ATC180509: Report of the Portfolio Committee on Higher Education and Training on the 2017/18 Second Quarter Report of the Department of Higher Education and Training, dated 09 May 2018

Higher Education, Science and Innovation

REPORT OF THE PORTFOLIO COMMITTEE ON HIGHER EDUCATION AND TRAINING ON THE 2017/18 SECOND QUARTER REPORT OF THE DEPARTMENT OF HIGHER EDUCATION AND TRAINING, DATED 09 MAY 2018

The Portfolio Committee on Higher Education and Training having considered the second quarter performance report 2017/18 of the Department of Higher Education and Training (DHET) on 08 November 2017 reports as follows:

1. INTRODUCTION

The Department presented the second quarter report of the 2017/18 financial year to the Committee as required by Section 32 of the Public Finance Management Act, 1999 (Act No. 1 of 1999). The report covers the financial and non-financial performance of the Department’s programmes and activities during the period 1 June 2017 to 30 September 2017. This report accounts for the work undertaken by the Committee during the assessment of the second quarter report of the Department, and further makes recommendations for consideration by the Minister of Higher Education and Training.

2. OVERVIEW AND ASSESSMENT OF THE DEPARTMENT’S 2017/18 SECOND QUARTER SERVICE DELIVERY PERFORMANCE

2.1. Overview of the Second Quarter Performance, 01 June to 30 September 2017

Table 1: Comparative service delivery performance for second quarter 2016/17 and 2017/18

Programme	2016/17 2nd Quarter			2017/18 2nd Quarter
	Number of quarterly targets	Percentage of targets achieved	Expenditure as a percentage of the total budget	Number of quarterly targets	Percentage of targets achieved	Expenditure as a percentage of the total budget
Administration	-*	-	90.05	4	75%	49.23
Planning, Policy and Strategy	-*	-	39.11	11	100%	39.97
University Education	5	100%	73.15	6	83%	79.95
Technical and Vocational Education and Training	3	100%	47.41	11	100%	45.75
Skills Development	3	33.33%	40.16	4	100%	49.27
Community Education and Training	1	100%	41.47	4	75%	46.82
Total	38	83%	68.12	40	93%	73.25

Note: * means the programme did not have quarterly targets. However, progress towards achieving the annual target was reported. Expenditure as a percentage of the total budget excludes direct charges.

For the quarter under review, the Department’s six budget programmes had a combined total of 40 targets, of which 37 (93 per cent) were achieved and three (17 per cent) were not achieved. The performance in the 2017/18 second quarter improved by 10 per cent compared to performance recorded during the same quarter in 2016/17, and by 17 per cent compared to the 2017/18 first quarter performance. Programmes 2: Planning, Policy and Strategy; 4: Vocational Education and Training and 5: Skills Development achieved 100 per cent of the targets for the quarter. Programme 1: Administration and 6: Community Education and Training both achieved 75 per cent of the planned targets.

2.2. Overview of programme service delivery performance

2.2.1. Programme 1: Administration

The purpose of this programme is to provide strategic leadership, management and support services to the Department. The programme had 12 targets for the 2017/18 financial year. For the quarter under review, the programme had four planned targets, of which three (75 per cent) had been achieved and one (25 per cent) had not been achieved within the reporting time frame.

The achieved targets include: the development of a plan to improve human resource recruitment and selection process which was approved by the Director-General by 30 September 2017; 50 per cent consultation on a draft plan to reduce the number of days to resolve disciplinary cases; and the remedial plan on audit findings in the previous financial year was developed and approved by the Director-General.

The target to have 50 per cent of the ICT strategy and system implementation developed and approved by the DG by 30 September 2017 was not achieved. The Department reported that the approval of the submission for the strategy was delayed due to engagements with the National Skills Fund (NSF) on the requisite funding for its implementation.

 

2.2.2. Programme 2: Planning, Policy and Strategy

The purpose of the programme is to provide strategic direction in the development, implementation and monitoring of Departmental policies and the human resource development strategy for South Africa. The programme had 12 targets planned to be fully achieved at the end of the fourth quarter, 31 March 2018. For the quarter under review, the Department planned to report on the milestone towards achieving the 12 targets and were all (100 per cent) achieved.

The achieved targets include: 50 per cent progress towards finalisation of the concept note for the occupations in high demand after review; 70 per cent progress towards the development and  gazetting of the Ministerial Report: Framework on Disability for public comment; 50 per cent progress towards compilation of quarterly report on the implementation of Social Inclusion in the Post-School Education and Training (PSET); 50 per cent progress towards compilation of quarterly report on the implementation of Open Learning in the PSET; 50 per cent progress towards compilation of quarterly report on the implementation of Career Development Services; 50 per cent progress towards compilation of a draft status report on International Relations implementation plan; 50 per cent progress towards compilation of data on investment trends in PSET collected and tables; 50 per cent progress towards compilation of career development institutionalised and a draft implementation report; 50 per cent progress towards compilation of a draft communication strategy for student support services; 50 per cent progress towards compilation of a draft design of the database and 50 per cent progress towards compilation statistical data gathering initiated as per project plan.

2.2.3. Programme 3: University Education

The purpose of this programme is to develop and coordinate the policy and regulatory framework for an effective and efficient university education system. Furthermore, it provides financial support to universities, the National Student Financial Aid Scheme (NSFAS) and the National Institute for Higher Education (NIHE).

For the 2017/18 financial year, the programme had 20 departmental and 10 system planned targets. For the quarter under review, there were six planned outputs, of which five were milestones towards achieving the annual targets and one target that was planned to be achieved at the end of the second quarter. Of the six targets, five (5) (83 per cent) were achieved as planned and one (17 per cent) target was achieved during the reporting period. The achieved targets were: the development of a Central Application Services policy which was approved by the Minister;  50 per cent progress towards the development of the draft amendments to the National Student Financial Aid Scheme (NSFAS) Act and to get them available for consultation; 50 per cent progress towards the development of the draft National Plan for PSET; a report on Higher Education AIDS Programme for the 2016/17 financial year was developed and approved by the Director-General by September 2017 and 25 per cent progress towards receiving audited data from universities.

The target to achieve 50 per cent progress towards the development of a policy framework on collaboration between professional bodies, government departments and quality councils developed (various aspect of the policy underway / in process in line with project plan) was not achieved as planned. It was reported that for the quarter under review, the target was to implement some aspects of the policy development process in line with the project plan. The implementation of those aspects would be undertaken in the third quarter.

2.2.4. Programme 4: Technical and Vocational Education and Training

The purpose of this programme is to plan, develop, implement, monitor, maintain and evaluate national policy, programmes, assessment practices and systems for TVET. This programme had 28 departmental and 10 system targets planned for the 2017/18 financial year. For the quarter under review, the programme had 11 targets and all were achieved.

The achieved targets include: the development of a second draft performance reporting by TVET Colleges; 25 per cent progress towards the development of a draft policy for TVET College finance management; 50 per cent progress towards consultation with stakeholders on the first draft policy for the South African Institute for Vocational and Continuing Education and Training (SAIVCET); 50 per cent progress towards consultation on the second draft policy for administration/ management of student admission for TVET Colleges; the development of a  reviewed funding framework for TVET Colleges which was approved by the Director-General by 30 September 2017; to achieve 50 per cent progress towards the development of a second draft review of the Departmental policy framework on TVET qualifications; 38 per cent progress towards the development of a report on the conduct of public TVET College examination centres during national examinations and assessments for 2016 academic year which was approved by Director-General by 31 July 2017, a report on certification backlog eradication was developed and approved by the DG by 31 July 2017; a monitoring and evaluation report on the TVET Colleges was developed and approved by the Director-General by 30 September 2017; 50 per cent progress towards the development of a first draft plan for TVET College lecturer development and 50 per cent progress towards consultation on a draft national infrastructure asset management system for TVET Colleges.

2.2.5. Programme 5: Skills Development

The purpose of the programme is to promote and monitor the National Skills Development Strategy (NSDS III) and to develop a skills development policy and regulatory framework for an effective skills development system.

This programme had eight (8) Departmental and six system targets planned for the 2017/18 financial year. For the quarter under review, there were four (4) targets and all were achieved. These were: to have the first draft revised National Skills Development Plan (NSDP) consulted with the National Skills Authority (NSA); to have a report on the implementation of the National Skills Development Strategy by SETAs developed and approved by the DG by 30 September 2017 and to have 80 per cent of quarterly meetings held.

2.2.6. Programme 6: Community Education and Training

The purpose of this programme is to plan, develop, implement, monitor, maintain and evaluate national policy, programme assessment practices and systems for community education and training.

For the 2017/18 financial year, the programme had six departmental and two system planned targets. For the quarter under review, there were four targets, of which three (75 per cent) were achieved and one (1) (25 per cent) was not achieved. The achieved targets include: the development and approval of the CET service delivery model which was approved by the Director-General by 30 September 2017; the development of a first draft reporting policy for CET gazetted for public comment; and a report on the implementation of teaching and learning support framework was developed and approved by the DG by 30 September 2017.

The target to have a reviewed funding framework for CET Colleges developed and approved by the Minister by 30 September 2017 was not achieved within the reporting period. The Department reported that the Ministerial Committee Report with the draft Funding Framework for CET was published for public comments on 1 September 2017 and comments were being received. 

The performance on the two system targets would be reported at the end of the fourth quarter.

3. OVERVIEW AND ASSESSMENT OF THE DEPARTMENT’S 2017/18 SECOND QUARTER FINANCIAL PERFORMANCE

3.1. Overview and assessment of the overall budget and expenditure

Table 2: 2017/18 Second Quarter budget and expenditure

Programme	2016/17 2nd Quarter			2017/18 2nd Quarter
	Main appropriation	Actual Expenditure	Expenditure as a percentage of the total budget	Main Appropriation	Actual Expenditure	Expenditure as a percentage of the total budget
	R’000	R’000	%	R’000	R”000	%
Administration	373 667	336 477	90.05%	403 356	198 578	49.23%
Planning, Policy and Strategy	71 545	27 982	39.11%	73 298	29 298	39.97%
University Education	39 531 603	28 915 521	73.15%	41 943 533	33 532 161	79.95%
Technical and Vocational Education and Training	6 917 191	3 279 679	47.41%	7 408 249	3 389 500	45.75%
Skills Development	224 543	90 178	40.16%	244 293	120 364	49.27%
Community Education and Training	2 069 739	858 395	41.47%	2 234 910	1 046 309	46.82%
Statutory Appropriation National Skills Fund Sector Education and Training Authorities	17 639 595	7 127 910	40.41%	16 641 456	7 953 810	47.80%
Total	64 421 288	40 636 139	60.81%	68 949 095	46 270 020	67.11%

 

The Department’s total budget for the 2017/18 financial year amounted to R68.9 billion, including direct charges. The actual expenditure at the end of the second quarter amounted to R17.7 billion, which constituted 25.8 per cent of the Department’s total budget. Inclusive of the expenditure for the 2017/18 first quarter, the expenditure as a percentage of the total budget was 67.11 per cent at the end of the second quarter. Expenditure had increased by 6.3 per cent compared to the same period in the 2016/17 financial year.

In terms of expenditure per economic classification, compensation of employees expenditure at the end of the second quarter amounted to R3.9 billion, which constituted 46.98 per cent of the Department’s total budget for compensation of employees. The spending rate of 46.16 per cent on personnel expenditure at the end of the 2017/18 second quarter compared equally to the spending rate during the same period in the 2016/17 financial year. The spending rate on examiners and moderators during the quarter under review decreased by 16.07 per cent from the spending rate of 112.5 per cent during the same period in 2016/17.

Goods and services expenditure amounted to R188.8 million of the total budget of R420.4 million for 2016/17. The spending rate decreased by 17.78 per cent during this quarter under review compared to 62.7 per cent during the same period in 2016/17. Expenditure for transfers and subsidies amounted to R42 billion, which constituted 70.09 per cent of the total allocated budget for transfers and subsidies and capital expenditure amounted to R2.956 million.

Expenditure per programme at the end of the second quarter was as follows: Administration: R198.5 million (49.23 per cent); Planning, Policy and Strategy: R29.2 million (39.97 per cent); University Education: R33.5 billion (79.95 per cent); TVET: R3.3 billion (45.75 per cent); Skills Development: R120.3 million (49.82 per cent); CET: R1 billion (46.82) and Direct Charges: R7.9 billion (47.80 per cent).   

3.2. Irregular, fruitless and wasteful expenditure

The Department did not incur irregular, fruitless or wasteful expenditure during the quarter under review. With regard to irregular expenditure of R228 000 incurred during the 2017/18 first quarter, the Department reported that an Internal Audit recommended that disciplinary action should be taken against the involved official/s for not following the required supply chain management processes. It was further reported that the matter had been referred to the Labour Relations Unit within the Department for appropriate procedure and action in terms of government’s disciplinary procedure.

4. CONCLUSION

The Department recorded an improved performance of 93 per cent for the second quarter 2017/18 in comparison to 67 per cent in the first quarter 2017/18. There was no incident of irregular expenditure recorded in the second quarter 2017/18 unlike the previous quarter.

The Department still experienced the recurring challenge of delays in the filling of advertised posts within the regulated period, owing to the delays in the process of large volumes of applications received for posts. The Department had insufficient human resource capacity in its recruitment unit owing to inadequate funding. The Committee welcomed the significant improvement in the Department’s performance for the second quarter.

5. COMMITTEE OBSERVATIONS

The Committee having assessed the second quarter performance report 2017/18 of the DHET made the following observations:

5.1.       The Committee welcomed the significant improvement by the Department in meeting the planned targets in the second quarter 2017/18. The performance of the Department for the second quarter was 93 percent. Furthermore, there was no irregular expenditure incurred in the second quarter.

5.2.       The Committee expressed a concern about the delays by the National Student Financial Aid Scheme (NSFAS) to pay the total approved allocations to TVET colleges as well as the impact it had on their operations and students who depended on the funding for accommodation and meals. The Department indicated that at the beginning of November 2017, the payment of NSFAS allocations to TVET colleges stood at 60 percent and this was not acceptable. NSFAS had the responsibility to ensure that the payment of allowances to students was implemented effectively.

5.3.       The Committee expressed a concern about the five TVET colleges (East Cape Midlands, Tshwane North, Tshwane South, Sedibeng and Northern Cape Rural) which had outstanding audits. The Auditor-General (AG) indicated that it was in contact with these colleges and reached an agreement to finalise their audits by 30 November 2017. However, the Tshwane North TVET college had outstanding audits from 2015 and its audits would be finalised in April 2018.

5.4.       The continuous absence of the programme’s DDGs was raised as a concern. The Department indicated that it was undertaking a capacity-building programme to develop other managers to account for the programme’s performance.

5.5.       The Committee expressed a concern about the delays in the filling of advertised posts within the regulated time. The Department indicated that it received up to 500 applications for one advertised post, and the capturing of applications took much longer. However, with the approved HR recruitment plan, the Department would be able to fill advertised positions within 180 days.

5.6.       The increasing number of suicides from students in higher education and training institutions was noted as a concern. The Department indicated it developed policy regulations to support universities in developing their own student support services.

5.7.       The Committee expressed a concern about the delays in the finalization of the conditions of service of CET educators. The Department indicated that it inherited Adult Basic Education (ABET) educators from provinces with different conditions of service, and the rationalisation of the conditions of service process would require R1.3 billion.

5.8.       The Committee expressed a concern about the delays by the Department in the finalisation of legislation due for consideration by the Committee. The Department indicated that the Central Applications Service Bill and the NSFAS Bill would be ready by the beginning of 2018.

6. RECOMMENDATIONS

The Committee having assessed the second quarter 2017/18 of the Department recommends that the Minister consider the following:

• There should be a conclusion of the outstanding audits of the five TVET Colleges. The Department working with the colleges should put measures in place to ensure that audit findings that are negative are addressed.
• The Department must look into benchmarking its applications capturing system so that it can look into best practices on how best it can capture applications so that it fills vacancies within the prescribed time of 180 days.
• Noting the concerns that the Department has raised regarding the funding required for the finalisation of the conditions of service of CET educators, the Department must put in place a plan with a timeframe on how it will progressively work towards finalising the conditions of service of CET educators.
• The Minister should ensure that it works with the Department to ensure that NSFAS settles outstanding allocations to universities and colleges.
• The Minister should ensure that indicated legislation: the Central Applications Service Bill and the NSFAS Bill urgently reach the parliamentary process.