Re-ranking of Schools: Addressing Funding Inequality and Poverty Distribution

1. Department of EducationPresentation to Select Committee of FinanceFFC Submission for the Division of Revenue: 2009/1011 June 2008

2. Areas Addressed in the Presentation • Re-ranking of schools • Learner Transport • Performance monitoring framework

3. Re-ranking of SchoolsFFC Submission • Key findings - In poorer provinces: Schools previously assigned to Quintiles 2 and 3 have been reassigned to Quintiles 1 and 2 – receive greater funding than previously - In richer provinces: Schools previously assigned to Quintiles 1 and 2 have been reassigned to Quintile 3 – receive reduced funding and are re-ranked as fee-paying schools. - Use of wards to rank schools does not reflect poverty distribution of school or the profile of the community. - National driven re-ranking does not translate into same outcome as when the ranking was provincial specific. • Recommendation - Need to review method used to inform national quintile ranking of schools and should take into account the socio-economic circumstances of the learners (inequality and poverty).

4. Re-ranking of SchoolsDepartmental Comments Comments on Key Findings • The Department agrees with the key findings that: In poorer provinces: Schools previously assigned to Quintiles 2 and 3 have been reassigned to Quintiles 1 and 2 – receive greater funding than previously; and In richer provinces: Some schools previously assigned to Quintiles 1 and 2 have been reassigned to Quintile 3 – receive reduced funding and are re-ranked as schools that can charge fees. • One of the key findings is that schools should not be disadvantaged as a result of reclassification. If a school is incorrectly classified, reclassification must take place. Such adjustment is normally a phased-in process. It is understood that the pro-poor policy changes may have unintended consequences. Where these have been identified corrective actions have been instituted. • The use of wards to rank schools is currently the best available measure, unless a better and more efficient method can be recommended. In terms of the norms, ranking can be measured against ground truth. • The FFC arrived at the finding that the National driven re-ranking does not translate into the same outcome as when the ranking was provincial specific. This is true and must be the result, since the National ranking ensures that the equally poor are similarly classified in all provinces. The 20% grouping per quintile is now done nationally and not per province.

5. Re-ranking of Schools Departmental Comments Comments on Recommendation • The Department maintains the view that the current method for the National quintile ranking of schools does take the socio-economic circumstances of the learners (inequality and poverty) into account. • Current policy makes provision for poor learners in higher quintile schools not to pay school fees through the exemptions policy. • The ranking of schools is based on data from Stats-SA which unfortunately could not be segregated to smaller units based on confidentiality involved in household income. However, the Department does provide for a reality verification and adjustments if needed. Provincial Heads of Departments have this power. • The Department is currently reviewing the quintile system and the Minister could consider revised policy before the end of 2008.

6. Learner Transport FFC Submission • Key findings - No specific national policy whilst a number of pieces of legislation refer to learner transport services. - No clear definition and division of responsibilities between education or transport at both national and provincial level. - Policies and practices between provinces differ (criteria and modes of transport). • Recommendations - National norms and standards for the provision of learner transport should be established. This requires clear assignment of responsibility. - Interim measure: all provinces should implement statutory provision that ensure learners are afforded opportunity of equal access to the right to education.

7. Learner Transport Departmental Comments Comments on Key Findings • The Department agrees with the key findings indicated by the FFC.

8. Learner Transport Departmental Comments Comments on Recommendations • It is accepted that there should be a clear assignment of responsibility on learner transport. Whilst this remains unresolved, poor learners especially in rural communities suffer. The Department undertook a study on scholar transport (the development of policy, norms, delivery and funding). Both HEDCOM and CEM have considered the draft documents. The Department of Transport has also been working on the issues and our two departments are aligning this work. • There are ongoing initiatives between the two National departments (i.e Education and Transport) to meet and agree on a common approach going forward. • Currently, the data on investment in learner transport is limited due to disparities between provinces, although expenditure figures are available in the draft learner transport report. • Sector initiatives have been that a budget line item for scholar/learner transport be provided in the standard chart of accounts to be utilised across all provinces. This is, however, not adhered to by all provinces.

9. Performance Monitoring Framework FFC Submission • Key Findings - Budget allocations to schools not reflected across all provinces. - 2008 DoRA requires that allocations per school be gazetted, but does not specify information for fee-paying and no-fee schools. Difficult to extract information on no-fee schools due to economic classification. - Data on learner transport (financial and non-financial) not available. Impacts negatively on planning, assessment and evaluation of efficiency and effectiveness of service. • Recommendations - To assess pro-poor impact of school funding norms, the Department of Education should make publicly available and accessible the funding norms for no-fee and fee-paying schools in line with the 2008 DoRA requirement for indicative allocations by school. - Provincial Education Departments should be enabled to report on budgets and spending on learner transport.

10. Performance Monitoring Framework Departmental Comments Comments on Key Findings and Recommendations • In respect of the requirement for the gazetting of indicative allocation information per school, the DoRA requires that it be published by the provincial treasury. This is a new requirement and National Treasury is providing provinces with assistance in this respect. • Provision is, however, made in the National Norms and Standards for School Funding that provinces must gazette the resource targeting list which includes a list of schools with their EMIS numbers, names, poverty score and National quintile in which they are situated. The Minister annually also publishes a list of no fee schools per province, per location and per allocation – this is available on the Department’s web-site. • It should be noted that the compilation of budgets is an Intergovernmental Relations matter. Provincial treasuries have the final say on how the provincial budget statements are published.