Every few years there’s a major crisis for every business, sometimes even self-inflicted. One has to accept that and plan for it. Working with regulators however, makes the crisis more certain and the nature of the crisis more unpredictable.

 

The Academy for Facilities Management (Academy) is duly registered as a Private Higher Education Institution under the Higher Education Act of 1997 (Registration certificate No.2009/HE07/012) and hence we have three regulators in the education space:

  • Department of Higher Education and Training (DOHET)
  • Council for Higher Education (CHE) / Quality Council for Higher Education (HEQC)
  • South African Qualifications Authority (SAQA)

And then there is the ever-ubiquitous regulator of our income – SARS. There are many others in the SA landscape where the politically connected find a haven to do the bidding of their political master.

 

While the whole country is gripped by the ZUPTA saga, and rightly so, the regulators are happily going about the business of obstructing business and development by way of arbitrary bureaucratic decisions or incompetence or even worse, arrogance. Small businesses like the Academy are being destroyed by these untouchable bureaucratic institutions. Even if one accepts that their actions are not systematic or intentional, the effect is still the same. It is too costly for a SSME to fight these tax funded institutions and their own internal review processes grind so slowly that any justice that may be forthcoming will only be good for the obituary of many a small business.

 

I do not know if any playwright could have conjured up a more sinister drama than the one I am about to tell, but I want you to remember that it is a deadly plot of bureaucratic institutions destroying a small business. I am going to leave personalities and detail out of it for the moment as the bare fact should suffice to chill the bones of any small business.

 

The plot has three main characters, most but not all, bumbling about in a special bureaucratic haze happily unaware of and decidedly unrepentant about the destruction they bring.

 

Scene I: Enter the first character: CHE

Every few years Private Higher Education Institutions (PHEI) have to apply to have their academic programmes (courses) re-accredited by the CHE (Council on Higher Education).

 

The Academy is currently engaged in such a process, which evaluates the institution on the basis of 19 criteria. This is a very costly and time-consuming process, with direct external costs to the Academy, already running over 200K. Midway through this process the CHE realised that there is a long standing unresolved administrative issue concerning one of the 19 criteria. the CHE’s response was not to try and resolve this one issue (about which I am happy to share all the details) and enable the institution to keep functioning. On the contrary and true to the best of bureaucratic behaviour, it decided to apply the jackboot. The CHE’s Accreditation Directorate arbitrarily decided to abandon the entire re-accreditation process and make a…’ recommendation that the (Academy’s) programmes should not be reaccredited.’

 

This arbitrary decision threatens the ability of the Academy to continue to function as a PHEI – an end to 12 years in the HET band of the education sector based on a bureaucratic whim.

 

Any reasonable person would assume that all of the 19 criteria for programme accreditation are relevant and that the process cannot be ditched based on an administrative he says/she says issue dating back three years and which the CHE has not bothered to investigate. Reason and justice dictates that the re-accreditation process should be completed, which will provide a comprehensive perspective on the fitness of the Academy to be re-accredited or not. In the current political climate where state entities seem to run amok, reason and justice may be a bridge too far.

 

It has been four (4) months since the CHE informed us about this arbitrary decision and no progress has been reported. If the CHE delays any longer the Academy will have to close its doors by default as the end of our current accreditation period terminates on 31 December 2017.

 

Scene two (actually scene one is still underway, but this one refused to remain off-stage): QCTO

The Academy is a PHEI, but functions exclusively within the Facility Management (FM) industry.

Another regulator in the education space, the QCTO (Quality Council for Technical and Occupational Qualifications) recently issued documentation to the entire FM industry that the Academy’s registered qualifications will be withdrawn as the QCTO is creating a new FM qualification in the FET band. Quite apart from any draconian and un-competitive considerations, this action has caused doubt and confusion in the industry as to the Academy’s continued existence and is clearly highly damaging.

 

It is quite clear that the QCTO does not understand its own statutory powers as the Academy does not operate in the FET band of education, nor did the QCTO accredit our programmes. In fact, the QCTO was not even in existence when our programmes were initially accredited by the HEQC.

 

Correspondence on the matter has extracted a partial acknowledgement from the OCTO that they have erred and they have now Gazetted a document which omits the damaging text. However, when it comes to a demand that the QCTO inform the industry about their error, they refuse. The damage to the Academy’s good name is inestimable especially during a period when students should be considering registration for 2018. If the Academy had the means, legal proceedings would certainly have been instituted to force a public acknowledgement of their error and to claim for damages.

 

This is however not the extent of our regulatory woes.

 

Scene three (actually scene one is still underway, but this character sort of fell onto the stage): SARS

You will be familiar with the state’s Central Supplier Database (CSD). The CSD must vet all suppliers to state entities and it is rather important for us to ensure good standing. The CSD have now advised the Academy that it is no longer an approved supplier on their system, which prevents anyone working for the state or a state-owned institution, from enrolling.

 

Further enquiries by our auditors have revealed that the Academy’s new CSD status is due to a SARS error –  SARS has misallocated the Academy’s provisional tax payment (June 2017) on their own system, which in turn feeds data to the CSD.

Our auditors lodged a complaint (CMO Case No. 252801228) with SARS who has exhausted the 21-day review period, but has failed to affect any correction or provide any explanation. The same complaint now has to be referred to another SARS unit which also has 21-days to respond. In the meantime, our ability to do business with the state sector (40% of turnover) and be eligible for state tenders, has been effectively terminated. When the correction will be made by SARS and when the CSD will be corrected is anyone’s guess.

 

The pleasure of doing business in SA…

The latest World Economic Forum’s annual competitiveness report has seen South Africa drop by 14 positions.

The WEF report compares 137 economies against each other and against a set of factors which determine the country’s economic productivity. The report, shows that South Africa has declined steeply in its economic productivity. I, for one, am not surprised.