Quality Council for Trades and Occupations & National Skills Fund on their Strategic Plan 2013/14

Meeting report

The Committee elected Ms N Gina (ANC) to act as Chairperson as the Chairperson was unable to attend.

Ms N Gina (ANC) as Acting Chairperson welcomed the delegations from the QCTO, the NSF and the Department of Higher Education and Training (DHET). She thanked the officials for making the presentation available to Committee Members well ahead of time as this gave Members an opportunity to study the presentation and thoroughly engage with the officials.

Quality Council for Trades and Occupations briefing
The CEO of the QCTO, Ms Joyce Mashabela, noted that the QCTO was established in accordance with the Skills Development Act as amended in 2008 and that the QCTO actually started its operations only in December 2012. The QCTO was listed as a schedule 3A public entity on the 31 December 2010, effective retrospectively from 1 April 2010.

Comparative Situational Analysis of the QCTO
After stating the mandate of the QCTO, Ms Mashabela compared its 2012/13 performance and status to the current 2013/14 situation. This comparison was broken down into economic factors, legislation, social factors, technological factors, human resources, finance, systems, marketing and communication and governance.

2013/14 Analysis
Ms Mashabela indicated that the skills shortage challenge was a national priority and planning for skills training as part of infrastructure development was well advanced. In terms of legislation, the preparation of a White Paper was in progress and the Quality Council was required to submit advice to the Minister of Higher Education. The QCTO was allowed to make funding submissions as per the regulations and instructions from the Skills Branch. On social and technological developments, the QCTO was working with government and the South African Qualifications Authority (SAQA) was focusing on improving the image of occupational qualification. A National Career Advice Portal and Career Advisory Service had been started and continued to be developed.

The QCTO at current funding level could fill only 32 of the 46 posts in its organogram. In terms of finances, the QCTO expected much higher levels of spending due to staff appointments and the implementation of its own supply chain management policy and bid committees. There was an improved source of funding for quality assurance functions due to the proclamation of SETA grant regulations. With regards to systems, an IT Director had been engaged on 1 June 2013. The development of processes and procedures for the development of qualifications was to be completed. On the marketing front, the general public was going to be made more aware of the QCTO through participation in the road shows of other entities and organisations and the QCTO was planning to carry out its own road shows. In terms of governance, the QCTO Council and committees were now active and the Qualifications Committee’s productivity increased due to standardization of processes and tools to evaluate qualifications.

2013/14 Strategic Plan
The strategic goals of the QCTO included effectiveness and efficiency; access, success and progression; and an improved NQF landscape. The two programmes in the strategic plan overview included Administration and Occupational Qualifications Management. The purpose of the second programme was to ensure availability and currency of authentic qualifications and part qualifications for trades and non-trade occupations; to ensure a quality assurance environment that was fair, effective and efficient in relation to accreditation, assessment and certification of qualifications; and to manage an effective and efficient engagement strategy for the advancement of NQF objectives with stakeholders. The sub-programmes included: Occupational Qualifications Development And Review and Occupational Qualifications Quality Assurance.

MTEF Budget 2013/12 – 2015/16
The presentation of the MTEF budget was done by the Chief Financial Officer of the QCTO, Ms Ndivhu Madilonga. The QCTO 2013/14 budget was R50.9 million while the 2014/15 projection was R51.6 million. The 2013/14 expenditure comprised of compensation, good and services, and capital expenditure. The total amount spent by the QCTO for the 2013/14 financial year so far was R30 million. This meant that there QCTO had an under spending balance of approximately R20 million.

Discussion
Mr S Radebe (ANC) asked what the terms of the IT subcontract were and how long was the IT service going to be outsourced. IT services were a critical portfolio and outsourcing could not be a permanent option. On finances, it was understandable that the QCTO only started operating in 2012 but he was not happy with the figures as there had been a roll-over of about 7 million in 2012/13 and there was a surplus of R20 million in 2013/14. Why was there a roll-over? Surpluses meant under expenditure. It was also worrisome that the budget continued to increase. He noted that 65% of the budget went to compensation. He asked if the core function was being carried out. On policy issues and qualifications, when was the board intending to finish up the policy work?

Mr A Mpontshane (IFP) referred to the core mandate of developing standards and qualifications, and asked if the Committee could be provided with details of the occupational qualifications which had been developed and the process of the development linked to the skills shortage in the country.

Ms D Chili (ANC) said colleges had a great need for career guidance. What was the QCTO doing to improve the situation?

Mr C Moni (ANC) said that in terms of policy development, his understanding was that there were now executive officials who were working without policies. Was there any progress in policy development within the QCTO? 2013/14 was just about 30 million. But in the 2014/15 budget they were saying that there was not going to be any surplus. How was that going to be done?

Dr L Bosman (DA) was concerned about the income and expenditure statement as he said that the numbers were not tying up. He proposed that subsequent presentations should include the details of the financials.

Mr S Makhubela (ANC) said that the QCTO Annual Report said that it needed additional funds to appoint more staff members. Was this necessary considering the surpluses? He asked what the challenges were in the acquisition of office space. Was the fact that the Department did not want to fund infrastructure indicating that the DHET was not committed to the objectives of the QCTO. Did the QCTO have an audit committee and did it have enough staff in that regard?

The Acting Chairperson asked for the total number of QCTO staff and what was the budget required to fill all the necessary positions in terms of the compensation budget. There were targets which were not achieved in the Annual Performance Plan (APP). The targets for the current year had been doubled when the previous ones were not achieved. What was the QCTO planning to do in terms of meeting these targets? She asked if there was going to be a decrease in the use of consultants.

Response
Ms Mashabela replied that with regards to IT contracts, the QCTO needed an IT company to work for them as they did not have enough office space and their own server. There had to be a temporary arrangement to host the website and emails until the office space of the QCTO was more permanent.

The CFO, Ms Madilonga, said that the QCTO was hoping to move to its own building and it would be a fruitless exercise to buy servers and install IT equipment in its temporary premises. The contracts were short term. It was true that there were risks but the contract was water tight and it was simply an interim measure.

Ms Mashabela said that that the IT operations of the QCTO were not given over to anyone. It was simply a temporal measure to keep the system running until the QCTO moved into its own building.

On the reasons for roll-overs and surpluses, Ms Mashsbela said that there were fewer operations in the past and that was why there was relatively less spending and under spending. The current year and the next year were going to involve more operations such as buying of IT equipment, renting space and many others expenses and this was going to improve the spending of the entity.

On the concern of 65% of the budget being spent on compensation, the work of the Council was very labour intensive. It required a lot of field work and quality assurance so there were many of the officials that had to be highly compensated.

On career counseling in colleges, Ms Mashabela said that the QCTO was not in charge of career advice but it was working with the South African Qualifications Authority (SAQA) and other agencies to redress the problem. However, there was more research which had to be done to improve performance in schools and colleges. It often had to do with the level of skills which the students brought with them and many other social and historical factors were at play.

Ms Madilonga said that with regards to the staff complement, QCTO had only 20 staff members which was less than 50 percent of the required number. The R17 million was the budget for 42 posts and not the current 20 posts. Advertisements had been made for over 12 posts. On infrastructure, she said that there was a process for the buying or renting of a building. A tender had been put out for the renting of new office space. However, the QCTO was housed by the Department and that was why there was no infrastructure budget.

Ms Madilonga said that the QCTO had an audit committee which was functional.

On the strategic objectives, Ms Mashabela said that QCTO was working with the Office of the Auditor General to make the objectives of the entity SMART and achievable.

Dr Bosman commented that for future purposes and for more interactive engagements, the Committee would like to see more detailed financial reporting. They needed to put in the actual figures for better understanding.

Prof S Mayathula (ANC) asked what message the QCTO had for communities and citizens of South Africa.

Ms Mashabela said that the message from QCTO was simple. The message was that occupational qualifications were on the rise and employers were taking this more seriously than ever before. In terms of the general public, the role of the QCTO was to streamline and develop the qualifications which were required for professional advancement.

The Chairperson of the QCTO, Prof Peliwe Lolwana, was asked to make a brief statement.

Prof Peliwe Lolwana said that she had come just to support the CEO and the QCTO team. There was going to be an important debate with the Minister of Higher Education on the 16 August 2013 and she was hoping that the discussions will shed more light on what the role of the Council was in relation to improving skills in the country.

The Acting Chairperson said that it was sad that the Committee had not been invited to the debate.

Prof Lolwana said that what could be done was for the QCTO to provide the Committee with the research papers which were going to be presented at the debate.

The Acting Chairperson said that she was happy to see that the top structure of the QCTO was gender balanced. She thanked the QCTO delegation for the briefing and called on the National Skills Fund to make their presentation. She noted that the committee was running out of time and requested the NSF to be as brief as possible.

National Skills Fund (NSF) briefing
The Chief Executive of the NSF, Mr Mvuyisi Macikama, presented the 2013/14 Strategic and Annual Performance Plans.

The Committee was presented with an outline of a brief history, mandate, vision and mission of the NSF and a graph indicated the increased performance of the NSF from 2006 onwards in terms of grants disbursements and revenue.

Mr Macikama told the Committee that R650 million had been spent per year on undergraduate bursaries benefiting 12 500 students and R106 million per year on post-graduate bursaries benefiting 1 000 students. This was done in collaboration with the NSFAS and NRF. R800 million had been spent on capacity building in FET Colleges benefiting over 40 000 students. R1.5 billion had been spent on infrastructure developments at 12 FET colleges around the country. Mr Macikama outlined the activities of the NSF in terms of the new growth path, the Industrial Policy Action Plan (IPAP), rural development, university infrastructure development, skills infrastructure development and other national priority projects.

Skills Development Funding
On targets and programmes aimed at benefiting as many learners as possible, R266 million had been set aside every year towards the development of a credible skills planning mechanism, integrating the post school education system and research related to skills development. In collaboration with the Human Resource Development Council of South Africa, the NSF had set aside R60 million per year towards supporting the HRDCSA. R60 million per year was also allocated towards supporting the work of the National Skills Authority.

NSF Operations
To improve its operational efficiency, the NSF established a strategic analysis and projects initiation within the entity which was aimed at improving NSF’s funding approach to be more pro-active and to improving NSF’s project initiation efficiency. The programme also intended to establish the NSF operationally as a Schedule 3A public entity. The entity planned to measure its achievements within certain deadlines.

Discussion
The Acting Chairperson said that she wanted the assurance that the strategic plan and the APP were not going to be changed. She raised this concern as the copies which had been presented to the Committee were not signed.

Mr Macikama apologised that the copy presented was an unsigned one and that was a mistake. He confirmed that the copies presented to the Committee were the final copies.

Mr Makhubela said that there were targets but there were no indications as to whether the targets were achieved or not. On shared services with the Department, was any service level agreement signed? On the use of consultants who helped the NSF to establish itself as a fully-fledged entity, were these consultants integrated into the entity? Was monitoring and evaluation capacity being prioritised to ensure that disbursed funds got to the intended beneficiaries?

Mr K Dikobo (AZAPO) congratulated the Fund for the fact that there was no longer any under expenditure. How were the funded students monitored by the NSF? On funding for university infrastructure, there were two universities in Limpopo and none of them had an engineering faculty or a medical school. In his thinking, the University of Johannesburg, the University of Pretoria and the Cape Peninsula University of Technology were already at a certain level yet the NSF was still supporting these universities. Why was the NSF not focusing on the smaller universities? If NSF wanted to really transform the country it had to focus more on the smaller institutions.

Ms Chili asked if the earmarked funding was meant only for particular skills students or all students could apply for the NSF funding. Did the NSF follow and monitor the funds it disbursed? Universities and FET colleges were complaining that the growth in student numbers was not matched by increase in resources? What was the NSF doing about such complaints?

Prof Mayathula asked how rural communities and constituencies could directly benefit from the programmes of the NSF.

Mr Bhanga (COPE) asked what the priority training areas of the NSF were. A new nuclear plant was being developed in the Eastern Cape but there was no skills development being done in the Eastern Cape in preparation for the project. Why did all programmes have to be taken to Johannesburg? Was the focus of the NSF broad enough in terms of the allocation of these funds? What criteria were used to allocate the funds of the NSF?

The Acting Chairperson said that all the questions were linked to the question of whether the country was getting value for money for all the funds disbursed.

Responses
Mr Macikama said that the major frustration in terms of skills funding was that most of the funding was not being deployed in a valuable way which will provide the necessary skills throughout the country. The review of the skills system pointed to this reality. The past decade had produced many young people having certificates many of which were not “adding value” to the lives of these young people. Targeting young people with short courses was keeping them in a system of poverty. There had to be a system of skilling which could yield economic value. This was the rationale behind the FET sector.

It was also understood that the FET sector had serious problems of its own. There had been an exodus of teachers from the training sector which killed the college and technical system. Many teachers just created companies to become trainers and assessors within the FET sectors. This trend had to be reversed and the Department of Higher Education and Training (DHET) was working on this situation.

In terms of the disbursement of funds, the NSF was not practicing fiscal dumping. There was focus on certain programmes. An example was the Cuba Programme to train medical doctors. The DHET was now working with local universities. This was linked to the question of the criteria for working with universities. The NSF was not only working with the bigger universities. It had been working with the University of Limpopo on a programme for the training of chartered accountants. The engagement with the University of Johannesburg was informed by the huge number of engineering students. The huge numbers of engineering students ended up working for banks or doing other jobs simply because they could not find engineering jobs.

The bursaries were targeting mainly scarce skills. There was however a lot of debate as to the list of skills which should be considered as scarce.

There was a lot of monitoring and evaluation of the funded projects. Project managers were appointed to verify projects on an ongoing basis to ensure that the money was used for the right process. In universities, verification was done to ensure that students were registered. To qualify for another year of sponsorship, the student had to have passed academically. The NSF relied on the statements coming from the various universities and institutions.

On the growth of students in FET colleges, this was a great challenge as colleges were asked not to turn away students. The NSF was trying hard to top up the resources of these institutions. It was however understood that this was a historical challenge and continual work by all the stakeholders in the sector was required.

On the nuclear issue in the Eastern Cape and in terms of the IPAP, government was looking at expanding its engagement. In this regard, there was definitely a need for more skills in the region. Working with the provincial skills development office, it was important to link the offering of the FET colleges to the economic developments in the region. One needed to cater for emerging needs and the NSF was very aware of this fact. There were exchange programmes for both lecturers and students with some of them traveling to Germany. Equipment and material had been donated in this regard. This was not an easy task and there was the need for the correct deployment of council members and a restructuring of the curriculum of the colleges.

In terms of NSFAS, the relationship with NSF started in 2002 and a decision was taken for the NSF to assist with bursaries for scarce skills, and the assistance in this regard was billions of rands. The NSF and NSFAS had agreed that the NSF would also support some of the internal administration processes of NSFAS.

The distribution of funds in terms of FET colleges was linked to the number of students in the province. However, the NSF ensured that every FET college got the most appropriate amounts and allocations from the NSF.

The meeting was adjourned.