Budgetary review and recommendations report Department of Basic Education 03 October 2017 1
Reputation promise The Auditor-General of South Africa (AGSA) has a constitutional mandate and, as the supreme audit institution (SAI) of South Africa, exists to strengthen our country s democracy by enabling oversight, accountability and governance in the public sector through auditing, thereby building public confidence. 2 2
Role of the AGSA in the reporting process Our role as the AGSA is to reflect on the audit work performed to assist the portfolio committee in its oversight role of assessing the performance of the entities taking into consideration the objective of the committee to produce a Budgetary review and recommendations report (BRRR). 3 3
ANNUAL PERFORMANCE PLAN (APP) TARGETS PER APP 4
AGSA theme for the current year to improve outcomes Plan-Do-Check-Act Cycle, also the Deming cycle, courtesy of the International Organization for Standardization 5
PLAN DO ACT CHECK 6
1 The AGSA s Public Audit Act Promise and Focus 7
Our annual audits examine three areas 8
The AGSA expresses the following different audit opinions: Unqualified opinion with no findings (clean audit) Financially unqualified opinion with findings Qualified opinion Adverse opinion Disclaimed opinion Auditee: Credible and reliable financial statements that are free of material misstatements Useful and reliable performance as measured against predetermined objectives complied with key legislation Auditee: Credible and reliable financial statements that are free of material misstatements Did not produce useful and reliable performance as measured against predetermined objectives Did not complied with key legislation Auditee: had material misstatements on specific areas in their financial statements, which could not be corrected before the financial statements were published. Auditee: had the same challenges as those with qualified opinions but, in addition, they had so many material misstatements in their financial statements that we disagreed with almost all the amounts and disclosures in the financial statements Auditee: had the same challenges as those with qualified opinions but, in addition, they could not provide us with evidence for most of the amounts and disclosures reported in the financial statements, and we were unable to conclude or express an opinion on the credibility of their financial statements 9 9
2 The 2016-17 audit outcomes and key messages 10
Change in audit outcomes over 3 years (DBE, SACE,UMA LUSI) Three year trend Overall change in audit outcomes (DBE, SACE, UMAL USI) 1 To improve/maintain the overall audit 2. compliance with 3 outcomes, financial statements processes, key legislation and. The portfolio s overall outcomes remained unchanged from the prior year with all entities achieving unqualified audit outcomes with findings. The outcomes can be improved by: Implement monthly disciplines of record keeping, reconciling and reviewing transactions to ensure the credibility and completeness of monthly financial and performance information. Enhance the skills and resources in the infrastructure and internal audit units to address capacity challenges (DBE). Monitoring of progress in implementing the action plans on an ongoing basis to ensure that milestones set and deliverables are achieved. With no material findings (DBE, SACE, UMAL USI) 2016-17 2015-16 2014-15 Unqualified with no findings Unqualified with findings Qualified with findings Adverse with findings Disclaimed with finding Audits outstanding With material findings Three year trend Compliance with key legislation (DBE, SACE, UMALUS I) (DBE, SACE, UMALUS I) (DBE, SACE, UMALUS I) 2016-17 2015-16 2014-15 Non-compliance by the DBE and its entities are an indication of deficiencies in monitoring compliance with legislative requirements in the areas of financial management and SCM. Monthly and quarterly management reviews were also not adequate at the DBE and SACE to ensure credible reporting. At the DBE, the controls can be strengthened by monitoring and enforcing compliance with procurement processes, when appointing implementing agents and ensuring that the procurement processes followed by implementing agents are aligned to the department s SCM policies. Outstanding audits No APR/ late submitted Three-year trend Quality of annual performance plans (DBE ) (SAC E UMA LUSI) (SAC E) (DBE, UMA LUSI) (UMA LUSI) (DBE, SAC E) 2016-17 2015-16 2014-15 ---------------------------------------------------- Three year trend Quality of submitted annual performance reports (DBE, SACE, UMAL USI)). performance planning and reporting must be improved by. An annual performance report (APR) submitted for auditing contained material misstatements, this was due to inadequate management reviews when performance information was reported quarterly and in the annual report. The performance planning and reporting can be improved by: Reconciling the reported performance results to verifiable evidence and against the technical indicator descriptions. Implementing proper record keeping in a timely manner to ensure complete, relevant and accurate information. Developing and monitoring of action plans to address control deficiencies identified relating to the planning, credibility and completeness of the performance reported. 11 (UMA LUSI, SACE ) (DBE) 11 (UMA LUSI) (DBE, SACE ) 2016-17 2015-16 2014-15 11
Third level Second level First level DBE Umalusi SACE Change in audit outcomes over 3 years - continued Status of Key controls Senior management Assurance providers per level All 4 Good Concerning Intervention required providing attention to the key controls by The overall stagnation in key controls was mainly due to the fact that action plans to address deficiencies reported are developed but there is inadequate monitoring of the implementation of these which results in the recurring audit findings. There was lack of consequence management as similar deficiencies relating to unsatisfactory performance and transgressions were identified.. Interventions are still required in order to improve the current status of key controls relating to: Daily financial management and performance management disciplines. Coordination between the various departments within the education sector and principal actors and oversight of deliverables by implementing agents must be prioritised to ensure credible financial, performance and compliance reporting. Monitoring and evaluation processes The monitoring and evaluation of all information received internally and externally must be thoroughly reviewed, monitored and evaluated to ensure it is credible and reliable. Internal audit can be used to give assurance on credible information. 2016-17 PFMA LEADERSHIP - Effective leadership - Oversight responsibility - Effective HR management - Policies and procedures - Audit Action plans - ICT governance FINANCIAL AND PERFORMANCE MANAGEMENT - Proper record keeping - Daily and monthly controls - Regular, accurate & complete finanial and - Review and monitor compliance - Design and Implement IT controls GOVERNANCE - Risk management - Internal Audit - Audit committee Improved Stagnant Regressed Accounting officer/authorit y Executive authority ----------------------------------------------- Internal UMALUS audit unit I -- 5 Audit committee Portfolio committee SACE, UMALUS I SACE, DBE the key role players as part of their role in combined assurance All 12 DBE ---------------------------------------------- Provides assuranc e Provides some assurance Provides limited/ no assurance Vacancy Not establishe d DBE Despite senior management being constantly informed on the importance of proper record keeping; it was still a challenge to obtain information relating to infrastructure and performance reporting at DBE. The Director-General provided some assurance mainly because he had adequate insight into the risks and internal control deficiencies; however, the accounting officer did not ensure that action plans were implemented adequately to ensure daily/weekly/monthly disciplines and reconciliations that will ensure accurate and complete financial statements and performance reports, and compliance. The Minister was assessed as providing some assurance as there are number of recurring findings from the prior financial years. The audit committee operated effectively and executed their responsibilities as required during the year, however their effectiveness and ability to influence an improved audit outcome was negatively impacted by internal audit not functioning as intended. SACE and Umalusi Senior management provided some assurance due to material corrections that was required on annual performance report and financial statements submitted. 12
3 Performance management linked to programmes/ objectives tested & key projects audited 13
Management and delivery on key programmes spending, performance and reporting (DBE) Programme Budget spent Materia l misstat ements Unauthoris ed, irregular and fruitless and wasteful Indicator Findings on material indicators Not useful Not reliable Adjusted Achieveme nt of targets from performan ce report CURRICULUM POLICY, SUPPORT AND MONITORING 97.27% Yes Kha Ri Gude: IE R58 million FEW R 11 million Number of learners enrolling for the Kha Ri Gude Literacy Campaign in 2016/17 X 11 out of 14 targets PLANNING, INFORMATION AND ASSESSMENT 93.05% Yes IE R303 million 4.3.1 Number of new schools built and completed through ASIDI³ 4.3.2 Number of schools provided with sanitation facilities through ASIDI UE Unauthorised expenditure IE Irregular expenditure FWE Fruitless and wasteful X X 5 out of 13 targets expenditure Good Of concern Intervention required 14
Management and delivery on key programmes spending, performance and reporting (DBE) (continued ) Programme Budget spent Material misstat ements Unauthorise d, irregular and fruitless and wasteful Indicator Findings on material indicators Not useful Not reliable Adjust ed Achievement of targets from performance report PLANNING, INFORMATION AND ASSESSMENT (Cont ) 93.05% Yes Yes No 4.3.3 Number of schools provided with water through ASIDI 4.3.4 Number of schools provided with electricity through ASIDI 4.4.2 Percentage of learners from public schools that are successfully uploaded onto LURITS X X X 5 out of 13 targets UE Unauthorised expenditure IE Irregular expenditure FWE Fruitless and wasteful expenditure Good Of concern Intervention required 15
Management and delivery on key programmes spending, performance and reporting (DBE) (continued ) Programme Budge t spent Material misstat ements Unauthorise d, irregular and fruitless and wasteful Indicator Findings on material indicators Not useful Not reliable Adjust ed Achievement of targets from performance report Educational Enrichment Services 99.86 % No FWE - No findings on material indicators reported. 1 out of 3 targets UE Unauthorised expenditure IE Irregular expenditure FWE Fruitless and wasteful expenditure Good Of concern Intervention required 16
Key projects selected for audit The objective of ASIDI is to eradicate the Basic Safety Norms backlog in schools without water, sanitation and electricity and to replace those schools constructed from inappropriate material (mud, plankie, asbestos) to contribute towards levels of optimum learning and teaching. The Schools Infrastructure Backlog Grant (SIBG) funds the ASIDI portfolio. MTSF allocated budget = R1.979 billion - Actual Spending = R1.049 billion (53%). Material underspending of R930 million The underspending is due to payments in respect of ASIDI projects. The process of rationalisation for schools had an impact on the spending trends for the ASIDI project. Also significant matters identified with implementing agents contributed to projects not being finalised or delayed significantly Budget vs Spending Unqualified with finding: Controls were not in place with regard to the daily and monthly processing of transactions relating to the transfer of finalised ASIDI construction projects from work in progress to the immovable asset register which resulted in errors in the immovable asset register. Procurement and Contract Management: Findings included the following: 1. Irregular expenditure as a result of noncompliance by implementing agents. 2. Expired MoAs with implementing agents not approved/ extended as required. 3. Expenditure incurred exceeded the contract values for which variation Financial Management orders had to be applied for. The variation orders approved in this regard exceeded 20% of the contract values. 4. Inadequate project management resulted in project timeline delays of between 2 24 months Compliance Material adjustments were noted in the in the infrastructure indicators (completed schools, water, sanitation and electricity). Furthermore it was noted that none of these targets were achieved in the reported annual performance report. Predetermine Objective No progress had been made on the two sites visited in the prior year in KwaZulu-Natal. The projects had been dormant since the previous audit in 2016, and the contractors had abandoned the project. In addition, quality issues were noted during site visits to both of these projects. Quality issues were also noted in the other three provinces audited. Contractors were terminated for eight of the 20 projects in the Eastern Cape, which impacted on delays as well as the cost of projects. One of the reasons given for the terminations was that some contractors cancelled their contract due to financial analysis and under costing. In some cases, the cost of the replacement contractor was more than the original contract. Also, in most cases the total cost of the projects was more than the original value. Delays of between four and 14 months were experienced on all projects in Mpumalanga. While delays of between three and 22 months were experienced on all projects in Eastern Cape. Some of the reasons given for these delays were as follows: Additional work carried out on site/scope changes Inability to obtain materials Not all information requested for audit purposes was submitted by the department. A limitation of scope was experienced in all four provinces audited, with the majority of the outstanding information being for Kwa-Zulu Natal and Limpopo. The department did not effectively maintain their archiving system, which resulted in some procedures not being performed. 2016-17 PFMA No material findings reported Material 17 findings reported
The aim of Kha Ri Gude is to empower (skills development) socially disadvantaged people to become selfreliant and to be able to participate more effectively in the economy and society. The Kha Ri Gude Literacy Campaign is informed by the Constitution of South Africa, which states that Everyone has the right to a basic education, including adult basic education (Chapter 2, Clause 29, 1a). According to Statistics SA (2001), there were 9.6 million illiterate adults in South Africa above the age of 15. Of these, 4.7 million, including people living with disabilities, were illiterate and innumerate in one of the 11 official languages. - MTSF allocated budget = R 384 million - Actual Spending = R358 million - (93%). The underspending on this programme is due to the low number of volunteers employed in the provinces as a result of low numbers of learners registered or the 2016 campaign. Budget vs Spending Unqualified with finding: Oversight over service providers entrusted with the payments of stipends to monitors of the Kha Ri Gude projectto ensure that classes take place and that learners exist was not adequately monitored to ensure compliance with policies and procedures and therefore did not prevent and detect payments of stipends to tutors for teaching deceased learners. Oversight by the department did not detect the timely verification with the department of Home Affairs whether learners were deceased for which tutors received stipends for Financial Management Procurement and Contract Management: Based on the significance of the findings identified when quantified, it was agreed that the department disclose the management fee charged by SAB&T of R16million as irregular expenditure for the current and prior year due to proper SCM not being followed in appointment of SAB&T the service provider Compliance A significant material adjustment was made to the numbers reported after eliminating fraudulent learners entered into the programme. It was identified some learners that entered the programme already completed grade 12. Due to this R11million was disclosed as fruitless and wasteful expenditure in the financials Predetermine Objective The lack of oversight by the department resulted in a number of fictitious learners being entered into the programme. The programme is indented for people that cannot read and write, however, as an example, the audit note that learners that have matric were registered on the programme resulting in material overpayment of stipends and the learner numbers reported. Instances of potential fraud noted where learners with matric were registered as Kha Ri Gude learners despite the programme intended for learners to acquire the basic skills of literacy. Challenges noted to confirm existence and physical attendance of learners, VEs, coordinators and supervisors, Challenges noted to confirm whether actual training was taking place, and Material findings noted with regard to the reliable reporting of targets achieved for the Kha Ri Gude indicator No material findings reported Material 18 findings reported
Improvement in financial health Material uncertainty exists whether 0% of auditees can continue to operate in future 2016-17 2015-16 2014-15 1 (DBE) 1 (DBE) 1 (DBE) Key concerns identified Included in the net assets of the department is finalised schools to the value of R5.5billion that have not been transferred to custodian departments in terms of section 42 of the PFMA The commitments disclosed as per note 20 increased by R2.93 billion from R3 billion in the 2015-16 financial year to R5.93 billion in the 2016-17 financial year. It is therefore necessary that the department formalise the plans for the future implementation of the ASIDI programme so that resources (financial and human) can be utilised appropriately. There was material underspending of the budget during the current and prior year. The department indicated that it was as a result of the rationalisation and mergers of schools. The latter will have to be prioritised as it is necessary for determination of future commitments to the department. Debt collection particularly for the recovery of contingent assets is long outstanding and will need to be followed up. The processes with regard to construction guarantees will need to be evaluated especially if the commitments approved and not contracted are realised Two or less unfavourable indicators More than two unfavourable indicators Significant doubt that operations can continue in future and/or auditee received a disclaimed or adverse opinion, which meant that the financial statements were not reliable enough for analyses 19
Movement on the quality of financial statements, annual performance reports and compliance Audit of financial statements Findings on annual performance reports Findings on compliance with key legislation 100% (3) 100% (DBE, SACE, UMAL USI) 100% (3) 100% (DBE, SACE, UMAL USI) 100% (DBE, SACE, UMAL USI) 67% (SAC E, UMAL USI) 100% (DBE, SACE, UMAL USI) 100% (DBE, SACE, UMAL USI) 100% (3) 33% (DBE) 33% (DBE) 2016-17 2015-16 100% 100% (3) 2016-17 2015-16 (3) 2016-17 2015-16 Unqualified Qualified Adverse Disclaimed AFS submitted on time AFS and APR submitted with no material misstatements With no findings With findings 20
Unauthorised, irregular as well as fruitless and wasteful expenditure disclosed in the financial statements in DBE 2016-17 Definition UIFW amounts incurred by entities in portfolio Nature of UIFW expenditure R million Expenditure not in accordance with the budget vote/ overspending of budget or programme Expenditure incurred in vain and could have been avoided if reasonable steps had been taken. No value for money! Expenditure incurred in contravention of key legislation; goods delivered but prescribed processes not followed Unauthorised expenditure Fruitless and wasteful expenditure Irregular expenditure R 6 million (DBE) R 6 Million (DBE) R 6 million (DBE) R 11 million (DBE) R 2 million (DBE) R million R622 million (DBE) R600 million (DBE) R 727 million (DBE) 2016-17 2015-16 2014-15 The unauthorised expenditure is with regard to the amount paid for the National Teacher Awards amounting to R6.488 million in the 2014/15 financial year. The Department wrote a letter to National Treasury and requested the approval by Parliament; the Department is awaiting the response. During the 2016/17 financial year, the Department conducted an investigation on the Kha Ri Gude campaign. The investigation was to establish whether volunteers offered classes. The investigation revealed that there were centres were no classes took place and volunteers received stipends, also some learners already had matric. The funds paid to the affected volunteers, learners and stationery distributed has been disclosed as fruitless and wasteful expenditure. The extensions on the MOAs were not renewed on time for the IAs. When appointing the Adopt-A-School, the deviation on procurement requirement without required appropriate approval. During the 2015/16 financial year, it was discovered that during evaluation 1 of the stages was misinterpreted and where site visits should have being done to all bidders. Based on these, the management fee paid to the service provider was declared as irregular expenditure. The SCM processes were not followed in the replacement of non performing contractors. Audit report impact None PFMA --------------------------------------------------------------------------------------------------------------------------------- - Fruitless and wasteful expenditure was reported and the impact and internal control deficiency were reported in the audit report --------------------------------------------------------------------------------------------------------------------------------- Irregular expenditure was reported and the internal control deficiency was also reported in the audit report 21
Most common findings on supply chain management Three written quotations not invited 33% (DBE) Non-compliance with legislation on contracts (expired MoA's with Ias not renewed) 33% (DBE) Non-compliance with SCM requirements during the appointment of replacement contractors 33% (DBE) 22
Fraud and consequence management The DBE had findings on non-compliance with legislation on consequence management which had material findings Previous year unauthorised, irregular and fruitless and wasteful expenditure reported for investigation 33% (DBE) (Irregular expenditure reported during the prior year) 33% (DBE) (Irregular expenditure reported during the prior year) 2016-17 2015-16 Investigated Not investigated 23
Supply chain management findings reported to management for investigation SCM findings reported for investigation during the 2015-16 audit process (all auditees) Follow-up of the previous year s SCM findings reported for investigations. Supplier(s) submitted false declaration of interest 33% (DBE), 10 instances Supplier(s) submitted false declaration of interest 01 Employee(s) failed to disclose interest in supplier 0% (0), 0 instances Employee(s) failed to disclose interest in supplier 0 Other SCM findings reported for investigation 33% (DBE), 10 IDT projects were under investigation by the SIU Other SCM-related allegations 01 All investigated Some investigated None investigated 24
Root causes Slow response to improving key controls and addressing risk areas 100% (DBE, SACE, UMALUS I) Management (accounting officers/ authorities and senior management), the political leadership (executive authorities) do not respond with the required urgency to our messages about addressing risks and improving internal controls. Inadequate consequences for poor performance and transgressions 100% (DBE, SACE, UMALUS I) If officials who deliberately or negligently ignore their duties and contravene legislation are not held accountable for their actions, such behaviour can be seen as acceptable and tolerated. 25
4 AGSA audit methodology improvements 26
AGSA audit methodology improvements Engaging accounting officers in conversations that are insightful, relevant and have an impact Status of records review Pro-active follow up procedures Financial and non financial information (internal and external reports/documents & discussions with senior managers) Key control engagements / status of records review objectives Identify key areas of concern that may derail progress in the preparation of financial and performance reports and compliance with relevant legislation and consequential regression in audit outcome Provide our assessment of the status of key focus areas that we reviewed Assess progress made in implementing action plans/ follow through with commitments made in previous engagements Identify matters that add value in putting measures and action plans in place well in advance to mitigate risks IT management (Unchanged) Feedback linked to Focus Areas Financial health (Improving) HR management (Unchanged) Oversight and monitoring (Unchanged) Status of key focus areas Compliance management (Unchanged) Financial management (Unchanged) Procurement and contract management (Unchanged) 27 Performance management (Unchanged) 27
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Correlation between low accountability, corruption and impact on service delivery Source: Robert Klitgaard (academic anti-corruption research) Corruption Service Delivery 29 29
5 Sector audit outcome (2016-17) 30
Sector audit outcomes (2016-17) Outcomes (2016/17) Outcomes (2015/16) Auditee Movement Audit Opinion PDOs Noncompliance with laws and regulations Audit Opinion PDOs Noncompliance with laws and regulations Eastern Cape Qualified Yes Yes Qualified Yes Yes Free State Qualified Yes Yes Qualified Yes Yes Gauteng Unqualified with findings No Yes Unqualified with findings No Yes KwaZulu-Natal Unqualified with findings Yes Yes Unqualified with findings Yes Yes Limpopo Qualified Yes Yes Disclaimer Yes Yes Mpumalanga Qualified Yes Yes Qualified Yes Yes Northern Cape Unqualified with findings Yes Yes Unqualified with findings Yes Yes North West Unqualified with findings Yes Yes Unqualified with findings Yes Yes Western Cape Unqualified without findings No No Unqualified without findings No No Basic Education Unqualified with findings Yes Yes Unqualified with findings Yes Yes No No material findings reported Yes Material findings reported 31
6 School Infrastructure 32
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Key phases of service delivery (Value Chain Analysis School Infrastructure) 5. Reporting & Impact analysis 1. Demand management 4. Commission and Utilisation 3. Project management 2. Acquisition management 34
Value Chain Analysis School Infrastructure Project name: School Infrastructure (Education sector) High level overview of the value added findings on infrastructure according to value chain stages, 1. Demand management Infrastructure needs were not correctly identified and identified during the needs determination process. The latter resulted in the construction of schools in locations that will be possibility deemed as not being viable projects. There are presently a number of projects that were started and had to be terminated on account of it not being viable projects that should not have been approved for construction. Expenditure incurred in this regard is presently being investigated to determine whether it was indeed wasteful expenditure and whether officials responsible should be held accountable. We take note of the subsequent intervention via the rationalisation of schools and the guidelines developed. 2. Acquisition management Instances of non-compliance were still identified in the areas of supply chain management and asset management processes performed at implementing agents because of ineffective oversight by the departments (DBE and PED s) over compliance with laws and regulations by the implementing agents. The departmental oversight was ineffective in detecting matters of noncompliance by implementing agents. In addition, amendments to construction contracts were approved which was greater than 20% or R20 million (including all applicable taxes) of the original approved contract without approval for the deviation from National Treasury. 3. Project management The findings from the site visits revealed instances of poor quality workmanship of projects. This was due to deficiencies in project management processes specifically with attention to regular site visits by professional service providers (architects, quantity surveyors and engineers) not being conducted which resulted in corrective measures not being able to be implemented before final completion of construction projects. Of particular concern is the impact on service delivery where significant delays of between 2 24 months was experienced and schools such as the Adopt-A-School Foundations were still not in-use. Teaching and learning therefore took place in inappropriate structures potentially impacting the quality of education provided to learners. 35
Value Chain Analysis School Infrastructure Project name: School Infrastructure (Education sector) 4. Commissioning and utilisation During the current and previous three years, we reported a number of cases where it was found that immovable assets which came into being because of the ASIDI construction projects have not been transferred to the custodian department concerned. These immovable assets were constructed by implementing agents on behalf of the department. From this we further identified that there was an unnecessarily long period to finalise transfer of the assets despite the fact that practical and or final completion certificates were received and the assets were being utilised by the beneficiaries. Follow-up of the prior year findings revealed that during June 2017, there were still no PFMA section 42 certificates signed by the department and the custodian departments, hence no immovable assets were disposed of. Based on the delays, the department has not taken timely action to ensure that projects at the practical and final completion certificate stages are finalised and transferred to the custodian departments in accordance with the requirements of section 42 of the PFMA within the required timeframe. We furthermore noted during the site visits that classes were not always used for the purposes intended which is teaching and learning. The latter is illustrated where in one of the schools visited; the security guard lives in one of the classrooms and makes food inside the room with a paraffin stove. As a result, the floor has been damaged and the walls and cupboards are soiled with food spatter and other foreign matter. 5. Reporting Record keeping for school infrastructure was lacking and resulted in modified opinions and material adjustments to both financial and performance reporting. The departments (DBE and PED s) could not provide credible financial information from implementing agents necessary for the disclosure items in the financial statements of the department, e.g. commitments, accruals and immovable tangible capital assets. 36
Value Chain Analysis School Infrastructure Project name: School Infrastructure (Education sector) CONCLUSION Certain departments did not have enough capacity to implement projects. There was heavy reliance on consultants/project managers by certain departments. The lack of consequences for poor performance and transgressions resulted in matters previously reported being repeated and action plans developed not being implemented as desired. Projects were not planned and managed effectively by the provincial departments and their implementing agents. This resulted in the following; Poor quality of work and poor workmanship occurred in six provinces. Furthermore, in four provinces, the assessment and certification of work performed was not well managed which resulted in payment of substandard/poor quality work. There were delays in completion of the projects in eight provinces. In three provinces; the delays were due to late payment of the contractors by the departments and/or their implementing agents. The Standards for Infrastructure Procurement and Delivery Management (SIPDM) was not fully implemented in certain provinces.. There were high number of variation orders in four provinces (FS, GP, KZN and NC), these variation orders were approved for items that should have been included in the scope, and this resulted in increased contract values for projects. 37
Infrastructure: ASIDI/EIG Picture 1: School hall broken down due to excessive cracks (Rood pan Secondary School: Northern Cape) Picture 2: Excavation of foundation (Roodepan Secondary School: Northern Cape Picture 3: Damaged bricks used to build walls (Phutlo Secondary School: Limpopo) Picture 4: Cracks from foundation through bricks (Valspan Secondary School: Northern Cape) 38
7 Early Childhood Development (ECD): GRADE R 39
ECD Grade R: Background Follow-up audit Previous audit conducted in 2010-11 Findings included in 2013-14 Education Sector Report Sub-focus areas for 2016-17 Policy, guidelines, strategy and planning Enabling resources Systems and processes Outputs and outcomes (postponed to 2017-18) 40
ECD Grade R: Findings 2016-17 Improved. Regressed. Unchanged. New finding 41
ECD Grade R: Findings 2016-17 42
8 School management and governance 43
School management deficiencies Annual management processes not adhered School Improvement plans not informed by self diagnostic assessment and also not aligned to annual reports School data not managed adequately and consistently Deficiencies on educator utilisation and leave management Learner discipline, and curriculum coverage not adequately reported Deficiencies on school governing body and asset management record keeping 44
National school management audit Audit criteria Policy directive for adherence to annual management processes. Key findings Adherence to annual management processes is still an issue in some provinces as they are guided by different circulars on how to report. Although Goal 21 of the Action Plan to 2019 stipulate the need to adhere annual management processes, the national department did not monitored whether provincial education departments have put measures in place to ensure that education districts and schools adhere to annual management process of submitting annual academic performance report to the Head of Department or the delegated officials. Root causes The DBE did not provide a clear directive for the provincial education departments to adhere to annual management processes. Monitoring of whether provinces are adhering to annual management processes was also not undertaken. There is awareness for underperforming secondary schools to prepare and submit APIP in almost all provinces. However, there are no clear directives for underperforming primary schools to submit APIP. The Provincial education departments did not provide a clear directive for the education districts to support schools to adhere to annual management processes. The provincial departments do not have a consolidated record of which education districts provided support and which did not provide support to schools so that corrective actions could be taken. There need to guide education districts on how to support schools to adhere to annual management processes was not prioritised by provincial education departments in their strategic planning documents. 45
Provincial audit result Audit criteria Deficiencies identified EC FS GP KZN LP MP N C NW WC Guidance for adherence to annual management processes. The Provincial education departments did not provide a clear directive for the education districts to support schools to adhere to annual management processes. The provincial departments do not have a consolidated record of which education districts provided support and which did not provide support to schools so that corrective actions could be taken. Root cause There need to guide education districts on how to support schools to adhere to annual management processes was not prioritised by provincial education departments in their strategic planning documents 46
Education district audit result Audit criteria Deficiencies identified EC FS GP KZ N Support and The education districts did not provide monitoring support for schools to adhere to annual schools for management processes. Monitoring of adherence to whether schools are adhering to annual annual management processes was also not management undertaken. processes. LP MP N C NW WC Root cause The need to monitor and support school was not articulated by the respective provincial education departments. 47
School management findings Key Findings EC FS GP KZN LP MP NC NW WC Completion and submission of annual reports, quarterly reports and annual plans School records keeping and reporting of learner discipline, learner enrolment, educator composition, development, utilisation and leave management. Functionality of the school governing body through meetings and record keeping of minutes, agendas and attendance registers. Analysis and reporting of learner performance. Monitoring and reporting of curriculum and content coverage. Adherence to policy guidelines and requirement such as LTSM, Nutrition and Finance. School asset management (physical and learning facilities such as ICT equipment) by keeping an updated register. 48
School Management and Administration Systems Improving school performance School planning processes Self diagnostic assessment Whole School Evaluation School Improvement Plan School performance management School management team (SMT) School committees DSG, LTSM, Discipline. Facilities School performance monitoring and oversight School Governing Body oversight Education districts National and provincial monitoring School Reporting Systems - Monthly reports - Quarterly reports - Annual School Performance Report 49
Stay in touch with the AGSA 50