Umalusi’s budget review presentation to the Portfolio

Committee on Basic Education

22 March 2011

Cape Town

• Umalusi mandate• Vision, mission, goals and KRA’s• 2010/11 Revenue & Expenditure (Current)• 2011/12 Budget (Forecast)• Three Year Budget Forecast• Conclusion

Overview

• As a new Quality Council to develop and manage a sub-framework of qualifications for general and further education and training framework;

• To develop and quality assure qualifications and curriculum;

• To quality assure assessments at exit points;

• To certificate learner achievements;

• To quality assure provision and accredit private providers of education and training, and assessment;

• To conduct research related to the sub-framework; and

• To advise the Minister

Umalusi Mandate 2010/11

Umalusi Council is the cornerstone on which the country’s educational aspirations and standards are anchored and built; and as such the Council and staff are committed to ongoing improvement in standards and quality in general and further education and training.

In order to issue learners with credible certificates, Umalusi, through its leadership and expert knowledge, develops and secures standards through:

• quality assuring qualifications and curricula,

• confirming that assessment is fair, valid and reliable,

• quality assuring the provision of education and training, and assessment providers, and

• grounding its work in research to ensure informed positions and approaches

Vision & Mission

• Promote quality and internationally comparative standards in GFET

• Maintain and improve educational standards through development and evaluation of qualifications and curriculum, quality assurance of assessment, and accreditation of providers of education, training and assessment,

• Continuously develop in-depth knowledge and expertise in mandated areas through rigorous research,

• Report on the quality of education and training in GFET within the mandate,

• Issue appropriate and credible certificates of learner achievement in terms of specific qualifications on the GFET Framework of Qualifications,

• Provide reliable and credible leadership and guidance in standard setting and quality assurance,

• Ensure the financial efficiency and sustainability of the organisation, and

• Determine expectations and appropriately respond to these within the parameters of Umalusi’s mandate.

Goals

1. Improving and maintaining the system for quality assuring assessment for certification

2. Establishing and implementing a system for evaluation and accreditation of providers

3. Establishing and maintaining a system to certify and quality assuring qualifications and curriculum

4. Research, diagnose and report on quality in general and further education and training supported by statistical analysis.

5. Developing and maintaining management support structures and governance

6. Ensuring that Information Technology systems are established, maintained and improved

7. Ensuring that finance, human resources and administrative support systems are maintained and improved

7 Key Result Areas

Statement of Financial Performance as at 28 Feb 2011

Net surplus of R 4,531,759 110% of Budgeted Revenue from operations

recognised 100% of the Grant from the Department of

Basic Education received 76% of the budgeted expenses incurred to

date

EXECUTIVE SUMMARY ON FINANCES

Statement of Financial Position ,Cashflow, Debtors and Investments

Total Assets R 47,397,032

93% of invoiced debts collected to date

Cash available at the end of the period amounted to R688,018

Investments R 26,392,075, attracting interest of 5.50% p.a

Note:

Management agreed to proceed with caution for the remaining month in order to increase the reserves to roll over into 2011/12 financial year due to the shortfall not being provided by the Department of Basic Education

EXECUTIVE SUMMARY ON FINANCES (2)

Comparative total expenditure to date vs 3 year average

2010/11 Revenue Budget vs Actual (Current)

Revenue Streams

Budget Actual % Comment

Accreditation Fees 2 500 000 1 388 029 56 As per institution requests

Certification Fees 25 280 000

33 082 030 131 Increase in certification fees levied in June 2010 and supplementary of previous 2009/10 candidates

Department of Basic Education Grant

17 350 000

17 350 000 100 Grant payment transfer on schedule as agreed

Interest 1 000 000 1 442 304 144 Due to non use of surpluses more interest was received than planned

Reserve Funds 18 242 641

0 0 Due to requiring additional finds for 2011/12 minimal usage of reserves was introduced

Verification Fees 4 439 500 3 381 024 76 Employment trends affect verification fees

Other 0 515 640 100 ETDP seta refund, provider conference fees, private telephone, ERCO fees, etc

R 68 812 141 R 57 159 027

83%

As approved by the Minister of Basic Education on 27 April 2010

2010/11 Expenditure Budget vs Actual (Current)

Expenditure Budget Actual % CommentNational Operations

26 716 220 17 334 197 65%

Expect between 5-7% under spending due to nature of research / qualifications projects

Corporate Services 42 095 921 35 293 071 84%

Expect budget to be expended fully

R 68 812 141

R 52 627 268

76%

•Net surplus as at 28 February 2011 is therefore R 4 531 759

Statement of Financial Position as at 28 February 2011

Feb 2011 Feb 2010

Assets 13 835 635 12 384 822

Investments @ CPD 26 392 075 28 493 281

Current assets 7 169 322 7 666 397

R 47 397 032 R 50 378 074

Capital and Reserves 43 400 255 46 788 986

Current Liabilities 3 996 777 3 589 088

R 47 397 032 R 50 378 074

2011/12 Budget (Forecast) Quality Assurance of Assessments

OUTCOMES Current Budget

Forecast2011/12

Motivation

Question papers moderated Marking standardizedModeration of CASSMonitoring of examsStandards for assessment articulated and maintained Stakeholder relations established and managed

Management, support and governance structures maintained and improved

R 16 221 220

R 18 373 953 13% increase due to increase in Moderator costs as per Ministerial approval and also increase in moderation/monitoring sample sizes

2011/12 Budget (Forecast) Evaluation and Accreditation

OUTCOMES Current Budget

Forecast2011/12

Motivation

Accreditation and monitoring system for providers of education and training maintained and extendedProvisional accreditation and monitoringProvider siteMonitoring reportsPolicy developmentStakeholder relationshipsAccreditation and monitoring system for assessment bodies maintained and extended Monitoring of new and existing assessment bodies

R 3 795 000 R 4 508 000 19 % increase due to increase in the number of institutional site visits, etc

2011/12 Budget (Forecast) Qualifications, Curriculum & Certification

OUTCOMES Current Budget

Forecast2011/12

Motivation

Develop and maintain qualifications sub-frameworkDevelop standards for new qualifications

Curricula are evaluated and/or developed.

Certification of learner achievementMaintain and improve verification processes

R 4 050 000 R 3 876 000 Decrease of 4% due to the need to capacitate the unit before the role out of qualifications and curriculum work is increased. This will be done in 2011/12 and additional budget for human resources instead

2011/12 Budget (Forecast) Statistical Information and Research

OUTCOMES Current Budget

Forecast2011/12

Motivation

Reporting (Printing of Reports)

Sales of the Reports

Research is planned, managed and implemented

Provide statistical supports to other units

Research forum/committee maintained

Strategic support is provided to the organization

Collaboration with stakeholders on strategic research

Stakeholders are engaged with through conferences and published documents

Resource centre

R 2 650 000 R 3 076 250 16% increase budgeted to give effect to the formal mandate of research as a QC and which now also includes extension of the research work i.r.o standard setting and qualifications development

2011/12 Budget (Forecast) Management Support Structures

OUTCOMES Current Budget

Forecast2011/12

Motivation

Organisational planning and implementation and review of plansOrganizational governance is maintained Stakeholder relations established and managedPublic relations programme implemented

R 2 911 100 R 2 841 765 A decrease of 2% in budget is proposed as most Council members are office bearers and require less allowances. More capacity is required in PR thus a look at increasing the HR budget

2011/12 Budget (Forecast) Corporate Services: Information Technology

OUTCOMES Current Budget

Forecast2011/12

Motivation

Information technology systems established, maintained and improvedCertification IT program effectively implemented Adequate computer hardware and software installed and maintained to support operations

R 4 770 896 R 5 178 616 9 % increase required due to increase in computer costs mainly for replacement of hardware and software. No increase in SITA costs were effected over the last two years

2011/12 Budget (Forecast) Corporate Services: Finance

OUTCOMES Current Budget

Forecast2011/12

Motivation

Finance and Accounting systems maintained and improvedSupply Chain Management system maintained and improvedBuilding and security systems maintained and improved

R 4 267 853 R 4 612 629 8 % increase forecasted for building which is more maintenance orientated and supply chain costs for purchases like stationery, etc

2011/12 Budget (Forecast)Corporate Services: Human Resource Management and Development

OUTCOMES Current Budget

Forecast2011/12

Motivation

Administration of Human resources HR development plans implemented General services providedRecords Management Services

R 30 146 072 R 36 394 187 21 % increase due to additional posts required as per the HR review done and approximately 5% towards cost of inflation increases

GRAND TOTAL R 68 812 141

R 78 861 400

Overall a 15% increase forecasted as the minimum budget required for 2011/12

Total Income 2000/1 (actual) to 2013/14 (budget)YEAR INCOME BUDGET DBE GRANT GRANT %

2000/01 R 6 150 786 0 0

2001/02 R 7 027 948 0 0

2002/03 R 13 757 861 R 1 513 000 11

2003/04 R 18 076 902 R 3 050 000 17

2004/05 R 23 547 626 R 12 869 000 55

2005/06 R 28 603 979 R 7 690 000 27

2006/07 R 32 972 345 R 10 286 000 31

2007/08 R 36 013 566 R 12 652 000 35

2008/09 R 46 434 369 R 16 044 000 35

2009/10 R 52 442 731 R 16 494 000 31

2010/11 R 68 812 141 R 17 350 000 25

2011/12 R 78 861 400 R 18 391 000 23

2012/13 R 91 644 338 R 19 311 000 21

2013/14 R 101 650 807 R 20 469 660 20

3 Year Budget Forecast

2010/11 2011/12 2012/13 2013/14

R 68 812 141 R 78 861 400 R 91 644 338 R 101 650 807

2011/12 Budget was submitted in September 2010 and a response received in January 2011. Thus a revised budget was submitted on 18 January 2011 and the Ministry of Basic Education approval is awaited

Y/Y Percentage Increase

28% 15% 16% 11%

• The financial sustainability of the organisation through increased funding :

• Move from certificate fee structure to a QA levy, and/or

• Increase baseline allocation of the grant

• Umalusi mandate contestations

• Reputational risk as addressed through media

Challenges

Thanks to the Portfolio Committee Chairperson Ms H Malgas and Honorable members for this opportunity to present Umalusi’s budget review.

Your support is highly appreciated.

THANK YOU