Walter Sisulu University bankrupt, no money to pay staff

The embattled Walter Sisulu University (WSU) remains technically and commercially bankrupt, higher education director general Gwebs Qonde said.

Briefing journalists on the labour problems at the university that have led to the shutdown of the institution, Qonde said negotiations had resumed with university staff.

Staff are demanding an eight to 10 percent salary hike.

Qonde said that for the university to break even it could only afford to pay staff, including lecturers, a 4.25 percent salary increase.

An assessor, appointed in June 2011, had found that the university was bankrupt and battled to meet payroll commitments.

"In addition, the institution had been operating on a council-approved deficit for about five years and illegally used earmarked grants provided for infrastructure improvement to pay salaries."

A criminal investigation into these matters was underway, though Qonde could not provide details.

After the appointment of an administrator in October 2011, substantial progress had been made to put systems in place to ensure the long-term viability of the university.

"By June 2013, the administrator reported 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," Qonde said.

"The administrator, within the first year, has managed to clear the bank overdraft of the university, improve and implement internal control systems, and reduce student debt from R271 million to R40m."

A turnaround plan was submitted to the department to fix the governance, human resources, and infrastructure failures.

The plan revealed how the WSU paid its staff more than most other universities in the country.

"The national payroll norm for universities is currently between 55 percent and 62 percent [of operational income]," Qonde said.

The WSU paid its staff 75 percent of its operational income, which included money from student fees, grants, and donations.

The department had had to pump R858m into the university to keep it up and running.

The breakdown of money given to the university was as follows:

• R310m to address historic student debt;
• R64.2m for teaching and learning technology;
• R14.4m for technical expertise;
• R48m to fund the bonuses of personnel in 2012; and
• R421m for infrastructure.

"It should be noted that the 2013 break-even budget takes into account the 4.24 percent salary increase offered and any amount above this will result in cash flow problems and significant budget deficits going forward."

Qonde said he had met the parties concerned in early August, but was unable to reach a settlement.

"The unions do not appear to grasp the gravity of their demands and the potentially disastrous consequences of their continued action."

Qonde defended the administrator's decision to shut down all WSU campuses and send students home.

"The risk to safety of students and prolonged nature of the strike has resulted in the university taking the decision to vacate the residences and send students home for a short term," he said.

The decision has already led to protests by students who clashed with police on Wednesday.

At least a dozen students were injured during the scuffles.