Transport Education and Training Authority (TETA) and Services SETA Strategic and Annual Performance Plans 2013

Meeting report

Briefing by Transport Education and Training Authority (TETA)
Ms Maphefo Anno-Frempong, TETA CEO, looked at the strategic framework, noting that the ten pillars of skills priorities were decent work, career guidance, recognition of prior learning (RPL), scarce skills, critical skills, Institutes of Sectoral and Occupational Excellence (ISOEs), access, management development, green and research. Everything TETA did was informed by these priorities.
The six strategic goals were to establish a credible institutional mechanism for skills planning and to build and sustain research capacity on labour markets within the transport sector, to increase access to occupationally directed programmes, to strengthen the quality assurance system, to encourage better use of workplace based skills development, to build career and vocational guidance, and to develop and sustain good corporate governance, leadership and operational effectiveness and efficiency.
Research, under strategic goal one, included building an internal research culture and capacity, the development of an R & D strategy, the appointment of an R&D manager, implementation of an R&D strategy and the internal training/mentoring of ten staff.  Research partnerships concerned the labour market intelligence partnership project. This was a three- year programme involving the Department of Higher Education and Training (DHET) and a Human Sciences Research Council (HSRC) research consortium. There were also the International Labour Organisation (ILO) conferences, Department of Transport, trade unions and employer associations in the transport sector. The Sector Skills Plan (SSP) update included sub-sector SSPs researched in consultation with industry, with scarce and critical skills also being researched. The budget for this was R21.525 million.
Middle level skills development, under strategic goal two, included programmes communicated to stakeholders through projects, partnerships and Memoranda of Understanding (MOU). There was also an emphasis on increasing learner access to Further Education and Training/Higher Education and Training (FET/HET) institutions through multi-year funding to full qualification, for up to four years. As a result of this, the length of the qualification was taken into cognisance. The number of learners targeted for learnerships was 1 500, with 4 000 learners targeted for skills programmes, 400 for bursaries, and 1 300 for artisan training.  There would be 18 (two per province) road shows/workshops, with a rural focus on HIV/Aids awareness campaigns and capacity building. The total budget for this was R 381.806 million.
The current status of the Education and Training Quality Assurance (ETQA) under strategic goal three involved the Development Quality Partner (DQP), with 17 occupational qualifications, an application to become an Assessment Quality Partner and the training of 17 learner quality developed facilitators. For 2013/14, the plan was to align sector needs with the Quality Council for Trade Unions (QCTO) landscape requirements, develop five occupational qualifications, encourage providers to include green economy training in training material through provincial road shows (where the Department of Environmental Affairs was present), and to accredit providers, register assessors, moderators and trade test officers. There was capacity building and training targeting 200 accredited/prospective providers, 200 assessors, 100 moderators and 200 learning material developers. There was also a reliable provider database, linked directly to the TETA Seta Management System, which was available on the TETA website.
TETA had approached the following organisations to become an Institute of Sectoral and Occupational Excellence (ISOE): South Africa Airways (SAA), Denel, Transnet School of Rail and SAA Express, in collaboration with the Department of Public Enterprises (DPE), South African National Taxi Council and National Taxi Alliance and the Passenger Rail Agency of SA (Prasa), in collaboration with the Department of Transport.  Eight FET colleges had been supported, in collaboration with the Department of Transport, to provide national certificate vocational and to become an ISOE, by up to R1 million each. These colleges were eThekwini, Umfolozi, Capricorn in Limpopo, Orbit in North West, College of Cape Town in the Western Cape, Letaba in Limpopo and Motheo in Free State. 
Ms Anno-Frempong noted the critical recognition of prior learning (RPL) model had been researched, designed and workshopped.   An amount of R14.684 million had been budgeted for training in this area.
Creating employment, under strategic goal four, aimed to encourage youth and increase access to workplace learning, with multi-year funding to full qualifications for up to four years. The target was 2 500 learners attending learnerships and 1 000 participating in skills programmes. Middle managers in all chambers of the International Leadership Development Programme (2012) were targeted.  There was a focus on strategic projects through industry/stakeholder collaboration, formal qualifications for small business development and assisting with lay-off schemes for distressed companies. The amount budgeted for this was R210.305 million.
The career guidance target, under strategic goal five, was to increase student access to the transport- related fields. There were 10 000 career guidance booklets, a minimum of one career guidance exhibition per province, 1 000 learners in workplace integrated learning, one school per province supporting maths and science, one teacher development project per province, the establishment of partnerships, direct learner support for a number of students and participation in a number of school camps. The total budget was R71.951 million.
Under organisational development for strategic goal six, the organisational development and performance strategy involved a staff skills audit, employee wellness, staff development, team building, a customer survey, and marketing and communication.  Other imperatives included building repairs and renovations, and an integrated IT system. This budget was R 29.131 million.
In order to enable FET colleges to provide transport-related studies, TETA had allocated funding to five colleges that had piloted the national certificate vocational (NCV) in transport studies in 2012/13. For the 2013/14 financial year, three additional FET colleges had come on board.  TETA had visited and had meetings with all FET colleges, as a result of which TETA had become a lead SETA in Limpopo. TETA had since signed MOUs with these colleges.  
In terms of rural development, in the Maluti-a-phufung district, under the Adult Basic Education and Training (ABET) project, ten beneficiaries had been supported.   In Amathole, they were looking for ten beneficiaries for a driver skills programme, while in Maluti-a-phufung they were supporting two learners with a bursary for a diploma in road transport management.   In Tzaneen, six beneficiaries were undergoing learnerships in transport operations.  In Amathole, 22 beneficiaries were part of professional driving learnerships and there was also a bursary in human resource management.  20 beneficiaries were supported in Ellisrus in Limpopo for professional driving learnerships.  In Sisonke, KZN, there were ten beneficiaries to operate a heavy rigid vehicle, ten beneficiaries for a National Certificate (NC) in professional driving, 15 beneficiaries for a new venture creation and 50 beneficiaries for Adult Education and Training (ABET). In Vhembe, Limpopo, there were 19 beneficiaries for a NC in professional driving, nine beneficiaries in OR Tambo district for workplace experience and graduate placements, and 20 beneficiaries in the same district doing workplace experience and professional driving.
Ms Anno-Frempong discussed monitoring and evaluation, stating that TETA had adopted the monitoring and evaluation (M & E) framework -- a government-wide M & E framework aligned with Treasury regulations.  
Turning to the impact of the regulations on the budget, she noted TETA had received more money as a result of the discretionary levies increased.   In the costed annual performance plan (APP) summary, the budget took into account the interest expected to be earned for the 2013/14 financial year (R37m).  The budget also accounted for the additional funds that they expected to receive as a result of the change in grant regulations. The new total DG funds available were R375m and the accounting authority had approved on-funding over the duration of the qualification (multi- year) period until completion. The total costed APP 2013/14 was therefore R732m.
Flagship projects involved stakeholder engagement or collaboration.   Through the South African Graduate Development Agency, 1 000 unemployed graduates were to be placed.   The International Leadership Development Project, funded by Fidentia, would  be involved with supply chain and logistics, and a new venture creation for the taxi industry. Under the flagship projects there were also three Adopt-a-School/rural developments per province, direct bursaries for top achievers and learners with financial needs, a project for the disabled in the Free State and R30m additional assistance for the National Student Financial Aid Scheme (NSFAS).
Fidentia Curatorship
Mr Alan Jeftha, Attorney, explained that the investment mandate required Fidentia to invest TETA funds with A-rated financial institutions. The mandate and investment had been concluded by the TETA CEO at the time, Mr Piet Bothma, with board approval. The investment at the time was R203 million.

Mr Jeftha said TETA had received from Fidentia and Arthur Brown monthly statements showing investment growth. TETA had requested a tranche repayment, and Fidentia had repaid R15 million.  The balance of R185.3 million had remained invested with Fidentia, and no further repayments had been made to TETA, despite repeated requests.
TETA had submitted claim to the curators for R185.3 million, which was approved by the curators. In the first distribution account, the curators had paid to TETA R33.37 million and there were further expected payments from the second distribution to be paid by the curators in due course. The curators were still to sell a number of assets -- for example, the SANTE property in Paarl. The curators were still litigating and one substantial litigation claim was for R104 million. They would be filing further periodical reports with the court and the Financial Services Board (FSB), and the next report was due towards July 2013. Graham Maddock and Steven Goodwin had been convicted and were to serve prison terms, while the state’s case against Piet Bothma was part-heard and continuing.  Arthur Brown had pleaded guilty to fraud charges in respect of TETA and MATCO, and had received a sentence of a fine, which the State was appealing. TETA had also assisted with the prosecution and had given statements,  Dalpat Naran, TETA’s former chief financial officer, had testified for the State in the Brown prosecution. Evidence by Naran was that TETA had suffered a loss of R185 million due to the investment mandate not being carried out (which Brown admitted to), funds had been misused and no investments had been made as per the mandate.  This was considered fraudulent conduct and evidence from Maddock was that Fidentia had allegedly paid R6 million and that Bothma had benefited from such payments.  TETA had suffered a loss, but had carried out its mandate albeit with lesser funds.  R33.37 million recovered from curators was being applied towards training. The TETA board had approved the utilization of the R33.37 million for the International Leadership Development Programme (ILDP). The beneficiaries within the programme were the stakeholder employees within the transport sector. The roll out process to this programme had already begun, for the benefit of the eight sub sectors.
Discussion
The Chairperson noted that the APP presented to Parliament had been unsigned. He was concerned about this as any expert in IT could produce this document and claim it was TETA’s. He said Parliament required a signed document. 

Mr S Makhubele (ANC) wanted to know more about the investments as the matter remained an issue of public interest. He wanted to understand what informed the investment and why such a lot of money was involved -- as if they were a money-making kind of organisation. He asked for an explanation as to what sort of criteria the “adopted” schools chosen were based on, and what criteria were used to determine if companies were in distress for the lay-off schemes.  What capacity did TETA have to expand the eight FET colleges?  He reminded the Chairperson of his interest in the recognition of prior learning (RPL) issue, but said he would allow other Members to raise questions on that.  However, if they did not, he might need to ask about it.
Ms N Gina (ANC) questioned career guidance, specifically whether it was a new thing to be started or if it was not, and what results had come of it.   TETA needed to expand on the number of schools targeted, as one school per province was not sufficient. She was interested in RPL, and noted this was a most problematic area throughout and asked what TETA would be doing in this regard.  The taxi industry package delivery programme was good, but the Committee needed to understand more about it. On the Fidentia matter, she asked about TETA’s investment money and what they wanted to do to serve as a warning for other TETAs.
The Chairperson asked about the current status of investments with other institutions. He noted that historically, SETAs were proud of their investments.
Ms S Sibiya (ANC) asked if there was any partnership with SETA and the Wellness SETA in respect of HIV/Aids campaigns.  How would these campaigns be distributed to all nine provinces?
Mr C Moni (ANC) asked about the development of staff, programmes under rural development, the placement of unemployed graduates and the project for disabled people in the Free State. On Fidentia, he asked if TETA was going to get the amount of money they had claimed. 
Mr L Bosman (DA) was concerned about the skills planning that was still outstanding.  Why was such a lot of money still being spent on research -- was there not an easier and quicker way to get the information?  He was worried that a skills audit was still needed. He questioned whether contract work was necessary, or were they just temporary workers. On the Fidentia matter, speaking as a chairman for the board of a private provident fund, he felt the process needed to be open and presentations needed to be made to the board so that they could decide on the best investment, so he could not understand how TETA’s previous CEO could make an investment without informing the board.   It was a huge loss as they would not get all their money back. Was the action taken just going to be accepted?
The Chairperson felt a comprehensive report on the Fidentia matter should be compiled for the Committee so that they could understand the context and background to the decision taken, who was involved and the correspondence between TETA and Fidentia.  This would allow the Committee to formally respond on the matter when they needed to. He suspected not all the money would be recovered, and the reality of this would need to be accepted at some time.
Ms A Lotriet (DA) asked what the balance/ratio between long term and very short learning programmes/courses was, as the latter did not realistically amount to much.  They did not allow students to articulate to other courses. She was concerned about certificates not being issued, and the Minister had advised that by the end of June, the SETAs had promised that all outstanding certificates would be issued. She found it worrying that one of the reasons given for the certificates not being issued was that some of the service providers had just disappeared. She asked how this was possible and if TETA had any such experiences, what they had done. 
Mr S Mayathula (ANC) questioned the funding involved in the Fidentia matter, as well as TETA’s strategic goal two (middle-level skills development).
Mr Makhubele asked if there was any assurance that the situation of Fidentia would not recur. He noticed the presentation did not speak about challenges. He wanted to hear about these so that Members received a balanced picture.
The Chairperson trusted TETA could synchronise all the issues raised by the Members, reminding them they had only 15 minutes to respond due to limited time.
A Member apologised for coming late. He questioned the extent to which the Fidentia matter had affected the core business of the institution. He asked about the institution’s spending on legal costs and if there were other investments, or future prospects of investment, the institution was involved in and if so, what security measures they were putting in place.
A member of the TETA delegation apologised for the APP not being signed and said it would be corrected. He said the Fidentia matter had first occurred in 2006, and the presentation was an update.
The Chairperson responded that this was the first time the Fidentia matter had come before Parliament. He had personally discovered it first when reading a newspaper on a flight from Cape Town to Johannesburg, so it could not be assumed the Members were up to date on it.
The member of the TETA delegation said a comprehensive report would be compiled and it would help TETA itself. On the issue of investments, it was true that TETA had millions of rands invested - money was first prioritised for training, and this was shown in the budget.  A brief report could be put together by the CFO to explain where money was currently being invested, and which sums were involved.
Turning to other matters, he said an investigation had been conducted by a private company and the information had been provided to the board. He noted however the matter was still sub-judice.  The Chairperson explained the matter of accounting to Parliament never became sub-judice.  Only a judge or a magistrate could decide of a matter was sub-judica or not. As they were before the Committee, they needed to provide the Committee with information. There was legislation to protect people, required to provide Parliament with evidence, from criminal liability. He said the notion of “sub-judice” was used by South Africans to circumvent accountability when it was in fact becoming an increasingly obsolete rule, given the extensive media coverage on most cases. Judges were trained people using evidence brought before them, not taking media coverage into consideration.  The concept of “sub-judice” did not apply to Parliament.
The Chairperson felt that judging by the SETA’s attitude, perhaps an inquiry into the Fidentia matter should be conducted and everyone involved could be called to account. He asked the legal representative to summarise the matter.
Mr Jeftha said a comprehensive report would be compiled, including risk management processes, monitoring and evaluation and what they had learnt from the process, as well as how management had related these issues to the board. This would give the Committee a full picture in terms of surplus funds and Treasury regulations with the PFMA, and from this the Members could see whether TETA was in a good position or not. He explained that in terms of the legal costs, the attorneys had worked on a reduced hourly basis. In 2006, during the first year, the costs were around R75 million and now costs were at around R100 to R150 million, which covered both Fidentia and non-Fidentia matters. For the R185 million approved, this showed that the curators simply accepted the extent of TETA’s claim, but what got paid out was based on a percentage of all the claims made to the curators.  In context, the R33.37 million first paid out was paid out to all the investors.
The Chairperson welcomed the Chairperson of the Standing Committee on Appropriations.
Ms Maphefo Anno-Frempong explained the criteria used for the “adopted schools” programme. She said TETA worked with the Department of Basic Education to identify schools that were vulnerable and placed them on their schooling plan for additional school improvement support through a needs analysis. Once that was done, a Memorandum of Cooperation and Agreement was signed to see, together with stakeholders, what could be provided to the schools. They were currently focused on each province per region and this year, more regions were being looked at. The limit of three was due to budget constraints and the fact that other partners in the process, like Transnet, also followed the “Adopt-a-School” programme.
Referring to challenges, she said these were budgets and the cooperation of schools.
Regarding the issue of the lay-off scheme, she said companies could claim to be in distress only if the claim was confirmed by the Commission for Conciliation, Mediation and Arbitration (CCMA) and TETA would then work through the CCMA with the company and unions involved.  In the sector, two companies had been confirmed by the CCMA to be distressed. TETA had then worked with the National Skills Fund to train these people with long-term skills so they could be placed somewhere else.
In terms of the capacity of FET colleges, the R1 million was given to the FET colleges for a year to provide them with experienced and qualified tutors and to provide practical experience, in the form of simulators for the learners, even though this budget was not enough. Capacity was provided in a three tier environment, with the DoT taking the lead, together with the DHET.  For career guidance, the process was not a new one but was simply being improved upon in terms of the subject choices made by Grade Nine learners, and capacitating the Life Orientation teachers. To encourage these learners, people already in the field were brought to career guidance exhibitions.
On the issue of RPL, the taxi industry, as well as motor and diesel mechanics, had been identified as an area for RPL training to get qualifications. For the parcel express delivery sector and cooperatives, TETA was working with the Department of Transport (DoT) to encourage the taxi associations to register as cooperatives through the process of revising the cooperative model. The plan was for the express parcel delivery process to work once the taxi associations were registered as cooperatives, with even the distribution of government textbooks being considered, as taxis went everywhere.
Returning to the issue of Fidentia controls, she outlined that TETA was required by law to invest all their funds in public deposits in the Reserve Bank, so there was no chance SETA would be in that kind of situation, but a comprehensive report would be compiled on the matter. TETA was always open to cooperation with sister SETAs.
On the issue of staff development, she assured the Committee Members that TETA staff had the relevant qualifications and, like with any organisations, they kept abreast of changes as and when they came. An example was that the CFO was constantly undergoing training.  The R5 000 paid toward graduate development was a stipend paid to the individual when they were placed in a workplace.  Most of the graduates placed were absorbed into the institution.
She undertook to provide the Committee with a report into TETA’s disability programme in the Free State as she was mindful of the lack of time. This would show the areas in which the programme was run and the numbers involved.
One of the major gaps found in the area of research was whether the research was credible and able to be utilised to the extent that the industry required. This was done through SSPs to guide investments. TETA had employed an R&D manager to manage this area to ensure credible research. They were also working with the University of the Western Cape (UWC) as a research partner, although they were more focused on internalising this capacity so as not to depend solely on outsourcing.
The skills audit in the APP was due to TETA undergoing a restructuring process to identify places where new staff members could be deployed as a result of the new TETA structure. There were a number of contract workers, based on budgetary constraints. These workers were employed just for the duration of a certain project. 
The biggest challenge was budgetary constraints, especially as this was a complex SETA divided into eight sub-sectors, each with its own needs. Because of budget limitations, trade-offs were sometimes needed, like in the case of contract workers.
On the issue of certificates and study programmes, short-programmes were usually for the regulated industries. She noted the problem of service providers not always being able to provide them with proof that the training or course was credible. She was not aware of any cases of providers disappearing. As their research partner, UWC would be conducting an impact/trace study into the number of learners who claimed to have gone for training but had no credible proof of it. The study would go as far back as 2005 and was expected to be completed at the end of the year. The challenges were credible data, budget limitations and the negative publicity as a result of Fidentia, which had made her first two years as CEO difficult. Along with the board, she had visited all the provinces to conduct road shows to confirm that TETA was getting its house in order and was making improvements. Stakeholders often considered negative publicity as a threat. As a result of these road shows, a number of improvements had come about. 
The member of the TETA delegation explained the issue of 400 bursaries and said that according to their funding model, funding was awarded to 71 000 students throughout the qualification period of three years.  This enabled performance to be checked.
The Chairperson said the aspect of investments should be included in the report. He had met with the Auditor-General’s office in Parliament yesterday to get a briefing on the performance of SETAs. It seemed SETAs understood the issue of compliance up to a certain extent, but he noted there was also an emphasis on auditing the performance of SETAs and this would be the focus of the Committee -- taking into account delivery performance, and not simple reportage on how much money spent.  He was just preparing them for this process and suggested they warn other SETAs.  The SETAs should not assume the Committee was knowledgeable on their matters, but it was highly informed about their operations and as a Committee, they knew where the challenges were.
He commended them for the document, even though the signatures were missing. He suggested they sit down with the AG to work out some issues. The Committee was filled with experts such as doctors, legal experts and professors, so the excuse of “complex information” would not work.
Presentation by Services Seta on Strategic and Annual Performance Plan
The presentation provided background from 2011, when the administrator had had to build interim capacity within SSETA to attend to financial and administrative matters. The SSETA had put in place a strategic plan which was aligned to the National Skills Development Strategy (NSDS III), and which set out the work required to reposition the SSETA to deliver on its mandate.

A partnership had been entered into with an external research organisation to assist the SSETA research team to develop an SSP that would take the sector forward.  An application had been made to the Department of Higher Education and Training (DHET) to have this submitted in February 2012, and this had been approved and duly submitted. It was a work in progress, but it was a big improvement.  The strategic plan,annual performance plan and budget had been submitted in August 2011 based purely on alignment to NSDS III and the key organisational priorities.  The SSETA strategic plan had been approved only in January 2012, with two months left to the end of the financial year. All these developments had led to huge delays in rolling out programmes for 2011/12, which inevitably had had a knock-on effect on the roll out of 2012/13 programmes as well.

In the SSETA sector there were 16 sub-sectors, including business services (consulting etc), property services (estate agents etc), and household and personal services.   SSETA was part of the wider services sector that included transport, financial, ICT and other services, such as education and health care which together made up 65% of gross domestic product (GDP).

The key strategic themes included restructuring the SETA into six chambers serving the needs of  the16 sub-sectors or industries- clustering the 70 Standard Industrial Classification (SIC)-coded industries located to the SSETA. In each sub-sector the needs of large, medium and small enterprises would be identified and agreed interventions to enable growth and job creation developed.   Scarce skills (occupations where posts cannot be filled by qualified and competent people) and critical skills (gaps in capacity of employed staff) would be prioritised..

Steering resources to meet needs meant increasing sector and sub-sector knowledge by increasing the quality and quantity of Workplace Skills Plans (WSPs) and ATRs, better quality researchers, recruiting skilled people, contracting specialist researchers and partnerships and structuring sub-sector consultation into an annual programme of Chamber work. It also meant reviewing policies, processes and systems to ensure greater transparency, consistency in targeting resources to sector needs, including scarce and critical skills and the delivery of education and training through focused projects to enable greater efficiency, effectiveness and accountability.

The strategic goals included focus on effective governance, management and financial management, better understanding of the sector, effective  strategies to support the sector and sub-sector development, including small businesses, raising skills levels to support growth and employment, working with government and other SETAs to build a services sector that supported inclusive growth, including rural areas, the provision of quality education and training that met sector needs.

An overview of the SSETA 2012/13 APP and key achievements against pre-determined objectives was given. The aim of the governance programme was for a fully functional accounting authority and committees.  The progress and challenges were the revised constitution and all that was left was for the new board to take over responsibility from the Administrator from 1 July 2013.. For the administration programme, the aim was restructuring to develop a strategy and a new delivery model.  SSETA had been successfully restructured during 2012 and most systems and processes were now in place, although some gaps and weaknesses remained, including, the appointment of a Chief Operating Officer.  A strengthened Project Management Office (PMO) would address the remaining challenges. The results of the new delivery model were already being evidenced by the overwhelming response to the Expression of Interest (EoI), and the demand generated was enough to meet 2012/13 and 2013/14 targets.

SSETA’s aim with the mandatory grants programme was to increase employer participation. The progress made was that the target had been 3 300 WSPs, of which just over 3 000 had been received in June 2012. The challenge now was to increase these in June 2013, including Pivotal plans in line with the SETA grant regulations. The next steps were for increased engagement with sub-sectors, which was expected to result in increased submissions of WSPs. The discretionary funded programmes were aimed at improving effectiveness. In November 2011 the SSETA had embarked on a tender process which had resulted in 6 900 of the target of 26 000 learners being enrolled. The experience of this tender process had resulted in a realisation that this was not the best approach. The 2013 EoI process and special projects would help to deliver the outstanding training. The huge response to the 2013 EoL process by the sub-sectors meant that there was enough demand to meet both the 2012/13 and 2013/14 targets.

The sector skills planning and research programme was aimed to thoroughly research Sector Skills Planning (SSP) to inform plans. A partnership had been entered into with an external research organisation and the SSETA research team had been supported to develop a new SSP. The SSP had been approved and provided a good basis for development. A contract was about to be signed to develop a supply and demand forecasting tool for the sector with one of the top universities in the country. Further research would go into various baseline studies, as well as understanding the seven dynamics (people in occupations nationally, provincially, by age, gender, disability status, race qualifications as well as occupations scarce/critical skills) in the sectors. For the sector development programme, the aim was to provide accreditation and to address learner certification backlogs, qualifications and programmes developed to address sector needs. The progress made was that some 600 provider accreditation had been processed. Over 12 000 learner achievements had been uploaded and certificates awarded.  The backlog had almost been cleared. The problem remained of a large number of learner’s in SSETA-funded programmes, such as artisans, not being certificated. A remedial project was to identify all such learners, and programmes were being put in place to address their needs. Ten qualifications had been identified for review and development, and a programme was in place to review learnerships and develop skills programmes to address scarce and critical skills needs.  On-going attention would be paid to learner certification backlogs and a remediation project was under way to fast-track the compliance completion of the artisans as well as the “unfunded” learners challenge that the SSETA was facing. Consolidation of the various lists of scarce/critical skills from the sector was receiving attention, with a view to developing a credible sector-wide list of scarce/critical skills.

The aim of the sector development programme was for Further Education and Training (FET) collaboration. 12 FET colleges had been identified and MOUs signed.  An office had been opened in Upington as part of the partnership with Northern Cape colleges, programmes were being funded in six rural districts through colleges,  and 250 learners were already enrolled through this partnership.  A partnership had been forged with the successful Blackburn College in the UK, and assistance was being provided to three FET colleges.  A partnership with HAMK in Finland was assisting with entrepreneurial training. The next step was to build capacity in the FET sector in areas of governance, administration, financial and project management, facilities, programme design and lectures training. Most of the colleges were in rural areas, giving the SETA a platform to deliver programmes in areas where they were not available before. Funding provided included bursaries, accommodation and other support for rural learners enrolled in FET colleges.

Dealing with disability matters, there were partnership agreements with Disabled People South Africa and a sector disability advisory board had been established to advise SETA.   The programme for graduates with disability internships was in place, with 100 learners in Limpopo already enrolled in 2012. A further 200 learners in the North West and Eastern Cape had been enrolled in 2013. The next step was for the FET, rural and disability projects to be cross-cutting. Disability projects had a rural bias and vice versa. A further 600 people with disabilities would be placed in the remaining provinces to complete the target of 900 before the end of 2013.

For the rural development aim, six districts had been identified the Eastern Cape, Free State, Limpopo and KZN so as not to spread themselves too thin. Long-term agreements had been reached to fund various programmes to meet local needs. The next steps were cross-cutting rural development projects that involved municipalities, local business and so on. For the monitoring and evaluation programme, the aim was for an effective organisational performance management system and the establishment of a sound monitoring and reporting system. The performance of the SSETA during NSDSIII could not be assessed because of inadequate data.  However, an analysis of spending had been done and some forensic audits had been conducted. Lessons had been learned that informed the new delivery model. A monitoring and reporting system was in place that now enabled the SSETA to report accurately on programme implementation. The next step was for impact studies to be carried out, while on-going monitoring, evaluation and reporting were being institutionalised. A service provider was being contracted to develop a comprehensive Management Information System.

The need to effect the restructuring of the SETA and putting in place the required institutional mechanism had led to the administration beinge subsequently extended in April 2013 for another three months until 30 June.  SETA now had the task of delivering on the backlog of targets dating back to 11/12 and 12/13, parallel to the targets set for the 13/14 financial year.  During this period, an intensive review of the operations, structures, policies of the SETA had been undertaken, resulting on huge changes. These included the appointment of a team of Executive Managers and a Chief Operating Officer (CEO) as well as designing a new structure and model able to deliver on the mandate of the SETA as required by NSDSIII, building internal capacity to deliver on functions that were outsourced to intermediaries in the old model, putting in place the institutional arrangements to enable the new model of delivery, and development of new policies and procedures that were aligned to the new delivery model.

With the old model, the SETA put out calls for proposals, lead providers/ employers/labour brokers put in tenders, successful bidders were awarded contracts for a certain number of learners, the contractor “placed” learners in “host” employers, recruited learners and subcontracted training providers, and the contractor reported on learner numbers enrolled and completing.   The old model was found to be onerous and played an intermediary role, preventing SSETA from interacting so a new model was introduced.  With the new model, the SSETA developed project plans to address sub-sector and cross-cutting sectoral needs, targets were agreed for each project and set out in the APP, with budgets, an EoI process was advertised and services sector employers applied for grants and/pr access to SSETA programmes, and the SSETA approved grants and entered into agreements with employers and providers to deliver programmes.

The change had not been easy. Internally, a paradigm shift had been needed to enable managers to adapt and plan for the new way of working. Some had left the SSETA at the start of 2013 as a result. Capacity that had been outsourced for many years needed to be established. There was no experience of programme implementation and there was a skills gap which required new people to be brought in. There had been resistance to the changes, both internally in the SSETA and externally amongst stakeholders. Externally, those who built their business model on the SSETA outsourced model had fought to keep the old ways of doing things  In tenders and EoIs, labour brokers and training providers continued to see the SSETA as an “ATM”, or business opportunity. Employers and stakeholders had welcomed the changes, but were waiting to see what they were. Many still wrote off their levies as a tax and did not want to work with the SETA.

A legacy of the artisans remediation showed that during the period from 2007 to 2010, the SSETA had paid out R1.6 billion in contracts to 150 companies under the old model. Of the R1.6 billion, R800 million had gone to 20 intermediaries. An evaluation of the apprenticeship/trade programmes had revealed that there were SSETA funded programmes involving a significant number of apprentices who had not competed their training and hence had not received their trade certificates. Poor monitoring practices by the previous management had resulted in the use of providers whose accreditation status was subsequently found to be non-compliant.  

A key indictment of the system that was solely focused on the achievement of numerical targets, had to be the SSETA’s artisans backlog legacy. Intermediaries had sub-contracted employers and providers, many of whom were among the 20 receiving R800 million -- they essentially contracted each other.  Of the 5 000 artisans trained in this way, some 2 000 remained without their trade test. This was now a crisis that the SSETA had to address as a remedial project. Some R400 million had been spent on business administration and new venture creation learnerships, where unemployed people were trained/RPL’d but no businesses could be found that were established or supported.  Skills development providers were found to be non-complaint with the accreditation requirements to deliver the training, and the training received had been unacceptable. The only evident economic development derived was the expansion of the businesses acting as intermediaries.

A project aimed at addressing the certificates backlog had subsequently been set up in January 2013 with the help of DHET and Indlela. So far,10 90 apprentices that did not qualify, but were on the system as part of those waiting for certification, had been identified. Through this remediation programme, a total of 8 497 files had been allocated, and alphabetised per service provider per trade.  A total of 1 181 certificates had been printed and signed, and sent to learners and providers. A comprehensive remediation project was under consideration, which would delve deeper into this problem and enable the backlog to be addressed.

For the 2013/14 overview of the budget, the total revenue was R1 507 million, which covered total expenditure.   The SSETA’s target was to provide learning interventions to a total of 35 192 learners, at a cost of R945 million.

Discussion
Mr Bosman was disappointed about the lack of discussion time. He was concerned about the administration process not being concluded.  He was shocked at the poor organisational environment of the SSETA, as stated in the APP, combined with the poor public perception of the SSETA. He was concerned that no solutions had been discussed in the presentation and especially the issue of finality. He was also worried about past fraudulent incidents in the SSETA, while there had been no report back on how far investigations into the matter had proceeded or what was being done about it.  A full day with SSETA was needed so that Members got a full understanding.

Ms Lotriet felt the plan to address the artisan backlog was a good thing, but the reality of the matter was concerning. She gave a practical example of a student doing plumbing training, only to find out the place of study was not accredited. This person then lost out on two years of income and was now unemployable. She wanted to know who would take responsibility for this.

Mr K Dikobo (AZAPO) questioned the training and capacitating of the new board that would be taking over.

Mr Makhubele asked if the institution was ready for whoever could take over.  He asked how they dealt with the challenge of small business owners needing to go for training while running their businesses at the same time.

The Chairperson noted there were many challenges to be faced.

A delegate from the Department said the new SETA COO was appointed by Cabinet, but would begin only in July.  The board was being dealt with by the Minister, and they would hopefully see the finalisation of the SSETA board in the next two weeks.

The SSETA representative said significant progress had been made in closing the “black hole” they had inherited. More money would be spent in the process of remediation and checking that qualifications were certified, even though it was a laborious process. The reason for this was that there was some collusion between members of the SSETA and service providers and employers outside, with learners sometimes also part of the collusion. It was sad, but was a reality that needed to be dealt with. The relevant systems were in place, which would allow the accounting officer and executive authority to move forward and achieve the 2016 goals of the SSETA.

The SSETA COO said preparatory work had been done by SSETA to accommodate the new board. She said the sector was made up by mostly SMME companies, with some so small they opted not to participate in skills development. Work had been done on key challenges and to identify the areas in which to help these small businesses, but this process would be reflected only in the 2014/15 report.  The new service delivery model was particularly geared toward SMMEs, through the EoI process. For the process of certification, she explained the backlogs were due to systemic problems and the fact that SSETA did not have direct contact or direct recourse. This resulted in a high number of learners not being certificated after the process. A number processes introduced in the new service delivery model, like monitoring processes and ensuring coordination, would improve learning interventions. Accrediting providers was an indication of the potential to deliver quality programmes. There were a number of reasons why providers defaulted -- for example, it was cheaper to take the quick route. From this basis, monitoring was important to determine whether providers were performing and to take recourse.

The Chairperson said the Members of Parliament could deal with sensitive matters and he would enable Members to access copies of the reports.  The Committee would intervene if they needed to.   A new journey of recovering money from wasteful and fruitless expenditure would begin, to use auditing language. He complimented the administrator for the task undertaken.  The report presented showed the prospect of recovery. He appreciated this work, and wished them well in their future endeavours.  

The meeting was adjourned.