MINISTERIAL STATEMENT ON
UNIVERSITY FUNDING: 2013/14 AND 2014/15
November 2012
Section A
INTRODUCTION
The Ministerial Statement is an annual Statement which deals with the funding instruments, and is issued
in accordance with the requirements of the Higher Education Act, 1997 (Act 101 of 1997) and the
funding framework (Government Gazette, No 25824 of 9 December 2003). There have been various calls
by universities to release the Ministerial Statement around July to ensure that universities could factor any
changes into their planning and budget for the following year. There were preliminary indications from
the National Treasury earlier in the year that all Departments’ Medium Term Expenditure Framework
(MTEF) baseline allocations will be reduced. However, following a detailed motivation provided by the
Department and various engagements with National Treasury, the universities’ baseline allocations over
the next three years has not been reduced. This is a clear indication, about Government’s commitments
towards funding higher education. It is important to emphasise that any budget information released by
the Ministry for a subsequent year before the budget is confirmed by National Treasury is subject to
change and should only be considered final after the budget is tabled by the Minister of Finance.
THE CONTEXT
This Ministerial Statement on University Funding contains:
 Changes to the government funding allocations in the 2013/14 and 2014/15 financial years;
 The budget allocations likely to be available for distribution to the universities for the 2013/14 and
2014/15 financial years and the division of funds among various budget subcategories;
 Shares of funded teaching input units, as well as the preliminary institutional factors, teaching and
research output unit totals of the sector;
 Policy details of how a university would be able to calculate its own share of the institutional
factor, teaching and research output unit totals of the sector, which also determines the university’s
share of 2013/14 and 2014/15 sub-block grant funding allocations; and
 Details of the weightings and benchmarks employed in the calculation of grants.
REVIEW OF THE FRAMEWORK AND CHANGES TO FUNDING ALLOCATIONS
This section provides an update of changes in policy which would impact on the distribution of
government funds towards universities.
A final report of the Ministerial Committee for the Review of the Funding of Universities will be
provided to the Minister by the end of 2012. Once the Minister has accepted the recommendations of the
Committee, the necessary consultative process will follow. In the interim, the Ministry had to introduce a
change to the research development grant within the existing regulatory framework to ensure ongoing
development in the university sector and the achievement of goals set. This amendment for research
development is explained in the relevant sections below.
In December 2011, National Treasury informed the Department of Higher Education and Training of
additional allocations to universities for infrastructure, totalling R150 million for 2012/13, R300 million
for 2013/14 and R400 million for 2014/15. These additional funds amounting to R850 million have
already been included in Table 1 below. National Treasury has also allocated additional amounts for
capital expenditure on the 2 new universities in the Mpumalanga and Northern Cape provinces of
R150 million for 2013/14 and R500 million for 2014/15, which have also been included in Table 1 below
MTEF BUDGET ALLOCATIONS FOR 2013/14 AND 2014/15
Table 1: Budgets to universities
Budget totals for the university sector
Budget category
2011/12
(R'000)
16 386 795
10 909 568
946 582
2 306 077
2 224 568
5 610 149
2 644 221
1 633 810
2012/13
(R'000)
17 433 861
11 658 601
1 011 573
2 537 108
2 226 579
6 846 900
3 377 902
1 800 000
2013/14
2014/15
(R'000)
(R'000)
1 Block grants
18 438 584
19 565 021
1.1 Teaching inputs
12 148 219
12 717 053
1.2 Institutional factors
1 054 055
1 103 392
1.3 Actual teaching outputs
2 712 979
2 974 475
1.4 Actual research outputs
2 523 331
2 770 101
2 Earmarked grants
7 643 478
8 504 965
2.1 NSFAS
1)
3 693 295
3 914 893
2.2 Infrastructure & output efficiencies
2 000 000
2 200 000
2.3 Capital funds for 2 new universities
150 000
500 000
2.4 Operational funds for 2 new universities
50 000
100 000
150 000
159 000
2.5 National Institutes in 2 provinces
41 000
43 050
45 418
48 143
2.6 Research development
6 808
176 820
176 820
187 429
2.7 Teaching development
419 920
499 000
575 000
609 500
2.8 Foundation programmes
176 953
194 033
204 705
236 560
2.9 Clinical training of health professionals
349 800
367 290
387 491
410 740
2.10 Veterinary Sciences
116 000
121 800
128 500
136 210
2.11 Merger multi-campuses
148 000
148 000
118 400
94 720
2.12 Interest & redemption on loans
19 637
14 605
9 255
7 770
2.13 African Institute for Mathematical Studies
4 000
4 400
4 594
0
TOTAL
21 996 944
24 280 762
26 082 062
28 069 986
1) Excludes funds towards the administration of the National Student Financial Aid Scheme (NSFAS)
Increase in budget from
previous financial year
2011/12 2012/13 2013/14 2014/15
12.8%
11.4%
11.4%
12.3%
21.1%
23.4%
69.3%
3.1%
6.4%
6.9%
6.9%
10.0%
0.1%
22.0%
27.7%
10.2%
5.8%
4.2%
4.2%
6.9%
13.3%
11.6%
9.3%
11.1%
100.0%
5.1%
5.0%
-95.9% 2497.2%
6.7%
18.8%
-4.3%
9.7%
6.0%
5.0%
13.7%
5.0%
0.0%
0.0%
-36.8%
-25.6%
0.0%
10.0%
15.3%
10.4%
50.0%
5.5%
0.0%
15.2%
5.5%
5.5%
5.5%
-20.0%
-36.6%
4.4%
7.4%
6.1%
4.7%
4.7%
9.6%
9.8%
11.3%
6.0%
10.0%
233.3%
6.0%
6.0%
6.0%
6.0%
15.6%
6.0%
6.0%
-20.0%
-16.0%
-100.0%
7.6%
Table 1 above sets out the Ministry’s division of funds among various budget subcategories and specific
points to note about are the following:
 From 2013/14 onwards, research development grants are no longer calculated within the block
grant. This step will ensure stability in the research development funds and is in line with the
recommendation of the Ministerial appointed Research Development Task Team in 2008. This step
has become a necessity owing to the university sector increasing its weighted research output
within one year (2010 to 2011) by 13,6% while the norm was increased in the 2012/13 financial
year by 13%. This has led to a total depletion of research development funds and the loss of the
ability to determine research development funds within the block grant. The distribution of
earmarked research development funds amongst universities is set out in Section C.
 As communicated in the 2011 Ministerial Statement, multi-campus factor grants for universities
that merged in 2004 and 2005 are being phased out and allocations to universities will gradually
diminish. The grant was introduced following the merger of universities and has served its purpose
which was to make up for the loss of some universities following the mergers. The allocation from
this grant will be absorbed back into the block grant.
2
CALCULATION OF A UNIVERSITY’S BLOCK GRANT FOR 2013/14 AND 2014/15
Block grants comprise of more than 70% of the total state budget towards universities. In order for a
university to determine its own share of the 2013/14 and 2014/15 block grants, Table 2 sets out the
funded unit total of the sector in each of the block grant sub-categories reflected in Table 1. The values in
Table 2 are the funded units of year (n-2), which is used in year (n-1) to calculate the budget for year (n).
Table 2: Block grant categories
Year 2010/11 2011/12
2012/13
Block grant categories
Funded teaching input units:
983 663 1 027 326 1 071 822
Institutional factor units:
81 499
84 624
87 020
Actual teaching output units:
117 907 125 959 134 272
Actual research output units:
15 679
17 429
18 659
1) Approved enrolment planning outcomes
2) Estimated values
2013/14
2014/15
1 119 033 1) 1 169 143 1)
89 535
92 900 2)
141 343
150 500 2)
21 200
23 500 2)
For a particular budget year, a university’s share of funded units in each of the 4 categories in Table 2
determines the university’s share of funds in each of the 4 sub-block grant categories in Table 1.
Section B provides the policy details for a university to determine its own funded unit totals and therefore
ultimately its own share in each of the 4 categories in Table 2. Such calculations by universities should be
regarded as preliminary until their funding allocations have been confirmed by the Ministry in writing.
EARMARKED GRANTS
Some details on the earmarked grants reflected in Table 1 are highlighted in Section C. This additional
information supplements policy statements which the Minister has already announced in formal letters to
universities for each earmarked subcategory.
RELIABILITY OF HIGHER EDUCATION MANAGEMENT INFORMATION SYSTEM
(HEMIS) DATA SUBMITTED BY UNIVERSITIES
The Department notes with concern the delay in receipt of some universities’ audit certificates and has
also identified inconsistent data from some universities. Both block grant calculations and progress
reports of earmarked funds depend heavily on reliable data submitted annually by universities to the
Department.
The Department will continue to monitor the reliability of the data in the Higher Education Management
Information System (HEMIS) submissions. If a review suggests that a university’s data submissions are
incorrect, then the university will be required to correct errors and submit new data files as well as those
of the past 3 years. If this is deemed necessary, the university’s block grants or earmarked funds for
specific years will be re-calculated for the past 3 years according to Section 11 (d) of the Prescription Act,
No 68 of 1969, and any over-payments for these 3 years will be deducted before new funds are paid to the
university.
The Department will also, when necessary, make adjustments to university data, if the report submitted
by its external auditors indicates that a university has not complied with the Department’s
policies/HEMIS directives, or if analyses undertaken by the Department indicate that a university’s data
submissions for block and earmarked funds are flawed.
3
Section B
Section B focuses on policy to calculate a university’s funded units within each of the 4 sub-block grant
categories of teaching input, teaching output, research output and institutional factors for 2013/14 and
2014/15.
1
THE TEACHING INPUT SUB-BLOCK GRANT
This section deals with 1) the calculation of actual teaching input units, 2) approved teaching input units
funded by the state, and 3) the difference between actual and funded teaching input units.
1.1
Actual teaching input units
For the calculation of actual teaching input units, the weighting factor of a cell in the grid
indicated in Table 3 will first be applied to the corresponding HEMIS unweighted enrolled fulltime equivalent (FTE) student total in that cell, thus generating weighted teaching input units for
the particular cell. The grand total of weighted teaching input units for a university for all funding
groups and course levels will then be the sum of the input units of all the grid cells.
Table 3: Funding weightings for teaching inputs: 2013/14 and 2014/15
Funding
Undergraduate
Honours
Masters
Doctoral
group
& equivalent
& equivalent
& equivalent
& equivalent
Contact Distance Contact Distance Contact Distance Contact Distance
1
1.0
0.5
2.0
1.0
3.0
3.0
4.0
4.0
2
1.5
0.75
3.0
1.5
4.5
4.5
6.0
6.0
3
2.5
1.25
5.0
2.5
7.5
7.5
10.0
10.0
4
3.5
1.75
7.0
3.5
10.5
10.5
14.0
14.0
The four funding groups in Table 3 consist of aggregations of the Classification of Educational
Subject Matter (CESM) categories, set out in Table 4.
Table 4: Funding groups for 2013/14 and 2014/15
Funding group
CESM categories included in funding group
1
07 education, 12 law, 18 psychology, 19 public administration and services
2
04 business, economics & management studies, 05 communication &
journalism, 06 computer & information sciences, 11 languages, linguistics &
literature, 17 philosophy, religion and theology, 20 social sciences
3
02 architecture & the built environment, 08 engineering, 10 family
ecology & consumer sciences, 15 mathematics & statistics
4
01 agriculture & agricultural operations, 03 visual and performing arts, 09 health
professions & related clinical sciences, 13 life sciences, 14 physical sciences
1.2
Approved teaching input units funded by the state
The funding framework requires teaching input funding to be based on planned and approved FTE
student enrolments. The Ministry consults with each university concerning these future student
4
enrolment targets. The enrolment targets are, in effect, a contract between the Department and
councils, requiring confirmation by each university council.
Table 5 sets out the funded totals of teaching input units per university for 2012/13 to 2015/16, as
reflected in the Ministerial Statement on Student Enrolment Planning of July 2011.
Table 5: Ministerial approved enrolled student headcount and teaching input units
MINISTERIAL APPROVED
ENROLLED STUDENT HEADCOUNT
UNIVERSITY
MINISTERIAL APPROVED
FUNDED TEACHING INPUT UNITS
YEAR 1)
2012/13
2013/14
2014/15
2015/16
2012/13
2013/14
2014/15
2015/16
YEAR 2)
2010
2011
2012
2013
2010
2011
2012
2013
55 028
53 037
51 118
33 420
32 960
32 512
32 167
CAPE PENINSULA UT
57 056
56 019
55 002
26 063
25 604
25 196
24 998
CAPE TOWN
17 783
17 327
16 882
11 099
11 250
11 443
12 578
CENTRAL UT
39 068
37 861
36 692
24 302
23 756
22 801
25 237
DURBAN UT
16 119
14 856
13 692
11 000
10 555
10 400
10 585
FORT HARE
55 784
52 250
48 941
32 594
32 250
32 113
30 272
FREE STATE
76 707
74 012
71 412
48 722
48 558
48 426
48 324
JOHANNESBURG
80 561
81 266
81 977
44 288
42 892
41 530
41 169
KWAZULU-NATAL
47 558
43 546
39 872
20 545
19 850
19 179
17 999
LIMPOPO
14 595
14 410
14 227
10 000
10 000
10 000
10 046
MANGOSUTHU UT
41 905
40 398
38 944
28 131
27 398
26 685
26 103
NELSON MANDELA
68 753
64 641
60 774
62 551
58 654
56 955
56 491
NORTH WEST
98 606
97 265
95 943
58 325
57 660
57 006
56 363
PRETORIA
14 691
13 967
13 278
7 645
7 576
7 390
7 192
RHODES
119 803
111 693
104 131
311 814
297 028
282 987
292 464
SOUTH AFRICA
62 043
58 501
55 161
27 639
27 351
26 956
27 351
STELLENBOSCH
87 666
83 098
78 768
56 000
55 172
54 344
53 516
TSHWANE UT
31 005
29 070
27 256
18 870
18 860
18 719
21 397
VAAL UT
20 527
18 578
16 814
11 000
11 000
11 000
10 678
VENDA
40 665
38 465
36 383
26 700
26 700
26 700
26 701
WALTER SISULU
37 465
35 385
33 420
19 485
19 165
18 572
18 031
WESTERN CAPE
64 491
63 562
62 647
30 500
30 500
30 500
30 040
WITWATERSRAND
21 264
19 829
18 490
15 017
14 978
14 619
14 587
ZULULAND
1 071 822 1 119 033 1 169 143
935 710
909 716
886 033
894 289
TOTAL
1) The State's financial year
2) The academic year of a university in which students are enrolled, which lags 2 years behind the financial year of the State's budget.
1.3
57 094
58 111
18 251
40 314
17 490
59 556
79 500
79 862
51 940
14 782
43 470
73 126
99 965
15 454
128 503
65 800
92 485
33 068
22 680
42 992
39 668
65 433
22 804
1 222 348
Differences between actual teaching input units and funded teaching input units
This section deals with the difference between the actual units calculated by a university in section
1.1, and the approved funded units as indicated in section 1.2 above for a particular year.
The goal set in 2007, that there should be no over- or under-enrolment of students in the university
sector, has not changed. Each university has to plan and manage its student admissions and
enrolment in order to ensure that, for a particular year, its actual teaching input unit total
calculated in section 1.1 converges to the planned and state funded teaching input unit total
approved by the Minister and indicated in Table 5.
The average over-enrolment in students in terms of teaching input units increased from 4,7% in
2008 to 8,2% in 2010, but then declined to 7,3% in 2011.
As part of an oversight role, universities that are unable to manage their actual enrolled student
headcount within a difference of 2% from the approved headcount enrolment targets, set by the
enrolment planning exercise, and also reflected in Table 5, will be required to submit detailed
plans to the Chief Directorate: University Academic Planning of the Department on how they
manage their student enrolment in an academic year. It should be noted that student headcount for
5
HEMIS is counted on a census date determined as the midpoint of the academic period for a
course.
The Ministerial Statement on Student Enrolment Planning 2011 to 2013 indicated that the
Department will make downward adjustments to the outer year’s institutional shares for
universities who under-enrol more than 2% below their approved headcount enrolment target.
Such changes will automatically reduce their FTE students and funded teaching input units.
Universities are discouraged to continue practices of over-enrolment since it negatively impacts
on the rand-value adjustments of Teaching Input Units. Over-enrolment will not necessarily lead
to the adjustment of the approved funded teaching input units.
The Chief Directorate: University Academic Planning and Management Support of the
Department will engage early in 2013 in enrolment planning negotiations with each university for
the new enrolment cycle 2014 to 2019 and will most probably complete the planned student
enrolment per university for 2014 by June 2013. Each university will be informed of their
enrolment targets for the period 2014-2019 by July 2013.
2
TEACHING OUTPUT SUB-BLOCK GRANT
The aim of this sub-block grant is to increase student graduates. Graduate data, instead of annual
student success rates, are the focus of teaching outputs, because graduate student heads are in
essence, the final teaching outcomes at universities.
Teaching output grant allocations are determined on the basis of an actual weighted total of
teaching outputs (in terms of units) produced by each university.
Funding of a university for the 2013/14 and 2014/15 financial years will respectively be based on
a university’s 2011 and 2012 actual totals of student graduate headcounts in HEMIS. Research
masters and doctoral graduates are excluded, as they are accommodated in the research output
sub-block grant.
The weightings for funding purposes to be applied to actual graduate outputs in order to obtain
funded units for a university are set out in Table 6 below. There is no distinction between the
teaching outputs of distance and of contact programmes.
Table 6: Funding weightings for both contact and distance teaching output programmes
Teaching output programmes
1 st certificates and diplomas of 2 years or less
1 st diplomas and bachelors degrees: 3 years
Professional 1st bachelor's degree: 4 years and more
Postgraduate and post-diploma diplomas
Postgraduate bachelors' degrees
Honours degrees/higher diplomas/pos-graduate diplomas approved under the new HEQF
Non-research masters degrees and diplomas
Weightings
0.5
1.0
1.5
0.5
1.0
0.5
0.5
6
3
RESEARCH OUTPUT SUB-BLOCK GRANT
The aim of this sub-block grant is to fund actual research outputs and simultaneously ensure
increased research output rates.
Research development funds will from 2013/14 no longer be calculated within the research output
sub-block grant. Only the actual weighted total of research outputs (in terms of units) produced by
a university will, from 2013/14 onwards, determine the research output sub-block grant allocation
per university. See Section C on earmarked research development grants.
Funding of a university for the 2013/14 and 2014/15 financial years will respectively be based on
a university’s 2011 and 2012 totals of actual publication units (books for the specialist, conference
proceedings, and articles in accredited journals), as well as HEMIS doctoral and research masters
graduate head counts.
The weightings for funding purposes to be applied to actual research output in order to obtain
funded research output units for a university are set out in Table 7 below.
Table 7: Funding weightings for research outputs for 2013/14 and 2014/15
Research output categories
Publication units
Research masters graduates
Doctoral graduates
4
Weightings
1
1
3
INSTITUTIONAL FACTOR SUB-BLOCK GRANT
This section contains 2 factors, namely 1) the proportion which a university has of students from
disadvantaged backgrounds, and 2) university size in terms of FTE student enrolment.
4.1
Grants for universities with large proportions of disadvantaged students
The aim of this grant is to increase the participation, success and graduation rates of black
students in general and African and Coloured students in particular. This grant for disadvantage
deems disadvantaged students to be African and Coloured students who are South African
citizens.
For a contact tuition university, a calculation is first made, using HEMIS data, of the proportions
it has of disadvantaged students in its 2011 contact FTE enrolled student total. A disadvantage
weighting factor is then determined for the university. This factor is 0 for a university whose
proportion of disadvantaged students is 40% or less, and increases linearly up to a maximum 0,10
at a disadvantaged proportion of 80%. The factor remains 0,10 for a university whose proportion
of disadvantaged students is between 80% and 100%. For 2013/14, additional 2011 funding
teaching input units are then generated by multiplying its disadvantage factor by the university’s
approved 2011 funded total of contact plus distance teaching input units set out in Table 5 for the
2013/14 financial year.
For the dedicated distance university, the calculation of the disadvantage factor is based on the
proportion of disadvantaged students which it has in its 2011 distance FTE enrolled student total.
7
The same calculations can be made for 2014/15, using 2012 HEMIS FTE enrolled student data.
4.2
Grants related to the size of universities
The size factor takes account of economies of scale as the FTE enrolment size of a university
increases. The institutional size factor is used to give additional teaching input units to small
universities, depending on the size of their FTE student enrolments. The institutional size factor
amounts to 0,15 for universities with up to 4 000 contact plus distance FTE (unweighted) students,
after which it decreases linearly to 0 for universities with totals of 25 000 or more contact plus
distance FTE students (unweighted). For 2013/14, additional 2011 funding units are then
generated by multiplying its size factor by the university’s approved funded total of contact plus
distance teaching input units set out in Table 5 for the 2013/14 financial year.
The same calculations can be made for 2014/15, using 2012 HEMIS FTE enrolled student data.
8
Section C
1
2
3
4
5
6
7
8
Teaching Development Grant
Foundation Provision Grant
Research Development Grant
Clinical Training Grant
Veterinary Sciences Grant
Infrastructure and Efficiency Grant
National Student Financial Aid Scheme
Multi-campus Grant
Section C focuses on presenting budgets per university of certain earmarked sub-categories for 2013/14
and 2014/15, in line with the context of this Ministerial Statement.
1
TEACHING DEVELOPMENT GRANT
The aim of these funds is to provide financial support to all universities to improve their
graduation rate (the graduation rate is the number of student graduate heads relative to the head
count of enrolled students in a particular year).
The focus of teaching development funds is to target the reduction of annual unsuccessful students
from under-graduate level up to the level of taught masters. The target is therefore to increase the
annual student success rate. These increases should ultimately lead to a higher graduation rate.
The teaching development allocations per university are reflected in Table 8 below.
Table 8: Earmarked teaching development shares and funding allocations
Migration strategy
to new shares
UNIVERSITY
CAPE PENINSULA UT
CAPE TOWN
CENTRAL UT
DURBAN UT
FORT HARE
FREE STATE
JOHANNESBURG
KWAZULU-NATAL
LIMPOPO
MANGOSUTHU UT
NELSON MANDELA
NORTH WEST
PRETORIA
RHODES
SOUTH AFRICA
STELLENBOSCH
TSHWANE UT
VAAL UT
VENDA
WALTER SISULU
WESTERN CAPE
WITWATERSRAND
ZULULAND
TOTAL
Funding allocations
2013/14
2014/15
2013/14
2014/15
(%)
(%)
(R'000)
(R'000)
2.247
1.390
1.966
2.306
1.115
4.474
7.385
3.646
1.896
1.995
2.863
1.904
3.666
0.428
33.206
1.613
8.321
3.428
1.199
6.153
2.073
3.996
2.731
100.000
3.370
1.968
2.476
3.459
1.287
4.970
8.036
4.433
1.839
1.250
3.752
2.856
4.531
0.643
22.839
2.405
11.354
3.477
1.538
5.759
1.880
3.471
2.407
100.000
12 918
7 992
11 302
13 259
6 409
25 725
42 466
20 964
10 902
11 473
16 462
10 949
21 077
2 463
190 933
9 274
47 848
19 710
6 892
35 379
11 923
22 977
15 703
575 000
20 541
11 992
15 092
21 081
7 844
30 290
48 982
27 018
11 209
7 617
22 871
17 408
27 619
3 917
139 205
14 659
69 203
21 190
9 373
35 101
11 462
21 155
14 673
609 500
9
As was communicated in the previous Ministerial Statement, from 2012/13, a new method of
calculating teaching development funds was approved, based on the number of unsuccessful
students in each university and weighing the unsuccessful students in the lowest performance.
This is a totally different mechanism from what was used between 2005/06 to 2011/12. It also
stabilises the shares of funds per university. The basis of determining a share of available funds
for a university was to first determine the FTE student success rate (%) and total FTE
unsuccessful students of each university, and then to weigh the FTE unsuccessful students of the
universities having low success rates and larger proportions of unsuccessful FTE students with a
maximum weighting of 1,5. A migration strategy has been introduced since 2012/13.
Detailed policy concerning teaching development funds will be formalised and the content of
progress reports on the use of these teaching development funds will be strengthened in the future.
In addition, the Department will be monitoring the qualitative use of the funds to ensure that they
are utilised for improving student success rates. In the interim, the criteria for teaching
development funds has been strengthened and focus will be more on staff development to improve
teaching and learning.
2
FOUNDATION PROVISION GRANT
Foundation provision funds complement teaching development funds. The primary purpose of
foundation provision is to improve the academic performance of students who are at risk of
dropping out due to their poor educational backgrounds. Such students are placed on Ministerial
approved extended curriculum programmes, which are in most cases one year longer than the
regular qualification. Additional earmarked funds are provided to universities, as the extended
nature of the curriculum of these students requires more effort from universities to maintain.
Both teaching development funds and foundation provision funds aim to increase the graduation
rate of a university. Any improvement in the graduation rate is again to the benefit of a university,
as additional graduates are also funded within the teaching output sub-block grant.
The Minister has appointed 6 persons from the university sector to act as a reference group in
advising on foundation provision policy and the approval of extended curriculum programmes
submitted by universities. New policy has been distributed to universities in June 2012.
Weighted FTE foundation students are annually funded in 2 ways simultaneously:
 By generating teaching input subsidy within the teaching input sub-block grant; and
 Through the distribution of earmarked (ring-fenced) state funds for foundation purposes.
For earmarked foundation funding, FTE enrolled foundation students are weighted according to 3
groups of CESM categories as set out in Table 9.
For the triennium 2010-2012, universities were required for the first time to submit info on
foundation students in HEMIS as well as in their progress reports. HEMIS data has confirmed the
data in university progress reports that many universities have not reached their own foundation
student enrolment targets for which the Department has made available earmarked funds per
university. Some universities are currently over-funded in their earmarked allocation, whilst
others have over-enrolled. Current funding shares of the earmarked foundation funding are
10
therefore distorted compared to the shares of actual weighted FTE foundation student enrolments
reflected in HEMIS.
Table 9: CESM categories and weightings of FTE foundation students for earmarked funds
Funding group
Science
and
technology
Business
Humanities
CESM categories included in funding group
01 agriculture and agricultural operations, 02 architecture & the built
environment, 06 computer & information sciences, 08 engineering,
09 health professions & related clinical sciences, 10 family ecology &
consumer sciences, 13 life sciences, 14 physical sciences,
15 mathematics & statistics
04 business, economic & management studies
03 visual and performing arts, 05 communication and journalism,
07 education, 11 languages, linguistics & literature, 12 law,
17 philosophy, religion and theology, 18 psychology,
19 public administration and services, 20 social sciences
Weightings
2.0
1.5
1.0
For the next 3 years starting 2013/14, a funding migration strategy is implemented to align the
distorted funding allocation shares with shares based on audited historical HEMIS student data.
This funding migration strategy will on a rolling basis take into account the total weighted FTE
foundation student enrolments for each university and for the sector recorded in HEMIS.
Foundation provision is now firmly established as a funding category in the funding framework.
Therefore, policy has moved away from 3-year budget cycles to set aside funds for foundation
provision. State budgets per university for year (n+1) will be announced at the end of year (n), and
will be based on audited HEMIS data of year (n-1).
Table 10 reflects the foundation provision grants per university for 2013/14.
Table 10: Earmarked foundation provision grants for 2013/14
YEAR
UNIVERSITY
CAPE PENINSULA UT
CAPE TOWN
CENTRAL UT
DURBAN UT
FORT HARE
FREE STATE
JOHANNESBURG
KWAZULU-NATAL
LIMPOPO
MANGOSUTHU UT
NELSON MANDELA
NORTH WEST
PRETORIA
RHODES
SOUTH AFRICA
STELLENBOSCH
TSHWANE UT
VAAL UT
VENDA
WALTER SISULU
WESTERN CAPE
WITWATERSRAND
ZULULAND
TOTAL
2012/13
2013/14
(R'000)
(R'000)
14 823
9 019
3 260
3 116
6 466
11 757
19 783
8 729
6 149
2 930
10 395
9 796
9 544
1 670
13 146
3 910
20 847
2 894
3 531
13 895
13 811
1 306
3 256
194 033
16 936
10 232
3 065
3 264
6 571
13 458
23 859
10 356
7 401
3 596
9 244
9 888
10 925
1 458
10 074
4 525
22 735
3 482
4 035
11 049
14 158
1 184
3 210
204 705
11
Earmarked state foundation funds allocated to universities may be used for staffing and running
costs, materials development costs, and minor equipment costs (equipment with a unit cost of
under R15 000). A university may use its total state allocation for foundation provision across
various Ministerial approved extended curriculum programmes. About 1% of foundation funds
allocated to a university should be used to train staff whom are responsible for the provision of
formally approved extended curriculum programmes to foundation students.
A university may not use earmarked, or ring-fenced, foundation state funds for other purposes
than foundation provision. Unspent earmarked state funds in a particular academic year must be
transferred to subsequent academic years and spent in these years on foundation provision.
Foundation funds may not be used for the following purposes:
 major capital purchases (equipment with a unit cost of R15 000 or higher);
 construction or renovation of buildings;
 bursaries for students;
 funding of fee reductions for students.
3
RESEARCH DEVELOPMENT GRANT
The aim of research development funds is to provide financial support mainly to universities with
low research masters graduates, doctoral graduates and research publication units (books for the
specialist, conference proceedings, articles in accredited journals) with the view to increase these
particular outputs. In some cases, universities would first be required to focus on increasing their
percentage instruction/research staff with masters and doctoral degrees to achieve these goals.
It is encouraging that the 11 universities performing low in research output, continue to perform
above the average for the sector, and that these universities, which contain 30% of all permanent
instruction/research staff members in the university sector, have increased their share of total
weighted research output produced in the sector from 6,7% in 2002 to 11,0% in 2011.
From 2013/14 onwards, research development grants are no longer calculated within the block
grant. Research development funds are taken out of the block grant. This step has become a
necessity owing to the university sector increasing its research output within one year (2010 to
2011) by 13,6% while the norm was increased in the 2012/13 financial year by only 13%. This
has led to a total depletion of research development funds and the loss of the ability to determine
research development funds within the block grant for 2013/14. Research development funds were
depleted in 2011/12, as indicated in Table 1, which necessitated an increase in the research output
norms in order to secure a pool of R176,820 million within the block grant for research
development funds for 2012/13, and this step adversely affected many universities.
A total of R176,820 million for 2013/14 and R187,429 million for 2014/15 have been secured for
research development purposes.
The emphasis in the distribution of these earmarked funding amongst universities is to ensure a
more equitable distribution of research development funds amongst universities whilst still
remaining within the parameters of the existing policy framework.
To accomplish these interim goals, the following principles were applied:
12



The policy of calculating a shortfall in research output units for a university, as set out in
Paragraph 3 of Section B of the Ministerial Statement of September 2011, namely the
difference between a normative total of research output units and actual total of research
output units produced by the university, has been applied to each university. Furthermore, in
these calculations, research output weighted for funding purposes still consists of the sum of
masters graduates (weighted by 1), doctoral graduates (weighted by 3) and research
publication units (weighted by 1);
The policy of accommodating universities within 3 broad groups of norms remains
unchanged. However, the universities within each of the 3 broad groups have changed;
Norms in terms of research output units per permanent instruction/research staff member have
been increased in such a manner that each university reflects a shortfall, and are therefore
entitled to research development funds. The norms within each of the 3 broad groups of
universities are 1,1, 1,7 and a maximum of 2,5. The norms per university are set out in Table
11 below:
Table 11: Research output norms for 2013/14 to 2015/16 1)
UNIVERSITY
Research norms 1)
YEAR
CAPE PENINSULA UT
CAPE TOWN
CENTRAL UT
DURBAN UT
FORT HARE
FREE STATE
JOHANNESBURG
KWAZULU-NATAL
LIMPOPO
MANGOSUTHU UT
NELSON MANDELA
NORTH WEST
PRETORIA
RHODES
SOUTH AFRICA
STELLENBOSCH
TSHWANE UT
VAAL UT
VENDA
WALTER SISULU
WESTERN CAPE
WITWATERSRAND
ZULULAND
2012/13
2013/14 - 2015/16
0.5650
1.4125
0.5650
0.5650
1.4125
1.4125
1.0961
1.4125
1.4125
0.5650
1.0509
1.4125
1.4125
1.4125
1.3108
1.4125
0.5650
0.5650
1.4125
0.8249
1.4125
1.4125
1.4125
1.1
2.4
1.1
1.1
2.1
1.7
1.7
1.7
1.1
1.1
1.7
1.7
2.2
2.5
1.1
2.5
1.1
1.1
1.1
1.1
2.0
2.1
1.1
1) Norms in terms of weighted research output units
per permanent instruction/research staff member


The former group of universities in which each comprehensive university had its own unique
norm has been applied to the group of universities with norms above 1,7, as reflected in Table
11; and
The shares of shortfall units calculated by using the norms set out in Table 11 and the 2011
actual research outputs per university were “frozen”, so that the university sector can migrate
towards these funding shares up to 2015/16. The shares of research development funds from
13
2013/14 to 2015/16 are set out in Table 12 and remain unchanged for the next 3 years even
though a university may exceed its new norm. This will ensure stability in research
development funds per university for the next 3 years.
Table 12 reflects the funding allocations per university for 2013/14 and 2014/15, based on the
shares in shortfalls in actual research output units indicated in Table 12.
Table 12: Earmarked research development shares and funds
Share of research
development funds
UNIVERSITY
CAPE PENINSULA UT
CAPE TOWN
CENTRAL UT
DURBAN UT
FORT HARE
FREE STATE
JOHANNESBURG
KWAZULU-NATAL
LIMPOPO
MANGOSUTHU UT
NELSON MANDELA
NORTH WEST
PRETORIA
RHODES
SOUTH AFRICA
STELLENBOSCH
TSHWANE UT
VAAL UT
VENDA
WALTER SISULU
WESTERN CAPE
WITWATERSRAND
ZULULAND
TOTAL
4
Funding allocations
2012/13
2013/14
2014/15
2015/16
2012/13
2013/14
2014/15
(%)
(%)
(%)
(%)
(R'000)
(R'000)
(R'000)
4.04
0.00
2.24
5.55
1.22
2.23
0.00
0.00
22.11
2.09
0.00
5.57
0.00
0.00
22.77
0.00
2.77
3.08
8.16
11.90
1.38
0.00
4.89
100.00
5.44
0.83
2.51
6.02
1.69
2.78
1.18
1.51
17.61
2.31
0.95
6.60
1.06
0.51
17.15
0.55
4.13
3.34
6.23
10.89
2.28
0.56
3.87
100.00
6.84
1.65
2.77
6.50
2.15
3.32
2.37
3.02
13.12
2.53
1.90
7.63
2.12
1.03
11.53
1.10
5.48
3.59
4.29
9.89
3.19
1.13
2.86
100.00
8.24
2.48
3.03
6.98
2.62
3.87
3.55
4.53
8.62
2.75
2.85
8.66
3.18
1.54
5.91
1.65
6.83
3.85
2.35
8.88
4.09
1.69
1.84
100.00
7 137
0
3 965
9 806
2 155
3 943
0
0
39 090
3 703
0
9 856
4
0
40 258
0
4 906
5 448
14 431
21 036
2 442
0
8 640
176 820
9 616
1 460
4 430
10 653
2 983
4 908
2 094
2 668
31 142
4 090
1 681
11 674
1 878
908
30 320
972
7 294
5 901
11 007
19 257
4 039
998
6 847
176 820
12 821
3 094
5 190
12 190
4 039
6 225
4 440
5 656
24 586
4 746
3 563
14 302
3 976
1 926
21 605
2 060
10 263
6 734
8 039
18 527
5 974
2 116
5 357
187 429
CLINICAL TRAINING GRANT
The Health Sciences Review Committee (HSRCom) will now be replaced by a joint strategy,
policy and financing committee for Health Sciences Education, which will be called the Joint
Health Science Education Strategic Committee. The joint Committee will be chaired by both the
Department of Higher Education and Training and the Department of Health. The Joint Health
Science Education Strategic Committee is tasked amongst other things, with the continuation of
the work done by the original HSRCom and will create a collaborative process for determining
production needs, demand and supply of health professionals, and ensuring effective financing of
health professional expansion by the relevant grants (Department of Higher Education and
Training [DHET] block grant, the Clinical Training Grant and the Health Professionals Training
Development Grant).
The allocation of the Clinical Training Grant for 2012/13 onwards will be made in line with the
programmes approved in 2010/11 and 2011/12 and any new programmes will be considered by
the Minister on recommendation from the Joint Health Science Education Strategic Committee.
14
Any additional programmes within the current MTEF baseline allocation will need to be
considered.
The Joint Health Science Education Strategic Committee is currently tasked with work on the
expansion of the Clinical Training Grant for the unfunded categories and the refinement of costing
of the Clinical Training Grant for all funded categories.
The clinical training grants for 2013/14 according to university are reflected in Table 13 below.
Table 13: Earmarked Clinical Training Grant for 2013/14
YEAR
UNIVERSITY
CAPE PENINSULA UT
CAPE TOWN
CENTRAL UT
DURBAN UT
FORT HARE
FREE STATE
JOHANNESBURG
KWAZULU-NATAL
LIMPOPO
MANGOSUTHU UT
NELSON MANDELA
NORTH WEST
PRETORIA
RHODES
SOUTH AFRICA
STELLENBOSCH
TSHWANE UT
VAAL UT
VENDA
WALTER SISULU
WESTERN CAPE
WITWATERSRAND
ZULULAND
TOTAL
5
2012/13
2013/14
(R'000)
(R'000)
5 239
36 570
2 012
5 348
4 151
21 464
6 032
61 733
38 906
379
6 437
6 836
37 796
658
0
32 571
3 338
1 880
2 627
12 986
25 971
51 036
3 320
367 290
5 528
38 581
2 122
5 643
4 379
22 644
6 364
65 127
41 046
400
6 791
7 212
39 875
695
0
34 362
3 521
1 983
2 772
13 700
27 400
53 843
3 503
387 491
VETERINARY SCIENCES GRANT
The Minister approved allocations to the University of Pretoria, North West University, Tshwane
University of Technology and the University of South Africa for 2012/13 and preliminary
allocations for 2013/14 and 2014/15 are being considered. Most of the funds are allocated to the
University of Pretoria, which is responsible for the animal hospital. Unlike hospitals for humans
which are funded by the Department of Health, the animal hospital is not funded by any other
state Department. Table 14 presents the preliminary allocations per university for 2012/13 to
2014/15.
15
Table 14: Preliminary Earmarked funds for Veterinary Science Programmes
Year 2012/13
2013/14
2014/15
University
(R'000)
(R'000)
(R'000)
North West
3 000
3 500
3 500
Pretoria
116 800
122 500
130 210
South Africa
1 000
1 000
1 000
Tshwane UT
1 000
1 500
1 500
Total
121 800
128 500
136 210
6
INFRASTRUCTURE AND EFFICIENCY GRANT
The 2011 Ministerial Statement indicated that a different approach has been taken with the
allocation of infrastructure funds for the period 2012/13 onwards. Some of the key factors taken
into account during the allocation process was funds allocated to universities in the previous
funding cycles, the progress of projects and trends on spending as well as interest earned and
savings realised which required the Minister’s approval prior to using the interest earned.
Some of the guiding principles, priorities and criteria that have informed preliminary allocations,
include: alignment with Performance Monitoring and Evaluation (PME) targets and enrolment
planning requirements; cooperative projects and efficiencies for the system needs; uplifting
Historically Disadvantaged Institutions (HDIs)/ rural campuses; need for student housing;
sustainability of university contributions in some as opposed to reserves in others; current
progress on projects and historical spending trends; better cash flow projections for projects to
prevent ‘under spending’ in a specific year; cross “fertilization” of ideas and practices; provision
for persons with disabilities; and alignment with other funding through the National Research
Foundation (NRF)/Department of Science and Technology (DST) providing minimum
infrastructure in terms of well-founded laboratories.
Preliminary plans and costing for different funding categories was submitted to the Department at
the end of February 2012. The amount of applications received far exceeded the amount available.
The Department requested universities to provide a list of top five priority projects, given that the
assessment of the applications showed that the demand for infrastructure funding far exceeded the
amount available. Following the submissions by all universities of their top five priorities, the
Department engaged with all universities.
Table 15 gives the infrastructure and efficiency funding allocations per priority area over a three
year period, between 2012/13 and 2014/15.
The Minister approved the extension of the allocation period to include 2014/15 which brings the
total amount available for the three years to R6 billion. This amount excludes the new funds from
National Treasury earmarked for capital expenditure on the 2 new universities in the Mpumalanga
and Northern Cape provinces. Of the R6 billion, R184,2 million has been set aside for Information
and Communication Technology (ICT) needs of universities and will be allocated in a separate
process. An amount of R210 million has also been set aside for the re-capitalisation of Medunsa
campus, as a stand-alone Medical University.
The infrastructure funding made available to universities, represent a significant investment by
government, particularly in the current economic and financial climate. These funds must be
16
utilised to address the transformation agenda of the country in addition to being used prudently
and efficiently to respond to the national shortages of scarce and critical skills in areas such as
engineering, health sciences, life and physical sciences and teacher training. It is for this reason
that some universities with capacity constraints have been allocated funding to assist with
improving their project management to ensure that there is value for money in all infrastructure
projects.
The Ministry is concerned about the low number of students with disabilities and funding has
been allocated to all universities to carry out an infrastructure audit and provide equipment such as
lifts, ramps and Braille equipment.
Table 15: Infrastructure and efficiency funding over 3 years, including 2014/15
Category of
University
Historically
disadvantaged
universities (HDIs)/
campuses
Universities/campuses
other than HDIs
All universities
Total
Funding categories
Student housing upgrading and new
Infrastructure backlog upgrading and new
Student housing upgrading and new
Teacher Training meeting scarce skills
needs
Health sciences meeting scarce skills
needs
Engineering - meeting
scarce skills needs
Life and Physical
Sciences - meeting
scarce skills needs
Cooperative Projects partnerships with HDIs
Development of African
Languages, Humanities
and the Social Sciences
Disability units upgrading and new
Research infrastructure
- well founded
laboratories
Project Management
ICT
Medunsa
Total
allocation
(R'000)
1 412 638
1 119 195
239 136
662 460
442 519
509 079
546 721
114 500
311 654
123 835
74 053
50 000
184 209
210 000
6 000 000
The infrastructure site visits undertaken by the Department revealed a number of concerns about
the state of infrastructure across a number of universities particularly on lack of adequate
provision of maintenance in some universities. As a result, all universities have been requested to
17
submit a comprehensive maintenance plan outlining how old and new infrastructure will be kept
to the required minimum standard.
To ensure that infrastructure funding allocations are in line with the needs and expansion of the
sector, universities have been requested to submit medium and long term infrastructure plans in
line with its growth trajectory over the next 10-20 years before 31 March 2014. These plans will
be used as the basis for the next infrastructure funding cycles.
7
NATIONAL STUDENT FINANCIAL AID SCHEME GRANT
Following the publication of the report of the Ministerial Review Committee of the National
Student Financial Aid Scheme (NSFAS) in March 2010, the Minister approved the
implementation of a number of recommendations for improving the efficiency and effectiveness
of the Scheme. These include the amendment of the NSFAS Act (Act 56 of 1999 as amended) to
bring it in line with the Constitution and the National Credit Act (Act 34 of 2005), which was
approved by Parliament and promulgated on 14 December 2011. Other recommendations which
have been implemented include increasing the pool of funds available for student financial aid.
The Department's success in implementing the latter recommendation is reflected in the
substantial increases in funds for student financial aid in both 2011 and 2012. The introduction of
a new funding category, the Final Year Programme totalled R851 million in 2011 and R1 billion
in 2012. The purpose of increasing funding for the Final Year Programme was twofold: to
incentivise final year students to pass all of their subjects and graduate; and to achieve the goal of
improving access by correspondingly increasing the pool of funds available for first and second
year students, that is by R851 million in 2011 and R1 billion in 2012. This level of funding will
also be provided in the following years. NSFAS is currently conducting research on the
implementation and effectiveness of the Final Year Programme and will report its findings and
recommendations to the Minister by the end of the year.
One of the main findings of the Review was that the NSFAS Loans Management System was
outdated and wholly inadequate for the disbursement of billions of rands annually in compliance
with the Public Finance Management Act (PFMA) (Act 1 of 1999 as amended). A new core loans
and bursaries management system has been designed, which will introduce a student-centred
model of financial aid. The new model will enable NSFAS to establish a direct relationship with
students from the time they are learners in school, throughout their studies to the time they
graduate, become employed and start repaying their student loans.
The core principles of NSFAS funding will remain unchanged, notably that NSFAS will continue
to provide bursaries in some fields of study and income contingent loans in all fields. Full
bursaries will continue to be granted to students with disabilities and to those studying for
qualifications in scarce skills. Bursaries and loans will continue to be made to eligible students at
all 23 public universities, and eligibility will be determined by a means test administered by
NSFAS. The conversion of 40 per cent of a loan to a bursary will continue to apply for good
academic performance.
The new model will enable NSFAS to identify potentially eligible students from Grade 9 by
providing learners with information on the availability of student financial aid at the same time
and through the same channels that they receive career guidance and information on studying at
university.
18
Students will be able to apply directly to NSFAS while they are in Grade 12 through a variety of
channels, including university Financial Aid Offices, regional offices of NSFAS and the DHET,
Post Offices and Multipurpose Service Centres. Applications will be made in a variety of ways,
from the current paper application forms sent to NSFAS by post or fax, to online and cell phone
applications. Students who qualify for loans will receive the Full Cost of Study (FCS) as defined
by the means test to cover tuition and residence fees, meals, transport and private accommodation
where applicable. NSFAS will make payments for tuition and residence fees directly to
universities on behalf of successful applicants. Payments of other allowances will be made by
NSFAS directly to students.
The new model is being designed in 2012 for piloting in 2013. Students applying for a variety of
funding in 2013 to finance studies in the 2014 academic year will apply using the new system.
NSFAS will continue to engage all stakeholders, including university managements, staff and
students, on implementation of the new system throughout this period.
8
MULTI-CAMPUS GRANT FOR MERGED UNIVERSITIES
A brief history of the multi-campus grants was presented in the Ministerial Statement of
September 2011. The grant was initially introduced in 2004/05 to assist universities which merged
with each other. Eight newly established universities have received merger multi-campus funds,
where the campuses involved were the original main campuses of separate universities. Multicampus grants paid to these 8 universities from 2004/05 up to 2013/14 amount to R1,2 billion. An
additional R3 billion was also made available to these particular universities for merger related
activities during their merger exercises.
Merger multi-campus grants for universities that merged in 2004 and 2005 are being phased out as
from 2013/14 onwards. The multi-campus funding allocations for merged universities are
reflected in Table 16 below.
Table 16: Multi-campus grants for merged universities
University
2013/14
2014/15
(R'000)
(R'000)
Cape Peninsula UT
12 960
10 368
Johannesburg
12 480
9 984
KwaZulu-Natal
16 320
13 056
Limpopo
6 240
4 992
Nelson Mandela
11 600
9 280
North West
24 560
19 648
Tshwane UT
11 360
9 088
Walter Sisulu
22 880
18 304
TOTAL
118 400
94 720
19
SECTION D: CONCLUSION
The current economic and financial environment places enormous responsibilities on all spheres
of government to do more with less. The transfers (subsidies) to universities are government’s
contribution towards meeting the needs of a developmental state while trying to remain globally
competitive. The volatility in the global financial system has had a huge impact on the revenue
raising capability of the country. Funding made available to universities, represent a significant
investment by government, particularly in the current economic and financial climate. These funds
must be utilised to address the transformation agenda of the country in addition to being used
prudently and efficiently to respond to the national shortages of scarce and critical skills.
20