Accountants help colleges repair financial systems

The Department of Higher Education has teamed up with the South African Institute of Chartered Accountants (SAICA) to bolster the financial management of the country’s 50 technical and vocational education and training (TVET) colleges.

Over the past week, TVET colleges have been plagued by protests, with students demanding better governance practices and sound financial management in the institutions.

Unqualified lecturers, poor infrastructure, late certificates, mismanagement and wastage were also cited in the protests.

Higher Education and Training Minister Blade Nzimande has instructed his department to convene a forum to create a channel of communication between student representatives‚ college administrators and senior officials.

In the 2015-16 financial year, four TVET colleges had outstanding audits, with one lacking systems and documents. Another of the four had suspended its chief financial officer.

Deputy director-general of TVET colleges Firoz Patel told Business Day that SAICA had helped the colleges recruit permanent chief financial officers. “All 50 colleges [now] have chief financial officers appointed through the SAICA project.”

The department also overhauled the colleges’ councils, establishing councils where they did not exist and removing those whose terms had expired.

“We have last year distributed 29 policy frameworks to councils for effective fiduciary accountability and are in the process of completing the 30th one on college investment policy,” said Patel.

The ministerial portfolio overview for the 2015-16 academic year, produced by the auditor-general’s office said the financial health of the TVET colleges was of great concern.

Thirty-three percent of the colleges had negative net cash flows and could not collect the money owed to them. Nearly 50% of the colleges had a net deficit for the year.

The report said compliance with legislation showed little improvement in the past two years. The main concern was the failure to keep complete and adequate accounting records in support of the transactions, balances and disclosures in the financial statements.

SAICA was recruited following a recommendation that the department appoint chartered accountants to help handle college accounts efficiently.

To deal with the issue of unqualified lecturers, the department announced that it would soon be inviting public comment on important amendments to the draft National Qualifications Framework Amendment Bill.

Published in November 2016, the bill’s provisions give more powers to the South African Qualifications Authority to evaluate and verify qualifications of employees, members of boards and councils and establish registers of fraudulent and misrepresented qualifications.

Nzimande previously said the budget required to service the TVET college system for the 2017-18 financial year amounted to R19.8bn.

There was an estimated shortfall of R10.7bn, based on the current baseline allocation of just more than R9bn.

TVET colleges will make 207,510 places available to new entrants this year.

They provide an alternative tertiary education to students who fail to get into university.