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)F. Financial management at Public Further Education and Training Colleges |
| 83) | It is not the purpose of this policy to provide general financial management rules for public FET Colleges. The use of GAAP, external auditors, internal audit and risk management will become entrenched across all colleges. College management toolkits developed by the DoE are being used in a number of colleges. It is important for this work to continue, and for financial management requirements to become nationally standardised. |
| 84) | The DoE and PEDs must pay particular attention to the development of accounting structures and practices that allow for a clear separation of public and private costs. Financial accounts must be arranged in such a way that the utilisation of publicly financed infrastructure for fee-for-service programmes is reflected as such, so that the financial cost of this is clear. Similarly, the utilisation of the same staff members for the offering of public and private training services should result in separate public and private accounting of the related expenditure. |
| 85) | The DoE and PEDs must pay special attention to the matter of the financial reserves of colleges, and private loans taken by colleges to fund infrastructural and other development. Practices in this regard should not place the sustainability of colleges at risk, nor should they result in excessive mission drift away from the role of colleges as public providers of FET. |
While section 24(2) of the FET Act 16 of 2006 says: "A public college may not raise money by means of loans or overdraft without approval of the Member of the Executive Council", these norms and standards do not provide the criteria and conditions under which an MEC may approve the raising of loans. The Department of Education in consultation with the National Treasury and PEDs will develop procedures, criteria and conditions under which the MEC may consider approval.