New SETA landscape and overview of their work

Higher Education, Science and Innovation

03 September 2019
Chairperson: Mr M Mapulane (ANC)
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Meeting Summary

In its overview on the new Sector Education And Training Authorities landscape, the Department spoke about their governance, finances, challenges, successes and interventions at a high level.

The main challenge in the SETAs was irregular expenditure in the previous financial year:
- BankSETA – R1.3million irregular expenditure.
- Culture, Arts, Tourism, Hospitality and Sport SETA – R47.2 million. 
- Energy and Water SETA – R4.3 million.
- Financial and Accounting Services SETA – R56 million.
- Manufacturing, Engineering and Related Services SETA – R1.9 million.
- Mining Qualifications Authority – R17.7 million.
- Safety and Security SETA – R2 million.
- Transport Education SETA – R503 000.
- Wholesale and Retail SETA – R84 million.

The Department noted those SETAs where disciplinary action was taken against CEOs and senior managers based on allegations received through anonymous emails and tips.

The Department said that generally the SETAs performed well in achieving their targets over the past three years; there were steady and gradual improvements.

Members were not satisfied with the outcomes because there was a lack of specific details on numbers of qualifications and placements. They wanted details on the number of young people that obtained qualifications through the SETAs and secured employment. How many had trained but not been placed?

The current National Skills Development Strategy 3 and SETA landscape lifespan goes up to 31 March 2020. The new NSDP was gazetted by the Minister on 7 March 2019 whilst the new SETA landscape was gazetted on 22 July 2019. Consultation and engagement had been sought and received.

Members were not happy about the SETA Landscape presentation and felt that it was too high level and did not outline objectives or purpose. It lacked significant detail for Members to understand what it was about.

Members asked questions about the irregular expenditure across the board and the mitigation plans for this; about the Public Protector remedial action for MerSETA; numbers for the qualifications obtained through the SETAs, graduates placed in employment versus unemployed graduates; who was responsible for the appointment of the Accounting Authority in each SETA; whether the new Strategy aligned with the Fourth Industrial Revolution; percentage breakdown of private and public sector partnerships; the linkage between curriculum and viable skills; interventions to curb the high unemployment rate; and measures to mitigate the audit findings at SETAs. The Committee agreed that it would call in the SETAs with the greatest challenges.

Meeting report

Opening remarks
The Chairperson noted the sad news about the killing of the University of Cape Town student and paid respects to her family. The scourge has the country on its knees. Society needs to double up its efforts to curb this scourge of women abuse, rape and killings. Men need to change their behaviour . He did not know when this scourge will stop.

In addition, the looting, torching and property destruction as well as the killings of foreign nationals highlights xenophobia. The immigration policy must be looked at so that those who are here can be properly accounted for. The country needs to assist foreign nationals to be documented to avoid the problem of xenophobia. However, it is  compounded by the unemployment rate that continues to grow. People who are actively looking for employment are not getting jobs.

The Chairperson requested everyone rise and observe a moment of silence.

Sector Education And Training Authorities: briefing by DHEST
Mr Gwebinkundla Qonde, Director-General at Department Of Higher Education, Science & Technology (DHEST), said the presentation was elaborate as it covered the entire sector regarding its management, governance, challenges, and interventions.

There are 21 SETAs in the country that cater for all industries both in the private and public sector. The SETAs are governed by the National Skills Development Strategy (NSDS) and their main objective is to train and facilitate workplace training and placements. The Minister realised that taking into consideration various programmes would assist in integrating all the programmes and instead of developing a NSDS 4, there was agreement by all those involved that DHEST would need to develop a plan that would be aligned to the National Development Plan (NDP) as well as the White Paper. The Plan would be introduced in 2020 up until the end of the NDP lifespan.

Mr Zukile Mvalo, DHEST Deputy Director-General: Skills Development, said the most common challenge in the majority of the SETAs was irregular expenditure in the previous financial year:
The main challenge in the majority of the SETAs was irregular expenditure in the previous financial year:
- BankSETA – R1.3million irregular expenditure.
- Culture, Arts, Tourism, Hospitality and Sport SETA – R47.2 million. 
- Energy and Water SETA – R4.3 million.
- Financial and Accounting Services SETA – R56 million.
- Manufacturing, Engineering and Related Services SETA – R1.9 million.
- Mining Qualifications Authority – R17.7 million.
- Safety and Security SETA – R2 million.
- Transport Education SETA – R503 000.
- Wholesale and Retail SETA – R84 million.

Ms Melissa Erra, Chief Director: Skills Development presented the National Skills Development Plan and the SETA landscape. See presentation document for full details.

The Chairperson said that he was not satisfied with the presentation because it did not outline simply and clearly what the new landscape would entail or its objectives. He noted that the first part of the presentation repeatedly said that the exodus of staff would be dealt with. He did not understand the short periods of the Accounting Authorities and how it seemed to impact on management.

He asked for more details on the irregular expenditure incurred by the different SETAs and whether measures were being implemented to mitigate this. He sought more clarity on the remedial action of the Public Protector. The Services SETA seems to be having a lot of problems. Perhaps going forward, a sampling of the SETAs that are experiencing difficulty should be invited to the Committee.

Mr B Nodada (DA) thanked the Chairperson for the spirit in which the meeting was started. Everyone shared the sentiments about the scourge of women abuse in our country. He conveyed his condolences to the family of the victim.

Mr Nodada said he lost interest in the presentation because the same challenges are being raised across the board. He was appalled by the repeat unqualified audit opinions and irregular expenditure. There was a lack of consequence management. There is a lot of accountability around finances as the funding can be tracked. However, there is no accountability about the skills acquired – is there value for money? There is a lack of specification on the number of people qualified and placed in work versus money spent.

All SETAs need to target scarce skills but why is there no information about the skills produced, the placements, the qualifications obtained? It should also specify the opposite - how many did not obtain  qualifications and work.

What is the value of detailing the qualifications offered by the SETAs but not knowing how many obtained these and actually found work. He referred to page eight: what are the numbers of people placed in jobs? Does the Strategy align with the 4th Industrial Revolution and who appoints the Accounting Authority of each SETA?

What is the percentage of the breakdown between private and public partnerships? What are the timelines for the Special Investigating Unit (SIU) investigations? Where are the learners placed in employment as outlined on page seven? On page 23, how many people were placed, in what skills and where are they employed?

Since the SETAs identified the scarce skills – what is the linkage between what has been developed in terms of the curriculum and the skills? Where are the provincial Career Development Officers (CDOs)?

His concern was that there was no breakdown of those who obtained qualifications and employment versus those who obtained the skills and did not secure employment. 

Ms J Mananiso (ANC) wanted to know about the APP targets achieved in the previous quarter. It seemed during the presentation that the SETAs operated in silos and she asked for APP performance percentages. Given the current unemployment rate, what interventions have been made by the SETAs? How many bursaries, learnerships and internships are currently running and where are they? She suggested that for skills development that age 35 and above should be included in the targeted youth - has that been included?  

With the qualified audits, what are the matters of emphasis in the 2016/17 reports. Irregular expenditure appears to part of the DNA of SETAs. What is the turn-around strategy for this and what measures for consequence management are planned for the future.

Mr P Keetse (EFF) said that the report was not satisfying at all because it contained grammatical errors and misreported information. There was a story that broke a few days back in Limpopo where there was a bogus course involving the University of Limpopo and the Services SETA. He asked for details.

The Chairperson said that the Committee had taken a view to be briefed on that. The following week the University of Limpopo along with Services SETA will brief the Committee.

Mr Keetse wanted to know how many centres are available across the country and he believed that some of the centres were bogus while money is being pumped into them. If you look at the Transport Education Training Authority (TETA) centres, in Gauteng some of them actually do not even exist and students have attested to this. Perhaps, Members should be provided with the breakdown of the success rate of these centres.

Mr W Letsie (ANC) also conveyed his condolences to the family of the UCT student who recently passed away. The scourge of women abuse and murders is a state of emergency.

Mr Letsie lamented the R56 million irregular expenditure by one of the SETAs because it translated to about 11% of the total budget. He asked what was being done about this and measures that would be put in place to enforce consequence management. On the curricula, are SETAs moving in line with the rest of the world? Recently Standard Bank closed about 1 200 of its branches across the country.

Ms D Sibiya (ANC) commented that there was a lot of re-establishments taking place across the SETAs. From now until April 2020, what is going to happen? It was mentioned that one of the SETA CFOs was suspended but it did not say for how long.

The Chairperson said the Committee would like to request another briefing on the SETA landscape as Members did not quite pick up on what was presented.

Mr Qonde suggested that perhaps going forward the Department would request exactly what the Committee wants to be briefed on and ensure that this is clear. The request stated that the Department was to provide an overview of governance, performance, operations and so forth. Now SETAs are entities with their on Strategic Plans and Annual Performance Plans approved by Parliament. The Department plays a legislated oversight role on each entity with its own strategy and performance plans. Therefore, if the Department were to provide a detailed analysis, the Accounting Officers would need to be present at the meeting to account. The Department’s interpretation on the high level overview was on the service level agreements – the Department can only provide the information as informed by that service level agreement with each SETA. Perhaps, the SETAs should be invited to Parliament along with the Department.

The Chairperson replied that the Department did what was expected: a presentation on a high level. Members wanted a sense of what was happening in each SETA. Now that the Committee has a sense, a sampling would be conducted to identify the ones with extremities and challenges. The specifics required by Members could only be provided by the SETAs.

As for the SETA landscape, the briefing was too abstract and it did not provide what would be introduced by the new landscape.

Mr Qonde replied about financial management over the SETAs, saying that the Department held them to account and by requesting the SETA explain how the irregular expenditure came about. Where it thinks that something untoward occurred, it would exercise its oversight role through the National Skills Authority (NSA). If further investigations were required, the Minister would direct an agency to conduct a forensic investigation. After the Minister has perused the investigation report on completion of the investigation, he would direct the SETA to act on the recommendations and remedial actions. Alternatively, the SETA could be placed under administration if necessary. The DHEST would still obtain explanations from SETAs regarding the irregular expenditures and wasteful/fruitless expenditures.

Mr Mvalo replied that there is a relationship between the Accounting Authority (SETA board) and Executives (CEO) even though the terms do not run concurrently for these structures. The way the terms run have never been an issue or affected the relationship between these two structures. 

The Public Protector conducted an investigation on MerSETA and one of the remedial actions was to instruct the Minister to institute disciplinary action against the CEO. The CEO was appointed on contract but by the time the disciplinary action was finalised, the contract was over and the CEO was not reappointed. The Board indicated that it would pursue the matter of criminal charges.

On the money spent and people qualified, this can be provided in a subsequent report. The spirit of the National Skills Development Plan (NSDP) focuses on the outcomes. Hence, only outcomes were reported in the presentation. The CDOs are all over in the public TVET colleges, all 50 of them across the country.

On the Fourth Industrial Revolution (4IR), this is a requirement in the annual performance plans of the SETAs and a directive was issued to the SETAs to include skills development and training for the 4IR.

Ms Erra replied about the requested information on results that the Department had entered into an arrangement with the Human Sciences Research Council to track the occupations in high demand, where graduates trained through the SETAs have been placed and what are they doing. In the NSDP 3 approach, there is a demographic detail – it is an ongoing part of the research agenda that is being undertaken by the HSRC. The Committee would be furnished with this information once available. The Minister issues the list of occupations in high demand through the Government Gazette and the Department also contributes towards this. The labour market is not stagnant so the Department was also waiting for the labour market to make some of these submissions. She noted the comments on the SETA landscape strategy.

The Chairperson said that there are a lot of entities in the Department, with 21 SETAs, 50 TVET colleges, 26 Universities as well as Community Education and Training (CET) Colleges. Also now there are many others in the newly added Science and Technology component. Is it not possible to get all the high level information from the Department on these? They will take the same approach with the universities as with the SETAs in obtaining a sense of the issues happening.

The minutes of the 2, 3, 5 July 2019 and 20, 21, 27, 28 August 2019 were adopted without amendments.

The meeting was adjourned.

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