PORTFOLIO COMMITTEE ON EDUCATION (3 SEPTEMBER 2002): BRIEFING BY THE DEPARTMENT OF EDUCATION ON THE NATIONAL NORMS AND STANDARDS FOR SCHOOL FUNDING

BACKGROUND
Since the 1994 democratic elections, one of the major steps that South Africa has taken to ensure that primary education is compulsory has been the declaration of compulsory education as a right. Indeed, Section 29.1 of the "Constitution of the Republic of South Africa Act, No. 108 of the 1996) states the following on education;

"Everyone has the right-

1. to a basic education, including adult basic education; and
2. to further education, which the state, through reasonable measures, must make progressively available and accessible."

In addition, the preamble to the South African School Act, 1996 states that;

To achieve these objectives in a systematic manner, the National Norms and Standards for School Funding (NNSSF) have been developed according to Section 35 of the South African Schools Act, 1996. The NNSSF that deals with non-personnel funds, embody the principles of equity and redress as required by Section 34(1) of the Act. Thus, the NNSSF are aimed at ensuring that pupils from poorer homes are given the necessary financial support by the State for them to have access to education.

In terms of the Constitution and governments’ budgeting procedure, the national Ministry of Education does not decide on the amounts to be allocated annually to Provincial Education Departments (PEDs). This is the responsibility of provincial governments and legislatures, which must make appropriations to their respective education departments from the total revenue sources available to their provinces. Thus, each province determines its own level of spending on education, in relation to its overall assessment of needs and resources.

The funding of public schools by PEDs can be sub-divided into two components, namely, the funding of personnel and the funding of non-personnel items. Concerning the funding of personnel, PEDs pay the salaries of school personnel on the approved staff establishment. Any additional personnel requirements identified by the School Governing Body (SGB) will be appointed and funded by the SGB.

Concerning the funding of non-personnel items, PEDs follow the criteria that are stipulated in the NNSSF document. PEDs must determine what amounts are necessary, for example, new buildings, emergence repairs, etc. The remainder of non-personnel funds is then divided amongst the schools in a province according to the Resource Targeting List. Each PED is required to produce a Resource Targeting List of all schools in its province, sorted according to the conditions at the school and the poverty of the community served by the school, so as to produce five groups of schools. These will correspond to the "School Quintiles, from the poorest to least poor". Resource allocation will be based on this list, and the per capita funding of a learner in the poorest quintile is seven (7) times more than that of a learner in the richest quintile.

According to the South African Schools Act, 1996 (No 84 of 1996) all Public School Governing Bodies are obliged to support their schools financially as best they can. The Act provides that a School Governing Body must:

" Take all reasonable measures within its means to supplement the resources provided by the State in order to improve the quality of education provided by the school to all learners at the school" (section 36).

However, in fulfilling their obligation to raise supplementary resources, School Governing Bodies are not required to charge school fees. Whether or not to charge school fees is a matter for the parents of the school concerned. The Act links the question of fees to the budget of the school, which the School Governing Body must present to a general meeting of parents for approval. The intention is that the School Governing Body will give the parents all necessary information about the school’s income, from the State and other sources, and its educational needs. Parents will then decide what additional revenue the school needs for educational purposes, and how that revenue is to be raised, including whether or not fees are to be charged.

Parents of learners at a public school, therefore, carry serious responsibilities with respect to the determination of a school’s budget, its sources of revenue, and (if fees are charged) the level of fees. It is, therefore, important for parents to attend the general meeting of parents. Furthermore, if the majority of parents vote in favour of school fees, each parent is responsible for paying the required fee, except in cases where exemption is granted.

At the parents’ general meeting, any resolution that proposes fee payment must include the amount of fees to be charged, and equitable criteria and procedures for the total, partial or conditional exemption of parents who are unable to pay the fees. Therefore, in making its decisions, the parents at the parents’ meeting must take into account, as far as is practicable, the financial circumstances of all the parents, taken as a whole. In drafting the National Norms and Standards for School Funding policy, government acknowledged that not all parents would be able to afford to pay the school fees as determined at the parents’ meeting. Therefore, the National Norms and Standards for School Funding makes provision for parents who cannot afford the school fees of their children at a public ordinary school to apply to the School Governing Body of the school for full, partial or conditional fee exemption.

In short, these conditions are that if the combined annual gross income of the parents is less than 10 times the annual school fees per learner, the parents are fully exempted from paying any school fees. If their combined gross income is between 10 times and 30 times the annual school fees, they are partially exempted and if it is more than 30 times the annual school fees, they have to pay the full school fees.

It is of the utmost importance that School Governing Bodies are fully aware of what the policy on the National Norms and Standards for School Funding and the "Exemption of parents from the payment of school fees regulations, 1998 stipulate regarding the payment of schools fees so that unnecessary hardships are not placed on learners and parents.

To facilitate the implementation of the National Norms and Standards for School Funding, the national Department of Education has entered into an agreement with the European Union to utilise R7 million for the purpose of developing provincial capacity in the areas of funding, planning, and resource allocation. In this regard the national Department of Education appointed a consortium comprising the Education Foundation Trust, Gobodo Incorporated, Phambili Information Technologies and Sacred Heart to assist provincial education departments with the implementation of funding norms. The HEDCOM Standing Committee on Finance serves as the Steering Committee for the consortium.

An initial audit of the status of provinces was conducted in September 1999 to assess the state of readiness to implement the norms as from January 2000, and whether the provinces had established systems and procedures for the facilitation of the implementation of the norms. An audit report was presented to the HEDCOM Standing Committee on Finance. The main findings were:

The HEDCOM Standing Committee on Finance considered the findings from the initial audit and requested the consortium to develop a number of task orders to assist provinces in this regard. As time moved on, additional tasks were given to the Consortium to develop. A list of the task orders is given in Annexure 1. The task orders can be summarised as follows:

• Exemptions of learners from school fees

• Development, Planning and Budgeting

• School Financial Records

• Auditing guidelines

• Financial Directives

• Reporting Prescriptions

• The management of section 21 functions

• Amendments to the National Norms and Standards for School Funding in regard to the Funding of Independent Schools

(Approved by both CEM and HEDCOM)

• School Financial Reporting Tracking System and School Budget information system

• System to track the state allocation to non-section schools from budget, to requisition, to orders, deliveries and payment.

• Subsidies for learners at hostels and hostel funding

• Areas requiring policy review in the norms for funding of public ordinary schools

• Determination of fee levels at independent schools taking into account the nature and conditions of independent schools

• Assessment of the impact of the implementation of the funding norms on schools

• The analysis of the provincial resource targeting tables.

The HEDCOM Standing Committee on Finance indicated that provincial education departments could at any time request the consortium, with the approval of the HEDCOM Standing Committee on Finance, for technical assistance. The education departments of Eastern Cape, KwaZulu-Natal, Free State, North West and Limpopo were assisted with issues regarding their resource targeting lists, EMIS data and independent school subsidies.

• School fund

1. The collection, receipt and banking of money,
2. The value documents to be issued; how and why these should be safeguarded,
3. How schools should manage funds through the use of call accounts vs. current accounts based on cash flow projection.
4. How to balance trading accounts and which accounts are to be kept.
5. The role of the SGB vis-à-vis the school principal.
6. Asset management and the maintenance of asset registers.
7. Depreciation policy and its purpose, maintenance and repairs policy.
8. Replacement and writing off assets.
9. The audit process and focus the audit process on schools.

• Budget prescriptions

i) The accepted practice in the management of reports and their use,

ii) To whom the reports are issued,

iii) When reports should be generated and the periods to be covered,

iv) The key performance areas to be addressed,

• Auditing of financial statements

• Piloting manuals and computerised systems

• Provincial roll-out of manuals and computerised systems

• HEDCOM-Workshop

• Available funds and adequacy

• As was shown previously the school funding norms is a mechanism that distributes AVAILABLE FUNDS equitable to all in some instances and progressively in many instances in regard to public ordinary schools.
• The amount of funds available is that portion of non-personnel, non-capital expenditure in the public ordinary school programme (less any funds set aside for hostel subsidies and scholar transport) set aside for distribution through school funding norms.
• This portion made available is often too small and thus is some cases inadequate.
• Thus while the mechanism is able to distribute the given input it is not able to deal with the question of adequacy.
• Provinces such as Limpopo, Eastern Cape and Kwa-Zulu Natal are often faced with the question of adequacy.
• The redistribution from less poor to poor may thus have an impact in Gauteng and the Western Cape. The poor in some provinces are allocated funds that almost equal to that of the less poor in other provinces.
• The amount of funds available for distribution through the School Funding Norms Resourcing targeting table is determined in the main through Provincial budgeting processes.
• The Department of Education realizes that the adequacy question requires a number of strategies.

• Strategies to deal with the issues of adequacy

The Department of Education has, through meetings between the Provincial and National Treasuries, the Provincial Education Departments and Department of Education, begun to look at the question of adequacy by:

• Ensuring sufficient funds are made available for redistribution through the school funding norms (the increased allocation to Learning Support Materials is an example).
• Advocating though the budgeting structures for an improvement in the vertical division amount. (Through the 10 x 10 and the joint MinMec’s). NB: 10 x 10 is the ten treasuries and 10 education departments.
• The school funding norms regulations had indicated that it would be reviewed from time to time. Some of these issues and problems were not anticipated. The Minister has called for a review of the school funding norms to deal with the problems, issues and challenges being it is throwing up.

• Cost of Education, Education costs, School Fees and Exemptions

• We are aware of the numerous problems being caused by the escalation of education costs.
• We are also aware that parents, especially the poorest of the poor, are required to either supplement the resources of the state or accept the level of education provision provided by the state.
• While there are mechanisms in place to protect the poor, systems in ensuring these mechanisms are implemented are often not in place in Provincial Education Department’s.
• There have also been some interpretation problems regarding definition of a poor community. It has never been the intention of the norms to apply the definition of community rigidly. For example if the Provincial education department cannot provide facilities in the area where the poor find themselves and if these poor have to use facilities in a neighbouring less poor community then the community becomes much wider.
• The Minister has indicated that it is the right of every child to compulsory education and that once a learner is enrolled in a school, the inability of the parent to pay the school fee, should not affect the education of the learner. There have been a number of cases where learners have been victimised, even by school staff, because of the inability of the their parents to pay school fees.
• There have also been reports that school governing bodies’ and/ or school management are levying the school fee. This is totally against the school funding norms and the Schools Act as only parents present at a special meeting can determine a school fee.
• There are also reports that school are not assisting parents with submitting an appeal to the Department when they are not satisfied with the decision on their application for exemption.
• The Minister has on numerous occasions called on members of the public to report practises that are against the policy intentions.

• The Department of Education is increasing its role in monitoring the implementation of the school funding norms and will bring to the attention of those concerned problems in interpretation and implementation.
• The Department of Education has commissioned research to Prof Charles Simkins in looking at the efficacy of the data and mechanism to deal with the resourcing targeting table. Some indications are that we may be improving the efficacy of the calculations when the norms are reviewed.
• There are a number of other processes outlined previously that the Department of Education is going to use to ensure that the spirit and intent of the funding norms is maintained.

(027-0511 020829)