Statutory Series: CHE, SAQA & QCTO 2018/19 Annual Reports
Herewith please find the meeting summary and presentation by the Council on Higher Education (CHE) on its annual report for the 2018/2019 financial year. The annual report is also available for download in this article. The presentation as presented by the Council on Higher Education (CHE) can be found below.
Professor Themba Mosia, Chairperson of the CHE, took Members through the presentation and outlined the policy mandate, mission, organisational values and structure of the Council. The CHE services the entire higher education system in terms of its statutory mandate. Its output are services including advisory, regulatory and policy decisions and/or documents, research and other publications, conferences and/or workshops, networks and other knowledge resources.
The Council achieved a clean audit from the Auditor-General South Africa (AGSA) which was the same as the previous year.
As for the reflections in the past year, the previous Council effectively steered the organisation through a difficult period characterised by resource constraint and losing some highly skilled and experienced staff. There were some leadership and governance challenges at a few higher education institutions. With UNIZULU, the CHE closely monitored the development and implementation of the Improvement Plan following the special audit. The resurgence of student protests on student housing and other NSFAS challenges at some universities were a concern to the CHE in terms of the loss of teaching/learning time.
Performance improvements and challenges
The organisation has demonstrated significant improvements in its overall performance in relation to the objectives and targets as set out in its Annual Performance Plan for 2018/19. Key challenges reported included:
- The resurgence of student protests on student housing and other NSFAS challenges in some universities; however, it was evident that these were being addressed;
substantial shortfall in the budget at the beginning of the 2018/19 financial year, but this eased off after the funds rolled over from the previous year were approved by the DHET; - Most of the functions did not have the necessary critical mass of staff commensurate with their respective workloads;
- Staff turnover continued to pose serious challenges to the operations of the organisation – it increased from 13.63% to 14.28% in the current year; and
- There were also resignations at the senior levels of the organisation including a Director, two Senior Managers and a Manager.
Performance highlights
Professor Narend Baijnath, Chief Executive Officer at CHE, presented the performance highlights and reported that the organisation achieved 75.9% of its overall targets. The second phase of the Quality Enhancement Project was successfully implemented, and institutional reports were received from 23 public universities and 21 private higher education institutions. The performance highlight was a 10.4% increase in the number of applications for programme accreditation processed and presented to the HEQC for a final decision. This number increased from 757 to 836 in the current year. Several key projects could not be completed because they only started in August 2018 after approval was granted for the CHE to use funds rolled over from the previous financial year.
Professor Thulaganyo Mothusi, Chief Financial Officer, reported on the financial performance and said that the revenue for the fiscal year 2018/19 was lower by R11 070 562 compared to the prior year. This was a result of a lower budget allocation on the government grant. The expenditure was higher by R1 789 119.00 compared to the previous year. This was due to more spending on employee related costs, and repairs and maintenance.
A deficit of R1 657 196 was realised for the year because total revenue was less than total expenditure, attributable to the exclusion of the rolled over cash surplus from the prior year of R7 707 723.
With regard to variances on the budget, revenue from exchange transactions was higher than budget due to more applications received from private institutions for accreditation.
The R700 460 unspent conditional grant from the DHET for QEP and HELTASA awards. The unspent amount was recorded as contingent liabilities to be used in the current fiscal year. Additional funding of R7.7 million was received in December 2018 as cash surplus funds rolled over from the prior year.
In terms of the AG’s report, the Council received a clean audit and the audited AFS was free from material misstatements. There were no remedial actions required because all the audit findings were corrected and there was consensus with the AG.
The Chairperson said that the Financial Report was incomplete according to him. He expected the overall figure in terms of how much was budgeted, received and how much was spent and on what. There is also income received and it needed to be indicated from where it was received. There was no clarity on what the budget was because it was not indicated on the slide – there is no knowledge on how much the entity is worth. The key cost drivers were not specific in monetary terms – it only indicated the rankings.
He acknowledged the clean audit and that nothing was raised and flagged by the AG. However, this was not a cue to not provide specific information on monies spent.
Discussions and Comments
Mr T Lestie (ANC) welcomed the presentation from the Council. He also commended the Council for achieving a clean audit. On page 15 (performance summary statistics), the performance was reported to be at 75.9% but it shows that there were other areas which were at 50%, with lower percentages on various programmes. He asked the Council to provide some plans in terms of mitigating the lower target achievements.
On financial information, on SCM there was a service provider who paid for employee training while the training was postponed. This raises a flag as it may not be a big issue now, but it may be an issue in the future regarding SCM controls.
Mr Lestie said that the staff loans were also flagged; there is a policy that allows the organisation to give staff Members loans pertaining to equipment and other things. The amount was about R170 000 – how far is the Council in recovering the monies?
Legal fees were higher than the remuneration of the Council itself. He wanted to know why so much money was spent on legal fees. ‘Who was taking the Council to court and what were the challenges’?
Lastly, the CHE was responsible for curriculum transformation. This was evidenced by the current conditions, the emerging of the 4IR (4th Industrial Revolution), industries shredding jobs and slow economic growth. ‘Has the Council put in serious efforts in looking into jobs of the future and what plans have been put in place to advise on the curriculum that will inform or speak to future employment prospects’? Mines are closing in down in various mining towns and people are losing jobs in the banking sector and in retail. Mr Lestie said that he would like to see institutions bringing that curricular that will speak to jobs of the future.
Ms J Mananiso (ANC) wanted to know about the challenges in the SCM function. Secondly, in the summary report, there was an indication of the targets but some of them were not achieved. She asked if there was a plan in place to ensure that those targets that were not achieved would be achieved. ‘Could the personnel be competent to execute their duties in those respective functions’?
On page 15, the targets are not met; are there any plans in place to ensure that targets were met?
Lastly, on the demographics; ‘how many women, young people and people living with disabilities were employed in the organisation’? ‘There are people that resigned in the organisation- is the Council ensuring that it brings young people on board’?
Ms D Sibiya (ANC) wanted to know about the challenges that caused the resignations of the key personnel. On page 16, it was reported that several key projects were not completed because they were started in August 2018. She wanted to know how come those key projects were not completed.
‘On page 18 it is stated that 81% of the approved posts – 42 employees - were appointed out of 52, so what about the other ten’?
She sought some clarity on the overpayments mentioned on page 21. On page 22, on the staff loans, is this about money or was it in the form of equipment.
Mr P Keetse (EFF) concurred with the Chairperson on presentation of the financial information and how it lacked specific detail. The bigger chunk of the focus of the Members was tracking how the money was spent.
Part of the mandate of the CHE is to promote access of students to higher education, so in relation to promoting access to higher institutions; ‘how does the Council promote access’? Perhaps Members needed to be furnished with comprehensive research on how the CHE was planning on expending the capacity of enrolments in higher education institutions. There students who are excelling that still did not have access to higher learning institutions. He wanted more information on the plans of engagement with the Department (DHET).
Limpopo was accused of issuing bogus certificates evidenced in the statement Members received on the Funeral Parlour certificate; he wanted to hear the Council’s view on the bogus course.
Regarding strengthening student governance Mr Keetse asked the Council to appraise Members on the issue that occurred in Unisa where students were registered for the wrong courses. In the same university, there was an allegation of leaked papers that should be addressed because it compromises the credibility of that institution and the module.
Mr Keetse wanted to know about the plans of the CHE to address issues of governance in Unisa. He was uncertain whether the TVET Colleges featured in the mandate of the Council. One way or the other what is being taught in the TVET colleges directly impacted on some of the modules that were taught in universities.
Regarding the phasing out of the national diploma; he wanted to know whether the people that have already applied and where studying towards that qualification would not be disadvantaged.
It was mentioned that student protests were an issue on time management, so has the Council tried to curb the culture of student protests. The main issues pertained to the NSFAS and accommodation. He asked what has been done to address these challenges from the CHE perspective.
Ms N Mkhatshwa (ANC) said that in this administration, Members as well as the Ministry have articulated the importance of levelling out all higher learning institutions.
On page 10 the University of Zululand (Unizulu) was mentioned but she wanted to know about the outcome of the research done in Unizulu.
Ms Mkhatshwa was concerned about the achievement on institutional quality assurance and qualification management and programme reviews.
The Chairperson was uncertain whether it was within the CHE’s mandate to advise the Minister and government generally on the issue of remuneration at universities for Vice Chancellors. This keeps on going up like a runaway train. This was confirmed by the DHET that the highest paid Vice Chancellor was earning in the region of R5 million per annum and in that category of the highest paid VCs; it is the VC of University of Zululand. Now if you compare that university with other universities in terms of research output, student population and staff compliment, it looks like it is irregular. Something needs to be done about this because it is public money.
Secondly, on the notes (page 110 of the Annual Report) to the financial statements; the performance bonus of R1.1 million was not included. He wanted more information on the performance bonus, how it was paid, how it was measured and determined and who took the final decision on the payment of performance bonus and who received the performance bonus.
On the remuneration of the Executive Management, almost all executives received performance bonuses in varying degrees – he wanted to know whether it was only executives that received bonuses. He also sought clarity on the retention amount paid to the Chief Executive Officer.
Responses
Professor Mosia said that the CHE was a scheduled 3A entity, it relied heavily on the fiscus for income and other income was received from services rendered to the private institutions.
On the legal fees, the Report outlined that they were actually less compared to the previous year. The challenges were that the CHE has had a number of legal challenges from some of the private higher education institutions. Some of them offer these programmes but they are profit driven and if our programmes are not profitable for them, they actually go to court. Hence, the legal fees were higher. In the previous year, there was a decline because they realised that this was serious, and they were not winning in court. They operate in that space where they collect the fees for tuition, and they challenge us and the department.
On promoting student access, this is a big area and it cannot be handled by only one entity. The DHET, SAQA and CHE have a critical role to play in this space. The CHE role has to do with access and ensuring that the programmes are credible. SAQA’s role is to ensure that there is a record of this. So the CHE we need to ensure that the students are going into the institutions and offered quality programmes.
In terms of the CHE mandate on curriculum transformation and the 4IR; as the CHE it has engagements amongst the institutions to prepare for this and universities are doing some crucial work in that space. The institutions were engaging on this on an international level as well. There was also a workshop hosted by USAF (Universities South Africa) because all institutions in this space have to respond to the future challenges. So the curriculum transformation discourse was placed firmly on the agenda, even during the FeesMustFAll campaign, students pushed for this.
On TVET Colleges, the White Paper that we have on post school education and training; there was a long discussion with Minister Pandor on this and she was clear that the CHE should focus on universities and other QCs in that space would deal with TVETs.
On the governance challenges in Unisa (University of South Africa), normally the CHE does not go to universities when it hears information in the media. However, in terms of Unisa the CHE had a discussion in its EXCO to try and assist in resolving the matters.
The CHE has conducted a special audit in the University of Zululand and the CHE realised that there were a lot of challenges. The findings and recommendations made about a year ago have not been met. In our meeting three ago we finalised a report that the Minister should look into with the DHET for further improvement. There are a lot of challenges crippling the institution and the CHE could furnish that report to the Committee. There are also certain limitations; when we first made recommendations that there were serious challenges in Zululand.
The Chairperson indicated that the Committee would ask the Minister to furnish that report.
In terms of the mandate, the CHE can advise the Minister on various issues. On the remuneration of the Executives, the CHE has not yet gotten into that space, but it can provide proactive advice to the Minister on that. The DHET has a role to play there. Members would recall that with the FEESMUSTFALL campaign, one of the challenges was the regulation of fees in universities. The DHET was now working with universities to try and address that but it is the university councils that set the fees.
The CHE has not yet gotten into the remuneration of executives, but it can do so and put together a team of experts.
Everyone in the institution is entitled to a bonus, subject to the availability of funds. We have not had that, but it was only in the current year. The HR and EXCO Council reviews this and then considers various records.
On the retention allowance, this was an approval that was received from the Minister of Finance which is subject to the availability of funds. This was introduced because the CHE was losing a number of critical and important skills.
The DHET Official commented on the remuneration of the executives and VCs and said that this matter was within the prerogative of the Councils in the institutions themselves. The DHET does not manage any HR related matters within the institutions. This is an issue and we are hoping to look at some research on this matter and correct the benchmarks. Universities are big institutions and there is no standard set out for remuneration.
The Chairperson suggested that Universities South Africa (Usaf) should not be the institution tasked with looking into this matter because it would be a conflict of interest. If it means that a Bill would be introduced through this committee, then so be it. This is a serious matter and it needs serious attention.
On the targets that were not met Mr Baijnath said that when the planning is done for the performance, it is done six to nine months prior. During the performance, adjustments may be made on some of the targets that were set. When there are projections on the accreditation of applications; there is usually no certainty on that because the impetus comes from the institutions. So often times, we are not in control of that so during the course of the year the governance structure would make decisions to make those adjustments. In some instances, resources would not need to be shifted from one programme to another.
The change of the curriculum is happening at a very higher level where institutions were now looking into factoring in the Fourth Industrial Revolution in the curriculum. The concerns around job threats are being taken seriously at every level.
On the University of Venda audit; when a pilot audit happens, the preparations towards the audit takes at least six months and the institutions must subject itself to it and conduct a self-evaluating process which takes about six months to a year. So the institutions made the commitment but the person who was driving it suffered a personal calamity and then went silent afterwards as well as the Acting Vice Chancellor. At the time the new Vice Chancellor was appointed the institution was approached but then it was abandoned because there was significant internal instability within the institution.
The lack of promotional activities has to do with several departures of senior or mid-level staff. However, a retention strategy has been introduced in the organisation to try and circumvent the departure of officials that have substantial experience.
In terms of the gender balance, if Members looked at the spread in the Report; there is generally an equitable spread. In terms of disability, on page 78, CHE is much thinner in that regard. However, in the recruitment processes these received attention and in the new recruitment processes and intake that would be considered.
Professor Mothusi said that for the year under review, CHE received about R59 million and the general expenditure issues were in the annual report. On the training paid in advance, the SCM processes are sound and the training that takes place is that one paid in advance and then the training takes place.
On overpayments, this amount will be credited to the CHE in the next financial year and this year CHE would not pay.
On staff loans, the CHE is buying the laptops on behalf of employees, so the staff loan was for buying the laptops and the money was recovered on a monthly basis. The payment arrangements are within the respective financial year, there are no roll-overs from the previous financial years.
Mr Selby Ripinga, Member of the Council spoke on the issue of compliance and that this was important. The CHE is a peer-driven institution, depending on university academics. He said he believed in 100% performance compliance in the APP. We would like to see the CHE going beyond complying and having an impact nationally and internationally. Third stream funding was under consideration.
The Chairperson reiterated that something needed to be done about the remuneration of Vice-Chancellors. Universities are quite complex and big institutions but they are not bigger than the country but one has the Executive of this country on our side so one cannot keep hearing about their autonomy and how big these universities are. The fact remains that remuneration of executives in universities needs to be regulated.
Source:
Content available under a Creative Commons Attribution 3.0 South Africa license.
Source: Higher Education, Science and Technology: Committee Meeting of the National Assembly held on the 16th of October 2019
Chairperson: Ms N Mkhatshwa (ANC)