Western Cape Education Department Annual Report 2021/22

Meeting report

[The meeting started with an in-committee session with the Auditor-General and the audit committee on the audit outcomes of the Western Cape Education Department (WCED]  

Opening

The Chairperson welcomed the Department and the Western Cape Minister of Education. 

The WCED’s Superintendent-General (SG) said the Department received an unqualified audit with findings in the Provincial Data Office (PDO) area. The Department was on a journey to receive an audit with no findings. In 2020/21, there was a 61 percent achievement in the PDO area. In the year under review, there was a 74 percent achievement. More needed to be done on action plans, definitions and so on. There was a 99.9 percent expenditure of the R25,38 billion budget.

Audit Outcomes

The Auditor-General’s opinion was that the financial statements presented fairly, in all material respects, the financial position of the WCED as of 31 March 2022, and met the requirements of the Public Finance Management Act and the Division of Revenue Act. 

There were findings on the usefulness and reliability of the performance information for various programmes. These included annual targets for the percentage of learners retained in the school system; the percentage of learners with textbooks in every subject in every grade; school-based violence reduction programmes; the provision of laboratory facilities and smart classrooms; and the number of learners benefiting from the no-fee schools policy.

Discussion

Ms D Baartman (DA) said the major risk from the COVID period was the learning losses. How would this be dealt with?

Mr K Sayed (ANC) said school operations at Heathfield High had been disrupted since 2020 because of the issue involving the principal, Mr Newman. What was the exact cost of the case against Mr Newman and of trying to stabilise issues at the school? He referred to a section of the Department's annual report dealing with fraud and corruption. Regarding contracts like the National School Nutrition Programme, what was the audit committee's advice on contracts like this?

Ms N Nkondlo (ANC) referred to Part C on governance. Did the Department have a Broad-Based Black Economic Empowerment (B-BBEE) Commission certificate? Did the Department have any public-private partnership that affected its service delivery? Regarding early childhood development (ECD), what plans were in place to deal with risks from the new mandate? What mitigating strategies was the Department putting in place? What was the transition from the COVID period? Regarding equitable access to online information for learners and parents, considering educational poverty, how many learners and parents could have access to online information?

Ms M Maseko (DA) said that there was still room for improvement on the audit outcomes. Regarding health and safety, how were the schools profiled for safety in order for the Department to respond to their needs? In the rural areas, in most instances, there was a lack of policing, and this negatively impacted the children. Some children were forced to sell drugs on the streets and got away with it because their parents were at work. For the Department to intervene, profiling was required. How were problems identified? In the rural areas, who did the department partner with for intervention?

The Chairperson said that during the previous meeting with the Department, it was noted that the annual financial statements were late. This was a big issue. Could there be more information on the 99.9 percent expenditure?

Responses

Learning losses

Mr David Maynier, Western Cape Minister of Education, said there was a direct correlation between contact time and learning losses. Routine was crucial for education, and the disruption due to COVID negatively impacted the children. On the mitigation strategies for the learning losses, firstly, there was a push for a full return to school which was aided by the vaccine rollout; secondly, a trimmed curriculum was put into place which removed some parts from each subject; and thirdly, systemic testing was done to determine the actual effect of COVID-19 on learning losses. In the 2024/25 financial year, there would be a realignment of the curriculum. In the foundational phase, the learning losses were mainly in reading and calculation. Hence, the number of hours spent on reading and mathematics was increased.

Answers to the question on the costs arising from the  Healthfield High matter would be provided in writing.

National School Nutrition Programme

Mr Leon Ely, Deputy Director-General (DDG):  Corporate Services, said that the requirements for the extension of the National School Nutrition Programme (NSNP) contracts were that National Treasury be informed in writing and that the Auditor-General also be informed. This matter was referred to the Standing Committee on Education, Culture and Sports and a detailed report was submitted on the issue of extension of contracts. A conditional grant governed the NSNP and the main holder of this grant was the national Department of Basic Education (DBE).

In terms of the Division of Revenue Act (DORA), a menu was provided that the Department had to comply with. In 2018, the Department had to cancel the tender because the menu was changed. When the Department obtained approval from the DBE for the menu, it began advertising for a new tender. The number of tenders received was immense and the Department had to ensure fairness and that all legal requirements were met. Hence, it was a lengthy process. Currently, the tender processes are in the final stages and the new tender would be awarded soon.

Fraud and Corruption

Minister Maynier responded to questions on fraud and corruption in the period under review. Allegations were substantiated in nine cases involving fraud, corruption, theft, irregularity and non-compliance. In two cases, investigations were concluded with no adverse findings, but recommendations were made. In one case, the investigation was concluded with no adverse findings.

Regarding an investigation by the Special Investigating Unit (SIU) into procuring personal protective equipment from Masiqhame Trading, the Minister said there were no findings in its report of fraud, corruption or fruitless expenditure. The findings were on procedural irregularities. The recommendations were that action needed to be taken against three employees of the Department. However, no action was taken against two because of a conflict of interest. One official was given a written warning.

B-BBEE certificate

The Committee was told that a completed certificate submitted to the Commission was based on DTI requirements. However, this was not the same certificate commonly used for service providers.

ECD 

Minister Maynier said that from a systemic point of view, the sector had not yet considered Grade Rs. In the year under review, the Premier had called for a session with the two MECs for the Department of Social Development (DSD) and the WCED, and had met with the ECD sector to discuss the plans set in place. During the discussion, it became apparent that there should be no immediate changes. The DSD was in collaboration with NGOs. The decision made was that everything would remain the same for 24 months. Currently, the focus was on understanding how the sector worked, how to maintain the service and how to cut out excessive things.

Mr Archie Lewis, DDG: Institutional Development and Coordination, said that access to ECD could only be achieved once an ECD site was registered. Once it was registered, it would be subsidised. By the end of the first quarter, 1 566 sites had been registered, and by the second quarter, 1 599 sites were registered. The biggest stumbling block was the compliance documentation. Requirements for the ECD site were that a building plan must be submitted to the municipality and that the land must be owned by the person who wanted to create an ECD site. The plan needed to be approved by the municipality. There must be sufficient parking, a playground for learners and ablution facilities.

There had been a suggestion that the DBE should engage with entities like the SA Local Government Association (SALGA)  to speak to municipalities to facilitate the registration process. There were interventions by the DBE at a national level to be implemented uniformly across the provinces, but this would take time. Governance at ECD facilities was worrisome. The owner received a subsidy from the state and the owner decided what to do with the subsidy. This could become risky, especially when people could not behave responsibly. In the absence of governance at the ECD site, a service level agreement ensured monitoring and compliance.

Public-private partnerships

Mr Ely said that the Department did not have any public-private partnerships. There were partnerships at school level between the governing bodies and particular parties. Since schools did not have to comply with the Public Finance Management Act (PFMA) these were not classified as public-private partnerships.

Access to technology

Minister Maynier said that technology was important, and its accessibility was being pushed into the ECD centres, schools, and so on.

Safety Profile

Mr Lewis said the high-level safety risks were in schools in the metro area. In the rural areas, safety risks were not as high. An organised system in the Metro singled out the high-risk schools in areas such as Khayelitsha and Helderberg. These schools were dealt with by a budget of R35 million that ensured that they were provided with 24-hour security. During the school holidays, security remained at the schools to prevent burglary and vandalism. Programmes were also run at the schools during the school holidays to keep the students busy and away from trouble. Each school had a safety committee comprising representatives of the community and the SA Police Service. The WCED had created an online tool, the Safety and Security Resilience Scorecard, which had a questionnaire to be filled out by the principals of each school. This scorecard gave the Department an idea of the school's profile and where the strengths and weaknesses were.

Spending

Mr Ely said that 99.8 percent of the budget was spent. This was an improvement over the previous year. 46 000 people on the payroll and 20 000 in youth initiatives received transfer payments. If the personnel budget fell short for one month, then there would be problems at the end of the year. This budget was managed by a team that ensured that everything was aligned. There was a budget for infrastructure and for goods and services. Factors such as the weather and electricity supply could impact goods and services. There were procurement issues and supply issues. The R32 million under-expenditure was submitted for rollover. The Department focused on turning expenditure into service delivery.

Further discussion

Ms Maseko asked for clarity on the profiling in the rural areas, such as Breede Valley in Worcester, where gangsterism existed. Did the Department have any limitations that caused it to focus more on the Metro than the rural areas?

Mr Sayed said his concern about the NSNP was a lack of advertising and that the same companies received tenders. This was not fair competition, and other smaller businesses should also be able to profit from the tender. The response to the Masiqhame Trading issue was very concerning. The SIU recommended action against three officials, but action was taken against only one. The other two officials did not face repercussions because of a conflict of interest. This was problematic and more information was needed on the matter. The Department of the Premier and the WCED needed to meet with the Standing Committee on Public Accounts (SCOPA) to receive their recommendations on this matter.

Ms Baartman referred to the finding on textbooks. Was the next year's audit going to be the same? The Department reported progress on this issue. Why was this progress report not sufficient? Why did the Auditor General not count the textbooks? Money was being spent on indicators for textbooks when the textbooks could be easily counted.

On the findings on the retention of learners, she said the Grade 1 learner numbers were not audited previously. Grade 9 was being audited. Could records be reviewed to determine the retention rate between Grade 1s and Grade 9s? What were the solutions?

Ms Nkondlo asked whether a clean audit was possible. Was setting indicator targets a problem? Was there a challenge between target indicators and performance information? Regarding a reference to irregular expenditure, were any staff being disciplined? Could more information be given on the cases of irregular expenditure? What was the extent of the challenges around salary overpayments in the Department? How many staff members were involved and what remedial action was being taken?

Mr A Van der Westhuizen (DA) said that keeping track of learners was always an issue. Not all learners that started in Grade 1 in the province would finish their school career in the province. To what extent had the Department been able to resolve this? How could the Auditor-General be aided in this matter? Software might be required to uniquely identify the learners at provincial and national levels.

The Chairperson said that the key was the Department having a clean audit. What was the experience in other provinces in terms of audits? The Department could learn by focusing on their national counterparts.

Minister Maynier responded to the Chairperson. The Auditor General found compliance on the retention rate for Grade 10s to Grade 12s. The issue was that there was no problem for Grade 10 to Grade 12, yet there was a problem for Grade 1 to Grade 9. The reason for this was because learners from Grade 10 to Grade 12 were in the CEMIS system where they could be tracked.

In response to Mr Sayed’s comments on the NSNP contracts, he said fair competition was important, but there were many technicalities in the tender issue that the Department had to consider.

He said the Department’s ideal was not to have any irregular expenditure. However, in some cases, this was not possible. To combat irregular expenditure, there was consequence management for each action. Action was being taken against officials who did not follow the processes and rules. A clean audit was a journey that the Department was working on.

On the Masiqhame matter, he said processes were followed and this could be shared with the Committee.

Mr Ely responded to Ms Baartman. The level of audit and engagement with the Auditor General was not the issue, but the technicalities involved. The finding was not on the textbooks but on the indicator being removed and errors in performance indicators. The technicalities included school records, errors in handing out textbooks, etc. The Department was the only education department which had had four clean audits in a row.

On the question of overpayments, he said that when people became ill, they had 32 days of sick leave that was paid for, and if this was exceeded, they went into incapacity leave. Thereafter the case was assessed to determine if it had merit or not. If the case had merit, then the payment to the person became valid. If invalid, the salary was reverted and recovered, resulting in a salary overpayment debt. Employees had to give the money back, and those that had left had to be tracked by a debt collector. If the person could not afford to pay the debt, other processes took place. Everything was aligned to the Department’s policy.

Minister Maynier said that the CEMIS system gives learners a unique identification number which could be tracked throughout the system.

The Chairperson asked for the amounts involved in the NSNP and the SIU matter.

Minister Maynier said that the NSNP cost R441 million per annum. The SIU matter involved R54 million.

A representative of the Auditor-General said that, in the expenditure framework for 2021/22, there was a key performance indicator (KPI) that the National Department created regarding materials. The provincial Department was responsible for formulating the standard operating procedures in terms of the KPI. Staff were to be monitored and responsible staff were to be on the ground to implement controls.

Ms Baartman asked for the provincial experience with the KPI to be provided in writing to the Committee.

Ms Sayed asked for the Auditor-General to comment on the extension of contracts for the NSNP.

Minister Maynier said two things were needed for a clean audit: firstly, strategic planning had to be strengthened, and secondly, monitoring of action plans needed to be done quarterly.

It was decided that the rest of the questions would be addressed in the next meeting.

The meeting was adjourned.