Department Annual Report 2006/07: discussion with Department

Meeting report

LABOUR PORTFOLIO COMMITTEE
6 November 2007
DEPARTMENT 2006/7 ANNUAL REPORT: DISCUSSION

Chairperson: Ms O Kasieyane (ANC)

Documents handed out:
Department of Labour (DOL) Annual Report 2006/7 [www.labour.gov.za/reports/annual_reports.jsp]
Audit Report 2006/7: Department of Labour
Audit Report 2006/7: National Skills Fund
Audit Report 2006/7: Sheltered Employment Factories
Audit Committee report 2006/7

Audio recording of meeting

SUMMARY
The Committee engaged with the Department of Labour on issues arising from their Annual Report briefing given on 23 October. The Committee focused on the Auditor General findings that had led to a qualified audit for the third consecutive year and the corrective measures that would be implemented to tighten financial controls. High staff vacancies in the DOL were discussed as well as skills shortages and monitoring systems for finances. The Committee also looked at the review of the SETAs, the social dialogue taking place at NEDLAC on atypical employment (casual workers) and the delay in reaching an agreement on this. Other aspects discussed were the Employment Services System for matching job seekers with jobs and the strategy for a turn-around of the Compensation Fund.

MINUTES
The Chair welcomed the Department of Labour and stated that for three consecutive years the Auditor General had given the DOL a qualified audit opinion. The DOL had been faced with problems around service delivery and people were being deployed from DOL head office to the Labour Centres to deal with these issues. She said that any problems that the Director General was dealing with needed to be mentioned so that they could be dealt with.

The Chair expressed unhappiness about the Annual Report and the responses from the DOL which had been the same as before. The corrective measures that were presented for all the programmes had no time frames and the Committee wanted to know the time frames.

Mr T Anthony (ANC) asked the Audit Committee when they had discovered the systems that the National Treasury work with had limitations and deficiencies. When could interventions be made on these systems?

Dr Vanguard Mkosana, DOL Director General, replied that it was well known that there were limitations in the systems of Treasury and they had spoken to the Auditor General and to Treasury. The Department should not be given a qualified opinion because of the limitations of the systems and these systems do not belong to the Department. Other measures should be put into place to make up for the gaps in the systems. Other Departments had also experienced this problem with Treasury. Treasury was addressing the system gaps and another one would emerge that would address the shortcomings in the current system.

Ms Dreyer (DA) asked about financial management and the fact that the Department had another qualified report, as well as a lack of an asset register, irregular staff leave, irregular expenditure of R11 million and staff debt. The under spending of R45 million was money that was supposed to have provided services.

Ms Dreyer asked about the large number of staff vacancies in the DOL.

Dr Mkosana replied that the vacancies in the DOL had been reduced dramatically and were up to 11%. The staff figures fluctuate around 8 000 people. At one point, up to 424 people were not placed. Internationally it was an accepted level of vacancies and it was currently above the standard of Human Resources worldwide. It was not good to have the under expenditure due to employee vacancy levels and they work to continually push the level down. Recently a head count had been done of individuals and where they were placed in the 130 DOL offices countrywide. The money spent for each staff member was established and the system was cleaned out so that all vacancies were known and these were reduced to acceptable levels.

The Chair stated that on the issue of vacancies, contradictory information had been published in the Annual Report and the Strategic Plan and the Auditor General’s report. The Strategic Plan gave a staff complement of 5275 people of which 4672 posts were permanent posts - therefore there were 603 vacant posts. In the AG’s report it stated that there were 2058 vacant posts (R31 million). The Annual Report of 2006/7 stated that there were 9533 posts in the DOL. The AG’s report agreed with the Annual Report however the Strategic Plan disagreed with this. Clarification was needed.

Dr Mkosana replied that the figure highlighted in the Strategic Plan of 5275 was the AG’s figure which related to other figures. Currently there was decentralisation of functions in the DOL and this was the restructuring that the DOL was currently undergoing by thinning the Head Office and broadening the delivery points. The Unemployment Insurance Fund (UIF) was being restructured towards a public entity and the staff numbers had been pushed down as they were transferred to UIF. 3000 staff members were moved over to UIF and that left staff numbers at about 5000. A process had just been finished of verifying all staff at about 8000. It would differ as on a daily basis as people would resign or move.

Ms Dreyer asked if the DOL was affected by the skills shortage at all.

Dr Mkosana replied that at present they had sufficient skills to run the DOL at an optimal level.

Ms Dreyer asked why there were high vacancy levels and if it was because there was a lack of skills and why more people were not appointed to fill those vacancies.

The Chair asked why there was such a large number of vacancies were still in the DOL.

Dr Mkosana replied that part of the staff left because they had good skills. Corporate companies take the inspectors and this had become a national problem. The inspectors had scarce skills and these skills need to be developed for the country and not only for the DOL.

The Chair asked how many types of inspectors the DOL has.

Dr Mkosana replied that there were different levels of inspectors and there were inspectors from the Deputy Director level right down to the level of learner inspectors.

The Chair asked what qualifications the inspectors had, what level of knowledge did the inspectors have and was it also because of their qualifications, that they leave.

Mr B Mkongi (ANC) also expressed interest in what qualifications the inspectors had.

Dr U Roopnarain (ANC) asked if there were mentoring programmes where inspectors could mentor other people in these skills. She asked if there were incentives for the staff to stay. Targets had not been met and there was huge under spending and inadequate time frames. She asked how the Portfolio Committee could intervene.

The Chair stated that the President, in his State of the Nation Address, had raised the key strategic objectives that would impact on the labour sector as well as the goal of halving unemployment by 2014. He had also raised the point of developing scarce skills and expanding the Small Medium Micro Enterprises (SMME) sector. This had to happen.

Dr Mkosana replied that in terms of Treasury an under expenditure of up to 8% was permissible. However the DOL had underspent only 2% of its budget. The budget was managed very carefully throughout the year.

Mr Mkongi stated that 2% was unacceptable and that the 2% under-spending affected service delivery.

Dr Mkosana replied that the entry level of the inspectors was matriculation and beyond that. Over a period of three years, they would study and be developed by the DOL to become inspectors in any area that they were interested in. The DOL wanted to develop people within a short space of time so that they could be used in the field as soon as possible. People were also being developed in specialised areas. There was a strategy in place to show how the inspectors were being developed.

Ms Siyanda Zondeki (DOL Deputy Director-General: Service Delivery) replied that the inspection and enforcement strategy had just been reviewed and was based on three pillars. One of the pillars was looking at the professionalisation of the inspectorate. Currently what was been done was that there were different competencies in the inspectorate, which included areas of specialisation. An area of focus was Occupational Health and Safety where qualified inspectors were needed. Another area of focus was Employment Equity, as they needed to move beyond compliance and enforce compliance on substantive issues when implementing Employment Equity. Inspectors had matriculation, national diplomas and some even went up to the level of degrees.

A profile of the inspectorate was being worked on what was currently available. This would provide a structure of what kind of skills an inspector would need at every level. A career path would be structured into the inspectorate. This profile would also include the salary structure as inspectors were leaving for better remuneration.

Mr L Labuschagne (DA) asked why the Department had concentrated on the inspectorate when the question that had been asked was about the skills vacancies. At what levels were the inspectorate? In senior management, there was a 39% vacancy level. The inspectorate was but one category of vacancies. What percentage of the overall vacancies was from the inspectorate?

Mr Sam Morotoba, DOL Deputy Director-General: Employment & Skills Development Services & Human Resources Develpment, replied that there were 1000 inspectors and the average fluctuation of numbers was about 300 per annum. The other area that was challenging was the Employment Services sector where there was an intake of specialised people, which range from level six to nine.

Ms Dreyer asked about specific solutions to the problems that had been identified. She asked about the lack of an asset register and the lack of management over this and what steps had been taken to correct this and what progress had been made.

Mr Nene (ANC) asked what steps had been taken from the people who were supposed to manage this.

Mr Chris van der Merwe (DOL Chief Financial Officer) replied that the problem needed to be seen in context. The DG had referred to the unreliability of the systems that were in place. The AG had detected the problem by conducting an IT audit and from the audit, had come to the conclusion that the systems were not reliable.

Resources had to be used to conduct manual reconciliation between the interfaces. The DOL was in the process of decentralising to 140 different offices and there was no risk management in place as yet. The payments were made countrywide and it became difficult to control. There was no agreement on the closing balance of the assets the previous year and this had led to the qualification. This year an attempt was made to correct the situation and it was agree that the closing balances now balance with the exception of one of the provincial offices incorrectly capturing data. The statements were corrected but it was not accepted.

The asset register was in place and it was bar-coded. There was no link between the ICM number on the assets and the bar code and this was what had led to the audit qualification.

The closing balance was agreed upon and the linkages of the assets were being worked on. The assets were managed in various offices. The provinces had to do the reconciliation between the BAS (Basic Accounting System) and LOGIS operating systems and this was being followed up. The asset situation was under control.

Asset management had become a major issue and the Department had 140 000 generic assets with a value of more than R5 000. This was spread over 140 offices. The complication for the current financial year for the assets was that some items were viewed as a financial lease however the Department viewed this as an operational lease. This was now a new concept.

20 000 IT assets belong to Siemens and they would only be transferred to the Department at the close of that agreement in 2012. What made the situation more difficult was that Siemens had an arrangement with the bank. The bank bought the equipment and then leased the equipment to Siemens, who then supplied it the DOL at no charge, as it was paid in the unitary fee. A value for the Auditor General would be hard to get at this point so a generic value would be more acceptable however the AG may not accept this.

Dr Mkosana continued that an asset register was in place and the AG accepted that the inspection had been done although it was late. The IT assets were a challenge. The issue currently been discussed by the Accountant General and the AG was because of the misunderstanding of concepts used. This would be addressed after the Accountant General had given definition to those assets.

Ms Moss asked about the fixed assets and if there was an adequate monitoring system in place.

Ms Dreyer asked about the management of staff leave.

Dr Roopnarain asked about IT requisitions and why they were not directly procured from Siemens.

Mr van der Merwe replied that the Siemens contract was structured in such a way that Siemens would supply quality of service and when more equipment was needed, then it was supplied directly and a tender did not had to be given for this. There was 24-hour service and only the cost of a unit fee.

Mr Mkongi asked the DG how the assets related to the supply chain management that was spoken about.

Mr van der Merwe replied that there was a Supply Chain Unit in place and the supply chain management did not handle the IT. The unit fee agreement stated how many computers were linked to the network.

Ms Moss asked if there was a monitoring system in place.

Mr van der Merwe replied that there was a monitoring system in place. The people responsible for monitoring were a combined team, from Siemens and the Chief Information Officers’ office. Every time equipment was replaced, a form was filled out stating what had been removed and what was replacing it. It was bar-coded and that form went to the Chief Information Officer’s (CIO) office where a register was kept. There were two asset registers, an IT asset register and a generic asset register. The reason for the split in asset registers was that those records belong to Siemens. As it was a financial lease the AG wanted the DOL to account for it in their books as well. There were two asset registers, one for IT and one for generic assets.

Dr Mkosana replied that the CIO was directly responsible for the monitoring of the IT assets and a link in the auditing process was now occurring.

The Chair replied that the Minister was needed to give a clear explanation with regard to Siemens.

Mr E Mtshali (ANC) commented that there was a lack of structure and accountability and that it needed to be addressed as it was a serious issue. He especially included the sheltered employment project. He needed to know how this was going to be addressed.

The Chair stated that there was a need to comply with the South African Statements of Generally Accepted Accounting Practice and raised concern around this issue.

Mr Len Larson (Acting Chief Executive Officer, Sheltered Employment Factories and a private-sector turnaround specialist) replied that the three qualifications given by the AG were around supply chain management, statement of fixed assets and tracking inventories. Extensive work had been done in all those areas. Inventory was to do with the goods that were on the way to the customer but had already left the factory, this as verified by a delivery note. The AG was not satisfied with this. Systems were now in place and the problem had been resolved. In fixed assets, there was inadequate provision for the impairment of redundant fixed assets. The project addressing that was 70% completed and would be completely dealt with by the end of this financial year. On the issue of expenditure, the matter was inviting competitive quotes for major raw materials that were purchased. One of the major raw materials purchased was fabric as clothing was manufactured. Only three suppliers supplied the raw materials in the country. In such cases three competitive quotes were invited and this was where the shortfall was. Treasury required any purchase above R200 000 to go out on tender. Through the DG’s office, exemption had been sought from Treasury so that the quote process could be followed.

The Chair asked in terms of transformation, if they intended to do anything about employing black disabled people.

Mr Larson replied that for the last eight years they had lost government support and 800 jobs had been lost as well for disabled people. No recruitment had taken place for disabled workers during this time. The policy level was very clear in that as the activity level increased, then the recruitment process could increase.

Ms Dreyer asked how the department was bringing down the unemployment figures in order to half unemployment by 2014. What progress had been made thus far?

Mr Morotoba replied that unemployment was the bigger goal of the whole country. DOL role was to have active labour intervention measures in place and to have sustainable jobs.

Mr Labuschagne asked for an indication of the quality and applicability of the programmes that were being used and if the training could be used after they had finished studying.

Mr Morotoba replied that the way the information was reported might be problematic, most of the learners would begin in January or February and the financial year-end was in March. The people would be in the system from the previous financial year.

He continued that the quality issue was a challenge and the DOL had worked with the Department of Education for five years to come up with a policy statement and resolutions. There was now a joint policy statement that had been presented to Cabinet by the Minister of Labour and the Minister of Education. There was now a policy statement and the challenge would be to translate that into legislation to enable a Council for Occupations and Trade that would streamline this and include quality assurance. The impact of the programmes were being tracked mid-term and at the end of the programmes. The question was also one of sustainability.

Mr Mkongi asked about the challenges faced by the National Skills Fund and the possible solutions that were being put in place.

Mr Morotoba replied that the previous year’s Annual Report presentation had raised the issue of manuals and this had now been addressed. Only one manual was still to be finalised which dealt with how they would go about buying or procuring the services of people. The previous system was old and now, in the introduction of the new supply chain and the regulations, the AG’s concern was to adjust the processes to line up with the current situation. One cannot procure the services of training people like you buy a pencil and these complexities would be addressed once the last manual was finished.

The Chair asked about the operational manuals and that certain finances were still not approved, there were also weaknesses on the supply chain and lack of monitoring.

Mr Morotoba replied that the situation for the manuals was as it was now described however it had since been corrected and approved. The only one still out standing was Social Development Funding that still had to be approved. On the monitoring aspect, there were still challenges.

The Chair asked about the funds for North West Province for Social Development and what had happened there.

Mr Mkongi asked about the tracking of the students in the learnerships.

Mr Morotoba replied that there were a number of complex issues with regard to that:
- Allowances that were paid varied,
- Entry-level learners come in and get allowances and then they leave for a permanent job
- Career choice difficulties.
A contract had been introduced to bind the learner, the employer and the provider. The National Skills Fund (NSF) and the Sector Education and Training Authorities (SETAs) discretionary fund had introduced incentives to encourage learners to remain in the learnerships. Policy issues needed to be dealt with as well.

Mr Mkongi asked about the 20 SETAs and why two of them were not doing well.

Mr Morotoba replied that he knew that not all the SETAs were performing well. However if only four out of the 20 SETAs got qualifications, then this was a good thing. There had been progress made on the SETAs. These were now 50% employee and 50% business controlled. In terms of policy change, it had been discussed whether government should appoint the CEOs and Boards of the SETAs and if anything went wrong, they would take full responsibility for it.

Mr Mtshali asked if the SETAs were necessary.

Mr Morotoba replied that SETAs were necessary and that they were the only institutions that help with work place learning. There was no process for prior learning recognition yet. These institutions were not yet matured to that level but they were the only ones that filled that gap in the workplace.

Mr Anthony asked about the Exit Strategies in the Development Plan.

The Chair commented that skills development needed to be aligned with the Skills Development Strategy within the new policy framework and the new industry framework.

Mr Mkosana replied that there was a need for alignment with the National Policy Framework in all the strategies and policies. If they were not aligned, the learners would never use their skills in the work place. The policy question under debate was how this could be achieved in the current structures of the SETAs.

Mr Anthony asked about the 2007 Skills Development Strategy in connection with the SETAs and why many of the SETAs failed to spend their allocated money.

Mr Morotoba believed that SETAs had a positive role to play and were the only institutions promoting and protecting on-the-job learning. Not all of them were performing well. However, that only 4 out of 23 SETAs got qualifications from the Auditor General had been a major improvement.

Mr Morotoba acknowledged that the reserves were high but the issue was that the SETAs were responsible for driving the programmes with only 20% of the funds. Of the total, 50% was money that was guaranteed to go back to employers if they train and submit reports, this would take the total amount to 70%. Then 10% was used for SETA administration and the remaining 20% went to the NSF. The delay that was experienced was the employers submitting their claims for grants from SETAs. The policy issue that had been up for discussion was whether they do away with the grant to employers completely and the SETAS make use of the entire 70% to drive the programmes. The resolution of that would lead to whether do away with the grant or not. However, the companies believed that they were entitled to the funds of the grant and doing away with this would lead to a revolt. So this delay had led to the large reserves in SETA. The current legislative framework did not allow it to be taken and used for something else.

Mr Morotoba said that the R21,9 billion was not the money transferred to SETAs in 2005 by National Treasury. What was done was that if by 2010 the levy contributions remained the same with adjustment for a 5% inflation rate, the amount of money raised by 20 March 2010 was projected to be R21,9 billion. This was the revenue that would be generated. It had started at R5,4 billion and with the economy it had picked up.

The strategy with money for training was that the unit amount for training a certain number was determined. The numbers were not thumb-sucked. From this would be the projected numbers that could be trained. That was why in subsequent years the other amounts had not been reported upon. In the SETA Annual Reports, they each reported on the amount of money that was being generated per annum and what had been spent by each SETA.

Ms Dreyer referred to labour policy and labour relations and how the policy could be changed to include those people who needed to enter the job market at entrance level.

Mr Mkosana replied that the DOL was involved in halving unemployment however this would also include the efforts of corporate companies. The two drives to help halve unemployment were Accelerated Shared Growth Initiative of South Africa (ASGISA) and the Expanded Public Works Programme (EPWP). Government, Labour and Corporate Business all need to be involved in this as vehicles to create employment. 500 000+ jobs were created in the previous year. The major intervention on behalf of the DOL was the Skills Development training programmes.

The Chair stated that the social partners should also pull their weight in strategic management.

Mr Morotoba replied that “entry levels” were used for a number of reasons; they could be used for exclusion purposes or used to select the best candidates where there were a lot of young people with qualifications. Some professions had put entry-level requirements at an unrealistic level and there was a proposal for amendments to the policies that govern apprenticeships. There needed to be one regulation regarding apprenticeships. The Manpower Training Act needed to be repealed and one Skills Development Act put forward so that the processes could be streamlined.

Mr Mkongi asked about the challenge the country was faced with contract workers and labour brokers that exploited young people. Why was there a problem in legislating against this so that people could be protected in the workplace?

Mr Thembinkosi Mkalipi (DOL Deputy Director-General: Labour Relations) replied that there were only a very small percentage of workers for which wage conditions were regulated and employers determined the majority of workers’ salaries. The DOL commissioned research about three and a half years ago on the extent of atypical employment including labour brokers and contract employees in the labour market. The research was presented to Cabinet and the President. Based on that research, the President stated that the National Economic Development and Labour Council (NEDLAC) stakeholders should engage with this document and come up with measures to deal with atypical employment. Social dialogue takes a long time to move and negotiations at NEDLAC were still taking place on this matter and there was no agreement yet. Atypical employment was a global phenomenon. There was a challenge for the country to look at all labour legislation and make the position of atypical employment far better than it is.

Mr Mkongi asked the Department to keep the Committee updated on the transformation and monitoring of the SETAs.

Mr Mkosana replied that there was currently a debate in NEDLAC about merging the SETAs and this was in regard to the review of SETAs. A short study had been done on this by the Presidency and the results of the review would contribute to the discussion. This would address how the configuration of SETAs would work. They were an important player at the moment but they needed to be looked in an integrated manner with all educational systems. The National Qualifications Framework (NFQ) looked at uniting all educational systems in South Africa.

Mr Mkongi asked about SETAs monitoring system of the learners. Was this monitored?

Mr Mkosana replied that there were surveys been conducted along with the Human Sciences Research Council. They assist in pointing out the areas of need in relation to skills. They were also looking at where the learners were being deployed. An Employment Services System was being developed which was at the second phase and it linked employment to the skills development strategy.

Mr Mkongi asked in what sectors the 500 000 jobs were created.

Mr Mkosana replied that the main jobs that were created were in the construction and service industries. Some of the jobs were not quality jobs as the people would be employed for six months and then have to look again for work. This needed to be addressed as well.

Mr Mkongi stated that a deadline for the labour market guidelines should be resolved. NEDLAC would still take time to come to a resolution and business was not getting involved in this matter. NEDLAC needed to be pushed with regard to a deadline. The debate should go further with regard to employment creation. Some government departments did not recognise these qualifications in the NQF. The private sector did not use NQF levels at all. It needed to be discussed as a social dialogue with the department to address these labour market issues.

The Chair referred to the Auditor General comments. She asked to what extent the Audit Committee was functional and about the corrective measures that had been put in place.

Mr Mkongi asked about the staff loans and cash in the hands of the DOL staff. The staff inspectors when inspecting in the rural areas stay with family and there was no invoices and no account made of these cash transactions of the accommodation of inspectors. He asked how these risks would be dealt with.

Mr van der Merwe replied that the Audit Committee was functional. On the matter of advances and cash in hand, when the inspector returned to base, the staff member needed to settle that advance of money within seven days. The advances outstanding as at 30 September were R486 000 for the whole Department.

Mr Mkongi asked how people that resigned after been given a bursary were being dealt with and how this was being tracked.

Mr Mkosana replied that the matter of bursary holders resigning after completing their studies had been debated and policy on this had been informed by other government structures. The contract for bursary holders and learners would be tightened so that after training, they stay within government structures.

Mr van der Merwe replied that staff in breach of contract due to bursaries received amounted to R2,56 million. Another big item was state guarantees where the state issues a guarantee to a banking institution for an employee to acquire accommodation. If the person leaves, then the bank calls up the state guarantee and this amounts to R1,379 million. This needed to be managed and the people traced by tracing agents. This was a tedious process. If the person cannot be traced, then an economic decision needed to be made by the legal department if this money could be recovered or if it should be written off.

The Chair asked how there could be staff debts of R10,2 million. Was this the money given to the inspectors? Was there a structure in place to be able to manage this debt?

Mr van der Merwe replied that the major issue about staff debtors was salary over-payments when a person terminated their services in the Department. Due to a delay in documents being transferred, they were terminated on the PERSAL system only after resignation. This could mean that they were paid two or three months’ salary after having resigned from the Department. This amount at 30 September was R3,79 million.

Mr Anthony asked about the Employment Services system. The target for it to be up and running in the regional offices had been April 2007. Was this target reached?

The Chair asked if there were records in the regional offices about employment and the levels of the people employed.

Mr Anthony asked about the environmental management requirement and if this would not result in another qualification. Progress on this needed to be reported.

Mr Mkosana replied that an environmental management plan had been developed but it had not yet been signed. Consultation with the Department of Environmental Affairs and Tourism needed to take place and then it would be ready.

Ms Rajbally (Minority Front) referred to the casual labour market, saying that there was no protection for those workers at all. She asked what the statistics on casual labour were and whether it was increasing or decreasing. She also enquired as to the monitoring systems and if there were time frames so that casual workers could then be registered as permanent workers.

Mr Mkosana replied that the casual labour issue needed to be pushed with the social partners at NEDLAC and out of this debate an informed solution needed to be found. The Department was urging NEDLAC to finish this debate.

The Chair asked for clarity on internal controls in the Department and about the suspense account that had not been cleared and should be on a monthly basis.

Mr van der Merwe replied that the interest on the staff debt was now R2,8 million. The debt loaded onto the state system had an interest rate that was calculated at the normal rate. Included in the amount for staff debtors was the R2,8 million interest that had accrued. The total amount outstanding at end of September 2007 was R13,2 million and R2,8 million of that was the interest. The suspense accounts had to be cleared by the year-end and there were other suspense accounts that did not have to be cleared by the end of the year and the Auditor General was looking at this. These accounts had to be reconciled on a monthly basis.

Mr Anthony asked if there was another way to conduct the administration of the accommodation for the inspectors. A vacancy could be made in the Department to handle all travel bookings and this could be centralised.

The Chair stated that they were not assisting the employees in regard to accommodation and there needed to be a system in place for this.

Mr Mkosana replied that they had developed a way to handle the accommodation issue and that now they had stopped circulating cash to the staff.

The Chair asked why there were inspectors who were employed with high qualifications and that was why they were leaving. Yet there were people with only Std 10 who were employed in high positions. There was a discrepancy, this needed to be monitored and addressed.

Mr Thobile Lamati (Provincial Executive Manager: Western Cape) replied that the inherent job requirements were followed whenever vacancies were filled.

Ms Zondeki replied that the Employment Services System had been rolled out to all Labour Centres. However there were challenges. She asked Mr Mothiba to continue.

Mr Mothiba replied that the system had been rolled out to all centres and 90% of all staff that were using the system had been trained. The issues were around those people that need to be served being made aware of the service. Hence they were encouraging them to register as job seekers. They expected employers to register vacancies and the job seekers were screened to be able to match them up with the vacancies. Further development was taking place on the system so that there would also be an information and cancelling facility – so job seekers could determine where vacancies are which they planed to complete by March 2008. Employment service regulations were being developed to enforce employers listing vacancies. The intention was also to establish what job opportunities were available in the country so that the policy response and interventions would include the scarce skills that the country needs. The further developments were currently being tested at two labour centres, both rural (Thoyandou) and urban (Pretoria). By March 2008 the system should be on line. It was also being linked up with the Unemployed Insurance Fund system so that people could be picked up as unemployed and then as soon as possible re-directed as a job seeker.

The Chair asked about the slow turnover in the Compensation Fund and why the current report had not included this.

Mr Shadrack Mkhonto (newly appointed Compensation Fund Commissioner) replied that the delay in the turn-around of the Fund was due to a number of issues which included the requisite approval by the Minister. This was achieved in May 2007 as the board insisted that they could not move without the Minister’s signature on the strategy. There were initiatives which the acting commissioner had started which had been delayed because critical staff had not been appointed to assist in the implementation of those initiatives. Specific functions and positions had been identified that needed to be in place to ensure that the initiatives were carried through. The DG had timeously approved the structure however the challenge occurred with the advertising and appointment of key staff and to date these positions were not filled. There was a short-list and they were now in the process of the final approval of the establishment and to make appointments and move with the strategy.

Mr Mkongi asked if there was accident reporting by companies and if there were integrated inspections taking place. Referring to the last mining accident that had taken place, it appeared that only the Department of Minerals and Energy were involved with no intervention by the Department of Labour.

Mr Jacob Malatse, DOL Executive Manager: Occupational Health and Safety, replied that there was currently an interaction between the DOL and the Department of Minerals and Energy (DME). When the legislation framework was developed, the DME had been involved. With regard to incident investigations, legislation prescribed that the DME were involved in the investigation.

Mr Jeffrey Du Preez, DOL Executive Manager: National Skills Fund, asked to speak about the status of the Manpower Development Authority of Bophuthatswana (MANDAB) which matter had been raised by the Auditor General. He referred to page 175 of the Annual Report which showed that R20,7 million had been spent and training contracts that were currently not completed were about R5 million should be spent by the end of the financial year. The only unallocated money was R2,6 million which would be allocated to the North West for development. Thus there were no more unallocated funds for training under MANDAB.

The Chair asked about the time frames for the identified corrective measures. She asked what the plans of the Department were to address vacancies.

Mr Mkongi asked about the impact of de-centralisation and the impact of promotions on the unity and cohesion within the Department and if there were any threats to this unity. Also what impact did awards and resignations have on the unity of the Department?

Ms L Moss (ANC) asked about gender equity in the Department and the question of female employees in Senior Management positions, as the Department needed to lead by example in both public and private sectors. She asked if there were any child-care facilities available in the Department.

Ms Moss referred to the National Skills Fund which received R37,8 million for training 20 000 unemployed ABET learners with a target to spend R121 million. She asked why there was such a large under spending on ABET learners and where the 20 000 unemployed ABET learners were placed.

Mr Malatse replied that with the National Skills Authority they had been more or less on course in developing the legislative framework. However, certain concerns were raised by an important stakeholder, the labour constituencies, and these concerns had to be looked at and they wanted to engage with the DOL even more.

Ms Moss asked about the R270 million that was spent on training career counsellors as well as the goal to employ 7 500 learners within critical skills area and if this was achieved.

Mr Anthony asked about the Auditor General finding that the 2006/07 DOL workplan was not aligned with the Estimate of National Expenditure and that the plan was now only been aligned for the 2007/8 financial year. He also referred to the performance rewards, saying that these should be checked on.

Mr Mkosana confirmed that this had been aligned.

The Chair asked about Occupational Health and Safety in the workplace and when the Occupational Health and Safety Authority would be functional.

Mr Mkosana referred to the staff structure that Commissioner Mkhonto had referred to, saying that it would be approved today. On the issue of decentralisation, resignations, rewards and the impact on cohesion within the Department, best practice on all these issues was followed. The concept of decentralisation was sensitive to the need for service delivery. This concept was introduced by him when he became DG three years before and it was something he wanted to see done before he left the DOL (his three-year contract was ending at the end of 2007). This change within the Department was frightening for those at head office as they now would need to be employed at the Labour Centres where service delivery was. This created uncertainty for the staff and caused anxiety as there had been some delays. Their survey of staff had shown that the resignations were related to better opportunities elsewhere rather than unhappiness with the DOL. The important factor was DOL had a solid team.

The Chair thanked the DG and the meeting was adjourned.