Bank SETA, Insurance SETA & Finance and Accounting SETA on their Annual Performance Plan

Meeting report

Bank SETA presentation

Ms Christine Fritz, Acting CEO/General Manager: Bank SETA, took the Members through an assessment of the National Skills Development Strategy’s (NSDI’s) impact on small and medium enterprises’ (SMEs’) development, the employed and unemployed, the transformation agenda, and strategy goals. She told the Committee the entity had achieved a clean audit for 15 consecutive years, and 26 of the 32 service level agreement (SLA) targets had been met. Targets for learnerships, bursaries and skills programme entered had been exceeded. There was successful completion of maths and science support, with the completion rate at 89%. Consequently, better grades were achieved by beneficiaries, and beneficiaries entered university programmes within the scope of the financial sector.

Remarkable improvements in Recognition of Prior Learning (RPL) programmes had been recorded and the candidates had reported changes in their careers and roles. There had been an increased number of rural beneficiaries who had participated in their programmes, and access had been increased for rural support via regional offices.

Small business interventions had led to an improvement in employment opportunities created by the small businesses, which resulted in an increase in staff members. Small enterprises reported training had improved their operational efficiency and effectiveness, and had assisted them to grow their client base and network. They further indicated there was an improved rate of client satisfaction. As a result, there was an increased number of new businesses in the sector, increased profit levels for existing businesses, and improved operational efficiency of employees who underwent training. By 2015, there were roughly 800 more black senior managers compared with 2012. There were now 6 000 more black middle managers and 16 000 more black junior managers.

Research reports had been developed for all commissioned and in-house research and were accessible to stakeholders on the BANKSETA knowledge bank portal. The banking sector skills plans had met the requirements of the Department of Higher Education and Training (DHET), provided a sound analysis of the sector, and articulated an agreed sector strategy to address skills demand with an appropriate and relevant supply pipeline. Employers had submitted their Workplace Skills Plans (WSPs) and Annual Training Reports (ATRs) that met all compliance requirements for the payment of mandatory grants.  

The Bank SETA was improving the quality of secondary school learning through interventions that addressed the low level of youths’ language and numeracy skills. It provided training and development support to co-ops, SMEs and non-governmental organizations (NGOs) in an effort to contribute to economic and employment growth, and have their impact measured and reported on. It ensured accessible career and vocational guidance within the banking sector, and supported training interventions to address rural development. It developed and registered specific occupation-based qualifications in partnership with the Quality Council for Trades and Occupations (QCTO), in line with the needs of the sector.  It provided quality assurance to ensure the delivery and assessment interventions of accredited training providers who fell within the scope of the Bank SETA, culminating in the timeous issuing of certification of competence.

Ms Fritz also talked of research agenda for 2017/18. She said the agenda looked at the skills that were going to be needed in the future because South Africa was entering the Fourth Industrial Revolution. The technical and vocational education and training (TVET) and higher education institutions were challenged when it came to providing the much needed skills in the banking sector. More needed to be done on the public sector financial intermediaries in order to provide support to improve financial intermediation services. Research reports had been produced for all research undertaken as per the approved research agenda. Research was available to all stakeholders, especially to public training institutions as a reference tool.

Regarding skills planning, the Bank SETA had to develop a sector skills plan in line with DHET guidelines by 1 August 2017 for approval, and encourage and assist employers to participate in the skills planning process to maintain a 96% mandatory grant pay-out rate. Stakeholder participation in skills planning had been increased. A list of sector scarce occupations and critical skills gaps had been developed. On quality assurance, the Bank SETA was developing and implementing new and existing occupational qualifications, and working on the accreditation of providers, the registration of assessors, the moderation of assessments and certification of learners against legacy qualifications.

She reported there had been an increase in the number of occupation-based qualifications that had been developed. Learning materials for selected qualifications had been developed and made available for public use. Effective and efficient external moderation processes were being implemented. A reliable database of providers, assessors, moderators and learners had been established and maintained, and there had been timeous issuance of certificates of competence to qualifying learners.

She then cited some of the following challenges facing the sector:

• Impact of poor matric results in maths and technology;
• Employment of people with disabilities;
• Economic uncertainty caused by the downgrades;
• Rural development;
• Cyberattacks.

(Tables and graphs were shown to illustrate financial performance, funding models, and the discretionary grant split for 2017/18)

INSETA Presentation

Ms Sandra Dunn, Chief Executive Officer: Insurance Sector Education and Training Authority (INSETA), told the Committee that consideration had been given to establishing and maintaining a direct line of sight to the National Development Plan and 2014-19 Medium Term Strategic Framework in the development of INSETA’s Strategic Plan. The plans had been aligned to other strategic policies and sector legislation like the National Skills Development Strategy 111, Human Resource Development Strategy, and the National Development Plan.

On skills planning, she reported that the number of workplace plans received from employers reflected the current supply and demand for skills statistics in the sector. The number of scarce and critical skills had been identified. The Board’s approval and number of sector endorsements had been received for the sector skills plan, and the plans had been distributed to stakeholders.

Regarding occupationally-directed programmes and work-based skills development, there had been a significant increase in the number of youths and workers receiving, completing and achieving qualifications through bursaries and learnerships, achieving part-time qualifications through the skills programmes, and being placed in employment through the internship programmes. Concerning cooperatives, SMEs, NGOs, and Community-based Organisations (CBOs), there had been a significant increase in the number of small business workers and cooperative members achieving qualifications through bursaries and achieving part-time qualifications through the skills programme.

In terms of career and vocational guidance and TVET sector college systems, the INSETA still needed to review and update the career guide, and provide career guidance and development to youths within the sector, as well as new entrants, for the next five years. The entity partnered with TVET colleges for career guidance. A number of TVET lecturers had been developed to support the implementation of INSETA programmes, and some of these approved programmes had been awarded to TVET colleges.

A great number of TVET graduates had been supported to access workplace experience through internship programmes. INSETA was also doing a pilot initiative in Mbizana to increase access to workplaces by rural learners.  

Ms Dunn concluded that in going forward, INSETA was engaging on the proposed SETA landscape, deepening the implementation of National Skills Development Strategy (NSDS) III, and enhancing the implementation of White Paper on Post School Education and Training.

(Tables and graphs were shown to illustrate financial performance, MTEF budget, general audit outcome, and pivotal and non-pivotal projects 2017/18)

FASSET Presentation

Ms Lesego Lebuso, Acting Chief Executive Officer: Finance and Accounting Services SETA (FASSET), enlightened the Committee about the #LastingLegacy, which had been conceptualised to address niche areas which were not adequately funded in the post school system pipeline and achieved the greatest impact. Two core areas were funded: (a) facilitating the placement of learners, and (b) enhancing the employability of learners through funding scarce academic and workplace skills through relevant pivotal programmes.

There was a continued focus to address the transformation imperative in terms of allocating discretionary funding to black African and disabled people – the population groups currently under-represented in the FASSET sector. A review of the recent sector statistics, as well as recent court rulings, had caused the strategy to be shifted to include the funding of Coloured people in the Western and Northern Cape, where their employment was under-represented.

The four most important skills issues that FASSET needed to contend with were:

• The need to retain a long-term and holistic view of the skills pipeline and to address the key challenges that occur in the pipeline;
• Ensuring that new entrants reach professional status;
• Strengthening the capacity of the TVET colleges and improving the absorption of TVET learners in the labour market;
• Supporting the transformation of the sector

FASSET aimed to conduct research into the skills needed in the sector, and to provide stakeholders with the information needed to make informed decisions on skills development opportunities. This would be achieved by conducting research into topics identified in the research plan; building strong stakeholder relationships to facilitate information sharing opportunities, including working committee participation, provincial and regional forums and professional body partnerships; completing the annual monitoring and evaluation report; and ensuring a comprehensive data and information repository at the conclusion of the present licence.

The entity aimed to increase occupationally-directed programmes at the middle level, to grow the skills levels needed in the sector and the broader economy. This would be achieved by assessing and approving grants, including the mandatory grant; making discretionary grants paid to levy-paying firms which train in areas of high need, linked to scarce skills for black African learners, learners with disabilities, and Coloured people in the Western and Northern Cape; registering learners on learnerships; making available the disability toolkit to assist employers who employ people with disabilities; and providing career awareness information to learners, including career guidance information.

FASSET further wanted to increase the capacity of TVET college learners to address the skills needed in the sector as informed by the Sector Skills Plan (SSP). This was going to be done by providing career awareness information to learners, including career guidance information; and providing workplace-based experience opportunities for TVET college learners to enable them to complete their qualification and enhance their employability prospects.

Ms Lebuso reported that FASSET provided support to workplaces in the sector to develop and grow the skills levels of the current workforce. This was going to be achieved by making research findings, scarce skills guides, and the discretionary funding policy available to private and public sector employees; providing guidance and assistance in completing and submitting appropriate, user-friendly grant applications; and assessing and approving grants, including the mandatory grant and other discretionary grants.

She indicated plans were afoot to support small firms and non-levy paying (NLP) companies with skills training and contribute to sector economic and employment growth. This would be achieved by assessing and approving grants, including the mandatory grant; making discretionary grants paid to levy-paying firms that trained in areas of high need linked to scarce skills for black African learners, learners with disabilities, and Coloured people in the Western and Northern Cape; making available the disability toolkit to assist employers who employed people with disabilities; and making sure continuous professional development interventions were being offered to employees of organisations that fell in the FASSET sector, both skills development levy (SDL)-paying and NLP companies.

In addition, FASSET planned to increase the number of government departments participating in skills development, and to enable capacity building. This would be done by strengthening the financial skills base of the public sector and making it a training space in skills development through payment of a portion of the SDL and participation in FASSET initiatives, and facilitation of workplace accreditation for professional qualifications; and ensuring the availability of the discretionary grants to public sector employers who employed black Africans, candidates with disabilities on learnerships, or who offered bursaries to black Africans, learners with disabilities and Coloured people in the Western and Northern Cape to study at recognised tertiary institutions or professional bodies.

With regard to implementation, monitoring and progress, Ms Lebuso pointed out that FASSET’s participation in a variety of checks and audits provided opportunities for analysis of its SETA systems and processes and for feedback that could be used for continuous improvement. Internal auditing monitored the optimal functioning of SETA processes. The DHET regularly monitored and provided feedback on quarterly SETA performance reports.

FASSET aimed to continually improve its processes, and a quality assurance department identified areas for improvement. Research on the achievement of interventions and the impact of interventions highlighted shortfalls in SETA implementation, especially the evaluation of impact of mandatory and discretionary grants and funded interventions.

Data was collected as part of the execution of FASSET’s normal functions. Bi-monthly staff and management meetings were held, where the progress against NSDS targets and any associated risks were assessed and processes amended to address concerns. The board and working committee exercised oversight to address progress against targeted achievement.

She cited some of the challenges that SETAs faced during the 2016/17 period:

• Mid-year shift in strategy focus;
• Leadership changes;
• Investigation into irregular expenditure disclosure;
• Remaining up-to-date with supply chain management (SCM) changes and prescripts;
• Capacity constraints;
• Robust monitoring and evaluations system;
• Changes in the licence period of SETA impacted on the long-term nature of strategy to be decided, as well as staff continuity.

Then she concluded by mentioning some of the successes:

• Robust review and implementation of internal controls under way;
• High levels of employer engagement in skills programmes;
• Extensive career awareness and rural reach achieved;
• Career portal and FASSET alumni programme developed;
• Focus on research via an internal research department to address scarce skills and sector research;
• Creation of workplace-based opportunities for learners through an improved grant scheme.

(Tables and graphs were shown to illustrate financial performance, budget allocation per programme, performance targets, and pivotal and non-pivotal projects 2017/18).

Discussion

INSETA Presentation

Mrs J Kilian (ANC) asked if the short-term planning of the INSETA would be able to develop new opportunities and tackle the industry to make a difference. She enquired if they kept the database of the candidates they trained to see where they ended up. She wanted to find out if they did not need a holistic view in order to make an impact and improve their retention rate in the industry.

Mr Mzimkulu Msiwa, Chairperson: INSETA, responding on short-term planning, explained it had been just a new phenomenon of managing risks and knowing very well that things were going to change in the long-term. It was part of mitigation. This had made them not lose focus and ensured their throughputs were contributing in the sector. They were in the space of knowledge for action, because they were the bridge between the world of schooling and that of work. When one had five years to live, one planned for only five years. To start seeing the impact, one needed to look at the output and look at the statistics.

Ms Dunn, regarding the database and retention rate, said they had got all the information in their system. They had started an impact assessment study on learners who had gone through their system. The report would be finalised at the end of June. They were in discussion with StatsSA to look at the exact figures and where their beneficiaries were.

Mr E Siwela (ANC) asked what the profile of the INSETA sector was.

Mr Msiwa said the sector consisted of 120 00 employees. The main workforce was under the age of 35, while there were those that were between 54 and 64.

Mr A van der Westhuizen (DA) remarked that the duty of the SETAs was to up-skill youngsters and small businesses. The budget did not match the number of people who graduated from these programmes. He asked the SETAs if there was a way of improving the situation and making sure they kept their outputs constant.

Mr Msiwa said that efficiency was there through the costs of training. He said they could find better ways of becoming efficient and recruiting learners to mitigate the high drop-out rate, which they did not want to see.

Ms S Mchunu (ANC) wanted to establish what criteria were going to be used to select eight TVET lecturers from the 50 TVET colleges of the country to support the implementation of INSETA programmes. He further remarked that the organogram of the entity did not reflect the staff profile.

Mr Msiwa explained that the idea was to target four TVET colleges as a start. They had registered a success with the Ekurhuleni TVET College. They had helped in the development of the National Certificate Vocational (NCV) course, and had succeeded in collaborating with the employers in the sector. The TVET colleges would identify the best suitable lecturer in terms of experience and qualifications. He added that the organogram would be submitted to the Committee with the demographics.

Ms M Nkadimeng (ANC) asked how the entity was recruiting its members and which provinces it was targeting, because most people who were running burial societies were not skilled and educated.

Mr Msiwa replied there were areas where they could make improvements and do more. The provinces they dealt with were the Eastern and Western Cape, but they could go to other provinces.

Ms H Bucwa (DA) commented that the issue of collaboration should be discussed by the three SETAs to bring development to young people. There was a need to come up with innovative skills of not providing employment, but for creating employment. The SETAs were in the business of trying to improve the lives of black people.

Mr Msiwa indicated they had taken the initiative to look at the exit strategy. Core business areas had been developed for skills planning and then everything would be handed over to the Department. Collaboration would be done for streamlining business processes. The issue was about skills. The articulation of a merger was important, as long as the skills for insurance would be provided. The room they would belong to did not matter, but they would continue to develop content.

The Chairperson directed her questions to all the SETAs. She wanted to find out why they were all garnering surpluses; why they had so many service providers; why certificates were not issued in time to learners, because that delayed their chances of getting employed; why they did not talk of Recognition of Prior Learning (RPL); and why they were not merging to form one SETA that did many different things.

Mr Msiwa responded on the issue of delayed certificates, and said that currently there were no backlogs. Previously, the training providers had failed to upload information about learners. Backlogs were due to service providers not doing their part. They worked closely with their service providers to monitor the work they did. They had started working on RPL, though no significant progress had been made. Concerning surpluses, he said their entity was not in a deficit position.

FASSET Presentation

Ms Kilian commented that it appeared the entity had limited training for developing people in the public service. She wanted to know how the entity coordinated its research with other bodies, and asked if it had a database of people it trained and career successes to make sure it made a significant impact in the industry.

Ms Lebuso said the SETAs had been established to provide skills development and training in the sectors, and that mandate had been expanded to include the unemployed and TVET colleges. This meant that finances had had to be spread to meet these expectations, and they had to manage a balancing act. FASSET provided training and skills development in the accounting sector. The National Treasury and SARS were participating in their skills development programmes. Treasury had asked them to conceptualise a programme for accounting in the public space. In terms of tracking their beneficiaries, she indicated they had been trying to track them over the years, but they had challenges in terms of keeping a database to check where they were now. That was why they had conceptualised an alumni programme to track their development over the years.

Ms Lauren Derman, Director of Research: FASSET, added that the database issue was a challenge they were trying to deal with. They were trying to gather information on each and every candidate that went through them. All their project beneficiaries were on record and were checked every six months. They knew where everyone was, but there were challenges. Regarding research, she indicated that professional institutes were always looking for information on qualifications and marketing of those qualifications, and said their research was more technical.

Mr Siwela wanted some clarity on the cost containment measures the entity had implemented, because it had inserted new line items and that meant it was reverting to the same amount.

Ms Lebuso replied that when it came to cost containment measures, they were guided by Treasury regulations. They had a focused approach to maintaining costs. The board’s ad hoc assignment had been added as a new line item, though it was not a budgeted line item.  The board had had to do an investigation which had led to the resignation of the CEO. It had been added because there were some costs incurred. It was added to do things like investigations, which were not part of the normal working processes.

Mr Mchunu asked if the three SETAs collaborated, and wanted to know their view on forming a single SETA seeing that they focused on critical and scarce skills.

Ms Lebuso agreed that there were similarities between these SETAs, but there were differences in niche focus areas, specialisation, and training and skills development. In terms of collaboration, they worked a lot more with other SETAs. Currently, they worked closely with TVET colleges, universities of technology, and employers.

Ms Nkadimeng wanted to know what the percentage of the unclaimed mandatory grants was, and asked the entity to brief the Committee on its audit outcomes.

Ms Lebuso responded that the unclaimed funds or grants were standing at 40%. These funds went to the discretionary funding, and then to programmes that were earmarked for delivery. There were grants in place to incentivise learners to stay in their programmes and pay their National Student Financial Aid Scheme (NSFAS) loans.  On audit outcomes, she said they were still awaiting the findings of the Auditor General (AG) because they had not yet been finalised. Previously, the entity had received a clean audit for 16 consecutive years.

Responding to the Chairperson’s question on why the SETAs had many service providers, she explained they had decided to outsource in order to focus on their core business and to enhance their SCM structure. The Board had also decided to bring some of the outsourced areas back. The decision to bring some of the outsourced areas back had not yet been finalised by the board. 

Ms Kilian remarked that one could not look at this matter in isolation, because there were administrative costs. If SETAs were employing more people to minimise outsourcing, that was going to have an impact on the 10.5% cap put on them. The bureaucracy was growing, and now they would need to see if they should not increase the cap.

The Chairperson replied that the SETAs were no different from the entities. They just needed to look at the Treasury regulations.

Bank SETA Presentation

Ms Mchunu wanted to know what criteria the SETA would be using to select the ten targeted rural areas and learners in those areas for its outreach programme.

Mr Martin Mahosi, Deputy Chairperson, said that the Bank SETA was relatively well known. They had done road shows to rural areas before, and opened offices outside the urban areas. Their footprint should lead to an increase in the number of programmes they offered. However, they could not do everything everywhere. In the past five years, they had invested a lot in historically disadvantaged institutions in respect of the accounting programme, and had helped them to gain accreditation. This was an indirect access they provide to the youth in the periphery.

Ms Fritz added no criteria would be followed on rural training. Instead, there were different programmes that focused on rural areas where they targeted schools, especially those which did not have maths and science teachers. In other programmes, they worked closely with the Credit Regulator in conjunction with the municipalities to identify rural cooperatives, to manage their finances internally. Their entrepreneurship programme taught the candidates how to access funds, how to tender for business, and how to manage their funds.

Mr Mahosi, responding to questions asked by Members on outsourcing and audit outcomes, said it was not a surprise that SETAs got clean audits. The ground was laid out already. They needed to exercise self-regulation and more compliance. On outsourcing, he said they had in-sourced key functions that had been outsourced. There had been success in that area, and systems were in place. Attention had been paid to internal audit. With regard to comments made by Mr Van der Westhuizen on what could be done to up-skill the youngsters and small businesses, and keep outputs constant, he explained they continued to focus on building partnerships to grow skills development and growing the economy. Training might look like a generic thing, but there was a need to attract foreign direct investment to grow the economy. One of the areas where they were experimenting was to explore the geographic infrastructure systems. For example, if the government was pumping R10 billion into a particular place, then as a SETA they needed to know the impact that would have in that area and what the SETA was going to do in terms of development there.

Ms Nkadimeng asked what the entity was doing about up-skilling people running stokvels.

Mr Mahosi said this was a matter of re-skilling, because the workplace was changing at a fast pace. This would also help the candidates not to be retrenched. He told Members there was a stokvel academy that had been established. They were involved in its financial management and investment. There were other bodies they worked closely with, like universities and micro-finance associations.

Mr Mahosi, replying to remarks about research collaboration and the merging of SETAs, said they could have one SETA, but that SETA would have to have a bigger set of skills in terms of board establishment, governance, and change management. However, people must be aware there would be a skills flight if that merger happened. With regard to research collaboration, he said they had a forum of chairpersons that discussed industry issues. One common area was around research and information technology (IT).

Responding to a comment from Mr Van der Westhuizen on the impact of throughputs, Mr Mahosi pointed out there was an excess of 50 000 beneficiaries. They monitored the cost per learner, the costs of the bridging programme and learner support, and they identify issues that made the learners leave the programme. They tried to include monthly allowances and accommodation. It was a substantial amount. They needed to improve on it and make sure that money was not wasted. That was the holistic support provided to the learners.

Ms Beaula Dziruni, Chief Financial Officer: Bank SETA, replying to a question from the Chairperson on surpluses, explained they had programmes that lasted over three years, and those programmes had to be funded as the learners progressed to other levels. The surpluses were committed to fund these programmes.

Mr Mahosi said that one of the things they focused on was on how they supported the banks with their expansion to other countries. The problem was around regulations. They had to train and prepare local banks to move to other countries on the continent. They also had to train people in the foreign countries so that they knew how local banks worked. Unfortunately, they were not allowed to use the money of locals to train foreigners. However, it should be remembered that some of the revenue derived from the foreign country went back to SA.

An official from the Department indicated they were happy to train and export South Africans to other African countries. He also noted the responsibility of the SETAs was to identify skills needed in the sector and collaborate between educational institutions and the workplace. SETAs facilitated training, they did not train. If they did training, it was outside of their mandate. He said that some of the drop-outs from these programmes were not bad at all, because learners left the programmes/internships for better paying full-time jobs. For example, one student got an internship from the Department and had dropped out of the programme, but was now working for FASSET.

Concerning surpluses, he indicated the Minister had been worried about the accumulation of surpluses from the SETAs at some stage. The Department had had to come up with regulations and impounded the surpluses. That money had been transferred to the National Skills Fund.

Mr C Kekana (ANC) said that the SETAs must realise that when they appeared before the Committee, they must not be defensive. There were problems in the country. The SETAs were supposed to be linkages. There was a young man who came to his constituency office with qualifications in boiler-making. He wanted to know how he could save this young man. The Chairperson asked the SETAs to take into consideration the concern raised by Mr Kekana and Members, and provide solutions.

The meeting was adjourned.