Chemical Industries Education & Training Authority Annual Report 2006/7: briefing
NCOP Economic and Business Development
24 October 2007
Meeting Summary
A summary of this committee meeting is not yet available.
Meeting report
ECONOMIC AND FOREIGN AFFAIRS SELECT COMMITTEE24 OCTOBER 2007
CHEMICAL INDUSTRIES EDUCATION & TRAINING AUTHORITY ANNUAL REPORT 2006/7: BRIEFING
Chairperson: Ms N Ntwanambi (ANC, Western Cape)
Documents handed out:
Chemical Industries Education and Training Authority Annual Report 2006/7[available shortly at www.chieta.org.za]
Chemical Industries Education and Training Authority presentation
Audio recording of meeting
SUMMARY
In its presentation the Chemical Industries Education and Training Authority reported ISO 9000/2000 international validation, 1000 artisans trained in the South African Petroleum industries Association with 50 women in its Petroleum and Oil industry Project and 3000 learners enrolled under the National Skills Development Strategy (NSDS). An increase of 18% in skills development levy income to R155 million was reported, and total revenue increased by 26% from R 169 million in 2006 to R 212 million in 2007. Plans for the next financial year included the approval of a new business plan, a national strategy on scarce or critical skills, the accreditation of provider institutions and ongoing compliance with current statutory framework.
During the discussion Members sought clarity on the number of bursaries awarded to chemical engineering students. Members sought clarity on the disjuncture between the presentation and the Annual Report which indicated that a number of performance targets had been reached, whereas that was not the case. Concern was also raised regarding the failure of the training authority’s chairperson to attend the meeting.
MINUTES
Chemical Industries Education and Training Authority briefing
CHIETA’s strategic objectives are the prioritising and communicating of critical skills for sustainable growth, development and equity in the Chemical Industries Sector; promoting and accelerating quality training for all in the workplace; promoting employability and sustainable livelihoods through skills development; assisting designated groups, including new entrants, to participate n accredited work integrated learning and work-based programmes to acquire critical skills to enter the labour market and self-employment; improving the quality and relevance of provision; and maximising organisational performance and development
The highlights of the SLA Targets were ISO 9000/2000 certification-international validation of policies and procedures; the alliance with the shutdown network forum – 1000 artisans trained
South African Petroleum industries Association-50 women in Petroleum and Oil industry Project benefited; ETDQA from the National Skills Development Strategy (NSDS)-3000 learners were enrolled –80% completed the training 229 small-supported through the voucher scheme & MD; 281 companies (large and small) supported through mandatory grants; science engineering and technology project-benefited young school girls wishing to enter the chemical sector
The Annual Financial Statements and Audit Results 2006-2007 indicated an 18% increase in Skills Development Levy income from R 155m for the year ended March 2006 to R 182m for the year ended March 2007; grant expenses accounted for 81% of levy income received; total return on investment funds for the year R8 .5m; total revenue increased by 26% from R 169m in 2006 to R 212m in 2007; total expenses as a total percent of revenue = 90%; R27m of surplus funds (administration savings, investment income, unclaimed grants) swept to discovery reserves for sector priorities and strategic projects; a further R35m allocated to Discretionary Grants for the 2007 – 2008 circle; employee compensation costs representing 50% of administration levy income for the year ended 31 March 2007 (59% in 2006); ratio of current assets to current liabilities decrease from 2,39:1 in 2006 to 1,87:1 in 2007; and 50% increase in current liabilities from R63m in 2006 to R127m in 2007
The plans for the next financial year included new business plan is approved by the board; guide on scarce/critical skills of National strategy; supporting BEE firms supported by skills development plans; young learners to be trained/mentored; provider institutions accredited for new ventures; sector needs analysis; improve wellness; financial performance: internal/external audit; compliance with statutory and legislative frameworks; integrated MIS; development of WSP
DoL scorecard; ISOEs in place; and MoUs with industry associations.
Discussion
Mr Kolweni (ANC, North West) asked if CHIETA, in its few years of operation experienced any challenges, and if, by saying that they had a clean performance they meant that there had not been any rollovers.
Ms L Matlohoahela (ANC, Northern Cape) compared the presentation with the annual report and pointed out that on page 32 the number of bursary applications received were 132 but only 43 had been approved and thus requested an explanation. She also requested an explanation for why only one chemical engineer was approved.
Mr D Gamede (ANC, KwaZulu-Natal) indicated that on pages 43 and 45 the annual report listed a number of targets but the actual performance results were zero, yet CHIETA had said that they had performed well - he asked for an explanation. He also pointed out that scarce skills were not specifically identified and requested an explanation as well as why the chairperson, Mrs L Joubert, did not attend the meeting and when her appointment had been made.
Mr Gamede also requested an explanation as to why the presentation did not mention anything about the special investigation that was conducted but indicated in the annual report as well as an explanation on the advances made to staff members, which was also mentioned in the report.
Mr Gamede said that the company stated that they had a surplus but were then shown to have used a lot of money especially on administration savings - he asked if that contributed to non-performance, which would then imply that necessities were not procured.
Ms M Themba (ANC, Mpumalanga) requested a breakdown of the 50 trained women in the petroleum industry and what the company’s plans were in connection with the shortage of skilled workers.
Mr Bhabha Mapikela Nhlapo (Constituency Support Executive, CHIETA) responded by indicating that the Chemical Industries Education and Authority produces the annual financial reports and the sector skills plan, which is updated annually. One of the key challenges that they face is that sector is undergoing major transformational challenge. People of colour were non-existent in the sector and with the concerned mandate they plan to debate the issue.
Mr Nhlapo said that one of the core areas of work in the sector was the role of artisans and the one thing that they picked up was that a number of artisans were 55 years and older and the challenge that they face is changing that particular landscape and ensuring that there were new entrants that represented marginalised groups.
Another challenge pointed out by Mr Nhlapo was that most of their companies were situated in the metropolitan areas - mostly in the Gauteng, KwaZulu-Natal and the Western Cape Province - and if one looked at the breakdown of learners, since the industry was based in metropolitan areas, they did not seek out learners in the other provinces and prey on those in high density regions. He pointed out that CHIETA had few learners from the Limpopo, except for those that come from the National Skills Fund.
Mr Nhlapo responded to the scarcity and importance of skilled workers by indicating that they did do substantive work, and had just completed work for the sector skills plan with a 50 page report that indicated areas of scarcity and the most commonly required skills, for example, technicians and welders.
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Mr Nhlapo said that the 50 women that they trained in the petroleum industry were in management positions and the project was aimed at encouraging transformation in the petroleum industry by putting these women on a 2-year cycle. These people were equivalent to the management programme at the Wits Business School.
Mr Farhad Motal (CFO, CHIETA) elaborated on the financial side of challenges experienced by the company mainly due to the amount of legislation. The receipt of the levy income created a 3 month gap in their operations, between it being held by the Receiver of Revenue and the Department of Labour, and that was one of the challenges. The Receiver of Revenue has made a number of adjustments in terms of their levy income termed ‘SARS’ retrospective adjustment’. This adjustment of errors then resulted in amounts paid to the wrong Sector Education Training Authorities, or not paid over at all, hence they managed fully fledged debtors and creditors daily to ensure that correct amounts of revenue were indicated.
Following this challenge was that large amounts of discretionary grants were not received in the specified timeframe, as well as the proactive cash flow management, which touched on the surplus question. Mr Farhad said that a CHIETA receiving money for skills development could not pay out the money because of the training cycles occurring and the certain mandatory documents that needed to be submitted; thus by nature a CHIETA would carry a minimum surplus of at least 3 to 6 months money of levy income.
Mr Farhad said that, in terms of the early search for learners, in this particular year they had various bridging programmes and another where they took 60 females from grade 11 and 12 on a science and engineering camp, aimed at encouraging them to enter the chemical industry and take up maths and science as their subjects.
The meeting was adjourned.