Walter Sisulu University (WSU) is the worst performing among comprehensive universities in the country, according to the department of higher education and training.
Addressing the media in Pretoria, department of higher education director general Gwebinkundla Qonde said the university had an unusually high percentage of salary expenditure – standing at 75% of income. The national payroll norm is between 55 and 62%.
"This is a consequence of deliberate misappropriation of funds by members of management, following the merger in 2005. When we intervened in 2011, personnel costs constituted 80% of the operational income," he said.
The university was put under government administration in 2011, and its council was dissolved following an independent assessor’s report that showed that the university had been operating on a council-approved deficit for about five years. It was also unable to afford salaries – management illegally used earmarked grants provided for infrastructure improvement to pay salaries.
Qonde announced that the administrator, Professor Lourens Van Staden, is currently investigating the 20 members of senior and executive management that were fired in 2012, and there is a possibility that he might press criminal charges against them.
Labour Impasse
The unions, led by the National Education, Health and Allied Workers Union (Nehawu), are currently in the middle of a six-week long salary increment strike that has led to public violence and a shutdown of the academic side of the university. The department urged the workers and Nehawu to accept the 4.25% and forget about their 8-10% demand.
Sixteen students appeared at the Butterworth Magistrate court on Thursday morning after they were arrested for vandalism during demonstrations on Wednesday.
Qonde said the department will not micro-manage WSU and that staff should be grateful that they have guaranteed salaries, a fact that was uncertain two years ago. "The minister has washed his hands, labour unions need to learn to live within their means, tighten their belts and learn that funds can never be enough for any institution."
In 2011 the employees did not have a salary increase, but R48-million was allocated for once-off bonuses of personnel. The department had then requested that the administrator be allowed to continue fixing matters because the financial situation was and still is precarious.
The university has confirmed that it received an amount of R23million that was meant for salary increases for 2013. "That is where the 4.25% comes from, we just cannot afford anymore. The staff does deserve a better increase, but they need to consider that we are sinking in debt still and our heads just barely got out of the water," said Angela Church, the university spokesperson.
Qonde slashed out at workers saying that, "The current strike threatens to reverse the significant gains made over the last year. For the first time in five years, WSU has tabled a balanced budget where expenditure is in line with the income of the university," according to Qonde.
The labour unions were given a choice of Mediation and Arbitration or to get an independent financial expert to resolve the matter, but they turned both options down, insisting on the 8-10%.
National spokesperson for Nehawu, Sizwe Pamla, argued that the real problem is that the department waited too long to intervene at WSU. "They watched the university collapse and then sent in an administrator. Had this been done a long time ago, debt and financial problems would not have been the problem of workers. We want an increase for those people; that is a working class environment."
He argued that the department is well aware that picking up pieces on an already disasterous situation is costly, and that this has nothing to do with hard-working employees. "Government has to pay for its own mistakes. National misguidedness cannot translate into the suffering of people anymore," he said.
R3-billion bail out
The Eastern Cape university has submitted a request for a R3-billion bailout from the national treasurer because it has liabilities that exceed its assets and bank balances by R970-million.
"The university remains technically and commercially bankrupt and will require discipline and determined leadership to ensure that over the long term it becomes financially viable," he advised.
The students' debt has been cut down from R271-million to R40-million, curtesy of a close to a billion rand grant subsidy that was allocated to address the debt, teaching and learning technology, technical expertise and infrastructure.
In an article written for the Mail& Guardian, former chairperson of the WSU council Dr Somadoda Fikeni argued that Sibusiso Bengu, the first post-apartheid education minister, proposed historical redress funding for historically disadvantaged institutions. But he was defeated by a strong lobby against his efforts, as he later admitted.
Fikeni alluded to the fact that as far back as 2007, the council imposed austerity measures and also assisted management in formulating and implementing a financial turnaround strategy.
"But the historical, systemic and structural challenges of a merger that combined three severely disadvantaged institutions, each with its own history of instability, could do little to change the situation. This was compounded by the poor recovery of student debt, the general culture of poor payment of fees and the reality of servicing one of the poorest regions in the country, as reflected in its demographic features," he had argued.
The severity of these problems simply differs in degree from one institution to another and they take turns to visit "institutional ICU" in the form of administrators or departmental bailouts.
He reminded that one of the university’s legacy institutions, the former University of the Transkei, had three administrators, all of whom failed to turn the situation around. "The same institution also experienced the dissolution of councils that were served by such prominent persons as Blade Nzimande, Brigalia Bam, Fatima Meer, Dumisa Ntsebeza and Zam Titus. We are now dealing with three times the problems they faced, with fewer resources and an institutional culture that has worsened."
Poor academic perfomance
With 27 000 students enrolled, WSU has graduation rates that are below the department’s benchmarks. The Higher Education Quality Committee's 2011 report following an institutional audit suggested that there is a link between poor academic performance and inadequate infrastructure and poorly supported academics.
"This is as a result of a combination of financial constraints and poor human resource planning," according to Qonde.
The department called on all stakeholders to understand the gravity of the financial problems and to ensure that decisions made do not threaten the long-term financial viability of the institution.