Implementation of Ministerial Task Team recommendations on the NSF & Nexus Forensic Report; Audit Action Plan Update; with Deputy Minister

Meeting report

Opening remarks
Mr W Letsie (ANC) commented that the Committee had received the presentation from the Department the previous night at 19:43, which hampered its ability to properly and thoroughly prepare for the current meeting. He asked that, in future, presentations be received in good time. The Committee usually received presentations the Friday before the Wednesday meeting.

The Chairperson said his concern was duly noted. The presentation should have been received on 8 March 2023 for a meeting that was then postponed, so the documents should have been ready.

Deputy Minister opening remarks
Deputy Minister Buti Manamela said he was aware the Committee had received the report late last night. This was raised with the DG and officials. The Committee was aware that the National Skills Fund (NSF) audit report outcome indicated a misappropriation of funds. On the agenda of Parliament for some time were the matters Parliament and the Department had been engaged with since early 2021: the audit findings and the process the Minister had initiated to probe the challenges that the NSF faced at the time. Some officials were placed on leave, including the then DG, CEO and CFO of the NSF. A task team was appointed and the Minister initiated a forensic investigation to investigate the challenges of the NSF. This led to the Nexus Forensic Report and the Ministerial Task Team (MTT) report was handed over to the Minister. Senior officials involved had their employment with the Department terminated. The current meeting intended to give the Committee a sense of the actions taken to ensure the implementation of the MTT report recommendations, the forensic report recommendations and the NSF audit action plan. The DG and the Department would brief the Committee on these three components needed to turn around the NSF. The Minister had appointed an acting CEO and instituted measures to effect a turnaround in the NSF. There had been some improvement in the financial management of the NSF, but not to the satisfaction of the Committee. The Department was confident that the NSF could be turned around with the implementation of the two reports and the audit action plan.

Since receiving the forensic report, the Department has made several representations to the Standing Committee on Public Accounts (SCOPA). The DG has also had interactions with the SIU and the Hawks who were investigating this matter.

NSF Report
Dr Nkosinathi Sishi, Director-General, DHET, reported, followed by Mr David Mabusela, Acting CEO of NSF.

Implementation of the MTT Report

• Since 26 October 2022, when the NSF Task Team had been tabled, the Department has reported on implementing recommendations.
• To date, the NSF Executive Committee has constituted the NSF Task Team committee which established four streams to give effect to the recommendations of the Ministerial Task Team. These four implementation streams are: Governance stream; Business Model, Operating Model and Value Chain stream; Strategy, Innovation and Organisational Performance stream; Human Resources stream; Change Management stream.
• To date, the Governance stream has set out stream activities to: Confirm and finalise the National Treasury conditions on NSF as a Schedule 3A Entity; Legislative processes on the NSF to exist as a juristic person; Development of the NSF Constitution/Charter. These are long term outcomes with a timeline of 31 March 2024
• To date, the Business Model, Operating Model and Value Chain streams have set out stream activities to: Consult with all NSF units on the operating model; Identify any gaps within the model between current unit operations and proposed operating model; Address any gaps through the revision of or development of Standard Operating Procedures (SOPs); Collect as-is Business Processes (BPs) and identify gaps that may exist, then consolidate into the NSF value chain; Consultation and adoption process.
• These are short to medium term outcomes with a timeline of 30 November 2023.
• To date, the Strategy, Innovation and Organisational Performance stream has set out stream activities to: Establishment the Research, Planning and M&E Committee; Develop an NSF M&E framework; Conduct strategic engagement and review the NSF Research and Labour Market Intelligence in conjunction with DHET – Part of Research Agenda of NSF; Approve NSF Research Agenda (as aligned to DHET and PSET including NSA to reduce duplication); Adopt the proposed strategic priorities recommended by the MTT; Undertake research on catalytic mandate concept; Undertake research and policy regarding legislative and policy mandates; Utilise research to inform the revision of the NSF theory of change (Mandate, Vision, Mission, Outcomes, and Outputs and Impact statement) linked to 2025/2030 SP period commencing in January 2024 planning cycle; Reconfigure the NSF Information Communication Technology (ICT) environment and infrastructure.
• These are medium to long term outcomes with a timeline of 31 March 2024.
• To date, the Human Resource stream has set out stream activities to: Establish as a juristic person to effect section 197 of the Labour Relations Act; Consult with organised labour on the process of transfer of the NSF function from DHET to the NSF as Schedule 3A entity; Effect transfers of staff from DHET to NSF as an independent Schedule 3A entity by issuing contracts of employment to all NSF staff; Review recommended organisational structure with existing approved NSF structure to identify gaps/additional posts recommended per unit.; Review NSF organisational structure, approve and adopt new structure for implementation; Develop job profiles for recommended new posts aligned to business processes and SOPs per unit; Advertise additional/new posts as per recommendations and alignment with work study outcomes, and as per new approved organisational structure; Recruit to new/additional posts; Establish a fully functional self-sufficient HRM directorate.
• These are medium to long term outcomes with a timeline of 31 March 2024.
• To date, the Change Management stream has set out stream activities to: Draft a communication and consultation plan for internal NSF staff related to changes resulting from MTT report implementation; Draft a communication and consultation plan for stakeholders and partners related to changes in the NSF resulting from MTT report implementation.

Implementation of the Forensic Report Recommendations:

• Upon the finalisation of the SCM processes bringing in the NEXUS forensic firm (who carried out the inspections in loco), as a lead evidence witness, the disciplinary session will start before the end of March 2023.
• The Director-General had engagements with the Special Investigating Unit (SIU), presided over by Advocate Andy Mothibi. The last engagement was on 14 February 2023, when the scope of engagement on the NSF was discussed.
• Further discussions were arranged between the Director-General and Adv Mothibi (SIU) to finalise document exchanges and investigate procedural matters.
• The Directorate for Priority Crime Investigation (HAWKS) held the initial session with the NSF Acting Executive Officer on 08 December 2022. Subsequently, an affidavit mapping out the full value chain of skills development funding processes was composed.
• The NSF-HAWKS documentation exchange process will be initiated by the HAWKS once their system is ready.
• The scope of the HAWKS investigation is on the ten selected projects arising from the forensic report.

Audit Action Plan:

• Chief Financial Officer was appointed and assumed duty on 01 November 2022.
• Director: Fund Management was appointed and assumed duty on 01 October 2022.
• Director: Information Communication and Technology was appointed and assumed duty on 03 January 2023.
• Director: Financial Planning and Reporting interviews scheduled before end of March 2023.
• Director: Financial Administration has been advertised.
• Director: Work Integrated Learning has been advertised.
• Director: Organisational Strategy has been advertised.
• Findings on the financial reporting within the GRAP standards (accruals, infrastructure assets, trades and receivables, deferred expenditure, provisions and prior period errors): Application of the GRAP standards are carried out as advised by the AGSA in the treatment of financial transactions and accounts allocation. Invoice capturing and reconciliation are done on a monthly basis and variances are corrected timeously. Completed journals are subjected to internal audit review and adjustment carried out where discrepancies are identified. Review of financial workbooks is continuously carried out before financial statements are adjusted. SETA levy payment records are now accessed from the Skills Branch to reconcile the NSF portion of revenue (> R500K levy payment threshold).
• Findings on institutional performance information (limitation of scope due to lack of usefulness, misstatements, completeness, non-response to RFIs and COAFs and inadequate IT control environment): Internal mechanisms have been established to review the Strategic Plan (SP), Annual Performance Plan (APP) and Technical Indicator Descriptors (TID). SP revised and tabled at Parliament. APP indicators and targets aligned the revised SP. Poorly defined TID redefined. Performance information review and validation framework established. Performance information management process flows have been developed. The Microsoft Dynamics IT system is gradually being deployed as a platform for a broader NSF MI system.
• Findings on skills development implementation (limitation of scope due to misstatements, no project expenditure records, absence of project files): Internal audit to continuously review prior year findings. Framework of supporting evidence for SDPs project portfolio information collection and storage was established and workshops were carried out internally with regional project managers. Consequence management was instituted on project managers who failed to reconcile project expenditure and implementation. TVET College completed infrastructure assets transferred to the respective TVET colleges. Central project record keeping established and new projects were boarded on MS Dynamics.
• Findings on governance, risk and compliance (treatment of irregular expenditure, misstatements from inadequate definition of toolkit): Internal audit determination tests are performed, seven projects have been commissioned for external audit investigation, and results are pending. Clear definition of a learner toolkit has been developed and implemented in the new projects. An NSF Risk Register separate from the DHET Risk Register has been developed.

[see PowerPoint presentation]

Discussion
The Chairperson thanked all the participants in the meeting for their presentation. She asked the colleagues to proofread all documents before they were tabled at meetings.

Slide 3 said there were four implementation streams, but she kept seeing five. The slide said there were the following streams: governance stream; business operating model and value-chain stream*; the strategy innovation and performance stream; human resource stream; and change management stream. That amounted to five streams. The slides also indicated there were five streams. She asked for clarity on that.

When the Committee last met, it said the timeline for implementing the recommendations from the entity report would be from 31 July 2023 - 30 June 2023. Part 1 of the presentation showed a timeline that varied from this year to next year. The latest was 31 March 2024 and the earliest was November 2023. She asked that Committee be sent a spreadsheet with the various activities under each stream with timeframes. The activities, target timelines and what is required to reach them should be listed.

On slide 9, it said “some used their legal services support”. Whose legal support did others use? She asked for the latest data for the vacancy rate, because the report indicated that since 8 March 2023 until the present, there was progress. One of her greatest principles was that when it came to skilling society, it was important to develop technical skills and value systems, ethical skills, etc. She wanted confidence that the human resource staff we are acquiring have the requisite ethical appreciation of the work being done. Criminals were smart. At this level of stealing from the state, those implicated knew exactly what they were doing. A linear outlook on technical skills would not help the country, and we need to ensure that those working for the country have an ethical appreciation of the country’s need to develop. She thought it was important for the sector to play a critical role in institutionalising that appreciation in the country’s institutions of higher learning. When curriculum reviews were undertaken, we must look at how qualifications incorporated ethical studies.

She asked for a breakdown of the timeframes for human resource planning. Slide 12 said the positions for the director of financial administration, director for WILL and director for organisational strategy were advertised. The Committee wanted to know on what dates these positions were advertised, when it would conclude applications, and when it would conduct the interviews. Parliament wanted clarity on all of these matters, with a breakdown of the plans with timeframes.

Dr W Boshoff (FF+) thanked the Chairperson. He welcomed the report. There was a lot of work in constituencies after Parliament went into recess. He had trouble thoroughly studying this report, but had listened attentively. The report struck him as a good diagnosis of problems. He had only come on to the Committee when he was elected in 2019, so he did not know what had happened before that. The NSF never gave presentations in which it said it would take funds from the skills development levy and do what it pleased with it. There had to be planning and indications of what would be attempted and done with the money. What guarantee do we have that it will work out this time around? The aspect mentioned by the presenter about people with the right ethical framework, who worked with huge sums of money, was key. He did not know the response he wanted, because the only thing his colleagues could say now was what they were going to do better this time around. There could be more to respond with; it would be good to be able to go back to one’s constituency and say it was not all bad news and that great strides were being made. At this stage, there were advertisements for several key posts, although the Committee did not have oversight of appointments, it would be good to be updated about appointments in key posts.

Ms D Sibiya (ANC) asked about the audit action plan update, and whether there were any outstanding areas on the audit action plan. When will they be addressed? Has the NSF ascertained compliance with the Auditor-General (AG)? On the recommendations and implementation of the forensic report, it was said the Director-General (DG) engaged with the Special Investigative Unit (SIU). Does it mean the disciplinary would be put on hold, until the Hawks report is submitted? What Hawks system is being awaited? What are the projected timelines of the disciplinary process?

Ms J Mananiso (ANC) echoed Mr W Letsie’s (ANC) sentiments about the need for improvements by the Department in ensuring the Committee received presentations on time. This allowed the Committee to fulfil its oversight duties and ensure it made proper and workable recommendations.

On the issue of filling 35 posts, can we get a breakdown of demographics, locations and qualifications? There were several questions on whether the NSF had a problem in identifying the required skilled personnel to drive the institution. She wanted specifics on those currently employed.

On the long-term outcomes of 31 March 2024, she noted the report provided short-to-medium-term outcomes planned for 13 November 2023. Can we get a detailed programme of action to indicate how many planned actions have been executed per plan? What was it doing about those actions planned, but not carried out? What will they do to ensure they implement the plan fully?

She was happy that the CEO had pointed out project management as one of the challenges. As a Committee, we need to obtain a detailed report on every Department’s organogram. In many institutions, people were employed at high levels without subordinates, which limited effectiveness and delivery. She therefore wanted specifics on the directors employed and how many subordinates they had in their directorates.

There was a lack of proper records. Can the Committee have a spreadsheet on the particular Department concerned? Who do they have? This was so the Committee could check its human capital fit-for-purpose. She liked what the Chairperson said about ‘tsotsis’ (criminals). It was about time we stopped just talking about corruption. This was especially so when dealing with critical institutions like the NSF. If our society did not have a proper functioning NSF, “triple challenges” would simply be a slogan. If the NSF got everything in order, we could speak about a better life for all as a reality. But while we deal with issues of maladministration, corruption, irregular expenditure, underspending etc., we will never achieve this. It is unfortunate that this comes back to us as the governing party. It is almost as if we do not have the appetite to deal with the people’s interests and ensure that we respond to the critical economic issues of the country. It was important things were not repeated and were dealt with.

On implementing the forensic report and those suspended, are those specific individuals still receiving their salaries? Who are those individuals receiving salaries? Who are those who are suspended without receiving salaries? She acknowledged that the simplified version of the presentation showed a commitment to dealing with many of the issues. Has the NSF ascertained compliance with performance indicators according to the AG and DPME*? From years 2021/2022, does this include the seven officials that were charged in the 35 out of 69 filled vacancies? How was the figure of 35 reached? What is the progress on the three advertised director posts? What is the timeframe as filling these posts is crucial in strengthening the NSF’s work? Are there any outstanding areas in the audit action plan? When will those specific issues be addressed? It was important that NSF got its house to move speedily to ensure it achieved what it was mandated to do.

Ms C King (DA) said a lot of developments had taken place since the Committee last met with the NSF. It was good to see it had tried to implement some of the recommendations. She commended the NSF on that. When the Committee last spoke with the NSF, there was mention of an NRF board that would be set up. She wanted to find out from the DG and CEO of NRF, how far it was in ensuring that the NRF could legally be seen as a separate entity with its own board managing its function to ensure there was no overlap or reliance on DHET for certain processes to occur. There was mention of possible tax evasion that occurred because of corruption. Were there discussions with SARS on this? This would ensure SARS also looked into the matter of the ten projects identified, to ensure no tax evasion took place. The Committee requested information about the costs incurred by the SIU – the engagement of a panel of attorneys, for instance – and others involved in the ongoing investigation. She wanted to see a full organogram to clearly indicate where the vacancies were located and the skills required for those vacant posts. Is there any legislative update when it comes to the accounting authority of NSF? The Committee knew the DG was the current accounting officer, but the previous DG was chastised for being the accounting officer of the NSF. This was a bone of contention in the Committee when she joined. She noted the filled vacancies. Research monitoring and evaluation were crucial. It should be an important department for the NSF moving forward. Under which directorate would this fall? Is there a unit set up for research monitoring and evaluation to deal with critical research matters?

On the Microsoft dynamic, IT* was to be gradually implemented. She saw this was taking place. Has other research been conducted on any ICT systems which could be used to develop the Department’s ICT’s capacity? This would also ensure proper digitisation with proper back-ups going forward. The NSF, National Skills Authority and the SITA had overlapping responsibilities and roles. She asked for a presentation on a plan to avoid the overlapping from derailing some functions in the NSF.

She did not see anything on proper risk management. Under which directorate would that fall? Would it fall under the finance department which is currently set up? Normally, risk would fall under that. The Committee has been given general timelines. What would better assist the Committee would be an itemised timeline. This would give the Committee a proper understanding of the NSF plan for its turnaround strategy. Her concern was that without an integrated skills strategy and framework, there would not be a properly aligned strategy on how the various skills strategies interlinked with each other for proper fund disbursements to occur.

Mr B Yabo (ANC) asked about the critical interventions being made to create failsafe systems on the governance model of the NSF. The Committee was dealing with a failure of governance, checks and balances, failsafe systems, frameworks and procedures. What is being done to create those failsafe systems, procedures and frameworks to avoid a repetition of what confronts the NSF? Has the NSF ascertained compliance with Generally Recognised Accounting Practices (GRAP) standards with the AG? Has the NSF ascertained compliance with performance indicator standards with the AG and DPME (Department of Performance Management and Evaluation)?

On implementing the recommendations on the forensic report, what was the anticipated timeframe for the investigation process? Some of the Ministerial Task Team streams depended on its outcomes for precedent and guidance while dealing with the legislative process for long-term outcomes based on their timelines. What does ‘undertaking research on a catalytic mandate concept’ mean in the Ministerial Task Team report? How will this research strengthen the strategy, innovation, and organisational performance stream? He wanted a brief explanation and to get the vision for the stream on the catalytic mandate concept.

Ms N Marchesi (DA) had problems with connectivity; she listened to everyone and was covered.

Mr Letsie said the Committee began discussing this issue around 2020, which led to the Minster appointing the Ministerial Task Team (MTT) on 1 September 2021. It was reported in a meeting of the Committee and the Department on 21 September 2022, that the MTT’s work on the review of the NSF was completed and presented to the Minister on 30 June 2022. The recommendations were scheduled to be implemented from 1 September 2022 - 30 June 2023. In about three months from now, the report said everything would be contextualised and implemented. However, the report gave a new deadline of November 2023. This was of concern, because it seemed like there was a moving target with the finalisation of this report. When the Deputy Minister spoke, he said there was dissatisfaction with the pace at which things were moving. He shared these sentiments, which the DG also repeated. He thanked the DG for apologising for the late presentation submission, as it hampered the Committee’s ability to do its job well.

On Ms King’s question about when the NSF would be established as a schedule 3(a) entity, the presentation said it was waiting for Treasury approval. He corrected Ms King by saying the DG was not an accounting officer, but was the NSF’s accounting authority. Based on that technicality, he did not want her good question to be missed. On 26 and 28 October last year, the NSF presentation informed the Committee that it would report the companies involved to SARS for possible blacklisting. Can they take us through how far they are with that? Have they started that process? How far is that process? If they have not, why not? It also reported that it would do lifestyle audits on officials on salary levels 9 and 10. Has this been done? How far are they? If not, why not?

On the issue of regional offices, which were established four to five years ago, how far are they in fully capacitating these regional offices? What is the cost to NSF of these offices? Are they being fully utilised? It also reported in the meeting on 26 or 28 October 2022, that there was a strained relationship between the NSF and the AG. How far are they in rebuilding that relationship? It also reported that the internal audit was also to be developed and consolidated and an audit action plan of the workshop held on 14 September 2022 was to be presented to the NSF audit committee for endorsement. How far are they with that?

The internal audit was reported on 26 October 2022 to assess the previous reports. The 2019/2020 and 2020/2021 management reports were meant to be assessed. He asked if the NSF could say how far it was with that. He saw it was mentioned but it was not clear. If any work has commenced or was completed, what is the timeframe? In that meeting, the Committee asked for information on all funded projects to date. The NSF asked for 30 days to produce the list. 30 days have passed, and it has now been five months. Can the NSF say how far it is and why it has not submitted this information?

In the meeting on 26 October 2022, the Deputy Minister reported that officials were implicated in the investigation reports. Those people were placed on precautionary suspension. How many officials are there? How much is NSF going to pay these people on suspension? It was indicated that these people were suspended with full pay. What progress has been made in the disciplinary cases of the suspended NSF officials? The presentation said NSF hoped the legal team would begin the process of disciplinary hearings in April. He asked to be taken through the timeline from 26 October 2022 till now. Why has there been a delay on this? We find that people were put on paid precautionary suspension and months later were still suspended with full pay. Some of these people were on full pay in an acting capacity, in posts which were not their substantive positions. The Committee wanted a thorough understanding of the delays in executing these things.

The CEO mentioned that members of the work streams were appointed. He asked the names of these members. Who are they? What expertise do they have? The Committee wanted to understand why these people were appointed. In September 2022, the Minister of Public Service and Administration responded to a written question in Parliament. It was noted that the DHET had precautionary suspension cases, costing the Department about R2.5 million. Can they confirm if this is true? If so, was the R2.5 million per month? How much has been paid to these suspended officials? He asked both the Department and NSF to ensure speedy finalisation of the disciplinary cases as these delays imposed a huge cost to government. It could not pay people for sitting at home while it dragged its feet on the process. He wanted the Department to quickly resolve these issues and asked for a breakdown of how much had been paid to the suspended officials to date. He asked if a workstream was dedicated to addressing the duplications and areas of overlap between NSF, Sector Education and Training Authority (SETAs) and the National Skills Authority. If there is a workstream, how far are they?

The Department was known for not meeting targets in resolving disciplinary cases. It was becoming notorious for taking a long time to meet its targets on disciplinary cases. He did not want to speak on the second and third quarter reports that the Committee recently received. He asked for this problem not to be transferred to NSF. NSF should finalise those cases as a matter of urgency. How long have these officials been on suspension? The deputy minister and CEO spoke about the work being done with the Hawks and that it awaited Hawks systems. What are these Hawks systems that you are waiting for? He wanted to understand so the Committee had an appreciation of why it was waiting for such a thing.

During its meetings on 26 and 28 October 2022, the Committee resolved that NSF and the Department would furnish it with the entity interim implementation plan while the actual implementation plan was developed to be submitted within 30 days. It expected this at the end of November 2022. He asked the NSF to submit a comprehensive audit action plan by the end of November 2022, including quarterly progress reports on implementing that specific plan. He also asked for a list of closed and active skills development projects. The DG committed to submitting the requested information. However, this information had not been received. It could not be business as usual for officials of the Department to come to the Committee, make commitments and not follow through. It could not continue. He wanted this to be the last time commitments were made in a meeting and not upheld. He asked that NSF give the Committee its detailed, implementation and audit action plans on how it would address those issues quarterly. Which recommendations have been implemented to date? He asked for recommendations other than those addressing capacity challenges, which he would refer to as low-hanging fruit.

He closed off with a few points. On the ten service providers reflected and the skills development projects identified for investigation, he advised that all projects be investigated, not just the ten. It looked like those ten were just the tip of the iceberg. Has the Department put processes in place to investigate the remaining funded skills development projects? If yes, how far are they? If not, why not?

The Chairperson thanked the Committee Members for the questions, comments and recommendations. The members acknowledged that a lot needed to be done and there was time pressure. She requested the Committee respect its meetings. These meetings were public, and citizens were watching. It was important to afford the public the requisite decorum. Committees were an extension of Parliament. When they did work, they had to return to the House and provide reports. Some Members did not sit in the Committee but made declarations on its reports. This happened because it did work on behalf of the 400 Members of Parliament. The 11 deployed to this Committee were working on behalf of all 400 Members. If there was a way to do this work collectively, it would, but it was not possible. She asked for the requisite decorum. She understood that there were issues of loadshedding and many things that Members tried to juggle at once, but she implored everyone to respect the times set for the meetings. Phones should be on silent. Members should open their cameras at least once in the meeting when they are going to speak. It was known there were loadshedding issues. In the House, nobody was expected to have their cameras on the entire time, so the Committee also did not expect this. She requested that colleagues respect these sittings. She mentioned the sentiments around the presentations being sent on time. What was difficult for this Committee was that it could not stick to a programme through and through. It was not in a stable sector, so it should consider responsive oversight. When there were protests, they should be briefed timeously. She was unhappy that the Committee did not receive an update on the situation at the University of Cape Town (UCT). When it went to Standing Committee on Public Accounts (SCOPA), the Department indicated that it would brief it on the NSF. The Committee thought this was acceptable, but asked for the report on UCT. This had not arrived. The Committee tried to be understanding, but in some cases, non-submission was unacceptable. Presentations should be completed and ready to be sent to the Committee in time. When information was requested from the Department this should be done. This should be done when follow-up documents were requested so the Committee could continue with the oversight work outside of meetings. If those documents did not come, then no respect was being shown to these platforms. If these platforms were respected, phones would be silent, and Members would not be in transit when making opening remarks. Information should be sent in on time and as requested. When invitations are sent, responses should be made. When letters were sent, colleagues should respond with letters. If people cannot attend a meeting, then they should explain why. The sector was massive and colleagues were doing a lot, which was understandable. It had 26 universities, 21 SETAs, 50 Technical and Vocational Education and Training (TVET) colleges, and nine Community Education and Training (CET) colleges with their centres. She asked for cooperative governance and an appreciation for this space. The space was not for the Committee; it was there to report to the people of South Africa. She thanked the participants in the meeting for comments, questions and recommendations.

Director-General response
The DG thanked the Chairperson and indicated that he struggled with network bandwidth. He asked for her permission not to use his camera at the moment. Ordinarily, he would ask his colleagues to tackle the questions and he would come in at the end, but he would start this time. Some of the questions asked were not on what had been prepared for today, but were more about further work and clarity that was required. DHET was happy to make that information available.

He started with Ms King’s input, as she commented and acknowledged the progress the Department made. Dr Boshoff referenced a lot of work done, and said it was a good diagnosis of the problems. It was very important. In a largely overworked team, many areas of excellence and dedication existed. He felt it would be misrepresenting the NSF and the Department if he did not give credit to his colleagues who worked really hard to get them to where they were today. It was clear that progress was visible. Equally, it was clear that a lot more work needed to be done which was an important balance it took from the views of the Committee. He indicated that the Chairperson also gave it credit in certain areas, whilst indicating she wanted to see the quality of its reports being aligned to the required decorum of such a Committee. He trusted that those omissions never sent an incorrect message, suggesting the civil servants in the Department would do anything less than show respect to the work of Parliament. The Minister and Deputy Minister would watch closely to ensure it improved where needed.

The nature of Mr Yabo’s questions was very strategic. There were many operational issues DHET was dealing with, but it should never lose sight of its target and the strategic levers that drove the system forward. He used the triple challenges as an example of the main focus of the Department and NSF. It reported specifically on the basis of what it was asked to account for. This did not mean they had nothing else to report on the fantastic work he saw daily in the Department. In most cases, people repeated the work they did. Clearly, some did not need to be part of the Department. This was a Department that would respect officials, public representatives and South Africa. It was a commitment he made.

On the requested documents, he was happy to audit what it committed to. Its records were not tallied. It believed it submitted as much as possible, but accepted that if the Committee said there were outstanding documents, it would definitely make those available as best it could. It continued to commit and ensure its commitments were fulfilled. This was the standard it held itself to.

The President appointed people who were amongst distinguished South Africans to assume the responsibility of the Presidential State-owned Council (PSEC). This was established to support government’s repositioning of state-owned enterprises (SOEs) as effective instruments of economic transformation and development. The President indicated that PSEC should strengthen the governance framework for SOEs. It should introduce and strengthen the framework and further develop an overarching Act governing all SOEs and determining an appropriate shareholder ownership model. This included the NSF. It wanted to ensure that the socioeconomic contribution and alignment to the national development agenda were considered and monitored closely. Where necessary, it could review its business models, capital structure and sources of financing for all its entities, including the NSF, and ensure the mitigation of risks. Mr David Mabusela (Chief Executive) said it had a dedicated NSF risk register separate from DHET. He was proud to confirm the decision made sometime last year had materialised into action. We could now explicitly indicate what the business risks were and what the business model was. We are reviewing that model to focus on critical interventions followed by systems and frameworks with clear procedures on how it would pursue those goals. This was encouraging. Mr Yabo advised that compliance should include not only its own frameworks, but GRAP standards and the unit responsible for monitoring and evaluation. Reports should show alignment of strategy and business models with the compliance issues comprehensively and across all areas. The anticipated timeframes for the forensic investigation were important. This would be tabled in its regular meetings with SIU and Hawks, because they were now responsible for taking these investigations further. The Hawks had been asked for a clear time frame because DHET was in a hurry to hold people accountable. The Committee spoke about the commitments to establishing the Department’s research mandate and asked for clarity on this. The planning branch of the Department hosts and coordinates the entire research agenda of the PSEC sector. It would like to present this work so the Committee could see its research priorities. Research chairs are appointed in the sector to drive programmes in the post-school education and training system, and other programs that drive the Ministry. These include the highly articulated system for dealing with skills development through community education and training, TVET, university programs and its SETA programs in all 21 areas. These areas included municipalities and traditional leaders across the country.

The mandate for training and development, which the NSF was responsible for, went beyond the colleges and a few universities. DHET was encouraged by this and would remain focussed on this to make a difference in this area. He thought this was crucial. In October last year, it convened a sector planning program.

NSF response
Mr Mabusela thanked the Chairperson and apologised for not turning his camera on, but he would try to do so. He would respond to the operational questions. He noted the concerns raised about grammatical weaknesses, punctuation, typos etc [in the presentation]. Proofreading was necessary and this would be addressed. He appreciated and agreed with the Chairperson’s decorum issues.

Regarding timelines, it was initially projected for 30 June 2023 as the full implementation of the report. When this was considered in greater detail, there was disagreement with some of the timelines set. Some of the targets could not be achieved within the initial timeline that was set. Changing legislation and the governance structure of the NSF could not be done within the given timeframe under normal circumstances. It dissected the full implications of the MTT report, which involved several stakeholders like the National Economic Development and Labour Council (NEDLAC) within the context of the Skills Development Act, which formed the basis on which the accounting authority drove the NSF. Those were the reasons for considering realistic alternative timeframes. Some of the things the MTT report recommended were ongoing but required fast-tracking. Those were categorised as short-to-medium term plans, e.g. filling vacancies, which could be pushed through within reasonable timeframes.

On the question of the IT infrastructure: within the provisions of the MTT, it would not have been possible to complete the Microsoft full deployment in the short term. Those were the reasons that prompted the reconsideration of timeframes. On the legal services provided to the officials that were charged, some of these officials were senior managers. Legislation dictated they were within their rights to have legal representation when they faced disciplinary cases within departments. Staff that fell below this management level were bound to internal processes with organised labour representation in resolving their disciplinary issues. Some of them responded with their support.

The request to get the latest data on the vacancy rate was noted. A question was asked about ethical considerations and how recruitment considered this. The recruitment done thus far involved vetting and then appointment. This process checked various forms of conduct.

NSF noted what the Committee required of it, which was the HR plan breakdown with timelines. Regarding GRAP standards, this was not an issue in the last audit. In the previous year's audit, the disclaimer appeared indicating that the AG discovered there was no compliance with the GRAP standards in treating infrastructure issues, accruals, etc. These issues were since resolved. The 2021/2022 audit was a better outcome than the previous year. On its relationship with the AGSA, there was a strain at some point, but things had improved. After the previous audit, a forum was established with the Office of the AG, which met bi-weekly during the audit process. This was to address issues that the AG wanted NFS to respond to or issues it did not respond to in terms of RFIs and COPS (unclear). That structure achieved a lot in conducting closer camaraderie between itself and the AG. The AG assisted NFS with an interim audit in the previous year and is currently doing so. In previous years, these were the issues that contributed to a strained relationship with the AG and academic argumentation about standards.

NFS noted a number of requests to supply information. Some of these are related to the shifting of the timelines and the need for greater detail, on the breakdown of organograms, on salaries of suspended officials etc. On the question of research monitoring, this function fell under the Strategy Innovation and Organisational Performance (SIOP) department within the new structure. On the question of whether Microsoft Dynamics was the only system used: it currently was. This software dates back four or five years. On the question of the overlap with SETAs, and Mr Yabo’s question about the catalytic mandate and the research element within the NSF: the catalytic mandate basically looks at NSF strategic interventions at given points in time within the skills development environment, which SETAs are not able to reach. The NSF’s posture must show readiness to intervene at all times. Within the MTT report recommendations, it needed to have an RMM unit which systematically pre-empts these things. If it studied the environment and assessed the labour market reports from various commissioned researchers, it would look at what it could learn and pre-empt some of these interventions. That was the basis of its catalytic mandate as a strategy. This meant it was intervening, as the NSF, without losing its identity. When it catalytically intervened, it did not want to find itself being like a SETA. It should intervene, but retain its unique nature as the NSF.

Risk management fell under the legal and compliance unit in terms of the MTT recommendations. NFS noted what was required for the MTT implementation plan: itemisation and presentation of timelines. On Mr Letsie’s questions on the MTT, shifting timelines, etc, he said NFS should chronicle all it has done to date. The critical thing to be noted by the Committee was that this report needed a critical direction for it to be properly implemented. The implementation plan would be forwarded to the Committee. It needed a deep dissection to meaningfully implement and address the issues facing the NSF. The lifestyle audit was a process that would unfold. Some of these processes were linked to the Hawks and the SIU investigation. These were the agencies that would unearth what needed to be done. In conducting civil liability, they would have to prove beyond doubt that there were people who lived beyond their ordinary income. The lifestyle audit was bigger than the NSF and needed intervention from Hawks and the SIU.

The internal audit function was critical. For NFS to have successful consequence management, its internal audit needed to do these determination tests. These tests involved prolonged periods of information gathering, investigations, interactions with SDP, and sometimes interactions with learners at training sites. All those processes may appear to be taking their time, but they involve numerous external processes. NFS had to establish solid grounds before it could convict. It could not risk committing resources without concrete outcomes.

On previous information requested, NFS would audit with the DG to see what was outstanding. On the Hawks system, they worked by collecting information first. NFS gave the Hawks access to the projects and all relevant source documents for the investigation. It had access to that cloud. The Hawks are studying the documentation in the Nexus forensic report. They also looked at a broader frame to see who fits where in the operational line function. It would closely examine and proceed from there. That was what it meant by the Hawks's systems.

On the addressed AG finding, he spoke about this when he mentioned the GRAP standards and the TVET infrastructure. The accruals were problematic in the previous audit and so were the provisions for the previous years and expenditure. Those related to the GRAP.

Closing remarks
The Chairperson thanked Mr Mabusela and asked the DG if he wanted to add anything.

The DG said he was covered but wished to go back to Ms Sibiya’s questions on its engagement with the SIU. He thought this question was covered and trusted it was satisfactorily responded to. We have provided progress on the criminal investigation done by the Hawks. Concerning internal departmental matters and the Department’s work with the independent panel, as SCOPA requested to engage with the SIU on civil-related issues that needed to be looked into, the Department was asked to comply, and provide documents and information, and it had done this. The issue now lies in the hands of law enforcement agencies.

The issue of compliance with GRAP standards, AGSA and DBSA was considered. On those who were suspended, suspension was not necessarily a sanction against those suspended. It merely meant that those who were suspended should not be in the workplace while the investigation was underway. The crux of the matter was when the charges against them were confirmed and recommendations of sanctions were provided by the independent panel, NFS would consider appropriate sanctions for non-compliance. He was happy to see credible names appearing on the independent panel.

He undertook to provide the Committee with details of those appointed. The demographics, locations, and qualifications would be included so the Committee had a sense of who was appointed. The Committee would be satisfied that it left no stone unturned to turn around the NFS. He said not all of Mr Letsie’s questions were responded to. He asked about the strained relations between AGSA and NSF. That was a thing of the past. The system no longer tolerated non-compliance and vilification of officials. The AG said he was happy with the cooperation received from the NSF.

The Chairperson thanked the DG and Mr Mabusela. She appreciated all the input in the meeting. She noted that someone from the office of the AGSA was present and asked if they wanted to speak or if they were observing, to which the individual indicated she was observing. The Chairperson appreciated the presence of AGSA in the meeting. It indicated that when the Committee said it would follow up on a matter, it would do so. The Zondo Commission explicitly asked where Parliament was when some of the issues around maladministration and poor governance surfaced. The Committee did not wish to be faulted on this. It should be located in the accountability ecosystem in how it tried to turn the tide.

She noted the responses received from the DG and Mr Mabusela on the questions Members asked. Implementation was key. The documents requested were important. She asked the DG to do the requested audit, working with the Committee secretariat on what information had been requested previously and was not submitted, and what information the Committee requested going forward. If there could be communication between the NSF, the Department and the Committee secretariat, that would be helpful. The Committee would continuously monitor the plans brought to it. It would soon be going into the process of considering performance plans of departments. This would provide an opportunity to engage further on some of the issues it was concerned about. It did not want to be seen to be embarking on a witch-hunt. Given the concerns it had around the NSF, it was important to have its finger on the pulse as a Committee. She asked for the information requested to be submitted within the next seven working days. Any delays needed to be communicated to the secretariat. The Committee was not unreasonable, but when information never came, it was deemed offensive.

She told the Committee it would have a meeting on Friday with the Department of Science and Innovation (DSI) on the quarterly report. It would also adopt minutes in that meeting. There could be a need for it to begin later than 09:00am and begin at 10:00am. She would be joining the Vhembe TVET College on its 60th anniversary.  

Meeting adjourned