Salary hike demands close large rural university

Despite being put under administration and rescued from bankruptcy by the government, Walter Sisulu University, or WSU, is still in a terrible mess. Last week the institution was closed indefinitely over an unresolved salary dispute with workers that had been simmering for more than six weeks.

The dispute between workers and the university authorities risks overturning short-term financial stability achieved by the rural institution after years of financial turbulence.

There has also been student unrest, and the university’s 21,000 students, distributed across four campuses, were told to vacate the premises by midday last Wednesday – although most had already left.

At the request of the Council on Higher Education, in October 2011 Higher Education and Training Minister Dr Blade Nzimande appointed an administrator, Professor Lourens van Staden, to run the university. Van Staden’s two-year mandate was to fix administration and financial management systems at the university.

The university – named after anti-apartheid struggle icon Walter Sisulu – was among five institutions placed under administration. The others are Vaal University of Technology, Central University of Technology in the Free State, which challenged the decision in court, Tshwane University of Technology and the University of Zululand.

In a recent update to parliament the Department of Higher Education and Training, or DHET, said that while challenges still faced the institutions, progress had been made in stabilising some of them. Central University of Technology was singled out as the only institution still mired in problems.

In a statement last week, the DHET said that “substantial progress” had been made at WSU since the administrator had been appointed. Van Staden reported two months ago that financial stability had been achieved in the short term with all creditors paid, staff salaries secured, backlogs cleared and a break-even budget tabled for 2013.

He had, within the first year, managed to clear the bank overdraft of the university and reduce student debt from R271 million (US$26 million) to R40 million.

However, the DHET statement said, WSU’s “financial situation remains precarious. The university remains technically and commercially bankrupt, and will require discipline and determined leadership to ensure that over the long term [it] becomes financially sustainable.”

Labour dispute

Walter Sisulu staff members, led by the National Education, Health and Allied Workers Union, are demanding increments ranging between 8% and 10% from an institution barely out of bankruptcy.

The 2013 WSU break-even budget provides for 4.25% salary hike. The DHET said that any amount above this would result in cash flow problems and significant budget deficits. In any case, WSU had higher paid employees than other universities in the Eastern Cape and in many others around the country.

It urged stakeholders to understand that financial instability would seriously compromise the academic enterprise. “This will not only bring into question the short-term survival of the institution, but will also jeopardise the jobs of workers, staff and the economy of this region, thereby threatening the quality of its offerings and its long-term financial viability.”

More than R858 million had been given by the DHET to the university to cover student debt, provision of teaching and learning technology, technical expertise, and a one-off inflation amount for bonuses in 2012. The amount was over and above the state subsidy allocation and research development, teaching development and clinical training grants.

The university has a bad history of financial management. In recommending that it be put under administration, independent assessor Daniel Ncayiyana pointed out that WSU had become ungovernable and the council had become ineffective and complicit in the financial crisis.

Ncayiyana’s report revealed that the university had been operating under a deficit for five years and that grants earmarked for infrastructure improvements had been diverted to pay salaries. He also noted that 80% of the university’s income went to salaries – this figure ranges between 55% and 62% at other South African institutions.

Students leave

Unable to guarantee security, Van Staden ordered all students to vacate the premises and accommodation and only to return after the situation has normalised.

But the ruling African National Congress’ Youth League was not amused. National spokesperson Bandile Masuku said: “This injurious calamity doesn't bode well for the future of students as the second trimester involves preparations for the year-end examinations.”

He said in a statement that WSU, like many historically disadvantaged universities, had been plunged into a permanent state of paralysis and crises, with most being run by administrators.

Masuku warned that even with two new universities planned, in Mpumalanga and Northern Cape provinces respectively, without the concurrent development and sustainability of historically disadvantaged universities, the impact of new universities would not be felt in the system.