ATC141027: Budgetary Review and Recommendation Report of the Portfolio Committee on Higher Education and Training on the Performance of the Department of Higher Education And Training and its Entities for the 2013/14 Financial Year, dated 22 October 2014

BUDGETARY REVIEW AND RECOMMENDATION REPORT OF THE PORTFOLIO COMMITTEE ON HIGHER EDUCATION AND TRAINING ON THE PERFORMANCE OF THE DEPARTMENT OF HIGHER EDUCATION AND TRAINING AND ITS ENTITIES FOR THE 2013/14 FINANCIAL YEAR, DATED 22 OCTOBER 2014

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 Qualifications Authority (SAQA), Council on Higher Education (CHE) and Quality Council for Trades and Occupations (QCTO) reports as follows:

1. INTRODUCTION

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 (NA). One of the functions of the oversight listed in the Oversight and Accountability Model of Parliament of the Republic of South Africa is to ensure that policies announced by government and authorised by Parliament are actually delivered. Furthermore, the Money Bills Amendment Procedure and Related Matters Act, 2009 (Act No. 9 of 2009) requires that the National Assembly, through its committees, conducts annual assessment of the performance of each national department with regard to the medium term estimates of expenditure. This report accounts for work done by the Portfolio Committee on Higher Education and Training during assessment of the performance of the Department of Higher Education and Training and the entities it oversees. The report further makes financial and non-financial recommendations for consideration by the Minister responsible for the Vote and the Minister of Finance.

1.1. Mandate of Committee

Parliament derives its mandate from the Constitution of the Republic of South Africa. The Portfolio Committee on Higher Education and Training has been established as an instrument of the National Assembly in terms of the Constitution, legislation, the Joint Rules of the NA and the resolutions of the House to facilitate oversight and the monitoring of the Executive. The Portfolio Committee, thus, facilitates public participation, monitors and exercises oversight function over the work of the Department of Higher Education and Training; confers with relevant governmental and civil society organs on higher education and training matters; p rocesses and recommends legislation, international protocols and conventions relating to higher education and training; p articipates in national and international educational conferences; and p articipates in any activities and programmes aimed at the development and delivery of quality public post-school education to all South Africans.

The Portfolio Committee oversees the work of the Department of Higher Education and Training and all entities reporting to it, whose aim is to develop and support a quality post-school education and training sector; and to promote access to higher and vocational education and training and skills development training opportunities. The public entities and institutions reporting to the Department include; Quality Councils, National Student Financial Aid Scheme (NSFAS), universities, TVET colleges, Sector Education and Training Authorities (SETAs), public Adult Education and Training (AET) centres and National Institutes for Higher Education (NIHE).

1.2. Description of core mandate of the Department of Higher Education and Training

The mandate of the Department originates from the Constitution of the Republic of South Africa, all post-school education and training related legislation passed by Parliament, and the Medium Term Strategic Framework (MTEF) of government which requires post-school education and training to be transformed and democratised in accordance with the values of human dignity, equality, human rights and freedom, non-racism and non-sexism.

The vision of the Department as articulated in the revised Strategic Plan 2010/11-2014/15 and Annual Performance Plan (APP) of 2013/14 is of South Africa in which we have a differentiated and fully inclusive post-school education and training system that allows all South Africans to access and succeed in relevant post-school education and training institutions, in order to fulfil the economic and social goals of participation in an inclusive economy and society.

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 Amendment Procedure 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 Portfolio Committee compiles a Budgetary Review and Recommendations Report (BRRR) that assesses service delivery performances given the 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 2014 BRRR process, the Portfolio Committee considered key policy documents that inform the work of the Department, among others, the Medium Term Strategic Framework (MTSF) 2009-2014, the New Growth Path Framework (NGPF), the Financial and Fiscal Commission (FFC) report on status and effectiveness of higher education funding in South Africa, Higher Education South Africa (HESA) report on funding in South Africa context and key challenges the National Development Plan (NDP), the revised 2010/11-2014/15 Strategic Plan of the DHET, 2012/13 and 2013/14 Annual Performance Plans (APPs) and 2013/14 Annual Reports of the National Student Financial Aid Scheme (NSFAS), South African Qualifications Authority (SAQA), Council on Higher Education (CHE) and Quality Council for Trades and Occupations (QCTO), 2012/13 and 2013/14 reports of the Auditor-General of South Africa (AGSA). The Portfolio Committee also considered the 2013 report of the Department of Planning, Monitoring and Evaluation (DPME) on the assessment of performance of national and provincial departments.

The Portfolio Committee had a briefing session with the AGSA on the 2013/14 audit outcomes of the department and the post-school education and training institutions that included the Schedule 3A Public Entities of the Department, universities, 15 TVET colleges audited and the National Institutes for Higher Education (NIHE). Furthermore, the Portfolio Committee considered Section 32 reports of the National Expenditures for the 2014/15 first quarter as published by National Treasury, the Strategic and Annual Performance Plan 2014/15 of the Department and other relevant sources of information.

The limitations of the report is that it does not include inputs by civil society and other stakeholders since no public hearings were conducted. However, the Portfolio Committee invited Higher Education South Africa (HESA), Higher Education Transformation Network (HETN) and the South African College Principals Organisation (SACPO) to send their written submissions and to be part of the briefings. The Portfolio Committee received no submissions from the invited stakeholders and they tendered apologies for not availing themselves to the briefings.

2. OVERVIEW OF THE KEY RELEVANT POLICY FOCUS AREAS

2.1. Key Government policy documents that are relevant, such as State of the Nation Address (SONA), Development Indicators, Budget Review, and Medium Term Budget Policy Statement (MTBPS) for 2013/14 and 2014/5

The Department of Higher Education and Training’s mandate originates from government priorities as pronounced in the Strategic Priority 4 of the Medium Term Strategic Framework (MTSF) 2009-2014, to strengthen the skills and human resource base. There are two broad strategic goals for post-school education and training namely, (i) to broaden access to post-secondary education and improve higher education throughput by 20 percent by 2014, including access by people with disabilities; and (ii) ensuring that training and skills development initiatives in the country respond to the requirements of the economy, rural development challenges and social integration. Furthermore, the work of the Department is informed by the policy goals and targets as articulated in the National Development Plan (NDP).

The NDP proposes the following targets for the post-school education and training by 2030: 1.6 million enrolments in universities, 75 percent throughput rate for degree programmes, 5 000 doctoral graduates per year, 30 000 artisans per year and 1.2 million enrolments in the TVET college sector.

2.2. Outcome-based approach- Delivery Agreement targets for 2013/14

Over and above the NDP, the work of the Department is also informed by Delivery Outcome 5 of the 12 Delivery Outcomes of Government, namely; a skilled and capable workforce to support inclusive growth path. This Outcome consists of three separate delivery agreements and outputs. The Department’s medium term strategic plan and performance deliverables are aligned to the objectives of this Outcome.

The targets planned for 2013/14 were as follows:

2.2.1. Output 1 : Establish and maintain a coherent career management and career information system. 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 the number of people reached by career guidance service through radio, exhibitions, helpline and web portal.

2.2.2. 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 targets planned for 2013/14 were; to increase number of learners enrolling in AET level 1-4: 278 000; increase number of headcount enrolments in TVET colleges’ programmes: 650 000; increase number of TVET college students who are awarded bursaries: 222 817; develop and approve National Senior Certificate for Adults (NASCA) learning and teaching support materials and to increase number of colleges offering higher education programmes.

2.2.3. 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 2013/14, the target was to increase the number of artisan candidates entering learning nationally and the number of candidates found competent nationally and to increase number of graduates receiving work integrated learning (WIL).

2.2.4. 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: 9 974 Engineering Sciences, 8 015 Human Health and Animal Health and 5 387 Natural and Physical Sciences and 10 673 initial Teacher Education.

2.2.5. 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 for the 2013/14 was to increase graduates as follows: 44 301 postgraduates; 24 019 Honours, 4 978 Masters, 1 785 doctoral; research publications: 10 807 and ratio of research output units per instructional / research staff 1.30.

2.3. Overview of revised Strategic Plan and Annual Performance Plans 2013/14

In three of the five programmes of the Department, there were no major changes made to planned targets and indicators, except for minor refinements to ensure adherence to the specific, measurable, attainable, relevant and time-bound (SMART) principle. Revision of the APP occurred in Programme 3: University Education and Programme 5: Skills Development. The revision in Programme 3 was to deal with the misalignment between the targets for any particular academic year and date on which these could be reported. The targets indicated in the original APP in the 2013/14 column specified the target for the 2013 academic year. However, this could not be reported in that financial year and it will only be audited and verified by October 2014. In order for the reporting of verified data on planned enrolment targets is aligned to the financial year, the APP had to be adjusted. In the revised APP, all targets are the expected Higher Education Management Information System (HEMIS) audited enrolment / graduate data for the 2012 academic year, reported and verified by October 2013.

Unrealistic targets for scarce skills graduates were indicated in the Minister’s Performance, Monitoring and Evaluation (PME) agreement. As reported in the 2012/13 Annual Report and in the PME monitoring reports, specifically the targets for engineering, and human and animal health graduations were not achievable and needed to be adjusted. These targets were adapted to be in line with actual expected outputs for the 2012 academic year that could be reported in the 2013/14 financial year Programmes.

Changes to performance indicators during the year under review for Programme 5, Skills Development were necessitated by the gazetting of the National Skills Fund (NSF) as a Schedule 3A public entity by the Minister of Finance with effect from 1 April 2012. For this reason, during the year under review, the Minister of Higher Education and Training approved addendum to the 2013/14 APP effectively changing the compilation of performance indicators for this programme. As such three performance indicators together with the associated strategic objectives were removed from the original APP.

3. SUMMARY OF PREVIOUS KEY FINANCIAL AND PERFORMANCE RECOMMENDATIONS OF THE PORTFOLIO COMMITTEE

3.1. 2013 BRRR RECOMMENDATIONS

This section briefly summarises the 2013 recommendations and subsequent progress and challenges in 2014/15.

3.1.1. Summary of key financial and non-financial performance recommendations made by the Committee and response by the Minister of Higher Education and Training

During the 2012/13 annual reporting, the Portfolio Committee recommended that the Department develops, implements and monitors an action plan to address the audit findings by the AG and internal audit. The Department reported that it developed a detailed plan and implementation was monitored and reported to the Director-General and Minister. Progress on implementation was not in all instances satisfactory and other challenges were not fully addressed by the relevant managers. It was very concerning that many of those findings were recurring from previous financial years and even during the year under review. This showed that leadership did not implement consequence management against employees who were not ensuring that the action plan was fully implemented in their job descriptions.

Concerning a recommendation to submit a bid to National Treasury for additional funding for the department operations and entities, the Department did submit requests for additional funding during the 2014 MTEF process and, the bids were not approved except for the South African Qualifications Authority (SAQA). The additional allocations for SAQA for the verification of government employees qualifications were as follows: 2014/15: R3 million, 2015/16: R4.5 million and 2016/17: R5.5 million. The Department had follow-up discussions with National Treasury for additional allocation for 2015 MTEF.

Concerning the filling of all funded vacant positions and the development and implementation of retention policy, the Department developed a draft policy on staff retention and it was in consultations with unions in the previous financial year. The challenge was that Departmental compensation of employees had been capped by cabinet and consequently, the Department would not reach a situation within the current baseline allocations to fill all vacancies.

The Portfolio Committee also recommended that the Minister should review the current College Funding Norms in order to develop an integrated funding model that would ensure that TVET colleges were funded equitably, and that they that were located within the industry where Report 191 qualifications were in demand and were not disadvantaged by the funding norms. The Department had demonstrated its commitment and the process was underway to put measures in place for the review of the TVET College Funding Norms and Standards to be supportive of the current thrust to increase access to education and training programmes at TVET colleges.

Regarding the establishment of Financial Aid Offices (FAO) with dedicated staff to administer NSFAS and TVET college donor funded bursaries, the Department created a Deputy Principal (Registrar) post on the proposed organogram for TVET colleges, which would be responsible for, among others, enrolment management. Furthermore, linked to the enrolment management was financial aid and it was within this proposed new structure that TVET colleges should create / consolidate functional financial aid units, with dedicated staff that reported to the Registrar.

In relation to outstanding certificates emanating from TVET colleges owing certification fees to the Council for Quality Assurance in General and Further Education and Training (Umalusi), it was reported that all public TVET colleges’ certificates outstanding for this reason had been issued. This occurred after engagement between the Department and Umalusi towards lifting the backlog on TVET colleges owing; and the Department instructed TVET colleges to effectively settle their debts with Umalusi. It is commendable that with effect from April 2013, all public TVET colleges were exonerated from paying certification fees since the funding for this function was now built into the grant allocation to Umalusi by the National Treasury. In future, only private colleges would continue paying for certification fees.

The Portfolio Committee recommended that funding should be made available for curriculum review for Report 191 and National Certificate Vocational NC(V) programmes. The Department reported that no review was conducted due funding not being allocated for this function and there was no means of reprioritising within the current funding baseline. The Department was equally concerned that given the ongoing feedback from employers and industry stakeholders which indicated that aspects of the NC(V) curriculum needed revision or strengthening, particularly to make it more relevant to industry needs. The Report 191 programmes were outdated in most instances.

It was noted with serious concern that the review of programmes that made the sector the backbone of technical and vocational education and training to support long-term competiveness of country’s economy was not funded. The NDP clearly stated that the sector suffered from a poor reputation due to the low rate of employment of college graduates. Teaching, learning and student performance were inadvertently and adversely impacted as a result and, the fact that graduates were considered unsuitable for placement in work places in certain instances.

3.1.2. Evaluation of the response by the DHET and Minister of Finance

The Minister responded to one recommendation, namely, progress with shifting the TVET college function from provinces to national government had been slow. Ideally, funding for TVET colleges and Adult Education and Training (AET) should follow the function shift. As a result, funds needed to be shifted from the provincial equitable share to the Department of Higher Education and Training. The response for the National Treasury was that they shared the Portfolio Committee’s concern that the function shift was slow and, Treasury was working with the department to speed up the process through engagement with provincial treasuries and education Departments. The shifting of the TVET college function was at a more advanced stage than the other shifts since most of these funds were already ring-fenced through the TVET colleges’ conditional grant and the Department paid subsidies directly to TVET colleges.

Although the response of the National Treasury appeared to provide little assurance regarding the ring-fenced funding through conditional grants. However, this a disjuncture between funding and the is creating challenges to TVET colleges, for example, during the year under review an amount of R32 million was underspent on conditional grants by the Provincial Education Departments (PEDs) of Limpopo, North West, Eastern Cape, Free State and Northern Cape. TVET colleges could not appoint permanent lecturers and this had implications on teaching and learning.

3.2. 2014/15 Committee Budget Vote 17 Report

Summary of selective 2014/15 Committee Budget Vote 17 Report Recommendations:

The Portfolio Committee after considering the strategic plan, annual performance plan and budget of the department, the National Student Financial Aid Scheme (NSFAS) and the Council on Higher Education (CHE) in July 2014 recommended as follows:

· The Portfolio Committee observed that the mandate of the Department was not commensurate with the current budget allocations and recommended that for the Department to execute its mandate effectively, additional funding is required overall specifically for, construction of the 12 TVET college campuses, migration of TVET college employees and Adult Education and Training employees from provincial to national competence and to address infrastructure backlog at universities;

· In relation to vacant posts, it was recommended that the department should prioritise filling of all outstanding funded vacant posts especially the two vacant posts of the Deputy-Director General (DDG) for University Education and Skills Development;

· In relation to effective and efficient monitoring and support for TVET colleges, it was recommended that; the department should establish regional offices in all provinces. It was further recommended that the Minister should intervene on urgent basis to ensure that all funding for TVET colleges is allocated to and managed by the department;

· In ensuring that students from disadvantaged family background access post-school education and training institutions, it was recommended that more funding was required specifically for; funding full cost of study for all needy students both in the short and medium term and for the one student one laptop campaign; and

· In relation to the CHE, the Portfolio Committee observed that the current MTEF was not adequate for the CHE to carry out its mandate effectively and recommended an increased budget over the medium term to enable the entity to effectively execute its mandate. It was also recommended that CHE should embark on a cost containment measures in particular cutting costs on catering and workshops.

4. OVERVIEW AND ASSESSMENT OF FINANCIAL PERFORMANCE

4.1. Financial Performance 2013/14

The Department had a total budget of R46 billion of which R12 billion or 26 percent fell under direct charge payments for the National Skills Fund and the SETAs. Exclusive of direct charges, the department had a total budget of R34 billion, R 33, 9 billion, which is 99 percent of the R34 billion went to Transfers and Subsidies, with the majority being transfers to universities in Programme 3 and the remainder allocated to Programme 4 Vocational and Continuing Education and Training (VCET).

4.1.1. Appropriations per Programme (2013/14)

Programme	Adjusted appropriation	Final appropriation	Actual Expenditure	Variance	% Spent
	R'000	R'000	R'000	R'000	%
Administration	189 659	203 729	203 044	685	99.7
Human Resource Development, Planning and Monitoring Coordination	47 440	43 827	43 535	292	99.3
University Education	28 300 740	28 299 507	28 299 279	228	100.0
Vocational and Continuing Education and Training	5 691 008	5 686 806	5 686 388	418	100.0
Skills Development	105 053	100 031	99 723	308	99.7
Direct Charges (SETAs and NSF)	12 090 186	12 090 186	12 090 186	0	100.00
Total	46 424 086	46 424 086	46 422 155	1931	100

4.1.2. Adjustments for 2013/14

Adjustment was made for the increase in improvement of conditions of service in respect of TVET college personnel to the value of R11 509 000.

4.1.3. Final total and programme expenditure

Exclusive of the direct charges, the Department spent R34.3 billion or 100% of the total available budget by the end of the fourth quarter. The Department did not spend a total of R1.9 million and this under spending was mainly due to savings on funds provided for posts on the staff establishment of the Department that became vacant during the year and could not be filled as projected and concomitant savings that resulted from this; Legal and Legislative fees for claims not received for court cases as projected and fewer cases outside Pretoria; under-spending on Ndinaye building which was not occupied during 2013/14; Institute for National Development of Learnerships Employment Skills and Labour Assessments (Indlela) security system because of transitional arrangements and extent of the project, as well as cost containment measures put in place to ensure that the Department would not overspend on its budget. The Department also spent / transferred R12 billion under Direct Charges

Programme 1 Administration: The Department spent R203 044 000 or 99.7% of the available budget of R 203 079 000.

Programme 2 Human Resource Development, Planning and Monitoring Coordination: The department spent R43 535 000 or 99.3% of the available budget of R43 827 000.

Programme 3 University Education: The Department spent R28 299 279 or 100% of the available budget.

Programme 4 Vocational and Continuing Education and Training: The Department spent R5 686 388 000 or 100% of the available budget.

Programme 5 Skills Development: The Department spent R99 723 000 or 99.7% of the available budget.

4.1.4 Virement s

In relation to programme spending, the Department made virements amounting to R14 million from programmes 2, 3, 3, 4 and 5 to programme 1. The virements were as follows: R3 623 000 from Programme 2 to Programme 1; R1 233 000 from Programme 3 to Programme 1; R4 202 000 from Programme 4 to Programme 1 and R5 022 000 from Programme 5 to Programme 1. The virements were made to address excess expenditure on costs for the International Attaché, communications, personnel administration, Audit Fees, State Information Technology Agency (SITA) accounts and property management in Programme 1 as well as for examiners and moderators claims in Programme 4. The Department reported that funds were shifted between programmes within compensation of employees in order to accommodate possible over-expenditure in the compensation of employees on some of the programmes. Funds were also shifted between programmes within compensation of employees, in order to accommodate possible over-expenditure on compensation of employees on some of the programmes.

The virement was approved by the Director-General in accordance with the Public Finance Management Act (PFMA) and reported to National Treasury and the Minister.

4.2. Auditor-General’s Report

4.2.1. Financial Audit:

The Department received an unqualified audit with matters of emphasis.

4.2.3. Audit on pre-determined objectives:

Usefulness and reliability of reported performance information: The AG did not raise any material findings on the usefulness and reliability of the reported performance information.

4.2.4. Compliance with laws and regulations:

a) Strategic planning and performance management

Effective, efficient and transparent systems of risk management and internal controls with respect to performance information and management were not in place, as required by Section 38(1)(a) (i) of the PFMA. The Department did not have appropriate systems to collect, collate, verify and store performance information to ensure valid, accurate and complete reporting of actual achievements against planned objectives, indicators and targets, as required by the FMPPI.

b) Annual financial statements, performance report and annual report

The financial statements submitted for auditing were not prepared in accordance with the prescribed financial reporting framework, as required by Section 40(1) (a) of the PFMA. Material misstatements of the impairment of receivables and commitments identified by the auditors in the submitted financial statements were subsequently corrected, resulting in the financial statements receiving an unqualified audit opinion.

c) Human resource management and compensation

Employees were appointed without following a proper process to verify the claims made in their applications, in contravention of public service regulation 1/VII/D.8. Funded vacant posts were not filled within 12 months, as required by public service regulation 1/VII/ C.1A.2.

d) Procurement and contract management

Employees performed remunerative work outside their employment in the Department without written permission from the relevant authority, as required by Section 30 of the Public Service Act of South Africa, 1994 (Act No. 103 of 1994).

4.2.5. Internal control deficiencies:

a) Leadership

Management developed action plans to address previously reported root causes and recurring findings. However, some of these action plans had not been effectively implemented by year-end. There was inadequate consequence management for action plans not implemented to address internal control deficiencies previously reported by the external and internal auditors. Programme-level policies and procedures for collating, recording and verifying reporting on the achievement of planned objectives, indicators and targets were only developed at year-end and were therefore not implemented during the year. There was a lack of integration between various branches within the Department to ensure the review and verification of reported performance information. Information submitted by reporting branches was not adequately verified by the consolidation branch. The Department was unable to perform all the required verification and monitoring functions over its entities due to funding and human resource capacity constraints. As a result, the reliability of reported achievements by its entities and institutions consolidated into the achievements reported by the Department was not always verified.

b) Financial and performance management

Management did not ensure that the annual performance report was adequately supported and evidenced by reliable information. The branches did not perform the required checks to ensure the validity, accuracy and completeness of the reported achievements in the quarterly and annual performance reports for most of the reported information. Furthermore, no checks were performed on the consolidated quarterly and annual performance reports to ensure the integrity of the information reported to the accounting officer. The Department did not adequately monitor compliance with relevant laws and regulations, as evidenced by the recurring findings, especially in the areas of human resource management and supply chain management.

4.2.6. Other risks / concerns identified

A performance audit of the adult basic education and training (ABET) programme was conducted. The audit focused on the economic, efficient and effective use of resources in the ABET programme. The audit is currently in the reporting phase and the findings will be reported in a separate report. An investigation was undertaken by an independent consulting firm regarding the supply chain management process followed for the procurement of a security system during March 2012 to May 2013. Non-compliance with departmental policies and procedures was confirmed. The employees involved were subject to disciplinary processes. One employee was subsequently suspended without pay for three months. An investigation was undertaken by an independent consultant regarding the bidding process followed for a technical and vocational education and training infrastructure project during December 2013 to April 2014. A second phase of the investigation was instituted based on the results of the first phase. The expected date of the outcome of the second phase is unknown.

4.2.7. SETAs audit outcomes 2013/14

a) Financial audit:

The audit outcomes of SETAs for 2013/14 were as follows; Unqualified with no findings 17, Unqualified with findings 1, Qualified 3, Disclaimer none and outstanding audit none. The Culture Arts Tourism Hospitality & Sport SETA, Local Government SETA and Public Service SETA received qualified audit opinions with the following matters of emphasis:

CATHSSETA:

· Irregular expenditure incurred was not identified and disclosed by the entity. This was as a result of inadequate systems to identify non-compliance with relevant legislation;

· The SETA recorded project administration expenses in discretionary project expenditure as disclosed. The AG could not obtain sufficient evidence regarding the project administration expenses. This was as a result of inadequate supporting documents to year-end journals; and

· The AG could not obtain sufficient evidence that property, plant and equipment disclosed existed and was complete. This was as a result of the entity not maintaining a proper system of internal controls over property, plant and equipment.

LGSETA:

• The AG could not obtain sufficient evidence to confirm if the discretionary grant commitments disclosed was complete and accurate for the current and prior years. This was as a result of the entity not maintaining complete and accurate records for the discretionary grant commitments.

PSETA:

• The AG could not obtain sufficient evidence regarding conditional grant expenses and the related conditional grant liability disclosed. This was a result of the entity not maintaining proper accounting and related documents. This is a recurring finding.

The following SETAs namely; Agriculture SETA, Construction SETA, Chemical Industries SETA, Energy & Water SETA, Education and Training Development Practices SETA, Fibre Processing & Manufacturing SETA, Food & Beverages SETA, Mining Qualifications Authority, Safety and Security SETA, Service SETA, Transport Education and Training Authority and Wholesale & Retail SETA received an unqualified audit opinion only because they corrected all the misstatements identified by the AG during the auditing process.

b) Audit on pre-determined objectives

The following SETAs namely; AGRISETA, CETA, CATHSSETA, LGSETA, PSETA, Services SETA and TETA included information on their performance against predetermined objectives that was not useful and/or reliable.

c) Compliance with laws and regulations:

The AG identified material non-compliance with legislation in the following SETAs namely; AGRISETA, CETA, CATHSSETA, EWSETA, INSETA, LGSETA, MERSETA, PSETA, SASSETA and Service SETA in one or more of the following areas:

• AGRISETA, EWSETA, MERSETA and PSETA did not always request 3 quotations for procurement below R500 000;
• CATHSSETA, INSETA and PSETA did not always follow competitive bidding processes;
• AGRISETA and PSETA did not always request tax clearance certificates before making awards to suppliers;
• PSETA did not always obtain declarations of whether bidders or anyone related to the bidder is employed by the state;
• SASSETA made a construction award to a bidder that did not comply with a requirement of the Construction Industry Development Board;
• CETA did not always advertise bids in at least the government tender bulletin;
• AGRISETA, CETA, CATHSSETA, EWSETA, LGSETA, MERSETA, PSETA, QCTO and Services SETA did not take reasonable steps to prevent irregular expenditure;
• CETA and CATHSSETA did not maintain an effective system of internal controls over performance management;
• CATHSSETA did not report on all strategic objectives in the annual performance report as included in the strategic and annual performance plans;
• The internal audit at SASSETA did not review the effectiveness of internal controls; and
• CATHSSETA did not maintain adequate controls over asset management.

Services SETA incurred R63.9 million in irregular expenditure, which was 43,8 percent of the total amount of R146 million irregular expenditure incurred by the national portfolio. The amount of irregular expenditure incurred by Services SETA has decreased compared to R141.4 million incurred in the prior year. The nature of the irregular expenditure is as a result of non-compliance with supply chain management legislation and the skills development act SETA grant regulations. 97 percent of the irregular expenditure incurred was identified by the auditee’s own processes of internal controls.

d) Internal control deficiencies:

The following internal control deficiencies were identified that gave rise to the findings on compliance with legislation:

• Inadequate processes in place to monitor compliance with laws and regulations to prevent irregular expenditure;
• Audit recommendations from the previous year were not implemented which gave rise to repeat findings; and
• Lack of consequence management for non-performance.

4.2.8. Universities audit outcomes 2013

AGSA involvement with universities started in 2011 and is currently limited to; providing guidance to auditors on the audit of compliance with legislation and predetermined objective and attendance of audit committees more on an observer role than an active participatory role. The new regulations for reporting issued in June 2014 have more stringent requirements for planning and reporting on performance.

Financial audit

The audit outcomes of universities were as follows: f inancially unqualified with no findings 17, financially unqualified with compliance findings 6, qualified audit none and reports not yet submitted due to extension for submission of financial statements none.

4.2.9. TVET colleges audit outcomes 2013:

a) Financial Audit:

The AGSA audited 15 TVET colleges for the period under review. The audit outcomes of TVET colleges were as follows; financially unqualified with no findings none, financially unqualified with findings 1, qualified audit 6, adverse / disclaimer 7 and reports not yet submitted was 1.

b) Compliance with legislation

The AG identified non-compliance with legislation in the following areas:

• Ten (10) of the colleges did not keep complete accounting records of all assets, liabilities, income and expenses and disclosures of the college;
• Eleven (11) TVET colleges did not have internal audit functions and risk management systems;
• The internal audit function of Orbit TVET college was not independent as they also performed some management functions;
• Central JHB and Orbit TVET colleges did not have an audit committee;
• Northern Cape Urban, Central JHB and Orbit TVET colleges did not submit the strategic plan to the Minister at least 30 days before the start of the financial year;
• Lovedale TVET college did not prepare the strategic plan;
• Lovedale and Orbit TVET colleges did not establish an interim council to perform the functions relating to the governance of the college until a permanent council is established;
• The appointment of the lecturers and support staff at Lovedale and Northern Cape Urban TVET colleges were not approved by the council; and
• Esayidi TVET college entered into loan or overdraft agreement without the approval of the Minister.

c) Audit on pre-determined objectives

The AGSA does not audit TVET colleges on pre-determined objectives since these institutions are not compelled to report on them.

d) Internal control deficiencies

The following transversal internal control deficiencies were identified at TVET colleges that resulted in a regression of audit outcomes:

· Inadequate finance skills: Sustainability of South African Institute of Chatered Accountants (SAICA) Support Chief Financial Officer (CFO) Project - with the high level of vacancies at CFO level, limited skills transfer has taken place;

· Inadequate risk management and governance structures: various FETs have no risk management, internal audit functions and no audit committees in place;

· Weaknesses in IT systems and controls;

o Some TVET colleges do not have proper IT systems in place to collate financial information. This threatens the reliability of data produced.

o Decentralised systems – across campuses. No integration – finance, payroll and student data resulting in complex consolidation processes.

o No formally documented and approved business continuity plan (BCP) and a disaster recovery plan (DRP). College might not be able to continue critical business processes reliant on IT systems

o Backups not stored at a secure offsite storage facilities

· Weak procurement policies and non adherence to procurement policy recommended by DHET during the financial year;

· Lack of policies and procedures to enable and support understanding and execution of internal control objectives, processes, and responsibilities by all staff;

· Lack of policies and procedures to detect conflict of interest of council members and/or employees;

· Poor records management resulting in loss of audit trail;

· Inadequate/no monthly processing and reconciliation controls for student debtors, fixed assets registers, bank and cash and trade payables;

· Non-compliance with the guidelines for the administration and management of the DHET FET college bursary scheme;

· Material impairement or write off’s of students debtors without following due processes to recover the money; and

Land not registered in the names of the TVET colleges and some are registered in name of private owners.

4.3. 2015/16 MTEF financial allocations

Summary of the funding requirements for the 2015/16 MTEF

The Portfolio Committee is seriously concerned about the inadequate funding of the department. Since its inception, the department has not been adequately funded and the mandate of producing “ a skilled and capable workforce ” is not commensurate with the current MTEF budget allocations. Of significance to note is that the Auditor-General of South Africa (AGSA) and the Financial and Fiscal Commission (FFC) pointed to the fact the current financial position of the Department needs an urgent intervention. The challenges identified by the AG include; non-achievement of 2013/14 predetermined objectives as a result of inadequate human capacity and budgetary constraints to execute the mandate of the Department effectively.

The department currently oversees 26 universities with 256 learning sites, two National Institutes for Higher Education (NIHEs) which provide higher education programmes in the Northern Cape and Mpumalanga (the Department intends to close them by 2016 to allow students to complete their programmes), 50 public TVET colleges with 264 campuses, 3 150 public Adult Education Training (AET) centres, 150 registered private AET centres, 119 private registered higher education institutions, 21 Sector Education and Training Authorities (SETAs), four Quality Councils (QCs) and National Student Financial Aid Scheme. In addition, the Department needs additional staff, expanded infrastructure and increased budget allocation to effectively and efficiently support and monitor this broad sector. The Department is now required to implement the objectives of the White Paper on Post-School Education and Training which will require additional funding going forward.

For the 2015/16 METF the total budget input requirements for the Department amounts to R54, 3 billion. This is to cover the department’s operations, funding requirements for NSFAS, shortfall in examinations, implementation of the NASCA, TVET college infrastructure, National Artisan Moderating Body, organogram of the department, SAQA digitisation and quality assurance of records, expansion of the post-school sector.

4.4. Concluding comments on financial performance

The department was able to spend 99 percent of the allocated budget for the 2013/14 financial year. It experienced financial constraints in all the programmes as evidenced in virements to offset the funding shortfalls in Programme 1. The department managed to reduce spending on some goods and services. The current budget baseline does not allow for reprioritisation within the department. Additional funding is required to assist the department in delivering its mandate effectively.

5. OVERVIEW AND ASSESSMENT OF SERVICE DELIVERY PERFORMANCE

5.1. Service delivery performance for 2013/14

5.1.1. Annual Performance Plan

During the year under review, the Department’s strategic goals included, among others, to increase the number of skilled youth by expanding access to education and training; to adequately capacitate individual institutions to effectively provide or facilitate all learning; to increase the number of students successfully entering the labour market upon completion of training; and to expand research, development and innovation capacity for economic growth and social development.

There were five budget programmes during the year under review with a combined total of 127 planned targets. Of the total of the planned targets for the year, 82 (65%) were achieved and 45 (35%) were not achieved. Some of the targets not achieved during the year under review were reported to have been achieved during the first quarter of the 2014/15 financial year.

5.1.2. Programme Performance

a) Programme 1: Administration

The purpose of this programme is to conduct the overall management of the department and provide centralised support services. There were four sub-programmes under this programme, namely Ministry, Department Management, Corporate Services and Office Accommodation. The programme had 22 targets planned during the year under review out of which 17 were achieved and five not achieved. Key achievements included, improved ICT governance maturity level which moved from level 1 in 2012/13 to level 3 in 2013/14, reduced vacancy rate from 11 percent in 2012 to 7.11 percent in 2013/14 and adherence to filling of posts within four months as required.

The significant failures in this programme which have been audit findings from previous financial years were; non-verification of qualifications of new employees, non-adherence to the Public Service Regulation 1/V11/C.1A.2 of filling the vacant posts within 12 months, late payments of invoices to service providers, non-adherence to performance management development system policy and early warning system of identifying fraud cases. This is an indication that an action plan developed to address the 2012/13 AG’s findings was not adequately implemented.

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

The purpose of this programme is to provide strategic direction in the development, implementation and monitoring of the department’s policies. Key deliverables of the programme during the year under review included, among others, 100 percent of public institutional data integrated into a single management information system, development of a National Career Advice Portal as an integrated education and training career development information system, research bulletin approved and published. The programme had 19 targets spread across the six sub-programmes. In total, there were 19 targets planned of which 13 were achieved and 6 were not achieved. The recurrence of non-achievement was recorded on the target of research bulletin approved and published and an investment report on education and training. These two targets in particular were also not achieved within the set timelines during 2012/13 financial year.

c) Programme 3: University Education

The purpose of this programme is to develop and coordinate policy and regulatory framework for an effective and efficient university education system. Furthermore, it provides financial support to universities, the National Student Financial Aid Scheme (NSFAS) and the National Institute for Higher Education (NIHE). The programme had 34 targets of which 23 were achieved and 11 were not achieved. The AG did not raise any material findings on the usefulness and reliability of the performance in this programme.

The Department planned to achieve 179 105 number of first time enrolments (FTEN) at universities, the actual achievement was 169 767, 10 026 fewer first time enrolments in the 2012 academic year than targeted (5.58% below expected target). Unusually, the actual achievement was lower than 2011 academic year FTEN. Of serious concern is the failure to achieve the target on the number of first time entering students at universities owing to inadequate NSFAS funding. This is significant to emphasise given the commitment that government made to expand access to post-school education and training institutions.

In the Delivery Agreement for Outcome 5 signed by the Minister with the President, the Department of Higher Education and Training committed to increase graduate outputs to high level occupationally-directed programmes in needed areas such as engineering, health sciences, natural and physical sciences, as well as increasing graduate output of teachers. The NDP’s vision in terms of graduate outputs for 2030 is to produce 400 000 new university graduates each year and that many of the new graduates between now and 2030 must be in critical and scarce skills categories such as engineering, actuarial science, medicine, financial management, and chartered accountants. Is it significant to note that the Department achieved and exceeded the predetermined graduate outputs targets in Engineering Sciences, Human Health and Animal Health Sciences, Natural and physical Sciences and Initial Teacher Education, except a one percent decrease from 2012/13 to 2013/14 in Human Health and Animal Health Sciences.

d) Programme 4: Vocational and Continuing Education and Training

The purpose of this programme is to plan, develop, evaluate, monitor and maintain national policy, programmes, assessment practices and systems for vocational and continuing education and training, including Technical and Vocational Education and Training (TVET) colleges and post-literacy adult education and training. During the year under review, the programme had 39 planned targets out of which 19 were achieved and 20 not achieved. Of the five programmes of the Department, Programme 4: VCET has underperformed with more 50% of its targets not met. It is noted with serious concern that the programme that is responsible for meeting the Outcome 5 output 2 and 3 of increasing access to programmes leading to intermediate and high level learning, including the raising of skill levels of both youth and adults to access training; and to increase access to occupationally-directed programmes in needed areas thereby expanding the availability of intermediate level skills, with a focus on artisan skills and other mid-level skills has not performed well. The low pass and certification rates in all the GETC, NC(V) and Report 191 (NATED) programmes is a serious concern since it’s not meeting the government goal of increasing the number of students successfully entering the labour market on completion of training owing to low pass and certification rates .

e) Programme 5: Skills Development

The purpose of the programme is to promote and monitor the National Skills Development Strategy (NSDS III) and develop skills development policy and regulatory framework for an efficient skills development system. This programme contributes to the Delivery Agreement Outcome 5 Output 3: to increase access to occupationally-directed programmes in needed areas and thereby expanding the availability of intermediate levels skills, with special focus on artisan and other mid-level skills. The programme had four sub-programmes with 13 targets spread across the sub-programmes during the year under review. Out of the 13 targets set, 10 were achieved while 3 were not achieved. The Department could not develop and pilot a secure trade testing system. The Department also could not compile a draft scarce and critical skills list. The programme has exceeded targets in the key strategic priority areas namely; artisans candidates entering learning nationally, artisan candidates found competent nationally and number of graduates received work integrated learning (WIL).

5.1.3. Key reported achievements

During the financial year under review the department was able to establish and launch two new universities namely; Sol Plaatjie University (SPU) in Kimberley, Northern Cape and the University of Mpumalanga (UMP) in Nelspruit, Mpumalanga. Interim Councils for the two new universities were appointed to govern each university. The universities admitted their first intake of students in February 2014. The Department further established the National Institute for Humanities and Social Sciences (NIHSS) on 5 December 2013 and approval for the Joint Technical Task Team Report on the establishment of a new Health and Allied Sciences University that will incorporate the Medunsa Campus of the University of Limpopo was authorised.

Concerning the ICT maturity level, the department’s ICT maturity level has moved from level 1 in 2012/13 to level 3 in 2013/14. The department was able to reduce the vacancy rate from 11 percent of the funded posts to 7.1 percent in 2013/14 and kept it under 10 percent as required by the Public Service Regulations, 2001.

The Department was able to integrate 100 percent of public institutional data for 2010, 2011 and 2012 into a single management information system (MIS) including 50 TVET colleges, 23 universities and 21 SETAs. The White Paper for Post-School Education and Training was launched in January 2014 and specific direction is given to the development of open learning in the post-school education and training sector. Other areas of significant achievements include; R2 billion in infrastructure efficiency allocation were allocated to institutions and improved monitoring and oversight systems were put in place; the Policy on Professional Qualifications for Lecturers in Technical and Vocational Education and Training was finalised and published in the Government Gazette for implementation, Ministerial Committee Report on the Review of Funding for Universities was approved and published in the Government Gazette, The Draft Policy on Professional Qualifications for Adult Educators and Community Education and Training College Lecturers was widely consulted and finalised after analysis and consideration of public comments and advice from the CHE.

Some significant achievements were recorded in Programme 4 which include; the target of 650 000 headcount enrolment for TVET colleges was exceeded as 670 455 students enrolled in a variety of college programme offerings and 290 106 learners took up various National Qualifications Framework (NQF) Level 1-4 programmes in AET centres. In relation to the Skills Development Branch, the department established a Work Integrated Learning and Partnerships Unit within the Branch which facilitates placements of TVET college graduates in conjunction with SETAs. A total of 27 346 TVET college and Universities of Technology (UoTs) students were placed by SETAs for workplace experience, a total of 27 670 students were registered into artisan training against a target of 26 000 and a total of 18 110 completed and qualified as artisans, against a target of 12 000.

5.1.4. Key reported challenges

Regarding the challenges that might have impacted on achievements of certain predetermined objectives for the 2013/14, the Department highlighted on the following:

In almost all the programmes of the Department, the main challenge that contributed the underperformance in certain predetermined objectives was restricted operational budget available for all sections to carry out their monitoring and evaluation functions. This will be a continuous challenge if there is no urgent intervention. The Department was not able to fill all the funded vacant posts and the retention of staff is a challenge. The National Student Financial Aid Scheme (NSFAS) has also experienced funding challenges as confirmed by the number of student protests at universities and TVET colleges. The system remains under immense pressure owing to the expectations of students that are all academically deserving and financially needy. The new Health and Allied Sciences University that will incorporate the Medunsa Campus of the University of Limpopo, has not been established as a legal entity owing to the need for continued stakeholder engagement. Insufficient human and financial resources within Programme 4 internally affected service delivery. The security upgrades at Indlela could not be attended to owing to unavailability of funds.

5.1.5 Non-financial Audit outcomes and steps taken to address adverse audit findings

· During the year under review, the department fully constituted all TVET colleges that were not under administration with college councils and there is an undertaking to train them in institutional and corporate governance during the 2014/15 financial year.

· In dealing with student’s under-performance and certification rates in VET qualifications, the Department reported that there was a focused intervention in Mathematics which includes lecturer training in the use of learning tools to develop the cognitive skills of learners in mathematical operations. Furthermore, plans are already in place to establish mathematics and science hubs at TVET colleges in order to build expertise required for these critical learning areas.

· Indlela is in the process of developing a national recognition of prior learning (RPL) model that will ensure people who are RPL candidates first complete a portfolio of evidence as required by the full scope of the trade and based on the evaluation of that evidence be given access to a trade test. A total of 265 candidates are involved in the pilot project and the model will be completed by 31 March 2015 for national roll-out within the TVET college system.

5.2. Service delivery performance for 2014/15

In line with in-year monitoring of ensuring that policies announced by government and authorised by Parliament are actually delivered, the Portfolio Committee considered the Department’s first quarter (April-June) report of the 2014/15 financial year. During this quarter, the Department had five targets planned, two in Programme 3: University Education and three in Programme 5: Skills Development.

a) Programme 1: Administration

There were no specific targets planned for this quarter. However, the status regarding targets that will be reported at the end of the financial year was reported. For this programme, the Department developed a Departmental IT Governance Framework aligned with Corporate Governance of ICT Policy developed by the Department of Public Service Administration (DPSA), vacancy rate was kept below 10 percent and the average period of four months to fill funded posts was achieved. The challenge experienced was related to the period it takes to award a bid from the date of receiving the draft bid specifications from programme managers. The department seems to have a challenge to reach the 90 days set target.

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

The Department reported a notable progress towards achieving end year planned targets made in this programme. During the quarter, 50% data integrations have been initiated for Adult Education and Training (AET) and Technical and Vocational Education and Training (TVET) 2013 Annual Surveys. Furthermore, the Minister has approved and signed the Standard for the Publication of Post-School Education and Training Statistics Report in South Africa as well as Data Dissemination Standards which was published in the Government Gazette on 12 June 2014 as Gazette No. 37733 of June 2014. A draft Career Development Policy has been developed and will be presented to the National Career Development Government Forum for consultation.

c) Programme 3: University Education

There were two targets planned for this programme during this quarter. The deliverables for this programme during this quarter were 24 university teaching development plans (3 years) for each university produced and approved by the Director-General and university development plans (23) compiled in line with Research Development Grants criteria approved by the Director-General by 30 June 2014. These two targets were not fully achieved at the end of the quarter. In addition to the targets planned, the Department reported progress on other deliverables. The Department successfully established a third new university in South Africa since 1994, the Sefako Makgatho Health Sciences University which will open its doors in January 2015, 23 university teaching development plans (3 years) were submitted and approved (target was 24 universities), 24 Research Development Plans were submitted and evaluated by a review panel in terms of criteria and all the plans have been recommended for approval.

d) Programme 4: Vocational and Continuing Education and Training

There were no specific predetermined targets planned for this quarter. The Department reported that there were 359 119 unaudited headcount student enrolment in Report 191 trimester and semester based programmes and year-long NC(V) programmes. A draft National Policy on Community Colleges to facilitate the community college establishment process has been developed for gazetting, and n ine potential sites have been identified for the establishment of these colleges and, operational cost projections for the establishment after declaration and piloting of community colleges have been developed with a view to submitting it to the National Treasury through a bidding process.

e) Programme 5: Skills Development

This programme had three predetermined targets planned for this quarter and deliverables included 3 000 artisan learners registered nationally, 2 000 artisan candidates found competent nationally and five audits conducted at SETAs or QCTO accredited trade test centres. The Department achieved all the targets planned and exceeded the targets on; artisan learners registered nationally and artisan candidates found competent.

5.3. Other service delivery performance findings

5.3.1. Oversight visits

This section of the report provides a brief summary of key service delivery issues from the two oversight visits conducted by the Portfolio Committee in September 2014.

The Portfolio Committee conducted an oversight visit to the NSFAS head office on the 17 September 2014 and another visit to institutions of higher learning and TVET colleges in North West Province, specifically visiting the North-West University and Vuselela TVET college on 23 September 2014. At an empirical level, the objectives of oversight visits in particular were; to assess these higher education and training institutions in terms of government goals on increasing access to and success to post- school education and training and to assess accountability to good governance principles as well as transformation. The Portfolio Committee specifically held strategic sessions with stakeholders of TVET colleges and universities.

The following are service delivery findings from the oversight visits

a) NSFAS

· The Portfolio Committee commended the efforts put by NSFAS in developing the new model aimed at improving the management and distribution of student loans and bursaries to needy students. Nonetheless, Members were concerned that most of the challenges highlighted by NSFAS with the new model were not coming from students. Furthermore, it was noted that students from rural areas particularly those coming from no-fee schools will find it challenging to make use of the new model using sophisticated technology through mobile phones.

· The Portfolio Committee expressed its concern with the late payment of claims submitted by higher education and training institutions to NSFAS as this impact negatively on both students and institutions.

· It emerged that NSFAS is owed more than R2 billion by its eligible debtors and the loan recovery systems implemented by the entity are slow and ineffective. The Portfolio Committee noted that NSFAS has a serious budget shortfall and more emphasis should be placed on recovering debts owed by former student to supplement the budget shortfall.

· Despite the increase in funding from R440 million in 1999 to R9 billion in 2014, the demand for financial aid exceeds the current supply. The Portfolio Committee is concerned that 50% of eligible students were unfunded by NSFAS owing to an inadequate budget. The increase in student protests across higher education institutions even where the new model is piloted was highlighted as a major threat to stability in higher education. Furthermore, the new model does not make provision for top slicing and this infuriated some needy students as they are not funded for the 2014 academic year particularly in institutions where the new model is piloted.

b) North-West University

· The management has been aware of initiation practices at the university’s residences and, there was no plan in place to prevent these practices since they were viewed as “traditional” and started back before the merger of the institution.

· It was noted with concern that though the former Potchefstroom Campus University’s year book of 1947 forbid the initiation practices at student residences, these practices continued to be practised unabated at the Potchefstroom campus.

· The university inherits students who have been initiated into such demeaning practices at school level and often maintain such practices when they get to universities.

· The university has been in existence for 10 years since its merger. The merger has been considered one of the successful mergers in the higher education sector. However, despite this milestone and significant academic achievements, the university has not managed to create a new institutional identity and organisational culture that has eradicated all forms of unfair discrimination and to advance redress for past inequalities.

· The Portfolio Committee emphasised its concern on the utilisation of the federal management system in the university that renders a campus autonomy model. It was noted that this model is not ideal to accelerate transformation in a university that has been battling with incidents of racial discrimination since its merger.

· The Department was commended for providing infrastructure development funding to increase access to and success in scarce skills related programmes like human and animal health, science, engineering and technology and African languages. However such efforts should not lead to the neglect of the humanities related programmes.

c) Vuselela TVET college

· The Portfolio Committee was concerned with the low certification and pass rates in the NC(V) programmes of the college which are below the national average. Furthermore, the Portfolio Committee appealed to the college to put measures in place to improve academic performance of students in all programmes.

· It was noted with concern that the Deputy Principal and Chief Financial Officer posts were not yet filled and, the absence of these key personnel impact negatively on management of the college.

· The Portfolio Committee was seriously concerned that the college did not claim from NSFAS an outstanding amount of R12 million for transport and accommodation allowances for both NC(V) and Report 191 students. Furthermore, the Portfolio Committee noted that the unclaimed funds can only few students for the allowances when applying the new NSFAS Guidelines 40 and 10 kilometres radius of accommodation and transport allowances respectively; while the number of successful applicants is 3 000. The College resolved not to allocate the allowances.

· It was also noted that NSFAS does not adhere to the rule of paying claims from the colleges within 30 days after receiving them.

· Notwithstanding the good intention of the new NSFAS Guidelines of ensuring efficient allocation of funding, the Portfolio Committee was concerned that the guidelines cause serious suffering and hardships to students given that the College could not allocate transport and accommodation allowances to student due to tight progression, accommodation and transport allowance rules.

· The Portfolio Committee was seriously concerned with the high level of theft and break-ins at the Matlosana Centre for Artisans and Learnerships. The lawlessness threatens government development goals of producing artisans to grow the economy. The management of the college was requested to put preventative measures to protect the assets used by learners at Matlosana campus or find alternatives to resolve this challenge. The proposal to relocate the campus is not economical and it will deny the communities around the campus the right to further education and training.

· It emerged that the college has a high wage bill that puts severe financial strain on its budget and, and the managers are in salary level nine (9) while managers at the same positions in other colleges are at level eight (8). The Committee welcomed the undertaking of the Department to conduct a study on the job evaluation to ascertain whether salaries paid to employees in certain positions are commensurate to the outputs.

5.3.2. Relevant external research assessing performance of the department

This section presents a summary of the findings of the Department of Planning, Monitoring and Evaluation (DPME) after having assessed the performance of the Department for 2013/14 financial year.

The Department was assessed on four key performance areas, namely, Strategic Management, Governance and Accountability, Human Resource Management and Financial Management. On key performance area 1 Strategic Management, the department was assessed on three areas, strategic plan, annual performance plan and monitoring and evaluation. The Department has a monitoring and evaluation management information policy but does not have standardised mechanisms and procedures to collect, manage and store data. The Department was found to be partially compliant at score level two on strategic plan and monitoring and evaluation and non-compliant, score level 1 on annual performance plan.

On key performance area 2 Governance and Accountability, the department was assessed on 10 areas and was found to be fully compliant at level 4 and doing things smart in five areas that include; functionality of management structures, assessment of accountability mechanism, assessment of internal audit arrangements, delegations in terms of Public Service and Administration and delegations in terms of the PFMA. It was also found to be fully compliant at level 3 on assessment of policies and systems to ensure professional ethics. However, it was found to be non-compliant in four areas that include; service delivery improvement charter, promotion of access to information, prevention of fraud and corruption and assessment of risk management arrangements.

There were 11 performance areas and standards under key performance area 3 Human Resource Management. The department was partially compliant at level 2 on seven performance areas namely; human resource planning, organisational design, payroll certification, application of recruitment and retention practices, employee wellness, implementation of level 1-12 performance management and development systems (PMDS) and implementation of senior management service PMDS. A full compliance at level 3 was achieved on two performance areas, assessment of human resource development and implementation of senior management service PMDS for Heads of Department (HOD). There was non-compliance score level 1 on two performance areas, management diversity and management of disciplinary cases.

Under key performance area 4 Financial Management, there were seven performance areas and standards, five out of seven were fully compliant at level 3, demand management, acquisition management, logistics management, management of unauthorised, irregular, fruitless and wasteful expenditure. The Department was found to be fully compliant at level 4 and doing things smart on one area of management of cash flow and expenditure versus budget. There was only one area of partial compliance, which is payment of suppliers.

The Department has reported during the annual reporting period that measures were put in place to address the identified grey areas identified by the AG and the DPME and that include; adherence to PMDS policy, payment of invoices within the prescribed timeframes, poor capacity to deal with risk management.

5.4. Concluding remarks on service delivery performance

While the underperformance is noted with great concern, the Department has to be commended for making significance strides in fulfilling its mandate as per the government policy directives with limited resources. From the service delivery analysis, it is clear that the mandate of the Department is huge and the current human resource capacity and financial budget allocation is inadequate to support this mandate. The Department can perform better if it could be well resourced.

6. FINANCE AND SERVICE DELIVERY PERFORMANCE ASSESSMENT

6.1. COMMITTEE OBSERVATIONS AND RESPONSE

6.1.1. Technical issues

Of the four annual reports 2013/14 of the entities that appeared before the Portfolio Committee during this reporting period, the Portfolio Committee noted that all the annual reports were presented in accordance with Treasury regulations and the level of information presented was user friendly and of good quality except for the NSFAS annual report. The Portfolio Committee was concerned that that the predetermined objectives of NSFAS were not developed in accordance with the National Treasury SMART principles, specific, measurable, attainable, relevant and time-bound (SMART) and the quality of reporting was vague.

6.1.2. Service delivery performance

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

a) Department of Higher Education and Training (DHET)

i) Programme 1: Administration

· The Portfolio Committee was concerned that of the total 22 targets set for the period under review, 17 were achieved and 5 targets were not achieved.

· The delays in the filling of the Deputy Director-General (DDG) for University Education and Skills Development were highlighted as a serious concern and a breach of the Public Service Regulations.

· It was raised with concern that the verification process prior the appointment of employees in the Department was not implemented as required by the Public Service Regulation 1/VII/D8. Furthermore, the Portfolio Committee encouraged the Department to use the services of the South African Qualifications Authority (SAQA) for the verification of qualifications of its employees.

· The vacancy rate at the Department for the year under review is 7% of the funded posts. The Portfolio Committee appealed to the Department to fill all outstanding posts to improve the human resource capacity of the Department to monitor and evaluate its entities.

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

· The Portfolio Committee was concerned that of the total 19 targets set for the period under review, 13 were achieved and 6 were not achieved.

· The delays in the publication of a research bulletin and investment report on education and training remains a serious challenge in this programme. The AGSA raised a similar finding in the previous financial and the Department repeated the same deviation in the year under review.

iii) Programme 3: University Education

· The Portfolio Committee was concerned that of the total 34 targets set for the period under review, 23 were achieved and 11 were not achieved.

· In relation to the number of first time enrolments (FTEN) at universities, there were 10026 fewer FTEN in the 2012 academic year than targeted. The Portfolio Committee was seriously concerned with this decline as the demand for higher education particularly for African students remains high. Furthermore, it was noted that additional funding for NSFAS is required to expand access of FTEN in higher education institutions (HEIs).

· The inadequate funding for postgraduate students particularly for B Tech and Honours programmes was highlighted as a serious concern for the development of a new generation of academics. The decline in the honours graduates was also attributed to inadequate funding by NSFAS of this programme. Furthermore, it was noted that poor students particularly at Universities of Technology (UoTs) were forced to abandon their pursuit of postgraduate qualifications owing to inadequate funding of the B Tech programme.

· It was noted with concern that seven universities do not have statutes which specify five Ministerial appointees. The Portfolio Committee was concerned that these universities were not complying with an amendment in the Higher Education Act as amended which makes provision for the five Ministerial appointees to be in councils.

· The increase in the incidents of student protests in HEIs accompanied by violence, intimidation, damage to university property and infrastructure in the 2014 academic year was highlighted as threat to stability of the higher education sector. These protests disrupted teaching and learning and universities are still facing a challenge of infrastructure repairs which is very expensive.

· The deficiencies in the management and administration of NSFAS bursaries and loans by HEIs was highlighted a major concern which also contributed to widespread of student protests for the 2014 academic year.

· The Portfolio Committee welcomed the forensic audit that will be conducted by the Department on management and administration of NSFAS bursaries and loans.

· The envisaged appointment of a Ministerial Task Team on implementation plan of the objectives of the White Paper on Post School Education and Training was commended by the Portfolio Committee.

· The Portfolio Committee was concerned with the alleged exclusion of students in the Funza Lushaka Bursary on basis that they did not study African languages at school level.

· It was noted with concern that as much as the higher education sector is expanding, the throughput and graduation rates remain low.

iv) Vocational and Continuing Education and Training

· The Portfolio Committee noted with concern the poor performance of this programme which is tasked particularly at increasing access to programmes leading to intermediate skills for young people with no post school qualifications. During the year under review, the programme had a total of 39 planned targets and achieved only 19.

· The articulation of students particularly from TVET colleges to HEIs was highlighted as a serious challenge. The absence of an approved policy to regulate implementation of articulation affects the movement of TVET college graduates with N6 qualification to access Diploma programmes in Universities of Technology (UoTs).

· The Portfolio Committee noted with concern the delays in the appointment of college councils during the year under review. The Department reported that only 27 of the 50 TVET college councils had been fully constituted. It was emphasised that the role of the Accounting Authority in these institutions is of high importance given their poor management and administration of funds as reported by the AGSA in its 2013/14 audit outcomes of colleges.

· The failure by the Department to build the six new TVET college campuses as declared by the President in the State of the Nation Address (SONA) 2013 was highlighted as a serious concern. Although the Department deviated on achieving this target owing to delays in procurement processes, the Portfolio Committee did not welcome that justification.

· The Portfolio Committee was concerned with new rules and guidelines for the administration, management and awarding of bursaries to TVET college students. According to the guidelines, students who reside within a radius of 10km from the college should not be considered for an award for a travel and accommodation allowances. Furthermore, students whose home address is within a radius of 40km within the college are not considered for accommodation. The concern of the Portfolio Committee with these guidelines is that students who live in areas with high crime rates cannot be expected to travel a distance of 9km to the college. This affects student attendance and the processing of claims of these allowances.

· The backlog of 13 218 outstanding NC(V) certificates because of data errors for eligible students in TVET colleges was highlighted as a serious concern. Although the Department reported that it is in a process of addressing this backlog through effective management of the certification process, the justification for these delays was highlighted as a major concern since this backlog dates back to 2007. The Department promised to resolve this backlog by end of November 2014.

· Student under-performance and certification rates in NC(V) and Report 191 was highlighted as a serious concern of the Portfolio Committee. The Portfolio Committee appealed to the department to implement focused interventions to deal with poor performance of students in the college sector as government is investing huge resources for expansion of this sector.

· The under-spending on conditional grants for TVET colleges by provinces was highlighted as serious concern that requires urgent intervention by the Department going forward.

· The Portfolio Committee welcomed the distribution of a circular for improvement of financial management and performance in TVET colleges. Furthermore, it also welcomed the distribution of the training manual for council members to all colleges.

v) Skills Development

· The Portfolio Committee noted with concern the poor performance of this programme that is tasked with promoting the alignment of skills development outputs to the needs of the workplace and to the broader growth needs of the country’s economy. For the period under review, the department achieved 10 out of the 13 targets.

· It was noted with concern that the targets set for the training and development of artisans is not commensurate with required growth for the economy.

· The AGSA raised an audit query in relation to the management of security at Indlela by the department. The Portfolio Committee was seriously concerned that the same finding was raised in the previous financial year and the department was tasked at making sure this finding does not recur. The department reported that R28 million is required to improve security measures at Indlela and the building is currently managed by the Department of Public Works. The Portfolio Committee appealed to the department to prioritise the appointment of a security service provider to increase security at these premises.

· The Portfolio Committee was concerned with inadequate targets for learnerships and skills development programmes by SETAs as compared to the financial reserves of R12 billion in their accounts.

b) National Student Financial Aid Scheme (NSFAS)

· The Portfolio Committee was concerned that the widespread of student protests accompanied with destruction to university infrastructure and property were largely related to NSFAS queries. It was noted that although NSFAS is responsible for disbursement of funds to these institutions, the entity should ensure that institutions submit claims on time and processing of these claims is speedily implemented.

· The irregular expenditure incurred by the entity for the year under review was highlighted as a serious concern that requires urgent intervention by the Accounting Authority.

· The Portfolio Committee was concerned that the leadership of the entity did not exercise its mandate effectively to prevent non-compliance to supply chain management (SCM) polices which resulted in the AGSA raising serious matters of emphasis.

· The poor achievement of targets set by the entity in the year under review was highlighted as a serious concern given the important role of NSFAS in expanding access of poor students to PSET institutions.

· The exponential increase in human resource capacity (162 to 299 employees) of the entity owing to the implementation of the new student centred model was a concern for the Portfolio Committee. The Portfolio Committee appealed to the entity to reduce its costs on compensation of employees.

· The student loan value of the entity for the year under review is R7.4 billion. The Portfolio Committee was seriously concerned with the loan recovery strategy of the entity to improve monthly repayments of loans.

· The Portfolio Committee was seriously with the poor management and administration of NSFAS bursaries and loans particularly at TVET colleges. It was noted that there are students whose claims have not yet been processed and they do not have books at this period of the academic year. The Portfolio Committee appealed to the entity to be pro-active and be more involved in student affairs.

· In relation to the unqualified audit opinion received by the entity, the Portfolio Committee appealed to the entity to improve its financial performance to obtain a clean audit in the current financial year.

c) Council on Higher Education (CHE)

· The Portfolio Committee was concerned with the delays in the filling of outstanding vacancies in the entity. The staff turn-over in the period under review was also noted with concern.

· The entity conducted eight workshops as compared to its target of 1 for the period under review. The Portfolio Committee was concerned that this might impact negatively on the stringent budget of the entity.

· The Portfolio Committee was concerned with certain private higher education institutions that offer unaccredited qualifications to students.

· The Portfolio Committee welcomed the replacement of the B Tech programme with the advanced diploma that will make it easy for students in (UoTs) to articulate to postgraduate programmes.

· In relation to its finances, the entity was requested to collaborate with the AGSA particularly on interpretation of financial reporting so that it may not have the similar finding in the current financial year.

d) Quality Council for Trades and Occupations (QCTO)

· The poor achievement and underperformance of targets by the entity in the period under review was highlighted as a serious concern that requires urgent intervention.

· It was noted with concern that majority of the stakeholders in the trades and occupations sector are not aware of the mandate and operations of the entity.

· The Portfolio Committee acknowledged that the entity is still new and it will take time to build sufficient capacity and systems in place to execute its mandate effectively. Nevertheless, the Portfolio Committee appealed to the entity to ensure its quality assurance is impeccable so that it can be able to manage quality assurance of occupational qualifications.

· The Information Technology (IT) systems of the entity were not yet fully function in the period under review. The Portfolio Committee appealed to the entity to improve its IT maturity level given the backlog of qualifications it has to quality assure.

· The Portfolio Committee was concerned that the strategic plan of the entity was developed before it was established and the targets set were unrealistic. The Minister did not approve the Annual Performance Plans (APP) 2014/15 of the entity and the Portfolio Committee was concerned with this challenge.

· It was noted that SETAs have a backlog of 15 000 unaccredited qualifications that will have to be evaluated and quality assured by the QCTO. Given the existing human resource capacity of the entity, the Portfolio Committee was concerned that these qualifications may not be appropriately managed by the entity.

e) South African Qualifications Authority (SAQA)

· The entity was commended for receiving a clean audit opinion for the period under review.

· The Portfolio Committee was concerned with the number of pre-1992 post school qualifications that have not yet been digitised.

· The delays in the filling of outstanding fully funded vacancies in the entity was highlighted as a serious concern.

· The Accounting Authority was requested to develop a strategy to address poor attendance of board committee meetings.

· The Portfolio Committee was concerned with R6.2 million under collection reported by the entity in the year under review.

· The Portfolio Committee appealed to the entity to ensure that articulation is realistic at systematic level.

· The reported incidents of fake qualifications produced by employees in the public sector was highlighted as a serious concern for the Portfolio Committee. SAQA was requested to improve verification of qualifications in the public sector.

· It was noted that though the quality assurance role is assigned to the three Quality Councils (QCs), SAQA should improve its relationship with these QCs.

f) General finding

The Portfolio Committee noted with concern the under achievement and poor performance in certain targets set by the Department and some of entities for the year under review. The recurring findings reported by the AGSA in the 2013/14 audit outcomes of the department and some of its entities was noted with concern. It should also be noted that this under achievement in some targets was as a result of capacity and budget constraints. Of significance to note is that the Department is allocated only 1 percent of the total higher education and training budget to run programmes, operate and manage the remainder of the 99% that is not under the control of the Department because they are transfer payments.

6.1.3. Financial performance including funding proposals

The Portfolio Committee noted that the Department and the entities have improved on their financial management especially in addressing irregular, fruitless and wasteful expenditures. It was also pleased that though the QCTO and NSFAS had irregular expenditures during the year under review, the amounts were significantly reduced. The Portfolio Committee appealed to the Department to develop an action plan to rectify the findings raised by the AGSA in particular on financial misstatements and underspending on different programmes. The Department was requested to improve to a clean audit in the forth-coming financial year.

7. SUMMARY OF REPORTING REQUESTS

Entity	Reporting Matter	Action required	Time-Frame
DHET	All AG’s audit findings on TVET colleges.	DHET should monitor implementation of action plan developed.	DHET to report progress to the Portfolio Committee on quarterly basis.
NSFAS	Lack of documented and approved internal policies and procedures to address reporting requirements and review of the presentation of the annual performance report by management.	Policies and procedures to address reporting requirements should be developed, implemented and monitored.	NSFAS to report progress to the Portfolio Committee, see Portfolio Committee programme.
	Reliability of information presented.	NSFAS should develop and independent verification system to collect, collate and verify and store performance of data.	NSFAS to report progress to the Committee, see Committee programme.
		NSFAS should submit a report with action plan to correct the findings raised by the AGSA in the entity’s Annual Report 2013/14.	Within 30 days after adoption of the report by the House.
	The predetermined objectives of NSFAS were not developed in accordance with the National Treasury SMART principle; specific, measurable, attainable, relevant and time-bound (SMART) and the poor quality of reporting.	NSFAS should review its strategic plan and annual plan to develop SMART strategic goals and targets especially for the current financial year and going forward.	NSFAS to report progress to the Committee, see Committee programme.
QCTO	Institution’s record not permitting the application of alternate audit procedures to satisfy the AG as to the reliability of the targets.	QCTO should develop a documents and records management system.	QCTO to report progress to the Committee, see Committee programme.
		To submit a service delivery improvement plan.	Within 30 days after adoption of the report by the House.

8. CONCLUSION

The Department reported on its fourth Annual Report since its inception and received a fourth consecutive unqualified audit opinion from the AGSA. It is important to note that the primary objective of the Department is to expand access to and improve success within the post school education and training system. The Department is also responsible for Outcome 5 of the Government’s Performance Monitoring and Evaluation system “ A skilled and capable workforce”. During the financial year ending 31 March 2014, the department made significant progress towards the achievement of its strategic goals as set out in the 2010/11 - 2014/15 Strategic Plan.

In order to confront the developmental challenges faced by the country, the Minister published the White Paper on Post School Education and Training during the year under review with the aim of creating a framework that defines the Department’s focus and priorities that enables it to shape its strategies and plans for the future. The White Paper will drive and deepen transformation of the entire post school education and training sector to improve the lives of the 35 million people that the sector has to cater for. The plans to deal with the challenge of 3.3 million young people who are not in education, employment and training (NEET) have been incorporated in the White Paper.

The Portfolio Committee was concerned with deviations in meeting the targets set in all the five programmes of the department. The Portfolio Committee noted that in other instances the deviations were influenced by circumstances beyond the Department’s control. It was the proposal of the Portfolio Committee that the department should revise its targets so that those that are dependent on external circumstances could be clearly identified.

The report that was presented by the AGSA on 2013/14 audit outcomes of the department and its public entities highlighted significant improvements in the financial management of public entities particularly universities. Nevertheless, the audit outcomes of TVET colleges highlighted serious challenges of governance and management in the entire sector. The TVET colleges require additional support and capacity to improve their governance and administration and, the department will have to closely monitor and evaluate the performance of these institutions.

In relation to the public entities that presented their Annual Report 2013/14 namely; NSFAS, CHE, QCTO and SAQA, the Portfolio Committee was seriously concerned with recurring findings of the AGSA that have not been addressed. Although some of these entities received an unqualified audit opinion for the year under review, the Portfolio Committee appealed to these entities to improve their financial performance so that they improve to a clean audit. The Portfolio Committee commended SAQA as one of the entities that received a clean audit for the period under review.

9. RECOMMENDATIONS

The Committee having assessed the performance of the Department of Higher Education and Training and its entities on their 2013/14 financial year recommends the following to the Minister of Higher Education and Training and the Minister of Finance for their consideration; and to provide progress reports to the Committee within three months of the adoption of this report by the House:

Minister of Finance:

· Notwithstanding the ring-fenced funding for TVET function shift, the Minister should realistically increase the budget of the Department over the medium term to accommodate the expanded operations of the department especially human resource needs and infrastructure that will come with the TVET function shift;

· The Minister should ensure that the unspent conditional grants by provinces are transferred to TVET colleges in terms of the FET Act and the National Norms and Standards for funding TVET colleges;

· Owing to the lack of cooperation and disclosure by Provincial Education Departments (PEDs) in regards to the funds to be shifted for the TVET and AET function shift from Provinces, the Minister should consider additional funding to the determination made by the Minister of Finance as it will not be enough for the DHET to manage a personnel increase from 1000 to 39 000;

· The Minister should make additional funding available for Sub-programme 3: Programmes and Qualifications of Programme 4: for Report 191 and NC(V) review to ensure production of skills that the South African economy needs;

· The Minister should increase funding to meet the 2030 NDP targets for expansion of TVET and Community College system especially in regard to NSFAS, subsidies, college infrastructure and equipment;

· The Minister should reasonably increase the budget over the medium for Sub-programme 4: National Examination and Assessment in Programme 4 to accommodate the increased operational and remuneration costs of expanded administration and delivery of TVET and AET national examination services as a result of growth in student enrolments;

· The Minister should significantly increase allocation for university infrastructure especially for student residences;

· The Minister should realistically increase the budget of the National Student Financial Aid Scheme over the medium term to enable all academically capable but financially needy students to access higher education and technical vocational education and training and to cover full cost of study through loans bursaries as proposed in the NDP; and to accommodate incremental growth in student enrolment through the new universities and the envisaged 12 new TVET college campuses; and

· The Minister should consider making available bridging funds to NSFAS for allocations for tuition fees and other living expenses for students at the beginning of the academic year owing to the misalignment of academic year and financial year.

The Minister of Higher Education and Training

a) Programme 1: Administration

· The department should prioritise the filling of outstanding vacant funded posts particularly the DDG for University Education and Skills Development branches;

· Assessment of performance agreements for employees should be implemented within the stipulated period in compliance with the performance management framework. The managers and supervisors responsible for this function should be held accountable for deviating on this target;

· The verification of qualifications and security clearance process for all new employees of the department should be implemented before their appointment. Furthermore, the Department should utilise the expertise of SAQA in the verification of qualifications of all its employees;

· An action plan should be developed to address the targets that were not achieved in the period under review in this branch.

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

· The oversight function over public entities particularly TVET colleges should be improved as these institutions required additional support on governance and administration. Furthermore, this function should be realistically resourced wherever it is performed in the Department.

· The publication of policies, reports and bulletins should be implemented within the stipulated timeframes to prevent delays; and

· An action plan should be developed to address the targets that were not achieved in the period under review in this branch.

c) Programme 3: University Education

· This branch has a vital role and responsibility to manage oversight over the entire higher education sector and in this regard, the vacant post of DDG should be filled as a matter of urgency;

· The department should explore the possibility of providing additional funding to NSFAS to improve to meet the target of first time enrolments (FTEN) in universities. Adequate resource at NSFAS will assist poor students with historic debts and improve the honours graduation rates. Furthermore, the future generation of black academics project can be successful if poor students are funded for their B Tech and honours programmes;

· The policy on adult educator qualifications should be published as a matter of urgency as this sector is in dire need for improved condition of services of these educators;

· The department should ensure that all universities adhere to the amendment in the Higher Education Act which gives power to the Minister to appoint five Ministerial appointees to their councils;

· The formula or criteria used to allocate research development grants to HEIs should not disadvantage previously disadvantaged institutions with improving research publications such University of Fort Hare; and

· The target for the number of students accessing higher education should be revised so that it can be realistic to societal challenges.

d) Programme 4: Vocational and Continuing Education and Training

· The Minister should ensure that the senior management of this branch is held accountable for poor performance in meeting targets set for a stipulated period since this branch recorded the worst performance in all the five branches of the department;

· Capacity building and training programmes for TVET lecturers should be expanded to improve teaching and learning;

· Additional student support services should be implemented to address student under-performance in NC(V) and Report 191 programmes;

· Additional support is required to improve governance and administration of TVET colleges as reported by the AGSA in the 2013/14 audit outcomes report for TVET colleges;

· The procurement of service providers responsible for construction of the new 12 TVET college campuses should be prioritised to prevent further delays;

· The appointment of new council members in all TVET colleges should be prioritised since it was not achieved in the year under review;

· A review of conditions of service for AET educators should be undertaken to prevent further disengagements in this sector;

· The Department should prioritise the release of outstanding NC(V) certificates as a matter of urgency. Furthermore, the procurement of the IT system to manage certification should be finalised;

· The Department should review the rules and guidelines for administration, management and awarding of bursaries to TVET college students as they impact negatively in the processing and awarding of transport and accommodation allowances;

· Articulation of TVET college graduates should be clearly defined and communicated to HEIs so that they can admit these students to their programmes. Furthermore, the admission requirements set by universities for TVET college students should not be a barrier to access; and

· The department should assist with additional security provision to curb the high level of theft of assets at Vuselela TVET college’s Matlosana Campus as it was reported during the oversight visit of the Portfolio Committee.

e) Programme 5 Skills Development

• The appointment of a permanent DDG for this branch should be prioritised by the Department;
• Adequate security measures should be implemented to protect the assets at Indlela. The Department should work collaboratively with DPW on the management of Indlela; and
• The targets set by SETAs for learnerships and other skills development initiatives should be revised to increase access, particularly of unemployed young people to these opportunities.

f) National Student Financial Aid Scheme

· The Accounting Authority should exercise its oversight responsibility adequately to ensure adherence to supply chain management policies by management;

· The Accounting Authority should implement consequence management in case of non-compliance to the implementation of internal controls by employees within their area of responsibility;

• The entity should provide additional monitoring and support to institutions that have outstanding claims;
• The entity should develop a communication strategy to properly engage with universities and TVET colleges management, financial aid offices and students;
• The loan recovery strategy of the entity should be improved to reduce the value of the loan book and to improve the monthly repayments by debtors;
• A fund raising strategy targeting private sector involvement in student funding should be explored to reduce the current budget shortfall of the entity;
• The performance indicators set by the entity should be corrected to be in line with Treasury requirements; and
• An action plan to address the findings of the AGSA should be developed, implemented and monitored.

g) Council on Higher Education

• An adequate retention strategy should be developed by the entity to reduce the high staff turnover as reported in the period under review, and
• The AGSA financial reporting procedures should be implemented by the entity to correct this recurring finding.

h) Quality Council for Trades and Occupations

• The quality assurance function that was with SETAs should be speedily taken over by the entity to reduce the backlog of qualifications that need to be approved;
• The Accounting Authority should exercise its governance responsibility adequately to improve the overall performance of the entity;
• The entity should embark on an advocacy programme to alert stakeholders on its mandate and operations; and
• Adherence to supply chain management policies should be compulsory to prevent irregular recurrence of irregular expenditures.

i) South African Qualifications Authority

• The digitisation of all qualifications pre-1992 should be prioritised;
• The entity should improve its verification process particularly of foreign qualifications;
• The financial management of the entity should be improved to address under collection of revenue;
• The relationship between the entity and the three Quality Councils (QCs) should be strengthened to improve the management qualifications in the entire PSET sector; and
• The filling of outstanding vacant posts should be prioritised by the entity.

10. Appreciation

The Portfolio Committee thanks the Department of Higher Education and Training (DHET), National Student Financial Aid Scheme (NSFAS), Council on Higher Education (CHE), Quality Council for Trades and Occupations (QCTO) and South African Qualification Authority (SAQA) for their 2013/14 Annual Reports which were submitted on time. The Portfolio Committee thanks the Office of the Auditor-General South Africa (AGSA) for its 2013/14 audit outcomes of the Department and its entities report.

Report to be considered.