PRESENTATION OUTLINE BACKGROUND Audit report PART A: performance information PART B: human resources PART C: financial matters

Background: Role of Umalusi Umalusi is the Quality Council responsible for qualifications registered on the General and Further Education and Training Qualifications Sub- Framework (GFETQSF) which is part of the National Qualifications Framework (NQF). The Council ensures that the providers of education and training have the capacity to deliver and assess qualifications and learning programmes and that they are doing so to expected standards of quality.

Background: Mandate summarised Umalusi’s mandate is determined by two Acts namely: The National Qualifications Framework Act No 67 of 2008 (NQF) ; and The General and Further Education and Training Quality Assurance (GENFETQA) Act No 58 of 2001 as amended in 2008. 4

Mandate summarised Develop and manage a sub-framework of qualifications in collaboration with SAQA and the other two Quality Councils (QCs) supported by the necessary quality assurance policies and processes. Develop and implement the necessary quality assurance policies in relation to quality assurance of provision. Maintain a database of learner achievements and related matters; and submit such data in a format determined in consultation with the SAQA for recording on the National Learners’ Records Database (NLRD).

Mandate summarised Commission and publish research related to the development and implementation of the sub- framework of qualifications. Formalisation of relationships which include: advice to the relevant Minister on matters relating to the GFET sub-framework of qualifications; collaboration with the SAQA and other QCs in terms of the NQF; and advocacy of the sub-framework and its qualifications.

Audit Report Report of the External Auditor (pp 79-83 of the Annual Report) Achieved 17th Unqualified Audit Opinion since 2001

Part A: Performance Information Vision & mission Values Summary of performance Program 1 – Administration Program 2 – Qualifications and Research Program 3 – Quality Assurance and Monitoring Concluding statements

Vision And Mission VISION A trusted authority in quality assurance of education provision recognised locally and internationally. MISSION To meet educational and societal needs, we shall provide valid, reliable and equitable examinations and a range of assessment services in a professional, innovative, efficient and effective manner. This will be done through: Developing and managing a sub-framework of qualifications for general and further education and training that is benchmarked internationally; Quality assuring qualifications and curricula; Confirming that assessment is fair, valid and reliable; Quality assuring the provision of education and training, and assessment providers; and Grounding Umalusi’s work in research to ensure informed positions and approaches.

Values Value Behavior Leadership Umalusi values leadership in directing the performance of others in the sector and leading the way. Decisiveness Umalusi is decisive in making decisions that are firm and beyond doubt, leading to conclusiveness. Diversity Umalusi embraces difference, variety and innovation within the various services in the sector. Transparency/ Fairness Umalusi’s programmes and services are easy to access and understand. Our decisions and actions are clear, reasonable and open to examination. Professionalism Umalusi employees are professionals; we are trained in our specialties, committed to service excellence and dedicated to the successful accomplishment of our mission. Quality Umalusi constantly seeks opportunities to improve our services and products. Quality and continuous improvement are an integral part of our daily operations. Teamwork Employees work as a team and value the contributions of each individual. We know that our people are our most important resource. Integrity Umalusi strives to be honest in its operations, conduct and discipline in the organisation’s actions that have integrity. Equity Umalusi commits to treating all its stakeholders equally and fairly.

Overall status of performance

Status of achievement per programme

Programme 1: Administration Programme 1 covers the following sub-programmes: Governance and Office of the Chief Executive Officer (GOCEO) Public Relations and Communications (PR&COMMS) Information Communication Technology (ICT) Finance and Supply Chain Management (F&SCM) Human Resource Management and Development (HRM&D)

Programme 1 - Analysis of target vs actual

Programme 1 - Analysis of performance Indicators achieved or over- achieved Indicators under-achieved 1.1.1: Approval of APP by 31 March 1.1.2: Submission of Quarterly Reports to oversight bodies as per timeline 1.1.3: Communication platform utilisation 1.1.4 ICT Compliance with DPSA Governance framework 1.1.5 Submission of performance agreements and performance assessments 1.1.6: Payment of service providers within 30 days

Programme 1: Future strategies Indicator Reasons for under-performance Future Strategies 1.1.5 Late submission of performance management documents due to tight deadlines Management has updated the Policy on Performance Management Policy The CEO will implement consequence management for all late submissions 1.1.6 Under-performance was due to ineffective monitoring of internal control Improve internal control and processes for receiving and validating invoices.

Programme 2: Qualifications and Research Programme 2 covers the following sub-programmes: A. Qualifications, Curriculum and Certification Ensuring and enhancing the status and quality of qualifications on the sub-framework, which Umalusi develops, manages and reviews; Evaluating curricula to ensure that these are of acceptable quality; The certification of candidate performance for all qualifications on the GFETQSF; and Verifying all qualifications Umalusi and its predecessor, SAFCERT, have issued since 1992.

Programme 2: Qualifications and Research… B. Statistical Information and Research Umalusi conducts research and analysis and reports on quality within the GFETQSF. The mandate is to: Conduct research that is informed by the emerging needs of the education system in order to engage stakeholders towards innovative thinking; Report on the key indicators of quality and standards in general and further education and training; Establish and maintain databases; and Lead research and analysis and provide statistical support and information across Umalusi.

Programme 2 - Analysis of target vs actual

Programme 2 - Analysis of performance Indicators under-achieved Indicators achieved or over- achieved 2.1.1: Management of qualification in the sub-framework 2.1.2: Status report on the curriculum 2.1.4 Submitted candidates’ records 2.1.5 Free-error candidates’ records for which a certificate is printed 2.1.6 Verification requests processed within 2 working days 2.2.1 Research reports completed 2.1.3: Datasets created within 21 working days

Programme 2: Future strategies Indicator Reasons for under-performance Future Strategies 2.1.3 There were challenges with quality assurance checks to finalise the datasets on time. The description of the indicator has been revised to specify the final stage of datasets created within the prescribed timeframe. The 21 days exclude “waiting time” for assessment bodies to provide supporting documentation.

Programme 3: Quality Assurance and Monitoring Programme 3 comprises of the following sub-programmes: A. Quality Assurance of Assessment This function entails the following: External moderation of question papers; External moderation of internal assessment; Verification of monitoring of the assessment system; Monitoring of the conduct, administration and management of assessment and examinations processes; Management of concessions, assessment and examination irregularities; External moderation of marking processes.

Programme 3: Quality Assurance and Monitoring… B. Evaluation and Accreditation Quality assurance of provision and assessment through evaluation and accreditation of private education institutions and private assessment bodies. This entails ensuring that: Standards for provision determined, maintained and strengthened; Systems are in place to quality assure the capacity of the private education and training institutions seeking accreditation to implement qualifications registered on the GFETQSF through an accreditation and monitoring process; Systems are in place to quality assure the capacity of private assessment bodies seeking accreditation to assess qualifications registered on the GFETQSF.

Programme 3 - Analysis of target vs actual

Programme 3 - Analysis of performance Indicators under-achieved Indicators achieved or over- achieved 3.1.1 Moderation of Question Papers 3.1.2: Quality Assurance Assessment Reports produced 3.2.1Comprehensive reports produced on accreditation of independent schools 3.2.2 Comprehensive reports produced on accreditation of private colleges 3.2.3 Comprehensive reports produced on accreditation of private assessment bodies None

Concluding statements Indicators identified with errors were reported to DBE, corrected and approved by the Minister. The Performance Information Management system has been improved. Umalusi to introduce new approaches to validate performance information.

Part B : Human Resources Employment and vacancy Employment changes All figures as at 31 March 2018

Employment and vacancies Salary Band 2016/2017 No. of employees 2017/2018 Approved posts 2017/2018 No. of employees 2017/2018 Vacancies % of Vacancies Top management 3 4 - Senior management 10 Professional qualified 55 65 61 6% Skilled 11 12 2 17% Semi-skilled 37 43 42 1 2% Unskilled TOTAL 120 138 131 7 5% Page 71 The vacancy rate was reduced from 13% to 5% by the end of March 2018 with 32 appointments made.

Employment changes Salary Band Employment at beginning of period Appointments Terminations At end of the period Top management 3 1 - 4 Senior management 10 2 Professional qualified 55 17 11 61 Skilled Semi-skilled 37 12 7 42 Unskilled TOTAL 120 32 21 131 Page 72 Unfortunately there was 21 terminations, which consisted of 12 resignations, 4 promotions, 3 retirements, 1 ill-health retirement and 1 death.

Part C : Financial Matters Prior-year adjustment Statement of financial position Statement of financial performance Material items: Reportable matter Accumulated surplus Irregular expenditure Related parties 2017 – 2016/2017 - Restated 2018 – 2017/2018

Prior-year adjustment 2017 Restated* Correcting an error relating to post- retirement medical aid benefit. Accounted for retrospectively and comparative figures corrected. Page 100/101 Note 3

Statement of financial position Page 84

Assets Page 84

Statement of financial position Page 84

Assets – Liabilities = Net Assets Page 84

Statement of financial performance Page 85 & 106

Revenue Page 85 & 106

Revenue Page 88

Statement of financial performance Page 85

Expenditure – Annual Report Page 85

Expenditure – National Treasury Page 87

Expenditure Page 88

Reportable matter – Background The tender regarding the renovation of Building 41 was awarded to a Joint Venture with three (3) separate entities in March 2017 for the value of R36 million. The project started in May 2017. Payments were made to the value of R10,9 million. (R4,4 million capitalised as Work in progress & R6,5 million as Prepayment for long lead items) Umalusi became aware of allegations of fraud regarding the submitted tender documents. One JV member reported the allegation pertaining to forgery of signature through his lawyers early November 2017.

Reportable matter – Reporting Umalusi followed due process, with advice from legal counsel in terms of applicable legislation, but the providers did not respond to Umalusi’s request for further information on the matter. Consequently, the contract was cancelled on 23 November 2017. The matter has since been reported to the following entities: National Treasury in terms of the PPPFA Regulations; The Department of Basic Education as it is material; SAPS as a case of corruption in terms of the Prevention and Combating of Corrupt Activities Act; and The Portfolio Committee meeting held on 27 March 2018.

Reportable matter – Way forward Umalusi is in the process of instituting a civil claim against the Joint Venture. A preservation order will not be the correct process to follow – factually not in this case. Quantity surveyors’ reports have been completed. The process of compiling the Court papers have started. While pursuing the case Umalusi will initiate a new tender process for the renovation of Building 41. Tender was divided into two phases. Phase one to appoint a Principal Agent (Project Management team) – Evaluation almost completed. Phase two will be the appointment of the construction team, with the assistance of the Principal Agent At the Portfolio Committee meeting held in Cape Town on 27 March 2018, the reportable matter was presented in conjunction with the Annual Performance Plan and Budget for 2018/2019. The Committee made a recommendation regarding a preservation order. Umalusi requested our legal counsel to look into the matter. We would like to inform the Portfolio Committee that a preservation order can only be sought if the service provider is dissipating the funds and assets with the intention of not paying Umalusi. Factually, this is not the case. Our legal counsel has advised Umalusi not to proceed with a preservation order. Close of pleading to be completed before 14 December 2018

Accumulated surplus DBE assisted with the request to retain surpluses of R42 million and has been granted by National Treasury. A revised budget for 2018/19 was submitted to DBE. Projects include: Renovation to Umalusi 41 ICT infrastructure upgrade Enterprise Content Management System EE Plan revision

Irregular expenditure Current year: Building renovation tender not in full compliance with CIDB Regulation R10,989,407 Outcome: Investigated and found no official liable in terms of law for the irregular expenditure. Page 111 note 26 R10,989,407 – Kabini CET JV – Building renovation tender not in full compliance with Construction Industry Development Board (CIDB) Regulation R79,320 –

Irregular expenditure Current year: Renewal of contract without going through a competitive process of sourcing three quotes R79,320 Outcome: A process of progressive disciplinary steps will be followed by management. Page 111 note 26 R10,989,407 – Kabini CET JV – Building renovation tender not in full compliance with Construction Industry Development Board (CIDB) Regulation R79,320 –

Irregular expenditure Condoned by Council: Non-compliance with SCM Regulations R81,709 – (2015/16) Acquired goods without going through a competitive process of sourcing three quotes R140,547– (2016/17) Renewal of contract without going through a competitive process of sourcing three quotes R37,278 – (2016/17) Page 111 note 26 R81,709 – Non-compliance with SCM regulations 2016 – RJ Maintenance R140,547 – Both for printing (IE Communication) – Revised APP for Parliament R56 & (Pink Petals) – Printing for IAEA conference in Cape Town R84 R37,278 – Unwembi website hosting and maintenance cost.

Irregular expenditure Condonation to proceed as per National Treasury Instruction 1 of 2018/2018 dealing with the Irregular Expenditure Framework. SCM issues identified have been recorded and will be monitored in terms of the continuous improvement plan. Page 111 note 26

Related parties Page 108 note 21

Related parties Page 108 In 2015/16 – 17% (level 13 and above)

Expenditure – Top 8 Page 85

Expenditure – Top 8 Page 85

Current Issues and the Way Forward Governance of Umalusi: The external auditors raised the following findings, amongst others, in the management report: • accreditation income recognition; • irregular expenditure monitoring; • contract management monitoring; and • internal controls regarding the management of performance reporting. Management is already in the process of addressing these findings in the current financial year.

Thank you We would like to convey our sincere appreciation to our Council for their support. Thank you very much to the Chairperson of the Portfolio Committee, Ms N Gina, and the Honourable members for this opportunity to present Umalusi’s 2017/18 Annual Report.

Contact details  012 349 1510  0800 000 889  Mafu.Rakometsi@umalusi.org.za Nompumelelo.Phungula@umalusi.org.za info@umalusi.org.za