PRESENTATION TO THE Standing COMMITTEE ON EDUCATION AND RecreAtion nsfas annual performance plan 2013/14 29 may 2013

Presentation Overview 1 Introduction Strategic Plan and Budget overview 2013 Provide details of Performance in 2012/2013 2 Strategic Plan and Budget 2013/14 Overview of Programmes Programme strategic objectives, performance indicators, targets and associated budget Budget summary 3 NSFAS Transformation Programme

Strategic Plan Overview PROGRAMME ONE: Administration Purpose: To conduct the overall management of the entity and to provide efficient and effective support services to internal departments Budget: R98 551 000

Strategic Plan Overview PROGRAMME TWO: Student-Centred Financial Aid Purpose: To achieve the vision and mission of NSFAS by creating a centralised student financial aid system and to provide funding to eligible students while maximising recoveries and striving to increase the pool of funds Budget: R31 778 000 Funding Sources for Total Budget of R 130 329 000 DHET Administration Grant R 87 676 000 Business Transformation Budget R 24 700 000 Administration Fees R 17 953 000 2012/2013 Loans and Bursaries Budget R8 142 376 000

Performance 2012 2012 Students assisted Amount disbursed 383 114 Universities, FET colleges FET Colleges 188 610 R1 805 509 701 Universities 194 504 R5 905 361 121

Programme 1:2013/14 Strategic plan targets/1 Strategic objective Performance indicator Strategic plan target Budget ’000 2013/14 MTEF target 1.1 Improve NSFAS governance to comply with Government legislation and regulations NSFAS complies with all applicable legislation and regulations and receives no adverse reports with respect to any of these. 100% compliance R 30 375 1.2 Ensure each functional unit has a congruent policy and procedures manual so that individual roles and delegations are firmly instilled All new procedures implemented by 31 March 2014 Complete procedure manual and competent and capable staff to support the new operating model R 7 146 New procedures fully implemented in all NSFAS functional units

Programme 1:2013/14 Strategic plan targets/2 Strategic objective Performance indicator Strategic plan target Budget’0’000 2013/14 MTEF target 1.3 Improve the governance system to provide a smooth transition from the old to new policy framework Implementation of 25% of new policies reviewed and required policy refinements done by 31 March 2014 New policy Framework R 7 028 Policy implementation monitored for effectiveness and refinements effected 1.4 Integrate the new policy into the performance management framework so that executive management and employees are accountable for delivering on the policy Performance of all employees assessed against new performance framework metrics by 31 March 2014 New performance framework R 2 611 Employee performance assessed against new performance framework metrics

Programme 1:2013/14 Strategic plan targets/3 Strategic objective Performance indicator Strategic plan target Budget ’000 2013/14 MTEF target 1.5 Ensure staff have the appropriate skills and competency base to fulfil its vision and mission Training requirements for all staff identified during performance assessment process, by 31 December 2013 Skilled and capable work force R 9 076 Ongoing competency improvement plan implemented 1.6 Assess the current level of staff skills and competencies to ensure the newly developed operating model is appropriately supported Prior year performance target – achieved Complete Assessment - Not applicable – prior year target

Programme 1:2013/14 Strategic plan targets/4 Strategic objective Performance indicator Strategic plan target Budget ’000 2013/14 MTEF target 1.7 Develop a skilled and trained workforce to provide sustainable delivery Staff complete relevant training programmes by 31 March 2014 for all training requirements identified during performance assessments and internship programme evaluated Training programme and Internships in place R 500 Staff complete all identified training programmes and internship programme evaluated 1.8 Develop an organisational IT reference architecture to support and enable the new operating model Prior year performance target – achieved New operating model and reference architecture approved by February 2012 - Not applicable – prior year target

Programme 1:2013/14 Strategic plan targets/5 Strategic objective Performance indicator Strategic plan target Budget ’000 2013/14 MTEF target 1.9 Procure and implement an improved IT system for efficient and effective delivery of services New Loans and Bursaries Management System implementation evaluated and refinements effected where required by 31 December 2013 A new functional LMS system R 41 314 Refinements identified during evaluation effected 1.10 Develop and implement processes and procedures for the new operating model to ensure NSFAS fulfils its mandate to students and stakeholders Policy review process completed for 25% of all policies by 31 March 2014 Approved policies and procedures R 500 Policy reviews completed and policy revisions approved

Programme 2: 2013/14 Strategic plan targets/1 Strategic objective Performance indicator Strategic plan target Budget ’000 2013/14 MTEF target 2.1 Improve marketing, communications and support for students and prospective students At least 3 targeted new media marketing and communications initiatives per defined student segment by 31 March 2014 SCM registered marketing provider appointed and new media programme implemented R 9 747 New media campaign targets and reaches each defined student segment 2.2 Develop a student value proposition per segment to service student needs more effectively Service impact assessment of student value propositions completed for all defined student segments by 31 December 2013 Research complete and proposed segments defined R 8 153 881 Student segmentation and value propositions reviewed and refined where required

Programme 2: 2013/14 Strategic plan targets/2 Strategic objective Performance indicator Strategic plan target Budget ’000 2013/14 MTEF target 2.3 Create a central applications process through regional offices and other appropriate channels of delivery Learners/students in 3 regions able to apply for funding through CAP by 30 September 2013   Operational central applications process R 500 Central applications process implemented in 3 regions 2.4 Raise new funding for undergraduate study, for targeted student programmes, including the “missing middle”. 2 new funding sources confirmed for targeted undergraduate student programmes by 31 December 2013 Increased funding by R4bn R 360 New funding sources identified and confirmed for 2015 academic year

Programme 2: 2013/14 Strategic plan targets/3 Strategic objective Performance indicator Strategic plan target Budget ’000 2013/14 MTEF target 2.5 Maximize recovery of outstanding loans from all eligible debtors employed in both the formal and informal sectors of the economy 15% year-on-year increase in recoveries from debtors achieved by 31 March 2014 Recoveries of R1,5bn achieved R 9 289 Recoveries of R600 million achieved 2.6 Develop a new programme for unfunded courses of study B Tech funding programme implemented in all universities of technology offering the qualification from 1 April 2013 New B. Tech funding programme successfully implemented R 278 B. Tech funding programme implemented, monitored and evaluated.

Programme 2: 2013/14 Strategic plan targets/4 Strategic objective Performance indicator Strategic plan target Budget ’000 2013/14 MTEF target 2.7 Develop a new product for specific targeted student Segments Funding model implemented successfully by 31 December 2013 New funding model for report 191 and NCV implemented R 100 Upfront payment of 30% of total funding allocation made to each FET college by 28 February 2013 with matching claims by 30 June 2013

Loans and Bursaries Budget Department of Higher Education and Training (DHET) 2012/13 R 000 2013/14 General allocation 2 480 614 2 754 234 Final Year Programme 1 004 000 1 120 000 Teacher (ring-fenced) 101 000 106 000 Students with Disabilities 63 000 66 000 SAICA partnership - Thuthuka Fund 34 000 35 955 Truth & Reconciliation Commission Fund 5 173 4 782 FET College Bursaries 1 734 834 1 988 434 National Skills Fund 867 908 400 000 Department of Basic Education (DBE) Funza Lushaka Bursaries 671 912 893 867 Total 6 962 441 7 369 272

Loans and Bursaries Budget / cont. Other funding R 000 Dept of Social Development – Social Work Bursaries 351 000 250 000 Dept of Agriculture, Forestry & Fisheries 9 426 11 718 Communicare 200 TBC Eastern Cape Provincial Government 19 317 Non-Governmental Organisations 25 325 12 950 Nedbank 12 587 Dept of Labour - Ntabankulu Project 945 SETAs 76 000 Total 482 213 274 668 Grand Total 7 444 654 7 643 940

Budget Overview 2012/13 R 000 2013/14 Compensation of Employees 39 656 52 334 Goods and Services 118 742 72 616 Communications 4 749 5 585 Consultants, contractors and special services 16 491 10 998 Outside services and maintenance 10 793 14 939 Staff education, training and development 889 3 643 Postage, stationery, computer services 9 996 10 141 Official functions 2 324 2 611 Business development 72 614 24 426 Policies, procedures and training 886 274 Payments for Capital Assets 4 286 5 380 TOTAL 162 684 130 329

NSFAS Transformation Programme background NSFAS funding has increased significantly since the NSFAS Act in 1999 Growth from R441 million in 1999 to R8,2 billion in 2013 Financial aid to university and FET college students has increased substantially in the past 5 years: From R3,1 billion for 191 040 students in 2009 – to R8 billion for over 400 000 students in 2013 NSFAS structures, policies and systems have not kept pace with growth in funds Loan Management System developed for TEFSA is outdated, inadequate AG Disclaimer of Opinion in 2010

Background (continued) Applications annually through Financial Aid Offices not controlled by NSFAS – process developed over time and is deeply flawed requires ad hoc adjustments such as 30% upfront payments Inefficiency, fraud and corruption – all applicants means-tested, including learners from Q1, Q2 schools NSFAS has no direct relationship with students until they have exited Makes it difficult to recover loans and replenish the pool of funds Old systems do not manage information or facilitate reporting Despite the growth in funds, supply still falls far short of demand Institutions ignore means test results and “topslice” allocations This achieves access but hinders success Students are registered but unfunded - 2013 shortfall estimate R3 billion

The new student-centred NSFAS model

IT model - scope of the new systems

Benefits Centralised means test Applications checked against government databases DOHA, DSD, SARS, PERSAL Standardised process Alignment with admissions and registrations procedures Visibility of funded learners and returning students early in process Centralised allowances distribution helps detect and prevent fraud Improved governance Student-centred model ensures funding reaches intended beneficiaries Ability to develop partnerships to link financial aid to work experience, skills development and employment due to technology capabilities

Questions and discussion