Agriculture SETA, Construction SETA & Services SETA 2018/19 Annual Reports
Higher Education, Science and Innovation
30 October 2019
Chairperson: Mr M Mapulane (ANC)
The Committee met to consider the annual performance reports of three Sector Education and Training Authorities (SETAs) – the Agriculture (Agri-SETA), Construction (CETA) and Services (SSETA).
The Agri-SETA said it would focus on shifting economic development to rural areas and invest in skills development initiatives in rural areas to reduce the phenomena of urban bias. The institution would also respond to the weak linkages between higher education institutions and workplaces, as well as ensuring that young people attained relevant skills to be work-ready. It cautioned, however, that there was potential for a food security crisis, and in order to respond to this, there should be an increase in the number of emerging commercial farmers in South Africa, as there were currently too few to meet the demands of a growing population
The Construction SETA said that the construction sector was the only sector that was declining at an accelerated rate, and this affected its ability to achieve its mandate. At the peak of the construction boom in 2009, the sector was valued at R300 billion. In 2019, the sector was valued at R200 billion. The sector was not stable, as it operated on a fixed term basis, as and when projects were available. It was largely informal and unregulated, and was characterised by many people who did not have qualifications.
The Services SETA said its operations involved six sectors and 16 sub-sectors, thereby covering 18% of South Africa’s economy. This made it the biggest SETA in South Africa, emphasising its importance in terms of its impact on skills development. It said there needed to be more focus on learning interventions for people living with disabilities, youths and people living in rural areas. Despite the fact that a greater number of learning interventions were being allocated to youth, the SSETA was aware that a lot more still needed to be done to curb youth unemployment.
The Committee Members were not satisfied with the performance of all three SETAs. The general theme throughout the audit report outcomes were findings of irregular expenditure, and that there was little to no consequence management. The Construction SETA had been the only one to receive a clean audit outcome, but Members questioned how this had happened when the Auditor General of South Africa (AGSA) had subsequently confirmed that it could not audit approximately R11 million of contracts awarded because the CETA had submitted incomplete information about these contracts.
The Committee agreed that the CEO of the CETA would be summoned to Parliament after he had failed to make himself available for this meeting, as members of the board had expressed concern over issues of maladministration at the entity.
The Chairperson opened the meeting by acknowledging that the South African economy was not performing well, and he attributed this to the following factors:
- The high rise in the unemployment rate, combined with insufficient job creation;
- The high debt to gross domestic product (GDP) ratio;
- The bail-out of state-owned enterprises -- Eskom and the South African Broadcasting Corporation (SABC), with Transnet to follow; and
- The allocated budget for national expenditure was high, while the South African Revenue Service (SARS) collected an insufficient amount of taxes to cover national expenses.
Agricultural Sector Education and Training Authority (Agri-SETA): Annual Report
Mr Christo van der Rheede, Chairperson: Agri-SETA, presented a broad overview of the role of Agri-SETA, its governance framework, accountability mechanisms and the composition of its board and committees. Agri-SETA’s board was appointed by the Minister of Higher Education, after the institution had gone through a period of turmoil. The composition of the board was representative, as it included members from organised labour, organised employers, government and community organisations. Since the appointment of new board members, the board had established various committees that were intended to improve the running of the entity. These committees included the accounting authority executive committee, the audit and risk committee, the governance and strategy committee, the finance and remuneration committee and the grants and assurance committee. Since the inception of these committees, Agri-SETA’s board had been stable, and the institution’s performance had improved over the years.
Mr Van der Rheede took Members through the priorities of Agri-SETA and outlined some of the challenges faced by the institution. Given its challenges, it would focus on addressing skills shortages in the agricultural sector, in line with the Industrial Policy Action Plan (IPAP), the New Growth Path (NGP) and the National Development Plan (NDP). It would also focus on shifting economic development to rural areas and invest in skills development initiatives in rural areas to reduce the phenomena of urban bias. The institution would also respond to the weak linkages between higher education institutions and workplaces, as well as ensuring that young people attain relevant skills to be work-ready.
Agri-SETA would continue to respond to skills shortages in artisanal, technical, and professional skills, which were deemed important for economic growth and development. It would also prioritise food security, agricultural development objectives, the fourth industrial revolution, land reform and restitution, black farmer development and partnerships with government departments and agricultural value chains. He referred Committee members to the national distribution of poverty in South Africa and illustrated how predominantly rural and poor areas in South Africa had an abundance of water, which presented opportunities for agricultural development.
Mr Van der Rheede described the agricultural landscape of South Africa, mentioning that 1.75 million households in South African were subsistence farmers. Approximately 200 000 farmers were small scale farmers, and approximately 35 000 were commercial farmers. In terms of turnover, 27 828 farmers had a turnover of between R2.5 million and R5 million, while 4 436 farmers had a turnover of between R14 million and R20 million. A further 2 325 farmers had a turnover of over R20 million. Combined, these farmers contribute R500 million to the National Agricultural Marketing Council. He cautioned, however, that there was potential for a food security crisis, and in order to respond to this, there should be an increase in the number of emerging commercial farmers in South Africa. He argued that there were too few commercial farmers to meet the demands of a growing population.
Agri-SETA needed to adapt to the fourth industrial revolution. It had to find innovative solutions to respond to the dumping of imported foods into South Africa, as this prevented emerging farmers -- particularly black farmers -- from competing in the market.
Mr Zenzele Myeza, Chief Executive Officer (CEO): Agri-SETA, presented the report on the entity’s financial performance. Its new vision would focus on driving productivity; improving systems of governance, controls, compliance, and risk management; recruiting suitable managers and capacitating human resources; and driving research, monitoring and evaluation. Research, monitoring and evaluation would be used to gauge organisational performance.
He took the Committee through Agri-SETA’s levy contributions, and highlighted that there 22 861 employers registered with the SARS, 7 194 levy income contributors, and 1 807 work-space participants. Agri-SETA had prioritised research for various occupations, such as crop-production workers, food and beverage factory workers, farm maintenance workers, agricultural farm managers, harvesters, crop and livestock farm workers, agricultural scientists, horticultural farmers, millwrights, and sales and marketing managers.
He described how the National Skills Development Strategy (NSDS) was implemented at Agri-SETA, and how it had not achieved its key performance indicator (KPI) targets for 2018/19. It had set 80 KPIs, but had achieved only 45. It had four programmes -- Skills Planning and Research, which performed at 91%, Learning Programmes and Projects, which performed at 90%, Quality Assurance, which performed 61%, and Administration which performed at 85%.
Mr Myeza briefly took Members through Agri-SETA’s figures on the employment and unemployment of learners’ targets, and presented a comparison of what was targeted and what had been achieved for the 2018/19 financial year. He also presented Agri-SETA’s employment equity status at the executive management, middle management, skilled and unskilled levels for the 2018/19 financial year. He said that it was representative in terms of race and gender equity.
Agri-SETA had developed strategies to enhance its performance. It intended to strengthen monitoring and evaluation and improve its KPIs by incentivising good project implementation and by allocating more resources to contractors, encouraging agricultural colleges to support Recognition of Prior Learning (RPL), and implementing projects with contractors that had a good track record with the Agri-SETA. A monitoring and evaluation tool would be used to monitor the project implementation of contractors. Agri-SETA would use its R26 million mandatory grant allocation more efficiently for purposes of skills development. It would also increase its human resources, particularly in its finance department, as it had decided to no longer make use of outsourced financial services. The positions of CEO, Chief Financial Officer (CFO) and Chief Information Officer (CIO), and other positions, had been filled in 2018.
Ms Mogau Sebela, CFO, confirmed that Agri-SETA had received an unqualified audit opinion on its audit findings, which had been conducted by an external auditor. She attributed the unqualified audit opinion to poor contract management in the 2018/19 financial year. There were several contracts that had been terminated due to non-performance and the irregular awarding of contracts. This had resulted in Agri-SETA having to remove the funds spent on these contracts off its financial records. Despite this, she felt that it had improved its marketing management, pay-roll management, financial management and the disbursement of mandatory grants. The decision not to outsource its financial services had assisted the institution significantly.
She took the Committee through Agri-SETA’s revenue collection for the 2018/19 financial year and reveled that its Skills Development Levy (SDL) penalties and interest had decreased from R14 million in 2018, to R7.7 million in 2019. Its income had grown from R391.2 million in 2018, to R425.1 million in 2019. Its interest on investment had also increased from R27.7 million in 2018, to R32.2 million in 2019, which would be used to increase expenditure on grant disbursements. 81% of Agri-SETA’s revenue was spent on its core mandate, which was employer grants (discretionary and mandatory grant disbursements).
The Skills Development Act framework stipulated how much money must be allocated to expenditure on different grants. Agri-SETA spent below the regulated amount of 20% for mandatory grants (14,6%), which was attributable to challenges with the Workplace Skills Plan (WSP) and the Annual Training Report (ATR), which were not fully compliant, resulting in some beneficiaries not being paid. It had spent beyond the regulated amount of 49.5% for discretionary grant projects (53.4%, but below the regulated amount of 10.5% for administration expenditure (9,1%).
Cash, and cash equivalents, had increased from R462 million in 2018 to R523 million in 2019. 85% of its discretionary reserves had been spent on contracts, although R77.9 million (14.9%) of these contracts had been terminated due to non-performance and poor performance. A large proportion of its mandatory and discretionary grants was spent on learnerships, amounting to R122.3 million. Others programmes, such as Adult Education and Training (AET) and skills programmes received over R35 million each; bursaries, mentorships and artisan development received just over R20 million each; and internships, graduate placements, commodity organisations and new venture creation programmes received less than R20 million each.
Construction Education and Training Authority (CETA): Annual Report
Mr Webster Mfebe, Board member: CETA, said the CEO could not avail himself for the meeting, despite having told him that he would be available. He expressed his disappointment and felt that he was being “thrown under the bus” by the CEO, but would try his best to present as truthfully as possible. He would like to dedicate time in his presentation to focus specifically on the CETA’s challenges and irregular expenditure.
He attributed its challenges to South Africa’s poor economic performance. He argued that the construction sector was the only sector that was declining at an accelerated rate, and this affected CETA’s ability to achieve its mandate. At the peak of the construction boom in 2009, the sector was valued at R300 billion. In 2019, the sector was valued at R200 billion. He commented that the construction sector was not stable, as it operated on a fixed term basis, as and when projects were available. It was largely informal and unregulated, and was characterised by many people who did not have qualifications. In response to this, the CETA was considering the Recognition of Prior Learning (RPL). However, among those who were skilled, many had opted for careers in different sectors such as banking, which offered stable employment and attractive employee benefits.
Despite its challenges, the institution had received consecutive clean audits from the Auditor General (AG) for the past three financial years. In addition to this, the CETA had achieved a validated quarterly performance report as per the Department of Higher Education and Training compliance calendar for 2018/19. It had also achieved 31 out of 34 indicators, obtaining an overall 91% performance against its annual targets.
It had achieved beyond its set targets for the number of learners involved in learnership, apprenticeship, or short skills programmes, bursaries, internships, graduate placements and candidacy programmes. In terms of the number of unemployed learners, the CETA had targeted 9 816 and achieved 26 097 learners. In terms of employed learners, it had targeted 500 learners and achieved 1 294. The CETA had also achieved beyond its targets for the number of learners who had completed its various programmes. It had targeted 5 959 unemployed learners and achieved 13 478. Regarding the employed learners who completed the programmes, 144 learners were targeted and 1 319 had completed them.
Mr Mfebe said that 36 out of 50 technical and vocational education and training (TVET) colleges were accredited. R269.8 million had been allocated to the colleges, which would benefit 6 866 learners.
The CETA had hosted a summit on small, micro and medium enterprises (SMMEs) in March 2019, which had outlined its five-year plan. The summit had outlined the current landscape of SMMEs within the construction sector, understanding what could inhibit the growth of SMMEs in the construction sector; and had highlighted themes such as transformation and skills development.
The CETA currently supported 2 317 students with bursary funding.
The Workplace Skills Plan (WSP) and Annual Training Reports (ATR) by employers were now submitted, and since 2016/17 to 2018/19, there had been an increase in the number of audited WSPs and ATRs.
The CETA was nominated to become the Assessment Quality Partner (AQP) for various National Certificate occupational qualifications in the construction sector. It was also nominated by the construction sector to become the AQP for three construction-related qualifications, namely civil engineering (structure, roads and services), flooring installer and construction roadworks.
Mr Mfebe said that 322 accreditation site audits had been conducted, 153 monitoring and evaluation visits were conducted, 511 training providers were accredited by the CETA as at 31 March 2018, and it had participated in 30 career exhibitions. It had also engaged in flagship projects, including international placement programmes, artisanal development, RPL, the establishment and construction of skills development centres, and the Thapelo Madibeng Bursary Scheme.
It had offices located in all nine provinces of South Africa, and this included skills development centres in the most rural areas of the country.
The CETA had irregular expenditure in the 2018/19 financial year. This was caused by the unauthorised upward adjustment of salaries, which had bloated its wage bill. This irregular expenditure had resulted in litigation between the CETA and employees represented by labour unions. The SETA sought to recover monies from the unauthorised salary adjustments, by declaratory order. It was also in the process of issuing a summons to the CEO, who oversaw these payments. Disciplinary action had been taken against four senior employees at the CETA who had implemented the unauthorised instructions of the CEO. The CETA would also investigate the alleged forgery of the CEO’s signature on four letters, after the CEO had denied signing documents that would authorise the adjustment of salaries.
Mr Mfebe described the seriousness of this matter and recalled several meetings where labour unions had disrupted board meetings, carrying knobkerries, sjamboks and tyres. The CEO had been advised by the Board to report this matter to the South African Police Service (SAPS), and be issued with a case number. The Board was considering submitting this investigation to the Office of Serious Economic Crimes and the National Prosecuting Authority (NPA), and emphasised that had the Board not intervened in time, the CETA would have lost more the R12 million.
He suggested that the CETA needed to deal with three aspects of this issue. Firstly, it needed to be stabilised to deal with its mandate and restore governance. Employer and employee relations had to be mended, after salary packages had been increased by almost 40%. He acknowledged the urgency of this matter -- it was reported that an employee had committed suicide as a result of these events. The legal implications involved looking at issues of dishonesty, forgery, maladministration and conflict of interest, and would for instance require the CEO to recuse himself in order to allow the investigations to take place without his interference.
Ms Velile Ndlovu, Chief Financial Officer, reported on the irregular expenditure in the procurement processes of the CETA. An amount of R412 160 of irregular expenditure had been incurred due to a contravention of supply chain management (SCM) legislation. A supplier had been awarded a contract with CETA that required it to have the correct certification from a Microsoft Certified Partner, but it had later been discovered that the company had submitted certification that was not signed and approved by Microsoft. As the awarding of this contract constituted irregular expenditure, the CETA had investigated the matter to identify the person responsible in order to apply consequence management. Further irregular expenditure of R67.3 million was incurred because it had exceeded its allocated budget and failed to request the executive authority for approval to amend the budget prior to it being exceeded.
Services SETA (SSETA): 2018/19 Audited Annual Performance Results
Ms Amanda Buzo-Gqoboka, CEO: SSETA, said the board was made up of seven men and seven women, and she believed it was diverse, representative and stable.
The SSETA covered six sectors and 16 sub-sectors, thereby covering 18% of South Africa’s economy. This made it the biggest SETA in South Africa. She emphasised its importance in terms of its impact on skills development in the various sectors it covers.
The results of the audit outcomes indicated that the institution’s performance for administration, skills planning, and quality management was 100%, while learning interventions had achieved a 96% rating.
Ms Buzo-Gqoboka referred to the achievements against transformational imperatives of SETA-funded learning interventions, and said that there needed to be more focus on learning interventions for people living with disabilities, youths and people living in rural areas. Despite the fact that a greater number of learning interventions were allocated to youth, compared to people living with disabilities and people in rural areas, the SSETA was aware that a lot more still needed to be done to curb youth unemployment.
The Committee was told that the SSETA invests in its workers’ professional development and wellbeing through training and development programmes and improved working conditions. The employment equity profile was progressive, due to the entity’s investment in the development of workers.
Ms Buzo-Gqoboka acknowledged that the SSETA had received a qualified audit, but insisted that its senior management and the board were working tirelessly to prevent this audit outcome in the next financial year. She attributed the audit outcome to disclosure notes, which were a result of exceeding the allocated budget for the 2018/19 financial year. The root causes of this were due to record management systems that were administered manually, an increase in training rates, and the restatement of expired contracts from the previous year. It had consulted the AGSA, on ways in which it could improve its audit outcomes, and had submitted an action plan to the Minister of Higher Education and Training.
Key milestones of the 2018/19 reporting period included SSETA obtaining a 97% achievement rate on its annual performance plan targets -- an improvement from 81% in the 2017/18 financial year. It had improved its research operations, which were used to inform it on future jobs at the other SETAs. It had conducted studies on new venture creation, skills demand forecasting, and the funeral and hairdressing sectors.
The SSETA had supported skills development programmes for 100 non-governmental organisations (NGOs), four trade unions and 862 small businesses, including cooperatives. A total of 4 143 bursaries had been awarded to learners. There had been an improvement, with 41 264 certificates being printed in 2018/19. She emphasised the need for efficient printing of certificates, because learners relied on them when seeking employment.
The SSETA had registered 817 moderators, compared to 475 in the 2017/18 financial year, and had also registered 2 274 constituent assessors and moderators -- a 50% increase from the previous year.
It had provided technical assistance to employer companies after 4 228 WSPs and ATRs had been submitted. A total of 31 226 learners had been enrolled and 19 939 learners had completed the programmes.
It had partnered with TVET colleges and tribal authorities to establish skills centres in rural areas. To date, 15 skills development centres and seven rural development projects had been established.
Ms Buzo-Gqoboka referred to some of the challenges experienced by the organisation. The 2018/19 staff labour action had resulted in negative publicity in the media. Confidential information had been leaked as a result. The Quality Council for Trades and Occupations (QCTO) transitional arrangements had included accreditation changes, deregistration of certain qualifications and the merging of Standard Industrial Classification (SIC) codes. She also mentioned the AGSA’s qualified audit opinion and the temporary employer relief scheme.
Looking ahead, she said SSETA was working on the automation and digitisation of its website, after complaints from learners that it did not work.
Mr Tsheola Matsebe, CFO took Members through the organisation’s financial performance. Total revenue had grown by 3% to R1.745 billion, and while expenditure had declined by 3% to R2.457 billion, this meant there had been a deficit amounting to R711 million in the 2018/19 financial year.
Irregular expenditure of R832 million was related to actual expenditure exceeding the initial budget approved by Minister of Higher Education and Training by R17 million. Discussions were under way with the DHET, AGSA and National Treasury (NT) for further clarification. There was no fruitless and wasteful expenditure.
The Chairperson expressed his appreciation for the various SETA’s presentations, but said he was disappointed with the CEO of the CETA, who had submitted an apology letter the day before the meeting, stating that he had to attend a court hearing involving the entity’s irregular expenditure. He questioned the reason, and said that his apology to excuse himself from the meeting was too late. He had had enough time to reschedule and meet with the Committee at an appropriate time. The CEO was the accounting authority of the CETA, and the plethora of the allegations presented against him placed him at the centre of many issues at the entity. His assessment was that the CEO did not want to account before the Committee and Parliament, and he deemed it unacceptable.
The Chairperson read a passage from the National Skills Authority report, which detailed several allegations against the Chairperson of the Board and the CEO of the CETA. He said he had received a letter from the National Education, Health and Allied Workers Union (NEHAWU) that had also expressed similar allegations against the CEO. He suggested that the CEO must be summoned to Parliament.
He questioned the clean audit outcome of the CETA, despite the fact that the institution had irregular expenditure on the payment of employees, and R412 160 involved in procurement processes. He had queried its clean audit outcomes with the AGSA, which had confirmed that it could not audit approximately R11 million of contracts awarded, because the CETA had submitted incomplete information about these contracts.
Ms J Mananiso (ANC) agreed with the Chairperson’s proposal that the CEO must be summoned to account to the Committee. She commended Mr Mfebe for telling the Committee what was happening at the entity.
She questioned the exceeded targets of the Agri-SETA, and asked whether the institution would expand its offices to other provinces that did not have offices. She asked why Ms Pholoana remained a member of the board, when she hardly attends board meetings. Did the fraud and corruption toll-free line work? She queried why the toll-free line had not been added to the report.
Mr Van der Rheede said that the Minister of Higher Education and Training appointed board members. He confirmed that the board member, Ms Anna Pholoana, had attended only two board meetings because she was a recent appointee.
Ms Mananiso asked for clarity on what “unskilled” meant, and asked whether the term could be adapted to respond to the pressures of the fourth industrial revolution. She asked about Agri-SETA’s expenditure management and wanted to know why the institution was struggling to stay afloat. She argued that the Public Finance Management Act (PFMA) provided guidelines to assist government institutions to use funds appropriately.
What were the action plans for Agri-SETA, after the AGSA audit outcome?
She asked whether Agri-SETA had read the Public Protectors report on Agri-SETA, and which of the recommendations it would be implementing.
Mr B Nodada (DA) felt that there was a massive problem with consequence management related to the use and management of public funds. It was unacceptable for public institutions to want to be applauded for “almost” receiving an unqualified audit outcome. He asked the Services SETA about the R1.2 billion in irregular expenditure, and whether consequence management had been applied. He asked why there was a reluctance to apply consequence management, given that it had had irregular expenditure in the previous financial year
He asked why there were certification backlogs, when the certificates of learners had to be printed out timeously. Did the SSETA have a database of graduates, indicating those that had been placed and those that were not employed? How had it improved job creation, and what was the success rate of those who were funded by the SSETA?
He questioned Agri-SETA’s appointment of a CFO and a supply chain manager, considering that it had incurred irregular expenditure. He also supported the Chairperson’s suggestion to summon the CEO of the Construction SETA to account to the Committee. It was unacceptable that the CEO had sent an apology letter, knowing the grave allegations against him.
He asked what the success rate was of learners who were funded by the CETA, and what the reasons for the irregular expenditure were.
He asked about the Agri-SETA’s 61% achievement on quality assurance, and wanted to know how effective the internal audit risk process was. What was the success rate for interns and learnerships?
Mr S Ngcobo (DA) said the Construction SETA’s presentation had been depressing, but commended Mr Mfebe for telling the Committee about the challenges at the entity. He suspected that the various SETAs seemed like institutions that were vulnerable to looting.
He sought clarity on the TVET colleges’ national qualification framework (NQF) levels. He queried why the TVET college NQF level was 2, while the Matric NQF level was 4.
He asked the Services SETA what the reasons for the negative media publicity were. Why did it have a huge backlog on certificate printing? This was a big issue that needed proper accountability.
The Chairperson commented that the SETAs would explain more about the certification issues at a meeting scheduled for 5 November.
Dr W Boshoff (FF+) asked the Construction SETA and Agri-SETA why school leavers could be successful in Matric, yet struggle to find employment. He asked why the Matric qualification was not industry relevant, particularly for school leavers who would like to opt to enter the workforce after Matric. The Department of Basic Education (DBE) had mentioned that the Matric qualification was not meant to prepare learners for work, but to prepare them for further studies. Given this, he questioned what use agricultural and civil technology subjects were, if they were not accessible at all schools, particularly schools in a province like the Northern Cape, which was predominantly rural and agricultural. He also questioned why there were not enough TVET colleges in the Northern Cape that could cater for subjects relevant to the specific context of a province like the Northern Cape. He asked whether the SETA could not engage in partnerships with the DBE to supply workshops that could encourage learners to enrol for technical and agricultural subjects in provinces like the Northern Cape.
Mr P Keetse (EFF) agreed with the Chairperson’s suggestion that the CEO of the Construction SETA be summoned to Parliament.
He reflected on a societal assumption about Parliamentarians being corrupt, and said that even SETAs had proved that they were equally corrupt. He emphasised the need for consequence management, and said that those found guilty of corruption and maladministration of public funds must be arrested. He asked who was responsible of appointing board members, and felt that this was a grey area. At all the 21 SETAs in South Africa, there was a continuous flow of whistle-blowers who had revealed corrupt conduct and an abuse of power by senior management and board members. He asked why the Services SETA had not added the irregular expenditure of R250 million that had allegedly been reported by the National Skills Authority. He raised concern over how the various SETAs awarded bursaries to learners. He argued that the SETAs and the institutions of higher learning had been accused of colluding and inflating student fees.
He said that there were some SETA officials who had hired bodyguards, using state funds.
He asked Agri-SETA how the appropriation of land could accelerate development and opportunities, and requested that it provide evidence of studies conducted by institutions to back-up its claims.
Mr Van der Rheede replied that land appropriation should be used to develop emerging commercial farmers, because it was this sector of farming that could best produce large scale farming while promoting job creation.
Mr Keetse questioned what had happened when R77.9 million had been lost due to irregular expenditure on terminated contracts. He asked what progress had been made in linking TVET colleges with institutions of higher learning.
Mr W Letsie (ANC) also supported the Chairperson’s suggestion to summon the CEO of the CETA to Parliament, and added that there was a need for consequence management following the Agri-SETA’s failure to investigate irregular expenditure.
He asked why there was a difference in the reporting on the CETA’s irregular expenditure, where two figures -- R11.7 and R71 million – had been given. Which amount was correct. He raised serious concern about the reporting of the SSETA, and felt that the report lacked honesty.
He said R1.2 billion out R1.8 billion had been attributed to irregular expenditure by the Services SETA, yet there had been no consequence management. He questioned why Ms Buzo-Gqoboka believed it had received unfair negative media coverage, while R1.2 billion in irregular expenditure had been incurred by the entity. Why had it spent R20 million on advertising and R56 million on consulting fees? What was covered by these fees? He felt that the SSETA was underreporting its poor performance. He requested it to submit and present the findings from the forensic report that the Minister had instructed it to conduct.
He agreed with Mr Keetse’s statements regarding the submissions made by whistle-blowers on the inflation of fees and collusion of SETAs with institutions of higher education. He also questioned the use of private bodyguard services paid for with state funds, and sought clarity on how this decision was taken.
The Chairperson asked if anyone from the SETAs felt under threat.
Mr Robert Semenya, Acting CEO, CETA confirmed that he had been threatened and had reported this to the board. He said that this protective service had been offered for only three months.
When asked for the exact period when a private bodyguard service had been requested, the Acting CEO said he could not remember.
Mr Keetse questioned how he could not recall when the bodyguard services were hired.
Members of the CETA board confirmed that a bodyguard had been hired for the Acting CEO, and this had occurred during NEHAWU’s labour action. The Acting CEO had been called during a board meeting, and he had placed the call on a loudspeaker to allow members to hear the threats.
The Chairperson asked if the threats were on-going, and if other members of the board had bodyguards. It was confirmed that no other board members had bodyguards.
The Chairperson confirmed that Parliament would exercise its right to submit a summons to the CEO of the Construction SETA.
The Chairperson asked Agri-SETA why one of its board members did not have a qualification with an institution of higher learning. The Committee would like to have a meeting with that board member. He asked why it had not followed correct procedures for supply chain management and procurement, and why it had not investigated the irregular expenditure of previous financial years, as per the PFMA requirements.
The Chairperson asked whether the Services SETA chairperson had received the National Skills Authority report. He was concerned with the allegations levelled against the chairperson, and asked for her response to the report’s findings.
He referred to a national motel and a national skills development centre that had ben built in Kokstad. The initial budget for the motel had been R250 million, was later increased to R320 million. The accounting authority had mentioned to him that there was a letter from the Minister of Higher Education and Training which had requested the board to increase the budget. However, the board had not been given the letter requesting this increase. This had been done a few months before the end of the financial year -- also, after the tender process had been concluded. He said this amounted to manipulating the budget allocation for projects, and warranted further investigation. The National Skills Authority report had found that there was a trend with the Services SETA to adjust budgets a few months before the end of the financial year.
The Chairperson also asked the chairperson of the board to respond to allegations levelled against her, on how she had secured provincial offices at almost double the price of the market value. Various other allegations against the chairperson referred to unilateral decision-making to the exclusion of other noard members. The National Skills Authority report had made recommendations to the Minister of Higher Education and Training for the chairperson of the board to be removed, on condition that the findings were true.
Dr Marinkie Madiope, SSETA chairperson, responded that she had resolved these allegations with the Minister of Higher Education.
The Chairperson said that he found the chairperson’s response disingenuous in her response, and encouraged her to tell the Committee the truth.
He requested all SETAs to submit their responses in writing within seven days of the meeting. The Construction SETA would be invited to a separate meeting in the following week.
The meeting was adjourned.
Mapulane, Mr MP
Boshoff, Dr WJ
Keetse, Mr PP
Letsie, Mr WT
Mananiso, Ms JS
Ngcobo, Mr S
Nodada, Mr BB
Sibiya, Ms DP
Yabo, Mr BS
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