annual report COUNCIL ON HIGHER - CHE

The Year in PerspectiveFurthermore, the role of quality assurance, inaddition to funding and planning, as a steering leverto achieve national policy goals and objectivesremains undeveloped. This is a major lacuna inthe implementation of the policy framework for thetransformation of the higher education system, andits operationalisation needs to be jointly exploredwith the DHET, which is responsible for funding andplanning. It would also require strengthening of themonitoring and evaluation role of the CHE, which isweak. This is critical, as monitoring and evaluation isthe axis around which the link between qualityassurance, funding and planning needs to be built.There has been steady progress in giving effect tothe expanded mandate of the CHE as a QualityCouncil. A long overdue review of the HEQF toaddress identified gaps and inconsistencies wasinitiated towards the end of the year and should befinalised in the latter half of 2011, and the processfor developing a standards development frameworkbegan in earnest in early 2011 with the establishmentof a standards development directorate and theappointment of senior staff.and systems. In addition, the Council approved anew and slightly modified organisational structure,including the establishment of a StandardsDevelopment Directorate in line with the expandedmandate and re-establishing the National ReviewsDirectorate, which has been dormant since 2008because of budgetary constraints. It has beenre-established as, aside from the impact of nationalreviews on the improvement of quality at theprogramme level, which was highlighted by theexternal review of the HEQC in 2008, nationalreviews also have a critical to role play in contributingto the development of standards at the disciplinarylevel.In conclusion, although much still remains to bedone, the preoccupation in the past year withcritically reviewing and reflecting on the coremandate and organisational challenges faced bythe CHE has laid the basis for the renewal andrevitalisation of the CHE, thus enabling it tocontribute to the ongoing challenge of transformingthe higher education system.It goes without saying that if the CHE is to effectivelydischarge its mandate, an enabling and effectiveorganisational environment is a precondition.Although the strengthening of governance andmanagement processes was begun in 2008, it wasclear that significant organisational challengescontinued to impact adversely on the operationalefficiency and effectiveness of the CHE. Addressingthese challenges was a major focus and took asignificant portion of time and effort. This includedreviewing and revising the human resource policies,processes and systems, benchmarking the CHEsalary structure against the private, public and highereducation sectors as a first step in developing anappropriate recruitment and retention strategy andundertaking a comprehensive compliance audit toidentify gaps and weaknesses in existing controlsAhmed EssopChief Executive OfficerCouncil on Higher EducationAugust 2011CHE ANNUAL REPORT 2010 - 201105

COUNCIL MEMBERSProf NC ManganyiChairpersonDr Y DladlaCouncil MemberProf M FourieCouncil MemberProf B ThaverCouncil MemberMs M LedwabaCouncil MemberDr J LewisCouncil MemberDr N LuruliCouncil MemberDr B MasukuCouncil MemberCOUNCIL MEMBERSCHE ANNUAL REPORT 2010 - 201106Prof L MojaCouncil MemberMr E NxumaloCouncil MemberProf Y BallimCouncil MemberDr Z SosiboCouncil MemberProf S MotalaCouncil MemberDr W RowlandCo-opted MemberMs D NdabaCouncil MemberProf R StumpfCo-opted Member

COUNCIL MEMBERSMs J GlennieCo-opted MemberMr R KatzMr V van VuurenProf G PerezCouncil MemberCouncil MemberCouncil Member(until December 2010) (until December 2010) (until December 2010)Ms L AbrahamsCouncil Member(until December 2010)EX-OFFICIO MEMBERSEX-OFFICIO MEMBERSMr A EssopCEOMr S IsaacsSAQADr M RakometsiUMALUSIMs K MenonDHETDr A van JaarsveldtNRFDr M QhobelaDSTCHE ANNUAL REPORT 2010 - 201107

FULFILLING THE MANDATE OF THE CHEAdvising the Minister of Higher Education and TrainingCHE ANNUAL REPORT 2010 - 2011In terms of the Higher Education Act, the CHE has adual advisory function: providing advice at therequest of the Minister of Higher Education andTraining and providing advice on its own initiative inresponse to critical issues identified by the CHE thatimpact on the higher education system.The two issues on which the CHE had intendedto provide advice to the Minister, namely theimplications and appropriateness of introducing of afour-year undergraduate curriculum to address lowthroughput and undergraduate rates and efficacy ofthe funding formula as a steering mechanism forachieving national policy goals and objectives, wereput on hold. With regard to the four-year curriculum,this was done in order to engage with the Minister onhis views on the need for a review of the curriculumstructure, given that the initial impetus for the projectfollowed from a meeting of the Presidential WorkingGroup in 2008, where the issue was raised by HigherEducation South Africa (HESA) but no formalrequest was received from the then Minister ofEducation.With regard to the funding formula, the decision notto proceed with the planned review was informed bythe announcement by the Minister that he intendedto establish a working group to review the fundingframework.The Council met with the Minister at the end ofSeptember 2010. There was a wide-rangingdiscussion on the key issues in higher education,including the Ministry’s priorities and plans fordealing with them. The Minister indicated that hewould welcome advice on the four-year curriculum,which due to capacity constraints will be takenforward in the course of 2011. It was also agreed thatthe CHE would convene a consultative workshop tofacilitate discussion on the establishment of aNational Stakeholders Forum based on theresolution of the Higher Education Summit in April2010. The workshop, which was attended by theMinister, was held in November 2010 and concludedthat the Ministry should initiate further discussions toclearly delineate the role, function and compositionof the proposed National Stakeholders Forum.The Council expects that as the newly establishedDepartment of Higher Education and Training isconsolidated and its priorities and plans are clarified,the advisory function of the CHE will gainmomentum.08

Monitoring the State of Higher EducationMonitoring the State ofHigher EducationThe CHE is responsible for monitoring andinterpreting trends and progress towards achievingnational policy goals and objectives in highereducation, as well as for promoting debate on keyissues in higher education. However, the monitoringrole of the CHE, as indicated above, requiresstrengthening. In particular, there is a need todevelop a conceptual framework that will underpinthe CHE’s monitoring and evaluation activities.Although a revised approach to monitoring andevaluation was beginning to take shape last year,this was not fully developed due to the resignation ofthe Director in December 2010. Furthermore, itis necessary to put in place appropriate controlmechanisms to ensure the quality of the researchprojects undertaken.Private Provider DatabaseThere was continued progress in collecting data onstudent enrolment and achievement data in privatehigher education through the Higher EducationQuality Committee Information System (HEQCIS),which has been developed in conjunction with theSouth African Qualifications Authority (SAQA). A totalof 104 private providers have registered and 89 havesuccessfully uploaded their qualifications data to theNLRD.The HEQCIS database serves an important role inenabling the CHE to fulfil its responsibility as a QC, interms of which it is required to submit studentenrolment and achievement data to SAQA’s NationalLearners’ Records Database (NLRD). However, thenarrow focus of HEQCIS in meeting the requirementsof the NLRD limits its role as a database in monitoringtrends and the state of private higher educationprovision, including comparative analysis with thepublic higher education system. This lack of acommon database for both the public and privatehigher education providers needs to be rectified andwill be addressed in conjunction with the DHET,which is responsible for managing the HigherEducation Management Information System(HEMIS), which is a comprehensive database forpublic higher education institutions.Research ProjectsStudent Engagement and SuccessThe second cycle of the Student Engagement andSuccess, including for the first time a pilot of theLecturer’s Survey of Student Engagement (LSSE),which is co-ordinated by the University of the FreeState, was completed and the outcomes of thesurvey will be published in 2011.Law Curriculum ProjectThe investigation into the effectiveness of the LLBdegree, in particular the impact of the introduction ofa four-year LLB in 1998 as an alternative to thetraditional five-year LLB, was completed. However, itwas decided not to publish the resulting reportbecause of quality concerns, which were in large partthe result of methodological limitations – theinvestigation was restricted to a survey of legalacademics and law professionals. Although a reportwas not released, the findings were presented to theSouth African Law Deans Association (SALDA), theNational Legal Education Liaison Committee(NLELC) and at a public colloquium in November2010.Private Higher Education Monitoring ProjectAt the request of a group of private highereducation providers, the CHE initiated a PrivateHigher Education Monitoring Project with the aimof identifying trends relating to enrolments,graduations, resourcing, research and communityengagement and the possible publication of a reporton the state of private higher education in SouthAfrica.CHE ANNUAL REPORT 2010 - 201109

The work of the Higher Education Quality Committee (HEQC)The withdrawal of the report was not withoutcontroversy. However, it does not detract from theoverall success of the first cycle of institutionalaudits. And as stated in the CEO’s overview, theprinciples and protocols that underpin theinstitutional audit process would be reviewed toaddress identified weaknesses so as avoid similarchallenges in future.The CHE/HEQC-HELTASA Teaching ExcellenceAwards were made for the second time. Thepurposes of the awards are (i) to signal support at anational level for excellence in teaching in highereducation; (ii) to support the professionalisation ofteaching and learning in South Africa; (iii) to form agroup of academics who are able to provideleadership in teaching in their disciplines and in theirregions; and (iv) to generate debate and publicawareness about what constitutes teachingexcellence. The awards were presented at theannual HELTASA conference in October 2010 to fouracademics with outstanding teaching portfolios.The decision was informed by the fact that with thematuring of the quality assurance system linked tothe first cycle, and in particular the integration ofquality assurance into institutional systems andprocesses, a dedicated directorate was no longernecessary. This does not mean, however, that thefunction will no longer be performed. On the contrary,there is a continued need to promote quality and tobuild institutional capacity in quality assurance. Thecapacity-development function would be linked toand undertaken by the directorates responsible forthe different elements of the Council’s qualityassurance framework, and the quality promotionfunction will be co-ordinated by a manager locatedin the Executive Director’s office. The latter functionwill involve identifying, conceptualising andimplementing strategic interventions at system levelfor quality promotion and development.At the international level, the quality assurance workof the CHE continued to elicit interest and senior staffhave been invited to make presentations andconduct workshops on the HEQC approach toquality assurance at several international meetings.Staff from quality assurance agencies on the Africancontinent have visited the CHE and universities toacquaint themselves with the work of the HEQCand important cooperative relations have beenestablished, especially with agencies in the SouthernAfrica region.Quality Promotion and CapacityDevelopment (QPCD)As part of the organisational review, the QPCDDirectorate, which was responsible for the promotionof quality and the building of capacity in qualityassurance systems, was dissolved in December2010.CHE ANNUAL REPORT 2010 - 201113

QUALITY ASSURANCE AND QUALITY PROMOTION:Institutional Audits• Dr Charles Freysen, Registrar,The Independent Institute of Education (Deceased).• Prof Bennie Anderson, Chief Executive Officer,Da Vinci Institute (replaced Dr Freysen).• Prof Xikombiso Mbhenyane,Deputy Vice-Chancellor Academic,University of Venda (replaced Prof Melck).• Ms Judy Favish, Director of Institutional Planning,University of Cape Town.Audit ScheduleCHE ANNUAL REPORT 2010 - 2011The Institutional Audits Directorate is responsiblefor conducting audits of the quality assurancemechanisms of public and private providers of highereducation. The audits focus on institutional policies,systems, procedures, strategies and resources formanaging the quality of three higher education corefunctions, namely teaching and learning, researchand community engagement.Members of the Institutional Audits Committee:• Dr Ngoato Takalo, Chairperson, Former VicePrincipal and Executive Director Teaching andLearning, North-West University.• Prof Usuf Chikte, Executive Head of theDepartment of Interdisciplinary Health Sciences,University of Stellenbosch.• Prof John Duncan, Retired Dean of Research,Rhodes University.• Prof Antony Melck, Executive Director StrategicPlanning, University of Pretoria (resigned).• Prof Rocky Ralebipi-Simela,Deputy Vice-Chancellor Academic,Central University of Technology.• Prof Nan Yeld, Dean of Centre for HigherEducation Development, University of Cape Town.The period under review is the seventh year ofimplementation of the first cycle of audits. Of the finalfive outstanding audits that were planned, threewere completed, namely the University of Venda,University of Limpopo and the Cape PeninsulaUniversity of Technology. The Walter Sisulu Universityaudit was scheduled for April 2011 and the audit ofthe Mangosuthu University of Technology waspostponed to May 2011 at the request of theinstitution. In total HEQC has conducted 32institutional audits to date.Audit ReportsThe audit reports of the North-West University, theUniversity of Johannesburg and the University ofZululand were approved by the HEQC. ExecutiveSummaries of the audit reports have been placed onthe CHE website. Institutional improvement plansbased on the recommendations made in the auditreports are being prepared by each of theinstitutions.Improvement PlansFive months after the audit report has been finalisedthe institution is required to submit an improvementplan to the HEQC based on the audit report’srecommendations. These plans are analysed andreviewed for the comprehensiveness of coverage bythe Institutional Audits Committee.14

Institutional AuditsThe University of South Africa and North-WestUniversity submitted improvement plans based onthe recommendations made in their respectivereports. These improvement plans were analysedand were the subject of engagement and feedbackwith the two universities, each of which will receive aformal response from the HEQC after theInstitutional Audits Committee meeting scheduled forMay 2011.Post-Improvement Plan VisitsPost-improvement plan visits are decided by theInstitutional Audits Committee. These visits providefeedback from the Committee and follow up onissues which could, in the opinion of the Committee,compromise the successful implementation of theimprovement plan. The following institutions wereprovided with feedback in the year under review:• Durban University of Technology• Nelson Mandela Metropolitan University• Rhodes University• Tshwane University of Technology• University of Fort Hare,• University of the Free State• University of Pretoria• University of South Africa• University of the Western Cape• Vaal University of Technology• The Independent Institution of Education• Polytechnic of Namibia (by special arrangement).Progress ReportsThree years after the finalisation of the audit report,the audited institution is required to submit aprogress report on the implementation of itsimprovement plan. During this reporting periodtwelve institutions submitted progress reports:• Rhodes University• Stellenbosch University• University of the Free State• University of Pretoria• City Varsity: School of Media and Creative Arts• Cranefield College of Project and ProgrammeManagement• Da Vinci Institute• Helderberg College• The Independent Institute of Education• Management College of Southern Africa• Monash South Africa• Polytechnic of Namibia,The acceptance of the progress report by theInstitutional Audits Committee formally concludesthe audit process of the first cycle.Overall, the HEQC has found that all institutionshave substantially and seriously engaged with theaudit report and have significantly addressed therecommendations from their audit reports. In thecase of some institutions the nature of somerecommendations were such that it would take someyears to fully address the recommendations.CHE ANNUAL REPORT 2010 - 201115

QUALITY ASSURANCE AND QUALITY PROMOTION:Programme AccreditationFunctionsAccreditation of New ProgrammesCHE ANNUAL REPORT 2010 - 2011The functions of the Accreditation Directorate are to:• Accredit new programmes offered by public andprivate higher education institutions• Re-accredit existing programmes offered byprivate higher education institutions• Respond to enquiries and complaints receivedfrom the public relating to the quality assurance ofhigher education programmes and programmedelivery offered by both public and private highereducation institutions• Monitor and report on policy developments inhigher education, as they affect the accreditationand re-accreditation of programmes.Accreditation and re-accreditationof programmesIn the year under review the Directorate undertookthe accreditation of a growing number of newprogrammes as well as the re-accreditation of alarge number of programmes from privateinstitutions in terms of the registration requirementsof the DHET. In addition, the Directorate developedan implementation framework and plan forprocessing the submission of what is expected to bea very large number of existing programmes (about15 000−20 000 programmes) for alignment with theHEQF. This has required the further developmentof the HEQC-Online system to capture programmeinformation and to streamline processes across thedifferent agencies that deal with programmeapproval and registration.The number of applications submitted for theaccreditation of new programmes increased and theprocesses to evaluate the programmes wereimproved. In order to ensure a smooth flow ofdecision making and to ensure an acceptableturnover time, the number of AccreditationCommittee meetings was maintained at six percalendar year and these were scheduled to ensurealignment with the meetings of the HEQC.In the period under review the HEQC AccreditationCommittee assessed 400 new higher educationapplications submitted by public and privateproviders of higher education – an increase of 65%from the previous year when 258 applications wereassessed. These included applications for theaccreditation of new programmes, representationson outcomes requiring programmes to bere-evaluated, deferrals, the fulfilment of conditionsand applications for new sites of delivery. Of these,248 applications for new programmes weresubmitted via the HEQC-Online as indicated inTables 2 and 3 below. The HEQC made decisions on288 programmes. Of these decisions, 82programmes were not accredited and 2 programmescould not be processed due to incompleteapplication documentation and were referred back tothe institution. Poor curriculum design andunsatisfactory teaching and learning approacheswere among the most common reasons forprogrammes not being accredited.16

Programme AccreditationTable 1: The Accreditation Committee consisted of the following members:NONAME INSTITUTION DESIGNATION1Prof R StumpfChairperson: HEQC andAccreditation CommitteeConsultant2Prof D GihwalaCape Peninsula University ofTechnologyDean: Faculty of Health andWellness Sciences3Ms G CastrillónMilpark Business SchoolDirector: Quality Assurance andRegulatory Affairs4Prof J CookeBotswana International Universityof Science and TechnologyDean: Faculty of Science5Dr F CoughlanThe Independent Instituteof EducationDirector and Head6Prof N DorflingNelson Mandela MetropolitanUniversityDean: Faculty of Business andEconomic Sciences7Prof S EssackUniversity of KwaZulu-NatalDean: Faculty of Health Sciences8Dr S EssackDepartment of Higher Educationand TrainingDeputy Director: Private HigherEducation9Mr K EloffFood and Beverage SETAETQA Manager10Mr J FoliOwen Sithole Agricultural CollegePrincipal11Mr M LootsDepartment of Higher Educationand TrainingChief Education Specialist: EducatorQualifications and Programmes12Prof S McKennaRhodes UniversityDoctoral Coordinator: Centre forHigher Education Research,Teaching and Learning13Prof R MoletsaneUniversity of KwaZulu-NatalProfessor and JL Dube Chair inRural Education14Dr T MosiaNorth-West UniversityInstitutional Registrar1516171819Prof V NetshandamaMs J SkeneDr P SteynProf H HanrahanProf W KilfoilUniversity of VendaDepartment of Higher Educationand TrainingCenturion AcademyUniversity of the WitwatersrandUniversity of PretoriaDepartment of Advanced NursingSciencesDirector: Higher EducationManagement Information SystemHead: Regulatory and CorporateAffairsProfessor Emeritus: School ofElectrical and Information EngineeringDirector: Department for EducationInnovationCHE ANNUAL REPORT 2010 - 201117

QUALITY ASSURANCE AND QUALITY PROMOTION:Programme AccreditationAccreditation of New ProgrammesThe majority of applications received were for programmes at NQF level 5, 6 and 8, specifically HigherCertificate, Diploma and Postgraduate Diploma qualifications, as indicated below in Table 2.Table 2: New applications for programme accreditation per NQF levelINSTITUTIONLEVEL5LEVEL6LEVEL7LEVEL8LEVEL9LEVEL10UNDEFINEDTOTALNumber of Applications 59 79 33 61 12 3 1 248Similarly, an analysis of programme applications in the Classification of Educational Subject Matter (CESM)categories which is used for planning and funding purposes by the DHET indicates that business, commerceand management sciences, visual and performing arts, computer sciences and health care and health sciencesare growing areas for programme development within the higher education sector, as shown below.Table 3: New applications for programme accreditation per CESM categoryCESM CATEGORYNUMBER OF APPLICATIONSCHE ANNUAL REPORT 2010 - 2011Agriculture, Agricultural Operations and Related SciencesArchitecture and the Built EnvironmentVisual and Performing ArtsBusiness, Economics and Management StudiesCommunication, Journalism and Related StudiesComputer and Information ScienceEducationEngineeringHealth Professions and Related Clinical SciencesFamily Ecology and Consumer SciencesLanguages, Linguistics and LiteratureLawLife SciencesPhysical SciencesMathematics and StatisticsMilitary SciencesPhilosophy, Religion and TheologyPsychologyPublic Management and ServicesSocial SciencesTotal5228861224151020173300110641124818

Programme AccreditationRe-accreditation (Private Providers)The DHET’s private provider registration cycle required the re-accreditation of 137 programmes offered by 30private higher education institutions. In 2009, the HEQC developed a framework for re-accreditation whichdistinguished between programmes that could be aligned with the HEQF and those that could not be alignedwithout changing more than 50% of the programme. The re-accreditation process focused on the former, whilethe latter had their existing accreditation extended until such time as they are aligned with the HEQF.Follow-up on programmes accredited with conditionsAs part of the process of accreditation, the Directorate is responsible for the follow-up of conditions set forprogrammes provisionally accredited. This aspect of the accreditation process enables the HEQC to ensure thatthe quality of the programmes which institutions propose to offer is sufficient to meet minimum standards in allrelevant HEQC accreditation criteria before students are enrolled. It also enables the Directorate to monitorwhether programmes are addressing longer-term conditions set by the Accreditation Committee, based onevaluator reports. The Accreditation Directorate processed 64 sets of conditions for the period.CHE ANNUAL REPORT 2010 - 201119

CORPORATE SERVICESCHE ANNUAL REPORT 2010 - 2011OverviewThe role of the Corporate Services Directorate is toenable the efficient and effective functioning of theCHE in discharging its core mandate through theprovision of a range of professional, technical andadministrative support services, including financialadministration, human resources management (HR),supply chain management, information technologymanagement (IT), building maintenance, securityand cleaning services. The services are eitherprovided internally, specifically as regards finance,HR and supply chain management or externallythrough outsourcing on the basis of service levelagreements, specifically as regards internal audit,ICT, building maintenance, security and cleaningservices.The aim of the Corporate Services Directorate is toadd value to the CHE’s operations with the emphasison quality, integrity, compliance, efficiency, effectivenessand economy, thus ensuring that the CHE:• complies with the requirements of the PFMA,relevant Treasury regulations and laws,• is guided by sound HR and business practices,including the procurement and management ofassets and services, and• as a public entity, effectively discharges itsreporting responsibilities on all levels and to all itsstakeholders.Administration and FinanceIn the period under review a new internal audit firm –Business Information Group (BIG) - was appointed inJanuary 2011. BIG was requested to undertake acomprehensive compliance audit of internal policies,procedures and systems, as the CEO wasconcerned that the policies, procedures and systemsin place were not always adhered to and, in somecases, were outdated. The internal audit, which wascompleted in March 2011, confirmed these concerns.It identified a range of problems, which, while notsignificant individually, could, if not addressed, resultin increased risk and compromise the Council. Itshould be emphasised, however, that the internalaudit did not identify any unauthorised expenditure.An action plan has been developed to rectify theshortcomings and it is anticipated that the mainissues will be resolved by mid-2011.Human Resources ManagementA comprehensive review of the CHE’s humanresources policies was undertaken to address gapsand inconsistencies in the application andimplementation of policies and to ensure that thehuman resources policies are geared to meet theexpanding organisational mandate and changingoperational requirements while promoting bestpractice. The review was informed by two centralconcerns, namely the need to recruit and retain staffwith the requisite qualifications, skills andcompetencies and the need to build a performancedriven culture, which is intrinsic to the overallsuccess of the organisation. The review has beencompleted and has resulted in, amongst others, thefollowing:• Revision and updating of existing policies, includingthe introduction of new policies to fill gaps.• Finalisation of job descriptions and the grading ofpositions.• Refinement of the performance managementsystem, including training to ensure that both staffand management understand the principles andpurpose of the performance management system.• Development of a staff development plan, whichwould enable staff to meet the requirements oftheir respective positions and provide for individualself-development through further study whereappropriate.• Benchmarking of the CHE remuneration frameworkwith that of the public, private and higher educationsectors to ensure that it is commensurate with therelevant market.20

CORPORATE SERVICESThere is much that still remains to be done. Anomalies in the remuneration framework relating to pension andmedical aid contributions, the development of a recruitment and retention strategy and the development of aflexible remuneration framework to ensure that it is competitive, especially at the senior management level, withthe higher education sector must be resolved. In order to assist in this process, the Council has agreed toestablish a Remuneration and Human Resources Committee, which will be operationalised in the latter half of2011.Resignations and new appointmentsEight employees left the employment of the CHE in the year under review, including Dr Lis Lange,Executive Director: Quality Assurance, Dr Jan Beukes, Chief Financial Officer and Dr Judy Backhouse,Director: Monitoring and Evaluation. Eight new employees joined the organisation, including Mr Ahmed Essop,Chief Executive Officer, Dr Mark Hay, Executive Director: Quality Assurance and Ms Vuyo Matsam, HR Manager(this post was subsequently upgraded to Director: Corporate Services).People profileThe CHE organisational structure provides for a total staff compliment of 54, of which 42 positions are filled and12 are vacant. The overall employment profile in terms of race - 81% black and 19% white, and gender - 71%female and 29% male, is in line with national and industry benchmarks. This is also the case at the managementlevel where the respective ratios are 64% black and 36% white and 64% female and 36% male.CHE ANNUAL REPORT 2010 - 201121

CORPORATE SERVICESEmployee Turnover2 2112Senior ManagementDirectorManagerProject AdministratorAdministratorTotalSENIORMANAGEMENTPROJECTDIRECTOR MANAGERADMIN TOTALADMINResignations2 1 2 1 2 8Occupancy Profile12CHE ANNUAL REPORT 2010 - 2011SENIORMANAGEMENTFilled 2Unfilled 0Total 2PROJECTDIRECTOR MANAGERADMIN OTHER TOTALADMIN32597164292111211370742125422

CORPORATE SERVICESRace profile19%36%64%81%ManagementCHEBlackWhiteMANAGEMENT64%36%SENIORPROJECTCHE DIRECTOR MANAGERADMIN OTHER TOTALMANAGEMENTADMINBlack 50%White 50%33%67%78%22%78%22%92%8%100%0%81%19%Gender Profile36%29%64%71%ManagementCHEMANAGEMENTMaleFemaleCHE36%64%SENIOR PROJECTMANAGEMENT ADMINADMINOTHER TOTAL PERCENTAGEMale 53221229%Female 961053071%CHE ANNUAL REPORT 2010 - 201123

COUNCIL ON HIGHER EDUCATIONCHE ANNUAL REPORT 2010 - 201124

2011COUNCIL ON HIGHER EDUCATIONCHE ANNUAL REPORT 2010 - 201125

CHE ANNUAL FINANCIAL STATEMENTSFor the year ended 31 March 2011The reports and statements set out below comprise the financial statements presented to Parliament:INDEXStatement of ResponsibilityAudit Committee ReportReport of the Auditor-GeneralAccounting Authority ReportStatement of Financial PositionStatement of Financial PerformanceStatement of Changes in Net AssetsCash Flow StatementAccounting PoliciesNotes to the Financial StatementsDetailed Income StatementNon-financial Performance IndicatorsPAGES272830333839394041465658CHE ANNUAL REPORT 2010 - 201126

STATEMENT OF RESPONSIBILITYThe Council is required by the Public Finance Management Act (Act 1 of 1999), to maintain adequateaccounting records and is responsible for the content and integrity of the financial statements and relatedfinancial information included in this report. It is the responsibility of the Council to ensure that the financialstatements fairly represent the state of affairs of the CHE as at the end of the financial year and the results of itsoperations and cash flows for the period then ended. The external auditors were engaged to express anindependent opinion on the financial statements and were given unrestricted access to all financial records andrelated data.The financial statements have been prepared in accordance with Standards of Generally RecognisedAccounting Practice (GRAP) including any interpretations, guidelines and directives issued by the AccountingStandards Board.The financial statements are based upon appropriate accounting policies consistently applied and supported byreasonable and prudent judgments and estimates.The Council acknowledges that it is ultimately responsible for the system of internal financial control establishedand attaches considerable importance to maintaining a strong control environment. To enable the Council tomeet these responsibilities, the accounting authority sets standards for internal control aimed at reducing therisk of error or deficit in a cost-effective manner. The standards include the proper delegation of responsibilitieswithin a clearly defined framework, effective accounting procedures and adequate segregation of duties toensure an acceptable level of risk. These controls are monitored throughout the CHE, and all employees arerequired to maintain the highest ethical standards to ensure that the CHE's business is conducted in a mannerthat in all reasonable circumstances is above reproach. The focus of risk management in the CHE is onidentifying, assessing, managing and monitoring all known forms of risk across the CHE. While operating riskcannot be fully eliminated, the CHE endeavours to minimise it by ensuring that appropriate infrastructure,controls, systems and ethical behaviour are applied and managed within predetermined procedures andconstraints.The Council is of the opinion, based on the information and explanations given by management, that the systemof internal control provides reasonable assurance that the financial records may be relied on for the preparationof the financial statements. However, any system of internal financial control can provide only reasonable, andnot absolute, assurance against material misstatement or deficit.The CHE is financially dependent on a transfer payment from the Department of Higher Education and Trainingfor continued funding of operations. The financial statements are prepared on the basis that the CHE is a goingconcern and that the Department of Higher Education and Training will transfer the payment as listed in theEstimates of National Expenditure (ENE) to the CHE.Although the accounting authority is primarily responsible for the financial affairs of the CHE, it is supported bythe CHE's external auditors. The external auditors are responsible for independently reviewing and reporting onthe CHE's financial statements. The financial statements have been examined by the CHE's external auditorsand their report is presented on page 30 to 32.The financial statements set out on pages 33 to 60, which have been prepared on the going concern basis, wereapproved by the Council on 31 July 2011 and signed on its behalf by:Prof Chabani ManganyiChairpersonMr Ahmed EssopChief Executive OfficerCHE ANNUAL REPORT 2010 - 201127

AUDIT COMMITTEE REPORTReport for the year ended 31 March 2011Audit committee members and attendanceThe audit committee consists of the members listed hereunder and meets twice per annum as per its approvedterms of reference. During the current year 2 meetings were held.Name of memberNumber of meetings attendedProf A Melck (Chairperson) 2 of 2Mr SBA Isaacs 1 of 2Dr D Tromp 2 of 2Ms N Naicker 1 of 2 (Resigned 09/08/2010)Dr M Qhobela 1 of 2Mr Isaacs could not attend the March audit committee meeting. Therefore, Dr Qhobela attended the meeting asCouncil Representative.Audit committee responsibilityWe report that we have adopted appropriate formal terms of reference in our charter in line with therequirements of section 55(1)(a) of the PFMA and Treasury Regulation 27.1. We further report that we haveconducted our affairs in compliance with this charter.The effectiveness of internal controlIn line with the PFMA and the King III Report on Corporate Governance requirements, Internal Audit providesthe Audit Committee and management with assurance that the internal controls are appropriate and effective.This is achieved by means of the risk management process as well as the identification of corrective actions andsuggested enhancements to the controls and processes. From the various reports of the Internal Auditors, theAudit Report on the financial statements and the management letter of the Auditor-General of South Africa, itwas noted that matters were reported that indicate deficiencies in the system of internal control. Managementaccepted the findings of the above-mentioned reports on internal controls and is committed to implementing thesuggested improvements. Accordingly, we can report that, although the system of internal control over financialreporting for the period under review was not entirely efficient and effective, the identified problems arereceiving the necessary attention.Evaluation of financial statementsCHE ANNUAL REPORT 2010 - 2011We have:• reviewed and discussed the audited financial statements to be included in the annual report with the Auditor-General of South Africa;• reviewed the Auditor-General of South Africa's management letter and management's response thereto;• reviewed changes in accounting policies and practices;• reviewed the entity's compliance with legal and regulatory provisions; and• reviewed significant adjustments resulting from the audit.We concur with and accept the Auditor-General of South Africa's report on the financial statements, and are ofthe opinion that the audited financial statements should be accepted and read together with the report of theAuditor-General of South Africa.28

Report for the year ended 31 March 2011Internal auditWe are satisfied that the internal audit function is operating effectively and that it has addressed the riskspertinent to the CHE and its audits.Auditor-General of South AfricaWe have met with the Auditor-General of South Africa to ensure that there are no unresolved issues.RecommendationAt its meeting held on 21 July 2011, the audit committee recommended the adoption of the financial statmentsto the Council.Prof Antony MelckChairperson of the Audit CommitteeCHE ANNUAL REPORT 2010 - 201129

REPORT OF THE AUDITOR-GENERAL TO PARLIAMENTON THE COUNCIL ON HIGHER EDUCATION FOR THEYEAR ENDED 31 MARCH 2011Report on the financial statementsIntroduction1. I have audited the accompanying financial statements of the Council on Higher Education which comprise thestatement of financial position as at 31 March 2011, and the statement of financial performance, statement ofchanges in net assets and cash flow statement for the year then ended, and a summary of significantaccounting policies and other explanatory information, and the accounting authority’s report as set out onpages 33 to 55.Accounting authority’s responsibility for the financial statements2. The accounting authority is responsible for the preparation and fair presentation of these financial statementsin accordance with South African Standards of Generally Recognised Accounting Practice (SA Standards ofGRAP) and the requirements of the Public Finance Management Act, 1999 (Act No. 1 of 1999) (PFMA) andfor such internal control as management determines necessary to enable the preparation of financialstatements that are free from material misstatement, whether due to fraud or error.Auditor-General’s responsibilityCHE ANNUAL REPORT 2010 - 20113. As required by section 188 of the Constitution of the Republic of South Africa, 1996 (Act No. 108 of 1996) andsection 4 of the Public Audit Act of South Africa, my responsibility is to express an opinion on these financialstatements based on my audit.4. I conducted my audit in accordance with International Standards on Auditing and General Notice 1111 of 2010issued in Government Gazette 33872 of 15 December 2010. Those standards require that I comply withethical requirements and plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free from material misstatement.5. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial statements. The procedures selected depend on the auditor’s judgement, including the assessmentof the risks of material misstatement of the financial statements, whether due to fraud or error. In makingthose risk assessments, the auditor considers internal control relevant to the entity’s preparation and fairpresentation of the financial statements in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internalcontrol. An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of accounting estimates made by management, as well as evaluating the overallpresentation of the financial statements.6. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my auditopinion.Opinion7. In my opinion, the financial statements present fairly, in all material respects, the financial position of theCouncil on Higher Education as at 31 March 2011, and its financial performance and cash flows for the yearthen ended in accordance with with SA Standards of GRAP and requirements of the PFMA.30

Report on the financial statementsEmphasis of matters8. I draw attention to the matters below. My opinion is not modified in respect of these matters.Irregular Expenditure9. As disclosed in note 24, the public entity incurred irregular expenditure of R6,211,824. The expenditureincurred was in contravention of Treasury Regulation16A.6.1 and Practice Note 8 of 2007/08 paragraph 3.3.1relating to supply chain management. This amount relates to the renovations performed on the building.Fruitless and Wasteful Expenditure10. As disclosed in note 23, the public entity incurred fruitless and wasteful expenditure of R5 905.72 due tointerest and penalties arising from late payment of taxes due to the South African Revenue Service.Report on other legal and regulatory requirements11. In accordance with the PAA and in terms of General notice 1111 of 2010, issued in Government Gazette33872 of 15 December 2010, I include below my findings on the annual performance report as set out onpages 58 to 60 and material non-compliance with laws and regulations applicable to the entity.Predetermined objectives12. There are no material findings on the annual performance report.Compliance with laws and regulationsExpenditure Management13. The accounting authority did not take effective and appropriate steps to prevent irregular expenditure,fruitless and wasteful expenditure as per the requirements of section 51(1)(b) of the PFMA.Annual Financial Statements, Performance and Annual Report14. The accounting authority did not submit the financial statements for auditing within two months after theend of the financial year as required by section 55(1) (c)(i) of the PFMA.15. The accounting authority submitted financial statements for auditing that were not prepared in all materialaspects in accordance with generally accepted accounting practice as required by section 55(1) (a) and (b)of the PFMA. The material misstatements identified by the AGSA with regard to assets and interest incomewere subsequently corrected.CHE ANNUAL REPORT 2010 - 201131

REPORT OF THE AUDITOR-GENERAL TO PARLIAMENTInternal Control16. In accordance with the PAA and in terms of General notice 1111 of 2010, issued in Government Gazette33872 of 15 December 2010, I considered internal control relevant to my audit, but not for the purpose ofexpressing an opinion on the effectiveness of internal control. The matters reported below are limited to thesignificant deficiencies that resulted in findings on compliance with laws and regulations included in this report.Leadership17. There was insufficient exercise of oversight regarding financial reporting and compliance and related internalcontrols. In addition; policies and procedures to enable and support understanding and execution of internalcontrol objectives, processes, and responsibilities were not adequately established and communicated. HRmanagement did not ensure that adequate and sufficiently skilled resources are in place throughout the year.Financial management18. The entity did not have sufficient procedures in place to prepare accurate and complete financial reports.Adjustments had to be made to the Annual Financial Statements submitted on 31st May 2011.Pretoria - 31 July 2011CHE ANNUAL REPORT 2010 - 201132

ACCOUNTING AUTHORITY'S REPORTReport for the year ended 31 March 2011Mandate and Objectives of the Council on Higher EducationThe Council on Higher Education (CHE) is a public entity listed under Schedule 3A of the Public FinanceManagement Act (PFMA) (Act 1 of 1999), as amended. It adheres to principles of good governance, financialand performance management and is held accountable for these to the Parliament of the Republic of SouthAfrica.The CHE was established as a juristic person in terms of section 4 of the Higher Education Act (Act 101 of1997). In summary, the main areas of work of the CHE are:• To provide advice to the Minister of Higher Education and Training on higher education matters, both atthe Minister's request and proactively.• To develop and implement a system of quality assurance for all higher education institutions, including privateproviders of higher education, which focuses on programme accreditation, institutional audits, nationalreviews, quality promotion and capacity development.• To monitor the state of the higher education system in relation to the national policy goals andinternational trends.• To contribute to the development of higher education through intellectual engagement with key issues in anumber of activities (including research, publications and conferences) and in partnership with relevant stakeholders.As specified in the Higher Education Amendment Act, 2008 (Act No. 39 of 2008) and in the NationalQualifications Framework Act (Act 67 of 2008), the CHE functions as the Quality Council for higher educationand is responsible for the implementation of the Higher Education Qualifications Framework (HEQF), includingresponsibility for the generation and setting of standards with effect from the 2010/2011 financial year.Executive AuthorityThe CHE falls under the Executive Authority of the Department of Higher Education and Training.Role and ResponsibilitiesThe Council fulfils the role of the Accounting Authority in terms of section 49 of the Public Finance ManagementAct (PFMA) (Act 1 of 1999).As the Accounting Authority, the Council acts in a fiduciary capacity and its responsibilities include:• effective, efficient and transparent systems of financial and risk management and internal control, internalaudit and procurement;• effective and appropriate steps to collect revenue due, prevent irregular, fruitless and wasteful expenditure,losses through criminal conduct and expenditure as a result of non-compliance with operational policies;• management, including safeguarding, of the assets, liabilities, revenue and expenditure of the CHE;• compliance with applicable legislation; and• an effective and appropriate disciplinary system for dealing with any failure to comply with the PFMA and theinternal control system.CHE ANNUAL REPORT 2010 - 201133

ACCOUNTING AUTHORITY'S REPORTReport for the year ended 31 March 2011Going concernThe CHE is financially dependent on a transfer payment from the Department of Higher Education and Training.On the basis that the transfer payment has been listed in the Estimates of National Expenditure, the Councilbelieves that the CHE will continue to be a going concern in the year ahead. For this reason, the Councilcontinued to prepare the annual financial statements on a going concern basis.Governance of the Council on Higher Education CouncilThe Council consists of a Chairperson appointed for five (5) years and twelve (12) ordinary Council membersappointed for a period of four (4) years. Six (6) non-voting members are appointed to the Council, nominatedrespectively by the Director-General of the Department of Higher Education and Training, the Director-Generalof the Department of Science and Technology, the National Research Foundation and the Chief ExecutiveOfficers of SAQA, Umalusi and the QCTO in their official capacities.All members who served on the Council during the year under review were appointed in terms of the HigherEducation Act (Act 101 of 1997) as amended. The current Council's term of office started in December 2010 andwill end in 2014.Committees and SubcommitteesPermanent CommitteeThe CHE has one (1) permanent committee, the Higher Education Quality Committee (HEQC). The HEQC hasexecutive responsibility for quality promotion and quality assurance in higher education.The Higher Education Act of 1997 states that the functions of the HEQC are to:• promote quality in higher education,• audit the quality assurance mechanisms of higher education institutions and• accredit programmes of higher educationTo the above three (3) mandated areas, HEQC added quality-related capacity development. Eight (8) HEQCmeetings were held during the financial year. The ninth (9) meeting was an EXCO meeting.Sub-committeeCHE ANNUAL REPORT 2010 - 2011On 31 March 2011 four (4) Council subcommittees were in place and fully functional, namely:1. Executive Committee (EXCO),2. Audit Committee (AUDIT),3. Advice and Monitoring Committee (A&M), and4. Higher Education Funding and Infrastructure Committee (HEF&I).The members of subcommittees are appointed for the specific knowledge and skills they bring to the Committee.The Council and its subcommittees, including its permanent committee responsible for quality assurance, theHEQC, have functioned effectively in terms of the CHE's statutory mandate and adherence to principles of goodgovernance.34

Report for the year ended 31 March 2011Remuneration of Council MembersMembers of Council, its permanent committee and subcommittees who are not CHE employees or governmentofficials qualify for daily allowances for services rendered to the CHE in accordance with the Treasuryregulations and directives.Where Council members were requested to provide additional services to the CHE on the basis of theirprofessional expertise, they were reimbursed in accordance with the professional advisory fees recommendedby the Department of Public Service and Administration (DPSA). These services included, amongst otherthings, requests to participate in interview panels for the appointment of members of senior management.Payments made to Council members per individual and number of meetings attended:NAMEREPRESENTATIONDATEAPPOINTEDMEETINGSATTENDEDFEES2010/2011Paid to members:Prof NC ManganyiMs L Abrahams *Dr Y DladlaProf M FourieMr R Katz *Ms M LedwabaDr J LewisDr N LuruliDr B MasukuProf L MojaMr V van Vuuren *Prof S MotalaMs D NdabaMr E NxumaloDr Z SosiboProf B ThaverDr W RowlandProf R StumpfPaid to employer:Prof G Perez *Ms J GlennieChairpersonCouncil MemberCouncil MemberCouncil MemberCouncil MemberCouncil MemberCouncil MemberCouncil MemberCouncil MemberCouncil MemberCouncil MemberCouncil MemberCouncil MemberCouncil MemberCouncil MemberCouncil MemberCo-opted MemberCo-opted MemberCouncil MemberCo-opted MemberOct ’07Jul ’06Apr ’09Jul ’06Jul ’06Dec '10Apr ’09Dec '10Apr ’09Apr ’09Jul ‘06Dec '10Dec '10Dec '10Dec '10Dec '10Jul ‘06Jan ‘09Jul ‘02Jul ‘024 of 42 of 43 of 44 of 43 of 41 of 12 of 41 of 13 of 43 of 42 of 41 of 11 of 11 of 11 of 11 of 14 of 44 of 42 of 43 of 4Non remunerated:Prof Y BallimMr S IsaacsMs K MenonDr M QhobelaDr M RakometsiDr A van JaarsveldtCouncil MemberSAQADHETDSTUMALUSINRFJul ‘06Jul ‘00Jan ‘10Jan ‘10Jan ‘09Jan ‘092 of 43 of 42 of 44 of 44 of 41 of 4* Term expired in December 2010Sub totalResignations :Prof S Saunders July 2010 / Adv B Mkhize April 201029 97611 57117 45420 36314 5455 81811 6365 81814 54517 45411 6365 8185 8185 8185 8185 81820 36317 45411 63617 018256 377CHE ANNUAL REPORT 2010 - 201135

ACCOUNTING AUTHORITY'S REPORTReport for the year ended 31 March 2011Council (*) and Non-Council members who served on CHE governance structures and were remunerated asfollows:NAMECOMMITTEEREPRESENTATIONMEETINGSATTENDEDFEES2010/2011CHE ANNUAL REPORT 2010 - 2011Paid to members:Prof R Stumpf *Prof N BaijnathDr F CoughlanProf D GihwalaProf H HanrahanMr T LedwabaMs K MaralaProf I MoutlanaMs N NxesiProf D SewryDr N TakaloProf NC Manganyi *Prof M Fourie *Mr V van Vuuren *Paid to employer:Ms J Glennie *Ms J FavishNon remunerated:Prof Y Ballim *Ms S JawoodeenDr M Rakometsi *Prof C SehooleMs E RabeMs T LewinDr D ParkerDr M QhobelaMs K MenonProf A MelckDr D TrompMr SBA Isaacs *Dr M Qhobela *Ms N NaickerProf G Perez *Dr W Rowland *Ms J Glennie *Dr A KanikiProf R Stumpf *Ms J Glennie *Mr V van Vuuren *HEQCHEQCHEQCHEQCHEQCHEQCHEQCHEQCHEQCHEQCHEQCEXCOEXCOEXCOHEQCHEQCHEQCHEQCHEQCHEQCHEQCHEQCHEQCEXCOEXCOAUDITAUDITAUDITAUDITAUDITA&MA&MA&MA&MHEF&IHEF&IHEF&IChairpersonMemberMemberMemberMemberMemberMemberMemberMemberMemberMemberChairpersonCouncil MemberCouncil MemberDeputy ChairMemberMemberMemberUMALUSIDHET RepresentativeUMALUSIDHET RepresentativeDHET RepresentativeDHET RepresentativeDHET RepresentativeChairpersonExpert MemberCouncil MemberCouncil MemberExpert MemberChairpersonCouncil MemberCouncil MemberExpert MemberCouncil MemberCouncil MemberCouncil MemberSee also note 23 of the financial statements for a summaryof all remuneration received.Resignations : Ms N Naiker August 20106 of 97 of 99 of 99 of 95 of 98 of 97 of 95 of 96 of 96 of 98 of 95 of 53 of 52 of 56 of 98 of 95 of 90 of 93 of 91 of 91 of 95 of 92 of 91 of 41 of 42 of 22 of 21 of 21 of 21 of 20 of 11 of 11 of 10 of 11 of 11 of 10 of 1Sub totalTOTAL41 21748 22055 27155 27129 09043 63537 81731 99929 09037 81749 45329 97617 45411 63656 31548 585622 846879 22336

Report for the year ended 31 March 2011Subsequent EventsThe CHE incurred irregular expenditure to the amount of R6,211,824 as a result of renovations to its premises.The supply chain management process as prescribed in the PFMA and Treasury Regulations was not followedwhen the expenditure was incurred.The Council has initiated an investigation into this matter to satisfy itself that there was no unethical intentinvolved. The matter will accordingly be reported to the DHET and the National Treasury.Risk ManagementThe CHE has reviewed its risk profile during the course of the year to consider the extent to which potentialevents may have an impact on the achievement of the organisation's objectives. Emerging events wereassessed from two perspectives - likelihood and impact - and a number of risks, predominantly on a strategiclevel, were identified and weighed.Materiality and significance frameworkAs required by the Treasury Regulations, the Council has developed and agreed on a materiality andsignificance framework appropriate to its size and circumstances.Internal auditThe internal audit function is under the direction of the Audit Committee and ultimately the Council in evaluatingthe effectiveness of its system of internal controls in place and recommending improvements where appropriate.The internal audit function is contracted out as appropriate due to the size of CHE.ManagementFollowing the departure of Prof Cheryl de la Rey as CEO of the CHE at the end of October 2009, the Councilapproved the appointment of CHE Council member and HEQC Chairperson, Prof Rolf Stumpf, as acting CEOwith effect from 1 January 2010 for a period of six (6) months or until the appointment of a new CEO could befinalised. Prof Stumpf in his capacity as acting CEO functioned as an ex-officio member of the CHE Counciland the HEQC during this period.Mr Ahmed Essop was appointed CEO of the CHE with effect from 1 May 2010 for a five (5) year period.External auditAs required by the PFMA, the current external auditor of the CHE is the Auditor-General of South Africa.SecretaryThe secretary of the CHE, for the period under review was Ms DH Fisher. The addresses of the Council onHigher Education are as follows:Business address:Postal address:1 Quintin Brand Street PO Box 94Persequor TechnoparkPersequor ParkBrummeria, Pretoria 0020CHE ANNUAL REPORT 2010 - 201137

STATEMENT OF FINANCIAL POSITIONFinancial Statements for the year ended 31 March 2011Note(s)2011 2010ASSETSCurrent AssetsCash and cash equivalentsReceivables from exchange transactions2312,302,110344,29312,646,40310,116,949390,75810,507,707Non-Current AssetsIntangible assetsProperty, plant and equipmentTOTAL ASSETS45109,12229,221,60129,330,72341,977,126124,64929,431,36029,556,00940,063,716LIABILITIESCurrent LiabilitiesFinance lease obligationPayables from exchange transactionsProvisions678268,6503,253,882380,0353,902,567245,2163,928,428466,7274,640,371Non-Current LiabilitiesFinance lease obligationUnspent conditional grants and receiptsTOTAL LIABILITIESNET ASSETS69261,5808,626,7778,888,35712,790,92429,186,202197,1258,721,3918,918,51613,558,88726,504,829NET ASSETSAccumulated surplus29,186,20226,504,829CHE ANNUAL REPORT 2010 - 201138

STATEMENT OF FINANCIAL PERFORMANCEFinancial Statements for the year ended 31 March 2011Note(s)2011 2010Non-exchange revenueExchange revenueOperating expensesOperating surplus (deficit)Investment revenueFinance costsSurplus (deficit) for the year10131436,140,6141,981,768(36,142,049)1,980,333751,969(50,929)2,681,37332,975,591673,133(35,045,199)(1,396,475)595,944(56,662)(857,193)STATEMENT OF CHANGES IN NET ASSETSFinancial Statements for the year ended 31 March 2011AccumulatedsurplusTotal netassetsBalance at 01 April 2009Changes in net assetsSurplus for the yearTotal changesBalance at 01 April 2010Changes in net assetsSurplus for the yearTotal changesBalance at 31 March 201127,362,022(857,193)(857,193)26,504,8292,681,3732,681,37329,186,20227,362,022(857,193)(857,193)26,504,8292,681,3732,681,37329,186,202CHE ANNUAL REPORT 2010 - 201139

CASH FLOW STATEMENTFinancial Statements for the year ended 31 March 2011Note(s)2011 2010Cash flows from operating activitiesReceiptsGrantsInterest incomeOther receipts36,046,000751,9691,970,18938,768,15841,661,000595,944909,11543,166,059PaymentsEmployee costsSuppliersFinance costsNet cash flows from operating activities17(16,075,071)(19,051,866)(45,683)(35,172,620)3,595,538(15,350,273)(16,668,006)-(32,018,279)11,147,780Cash flows from investing activitiesPurchase of property, plant and equipmentProceeds from sale of property, plant and equipmentPurchase of other intangible assetsProceeds from sale of other intangible assetsNet cash flows from investing activities5544(1,425,851)22,142(48,874)-(1,452,583)(1,643,720)188,233(68,819)13,835(1,510,471)Cash flows from financing activitiesFinance lease payments42,206(6,599)Net increase/(decrease) in cash and cash equivalentsCash and cash equivalents at the beginning of the yearCash and cash equivalents at the end of the year22,185,16110,116,94912,302,1109,630,710486,23910,116,949CHE ANNUAL REPORT 2010 - 201140

ACCOUNTING POLICIESFinancial Statements for the year ended 31 March 20111. Presentation of Financial StatementsThe financial statements have been prepared in accordance with the effective Standards of GenerallyRecognised Accounting Practice (GRAP) including any interpretations, guidelines and directives issued by theAccounting Standards Board (ASB) in accordance with the PFMA 1 of 1999.These financial statements have been prepared on an accrual basis of accounting and are in accordance withhistorical cost convention unless specified otherwise. They are presented in South African Rand.These accounting policies are consistent with the previous period.1.1 Property, plant and equipmentItems of property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.The depreciable amounts of property, plant and equipment are allocated on the straight line basis over theiruseful lives. Management expects to abandon the assets at the end of their useful lives and therefore theresidual values are estimated at zero.The estimated useful lives of property, plant and equipment are currently as follows:ItemLandBuildingsFurniture and fixturesOffice equipmentIT equipmentComputer software - operating softwareAverage useful lifeIndefinite10 - 30 years10 - 14 years3 - 21 years7 - 10 years2 - 7 yearsImpairment losses are determined as the excess of the carrying amount of items of property, plant andequipment over the recoverable service amount and are charged to surplus or deficit.Subsequent expenditure incurred on items of property, plant and equipment is only capitalised to the extent thatsuch expenditure enhances the value or previous capacity of those assets. Repairs and maintenance notdeemed to enhance the economic benefits or service potential of items of property, plant and equipment areexpensed as incurred.1.2 Intangible assetsIntangible assets are stated at cost less accumulated amortisation and impairment losses. The amortisationamounts of intangible assets are allocated on the straight line basis over their useful lives. Management expectsto abandon the assets at the end of their useful lives and therefore the residual values are estimated at zero.Amortisation is provided to write down the intangible assets, on a straight line basis, to their residual values asfollows:ItemUseful lifeComputer software - application software1 - 8 yearsCHE ANNUAL REPORT 2010 - 201141

ACCOUNTING POLICIESFinancial Statements for the year ended 31 March 20111.2 Intangible assets (continued)Impairment losses are determined as the excess of the carrying amount of intangible assets over therecoverable service amount and are charged to surplus or deficit.The gain or loss is the difference between the net disposal proceeds, if any, and the carrying amount. It isrecognised in surplus or deficit when the asset is derecognised.1.3 Financial instrumentsInitial recognition and measurementFinancial instruments are initially recognised when the CHE becomes a party to the contractual provisions of therelevant instrument, and are initially measured at fair value. Subsequent to initial recognition, these instrumentsare measured as set below.ReceivablesReceivables are stated at amortised cost, which, due to their short-term nature, closely approximates their fairvalue.Cash and cash equivalentsCash and cash equivalents are stated at amortised cost, which, due to their short-term nature, closelyapproximates their fair value.Cash and cash equivalents comprise cash at banks and deposits held on call.PayablesPayables are stated at amortised cost, which, due to their short-term nature, closely approximates their fairvalue.OffsettingFinancial assets and financial liabilities have not been offset in the Statement of Financial Position.CHE ANNUAL REPORT 2010 - 20111.4 LeasesA lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental toownership. A lease is classified as an operating lease if it does not transfer substantially all the risks andrewards incidental to ownership.Finance leases - lesseeFinance leases are recognised as assets and liabilities in the statement of financial position at amounts equalto the fair value of the leased property or, if lower, the present value of the minimum lease payments. Thecorresponding liability to the lessor is included in the statement of financial position as a finance leaseobligation.42

Financial Statements for the year ended 31 March 20111.4 Leases (continued)The discount rate used in calculating the present value of the minimum lease payments is the interest rateimplicit in the lease.Minimum lease payments are apportioned between the finance charge and reduction of the outstanding liability.The finance charge is allocated to each period during the lease term so as to produce a constant periodic rateon the remaining balance of the liability.Any contingent rents are expensed in the period in which they are incurred.1.5 Employee benefitsShort-term employee benefitsThe cost of short-term employee benefits (those payable within 12 months after the service is rendered, suchas paid vacation leave and sick leave, bonuses and non-monetary benefits such as medical care) arerecognised in the period in which the service is rendered and are not discounted.The expected cost of compensated absences is recognised as an expense as the employees render servicesthat increase their entitlement or, in the case of non-accumulating absences, when the absence occurs.The expected cost of surplus sharing and bonus payments is recognised as an expense when there is a legalor constructive obligation to make such payments as a result of past performance.1.6 ProvisionsProvisions are recognised when the CHE has a present legal or constructive obligation as a result of past eventsfor which it is probable that an outflow of economic benefits will be required to settle the obligation and when areliable estimate can be made of the obligation. All the provisions of the CHE are short-term in nature and thusignore the effect of discounting.1.7 Revenue from exchange transactionsRevenue is the gross inflow of economic benefits or service potential during the reporting period when thoseinflows result in an increase in net assets other than increases relating to contributions from owners.An exchange transaction is one in which the CHE receives assets or services, or has liabilities extinguished,and directly gives approximately equal value (primarily in the form of goods, services or use of assets) to theother party in exchange.Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable,willing parties in an arm's length transaction.MeasurementRevenue is measured at the fair value of the consideration received or receivable, net of trade discounts andvolume rebates.CHE ANNUAL REPORT 2010 - 201143

ACCOUNTING POLICIESFinancial Statements for the year ended 31 March 20111.8 Revenue from non-exchange transactionsThe transfer from the Department of Higher Education and Training is recognised when it is probable that futureeconomic benefits will flow to the CHE and when the amount can be measured reliably. A transfer is recognisedas revenue to the extent that there is no further obligation arising from the receipt of the transfer payment.1.9 Translation of foreign currenciesForeign currency transactionsA foreign currency transaction is recorded, on initial recognition in Rand, by applying to the foreign currencyamount the spot exchange rate between the functional currency and the foreign currency at the date of thetransaction.Exchange differences arising on the settlement of monetary items or on translating monetary items at ratesdifferent from those at which they were translated on initial recognition during the period or in previous financialstatements are recognised as gain or loss in the period in which they arise.1.10 Fruitless and wasteful expenditureFruitless expenditure means expenditure which was made in vain and would have been avoided hadreasonable care been exercised.All expenditure relating to fruitless and wasteful expenditure is recognised as an expense in the statement offinancial performance in the year the expenditure was incurred. The expenditure is classified in accordance withthe nature of the expense, and where recovered, it is subsequently accounted for as revenue in the statementof financial performance.1.11 Irregular expenditureIrregular expenditure as defined in section 1 of the PFMA is expenditure other than unauthorised expenditure,incurred in contravention of or not in accordance with a requirement of any applicable legislation, including -(a) the PFMA; or(b) the State Tender Board Act, 1968 (Act No. 86 of 1968), or any regulations made in terms of the Act; or(c) any provincial legislation providing for procurement procedures in that provincial government.CHE ANNUAL REPORT 2010 - 2011National Treasury practice note no. 4 of 2008/2009, which was issued in terms of sections 76(1) to 76(4) ofthe PFMA, requires the following (effective from 1 April 2008):Where irregular expenditure was incurred in the previous financial year and is only condoned in the followingfinancial year, the register and the disclosure note to the financial statements must be updated with the amountcondoned.1.12 Conditional grants and receiptsRevenue received from conditional grants, donations and funding are recognised as revenue to the extent thatthe CHE has complied with any of the criteria, conditions or obligations embodied in the agreement. To theextent that the criteria, conditions or obligations have not been met a liability is recognised.44

Financial Statements for the year ended 31 March 20111.13 Effect of new Standards of GRAP issuedThe following Standards of GRAP were adopted early by the CHE as there are conflicts with the ASB’sFramework for the Preparation and Presentation of Financial Statements and IAS. This adoption resulted in achange in accounting policies in the previous financial year.GRAP 23 Revenue from Non-exchange Transactions (Taxes and Transfers)The effective dates of the following approved Standards of GRAP's are not yet know. The CHE consideredthese standards in formulating an accounting policy in accordance with the provisions in paragraph .30 ofDirective 5:GRAP 21 Impairment of Non-cash-generating AssetsGRAP 25 Employee BenefitsGRAP 26 Impairment of Cash-generating AssetsGRAP 103 Heritage AssetsGRAP 104 Financial InstrumentsThe following GRAP standard was used to interpret the requirements of other Standards of GRAP:GRAP 24 Presentation of Budget Information in Financial StatementsCHE ANNUAL REPORT 2010 - 201145

NOTES TO THE FINANCIAL STATEMENTSFinancial Statements for the year ended 31 March 20112011 20102. Cash and cash equivalentsCash and cash equivalents consist of:Cash on handBank balances : CHEBank balances : Private AccreditationInvestec : Top 5 accountCorporation for Public Deposits : CHE3942,424,2691,223,7428,638,39015,31512,302,1106429,498,674603,212-14,42110,116,9493. Receivables from exchange transactionsTrade debtorsDepositsFinance lease receivablesPrepaymentsStaff loansOther receivables35,51822,5805,695200,42564,46415,611344,29323,93922,58077,603171,03342,90852,695390,7584. Intangible assetsComputer softwareCost /Valuation446,4922011 2010Accumulatedamortisationandaccumulatedimpairment(337,370)Carryingvalue109,122Cost /Valuation397,618Accumulatedamortisationandaccumulatedimpairment(272,969)Carryingvalue124,649Reconciliation of intangible assets - 2011CHE ANNUAL REPORT 2010 - 2011Computer softwareReconciliation of intangible assets - 2010Computer softwareOpeningbalance141,583Openingbalance124,649Additions68,819Additions48,874Disposals(13,835)Amortisation(64,401)Amortisation(71,918)Computer software to the value of R165,698 (2010: R91,194) has been fully depreciated, but is still in use.Total109,122Total124,64946

Financial Statements for the year ended 31 March 20112011 20105. Property, plant and equipmentLandBuildingsFurniture andfixturesIT equipmentOffice equipmentOffice equipment- LeasedTotalCost /Valuation5,314,74722,813,7021,880,9452,018,615650,292803,66133,481,9622011 2010Accumulateddepreciationandaccumulatedimpairment-(1,669,914)(899,736)(1,203,433)(196,808)(290,470)(4,260,361)Carryingvalue5,314,74721,143,788981,209815,182453,484513,19129,221,601Cost /Valuation5,314,74722,461,9531,547,8731,707,990606,352851,47032,490,385Accumulateddepreciationandaccumulatedimpairment-(875,731)(718,203)(929,759)(122,706)(412,626)(3,059,025)Carryingvalue5,314,74721,586,222829,670778,231483,646438,84429,431,360Reconciliation of property, plant and equipment - 2011LandBuildingsFurniture and fixturesIT equipmentOffice equipmentOffice equipment - LeasedOpeningbalance5,314,74721,586,222829,670778,231483,646438,84429,431,360Additions-351,749333,073310,62543,940386,4641,425,851Depreciation-(794,183)(181,534)(273,674)(74,102)(312,117)(1,635,610)Total5,314,74721,143,788981,209815,182453,484513,19129,221,601Reconciliation of property, plant and equipment - 2010LandBuildingsFurniture and fixturesIT equipmentOffice equipmentOffice equipment - LeasedAssets to the value of R 545,448 (2010: R261,861) have been fully depreciated, but are still in use.Assets subject to finance lease (Net carrying amount)Office equipmentOpeningbalance5,314,74722,021,753835,756655,870325,949315,31629,469,391Additions-317,173252,207361,854295,289417,1971,643,720Disposals--(99,178)-(83,781)(48,818)(231,777)Depreciation-(752,704)(159,115)(239,493)(53,811)(244,851)(1,449,974)513,191Total5,314,74721,586,222829,670778,231483,646438,84429,431,360438,844CHE ANNUAL REPORT 2010 - 2011Fully depreciated leased office equipment with an original cost price of R434,273 was replaced with a newfinance lease for office equipment in November 2010.47

NOTES TO THE FINANCIAL STATEMENTSFinancial Statements for the year ended 31 March 20112011 20105. Property, plant and equipment (continued)Details of propertiesErf 1, Persequor Technopark, PretoriaThe property is located at 1 Quintin Brand Street, PersequorTechnopark, Pretoria. The title deed number is T4934/2009 and theextent of the property is 7,580 square metres.- Purchase price: 30 January 2009- Additions since purchase or valuation- Capitalised expenditure27,360,000668,92299,52728,128,44927,360,000317,17399,52727,776,7006. Finance lease obligationMinimum lease payments due- within one year- in second to fifth year inclusiveless: future finance chargesPresent value of minimum lease payments310,596279,086589,682(59,452)530,230278,096211,838489,934(47,592)442,342Present value of minimum lease payments due- within one year- in second to fifth year inclusive268,650261,580530,230245,216197,125442,341Non-current liabilitiesCurrent liabilities261,580268,650530,230197,125245,216442,341CHE ANNUAL REPORT 2010 - 2011It is CHE policy to lease certain office equipment under finance leases.The average lease term is 3 years andthe average effective borrowing rate is 10% (2010: 11%).Interest rates are linked to prime at the contract date. All leases have fixed repayments and no arrangementshave been entered into for contingent rent.The CHE's obligations under finance leases are secured by the lessor's charge over the leased assets.Refer note 5.7. Payables from exchange transactionsTrade payablesPayments received in advance - Private AccreditationSundry suppliersAccrued bonus1,810,0371,295,50386,50061,8423,253,8822,115,3261,635,59994,50083,0033,928,42848

Financial Statements for the year ended 31 March 20112011 20108. ProvisionsReconciliation of provisions - 2011Leave pay provisionOpeningBalance466,727Additions51,551Utilisedduring theyear(138,243)Total380,035Reconciliation of provisions - 2010Leave pay provisionOther provisionsOpeningBalance387,8291,920389,749Additions265,291-265,291Utilisedduring theyear(186,393)(1,920)(188,313)Total466,727-466,727The leave pay provision relates to vesting leave pay to which employees may become entitled upon leavingthe employment of the CHE. The provision is utilised when employees are paid for their accumulated leave.There is no expected reimbursement of this provision.9. Unspent conditional grants and receiptsNational Treasury granted approval to the DHET to transfer an additional R9 million to the CHE for theimplementation of the HEQF and promulgation of the NQF Act as well as the associated amendments to theHigher Education Act (Act 101 of 1999 as amended).Unspent conditional grants and receipts comprises of:Unspent conditional grants and receipts from the DoEOnce off grant received for new mandateMovement during the yearBalance at the beginning of the yearAdditions during the yearIncome recognition during the year8,626,7778,721,391-(94,614)8,626,7778,721,391-9,000,000(278,609)8,721,391CHE ANNUAL REPORT 2010 - 201149

NOTES TO THE FINANCIAL STATEMENTSFinancial Statements for the year ended 31 March 20112011 201010. RevenueGovernment transferPublic donations36,140,614-36,140,61432,939,60935,98232,975,591The amount included in revenue arising from non-exchange transactionsis as follows:Donation revenuePublic donationsTransfer revenueGovernment transfer-36,140,61436,140,61435,98232,939,60932,975,59111. Government transfer and subsidiesDHET / DoE - Yearly MTEF allocationDHET / DoE - Once-off allocation - Establishment of new mandate36,046,00094,61436,140,61432,661,000278,60932,939,60912. Employee related costsBasic salaryBonusMedical aid - company contributionsProvident fundProvident fund - Administration feesRelocation feesStaff benefit : Computer loansUnemployment Insurance Fund (UIF) - company contributionsWorkmen’s Compensation14,552,206363,351451,907418,463103,22795,5179,57589,14314,62316,098,01213,929,791479,122367,994336,85994,17146,2811,99980,76213,29415,350,273CHE ANNUAL REPORT 2010 - 20115013. Investment revenueInterest revenueBank14. Finance costsFinance leasesInterest - Fair value15. Taxation751,96945,6835,24650,929595,94456,662-56,662The CHE is exempt from normal income tax as more than 80% of its income is defrayed from funds voted byParliament. The CHE is exempted from the payment of Value Added Tax (VAT) on the transfer received. As aresult, any VAT paid by the CHE is also not refundable by SARS.

Financial Statements for the year ended 31 March 20112011 201016. Auditors' remunerationExternal audit feesInternal audit fees630,612307,398938,010528,283216,732745,015Included in the current year's external audit fees is an invoice relating to the audit of the 2010/2011 financialyear to the amount of R125,833.17. Cash generated from operationsSurplus (deficit)Adjustments for:Depreciation and amortisationLoss on sale of assetsFinance costs - Finance leasesMovements in operating lease assets and accrualsMovements in provisionsChanges in working capital:Receivables from exchange transactionsPayables from exchange transactionsUnspent conditional grants and receipts2,681,3731,700,011(22,142)45,683-(86,692)46,465(674,546)(94,614)3,595,538(857,193)1,521,89243,54456,662(269,427)76,978(178,024)2,031,9578,721,39111,147,780CHE ANNUAL REPORT 2010 - 201151

NOTES TO THE FINANCIAL STATEMENTSFinancial Statements for the year ended 31 March 20112011 201018. Related partiesRelationshipsExecutive AuthorityPublic Entities under the DHET / DoECouncil membersDHETSAQAUMALUSIRefer to Accounting Authority ReportMembers of senior management Prof RH Stumpf (Interim Chief Executive Officer -January 2010 to April 2010)Mr A Essop (Chief Executive Officer - appointed May 2010)Dr JH Beukes (Chief Financial Officer - retired December 2010)Related party transactionsConsulting fees paid to (received from) related partiesSAQA633,000955,000Assets purchased from (sales to) related partiesSAQAUMALUSI--(15,700)(54,950)Grant paid to (received from) related partiesDHET / DoE(36,046,000)(41,661,000)CHE ANNUAL REPORT 2010 - 2011Compensation to:Members of key managementCouncil members1,623,548879,2232,502,7711,874,170648,8602,523,03052

Financial Statements for the year ended 31 March 201119. Council emolumentsExecutive2011Chief Executive OfficerChief Financial OfficerBasic salary1,035,302588,2461,623,548Bonuses &performancerelatedpayments---Subsistenceallowance---Leave paidout---Total1,035,302588,2461,623,5482010Chief Executive OfficerChief Financial OfficerBasic salary1,039,351729,7151,769,066Bonuses &performancerelatedpayments-38,31638,316Subsistenceallowance---Leave paidout66,788-66,788Total1,106,139768,0311,874,170Non-executive2011For services as Council membersEmoluments879,223Pension paidor receivable-Compensationforloss of office-Gain onexercise ofoptions-Total879,2232010For services as Council membersEmoluments648,860Pension paidor receivable-Compensationforloss of office-Gain onexercise ofoptions-Total648,86020. Risk managementCredit riskCredit risk consists mainly of cash deposits with banks and the Corporation for Public Deposits, staff loansand other receivables. The CHE only deposits cash with Institutions which have a high quality credit standingand limits exposure to any one counter-party.The receivables are exposed to a low credit risk and no amounts are overdue.Liquidity riskThe CHE is only exposed to liquidity risk with regards to the payment of its trade payables. These tradepayables are all due within the short-term. The CHE manages its liquidity risk by holding sufficient cash in itsbank account, supplemented by cash available in a money market account.Interest rate riskAs the CHE has no significant interest-bearing assets, the CHE’s income and operating cash flows aresubstantially independent of changes in market interest rates.CHE ANNUAL REPORT 2010 - 201153

NOTES TO THE FINANCIAL STATEMENTSFinancial Statements for the year ended 31 March 20112011 201021. Reconciliation between budget and statement offinancial performanceReconciliation of budget with the surplus/deficit in the statement offinancial performance:Net surplus (deficit) per the statement of financial performanceAdjusted for:Roll over 2009 utilisedUnder / (over) budget on other income(Under) / over budget on expenditureLoss / (gain) on the sale of assetsIncrease / (decreases) in provisionLoss / (gain) on exchange differencesPurchase of assetsNet surplus per approved budget2,681,373-(2,239,982)1,092,958(22,142)(86,692)336(1,425,851)-(857,193)486,239804,934(554,507)43,54976,978---22. Actual operating expenditure versus budgeted operating expenditureRefer to Appendix A for the comparison of actual operating expenditure versus budgeted expenditure.23. Fruitless and wasteful expenditureFruitless and wasteful expenditure5,906-The entire amount relates to a penalty and fine for the revised submission and late additional payment of theFebruary 2011 EMP201 return. Due to human error two employees’ tax status was captured incorrectly on theVIP system. After the correcting an additional amount had to be paid.24. Irregular expenditureAnalysis of expenditure awaiting condonation per age classificationCHE ANNUAL REPORT 2010 - 20112009/2010 1st phase of renovations2009/2010 2nd phase of renovations2010/2011 Continuation of 2nd phase of renovations1,717,5911,063,4603,430,7746,211,825The CHE incurred irregular expenditure on the renovations to the building. The supply chainmanagement process as prescribed in the PFMA and Treasury Regulations were not followed when theexpenditure was incurred.The Council has initiated an investigation into this matter to satisfy itself that there was no unethical intentinvolved. The matter will accordingly be reported to the DHET and the National Treasury.----54

Financial Statements for the year ended 31 March 201125. Statement of comparative and actual information2011Financial PerformanceOriginalbudgetFinal budgetActualoutcomeVarianceActualoutcome as% of finalbudgetInvestment revenueTransfers recognised -operationalOther own revenueTotal revenue (excludingcapital transfers andcontributions)Employee costsDepreciation and assetimpairmentFinance chargesOther expenditureTotal expenditureSurplus/(Deficit) for theyear-34,546,0002,088,36936,634,369(18,345,538)--(18,288,831)(36,634,369)--34,546,0002,088,36936,634,369(18,345,538)--(18,288,831)(36,634,369)-751,96936,140,6141,981,76838,874,351(16,098,012)(1,700,011)(50,929)(18,344,026)(36,192,978)2,681,373(751,969)(1,594,614)106,601(2,239,982)(2,247,526)1,700,01150,92955,195(441,391)(2,681,373)- %105 %95 %106 %88 %- %- %100 %99 %- %Capital expenditure andfunds sourcesTotal capital expenditureSources of capital fundsTransfers recognised - capitalBorrowingTotal sources of capitalfunds--------1,425,8511,039,387386,4641,425,851(1,425,851)(1,039,387)(386,464)(1,425,851)- %- %- %- %The budget was approved by the Council and submitted to the executive authority in terms of section 53(1) ofthe PFMA.Savings arose from employee cost as not all vacant positions were filled.No provision made for depreciation and amortisation in the budget.Savings were made on the reduction of planned committee meetings. Due to capacity and staffing constraintsno workshops were held and all research was put on hold by the CEO.An increase in capital expenditure is due to earlier replacement of old computer equipment and a newtelephone system. Some renovation cost were capitalised to the building.CHE ANNUAL REPORT 2010 - 201155

DETAILED INCOME STATEMENTFinancial Statements for the year ended 31 March 2011Note(s)2011 2010RevenueGovernment grantsPublic donations1036,140,614-36,140,61432,939,60935,98232,975,591Other incomeBid document feeCost recovery : CHE & Private AccreditationGains on disposal of assetsInsurance claim receivedInterest receivedRental Income137,9961,911,71022,14227,320751,96912,6002,733,737-619,723-5,731595,94447,6791,269,077Expenses (Refer to page 30)Operating surplus (deficit)Finance costs14(36,142,049)2,732,302(50,929)(35,045,199)(800,531)(56,662)Surplus (deficit) for the year2,681,373(857,193)CHE ANNUAL REPORT 2010 - 201156The following supplementary information does not form part of the financial statements and is unaudited.

NON-FINANCIAL PERFORMANCE INDICATORSFor the year ended 31 March 2011StrategicObjectiveProgrammePerformanceIndicatorAnnualTarget asper StrategicPlanCumulativeOutput forthe yearCommentsAdvisingtheMinisterAdvise theMinister onrequest or onCHE initiativeNumber ofresponses torequestsNumber ofproactive piecesof advice givenN/A 1 All advice work hasbeen put on holdby the CEO.N/A 0 All advice work hasbeen put on holdby the CEO.Monitoringthe state ofhighereducationResearch projectsProjects initiated 1 0 No new researchinitiated.Projects inprogressProjectscompletedsuccessfully2 0 All research wasput on hold by theCEO.1 1 Studentengagementproject completed.Database of HEresearchersNumber ofresearchers ondatabase300 303 262 local41 internationalCollecting datafrom privateinstitutionsNumber of privateproviderscontributing to theHEQCIS database50%(Estimate of116 totalproviders)60providersTarget achieved.Establishing anetwork of datasourcesNumber ofestablished datasourcerelationships7 6 Meeting authoritiesregarding data (atdata sources)hindered progress.CHE ANNUAL REPORT 2010 - 201158Contributingto thehighereducationsectorHEQCmeetingsDissemination ofresearch findingsPromote debateand influencepolicyMeeting ofgroup ofexpertsNew publications 3 3 Three publicationsproduced.Number of copiesof publicationsdistributedNumber of eventsheld (conferences,seminars,colloquia)Number of peoplewho attendedCHE eventsPresentations byCHE directors /CEO at HE eventsby invitationNumber of HEQCmeetings2,000 3,154 Target achieved.4 4 Target achieved.200 139 Fewer attendeesthan expected.6 9 Target achieved.9 9Target not set inStrategic Plan.

For the year ended 31 March 2011StrategicObjectiveProgrammePerformanceIndicatorAnnualTarget asperStrategicPlanCumulativeOutput forthe yearCommentsAccreditprogrammesof highereducationAccreditationof newprogrammesNumber ofAccreditationCommitteeMeetings6 6 Target achieved.Number of newprogrammes tobe assessedand/or to becompleted(Candidacyphase )100 288 We cannot determine atarget as institutionssubmit when they areready.New programmessubmitted via theHEQC onlineNew programmessubmitted to theAccreditationCommittee0 2480 400Number of programmesreceived, assessed andsubmitted toAccreditation Committeediffers.ReaccreditationofprogrammesNumber ofre-accreditationsassessed andcompleted130 250 2009 re-accreditation –final HEQC approval inthis financial year. Thecurrent 130 target willonly be completed in2011.Review theaccreditationstatus ofhighereducationprogrammesin specificareasAnalysis ofimprovementplansMonitoring ofteach-outplansNumber ofimprovementplans analysedNumber of teachoutplans5 5 Target achieved.11 2 The target to monitorwas 11 in that financialyear, and they wereindeed monitored i.e.letters written andprogress noted.However, it takesseveral years to actuallyteach out a programmebecause the pipelinestudents do not all finishat one time. In thisfinancial year, two fullprogress reports weresubmitted, the otherswere expected byDecember 2010, andwere not received.Institutions have beengiven a new due date forprogress reports of July2011. All 11 will continueto be monitored for theforeseeable future.CHE ANNUAL REPORT 2010 - 201159

NON-FINANCIAL PERFORMANCE INDICATORSFor the year ended 31 March 2011StrategicObjectiveProgrammePerformanceIndicatorAnnualTarget asperStrategicPlanCumulativeOutput forthe yearCommentsAudit thequalityassurancemechanismsof highereducationinstitutionsConductaudits ofpublic highereducationinstitutionsNumber of auditsconducted6 3 The annual target wasincorrect.Quarterly targets havenot been met as dates ofaudits were altered afterthe business plan wascompiled.Only three audits wereconducted in thisfinancial year.Analyse andapproveinstitutionalimprovementPlansNumber ofimprovementplans analysedand approved3 2 Only two improvementplans were receivedduring the financial year.Institutions are permittedto apply for timeextensions.Institutional AuditCommitteeMeetings0 2 Target not set inStrategic Plan.Promotequalityassurance inhighereducationTrainingworkshopsfor auditorsNumber ofauditorpreparationworkshops held1 0 No additional trainingwas necessary as thefirst cycle of audits isnearly completed andwe have an establishedpool of trained auditorsto select from.TrainingworkshopsforevaluatorsNumber ofevaluatorpreparationworkshops held4 0 Due to staffingconstraints and therequirements of the CHEno workshops will beheld during this financialyear.CHE ANNUAL REPORT 2010 - 2011Holding ofqualityassuranceforumsImplementationof studentparticipationin qualityassuranceNumber of foraheldNumber ofworkshops4 0 Due to staffingconstraints and therequirements of the CHEno workshops will beheld during this financialyear.2 0 Project was completedat the end of theprevious financialperiod.60

LIST OF ACRONYMSASBCCMACEOCFOCESMCHEDoEDHETDoLDPSADSTENEEXCOFETGRAPHEHELTASAHEMISHEQCHEQCISHEQFHESAHEIHRIASIASBICTIFRSLLBMTEFNARSNPHENQFNRFNLRDNPHENSSEPAAPFMAPWGHEQAQCQCTOQPCDSA GAAPSAQASASSESATNSARSSETASAUSUIFUMALUSIVATAccounting Standards BoardCommission for Conciliation, Mediation and ArbitrationChief Executive OfficerChief Financial OfficerClassification of Educational Subject MatterCouncil on Higher EducationDepartment of EducationDepartment of Higher Education and TrainingDepartment of LabourDepartment of Public Service and AdministrationDepartment of Science and TechnologyEstimates of National ExpenditureExecutive CommitteeFurther Education and TrainingSouth African Standards of Generally Recognised Accounting PracticeHigher EducationHigher Education Learning and Teaching Association of South AfricaHigher Education Management Information SystemHigher Education Quality CommitteeHigher Education Quality Committee Information SystemHigher Education Qualifications FrameworkHigher Education South AfricaHigher Education InstitutionsHuman ResourcesInternational Accounting StandardsInternational Accounting Standards BoardInformation and Communication TechnologiesInternational Financial Reporting StandardsBachelor of LawMedium Term Expenditure FrameworkNational Archives and Records Services Act 43 of 1996National Plan for Higher EducationNational Qualifications Framework Act 67 of 2008National Research FoundationNational Learners’ Records DatabaseNational Plan for Higher EducationNational Survey of Student EngagementPublic Audit Act 25 of 2004Public Finance Management Act 1 of 1999Presidential Working Group on Higher EducationQuality AssuranceQuality CouncilQuality Council for Trades and OccupationsQuality Promotion and Capacity DevelopmentSouth African Statements of Generally Accepted Accounting PracticeSouth African Qualifications AuthoritySouth African Survey of Student EngagementSouth African Technology NetworkSouth African Revenue ServicesSector Education Training AuthoritySouth African Union of StudentsUnemployment Insurance FundCouncil for Quality Assurance in General and Further Education and TrainingValue Added TaxCHE ANNUAL REPORT 2010 - 201161

ORGANISATIONAL STRUCTUREAs at 31 March 2011CEO DIRECT REPORTSCEO’S OFFICEORGANISATIONALSECRETARYCHIEFEXECUTIVEOFFICERCHIEFEXECUTIVEOFFICERPERSONALASSISTANTEXECUTIVEDIRECTOR:QUALITY ASSURANCEHUMANRESOURCESMANAGERDIRECTOR:STANDARDSDEVELOPMENTDIRECTOR:MONITORING& EVALUATIONCHIEFACCOUNTANTLIBRARIANORGANISATIONALSECRETARYDIRECTOR:INSTITUTIONALAUDITSRECEPTIONISTDIRECTOR:PROGRAMMEACCREDITATIONDIRECTOR:NATIONALREVIEWSMONITORING & EVALUATIONSTANDARDS DEVELOPMENTCHE ANNUAL REPORT 2010 - 2011RESEARCHMANAGERJUNIORRESEARCHERDIRECTOR ADMINISTRATOR DIRECTORDATAADMINISTRATORDATAANALYSTSENIORMANAGERSECRETARY62

QUALITY ASSURANCEEXECUTIVEDIRECTORPERSONALASSISTANTMANAGERPROJECTADMINISTRATORDIRECTORINSTITUTIONALAUDITSSECRETARYSECRETARYDIRECTORPROGRAMMEACCREDITATIONDIRECTORNATIONALREVIEWSMANAGERMANAGERSENIORMANAGERSENIORMANAGER(SPECIAL PROJECTS)SECRETARYPROJECTADMINISTRATORPROJECTADMINISTRATORMANAGERADMINISTRATORADMINISTRATORMANAGERPROJECTMANAGERMANAGERPROJECTADMINISTRATORADMINISTRATIVEASSISTANTPROJECTADMINISTRATORPROJECTADMINISTRATORPROJECTADMINISTRATORCORPORATE SERVICESGENERALOFFICEASSISTANTGENERALOFFICEASSISTANTSUPPLY CHAINMANAGERCHIEFACCOUNTANTSUPPLY CHAINADMINISTRATORADMINISTRATIVEASSISTANTADMINISTRATIVEASSISTANTSECRETARYFINANCEMANAGERFINANCEADMINISTRATORFINANCEASSISTANTHUMANRESOURCESMANAGERHUMANRESOURCESADMINISTRATORCHE ANNUAL REPORT 2010 - 201163

NOTESCHE ANNUAL REPORT 2010 - 201164

CHE ANNUAL REPORT 2010 - 2011Published byThe Council on Higher EducationCHE Switchboard: +27 12 349 38401 Quintin Brand Street,Persequor TechnoparkBrummeriaPretoriaSouth AfricaPO Box 94Persequor Park0020South Africawww.che.ac.zaISBN: 978-1-919856-82-7012 327 5154

CHE ANNUAL REPORT 2010 - 2011Published byThe Council on Higher EducationCHE Switchboard: +27 12 349 38401 Quintin Brand Street,Persequor TechnoparkBrummeriaPretoriaSouth AfricaPO Box 94Persequor Park0020South Africawww.che.ac.zaISBN: 978-1-919856-82-7COUNCIL ON HIGHER EDUCATIONCouncil on Higher Education2010 - 2011