MQA Annual Report 2004/05; CETA Annual Report 2004/05; & MAPPP SETA Annual Report 2004/05

Meeting report

LABOUR PORTFOLIO COMMITTEE
18 October 2005
MQA ANNUAL REPORT 2004/05; CETA ANNUAL REPORT 2004/05; AND MAPPP SETA ANNUAL REPORT 2004/05: BRIEFINGS

Chairperson:

MQA 2004/05 Annual Report PowerPoint Presentation
MQA 2004/05 Annual Report [available at www.mqa.org.za]
CETA 2004/05 Annual Report PowerPoint Presentation
CETA NSDS Success Barometer @ March 2005
CETA: Number of registered companies per sub sector
CETA 2004/05 Annual Report [available www.ceta.org.za]
MAPPP SETA 2004/05 Annual Report PowerPoint Presentation
MAPPP SETA 2004/05 Annual Report [available at http://home.intekom.com/mappp-seta/sitemap.htm]

SUMMARY
The Mining Qualifications Authority (MQA) delegation discussed the structure of the MQA and its strategic objectives. Following this, the delegation highlighted some of the MQA’s achievements. These included registering 2 070 learnerships and 3 494 apprentices; ensuring that 49 223 workers were in structured skills programmes; registering 2 086 assessors; training 720 people in indigenous jewellery production techniques; and providing training to 1 995 small-scale miners. It was noted that the MQA had received an unqualified audit report from the Auditor-General. The delegation then outlined the MQA’s 2004/05 financial statements. In 2004/05, the MQA had an income of R 332 050 000 and expenses of R 334 808 000. Most of the expenditure had been on skills development projects and employer grants. In the discussion that followed, Members asked how MQA’s bursary scheme operated; what kind of assistance it offered to the social plan beneficiaries; how it had addressed the poor response of employers to the Adult Basic Education Training (ABET) programme; whether the indigenous jewellery production training programme was still operational; whether graduates from the Executive Preparation Training Programme were being appointed as executives; whether any women had graduated from the Executive Preparation Training Programme; whether the MQA offered mineworkers safety training; and how the MQA marketed itself.

The Construction Education and Training Authority (CETA) delegation provided an overview of the construction sector and the CETA. They discussed the progress that CETA had made towards achieving the National Skills Development Strategy (NSDS) targets. Added to this, they highlighted some of their other achievements, which included implementing 4 070 learnership agreements; expanding its mentorship programme; and undertaking a gender specific training programme. The delegation noted that the CETA had received a qualified report from the Auditor-General because its Assets Register could not be reconciled with its accounting records. Following this, the delegation discussed the CETA’s 2004/05 financial statements. In 2004/05 CETA had an income of R 195 089 000. Most of this income had been received from the Skills Development Levy (SDL). CETA had spent R 230 464 000 during the year; most of which had been allocated to projects and skills development. The delegation then outlined the key challenges that CETA would face in 2005/06. Added to this, they requested the Committee’s assistance in securing funding from the Lottery for the Expanded Public Works Programme (EPWP). Members were concerned that the CETA could not reconcile its assets register with its accounting records. Indeed, they noted that CETA faced a number of challenges, which needed to be addressed. Members were also concerned that fronting was a problem in the construction sector. It was noted that, due to time constraints, CETA would have to provide written responses to the questions that Members had asked.

The Media, Advertising, Publishing, Printing and Packaging Sector Education Train Authority (MAPPP-SETA) outlined the profile of the sectors that it covered. The delegation then discussed the progress that MAPPP-SETA had made towards meeting the NSDS targets. It was, however, noted that MAPPP-SETA had faced a number of serious problems in 2004/05. These included alleged irregular discretionary grant payments to certain service providers. The delegation noted that these irregular discretionary grants payment cases had been handed to the National Prosecuting Authority (NPA), and all non-complying payments had been discontinued. Due to this problem, the MAPPP-SETA had also received a qualified report from the Auditor-General. Added to this, it had faced difficulties around the SAQA report and its management information system (MIS). The delegation stated that various measures had been taken to address these problems. The delegation then provided an overview of the MAPPP-SETA’s 2004/05 financial statements. MAPPP-SETA’s total income for 2004/05 was R 160 million, while its total expenditure had been R 72 million. In the ensuing discussion, Members enquired whether the MAPPP-SETA had a presence in all the provinces; what the demographic profiles of MAPP-SETA’s service providers were; and whether MAPP-SETA could ensure that it received an unqualified report for 2005/06.

MINUTES

MQA 2004/05 Annual Report: briefing
Mr L Nengovhela (MQA Chief Executive Officer) began by discussing the structure of the MQA, which included outlining the configuration of its Board. He then discussed the MQA’s strategic overview. This included highlighting that the MQA had developed a support strategy for the Mining Charter, and that it had developed a sector skills plan for 2005 to 2010.

Mr C Smit (MQA Chief Operations Officer) provided an overview of the performance of the MQA’s various divisions, which were:
- The Skills Development Division. Through this, the MQA had approved 454 Workplace Skills Plans (WSPs) and 171 annual training reports. Added to this, this programme had implemented a strategy to increase the number of employers that participated in skills development. This strategy included undertaking road shows, updating the MQA website, and implementing the DataNet system.
- The Standard Generating Body (SGB). Through this body, the MQA had developed 43 new qualifications and 1414 unit standards. However, the registration of these qualification units with the South African Qualifications Authority (SAQA) had been delayed.
- The Learnerships Division. During 2004/05, the MQA registered 2 070 learners, of which 1 575 were unemployed. In addition, the MQA registered 3 494 apprentices. A further 49 223 learner were participating, or had completed, MQA registered skills programmes. In total, the MQA had paid out R 91 million in grants.
- The Education and Training Quality Assurance (ETQA) Division. The MQA had maintained its SAQA accreditation with no audit qualifications. The MQA had signed 13 memorandums of understanding with other SETAs. It had also accredited 45 constituent training providers, had registered 2 086 assessors, and had registered 280 moderators. Through the ETQA, 25 852 certificates had been issued. Furthermore, the ETQA division had ensured that 20 provider sites where committed to the Investor in People (IIP) Standard.
- The Projects Division. This division had planned to train 5 000 learners; however, it only managed to train 815 learners: this was the result of a poor response from employers. Through its Projects Division, the MQA had trained 720 learners in indigenous jewellery production skills. Furthermore, the MQA had provided support to small-scale mining operations. Through this project, 1 995 people had been trained in small-scale mining techniques. In addition, the MQA had implemented a social plan support initiative. Indeed, the MQA was providing skills to 1 937 ex-mine workers though its social plan.

Mr Y Omar (MQA Chief Financial Officer) noted that the MQA was fully compliant with the Public Finance Management Act (PFMA). Added to this, the MQA had received an unqualified audit report from the Auditor-General. He then outlined the MQA’s 2004/05 financial statements. In 2004/05, the MQA had total revenue of R 332 050 000. The MQA’s total expenses for the year were R 334 808 000. Of this, the MQA had spent R 28 million on administration; R 32 million on NSF expenses; and R 275 million on projects and employer grants.

Discussion
Mr M Mzondeki (ANC) asked how the MQA’s bursary project operated. For example, were bursaries being offered to the children of retrenched mineworkers? Mr Smit responded that the bursary scheme was initially aimed at a small number of geology, mining and engineering undergraduates. Over the past few years, this programme had grown dramatically. The MQA now advertised bursaries at a national level, and had a rigorous selection process.

Mr Mzondeki asked for the details of the 13 municipalities where the MQA’s social plan was located. Mr Smit replied that the social plan was undertaken in partnership with willing municipalities. He added that he would send a list of these municipalities to the Committee.

Mr Mzondeki commented that many ex-mineworkers were unaware of the services that the MQA offered. Indeed, many ex-mineworkers faced socio-economic hardships. The Committee, the Chamber of Mines, and the MQA needed to work together to assist these people.

Mr Mzondeki asked what kind of assistance the MQA had provided to the 1 937 beneficiaries of its social plan.

Mr Mzondeki asked how the MQA had addressed the initial poor response of mining sector employers towards the Adult Basic Education and Training (ABET) programme. Mr Nengovhela acknowledged that employers initially had a poor response towards ABET. In order to rectify this situation, the MQA had engaged with employers around their uptake of ABET, and had organised a sector summit on ABET. Over the past four months there had been a drastic increase in the number of employers that had become involved in the ABET programme.

Mr Mzondeki asked what had happened to the people that had received the indigenous jewellery production skills training. He enquired whether they had been employed or whether they had started their own businesses. Mr O Mogale (ANC) enquired whether the jewellery project was self-sustaining. Indeed, was the project ongoing? Mr Smit replied that the jewellery production training programme was mainly aimed at women in the rural areas. These women had been provided with weaving skills. Indeed, these women had initially started out weaving grass. Once they had mastered this, they had then graduated to weaving copper. Following this, they finally had graduated to weaving gold. Some of the women had been taught how to incorporate beads and gold into jewellery designs. A number of disabled ex-miners had also participated in these programmes. The graduates of this jewellery training programme were selling the jewellery that they produced to various outlets. Mr Smit added that, unfortunately, the NSF funding for the project had ended. However, the MQA was examining other possible funding options in order to restart the programme

Mr B Mkongi (ANC) stated that there were still safety problems in South Africa’s mines. He enquired whether the MQA was providing safety training to mine workers. Mr Nengovhela replied that the MQA included safety training as a component of all of its skills development and learnership programmes. The MQA had also conducted its Falls of Ground Programme. Through this programme, ground fall accidents had been drastically reduced.

Mr Mkongi observed that 86 candidates had completed MQA’s Mining and Mineral Sector Executive Preparation Training Programme. He asked what had happened to these 86 people. Were they being employed as managers or as board members? Mr Nengovhela responded that the Executive Preparation Training Programme was aimed at previously disadvantaged people that had at least NQF Level 5 qualifications. The people that were recruited to undertake the Programme were mostly from outside of the mining industry. As a result, even though these people were highly qualified, they lacked technical knowledge of the mining industry. The Programme was designed to address this by teaching these people the technical aspects of mining, such as geology and mineral economics. This meant that when these people were appointed as managers or board members, they would possess technical knowledge of mining. This would allow for transformation at the highest level of the industry.

The Chairperson enquired whether any women from the South African Women in Mining Association (SAWIMA) had graduated from the Executive Preparation Training Programme. Mr Nengovhela replied that approximately 20 women from SAWIMA had graduated from the Programme.

Ms L Moss (ANC) commented that a workshop on mining opportunities had recently been held in Cape Town. At this workshop, various mining opportunities were identified on the West Coast. However, the people on the West Coast, especially the women, did not have the skills or the experience to take advantage of these opportunities. She enquired whether the MQA had a programme to provide skills to people in the rural areas so that they could take advantage of such opportunities. Mr Smit answered that the MQA was aware of the opportunities that had arisen in the West Coast area. He noted, however, that the MQA did not have a presence on the West Coast. Nonetheless, the MQA had plans to address this.

Mr Mkongi noted that 20 of the MQA’s training providers were committed to the IIP Standard. He asked if the MQA monitored whether these service providers were actually implementing the IIP Standard.

Mr Mkongi enquired whether the MQA had a mechanism to track its learnership graduates. He asked whether these graduates were being employed on the completion of their learnerships.

The Chairperson asked whether the Broad-Based Socio-Economic Empowerment Charter was informing the work that the MQA undertook.

Mr Mogale observed that the MQA had trained 1 995 people in small-scale mining techniques. He asked in which areas these people had been mining. Mr Nengovhela replied that these people were from the rural areas. The aim of the programme was to allow these people to transform their small-scale illegal mining operations into legal mining operations. Nonetheless, most of these people had very rudimentary mining operations. Indeed, many of these people were gravel miners.

Mr Mogale asked how the MQA marketed itself and its learnerships. Mr Nengovhela acknowledged that the MQA had a limited marketing strategy. To implement an extensive marketing campaign or strategy would be costly; MQA rather focused its resources on skills development. Nonetheless, the MQA communicated directly with its stakeholders and advertised its programmes in the media. Added to this, the MQA had a website and regularly undertook road shows.

The Chairperson enquired whether Members could attend the MQA mining safety courses. This would assist the Members with the oversight work that they conducted around the implementation of the Occupational Health and Safety (OHS) regulations in mines. Mr Nengovhela replied that Members were welcome to attend one of the courses on mining safety. Indeed, the Committee could perhaps become involved in a wide number of the MQA’s initiatives and programmes.

Mr Nengovhela commented that the MQA had limited resources. As such, it was unable to address the legacy of past practices in the mining sector on its own. There needed to be commitment from the industry to address the problems that had been created out of the mining sector’s past practices.

Mr Smit noted that the MQA would send extensive written answers to the questions that had been raised by the Committee.

CETA 2004/05 Annual Report: Briefing
Mr T Dlamini (CETA Chief Executive Officer) began by providing an overview of the construction sector. The sector was comprised of three sub-sectors, which were the building sub-sector, the built environmental professional sub-sector, and the building material manufacturing sub-sector. Each of these three sub-sectors were stakeholders in CETA. Mr Dlamini then discussed the structure of CETA itself. He noted that CETA had regional offices in most of the provinces.

Mr Dlamini discussed the progress that CETA had made towards addressing the NSDS targets. He briefly noted that CETA had met most of the NSDS targets; however, there were some backlogs in certain areas. Mr Dlamini then highlighted some of CETA’s other achievements. He noted that CETA had implemented 4070 learnership agreements. Approximately, 33% of these learnership agreements were for women. Added to this, the majority of the people in the learnerships were from historically disadvantaged backgrounds. CETA had also registered a number of unit standards during 2004/05. Other achievements included expanding its bursary scheme; introducing a staggered approach learnership programme; expanding its mentorship programme; undertaking a gender specific training programme; providing capacity building for training providers; and introducing a research and development programme.

Mr Dlamini outlined CETA’s financial statements for 2004/05. In 2004/05 CETA had a total income of R 195 089 000. Most of this income had been received from the Skills Development Levy. CETA had spent a total of R 230 464 000 during the year. Nonetheless, CETA still had R 210 424 000 in cash or cash equivalents. However, it had committed approximately R 250 000 000 to projects. Indeed, CETA had over-committed itself. Various steps had been taken in order to address this over-commitment, which included undertaking an audit of its skills and learnership programmes; auditing invoices that had been received; auditing its training providers; monitoring its funding agreements; and introducing a new billing system. CETA had taken a decision not to pay out discretionary grants to entities if they were not complying with its funding agreements.

Mr Dlamini noted that CETA had received a qualified report from the Auditor-General. This had come about because CETA could not reconcile its Asset Register with its accounting records. The Auditor-General had also raised certain matters of emphasis around CETA’s supply chain management. CETA was undertaking various measures to address these issues, which included appointing an independent entity to reconcile its accounting records with its Asset Registry.

Mr Dlamini discussed some of the key challenges that CETA would be facing during 2005/06. These included meeting the NSDS targets; responding to the skills demands due to the Gautrain Project and the World Cup; promoting the Construction Transformation Charter, promoting the Expanded Public Works Programme (EPWP); promoting good governance; increasing the involvement of small firms in the skills development strategy; and identifying the scare and critical skills needed in the sector.

Mr Dlamini asked whether the Committee could assist CETA in applying for funding from the National Lottery and the NSF for the EPWP. He also enquired whether the Committee could assist in integrating the National and Provincial Growth and Development Strategy with CETA’s strategy.

Discussion
Mr Mzondeki asked whether CETA had sufficient internal capacity to deal with the challenges that it faced. Mr Mkongi questioned whether CETA would be able to address all of its problems within one year. Mr Dlamini responded that CETA would not be able to address all of its problems within one year. Some of the challenges would have to be addressed over two or three years. Mr Dlamini added that CETA faced certain financial challenges. For example, CETA could only use its discretionary grants to support programmes for unemployed people and the EPWP. This was capped at 20% of its SDL income. For this reason, CETA needed the assistance of the Committee to source funds from the Lottery for the EPWP.

Mr Mzondeki asked for the demographic profile of the building contractors in the construction sector. It seemed as though fronting could be a problem in the construction sector. Mr Mkongi noted that many sub-contractors in the construction sector were exploited. This needed to be addressed.

Mr Mzondeki noted that many projects in the construction sector were delayed due to poor project management. He enquired whether CETA had any programmes to address this situation.

Mr Mzondeki asked whether CETA had good relationships with the municipalities and ward committees.

Mr Mkongi and Mr Mogale commented that there appeared to be a lot of industrial action in the construction sector. They enquired whether CETA had programmes to train employees to handle conflict and negotiations. Mr Dlamini replied that CETA did not have any control over labour relations and industrial actions. Nonetheless, the conditions of employment were clearly stipulated in the learnership agreements.

Mr Mkongi enquired whether CETA had a mechanism to track the learners that had graduated from its learnership programmes. Mr Dlamini responded that CETA could track its learnership programme graduates. Indeed, CETA was using its regional offices to track these graduates. Nonetheless, CETA needed to improve its tracking system by developing a data warehouse, which would contain the details of all its graduates.

Mr Mogale was concerned that CETA had received a qualified audit report from the Auditor-General. The fact that CETA had not been able to track its own assets was a serious problem. Mr Mzondeki enquired whether it was an ongoing problem. He asked whether CETA had experienced the same problem in previous years. Mr Mogale commented that CETA had a major role to play in the EPWP. He questioned how it would be able to perform this vital role when it could not even account for its own assets.

Mr Dlamini explained that CETA did have an Assets Register. It could, therefore, account for its assets. However, one had to undertake a calculation to establish the value of each of these assets. The problem was that the Auditor-General had questioned the value of these assets. Hence, it had provided CETA with a qualified audit report. He noted that in order to address this, an independent company had been contracted to establish the value of each of CETA’s assets.

Mr Dlamini explained that when CETA was established, it inherited the assets of the Building Industry Training Board and the Building Industry Training Scheme. Unfortunately, when CETA was initiated, the due diligence exercise had not been completed by the company that had been contracted to do so. This had created the problems that CETA was currently experiencing around the value of its assets.

Mr Mogale noted that CETA was experiencing problems with its supply chain management. He noted that there seemed to be a serious crisis in CETA.

Mr Mogale asked how many net jobs had been created in the construction sector.

Mr Mogale commented that the Portfolio Committee on Public Works needed to meet with CETA.

Mr F Petersen (Department of Labour) stated that CETA had committed funds to Employment Skills Development Lead Employers (ESDLEs). These could be used to mobilise unemployed people as potential skilled labour suppliers. In order to do this, there needed to be effective training and human resource management programmes. If this process was effectively managed, it had the possibility of addressing the problem of tracking learners. Nonetheless, there was a possible danger that the ESLDEs would not be managed properly. He enquired how CETA would address such a problem if it occurred. Indeed, there was already a case where an ESLDE had not paid the grants to a group of learners for four months.

The Chairperson noted that there was not enough time for the CETA delegation to answer all the questions. The Chairperson asked the CETA delegation to forward extensive written answers to the questions that had been raised to the Committee. Mr Dlamini stated that he would send these written answers as soon as possible. The Chairperson noted that the Committee wanted to re-meet with CETA early in 2006.

MAPPP-SETA 2004/05 Annual Report: briefing
Ms N Bernard-Fryer (MAPPP-SETA Chief Executive Officer) began by discussing the sectors that were covered by MAPPP-SETA. MAPPP-SETA was responsible for skills development in the advertising sector; the arts and culture sector; the film and electronic media sector; the printing and packaging sector; the print media sector; and the publishing sector. She noted that the majority of companies in these sectors were SMMEs. She then provided an overview of the occupational profiles of these sectors. It was noted that most of these sectors were still dominated by whites. Following this, she discussed the organisational profile of MAPPP-SETA.

Ms Bernard-Fryer outlined the progress that MAPPP-SETA had made towards meeting the NSDS targets, which were:
-To ensure that 70% of workers in the sectors it covered had an NQF Level 1 qualification by March 2005. The MAPPP-SETA had met this target.
-To ensure that 20% of workers were in structured learning programmes. The MAPP-SETA had exceeded this goal by 127%.
- To distribute grants to 100% of large companies in the sectors it covered. The MAPP-SETA had met this objective.
- To ensure that 40% of medium sized companies, in the sectors it covered, were receiving grants. Again the MAPP-SETA had exceeded this target by distributing grants to 54% of medium sized companies.
- To register 54 learnerships. The MAPP-SETA had failed to meet this target: it had only managed to register 43 learnerships.
- To provide support to 800 small enterprises by March 2005. The MAPPP-SETA was providing support to 500 small enterprises, which meant that it had fallen short of the initial target.
- To ensure that 1 185 unemployed youth were in structured learning programmes by March 2005. The MAPP-SETA had exceeded this target by registering over 4 600 unemployed youths in structured learning programmes.

Ms Bernard-Fryer noted that the MAPP-SETA had faced a number of serious problems in 2004/05. This included the fact that a forensic audit had been undertaken at the MAPPP-SETA. This had come about due to alleged irregular discretionary grant payments, which had been paid to service providers that were possibly making fraudulent claims. Indeed, it seemed as though certain ex-employees were also involved. These cases had been handed to the National Prosecuting Authority (NPA). Non-complying payments had also been discontinued. Mr Bernard-Fryer added that MAPPP-SETA had faced difficulties around the SAQA report. In addition, the MAPPP-SETA never had a MIS, which meant that millions of Rands in grants had been recorded manually. This was being rectified, and a bid had been awarded for the development, and implementation, of a MIS. There was also a problem around the internal audit committee. Two members of the internal audit committee had been part of two training providers whose payments had been questionable. In order to address this, a new internal audit committee had been established.

Ms Bernard-Fryer outlined MAPPP-SETA’s future plans, which included complying with the legislative framework; aligning its services with the needs of the sectors; developing SMMEs and broad-based BEE, accrediting training providers; working with youth organisations; assisting non-levy paying members; and establishing centres of excellence.

Mr G Kemp (MAPPP-SETA Acting Chief Financial Officer) provided an overview of the MAPPP-SETA’s 2004/05 financial statements. He noted that MAPPP-SETA’s total income for 2004/05 was R 160 million. Of this, R 107 million had come from the SDL. MAPPP-SETA had spent R 128 in 2004/05. Of this total, R 72 million had been spent on grants; R 13 million on administration costs, and R 42 million on NSF expenses. MAPP-SETA had R 212 million in assets, while its total liabilities were also R 212 million.

Mr Kemp noted that the MAPPP-SETA had received a qualified audit report from the Auditor-General in 2004/05. The reason for this was that the provision for R 56 million in disbursement grants could not be substantiated, as there was no verifiable supporting documentation that could be provided to the Auditor-General. This was due to the fact that the previous Chief Financial Officer had resigned during the audit. Added to this, there were a number of matters of emphasis that had been outlined in the Auditor-General’s report.

Discussion
Mr Mzondeki commented that all the SETAs should be using the Parliamentary Constituency Offices (PCOs) to distribute their information brochures/material. Ms Bernard-Fryer replied that MAPPP-SETA would make use of the PCOs.

Mr Mogale noted that MAPP-SETA focused mainly on the Western Cape, Gauteng and KwaZulu-Natal. However, there were many arts and culture festivals in the other provinces. MAPPP-SETA needed to broaden its focus area in order to reach these other provinces. MAPPP-SETA needed to provide skills, such as arts and craft skills, to people in these other provinces. It was only in this manner that employment opportunities could be created.

Ms Bernard-Fryer acknowledged that MAPPP-SETA only had regional offices in the Western Cape, KwaZulu-Natal and Gauteng. She, however, noted that MAPPP-SETA supported arts, crafts and culture throughout the country. Indeed, the organisational structure of the MAPPP-SETA had been altered in order to ensure that this support was intensified.

Mr Mogale asked whether the MAPPP-SETA would receive an unqualified report for 2005/06. Ms Bernard-Fryer replied that the MAPPP-SETA was working towards achieving an unqualified report for 2005/06.

Mr Mkongi asked for details of the demographic profiles of the MAPPP-SETA’s training providers. Ms Bernard-Fryer responded that all the SETAs needed to check the profiles of their service providers. Indeed, they should undertake thorough background checks into their service providers.

Mr Dlamini asked Members to examine the governance of the SETAs at a Board level. Many of the Boards were unaware of their fiduciary responsibility. Indeed, the Chief Executive Officers of the SETAs were being saddled with the fiduciary responsibility.

Mr Dlamini noted that government entities should not receive qualified reports. The Auditor-General perhaps needed to strengthen the public entities to ensure they did not receive qualified reports. He did, however, realise that the Auditor-General faced its own capacity constraints.

The meeting was adjourned.