Pretoria – The Department of Higher Education and Training (DHET) says the troubled Walter Sisulu University (WSU) remains bankrupt, and that the 8% - 10% salary increase demanded by the staff will have “disastrous consequences” on its cash flow.
Amid general public calls for government to intervene, Higher Education and Training Director-General, Gwebinkundla Qonde, told a media briefing on Thursday that his department had met with the key stakeholders in the university, including alliance structures.
However, Qonde said the unions do not grasp the enormity of their demands and the consequences of their continued action.
The institution, which is located in the Eastern Cape and services mainly impoverished and rural students, has been closed following a protracted six-week wage strike by lecturers and general staff after wage talks collapsed.
The staff is demanding an increase of between 8% and 10%, but the university is offering 4.25%. A stalemate has brought the university -- which has spent the past two years under administration -- to a complete standstill, as there have been no classes for six weeks.
“It should be noted that the 2013 break-even budget takes into account the 4.25% salary increase offered, and any amount above this will result in cash flow problems and significant budget deficits going forward,” said Qonde, calling on the stakeholders in the strike to understand the gravity of the financial problems facing the university.
Qonde also called on stakeholders to ensure that the decisions they make do not threaten the long-term financial viability of the institution.
“The future of students, staff and other key stakeholders depends on the prudent and responsible financial management of the institution to ensure the long-term sustainability and academic enterprise of the university,” said the DG.
On Tuesday, the management announced an indefinite closure and instructed students to leave the university and vacate all residences by midday on Tuesday.
However, students clashed with the police, prompting police to fire rubber bullets to disperse protesting students at the Butterworth campus. About 12 students were injured in the protest. The university management has now given students an extension until Friday to vacate the premises.
The institution was put under administration in 2011 after it applied for an increase in its overdraft from R147 million to R250 million in order to meet its payroll commitments.
“The current strike threatens to reverse the significant gains made over the last year. For the first time in the last five years, WSU has tabled a balanced budget where expenditure is in line with the income of the university,” said Qonde.
By June 2013, Qonde said the administrator appointed in 2011 reported that financial stability had been achieved in the short-term, with all creditors paid, staff salaries secured, backlogs cleared and a break-even budget tabled for 2013.
Within the first year, the administrator managed to clear the bank overdraft of the university, improve and implement internal control systems and reduce student debt from R271 million to R40 million.
“However, having said this, the university remains technically and commercially bankrupt, and will require discipline and determined leadership to ensure that over the long-term, the university becomes financially sustainable.”
A turnaround strategy submitted to the department, according to Qonde, indicates that the personnel costs constitute 75% of the costs. Before the administration, personnel costs constituted 80%.
Qonde said staff at WSU is among the highest paid university employees in the country. The national payroll norm for universities is between 55% and 62% of the total university costs.
He attributed this to the geographical location of the institution, saying it needed to attract the right quality of academics.
Despite the institution offering the best remuneration, the Higher Education Quality Committee (HEQC) report on the institutional audit of WSU in April 2011 found that throughput rates for students at WSU were below DHET benchmarks.
Undergraduate success rates and graduation rates at the institution were also the lowest among comprehensive universities.
A link was also made between poor academic performance and inadequate infrastructure and poorly supported academics as a result of a combination of financial constraints and poor human resource planning.
The HEQC indicated that the university would need to make some difficult choices geared towards providing short- and long-term financial stability.
HEQC said the institution should develop a quality improvement plan to address all the issues highlighted in the report.
Qonde said as the department, they were committed to ensuring the financial sustainability of WSU, and had provided significant financial resources since the appointment of the administrator to ensure WSU’s stability and future prospects.
The department has allocated R310 million to address the historic debt of students; and R64.2 million for teaching and learning technology, of which R32.1 million has already been transferred.
About R14.4 million has been set aside for technical expertise; R48 million funded a once-off inflation amount for bonuses of personnel in 2012; and R421.8 million through the Infrastructure and Efficiency Funding allocation for the 2012/13 – 2013/14 cycle.
Since the university was placed under administration, investigations found that for five years, the institution was operating on a council approved deficit and illegally used earmarked grants provided for infrastructure improvement to pay salaries.
About 20 staff members implicated in the mismanagement of funds have been fired and investigations are still ongoing.
This total budget, Qonde said, amounts to over R858 million, which is over and above the block grant subsidy allocation, foundation provisioning grant, research development grant, teaching development grant and clinical training grant provided in terms of the funding framework.
Qonde said the administrator has informed the department that all efforts will be made by management to ensure that the academic year is not lost and that students will be recalled as soon as possible. – SAnews.gov.za
