Provincial Departments of Education and Agriculture: Budget Review briefings

NCOP Finance

18 October 2005
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Meeting report

SELECT COMMITTEE ON FINANCE (NATIONAL COUNSEL OF PROVINCES)

FINANCE SELECT COMMITTEE
19 October 2005
PROVINCIAL DEPARTMENTS OF EDUCATION AND AGRICULTURE: BUDGET REVIEW BRIEFINGS

Chairperson:
Mr T Ralane [Free State] (ANC)

Documents handed out:
National Department of Education: Provincial Budgets and Expenditure: 2001/02 – 2007/08
Eastern Cape Department of Education Budget and Expenditure Review
Free State Department of Education Budget and Expenditure Review
Northern Cape Department of Education Budget and Expenditure Review
Northwest Department of Education Budget and Expenditure Review
KwaZulu-Natal Department of Education Budget and Expenditure Review
Mpumalanga Department of Agriculture Budget and Expenditure Review
Northern Cape Department of Agriculture Budget and Expenditure Review
Northwest Department of Agriculture Provincial Budget and Expenditure Review
Eastern Cape Department of Agriculture Budget and Expenditure Review
Gauteng Department of Agriculture Budget and Expenditure Review
Gauteng Department of Agriculture and Veterinary Expenditure
Free State Department of Agriculture Budget and Expenditure Review
Agriculture and Land Affairs: Chapter6
[please email
info@pmg.org.za for the documents]

SUMMARY
The National Department of Education outlined trends in Provincial Budgets and Expenditure, and then the various provinces’ Departments gave their presentations on their budgets and expenditure. During the discussion, Members commented on:
- outdated data, in terms of having 2002 data for 2005; and the ‘credibility’ of data
- why the budget for Eastern Cape Educational Expenditure had been cut;
- the state of classrooms;
- migration of learners to other provinces;
- the number of learners targeted for feeding programmes;
- whether the Eastern Cape had cut back on their feeding programme;
- vacancies of principals as many schools had acting principals;
- that communities could feed learners at half the price than that offered by larger service providers
- farm schools with low learner numbers and empty farm schools that were vandalized;
- school transport for HIV-positive learners;
- fluctuations in spending on capital assets;
- underspending on Conditional Grants;
- underspending on HIV/AIDS programmes;
- the importance of promoting a general culture of reading by provincial educational departments;
- educator training programmes taking place during school hours;
- whether the Free State’s high growth in learner numbers was due to migration; and
- hygiene concerns within the Nutrition Programme.

The various provinces’ Departments of Agriculture then gave their presentations on budgets and expenditure. During the discussion, Members commented on:
- why the number of female recipients in the Land Distribution and Reform outputs was so low;
- why, after the outbreak of animal diseases, the spending on prevention was so low;
- whether Mpumalanga had figures of emerging farmers with self-sustainable operations;
- underspending on the Comprehensive Agricultural Support Programme (CASP)programme;
- whether the high spending on extension services really added value;
- whether there was enough water for planned irrigation systems;
- the availability of transport of emerging farmers’ goods to markets;
- whether North West province had any disaster management funds or plans in place;
- whether the North West province provided the National Department with monthly quarterly financial and non-financial reports in terms of the Conditional Grants;
- the reasons for the fluctuations in the numbers of the sustainable resources as well as the veterinary services;
- how the Eastern Cape province had responded to the needs of emerging farmers;
- the number of supernumeraries in the Eastern Cape;
- whether the Nguni project was sustainable;
- the apparent massive problems with fruit production in the Eastern Cape;
- the zero tillage pilot programme;
- tea production in the Eastern Cape;
- whether the Eastern Cape needed a R42 million budget for agricultural research, when the National Department spent R350 million on research;
- fluctuations in payments for capital assets machinery and equipment; and
- whether Gauteng had emerging small farms, and whether they audited them.

MINUTES
The Chairperson stated that the main problem had to do with their outdated data on the numbers of learners, educators, and schools, in that they had 2002 data for 2005. This created problems for planning, would affect implementation and budgeting negatively, and that problems that would persist while the data problem continued.

National Education Department briefing
Department Director-General, Mr Duncan Hindle, outlined trends in the proportion of National Income that flowed towards public education; comparisons of spending with similar countries; the decline in the provincial share of expenditure and the further expected decline; the need to look at linking social grants to education; low spending on adult education; special needs learners; expenditure on capital and non-personnel items; enrolment ratios; slow turnaround time and logistical issues in getting data verified and audited; the Senior Certificate matriculation results; teacher incentives, and stabilising teacher numbers.

Mr Patel (Deputy Director-General: Planning and Monitoring) continued more on provincial budgetary pressures; service delivery outputs and outcomes; slow real growth and under-expenditure in provinces. All provinces had decreased spending for 2001-2007

Eastern Cape Department of Education
The province’s Member of the Executive Committee (MEC), Mr M Matomela, spoke about the monitoring of learner numeracy and literacy, access in terms of no-fee schools; policy shifts to bring Grades 8 and 9 together; grant improvements; problems with finding and funding personnel; the pressure to service debt; the number of schools; lack of money for desks, books and teachers; and the need to train principals to run schools effectively.

Discussion
The Chairperson asked why the budget for Eastern Cape Education Expenditure had been cut.

The MEC explained that in 1997/08, the Eastern Cape had overspent R900 million on personnel expenses and that the whole province had had to be put under Section 100 of the Constitution (National supervision of a provincial administration). In 2004, the same thing had happened when the province ran R600 million into deficit. They had had to take money from all departments to service that debt, and that there still was pressure from their social partners to hire more educators. The vacancy rate in the administration was around 60%. When they had started to use their finances properly, the non-personnel budget had been cut by half to service the budget deficit. If they stuck to that, for the first time since 1997 they would not exceed their budget for personnel. There had also been delays in signing service providers up for the Independent Development Trust (IDT) grants for the school nutrition programme and HIV/AIDS programmes.

The Chairperson pointed out that the Eastern Cape had 2 million learners and 55 000 educators. He asked whether they had built classrooms after 2002, and if so many people were migrating to the Western Cape, should targets be changed. He also asked about the number of learners targeted for feeding programmes.

The MEC responded that their figures included the R27 million of funding received from the European Union, Japan and others. Their 2006 figures indicated that they needed 2 000 classrooms and that they have built 50% of those already. As for the state of classrooms, they had improved maintenance allocations by R54 million. With regards to outward migration, some of the learners were out of the system. They were conducting verification procedures as some principals were inflating learner numbers. They would charge and discipline them.

On school nutrition, the MEC said that in the current financial year they could not feed learners five days a week because of inefficiencies in the system. They would ask the Committee to assist them as other provinces could top up on grants. They had met with the Treasury about ensuring that all providers were paid every month.

The Chairperson then said that in term of migration, the Department had to urgently investigate numbers. Class teachers should take register on a daily basis. Assessment need not to take a year, but was essential for their planning.

Ms Robinson (DA) asked whether they cut back on the feeding programme because of insufficient money, or poor implementation. She added that libraries are very important for schools and asked how were had been affected by the budget cutbacks.

The MEC responded that every year they verified educator and learner numbers, and that they now were going to physically verify this. The figures were never adequate. They needed R90 million to run the feeding programme properly, and that the challenge was to top up. They wanted to provide hot meals and wanted local communities to help grow food.

Mr Botha (ANC) [Limpopo] said many schools had acting principals and what was being down to monitor vacancies. He also stated that communities could feed learners at half the price than larger service providers.

Mr M Robertson (ANC) [Eastern Cape] asked about farm schools with low learner numbers and empty farm schools that got vandalized.

Ms N Ntawanambi (ANC) [Western Cape] asked about school transport for HIV-positive learners. These learners were physically weak, and that a walk of even one kilometre was too much for them.

The Eastern Cape MEC answered that some of their educators had served ten years but officially remained temporary staff. They had issued a bulletin in the previous week, and by January the posts would be filled. School administration performance would be monitored. In some schools they had disciplined principals, and that they had to centralise this kind of programme. In poor areas like Lusikisiki, there was a very poor teaching and learning culture. An increasing problem was the number of staff and pupil dying from AIDS.

The MEC said that communities were not involved in the nutrition programme, and that service providers came from the Western Cape and Gauteng. They had started a community programme, as it was very expensive to use those service providers. They were working closely with the AIDS Council in the province, and were moving in the proper direction with transport. However, some their districts had not benefitted, and they needed to divert funding to proper accommodation.

The Chairperson said that they have decided to declare the Eastern Cape a ‘special project in general’, not just with education. They had visited the province and noted that there was so much food production, and asked why there weren’t more partnerships like the project at Fort Hare.

The Chairperson said that that the Department should submit updated figures so that they could deal with adjustments, the Division of Revenue Act, etc.

Free State Department of Education briefing
The MEC, Ms N Tsopo, and the Head of Department (HoD), Mr M Rakometsi, discussed learner numbers; the closure of farm schools because of low learner numbers; the learner support programme, the Orphan programme of food parcels; the schools nutrition programme; the hostel programme; school transport allocation; renovation of schools; the programme to install computer centres in all secondary schools by 2010, Further Education Training (FET) Colleges, the literacy rate, and the provincial budget and expenditure trends.

Discussion
Mr B Tolo (ANC) [Mpumalanga] stated that in the financial year 2004/05, they had spent R172 million on capital asset expenditure and in the current year, this figure had dropped to R62 million. He asked whether this was because of an inability to spend or whether it was a problem with the Public Works Department, because that seemed to be the case in certain jurisdictions.

Mr M Robertson (ANC) [Eastern Cape] asked more on the breakdown for conditional grants.

Mr D Botha (ANC) [Limpopo] asked on expenditure trends by programme. For example, the Early Childhood Development Programme had low expenditure of 39%. For actual expenditure on Conditional Grants for HIV/AIDS prevention programmes, the figure was 36%.

Ms D Robinson (DA) noted the emphasis on electronic education, but said they should not forget about reading as a general culture of education. Many training programmes for educators were taking place during school hours and so relief teachers had to be called in, which increased costs and reduced efficiency.

The Chairperson stated that the Free State had the highest growth rate in expenditure, and asked whether this was due to migration influence.

The MEC said that the higher growth was due to an improvement in the accuracy of information. Educator training was now taking place after school hours. The rollover was due to funds given by the EU countries recently that they had been unable to spend. With regard to spending on the HIV/AIDS programme for staff, most of those programmes would be done during the December holidays and had therefore been shown as unspent. Capital expenditure funding had actually been increased, so the department had to quickly start on renovations. The Public Works Department in the Free State only dealt with building new schools, so they had started a new approach whereby school governing bodies took on renovations as well.

Northwest Department of Education briefing
The MEC, Rev J Tselapedi, and HoD, Dr A Karodia, presented on provincial access to education, the matriculation pass rates, building of schools, the adult literacy rate, enrolment in independent schools, provincial expenditure trends and inputs, percentage growth, personnel costs, and expenditure by economic classification.

Discussion
Mr M Robertson (ANC) [Eastern Cape] pointed out that the enrolment statistics showed that in 1997, learner numbers were 970 000 and in 1998, this had dropped by half and stayed at this number till 2004. In 2005, the figure jumped to 815 000, and he asked for clarification. He also pointed out that in1997, there were 2 357 schools with 14 522 classrooms which gave a ratio of 35:1, while in 2004, there were fewer schools but with 31 000 classrooms, which gave a ratio of 40:1. With the independent schools, the figures were more consistent but that the teacher to pupil ratio was exactly the same as public schools. The figures were too ‘coincidental’.

The HoD responded that credible data remained a challenge, including that for independent schools. They had recently appointed people at a regional level to deal with this.

The Chairperson stated that correct data was paramount for the Division of Revenue Bill, as proper planning for distribution was critical.

KwaZulu-Natal Department of Education briefing
The Superintendent-General, Dr R Lubisi, outlined the trends in the learner: educator ratio, the reduction in the number of schools, migration, full time equivalence, numbers of fulltime learners in FET colleges, the Nutrition Programme, expenditure trends, and the number of black learners doing science and maths.

Discussion
Mr B Tolo (ANC) [Mpumalanga] pointed to the Treasury Report’s statement that transfer and subsidies had increased from R125 million in 2001/02, to R500 million in the current year, and that most beneficiaries were non-profit institutions. He asked for clarification.

The HoD said that the figures reflected that 1 000 extra schools had Section 21 (non-profit organisation) status. Insufficient groundwork had been done in those schools located in the Zululand region. The Chairperson asked them to go back and verify those numbers.

Northern Cape Department of Education submission
The Chairperson noted that the MEC and the Director General for the Northern Cape were not present and that the Committee would accept their written submission.

Director-General’s response
National Director-General Hindle explained that with the Nutrition Programme, the Eastern Cape had 50% of their learners on the programme. That province had particular pressures, as other provinces had 20% of learners on the programme. Information on teachers was getting better. As for principals inflating numbers, the National Department accepted that in many ways that it was a design flaw in their system, and that they were developing a new information system where learners would be identified by Individual Learner Numbers, or by their ID numbers, so that the National Department could track learners when they migrated, as well as to check their progress throughout their schooling life.

The Chairperson said that hygiene with the Nutrition Programme was important, as he knew of one school in Mpumalanga where the food was kept in a room with no refrigerator, and in another, where the food was prepared in a shack.

Mpumalanga Department of Agriculture briefing
The MEC, Mr M Masuku, outlined the trends in administration costs, resource management, infrastructure, irrigation programmes, the Comprehensive Farmer Support Programme, food gardens, packhouses for exporting produce from food gardens, irrigation systems for small-scale farming, capacity, prevention of foot and mouth disease, revamping of laboratories, the increase baseline of agricultural structure, the Department focus on technology, structural agricultural training, and micro-finance for small-scale farmers.

Discussion
The Chairperson referred to the National Treasury Report on the Land Distribution and Reform outputs that showed 311 projects with 22 347 recipients, 2 197 of them female. He then asked why that number was so low as women were in the majority in rural provinces. In the Eastern Cape there with 58 000 recipients, with female recipients at 7 000. The Free State had 8 000 beneficiaries, with 1 000 females. He further asked about female-headed households. The MEC said that he did not currently have the statistics for beneficiaries of land reform.

The Chairperson referred to veterinary services mentioned in the National Treasury Report, and said that after the recent outbreak of animal diseases in the province, why they were spending so little on prevention?

The MEC responded that it had become clear that in spending more on other areas like farmer support, which was close to 43%, this ‘pushed everything up’. The initial high expenditure in veterinary service had outstripped capacity and had then been adjusted. They were satisfied with the current levels.

The Chairperson stated that when the Committee had visited Mpumalanga two to three months ago, Members had visited farms and heard most complaints specifically on water. He then asked whether they were winning the battle against animal diseases in Mpumalanga, whether they had figures on emerging farmers, and whether the latters’ farms were self-sustainable.

The MEC said that they were spending more on irrigation systems, food gardens, boreholes and dams for small-scale farms. Water provision was an ongoing challenge, especially in light of the drought. On CASP, they had decided to assist those farmers by buying up tractors and implements, because the farmers were already so indebted. He was confident that they were ‘winning the war’ on animal diseases. The one outbreak in 2001 had been dealt with in a short time, when their vets had joined forces in the Eastern Cape, KwaZulu-Natal and the Northern Cape. Vets were very scarce but that they were assisting some students who studied veterinary science. They needed engineers for irrigation, and had intervened similarly by sending students to study agricultural engineering. Lastly, he explained that in quantifying beneficiaries, they had numbers available on the size of the projects, how many people were involved, etc.

Mr N van Rooyen (ANC) said that the CASP programme had been allocated R18.9 million in 2004/05, and the estimated expenditure was R16 million, which was a good percentage compared to other provinces. When looking at the current financial year, he got a figure of R23 million granted for the CASP programme. If compared with the number of programmes implemented, he questioned whether the Department had the capacity to deal with all the programmes.

The MEC explained the R16 million spent out of R18 million in December 2004. They had had a serious problem because CASP then accounted for R700 000 out of R18 million. They had to put in a programme between January and February. They were used to working with small amounts of money and were not ready for such a large amount. They had learnt how to increase capacity, and they now were ready to deal with larger amounts.

The Chairperson said that consistent underspending of conditional grants would be under constant review.

North West Department of Agriculture briefing
The MEC, Mr M Mayisela, outlined trends in budget and expenditure trends, service delivery, personnel expenditure, animal disease prevention, critical small and subsistence farming, tourism, research institutes, environmental impact, waste management, lack of reliable statistics, number and types of livestock around, uniform strategy, farming equipment, CASP, training and the incapacity to spend budgets.

Mr Robertson (ANC) [Eastern Cape] said that profitability in agriculture was very low, especially in light of foreign farm subsidies and limited markets. He wanted to know why the highest percentage of spending in agriculture in 2004/05 was on extension services at 62%. When he spoke to communities in agriculture, he constantly heard that they hardly see an extension officer, and if so, the extension officers lacked transportation. He wondered whether the high spending on extension services really added value to agriculture.

Mr D Botha (ANC) [Limpopo] wanted to know whether there was enough water for planned irrigation systems, as that was vital for small and new farmers, as well as ways to transport their goods to market.

Mr Van Rooyen (ANC) said that with the recent veldfires in the North West province, they did not have any helicopters. He wanted to know whether there were any disaster management funds or plans in place. Did they provide the National Department of Agriculture with monthly quarterly financial and non-financial reports in terms of the Conditional Grants.

The MEC said that they had submitted those reports to the National Department as required. With regards to the recent veldfires, they had provided emergency livestock fodder. They has also looked at damage to houses, fences, and farm workers buildings, and at long-term management of these disasters. One of their challenges was the capacity of local municipalities in emergency services.

The MEC added that on the issue of extension officers, there were problems with vehicles. He took note of the suggestion of smaller dams for assisting small-scale farmers.

Eastern Cape Department of Agriculture briefing
The HoD, Adv A Nyondo, outlined trends in budgets and expenditure trends, soil conservation strategies, migration, underspending, capacity, infrastructure development, CASP, irrigation, veterinary services, and animal diseases.

Discussion
The Chairperson asked the reasons for the fluctuations in sustainable resources and veterinary services, for underspending on CASP, and whether they could assure the sustainability of those projects due to lack of water. When the Committee had visited six villages which produced vegetables as part of the CASP programme, the villagers had said they did not want money, but wanted agricultural implements. He asked whether the Eastern Cape Department was aware of such feelings. With regards to the Nguni project, communities had said they had the capacity to handle programmes, but needed grazing land and fencing. The Chairperson asked how they would respond to the needs of emerging farmers in those areas.

Mr Robertson (ANC)[Eastern Cape] queried the Treasury Report statement that percentage growth in 2001/02 was 13.4%, and in 2004/05-2005/06 it showed 0%, and in 2006/07 – 2007/08 showed 6.8%. The number of supernumeraries paid by the Department had dragged on for a couple of years.

The MEC emphasised that regarding Nguni cattle, they could not get could not get exact totals, and therefore did not know whether the project was sustainable. There also appeared to be massive problems with massive fruit production, as tenders and orders being given late. In one example, there was 500 hectares to one tractor. In other community, chicken litter were sold as fertilizer and then billed to the Department. Management of the extension officers in that area left much to be desired. He added that conventional ploughing was very expensive. Some officials had gone to Brazil to observe ‘zero tillage’, but realised that it needed special machinery, and would not work with the type of rainfall of the Eastern Cape. However, the Department let a village continue with this, and this village was given that machinery.

Mr D Botha (ANC)[Limpopo] asked what was happening with tea production in the Eastern Cape.

Mr B Tolo (ANC)[Mpumalanga] referred to the Report’s breakdown of expenditure. Under ‘households’, there had been a spike of R32 million in 2004/05, and he wanted clarity on that.

Mr Van Rooyen (ANC) was concerned that despite the CASP allocation in 2004/05 of R38 million, they had only been able to spend 12 million. They did not seem to have a capacity problem, and that the current year they had an allocation of R47 million. He asked for assurance that they would be able to use that money for emerging farmers. Expenditure trends up to 17 October showed 20% expenditure on some items and 30% on others. He asked whether they were going to get ‘fiscal dumping’ again, and about the quality of their business plan. Was there really a need for a provincial budget for agricultural research of R42 million, when the National Department only spent R350 million on research?

Mr Robertson (ANC)[Eastern Cape] asked why the payments for capital assets machinery and equipment, showed a huge increase and then very sharp decrease.

The MEC said that the fluctuations were caused by sustainable resource management being hamstrung by the fiscal arrangements in the Eastern Cape. They had not be able to run all the programmes as budgets had to be reduced. There were problems in the CASP programme, but tractors had been ordered and were due to be delivered to villagers. He added that the University of Fort Hare had jointly run the Nguni programme. He was not aware of any problems but would investigate, as well as study the issues of water and the necessary grazing land.

Roads had been influenced by the cluster system, and that there was no integration of efforts. He would launch a drive to compile a complete list of the small farmers. He admitted that supernumeraries were still on the system. Last year they had 3 000, and that currently they have slightly less than 900.

The MEC then said that he had no ready information on the percentage growth. There had been problems with lack of funds for moving mass produce, but that that was now solved. He would have to investigate payments for service providers. They had too few extension officers and lacked funds. On zero tilling, they were investigating soil erosion in a pilot project. The tea production had become a viable business.

The Department had applied for a rollover of the R38 million. About R17 million had been spent of this, and R19 million was planned for projects already. The agricultural research was necessary for the province, and was reaping benefits already. He would have to investigate the other matters and come back to the Committee.

Gauteng Department of Agriculture briefing
Dr Steve Cornelius (HoD) outlined trends in budgets and expenditure, high-potential agricultural land, budget and expenditure, agriculture strategy, lack of laboratories, tunnel farming, hydroponics, deploying staff in other provinces in disease control initiatives, veterinary services, strategic objectives, community food gardens, conditional grants, access to land, and environmental projects.

Discussion
The Chairperson asked whether they had emerging small farms in Gauteng, and whether the Department audited these. Dr Cornelius answered that they had identified 358 black farmers, and also had food garden participants.

Free State Department of Agriculture briefing
Mr W Barnes, HoD, outlined trends in budgets and expenditure, land and agrarian reform, development of communal land and beneficiaries, food security, the community donor funded support programme, sustainable resource management, soil conservation, farmer support and development, disaster management, veterinary services, the technology research and development services programme, the structured agricultural training programme, and low spending on the CASP project.

Mr Barnes continued that the Free State produced 70% of South Africa’s grain. As there was currently overproduction of grain in the world, they had looked into producing biodiesel with SASOL. This was the first such project for the Department.

The meeting was adjourned.

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