Department of Higher Education and Training on its Quarter 3 performance

Meeting report

The Chairperson welcomed the dignitaries and invited leader of the team Dr D Parker, Acting Deputy Director General: Universities, Department of Higher Education and Training, to brief the Committee.

Briefing by Department of Higher Education and Training (DHET)

Dr Diane Parker, Acting Deputy Director General: Universities, DHET, tendered apologies on behalf of the Minister and Deputy Minister, and the Director General (DG) Mr G Qonde, was also absent due to some pressing issues on the Technical and Vocational Education and Training (TVET) programme.

Dr Parker said the report was on the third quarter 2016/17 performance of DHET as part of compliance reporting in terms of work of the Department. The presentation would comprise of a background; focus on the core areas of University Education (UE), TVET, Community Education and Training (CET), Skills Development (SD) and look at the support programmes of the DHET; and review the Budget Performance. For the 2016/17 financial year, the Department had 38 performance indicators that encompassed 70 outputs (targets), but in the quarter under review there were ten outputs, mainly in the core delivery programmes of UE, SD and the CET however; TVET programme did not have any specific targets and the two support programmes, planning and corporate services, had no targets due for the quarter. For programmes without specific targets, the DHET will report progress towards the achievement of annual targets that were due by 31 March 2017.

Of the ten delivery targets, the Department achieved six. There were five targets due in the third quarter for the UE programme, four out of five of the targets were achieved and the four achieved targets related to the oversight role of DHET over the UE system, the monitoring evaluation of the UE system and focused on ensuring public accountability of funds provided. The oversight activities that occurred included the use of Foundation Provision Grant by universities in 2015/16, Financial health of universities in the 2015 academic year, the use of the 2015/16 Teaching Development Grant (TDG) by universities and the use of the 2015/16 Research Development Grant (RDG) by universities. The target that was not achieved was the target for the planned publication of the Reviewed Funding framework (RFF) for Higher Education Institutions (HEI). Although the RFF was finalised by October 2015 for public comment, the plan to finalise and publish it for implementation by end December 2016 could not be achieved because the Minister requested that as a result of the context and issues on funding, the RFF should be served to Cabinet before it could be published. This resulted in a delay as it was only served at Cabinet in November 2016. Cabinet recommended that the draft be taken through the consultation process with the sector and thereafter be published. The Branch discussed with Funding Strategy Group of Universities South Africa’s (USAF) on 28 February 2017, and the DHET has put a process in place to meet with the Finance Executive forum so that the RFF would be finalised as soon as possible. The DHET recognised that Presidential Commission is expected to put out its reports at the end of June 2017 therefore, the DHET has planned to finalise the RFF after this report so that whatever alignment needs to be done can be captured in the RFF. The RFF is focused on the mechanisms for the distribution of funds in the system. In addition, the Dr Parker gave a summary of the oversight reports that the Committee requested but stated that if the Committee needed more information the DHET would make it available.

The summary of reports completed included the 2015/16 Foundation Provision Grant (FPG) which is given to Universities to assist underprepared students who were registered for extended programmes that allow the students to do a four year programme instead of a three year programme. The total amount of the FPG in 2015/16 was R304 million but the total budget available was higher and amounted to R372 million, which included carryover of unspent FPG funds in 2014/15. The Universities are expected to retain some funds from the RPG grant so that they can pay staff that are employed in this programme. The achievements on the FPG included making permanent 68% of the full staff employed in the FPG programme as against temporary staff in previous years. This occurred because the DHET has put the FPG funding into the normal framework and additional funds are focused into providing better tuition for students. In addition, 75% of the permanent staff are well equipped for the work with Masters 46% and PhD’s 29% and 13% of Foundation students are enrolled in Foundation programmes (FPs). The staff-student ratio averages ten students per staff member, which shows that Universities are taking the FPG seriously. The DHET set a target of 30% in the long term and is encouraging Universities to increase the number of students enrolled in the FPG although some challenges were experienced with the University of South Africa (UNISA), which resulted in the DHET not meeting its target. The second involves the effective use of the 2015/16 TDG and the RDG which assists Universities to focus on teachers, teaching and research in the system. A specific TDG was introduced to all Universities three years ago, previously, the TDG was given to Universities that were not performing well. But the DHET noticed that Universities that had students from disadvantaged areas did not get funds while Universities that were not performing well received funds. A decision was made by a Ministerial task team to reverse this perverse incentive and ensure that all Universities received these funds to support teaching learning and development. A percentage of funds was therefore given to each University based on a three-year development plan that dealt with five priority areas according to issues faced by each university.

The five priority programmes monitored and developed were; Development of university teachers and teaching (included support for postgraduate Diploma in higher education and teaching focused programmes not PhD programmes), Student support programmes (include first year experience and language programmes), Enhancing the status of teachers (include support of teacher awards), Researching of Teaching and Learning, Programme management to enable universities to effectively use the funds provided on University specific programmes. A total of R616 million was allocated in 2015/16 (R573.7 million for individual universities and R43.2 million for national collaborative programmes), the report gives details on this. Additionally, in the past some Universities were unable to spend the allocated funds therefore; DHET decided to withdraw the new funds and allowed the implementation of the staffing South Africa programme, particularly the Generation of Academics' Programme (nGAP) to use the funds. Consequently, in 2015/16 the funds reprioritised enabled DHET to recruit 200 academics under nGAP. However, in 2017/18 the DHET would be combining the TDG and RDG in a new grant the University Capacity Development Grant (UCDP); a close out report on the TDG (2014/15 – 2016/17) will be developed by December 2018.

The report on the effective use of the 2015/16 Research Development Grant (RDG) is designed in line with eight programmes, the eight programmes funded and reported on are: mentoring/supervisor programmes; research capacity development workshops; Post graduate support for staff to undertake Masters and PhDs; Post-Doctoral research fellowships; employment of replacement staff; academic exchange and mobility and top up of NRF and other development grants. These tops up grants were needed by these young academics who receive partial funding and require this money to become researchers in their field. In this particular period an amount of R199 million was allocated to the RDG, which supported: 632 PhD’s and 322 Master’s candidates; 233 Post Doc fellowships; 306 academic exchanges; 341 contract staff appointments; 3069 staff in research capacity development workshops; and topping up 366 NRF grants. In terms of the UCDP a close out report on the RDG (2014/15 – 2016/17) will be developed by December 2018. In addition, the report on the financial health of universities in the 2015 academic year was developed based on the 2015 annual reports and audited financial statements of 26 universities, submitted to the Department in compliance with the annual reporting regulations. A financial ratio analyses was used to assess whether institutions were financially healthy at the reporting date; whether institutions were living within their means; and, to understand the trends for five years within not only an institution but within the sector.

Key financial indicators developed in collaboration with financial executives across the sector, were utilised in the analyses and the report considers the financial health of each university and of the public university system as a whole. Universities were clustered and analysed according to type (traditional; comprehensive; university of technology) in the report. The Acting DDG indicated that a key finding on the operational results for Universities highlighted the actual amount of income expenditure, surplus and deficit and showed that only a few universities were in deficit. This finding also showed that some universities had reserves which were under Council control and were able to manage their funds. It was important to note that funds from DHET was the highest source of funds for Universities in 2015 (about 38.5% of the total budget of Universities) even though universities receive state funding from National Student Financial Aid Scheme (NSFAS), Department of Science and Technology (DST) and other Government Agencies (GA). In addition, the DHET also recognised that tuition and accommodation fees were an important part of overall funding and without this income universities would run into trouble from increased students-debt ratios.

The findings also indicated that there was increased debt in the system and universities need to manage these debts. Consequently, all Universities created efficient and effective debt relief policies to assist that they get back the fees over time and have created 13 Financial Health Indicators (FHI). Two key FHI that address sustainability in the system were the Sustainability Ration (SR) and the Unrestricted Council Controlled Reserves (UCCR). The SR compares the university’s cumulative reserves to its annual expenditure level when there are no additional incomes for that year. However, SR does not imply the institution is financially unsustainable because all institutions receive ongoing income from the State, fees and GA on a continuous basis. A ratio of 1.0 indicates that a university will be able to cover a year’s expenses without needing additional funding. When the SR is calculated based on the ratio of UCCR the SR, four Universities had a SR greater than one e.g. UFS (1.55); UCT (1.05); UP (1.67); SUN (1.98) and the rest of the Universities had a SR below one based on UCCR.  Universities that have SR below one based on UCCR are divided into two; low risk Universities are the ones that have SR’s greater than one based on calculation of SR’s using Restricted Council Controlled Reserves (RCCR) some are CPUT (0.63); CUT (0.57); DUT (0.87), UWC (0.41); UL* (0.78) and UNISA* (0.97). However, universities that are high risk are those that have SR’s lower than one based on calculation of SR’s using Restricted Council Controlled Reserves (RCCR) some are TUT (-0.30); UFH (-0.68) and UKZN* (-0. 14). Consequently, the Universities that have SR’s lower than one based on calculation of SR’s using RCCR such UFH would not be able to operate without its income in a particular month, specifically at the beginning of the year when such institutions have not received funds from the State. Overall findings showed that the system is operational although the student debt ratio is high and as result of the fragile situation in this sector the FHI need to be monitored.

In terms of system performance out of the 13 outcome indicators (OI) two were not met.  However, 11 targets were met and exceeded. The two OI were the registration of First year students in foundational programmes (FP) not met because oversight visits to UNISA showed that programmes targeted initially by the DHET were not reported so the FP were not optimised. Based on this the target might be re-evaluated if the FPs in UNISA cannot be reported effectively. Also, the number of eligible students obtaining financial aid was not achieved because in 2016/17 a target of 205 thousand was set under the Medium Term Strategic Framework (MTSF) even though DHET had limited funds for NSFAS but a decision to keep the target was made because DHET aimed to have about 25% of undergraduate students through financial aid and DHET worked towards giving more funding to students. With the injection of more funds in 2017/18 this target would be achieved.  

Ms G Magnus, Chief Director (CD) TVET, DHET briefed Committee on TVET programmes.
The purpose of the TVET programme was to plan, develop, implement, monitor, maintain and evaluate national policy, programmes, assessment practices and systems for TVET. For the year 11 targets were set for the TVET programme out of which three were met in the last quarter and the remaining eight targets were due for completion in the fourth quarter. She highlighted progress made on the eight targets for the fourth quarter and reflected on examinations and certifications. The progress on the eight targets of TVET colleges included the development of two Steering mechanisms; the National admission and promotion guidelines for NCV and the Revised conduct policy for NCV. The Department is working closely with Umalusi (Accreditation Council) to finalise the policy review of the NCV. Umalusi will imminently publish the draft reviewed qualification policy for comment. Through the National Qualification Framework, the Department will make collective input as part of the public comment process on the revised qualification. This distilled position will then be formulated into advice to the Minister on the proposed changes. Also, a Revised costing model (RCM) for TVET College Programme is due for approval by the Director-General (It has been finalised and is being processed for approval by the DG). Both the DHET and Sector Education and Training Authority (SETA) had comprehensive presentations on the examination situation and presently there were 12,000 subject results outstanding, however the Department was working with SETA using certain data testing protocols and the results would be received on target. In addition, there were over 33,000 National Certificate Vocational (NCV) qualifications outstanding but 24,000 will be ready in March, 2017 while the remaining 8,500 would be prioritised and the commitment by SETA would be June. In the New Year DHET’s Annual Performance Plan (APP) would include exam reporting every quarter as a result of its sensitive nature. The progress on the eight targets include development of two Steering mechanisms; the National admission and promotion guidelines for NCV is due for approval by the Minister and Revised conduct policy for NC(V) is due for approval by the Director-General. The Department is working closely with Umalusi (Accreditation Council) to finalise the policy review of the NCV. Umalusi will imminently publish the draft reviewed qualification policy for comment. Through the National Qualification Framework, the Department will make collective input as part of the public comment process on the revised qualification. This distilled position will then be formulated into advice to the Minister on the proposed changes. Also, a Revised costing model (RCM) for TVET College Programme is due for approval by the Director-General (It has been finalised and is being processed for approval by the DG).

The oversight monitoring of teaching and learning (T and L) plans at TVET has looked at seven areas which covers enrolment planning, practical T and L and Lecturer development was done at the end of 2016 and would be completed by the next quarter. Similarly, the Student Support plan which looks at pre-course, on-course and exit support and the evaluation of colleges is underway. The final report would give DHET an idea of the progress and interventions that colleges have made concerning student support. The Monitoring and Evaluation (M and E) report on TVET institutions for the last two quarters academic terms would be reported in the next quarter. It covers the management, governance, academic success, growth and access and systems that support the Colleges. In addition, an audit of TVET Colleges infrastructure maintenance which consists of the progress to date on setting up the maintenance of college infrastructure. This report would assist the DHET to have an idea of finances needed to maintain and upgrade infrastructure in Colleges. The last target involved establishing of a coordinating structure for CVET. A white paper at DHET led to a decision to set up a new entity called South African Institute of Vocation and Training (SAIVCET) however due to fiscal constraints the DHET set up a unit to carry out the work envisaged. The work deals with Curriculum and lecturer development and research around programme qualification mix of colleges. The SAIVCET unit would be DHET and National Skills Fund (NSF) funded for five years and the unit would drive curriculum and lecturer development. The process is underway for the creation of 26 posts for SAIVCET unit and the DHET would appoint members to serve on the Institute and advisory board.

The Chairperson asked the team from DHET to be creative so as to balance the brief and engagements with the team.

Mr David Diale, Director: Adult Education, DHET, stated that the purpose of the programme was to plan, develop, implement, monitor, maintain and evaluate national policy, programme assessment practices and systems for community education and training. For the year, the CET had seven outputs, five of the seven addresses policy development, three of which had been met, being the M and E policy, Strategy on partnerships, and the T and L plan.

For the quarter under review the CET had one target Regulation to establish, merge or close the satellite Community Learning Centers (CLC) that were inherited from Provincial education departments (PEDs). However; this could not be finalised because Legal advice based on the CET Act, showed that the Minister could only establish Colleges and not CLCs. Therefore, Policies were put forward instead of regulations and a draft policy has been approved by the Minister for publication in the Gazette for public comments. Progress on other targets due by 31 March 2017 include: Development of Steering mechanisms such as the National Curriculum Policy for Community Colleges which assists DHET to change programmes inherited from PEDs and allow DHET to look at responsive programmes for out of school youths and adults; Conducting a policy for a new qualification the General Education and Training Certificate for adults (GETCA) which would replace GETC; the GETCA has been reworked to reduce the requirements for adults and out of school youths. Presently the GETCA is with the Deputy Minister, after which it would go out for public comments. Putting in place T and L support plan for CET would assist DHET to put in place standardised support for the nine colleges established nationally and improve student performance. The final plan T and L support plan for CET has been approved; a final report has been compiled for the CET College infrastructure/facilities maintenance and is ready for approval by the Director General. It should be noted that the CET does not have its own infrastructure but partners with universities and Non-governmental organisations (NGOs). In some instances, the DHET does some maintenance on the infrastructure for the functioning of the nine CET and have a Memorandum of Agreement (MoA) with these organisations and outputs that deals with Strategic partnerships. To this end a draft strategy on strategic partnerships has been prepared and consulted with internal legal services, and has now been approved by the Director-General. Organisations that DHET has partnerships with include Catholic institutions (to acquire skills) and universities (for research on curricula) at national and provincial levels.

Mr V Mabena, Director: Skills Development (SD), stated that the programme had four targets but met two of the targets for the quarter under review, they were; implementation of a report on the National Skills Development Strategy by all SETAs (completed and approved) and achieved 67% artisan leaners trade test pass rate at INDLELA (target was 54%). The following two targets were not achieved as planned: the workplace based learning programme regulations, however the draft workplace based learning programme regulations submission is en route to the Minister for gazetting/publication approval (the finalisation of the workplace based learning programmes regulations has been delayed due the finalisation of the workplace based learning policy which the Minister has directed to Cabinet for further consultation, scheduled for April 2017). Also, the average lead time: the average lead time from trade test application received until the trade test is conducted at the National Artisan development Centre (INDLELA) is 132 days instead of the planned 120 days (it was reduced from 160 to 132 with the employment of seven assessors at INDLELA who commenced their duties in May, 2016). The SD programme is working on employing two Boiler maker assessors to increase progress on SD. Progress on delivery outputs that were due in the subsequent quarters such as the national skills development strategy (NSDS) three and the SETA Landscape. The Minister in December 2016 extended the NSDS for 2 years (from April 2018 to 31 March 2020 and SETA had been re-established by the Minister for the same period. Strategies have been put in place in increase the number of artisans that were qualified and increase registration for the new artisan learners nationally.

Dr Nkosinathi Sishi, Deputy Director General (DDG) Planning Policy and Strategy (PPS) reported that the two major areas of progress were; Policy for Open Learning (developed and consultation finalised. It will be published this week for public comments).and Distance Education and the M&E framework for the post school education training (PSET) system (prepared and consulted within the Department and is now ready for finalisation). A set of key reports prepared for the Committee include; A monitoring Report on International Relations (due by 31 March 2017) 80% of the International Relations monitoring report content has been received. It is being collated, edited and will be ready for approval shortly. This report would assist DHET to monitor progress on targets set with other countries on higher education and training are met; the Macro Indicator trend report on PSET (due by 31 March 2017), on track for finalisation before 31 March 2017.This report would implement strategies on open and distance learning which has three main areas such as development of framework for open learning, a survey on distant education particularly on TVET colleges and a position paper on on-line programmes and offerings. Additionally, the report will give the status on progress made and highlight challenges faced by DHET. The annual report on skills supply and demand was given at the DHET colloquium last year as well as the annual statistics on Post-School Education and Training report which will published by 31 March 2017. He would make a few comments on Administration in conjunction with his colleagues the Chief Financial officer Mr T Theroux and the Chairperson of the Audit Committee (CAC) Prof D van der Nest. He indicated that in the last two quarters there were recruitment and selection however there is progress in meeting deadlines in filling of funded positions (92.89%), however the DHET still has vacancies in some key posts. The DHET is concerned about unresolved disciplinary cases four of the ten were resolved in 90 days mainly due to the state of the DHET capacities but the department is confident that it would meet the target. The average lead time from recruitment requisition received until appointment recommendation is currently 188 days instead of the planned 180. This is due to capacity and budget constraints in the recruitment unit to respond to demand. Although this is a challenged being faced by DHET the DG is doing everything in his power the address the situation. He asked the CFO and the CAC to make additional comments.

The CFO highlighted the expenditure until December, 2016 (third quarter).  The overall spending rate for the third quarter is 83.6% (including Direct Charges) The high spending trend is mainly due to transfers made to universities and TVET colleges which are not done monthly. These ttransfer payments and subsidies were processed as planned and in accordance with payment schedules, for instance Universities were paid in November while TVET colleges paid within the first nine months of the financial year end (January to March). When the transfer payments and subsidies were not considered, the average spending for normal operational activities, including compensation of employees, was 73.2% which comprise of Expenditure on personnel, examiners and moderators especially in the TVET colleges. Expenditure trends are monitored closely by the Department as various components are at risk of overspending, cost containment measures as communicated by National Treasury in 2016 were implemented, and the highest spending trend was the UE Programme 3 due to the subsidy payments to Universities and NSFAS. Consequently, transfer payments comprise the spending item that reflects the highest trend. No irregular, fruitless or wasteful expenditure have been reported to date. There is, however, possible irregular spending in the CET sector that is currently being reviewed. He highlighted the spending per programme in the third quarter; the lower spending under PPS was to disputed bills that are paid in January to March, 2017, more ad-hoc claims are been expected from UE and R43 million was transferred from the SD to TVET colleges for the internal development training and lecturer capacity development.  By 31 December 2016, all transfer payments to institutions including subsidies were on schedule. In addition, expenditure trends are monitored closely within the Department and costs saving measures were effectively implemented. Although expenditure was within the norm as at 31 December 2016, strict measures may be required during March 2017 to prevent the Department from overspending – the Director-General already requested Branch Heads and Managers to prevent unnecessary spending. All spending is monitored carefully to ensure that there is no overspending and that underspending is kept to the minimum.

Action plans on the 2015/16 audit were developed by all branches and branches provide weekly reports on action plans. Progress on actions taken is a standing item on the agenda for Senior Management. During recent compliance verifications, the following areas are at risk: HR records (especially for TVETs and CETs), Examination claims (some problems in claims at exam centres that did not reach examination component and resulted in not being processed on time), Performance information (specifically for targets of TVET sector) and Record keeping of all investigations. He also highlighted that out of the 92 actions to be taken on audit findings 49 actions had been completed while 43 were still outstanding. The audit action in progress for finance and Supply chain management (SCM) were matters that had to do with the financial statement and addressed lease commitments, age analysis of debtors and accruals provisions which could not be reflected as completed but processes are in place to address these issues. The other high audit action in progress were due to HR and SD and some of the issues are being addressed in the fourth quarter. He invited the CAC to make additional comments.

The CAC reported that the DHET was on a strong drive at this stage to get the DHET to join the select few departments with clean audits. Key areas of concern as highlighted by the CFO are the HR issues because there are still files that are not complete or are missing as result of limited capacity. The DHET needs to prevent material adjustments after submissions especially with issues of claims. The DHET has improved in giving of performance information although a system has been implemented a system but the CAC is still worried about the quality of performance information from TVET that has caused the Auditor General not to rely on this figures. The meeting in January showed some deficiencies which have being discussed with the DG and we also have an audit meeting on 15 March, 2017 to again monitor these audit outcomes.

Discussion

Mr E Siwela (ANC) asked the DHET to give updates on disciplinary cases because Dr Sishi had stated that disciplinary cases were not resolved due to capacity issues. He also observed that during the second quarter the DHET had stated that the Department lacked capacity. He therefore asked if DHET was by implication stating that despite progress made on recruitment it was still not able to address disciplinary cases. He also observed that funds were withheld from UNISA and Walter Sisulu University and asked if this was why the target of 205 thousand students for NSFAS was not met. He observed that for College infrastructure maintenance in the TVET programme there were campuses that were supposed to be built for the new TVET Colleges he asked if the bids were finalised and contractors were on site.

Ms M Nkadimeng (ANC) observed that reports from National Treasury showed that compensation of employees was lower than what was projected and a process was in place to fill spaces with service providers. She asked the DHET to state where it will acquire funds for service providers that would fill the vacancies and the process to fast track the capturing of applications. The DHET had stated that the financial health of the five Universities that had SR’s lower than one based on calculation of SR’s using RCCR were at high risk. Based on this she asked if the DHET could bail out these universities if this occurred. Finally, she encouraged the Department to achieve the target of 120 on average lead time for the Skills Development programme and she asked the DHET to give progress on the recruitment process of the boiler makers for INDLELA.

Mr C Kekana (ANC) remarked that the team should make the next briefing from the DHET participatory. He expressed concerns over foundation programmes especially nursing occupations, as inexperienced students are graduating from TVET colleges as against the past where nurses were tutored by experienced lecturers at UNISA and they had a lot of practical training. He also asked if the DHET could design training programmes that involved experienced industry players to higher education; and asked the DHET to give an update on how it would meet the target to generate 30,000 artisans per year.in the TVET programme by the year 2030.

Mr A Van der Westhuizen (DA) appreciated the DHET for their presentation and remarked that the performance indicators for UE were up to standard. He asked if the performance indicators for TVET differed from that of UE. He also asked if the Department could also report on the financial health of the TVET Colleges and give an update on the qualifications of the TVET Lecturers. He observed that the funding model for UE had been consistent and asked the Department why it was not reporting on the funding model for TVET Colleges. He asked why there was severe overspending on examiners in national examinations. He remarked that the Budget estimates for the next two years indicated that there were planned drops in the number of staff employed by the Department he asked how the DHET hoped to manage the job cuts. He also expressed concerns on the number of registered and graduates and asked how the DHET planned to meet its target.

Dr B Bozzoli (ANC) observed that the report on the university financial health was important; based on this she requested that the DHET urgently present the report to the Committee because she was not happy with only one indicator that had been shown during the brief. She also expressed concerns that the SETA life span been extended to 2020 and the Minister was leaving the dysfunctional SETA for another three years. Therefore, she asked DHET to state its plan for cleaning up the SETAs. She also asked why the DHET could only deal with half of the significant findings of the AG with regard to TVET and CET colleges in the third quarter, and comment on how universities were responding to the delay in funding framework during a period of student strikes

Prof T Msimang commended the DHET on the TDG and its purpose of enhancing teaching but expressed his disappointment with the fact that some universities staff where not using the golden opportunity. He asked the DHET to state efforts to address such universities. He also expressed serious concerns about delays in issuing certificates and results at TVET Colleges because students are very dissatisfied with the delays. He observed that there were still a number of vacancies at TVET Colleges, and asked the DHET to state the challenges in filling vacancies at TVET colleges.

Mrs J Kilian (ANC) appreciated the Department for its extensive presentation, expressed gratitude that the DHET was working towards achieving a clean audit even though the audit committee had inherited a backlog of problems from TVET colleges. She asked the DHET to explain the problems encountered with Human Resources records, state if it lacked capacity to deal with disciplinary cases or had legal challenges. She asked the DHET to explain the system of claims on examinations, why the claims on examinations experienced yearly over expenditure and the policies that were in place to address the audit outcomes in TVET colleges. She expressed concerns on why the DHET set a target on the regulation of Satellite Community Learning Centres (CLCs) before the DHET had sought legal opinion. She asked DHET to state policies being put in place to address CLCs She also expressed concerns on why the CET programme relied on the buildings of other institutions to host its courses because the buildings were not maintained properly and asked if was desirable to share buildings with other organisations.

The Chairperson remarked that the format of the report was not in line with the standard of the Committee even when the issue had been addressed earlier. She emphasised that the Committee expected a clean audit in each quarter. She asked the DHET to explain why there was a decline in service delivery and stated that the Department should always give updates on the targets that were not achieved in the previous quarter. She also mandated the DHET to give updates on certificates during each briefing, asked which policy established the SAIVCET unit and a small Advisory Board on SAIVCET and where funding for the SAIVCET unit would be received. In addition, she asked the DHET to give timeframes on the gazette on the General Education and Training Certificate for Adults, take the Committee through all the Policy Framework (PF) Workshop so that the Committee could have an input in the PF and give indications on the progress of the DHET every quarter.

The Ag DDG committed to follow the report format of the Committee. Each question would be addressed by the specific programme Heads. She reported that the five Universities at risk could operate because they received funding from subsidies and fees.  However; the issue was that they would be at risk without income from fees. She also stated that DHET has not needed to bail out any University but there could be a time that they may be constrained for a particular period, in which case they could request the Minister to give them an overdraft. The DHET would not withhold funds from Universities if the Universities spent them effectively; funds were withheld from UNISA and WSU because funds for foundation programme (FP) had accumulated over previous years. For instance, FP students in UNISA could not be verified hence the DHET is presently working with UNISA to see if UNISA could operate the FP and the process of receiving the grants are being reviewed. The DG wrote to UNISA to state that they would not be receiving the funds and this has impacted on the target because UNISA was supposed to have a lot of students’ register for the FPG programme. The target for students to be funded on NSFAS was an MTSF target, it was not set by DHET, the programme was not fully funded, however; the DHET is working towards getting funds for the programme. The point of lecturers and students getting experience in the field before being brought back to the Institution is taken. The lecturers for all programmes have relevant work experience. All programmes have performance indicators, however the indicators for UE were due in the third quarter, updates on the financial health would be sent to the Committee before the workshop, the Institutions are using the TDG effectively, the DHET is seeing increased throughputs through the system and withdrawal of new funds from Universities that are not using the funds effectively has proved to be a good accountability measure.

Ms Magnus reported that 367 bids were received in June, 2016 DHET appointed an external Service Provider to assist with an evaluation process although there were some delays but the process is ongoing, currently the bid evaluation committee is dealing with compliance checks and the internal audit committee is confirming the scope of the bids. The DHET is hopeful that the bids would be awarded by June, 2017. The TVET colleges have performance indicators (PI) but they were not due in the third quarter. These PIs cover enrollment and throughput numbers, pass and certification rates but do not cover Financial Health (FH) or staff qualifications but the other PIs can be incorporated. In addition, the PIs for the TVET colleges are not as sophisticated as the UE programmes. The TVET has good indicators on FH not all the indicators are good but they will be shared next quarter. A Ministerial committee is presently working on the funding norms for TVET colleges but this would be given soon. The TVET examination allocation has never changed in many years but as the system has grown and more learners have been taken into the system the TVET marked scripts has also increased and no process has been put to balance this. The funding norms consider and look at examination proportion. The DHET has considered reducing the number of examination cycles so as to reduce marking costs because exit modules two and four are external examinations. Discussions are on with Umalusi and Quality Council for Trades and Occupations (QCTO) to reduce modules that have external examinations. The DHET has acknowledged that more sustainable plans are needed for the TVET college examinations. The SETA systems are old but plans are on to develop a new system, for instance, Information Technology systems are being developed to so that learners would receive their results online in the near future. She also committed to giving updates on TVET examinations every time the DHET met with the Committee. Lecturer placement is being taken up by SAIVCET and the focus is continuous professional development and systematic upgrading of lecturers. Although DHET published minimum guidelines for qualification of lecturers in the system in 2013, this guideline has not been implemented because our Universities have not been ready to develop on these qualifications. We anticipate that some of the Universities will be ready and the DHET would begin to implement the guideline, the DHET also acknowledges that lecturers that have worked for some time need to upgrade their qualifications and re-familiarise themselves with latest technologies and work process. However, this would be captured in the DHET’s professional work development plans which is just starting now hence the Department would not report on it presently. The examination conduct policy target is at risk because of the processing involved. The CET Act empowers the establishment of the SAIVCET unit but it has not been enacted because the DHET does not have funding yet for the entity. In the Act an Advisory Board is part of the supporting mechanisms put in place to assist the entity and the intention is to put together a group of experts for advice only but the DHET would consult its legal team to see if the Department is not breaking any law.

Mr Diale stated that the suggestion of Mrs Killian to insist on legal opinions before decisions to make regulations are made (establishment of CLCs) would be taken as a recommendation. DHET enters into agreements or cost sharing mechanisms on maintenance of buildings of other institutions (strategic partnerships). The DHET will provide in formation in writing for CET gazettes

Mr Mabena reported that the SD programme is having substantive consultations with the Department of Social Development (DSD) partners (SDPs) as required with SD Act. The interactions with the SDPs indicated that the process will take longer than anticipated because it also has to go through the National Skills Authority, the post publication comments from the business committee was encouraging but the SD programme is happy with its progress. The DHET has introduced new regulations, the M&E reports indicate progress and the SETA panel is also qualitatively examining within the sector skill, strategic and annual performance plans and annual reports. The SD programme is putting in place the necessary infrastructure in terms of policies to address the challenges in the SETA landscape and speed up its implementation. This has led to the achievement of a clean audit in ten SETAs and we hope that there would be an improvement in other SETAs so that the SD can deliver on the National Development plans.

Dr Sishi reported that the DHET has started the implementation of a plan in respect of the Disciplinary cases to bring an improvement these includes a Review of the HR plan which has already being approved and the filling of funded vacancies. Although the Department is struggling to achieve this target the DHET expects a turnaround soon. Additionally, during the last Audit Committee meeting, the DHET decided to centralise investigations. The DG has implemented these centralisations and the DHET would give an update during the next quarter.

The CFO reported that when the TVET colleges started operations the DHET did not have a baseline to adjust costs on normal operational expenditure with examinations which is a major part of TVET colleges mandate therefore the DHET has an ongoing National Skills Fund (NSF) project that assists the Department on examinations costs. The reason the DHET has a huge deviation in expenditure by end April compared with December is that the November examination claims come in December and are paid in January and February. In addition, the major examinations are written in November, which leads to a doubling up of the expenditure but this is seasonal within the Departments baseline it is impossible to allocate sufficient funds for examinations to ensure that there is no over expenditure otherwise certain of these services would be underfunded however; the DHET understands the situation and provided for this deviation through the NSF. The concerns on planned drops in the number of staff employed would be addressed during the presentation of the 2017/18 Annual Performance Plan and budget but it is a reduction of the baseline. The shift of funds between SD and TVET college programme was undertaken to perform certain trainings and lecturer capacity development and not to move the SD levy to another programme. More than 20 of the audit actions were linked to the financial year therefore, the processes can only be undertaken when the financial statements are finalised. The other audit action relates to the testing and verification of the information received from the TVET but the DHET is working with the Auditor General (AG) to address the issues.

CAC remarked that he had earlier on stated that the DHET was working towards a clean audit therefore; staff are working tirelessly to resolve the issues and are working specifically on mechanism that would not allow HR issues to re-occur. In addition, the performance issue challenges are not observed in UE programmes because the AG trusts the PI in UE however, the DHET is working on mechanisms to ensure that the AG trust information on PI received from TVET colleges but this would depend on the AG office. The audit committee would also implement a register so as to monitor audit actions that the AG wants DHET to address. Furthermore, the capacity in working on 36,000 files is huge, for instance when a sample of 120 files was done 20 were missing and some documents were also missing from the sample files received. A clean audit based on service delivery requires good governance and measurements during oversight visits.

Dr Parker also stated that the universities have been informed about the delay in the funding framework (FF) although, the universities had hoped that the FF would have been approved earlier but this FF would not change the way Universities are working presently and once there is an agreement on the final FF a migration that does not destabilise the way the UE system is working would be put in place.

The Chairperson asked the Members to ask follow-up questions and also asked DHET to reply to questions that were not yet answered.

Mr Kekana observed that with the migration to model C suburb schools a lot of schools are available to be used as properties for learning with the CET programme. He suggested that rather than build new colleges or partner with Catholic organisations the available schools could be converted to facilities to be used by the CET programme, and where these facilities were in the provinces maintenance would be the responsibility of the province.

Mr Van der Westhuizen asked the DHET to state who was responsible for administration of new curricula (the DHET, Umalusi or QCTO) for instance there were no designated training centre in South Africans that trained citizens to repair mobile phones which showed an example of outdated curricula in the system.

Dr Parker reported that the DHET has a joint working group with the Department of Public Works to identify possible buildings that are underutilised for post education, training and student accommodation, a database has been created and the DHET is examining the buildings for possible use.

Mr Mabena invited the officer in charge of Artisan (AC) to answer questions on fluctuating lead times. The AC stated the lead times were affected by HR issues which included the delay in filling Boiler makers’ (BM) vacancies and the ratio of candidates to trade assessors. As an intervention measure the SD programme is liaising with the QCTO to adjust the ratio of BM trades to address build-ups in the BM trades. Presently the electrical and BM trades are in high demand at INDLELA; this affects the supply and demand, the issue of vacancies and lead times.

Ms Magnus reported that the different qualification types are under different agencies. For instance, the NCV is an Umalusi qualification but the programme and curriculum is the responsibility of DHET however, the National Accredited Technical Education Diploma (NATED) and occupational qualifications is the responsibility of QCTO but DHET feels that the qualification statements are broad, high level and difficult for TVET colleges to meet but the SAIVCET unit is putting mechanisms in place for a detailed syllabus to support colleges to deliver this qualification. The repair of cell phone is an NCV qualification that is a QCTO occupational qualification for instance Ekurhuleni West in conjunction with Samsung teaches people electronic and phone repairs.

The CFO reported that additional spending for service providers that would fill the vacancies would be sourced from the savings of the Department and this activity has been carried out within the branch but the total expenditure remained within the branch expenditure.

The Chairperson reminded the DHET to clarify if the DDG CET was employed legally or illegally presently because the contract was for particular months even though the vacancy had been funded.

The CFO replied that the officer was a Chief Director that was acting as an Acting (Ag) DDG since 1 April 2016, which means that he can still act till the end of March however; he was not sure about what the recruitment position was although advertisements have been done but he was not sure about the shortlisting and interview process. The DHET would give a written submission to the appointment issue.

The Chairperson remarked that the Committee had asked the DHET to give answers to matters of non-compliance with appointment procedures for the DDG CET and other Acting DDG because the Committee was not convinced that they were legally employed. She asked the DHET to go back and prepare a written response because the response was not sufficient and the appointments of Acting DDG could lead to fruitless expenditure. She appreciated the DHET for the extensiveness of the reports, reminded Members that they needed to adopt the Minutes of past meeting, schedule time slots to; examine the annual reports of SETA’s that had been referred to the Committee, receive a brief from the AG’s office on answers given on TVET programmes and discharged the team from DHET.

Adoption of minutes
The Chairperson invited the Members to comment on the Minutes of the 15th of February, 2017.

Ms Killian remarked the Minutes were extensive but were not captured in the same way that earlier Minutes were presented. However, she stated that the Minutes confirmed and captured the proceedings of the meetings.

The Chairperson reminded Members that the Minutes were not prepared by the Committee Secretary but the Minutes were taken by another Secretary.

The minutes were adopted.

Committee business
The Chairperson suggested that if she was late at meetings an Ag Chairperson should be elected.

Mr Kekana was elected to chair the meeting in the absence of the Chairperson.

The Chairperson appreciated the Members and suggested that Members should finalise the roles of sub-Committees as set by Parliament to achieve some of its work.

The meeting was adjourned.