columnBy Robert Araeb
AS a proud Namibian, I am pleased to live in a country where education is a fundamental right that is entrenched in our Constitution.
As a nation we recognise the importance of the education agenda which is why education spending amounts to about 23 percent, totalling to N$9.4 billion, of our 2012/2013 budget. Namibia is one of the highest spenders on education in the world. However, is this focus on education spending directed at the right levels to address Namibia's ever-widening skills gap?
In the 2012/ 2013 fiscal year, government intends to focus its education spending on the following key areas:
Construction and upgrading of educational facilities;
Recruiting qualified teachers and constructing accommodation facilities for teachers in rural areas;
Improving funding to the Students Financial Assistance Fund to enable more youth to access tertiary education;
Providing for increased vocational training.
It is not surprising, and correctly so, that the bulk of our country's educational spend is directed at primary and secondary education level. If we play our cards right as a nation and maintain our focus on the quality of education, this spending, along with targeted non- financial interventions, should result in a notable dent in our country skills gap in the long-term future. It pleases me that education has been identified as one of the key enablers for economic development in NDP4.
Where does that however leave us in the not-too-distant future, especially with regards to the youth that require tertiary education in order to become productive and economically productive citizens? As per the 2011 UNDP Human Development Report approximately only 8.7 per cent of educational spend in Namibia is geared towards tertiary education. It is thus not surprising that only 8.9 per cent of school leavers enrol at tertiary institutions, leaving the majority of the rest to fuel the unemployment rate.
In order to develop a skilled nation, we need to also invest our energy and significantly increase our focus on tertiary education. The capacity of tertiary institutions should be enhanced and the barriers of entry to tertiary education should be removed. This responsibility lies with individual citizens, families, private sector, government as well as the tertiary institutions themselves. Such institutions have a vital role to play in turning Namibia into a nation of skilled champions.
The high cost of education is one of the entry barriers to higher education. Despite the increased spending by government on student financial assistance, the affordability of tertiary educations remains a challenge for many middle income households. On the other side of the coin, most tertiary institutions are feeling the brunt of the high cost of delivering education, as they cannot transfer all their true costs to students.
One way that such cost can be controlled is for academic institutions to enhance operational efficiencies and to make better use of existing resources. tertiary institutions need to look more carefully at academic course profitability, through measuring and controlling the financial performance of academic cost.
Such efficiencies and cost reductions can often be achieved through greater focus on internal controls and financial accountability. Specific interventions can include, but are not limited to: investing in smart IT systems, procurement cost reduction, tightening controls around student debt management, alliances to achieve economies of scale, optimising the use of assets and effectively using shared service centres.
With this achieved, tertiary institutions stand a chance at reducing their cost structures and increase their financial viability without over reliance on external funding. As an auditor and business advisor, I firmly believe that internal audit in tertiary institution can assist in this process by anticipating potential problems and suggesting solutions to mitigate those risks before they materialise.
Another barrier of entry is physical access to tertiary institutions. Academic institutions such as Unam [University of Namibia] have made notable strides in establishing campuses across the country, whilst the Polytechnic of Namibia has successfully established its various centres of excellence. Such initiatives are steps in the right direction in making tertiary education more accessible. Expanding educational wings however does not come without its challenges and related cost. The internal audit functions of tertiary institutions can help in providing assurance over the optimal use of technology, human capital and other resources across these often geographically segmented institutions.
Improved governance and control has seen many organisations prosper in both the private and public sectors. Institutions in the tertiary education sector should therefore be no exception. Optimally run academic institutions instill confidence in their investors, funders, students and stakeholders. This in turn is likely to inspire an upward spiral in higher education.
Robert Araeb is a Director at KPMG and is responsible for Internal Audit, Risk and Compliance services. He is a Chartered Accountant (Nam) (SA) and is a member of the Institute of Internal Auditors.