Sector Education and Training Authorities: briefings

Meeting report

LABOUR PORTFOLIO COMMITTEE
10 August 2004
SECTOR EDUCATION AND TRAINING AUTHORITIES: BRIEFINGS

Chairperson: Ms O Kasienyane (ANC)

Documents handed out:
Sector Education and Training Authorities (SETAs)
Draft Committee Programme, May to November 2004
Department of Labour Presentation
Banking SETA submission
Education, Training and Development Practices SETA submission
Secondary Agriculture
Information Systems, Electronics and Telecommunications Technologies SETA submission
Local Government, Water and Related Services SETA submission
Construction SETA submission
Wholesale & Retail SETA submission
Clothing, Textiles, Footwear and Leather SETA submission
Forest Industries SETA submission
SETA Websites

SUMMARY
The Department and the SETAs acknowledged intermittent occurrences of mismanagement, corruption and poor service delivery. It was not currently policy for the Auditor-General to qualify SETA annual reports.

Transformation had been variously successful except in the uptake of women of learnerships. Female representation at top levels of management was low in both SETAs and business organisations. Service providers were by and large failing to reach rural areas. Some SETA representatives reported difficulties in absorbing previously disadvantaged learners.

Difficulties were experienced in getting companies to reclaim levy payments to SETAs, which was resulting in surplus funds at the SETAs. In other cases, surplus funds of the SETAs could not be satisfactorily explained. A few SETAs made requests to the Department for more funding.

Due to increasingly tight time constraints, Members minimised their discussion and some reporting SETAs did not field any questions from the Committee.

MINUTES

Department of Labour briefing
The Department delegation consisted of Mr S Morotoba, Senior Executive Manager: SETA Co-ordination; Mr Ngwenya, Mr Manhlope and Mr H Tshabalala.

Mr Morotoba said that media coverage of the SETAs had been misleading. The Department would ensure that criteria for evaluating performance were universally understood among people in the Department, SETA management structures, the media and the public. Quantitative and qualitative results needed to be reconciled immediately. They would ensure that, in future, the Auditor-General's annual reports on the SETAs were unqualified. The Department wanted the SETAs' compromises between quantitative and qualitative results to be resolved by the start of the 2005-9 timeframe.

Mr Morotoba commended the National Skills Development Strategy (NSDS), which had generally reached its targets leading up to 2005. He praised the various institutions participating in the SETA programmes that had contributed resources and funds to the Department. In September, the Minister would unveil plans for the Department and the SETAs, who had by now made all necessary adjustments to their 2001-5 strategies. The Minister would be addressing negative media coverage of specific SETAs. He asked Members to consult the Department's annual report and the SETA annual reports, coming at the end of September, and 29 August respectively.

Mr Morotoba noted that the final impact of the NSDS and SETAs was a complex matter. It was important to regard these initiatives as 'means' and not 'ends'. The evaluating of ends was a continuous process for government departments, and public and private institutions, for which this Department could not be held accountable.

Discussion
Mr S Rasmeni (ANC) asked for clarification over the role of the Department in providing services to the nation.

Mr Morotoba replied that the Department responded to mandates from the Director General. Primarily the Department advised and policed SETAs on policy-making and handling of funds, and facilitated information to stakeholders so that they knew which SETAs to engage.

Mr Rasmeni asked whether the Department only reported information provided to it by the SETAs or whether it had its own monitoring systems in place.

Mr Morotoba replied that the Department used a variety of whistle blowers, and it had a procedure of validating information it received from SETAs. It had to sort genuine from non-genuine complaints lodged by the public. The Department held the SETA Boards accountable for their funds.

Mr R Henderson (DA) asked how many SETAs had qualified reports. He was concerned about SETAs operating public funds without proper watchdog authorities overseeing them. How was the Department policing SETA finances?

Mr Morotoba said that SETAs were governed by the Public Finance Management Act (PMFA). The Department had received 22 of 25 SETA audits, and not one had been qualified. However, through the Directorate of Public Entities plans were being made to standardise the oversight of Public Funds.

BANKSETA submission
The BANKSETA delegation consisted of Mr F Groenewald, CEO; Mr B Venter, Chairperson, Organised Labour; Mr S Ngidi, Organised Business and Director of Human Resources at Standard Bank; and Mr S Molefe, Marketing Manager.

Mr Groenewald emphasised learnerships as an area of focus, with R45 million budgeted for the Letsema learnership project in 2004/5. This project aimed 'to place 5000 unemployed individuals on learnerships over a three year period.' Mr Groenewald reported that transformation was up to speed except for black female learnerships, which were presently below target.

He said that the BANKSETA was managed by a Council in terms of the PFMA. It had received four unqualified annual reports.

A major task of the BANKSETA was to reconcile its cash and accruals bookkeeping. Its current method had run into problems with SARS, whose retroactive adjustments have been made as far back as the 2000 levy year.

Discussion
Prince N Zulu (IFP) asked how the report had been able to claim a 9% decrease of white employees in the Banking Sector. Would this statistic not encourage further emigration out of the country?

Mr Venter replied that this statistic had come from the Finance Sector. The BANKSETA had not been mandated to target this result. Mr Ngidi responded that it was a consequence of legislation, which affected representation of other groups in the sector.

Mr O Mogale (ANC) noted that Micro-lenders were reputedly unethical. He asked whether the SETAs Micro Finance training programmes contributed to this. Mr Groenewald said the issue was the responsibility of BANKSETA. It would use its regulatory component, the Micro Finance Council, to close down Micro Lenders where necessary.

Mr Rasmeni asked whether underused funds could be shifted to 'strategic project accounts.' He noted that certain communities had not heard of the BANKSETA and asked what it was doing to market itself to these communities.

Mr Groenewald replied that underused funds did not lie dormant. They were injected into Learnerships wherever possible. BANKSETA was presently operational in five provinces. Stakeholders and businesses had delivered talks at Universities and schools and several outreach programmes were used to access remote communities.

Mr Rasmeni asked how BANKSETA learnerships embraced Black Economic Empowerment (BEE) and employment equity initiatives. Mr T Anthony (ANC) asked if BEE results were measured in the BANKSETAs Banking Charter.

Mr Groenewald said that demand in the Banking Sector for skilled, historically disadvantaged persons would continue to be high. He added that 90% of industry contracts in the Micro Financing industry had been awarded to small black owned enterprises. R45 million had been budgeted to the Letsema Project, which aimed 'to place 5 000 unemployed individuals on learnerships over a three-year period.'

Mr Mogale asked if BANKSETA was associated to any of the recent bad press reports. He asked if the composition of the Board reflected transformation.

Mr Groenewald replied that the Minister had rated BANKSETA very highly. At the moment, the Board comprised only one woman, but two would be sitting at the next Board meeting. Mr Ngidi noted that not enough candidates in the Banking sector were available who were both qualified to sit on the Board and who fitted appropriate race/gender dispensations.

Ms Ngcengwane asked Mr Groenewald to elaborate on the five provinces he had mentioned.

Mr Groenewald replied that learnerships were available in the KwaZulu Natal; Free State; Western Cape; Eastern Cape and Gauteng provinces, while training for Micro Financiers and Entrepreneurs was available to all nine provinces.

Mr Anthony asked if progress had been made in providing scarce skills.

Mr Groenewald answered that identification of scarce skills led to their implementation. For example, the Letsema Project had directly sought out scarce skills and then derived initiatives to access these skills.

The Chairperson asked Mr Groenewald to explain what type of people came to the BANKSETA; and what were their needs.

Mr Groenewald said that often people approached the SETA wanting specific training products not used by them. If the said products existed with other SETAs, then BANKSETA advised them where to go. He said the BANKSETA had shared Occupational Health and Money Laundering products with other SETAs.

Education, Training and Development Practices (ETDP) SETA submission
The delegation consisted of Ms N Nxesi, CEO; Mr A Mathebula, Quality Assurance Manager and Mr T Thejane, Strategic Support Unit.

Ms Nxesi explained how the SETA had underestimated its role at times, and so nearly 10% of its workforce was part-time. There had been 'bottlenecks' in the disbursement of skills development grants and under expenditure remained a problem for the ETDP SETA. A major challenge was to absorb more young women into the learnerships.

Mr Nxesi reported a shortage of accredited training providers to rural areas, particularly the Eastern Cape.

Discussion
Mr Rasmeni expressed his concern at the under expenditure of grants. He asked about the progress of the Integrated Sustainable Rural Development Programme (ISRDP). He asked whether Science and Maths was adequately provided to previously disadvantaged learners. What solution was being offered for the lack of service providers to rural areas?

Ms Nxesi responded that the ISRDP had so far visited 21 districts. In June the Department and the ETDP had devised a national strategy for Maths, Science and Technology learnerships. Universities and Colleges would be procured to broaden the strategy.

Mr Mathebula replied that unspent funds had been committed to service providers. Many service providers had failed to reclaim their expenditures from the ETDP. After the submission of the annual report at the end of September, a six-month window period would be allowed in which they could reclaim.

The Chairperson asked Ms Nxesi to elaborate on organisational development.

Ms Nxesi replied that rural institutions did not have adequate marketing skills. In some areas language barriers impeded registration of learners to Recognition of Prior Learning (RPL). By working with other SETAs the EDTP hoped to improve organisational infrastructure.

Mr Godi asked for an explanation of the spread of service providers throughout the country.

Mr Mathebula said the Northern Cape had produced the least amount of learners, and the Gauteng Province had produced the highest (48%). He attributed this to the variance in socio-economic structures across the provinces. He added that the EDTP had accessed areas defined by the Presidential Nodal Zones.

Ms Ngcengwane voiced her concern at the reluctance of enterprises to buy into hosting learnerships. She said that the lack of black service providers indicated by the report was not acceptable. Could financially strong provinces not share skills with other provinces, she asked.

Ms Nxesi replied that they needed to devise a strategy to accredit service providers in rural areas. In the formal education sector learnerships were expensive to run. She said it might be a matter of redirecting funds. The Isivumbo Youth Fund was attending to out of school youths in the rural areas. Projects to create user-friendly services for disabled persons had been tabled.

Mr Rasmeni asked the Department and the SETAs to explain how they were contributing to the Expanded Public Works Programme (EPW).

Mr Morotoba said that the Department of Labour had central control over funds going out to the EPW. The South African Qualifications Act was hampering accreditation of service providers to rural areas.

Ms Nxesi said that efforts were being made to integrate community-based projects with special projects.

SETA for Secondary Agriculture (SETASA) submission
The delegation consisted of Mr S Fredericks, Education Training Quality Assurance; Mr M Magide; and Mr L Hansen, Chairperson. The presentation reported an unqualified audit for the 2003/4 financial year.

Mr Fredericks said that the biggest problem facing the SETA was inadequate staffing and dysfunctional governance structures. The presentation reported surplus funds. Adverts had been put in newspapers and district circulars inviting farmers and small enterprises to apply for discretionary grants. Mr Fredericks mentioned the SETASA dispute with the Food and Allied Workers Union.

Discussion
Mr Mogale asked how the Public Finance Management Act affected the work of the SETA. He asked why there was such a large surplus of funds. Did the problem lie in disbursing these funds, or was the budget too large for the SETA? Was there a difference in the goals of the Department to those of SETASA?

Mr Fredericks replied that the SETA was audited in terms of the PFMA. It had a co-operative relationship with the Department. The SETA met on a quarterly basis with the Department to review its progresses.

Mr Fredericks said that SETASA had erred on the side of caution in disbursing surplus funds because of the risks involved. He assured Members that the surpluses would be allocated on completion of a risk analysis, and that SETASA was capable of handling all its funds.

Mr Mogale asked if there was mismanagement within the SETA. What was the function of the board and why had it appointed a CEO without consulting all board members, he asked.

Mr Magide replied that the SETASA Board had been divided and this had disrupted operations. It was hoped that Members would help to clear certain complications that had resulted from it.

Mr Hansen explained that the CEO election had been deemed fair by members of the board. He expressed disappointment at allegations of mismanagement. There had been one isolated incident last year, but it was now in the hands of the Scorpions.

Mr Anthony asked for an explanation of the FAWU dispute. Did Board members have business interests in the SETA, as indicated by the dispute? Mr Hansen replied that the issue had been cleared and did not require an explanation. He said SETASA wished now to distance itself from FAWU.

Mr Rasmeni asked what successes had come about in supporting small farmers who fell under the Land Redistribution Programme.

Mr Fredericks responded that farmers were not specifically the responsibility of this SETA, but rather the SETA for Primary Agriculture. Mr Morotoba added that the Minister was awaiting advice over the division of the agricultural SETAs.

Information Systems Electronics and Telecommunications Technologies (ISETT) SETA)submission
Mr O Mopaki, CEO, pointed out poor black representation at top levels of management in the IT sector. There were a sufficient number of BSc graduates in the sector to fill these positions. He dismissed the commonly held notion that the uptake of learners had to sacrifice quantity in favour of quality. Learnerships in the public domain were there for the taking, he stated. Mr Mopaki said that companies drove learnerships. Although the ISETT SETA had developed training programmes, it could not provide experiential training for learners.

Local Government Water and Related Services (LGW) SETA submission
The delegation consisted of Mr S Nkosi, CEO; Mr W Sita, Deputy Chairperson and Mr S Jappie, Provincial Manager.

Mr Nkosi emphasised said that the various shortcomings and inefficiencies of the SETA were a thing of the past. Stakeholder confidence had been restored and despite initial setbacks, goals were being achieved.

Mr Nkosi noted that in some instances the quantity of beneficiaries had had to be sacrificed to uphold the quality of those services.

Construction SETA (CETA) submission
The delegation consisted of T Dlamini, CEO; Ian Holmes, Deputy Chairperson and Nadius Malope.

The report showed surpluses of funds. Mr Dlamini welcomed the advice of Members regarding these surpluses. He emphasised the problem facing the SETA of reaching rural areas with accredited training providers.

Mr Dlamini said that communication between CETA and construction companies was sometimes poor, and needed to be improved. The CETA had not yet found an efficient mechanism for absorbing students from previously disadvantaged communities.

Discussion
Mr T Doduvu (ANC) asked CETA how they planned to improve matriculation rates in rural areas. He said the SETAs appeared to deliver their products in a very loose manner. Did the SETAs make room to absorb 'struggling learners'? What career guidance was being provided to these learners?

Mr Nkosi replied that Local Government needed to decentralise as much as possible in order to access remote areas. Plans were underway to monitor and report on the progress of Provincial Offices, whose sole jurisdiction was the rural district.

Mr Dlamini responded to Mr Doduvu that in the CETA there were 6 standing committees catering for the provinces. It was trying not to eliminate non-matriculants from its learnerships. The CETA was currently looking for a way to bridge the gap between its own training programmes and those provided by employers.

Mr Godi expressed his concern at the emphases on quality instead of quantity of learners. He expressed his outrage over CETA reports of low company participation in the NSDS.

The Chairperson asked Mr Dlamini what effect the AIDS pandemic was having on skills shortages in the country. She asked what happened to learners in the CETA who were injured during their training period.

Mr Holmes responded that the impact of AIDS was particularly severe on the construction sector. Injuries were the responsibility of the Training Providers or the Employers, depending on where the injuries were sustained.

Wholesale and Retail (W&R) SETA submission
The delegation consisted of Mr J Digkole CEO and Professor M Mehl, Chairperson of Organised Business.

Mr Digkole said that levies received had not matched payments made to the SETA. It had experienced difficulties in getting SMMEs to reclaim levy payments. The primary challenge of the new financial year was to fast track disbursements of funds.

Clothing, Textiles, Footwear and Leather (CTFL) SETA submission
The delegation consisted of Dr H Rasool, CEO; Mr G Van Zyl, Chairperson and Mr A Kriel, Vice Chairperson,

Dr Rasool noted that this SETA had a small budget to work with (only R60 million in funds). The Sector had been suffering from import competition. Hence learners were not being offered experiential training He asked the Department to provide funding to the value of 885 learners, with the guarantee that these learners would be in practical training programmes by March next year

Dr Rasool explained that restrictive legislation over accreditation had impeded small companies wishing to participate in the SETA programmes. He asked the Department to look into lessening this factor.

Forest Industries Education and Training Authorities (FIETA) submission
The delegation consisted of Mr D Weston, CEO; H Mistry and B Lewis, Senior Managers in FIETA Administration.

Mr Weston reported a lack of female representation in the sector. The FIETA board constituted only males. He recalled a 2001 fraud case within the SETA that had resulted in a conviction, for which, from a corporate governance perspective, the SETA could be very proud of itself. An outstanding challenge to the FIETA was a high illiteracy rate among Sector employees and learners.

Discussion
Mrs Moss referred to a meeting with the Department two months ago, in which a point had been raised about companies not knowing to which SETA to pay their levies. Had there been any improvement on this issue? It appeared from the presentations today that particularly SMMEs were still getting stuck on this.

Mr Morotoba replied that companies who did not know where to register should approach the Department of Labour to be advised accordingly.

The Chairperson asked Mr Weston how FIETA had managed to achieve Growth and Development Summit targets. She said she wanted to see female representation increased in all departments of the FIETA, including the Board.

Mr Weston replied that it had achieved those targets by making incentives available for training providers.

The Chairperson suggested that the Department make provision to award more funds to the SETAs.

The meeting was adjourned.