ATC171017: Budgetary Review and Recommendation Report (BRRR) of the Portfolio Committee on Basic Education on the performance of the Department of Basic Education for the 2016/17 financial year, dated 17 October 2017

Basic Education

The Budgetary Review and Recommendation Report (BRRR) of the Portfolio Committee on Basic Education on the performance of the Department of Basic Education for the 2016/17 financial year, dated 17 October 2017.
 

The Portfolio Committee on Basic Education, having considered the performance of the Department of Basic Education, reports as follows:

 

1. Introduction

 

  1. Purpose of the BRRR

 

In terms of Section 5 of the Money Bills Amendment Procedures and Related Matters Act, No. 9 of 2009 the National Assembly, through its Committees, must annually compile the Budgetary Review and Recommendation Reports (BRRR) that assess the service delivery performance of departments given available resources. Committees are also expected to provide an assessment of the effectiveness and efficiency of the Department’s use of available resources, and may include recommendations on the forward use of resources. In this regard, the BRRR is a source document for the Committees on Appropriations when considering and making recommendations on the Medium Term.

 

1.2 The role and mandate of the Portfolio Committee

 

The Portfolio Committee on Basic Education is mandated by sections 55 and 92 of the Constitution of the Republic of South Africa (Act 108 of 1996) to oversee the activities and performance of the Department of Basic Education and its two statutory bodies, namely, the Council for Quality Assurance in General and Further Education and Training (Umalusi) and the South African Council for Educators (SACE). In this context, the Portfolio Committee on Basic Education focuses its work within the five constitutional mandates of Parliament, which are to process and approve legislation, conduct oversight, ensure public participation, process international agreements and facilitate co-operative governance. In addition to performing these constitutional mandates, the Committee engages in various activities and programmes focussing on the development and delivery of quality public education to all South Africans. The Committee also deals with matters referred to it by the Speaker or the National Assembly.

 

1.3 Core functions of the Department of Basic Education

 

The Department of Basic Education (DBE) derives its mandate firstly from the Constitution of the Republic of South Africa (1996), which requires education to be transformed and democratised in accordance with the values of human dignity, equality, human rights and freedom, non-racism and non-sexism. The Constitution guarantees access to basic education for all, including adult basic education. Secondly, the National Education Policy Act, 1996 Act 27 of 1996 (NEPA), inscribes into law the policies for the national system of education, the legislative and monitoring responsibilities of the Minister of Education, as well as the formal relations between national and provincial authorities. In terms of the NEPA, the DBE’s statutory role is to formulate national policy, norms and standards as well as to monitor and evaluate policy implementation and impact.

 

In line with its mandate, the Department has a vision of a South Africa in which all people will have access to lifelong learning, education and training opportunities, which will, in turn, contribute towards improving the quality of life and building a peaceful, prosperous and democratic South Africa.

 

In fulfilling its mandate over the next five years, the Department is guided by the Medium Term Strategic Framework (MTSF) designed to reflect the actions outlined in the National Development Plan (NDP).

 

1.4 Processes followed by the Portfolio Committee in arriving at the report

 

In compiling its BRRR, the Portfolio Committee on Basic Education assessed the performance of the Department of Basic Education with reference to the following:

 

  • The strategic priorities and measurable objectives as set out in the 2016/17 strategic plan.
  • Expenditure trends drawn from the reports of the National Treasury;
  • The 2016 and 2017 State of the Nation Address priorities;
  • The reports of the Auditor-General of South Africa and the reports on the 2016/17 Budget Vote;
  • The financial statements and annual report briefings, in terms of Section 65 of the Public Finance Management Act No. 1 of 1999, which requires the Ministers to table the Annual Reports and financial statements for the Department and public entities before Parliament.
  • Findings of the Portfolio Committee’s oversight visits, including quarterly briefings.
  • External sources assessing the performance of the Department.

 

The briefings on the annual performance and financial statements of the Department and its statutory bodies took place on 04, 05 and 10 October 2017 in Parliament. The Portfolio Committee also met with the Auditor General on the audit outcomes of the Department, the Financial and Fiscal Commission (FFC) and the Audit Committee of the Department of Basic Education on 03 October 2017.

 

2. Overview of the key relevant policy focus areas

 

2.1 Strategic Goals for 2016/17 and 2017/18 financial years

 

The strategic goals of the Department of Basic Education (DBE) in 2016/17 and 2017/18 are anchored on the 2014 – 2019 Medium Term Strategic Framework (MTSF) and the sector plan, Action Plan to 2019 - Towards the realization of schooling 2030. The overarching goal of the education sector remains to improve learner performance across all grades. The Action Plan outlined 27 goals which the Department aimed to accomplish.

 

The MTSF outputs for the sector and the Department’s plans are aligned to and guided by the National Development Plan. The sector also has non-negotiables to focus on other areas inadequately covered in the MTSF.

 

The Department’s Strategic Outcome Oriented goals per programme are aligned to the following six MTSF sub-outcomes:

 

  • Improved quality teaching and learning, through the development, supply and effective utilisation of teachers;
  • Improved quality teaching and learning, through the provision of adequate, quality infrastructure and learning and teaching support materials;
  • Improving assessment for learning to ensure quality and efficiency in academic achievement;
  • Expanded access to Early Childhood Development and the improvement of the quality of Grade R, with support for pre-Grade R provision;
  • Strengthening accountability and improving management at the school, community and district levels;
  • Partnerships for education reform and improved quality.

 

Given that basic education is a concurrent function requiring a cooperative and more integrated approach, a significant part of the Department’s work is the alignment of the work of the PEDs’ Strategic and Annual Performance Plans with the sectoral mandate articulated in the NDP and the MSTF.

 

Key priorities of the Department for 2016/17 included improving school infrastructure; improving curriculum delivery through high quality learning and support materials (LTSM); increasing the number of learners completing matric; supporting learners with disabilities; ensuring the adequate supply of quality teachers; assessing the quality of teaching and learning; strengthening learning and teaching in the early grades; improved accountability across all levels of the basic education system; and, providing meals to learners.

 

The priorities for 2017/18 remain largely unchanged, with additions being the introduction of the new conditional grant to provide educational opportunities to learners with severe to profound intellectual disabilities.  The Department is also paying additional attention to the improvement of access to and the use of ICT in basic education.  

 

3. A summary of previous key Performance Recommendations of the Portfolio Committee

 

  1. Budgetary Review and Recommendation Report 2016

 

3.1.1     Responses of the Department of Basic Education

 

In the 2016 Budgetary Review and Recommendation Report (BRRR), the Portfolio Committee recommended that the Department provide Parliament with a comprehensive Action Plan with timeframes to address the 2015/16 AGSA’s audit findings. The Portfolio Committee noted in particular the following AGSA’s findings:

 

  • The recurring findings of irregular, unauthorised and fruitless and wasteful expenditure; inadequate management of procurement and contracts; misstatements in submitted annual financial statements and inadequate consequence management.
  • The recurring findings of unreliability of the reported performance information when compared to the source information in the Department’s programmes 2, 3 and 4.
  • That the performance of the internal audit unit against the annual internal audit plan was not satisfactory due to challenges in the capacity of the unit.

 

The Committee further requested that the Department include in its Action Plan the following:

 

  •  A report on the outcome of the request to National Treasury to deviate from the normal procurement process in respect of the national catalogues of textbooks
  • A report on the outcome of the investigation on the allegation that volunteers for the Kha Ri Gude Programme were paid stipends without learners in class and steps taken in respect of consequence management
  • An implementation progress report on the remedial actions resulting from the above investigation
  • An update on the request for approval by Treasury regarding unauthorised expenditure in respect of the National Teaching Awards.
  • An update on progress made in strengthening the internal audit unit to ensure that it effectively carries out its functions.

 

  1. Progress report on the implementation of the Action Plan to address the AGSA’s 2015/16 audit findings

 

Action Plan

Progress made

The recurring findings of irregular, and fruitless and wasteful expenditure; inadequate management of procurement and contracts; misstatements in submitted annual financial statements and inadequate consequence management.

 

Although the Department noted that they introduced several measures to improve their expenditure, the AGSA’s 2016 audit findings showed that oversight and monitoring over financial and performance of infrastructure projects was inadequate, which as in previous years resulted in the recurring findings of irregular, and fruitless and wasteful expenditure. 

The AGSA further identified the recurrence of misstatements in the financial statements and annual performance report, which are mainly attributed to daily controls not being adequate and effective, specifically relating to financial and performance reporting on the infrastructure programme. 

The recurring findings of unreliability of the reported performance information when compared to the source information in the Department’s programmes 2, 3 and 4.

 

Although the Action Plan was developed to improve the reporting of performance information, the AGSA once again raised material findings on the reliability of the reported performance information of Programme 2: Curriculum policy, Support and Monitoring and Programme 4: Planning, Information and Assessment. There were no material findings in respect of programme 5. Interventions are still required in order to improve the current status of reporting of performance information, particularly in the identified programmes.

An update on progress made in strengthening the internal audit unit to ensure that it effectively carries out its functions

 

The Department noted that they appointed a new Director of Internal Audit since 1 November 2016 to strengthen the work of the Audit Unit.

 

The Internal audit unit is currently utilizing current staff and co –source some audit projects to a consulting firm appointed for a year by the department. Internal audit is currently assisting management in different key risk areas by risk based auditing and investigation.

 

The above measures notwithstanding, the AGSA reported in its 2016 findings that deficiencies in the control environment mainly in the area of oversight by leadership and, particularly in respect of the infrastructure programme and performance reporting over the past four financial years, were not adequately addressed.

 

In terms of governance, the internal audit was not fully involved in the review of financial and performance information. Commendably, the AGSA noted that internal audit improved during the last quarter of the financial year.

 

                                                           

3.1.3     Responses to other key requests pertaining to the Department’s Action Plan

 

  1. A report on the outcome of the request to National Treasury to deviate from the normal procurement process in respect of the national catalogues of textbooks: National Treasury approved the deviation in a letter dated 3 March 2017.

 

  1. A report on the outcome of the investigation on the allegation that volunteers for the Kha Ri Gude Programme were paid stipends without learners in class and steps taken in respect of consequence management and an implementation progress report on the remedial actions resulting from the above investigation: The Department reported that they recovered R281 838.53 from fraudulent volunteers from their stipend payments (99.84% recovered) and the Volunteers were removed from the next Campaign. Written warning letters were given to Management staff. The Department in 2016/17 strengthened the validation process before registration and payment of stipends.

 

  1. An update on the request for approval by Treasury regarding unauthorised expenditure in respect of the National Teaching Awards: The Department reported that there was no response on this matter from the National Treasury.

 

3.1.4     Responses to recommendations pertaining to Planning and Reporting

 

  1. Reporting on future Quarterly Reports on Inclusive Education and intensifying the implementation of interventions in respect of inclusive education, including increasing, adequately well-resourced full service schools: The Department noted that from 2017/18 to 2019/20, the implementation of the Screening, Identification, Assessment and Support (SIAS) policy and Curriculum Differentiation would be expedited. Three teachers (one member of the School Management Team, one School Based Support Team (SBST) coordinator and one Senior teacher) from each school would receive training and the remainder of staff per school would benefit from subsequent on-site development.

 

The Department envisaged to finalise the Norms and Standards for the Distribution of Resources for an Inclusive System in 2017/18 to eliminate disparities in the resourcing of the policy across PEDs.

 

  1. Reporting on the percentage of Grade R practitioners with NQF levels 4, 5 and 6: It was reported that the percentage of Grade R practitioners with different qualification levels was as follows:
  • NQF level 4: 25.7 per cent (6 028 practitioners)
  • NQF level 5: 23 per cent (5 602 practitioners)
  • NQF level 6 and above: 27.5 per cent (6 436 practitioners)

 

(c)  Taking the necessary steps to ensure timeous monitoring of set targets in order to identify targets that may not be met and ensuring remedial steps are in place to mitigate these challenges: Although the Department indicated that they had established mechanisms to ensure the timeous monitoring of set targets in order to ensure that remedial steps are put in place to address challenges, it would appear that these mechanisms were not yielding the desired results in respect of the achievement of the ASIDI targets given that to date the Department was not achieving its set targets.

 

  1. Effecting the tracking of teacher absenteeism: The Department reported that they were working with PEDs to ensure that the indicator on teacher absenteeism is part of their APPs.

 

  1. Responses pertaining to other service delivery issues

 

  1. Taking urgent steps to resolve the impasse with unions in respect of the appointment of principals on the basis of a competency assessment and the signing of Performance Agreements since these issues are prioritised in the NDP: There was very little progress in the implementation of this recommendation. The Quality Management System (QMS) was adopted at the ELRC in November 2014. The instrument requires all principals to agree on a work plan / performance agreement with their immediate supervisors (i.e. circuit manager).  The CTU - ATU and the DBE signed the QMS agreement in Jan-Feb 2015.  SADTU had not signed the agreement. Training and implementation of the QMS had not been rolled out as it would result in non-cooperation from SADTU. The Department reported that the matter has been elevated for bargaining at the level of the ELRC.

 

In mitigation of the above, the Department reported that the Council of Education Ministers (CEM), at its meeting on 18 May 2017, approved the signing of job descriptions by school-based educators. The job descriptions will serve as a proxy for performance agreements. PEDs were requested to ensure that all principals sign job descriptions with their immediate supervisors by 31 July 2017.

 

  1. Ensuring that Provincial Education Departments complete the profiling of educators as a matter of urgency, in order to enable proper planning and effective oversight: The Department noted that they were monitoring the capturing of educator qualification and specialization profiles on a quarterly basis. Progress had not been as expected due to challenges such as capacity and resources to retrieve and capture historical records, as well as missing document from old files.

 

  1. Consistently monitoring and reporting compliance with new infrastructure Norms and Standards per province, considering that all schools were required to be compliant by November 2016: The Department reported that the sector continuously monitored progress on the implementation of the Norms and Standards. Relatively good progress was achieved at a sectoral level in providing basic services (water, sanitation and power supply) both in terms of actual access to services, but also in terms of operational capacity of the sector to provide these services. The targets as articulated in the Regulations Relating to Minimum Uniform Norms and Standards for Public School Infrastructure, was to attain universal access to basic services provision by the 2016/17 financial year. The department reported that with regards to progress in addressing the schools without any form of sanitation facilities and water, out of the nine (9) provinces, seven (7) had achieved the three-year target and these provinces were already addressing the seven-year targets. Only two (2) provinces (Eastern Cape and Free State) did not achieve the targets. Major challenges experienced included the rationalisation and school merger process, maintenance of sanitation as well as instances of vandalism in schools, which made sanitation provision a moving target. Other challenges identified with regards to water availability in schools included boreholes drying up, and collaboration with agencies providing water, like municipalities.

 

With regards to electricity the Department reported that five provinces had achieved the three-year target. Some of the key challenges with regards to electricity supply included vandalism of solar panels, services being cut by the municipalities and instances where ESKOM reportedly had long-term plans not aligned with the education sector infrastructure plan. With regards to inappropriate school structures, the Department reported that the sector had achieved 235 projects out of a total of 699 projects. Challenges included schools built on asbestos belt and the process of school rationalisation. The DBE and the PEDs were reportedly exploring planning and implementation mechanisms to fast track the replacement of infrastructure in schools.

 

The DBE, in collaboration with the National Treasury, had also initiated a process of determining the human resource gaps in the nine provincial departments to enable them to implement and effectively deliver school infrastructure. This culminated in the development of capacitation framework with the key objective of recruiting and appointing built environment and finance personnel for improving school infrastructure delivery in provinces. A total of 407 vacancies had to date, been filled. There had been some fairly significant improvement in the performance of provinces since the inception of this programme. However, the AGSA’s 2016/17 findings indicated that certain PEDs did not have enough capacity to implement projects. There was heavy reliance on consultants /project managers.

 

  1. Together with Provincial Education Departments, taking the necessary steps to fast-track the finalisation of the rationalisation of small and unviable schools, which impacts negatively on the performance and spending needs of infrastructure programmes, including ASIDI: The Department reported some progress regarding the implementation of this recommendation. A national project team was established consisting of DBE officials from relevant disciplines, to engage with Provincial Education Departments on their programmes for the rationalisation of small and non-viable schools, monitor the progress made and provide support to ensure processes are fast-tracked. The team was also reportedly conducting monthly monitoring and support visits to the Eastern Cape, KwaZulu Natal and Limpopo. PEDs had also been requested to submit detailed 3-year plans on the rationalisation of small and non-viable schools.

 

  1. Together with relevant stakeholders, intensifying the implementation of measures to improve the quality of teacher training and development throughout the system and ensure that there is value for money in all the programmes offered:  The Department noted a range of measures designed to improve the quality of teaching training and development. Through collaboration agreements with other key stakeholders, the DBE and provinces also continued to address the professional development needs of more teachers across the country including in areas such as teacher training in Mathematics, English First Additional Language and Maths Literacy. Partners included the British Council, the Flemish Association for Development Cooperation and Technical Assistance (VVOB), and the National Education Collaboration Trust (NECT). In order to ensure that there is value for money in the training that is provided, the DBE noted that all teacher development programmes should be endorsed by the South African Council for Educators (SACE).

 

  1. Together with Provincial Education Departments, ensuring that there are sufficient teachers to effectively implement the Incremental Introduction of African Languages (IIAL) in all the affected schools in line with the implementation targets: The Department reported that as part of the new implementation plan (2018-2029), PEDs were expected to implement IIAL in schools that are currently not offering any African language. Sources such as the Funza Lushaka Bursary Scheme graduates and the National Recruitment Database were used to recruit qualified teachers. PEDs were expected to use existing resources to fund additional posts where necessary. Other modes of delivery included training, using existing teachers and providing itinerant teachers.
  2. Ensuring that Provincial Education Departments take appropriate measures to spend the conditional grants consistently throughout the year, including the HIV and AIDS (Life Skills Education) and the Mathematics, Science and Technology (MST) grants which experience slow spending in the First Quarter of the financial year: With regard to the HIV/AIDS Life Skills Education Programme, the Department reported that Provinces were informed during Inter-provincial meetings to plan according to the tranches received on a quarterly basis. This would enable Provinces to implement activities in a manner that would minimise under-expenditure, as well as lumping implementation towards the end of the financial year. In this regard, provincial implementation improved in 2017, with the exception of Gauteng and Limpopo provinces as reported in the fourth quarterly report for 2016/2017. To ensure that the challenge does not recur, a meeting was held with Limpopo province on 15 May 2017 to ensure that procurement processes were underway. Subsequent meetings would be held with the province. The HIV and AIDS conditional Grant experienced a marginal decline in spending from 99.7 per cent in 2015/16 to 97.27 per cent in 2016/17. 

With regard to the MST Conditional Grant, measures introduced include informing all the provinces of their under-performance and requesting them to improve their processes. Letters of intention to withhold funds were submitted to all the affected provinces. Letters of support and guidance were also issued to all provinces during July 2016. These letters indicated the risks of underperformance and provided guidance and advice to all provinces.

 

A comprehensive improvement plan was developed to provide a structured programme of support for each province:

  • A list of approved tenders at each province was compiled for sharing between provinces with the aim of introducing provincially initiated transversal tenders.
  • Identify service providers for all Technical CAPS training for Grade 11 & 12.
  • Appoint the MST Conditional Grant additional personnel and enhance monitoring and support at provincial level.
  • Institute the development of MST Provincial Strategies to align the activities of the grant and provincial priorities.

 

Additional personnel were appointed by the Department of Basic Education (DBE) to conduct regular monitoring and support on a quarterly basis. The Department of Basic Education also hosted the inter-provincial meetings on a quarterly basis to look at grants performance on 20-21 October 2016 and 16-17 March 2017.

 

It would appear that the measures introduced in respect of the MST Conditional Grant, which had underspent since inception, yielded positive results. According to the Department’s Annual Report spending on this Conditional Grant improved from 96 per cent in 2015/16 to 100 per cent in 2016/17. It should be noted however that the sector underspent on this Conditional Grant in the First Quarter of 2017/18.

 

4.         Overview and Assessment of Financial Performance

 

4.1 Allocation versus Expenditure per Programme for 2016/17

 

Table 1: Allocation versus Expenditure per Programme for the 2016/17 Financial Year

Programmes

2016/17

Expenditure as % of Appropriation

Appropriation

Actual Expenditure

Variance

R’000

R’000

R’000

Administration

419 000

418 301

699

99.83%

Curriculum Policy, Support and Monitoring

1 877 954

1 826 691

51 263

97.27%

Teachers, Education Human Resources Development and Institutional Development

1 179 040

1 177 397

1 643

99.86%

Planning, Information and Assessment

12 594 706

11 719 953

874 753

93.05%

Educational Enrichment Services

6 342 761

6 333 722

9 039

99.86%

Total

22 413 461

21 476 064

937 397

95.82%

 

The budget allocation of the Department of Basic Education in 2016/17 was R22.4 billion, which represented a nominal increase of R1.1 billion, or 3.4 per cent from 2015/16. The majority of the budget (R17.9 billion) consisted of transfers and subsidies, mainly to provinces and municipalities. This means the Department had an available budget of R4.6 billion for operations.

 

Actual expenditure in 2016/17 was R21.5 billion or 95.8 per cent of the allocated budget compared to 97.7 per cent in 2015/16. The unspent balance of R937.4 million or 4.2 per cent at the end of 2016/17 is more than in 2015/16, when R490.3 million or 2,3 per cent was unspent. In line with the spending trends in previous years, the main contributors to the under-spending in 2016/17 were Programme 2 that had spent 97.3 per cent and Programme 4, which spent 93.05 per cent.

 

4.1.1     Reasons for Deviations in the above Programmes

 

  • Programme One: Administration (Underspent: R699 000) - There were no material variances in this programme.
  • Programme Two: Curriculum Policy, Support and Monitoring (Underspent: R51.3 million or 2.7 per cent) – The underspending on the programme was due to the Expanded Public Works Programme (EPWP) relating to Kha Ri Gude and the Second Chance Programme. With regards to EPWP, the number of volunteers was lower than anticipated therefore the EPWP funds could not be drawn. The Department conducted an investigation on the legitimacy of the number of learners, therefore some payments were not processed as estimated. For the Second Chance Programme only 7 015 of the 85 000 progressed learners were targeted to participate in 2016.  Mpumalanga, Eastern Cape and Limpopo Province did not have learners registered for the June examinations and there was no face to face classes.
  • Programme Three: Teachers, Education Human Resources Development and Institutional Development (Underspent: R1.6 million or 0.1 per cent) - There were no material variances on this programme.
  • Programme Four: Planning, Information and Assessment (Underspent: R875.1 Million or 6.9 per cent) – As in previous years, the under-spending on this programme was in the ASIDI programme mainly under payment of capital assets. The underspending was mainly attributed to poor performance by implementing agents, professional service providers and contractors, which necessitated the termination of contracts and the process of appointing replacement contractors. The process of rationalisation and mergers of schools especially in the Eastern Cape Province, also delayed the achievement of targets.
  • Programme Five: Educational Enrichment Services (Underspent: R9.0 Million 0r 0.1 per cent) - The underspending was due to the HIV and Aids conditional grant (Limpopo Province). There were delays in provincial approval of bids to implement activities as well as delays in payment of invoices for activities conducted. In addition, the approval by National Treasury to pay the stipends for 108 Learner Support Agents was only granted in March 2017.

 

Table 2: Allocation against Actual Expenditure for the 2016/17 Financial Year

Economic Classifications

2016/17

Expenditure as % of Appropriation

Appropriation

Actual Expenditure

Variance

R’000

R’000

R’000

CURRENT PAYMENTS

2 560 051

2 561 407

(1 356)

100.1%

Compensation of Employees

468 690

454 375

14 315

96.9%

 Goods and Services

2 045 040

2 060 711

(15 671)

100.8%

    Interest and rent on land

46 321

46 321

-

100.0%

TRANSFERS AND SUBSIDIES

17 852 413

17 845 763

6 650

100.0%

Provinces and Municipalities

16 586 230

16 579 568

                                                6 662  

100.0%

Departmental agencies and accounts

1 167 484

1 167 459

25                                                   

100.0%

Foreign government and international organisations

19 128

19 196

(68)

100.4%

Non-profit institutions

76 178

76 178

-

100.0%

Households

3 259

3 362

(103)

103.2%

PAYMENTS FOR CAPITAL ASSETS

1 995 662

1 063 493

932 169

53.3%

Building and other fixed structures

1 987 023

1 056 751

930 272

53.2%

Machinery and Equipment

8 629

6 742

1 887

78.1%

Software and other tangible assets

10

-

10

0%

PAYMENTS FOR FINANCIAL ASSETS

5 335

5 401

(66)

101.2%

Total

      22 413 461

       21 476 064

          937 397

95.8%

 

4.1.2     Deviations and Mitigating Measures

  • Compensation of Employees: The underspending on this item was due to the expenditure on Earmarked funds (Mathematics, Science and Technology (MST), Oversight grant and Workbooks Earmarked Funds. The allocation for the MST was in respect of MST Oversight posts for monitoring the implementation of the conditional grant. The vacant posts were advertised. The process of shortlisting was currently underway. With regards to workbooks the development of additional content was no longer done for the entire workbook. In the allocation, for workbooks provision was made for the portion of payment of developers. The Department will reprioritise the allocation to fund critical posts which were not funded in the organisational structure.

 

  • Goods and Services (Over Expenditure): This was mainly in respect of the ASIDI programme. The Department appointed a team to fast track the rationalization of ASIDI schools in the Eastern Cape, in order to meet its targets. Projects that were terminated from Implementing Agents (IAs), e.g. CSIR, were in the interim, managed by the Department through the Programme Support Unit, hence additional resources were solicited to manage these projects.

 

  • Payments for Capital Assets (Under Expenditure): This was mainly in respect of the ASIDI programme. Poor performance by IAs, professional service providers and contractors, which necessitated the termination of contracts and the process of appointing replacement contractors. The process of rationalisation and mergers of schools especially in the Eastern Cape Province, also delayed the achievement of targets.

 

5.         Report of the Auditor-General’s on the Department’s audit outcomes

 

The Department received an unqualified audit opinion for 2016/17 as in previous years. The emphasis of matters raised by the Auditor-General include the following:

 

  • Restatement of corresponding figures: The corresponding figures for 31 March 2016 were restated as a result of an error in the financial statements of the Department as well as for the year ended 31 March 2017.
  • Material underspending of the budget: The Department materially underspent the budget on Programme 4 in the ASIDI programme to the amount of R875.1 million.
  • Irregular expenditure: Irregular expenditure to the amount of R621   million was incurred in the current year as a result of supply chain processes not being followed. Details of irregular expenditure in the year under review as disclosed in the Department’s Annual Financial Statements, included the following:
  • The extensions on the Memorandum of Agreements (MOAs) were not renewed on time for the Implementing Agents (IAs)
  • When appointing the Adopt-A-School, there was a deviation on procurement requirement without required approval
  • The Supply Chain Management processes were not followed in the replacement of non- performing contracts.

 

Irregular expenditure to the amount of R352.7 million that was incurred in the previous years was still under investigation. 

  • Fruitless and Wasteful Expenditure: As disclosed in the financial statements, fruitless and wasteful expenditure to the amount of R11.2 million relating to the Kha Ri Gude programme was incurred in the current year as expenditure incurred that did not yield the intended value. The Department conducted an investigation on the Kha Ri Gude programme, which revealed that there were centres where no classes took place and volunteers received stipends. In addition, some learners already had a matric certificate.

5.1        Other matters raised included:

  • Adjustment of material misstatements: As in previous years, there were material misstatements in the annual performance report submitted for auditing. These material misstatements were on the reported performance information of Programme 2: Curriculum policy, Support and Monitoring and Programme 4: Planning, Information and Assessment. Management subsequently corrected only some of the misstatements. The Auditor-General raised material findings on the reliability of the reported performance information relating to the indicator on the percentage of learners that are successfully uploaded on to LURITS. (Programme 4).
  • Annual Financial Statements: As in previous years, the financial statements submitted for auditing were not prepared in accordance with the prescribed financial reporting framework and supported by full and proper records, as required by section 40(1)(a) and (b) of the PFMA. Material misstatements of immovable tangible capital assets, accruals and payables not recognised and commitments identified by the auditors in the submitted financial statements were subsequently corrected and the supporting records provided, resulting in the financial statements receiving an unqualified audit opinion.

            5.2        Irregular Expenditure Adjustment

 

2016/17

2015/16

 

R’000

R’000

Opening Balance

2 207 063

1 641 265

Prior year Adjustment   

*(1 402 090)

(33 865)

New Irregular Expenditure

621 314

599 663

Closing Balance

1 426 287

2 207 063

 

  • In previous years, the Department disclosed expenditure incurred on construction and management fee as irregular expenditure. The appointment of these IAs did not follow proper Supply Chain processes. The AGSA advised that only the management fee should be disclosed as irregular expenditure, therefore Construction has been reduced on the Irregular Expenditure Register.

 

  • The Accounting Officer has appointed an investigation team to investigate all the cases. The concluded ones would be reported to the Accounting Officer to take appropriate action. In two cases additional information had been made available. They would be discussed with the AGSA.

 

5.3        Fruitless and Wasteful Expenditure Adjustment

 

2016/17

2015/16

 

R’000

R’000

Opening Balance

44 333

28

Prior year Adjustment

*(42 755)

-

New Fruitless Expenditure

11 157

44 305

Less:  Amounts transferred to receivables for recovery

(282)

-

Closing Balance

12 453

44 333

 

  • The Department noted that the amount of R 42.755 was part of the R44 million that was originally disclosed as Fruitless and Wasteful Expenditure. Investigations revealed that it was not Fruitless and Wasteful Expenditure. The AGSA agreed that it should be removed. It was moved to Irregular Expenditure as the policy used to pay stipends to volunteers on a sliding scale was not approved at the correct level of Accounting Officer.

 

6. Financial Performance for the First Quarter 2017/18, DBE

 

6.1        Allocation against Actual Expenditure per Programme

 

Table 3: Allocation against Actual Expenditure per Programme

 

PROGRAMMES

2017/18

 

 

APROPRIATION

Q1 ACTUAL EXPENDITURE

Expenditure as % of Appropriation

Q1 Projected expenditure

Variance from projected expenditure

R’000

R’000

R’000

R’000

R’000

Administration

416 283

103 921

25.0%

108 830

4 909

Curriculum Policy, Support and Monitoring

1 801 953

102 491

5.7%

249 874

147 383

Teachers, Education Human Resources Development and Institutional Development

1 215 104

1 012 516

83.3%

1 014 699

2 183

Planning, Information and Assessment

13 248 303

4 012 678

30.3%

4 655 979

643 301

Educational Enrichment Services

6 726 977

2 151 635

32.0%

2 152 827

1 191

Total

23 408 620

7 383 241

31.5%

8 182 209

799 968

 

The total Final Appropriation budget of the Department for the 2017/18 financial year amounts to R23.4 billion. The actual expenditure for the First Quarter amounted to R7.4 billion or 31.5 per cent of the available budget, compared to the spending of 31.8 per cent in 2016/17. The 2017/18 First Quarter spending was lower compared with the Department’s projections to spend R8.2 billion. The variance was mainly in Programmes 2 and 4 under goods and services, transfers and subsidies and payments for capital assets.

 

6.1.1 Expenditure analysis per programme

 

The lower than projected spending of R147.4 million or 59 per cent in Programme 2 was mainly due to the withholding of the first transfer of R24.4 million of the Learners with Profound Intellectual Disabilities grant to provinces as provincial business plans had not yet been approved. This programme also experienced slow spending under goods and services, mainly due to delays in making final payments for the Kha Ri Gude programme as verification and validation processes were still being completed.

 

Expenditure under Programme 3 was lower by R2.2 million or 0.2 per cent, mainly in line with the First Quarter projections to spend. However, with regard to the First Quarter expenditure as a percentage of the 2017/18 appropriation, the high expenditure in this programme was due to the first transfer payment for Funza Lushaka Bursaries. Annually in April 90 per cent of the allocation for Funza Lushaka Bursaries funds is transferred to the National Student Financial Aid Scheme (NSFAS). The balance of 10% is made during January each year to cover for the registration fees for the new academic year.

 

In terms of Programme 4, the Department had projected to spend R4.7 billion but were able to spend R4 billion. The deviation of R643.3 million or 13.8 per cent of the available budget was mainly due to implementation delays in the ASIDI projects, where the projected expenditure for the quarter was R731.8 million and only R123.6 million was spent. As in 2016/17, the slow spending in the First Quarter of 2017/18 was mainly due to poor performance by some implementing agents, difficulty in replacing underperformers, and delays in finalising the merging and rationalisation of schools in the Eastern Cape Province.

 

6.1.2 Expenditure on Personnel

 

The DBE spent more than the projected amount on compensation of employees by R3.1 million mainly in Programmes 1, 2 and 3. The higher than projected expenditure was mainly due to the extension of contracts of additional staff members for six months to finalise projects, as well as performance bonuses that were paid out in June 2017. The Department expected to stay within the ceiling for compensation of employees for 2017/18 by terminating remaining contract posts when these expire. Expenditure was thus expected to decrease from October 2017.

 

6.2        Transfers and subsidies, (predominantly comprising conditional grants)

 

            The transfers of the conditional grants for the first quarter were made as scheduled, except for the Learners with Profound Intellectual Disability conditional grant, which was withheld due to non-submission of approved business plans.

 

Spending in respect of the Education Infrastructure grant and the National School Nutrition Programme was largely on track whilst that of the HIV and AIDS (Life Skills Education) and the Mathematics, Science and Technology (MST) grants was lagging behind at 10 per cent and 11 per cent respectively.  Notably, in 2016/17 spending on the MST grant improved to 100 per cent by the end of the financial year, following a slow start in the First Quarter. The HIV and AIDS programme experienced underspending in 2016/17.

 

7. Overview and Assessment of Service Delivery Performance

 

7.1 Service Delivery Performance for 2016/17

For 2016/17, the total number of indicators for all DBE programmes was 44, compared with 30 in 2015/16. The Department regressed towards the achievement of its set targets from fully achieving 87.1 per cent, partially achieving 3.33 per cent and not achieving 6.67 per cent in 2015/16 to fully meeting 68 per cent, partially achieving 16 per cent and not achieving 16 per cent in 2016/17.

 

7.1.1     Programme One: Administration - The Administration Programme is responsible for the management of the Department and the provision of strategic and administrative support services. Within this programme, targets were achieved or exceeded in all three performance indicators as follows:

  • The percentage of Service providers within the procurement unit paid within 30 days – The target was set at 100 percent per quarter and the Department was able to reach 99.90 percent. The marginal variance was due to the Expenditure Unit authorising payments from LOGIS and BAS as and when received from the capturers considering the fact that some invoices had two to three days’ prior month end.
  • The percentage of received misconduct cases resolved within 90 days – The target was set at 80 percent and the Department achieved this target with no deviation.
  • The percentage of received grievances cases resolved within 30 days – The target was set at 75 percent and the Department over-achieved this target with 80 percent actual output, which was a positive deviation of 5 percent.

 

            7.1.2     Programme Two: Curriculum Policy, Support and Monitoring - The purpose of this programme is to develop the curriculum and assessment policies and to monitor, evaluate and support their implementation. Within this programme, of the 16 performance indicators, the Department fully achieved 13 and partially achieved three (3) targets set, as follows:

  • The number of off-line digital content packaged and distributed to provinces – The target was set at 10 and the Department reach the target with no deviation.

 

  • The number of schools per province monitored for utilisation of ICT resources - The target was set at 27 and the Department was able to reach a total of 30, which represents a positive deviation of three (3).

 

  • The number of off-line digital content resources developed annually - The target was set at four (4) and the Department was able to reach a total of five (5), which represents positive deviation of one (1).

 

  • The percentage of public schools with Home Language workbooks for learners in Grades 1-6 - The target was set at 100 percent and the Department reached the target with no deviation.

 

  • The percentage of public schools with Mathematics workbooks for learners in Grades 1-9. The target was set at 100 percent and the Department reached the target with no deviation.

 

  • The percentage of public schools with workbooks for Grade R- The target was set at 100 percent and the Department reached the target with no deviation.

 

  • The number of underperforming schools monitored on the implementation of the Early Grade Reading Assessment (EGRA) - The target was set at 20 and the Department reached the target with no deviation.

 

  • The number of schools monitored on the implementation of the reading norms - The target was set at 20 and the Department reached the target with no deviation.

 

  • The number of schools monitored on the implementation of the Incremental Introduction to African languages (IIAL) nationally - The target was set at 20 and the Department reached the target with no deviation.

 

  • Mathematics, Science and Technology lesson plans developed for the Senior and FET Phases – All lesson plans were developed as per the target set by the Department.

 

  • Mathematics, Science and Technology teacher guides developed for the Senior and FET Phases - All teacher guides were developed as per the target set by the Department.

 

  • The number of districts visited for monitoring the 1+4 strategy - The target was set at nine (9) and the Department was able to reach a total of 12. A positive deviation of three (3).

 

  • The number of training centres of CAPS for Technical subjects visited during a training session - The target was set at 14 but the Department was only able to reach a total of nine (9), which represents a negative deviation of five (5).  The Office of the Auditor-General of South Africa’s interpretation to the indicator was that the Department visited nine training centres. The Department focused on the 14 training sessions and not training centres as there were nine centres which could be utilised for training. The progress reported was then reported on the training centres resulting in a negative deviation.
  • The number of schools visited for monitoring CAPS implementation in technical schools - The target was set at 27 and the Department was able to reach a total of 33, achieving a positive deviation of six (6).

 

  • The number of learners enrolling for the Kha Ri Gude Literacy Campaign in 2016/17 - The target was set at 561 722 (formally adjusted to 295 000) but the Department was only able to reach a total of 123 914, which represents a negative deviation of 171 086. The total number of 171 806 learners (295 000 – 123 914) could not be reached due to the following reasons:
  • Deceased learners were eliminated;
  • Learners with invalid ID Numbers were removed;
  • Recycled learners were removed; and
  • Fictitious learners were removed. The fictitious learners include learners who:
    • were registered but did not attend any classes;
    • had matric; and
    • those who had Grade 9 that were identified by the Auditor-General

 

  • The number of learners obtaining a NSC through the Second Chance Programme - The target was set at 10 000 but the Department was only able to reach an actual output of 5 635, which represents a negative deviation of 4 365. The pilot Programme started in 2015/16 with an estimated target of 10 000 as no baseline was available. The Programme targeted learners writing in March, June and November 2016 as well as in March 2017 (learners who were writing supplementary exams and those who opted for modularisation). For the reporting period of 2016/17, 5 635 learners achieved an NSC in March and November. Data for targeted learners that wrote in June could not be tracked. This was due to the fact that the examination system did not have an indicator for tracking learners who opted for modularisation This resulted in data for the learners that modularised and wrote in June 2016 not being separately recorded.

 

7.1.3     Programme Three: Teacher and Education Human Resources Development and Institutional Development - The purpose of Programme Three is to promote quality teaching and institutional performance through the effective supply, development and utilisation of human resources. Within this programme, of the eight (8) performance indicators, the Department fully achieved six (6) and was unable to achieve two (2) targets set, as follows:

  • The percentage of SGBs that meet minimum criteria in terms of effectiveness (in sampled schools) - The actual output was 91.9 per cent against the set target of 50 per cent, which represents a positive deviation of 41.9 per cent.

 

  • The percentage of schools producing the minimum set of management documents at a required standard – The target was set at 70 percent and the Department was able to reach a total of 90.5 percent. A positive deviation of 20.5 percent.

 

  • The number of Funza Lushaka bursaries awarded to students enrolled for initial teacher education – The target was set at 14 000 and the Department was able to reach a total of 14 343, which represents a positive deviation of 343.

 

  • The number of teachers participating in the English First Additional Language (EFAL) diagnostic tests – The target was set at 10 000 but the Department was only able to reach a total of 2 242. A negative deviation of 7 758.  The reasons for the variation are given in the following bullet below.

 

  • The number of teachers participating in the Mathematics diagnostic tests – The target was set at 10 000 but the Department was only able to reach a total of 1 892. A negative deviation of 8 108. Delays in the administration of tests due to union resistance to testing at provincial level slowed the processes down as did development partner funding delays (EU). When the delayed project restarted at the end of Quarter Three, service providers struggled to meet the requirements of the tender. Resistance by teacher unions (SADTU and NATU) led to delays, especially in KwaZulu-Natal, Free State, Mpumalanga and the North West; despite consultations. All the targeted teachers could not be tested in the short time available as a result.

 

  • The number of schools per PEDs monitored on the implementation of IQMS – The target was set at 18 schools in six PEDs and the Department reached this target with no deviations.

 

  • The number of PEDs monitored on the implementation of PMDS – The target was set at six (6) and the Department reached this target with no deviations.

 

  • The number of PEDs that had their post provisioning process assessed for compliance with the post provisioning Norms and Standards - The target was set at nine (9) and the Department reached this target with no deviations.

 

7.1.4     Programme Four: Planning, Information and Assessment - The purpose of Programme Four is to promote quality and effective service delivery in the basic education system through planning, implementation and assessment. Within this programme, of the 13 performance indicators, the Department achieved five (5), partially achieved three (3) and was unable to achieve five (5) targets set as follows:       

  • The number of ANA reports produced – The target was set at two (2) and the Department was unable to reach this target. ANA reports were not produced in 2016/17 due to the re-modelling of National Assessments (ANA). Proposals on the re-design of National Assessments were developed.

 

  • A bank of Language and Mathematics test items for Grade 3, 6 and 9 developed – The target was set at 100 and the Department was able to develop a total of 701 test items, which represents a positive deviation of 601.

 

  • The number of NSC and Senior Certificate (SC) reports produced – The target was set at five (5) and the Department reached this target with no deviations.

 

  • The number of question papers set annually for NSC and SC – The target was set at 358 and the Department was able to reach a total of 366. A positive deviation of eight (8).

 

  • The number of new schools built and completed through ASIDI – The target was set at 59 but the Department was only able to reach a total of 16, which represents a negative deviation of 43. The Department did not achieve the following targets relating to provision of infrastructure through ASIDI:

 

  • The number of schools provided with sanitation facilities through ASIDI – The target was set at 265 but the Department was only able to reach a total of nine (9). A negative deviation of 256.
  • The number of schools provided with water through ASIDI – The target was set at 280 but the Department was only able to reach a total of ten (10). A negative deviation of 270.
  • The number of schools provided with electricity through ASIDI – The target was set at 620 but the Department was not able to provide electricity to any school through ASIDI.  The variation in respect of the above infrastructure performance targets was mainly attributed to the following:

 

  • Poor contractor performance, resulting in termination of contracts and procurement of replacement contractors;
  • Poor performance by the Professional Service Providers resulting in inferior quality of work which had to be redone;
  • Poor performance by Implementing Agents (IA). The DBE had to terminate some contracts with the IAs or reduced the scope of work due to poor performance;
  • Inclement weather;
  • The difficult terrain in the Eastern Cape make access to sites (for material delivery) difficult during rainy days;
  • Shortage of building material;
  • Construction work disruptions due to community unrest; and
  • The process of rationalisation and mergers of schools on the ASIDI programme also contributed to the set targets not being achieved.

 

The above trend of underperformance in respect of the ASIDI programme continued in the First Quarter of 2017/18.

 

  • The percentage of public schools using the standardized school administration system, SA-SAMS for reporting – The target was set at 98 percent and the Department was only able to reach a total of 95.9 percent. A negative deviation of 2.1 per cent. The deviation between the target and performance was due to schools that were not using SA-SAMS as it was not mandatory.

 

  • The percentage of learners from public schools that are successfully uploaded on to LURITS – The target was set at 99 percent and the Department was only able to reach a total of 95.78 percent. A negative deviation of 3.22 percent.  This was due to the following two reasons:
  • The data quality assurances processes in both developing provincial data warehouses and national data uploads, resulted in delays for LURITS submissions.
  • Since the LURITS system was still a developing system, there were operational data uploading challenges such as:
  • system compatibility issues (CEMIS in the Western Cape);
  • Provincial e- Government precinct connectivity challenges (Mpumalanga);
  • Inadequate capacity servers not coping with LURITS data volumes (Limpopo); and
  • Structural SA-SAMS administration (Gauteng).

 

  • The number of officials from districts that achieved below the national benchmark in the NSC participating in a mentoring programme – The target was set at 30 and the Department was able to reach a total of 36. A positive deviation of six (6).

 

  • The percentage of principals rating the support of district offices as satisfactory - The target was set at 63 percent and the Department was able to reach a total of 72 per cent. A positive deviation of nine (9) per cent.

 

  • Percentage of district assessed against developed criteria – The target was set at 75 percent but the Department was only able to reach a total of 74 per cent. A negative deviation of one (1) percent. A total of 52 out of 70 district directors had been assessed using competency assessments. Two provinces, namely Free State and Limpopo had incumbents appointed on permanent basis without having undergone competency assessment. This accounted for the slight decline from the target moving from the baseline.

 

7.1.5     Programme Five: Educational Enrichment Services - This programme is responsible for developing policies and programmes to improve the quality of learning in schools. Within this programme, of the four (4) performance indicators, the Department achieved three (3) and partially achieved one (1) of the targets set, as follows:

  • The number of schools monitored for the provision of nutritious meals – The target was set at 150 and the Department was able to reach a total of 151 thus exceeding the target by one (1).

 

  • The number of adjudicators, data capturers and Farm school conductors trained in SASCE programmes – The target was set at 900 and the Department was able to reach a total of 1 082. This means that the target was exceeded by 182.

 

  • The number of learners participating in Social cohesion programmes – The target was set at 6 000 but the Department was only able to reach a total of 5 924. There was a negative deviation of 76. The negative deviation was as a result of some signatures that were incorrectly attached, and thus these names were not counted from the onset.

 

  • The number of Hot Spot Schools monitored towards implementation of the National School Safety Framework (NSSF) - The target was set at 46 and the Department was able to reach a total of 48. There was a positive deviation of two (2).

 

7.2 Service Delivery Performance, 2017/18

 

The Department’s performance for the First Quarter as per 2017/18 Annual Performance Plan, was as follows:

 

  • Programme One: Within this programme, two targets were annual targets and one was a quarterly target. The Department fully achieved the First Quarter target of 100 percent of service providers within the procurement unit paid within 30 days.  With regard to the two annual targets set for this programme, the Department had not received misconduct and grievance cases.
  • Programme Two: Within this Programme, there were 15 performance indicators with 10 annual, three quarterly and two bi-annual targets. Of the three quarterly targets set for the First Quarter, the Department partially achieved two targets on the number of schools visited for monitoring CAPS implementation in technical schools and the number of schools per province monitored for the utilisation of ICT resources. The third target of 20 000 learners per quarter obtaining subject passes towards a National Senior Certificate (NSC) or extended Senior Certificate (SC), including upgraded NSC per year, was not met. Only 2 000 learners obtained subject passes towards the NSC or SC as required. This deviation was due to the fact that the results for the March 2017 supplementary examinations were included in the 2016/17 financial year as they were available. The results for the modularised learners were still being processed and would be included as part of the statistics for the following quarter.
  • Programme Three: Within this Programme, there was a total of ten performance indicators with eight annual and two quarterly targets. For the quarter under review, the Department achieved both its set quarterly targets on the number of schools per PED monitored on the implementation of IQMS and the number of PEDs monitored on the implementation of PMDS.
  • Programme Four: This programme had a total of 12 performance indicators with nine annual, two quarterly and one bi-annual target. Of the two quarterly targets, the programme was able to exceed the target on the percentage of learners from public schools that are successfully loaded on to LURITS. The quarterly target on the percentage of public schools using SA-SAMS for reporting was partially met.  As a corrective action, the Department reported that provinces had sent circulars to schools to motivate them to use SA-SAMS for reporting. Notably, following the trend of 2016/17, there was not much progress towards the achievement of the four annual targets regarding the provision of infrastructure through ASIDI. The Department attributes the deviation to delays in the signing of cession agreements. As mitigation, it is reported that concurrence for the appointment of contractors in appropriate schools has been granted and construction is in progress. Regarding water and sanitation, the Department reports that session agreements were signed and construction is underway in the Eastern Cape. The Department further reports that engagements were held with Eskom to fast track the energising of the last batch of schools.
  • Programme: Five: Within this programme, there was a total of four (4) performance indicators with three (3) quarterly and one (1) annual targets. In respect of the set first quarter targets the Department exceeded or achieved the targets on the number of learners, teachers, officials and SGBs participating in social cohesion and gender equity programmes; and, the number of Hot Spot Schools monitored towards implementation of the NSSF. The target on the number of schools monitored for the provision of nutritious meals was partially met.

 

7.3. Assessment of the 2016/17 performance of the Department by other Entities

 

7.3.1     Progress report on the implementation of the Medium-Term Strategic Framework (MTSF) 2014-19 by the Department of Planning, Monitoring and Evaluation (DPME)

 

The DPME in its presentation to the Standing Committee on Appropriations on 15 August 2017, regarding the midterm review of progress on the implementation of the MTSF, noted several areas where the DBE is making progress. These include that the basic education system is on an upward trend with regard to learner performance. The DPME highlighted that the matric pass rate has improved from 70.7 per cent in 2015 to 72.5 per cent in 2016. It is also noted that the SACMEQ IV study results showed that for the first time, South African learners at the Grade 6 level achieved Mathematics scores above the centre point of 500 points. In the 2015 TIMMS results released in November 2016, South African learners showed the largest improvement of 87 points in Mathematics, and 90 points in Science. At the national level, Bachelor passes have been increasing over the years though not reaching the target of 220 000 by 2016. Bachelor passes increased to 162 374 in 2016 from 15 752 in 2014.

 

Key challenges noted include that the quality of educational outcomes remains poor. Although the number of Bachelor passes has increased, the set target of 34 per cent by 2019 is unlikely to be realized. Physical Science and Mathematics scores are also unlikely to reach the 2019 targets. The DPME also highlighted sectoral challenges relating to weak teacher content knowledge, as well as institutional functionality due to the lack of capacity by principals, deputies, and heads of Departments (HODs). The Portfolio Committee has made similar observations and is focusing its oversight on these issues.

 

7.3.2 Key issues raised by the Financial and Fiscal Commission pertaining to the performance of the Department

 

The Financial and Fiscal Commission (FFC) noted that the Department should prioritise ECD and ensure high throughput rate across all grades. The FFC also concurred with the Department and the Portfolio Committee’s assessment that the Department had achieved most of its performance targets, with the exception of the Planning, Information and Assessment Programme which achieved only 38 per cent of its targets in 2016/17. The Accelerated School Infrastructure Delivery Initiative (ASIDI) programme was largely responsible for the low achievement. The FFC further noted that spending performance on conditional grants other than the school infrastructure grant was generally good, with the exception of the Maths, Science and Technology Grant.

 

Regarding the ASIDI programme, the FFC was concerned that for the 2016/17 financial year, the achievement of performance targets for this programme ranged from 27 per cent (i.e. new schools built) to 0 per cent of the planned target (i.e. schools provided with electricity). Even more concerning was the imbalance between the targets achieved (0 – 27 per cent) and the budget spent (60 per cent). The FFC further noted similar findings raised by the AGSA, including that an amount of R623 million in irregular expenditure was reported by the DBE for the 2016/17 financial year and that in most cases, irregular expenditure related to Implementing Agents appointed by the DBE to carry out the ASIDI programme.

 

With respect of the Education Infrastructure Grant (EIG), the FFC highlighted that the average spending on the programme was 96.4 per cent for the period 2011/12 – 2016/17, significantly better than the 60.5 per cent average for the ASIDI programme over the same period. The Commission was concerned about the inability of certain provinces (Free State, Limpopo and Mpumalanga) to meet the minimum threshold for receiving the incentive and the possibility of having parts of the incentive remain unallocated.

 

The Commission noted that to address the ASIDI’s poor performance, the programme would be merged into the Education Infrastructure Grant from 2018/19 financial year. The FFC concurred with the Portfolio Committee’s concern raised previously that merging the two grants may not necessarily improve performance in education infrastructure, unless the underlying issues of poor performance were also addressed.

The Portfolio Committee has noted the recommendations of the FFC on Basic Education for 2018/19 Division of Revenue which include the following:  

  • Education policy and budget needed to take a holistic and long tern view of the entire pipeline
  • Allocations of funding at the aggregate level was evenly distributed but becomes more unequal as the budget cascade down schools
  • There was a need for a delicate balance between COE allocation and other education inputs
  • Funding was important but was not the only condition for improving education outcomes (there was a need to address factors in and outside the classroom)
  • South Africa may have achieved equal treatment of leaners but not necessarily equitable education. Funding framework disregard historical disparities and other important constraints which affect disadvantaged schools
  • The Commission would like to see the Department implement more stringent measures to hold implementing agents accountable for poor performance
  • Due consideration should be given to the monitoring and implementation of maintenance norms for school infrastructure as long term costs to the fiscus and the economy of delaying maintenance were high.

 

8.         Statutory Bodies

 

8.1                    South African Council for Educators (SACE)

 

The South African Council for Educators is established under the SACE Act (Act No. 31 of 2000). The core mandate of the South African Council for Educators is the following:

  • Compulsory registration of all educators;
  • Management of the Continuing Professional Teacher Development (CPTD) system and promoting and developing the teaching profession; and
  • Reviewing and maintaining ethical standards.

 

SACE reported that Ms E Mokgalane had been appointed as the new CEO with effect from the 1st August 2017. The Minister had appointed the new Council for the 2017-2021 term of office, with effect from the 1st August 2017 as well. Overall, the Council performed fairly well during the period under review, and performance could still be enhanced in the 2017/18 financial year.

 

The Council also brought the following to the attention of the Portfolio Committee:

  • There were some under and partial achievement of certain indicators (Programme 2 (Ethics) and Programme 3 (CPTD System) in particular.
  • Programme 3 was suspended at some stage due to a reduced funding as compared to the promissory note received a year before, from the Department as well as the late transfer of 2016/17 funds to SACE in February 2017.
  • The Council submitted five names to the Minister, for purposes of appointing one of them as the Chairperson in line with the SACE Act. In the interim, the CEO is acting as the Chairperson and the Executive Committee is in place to deal with governance matters in between Council Meetings. 

 

8.1.1     Financial Report

Table 1: Statement of Financial Position as at 31 March 2017

Figures in Rand

Note(s)

2017

2016

Assets

     

Current Assets (Other financial assets)

4

-

60,978,738

Receivables from exchange transactions

5

1,576,999

1,609,344

Cash and cash equivalents

6

45,631,089

35,484,465

   

47,208,088

98,072,547

Non-Current Assets (Property, plant and equipment)

2

64,171,080

3,329,154

Intangible assets

3

1,717,176

2,072,056

   

65,888,256

5,401,210

Total Assets

 

113,096,344

103,473,757

Liabilities

     

Current Liabilities (Payables from exchange transactions)

10

1,927,030

1,381,664

Unspent conditional grants and receipts

7

107,766

2,346,893

Provisions

8

3,473,987

3,044,470

Other liability

9

155,560

-

   

5,664,343

6,773,027

Total Liabilities

 

5,664,343

6,773,027

Net Assets

 

107,432,001

96,700,730

Reserves (Building reserve fund)

 

-

63,702,019

Accumulated surplus

 

107,432,001

32,998,711

Total Net Assets

 

107,432,001

96,700,730

 

 

Analysis of Financial Position - SACE’s total assets increased by 28 per cent while the non-current assets increased by 95 per cent in relation to reduction of 52 per cent of current assets (the settlement of the purchase price of the building on registration). There was a reduction in current liabilities by 16 per cent and a net current increase of 11 per cent. The SACE accumulated surplus stood at 225 per cent (with the dissolution of building reserve account and increase in non-current assets).  SACE enjoyed a positive financial position.

 

Table 2: Statement of Financial Performance

Figures in Rand

Note(s)

2017

2016

Revenue

     

Revenue from exchange transactions

     

Revenue

 

60,831,018

59,624,290

Other income

 

417,755

300,680

Interest received

13

2,280,056

1,591,378

Total revenue from exchange transactions

 

63,528,829

61,516,348

 

 

 

 

Revenue from non-exchange transactions

     

Transfer revenue (Government grants)

14

7,239,127

9,210,470

Total revenue

11

70,767,956

70,726,818

 

 

 

 

Expenditure (Employee benefit costs)

15

(34,456,252)

(31,932,095)

Depreciation and amortisation

 

(2,032,953)

(1,717,394)

Lease rentals on operating lease

 

(559,723)

(2,010,285)

Debt Impairment

 

(398,283)

(13,840)

Operating Expenses

16

(22,597,546)

(25,525,498)

Total expenditure

 

(60,044,757)

(61,199,112)

Gain/ (loss) on disposal of assets

 

8,068

(67,529)

Surplus for the year

 

10,731,267

9,460,177

 

Analysis of Financial Performance - Revenue increased by three per cent (interest and registration fees). There was a reduction on the CPTD subsidy due to financial constraints. The total revenue of SACE remained constant. Personnel expenditure increased by 8 per cent and the total expenditure reduced by 2 per cent. SACE had a surplus of R10 million.

 

Table 3: Cash Flow Statement

Figures in Rand

Note(s)

2017

2016

Cash flows from operating activities

     

Receipts

     

Membership, registration, reprints and other receipts

 

61,254,895

59,984,046

Grants

 

7,239,127

9,210,470

Interest income

 

2,280,056

1,586,354

   

70,774,078

70,780,870

Payments

     

Employee costs

 

(34,364,909)

(31,243,952)

Payment suppliers and others

 

(24,884,916)

(21,690,316)

   

(59,249,825)

(52,934,268)

Net cash flows from operating activities

19

11,524,253

17,846,602

Cash flows from investing activities

     

Purchase of property, plant and equipment

2

(62,201,205)

(2,446,468)

Proceeds from sale of property, plant and equipment

2

9,747

(28)

Purchase of other intangible assets

3

(320,469)

(352,626)

Proceeds from sale of other intangible assets

3

-

9

Movement in deposits held in trust

 

60,978,738

(60,978,738)

Net cash flows used in investing activities

 

(1,533,189)

(63,777,851)

Cash flows from financing activities

     

Movement in AFTRA deposits

 

155,560

-

Net increase/(decrease) in cash and cash equivalents

 

10,146,624

(45,931,249)

Cash and cash equivalents at the beginning of the year

 

35,484,465

81,415,714

Cash and cash equivalents at the end of the year

6

45,631,089

35,484,465

 

Analysis of Cash Flow Statement – The cash inflow into SACE remained the same for the two reporting periods. Net cash flows decreased by 35 per cent (due to increase in payments). The dissolution of the trust account was related to the increase in assets. AFTRA deposits were temporarily held in the SACE account while AFTRA was in the process of opening its own account facilities. SACE had a net increase in cash and cash equivalents of R10 million. Cash and cash equivalents on the 31 march 2017 was R45.6 million.

 

8.1.2  Auditors Report – SACE received an unqualified audit opinion with emphasis of matters on the following:

  • Assessment of useful lives of non- current asset were omitted in error – The error had already been corrected
  • Reporting on CPTD was inconsistent with planning and reporting standards - The indicators would be reviewed accordingly and monitoring of reporting would be improved

 

8.1.3     Programme Performance

 

8.1.3.1  Programme 1: Registration of Teachers - Within this programme SACE had three performance indicators which were all over-achieved as follows:

  • The number of newly registered educators in the reporting period – The target was set at 20 000 and SACE was able to reach a total of 37 977. An overachievement of 17 977.

 

  • The number of registration documents updated – The target was set at 40 000 and SACE was able to reach a total of 46 088. An overachievement of 6 088.

 

  • Vetting and verification (new applicants) - The target was set at 60 000 and SACE was able to reach a total of 84 065. An overachievement of 24 065.

 

8.1.3.2  Programme 2: Ethics - Within this programme SACE had only one performance indicator which SACE was able to only partially achieve as follows:

  • The number of concluded cases as measured against the number of cases received for the year - The target for the expected number of cases including the 191 cases carried over from 2015 stood at 784. SACE was able to finalise 536 cases (including those carried over from 2015). A total of 151 cases were investigated physically and were in the process of being finalised.  A total of 248 cases could not be finalised and were being processed.

SACE was recruiting more provincially-based panellists in order to address the issue of carrying over some cases to the next financial year. SACE observed with great concern, the current educator misdemeanours and high profile cases pertaining to corporal punishment and sexual-related matters in particular. SACE responded and addressed these issues as follows:

  • A media statement was released;
  • A number of radio interviews were held for engagement and educational purposes;
  • Collaboration with respective Provincial Education Departments on the matters;
  • Charges had been laid accordingly, and investigations and hearings are in progress;
  • SACE conducted research on factors that enhance the sexual-related cases between teachers and leaners – the report would be released in November 2017 after Council approval.

 

8.1.3.3  Programme 3: Professional Development - Within this programme SACE had seven performance indicators and was able to fully achieve three, partially achieve three and under-achieved one indicator as follows:

  • The number of educators orientated and signed-up for participation in the CPTD system – The target was set at 160 000 PL1 Primary and Secondary schools. SACE was only able to reach a total of 87 702 schools. A negative deviation of 72 298.
  • Orientate final year student teachers - The target was set at 7 500 final year student teachers being orientated. SACE was only able to reach a total of 4 790 students. A negative deviation of 2 710.00.
  • The percentage of SACE registered Educators not signed up for the CPTD System – The target was set at eight (8) per cent principals and deputy principals (2 781). SACE was able to reach a total of 0.89 per cent (311 principals and deputy principals). This was a positive deviation of 7.11 per cent (156).
  • The percentage of signed up teachers who engage in three types of Professional Development (PD) Activities (Type 1: Self-Initiated PD activities, Type 2: School Initiated PD Activities and Type 3: Externally Initiated PD Activities) - The target was set at 55 per cent for Type 1 (83 208), 50 per cent Type 2 (75 928) and 35 per cent Type 3 (63 650). SACE =performed as follows:
  • Type 1 – 61 per cent achievement (50 756). A positive deviation of six (6) per cent (4 993 teachers)
  • Type 2 – 29 per cent achievement (37 964). A negative deviation of 21 per cent (15 945).
  • Type 3 – 10 per cent achievement (6 365). A negative deviation of 25 per cent (15 913).
  • The number of Approved Professional Development Providers subjected to quality assurance by SACE in a financial year - The target was set at 100 providers.  Only four (4) providers were subjected to quality assurance. There was a deviation of 96 as SACE could not access all training schedules.
  • The number of new Professional Development Providers processed in the quarter of submission (in terms of approved status, not approved status, rejected and in process) - The target was set at 100 providers processed. SACE was able to reach a total of 169, resulting in a positive deviation of 69 provider’s processes.
  • The number of new Professional Development Activities Processed in the quarter of submission (in terms of endorsed status, not-endorsed status, rejected and in process) - The target was set at 550 activities processed. SACE was able to process 2 082 and endorse 1 948 activities. A positive deviation of 1 398 activities.

The indicator on quality assuring the providers onsite, was not achieved due to the focus on the providers and not the specific PD programmes. This indicator had since been amended in the 2017/18 APP to re-focus on the onsite quality assurance of the PD activities and programmes. Similarly, there was poor performance on the indicators that were meant to track the extent at which the individual educators, schools and providers were utilizing the CPTD-Information system for uploading PD Points, Report PD Participation and Signing-up. The reporting was dependent largely on the finalization of the upgraded CPTD-Information System and its Business Intelligence Tool which were delayed by funding. The indicators on signing-up and participation in professional development were partially achieved because of the three main reasons:

  • Funding to conduct the sign-up sessions;
  • The audited report focused on the data that was captured into the CPTD Information System by the 31st March 2017. However, Kwazulu-Natal and Eastern Cape delayed the sending of 42 345 forms to the office, for capturing prior to the close of the financial year; and
  • Access to the Higher Education Institutions was a challenge due to the #feesmustfall campaign. This had a bearing on the sign-up of student teachers.

 

8.1.3.4  Programme 4: Professional Standards – Within this programme, SACE had two strategic objectives namely:

 

  • To enhance teacher preparation and professional practice – The planned target was developing draft professional designations for principals, deputy principals and Heads of Department to be finalised for the consultation processes with employers. Unfortunately, this was not achieved in keeping with international professional standards research findings, which indicated that the consultation and writing process should not be rushed. Secondly, there was no alignment of the SACE professional standards and designation processes with the standards initiatives in the Department of Basic Education and Department of Higher Education and Training.
  • Set and implement professional standards – The target for the year under review was for draft professional standards to be completed for consultation as well as public comments processes with stakeholders. This was only partially achieved as the original completion dated and target had been extended in consultation with stakeholders and partners, in consideration of the following:
    • The international professional standards research findings had shown that the consultative process should not be rushed and that the envisaged 12-month period was not sufficient.
    • Additionally, the development of the Departments professional practice standards for inclusive education, and also the development of subject standards through the Department of Higher Education and Training’s Primary Teacher Education process, provide the opportunity for a broader national collaboration.

 

8.1.3.5  Programme 5: Research – Within this programme, there were only two performance indicators as follows:

 

  • The number of research reports produced – The target for 2016/17 was six reports and SACE was able to over-achieve on this target with a total of seven reports produced. SACE collaborated with various organisations for more research outputs.
  • The number of professional magazines/journals produced - The target for 2016/17 was two but SACE under-achieved and was only able to produce one. The second one was awaiting printing at the end of the financial year.

 

8.1.3.6  Programme 6: Advocacy and Communication -  In the 2016/17, SACE was able to spread and cover most of the provinces. SACE managed to participate in a number of national and international stakeholder events and also had engagements that were meant at streamlining and ensuring the efficient functioning of SACE as an institution. SACE also hosted three fun walks for teachers in Pretoria, Durban and Bloemfontein under the theme “Healthy body Productive Teacher”. SACE also participated in TASP; a multi stakeholder grouping who it chaired with the Department and Basic Education whose main aim was to look at strategies of appreciating and supporting teachers in the country. The Council also hosted the World Teachers Day Celebrations in October 2016. SACE was the affiliate member of the African Forum for Teacher Regulatory Authorities (AFTRA) on the continent and together with Zambia are the two countries in the SADC region which had fully established and operational Councils.  The Council was also chairing this forum and had been tasked with ensuring that all African Countries establish similar organizations with the sole purpose of enhancing the quality of Teaching and Learning in AFRICA.

 

8.1.4     Portfolio Committee Observations

 

  • The Portfolio Committee noted that SACE could only partially achieve on the target for sign-up sessions due to funding restrictions. Members noted that SACE had a R10 million surplus and queried why this was not utilised to do the sign-ups.
  •  Members were of the view that the sexual offences register was not adequate as many offenders continued employment within the system. Members queried the role played by SACE in policing these offenders as well as the necessary capacity in this division.
  • Members were alarmed with the number of cases not finalised. Members queried the amount of cases that were carried over from the previous year.
  • Members queried whether SACE had conducted any performance evaluations in the recent past – and details pertaining to such evaluations.
  • Members raised concern over the number of unregistered educators in the system – and the accessibility of SACE throughout the country.
  • Members also queried whether measures to protect learners where effective since cases remained unresolved for lengthy periods of time.
  • Members were curious as to the plan of action to address findings of the AGSA.
  • In respect of the recent case of learners being impregnated by educators, Members queried the role of SACE and steps to verify such allegations. Members further queried whether SACE ran their own investigations or relied on court findings. Members also queried the support and assistance to affected learners.
  • Members queried the capacity at its provincial offices and plans to fill any vacant positions in these offices.
  • Members queried the turnaround plan to deal with the number of outstanding cases.

 

8.1.5     Reponses from SACE

 

The Council indicated that the CPTD budget reduction was received from the Department who sourced the funds from the EU which was not a stable situation. SACE was promised a certain amount for which SACE budgeted for but was not the amount eventually received from the Department. SACE would have to adjust its capacity to ensure proper utilisation of the funds in all provinces.

 

In respect of the SACE provincial offices, SACE had started these in the Western Cape, Eastern o render its services. With staffing SACE only had a manager, clerical staff and a field worker. SACE was considering increasing the number of field workers in the provinces to be more effective. SACE was also looking to ensure the re-evaluation of all its assets.

 

Regarding the performance evaluation for 2016/7, SACE decided not to award any performance award to any staff based on dissatisfaction with staff performance generally. SACE was in the process of advertising all critical post as a priority.

 

SACE agreed and was disturbed with concerns around sexual offences and was looking at reasons why these cases continued to emerge in schools. The Sexual Offences Register did exist and the Council had received complaints from Provincial Education Departments where they had instituted disciplinary procedure against educators without any interaction with SACE. Much of the unresolved cases pending were due to evidence not being available or capacity constraints within SACE. The Council had made improvements in some provinces to realign professional development structures.

 

A total of 17 000 practicing educators were currently not registered and SACE was engaging with these individuals and their employers. The provisionally registered educators were made up of fourth-year University students who, once qualified, would move to full registration.

 

8.1.6     Portfolio Committee Recommendations

 

Based on the observations made above, the Portfolio Committee requests that the Minister ensure that the SACE consider the following recommendations:

 

  • Submit a full and detailed organogram of the organisation (including all positions filled and vacancies).
  • SACE consider the regularisation of engagements with AGSA on a quarterly basis
  • Submit an action plan, with reasonable targets and time-frames in response of actions on issues raised by the Auditor-General.

 

8.2  The Council for Quality Assurance in General and Further Education and Training (Umalusi)

 

Umalusi was able to achieve an overall performance status of 79 per cent against 21 per cent unachieved. The performance status per programme was as follows:

Programme 1 – Umalusi achieved 83 per cent and unachieved 17 per cent

Programme 2 – Umalusi achieved 80 per cent against 20 per cent unachieved

Programme 3 – Umalusi achieved 67 per cent against 33 per cent unachieved

 

8.2.1     Financial Report

 

Table 1: Statement of Financial Position

 

2017 (R)

2016 (R)

Assets

 

 

Current Assets

 

 

Cash and cash equivalents

66,419,451

56,040,887

Receivables from exchange transactions

5,746,107

5,700,417

 

72,165,558

61,741,304

 

 

 

Non-Current Assets

   

Property, plant and equipment

33,438,151

35,475,312

Intangible assets

55,620

43,117

Operating lease asset

17,160

98,821

 

33,510,931

335,617,250

Total Assets

105,676,489

97,358,554

 

 

2017 (R)

2016 (R)

Liabilities

 

 

Current Liabilities

 

 

Payables from exchange transactions

15,912,541

112,894,013

Total Liabilities

15,912,541

112,894,013

Net Assets

89,763,948

84,464,541

 

 

 

Reserves

   

Revaluation reserves

8,484,261

8,484,261

Accumulated surplus

81,279,687

75,980,280

Total Net Assets

89,763,948

84,464,541

 

 

2017 (R)

2016 (R)

 

 

 

Revenue

145,943,741

140,199,305

Revenue from exchange transactions

27,265,741

27,494,305

Revenue from non-exchange transactions

118,678,00

112,705,00

 

 

 

Other income

2,640,470

2,072,144

Investment income

4,129,17

3,764,20

Net Revenue

152,713,387

146,035,656

 

 

2017 (R)

2016 (R)

Expenditure

 

 

Other operating expenses

(16,091,389)

(18,358,802)

Certification expenses

(3,269,931)

(5,001,706)

Communication expenses

                         (9,319,189)

(4,056,277)

Consulting and professional fees

(3,678,109)

(5,361,277)

Depreciation, amortisation and impairments

(3,221,461)

(3,487,175)

Moderator and verifier costs

(30,987,315)

(28,779,095)

Personnel costs

(59,092,139)

(53,948,292)

Printing and stationery

(3,849,456)

(2,529,693)

Travel and accommodation - local

(17,904,992)

(19,779,294)

 

 

 

Net Expenditure

(147,413,981)

(141,301,611)

 

In respect of accumulated surplus, the Council approved a tender amounting to R36,420,108 for the renovations of 41 Van Reyneveld Street, adjacent to the current building as committed funds.  The Department of Basic Education assisted with the request to retain surpluses and had been granted by National Treasury. A revised budget for 2017/18 was submitted to the Department.

 

Regarding irregular expenditure, for the current year Umalusi awarded a contract extension to a supplier with a non-tax compliant status (R319,975). Umalusi also acquired goods without going through a competitive process of sourcing three quotes (R140,547). Umalusi also had a renewal of a contract without going through a competitive process of sourcing three quotes (R37,278). These were investigated and no official was found liable in terms of the law for the irregular expenditure. A process of progressive disciplinary steps was followed by management. Umalusi received condonation to proceed as per National Treasury Guideline on Irregular Expenditure issued April 2015. All SCM issues identified had been recorded and would be monitored in terms of the continuous improvement plan.

 

Umalusi had appointed a SCM specialist to ensure SCM policies and processes were compliant to legislation with proper implementation of policies and procedures. The external auditors raised the following findings, amongst others, in the management report:

  • accreditation incomes recognition;
  • irregular expenditure monitoring;
  • supply chain management policy issues; and
  • internal controls regarding the management of performance reporting.

Management was already in the process of addressing the above findings in the current financial year.

 

8.2.2          Programme Performance

 

8.2.2.1  Programme 1: Administration – Programme 1 covered the following sub-programmes:

  • Governance and Office of the Chief Executive Officer (GOCEO);
  • Public Relations and Communications (PR and Comms.);
  • Information and Communication Technology (ICT);
  • Finance and Supply Chain Management (F&SCM); and
  • Human Resource Management and Development (HRM&D).

 

Within this programme Umalusi had six performance indicators and was able to record achievement on the following:

  • Financial Audit outcomes – The target set was 100 per cent and Umalusi was able to reach this target.
  • HR performance management - The target set was 98 per cent and Umalusi was able to reach this target at 98 per cent.
  • Communication platform utilisation - The target set was 100 per cent and Umalusi was able to achieve the target.
  • ICT Infrastructure - The target set was 100 per cent and Umalusi was able to reach achieve the target.
  • ICT systems utilisation - The target set was 100 per cent and Umalusi achieved the target.

Umalusi under-achieved on the target for payment of service providers within 30 days. The target set was 100 per cent but Umalusi was only able to manage 99 per cent. This was due to payments being withheld where suppliers had a non-compliant tax status at payment stage. In future Umalusi would ensure that contract management policies would be revised to address procedures for contract renewal. The compliance of suppliers with CSD requirements, including tax compliance, had to be procedurally verified upon engagement only. Standard operating procedures would be reviewed in line with advice from National Treasury.

 

8.2.2.2  Programme Two – Qualifications and Research: Programme Two covered the following sub-programmes:

  • Qualifications, Curriculum and Certification; and
  • Statistical Information and Research.

 

Within this programme Umalusi had five performance indicators and was able to record achievement on the following indicators:

  • Registration of new qualifications - The target set was 100 per cent and Umalusi was able to reach this target at 100 per cent.
  • Review of existing qualifications - The target set was 100 per cent and Umalusi was able to reach this target at 100 per cent.
  • Publication of research reports - The target set was 100 per cent and Umalusi was able to over-achieve this target at 133 per cent.

Umalusi under-achieved on the following two indicators:

  • Certification of learner records – There were no targets set for this indicator. The certification indicator had been re-worded to percentage of error-free learner records for which a certificate is printed, annually”.
  • Verification of learner achievement - The target set was 100 per cent and Umalusi was only able to achieve 83 per cent. This was due to verification clients submitting fewer request, including SAQA which terminated its contract with Umalusi. The verification indicator had been re-worded to “percentage of verifications completed within two working days”.

 

8.2.2.3  Programme Three – Quality Assurance and Monitoring: Programme Three covered the following sub-      programmes:

  • Quality Assurance and Assessment (QAA); and
  • Evaluation and Accreditation.

                                     

Within this programme Umalusi had three performance indicators of which Umalusi was able to record achievement on the following indicators:

  • QAA reports - The target set was 100 per cent and Umalusi was able to over-achieve target at 108 per cent.
  • Accreditation report - The target set was 100 per cent and Umalusi was able to reach this target at 100 per cent.

Umalusi under-achieved on the moderation of examination question papers. The target set was 100 per cent but Umalusi was only able to achieve 93 per cent. Some Assessment Bodies did not submit back-up papers and used question papers which were approved in the previous financial year. In future, the assessment bodies would be encouraged to set back-up papers. The indicator was restructured for the 2017/2018 year, such that it was not dependent on Assessment Bodies.

 

8.2.3           Concluding Statements

  • Errors identified on the indicators were reported and corrections were approved by the Minister.
  • Standard Operating Procedures were in place.
  • Performance outputs were verified on a quarterly basis – the systems needed to improve at unit level.
  • Achievement of APP targets was part of SMS’ Performance Agreements.
  • The Audit Tracking Register was adding value in reducing the number of findings raised by Internal and External Auditors.
  • Umalusi had strengthened its capacity on the management of Performance Information – a performance information specialist had been appointed in the Audit and Risk Committee.

 

 

8.2.4            Portfolio Committee Observations

  • Members raised a concern over the irregular expenditure in respect of awarding contracts to a supplier with a non-tax compliant status. Members queried how Umalusi could have allowed this and queried how it was that no official was found liable for this. Members urged Umalusi to practice consequence management in this regard.
  • Members were interested on whether Umalusi trusted the credibility of the auditors they used.
  • Members had challenges with understanding the Umalusi organogram and the calculation of posts approved versus post filled. It seemed the figure for semi-skilled approved posts also did not add up.
  • Members queried whether the terminations alluded to were contract terminations, resignations or fired.
  • Members queried how the decreased budget impacted on the work of Umalusi in respect of service delivery.
  • Members were interested in the Umalusi action plan/turnaround strategy to reach a clean audit going forward.
  • Members raised concern over the evaluation of private institutions and how Umalusi evaluated these private institutions and educators.
  • Members raised the challenges with the Standardisation processes and queried whether Umalusi had considered that learner marks dropped due to factors other than the standard of a question papers.
  • Members noted that there had been rumours of protest action against the final examinations if these examinations were to be written in more than one language. Member needed clarification on the issue.
  • Members also queried whether Umalusi was satisfied with examination preparedness for 2017 – and whether Umalusi had made any recommendations to the Department on issues pertaining to examination preparedness.

 

8.2.5     Responses from Umalusi

 

Umalusi indicated that they were working tirelessly towards a clean audit by ensuring that the Council went back to basics and ensure alignment of its policies. In respect of the irregular expenditure, Umalusi had done all the necessary investigations and had explained the ramification to officials who gave declarations. Although no official was found legally liable in law there were progressive disciplinary steps taken against all officials involved.

 

The figures presented in the Human Resources report was challenging to quantify as some posts were only filled for certain periods while other for longer. Umalusi would work to correct these figures. All terminations mentioned had been due to resignations.

 

In respect of the preparedness for the final examinations, Umalusi would be calling a media brief on examination preparations for 2017.

 

8.2.6     Portfolio Committee Recommendations

 

Based on the observations made above, the Portfolio Committee requests that the Minister ensure that Umalusi consider the following recommendations:

  • Produce a turnaround plan to deal with the audit findings and worked towards a clean audit going forward.
  • Ensure that consequence management be implemented against officials implicated in irregular expenditure.

 

9. Portfolio Committee Observations

 

9.1 Department of Basic Education

 

9.1.1 Technical issues, overall performance and reporting

 

  • As in the previous year, the Portfolio Committee welcomes the quality and depth of information reported in the 2016/17 Annual Report, acknowledging the considerable work the Department covered during the year under review and the effort that has been expended in the reporting.

The Committee is however concerned that the performance of the Department in meeting its set targets has declined from fully achieving 87.1 per cent in 2015/16 to fully meeting 68 per cent in the 2016/17 financial year. Similarly, overall actual expenditure of the Department’s allocated budget has decreased from 97.7 per cent in 2015/16 to 95.58 per cent in 2016/17. 

 

  • In terms of reporting, the Portfolio Committee appreciates the effort of the DBE in continuing to ensure that its plans and programmes enjoy greater alignment with those of the NDP and the MTSF. However, the Committee advices the Department to progressively include in its future APPs or as part of the sector’s customized indicators of the Provincial Education Departments (PEDs), all performance indicators contained in the MTSF that are not currently included. These include those identified by the AGSA as reported by the Portfolio Committee in its 2017 budget vote report.

 

9.1.2 Audit Outcomes

 

  • The Portfolio Committee is concerned with the shortcomings identified in the 2016/17 audit outcomes as alluded to by the AGSA. Specific concerns include the material underspending of R875 million in respect of the ASIDI programme; recurring findings of irregular expenditure, and fruitless and wasteful expenditure; the reliability of reported information in respect of Programme 4; material misstatements on the reported performance information of Programmes 2 and 4; non-compliance issues around annual financial statements; persistent internal control deficiencies, including leadership oversight; and inadequate consequence management.

 

The Committee is encouraged that steps are being taken to prevent a recurrence of the identified negative audit findings, which include the strengthening of capacity in the internal audit and the Audit Committee through the appointment of new leadership. The Committee notes the AGSA’s report that the audit performance of the Department improved in the last quarter of the 2016/17 financial year. The Committee would expect progress updates on the performance of the internal audit and the implementation of the Department’s remedial actions. 

 

  • The Committee notes with concern the report from the AGSA that they had difficulty accessing and receiving documentation from the Department when requested.

 

  • The Portfolio Committee is of the view that, because of the size of the Department, they should consider expanding its Audit Unit to deal more effectively with the challenges faced.

 

9.1.3 Financial issues

 

  • As in the previous financial year, the Portfolio Committee is concerned regarding underspending in Programmes 2 and 4 mainly on the Kha Ri Gude and the ASIDI programmes respectively. The Committee urges the Department to fast track the implementation of the necessary measures to ensure that underspending does not recur.

 

  • The Portfolio Committee acknowledges the need for fiscal prudence in public spending and appreciates the directive for departments to reprioritise their spending within the existing expenditure ceiling. However, the Committee notes with concern that approximately 104 000 learners still do not benefit from scholar transport. The Committee has expressed itself on numerous occasions through oversight reports, on the need for all qualifying learners to benefit from this service. The Committee thus urges relevant authorities to fast track the implementation of plans to allocate ring-fenced funds to be utilised for learner transport.

 

  • The Committee requests that the Department provides details on the disbursement and utilisation of the R177.1 million allocated towards the maintenance of the schools that were set alight in Vuwani in 2016.
  • The Committee requests details on the withholding of funds tranches relating to the Education Infrastructure Grant and their redirecting from the Free State to other provinces, as reported in the Department’s Annual Report.
  • The Portfolio Committee notes that the Department’s expenditure on compensation of employees for the First Quarter of 2017/18 was higher than projected by R3.1 million, mainly due to the extension of contracts to finalise projects. The Committee urges the Department to implement its commitment to terminate the remaining contract posts when they expire, in order to stay within the ceiling for compensation of employees for 2017/18.
  • Drawing from its interaction with the Financial and Fiscal Commission, the Portfolio Committee urges the Department to give due consideration to the monitoring and implementation of maintenance norms for school infrastructure as long term costs to the fiscus and the economy of delaying maintenance are high.
  • The Portfolio Committee further urges the Department to take the necessary to ensure that the budget follows learners, including those who migrate to other provinces.

 

9.1.4          Performance per Programme

 

                                    9.1.4.1  Programme 1: Administration

 

  • The Portfolio Committee welcomes the Department’s improved performance score of 14 per cent in the 2016 Management Performance Assessment Tool (MPAT), which measures the performance of government departments on governance, management and administration.

 

9.1.4.2  Programme 2: Curriculum Policy, Support and Monitoring

 

  • The Portfolio Committee notes that although the sector has progressed significantly in providing adequate LTSM, universal coverage, that is, every learner having a textbook for every subject, remains a challenge.

 

  • The Portfolio Committee is concerned that only 5 291 of the 23 390 Grade R practitioners (22.6 per cent) have the minimum National Qualification Framework (NQF) Level 6 qualification. The Committee notes that the improvement of the quality of Early Childhood Development including Grade R, is a key priority towards the achievement of the National Development Plan and thus should receive special attention.

 

  • The following findings of the AGSA’s 2016/17 audit regarding Grade R require the attention of the Department:
  • Adequate monitoring processes and information systems were not established and/or implemented for all critical success factors to enable adequate provisioning of Grade R in schools
  • Although there was an increase in funding for Grade R since the last AGSA’s audit, five of the nine PEDs still did not fund Grade R learners at the required 70 per cent of grade 1 learners (FS, KZN, LP, MP and WC)
  • All nine of the PEDs employed Grade R teachers that were not adequately qualified up to NQF level 6.
  • Grade R policies were in place in two of the PEDs (MP and WC)
  • In five of the PEDs classrooms were not adequately sized to accommodate the number of learner

 

  • The Portfolio Committee welcomes the training of educators for teachers for the deaf but raises concern over issues around the lack of resource material, linguistic errors in training manuals and inadequate training for deaf teacher assistance to teach content.
  • The Portfolio Committee notes the report that progress is being made in the roll-out of ICT in schools but urges the Department to intensify its monitoring to ensure that access to ICT resources reach 100 per cent by 2019, as required by the Medium Term Strategic Framework.

 

  • Members query the amount of disabled learners participating in the Second Chance Matric Programme as well as the face-to-face tuition. The Portfolio Committee urges the Department to ensure that the Programme is inclusive.

 

9.1.4.3  Programme 3: Teacher and Education Human Resources Development and Institutional Development

 

  • The Portfolio Committee welcomes the Department’s performance in respect of the appointment of educators aged 30 and below. The Committee noteds that a total of 14 835 educators in this age category were appointed during the period under review, exceeding the 10 000 target of the MTSF and Action Plan to 2019.

 

  • The Portfolio Committee remains concerned regarding the underperformance in relation to the targets on the number of teachers who have written the Self-Diagnostic Assessments for English First Additional Language (EFAL) and Mathematics. The Committee notes that although there is an improvement compared to 2015/16, the variance between the indicator target and the departmental achievement remains high.

 

  • Members remain concerned regarding the slow progress in the effective tracking of teachers’ absenteeism.

 

  • The Portfolio Committee urges the Department to fast track the effective implementation of competency assessments in all the Provincial Education Departments.

 

9.1.4.4  Programme 4: Planning, Information and Assessment

 

  • The Portfolio Committee is deeply concerned regarding the underperformance of the Department in all the four targets relating to the provision of basic infrastructure services through ASIDI (water, sanitation, electricity and completed schools to replace inappropriate structures). The underperformance of the ASIDI programme, including underspending, continues to delay the achievement of the objectives of the NDP. Of particular concern in the period under review (2016/17 and the First Quarter of 2017/18) is the large variance between the indicator targets and the departmental achievement. The Committee has noted that, as in previous years, significant matters linked to contractors and Implementing Agents (IAs) contributed to projects not being finalised or delayed significantly.  The Portfolio Committee is concerned that contractors and IAs are not performing as they should with little or no consequences. Many were offered even further contracts/projects in 2016/17. Members query the monitoring mechanisms of these IA’s by the Department. In this regard, the Committee agrees with the Auditor-General’s recommendations regarding the need to strengthen monitoring, including:

 

  • enforcing compliance with procurement processes, when appointing implementing agents and ensuring that the procurement processes followed by implementing agents are aligned to the department’s SCM policies.
  • Monitoring of progress in implementing the action plans on an ongoing basis to ensure that milestones set are achieved

 

The Committee suggests that the Department should establish dashboards at various levels on all relevant details pertaining to all projects with updated information.

 

  • The Committee noted with concern that the LURITZ data was not credible as alluded to by AGSA
  • The Portfolio Committee is further concerned over reports that approximately 37 000 less learners registered for the National Senior Certificate examinations in 2017.
  • Members queried funds being utilised to maintain schools when these had been earmarked for rationalisation.
  • Members also queried why the Department was not insisting that SA-SAMS be made mandatory for all schools.
  • The Committee further notes that the Department has not reported on transport for learners with special needs and urges the Department to include this priority in their future reporting.

                                           

9.1.4.5  Programme 5: Educational Enrichment Services

 

  • The Portfolio Committee queried the amount of schools trained in respect of the NSSF. Members also queried the monitoring conducted by the Department in this respect.
  • Members urge the Department to address issues around school sport needs, including that many schools lack sporting facilities and the need to integrate sport education into the curriculum
  • Members urge the Department to ensure that the Learner Pregnancy Policy is workshopped effectively with schools.

 

  1. Conditional Grants

 

  • In its report of the 2017/18 budget vote of Basic Education, the Portfolio Committee raised a concern over the underspending of the Maths, Science and Technology conditional grant, which had resulted in reductions of R63 million being made over the MTEF period to align the allocation to the capacity to spend. The Committee is now pleased that PEDs improved their spending of this grant to 100 per cent in 2016/17. However, the Committee remains concerned that, following the trends of previous years, some PEDs underspent their allocated budgets for this grant in the First Quarter of 2017/18.

 

  • The Portfolio Committee is concerned regarding the persistent procurement challenges pertaining to the HIV and AIDS conditional grant in some provinces. The Department should provide the necessary support to the relevant provinces in order to decisively deal with this challenge.

 

  • In its 2017/18 budget vote report, the Portfolio Committee welcomed the introduction of the conditional grant for Learners with Profound Intellectual Disabilities, which had been allocated an amount of R478.3 million over the MTEF period. The Committee is concerned that despite advising in its budget vote report that PEDs should be capacitated to implement this grant, the first transfers of this grant were withheld in the First Quarter of 2017/18 due to non- submission of approved business plans.

 

10. Portfolio Committee Recommendations

 

Based on the observations made above, the Portfolio Committee requests that the Minister ensure that the Department consider the following recommendations:

  • Provide Parliament with a comprehensive Action Plan with timeframes to address the 2016/17 AGSA’s audit findings, within three weeks of the adoption of the BRRR report by the National Assembly. The Department is also requested to report quarterly on progress made in addressing the deliverables of the Action Plan, beginning with the Second and Third Quarterly reports. The Action Plan should include a focus on how the Department will address the following recurring challenges:

 

  • The underspending of the ASIDI programme;
  • Irregular expenditure, and fruitless and wasteful expenditure;
  • The reliability of the reported information, including the LURITS database in Programme 4;
  • Material misstatements on the reported performance information of Programmes 2 and 4;
  • Non-compliance issues around annual financial statements;
  • Internal control deficiencies, including leadership oversight; and,
  • Inadequate consequence management.

 

  • Fast track the implementation of interventions designed to improve performance in respect of targets set for school infrastructure.
  • Submit a progress report on the implementation of Infrastructure Norms and Standards within three of the adoption of this report by the National Assembly.
  • Provide Parliament with details on the disbursement and utilisation of the R177.1 million allocated towards the maintenance of the schools that were set alight in Vuwani in 2016, within three weeks of the adoption of this report by the National Assembly.
  • Submit within three weeks of the adoption of this report, reports on the following:
  • The number of schools trained in NSSF
  • A database of all contractors, implementing agents, projects, funding allocation to projects and progress to date
  • A list of schools completed but not transferred 
  • Ensure that the issues around school sport needs, such as resourcing and the need to integrate sport education into the curriculum, are addressed.
  • Continue to intensify the implementation of inclusive education to reach all learners with special education needs, including ensuring that all schools for special needs education (SNE) are well resourced and adequately adapted for learners with special needs and that educators are adequately trained and developed.

 

  • Ensure that there is an effective tracking of teacher absenteeism.
  • Fast track the improvement of the qualifications of Grade R practitioners to NQF level 6, given that this is a key priority towards the achievement of the National Development Plan. The Department should also address the other findings of the AGSA in respect of Grade R, as contained in this report.

 

  • Ensure that all performance indicators in the 2014 – 2019 MTSF are included in the Department’s APP or as part of the sector’s customized indicators of the Provincial Education Departments. These include those identified by the Auditor-General of South Africa as well as the Portfolio Committee in this report. The Department should continue to engage the PEDs on their respective APPs to strengthen the quality of their plans as well as their alignment to the MTSF and the NDP.

 

  • Ensure the preparedness of the PEDs to implement the new conditional grant for Learners with Profound Intellectual Disabilities, given that the first transfers of this grant were withheld in the First Quarter of 2017/18 due to the non- submission of approved business plans. The Department should also ensure that all PEDs improve their implementation of the MST, and the HIV and AIDS conditional grants, which underspend in the First Quarter of each year.

 

  • Together with Provincial Education Departments, take the necessary steps to fast-track the finalisation of the rationalisation of small and unviable schools, which impacts negatively on the performance and spending needs of infrastructure programmes, including ASIDI. The Department is requested to submit a progress report on the merging and rationalisation of schools, within three weeks of the adoption of this report by the National Assembly.
  • Strengthen and reinforce ongoing engagements and collaboration with the Department of Higher Education, SACE and other relevant stakeholders to improve the quality of teacher education and training, including inclusive education.
  • Ensure that the Incremental Introduction of African Languages (IIAL) priority receives adequate budget for effective implementation.
  • Ensure that PEDs comply with the submission of reports and data. PEDs need to ensure that there is advanced planning and proper implementation of policies.
  • Strengthen and reinforce the monitoring and support to PEDs as well as districts.
  • Fast track the effective implementation of competency assessments of principals in all the Provincial Education Departments.

 

  • Implement the planned headcount reduction strategies reported during the First Quarter of 2017/18 to ensure that the Department remain within the compensation of employees ceiling.

 

  • Strengthen the monitoring of the roll-out of ICT in schools, particularly in rural areas, to ensure that access to ICT resources reach 100 per cent by 2019, as required by the Medium Term Strategic Framework.

 

  • Together with relevant authorities, fast track the implementation of plans to allocate ring-fenced funds for learner transport.

 

  • Continue to intensify the monitoring of the implementation of the textbook retrieval system to ensure that every learner has a textbook in line with the imperatives of the National Development Plan.

 

 

  • Give due consideration to the monitoring and implementation of maintenance norms for school infrastructure as long term costs to the fiscus and the economy of delaying maintenance are high.

 

 

Report to be considered.

 

 

 

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