ATC130927: Report of the Portfolio Committee on Higher Education and Training on the Strategic and Annual Performance plan 2013/14 of the mining qualifications authority and manufacturing engineering and other related services SETA, dated 11 September 2013

Report of the Portfolio Committee on Higher Education and Training on the Strategic and Annual Performance plan 2013/14 of the mining qualifications authority and manufacturing engineering and other related services SETA, dated 11 September 2013

The Portfolio Committee on Higher Education and Training, having considered the Strategic and Annual Performance Plan (APP) 2013/14 of the MQA and MERSETA reports as follows:

1. Introduction

The Portfolio Committee on Higher Education and Training considered the Annual Performance Plan and Medium Term Expenditure Framework (MTEF) Budget 2013/14 of MQA and MERSETA on 21 August 2013. This report captures a summary of the presentations made by both entities to the Committee, focusing primarily on the Annual Performance Plans and Budget for 2013/14 financial year which were presented in conjunction with the Strategic Plans that were tabled in Parliament on 08 April 2013 for consideration and reporting by the Committee. The report further captures observations and recommendations made by the Committee during deliberations on some of the key aspects of the presentations.

2. Background

The Strategic and Annual Performance Plans of public entities were extremely valuable sets of information to the Committee in exercising its oversight role. Engaging with public entities on these documents was very critical in scrutinising allocations of public funds and monitoring their utilisation. The annual performance targets of the entities were also scrutinised to ensure that they were in line with the Department’s mandate of expanding access to post school education and training opportunities for the young people of the country. Moreover, effective oversight and transparency were requirements for effective accountability which was the responsibility of the Committee. This was the overarching role of the Committee to invite public entities to account before it.

Portfolio Committee on Higher Education & Training:

Present: Ms D Chili (ANC), Ms F Bikani (ANC)*,Ms N Gina (ANC), Adv I Malale (ANC) Chairperson, Mr S Makhubele (ANC), Prof S Mayatula (ANC), Mr C Moni (ANC), Mr S Radebe (ANC), Ms D Sibiya (ANC), Dr L Bosman (DA), Prof A Lotriet (DA) and Mr N Bhanga (COPE).

Apologies: Mr J Dikobo (AZAPO).

Support Staff: Mr A Kabingesi (Committee Secretary), Ms M Modiba (Content Adviser), Mr L Komle (Researcher), Mr F Mohale (Media Officer) and Ms T Majone : Committee Assistant.

The following were present:

Mining Qualifications Authority:

Mr S Seepei : Chief Executive Officer, Mr D Msiza : Chairperson, Mr Y Omar: Chief Financial Officer, Ms G Mkhize: Executive Corporate Services and Ms J Moodley : Acting Chief Operations Officer.

Manufacturing Engineering and Other Related Services SETA:

Dr R Patel: Chief Executive Officer, Ms P Baleni : Chairperson, Ms L Ndlela Chief Financial Officer and Ms V Ndou : Acting General Manager Human Resource Strategy & Compliance.

Department of Higher Education and Training:

Mr D Manana : Deputy Minister, Mr Z Mvalo : Acting Deputy Director-General Skills, Mr M Lumka : Chief Director SETA Coordination, Mr O Taukobong : Director, Ms P Sekgobela : Parliamentary Liaison Officer, Mr S Zondi : PLO Office of the Deputy Minister and Mr B Bingwa : Intern.

3. Summary of presentations

3.1. Mining Qualification Authority

Mr D Msiza : Chairperson made the following introductory remarks:

· The Strategic and Annual Performance Plans 2013/14 of MQA were in line with the goals of the National Skills Development Strategy (NSDS III), National Skills Accord and other government priorities aimed at improving skills development.

· In ensuring that funds allocated to the MQA were used for skills training, all board members agreed that they would not be paid board fees.

· MQA embarked on a turnaround strategy to reduce utilisation of consultants in some of its core areas in the past two years. This was met with huge resistance from private service providers who benefited from the outsourced services of MQA. MQA had since increased its internal capacity to improve on the delivery of its mandate and the results had been positive.

· The outsourced management of the bursary scheme of the MQA was also brought in-house. The outsourced bursary scheme was not well management and it cost the entity a lot of money in terms of administration fees. The previous provider did not have systems to track the funded students. MQA was also concerned about low pass and completion rate of the funded students at universities.

· Through the request of the Minister of DHET, MQA established six (6) regional offices in Further Education and Training Colleges in the rural areas. The process of establishing the last two regional offices was underway. The offices would provide opportunities for continuous engagement with mining houses through on skills needs and planning.

Mr S Seepei : Chief Executive Officer led the presentation which highlighted the following key issues:

· MQA had six strategic objectives namely; transformation, decision making through research, enhancement of knowledge and information management, core skills development programmes aligned with sector qualifications, enhancement of monitoring, evaluation, review, delivery capacity and quality of skills development and effective and transparent corporate governance system.

· There was a problem with the reliability of information gathered through outsourced research functions. The service had since been moved in-house and process of recruiting staff to strengthen its internal research capacity was underway.

· Budget: The MQA received an unqualified audit report in 2012/13. In spite the challenges in the mines, skills levy income continued to increase. The discretionary grants expenditure budget was expected to increase from R302 million to R604 million owing to new SETA Grant Regulations. The total income for 2013/14 was R763 million, estimated expenditure R869 million and the net surplus R84 million. R393 million has been committed for multi-year funding of bursaries and artisan training.

· The MQA assisted historically disadvantaged employees in the mining sector with advanced management training to improve their skills. A partnership with certain FET colleges was formed to assist with lecturer training and development.

· MQA partnered with various higher education institutions for lecturer development. Service level agreements (SLAs) were signed with University of Pretoria to conduct review of SSP and University of Johannesburg to conduct a study on reasons for poor results in the Government Certificates of Competency and propose an improved competency model.

· Three postgraduate students will be funded to study mining related qualifications and the three would serve in the research unit of the MQA as interns.

· Six Memorandum of Understanding (MOUs) were signed with FET colleges throughout the country. The College of Cape Town had been accredited as a trade test centre for the Goldsmith qualifications.

· MQA was concerned that mining companies were reluctant to take on National Certificate Vocational NC( V) graduates and were biased towards Report 191 graduates. The concern was about the low quality of NC( V) graduates.

· MQA had Maths and Science project to increase a number of Grade 12 learners who pass those subjects in order to enroll in mining related areas of study. The project produced one of the top three 2012 matric performers in the country who was from Limpopo Province.

· Through the Department of Mineral Resources (DMR) training, MQA planned to improve capacity of existing inspectors within the DRM so as to improve inspection on occupational safety and health compliance by mining companies.

· In terms of unemployed youth, 90% of MQA projects were targeting youth development. New initiatives to improve efficiencies included; establishment of monitoring and evaluation unit, organisational structure review and centralising supply chain management processes.

3.2. Manufacturing Engineering and Other Related Services SETA

Mrs P Baleni -Nzimande: Chairperson made the following introductory remarks:

· The Strategic and Annual Performance Plans 2013/14 of MERSETA were in line with government policies including the SSPs.

· MERSETA had largely met all its targets set for the previous financial year. An impact assessment study was conducted in 2012 and the recommendations of the report pointed that the impact in the programmes offered by MERSETA needed improvement.

· In terms of governance, the board was fully stable including its sub-committees which met regularly. The entity received unqualified audit report with no matter of emphasis.

· There was a challenge with one official who transgressed supply chain management policies of the entity and was since dismissed after following disciplinary processes. The case had been handed over to the police.

Dr R Patel: Chief Executive Officer led the presentation which highlighted the following key issues:

· All targets had been achieved and exceeded with the exception of one (employed bursaries entered).

· Artisan Training Programme had placed MERSETA at the forefront of SETAs that were responsive to the most urgent strategic priorities.

· Challenges of MERSETA included; aligning industry needs with national development imperatives, financial and budgetary constraints, improving the efficiency and effectiveness of skills development and improving employer buy-in on challenges facing the sector.

· In terms of administration, MERSETA had sound financial accountability in line with King III report. Monitoring and evaluation of projects was conducted.

· All the services of the MERSETA were performed in-house except the internal audit which was outsourced owing to lack of internal capacity within MERSETA.

· With regard to skills planning, an internal research inventory hub was established to conduct research on skills requirement of the sector. Collaborations with other SETAs on skills planning and development were established.

· In terms of partnering with FET colleges, MERSETA provided work placement for FET graduates and training programmes for lecturer training and development. Companies were incentivised to take on graduates for work experience.

· To improve career guidance, the Science, Technology, Engineering and Mathematics (STEM) programme was aligned to career development. Partnerships with schools and higher education institutions were also in place. 50 students at UJ in the Psychology Department were trained to be career guidance practitioners at FET Colleges. MERSETA had a career bus with eight computers that travelled throughout the country. A learner tracer study was conducted annually.

· In terms of workplace skills development, grants allocation was aligned to equity targets and workplace productivity.

· In supporting Cooperatives and Small Medium Enterprises, an SME skills audit was conducted and technology based entrepreneurship support was provided.

· MERSETA had seven regional offices nationally and skills development programmes in all provinces which included higher education institutions, industry, unions and FET colleges.

· MERSETA was putting a research paper in place on a comprehensive strategy for artisan development. It also identified 15 lecturers to get trained on pedagogy for artisan development through partnership with British Council.

· The entity had seven (7) offices in 9 provinces, Mpumalanga office served Limpopo while the office in Bloemfontein also served Northern Cape.

· MERSETA had international partnerships with companies and institutions in Britain, Germany and Netherlands on artisan development. It also had national partnerships with other entities like Unemployment Insurance Fund (UIF) which allocated R168 million to address budget shortfall for skills development.

· Budget: The total budget for 2013/14 was R1.1 billion, total commitments R914 million, current liabilities R203 million and available reserves R17 million.

4. Observations

Mining Qualifications Authority

4.1. The Committee noted the following concerns:

· Allegations of R25 million tender awarded to Colliery Training College (CTC) without following proper supply chain management processes.

· The Annual Performance Plan 2013/14 did not clearly articulate on strategic targets, performance indicators and annual estimated performance.

· Inadequate absorption rate of learners to workplaces upon completion of learnerships .

· Inadequate management and performance in the ABET programme.

· Skills development programmes were only concentrated in mining communities whilst the need for skills was a national challenge.

4.2. The Committee noted following progress:

· Implementation of the turn-round strategy to limit the use of consultants and development of internal capacity.

· Plans to increase the pool of black professionals through the Historically Disadvantaged South Africans (HDSA) development project.

· Partnerships with FET colleges for lecturer training and development.

· Plans to increase the number of learners with Maths and Science skills to access career opportunities related to the mining sector.

· MQA moved away from funding short courses.

· A task-team had been established to look at the beneficiation of minerals through jewelry design qualifications.

Manufacturing Engineering and Other Related Services SETA

4.3. The Committee noted the following progress:

· Good governance and sound financial management at MERSETA.

· Good and successful completion rate of the ABET programme that was diversified with different skills.

4.4. The Committee noted the following concerns:

· Inadequate implementation of RPL programme.

5. Conclusion

The Committee was pleased with the commitment showed by SETAs in collaborating with FET colleges and Higher Education Institutions for skills development programmes something that was a challenge in the past. In terms of governance, both SETAs received unqualified audit in the previous financial year and their boards were reported as functional with no challenges.

The Committee was concerned with low targets that were reported as overachieved by SETAs. It was further proposed that both SETAs should revise their targets to meet the demands for skills development needs. Distribution of skills programmes remained bias towards areas where most industries of the SETAs were located and, this remained a serious concern for the Committee. Furthermore, absorption of learners to workplaces upon completion of learnerships remained a concern owing to resistance by industries.

6. Recommendations

The Portfolio Committee on Higher Education and Training requests that the Minister of Higher Education and Training ensures that the following recommendations are considered and implemented, and provide feedback within three months of adoption of this report by the House:

6.1. Skills Programmes

· Distribution of skills programmes to provinces was biased towards areas with industries. The Department should ensure equitable distribution of skills programmes by SETAs to benefit all communities that are in need.

6.2. Irregular tender

· It was alleged that Colliery Training College (CTC) was awarded a tender of R25 million without following supply chain management processes. The Department should urgently investigate these allegations and submit a report to the Committee.

6.3. Targets

· SETAs reported over achievement in almost all the targets they set annually. The Department should review all SETA targets to ensure that they were in line with national skills demands.

6.4. SETA Grant System

· Requests for funding often exceed available funds in SETAs. The Minister through the National Skills Fund should assist SETAs in meeting the shortfall.

· Expenditure ceiling for SETAs: SETAs experienced challenges with the expenditure ceiling put by the National Treasury as it affected implementation of planned projects. The Minister of DHET and the National Treasury should consider reviewing the ceiling.

6.5. Work Placement

· Majority of learners that completed the training or learnership programmes offered by SETAs experienced serious challenges in finding employment. The Department should engage with industries to cooperate in opening their spaces for work placement purposes.

6.6. Recognition of Prior Learning (RPL)

· Inadequate implementation and commitment of SETAs towards RPL remained a serious concern for the Committee. The Department should assist SETAs with effective implementation of RPL.

Report to be considered.