SSETA, InSETA & CETA Annual Reports 2021/22

Meeting report

The Chairperson welcomed everyone present and said the Services Sector Education and Training Authority ( SETA) would give a briefing on its work at Motheo College at the National Artisanal Academy. The Motheo College would be coming next week, but this would avoid having the Services SETA back again next week. The interaction with the SETAs was informed by the recommendations of the Auditor-General of South Africa (AGSA).

Services SETA on its 2021/22 Annual Report

Mr Stephen de Vries, Chairperson: Services SETA (SSETA), said that SSETA would present its deviations, details of the irregular and fruitless expenditure, the implemented consequence management, and the audit action plan with the timeframes to address the findings of the AGSA.

In November 2021, the mitigation plan was presented to the Committee to address audit findings in the previous financial years, and in March 2022, progress on that plan was presented. The SSETA was beginning to see the benefits of those interventions. Performance had improved and had doubled compared to the previous financial year. Though the audit finding was negative, there were continued efforts to improve the internal controls, and the SSETA was working closely with the AGSA.

Mr Menzi Fakude, Chief Executive Officer (CEO), SSETA, said the presentation covered the organisational performance, wasteful and fruitless expenditure, irregular expenditure, the audit plan and its way forward. It had achieved an overall of 80% of its targets, which was double compared to the previous financial year.

Wasteful expenditure was recorded at R138 million due to non-compliance with relevant legislation. Irregular expenditure was reported at R1.495 million, resulting from five legal cases. All matters relating to irregular expenditure had been assessed and would be presented to the AA in the meeting of November 2022 for assessment for condonation. The loss control function review identified no element of fraud or any other criminal intent. All matters relating to fruitless wasteful expenditure have been assessed and would be presented to the accounting authority (AA) in November for assessment for a write-off.

As for the audit outcome, the SSETA had been qualified on commitments since 2018/19 for four consecutive years.

Insurance SETA on its 2021/22 Annual Report

Ms Gugu Mkhize, CEO: Insurance SETA (InSETA), took Members through the presentation and commenced with the impact of its mandate. The total beneficiaries for the 2021/22 financial year were 13 357, with an expenditure of R255 million. R140 million was spent on 1 107 employers that were supported by the InSETA, while R8 million was spent on the exposure of young people in the industry, where over 5 000 learners attended.

The InSETA had achieved 86% of its targets for the financial year under review.

Project Fourteen was aimed at enhancing organisational efficiency and performance, with an 86% baseline for performance excellence. However, the InSETA had received a qualified audit opinion, which was a regression compared to the prior year.

(See attached presentation for more details)

Construction SETA on its 2021/22 Annual Report

Mr Malusi Shezi, CEO: Construction SETA (CETA), took Members through the presentation and reported that the overall performance for the 2021/22 period was at 62% compared to the 22% achieved in 2020/21.

Overall administration expenditure went up by 28%, and was over the budget by 8%. National Treasury had endorsed the request to exceed the 10.5% administration costs threshold. The increment was mainly due to the legal costs relating to litigation cases that arose during the administration process, office rental, audit fees and professional services. Irregular expenditure was incurred to the tune of R70.458 million relating to procurement processes and a legislated cap on project administration expenditure. The R5.562 million was related to the cumulative personnel costs of an official whose qualifications were fraudulent. The employee had been dismissed.

The CETA's expenditure for 2021/22 had increased by 3% against its improved revenue of 42%. This was underpinned by an improvement in its overall organisational performance in the previous year.

Irregular expenditure amounted to R76 million while fruitless and wasteful expenditure was recorded at R16.8 million. The AGSA had issued a qualified audit opinion.
 
Discussion

The Chairperson commenced with the Services SETA, and said that Members were obliged to exercise oversight over any entities that may have been flagged for certain issues. In programme three, the performance had doubled, but if there was no evidence to support the achieved performance, it did not inspire confidence at all. The progress achieved was not ideal, but Members did not want to end up applauding mediocrity. The progress was acknowledged, but she implored the SSETA to focus on the programmes holding it back. It was concerning when there was a demand from society, but there was a shortfall in performance to meet that demand. There was a demand for young people to have opportunities and when they could not meet those targets, it was concerning. The SSETA should inform Members how it would remedy that.

AGSA had expressed its concerns about the young people who had training opportunities with multiple SETAs – this was double dipping.

On transformation imperatives, there was an ongoing concern about young men loitering on the streets. The 73% representation of young women who have opportunities at the SSETA was great, but SSETA should seek to strike a balance with the proportion of representation. The lack of opportunities for young men created a huge crisis for the country regarding safety and security.

What did consequence management look like at the SSETA?

Mr T Letsie (ANC) said the AG had given the Services SETA the fourth qualification consecutively, which was extremely concerning, as indicated by the CEO as well. He had attributed it to recurring issues, but perhaps management did not know what else to do to improve the audit. The AGSA had expressed its opinion that there were material findings – the annual financial statement (AFS) was not submitted for auditing within the prescribed period as required by Section 55(1)(c) of the Public Finance Management Act (PFMA). The financial statements submitted for audit were not prepared in accordance with the financial reporting framework. The material misstatements identified by the auditors in the late submitted AFS were not adequately corrected, and the supporting records could not be provided subsequently, which resulted in the qualified opinion.

On 26 November 2019, the Committee raised an issue with the previous board and said that many of the senior management occupied positions they did not qualify for academically, and a series of meetings had resulted. The Committee had brought the South African Qualifications Authority (SAQA) to a subsequent meeting; unfortunately, it was the first time the new board had interacted with the Committee. This issue was raised to them by the Committee, which had asked the board to rectify the situation, and the board had promised to do so. Changes had been made, but the chief financial officer (CFO) remained. The paragraph he had read by the AG told a story of the CFO – they were responsible for what the AGSA had expressed. He lamented that this happened when people who were not qualified for positions were placed in those positions. The SSETA might have insinuated that it did not know what to do to change the audit outcomes, but if the CFO had been still active in that position, this situation would not change. Did management sign performance agreements? If so, this would not have been a subject of discussion. Must the SSETA collapse before changing the personnel responsible for this incompetence? If Members were to be difficult, the salaries paid to that person over the years could be classified as irregular. Perhaps this had to happen, because one could not have people occupying senior positions who did not know what they must do in those positions. This matter must be rectified. All the issues raised by the AGSA had been raised in the previous financial year as well. Their problems would not go away until these matters were fixed.

It was noted in the annual report that the board had experienced a challenge relating to a vacancy on the board because one of its members had passed away. What progress had been made to fill that board vacancy?

He said it was commendable that the Services SETA had achieved 80% of its targets. It was a significant improvement from the 40% in the previous financial year. However, it must aim for 100%. The AG had said there was a point where it could not obtain sufficient audit evidence in programme three. What verification processes were used to verify the reported achievement in programme three? How could Members trust that the reported achievement was the actual achievement if the evidence could not be provided? What consequence management was implemented against officials who failed to keep recording the process of the Services SETA to ensure the information was accessible for the AGSA to verify the reported achievement?

Referring to the Insurance SETA, he said there was an issue of irregular expenditure on board member fees because they had received their stipends before vetting; how were these board members appointed without vetting? Secondly, there was irregular expenditure related to communications and data line contracts, as these were paid after the expiry of the contracts; what happened here, and who was responsible for it? Was any consequence management implemented as a result?

The AGSA also indicated that InSETA had regressed in its audit outcome from the previous year, as it was now qualified, with findings. The qualified opinion was because of administration expenses that were not properly reported according to Generally Recognised Accounting Principles (GRAP) One. No assessment was performed on the levies, and the AG was unable to determine if the balance of those levies required any adjustments. It was unable to find the full extent of the misstatement. It was impractical. 

He asked if there were any members of the board with disabilities. On the InSETA website, three positions were vacant, but these were filled on an acting basis. How long had the incumbents been acting in those positions? Why did InSETA have a CFO and an acting CFO concurrently? The CFO (David Molapo) was paid R1.3 million from 1 March 2021 to 16 June 2021. The first acting CFO was paid R51 000 for three months. From October 2021, another CFO was paid R230 000 in March 2022.

There were learners funded for bursaries, but the AG had identified payments made to two learners above 65 years of age. Why were these learners funded for bursaries when they were over 60 years old? How did they get into the system? 63 learners who received full bursaries from the National Student Financial Aid Scheme (NSFAS) were also funded by the InSETA -- did the InSETA have a system in place to verify the bursary applications to ensure that learners were not “double-dipping”? What mitigating strategies would be put in place to address this fraud? The White Paper mandated the InSETA to make a ring-fenced allocation to the NSFAS, but it was not doing that. In the next meeting, Members needed a report on this ring-fencing of funds for the NSFAS to disperse on its behalf.

At the CETA, the AGSA had also raised a series of issues on obtaining audit evidence and commitments for the current year which were not properly accounted for due to the state of the accounting records. The CETA had complained about the AGSA, and virtually put the blame solely on it. He appealed that auditees should keep aloof from attacking the AGSA. This prevented Parliament from executing its legislative mandate. He encouraged the CETA to engage the AGSA on its required reporting standards.


What progress had the CETA made in filling the outstanding five board positions? On the non-financial performance, an achievement of 63% was reached, which was more than a 100% improvement from the prior year, yet there were instances where the AGSA could not verify the reported achievement. How could this achievement be trusted if the evidence was not obtained?

Ms D Sibiya (ANC) asked the CETA if the entity had underperformed on a critical programme such as unemployment learnerships, and the number of small, medium and micro enterprises (SMMEs) that were supported through the programme. What were the causes and how would the CETA ensure that it did not underperform in these performance areas within its core business? She recommended that the CETA submit a draft of a changed annual performance plan for the coming financial year.

She asked the Services SETA what commitments constituted the adjustments, and why it did not have complete contractual information, as this may mean that funds were paid without completed contracts, which created fertile ground for corrupt practices. Which employees had approved payments without the appropriate delegated officials, and what actions were taken against those employees?

She asked all the SETAs if the management believed their entities had adequate skills in project management to strengthen monitoring and the impact of funding. How did the SETAs conduct an impact assessment and analysis of supported beneficiaries?

Dr W Boshoff (FF Plus) asked the Services SETA about the nature of the disputed documents that the AGSA was not satisfied with – what was this related to?

He asked InSETA about what happened to the suspended employees. It was previously mentioned that there were “serial” suspended employees; were these employees tracked to prevent future harm by moving to other government institutions?

He had noticed the CETA equity numbers, but out of 130 employees, there was only one white employee -- was the CETA targeting whites as well to reach representivity?

Ms C King (DA) said the total irregular expenditure of these SETAs collectively amounted to R232 million, while the fruitless and wasteful expenditure amounted to R19.1 million. Her concern was that SETAs received 20% of the skills levy from various business sectors, but how correct was it to say that they met the sector skills plan targets identified in the various sectors? Secondly, the underspending of the Services SETA and InSETA collectively amounted to R864.7 million. The Committee continued to advocate for proper funding for all the institutions in the sector, but if the money allocated was not being used, how could they advocate for more funding for the SETAs when they underspend so significantly? It was commendable that they had achieved most of their KPIs, but had they been effectively set up to ensure proper skills development was enhanced in the various sectors? It could be that some of the targets were too low, which was something that the Committee must review.

The Services SETA had received qualified audit opinions for three consecutive years, but what interventions had been instituted by the Department to ensure that the audit opinion could have been improved this current financial year? She recommended that the Services SETA come up with an audit action plan that could be measured quarterly, and the Committee quarterly must review it to ensure the desired audit outcomes were achieved. Could the Committee be furnished with the list of the consequence management procedures taken against the responsible officials, and how future misdemeanours were going to be avoided?

She suggested it would be advisable for a bi-annual audit to be conducted on various SETAs to identify any underperformance or misrepresented statements or financial information, and rectify them before the AGSA conducted a full audit.

Lastly, there must be a legislative mandate to ensure that the White Paper prescripts were added in terms of legislation, as there was no proper legislation that spoke to ring-fencing the accounts of SETAs. The White Paper was a policy suggestion, not legislation. What procedures and processes were the Department willing to implement to ensure that there was legislation in place to ring-fence the disbursements to the NSFAS so there was one integrated funding model to avoid the “double-dipping” by students?

The Chairperson said that under programme three of the InSETA presentation, the set target was 420 technical and vocational education and training (TVET) students completing their work-integrated learning placement, but it had managed to achieve a placement of only 206. The reason for the non-achievement was that some programmes had started late in 2020/21 due to the unavailability of employers. What happened to the funds that would have gone to the difference of 214 students that were not achieved?

She asked the CETA what it attributed its inability to meet some targets, and what became the consequence for those who were awarded the responsibility to meet those specific targets. What collaboration did the CETA have with the Department of Small Business Development, the National Youth Development Agency, and others to support small businesses? The Committee believed that they must find a way of bridging the silos and strengthening the ecosystem within the government to support skills training.

The AG had indicated that two companies did business with the CETA whose credentials could not be confirmed with the Companies and Intellectual Property Commission (CIPC), but the concern was that there was no due diligence done before awarding the contracts to such companies. Had consequence management been implemented against CETA officials who neglected their fiduciary duties on this matter? It seemed there was a trend now, and the interactions with the National Skills Fund (NSF) forensic investigation report were ringing bells on the crisis in the sector, specifically regarding people who were given funds but did not meet the requirements to deliver the mandate of the government. It seemed like money was just being poured into companies and institutions that were there to self-enrich and neglect the work that must be done. She appreciated the work done on the NSF forensic investigation, because it brought to light many issues in the sector that they must look out for.

The AGSA had identified areas like invalid IDs captured into the system, and 85 learners being erroneously captured with different details. Was it known how these errors took place and if stipends were paid to people who were not learners? What mitigating strategies had been implemented to ensure this did not recur?

There was a need for the Committee to continue the engagements with some of the SETAs. It would be important to play a closer oversight role over the CETA because while the leadership was still trying to find its feet to stabilise, with vacancies in the process of being filled, the Committee would have to hold its hand. A standing principle of the Committee was that a close oversight role must be performed at institutions that Members were concerned about until they had been taken into their confidence about the changes being implemented. The challenges at the NSF had shown that challenges could not be left unattended for too long, because money was also being misappropriated. This could not be accepted, because Members voted for these funds. The taxpayers' money was being misappropriated, and although the Committee was not on a witch hunt, these matters must be resolved.

Ms J Mananiso (ANC) referred to the CETA being at odds with the AGSA, and asked if it was of the view that the audit opinion could have been unqualified if the AGSA had acceded to its request. Secondly, she asked InSETA why two senior finance officials had been suspended, and what progress had been made with their cases. She commended the InSETA for its quick action with the suspension of officials for maladministration and misappropriation of funds meant for skills development. Had it recovered the funds from those officials, which had caused it to incur irregular expenditure?

The Chairperson acknowledged the progress made by the SETAs so far, though there was still a long way to go. She said that where thorough details were required in responses, these may be submitted in writing.

SETAs' responses
Services SETA

Mr Fakude replied that the engagement with the AGSA had been to find practical ways to clear the negative audit outcome. The constraint was that the supporting documentation could not be made available – it became an exhaustive process. Since the deadline could not be extended, there would be further engagements with the AGSA to re-look and work retrospectively on the four consecutive qualifications/disclaimers.

Regarding the appropriate evidence supporting performance, two issues affected the opinion. The first one was the technical indicator description – they knew these were not assisting in terms of usefulness. The process to correct had commenced, but time had been against them. This would be rectified going forward. The second issue was on the definition of "completion of training." The agreed view was that it was when the certificates were issued.

There was a process in the prior year where once investigations were completed, disciplinary actions were undertaken and where financial loss had happened, this was assessed. This would be presented in the upcoming executive management meeting, which would decide the way forward regarding consequence management.

Cancellation of infrastructure projects took place, where letters were written but with no response. This was coupled with communication with other entities, where the entity was cancelling commitments but the evidence on the table during the audit was viewed as inadequate.

There was a need for impact assessments for projects. The sector had been chasing numbers, but there were still gaps. Efforts had been directed to assisting the learners with job opportunities after completing their qualifications.

He welcomed the proposal of quarterly audits by the AGSA to assist the entity in getting to the desired audit outcomes.

Mr De Vries referred to governance and the vacancy, and said the SSETA had been contacted by the Department recently, and the placement of that vacancy was within the ministry. Hopefully, the confirmation for that placement would soon be done.

As the governance structure, the board had started with deliberations, especially on issues related to the audit performance and audit outcome and how it was linked to senior management. This was being taken seriously, and all the concerns and suggestions raised by Members would be considered.

Insurance SETA

Mr Sihle Ngubane, Chairperson of InSETA, replied on the recruitment of disabled members to the board, and said it had not been considered yet. The board was in the process of recruitment, but among all the applications submitted, none indicated a disability. However, that would be considered when another opportunity came up for recruitment.

Ms Mkhize responded to the suspension of the two officials. She said the first official who was suspended was the CFO, who had resigned during the disciplinary process. The second employee was the finance manager, but the disciplinary matter was nearing an end and management should receive the closing report before the end of November. These two officials had been suspended, based on the issue of the building. An independent investigator was used, and a legal opinion was sought to ascertain if there was a need to recoup any money from the employees and if any criminal charges should be laid. The legal opinion stated that no money should be recovered from the employees, because the entity had derived benefits from the building, which it was still occupying and that no criminal charges should be laid against the employees.

As for the shortfall of 214 learners under programme three, the first quarter had been completed, and the funds were committed. The target had therefore been met in the first quarter. The InSETA was participating in the Presidential and Ministerial Work Integrated Learning Programme. It had committed to 500 TVET placements during this financial year, and these 500 learners had been placed in TVET colleges.

When targets were set, the InSETA worked closely with the Department on whether they were appropriately set within the limits of the available resources. There was a close relationship between its inability to achieve that 14% shortfall and the underspending seen in the previous financial year. The InSETA was overachieving all its targets set at the right level, and there was a relationship between the achievements and the available resources.

The InSETA had set up a monitoring and evaluation division which was resourced. In future, it would be able to address some of the issues raised regarding operational oversight and implementation and hold the service providers accountable. It also had contract management controls, where the implementing managers of different programmes performed periodical monitoring of programmes.

Regarding the 63 learners who “double-dipped”, the Department convened a compliance workshop a week ago on this matter. This matter was being addressed. Whilst this was acknowledged, not all 63 were funded in full. The InSETA had covered a certain portions of their studies, but this detail would be provided in the written submission of responses. As for the two learners over the age of 65 that were funded, the InSETA did not discriminate against people because of their age. However, the comments made by Members were welcomed. This had happened on the employer side, where the InSETA awarded the funding but the implementation was made by the employer.

The reason why three individuals were sitting in the CFO role within 12 months was that in the first three months of the year, the CFO had been placed on precautionary suspension with pay, which resulted in InSETA having to pay the acting allowance of Ms Buli Mswabuki, who stopped acting in September. Mr Thabo Maake was appointed to act in that position afterwards.

Regarding the vacant positions, the financial manager (FM) position was the current one where the employee was on precautionary suspension,  so there was a person currently acting in that position. As for the skills division position, it had been indicated in the presentation that a second investigation was undertaken, where an irregular award or allocation happened after the approval of the DG process. One of the managers under suspension was the skills manager, so an acting person is currently in the position. The acting manager for skills had been on suspension since April, while the FM had been on suspension since December last year. As for the Education and Training Quality Assurance (ETQA) position, this was difficult to find, and InSETA had already been in the market for this position twice. The last advert went out not so long ago and the closing date was next week, but a capable individual is currently acting in the position.

As for the irregular expenditure, corrective measures had been indicated relating to the building, involving the office lease and the irregular allocation, in terms of strengthening controls and closing the gaps, ensuring that there was restricted access to the allocation list.

Ms Zanele Malaza, CFO: InSETA, replied to the irregular expenditure and audit outcome questions. As for the irregular expenditure, a process of condonement was underway, but National Treasury had not supported the request. Subsequently, correspondence was received from the DHET requiring the SETA to apply the framework, paragraphs 57, 58 and 59, whereby it was allowed to remove the irregular expenditure from the notes to the financial statements after confirming that certain processes as outlined in the framework had been complied with. The second irregular expenditure issue was related to the Telkom/Nashua contract, where the InSETA was paying only the fixed costs and the expenditure that was declared irregular was the variable costs, because the contract was not signed for the variable costs that were paid through a debit order arrangement. The irregular expenditure had since been stopped, as well as the debit order.

The InSETA had received a qualified audit outcome. The root causes had been investigated and the main driver for the regressed opinion was mainly the system deployment, which had resulted in the misstatement of administrative expenditure and related payables as matters that affected the audit report. Internal controls have since been improved to ensure the completeness, accuracy and validity of all expenditure and related payables.

Construction SETA

Mr Fakude said that the issues of internal control deficiencies were already part of the action plan to address issues. However, the technical accounting treatment issue was the one that the AGSA and the auditees did not agree on. Engagements had taken place with the AGSA. Currently, the qualification was on one line item, which was the discretionary grant commitments. All other line items in the AFS were in order and not qualified. Efforts were in place to turn the deficiency issues around.

On the performance achievements without supporting evidence, as indicated by the AGSA, the audit was sample-based. For the annual report to be submitted, it had to go through the process of checks and balances by the AGSA for any inconsistencies between the reported information and what the AGSA had audited. The CETA report went through the same process, and there were no inconsistencies in the version submitted by the CETA.

On the late recruitment by providers, all award letters had clear conditions of timelines, recruitment and uploading of learner data into the information system that the CETA uses. The consequences were also outlined in the award letter if they failed to meet those timelines. If they failed, the award would be cancelled and given to another provider who could deliver. Even in the next cycle, the performance of the provider would be evaluated retrospectively. Those who walked away from the projects were not going to be awarded projects in the future.

The CETA did not bar any candidate from applying for any positions that the CETA advertised.

As part of the stakeholder engagement matrix, the National Youth Development Agency (NYDA) and the Small Enterprise Development Agency (SEDA) were the stakeholders to engage. The engagements had not yet commenced, but the CETA committed to starting that process.

On irregular, fruitless and wasteful expenditure, the CETA was attaining returns on the investment of its programmes. 74% of the R76 million had been attributed to its inability to be within the 7.5% of the DG's administrative threshold, as set out in the Act and the grant regulations. In this case, it would not mean that there had been transgressions, but their programmes themselves had not been able to fall within the prescribed threshold. However, the service had been delivered and they were able to roll out what was supposed to be rolled out.

At the time of the award of contracts, all necessary checks were conducted, but CETA had to conduct regular checks if the entities were still registered with the CIPC and compliant. These checks would now be conducted annually on all the service providers.

The CETA intervened by investigating the root causes of the erroneous learner information cases. Consequence management would be enforced against those who let the errors go through the system undetected. This was also linked to the fact that managers were signing off on inaccurate information. These processes would now be closely monitored, with a strong hand on consequence management. Interventions would also be put in place to track the officials responsible, right up to the managers who signed these off without conducting thorough checks and balances to ascertain if the information was accurate.

DHET's response

Mr Zukile Mvalo, Deputy Director-General (DDG): Skills Development Branch, Department of Higher Education and Training (DHET), spoke about the placement of graduates, and said this was a matter that had been elevated in the 2022 State of the Nation Address (SONA), where the President had committed to the placement of 10 000 TVET college learners. Through engagements with stakeholders, the SETAs committed to placing 14 000 graduates. The target of 10 000 graduates committed by the President should be met by December this year. The numbers were huge, and 10 000 could be a drop in the ocean, as the Department had a target in excess of 100 000 for the current financial year. At universities alone, there had been about 237 000 graduates in 2020. This was an increase from 221 942 in 2019, and every year the number of graduates increased.

About 12 507 students had completed the National Certificate (Vocational) Level Four qualification in 2020, and 57 245 had completed N6. These numbers were huge, and about 14 571 from the TVET colleges were engineering students.

Disbursements of the bursary system should be integrated. There was consensus that the NSFAS should be the sole bursary disbursing entity. This process commenced a few years ago when the Department had called on all the SETAs to work collaboratively with the NSFAS as the disbursing agent. At times, the  SETAs may not have the requisite capacity to disburse the way the NSFAS could. Most of the SETAs were already in collaboration, without the intervention of the Department. The SETAs were mainly directed by the Skills Development Act regarding grant regulations, and they had to develop their own sector skills plans. They must also identify occupations in high demand in their own sectors. No policy or legislation stopped the SETAs from working directly with the NSFAS. This would eliminate issues of double-dipping and the duplication of learners getting bursaries from different stakeholders in the post-school education and training (PSET) sector.

The Department met with all the SETAs that had received qualified audit opinions before the financial year ended on 31 March 2022, where audit action plans and outcomes were addressed. The SETAs were also accounting for the actions they were undertaking to the Committee, and the Department noted those to follow up on them. Part of the work with the SETAs involved quarterly progress reports. The Minister had also met with all the SETAs, one by one. The emphasis was that they must place audit-related matters before the quarterly meetings of the accounting authorities. SETAs must incorporate audit action plans in their performance agreements, especially the executive and senior management. Members had also raised questions about the performance agreements.

AGSA's response

Ms Zamahlangu Mditshwa, Senior Audit Manager, AGSA, said that the deficiencies in the internal control that had been picked and communicated must be dealt with, because they had a direct link to the audit outcomes. These were matters that would have been communicated for many years. For example, the AGSA communicated that project management remained an issue in the SETA space. From an audit point of view, the issue that had resulted in a qualification for the CETA was not necessarily an accounting issue, but had come from the deficiencies that the AGSA had communicated over many years. Project management was the biggest issue in the SETA space, and the audit action plans needed to address those deficiencies.

Chairperson's concluding remarks

The Chairperson said the boards of the SETAs must play a critical role, which was why it was important for these boards to be fully constituted. It must be ensured that there were competent service providers who had the responsibility of capacitating the students. Staff members must also be capacitated. If someone had demonstrated that they were not able to fulfil their responsibilities, they must not be given another opportunity. One must not play ‘mrabaraba’ with them when they have clearly demonstrated that they could not do the job. It would mean that funds were going to be wasted, which they could not afford.

All SETAs should revisit their audit action plans and provide the Committee with them within two weeks of this meeting. In their planning for next year, they must extract what had been recommended in this reporting period, reflect on it, and plan better. This opportunity must be used to reflect on how entities could plan better.

The sector must be unapologetic about implementing consequence management.

Detailed responses had to be submitted within seven working days from today’s meeting. Any questions that were not adequately responded to must be indicated to make the follow-ups.

The meeting was adjourned.