Briefing by the AGSA on the audit outcomes of Higher Education portfolio, DHET and Council on Higher Education (CHE) Annual Performance Plans 2023/24; with Minister and DM

Meeting report

Opening Remarks
Mr Anele Kabingesi, the Secretariat, noted the apologies for the meeting.

The Chairperson noted that the Committee had an apology from Minister Blade Nzimande and Minister Thulas Nxesi was there on his behalf. She said the apology was accepted and the Committee was in the capable hands of the Deputy Minister. She said she would afford the Minister a chance for opening remarks. The Committee had had a fruitful couple of days with the Department of Science and Innovation (DSI). She knew the Committee’s engagement with the Department of Higher Education and Training (DHET) would be just as fruitful.

She said there was always some anxiety when dealing with the plans and reports from the DHET because the nature of the portfolio dealt directly with the needs of the citizens in the country. The Committee hoped the report by the Department reflected some of the input of the Committee from the previous Annual Performance Plan (APP) briefing. She hoped the Department would consider the Committee’s engagement from the various quarterly reports. The Committee also hoped to see plans that spoke directly to the audit action plan and what the Auditor-General had been saying.

In the planning for the year, the entities of the DHET needed to show the Committee that it had considered that. The Committee needed targets that spoke directly to the needs of the citizens of the country. These targets spoke directly to the expansion of the Technical Vocational Education and Training (TVET) system, and the necessary infrastructure and budget to support that expansion. The entities also needed to consider lecturers, security, and loadshedding in supporting that expansion. Looking at the presentations on the state of readiness for the 2023 academic year, the demand for Community Education and Training (CET) and TVET was growing. Showing that the efforts by the Deputy Minister were paying off. Young people want to go to TVET colleges, but we don’t have the capacity for that. The Committee needed to see that the Department had planned to improve that for the 2023 academic year.

The Chairperson said the Committee needed to know the plans for strengthening the National Student Financial Aid Scheme (NSFAS). NSFAS had its role to play, but the Department had to plan on how it was going to strengthen NSFAS as it was the immediate oversight body. The Chairperson noted the Committee was excited to receive the resorts from the DHET and its entities and looked forward to making meaningful recommendations that would assist the Department. She handed over Minister Nxesi.

Remarks from the Minister’s representative
Mr Thulas Nxesi, Minister of Employment and Labour (representing Minister Nzimande), said the Department was honoured to present its Annual Performance Plans and that the current financial year was critical for all government departments as government committed to the Medium Term Strategy Framework. The Minister of Finance had shared with the Nation the positive economic recovery trajectory, but he also showed that the medium term growth had declined. As the Department was talking about expansionary fiscal policies, it was talking about expansionary expenditure. The Department needed to balance that with shrinking revenue. It needed to determine which areas to expand and which to cut down.

An indication that the country continued to face huge financial risks was the weakening finances of the SOEs. The SOEs were very central to artisan development for our youth. Thousands of people had been trained by Eskom and Denel, for example. The higher public service wage bill, the high debt levels, and the loadshedding challenges, compounded to make it hard for any department to ask for additional funding. Hence, a balancing act was going to be important.

He said there was no shortage of government money for training. What was lacking was integration and coordination. When you looked at what the SETAs and the Department of Employment and Labour were getting from UIF, you would see a lot of duplication of training programmes. People were running away with millions, which was a joke. After a few months of training, those young people had nowhere to go. If the Department could come up with integrated programmes, it would be able to maximise the resources. There was a programme in which the Department was planning with higher education and private businesses to maximise resources for unemployed young people. The problem was with government systems, what you could do in a month in the private sector would take government a year.

He said the Department would be impacted as it strove to expand the public service sector of education over the medium term. At the same time, the Department was mindful of the expenditures of the Nation it served. For that reason, the Department would continue to reprioritise the existing budget and put controls in place to address the inefficiencies. He spoke with passion about the Department because he had discussed it for long with Minister Nzimande, and it was in the interest of the Committee to demand reports on progress in that area, given the millions of unemployed in the country, especially young people. Notwithstanding the challenges it faces, the Department would continue to support young people, for instance, the plan to increase enrolment of students in CET institutions from 439 659 in 2023/24 to 559 884 in 2024/25. Also, increasing investment in TVET student funding from NSFAS. The challenge was very clear: “how do we deal with the quality of spending in terms of those bursaries?”. It had to be linked to the student’s progress, as people do not want to be at university forever and be supported by government. Stringent rules needed to be in place.

He said the Department was finalising concept designs for constructing two universities in Ekurhuleni and Hammanskraal. Student accommodation developments would also take place in those areas as well as satellite campuses. He said, given his experience in public works, many government buildings were underutilised, and that was one area that had to be looked at very seriously. Property was still under the control of those who had monopolised that space. While that was not enough, it was a step in the right direction as the Department pursued expansion.

He said artisan development remained a key priority and, in that regard, there was a plan to get 30 000 students in TVET colleges which the Deputy Minister was already very passionate about. Learners in skilled development programmes would also increase. Regarding student funding policies, Minister Nzimande had committed to submit to Cabinet, clear proposals on comprehensive student funding policies. That was based on consultations that were concluded with the banking associations of South Africa and the proposed government currency scheme. A comprehensive policy was very important. The biggest challenge was the missing middle. An unrelated example was public servants who did not qualify for bank loans for housing or the RDP. If you could not protect the core of your public servants, the police, the teachers, and the nurses, then public service would be compromised. It was the same issue with funding the public servants’ children to go to university, which had become so expensive. Also, the issue of pensions being accessed while it was still in service, needed to be addressed by putting them into the packets. Could it not be accessible for them to get loans for their children to go to university?

He said there were unfortunate incidents of gender-based violence at universities that were of great concern. Violence, in general, was also a concern, for example, the accounting student at the University of the Western Cape. The Minister was engaging universities on the minimum norms and standards of safety and security required to secure a safe environment on campus for students. Minister Nzimande would launch mentality transformation initiatives in the form of a multi-stake partnership tasked with mobilising men to champion a world free of gender-based violence and discrimination. A task team would be formed to implement the initiative as part of the many initiatives tasked with addressing gender-based violence. Maybe the universities had to have special programmes for all students on that issue.

He said the Minister and the Department intended to continue the partnership with industries to develop skills needed in the different economic sectors. TVET colleges would be useless without the support of those industries. Those were the practical skills that we needed. He invited the Deputy Minister to address the Committee and the Director-General to lead the presentation.

The Chairperson said the Deputy Minister would not yet address the Committee. She thanked the Minister and asked if Members would like to engage the Minister or move on to the presentation. The Chairperson said Members had read the presentations and asked if presenters could leave out vision and mission statements and focus on what they wanted to communicate in the presentation.
 
Presentation by AGSA: Audit Outcome of Higher Education Portfolio
Ms Michelle Magerman, Deputy Business Unit Leader, AGSA, presented that the AGSA had reflected on the South African context and the root causes of the persistent regressive outcomes. It would focus on shifting the public sector culture to see a material change in outcomes. It was committing itself to making a more direct, consistent, and meaningful impact on improving the lived reality of ordinary South Africans over the next seven years.

She said the AGSA would realise its strategic aspiration by focusing on six strategic goals: sustainability, insight, efficiency, influence, shifting public sector culture, and enforcement. The AGSA provided objectives of the proactive annual performance plan review. See presentation.
The report presented the AGSA’s targets and good performance indicators. The presentation provided a list of observations concerning the usefulness of the indicators. An outline of the misalignment of the DHET’s SLAs and SETAs APPs was provided. Examples were given of SLAs which were not present in SETAs APPs. She briefed the Committee on the preventative controls in the AGSA as well as a list of available resources. Next were some key areas for the Committee to consider when reviewing the APP. A list of recommendations was provided.

See presentation.

Discussion
The Chairperson thanked both colleagues from the Auditor-General’s (AG) office for the presentation. She asked if Members had any clarity-seeking questions as that briefing was meant to guide them as a Committee.

Ms K Khakhau (DA) said the briefing was very clear. She asked the AGSA, on its engagements with the Department on indicators that needed to be modified or corrected, what were the different reasons for those specific indicators. What was the impediment for the Department to improve on those indicators without having to be advised by the AGSA? In cases where those indicators were not resolved, what was the reason for that?

Ms J Mananiso (ANC) asked, in terms of the back-and-forth communications with the Department, was there a specific period where the AGSA needed to write to the Department and say by when it needed to respond? On human capital in supply chain management, did the AGSA have a department or institution within that sector where there were unqualified people in those positions? Internal controls were not always as good as they were supposed to be. One was happy about the report itself, because most of the issues raised by the AGSA had been lamented by the Committee, such as marginalised groups and how those could be targeted.

Mr W Letsie (ANC) said the AGSA had said that with the new Auditor-General, there was a new mandate. That new mandate, how was it communicated to the other entities in terms of how it was being measured or audited? That new mandate would have an impact on the entities as they might be audited differently. How long did the AGSA give the entities to adapt to the new normal before auditing them for that financial year? He asked because he knew there had been tension between the AG and some of its entities. Last year, some entities said they had to be given time to rectify some of the changes that were made. That was a problem, because it meant the Committee was unable to assess if it had an issue at an institutional level. Would the new mandate affect audit opinions of the institutions? If yes, how much did the AGSA think its audit opinions were going to change?

Responses

Ms Magerman thanked the Members for their questions and comments. She said the AG herself presented the new strategy to Parliament at the end of last year. The AGSA was going to all the entities and boards to present the new strategy. The strategy itself did not take away the normal audit; the AGSA still audited against GRAP and Treasury regulations. In terms of financial statements, they were going to stay the same. The strategy would not change the audit opinion, that was based on the financial statements, and it comply with laws and regulations. Beyond that, if an entity documented that it wanted to train ten learners, but it only trained five due to budget restraints, that was fine. The AGSA wanted to know specifically what those five students had been trained in. If the other five were not trained, what was the impact of that on the country? That was not an audit opinion matter; it was an insight into how to improve and achieve targeted goals.

She said the AGSA would like that to be the conversation because that was what the citizens felt on the ground. If an entity said it was unqualified or clean, what did it mean to be clean? Was the entity clean because it set a target just to attend meetings, or was it clean because it was doing what was required? That was the mind shift the AGSA would like to see in its office. The AGSA started the APP reviews last year November, and for some of the entities submitting, it gave findings and followed up on the changes. It did share that with the DHET to fast track some of the changes made by the SETAs. Before the sign off, most entities had corrected their APP’s. The reason APPs came in the way they did was that some were lacking a review by management and some of them just had a lack of capacity. Some SETAs did not have a COO who did checks, which limited the number of reviews required.
 
Ms Zamahlangu Mditshwa, Senior Audit Manager, AGSA, said there were inadequate reviews that were taking place, because if an entity was able to make the changes after the AGSA had brought it to the entity’s attention, it just meant the entity had not picked the issue up through its review process. The AGSA had a lot of back-and-forth on the alignment between the Service Level Agreements (SLAs) and Strategic Annual Performance Plans. It identified many indicators that were not included as it did not have the budget to do so. After the Minister’s intervention, it gained a lot of traction, because many included those indicators in their APPs now.

Many said they did not have the budget, but if the entities looked at the nature of the indicators, they spoke to the work that the entities were meant to be doing. There was no correlation regarding capacity, hence the AGSA saw many entities incorporate the indicators in their APPs. If an entity put something in its APP, it was going to be held accountable for that, so some institutions were avoiding that. The AGSA needed to engage with the Department to ensure the entities had those agreements with the SETAs, and to know what the Department was doing to monitor their implementation. She said the AGSA also had a lot of engagements with the Minister and the Director-General to ensure they were included. A few still did not put the indicators in their APP, but most of them had included them.

The Chairperson thanked the colleagues from the AGSA’s office and said she trusted the Members were fine to move on to the next presentation. The Chairperson welcomed Mr S Ngcobo (DA) and Mr K Pillay (ANC).

The Chairperson noted that the Committee was very young and energetic. The Members of the Committee, during oversight, went to Venda to make sure the institutions were ready for the academic year 2023. In many cases, it had a good start but in others, it was disappointed because it had done all that oversight. She hoped Mr Ngcobo would contribute to the energy of the Committee.
 
She addressed Minister Nxesi and noted that NSFAS had issued an apology for next week’s meeting because it had a conference. Two weeks ago, she said the Committee could not accept apologies during that time. Performance reports were the most important aspect of the work that was done, as well as briefing Parliament on plans and results at the end of the year. Colleagues had to appreciate that the Committee engaged with 389 other Members of the National Assembly that represent all the citizens of the country.

It was unfair to tell the Committee what you planned to do with taxpayer’s money and what you had spent it on and then not attend meetings. That was a reoccurring issue with NSFAS, which had not even told the Committee what it had done with the money it received last year. Now it did not have the time to tell the Committee what it planned on doing with the money this year. The Committee could not accept that apology, and the Department had to ensure it was at the next week's meeting. The Committee’s plea was that those APPs be physical, as they were the last ones of the year, and they were only done once. She appreciated the colleagues from the AGSA for always supporting the Committee's work in strengthening its accountability.

Council on Higher Education Strategic Plan 2020-2025 and the 2023/24 Annual Performance Plan
The presentation briefly touched on the CHE’s mandate as conferred by the Higher Education Act No. 101 of 1997 and the National Qualifications Framework Act No. 67 of 2008. The presentation expanded on its additional mandate for transformation, monitoring, and oversight. Next was a list of some strategic outcomes for 2020 to 2025. The presentation provided some focus areas for the CHE’s 2023/24 annual performance plan. An overview of the budget for the financial year was what followed, outlining some indicators and targets for the Council.

The 2023/24 financial year budget was discussed, providing a high-level summary of the revenue and expenditure. The budget allocation on the compensation of employees for the financial year 2023/2024 was outlined. The CHE discussed some points noted on the compensation of employee’s budget. The budget allocation for goods and services and some points noted on the budget were also provided. Some challenges that could potentially impact on the successful execution of CHE mandates going forward were discussed.

See presentation.

Discussion
The Chairperson thanked the colleagues from the CHE, which was led by the new chairperson, Ms Vuyokazi Memani-Sedile. She welcomed the new chairperson and noted that the Committee was unapologetic in its advocacy to have women in the ranks. The Committee committed itself to supporting her. She noted that the CHE needed a bigger budget to do the work it needed to do. The most important thing was for the Committee to be brought into confidence about what the budget was for. She said “Also, you don’t always need money directly, but budgets could be coordinated so you may have the capacity to be impactful in the work that you have to do”.

She acknowledged the deliberate way the CHE had spoken on transformation and decolonisation of the curriculum. She welcomed the work the entity planned to do in the private and bogus institutions. When the citizens said TVET qualifications were not of a particular quality, what role did CHE play in improving that and its relationship with the Department’s TVET programme? In Limpopo, there was a situation where a college offered mechatronics qualification faster than the curriculum mandated, and there was equipment that needed to be bought without the support of the curriculum. The Committee had to look outside its budget to facilitate purchasing that equipment.

Mr S Ngcobo (DA) asked, on programme three, why there had been a budget decrease for research, monitoring, and advice. That was a decrease from R11.5 million in the 2022/23 financial year to R10 million in the 2023/24 financial year. What was the reason for the decrease and what impact would that have on the performance of the programme? Programme four also had a budget decrease; what was the reason for that and what impact would that have?

On the accreditation of institutions of higher learning, almost every year, the Committee heard of students who had registered at bogus institutions that were not registered. How was the CHE communicating with students to confirm if an institution was accredited with the DHET?

Ms C King (DA) said when you looked at the Medium Term Strategic Framework (MTSF) period, especially at universities, there was a slight decrease of intake of first year students. There was also a general decrease in access to universities. Ms King was concerned if those institutions, with the DHET, would be able to meet the NDP 2020 mandate on the number of students who had access to institutions. She asked if the CHE had any discussion with the DHET on that matter. She said many people had contacted her about the timeframe to get certificates from the DHET, so they could access employment. Had there been any discussion on the duration of time to issue certificates to TVET students, for them to access the job market at an earlier stage?

There was no set standard on how the fill-in form had to look, and there was no set standard for the duration of time the applicants had to wait. Most of them got rejected on numerous occasions by the DHET. According to the higher education sub-framework, eight institutions were originally targeted for assistance with developing and implementing relevant policies. What institutions were targeted and what criteria were used to identify those institutions?

Ms Mananiso said at least there was light at the end of the tunnel in terms of the work of the chairperson. She asked when the CHE was planning on filling the vacant post. She commended the chairperson on her work with bogus institutions. Was there a process or procedure where people could call the CHE for complaints and whistleblowing? If not, were there plans to have such a process in place? There was a real need to address those bogus institutions.

Regarding ‘peer’ employees, how were those people employed? Was it through internships or fixed term employment? On the transformation framework of comprehensive digital services, were there any indications of how CHE was going to fund that? What resources did CHE have to ensure migration into the digital space?

Mr Letsie congratulated the new chairperson of the CHE and asked how many board members were there during the previous term. CHE had a clear mandate to implement quality assurance systems for all higher education institutions. It had to monitor and contribute to the development of higher education. Was the CHE doing quality assurance on all public and private universities in South Africa? Specifically, regarding private universities because that was where you find the problem of ‘fly-by-night’ institutions with some qualifications that may not be accredited. In the APP CHE referred to the 2022/23 financial year, it looks like it had made a mistake on the financial year. It looks like the entity had meant the 2023/24 financial year.
 
He said the CHE’s APP mentioned that many higher education institutions had developed significant digital capacity. Had CHE budgeted for its comprehensive digital transformation framework in the current financial year? If so, what was the cost implication of that framework? If not, how would the entity secure the funds to implement it this year? He congratulated the new Council and wished them all the best. He asked if there were plans to commemorate or celebrate the Council’s 25-year milestone. It was important to communicate achievements. It was CHE that uncovered many institutions that were not properly qualified. What was the Council doing to answer the question of some who believe TVET colleges were outdated? What was the work being done in that regard? Had CHE identified jobs of tomorrow and how TVET’s could occupy that space? What kind of curriculum was needed to respond to that question?
 
Ms Khakhau said 25 years was plenty of time for the Council to recognise vacancies and develop innovative methods to fill those holes, to ensure that it transformed the sector. She said she loved the conversation of a transformative agenda that was decolonial in its approach, but what was also important was the current supply and demand. Very little work was done by the Council and the sector to catch up to the Fourth Industrial Revolution. While CHE’s monitoring tools would be digital moving forward, more needed to be done on offering education across institutions of different types in a digital form. If we needed to address access to institutions, we did not need to build institutions all the time when we had students who could study from wherever they were. That was what a digital platform afforded us. That not only provided access for those who needed it, it also addressed the issue of choice. People got to decide which institution to study at and were not limited by geography. It also dealt with students who had to choose between going to work to put food on the table and getting an education. That was a question no young person had to have to deal with in the country.

She said another problem was student accommodation. If a person came from a rich or middle-class family, they did not need accommodation at school as they could log on from home. That also maximised access to as many applicants as possible. Then the focus would shift to accommodation for those with no other way of accessing the institution. Those were the things she implored the Council to look at. She contacted the Minister on the offering of mechatronics training, and the response lacked some understanding. A lack of understanding of the deficit between TVET and the efforts by the CHE to improve qualifications. The response said the offering of mechatronics was not part of the review that was being done. Had that changed? Could the Committee expect it to be reflected in the new release of accreditations?

The Chairperson said some of the comments and questions the Council could reflect on as it did its work, others needed to be addressed immediately. If others needed to be put in writing, “please feel free to do so”.

CHE responses
Ms Memani-Sedile said private institutions accredited by the Council were subject to institutional audits. CHE selected several institutions to audit per year. For those that were not accredited, CHE did not work with them. The Department had a register of all the registered institutions, and it encouraged students and parents to examine if the institution was registered or not. CHE needed to embark on an awareness programme together with the relevant institutions. One way the entity could do that was to go to the registration itself, because it was sad when people had been taken for a ride and found out they were registered in a bogus institution.

She said the vacancy needed to be filled by the Minister, but the entity had written to him to fill the board of CHE. Seven board members were now on their second term of their four years. There were two who had been co-opted that were on their second term. The Minister appointed six new members, and the rest of the nine were officials that did not have a set term. CHE also did have a whistleblowing line for reporting on bogus institutions.

On monitoring the state of higher education, the CHE did that through its quality assurance. That went for public and private institutions as well. The first part of quality assurance was accreditation, because the entity needed to look at the programmes the institution wanted CHE to accredit. Another part of quality assurance was the institutional audits, which followed up on whether the institution still qualifies for the accreditation.

On the correction of the financial year, the COO and CFO would investigate that.

Regarding celebrations for the 25-year milestone, the entity wanted to link it with the launch of its quality assurance framework. When it received the details, it would share them with the Committee. That was an opportunity to communicate what the entity had done in 25 years and not let other people tell its story. In terms of the Fourth Industrial Revolution, the entity was moving slower but would try to pick up its socks and catch up.

Dr Whitfield Green, CEO, CHE, said digitising the space had been a big focus for CHE. It just concluded a task team looking into online and digital learners due to Covid-19. CHE would conduct a team review of all the higher education institutions wanting to continue in that modality without reaccrediting their programmes. The team review would be the basis for reaccreditation, ensuring the same standards are applied. The entity was looking at 19 September to hold its 25-year anniversary. CHE was having a series of dialogue events coming up, such as the one on AI and was using that to compile its history.
 
He said the CHE did not have oversight over the quality assurance of the TVET sector. Its oversight was in relation to the higher education institutions and the private higher education institutions. The entity did not have oversight over the curriculum of TVET, although there was a need for it to collaborate with the QCTO, given the new occupation qualification framework which was now up to level 8. The one contribution higher education made to TVET was promoting quality lecturer education and training.
 
He said the digital transformation framework was key. The entity had a framework that Council had approved. In the last year, CHE implemented 20 projects in its operational plan, but funding was really rollover funding and funding that became available. There was a need to establish a source of funding to conduct the transformation work. What was becoming a concern, was the entity’s oversight over public colleges. Nursing colleges, for example, were often higher education qualifications. Beyond the initial accreditation, CHE had no real oversight over those colleges. CHE needed clarity on how those public colleges were being positioned and the role CHE would have to play concerning that.

The timeframe issue on certificates fell outside the mandate of CHE, but it would investigate the slight decreases. CHE did publish vital statistics yearly which tracked enrolments. The entity would investigate that to discover what the trends were.

Mr Thulaganyo  Mothusi, CFO, CHE, on the decreases in programmes 3 and 4, said that had been due to the injection of rollover funds. CHE would correct the mistakes pointed out by Mr Letsie. On the issue of peer academics, the entity used peer academics based on their skills and competency for the work they needed to do. They were not part of the COE but separated in terms of the agreement with the AGSA. Previously they were considered consultants, and at the previous Portfolio Committee meeting, it was pointed out that the use of consultants was very high. Those were renamed ‘peer academics’ so it was clear they were a peer-driven organisation.

Ms Memani-Sedile said she believed CHE addressed all the questions, but if it missed something, the Committee could remind it, and it would respond in writing.
 
The Chairperson thanked the colleagues and said the Committee was done with its engagement with CHE. She said she would allow the Deputy Minister to say a few words before the Committee released him.
 
Remarks by the Deputy Minister of DHET
Mr Buti Manamela extended his condolences to the friends and family of Professor Kgwadi, the late Vice-Chancellor of the Vaal University of Technology. He noted the Chairperson’s concern regarding NSFAS’s absence, and said the Department would ensure NSFAS attended the Portfolio Committee meeting to present its APP. He noted concerns raised by the AG and said most of the issues with AGSA and the Department had been resolved. The Director General (DG) would lead the Deputy Directors-General (DDGs) in the presentation on the DHET’s APP. He said a focus of the Department’s APP was the expansion of the system. That referred to the number of university students, TVETs, and community colleges. It also referred to expansion of infrastructure, such as two new universities and eight new campuses of TVET colleges in the current financial year, as well as free community learning centres being offered in the current financial year.

He said the expansion also referred to the number of artisans trained and graduated. There had been a decline in certain professions, partly because of Covid and some universities had to review their enrolment in those areas. The Department planned to expand the system both quantitatively and qualitatively. The Department would use that budget to create a lasting impact for future generations. He asked if he could be excused to join the Cabinet meeting.

The Chairperson thanked Deputy Minister Manamela for ensuring that all entities would bring the Committee into its confidence on how they planned to spend their budget. The next presentation was a very important one. The Chairperson addressed the DG of the DHET and said he was aware of the Committee’s concerns regarding enrolments, seeing as there were plenty of applications this year. The DHET’s presentation had to address the Committee’s concerns in a very direct manner because the Committee needed to be very practical. The Department needed to be very clear on what was meant by expansion in terms of its plans and budgets for the financial year. The DHET also needed to articulate the issue of post-graduate funding. What was the Department’s plan to make sure the SETAs were using service providers who could give students the requisite skills for them to participate in the economy? The Department needed to be in control of the training funds it afforded SETAs. What was the Department’s plan to establish effective partnerships with other departments and key institutions? Those were the type of concerns the Committee hoped the presentation would address.

Department of Higher Education and Training Annual Performance Plan and Budget for the 2023/24 Financial Year
Dr Nkosinathu Sishi, Director-General, DHET, said it was an honour to be there and it had been a great struggle to set foot in Parliament to let the DHET’s voice be heard. The DHET took that very seriously and had therefore brought the entire team. The Deputy Minister provided a very useful introduction to the presentation. Minister Nxesi also provided poignant commentary on the importance of collaboration between government departments. It was important for departments to pull together resources to have a bigger impact. Dr Sishi said he would like to address the high standards set by the Chairperson. It was difficult to meet those standards but what the DHET could do, it would do. The limitations were because the presentation was structured as an MTEF type of template. Therefore, the DHET was not able to capture what it had already done but was focused on what it planned to achieve in the next few years.

He said he trusted the DHET would be able to satisfy the Chairperson on the issue of enrolments as the entity addressed that frequently in its presentation and the entity on student funding, certification, and SETA spending. The DHET would spend a little time addressing the expansion of the system. That was not an ordinary presentation, because the entity discussed high impact indicators. Therefore, not all indicators would be discussed but there would be a focus on key issues. DHET would be presenting 105 indicators that would drive the work it would be doing this financial year. The reason for the decrease in high impact indicators was that it was the final year of the administration and some of the indicators were already addressed in the past.

The presentation provided the Medium Term Strategic Framework outcomes and what the Department hoped to achieve in the coming year. A list of how the Department measured the impact of its interventions was discussed. Some sector priorities which were provided by the presidency were outlined. The Department presented how it aimed to expand access to higher education in the coming year and the planned infrastructure to support the expansion. Some of the Department’s successes in recent years were discussed. The presentation provided insight into how the Department aimed to improve provisioning as well as the responsiveness of the PSET system. The Department’s budget structure and trends for the coming financial year were outlined. Some details on the budget movement over the MTEF were presented.  

See attached

Discussion
The Chairperson said she appreciated the presentation and felt that what the Committee had been saying had not fallen on deaf ears. She appreciated the Department’s efforts to expand its accessibility and the optimal use of resources in the TVET system. She wanted to emphasise the importance of the conclusion of the work on MTTs and student funding. She would like the Committee to hold a briefing to resolve the issue of the two new universities, as the feasibility study was now complete on both. The Committee needed to strengthen the Department’s oversight role and its role in the accountability ecosystem.

She said Committee did not want governance and management issues in TVET colleges because then it would not be able to do what that presentation was proposing. There was a need to pay close attention to the oversight of infrastructure development plans so that those plans did not fail. The Department explained that targets for graduates needed to go down because enrolments were fewer, but it did not explain why enrolments decreased. She welcomed the presentation’s target for artisan development because that was an amazing initiative.

Mr Ngcobo, on programme 6, asked how the units would aim at disabilities assist students with disabilities. That was important as students with disabilities in the country still faced a lot of barriers. The Department planned on developing minimum safety security standards for universities and TVET colleges, but CETs were not included. Why was that the case? The goods and services budget for CETs had decreased and he wanted to know how that would impact service delivery within that programme.

Ms King agreed with the Chairperson that the Committee needed to strengthen the oversight of the Department over its entities. She commended Mr Sishi for the improvements in efforts to integrate departments. Were there processes in place to assist TVET colleges with policy implementation? Ms King noted that she had been to the offices of the Department, and it was not up to standard, therefore she was glad it was moving headquarters. However, she was mindful that the budget allocation for offices had not increased. Was the Department able to absorb any additional cost for relocation? The safety and security minimum standard were long overdue, particularly after what happened at UWC last week. Why were those standards only being rolled out in universities next year and not simultaneously with TVET colleges?

She said the Department was using a lot of consultants to achieve some of its mandates and implement some of its policy directives. What was the cost of those consultants on the various programmes mentioned? Was that sustainable? What was being done to upskill the fodder in the Department to ensure that the work was being done by the various consultants? In 2021, there were concerns about the delay in the promulgation of the national qualification framework bill. Had there been any engagement with the Minister to address that issue with the president?

She said the R900 million for the University in Mpumalanga for its ECD for basic education was concerning that it could reallocate funding for the Department of Basic Education for ECDs. She would have thought it would reallocate funds for STEM enhancement, which would mean an increased uptake of students. Hence, universities had to reprioritise how many students they could enrol. R900 million could have been reallocated to assist the ‘missing middle’ students, who did not qualify for NSFAS or any bursary. She was very happy with CETs receiving R1,1 billion, because the work those entities were embarking on would solve many of the skills development challenges. It also meant students who leave school in Grade 9 or when they were 15, could fill the gap in CETs instead of TVETs. However, that raised concerns over the infrastructure efficiency grant as money would be reallocated from universities, which could undermine its capacity to implement those grants. Were universities equipped to handle the infrastructure efficiencies grant?

She said NSFAS allocations had surpassed university subsidies. That was a concern because it could undermine the autonomy and functions of those institutions, which NSFAS could take over. “We already saw that with the accreditation of student accommodation”, because NSFAS felt like it was the investors and therefore had a right to take over some of the functions of those institutions. There was not much assistance to higher education institutions except for them being regulated. Was there any discussion to assist higher education institutions, especially those filling the gap in critical skills that the country so desperately needed? If you looked at the current NSFAS funding model, access to higher education for the missing middle was becoming fewer and fewer. It was a big injustice for parents of the missing middle to pay taxes, yet their children had no choice but to go to a private university.

She said the administration budget for NSFAS had not marginally increased much, so the DHET had to be mindful that it would not be able to update its ICT systems to the full capacity it wanted to. Considering the NSFAS R1.9 billion rental, it compromised an important operational system for office space. These offices, in most cases, were a luxury. Were we going to look at the beautification of offices or were we going to look at our mandate and function? If you looked at the MTSF, NSFAS was increasing at an exponential rate. The sustainability of NSFAS needed to be seriously addressed. In another three or four years, government would not be able to afford NSFAS. There was a comprehensive funding model that was due in June and had been moved to October. Hopefully, then we could have a discussion on it, and it was not moved to 2024/25. “We were in a situation where many students were rejected, because NSFAS and the Department needed to be clear. We might find out that NSFAS had been funding students not in the critical skills and might be redundant in the long term”.
 
She said the SETA’s sector skills plan was not very aligned with critical skills in the various sectors. Service level agreements and technical indicators were also not aligned with what the DHET wanted them to achieve. She would like the Department to provide a detailed plan on how SETAs would address the alignment of SLAs with the DHET. Was there a process in place where the Committee could periodically review the National list of occupations in high demand together with the Department of Employment and Labour and the Department of Home Affairs?

She said in 2021/22, the DHET had 108 litigations and only three of them were finalised; the rest were still pending. What was the nature of those litigations and what was the cost for the Department going forward? There was serious misalignment regarding certification with SAQA, the QCTO, and the Department. How far was the Department, in addressing the backlog of certification and the timeframe it had to take to issue a certificate?

Ms D Sibiya (ANC) asked how the Department had mitigated the observation made by the AG? Would the Department review the tabled APP, even those of its entities? Could the Department clarify the reason for non-compliance with SMART principles in the 2023/24 APP? That was recurring from the 2022/23 APP, what contributed to that and what was the extent of the non-compliance?
 
Mr K Pillay (ANC) said while there was an increase in enrolment, what was the percentage of graduates who were in full time employment? Had there been an audit of the number of graduates who remained unemployed? Had there been a partnership with call centre industries? Many young people opt for that career path, and call centres have been established within townships and communities. The criteria for student funding were based solely on household income, which was not a true reflection of the student or family’s financial situation. He commended the Department for surpassing its target of 10 000, but asked what the budget was for that. Could that not be used as a success story to be shared with other departments, so that they too, would be able to achieve that?

Ms Khakhau said she struggled to understand why the DG would miss opportunities for his Department to consolidate corrective measures on something as fundamental as the number of SETAs employed in strategic partnerships. How did the Department have an indicator that was unclear on the number of university and TVET students who completed their work integrated placements? If something as simple as that hinders your ability to achieve more, then it indicates a lack of motivation. Or were there people under the DG’s leadership who were not interested in the Department’s vision? If the vision of the Department was not followed by those under the leadership of the DG, then the image of the Department was going to be a problem. That would affect the success of the Department and those dependent on its success. The Department quoted conservative figures because it knew it was able to achieve them.

She said it was no secret that qualifications were being sold from within the Department. The silence on that issue was problematic. The Department needed to give the Committee confidence that that was being resolved, because it posed risks to the quality of qualifications and the country's workforce. It also posed a risk to the integrity of the institutions. The Committee could not deal with expansion of output of institutions when there were criminal elements in the Department. She said institutional funding always needed to be paired with monitoring of where the money went. It was almost as if the Department was not strict enough to reprimand institutions that misuse its funding. She asked for the updated audits of student accommodations both on and off campus. Private student accommodation was able to exploit students because of the lack of standards in university accommodation. Lack of monitoring of higher institutions of learning forced students to seek alternative accommodation, leaving them vulnerable to paying exorbitant amounts for accommodation. Most of those students end up being the missing middle.

Ms Mananiso said the Committee was able to see that what it had been saying had been considered by the Department. However, the Committee needed to get a programme of action as per the recommendation by the AG. Most of the issues that the AG raised were being ambitious about targets, but those ones were not based on SMART principles. She asked for a list of the 16 000 placed young people, because it would be unfair if all those students came from one or two provinces. She asked how the presidential database was being used by different entities, because it did not make sense to have a call for applications when there was a database. She said the Department had to not be afraid to contact the Committee if it needed to intervene with National Treasury.

She said the DHET had to use unemployed graduates and students in the TVET system to help build those new universities. That would protect them and would speak to the socio-economic issues. The DHET needed to push for an integrated approach in the PCET system, so it could fast track whatever it needed to do. There needed to be a system to intervene with the missing middle to ensure they could apply for a NSFAS bursary.

Mr Letsie said the DHET needed to have a say in how universities conduct themself, seeing as nearly R200 billion was allocated for them in the MTEF. He said if you visit the student housing that NSFAS invested R17 billion in last year, you would not allow your kids to go there. The Committee went to TUT’s best residence last year and discovered that it was a mess. That residence was built recently as well. There was a big issue regarding sanitation there. Why had NSFAS not had a say in those universities?

Ms King addressed the Chairperson and said Mr Letsie had put words in her mouth that she did not say. She kindly asked that that be stopped.

The Chairperson said Mr Letsie had to address the DG, not Ms King.

Mr Letsie said that he never addressed Ms King.

The Chairperson said she knew they were politicians with different views, and that it was work, but they had to be cautious in not making each other feel uncomfortable when expressing their views. She asked that Mr Letsie to continue.

Mr Letsie thanked the Chairperson and said the only person he mentioned was Ms Khakhau. He apologised if he made anyone uncomfortable; that was not his intention. He said he just wanted to emphasise the point that NSFAS could not invest that many resources and not have a say. His only problem with the budget was the subsidies provided to universities. They were too high, and they were not getting value for money. “It was almost like we were funding those institutions so certain individuals could do wrong things”.

Another bodyguard at Fort Hare was driven off the road and died, and that bodyguard witnessed the previous bodyguard’s murder. The resources we were sending to those institutions were at the centre of that.
He said the DHET was spending around 50% of its budget on universities, and that was not sustainable. It had neglected TVETs and CETs. How was the Department going to mitigate the misalignment of SLAs and their targets? Was the APP going to be revised to meet the SMART principles? How many SETAs were involved in that misalignment of issues? In the MTEF, NSFAS was to receive R153.2 billion for the next three years. In 2017, the budget for NSFAS was less than R5 billion. The Department needed to communicate and quantify that growth to the general public. He asked for suggestions on more sustainable methods of funding students. “We had to continue to fund the poor children who could not afford to attend universities”. He congratulated the Department on putting together an excellent budget in its APP. NSFAS had to be present to report to the Committee, the Department could not do it on its behalf. It was also the duty of the Committee to protect the Department as well as hold it accountable.

The Chairperson thanked Mr Letsie. She said the DG and the Department would have to respond to those questions in writing. She said those responses would have to be in by Monday, not even seven working days. She hoped the DHET team could assist each other to be thorough in their responses. The Members needed to make sure that they read the responses from the Department, so if anything was left out, there was an opportunity for them to clarify that. She said there was a general appreciation for the presentation today. She said that the conversations were not new ones, which was indicative of the fact that the Committee was in its fifth year as a. The Department needed to tell society what it was doing, because it needed to strengthen its communication.

She said the Department needed to tighten the screws on its budget, because it had to ensure that the SETAs were giving money to those who needed it. There needed to be systems in place in TVET colleges to strengthen the financial management of TVET colleges. When the Department returned to the Committee, it needed to see the interventions in financial management capacities. The DG needed to respond to the issue of public colleges. The DHET needed data to coordinate efforts, and one of the greatest dysfunctions our institutions had was data. Data was also important for reporting purposes, such as the Department’s quarterly reports where it did not receive all the information from institutions. USAF was not assisting the Committee, and despite its relationship with the Department - most of the time it was working against it. What strategic plans were there to strengthen those cooperative relationships?

Dr Sishi thanked the Chairperson and welcomed the generosity of the Committee to share its wisdom with the DHET. He committed that the Department would its responses by Monday. The DHET committed to looking carefully at the matters raised, not only to respond to them but to critically assess its standing. The DHET noted the quality of oversight over institutions, particularly the resources allocated to them. In that regard, utilising the AG as an instrument to hold those institutions accountable. He said he was particularly impressed by the AG’s approach to its oversight responsibility. In the past, the Department argued with the AG as it did not look at the whole impact of the Department’s policies. Based on its report today, the AG was going to investigate that impact, and that was going to improve service delivery massively. The Department would work with the AG to ensure it fulfilled those responsibilities.

The Chairperson thanked Dr Sishi and all the colleagues representing the DHET. She and the Committee had worked very well together but it was inevitable for them to differ in opinions. She implored the Members to remember that its policies would differ. Ms King and the DA were very consistent in their posture on the NSFAS and student accommodation issues. “We’ve always managed to express ourselves in a way that was respectful”. The Members had to be honest in their engagements.

The meeting was adjourned.