the normal allocation that NSFAS receives from the shareholder and these funds could be employed for purposes that may be outside the current funding pool. There are certain challenges that the entity must overcome for this to happen, such as whether the organisation was fit to purpose and capacitated to deal with more funding. Perception also plays a significant role in the quest to obtain more funding. Fundraising would be easier to pursue if the current challenges were being dealt with. He assured the Committee that the Board was dealing with these challenges. The board will share more of its plans in dealing with these challenges when it meets the Members in person.

Mr Nongogo apologised for the absence of the executive team and since the intervention of the Chairperson, the executive team was now present. He also clarified that the executives were in a steering committee that deals with the interaction and engagement with the AG. The meeting was internal in nature. He apologised for any misunderstandings that may have been caused. The meeting was for the preparation of engagement with the AG.

Firstly, on the strategic plan and the reasons for revising the plan, he responded that Members would recall that not so long ago that the AG indicated that the APP was a disclaimer. This required a review of the APP but through the strategic plan. He could not comment on whether the APP that was off bad quality was the one that was prepared by the consultants.

In terms of the vacancy rate, he explained that it was difficult to calculate it because the entity was working on a structure that was approved by the previous board. During administration, the board worked on a critical vacancy list, which was designed to fill the critical positions that were required to address the organisation issues. The filling of positions has been suspended pending the review of the structure. Some of the positions may be deemed redundant in the new structure but there are statutory positions that are necessary and those would be filled. The Board has asked management to review certain aspects and is confident that these posts will come out on Sunday after this meeting.

NSFAS had four cases but three of them have been resolved. These cases involved the funding of students. There has to be a distinction between the actual legal cases and cases where a legal opinion was required – the amount will be separated and provided to the Committee separately.

The Board has mandated one of its committees to formulate the strategic priorities of the board together with the key projects of the entity.

As for the Limpopo student query, what happens is that NSFAS has a call centre and any other mechanisms that attend to student queries but students do not necessarily have faith on the entity to resolve their issues. However, in some cases students are not aware of these mechanisms and that are available for them to utilise. The entity now is in the process to increase the personnel in the call centre because the volume of calls is more than the personnel in the call centre.

As for the results, the ones that we get from institutions come from the Department – the TVET college results to be specific; some of these results are then cross-checked with the institutions and in some cases, decisions are made based on the results that are before the NSFAS team. In some cases, these results do not communicate with each other. The entity does send teams from the office to assist in the administration of data in TVET colleges as well as attending to queries in those colleges. The biggest challenge for students to not be paid on time in the TVET colleges is due to the wallet payment system, and this is because of unscrupulous people who are trying to hack into this system, which in turn affects the students.

The entity was improving its communication engagements; it has since been engaging with the South African Union of Students (SAUS), Universities South Africa (USAf) and other student-led stakeholders.

As for appeals, the process closed on Friday and the entity is still relying on institutions to manage the process for itself but in the second term, the entity would take this process up and do the work directly. NSFAS received about 17 000 appeals from new students and about 6 000 of those have been approved; for other cases, the entity is waiting for supporting documents and others were rejected. The entity has taken a decision that it has to apply a closed-ended system when dealing with the matter of appeals. The challenge with keeping these matters open-ended is that NSFAS is unable to quantify properly the finances that would then be required from the application appeals.

In the main, what takes long from processing the applications is that they are reviewed manually and that takes time. The plan is to automate the process in order to speed up the processing times. Part of the issues of NSFAS stem from ineffective IT. It is impossible for the entity to keep up with IT developments, but the team has taken a decision to take cross-sourcing model.

The position of Chief Information Officer (CIO) as well as the advisor who was assisting in that regard has not been filled but there is an Acting CIO appointed and the process to appoint a permanent CIO has commenced.

The current system is not linked with institutions, but there is a utilisation of portals, which is inadequate at the moment. TVET colleges are struggling with the infrastructure to even establish a link between the NSFAS and institutions’ systems.

The entity has two major systems and the amount spent on licensing is approximately R3 million but the full costs would have to be evaluated on the time spent on these systems and trying to fix issues that are happening within the system.

On the funding of qualifications that will be part of the economic growth of the country – this morning he signed a letter to engage with SAQA on this matter but this was also elevated to the board level.

NSFAS is aware that the Minister was forming a task team to review the matters that were raised in the Hefer Commission.

NSFAS is funding over 600 000 students and these are eligible students and universities are beginning to send registration data and the entity was assisting the TVET colleges that were struggling with this.

Race was not part of the criteria in making funding decisions for students.

The decentralised model: this is before the consideration of the board and to fully implement this process requires waiting for the results of the Ministerial Task Team’s recommendations. NSFAS does send teams to institutions that require help in assisting students.

On the reduced amount of TVET allocations, the amounts have remained the same and they have not been reduced but there are instances where it may appear so.

As for equality between TVET and university students, he indicated that this is a matter before the Board and these matters are part of the policy considerations. This also applies to student accommodation and the Board is considering that accommodation should be the same between these students.

On the management system, he responded that, as the CEO, he is tasked with turning around the organisation and the team has to work with what it has. It is easier for systems to be acquired but what he is continuously working on with human resources are mindsets of the staff within the organisation.

On issues around Covid-19, he said that in the context for NSFAS there has been more demand for funding and through the task team this is some of the work that will be looked at, along with ensuring that the academic programme continues in that trajectory.

In terms of appeals, NSFAS has analysed all the steps and processes that are followed but they have since been streamlined and it was picked up that there were a number of redundant steps, which make the turnaround time longer. Management is working on streamlining these redundant processes. The discretion applied on appeals is sometimes inconsistent by the appeal officers – this cannot be denied.

The Board had three months of the financial year to effect changes on the organisational outcomes and some of these matters take time to resolve in nature. However, those that are swift in addressing have since been addressed.

SAQA Responses

Ms Peliwe responded on the amendment bill and she confessed that she has been shy about it in terms of tackling it because when she arrived in SAQA she knew that it was one long outstanding issue. Members have now moulded the team to take a pause and look at it, and before the end of the month the team would get in touch with the DDG of Planning to begin engaging on this.

It has taken a lot of strength and emotion to go through the retrenchment process. She said that she was convinced that this was managed in the best possible way.

She thanked the Members for the compliments pile to the leadership team and this was not by accident but it was intentional. One of the reasons why senior appointments have not been made fully is because the leadership wants a leadership that represents the demographics of the country.

Ms Reddy said that the team is waiting for the SAQA Act as amended to be proclaimed and it has developed a design for the electronic misrepresentation and fraud registers to add to the national learners’ record database management information system. The team will need additional funds to action this into an electronic system and many of the other functions have been considered and incorporated in the redesign of the SAQA structure.

The units that have been closed are the advocacy, communication and support function and the national learners’ record database as a stand-alone function and international liaison. Many staff members were affected by these closures but were given opportunities to them to interview for positions across the organisation. The entity is not only looking for competence but also attitude and the willingness to be re-trained and redeployed. Many of the lower-level staff have shown that, going forward, can repositioned themselves in other functions and learn the job.

The staff cuts were implemented across all levels including management; three directors and some deputies have been retrenched but due to the delays from section 189 consultations, the first cohort of staff were retrenched on Workers’ Day. Any further delay would have required the payment of an additional months’ salary, which would mean that more positions would have to be cut. The Board has instructed the team to minimise the number of positions as far as positions; hence the retrenchment had to be instituted at the beginning of the month of May. The process was carefully and sensitively considered. Therefore, in the spirit of fairness and transparency, management interviewed candidates for every job on the new structure on all levels to inform the appointments in the new structure. There were very few jobs that were considered sacred cows and ring-fenced for existing members. Organised labour (NEHAWU) was also invited to be part of the interview process as observers for their affected members. Only a few positions with no additional applications were where staff remained in their positions. In some way, SAQA is now a new start-up organisation.

On ensuring financial sustainability given that in the last financial year SAQA started with 44% from voted funds, she said that the aim is to keep the salary bill very low and in line with voted funds going forward and to raise additional income through a diversified funding strategy to fund operations and capital costs.

On the entity’s ability to manage transitional arrangements, she said that there is a plan in place to achieve this in consultation with QCs and DHET and there are firm timelines and delivery arrangements to end the transitional arrangements.

In terms of the building, SAQA is now located in between two clubs, which is very noisy location and it is a students’ area for the University of Pretoria. Management is looking into the feasibility to get the money back because with the streamlining, SAQA might need less space that it needed before and flexible working arrangements.

The redesign was done in 2020 and it was not part of the APP because at the time SAQA was not planning to fast track the redesign process. Subsequently, management made presentations to the board and the board ring-fenced R1 million to procure the specialists. Management was able to find two companies – a repositioning specialist company and the second company to populate the new staffing structure based on changed management. Management has retained the second specialist agency to assist with the monitoring and evaluation. There are some funds available from the ring-fenced amount, which will be utilised.

In terms of reallocation of the budget for the new structure, it will be done in the next month – management was looking into the finalisation of the structure and implemented and then align the budget, APP and strategic plan.

On qualifications registered without the articulation options, she said that many of the qualifications spoken of are non-compliance legacy qualifications, which were deregistered after reaching the end registration date; others will be re-packaged and registered as new qualifications. The non-compliant qualifications, in terms of articulation, are being addressed. Since the strategic plan was produced, the numbers have been reduced to 74 higher education qualifications and 75 occupational qualifications that have no articulation pathways. As of 31 March 2021, there are 62 additional higher education and three occupational qualifications that have been addressed. The team was now waiting for information on the last remaining 84 on all three sub-frameworks.

As for providers offering unregistered qualifications, he said that when it comes to SAQA’s attention it investigates; if confirmed, it reports to DHET, take action and shuts down the bogus institution. There is also a record kept on these bogus institutions. Once the Amendment Act is proclaimed, SAQA will into recording this information. 

She thanked the Committee for the opportunity and said that the retrenchments were heart breaking and we are all deeply affected, but the entity’s leadership needs to persevere for the organisation’s sustainability. The entity will maintain the list of retrenched staff and they will be the first to be called back when the situation improves.

The Chairperson thanked entities for their responses and indicated that some of the responses will be provided for in writing. He was pleased with the fact that the NSFAS Act matter was raised as well as the N+ rule. The Act is quite outdated and needs to be looked at – this will be followed up with the Department. The Committee will also initiate a conversation with the Department on the N+ Rule so that it can be properly explained.  

The Chairperson handed over to Ms Mkhatshwa to act as Chairperson.

Minister’s Remarks

Dr Blade Nzimande, Minister of Higher Education, Science and Innovation, apologised that he would be departing the meeting just after 15h00 due to an engagement that he could not shift. He suggested that all questions that may come after will be noted and deliberated on, and responses will be submitted in writing to the Committee. All matters that come out of the Committee meetings are deliberated and discussed further by the Minister and senior management in the Department – the Minister’s Management Meetings (MMM).

He provided the context to the APP and Strategic Plan of the Department. This is the third annual plan for the implementation of the 2020-2025 strategic plan of the Department. It is guided by the National Development Plan (NDP). When the strategic plan was tabled in Parliament in 2019, Cabinet had just approved the 2019 White Paper on Science and Innovation and worked on the Decadal Plan, which is essentially the implementation of the White Paper. Subsequently, he informed the Committee that the Strategic Plan would need to be reviewed in the light of the White Paper and then pending Decadal Plan. This Decadal Plan has since been referred to as a draft since its adoption by Cabinet; this enabled the Minister to have consultations with other Ministers, especially those with portfolios that are STIs (Science, Technology and Innovation) intensive. Cabinet must adopt the draft so that it forms the basis for enrichment as he engages with Cabinet. In as much as the Decadal Plan is about government’s approach and mainstreaming science, technology and innovation into the entire government operations, there are departments that are STI intensive.

The adoption of the ‘Draft’ Decadal Plan was allowing certain decisions as contained in the White Paper to immediately kick in, such as the Annual Science, Technology and Innovation Plenary. This is a stakeholder body that is contained in the White Paper, convened by the President, calling all stakeholders in the broad STI sector. The aim of the Decadal Plan is not only to mainstream the STI in a broad sense in government but to mainstream in the whole of society, which means there can now be an Annual STI Plenary. The adoption of the Decadal Plan means that the President will soon appoint an Inter-Ministerial Committee responsible for overseeing the implementation of the Decadal Plan from Cabinet level. Hopefully, this will enhance the responsiveness of national system of innovation to the country’s social and economic challenges and improve coordination of STI matters across government and the broader society. The setting up of the two structures is going to be first in a range of implementation actions that will give full effect to the policy in terms of the 2019 White Paper. Amongst other things contained in the White Paper is the necessity to set up a Sovereign Innovation Fund in order to move closer to the goal of having 1.5% of the gross domestic product (GDP) spent on STI.

The APP is also inevitably influenced by the past year that the country is emerging from – the year of the Covid-19 pandemic. On 23 March 2021, the President declared the national state of disaster and announced measures to combat the spread of the virus, as well as a stimulus package of R500 billion, which was intended to support various initiatives. It then revolved to an Economic Reconstruction and Recovery Plan (ERRP). As part of the ERRP, there is the Presidential Youth Employment Initiative, which was introduced as an employment stimulus based on the R100 billion allocation for job retention. This initiative has been incorporated in the ERRP as a Presidential mass employment for the youth. The DSI has really played an important role in mitigating the impact of Covid-19. For instance, in the wake of Covid-19, the Department set aside R69 million from the constrained budget for research and related activities that were linked to tackle Covid-19. The money went towards funding for epidemiology of Covid-19 since June 2020. This research has led to the discovery of the first variant of Covid-19, which contributed globally in sensitising the global scientific community of the mutation of this virus. There is significant work that has been done. It would be beneficial to reflect in a more detailed account on the role of science during the pandemic and after the pandemic. South Africa is proving to be on the cutting edge of genomics surveillance work for Covid-19.

The other work has been social science and humanity research in support of the National Coronavirus Command Council (NCCC) and Cabinet. This work has been led by the HSRC (Human Sciences Research Council) and the National Institute of Humanities and Social Sciences; they have done important surveys and research, dealing with the attitude of the people towards Covid-19 and vaccines. This work has fed into the work of the NCCC as well as the Department of Health to better respond to the pandemic.

The CSIR (Council for Scientific and Industrial Research) has set up a dashboard, which enables the Department to study how the pandemic is manifesting itself even up to district level in the country; the dashboard reveals in each district, what is happening.

We have now established an observatory to follow and track Covid-19. This is a multi-disciplinary structure made up of health scientists and date scientists as well as the SARS (South Africa Revenue Services), because it is important in tackling economic impact, and Stats SA (Statistics South Africa).

As for the ERRP, the major thrust of the ERRP is to take the economy forward and forge a new economy. This will allow us to confront in new and fresh ways the triple challenges of poverty, inequality and unemployment. Science and innovation are central in building that new economy. As part of the work by the Department in supporting the ERRP, the Minister presented to Cabinet, in January, a STI strategy, in support of the ERRP. It submitted and approved a Skills Development Strategy as well as an Innovation Strategy, in support of the ERRP. It would be beneficial to come and present specifically the Innovation Strategy, in support of the ERRP. There is very important work, which has already been done in support of various industries. The Department has played a crucial role in the vaccination process. For example, Biovac has been playing an important role by storing the vaccines and distributing these vaccines. The President has established an Inter-Ministerial Committee (IMC) on vaccines and the Department leads one of its work streams, which is work that needs to be done to develop our own Covid-19 vaccine and most importantly to produce and manufacture and distribute vaccines going forward.

Lastly, some of the work that is done is to align the two Departments. The Departments must be aligned because they already do a lot of work together. He asked DG Mjwara to coordinate in the process of aligning the work of the two Departments.

On appointments, he indicated that one DDG position has been interviewed for and the Department is in the process of taking this to Cabinet for appointment.

The Chairperson thanked the Minister for his overview statement and submitted that if nothing is done to save South Africa’s economy, the country might hit a fiscal cliff. However, due to government’s interventions, this is being avoided.

Ms Mkhatshwa welcomed the Decadal Plan and said that the interventions of the Department are appreciated. Members share the same sentiments on the aspirations of an increased budget for the DSI in order to continue the work that it has been doing in relation to Covid-19 strategies.

The Chairperson welcomed the proposal of the Minister to receive the briefing on the Department’s plan on the ERRP. The Committee will try and find time and squeeze the Department in the programme. Otherwise, it will be scheduled for the next term.

Mr Letsie, through the chat box on the Zoom, asked the Minister why the government was not considering closing the line between South Africa and India, having noted the mutation of the Indian variant.

The Minister said that the point that Mr Letsie raised is very important and with certainty it is point that well be tackled by the NCCC. Already, there are a number of urgent concerns that must be addressed; one of those is the threat of the third wave.

Briefing by the Department of Science and Innovation on its 2020-2025 Strategic Plan and 2021/22 Annual Performance Plan

Dr Phil Mjwara, Director-General, Department of Science and Innovation (DSI), presented the Strategic and Annual Performance and touched on the Department’s mission, vision, values and brand; context of the 2021/22 Annual Performance Plan; Science, Technology and Innovation in the NDP; 2019-2024 Medium-Term Strategic Framework; the 2019 White Paper on Science, Technology and Innovation; planned initiatives to support the  Department’s institutional outcomes; the Department’s contribution to the national COVID-19 response and the Economic Reconstruction and Recovery Plan; Medium-Term Expenditure Framework  (MTEF) for the Department and its entities; and infrastructure projects.

Discussion

Ms Mananiso appreciated the presentation but asked about outcome six on the matter of district model and for the progress report on the districts that the Department has been working on. What are the timeframes and progress for the TIA (Technology Innovation Agency) and SANSA (South African National Space Agency) reviews?

On programme two: what factors were behind the R10 million decrease on the NRF (National Research Foundation) allocation as well as research and development and IKS (Indigenous Knowledge Systems). She sought clarity on the increase of the allocation of R600 000 to R3.5 million for entertainment.

On programme four, what is the implementation status of the new postgraduate funding policy and how far is the effort to expand the research output submission system to include other research institutions? What progress can be reported in relation to the RPL (Recognition for Prior Learning) programme?

The Acting Chairperson noted the continued concerned regarding funding in the sector, particularly on research and development. Some of the concerns that young people she engages with have raised: the funding of fewer post-graduate students due to the fiscal constraints is felt by the students and it must be balanced. The decline in NRF grant and the research grant: this was concerning but it was highlighted in the previous year when the budget cuts and reprioritisations took place.

There is a going concern on the STEM (Science, Technology, Engineering and Mathematics) in a way that can contribute towards commercialisation and supporting institutions of higher learning for students to get opportunities to innovate their research and not have to wait for that after their undergraduate studies. How do we integrate STEM beyond science and innovation institutions such as CSIR, finding ways to inculcate innovation into procurement processes and the delivering of basic services in society? This is what young people are saying. The budget, in comparison to what is sought to be achieved, contradict each other. This is concerning.

Ms King was concerned about research and development (R&D) as well as the tax incentives, that it might end in October 2022. Have there been discussions with Treasury to look at extending the programme? Is there any analysis that has been done to see how effective it has been to the emerging entrepreneurs that came into the space of innovation?

Since 2019, there was a discussion around the Decadal Plan and she was pleased to see that it is taking effect in implementation but wanted to know whether the district development model is properly highlighted in the Decadal Plan and whether it is linked to give expression to the white paper on science and innovation.

Dr Boshoff asked about the Innovation Fund – whether it was related to the statement that the Minister Finance discussed with his Committee earlier in the week or if it is something completely different. How is it envisioned?

DSI Responses

Dr Imraan Patel responded to the district development model and said that it is a new approach to development in the country. Prior to the formalisation of the model, for 1/3 of districts, the Department was working directly with the municipalities and the rural districts. In those projects, there were variables in terms of their success. These were existing districts. The model is also introducing a new way of working, which will create much more benefits for the kind of science, technology and innovation activities. In the past when the Department worked with districts, it struggled with a number of issues because the science and technology element was de-linked to the broader district development. Under the new model, the Department is auditing where it currently is with districts and is developing a Geographical Information System (GIS) to project where the Department is working, in terms of districts. The second part of the work is that the Department is starting with districts where the Minister and DM assigned as district champs, which included Zululand and eThekwini. The Department has a second phase of EU funded programme called the Viability Validation for Service Delivery Programme. It is gaining traction and it is a way of matchmaking the district requirements and what the science technology community has to offer. The Department recently had a workshop where the districts with the framework were presented and identifying the areas where science and technology can help science councils and other research institutions, to ask them which technologies they had that they believed could make an impact in terms of service delivery.

With regards to the tax incentives, the Department has done an impact assessment study and tapped into the World Bank capacity to do an impact assessment study because it was able to access the date from SARS and the other work that it was able to build on. There were a number of other assessments that were done by other stakeholders. The Department took the studies and reviews and did an assessment on the impact of R&D tax incentive. On the basis of those reviews, at the moment there is a keenness to continue but the DSI has completed a discussion document with Treasury. This document will be utilised to initiate conversations with the stakeholders to feed into the process before the Minister makes an announcement on the future of R&D tax incentive. At the moment, it looks like it would continue with improvements and adjustments taking into consideration the inputs of the stakeholders.

Dr Mmboneni Muofhe, DDG: Technology Innovation, DSI, commented on the timeframes for the review of the space agency and the technology innovation agency. The review of the latter is expected to be finalised at the end of this month and the space agency had some delays because it wanted to present the new business model, which was in the process of reviewing. The plan is to finalise the review by the end of this financial year, and the Department has started working on all necessary preparations.

Regarding the youth innovation fund, he said that the fund has been discontinued. However, with the implementation of the innovation fund, the Department has made provision of the prioritisation youth originated inventions in a well-resourced manner than the innovation fund. The innovation fund was allocated to the Department to facilitate the commercialisation of locally developed innovations and technologies. This is implemented in partnership with a number of entities who are bringing their own funds directly to the projects.

Dr Yonah Seleti, Chief Director: IKS, DSI, responded to the postgraduate policy and said that the implementation began in 2020, and Members did pick up that there was a decline in the numbers of postgraduate students funded. This has received attention and the advice to prioritise the funding for students by the Committee was heeded. Thus, in the 2021/22 year it will be implemented.

On the IKS work, Members would recall that in 2019 the Indigenous Knowledge Act was signed and it has to be implemented in terms of the budget allocation available. Therefore, hard choices had to be made in the implementation of the Act. For a short period of time, the budget that was meant for research and development was being refocused to complete the development of aspects of the Act in order to commence the implementation of the Act in 2022. That money is going towards the finalisation of the norms and standards for RPL and public awareness to make communities aware of the Act; this has been implemented, and it is ongoing. The R10 million is helping to get ready for the implementation of the Act, such as issues of RPL. He is now in Limpopo where the team is finalising the norms and standards for traditional healing. Come 2022, the different parts of the Act would be ready for implementation and establishment of the office.

The national record of system will be part of the national indigenous office and in the implementation of the Act, it becomes institutionalised as a component of these offices. It will become the beginning of the provincial offices on indigenous knowledge.

This is where the R10 million shortage in the NRF budget is going.

There is a reduction in the knowledge output on the NRF, which is called the ‘knock-on’ effect. The budget being cut in the NRF, as well as shortfalls, reduces the knowledge assets of the coming out of the system. To a large extent it is compounded by the budget cuts. The Department will aim at prioritising research component going forward.

Mr Robert Shaku, Acting Chief Executive Officer, DSI, responded to the question on increased entertainment, saying that when Treasury imposed cuts there was no line item that was spared. The Goods and Services budget was also affected. The Department looked at areas where there would be minimum impact and given the fact that most are happening virtually, the team identified entertainment as one of the areas where budget can be cut.

Dr Mjwara added that the question was about why it increased – even though it looks like it has increased but it has actually decreased. During Covid-19, there was a much less allocation but in the outer years it may have been increased due to the anticipation of expenditure as a result of engagement internationally.

On the funding issue, the Department’s view is that if it succeeds in getting other departments to see the role of science and innovation in support of what they can do, they will allocate some budget towards activities. The DSI does not have the budget to do the modernisation of the mining sector, for example, or even agriculture. One of the consultations currently happening is to establish whether this can be done. The Department believes that provinces could also be encouraged because some of these activities are happening in that space and perhaps come budget could be earmarked on that level.

The Acting Chairperson thanked the Department for the presentations and noted the importance of initiating inter-portfolio conversations.

The meeting was adjourned.