PORTFOLIO COMMITTEE MEETING PRESENTATION OF CHE ANNUAL REPORT FOR THE YEAR October 2015

SECTION 1 INTRODUCTION & SCENE SETTING CHAIRPERSON OF COUNCIL

GOVERNING LEGISLATION  Higher Education Act 101 of 1997 (as amended) established CHE as a juristic body & spelt out its mandate  National Qualifications Act 67 of 2008 declared CHE the Quality Council for Higher Education & outlined its functions in this regard  Public Finance Management Act 1 of 1999 (as amended) lists CHE as a Schedule 3A public entity: bound to comply with provisions in Chapter 6 of the Act

GOVERNANCE STRUCTURE  Executive Authority: Minister of Higher Education & Training  Accounting Authority: Council - appointed by the Minister - comprises: chairperson, 13 ordinary members, 6 non-voting members, & 3 co-opted members - chairperson is appointed for a 5-year term - ordinary members appointed for a 3-year term, for a maximum of 2 terms

COMMITTEES OF COUNCIL 1.Executive Committee of Council (EXCO) 2.Audit & Risk Committee (ARC) 3.Higher Education Quality Committee (HEQC) 4.Human Resources & Remuneration Committee (HRRC) 5.Monitoring & Evaluation Committee (MEC)

EXECUTIVE COMMITTEE (EXCO)  Statutory Committee in terms of Section 13 of HE Act  Council establishes EXCO & determines its functions  EXCO is chaired by Chairperson of Council  Meets 4 times a year  Decision of EXCO must be regarded as decision of Council, unless revoked by Council  Anything done in consequence of decision of EXCO before it is revoked by Council is not invalid

AUDIT & RISK COMMITTEE  Statutory Committee in terms of Section 51 of PFMA & Treasury Regulations  As per Treasury Regulations, Chairperson of ARC may not be member of Council, employee of CHE or political office bearer  Members are appointed by Council for a 3-Year term, renewable  Meets 4 times a year

HE QUALITY COMMITTEE (HEQC)  Statutory permanent Committee in terms of Section 7(3) of the HE Act  Main purpose: to perform the quality assurance & promotion functions of CHE in terms of HE Act & NQF Act  Members are appointed by Council for 3-Year term, renewable up to 2 terms  2 members of Council serve on HEQC & 1 of the 2 serves as Chairperson of HEQC  9 meetings & 1 workshop are scheduled per year

HUMAN RESOURCES & REMUNERATION COMMITTEE (HRRC)  Established to assist Council in addressing HR & remuneration issues with requisite expertise  Members are appointed by Council for 3-Year term, renewable  Meets at least twice a year

MONITORING & EVALUATION COMMITTEE (MEC)  Established to provide guidance & support in developing & strengthening the work of the M&E Directorate  Only Council members serve on MEC  Term of MEC is linked to the term of Council  MEC meets twice a year

NUMBER OF MEETINGS IN 2014 COUNCIL4 EXCO2 ARC5 HEQC7 HRRC2 MEC2

AUDIT PROCESS & OUTCOME  Conducted by auditors from the AG’s Office  Scope of the audit: - financial statements - reported performance information - compliance with specific requirements of key applicable legislation  Process - engagement letter: scope, roles & responsibilities - requested information provided - information tested by auditors

AUDIT PROCESS & OUTCOME (continued)  Process (continued) - on-site verification undertaken by auditors - explanations provided to auditors, where required - provisional findings prepared & discussed with Management - final management report issued to Council  Outcome of 2014/15 audit: clean audit

REFLECTION ON PAST YEAR: COUNCIL MATTERS  New Council was appointed in December 2014  Previous Council underwent an independent external evaluation of its performance  The evaluation found that there was: - regular attendance of meetings - robust engagements in meetings - quality advice to the Minister - meaningful engagement with the higher education sector

REFLECTION ON PAST YEAR: STRATEGIC MATTERS  Implementation of priority areas identified at the 2014 strategy workshop of Council - strengthening CHE’s relationship with key stakeholders: DHET & other QCs - increasing level of engagement with HEIs through quality enhancement & promotion, & through consultation process on extended curriculum proposal - providing advice on policy-related matters -

REFLECTION ON PAST YEAR: RE-STRUCTURING  Council presided over organisational restructuring process to improve operational effectiveness & efficiency - merging of National Reviews & Standards Development Directorates - relocating the unit responsible for quality assurance & promotion coordination, & capacity development to the CEO’s Office

REFLECTION ON PAST YEAR: NOTABLE ACHIEVEMENTS  Administrative, financial & governance systems continued on a sound footing  QEP & joint CHE/HELTASA initiatives made important contribution to improvement of quality in teaching & learning  Assistance was provided to HEIs that are busy with implementing institutional audit recommendations  Record numbers of new applications for accreditation were processed

REFLECTION ON PAST YEAR: NOTABLE ACHIEVEMENTS (contd)  HEQSF-alignment project neared its completion  Increased activity in international arena: - southern African regional QA network - Scottish Quality Assurance Agency - international collaborative projects - participation in conferences - international speakers at CHE events  Achieved a clean audit

CHALLENGES  Projects dependent on external experts in the sector who occupy fulltime jobs in the sector: this sometimes results in delays in completion of projects  Cycle of most projects not in sync with financial year: some projects are initiated in one year but implemented in another - roll-over of funds thus gives wrong impression of under-utilisation funds  Issues surrounding closure of first cycle audits at some institutions  Legal challenges to CHE/ HEQC decisions  Attraction & retention of competent staff

SECTION 2 PERFORMANCE HIGHLIGHTS CHIEF EXECUTIVE OFFICER

PERFORMANCE OVERVIEW  There were 23 performance indicators & their corresponding targets in the 2014/15 APP  CHE achieved &/or exceeded targets on 60.9% of the indicators - achieved targets on 43.5% of the indicators - exceeded targets on 17.4% of the indicators  Overall, this is above average performance  Explanations were provided for all the targets that were not achieved

TARGETS NOT ACHIEVED  Development of 2 templates for qualification types & field/subject specific standards  Increasing to 75%, the proportion of re-accreditation programmes of private HEIs that are adjudicated on by the HEQC within 18 months after receiving payment  Finalisation of National Report on the Review of the Bachelor of Social Work programme  Establishment of criteria for the LLB review

TARGETS NOT ACHIEVED (continued)  Holding 3 quality assurance fora: one each for public universities, private HEIs & professional councils  Development & implementation of a skills development plan  Filling of vacant position within 3 months  Achieve 25% in the implementation of employment equity strategy & plan

KEY OUTPUTS: ADVICE  Draft Policy & Procedures for Measurement of Research Outputs of Public HEIs: advice on request  Draft Articulation Policy: advice on request  Reform of the Undergraduate Curriculum: advice on CHE’s own initiative

KEY OUTPUTS: MONITORING & EVALUATION  VitalStats 2012 (the third in the annual series)  Framework for a Private Higher Education Management Information System  Distance Higher Education Programmes in a Digital Era: Good Practice Guide  ICT Colloquium: Moving the Teaching & Learning System in South African Higher Education into the Digitally-Mediated Era

KEY OUTPUTS: HEQSF-ALIGNMENT  1268 applications for Category B alignment processed & adjudicated on by the HEQC  3781 applications for Category C alignment processed  261 applications for title changes processed

KEY OUTPUTS: STANDARDS DEVELOPMENT  6 draft pilot qualification standards completed: - Bachelor of Social Work - Master of Business Administration (MBA) - Bachelor of Laws (LLB) - Bachelor of Engineering - Bachelor of Science in Engineering - Diploma in Engineering

KEY OUTPUTS: DATABASE OF LEARNER ACHIEVEMENTS  Higher Education Quality Committee Information System (HEQCIS) is in place, up-dated on a regular basis  HEQIC had data from 99% of private HEIs in 2014/15

KEY OUTPUTS: INSTITUTIONAL AUDITS  2 institutional audits from the first cycle were finalised & closed  Content Analysis of the Baseline Institutional Submissions for Phase 1 of the QEP: a report was published  QEP DVCs’ Forum was established  4 QEP institutional workshops were organised

KEY OUTPUTS: ACCREDITATION  A total of 427 new programmes were accredited, broken down as follows: - 46 at NQF level at NQF level at NQF level at NQF level at NQF level at NQF level 10  29 existing programmes were re-accredited

KEY OUTPUTS: NATIONAAL REVIEWS  Findings & recommendations of the National Reviews Committee on the national review of the Bachelor of Social Work programmes were finalised  Recommendations were approved by HEQC. Of the Social Work programmes from 16 institutions: - 3 were accredited fully - 8 were accredited with conditions - 5 were placed on notice of withdrawal of accreditation

KEY OUTPUTS: PROMOTION & CAPACITY DEVELOPMENT  2 QA fora were organised  National Excellence in Teaching Awards were organised jointly with HELTASA  A survey on the provision and management of short courses by HEIs was conducted, & its report was finalised  Southern African regional QA network: participated in the events & initiatives leading to the establishment of this regional network

REFLECTION ON PERFORMANCE  A substantial proportion of projects are not completed within planned time frames, which impacts negatively on achievement of annual performance targets  Reasons: - lack of sufficient capacity in some directorates - high staff turnover disrupts progress of projects - some projects heavily rely on peer experts from the sector who deliver at their own pace

REFLECTION ON PERFORMANCE  CHE APPs are normally scoped to cover all areas of the legislated mandate, but not in relation to capacity & resources available: mismatch between performance requirements & capacity/resources  Lack of capacity constrains ability to do the required rigour in setting performance targets

EMERGENT ISSUES  Capacity/resource considerations are necessary in scoping APP & setting performance targets  Identifying priority areas from the ever-increasing demands on CHE would be essential in developing APPs for subsequent years  Addressing staff turnover is critical  Relook at the CHE’s business model: proportion of out-sourced to in-sourced activities; formal performance based contracts for peers; etc

EMERGENT ISSUES (continued)  Relook at the CHE structure: possibility of shifting from rigid directorate-based structure, to matrix structure in order to increase efficiencies in the use of personnel  Relook at ways to obtain better organisational performance results from the implementation of the HR performance management system & competency framework

RESOURCING FOR OPTIMAL ORGANISATIONAL PERFORMANCE  Develop a case for increasing level of government funding commensurate with the growing demands on the CHE  Explore other sources of funding to supplement government funding  Open a discourse on how best to deal with effects of time differences between academic year & financial year: CHE’s projects are mostly planned with reference to academic calendar. The outcome of the discourse could help in addressing the issue of the roll-over of funds roll-over of funds

SECTION 3 CHIEF FINANCIAL OFFICER

STATEMENT OF FINANCIAL POSITION AS AT 31 ST MARCH 2015

STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 31 ST MARCH 2015

CASH FLOW STATEMENT FOR THE YEAR ENDED 31 ST MARCH 2015

CASH BUDGET BASIS FOR THE YEAR ENDED 31 ST MARCH 2015 STATEMENT OF COMPAIRSON OF BUDGET AND ACTUAL AMOUNTS RevenueAMOUNT RevenueR Approved roll over of fundsR Total RevenueR Less total expenditureR SurplusR Plus non cash items: Depreciation and Amortisation R Bad debts written offR Funds requested for roll over R

REASONS FOR BUDGET DIFFERENCES  Revenue from exchange transactions was higher than budget due to more applications for accreditation being received from private institutions.  Revenue from non-exchange transaction is lower than budget due to Standards developments pilot phase only being completed at the end of the current year. The late completion of the pilot phase meant the Directorate was not operating at full capacity. This Directorate has now been merged with National reviews in order to effectively carry out the CHE mandate.  Employee costs are under budget due to vacancies that are in the organogram being unfilled during the financial year.  General expenses were under budget due to delayed projects in directorates. These projects have been carried forward into the new financial year and completion is expected in the new financial year.

REPORT OF THE AG  Clean audit report received.  The audit findings identified were as follows: SBD4s not completed prior to transaction taking place, but the SBD4 were obtained subsequently and there were no conflicts identified; SBD4s not completed prior to transaction taking place, but the SBD4 were obtained subsequently and there were no conflicts identified; Employee who performed remunerative without approval. However the entity which the employee transacted with is not connected to CHE; Employee who performed remunerative without approval. However the entity which the employee transacted with is not connected to CHE; One contract was awarded to bidders who did not declare on whether they are employed by the state; and Incorrect disclosure of Trade Receivables as Prepayments. One contract was awarded to bidders who did not declare on whether they are employed by the state; and Incorrect disclosure of Trade Receivables as Prepayments.  A strategic audit action has been developed to address all audit findings identified by the AG and progress is monitored by the Audit and Risk Committee.

RECOMMENDATIONS Portfolio Committee Members to note the Annual Report and its Annual Financial Statements for the year 2014/2015.

THANK YOU