Auditor-General warns of systemic deterioration in higher education portfolio↗
By Thapelo Molefe
The Auditor-General (AG) has warned that financial management problems across the country’s higher education portfolio are no longer isolated failures, raising concerns about recurring audit findings, weak project management, fruitless and wasteful expenditure and a lack of consequence management.
Briefing Parliament’s Portfolio Committee on Higher Education on Friday, the AG said the portfolio was regressing, despite an improvement in the audit outcomes of TVET colleges specifically.
The warning came after committee member Dr Delmaine Christians questioned whether the overall portfolio was getting worse, pointing to a decline in clean audits from 11 entities to nine and an increase in qualified audits from nine to 11.
The AG said the distinction between the TVET sector and the broader portfolio was important.
“When it comes to the portfolio, we would not necessarily say that there has been an improvement. In fact, I would say that there has actually been a regression,” the AG said.
The AG said the weaknesses identified across entities were similar and increasingly pointed to a systemic problem rather than isolated failures.
“We are seeing that over the years, it’s getting worse instead of getting better, which is an area of concern,” the AG said.
The AG said recurring weaknesses included poor project management, incorrect financial reporting, irregular expenditure and failures to properly account for skills-development initiatives.
The AG said some entities had received qualified audit opinions for several consecutive years, making it necessary to investigate the underlying causes rather than simply attributing the problems to a lack of capacity.
“You may find that it actually could get to a point of realising that it’s being done deliberately,” the AG said, while stressing the need for deeper investigations to establish the root causes.
Christians also raised concerns about NSFAS, whose audit was again outstanding because of the late submission of its financial statements.
The committee member questioned whether the repeated problems were evidence of systemic deterioration in financial management across the portfolio.
“What I have to ask then is, is the portfolio actually getting worse?” Christians asked.
The AG said the biggest problem was not the absence of corrective action plans, but the failure to implement them and hold officials accountable.
“The key thing that we would recommend is consequence management, a culture of consequence management in the sector,” the AG said.
The AG said audit action plans were assessed for whether they adequately addressed the root causes of findings, but implementation and monitoring remained weak.
“You can clearly then link it to somebody who hasn’t done what they’re meant to have done,” the AG said.
However, officials were often not subjected to disciplinary or other consequences when they failed to implement corrective measures, allowing the same problems to recur.
Christians agreed that the problem was no longer identifying what was wrong.
“The problem is that nobody is being held sufficiently accountable to fix that,” she said.
The AG also raised concerns about the growing amount of fruitless and wasteful expenditure in the portfolio.
Christians said the closing balance had increased from about R275 million to R536 million, with another R87 million incurred during the financial year.
She said the expenditure included services that were not delivered, learner stipends that were not paid, bank payment fraud and overpayments to skills-development providers.
The AG said the continued accumulation of fruitless and wasteful expenditure was directly linked to failures to investigate losses, recover money and impose consequences on those responsible.
“That’s why you are seeing a growing trend of that fruitless and wasteful expenditure in terms of accumulation,” the AG said.
The official said institutions were required to investigate the causes of fruitless and wasteful expenditure, identify those responsible, institute disciplinary processes where necessary and recover losses.
The AG said investigations often remained outstanding for long periods, with institutions continuing to report that investigations were still in progress.
The committee also raised specific concerns about the Northern Cape Urban TVET College, where problems have reportedly remained unresolved since 2022. The college has previously been the subject of parliamentary scrutiny over allegations of financial mismanagement and governance failures.
Christians told the committee that the problems at the college were continuing to spiral out of control and urged the department to urgently conduct a forensic investigation.
“The fact that the Auditor-General has raised it once again, where a team has been sent by the DHET, and the team has come back with no substantive information, that is even more concerning,” she said.
Higher Education Minister Buti Manamela said the department shared the concern over the college and was committed to stabilising its governance and management.
“I do share your concern that if that college or any of the colleges anywhere in the country collapses, you know, it has serious implications,” Manamela said.
Deputy Director-General for TVET Sam Zungu said the department had previously sent a team led by its chief director responsible for finance to examine some of the issues raised at the college.
However, Zungu said the team was not made up of forensic investigators and therefore could not establish whether potential fraud had occurred.
“The team that is sent, they are not trained as forensic investigators,” Zungu said.
He said the department would therefore have to consider conducting a forensic investigation following the concerns raised by the Auditor-General.
“It’s something that we will be embarking on as a department in that regard,” Zungu said.
The committee chairperson, Tebogo Letsie, meanwhile raised separate concerns about consequence management at a construction-sector SETA that has been under administration since 2025.
Letsie said a forensic report that cost the state almost R18 million had made recommendations that administrators were supposed to implement, but he could not identify a single recommendation that had been implemented a year after their appointment.
He also questioned the decision to return a supply-chain official to the same position from which she had been suspended while disciplinary processes were under way.
Letsie said the official was subsequently found guilty of 42 charges, raising further questions about how consequence management was being applied.
He said he intended to provide the department and Auditor-General with documentation relating to the matter and indicated that law-enforcement agencies could ultimately be approached.
The chairperson said the committee could not accept a situation in which institutions continued to disregard audit findings and corrective measures.
The AG’s warning places the repeated audit failures, growing fruitless and wasteful expenditure and weak consequence management at the centre of concerns over the financial administration of the higher education sector.
The Auditor-General said the recurring nature of the problems meant that the portfolio needed to look beyond individual audit findings and establish why institutions continued to fail to correct problems that had been identified year after year.
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