Higher Education Goes Bankrupt With R929 Million Irregular Expenditure


The Democratic Alliance (DA) party wailed that the Higher Education Department is going insolvent after the Auditor-General’s report among other things, revealed that the department’s irregular expenditure reached an all-time high of R929 million in 2016/17.

According to DA, the Auditor-General’s (AG) 2016-17 report on Higher Education and Training showed that the department is going insolvent.

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The report contains a range of ominous warnings which need urgent attention, the party stated and highlighted the following as some of the unpleasant facts found in the report:

  1. The Department is carrying substantial liabilities which have significantly increased this year. The AG said the Department is in ‘a negative overdraft and negative cash flow’ position. Next year the Department might well be unable to continue sustainably.
  2. Irregular expenditure reached an unprecedented R929 million in the 2016/17 year, 94% of which has not been investigated yet. Most of the irregular expenditures occurred in the SETAs (Skills Education Training Authorities). One SETA – EWSETA – misspent no less than R290m. And, the National Skills Fund misspent R170m.
  3. 24 of the 50 TVET (Technical and Vocational Education and Training) Colleges received a qualified, adverse or disclaimed audit opinion.
  4. Five TVET Colleges have not yet submitted their Annual Financial Statements – some have not done so since 2014.
  5. This year, the TVET sector has met only 1 of its 12 targets, and the Community College sector has met none.
  6. Most Universities carry enormous levels of student debt, much of which has to be written off. Their situation is likely to worsen rather than improve in the subsequent two years.

In line with the above, DA referred to another 2015 study which exposed that 10 universities (NWU, WSU, SMU, UNIVEN, UNISA, TUT, CPUT, CUT, MUT and VUT) incurred operating deficits whereas 4 (NWU, MUT, UNISA and MUT) made annual losses.

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With the foregoing, the party warned that the nearest future is bleak for the Higher Education Department.

“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,” contended the party.

“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,” added DA.