SA Qualifications Authority, National Student Financial Aid Scheme Strategic Plans 2013/14, in presence of Deputy Minister

Meeting report

South African Qualifications Authority (SAQA) Strategic Plan 2013/14
Ms Vuyelwa Penxa, Board Deputy Chairperson, outlined the board and committee structures of the South African Qualifications Authority (SAQA). It comprised of 12 members nominated by the Education and Training sectors. SAQA had four chief executive offices. There were ten committees in the Board (see attached presentation for details).  

Mr Joe Samuels, Chief Executive Officer, SAQA, said that board aimed to put into practice a single National Qualifications Framework (NQF), facilitate access, mobility and progression, enhance equality of education, accelerate the equality, and contribute to individual development of each learner and broad development of society. SAQA would be developing, fostering and maintaining an integrated and transparent framework for the recognition of learning, ensuring the qualifications met appropriate criteria and were acceptable. SAQA now had achieved 15 unqualified successive audits.

Mr Samuels outlined the environment within which SAQA worked, noting that the Ministerial priorities included the Green Paper for post-school education and training, Ministerial guidelines on strategy, and determination of sub-frameworks. The priorities included ensuring sufficient articulation within the NQF and providing advice on sub frameworks. SAQA would be attaching qualifications to the frameworks and it had do scoping exercises and publish the policies. The Minister had also asked for clarification on various relationships, advice on a Level 5 type qualification at Umalusi, and that SAQA study and report on occupational qualifications from levels 7 to 10 and frame draft policy on the principles.

SAQA was also concentrating on development of a fraud combat strategy, including the whistle blowing process, was leading the recognition of National Certificates in Vocational work and occupational qualifications, was doing an independent evaluation of the Careers Advice Services (CAS) project and expanding its database on community organisations delivering these services. It had responded the requests from the Department of Higher Education and Training (DHET) for assistance with the “Apply Now” campaign, was assisting with the Central Applications Clearing Process and taking on the function of the Joint Matriculation Board.

Mr Samuels said that since SAQA had not presented its annual report for 2012/13, he wanted to highlight some achievements from that year. There had been a focus on servicing lifelong learners through the careers advice framework, articulation, recognition of prior learning (RPL) and staff development.

He tabled statistics from the database. In the higher education sector, there were around 13 million learners, and 1 236 registered qualifications, with 11 474 unit standards and a total of nearly 20 000 providers. SAQA had recognised 48 professional bodies, of whom two had successfully loaded data on to the database by March 2013. The number of people recorded thus far on the National database against registered designations was 23 453, with 23 202 loaded by the South African Institute of Chartered Accountants.

He reminded Members that SAQA also evaluated foreign qualifications, and there had recently been an increase in the number of applications. It verified qualifications for the Department of Public Service and Administration (DPSA). He specified the website, Facebook and helpline contacts with the career advice project.

Other highlights included convening a think tank workshop, preparation of a draft articulation policy, hosting a research conference, allocation of qualifications and providing advice to the Minister. DHET as assisted to develop a framework of cooperation on career advice, and to develop a National Careers Advice Portal (NCAP). He had mentioned the Apply Now campaign, but SAQA also helped with the Mandela Day Careers Festival, and had done follow up on the impact of previous festivals, and would return to the areas to conduct further seminars. The final policy and criteria for RPL were finalised and would shortly be circulated. Its events included roadshows, launch of professional bodies, publication, research and radio outreach. It had implemented the policy on professional bodies, and on registration of qualifications and part-qualifications.

In the internal staff development process, SAQA was retaining the Investing in People standards. It had reestablished the Advocacy Communication and Support (ACS) Directorate.

Mr Mark Albertyn, Chief Financial Officer, SAQA, set out a comparison of the budgets and projections over the period 2012 to 2015 (see attached presentation for full details). He explained that SAQA came up with a number of scenarios, and Scenario 1 would outline all plans from a nil basis, whilst Scenario 2 assumed partial funding. Scenario 3, which was presented, recognised that there were insufficient funds to do what was ideal and therefore planned on that basis. One of the constraints in this year was that there were no rollovers, as in the past. SAQA had never received a budget sufficient to fund its full mandate. It always undertook fundraising, partnerships and joint agreements with the Sector Education and Training Authorities (SETAs). The overall revenue would drop because the CAS project would end on 31 August 2013, with no funding committed after that. Expenses such as the costs of the Auditor-General were rising by around 8%, yet SAQA’s income from the government grant saw only a 5.5% increase. SAQA was increasing the staff salaries by about 6.4% (compared to above 7% in the rest of the public service), and had also had to increase the number of staff, so the mismatch between income and expenditure was not sustainable. Staff costs amounted to around 62.5% of total budget. SAQA had cut six (non-filled) posts, cut staffing centre provisions, was considering charging fees for conference attendance and publications, and was considering other budget cuts.

SAQA was now required to have a more expansive view of the NQF. New functions had been added, and new priorities assigned but without the necessary additional funding resources. The standards setting and quality assurance functions under the SAQA Act that were moved to the Quality Councils were undertaken with funds from donor organisations, and partnerships with the SETAs.

Mr Albertyn presented a table on the total funding requirements for this year and emphasised the three year project that required digitisation of data prior to 1992. SAQA faced a huge reputational risk around  verification of qualifications and more staff would be needed in this area. It hoped to raise awareness of the NQF to 100% by 2016. R5 million was needed for the counter-fraud strategy. Support directorates would require R2.5 million, to deal with RPL and accreditation and transfer.

The current budget fell R10 million short of what SAQA ideally required. It had therefore needed to increase fees for services on recognition. It had not been able to implement broadband incentives for staff, and had both cut and not filled staff posts. It would be closing the NQF website. The limited budget constrained the ability to operate at high levels on IT, meant that no support could be given to the SADC regional process, and that SAQA would have to cut down on travel to conferences and exhibitions, some of the outreach to the deepest rural communities, and some information and communication strategies and research.

Ms Julie Reddy, Deputy Chief Executive Officer, SAQA, noted that the Annual Performance Plan (APP) focused on broad strategic objectives of providing bold leadership in the transfer from the NQF Act, interacting with the Green and White Papers and ensuring that all partner organisations would contribute t an effective system. SAQA was focusing, in this year, on value add, transformation, staff, research credibility, and was working to have a system of recognized, quality, articulated learning and career paths, and was removing systemic barriers to access. All this must be backed up with effective governance structures, and good human, IT and communication resources. She reiterated that in this year SAQA would attend to articulation. The Credit Accumulation and Transfer Policy and the Assessment Policy were being developed, and SAQA would be contributing to policy formulation and legislation. SAQA’s work involved enhancement of relationships with stakeholders and it collaborated with the quality councils. The integrated communications strategy was geared to primary beneficiaries and staff. Research was disseminated so that others could engage with it. SAQA would be conducting events, impact studies, awareness studies and liaison with international counterparts, such as its recent assistance to China, Ethiopia and the Seychelles in developing their NQFs. It was constantly looking to and learning from international trends.

In relation to staff, she said SAQA aimed to promote a conducive working environment and effective performance. Slide 55 set out what would be included in the articulation, through the careers helpline, registration of qualifications and recognition of professional bodies and support for national and international mobility. Both internal and external audits boded well, the board was managed effectively, and committees were effective. Systems uptime was high for IT, between 98 and 99%, and it was constantly monitoring information security, and had an effective disaster recovery site.

Career Advice Services and the National Career Advice Portal (NCAP)
Ms Ntsiki Gumbe, Director in the Executive Office, SAQA, gave a presentation on the National Career Advice Portal (NCAP), illustrating for Members how this would work. The portal was in the process of being developed and was essentially a self-help, web-based tool assisting citizens in finding careers of their choice, providing updated information on learning pathways and tools. It was aimed at younger and older learners, teachers and parents, and advisers. It could be accessed via the SAQA Career and Advice Services Website, by clicking on a banner to lead to the NCAP portal. There were various ways to search, including a questionnaire that learners could fill out if they were not sure what they wanted to do, which would isolate some likely careers for them to consider. This would then give further information on each field, listing sub-occupations and describing the typical day-to-day tasks. Learning pathways were then outlined, and advice was offered on the possible institutions who were offering courses. For a career that was covered by a professional body, there was also information on how to register with the professional body, as it was vital for learners to be made aware of all the requirements.

The portal also allowed for a search by institutions, although it was currently only populated with the public higher education institutions, both universities and FET Colleges. It was also possible to browse by type of qualifications, such as certificates and diplomas, or NQF level.

Future additions would enable the portal to keep portfolios of users who completed the questionnaire, which would assist them later to compile CVs. There were currently about 500 occupations on the portal, but this would be increased to about 1 200. There were plans to integrate this with Employment Services South Africa, managed by the Department of Labour (DOL) and it was intended to include notes on interviews with those already in the field. SAQA would be looking at the labour market intelligence system and make the portal available on mobisites.

Discussion
Mr K Dikobo (AZAPO) noted that SAQA was to present its strategic and annual performance plan and said that although SAQA had provided valuable information in the presentation, he felt he was not given enough details on the programmes, the targets, the costs per programme and how SAQA would be held accountable. For this reason, he would have difficulties in supporting the budget requests.

Mr Samuels said that a detailed document had been submitted more than a month ago, and this presentation was merely a summary. All the targets were set out on pages 13 and 14 of the detailed document. He reiterated that he had spent some time describing the achievements because the Committee had not invited SAQA to present its last Annual Report and it was for this reason also that the presentation did not, as was usual, tabulate the questions that the Committee had raised.

Mr A Mpontshane (IFP) noted, and the Chairperson also commented upon the fact that the documentation had been received late. It should have been with the Committee three days prior to the presentation.

Mr S Makhubele (ANC) agreed and said that in other instances where this had happened the Committee had sent the presenters away. SAQA should be leading by example and presenting documents timeously, to allow Members to do their oversight fully.

Mr Samuels said that the documentation was sent from SAQA’s office more than a month ago; he had signed the accompanying letter on 7 March. SAQA had tried hard to meet all the deadlines. The booklet was delivered to Parliament well in advance, in case Members wanted to circulate it to constituencies.

The Chairperson asked the Committee Secretariat to explain who had delivered the documents to Members. Similar problems had arisen on other days, and he thought that if Parliament or DHET were holding documents back, he questioned why and how this could be addressed.

The Committee Secretary said that the documents with the strategic plans were distributed on Monday.

A Member said that this was still not acceptable. If the documents were sent in March, they should have been circulated long ago.

Mr Dikobo also commented that he had emptied his pigeonhole shortly before leaving at 7pm on Monday, and the documents were not there; he had found them only this morning.

The Chairperson said that he would investigate it further. 

The Chairperson asked whether the DHET was involved when SAQA formulated its plans and budget, and what its reaction had been to the request for an addition R10 million (ideally R20 million) budget.

Mr Samuels said he had sent a letter to the Minister on 11 August and met on 29 January. The Minister had asked one of the Deputy Director Generals of DHET who was dealing with planning to meet with SAQA and a similar presentation to this one was given to the Department. The Minister had approve the APP and the budget. SAQA had made it quite clear that if it did not get additional allocations, it would be unable to attend to specific tasks.

The Chairperson said that there was recently a scandal around the acquisition of degrees at Venda University by students who had falsified their matriculation results. Umalusi had said that the national learners’ register was kept by SAQA. He wondered how easy it was to forge the results, and how this could be solved, suggesting that perhaps SAQA, Higher Education South Africa, Umalusi and others needed to meet to cross-check their databases.

Mr Dikobo thought that surely universities should have a direct line for verification, to those dealing with the matriculation results.

Mr Samuels said that he had too had heard the radio interview with Umalusi. At the end of the year, the electronic information about people’s results was sent to Higher Education South Africa (HESA) and it should be available for checking. In addition, if there was a problem, people could approach SAQA and verify its information. The Universality of Venda had not approached SAQA, but it should in any event have had the information to enable it to accept or reject learners. He suggested that all universities should be encouraged to use the information provided to them to do the verification. It was available for all matriculants after 1992, and SAQA had an arrangement with Umalusi that it would verify information if required.

Dr L Bosman (DA) asked, in relation to slide 20, what happened about the pre-1992 information, as there were a number of students who had not been able to get certification. In 2012 there were 136 000 records not found, received or processed. He wanted more details on this and questioned if the challenges were that the records did not exist, or the institutions were not registered.

Mr C Moni (ANC) added that he hoped that there was funding to deal with this. The Committee needed to know when this exercise was likely to be concluded, and what it might mean if institutions were not any longer offering the qualifications. He needed to know what was being done.
 
Mr Samuels answered the questions on the pre-1992 qualifications by stressing that this involved around 10 million records that had to be transferred from paper format and from a variety of different sources. SAQA needed additional funding to attend to this. 

Mr Dikobo noted the intention to charge fees for conference attendance, but asked who would be charged and what impact this would have. He would not like to see access hindered.

Mr Dikobo wondered if the inclusion of private colleges and education institutions on the NCAP portal would be done against a fee. He fully understood why public colleges, which were already funded from the fiscus, were not charged.

Mr Samuels said this had not yet been considered, but the more important aspect was to have a comprehensive database to show where people could acquire registered and accredited qualifications. He noted the numerous concerns in the past about the fly-by-night institutions and said that everyone listed on the portal would be registered and accredited.

Dr Bosman congratulated the SAQA on a clean audit. He noted that if SAQA was R10 million short on its requested budget, this must be urgently addressed. Having too little funding would be disastrous for the proper functioning of SAQA and the NQF, particularly if key posts, such as those for data capturing, could not be filled.

Mr Samuels commented on all issues around the shortfall and said that SAQA was trying to minimise the impact. It was levying charges for verification, but was mindful of the potential risks of limiting access. The reality was that over all the years, SAQA had never received sufficient funding to carry out its mandate, and last year the voted funds were less than 40% of funding. In this year, the voted funds comprised about 48% of requirements.

Mr Dikobo asked why the funding for the CAS project was coming to an end.

Mr Moni also noted that CAS was supposed to be a lifelong activity. Other stakeholders could be dealing with similar projects, and he wondered how lack of funding would impact on the process, and what might be picked up by some other stakeholders.

Mr Samuels said that this was a Ministerial flagship project. From the outset, it was clear that this would be a three-year project, with money made available by the National Skills Fund (NSF). It was due to end on 31 August 2013. The SAQA had had interactions with the Department, was in the process of defining a proposal and would submit it. However, it had concerns about the possible loss of staff and infrastructure so this issue to be resolved as soon as possible. He agreed that career advice was vitally important and was not sure exactly why the National Treasury did not create a separate line item for careers advice, that would not be “ignored”. Last year, SAQA had attended a study tour to Leicester, and had found that there was a specific budget with its own line item, for offering career advice to school learners and lifelong learners. He thought that this was something that the National Treasury, not necessarily the Minister, must address.

Mr Dikobo commented that there was a very short time between May and August, for people in those positions to make a decision. He wondered why this was not sorted out last year. It might have been possible to speak to the Minister on this earlier. He thought, in principle, that careers advice was so important that it should never be done away with, and that budgets must always be found for it.

The Chairperson asked the Department to comment.

Mr Shai Makuba, Chief Director: Financial Planning, DHET responded, firstly, on the overall budget, agreeing that SAQA had informed the DHET, from August 2012, that the challenges needed to be addressed. A bid was submitted last year to National Treasury by DHET, but was not supported, so DHET had to look at reprioritising its needs. It recognised that SAQA was performing well, as evidenced by the unqualified audits, and recognised the need to maintain that service and standards. Instead of lamenting the lack of resources, DHET recognised that National Treasury was faced with tough choices and DHET must make a plan. DHET was trying to ensure that priority projects were included in the SAQA baseline funding, and this would apply to CAS. DHET was aware of the looming deadline, and was determined that the gains made over the last few years should not be lost. CAS would not be closing down altogether, as DHET, although it could not meet the full budget, would make internal adjustments, and there had been engagement with colleagues from the National Skills Fund (NSF). One of the issues related to the planning between the DHET and SAQA. In all cases, DHET would assess whether the budgets of entities were aligned and linked to the Departmental priorities, and would not approve any that appeared to be mismatched. However, DHET had been happy with the outcomes of the CAS project, and there would definitely be a reprioritisation to ensure that CAS continued beyond 31 August.

The Chairperson said that this topic should be raised for debate in the House by Members during the budget process.

Mr Mpontshane noted that one of the objectives was to develop a fraud combating strategy, and he asked what the status was, as he did not see any explanation of that. In KwaZulu Natal (KZN) a number of teachers had obtained fraudulent certificates.

Mr Samuels confirmed that SAQA was aware of and investigating the problems in KZN. SAQA needed to improve its capacity to detect fraudulent qualifications. It had been on a study tour and developed partnerships with the Netherlands to develop technology that would detect this. A proposal had been put forward to the Minister.

Mr Samuels noted that the fraud projects referred to by SAQA were largely linked to the project with DPSA to verify qualifications of high-level public servants, which had previously rested with private providers, but SAQA had taken over in view of a directive from DPSA, against a cost. However, he noted that the cost was based on certain projections, and calculations made for the budget for this, although in fact SAQA had not been asked to do as many as anticipated. This was linked to the difficulties of funding. In relation to the verification, SAQA’s statement that no qualification was found was final. If information was not found on the SAQA database, it would approach the source institution.

Mr Makhubele asked about foreign qualifications. He had noted the trend of people coming to South Africa claiming international qualifications from unknown universities, and it took a long time for SAQA to verify this. He asked if SAQA had a special strategy or standard method of looking at these.

Mr Samuels said that there was a sliding scale of charges, depending how quickly the information was needed.

Mr Makhubele noted that SAQA was also doing qualification verifications for the Public Service and had apparently found that qualifications at senior level were correct. However, there had been many accusations of deployments into high positions of those who were not properly qualified and he sought a guarantee that this would not happen.

The Chairperson interjected to say that SAQA did not have the responsibility of determining whether the President had properly appointed a person, but was called upon only to check that the person had the qualifications s/he claimed to have.

Mr Samuels said that about 1.3% of the qualifications submitted to SAQA were fraudulent, and all such cases were reported to the departments, who must take the appropriate actions.

Mr Makhubele asked where the Mandela Careers Festival would be in the future, and when it was intended to take it to Mpumalanga.

Mr Samuels said that the next project would be at the Maluti FET College. He was not sure when Mpumalanga would be on the agenda as this decision was taken by the Minister. 

Mr Moni asked for clarity on the broad-banding exercise that may not be able to be implemented, the implications of this, and when it was likely to have been concluded.

Mr Samuels said that this involved comparing the salary structures in SAQA, with those of the Public Service. A previous Minister had pegged the salaries of the Chief Executive Officer of SAQA at Deputy Director General level. The public service increases, however, were higher than the SAQA increases, and directors at SAQA tended to enter at lower salaries than in the public service. Broad banding applied to five levels, and a performance incentive, as well as cost of living adjustments, were being included. Normally, 1% was made available for that, but in this year it was not possible, and this was done through the cost of living adjustment.

Mr Moni wondered if this would not lead to demoralisation and if there was any projection of when it might be addressed.

Mr Samuels said that senior managers had accepted that and SAQA was negotiating with the Union to reach an amicable understanding.

Mr Moni asked about recognition of prior learning (RPL). The policy had apparently been finalised, but he was worried about the effect of short funding on these research activities. He wanted to know when the policy would be operational and if the stakeholders knew how to implement it.

Mr G Radebe (ANC) quipped that he had more than 20 years experience and was therefore asking for several RPL certificates, if each covered 10 years. He asked who would benefit from the RPL policies.

Mr Samuels said the policy had been approved by the SAQA Board and was being tweaked to be prepared for publication in the Government Gazette. One of the key arguments that it made was that for RPL to succeed in South Africa there had to be a good central coordinating mechanism. If SAQA was to be the driver, it had to be properly resourced. In relation to who was benefiting, he said that the research for the Ministerial Task Team had discussed RPL with the SETAs, who had spent R141 million on activities, so there were many people who had benefited. Other statistics were also contained in that report. SAQA had previously tried not to differentiate between RPL and a formal qualification, but was now tending to the view that it was actually useful to be able to track it, so the numbers of RPL were probably under-reported at this stage.

Mr Moni asked how the unfunded posts affected the SAQA’s capacity, and if it was possible to leave them unfilled for a year or two, or whether there were critical posts included in that.

Mr Radebe asked what posts had been cut, and what specific programmes would not be pursued because of the constraints.

Mr Samuels said that SAQA would always bear in mind what it was mandated to do and the APP was setting out what it would be able to achieve, but also what it could not be expected to achieve.

National Student Financial Aid Scheme (NSFAS) Annual Performance Plan 2013
Mr Zamayedwa Sogayise, Board Chairperson, National Student Financial Aid Scheme, noted that this Strategic Plan would show that the full R7.7 billion for 2012 had been utilised, that the Scheme (NSFAS) had turned around and had improved its performance significantly. 2012 was a record year not only for the budget but also for the number of students assisted, which was still rising. The transformation programme, to put in place a new student-centred model, would be fully implemented in this financial year, and NSFAS would be maintaining operations to distribute loans and bursaries to about 450 000 students. NSFAS was now fully in control of the process and all 23 universities and 50 FET Colleges had improved their efficiency and equitable outreach. The programmes were all under way, on track and on budget.

Mr Msulwa Daca, Executive Officer, NSFAS, took the Committee through the details of the Annual Performance Plan and budget. There were two programmes. Administration 1 conducted overall management and provided efficient and effective support services, and was due to receive a budget of R98.5 million. Programme 2 was the Student Centred Financial Aid, which would receive a budget of R7 million for administrative purposes, with the remaining R8.142 billion comprising the total loans and bursaries budget. The system was still under pressure in terms of availability of resources, despite the increases.

The NSFAS received an administration grant of R87 million from DHET, and it would be using the last R4.7 million of the business transformation budget granted in the last year, during this year. Some administrators were charged fees for NSFAS managing their bursaries, and that would bring in R17.9 million.

Mr Daca presented the unaudited statistics for the 2012 academic year. 405 070 students were funded. Of this number, 187 115 were at the FET Colleges (an increase from 114 000 in the previous year) and 217 955 were at universities. The total amount disbursed was R7.7 billion.

He then outlined a summary of the information contained in the detailed APP (from slide 6 of the attached presentation). The NSFAS wanted to achieve 100% compliance with legislation and regulation, and R30.4 million was budgeted for this. It wanted to ensure congruent policy and procedures across all functional units, by March 2014, with just over R7 million allocated to this target. It aimed to improve governance to provide a smooth transition from the old to the new policy framework, transforming to a model where there would be a centralised application and approval process, and R7 million was budgeted for this. There was new policy on the performance management framework to ensure that all employees were accountable for the delivery on the policy. All employees would be assessed against this by 31 March 2013. Staff were being trained, with a budget of R9 million. In the prior year, staff skills and competencies had been assessed, so nothing was budgeted for this in the current year, and similarly nothing was budgeted for the IT architecture, which had also been completed in the last year. The procurement and implementation of an improved IT system to support the transformation of NSFAS was supported with R41 million. A new loans management system would be functional by the end of the financial year. The processes and procedures would be developed to ensure that NSAFA fulfilled its mandate to students, including review of the policies, and a budget of R8 billion was allocated to the student-centred mandate.

Mr Daca explained that in relation to Programme 2, NSFAS was working with SAQA to jointly communicate with students and R9.7 million was put aside for this. A value proposition was being developed, with R8.1 billion assigned, and he reiterated that this was where the disbursements actually occurred. NSFAS hoped to achieve the full implementation of the Central Applications Process (CAP) by 30 September 2013. In relation to the raising of funding for undergraduate studies, it aimed to increase funding by about R4 billion, particularly the “missing middle”, who were children whose parents were employed, typically in government, so they did not qualify against the means test but also could not raise the fees to attend university without some assistance. Because the “missing middle” were so often children of government employees, NSFAS was discussing the problem with Government Employees Pension Fund (GEPF) and employee bodies.

NSFAS aimed to maximize recovery of outstanding loans to increase the pool of available funding, was targeting recovery of R1.5 billion over the whole Medium Term Expenditure Framework (MTEF) period, but R600 million recoveries in this year. A budget of R9 million was set aside for the call centre to attend to the recoveries. It was looking for more funding for the unfunded courses of study, had made a bid that funding be given for the BTech, and was waiting to hear from the NSF whether this was acceptable. NSFAS also wanted to develop funding for students in the FET sector, and hoped to achieve upfront payments, comprising 30% of funding allocations, to the colleges who could match the claims, by 30 June.

Tables of the loans and bursaries budget, comparing this also to the previous financial year, were presented. Mr Daca noted that the final year programme (where students would not have to repay the money) was funded by the President, and it was hoped that this programme could be raised to receive around R1.1 billion; currently it was around R900 million, which was funded from the recoveries. FET College bursaries had increased from R1.7 to `R1.98 billion. There would be likely to be a decrease of about 50% in the NSF funding. The Funza Lusaka bursaries were likely to increase to R893 million. Some small funders had not agreed to fund yet, so their contributions were not shown. The Department of Basic Education (DBE) was working hard with the SETAs to reach agreements, and the confirmed figure was R7.6 billion, although the budget had assumed that R8.4 billion would be reached, based on experiences in the last year, where R7.5 billion was budgeted but R7.7 billion was achieved.

Mr Daca noted that the figure for compensation of employees was increasing in because of the need to have more skills in house as the NSFAS had reduced its dependence on consultants, from R16 million down to R10 million. The administration budget had dropped from R162.6 million in 2012 to R130.3 million in 2013, because the transformation was largely dealt with in the previous year.

Discussion
The Chairperson asked NSFAS to comment on a statement he had heard that NSFAS wanted to provide laptops to all beneficiaries of NSFAS.

Mr Dikobo noted that the Sunday Times of 24 March published a tender for laptops. He thought that the taxpayers would have to be convinced that laptops were now tools of trade for all students.

Mr Daca explained that a Request for Information (RFI) had been issued. There was one school of thought that the money spent on laptop would be less than the money that NSFAS usually spent on textbooks, but academics questioned if this was academically sound. NSFAS was investigating what was the experience in other countries, whether the numbers would balance, how it might be possible to move forward, which was the reason for the RFI. He confirmed that there were reports that some students – particularly those in first year – spent the whole week queuing for access to the computer laboratories and this had disastrous consequences on the drop-out rate, although other reasons also came into play. UNISA had started a similar campaign, and NSFAS would be watching developments there closely.

Mr Makuba emphasised that the Minister would not allow NSFAS to take on an unfunded mandate. The DHET heard the suggestions and took note of international developments around student laptops but agreed that the figures had to be interrogated, as unless the laptop procurement would result in cost savings on books it would not make sense, in light of NSFAS’s difficulty in funding even student fees.

The Chairperson noted that the ANC had suggested that DHET should have a “fee-free” education principle, although this would translate into government policy only when agreed to by Cabinet. He wondered if NSFAS was ready to implement this.

Mr Sogayise said that NSFAS had worked hard to deliver on the mandate and to prepare itself. Money would follow students and whatever was being done must be seen in the context of the legislation. Capacity at NSFAS had increased threefold since 2010, but he also stressed that capacity related not only to numbers but also to technology. He referred Members to the slide on fundraising and said that it was clear that NSFAS needed more funding and it would be filling capacity to ensure that it was fully equipped for its future mandates.

Mr Makuba, DHET, said that it must be remembered that “fee-free” education was already happening. R2 billion was being provided to the FET Colleges as full bursaries, not loans, and R1 billion was set aside for the Final-Year programme where students graduating would have their loans converted to bursaries. If a student did well, s/he may already not have to pay. For DHET, this was part of the progressive realisation.

The Chairperson went on to say that the Green Paper on the Post-School Education and Training System envisaged that NSFAS should be supporting around one million students by 2030. At the moment it was able to afford to support about 400 000. Quite apart from the funding, he wondered if NSFAS would have sufficient operatives on the ground, even temporary staff, to receive and deal with applications from rural communities, and wondered how practical the projections were. At the moment there was still not enough direct contact between NSFAS and students.

Mr Daca said that on 15 July the NSFAS would be going “controlled live” on some processes with University of the Western Cape, which was selected because of its proximity to the urban setting, and wide spread, to see how the system worked. NSFAS would still use the financial aid offices to accept the financial aid applications, but the difference would be that the applications would be logged on to and processed through a central system, as opposed to the current arrangement, where 73 different systems applied across the country.

Dr Bosman said the presentation clearly showed the progress, and the financing was most important. He commented that there had been several complaints in the past around alignment of the payments to universities of agreed funding, with the student year. He was aware that some upfront payments were made, but said that there were still difficulties in implementing practical solutions to allow students to have the funding available at the beginning of the year. He asked how the problem would be overcome and what was being discussed.

The Chairperson thought that the disbursement of Funza Lushaka bursaries was being done by the DBE, and emphasised that here too it was necessary to align the bursaries payment with the academic year.

Mr Radebe said that he had heard that hunger and deprivation levels were running high in institutions of higher learning and asked for more clarity and whether NSFAS was able to respond on the allegations.

Mr Daca agreed that the situation linked to the Funza Lushaka bursaries. Universities would receive an upfront payment. Although there would still not be exact matches in terms of the timing, NSFAS was aiming to enter Service Level Agreements with the universities, who would know that certain students’ funding applications had been approved, so that the student was entitled to get accommodation and food, and the students would be assisted in the months between January and March.

Mr Makuba added that student hunger and deprivation was highlighted in recent reports on student accommodation. The main problem here was the fact that some of the students were using NSFAS funding to support their families. This was not the purpose of the funding, and if they did not, for instance, buy books or stay healthy, they were unlikely to succeed. That was why NSFAS was embarking of a new student-centred policy.

Mr Moni had thought that NSFAS was paying directly to the institutions, but the fact that the students were able to access the money and paying their families had to be remedied.

Mr Dikobo said that in every SETA, the administration costs should not exceed 10%. He asked about the relative costs and percentages for NSFAS, and whether it was able to handle what it needed to do with that allocation, reminding NSFAS that administration costs needed to be kept low so that more money would reach the students.

Mr Daca said that the budget for bursaries was R8 billion and the administration costs to administer this were around R130 million, which was about 1.8%, and reminded Members that certain funders also paid NSFAS willingly for the services it rendered in administering their particular bursaries. said that from 8 billion, 130 million was about 1.8%, and that was where NSFAS was. By way of comparison, he noted that the Social Security Agency of South Africa was running at about 5% administration costs, and the Road Accident Fund at around 10%. NSFAS had managed to keep the figure so long by using university staff “for free” to administer the system.

The Chairperson quipped that it was not actually for free as this was reflected in other books.

Mr Daca agreed and clarified that it did not appear in the NSFAS accounts. He added, however, that the extra costs of the transformation project would have had an effect in the last year.

Mr Dikobo asked why there was reference to “adverse” reports, pointing out that this word had a particular audit connotation, in relation to indicator 1.1.

The Chairperson clarified that this was worded with a double negative and NSFAS was targeting a clean audit.

Mr Dikobo commented on the R9 million budgeted for recovery of loans, and wondered if NSFAS had investigated a no-recovery no-fee arrangement with collection agencies.

Mr Daca responded that the R 9 million cost was quite low in relation to the anticipated recovery.

Mr Dikobo was in agreement in principle with the decrease in the spending on consultants, but thought that this might be countered by another line item showing an increase from R10 million to R14 million for “outside services”.

Mr Moni also agreed that it was good that use consultants was being reduced, but wondered if NSFAS should not be trying to create more capacity in house to deal with the activities.

Mr Radebe asked if there had been any requirement that consultants should be required to transfer skills to permanent employees, and what policies were also being applied in respect of ageing employees, both in respect of skills transfer and retirement.

Mr Daca responded that indeed NSFAS was trying to recruit but it was not possible to move away entirely from using consultants at the moment until people were experienced in doing the work in-house, and some consultancy services would still be rendered.

The Chairperson said the point was really that the reporting was perhaps misleading and the descriptions of the work must be aligned.

Mr Makhubele said that during the workshop with NSFAS, NSFAS had said that there was still a gap of students who were not being funded, with around a R7 million shortfall from funding of all needy students, and he asked whether that had been closed.

Mr Daca explained that in fact the gap had been re-assessed as being closer to R2.6 billion. NSFAS was working with the SETAs and trying to get them to assist students who were registered but who could not get loans. There was positive engagement to try to address the shortfall in funding for all.

Mr Makuba clarified that DHET was trying to ensure that there was proper and long term planning so that SETAs would commit to the longer term funding, to allow more accurate projections to be made. DHET had engaged with some institutions about the shortfall figures, but some had admitted that their data left much to be desired. There was engagement, to investigate that R2.6 billion figure further. The NSFAS Review indicated that NSFAS ideally needed to triple its 2010 budget, but the figures as provided  did not quite add up and the universities had been asked to look at them again, using NSFAS criteria.

Mr Makhubele asked about the marketing and communication targets for Programme 2, which mentioned that NSFAS was hoping to work together with SAQA. However, SAQA had earlier outlined that shortage of budget forced it to reduce its communication. He wanted an assurance from NSFAS that it would not effectively be subsidising SAQA’s marketing.

The Chairperson added that it was necessary for NSFAS to ensure compliance with procurement processes; if SAQA was a preferred services provider, this must be clarified to avoid problems with the audits.

Mr Daca said that this was not the case. The reason why SAQA and NSFAS found it useful to work together was in fact to ensure that the funding was not wasted; it was important to market the career options and courses and fees in an integrated way, to ensure that appropriate students were reached. In addition, SAQA and NSFAS often used the same service providers, but at different times, and joint efforts could reduce the costs.

Mr Makhubele referred to page 16, which referred to funding from SETAs and other institutions, and included a reference also to the Eastern Cape Provincial Government. He asked if NSFAS was working also with other provincial legislatures, who were running processes and providing funding. He would like to see a more unified approach.

Mr Daca responded that the engagement with Eastern Cape was a historical matter, but NSFAS was using programme managers to try to approach other provinces. There had been an approach from KZN and NSFAS would be holding further engagements with it. It would help if the three provinces of Eastern Cape, KZN and Gauteng could be covered, as they all ran bursary schemes. NSFAS would like to position itself as the key institution to administer all loans and funding.

Mr Makhubele asked that Mpumalanga not be excluded.

Ms N Gina (ANC) asked who would be getting bursaries, and who would be getting loans. She had understood that initially bursaries were granted to the poor, yet there was now mention of the children of government employees.

Mr Moni referred to the principle of conversion of loans to bursaries for final year successful students and asked for figures around this, for the last and present financial years, and a future projection.

Mr Daca clarified that the project to convert loans to bursaries would be effected in January or February, when NSFAS received the results. He did not have the figures with him, but would provide them. He noted that NSFAS had a pool of money, and the funders specified that some of the funding must be by way of bursaries, whilst others specified loans. Generally, bursaries were granted to students who were studying for the scarce skills, and he reminded Members that NSFAS was, in addition to the existing offerings, also investigating having a loan product for the “missing middle” of students who did not meet the criteria for funding, yet could not afford to pay fees themselves. The GEPF with whom NSFAS had held preliminary discussions, suggested that it would prefer a loan product, as essentially the funds would be lent from pension funding and should be repaid. Mr Daca said that he would share developments. NSFAS still needed to consider any regulatory hurdles.

The Chairperson agreed that the eligibility must be explained and put in context.

Mr Moni wanted more details on the challenges around the full and partial costs of studies. If the students were enrolled, but could not sustain themselves because not everything was funded, they were more likely to drop out and this created a vicious cycle. He thought that “increasing access” surely must mean seeing students through all their studies. This was a policy matter, and the Committee would have to consider to what extent the challenge was being addressed, and what was the reason was for taking on more students if it was known that a number of those already supported would drop out. The problem did not lie only at NSFAS’s door, but the Committee must address it.

Mr Daca said that this was an ongoing discussion. There were differing views on whether full costs should be paid and he agreed that the topic needed to be fully aired. There were some other considerations. If students knew they would not be funded, they were unlikely to try to enroll, and the question was whether there was any merit in funding a student who may drop out, and if this was helping the student at all, as well as its effect on the funds of NSFAS. However, the point was sometimes made that if a student was at least helped to get through first year, or part of the studies, another funder may be willing to pick up that student and continue to fund for subsequent years. Many funders were reluctant to grant funding to first-year students, largely because of the drop-out rate, but would help those in the later levels.

Mr Dikobo said that when he had been a student, he knew that his funding was guaranteed for the full period of studies, provided that he passed each year, and would not have to provide reports, or re-apply; only his results must be sent. The same should apply to loans. The point was that this would give the students greater certainty, and he did not see that there would be a problem in ring-fencing of funding. Any extra years, if a student had to repeat, could be for own-cost, but at least this would allow them to qualify. He did not agree with the comment that other funders might pick up second and further-year students.

The Chairperson said that this had been discussed with NSFAS last year, when the Committee urged it to come up with a system to provide further investment in the students who were likely to return the full cost of studies, with more funding at the later levels.

Mr Moni said that it seemed that this was not a policy but depended on the choice of NSFAS or institutions. He thought more details were needed on the regulatory mechanisms and how the institutions were approaching this.

Mr Daca said that although the money available had grown, the interpretation of the rules was not yet consistent across all institutions. Clearly, there was not enough money in the system. Universities would register students who might pass the initial years, but then there was not enough money available to take them through. NSFAS struggled, on a daily basis, to raise more funding to address this gap. He added that there was now a proposal that NSFAS fund a student for a qualification, so that funding would be guaranteed provided the student passed, and this would apply from the following year.

Mr Moni said that during oversight visits the Committee had heard that there appeared to be discrimination against teachers training for Afrikaans teaching, particularly in Northern Cape, and some Members felt that the situation needed to be analysed.

Mr Daca said he would need to revert to DBE on this point, as there was a task team looking at the  Funza Lushaka bursary scheme, trying to find out more about the teachers and the students who were funded. He knew that Funza Lushaka had one criterion for funding, looking at critical skills in teaching, which included African languages, particularly at junior levels, but it would be investigated.

Mr Makuba (DHET) clarified that Funza Lushaka did support some students studying Afrikaans, but the key question was that of priority scarce skills. It did not actually discriminate, as many of the students were supported in another way and if they studied a scarce skill also they would be supported.

Mr Moni suggested that more work was needed to clarify the issue and dispel the perceptions.

The Chairperson reported that at a recent meeting with UNISA, he had heard that UNISA had never been involved with SETAs. He had committed himself to ensuring that a meeting was called between the SETA CEOs and the universities.

The meeting was adjourned.