Higher Education Department going insolvent

The Auditor-General’s (AG) 2016-17 report on Higher Education and Training contains a range of ominous warnings which need urgent attention. The report found that:

  • The Department is carrying substantial liabilities which have significantly increased this year. The AG says that the Department is in “a negative overdraft and negative cash flow” position. Next year the Department might well be unable to continue sustainably.
  • Irregular expenditure reached an unprecedented R929 million in the 2016/17 year, 94% of which has not been investigated yet. Most of this irregular expenditure occurs in the SETAs. One SETA – EWSETA – misspent no less than R290m. and the National Skills Fund misspent R170m.
  • 24 of the 50 TVET Colleges received a qualified, adverse or disclaimed audit opinion.
  • Five TVET Colleges have not yet submitted their Annual Financial Statements – some have not done so since 2014
  • This year, the TVET sector has met only 1 of its 12 targets, and the Community College sector has met none.
  • Most Universities carry enormous levels of student debt, much of which has to be written off. Their situation is likely to have worsened rather than improved in the subsequent two years.

In a separate 2015 study, 10 universities (NWU, WSU, SMU, UNIVEN, UNISA, TUT, CPUT, CUT, MUT and VUT) incurred operating deficits and 4 (NWU, MUT, UNISA and MUT) made annual losses.
This massive, and unwieldy Department has 78 entities reporting directly to it, as well as indirect responsibility for 26 Universities. Managing all of this is too much for it to handle on its current budget and staffing level, as our economy staggers under the burden of ANC failure.
Our students in SETAs, TVETs and universities are being seriously let down as the Department and its institutions decay. The future of higher education looks bleak and this situation must be addressed with urgency.