MER SETA, MICT SETA, ETDP, QCTO & National Skills Fund 2020/21 Annual Performance Plans; with Deputy Minister

Meeting report

Mr Buti Manamela. Deputy Minister of Higher Education, Science and Technology, said the entities in the Department understood that all planning that had taken place would have to be adjusted because of the pandemic. They would need to keep on operating their businesses, but in an unusual way. He asked Committee Members to be mindful that the entities would present not only their Annual Performance Plans (APPs) but would also highlight their adjusted plans in response to COVID-19.

Mr Zukile Mvalo, Deputy Director-General: Skills Development, DHEST, said the Department had instructed all entities to place priority on expanding postgraduate training and their employment opportunities. Following the DHEST’s introduction of the skills levy holiday, which lasted for four months, all entities making presentation today would indicate the impact of that holiday on their operations. The budget loss for them amounted to R6.1 billion. There would be R1.2 billion shortfall at the National Skills Fund, and R4.8 billion shortfall for the Sector Education and Training Authorities (SETAs). The Minister was having discussions with the Finance Minister to talk about the relief fund being provided to the Department to mitigate the negative impact.

Quality Council for Trades & Occupations: Strategic and Annual Performance Plans

Mr Vijayen Naidoo, Chief Executive Officer: Quality Council for Trades and Occupations (QCTO), presented the entity’s 2020/25 strategic plan and 2020/21 annual performance plan.

The CEO described the entity’s structure, and said a new research unit would be added to its Council in this financial year. Its COVID-19 response meant that 80% of its staff were working remotely from home, and the buildings were being disinfected.

The mandate of the QCTO was outlined. It was informed by the National Qualifications Framework (NQF) Act, the Skills Development Act, as well as the National Skills Development Plan. 

Providing a situational analysis of the entity’s internal and external environments, he said the entity was grappling with the future of work. E-learning and adopting multi models were innovations which had been brought forward by the pandemic. In the light of technological advancement, the situational analysis showed that there was inadequate skills knowledge in the entity. The QCTO was investigating ways to figure out a way to bring more expertise and cutting edge skills to the entity.

The CEO outlined the entity’s 2020/21 APP programmes:

• Programme 1: Administration

• Programme 2: Occupational qualifications management and certification, where he highlighted the QCTO’s progress on digitalisation.
• Programme 3: Occupational qualifications quality assurance.
• Programme 4: Research analysis and quality assurance.

Mr Innocent Gumbochuma, Chief Financial Officer: QCTO, presented the entity’s 2020/21 budget. Most of the entity’s grant was provided by the SETA, and a small fraction came from the DHEST. As the entity was human resource intensive, compensation of employees accounted for the bulk of its budget.

He commented on the adjustment to the reprioritised budget as a response to COVID-19, such as the R21 million reduction in capital expenditure, and said that the possible 20% cut from the DHEST would further exacerbate the entity’s budget.

Mr Naidoo reiterated that the negative impact of the budget cut would inevitably affect its APP targets, since the QCTO was dependent on its human resources, and was service-oriented.

Media Information & Communication Technologies (MICT) SETA

Mr Simphiwe Thobela, Chairperson: Media Information and Communication Technologies (MICT) SETA, said the board had appointed the entity’s accounting authority and they had hit the ground running. For this financial year, the MICT SETA was focusing on good governance and delivering a clean audit. It was in the process of integrating the Auditor-General’s (AG’s) recommendations into its daily operations. He assured the Committee that the entity was aware of the Special Investigating Unit (SIU) and Public Protector investigations against its previous officials’ activities, and said it was giving these matters adequate attention.

He hoped that the appointment of the entity’s CEO would be finalised in the next few weeks.

Mr Thobela said the notion of exploring an E-learning platform was being advanced by the COVID-19 pandemic. The MICT SETA was therefore building partnerships with other SETAs, with the aim of expanding this partnership across the country, as well as building partnerships with technical and vocational education and training (TVET) colleges. The ultimate purpose was to push e-learning platforms for learners.

Commenting on the implications of the four-month skills levy holiday, he said that the entity still had to conduct an impact assessment and then report back to the Committee on the aspects that would be affected.

Mr Mdu Zakwe, Acting Chief Executive Officer, MICT SETA, said the entity had filled 70% of its vacant positions. It had also conducted a COVID-19 perspective survey to see its level of preparedness the results of which would be made available soon. Its COVID-19 policy would be implemented -- its purpose was to keep all the employees safe.

The MICT SETA had also established a committee dedicated to the 4th Industrial Revolution, which involved ten universities across the country. He emphasised the important role of providing learners with platforms and tools for innovation, and expressed his sincere hope that in the near future those learners would come up with solutions to address South Africa’s problems.

Mr Zakwe described the entity’s five-year strategic plan, with its anticipated outcomes, outcome indicators, baselines and its five-year targets. The 2020/21 APP was also outlined.

He provided a detailed breakdown of the revision to the learning programme as a result of COVID-19 and the skills levy relief. In total, there would be a revenue loss of R376 million for this programme as a result of the levy relief. This would impact, for instance, on the number of unemployed learners enrolled in learnership programmes on an annual basis. The original budget had set the target at 3 510 but it had now been reduced to 1 910. The total targets under this programme would also be affected, decreasing from 11 845 to 6 196.

Ms Tiny Mokhabuki, Chief Financial Officer: MICT SETA, said the entity received 95% of its budget from the skills development levy and 5% from the interest it earned through investment portfolios. She indicated that its administrative costs might exceed its 10.5% limit required by section 2 of the SETA grant regulations as a result of the budget shortfall.

Mr Zakwe highlighted what the entity had learned from the World Skills Competition programme in Russia, commenting that very few medals won came from Africa. He stressed the importance of strengthening the partnerships between the private sector and the TVET system for innovation and skills. This had worked efficiently in China.

The Chairperson interjected and said the entity’s allotted time slot had expired. He commented on the bad presentation experience, as many slides had not been shared and they kept on being muted. He reiterated the rules -- that presentation slides must be shared to Members so that they could follow them.

Education, Training and Development Practices (ETDP) SETA

Mr Duncan Hindle, Chairperson: ETDP SETA, recognised that it was a difficult and challenging time. The accounting authority had been meeting and keeping on top of matters. He commended the CEO for keeping senior management on track and getting a limited number of staff back to work. He emphasised that it would definitely be challenging for the entity to meet all its targets in this financial year as a result of COVID-19 and the skills levy relief. 

Ms Sesi Nxesi, Chief Executive Officer: ETDP SETA, presented the entity’s five-year strategic plan and 2020/21 APP, and said it drew its insight from the National Development Plan (NDP) Vision 2030.

The Chairperson requested the CEO to change the presentation format to PowerPoint, as it was currently being presented in the PDF format, and the font was too small for Members to see.

She apologised and tried to zoom in.

However, the Chairperson asked the ETDP SETA to make its presentation later so it would have time to change to the correct document file.

Manufacturing, Engineering and Related Services (MER) SETA

Ms Kate Moloto, Chairperson: MERSETA, indicated that as the Department had lifted the moratorium, the filling of the CEO position would take place in due course.

Mr Wayne Adams, Acting Chief Executive Officer, MERSETA, presented the entity’s five-year strategic plan, its 2020/21 APP and budget.

He took the Committee through MERSETA’s five-year achievements and challenges from 2014 to 2019, and highlighted the low percentage of black females in the sector. He commented on the implications of the Fourth Industrial Revolution on the sector.

Outlining the entity’s strategic plan, he said it had adopted the Batho Pele “value people first” as its principle motto. He provided details on how MERSETA’s strategic plan was informed by the NDP, the National Skills Development Plan, the Industrial Policy Action Plan, as well as the Medium Term Strategic Framework (MTSF).

In response to COVID-19, MERSETA had had to repurpose several of its projects. Those included Economic Complexity in the MER sectors project, the Youth Entrepreneurship Project, the Post-School Education and Training (PSET) Cloud, and the VIRO-VENT Skills innovation challenge. It also supported the government’s call to support the economic stimulus for small Medium and Micro Enterprises (SMMEs).

Mr Adams outlined MERSETA’s strategic focus areas and their anticipated outcomes, which were:

• Ethical governance and resourced, capable MERSETA operations.
• Skills for productive enterprises within the social economy.
• PSET education, training and skills development.
• Skills for a transformed SA MERSETA sector.
• A skilled, agile and flexible current and future workforce.

The CEO outlined the entity’s strategic projects, one of which was the recognition of the 4th Industrial Revolution. Outcome indicators included an unqualified audit report, with no findings from the Auditor-General.

Ms Disa Mjikeliso, CFO: MERSETA, presented the budget, and stressed that the skills levy holiday that it would have a negative impact. She hoped there would be some form of concession for the entity. It had made adjustment to its budget due to COVID-19. For instance, its forecast on levy income projected that from September 2020, it would receive only 80% of its normal levy amount. The projection was made on the assumption that economy would not recover in a short-term.

Education, Training and Development Practices (ETDP) SETA (Continued)

Ms Nxesi gave her apologies for not having prepared slides and inconveniencing the Committee.

Its key MTSF objectives were to eradicate poverty, inequality and unemployment. These priorities included economic transformation and job creation, education skills and health, consolidating the social wage through quality basic services, spatial integration, human settlements and local government, social cohesion and safe communities, a capable ethical and developmental state, as well as a better Africa and world. The situational analysis of the entity took into account the staffing, accounting authority, operating environment, financial environment and external factors.

The ETDP SETA had achieved 84% of its APP targets. Its performance goals were:

• Programme1: improved organisational efficiency and effectiveness.
• Programme 2: balanced supply of education and training in the Education, Training and Development (ETD) sector.
• Programme 3: Improving education training and innovation.
• Programme 4: Quality assurance.

There was not only a shortage of hard skills, but also soft skills such as organisational leadership and planning skills which were lacking in the entity.

Ms Nonhlanhla Mona, Chief Financial Officer: ETDP SETA, said the entity would lose an estimated R397 million in the 2020/21 financial year as a result of the four-month levy holiday. In addition, provincial Departments of Education may not be in a position to make contributions due to nationwide budget re-prioritisations to cater for the additional critical needs of departments to provide essential COVID-19 equipment and services.

National Skills Fund (NSF)

Mr Mvuyisi Macikama, CEO: National Skills Fund, presented the entity’s five-year strategic plan, its annual performance plan and budget.

He outlined the NSF’s legislative and policy mandate, and explained the policies that informed its five-year development plan. He also explained the Department’s White Paper on science, technology and innovation.

The NSF’s anticipated outcomes included identifying and increasing the production of occupations in high demand, linking education to the workplace, improving the level of skills in the South African workforce, increasing access to occupationally-directed programmes, supporting the growth of the public college system, skills development support for entrepreneurship and cooperative development, encouraging and supporting worker-initiated training, as well as supporting career development services.

It was focused on its transformational priorities, which involved gender, youth, geography, race, class, people with disabilities, HIV/AIDS, as well as equity and access.

Ms Melissa Erra, Chief Director: Strategy, Innovation and Organisational Performance, NSF, referred to the NSF’s five-year strategic plan, and said it had done a re-analysis, taking into account the impact of COVID-19. She outlined the strategic framework and stressed technology’s critical position in the entity, such as artificial intelligence in planning. The strategic plan outcomes included the development of quality skills, an improved PSET system, as well as organisational sustainability.

Mr Wean Minnie, NSF CFO, provided a breakdown of the budgets which had been made before and after COVID-19. He informed Members that the four-month levy holiday would result in an estimated revenue loss of R6.4 billion, of which R1.3 billion would be from the NSF and R5.1 billion from the SETAs. However, due to relief funds provided, the amount to support learners, SMMEs and the PSET system had increased.

Mr Gwebinkundla Qonde, Director-General: DHEST, said the NSF needed to build capacity and intensify its staff training, and as a result of the budget shortfall, it would also require budget reprioritisation. He remarked that it looked like the NSF would not be able to recover its revenue loss from the four-month levy holiday. He had also noted the many commitments made during the presentation.

The meeting was adjourned. The chairperson indicated that it would resume in the afternoon.

Discussion

Mr W Letsie (ANC) commented that today marked exactly one year since they took oath as Members of the Sixth Parliament. He reminded everyone of the trust that South Africans had placed in them.

He commented on the SETAs before the Committee which were under investigation by the Public Protector, and added there were a large number of SETAs, such as AgriSETA and Fasset which were also under investigation. Given the importance of SETA as the core national skills agency, he wanted them to elaborate on the details of those investigations. He recalled a meeting on 1 September last year, where the Committee had discussed the new scope of SETA and their work, and the Deputy Director-General had said the biggest challenge with SETAs were their irregular expenditure, as had been identified in the AG’s findings. He said the irregular expenditure incurred by MERSETA had been R1.5 million, Fasset R56 million, and W&RSETA R84 million, and asked if disciplinary action had been taken against those responsible for those irregular expenditures. He wanted to know more about the progress with those cases.

Following the Minister’s announcement that students and learners must be paid throughout COVID-19 period, he enquired if they had indeed been paid. He also asked about the mechanisms, whether manual or digital, employed to capture learners’ attendance in order for the Department to pay them.

He commented on the salary increases at SETAs, and said that only one SETA had implemented a salary freeze for this financial year. He wanted to know whether the decision had been consulted with employees and unions.

Referring to the high unemployment rate among SETA-trained learners, which amounted to 57%, he said that it could be an indication that there was a misalignment between the curriculum and the skills that were needed in the workplace. Had the SETAs engaged in wider consultation with industries and sectors to understand what the actual skill demands were?

Mr Letsie then enquired about QCTO’s progress in procuring its own buildings. It had been agreed that it had to expedite purchasing their own buildings because the rental was costing the entity R8 million. This view had been supported by the Finance Minister, and an amount of R12 million had been approved and earmarked for such a purchase, so when was QCTO planning to procure the building?

He asked the accounting officer at the MICT SETA for more details of the Public Protector’s investigation involving its previous CEO, who had hired a senior manager without advertising that position and having appointed two companies of his own nephew to do the entity’s Information Technology (IT) work. Was the MICT SETA still doing business with the nephew’s companies? If so, he wanted to know the reason and if not, he wanted to know when it had been terminated. He also asked if the MICT SETA had tried to recover the loss due to these irregular procurements. 

He asked the MICT SETA about progress in the coordinated approach to acquiring its e-learning system, and the role that the entity plays. He acknowledged that having one system for all SETAs would save a great deal of expense. He urged them to support South African software businesses in order to fulfil the transformation goal, and not to use American software companies such as Microsoft.

He wanted to know how the private sector had approached the MICT SETA to establish the public private partnership referred to in the presentation. He did a private company send its proposal, and to whom had it sent it?

He asked how many learners currently in the SETA’s system were paying.

He asked the MER SETA accounting officer about the progress in implementing the Public Protector’s remedial actions set out in June 2018. He commented on the lack of concrete strategies in the presentation about how to support black industrialists, adding that it had become a habit at all levels of government to purchase items from abroad, rather than source them within the country.

He enquired about the salary freeze at MERSETA, and asked if employees had agreed to this. Had it affected staff morale? He expressed his confusion at its decision to budget for a R55 million deficit in its mid-term budget. Had all senior management agreed to contribute a portion of their salaries to the COVID-19 relief fund? If so, he wanted to know the amount that they had contributed.

Mr Letsie asked the Department whether it would save some expenses if bursary items for post-graduates were transferred to the NRF, and for under-graduates were transferred to the National Student Financial Aid Scheme (NSFAS). It was an administrative burden for 25 SETAs to manage 25 individual bursaries. He also wanted the Department to inform the Committee how much had been spent on paying out bursaries, as well as the management fees incurred for paying bursaries currently. The administrative fee to handle the payout of bursaries was also substantial.

He was cognisant of the negative impact the government’s skills levy four-month holiday would have on SETAs, but he urged them to work with limited resources to achieve the best value-for-money result. He also urged them to eliminate fruitless and wasteful expenditure so that they would have more resources to work with.

Dr W Boshoff (FF+) expressed his concern that there was no audit risk committee at the QCTO. He thought this would be valuable for the Council. He sought clarity on the relationship between the QCTO and the independent TVET colleges, and on the uptake of occupation qualifications.

He remarked on the lower income received at entities from the National Skills Fund, and explained that this amount was compatible with the total workforce numbers, as it came from a certain percentage of the workforce’s remuneration.  

Ms N Mkhatshwa (ANC) commented that the SETA needed to work to restore people’s confidence in it, and to improve the outcomes of its learning programmes. She said there were overlapping areas among NSFAS, the NSF and the National Research Foundation (NRF), and suggested the Department should review the distribution of its funding to students.

She wanted to know what SETA’s role in the building of a proposed science and innovation university was, and if there had been any engagement with stakeholders around the subject. She recognised that manufacturing and engineering were the key drivers for employment and industrialisation.

She highlighted the minority status of females in the manufacturing and engineering fields, and also raised concern about gender-based violence. She asked if there were any specific policies to protect female workers and learners at SETA.

Mr B Nodada (DA) addressed the Deputy Minister on the many challenges that SETA was facing. The SETAs were subjected to many criticisms, ranging from the AG’s findings, their APPs and end of year reports, to the question around SETA’s value for money. In light of that, he wanted to know if a strategic overview of the different SETAs was taking place, or if that was the work currently being done by the skills development branch in the DHEST.

If SETA had a certification backlog, he wanted to know its extent and when it would be cleared.  Were any outstanding stipends due to students? If so, he wanted to know the cause of the delay in payment. He asked whether SETA had a system of tracking and tracing those students it had trained.

Commenting on curriculum development, he said engagement with industries and sectors was needed to ensure a match between skills supply and demand. He wanted to know what information and inputs the three SETAs present had got from those engagements.

He asked the QCTO why the Council was not yet appointed.

In the presentation, it had been mentioned that only R124 million out of the R275 million applied for had been approved and given to QCTO. Did the shortfall of budget mean that it could not take over the quality assurance function from the SETAs? What strategies were there to mitigate the risks?

He said about 14 quality assurance functions had been sent for approval since 2015, and wanted clarity on why the Minister had not given approval yet. Furthermore, since QCTO’s business plan had not been approved, would it still be given the mandate for quality assurance of SETA qualifications?

Referring to the curriculum review which began in 2018, he asked which TVET curriculum subjects would be reviewed, which stakeholders had taken part in the review process, and when those revised curricula would be started at the SETAs. He asked QCTO to provide the Committee with a list of the new qualifications related to strategic integrated projects, so that Members could look at the types of curricula which were related to TVET colleges.

He suggested shifting the functions of SETAs’ quality assurance to the QCTO, within the confines of its approved business proposal.

He requested for more details of the Public Protector’s findings on the MERSETA. What had happened to the previous CEO, and what charges had been brought?

As the National Skills Fund had exceeded its budget by R1.8 billion, did this mean it was unable to execute its mandate?

Mr P Keetse (EFF) said he was amazed at how the SETA had turned into something that was so disappointing and completely irrelevant to its initiatives in the beginning. Its close association with corruption was damaging to South Africa’s skills development.

He expressed his concern on the accessibility of SETA. In his view, only those who were close to SETA and who knew people who knew SETA, were utilising its resources. How many people in the rural areas were aware of the existence of SETAs?

Since there were now about two million students in public universities, he commented on the limited capacity of NSFAS to cover students’ fees. Out of the 21 SETAs, how many students were they covering?

He wanted to know what the Department had done to address the NSF’s supply chain issue, since lucrative tenders and a conflict of interest among decision-making board members had been the reasons that had led to the destabilisation of this institution.

He concluded that SETAs had deviated from their original initiative, which was to industrialise South Africa. He had lost faith in SETA, and urged it to restructure and remodel.

The Chairperson said that it was the norm that usually the AG’s office would brief the Committee of entities’ audit outcomes before the Committee received the entities’ briefings. However, the AG had indicated that their reports had not been finalised due to COVID-19, and the Committee had not received the updated version of those entities’ audit reports. It was not those entities’ fault.

Ms J Mananiso (ANC) recognised the importance of the training work that the SETAs should be doing in relation to economic development.

Given the male-dominated situation at MERSETA, she asked if there was gender-based violence there, and if there was any specific policy to deal with it.

She asked the ETDP SETA whether there was any programme related to COVID-19 to train educators since they would be expected to go back to schools, following the announcement of the Minister of Basic Education.

She believed that one SETA had a tracking and tracing programme, but it played a limited role, so she suggested expanding tracking and tracing to all SETA projects.

She suggested it would be wiser to develop one career guidance document for all SETA learners.

There was a need for a specific policy document at SETAs for the 4th Industrial Revolution, since even Members were now relying on modern technology to convene this meeting.

She wanted the SETAs to present a template for Committee Members so that they could monitor their progress on transformational issues. 

The Chairperson commented on presenters’ poor management of the given time. As some entity presenters had not been able to complete their presentations within the given time period, he advised them to capture the essence of their presentations. He repeated the strict timing rule in Parliament.

He enquired about the charges being brought forward in the investigations, and whether recommendations had been implemented and how far they had been implemented. With regard to the Public Protector’s recommendation, he wanted to know what the investigation on MERSETA’s previous CEO was about, and what the findings and recommendations were.

He commented that the ETDP SETA seemed to be doing a good job. However, the presentation had shown that there was deterioration in financial skills at TVET colleges under programme 3, which he flagged as an area of concern. He supported the NSF’s decision to create another position for a second CFO, in collaboration with the SA Institute of Chartered Accountants (SAICA), but he was concerned that the unsustainability of the intervention had the effect that something needed to be done to assist the finance skills development of TVET colleges. He therefore asked if there could be a programme devised to intervene in their finances. He pointed out that financial mismanagement was the reason why TVET colleges failed in that area.

He had noted the consistent mention of a surplus in NSF’s presentation. He wanted to know the exact amount of the NSF surplus in the balance sheet.

He enquired about a programme which was supported by the NSF to build 11 TVET colleges – what the progress of that programme was, and whether the amount was still budgeted in this financial year, given the pandemic impact.

 

QCTO’s Response

Mr Naidoo responded on the procurement of QCTO’s own building, and reported that it had had to write to the Director-General to make the request. Later, they had got a response from the CFO indicating the QCTO still had to furnish the application with supporting documents, which had to include its building structural analysis and the geographical location of the building. This project was in progress and the QCTO would make submission. Once the submission was made, it would require a ministerial decision before the QCTO would be permitted to procure its own building.

Regarding the salary increase, the QCTO took instructions from the Department of Public Services and Administration (DPSA), so it had not taken decisions on the matter yet. He also pointed out the apparent budget constraints as a result of COVID-19.

He explained that the appointment of the board was a ministerial prerogative which the Deputy Minister had explained in the beginning of the meeting. He was not in a position to comment, and recommended that Mr Boshoff should seek clarity from the Department.

Regarding its impact on TVET colleges, he said that QCTO did not make a distinction between public and private TVET colleges on taking the QCTO qualifications. In fact, the QCTO had a very good interaction with the Association of Private TVET colleges. For public TVETs, there were 13 programmes which they were undertaking that were not QCTO qualifications and were mainly linked to occupational qualifications in trading. There had been a mention in the presentation of 25 TVET colleges, as well as others, which had taken QCTO qualifications, but they did this by virtue of their own funding.

Responding to Mr Nodada’s question, he said the QCTO had originally made a submission in its business proposal requesting R275 million as its budget. The rationale behind it was to centralise all quality assurance functions which SETAs were currently performing. Due to insufficient budget, the QCTO could not perform that function, and had had to delegate it to the 21 SETAs. Later, it was changed to 14 SETAs, where QCTO would take over their quality assurance functions. The QCTO had applied for R145 million for the financial year, but had received only R97.2 million.

Mr Naidoo said there had been engagement between the QCTO, the SETAs and the Department as a strategy to mitigate the gap left by the shortfall in budget. The QCTO entered into service agreements with SETAs, so it could handle the quality assurance mandate. By entering into service contracts and formalising each stakeholder’s role, it would mitigate the risks in the skills development environment. Since SETA received funding for quality assurance, SETAs would still do their own quality assurance, while the QCTO would perform oversight of their quality assurance.

On the revision of the TVET curriculum, the QCTO had reconstructed the N4 to N6 levels of business and general studies into occupational qualifications. It had converted all business studies into occupational qualifications. It was currently working on the engineering curriculum, so it was working with universities and universities of technology because of the requirement of the Engineering Council of South Africa. During this whole process, there had been close collaboration between the SETAs, the QCTO and TVET colleges. Levels N1-N3 were not within the QCTO’s mandate, but they fell within the scope of Umalusi. However, the Minister had signed a contemplative document, which aimed to deliberate on the phasing out of N1 to N3. If that happened, then TVET colleges would have to embrace N1-N3 qualifications.

MICT SETA’s Response

Mr Zakwe provided more details on the Public Protector’s report which came out on 15 Nov 2019 with certain recommendations related to the MICT SETA. It had duly submitted documents to the National Treasury and AG on what had been done to comply the remedial recommendations. In the recommendations, the priority was to ensure that all managers and supply chain management officials were being trained on the proper procedures and processes. A workshop had been held subsequently to comply with that recommendation. The second recommendation was for MICT SETA to implement a declaration policy for all officials. It was a common clearance which every manager and board members need to go through, to declare that they had no conflict of interest with any business dealings. It regularly conducted a search on the Companies and Intellectual Property Commission (CIPC) according to their identity document (ID) numbers to detect if there was any sign of a conflict of interest.

The SIU investigation into the former CEO’s corruption case was 90% complete, and the matter was with the HAWKS now. He had been approached by HAWKS and questioned as to the former CEO’s whereabouts. The other investigation had been about the former Acting CEO’s professional conduct and behaviour. This matter was currently at the Commission for Conciliation, Mediation and Arbitration (CCMA), and was still to be concluded.

Mr Zakwe remarked that what the MICT SETA had learnt was the need to streamline business processes. There was a need to include all stakeholders around the country under one unit. There was also need to improve inter-departmental liaison to ensure SETA service delivery.

The Chairperson interjected and remarked on the allegations and findings. He asked for the details to be submitted in writing in the next seven days.

Mr Zakwe said the irregular expenditure was related to the two officials who had resigned from the entity -- the former CEO and the former senior manager. The irregular expenditure was related to a contract extension which exceeded the 15% threshold, which was in contravention of the National Treasury’s guidelines, as well as the incorrect awarding of contracts, and single sourcing without any justifiable reason.

The MICT SETA had developed its own financial capacity to accommodate learners throughout COVID period.

The mandate on salary increases had come from the board. The MICT SETA still had to negotiate with the union, taking into account of both affordability and the cost of living.

The MICT SETA had great engagements with industries and sectors. It had been able to apply successfully for its 4th Industrial Revolution (4IR) qualification through the QCTO.

Regarding private public partnerships, the National Youth Development Agency and KwaZulu-Natal (KZN) Freedom Commission were two such partnerships that were interested in co-funding some of the entity’s programmes. These partnerships were binding and formalised by memorandums of understanding (MOUs). 

He shared Members’ concern over ICT importation. He agreed it was a concerning issue because South Africans tended to have this concept of outsourcing, rather than having a mind to innovation. In order to turn the situation around, there needed to be innovation to stop importation. However, innovation would be in vain without being complemented by commercialisation. The MICT SETA had been lobbying with black industrialists and business councils to produce and manufacture local products. He questioned why a keyboard, mouse, computer screen, etc, could not be made SA. There were many innovation hubs which were running many programmes which he hoped would create more industries.

On curriculum development, he gave an assurance that industries and sectors had played a big role to ensure that the MICT SETA curriculum was relevant.

The number of learners at the MICT SETA was approximately 11 000.

MERSETA’s Response

Ms Mjikeleso said MERSETA had a regularly awarded contractual relationship with Deloittes for learning. The awarding process was done through an independent procurement agency, so the procurement process was done correctly. Because of the service provided by Deloitte, MERSETA could not change the company regularly, so the usual procedure was that the CEO would extend the contract, which had been allowed at the time. However, after the National Treasury’s new instruction note 3 of 2016/17, which stipulated that any amount above 15% should not be approved by CEO, the matter had to be taken to Treasury. MERSETA had missed that regulation and extended the contract. That was the nature of the irregular expenditure in the presentation. Deloitte had since ceded the programme to a black-owned organisation, but although the process was correct, it was nevertheless categorised as irregular expenditure. 

The other irregular expenditure was related to the legal costs caused by MERSETA’s disciplinary action against the previous CEO. The amount had exceeded R500 000, but had been condoned by National Treasury.

On material adjustments, Mr Adams explained that the AG’s office had sent a general finding to all SETAs before its finalised findings, that SETAs’ non-exchange transfers in their balance sheets were not properly disclosed, so what MERSETA had done was to move one item to another in the balance sheet. It had been a classification issue.

Dr Alex Mashilo, MERSETA, responded to Members’ questions on the Public Protector’s investigation into MERSETA. He said that prior to the Public Protector producing her report, there had been a wide investigation conducted by MERSETA and the DHEST, probing into the matter. The findings from that investigation concluded that disciplinary action needed to be taken against the previous CEO. This finding item was similar to the first recommendation in the Public Protector’s report. In summary, there were allegations of irregular conduct which had resulted in irregular and fruitless expenditure. The Public Protector’s report had focused on the irregular expenditure. Twenty charges had been brought against the previous CEO, and he was found guilty on 11. Most of them were consequential charges. A disciplinary hearing had been held and concluded. By that time, the former CEO had resigned and MERSETA’s accounting authority had appointed Mr Adams as the Acting CEO.

The second recommendation contained in the Public Protector’s report pointed out MERSETA’s weakness in its internal audit, particularly in its HR division. New HR policies had been developed and existing policies had been strengthened. 21 HR policies had been consolidated and approved in March 2020.

The third recommendation was that MERSETA should develop training and strengthen the system to protect whistle blowers. There had been ongoing training on the whistle-blowing system.

Dr Mashilo said that MERSETA had made provisions for cost recovery mechanisms, particularly the recovery on fruitless and wasteful expenditure. A report had been given to National Treasury on the steps that it had taken to deal with irregular expenditure, and its response had been positive.

The Minister of Higher Education had advised that MERSETA’s previous accounting authority could not fill the vacancy. However, an Acting head may be appointed for less than six months in order for a new accounting authority to make the appointment to fill the CEO vacancy under the guidance of the DHEST.

Dr Mashilo agreed that the sector was male dominated, and assured the Committee that MERSETA did take the transformational objective into account, and had an anti-sexual harassment policy in place to protect female learners.

The Chairperson requested a report of the Public Protector’s recommendations and actions taken by MERSETA against the former CEO to be submitted in the next seven days.

Mr Adams gave an assurance that all students and learners linked MERSETA had been paid during the COVID-19 period.

MERSETA had consulted with its staff on salary increases. However, it had not managed to have a discussion on the salary increase freeze yet because of the lockdown period, but he would ensure having the discussion with staff, and hoped that there would be understanding from the unions as well.

MERSETA constantly involved sectors in its curriculum development to ensure that the learning outcomes had the optimal effect. It was engaging with universities and had requested programmes and facilitated processes between sectors and universities to ensure curriculum alignments. It currently had agreements with 15 universities across the country.

He said MERSETA had not started any engagement around the planning to build new innovation and science universities, but it would ensure that it engaged unions and sectors which he believed would be particularly helpful.

He assured the Committee that gender-based violence received attention at MERSETA. It conducted regular visits and one-on-one engagements to identify challenges, and resolved them.

ETDP SETA’s Response

Ms Nxesi said the ETDP SETA had worked closely with all constituents, and had provided a lot of support to educators to be prepared for COVID-19. It had also developed strategies in line with its APP. In addition, it had developed a research bank which reviewed the practices of other countries post-COVID-19 in the basic education sector.

The ETDP SETA had provided training for senior management and provincial officials on digital skills. Guide books had been developed for Grades 10, 11 and 12, with the assistance of the Department of Basic Education. There was sufficient progress with the curriculum, but what needed to be done now was to work on some future skills and competencies which it had identified.

After working with the DHEST to provide training for teachers, the ETDP SETA had discovered that the initial teachers’ training did not address what was happening at the moment. She thought that there was a need to revise teachers’ training, which would possibly result in new qualifications. 

Digitalisation and computing systems were part of the skills which teachers would need. The ETDP SETA had engaged in such training programmes prior to the IR4. For instance, it had a partnership with Vodacom in the Eastern Cape on virtual classrooms. Out of the Department’s 100 virtual classrooms, the ETDP SETA held 30 of those virtual classrooms. The biggest challenge was data access and digital gadgets, especially for those in rural areas. In the Free State, training had been conducted and there had been a favourable outcome.

The ETDP SETA was of the view that there was a need to lobby non-governmental organisations (NGOs) to provide psycho-social support for learners and teachers, given that teachers and Grade 7 and 12 learners were going back to school. She highlighted the need to reinforce social distancing and the washing of hands, which both needed to be integrated into their minds.

The EDTP SETA aims to provide each teacher with a laptop and data access.

Ms Nxesi agreed that inadequate financial skills were a reason of TVET colleges’ failures. She said the skills for finance and chartered accountants would be prioritised in the ETDP SETA. This would begin with the training of the campus management. Management leadership courses had been provided to all the TVET colleges.

For career development, there were career advisors at each TVET college to ensure learners were informed of the changes and challenges in society.

She informed the Committee that the ETDP SETA did not have any certification backlogs.

It paid its learners their stipends by themselves so there was no extra cost, although it was time consuming. All stipends had been paid.

She agreed with members’ comments on curriculum development and the need to ensure the curriculum on offer was relevant to skills demands in the labour market.

Regarding bursaries, there was no duplication because the ETDP SETA was working with Universities South Africa (USAf) and it paid directly to USAf.

The Chairperson asked the NSF to give its response at a different time, as the accounting officer -- the Director-General -- was not present. He expressed his frustration at the conduct of the DG, since he was the accounting authority and had disappeared online without giving an apology. He said that it showed disrespect to the Committee.

Deputy Minister Manamela said he would talk to the DG about what happened and ensure that questions directed to the NSF would be properly responded to.

The Chairperson said he had observed the passion of some CEOs at the SETAs, and commented that such passion could be really helpful in turning things around, as there was a negative view around SETA currently. He hoped the presentations made today would be an indication that SETAs were fully fledged and ready to restore the confidence of South African people. He was optimistic that the SETAs would get there.

The meeting was adjourned.