ATC170215: Report of the Portfolio Committee on Higher Education and Training on the Second Quarter Performance Report Of 2016/17 of the Department of Higher Education and Training, dated 15 February 2017
REPORT OF THE PORTFOLIO COMMITTEE ON HIGHER EDUCATION AND TRAINING ON THE SECOND QUARTER PERFORMANCE REPORT OF 2016/17 OF THE DEPARTMENT OF HIGHER EDUCATION AND TRAINING, DATED 15 FEBRUARY 2017
The Portfolio Committee on Higher Education and Training having considered the second quarter performance report 2016/17 of the Department of Higher Education and Training (DHET) on 23 November 2016 reports as follows:
1. Introduction and background
Section 55 (2) of the Constitution of the Republic of South Africa, 1996 stipulates that the National Assembly (NA) must provide for mechanisms (a) to ensure that all executive organs of state in the national sphere of government are accountable to it; (b) to maintain oversight of the exercise of national executive authority, including the implementation of legislation, and any organ of state.
Consideration of quarterly reports is one of the tools that ensures that organs of the state are accountable to Parliament. These reports are critical for in-year monitoring as they provide information on pre-determined objectives, which are reflected in the strategic and annual performance plans, progress against objectives and identifying gaps in implementation. This is to ensure that policies announced by government and authorised by Parliament are actually delivered.
As part of its in-year monitoring, the Committee convened a meeting with the Department to consider its second quarter performance report 2016/17. This report accounts for work undertaken by the committee during performance assessment of the second quarter 2016/17. The report further makes recommendations for consideration by the Minister of Higher Education and Training.
2. Overview and assessment of the performance information on the predetermined objectives for the second quarter of 2016/17 and adjusted estimates 2016/17
During the quarter under review, the Department had 12 planned targets spread across the four core delivery programmes, namely University Education, Technical and Vocational Education and Training (TVET), Skills Development and Community Education and Training (CET). The two support programmes, Administration and Planning, Policy and Strategy did not have planned targets for the quarter under review. Of the 12 planned targets, 10 were achieved as planned and two were partially achieved (83 percent).
2.1. Programme 1: Administration
The purpose of this programme is to provide strategic leadership, management and support services to the Department. The programme has six budget sub-programmes, namely:
- Department Management.
- Corporate Services.
- Office of the Chief Financial Officer.
- Internal Audit.
- Office Accommodation.
During the quarter under review, the programme did not have planned targets. For 2016/17, there were five annual targets for this programme. As at 30 September 2016, the progress towards the achievement of the targets was as follows:
- The approved funded positions filled were at 92.5 percent with a vacancy rate of 7.45 percent. The Department experienced a challenge of high volumes of applications received and lack of capacity in the Recruitment Unit to respond to the demand.
- Of the 20 disciplinary cases reported, four cases (25 percent) were finalised within 90 days. Unavailability of employees led to the postponement of other cases.
- The Recruitment Unit had processed appointments within 187 days against the planned target of 180 days. The high volumes of applications reviewed and lack of capacity in the Recruitment Unit to respond to the demand were the reasons for deviation on this target.
- A draft 2017/18 Information and Communication Technology (ICT) procurement plan had been completed.
- It took an average 29.4 days against the planned target of 30 days to settle valid invoices to creditors.
2.2. Programme 2: Planning, Policy and Strategy
The purpose of the programme is to provide strategic direction in the development, implementation and monitoring of Departmental policies and Human Resource Development Strategy for South Africa. The programme has six budget programmes, namely:
- Programme Management: Planning, Policy and Strategy.
- Human Resource Development, Strategic Planning and Coordination.
- Planning, Information, Monitoring and Evaluation Coordination.
- International Relations.
- Legal and Legislative Services.
- Social Inclusion in Education.
During the quarter under review, the programme did not have planned targets. For 2016/17, there were nine planned annual targets for this programme. As at 30 September 2016, the progress towards the achievement of these targets was as follows:
- Approved National Policy on Career Development Services across all spheres of Government (due by March 2017). The Career Development Services across all spheres of Government Policy had gone through the cluster process and was on track to receive Cabinet approval for publication.
- Approved Policy for Open Leaning and Distance Education (due by March 2017). The first draft of the Open Learning and Distance Education Policy Framework had been developed and consultation was underway for finalisation.
- Approved Monitoring and Evaluation (M&E) Framework for PSET system (due by March 2017). The first version of the M&E Framework for PSET system had been developed. A compendium of indicators for system monitoring had been developed.
- A Monitoring Report on the International Relations (due by March 2017). An outline of International Relations monitoring report had been developed, and source documents identified and gathered. The drafting of the content was in progress.
- Macro Indicator Trend Report on PSET (due by March 2017). Funding for the Commission on Macro Indicator Trend Report on PSET had been approved.
- Developing materials for the identified two programmes to be piloted in 2017/18 (due by March 2017). The tender specifications for the development of specifications for the Occupational Qualification: Electrician was developed.
- Develop a report on the implementation of the strategy on open learning and distance education (due by March 2017). The information for the report on the implementation of the strategy on open learning and distance education was being collected.
- Annual report on skills supply and demand published by March 2017. The 2015 report on skills supply and demand was only finalised in September 2016, and was being updated with the 2016 available information. Annual statistics on PSET report published by 31 March 2017. The process was underway and at an advanced stage. Inputs for the publication of 2015 Statistics had been provided and confirmed by branches.
2.3 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 has six budget sub-programmes, namely:
- Programme Management: University Education.
- University-Academic Planning and Management.
- University-Financial and Information Systems.
- University-Policy and Development.
- Teacher Education.
- University Subsidies.
The programme had undertaken to deliver a total of 29 delivery outputs in 2016/17 financial year. During the quarter under review, there were five delivery outputs of which all (100 percent) targets were achieved. The targets that were achieved were as follows:
- A report on the Higher Education HIV/AIDS Programme for the 2015/16 financial year approved by the Director-General by 30 September 2016.
- Teaching and Learning Development Capacity Improvement Programme (TLDCIP) project plan for Early Childhood Development teacher education was approved by the DG on 15 September 2016.
- TLDCIP project plan for Primary Teacher Education was approved by the DG on 27 September 2016.
- TLDCIP project plan for TVET and Community College lecturer education was approved by the DG on 05 September 2016.
- TLDCIP project plan for special needs teacher education was approved by the DG on 26 September 2016.
The Branch was tracking progress towards the achievement of delivery outputs that were due in the subsequent quarters or at the end of the financial year. There were no challenges in most of the delivery outputs except for the revised funding framework for Higher Education Institutions (HEIs) to publish in the Government Gazette by 31 December 2016.
2.4. Programme 4: Vocational and Continuing Education and Training (VCET)
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. The programme has five budget sub-programmes, namely:
- Programme Management: Technical and Vocational Education and Training.
- Technical and Vocation Education and Training System Planning and Institutional Support.
- Programmes and Qualifications.
- National Examination and Assessment.
- Financial Planning.
The Programme had undertaken to deliver a total of 11 direct deliverable targets from the second to the fourth quarters. For the quarter under review, the Programme planned to achieve three delivery output and all three were achieved as follows:
- Monitoring and Evaluation Report of the TVET Colleges was approved by the DG on 22 September 2016.
- Teaching and Learning Support Plans for TVET Colleges was approved by the DG on 22 September 2016.
- The Student Support Services Plan was approved by the DG on 30 September 2016.
The Branch was tracking progress towards the achievement of delivery outputs that were due at the end of the financial year. There were no challenges in most of the delivery outputs except the national admission and promotion guidelines for the National Certificate Vocational NC(V) which was under review by Umalusi, and the review of the qualifications policy by Umalusi. The delays in the finalisation of the NC(V) programme review by Umalusi may negatively impact on this process.
2.5. Programme 5: Skills Development
The purpose of the programme is to promote and monitor the National Skills Development Strategy (NSDS III). To develop skills development policy and regulatory framework for an effective skills development system. The programme has four budget sub-programme, namely:
- Programme Management: Skills Development.
- SETA Coordination.
- National Skills Development Services.
- Quality Development and Promotion.
For the quarter under review, the programme had three delivery targets and only one target was achieved, namely an approved Sector Education and Training (SETA) monitoring report on skills development.
The other two targets that were not achieved included:
- The trade test pass rate at INDLELA was below target at 50 percent against the planned target of 52 percent.
- The average lead time from trade test application received until trade test conducted at INDLELA was 124 days against the planned target of 120 days.
Progress on delivery outputs that were due in the subsequent quarters was as follows:
- Approval of the Workplace based learning programme regulations by the Minister was due by 31 December 2016 – the Draft Regulations were in place and under discussion.
- Approval of the revised National Skills Development Strategy by the Minister was due by 31 March 2017. Consultation with stakeholders was being finalised.
- Approval of the SETA landscape by the Minister was due by March 2017. Consultation with stakeholders was being finalised.
2.6. Programme 6: Community Education and Training
The purpose of this programme is to plan, develop, implement, monitor, maintain and evaluate national policy, programme assessment practices and systems for community education and training. The programme has four budget sub-programme, namely:
- Programme Management: Community Education and Training.
- Community Education and Training Colleges Systems Planning, Institutional Development and Support.
- Financial Planning.
- Education and Training and Development Support.
The Programme had undertaken to deliver a total of seven delivery outputs for 2016/17 financial year. During the quarter under review, there was one delivery output due and it was achieved as planned, namely an approved Monitoring and Evaluation Policy for Community Colleges.
Progress on the other targets due in the subsequent quarters were as follows:
- Regulations for the establishment of the satellite Community Learning Centres (CLCs) due by 31 December 2016. The draft regulations had been developed and awaited approval.
- The National Curriculum Policy for Community Colleges due by 31 March 2017. The draft policy had been developed and awaiting approval.
- Conduct policy for General Education and Training Certificate (GETC) for adults due by 31 March 2017. The draft had been developed and awaited approval.
- Annual plan for education, training and development improvement plan for CET Colleges by 31 March 2017. A framework had been completed and was been processed for approval.
- An approved CET College infrastructure/facilities maintenance report due by 31 March 2017. The reports had been consolidated and being discussed at branch level with a view of developing updates and recommendations.
- An approved strategy on strategic partnerships was due by 31 March 2017. The Draft Strategy had been developed and was at a consultation stage internally.
2.7 Financial performance
During the quarter under review, the overall spending rate for the second quarter was 39.1 percent including Direct Charges. Expenditure in the first six months of 2016/17 financial year was R40.6 billion or 60.81 percent of the main appropriation. The high spending trend was mainly due to transfers made to universities and TVET Colleges. The average spending for normal operational activities, including Compensation of Employees, was 47.5 percent, and the spending rate on compensation of employees was 47.0 percent. There was an overspending of R10.5 million on compensation of Examiners and Moderators, which translated to 112.5 percent. The Department noted that the quarterly overspending on Examiners and Moderators would not constitute overspending at the end of the financial year.
2.8 Adjusted Estimates 2016/17
The Department’s original allocation amounted to R66.8 billion and this allocation included a direct charge against the National Revenue (R17.6 billion), which comprised the National Skills Levy payable to the SETAs and the National Skills Fund (NSF). The total allocation for 2016/17 (R66.8 billion) decreased to R64.6 billion in the Adjusted Estimates. This represented a decrease of R2 billion. The decrease was due to the annual review by National Treasury on the collection of the Skills Levy during the financial year. For 2016/17, the collection had been adjusted downwards based on current collection data.
Funds were shifted internally between Programmes to address specific operational needs and to provide for shortfalls on the cost of living adjustments. As a result of the migration of the TVET function to the Department, approximately 81 percent of the total 2016/17 allocation for the TVET Colleges was earmarked for Compensation of Employees (CoE) to provide for the uncertainty of the actual cost. During 2015/16, this contributed to a saving on CoE, as only 19 percent of the total budget was allocated for subsidies. The expenditure trend to date reflected that a similar saving may occur for the 2016/17 financial year. An amount of R260 million was shifted from CoE to TVET College.
3. Committee observations
The Committee noted that:
3.1 The overall performance of the Department in the quarter under reviewed showed significant improvement from the previous quarter, and the Department did not incur irregular expenditure.
3.2 The uncertainty about the future of the SETAs and the reduction in skills levy collection would have a negative impact in the implementation of the skills development projects.
3.3 The delay in the filling of vacancies due to inadequate capacity within the Recruitment Unit of the Department remained a challenge. The filling of vacant posts was critical to enhance the Department’s capacity to effectively deliver on its mandate.
3.4 The curriculum review of the TVET sector was critical to improve the employment prospects of TVET Colleges’ graduates, and to support industry with requisite skills.
3.5 The Skills Development Act did not compel government departments/entities to pay levies to the SETAs and further work should be undertaken to close the gaps in the legislation.
3.6 The below target in trade test pass rate at INDLELA and delay in trade test conducted were concerning, as the country envisaged to produce 30 000 artisans per annum by 2030.
3.7 The audit outcomes of TVET Colleges for 2015/16 did not show improvement, and the Department should provide more support to these institutions to improve their internal control systems.
3.8 The State Information Technology Agency (SITA)’s capacity challenges continued to delay the issuance of the National Certificate Vocational NC(V), Report 190/1 and the General Education and Training Certificate (GETC) certificates. This had a negative impact on the affected candidates and their opportunities to secure employment.
The overall performance of the Department in the quarter under review had improved from the previous quarter, and the transfer payments and subsidies were processed as planned in accordance with payment schedules. The Department continued to closely monitor the performance trends across all the Programmes to minimise overspending. It was commendable that there was no irregular, fruitless or wasteful expenditure incurred during the quarter under review.
The Department continued to experience challenges with the release of the NC(V) / Report 190/1 certificates owing data errors and the capacity of the State Information Technology Agency (SITA) to deliver on this function effectively. The Department undertook to resolve the matter with the SITA. The capacity related challenges at INDLELA impacted on the Department’s target of artisan training and development. The trade test pass rate at INDLELA in the quarter under review was below target and the institute delayed in conducting trade tests. The Department noted that the recapitalisation process was underway to improve the performance of the institute.
The Committee, having assessed the second quarter performance report 2016/17 of the Department, recommends that the Minister of Higher Education and Training consider the following recommendations:
5.1 The filling of the Deputy Director General (DDG) and other critical posts should be expedited.
5.2 The release of outstanding NC(V) and Report 190/1 and the General Education and Training Certificate (GETC) certificates should be prioritised.
5.3 A turn-around strategy should be implemented to support INDLELA to deliver on its mandate effectively.
5.4 Mechanisms should be put in place to capacitate the financial management units of the TVET Colleges to improve their internal control systems. Further interactions between the AGSA and TVET Colleges should be undertaken to guide them on the AG’s auditing requirements.
5.6 The Department should consider exploring the possibility of having one Community Education and Training (CET) College conceptualised as a model, which other CETCs can benchmark on.
5.7 The curriculum review of the TVET sector should be speedily implemented in line with industry needs. The relevant Quality Councils (QCs), Umalusi and the Quality Council for Trades and Occupations (QCTO) should present a comprehensive report to the committee with timeframes on implementation of the curriculum review.
5.8 Further work should be undertaken to resolve the loopholes in legislation on payment of skills levies by government departments and entities.
5.9 The reconfiguration of the new SETA landscape should be expedited to limit the uncertainty on the future of the SETAs and a detailed report should be provided to the committee.
Report to be considered.
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