ATC201016: Report of the Portfolio Committee on Higher Education, Science and Technology on the 2019/20 Second, Third, Fourth Quarters, 2020/21 First Performance Report and the Revised 2020/21 Annual Performance Plan of the Department of Higher Education, Dated 13 October 2020

Higher Education, Science and Technology

REPORT OF THE PORTFOLIO COMMITTEE ON HIGHER EDUCATION, SCIENCE AND TECHNOLOGY ON THE 2019/20 SECOND, THIRD, FOURTH QUARTERS, 2020/21 FIRST PERFORMANCE REPORT AND THE REVISED 2020/21 ANNUAL PERFORMANCE PLAN OF THE DEPARTMENT OF HIGHER EDUCATION, DATED 13 OCTOBER 2020

The Portfolio Committee on Higher Education, Science and Technology (hereinafter referred to as the Committee), having considered the 2019/20 second, third, fourth quarters and the 2020/21 first quarter performance report and the Revised 2020/21 Annual Performance Plan of the Department of Higher Education and Training (hereinafter referred to as the Department), reports as follows:

1. INTRODUCTION

Section 40 (1) (f) of the Public Finance Management Act (PFMA), 1999 (Act No.1 of 1999) makes provision for the accounting officer of a department to submit all reports, returns, notices and other information to Parliament. The Act also stresses the need for accounting officers to regularly monitor and report on the performance of their Departments against the agreed budget for the year.

Section 5 (1) (c) of the Money Bills Amendment Procedure and Related Matters Act, 2009 (Act No. 9 of 2009) determines that the National Assembly (NA), through its committees, must annually assess the performance of each national department in relation to the expenditure report of the said department published by the National Treasury in terms of section 32 of the PFMA.

The Portfolio Committee conducts an oversight function over the Department and it is responsible for closely monitoring the progress made with regard to the achievement of financial and non-financial performance of the Department against its pre-determined service delivery or performance targets. The quarterly assessments of the Department’s financial and non-financial performance also assist the Committee in its preparation for the annual submission of the budgetary review and recommendation report (BRRR) as determined by section 5 (2) of the Money Bills Amendment Procedures and Related Matters Act, 2009 (Act No. 9 of 2009).

In light of the above, the Committee considered the 2019/20 second, third and fourth quarter performance report and 2020/21 first quarter performance report of the Department on 19 August 2020. The Committee also considered the Revised 2020/21 APP of the Department, which was necessitated by the tabling of a Special Adjustment Budget for 2020/21 in terms of section 30(2) of the PFMA

2. OVERVIEW AND ASSESSMENT OF THE DEPARTMENT’S QUARTERLY FINANCIAL AND SERVICE DELIVERY PERFORMANCE

2.1. 2019/20 SECOND QUARTER PERFORMANCE

2.1.1. Overview of the Second Quarter financial performance

Table 1: Budget allocation and expenditure for the Second Quarter of the 2019 financial year

R million

 

 

 

Available budget

 

 

Q2 Actual Expenditure

Expenditure as % of available budget

Q2 Projected expenditure

Variance from projected expenditure

% Variance from projected expenditure

Programme

Administration

460.4

 

204.1

 

44.3%

 

236.1

 

32.0

 

13.5%

Planning, Policy and Strategy

90.8

 

 

34.6

 

 

38.1%

 

 

46.0

 

 

11.4

 

 

24.7%

University Education

73,409.9

 

56,209.7

 

76.6%

 

57,602.6

 

1,392.9

 

2.4%

Technical and Vocational Education and Training

12,721.8

 

 

 

5,759.7

 

 

 

45.3%

 

 

 

5,881.7

 

 

 

122.0

 

 

 

2.1%

Skills Development

282.4

 

135.4

 

47.9%

 

142.5

 

7.2

 

5.0%

Community Education and Training

2,532.8

 

 

1,163.3

 

 

45.9%

 

 

1,250.8

 

 

87.4

 

 

7.0%

 

Sub-total

89,498.2

 

63,405.9

 

71.0%

 

65,159.6

 

1,652.8

 

2.5%

Direct charges

18,758.5

 

8.805.5

46.9%

9,379.3

573.7

6.1%

SETAs

15,006.8

7,044.4

46.9%

7,503.4

459.0

6.1%

National Skills Fund

 

3,751.7

 

 

1,761.1

 

46.9%

 

1,875.4

 

114.7

 

6.1%

 

Total

108,256.7

 

72,312.4

 

66.8%

 

74,538.9

 

2,226.5

 

3.0%

Source: National Treasury, 2019

In 2019/20, the Department’s allocation amounted to R108,25 billion, inclusive of direct charges against the National Revenue Fund. For the quarter under review (1 July to 30 September 2019), the Department projected to spend R74,53 billion, including the direct charge. At the end of the second quarter, the Department had spent R72,31 billion, with lower than projected spending of R2,22 billion, which constitute 3.0% of the available quarterly budget for 2019/20.  Spending on compensation of employees amounted to R4,43 billion against the available budget of R4,55 billion, translating into lower than projected spending amounting to R112,7, representing 2.5% of the quarterly budget.

The underspending was due to vacant posts in TVET and CET programmes, including the critical post of the Deputy Director-Generals for which provision was made, but not yet filled as projected. Most of these vacant posts are at TVET and CET Colleges.

 

Expenditure on goods and services for the second quarter amounted to R217.5 million against the budget of R385.0 million, translating into an underspending of 43.5% of the quarterly projected budget. In terms of expenditure on transfers and subsidies, excluding skills levy, the Department had spent R58,84 billion against the budget of R60,21 billion, translating into an underspending amounting to R1,36 billion. The underspending was due to delays in the transfer of earmarked grantsin University Educationand transfer payments to TVET colleges.

 

2.1.2. Overview and assessment 2019/20 second quarter service delivery performance

For the quarter under review, the Department had 13 planned targets shared amongst the four budget programmes: 1: Administration, 2: Planning, Policy and Strategy, 4: Technical and Vocational Education and Training, and 5: Skills Development.Of the 13 targets, eight (61.5%) were achieved as planned and five (38.4%) were not achieved.

(i) Programme 1: Administration

The purpose of this Programme is to provide strategic leadership, management and support services to the Department. For the second quarter, the Programme had two target milestones of which were all achieved. The Department achieved an unqualified audit opinion during the 2018/19 financial year and also developed a remedial plan on audit findings in the previous financial year. The programme had spent R204,1 million against the budget of R236,1 million projected for the quarter, translating in lower than projected spending of 13.5%. The underspending was mainly due to delays in the filling of vacancies due to difficulties experienced in finding suitable candidates and outstanding invoices.

(ii) 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 hadone planned target and was achieved as planned. The public comments on the draft Gender-Based Violence Policy were consolidated as planned. At the end of the second quarter, the programme had spent R34.6 million against the budget of R46.0 million, translating in lower than projected spending amounting to R11.4 million. This represented 24.7% of the available quarterly budget for the 2019/20.

(iii) Programme 3: University Education

The aim 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 quarter under review, there were no planned outputs.The programme had spent R56,20 billion against the budget of R57,60 billion. Underspending amounted to R1,39 billion, translating into 2.4% of the available quarterly budget, attributed to delays in the transfer of earmarked grants to universities. The grants could not be processed as initially projected because the universities failed to submit their audited reports on time.

(iv) 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. For the quarter under review, the programme had five planned targets, of which three were achieved and two were not achieved as planned. The milestone to have 65% of TVET colleges compliant to approved financial governance standards was exceeded by 5% and 100% of Public TVET College examination centres conducted national examinations and assessments in compliance with national policy. The programme achieved R48.264 million (3%) against the target of 50% (R742, 000 000) of TVET college maintenance expenditure achieved in terms of approved infrastructure maintenance plans.The programme also failed to achieve this target during the first quarter of 2019/20. The targets to have a progress report on the reduction of certification backlog developed and approved by the Director-General by 30 September 2019 was not achieved as planned.

At the end of the second quarter, the programme had spent R5,75 billion against the budget of R5,88billion. Underspending amounted to R122,0million, translating into 2.1% of the available quarterly budget, mainly as a result of delayed receipt of claims from examiners and moderators for services already rendered.

(v) 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. The programme had five targets due at the end of the second quarter, of which two were achieved and three not achieved. The milestones on the percentage of national artisan learners trade test pass rate; the number of new artisan learners registered and the number of new artisan learners qualified per annum were not achieved as planned.

The programme had spent R135,4 million against the budget of R142,5 million. Underspending amounted to R7,2 million, translating into 5.0% of the available quarterly budget.

(vi) 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 quarter under review, the programme had no targets due. At the end of the second quarter, the programme had spent R1,16 billion against the budget of R1,25 billion. Underspending amounted to R87,4 million, translating into 7.0% of the available quarterly budget, due to the delayed receipt of claims for the remuneration of CET College lecturers, vacant posts as a result of post provisioning norms and standards not yet being finalised and difficulties in securing suitable candidates.

 

 

 

 

2.2. 2019/20 THIRD QUARTER PERFORMANCE

2.2.1. Overview of the Third Quarter financial performance

Table 2: Budget allocation and expenditure for the Third Quarter of the 2019/20 financial year

R million

 

 

Adjusted Appropriation

Available budget

 

 

Q3 Actual Expenditure

Expenditure as % of available budget

Q3 Projected expenditure

Underspending

% Underspending

Programme

Administration

438,3

438,3

301,5

68.8%

333,9

32,4

9,7%

Planning, Policy and Strategy

 

 

78,3

78,3

 

 

54,7

 

 

69,8%

 

 

62,2

 

 

7,6

 

 

12,1%

University Education

 

73 460,8

73 460,8

 

70 126,9

 

95,5%

 

72 944,2

 

2 817,3

 

3,9%

Technical and Vocational Education and Training

 

 

 

12 396,6

 

 

 

12 396,6

 

 

 

8 627,3

 

 

 

69,6%

 

 

 

9 023,5

 

 

 

396,2

 

 

 

4,4%

Skills Development

 

280,9

280,9

 

204,7

 

72,9%

 

212,2

 

7,4

 

3,5%

Community Education and Training

 

 

2 384,9

 

2 384,9

 

 

1 716,8

 

 

72,0%

 

 

1 765,2

 

 

48,4

 

 

2,7%

 

Sub-total

 

89 039,7

89 039,7

 

81 031,9

 

91,0%

 

84 341,1

 

3 309,3

 

3,9%

Direct charges

18 758,5

 

18 576,3

 

13 323,1

71,7%

13 886,7

563,6

4,1%

SETAs

15 006,8

14 861,0

10 658,5

71,7%

11 109,3

450.9

4,1%

National Skills Fund

 

3 751,7

3 715,3

 

2 664,6

 

71,7%

 

2 777,3

 

112,7

 

4,1%

 

Total

 

107 789,2

107 616,0

 

94 354,9

 

87,7%

 

98 227,8

 

3 872,9

 

3,9%

Source: National Treasury, 2020

 

In 2019/20, the Department’s adjusted available budget amounted to R107,61billion, inclusive of direct charges against the National Revenue Fund. The projected spending for the third quarter (1 October to 31December 2019) R98,22 billion, of which R84,34 billion was for the voted funds and R13,88 billion for skills levies. The Department had spent R94,35 billion, with lower than projected spending of R3,87 billion (R3,30 billion voted funds and R563,6 million skills levies) which translated to an underspending of 3.9%of the available quarterly budget for 2019/20. Expenditure on compensation of employees amounted to R6,77 billion against the available budget of R6,86 billion, translating into an underspendingof R87,6 million, representing 1.3% of the quarterly budget. Expenditure on goods and services was R327,7 million against the budget of R443,6 million. Spending on transfers and subsidies, excluding the skills levy amounted to R73,92 billion against the budget of R77,02 billion, translating into lower than projected spending of R3,10 billion, representing 4,0% of the available quarterly budget. The underspending was attributed to delays in the transfer of earmarked grants in University Educationand transfer payments to non-profit institutions in Technical and Vocational Education and Training programmes.

 

2.2.2.  Overview and assessment 2019/20 third quarter service delivery performance

For the quarter under review, the Department had 17 planned targets shared amongst the four budget programmes: Planning, Policy and Strategy, University Education, Technical and Vocational Education and Training, and Skills Development. Of the 17 targets, 10 (59%) were achieved as planned and seven (41%) were not achieved.

(i) Programme 1: Administration

The purpose of this Programme is to provide strategic leadership, management and support services to the Department. For the third quarter, the Programme had no planned targets.The programme had spent R301,5 million against the budget of R333,9million projected for the quarter, translating in lower than projected spending of 9.7%. The underspending was mainly due to delays in the filling of vacancies due to difficulties experienced in finding suitable candidates and outstanding invoices.

 (ii) 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 achieved its one target planned for the quarter. The updated draft policy framework on Gender-Based Violence was presented to the Executive Committee. At the end of the third quarter, the programme had spent R54,7 million against the budget of R62,2 million, translating in lower than projected spending amounting to R7,6 million. This represented an underspending of 12.1%of the available quarterly budget for the 2019/20. The lower than projected spending was mainly under goods and services, attributed to outstanding invoices from the State Attorney’s legal fees and for travel and subsistence.

 

(iii) Programme 3: University Education

The aim 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 quarter under review, the programme had six targets, of which five were achieved and one was not achieved. Guidelines for student funding for the DHET bursary scheme for students at public universities and guidelines for international scholarships offered by government departments were developed. In addition to the direct deliverables, the programme had 12 system targets which were due during the quarter under review. Of this, eight were achieved and fourwere not achieved as planned.

 

The programme had spent R70,12 billion against the budget of R72,94 billion. Underspending amounted to R2,81 billion, translating into 3.9% of the available quarterly budget, attributed to delays in the transfer of earmarked grants to universities.

(iv) 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. For the quarter under review, the programme had five planned targets, of which two were achieved and three were not achieved as planned. The milestone to have 65% of TVET colleges compliant to approved financial governance standards was exceeded by 6% and the target to issue certificates to qualifying candidates following the publication of the results was achieved. The programme did not achieve the targeted spending on TVET college maintenance expenditure achieved in terms of approved infrastructure maintenance plans. This target could not be achieved in the first and the second quarters of the current financial year. The programme had eight system targets due during the quarter under review, of which four were achieved and four not achieved.

At the end of the third quarter, the programme had spent R8,62 billion against the budget of R9,02billion. Underspending amounted to R396,2million, translating into 4.4% of the available quarterly budget, mainly as a result of delayed receipt of claims from examiners and moderators for services already rendered. This is due to the Department’s incorrect projections, which did not take into account a budget reduction of R400 million in the adjustment’s budget.

 

(v) 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. The programme had five targets due at the end of the quarter, of which two were achieved and three not achieved. The programme developed a Report on the implementation of the National Skills Development Strategy by SETAs. The following targets were not achieved as planned: percentage of national artisan learners trade test pass rate; number of new artisan learners registered and number of new artisan learners qualified per annum. The programme had one system target due during the quarter and was not achieved as planned.

The programme had spent R204,7 million against the budget of R212,2million, translating into an underspending of 3.5% of the available quarterly budget.

(vi) 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 quarter under review, the programme had no direct deliverables. The programme had two system targets, headcount enrolment in the CET colleges and the certification rate in the CET colleges formal qualifications and were both not achieved.  At the end of the third quarter, the programme had spent R1,71 billion against the budget of R1,76 billion, translating into an underspending of 7.0% of the available quarterly budget. The underspending was mainly due to the delayed receipt of claims from the moderators and examiners for the payment of travel and subsistence, vacant posts as a result of post provisioning norms and standards not yet been finalised and difficulties in securing suitable candidates.

 

 

 

 

 

 

 

2.3. 2019/20 FOURTH QUARTER PERFORMANCE

2.3.1. Overview of the Fourth Quarter financial performance

Table 3: Budget allocation and expenditure for the Fourth Quarter of the 2019/20 financial year

R million

 

 

 

Main appropriation

Adjusted budget

 

 

Available budget

 

 

Year-End Actual expenditure

Expenditure as % of available budget

Underspending

% underspending

Programme

Administration

460.4

438,3

438,3

421,2

96,1%

17,1

3,9%

Planning, Policy and Strategy

 

 

 

 

90,8

78,3

78,3

 

 

 

73,7

 

 

 

94,1%

 

 

 

4,6

 

 

 

5,9%

University Education

 

73 409,9

73 460,8

73 460,8

 

73 437,6

 

100,0%

 

23,2

 

0,0%

Technical and Vocational Education and Training

 

 

 

12 721,8

 

 

 

12 396,6

 

 

 

12 396,6

 

 

 

12 318,6

 

 

 

99,4%

 

 

 

77,9

 

 

 

0,6%

Skills Development

 

282,4

280,9

280,9

 

291,2

 

103,7%

 

-10,3

 

-3,7%

Community Education and Training

 

 

2 532,8

2 384,9

2 384,9

 

 

2 269,8

 

 

95,2%

 

 

115,1

 

 

4,8%

 

Sub-total

 

89 498,2

89 039,7

89 039,7

 

88 812,0

 

99,7%

 

227,7

 

0,3%

Direct charges

18 758,5

 

18 576,3

 

18 576,3

18 283,8

98,4%

292,5

1,6%

SETAs

15 006,8

14 861,0

14 861,0

14 627,1

98,4%

234,0

1,6%

National Skills Fund

 

3 751,7

3 715,3

 

3 715,3

 

3 656,8

 

98,4%

 

58,5

 

1,6%

 

Total

 

108 256,7

 

107 616,0

 

107 616,0

 

107 095,9

 

99,5%

 

520,2

 

0,5%

Source: National Treasury, 2020

The Department’s total adjusted budget for the 2019/20 financial year amounted to R107,61 billion, inclusive of direct charges against the National Revenue Fund. At the end of the fourth quarter, the Department had spent R107,09 billion against the budget of R107,61 billion, translating into a 99.5% expenditure against the available budget. Underspending at the end of the year amounted to R520,2 million (R227,7 million the voted funds and R292,5 million skills levies). The lower than projected spending on the voted funds amounting to R227,7 million was attributed to the underspending on the compensation of employees across all programmes but mainly in Administration, University Education and CET programmes.

The Department had spent R9,36 billion on compensation of employees, translating into 98.8% expenditure against the available budget of R9,48 billion. Spending on goods and services amounted to R541,6 million against the budget of R658,6 million. Spending on transfers and subsidies amounted to R97,17 billion, including skills levy.

2.1.2.  Overview and assessment 2019/20 fourth quarter service delivery performance

For the quarter under review, the Department had 42 planned targets shared amongst the six budget programmes: Administration, Planning, Policy and Strategy, University Education, Technical and Vocational Education and Training, Skills Development and Community Education and Training. Of the 42 targets, 32 (76.2%) were achieved as planned and 10 (23.8%) were not achieved. There were also eight system targets in the fourth quarter.

(i) Programme 1: Administration

The purpose of this Programme is to provide strategic leadership, management and support services to the Department. For the fourth quarter, the programme had five targets of which four were achieved and one not achieved. The Department achieved 92.98% in filling the approved funded positions against the target of 90%; 100% of disciplinary cases were resolved within 90 days and achieved 99.50% of network connectivity against the target of 95%. The Department did not achieve the target to pay 100% of invoices received from creditors within 30 days. At the end of the fourth quarter, the programme had spent R421,2 million against the budget of R438,3 million, translating into 96.1% spending of the programme’s total budget for the financial year. Underspending amounted to R1,17 million, representing 3.9% of the total budget.

(ii) 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 nine planned targets and all were achieved as planned The proposed amendments to the National Qualifications Framework Act gazette for public comments was published on the Department’s website; the annual report on the NQF was developed and approved; Policy framework on GBV in PSET was gazetted, amongst others.

At the end of the fourth quarter, the programme had spent R73,7million against the budget of R78,3 million, translating into 94.1% spending on the total budget of the programme.

(iii) Programme 3: University Education

The aim 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 quarter under review, there were 15 direct deliverables and four system targets due. Of the 15 direct deliverables, 14 were achieved and one not achieved. Ten system monitoring and evaluation reports were developed and approved; the revised Student Leadership Development Programme was approved; 100 new Generation of Academics Programme posts were allocated to universities and 140 additional academic and professional staff at universities were supported to undertake Doctoral studies through the University Capacity Development Programme, against the target of 50.

At the end of the fourth quarter, the programme had spent R73,43 billion against the budget of R73,46, translating into 100% spending of the programme’s available budget for the financial year.

(iv) 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. For the quarter under review, the programme had 12 targets (nine direct deliverables and three system targets) planned. Of the nine direct deliverables, four were achieved and five were not achieved.73% of the TVET colleges were compliant to approved financial governance standards; 100% of the Public TVET Colleges Examination centres conducted national examinations and assessments in compliance with national policy. The programme failed to achieve the targeted spending on TVET college maintenance expenditure achieved in terms of approved infrastructure maintenance plans. Of critical to note, is that this target could not be achieved during all the four quarters. The programme did not achieve the 3-month target to issue certificates to qualifying candidates following publication of results. Though the Department had developed the Continuing Education and Training Act Regulations, it was reported that the State Law Advisors advised that they were ultra vires to the Act and the Department will have to reconfigure the regulations to possible determinations.

At the end of the fourth quarter, the programme had spent R12,31billion against the budget of R12,39billion, translating into 99.4% spending against the available programme budget for 2019/20. Underspending amounted to R77,7 million.

(v) 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. The programme had six targets due at the end of the fourth quarter, of which three were achieved and three not achieved.

The programme achieved 32-days lead time from qualifying trade test applications received until trade test is conducted against the target of 60 days; developed reports on the implementation of the NSDS by the SETAs and the implementation of good governance standards by the SETAs.The targets on the percentage of national artisan learners trade test pass rate; the number of new artisan learners registered and the number of new artisan learners qualified per annum were not achieved as planned.

At the end of the fourth quarter, the programme had spent R291,2 million against the budget of R280,9million, translating in an overspending of R10,3 million or 103.7%. The overspending in this programme was mainly due to expenditure on compensation of employees for the appointment of contract officials for the Special Projects related to skills development activities. This overspending was to be defrayed by shifting excess funds from underspending programmes.

 

(vi) 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 quarter under review, the programme had one planned target. A draft progress report on monitoring and evaluation of the CET College sector performance for the 2019/20 financial year was developed and approved.

At the end of the fourth quarter, the programme had spent R2,26 billion against the budget of R2,38 billion, translating into 95.2% spending on the programme budget. The programme recorded lower than projected spending amounting to R115,1 million.

 

 

 

 

2.4. 2020/21 FIRST QUARTER PERFORMANCE

2.4.1. Overview of the 2020/21 First Quarter financial performance

Table 4: Budget allocation and expenditure for the First Quarter of the 2020/21 financial year

R million

 

 

 

Available budget

 

 

Q1 Actual Expenditure

Expenditure as % of available budget

Q1 Projected expenditure

Variance from projected expenditure

% Variance from projected expenditure

Programme

Administration

491.2

81.1

16.5%

117.3

36.1

30.8%

Planning, Policy and Strategy

214.5

 

 

41.8

 

 

19.5%

 

 

51.6%

 

 

9.7

 

 

18.9%

University Education

80 083.4

 

35 947.6

 

44.9%

 

41 031.4

 

5 083.7

 

12.4%

Technical and Vocational Education and Training

 

 

 

13 813.6

 

 

 

2 094.1

 

 

 

15.2%

 

 

 

3 165.7

 

 

 

1 071.6

 

 

 

33.9%

Skills Development

318.5

 

69.3

 

21.7%

 

77.3

 

8.0

 

10.4%

Community Education and Training

2 522.9

 

 

566.6

 

 

22.5%

 

 

646.3

 

 

79.7

 

 

12.3%

 

Sub-total

97 44.0

 

38 800.6

 

39.8%

 

45 089.5

 

6 288.9

 

13.9%

Direct charges

19 412.9

 

4 311.8

22.2%

4 853.2

541.4

11.2%

SETAs

15 530.3

3 449.4

22.2%

3 882.6

433.1

11.2%

National Skills Fund

3 882.6

 

862.4

 

22.2%

 

970.6

 

108.3

 

11.2%

 

Total

116 856.9

 

43 112.4

 

36.9%

 

49 942.7

 

6 830.3

 

13.7%

Source: National Treasury, 2020

 

The Department’s total budget for 2020/21 amounted to R116,85 billion, inclusive of direct charges against the National Revenue Fund. At the end of the 2020/21 first quarter, the Department has spent R43,11 billion against the quarterly projected budget of R49,94 billion, including skills levy. This translates into an underspending of R6,83 billion (R5,90 billion voted funds and R541,4 million skills levy), representing 13.7% underspending of the quarterly budget.Spending on compensation of employees amounted to R2,08 billion against the available budget of R2,35 billion, translating into lower than projected spending amounting to R269,3 million, representing 11.4% of the quarterly budget on compensation of employees.

The underspending was due to due to vacant posts in various programmes that could not be filled as anticipated and delays on the receipt of claims from moderators and examiners due to the lockdown restrictions. These vacant posts include two critical posts for the Deputy Director-Generals for TVET and CET programmes.

 

Expenditure on goods and services for the first quarter amounted to R43,6million against the budget of R157,3 million, translating into an underspending of 72,3% of the quarterly projected budget. This was attributed to a marked slowdown in activities due to the lockdown. Consequently, there was slow spending on operational expenditure. The Department had spent R36,66 billion on transfers and subsidies, excluding skills levy, against the budget of R42,57 billion. Underspending on transfers and subsidies amounted to R5,90 billion, which was attributed to delays in transfer payments to universities and TVET colleges.

2.1.2.  Overview and assessment 2020/21 first quarter service delivery performance

For the quarter under review, the Department had five planned targets shared amongst the four budget programmes: University Education, Skills Development and Community Education and Training. Of the five targets, two were achieved as planned and three were not achieved.

(i) Programme 1: Administration

The purpose of this programme is to provide strategic leadership, management and support services to the Department. For the first quarter, the programme had no planned targets. At the end of the 2020/21first quarter, the programme had spent R81,1 million against the budget of R117,3 million projected for the quarter. The programme recorded an underspending of R36,1 million or 30.8%. The underspending was mainly due to delays in the filling of vacant posts and delays in the receipt of invoices on operational expenditure due to the lockdown.

 (ii) Programme 2: Planning, Policy and Strategy

The programme aims to provide strategic direction in the development, implementation and monitoring of departmental policies and in the human resource development strategy for South Africa.There were no planned targets due for reporting during the quarter under review.  At the end of the first quarter, the programme had spent R41,8 million, recording lower than projected expenditure amounting to R9,7 million. This attributed to the vacant posts that could not be filled as projected.

 

(iii) Programme 3: University Education

The programme aims to develop and coordinate policy and regulatory frameworks for an effective and efficient university education system and to provide financial and other support to universities, the National Student Financial Aid Scheme and national higher education institutions. For the quarter under review, the programme had one target planned. The Historically Disadvantaged Institutions Development framework was not approved as planned. The Department reported the target date of end June 2020 was not met, however a draft report has been finalised and submitted to Ministerial approval.

At the end of the first quarter, the programme had spent R35,94 billion against the budget of R41,03 billion. Underspending amounted to R5,08 billion, translating into 12.4% of the available quarterly budget, attributed to delays on transfer payments to higher education institutions and departmental agencies and accounts as a result of the departmental cash flow management challenges in adherence to Section 29 of the Public Finance Management Act (PFMA).

 

(iv) 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. For the quarter under review, the programme had no planned targets. At the end of the first quarter, the programme had spent R2,09 billion against the budget of R3,16billion. Underspending amounted to R1,07billion, translating into 33.9% of the available quarterly budget. This was attributed to delays due to transfer payments to non-profit institutions that could not be made as projected due to adherence to Section 29 of the PFMA and delayed receipt of claims from examiners and moderators due to the lockdown restrictions.

(v) Programme 5: Skills Development

The programme aims to promote and monitor the National Skills Development Strategy. Develop skills development policies and regulatory frameworks for an effective skills development system.The programme had two targets due at the end of the first quarter, of which one was achieved and one not achieved. The Report on the implementation of the NSDS by the SETAs was developed and approved as planned. The lead time The average lead time from qualifying trade test applications received until trade test is conducted could not be measured because trade tests were not conducted due to the lockdown.

The programme had spent R69,3 million against the budget of R77,3million. Underspending amounted to R8,0 million, translating into 10.5% of the available quarterly budget.

(vi) 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 first quarter, the programme had two targets due for reporting. The original target to appoint a service provider for the development of a sustainable funding model was moved to the 2021/22 financial year and the Department reported on a new target as per the revised 2020/21 APP. The terms of reference for the appointment of a service provider to develop a sustainable funding model for CET centres were developed. The Report on the CET college sector performance was developed and approved as planned.

At the end of the first quarter, the programme had spent R566,6 million against the budget of R646,3 million. Underspending amounted to R79,7million, translating into 12.3% of the available quarterly budget, due to the delays in the filling of vacant posts as a result of the lockdown restrictions.

3. OVERVIEW AND ASSESSMENT OF THE 2020/21 REVISED ANNUAL PERFORMANCE PLAN

3.1. Introduction

On 21 April 2020, the President announced a R500 billion fiscal support package that included spending towards COVID-19 priorities. On 30 April 2020, National Treasury published the “Economic Measures for COVID-19”, outlining a R500 billion response, as well as identifying the funding sources for the package. Part of the funding sources for this package included a R130 billion baseline reprioritisation within the 2020/21 financial year. On 24 June 2020, the Minister of Finance tabled a Special Adjustment Budget for 2020/21 in terms of section 30(2) of the PFMA.

Consequently, the Department and its entities had to analyse the impact of the adjusted budget on their programmes, thereby reviewing the initial commitments in the 2020/21 APP. The revision of the APP took into account the impact of the adjusted budget allocations to programme delivery and the interventions towards mitigating the impact of COVID-19 pandemic. The Department tabled its revised APP on 31 July 2020 (ATC No 106 - 2020) and referred to the Speaker of the National Assembly to the Committee for consideration and reporting on 3 August 2020 (ACT No. 107 - 2020).

3.2. 2020/21 Revised APP

The Department’s strategic focus for the 2020/21 was not revised. However, the Department revised some of the targets. The table below illustrates the revised 2020/21 APP targets.

Table 5: 2020/21 Revised APP targets

Programme 3:

Outcome

Output indicators

2020/21 target as per original APP

2020/21 Revised APP target

 

 

 

 

 

 

 

 

 

University Education

Expanded access to PSET opportunities

A fee regulation framework submitted for approval for implementation in the 2021 academic year

A fee regulation framework submitted to the Minister for approval by 31 December 2020

Moved to 31 December 2021

A feasibility study to establish the nature and scope as well as the location of the new institution in the Ekurhuleni Metro submitted for approval

A feasibility study to establish the nature and scope as well as the location of the new institution in the Ekurhuleni Metro submitted to the Minister for approval by 31 March 2021

Moved to 31 September 2021

The Integrated Infrastructure Development Support Programme (IIDSP) for PSET submitted for approval

The IIDSP for PSET submitted to the Minister for approval for implementation by 30 September 2020

Moved to Programme 2: Planning, Policy and Strategy

Multifaceted student accommodation strategy developed and submitted to the Minister for approval

Multifaceted student accommodation strategy developed and submitted to the Minister for approval by 31 March 2021

Moved to Programme 2: Planning, Policy and Strategy

Improved success and efficiency of the PSET system

Number of scholarship or internship positions allocated to universities through the Nurturing Emerging Scholars Programme

 

50

Moved to 2021/22

Number of doctoral scholarships allocated to universities through the University Staff Doctoral  Programme for award to permanent instructional or research staff members

50

Moved to 2021/22

Improved quality of PSET provisioning

Draft revised reporting regulations for public universities submitted for approval

Draft revised regulations for public universities submitted to the Minister for approval for public consultation by 31 March 2021

Moved to 31 March 2022

 

A responsive PSET system

Implementation strategy and plan on the internationalisation of higher education approved for implementation

Implementation strategy and plan on the internationalisation of higher education approved by Director-General by 31 March 2021

Moved to 30 September 2022

University Education system target

Improved success and efficiency of the PSET system

Throughput rate of 2014 first time cohort at universities

55% (2014 cohort three to six-year undergraduate – contact and distance after year 6)

Removed from the 2020/21 APP

Technical and Vocational Education and Training

Improved quality of PSET provisioning

Number of TVET college lecturers holding appropriate qualifications supported to acquire professional qualifications annually

 

200

 

100

TVET system target

Expanded access to PSET opportunities

Number of student enrolment at TVET colleges annually

 

700 000

 

680 000

Skills Development

Expanded access to PSET opportunities

Annual number of learners or students placed in workplace learning programmes

 

170 000

 

100 000

Number of learners registered in skills development programmes annually

 

146 000

 

150 000

Number of learners  entering artisanal programmes annually

 

30 5000

 

20 000

Improved success and efficiency of the PSET system

Number of artisans found competent annually

 

24 500

 

19 000

Number of learners who completed learnerships annually

 

50 000

 

30 000

Number of learners who completed internships annually

 

7 000

 

4 550

Community Education and Training

Expanded access to PSET opportunities

Sustainable funding model for CET centres approved

Service provider for the development of a sustainable funding model for CET centres appointed by 31 March 2021

Moved to 31 March 2022

 

New target for 2020/21

 

Terms of Reference for the development of the sustainable funding model for CET colleges approved by 31 March 2021

 

CET system target

Improved success and efficiency of the PSET system

Number of CET lecturers trained

 

2 440

 

1 220

 

University Programme: Six of the 2020/21 targets under the University Programme have been moved to the next financial year and two targets, the IIDSP for PSET submitted to the Minister for approval for implementation by 30 September 2020 and the multifaceted student accommodation strategy developed and submitted to the Minister for approval by 31 March 2021 were moved to programme 2: Planning, Policy and Strategy. On 14 May 2020, the Minister reported to the Committee that he planned to reassign all infrastructure development functions from all the DHET branches to Planning, Policy and Strategy programme. Notably, the 55% throughput rate of 2014 first time cohort at universities target has been removed from the 2020/21 APP.

Technical and Vocational Education and Training:Three targets have been adjusted downwards; the number of student enrolments at TVET colleges had to be reduced to 680 000 from the original target of 700 000 due to the budget cut and the suspension of trimester three and semester two of the 2020 academic year. The number of TVET college lecturers supported to acquire professional qualifications has also been reduced from 200 to 100 in 2020/21 and thereafter 250 per annum from 2021/22. The main impact of the budget cut will be on the 2021 new student intake for the Centres of Specialisation, as the funding that was due in January 2021, has been reprioritised for COVID 19 related expenditure.

Skills Development:The skills development levies contribution four-month holiday to respond to the socio-economic impact of COVID-19 has adversely impacted the revenue of the Sector Education and Training Authorities (SETAs) and the National Skills Fund (NSF). The loss of income for the SETAs and the NSF amounting to R8 billion impacted on the ability of the entities to provide skills training interventions. Six targets under this programme have been revised downwards.

Community Education and Training:The target on the number of CET college lecturers trained was revised downwards from the initial 2 440 to 1 220. This is due to the reprioritisation of funds in Colleges for COVID-19, which impact on the transport funding to support lecturers attending workshops/ programmes.

4. OBSERVATIONS

The Portfolio Committee having considered the quarterly reports of the Department for the second, third, fourth quarter 2019/20 and first quarter 2020/21 and Revised APP 2020/21, made the following observations:

4.1.       The Committee commended the Department for spending 99% of its budget for the 2019/20 financial year, which indicated that work has been done.

4.2.       The Committee expressed its concern that the CET programme which is the least funded of the Departmental programmes incurred underspending during the 2019/20 fourth quarter. Furthermore, the non-achievement of some of the key targets in the programme were noted with serious concern. The Department indicated that lower than projected spending in the programme was attributed to the savings on compensation of employees due to the outstanding claims of lecturers who are paid through Persal because they are permanent employees of the Department of Basic Education (DBE) and outstanding claims of the examiners and moderators.

4.3.       The slower than projected spending in TVET college infrastructure grant during the three quarters of the 2019/20 financial year was noted as a concern. The Department indicated that the inadequate capacity and expertise needed upfront to determine infrastructure costs and requirements of TVET colleges remains a concern. In mitigating the challenge, the Department committed to appointing project managers at TVET colleges. The Department was confident that the expenditure would grow rapidly given the submissions made by colleges for infrastructure repairs and maintenance.

4.4.       The Committee reiterated its concern with respect to the underfunding of the TVET and CET sectors. The Department indicated that 82 percent of its total budget is allocated to the University Education programme, and these were voted funds approved by Parliament. The Department emphasised that additional funding is required for the baseline increase of the TVET and CET funding.  However, the fiscus is currently constraint.

4.5.       The Committee expressed its concern about the non-achievement of the 3-month target to issue certificates to TVET college students. The Department indicated that it remained committed to reducing the certification backlog and the target for day zero backlog has been shifted to March 2021.

4.6.       The Committee expressed its concern about the delays in the appointment of the project team for the feasibility study to establish the nature, scope and location of the two new universities in Gauteng. Additionally, the Committee was concerned about the R5 million allocated for the feasibility studies of this project, which seemed insufficient. The Department indicated that the Minister appointed the project manager to oversee the project on what it takes to build the two new universities in Gauteng. The impact of the Covid-19 lockdown contributed to the delays in the appointment of the project management for the establishment of the two universities. The costs of establishing the new universities would be determined by the feasibility study to be undertaken.

4.7.       The inability of the Department to develop the Continuing Education and Training Act, 2006 (Act No. 16 of 2006) regulations for the TVET colleges due to restriction by the Act was noted with concern. The Department indicated that it received advice from its state law advisers who indicated that the Minister was not allowed to develop regulations for TVETs due to the lack of legislative provisions to enable regulations. Alternatively, the Department developed determinations which are just guidelines and not enforceable. The Committee advised the Department to consider amending the CET Act to allow for the development of the regulations.

4.8.       The Committee expressed its concern with respect to the delays in the filling of senior management posts in the Department, in particular, the DDGs for TVET and CET. The Department indicated that the Covid-19 lockdown had an impact withrespect to the filling of vacancies in the Department. During the lockdown level 5 and 4, there were no posts advertised as directed by the Department of Public Service and Administration (DPSA). In addition, the labour unions in TVET colleges also opposed to the scheduling of interviews virtually as it was not part of the policy. The DDGs and managerial posts would also be advertised/published in the Sunday newspapers on 22 August 2020. TVET colleges were also given clearance to fill vacant posts.

4.9.       The Committee expressed its concern with respect to the delays in the procurement of digital devices to enable students to access online learning equitably. The Department indicated that the majority of universities managed to procure digital devices for students internally. However, others were still in the process of procuring laptops. In respect to TVET colleges, online learning had not been the main teaching and learning method during the lockdown period. Instead, the utilisation of multimodal strategies for learning had been implemented.In addition, contact learning at colleges was ongoing, and the Engineering Trimester 1 students successfully wrote their exams in June 2020.

4.10.     The Committee expressed its concern with regard to the impact of the four-months skills levy payment holiday on SETAs and the overall impact of the lockdown period on the funding of other PSET institutions.

4.11.     The Committee enquired about the impact of the budget cuts from infrastructure development programmes for the PSET system. The Department indicated that the R750 million cut from universities in 2020/21 would not be recovered, however, universities would receive funds for the next financial year. In respect to TVET colleges, there was no funding for new infrastructure development. The existing funding was earmarked for infrastructure repairs and maintenance.

 

5. SUMMARY

The Committee was generally pleased with the overall performance of the Department for the quarters under review. The 99% spending of the budget showed that work had been done during the period under review. The Department had 60 annual targets, and 29 system targets during the 2019/20 financial year, totalling 89 targets. For the 2020/21 first quarter, there were five (5) targets due for completion, and two (2) targets were achieved. It was worth noting that there was no irregular expenditure reported for the period under review.

 

The Committee’s main concerns related to the few targets that could not be achieved as planned, particularly in the core delivery programmes of the Department. The delays with the filling the of senior management posts within the Department, in particular the DDG posts have been an ongoing concern and the Committee urged the Department to finalise these matters. The Committee also acknowledged the negative impact of the Covid-19 lockdown period on the PSET system and the budget cuts effected as a result of the special adjustment budget tabled on 24 June 2020. The Committee committed to supporting the Department in its quest to obtain additional funding to reduce the disparities in the funding of the core delivery programmes such as TVET and CET programmes.

 

 

 

 

 

6. RECOMMENDATIONS

The Committee recommends that the Minister of Higher Education, Science and Innovation consider the following:

6.1.       The filling of the senior management posts within the Department be expedited.

6.2.       The appointment of the project team to oversee the establishment of the two new universities in Gauteng be expedited. In addition, additional funding is required to undertake the feasibility studies.

6.3.       Concerted effort be put to ensure that the target of issuing certificates within three months after completion of exams in TVET colleges is implemented.

6.4.       The Department should ensure that the procurement of digital devices for students is expedited so that students are able to access online learning.

 

Report to be considered.

 

 

Documents

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