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ANNUAL PERFORMANCE PLAN AND BUDGET FOR 2014/15

Presentation to the Select Committee on Education and Recreation 9 July 2014. ANNUAL PERFORMANCE PLAN AND BUDGET FOR 2014/15. Presentation Outline. Strategic Overview Budget P rogrammes and Financial Information Programme Plans and Targets for 2014/15 Administration

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ANNUAL PERFORMANCE PLAN AND BUDGET FOR 2014/15

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  1. Presentation to the Select Committee on Education and Recreation 9 July 2014 ANNUAL PERFORMANCE PLAN AND BUDGET FOR 2014/15

  2. Presentation Outline • Strategic Overview • Budget Programmes and Financial Information • Programme Plans and Targets for 2014/15 • Administration • Human Resource Development, Planning and Monitoring Coordination • University Education • Vocational and Continuing Education and Training • Skills Development

  3. Strategic Overview • The Department of Higher Education and Training was established in May 2009 and is responsible for all post-school education and training • Its areas of responsibility were previously located in the former Department of Education, the Department of Labour and the Provincial Departments of Education • The Department is responsible for Outcome 5 of government’s 12 outcomes “A skilled and capable workforce to support an inclusive growth path”

  4. Strategic Overview Vision A South Africa in which we have a differentiated and fully inclusive post-school system that allows all South Africans to access and succeed in relevant post-school education and training, in order to fulfil the economic and social goals of participation in an inclusive economy and society

  5. Strategic Overview Mission To develop capable, well educated and skilled citizens that are able to compete in a sustainable, diversified and knowledge intensive international economy, which meets the developmental goals of our country. The Department will undertake this by: • reducing the skills bottlenecks, especially in priority and scarce skills areas • improving low participation rates in the post-school system • correcting distortions in the shape, size and distribution of access to post-school education and training • improving the quality and efficiency in the system, its sub-systems and institutions

  6. 2014/15 Strategic Goals • Strategic Goal 1: Increase the number of skilled youth by expanding access to education and training for the youth • Strategic Goal 2: Adequately capacitated individual institutions for effective provision or facilitation of all learning • Strategic Goal 3: Increase the number of students successfully entering the labour market upon completion of training • Strategic Goal 4: Expand research, development and innovation capacity for economic growth and social development

  7. 2014/15 Strategic Goals • Strategic Goal 5: A college curriculum that is responsive to the demands of the market place and can transform and adapt quickly and effectively to changing skills needs, with a special emphasis on artisan training • Strategic Goal 6: A credible institutional mechanism for skills planning to support an inclusive economic growth path • Strategic Goal 7: A highly effective, professional, efficient administration informed by good corporate governance practices

  8. Financial Information and Budget Programmes • The financial information of the Department is presented as follows: - An explanation of the Department’s structure, budget and expenditure trends - A summary of the allocations per programme over the 2014 MTEF - A summary per economic classification that covers the key expenditure items - Key budget pressures that are facing the Department - Financial Performance

  9. Structure, Budget and Expenditure Trends • The Department’s budget structure is based on its organisational structure and consist of 5 programmes that represents the Branches in the Department. The programmes are as follows: • Administration • Overall management and administration 2) Human Resource Development, Planning and Monitoring Coordination Provide strategic direction in development, implementation and monitoring of departmental policies and the HRD strategy

  10. Structure, Budget and Expenditure Trends 3) University Education Develop and coordinate policy and regulatory frameworks for an effective and efficient university education system. The branch also provides financial support to universities, NSFAS and National Institutes • Vocational and Continuing Education and Training Plan, develop, evaluate, monitor and maintain national policy, programmes, assessment practices and systems for vocational and continuing education and training including TVET Colleges post-literacy adult education and training 5) Skills Development Promote and monitor the national skills development strategy. Develop a skills development policy and regulatory framework for an effective skills development system

  11. Structure, Budget and Expenditure Trends • The budget also includes “direct charges” which are amounts reflected that constitute a direct commitment from the National Revenue Fund in terms of specific legislative requirements and are not defined as Voted funds such as for the above 5 programmes. The “direct charge” for the Department is the Skills Levy revenue collected by SARS for the SETAs and the NSF • For the 2014 MTEF the Department’s budget (excluding direct charges) increases at an annual average rate of 6.8 %, from R34.3 billion in 2013/14 to R42 billion in 2016/17 • The amount of R36.9 billion for 2014/15 is an increase of R2.5 billion (nominal increase of 7.4%) on the 2013/14 allocation, excluding direct charges

  12. Structure, Budget and Expenditure Trends • Direct charges (the Skills Levies for SETAs and the NSF), increases at an annual average rate of 9.5% from R12.3 billion in 2013/14 to R16.1 billion in 2016/17 • The Department’s budget is dominated by Programme 3: University Education, which represents 83% of the budget in 2014/15. As a result, transfer payments also dominate the budget in terms of the economic classification of expenditure • Normal Departmental services (excluding university transfers, transfers to public entities and other organisations, conditional grants and earmarked funds) represents only 1.5% of the budget

  13. Structure, Budget and Expenditure Trends The transfer payments that the Department is responsible for are as follows:

  14. Structure, Budget and Expenditure Trends • The department received additional allocations over the MTEF period of R76.3 million, R153.3 million and R730.2 million. These additional funds are mainly for the following purposes: - The improvement of conditions of service for staff in the Department and at TVET Colleges (salary increases) the biggest portion of the increase is for the conditions of service at TVET Colleges (R31.1 million in 2014/15, R60 million in 2015/16 and R69 million in 2016/17) - The piloting and roll out of the new student-centred loan administration model at NSFAS

  15. Structure, Budget and Expenditure Trends • NSFAS remains one of the biggest growth items in the budget. The 2014 MTEF allocation reflects an increase from R6.139 billion in 2014/15 to R6.449 billion in 2015/16 and reaches R6.811 billion in 2016/17 • While the function shift is still in process, the funding of TVET Colleges consist of two portions namely the direct subsidies to colleges and the conditional grant that is mainly for compensation of employees

  16. Structure, Budget and Expenditure Trends • The funding of TVET Colleges are as follows:

  17. Structure, Budget and Expenditure Trends The funding of TVET Colleges on a Provincial level for 2014/15 (continues):

  18. Structure, Budget and Expenditure Trends The funding of TVET Colleges on a Provincial level (continue):

  19. 2014 Bursary Allocations

  20. Financial Information

  21. Financial Information

  22. Key Budget Pressures Facing the Department • Department acknowledges the current fiscal constraints of Government • This has numerous challenges in itself, but also has a serious impact on the service delivery requirements of the Department • Department is unable to attain the growth requirements within the PSET system in terms of enrolments, infrastructure development, increased operations and student support • Limitations are placed on Departmental operations due to the capping of compensation of employees and the inability to roll out the new staff establishment as well as regional presence • Institutional monitoring and evaluation is limited to critical areas • Reliance on NSF project and donor support such as the funding of the activities of the National Artisan Moderation Body • An immediate pressure is the management of the TVET and AET function shift as well as cost implications for examination services and the development of the Central Application Service

  23. Financial Performance • The Department managed to remain within its budget since being in operation from 1 April 2010 • Underspending on voted funds were as follows: 2010/11: R 23.848 million 2011/12: R 17.817 million 2012/13: R 3.751 million 2013/14: R 1.931 million • Unspent amounts were committed for specific goods or services and including outstanding claims for examiners and moderators • The Department received unqualified audits to date

  24. Programme 1: Administration • Priorities for 2014/15 • Finalisation of the Department’s Communication strategy and profiling of DHET programmes/projects in the public domain through the communication strategy • Reducing the vacancy rate on funded posts to 10% • Ensuring good governance through institutionalization and implementation of Risk Management strategies by: • - Providing awareness and training sessions on Risk Management • - Developing Risk Management strategy, approve it for implementation • Complete the website improvement project aimed at improving the current look, feel and user-friendliness

  25. Programme 1: Administration

  26. Programme 1: Administration

  27. Programme 1: Administration

  28. Programme 2: HRD, Planning and Monitoring Coordination • FUNCTIONS • Legal and Legislative Services • International Relations • Strategic Coordination Secretarial Support • Information System Co-ordination • Education Management Information Services • Research Coordination, Monitoring and Evaluation • Planning, Monitoring and Evaluation • National Qualifications Framework • Social Inclusion and Equity • Career Development Services • Open and Distance Education

  29. Programme 2: Human Resource Development, Planning and Monitoring Coordination Priorities for 2014/15 • Provide accurate data on skills supply and demand in the country by establishing and maintaining an integrated higher education and training management information system, linking all providers of education and training, and integrating all institutional data into a single system by 2014/15 • Manage and maintain credible planning and budgeting processes for the Department by developing an Annual Performance Plan and performance indicators, and producing quarterly performance progress reports on the implementation of the Department’s strategic and performance plans

  30. Programme 2: Human Resource Development, Planning and Monitoring Coordination • Monitor and support actions needed to implement the statutory functions assigned to the Minister, Director-General and quality councils by the National Qualifications Framework Act (2008) by producing a monitoring and evaluation report, developing a Annual Ministerial Policy Guideline and answering all requests for advice from the South African Qualifications Authority

  31. Programme 2: Human Resource Development, Planning and Monitoring Coordination

  32. Programme 2: Human Resource Development, Planning and Monitoring Coordination

  33. Programme 2: HRD, Planning and Monitoring Coordination

  34. Programme 2: HRD, Planning and Monitoring Coordination • FUNCTION SHIFT • In 2009 the President through a proclamation established the Department of the Basic Education and Department of Higher Education and Training. The Department of Education had to be subsequently disestablished • The proclamation assigned the Higher Education, Further Education and Training (FET), Adult Education and Training (AET) and other related legislation to the Minister of Higher Education and Training • It was clear that the Minister would also be responsible concurrently with MECs of Education in Provinces for FET and AET functions

  35. Programme 2: HRD, Planning and Monitoring Coordination • FUNCTION SHIFT • In 2010 the MECs for Education mandated the Minister to amend legislation to take over full responsibility for the FET and AET functions • The following steps were put in place: • Requesting the Minister of Justice and Constitutional Affairs to begin the process of the amendment of the Constitution • Amending the FET and AET legislation so that all the powers and functions allocated to MECs and Heads of Education Departments be assigned to the Minister and Director-General • Signing of Protocols between the Minister, MECs, DG and Heads of Department with regard to the process of effecting the function shift from Provinces to the Department

  36. Programme 2: HRD, Planning and Monitoring Coordination • FUNCTION SHIFT • The following legislation process was undertaken: • The FET Amendment Act 2012 and the FET Amendment Act 2013 were enacted with transitional measures allowing for a phased implementation of the legislation • The Constitutional Amendment was approved by the National Assembly but was not put to vote • During 2012 and 2013, some of the sections of the amendment acts were brought into effect, that is all sections other than those relating to the employ of lecturers and Provincial staff linked to FET College functions

  37. Programme 2: HRD, Planning and Monitoring Coordination • FUNCTION SHIFT • The following challenges have emerged: • While the major functions have been effected to the MHET and DG, no funds have followed the functions • The function shift was to have been effective from 1 April 2014, but was delayed due to the lack of progress on the identification of funds to follow the function shift • In terms of the Division of Revenue Act, the Minister and Department does not have control over the functions, these are still located within a conditional grant and direct allocations to the Provinces

  38. Programme 2: HRD, Planning and Monitoring Coordination • FUNCTION SHIFT • The following would be the consequential implications for the function shift: • The Department would have to perform many of the FET functions without funds • The Department requires funding in this financial year to be ready to take over the full functions for FET and AET, namely the transfer of 38 000 personnel from Colleges and Provinces to the Department which has currently about 1 000 staff • Implications for the setting up of an administrative system to manage the 38 000 staff, their files, payroll systems and for about 400 office-based personnel, their files, payroll and assets

  39. Programme 2: HRD, Planning and Monitoring Coordination • FUNCTION SHIFT • The Select Committee is requested to note that: • Provinces will have to ensure that they abide by the terms of the Protocols signed and submit the necessary annexures to the protocols which are long overdue • They still have a constitutional responsibility for the functions until the funds related to the functions are identified and transferred • The Minister and DG will be pursuing all necessary steps to ensure that the function shifts with funds (Minister of Finance, MECs, DG of NT, etc.)

  40. Programme 3: University Education

  41. Programme 3: University Education

  42. Programme 3: University Education

  43. Programme 3: University Education Strategic Objective1: Expand the higher education sector in order to increase equitable access with success

  44. Programme 3: University Education

  45. Programme 3: University Education

  46. Programme 3: University Education

  47. Programme 3: University Education Strategic Objective 2: Improve success rates in higher education studies at public institutions and therefore increase graduate outputs by 2014

  48. Programme 3: University Education

  49. Programme 3: University Education

  50. Programme 3: University Education Strategic Objective 4: To develop and enhance the research capacity and productivity of universities

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