Department of Higher Education and Training on Quarter 2 performance

Higher Education, Science and Innovation

23 November 2016
Chairperson: Ms C September (ANC)
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Meeting Summary

The Department of Higher Education and Training (DHET), reporting on its second quarter performance, said during the period under review it had achieved ten of the 12 planned delivery targets for its core programmes, which covered university education, technical and vocational education and training (TVET), continuing education and training (CET), and skills development. 

In the programme which focused on university education, there had been no challenges in most of the delivery outputs, except for the revised funding framework for higher education institutions published in the Government Gazette, which was due by 31 December 2016. The revised funding framework had been drafted for public comment and had proceeded through the Socio-Economic Impact Assessment System (SEIAS) stage. The framework would be submitted to Cabinet before being published for public comment.

There had been a challenge in the TVET programme in respect of the national admission and promotion guidelines for the National Certificate (Vocational) policy, which was currently being reviewed by Umalusi. The process was not in the control of the Department. Another challenge was the review of the conduct policy, which was dependent on the finalised review of the qualifications policy by Umalusi. Delays in the finalisation of NC (V) review by Umalusi may negatively impact on this process.

The Department reported that its overall spending rate for the second quarter had been 39.1%. The high spending trend was mainly due to transfers made to universities and TVET colleges. No fruitless or wasteful expenditure had been reported.

Members expressed particular concern about the challenges taking place at Indlela, commenting that they were not pleased with what they had witnessed during their oversight visit to the training institution. Questions were raised regarding to the extent to which the Department was under-funded. The Committee also wanted to know what mechanisms the DHET had put in place to ensure that Umalusi complied with its obligations to the Department. It commended the DHET for achieving an unqualified audit report. 

Meeting report

Department of Higher Education and Training: 2nd Quarter Performance

Mr Mduduzi Manana, Deputy Minister of Higher Education and Training, introduced the presentation by saying that the focus would be on the goals that the Department had set for the five years which led to the 2020 financial year.

Mr Gwebs Qonde, Director-General (DG): Department of Higher Education and Training (DHET), said that for the quarter under review, the Department had planned to deliver 12 key outputs through its core delivery programmes, which covered university education, technical and vocational education and training (TVET), continuing education and training (CET), and skills development. Support programmes -- planning and corporate services -- had had no targets due for this quarter. Of the 12 delivery targets, the Department had managed to achieve ten (83%). Two skills development targets from Quarter 1 had not been achieved. The first had been the trade test pass rate at Indlela, which was at 50% instead of the planned 52%. The second had been the average lead time from trade test applications being received until the trade test was conducted at Indlela, which was 160 days instead of the planned 120 days. While the pass rate had remained the same in the second quarter, the average lead time had improved from 160 days to 124 days.

Mr Reineth Mgiba, Director: DHET, presented on Programme 3, which focused on university education. The purpose of this programme was to develop and coordinate policy and regulatory frameworks for an effective and efficient university education system, and it provided financial support to universities, the National Student Financial Aid Scheme (NSFAS) and the National Institute for Higher Education (NIHE). The programme had undertaken to deliver a total of 29 delivery outputs in the 2016/17 financial year. For the quarter under review, all five delivery outputs had been achieved. There had been no challenges in most of the delivery outputs, except for the revised funding framework for higher education institutions published in the Government Gazette, which was due by 31 December 2016. The revised funding framework had been drafted for public comment and had proceeded through the Socio-Economic Impact Assessment System (SEIAS) stage. The framework would be submitted to Cabinet before being published for public comment.

The purpose of Programme 4 was to plan, develop, implement, monitor, maintain and evaluate national policy, programmes, assessment practices and systems for TVET. The programme had undertaken to deliver a total of 11 direct deliverable targets from the second to the fourth quarters. For the quarter under review, the programme had planned to achieve three delivery outputs. The monitoring and evaluation report on TVET colleges had been approved by the DG on 22 September 2016, as had the teaching and learning support plans for TVET Colleges. The student support services plan had been approved by the DG on 30 September 2016. All three outputs had been achieved. These interventions would be monitored and checked to ensure their impact was being realised.

Mr Mgiba said there had been no challenges in most of the delivery outputs, except for the national admission and promotion guidelines for the National Certificate (Vocational) policy, which was currently being reviewed by Umalusi. The process was not in the control of the Department. The other challenge was the review of the conduct policy, which was dependent on the finalised review of the qualifications policy by Umalusi. Delays in the finalisation of NC (V) review by Umalusi may negatively impact on this process.

The purposed of Programme 6 was to plan, develop, implement, monitor, maintain and evaluate national policy, programme assessment practices and systems for community education and training. The programme had undertaken to deliver a total of seven outputs for 2016/17. One delivery output had been due during the quarter under review -- an approved monitoring and evaluation policy for community colleges – and this was approved by the Minister on 28 September 2016 for implementation.

Mr Mgiba described the progress on other targets which are due in subsequent quarters. The regulations for the establishment of the satellite community learning centres were due by 31 December 2016, and the draft policy had been developed and was awaiting approval. The national curriculum policy for community colleges was due by 31 March 2017, and the draft policy had been developed and was awaiting approval. The conduct policy for the General Education and Training Certificate for adults was due by 31 March 2017, and the draft had also been developed and was awaiting approval. An annual plan for education, training and development improvement for CET colleges was due by 31 March 2017, and the draft framework had been completed and was being processed for approval. An approved CET college infrastructure/facilities maintenance report was due by 31 March 2017. Reports had been consolidated and were being discussed at branch level with a view to developing updates and recommendations. An approved strategy on strategic partnerships was due by 31 March 2017. The draft strategy had been developed and was at a consultation stage internally.

Programme 5 focused on skills development, where the purpose was to promote and monitor the national skills development strategy and to develop a skills development policy and regulatory framework for an effective skills development system. For the quarter under review, Programme 5 had had three delivery targets. Only one target had been achieved as planned, namely an approved Sector Education and Training Authority (SETA) monitoring report on skills developed. The DHET had also been monitoring the performance of the system in terms of the sub-outcomes of Outcome 5: A skilled and capable workforce to support an inclusive growth path. The correction of data processing errors had been prioritised, and challenges with the capacity of the State Information Technology Agency (SITA) were repeatedly being escalated within SITA.

Mr Theuns Tredoux, Chief Financial Officer (CFO): DHET, presented on the financial performance of the Department. He said that the overall spending rate for the second quarter had been 39.1%, including direct charges. The high spending trend was mainly due to transfers made to universities and TVET colleges. The average spending for normal operational activities, including compensation of employees, had been 47.5%. The spending rate on compensation of employees had been 47%. The Department was monitoring expenditure trends to prevent over-spending. No fruitless or wasteful expenditure had been reported.

The total original allocation for the DHET in the 2016/17 adjusted estimates amounted to R66.828 billion. This allocation included a direct charge of R17.640 billion against the National Revenue, which was comprised of the National Skills Levy payable to the Sector Education and Training Authorities (SETAs) and the National Skills Fund (NSF). The total allocation for 2016/17 had been decreased to R64.650 billion in the adjusted estimates. This revised allocation would be reflected during the third quarter report. The total decline had been R2.177 billion, which was due to the annual review by National Treasury on the collection of the Skills Levy during the financial year. For this year, the collection had been adjusted downwards, based on current collection data. Funds had been shifted internally between programmes to address specific operational needs and to provide for shortfalls in the cost of living adjustments. Additionally, there had been a shifting of funds for the TVET colleges. An amount of R260 million had been shifted from compensation of employees to TVET college subsidies.

Mr Tredoux then discussed the actions taken to address the 2015/16 audit outcomes. The action plans had been developed by all branches. The Auditor General (AG) had held workshops with each individual branch during 15 and 16 November 2016 to discuss a debrief of the 2015/16 audit, the audit methodology project for 2016/17, audit focus areas and timelines, as well as the action plans for each branch to be considered for incorporation. As from 14 November 2016, branches were required to provide weekly reports on action plans so that they could be carefully monitored. Progress reports would also be a standing item on the agenda for senior management.

Discussion

Dr B Bozzoli (DA) said that several reports had been put on the Treasury website. These reports dealt with the general costs of higher education, and included interesting audit findings which were more detailed than the findings that the Committee normally got. Would the DHET be considering these reports, and if so, when would it report its findings to the Committee? Why did the TVET audit outcomes look really bad? The reduction of R2.177 billion in the Skills Levy had been huge -- what was the effect on the SETAs and other areas that were being funded by the levy? Lastly, she asked what a household budget was. 

Ms M Nkadimeng (ANC) asked what mechanisms had been put in place by the Department in order to ensure that vacancies were filled within the set time frame. During the oversight visit at Indlela, it had been reported that there was a high vacancy rate of trade test assessors, and few workshops for high demand trades. She said that this led to a longer average lead time for trade test applications received, so she wanted to know the progress in terms of filling those vacancies for assessors and what plans were in place to develop a new generation of artisans, trainers and assessors. The trade test pass rate had been 2% lower than the planned target, so what mechanisms had been put in place to ensure that the target was met in the subsequent quarters? Lastly, she wanted to know why the Department had appointed service providers, such as charted accountants, in order to manage the funding on behalf of the entity, as opposed to capacitating internally in order to save the funds.

Mr C Kekana (ANC) said that as soon as TVET colleges operated well, this could reduce the pressure that was being experienced at universities.

Miss J Kilian (ANC) commended the DHET for monitoring its expenditure very closely, but commented that the percentage that was being spent on examiners and moderators was too high, and she wanted to alert the Department about this. She asked whether the Department had the right skills, and whether the skills level was causing constraints in the DHET. Did Indlela have the right managerial and professional capacity, and was it possible to improve the institution? Was there sufficient funding to ensure the plans outlined for TVET colleges were implemented?

Mr M Mbatha (EFF) wanted to check what mechanisms had been put in place to ensure that Umalusi completed the review of the ational admission and promotion guidelines for the NC (V) policy, and what impact this review would have on the movement of the NC (V) graduates to higher education institutions. Lastly, he said that more work needed to be done at Indlela.

Ms S Mchunu (ANC) commended the Department for not incurring any irregular expenditure during the quarter. She admired the progress that had been made in terms of developing CETs, and said that there should be one model of a CET which could be a reference for what all the CETs should look like and operate. She wanted to know what mitigation strategies were in place to ensure that Umalusi delivered on the target. She highlighted that the issue of the curriculum review was critical. Lastly, she also shared  her concern about Indlela, and asked what could be done to make it a place of excellence.

The Chairperson said she wanted the Department to provide progress reports of what was being done at Indlela. There were number of things that were not in place there, such as outdated equipment and so forth. A proactive process needed to be undertaken at the institution. There was a problem with the Skills Levy, and the uncertainty with the legislation must be fixed.

DHET’s response

Mr Qonde said that there had been improvement in TVET colleges, although sometimes this was not adequately reflected through the different studies. He highlighted that the Department was too under-funded and under-staffed to significantly revitalise a historically neglected system. In respect of the review of the NC (V), the DHET engaged with Umalusi regularly. The engagements and providing a support system to Umalusi were the measures in place to mitigate delays.

There were some operations at Indlela that were not funded at all. However, the Department was taking the instruction of providing progress reports of Indlela very seriously. The issue of building capacity within the Department required funding, which was not sufficient at the moment. In some areas, the Department had to make use of service providers to address certain blockages.

Dr Bheki Mahlobo, Acting DDG: DHET, responding to the question regarding CET centres, welcomed the idea of having at least one centre where a community college was conceptualised, and people could be referred to that model.

Mr Tredoux commented on the reduction of the Skills Levy, and noted that Treasury and the South African Revenue Service (SARS) had control over the allocation, and that the Department had no control over it. However, the National Skills Fund had helped the Department with some of the shortfalls.

Prof D van der Nest, Chairperson of the Audit Committee, said that it had taken a lot of effort to achieve an unqualified audit report. TVET colleges were still a problem in terms of enrolment and other issues. He said that they would monitor the TVET colleges. Capacity constraints had resulted in the repeat findings.

Mr Zukile Mvalo, DDG: Skills Development, said there were measures that the Department would put in place with regards to skills development at Indlela. There were programmes on welding that would be introduced. The Department would continue to assist other colleges with accreditation. The DHET would be focussing on developing artisans.

Dr Bozoli wanted to know to what extent the Department was under-funded.

Mr Qonde said this was not an easy question to answer. He did not have the exact figures with him at the moment, but they had been mentioned in the National Assembly during the ‘Fees Must Fall’ protests.

The meeting was adjourned.

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