ATC201204: Report of the Portfolio Committee on Higher Education, Science and Technology on the 2020/21 Second-Quarter Performance Report of the Department Of Higher Education and Training, dated 4 December 2020

Higher Education, Science and Innovation

REPORT OF THE PORTFOLIO COMMITTEE ON HIGHER EDUCATION, SCIENCE AND TECHNOLOGY ON THE 2020/21 SECOND-QUARTER PERFORMANCE REPORT OF THE DEPARTMENT OF HIGHER EDUCATION AND TRAINING, DATED 4 DECEMBER 2020

 

The Portfolio Committee on Higher Education, Science and Technology (hereinafter referred to as the Committee), having considered the 2020/21second quarter performance report and the Department of Higher Education and Training (hereinafter referred to as the Department), reports as follows:

1. INTRODUCTION

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 objectives and 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).

To give effect to the requirement of Section 5 of the Money Bills Act, the Committee considered the 2020/21 second quarter performance reportof the Department on 17 November 2020.

 

 

 

 

2. OVERVIEW AND ASSESSMENT OF THE DEPARTMENT’S SECOND-QUARTER FINANCIAL AND SERVICE DELIVERY PERFORMANCE

2.1. Overview of the second quarter allocation and expenditure

Table 1: Budget allocation and expenditure for the second quarter of the 2020/21 financial year

Programme	Main Appropriation   R’000	Special Adjusted Appropriation R’000	Q2 Actual Expenditure   R’000	Expenditure as % of available budget %	Q2 Projected expenditure %	Underspending     R’000	% Underspending   R’000
Administration	491.2	445.5	173.5	38.9%	201.6	28.1	13.9%
Planning, Policy and Strategy	214.5	198.1	86.6	43.7%	93.7	7.2	7.6%
University Education	80 083.4	79 177.7	67 079.2	84.7%	68 437.9	1 358.8	2.0%
Technical and Vocational Education and Training	13 813.6	13 074.2	5 407.6	41.4%	5 617.2	209.6	3.7%
Skills Development	318.5	300.1	134.2	44.7%	144.2	9.9	6.9%
Community Education and Training	2 522.9	2 514.0	1 012.5	40.3%	1 254.9	242.3	19.3%
Sub-total	97 444.0	95 709.6	73 893.6	77.2%	75 749.5	1 855.9	2.5%
Direct charges	19 412.9	11 290.5	4 533.9	40.2%	7 207.0	2 673.1	37.1%
SETAs	15 530.3	9 032.4	3 637.1	40.3%	5 765.6	2 128.5	36.9%
NSF	3 882.6	2 258.1	896.8	39.7%	1 441.4	544.6	37.8%
Total	116 856.9	107 000.1	78 427.5	73.3%	82 956.5	4 529.0	5.5%

Source: National Treasury, 2020

The Department’s total budget after the special adjustments amountedto R107,00 billion, from an initial appropriation R116,86 billion. The budget was comprised of R97,70 billion of voted funds and R11,29 billion of direct charges against the National Revenue Fund. At the end of the second quarter of 2020/21, the Department had spent R78,42 billion, against the projected expenditure of R82,95 billion, inclusive of the direct charges against the National Revenue Fund.Excluding the direct charges, the Department’s expenditure amounted to R73,89 billion, or 77.2% of the available budget of R95.70 billion. Underspending at the end of the quarter amounted to R1,85 billion or 2.5%, due to the delays in the transfers of earmarked grants to universities in respect of block grants and earmarked grants that were not transferred as projected. Other contributing factors were vacant posts that could not be filled and reduced spending on operational expenditure due to Covid-19 restrictions.

Expenditure on goods and services for the second quarter amounted to R105,6 million against the projected expenditure of R205,6 million or 19.2% of the available budget. Underspending amounted to R100,1 million, translating into an underspending of 48.7% of the quarterly projected expenditure. This was attributed to a marked slowdown in activities due to the lockdown. Expenditure on transfers and subsidies at the end of the second quarter, including direct charges against the National Revenue Fund, amounted to R73,98 billion. The Department recorded an underspending on transfers and subsidies on voted funds amounting to R1.37 billionor 1.9% of the projected quarterly expenditure.

 

2.1.2.  Overview and assessment 2020/21 Second-Quarter service delivery performance

For the quarter under review, the Department had six planned targets shared amongst the four budget programmes, namely: Administration, University Education, Skills Development and Community Education and Training. The overall performance at the end of the quarter was 50%, achieving three of the six targets.

(i) Programme 1: Administration

The purpose of this programme is to provide strategic leadership, management and support services to the Department. The programme had one target for the quarter under review, which was achieved. The Department received an unqualified audit opinion from the Auditor-General of South Africa (AGSA) and developed a remedial plan to address the audit findings. During the Quarter, the programme had no planned targets. At the end of the Second-Quarter, the programme had spent R173,5 millionagainst the projected expenditure of R210,6 million, with lower than projected spending amounting to R28,1 million or 13.9% of the quarterly projected expenditure. The underspending was ascribed to lockdown restrictions, which impacted on the filling of vacant funded posts and department operational expenditure items such as operating leases, travel and subsistence, training and development of employees, hiring of venues and usage of facilities.

 

 

(ii) Programme 2: Planning, Policy and Strategy

The programme aims to provide strategic direction in the development, implementation and monitoring of departmental policies and the human resource development strategy for South Africa.There were no planned targets due for reporting during the quarter under review. The programme had spent R86,6 million or 43,7% of the available budget, with lower than projected expenditure amounting to R7,2 million, or 7.6% of the quarterly projected expenditure. This was ascribed to the delays in the filling of vacant funded posts and limited operational activities due to lockdown restrictions.

(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 two targets planned. The performance was 50%, achieving one of the two planned targets. The Department did not achieve the target on the number of Intergovernmental International Scholarships Forum meetings convened annually due to lockdown. The Department stated that the meeting had been rescheduled to take place during the third quarter.

The programme had spent R67,07 billion or 84.7% of the available budget, translating into a lower than projected expenditure amounting to R1,35 billion, or 2.0% of the quarterly projected expenditure. The lower than projected spending was attributed to the delays in the transfer payments to higher education institutions for the block grant and earmarked grants to universities: University Capacity Development Grant (UCDG), Historically Disadvantaged Institutions Development Grant (HDIG) and University Infrastructure and Efficiency Grant (UIEG). These grants could not be processed as initially projected because the universities failed to submit their audited reports on time. The Department stated that the payments have been rescheduled to be processed in the Third-Quarter of 2020/21.

(iv) Programme 4: Technical and Vocational Education and Training

The programme aims 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.

The programme had spent R5,41 billion or 41.4% of the available programme budget, translating into a lower than projected expenditure amounting to R209,6 million, or 3.70% of the quarterly projected expenditure. The underspending was attributed to vacant funded posts that could not be filled as projected due to the limited operational activities under lockdown restrictions and delayed receipt of claims from examiners and moderators for services already rendered in 2019/20 financial year and August 2020.

(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.In the Second-Quarter, the programme had two targets, of which one was achieved. The target that was not achieved was the 40-days average lead time from qualifying trade test applications received until trade test is conducted.  The Department stated that trade test applications received for testing could not be measured due to lockdown restrictions. However, a process was underway to deal with the backlog of candidates that were already booked, but could not be tested during the lockdown.

At the end of the second quarter, the programme had spent R134,2 million against the projected expenditure of R144,2 million, with lower than projected spending amounting to R9,9 million or 6.9% of the quarterly projected expenditure. The underspending was ascribed to vacant funded posts not filled as projected as well as operational expenditure items such as inventory materials and supplies, travel and subsistence and business advisory services due to limited operational activities under lockdown restrictions.

(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. The programme had one target during the quarter under review and was not achieved as planned. The target ofbi-annual report on teaching and learning improvement plans was not achieved because the monitoring of teaching and learning could not take place due to the lockdown and as a result, the monitoring report could not be produced as planned.

At the end of the second quarter, the programme had spent R1,01 billion against the projected expenditure of R1,25 million, with lower than projected spending amounting to R242,3 million or 19.3% of the quarterly projected expenditure. The underspending was mainly as a result of delayed receipt of claims for the remuneration of Community Education and Training (CET) College lecturers, vacant posts as a result of post provisioning norms and standards not yet been finalised and difficulties in securing suitable candidates.

4. OBSERVATIONS

The Committee, having considered and deliberated on the 2020/21 Second-Quarter performance report of the Department, made the following key observations and findings:

 

4.1.       Programme 1: Administration

4.1.1. The Committee commended the Department for making it mandatory that candidates get their foreign qualifications evaluated by the South African Qualifications Authority (SAQA) prior to applying for the advertised posts.

4.1.2. The projected underspending on compensation of employees due to the Department of Public Service Administration (DPSA) Circular to halt the recruitment process during the lockdown level 5 and 4 was noted.

4.1.3.    The delays by the Minister in providing the information requested by the Committee was noted as a concern.

 

4.2. Programme 2: Planning, Policy and Strategy

4.2.1.    The recurring reasons for variance in terms of non-achievement of targets was noted with great concern. This may be an indication that mechanisms put in place to address the causes for underachievement in the previous quarters are not followed through.

4.2.2. The Committee expressed its concern with regard to the planning and reporting of the targets by the DHET in the quarter under review. The Committee advised the Department to evenly distribute the setting of targets in each quarter to avoid the over concentration of the targets in the last two quarters of the financial year.

4.3.4. The Committee was generally concerned about the recurring under-achievement of set targets by the Department which reflected lack of consequence management for poor performance. For the quarter under review, only 50% of the targets set were achieved.

 

4.3. Programme 3: University Education

4.3.1.    The bulk of the R79 billion budget in the University Programme is apportioned to the universities and the National Student Financial Aid Scheme (NSFAS). However, there is a challenge of adequate accountability of the institutions. The Department indicated there were regulations to hold institutions accountable and that it had monitoring and evaluation programmes to support higher education institutions (HEIs).

4.3.2. The Committee expressed a concern about the few targets reported under the University Education (UE) programmes for the quarter under review. The Department indicated that it had 33 targets for the UE programme for 2020/21, and only two for the quarter under review. Progress on the achievement of the other targets would be reported in the remaining two quarters of 2020/21.

 

4.4. Programme 5: Skills Development

4.4.4. The Committee was concerned about the non-achievement of the target to have 40-days lead time to process trade test applications received for testing and its impact of this on the employability and self-employment of those who require trade test certificates, given that no trade tests were conducted in the first and second quarter of 2020/21 due to the lockdown. The Department indicated that it had tested 386 candidates who have applied before lockdown and subsequent to the easing of the lockdown, the Departmentreceived 121 applications, which would be processed during the months of November and December 2020. The majority of the trades affected included diesel mechanics, electrician, fitting and turning.

4.4.2.    The impact of the four months’ skills leviespayment holiday on the performance of the Skills Development programme targets, especially placements for work-based learning and artisan development was noted with great concern. The Department noted that the skills development programme lost R6 billion as a result of the four months’ skills payment holiday.

 

4.5. Programme 6: Community Education and Training

4.5.1. The Committee was concerned that the target on the report on monitoring of teaching and learning in the sector was not achieved. The Department stated that monitoring could not take place during the lockdown and it could not be done retrospectively as it is a real-time event.

 

5. Summary

The Department’s total budget after the special adjustments amounte to R107,00 billion, from an initial appropriation R116,86 billion. At the end of the Second-Quarter of 2020/21, the Department had spent R78,42 billion, against the projected expenditure of R82,95 billion or 73.3% of the available budget, inclusive of the direct charges against the National Revenue Fund. Overall underspending at the end of the quarter amounted to R4,52 billion (R1,85 billion of voted funds and R2,67 billion from direct charges against the National Revenue Fund) or 5.5% of the projected quarterly expenditure.

 

The Department had achieved 50% of the six planned targets. The nationwide lockdown to respond to the impact of Covid-19 impacted on the achievement of the targets. Remedial plans have been put in place to address the causes of underachievement.

 

6. Recommendations

The Committee, having considered and deliberated on the 2020/21second quarter performance report of the Department, recommends that the Minister of Higher Education, Science and Innovation consider the following:

6.1.       The Minister should comply with the constitutional obligation to account to Parliament, by ensuring that requests for information sent to the Ministry are responded t, in order enable the Committee to exercise its oversight function over institutions in the PSET system.

6.2.       The Department should improve its spending to avoid reprioritisation by National Treasury of funds meant for the expansion of access to and success in education and training to other priorities of the government.

6.3.       The Department should monitor implementation of remedial plans to address the underachievement of targets.

6.4.       There should be an engagement within the PSET sector on institutional autonomy and accountability of higher education institutions.

6.5.       The Department should expedite the processing of trade test applications to ensure that production of artisans is accelerated.

6.6.       The Committee plans to conduct an oversight visit to the Community Education and Training (CET) Colleges and Learning Centres.

           

Report to be considered.