REPORT OF THE PORTFOLIO COMMITTEE ON HIGHER EDUCATION AND TRAINING ON BUDGET VOTE 17 AND 2014/15 ANNUAL PERFORMANCE PLAN OF THE DEPARTMENT OF HIGHER EDUCATION AND TRAINING, NATIONAL STUDENT FINANCIAL AID SCHEME (NSFAS) AND COUNCIL ON HIGHER EDUCATION (CHE), DATED 09 JULY 2014

The Portfolio Committee on Higher Education and Training, having considered the Budgets and Annual Performance Plans of 2014/15 of the Department of Higher Education and Training, National Student Financial Aid Scheme and Council on Higher Education reports as follows:

1. Introduction

1.1 The Constitution of the Republic of South Africa, Act 108 of 1996 Section 55(2) stipulates that the National Assembly must provide for mechanisms (a) to ensure that all executive organs of state in the national sphere of government are accountable to it; and (b) to maintain oversight of (i) the exercise of the national executive authority including the implementation of the legislation; and (ii) any organ of state.

1.2 Public Finance Management Act section 27 (1) states that the Minister must table the annual budget for a financial year in the National Assembly before the start of that financial year, it further provides in subsection 27 (4) that when annual budget is introduced in the National Assembly or a provincial legislature, the accounting officer for each department must submit to Parliament or provincial legislature, as may be appropriate, measurable objectives for each main division within the department’s vote.

1.3 In terms of section 10 (c) of the Money Bills Amendment Procedure and Related Matters Act (Act No 9 of 2009), Strategic Plans must be tabled in Parliament after the adoption of the fiscal framework.

1.4 The Minister of Higher Education and Training tabled the Medium Term Strategic Plans and Annual Performance Plans of the department and its entities on 13 March 2014 in accordance with the above legislative requirement.

1.5 On the same day, the Speaker of the National Assembly referred these papers to the Committee for consideration and report.

1.6 In executing its oversight mandate, the Committee scheduled extended briefing sessions with the department, NSFAS and CHE so as to present their plans and budgets for the Medium Term Expenditure Framework Period (MTEF) on 02 and 03 July 2014.

1.7 The budget briefings served to acquaint the Committee with the mandates and programmes of each business unit in the department and its entities.

1.8 This report gives a brief summary of the presentations made to the Committee, focusing mainly on 2014/15 Annual Performance Plans and Budget, 2014 MTEF allocations and an overview of allocations per programmes. The report also provides the Committee’s recommendations relating to the vote.

2. Method

In engaging with the above mentioned organs of state the Committee consulted the following documents:

· 2014/15 Estimates of National Expenditure (ENE);

· 2014 State of the Nation Address (SONA) pertaining to the sector priorities;

· Strategic Plans of the department and its entities;

· 2014/15 Annual Performance Plans;

· 2013/14 Budgetary Review and Recommendations Report (BRRR) of the Committee;

· Reference was also made to 2013/14 strategic objectives to check if the department has kept its promises of the previous financial year; and

· The National Development Plan (NDP) on the recommendations for the post-school education and training sector.

· In addition to the above documents, the Committee held a meeting on 02 July 2014 with the Auditor-General of South Africa (AGSA) regarding the audit outcomes of the 2013/14 financial year of the department and its entities.

3. Terms of Reference

The Committee’s terms of reference in so far as the process was concerned were to:

· Scrutinise the budgets and annual performance plans of the departments and its entities;

· Ensure that policies announced by the government and authorised by Parliament will be delivered with the allocated resources, this further needs continuous monitoring through various ways of oversights;

· Assist the department and its entities with cost containment measures in terms of the National Treasury Instructions 01 of 2013/14;

· Recommend shifts within programmes and sub-programmes where possible to mitigate the shortfall in certain line items, and

· Report the conclusions and recommendations of the Committee to the National Assembly.

4. Summary of presentations

4.1 Department of Higher Education and Training

a) Overview by the Minister

Dr B Nzimande, MP: Minister made the following remarks:

· The passing of the late Prof R Botman: Vice Chancellor of University of Stellenbosch and Prof F de Villiers: Dean Faculty of Law university of Zululand were a great loss to the higher education sector.

· The post school education and training sector was the core-mandate of the department. The key challenge of the department was to cater for the needs of the 3.2 million young people between the age of 15-24 who were neither in education, employment nor training and those who still want to go back to school. This group of young people are a key focus of the department to assist them in breaking the challenge of high unemployment and poverty rate.

· The Annual Performance Plan 2014/15 targets of the department were consistent with the White Paper on Post School Education and Training and government priorities.

· The scope of the higher education sector comprises of 25 public universities with 11 general universities, six Universities of Technology (UoTs), six comprehensive universities including the two new universities established last year namely University of Mpumalanga and Sol Plaatjie University.

· The Technical and Vocational Education and Training (TVET) college sector was steadily increasing with an enrolment target of 800 000 students for the current financial year and a target to reach 1 million students by 2016. The target of the department was to have four TVET college students per one university student as this was the norm in developed economies.

· Community Education and Training Colleges (CETC) would be merged with Adult Education and Training (AET) centres to broaden their mandate and focus specifically in offering qualifications to people with trades experience or prior learning but no formal qualification.

· 2013 was declared a year of artisans and the target to enrol 26 000 artisan trainees per annum was reached while 2014-2024 is declared as a decade of artisans.

· Absorption of TVET colleges and UoTs students in industries for work integrated learning to complete their qualification remained a challenge for the department. There was a need for engagement with industries, municipalities and government departments to open up more spaces for training of these students.

· Articulation of TVET college graduates to higher education remained a challenge for the department as well recognition of credits between institutions of higher learning.

· The end of June 2014 the department published a policy on distance learning which aims to increase access to higher education since contact universities have limited capacity to enrol all qualifying students.

b) Strategic Overview

Mr G Qonde: Director-General led this part of the presentation and highlighted the following:

· The department was established in May 2009 and was responsible for all post-school education and training and particularly Outcome 5 of government’s 12 outcomes (A skilled and capable workforce to support an inclusive growth path).

· The mission of the department was to develop capable, well-educated and skilled citizens that are able to compete in a sustainable, diversified and knowledge intensive international economy, which meets the developmental goals of the country.

· The department has seven strategic goals which guided its strategic plan.

c) Budget and Expenditure Trends

Mr T Tredoux: Chief Financial Officer led this part of the presentation and highlighted the following:

· The budget of the department included direct charges which are the Skills Development Levies collected by the South African Revenue Services (SARS). For the 2014 Medium Term Expenditure Framework (MTEF) period, the department’s budget excluding direct charges increased at an annual rate of 6.8 percent from R34.3 billion in 2013/14 to R42 billion in 2016/17.

· Direct charges increased at annual average rate of 9.5 percent from R12.3 billion in 2013/14 to R16.1 billion in 2016/17.

· The department’s budget is dominated by Programme 3: University Education, which represents 83 percent of the budget in 2014/15. Normal departmental operational services represent only 1.5 percent of the budget.

· The department received additional allocations over the MTEF period of R76.3 million, R153 million and R730 million. These additional funds are mainly for improvement of conditions of service for staff in the department and TVET colleges as well as the piloting and roll out of the new student-centred loan administration model at NSFAS.

· NSFAS remained one of the biggest growth items in the budget in the MTEF period from R6.1 billion in 2014/15 to R6.8 billion in 2016/17.

· The function shift of TVET colleges from provinces to national would be implemented on 1 April 2015. While the function shift was still in process, the funding of TVET colleges consisted of college subsidies (R3.1 billion in 2014/15) and conditional grant (R2.6 billion in 2014/15).

Table 1: Financial Information

Programme	Adjusted Appropriation R’000	Medium-Term Expenditure Estimate R’000
	2013/14	2014/15	2015/16	2016/17
Administration	189 659	217 101	225 676	238 932
Human Resource Development, Planning and Monitoring Coordination	47 440	48 785	51 482	54 916
University Education	28 300 740	30 448 037	32 854 207	34 616 792
Vocational and Continuing Education and Training	5 691 008	6 042 177	6 401 915	6 748 325
Skills Development	105 053	110 581	116 677	124 236
Sub-Total	34 333 900	36 866 681	39 649 957	41 783 201
Direct charge against the National Revenue Fund	12 300 000	13 440 000	14 690 000	16 140 000
Total	46 633 900	50 306 681	54 339 957	57 923 201

Source DHET Annual Performance Plan and Budget 2014/15

· The department acknowledged the current fiscal constraints of government in relation to the budget pressures, capping of compensation of employees, reliance on funding from the National Skills Fund (NSF) and donors and pressure in the management of TVET and AET function shifts.

· The department also reported the under-spending on voted funds in 2013/14 was R1.9 million which was as a result of outstanding payment claims for examiners and moderators

· The department received unqualified audits to date.

d) Programme 1: Administration

Ms L Mbobo: Deputy Director-General Corporate Services led this part of the presentation and highlighted the following key issues:

· Priorities for 2014/15 include; the finalisation of the department’s communication strategy, reduction of the vacancy rate on funded posts by 10%, ensuring good governance through implementation of risk management strategies, ensuring adherence to policies and provision of effective and efficient human resource planning and management services.

e) Programme 2: Human Resource Development, Planning and Monitoring Coordination

Mr F Patel: Deputy Director-General HRD Planning and Monitoring Coordination led this part of the presentation which highlighted the following key issues:

· Priorities for 2014/15 include; management and maintenance of credible planning and budgeting process for the department by developing APP and producing quarterly reports, provision of accurate data on skills supply and demand in the country, maintaining the higher education and training information management system, pursuance of bilateral relations with priority countries, establishment of a well-functioning social inclusion and transformation service within the department and its entities and establishment of a coherent career management and information service by March 2015.

· Cabinet gave the Minister a responsibility to develop a policy on career development and it would be communicated with stakeholders by 31 March 2015.This programme would assist the Minister with management of the Human Resource Development Council of South Africa (HRDSA) which was chaired by the Deputy President.

· The function shift of TVET colleges and AET staff from provinces to the department would comprise of additional approximately 38000 staff personnel and the department does not have adequate resources to manage this function shift.

f) Programme 3: University Education

Dr E van Staden: Chief Director University Academic Planning and Management Support led this part of the presentation which highlighted the following key issues:

· Priorities for 2014/15 include; support to universities in expansion of equitable access and success in higher education which is the key focus of the department, monitoring of all 26 universities annually, support to NSFAS by providing earmarked grants and ensuring effective oversight, enhancement and support to expand university research capacity, expansion of health sciences education by developing a new Health and Allied Sciences University incorporating the MEDUNSA campus of the University of Limpopo and supporting the development of the new medical faculty at the University of Limpopo and expanding the provision of initial teacher education.

· The department planned to have a central applications system where students would pay a fee of R100 for one application which would assist in gaining access to higher education and training institutions.

· A comprehensive plan was developed to assist the sector with production of new generation of academics as it is largely dominated by ageing academics.

· A draft policy on Professional Qualifications for Educators in Community and Adult Education and Training was approved by the Minister and published for public comment.

· The department would be responsible for the Agricultural colleges which are currently under jurisdiction of provinces. The department established a task team in partnership with Department of Agriculture, Forestry and Fisheries to oversee the transitional arrangements and model transfer of the function shift.

· The department experienced a growth of 4.7 per cent of Full Time Equivalent (FTE) students per annum and 57 percent of enrolments in higher education were females. The new Health and Allied Sciences University would be opened in 2015.

e) Programme 4: Vocational and Continuing Education and Training

Ms G Magnus: Chief Director Vocational and Continuing Education and Training led this part of the presentation which highlighted the following key issues:

· Priorities for 2014/15 include; facilitation of collaboration between Higher Education Institutions (HEI’s) and TVET colleges towards delivery of learning programmes at level five and six of the National Qualifications Framework (NQF), registration of new private education institutions, monitoring and supporting AET centres, development of the National Senior Certificates for Adults (NASCA) for implementation in 2016/17, increasing access to programmes leading to intermediate and high level learning, improving the vocational certification rate of TVET college students, improve financial management of TVET colleges through partnership with the South African Institute of Charted Accountants (SAICA) and conclusion of the function shift process of migrating TVET colleges and AET from provincial to national competence.

· The target for total headcount enrolment in TVET colleges by 31 December 2014 is 800 000 students.

· The department would require R1 billion for implementation of NASCA by 2016.

f) Programme 5: Skills Development

Mr Z Mvalo: Acting Deputy Director-General Skills Development led this part of the presentation which highlighted the following key issues:

· The priorities for 2014/15 include; promotion of quality learning at work and for work, alignment of skills development outputs with the needs of the workplace and the broader growth needs of the country’s economy, approving the strategic plans of Sector Education and Training Authorities (SETAs) and ensuring they were in line with the national skills planning priorities.

4.2 National Student Financial Aid Scheme

Mr M Daca: Chief Executive Officer led the presentation which highlighted the following key issues:

· Since its inception in 1991, NSFAS has disbursed more than R41.5 billion in loans and bursaries to 1.4 million students to date.

· In 2013, NSFAS disbursed R8.7 billion to 416 000 students at the 23 public universities and 50 TVET colleges throughout the country.

· NSFAS derives its mandate from the NSFAS Act 56 of 1999.

· The core mandate of NSFAS is to provide financial aid to eligible students at public TVET colleges and public universities in order to improve access and success in higher education and training in particular for students from poor and working class families.

· The new student centred model was approved by Parliament in 2012 and this model would assist NSFAS to have a direct relationship with the students unlike in the past where bursary administration was managed by universities or TVET colleges on behalf of NSFAS. Funding would be provided for a qualification, not one year of study at time.

· NSFAS was concerned that despite the increase in funds for financial aid during the previous Parliament, it could only fund 50 percent of the students eligible for study loans and bursaries.

· Programme 1 Administration: The total budget for this programme is R102 million and its purpose is to conduct overall management of the entity. NSFAS is fully compliant with relevant legislation and all prioritised policies and procedures were approved. An improved audit outcome was as a result of good governance principle in place. Employee performance management system would be implemented. NSFAS targeted 60 percent of students to migrate to the new centred model and 30 percent of students at migrated institutions applied online in this current financial year.

Programme 2 Student centred-financial aid: The total budget for this programme is R49 million and its purpose is to achieve the vision and mission of the entity by creating a centralised student financial aid system and to provide funding to eligible students whilst maximising recoveries to R467 million and secure two new sources of funding. NSFAS aimed to process 90 percent of claims to be paid within 30 days, reaching out to 36 no-fee schools, to achieve improved student satisfaction.

Mr L Nage: Chief Financial Officer led this part of the presentation which highlighted the following key issues:

· Budget: The total budget for NSFAS for the 2014/15 financial year is R8.9 billion with administration (R151 million) accounting to just 1 percent of the total budget. The DHET general allocation was R2.9 billion and other funding was sourced from different partnerships.

4.3 Council on Higher Education

Prof T Mosia: Chairperson led the presentation which highlighted the following key issues:

· In terms of its policy analysis imperative, the CHE provides advice to the Minister of Higher Education and Training on request and proactively.

· For the current financial year, CHE would advise the Minister on; undergraduate degree / diploma structure, governance challenges, including the role of independent assessors and administrators as intervention mechanisms.

· The publications planned for 2014/15 financial year included; Vital Stats Public Higher Education 2012 & 2013, Distance Education in the Digital Age, Twenty Year Review of Higher Education and the State of Provision of Social Work.

· The colloquia and workshops planned for 2014/15 included; the Role of the Higher Education Qualifications Council (HEQF) and Colloquium on Standards and Development.

Prof B Thaver: Council Member led this part of the presentation which highlighted the following key issues:

· In terms of managing the HEQSF and standards in higher education, CHE would continue with its pilot projects in 2014/15. CHE was currently in discussion with pharmacy, nursing and the built environment. The release of the pilot standards for public comment would be implemented.

· In terms of auditing the quality assurance mechanisms of HEIs, CHE continued with assessment and approval of institutional improvement plans.

· Routine accreditation and re-accreditation of programmes would continue during the 2014/15 financial year. CHE has been collecting data from private and public higher education institutions and certain programmes were not approved while others were approved on condition.

· The national review of Bachelor of Social Work would be completed during the current financial year. Preparations for national review of the LLB programme were under discussion.

Mr T Mothusi: Chief Financial Officer led this part of the presentation which highlighted the following key issues:

· Budget: The MTEF allocation of CHE was R42.6 million, while the actual budget is R51.1 million leaving a shortfall of R8.4 million (20%). The total budget shortfall would be R5.8 million when the standard directorate grant budget was subtracted from the R8.4 million. The budget shortfall would be funded from personnel savings, interest received and accreditation revenue which amounted to R5.8 million. The CHE was seriously concerned that MTEF allocations could no longer sustain the entity without rollover of funds.

5. Observations

The Committee made the following observations:

5.1 Department of Higher Education and Training

a) Overview by the Minister

· It was noted with concern that universities experience a serious challenge of shortage of student accommodation and inadequate funding.

· In relation to the remarks by the Minister; the Committee recommended the alignment of the Department’s APP with the White Paper and further raised concerns on inadequate accommodation in higher education institutions, delays in issuing of outstanding NC(V) certificates in TVET colleges and slow progress of differentiation in higher education

· The Committee was concerned with perceptions of TVET colleges as inferior to universities by the general public and requested the department to develop mechanisms to make TVET colleges’ attractive places of learning.

· It was not noted with concern that differentiation in higher education remained a challenge and the department should intervene in this matter.

· The Committee was seriously concerned with the two acting positions of the Deputy Director-General (Skills Development & University Education Branch).

b) Budget

· The Committee requested for a breakdown of the infrastructure allocation to universities.

· The Committee was concerned that the targeted growth of 150 000 in students enrolment for 2015 in TVET colleges is not aligned to the current MTEF allocation.

· It was noted that previously disadvantaged universities require more allocation to address their infrastructure backlog.

· The department was requested to allocate more funding for the training and development of artisans given the fact that the economy was in short supply of their skills.

· The department was commended for receiving unqualified audit since its inception and it was requested to improve to a clean audit.

c) Programme 1: Administration & Programme 2: Human Resource Development, Planning and Monitoring Coordination

· The Committee was concerned that the department did not have adequate capacity to manage the migration of approximately 38000 employees from TVET colleges and AET centres.

· It was questioned as to whether data integration of higher education institutions was achieved.

· The department was requested to explain its risk management strategy and whether it had an approved organogram.

· The Committee was concerned with the number of unfilled funded critical posts as this might affect implementation of the plan.

d) University Education

· It was noted with concern that growth in higher education was not commensurate with funding and this has contributed to overcrowding in lecture rooms and staff demoralisation.

· The department was informed that it required more funding and staff personnel to execute its monitoring and evaluation function effectively.

· It was noted with concern that more funding was allocated to previously disadvantaged universities and research intensive institutions were inadequately funded.

· The Committee was concerned that enrolment targets set for Science Engineering and Technology (SET) programmes were not achieved by the department.

· The department was requested to allocate more funding for postgraduates studies to develop a new generation of academics.

· The Committee was concerned with the future role of the National Institutes for Higher Education (NIHEs) in Mpumalanga and Northern Cape given the fact that the two new universities had been opened in these provinces.

· The Committee was concerned with the exorbitant amounts spent on consultants by universities.

· The department was requested to review remuneration of academics especially the gaps in salaries between lecturers and senior managers.

· It was noted that funding for research initiatives should be linked with community development as universities had important role to play in nation building.

e) Programme 4: Vocational and Continuing Education and Training

· It was noted with concern that TVET college students experienced challenges in accessing workplace for work integrated learning to complete their qualifications.

· The Committee requested for a list of TVET colleges placed under administration.

· The department was requested to explain the role of CETCs in communities and timeframe for their establishment.

· The department was requested to explain whether all college councils were fully functional and whether it had funding for the construction of the 12 new TVET colleges campuses.

f) Programme 5: Skills Development

· The department was requested to explain whether it had met targets on training of artisans.

· The department was requested to explain monitoring and evaluation of SETAs.

5.2 National Student Financial Aid Scheme

· The Committee was concerned with the NSFAS budget shortfall in the short and medium term and the fact that only half of the eligible students may be assisted with bursaries and loans.

· It was noted with concern that NSFAS did not assist students whose parents earned above the threshold limit (R122 000 per annum) and yet they did not afford to pay tuition fees.

· The Committee was concerned with the new student centred model in particular; inadequate response to student queries and centralisation of the application process.

· The Committee was concerned with the daily living allowances for off-campus students.

· NSFAS was requested to explain its student debt recovery rate and whether the partnership with other government departments would assist in tracking of students profiles.

· It was noted that the target of reaching 36 no-fee schools for 2014/15 was inadequate given the fact that learners in rural areas were not aware of NSFAS funding opportunities.

· NSFAS was requested to explain whether it had an approved organogram and whether there were penalties imposed on students who failed their subjects.

· The Committee was concerned with student indebtedness as a barrier to access to higher education.

· The Committee noted with concern that it had become a norm that students protests at the beginning of each academic year in HEIs on NSFAS related queries.

· NSFAS was requested to explain whether it had data of the students assisted since 1991 with over R41 billion.

· NSFAS was requested to explain the phasing out of the funding for B Tech students and whether institutions which offered these programmes were consulted.

· The Committee wanted to know the timeframe for implementation of the one student one laptop campaign.

· The Committee questioned whether NSFAS had a risk management strategy in place and a risk manager.

· The Committee was concerned with how student satisfaction would be measured.

· The Committee wanted to know whether Financial Aid Offices would be retained when the new student centred model was implemented.

· The Committee was concerned with how student financial appeals process would be accommodated in the new student centred model.

· The Committee took note of differentiated fee structures which could disadvantage NSFAS beneficiaries.

· The Committee was seriously concerned with the allegations of corruption in administration of NSFAS bursaries at HEIs level.

5.3 Council on Higher Education

· The Committee requested for copies of the latest CHE publications.

· The Committee expressed concern for what appeared to be a deficit budget in the presentation by CHE.

· The Committee was seriously concerned that some Higher Education Institutions (HEIs) offered programmes that were unaccredited.

· CHE was requested to explain its vacancy rate and whether there were programmes where re-accreditation was withdrawn.

· The Committee was concerned with the money spent on workshops and consultants by CHE.

6. Responses

The department and its entities responded as follows:

6.1 Department of Higher Education and Training

a) Overview by the Minister

· The Minister launched a Career Guidance programme that would assist learners in getting more insight on programmes offered at TVET colleges so that they could apply to study at these colleges than universities. Negative perceptions of TVET colleges would certainly change when TVET college graduates got permanent employment.

· The department launched the Apply Now campaign which targeted learners in Grade 10 -12 to apply on time. As a result of this campaign, there were no stampedes reported in HEI’s in 2013/14. Increased enrolment in TVET colleges was as a result of the successful implementation of the Apply Now campaign. The central applications system would be launched in future where students would pay one application fee for admission at different institutions of higher learning.

· The backlog in issuing outstanding NC(V) certificates was caused by inadequate functioning of ICT system and the challenge had since been addressed.

· Differentiation in higher education was a serious matter and the department would share with the Committee its report on this matter.

· Teacher training was now a responsibility of the department and the training sites were linked to the universities.

· The department would take over the function of Agricultural Colleges from provinces shortly.

· NSFAS beneficiaries were not required to pay upfront fees required during registration, and any institution found to be non-compliant should be reported to the department.

· The Minister committed to fill the vacant DDG posts before the end of the current financial year.

b) Budget

· The department had costs containment and it would reprioritise its programmes owing to inadequate funding received from Treasury.

· The department established a solid framework to prioritise TVET colleges and the investments made in TVET colleges improved the quality of teaching and learning.

c) Programme 1: Administration & Programme 2: Human Resource Development, Planning and Monitoring Coordination

· The department achieved the target of integration of data of all its entities.

· The Minister would consult with the President on migration of employees from TVET colleges and AET sector to the department. Currently, the department did not have adequate funding and capacity to manage this function shift. The department requested the Committee to recommend to the House in terms of the Money Bills for the department to get more funding to manage the migration process.

· The organogram of the department was submitted to the Department of Public Service and Administration (DPSA) for approval. According to the DPSA, the current composition of the organogram would not assist the department in executing its mandate effectively; hence the organogram had not yet been approved.

· The department had a total of 1039 posts, out of which 937 were filled and 72 were vacant (8%). An additional 55 posts for career development service which was previously managed by the South African Qualifications Authority (SAQA) were advertised.

· The department had a manager for risk management at a Deputy Director level and risk assessments were conducted. In addition, the department had a whistle blowing policy and fraud prevention plan as part of its risk management strategy.

· The department was compliant with the 90 days period to conclude the disciplinary cases and in other instances cases were delayed owing to unavailability of witnesses. The Committee would be furnished with report on outstanding disciplinary cases. With the function shift of the TVET colleges from the provincial to national competence, the department inherited over 400 cases from TVET colleges to resolve.

d) Programme 3: University Education

· Universities were juristic persons governed by Councils and enjoyed institutional autonomy in terms of legislation. The department allocates funding to all universities and their Councils decide on how that allocation would be spent.

· The duration for the period of administrators is regulated by law and their remuneration comes from the university’s budget. Remuneration and conditions of service of employees of universities were determined by Councils. The Minister was considering the remuneration gap of academics in higher education.

· The department achieved the target of producing 9000 Engineers and it was working with the Engineering Council of South Africa (ECSA) in improving this number.

· Research intensive institutions were not neglected by the department and received funding like other universities. Furthermore, they receive part of their funding from the Department of Science and Technology for research purposes.

· The contents of the White Paper on Post School Education and Training made provision for articulation between TVET colleges and universities.

· The role of the NIHEs was to coordinate provision of higher education in the two provinces which previously did not have universities (Mpumalanga and Northern Cape). Since the establishment of the new universities, the functions of the NIHEs would come to an end. The department was considering their dis-establishment in accordance with the Higher Education Act. The NIHEs have submitted their phasing out plans; the department established a Task Team to assist with the process.

· Nation building through research was being reviewed by the department. A study conducted by Brazil ranked South African research at number one among BRICS countries in terms of community impact. Impact of research to community development remained a challenge since most of this funding came from international donors and had specific terms of reference.

· On the policy on internationalisation, the department alluded that it does not have its own policy and was guided by the Southern African Development Community (SADC) Protocol on Education and Training. However, the process of developing such a policy is underway.

e) Programme 4: Vocational and Continuing Education and Training

· The department placed eight TVET colleges under administration and 13 TVET colleges were currently under forensic investigation. Sanctions and dismissals had been imposed upon employees found guilty.

· The SAICA Support CFO partnership was implemented to sustain good financial management at TVET colleges. The term of the SAICA Support CFO was coming to an end and the department would decide on the plan.

· The Auditor-General would audit 15 TVET colleges in the 2014/15 financial year.

· Resistance by employers to open up space for work integrated learning for TVET colleges and universities of technology students remained a challenge for the department.

· The management of these new 12 TVET college campuses will be the responsibility of the currently existing colleges.

· The department announced that all 50 TVET colleges’ councils had been appointed.

· The department requested Treasury for additional funding for the construction of the 12 new TVET college campuses.

f) Programme 5: Skills Development

· The department met its target of enrolling 26 000 artisan trainees per year.

· The National Skills Accord signed by the department required employers to open up their workplace for work integrated learning, internships, learnerships and employment for students.

· The department monitored SETAs on quarterly basis and it had signed Service Level Agreements (SLAs) with them.

5.2 National Student Financial Aid Scheme

· The NSFAS board and the department were seriously concerned with the missing middle and NSFAS was currently developing a plan to assist these students and it would be submitted to the Minister within six months.

· The new student centred model would have a profile of all students assisted by NSFAS unlike the old model which did not have such details and it was piloted in eight universities (Durban University of Technology, Nelson Mandela Metropolitan University, Sol Plaatjie University, University of Mpumalanga, University of South Africa and University of Venda) and five TVET colleges (Ekurhuleni East, King Hintsa, Motheo, Umfolozi and South Cape).

· The research on the one student one laptop campaign was completed and the recommendations were discussed with the Minister. However, there was no funding for the project though discussions were still on-going.

· The partnership between NSFAS and government departments (Department of Home Affairs, Social Development and South African Revenue Services) would assist in detecting fraudulent information submitted by students during application for NSFAS bursaries.

· The sBux voucher system allocated different allowances to students and each allowance was linked to a service provider. Students were not directly paid cash by NSFAS and they did not require airtime to make transactions but only incurred cellphone charges to view balances.

· The Social Worker’s bursary was administered by NSFAS on behalf of the Department of Social Development which determined selection criteria of candidates for this programme.

· The NSFAS budget shortfall was a concern because applications for funding exceeded the available resources, thus NSFAS could only fund 50 percent of the eligible students in the undergraduate programmes.

· NSFAS will only consider funding only B Tech students in scarce skills programmes.

· Research on private sector bursaries had not yet been conducted, and NSFAS administers private bursary funding on behalf of Nedbank.

· The organogram structure of NSFAS was approved by the board in August 2013 and with the new student centred model, NSFAS would have to employ more people. NSFAS currently operated on one percent for administration out of its total budget and this was not realistic compared with other state agencies which utilised five percent of their total budget on administration.

· Students were required to pay back their debt only after they had been permanently employed and earned a minimum of R30 000 per annum. The interest rate charged by NSFAS on its loans was four percent which was way below the 12 percent charged by commercial banks, and40% of the loan was converted into a bursary if a student passed all modules in the academic year.

· A loan for the final year of study is converted into bursary if a student passed all modules. NSFAS does not fund failed and repeated subject.

· The maximum amount that NSFAS could allocate per student was R64 000 per academic year.

· TVET college students were given full bursaries by NSFAS which they were not required to pay back upon completion of their studies.

· Since 2010, NSFAS had been receiving unqualified audit opinions and there were no allegations of corruption reported to the board. However, at institutions level, there were reported cases of corruption especially by students who submitted fraudulent information.

· The Financial Aid Offices in universities would not be closed as a result of the new student centred model.

· It was noted that based on the findings of the Ministerial Working Group on Fee Free University Education report, NSFAS would require R30 billion to fund all eligible students based on the inclusive set of criteria.

· The current NSFAS budget shortfall for eligible students was not provided to the Committee.

· The Board sub-committee approved the risk management policy of NSFAS and the CFO was the risk officer.

6.3 Council on Higher Education

· The CHE would furnish the Committee with its latest publications.

· The vacancy rate at CHE was 9 percent and the total posts were 53 out of which 49 were filled with staff personnel and four vacant posts had been advertised. Remuneration offered by CHE did not compete with what universities offered hence it took long to fill vacant posts.

· CHE heavily relies on peers in higher education to conduct its work hence a larger allocation for consultants.

· CHE accredits full qualification unlike SAQA which specifically accredited unit standards.

· Spending on goods and services covered the costs of the workshops that CHE conducts as part of its work.

· The department noted that restrictions imposed on virements of funds by Treasury did not apply to public entities.

· The budget deficit for the entity would be covered from other additional sources of income which were not highlighted in its budget presentation to the Committee. Treasury had approved rollover of unspent funds from the previous financial year so that CHE can address the budget shortfall.

7. Recommendations

The Committee having considered the APP 2014/15 and Budget of the department, NSFAS and CHE recommends to the Minister as follows:

· Additional funding is required overall for the department to execute its mandate effectively; specifically for migration of TVET colleges and Adult Education and Training (AET) employees to national competence, establishment of regional offices for access and monitoring of TVET colleges, construction of 12 new TVET college campuses, filling of outstanding posts and taking over of Agricultural colleges and their employees and for funding of SAQA budget shortfall.

· Additional funding should be allocated to address the challenge of infrastructure backlogs in universities.

· The department should prioritise the finalisation of over 400 Labour Relations cases inherited from TVET colleges.

· Finalisation of the department’s organogram should be prioritised, including the filling of two DDG posts.

· The department should enrol a realistic number of students at TVET colleges for quality teaching and learning, given the current budget and infrastructure constraints.

· The Minister should ensure that implementation of articulation of TVET college graduates for both the National Certificate Vocational NC(V) and Report 191 programmes is realised.

· The Minister should ensure that the department develops its own policy to regulate internationalisation at universities and also to monitor that universities adhere to the SADC Protocol on Education and Training Article 7 (A) 1.

· Academic research by universities should ideally consider community engagement where appropriate.

· For NSFAS to execute its mandate effectively; more funding was required specifically for funding for total cost of study for all needy students both in the short and medium term and for the one student one laptop campaign.

· NSFAS should develop a plan within six months to assist the students whose parents earned above the threshold limit but cannot afford the cost of higher education.

· NSFAS target to reach out to 36 no-fee schools should be extended to all rural schools.

· A student satisfaction mechanism for a student-centred model should be developed and fast-tracked.

· The cellphone charges incurred by students to view the sBux balances should be addressed by NSFAS.

· NSFAS should review and strengthen fraud prevention strategy to take necessary measures in preventing recurrence of fraudulent activities.

· The NSFAS turn-around time for appeals processes should be expedited.

· The current MTEF budget was not adequate for the CHE to carry out its mandate effectively and there is a need for additional funding for the entity to effectively execute its mandate.

· CHE should embark on cost containment measures in particular on catering and workshops.

The majority of the Committee accepted the Annual Performance Plans 2014/15 of the Department of Higher Education and Training, National Student Financial Aid Scheme and Council on Higher Education with the above-mentioned recommendations.

Report to be considered.