2019/20 Audit outcomes of DHET: AGSA briefing; DHET Annual Report; ; with Deputy Minister

Meeting report

Briefing by AGSA on the 2019/20 audit outcomes of the higher education and training portfolio

Ms Kgabo Komape, Business Executive, Auditor-General of South Africa, said that the Department of Higher Education and Training (DHET) comprises 21 Sector Education and Training Authorities (SETAs), 50 Technical and Vocational Education and Training (TVET) colleges, six entities and 26 universities. The presentation begins with the audit outcomes of DHET and the SETAs. There are outstanding audits from the National Skills Fund (NSF), National Student Financial Aid Scheme (NSFAS) and Safety and Security SETA. Financial statement preparation remains a concern because material adjustments are effected to the annual financial statements (AFS) submitted for audit. Construction Education and Training Authority (CETA) and Services SETA received qualified audit opinions. These entities failed to have adequate processes to enable accurate financial reporting.

The 2019/20 outcomes were:

-Unqualified with no findings: FPM Seta, PSETA, SAQA, QCTO, NIHSS, CHE, TETA

-Unqualified with findings: W&R Seta, Agri Seta, Bank Seta, CATHSSETA, DHET, EW Seta, ETDPSET, FASSET, H&W Seta, LGSETA, MERSETA, MICTSETA, MQA, FoodBev SETA, INSETA

-Qualified with findings: Services SETA, CETA,

-Outstanding Audit: NSF, NSFAS, SASSETA

The AGSA was encouraged by auditees that obtained unqualified audit opinions with no findings. Financial statement preparation remains a concern as material adjustments are effected to the AFS submitted for audit.  CETA and SSETA received qualified audit opinions on payables, revenue, expenditure and commitments. The entities did not have adequate processes to enable accurate financial reporting, and in some instances could not provide information to support the financial information reported.

Fruitless and wasteful expenditure decreased significantly from the previous financial year from R25.4m in 2018/19 to R8.9m in 2019/20. The majority of the disclosed fruitless and wasteful expenditure for the current year was caused by intangible assets written off that were procured but not used (CATHSSETA) and unutilised office space (W&R SETA).

Irregular expenditure also decreased from R1216m in 2018/20 to R1115m in 2019/20 - The majority was caused by expenditure not in line with approved budget, deviations approved without justifiable reasons and the award of a bid not in accordance with regulations

On the status of internal control, the main concern remains around the inadequate daily, monthly monitoring of controls. Reconciliations and schedules that support financial and performance reporting are not maintained and reviewed, the majority of the material adjustments were because of errors identified in these schedules, which do not support the financial statements. Record keeping processes need to be improved; some of the entities do not have a proper record management system that will ensure the complete and accurate collection, collation, verification of performance information that will enable reliable reporting. The SETAs do not always ensure that the requirements of the SDA are adhered when conducting their daily functions. Compliance requirements where the executive authority approvals are required is not always adhered to and in some instances, these approvals are requested after the expenditure is incurred. The budgeting process of the SETAs should be robust enough to ensure that all anticipated expenditure is included in the request for the next year’s budget to avoid the over expenditure. Some of the appointments were not in line with the requirements of the Public Service Act, and others not in line with the requirements of the Skills Development Act.

Ms Komape said that on the audit outcomes for TVETs, here has been an overall improvement but there is still reliance of auditors to identify errors in financial statements. Covid-19 also impacted on the preparation of the financial statements and the availability of information during the audit process. There are outstanding audits from the Orbit, Taletso, Tshwane South and Northern Cape Urban colleges. On credible financial reporting, the submission of financial statements without errors and the quality of financial submission after audit both decreased in this financial year. On non-compliance with legislation, the areas of concern include material misstatement in submitted AFS, consequence management, procurement management and strategic planning management. There is a lack of discipline on how to execute internal control activities and the risk functions don’t identity the risks to ensure they are mitigated against. On financial health, there is material uncertainty as to whether the Motheo and Northern Cape Rural colleges can continue to operate in the future.

Ms Komape said that on the audit outcomes of public universities, there are outstanding audits from the Durban University of Technology and Vaal University of Technology. Fort Hare University has been qualified for the current year due to its inability to support the reported tuition and registration fees with credible evidence. On non-compliance with legislation, the areas of concern include quality of financial statements, management of procurement and strategic planning. The Public Audit Act (PAA) Amendment expands the AG's mandate in the following ways: it may refer material irregularities to public bodies for further investigations, take binding remedial action for failure to implement recommendations and issue a certificate of debt for failure to implement the remedial action. Preventative controls remain the ultimate deterrent. The root causes are slow or no response to improving key controls and lack of accountability. Management fails to respond with the required urgency to address risks, improve internal controls and ensure there is a sustainable control environment in place so that all players take accountability for their roles. It's recommended that the Department and its entities focus on monitoring a control environment and demonstrating a positive attitude towards accountability through credible performance reporting.

Ms Komape replied that the AG wants the control environment to be strengthened because these institutions benefit the spaces that surround them. The delays in receiving the audit from NSFAS are because of the information flow to auditors. The information was not at the right level and the turnaround time was too delayed. This made it impossible for the audit team to perform the most basic procedures to allow the AG to reach some kind of a meaningful conclusion. The AG opted to extend NSFAS's audit period so that it can probe into the procedures with sufficient detail. Under the PAA Amendment, it has been hard getting a response from the administrator on material irregularities so that there is sufficient response for the AG to close the audit. The AG is reflecting on how best to close it in the future so that a similar problem does not arise again. The audits will be finished on 30 November 2020. The AG will come back to the Committee to present the NSFAS and NSF audits. On repeat offenders, there will be an effort to make sure that management is quicker in ensuring information is received timeously for a proper audit. The law allows the AG to either audit universities or to choose not to. Universities are audited by private firms that are appointed by themselves. The AG then looks at the independent audits to see if they concur with the findings or not.

Ms Michelle Magerman, Senior Manager, Auditor-General South Africa, replied that a conflict of interest was identified where a branch manager owned a company that was awarded a contract. There's an ongoing investigation by CETA on this matter. The branch manager is not an employee of CETA anymore. On the Services SETA qualification, the reason is because there was not enough information on its financial statements provided to the AG to have a clear picture. There was also a qualification on irregular expenditure where the AG disagreed with the entity. The 7.5% on project administration fees should be noted as an irregular expenditure but the entity did not close this. On CETA, there was no supporting evidence on the commitments, payable balances and provision disclosed in the financial statements. It was issue where there wasn’t enough evidence to corroborate what was disclosed in the actual expenditure of the entity.  

The Chairperson thanked the AGSA for its work. The Committee wants to consider the audited financial statements of NSFAS before the House rises for this term which will be the first week of December. The Committee is worried that the institutions under administration perform worse than when they aren’t under administration. This is something that needs to be addressed.

Briefing by DHET on its 2019/20 Annual Report

Mr Gwebinkundla Qonde, Director-General, DHET, said that in total there were 69 targets in the 2019/20 financial year and 48 of them were achieved (70%). On programme three, University Education, nine out of ten planned outputs were achieved. Some of the achievements include the following: guidelines on international scholarships offered by government were approved by the Minister, 100 New Generation of Academics Programme posts were allocated to universities and a plan for piloting the Central Application System for universities was approved by the Director-General (DG). The draft regulatory framework for university fees was not finalised and may be delayed due to Covid-19. The following targets were not achieved: number of graduates in Human Health and Animal Health from universities, number of students in foundation programmes, number of universities offering accredited TVET college qualifications and percentage of success rates at universities. On programme four, TVET, two out of seven targets were achieved. The infrastructure spending was not achieved and this was due to the requirement of formal tender processes that take three to four months to conclude.

Mr Qonde said that it took more than three months to issue certificates to qualifying candidates and this was due to Covid-19. The development of revised funding norms was also not achieved and this is due to the fact that National Treasury (NT) only submitted formal input on 20 March 2020. The Continuing Education and Training Act regulations couldn’t be finalised for approval by the Minister and only four out of six oversight monitoring reports were produced. The following targets weren’t met: the number of TVET students enrolled in foundation programmes, percentage of TVET lecturers undergoing specified hours of work in their industry for specified periods and the number of headcount enrolments in TVET colleges either funded by the state, the college itself or from other sources. On programme five, Skills Development, four out of five targets were achieved. A total of 16 692 artisan learners were registered against the target of 30 000 and this was due to the unavailability of workplaces for 2019/20, change of the reporting format and Covid-19. The target for the number of work based learning opportunities was also not achieved.

Mr Qonde said that on programme six, Community Education and Training (CET), both of the two targets were achieved. The target for the number of headcount enrolment in CET colleges and the percentage of certification rate in formal CET qualifications were not met. On programme two, Planning, Policy and Strategy, eight out of nine planned outputs were achieved. The policy framework on gender-based violence in Post School Education and Training was not gazetted as planned because the meeting with Cabinet was cancelled due to the lockdown. On programme one, Administration, six out of seven planned outputs were achieved. 99.6% of invoices received from creditors paid within 30 days was not achieved due to miscommunication on processing of transactions and authorisation due to large volumes of work. Some of the achievements include the following: the Department was able to fill 92.98% of funded vacancies, it received an unqualified audit opinion from the AG and all disciplinary cases were resolved within 90 days. He then handed over to the Acting Chief Financial Officer (CFO) to present on the Department's financial information.

The Chairperson asked for clarity on who the Department's CFO is. The person referred to by the DG is not who Members expected to be the CFO. Members understand that Mr Theuns Tredoux is the CFO.

Mr Qonde replied that Mr Tredoux, the former CFO, applied for retirement on 31 October 2020. There was a subsequent disciplinary hearing that recommended a sanction of dismissal. The Department's current CFO is Ms Pretty Makukule who will take Members through the presentation.

The Chairperson asked if Ms Makukule is concurrently the CFO of the Department and the Department of Science and Innovation (DSI). When did this occur? Ms Makukule was before the Committee in a previous meeting presenting for DSI. The Committee understood that Mr Tredoux was still the CFO and the Acting CFO position is news to Members. Can clarity be provided on this?

Mr Qonde replied that Ms Makukule is assisting the Department for the time being as the Acting CFO until the vacancy is filled. She has assumed this role from around 24 August 2020.

Mr W Letsie (ANC) asked for clarity on the nature of Mr Tredoux's removal. Was he put through a disciplinary hearing, found guilty and then dismissed? Did he file for retirement before he was dismissed? What exactly happened here? This is important because it seems like a similar situation to that of the former Vice Chancellor of the Tshwane University of Technology.

Mr Qonde replied that it happened simultaneously. He was found guilty and dismissed on 26 October 2020. He then subsequently applied for retirement on 31 October 2020. As it stands, his status in the Department is that he was dismissed.

Ms Lulama Mbobo, Deputy Director-General: Corporate Services, DHET, replied that when the former CFO was put on leave, the Department was at the height of its audit. It was seen as necessary to acquire additional support in the form of an Acting CFO and so Ms Makukule was appointed by the Minister. She could not be fully seconded or permanently appointed into the role because the post wasn’t vacant yet. The Minister is now in the process of fully seconding her into the position because of the need for her role within the Department. That process is about to be completed.

The Chairperson asked if its allowed for a single person to be a CFO concurrently for two government departments.

Ms Mbobo replied that the law does not disallow it. Considering the position that the Department would have been in had it not been for the Acting CFO, it was a necessity because it does not have a Chief Director responsible for Finance. There is only a Chief Director for Supply Chain and Management. The next level is a Director reporting to the CFO.

The Chairperson said that the clarification makes sense but why was someone else not appointed for DSI when she was appointed in this Department? He did think its allowed for one to have two positions in the public service. The Committee might need advice on whether this arrangement is allowed because it is very unusual.

Ms Pretty Makukule, Acting Chief Financial Officer, DHET, said that the report of the Audit Committee expresses satisfaction with the AG's unqualified audit opinion. It also expresses some concerns around non-compliance of internal controls and reporting of performance information. The report of the AG identified the following material findings: the usefulness and reliability of performance information and the reporting framework for programme four. The Department underspent the most in programme four and six. On goods and services, it spent the biggest amount on travel and subsistence. The reason for the material variance is due to savings on provision for examination services and projected travel and subsistence claims for February/March 2020 examinations not received as projected. On transfer and subsidies, universities received the biggest amount while the HEAIDS Project received the lowest. The closing balance for irregular expenditure amounts to R138 239 million with the biggest amount relating to the appointment of a service provider not scoring the highest point during evaluation. The investigations have been concluded and the matters were handed over to Labour Relations who are currently dealing with it. On the incorrect procurement procedures being followed, the matter was investigated and disciplinary processes have been completed. Fruitless and wasteful expenditure amounts to R9 593 million and it relates to fraudulent salary overpayments to CET college employees that are under investigation. On the impact of the financial statements, the level of spending didn’t have a negative impact on the Department's operations and measures were put in place to prevent overspending.

Discussion

The Chairperson noted the issue of funding for universities. There is a study that was conducted and released on 28 October 2020. According to the study, on average 48% of funds for universities come from government grants. The biggest number being Mpumalanga University with 87% of its funding coming from government and only 9% coming from tuition. Sol Plaatje University receives 86% of its funding from the government and only 12% comes from tuition. Tshwane University of Technology receives 62% of its funding from government grants, the University of the Western Cape receives 60% of its funding through government and the Central University of Technology receives 49%. The University of Cape Town, Wits University, Stellenbosch and Nelson Mandela University receive around 30% of their funding from government. University of Pretoria, Walter Sisulu University and Rhodes University receive around 40% of their funding from the government. The Committee must receive an explanation from the Department of Public Services and Administration (DPSA) on whether the arrangement of the Acting CFO is legal, whether permission was given and if there was a need to do so.

Mr S Ngcobo (IFP) agreed with the Chairperson that it is unusual for a CFO to be positioned in two departments. The Committee needs clarity on this. In the Department, there is a vacancy for a CFO. The Acting CFO is rendering a service for the Department which means that she is receiving compensation for that service. It’s a big problem if she is also receiving remuneration from DSI. What is the status of the former CFO? Was he dismissed or did he retire? Quite often when administrators take over entities, they become worse. This is the case in municipalities where a person will be fired as a Municipal Manager (MM), be fired again in another municipality and become blacklisted only to be hired as a MM again in another municipality. There is something wrong with that. There seems to be a similar trend happening within the higher education sector where administrators come in and make the situation worse than it was before. Is there a way for the Committee to get closer to this problem? Is there any kind of remedy the Committee has at its disposal to allow it to deal with this matter?

Mr Letsie said that the presentation looks bleak. He agreed with the Chairperson that the Committee must approach DPSA to determine the legality of the arrangement of the Acting CFO. If it is not legal, what will the implications be of the decisions taken by Ms Makukule? It is hoped that due diligence was followed. On the adjusted budget, R1183 billion was taken away by the Minister of Finance and given to the Department of Public Enterprises to rescue the South African Airways (SAA). What are the implications of this on the Department? There was an investigation that sought to clear mismanaged monies in 2016. When was that investigation concluded and handed over to Labour Relations? Why did it take this long to finalise the matter of irregular expenditure? He noted the shortage of manpower that led to an inability to deal with labour matters within the prescribed 30-day period. What mitigating strategies have been put in place to counter this issue? The supply chain policy transgression that was reported by AGSA where there was an irregular expenditure of R58 million in 2016 and R48 million in 2017 is a serious matter. It occurred as a result of a service provider not scoring the highest points during an evaluation. The leadership of the Department have not taken any steps to prevent this from happening. The people responsible in 2016 are the same people responsible for hiring those who caused the irregular expenditure in 2017. The Department has referred these cases to labour relations but when were they presented to legal services? 

Mr Letsie asked for more information on repeat offenders such as NSFAS and some TVET colleges. The under spending in TVET colleges is an issue because it is an area that needs the most infrastructure. Almost two thirds of the money allocated was not spent by the Department. It is not clear where this underspending is. The R74 million that was spent might be because the Department has been slow in filling the vacancies of senior management. Some of it might be because of poor implementation of infrastructure development. It has always been said that the leadership responsible for TVET colleges does not take the grant seriously. There is an underspending even though there is a shortage of staff. This is why NT took money away from the Department to rescue SAA because the money is not being utilised well. R42 billion of public funds go to universities and this is not good. When Members ask about this they are told it is because of institutional autonomy and people not wanting to be held accountable. This creates space for people in universities to be corrupt. The Committee should look closely into this issue of institutional autonomy. It cannot be that more than 50% of money is transferred to universities and then when asked about that money, Members are told they are overreaching. The Committee should consult with Legalese on this matter especially on procurement procedures of universities and their audits.

Mr Letsie said that section 5A of PAA relates to the remedial actions of the AG. What has been done with this section? The former Vice Chancellor of the Cape Peninsula University of Technology was found guilty of misconduct and dismissed. Before the dismissal could be communicated to him, he resigned and nothing happened to him after committing serious misconduct. This same person is now being paid as an advisor to the administrator. The same applies to the former principal of Westcol college. He was charged, applied for early retirement and was granted it with nothing happening to him. The same thing is happening with the former CFO who, according to the AG's report, applied for retirement right after his dismissal. How does one apply for retirement if they have already been dismissed? If there are financial implications resulting from the actions of these people then action must be taken against them. If need be, cases must be taken against these people individually. The Asset Forfeiture Unit must freeze the retirement funds of these people until they pay back the money.

The Chairperson said that the Committee must identify the individuals it seeks to make cases against and recommend appropriate actions.

Ms J Mananiso (ANC) said that the AG’s report is alarming because there is a lot of corruption in the SETAs and CETs. This is an important issue and it is going to be a problem because Members have committed themselves to skills revolution. On non-compliance, if there is a lack of capacity in these areas it must be said so that the right people can be appointed. Everybody is having issues for failing to follow supply chain management processes. Regulations were put in place to make sure that issues like this do not arise yet it continues to this day. On fraud prevention, what is the desired function to make sure that the unit operates optimally? On vacancies in senior management, when will these posts be filled? The issue of underspending might be because the officials who are supposed to be doing these jobs have not been hired to execute them. The Department presented in its Annual Report that in an area of national examinations and assessments there is still staff shortages. This relates to Information and Communications Technology (ICT) programmes as well certificate backlogs. What are the plans in place to adequately deal with this matter? The issue of backlogs is imperative because people who are supposed to be doing strategic planning are only doing it on paper and not in action. She agreed with Mr Letsie that cases should be opened against individuals who are doing wrong and retiring before facing the consequences. It cannot be that the Committee has to ask the same questions over and over again from people who are supposed to be giving clarity and direct answers to Members. It is unfortunate that the meeting is not physical so that it can be seen that they are thieves because that is exactly what they are. This is sad. Whenever there are door-to-door visits, ANC Members are said to be stealing.

Ms D Sibiya (ANC) said that the state of the Department is bad. The AG is complaining about bad leadership in universities, lack of accountability, lack of monitoring, lack of discipline and appointed officials not meeting the requirements. Does the Department and TVET colleges have the capability to deliver infrastructure projects? What strategies have you developed to improve the delivery of infrastructure projects? What measures will you put in place to ensure a more experiential environment through learning measures? How many cases are still under investigation and have not been resolved? The AG reported that there was R1158 million in irregular expenditure that was approved as a deviation without justification. Why is this being done? The majority of this was because of spending that was not in line with the budget. Why?

Mr B Nodada (DA) said that the AG is depicting a very grim picture of what is happening in the Department. This becomes even scarier when the Deputy Minister is before the Committee and paints a very rosy picture when the Department is clearly not doing well. The SETAs are clearly a mess and there was no information provided by the Deputy Minister on this. The worst part about the Department's report is that it has only met 29% of its targets. This is appalling. A day before, one would not say anything bad about the Department because it is probably the best run department in this administration. Today Members have listened to a very poor run Department even in the most basic of things like how it handled the CFO matter. He agreed with Mr Letsie that the Committee has to take extra measures to strengthen its oversight abilities. On programme four, the Department only achieved two out of seven targets that it had set for itself. This directly contributes to the 29% progress rate. He noted the poor governance in TVET colleges. Has there been any implementation of consequence management to remedy what is happening? It was reported that these colleges are struggling to get industry to lecturer placement. What is being done to make sure that lecturers are in the industry? If you are a lecturer you are supposed to be in the industry so that you can see the trends and make adjustments so that the curriculum is updated. Why has there been an issue with filling vacancies? On irregular expenditure, it is implied that there is supply chain and management issues generally. Why is this so? What consequence management has been put in place to make sure that this does not occur again?

The Chairperson said that the Department's budget was adjusted and R2.6 billion was taken away. It's known that R1.1 billion is going towards rescuing SAA. The rest constitutes budget cuts everywhere else. The biggest of these cuts are in compensation of employees across the board and funding of universities. This is very worrying. It is not part of the Annual Report. What are the Department's plans on this? The CFO issue needs to be addressed because it is quite strange. The Committee is not taking an issue with Ms Makukule personally because she is very good at her job and has received clean audits. The appropriate thing to have done was to put her on leave so that she can be seconded. In that way, someone else could be hired as CFO for DSI. Now she is being pulled into an arrangement that is improper even though she's been doing a good job at DSI. The Committee is not happy about the outstanding report from NSFAS. This is happening for the second time and the reason for it is even more concerning. The AG noted that the turnaround time is unacceptable. Things are getting worse despite how the Department is painting a different picture.

The Chairperson said that the reliability of the performance information is worrying. The AG indicated that it cannot rely on the information provided to it by the Department. This nullifies everything that the Department reported. It is hard to know if there is no misinformation at all. The AG also flagged the information reported on programme four as not being reliable. TVETs are a big concern that requires serious work. The fact that the information reported on them is deemed unreliable on top of the fact that they are already performing badly is really concerning. The SETAs must come and present their performance reports to the Committee. In a different meeting, it was shown that senior managers in these entities are not qualified for the positions they occupy. The Committee was also lied to about the implementation of capital projects where the amounts authorised exceeded by 20%. There might be a need for the AG to confirm this but what is known is that Services SETA has been seriously underperforming. It is one of the entities that need to be called by the Committee.

The Chairperson said that the AG indicated that SETAs spend way above what has been allocated to them. The Department is supposed to monitor this. It is visible that there is a lack of monitoring by the Department where SETAs are concerned. It is a big issue when individuals evade liability by deciding to retire before they can be dismissed. On universities, the Public Finance Management Act (PFMA) empowers the Minister to make regulations. Why are there no regulations after so many years since the Act came into force? Universities are not accounting to the standards of the Act. Why is the Department so comfortable about this? Why is nothing being done to remedy this? There should be sufficient detail provided to members on consequence management. It cannot just be a matter of members being told that there is an ongoing investigation. There should be details on where particular cases are at the moment. Have there been any suspensions?

Responses

Mr Buti Manamela, Deputy Minister of Higher Education, Science and Technology, replied that he takes the issues raised by Members very seriously. The Department will respond to the questions raised.

Mr Qonde replied that the autonomy of universities needs to be discussed and reviewed. These institutions are held accountable by the government. Where there has been a misuse of funds, there has been an intervention. The autonomy of these institutions is a contentious issue and the Constitution is not clear on the matter. It is a matter that will be engaged with extensively by legal minds going forward. On underspending, the question is whether it is a normal and acceptable figure. The Department has received an unqualified audit opinion with no material findings. On financial management and administration, it has received a clean audit. The reliability of performance information bans it from not obtaining a clean audit with respect to TVET students that are funded by NSFAS. This is information that couldn’t be supplied by NSFAS and the Department is working on this to fix it with the AG.

An official replied that there are reporting requirements that have been gazetted by the Minister that universities have to follow. These requirements were drafted in conjunction with the AG. Although universities are not expected to comply fully with the PFMA, they are required to comply fully with accounting standards. Each university has its own policy on supply chain management. The Department has worked with universities to find out which policies work best. It has an infrastructure development framework where institutions have to report monthly on the progress they have made. There is also a support programme, that focuses on procurement policies, to push institutions to ensure a better delivery of infrastructure development management. The procurement policies developed in the University of Mpumalanga and Sol Plaatje University were used as a blue print for the NT. This is part of the PFMA and can be reported on in terms of the requirements, oversight, monitoring of the system and how universities are kept accountable in terms of the public funds they receive. Annual Reports were due at the end of September. The analysis of university spending, which includes the exact percentages on financial health, will be available in March at the end of this financial year.

An official replied that underspending is circumscribed for the compensation of employees but it is specifically for the compensation of regional officers. Regional officers have vacant posts. This is a huge undertaking and is gradual. There were recently appointments of regional managers so major gaps are being filled. On the performance of colleges, the AG indicated that there has been improvement. They have been issued with 29 policies that meet the minimum requirements of PFMA. What the colleges need to do is to develop institutional policies but they have to meet the minimum requirements. The Department conducts oversight through the Council and visits colleges around the country. For all the gaps that were identified, letters were sent to find out the details. In cases of irregular expenditure, warning letters were sent. About three years ago, there were a number of principals that were suspended and on almost all occasions they were released a year or two after their offence. On the issue of the principal that was recently suspended, there should be an outcome on that shortly. On the misinformation of programme four, it is the manner in which information is expected to be reported. The AGSA has been engaged on this in order to resolve it.

Ms Mbobo replied that the matter was finalised before the former CFO retired. His exit was handled as a dismissal and not as an early retirement.

The Chairperson asked what actually happened that led to his dismissal.

Ms Mbobo replied that it relates to the irregular expenditure on the appointment of a service provider that did not get a high score. This dates back to 2015. There was a forensic investigation conducted by the Accounting Officer and the report on that investigation was handed over to Labour Relations. During this process, he retired. Even though he handed in retirement, the disciplinary processes continued. On the Acting CFO being seconded by the Minister, there are processes already underway on this.

The Chairperson said that the Committee wants to know whether the arrangement the Department has with the Acting CFO is legal. This is a matter that will be dealt with differently at a later stage.

Ms Mbobo replied that on the question of cases being opened against individuals, some of them are already in court being prosecuted. The Department has also advised Council to lay criminal charges for cases where they see misconduct. On vacancies and lack of capacity within the Department, the organisational structure was approved around April last year. The Department is in the process of creating an e-recruitment system. There was a problem with the recruitment system because there was a moratorium put in place by NT to wait for an integrated financial management system. On the decentralisation of colleges, 41 colleges were ready to be decentralised but this could not proceed because of the lockdown. The Department is now on course to implement decentralisation.

The Chairperson said that the recruitment issue must be in the next report presented to the Committee.

Ms Makukule replied that on the impact of the money that was taken away from the Department, it was given two days to find where this money would be taken from. It identified that there was still money that hadn’t been transferred for the infrastructure of TVET colleges. It engaged in conversations with people in those spaces and it was clear that there was going to be delays on some of the infrastructure projects. Some of the delays have been attributed to the pandemic.

Mr Qonde replied that the issues of irregular expenditure that were spoken of are not the result of supply chain management processes not being efficient. It is rather about individuals who go outside the normal processes. This was picked up on during an internal audit on supply chain management processes. Those who were found to be operating outside of those processes were subjected to consequence management. There is nobody who is going to escape government mandated mechanisms.

The Chairperson thanked the Department for its presentation. The Committee is going to call some of the universities that it has issues with to appear in front of Members and be held accountable. It will ask whoever facilitated the audit reports to be present in the meetings as well. Members are not happy about the standard of compliance. From what the AG indicated, it seems like the supply chain management processes fall short of the PFMA standards.

The meeting was adjourned