Council on Higher Education (CHE); South African Qualifications Authority (SAQA); Quality Council for Trades and Occupations Annual Reports 2021/22

Meeting report

Opening remarks

The Chairperson referred to allegations made by Ms N Chirwa (EFF) against Minister Blade Nzimande. The Minister had said he was uncomfortable with the allegations of him “ enabling corruption and supporting crime in his department” without evidence. The Chairperson had looked at the recording of the meeting. There was no basis for Ms Chirwa’s comments. Ms Chirwa had to withdraw them as she had not brought any evidence to substantiate her allegations. Ms Chirwa was not in the meeting at this time.

Quality Council for Trades and Occupations (QCTO) Annual Report   2021/22

Ms Sibongile Andoni, Acting Chairperson, QCTO, said the QCTO had had to adapt to minimise disruptions of lockdown regulations on teaching and learning. One of the biggest achievements was the gazetting of the Occupational Qualifications Sub-Framework (OQSF). The implementation of the OQSF positioned the QCTO as a key role player in the post-school education and training (PSET) sector and would be a game changer in skills development. She said the QCTO had achieved its sixth consecutive “clean” audit opinion and appointed Mr Vijayen Naidoo for a second term as chief executive officer (CEO). She said 24 out of 31 targets (77 percent) were achieved.

The CEO, Mr Naidoo, said the QCTO had contributed to the Economic Reconstruction and Recovery Skills Strategy (ERRSS) plan. He said it was critical that the performance of the organisation be seen against the backdrop of the reduction of the Sector Education and Training Authority (SETA) levy grant from R97,3 million in 2020/21 to R67,7 million in 2021/2022. The total operating budget for the year was R133,6 million and the QCTO had not discontinued any of its planned activities because of the budget cut. He said the QCTO was aware of the Minister’s correspondence with the National Economic Development and Labour Council (NEDLAC) regarding the nomination by NEDLAC of members to fill the vacant council posts and that the appointment of the Chairperson was with the Minister.

He then spoke about the implications of changes in the OQSF and the strategic imperatives of the QCTO.

In Programme 1: Administration, the completion of some of the planned projects in the Master Skills Plan (MSP) for 2021/22 were impacted by a Treasury instruction to halt all procurement above R30 000.

In Programme 2: Occupational Qualifications Management, Assessment and Certification, there was a shortfall of 19 skills programmes recommended for registration as the applications did not meet QCTO standards and because of in-house processing delays.

In Programme 3: Occupational Qualifications Quality Assurance, some indicators would require an enhanced, focused approach to quality assurance and improved advocacy. Some indicators were not measurable as the envisaged ministerially approved plan was not in place. The indicators were revised and would be measured against the ERRSS.

In Programme 4: Research Analysis and Quality Assurance, targets were fully achieved.

He then provided human resources statistics.

Mr Innocent Gumbochuma, Chief Financial Officer (CFO), spoke on the financial performance. He said there was a net deficit for the year of R12.48 million. However, this was an accounting deficit and not a real one because the QCTO was granted approval to retain its accumulated cash surplus of R23.6 million to cover the shortfall in the budget. The SETA levy grant was increased from R96.1 million for the 2022/23 financial year to R111.6 million for the 2023/24 financial year, although R212 million was applied for to ensure that the organisation had sufficient resources to bolster its core performance areas. The QCTO was still finalising the purchase of its premises which would reduce costs significantly. The QCTO had included, in its budgets for the 2022/23 financial year onwards, revenue sources previously unbudgeted for. Approval for the retention of cash surplus was submitted to Treasury. The council’s funding was unstable and relied heavily on the SETA levy grant.

Mr Naidoo said that Mr Gumbochuma had resigned and accepted the CFO position at the SA Qualifications Authority (SAQA).

Discussion

The Chairperson asked about the finalisation of the office of the chairperson of the QCTO. She asked for more clarification about the targets that were not met because a ministerial plan on the outcome of TVET colleges offering occupational qualifications was not approved.

Mr W Letsie (ANC) asked what role the QCTO played in solving the backlog in certification of SETA learners who had finalised their training. He commended the clean audits of the QCTO. He asked if budget cuts and the skills levy holiday had impacted QCTO achieving planned targets. He asked about the unbudgeted revenue in the period under review.

Ms J Mananiso (ANC) said her concern was that the QCTO needed to be realistic in their planning. She wanted more clarity on the supply chain management (SCM) challenges. On the research programme, she said the QCTO had produced three research reports. What was the focus of this research? She queried about the high vacancy rate. How many skills programme applications were received and from which provinces did the applications emanate?

Dr W Boshoff (FF Plus) said that an attempt to make FET colleges learning places of choice might be taking away learning opportunities for those who could not be able to attend these colleges but had a place in the economy.

The Chairperson asked for an update on the QCTO precinct which had not been finalised.

South African Qualifications Authority (SAQA) Annual Report

Prof Peliwe Lolwana, Chairperson, SAQA Board, said that their CFO had left due to poor performance and a senior executive had also resigned. SAQA was aware that it needed to reposition itself and reconsider its strategy. She noted that Dr Julie Reddy, the current CEO, was retiring and that she would be replaced by Ms Nadia Starr, who was already in place. She said the final structure of SAQA was approved in March 2022 and a retrenchment process began in April 2022 ,as the new organogram meant that staff went from 194 to 82 members. SAQA continued to be impacted by Covid-19 and its revenue generation was affected by challenges related to third-party verifications of qualifications.

The incoming CEO, Ms Reddy, said 80 percent of its performance targets were met.

In Programme 1: Executive Office, Governance, People and Strategy (GPS) Division, all targets were met.

In Programme 2: Registration & Recognition, the target to register qualifications recommended by quality councils (QC)s that met all SAQA’s criteria within four months of submission, was not met.

In Programme 3:  National Learners' Records Database (NLRD) & Verifications, two targets were not met. These were that all recognised professional bodies load professional designation achievements that met the requirements on the NLRD; and the target to complete all applications received for the verification of national qualifications within 25 working days.

In Programme 4: Authentication & Ratification, the target to complete all compliant applications received for the evaluation of foreign qualifications within three months, was not met.

Programme 5: Research, and Programme 6: International Liaison, met all their targets.

SAQA received an unqualified audit opinion. Ms Starr said the audit found irregular expenditure of R496 800 for a non-responsive request for quotation and an application for condonation was made to the National Treasury. Phase 1 of the automation project was completed.

Discussion

Mr Letsie said technology had to be embraced to respond to qualification verification as the time taken of around three months was not in the best interests of the applicants. He suggested that blockchain technology be used. He congratulated SAQA for taking women’s empowerment seriously. He wanted to know about the skills of those whose qualifications had been misrepresented and from which countries the applicants came. What motivated the applicants to misrepresent their qualifications? What was the underperformance ascribed to the CFO that had left?

Ms Mananiso wanted clarification of the R48.4 million underspend. Was SAQA confident that the target for authentication services to be fully automated by 2022/23 would be met? What is the current status of the project? What was the aim of revisiting the organisational structure and what was the impact of the service delivery backlogs?

Ms K Mahlatsi (ANC) asked about the impact of the retrenchments, which reduced staff from 194 to 82. Was the institution able to adjust? Did the employment of temporary staff reduce the backlog of work? She was concerned about the target that was not achieved within its timeline relating to the completion of applications received for verification of qualifications. What was the timeline? On irregular expenditure and a request to the Treasury for condonement, she asked what the reasons forwarded for the condonement were. On the automation project, she asked when they would have a functioning automated system. Did they think they would achieve all their targets in the current financial year? 

The Chairperson asked for an audit action plan. In interactions with the National Student Financial Aid Scheme (NSFAS), it had been brought to their attention that institutions were still offering legacy qualifications that had reached their term, which impacted students’ eligibility for funding. What were SAQA and Council for Higher Education (CHE) doing about this? She wanted to know why SAQA had an interim CFO.

Dr Boshoff asked how the automation of the comparison of qualifications would work.

Ms Mahlatsi asked if SAQA had done more than their target for checking authenticity of qualifications

SAQA Responses

Dr Reddy said the comment on turnaround times was noted. Manual processes delayed the work, but the main problem was that a lot of the information was not digitised. If information was in SAQA’s database, the turnaround time was 24 hours. There were also delays in getting information loaded onto their system from higher education bodies. She appreciated the idea of using blockchain technology.

She said SAQA would compile information for the Committee on the number of misrepresented qualifications. SAQA was looking at alternative methodologies of validation to assist in recognising the qualifications of refugees and asylum seekers from other countries.

She said R22 million of the underspending related to the automation project and the remainder was funds SAQA had to put aside for a labour court matter on retrenched staff involving NEHAWU. SAQA was also looking at moving out of its premises as they were very old. The Minister had given permission, and if the court case was won, the money set aside would be used to support the relocation.

Currently, SAQA is working on a hybrid staffing model where people do multiple portfolios. There has been some progress in the automation project. Temporary staff were drawn from among retrenched workers.

On the programmes’ performances, she said that the work was completed but not within the envisaged turnaround times.

She said she did not have the information on how far behind SAQA was in terms of its backlog. The director general and the board had asked for monthly reports on the backlog. There had been a lot of IT problems.

The irregular expenditure related to SCM. There was a difference in opinion between the audit and risk committee and the internal auditors about whether that had been irregular expenditure. The issue had been whether adequate time had been given to a tenderer to respond. 

SAQA had not met its timelines for the first three quarters and it continued to be a perennial problem.

She said the interim CFO was on standby to do the financial statements. 

On the legacy qualifications, she said the Minister had said that from the end of 2023, there would be no legacy qualifications and everything would be aligned to the new National Qualifications Framework (NQF) Act, but candidates who were already in the programme would be given a window to complete their qualification.
 
Regarding misrepresentations, Ms Starr said the countries with the highest were Zimbabwe and India, for school leaving qualifications and national diplomas respectively. The reasons given for the applications were for further study and critical skills visas.

On the automation project, she said SAQA was already looking at how to use technology better. The project was delayed at the start but within the first three months had done a year’s worth of work. The project would close at the end of 2024. As automation was implemented, staff would have to be retrenched but IT specialists would be introduced.
 
She said automation would overcome a big hurdle by resolving payment issues.

Prof Lolwana said the CFO issue was a sensitive one. SAQA had become aware of some suspicious activity not related to finance. Together with Dr Reddy a decision was made to suspend the CFO. During the audit, a lot of underperformance by the CFO was discovered, resulting in a parting of ways. The CFO had taken SAQA to the CCMA but SAQA was confident its decision was the right one.

She said that in moving forward, SAQA needed to clarify its mandate as there was a lot of overlap and redundancy with other bodies.


QCTO responses

Mr Naidoo referred to the ministerial plan for Technical Vocational and Education Training (TVET) colleges and Community Education and Training (CET) colleges. He said the department had implemented the Centre of Specialisation (CoS) project, where 13 qualifications were piloted at TVET colleges. The QCTO had expected the number of qualifications in the CoS project to increase, but that did not happen. The plan awaited from the Minister was for an increase in the number of qualifications from the original 13. 

On the QCTO’s responsibilities for certification, he said it had been working with the Construction SETA but had not cleared the entire backlog.

Their plan had not been adjusted because of fiscal constraints.

On the vacancy rate, he said the approved organogram had 246 posts with a high vacancy rate of 59 percent, but there was only funding for 114 posts. So the actual vacancy rate was 11 percent. The QCTO was looking at the revision of the organogram.

He said he did not have details to hand of the providers of the skills programme in the different provinces and would provide a written response to this.

On Mr Boshoff’s question on how the automation of the comparison of qualifications would work, he said it was not the intention to change TVET colleges into another type of college where the output of trade skills would be negatively impacted. Qualifying in a trade would now not be a dead-end programme and could lead to higher levels of the NQF.

On how unbudgeted revenue was used, Mr Gumbochuma said it had boosted revenue and mitigated the deficit in funding.
           
He said the SCM challenges were mainly regarding a tender which was non responsive, as all tenderers had not met the criteria.

Mr Naidoo said their CFO, Mr Gumbochuma, had resigned from the QCTO to take up the post at SAQA.

Mr Zukile Mvalo, Deputy Director-General: Skills Development, Department of Higher Education, addressed the funding of the QCTO. It was critical to ensure that the QCTO was well funded. In 2020 with the advent of Covid, the President announced a skills levy holiday, so for four months, employers did not pay this levy. This equated to a loss of revenue of R94 billion in the SETA skills system. This had implications for the department and its entities and it had to develop revised budgets and plans. The department had been at NEDLAC, where consultation took place on the National Skills Development Plan for the Economic Reconstruction and Recovery plan and it was here where funding of the QCTO was explicitly addressed. Clearly, the QCTO had to be funded at one percent and not the current half a percent. It could only be done once the SETA grant regulations were reviewed and finalised.

On the appointment of members of the board, he said the board had to have two members from NEDLAC. Nominations had been received for representatives of community constituencies, but they were still awaiting nominations to represent organised labour despite many reminders to NEDLAC. He added that the appointment of the chairperson of the board was imminent.

On purchasing a building for the QCTO, he said the department had engaged with the council on certain matters regarding this issue.

Council on Higher Education (CHE) Annual Report 2021/22

Prof Mvuyo Tom said he was the Interim Chairperson of the CHE as Themba Prof Mosia’s term had ended in July and the term of the council would end in December. He said one senior management position, Director of Accreditation, was vacant.

Dr Whitfield Green, CEO, CHE, said 96 percent of the targets were met. In the data management sub-programme the target for the number of data uploads target was not met because of challenges with a service provider that had not been approved by the Treasury and who owned the validation software through which data was received. He highlighted various activities of the CHE, its recent research publications, staffing, and employment equity status.

Dr Thulaganyo Mothusi, CFO, spoke on the financial performance of CHE. The budget was R99.6 million, with expenditure totalling R75.6 million and yielding an under-expenditure of R24 million. The variance was due to the accumulation of funds for seven funded but vacant posts. In the Administration Programme, less had been claimed for legal fees, and travel and other related costs had been limited. He outlined ten cost drivers and their contribution towards expenses.

The CHE had received an unqualified audit report. There were three audit findings. The first concerns the accuracy of cash flow disclosure. The second was inconsistency in performance indicator descriptions and the third was that expenditure was incorrectly classified.

He then discussed the budget baseline for the current year and the MTEF period. In conclusion, he said the current year's budget was under significant pressure and it was highly likely that it would be fully spent. He said the budget allocation for compensation of employees severely limited the CHE's ability to implement its full organisational structure. This would be even more of a challenge as the revised organisational structure had to support the implementation of the new Quality Assurance Framework. He said the CHE mandate expanded as it took over the transformation oversight function for the higher education sector. These functions required a resource injection to enable them to be executed effectively.

Discussion

The Chairperson noted that the CHE had been overspending, which needed to be worked on.

Mr Letsie said the CHE had overspent in previous years by 20 percent and 26 percent and perhaps that was an area for discussion. On the demographics of the organisation he asked why there were no males or females of Indian descent. He asked why the chairperson of the CHE had not yet been appointed. Had the Minister started the proceedings to fill the board vacancies?

On the remuneration of vice chancellors and senior executives officials, he said there had been a request that the Minister look into this. Had the Minister considered the CHE’s advice and could the department share its report on the matter with the committee?

He said that following the end of the term of office of the transformation oversight committee the Minister had requested that the CHE incorporate oversight of transformation into their mandate. Did this addition to its mandate come with funding? Did the CHE have the necessary funds to implement this additional mandate and did it need additional human resources? When would the CHE start reporting on this mandate?

The CHE had reported establishing a task team for online and blended learning. Would the standards for this learning be ready for the 2023 academic year? 

There were 301 applications for programme accreditation, of which 144 were from public universities. What areas of specialisation did these applications focus on? Did the new programmes respond to the shortage of scarce and critical skills?

The Vaal University of Technology had said that M Tech and B Tech courses were being phased out. Were the replacement courses finalised?

The Chairperson asked about the quality of the teacher training programme at UNISA. She had concerns about who was going through the blended learning offered by UNISA.

She said the entities were not doing well in attracting people with disabilities. Where were the challenges?

On the remuneration of vice-chancellors and senior executives in higher education, Prof Tom said the Minister had decided on a process that would first go through Cabinet. Currently, they are awaiting a response to the advice the CHE had given the department.

He said the oversight of transformation was an additional function and feedback had been given on what the CHE would require to carry out the additional mandate.

On the demographics of the organisation, Dr Green said the organisation had an equity plan with targets for people of Indian descent and those with disabilities and actively tried to recruit them. He said there had been no applications by people with disabilities for substantive posts. Prof Naidoo, the director of recruitment, was the sole person of Indian descent until her retirement at the end of the previous financial year.

On transformation, he said there was an intrinsic link between quality and transformation; hence, it was embedded within the quality assurance work. The embedding of the work would mitigate the need for resources but some of the work would require an injection of resources, like building a database and producing an annual monitoring report.

On online and blended learning, he said there were engagements with institutions on how they saw themselves going forward in future. 9 February 2023 was the date for finalisation of the task team report’s recommendations. The CHE would then communicate them to the institutions to give them enough time to implement the report in 2024. The current allowances on a range of modalities remained in place until processes were finalised.

On the nature of the programmes submitted for accreditation, he said the CHE would give the breakdown in a report to the Committee.

The DHET initiated a review of teacher education at UNISA in 2020 which resulted in a substantive report which recommended strengthening teacher training at UNISA and that UNISA should develop an improvement plan. Beyond the issue of UNISA, the CHE was embarking on developing a qualification standard for the B Ed degree and would be doing a review of teacher education across South Africa. This work had already started.

On the legacy qualifications, M Tech and B Tech, he said these had not been aligned to the Higher Education Qualifications Sub-Framework (HEQSF). They were supposed to be phased out in 2019 but there were still students doing the courses who had registered before 2019. The replacement courses were the Advanced Diploma and the Masters in Technology.

Dr Mothusi said that the comments about overspending were incorrect. The entity was underspending as was evidenced by the request for rollovers from prior years which had been accumulating till now. He said that for them to overspend, they would have needed authorisation. On the issue of the audit, he said the three audit issues highlighted did not have a negative impact overall. It was a question of interpretation between the Auditor General (AG) and the organisation relating to where expenditure would be classified as line items, not on the actual expenditure itself.

Prof Tom said that in previous years there had been late approval of the underspending that was rolled over.

On the compensation of employees, he said this was a critical issue that needed further debate and discussion with the Treasury because the ratio of compensation costs was being reduced yearly, meaning that employee numbers were reduced.

The Chairperson said she was speaking of the overspend in relation to the subsidy.

Dr Mothusi replied that the grants it received from the department were insufficient and the CHE relied on accreditation fees.

 The Chairperson said that the presentation spoke of the AG not having an issue with an item in the previous year’s report but that it had then said in this year’s report that it did have an issue, as shown on slide 29. Could someone from the AG’s office clarify the matter?

A representative of the AG’s office said the finding was raised as a non-compliance issue because of material misstatements in relation to how the cash flow statement was calculated in the current year.

The Chairperson said it was important to get an update from UNISA on the plan they were supposed to implement. 

Mr Mabuza Ngubane, Deputy Director: SETA Performance Management , Department of Higher Education and Training (DHET), asked that the department convey the Committee’s request to UNISA as they had no representative at the meeting.

The Chairperson said to the department that there were matters regarding the office of the chairperson of the CHE.

Mr Ngubane said he would take notes and convey the messages. 

The Chairperson said that all matters relating to the department should be conveyed and a written response be supplied to the Committee.

The meeting was adjourned