W&RSETA, TETA, Mining Qualifications Authority 2018/19 Annual Reports
Higher Education, Science and Innovation
23 October 2019
Chairperson: Mr M Mapulane (ANC)
The W&RSETA had suffered a massive loss in reputation over the fraud and corruption associated with its previous board. The forensic reports were analysed to identify maladministration, incompetence, policy gaps, and possible corruption. The audit report was qualified because of the previous board’s mismanagement of funds, which lead to the wasteful use of about R1.2 billion over a period of 10 years on 78 projects. However, for 2018/19, the new management had reduced irregular expenditure from R87m in 2017/18 to R12m in 2018/19. W&RSETA did note a 17% increase in expenditure in 2018/19 of which 11% was salaries but the entity had achieved only 31% of its targets. Its attention had been focused on a short term turnaround strategy that included stakeholder engagement and backlog eradication which enabled 17 000 certificates to be issued out. Revenue had increased by 7.7%.
The MQA presented an unqualified audit report, 81% achievement of its KPIs, an increase of 2% in revenue and irregular expenditure reduced to R23 000 from R18 million the previous year. Thus the board was working toward ensuring accountability and responsibility among its members and employees. A major highlight for 2018/19 had been the integration of more women in the mining sector. The MQA had experienced cases of fund mismanagement and possible fraud, all of which were under investigation. The details of the investigation outcomes would be forwarded to the Committee when released shortly.
TETA presented an unqualified audit report and achieved 74% of its KPIs in 2018/19. It had seen a rise in revenue although its total liabilities amounted to R72 million. Overall performance showed an increase of 15% which served as a sign that TETA was heading in the right direction. TETA was looking into improving its maritime presence and also assist the taxi industry to diversify its business offering as there was potential for more revenue generation. It was designing methods to industrialize it and integrate it into the to the main national transport system. One of its major objectives going into the new financial year was to get more woman involved in the taxi industry.
The Committee was shocked at the W&RSETA history and requested the names of all previous board members. W&RSETA was asked why it seemed the Western Cape and Gauteng were the only provinces benefitting. W&RSETA was told to ensure a speedy finalization of the forensic reports and investigations to ensure that those accountable were held responsible.
MQA was asked about wasteful expenditure and more information on the investigation referred to the Hawks was and what was MQA doing to ensure that past mistakes are not repeated. MQA should provide the actual number of learners trained not just percentages, how many succeeded and the completion rate to allow the Committee a better understanding of its performance
TETA was asked about programmes aimed at women empowerment. It was asked for the number of provinces that TETA was active in. Were programmes in place for learners to acquire relevant digital technology skills. Members asked about the inclusion of the taxi industry in TETA projects as well as efforts in the maritime and aerospace space.
The SETAs were told to focus on consequence management as all money lost through fraudulent means had to be paid back. The board members present should expect to be held accountable for their actions.
Wholesale and Retail SETA (W&RSETA) 2018/19 Annual Report
Ms Yvonne Mbane, W&RSETA Board Chairperson, emphasised that the new board appointed in 2018 was determined to gain back the reputation the W&RSETA lost under the leadership of its previous management. There was a backlog in the affairs of the SETA. The dissatisfaction had caused a decline in employer participation. The audit report was qualified because of the previous board’s mismanagement of funds, which lead to the wasteful use of about R1.2 billion over a period of 10 years on 78 projects.
Mr Tom Mkhwanazi, CEO: W&RSETA, stated that the Auditor General’s findings for W&RSETA for 2018/19 was qualified, with only 31% of key performance indicators (KPI) achieved. Those targets which were not achieved by the SETA were accounted for by the gross mismanagement of funds under the previous board. The SETA had written off R69.7 million and closed down 52 projects during the period. Under the previous board, in 2017/18, the SETA had irregular expenditure of R87 million, which the new board had reduced to R12 million in 2018/19. The SETA had trained and issued certificates to 17 000 learners.
The following historical challenges were noted;
• Within a period of two financial years the WRSETA has six CEOs, excluding an Administrator.
• Both the previous Board and the Administrator were re-instated twice.
• There were two Administrators at different time frames.
• Four Forensic Investigations were conducted by the Board and the Administrator upon re-instatement.
Mr Lwazi Khuse, CFO: W&RSETA, stated that the W&RSETA had appointed four different CFOs in the past two years, accounting for massive instability in the SETA’s financial matters. However, the SETA had achieved 7.7% increase in revenue for 2018/19. The SETA was not proud, however, of the 17% increase in expenditure, for which 11% was accounted for by salaries of the overall workforce. The W&RSETA had received a qualified audit opinion.
The Chair commented that the W&RSETA had presented a horrible report and requested that the names of everyone who was part of the previous board be forwarded in writing to him in the course of the week.
Mining Qualifications Authority (MQA) 2018/19 Annual Report
Mr David Msiza, MQA Board Chairperson, informed the Committee that the MQA was to present an unqualified audit report which the organization claimed was mainly aided by the commodity prices over the financial year. The MQA was looking into making mining environments safer for employees and in 2018/19 had achieved a record as the safest year. Although fatalities had not been reduced to zero, the MQA was working towards ensuring zero harm in the new financial year. A major highlight for 2018/19 had been the integration of more women in the mining sector. The MQA had experienced cases of fund mismanagement and possible fraud, all of which were under investigation. The details of the investigation outcomes would be forwarded to the Committee at the earliest convenience.
Mr Bethuel Nemagovhani, Acting MQA CEO, stated that the MQA had achieved 81% of its key performance indicators and was presenting an unqualified audit report. The MQA had funded lecturers and had attained several distinguished awards as its main priority was to get more learners into the business space by helping them acquire and enhance their entrepreneurial skills.
MQA was focusing on getting more youth to be job creators in the sector and thus the youth empowerment target was achieved by 134%. The bursary target had been achieved by 104%, thanks to the aid of some employers who co-funded their students and potential future employees. MQA took pride in its skills development projects and noted the one based in Ekhurhuleni.
Mr Mfundo Mdingi, MQA CFO, said that MQA had achieved a 2% increase in revenue, translating to R119 million more revenue in 2018/19. MQA had closed 2018/19 with a surplus of R204 million that remained unspent. The major contributor to administrative costs was salaries of employees which accounted for 63% of the costs; however, no bonuses had been paid out to board members to ensure that MQA first acquires a stable financial structure. Irregular expenditure in 2018/19 financial year was R23 000, a decrease from the R18 million that had been recorded in the previous financial year. On potential fraud and corruption, Mr Mdingi assured the Committee that investigations were underway and MQA was looking into ensuring all who are found guilty, reimburse the funds. MQA was looking to achieving a clean audit in 2019/20.
Transport Education and Training Authority (TETA) 2018/19 Annual Report
Ms Nomagcisa Tsipa-Sipoyo, TETA Board Chairperson, stated that TETA was to present to the Committee, an unqualified report in which the key highlight was that performance within TETA had increased from 54% to about 70% in 2018/19. TETA was looking into integrating more woman into the transport industry and was specifically focusing on getting woman into the taxi business and fund training interventions. TETA planned to assist the taxi industry to diversify its business offering as there was potential for more revenue generation. It was designing methods to industrialize it and integrate it into the to the main national transport system. TETA was working towards improving road safety and had been doing well on its safety campaigns.
Ms Maphefo Anno-Frempong, CEO: TETA, pointed to the large number of stakeholders that had been assisted in Limpopo province. In 2018/19, TETA had achieved a record 74% of its KPIs, rendering it the opportunity to present the first unqualified audit report to the Committee since 2016. Projects were being carried out in the maritime and aerospace divisions of the SETA and were reflecting good progress; however she emphasised that to this day, South Africa has harbours with ships coming in and out although the country itself does not own a merchant ship. It was for this reason that TETA was looking at methods that would move the country towards possessing ships of its own.
Mr Simon Ndukwana, CFO: TETA, stated that the SETA had observed a steady rise in revenue over 2018/19 despite delays and penalties that it had acquired from SARS. It had received only R338 million as opposed to the calculated budget of R348 million as a result. TETA ended up incurring liabilities to the value of R72 million. However, TETA still managed to obtain an unqualified audit report and was working towards achieving a clean audit for 2019/20.
The Chairperson revealed his shock at the W&RSETA presentation and requested the Committee be forwarded the names of all previous board members at the earliest convenience, to which W&RSETA agreed.
Ms J Mananiso (ANC) asked if TETA had challenges with human capital management as it could do better in acquiring skilled personnel for jobs that require skills. She asked about the existence of programmes aimed at women development and empowerment. TETA was asked how it was planning to tackle and reduce gender based violence, to ensure a safe working space for all.
Ms Mananiso asked W&RSETA why did it seemed as though the Western Cape and Gauteng were the only provinces gaining major benefits from the SETA. What was being done to further the SETA's agenda across all provinces?
Ms Mananiso requested that MQA should give reports that reflected the real amounts instead of just percentages, to give a better understanding. Clarity on some figures was requested as the presentation seemed to contradict the Annual Report.
Ms Mananiso asked the SETAs to enlighten the Committee on special projects they were engaged in.
Ms D Sibiya (ANC) asked for the number of provinces that TETA was active in. MQA was asked about wasteful expenditure and more information on the ongoing investigations. W&RSETA was asked why it had employed unskilled people and the number of unskilled people employed. Clarity was requested on numbers in the presentation that did not match the figures in the Annual Report.
Dr W Boshoff (FF+) asked W&RSETA about those projects said to have been closed, did the closing mean the projects were just suspended or were they completely shut down? He did not understand why people were not applying to these SETAs because they are designed to help them. People should take note of the qualified W&RSETA audit report and the events that led to it. People say it the Members of Parliament who steal money, meanwhile, it is the entities that claim to be organisations for the people.
Mr B Nodada (DA) requested that W&RSETA ensure a speedy finalization of the forensic reports and investigations to ensure that those accountable be held responsible. W&RSETA was asked which institutions had had their lecturers trained and he requested the number of those lecturers trained. He asked the MQA how far the investigation under the Hawks was and what was MQA doing to ensure that past mistakes are not repeated.
Mr Nodada said that the MQA should provide the actual number of learners trained, how many succeeded and indicate the completion rate to allow the Committee a better understanding of its performance.
Mr Nodada asked TETA if it had any programmes that were going to integrate digital technology into the sector, so as to improve efficiency and competitiveness on an international scale. Were there programmes in place for learners to acquire relevant digital technology skills that could be utilized in the sector?
Mr P Keetse (EFF) welcomed the reports and said to the Committee that for the three reports presented, it was important to look into their Annual Reports and take a deeper analysis to ensure there were no exaggerated costs. He warned about audits that were unqualified yet purchased items were overpriced but accepted because it did not exceed the advertised retail price.
He asked W&RSETA who was responsible for appointing the board. Addressing all three SETAs, he said they should focus on consequence management as all money lost through inappropriate fraudulent means, had to be paid back. All the SETAs were advised to hold high moral standards in serving the people. The board members present should expect to be held accountable for their actions or inaction.
Mr B Yabo (ANC) stated that the taxi industry was worth R50 billion and would help grow the mandate of the TETA if it was to be strategically integrated into the TETA programmes, first through the provision of training to youth who are interested in entering the field. He encouraged TETA to work towards a clean audit. He asked if transformation was surfacing within the maritime sector. He requested the demographics reflecting the progress made in the aerospace industry.
Mr Yabo asked MQA to work towards ensuring zero fatalities in the mining industry because one life was one too many. It was also requested to work towards shutting down the small informal mining operations popularly known as the ‘Zama Zama’ and arrange a programme to develop skills for youth interested in small scale mining as this would be a much more organized form of mining as opposed to the life-endangering Zama Zama schemes. MQA was asked how it managed to achieve certain targets with a record 1050%.
Mr Yabo addressed W&RSETA stating that it should work towards serving the South African people and not the pockets of its board members. Accountability for all activities had to be enforced because the SETA's report was not impressive. He encouraged W&RSETA to restructure and rework their methods to ensure complete success.
Mr Letsie (ANC) requested W&RSETA submit the forensic reports as soon as they were made available. He said the SETA should stop sugar coating the presentation, such as the irregular expenditure said to have been reduced from R87 million to R12 million. He encouraged it to come up with a turnaround strategy to fix the mess that had been created by its previous board. W&RSETA was asked how it ended up having fruitless and wasteful expenditure to the value of R287 million. How was it planning to recover this?
Mr Letsie asked why TETA, to date, had no plan for the inclusion of the taxi industry in TETA projects. Hew requested TETA consider formalizing the industry.
Mr Letsie encourage the MQA to develop small scale mining courses that will encourage youth to get more involved in the mining sector and hence motivate the growth of small scale mining companies.
Ms N Mkhatshwa (ANC) stated that all three SETAs should work towards balancing gender distribution and ensure that all citizens are catered for and afforded equal opportunities.
Mr S Ngcobo (DA) suggested the learner support graphics from MQA seemed to be inconsistent and projecting contradicting information. Good performance from MQA and TETA were applauded and all three SETAs were encouraged to work towards attaining clean audits. TETA was encouraged put more emphasis on its maritime projects and improve its interaction with the sector.
The Chair requested TETA elaborate on its strategy for improving its supply chain management (SCM) and to share its strategies in ensuring accountability and attaining a clean audit. The W&RSETA was asked about the progress in the forensic investigations. He highlighted the complaint to the Public Protector that W&RSETA senior management were getting higher salaries than necessary – this was a cause for concern for the Committee. He asked if it had followed up and investigated the R12.5 million irregular expenditure.
The MQA was applauded for good performance and encouraged to work towards attaining a clean audit; however, clarity was requested on how its irregular expenditure was acquired.
Ms Yvonne Mbane, W&RSETA Chairperson, responded about consequence management, that it had cut bonuses for the executive and the board so as to encourage a culture of accountability. She stated that SCM was the weakest link and this was affecting the SETA. On the complaint to the Public Protector, an extension had been granted to the SETA to compose and submit an appropriate response.
Mr Tom Mkhwanazi, W&RSETA CEO, replied that most, and not all, employees were semi skilled and were being trained to acquire new skills. Special projects were to be incorporated in the new financial year and the Committee would be made aware of them. The fruitless and wasteful expenditure of R287 000 was under investigation as some employees were implicated. The irregular expenditure of R6.5 million was accounted for as irregular expenditure and involved the supply chain where there were major failures in management. Some people continued working while contracts had expired and some individuals were appointed to positions that did not exist. The forensic report was due on 15 November 2019 and implicated 70 employees.
Mr Lwazi Khuse, W&RSETA CFO, stated that part of the irregular expenditure was for funded projects that were implemented in previous years. As the focus was shifted to clean-up; most of the 2018/19 targets could not be met. The surplus funds were thus being rolled over into the next financial year and it was working toward a cleaner audit.
Mr Sindiso Malaku, W&RSETA Acting COO, added that they had managed to reduce the negative audit findings from 50 to 31 and this was an indicator that the SETA was moving in the right direction.
Mr David Msiza, MQA Chairperson, reported that woman were being targeted and victimized within the mines, and for this reason, the MQA was looking to creating safe and more conducive spaces for accommodation of all miners without discrimination. Further, there was a programme to give women personal protective clothing (PPC) that had been designed specifically for women as previously everyone was given the same gear, regardless of gender. On investigations, matters had been referred to the Hawks for further scrutiny and to ensure that MQA would not experience any further fraudulent activity.
Mr Bethuel Nemagovhani, Acting MQA CEO, clarified that the irregular expenditure had been reduced from R18 million to R23 000 – this value had been mistaken for R23 million by the Committee member. Reporting on special projects, MQA had initiated a new project called Khumbula'ekaya which is designed to ensure that a safe transport mode arrangement for employees to ensure they get home safe to the love and joy of their families, families for whom they work so hard.
Ms Nomagcisa Tsipa-Sipoyo, TETA Chairperson, replied that the TETA was working towards developing women to give them skills within the taxi business. TETA was also working towards formalizing the taxi industry and thus improving service delivery for commuters. Although this task was projected to have potential challenges, TETA would work towards achieving that as one of its future targets. A series of external moderations was to be carried out through the new financial year, to minimize the mismanagement of funds within TETA. It was important to note, however, that TETA could only empower those individuals who showed potential and were already uplifting themselves. Thus, TETA had structured its empowerment programmes such that an individual would have to contribute a certain amount towards the business to be undertaken and TETA would provide another 20% of that amount as aid.
Mr Simon Ndukwana, TETA CFO, reiterated the need for South Africa to acquire its own ships given that it had ports and harbours that were functional but did not possess a single merchant ship of its own. Thus, TETA would work toward getting South Africa to own its ships and hence improve its finances through better management of imported and exported goods.
The Chair encouraged the SETAs to go back and revise their strategies to ensure that they benefit the people of the country at large and not just the few who hold positions in the executive.
The meeting was adjourned.
- Whole and Retail SETA, Mining Qualifications Authority & TETA 2018/19 Annual Reports; Higher Education BRRR 1
- Whole and Retail SETA, Mining Qualifications Authority & TETA 2018/19 Annual Reports; Higher Education BRRR 2
- Whole and Retail SETA, Mining Qualifications Authority & TETA 2018/19 Annual Reports; Higher Education BRRR 3
Mapulane, Mr MP
Boshoff, Dr WJ
Keetse, Mr PP
Letsie, Mr WT
Mananiso, Ms JS
Mkhatshwa, Ms NT
Ngcobo, Mr S
Nodada, Mr BB
Sibiya, Ms DP
Yabo, Mr BS
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