Further Education and Training Colleges Act, 2006 (Act No. 16 of 2006)

National Norms and Standards for Funding Further Education and Training Colleges (NSF-FET Colleges)

E. Other funding streams
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Earmarked capital funding

 

63)This public funding stream covers items not covered by the capital infrastructure portion of the national funding base rate (see paragraph 88 below). Hence this stream covers two types of capital expenditure: (1) Capital expenditure to expand the infrastructure of existing campuses, or to construct new campuses; (2) Capital expenditure required to address capital infrastructure backlogs inherited from spending in the past.

 

64)Earmarked capital funding may take a variety of forms, for example conditional grants declared in terms of the Division of Revenue Act, or matching grants involving joint investment with the private sector. Moreover, this type of funding is always conditional in the sense that it is earmarked for specific capital investments, where these investments are integrated into the strategic plans of colleges.

 

65)PEDs must ensure that transparent and fair procedures are followed in the allocation of earmarked capital funding to colleges. However, it is not a requirement that all colleges be funded equitably with respect to this stream in every financial year. Targeting of particular colleges during particular years is thus permissible. However, in the medium to long term, the distribution of earmarked capital funding across colleges must be equitably pro-poor.

 

66)Earmarked capital funding is an important means for making colleges more accessible for the physically disabled. PEDs should ensure that sufficient earmarked capital funding is made available to adapt existing infrastructure in such a way that full access in this regard becomes possible.

 

Earmarked recurrent funding

 

67)This public funding stream is similar to the earmarked capital funding stream, except that it deals with recurrent items. It is earmarked for projects of a developmental nature, in particular staff development, development and implementation of computerised systems, and college-level research. In addition, the earmarked recurrent funding stream covers inputs that are considered part of a basic minimum package of recurrent inputs required more or less equally by all colleges.

 

68)PEDs may determine a basic minimum package required by all colleges to cover basic overhead expenses outside of the formula funding of programmes stream. Such a package, which should be considered earmarked recurrent funding, could take the form of a financial transfer, employee posts, or goods and services. Regardless of its form, the monetary value of the basic minimum package should be clearly reflected in the financial statements of colleges. PEDs may vary the size of the basic minimum package by college, based on criteria that are fair and fully transparent.

 

69)Transparency and equity requirements for earmarked recurrent grants directed towards development projects are the same as those applicable to earmarked capital grants and described in paragraph 63 onwards.

 

College fees

 

70)The Further Education and Training College Act, 2006 makes it clear that public FET Colleges may raise revenue through the charging of college fees. For the purposes of this policy, college fees are fees charged to students by public FET Colleges to cover the portion of the training cost not covered by formula funding of programmes. For the purposes of this policy, then, college fees do not include hostel fees, or fees charged for programmes that do not receive public FET funding.

 

71)The formula funding of programmes, described from paragraph 27 has implications for what may be considered fair practice with respect to college fees. In particular, the level of the college fees charged should not deviate substantially from what is implied by the assumed fee level described in paragraph 47.

 

72)In accordance with paragraph 18, the responsibility for structuring college fees charged for programmes receiving formula funding rests with colleges. However, the net effect of this structuring should be that the total planned income from college fees should be more or less equal to what is implied by the assumed fee levels per programme. The total planned income from college fees may be up to 10% higher than the assumed fee level described in paragraph 47, without there being a need for PED approval. Moreover, the college fee charged to a student for any particular programme, subject to formula funding should not deviate substantially from the rand amount implied by the assumed fee level for that programme. Any deviation outside of the bands referred to here require PED approval, within the PED-college planning process. The way the transition occurs from the outgoing fee structures of colleges to the new fee structures implied by this policy is linked to how the transition to more normalised per student spending is achieved across colleges. This transition matter is referred to in paragraph 120.

 

73)The DoE must establish and maintain a national FET College bursary system. The administration of this bursary scheme will be by NSFAS. This must include a means test designed to gauge the financial needs of public FET College students, as well as the necessary tools required to implement the means test. The DoE must further formulate rules and guidelines regarding the allocation of bursaries to colleges, as well the awarding of such bursaries. The bursary systems shall be aimed at ensuring that an inability to pay college fees does not constitute a barrier to academically capable student's access to a formula funded programme at a public FET College. The means test and accompanying rules and guidelines must be based on best practice and research findings, and be aimed at providing public FET Colleges with a system within which responsiveness to student need and programme cost can be managed by the college. The DoE requirements and guidelines shall be sufficiently detailed and binding to establish a transparent system and to enforce key policy imperatives.

 

74)The rules and guidelines regarding bursaries referred to in the previous paragraph should incorporate an efficiency element whereby students who repeat programmes should be less eligible for bursaries than students who enrol for programmes for the first time.

 

75)Colleges must manage bursaries in accordance with paragraph 73 to 74.

 

Student financial aid

 

76)In this policy, student financial aid is funding, in the form bursaries or loans, provided by the state or private organisations to students, possibly through the public FET College, to deal with costs such as college fees, accommodation, transport as well as subsistence costs.

 

77)The DoE and PEDs should monitor the situation with respect to needs-based funding over and above the bursaries, and make proposals for systems and partnerships where necessary. Options involving agreements between the state and public and private lending institutions should be explored.

 

Fee-for-service income

 

78)This stream of funding is income derived by public FET Colleges from training services offered on a market basis to private and public clients outside of the formula funding system. Income received for HE training services offered under the auspices of HE institutions in terms of FET Colleges Act is considered as part of the fee-for-service income.

 

79)Paragraph 14 of this policy explains the need to ensure that fee-for-service prices are not cross-subsidised by public funds intended for formula funded programmes. In other words, fee-for-service prices should reflect the true cost of offering the service. To enforce this, the DoE will monitor the prices of fee-for-service training offered, relative to the cost of formula funded training as reflected in the national register of FET College programmes (see paragraph 37). The requirement is that fee-for-service training should not be offered at a price that is lower than the cost of an equivalent formula funded programme.

 

80)Clearer information in the training market relating to the cost of delivering training programmes, can greatly assist private and public employers in planning their human resource development activities. Given that the DoE will be engaged in extensive research work re lating to the costing of training programmes, in order to realise the system of formula funding of programmes, the DoE will be well placed to provide the market with valuable information and guidance relating to training costs. The DoE, in collaboration with the Department of Trade and Industry and the Department of Labour, may develop pricing manuals that can be used by public FET Colleges, other providers, and employers, to assist in the provision and procurement oftraining.

 

81)The DoE must investigate the feasibility of developing and maintaining a national list of recommended prices for training programmes other than those training programmes appearing in the national register of FET programmes. Such a list could assist in the monitoring of prices referred to in paragraph 79, and could be used by employers to plan their procurement of services offered by various providers, but in particular public FET Colleges.

 

Other private funding

 

82)This stream of private funding is all private funding not covered in the preceding paragraphs of Section E. This stream would include, amongst other things, development funding from international and local donor agencies, and income derived from the sale of goods produced by students as part of a training programme.