18. REPORT OF THE PORTFOLIO COMMITTEE ON HIGHER EDUCATION AND TRAINING ON BUDGET VOTE 17 AND 2014/15 ANNUAL PERFORMANCE PLAN OF THE DEPARTMENT OF HIGHER EDUCATION AND TRAINING, NATIONAL STUDENT FINANCIAL AID SCHEME (NSFAS) AND COUNCIL ON HIGHER EDUCATION (CHE), DATED 09 JULY 2014

The Portfolio Committee on Higher Education and Training, having considered the Budgets and Annual Performance Plans of 2014/15 of the Department of Higher Education and Training, National Student Financial Aid Scheme and Council on Higher Education reports as follows:

1. Introduction

1.1 The Constitution of the Republic of South Africa, Act 108 of 1996 Section 55(2) stipulates that the National Assembly must provide for mechanisms (a) to ensure that all executive organs of state in the national sphere of government are accountable to it; and (b) to maintain oversight of (i) the exercise of the national executive authority including the implementation of the legislation; and (ii) any organ of state.

1.2 Public Finance Management Act section 27 (1) states that the Minister must table the annual budget for a financial year in the National Assembly before the start of that financial year, it further provides in subsection 27 (4) that when annual budget is introduced in the National Assembly or a provincial legislature, the accounting officer for each department must submit to Parliament or provincial legislature, as may be appropriate, measurable objectives for each main division within the department’s vote.

1.3 In terms of section 10 (c) of the Money Bills Amendment Procedure and Related Matters Act (Act No 9 of 2009), Strategic Plans must be tabled in Parliament after the adoption of the fiscal framework.

1.4 The Minister of Higher Education and Training tabled the Medium Term Strategic Plans and Annual Performance Plans of the department and its entities on 13 March 2014 in accordance with the above legislative requirement.

1.5 On the same day, the Speaker of the National Assembly referred these papers to the Committee for consideration and report.

1.6 In executing its oversight mandate, the Committee scheduled extended briefing sessions with the department, NSFAS and CHE so as to present their plans and budgets for the Medium Term Expenditure Framework Period (MTEF) on 02 and 03 July 2014.

1.7 The budget briefings served to acquaint the Committee with the mandates and programmes of each business unit in the department and its entities.

1.8 This report gives a brief summary of the presentations made to the Committee, focusing mainly on 2014/15 Annual Performance Plans and Budget, 2014 MTEF allocations and an overview of allocations per programmes. The report also provides the Committee’s recommendations relating to the vote.

2. Method

In engaging with the above mentioned organs of state the Committee consulted the following documents:

  • 2014/15 Estimates of National Expenditure (ENE);
  • 2014 State of the Nation Address (SONA) pertaining to the sector priorities;
  • Strategic Plans of the department and its entities;
  • 2014/15 Annual Performance Plans;
  • 2013/14 Budgetary Review and Recommendations Report (BRRR) of the Committee;
  • Reference was also made to 2013/14 strategic objectives to check if the department has kept its promises of the previous financial year; and
  • The National Development Plan (NDP) on the recommendations for the post-school education and training sector.
  • In addition to the above documents, the Committee held a meeting on 02 July 2014 with the Auditor-General of South Africa (AGSA) regarding the audit outcomes of the 2013/14 financial year of the department and its entities.

3. Terms of Reference

The Committee’s terms of reference in so far as the process was concerned were to:

  • Scrutinise the budgets and annual performance plans of the departments and its entities;
  • Ensure that policies announced by the government and authorised by Parliament will be delivered with the allocated resources, this further needs continuous monitoring through various ways of oversights;
  • Assist the department and its entities with cost containment measures in terms of the National Treasury Instructions 01 of 2013/14;
  • Recommend shifts within programmes and sub-programmes where possible to mitigate the shortfall in certain line items, and
  • Report the conclusions and recommendations of the Committee to the National Assembly.

4. Summary of presentations

4.1 Department of Higher Education and Training

a) Overview by the Minister

Dr B Nzimande, MP: Minister made the following remarks:

  • The passing of the late Prof R Botman: Vice Chancellor of University of Stellenbosch and Prof F de Villiers: Dean Faculty of Law university of Zululand were a great loss to the higher education sector.
  • The post school education and training sector was the core-mandate of the department. The key challenge of the department was to cater for the needs of the 3.2 million young people between the age of 15-24 who were neither in education, employment nor training and those who still want to go back to school. This group of young people are a key focus of the department to assist them in breaking the challenge of high unemployment and poverty rate.
  • The Annual Performance Plan 2014/15 targets of the department were consistent with the White Paper on Post School Education and Training and government priorities.
  • The scope of the higher education sector comprises of 25 public universities with 11 general universities, six Universities of Technology (UoTs), six comprehensive universities including the two new universities established last year namely University of Mpumalanga and SolPlaatjieUniversity.
  • The Technical and Vocational Education and Training (TVET) college sector was steadily increasing with an enrolment target of 800 000 students for the current financial year and a target to reach 1 million students by 2016. The target of the department was to have four TVET college students per one university student as this was the norm in developed economies.
  • Community Education and Training Colleges (CETC) would be merged with Adult Education and Training (AET) centres to broaden their mandate and focus specifically in offering qualifications to people with trades experience or prior learning but no formal qualification.
  • 2013 wasdeclared ayear of artisans and the target to enrol 26000 artisan trainees per annum was reached while 2014-2024 is declared as a decade of artisans.
  • Absorption of TVET colleges and UoTs students in industries for work integrated learning to complete their qualification remained a challenge for the department. There was a need for engagement with industries, municipalities and government departments to open up more spaces for training of these students.
  • Articulation of TVET college graduates to higher education remained a challenge for the department as well recognition of credits between institutions of higher learning.
  • The end of June 2014 the department published a policy on distance learning which aims to increase access to higher education since contact universities have limited capacity to enrol all qualifying students.

b) Strategic Overview

Mr G Qonde: Director-General led this part of the presentation and highlighted the following:

  • The department was established in May 2009 and was responsible for all post-school education and training and particularly Outcome 5 of government’s 12 outcomes (A skilled and capable workforce to support an inclusive growth path).
  • The mission of the department was to develop capable, well-educated and skilled citizens that are able to compete in a sustainable, diversified and knowledge intensive international economy, which meets the developmental goals of the country.
  • The department has seven strategic goals which guided its strategic plan.

c) Budget and Expenditure Trends

Mr T Tredoux: Chief Financial Officer led this part of the presentation and highlighted the following:

  • The budget of the department included direct charges which are the Skills Development Levies collected by the South African Revenue Services (SARS). For the 2014 Medium Term Expenditure Framework (MTEF) period, the department’s budget excluding direct charges increased at an annual rate of 6.8 percent from R34.3 billion in 2013/14 to R42 billion in 2016/17.
  • Direct charges increased at annual average rate of 9.5 percent from R12.3 billion in 2013/14 to R16.1 billion in 2016/17.
  • The department’s budget is dominated by Programme 3: University Education, which represents 83 percent of the budget in 2014/15. Normal departmental operational services represent only 1.5 percent of the budget.
  • The department received additional allocations over the MTEF period of R76.3 million, R153 million and R730 million. These additional funds are mainly for improvement of conditions of service for staff in the department and TVET colleges as well as the piloting and roll out of the new student-centred loan administration model at NSFAS.
  • NSFAS remained one of the biggest growth items in the budget in the MTEF period from R6.1 billion in 2014/15 to R6.8 billion in 2016/17.
  • The function shift of TVET colleges from provinces to national would be implemented on 1 April 2015. While the function shift was still in process, the funding of TVET colleges consisted of college subsidies (R3.1 billion in 2014/15) and conditional grant (R2.6 billion in 2014/15).

Table 1: Financial Information

Programme / Adjusted Appropriation
R’000 / Medium-Term Expenditure Estimate
R’000
2013/14 / 2014/15 / 2015/16 / 2016/17
Administration / 189 659 / 217 101 / 225 676 / 238 932
Human Resource Development, Planning and Monitoring Coordination / 47 440 / 48 785 / 51 482 / 54 916
University Education / 28 300 740 / 30 448 037 / 32 854 207 / 34 616 792
Vocational and Continuing Education and Training / 5 691 008 / 6 042 177 / 6 401 915 / 6 748 325
Skills Development / 105 053 / 110 581 / 116 677 / 124 236
Sub-Total / 34 333 900 / 36 866 681 / 39 649 957 / 41 783 201
Direct charge against the National Revenue Fund / 12 300 000 / 13 440 000 / 14 690 000 / 16 140 000
Total / 46 633 900 / 50 306 681 / 54 339 957 / 57 923 201

Source DHET Annual Performance Plan and Budget 2014/15

  • The department acknowledged the current fiscal constraints of government in relation to the budget pressures, capping of compensation of employees, reliance on funding from the NationalSkills Fund (NSF) and donors and pressure in the management of TVET and AET function shifts.
  • The department also reported the under-spending on voted funds in 2013/14 was R1.9 million which was as a result of outstanding payment claims for examiners and moderators
  • The department received unqualified audits to date.

d) Programme 1: Administration

Ms L Mbobo: Deputy Director-General Corporate Services led this part of the presentation and highlighted the following key issues:

  • Priorities for 2014/15 include; the finalisation of the department’s communication strategy, reduction of the vacancy rate on funded posts by 10%, ensuring good governance through implementation of risk management strategies, ensuring adherence to policies and provision of effective and efficient human resource planning and management services.

e) Programme 2: Human Resource Development, Planning and Monitoring Coordination

Mr F Patel: Deputy Director-General HRD Planning and Monitoring Coordination led this part of the presentation which highlighted the following key issues:

  • Priorities for 2014/15 include; management and maintenance of credible planning and budgeting process for the department by developing APP and producing quarterly reports, provision of accurate data on skills supply and demand in the country, maintaining the higher education and training information management system, pursuance of bilateral relations with priority countries, establishment of a well-functioning social inclusion and transformation service within the department and its entities and establishment of a coherent career management and information service by March 2015.
  • Cabinet gave the Minister a responsibility to develop a policy on career development and it would be communicated with stakeholders by 31 March 2015.This programme would assist the Minister with management of the Human Resource Development Council of South Africa (HRDSA) which was chaired by the Deputy President.
  • The function shift of TVET colleges and AET staff from provinces to the department would comprise of additional approximately 38000 staff personnel and the department does not have adequate resources to manage this function shift.

f) Programme 3: University Education

Dr E van Staden: Chief Director University Academic Planning and Management Support led this part of the presentation which highlighted the following key issues:

  • Priorities for 2014/15 include; support to universities in expansion of equitable access and success in higher education which is the key focus of the department, monitoring of all 26 universities annually, support to NSFAS by providing earmarked grants and ensuring effective oversight, enhancement and support to expand university research capacity, expansion of health sciences education by developing a new Health and Allied Sciences University incorporating the MEDUNSA campus of the University of Limpopo and supporting the development of the new medical faculty at the University of Limpopo and expanding the provision of initial teacher education.
  • The department planned to have a central applications system where students would pay a fee of R100 for one application which would assist in gaining access to higher education and training institutions.
  • A comprehensive plan was developed to assist the sector with production of new generation of academics as it is largely dominated by ageing academics.
  • A draft policy on Professional Qualifications for Educators in Community and Adult Education and Training was approved by the Minister and published for public comment.
  • The department would be responsible for the Agricultural colleges which are currently under jurisdiction of provinces. The department established a task team in partnership with Department of Agriculture, Forestry and Fisheries to oversee the transitional arrangements and model transfer of the function shift.
  • The department experienced a growth of 4.7 per cent of Full Time Equivalent (FTE) students per annum and 57 percent of enrolments in higher education were females. The new Health and Allied Sciences University would be opened in 2015.

e) Programme 4: Vocational and Continuing Education and Training

Ms G Magnus: Chief Director Vocational and Continuing Education and Training led this part of the presentation which highlighted the following key issues:

  • Priorities for 2014/15 include; facilitation of collaboration between Higher Education Institutions (HEI’s) and TVET colleges towards delivery of learning programmes at level five and six of the National Qualifications Framework (NQF), registration of new private education institutions, monitoring and supporting AET centres, development of the National Senior Certificates for Adults (NASCA) for implementation in 2016/17, increasing access to programmes leading to intermediate and high level learning, improving the vocational certification rate of TVET college students, improve financial management of TVET colleges through partnership with the South African Institute of Charted Accountants (SAICA) and conclusion of the function shift process of migrating TVET colleges and AET from provincial to national competence.
  • The target for total headcount enrolment in TVET colleges by 31 December 2014 is 800 000 students.
  • The department would require R1 billion for implementation of NASCA by 2016.

f) Programme 5: Skills Development

Mr Z Mvalo: Acting Deputy Director-General Skills Development led this part of the presentation which highlighted the following key issues:

  • The priorities for 2014/15 include; promotion of quality learning at work and for work, alignment of skills development outputs with the needs of the workplace and the broader growth needs of the country’s economy, approving the strategic plans of Sector Education and Training Authorities (SETAs) and ensuring they were in line with the national skills planning priorities.

4.2 National Student Financial Aid Scheme

Mr M Daca: Chief Executive Officer led the presentation which highlighted the following key issues:

  • Since its inception in 1991, NSFAS has disbursed more than R41.5 billion in loans and bursaries to 1.4 million students to date.
  • In 2013, NSFAS disbursed R8.7 billion to 416 000 students at the 23 public universities and 50 TVET colleges throughout the country.
  • NSFAS derives its mandate from the NSFAS Act 56 of 1999.
  • The core mandate of NSFAS is to provide financial aid to eligible students at public TVET colleges and public universities in order to improve access and success in higher education and training in particular for students from poor and working class families.
  • The new student centred model was approved by Parliament in 2012 and this model would assist NSFAS to have a direct relationship with the students unlike in the past where bursary administration was managed by universities or TVET colleges on behalf of NSFAS. Funding would be provided for a qualification, not one year of study at time.
  • NSFAS was concerned that despite the increase in funds for financial aid during the previous Parliament, it could only fund 50 percent of the students eligible for study loans and bursaries.
  • Programme 1 Administration: The total budget for this programme is R102 million and its purpose is to conduct overall management of the entity. NSFAS is fully compliant with relevant legislation and all prioritised policies and procedures were approved. An improved audit outcome was as a result of good governance principle in place. Employee performance management system would be implemented. NSFAS targeted 60 percent of students to migrate to the new centred model and 30 percent of students at migrated institutions applied online in this current financial year.

Programme 2 Student centred-financial aid: The total budget for this programme is R49 million and its purpose is to achieve the vision and mission of the entity by creating a centralised student financial aid system and to provide funding to eligible students whilst maximising recoveries to R467 million and secure two new sources of funding. NSFAS aimed to process 90 percent of claims to be paid within 30 days, reaching out to 36 no-fee schools, to achieve improved student satisfaction.

Mr L Nage: Chief Financial Officer led this part of the presentation which highlighted the following key issues:

  • Budget: The total budget for NSFAS for the 2014/15 financial year is R8.9 billion with administration (R151 million) accounting to just 1 percent of the total budget. The DHET general allocation was R2.9 billion and other funding was sourced from different partnerships.

4.3 Council on Higher Education

Prof T Mosia: Chairperson led the presentation which highlighted the following key issues:

  • In terms of its policy analysis imperative, the CHE provides advice to the Minister of Higher Education and Training on request and proactively.
  • For the current financial year, CHE would advise the Minister on; undergraduate degree / diploma structure, governance challenges, including the role of independent assessors and administrators as intervention mechanisms.
  • The publications planned for 2014/15 financial year included; Vital Stats Public Higher Education 2012 & 2013, Distance Education in the Digital Age, Twenty Year Review of Higher Education and the State of Provision of Social Work.
  • The colloquia and workshops planned for 2014/15 included; the Role of the Higher Education Qualifications Council (HEQF) and Colloquium on Standards and Development.

Prof B Thaver: Council Member led this part of the presentation which highlighted the following key issues: