1. ANNUAL REPORT 2014/15 Department of Higher Education and Training Presentation to the Portfolio Committee on Higher Education and Training 14 October 2015

2. Presentation Outline 2 Strategic Overview: 2014/15 1.Programme Performance on Predetermined Objectives Achievements Non achievement of targets 2.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

3. Service Delivery Overview 3 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

4. 4 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

5. 5 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 Service Delivery Overview

6. 6 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 2015Targets Achieved0 Not achieved3 Total Targets3 Programme 1: Administration

7. 7 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 Programme 1: Administration

8. Programme 2: Human Resource Development, Planning and Monitoring Coordination 8 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 2015Targets Achieved2 Not achieved1 Total Targets3

9. 9 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

10. 10 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 2: Human Resource Development, Planning and Monitoring Coordination

11. Programme 3: University Education 11 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 2015Targets Achieved22 Not achieved4 Total Targets26

12. 12 573 698 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

13. 13 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 3: University Education

14. 14 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 2015Targets Achieved1 Not achieved4 Total Targets5 Programme 4: Vocational and Continuing Education and Training

15. 15 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

16. 16 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 TargetsPerformance NC(V) L4: 57%34.4% N1-N3: 50%59.5% N6: 50%42.7% Programme 4: Vocational and Continuing Education and Training

17. 17 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 TargetsPerformance 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

18. 18 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 TargetsPerformance NC(V) L4: 59%39% N1-N3: 52%43% N4-N6: 52%43% Programme 4: Vocational and Continuing Education and Training

19. 19 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

20. 20 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 Programme 4: Vocational and Continuing Education and Training

21. Programme 5: Skills Development 21 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 2013Targets Achieved6 Not achieved0 Total Targets6

22. 22 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 Programme 5: Skills Development

23. Financial Information 23 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

24. Report of the Accounting Officer 24 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

25. Report of the Audit Committee 25 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

26. Report of the Auditor-General 26 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

27. 27 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 Report of the Auditor-General

28. Financial Statements: Appropriation Statement 28 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 IncludingVoted Funds36 866 681 Direct Charges13 838 798 Actual Expenditure:50 704 319 IncludingVoted Funds36 865 521 Direct Charges13 838 798 Variance (On Voted funds only): 1 160 Detailed Information per Programme and Economic Classification from page 163 to 184 of the Annual Report

29. 29 Summary of variance of R1.160 million:R’000 Per Programme:1 160 Administration264 HRD, Planning and Monitoring Coordination828 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 Financial Statements: Appropriation Statement

30. Action Plan to improve Audit Findings 30 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

31. Financial Statements: Impact on Operations 31 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.

32. 32 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 Financial Statements: Impact on Operations

33. Thank You 33