ATC130927: Report of the Portfolio Committee on Higher Education and Training on the Strategic and Annual Performance Plan 2013/14 of the quality council for trade and occupations (QCTO) and National Skills Fund (NSF), Dated 11 September 2013

Higher Education, Science and Innovation

Report of the Portfolio Committee on Higher Education and Training on the Strategic and Annual Performance Plan 2013/14 of the quality council for trade and occupations (QCTO) and National Skills Fund (NSF), Dated 11 September 2013

The Portfolio Committee on Higher Education and Training, having considered the Strategic and Annual Performance Plan (APP) 2013/14 of the QCTO and NSF reports as follows:

1. Introduction

The Portfolio Committee on Higher Education and Training considered the Annual Performance Plan and Medium Term Expenditure Framework (MTEF) Budget 2013/14 of QCTO and NSF on 14 August 2013. This report captures a summary of the presentations made by both entities to the Committee, focusing primarily on the Annual Performance Plans and Budget for 2013/14 financial year which were presented in conjunction with the Strategic Plans that were tabled in Parliament on 08 April 2013 for consideration and reporting by the Committee. The report further captures observations and recommendations made by the Committee during deliberations on some of the key aspects of the presentations.

2. Background

The Strategic and Annual Performance Plans of public entities were extremely valuable sets of information to the Committee in exercising its oversight role. Engaging with public entities on these documents was very critical in scrutinising allocations of public funds and monitoring their utilisation. The annual performance targets of the entities were also scrutinised to ensure that they were in line with the Department’s mandate of expanding access to post school education and training opportunities for the young people of the country. Moreover, effective oversight and transparency were requirements for effective accountability which was the responsibility of the Committee. This was the overarching role of the Committee to invite public entities to account before it.

Portfolio Committee on Higher Education & Training:

Present: Ms D Chili (ANC),Ms N Gina (ANC), Mr S Makhubele (ANC), Prof S Mayatula (ANC), Mr C Moni (ANC), Mr S Radebe (ANC), Ms D Sibiya (ANC), Dr L Bosman (DA), Prof A Lotriet (DA), Mr N Bhanga (COPE), Mr A Mpontshane (IFP) and Mr J Dikobo (AZAPO).

Apologies: Adv I Malale (ANC) (Chairperson).

Support Staff: Mr A Kabingesi (Committee Secretary), Ms M Modiba (Content Adviser), Mr L Komle (Researcher) and Ms T Majone : Committee Assistant.

The following were present:

National Skills Fund:

Mr M Macikama : Chief Executive Officer (CEO), Mr W Minnie Chief Financial Officer (CFO), Mr E Mashabane : Director Strategic Projects, and Mr F Strydom : Director Sector Skills Programmes.

Quality Council for Trades and Occupations:

Prof P Lolwana : Chairperson, Ms J Mashabela : Chief Executive Officer (CEO) ,Ms N Madilonga : Chief Financial Officer (CFO).

Department of Higher Education and Training:

Mr M Lumka : Chief Director Sector Education and Training Authority (SETA) Coordination, Ms M Erra : Director, Ms V Patuleni : Assistant Director and Mr B Bingwa : Intern.

3. Summary of presentations

3.1. Quality Council for Trades and Occupations (QCTO)

Ms J Mashabela : CEO led the presentation which highlighted the following key issues:

· The QCTO was established in terms of the Skills Development Act 97 of 1998 and was listed as Schedule 3A Public Entity on 31 December 2010 but became fully operational from April 2012. The QCTO was then able to appoint permanent staff, CEO and six Deputy Directors.

· The mandate of the QCTO included; design and development of occupational standards and qualifications, establishment and maintenance of occupational standards and qualifications and promoting objectives of the National Qualifications Framework (NQF).

· Hiring of permanent staff was a key focus with particular attention to corporate services and governance staff in order to provide operational support needed for core business to operate. The Council would be able to fill only 32 of the 46 posts on organogram at its current funding level. Development of process and procedures for the development of qualifications would be completed in the current financial year while development of policies would receive significant attention.

· In terms of marketing, the public was made aware of the QCTO through road shows and extensive engagement with stakeholders.

· The Council’s governance structure and its sub-committee were constituted and functional.

· Programme 1 Administration: The risk management strategy would be implemented and risk register updated quarterly while supply chain management policies, procedures and systems would be developed and implemented. The Council did not have its own IT system and had since appointed IT Director. It also developed its own website which was hosted by IT Solutions owing to the fact that it did not have its own office space, but was in the process of advertising a tender to procure its own offices.

· The target for filling of outstanding posts was 46. The website of the entity was functional and 4 exhibitions would be held this year.

· The QCTO delegated some of its work and acted as an overseer.

· The National Treasury approved all the applications for roll-over funds.

· Programme 2 Occupational Qualifications Management: The sub-framework policy would be finalised and approved by Council in the year financial year. The estimated number of qualifications that would be recommended to the South African Qualification Authority (SAQA) was 70 and monitoring and evaluation reports 25. Council would develop 11 policies and the assessment and moderation system would be implemented by September 2013. Budget: The total revenue of the QCTO including additional revenue from other sources was R50 million for the 2013/14 financial year. The total allocation from the Department was R21 million and other funding came from NSF, Surplus and SETA grant. In terms of expenditure, R17.2 million went to compensation of employees, R10.7 million to goods and services and R1.2 million for capital expenditure. The overall expenditures amounted to R30.1 million.

3.2. National Skills Fund (NSF)

Mr M Macikama : CEO led the presentation which highlighted the following key issues:

· The mandate of the NSF as per Skills Development Act (SDA) included; funding of National Priority Projects, funding projects for the achievement of the SDA and fund activities of National Standard of good practice in the SDA.

· In terms of bursaries; R650 million undergraduate bursaries was allocated through National Student Financial Aid Scheme (NSFAS) to benefit 12 500 students and R106 million postgraduate bursaries was allocated through the National Research Fund (NRF) to benefit 1000 students a year.

· FET colleges were allocated R800 million capacity building grant for expansion of National Certificate Vocational NC(V) and Report 191 intake to benefit 40 000 students. R1.5 billion was allocated towards FET colleges infrastructure development of 12 new campuses.

· In terms of the New Growth Path (NGP) 35 projects were funded at a cost of R255 million to benefit 10 000 students per year.

· Industrial Policy Action Plan (IPAP) training projects were allocated R173 million to benefit 4000 learners per year.

· Rural Development training projects were allocated R270 million to benefit 8000 learners per year.

· In terms of University Infrastructure Development, the University of Pretoria (UP) was allocated R382 million towards expansion of medical and veterinary facilities, University of Johannesburg (UJ) was allocated R213 million towards development of work-integrated learning facilities for engineering students and Cape Peninsula University of Technology (CPUT) was allocated R106 million towards development of renewable energy training facilities.

· Other Skills Infrastructure Development included; National Institute for the Deaf (R44 million), Human Resource Development Council of South Africa (60 million), National Skills Authority (R60 million) and Credible Planning Mechanism & Integrated Post School Education System (R166 million).

· NSF planned to improve its operational efficiency by improving projects monitoring and evaluation. Establishment of NSF operationally as Schedule 3A Public Entity was under way.

· Finance: The operational budget of the NSF was R191 million for 2013/14. The annual revenue amounted to R2.2 billion. The net surplus in the account of NSF was R7 billion and the money was committed to projects over the period of four years. Under-spending in the compensation of employees was due to vacant posts not yet filled.

4. Observations

Quality Council for Trades and Occupations

4.1. The Committee noted the following concerns:

· 65% of the entity’s budget went to compensation of employees.

· Under-spending of R5 million from the previous financial year owing to under-performance in the core business of the entity.

· Utilisation of an external service provider to host IT services of the entity since it was accommodated by the Department.

· Delays in hiring of permanent staff in order to provide operational support needed for core business to operate.

· Absence of critical policies especially in supply chain management and human resources.

· Inadequate turn- around time for submission of qualifications to SAQA.

· Inadequate process for evaluating and accrediting qualifications owing to lack of capacity.

· Mismatch in the financial statements presented to the Committee.

4.2. The Committee noted the following progress:

· Additional 21 permanent staff that would be appointed in the monitoring and evaluation unit of the entity.

· Functional Council with its sub-committees.

· Development of part qualifications aimed at providing opportunities to young people with no Matric qualification and assist employees with occupational qualification to progress in the workplace.

· Extensive engagement with stakeholders and exhibitions for marketing of the entity to the public.

· The QCTO advertised tender for lease of a new building to accommodate.

National Skills Fund

4.3. The Committee noted the following concerns:

· The Annual Performance Plan 2013/14 document of the entity submitted to the Committee was not signed by the Executive Authority.

· The NSF was listed as a Schedule 3A public entity in October 2012 and yet it operated within the Department’s office space.

· The utilisation of consultants in the process of listing the entity as Schedule 3A public entity.

· Funding of university infrastructure development to higher education institutions did not cater for the previously disadvantaged institutions.

· Inadequate projects monitoring and evaluation capacity.

· Delays in filling of outstanding posts critical for the core business of the entity.

4.4. The Committee noted the following progress:

· Allocation of R1 billion to assist NSFAS shortfall for the 2013/14 financial year.

· The R4 billion capacity building grant committed to FET colleges.

· Commitment to assist in key national priority projects.

5. Conclusion

The QCTO was established primarily to design, develop and maintain occupational standards and qualifications. However, the commitment by the Department to ensure that this entity discharged its core mandate effectively was of great concern to the Committee. Funding remained a serious challenge to the QCTO since its establishment and this caused delays in fulfilling its mandate. The entity was now fully funded to carry out its mandate. There was commitment from the employees of the QCTO to make the entity a recognised Quality Council that played a significant role in the post school education and training sector. However, capacity constraints prevented the entity from achieving this objective.

The Committee was concerned that the NSF did not have a roadmap to operate as a fully-fledged Schedule 3A public entity. The Committee commended the commitment of the NSF in funding national priority projects. However, the main concern of the Committee was the contribution of these projects in alleviating poverty and unemployment. The monitoring and evaluation of these billions allocated to projects remained a concern for the Committee.

6. Recommendations

The Portfolio Committee on Higher Education and Training requests that the Minister of Higher Education and Training ensures that the following recommendations are considered and implemented, and provide feedback within three months of adoption of this report by the House:

a) Filling of vacant positions

The QCTO should ensure that all the vacant positions are filled as planned as there is budget for that.

b) Support

· Policy development remains a serious challenge for the QCTO. The Department should consider providing additional support to the entity especially in developing key organisational policies on supply chain management and human resources.

c) Monitoring and evaluation

· The NSF committed vast amount of monies to different priority projects and yet its monitoring and evaluation unit was not fully capacitated. The Department should assist the NSF in establishing its strategic analysis and projects initiation unit.

d) Establishment of the NSF as a Schedule 3A entity

· The Department should assist the NSF in developing a roadmap towards establishing it as a fully-fledged Schedule 3A public entity.


e) University Infrastructure Funding

· The Committee’s observations of the recent oversight visit to the University of Venda & Limpopo pointed that there was a dire shortage of infrastructure for student housing and other facilities in these institutions. The NSF University Infrastructure Funding should also prioritise these previously disadvantaged institutions with dire need.

Report to be considered.

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