Mining Qualifications Authority (MQA); Information Systems, Electronics and Telecommunication Technologies (ISETT) SETAs 2009/10 Annual Reports

Higher Education, Science and Innovation

09 November 2010
Chairperson: Ms M Kubayi (ANC)
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Meeting Summary

The Mining Qualifications Authority (MQA) levy income increased due to salary increases while investment income decreased due to monthly instead of quarterly payouts of the mandatory grants. The amount spent on discretionary funds and projects increased. There was a surplus of R225 million, which would be used to cover future commitments. The MQA received a clean bill of health form the Auditor-General. R22 million was saved on administration. The Gold mining and Platinum Group Metals (PGM) mining employed about 64% of mining employees with over 550 000 employees within the mining industry. The highest employee ranges were in the North West with 35%. Six new learnerships were developed and registered and 31 new skills programmes were developed and approved. MQA was aware that rural involvement needed continual improvement and tried to ensure this. Learning programmes targeted at employed learners showed that 2 890 entered learnerships and 1 419 completed while 9 522 learners entered skills programmes. Learning programmes aimed at unemployed learners showed 2 303 entered and 1 044 completed. The MQA was aware of the low literacy levels within the mining sector and continue to give more attention to this area, thus Adult Basic Education and Training became increasingly important. 661 learners were placed with 20 mining companies to gain work experience and 113 learners were placed on internships in various mining related disciplines. The Training Voucher Project targeted the retrenched and unemployed in mining communities and trained 2 000 learners in basic welding and fitting skills. 166 learners trained in four provinces on new venture creation with 151 new ventures in operation 12 months after completion of the programme. The MQA received a 4.5 out of 5 on the scorecard of the Department of Higher Education and Training. Challenges identified within the mining sector included transformational challenges, accidents in mines, and the new SETA landscape had presented insecurities and the staff turnover resulted in the loss of key staff.

The Committee requested that the emphasis of matters in the Auditor-General’s report to be explained in detail, with specific focus placed on the misstatements of corresponding figures as well as what the MQA had done to bring a fraudulent creditor to book. The MQA was asked to explain the 25% increase in staff expenditure and was asked if the 66% African employees included management positions. The danger of working in mines and occupational safety was raised as well as the health hazard mines presented to surrounding communities. The Committee asked that the provincial representivity be explained in terms of the geographical spread of employees, learnership imbalances and rural development. A question was raised about the use of
Funagalo as a language and what was done to improve the literacy levels of mining employees. The Committee wanted to know about progress with certification delays and what the remuneration of the Chief Executive Officer was. MQA was also asked to give its comments on the new landscape of the Sector Education and Training Authorities. The Committee stated that it would further engage with the MQA on its strategic plan and on Recognition of Prior Learning - an issue intensively followed by the Committee.

ISETT SETA reported providing learning and employment opportunities to 1 452 unemployed learners and 3 501 Skills Development Facilitators trained. The level of participation by companies increased.14 Black Economic Empowerment firms participated in skills development while 2 065 Adult Basic Education and Training (ABET) learners completed their training, in computing skills. 1 935 employees entered learning programmes and 1 848 completed them. Eight Further Education and Training colleges participated in the skills development programme with 1 452 unemployed learners entering the learning programmes and 1 368 completed them. A total of 515 learners gained workplace experience with 250 being employed on a fulltime basis. 145 learners started new businesses and 74 were found to still be in business after one year. ISETT SETA encouraged illegal training providers to come forward in order for them to be assisted in the process of accreditation. Its total income increased by 11%. Total expenses were made up of employer grant and project expenses and administration expenses which was within the 10% legislative limit. ISETT SETA received an unqualified audit opinion although the Auditor-General emphasized two matters, significant uncertainties over two court cases and the restatement of corresponding figures.

The Committee raised the issue of representation of women on the staff and asked what assistance was given to training providers in the long term to grow and become cost effective. The MQA was asked to explain the delays in the disciplinary action and the struggle in the retrieval of R1 million with the previous Chief Financial Officer. The Committee raised the issue of provincial representivity. Concern was shown for the lack of assistance given to disabled learners and an explanation was requested on the litigation in the emphasis of matter by the Auditor-General. The Committee asked what support was given to the new venture creations and inquired about the remuneration of board members. The ISETT SETA was asked what it did to ensure transformation within its sector. The Chairperson showed concern about the restatement of corresponding figures as it was becoming a trend across the SETAs.

Meeting report

Mining Qualifications Authority (MQA): 2009/10 Annual Report
Mr Yunus Omar, acting MQA Chief Executive Officer, said MQA supported transformation within the sector through skills development as the mining sector remained quite white male dominated. It also supported the re-skilling of the employed as well as unemployed learners for sustainable employment and to ensure that those retrenched had portable skills. The MQA regarded good governance as fundamental to future sustainability and had a toll free fraud and corruption hotline. Despite the recession and shrinkages in jobs, and due to payroll increases in the mining industry, the levy income had increased. However investment income decreased because of few surpluses available. This was due to the mandatory grants being paid on a monthly instead of the previously quarterly basis. This was done in order to have funds more quickly available for skills development. The amount spent on discretionary funds and projects had significantly increased due to more activity taking place. There was a surplus of R225 million, which would be used to cover future commitments in the form of bursaries and learnership programmes, which were extended over two to three years.

The MQA received a clean bill of health form the Auditor-General for 2009/10 while financial management, risk management and internal controls were assessed positively by the Auditor-General. Skills development revenue increased by a moderate eight percent. Interest accumulated on bank accounts decreased by 24% because of timeous disbursement of funds. More people were submitting Workplace Skills Plans (WSP) and Annual Training Reports (ATR) resulting in 91% of mandatory grants levy income being claimed. 190% of discretionary grants were disbursed whereas only 20% levy contributions were received. R22 million was saved on administration that would be transferred into discretionary projects where learners would be funded. Gold and Platinum Group Metals (PGM) mining employed about 64% of mining employees, with coal mining at 13% and diamond mining at only two percent. Diamond Processing and Jewelry Manufacturing were just 1.5% and were seen as areas where the MQA would be looking to grow and spend more money.

There were over 550 000 employees within the mining industry. The highest employee ranges were in the North West with 35% and Gauteng with 19%, Mpumalanga and Limpopo were very close with 18% and 13% respectively. Employee rates were low in Western and Eastern Cape because of the very little mining there but jewelry played a big role in the Western Cape. The demand for labour, with the sub-sectors in mind, showed where MQA was in terms of change. Numbers employed by gold mining decreased, over 500 000 were employed by gold mines alone previously. The number employed by platinum increased and they were currently employing more than the gold producers. Coal, Diamond, PGM and other mining remained fairly static.

Ms Jay Moodley, acting MQA Chief Operating Officer, focused on MQA achievements in terms of its projects and discretionary functioning. On skills planning and research, 514 organisations submitted their WSPs and ATRs, with 497 approved and only 17 non approvals. MQA continued to support standards generation as a critical area within the mining sector ensuring identified qualifications and programmes required by the sector were available and registered at National Qualifications Framework (NQF). MQA embraced the concept of learnerships and ensured that those learnerships were developed and registered. Six new learnerships were developed and registered, 31 new skills programmes were developed and approved with 21 being reviewed and approved. MQA developed standardised learning packs in order to achieve quality provisioning acceptable to all training providers and 1 154 learning packs were approved. The MQA learning programmes and Adult Basic Education and Training (ABET) learners were situated in mines with the majority of mines situated in remote areas that were rural with surrounding townships. The provinces covered were based on the mining activity. MQA was aware that rural involvement needed continual improvement and tried to have continual improvement from year to year.
Learning programmes targeted at employed learners showed 1 935 entered learnerships with 1 848 completed and 1 452 learners entered skills programmes with 1 368 completed.

Focus was also placed on women, but at a slow pace with continual improvement. Many of the occupations in the mining sector were extremely high risk in terms of the safety component thus the MQA had various skills programmes registered at the sectoral level with a vast number of learners achieving skills programmes. Learning programmes aimed at unemployed learners showed 2 303 entered and 1 044 completed. The learnerships included the development of artisans. The MQA was aware of the low literacy levels within the mining sector and continue to focus and give more attention to this area to achieve better literacy levels. Thus ABET became increasingly important and the area identified for improvement was on ABET Level 4. Challenges experienced related to improvement of skills of ABET facilitators. On the higher end of occupational needs, various projects targeting the development of graduates and diplomas for specific occupations were launched. Projects were supported to ensure a good pipeline of learners coming through the Higher Education and Training (HET) system. MQA supported and trained lecturers at six universities. The bursary scheme continued to support learners with 668 learners funded to enter HET institutions. It was important for individuals to gain working experience thus 661 learners were placed with 20 mining companies to gain work experience. MQA also targeted graduates with internships with 113 learners placed on internships in various mining related disciplines.

The Training Voucher Project was initiated for the first time last year, targeting retrenched and unemployed learners in the mining communities and this trained 2 000 learners in basic welding and fitting skills as well as management skills. The MQA continued to support small scale mining by training and capacity building with 697 learners benefiting from technical mining training and business and management skills. The New Venture Creation project was continued in the last financial year in alignment with the National Skills Development Strategy (NSDS) II, with 166 learners trained in four provinces and 151 new ventures in operation 12 months after completion of the programme. The Maths and Science Pilot project was introduced in support of the Mining Charter to get a good pool of youngsters into HET, specifically mining and mineral qualifications, with 500 learners trained so far. On Grade 12 level, 80% passed mathematics and 61% passed physical science. The MQA continued to support and get involved with stakeholders in various types of activities with a large focus on career guidance opportunity to attract youngsters to the mining sector. MQA was committed to Recognition of Prior Learning (RPL) and a guideline and strategy document was developed with the focus on the engineering artisan area. This approach would be rolled out to other occupational areas. The MQA received a 4.5 out of 5 on the scorecard of the Department of Higher Education and Training - an area of concern for where improvement was needed: to increase the involvement of large, medium and small firms in the mandatory grant processes.

Mr Omar identified the challenges within the mining sector:
▪ Transformational challenges, developing a lot of previously disadvantaged individuals but one still found 88% of mining sector managerial positions held by males and MQA hoped to make a bigger impact there.
▪ Accidents in mines: occupational health and safety programme was embarked on this year to improve this.
▪ Income decreased resulting in reduction in allocating learners for learning programmes and a re-evaluation of some projects and prioritised programmes.
▪ Re-establishment of Sector Education and Training Authorities (SETAs) and proposed new landscape had presented insecurities in the sector. However, it was announced the day before that MQA would still exist for another five years. The staff turnover resulted in institutional memory loss as key staff were lost.

Discussion
The Chairperson stated that the MQA’s financials did not look healthy and asked that the emphasis of matters in the Auditor-General’s report be clarified and explained in detail. This included that the MQA had retained mandatory grant reserves of R1 598 000 (for payment of potentially liable mandatory grants) pending the submission of applications by newly registered employers.

Mr Mfundo Mdingi, acting Chief Financial Officer of MQA, replied that in terms of legislation the submission of WSPs and ATRs was due on 30 June each year but allowance was given to newly registered employers. They had an extended deadline until the end of March, thus submitting only at the end of the financial year. This was to give newly registered employers a chance to gain back their mandatory grants.

The Chairperson wanted clarity on the misstatements in the corresponding figures that were identified during the MQA’s audit of the financial statements of the current year for capitalization of cellphones and revenue adjustment for employers below threshold.

Mr Mdingi answered that the restatement of corresponding figures related to cellphones that were not originally in its asset register. In 2009/10 MQA capitalised all cellphones acquired in previous years thus the figures of the previous years had to be adjusted.

The Chairperson asked why were the cellphones not registered as assets from the beginning.

Mr Mdingi replied that cellphone contracts were taken out, thus the airtime was paid for and not the cellphones thus the MQA initially thought that the phones did not belong to it. After consultation with the Auditor-General and with his interpretation, the MQA realised that it needed to show the cellphones as assets in its books.

The Chairperson was still unclear on the issue and stated that the cellphone contracts were paid for by the organisation so how could MQA assume that the cellphones did not belong to it. Almost each SETA that the Committee interacted with, had a portion where they reflected an error in reporting, it could not be the same mistake across all SETAs. In all the SETAs, the Auditor-General raised errors of reporting. MQA was saying it was due to it assuming initially the cellphones did not belong to it with. MQA only paid for the airtime. A cellphone contract was where one paid for the whole package every month. He could not understand this.

Mr Omar replied that the MQA took out contracts usually with the asset belonging to the organisation and put on the books as an asset. However the nature of these contracts was that the contract expired after two years, thus the useful life of the asset was two years. The Auditor-General recommended that because the useful life was two years, MQA must recognise it as an asset. However complications existed as each contract was different with different amounts paid making it hard to determine the cost of the cellphones. MQA had to go back and estimate the cost of the phones, which were very immaterial, not big amounts. The only reason this was done was because the legislation determined that because the useful period was two years, MQA needed to recognize it as an asset.

The Chairperson stated that the MQA was not the only institution with cellphones. Parliament recognised the cellphones of Members of Parliament and accounted for them as assets. He asked why the employers threshold was not accounted for properly.

Mr Mdingi answered that according to the Skills Development Act regulations, employers below the threshold of R500 000 were not required to contribute levies to South African Revenue Service (SARS). Still some contributed and MQA found that they were not supposed to have contributed. The amount contributed by these companies was an estimate thus the MQA needed to track the amount that had been contributed but in the following year adjustments were made that also needed to be tracked thus the amount was incorrect as an estimation was involved.

The Chairperson found this explanation unsatisfactory as this would mean that all organisations dealing with the Auditor-General should have the same problem and should not have obtained clean audits as estimates were done. If these problems were picked up only by the Auditor-General, what were the internal audit committee doing and what was its role? The issue was then that somebody incompetent was doing the work, someone was doing what they were not supposed to be doing and this was not being picked up internally.

Mr David Msiza, Chairperson of the MQA Board, replied that the MQA acknowledged and accepted the issues of concern raised by the Auditor-General. The MQA tried to ensure that its audit committee continually engaged with the Auditor-General in a constructive manner. The Auditor-General discussed with the audit committee that programs had to be put in place to rectify these issues.

The Chairperson asked for an explanation where the MQA suffered an unrecovered loss of R83 669 in 2009/10 due to a fraudulent request for change of banking details which resulted in payment of a fraudulent creditor.

Mr A van der Westhuizen (DA) asked what role the MQA played in bringing the relevant person to book in regard to the loss through criminal activity.

Mr Darion Barclay, MQA Executive Manager: Corporate Services, answered that the material losses related to a change in bank details. In this case it was specifically the Public Investment Corporation (PIC), MQA’s landlord, that changed its banking details. The amount paid was R216 000. The changes in the banking details were submitted via fax, it was verified and had a stamp from Standard Bank, MQA contacted them and it was accepted. The same company was still registered as PIC and it was thus not immediately picked up even though the owner changed and the account details changed. MQA thought that Standard Bank would have control measures in place where there was a major transaction that it would be in a position to notify it but it did not happen. The control measure MQA put in place was that original documentation must be submitted and must go to the executive manager for approval. MQA had already recovered R133 000 but R83 000 was still outstanding. As soon as this was detected, MQA commissioned an internal investigation and found that all internal staff had followed procedures thus nobody was negligent within the MQA. MQA tabled a matter at the Commercial Crime Unit and the matter was directed to the Directorate of Public Prosecutions, who subsequently closed its file due to insufficient evidence. MQA contacted Standard Bank and asked for video footage of the transaction and appealed to the Directorate of Public Prosecutions who informed MQA the previous week that the case had been re-opened for further investigation in ordered to recover the R83 000.

Mr van der Westhuizen asked what the reasons were for staff expenditure increasing by 25% from one financial year to the following one.

Mr Barclay answered that in the previous financial year only one position was created which was a business assistant manager. At the budget review in October the previous financial year, MQA identified positions that needed to be created to strengthen the research capacity, information technology and areas relating to sector skills planning. The board approved the new positions but due to the 18% vacancies at the time, it had the condition that expenditure should be managed via savings under the salaries budget. Thus during the previous financial year no salary increases occurred. Hence the 25% increase in the last financial year to cater for the five positions created subsequently, funded through savings.

Ms F Mushwana (ANC) asked if the 66% Africans employed occupied management positions or merely ordinary positions.

Mr Barclay replied that the 66% included management levels and was only black as there was an additional 10% coloured and 10% Indian. The management levels included D-level management and E-level which was executive management.

Ms Mushwana asked if with the danger of working for mines and living in a mining environment, if safety precautions were taken and if the health hazard to communities surrounding mines were taken into consideration.

Mr Msiza replied that in terms of the Mining Health and Safety Act, no one could mine next to or under a community area without consultation with the Department of Mineral Resources. Complaints received would be investigated and where necessary steps would be taken against mines that did not follow the Act.Thus this was monitored and complaints were responded to.

Ms Mushwana referred to the geographical spread of employees and learnerships and saw imbalances. She asked if this imbalanced spread was due to where the mines were situated. She asked if rural development was taken seriously.

Mr Msiza replied that most people were employed within the North West, Mpumalanga, Gauteng and Limpopo where the mines were situated. MQA also supported other provinces in terms of employment and skills development.

The Chairperson asked about the influence and the usage of
Fanagalo as a language by the majority of workers in the mines. Also what was done to improve their literacy to be able to read, write and speak beyond the environment of mining?

Mr Msiza replied that
within time the use of Fanagalo as a language should be eradicated. MQA with the ABET programme assisted African employees to communicate in English and other relevant languages of the regions/province.

The Chairperson asked about bursary funding, if they encouraged women and previously disadvantaged people already in the mining industry to attain further qualifications, in order to reach the top level of employment.

Ms Mushwana asked, with regard to awareness programmes, if the MQA took into consideration occupation safety when working in mines and communities near mines in regard to dust and other health hazards.

Mr Msiza answered that this was within the mandate of the Department of Mineral Resources. There were the provisions of the Mining Health and Safety Act that provided for certain measures that had to be put into place. The main drive was to insist on measures to control the dust at the source.

Mr van der Westhuizen asked about the challenges identified with certification of students, and the delay of three months. What was done, were the issues resolved and was progress made?

Ms Moodley replied that the MQA was committed to learners receiving their certification in as short a time as possible. Unfortunately in the time under review, MQA had had a change of database which was at the source of the certification process. Unexpected challenges arose when the shift was made from one database to the next, which created the delay but many of these challenges had been resolved. Definite improvement had been seen but MQA continued to monitor and control the certification as a key deliverable. It had achieved a 90 to 95% certification, once it had been approved through the National Qualifications Framework (NQF) process, within a 14 day period for the last eight to ten months.

Mr van der Westhuizen asked what the total remuneration of the CEO was and why only acting CEO and if this related to the landscape issue and asked MQA’s comments on the new SETA landscape announced the day before.

Mr Omar replied that the remuneration of the CEO was stated in the Annual Report. The CEO received R605 000 per month including performance and service bonuses, a medical allowance and a pension contribution.

Mr Msiza answered that the previous CEO left because of an expired contract but MQA was in the process of obtaining the services of a new CEO and interviews had been held. The MQA embraced and supported the new landscape as indicated by the Minister. It submitted its
Sector Skills Plan (SSP) to the DHET for consideration and had a meeting where issues were raised and looked at. Thus MQA adopted and supported the new landscape.

The Chairperson concluded that the Committee would like to engage further with the MQA after its relicensing and to look at its Strategic Plan. It was impressive that the MQA reached most of its targets. On the issue of Recognition of Prior Learning the Committee had taken the resolution to follow this issue intensively and would look at it in detail at a later stage. They wanted to know what the challenges and issues were for Recognition of Prior Learning as many organisations pronounced they endorsed RPL but the actual implementation was lacking.

Information Systems, Electronics and Telecommunication Technologies (ISETT) Sector Education and Training Authority 2009/10 Annual Report
Mr Oupa Mopaki, ISETT SETA Chief Executive Officer, said the SETA had provided learning and employment opportunities to 1 452 unemployed learners. The staff complement showed that top management positions were mostly filled by male occupants. 3 501 Skills Development Facilitators were trained and 123 large, 194 medium and 1 429 small firms were aided in submitting a Workplace Skills Plan (WSP) and Annual Training Report (ATR). This showed that the level of participation by companies increased and ISETT SETA hoped that more learners had the opportunity to improve their skills initiated by the employer in the workplace. Companies that submitted their WSPs and were paid mandatory grants included 545 small, 194 medium and 123 large firms. 14 Black Economic Empowerment firms participated in skills development while 2 065 Adult Basic Education and Training (ABET) learners completed their training, in this instance ABET learning refers to computing skills. 1 935 employees entered learning programmes while 1 848 completed. ISETT SETA worked with eight public Further Education and Training (FET) institutions in a number of provinces in the process of skills development. 1 452 unemployed learners entered learning programmes: 1 433 were black, 853 were female, 88 were learners with disabilities and 1 368 completed the programme. ISETT SETA tried to be present in a number of provinces but the main Information Computing and Technology (ICT) companies were situated in Gauteng, Kwazulu Natal and Western Cape, making a balanced spread difficult. Requirements of the learnerships were part theoretical and part work experience training. Provinces with not enough ICT companies resulted in a slow uptake which was why Gauteng hosted most of the learners at 1 134. A total of 515 learners gained workplace experience with 250 being employed on a fulltime basis. All of these learners were black, with 255 female and most of the learners gained their experience in Gauteng, Limpopo and the Western Cape.

New venture creation training saw 145 learners started new businesses after the learners completed the learning process and were helped to set up a new business. ISETT SETA had to track the new ventures for a period of at least twelve months to ensure that the new ventures survived and 74 were found to still be in business after that period. A challenge identified in this area was to ensure that the learners stayed committed to the new venture as social pressure existed to seek formal employment with higher salaries than what the learners made with their ventures. ISETT SETA was inspired to work with Institutes of Sectoral or Occupational Excellence (ISOE) and recognised two new institutes while seven institutes were accredited to provide new venture creation qualifications.

ISETT SETA had a number of accredited training providers across all provinces and it was aware of a number of ICT trainers not coming forward to seek accreditation. These training providers had been identified through the work of the police force. ISETT SETA supported the police in its work but also encouraged training providers to come forward in order for them to be assisted in the process of accreditation.

Ms Janine du Plessis, ISETT SETA CFO, stated that total income increased by 11% despite the economic downturn with the main contributors being the skills development levy income and investment income (interest earned). Total expenses were made up of employer grants and project expenses and administration expenses which were within the 10% legislative limit. ISETT SETA had a net surplus of R69 million and acquired approval from the National Treasury to retain the unspent funds, which would be used to finance commitments to discretionary programmes in the future. ISETT SETA had a total asset base of R265 million, with cash and cash equivalents the largest portion amounting to R261 million. Liabilities were R35 000 which gave net assets of R230 million, a healthy financial state. ISETT SETA received an unqualified audit opinion although the Auditor-General had two matters of emphasis. The first related to significant uncertainties with two pending litigation cases against the ISETT SETA. The cases were still not resolved. The second related to the restatement of corresponding figures. This was due to many of the finance personnel present in 2008 leaving, with new finance personnel picking up errors relating to the 2008/9 financial year. These were purely accounting errors and ISETT SETA had to correct the previous year figures.

Discussion
Ms Mushwana asked if ISETT SETA was looking to change the representation of women on its staff complement as women were represented poorly.

Mr Mopaki replied that the gender issue was noted and it would attempt to put right the gender imbalances regarding its staff complement.

Mr van der Westhuizen stated that the skills deficit could only be relieved with good training providers and asked how ISETT SETA assisted the training providers with the flow of students and funds on a long term basis in order to grow and to become cost effective.

Mr Mopaki replied that with entry level and middle level skills, the Information and Communications Technology (ICT) sector did not experience shortages but ISETT SETA would work with the Department of Higher Education and Training to encourage young learners to study further than the first degree. After the first degree was completed, pressure existed to start work because of socio-economic problems. Thus learners had to be assisted to do post-graduate studies. ISETT SETA did not provide funding to the training providers but directly to employers with a list of accredited training providers. ISETT SETA used to work directly with training providers but problems were experienced regarding non-delivery. Thus no financial assistance was given to training providers.

Mr van der Westhuizen asked about the legal struggle with the previous Chief Financial Officer (CFO) to retrieve R1 million. Delays had been incurred in the finalisation of the disciplinary action; he asked for an explanation.

Mr Mopaki replied that the previous CFO had been suspended and as the process went on after the CCMA, ISETT SETA stopped paying the CFO, who went to court. The court ruled that as the CFO was going through litigation, he had to be paid thus ISETT SETA had to re-instate the salary. The amount of R1 million was paid while waiting for the matter to be resolved. As soon as the matter was finalized and ISETT SETA won the case, it tried to retrieve the money paid to the CFO.

Ms N Gina (ANC) asked if the targets that were set so low that ISETT SETA always achieved by big margins, affected the budget. She also raised the issue of provincial representivity of ICT and the number of learners.

Mr Mopaki replied that a system was started in agreement with most of the levy paying companies which emanated after a meeting with stakeholders. Companies approached ISETT SETA to train learners where they were funded by discretionary funding. As soon as the company submitted its workplace skills plan and annual report it also received its mandatory funds. The companies disclosed that the learnerships did not have an impact and this had to be resolved. This led to an agreement that the employers had to fund half of the training, resulting in a joint funding model. The joint funding model made budgeting difficult as it had to anticipate the employer wanted to take part in the joint funding model as it was unable to force employers to take part in the model. When an employer agreed to the joint funding model, more funds became available for training programs even though it was not in the budget, resulting in the targets being significantly exceeded.

Ms Gina showed concern for the lack of assistance given to disabled learners.

Mr Mopaki replied that the ISETT SETA was working with institutions to train people with disabilities but there existed no pressure on companies to employ or offer workplace experience to people with disabilities and thus there was no pressure to come forward and train disabled learners and have them go to the actual workplaces. The training providers indicated that they had the facilities to train disabled learners for 12 to 18 months. This was supposed to be a learnership where workplace experience became important. However, after 18 months of the learners being trained, the companies would request more learners for training without the previously trained learners being employed. ISETT SETA wanted to ensure that the disabled had the opportunities but needed to do this in partnership with employers.

Mr K Dikobo (AZAPO) asked for an explanation about the litigation under the emphasis of matter.

Mr Jabu Sibeko, Senior Manager for Learning Programmes for ISETT SETA replied that it worked with two ICT companies to implement learnerships. The companies failed to implement the learnership programmes. The companies stated that they wanted to train the learners at the workplace but when ISETT SETA did its audit, it found that the learners were put into places that were unfair and training did not take place. The companies were challenged and the programmes suspended. The learners were rerouted to other ICT companies where proper learning was followed. The companies challenged the SETA and the litigation had been going on for almost four to five years. The companies believed that they were owed for the programs not finished.

Mr Mopaki replied that ISETT SETA was in a court case with a previous employer, and a case with a company that wanted to implement learnerships and signed a service level agreement with the company to train a number of students. The company afterwards wanted to put up facilities and infrastructure and needed ISETT SETA to be surety for funds from an overseas donor. ISETT SETA refused to provide surety and stated that the company must use the service level agreement it had, to seek funding where needed but ISETT SETA could not commit if the company wanted to borrow money. The company failed to find funding and stopped implementing the programme. It claimed that ISETT SETA broke the terms and conditions of the service agreement and ISETT decided to go to court on the matter.

Mr Dikobo spotted a lack of involvement in the Northern Cape and asked if the SETA made an effort to penetrate the low ICT represented provinces. He asked where the eight Further Education and Training (FET) colleges that took part in the skills development were based.

Mr Mopaki replied that the ISETT SETA had partnerships and continued to build partnerships with municipalities and it was doing a list of programmes with the municipalities. The municipalities had to identify young unemployed people in their communities to put through computing learnerships. When the computing learnerships were implemented, it did not require workplace experience and learners stayed with the companies for twelve months. Based on funds available, ISETT SETA was not able to cover all provinces but each year certain provinces were selected. This year the focus fell on the Free State, Limpopo, North West and Kwazulu Natal as the other provinces had been covered previously. What could be seen as excess funds were used to train the unemployed in computing in rural areas.

Mr Sibeko replied that the locations of the FET colleges were stated in the Annual Report and it was quite clear that they were situated in rural areas. ISETT SETA was pro-active in its partnerships with the FET colleges to train learners in the rural areas.

Mr Dikobo asked if the new ventures created were only tracked or did this entail support as well.

Mr Mopaki replied not was enough was done in terms of support for new ventures and agreed that more could be done. The learners were trained for new venture creation, they received containers from the companies and ISETT SETA took it for granted that the companies would support the new ventures
.

The Chairperson asked what the remuneration was of board members.

Ms du Plessis replied that board members received R1 508, the Chairperson received R2 484, the deputy Chairperson received R2 174, the audit committee members received R2 500 and financial members received R1 500 per meeting attended.

Mr Mopaki added that this related to the remuneration schedule the Treasury had for government entities.

The Chairperson noted that there were inconsistencies in the remuneration of different SETA boards. The issue needed to be given to the department to look at the cause of the inconsistencies and to deal with this.

Mr Mopaki stated that as a SETA it wanted to succeed financially, therefore new finance personnel were appointed in order to establish what had happened in previous years about audit qualifications and disclaimers. This arose because of a lack in skills and capacity and not necessarily financial mismanagement.

Ms M Magazi (ANC) asked where the offices of the ISETT SETA were situated.

Mr Mopaki replied that the offices were in Midrand, Gauteng with branches in Cape Town, Kwazulu Natal and East London.

Mr Dikobo asked if funds were provided to companies and not service providers, how did ISETT SETA ensure that transformation was realised and power relations changes took place. Service providers were compliant with Black Economic Empowerment but companies not necessarily so.

Mr Mopaki replied that when ISETT SETA engaged with employer it should be able to impact transformation. It ensured that the training providers were also empowered in terms of the requirements of the country.

Mr van der Westhuizen asked for ISETT SETA’s comments on the new landscape as it would be getting additional responsibilities. What was its readiness to implement those responsibilities and what transformation period would be required?

Mr Mopaki replied that as a SETA it was excited but was aware of the bigger challenges. It did not expect a smooth ride as many landscapes were changed and people’s lives influenced. Some parties were happy and others unhappy. It still hoped that it would work together to go beyond personal interests and issues to focus on what needed to be done. ISETT SETA would try to stay focused on the real goals of the SETA.

Ms Mushwana asked if the ISETT SETA had any intention to spread to the other provinces.

Mr Mopaki replied that it intended to spread to other provinces and was in communication with other SETAs, that did not have offices in those provinces, to look into the possibility of sharing offices in order to cut costs.

The Chairperson said that the issue of the restatement of figures was becoming a common trend within the SETAs that the Committee had reviewed which was unacceptable. This could be due to a lack of capacity of the people handling the finances. This trend was visible in almost all the SETAs. The same thing was happening with different explanations regarding the errors in the financial statements. The question remained what was the cause for this, certainly there had to be something there as one could not constantly have the same issues raised. This caused concern as the capacity was not there. Why were mistakes not being picked up?

Mr Dikobo stated that this issue should be raised with the Auditor-General as the Auditor-General gave the institutions a clean bill of health but the following year he stated that the figures were incorrect and errors were made.

The Chairperson stated that an explanation on this matter was needed. If the mistake was not picked up, would it have remained the same way? The trend showed something was wrong and the Committee needed to get to the bottom of this. There were two options, either lack of capacity or fraudulent activities were happening, one could not keep quiet. The Committee would write to the Auditor-General to get an explanation about what was the problem, issue and trend. This should be corrected now, so that it did not happen in the future. She addressed Mr Hannes Hoon,
Director of SETA Coordination: Department of Higher Education and Training, to also look into the issue.

The meeting was adjourned


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