Blade wants state audit of varsities

University vice-chancellors look set for a showdown with Higher Education and Training Minister Blade Nzimande over his plans to have the institutions audited like state entities.

As one component of their institutional autonomy, universities’ financial books and performance data are audited independently of the state’s auditor general.

University managements appoint firms such as PwC, KPMG and SizweNtsalubaGobodo to carry out external audits, whose outcomes are submitted to the department every June as part of annual reports.

But Nzimande now wants auditor general Kimi Makwetu to take over the auditing of universities. Nzimande’s office did not respond to the Mail & Guardian’s repeated requests for comment on the proposal.

In a report detailing the 2015 audit outcomes of the department and entities under it, Makwetu reveals that Nzimande indicated to him that one of his commitments is “to review higher education legislation to make provision for the auditor general to be involved in the external audits of universities”.

Makwetu’s report indicated that he has requested a “meeting to be held with the department to discuss the matter in detail by March 31 2016”.

No position, yet
Universities South Africa (formerly known as Higher Education South Africa), an association of vice-chancellors, has not formulated a position on Nzimande’s plan because it has yet to be informed of it, according to the body’s chairperson, Adam Habib.

Said Habib: “Once the department does communicate the proposal, the matter will be tabled at a Universities SA executive committee and board meeting for discussion, the drafting of a formal position and a response to the department.”

Wearing his hat as vice-chancellor of the University of the Witwatersrand, Habib questioned Nzimande’s plan. He told the M&G: “It should be borne in mind that all universities are audited and, in many cases, normal corporate governance procedures are applied diligently.

“The question that we have to ask is: What is the purpose of the proposal and is that purpose not already being fulfilled by existing auditing procedures? This decision must not be made on an emotional but a thoughtful basis.

“It would be useful to understand the difference between public and state institutions, and the application of governance and auditing practices in relation to that distinction. Universities are public institutions, and not necessarily state institutions.”

The country’s 26 universities do not receive 100% of their funds from the government. Although state funding is one stream of income, varsities get most of their money from student fees and private donations.

Thandwa Mthembu, vice-chancellor of the Central University of Technology in Bloemfontein, said he wonders why Nzimande wants to amend a system that is not faulty.

Many problems
“There are many things to fix in South Africa, let alone in education in general. The universities’ external audit system ‘ain’t broken’ as yet,” Mthembu told the M&G.

“In the absence of any cogent reasons [for the plan], those who claim this move is part of this wholesale attack on institutional autonomy … have every reason to think so.”

Belinda Bozzoli, the Democratic Alliance spokesperson on higher education and training, thinks Nzimande’s audit plan is another attack on institutional autonomy.

The former Wits professor told the M&G: “Universities are independent entities that run themselves; that is what university autonomy means.

“Of course they have to be audited, and they are audited. The trouble with the auditor general is that they impose lots [of] difficulties on institutions when it comes to audits,” she said. “I do worry about the state intervening multiple times in how universities are managed. In the end, it means university autonomy is damaged.”

But the Higher Education Trans­formation Network lobby group supports Nzimande’s plan. “Under this so-called institutional autonomy, universities have been able [to] appoint their own internal and external auditors.

“That’s an anomaly. You can’t handle state funds and yet you don’t account to treasury,” said Reginald Legoabe, its executive director.

Work has started
Makwetu’s office confirmed to the M&G that it has begun the work Nzimande requested from it.

“Due to conflicting legislative provisions, AGSA [the auditor general of South Africa] is working closely with the department to consider the possibility of playing an extended role in the audits of universities in future,” said the organisation’s spokesperson, Africa Boso.

“Currently, the AG’s involvement in the audits of universities involves providing university auditors with guidance on the audit, compliance with legislation and performance against predetermined objectives.”

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