Speech by Honourable Nelson during the debate of the Higher Education Laws Amendment Bill (B 14- 2011)

20 September 2011

Honorable Speaker and Deputy Speaker,
Minister and Deputy Minister of Higher Education and
Training Ministers and
Deputy Ministers
Honorable Members

Topic: Appointment of the Administrator

Section 29 (1) (a) of the Constitution of South Africa states: 1. Everyone has the right-

(a) to a basic education, including adult basic education; and to further education, which the state through reasonable measures, must make progressively available and accessible.

The National Students Financial Aid Scheme was established by statute, the National Student Financial Aid Scheme Act (Act 56 of 1999). The role that the Scheme has played, in ensuring access to further and higher education and training cannot be overlooked. Since its inception, NSFAS has ensured that the right provided for in the Constitution, is progressively realized. The Scheme seeks to impact on South Africa`s historically skewed students, by providing a sustainable financial aid system that enables academically deserving and financially needy students to meet their own and the country`s development needs.

Honorable Members, before 2007, the Scheme was providing financial aid to students in higher education institutions only. However, in 2007, the Education Laws Amendment Act (Act 31 of 2007) was passed.This expanded NSFAS` responsibilities to include granting of financial aid to students at further education and training colleges, through what is called the Further Education and Training Colleges Bursary Scheme.

In debating the Higher Education Laws Amendment Bill, I will focus on the insertion of Section 17A (1) in chapter 2A in Act 56 of 1999. This section deals with the appointment of an administrator, to take over the management, governance and administration of the NSFAS, as well as to perform the functions of the NSFAS, if financial or maladministration is detected or the Board requests that an administrator be appointed.

The ANC is pleased with the insertion of the above section in chapter 2A of the Act, because currently as it stands, the NSFAS Actdoes not have provisions which give the Ministerpowers to remove the Board or powers to appoint new Board Members.

The only power the Minister had, as revealed by the findings of the Ministerial Committee on the Review of the Scheme, was to persuade individual Board Members to vacate their positions, and if they refused to do so, the Minister did not have any recourse. We are also pleased to see that the recommendations of the Ministerial Committee are being implemented to improve the efficiency of the scheme.

In order to illustrate the importance of this insertion I would like to illustrate the following:

Since 2008, the Scheme has been plagued by high attrition of Chairpersons of the Board and Chief Executive Officers. From 2008 to February 2010 the Scheme had three CEOs and has been without a CEO since late February this year. It was reported by the newly appointed Chairperson of the Board that they had to terminate the CEOs contract due to undisclosed reasons and that the matter was with the courts.

Similarly, the Scheme has had three Board Chairpersons in the same number of years. From this, one is able to see that there were problems in the organization, which prevented the senior management from focusing on the core issues within the organization.

A situation such as this, needed the Minister`s intervention in terms of what is envisaged by the insertion of section 17A (1). However, due to no provision in the Act, no serious interventions could be made. This led to a disclaimer of opinion and matters of emphasis in the 2009/10 annual report by the Auditor-General.

Matters flagged in the previous audit reports were not dealt with, due to conflict between senior managers and managers. These conflicts hindered the efficient running the Scheme. The Review Committee made various findings. Amongst these findings were: inappropriate appointments to senior management positions, the absence of a performance management system, poorly defined job descriptions, senior management vacancies, temporary appointments and poor management of the internal information flow, which all contributed to the inefficiencies within NSFAS.

Honourable Members, due to the lack of provisions in the principal Act, namely, giving the Minister the power to intervene, problems persisted and compromised the ability of the Scheme in executing its mandate. As the ANC, we believe that the insertion of this section and matters connected therewith will go a long way in giving the Minister the power to remove a Board and appoint an administrator whenever necessary. We also agreed that an administrator cannot co-exist with a dysfunctional board. Speaker, therefore, for the reasons cited, the ANC supports the insertion of this and the other sections of the Bill.

I thank you.