Safety and Security SETA, Construction SETA and the Fibre Processing and Manufacturing SETA on 2011 Budget and Strategic Plans

Meeting report

Briefing by Safety and Security SETA
Mr Zongezile Baloyi, Chief Executive Officer: Safety and Security Sector Education Training Authority (SASSETA), gave the Committee a brief summary of the organisation's vision, mission and organogram. Out of the 87 SASSETA employees, 57 were female of which 50 were black, 2 were coloured, 2 were Indian, and 3 were white. Of the 30 men employed at SASSETA, 24 were black, 3 were coloured, 2 were Indian, and 1 was white.

In terms of achievements for 2010/11, SASSETA held stakeholder road shows that reached all nine provinces, they had positive media exposure, SASSETA staff participated in programmes hosted by SABC stations, SASSETA disbursed discretionary grants to the value of R132 385million, and disbursement of mandatory grants was higher than the previous financial year totalling R66 881million. SASSETA was re-certified for 2011-2016 and supported 59 Small Medium and Macro Enterprises (SMMEs). SASSETA received high achievement results at Adult Basic Education and Training (ABET) levels and supported 17 Extended Public Works Programme (EPWP) training providers with a 96% success rate. The entity supported 29 Non Government Organisations (NGOs) and monitored 505 training sites. SASSETA appointed a new service provider for Information Services (IT) with full integration of IT service for the SETA. The SETA Human Resources (HR) policy was reviewed and approved as a framework for implementation of HR strategy.

Some of the challenges included SASSETA's struggle to achieve provincial presence, the transfer of Standard Industrial Classification (SIC) codes from the Local Government SETA (LGSETA) to the SASSETA, dropout rates that remained a problem in the ABET programmes at lower levels, and the Private Security Industry Regulatory Authority (PSIRA)/SASSETA integration process. The board had approved the piloting of two provincial offices for 2011/12, workplace functional programmes were customised and emphasised to get learners into projects, and discussions with PSIRA were unfolding on the introduction of new Private Security Training Standards.

The presentation focused briefly on the strategic planning process. The first step included a five year strategic draft based on the National Skills Development Strategy (NSDS) III. The second step was to consult with stakeholders on the SSP. Thirdly; a revised strategic plan was aligned to the outcome of the Sector Skills Plan (SSP) process and final NSDS III. Lastly, conditional approval of the strategic plan was given pending the finalisation of the Minister’s Performance Agreement, SSP and Service Level Agreement (SLA).

The first goal set out in the NSDS III was to establish a credible institutional mechanism for skills planning. SASSETA responded to this by building its internal research capacity, developing a research strategy, developing a SSP, and attaining the maximum score in the assessment of the SSP. The second goal in the NSDS III was to increase access to occupationally-directed programmes. SASSETA's response was to obtain “middle level skills” through consultative workshops and research agencies, to establish partnerships with Further Education and Training (FET) colleges and universities, establishing partnerships with employers to provide workplace-based training, and enrolling 3000 unemployed learners for vocational programmes. Goal 3 of the NSDS III was to promote the growth of a public FET college system. SASSETA responded by building FET capacity, implementing skills development programmes and work opportunities for FETs, and piloting and implementing programmes in three FET colleges. The fourth goal was to address the low level of youth and adult language and numeracy skills to enable additional training. SASSETA participated in a Department of Higher Education and Training (DHET) led process to develop a national strategy to afford school leavers an opportunity to engage in training/work experience to improve employability. 1000 young people were placed in training and work experience projects. Goal 5 in the NSDS III was to encourage better use of workplace-based skills development. SASSETA planned on implementing quality programmes for workers, 2000 employed learners were enrolled in quality programmes, and projects were being implemented to address specific sector skills gaps. The sixth goal was to encourage and support cooperatives, small enterprises, worker initiated, NGO and community training initiatives. SASSETA responded to this goal by researching and identifying skills needed by small and emerging businesses, training and developing support for small businesses, training and developing support for trade unions, and supporting 10 NGOs and 5 Community Based Organisations (CBOs). The seventh goal was to increase public sector capacity for improved service delivery and support the building of a developmental state. SASSETA signed SLAs with five relevant government departments. The SSP outlined the capacity needs of relevant government departments. Goal 8 was to build careers and give vocational guidance. SASSETA distributed career guides to schools, trained Life Orientation (LO) teachers in the use of career guides, and career exhibitions were held in all provinces.

SASSETA’s financial report for 2010/11 indicated that the entity's total revenue amounted to R204 million, while total expenses amounted to R265 million. This left a net deficit of R60 million. The 2011/12 revenue budget amounted to R224 million, which included revenue from administration income, levy income, fire-arm income, interest, and accumulated surplus. The projected expenses budget also amounted to R224 million, which consisted of administration expenses, mandatory grant expenses, and discretionary grant expenses. SASSETA received an unqualified audit opinion over the NSDS II period. Risk management structures were also put in place.

Discussion
The Chairperson asked if the SASSETA has concluded its SLA with the DHET.

Mr Baloyi replied that the SLA had not been concluded. The Committee was aware that the SASSETA and DHET had met to discuss the contents that would be included in the SLA. They concluded the discussion with the understanding that the SLA would be a one-page document that will be attached to the Strategic Plan. This would be given to the SASSETA in the near future.

The Chairperson asked if the one-page SLA would include proper targets for the whole sector.

Mr Baloyi explained that the contents of the Strategic Plan would form the main document that spoke to SASSETA's targets, which included annual targets and five-year targets. The one-page SLA document would also define obligations that SASSETA had to fulfil, as well as its responsibilities. The SSP was also included as an addendum to the SLA.

The Chairperson said that he did not know how many Correctional Service Centres, police stations, and private security companies there were in the country, but the SASSETA seemed to be encouraging very little learnership with these entities. It also seemed that SASSETA's targets did not speak to the country's needs. He asked how many learners the police stations could take. How many lab technicians did the country have to deal with forensic evidence? SASSETA's presentation did not speak to which training programmes were needed. He sought more clarity on high level security training programmes. The Committee needed a more detailed plan of what the country needed. He was also concerned that the SLA consisted of one page. The Committee expected the SLA to be a more detailed document. He thought the army would be taking on more youth in terms of placement for artisan development and engineers etc. He asked where these learners were being placed.

Mr Baloyi replied that there was consensus between the Committee and SASSETA concerning the broad transformational changes that had to happen within the SASSETA. SASSETA would elaborate on these changes when they came back to Parliament.

Mr K Dikobo (AZAPO) warned that achievements could only be measured against targets. SASSETA did not include their targets in their presentation. The Committee had to be told what the targets were. He thought the bulk of funds would have to be mandatory funds, while the remainder of the funds was considered to be discretionary funds. However, in the case of the SASSETA, this seemed to be reversed. He asked for clarity on the matter. He further asked SASSETA to elaborate on what “artisan related programmes” were, as it seemed to be a bit vague. What was being done about the high dropout rate regarding ABET? How many LO teachers were SASSETA going to train?

Mr Baloyi replied that 50% of the SASSETA's budget was allocated to mandatory grants and 20% was allocated for discretionary grants. However, if a portion of the mandatory grant was not claimed by legislation or regulation, the amount is transferred to the discretionary grant and seen as additional funding.

He addressed challenges concerning learner dropouts. He said it varied from one department to another. There were problems concerning transport. Proper learner support was needed. There were also language problems where programmes were taught in languages that learners did not understand.

Dr J Kloppers-Lourens (DA) asked why ABET seemed to fail and what the failure rate was. She asked if the SASSETA worked in tandem with the DHET and Department of Basic Education (DBE) on career guidance initiatives. She wanted to know what internal research capacity entailed. What was the definition of a quality programme?

Mr Baloyi explained that it was difficult to retain researchers within the sector. This was why SASSETA decided to build its own internal research capacity. The government had to look at conditions within which researchers were employed. When researchers came to the SETAs they realised that they were conducting pure labour market economics research when they actually wanted to produce research articles. SASSETA decided that they also had to work with universities, specifically post graduate students that could be employed within the SETA.

Mr A van der Westhuizen (DA) said that he had looked at SASSETA's previous Annual Reports. In 2008/09, SASSETA under-spent on their budget by approximately R35 million, and in 2009/10 they overspent on their budget by approximately R35 million. This was an enormous difference, which made him wonder if SASSETA was managed well. He understood why the Minister wanted to do away with, or reduce, the number of “silly” skills courses that were offered because they could not measure their success and their impact on the country. In 2009/10, SASSETA's target for learnerships for employed persons was 1500. So far, SASSETA has only taken on 162 learnerships. For unemployed persons, the target was 1650 and only 25% of this was achieved. The country had a fast-growing safety and security sector, with vast unemployment numbers. SASSETA had the money to achieve these goals but has not done much. SASSETA serviced a sector with three-quarters of a million employees and only 400 people have achieved ABET qualifications with SASSETA. Something was seriously wrong. The CEO was earning about two-thirds of what a vice chancellor of a university earned and this person managed a staff complement of at least thirty times what the CEO of SASSETA managed. He did not know how SASSETA could be proud of the achievements they presented to the Committee. The attendance of board members at board meetings was shocking. The chairperson of the board only attended half of the board meetings. He questioned the SASSETA's governance and wanted the DHET to take note of this concern. He hoped to see the SASSETA with better targets, governance and financial management in the future. He was not impressed with the contents of the presentation.

Ms W Nelson (ANC) said that the Committee wanted to see how many learners participated in the SASSETA's programmes, and how many received qualifications.  She asked if the SASSETA tracked these students. She asked what SASSETA’s role was in workplace experience. She asked why learners were being put through short courses that were not accredited. Non-accredited short courses were a waste of money and should not be allowed at all.

Mr C Moni (ANC) asked SASSETA to elaborate on the cooperatives it was going to be supporting as part of the sixth goal in the NSDS III.

Mr S Makhubele (ANC) stated that the presentation did not actually give him a picture of what the SASSETA was actually doing and whether it was making any impact on the country. He asked what the cost implications were of learners dropping out of programmes offered by entities in the country.  He noted that the SASSETA's organogram did not talk to how many persons with disabilities were employed.

Mr Baloyi replied that SASSETA employed one disabled person, and that it knew that it could do better.

Mr A Mpontshane (IFP) stated that it was perhaps because SASSETA had not set up its resource unit that tit did not have a profile on the security sector. It was imperative that it set up the research unit as soon as possible. He thought there would be reconciliation and synergy between the entity's goals and challenges. There was no connection between the two.

The Chairperson said that it was important to have a SETA forum so that all the SETAs could be called together. It also meant that SETAs that did not have enough resources could use and benefit from other SETAs resources. He noted that there was a booming security sector in the country and the rest of Africa. He thought the placement of learners within government departments and entities was very important. SASSETA had to facilitate the entry of learners into these entities. He wanted to urge all the SETAs to sit down together and discuss their issues. He asked the SASSETA to revise their Strategic Plan so that it spoke to the entity's targets. SASSETA should email the revised Strategic Plan to the Committee. The Committee would meet to discuss the Strategic Plan and they would give SASSETA feedback on the revised version. If the Committee is happy with the Strategic Plan, they will approve it.

Dr Kloppers-Lourens added that the presentation was compiled in a very sloppy manner. There was no table of contents and the pages were not numbered.

Mr Dikobo commented that it was important that the DHET responded to the question concerning the SLAs, as it seemed that many SETAs had not signed SLAs.

Ms Nelson noted that SASSETA's organogram was very “heavy”, and wondered if it had to be “re-engineered” to focus more on provinces instead of being concentrated in Pretoria.

Mr Abbey Witbooi, Chairperson for SASSETA, replied that he appreciated the questions and comments from the Committee. He said that the issues raised in this meeting were also raised in the last meeting. The Committee also asked about the impact the SASSETA had on the country. He noted that short unaccredited courses were a problem in the country and that placement of learners was also an issue. This had to change, as people had to have meaningful qualifications. The way in which the entity allocated funds for mandatory and discretionary funds was also a problem. The SASSETA would focus on this issue. When the board came in as the new accounting authority there were some practices in terms of funding that had to be changed. The matter of discretionary grants had to be put on hold because the SLA had not been signed yet. SASSETA had to sign a SLA with the DHET in order to know what was expected from them so they could allocate funds accordingly. Also, many SETAs did not know how to formulate Strategic Plans. This was why a workshop was being conducted on 24 June 2011 to help SETAs with their strategic planning processes. SETAs also had to be capacitated so that they could compile comprehensive SSPs. Since the board has come in as the new accounting authority, they have set up the necessary structures that were in line with the Constitution. SASSETA was committed to making changes. He said that the Committee's concerns were correct and that targets had to be included in their presentation. SASSETA noted this concern and promised to produce a more comprehensive document in the future.

The Chairperson asked the DHET to respond to the question raised by Mr Dikobo concerning why SLAs had not been signed by SETAs.

Ms Percy Moleke, Deputy Director-General: Skills Development (DHET) explained that the situation with the SETAs was more challenging than the DHET had anticipated, as it was process related. Her understanding was that the SETAs had signed the SLAs with the DHET in September 2010. This was for the current financial year. The previous SLA used to be a thick document that had the objectives and targets, and so on. Now, the SLA consisted of one page that said the SETA was entering into an agreement with the DHET and they had to meet and implement the targets contained in their Strategic Plans since they were public entities. The idea was to have the SSPs, and strategic plans as attachments to the SLAs. SETAs would not be allowed to sign another SLA as they have already signed one for the current financial year.

The Chairperson asked what would happen if the Committee disagreed with most of the SETAs targets and they have already signed the SLA with the DHET. More oversight was needed over the SETAs work. SETAs targets had to be very clear and tangible.

Mr Dikobo added that it was his understanding that SETAs did not draw up their own targets; they were given targets.

The Chairperson commented that Mr Dikobo might be correct, but SETAs should not pass the responsibility to the DHET. They had to tell the Committee if they were unable to achieve their targets. He noted that the Committee would not be able to complete its discussion with SASSETA. SASSETA had to revise its presentation to include targets and statistics of the skills needed in the sector. The Committee also wanted more information on how many learners have benefited from work placement initiatives, and where they were placed.

Briefing by the Construction SETA
Mr Themba Mhambi, Construction SETA (CETA) Administrator, opened the briefing by admitting to the Committee that the CETA's performance had been very poor and this was why the Minister for Higher Education and Training had put the entity under administration. He wanted to talk to initiatives taken that would address the CETA's challenges. 

An Extended NSDS II Performance Report for 1 April 2010 – 31 March 2011 emphasised the challenges that CETA faced and explained why, in six years, they could not achieve their targets. If the Committee looked at CETA's performance in relation to the number of Skills Development Facilitators (SDFs) they were supposed to train, the Committee would see that CETA missed its target by 27. There were supposed to 500 SDFs, but CETA only managed to produce 473. When it came to the disbursement of mandatory grants to large companies, CETA only managed to achieve 213 allocations instead of 274. This had implications for the training of people within their workplaces. It meant that 61 large companies may not have conducted training in the way they should have because they did not have the funding. CETA performed very badly with ABET. In terms of ABET 1, CETA achieved 505 learners that were trained from a target of 2500. CETAs target for ABET 2 was 1500; however, only 385 learners were trained. ABET 3 had a target of 1300, but CETA only managed to train 608 learners. For ABET 4, CETA trained 472 learners from a target of 1500. This could be due to a planning weakness on the CETA's side.

Out of a target of 2000 learnerships for employed persons for 2010/11, CETA only managed to achieve 387. There were similar results for apprenticeships and trade testing for employed persons. No bursaries were given to employed persons and 100 internships were given out from a target of 300. Only 1146 learners were enrolled for the skills programme for employed persons when the target was 3000. In terms of unemployed persons, there was a deficit of 782 learnerships, a deficit of 1816 apprenticeships, a deficit of 398 trade testings, a deficit of 57 bursaries, and a deficit of 160 learners that should have been placed in the Workplace Experience Programme.

Mr Mhambi stated that there were more than 300 projects running within the CETA. He informed the Committee that the money was there but it had not gone where it should have.  This was why the internal auditors had been asked to do an in depth analysis on 25 projects within the CETA. The CETA was told that there were fraudulent activities taking place in 20 of the 25 audited projects. Of the 20 projects, the CETA may have been defrauded of R13.6 million. This meant that for 300 projects, the CETA could be defrauded up to R612 million. It was a situation that caused major consternation within the CETA and had to be addressed aggressively.

One of the key factors for the CETA's poor performance included poor corporate governance. The previous board members had employed people without conducting interviews and had granted employees whatever salary the board member wanted. When CETA was handed over to the Minister for Higher Education and Training he tried to put the CETA under administration, but the board took him to court. It was only when the board's term came to an end that the Minister was able to put the CETA under administration. It was discovered that projects were facilitated for reasons other than whether it was in the interest of the CETA. This was also when the Minister said that the CETA was not allowed to make any further financial commitments to projects. However, in January, up to R44 million was still being handed out to so-called “Construction Centres of Excellence”, some of which were linked to certain members of the board. Other factors contributing to the CETA's poor performance included a lack of impact analysis, the inability to implement approved projects, poor partnerships for the delivery of the SLA, and the non-alignment of projects to broader government imperatives.

Mr Menzi Fakude, Chief Financial Officer: CETA, stated that the CETA failed to meet its NSDS II targets; however, the CETA continued to accumulate financial reserves. Most of these funds were already committed to projects. The CETA's levy income was characterised by the stable performance of the construction sector. Levies increased by 4% to R338 million from R323 million in 2009/10. Levies were also 3% higher than what was budgeted for. The CETA\s expenditure was characterised by its poor implementation of approved projects. Project expenditure increased by 2%. It was now R104 million from R102 million in 2009/10, and it was significantly lower than the budget of R370 million. There seemed to be a low employer participation rate in mandatory grants, which increased to R134 million from R125 million in 2009/10. There was unexpected pressure on the administration budget, which increased by 12% from the previous year. This expenditure was R6.5 million above the budget. The financial performance resulted in a surplus of R86 million. CETA's financial reserves increased by 20% to R522 million. Cash increased by 28% to R603 million.

Mr Mhambi informed the Committee that when the administration team arrived at the CETA, many of the objectives in the Strategic Plan did not apply to the CETA or the country as they did not align with goals set out in the NSDS III. The team called the DHET and withdrew the Strategic Plan. This was why the CETA had submitted a Strategic Planning Framework to the Committee instead of a Strategic Plan. The Strategic Plan would be submitted as soon as it was finalised.

In response to the first goal in the NSDS III, CETA aimed to plan reliably and accurately so as to provide relevant education and training for employment, entrepreneurship and economic development. In response to Goal 2, CETA aimed to plan accurately through research that focused on middle level skills needs. The third objective that responded to Goal 3 in the NSDS III was to build greater, project-based partnerships with FET colleges. In response to the fourth Goal, CETA wanted to ensure that more young people were capacitated to undertake higher level training in construction. In response to the fifth goal in the NSDS III, the CETA aimed to encourage better use of workplace-based skills development. CETA wanted to encourage and support small enterprises, cooperatives and worker-initiated training initiatives in response to Goal 6 in the NSDS III. It aimed to increase public sector capacity for improved service delivery and support the building of the developmental state in recognition of Goal 7. In response to Goal 8 of the NSDS III, CETA wanted to engage in initiatives that would ensure the greater uptake of training in construction by young people.

Discussion
Mr Dikobo noted that the Committee had received very valuable information; however, there was no documentation to back the information up.

The Chairperson replied that if the Committee required additional information, they would ask the CETA for it.

Mr Dikobo addressed the CETA's non-achievement of targets by saying the Minister took the correct decision to place the CETA under administration. One could see a definite relationship between the non-achievement of targets and under-spending of funds. He asked what it meant to say that a SETA was “under administration”. He noted that there was no place for the “Basic” part of ABET. It should only be referred to as Adult Education and Training (AET), as there was no demand for level one basic training. ABET did not attract people. This could be the reason why it was not filtering down into organisations and institutions. He wanted to know if any of the managers had been let go, as they were the ones that had to be held responsible for the CETA's downfall.

Mr Mhambi explained that when an entity was under administration it meant that the entity's board was dissolved. Failure of the corporate governance was a failure to uphold the Constitution. The board members were collectively responsible for what happened within the CETA. However, the administration teams' powers were limited and they did not have access to information such as bank records that would incriminate certain employees. The administration team needed the help of the Special Investigating Unit (SIU). He said they had reason to question some of the decisions made by the former acting CEO, particularly in relation to certain commitments that were made. The CEO was asked to take special leave until the investigation was concluded. The Human Resources (HR) manager was also asked to leave before his contract was finished because there were a number of HR related matters that could not be explained. The same applied to the IT manager. The Senior Communications Officer was also asked to leave, as there were eight instances where procurement processes had not been followed. This was being investigated.

Mr van der Westhuizen said that the CETA's situation was one of the worst stories he has heard at Parliament. He did not like the idea that the CETA's Strategic Plan was withdrawn from the DHET, as it was a very “neat” plan. It was good and well that the CETA was placed under administration and that a moratorium was placed on the entity's funds. However, it meant that certain contracts with service providers were not being honoured on the CETA's side. There were certain service providers that were struggling because they had not gotten paid for services rendered for the CETA. He stated that this was the time to train artisans and to up-skill people in the construction sector. He urged the administration team to get the CETA's money flowing once again, and to honour its learnership agreements. He wanted assurance that the administration team would be able to get the CETA back on track regarding training initiatives. He asked if people implicated in the fraudulent activities were being charged.

Mr Mhambi replied that the administration team had met with the service providers and had tackled the issues they had with the CETA aggressively. The matter was being resolved.

He said that within two weeks of taking over the CETA, the administration team had to freeze the entity's funds and money was still being leaked from it. This led to a full moratorium. The administration team met with the relevant stakeholders on 12 May 2011 and agreed that all projects with proper SLAs would move forward. It has been a difficult process to deal with the CETA's backlogs in terms of invoices, but this was being addressed. He was confident that the backlog would be resolved by the end of June 2011. All the SLAs that were not signed by service providers would be revised and aligned with the goals of the NSDS III. 

Mr Mhambi answered that the administration team along with the DHET had experience in putting entities back on track. For example, the Public Service SETA was now fully on track and many lessons had been learnt while getting the entity up and running.

Ms Nelson asked whether the CETA's second tier management was functioning or not, given the CETA's situation. She asked if the Administrator had called for a forensic audit of the CETA.

Mr Mhambi replied that the CETA's new organogram would speak to the challenges experienced by the entity. The organogram also spoke to the nine provincial offices that were now being services. He assured the Committee that the CETA's second tier management was in place. Most of the regional managers were still in place.

Mr Mhambi answered that the administration team came up with a strategy to audit all 300 projects. Usually, only 10% of projects were audited because entities were so large. So, in order for all 300 projects to be audited, the administration team wanted to invite forensic audit companies to come in and audit projects “at their own risk”. This meant that they would receive a percentage of all monies that they recovered in lieu of fees they would have charged beforehand. Also, if a project was found to have fraudulent activities, then the project would be stopped and the auditor would receive a percentage of the money that was saved from closing the project before the end of its projected lifespan. The Committee had to keep in mind that public entities did not budget for forensic audits every year. 

Mr Moni noted that the CETA's presentation did not speak to what the entity was going to do to meet its targets. He thought it was important that a forensic audit should be called. He was sure that the Committee would want a forensic audit on all 300 projects that the CETA was in charge of. Corruption had to come to an end. The government was relying on CETA to create at least 250 000 jobs. He had a feeling that corruption was taking place in other SETAs as well. He suggested that the Committee should start engaging with the Auditor-General (AG) to investigate the SETAs in general.

Mr Mhambi responded that the targets had not been achieved for the NSDS II period.  Some of the targets were still relevant but many of the targets were being restructured to align with new NSDS III goals. Many of the CETA's programmes were also being restructured to align with NSDS III.

The Chairperson concluded the discussion by saying that it was important that the CETA's presentation showed how its money spoke to its projects. He thanked the CETA for their presentation.

Briefing by the Fibre Processing and Manufacturing SETA
Mr P Naicker, Acting Chief Operations Officer: Fibre Processing and Manufacturing SETA (FPM SETA), and the rest of the FPM SETA delegation briefed the Committee on their Strategic Plan for 2011-2016. Mr Naicker informed the Committee that the FPM SETA’s mandate was to ensure that the FPM workforce was up-skilled and that the sector was sustainable and remained competitive. He gave a brief overview of the entity’s background. The Minister of HET announced the SETA landscape for 200-2016 in November 2010. This saw the formation of one new authority – the FPM SETA, which was formed through the amalgamation of the Clothing, Textiles, Footwear and Leather SETA (CTFL SETA), the Forest Industries SETA (FIETA), and the printing, packaging and publishing sub-sectors of the Media Advertising Publishing Printing and Packaging SETA (MAPPP SETA). The government took the decision to cluster sectors to strengthen value-chain linkages.

The staff establishment for the FPM SETA was aligned with the skills development mandate priorities of NSDS III. The entity has approximately 56 staff members. In order to ensure productivity, the FPM SETA HR management function has implemented the following measures:
They have drawn up detailed job profiles, including key performance areas and performance measurement criteria
They implemented the performance management of all staff related to their key performance areas, indicators and targets

The FPM SETA’s functions were to promote job creation, economic growth and decent work, to coordinate the development of the overall training and education strategy, to develop and implement the integrated SSP, to promote learnerships, to liaise with the National Skills Authority (NSA), promote training in SMMEs, to conclude its SLA with the DHET, and to submit budgets, reports and financial statements to the DHET as per the Public Finance Management Act (PFMA).

The FPM SETA’s Strategic Plan Framework (SPF) was informed by the key strategic policies of government such as the Medium Term Strategic Framework (MTEF), the NSDS III, the National Industrial Policy Framework (NIPF), the Industrial Policy Action Plan (IPAP) and the Rural Development and Poverty Alleviation Strategy. The FPM SETA had a strong focus on quality education, skills development, rural development, sustainable human settlements and sustainable use of natural resources.

Mr Simangaliso Mkwanazi, Acting CEO: FPM SETA, briefed the Committee on the forestry sector. He said that the majority of employers in the sector were located in KZN and Gauteng. The majority of the employers were within forestry sub-sectors such as wood products, furniture, and pulp and paper. 72% of the forestry workforce was male, 66.1% of the total employees were black, and majority of workers were aged between 25-54 years. 64% of the employees have the General Education and Training Certificate (GETC) and below, 27% have completed FET qualifications, and 7% of the sector resides in the HET band. The majority of the workforce was craft and related trade workers, elementary workers, and plant and machinery operators and assemblers. There was a high demand for pest controllers, truck drivers, agricultural mobile plant operators, fire fighters, entomologists, forest scientists, upholsterers, cabinet makers, industrial spray painters, paper products machine operators, research and development managers, and wood and manufacturing trade workers.

Mr Naicker briefed the Committee on the CTFL Sector. He said the sector employees approximately 150 000 people and the majority of the workers were women. The sector was an important source of employment creation for semi-skilled and unskilled workers. Majority of the workers employed were between the ages of twenty and fifty. 30.8% of the sector resides in the GETC band; however, a majority of the workers were in the FET band. The sector produced an annual turnover of approximately R35 billion and accounts for 11% of total manufacturing employment. The government identified the CTFL as a key sector for economic growth and job creation. However, the sector is under huge pressure from Asian imports, weak domestic demand, aging machinery and technology, and low levels of productivity. The sector allowed for the ability to create jobs in geographically under-developed areas. It demanded high levels of low-skilled and semi skilled workers. CTFL sub-sectors are key fighters against unemployment, poverty, rural marginalisation, and gender inequality.

The Printing, Packaging and Publishing (PPP) sector employed approximately 49 399 workers in formal employment. A further 22 000 workers were employed on contract, freelance or temporary basis. Critical skills identified for the sector were management and supervisory skills as well as high level specialist and conceptual skills. The sector was not supported by definite industrial strategies. This should become less significant as the new FPM sector improved value-chain linkages and placed sub-sectors under the influence of other related industrial strategies.

The NSDS III formed the basis of the SPF. It required sector skills strategies to contribute to achievement of the country’s new economic growth path and social development goals encapsulated in the Medium Term Strategic Framework (MTSF). The FPM SETA has established indicators, targets and key activities per output that were measurable and contributed to the President’s outcome, which said that a skilled and capable workforce was needed to support an inclusive growth path. The outputs included:
establishing a credible institutional mechanism for skills planning and establishing partnerships with key delivery forum partners
increasing access to programmes leading to intermediate and high level learning calls on SETAs to make a difference in the lives of learners
increasing access to occupationally-directed programmes in needed area, thereby expanding the availability of intermediate level skills
increase access to high level occupationally directed programmes
research, development and innovation in human capital for a growing knowledge economy

The strategy for the clothing and textiles sub-sector was based on investment and technology, upgrading the skills base, improving innovation and design, improving competitiveness, improving weak value chains, and addressing trade distortions and illegal imports. The footwear and leather strategy called for domestic firms to increase their competitiveness by investing in new technology and capital equipment, decreasing cost and investing in marketing, design and product innovation. The IPAP2 identified key action programmes for the forestry, furniture, pulp and paper, and wood products sub-sectors. These included fast tracking the issuing of water licences, implementing the Forestry Sector Transformation Charter and Climate Change, supporting SMMEs, and establishing furniture clusters in KZN, Western Cape and Gauteng. Critical areas of focus for the PPP sector included the need for product process or technology specific training, poor levels of general education, the loss of important sector knowledge base with retirements, and the impact of HIV/AIDS on the sector. The FPM SETA also focused on Youth Development Skills, the Rural Growth and Development Strategy (RGDS), the Provincial Growth and Development Strategy (PGDS), the Technology and Innovation Strategy (TIS) and the Integrated Growth and Development Plan (IGDP).

The main source of revenue for the FPM SETA were from the skills development levies, skills development interest and penalties on late levy payments, interest on investments and donor funding from partnerships and collaboration projects. 40% of the levy income was allocated to mandatory funds, 20% was allocated towards the discretionary grant, and 10% was given to the administration budget.

Ms Gina Layzell, Acting Chief Financial Officer: FPM SETA, gave the Committee a brief overview of the FPM SETA’s three-year budget. She reminded the Committee that she looked at the financial forecasts for the three SETAs, combined their budgets and made the appropriate changes. In terms of the income available for discretionary grants and special projects, the total for 2011/12 was R248 395 286. Three different audits were going to be conducted on the three SETAs over the next six months. This was going to impact on the administration expenses. The total income for 2011/12 was reduced to R99 120 686 after reductions from administration expenses and mandatory grant expenses. Administration expenses amounted to 11% of the total levy income for 2011/12. The total levy income for 2012/12 was projected at R255 337 095, and the total levy income for 2013/14 was projected to be R262 934 092. Administration expenses were going to be 9% of the total levy income for 2012/13 as well as 2013/14.   

Discussion
Mr van der Westhuizen asked what the extent what to which training was affected due to the integration of the three SETAs. For how long would the disruption continue given the integration of the three SETAs?

Mr Simangaliso Mkwanazi, the Acting Chief Executive Officer: FPM SETA, replied that the integrated SSP's of the three SETAs were combined and compressed into one SSP.  A workshop with all the relevant stakeholders concerning the Strategic Plan was already completed.

Ms Nelson acknowledged that the FPM SETA was faced with a massive re-engineering. She had the feeling that the chairperson of the SETA had the correct vision and he knew what the Committee wanted from the FPM SETA.

The Chairperson was impressed with the FPM SETA's presentation, and joked that they had been listening to what he told the other SETAs about their presentations and strategic plans. He thought it would be a good idea to communicate with the AG's Office, as they could help the FPM SETA to respond to the AG's auditing needs.

Mr van der Westhuizen noted that there were South African students studying engineering in the Czech Republic. When the first batch of students returned to South Africa, they could not find employment. The second batch was returning to the country soon. What was the FPM SETA going to do in terms of seeking employment for them?

Mr Naicker replied that there were many project plans in place to deal with the matter. It was important to note that the students were not bound by this specific sector, but the FPM SETA was doing everything in its power to find them employment. When the first batch of students returned to South Africa, they were offered employment that paid R10 000 a month and below. However, the students were unhappy with the wage rate.  But, the sector was bigger now and the students would be offered more opportunities. The matter would also be addressed through work experience programmes. The FPM SETA wanted to help the students seek long term employment in companies through placement projects.

Ms Nelson thought that it was important that the Committee engage further on this matter in the future when the Committee had more time.

The Chairperson asked the FPM SETA to work their targets into their presentation and to email it to the Committee. Members would then comment on the revised document. They would contact the FPM SETA if Members felt that the entity needed to come before the Committee again. He also asked them for the contact details of the engineering students that took part in the training programme in the Czech Republic.

The meeting was adjourned.