(THE FOLLOWING REPORT REPLACES
THE REPORT OF THE
PORTFOLIO COMMITTEE ON HIGHER EDUCATION AND TRAINING, PUBLISHED IN THE
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS DATED TUESDAY, 23 OCTOBER 2012;
P3424).
The Budgetary Review Recommendation Report
(BRRR) of the Portfolio Committee on Higher Education and Training on the
performance of the Department of Higher Education and Training for the 2011/12
financial year dated 17 October 2012
The Portfolio
Committee on Higher Education and Training, having assessed the performance of
the Department of Higher Education and
Training, reports as follows:
1.
Introduction
1.1 The
Committee
The Portfolio Committee on Higher Education and
Training was established in terms of Chapter 4 of the Constitution and Rule 199
of the Rules of National Assembly to exercise oversight and the monitoring of
the newly established Department of Higher Education and Training and its
entities. The Committee shared the Department’s vision for the location of the
sub-systems of further education and training colleges, adult education and training,
higher education, workplace learning, and skills development initiatives into
one department. This created an opportunity for maximising coordination among
these components of the learning delivery system.
The
mandate of the Committee:
In fulfilling its constitutional powers and responsibility, the Committee
performed the following functions:
The Committee’s
oversight mandate was informed in large measure by the priorities of government
stipulated in various policy pronouncements, which included the Medium Term
Strategic Framework (MTSF, 2009 – 2014) and the Strategic and Operational Plan
of the Department.
In preparation for the BRRR, the Committee considered, amongst others, the
Annual Report 2011/12 of the Department of Higher Education and Training, held
a meeting with the Auditor-General regarding the audit outcomes of the
Department and its entities for 2011/12, considered quarterly reports of 2011/12,
considered Section 32 reports of the National Expenditures for the first
quarter, the strategic plan 2010 – 2015 of the Department and other relevant
sources of information.
SECTION: 1
1.2 The Department
Mandate
2. Department’s Strategic
Priorities and Measurable Objectives
2.1 Measurable Objectives of
the Department
Five critical programmes determine the work of the Department. Within
each of the programmes, the Department identified a number of measurable
objectives.
a) Programme 1:
Administration
The purpose of this programme was to conduct management of the
Department and provide centralised support services. Within this programme, and
for the 2011/12 financial year, the Department reported the following:
b) Programme 2: Human
Resource Development, Planning and Monitoring Coordination
The purpose of this programme was to provide
strategic direction in the development, implementation and monitoring of the Department
policies and coordinate activities in relation to the (Human Resource
Development Strategy) HRDS for
c) Programme 3: University Education
The
purpose of this programme was to develop and coordinate policy and regulatory
frameworks for an effective and efficient university education system, to
provide financial support to universities, the National Student Financial Aid
Scheme (NSFAS), and the National Institute for Higher Education (NIHE). Within this programme and for the 2011/12 financial year, the
Department reported the following:
d) Programme 4: Vocational and Continuing Education and Training (VCET)
The
purpose of this programme was to plan, develop, evaluate, monitor and maintain national policy,
programmes and systems for vocational and continuing education and training,
including FET colleges and post literacy Adult Education. Within this programme, and for the 2011/12 financial year, the
Department reported the following:
e) Programme 5: Skills Development
The
purpose of this programme was to promote and monitor the National Skills Development Strategy (NSDS III). Within this
programme, and for the 2011/12 financial year, the Department reported the
following:
f) Financial Statements
Programme |
Allocation R’000 |
Actual Expenditure R’000 |
% Spent |
1: Administration |
155 688 |
152 404 |
97.9% |
2: Human Resource Development,
Planning and Monitoring Coordination |
38 734 |
38 074 |
98.3% |
3: University Education |
23 428 991 |
23 428 356 |
100.0% |
4: Vocational and Continuing Education and Training |
4 545 463 |
4 540 838 |
99.9% |
5: Skills Development |
130 638 |
122 025 |
93.4% |
6: Direct Charges (SETAs and NSF) |
10 095 113 |
10 025 251 |
99.3% |
Total |
38 394 627 |
38 306 948 |
99.8% |
g) Allocation versus
Expenditure Variances
Programme 1: Administration
Programme 2: Human Resource
Development, Planning and Monitoring Coordination; Programme 3: Universities and Programme 4: Vocational and Continuing Education and Training
Programme 5: Skills Development
SECTION: 2
3.
Analysis of Section 32 Expenditure Reports
3.1 Current expenditure trends
A cursory overview of the appropriations in
Vote 17 and the spending of the first quarter of the 2012/13 financial year reflected
the following:
The Department had
a total budget of R41.1 billion of which R9.6 billion, or 23.4%, fell under
direct charge payments to SETAs and the National Skills Fund (NSF). Exclusive
of direct charges, the Department had a total budget of R31.5 billion. Over 98%
of the total budget was under Transfers and Subsidies. The majority of these
transfers fell under Programme 3 to Universities. Exclusive of Direct Charges,
the Department spent R14.4 billion or 45% of the total budget available by the
end of the quarter. Planned expenditure at this point in the year was R14.6
billion. The Department was therefore behind on total spending by R261 million.
3.2 Programme spending trends are as follows:
a) Programme 1: Administration
Expenditure was
R36.1 million, or 20.6% of the available budget of R175.5 million. Planned
expenditure was R42.2 million, thus the Department was behind in expenditure by
R6.1 million. This was primarily due to payments to office accommodation being
lower than projected since a new building that met the Department’s needs had
still not been found.
b) Programme 2: Human
Resource Development, Planning and Monitoring Coordination
Expenditure was
R9.5 million, or 49.5% of the available budget of R40.7 million. Planned
expenditure was R9.2 million, in this regard the Department was broadly on
track.
c) Programme 3: University Education
Expenditure was R13
billion, or 49.5% of the available budget of R26.2 billion. Planned expenditure
wad R13.1 billion, thus the Department was behind by R143.5 million. This was
primarily due to lower transfers than originally projected, mainly due to the non-release
of the infrastructure earmarked grants to universities.
d) Programme 4: Vocational and Continuing Education and Training
Expenditure was
R1.3 billion, or 26.4% of the available budget of R5 billion. Planned
expenditure was R1.4 billion, thus the Department was behind by R107.3 million.
This was primarily due to delays in the transfer of the conditional grant for
FET colleges to the
e) Programme 5: Skills Development
Expenditure was
R22.2 million, or 22.2% of the available budget of R100.1 million. Planned
expenditure was R26.9 million, so the Department was behind by R4.7 million.
This was primarily due to lower than expected claims under SETA coordination
for Goods and Services such as accommodation, travel and communications.
4. Analysis of the Annual Report and
Financial Statements of the Department
The
Department of Higher Education and Training remained focused on ensuring that
it delivered on the commitments made in the Strategic Plan during the period
under review.
The
Department spent R38 billion or 99.8% of the total available budget by the end
of the 4th quarter with R87 million under-expenditure. The majority
spending (R23 billion) was under transfers and subsidies to universities and
was in line with expectations.
4.1 Report
of the Auditor-General
The Department received an unqualified audit opinion. Key matters raised
by the Auditor-General included:
a) Significant uncertainties
·
The Department was the defendant in a number of
law suits. The Department was opposing the claims and the ultimate outcome of
these cannot be presently determined.
b) Irregular Expenditure
·
The Department incurred irregular expenditure of R2 million due to
non-compliance with supply chain management processes.
c) Restatement of
Corresponding Figures
·
Lease commitments for the 2010/11 financial year had been restated.
d) Performance Information
·
Major variances were not in all cases supported by sufficient evidence.
e) Entities
·
22 universities received unqualified audit opinions with one university (
·
28 FET colleges received unqualified audit opinions with six receiving
qualified audit opinions, one disclaimer and 15 did not submit at time of
review.
·
16 SETAs received unqualified audit opinions with four receiving
qualified audit opinions and one disclaimer (Local Government SETA).
·
National Student
Financial Aid Scheme (NSFAS), Council on Higher Education (CHE), South African
Qualifications Authority (SAQA), National Skills Fund (NSF) and Quality Council
on Trades and Occupations (QCTO) received unqualified audit opinions.
SECTION: 3
5.
Consideration of Reports of the Committee on Public Accounts
The
Committee on Public Accounts did not consider the Department’s annual financial
statements for the year under review.
6.
Consideration of other Sources of Information
State of
the Nation Address (SONA) 2012
The 2012
State of the Nation Address outlined the following strategic priorities
relevant to the higher education and training sector:
·
Placing of education and skills development at the centre of
economic development
·
Filling of all vacant funded posts.
·
Investing in youth to ensure a skilled capable workforce to
support growth and job creation in
7.
Committee Observations
7.1
Department
The
Committee commended the Department for receiving an unqualified audit opinion
although this did not translate into effective service delivery. Concerns were
raised with regards to the following key issues:
·
The Committee was seriously concerned with the shortage
of staff in some branches of the Department as this adversely impacted on
service delivery goals.
·
The R402 million irregular expenditure reported by
the Auditor-General from SETAs was highlighted as a key concern for the
Committee.
·
It was noted with concern that the Department incurred
irregular expenditure of R2 million
while in the previous financial year it also incurred irregular expenditure of
R4 million.
·
The Committee emphasized that non-compliance to the
supply chain management polices and regulations was unacceptable and, should
not be a norm within the Department and its entities.
·
The fact that the Local Government SETA received a
disclaimer and more than four SETAs received a qualified audit opinion for the
2011/12 financial year symbolised that there were serious problems with the
governance and management of SETAs. This further enhanced a debate for the
review of SETAs existence.
·
It was noted with concern that there were no
guidelines or standard framework requirements for the submission of annual
financial statements by universities and FET colleges.
·
It was also noted with concern that the Department
had not resolved the INDLELA security system, owing to the delay by the
Department of Public Works.
·
The Committee was concerned that the Department did
not successfully meet its target of establishing regional offices in all nine
provinces as promised in the previous financial year.
·
It is a matter for concern that the Department
spent 99.8% of its total budget but did not achieve all the targets set in the 2011/12
financial year. This symbolized poor planning by the Department.
·
The backlog of outstanding National Certificate
Vocational NC(V) certificates for graduates of FET colleges remained a serious
concern for the Committee since these young people could neither find employment
nor further their education.
·
The Committee also noted with concern that some
learners did not receive their learnership certificates due to service providers’
no longer in operation.
·
It was noted with concern that the National Skills
Fund (NSF) incurred irregular expenditure of R174 million in the 2011/12
financial year.
·
The Committee was also concerned about the lack of sustainability
of the current funding of the operationalisation of the National Artisan
Moderating Body (NAMB).
7.
Conclusion
The
Department reported for the second time as a single Department in the 2011/12
financial year. The Department received an unqualified audit opinion for the
second time consecutively and this was commended by the Committee. The inadequate
financial performance of SETAs was highlighted as a serious concern for the Committee.
The Committee took note of the fact that the Department’s annual report did not
report on quantitative information in certain projects that were implemented.
The overall financial performance of the Department had improved from the
previous financial year although there were certain areas in some of the
branches which required urgent attention.
SECTION: 4
8.
Recommendations
The
Portfolio Committee on Higher Education and Training strongly recommends that the
Minister of Higher Education and Training consider the following:
a) Programme
1: Administration
The Minister should ensure
that:
·
The Department fills outstanding posts, especially
in the University Education and Vocational and Continuing Education and
Training branch.
·
The Department should finalize all the outstanding
disciplinary hearings cases and conduct qualification and job history
verification of new employees as required by the Public Service Commission.
·
The Department addresses all the findings raised by
the Auditor-General.
b) Programme
3: University Education
The Minister should ensure
that:
c) Programme 4: Vocational and Continuing
Education and Training
The Minister should ensure
that:
d) Programme 5: Skills Development
The Minister should ensure
that:
Report to be
considered