Division Of Revenue 2008/9: Department of Education Response to FFC Recommendations

JOINT BUDGET & FINANCE SELECT COMMITTEE
22 August 2007
DIVISION OF REVENUE 2008/9: DEPARTMENT OF EDUCATION RESPONSE TO FFC RECOMMENDATIONS

Chairperson: Mr T Ralane (ANC, Free State)

Documents handed out:
Response of the Department of Education to the recommendation of the Financial and Fiscal Commission (FFC) on Division of Revenue for 2008/9

Audio recording of meeting

SUMMARY
The Department of Education presented its response to the recommendations of the Fiscal and Financial Commission (FFC) on the 2008/9 Division of Revenue Bill (DORB). Most of the suggestions made by the Commission were endorsed. These included recommendations that all provincial education departments accept the National School Nutrition Programme, that it be extended to all primary schools and that its implementation be improved. The Department cautioned that these recommendations had serious financial implications. Some of the areas raised by the Commission,  such as procurement,  involved processes outside the Department. At a national level there was improved monitoring and evaluation. The Department was seeking increased funding in the Medium Term Framework for immediate implementation of increased feeding. The Department endorsed the suggestion that there be effective coordination of planning for provincial and municipal infrastructure grants. The Department answered some of the Commission's concerns on what was included in Learner Support Material, and confirmed that budgets did already make distinctions between categories.  It supported the recommendation that Provincial Equitable Share (PES) should reflect the socio-economic profiles of learners, and the need for norms and standards that indicated the level of knowledge and skills that learners were expected to acquire at various ages and stages. It further agreed that there were negative impacts arising from re-demarcation of some provincial boundaries, and suggested that requests for movement of funds should be coordinated through National Treasury. The Commission's comments generally on the desirability of moving to a seven-year planning cycle were also supported. A further sector meeting would take place on 19 September.

Members' questions related to the need to improve administration and flow of information, the problems around maintenance, the setting up of guidelines for transfer of assets, the definition of learner support materials, the balance between financial resources and outcomes of education, and the need to improve delivery of textbooks. Those questions falling outside the response to the Commission's recommendations would be referred to the relevant Portfolio and Select Committees. |

MINUTES
Department of Education (DOE) Response to recommendations of Financial and Fiscal Commission (FFC) on the Division of Revenue Bill 2008/09
Mr Phillip Benade, Chief Financial Officer, Department of Education, apologized that the Director General was unable to attend. He noted that in his presentation he would address comments made by the Financial and Fiscal Commission (FFC) on the Division of Revenue Bill (DORB).

In relation to the National School Nutrition Programme (NSNP), Mr Benade stated that he fully endorsed the FFC recommendations, which in summary had been that all provincial education departments adopt the programme as their responsibility, that there be full coverage to all primary school learners, that the implementation be improved, particularly in no-fee schools, that there be national norms developed and that there be improvements also to procurement procedures, equipment and facilities, monitoring and evaluation and budgeting. However, he cautioned the Committee that all the FFC recommendations had serious financial implications. There were provincial specific circumstances and challenges, mostly related to funding because most of the funding of NSNP was through the conditional grant. The Committee should also note that some of the areas raised by the FFC, such as procurement,  involved processes outside the Department. He added that at a national level there was improved monitoring and evaluation.

Mr Benade indicated that the Department would like to ask for increased funding in the 2008 Medium Term Budget Framework, in order to provide an immediate implementation of increased funding for meals for learners, from R1,53 to R1,84, and for increased number of feeding days from the present 154 days to 198 days. A later proposal would be made to address feeding in no-fee secondary schools over a period of three years. The proposed increases were tabled, split across the various areas (see attached document).
 
In respect of the recommendations on the financing of school infrastructure and education outcomes, FFC had recommended that the conditions of the Provincial Infrastructure Grants should specify the requirement for provinces, and that there be effective coordination of planning for provincial and municipal infrastructure grants. The Department endorsed that recommendation. The Department commented that better data was needed to estimate the impact of infrastructure requirements and this would become clearer once the update of the School Register of Needs was complete. There were human rights and equity arguments for improving infrastructure. The Department had strongly championed and implemented pro-poor funding of education inputs, and the FFC recommendations on infrastructure would be incorporated in the policy development and review. It agreed that there must be effective coordination of planning.

With regard to Learner Support Material (LSM), FFC had stated that this needed to be more clearly defined. Mr Benade said that the current definition of LSM included textbooks, stationary, teaching material for teachers, boards, chalk and teaching guides. The Department endorsed the FFC recommendation that the LSM should be broadened to ensure alignment with international trends. However, the provincial budgets already separated out the LSM requirements, and the provincial departments had to report to the national department on their spending. Maintenance,  repairs and equipment were separately budgeted.

For the no-fee schools, the FFC had recommended that the Provincial Equitable Share (PES) should reflect the socio-economic profiles of learners. There should also be norms and standards that indicated the level of knowledge and skills that learners were expected to acquire at various ages and stages. The Department noted, supported and endorsed the FFC recommendations.

FFC had commented also on the fiscal implications of re-demarcation of provincial boundaries, suggesting that the provincial equitable share and the local government equitable share should be revised to take changes into account, and that if there were additional costs these must be funded through a once-off allocation. Mr Benade said the Department supported the FFC recommendation. Re-demarcation had in practice negatively impacted on budgets of some of the provincial departments of education. There was a need for an improved process to determine the amount to be shifted with functions. The Department was therefore suggesting that official requests should be coordinated by National Treasury, rather than inter provincial agreements. The equitable share should be influenced more strongly by poverty index.

In respect of its analysis of the spending performance of provincial departments, FFC had recommended that the aim should be seven year budget allocations, rather than a three year cycle. Policy prioritization should be supported by over-average annual budget growth rates, and best practice should be encouraged. Service delivery programmes should be defined by and report on actual and targeted beneficiaries, personnel and budget and current items and capital assets used for service delivery. These comments were supported by the Department. There was a uniform budget programme structure for the education sector, annually agreed sector priorities for the MTEF, agreed performance indicators and a National  budget monitoring and support office was established.

Mr Benade finally tabled the sector priorities and budgets allocated, and noted that a further sector meeting was scheduled for 19 September. The additional funding request, broken down across sectors, was tabled (See attached document).

Discussion
Ms D Robinson (DA, Western Cape) commented that she was encouraged by increased spending in the Department of Education but there was a need to improve administration and flow of information to centres of learning and teaching.

Mr Benade indicated that there were administrative challenges in Provinces and the intention of the National Department was to increase personnel to support the functioning of schools.

The Chairperson enquired whether there was a special intervention for rural schools in relation to learner support material. including maintenance and repairs, electrification and sanitation. He further sought clarification on the sphere of government that was responsible for assets transfer.

Mr Benade acknowledged that maintenance was a serious challenge and it tended to be sidelined by other priorities because every year the Department was expected to submit only four priorities to the National Treasury. The Department had finalised its infrastructure plan and this would  be presented to the Cabinet for further input and finalisation because it had serious cost implications. Provinces had funding available to deal with electrification and sanitation in rural areas but the Department acknowledged that there were practical challenges because construction companies had moved to the cities to take on bigger projects, due to the construction sector economic boom. In addition there were clear administrative guidelines for the Department on inventory of assets and the handing over process for assets, and Provincial Departments were aware of the guidelines.

Mr E Sogoni (ANC, Gauteng) expressed concern that the NSNP only focused on no-fee-schools,  excluding community poverty, and felt that this classification might be skewed. He also sought clarification on the definition of LSM and asked whether provinces had a standardised method of measuring socio-economic levels. He sought the view of the Department on whether the outcomes of education were commensurate with the financial resources that were invested in the education sector, in comparison to other developing countries. He also sought the views of the Department on whether the recovery plan might not require more financial or capacity resources.

Mr Benade indicated that the query about the outcomes of education against the financial resources invested was valid, but this was a broader debate which included substance issues in education, that in turn were related to capacity and not financial resources. The recovery plan was presented in May 2007 but the public sector strike interrupted the implementation of the plan.

Ms A Mchunu (IFP) enquired whether the Department was using retired teachers to encourage teacher-to- learner interaction. She also commented on the fact that every year the delivery of textbooks was a chronic problem which affected teaching and learning at schools. She asked if the Department was intending to take over the responsibility of delivering textbooks, to ensure efficiency.

Ms Robinson concurred with the comment on quality of education but her concern was related to the quality of teachers, their working conditions, ethical conduct and whether the Department had any plans to resolve the issues.

The Chairperson, in his closing remarks, indicated that some questions had not been responded to because they fell outside of the FFC recommendation,  even though they were valid. The Committee would therefore refer the questions to the Portfolio Committee and Select Committees dealing with Education for further clarification and explanation.

The meeting adjourned.