Western Cape Education Department 2022/23 Annual Report

Meeting report

NOTE: the first portion of the meeting was a closed session with the office of the Auditor-General of SA.

Deliberations on Department of Education's annual report

Mr David Maynier, Western Cape Minister of Education, said the Department of Education had received an unqualified audit opinion for the current financial year. The Auditor-General (AG) had commented there was still room for improvement, and that the Department was moving in the right direction.

Mr Brent Walters, Head of Department, informed the Committee that 99% of the adjusted budget had been spent. The unqualified audit opinion included findings for the Department. There had been a slight improvement in the Department's performance.

Ms M Maseko (DA) said she had engaged with the AG to diagnose what needed to be done by the Department. The main area of concern had been around performance reporting. Reporting was the main problem of the Department. She wanted to know if the matter involved the key performance indicators (KPIs), or what it was that actually made it difficult for the Department to report. She asked what innovations would be introduced to make the reporting satisfactory.

Mr Walters explained that the Department had fallen short by four findings last year, but there had been only one finding this year. It had moved closer to the line, but was not yet over it. This was showing an improvement. The Department could improve on its reporting because it was putting processes in place to improve its position.

Mr I Sileku (DA) asked if the performance agreement had impacted on the Department, and if it had made progress towards an unqualified audit; enquired what caused inability to deliver on the Expanded Public Works Programme (EPWP); wanted to know how budget cuts were going to affect the Department and how it was going to mitigate that; asked if any progress had been made concerning the South African Police Service (SAPS) reported cases; sought clarity on the meaning of “progressive discipline taken”; and enquired how the matter of 21 invoices that were older than 20 days was going to be dealt with.

Mr Walters said the Deputy Directors-General (DDGs) had performance agreements to cater for accountability in terms of performance. During April last year, the Department took over the Early Childhood Development (ECD) function smoothly, without a collapse to the service. The system was kept the same to allow officials of the Department to understand it.

On the mitigation of risks, he said there were emerging risks. The Department had been told about budget cuts, which was one of the emerging risks. The census confirmed that the Western Cape was the third largest province in SA, with a rapid influx of learners from other provinces. The Department had provided more educators. The energy crisis would always be with them, and the Department had adapted well.

Mr Leon Ely, DDG: Corporate Services, said indicators were measured on a quarterly basis to ensure targets would be met. Data was getting verified timeously. Measures had been put in place for the Department to obtain a clean audit. The data that had to be collated was extensive.

On the court cases, he said the SAPS had their own challenges. Responses from the SAPS were very slow, but the Department was eventually getting information from them. He said “progressive discipline” referred to cases taken to the disciplinary committee so people knew they had transgressed.

Mr Zukisani Mpisi, Director: Financial Accounting, said that reconciliation was happening with the Special Investigating Unit (SIU) concerning the invoices. The matter was still in process, and they had submitted the invoices since the audit.

Ms C Murray (DA) wanted to know what positions in the Department were occupied by officials involved in fraud and corruption.

Mr Ely said corruption and fraud were happening mainly at the school level. It involved either the school principal, the teachers or the secretary. It involved monetary issues.

Ms A Cassiem (EFF) wanted to find out what the Department would do differently on irregular expenditure, and asked if the money ended up where it was supposed to go; asked what the national Department had said to ensure reporting was accurate and that the transversal contract had expired; enquired how information was received from the national Department regarding the Presidential Youth Employment Initiative (PYEI), because it was difficult to reconcile how a provincial department could get a finding emanating from a national department; wanted to establish how the Department got information from the stakeholders on the Funza Lushaka Bursary scheme, because the AG had said there was no reliable information.

Mr Ely said there were other factors at play in the space of Funza Lushaka. The Department of Basic Education (DBE) had been the main driver. Some matters were beyond the control of the provincial Department. The Department had tried to engage with the DBE and the AG to rectify the process.

About transversal contracts, he said the Department had had to take responsibility for the expenditure. The departments had to sign these contracts. They were run by National Treasury. If the Department was on its own, it then had to prove it would get value for money from these projects. There were processes involved in the renewal of the contracts, and it was common to have parties arguing over the awarding of the contracts.

Mr Matthys Cronje, Chief Director: People Management Practices, added that Funza Lushaka was a national indicator. The challenge was that the data they received had not been clear in terms of the sector. The Department had now established better relations with the DBE concerning the accuracy of the data, and it had to be supported by academic transcripts to verify it. The Department was in the process of finalising the data from previous years, as well as the current year.

An official from the Department said the finding on the PYEI was related to participants who had received grants from the Funza Lushaka scheme. The Department did not have access to the database, but had got declarations in place so that participants could indicate they would not participate in the grants.

Ms N Nkondlo (ANC) commented that it was important to understand irregular expenditure as explained in the AG context. She then sought an explanation for what the AG had referred to as timeous reporting of the root cause of irregular expenditure. She asked why there was a slow response by management to irregular expenditure, and what the actual problem was so that further irregular expenditure could be avoided. She wanted to know about the percentage of the budget spent against what had been achieved in terms of targets, because in programme two, there was an achievement of 40%, yet 97% of the budget had been spent.

Mr Ely responded that the Department had particular outputs and outcomes that could be measured in rand terms. For example, if one wanted to improve national senior certificate (NSC) results by 90%, it became difficult to state how much would be spent. One would then look at the outcomes. However, if it involved bricks and mortar, one could measure the money to be spent.

The Chairperson wanted to know what was complicated about Funza Lushaka bursaries, because there had been a material finding. 58% had been achieved against a target of 60%. The information had been a misstatement of the KPI, and therefore it had become a material irregularity (MI). He wanted to know the reason why supply chain management (SCM) processes were not followed, as that had resulted in irregular expenditure of R57m.

Mr Ely explained that the bulk amount of the R57m was related to a furniture contract the Department had entered into. It involved chairs, desks and cupboards. There had been a debate on the interpretation of the law. The matter had been referred to legal services, which had agreed with the AG. It was agreed the contract was not worth entering into. The Department then had to cancel or terminate the contract. The Department had not paid for anything it had not received. He said there was one contract where SCM processes had been followed, but because of technical matters involved, it had been scrapped and R43 000 was lost.

Ms Maseko wanted to find out why it was important to maintain in 2024 the key target of 75% on the retention of learners from grades 10 to 12. She asked if there would be a system where the Department would invoice the province where the learner had come from so that it could get the allocation of that learner in that province, seeing that there had been an influx of learners into the Western Cape.

Minister Maynier stated that Census 2022 had confirmed the Western Cape was the third largest province in SA, and that meant some service delivery pressures would increase. This presented an opportunity to discuss the equitable share so that it could be reviewed. The legislature had a role to scrutinise the formula, the actual input, and the numbers.

Ms D Baartman (DA) asked if the contracts would be interpreted differently next year, because the AG and legal services had disagreed with the interpretation and furniture had been delivered in the process. She also wanted to know the number of inverters bought and the number of schools that benefited, because some of the underperformance in programme two related to the inverters for the classrooms.

Minister Maynier said he would forward written responses on the number of inverters purchased and the schools that had benefited.

Mr Ely said the Department had taken a decision to refer all big contracts to legal services to avoid different interpretations, even though legal services had capacity constraints. This would help the Department to be able to engage with the AG.

Ms Nkondlo wanted to know which financial outputs had been achieved on programme two, where the whole budget had been used, yet 60% of the targets were not met.

Mr Ely said funding in programme two had been redirected to assist with compensation issues.

Mr Walters, in his closing remarks, said the Education Department was a big ship, and they had to make quick decisions at times. Sometimes, wrong decisions are made. That was why the Department was going to get legal advice on big contracts. The performance of the Department indicated that they would get over the line.

The meeting was adjourned.