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FINANCIAL AND FISCAL COMMISSION

Submission for the Division of Revenue 2008/09

Presentation to the Portfolio Committee on Education

16 October 2007

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Introduction: Submission 2008/09

Submission made in terms of Chapter 13 of the Constitution and Chapter 9 of the IGFR Act.

Submission comprises FFC observations and recommendations for the 2008 DoR Incorporating supplementary submissions made

during the course of 2006/2007; and Research currently in progress.

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National School Nutrition Programme (NSNP)

FFC empirical research to assess current state of NSNP and feasibility of extending the programme to accommodate Constitutional equity considerations.

Recommendations: Before any consideration is given to extending the NSNP to

secondary schools, Government should address the following implementation matters:

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NSNP Recommendations cont.

All Provincial Education Departments (PEDs) should adopt and entrench the NSNP as their full responsibility.

PEDs should engage the necessary personnel with appropriate skills levels in order to implement the programme on a full-time basis.

Budget allocations for the NSNP in primary schools should be increased in order to cover learners who are presently excluded from deriving the benefits of the Programme.

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NSNP Recommendations cont.

PEDs should implement the NSNP in schools that have been declared “no-fee-schools” by the Minister of Education.

The National Department of Education should develop national norms and standards to guide the implementation of the Programme throughout the country in a uniform and consistent manner.

Presently, no uniform norms and standards have been established to manage the NSNP,

This has resulted in problems in terms of the application and monitoring thereof throughout the provinces.

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NSNP Recommendations cont.

The National Department of Education should ensure that the quality of information is improved upon The information obtained would be useful in the

planning and budget processes of the NSNP.

Where necessary, PEDs should supplement the NSNP conditional grant with funds from their respective budgets. Presently, this is the case in the Northern Cape.

Where necessary improvements in procurement procedures should be undertaken.

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NSNP Recommendations cont.

Kitchen equipment and infrastructure in all provinces should be upgraded

Improvements in capacity for the monitoring and evaluation of the NSNP are vital, in order to address difficulties that may arise during the course of its implementation.

Consideration should be given to increasing the number of feeding days beyond the current prescribed minimum.

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Financing of Learner Support Materials (LSM) and No-Fee Schools

LSM should be defined as stationery, textbooks, and learner and teacher aids In line with international trends A separate budget should be established for

expenditure on textbooks, stationery, learner and teacher aids

A separate budget is also needed for maintenance,

repairs and equipment

This would assist in identifying and monitoring

budgetary allocations and expenditure in each area.

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Review of the Financing of School Infrastructure and Educational Outcomes

The framework for the Provincial Infrastructure Grant (now the IGP), should support infrastructure development in areas most in need and where it is most likely to improve learner performance and school outcomes

The effective coordination of planning for school infrastructure including connectivity should be instituted with immediate effect

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Budget Performance of Government Departments

Fiscal performance and capacity were measured on the basis of the evaluative criteria in Section 214(2) a-j of Constitution e.g. national interest, developmental needs, stable and predictable revenue shares.

RECOMMENDATION 2: Policy Prioritized Programmes indicated by Above Average Growth of Budgets

To ensure alignment between policy objectives and budgets /spending, identified priority areas should grow by a higher than average growth rate.

Examples In accordance with AsgiSA and JipSA, most provinces have

prioritized infrastructure and skills training. Exceptions include FET, ABET and conditional grants for health professional training.

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Budget Performance of Government Departments

RECOMMENDATION 1: Stable & Predictable Growth Paths

To ensure stable and predictable allocations of revenue shares between different programs/categories of spend, national/provincial treasuries should aim for stable budget growth paths over a 7 yr period - from the recent past 3 yrs through to the forthcoming medium term budgeting and planning cycle.

Rationale and Examples Often with newly established and smaller programmes, there is a

trend of policy prioritization, over-budgeting, under-spending, followed by cut-backs in the following year’s budget (or vice versa).

This is especially true of budgeting for infrastructure and skills training which are priorities established by AsgiSA and JipSA. Particular examples include ABET, FET, ECD, welfare, farmer support and road construction.

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Budget Performance of Government Departments

RECOMMENDATION 3: Entrenchment of Best Practice Project Planning

The further institutionalization of best practice project planning & budgeting methods (which separate planning from implementation and align them to the fiscal year) should be encouraged.

Rationale Under-spending caused by excessive adjustments, late

disbursements and end-of-year fiscal dumping is more pronounced when different spheres or departments are responsible for budgeting and delivery.

Treasuries are strengthening the technical ability of provinces to undertake infrastructure capital planning and budgeting (through I.D.I.P.).

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Budget Performance of Government Departments

RECOMMENDATION 4: Reporting on Service Delivery Outputs

Every departmental service delivery programme should be defined by and reported in the P.B.E.R, according to:

- actual and targeted beneficiaries;- personnel numbers and budgets by occupational skills level;- current items & capital assets used in service delivery.

Provincial departments should report on these non-financial indicators on behalf of their service delivery agents.

Rationale: This non-financial data is required to enable an assessment of

progressive realization, efficiency and effectiveness.

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Budget Performance of Government Departments

RECOMMENDATION 5: Measuring Socio-Economic Impact

A methodology to measure socio-economic impact of government capital and current spending should be standardized across government departments and programmes.

Rationale: These measures of impact have been pioneered through the

E.P.W.P. and should require reporting on employment generation, poverty reduction, redistribution of income and wealth and contribution to economic growth.

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Budget Performance of Provincial Education Departments

ITEM POLICY PERFORMANCE SPENDING PERFORM-

ANCE Department / Category / Program / Grant

Real Growth of Budgets

between FY 2003 and

FY 2005

Real Growth of Budgets

between FY 2007 and

FY 2009

% of Total Departmental

Spend - FY 2006

Under- or (Over-)

Spending FY 2003 to

FY 2005 ALL PROVINCIAL DEPARTMENTS

5.02% 4.13% 2.25%

EDUCATION 4.54% 2.81% 100.00% 0.85%

Personnel -0.52% 1.76% 79.06% 0.03%

Training* 3.30% 2.24% 0.49% 15.99%

Capital 2.96% 8.56% 4.77% 12.57%

Public Ordinary Schools

4.97% 2.80% 83.96% 0.52%

Early Childhood Development

-3.98% 7.02% 0.86% 10.18%

Adult Basic Education & Training

6.59% 3.54% 0.97% 4.95%

Further Education & Training

7.02% 1.64% 2.58% 2.66%

Primary School Nutrition Grant

19.24% 1.77% 1.04% 5.32%

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Delivery Performance of Provincial Education Departments

Learner enrolment in public ordinary schools has grown at 0.74% p.a. This is lower than the real growth of spending. Hence, per learner spending has increased by 3.88% p.a. Learner-educator ratios have declined.

Learner data requested for ABET, FET, ECD. Data on number of schools available but not the number

of classrooms. Hence, learner: classroom ratios can not yet be calculated.

Learner test results should be reported on for more grades and for ABET, FET and ECD.