Department of Higher Education and Training ANNUAL REPORT 2014/15 Department of Higher Education and Training Presentation to the Select Committee on Education and Recreation 4 November 2015

Presentation Outline Strategic Overview: 2014/15 Programme Performance on Predetermined Objectives Achievements Non achievement of targets Financial Information Report of the Accounting Officer Report of the Audit Committee Report of the Auditor-General : Action Plan to improve audit findings Financial Statements Impact of the 2014/15 Financial Outcome on operations

Service Delivery Overview Strategic Overview: 2014/15 The Annual Report of 2014/15 is a concluding report on the achievements of the Department’s strategic goals that were set out in the 2010 – 2014 Strategic Plan It is informed by the work performed by the Department during the 2014/15 financial year in terms of the Annual Performance Plan There were five budget programmes during the year under review with a combined total of 43 predetermined targets: 31 (72%) targets were achieved 12 (28%) targets were not achieved The Department used the year under review to consolidate the gains and shortcomings made in previous years Continued to pursue our mission of improving the provisioning of post-school education and training opportunities

Service Delivery Overview Considerable efforts in the refinement of legislation and policy directives aimed at improving the Post-School Education and Training (PSET) system were made as follows: Commenced a process of developing a new National Plan for Post-School Education and Training system The Joint Task Team reviewed the Higher Education Act (101 of 1997, as amended) Published Policy for the Provision of Distance Education in South Africa Minister approved National Trade Test Regulations for implementation with effect from 1 April 2015 Launched Social Inclusion Policy Framework to address, amongst others, the establishment of disability units in all PSET institutions

Service Delivery Overview In response to our efforts towards increasing access and success, both the university and Technical and Vocational Education and Training (TVET) college sectors have registered growing student enrolments during 2014/15 Established a Ministerial Committee to review funding frameworks of TVET colleges as well as the new Community Education and Training (CET) colleges to address student access, economy and efficiency related challenges To address the current low articulation levels in the system, the Department published a draft National Articulation Policy and Guidelines for public comment The Annual Report also provides comprehensive details on the envisaged strategies to deal with targets that were not achieved per programme

Programme 1: Administration Performance Status as at 31 March 2015 Purpose: To provide overall management and administration to the Department Strategies to deal with under performance on targets that were not achieved, are underway. Affected areas include: Filling of vacancies within stipulated time Implementation of Information and Communication Technology (ICT) governance framework components The period it takes to award a bid Performance Status as at 31 March 2015 Targets Achieved Not achieved 3 Total Targets

Programme 1: Administration Other Significant Achievements: The vacancy rate is slightly above 10% (10.28%) The Department’s Internship Programme provided access to 7% interns compared to the national target of 3% Most disciplinary cases were resolved within the required 90 days (out of 16 disciplinary cases, 11 have been finalised) Successful transfer of TVET and CET staff from a provincial to a national competency Satisfactorily resolved 99.5% of the 15 875 queries received by the call centre

Performance Status as at 31 March 2015 Programme 2: Human Resource Development, Planning and Monitoring Coordination Purpose: To provide strategic direction in the development, implementation and monitoring of Departmental policies and the Human Resource Development Strategy (HRDS) for South Africa. Achievements: Public institutional data (50 public TVET colleges, 23 Higher Education Institutions and 21 SETAs) integrated into education and training management information system Draft career development policy was communicated and consulted with stakeholders Performance Status as at 31 March 2015 Targets Achieved 2 Not achieved 1 Total Targets 3

Programme 2: Human Resource Development, Planning and Monitoring Coordination Other Key Achievements 2013 Data and Statistics on Post-School Education and Training in South Africa were published A framework on skills supply and demand which lays out the structure of the Annual Report on Skills and Demand in South Africa was approved by the Minister for public comment Published Ministerial Guidelines 2014/15 to provide strategic direction for SAQA and the three Quality Councils Monitoring and Evaluation reports on the work of SAQA and the three Quality Councils have been completed The Department has gazetted a list of occupations in high demand Social Inclusion Policy Framework was finalised and approved by the Minister for public comment

Programme 2: Human Resource Development, Planning and Monitoring Coordination The target that relates to the ‘International Engagement Plans developed and implementation report compiled’ was not achieved by the end of the financial year but has subsequently been achieved

Programme 3: University Education Purpose: To develop and coordinate policy and regulatory frameworks for an effective and efficient university education system. To provide financial support to universities, the National Student Financial Aid Scheme and National Institute for Higher Education Achievements: Note: The achievement reported as at 31 March 2015 are for the 2013 academic year audited in 2014 983 698 students enrolled in higher education studies at universities (11 698 more than targeted) 689 503 African students enrolled at universities (13 503 more than targeted) Performance Status as at 31 March 2015 Targets Achieved 22 Not achieved 4 Total Targets 26

Programme 3: University Education 573 698 Female students enrolled at universities (9 698 more than targeted) 17 960 First time foundation students 50 773 Post-graduate graduates (2 673 more graduates than targeted) 2 051 Doctoral graduates (101 more Doctoral graduates than targeted) Sefako Makgatho University was established as a juristic person in terms of Higher Education Act on 15 May 2014 Monitoring report on the use of the earmarked grant to support the development of University of Mpumalanga and Sol Plaatje University National Policy on Professional Qualifications for Educators in Community and Adult Education and Training was published in a Government Gazette

Programme 3: University Education Disbursed of R2.2 billion to universities for the improvement of different projects (infrastructure grant disbursement) A monitoring report on the effective use of infrastructure grants by each university was produced Approved monitoring report on the outputs of scarce skill graduates from 23 universities with recommendations for interventions An annual report on the financial health of 25 universities with recommendations for improvement was approved Strategies to deal with under performance on targets that were not achieved are underway. These targets include: First time enrolments at universities for the 2013 academic year (178 000) Proportion of enrolments in Science Engineering and Technology (SET): Business: Science: Humanities (29:29:42) Success rate of students at universities (76%)

Programme 4: Vocational and Continuing Education and Training Purpose: To plan, develop, evaluate, monitor and maintain national policy, programmes and assessments practices for vocational and continuing education and training, including TVET colleges and post-literacy Adult Education and Training Achievements: Nine (9) Community Colleges have been established as planned Performance Status as at 31 March 2015 Targets Achieved 1 Not achieved 4 Total Targets 5

Programme 4: Vocational and Continuing Education and Training Other Performance Areas: Headcount enrolments in TVET colleges increased from 670 455 in 2013 to 709 535 in 2014 However, the 2014 TVET colleges headcount enrolments are below target by 90 465 The underperformance is attributed to: Physical (infrastructure) and human resource (teaching staff) limitations at TVET colleges Insufficient student and programme funding in the sector

Programme 4: Vocational and Continuing Education and Training Other Performance Areas: Overall performance in respect to certification rates on exit levels in the Report 190/1 and NC(V) qualifications was below target However, the achieved 59.5% of N1-N3 certification rate is 9.5% above target and it is an improvement of 5.1% from the 2013 certification rate Lack of performance in Mathematics and Mathematics Literacy has had a compounded effect on the overall NC(V) performance 2014/15 Targets Performance NC(V) L4: 57% 34.4% N1-N3: 50% 59.5% N6: 50% 42.7%

Programme 4: Vocational and Continuing Education and Training Other Performance Areas: Overall performance in respect to the pass rate in the NC(V) Levels 2 to 4 Mathematics and Mathematics Literacy programmes is also mainly below target 2014/15 Targets Performance Mathematics NC(V) L2: 52% 47.2% NC(V) L3: 46% 46.4% NC(V) L4: 56% 35% Mathematics Literacy NC(V) L2: 72% 70.5% NC(V) L3: 82% 82.4% NC(V) L4: 87% 78.7%

Programme 4: Vocational and Continuing Education and Training Other Performance Areas: Overall performance on certification rates for bursary recipients enrolled in the Report 190/1 and NC(V) qualifications is below target 2014/15 Targets Performance NC(V) L4: 59% 39% N1-N3: 52% 43% N4-N6: 52%

Programme 4: Vocational and Continuing Education and Training Cross-cutting factors that contribute to the college sector’s failure to achieve the set targets are mainly related to student, lecturer and curriculum Student related: Poor class attendance and disruptions caused by strikes Poor profiling of students for awarding of bursaries due to inadequate application of bursary guidelines Poor student proficiency in English and numeracy Lecturer related: Inappropriate or lack of pedagogical training Unsuitable teaching and learning and management practices High staff turnover and inability to recruit suitable teaching staff

Programme 4: Vocational and Continuing Education and Training Curriculum related: Most subjects of the N programmes are outdated and curricula are poorly formulated Lack of systematic screening of teaching and learning materials In order to mitigate future underperformance on the expansion of access and increasing success. Amongst others, the following measures are being undertaken: Bidding for additional funding Reviewing N programmes Development of content/curriculum frameworks Ensuring both on-course academic support and non-academic support for students especially bursary recipients

2014/15 TVET College Bursaries Other Performance Areas: Overall performance in respect of the number of bursary beneficiaries was below the national target of 233 958 Province Allocations % Share No. of Beneficiaries Eastern Cape R237 981 345 11% 25 787 Free State R154 665 710 7% 18 059 Gauteng R488 706 656 22% 50 574 KwaZulu-Natal R467 890 935 21% 52 380 Limpopo R294 618 663 13% 31 277 Mpumalanga R135 106 153 6% 12 771 Northern Cape R45 181 564 2% 5 142 North West R141 666 415 10 532 Western Cape R238 182 559 22 758 National R2 204 000 000 100% 229 280

TVET College Subsidies Province Budget Allocation % Share Expenditure % Spent R’000 Eastern Cape 838 630 14% 788 723 94% Free State 389 424 7% 377 526 97% Gauteng 1 364 872 23% 1 310 680 96% KwaZulu-Natal 1 033 932 18% 974 108 Limpopo 657 723 11% 663 901 100% Mpumalanga 413 864 Northern Cape 94 427 2% North West 314 409 5% 311 761 99% Western Cape 719 892 12% 719 843 Total 5 827 173 5 654 835 98%

Number of Community Learning Centers Update on the establishment of Community Education and Training Colleges (CETC) Region Name of College Number of Community Learning Centers Eastern Cape Eastern Cape CETC 304 Free Sate Free State CETC 204 Gauteng Gauteng CETC 47 Limpopo Limpopo CETC 779 KwaZulu-Natal KZN CETC 1 097 Mpumalanga Mpumalanga CETC 252 North West North West CETC 143 Northern Cape Northern Cape CETC 191 Western Cape Western Cape CETC 254 Total 3 271

TVET Colleges: 2014 Enrolments TOTAL HEADCOUNT ENROLMENTS Province NC(V) Report 191 Other Programmes Total Headcount Actual Students Enrolled Eng N1 - N3 Eng N4 - N6 Bus Intro N4 - N6 Eastern Cape 20 769 14 752 6 033 26 165 3 581 71 300 Free State 7 597 18 902 7 513 27 021 2 704 63 737 Gauteng 32 593 50 576 24 883 49 598 7 555 165 205 Kwa-Zulu Natal 33 599 26 636 15 397 44 241 23 063 142 936 Limpopo 23 728 22 799 12 108 26 988 5 694 91 317 Mpumalanga 11 084 14 024 4 554 6 724 2 210 38 596 North West 9 996 15 738 4 643 13 213 1 239 44 829 Northern Cape 2 923 6 318 395 7 354 2 900 19 890 Western Cape 14 952 15 049 4 398 22 158 15 168 71 725 National 157 241 184 794 79 924 223 462 64 114 709 535 Data source: Weekly Enrolment Monitoring as at 31 October 2014

Programme 5: Skills Development Performance Status as at 31 March 2015 Purpose: To promote and monitor the National Skills Development Strategy, develop skills development policy and a regulatory framework for an effective skills development system Achievements 28 301 Artisan learners were registered nationally (target exceeded by 1 301 and an increase of 631 or 2.3% from the 2013 baseline) 14 389 Artisan candidates were found competent nationally (target exceeded by 1 389) Performance Status as at 31 March 2015 Targets Achieved 6 Not achieved Total Targets

Programme 5: Skills Development Achievements 40 399 Graduates received structured work place learning (target exceeded by 3 383 and an increase of 13 053 or 48% from the 2013 baseline) 52% of INDLELA national artisan learners passed trade tests (target exceeded by 4%) 60 Audits were conducted at SETA or QCTO accredited trade test centres 42 TVET colleges entered into partnership agreements with SETAs (above target by 12 partnership agreements

Financial Information The financial information in the Annual Report consists of the following: Report of the Accounting Officer Report of the Audit Committee Report of the Auditor-General Financial Statements (Including the Appropriation Statement, Statement of Financial Performance, Statement of Financial Position, Changes in Net Assets, Cash Flow, Notes to the Financial Statements and Supplementary Annexures) The presentation focusses on the following: A brief summary of each report A summary of the Financial Statements Action Plan to improve audit findings Impact of the 2014/15 Financial Outcome of 2014/15 on operations

Report of the Accounting Officer The Report of the Accounting Officer provides a summary of the financial affairs of the Department including a summary of significant events, key policy decisions and spending trends It also includes a summary of services, capacity constraints and organisational arrangements as well as the corporate governance arrangements within the Department

Report of the Audit Committee The Report of the Audit Committee expresses the Committee’s views on the effectiveness of internal control within the Department, the quality of reporting in terms of PFMA requirements, the operations of Internal Audit and Risk Management within the Department On the basis of the above, the Audit Committee is satisfied with the operations within the Department The Committee is emphasising that the system of internal control was not always entirely effective and instances of non-compliance were raised by the Auditor-General and Internal Audit A concern is also raised regarding the collation and reporting of performance information

Report of the Auditor-General The Department received an unqualified audit opinion Key matters raised by the Auditor-General include the following: Significant uncertainties As disclosed in Note 19 to the financial statements, the Department is the defendant in law suits. The Department is opposing the claims and the ultimate outcome of these cannot presently be determined Predetermined Objectives Programme 3: University Education – No material findings Programme 4: Vocational and Continuing Education and Training – Unable to obtain information on the reliability of reported performance information Programme 5: Skills Development – Unable to obtain sufficient evidence on the achievement of certain reported performance information. Misstatements were found on the reported performance information

Report of the Auditor-General Matters of non-compliance with Legislative Requirements PFMA Insufficient systems of risk management and internal controls on performance information Misstatements in the Financial Statements on Provisions, Accruals, Commitments and Contingent Liabilities Procurement procedures regarding price quotations Public Service Regulations Insufficient verification processes before appointments are made Internal Control Matters of concern raised include the insufficient implementation of action plans to address internal controls, inadequate consequence management, funding and human resources capacity constraints regarding verification and monitoring functions and insufficient validation of reported performance information

Financial Statements: Appropriation Statement The Appropriation Statement provides an indication of the Department’s spending against the final Appropriated Funds for the year. In summary, the position is as follows: R’000 Final Appropriation: 50 705 479 Including Voted Funds 36 866 681 Direct Charges 13 838 798 Actual Expenditure: 50 704 319 Including Voted Funds 36 865 521 Variance (On Voted funds only): 1 160 Detailed Information per Programme and Economic Classification from page 163 to 184 of the Annual Report

Financial Statements: Appropriation Statement Summary of variance of R1.160 million: R’000 Per Programme: 1 160 Administration 264 HRD, Planning and Monitoring Coordination 828 University Education 19 VCET 35 Skills Development 14 Economic Classification: 1 160 Compensation of Employees (Natural attrition/ Filling of vacancies) 902 Goods and Services (Travel/Stationery/Supplies) 58 Transfers (DHET SETA Contribution) 172 Capital (Equipment) 28 Detailed Information from page 163 to 184 of the Annual Report

Action Plan to improve Audit Findings The Department completed an audit action plan to address the control deficiencies based on the audit findings These plans include all areas raised in the Audit Report as well as all other matters identified during the audit that resulted in audit queries Progress on the action plans are being monitored on a bi-weekly basis and is reported by each Branch Head to the Director- General Regular reports will be submitted to the Minister and Audit Committee Due to key operational activities and insufficient staff capacity, delays are already experienced in progress with implementing some of the actions

Financial Statements: Impact on Operations The Departmental surplus declined due to the improved utilisation of donor resources and the decline in unutilised voted funds. This is not a negative position as it is reflecting an improvement in the effective utilisation of resources Although the Department managed to utilise the majority of voted funds, strict measures had to be put in place to prevent overspending of the Vote When the results of provisions, accruals and commitments are taken into account, the Department did overspend The Report of the Accounting Officer also emphasises the capacity constraints in the Department – Refer to page 140 of the Annual Report.

Financial Statements: Impact on Operations The current pressures on the economy and the limitations placed on the utilisation of resources could result in a similar outcome during 2015/16 Managers and staff to understand the position the Department is in, makes it more difficult to manage the limited resources Key pressures are also experienced due to the additional responsibilities as a result of the TVET and AET function shift such as more pressure to ensure regional presence, the monitoring of the entire post-school system and operational activities at the Department

Thank You