ATC131022: The Budgetary Review and Recommendation Report of the Portfolio Committee on Higher Education and Training dated October 2013, dated 22 October 2013

The Budgetary Review and Recommendation Report of the Portfolio Committee on Higher Education and Training dated October 2013, dated 22 October 2013

The Portfolio Committee on Higher Education and Training, having considered the performance and submission to National Treasury for the medium term period of the Department of Higher Education and Training, National Student Financial Aid Scheme (NSFAS), South African Qualification Authority (SAQA), Council on Higher Education (CHE) and Quality Council for Trades and Occupations (QCTO) reports as follows:

1. Introduction

1.1. Mandate of Committee

In fulfilling its constitutional powers and responsibility, the Committee performs the following functions:

·         Facilitate public participation, monitoring and exercise oversight function over the work of the Department;

·         Confer with relevant governmental and civil society organs on higher education and training matters;

·         Enhance and develop the capacity of its Members to exercise effective oversight over the Executive Authority in higher education and training;

·         Monitor whether the Department of Higher Education and Training fulfil its mandate;

·         Process and recommend legislation, international protocols and conventions relating to higher education and training;

·         Participate in National and International educational conferences; and

·         Engage in any activities and programmes aimed at the development and delivery of quality public education to all South Africans.

1.2. Description of core functions of the Department

The following forms the key functions of the Department:

·         Increasing the rate at which the key skills necessary for economic growth and social development are delivered;

·          Serving the growing number of young people and adults;

·          Providing alternative entry points into and pathways through the learning system;

·          Providing quality post-school learning irrespective of where learning takes place (i.e. college, university or workplace); and

·         Providing easy pathways across the various learning sites.

1.3. Purpose of the BRR Report

The Money Bills Procedures and Related Matters Act (No 9 of 2009) sets out the process that allows Parliament to make recommendations to the Minister of Finance to amend the budget of a national department. In October of each financial year, the Committee compiles a Budgetary Review and Recommendations Report (BRRR) that assesses service delivery performances given available resources; evaluates the effective and efficient use and forward allocation of resources; and makes recommendations for consideration by the Minister of Higher Education and Training and the Minister of Finance.

1.4. Method

In preparation for the 2013 BRRR process, the Committee considered, amongst others: The 2012/13 Annual Report of the Department of Higher Education and Training, National Student Financial Aid Scheme (NSFAS), South African Qualifications Authority (SAQA), Council on Higher Education (CHE) and Quality Council for Trades and Occupations (QCTO). The Committee held a meeting with the Auditor-General regarding the audit outcomes of the Department and its entities for 2012/13, considered quarterly reports of 2012/13 and 2013/14 of the Department, considered Section 32 reports of the National Expenditures for the first quarter as published by National Treasury, the Strategic and Annual Performance Plan 2013/14 of the Department and other relevant sources of information. The report does not include input by civil society and other stakeholders since no public hearings were conducted.

2. OVERVIEW OF THE KEY RELEVANT POLICY FOCUS AREAS

2.1. Key Government policy documents that are relevant, such as SONA, Development Indicators, Budget Review, and MTBPS for 2012/13 and 2013/14

The activities of the Department in the medium term were guided by the Medium term Strategic Framework (MTSF) 2009-14. This Framework guides planning and resource allocation across all the spheres of government. The planning of the Department of Higher Education and Training took into account the medium-term imperatives as outlined in the Strategic Priority 4 of the Framework. There are two broad strategic goals for post-school education and training namely: [1]

(i). Broaden access to post-secondary education and improve higher education throughput by 20% by 2014, including access by people with disability. Higher education should contribute to the economic and social wellbeing of the country and the wider global community. It should endeavour to transfer knowledge into practical applications; through contributing to international, national, regional and local policy formulation; and through social engagement in teaching and research agendas. It should encourage intellectual curiosity, and develop skilled and socially-conscious graduates.

(ii). Ensuring that training and skills development initiatives in the country respond to the requirements of the economy, rural development challenges and social integration. The main aim would be to increase the number of skilled personnel in the priority skills areas such as design, engineering and artisanship categories that are critical to manufacturing, construction, cultural activities and other priority economic sectors. Additional skills development programmes will be implemented, purposefully aimed at equipping the unemployed and vulnerable with requisite skills to overcome poverty and unemployment.

During 2012, the President did not have new specific priorities outlined in his State of the Nation Address (SONA) for the post-school education and training. The President reiterated the prior year priorities namely: investing in producing more teachers who can teach Mathematics, Science and African languages; expansion of access to tertiary education and preparatory work for the establishment of the two new universities in Mpumalanga Province and Northern Cape Province. For the 2013 one main priority for higher education was the construction of the two new universities which was to take place in September.

2.2. Outcome-based approach - Delivery agreement targets for 2012/13 and 2013/14.

The President signed performance agreements with executive authorities of all government departments for 12 performance outcomes approach. The Minister of Higher Education was tasked with responsibility of coordinating Delivery Outcome 5 of Government’s 12 performance outcomes; namely “A skilled and capable workforce to support an inclusive growth path”. This outcome delivery agreement outlines commitments made by the Minister to ensure that the Department delivers on its mandate as outlined in the MTSF.

The following outputs have been agreed upon for this outcome agreement targets for 2012/13 and 2013/14: [2]

Output 1: Establish a credible institutional mechanism for skills planning, which includes the provision of information with regard to the demand and supply of skills, as well as a career guidance system for the country. Under this output the Department planned to maintain a coherent career management and information system and to have two modules as well as to increase number of people reached by career guidance services radio, exhibitions, helpline and web portal.

Output 2: Increase access to programmes leading to intermediate and high level learning, including the raising of skill levels of both youth and adults to access training. The target was to increase number of learners enrolling in AET level 1-4; increase number of headcount enrolments in FET Colleges’ programmes; increase number of FET College students who are awarded bursaries; develop curriculum support programmes for NASCA, and to increase number of Colleges offering higher education programmes.

Output 3: Increase access to occupationally-directed programmes in needed areas and thereby expanding the availability of intermediate level skills, with a special focus on artisan skills and other mid-level skills. In 2012/13, the target was to increase number of artisan candidates found competent nationally and to increase number of graduates receiving work integrated learning.

Output 4: Increase access to high level occupationally-directed programmes in needed areas such as engineering, health sciences, natural and physical sciences, as well as increasing the graduate output of teachers, the target was to increase graduates from universities in these fields: 10 682 Engineering Sciences, 8 535 Human Health and Animal Health and 5 052 Natural, Physical Sciences and 9 700 initial Teacher Education.

Output 5: Increase research, development and innovation in human capital for a growing knowledge economy, with a particular focus on post-graduate degrees, deepening industry and university partnerships, as well as increased investment into research development and innovation, especially in the areas of science, engineering and technology. The target was to increase graduates as follows: 44 520 postgraduates; 4 978 Masters, 1 785 doctoral; research publications: 10 807 and ratio of research output units per instructional/research staff 1.25.

3. Summary of previous key financial and performance recommendations of Committee

3.1. Response by the Minister of DHET and Minister of Treasury 2012/13 BRRR recommendations

The following section briefly summarises the 2012 recommendations and subsequent progress and challenges in 2013/14.

The Committee recommended that the Department fill outstanding vacant posts especially in the University Education and Vocational and Continuing Education and Training programmes. By the end of March 2012, the Department had a vacancy rate of 21.73%. The target for 2012/13 was to reduce the vacancy rate from 21.73% to 15%.  During 2012/13, there were 222 vacancies out of which 186 appointments were made. However in the same period 112 staff members left the service. [3] 33 of the resignations were from contracted interns. By the end of second quarter of 2013/14 vacancy rate was reduced to 15.4%. The challenge the Department faced is in regard to staff retention. [4]

Regarding the finalisation of outstanding disciplinary cases and verification process of new employees as required by the Public Service Regulations Chapter 1/VII/D8; the Department was not able to resolve the Institute for the National Development of Learnership, Employment and Labour Assessments (INDLELA) roll over disciplinary cases from the 2011/12 financial in 2012/13 due to postponements and non-availability of key witnesses. Regarding these cases, as of 9 October 2013, 2 were resolved, 1 employee resigned and 3 were still on-going. The Department has not addressed the finding by the Auditor-General on non-performance of verification process prior to the appointment of new officials as required by the Public Service Regulation Chapter 1/VII/D8.

The Department developed action plan to address all the findings raised by the Auditor-General. A bit of progress was made however 50% of the findings have been reported on for the third consecutive year in 2012/13. [5] It was recommended that the Department should assist graduates in obtaining work placement opportunities. Since the signing of the National Skills Accord by the Department and other stakeholders, there have been some improvements in placement of FET Colleges and Universities of Technology graduates for work integrated learning. The Sector Education and Training Authorities (SETAs) were also facilitating placements and made budget allocation for this purpose. Some FET colleges have started establishing Placement Units and appointing placement officers. A significant progress was made during the year under review, 14 961 graduates received work integrated learning (9 981 UoTs and 4 980 FET graduates). Rural FET Colleges experienced challenges in terms of student placement owing to lack of industry in the rural areas.

In terms of issuing of outstanding NC(V) certificates, the backlog of certification existed even before the establishment of the Department in 2009. 322 214 NC(V) Levels 2 to 4 certificates have been issued in 2013. Non-payment of certification fees to Umalusi by public and private FET Colleges delayed issuance of certificates. 18 106 certificates have not been processed due to errors in data in the candidates’ datasets. The Department was engaging with State Information Technology Agency (SITA) to address these anomalies. It was noted during oversights that Colleges reported improvement in the release of certificates. The irregularities in examination also delayed certification.

Regarding the issuance of learnership certificates, the Department reported that all learnership certificates were issued except the outstanding certificates from Services SETA (SSETA) pending verification process. The SSETA was placed under administration owing to poor governance and mismanagement.

Concerning strengthening of monitoring of and support to FET colleges to ensure that allocated budgets were used accordingly, the Department developed an FET College Turnaround Strategy to build capacity of FET Colleges on their mandate. The Department in partnership with the South African Institute of Chartered Accountants (SAICA) appointed Charted Accountants as Chief Financial Officers for each College. During the Committee’s oversight visits to Colleges, College Principals have already reported improvements in financial management of many of the Colleges. There were still challenges in some Colleges; however, the Department would continuously monitor and support such Colleges.

In strengthening governance at institutions of higher learning, the Vaal University of Technology (VUT) and Tshwane University of Technology (TUT) were out of Administration and Councils were installed and systems were put in place to improve governance. University of Zululand was also out of Administration and its Council was installed on the 08 October 2013, whilst the appointment of the Administrator at Walter Sisulu University (WSU) was extended for a further six months to allow all aspects to be finalised before the Administrator leaves office. The unresolved legal battle between the Central University of Technology (CUT) and the Minister was a cause for concern to the Committee.

The Minister has not addressed the delay in signing of SETAs’ strategic plans and annual performance plans within the required time frames. This has been a repeated finding by the AG. The Minister should implement the recommendation of the AG.

Regarding bid submission to the National Treasury to realise full operationalisation of the National Artisan Moderation Body (NAMB), the National Treasury agreed that a fully functional NAMB is a priority and its current funding grant from National Skills Fund may not be adequate. [6] Despite the fact that the National Treasury agreed with the 2012 Committee recommendations on the additional funds required to realise full operationalisation of NAMB, no additional funds were advanced to the Department regarding this function. The Department funded the establishment of NAMB from National Skills Fund as a project and appointed staff on a contractual basis to perform NAMB duties. The mandate of this body would grow and the numerous challenges with the additional work required for the FET function shift would create further burden on the existing funds. The current funding alternative was not adequate and unsustainable.

3.2. 2013/14 Committee Budget Report

Summary of the 2013/14 Budget Vote Report recommendations

The Department was requested to fill all outstanding vacant funded posts in the current financial year. It was recommended that all outstanding certificates of students in FET colleges should be finalised urgently. The Minister was further requested that the infrastructure grant should prioritise FET colleges in rural areas.

4. Overview and assessment of financial performance

4.1. Overview of Vote allocation and spending (2012/13)

Programme	Allocation R’000	Actual Expenditure R’000	Variance R’000	% Spent
1: Administration	172 151	171 655	496	99.7
2: Human Resource  Development, Planning and Monitoring Coordination	43 245	42 829	416	99.0
3: University Education	26 229 270	26 228 713	557	100.0
4: Vocational and Continuing Education and Training	5 048 152	5 045 941	2 211	100.0
5: Skills Development	93 333	93 262	71	99.9
6: Direct Charges (SETAs and NSF)	11 694 493	11 694 493	-	100.0
Total	43 280 644	43 276 893	3 751	100.0

4.2. Financial performance 2012/13

The Department had a total budget of R43 billion of which R11.4 billion or 26.5% fell under direct charge payments for the National Skills Fund and the SETAs. Exclusive of direct charges, the Department had a total budget of R31.6 billion. Over 98% of the total budget was under Transfers and Subsidies. The majority of these transfers were to universities in Programme 3 with most of the remainder falling under Programme 4 Vocational and Continuing Education and Training (VCET).

a) Adjustments for 2012/13

An additional R94.4 million was allocated to the Department and its entities for higher personnel remuneration increases than the main budget provided for, as follows:

Programme 1: Administration R1.659 million.

Programme 2: Human Resource Development, Planning and Monitoring Coordination R1.002 million.

Programme 3: University Education R1.288 million (R255 000 CHE, R406 000 NSFAS & R727 000 SAQA).

Programme 4: Vocational and Continuing Education and Training R627 000. (R87.336 million was allocated to increase transfers to FET colleges through FET College’s Conditional grant to contribute to the higher than expected improvement in conditions of service of staff in the colleges).

Programme 5: Skills Development R978 000 (R136 000 QCTO).

b) Final total and programme expenditure

Exclusive of the direct charges, the Department spent R31.6 billion or 100% of the total available budget by the end of the fourth quarter. The Department did not spend a total of R3.8 million and this under spending was mainly on compensation of employees, goods and services and capital assets. The Department also spent / transferred R11.7 billion under Direct Charges against the projected expenditure of R11.4 billion. The Department transferred R294.5 million more than projected due to actual skills levy collections by SARS exceeding projected collections.

Programme 1 Administration: The Department spent R171.7 million or 99.7% of the available budget of R172 million.

Programme 2 Human Resource Development, Planning and Monitoring Coordination: The Department spent R42.8 million or 99% of the available budget of R43.2 million.

Programme 3 University Education: The Department spent R26.2 billion or 100% of the available budget.

Programme 4 Vocational and Continuing Education and Training: The Department spent R5 billion or 100% of the available budget. There was an under expenditure of R2.2 million mainly under compensation of employees which was due to delays in claims received from exam moderators and examiners.

Programme 5 Skills Development: The Department spent R93.3 million or 99% of the available budget.

c) Virements 2012/13

Treasury approval was granted for a virement of R15 000 from goods and services in programme 2 to increase the transfer payment to the India-Brazil-South Africa Trilateral Commission by R15 000 to R443 00 due to exchange rate fluctuations.

Amounts of R1.1 million (from Programme 2); R3.4 million (from Programme 3); and R3.5 million (from Programme 5) all from compensation of employees were shifted to Programme 1 to defray excess expenditure on the cost for the International Attaché Communications Personnel Administration and Programme management. This made a total shift of R7.9 million towards Programme 1.

R3.9 million was shifted from compensation of employees, good and services in Programme 5 to Programme 4 for the payment of moderators and examiners. The virement show that programmes were not adequately funded.

d) Auditor-General Report

Financial Audit:

The Department received an unqualified audit with material adjustments to financial statements.

Audit on pre-determined objectives:

Usefulness of annual performance plan: Material findings on the indicators and targets were not being verifiable, specific and time bound.

Reliability of the annual performance reporting: Material findings on the validity, accuracy and completeness of some achievements reported on for significant targets in relation to programme 3, 4 and 5. This resulted in a qualified conclusion for each of these programmes. 37% of planned targets were not achieved. It should also be noted that 99% of the budget was utilised.

Compliance with laws and regulations:

Verification process was not undertaken for the new appointments audited. There were material adjustments to financial statements and SETA strategic plans were approved late.

Internal control deficiencies:

Leadership: Management developed action plans to address previously reported root causes resulting from previous year and recurring findings. However, some committed actions plans were not yet implemented. There was inadequate consequence management for action plans not implemented to address previously reported internal control deficiencies by external and internal audit. The Department did not have documented policies and procedures at a programme level for collating, recording and verifying of reporting on actual achievement of planned objective, indicators and targets.

Governance

Appropriate risk management activities were not implemented to manage risks identified from the risk assessment process. Prior year AG findings were not followed up by internal audit.

Other risks / concerns identified

Documentation relating to supply chain management was not always readily available. The saving on the vote was not sufficient to cover the accruals as disclosed in the financial statements. There was no policy and procedures in place for the utilisation of consultants and the monitoring of the services provided by consultants. Errors identified by the auditors of universities on the Higher Education Management Information System (HEMIS) were not followed up by the Department and the auditors of the universities. Reports submitted by auditors of universities, and other reports submitted by FET colleges and entities were not adequately reviewed. Monitoring of deliverables by administrators of universities, FET colleges and SETA’s remained a concern.

SETA audit outcomes 2012/13

Unqualified with no findings: 4

Unqualified with findings: 11

Qualified: 5

Disclaimer: 0

Outstanding audit: 1

Universities audit outcomes 2012

Financially unqualified with no findings: 18

Financially unqualified with compliance findings: 3

Qualified: 0

Reports not yet submitted due to extension for submission of financials: 2

FET colleges audit outcomes 2012

Financially unqualified with no findings: 11

Financially unqualified with compliance findings: 13

Qualified: 2

Adverse / Disclaimer: 2

Reports not yet submitted: 22

4.3. Financial performance 2013/14

The Department had a 2013/14 appropriation of R34.3 billion which represented a nominal increase of R2.7 billion, or 8.7%, from 2012/13. Transfers and Subsidies accounted for R33.7 billion of the available budget and if this amount the Department had so far transferred R15.4 billion, or 45.6%, mainly to higher education institutions. This meant that the Department had an available budget of R585.3 million for operations. Of this, the Department has spent R130.7 million, or 22.3%, the majority of which had been used on compensation of employees and goods and services.

Operational expenditure

The largest element of operational expenditure to the end of quarter 1 in 2013/14 was R 54.5 million spent under the VCET programme mainly on compensation of employees and goods and services. The next largest element was R38.8 million under Administration programme mainly for compensation of employees and goods and services, followed by R175 million under the Skills Development programme primarily for compensation of employees.

Programme 1 Administration

29.7% of operational expenditure from April to June 2013 was on Administration, representing R38.8 million, mainly for compensation of employees and goods and services. Expenditure under this programme had increased by R3.7 million, or 10.6%, when compared with the same period last year.

Programme 2 Human Resource Development, Planning and Monitoring Coordination

Operational expenditure to the end of quarter 1 was R10.2 million, the majority which was spent on compensation of employees.

Programme 3 University Education

Operational expenditure to the end of quarter 1 was R9.7 million, the majority which was spent on compensation of employees.

Programme 4 Vocational and Continuing Education and Training

Operational expenditure to the end of quarter 1 was R54.5 million. The expenditure under this programme increased by R25.4 million, or 87.4% when compared to the same period last year.  The expenditure was attributed to the increased FET college examination related activities due to an increase in the enrolments as well as site visits conducted as part of the FET College Turnaround Strategy.

Programme 5 Skills Development

Operational expenditure to the end of quarter 1 was R17.5 million, the majority of which was spent on compensation of employees and goods and services.

4.4. 2014/15 MTEF financial allocations

Summary of funding requirements for the 2014/15 MTEF

The Department experienced serious financial constraints that made it difficult for the Department to function effectively in order to ensure that it met the requirements of the current administration and citizens of the country. The Department was under pressure to fill vacancies, which was impossible within the current available resources. The Department requires close to R500 million per year over the 2014 MTEF to improve current operations.

Of critical importance was the additional funding required for; Walter Sisulu University (R3.1 billion over the three years), Increased NSFAS funding to address current shortfalls (R2.5 billion per year), the medical campus for the University of Limpopo (R800 million), establishment of the new Health University Medunsa (R500 million per annum), the central application service R60 million), curriculum review for FET college sector (R380 million), the implementation of the National Senior Certificate for Adults (R6 billion) and the on-going operationalisation of the National Artisan Moderation Body (R30 million per year from 2015/16).

5. OVERVIEW AND ASSESSMENT OF SERVICE DELIVERY PERFORMANCE

Annual Performance Plan: Total number of targets for 2012/13 and total number achieved

For the 2012/13 financial year, the Department had a total of 107 planned targets; 62 targets were achieved, 33 targets were partially achieved and 12 targets were not achieved. 11 of the partially and not achieved targets had been subsequently been achieved post March 2013.

Programme Performance

Programme 1 Administration: There were 20 targets in total, 11 were achieved, 6 partially achieved and 3 were not achieved. Achievements included; improved ICT governance, number of exhibitions and events conducted; development of a fraud and anti-corruption strategy and full compliance with the number of days to process transfers and payments. Challenges included; delays in resolving disciplinary cases, non-compliance with Occupational Health and Safety policies, late payment of invoices to service providers and absence of Editorial Board for publication of the newsletter.

Programme 2 Human Resource Development, Planning and Monitoring Coordination: There were 19 targets in total, 16 were achieved and 3 partially achieved. Achievements included; publication of academic journals, compilation of institutional data, increased number of users reached by career guidance services, publication of international co-operation and development of Annual Ministerial guidelines.

Programme 3 University Education: There were 31 targets in total, 16 were achieved, 13 partially achieved and 2 not achieved. Achievements included; increased number of students enrolled in higher education studies at universities, spatial planning of the new universities conducted, increased number of African students at universities and increased number of female students at universities. Challenges included; Environmental Impact Studies not conducted at the sites of the two new universities, gazetting of Interim Councils for the two new universities not achieved, inadequate number of doctoral graduates, inadequate number of publications and inadequate success rates at universities.

Programme 4 Vocational and Continuing Education and Training: There were 22 targets in total, 9 achieved, 10 partially achieved and 3 not achieved. Achievements included; increased headcount enrolment in public FET colleges, increased number of students awarded with bursaries and increased number of trained lecturers to support new curriculum delivery. Challenges included; inadequate pass and certification rates of NC(V) and Report 191 programmes and delays in appointment on new councils.

Programme 5 Skills Development: There were 15 targets in total, 1 was partially achieved and 4 were not achieved. Achievements included; increased number of graduates receiving Work Integrated Learning (WIL), increased number of audits conducted at SETA accredited trade test centres and increased amount earmarked to support projects of national priority. Challenges included; inadequate number of artisan candidates found competent nationally and trade testing system not developed.

5.1. Service delivery performance for 2013/14

The Committee considered the Department’s 2013/14 first and second quarter report.

April – June 2013/14 first quarter report

During this quarter under review, the Department had 23 predetermined targets out of which 13 (57%) were achieved and 10 (43%) were not achieved. Programme 1 had 7 targets out of which 4 were achieved and 3 partially achieved. It was commendable that there was 100% compliance with supply chain management (SCM) and logistical policies and standards compliance. This is a positive outcome and should be maintained throughout the subsequent quarters. Department should continue to intensify internal controls to prevent transgressions from SCM policies.

The Department held 16 exhibitions instead of planned 3 for the quarter. The achievement in this target exceeded the annual target of 10 exhibitions. The Committee noted the importance of these exhibitions because they were concerned that the achievement shows that the Department has the capacity to deliver but sets the targets low and over achieve annual target in one quarter. Programme 2 achieved all the predetermined targets within the required timeframes. The Department did not have specific targets set for the first quarter for Programme 3 but reported on progress made in relation to budget allocation transfers to universities, entities and two National Institutes for Higher Education, substantial progress towards the establishment of the two new universities in the Northern Cape and Mpumalanga and progress made towards the establishment of a new health and allied sciences university that will incorporate Medical University of Southern Africa (MEDUNSA) Campus of the University of Limpopo.

In line with Integrated Strategic Planning Framework for Teacher Education and Development, the Department established 8 Provincial Teacher Education and Development committees. The Department continued to strengthen Foundation Phase Teacher Education and funds were released to support 17 universities that submitted their progress reports. Draft Policy for Student Housing at Public Universities and Minimum Norms and Standards was gazetted for public comment.

The Department had 9 predetermined targets for Programme 4. 5 targets were achieved while 4 were partially achieved. The Department trained 67 Student Support Service Managers to implement the comprehensive student support services framework. Regarding training of lecturers to support curriculum delivery, 215 lectures were trained. The target was exceeded by 65 owing to training offered during recess and more lectures than planned took part. The Department aimed to strengthen the institutional capacity of VET to improve their performance and efficiency; 59 personnel in public FET Colleges were trained in financial management. The Committee raised concerns about the lack of College Council in three provinces (Limpopo, KwaZulu-Natal and Gauteng) though this was not a quarterly target. The Department anticipated 100% certification of first trimester Engineering Studies. However, the programmes were not certificated due to alleged examination irregularities.

Programme 5: Skills Development achieved 2 out of 5 targets. Of the 5 planned audits to be conducted at SETAs, only 1 was done. It was commendable that the target of 3000 artisan candidates entering learning nationally was exceed and 3 308 entered. The Committee cautioned that first quarter rolled over targets should not distract focus on the achievement of targets planned for subsequent quarters.

July –September 2013/14 second quarter

During the quarter under review the Department had a total of 31 predetermined targets distributed across the 4 programmes. Of the 31 targets for the quarter, 18 were achieved, 8 partially achieved and 5 not achieved.

Programme 1 had 13 targets of which 8 were achieved, 2 partially achieved and 3 not achieved. It was laudable that performance of the programme had improved. The Department has managed to make IT services available 24 hours, 7 days a week and 24/7. There was compliance in filling vacancies within the required period of 4 months and the vacancy rate was reduced to 15.47%. The Department was able to resolve disciplinary cases within 90 days window. Regarding compliance with period of time taken to pay invoices from service providers from the day the invoice was received, the target was not achieved.

Programme 3 had 3 targets which were all achieved. The programme’s performance was commendable because it was able to maintain its first quarter performance of achieving all the targets within the required time-frames. Like in the first quarter, Programme 3 did not have specific quarterly targets. Progress towards ensuring that annual targets were being achieved was presented. The two new universities in Northern Cape Province and Mpumalanga Province were established as legal entities. The programme continued to experience capacity constraints due to lack of adequate personnel and funding to exercise sufficient oversight.

Programme 4 had 9 targets of which 5 were achieved, 3 partially achieved and 1 not achieved. The programme performed well in the targets of lecturers to be trained to support curriculum delivery and number of personnel in VCET institutions trained to support the curriculum delivery in Adult Education and Training and Colleges. Of great concern was the non-achievement of target where training and assessment of the implementation of the collective agreement owing to collective agreement not finalised. There was a persistent challenge with data set on SITA IT system which delayed certification. Candidates for first semester business studies and second trimester Engineering Studies could not be certificated due to data errors.

There were 6 predetermined targets in programme 5 of which 3 were partially achieved, 2 achieved and 1 not achieved. There was consistent under achievement in this programme. The Department should pay more attention in improving performance in this programme.

5.2. Overall key achievements of the Department in 2012/13

·         The Department received its third unqualified audit opinion, though with findings. It was commendable that irregular expenditure was significantly reduced.

·         The Department’s ICT governance maturity Level moved from level 0 in 2011 to level 1 in 2012.

·         The call centre managed to resolve 94% of the calls lodged in the Presidential Hotline applicable to the Department.

·         80% of public institutional data pertaining to Public Further Education and Training, Higher Education as well as Adult Education institutional data were integrated into an education and training management information system.

·         Development framework for the two new universities was published in Government Gazette.

·         A full feasibility study for each university (infrastructure and operations) was completed which resulted in the allocation of more than R2 billion over the 2013 MTEF period for both capital and operational expenditure.

·         276 personnel in financial management, 48 chartered accountants were deployed to FET Colleges as support Chief Financial Officers to stabilise the sector.

·         Headcount enrolment at FET Colleges increased and student financial aid through NSFAS also increased.

·         The new SETA Grant Regulations came into operation on 1 April 2013 and SETAs are to target funding towards structured workplace earning and experience.

·         An artisan Recognition of Prior Learning (RPL) system at INDLELA was introduced that is focused on supporting persons who are working as assistants in the engineering field to be fully certified artisans.

5.3. Other service delivery performance findings

Oversight visit reports- summary of key service delivery issues.

Section 42(3) of the Constitution of the Republic of South Africa, Act No 108 of 1996, bestows oversight of executive action function to the National Assembly. One of the functions of the oversight listed in the Oversight and Accountability Model is to ensure that policies announced by government and authorised by Parliament are actually delivered.  In line with this constitutional directive, the Committee conducted four oversight visits to higher education and training institutions during the 2013 period. The provinces visited include; Northern Cape, North West, Limpopo, Mpumalanga, KwaZulu-Natal and Gauteng. At an empirical level, the objectives oversight visits in particular, were to assess these higher education and training in terms of increasing access to post school education and training and to assess accountability to good governance principles. The Committee specifically held strategic sessions with stakeholders of FET colleges and universities.

5.4. Oversight visit reports- summary of key service delivery issues.

Further Education and Training Colleges

The following formed key service delivery issues by the Committee during interactions with FET Colleges:

·         The introduction of FET College Bursaries contributed significantly to making education and training accessible and affordable to students from financially disadvantaged families as well as financial stability of Colleges. However, it brought with it administrative burden to Colleges. Colleges did not have dedicated staff for administration of bursaries and they utilised the Student Support Service (SSS) staff with bursary administration; leaving students without any academic and social support.

·         Colleges reported a severe loss of qualified and competent lecturers especially in the engineering fields resulting in the utilisation of under qualified lecturers. The attrition was as a result of uncompetitive remuneration packages for FET lecturers and lack of career path in the sector.

·         Funding for FET Colleges was inequitable across provinces. Colleges reported critical deficits owing to inadequate baseline funding.

·         The term of Council of Colleges in Limpopo, KwaZulu-Natal and Gauteng have expired. Colleges in Limpopo were without Councils for more 12 months owing to delays in finalising the appointment process. The College Councils in Limpopo, KwaZulu-Natal and Free State Provinces were appointed as of 18 October 2013.

·         There was acute shortage of student housing at the Colleges which resulted in high absenteeism and exploitation of students by private providers. More resources were required to build new infrastructure to address this challenge.

·         Some of the FET Colleges especially those located in urban areas did not have land to expand the physical infrastructure.

·         Colleges did not have required infrastructure and qualified staff to cater for students with disabilities and lack of funding for such students.

·         The migration process of the college function from provinces to national affected the conditions of service of FET college employees and further delayed appointment of permanent staff.

·         Delays in the issuing of NC(V) certificates by the Department dating back to 2007 affected students negatively.

·         Inadequate pass and certification rates in FET colleges remained a serious concern.

·         The examination moderation process of FET colleges had huge gaps which resulted in paper leakages.

Universities

The following formed key service delivery issues raised by the Committee during its interactions with universities:

·         The throughput and graduation rates especially at postgraduate level in universities were low.

·         Transformation especially in senior academic posts at some universities remained a concern.

·         Infrastructure especially at previously disadvantaged institutions required major improvement.

·         Shortage of accommodation remained a serious concern for students.

·         Insufficient research funding from the government

·         There were management challenges as well as inadequate funding to stabilise the institutions.

·         Lack of multi-campus funding for merged institutions.

·         Inadequate funding for the University of Venda to move towards a full comprehensive university.

·         Shortfall in terms of NSFAS allocations as well as the non-alignment of the allocations with the academic year.

5.5. Concluding comments on service delivery performance

The Department was experiencing financial constraints that made it difficult for it to function effectively and to ensure that it met the requirements of the current administration. However, the Department was committed in ensuring that access to post school education and training opportunities were increased especially for young people who were neither employed or in education. In fulfilling this mandate, the Department committed in particular to improve its personnel capacity and oversight function over its entities and higher education and training institutions.

The Department noted that work was underway to address the key services delivery issues that were highlighted by the Committee during its oversight visits. Fortunately, the Department was part of all the oversight visits that the Committee conducted and it was aware of the key issues raised during the interactions with variety of stakeholders. In terms of FET colleges; the Department noted that a process was underway for appointment of new Councils of FET colleges; the backlog of outstanding certificates was being addressed by improving the Department’s ICT systems and the Development Bank of Southern Africa (DBSA) would allocate additional funding to assist the Department in improving the challenge of student accommodation. The Department did acknowledge that it experienced serious challenges in the moderation of exams of FET colleges and the delays in the issuing of outstanding certificates were as a result of poor ICT systems. The Department further acknowledged that poor results of NC(V) and Report 191 programmes was largely attributed to inadequate number of suitably qualified lectures in FET colleges.

6. COMMITTEES FINDINGS and response

The following formed part of the Committee’s key observations:

a) Department of Higher Education and Training (DHET)

·         The Department did not have adequate office space owing to housing its own employees as well National Skills Fund (NSF) and QCTO in the same building. The sharing of office space created challenges for QCTO with regard to recruitment of staff owing to shortage of office space. Process to acquire its own space were underway and at an advanced stage. QCTO experienced challenges with regard to IT owing to not having its own building. The entity has in 2013/14 appointed IT Director and also contracted IT Solutions Company to host its website and emails.

·         The Department was not fully complying with security directives since the security system was disconnected owing to renovations.

·         The Committee was concerned that the Department did not adhere to the target of 90 days to resolve disciplinary cases.

·         Non-compliance with supply chain management policies and failure to report all transactions above R100 000 to National Treasury remained a serious concern that needed serious attention by the Department.

·         The Department was requested to improve its Information Communication Technology (ICT) systems to improve data management of FET college results.

·         The fact that the Department could not achieve the target of 30 days to pay invoices from service providers highlighted the weakness of its financial management capacity. The Committee further noted that serious action should be taken against officials who breached supply chain management policies.

·         The Department was advised to revise its human resource management policies so that vetting of employees could not be raised as a finding by the Auditor-General.

·         The Committee was concerned with staff attrition rate at the Department as a result of resignations.

·         It was noted that the Department should develop systems for verification of data of student enrolments provided by universities. It was further noted that updated data of student enrolment for 2013 should be provided by universities to the Department.

• The legislative requirement to shift the function of the FET Colleges from provincial to national competence was processed by Parliament. The process to shift the function is underway; however, the challenge is that the funds for FET Colleges still reside with provinces.

·         It was noted with concern that Environmental Impact Studies (EIS) were not conducted in the sites of the new universities during 2012/13 period and this might delay the construction of new buildings.

·         The Department was advised to address the inconsistencies in the funding of Report 191 and NC(V) programmes in FET colleges.

·         The Department was advised to resolve the audit finding raised by the AG of the photocopy machine that was lost.

·         The inadequate certification rate of NC(V) and Report 191 programmes was highlighted as a serious concern for the Committee.

·         The Committee was concerned with the challenge of shortage of accommodation especially in FET colleges as experienced by the Committee during its oversight visits.

·         Funding Norms for Colleges: Report 191 programmes were not funded comparable to NC(V). Colleges that enrolled more Report 191 students received inadequate budget while those enrolling more NC(V) students received a more generous budget.

·         The Committee was concerned with the poor ranking of the Department by the Minister of Performance Monitoring and Evaluation’s impact study.

·         It was noted with concern that increased enrolments in FET colleges were not linked with improvement in baseline funding.

• The establishment of the National Artisan Moderation Body was funded through the National Skills Fund as a project because it was not funded from the MTEF process. Staff for NAMB was appointed on a contractual basis to perform duties. The funding was inadequate and not sustainable.

• It was commendable that the Department exceeded its target of 9 700 of graduates in initial teacher education for 2012/13 by 843. One area of concern that may undermine the efforts to meet the supply and demand needs for high-quality teachers is the attrition rate of teachers. While the target for 2012/13 was exceeded it was worrying that in the same year 14 302 teachers left the service of the Department of Basic Education (DBE) owing to resignations, death, ill-health, retirement and dismissals. [7] This created a shortfall of 3 759 teachers. Resignations and retirements accounted for 11 689. It is important to note that the introduction of African languages in schools from Grade R in 2014 onwards will put pressure on the supply of teachers.

b) National Student Financial Aid Scheme (NSFAS)

·         The Committee was concerned with the inadequate allocation of upfront payment to FET colleges and universities during the beginning of the academic year.

·         The number of vacant posts especially at senior management positions of NSFAS was highlighted as a serious concern.

·         The employment equity targets especially for Indian and Coloured employees at senior management level were non-existent. It was further noted that the target for employment of people with disabilities was extremely low.

·         The Committee was seriously concerned with the high staff turnover as a result of resignations.

·         The procurement of goods and services worth more than R500 000 without obtaining three quotes was highlighted as a serious breach of supply chain management policy which should be guarded by the leadership of NSFAS.

• It was noted with great concern that the demand for financial assistance exceeds the available funds within NSFAS. For 2012/13, R1.2 billion was required to cater for DHET Final Year Programme students and only R783 million from fiscus was allocated. NSFAS used funds from loan recoveries to cover the shortfall. Funding needs of students in the two new universities will further stretch the limited resource the Scheme have.

c) South African Qualifications Authority (SAQA)

·         The measures put in place by SAQA in improving the credibility of qualifications offered by South African higher education and training institutions were commended by the Committee.

·         SAQA was advised to employ permanent personnel for internal audit function to improve the capacity of the entity.

·         The Committee also requested SAQA to maintain its clean audit status just like the previous financial year.

·         The funding shortfall of R12 million required for digitisation of pre-1992 learner and teacher records in order to speed up verification process and prevent the use of fraudulent qualifications should be addressed.

d) Quality Council for Trades and Occupations (QCTO)

·         The filling of vacant posts should be prioritised for the efficiency of the entity.

·         The under achievement of targets was a serious concern that should be seriously addressed in the current financial year.

·         The migration process from the Department should be prioritised so that the entity can implement its mandate effectively.

·         Conceptualisation and development of qualifications should take cognisance of international good practices.

e) Council on Higher Education (CHE)

·         The Committee was seriously concerned with the target to employ people with disabilities in the entity.

·         It was noted that the undergraduate curriculum review to extend all programmes by one year should be flexible in manner that students who passed Matric with distinction be allowed to enrol in three year courses.

·         High staff turn-over during 2012/13 was noted as a concern that needed to be addressed by the entity.

·         It emerged that 28% of targets were not met by the entity during 2012/13 and the Committee requested CHE to improve on delivery of its mandate.

·         CHE was requested to consider the effectiveness of the merger of historically disadvantaged institutions specifically Walter Sisulu University (WSU), which had been constantly destabilised.

·         The Committee was concerned that only 27% of new university entrants finished their studies on nominal time.

General finding

• In terms of Employment Equity, the Committee was concerned that NSFAS, SAQA, CHE and QCTO have not met their employment equity targets with regard to appointment of persons with disabilities. The Committee was seriously concerned that NSFAS have targets for persons with disability in the semi-skilled level only. Furthermore the Committee was concerned with transformation targets within the entities.

7. Summary of reporting requests

The Committee requested for the following:

a) Department of Higher Education

·         The Department was requested to submit the 2013 updated student enrolment data of public higher education institutions to the Committee.

b) National Student Financial Aid Scheme

·         NSFAS was requested to submit a comprehensive report with details of the irregular expenditure highlighted by the Auditor-General in the Annual Report of the entity.

c) Council on Higher Education

·         CHE was requested to submit the report on review of challenges facing undergraduate physics education.

8. CONLUSION

Notwithstanding the challenges that the Department encountered in 2012/13 it was commendable that the Department continued to deliver on its core mandate in ensuring that access to post-school education is broadened as well as increasing the number of skilled and capable workforce for the growing economy through artisan development programmes. Headcount enrolments have increased significantly at universities and Further Education and training Colleges. These increases are attributed to the increased allocation in the National Student Financial Aid Scheme. A tremendous progress was also recorded in the preparation for the opening of the two new universities in 2014 Mpumalanga and Northern Cape.

The Portfolio Committee also noted improvements in the release of NC(V) Level 1 to 4 certificates of which the backlog dated from 2007. 322 214 certificates were issued to students though there were some certificates which were still outstanding owing to data errors. It is hoped that the Department will work around the clock to clear the backlog. It is also important to note that there were FET Colleges that were doing extremely well under the circumstances. The Committee would continue to support the Department and its entities in their endeavours to ensure that the country has a credible post-school education and Training sector.

9. Recommendations

The Committee recommends that the Minister of Higher Education and Training consider the following recommendations and provide feedback to the Committee:

a) Programme 1 Administration

·         The action plan developed to address the audit findings should be implemented and monitored.

·         The Minister should submit a bid to the National Treasury for additional funding required for the following; R500 million per year over MTEF to improve current operations, R3.1 billion for Walter Sisulu University over the three years, R2.5 billion per year for NSFAS to address current funding shortfalls, R800 million for the medical campus for the University of Limpopo, R500 million per year for the establishment of the new Health University Medunsa, R60 million for the Central Application Service, R380 million for the Curriculum review for the FET College sector, R6 billion for the implementation of National Senior Certificate for Adults, R30 million per year  from 2015/16 for the on-going operationalisation of NAMB and R12 million for SAQA to address the digitisation of pre-1992 learner and teacher records in order to speed up the verification process and prevent the use of fraudulent qualifications.

• The Department did not achieve all the planned targets in some cases owing to capacity constraints. Thus, all vacant positions should be filled and a retention strategy should be developed to reduce the high attrition rate of qualified and competent employees.

·         The fact that 37% of planned targets were not achieved highlighted serious challenges in the delivery mandate of the Department. The Minister should ensure that the Department complies with its annual performance plans 2013/14.

• The Minister should ensure proper planning during strategic planning sessions and that implementation plans are properly costed.

·         The Minister should ensure that those charged with recruitment in the Department conduct a verification process prior to the appointment of new officials as required by the Public Service Regulation Chapter 1/VII/D8. The Committee further recommends that SAQA speeds up the processing of qualification verification requests.

• Leadership should set the correct tone at the top by ensuring that accountability is enforced and appropriate consequences are taken against officials who intentionally do not comply with the requirements of applicable prescripts, especially with regard to supply chain management.
• Employment of persons with disabilities should be prioritised by the NSFAS, SAQA, QCTO and CHE and there should be 100% adherence to national employment equity targets.

b) Programme 2 Human Resource Development, Planning and Monitoring Coordination

·         The AG noted that there were no policy and procedures in place for the utilisation and monitoring of the services provided by consultants in the Department. The Department should develop policies and procedures for procurement of services of consultants.

c) Programme 3 University Education

·         The AG noted that errors identified by the auditors of universities on the HEMIS systems were not followed up by the Department. The Department should develop a system to independently verify the data provided by universities in the HEMIS.

·         The Department should ensure that higher education institutions submit updated enrolment data of students for each academic year.

·         It emerged that the Environmental Impact Studies were not conducted at the sites of the new two universities. The Department should ensure that impact studies are assessed before construction commences  at the new sites.

·         There were delays in finalising the Central University of Technology administration case. The Minister should urgently finalise the matter to ensure governance and management stability in the institution.

·         Additional funding should be allocated to the University of Venda for infrastructure development and staff costs for the conversion to a comprehensive university.

·         Walter Sisulu University should be adequately funded and proper management and governance systems are put in place to ensure  stability of the institution.

·         The Department should ensure  that proper systems are in place to support the University of Limpopo unbundling process and care be taken to ensure that the university is still in a good financial standing.

·         The Minister should engage the Minister of Basic Education to review the target with the intention of increasing enrolment to match the attrition rate.

d) Programme 4 Vocational and Continuing Education and Training

·         The Minister should engage with relevant authorities at provincial level to acquire land for FET Colleges infrastructure expansion.

·         Progress with shifting of the FET college function from provinces to national was slow. Funding for FET Colleges and Adult Education and Training should follow the function. Thus, funds need to be shifted from the Provincial Equitable Share to the Department of Higher Education and Training.

·         The Minister should review the current College Funding Norms in order to develop an integrated funding model that will ensure that Colleges are funded equitably, and that Colleges that are located within the industry where Report 191 qualifications are in demand are not disadvantaged by the funding norms.

·         All Colleges should establish financial aid offices with dedicated staff to administer NSFAS and College donor funded bursaries.

• The FET Colleges Act 16 of 2006 as amended did not make provisions for College Councils to extend their terms upon expiry. The Minister should consider amending the Act to make provision for the extension of Council term by six months while the process of appointing the Council Members is underway.

·         During the Committee’s oversight visits, it emerged that certain FET colleges owed Umalusi and could not get certificates of students. The Minister should develop a funding mandate for the examination function of Umalusi.

·         Funding should be made available for curriculum review for Report 191 and NC(V).

• The Department should liaise with government departments and entities to open up their workspaces for work integrated learning for FET and Universities of Technology graduates especially from rural areas.

e) Programme 5 Skills Development

·         The AG noted that the strategic plans of SETAs were approved late by the Minister. The Minister should ensure that strategic plans of SETAs are approved before the end of the financial year.

·         In ensuring that artisan development remains at the forefront of skills development in the country as well as to guarantee proper coordination and quality assurance in artisan development; the Minister should submit a funding bid to National Treasury for funding of the full operationalisation of NAMB through the MTEF process.

f) Entities

·         The Committee recommends that the entities of the Department should comply with the recommendation of the Auditor-General.

10. Appreciation

The Department and its entities were commended for having unqualified audits. The Committee acknowledged the Department for its comprehensive Annual Report presentation which was in line with the BRRR requirements. The Committee thanked the Office of the Auditor-General South Africa (AGSA) which met with the Committee while it was on oversight visit in Gauteng for its presentation on audit outcomes 2012/13 of the Department and its entities. The Committee appreciated the presentations which were made by the Department’s entities namely; NSFAS, SAQA, QCTO and CHE on their Annual Report 2012/13. Lastly, the Committee thanked the National Treasury for its analytic reports on the Department’s spending trends / patterns for 2012/13.

11. REFERENCES

Auditor-General South Africa (2013) Department of Higher Education and Training: Audit Outcomes 2012/13, Presentation made to the Portfolio Committee on Higher Education and Training, 17 September 2013, Protea Hotel Johannesburg

Department of Higher Education and Training (2013) 2012/13 Annual report

Department of Higher Education and Training (2013) 2013/14 Second Quarter Report, Parliament of the Republic of South Africa, 09 October 2013

Department of Higher Education and Training (2012) 2012/13 Annual Performance Plan

National Treasury (2012) Response of National Treasury to the Portfolio Committees’ 2012 Budgetary Review and Recommendations Report (BRRR)

News24 (2014) Over 14 000 teachers quit education department, www.news24.com accessed 10 October 2013.

The Presidency (2010) Delivery Agreements, www.thepresidency.gov.za

The Presidency (2009) Medium Term Strategic Framework: A Framework to Guide Government’s Programme in the Electoral Mandate Period (2009 – 2014)

Report to be considered.

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[1] [1]The Presidency, 2009

[2] The Presidency, 2010

[3] DHET, 2013a

[4] DHET, 2013b

[5] AGSA, 2013

[6] National Treasury, 2012

[7] www.news24.com , 2013